H. R. 3666—15
the supportive services may include congregate services for the
elderly and disabled, service coordinators, and coordinated edu-
cational, training, and other supportive services, including academic
skills training, job search assistance, assistance related to retaining
employment, vocational and entrepreneurship development and sup-
port programs, transportation, and child care: Provided further,
That the Secretary shall require applications to demonstrate firm
commitments of funding or services from other sources: Provided
further, That the Secretary shall select public and Indian housing
agencies to receive assistance under this head on a competitive
basis, taking into account the quality of the proposed program
(including any innovative approaches, the extent of the proposed
coordination of supportive services, the extent of commitments of
funding or services from other sources, the extent to which the
proposed program includes reasonably achievable, quantifiable goals
for measuring performance under the program over a three-year
period, the extent of success an agency has had in carrying out
other comparable initiatives, and other appropriate criteria estab-
lished by the Secretary): Provided further, That from the foregoing
$60,000,000, up to $5,000,000 shall be available for the Tenant
Opportunity Program, and up to $5,000,000 shall be available for
the Moving to Work Demonstration for public housing families.
Of the amount made available under this heading, notwith-
standing any other provision of law, $20,000,000 shall be available
for grants to entities managing or operating public housing develop-
ments, federally-assisted multifamily-housing developments, or
other multifamily-housing developments for low-income families
supported by non-Federal governmental entities or similar housing
developments supported by nonprofit private sources, to reimburse
local law enforcement entities for additional police presence in
and around such housing developments; to provide or augment
such security services by other entities or employees of the recipient
agency; to assist in the investigation and/or prosecution of drug
related criminal activity in and around such developments; and
to provide assistance for the development of capital improvements
at such developments directly relating to the security of such devel-
opments: Provided, That such grants shall be made on a competitive
basis as specified in section 102 of the HUD Reform Act.
Of the amount made available under this heading, notwith-
standing any other provision of law, $30,000,000 shall be available
for youthbuild program activities authorized by subtitle D of title
IV of the Cranston-Gonzalez National Affordable Housing Act, as
amended, and such activities shall be an eligible activity with
respect to any funds made available under this heading.
Of the amount made available under this heading, notwith-
standing any other provision of law, $60,000,000 shall be available
for the lead-based paint hazard reduction program as authorized
under sections 1011 and 1053 of the Residential Lead-Based Hazard
Reduction Act of 1992.
For the cost of guaranteed loans, $31,750,000, as authorized
by section 108 of the Housing and Community Development Act
of 1974: Provided, That such costs, including the cost of modifying
such loans, shall be as defined in section 502 of the Congressional
Budget Act of 1974, as amended: Provided further, That these
funds are available to subsidize total loan principal, any part of
which is to be guaranteed, not to exceed $1,500,000,000, notwith-
standing any aggregate limitation on outstanding obligations
H. R. 3666—16
guaranteed in section 108(k) of the Housing and Community Devel-
opment Act of 1974. In addition, for administrative expenses to
carry out the guaranteed loan program, $675,000 which shall be
transferred to and merged with the appropriation for departmental
salaries and expenses.
HOME INVESTMENT PARTNERSHIPS PROGRAM
For the HOME investment partnerships program, as authorized
under title II of the Cranston-Gonzalez National Affordable Housing
Act (Public Law 101–625), as amended, $1,400,000,000, to remain
available until expended: Provided, That $21,000,000 shall be avail-
able for grants to Indian Tribes: Provided further, That up to
0.5 percent, but not less than $7,000,000, shall be available for
the development and operation of a management information
system: Provided further, That $15,000,000 shall be available for
Housing Counseling under section 106 of the Housing and Urban
Development Act of 1968.
HOMELESS ASSISTANCE FUNDS
For the emergency shelter grants program (as authorized under
subtitle B of title IV of the Stewart B. McKinney Homeless Assist-
ance Act (Public Law 100–77), as amended); the supportive housing
program (as authorized under subtitle C of title IV of such Act);
the section 8 moderate rehabilitation single room occupancy pro-
gram (as authorized under the United States Housing Act of 1937,
as amended) to assist homeless individuals pursuant to section
441 of the Stewart B. McKinney Homeless Assistance Act; and
the shelter plus care program (as authorized under subtitle F of
title IV of such Act), $823,000,000, to remain available until
expended.
HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS
(INCLUDING TRANSFER OF FUNDS)
For carrying out the Housing Opportunities for Persons with
AIDS program, as authorized by the AIDS Housing Opportunity
Act (42 U.S.C. 12901), $171,000,000, to remain available until
expended: Provided, That any amounts previously appropriated for
such program, and any related assets and liabilities, in the ‘‘Annual
contributions for assisted housing’’ account, shall be transferred
to and merged with amounts in this account.
FEDERAL HOUSING ADMINISTRATION
FHA—MUTUAL MORTGAGE INSURANCE PROGRAM ACCOUNT
(INCLUDING TRANSFERS OF FUNDS)
During fiscal year 1997, commitments to guarantee loans to
carry out the purposes of section 203(b) of the National Housing
Act, 
as 
amended, 
shall 
not 
exceed 
a 
loan 
principal 
of
$110,000,000,000: Provided, That during fiscal year 1997, the Sec-
retary shall sell assigned mortgage notes having an unpaid principal
balance of up to $2,000,000,000, which notes were originally insured
under section 203(b) of the National Housing Act: Provided further,
That the Secretary may use the amount of any negative subsidy
H. R. 3666—17
resulting from the sale of such assigned mortgage notes during
fiscal year 1997 for the purposes included under this heading.
During fiscal year 1997, obligations to make direct loans to
carry out the purposes of section 204(g) of the National Housing
Act, as amended, shall not exceed $200,000,000: Provided, That
the foregoing amount shall be for loans to nonprofit and govern-
mental entities in connection with sales of single family real prop-
erties owned by the Secretary and formerly insured under section
203 of such Act.
For administrative expenses necessary to carry out the guaran-
teed and direct loan program, $350,595,000, to be derived from
the FHA-mutual mortgage insurance guaranteed loans receipt
account, of which not to exceed $343,483,000 shall be transferred
to the appropriation for departmental salaries and expenses; and
of which not to exceed $7,112,000 shall be transferred to the appro-
priation for the Office of Inspector General.
FHA—GENERAL AND SPECIAL RISK PROGRAM ACCOUNT
(INCLUDING TRANSFERS OF FUNDS)
For the cost of guaranteed loans, as authorized by sections
238 and 519 of the National Housing Act (12 U.S.C. 1715z–3 and
1735c), including the cost of loan guarantee modifications (as that
term is defined in section 502 of the Congressional Budget Act
of 1974, as amended) $85,000,000, to remain available until
expended: Provided, That these funds are available to subsidize
total loan principal, any part of which is to be guaranteed, of
up to $17,400,000,000: Provided further, That during fiscal year
1997, the Secretary shall sell assigned notes having an unpaid
principal balance of up to $2,500,000,000, which notes are held
by the Secretary under the General Insurance and Special Risk
Insurance funds: Provided further, That any amounts made avail-
able in any prior appropriations Act for the cost (as such term
is defined in section 502 of the Congressional Budget Act of 1974)
of guaranteed loans that are obligations of the funds established
under section 238 or 519 of the National Housing Act that have
not been obligated or that are deobligated shall be available to
the Secretary of Housing and Urban Development in connection
with the making of such guarantees and shall remain available
until expended, notwithstanding the expiration of any period of
availability otherwise applicable to such amounts.
Gross obligations for the principal amount of direct loans, as
authorized by sections 204(g), 207(l), 238(a), and 519(a) of the
National Housing Act, shall not exceed $120,000,000; of which
not to exceed $100,000,000 shall be for bridge financing in connec-
tion with the sale of multifamily real properties owned by the
Secretary and formerly insured under such Act; and of which not
to exceed $20,000,000 shall be for loans to nonprofit and govern-
mental entities in connection with the sale of single-family real
properties owned by the Secretary and formerly insured under
such Act.
In addition, for administrative expenses necessary to carry
out the guaranteed and direct loan programs, $207,470,000, of
which $203,299,000 shall be transferred to the appropriation for
departmental salaries and expenses; and of which $4,171,000 shall
H. R. 3666—18
be transferred to the appropriation for the Office of Inspector
General.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEES OF MORTGAGE-BACKED SECURITIES LOAN GUARANTEE
PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
During fiscal year 1997, new commitments to issue guarantees
to carry out the purposes of section 306 of the National Housing
Act, 
as 
amended 
(12 
U.S.C. 
1721(g)), 
shall 
not 
exceed
$110,000,000,000.
For administrative expenses necessary to carry out the guaran-
teed mortgage-backed securities program, $9,383,000, to be derived
from the GNMA-guarantees of mortgage-backed securities guaran-
teed loan receipt account, of which not to exceed $9,383,000 shall
be transferred to the appropriation for departmental salaries and
expenses.
POLICY DEVELOPMENT AND RESEARCH
RESEARCH AND TECHNOLOGY
For contracts, grants, and necessary expenses of programs of
research and studies relating to housing and urban problems, not
otherwise provided for, as authorized by title V of the Housing
and Urban Development Act of 1970, as amended (12 U.S.C. 1701z–
1 et seq.), including carrying out the functions of the Secretary
under section 1(a)(1)(i) of Reorganization Plan No. 2 of 1968,
$34,000,000, to remain available until September 30, 1998.
FAIR HOUSING AND EQUAL OPPORTUNITY
FAIR HOUSING ACTIVITIES
For contracts, grants, and other assistance, not otherwise pro-
vided for, as authorized by title VIII of the Civil Rights Act of
1968, as amended by the Fair Housing Amendments Act of 1988,
and section 561 of the Housing and Community Development Act
of 1987, as amended, $30,000,000, to remain available until Septem-
ber 30, 1998, of which $15,000,000 shall be to carry out activities
pursuant to section 561. No funds made available under this head-
ing shall be used to lobby the executive or legislative branches
of the Federal Government in connection with a specific contract,
grant or loan.
MANAGEMENT AND ADMINISTRATION
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
For necessary administrative and non-administrative expenses
of the Department of Housing and Urban Development, not other-
wise provided for, including not to exceed $7,000 for official recep-
tion 
and 
representation 
expenses, 
$976,840,000, 
of 
which
H. R. 3666—19
$15,000,000 may be used for additional retraining, relocation,
permanent change of station, and other activities related to
downsizing only upon submission of a detailed and specific, multi-
year downsizing plan to the Committees on Appropriations of the
House of Representatives and the Senate, and of which
$546,782,000 shall be provided from the various funds of the Federal
Housing Administration, $9,383,000 shall be provided from funds
of the Government National Mortgage Association, and $675,000
shall be provided from the Community Development Grants Pro-
gram account.
OFFICE OF INSPECTOR GENERAL
(INCLUDING TRANSFER OF FUNDS)
For necessary expenses of the Office of Inspector General in
carrying out the provisions of the Inspector General Act of 1978,
as amended, $52,850,000, of which $11,283,000 shall be provided
from the various funds of the Federal Housing Administration
and $5,000,000 shall be transfered from the amount earmarked
for Operation Safe Home in the Drug elimination grants for low
income housing account.
OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
For carrying out the Federal Housing Enterprise Financial
Safety and Soundness Act of 1992, $15,500,000, to remain available
until expended, from the Federal Housing Enterprise Oversight
Fund: Provided, That such amounts shall be collected by the Direc-
tor as authorized by section 1316 (a) and (b) of such Act, and
deposited in the Fund under section 1316(f) of such Act.
ADMINISTRATIVE PROVISIONS
SEC. 201. EXTENDERS.—(a) PUBLIC HOUSING FUNDING FLEXI-
BILITY.—Section 201(a)(2) of the Departments of Veterans Affairs
and Housing and Urban Development, and Independent Agencies
Appropriations Act, 1996 is amended by striking ‘‘1996’’ and insert-
ing ‘‘1997’’.
(b) ONE-FOR-ONE
REPLACEMENT
OF
PUBLIC
AND
INDIAN
HOUSING.—Section 1002(d) of Public Law 104–19 is amended by
striking ‘‘before September 30, 1996’’ and inserting ‘‘on or before
September 30, 1997’’.
(c) PUBLIC AND ASSISTED HOUSING RENTS, INCOME ADJUST-
MENTS, AND PREFERENCES.—(1)(A) Section 402(a) of The Balanced
Budget Downpayment Act, I is amended—
(i) by striking ‘‘effective for fiscal year 1996 and no later
than October 30, 1995’’ and inserting ‘‘and subsection (f) of
this section, effective for fiscal year 1997’’;
(ii) in paragraphs (1), (2), and (4), by striking ‘‘not less
than $25, and may require a minimum monthly rent of’’; and
(iii) in paragraph (3), by striking ‘‘not less than $25 for
the unit, and may require a minimum monthly rent of’’.
(B) Section 230 of Public Law 104–134 is hereby repealed.
H. R. 3666—20
(2) Section 402(f) of The Balanced Budget Downpayment Act,
I is amended by striking ‘‘fiscal year 1996’’ and inserting ‘‘fiscal
years 1996 and 1997’’.
(d) APPLICABILITY
TO
IHAS.—In accordance with section
201(b)(2) of the United States Housing Act of 1937, the amendments
made by subsections (a), (b), and (c) shall apply to public housing
developed or operated pursuant to a contract between the Secretary
of Housing and Urban Development and an Indian housing
authority.
(e) STREAMLINING SECTION 8 TENANT-BASED ASSISTANCE.—Sec-
tion 203(d) of the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appropriations
Act, 1996 is amended by striking ‘‘fiscal year 1996’’ and inserting
‘‘fiscal years 1996 and 1997’’.
(f) SECTION 8 FAIR MARKET RENTALS AND DELAY IN REISSU-
ANCE.—(1) The first sentence of section 403(a) of the Balanced
Budget Downpayment Act, I, is amended by striking ‘‘1996’’ and
inserting ‘‘1997’’.
(2) Section 403(c) of such Act is amended—
(A) by striking ‘‘fiscal year 1996’’ and inserting ‘‘fiscal years
1996 and 1997’’; and
(B) by inserting before the semicolon the following: ‘‘for
assistance made available during fiscal year 1996 and October
1, 1997 for assistance made available during fiscal year 1997’’.
(g) SECTION 8 RENT ADJUSTMENTS.—Section 8(c)(2)(A) of the
United States Housing Act of 1937 is amended—
(1) in the third sentence by inserting ‘‘, fiscal year 1996
prior to April 26, 1996, and fiscal year 1997’’ after ‘‘1995’’;
(2) in the fourth sentence, by striking ‘‘For’’ and inserting
‘‘Except for assistance under the certificate program, for’’;
(3) after the fourth sentence, by inserting the following
new sentence: ‘‘In the case of assistance under the certificate
program, 0.01 shall be subtracted from the amount of the
annual adjustment factor (except that the factor shall not be
reduced to less than 1.0), and the adjusted rent shall not
exceed the rent for a comparable unassisted unit of similar
quality, type, and age in the market area.’’; and
(4) in the last sentence, by—
(A) 
striking 
‘‘sentence’’ 
and 
inserting 
‘‘two
sentences’’; and
(B) inserting ‘‘, fiscal year 1996 prior to April 26,
1996, and fiscal year 1997’’ after ‘‘1995’’.
SEC. 202. ADMINISTRATIVE FEES.—Notwithstanding section 8(q)
of the United States Housing Act of 1937, as amended—
(a) The Secretary shall establish fees for the cost of administer-
ing the certificate, voucher and moderate rehabilitation programs.
(1)(A) For fiscal year 1997, the fee for each month for
which a dwelling unit is covered by an assistance contract
shall be 7.5 percent of the base amount, adjusted as provided
herein, in the case of an agency that, on an annual basis,
is administering a program of no more than 600 units, and
7 percent of the base amount, adjusted as provided herein,
for each additional unit above 600.
(B) The base amount shall be the higher of—
(i) the fair market rental for fiscal year 1993 for a
2-bedroom existing rental dwelling unit in the market area
of the agency; and
H. R. 3666—21
(ii) such fair market rental for fiscal year 1994, but
not more than 103.5 percent of the amount determined
under clause (i).
(C) The base amount shall be adjusted to reflect changes
in the wage data or other objectively measurable data that
reflect the costs of administering the program during fiscal
year 1996; except that the Secretary may require that the
base amount be not less than a minimum amount and not
more than a maximum amount.
(2) For subsequent fiscal years, the Secretary shall publish
a notice in the Federal Register, for each geographic area,
establishing the amount of the fee that would apply for the
agencies administering the program, based on changes in wage
data or other objectively measurable data that reflect the cost
of administering the program, as determined by the Secretary.
(3) The Secretary may increase the fee if necessary to
reflect higher costs of administering small programs and pro-
grams operating over large geographic areas.
(4) The Secretary may decrease the fee for PHA-owned
units.
(b) Beginning in fiscal year 1997 and thereafter, the Secretary
shall also establish reasonable fees (as determined by the Secretary)
for—
(1) the costs of preliminary expenses, in the amount of
$500, for a public housing agency, but only in the first year
it administers a tenant-based assistance program under the
United States Housing Act of 1937 and only if, immediately
before the effective date of this Act, it was not administering
a tenant-based assistance program under the 1937 Act
(as in effect immediately before the effective date of this Act),
in connection with its initial increment of assistance received;
(2) the costs incurred in assisting families who experience
difficulty (as determined by the Secretary) in obtaining appro-
priate housing under the program; and
(3) extraordinary costs approved by the Secretary.
SEC. 203. SINGLE
FAMILY
ASSIGNMENT
PROGRAM.—Section
407(c) of the Balanced Budget Downpayment Act, I (12 U.S.C.
1710 note), is amended by striking ‘‘October 1, 1996’’ and inserting
‘‘October 1, 1997’’.
SEC. 204. FLEXIBLE AUTHORITY.—During fiscal year 1997 and
fiscal years thereafter, the Secretary may manage and dispose
of multifamily properties owned by the Secretary and multifamily
mortgages held by the Secretary on such terms and conditions
as the Secretary may determine, notwithstanding any other provi-
sion of law.
SEC. 205. USE OF AVAILABLE FUNDING FOR HOMEOWNERSHIP.—
Up to $20,000,000 of amounts of unobligated balances that are
or become available from the Nehemiah Housing Opportunity Grant
program, repealed under section 289(b) of the Cranston-Gonzalez
National Affordable Housing Act, Public Law 101–625, shall be
available for use for activities relating to promotion and
implementation of homeownership in targeted geographic areas,
as determined by the Secretary. Any grant or assistance made
under this section shall be made in accordance with section 102
of the Department of Housing and Urban Development Reform
Act of 1989 on a competitive basis.
H. R. 3666—22
SEC. 206. DEBT FORGIVENESS.—The Secretary of Housing and
Urban Development shall cancel the indebtedness of the Greene
County Rural Health Center relating to a loan received under
the Public Facility Loan program to establish the health center
(Loan #Mis–22–PFL0096). The Greene County Rural Health Center
is hereby relieved of all liability to the Federal Government for
such loan and any fees and charges payable in connection with
such loan.
SEC. 207. FLEXIBLE SUBSIDY FUND.—From the fund established
by section 236(g) of the National Housing Act, as amended, all
uncommitted balances of excess rental charges as of September
30, 1996, and any collection during fiscal year 1997, shall be trans-
ferred, as authorized under such section, to the fund authorized
under section 201(j) of the Housing and Community Development
Amendments of 1978, as amended.
SEC. 208. RENTAL HOUSING ASSISTANCE.—The limitation other-
wise applicable to the maximum payments that may be required
in any fiscal year by all contracts entered into under section 236
of the National Housing Act (12 U.S.C. 1715z–1) is reduced in
fiscal year 1997 by not more than $2,000,000 in uncommitted bal-
ances of authorizations provided for this purpose in appropriations
Acts.
SEC. 209. D.C. MODERNIZATION FUNDING.—Notwithstanding the
provisions of section 14(k)(5)(D) of the United States Housing Act
of 1937, the withheld modernization funds that became credited
in fiscal years 1993, 1994, and 1995, due to the troubled status
of the former Department of Public and Assisted Housing of the
District of Columbia, shall be made available without diminution
to its successor, the District of Columbia Housing Authority, at
such time between the effective date of this Act and the end of
fiscal year 1998 as the District of Columbia Housing Authority
is no longer deemed ‘‘mod-troubled’’ under section 6(j)(2)(A)(i) of
such Act; after fiscal year 1998, the District of Columbia Housing
Authority shall become subject to the provisions of section
14(k)(5)(D) of such Act should it remain mod-troubled.
SEC. 210. (a) FINANCING ADJUSTMENT FACTORS.—Fifty per cen-
tum of the amounts of budget authority, or in lieu thereof
50 per centum of the cash amounts associated with such budget
authority, that are recaptured from projects described in section
1012(a) of the Stewart B. McKinney Homeless Assistance Amend-
ments Act of 1988 (Public Law 100–628, 102 Stat. 3224, 3268)
shall be rescinded, or in the case of cash, shall be remitted to
the Treasury, and such amounts of budget authority or cash recap-
tured and not rescinded or remitted to the Treasury shall be used
by State housing finance agencies or local governments or local
housing agencies with projects approved by the Secretary of Housing
and Urban Development for which settlement occurred after Janu-
ary 1, 1992, in accordance with such section.
(b) In addition to amounts otherwise provided by this Act,
$464,442 is appropriated to the Department of Housing and Urban
Development for payment to the Utah Housing Finance Agency,
in lieu of amounts lost to such agency in bond refinancings during
1994, for its use in accordance with subsection (a).
SEC. 211. SECTION 8 CONTRACT RENEWAL AUTHORITY.—(a)
DEFINITIONS.—For purposes of this section—
H. R. 3666—23
(1) the term ‘‘expiring contract’’ means a contract for
project-based assistance under section 8 of the United States
Housing Act of 1937 that expires during fiscal year 1997;
(2) the term ‘‘family’’ has the same meaning as in section
3(b) of the United States Housing Act of 1937;
(3) the term ‘‘multifamily housing project’’ means a property
consisting of more than 4 dwelling units that is covered in
whole or in part by a contract for project-based assistance
under section 8 of the United States Housing Act of 1937;
(4) the term ‘‘owner’’ has the same meaning as in section
8(f) of the United States Housing Act of 1937;
(5) the term ‘‘project-based assistance’’ means rental assist-
ance under section 8 of the United States Housing Act of
1937 that is attached to a multifamily housing project;
(6) the term ‘‘public agency’’ means a State housing finance
agency, a local housing agency, or other agency with a public
purpose and status;
(7) the term ‘‘Secretary’’ means the Secretary of Housing
and Urban Development; and
(8) the term ‘‘tenant-based assistance’’ has the same mean-
ing as in section 8(f) of the United States Housing Act of
1937.
(b) SECTION 8 CONTRACT RENEWAL AUTHORITY.—
(1) IN
GENERAL.—Notwithstanding section 405(a) of the
Balanced Budget Downpayment Act, I, upon the request of
the owner of a multifamily housing project that is covered
by an expiring contract, the Secretary shall use amounts made
available for the renewal of assistance under section 8 of the
United States Housing Act of 1937 to renew the expiring con-
tract as project-based assistance for a period of not more than
one year, at rent levels that are equal to those under the
expiring contract as of the date on which the contract expires:
Provided, That those rent levels do not exceed 120 percent
of the fair market rent for the market area in which the
project is located. For an FHA-insured multifamily housing
project with an expiring contract at rent levels that exceed
120 percent of the fair market rent for the market area, the
Secretary shall provide, at the request of the owner, section
8 project-based assistance, for a period of not more than one
year, at rent levels that do not exceed 120 percent of the
fair market rent.
(2) EXEMPTION
FOR
STATE
AND
LOCAL
HOUSING
AGENCY
PROJECTS.—Notwithstanding paragraph (1), upon the expiration
of a contract with rent levels that exceed the percentage
described in that paragraph, if the Secretary determines that
the primary financing or mortgage insurance for the multifam-
ily housing project that is covered by that expiring contract
was provided by a public agency, the Secretary shall, at the
request of the owner and the public agency, renew the expiring
contract—
(A) for a period of not more than one year; and
(B) at rent levels that are equal to those under the
expiring contract as of the date on which the contract
expires.
(3) SECTION 202, SECTION 811, AND SECTION 515 PROJECTS.—
Notwithstanding paragraph (1), for section 202 projects, section
811 projects and section 515 projects, upon the expiration of
H. R. 3666—24
a section 8 contract, the Secretary shall, at the request of
the owner, renew the expiring contract—
(A) for a period of not more than one year; and
(B) at rent levels that are equal to those under the
expiring contract as of the date on which the contract
expires.
(4) OTHER CONTRACTS.—
(A) PARTICIPATION IN DEMONSTRATION.—For a contract
covering an FHA-insured multifamily housing project that
expires during fiscal year 1997 with rent levels that exceed
the percentage described in paragraph (1) and after notice
to the tenants, the Secretary shall, at the request of the
owner of the project and after notice to the tenants, include
that multifamily housing project in the demonstration pro-
gram under section 212 of this Act. The Secretary shall
ensure that a multifamily housing project with an expiring
contract in fiscal year 1997 shall be allowed to be included
in the demonstration.
(B) EFFECT OF MATERIAL ADVERSE ACTIONS AND OMIS-
SIONS.—Notwithstanding paragraph (1) or any other provi-
sion of law, the Secretary shall not renew an expiring
contract if the Secretary determines that the owner of
the multifamily housing project has engaged in material
adverse financial or managerial actions or omissions with
regard to the project (or with regard to other similar
projects if the Secretary determines that such actions or
omissions constitute a pattern of mismanagement that
would warrant suspension or debarment by the Secretary).
(C) TRANSFER OF PROPERTY.—For properties disquali-
fied from the demonstration program because of actions
by an owner or purchaser in accordance with subparagraph
(B), the Secretary shall establish procedures to facilitate
the voluntary sale or transfer of the property, with a pref-
erence for tenant organizations and tenant-endorsed
community-based nonprofit and public agency purchasers
meeting such reasonable qualifications as may be estab-
lished by the Secretary. The Secretary may include the
transfer of section 8 project-based assistance.
(5) TENANT
PROTECTIONS.—Any family residing in an
assisted unit in a multifamily housing project that is covered
by an expiring contract that is not renewed, shall be offered
tenant-based assistance before the date on which the contract
expires or is not renewed.
SEC. 212. FHA MULTIFAMILY DEMONSTRATION AUTHORITY.—
(a) IN GENERAL.—
(1) REPEAL.—
(A) IN GENERAL.—Section 210 of the Departments of
Veterans Affairs and Housing and Urban Development and
Independent Agencies Appropriations Act, 1996 (110 Stat.
1321) is repealed.
(B) EXCEPTION.—Notwithstanding the repeal under
subparagraph (A), amounts made available under section
210(f) the Departments of Veterans Affairs and Housing
and Urban Development and Independent Agencies Appro-
priations Act, 1996 shall remain available for the dem-
onstration program under this section through the end
of fiscal year 1997.
H. R. 3666—25
(2) SAVINGS PROVISIONS.—Nothing in this section shall be
construed to affect any commitment entered into before the
date of enactment of this Act under the demonstration program
under section 210 of the Departments of Veterans Affairs and
Housing and Urban Development and Independent Agencies
Appropriations Act, 1996.
(3) DEFINITIONS.—For purposes of this section—
(A) the term ‘‘demonstration program’’ means the pro-
gram established under subsection (b);
(B) the term ‘‘expiring contract’’ means a contract for
project-based assistance under section 8 of the United
States Housing Act of 1937 that expires during fiscal year
1997;
(C) the term ‘‘family’’ has the same meaning as in
section 3(b) of the United States Housing Act of 1937;
(D) the term ‘‘multifamily housing project’’ means a
property consisting of more than 4 dwelling units that
is covered in whole or in part by a contract for project-
based assistance;
(E) the term ‘‘owner’’ has the same meaning as in
section 8(f) of the United States Housing Act of 1937;
(F) the term ‘‘project-based assistance’’ means rental
assistance under section 8 of the United States Housing
Act of 1937 that is attached to a multifamily housing
project;
(G) the term ‘‘Secretary’’ means the Secretary of Hous-
ing and Urban Development; and
(H) the term ‘‘tenant-based assistance’’ has the same
meaning as in section 8(f) of the United States Housing
Act of 1937.
(b) DEMONSTRATION AUTHORITY.—
(1) IN GENERAL.—Subject to the funding limitation in sub-
section (l), the Secretary shall administer a demonstration pro-
gram with respect to multifamily projects—
(A) whose owners agree to participate;
(B) with rents on units assisted under section 8 of
the United States Housing Act of 1937 that are, in the
aggregate, in excess of 120 percent of the fair market
rent of the market area in which the project is located;
and
(C) the mortgages of which are insured under the
National Housing Act.
(2) PURPOSE.—The demonstration program shall be
designed to obtain as much information as is feasible on the
economic viability and rehabilitation needs of the multifamily
housing projects in the demonstration, to test various
approaches for restructuring mortgages to reduce the financial
risk to the FHA Insurance Fund while reducing the cost of
section 8 subsidies, and to test the feasibility and desirability
of—
(A) ensuring, to the maximum extent practicable, that
the debt service and operating expenses, including ade-
quate reserves, attributable to such multifamily projects
can be supported at the comparable market rent with or
without mortgage insurance under the National Housing
Act and with or without additional section 8 rental sub-
sidies;
H. R. 3666—26
(B) utilizing section 8 rental assistance, while taking
into account the capital needs of the projects and the need
for adequate rental assistance to support the low- and
very low-income families residing in such projects; and
(C) preserving low-income rental housing affordability
and availability while reducing the long-term cost of section
8 rental assistance.
(c) GOALS.—
(1) IN GENERAL.—The Secretary shall carry out the dem-
onstration program in a manner that will protect the financial
interests of the Federal Government through debt restructuring
and subsidy reduction and, in the least costly fashion, address
the goals of—
(A) maintaining existing affordable housing stock in
a decent, safe, and sanitary condition;
(B) minimizing the involuntary displacement of
tenants;
(C) taking into account housing market conditions;
(D) encouraging responsible ownership and manage-
ment of property;
(E) minimizing any adverse income tax impact on prop-
erty owners; and
(F) minimizing any adverse impacts on residential
neighborhoods and local communities.
(2) BALANCE OF COMPETING GOALS.—In determining the
manner in which a mortgage is to be restructured or a subsidy
reduced under this subsection, the Secretary may balance
competing goals relating to individual projects in a manner
that will further the purposes of this section.
(d) PARTICIPATION ARRANGEMENTS.—
(1) IN GENERAL.—In carrying out the demonstration pro-
gram, the Secretary may enter into participation arrangements
with designees, under which the Secretary may provide for
the assumption by designees (by delegation, by contract, or
otherwise) of some or all of the functions, obligations, respon-
sibilities and benefits of the Secretary.
(2) DESIGNEES.—In entering into any arrangement under
this subsection, the Secretary shall select state housing finance
agencies, housing agencies or nonprofits (separately or in
conjunction with each other) to act as designees to the extent
such agencies are determined to be qualified by the Secretary.
In locations where there is no qualified State housing finance
agency, housing agency or nonprofit to act as a designee, the
Secretary may act as a designee. Each participation arrange-
ment entered into under this subsection shall include a designee
as the primary partner. Any organization selected by the Sec-
retary under this section shall have a long-term record of
service in providing low-income housing and meet standards
of fiscal responsibility, as determined by the Secretary.
(3) DESIGNEE PARTNERSHIPS.—For purposes of any partici-
pation arrangement under this subsection, designees are
encouraged to develop partnerships with each other, and to
contract or subcontract with other entities, including—
(A) public housing agencies;
(B) financial institutions;
(C) mortgage servicers;
(D) nonprofit and for-profit housing organizations;
H. R. 3666—27
(E) the Federal National Mortgage Association;
(F) the Federal Home Loan Mortgage Corporation;
(G) Federal Home Loan Banks; and
(H) other State or local mortgage insurance companies
or bank lending consortia.
(e) LONG-TERM AFFORDABILITY.—
(1) IN GENERAL.—After the renewal of a section 8 contract
pursuant to a restructuring under this section, the owner shall
accept each offer to renew the section 8 contract, for a period
of 20 years from the date of the renewal under the demonstra-
tion, if the offer to renew is on terms and conditions, as agreed
to by the Secretary or designee and the owner under a restruc-
turing.
(2) AFFORDABILITY
REQUIREMENTS.—Except as otherwise
provided by the Secretary, in exchange for any mortgage
restructuring under this section, a project shall remain afford-
able for a period of not less than 20 years. Affordability require-
ments shall be determined in accordance with guidelines
established by the Secretary or designee. The Secretary or
designee may waive these requirements for good cause.
(f) PROCEDURES.—
(1) NOTICE
OF
PARTICIPATION
IN
DEMONSTRATION.—Not
later than 45 days before the date of expiration of an expiring
contract (or such later date, as determined by the Secretary,
for good cause), the owner of the multifamily housing project
covered by that expiring contract shall notify the Secretary
or designee and the residents of the owner’s intent to participate
in the demonstration program.
(2) DEMONSTRATION CONTRACT.—Upon receipt of a notice
under paragraph (1), the owner and the Secretary or designee
shall enter into a demonstration contract, which shall provide
for initial section 8 project-based rents at the same rent levels
as those under the expiring contract or, if practical, the budget-
based rent to cover debt service, reasonable operating expenses
(including reasonable and appropriate services), and a reason-
able return to the owner, as determined solely by the Secretary.
The demonstration contract shall be for the minimum term
necessary for the rents and mortgages of the multifamily hous-
ing project to be restructured under the demonstration program,
but shall not be for a period of time to exceed 180 days,
unless extended for good cause by the Secretary.
(g) PROJECT-BASED SECTION 8.—The Secretary shall renew all
expiring contracts under the demonstration as section 8 project-
based contracts, for a period of time not to exceed one year, unless
otherwise provided under subsection (h).
(h) DEMONSTRATION ACTIONS.—
(1) DEMONSTRATION ACTIONS.—For purposes of carrying out
the demonstration program, and in order to ensure that contract
rights are not abrogated, subject to such third party consents
as are necessary (if any), including consent by the Government
National Mortgage Association if it owns a mortgage insured
by the Secretary, consent by an issuer under the mortgage-
backed securities program of the Association, subject to the
responsibilities of the issuer to its security holders and the
Association under such program, and consent by parties to
any contractual agreement which the Secretary proposes to
modify or discontinue, the Secretary or, except with respect
H. R. 3666—28
to subparagraph (B), designee, subject to the funding limitation
in subsection (l), shall take not less than one of the actions
specified in subparagraphs (G), (H), and (I) and may take
any of the following actions:
(A) REMOVAL OF RESTRICTIONS.—
(i) IN GENERAL.—Consistent with the purposes of
this section, subject to the agreement of the owner
of the project and after consultation with the tenants
of the project, the Secretary or designee may remove,
relinquish, extinguish, modify, or agree to the removal
of any mortgage, regulatory agreement, project-based
assistance contract, use agreement, or restriction that
had been imposed or required by the Secretary, includ-
ing restrictions on distributions of income which the
Secretary or designee determines would interfere with
the ability of the project to operate without above-
market rents.
(ii) ACCUMULATED RESIDUAL RECEIPTS.—The Sec-
retary or designee may require an owner of a property
assisted under the section 8 new construction/substan-
tial rehabilitation program under the United States
Housing Act of 1937 to apply any accumulated residual
receipts toward effecting the purposes of this section.
(B) REINSURANCE.—With respect to not more than
5,000 units within the demonstration during fiscal year
1997, the Secretary may enter into contracts to purchase
reinsurance, or enter into participations or otherwise trans-
fer economic interest in contracts of insurance or in the
premiums paid, or due to be paid, on such insurance,
on such terms and conditions as the Secretary may deter-
mine. Any contract entered into under this paragraph shall
require that any associated units be maintained as low-
income units for the life of the mortgage, unless waived
by the Secretary for good cause.
(C) PARTICIPATION BY THIRD PARTIES.—The Secretary
or designee may enter into such agreements, provide such
concessions, incur such costs, make such grants (including
grants to cover all or a portion of the rehabilitation costs
for a project) and other payments, and provide other valu-
able consideration as may reasonably be necessary for
owners, lenders, servicers, third parties, and other entities
to participate in the demonstration program. The Secretary
may establish performance incentives for designees.
(D) SECTION 8 ADMINISTRATIVE FEES.—Notwithstanding
any other provision of law, the Secretary may make fees
available from the section 8 contract renewal appropriation
to a designee for contract administration under section
8 of the United States Housing Act of 1937 for purposes
of any contract restructured or renewed under the dem-
onstration program.
(E) FULL OR PARTIAL PAYMENT OF CLAIM.—Notwith-
standing any other provision of law, the Secretary may
make a full payment of claim or partial payment of claim
prior to default.
(F) CREDIT ENHANCEMENT.—
(i) IN GENERAL.—The Secretary or designee may
provide FHA multifamily mortgage insurance, reinsur-