H. R. 2158—63
(A) seek recommendations on the implementation of
sections 513(b) and 515(c)(1) from organizations repre-
senting—
(i) State housing finance agencies and local
housing agencies;
(ii) other potential participating administering
entities;
(iii) tenants;
(iv) owners and managers of eligible multifamily
housing projects;
(v) States and units of general local government;
and
(vi) qualified mortgagees; and
(B) convene not less than 3 public forums at which
the organizations making recommendations under subpara-
graph (A) may express views concerning the proposed
disposition of the recommendations.
(b) TRANSITION PROVISION FOR CONTRACTS EXPIRING IN FISCAL
YEAR 1998.—Notwithstanding any other provision of law, the Sec-
retary shall apply all the terms of section 211 and section 212
of the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997
(except for section 212(h)(1)(G) and the limitation in section 212(k))
contracts for project-based assistance that expire during fiscal year
1998 (in the same manner that such provisions apply to expiring
contracts defined in section 212(a)(3) of such Act), except that
section 517(a) of the Act shall apply to mortgages on projects
subject to such contracts.
SEC. 523. TECHNICAL AND CONFORMING AMENDMENTS.
(a) CALCULATION OF LIMIT ON PROJECT-BASED ASSISTANCE.—
Section 8(d) of the United States Housing Act of 1937 (42 U.S.C.
1437f(d)) is amended by adding at the end the following:
‘‘(5) CALCULATION
OF
LIMIT.—Any contract entered into
under section 514 of the Multifamily Assisted Housing Reform
and Affordability Act of 1997 shall be excluded in computing
the limit on project-based assistance under this subsection.’’.
(b) PARTIAL PAYMENT OF CLAIMS ON MULTIFAMILY HOUSING
PROJECTS.—Section 541 of the National Housing Act (12 U.S.C.
1735f–19) is amended—
(1) in subsection (a), in the subsection heading, by striking
‘‘AUTHORITY’’ and inserting ‘‘DEFAULTED MORTGAGES’’;
(2) by redesignating subsection (b) as subsection (c); and
(3) by inserting after subsection (a) the following:
‘‘(b) 
EXISTING
MORTGAGES.—Notwithstanding 
any 
other
provision of law, the Secretary, in connection with a mortgage
restructuring under section 514 of the Multifamily Assisted Housing
Reform and Affordability Act of 1997, may make a one time, non-
default partial payment of the claim under the mortgage insurance
contract, which shall include a determination by the Secretary
or the participating administrative entity, in accordance with the
Multifamily Assisted Housing Reform and Affordability Act of 1997,
of the market value of the project and a restructuring of the mort-
gage, under such terms and conditions as are permitted by section
517(a) of such Act.’’.
H. R. 2158—64
(c) REUSE AND RESCISSION OF CERTAIN RECAPTURED BUDGET
AUTHORITY.—Section 8(bb) of the United States Housing Act of
1937 (42 U.S.C. 1437f(bb)) is amended—
(1) by inserting after ‘‘(bb)’’ the following:
‘‘TRANSFER, REUSE, AND RESCISSION OF BUDGET AUTHORITY.—
‘‘(1)’’; and
(2) by inserting the following new paragraph at the end:
‘‘(2) REUSE
AND
RESCISSION
OF
CERTAIN
RECAPTURED
BUDGET
AUTHORITY.—Notwithstanding paragraph (1), if a
project-based assistance contract for an eligible multifamily
housing project subject to actions authorized under title I is
terminated or amended as part of restructuring under section
517 of the Multifamily Assisted Housing Reform and Afford-
ability Act of 1997, the Secretary shall recapture the budget
authority not required for the terminated or amended contract
and use such amounts as are necessary to provide housing
assistance for the same number of families covered by such
contract for the remaining term of such contract, under a
contract providing for project-based or tenant-based assistance.
The amount of budget authority saved as a result of the shift
to project-based or tenant-based assistance shall be rescinded.’’.
(d) SECTION 8 CONTRACT RENEWALS.—Section 405(a) of the
Balanced Budget Downpayment Act, I (42 U.S.C. 1437f note) is
amended by striking ‘‘For’’ and inserting ‘‘Notwithstanding part
24 of title 24 of the Code of Federal Regulations, for’’.
(e) RENEWAL UPON REQUEST OF OWNER.—Section 211(b)(3) of
the Departments of Veterans Affairs and Housing and Urban Devel-
opment, and Independent Agencies Appropriations Act, 1997 (Public
Law 104–204; 110 Stat. 2896) is amended—
(1) by striking the paragraph heading and inserting the
following:
‘‘(3) EXEMPTION OF CERTAIN OTHER PROJECTS.—’’; and
(2) by striking ‘‘section 202 projects, section 811 projects
and section 515 projects’’ and inserting ‘‘section 202 projects,
section 515 projects, projects with contracts entered into
pursuant to section 441 of the Stewart B. McKinney Homeless
Assistance Act, and projects with rents that exceed 100 percent
of fair market rent for the market area, but that are less
than rents for comparable projects’’.
(f) EXTENSION OF DEMONSTRATION CONTRACT PERIOD.—Section
212(g) of the Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act,
1997 (Public Law 104–204) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’;
(2) by inserting before the period at the end the following:
‘‘or in paragraph (2)’’; and
(3) by adding at the end the following:
‘‘(2) The Secretary may renew a demonstration contract for
an additional period of not to exceed 120 days, if—
‘‘(A) the contract was originally executed before February
1, 1997, and the Secretary determines, in the sole discretion
of the Secretary, that the renewal period for the contract needs
to exceed 1 year, due to delay of publication of the Secretary’s
demonstration program guidelines until January 23, 1997 (not
to exceed 21 projects); or
‘‘(B) the contract was originally executed before October
1, 1997, in connection with a project that has been identified
H. R. 2158—65
for restructuring under the joint venture approach described
in section VII.B.2. of the Secretary’s demonstration program
guidelines, and the Secretary determines, in the sole discretion
of the Secretary, that the renewal period for the contract needs
to exceed 1 year, due to delay in implementation of the joint
venture agreement required by the guidelines (not to exceed
25 projects).’’.
SEC. 524. SECTION 8 CONTRACT RENEWALS.
(a) SECTION 8 CONTRACT RENEWAL AUTHORITY.—
(1) IN GENERAL.—Notwithstanding part 24 of title 24 of
the Code of Federal Regulations and subject to section 516
of this subtitle, for fiscal year 1999 and henceforth, the Sec-
retary may use amounts available for the renewal of assistance
under section 8 of the United States Housing Act of 1937,
upon termination or expiration of a contract for assistance
under section 8 (other than a contract for tenant-based assist-
ance and notwithstanding section 8(v) of such Act for loan
management assistance), to provide assistance under section
8 of such Act at rent levels that do not exceed comparable
market rents for the market area. The assistance shall be
provided in accordance with terms and conditions prescribed
by the Secretary.
(2) EXCEPTION PROJECTS.—Notwithstanding paragraph (1),
upon the request of the owner, the Secretary shall renew an
expiring contract in accordance with terms and conditions pre-
scribed by the Secretary at the lesser of: (i) existing rents,
adjusted by an operating cost adjustment factor established
by the Secretary; (ii) a level that provides income sufficient
to support a budget-based rent (including a budget-based rent
adjustment if justified by reasonable and expected operating
expenses); or (iii) in the case of a contract under the moderate
rehabilitation program, other than a moderate rehabilitation
contract under section 441 of the Stewart B. McKinney Home-
less Assistance Act, the base rent adjusted by an operating
cost adjustment factor established by the Secretary, for the
following categories of multifamily housing projects—
(A) projects for which the primary financing or mort-
gage insurance was provided by a unit of State government
or a unit of general local government (or an agency or
instrumentality of either) and is not insured under the
National Housing Act;
(B) projects for which the primary financing was pro-
vided by a unit of State government or a unit or general
local government (or an agency or instrumentality of either)
and the financing involves mortgage insurance under the
National Housing Act, such that the implementation of
a mortgage restructuring and rental assistance sufficiency
plan under this Act is in conflict with applicable law or
agreements governing such financing;
(C) projects financed under section 202 of the Housing
Act of 1959 or section 515 of the Housing Act of 1949;
(D) projects that have an expiring contract under sec-
tion 8 of the United States Housing Act of 1937 pursuant
to section 441 of the Stewart B. McKinney Homeless Assist-
ance Act; and
H. R. 2158—66
(E) projects that do not qualify as eligible multifamily
housing projects pursuant to section 512(2) of this subtitle.
Subtitle B—Miscellaneous Provisions
SEC. 
531. 
REHABILITATION 
GRANTS 
FOR 
CERTAIN 
INSURED
PROJECTS.
Section 236 of the National Housing Act (12 U.S.C. 1715z–
1) is amended by adding at the end the following:
‘‘(s) GRANT AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary may make grants for the
capital costs of rehabilitation to owners of projects that meet
the eligibility and other criteria set forth in, and in accordance
with, this subsection.
‘‘(2) PROJECT ELIGIBILITY.—A project may be eligible for
capital grant assistance under this subsection—
‘‘(A) if—
‘‘(i) the project is or was insured under any provi-
sion of title II of the National Housing Act;
‘‘(ii) the project was assisted under section 8 of
the United States Housing Act of 1937 on the date
of enactment of the Multifamily Assisted Housing
Reform and Affordability Act of 1997; and
‘‘(iii) the project mortgage was not held by a State
agency as of the date of enactment of the Multifamily
Assisted Housing Reform and Affordability Act of 1997;
‘‘(B) if the project owner agrees to maintain the housing
quality standards as required by the Secretary;
‘‘(C)(i) if the Secretary determines that the owner or
purchaser of the project has not engaged in material
adverse financial or managerial actions or omissions with
regard to such project; or
‘‘(ii) if the Secretary elects to make such determination,
that the owner or purchaser of the project has not engaged
in material adverse financial or managerial actions or
omissions with regard to other projects of such owner or
purchaser that are federally assisted or financed with a
loan from, or mortgage insured or guaranteed by, an agency
of the Federal Government;
‘‘(iii) material adverse financial or managerial actions
or omissions, as the terms are used in this subparagraph,
include—
‘‘(I) materially violating any Federal, State, or local
law or regulation with regard to this project or any
other federally assisted project, after receipt of notice
and an opportunity to cure;
‘‘(II) materially breaching a contract for assistance
under section 8 of the United States Housing Act of
1937, after receipt of notice and an opportunity to
cure;
‘‘(III) materially violating any applicable regulatory
or other agreement with the Secretary or a participat-
ing administrative entity, after receipt of notice and
an opportunity to cure;
‘‘(IV) repeatedly failing to make mortgage pay-
ments at times when project income was sufficient
to maintain and operate the property;