140
under this subsection of qualified participating enti-
ties’’;
(3) in the first sentence of paragraph (5), by
striking ‘‘1993 and 1994’’ and inserting ‘‘1995 and
1996’’;
(4) by striking paragraph (8) and inserting the
following new paragraph:
‘‘(11) IMPLEMENTATION.—The Secretary shall
take any administrative actions necessary to initiate
the pilot program under this subsection.’’; and
(5) by inserting after paragraph (7) the follow-
ing new paragraphs:
‘‘(8) 
PROHIBITION
ON
GINNIE
MAE
SECURITIZATION.—The Government National Mort-
gage Association shall not securitize any multifamily
loans insured or reinsured under this subsection.
‘‘(9) QUALIFICATION
AS
AFFORDABLE
HOUS-
ING.—Multifamily housing securing loans insured or
reinsured under this subsection shall qualify as af-
fordable only if the housing is occupied by families
and bears rents not greater than the gross rent for
rent-restricted residential units as determined under
section 42(g) of the Internal Revenue Code of 1986.
‘‘(10) CERTIFICATION
OF
SUBSIDY
LAYERING
COMPLIANCE.—In the case of projects allocated a
141
low-income housing tax credit pursuant to section 42
of the Internal Revenue Code of 1986, the require-
ments of section 102(d) of the Department of Hous-
ing and Urban Development Reform Act of 1989
may be satisfied in connection with a commitment to
insure a mortgage under this subsection by a certifi-
cation by a housing credit agency (including an en-
tity established by a State that provides mortgage
insurance) to the Secretary that the combination of
assistance within the jurisdiction of the Secretary
and other government assistance provided in connec-
tion with a property for which a mortgage is to be
insured shall not be any greater than is necessary to
provide affordable housing.’’.
(c) AMENDMENTS TO HOUSING FINANCE AGENCY
PILOT PROGRAM.—Section 542(c) of the Housing and
Community Development Act of 1992 (12 U.S.C. 1707
note) is amended—
(1) in paragraph (1), by inserting after ‘‘quali-
fied housing finance agencies’’ the following: ‘‘(in-
cluding entities established by States that provide
mortgage insurance)’’;
(2) in paragraph (2)—
(A) in subparagraph (C), by striking the
last sentence and inserting the following: ‘‘Such
142
agreements shall specify that the qualified
housing finance agency and the Secretary shall
share any loss in accordance with the risk-shar-
ing agreement.’’;
(B) in subparagraph (E), by adding at the
end the following new sentence: ‘‘Any financing
permitted on property insured under this sub-
section other than the first mortgage shall be
expressly subordinate to the insured mort-
gage.’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(F) DISCLOSURE
OF
RECORDS.—Quali-
fied housing finance agencies shall make avail-
able to the Secretary such financial and other
records as the Secretary deems necessary for
program review and monitoring purposes.’’;
(3) in paragraph (7)—
(A) by striking ‘‘very low-income’’; and
(B) by striking ‘‘42(g)(2)’’ and inserting
‘‘42(g)’’;
(4) by redesignating paragraph (8) as para-
graph (9); and
(5) by inserting after paragraph (7) the follow-
ing new paragraph:
143
‘‘(8) ENVIRONMENTAL AND OTHER REVIEWS.—
‘‘(A) ENVIRONMENTAL REVIEWS.—
‘‘(i) IN GENERAL.—(I) In order to en-
sure that the policies of the National Envi-
ronmental Policy Act of 1969 and other
provisions of law which further the pur-
poses of such Act (as specified in regula-
tions issued by the Secretary) are most ef-
fectively implemented in connection with
the insurance of mortgages under para-
graph (2) and to assure to the public
undiminished protection of the environ-
ment, the Secretary, in lieu of the environ-
mental protection procedures otherwise ap-
plicable, may under such regulations pro-
vide for agreements to endorse for insur-
ance mortgages under paragraph (2) upon
the request of a qualified housing finance
agency under this subsection if the State
or unit of general local government, as des-
ignated by the Secretary in accordance
with regulations, assumes all of the respon-
sibilities for environmental review, deci-
sionmaking, and action pursuant to such
Act, and such other provisions of law as
144
the regulations of the Secretary specify,
that would otherwise apply to the Sec-
retary with respect to the insurance of
mortgages on particular properties.
‘‘(II) The Secretary shall issue regula-
tions to carry out this subparagraph only
after consultation with the Council on En-
vironmental 
Quality. 
Such 
regulations
shall, among other matters, provide (aa)
for the monitoring of the performance of
environmental reviews under this subpara-
graph, (bb) in the discretion of the Sec-
retary, for the provision or facilitation of
training for the performance of such re-
views, and (cc) in the discretion of the Sec-
retary, for the suspension or termination of
the assumption under subclause (I). The
Secretary’s duty under the preceding sen-
tence shall not be construed to limit or re-
duce any responsibility assumed by a State
or unit of general local government with
respect to any particular property under
subclause (I).
‘‘(ii) PROCEDURE.—Where the provi-
sions authorized by this paragraph apply,
145
the Secretary shall approve a mortgage for
the provision of mortgage insurance only if
the qualified housing finance agency sub-
mits to the Secretary a request for such
approval—
‘‘(I) not less than 15 days prior
to such approval;
‘‘(II) prior to any approval, com-
mitment, or endorsement of mortgage
insurance on the property on behalf of
the Secretary; and
‘‘(III) prior to any commitment
by the qualified housing finance agen-
cy to provide financing under the risk-
sharing agreement with respect to the
property.
The request for approval shall be accom-
panied by a certification of the State or
unit of general local government that
meets the requirements of clause (iii). Ap-
proval by the Secretary of any such certifi-
cation shall be deemed to satisfy the Sec-
retary’s responsibilities under the National
Environmental Policy Act of 1969 and
such other provisions of law as the regula-
146
tions of the Secretary specify insofar as
such responsibilities relate to the provision
of mortgage insurance on the property that
is covered by such certification.
‘‘(iii) CERTIFICATION.—A certification
under the procedures authorized by this
paragraph shall—
‘‘(I) be in a form acceptable to
the Secretary;
‘‘(II) be executed by the chief ex-
ecutive officer or other officer of the
State or unit of general local govern-
ment who qualifies under regulations
of the Secretary;
‘‘(III) specify that the State or
unit of general local government
under this section has fully carried
out its responsibilities as described
under clause (i); and
‘‘(IV) specify that the certifying
officer consents to assume the status
of a responsible Federal official under
the National Environmental Policy
Act of 1969 and each provision of law
specified in regulations issued by the
147
Secretary insofar as the provisions of
such Act or other such provision of
law apply pursuant to clause (i), and
is authorized and consents on behalf
of the State or unit of general local
government and himself or herself to
accept the jurisdiction of the Federal
courts for the purpose of enforcement
of the responsibilities as such an offi-
cial.
‘‘(iv) 
APPROVAL
BY
STATES.—In
cases where a unit of general local govern-
ment carries out the responsibilities de-
scribed under clause (i), the Secretary may
permit the State to perform those actions
of the Secretary described in clause (ii)
and the performance of such actions by the
State, where permitted by the Secretary,
shall be deemed to satisfy the Secretary’s
responsibilities referred to in the third sen-
tence of clause (ii).
‘‘(B) LEAD-BASED PAINT POISONING PRE-
VENTION.—In carrying out the requirements of
section 302 of the Lead-Based Paint Poisoning
Prevention Act, the Secretary may provide by
148
regulation for the assumption of all or part of
the Secretary’s duties under such Act by quali-
fied housing finance agencies, for purposes of
this section.
‘‘(C) 
CERTIFICATION
OF
SUBSIDY
LAYERING
COMPLIANCE.—In 
the 
case 
of
projects allocated a low-income housing tax
credit pursuant to section 42 of the Internal
Revenue Code of 1986, the requirements of sec-
tion 102(d) of the Department of Housing and
Urban Development Reform Act of 1989 may
be satisfied in connection with a commitment to
insure a mortgage under this subsection by a
certification by a housing credit agency (includ-
ing an entity established by a State that pro-
vides mortgage insurance) to the Secretary that
the combination of assistance within the juris-
diction of the Secretary and other government
assistance provided in connection with a prop-
erty for which a mortgage is to be insured shall
not be any greater than is necessary to provide
affordable housing.’’.
(d) DEFINITIONS.—Section 544 of the Housing and
Community Development Act of 1992 (12 U.S.C. 1707
note) is amended—
149
(1) by striking paragraph (1) and inserting the
following new paragraph:
‘‘(1) The term ‘multifamily housing’ means
housing accommodations on the mortgaged property
that are designed principally for residential use, con-
form to standards satisfactory to the Secretary, and
consist of not less than 5 rental units on 1 site.
Such units may be detached, semidetached, row
house, or multifamily structures.’’;
(2) by redesignating paragraphs (1) (as so
amended), (2), (3), and (4) as paragraphs (3), (4),
(6), and (7), respectively;
(3) by inserting before paragraph (3) (as so re-
designated) the following new paragraphs:
‘‘(1) The term ‘first mortgage’ means a single
first lien that is given to secure advances on, or the
unpaid purchase price of, real estate, under the laws
of the State in which the real estate is located, to-
gether with the credit instrument, if any, secured
thereby.
‘‘(2) The term ‘mortgage’ means a first mort-
gage on real estate that is—
‘‘(A) owned in fee simple; or
‘‘(B) on a leasehold—
150
‘‘(i) under a lease for not less than 99
years that is renewable; or
‘‘(ii) under a lease having a period of
not less than 10 years to run beyond the
maturity of the mortgage.’’;
(4) by inserting after paragraph (4) (as so re-
designated) the following new paragraph:
‘‘(5) The term ‘qualified participating entity’
means an entity approved by the Secretary for par-
ticipation in the pilot program under this subsection,
which may include—
‘‘(A) the Federal National Mortgage Asso-
ciation;
‘‘(B) the Federal Home Loan Mortgage
Corporation;
‘‘(C) housing finance agencies; and
‘‘(D) 
the 
Federal 
Housing 
Finance
Board.’’; and
(5) by adding at the end the following new
paragraph:
‘‘(8) The terms ‘unit of general local govern-
ment’ and ‘State’ have the meanings given such
terms in section 102(a) of the Housing and Commu-
nity Development Act of 1974.’’.
151
(e) NATIONAL INTERAGENCY TASK FORCE ON MUL-
TIFAMILY HOUSING.—The first sentence of section 543(h)
of the Housing and Community Development Act of 1992
(12 U.S.C. 1707 note) is amended to read as follows:
‘‘There are authorized to be appropriated to carry out this
section $6,439,560 for fiscal year 1995 and $6,632,747
for fiscal year 1996.’’.
SEC. 405. INDIAN HOUSING LOAN GUARANTEES.
(a) LIMITATION
ON
OUTSTANDING
AGGREGATE
PRINCIPAL AMOUNT.—Section 184(i)(5)(C) of the Hous-
ing and Community Development Act of 1992 (12 U.S.C.
1515z–13a(i)(C)(5)) is amended by striking ‘‘fiscal years
1993 and 1994’’ and inserting ‘‘fiscal years 1995 and
1996’’.
(b) AUTHORIZATION OF APPROPRIATIONS FOR GUAR-
ANTEE FUND.—Section 184(i)(7) of the Housing and
Community Development Act of 1992 (12 U.S.C. 1515z–
13a(i)(7)) is amended to read as follows:
‘‘(7) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to the
Guarantee 
Fund 
to 
carry 
out 
this 
section
$50,000,000 for fiscal year 1995 and $50,000,000
for fiscal year 1996.’’.
152
Subtitle B—Multifamily Housing
Property Disposition
SEC. 431. SHORT TITLE.
This subtitle may be cited as the ‘‘Multifamily Hous-
ing Property Disposition Reform Act’’.
SEC. 
432. 
DISPOSITION 
OF 
MULTIFAMILY 
HOUSING
PROJECTS OWNED BY HUD.
(a) CONGRESSIONAL FINDINGS.—The Congress finds
that—
(1) the portfolio of multifamily housing project
mortgages insured by the FHA is severely troubled
and at risk of default, requiring the Secretary to in-
crease loss reserves from $5,500,000,000 in 1991 to
$11,900,000,000 in 1992 to cover estimated future
losses;
(2) the inventory of multifamily housing
projects owned by the Secretary has more than tri-
pled since 1989;
(3) the cost to the Federal Government of own-
ing and maintaining multifamily housing projects es-
calated to approximately $250,000,000 in fiscal year
1992;
(4) the inventory of multifamily housing
projects subject to mortgages held by the Secretary
has increased dramatically, to more than 2,400
153
mortgages, and approximately half of these mort-
gages, with over 230,000 units, are delinquent;
(5) the inventory of insured and formerly in-
sured multifamily housing projects is rapidly deterio-
rating, endangering tenants and neighborhoods;
(6) many of the more than 5 million families
having a critical need for housing that is affordable
and habitable could benefit from the disposition of
projects in the inventory owned by the Secretary;
and
(7) the current statutory framework governing
the disposition of multifamily housing projects effec-
tively impedes the Government’s ability to dispose of
projects, protect tenants, and ensure that projects
are maintained over time.
(b) MANAGEMENT AND DISPOSITION OF MULTIFAM-
ILY HOUSING PROJECTS.—Section 203 of the Housing
and Community Development Amendments of 1978 (12
U.S.C. 1701z–11) is amended to read as follows:
‘‘SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAM-
ILY HOUSING PROJECTS.
‘‘(a) GOALS.—The Secretary of Housing and Urban
Development shall manage or dispose of multifamily hous-
ing projects that are owned by the Secretary or that are
154
subject to a mortgage held by the Secretary in a manner
consistent with this section that—
‘‘(1) is consistent with the National Housing
Act;
‘‘(2) will, in the least costly fashion among rea-
sonable available alternatives, preserve the housing
as available to and affordable by low-income fami-
lies;
‘‘(3) will protect the financial interests of the
Federal Government; and
‘‘(4) will, in the least costly fashion among rea-
sonable available alternatives, further the goals of—
‘‘(A) preserving and revitalizing residential
neighborhoods;
‘‘(B) maintaining existing housing stock in
a decent, safe, and sanitary condition;
‘‘(C) minimizing the involuntary displace-
ment of tenants;
‘‘(D) maintaining housing for the purpose
of providing rental housing, cooperative hous-
ing, and homeownership opportunities for low-
income persons; and
‘‘(E) minimizing the need to demolish mul-
tifamily housing projects.
155
The Secretary, in determining the manner in which a
project is to be managed or disposed of, may balance com-
peting goals relating to individual projects in a manner
that will further the purposes of this section.
‘‘(b) DEFINITIONS.—For purposes of this section:
‘‘(1) MULTIFAMILY
HOUSING
PROJECT.—The
term ‘multifamily housing project’ means any multi-
family rental housing project which is, or prior to
acquisition by the Secretary was, assisted or insured
under the National Housing Act, or was subject to
a loan under section 202 of the Housing Act of
1959.
‘‘(2) ASSISTED PROJECT.—The term ‘assisted
project’ means a multifamily housing project that,
immediately prior to the assignment of the mortgage
on such project to, or the acquisition of such mort-
gage by, the Secretary, was receiving any of the fol-
lowing types of assistance:
‘‘(A) Rent supplement payments under sec-
tion 101 of the Housing and Urban Develop-
ment Act of 1965.
‘‘(B) Additional assistance payments under
section 236(f)(2) of the National Housing Act.
‘‘(C) Housing assistance payments made
under section 23 of the United States Housing
156
Act of 1937 (as in effect before January 1,
1975).
‘‘(D) Housing assistance payments made
under section 8 of the United States Housing
Act of 1937 (excluding payments made for ten-
ant-based assistance under section 8).
‘‘(3) AFFORDABLE.—A unit shall be considered
affordable if—
‘‘(A) for units occupied—
‘‘(i) by very low-income families, the
rent does not exceed 30 percent of 50 per-
cent of the area median income, as deter-
mined by the Secretary, with adjustments
for smaller and larger families, except that
the Secretary may establish the rent based
on an amount higher or lower than 50 per-
cent of the median for the area on the
basis of the Secretary’s findings that such
variation is necessary because of prevailing
levels of construction costs or fair market
rents, or unusually high or low family in-
comes; and
‘‘(ii) by low-income families other
than very low-income families, the rent
does not exceed 30 percent of 80 percent
157
of the area median income, as determined
by the Secretary, except that the Secretary
may establish the rent based on an amount
higher or lower than 80 percent of the me-
dian for the area on the basis of the Sec-
retary’s findings that such variation is nec-
essary because of prevailing levels of con-
struction costs or fair market rents, or un-
usually high or low family incomes; or
‘‘(B) assistance is provided under section 8
of the United States Housing Act of 1937 for
the unit or on behalf of the family residing in
the unit.
‘‘(4) DATE OF DISPOSITION.—The term ‘date of
disposition’ means, with respect to a multifamily
housing project acquired pursuant to this section by
a purchaser other than the Secretary at foreclosure
or after sale by the Secretary, the date on which the
project is acquired by the purchaser.
‘‘(5) LOW-INCOME FAMILIES AND VERY LOW-IN-
COME FAMILIES.—The terms ‘low-income families’
and ‘very low-income families’ shall have the mean-
ings given the terms in section 3(b) of the United
States Housing Act of 1937.
158
‘‘(6) PREEXISTING
TENANT.—The term ‘pre-
existing tenant’ means, with respect to a multifamily
housing project acquired pursuant to this section by
a purchaser other than the Secretary at foreclosure
or after sale by the Secretary, a family that resides
in a unit in the project immediately before the date
of disposition of the project.
‘‘(7) MARKET AREA.—The term ‘market area’
means a market area determined by the Secretary
for purposes of establishing fair market rentals
under section 8(e) of the United States Housing Act
of 1937.
‘‘(8) SECRETARY.—The term ‘Secretary’ means
the Secretary of Housing and Urban Development.
‘‘(c) 
MANAGEMENT
OR
DISPOSITION
OF
PROJECTS.—
‘‘(1) DISPOSITION TO PURCHASERS.—The Sec-
retary may, in carrying out this section, dispose of
a multifamily housing project owned by the Sec-
retary on a negotiated, competitive bid, or other
basis, on such terms as the Secretary deems appro-
priate considering the low-income character of the
project and the market area in which the project is
located and the requirements of this section, to a
159
purchaser determined by the Secretary to be capable
of—
‘‘(A) satisfying the conditions of the dis-
position;
‘‘(B) implementing a sound financial and
physical management program that is designed
to enable the project to meet anticipated oper-
ating and repair expenses to ensure that the
project will remain in decent, safe, and sanitary
condition;
‘‘(C) responding to the needs of the ten-
ants and working cooperatively with tenant or-
ganizations;
‘‘(D) providing adequate organizational,
staff, and financial resources to the project; and
‘‘(E) meeting such other requirements as
the Secretary may determine.
‘‘(2) CONTRACTING
FOR
MANAGEMENT
SERV-
ICES.—The Secretary may, in carrying out this sec-
tion—
‘‘(A) contract for management services for
a multifamily housing project that is owned by
the Secretary (or for which the Secretary is
mortgagee in possession), on a negotiated, com-
petitive bid, or other basis at a price deter-
160
mined by the Secretary to be reasonable, with
a manager the Secretary has determined is ca-
pable of—
‘‘(i) implementing a sound financial
and physical management program that is
designed to enable the project to meet an-
ticipated operating and maintenance ex-
penses to ensure that the project will re-
main in decent, safe, and sanitary condi-
tion;
‘‘(ii) responding to the needs of the
tenants and working cooperatively with
tenant organizations;
‘‘(iii) providing adequate organiza-
tional, staff, and other resources to imple-
ment a management program determined
by the Secretary; and
‘‘(iv) meeting such other requirements
as the Secretary may determine;
‘‘(B) require the owner of a multifamily
housing project that is subject to a mortgage
held by the Secretary to contract for manage-
ment services for the project in the manner de-
scribed in subparagraph (A); and
161
‘‘(C) contract for management of such
projects with nonprofit organizations and public
agencies, including public housing authorities.
‘‘(d) MAINTENANCE OF HOUSING PROJECTS.—
‘‘(1) HOUSING PROJECTS OWNED BY THE SEC-
RETARY.—In the case of multifamily housing
projects that are owned by the Secretary (or for
which the Secretary is mortgagee in possession), the
Secretary shall—
‘‘(A) to the greatest extent possible, main-
tain all such occupied projects in a decent, safe,
and sanitary condition;
‘‘(B) to the greatest extent possible, main-
tain full occupancy in all such projects; and
‘‘(C) maintain all such projects for pur-
poses of providing rental or cooperative hous-
ing.
‘‘(2) HOUSING PROJECTS SUBJECT TO A MORT-
GAGE HELD BY SECRETARY.—In the case of any
multifamily housing project that is subject to a
mortgage held by the Secretary, the Secretary shall
require the owner of the project to carry out the re-
quirements of paragraph (1).
‘‘(3) HOUSING
STANDARDS.—In disposing of
any multifamily housing project under this section,
162
the Secretary shall enter into an agreement with the
purchaser under which the purchaser agrees that the
project will be rehabilitated so that it is in compli-
ance with, and will be maintained in compliance
with, any standards under applicable State or local
laws, rules, ordinances, or regulations relating to the
physical condition of the housing and any such
standards established by the Secretary.
‘‘(e) REQUIRED DISPOSITION ASSISTANCE FOR AS-
SISTED PROJECTS.—Except as provided in subsection (f),
in disposing of any assisted project to a purchaser other
than the Secretary at foreclosure or after sale by the Sec-
retary, the Secretary shall enter into a contract under sec-
tion 8 of the United States Housing Act of 1937 (to the
extent budget authority is available) with the owner of the
assisted project to provide project-based assistance under
such section for the project, subject to the following re-
quirements:
‘‘(1) NUMBER OF UNITS ASSISTED.—The con-
tract shall be sufficient to assist at least all units in
the assisted project covered by an assistance con-
tract under any of the authorities referred to in sub-
section (b)(2) immediately before the date of disposi-
tion of the project.
163
‘‘(2) VACANCIES.—The contract shall provide
that, when a vacancy occurs in any unit in the as-
sisted project requiring project-based rental assist-
ance pursuant to this subsection that is occupied by
a family who is not eligible for assistance under such
section 8, the owner shall lease the available unit to
a family eligible for assistance under such section 8.
‘‘(f) OPTION TO SUBSTITUTE TENANT-BASED DIS-
POSITION ASSISTANCE FOR ASSISTED PROJECTS IN SOFT
MARKETS.—
‘‘(1) AUTHORITY.—In disposing of any assisted
project that is located in a market area in which, in
the determination of the Secretary, an adequate sup-
ply of habitable, affordable housing for very low-in-
come families and other low-income families is avail-
able, the Secretary may, for any unit in the assisted
project otherwise required to receive assistance pur-
suant to subsection (e), provide tenant-based assist-
ance under section 8 of the United States Housing
Act of 1937 on behalf of one low-income family in-
stead of providing project-based assistance for the
unit.
‘‘(2) FAMILY ASSISTED.—Notwithstanding any
other provision of law, the tenant-based assistance
provided under this subsection to replace project-
164
based assistance otherwise required for a unit in an
assisted project shall be used on behalf of the family
that is the preexisting tenant of such unit, during
the period beginning upon the availability of such
assistance and ending upon the earlier of (A) the ex-
piration of the term of the assistance contract for
the tenant-based assistance, or (B) the time at
which such family first fails to qualify for such as-
sistance. If, pursuant to the preceding sentence,
such assistance ceases to be used on behalf of the
preexisting tenant family of the unit, the public
housing agency administering such assistance may
make the assistance available to another family
qualified to receive such assistance from the agency.
‘‘(3) ASSISTANCE
CONTRACT.—Tenant-based
assistance under this subsection shall be provided
pursuant to an annual contribution contract entered
into by the Secretary and the appropriate public
housing agency.
‘‘(4) APPLICABILITY OF AVAILABILITY AND AF-
FORDABILITY RESTRICTIONS.—The requirements of
subsection (g) shall apply to any unit in an assisted
project for which project-based assistance otherwise
required under subsection (e) has been replaced pur-
165
suant to this subsection by providing tenant-based
assistance.
‘‘(g) REQUIRED AVAILABILITY AND AFFORDABILITY
RESTRICTIONS FOR UNASSISTED UNITS.—
‘‘(1) IN GENERAL.—In disposing of any multi-
family housing project to a purchaser other than the
Secretary at foreclosure or after sale by the Sec-
retary, the Secretary shall require the purchaser of
the project to establish use or rent restrictions for
the project to ensure compliance, during the remain-
ing useful life of the project (as defined by the Sec-
retary), with the following requirements:
‘‘(A) LOW-INCOME USE.—Subject to sub-
paragraph (B), any unit in the project that
does not receive project-based assistance under
subsection (e) shall be made available to only
low-income families and shall be affordable to
such families.
‘‘(B) VERY
LOW-INCOME
UNITS.—In the
project, not less than 40 percent of the units
referred to in subparagraph (A) shall be made
available to only very low-income families and
shall be affordable to such families.
‘‘(C) RENT
RESTRICTIONS
FOR
UNAS-
SISTED VERY LOW-INCOME FAMILIES.—Any un-
166
assisted very low-income family who is a pre-
existing tenant of the project may not pay as
rent for a unit in the project an amount in ex-
cess of 30 percent of the adjusted income of the
family at any time during the period beginning
upon the date of disposition of the project and
ending upon the time at which the family first
fails to qualify as a very low-income family.
‘‘(D) PHASE-IN OF RENT INCREASES.—If
the disposition under this section of any multi-
family housing project results in any rent in-
crease for any unassisted very low-income fam-
ily who is a preexisting tenant of the project
and is paying less than 30 percent of the ad-
justed income of the family for rent, such rent
increases shall be phased in equally over a pe-
riod of not less than 3 years.
‘‘(2) ASSISTANCE FOR VERY LOW-INCOME TEN-
ANTS.—If, as a result of actions taken pursuant to
this subsection, the rent charged to any very low-in-
come family residing in a unit in the project for
which project-based assistance under subsection (e)
is not provided exceeds the amount payable as rent
under paragraph (1)(C), the Secretary shall provide
167
assistance under section 8 of such Act on behalf of
such family.
‘‘(3) DEFINITION OF ‘UNASSISTED VERY LOW-
INCOME FAMILY’.—For purposes of this subsection,
the term ‘unassisted very low-income family’ means
a very low-income family who resides in a unit that
is not assisted with project-based assistance under
section 8 of the United States Housing Act of 1937
and on whose behalf tenant-based assistance under
such section is not provided.
‘‘(h) DISCRETIONARY ACTIONS AND ASSISTANCE.—
In disposing of any multifamily housing project under this
section, the Secretary may take, in combination with the
actions required under subsections (e), (f), and (g), one
or more of the following actions:
‘‘(1) DISCOUNTED
SALES
PRICE.—In accord-
ance with the authority provided under the National
Housing Act, the Secretary may reduce the selling
price of the project. Such reduced sales price shall
be reasonably related to the intended use of the
property after sale, any rehabilitation requirements
for the project, the rents for units in the project that
can be supported by the market, the amount of rent-
al assistance available for the project under section
168
8 of the United States Housing Act of 1937, and
the occupancy profile of the project.
‘‘(2) SHORT-TERM LOANS.—The Secretary may
provide a short-term loan to facilitate the sale of a
multifamily housing project if—
‘‘(A) the loan has a term of not more than
5 years;
‘‘(B) the Secretary determines, based upon
documentation provided to the Secretary, that
the borrower has obtained a commitment of
permanent financing to replace the short-term
loan from a lender who meets standards estab-
lished by the Secretary; and
‘‘(C) the terms of the loan are consistent
with prevailing practices in the marketplace or
the provision of the loan results in no cost to
the Government, as defined in section 502 of
the Congressional Budget Act of 1974.
To the extent or in such amounts as are provided in
appropriation Acts, during each of fiscal years 1995
and 1996 the Secretary may enter into loan commit-
ments under this paragraph and make loans under
this paragraph with an aggregate principal amount
of $50,000,000. There are authorized to be appro-
priated such sums as may be necessary to cover any