I 
110TH CONGRESS 
2D SESSION 
H. R. 5487 
To establish the Affordable Homeownership Preservation Fund of the 
Neighborhood Reinvestment Corporation. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 25, 2008 
Ms. LORETTA SANCHEZ of California (for herself and Ms. CLARKE) intro-
duced the following bill; which was referred to the Committee on Finan-
cial Services 
A BILL 
To establish the Affordable Homeownership Preservation 
Fund of the Neighborhood Reinvestment Corporation. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Affordable Home-
ownership Preservation Fund Act of 2008’’. 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
(1) many communities in the United States are 
facing a loss of affordable housing options arising in 
part from unethical lending practices and the result-
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ing tightening of credit to low- and moderate-income 
families; 
(2) the restoration and maintenance of the 
economies of these communities will require support 
to preserve affordable workforce housing; 
(3) non-governmental business interests are fac-
ing increasing difficulties expanding operations due 
to the limited workforce available in regions with low 
inventories of affordable housing; and 
(4) community development organizations and 
affordable housing trust funds have proven their 
ability to identify and respond to community needs 
for equity investments, loans, and educational serv-
ices. 
(b) PURPOSE.—The purpose of this Act is to estab-
lish an Affordable Homeownership Preservation Fund of 
the Neighborhood Reinvestment Corporation that will pro-
tect the interests of low- and moderate-income homebuyers 
and ensure that non-governmental interests continue to 
have affordable housing for their workforces. 
SEC. 3. AFFORDABLE HOMEOWNERSHIP PRESERVATION 
FUND. 
The Neighborhood Reinvestment Corporation Act is 
amended— 
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(1) 
in 
section 
606(b)(5) 
(42 
U.S.C. 
8105(b)(5)), by striking ‘‘section 608(d))’’ and in-
serting ‘‘section 609(d)’’; 
(2) by redesignating sections 607 and 608 (12 
U.S.C. 8106, 8107) as sections 608 and 609, respec-
tively; and 
(3) by inserting after section 606 (12 U.S.C. 
8105) the following new section: 
‘‘SEC. 607. AFFORDABLE HOMEOWNERSHIP PRESERVATION 
FUND. 
‘‘(a) ESTABLISHMENT.—There is established a fund 
of the corporation to be known as the Affordable Home-
ownership Preservation Fund (in this section referred to 
as the ‘Fund’), which shall be administered by the cor-
poration. 
‘‘(b) USE.—To the extent that amounts are made 
available pursuant to subsection (l), the corporation, doing 
business as NeighborWorks America, shall provide finan-
cial assistance from the Fund through grants to commu-
nity development organizations for use for eligible activi-
ties under subsection (d) to enhance the availability of af-
fordable housing. 
‘‘(c) ELIGIBLE COMMUNITY DEVELOPMENT ORGANI-
ZATIONS.—Grants from the Fund may be made only to 
community development organizations that operate afford-
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able housing trust funds that are affiliated with the 
NeighborWorks America network established by the cor-
poration. 
‘‘(d) ELIGIBLE ACTIVITIES.— 
‘‘(1) IN
GENERAL.—Amounts from a grant 
from the Fund for an eligible community develop-
ment organization may be used only for activities to 
improve and enhance the availability of affordable 
housing that— 
‘‘(A) are carried out in accordance with the 
comprehensive strategic plan for the organiza-
tion submitted under subsection (f)(2)(B); 
‘‘(B) are consistent with existing economic, 
community, and housing development plans 
adopted by or applicable to the area or targeted 
population served by the organization; and 
‘‘(C) may include— 
‘‘(i) assisting distressed homeowners 
with small low-interest or no-interest loans; 
‘‘(ii) making mortgage loans to first- 
time homebuyers; 
‘‘(iii) purchasing, rehabilitating, and 
selling foreclosed properties for owner-oc-
cupancy; and 
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‘‘(iv) such other activities as the cor-
poration considers appropriate. 
‘‘(2) CAPACITY
BUILDING.—Notwithstanding 
paragraph (1), a grantee may use not more than 10 
percent of the amounts of any grant from the Fund 
and of any matching amounts provided in accord-
ance with subsection (e) for costs of hiring and 
training personnel to carry out performance goals 
and the mortgage foreclosure mitigation counseling 
required by the item relating to ‘Neighborhood Rein-
vestment Corporation’ in title III of the Transpor-
tation, Housing and Urban Development, and Re-
lated Agencies Appropriations Act, 2008 (Division K 
of Public Law 110–161). 
‘‘(e) MATCHING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A grant under this section 
for an eligible community development organization 
may not be made in an amount that exceeds the 
amount that the organization declares to the cor-
poration have been or will be contributed from 
sources other than the Federal Government for use 
for eligible activities described in the application of 
the organization. Such matching funds shall be at 
least comparable in form and value to the assistance 
provided from the Fund for the organization. 
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‘‘(2) REQUIREMENT OF FIRM COMMITMENT OF 
MATCHING
AMOUNTS.—The corporation may not 
provide any grant amounts for an eligible commu-
nity development organization before the organiza-
tion has secured firm commitments for the matching 
funds required by paragraph (1). 
‘‘(3) EXCEPTION.—In the case of an applicant 
that the corporation determines is subject to severe 
constraints on available sources of matching funds, 
the corporation may permit the applicant to comply 
with the matching requirements of paragraph (1) 
by— 
‘‘(A) reducing the amount required to be 
matched by such applicant by not more than 50 
percent; 
‘‘(B) for not more than 60 percent of the 
amount required to be matched by such appli-
cant, allowing such applicant to use amounts 
made available pursuant to— 
‘‘(i) section 106 of the Housing and 
Community Development Act of 1974 (42 
U.S.C. 5306); 
‘‘(ii) section 623(c)(1) of the Commu-
nity Economic Development Act of 1981 
(42 U.S.C. 9812(c)); or 
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‘‘(iii) section 310B(c) of the Consoli-
dated Farm and Rural Development Act (7 
U.S.C. 1932(c)); or 
‘‘(C) permitting such applicant to provide 
matching funds in a form to be determined at 
the discretion of the corporation if such appli-
cant— 
‘‘(i) has total assets of less than 
$100,000; 
‘‘(ii) serves nonmetropolitan areas; 
and 
‘‘(iii) is requesting a grant under this 
section of not more than $25,000. 
‘‘(4) LIMITATION.—Not more than 25 percent 
of the total amount disbursed in any fiscal year from 
the Fund may be matched as provided in paragraph 
(3). 
‘‘(f) APPLICATIONS FOR ASSISTANCE.— 
‘‘(1) FORM AND PROCEDURES.—To be eligible 
to receive assistance from the Fund, an eligible com-
munity development organization shall submit to the 
corporation an application meeting the requirements 
under this subsection, in such form and in accord-
ance with such procedures as the corporation shall 
establish. 
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‘‘(2) MINIMUM REQUIREMENTS.—The corpora-
tion shall require each application— 
‘‘(A) to establish that the applicant is, or 
by the time a grant under this section is made 
to the organization will be, an eligible commu-
nity development organization; 
‘‘(B) to include a comprehensive strategic 
plan for the organization that contains— 
‘‘(i) a plan of not less than 5 years in 
duration that demonstrates that the appli-
cant will use amounts from a grant from 
the Fund only for eligible activities under 
subsection (d); 
‘‘(ii) an analysis of the needs of the 
area or targeted population that the appli-
cant serves and a strategy for how the ap-
plicant will attempt to meet such needs; 
‘‘(iii) a plan that coordinates use of 
assistance from the Fund with existing 
Federal, State, local, and tribal govern-
ment assistance programs, and private sec-
tor financial services; 
‘‘(iv) an explanation of how the pro-
posed eligible activities to be carried out 
using amounts from the grant from the 
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Fund comply with the requirement under 
subsection (d)(1)(B); and 
‘‘(v) a description of how the appli-
cant will coordinate with community orga-
nizations and financial institutions that 
will provide equity investments, loans, sec-
ondary markets, or other services to invest-
ment areas or targeted populations; 
‘‘(C) to include a detailed description of 
how the applicant will comply with the match-
ing requirement under subsection (e) and the 
likely sources of funds for such compliance; 
‘‘(D) in the case of an applicant that has 
previously received assistance from the Fund, to 
demonstrate that the applicant— 
‘‘(i) has substantially met its perform-
ance goals established pursuant to sub-
section (h)(2)(B) and otherwise carried out 
its responsibilities under the assistance 
agreement for such assistance; and 
‘‘(ii) will expand its operations into a 
new service area or to serve a new targeted 
population, offer more services, or increase 
the volume of its business; 
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‘‘(E) in the case of an applicant with a 
prior history of serving investment areas or tar-
geted populations, to demonstrate that the ap-
plicant— 
‘‘(i) has a record of success in serving 
service areas or targeted populations; and 
‘‘(ii) will expand its operations into a 
new service area or to serve a new targeted 
population, offer more services, or increase 
the volume of its current business; and 
‘‘(F) to include such other information as 
the corporation considers appropriate. 
‘‘(3) PREAPPLICATION OUTREACH PROGRAM.— 
The corporation may operate an outreach program 
to identify and provide information to potential ap-
plicants for assistance under this section. 
‘‘(g) SELECTION CRITERIA.—The corporation shall 
establish criteria for selection of applications for grants 
under this section, which shall include— 
‘‘(1) the likelihood of success of the applicant in 
meeting the goals of its comprehensive strategic plan 
submitted under subsection (f)(2)(B); 
‘‘(2) the experience and background of the pro-
posed team that will manage the grant; 
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‘‘(3) the extent of need for affordable housing 
for the service area or targeted populations to be 
served under the grant; 
‘‘(4) the extent to which the applicant will con-
centrate its activities on serving its service area or 
targeted populations; 
‘‘(5) the amount for which firm commitments 
have been made for contributions to be used to meet 
or exceed the matching amount required under sub-
section (e) and the likely success of the plan for se-
curing any balance of the amounts required under 
such subsection; 
‘‘(6) whether the applicant is located in a com-
munity that has experienced a sudden and signifi-
cant loss in homeownership as a result of an in-
crease in mortgage foreclosures; 
‘‘(7) in the case of an applicant having a prior 
history with the corporation, the extent of success of 
the applicant in serving the service areas or targeted 
populations involved; and 
‘‘(8) any other factors (such as the extent to 
which the applicant has strong ties to the commu-
nity that it will serve) that the corporation considers 
appropriate. 
‘‘(h) GRANT TERMS AND CONDITIONS.— 
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‘‘(1) SOUNDNESS
OF
ORGANIZATIONS.—The 
corporation shall— 
‘‘(A) ensure, to the maximum extent prac-
ticable, that each community development orga-
nization that receives a grant under this section 
is financially and managerially sound and main-
tains appropriate internal controls; and 
‘‘(B) require each community development 
organization that receives a grant under this 
section to submit to the corporation, not less 
than once during each 18-month period, a 
statement of financial condition audited by an 
independent certified public accountant as part 
of the report required by subsection (j)(1)(E). 
‘‘(2) ASSISTANCE AGREEMENT.— 
‘‘(A) IN
GENERAL.—No grant amounts 
may be provided under this section to an eligi-
ble community development corporation before 
the corporation enters into an agreement with 
the organization that requires the organization 
to comply with performance goals established 
pursuant to subparagraph (B) and with all 
other terms and conditions of assistance re-
ceived under this section. 
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‘‘(B) PERFORMANCE
GOALS.—For each 
community development organization receiving 
assistance under this section, performance goals 
relating to the use of such assistance shall be 
established by negotiation between the corpora-
tion and the organization. Such goals shall be 
based upon the strategic plan of the organiza-
tion submitted pursuant to subsection (f)(2)(b). 
Such goals may be modified by consent of both 
parties, or as provided in subparagraph (C). 
‘‘(C) 
SANCTIONS.—The 
agreement 
re-
quired under subparagraph (A) for each eligible 
community development corporation shall pro-
vide that, in the event of fraud, mismanage-
ment, noncompliance with this section, or non-
compliance with the terms of the agreement, 
the corporation may, in the discretion of the 
corporation, take one or more of the following 
actions: 
‘‘(i) Revoke approval of the applica-
tion of the organization. 
‘‘(ii) Terminate or reduce future as-
sistance under this section for the organi-
zation. 
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‘‘(iii) Require repayment of assistance 
provided under this section to the organi-
zation. 
‘‘(iv) Require changes to the perform-
ance goals established pursuant to sub-
paragraph (B) for the organization. 
‘‘(v) Bar the organization from re-
applying for assistance from the Fund. 
‘‘(vi) Require changes to the strategic 
plan of the organization submitted pursu-
ant to subsection (f)(2)(B). 
‘‘(vii) Take such other actions as the 
corporation considers appropriate. 
‘‘(i) ENCOURAGEMENT OF PRIVATE ENTITIES.—The 
corporation may facilitate the organization of corporations 
in which the Federal Government has no ownership inter-
est that will complement the activities of the corporation 
in carrying out the purpose of this section. The purpose 
of any such entity shall be to assist community develop-
ment organizations in a manner that is complementary to 
the activities of the corporation under this section. Any 
such entity shall be managed exclusively by persons not 
employed by the Federal Government or any agency or 
instrumentality thereof. 
‘‘(j) RECORDKEEPING, REPORTS, AND AUDITS.— 
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‘‘(1) RECORDKEEPING.— 
‘‘(A) IN GENERAL.—Each community de-
velopment organization receiving assistance 
from the Fund shall keep such records, for such 
periods as may be prescribed, as may be nec-
essary to disclose the manner in which any as-
sistance under this section is used and to dem-
onstrate compliance with the requirements of 
this section. 
‘‘(B) USER PROFILE INFORMATION.—The 
corporation shall require each community devel-
opment organization receiving assistance under 
this section to compile and maintain data on 
the gender, race, ethnicity, national origin, and 
other pertinent information concerning individ-
uals that utilize the services of the organization 
to ensure that targeted populations and low-in-
come residents of investment areas are ade-
quately served. 
‘‘(C) ACCESS TO RECORDS.—The corpora-
tion shall have access on demand, for the pur-
pose of determining compliance with this sec-
tion, to any records of a community develop-
ment organization that receives assistance from 
the Fund. 
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‘‘(2) ANNUAL REPORT BY CORPORATION.—The 
corporation shall conduct an annual evaluation of 
the activities of the Fund and the community devel-
opment organizations assisted under this section, 
and shall include in the annual report submitted 
pursuant to section 608(a) a report of its findings, 
together with financial statements audited in accord-
ance with paragraph (4). 
‘‘(3) OPTIONAL
STUDIES.—The corporation 
may conduct such studies as the corporation con-
siders necessary to further the purpose of this sec-
tion and to facilitate investment in distressed com-
munities. The findings of any studies conducted pur-
suant to this paragraph shall be included in the re-
port required by paragraph (2). 
‘‘(4) EXAMINATION AND AUDIT.—The financial 
statements of the Fund for each fiscal year shall be 
audited by the Comptroller General of the United 
States under the authority provided in section 
608(c). 
‘‘(k) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) COMMUNITY
DEVELOPMENT
ORGANIZA-
TION.—The term ‘community development organiza-
tion’ means a private, nonprofit organization that— 
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‘‘(A) serves a specific area experiencing a 
limited supply of affordable housing relative to 
the needs of the local workforce, as determined 
by the corporation, or a targeted low- or mod-
erate-income population; 
‘‘(B) maintains, through significant rep-
resentation on the organization’s board of direc-
tors or other governing body, accountability to 
the specific targeted area or population served 
by the organization; and 
‘‘(C) whose primary purpose includes the 
provision of low-income housing or community 
economic development projects that primarily 
benefit low-income individuals or communities. 
‘‘(2) ELIGIBLE COMMUNITY DEVELOPMENT OR-
GANIZATION.—The term ‘eligible community devel-
opment organization’ means a community develop-
ment organization that meets the requirements of 
subsection (c). 
‘‘(3) NONPROFIT
ORGANIZATION.—The term 
‘nonprofit organization’ means an organization (in-
cluding a State or locally chartered organization) 
that— 
‘‘(A) is organized under State or local 
laws; 
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‘‘(B) has no part of its net earnings inur-
ing to the benefit of any member, founder, con-
tributor, or individual; and 
‘‘(C) complies with standards of financial 
accountability acceptable to the corporation. 
‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—In addi-
tion to any amounts authorized to be appropriated under 
section 609(a) or appropriated pursuant to such section, 
there are authorized to be appropriated to the Neighbor-
hood Reinvestment Corporation such sums as may be nec-
essary for assistance under this section.’’. 
Æ 
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