H. R. 3700 
One Hundred Fourteenth Congress 
of the 
United States of America 
AT THE SECOND SESSION 
Begun and held at the City of Washington on Monday, 
the fourth day of January, two thousand and sixteen 
An Act 
To provide housing opportunities in the United States through modernization of 
various housing programs, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Housing Oppor-
tunity Through Modernization Act of 2016’’. 
(b) TABLE OF CONTENTS.—The table of contents for this Act 
is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—SECTION 8 RENTAL ASSISTANCE AND PUBLIC HOUSING 
Sec. 101. Inspection of dwelling units. 
Sec. 102. Income reviews. 
Sec. 103. Limitation on public housing tenancy for over-income families. 
Sec. 104. Limitation on eligibility for assistance based on assets. 
Sec. 105. Units owned by public housing agencies. 
Sec. 106. PHA project-based assistance. 
Sec. 107. Establishment of fair market rent. 
Sec. 108. Collection of utility data. 
Sec. 109. Public housing Capital and Operating Funds. 
Sec. 110. Family unification program for children aging out of foster care. 
Sec. 111. Public housing heating guidelines. 
Sec. 112. Use of vouchers for manufactured housing. 
Sec. 113. Preference for United States citizens or nationals. 
Sec. 114. Exception to public housing agency resident board member requirement. 
TITLE II—RURAL HOUSING 
Sec. 201. Delegation of guaranteed rural housing loan approval. 
Sec. 202. Guaranteed underwriting user fee. 
TITLE III—FHA MORTGAGE INSURANCE FOR CONDOMINIUMS 
Sec. 301. Modification of FHA requirements for mortgage insurance for condomin-
iums. 
TITLE IV—HOUSING REFORMS FOR THE HOMELESS AND FOR VETERANS 
Sec. 401. Definition of geographic area for Continuum of Care Program. 
Sec. 402. Inclusion of public housing agencies and local redevelopment authorities 
in emergency solutions grants. 
Sec. 403. Special assistant for Veterans Affairs in the Department of Housing and 
Urban Development. 
Sec. 404. Annual supplemental report on veterans homelessness. 
Sec. 405. Reopening of public comment period for continuum of care program regu-
lations. 
TITLE V—MISCELLANEOUS 
Sec. 501. Inclusion of Disaster Housing Assistance Program in certain fraud and 
abuse prevention measures. 
Sec. 502. Energy efficiency requirements under Self-Help Homeownership Oppor-
tunity program.
H. R. 3700—2 
Sec. 503. Data exchange standardization for improved interoperability. 
TITLE VI—REPORTS 
Sec. 601. Report on interagency family economic empowerment strategies. 
TITLE VII—HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS 
Sec. 701. Formula and terms for allocations to prevent homelessness for individuals 
living with HIV or AIDS. 
TITLE I—SECTION 8 RENTAL 
ASSISTANCE AND PUBLIC HOUSING 
SEC. 101. INSPECTION OF DWELLING UNITS. 
(a) IN GENERAL.—Section 8(o)(8) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f(o)(8)) is amended— 
(1) by striking subparagraph (A) and inserting the following 
new subparagraph: 
‘‘(A) INITIAL INSPECTION.— 
‘‘(i) IN GENERAL.—For each dwelling unit for which 
a housing assistance payment contract is established 
under this subsection, the public housing agency (or 
other entity pursuant to paragraph (11)) shall inspect 
the unit before any assistance payment is made to 
determine whether the dwelling unit meets the housing 
quality standards under subparagraph (B), except as 
provided in clause (ii) or (iii) of this subparagraph. 
‘‘(ii) CORRECTION OF NON-LIFE-THREATENING CONDI-
TIONS.—In the case of any dwelling unit that is deter-
mined, pursuant to an inspection under clause (i), not 
to meet the housing quality standards under subpara-
graph (B), assistance payments may be made for the 
unit notwithstanding subparagraph (C) if failure to 
meet such standards is a result only of non-life-threat-
ening conditions, as such conditions are established 
by the Secretary. A public housing agency making 
assistance payments pursuant to this clause for a 
dwelling unit shall, 30 days after the beginning of 
the period for which such payments are made, withhold 
any assistance payments for the unit if any deficiency 
resulting in noncompliance with the housing quality 
standards has not been corrected by such time. The 
public housing agency shall recommence assistance 
payments when such deficiency has been corrected, 
and may use any payments withheld to make assist-
ance payments relating to the period during which 
payments were withheld. 
‘‘(iii) USE OF ALTERNATIVE INSPECTION METHOD FOR 
INTERIM
PERIOD.—In the case of any property that 
within the previous 24 months has met the require-
ments of an inspection that qualifies as an alternative 
inspection method pursuant to subparagraph (E), a 
public housing agency may authorize occupancy before 
the inspection under clause (i) has been completed, 
and may make assistance payments retroactive to the 
beginning of the lease term after the unit has been 
determined pursuant to an inspection under clause 
(i) to meet the housing quality standards under
H. R. 3700—3 
subparagraph (B). This clause may not be construed 
to exempt any dwelling unit from compliance with 
the requirements of subparagraph (D).’’; 
(2) by redesignating subparagraph (G) as subparagraph 
(H); and 
(3) by inserting after subparagraph (F) the following new 
subparagraph: 
‘‘(G) ENFORCEMENT OF HOUSING QUALITY STANDARDS.— 
‘‘(i) 
DETERMINATION
OF
NONCOMPLIANCE.—A 
dwelling unit that is covered by a housing assistance 
payments contract under this subsection shall be 
considered, for purposes of subparagraphs (D) and (F), 
to be in noncompliance with the housing quality stand-
ards under subparagraph (B) if— 
‘‘(I) the public housing agency or an inspector 
authorized by the State or unit of local government 
determines upon inspection of the unit that the 
unit fails to comply with such standards; 
‘‘(II) the agency or inspector notifies the owner 
of the unit in writing of such failure to comply; 
and 
‘‘(III) the failure to comply is not corrected— 
‘‘(aa) in the case of any such failure that 
is a result of life-threatening conditions, 
within 24 hours after such notice has been 
provided; and 
‘‘(bb) in the case of any such failure that 
is a result of non-life-threatening conditions, 
within 30 days after such notice has been pro-
vided or such other reasonable longer period 
as the public housing agency may establish. 
‘‘(ii) 
WITHHOLDING
OF
ASSISTANCE
AMOUNTS 
DURING CORRECTION.—The public housing agency may 
withhold assistance amounts under this subsection 
with respect to a dwelling unit for which a notice 
pursuant to clause (i)(II), of failure to comply with 
housing quality standards under subparagraph (B) as 
determined pursuant to an inspection conducted under 
subparagraph (D) or (F), has been provided. If the 
unit is brought into compliance with such housing 
quality standards during the periods referred to in 
clause (i)(III), the public housing agency shall recom-
mence assistance payments and may use any amounts 
withheld during the correction period to make assist-
ance payments relating to the period during which 
payments were withheld. 
‘‘(iii) ABATEMENT OF ASSISTANCE AMOUNTS.—The 
public housing agency shall abate all of the assistance 
amounts under this subsection with respect to a 
dwelling unit that is determined, pursuant to clause 
(i) of this subparagraph, to be in noncompliance with 
housing quality standards under subparagraph (B). 
Upon completion of repairs by the public housing 
agency or the owner sufficient so that the dwelling 
unit complies with such housing quality standards, 
the agency shall recommence payments under the
H. R. 3700—4 
housing assistance payments contract to the owner 
of the dwelling unit. 
‘‘(iv) NOTIFICATION.—If a public housing agency 
providing assistance under this subsection abates 
rental assistance payments pursuant to clause (iii) with 
respect to a dwelling unit, the agency shall, upon 
commencement of such abatement— 
‘‘(I) notify the tenant and the owner of the 
dwelling unit that— 
‘‘(aa) such abatement has commenced; and 
‘‘(bb) if the dwelling unit is not brought 
into compliance with housing quality stand-
ards within 60 days after the effective date 
of the determination of noncompliance under 
clause (i) or such reasonable longer period as 
the agency may establish, the tenant will have 
to move; and 
‘‘(II) issue the tenant the necessary forms to 
allow the tenant to move to another dwelling unit 
and transfer the rental assistance to that unit. 
‘‘(v) PROTECTION
OF
TENANTS.—An owner of a 
dwelling unit may not terminate the tenancy of any 
tenant because of the withholding or abatement of 
assistance pursuant to this subparagraph. During the 
period that assistance is abated pursuant to this 
subparagraph, the tenant may terminate the tenancy 
by notifying the owner. 
‘‘(vi) TERMINATION OF LEASE OR ASSISTANCE PAY-
MENTS CONTRACT.—If assistance amounts under this 
section for a dwelling unit are abated pursuant to 
clause (iii) and the owner does not correct the non-
compliance within 60 days after the effective date of 
the determination of noncompliance under clause (i), 
or such other reasonable longer period as the public 
housing agency may establish, the agency shall termi-
nate the housing assistance payments contract for the 
dwelling unit. 
‘‘(vii) RELOCATION.— 
‘‘(I) LEASE OF NEW UNIT.—The agency shall 
provide the family residing in such a dwelling 
unit a period of 90 days or such longer period 
as the public housing agency determines is reason-
ably necessary to lease a new unit, beginning upon 
termination of the contract, to lease a new resi-
dence with tenant-based rental assistance under 
this section. 
‘‘(II) AVAILABILITY OF PUBLIC HOUSING UNITS.— 
If the family is unable to lease such a new resi-
dence during such period, the public housing 
agency shall, at the option of the family, provide 
such family a preference for occupancy in a 
dwelling unit of public housing that is owned or 
operated by the agency that first becomes available 
for occupancy after the expiration of such period. 
‘‘(III) ASSISTANCE
IN
FINDING
UNIT.—The 
public housing agency may provide assistance to 
the family in finding a new residence, including
H. R. 3700—5 
use of up to two months of any assistance amounts 
withheld or abated pursuant to clause (ii) or (iii), 
respectively, for costs directly associated with 
relocation of the family to a new residence, which 
shall include security deposits as necessary and 
may 
include 
reimbursements 
for 
reasonable 
moving expenses incurred by the household, as 
established by the Secretary. The agency may 
require that a family receiving assistance for a 
security deposit shall remit, to the extent of such 
assistance, the amount of any security deposit 
refunds made by the owner of the dwelling unit 
for which the lease was terminated. 
‘‘(viii) TENANT-CAUSED
DAMAGES.—If a public 
housing agency determines that any damage to a 
dwelling unit that results in a failure of the dwelling 
unit to comply with housing quality standards under 
subparagraph (B), other than any damage resulting 
from ordinary use, was caused by the tenant, any 
member of the tenant’s household, or any guest or 
other person under the tenant’s control, the agency 
may waive the applicability of this subparagraph, 
except that this clause shall not exonerate a tenant 
from any liability otherwise existing under applicable 
law for damages to the premises caused by such tenant. 
‘‘(ix) APPLICABILITY.—This subparagraph shall 
apply to any dwelling unit for which a housing assist-
ance payments contract is entered into or renewed 
after the date of the effectiveness of the regulations 
implementing this subparagraph.’’. 
(b) EFFECTIVE DATE.—The Secretary of Housing and Urban 
Development shall issue notice or regulations to implement sub-
section (a) of this section and such subsection shall take effect 
upon such issuance. 
SEC. 102. INCOME REVIEWS. 
(a) INCOME REVIEWS FOR PUBLIC HOUSING AND SECTION 8 PRO-
GRAMS.—Section 3 of the United States Housing Act of 1937 (42 
U.S.C. 1437a) is amended— 
(1) in subsection (a)— 
(A) in the second sentence of paragraph (1), by striking 
‘‘at least annually’’ and inserting ‘‘pursuant to paragraph 
(6)’’; and 
(B) by adding at the end the following new paragraphs: 
‘‘(6) REVIEWS OF FAMILY INCOME.— 
‘‘(A) FREQUENCY.—Reviews of family income for pur-
poses of this section shall be made— 
‘‘(i) in the case of all families, upon the initial 
provision of housing assistance for the family; 
‘‘(ii) annually thereafter, except as provided in 
paragraph (1) with respect to fixed-income families; 
‘‘(iii) upon the request of the family, at any time 
the income or deductions (under subsection (b)(5)) of 
the family change by an amount that is estimated 
to result in a decrease of 10 percent (or such lower 
amount as the Secretary may, by notice, establish,
H. R. 3700—6 
or permit the public housing agency or owner to estab-
lish) or more in annual adjusted income; and 
‘‘(iv) at any time the income or deductions (under 
subsection (b)(5)) of the family change by an amount 
that is estimated to result in an increase of 10 percent 
or more in annual adjusted income, or such other 
amount as the Secretary may by notice establish, 
except that any increase in the earned income of a 
family shall not be considered for purposes of this 
clause (except that earned income may be considered 
if the increase corresponds to previous decreases under 
clause (iii)), except that a public housing agency or 
owner may elect not to conduct such review in the 
last three months of a certification period. 
‘‘(B) IN GENERAL.—Reviews of family income for pur-
poses of this section shall be subject to the provisions 
of section 904 of the Stewart B. McKinney Homeless Assist-
ance Amendments Act of 1988 (42 U.S.C. 3544). 
‘‘(7) CALCULATION OF INCOME.— 
‘‘(A) USE OF CURRENT YEAR INCOME.—In determining 
family income for initial occupancy or provision of housing 
assistance pursuant to clause (i) of paragraph (6)(A) or 
pursuant to reviews pursuant to clause (iii) or (iv) of such 
paragraph, a public housing agency or owner shall use 
the income of the family as estimated by the agency or 
owner for the upcoming year. 
‘‘(B) USE
OF
PRIOR
YEAR
INCOME.—In determining 
family income for annual reviews pursuant to paragraph 
(6)(A)(ii), a public housing agency or owner shall, except 
as otherwise provided in this paragraph and paragraph 
(1), use the income of the family as determined by the 
agency or owner for the preceding year, taking into consid-
eration any redetermination of income during such prior 
year pursuant to clause (iii) or (iv) of paragraph (6)(A). 
‘‘(C) OTHER INCOME.—In determining the income for 
any family based on the prior year’s income, with respect 
to prior year calculations of income not subject to subpara-
graph (B), a public housing agency or owner may make 
other adjustments as it considers appropriate to reflect 
current income. 
‘‘(D) SAFE HARBOR.—A public housing agency or owner 
may, to the extent such information is available to the 
public housing agency or owner, determine the family’s 
income prior to the application of any deductions based 
on timely income determinations made for purposes of other 
means-tested Federal public assistance programs (including 
the program for block grants to States for temporary assist-
ance for needy families under part A of title IV of the 
Social Security Act, a program for Medicaid assistance 
under a State plan approved under title XIX of the Social 
Security Act, and the supplemental nutrition assistance 
program (as such term is defined in section 3 of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2012))). The Secretary 
shall, in consultation with other appropriate Federal agen-
cies, develop electronic procedures to enable public housing 
agencies and owners to have access to such benefit deter-
minations made by other means-tested Federal programs
H. R. 3700—7 
that the Secretary determines to have comparable reli-
ability. Exchanges of such information shall be subject 
to the same limitations and tenant protections provided 
under section 904 of the Stewart B. McKinney Homeless 
Assistance Act Amendments of 1988 (42 U.S.C. 3544) with 
respect to information obtained under the requirements 
of section 303(i) of the Social Security Act (42 U.S.C. 503(i)). 
‘‘(E) ELECTRONIC
INCOME
VERIFICATION.—The Sec-
retary shall develop a mechanism for disclosing information 
to a public housing agency for the purpose of verifying 
the employment and income of individuals and families 
in accordance with section 453(j)(7)(E) of the Social Security 
Act (42 U.S.C. 653(j)(7)(E)), and shall ensure public housing 
agencies have access to information contained in the ‘Do 
Not Pay’ system established by section 5 of the Improper 
Payments Elimination and Recovery Improvement Act of 
2012 (Public Law 112–248; 126 Stat. 2392). 
‘‘(F) PHA AND OWNER COMPLIANCE.—A public housing 
agency or owner may not be considered to fail to comply 
with this paragraph or paragraph (6) due solely to any 
de minimis errors made by the agency or owner in calcu-
lating family incomes.’’; 
(2) by striking subsections (d) and (e); and 
(3) by redesignating subsection (f) as subsection (d). 
(b) CERTIFICATION REGARDING HARDSHIP EXCEPTION TO MIN-
IMUM MONTHLY RENT.—Not later than the expiration of the 6- 
month period beginning on the date of the enactment of this Act, 
the Secretary of Housing and Urban Development shall submit 
to the Congress a certification that the hardship and tenant protec-
tion provisions in clause (i) of section 3(a)(3)(B) of the United 
States Housing Act of 1937 (42 U.S.C. 1437a(a)(3)(B)(i)) are being 
enforced at such time and that the Secretary will continue to 
provide due consideration to the hardship circumstances of persons 
assisted under relevant programs of this Act. 
(c) INCOME; ADJUSTED INCOME.—Section 3(b) of the United 
States Housing Act of 1937 (42 U.S.C. 1437a(b)) is amended by 
striking paragraphs (4) and (5) and inserting the following new 
paragraphs: 
‘‘(4) INCOME.—The term ‘income’ means, with respect to 
a family, income received from all sources by each member 
of the household who is 18 years of age or older or is the 
head of household or spouse of the head of the household, 
plus unearned income by or on behalf of each dependent who 
is less than 18 years of age, as determined in accordance 
with criteria prescribed by the Secretary, in consultation with 
the Secretary of Agriculture, subject to the following require-
ments: 
‘‘(A) INCLUDED AMOUNTS.—Such term includes recur-
ring gifts and receipts, actual income from assets, and 
profit or loss from a business. 
‘‘(B) 
EXCLUDED
AMOUNTS.—Such 
term 
does 
not 
include— 
‘‘(i) any imputed return on assets, except to the 
extent that net family assets exceed $50,000, except 
that such amount (as it may have been previously 
adjusted) shall be adjusted for inflation annually by
H. R. 3700—8 
the Secretary in accordance with an inflationary index 
selected by the Secretary; 
‘‘(ii) any amounts that would be eligible for exclu-
sion under section 1613(a)(7) of the Social Security 
Act (42 U.S.C. 1382b(a)(7)); 
‘‘(iii) deferred disability benefits from the Depart-
ment of Veterans Affairs that are received in a lump 
sum amount or in prospective monthly amounts; 
‘‘(iv) any expenses related to aid and attendance 
under section 1521 of title 38, United States Code, 
to veterans who are in need of regular aid and attend-
ance; and 
‘‘(v) exclusions from income as established by the 
Secretary by regulation or notice, or any amount 
required by Federal law to be excluded from consider-
ation as income. 
‘‘(C) EARNED INCOME OF STUDENTS.—Such term does 
not include— 
‘‘(i) earned income, up to an amount as the Sec-
retary may by regulation establish, of any dependent 
earned during any period that such dependent is 
attending school or vocational training on a full-time 
basis; or 
‘‘(ii) any grant-in-aid or scholarship amounts 
related to such attendance used— 
‘‘(I) for the cost of tuition or books; or 
‘‘(II) in such amounts as the Secretary may 
allow, for the cost of room and board. 
‘‘(D) EDUCATIONAL SAVINGS ACCOUNTS.—Income shall 
be determined without regard to any amounts in or from, 
or any benefits from, any Coverdell education savings 
account under section 530 of the Internal Revenue Code 
of 1986 or any qualified tuition program under section 
529 of such Code. 
‘‘(E) RECORDKEEPING.—The Secretary may not require 
a public housing agency or owner to maintain records of 
any amounts excluded from income pursuant to this 
subparagraph. 
‘‘(5) ADJUSTED INCOME.—The term ‘adjusted income’ means, 
with respect to a family, the amount (as determined by the 
public housing agency or owner) of the income of the members 
of the family residing in a dwelling unit or the persons on 
a lease, after any deductions from income as follows: 
‘‘(A) ELDERLY AND DISABLED FAMILIES.—$525 in the 
case of any family that is an elderly family or a disabled 
family. 
‘‘(B) MINORS, STUDENTS, AND PERSONS WITH DISABIL-
ITIES.—$480 for each member of the family residing in 
the household (other than the head of the household or 
his or her spouse) who is less than 18 years of age or 
is attending school or vocational training on a full-time 
basis, or who is 18 years of age or older and is a person 
with disabilities. 
‘‘(C) CHILD CARE.—Any reasonable child care expenses 
necessary to enable a member of the family to be employed 
or to further his or her education.
H. R. 3700—9 
‘‘(D) HEALTH AND MEDICAL EXPENSES.—The amount, 
if any, by which 10 percent of annual family income is 
exceeded by the sum of— 
‘‘(i) in the case of any elderly or disabled family, 
any unreimbursed health and medical care expenses; 
and 
‘‘(ii) any unreimbursed reasonable attendant care 
and auxiliary apparatus expenses for each handicapped 
member of the family, if determined necessary by the 
public housing agency or owner to enable any member 
of such family to be employed. 
The Secretary shall, by regulation, provide hardship exemp-
tions to the requirements of this subparagraph and 
subparagraph (C) for impacted families who demonstrate 
an inability to pay calculated rents because of financial 
hardship. Such regulations shall include a requirement 
to notify tenants regarding any changes to the determina-
tion of adjusted income pursuant to such subparagraphs 
based on the determination of the family’s claim of financial 
hardship exemptions required by the preceding sentence. 
Such regulations shall be promulgated in consultation with 
tenant organizations, industry participants, and the Sec-
retary of Health and Human Services, with an adequate 
comment period provided for interested parties. 
‘‘(E) PERMISSIVE DEDUCTIONS.—Such additional deduc-
tions as a public housing agency may, at its discretion, 
establish, except that the Secretary shall establish proce-
dures to ensure that such deductions do not materially 
increase Federal expenditures. 
The Secretary shall annually calculate the amounts of the 
deductions under subparagraphs (A) and (B), as such amounts 
may have been previously calculated, by applying an infla-
tionary factor as the Secretary shall, by regulation, establish, 
except that the actual deduction determined for each year shall 
be established by rounding such amount to the next lowest 
multiple of $25.’’. 
(d) HOUSING CHOICE VOUCHER PROGRAM.—Section 8(o) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(o)) is 
amended— 
(1) in paragraph (1)(D), by inserting before the period at 
the end the following: ‘‘, except that a public housing agency 
may establish a payment standard of not more than 120 percent 
of the fair market rent where necessary as a reasonable 
accommodation for a person with a disability, without approval 
of the Secretary. A public housing agency may use a payment 
standard that is greater than 120 percent of the fair market 
rent as a reasonable accommodation for a person with a dis-
ability, but only with the approval of the Secretary. In connec-
tion with the use of any increased payment standard estab-
lished or approved pursuant to either of the preceding two 
sentences as a reasonable accommodation for a person with 
a disability, the Secretary may not establish additional require-
ments regarding the amount of adjusted income paid by such 
person for rent’’; and 
(2) in paragraph (5)— 
(A) in the paragraph heading, by striking ‘‘ANNUAL 
REVIEW’’ and inserting ‘‘REVIEWS’’;