Cranston-Gonzalez National Affordable Housing Act
PL 101-625 (S.566), enacted 11/28/1990

PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4079 
Public Law 101-625 
101st Congress 
An Act 
To authorize a new HOME Investment Partnerships program, a National Homeown-
ership Trust program, £md HOPE programs, to amend and extend certain laws 
Nov. 28, 1990 
relating to housing, community and neighborhood preservation, and related pro- 
fS 5661 
grEims, and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
Cranston-
CrOnZfllGZ 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
National 
(a) SHORT TITLE.—This Act may be cited as the "Cranston-Gon- Houshfg Act 
zalez National Affordable Housing Act". 
42 usc 12701 
(b) TABLE OF CONTENTS.— 
note. 
Section 1. Short title; table of contents. 
TITLE I—GENERAL PROVISIONS AND POLiaES 
Sec. 101. The national housing goal. 
Sec. 102. Objective of national housing policy. 
Sec. 103. Purposes of the Cranston-Gronzalez National Affordable Housing Act. 
Sec. 104. Definitions. 
Sec. 105. State and local housing strategies. 
Sec. 106. Certification. 
Sec. 107. Citizen participation. 
Sec. 108. Compliance. 
Sec. 109. Energy efficiency standards. 
Sec. 110. Capacity study. 
Sec. 111. Protection of State smd local authority. 
TITLE II—INVESTMENT IN AFFORDABLE HOUSING 
Sec. 201. Short title. 
Sec. 202. Findings. 
Sec. 203. Purposes. 
Sec. 204. Coordinated Federal support for housing strategies. 
Sec. 205. Authorization. 
Sec. 206. Notice. 
Subtitle A—HOME Investment Partnerships 
Sec. 211. Authority. 
Sec. 212. Eligible uses of investment. 
Sec. 213. Development of model programs. 
Sec. 214. Income targeting. 
Sec. 215. Qualification as affordable housing. 
Sec. 216. Participation by States and local governments. 
Sec. 217. Allocation of resources. 
Sec. 218. HOME investment trust funds. 
Sec. 219. Repayment of investment. 
Sec. 220. Matching requirements. 
Sec. 221. Private-public partnership. 
Sec. 222. Distribution of assistance. 
/ 
Sec. 223. Penalties for misuse of funds. 
Sec. 224. Limitation on jurisdictions under court order. 
Sec. 225. Tenant and participant protections. 
Sec. 226. Monitoring of compliance. 
Subtitle B—Community Housing Partnership 
Sec. 231. Set-Aside for community housing development organizations. 
49-139 O - 90 (625) 
104 STAT. 4080 
PUBLIC LAW 101-625—NOV. 28, 1990 
Sec. 232. Project-specific assistance to community housing development organiza-
tions. 
Sec. 233. Housing education and orgsmizational support. 
Sec. 234. Other requirements. 
Subtitle C—Other Support for State and Local Housing Strategies 
Sec. 241. Authority. 
Sec. 242. Priorities for capacity development. 
Sec. 243. Conditions of contracts. 
Sec. 244. Research in housing affordability. 
Sec. 245. REACH: Asset recycling information dissemination. 
Subtitle D—Specified Model Programs 
Sec. 251. (Jeneral authority. 
Sec. 252. Rental housing production. 
Sec. 253. Rental rehabilitation. 
Sec. 254. Rehabilitation loans. 
Sec. 255. Sweat equity model program. 
Sec. 256. Home repair services grants for older and disabled homeowners. 
Sec. 257. Low-income housing conservation and efficiency grant programs. 
Sec. 258. Second mortgage assist£mce for first-time homebuyers. 
Sec. 259. Rehabilitation of State and local government in rem properties. 
Subtitle E—Mortgage Credit Enhancement 
Sec. 271. Report on credit enhancement. 
Subtitle F—General Provisions 
Sec. 281. Equal opportunity. 
Sec. 282. Nondiscrimination. 
Sec. 283. Annual audits £md accountability. 
Sec. 284. Uniform recordkeeping smd reports to the Congress. 
Sec. 285. Citizen participation. 
Sec. 286. Labor. 
Sec. 287. Interstate agreements. 
Sec. 288. Environmental review. 
Sec. 289. Termination of existing housing programs. 
TITLE III—HOMEOWNERSHIP 
Subtitle A—National Homeownership Trust Demonstration 
Sec. 301. Short title. 
Sec. 302. National Homeownership Trust. 
Sec. 303. Assistemce for first-time homebuyers. 
Sec. 304. National Homeownership Trust Fund. 
Sec. 305. Definitions. 
Sec. 306. Regulations. 
Sec. 307. Report. 
Sec. 308. Authorization of appropriations. 
Sec. 309. Transition. 
Sec. 310. Termination. 
Subtitle B—FHA and Secondary Mortgage Market 
Sec. 321. Limitation on FHA insurance authority. 
Sec. 322. Appraisal services. 
Sec. 323. Increase in mortgage limit. 
Sec. 324. Mortgagor equity. 
Sec. 325. Mortgage insurance premiums. 
Sec. 326. Limitation on secondary residences. 
Sec. 327. Mortgage counseling for delinquent mortgagors. 
Sec. 328. Delegation of processing. 
Sec. 329. Disclosure regarding interest due upon mortgage prepayment. 
Sec. 330. Accountability of mortgage lenders. 
Sec. 331. Mutual Mortgage Insurance Fund distributions. 
Sec. 332. Actuarial soundness of Mutual Mortgage Insurance Fund. 
Sec. 333. Insurance of mortgages on property in Virgin Islands. 
Sec. 334. Home equity conversion mortgage insurance demonstration. 
Sec. 335. Information regarding early defaults on FHA-insured loans. 
Sec. 336. Auction of multifamily mortgages. 
Sec. 337. Disapproval of regulations regarding property disposition. 
Sec. 338. Report regarding foreclosed properties. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4081 
Sec. 339. Limitation on GNMA guarantees of mortg£ige-backed securities. 
Sec. 340. Increase in loan limits for property improvement loan insurance. 
Subtitle C—Effective Date 
Sec. 351. Effective date. 
TITLE IV—HOMEOWNERSfflP AND OPPORTUNITY FOR PEOPLE 
EVERYWHERE PROGRAMS 
Sec. 401. Short title. 
Subtitle A—HOPE for Public and Indian Housing Homeownership 
Sec. 411. HOPE for public and Indifui housing homeownership. 
Sec. 412. Amendment to section 18 regarding demolition £uid disposition of public 
housing. 
Sec. 413. Related amendments to section 8. 
Sec. 414. Related CLAP amendment. 
Sec. 415. Limitation on section 20 resident management financial assistance. 
Sec. 416. Extension of section 21 homeownership program and provision of techni-
cal and other assistance. 
Sec. 417. Amendment to section 5Gi). 
Sec. 418. Implementation. 
Sec. 419. Applicability to Indian public housing. 
Subtitle B—HOPE for Homeownership of Multifamily Units 
Sec. 421. Program authority. 
Sec. 422. Planning grants. 
Sec. 423. Implementation grants. 
Sec. 424. Homeownership program requirements. 
Sec. 425. Other program requirements. 
Sec. 426. Definitions. 
Sec. 427. Exemption. 
Sec. 428. Limitation on selection criteria. 
Sec. 429. Amendment to National Housing Act. 
Sec. 430. Implementation. 
Sec. 431. Annual report. 
Subtitle C—HOPE for Homeownership of Single Ftunily Homes 
Sec. 441. Program authority. 
Sec. 442. Planning grants. 
Sec. 443. Implementation gr£mts. 
Sec. 444. Homeownership program requirements. 
Sec. 445. Other program requirements. 
Sec. 446. Definitions. 
Sec. 447. Limitation on selection criteria. 
Sec. 448. Implementation. 
TITLE V—HOUSING ASSISTANCE 
Subtitle A—Public and Indian Housing 
Sec. 501. Preference rules. 
1 
Sec. 502. Reform of public housing management. 
Sec. 503. Eviction and termination procedures. 
Sec. 504. Lease requirements regarding termination of tenancy in public housing. 
Sec. 505. Notice to post office regarding eviction for criminal activity. 
Sec. 506. Public housing assistance for foster care children. 
Sec. 507. Public housing operating subsidies. 
Sec. 508. Cooling degree day adjustment under performance funding system. 
Sec. 509. Formida allocation of modernization funding. 
Sec. 510. Reduction of vacancies in public housing units. 
Sec. 511. Income eligibility for public housing. 
Sec. 512. Scattered-site public housing disposition proceeds. 
Sec. 513. Replacement housing. 
Sec. 514. Public housing resident management. 
Sec. 515. Public housing family investment centers. 
Sec. 516. Eligibility of Indian mutual help housing for comprehensive improvement 
assistance. 
Sec. 517. Public housing early childhood development grants. 
Sec. 518. Indian public housing early childhood development demonstration pro-
gram. 
104 STAT. 4082 
PUBLIC LAW 101-625—NOV. 28, 1990 
Sec. 519. Public housing rent waiver for police officers. 
Sec. 520. Public housing youth sports programs. 
Sec. 521. Public housing one-stop perinatal services demonstration. 
Sec. 522. Public housing mixed income new communities strategy demonstration. 
Sec. 523. Energy efRciency demonstration. 
Sec. 524. Study of public housing funding system. 
Sec. 525. Study of prospective payment system for public housing. 
Sec. 526. GAO study of edtematives in public housing development. 
Sec. 527. Applicability. 
Subtitle B—Low-Income Rental Assistance 
Sec. 541. Designation of certificate and voucher programs. 
Sec. 542. Drug-related rent a^jvistments. 
Sec. 543. Tenant rent contributions under tenant-based certificate program. 
Sec. 544. Opt-outs. 
Sec. 545. Preference rules. 
Sec. 546. Tencmt protections. 
Sec. 547. Revisions to project-based certificate program. 
Sec. 548. Section 8 assistance for PHA-owned units. 
Sec. 549. Definitions of participating jurisdiction cuid drug-related criminal activity. 
Sec. 550. Revisions to voucher program. 
Sec. 551. Portability of certificates and vouchers. 
Sec. 552. Renewal of expiring contracts. 
Sec. 553. Assistance to promote family unification. 
Sec. 554. Family self-sufficiency. 
Sec. 555. Income eligibility for tenfmcy in new construction imits. 
Sec. 556. Distribution of section 8 certificates. 
Sec. 557. Settlement agreement reg8u-ding certain section 8 assistance. 
Sec. 558. GAO study regarding fair market rent calculation. 
Sec. 559. Study of section 8 utilization rates. 
Sec. 560. Report on residual receipts accounts in section 8 and section 202 housing. 
Sec. 561. Feasibility study regarding Indicm tribe eligibility for voucher progreim. 
Subtitle C—General Provisions and Other Assistance Programs 
Sec. 571. Low-income housing authorization. 
Sec. 572. Low-income term. 
Sec. 573. Definitions under United States Housing Act of 1937. 
Sec. 574. Effect of foster care children in determining family composition and size. 
Sec. 575. Exemption from housing development grant construction commencement 
requirements. 
Sec. 576. Consultation regarding foster care children in development of housing as-
sistance plan. 
Sec. 577. Housing counseling. 
Sec. 578. Flexible subsidy program. 
Sec. 579. Streamlined property disposition requirements for unsubsidized multifam-
ily housing projects. 
Sec. 580. Multifamily housing disposition partnership. 
Sec. 581. Public £uid assisted housing drug elimination. 
Sec. 582. Study of private nonprofit initiatives. 
Sec. 583. Extension of capital assessment study. 
TITLE VI—PRESERVATION OF AFFORDABLE RENTAL HOUSING 
Subtitle A—Prepayment of Mortgages Insured Under National Housing Act 
Sec. 601. Prepayment of mortgages. 
Sec. 602. Related National Housing Act amendments. 
Sec. 603. Related United States Housing Act of 1937 amendments. 
Sec. 604. Transition provisions. 
Sec. 605. Effective date. 
Subtitle B—Other Preservation Provisions 
Sec. 611. Section 236 rental assistance. 
Sec. 612. Management and preservation of federally assisted housing. 
Sec. 613. Assistance to prevent prepayment under State mortgage programs. 
TITLE Vn—RURAL HOUSING 
Sec. 701. Program authorizations. 
Sec. 702. Effect of foster care children in determination of family composition and 
size. 
Sec. 703. Escrow accounts. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4083 
Sec. 704. Remote rursil areas. 
Sec. 705. Section 502 deferred mortgage demonstration. 
Sec. 706. Rural housing loan guarantees. 
Sec. 707. Foreclosure procedures. 
Sec. 708. Disposition of interests on Indian trust land. 
Sec. 709. Housing in underserved are£is. 
Sec. 710. Rur£d housing inventory. 
Sec. 711. Rights of appetd. 
Sec. 712. Section 515 losuis. 
Sec. 713. Set-aside of rurtd rental housing funds. 
Sec. 714. Housing for rural homeless and migrant farmworkers. 
Sec. 715. Rural area classification. 
Sec. 716. Assistance to reduce rent overburden. 
Sec. 717. Housing preservation grants. 
Sec. 718. Reciprocity in approval of housing subdivisions Emiong Federal agencies. 
Sec. 719. Rural housing technical amendments. 
TITLE Vin—HOUSING FOR PERSONS WITH SPECIAL NEEDS 
Subtitle A—Supportive Housing for the Elderly 
Sec. 801. Supportive housing for the elderly. 
Sec. 802. Revised congregate housing services program. 
Sec. 803. HOPE for elderly independence. 
Sec. 804. Use of Resolution Trust Corporation eligible properties for section 202 
housing. 
Sec. 805. Centralized applications for section 202 housing. 
Sec. 806. Elder cottage housing units. 
Sec. 807. Notice of rejection. 
Sec. 808. Service coordinators as eligible project cost in section 202 projects. 
Subtitle B—Supportive Housing for Persons With Disabilities 
Sec. 811. Supportive housing for persons with disabilities. 
SUBTITLE C—SUPPORTIVE HOUSING FOE THE HOMELESS 
Part 1—Revised McKinney Act 
Sec. 821. Amendment to McKinney Act. 
Sec. 822, Definition of "homeless person". 
Sec. 823. Transitional rule. 
Sec. 824. Conforming amendment. 
Sec. 825. Strategy to eliminate unfit tremsient facilities. 
Part 2—Amendments to Current Progreim 
Sec. 831. Comprehensive homeless assistance plan. 
Sec. 832. Emergency shelter grants program. 
Sec. 833. Supportive housing demonstration program. 
Sec. 834. Supplemental assistance for facilities to assist the homeless. 
Sec. 835. Section 8 assistance for single room occupancy dwellings. 
Sec. 836. Housing eiffordability strategy requirement. 
Sec. 837. Shelter plus care. 
Part 3—Effective Date 
' 
Sec. 841. Effective date. 
SUBTITLE D—HOUSING OPPORTUNITIES FOR PERSONS WFTH AIDS 
Sec. 851. Short title. 
Sec. 852. Purpose. 
Sec. 853. Definitions. 
Sec. 854. General authority. 
Sec. 855. Eligible activities. 
Sec. 856. Responsibilities of grantees. 
Sec. 857. Grants for AIDS housing information and coordination services. 
Sec. 858. AIDS short-term supported housing and services. 
Sec. 859. Short-term rental assistance. 
Sec. 860. Single room occupancy dwellings. 
Sec. 861. Grants for community residences and services. 
Sec. 862. Report. 
Sec. 863. Authorization of appropriations. 
104 STAT. 4084 
PUBLIC LAW 101-625—NOV. 28, 1990 
TITLE IX—COMMUNITY DEVELOPMENT AND MISCELLANEOUS PROGRAMS 
Subtitle A—Community and Neighborhood Development and Preservation 
Sec. 901. Community development authorizations. 
Sec. 902. Targeting community development block grant assistance. 
Sec. 903. Community development city and county classifications. 
Sec. 904. Allocation formula in cases of annexation. 
Sec. 905. Housing affordability strategy requirement. 
Sec. 906. Protection of individuals engaging in nonviolent civil rights demonstra-
tions. 
Sec. 907. CDBG eligible activities. 
Sec. 908. Public services. 
Sec. 909. Authority to provide lump-sum payments to revolving loan funds. 
Sec. 910. Community development loan guarantees. 
Sec. 911. Hawaiian home lands. 
Sec. 912. Prohibition of discrimination on basis of religion under CDBG progreim. 
Sec. 913. Technical corrections regarding CDBG for Indian tribes. 
Sec. 914. Urban homesteading. 
Sec. 915. Neighborhood development demonstration. 
Sec. 916. CDBG assistance for United States-Mexico border region. 
Sec. 917. Neighborhood reinvestment corporation. 
Sec. 918. Use of urban renewal land disposition proceeds smd certain other commu-
nity development and public facility funds. 
Sec. 919. Study regarding availability of housing proximate to places of employ-
ment. 
Sec. 920. Allocation of funds under title I of the Housing and Community Develop-
ment Act of 1974. 
Sec. 921. Study on turning drug zones into opportunity zones. 
Sec. 922. Community development plans. 
Subtitle B—Disaster Relief 
Sec. 931. Section 8 certificates and vouchers. 
Sec. 932. Moderate rehabilitation. 
Sec. 933. Community development. 
Sec. 934. Rural housing. 
Subtitle C—Regulatory Programs 
Sec. 941. Mortgage servicing transfer disclosure. 
Sec. 942. Mortgage escrow accounts. 
Sec. 943. National Commission on Manufactured Housing. 
Sec. 944. Energy assessment report. 
Sec. 945. 5-year energy efficiency plan. 
Sec. 946. Uniform mortgage financing plan for energy efficiency. 
Sec. 947. Report on seismic safety property standarc^. 
Subtitle D—Miscellaneous Programs 
Sec. 951. HUD research and development. 
Sec. 952. National Institute of Building Sciences. 
Sec. 953. Fair housing initiatives program. 
Sec. 954. Collection and maintenance of data regarding programs under HUD. 
^ 
Sec. 955. Exemption from Davis-Bacon Act requirements of volunteers under hous-
ing programs. 
Sec. 956. Eligibility under first-time homebuyer programs. 
Sec. 957. Maximum annual limitation on rent increases resulting from employ-
ment. 
Sec. 958. Preferences for Native Hawfdians on Haweiiian homelands under HUD 
programs. 
Sec. 959. Waiver of matching funds requirements in Indian housing programs. 
Sec. 960. Study of pension fund financing of housing. 
Sec. 961. Energy efficiency demonstration. 
TITLE X—EXPEDITED FUNDS AVAILABILITY 
Sec. 1001. Amendments to Expedited Funds Availability Act. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4085 
TITLE I—GENERAL PROVISIONS AND 
POLICIES 
SEC. 101. THE NATIONAL HOUSING GOAL. 
42 USC 12701. 
The Congress affirms the national goal that every American 
family be able to afford a decent home in a suitable environment. 
SEC. 102. OBJECTIVE OF NATIONAL HOUSING POLICY. 
42 USC 12702. 
The objective of national housing policy shall be to reaffirm the 
long-established national commitment to decent, safe, and sanitary 
housing for every American by strengthening a nationwide partner-
ship of public and private institutions able— 
(1) to ensure that every resident of the United States has 
access to decent shelter or assistance in avoiding homelessness; 
(2) to increase the Nation's supply of decent housing that is 
Eifibrdable to low-income and moderate-income families and 
accessible to job opportunities; 
(3) to improve housing opportunities for all residents of the 
United States, particularly members of disadvantaged minori-
ties, on a nondiscriminatory basis; 
(4) to help make neighborhoods safe and livable; 
(5) to expand opportunities for homeownership; 
(6) to provide every American community with a reliable, 
readily available supply of mortgage finance at the lowest 
possible interest rates; and 
(7) 
to 
encourage 
tenant 
empowerment 
and 
reduce 
generational poverty in federally assisted and public housing by 
improving the means by which self-sufficiency may be achieved. 
SEC. 103. PURPOSES OF THE CRANSTON-GONZALEZ NATIONAL AFFORD- 
42 USC 12703. 
ABLE HOUSING ACT. 
The purposes of this Act are— 
(1) to help families not owning a home to save for a down 
payment for the purchase of a home; 
(2) to retain wherever feasible as housing affordable to low-
income families those dwelling units produced for such purpose 
with Federal assistance; 
(3) to extend and strengthen partnerships among all levels of 
government and the private sector, including for-profit and 
nonprofit organizations, in the production and operation of 
housing affordable to low-income and moderate-income families; 
(4) to expand and improve Federal rental assistance for very 
low-income families; and 
(5) to increase the supply of supportive housing, which com-
bines structural features and services needed to enable persons 
with special needs to live with dignity and independence. 
SEC. 104. DEFINITIONS. 
42 USC 12704. 
As used in this title and in title X
L 
(1) The term "unit of general local government" means a city, 
town, township, county, parish, village, or other general purpose 
political subdivision of a State; Guam, the Northern Mariana 
Islands, the Virgin Islands, American Samoa, the Federated 
States of Micronesia and Palau, the Marshall Islands, or a 
general purpose political subdivision thereof; a consortium of 
such political subdivisions recognized by the Secretary in 
104 STAT. 4086 
PUBLIC LAW 101-625—NOV. 28, 1990 
accordance with section 216(2) of this Act; and any agency or 
instrumentality thereof that is established pursuant to legisla-
tion and designated by the chief executive to act on behalf of the 
jurisdiction with regard to provisions of this Act. 
(2) The term "State" means any State of the United States, 
the District of Columbia, and the Commonwealth of Puerto 
Rico. 
(3) The term "jurisdiction" means a State or unit of general 
local government. 
(4) The term "participating jurisdiction" means any State or 
unit of general local government that has been so designated in 
accordance with section 216 of this Act. 
(5) The term "nonprofit organization" means any private, 
nonprofit organization (including a State or locally chartered, 
nonprofit organization) that— 
(A) is organized under State or local laws, 
(B) has no part of its net earnings inuring to the benefit of 
any member, founder, contributor, or individual, 
(C) complies with standards of financial accountability 
acceptable to the Secretary, and 
(D) has among its purposes significant activities related to 
the provision of decent housing that is affordable to low-
income and moderate-income persons. 
(6) The term "community housing development organization" 
means a nonprofit organization as defined in paragraph (5), 
that— 
(A) has among its purposes the provision of decent hous-
ing that is affordable to low-income and moderate-income 
persons; 
(B) maintains, through significant representation on the 
organization's governing board and otherwise, accountabil-
ity to low-income community residents and, to the extent 
practicable, low-income beneficiaries with regard to deci-
sions on the design, siting, development, and management 
of affordable housing; 
(C) has a demonstrated capacity for carrsdng out activi-
ties assisted under this Act; and 
(D) has a history of serving the local community or 
communities within which housing to be assisted under this 
Act is to be located. 
(7) The term "government-sponsored mortgage finance cor-
porations" means the Federal National Mortgage Association, 
the Federal Home Loan Mortgage Corporation, and the Federal 
Agricultural Mortgage Corporation. 
(8) The term "housing" includes manufactured housing and 
manufactured housing lots. 
(9) The term "very low-income families" means low-income 
families whose incomes do not exceed 50 percent of the median 
family income for the area, as determined by the Secretary with 
adjustments for smaller and larger families, except that the 
Secretary may establish income ceilings higher or lower than 50 
percent of the median for the area on the basis of the Sec-
retary's findings that such variations are necessary because of 
prevailing levels of construction costs or fair market rents, or 
unusually high or low family incomes. 
(10) The term "low-income families" means families whose 
incomes do not exceed 80 percent of the median income for the 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4087 
area, as determined by the Secretary with adjustments for 
smaller and larger families, except that the Secretary may 
establish income ceilings higher or lower than 80 percent of the 
median for the area on the basis of the Secretary's findings that 
such variations are necessary because of prevailing levels of 
construction costs or fair market rents, or unusually high or low 
family incomes. 
(11) The term "families" has the same meaning given that 
term by section 3 of the United States Housing Act of 1937. 
(12) The term "security" has the same meaning as in section 2 
of the Securities Act of 1933. 
(13) The term "displaced homemaker" means an individual 
who— 
(A) is an adult; 
(B) has not worked full-time full-year in the labor force 
for a number of years but has, during such years, worked 
primarily without remuneration to care for the home and 
family; and 
(C) is unemployed or underemployed and is experiencing 
difficulty in obtaining or upgrading employment. 
(14) The term "first-time homebuyer" means an individual 
and his or her spouse who have not owned a home during the 3-
year period prior to purchase of a home with assistance under 
title II, except that— 
(A) any individual who is a displaced homemaker may 
not be excluded from consideration as a first-time home-
buyer under this paragraph on the basis that the individ-
ual, while a homemaker, owned a home with his or her 
spouse or resided in a home owned by the spouse; and 
(B) any individual who is a single parent may not be 
excluded from consideration as a first-time homebuyer 
under this paragraph on the basis that the individual, while 
married, owned a home with his or her spouse or resided in 
a home owned by the spouse. 
(15) The term "single parent" means an individual who— 
(A) is unmarried or legally separated from a spouse; and 
(BXi) has 1 or more minor children for whom the individ-
ual has custody or joint custody; or 
(ii) is pregnant. 
(16) The term "Secretary" means the Secretary of Housing 
and Urban Development, unless otherwise specified in this Act. 
(17) The term "substantial rehabilitation" means the re-
habilitation of residential property at an average cost in excess 
of $25,000 per dwelling unit. 
(18) The term "public housing agency" has the meaning given 
the term in section 3(b) of the United Stetes Housing Act of 1937 
(42 U.S.C. 1437a(b)). 
(19) The term "metropolitan city" has the meaning given the 
term in section 102(aX4) of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5302(aX4)). 
(20) The term "urban county" has the meaning given the 
term in section 102(aX6) of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5302(aX6)). 
(21) The term "certification" means a written assertion, based 
on supporting evidence, which shall be kept available for inspec-
tion by the Secretary, the Inspector General and the public, 
which assertion shall be deemed to be accurate for purposes of 
104 STAT. 4088 
PUBLIC LAW 101-625—NOV. 28, 1990 
this Act, unless the Secretary determines otherwise after 
inspecting the evidence and providing due notice and oppor-
tunity for comment. 
(23) The term "to demonstrate to the Secretary" means to 
submit to the Secretary a written assertion together with 
supporting evidence that, in the determination of the Secretary, 
supports the accuracy of the assertion. 
42 use 12705. 
SEC. 105. STATE AND LOCAL HOUSING STRATEGIES. 
(a) IN GENERAL.—The Secretary shall provide assistance directly 
to a jurisdiction only i
f
— 
(1) the jurisdiction submits to the Secretary a comprehensive 
housing affordability strategy (hereafter in this section referred 
to as the "housing strategy"); 
(2) the jurisdiction submits annual updates of the housing 
strategy; and 
(3) the housing strategy, and any annual update of such 
strategy, is approved by the Secretary. 
The Secretary shall establish such dates and manner for the submis-
sion and approval of housing strategies under this section that the 
Secretary determines will facilitate orderly program management 
by jurisdictions and provide for timely investment or other use of 
funds made available under title II of this Act and other programs 
requiring submission of a housing strategy. If the Secretary finds 
there is good cause, the Secretary may provide reasonable exten-
sions of any deadlines for submission of a jurisdiction's housing 
strategy. 
(b) CONTENTS.—A housing strategy submitted under this section 
shall be in a form that the Secretary determines to be appropriate 
for the assistance the jurisdiction may be provided and shall— 
(1) describe the jurisdiction's estimated housing needs pro-
jected for the ensuing 5-year period, and the jurisdiction's need 
for assistance for very low-income, low-income, and moderate-
income families, specifying such needs for different types of 
tenure and for different categories of residents, such as very 
low-income, low-income, and moderate-income families, the 
elderly, 
single 
persons, 
large 
families, 
residents 
of 
nonmetropolitan areas, families who are participating in an 
organized program to achieve economic independence and self-
sufficiency, persons with acquired immunodeficiency syndrome, 
and other categories of persons residing in or expected to reside 
in the jurisdiction that the Secretary determines to be appro-
priate; 
Homeless. 
(2) describe the nature and extent of homelessness within the 
jurisdiction, providing an estimate of the special needs of var-
ious categories of persons who are homeless or threatened with 
homelessness, and a description of the jurisdiction's strategy for 
(A) helping low-income families avoid becoming homeless; (B) 
addressing the emergency shelter and transitional housing 
needs of homeless persons (including a brief inventory of facili-
ties and services that meet such needs within that jurisdiction); 
and (C) helping homeless persons make the transition to perma-
nent housing and independent living; 
(3) describe the significant characteristics of the jurisdiction's 
housing market, indicating how those characteristics will influ-
ence the use of funds made available for rental assistance. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4089 
production of new units, rehabilitation of old units, or acquisi-
tion of existing units; 
(4) explain whether the cost of housing or the incentives to 
develop, maintain, or improve affordable housing in the juris-
diction are affected by public policies, particularly by policies of 
the jurisdiction, including tax policies affecting land and other 
property, land use controls, zoning ordinances, building codes, 
fees and charges, growth limits, and policies that affect the 
return on residential investment, and describe the jurisdiction's 
strategy to remove or ameliorate negative effects, if any, of such 
policies; 
(5) explain the institutional structure, including private in-
dustry, nonprofit organizations, and public institutions, through 
which the jurisdiction will carry out its housing strategy, assess-
ing the strengths and gaps in that delivery system and describ-
ing what the jurisdiction will do to overcome those gaps; 
(6) indicate resources from private and non-Federal public 
sources that are reasonably expected to be made available to 
carry out the purposes of this Act, explaining how funds made 
available will leverage those additional resources and identify-
ing, where the jurisdiction deems it appropriate, publicly owned 
land or property located within the jurisdiction that may be 
utilized to carry out the purposes of this Act; 
(7) set forth the jurisdiction's plan for investment or other use 
of housing funds made available under title II of this Act, the 
United States Housing Act of 1937, the Housing and Commu-
nity Development Act of 1974, and the Stewart B. McKinney 
Homeless Assistance Act, during the ensuing year or such 
longer period as the Secretary determines to be appropriate, 
indicating the general priorities for allocating investment geo-
graphically within the jurisdiction and among different activi-
ties and housing needs; 
(8) describe the means of cooperation and coordination among 
the State and any units of general local government in the 
development, submission, and implementation of their housing 
strategies; 
(9) in the case of a unit of local government, describe the 
number of public housing units in the jurisdiction, the physical 
condition of such units, the restoration and revitalization needs 
of public housing projects within the jurisdiction, the public 
housing agency's strategy for improving the msmagement and 
operation of such public housing, and the public housing 
agency's strategy for improving the living environment of low-
and very-low-income families residing in public housing; 
(10) in the case of a State, describe the strategy to coordinate 
the Low-Income Tax Credit with development of housing, 
including public housing, that is affordable to very low-income 
and low-income families; 
(11) describe the jurisdiction's activities to encourage public 
housing residents to become more involved in management and 
participate in homeownership; 
(12) describe the standards and procedures according to which 
the jurisdiction will monitor activities authorized under this Act 
and ensure long-term compliance with the provisions of this 
Act; 
(13) include a certification that the jurisdiction will affirma-
tively further fair housing; 
104 STAT. 4090 
PUBLIC LAW 101-625—NOV. 28, 1990 
Infants and 
children. 
Aged. 
Handicapped. 
Homeless. 
(14) include a certification that the jurisdiction is in compli-
ance with a residential antidisplacement and relocation assist-
ance plan under section 104(d) of the Housing and Community 
Development Act of 1974 (to the extent that such a plan applies 
to the jurisdiction); and 
(15) include the number of families to whom the jurisdiction 
will provide affordable housing as defined in section 215 using 
funds made available. 
The Secretary may provide for the submission of abbreviated hous-
ing strategies by jurisdictions that are not otherwise expected to be 
participating jurisdictions under title II of this Act. Such an abbre-
viated housing strategy shall be appropriate to the types and 
amounts of assistance the jurisdiction is to receive as determined by 
the Secretary. 
(c) APPROVAL.— 
(1) IN GENERAL.—The Secretary shall review the housing 
strategy upon receipt. Not later than 60 days after receipt by 
the Secretary, the housing strategy shall be approved unless the 
Secretary determines before that date that (A) the housing 
strategy is inconsistent with the purposes of this Act, or (B) the 
information described in subsection (b) has not been provided in 
a substantially complete manner. For Ihe purpose of the preced-
ing sentence, the adoption or continuation of a public policy 
identified pursuant to subsection (bX4) shall not be a basis for 
the Secretary's disapproval of a housing strategy. During the 
18-month period following enactment of this Act, the Sec-
retary may extend the review period to not longer than 90 
days. 
(2) ACTIONS IN CASE OF DISAPPROVAL.—If the Secretary dis-
approves the housing strategy, the Secretary shall immediately 
notify the jurisdiction of such disapproval. Not later than 15 
days after the Secretary's disapproval, the Secretary shall 
inform the jurisdiction in writing of (A) the reasons for dis-
approval, and (B) actions that the jurisdiction could take to 
meet the criteria for approval. If the Secretary fails to inform 
the jurisdiction of the reasons for disapproval within such 15-
day period, the housing strategy shall be deemed to have been 
approved. 
(3) AMENDMENTS AND RESUBMISSION.—The Secretary shall, for 
a period of not less than 45 days following the date of first 
disapproval, permit amendments to, or the resubmission of, any 
housing strategy that is disapproved. The Secretary shall 
approve or disapprove a housing strategy not less than 30 
days after receipt of such amendments or resubmission. 
(d) COORDINATION OF STATE AND LOCAL HOUSING STRATEGIES.—The 
Secretary may establish such requirements as the Secretary deems 
appropriate to encourage coordination between and among the hous-
ing strategies of a State and any participating jurisdictions within 
the State, except that a unit of general local government shall not 
be required to have elements of its housing strategy approved by the 
State. 
(e) (DoNSULTATioN WiTH SociAL SERVICE AGENCIES.—When prepar-
ing a housing strategy for submission under this section, a jurisdic-
tion shall make reasonable efforts to confer with appropriate social 
service agencies regarding the housing needs of children, elderly 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4091 
persons, persons with disabilities, homeless persons, and other per-
sons served by such agencies. 
(f) BARRIER REMOVAL.—Not later than 4 months after completion Reports. 
of the final report of the Secretary's Advisory Commission on Regu-
latory Barriers to Affordable Housing, the Secretary shall submit to 
the Congress a written report outlining the Secretary's recom-
mendations for legislative and administrative actions to facilitate 
the removal or modification of excessive, duplicative, or unnecessary 
regulations or other requirements of Federal, State, or local govern-
ments that (1) inflate the costs of or otherwise inhibit the construc-
tion, rehabilitation, or management of housing, particularly hous-
ing that otherwise could be affordable 
to low-income 
and 
moderate-income families, or (2) contribute to economic or racial 
discrimination. 
SEC. 106. CERTIFICATION. 
42 use 12706. 
The Secretary shall, by regulation or otherwise, as deemed by the Regulations. 
Secretary to be appropriate, require any application for housing 
assistance under title II of this Act, assistance under the Housing 
and Community Development Act of 1974, or assistance under the 
Stewart B. McKinney Homeless Assistance Act, to contain or be 
accompanied by a certification by an appropriate State or local 
public official that the proposed housing activities are consistent 
with the housing strategy of the jurisdiction to be served. 
SEC. 107. CITIZEN PARTICIPATION. 
42 USC 12707. 
(a) IN GENERAL.—Before submitting a housing strategy under this 
section, a jurisdiction shall— 
(1) make available to its citizens, public agencies, and other 
interested parties information concerning the amount of assist-
ance the jurisdiction expects to receive and the range of invest-
ment or other uses of such assistance that the jurisdiction may 
undertake; 
(2) publish a proposed housing strategy in a manner that, in 
the determination of the Secretary, affords affected citizens, 
public agencies, and other interested parties a reasonable oppor-
tunity to examine its content and to submit comments on the 
proposed housing strategy; 
(3) hold one or more public hearings to obtain the views of 
citizens, public agencies, and other interested parties on the 
housing needs of the jurisdiction; and 
(4) provide citizens, public agencies, and other interested 
parties with reasonable access to records regarding any uses of 
any assistance the jurisdiction may have received during the 
preceding 5 years. 
Ot)) NOTICE AND COMMENT.—Before submitting any performance 
report or substantial amendment to a housing strategy under this 
section, a participating jurisdiction shall provide citizens with 
reasonable notice of, and opportunity to comment on, such perform-
ance report or substantial amendment prior to its submission. 
(c) CONSIDERATION OF COMMENTS.—A participating jurisdiction 
shall consider any comments or views of citizens in preparing a final 
housing strategy, amendment to a housing strategy or performance 
report for submission. A summary of such comments or views shall 
be attached when a housing strategy, amendment to a housing 
strategy or performance report is submitted. The submitted housing 
39-194 O - 91 - 25 : QL 3 Part 5 
104 STAT. 4092 
PUBLIC LAW 101-625—NOV. 28, 1990 
strategy, amendment, or report shall be made available to the 
public. 
(d) REGULATIONS.—The Secretary shall by regulation establish 
procedures appropriate and practicable for providing a fair hearing 
and timely resolution of citizen complaints related to housing strate-
gies or performance reports. 
42 use 12708. 
SEC. 108. COMPLIANCE. 
(a) PERFORMANCE REPORTS.— 
(1) IN GENERAL.—Each participating jurisdiction shall an-
nually review and report, in a form acceptable to the Secretary, 
on the progress it has made in carrying out its housing strategy, 
which report shall include an evaluation of the jurisdiction s 
progress in meeting its goal established in section 105(bX15) of 
this Act, and information on the number and types of house-
holds served, including the number of very low-income, low-
^ 
income, and moderate-income persons served and the racial and 
ethnic status of persons served that will be assisted with funds 
made available. 
(2) SUBMISSION.—The Secretary shall (A) establish dates for 
submission of reports under this subsection, and (B) review such 
reports and make such recommendations as the Secretary 
deems appropriate to carry out the purposes of this Act. 
(3) FAILURE TO REPORT.—If a jurisdiction fails to submit a 
report satisfactory to the Secretary in a timely manner, assist-
ance to the jurisdiction under title II of this Act or the other 
programs referred to in section 106 may be— 
(A) suspended until a report satisfactory to the Secretary 
is submitted; or 
(B) withdrawn and reallocated if the Secretary finds, 
after notice and opportunity for a hearing, that the jurisdic-
tion will not submit a satisfactory report. 
(b) PERFORMANCE REVIEW BY SECRETARY.— 
(1) IN GENERAL.—The Secretary shall ensure that activities of 
each jurisdiction required to submit a housing strategy under 
section 105 are reviewed not less frequently than annually. 
Such review shall include, insofar as practicable, on-site visits 
by employees of the Department of Housing and Urban Devel-
opment and shall include an assessment of the jurisdiction's— 
(A) management of funds made available under programs 
administered by the Secretary; 
(B) compliance with its housing strategy; 
(C) accuracy in the preparation of performance reports 
under subsection (a); and 
(D) efforts to ensure that housing assisted under pro-
grams administered by the Secretary are in compliance 
with contractual agreements and the requirements of law. 
(2) REPORT BY THE SECRETARY.—The Secretary shall report on 
the performance review in writing. The Secretary shall give the 
jurisdiction not less than 30 days to review and comment on the 
report. After taking into consideration the comments of the 
jurisdiction, the Secretary may revise the report and shall make 
the jurisdiction's comments and the report, with any revisions, 
readily available to the public within 30 days after receipt of the 
jurisdiction's comments. 
(c) REVIEW BY COURTS.—The adequacy of information submitted 
under section 105(bX4) shall not be reviewable by any Federal, State, 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4093 
or other court. Review of a housing strategy by £iny Federal, State, 
or other court shall be limited to determining whether the process of 
development and the content of the strategy are in substantial 
compliance with the requirements of this Act. During the pendency 
of any action challenging the adequacy of a housing strategy or the 
action of the Secretary in approving a strategy, the court shall not 
have the authority to enjoin activities taken by the jurisdiction to 
implement an approved housing strategy. Any housing assisted 
during the pendency of such action shall not be subject to any order 
of the court resulting from such action. 
SEC. 109. ENERGY EFFICIENCY STANDARDS. 
42 USC 12709. 
The Secretary of Housing and Urban Development shall, not later 
than one year after the date of enactment of this Act, promulgate 
energy efficiency standards for new construction of public and 
assisted housing and single-family and multifamily residential hous-
ing (other than manufactured homes) subject to mortgages under 
the National Housing Act. Such standards shall meet or exceed the 
provisions of the most recent edition of the Model Energy Code of 
the Council of American Building Officials and shall be cost-effec-
tive with respect to construction and operating costs. In developing 
such standards the Secretary shall consult with an advisory task 
force composed of homebuilders, national, State, and local housing 
agencies (including public housing agencies), energy agencies and 
building code organizations and agencies, energy efficiency organiza-
tions, utility organizations, low-income housing organizations, and 
other parties designated by the Secretary. 
SEC. 110. CAPACITY STUDY. 
(a) IN GENERAL.—The Secretary shall ensure that the Department 
of Housing and Urban Development has adequate capacity and 
resources, including staff and training programs, to carry out its 
mission and responsibilities, and to implement the provisions of this 
Act, including the ability of the Department to carry out the multi-
family mortgage insurance program. 
(b) REPORT.—Not later than 60 days after the date of enactment of 
this Act, and annually thereafter, the Secretary shall prepare and 
submit to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives a study detailing the Depart-
ment's plan to maintain such capacity, together with any rec-
ommendations for legislative and administrative action as the 
Secretary determines to be appropriate. 
SEC. 111. PROTECTION OF STATE AND LOCAL AUTHORITY. 
42 USC 12711. 
Notwithstanding any other provision of this title or title II, the 
Secretary shall not establish any criteria for allocating or denjdng 
funds made available under programs administered by the Sec-
retary based on the adoption, continuation, or discontinuation by a 
jurisdiction of any public policy, regulation, or law that is (1) 
adopted, continued, or discontinued in accordance with the jurisdic-
tion's duly established authority, and (2) not in violation of any 
Federal law. 
Business and 
industry. 
Inter-
governmental 
relations. 
42 USC 12710. 
104 STAT. 4094 
PUBLIC LAW 101-625—NOV. 28, 1990 
HOME 
Investment 
Partnerships 
Act. 
42 use 12701 
note. 
42 use 12721. 
TITLE II—INVESTMENT IN AFFORDABLE 
HOUSING 
SEC. 201. SHORT TITLE. 
This title may be cited as the "HOME Investment Partnerships 
Act". 
SEC. 202. FINDINGS. 
The Congress finds that— 
(1) the Nation has not made adequate progress toward the 
goal of national housing policy, as set out in the Housing Act of 
1949 and reaffirmed in the Housing and Urban Development 
Act of 1968, which would provide decent, safe, sanitary, and 
affordable living environments for all Americans; 
(2) the supply of affordable rental housing is diminishing; 
(3) the Tax Reform Act of 1986 removed major tax incentives 
for the production of affordable rental housing; 
(4) the living environments of an increasing number of Ameri-
cans have deteriorated over the past several years as a result of 
reductions in Federal assistance to low-income and moderate-
income families; 
(5) many Americans face the possibility of homelessness 
unless Federal, State, and local governments work together 
with the private sector to develop and rehabilitate the housing 
stock of the Nation to provide decent, safe, sanitary, and afford-
able housing for very low-income and low-income families; 
(6) reliable Federal leadership is needed to achieve an ade-
quate supply of affordable housing for all Americans; 
(7) to acMeve the goal of national housing policy, there is a 
need to strengthen nationwide a cost-effective community-based 
housing partnership designed to— 
(A) expand the supply of rental housing that is affordable 
to very low-income and low-income families, 
(B) improve homeownership opportunities for low-income 
families, 
(C) carry out comprehensive housing strategies tailored to 
local housing market conditions, and 
(D) protect the Federal, State, and local investment in 
low-income housing to ensure affordability of the housing 
for the remaining useful life of the property; 
(8) direct assistance to expand the supply of affordable rental 
housing should be provided in a way that is more cost-effective 
and targeted than tax incentives; 
(9) much of the Nation's housing system works very well and 
provides a strong base on which national housing policy should 
build; 
(10) an increasing number of States and loceil governments 
have been successful in producing cost-effective low-income and 
moderate-income housing by working in partnership with the 
private sector, including nonprofit community development cor-
porations, community action agencies, neighborhooid housing 
services corporations, trade unions, groups sponsored by reli-
gious organizations, limited equity cooperatives, and other 
tenant organizations; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4095 
(11) during the 1980's, nonprofit community housing develop-
ment organizations, despite severe obstacles caused by inad-
equate funding, have played an increasingly important role in 
the production and rehabilitation of affordable housing in 
communities across the Nation; 
(12) additional financial resources and technical skills must 
be made available in loceil communities if the Nation is to 
mobilize the capacity of the private sector, including nonprofit 
community housing development organizations, to provide a 
more adequate supply of decent, safe, and sanitary housing that 
is affordable to very low-income, low-income, and moderate-
income families and meets the need for large family units and 
other additional units that are available to very low-income 
families receiving rental assistance payments from Federal, 
State, and local governments; and 
(13) the long-term success of efforts to provide more affordable 
housing depends upon tenants and homeowners being fiscally 
responsible and able managers. 
SEC. 203. PURPOSES. 
42 USC 12722. 
The purposes of this title are— 
(1) to expand the supply of decent, safe, sanitary, and afford-
able housing, with primary attention to rental housing, for very 
low-income and low-income Americans; 
(2) to mobilize and strengthen the abilities of States and units 
of general local government throughout the United States to 
design and implement strategies for achieving an adequate 
supply of decent, safe, sanitary, and affordable housing; 
(3) to provide participating jurisdictions, on a coordinated 
basis, with the various forms of Federal housing assistance, 
including capital investment, mortgage insurance, rental assist-
ance, and other Federal assistance, needed— 
(A) to expand the supply of decent, safe, sanitary, and 
affordable housing; 
(B) to make new construction, rehabilitation, substantial 
rehabilitation, and acquisition of such housing feasible; and 
(C) to promote the development of partnerships among 
the Federal Government, States and units of general local 
government, private industry, and nonprofit organizations 
able to utilize effectively all available resources to provide 
more of such housing; 
(4) to make housing more affordable for very low-income and 
low-income families through the use of tenant-based rental 
assistance; 
(5) to develop and refine, on an ongoing basis, a selection of 
model programs incorporating the most effective methods for 
providing decent, safe, sanitary, and affordable housing, and 
accelerate the application of such methods where appropriate 
throughout the United States to achieve the prudent and effi-
cient use of funds made available under this title; 
(6) to expand the capacity of nonprofit community housing 
development organizations to develop and manage decent, safe, 
sanitary, and affordable housing; 
(7) to ensure that Federal investment produces housing stock 
that is available and affordable to low-income families for the 
property's remaining useful life, is appropriate to the neighbor-
104 STAT. 4096 
PUBLIC LAW 101-625—NOV. 28, 1990 
hood surroundings, and, wherever appropriate, is mixed income 
housing; 
(8) to increase the investment of private capital and the use of 
private sector resources in the provision of decent, safe, sani-
tary, and affordable housing; 
(9) to allocate Federal funds for investment in affordable 
housing among participating jurisdictions by formula alloca-
tion; 
(10) to leverage those funds insofar as practicable with State 
and local matching contributions and private investment; 
(11) to establish for each participating jurisdiction a HOME 
Investment Trust Fund with a line of credit for investment in 
affordable housing, with repa3nnents back to its HOME Invest-
ment Trust Fund being made available for reinvestment by the 
jurisdiction; 
(12) to provide credit enhancement for affordable housing by 
utilizing the capacities of existing agencies and mortgage fi-
nance institutions when most efficient and supplementing their 
activities when appropriate; and 
(13) to assist very low-income and low-income families to 
obtsiin the skills and knowledge necessary to become responsible 
homeowners and tenants. 
42 use 12723. 
SEC. 204. COORDINATED FEDERAL SUPPORT FOR HOUSING STRATEGIES. 
The Secretary shall make assistance under this title available to 
participating jurisdictions, through the Office of the Assistant Sec-
retary for Housing-FHA Commissioner of the Department of Hous-
ing and Urban Development, to the maximum extent practicable, in 
coordination with mortgage insurance, rental assistance, and other 
housing assistance appropriate to the efficient and timely comple-
tion of activities under this title. 
42 use 12724. 
SEC. 205. AUTHORIZATION. 
There are authorized to be appropriated to carry out this title 
$1,000,000,000 for fiscal year 1991, and $2,086,000,000 for fiscal year 
1992, of which— 
(1) not more than $14,000,000 for fiscal year 1991, and 
$14,000,000 for fiscal year 1992, shall be for community housing 
partnership activities authorized under section 233; and 
(2) not more than $11,000,000 for fiscal year 1991, and 
$11,000,000 for fiscal year 1992, shall be for activities in 
support of State and local housing strategies authorized under 
subtitle C. 
42 use 12725. 
SEC. 206. NOTICE. 
Regulations. 
The Secretary shall issue regulations to implement the provisions 
of this title after notice and an opportunity for comment pursuant to 
section 553 of title 5, United States Code. Such regulations shall 
become effective not later than 180 days after the date of enactment 
of this Act. 
Subtitle A—HOME Investment Partnerships 
42 use 12741. 
SEC. 211. AUTHORITY. 
The Secretary is authorized to make funds available to participat-
ing jurisdictions for investment to increase the number of families 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4097 
served with decent, safe, sanitary, and affordable housing and 
expand the long-term supply of affordable housing in accordance 
with provisions of this subtitle. 
SEC. 212. ELIGIBLE USES OF INVESTMENT. 
42 USC 12742. 
(a) HOUSING USES.— 
(1) IN GENERAL.—Funds made available under this subtitle 
may be used by participating jurisdictions to provide incentives 
to develop and support 
affordable 
rental 
housing and 
homeownership affordability through the acquisition, new 
construction, 
reconstruction, or moderate or substantial 
rehabilitation of affordable housing, including real property 
acquisition, site improvement, conversion, demolition, and other 
expenses, including financing costs, relocation expenses of any 
displaced persons, families, businesses, or organizations, and to 
provide tenant-based rental assistance. 
(2) PREFERENCE TO REHABIUTATION.—A participating jurisdic-
tion shall give preference to rehabilitation of substandard hous-
ing unless the jurisdiction determines that— 
(A) such rehabilitation is not the most cost effective way 
to meet the jurisdiction's need to expand the supply of 
affordable housing; and 
(B) the jurisdiction's housing needs cannot be met 
through rehabilitation of the available stock. 
The Secretary shall not restrict a participating jurisdiction's 
choice of rehabilitation, 
substantial 
rehabilitation, new 
construction, reconstruction, acquisition, or other eligible hous-
ing use unless such restriction is explicitly authorized under 
paragraph (3) of this subsection or under section 223(2). 
(3) CONDITIONS FOR NEW CONSTRUCTION.— 
(A) IN GENERAL.—Funds made available under this sub-
title may be used (at the discretion of a participating juris-
diction) for new construction of housing only if the housing 
is to serve a local market area that, in the determination of 
the Secretary has— 
(i) an inadequate supply of housing at rentals below 
the fair market rent established for the area under 
section 8 of the United States Housing Act of 1937, and 
(ii) a severe shortage of substandard residential struc-
tures in the jurisdiction that are suitable for rehabilita-
tion as affordable rental housing. 
(B) ESTABLISHMENT OF CRITERIA.—The Secretary shall 
publish— 
(i) obiective criteria for determining whether a juris-
diction s housing supply is sufficiently inadequate to 
permit new construction pursuant to subparagraph (A), 
and 
(ii) a list of jurisdictions that in the determination of 
the Secretary meet those criteria. 
The Secretary shall give reasonable opportunity for juris-
dictions not designated on the published list to dem-
onstrate, on the basis of additional information, that they 
meet the criteria. Such criteria shall permit new construc-
tion by not fewer than 30 percent of the jurisdictions receiv-
ing an allocation under section 216(1). Such criteria shall 
include objective data on housing market conditions such as 
104 STAT. 4098 
PUBLIC LAW 101-625—NOV. 28, 1990 
low vacancy rates, low turnover of units with rents below 
fair market rents, and a high proportion of substandard 
housing. 
(C) 
NEIGHBORHOOD 
REVITAUZATION.—Notwithstanding 
subparagraph (A), a participating jurisdiction may use 
funds made available under this subtitle for construction of 
affordable housing if the participating jurisdiction certifies 
that— 
(i) the program of construction is needed to facilitate 
a neighborhood revitalization program that emphasizes 
rehabilitation of substandard housing for rental or 
homeownership opportunities by low-income and mod-
erate-income families in an area designated by the 
jurisdiction; 
(ii) the housing is located in a low- or moderate-
income neighborhood, as defined in section 10(j)(13) of 
the Federal Home Loan Bank Act; 
(iii) the number of units to be constructed with assist-
ance under this subtitle does not exceed 20 percent of 
the total number of units in the neighborhood revital-
ization program that are assisted with funds under this 
subtitle; and 
(iv) the housing is to be produced by a community 
housing development organization, as defined in sec-
tion 104(6), or a public agency. 
(D) APPLICABIUTY.—Clause (iii) of subparagraph (C) shall 
not apply if the jurisdiction certifies that— 
(i) the housing is to be located in a severely distressed 
area with large tracts of vacant land and abandoned 
buildings, 
(ii) the housing is to be located in an area with an 
inadequate supply of existing housing that 
can 
economically be rehabilitated to meet identified hous-
ing needs, or 
(iii) the new construction is required to accomplish 
the neighborhood revitalization program. 
(E) SPECIAL NEEDS HOUSING.—Notwithstanding subpara-
graph (A), a participating jurisdiction may use funds made 
available under this subtitle for construction of— 
(i) affordable housing for large families; 
(ii) affordable housing for persons with disabilities; 
(iii) single room occupancy housing; and 
(iv) other categories of affordable housing for persons 
with special needs that the Secretary may designate; 
if the participating jurisdiction certifies on the basis of 
objective data in its annual housing strategy that a high 
priority need for such housing exists in the jurisdiction, and 
that there is not a supply of vacant, habitable, public 
housing units in excess of normal vacancies resulting from 
turnovers that could meet the specified need. 
(4) TENANT-BASED RENTAL ASSISTANCE.— 
(A) IN GENERAL.—A participating jurisdiction may use 
funds provided under this subtitle for tenant-based rental 
assistance only if— 
(i) the jurisdiction certifies that the use of funds 
under this subtitle for tenant-beised rental assistance is 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4099 
an essential element of the jurisdiction's annual hous-
ing strategy for expanding the supply, affordability, 
and availability of decent, safe, sanitary, and affordable 
housing, and specifies the local market conditions that 
lead to the choice of this option; and 
(ii) the tenant-based rental assistance is provided to 
persons from the waiting lists eligible for section 8 
Eissistance 
in 
accordance 
with 
the 
applicable 
preferences. 
(B) FAIR SHARE NOT AFFECTED.—A jurisdiction's section 8 
fair share allocation shall be unaffected by the use of 
assistance under this title. 
(C) 24-MONTH CONTRACTS.—Rental assistance contracts 
made available with assistance under this title shall be for 
not more than 24 months, except that assistance to a family 
may be renewed. 
(D) USE OF SECTION 8 ASSISTANCE.—In any case where 
assistance under section 8 of the United States Housing Act 
of 1937 becomes available to a participating jurisdiction, 
recipients of rental assistance under this title shall qualify 
for tenant selection preferences to the same extent as when 
they received the rental assistance under this title. A rental 
assistance program under this title shall meet minimum 
criteria prescribed by the Secretary, such as housing qual-
ity standards and standards regarding the reasonableness 
of the rent. 
(b) INVESTMENTS.—Participating jurisdictions shall have discretion 
to invest funds made available under this subtitle as equity invest-
ments, interest-bearing loans or advances, noninterest-bearing loans 
or advances, interest subsidies or other forms of assistance that the 
Secretary has determined to be consistent with the purposes of this 
title. Each participating jurisdiction shall have the right to establish 
the terms of assistance. 
(c) PROHIBITED USES.—Funds made available under this subtitle 
may not be used to— 
(1) defray any administrative 
cost of a 
participating 
jurisdiction, 
(2) provide tenant-bsised rental assistance for the special pur-
poses of the existing section 8 program, including replacing 
public housing that is demolished or disposed of, preserving 
federally assisted housing, assisting in the disposition of housing 
owned or held by the Secretary, preventing displacement from 
rental rehabilitation projects, or extending or renewing tenant-
based assistance under section 8 of the United States Housing 
Act of 1937, 
(3) provide non-Federal matching contributions required 
under any other Federal program, 
(4) provide assistance authorized under section 9 of the United 
States Housing Act of 1937, 
(5) carry out activities authorized under section 14 of the 
Housing Act of 1937, or 
(6) provide assistance to eligible low-income housing under 
the Emergency Low Income Housing Preservation Act of 1987 
or the Low-Income Housing Preservation and Resident 
Homeownership Act of 1990. 
(d) COST LIMITS.— 
104 STAT. 4100 
PUBLIC LAW 101-625—NOV. 28, 1990 
(1) IN GENERAL.—The Secretary shall establish limits on the 
amount of funds under this subtitle that may be invested on a 
per unit basis. The limits shall be established on a market-by-
market basis, with adjustments made for number of bedrooms, 
and shall reflect the actual cost of new construction, reconstruc-
tion, or rehabilitation of housing that meets applicable State 
and local housing and building codes and the cost of land, 
including necessary site improvements. Adjustments shall be 
made amnually to reflect inflation. Separate limits may be set 
for different eligible activities. 
(2) CRITERIA.—In calculating per unit limits, the Secretary 
shall take into account that assistance under this title is 
intended to— 
(A) provide nonluxury housing with suitable amenities; 
(B) operate effectively in all jurisdictions; 
(C) facilitate mixed-income housing; and 
(D) reflect the costs associated with meeting the special 
needs of tenants or homeowners that the housing is 
designed to serve. 
(3) CONSULTATION.—In calculating cost limits, the Secretary 
shall consult with organizations that have expertise in the 
development of affordable housing, including nationed nonprofit 
organizations and national organizations representing private 
development Arms and State and local governments. 
(e) CERTIFICATION OF COMPLIANCE.—The requirements of section 
102(d) of the Department of Housing and Urban Development 
Reform Act of 1989 shall be satisfied by a certification by a partici-
pating jurisdiction to the Secretary that the combination of Federal 
assistance provided to any housing project shall not be any more 
than is necessary to provide affordable housing. 
42 use 12743. 
SEC. 213. DEVELOPMENT OF MODEL PROGRAMS. 
(a) IN GENERAL.—The Secretary shall— 
Nonprofit 
(1) in Cooperation with participating jurisdictions, govern-
organizations. 
ment-sponsored 
mortgage 
finance 
corporations, 
nonprofit 
kidust^ 
organizations, the private sector, and other appropriate parties, 
develop, test, evaluate, refine, and, as necessary, replace a 
selection of model programs designed to carry out the purposes 
of this title; 
(2) make available to participating jurisdictions alternative 
model programs, which shall include suggested guidelines, 
procedures, forms, legal documents and such other elements as 
the Secretary determines to be appropriate; 
(3) assure, insofar as is feasible, the availability of an appro-
priate variety of model programs designed for local market 
conditions, housing problems, project characteristics, and mana-
gerial 
capacities 
as 
they 
differ 
£unong 
participating 
jurisdictions; 
Government 
(4) negotiate and enter into agreements with agencies of the 
contracts. 
Federal Government, participating jurisdictions, private finan-
cial institutions, government-sponsored mortgage finance cor-
porations, nonprofit organizations, and other entities to provide 
such services, products, or financing as may be required for the 
implementation of a model program; 
(5) provide detailed information on model programs as re-
quested by participating jurisdictions, private financial institu-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4101 
tions, developers, nonprofit organizations, and other interested 
parties; and 
(6) encourage the use of such model programs to achieve 
efficiency, economies of scale, and effectiveness in the invest-
ment of funds made available under this subtitle through third-
party training, printed materials, and such other means of 
support as the Secretary determines will achieve the purpose of 
this title. 
Ob) ADOPTION OF PROGRAMS.—Except as provided in section 223(2), 
each participating jurisdiction shall have the discretion to adopt one 
or more model programs, adapt one or more model programs to its 
own requirements, design additional forms of assistsmce by itself or 
in cooperation with other participating jurisdictions, and suggest 
additional model programs for adoption by the Secretary as the 
participating jurisdiction may deem appropriate, and the Secretary 
may assist a participating jurisdiction in adopting, adapting, or 
designing one or more model programs. 
(c) SUBTITLE D PROGRAMS.—The selection of model programs to be 
made available for adoption or adaptation shall include programs 
meeting the criteria set forth in subtitle D. 
SEC. 214. INCOME TARGETING. 
42 USC 12744. 
Each participating jurisdiction shall invest funds made available 
under this subtitle within each fiscal year so that— 
(1) with respect to rental assistance and rental units— 
(A) not less than -90 percent of such funds are invested 
with respect to dwelling units that are occupied by families 
whose incomes do not exceed 60 percent of the median 
family income for the area, as determined by the Secretary 
with adjustments for smaller and larger families, (except 
that the Secretary may establish income ceilings higher or 
lower than 60 percent of the median for the area on the 
basis of the Secretary's findings that such variations are 
necessary because of prevailing levels of construction cost 
or fair market rent, or unusually high or low family 
income) at the time of occupancy or at the time funds are 
invested, whichever is later, and 
(B) the remainder of such funds are invested with respect 
to dwelling units that are occupied by households that 
quEilify as low-income families (other than families de-
scribed in subparagraph (A)) at the time of occupancy or at 
the time funds are invested, whichever is later; 
(2) with respect to homeownership assistance, 100 percent of 
such funds are invested with respect to dwelling units that are 
occupied by households that qualify as low-income families at 
the time of occupancy or at the time funds are invested, which-
ever is later; and 
(3) all such funds are invested with respect to housing that 
qualifies £is affordable housing under section 215. 
SEC. 215. QUALIFICATION AS AFFORDABLE HOUSING. 
42 USC 12745. 
(a) RENTAL HOUSING.— 
(1) QUALIFICATION.—Housing that is for rental shall qualify as 
affordable housing under this title only if the housing— 
(A) bears rents not greater than the lesser of (i) the 
existing fair market rent for comparable units in the area 
as established by the Secretary under section 8 of the 
104 STAT. 4102 
PUBLIC LAW 101-625—NOV. 28, 1990 
United States Housing Act of 1937, or (ii) a rent that does 
not exceed 30 percent of the adjusted income of a family 
whose income equals 65 percent of the median income for 
the area, as determined by the Secretary, with adjustment 
for smaller and larger families, except that the Secretary 
may establish income ceilings higher or lower than 65 
percent of the median for the area on the basis of the 
Secretary's findings that such variations are necessary be-
cause of prevailing levels of construction costs or fair 
market rents, or unusually high or low family incomes; 
(B) has not less than 20 percent of the units (i) occupied 
by very low-income families who pay as a contribution 
toward rent (excluding any Federal or State rental subsidy 
provided on behalf of the family) not more than 30 percent 
of the family's monthly adjusted income as determined by 
the Secretary, or (ii) occupied by very low-income families 
and bearing rents not greater than the gross rent for rent-
restricted residential units as determined under section 
42(gX2) of the Internal Revenue Code of 1986; 
(C) is occupied only by households that qualify as low-
income families; 
(D) is not refused for leasing to a holder of a voucher or 
certificate of eligibility under section 8 of the United States 
Housing Act of 1937 because of the status of the prospective 
tenant as a holder of such voucher or certificate of 
eligibility; 
(E) will remain affordable, according to binding commit-
ments satisfactory to the Secretary, for the remaining 
useful life of the property, as determined by the Secretary, 
without regard to the term of the mortgage or to transfer of 
ownership, or for such other period that the Secretary 
determines is the longest feasible period of time consistent 
with sound economics and the purposes of this Act; and 
(F) if newly constructed, meets the energy efficiency 
standards promulgated by the Secretary in accordance with 
section 109 of this Act. 
(2) ADJUSTMENT OF QUALIFYING RENT.—The Secretary 
may 
adjust the qualif3dng rent established for a project under 
subparagraph (A) of paragraph (1), only if the Secretary finds 
that such adjustment is necessary to support the continued 
financial viability of the project and only by such amount as the 
Secretary determines is necessary to maintain continued finan-
cial viability of the project. 
(3) INCREASES IN TENANT INCOME.—Housing shall qualify as 
affordable housing despite a temporary noncompliance with 
subparagraph (B) or (C) of paragraph (1) if such noncompliance 
is caused by increases in the incomes of existing tenants and if 
actions satisfactory to the Secretary are being taken to ensure 
that all vacancies are filled in accordance with paragraph (1) 
until such noncompliance is corrected. Tenants who no longer 
qualify as low-income families shall pay as rent not less than 30 
percent of the family's adjusted monthly income, as recertified 
annually. 
(4) MIXED-INCOME PROJECT.—Housing that accounts for less 
than 100 percent of the dwelling units in a project shall qualify 
as affordable housing if such housing meets the criteria of th^ 
section. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4103 
(5) MIXED-USE PROJECT.—Housing in a project that is designed 
in part for uses other than residential use shall qualify as 
affordable housing if such housing meets the criteria of this 
section. 
(b) HoMEOWNERSHiP.—Housing that is for homeownership shall 
qualify as affordable housing under this title only if the housing— 
(1) has an initial purchase price that does not exceed 95 
percent of the median purchase price for the area, as deter-
mined by the Secretary with such adjustments for differences in 
structure, including whether the housing is single-family or 
multifamily, and for new and old housing as the Secretary 
determines to be appropriate; 
(2) is the principal residence of an owner whose family quali-
fies as a low-income family at the time of purchase; 
(3) is made available for initial purchase only to first-time 
homebuyers; 
(4) is made available for subsequent purchase only— 
(A) to persons who meet the qualifications specified under 
paragraph (2), and 
(B) at a price consistent with guidelines that are estab-
lished by the participating jurisdiction and determined by 
the Secretary to be appropriate— 
(i) to provide the owner with a fair return on invest-
ment, including any improvements, and 
(ii) to ensure that the housing will remain affordable 
to a reasonable range of low income homebuyers; and 
(5) if newly constructed, meets the energy efficiency standards 
promulgated by the Secretary in accordance with section 109 of 
this Act. 
SEC. 216. PARTICIPATION BY STATES AND LOCAL GOVERNMENTS. 
42 USC 12746. 
The Secretary shall designate a State or unit of general local Regulations. 
government to be a participating jurisdiction when it complies with 
procedures that the Secretary shall establish by regulation, which 
procedures shall only provide for the following: 
(1) ALLOCATION.—Not later than 20 days after funds to carry 
out this subtitle become available (or, during the first year after 
enactment of this Act, not later than 20 days after (A) funds to 
carry out this subtitle are provided in an appropriations Act, or 
(B) regulations to implement this subtitle are promulgated, 
whichever is later), the Secretary shall allocate funds in accord-
ance with section 217 and promptly notify each jurisdiction 
receiving a formula allocation of its allocation amount. If a 
jurisdiction is not already a participating jurisdiction, the Sec-
retary shall inform the jurisdiction in writing how the jurisdic-
tion may become a participating jurisdiction. 
(2) CONSORTIA.—A consortium of geographically contiguous 
units of general local government shall be deemed to be a unit 
of general local government for purposes of this title if the 
Secretary determines that the consortium— 
(A) has sufficient authority and administrative capability 
to carry out the purposes of this title on behalf of its 
member jurisdictions, and 
(B) will, according to a written certification by the State 
(or States, if the consortium includes jurisdictions in more 
than one State), direct its activities to alleviation of housing 
problems within the State or States. 
104 STAT. 4104 
PUBLIC LAW 101-625—NOV. 28, 1990 
(3) EuGiBiLiTY.—(A) A jurisdiction receiving a formula alloca-
tion under section 217 shall be eligible to become a participating 
jurisdiction if its formula allocation is $750,000 or greater, or if 
the Secretary finds that— 
(i) the jurisdiction has a local housing authority and has 
demonstrated a capacity to carry out provisions of this 
subtitle, and 
(ii) the State has authorized the Secretary to transfer to 
the jurisdiction a portion of the State's allocation that is 
equal to or greater than the difference between the jurisdic-
tion's formula allocation and $750,000, or the State or 
jurisdiction has made available from the State's or jurisdic-
tion's own sources an equal amount for use by the jurisdic-
tion in conformance with the provisions of this subtitle. 
(B) If a jurisdiction heis met the requirements of subparagraph 
(A), the jurisdiction's formula allocation for a fiscal year shall 
subsequently be deemed to equal the sum of the jurisdiction's 
allocation under section 217(a)(1) and the amount made avail-
able to the jurisdiction under subparagraph (AXii). 
(4) NOTIFICATION.—If an eligible jurisdiction notifies the 
Secretary in writing, not later than 30 days after receiving 
notification under paragraph (1), of its intention to become a 
participating jurisdiction, the Secretary shall reserve an 
amount equal to the jurisdiction's gdlocation (plus any 
reallocations for which the jurisdiction is eligible under section 
217(dXl)) pending the jurisdiction's designation as a participat-
ing jurisdiction. The Secretary shall reallocate, in accordemce 
with paragraph (6) of this section, any funds reserved under the 
previous sentence if the Secretary determines that the jurisdic-
tion will not meet the requirements for designation as a partici-
pating jurisdiction within a reasonable period of time. 
(5) SUBMISSION OF STRATEGY.—Not later than 90 days after 
providing notification under paragraph (4), an eligible jurisdic-
tion shall submit to the Secretary a comprehensive housing 
affordability strategy in accordance with section 105. 
(6) REALLOCATION.—If the Secretary determines that a juris-
diction has failed to meet the requirements of the previous 3 
paragraphs or if the Secretary, after providing for amendments 
and resubmissions in accordance with section 105(c)(3), dis-
approves the jurisdiction's comprehensive housing affordability 
strategy, the Secretary shgdl reallocate any funds reserved for 
the jurisdiction as follows: 
(A) STATE.—If a State has failed to meet the require-
ments, the Secretary shall— 
(i) make any funds reserved for the State available by 
direct reallocation among applications submitted by 
units of general local government within the State or 
consortia that include units of general local govern-
ment within the State, insofar as approvable applica-
tions meeting the selection criteria under section 217(c) 
are received within 12 months after the funds become 
available for the direct reallocation, and 
(ii) reallocate the remainder by formula in accord-
ance with section 217(b). 
(B) LOCAL.—If a unit of general local government has 
failed to meet the requirements and is located in a State 
that is a participating jurisdiction, the Secretary shall re-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4105 
allocate to the State any funds reserved for the locality, 
with preference going to the provision of affordable housing 
within the locality. 
(C) DIRECT REALLOCATION.—If a unit of general local 
government has failed to meet the requirements and is 
located in a State that is not a participating jurisdiction, 
the Secretary shall— 
(i) make any funds reserved for the locality available 
for use within the State by direct reallocation among 
units of general local government and community 
housing development organizations, insofar as approv-
able applications meeting the selection criteria under 
section 217(c) are received within 12 months after the 
funds become available for the direct reallocation with 
priority going to applications for affordable housing 
within the locality, and 
(ii) reallocate the remainder in accordance with sec-
tion 217(b). 
(D) CERTAIN JURISDICTIONS DEEMED TO BE PARTICIPATING 
JURISDICTIONS.—If a State or unit of general local govern-
ment is meeting the requirements of paragraphs (3), (4), and 
(5), it shall be deemed to be a participating jurisdiction for 
purposes of reallocation under this paragraph. 
(7) DESIGNATION.—The Secretary shall designate an eligible 
jurisdiction to be a participating jurisdiction as soon as its 
comprehensive housing affordability strategy is approved in 
accordance with section 105. 
(8) CONTINUOUS DESIGNATION.—Once a State or unit of general 
local government is designated a participating jurisdiction, it 
shall remain a participating jurisdiction for subsequent fiscal 
years, except as provided in paragraph (9). The provisions of 
paragraphs (3) through (6) shall not apply to participating 
jurisdictions. 
(9) REVOCATION.—The Secretary may revoke a jurisdiction's 
designation as a participating jurisdiction if— 
(A) the Secretary finds, after reasonable notice and oppor-
tunity for hearing, that the jurisdiction is unwilling or 
unable to carry out the provisions of this title, or 
(B) the jurisdiction's allocation falls below $750,000 for 3 
consecutive years, below $625,000 for 2 consecutive years, or 
the jurisdiction does not receive a formula allocation of 
$500,000 or more in any 1 year. 
If a jurisdiction's designation as a participating jurisdiction is 
revoked, any remaining line of credit in the jurisdiction's 
HOME Investment Trust Fund established under section 218 
shall be reallocated in accordance with paragraph (6) of this 
section. 
SEC. 217. ALLOCATION OF RESOURCES. 
42 USC 12747. 
(a) IN GENERAL.— 
(1) STATES AND UNITS OF GENERAL LOCAL GOVERNMENT.—After 
reserving amounts for Indian tribes as required by paragraph 
(2) of this subsection, the Secretary shall allocate funds ap-
proved in an appropriations Act to carry out this title by 
formula as provided in subsection (b). Of the funds made avail-
able under the preceding sentence, the Secretary shall initially 
104 STAT. 4106 
PUBLIC LAW 101-625—NOV. 28, 1990 
allocate 60 percent among units of general local government 
and 40 percent among States. 
Grant programs. 
(2) INDIAN ALLOCATION.—For each fiscal year, of the amount 
approved in an appropriations Act to carry out this title, the 
Secretary shall reserve for grants to Indian tribes 1 percent of 
the amount appropriated under such section. The Secretary 
shall provide for distribution of amounts under this paragraph 
to Indian tribes on the basis of a competition conducted pursu-
ant to specific criteria for the selection of Indian tribes to 
Regulations. 
receive such amounts. The criteria shall be contained in a 
regulation promulgated by the Secretary after notice and public 
comment. 
0>) FORMULA ALLOCATION.— 
(1) IN GENERAL.— 
(A) RENTAL HOUSING PRODUCTION FORMULA.—(i) Of 
the 
funds made available under subsection (aXl), the Secretary 
shall designate 10 percent in fiscal year 1991, and 15 per-
cent in fiscal year 1992, for use only to produce affordable 
rental housing through new construction or substantial 
rehabilitation. Such funds shall be initially allocated by 
formula among jurisdictions that, according to the deter-
mination of the Secretary under section 212(a)(3)(B), have a 
housing supply sufficiently inadequate to permit new 
construction. The allocation among States shall reflect each 
State's share of the need in areas that meet the criteria 
established by the Secretary under section 212(a)(3)(B). Such 
formula shall reflect each eligible jurisdiction's share of the 
total need among all eligible jurisdictions for rental housing 
production as identified by objective measures of inad-
equate housing supply, including low vacancy rates, low 
turnover of units with rents below fair market rents, a high 
proportion of substandard housing, and other measures 
that the Secretary determines are appropriate under sec-
tion 212(a)(3)(B). In no case may a jurisdiction's total alloca-
tion under this subparagraph and subparagraph (B) exceed 
the amount the jurisdiction would have received if its 
allocation were made under subparagraph (B) alone. 
(ii) Any amounts made available under clause (i) that are 
not committed for new construction or substantial re-
habilitation within a period ending 12 months after they 
are deposited in a jurisdiction's HOME Investment Trust 
Fund shall remain available only for such purposes during 
a subsequent 12-month period, after which they shall be 
available for other eligible uses in accordance with section 
212 for an additional period of not to exceed 12 months. 
Regulations. 
(B) BASIC FORMULA.—The Secretary shall establish in 
regulation an allocation formula that reflects each jurisdic-
tion's share of total need among eligible jurisdiction for an 
increased supply of affordable housing for very low-income 
and low-income families of different size, as identified by 
objective measures of inadequate housing supply, sub-
standard housing, the number of low-income families in 
housing likely to be in need of rehabilitation, the costs of 
producing housing, poverty, and the relative fiscal incapac-
ity of the jurisdiction to carry out housing activities eligible 
under section 212 without Federal assistance. Allocation 
among units of general local government shall take into 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4107 
account the housing needs of metropolitan cities, urban 
counties, and approved consortia of units of general local 
government. 
(C) SOURCE OF DATA.—The data to be used for formula 
allocation of funds within a fiscal year shall be data ob-
tained from a standard source that are available to the 
Secretary 90 days prior to the beginning of that fiscal year. 
(D) 
USE OF BASIC FORMULA.—Except as provided 
in 
subparagraph (A), the beisic formula established under 
subparagraph (B) shall be used for all formula allocations 
and reallocations provided for in this subtitle. 
(E) WEIGHTS.—When eillocation is made among States, 
the Secretary shall apply the formulas in subparagraph (B) 
giving 20 percent weight to measures of need for the whole 
State and 80 percent weight to measures of need among 
units of general local government that are not receiving an 
allocation under section 216(1). 
(F) ADJUSTMENTS.—In developing the basic formula in 
subparagraph (B), the Secretary shall (i) avoid the alloca-
tion of an excessively large share of amounts made avail-
able under this subtitle to any one State or unit of general 
local government, and (ii) take into account the need for a 
geographic distribution of amounts made available under 
this subtitle that appropriately reflects the housing need in 
each region of the Nation. If a jurisdiction receives an 
allocation under subparagraph (A), the Secretary shall 
make such adjustments in the jurisdiction's allocation 
under the formula in subparagraph (B) as may be necessary 
to ensure that the combined effect of the formulas in 
subparagraphs (A) and (B) does not reduce the allocation of 
any jurisdiction below the allocation it would receive if 
allocations were made according to the formula under 
subparagraph (B) alone. 
(G) CONSULTATION.—The Secretary shall develop the for-
mulas in subparagraphs (A) and (B) in ongoing consultation 
with (i) the Subcommittee on Housing and Urban Affairs of 
the Committee on Banking, Housing, and Urban Affairs of 
the Senate, (ii) the Subcommittee on Housing and Commu-
nity Development of the Committee on Banking, Finance 
and Urban Affairs of the House of Representatives, and (iii) 
organizations representing States and units of general local 
government. Not less than 60 days prior to publishing a 
formula for comment, the Secretary shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives a copy of the for-
mula the Secretary intends to propose. 
(2) MINIMUM STATE ALLOCATION.— 
(A) IN GENERAL.—If the formula, when applied to funds 
approved under this section in appropriations Acts for a 
fiscal year, would allocate less than $3,000,000 to any State, 
the allocation for such State shall be $3,000,000, and the 
increase shall be deducted pro rata from the allocations of 
other States. 
(B) INCREASED MINIMUM ALLOCATION.—If no unit of gen-
eral local government within a State receives an allocation 
under paragraph (3), the State's allocation shall be in-
104 STAT. 4108 
PUBLIC LAW 101-625—NOV. 28, 1990 
creased by $500,000. Priority for use of such increased 
allocation shall go to the provision of affordable housing 
within the boundaries of metropolitan cities, urban coun-
ties, and approved consortia within the State, based on the 
need for such funds. The increased allocation to a State 
under the preceding sentence shall be derived by a pro rata 
deduction from the allocations to units of general local 
government in all States, except that such pro rata deduc-
tion shall not reduce the allocation of any unit of general 
local government below $500,000. 
(3) MINIMUM LOCAL ALLOCATION.—The Secretary shall allocate 
funds available for formula allocation to units of general local 
government that, as of the end of the previous fiscal year, 
qualified as metropolitan cities, urban counties, and consortia 
approved by the Secretary in accordance with section 216(2) so 
that, when all such funds are initially allocated by formula, 
only those jurisdictions that are allocated an amount of 
$500,000 or greater shall receive an allocation, Prior to 
announcing initial allocations, the Secretary shall successively 
recalculate the allocations to jurisdictions under this subsection 
so that the maximum number of such jurisdictions can receive 
initial allocations, 
(c) CRITERIA FOR DIRECT REALLOCATION.—The Secretary shall 
establish objective criteria for making direct reallocations to any 
participating jurisdiction and other eligible entities. A jurisdiction 
shall be eligible for a direct reallocation under this subsection only 
if the jurisdiction, in a form acceptable to the Secretary, submits an 
application that demonstrates to the satisfaction of the Secretary 
that the jurisdiction is engaged, or has made good faith efforts to 
engage, in cooperative efforts between the State and appropriate 
participating jurisdictions within the State to develop, coordinate. 
Regulations. 
and implement housing strategies under this title. The Secretary 
shall by regulation establish objective selection criteria for such 
direct reallocations, which criteria shall take into account— 
(1) the applicant's demonstrated commitment to expand the 
supply of affordable rental housing, including units developed 
by public housing agencies, as indicated by the additional 
number of units of affordable housing made available through 
production or rehabilitation within the previous 2 years, 
making adjustment for regional variations in construction and 
rehabilitation costs and giving special consideration to the 
number of additional units made available under this title 
through production or rehabilitation, including units developed 
by public housing agencies, in relation to the amounts made 
available under this program; 
(2) the applicant's actions that— 
(A) direct funds made available under this subtitle to 
benefit very low-income families, with a range of incomes, 
in amounts that exceed the income targeting requirements 
of section 214, with extra consideration given for activities 
that expand the supply of affordable housing for very low-
income families whose incomes do not exceed 30 percent of 
the median family income for the area, as determined by 
the Secretary; 
(B) apply the tenant selection preference categories ap-
plicable under section 8 of the United States Housing Act of 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4109 
1937 to the selection of tenants for housing assisted under 
this subtitle; 
(C) provide matching resources in excess of funds 
required under section 220; and 
(D) stimulate a high degree of investment and participa-
tion in development by the private sector, including non-
profit organizations; and 
(3) the degree to which the applicant is pursuing policies 
that— 
(A) make existing housing more affordable; 
(B) remove or ameliorate any negative effects that public 
policies identified by the applicant pursuant to section 
10503)(4) may have on the cost of housing or the incentives 
to develop, maintain, or improve affordable housing in the 
jurisdiction; 
(C) preserve the affordability of privately-owned housing 
that is vulnerable to conversion, demolition, disinvestment, 
or abandonment; 
(D) increase the supply of housing that is affordable to 
very low-income and low-income persons, particularly in 
areas that are accessible to expanding job opportunities; 
and 
(E) remedy the effects of discrimination and improve 
housing opportunities for disadvantaged minorities. 
(d) REALLOCATIONS.— 
(1) IN GENERAL.—The Secretary shall make any reallocations 
periodically throughout each fiscal year so as to ensure that £ill 
funds to be reallocated are made available to eligible jurisdic-
tions as soon as possible, consistent with orderly program 
administration. Jurisdictions eligible for such reallocations 
shall include participating jurisdictions and jurisdictions 
meeting the requirements of paragraphs (3), (4), and (5) of 
section 216. 
(2) COMMITMENTS.—The Secretary shall establish procedures 
according to which participating jurisdictions may make 
commitments to invest funds made available under this section. 
Such procedures shall provide for appropriate stages of commit-
ment of funds to a project from initisd reservation through 
binding commitment. Notwithstanding any other provision of 
this title, funds that the Secretary determines are needed to 
fulfill 
binding commitments 
shall not be available 
for 
reallocation. 
(3) LIMITATION.—Unless otherwise specified in this subtitle, 
any reallocation of funds from a State shall be made only 
among all participating States, and any reallocation of funds 
from units of general local government shall be made only 
among all participating units of general local government. 
SEC. 218. HOME INVESTMENT TRUST FUNDS. 
42 USC 12748. 
(a) ESTABUSHMENT.—The Secretary shall establish for each 
participating jurisdiction a HOME Investment Trust Fund, which 
shsdl be an account (or accounts as provided in section 219(c)) for use 
solely to invest in affordable housing within the participating juris-
diction's boundaries in accordance with the provisions of this 
subtitle. 
104 STAT. 4110 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 12749. 
Government 
contracts. 
(b) LINE OF CREDIT.—The Secretary shall establish a line of credit 
in the HOME Investment Trust Fund of each participating jurisdic-
tion, which line of credit shall include— 
(1) funds allocated or reallocated to the participating jurisdic-
tion under section 217, and 
(2) any payment or repayment made pursuant to section 219. 
(c) REDUCTIONS.—A participating jurisdiction's line of credit shall 
be reduced by— 
(1) funds drawn from the HOME Investment Trust Fund by 
the participating jurisdiction, 
(2) funds expiring under subsection (g), and 
(3) any penalties assessed by the Secretary under section 224. 
(d) CERTIFICATION.—A participating jurisdiction may draw funds 
from its HOME Investment Trust Fund, but not to exceed the 
remaining line of credit, only after providing certification that the 
funds shall be used pursuant to the participating jurisdiction's 
approved housing strategy and in compliance with all requirements 
of this title. When such certification is received, the Secretary shall 
immediately disburse such funds in accordance with the form of the 
assistance determined by the participating jurisdiction. 
(e) INVESTMENT WITHIN 15 DAYS.—The participating jurisdiction 
shall, not later than 15 days after funds are drawn from the 
jurisdiction's HOME Investment Trust Fund, invest such funds, 
together with any interest earned thereon, in the affordable housing 
for which the funds were withdrawn. 
(f) NO INTEREST OR FEES.—The Secretary shall not charge any 
interest or levy any other fee with regard to funds in a HOME 
Investment Trust Fund. 
(g) EXPIRATION OF RIGHT TO DRAW FUNDS.—Except as provided in 
section 217(b)(l)(A)(ii), if any funds becoming available to a partici-
pating jurisdiction under this title are not placed under binding 
commitment to affordable housing within 24 months after the last 
day of the month in which such funds are deposited in the jurisdic-
tion's HOME Investment Trust Fund, the jurisdiction's right to 
draw such funds from the HOME Investment Trust Fund shall 
expire. The Secretary shall reduce the line of credit in the partici-
pating jurisdiction's HOME Investment Trust Fund by the expiring 
amount and shall reallocate the funds by formula in accordance 
with section 217(d). 
(h) ADMINISTRATIVE PROVISION.—The Secretary shall keep each 
participating jurisdiction informed of the status of its HOME Invest-
ment "Trust Fund, including the status of amounts under various 
stages of commitment. 
SEC. 219. REPAYMENT OF INVESTMENT. 
(a) IN GENERAL.—Any repa5mient of funds drawn from a jurisdic-
tion's HOME Investment Trust Fund, and any payment of interest 
or other return on the investment of such funds, shall be deposited 
in such jurisdiction's HOME Investment Trust Fund, except that, if 
the jurisdiction is not a participating jurisdiction when such pay-
ment or repayment is made, the amount of such payment or repay-
ment shall be reallocated in accordance with section 217(d). 
(b) ASSURANCE OF REPAYMENT.—Each participating jurisdiction 
shall enter into an agreement with the Secretary ensuring that 
funds invested in affordable housing under this subtitle are repay-
able when the housing no longer qualifies as affordable housing. 
Any repayment under the previous sentence shall be for deposit in 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4111 
the HOME Investment Trust Fund of the jurisdiction making the 
investment; except that if such jurisdiction is not a participating 
jurisdiction when such repa3anent is made, the amount of such 
repayment shall be reallocated in accordance with section 217(d), 
(c) AVAILABILITY.—The Secretary shall take such actions as are 
necessary to ensure that any repajrments deposited in a HOME 
Investment Trust Fund in accordance with this section shall be 
immediately available to the participating jurisdiction for invest-
ment subject to the provisions of this subtitle that apply to funds 
that are allocated under section 217. Actions authorized under the 
preceding sentence may include authorizing the establishment for a 
participating jurisdiction of a HOME Investment Trust Fund ac-
count outside of the Federal Government that, under arrangements 
satisfactory to the Secretary, shall be used solely to invest in 
affordable housing within the participating jurisdiction's boundaries 
in accordance with the provisions of this title. Such accounts shall 
be established in such a manner that repa5anents are not receipts or 
collections of the Federal Government. 
SEC. 220. MATCHING REQUIREMENTS. 
42 USC 12750. 
(a) CONTRIBUTION.—Each participating jurisdiction shall make 
contributions to affordable housing assisted under this title that 
total, throughout a fiscal year, not less than— 
(1) 25 percent of the total funds drawn from the jurisdiction's 
HOME Investment Trust Fund in that fiscal year with respect 
to rental assistance and housing rehabilitation; 
(2) 33 percent of the total funds drawn from the jurisdiction's 
HOME Investment Trust Fund in that fiscal year with respect 
to substantial rehabilitation; and 
(3) 50 percent of the total funds drawn from the jurisdiction's 
HOME Investment Trust Fund in that fiscal year with respect 
to new construction. 
Such contributions shall be in addition to any amounts made avail-
able under section 216(3XAXii). 
(b) RECOGNITION.— 
(1) IN GENERAL.—A contribution shall be recognized for pur-
poses of subsection (a) only if it— 
(A) is made with respect to housing that qualifies as 
affordable housing under section 215; or 
(B) is made with respect to any portion of a project not 
less than 50 percent of the units of which qualify as afford-
able housing under section 215. 
(2) ADMINISTRATIVE EXPENSES.—Contributions for administra-
tive expenses shall be recognized only up to an amount equal to 
7 percent of funds provided for investment under this title. 
(c) FORM.—Such contributions may be in the form of— 
(1) cash contributions from non-Federal resources, which may 
not include funds from a grant made under section 1060?) or 
section 106(d) of the Housing and Community Development Act 
of 1974; 
(2) payment of administrative expenses, as defined by the 
Secretary, from non-Federal resources, which may include 
funds from a grant made under section 106(b) or section 106(d) 
of the Housing and (Community Development Act of 1974; 
(3) the value of taxes, fees, or other charges that are normally 
and customarily imposed but are waived, foregone, or deferred 
104 STAT. 4112 
PUBLIC LAW 101-625—NOV. 28, 1990 
in a manner that achieves affordability of housing assisted 
under this title; 
(4) the value of land or other real property as appraised 
according to procedures acceptable to the Secretary; and 
(5) the value of investment in on-site and off-site infrastruc-
ture directly required for affordable housing assisted under this 
title. 
(d) REDUCTION OF REQUIREMENT.—If a jurisdiction demonstrates to 
the satisfaction of the Secretary that a reduction of the matching 
requirement specified in subsection (a) is necessary to permit the 
jurisdiction to carry out the purposes of this title, the Secretary may 
reduce the matching requirement during a period not to exceed 3 
years after the jurisdiction is first designated as a participating 
jurisdiction. Such reduction shall be not more than 75 percent in the 
first year, not more than 50 percent in the second year, and not 
more than 25 percent in the third year. 
42 use 12751. 
SEC. 221. PRIVATE-PUBLIC PARTNERSHIP. 
Each participating jurisdiction shall make all reasonable efforts, 
consistent with the purposes of this title, to maximize participation 
by the private sector, including nonprofit organizations and for-
profit entities, in the implementation of the jurisdiction's housing 
strategy, including participation in the financing, development, 
rehabilitation and management of affordable housing. Nothing in 
the previous sentence shall preclude public housing authorities from 
fully participating in the implementation of a jurisdiction's housing 
strategy. 
42 use 12752. 
SEC. 222. DISTRIBUTION OF ASSISTANCE. 
(a) LOCAL.—Each participating jurisdiction shall, insofar as is 
feasible, distribute assistance under this subtitle geographically 
within its boundaries and among different categories of housing 
need, according to the priorities of housing need identified in the 
jurisdiction's approved housing strategy. 
(b) STATE.—Participating States shall be responsible for distribut-
ing assistance throughout the State according to the State's assess-
ment of the geographical distribution of the housing need within the 
Rural areas. 
State, £is identified in the State's approved housing strategy. Partici-
pating States shall distribute assistance to rural areas in amounts 
that take into account the nonmetropolitan share of the State's total 
population and objective measures of rural housing need, such as 
poverty and substandard housing, as set forth in the State's housing 
strategy approved under section 105 of this Act. To the extent the 
need is within the boundaries of a participating unit of general local 
government, the State and the unit of general local government 
shall coordinate activities to address that need. 
42 use 12753. 
SEC. 223. PENALTIES FOR MISUSE OF FUNDS. 
If the Secretary finds after reasonable notice and opportunity for 
hearing that a participating jurisdiction has failed to comply 
substantially with any provision of this subtitle and until the Sec-
retary is satisfied that there is no longer any such failure to comply, 
the Secretary shall reduce the line of credit in the participating 
jurisdiction's HOME Investment Trust Fund by the amount of any 
expenditures that were not in accordance with the requirements of 
this title, and the Secretary may— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4113 
(1) prevent withdrawals from the participating jurisdiction's 
HOME Investment Trust Fund for activities affected by such 
failure to comply; 
(2) restrict the participating jurisdiction's activities under this 
title to activities that conform to one or more model programs 
made available under section 213; or 
(3) remove the participating jurisdiction from participation in 
allocations or reallocations of funds made available under this 
subtitle. 
SEC. 224. LIMITATION ON JURISDICTIONS UNDER COURT ORDER 
(a) IN GENERAL,—Notwithstanding any other provision of this Act, 
the Secretary shall ensure that funds provided under this subtitle 
are not employed to carry out housing remedies or to pay fines, 
penalties, or costs associated with an action in which— 
(1) a participating jurisdiction has been adjudicated, by a 
Federal, State, or local court, to be in violation of title VI of the 
Civil Rights Act of 1964, the Fair Housing Act, or any other 
Federal, State, or local law promoting fair housing or prohibit-
ing discrimination, or 
(2) a settlement has been entered into in any case where 
claims of such violations have been asserted against a partici-
pating jurisdiction, except to the extent permitted by sub-
section (b). 
Ot)) REMEDIAL USE OF FUNDS PERMITTED.—In the case of settlement 
described in subsection (aX2), a jurisdiction may use funds provided 
under this Act to carry out housing remedies with eligible activities. 
SEC. 225. TENANT AND PARTICIPANT PROTECTIONS. 
(a) LEASE.—The lease between a tenant and an owner of affordable 
housing assisted under this title for rental shall be for not less than 
one year, unless by mutual agreement between the tenant and the 
owner, and shall contain such terms and conditions as the Secretary 
shall determine to be appropriate. 
(b) TERMINATION OF TENANCY.—An owner shall not terminate the 
tenancy or refuse to renew the lease of a tenant of rental housing 
assisted under this title except for serious or repeated violation of 
the terms and conditions of the lease, for violation of applicable 
Federal, State, or local law, or for other good cause. Any termi-
nation or refusal to renew must be preceded by not less than 30 days 
by the owner's service upon the tenant of a written notice specifjdng 
the grounds for the action. 
(c) MAINTENANCE AND REPLACEMENT.—The owner of rental hous-
ing Eissisted under this title shall maintain the premises in compli-
ance with all applicable housing quality standards and local code 
requirements. 
(d) TENANT SELECTION.—The owner of rental housing assisted 
under this title shall adopt written tenant selection policies and 
criteria that— 
(1) are consistent with the purpose of providing housing for 
very low-income and low-income families, 
(2) are reasonably related to program eligibility and the 
applicant's ability to perform the obligations of the lesise, 
(3) give reasonable consideration to the housing needs of 
families that would have a preference under section 6(c)(4)(A) of 
the United States Housing Act of 1937 (42 U.S.C. 1437d(c)(4XA)), 
and 
42 use 12754. 
42 use 12755. 
104 STAT. 4114 
PUBLIC LAW 101-625—NOV. 28, 1990 
(4) provide for (A) the selection of tenants from a written 
waiting list in the chronological order of their application, 
insofar as is practicable, and (B) for the prompt notification in 
writing of any rejected applicant of the grounds for any 
rejection. 
42 use 12756. 
SEC. 226. MONITORING OF COMPLIANCE. 
(a) ENFORCEABLE AGREEMENTS.—Each participating jurisdiction, 
through binding contractual agreements with owners and otherwise, 
shall ensure long-term compliance with the provisions of this title. 
Such measures shall provide for (1) enforcement of the provisions of 
this title by the jurisdiction or by the intended beneficiaries, and (2) 
remedies for the breach of such provisions. 
(b) PERIODIC MONITORING.—Each participating jurisdiction, not 
less frequently than annually, shall review the activities of owners 
of affordable housing assisted under this title for rental to assess 
compliance with the requirements of this title. Such review shall 
include on-site inspection to determine compliance with housing 
codes and other applicable regulations. The results of each review 
shall be included in the jurisdiction's performance report submitted 
to the Secretary under section 108(a) and made avEiilable to the 
public. 
(c) SPECIAL PROCEDURES FOR CERTAIN PROJECTS.—In the case of 
small-scale or scattered site housing, the Secretary may provide for 
such streamlined procedures for achieving the purposes of this 
section as the Secretary determines to be appropriate. 
Subtitle B—Community Housing Partnership 
42 use 12771. 
SEC. 231. SET-ASIDE 
FOR COMMUNITY 
HOUSING 
DEVELOPMENT 
ORGANIZATIONS. 
(a) IN GENERAL.—For a period of 18 months after funds under 
subtitle A are made available to a jurisdiction, the jurisdiction shall 
reserve not less than 15 percent of such funds for investment only in 
housing to be developed, sponsored, or owned by community housing 
development organizations. Each participating jurisdiction shall 
make reasonable efforts to identify community housing development 
organizations that are capable or can reasonably be expected to 
become capable of carrjdng out elements of the jurisdiction's hous-
ing strategy and to encourage such community housing development 
organizations to do so. A participating jurisdiction is authorized to 
enter into contracts with community housing development organiza-
tions to carry out this section. 
OJ) RECAPTURE AND REUSE.—If any funds reserved under subsec-
tion (a) remain uninvested for a period of 18 months, then the 
Secretary shall deduct such funds from the line of credit in the 
participating jurisdiction's HOME Investment Trust Fund and 
make such funds available by direct reallocation (1) to other partici-
pating jurisdictions for affordable housing developed, sponsored or 
owned by community housing development organizations, or (2) to 
nonprofit intermediary organizations to carry out activities that 
develop the capacity of community housing development organiza-
tions consistent with section 233, with preference to community 
housing development organizations serving the jurisdiction from 
which the funds were recaptured. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4115 
(c) DIRECT REALLOCATION CRITERIA.—Insofar as practicable, direct 
reallocations under this section shall be made according to the 
selection criteria established under section 217(c). 
SEC. 232. PROJECT-SPECIFIC ASSISTANCE TO COMMUNITY HOUSING 42 USC12772. 
DEVELOPMENT ORGANIZATIONS. 
(a) IN GENERAL.—Amounts reserved under section 231 may be 
used for activities eligible under section 212 and, in amounts not to 
exceed 10 percent of the amounts so reserved, for other activities 
specified under this section. 
(b) PROJECT-SPECIFIC TECHNICAL ASSISTANCE AND SITE CONTROL 
LOANS.— 
(1) IN GENERAL.—Amounts reserved under the previous sec-
tion may be used to provide technical assistance and site control 
loans to community housing development organizations in the 
early stages of site development for an eligible project. Such 
loans shall not exceed amounts that the jurisdiction determines 
to be customary and reasonable project preparation costs allow-
able under paragraph (2). 
(2) ALLOWABLE EXPENSES.—A loan under this subsection may 
be provided to cover project expenses necessary to determine 
project feasibility (including costs of an initial feasibility study), 
consulting fees, costs of preliminary financial applications, legal 
fees, architectural fees, engineering fees, engagement of a devel-
opment team, site control and title clearance. 
(3) 
REPAYMENT.—A 
community 
housing 
development 
organization that receives a loan under this subsection shall 
repay the loan to the participating jurisdiction's HOME Invest-
ment Trust Fund from construction loan proceeds or other 
project income. The participating jurisdiction may waive repay-
ment of the loan, in part or in whole, if there are impediments 
to project development that the participating jurisdiction deter-
mines are reasonably beyond the control of the borrower. 
(c) PROJECT-SPECIFIC SEED MONEY LOANS.— 
(1) IN GENERAL.—Amounts reserved under the previous sec-
tion may be used to provide loans to community housing devel-
opment organizations to cover preconstruction project costs that 
the jurisdiction determines to be customary and reasonable, 
including, but not limited to the costs of obtaining firm 
construction loan commitments, architectural plans and speci-
fications, zoning approvals, engineering studies and legal fees. 
(2) EuGiBLE SPONSORS.—A loan under this subsection may be 
provided only to a community housing development organiza-
tion that has, with respect to the project concerned, site control, 
a preliminary financial commitment, and a capable develop-
ment team. 
(3) 
REPAYMENT.—A 
community 
housing 
development 
organization that receives a losin under this subsection shall 
repay the loan to the jurisdiction's HOME Investment Trust 
Fund from construction loan proceeds or other project income. 
The participating jurisdiction may waive repayment of the loan, 
in whole or in part, if there are impediments to project develop-
ment that the participating jurisdiction determines are resison-
ably beyond the control of the borrower. 
104 STAT. 4116 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 12773. 
SEC. 233. HOUSING EDUCATION AND ORGANIZATIONAL SUPPORT. 
(a) IN GENERAL.—The Secretary is authorized to provide education 
and organizational support assistance, in conjunction with other 
assistance made available under this subtitle— 
(1) to facilitate the education of low-income homeowners and 
tenants; and 
(2) to promote the ability of community housing development 
organizations to maintain, rehabilitate and construct housing 
for low-income and moderate-income families in conformance 
with the requirements of this title. 
(b) EuGiBLE ACTIVITIES.—Assistance under this section may be 
used only for the following eligible activities: 
(1) ORGANIZATIONAL SUPPORT.—Organizational support assist-
ance may be made available to community housing develop-
ment organizations to cover operational expenses and to cover 
expenses for training and technical, legal, engineering and 
other assistance to the board of directors, staff, and members of 
the community housing development organization. 
(2) HOUSING EDUCATION.—Housing education assistance may 
be made available to community housing development organiza-
tions to cover expenses for providing or administering programs 
for educating, counseling, or organizing homeowners and ten-
ants who are eligible to receive assistance under other provi-
sions of this title. 
(3) PROGRAM-WIDE SUPPORT OF NONPROFIT DEVELOPMENT AND 
MANAGEMENT.—Technical assistance, training, and continuing 
support may be made available to eligible community housing 
development organizations for managing and conserving prop-
erties developed under this title. 
(4) BENEVOLENT LOAN FUNDS.—Technical assistance may be 
made available to increase the investment of private capital in 
housing for very low-income families, particularly by encourag-
ing the establishment of benevolent loan funds through which 
private financial institutions will accept deposits at below-
market interest rates and make those funds available at favor-
able rates to developers of low-income housing and to low-
income homebuyers. 
(5) COMMUNITY DEVELOPMENT BANKS AND CREDIT UNIONS.— 
Technical assistance may be made available to establish pri-
vately owned, local community development banks and credit 
unions to finance affordable housing. 
Government 
(c) DEUVERY OF ASSISTANCE.—The Secretary shall provide this 
contracts. 
assistance only through contract— 
(1) with a nonprofit intermediary organization that, in the 
determination of the Secretary— 
(A) customarily provides, in more than one community, 
services related to the provision of decent housing that is 
affordable to low-income and moderate-income persons or 
the revitalization of deteriorating neighborhoods; 
(B) h£is demonstrated experience in providing a range of 
assistance (such as financing, technical assistance, construc-
tion and property management assistance, capacity build-
ing and trgiining) to community housing development 
organizations or similar organizations that engage in 
community revitalization; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4117 
(C) has demonstrated the ability to provide technical 
assistance and training for community-based developers of 
affordable housing; £ind 
(D) has described the uses to which such assistance will be 
put and the intended beneficiaries of the assistance; or 
(2) with another organization, if a participating jurisdiction 
demonstrates that the organization is qualified to carry out 
eligible activities and that the jurisdiction would not be served 
in a timely manner by intermediaries specified under para-
graph (1). 
Contracts under paragraph (2) shall be for activities specified in an 
application from the participating jurisdiction, which application 
shall include a certification that the activities are necessary to the 
effective implementation of the participating jurisdiction's housing 
strategy. 
(d) LIMITATIONS.—Contracts under this section with any one con-
tractor for a fiscal year may not— 
(1) exceed 20 percent of the amount appropriated for this 
section for such fiscal year; or 
(2) provide more than 20 percent of the operating budget 
(which shall not include funds that are passed through to 
community housing development organizations) of the contract-
ing organization for any one year. 
(e) SINGLE-STATE CONTRACTORS.—Not less than 40 percent of the 
funds made available for this section in an appropriations Act in 
any fiscal year shall be made available for eligible contractors that 
have worked primarily in one State. 
SEC. 234. OTHER REQUIREMENTS. 
(a) TENANT PARTICIPATION PLAN.—A community housing develop-
ment organization that receives assistance under this subtitle shall 
provide a plan for and follow a program of tenant participation in 
management decisions and shall adhere to a fair lease and grievance 
procedure approved by the participating jurisdiction. 
O
t
)
) LIMITATION ON ASSISTANCE.—A community housing develop-
ment organization may not receive assistance under this title for 
any fiscal year in an amount that, together with other Federal 
assistance, provides more than 50 percent of the organization's total 
operating budget in the fiscal year. 
(c) ADJUSTMENTS OF OTHER ASSISTANCE.—The Secretary shall take 
account of assistance provided to a project under this subtitle when 
adjusting other assistance to be provided to the project as required 
by section 102(d) of the Department of Housing and Urban Develop-
ment Reform Act of 1989. 
Subtitle C—Other Support for State and Local 
Housing Strategies 
42 use 12774. 
SEC. 241. AUTHORITY. 
The Secretary shall, insofar as is feasible through contract with 
eligible organizations, develop the capacity of participating jurisdic-
tions, State and local housing finance agencies, nonprofit organiza-
tions and for-profit corporations, working in partnership, to identify 
and meet needs for an increased supply of decent, affordable 
housing. 
42 use 12781. 
Government 
contracts. 
Nonprofit 
organizations. 
Business and 
industry. 
104 STAT. 4118 
PUBLIC LAW 101-625—NOV. 28, 1990 
Research. 
Technical 
assistance. 
42 u s e 12783. 
42 u s e 12782. 
SEC. 242. PRIORITIES FOR CAPACITY DEVELOPMENT. 
To carry out section 241, the Secretary shall provide assistance 
under this subtitle to— 
(1) facilitate the exchange of information that would help 
participating jurisdictions carry out the purposes of this title, 
including information on program design, housing finance, land 
use controls, and building construction techniques; 
(2) improve the ability of States and units of general local 
government to design and implement comprehensive housing 
affordability strategies, particularly those States and units of 
general local government that are relatively inexperienced in 
the development of affordable housing; 
Business and 
(3) encourage private lenders and for-profit developers of low-
industry, 
income housing to participate in public-private partnerships to 
achieve the purposes of this title; 
(4) improve the ability of States and units of general local 
government, community housing development organizations, 
private lenders, and for-profit developers of low-income housing 
to incorporate energy efficiency into the pl£inning, design, 
financing, construction, and operation of affordable housing; 
and 
(5) facilitate the establishment and efficient operation of em-
ployer-assisted housing programs through research, technical 
assistance and demonstration projects. 
SEC. 243. CONDITIONS OF CONTRACTS. 
(a) EuGiBLE ORGANIZATIONS.—The Secretary shall carry out this 
subtitle insofar as is practicable through contract with— 
(1) a participating jurisdiction or eigency thereof; 
(2) a public purpose organization established pursuant to 
State or local legislation and responsible to the chief elected 
official of a participating jurisdiction; 
(3) an agency or authority established by two or more partici-
pating jurisdictions to carry out activities consistent with the 
purposes of this title; 
(4) a national or regional nonprofit organization that has a 
membership comprised predominantly of entities or officials of 
entities that qualify under paragraph (1), (2), or (3); or 
(5) a professional and technical services company or firm that 
has demonstrated capacity to provide services under this sub-
title. 
(b) C!oNTRACT TERMS.—Contracts under this subtitle shall be for 
not more than 3 years £ind shall provide not more than 20 percent of 
the operating budget of the contracting organization in any one 
year. Within any fiscal year, contracts with any one organization 
may not be entered into for a total of more than 20 percent of the 
funds appropriated under this subtitle in that fiscal year. 
42 use 12784. 
SEC. 244. RESEARCH IN HOUSING AFFORDABILITY. 
The Secretary is authorized to support, through contracts with 
eligible organizations and otherwise, such research and to publish 
such reports as will assist in the achievement of the purposes of this 
title. Activities authorized by the previous sentence may include an 
ongoing analysis of the impact of public policies at the Federal, 
State, and local levels, both individually and in the aggregate, on 
the incentives to expand and maintain the supply of energy-efficient 
affordable housing in the United States, particularly in areas with 
Nonprofit 
organizations. 
Business and 
industry. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4119 
severe problems of housing affordability. For purposes of this sec-
tion, agencies of the United States, government-sponsored mortgage 
finance corporations, and qualified research organizations shall be 
included as eligible organizations in addition to eligible organiza-
tions specified under section 243. 
SEC. 245. REACH: ASSET RECYCLING INFORMATION DISSEMINATION. 
(a) IN GENERAL.—The Secretary shall make available upon re-
quest by any participating jurisdiction a list of eligible properties 
that are located within the jurisdiction and that are owned or 
controlled by the Department of Housing and Urban Development 
to facilitate the purchase, development, or rehabilitation of such 
properties with assistance made available under this title. 
(b) EuGiBLE PROPERTIES.—An eligible property under this section 
shall— 
(1) be an unoccupied single-family or multifamily dwelling, 
such that acquisition and rehabilitation of the dwelling would 
not result in the displacement of any residents of the dwelling; 
and 
(2) have an appraised value that does not exceed (A) in the 
case of a 1- to 4-family dwelling, 95 percent of the median 
purchase price for the area for such dwellings, as determined by 
the Secretary, or (B) in the case of a dwelling with more than 4 
units, the applicable maximum dollar amount limitation under 
section 221(dX3Xii) of the National Housing Act (12 U.S.C. 
1715/(dX3Xii)) for elevator-tjrpe structures. 
Subtitle D—SpeciHed Model Programs 
42 use 12785. 
SEC. 251. GENERAL AUTHORITY. 
Among the alternative model progrgims that the Secretary shall 
make available for use by participating jurisdictions under the 
provisions of section 213 shall be model programs specified in this 
subtitle. The Secretary shall keep these specified model programs 
under review and submit to Congress such recommendations for 
change as the Secretary determines to be appropriate. 
SEC. 252. RENTAL HOUSING PRODUCTION. 
(a) REPAYABLE ADVANCES.— 
(1) IN GENERAL.—The Secretary shall make available a model 
program under which repayable advances may be made to 
public and private project sponsors in constructing, acquiring, 
or substantially rehabilitating projects to be used as affordable 
rental housing, including limited equity cooperatives and 
mutual housing. 
(2) MAXIMUM AMOUNT OF ADVANCE.—An advance under this 
model program shall not exceed 50 percent of the total costs 
associated with the construction, acquisition, or substantial re-
habilitation of the project, as determined by the participating 
jurisdiction. 
(3) TERMS OF REPAYMENT.— 
(A) INTEREST PAYMENTS.— 
(i) IN GENERAL.—Under the model program, advances 
shall be repaid with interest calculated at a rate of not 
more than 3 percent per year, £is determined by the 
participating jurisdiction to be appropriate. Interest 
42 use 12801. 
42 use 12802. 
104 STAT. 4120 
PUBLIC LAW 101-625—NOV. 28, 1990 
shall begin to accrue 1 year after the completion 
of the construction, acquisition, or substantial re-
habilitation of the project and shall be payable in 
annual installments. 
(ii) EXCEPTION.—Interest and any accrued interest 
shall be payable only from the surplus cash flow of the 
project, after a minimum return on equity determined 
by the participating jurisdiction to be appropriate. As 
used in the previous sentence, the term "surplus cash 
flow" means the cash flow of the project after the 
pa3anent of all amounts due under the first mortgage, 
operating expenses, and required replacement reserves, 
as determineid by the participating jurisdiction. 
(B) ADDITIONAL INTEREST PAYMENTS.—Under the model 
program, for any year in which the sum of the surplus cash 
flow of a project and the return on equity exceeds all 
interest pajnnents due under subparagraph (A), 50 percent 
of the excess surplus cash flow shall be paid to the partici-
pating jurisdiction's HOME Investment Trust Fund as addi-
tional interest. 
(C) 
PRINCIPAL AND UNPAID INTEREST.—The principal 
amount of an advance under the model program, and any 
interest remaining unpaid pursuant to subparagraph (AXii) 
shall be repayable when the housing no longer qualities as 
affordable housing in accordance with section 219(b). 
Qo) SELECTION GUIDEUNES.— 
(1) IN GENERAL.—The Secretary shall establish guidelines for 
the selection of projects by participating jurisdictions for assist-
ance under the model program. Such guidelines shall be de-
signed to select projects in areas and for markets demonstrating 
the greatest need for the production of affordable rental 
housing. 
(2) SPECIFIC REQUIREMENTS.—The selection guidelines may 
include— 
(A) the extent of the shortage of rental housing in the 
area that is available to low-income families; 
(B) the extent large families with children will be served 
by the project; 
(C) the extent to which the project provides congregate 
facilities and has available supportive services that will 
permit elderly or handicapped residents who become frail 
and are in need of assistance in living to continue to reside 
in the project; 
(D) the extent of very low-income and low-income occu-
pancy in excess of the income targeting requirements in 
section 214; 
(E) the extent of the project sponsor's commitment of 
equity to the project (except that this criterion shall not 
apply to or affect the selection of applications submitted by 
public housing agencies and nonprofit entities); 
(F) the extent of the project sponsor's commitment of 
equity to the project in comparison to the value of all public 
£issistance for the project, including assistance under this 
title, other Federal assistance and financing, and State and 
local government contributions (except that this criterion 
shall not apply to or affect the selection of applications 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4121 
submitted by public housing agencies and 
nonprofit 
entities); 
(G) the extent of non-Federal public or private assistance 
to the project; 
(H) the extent to which the project provides supportive 
services for persons with disabilities; and 
(I) any other factor determined by the Secretary to be 
appropriate. 
(c) GuiDEUNES.—The Secretary shall publish guidelines for the 
model program under this section not later than 180 days after 
enactment of this Act. 
SEC. 253. RENTAL REHABILITATION. 
(a) IN GENERAL.—The Secretary shall make available a model 
program to support the rehabilitiation of privately owned rental 
housing located in neighborhoods where the median income does not 
exceed 80 percent of the area median as determined by the Sec-
retary and where rents can reasonably be expected not to change 
materially over an extended period of time. 
Qa) AMOUNT OF SUBSIDY.—The amount of the rehabilitation sub-
sidy shall be moderate and shall generally not exceed 50 percent of 
the total costs associated with the rehabilitation of the housing. 
(c) ADDITIONAL RESTRICTIONS.—The guidelines of the model pro-
gram shall generally comport with the additional protections and 
restrictions specified under section 17(c) of the United States Hous-
ing Act of 1937. 
SEC. 254. REHABILITATION LOANS. 
(a) IN GENERAL.—The Secretary shall make available a model 
program to provide direct loans to finance the rehabilitation of low 
and moderate income single family and multifamily residential 
properties. 
(b) CONDITION OF LOANS.—The Secretary shall establish terms and 
conditions to ensure that such loans are acceptable risks, taking into 
consideration the need for rehabilitation, the security for the loan 
and the ability of the borrower to repay the loan. The Secretary may 
establish the interest rate for loans under the model program, which 
shall include special interest rates for loans to borrowers with 
incomes below 80 percent of the area median income. 
(c) ADDITIONAL RESTRICTIONS.—Guidelines for the model program 
may require that the property— 
(1) be located in an area that contains a substantial number of 
dwellings in need of rehabilitation; 
(2) the property is residential and owner-occupied; and 
(3) the property is in need of rehabilitation or concentrated 
code enforcement within a reasonable time, and the rehabilita-
tion of such property is consistent with a local plan for re-
habilitation or code enforcement. 
Additional guidelines for the model program shall generally com-
port with the additional protections and restrictions specified under 
section 312 of the Housing Act of 1964. 
SEC. 
2
5
5
. 
SWEAT 
EQUITY 
MODEL 
PROGRAM. 
(a) IN GENERAL.—The Secretary shall make available a model 
program to provide grants to public and private nonprofit organiza-
tions and community housing development organizations to provide 
technical and supervisory assistance to low-income and very low-
42 use 12803. 
42 use 12804. 
Labor. 
42 use 12805. 
Grant programs. 
Nonprofit 
organizations. 
Homeless. 
104 STAT. 4122 
PUBLIC LAW 101-625—NOV. 28, 1990 
income families, including the homeless, in acquiring, rehabilitat-
ing, and constructing housing by the self-help housing method. 
(b) REHABIUTATION OF PROPERTIES.—The program shall target for 
rehabilitation properties which have been acquired by the Federal, 
State, or local governments. 
(c) HOMEOWNERSHIP OPPORTUNITIES THROUGH SwEAT EQUITY.— 
(1) The program shall utilize the skilled or unskilled labor of 
eligible families in exchange for acquisition of the property. 
(2) Training shall be provided to eligible families in building 
and home maintenance skills. 
(d) RENTAL OPPORTUNITIES THROUGH SWEAT EQUITY.—(1) The pro-
gram shall include rental opportunities for eligible families which 
will help expand the stock of affordable housing which is most 
appropriate for the target group. 
(2) The use of the tenant's skilled or unskilled labor shall be 
encouraged in lieu of or as a supplement to rent pajmients by the 
tenant. 
(e) DEFINITION.—The term "self-help housing" means the same as 
in section 523 of the Housing Act of 1949. 
(f) ADDITIONAL RESTRICTIONS.—The guidelines for the model pro-
gram shall generally comport with the additional protections and 
restrictions specified under section 523 of the Housing Act of 1949. 
42 u s e 12806. 
SEC. 256. HOME REPAIR SERVICES GRANTS FOR OLDER AND DISABLED 
HOMEOWNERS. 
(a) IN GENERAL.—The Secretary shall make available a model 
program to provide home repair services for older homeowners and 
disabled homeowners, including such services as the examination of 
homes, repair services, and follow-up to ensure the continued 
effectiveness of the repairs provided. 
(b) EuGiBLE RECIPIENTS.—Home repair services shall be provided 
to homeowners who— 
(1) own and reside in the dwellings for which services are 
provided; 
(2) are older or disabled; and 
(3) are members of low-income families. 
(c) PERMITTED RESTRICTIONS.—Guidelines for the model program 
shall require that— 
(1) assisted dwelling units be the primary residence of the 
homeowner for whom services are provided; 
(2) preferences be provided for (A) very low-income families, 
and (B) individuals with intense need characterized by non-
economic factors such as physical and mental disabilities, lan-
guage barriers, and cultural, social, or geographical isolation 
caused by racial or ethnic status that restricts the ability of an 
individual to perform normal daily tasks or that threatens the 
capacity of the individual to live independently; 
(3) any fees charged be based on the income of the individual 
receiving the home repair services. 
42 u s e 12807. 
SEC. 257. LOW-INCOME HOUSING CONSERVATION AND EFFICIENCY 
GRANT PROGRAMS. 
(a) IN GENERAL.—The Secretary shall make avsiilable a model 
program to provide safe, energy-efficient affordable housing for low-
income persons. 
(b) ACTIVITIES.—The model program shall provide for— 
(1) identification of housing that is— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4123 
(A) owned and occupied by low-income families who have 
received, are currently receiving, or are scheduled to re-
ceive assistance under the weatherization assistance for 
low-income persons program under part A of title IV of the 
Energy Conservation and Production Act (or a comparable 
Federal or State program); 
(B) in danger of becoming uninhabitable within a 5-year 
period because of structural weaknesses or problems; and 
(C) not sufficiently sound to permit energy conservation 
improvements without other repair or rehabilitation meas-
ures to protect such energy investments; 
(2) repairs that will significantly prolong the habitability of 
units identified under pareigraph (1), including roofing, elec-
trical, plumbing, furnace, and foundation repairs or replace-
ment that will prolong the use of the unit as a safe and 
energy-efficient residence for low-income persons; and 
(3) reEisonable steps to ensure that £iny units so repaired will 
remain occupied by persons or families eligible for assistance 
under this title. 
SEC. 258. SECOND MORTGAGE ASSISTANCE FOR FIRST-TIME HOME- 42 USC 12808. 
BUYERS. 
(a) IN GENERAL.—The Secretary shall make available a model 
program under which units of general local government provide 
loans (secured by second mortgages) with deferred pajnnent of 
interest and principal to first-time homebuyers. 
(b) HoMEOWNERSHiP CouNSEUNG.—The program under this sec-
tion shall provide for homeownership counseling to first-time home-
buyers assisted, which shall include— 
(1) counseling before and after purchase of the property; 
(2) assisting first-time homebuyers in identifjdng the most 
suitable and affordable properties; 
(3) providing 
homebuyers 
with 
financial 
management 
assistance; 
(4) assisting homebuyers in understanding mortgage trans-
actions and home sales contracts; and 
(5) assisting homebuyers with eliminating any credit prob-
lems that may prevent the homebuyers from purchasing the 
property. 
(c) EuGiBiiiTY REQUIREMENTS.—Deferred pajnnent loans secured 
by second mortgages may be provided under the model program 
under this section if— 
(1) the homebuyer assisted is a first-time homebuyer; 
(2) the property secured by the second mortgage is a single-
family residence and is the principal residence of the home-
buyer; and 
(3) the principal obligation of the deferred pajnnent loan 
secured by a second mortgage does not exceed 30 percent of the 
acquisition price of the residence to the homebuyer. 
(d) PAYMENT TERMS.— 
(1) PERIOD OF DEFERRAL.—The pajmient of any principal and 
• interest on a loan under this section shall be deferred for not 
less than the 5-year period beginning on the date of the acquisi-
tion of the residence by the homebuyer. 
(2) INTEREST RATE.—The interest rate on the unpaid balance of 
a loan under this section shall be at least 4 percent. 
39-194 O - 91 - 26 : QL 3 Part 5 
104 STAT. 4124 
PUBLIC LAW 101-625—NOV. 28, 1990 
(3) REPAYMENT PERIOD.—A deferred pa3maent loan secured by 
a second mortgage shall be repayable over the 15-year period 
beginning at the end of the deferral period. 
(e) SECURITY.—A deferred pa3anent loan assisted with amount 
provided under a grant under this section shall be secured by a lien 
on the property involved, which lien shall be subordinate to the first 
mortgage on the property. 
42 use 12809. 
SEC. 259. REHABILITATION OF STATE AND LOCAL GOVERNMENT IN REM 
PROPERTIES. 
(a) IN GENERAL.—The Secretary shall make available a model 
program under which States and units of general IOCEJ government 
may convert in rem properties to provide affordable permanent 
housing for the homeless by leasing such properties to nonprofit 
organizations and permitting such organizations to rehabilitate the 
properties. 
(b) TARGET.—The program shall target vacant properties for 
rehabilitation by nonprofit organizations. 
Subtitle E—Mortgage Credit Enhancement 
42 use 12821. 
SEC. 271. REPORT ON CREDIT ENHANCEMENT. 
(a) IN GENERAL.—The Comptroller Genersd of the United States 
shall carry out a study of ways in which financing for affordable 
housing may be made available to assist in the most efficient 
implementation of comprehensive housing affordability strategies of 
participating jurisdictions. In conducting the study, the Comptroller 
General shall draw upon the expertise of such representatives of 
State and local government. State and local housing finance agen-
cies, agencies of the United States, government-sponsored mortgage 
finance corporations, for-profit and nonprofit housing developers, 
private financial institutions, and sources of long-term mort-
gage investment, as the Comptroller General determines to be 
appropriate. 
(b) REPORT.—Not later than one year after the enactment of this 
Act, the Comptroller General shall submit to the Congress and the 
Secretary a report containing any recommendations for legislative 
or administrative actions needed to improve the availability of 
*
^ 
mortgage finance for affordable housing. The report shall include, 
but need not be limited to, an assessment of— 
(1) the need for the Department of Housing and Urban Devel-
opment or other agencies of the United States to provide partial 
credit enhancement to make financing for affordable housing 
available efficiently and at the lowest possible cost; and 
(2) alternative ways in which— 
(A) the Department could provide any needed credit 
enhancement on a one-stop basis for participating jurisdic-
tions, in coordination with other forms of assistance under 
this subtitle; 
(B) the Etepartment or other agencies of the Federal 
Government could assist government-sponsored mortgage 
finance corporations in the financing of mortgages on 
affordable housing through the development of mortgage-
backed securities that are more standardized and readily 
traded in the capital markets; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4125 
(C) the capacities of existing agencies of the United States 
could be used to provide mortgage finance more efficiently 
for affordable housing through government-sponsored mort-
gage finance corporations; and 
(D) the interests of the Federal Government could be 
protected and any risks of loss could be minimized through 
requirements for fees, mortgage insurance, risk-sharing, 
secure collateral, and guarantees by other parties, and 
through standards relating to minimum capital and prior 
experience with underwriting, origination and servicing. 
Subtitle F—General Provisions 
SEC. 281. EQUAL OPPORTUNITY. 
42 USC 12831. 
(a) SOUCITATION OF CONTRACTS.—Each participating jurisdiction 
Minorities. 
shall prescribe procedures acceptable to the Secretary to establish Women. 
and oversee a minority outreach program within each such jurisdic-
tion to ensure the inclusion, to the maximum extent possible, of 
minorities and women, and entities owned by minorities and 
women, including, without limitation, real estate firms, construction 
firms, appraisal firms, management firms, financial institutions, 
investment banking firms, underwriters, accountants, and providers 
of legal services, in all contracts, entered into by the participating 
jurisdiction with such persons or entities, public and private, in 
order to facilitate the activities of the participating jurisdiction to 
provide affordable housing authorized under this Act or any other 
Federal housing law applicable to such jurisdiction. 
(b) REPORT TO CONGRESS.—Before the end of the 180-day period 
beginning on the date the first allocation of funds is made under 
section 217, the Secretary shall submit to the Congress a report 
containing a description of the actions taken by each participating 
jurisdiction pursuant to subsection (a) and such recommendations 
for administrative and legislative action as the Secretary may deter-
mine to be appropriate to carry out the purposes of such subsection. 
SEC. 282. NONDISCRIMINATION. 
42 USC 12832. 
No person in the United States shall on the grounds of race, color, 
national origin, religion, or sex be excluded from participation in, be 
denied the benefits of, or be subjected to discrimination under any 
program or activity funded in whole or in part with funds made 
available under this title. Any prohibition against discrimination on 
the basis of age under the Age Discrimination Act of 1975 or with 
respect to an otherwise qualified handicapped individual as provided 
in section 504 of the Rehabilitation Act of 1973 shall also apply to 
any such program or activity. 
SEC. 283. ANNUAL AUDITS AND ACCOUNTABILITY. 
42 USC 12833. 
(a) INDEPENDENT AUDITS.—The Secretary, except as provided in 
paragraph O^XD, shall contract annually with an independent 
accounting firm to provide for a full financial audit of the records of 
the HOME Investment Partnerships program for each fiscal year. 
Funds available for departmental administration may be used to 
provide for such audits. Each audit shall be performed as soon as 
practicable after the close of the fiscal year and in accordance with 
generally accepted Government auditing standards approved by the 
Comptroller General of the United States (hereinafter referred to as 
104 STAT. 4126 
PUBLIC LAW 101-625—NOV. 28, 1990 
Reports. 
Reports. 
42 use 12834. 
42 use 12835. 
42 use 12836. 
Government 
contracts. 
Wages. 
the "Comptroller General"), and shall be consistent with the 
requirements of sections 9105 and 9106 of title 31, United States 
Code. The Secretary shall promptly submit the report of the 
independent accounting firm to the Congress, consistent with the 
requirements of section 9106 of title 31, United States Code, and 
such report shall be published. The requirement for an audit under 
this section shall be in lieu of the requirement for an audit by the 
Comptroller General under section 9105(a) of title 31, United States 
Code, 
(b) AUDITS BY THE COMPTROLLER GENERAL.— 
(1) AUDITS OF THE HOME INVESTMENT PARTNERSHIPS PRO-
GRAM.—The Comptroller General, when the Comptroller Gen-
eral deems it to be appropriate or when requested by the 
Committee on Banking, Housing, and Urban Affairs of the 
Senate or the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives, shall conduct a full 
financial audit of the records of the HOME Investment Partner-
ships program for any fiscal year. The initiation of an audit for 
a fiscal year under the previous sentence shsdl obviate the 
requirement for an audit by an independent accounting firm 
under paragraph (a) for that fiscal year. The report of the 
Comptroller General shall be submitted promptly to the Sec-
retary and the Congress and shall be published. 
(2) AUDITS OF RECIPIENTS.—The financial transactions of 
participating jurisdictions and of other recipients of funds pro-
vided under this title may, insofar as they relate to funds 
provided under this title, be audited by the General Accounting 
Office under such rules and regulations as may be prescribed by 
the Comptroller General of the United States. The representa-
tives of the General Accounting Office shall have access to all 
books, accounts, records, reports, files, and other papers, things, 
or property belonging to or in use by such recipients pertaining 
to such financial transactions and necessary to facilitate the 
audit. 
SEC. 284. UNIFORM RECORDKEEPING AND REPORTS TO THE CONGRESS. 
(a) UNIFORM REQUIREMENTS.—The Secretary shall develop £uid 
establish uniform recordkeeping, performance reporting, and audit-
ing requirements for use by participating jurisdictions. 
Ot)) REPORT TO THE CONGRESS.—Not later than 120 days after the 
end of each fiscal year, the Secretary shall make an annual report to 
the Congress that summarizes and assesses the results of reports 
provided under this section. Such report shall include a description 
of actions taken by each participating jurisdiction pursuant to sec-
tion 281(a) and such recommendations for administrative and legis-
lative action as may be appropriate to carry out the purposes of such 
section. 
SEC. 285. CITIZEN PARTICIPATION. 
The Secretary shall ensure that each participating jurisdiction, 
and each jurisdiction seeking to become a participating jurisdiction, 
complies with the requirements of section 107 of this Act. 
SEC. 286. LABOR. 
(a) IN GENERAL.—Any contract for the construction of affordable 
housing with 12 or more units assisted with funds made available 
under this subtitle shall contain a provision requiring that not less 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4127 
than the wages prevailing in the locality, as predetermined by the 
Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 
276a—276a-5), shall be paid to all laborers and mechanics employed 
in the development of affordable housing involved, and participating 
jurisdictions shall require certification as to compliance with the 
provisions of this section prior to making any payment under such 
contract. 
(b) WAIVER.—Subsection (a) shall not apply if the individual re-
ceives no compensation or is paid expenses, reasonable benefits, or a 
nominal fee to perform the services for which the individual volun-
teered and such persons are not otherwise employed at any time in 
the construction work. 
SEC. 287. INTERSTATE AGREEMENTS. 
42 USC 12837. 
The consent of the Congress is hereby given to any two or more 
States to enter into agreements or compacts, not in conflict with any 
law of the United States, for cooperative efforts and mutual assist-
ance in support of activities authorized under this title as they 
pertain to interstate areas and to localities within such States, and 
to establish such agencies, joint or otherwise, as they may deem 
desirable for making such agreements and compacts effective. 
SEC. 288. ENVIRONMENTAL REVIEW. 
42 USC 12838. 
(a) IN GENERAL.—In order to assure that the policies of the 
National Environmental Policy Act of 1969 and other provisions of 
law which further the purposes of such Act (as specified in regula-
tions issued by the Secretary) are most effectively implemented in 
connection with the expenditure of funds under this title, and to 
assure to the public undiminished protection of the environment, 
the Secretary, in lieu of the environmental protection procedures 
otherwise applicable, may under regulations provide for the release 
of funds for particular projects to participating jurisdictions under 
this title who assume all of the responsibilities for environmental 
review, decisionmaking, and action pursuant to such Act, and such 
other provisions of law as the regulations of the Secretary specify, 
that would apply to the Secretary were he to undertake such 
projects as Federal projects. The Secretary shall issue regulations to Regulations. 
carry out this section only after consultation with the Council on 
Environmental Quality. 
(b) PROCEDURE.—The Secretary shall approve the release of funds 
subject to the procedures authorized by this section only if, at least 
15 days prior to such approval and prior to any commitment of 
funds to such projects the participating jurisdiction has submitted to 
the Secretary a request for such release accompanied by a certifi-
cation which meets the requirements of subsection (c). The Sec-
retary's approval of any such certification shall be deemed to satisfy 
his responsibilities under the National Environmental Policy Act of 
1969 and such other provisions of law as the regulations of the 
Secretary specify insofar as those responsibilities relate to the re-
lesises of funds for projects to be carried out pursuant thereto which 
are covered by such certification. 
(c) CERTIFICATION.—A certification under the procedures au-
thorized by this section shall— 
(1) be in a form acceptable to the Secretary, 
(2) be executed by the chief executive officer or other officer of 
the recipient of assistance under this title qualified under regu-
lations of the Secretary, 
104 STAT. 4128 
PUBLIC LAW 101-625—NOV. 28, 1990 
(3) specify that the recipient of assistance under this title has 
fully carried out its responsibilities as described under subsec-
tion (a), and 
Regulations. 
(4) specify that the certifying officer (A) 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 Secretary insofar as the 
provisions of such Act or other such provision of law apply 
pursuant to subsection (a), and (B) is authorized and consents on 
behalf of the participating jurisdiction and himself to accept the 
jurisdiction of the Federal courts for the purpose of enforcement 
of his responsibilities as such an official. 
(d) ASSISTANCE TO A STATE.—In the case of assistance to States, the 
State shall perform those actions of the Secretary described in 
subsection (b) and the performance of such actions shall be deemed 
to satisfy the Secretary's responsibilities referred to in the second 
sentence of such subsection. 
42 use 12839. 
SEC. 289. TERMINATION OF EXISTING HOUSING PROGRAMS. 
(a) IN GENERAL.—Except with respect to projects and programs for 
which binding commitments have been entered into prior to 
October 1, 1991, no new grants or loans shall be made after 
October 1,1991, under— 
(1) section 17 of the United States Housing Act of 1937; 
(2) section 312 of the Housing Act of 1964; 
(3) title VI of the Housing and Community Development Act 
of 1987; 
(4) section 8(eX2) of the United States Housing Act of 1937, 
except for funds allocated under such section for single room 
occupancy dwellings as authorized by title IV of the Stewart B. 
McKinney Homeless Assistance Act; and 
(5) section 810 of the Housing and Community Development 
Act of 1974. 
(b) REPEALS.— 
(1) IN GENERAL.—Except EIS provided in paragraph (2), effec-
tive on October 1, 1991, the provisions of law referred to in 
subsection (a) are repealed. 
(2) No EFFECT ON SRO PROGRAM.—The provision of law referred 
to in subsection (a)(4) shall remain in effect with respect to 
single room occupancy dwellings as authorized by title IV of the 
Stewart B. McKinney Homeless Assistance Act. 
(c) DISPOSITION OF REPAYMENTS.—Any amounts received on or 
after October 1, 1991, as repayments or recaptures in connection 
with the programs referred to in subsection (a) and any other 
amounts for such programs that remain or become unobligated on 
or after such date, shall be paid into the general fund of the 
Treasury. 
PUBLIC LAW 101-625—NOV. 28, 1990 
TITLE III—HOMEOWNERSHIP 
104 STAT. 4129 
Subtitle A—National Homeownership Trust 
^
^
*
^
°
"
^
i 
Demonstration 
Homeownership 
Trust Act. 
SEC. 301. SHORT TITLE, 
This subtitle may be cited as the "National Homeownership Trust 
Act". 
SEC. 302. NATIONAL HOMEOWNERSHIP TRUST. 
(a) 
EsTABUSHMENT.—There 
is 
established 
the 
National 
Homeownership Trust, which shall be in the Department of Housing 
£ind Urban Development and shall provide assistance to first-time 
homebuyers in accordance with this subtitle. 
(b) BOARD OF DIRECTORS.—The Trust shall be governed by a Board 
of Directors, which shall be composed of— 
(1) the Secretary of Housing and Urban Development, who 
shall be the chairperson of the Board; 
(2) the Secretary of the Treasury; 
(3) the chairperson of the Board of Directors of the Federal 
Deposit Insurance Corporation; 
(4) the chairperson of the Federal Housing Finance Board; 
(5) the chairperson of the Board of Directors of the Federal 
National Mortgage Association; 
(6) the chairperson of the Board of Directors of the Federal 
Home Loan Mortgage Corporation; and 
(7) 1 individual representing consumer interests, who shall be 
appointed by the President of the United States, by and with 
the advice and consent of the Senate. 
(c) POWERS OF TRUST.—The Trust shall have the same powers as 
the powers given the Government National Mortgage Association in 
section 309(a) of the Federal National Mortgage Association Charter 
Act(12U.S.C. 1723a(a)). 
(d) TRAVEL AND PER DIEM.—Members of the Board of Directors 
shall receive no additional compensation by reason of service on the 
Board, but shall be allowed travel expenses, including per diem in 
lieu of subsistence, as provided for employees of the Federal Govern-
ment or in the same manner as persons employed intermittently in 
the Government service are allowed under section 5703 of title 5, 
United States Code, as appropriate. 
(e) DIRECTOR AND STAFF.— 
(1) DIRECTOR.—The Board of Directors may appoint an execu-
tive director of the Trust and fix the compensation of the 
executive director, which shall be paid from amounts in the 
National Homeownership Trust Fund. 
(2) STAFF.—Subject to such rules as the Board of Directors 
may prescribe, the Trust may appoint and hire such staff and 
provide for offices as may be necessary to carry out its duties. 
The Trust may fix the compensation of the staff, which shall be 
paid from amounts in the National Homeownership Trust 
Fund. 
42 use 12701 
note. 
42 use 12851. 
104 STAT. 4130 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 12852. 
SEC. 303. ASSISTANCE FOR FIRST-TIME HOMEBUYERS. 
(a) IN GENERAL.—The Trust shall provide assistance pa3anents for 
first-time homebuyers (including homebuyers bujdng shares in lim-
ited equity cooperatives) in the following manners: 
(1) INTEREST RATE BUYDOWNS.—Assistance payments so that 
the rate of interest payable on the mortgages by the home-
buyers does not exceed 6 percent. 
(2) DOWNPAYMENT ASSISTANCE.—Assistance payments to pro-
vide amounts for downpayments (including closing costs and 
other costs payable at the time of closing) on mortgages for such 
homebuyers. 
(b) EuGiBiuTY REQUIREMENTS.—Assistance payments under this 
subtitle may be made only to homebuyers and for mortgages meet-
ing the following requirements: 
(1) FIRST-TIME HOMEBUYER.—The homebuyer is an individual 
who— 
(A) (and whose spouse) has had no ownership in a prin-
cipal residence during the 3-year period ending on the date 
of purchase of the property with respect to which assistance 
pa5anents are made under this subtitle; 
(B) is a displaced homemaker who, except for owning a 
home with his or her spouse or residing in a home owned by 
the spouse, meets the requirements of subparagraph (A); or 
(C) is a single parent who, except for owning a home with 
his or her spouse or residing in a home owned by the spouse 
while married, meets the requirements of subparagraph 
(A). 
(2) MAXIMUM INCOME OF HOMEBUYER.—The aggregate annual 
income of the homebuyer and the members of the family of the 
homebuyer residing with the homebuyer, for the 12-month 
period preceding the date of the application of the homebuyer 
for assistance under this subtitle, does not exceed— 
(A) 95 percent of the median income for a family of 4 
persons (adjusted by family size) in the applicable metro-
politan statistical area (or such other area that the Board of 
Directors determines for areas outside of metropolitan 
statistical areas); or 
(B) 115 percent of such median income (adjusted by 
family size) in the case of an area that is subject to a high 
cost area mortgage limit under title II of the National 
Housing Act. 
The Board of Directors shall provide for certification of such 
income for purposes of initial eligibility for assistance pajnnents 
under this subtitle and shall provide for recertification of home-
buyers (and families of homebuyers) so assisted not less than 
every 2 years thereafter. 
(3) CERTIFICATION.—The homebuyer (and spouse, where ap-
plicable) shall certify that the homebuyer has made a good faith 
effort to obtain a market rate mortgage and has been denied 
because the annual income of the homebuyer and the members 
of the family of the homebuyer residing with the homebuyer is 
insufficient. 
(4) PRINCIPAL RESIDENCE.—The property securing the mort-
gage is a single-family residence or unit in a cooperative and is 
the principal residence of the homebuyer. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4131 
(5) MAXIMUM MORTGAGE AMOUNT.—The principal obligation 
of the mortgage does not exceed the principad amount that could 
be insured with respect to the property under the National 
Housing Act. 
(6) MAXIMUM INTEREST RATE.—The interest payable on the 
mortgage is established at a fixed rate that does not exceed a 
maximum rate of interest established by the Trust taking into 
consideration prevailing interest rates on similar mortgages. 
(7) RESPONSIBLE MORTGAGEE.—The mortgage has been made 
to, and is held by, a mortgagee that is federally insured or that 
is otherwise approved by the Trust as responsible and able to 
service the mortgage properly. 
(8) MINIMUM DOWNPAYMENT.—For a first-time homebuyer to 
receive downpayment assistance under subsection (aX2), the 
homebuyer shall have paid not less than 1 percent of the cost of 
acquisition of the property (excluding any mortgage insurance 
premium paid at the time the mortgage is insured), as such cost 
is estimated by the Board of Directors. 
(c) TERMS OF ASSISTANCE.— 
(1) SECURITY.—Assistance payments under this subtitle shall 
be secured by a lien on the property involved. The lien shall be 
subordinate to all mortgages existing on the property on the 
date on which the first assistance pa5rment is made. 
(2) REPAYMENT UPON SALE.—Assistance payments under this 
subtitle shall be repayable from the net proceeds of the sale, 
without interest, upon the sale of the property for which the 
£issistance payments are made. If the sale results in no net 
proceeds or the net proceeds are insufficient to repay the 
amount of the assistance payments in full, the Board of Direc-
tors shall release the lien to the extent that the debt secured by 
the lien remains unpaid. 
(3) REPAYMENT UPON INCREASED INCOME.—If the aggregate 
annual income of the homebuyer (and family of the homebuyer) 
assisted under this subtitle exceeds the applicable maximum 
income allowable under subsection (bX2) for any 2-year period 
after such assistance is provided, the Board of Directors may 
provide for the repayment, on a monthly basis, of Eill or a 
portion of such assistance payments, based on the amount of 
assistance provided and the income of the homebuyer (and 
family of the homebuyer). 
(4) REPAYMENT IF PROPERTY CEASES TO BE PRINCIPAL RESI-
DENCE.—If the property for which assistance pa3rments are 
made ceases to be the principal residence of the 
first-time 
homebuyer (or the family of the homebuyer), the Board of 
Directors may provide for the repayment of all or a portion of 
the assistance payments. 
(5) AVAILABLE ASSISTANCE.—The Trust may make assistance 
payments under paragraphs (1) and (2) of subsection (a) with 
respect to a single mortgage of an eligible homebuyer. 
(d) ALLOCATION FORMULA.—Amounts available in any fiscal year 
for assistance under this subtitle shall be allocated for homebuyers 
in each State on the basis of the need of eligible first-time home-
buyers in each State for such assistance in comparison with the need 
of eligible first-time homebuyers for such assistance among all 
States. 
104 STAT. 4132 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 12853. 
SEC. 304. NATIONAL HOMEOWNERSHIP TRUST FUND. 
(a) EsTABUSHMENT.—There is established in the Treasury of the 
United States a revolving fund, to be known as the National 
Homeownership Trust Fund. 
(b) ASSETS.—The Fund shall consist of— 
(1) any amount approved in appropriation Acts under section 
308 for purposes of carrjdng out this subtitle; 
(2) any amount received by the Trust as repa5rment for pay-
ments made under this subtitle; and 
(3) any amount received by the Trust under subsection (d). 
(c) USE OF AMOUNTS.—The Fund shall, to the extent approved in 
appropriations Acts, be available to the Trust for purposes of carry-
ing out this subtitle. 
(d) INVESTMENT OF EXCESS AMOUNTS.—Any amounts in the Fund 
determined by the Trust to be in excess of the amounts currently 
required to carry out the provisions of this subtitle shall be invested 
by the Trust in obligations of, or obligations guaranteed as to both 
principal and interest by, the United States or any sigency of the 
United States. 
(e) DEMONSTRATION PROGRAMS.—Using not more than $20,000,000 
of any amounts appropriated for the Fund under section 308 in 
fiscal year 1991, the Secretary shall carry out demonstration pro-
grams for combining housing activities and economic development 
activities, as follows: 
(1) In Milwaukee, Wisconsin, in an amount not to exceed 
$4,200,000, for development, rehabilitation, and revitalization of 
2 vacant structures in a blighted minority neighborhood. 
(2) In Washington, District of Columbia, in an amount not to 
exceed $10,000,000, for nonprofit neighborhood-based groups to 
acquire and rehabilitate vacant public and private housing for 
resale or rent to low- and moderate-income families and to the 
extent of and subject to engage in neighborhood-based economic 
development activities. 
(3) In Philadelphia, Pennsylvania, in an amount not to exceed 
$1,000,000, for technical assistance and organizational support 
for a community development corporation that is a city-wide 
public/private partnership engaged in the provision of tech-
nical assistance to neighborhood community development 
corporations. 
(4) In other areas, as the Secretary may determine. 
42 u s e 12854. 
SEC. 305. DEFINITIONS. 
For purposes of this subtitle: 
(1) BOARD OF DIRECTORS.—The term "Board of Directors" or 
"Board" means the Board of Directors of the National 
Homeownership Trust under section 3020t)). 
(2) DISPLACED HOMEMAKER.—The term "displaced home-
maker" means an individual who— 
(A) is an adult; 
(B) has not worked full-time full-year in the labor force 
for a number of years, but has during such years, worked 
primarily without remuneration to care for the home and 
family; and 
(C) is unemployed or underemployed and is experiencing 
difficulty in obtaining or upgrading emplojonent. 
(3) 
FUND.—The 
term 
Fund" 
means 
the 
National 
Homeownership Trust Fund established in section 304. 
Wisconsin. 
District of 
Columbia. 
Pennsylvania. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4133 
(4) SINGLE PARENT.—The term "single parent" means an 
individual who— 
(A) is unmarried or legally separated from a spouse; and 
(BXi) has 1 or more minor children for whom the individ-
ual has custody or joint custody; or 
(ii) is pregnant. 
(5) STATE.—The term "State" means the States of the United 
States, the District of Columbia, the Commonwealth of Puerto 
Rico, the Commonwealth of the Northern Mariana Islands, 
Guam, the Virgin Islands, American Samoa, the Trust Territory 
of the Pacific Islands, and any other territory or possession of 
the United States. 
(6) 
TRUST.—The 
term 
"Trust" 
means 
the National 
Homeownership Trust established in section 302. 
SEC. 306. REGULATIONS. 
42 USC 12855. 
The Board of Directors shall issue any regulations necessary to 
carry out this subtitle. 
SEC. 307. REPORT. 
42 USC 12856. 
The Board of Directors shall submit to the Congress, not later 
than the expiration of the 90-day period beginning on the date of the 
termination of the Trust under section 310, a report containing a 
description of the activities of the Trust and an analysis of the 
effectiveness of the Trust in assisting first-time homebuyers. 
SEC. 308. AUTHORIZATION OF APPROPRIATIONS. 
42 USC 12857. 
There are authorized to be appropriated to carry out this subtitle 
$250,000,000 for fiscal year 1991 and $521,500,000 for fiscal year 
1992. Any amount appropriated under this section shall be deposited 
in the Fund and remain available until expended, subject to the 
provisions of section 309. 
SEC. 309. TRANSITION. 
42 USC 12858. 
(a) AUTHORITY OF SECRETARY.—Upon the termination of the Trust 
as provided in section 310, the Secretary of Housing and Urban 
Development shall exercise any authority of the Board of Directors 
and the Trust in accordance with the provisions of this subtitle £is 
may be necessary to provide for the conclusion of the outstanding 
affairs of the Trust. 
(b) APPUCABIUTY OF TRUST PROVISIONS.—Any assistance under 
this subtitle shall, after termination of the Trust, be subject to the 
provisions of this subtitle that would have applied to such assistance 
if the termination had not occurred. 
(c) CERTIFICATION OF FUND TO TREASURY.—Upon a determination 
by the Secretary of Housing and Urban Development that the 
National Homeownership Trust Fund is no longer necessary, the 
Secretary shall certify any emiounts remaining in the Fund to the 
Secretary of the Treasury and the Secretary of the Treasury shall 
deposit into the general fund of the Treasury as miscellaneous 
receipts any amounts remaining in the Fund. 
SEC. 310. TERMINATION. 
42 USC 12859. 
The Trust shall terminate on September 30,1993. 
104 STAT. 4134 
PUBLIC LAW 101-625—NOV. 28, 1990 
Subtitle B—FHA and Secondary Mortgage 
Market 
SEC. 321. LIMITATION ON FHA INSURANCE AUTHORITY. 
Section 531(b) of the National Housing Act (12 U.S.C. 1735f-9(b)) is 
amended to read as follows: 
"(b) Notwithstanding any other provision of law and subject only 
to the absence of qualified requests for insurance, to the authority 
provided in this Act, and to the limitation in subsection (a), the 
Secretary shall enter into commitments to insure mortgages under 
this Act with an aggregate principal amount of $76,791,000,000 
during fiscal year 1991 and $79,818,000,000 during fiscal year 1992.". 
SEC. 322. APPRAISAL SERVICES. 
Section 202(e) of_the National Housing Act (12 U.S.C. 1708(e)) is 
amended by adding at the end the following new paragraphs: 
"(3) DIRECT ENDORSEMENT PROGRAM.— 
"(A) Any mortgagee that is authorized by the Secretary to 
process mortgages as a direct endorsement mortgagee (pursuant 
to the single-family home mortgage direct endorsement pro-
gram established by the Secretary) may contract with an ap-
praiser chosen at the discretion of the mortgagee for the 
performance of appraisals in connection with such mortgages. 
Such appraisers may include appraisal companies organized as 
corporations, partnerships, or sole proprietorships. 
"(B) Any appraisal conducted pursuant to subparagraph (A) 
shall be conducted by an individual who complies with the 
qualifications or standards for appraisers established by the 
Secretary pursuant to section 202(e) of the National Housing 
Act. 
"(C) In conducting an appraisal, such individual may utilize 
the assistance of others, who shall be under the direct super-
vision of the individual responsible for the appraisal. The 
individual responsible for the appraisal shall 
personally 
approve and sign any appraisal report. 
"(4) FEE PANEL APPRAISERS.— 
"(A) Any individual who is an employee of an appraisal 
company (including any company organized as a corporation, 
partnership, or sole proprietorship) and who meets the quali-
fications or standards for appraisers and inclusion on appraiser 
fee panels established by the Secretary, shall be eligible for 
assignment to conduct appraisals for mortgages under this title 
in the same manner and on the same basis as other approved 
appraisers. 
"(B) With respect to any employee of an appraisal company 
described in subparagraph (A) who is offered an appraisal 
assignment in connection with a mortgage under this title, the 
person utilizing the appraiser may contract directly with the 
appraisal company emplojdng the appraiser for the furnishing 
of the appraisal services.". 
SEC. 323. INCREASE IN MORTGAGE LIMIT. 
Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(bX2)) 
is amended by striking "150 percent (185 percent until October 31, 
PUBLIC LAW 101-625-NOV. 28, 1990 
104 STAT. 4135 
1990) of the dollar amount specified" and inserting the following: 
"185 percent of the dollar amount specified". 
SEC. 324. MORTGAGOR EQUITY. 
Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(bX2)) 
is amended by adding at the end the following new undesignated 
paragraph: 
"Notwithstanding any other provision of this paragraph, a mort-
gage may not involve a principal obligation (including such initial 
service charges, appraisal, inspection, and other fees as the Sec-
retary shall approve) in excess of 98.75 percent of the appraised 
value of the property (97.75 percent, in the case of a mortgage with 
an appraised value in excess of $50,000), plus the amount of the 
mortgage insurance premium paid at the time the mortgage is 
insured. For purposes of the preceding sentence, the term 'appraised 
value' means the amount set forth in the written statement required 
under section 226, or a similar amount determined by the Secretary 
if section 226 does not apply.". 
SEC. 325. MORTGAGE INSURANCE PREMIUMS. 
(a) PREMIUMS.—Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)) is amended— 
(1) by inserting "(1)" after "(c)"; 
(2) by striking the last sentence; and 
(3) by adding at the end the following new paragraph: 
"(2) Notwithstanding any other provision of this section, each 
mortgage secured by a 1- to 4-family dwelling and executed on or 
after October 1, 1994, that is an obligation of the Mutual Mortgage 
Insurance Fund, shall be subject to the following requirements: 
"(A) The Secretary shall establish and collect, at the time of 
insurance, a single premium payment in an amount equal to 
2.25 percent of the amount of the original insured principal 
obligation of the mortgage. Upon payment in full of the prin-
cipal obligation of a mortgage prior to the maturity date of the 
mortgage, the Secretary shall refund all of the unearned 
premium charges paid on the mortgage pursuant to this 
subparagraph. 
"(B) In addition to the premium under subparagraph (A), the 
Secretary shall establish and collect annual premium payments 
in an amount equal to 0.50 percent of the remaining insured 
principal balance (excluding the portion of the remaining bal-
ance attributable to the premium collected under subparagraph 
(A) and without taking into account delinquent payments or 
prepayments) for the following periods: 
"(i) For any mortgage involving an original principal 
obligation 
(excluding 
any 
premium 
collected 
under 
subparagraph (A)) that is less than 90 percent of the ap-
praised value of the property (as of the date the mortgage is 
accepted for insurance), for the first 11 years of the mort-
gage term. 
"(ii) For any mortgage involving an original principal 
obligation 
(excluding 
any 
premium 
collected 
under 
subparagraph (A)) that is greater than or equal to 90 per-
cent of such vsdue, for the first 30 years of the mortgage 
term; except that notwithstanding the matter preceding 
clause (i), for any mortgage involving an original principsd 
obligation 
(excluding 
any 
premium 
collected 
under 
104 STAT. 4136 
PUBLIC LAW 101-625—NOV. 28, 1990 
subparagraph (A)) that is greater than 95 percent of such 
value, the annual premium collected during the 30-year 
period under this clause shall be in an amount equal to 0.55 
percent of the remaining insured principal balance (exclud-
ing the portion of the remaining balance attributable to the 
premium collected under subparagraph (A) and without 
taking into account delinquent payments or prepay-
ments).". 
0?) TRANSITION PROVISIONS.—Notwithstanding section 203(c) of the 
National Housing Act (as amended by subsection (a)), mortgage 
insurance premiums on mortgages executed during fiscal years 1991 
through 1994 and that are obligations of the Mutual Mortgage 
Insurance Fund shall be subject to the following requirements: 
(1) 1991 AND 1992.—For mortgages executed during fiscal 
years 1991 and 1992 (but after the date of the effectiveness of 
regulations issued under subsection (c)), the Secretary shall 
establish and collect the following premiums: 
(A) UP-FRONT.—At the time of insurance, a single pre-
mium pa5mient in an amount equal to 3.80 percent of the 
amount of the original insured principal obligation of the 
mortgage. 
(B) ANNUAL.—In addition to the premium under subpara-
graph (A), annual premium payments in an amount equal 
to 0.50 percent of the remaining insured principal balance 
(excluding the portion of the remaining balance attrib-
utable to the premium collected under subparagraph (A) 
and without taking into account delinquent payments or 
prepayments), for any mortgage involving an original prin-
cipal obligation (excluding any premium collected under 
subparagraph (A)) that is— 
(i) less than 90 percent of the appraised value of the 
property (as of the date the mortgage is accepted for 
insurance), for the first 5 years of the mortgage term; 
(ii) greater than or equal to 90 percent of such value 
but equal to or less than 95 percent of such value, for 
the first 8 years of the mortgage term; and 
(iii) greater than 95 percent of such value, for the 
first 10 years of the mortgage term. 
(2) 1993 AND 1994.—For mor^ages executed during fiscal 
years 1993 and 1994, the Secretary shall establish and collect 
the following premiums: 
(A) UP-FRONT.—At the time of insurance, a single pre-
mium pajrment in an amount equal to 3.00 percent of the 
amount of the original insured principal obligation of the 
mortgage. 
(B) ANNUAL.—In addition to the premium under subpara-
graph (A), annual premium pa3mients in an amount equal 
to 0.50 percent of the remaining insured principal balance 
(excluding the portion of the remeiining balance attrib-
utable to the premium collected under subparagraph (A) 
and without taking into account delinquent payments or 
prepayments), for any mortgage involving an original prin-
cipal obligation (excluding any premium collected under 
subparagraph (A) that is— 
(i) less than 90 percent of the appraised value of the 
property (as of the date the mortgage is accepted for 
insurance), for the first 7 years of the mortgage term; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4137 
(ii) greater than or equal to 90 percent of such value 
but equal to or less than 95 percent of such value, for 
the first 12 years of the mortgage term; and 
(iii) greater than 95 percent of such value, for the 
first 30 years of the mortgage term. 
(3) REFUNDS.—With respect to any mortgage subject to pre-
miums under this subsection, the Secretary shall refund all of 
the unearned premium charges paid on a mortgage pursuant to 
paragraph (1)(A) or (2)(A) upon payment in full of the principal 
obligation of the mortgage prior to the maturity date. 
(c) REGULATIONS.—The Secretary shall issue regulations to carry 
out this section and the amendments made by this section not later 
than the expiration of the 90-day period beginning on the date of the 
enactment of this Act. 
SEC. 326. LIMITATION ON SECONDARY RESIDENCES. 
(a) LIMITATION ON SECONDARY RESIDENCES.—Section 203(g)(1) of 
the National Housing Act (12 U.S.C. 1709(g)(1)) is amended by 
inserting after the period at the end the following new sentence: "In 
making this determination with respect to the occupancy of second-
ary residences, the Secretary may not insure mortgages with respect 
to such residences unless the Secretary determines that it is nec-
essary to avoid undue hardship to the mortgagor. In no event may a 
secondary residence under this subsection include a vacation home, 
as determined by the Secretary.". 
(b) APPUCABILITY.—The amendments made by subsection (a) shall 
12 USC 1709 
apply only with respect to— 
note. 
(1) mortgages insured— 
(A) pursuant to a conditional commitment issued after 
the expiration of the 60-day period beginning on the date of 
the enactment of this Act; or 
(B) in accordance with the direct endorsement program, if 
the approved underwriter of the mortgages signs the ap-
praisal report for the property after the expiration of the 
60-day period beginning on the date of the enactment of 
this Act; and 
(2) the approval of substitute mortgagors, if the original mort-
gagor was subject to such amendments. 
(c) TRANSITION PROVISIONS.—Any mortgage insurance provided 
12 use 1709 
under title II of the National Housing Act before the expiration of note. 
the 60-day period beginning on the date of the enactment of this Act, 
shall continue to be governed (to the extent applicable) by the 
provisions of section 203(g)(1) of the National Housing Act, as such 
provisions existed before the date of the enactment of this Act. 
SEC. 327. MORTGAGE COUNSELING FOR DELINQUENT MORTGAGORS. 
Section 203(r) of the National Housing Act (12 U.S.C. 1709(r)) is 
amended— 
(1) by striking "and" at the end of paragraph (2); 
(2) by striking the period at the end of paragraph (3) and 
inserting "; and"; and 
(3) by adding at the end the following new paragraph: 
"(4) providing counseling, either directly or through third 
parties, to delinquent mortgagors whose mortgages are insured 
under this section 203 (12 U.S.C. 1709), using the Fund to pay for 
such counseling.". 
104 STAT. 4138 
PUBLIC LAW 101-625—NOV. 28, 1990 
Mortgage 
SEC. 328. DELEGATION OF PROCESSING. 
insurance. 
12 use 1713 
(a) AUTHORITY.—Not later than the expiration of the 60-day period 
note. 
beginning on the date of enactment this Act, the Secretary of 
Housing and Urban Development shall implement a system of 
mortgage insurance for mor^ages insured under section 207, 221, 
223, 232, or 241 of the National Housing Act that delegates process-
ing functions to selected approved mortgagees. Under such system, 
the Secretary shall retain the authority to approve rents, expenses, 
property appraisals, and mortgsige amounts and to execute a firm 
commitment. 
(b) FULL INSURANCE PROGRAM.—Notwithstanding subsection (a), 
the Secretary shall maintain a viable system for full insurance 
programs under such Act under which all processing functions are 
performed by officers and employees of the Department of Housing 
and Urban Development. 
SEC. 329. DISCLOSURE REGARDING INTEREST DUE UPON MORTGAGE 
PREPAYMENT. 
Section 203 of the National Housing Act (12 U.S.C. 1709), as 
amended by the preceding provisions of this Act, is further amended 
by adding at the end the following new subsection: 
"(s)(l) Each mortgagee (or servicer) with respect to a mortgage 
under this section shall provide each mortgagor of such mortgagee 
(or servicer) written notice, not less than annually, containing a 
statement of the amount outstanding for prepayment of the prin-
cipal amount of the mortgage and describing any requirements the 
mortgagor must fulfill to prevent the accrual of any interest on such 
principal amount after the date of any prepajnnent. This pareigraph 
shall apply to any insured mortgage outstanding on or after the 
expiration of the 90-day period beginning on the date of effective-
ness of final regulations implementing this paragraph. 
"(2) Each mortgagee (or servicer) with respect to a mortgage under 
this section shall, at or before closing with respect to any such 
mortgage, provide the mortgagor with written notice (in such form 
as the Secretary shall prescribe, by regulation, before the expiration 
of the 90-day period beginning upon the date of the enactment of the 
Cranston-Gonzalez National Affordable Housing Act) describing any 
requirements the mortgagor must fulfill upon prepayment of the 
principal amount of the mortgage to prevent the accrual of any 
interest on the principal amount after the date of such prepa3nnent. 
This paragraph shall apply to any mortgEige executed after the 
expiration of the period under paragraph (1).". 
SEC. 330. ACCOUNTABILITY OF MORTGAGE LENDERS. 
(a) LIMITATION ON TIERED PRICING PRACTICES.—Section 203 of the 
National Housing Act (12 U.S.C. 1709), as amended by the preceding 
provisions of this Act, is further amended by adding at the end the 
following new subsection: 
"(tXD No mortgagee may make or hold mortgages insured under 
this section if the customary lending practices of the mortgagee, as 
determined by the Secretary pursuant to section 539, provide for a 
variation in mortgage charge rates that exceeds 2 percent for in-
sured mortgages made by the mortgagee on dwellings located within 
an area. The Secretary shall ensure that any permissible variations 
in the mortgage charge rates of any mortgagee are based only on 
actual variations in fees or costs to the mortgagee to make the loan. 
"(2) For purposes of this subsection— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4139 
"(A) the term 'area' shall have the meaning given the term 
under subsection (bX2); 
"(B) the term 'mortgage charges' includes the interest rate, 
discount points, loan origination fee, and any other amount 
charged to a mortgagor with respect to an insured mortgage; 
and 
"(C) the term 'mortgEige charge rate' means the amount of 
mortgage charges for an insured mortgage expressed as a 
percentage of the initial principal amount of the mortgage.". 
(b) SANCTIONS OF MORTGAGEES.—Title V of the National Housing 
Act (12 U.S.C. 1701 et seq.) is amended by adding at the end the 
following new section: 
Federal 
Register, 
publication. 
EXAMINATIONS AND SANCTIONS FOR CERTAIN VIOLATIONS 
"SEC. 539. (a) EXAMINATIONS AND SANCTIONS.— 
12 use 
"(1) In connection with any examination of a mortgagee 
I735f-17. 
approved by the Secretary pursuant to this Act, the Secretary 
shall assess the performance of the mortgagee in meeting the 
requirements of sections 203(t), 223(aX7)(B), and 535. Where the 
Secretary determines that a mortgagee is not in compliance 
with these requirements, the Secretary shall refer the matter to 
the Mortgagee Review Board for investigation and appropriate 
action. 
"(2) Not later than 180 days after the date of the enactment of 
the Cranston-Gonzalez National Affordable Housing Act, the 
Secretary shall by notice establish a procedure under which (A) 
any person may file a request that the Secretary determine 
whether a mortgagee is in compliance with sections 203(t), 
223(a)(7)(B), and 535, (B) the Secretary shall inform the person of 
the disposition of the request, and (C) the Secretary shall pub-
lish in the Federal Register the disposition of any case referred 
by the Secretary to the Mortgagee Review Board. Such proce-
dures shall be established by regulation under section 553 of 
title 5, United States Code. The Secretary shall issue regula- Regulations. 
tions based on the initial notice before the expiration of the 
8-month period beginning on the date of the notice. 
"(3) The Secretary shall submit to Congress, not less than Reports. 
annually, a report regarding any actions taken to carry out this 
section. The report shall include a list of all requests filed 
pursu£mt to paragraph (2) and any action taken pursuant to 
such requests." 
"(b) MONITORING AND REVIEW.—The Secretary shall continually 
monitor and undertake a thorough review of the implementation of 
this section to assess the impact of the section on the lending 
practices of mortgagees and the availability of mortgages insured 
under this Act. The Secretary shall monitor the availability of 
credit, the number and t5^e of lenders participating in the program, 
whether there is any change in the composition or practices of such 
lenders and any other factors the Secretary considers appropriate. 
The Secretary shall submit to the Congress findings detailing the 
results of such monitoring and review not later than 18 months 
after the enactment of the Cranston-Gonzalez National Affordable 
Housing Act.". 
104 STAT. 4140 
PUBLIC LAW 101-625—NOV. 28, 1990 
SEC. 331. MUTUAL MORTGAGE INSURANCE FUND DISTRIBUTIONS. 
Section 205 of the National Housing Act (12 U.S.C. 1711) is 
amended by adding at the end the following new subsection: 
"(e) In determining whether there is a surplus for distribution to 
mortgagors under this section, the Secretary shall take into account 
the actuarial status of the entire Fund.". 
SEC. 332. ACTUARIAL SOUNDNESS OF MUTUAL MORTGAGE INSURANCE 
FUND. 
Section 205 of the National Housing Act (12 U.S.C. 1711), as 
amended by the preceding provisions of this Act, is further amended 
by adding at the end the following new subsections: 
"(f)(1) The Secretary shall ensure that the Mutual Mortgage 
Insurance Fund attains a capital ratio of not less than 1.25 percent 
within 24 months after the date of the enactment of this subsection 
and maintains such ratio thereafter, subject to paragraph (2). 
"(2) The Secretary shall endeavor to ensure that the Mutual 
Mortgage Insurance Fund attains a capital ratio of not less than 2.0 
percent within 10 years after the date of the enactment of this 
subsection, and shall ensure that the Fund maintains at least such 
capital ratio at all times thereafter. 
Reports. 
"(3) Upon the expiration of the 24-month period beginning on the 
date of the enactment of this subsection, the Secretary shall submit 
to the Congress a report describing the actions the Secretary will 
take to ensure that the Mutual Mortgage Insurance Fund attains 
the capital ratio required under paragraph (2). 
"(4) For purposes of this subsection: 
"(A) The term 'capital' means the economic net worth of the 
Mutual Mortgage Insurance Fund, as determined by the Sec-
retary under the annual audit required under section 538. 
"(B) The term 'capital ratio' means the ratio of capital to 
unamortized insurance-in-force. 
"(C) The term 'economic net worth' means the current cash 
available to the Fund, plus the net present value of all future 
cash inflows and outflows expected to result from the outstand-
ing mortgages in the Fund. 
(D) The term 'unamortized insurance-in-force' means the 
remaining obligation on outstanding mortgages which are 
obligations of the Mutual Mortgage Insurance Fund, as esti-
mated by the Secretary. 
Reports. 
"(g) The Secretary shall provide for an independent actuarial 
study of the Mutual Mortgage Insurance Fund to be conducted 
annually and shall report annually to the Congress regarding the 
financial status of the Fund. 
"(h)(1) If, pursuant to the independent annual actuarial study of 
the Mutual Mortgage Insurance Fund required under subsection (g), 
the Secretary determines that the Mutual Mortgage Insurance Fund 
is not meeting the operational goals under paragraph (2), the Sec-
retary may not issue distributions, and may, by regulation, propose 
and implement any adjustments to the insurance premiums under 
section 203(c) or section 325(b) of the Cranston-Gonzalez National 
Affordable Housing Act. Upon determining that a premium change 
is appropriate under the preceding sentence, the Secretary shall 
immediately notify Congress of the proposed change and the reasons 
for the change. Any such premium change shall not take effect 
before the expiration of the 90-day period beginning upon such 
notification. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4141 
"(2) The operational goals referred to in paragraph (1) shall be— 
"(A) maintaining an adequate capital ratio; 
"(B) 
meeting 
the 
needs 
of 
homebuyers 
with 
low 
downpayments and first-time homebuyers by providing access 
to mortgage credit; 
"(C) minimizing the risk to the Fund and to homeowners from 
homeowner default; and 
"(D) avoiding adverse selection.". 
SEC. 333. INSURANCE OF MORTGAGES ON PROPERTY IN VIRGIN ISLANDS. 
Section 214 of the National Housing Act (12 U.S.C. 1715d) is 
amended— 
(1) in the first sentence, by striking "Alaska, Guam, or 
Hawaii," and inserting "Alaska, Guam, Hawaii, or the Virgin 
Islands,"; 
(2) by striking "Alaska or in Guam or Hawaii" each place it 
appears and inserting "Alaska, Guam, Hawaii, or the Virgin 
Islands"; 
(3) by inserting ", the Virgin Islands," after "Government of 
Guam' each place it appears; and 
(4) by striking the section heading and inserting the following: 
" I N S U R A N C E OF MORTGAGES ON PROPERTY IN ALASKA, GUAM, HAWAII, 
AND THE VIRGIN ISLANDS". 
SEC. 334. HOME EQUITY CONVERSION MORTGAGE INSURANCE DEM-
ONSTRATION. 
(a) LIMITATION ON INSURANCE AUTHORITY AND MAXIMUM AMOUNT 
INSURED.— 
(1) NUMBER OF MORTGAGES INSURED.—Section 255(g) of the 
National Housing Act (12 U.S.C. 1715z-20(g)) is amended by 
striking the second sentence and inserting the following: "The 
total number of mortgages insured under this section may not 
exceed 25,000.". 
(2) TERMINATION DATE.—The first sentence of section 255(g) of 
the National Housing Act (12 U.S.C. 1715z-20(g)) is amended by 
striking "September 30, 1991" and inserting "September 30, 
1995". 
(b) TYPES OF LOANS.—Section 255(d) of the National Housing Act 
(12 U.S.C. 1715z-20(d)) is amended— 
(1) in paragraph (7), by striking "and" at the end; 
(2) in paragraph (8), by striking the period at the end and 
inserting a semicolon; and 
(3) by adding at the end the following new paragraphs: 
"(9) provide for future payments to the mortgagor based on 
accumulated equity (minus any applicable fees and charges), 
according to the method that the mortgagor shall select from 
among the methods under this paragraph, by pajonent of the 
amount— 
"(A) based upon a line of credit; 
"(B) on a monthly basis over a term specified by the 
mortgagor; 
"(C) on a monthly basis over a term specified by the 
mortgagor and based upon a line of credit; 
"(D) on a monthly basis over the tenure of the mortgagor; 
"(E) on a monthly basis over the tenure of the mortgagor 
£ind based upon a line of credit; or 
104 STAT. 4142 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(F) on any other basis that the Secretary considers 
appropriate; and 
"(10) provide that the mortgagor may convert the method of 
pa5rment under paragraph (9) to any other method during the 
term of the mortgage, except that in the case of a fixed 
rate mortgage, the Secretary may, by regulation, limit such 
convertibility.". 
(c) LIMITATION ON LIABIUTY OF MORTGAGOR.—Section 255(dX7) of 
the National Housing Act (12 U.S.C. 1715z-20(d)(7)) is amended 
by striking subparagraph (A) and inserting the following new 
subparagraph: 
"(A) the net ssdes proceeds from the dwelling that are subject 
to the mortgage (based upon the amount of the accumulated 
equity selected by the mortgagor to be subject to the mortgage, 
as agreed upon by the mortgagor and mortgagee); or". 
(d) DISCLOSURES BY MORTGAGEE REGARDING LIABIUTY OF MORTGA-
GOR.—Section 255(e) of the National Housing Act (12 U.S.C. 
1715z-20(e)) is amended— 
(1) in paragraph (2)— 
(A) by inserting after "statement" the following: "inform-
ing the homeowner that the liability of the homeowner 
under the mortgage is limited and"; and 
(B) by striking "and" at the end; 
(2) in paragraph (3), by striking the period at the end and 
inserting "; and"; and 
(3) by adding at the end the following new paragraph: 
"(4) prior to loan closing, a statement of the projected total 
cost of the mortgage to the homeowner based on the projected 
total future loan balance (such cost expressed as a single aver-
age annual interest rate for at least 2 different appreciation 
rates for the term of the mortgage) for not less than 2 projected 
loan terms, as the Secretary shall determine, which shall 
include— 
"(A) the cost for a short-term mortgage; and 
"(B) the cost for a loan term equaling the actuarial life 
expectancy of the mortgagor.". 
SEC. 335. INFORMATION REGARDING EARLY DEFAULTS ON FHA-INSURED 
LOANS. 
(a) IN GENERAL.—The National Housing Act (12 U.S.C. 1701 et 
seq.) is amended by inserting after section 539 (as added by this Act) 
the following new section: 
"INFORMATION REGARDING EARLY DEFAULTS AND FORECLOSURES ON 
INSURED MORTGAGES 
12 use 
"SEC. 540. (a) IN GENERAL.—The Secretary of Housing and Urban 
I735f-18. 
Development shall collect and maintain information regarding early 
defaults on mortgages as provided under this section. The Secretary 
shall make such information available for public inspection upon 
request. Information shall be collected quarterly with respect to 
each applicable collection period (as such term is defined in subsec-
tion (c)) and shall be available for inspection not more than 30 days 
after the conclusion of the calendar quarter relating to each such 
period. Information shall first be made available under this section 
for the applicable collection period relating to the first calendar 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4143 
quarter ending more than 180 days after the date of the enactment 
of the Cranston-Gonzalez National Affordable Housing Act. 
"(b) CONTENTS.— 
"(1) 
MORTGAGE 
LENDER 
ANALYSIS.—Information 
collected 
under this section shall include, for each lender originating 
mortgages during the applicable collection period that are in-
sured pursuant to section 203 and secured by property in a 
designated census tract, the following information with respect 
to such mortgages: 
"(A) The name of the lender and the number of each 
designated census tract in which the lender originated 1 or 
more such mortgages during the applicable collection 
period. 
"(B) The total number of such mortgages originated by 
such lender during the applicable collection period in each 
designated census tract and the number of mortgages origi-
nated each year in each designated census tract. 
"(C) The total number of defaults and foreclosures on 
such mortgages during the applicable collection period in 
each designated census tract and the number of defaults 
and foreclosures in each designated census tract in each 
year of the period. 
"(D) For each designated census tract, the percentage of 
such lender's total insured mortgages originated during 
each year of the applicable collection period (with respect to 
properties within such census tract) on which defaults or 
foreclosures have occurred during the applicable collection 
period. 
"(E) The total of all such originations, defaults, and fore-
closures on insured mortgsiges originated by such lender 
during the applicable collection period for all designated 
census tracts and the percentage of the total number of 
such lender's insured mortgage originations on which de-
faults or foreclosures have occurred during the applicable 
collection period. 
"(2) OTHER INFORMATION.—Information collected under this 
section shall also include the following: 
"(A) For each lender referred to under paragraph (1), the 
total number of insured mortgages originated by the lender 
secured by properties not located in a designated census 
tract, the total number of defaults and foreclosures on such 
mortgages, and the percentage of such mortgages origi-
nated on which defaults or foreclosures occurred during the 
applicable collection period. 
(B) For each designated census tract, the total number of 
mortgages originated during the applicable collection 
period that are insured pursuant to section 203, the number 
of defaults and foreclosures occurring on such mortgages 
during such period, and the percentage of the total insured 
mortgage originations during the period on which defaults 
or foreclosures occurred. 
"(c) ANNUAL REPORTS.—The Secretary shall submit to the Con-
gress annually a report containing the information collected and 
maintained under subsection (b) for the relevant year. 
"(d) DEFINITIONS.—For purposes of this section: 
"(1) APPLICABLE COLLECTION PERIOD.—The term 'applicable 
collection period' means the 5-year period ending on the last day 
104 STAT. 4144 
PUBLIC LAW 101-625—NOV. 28, 1990 
of the calendar quarter for which information under this section 
is collected. 
"(2) DESIGNATED CENSUS TRACT.—The term 'designated census 
tract' means a census tract located within a metropolitan statis-
tical area, as defined pursuant to regulations issued by the 
Secretary of Commerce.'. 
12 use I735f-18 
(b) AVAILABILITY OF INFORMATION DURING TRANSITION.—During 
"o*^- 
the period beginning on the date of the enactment of this Act and 
ending on the date of the initial availability of information under 
section 540 of the National Housing Act (as added by subsection (a)), 
the Secretary of Housing and Urban Development shall make pub-
licly available all reports regarding Default/Claim Rates per Re-
gional Office for Fiscal Year 1990 Endorsements that are produced 
by the Department of Housing and Urban Development during such 
period. 
SEC. 336. AUCTION OF MULTIFAMILY MORTGAGES. 
Section 221(g)(4) of the National Housing Act (12 U.S.C. 17151(gX4)) 
is amended by adding after subparagraph (B) the following new 
subparagraph: 
(CXi) In lieu of accepting assignment of the original 
credit instrument and the mortgage securing the credit 
instrument under subparagraph (A) in exchange for receipt 
of debentures, the Secretary shall arrange for the sale of 
the beneficisd interests in the mortgage loan through an 
auction and sale of the (I) mortgage loans, or (II) participa-
tion certificates, or other mortgage-backed obligations in a 
form acceptable to the Secretary (in this subparagraph 
referred to as 'participation certificates'). The Secretary 
shall arrange the auction and sale at a price, to be paid to 
the mortgagee, of par plus accrued interest to the date of 
sale. The sale price shall also include the right to a subsidy 
payment described in clause (iii). 
(iiXD The Secretary shall conduct a public auction to 
determine the lowest interest rate necessary to accomplish 
a sale of the beneficigil interests in the original credit 
instrument and mortgage securing the credit instrument. 
"(II) A mortgagee who elects to assign a mortgage shall 
provide the Secretary emid persons bidding at the auction a 
description of the characteristics of the original credit 
instrument and mortgage securing the original credit in-
strument, which shall include the principal mortgage bal-
ance, original stated interest rate, service fees, real estate 
and tenant characteristics, the level and duration of ap-
plicable Federal subsidies, and any other information deter-
mined by the Secretary to be appropriate. The Secretary 
shall also provide information regarding the status of the 
property with respect to the provisions of the Emergency 
Low Income Housing Preservation Act of 1987 or any subse-
quent Act with respect to eligibility to prepay the mortgage, 
a statement of whether the owner has filed a notice of 
intent to prepay or a plan of action under the Emergency 
Low Income Housing Preservation Act of 1987 or any subse-
quent Act, and the details with respect to incentives 
provided under the Emergency Low Income Housing 
Preservation Act of 1987 or any subsequent Act in lieu of 
exercising prepajnnent rights. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4145 
"(III) The Secretary shall, upon receipt of the information 
in subclause (II), promptly advertise for an auction and 
publish such mortgage descriptions in advance of the auc-
tion. The Secretary may conduct the auction at any time 
during the 6-month period beginning upon receipt of the 
information in subclause (II) but under no circumstances 
may the Secretary conduct an auction before 2 months after 
receiving the mortgagee's written notice of intent to assign 
its mortgage to the Secretary. 
"(IV) In any auction under this subparagraph, the Sec-
retary shall accept the lowest interest rate bid for purchase 
that the Secretary determines to be acceptable. The Sec- Federal 
retary shall cause the accepted bid to be published in the Register, 
Federal Register. Settlement for the sale of the credit in- Publication. 
strument and the mortgage securing the credit instrument 
shall occur not later than 30 business days after the date 
winning bidders are selected in the auction, unless the 
Secretary determines that extraordinary circumstances re-
quire an extension (not to exceed 60 days) of the period. 
"(V) If no bids are received, the bids that are received are 
not acceptable to the Secretary, or settlement does not 
occur within the period under subclause (IV), the mortgagee 
shall retain all rights (including the right to interest, at a 
rate to be determined by the Secretary, for the period 
covering any actions taken under this subparagraph) under 
this section to assign the mortgage loan to the Secretary. 
"(iii) As part of the auction process, the Secretary shall 
agree to provide a monthly interest subsidy payment from 
the General Insurance Fund to the purchaser under the 
auction of the original credit instrument or the mortgage 
securing the credit instrument (and any subsequent holders 
or assigns who are approved mortgagees). The subsidy pay-
ment shall be paid on the first day of each month in an 
amount equal to the difference between the stated interest 
due on the mortgage loan and the lowest interest rate 
necessary to accomplish a sale of the mortgage loan or 
participation certificates (less the servicing fee, if appro-
priate) for the then unpaid principal balance plus accrued 
interest at a rate determined by the Secretory. Each in-
terest subsidy pa3rment shall be treated by the holder of the 
mortgage as interest paid on the mortgage. The interest 
subsidy payment shall be provided until the earlier of— 
"(I) the maturity date of the loan; 
"(II) prepayment of the mortgage loan in accordance 
with the Emergency Low Income Housing Preservation 
Act of 1987 or any subsequent Act, where applicable; or 
"(III) default 
and 
full 
payment 
of 
insurance 
benefits on the mortgage loan by the Fedferal Housing 
Administration. 
"(iv) The Secretory shall require that the mortgage loans 
or participation certificates presented for assignment are 
auctioned as whole loans with servicing rights released and 
also are auctioned with servicing rights retained by the 
current servicer. 
"(v) To the extent practicable, the Secretory shsill encour-
age Stote housing finance agencies, nonprofit organizations, 
and organizations representing the tenants of the property 
104 STAT. 4146 
PUBLIC LAW 101-625—NOV. 28, 1990 
Regulations. 
Reports. 
securing the mortgage, or a qualified mortgagee participat-
ing in a plan of action under the Emergency Low Income 
Housing Preservation Act of 1987 or subsequent Act to 
participate in the auction. 
"(vi) The Secretary shall implement the requirements 
imposed by this subparagraph within 30 days from the date 
of enactment of this subparagraph and not be subject to the 
requirement of prior issuance of regulations in the Federal 
Register. The Secretary shall issue regulations implement-
ing this section within 6 months of the enactment of this 
subparagraph. 
"(vii) Nothing in this subparagraph shall diminish or 
impair the low income use restrictions applicable to the 
project under the original regulatory agreement or the 
re'dsed agreement entered into pursuant to the Emergency 
Lovv Income Housing Preservation Act of 1987 or subse-
quent Act, if any, or other agreements for the provision of 
Federal assistance to the housing or its tenants. 
"(viii) 
This 
subparagraph 
shall 
not 
apply 
after 
September 30, 1995. Not later than January 31 of each year 
0)eginning in 1992), the Secretary shall submit to the Con-
gress a report including statements of the number of mort-
gages auctioned and sold and their value, the amount of 
subsidies committed to the program under this subpara-
graph, the ability of the Secretary to coordinate the pro-
gram with the incentives provided under the Emergency 
Low Income Housing Preservation Act of 1987 or subse-
quent Act, and the costs and benefits derived from the 
program for the Federal Government.". 
* 
SEC. 337. DISAPPROVAL OF REGULATIONS REGARDING PROPERTY DIS-
POSITION. 
Section 291.1(cX2) and section 291.100(b) (1) and (2) of the rule of 
the Department of Housing and Urban Development entitled "Dis-
position of HUD-Acquired Single Family Property" and published in 
the Federal Register of January 11,1990 (55 Fed. Reg. 1161 et seq.) is 
hereby disapproved. The Secretary of Housing and Urban Develop-
ment may not publish a final rule containing or based on such 
provision and may not otherwise implement such provision of such 
rule. 
SEC. 
3
3
8
. 
REPORT 
REGARDING 
FORECLOSED 
PROPERTIES. 
(a) IN GENERAL.—Before the expiration of the 60-day period begin-
ning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall submit to the Congress a 
report containing a description of the strategy and action plan 
developed to assist in the disposition of foreclosed properties in the 
stock of the Department of Housing and Urban Development, 
pajdng particular attention to any properties that have been in the 
Department inventory for more than 12 months. The Secretary shall 
solicit recommendations from State and local governments, non-
profit organizations, housing finance authorities, and community 
housing development organizations in preparing the report. 
(b) CONTENTS.— 
(1) The report shall include information on the efforts of local 
governments, nonprofit organizations, housing finance authori-
ties, and community housing development organizations to 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4147 
work with eligible families to purchase these homes and sugges-
tions for mechanisms to facilitate the efforts. The report shall 
also include recommendations for (A) evaluating the rehabilita-
tion costs of the properties necessary to achieve the minimum 
standards, (B) developing innovative approaches for involving 
non-Federal entities in the sale and rehabilitation of the prop-
erties and (C) providing the means to make the older stock 
habitable and available. 
(2) The report shall also include proposals directed toward 
very low-income, low-income and moderate-income first-time 
homebuyers and the Eissistance that may be provided to such 
homebuyers to foster purchase. 
SEC. 339. LIMITATION ON GNMA GUARANTEES OF MORTGAGE-BACKED 
SECURITIES. 
Section 306(gX2) of the Federal National Mortgage Association 
Charter Act (12 U.S.C. 1721(g)(2)) is amended to read as follows: 
"(2) Notwithstanding any other provision of law and subject only 
to the absence of qualified requests for guarantees, to the authority 
provided in this subsection, and to the extent of or in such amounts 
as any funding limitation approved in appropriation Acts, the 
Association shall enter into commitments to issue guarantees under 
this subsection in an aggregate amount of $84,982,000,000 during 
fiscal year 1991 and $88,296,000,000 during fiscal year 1992.". 
SEC. 340. INCREASE IN LOAN LIMITS FOR PROPERTY IMPROVEMENT 
LOAN INSURANCE. 
(a) STUDY.—The Secretary of Housing and Urban Development 
shall conduct a study regarding the need for increasing the loan 
limits under section 2(b) of the National Housing Act for insurable 
property improvement loans and the effects of such an increase. The Reports. 
Secretary shall submit a report to the Congress not later than 6 
months after the date of the enactment of this Act regarding the 
findings and conclusions of the study. 
Qo) MAXIMUM LOAN AMOUNTS.— 
(1) IN GENERAL.—Section 2(b)(1) of the National Housing Act 
(12 U.S.C. 1703(b)(1)) is amended— 
(A) by striking subparagraph (A) and inserting the follow-
ing new subparagraph: 
"(A)(i) $25,000 if made for the purpose of financing alter-
ations, repairs and improvements upon or in connection with 
existing single-family structures; and 
"(ii) $17,500 if made for the purpose of financing alterations, 
repairs and improvements upon or in connection with existing 
manufactured homes;"; and 
(B) in subparagraph (B), by striking "$43,750 or an aver-
age amount of $8,750 per family unit ($50,000 and $10,000, 
respectively, where financing the installation of a solar 
energy system is involved)" and inserting "$60,000 or an 
average amount of $12,000 per family unit". 
(2) APPUCABIUTY.—The amendments made by this subsection 12 USC 1703 
sh£ill apply to loans executed on or after June 1,1991. 
^°^-
(c) LOAN TERM.—Section 20a)(3) of the National Housing Act (12 
U.S.C. 1703(b)(3)) is amended— 
(1) by striking subparagraph (A) and inserting the following 
new subparagraph: 
104 STAT. 4148 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(A)(i) twenty years and thirty-two days if made for the 
purpose of financing alterations, repairs, and improvements 
upon or in connection with an existing single-family structure; 
and 
"(ii) fifteen years and thirty-two days if made for the purpose 
of financing alterations, repairs, and improvements upon or in 
connection with an existing manufactured home;"; and 
(2) in subparEigraph (B), by striking "fifteen years" and insert-
ing "twenty years". 
Subtitle C—Effective Date 
Homeownership 
and Opportunity 
Through HOPE 
Act. 
SEC. 351. EFFECTIVE DATE. 
If the Omnibus Budget Reconciliation Act of 1990 is enacted 
before the enactment of this Act, the provisions of sections 323, 324, 
325, 331, 332, 334(a), and 336 (of this Act) and the amendments made 
by such sections shall not take effect. This section shall apply 
notwithstanding any provision relating to effective date or ap-
plicability contained in such sections. 
TITLE IV—HOMEOWNERSHIP AND OP-
PORTUNITY 
FOR 
PEOPLE 
EVERY-
WHERE PROGRAMS 
42 u s e 1437aaa 
note. 
SEC. 401. SHORT TITLE. 
This title may be cited as the "Homeownership and Opportunity 
Through HOPE Act". 
Subtitle A—HOPE for Public and Indian 
Housing Homeownership 
SEC. 411. HOPE FOR PUBLIC AND INDIAN HOUSING HOMEOWNERSHIP. 
The United States Housing Act of 1937 is amended by adding at 
the end the following new title: 
"TITLE III—HOPE FOR PUBLIC AND INDIAN HOUSING 
HOMEOWNERSHIP 
42 u s e 1437aaa. 
"SEC. 301. PROGRAM AUTHORITY. 
"(a) IN GENERAL.—The Secretary is authorized to make— 
"(1) planning grants to help applicants to develop homeowner-
ship programs in accordance with this title; and 
(2) implementation grants to carry out homeownership pro-
grams in accordance with this title. 
"(b) AUTHORITY TO RESERVE HOUSING ASSISTANCE.—In connection 
with a grant under this title, the Secretary may reserve authority to 
provide £issistance under section 8 of this Act to the extent necessary 
to provide replacement housing and rental assistance for a 
nonpurchasing tenant who resides in the project on the date the 
Secretary approves the application for an implementation grant, for 
use by the tenant in another project. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4149 
"(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 
be appropriated for grants under this title $68,000,000 for fiscal year 
1991 and $380,000,000 for fiscal year 1992. Any amount appropriated 
pursuant to this subsection shall remain available until expended. 
"SEC. 302. PLANNING GRANTS. 
42 USC 
"(a) GRANTS.—The Secretary is authorized to make planning i^^Taaa-l. 
grants to applicants for the purpose of developing homeownership 
programs under this title. The amount of a planning grant under 
this section may not exceed $200,000, except that the Secretary may 
for good cause approve a grant in a higher amount. 
"(b) ELIGIBLE ACTIVITIES.—Planning grants may be used for activi-
ties to develop homeownership programs (which may include pro-
grams for cooperative ownership), including— 
"(1) development of resident management corporations and 
resident councils; 
"(2) training and technical assistance for applicants related to 
development of a specific homeownership program; 
"(3) studies of the feasibility of a homeownership program; 
"(4) preliminary architectural and engineering work; 
"(5) tenant and homebuyer counseling and training; 
"(6) planning for economic development, job training, and 
self-sufficiency activities that promote economic self-sufficiency 
of homebuyers and homeowners under the homeownership 
program; 
"(7) development of security plans; and 
"(8) preparation of an application for an implementation 
grant under this title. 
"(c) APPUCATION.— 
"(1) FORM AND PROCEDURES.—An application for a planning 
grant shall be submitted by an applicant in such form and in 
accordance with such procedures as the Secretary shall 
establish. 
"(2) MINIMUM REQUIREMENTS.—The Secretary shall require 
that an application contain at a minimum— 
"(A) a request for a planning grant, specifying the activi-
ties proposed to be carried out, the schedule for completing 
the activities, the personnel necessary to complete the 
activities, and the amount of the grant requested; 
"(B) a description of the applicant and a statement of its 
qualifications; 
"(C) identification and description of the public housing 
project or projects involved, and a description of the com-
position of the tenants, including family size and income; 
"(D) a certification by the public official responsible for 
submitting the comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed activities are 
consistent with the approved housing strategy of the State 
or unit of general local government within which the 
project is located (or, during the first 12 months after 
enactment of the Cranston-Gonzalez National Affordable 
Housing Act, that the application is consistent with such 
other existing State or local housing plan or strategy that 
the Secretary shall determine to be appropriate); and 
"(E) a certification that the applicant will comply with 
the requirements of the Fair Housing Act, title VI of the 
104 STAT. 4150 
PUBLIC LAW 101-625—NOV. 28, 1990 
Civil Rights Act of 1964, section 504 of the Rehabilitation 
Act of 1973, and the Age Discrimination Act of 1975, and 
will affirmatively further fair housing. 
Regulations. 
"(d) SELECTION CRITERIA.—The Secretary shall, by regulation, 
establish selection criteria for a national competition for assistance 
under this section, which shall include— 
"(1) the qualifications or potential capabilities of the 
applicant; 
(2) the extent of tenant interest in the development of a 
homeownership program for the project; 
"(3) the potential of the applicant for developing a successful 
and affordable homeownership program and the suitability of 
the project for homeownership; 
"(4) national geographic diversity among projects for which 
applicants are selected to receive assistance; and 
"(5) such other factors that the Secretary shall require that 
(in the determination of the Secretary) are appropriate for 
purposes of carrying out the program established by this title in 
an effective and efficient manner. 
42 use 
"SEC. 303. IMPLEMENTATION GRANTS. 
"(a) GRANTS.—The Secretary is authorized to make implementa-
tion grants to applicants for the purpose of carrying out homeowner-
ship programs approved under this title. 
(b) ELIGIBLE ACTIVITIES.—Implementation grants may be used for 
activities to carry out homeownership programs (including pro-
grams for cooperative ownership) that meet the requirements under 
this subtitle, including the following activities: 
"(1) Architectural and engineering work. 
"(2) Implementation of the homeownership program, includ-
ing acquisition of the public housing project (not including 
scattered site single family housing of a public housing agency) 
from a public housing agency for the purpose of transferring 
ownership to eligible families in accordance with a homeowner-
ship program that meets the requirements under this title. 
"(3) Rehabilitation of any public housing project covered by 
the homeownership program, in accordance with standards 
established by the Secretary. 
"(4) Administrative coste of the applicant, which may not 
exceed 15 percent of the amount of assistance provided under 
this section. 
"(5) Development of resident management corporations and 
resident management councils, but only if the applicant has not 
received assistance under section 302 for such activities. 
"(6) Counseling and training of homebuyers and homeowners 
under the homeownership program. 
"(7) Relocation of tenants who elect to move. 
"(8) Any necessary temporary relocation of tenants during 
rehabilitation. 
"(9) Funding of operating expenses and replacement reserves 
of the project covered by the homeownership program, except 
that the amount of assistance for operating expenses shall not 
exceed the amount the project would have received if it had 
continued to receive such assistance under section 9, with 
adjustments comparable to those that would have been made 
under section 9. 
"(10) Implementation of a replacement housing plan. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4151 
"(11) Legal fees. 
"(12) Defraying costs for the ongoing training needs of the 
recipient that are related to developing and carrjdng out the 
homeownership program. 
"(13) Economic development activities that promote economic 
self-sufficiency of homebuyers, residents, and homeowners 
under the homeownership program. 
"(c) MATCHING FUNDING.— 
"(1) IN GENERAL.—Each recipient shall assure that contribu-
tions equal to not less than 25 percent of the grant amount 
made available under this section, excluding any amounts pro-
vided for post-sale operating expenses, shall be provided from 
non-Federal sources to carry out the homeownership program. 
"(2) FORM.—Such contributions may be in the form o
f
— 
"(A) cash contributions from non-Federal resources, 
which may not include Federal tax expenditures or funds 
from a grant made under section 106(b) or section 106(d) of 
the Housing and Community Development Act of 1974; 
"(B) pajmient of administrative expenses, as defined by 
the Secretary, from non-Federgil resources, including funds 
from a grant made under section 106(b) or section 106(d) of 
the Housing and Community Development Act of 1974; 
"(C) the value of taxes, fees, or other charges that are 
normally and customarily imposed but are waived, fore-
gone, or deferred in a manner that facilitates the im-
plementation of a homeownership program assisted under 
this subtitle; 
"(D) the value of land or other real property as appraised 
according to procedures acceptable to the Secretary; 
"(E) the value of investment in on-site and off-site infra-
structure required for a homeownership program assisted 
under this subtitle; or 
"(F) such other in-kind contributions as the Secretary 
may approve. 
Contributions for administrative expenses shall be recognized 
only up to an amount equal to 7 percent of the total amount of 
grants made available under this section. 
"(d) APPLICATION.— 
"(1) FORM AND PROCEDURE.—An application for an im-
plementation grant shall be submitted by an applicant in such 
form and in accordance with such procedures as the Secretary 
shall establish. 
"(2) MINIMUM REQUIREMENTS.—The Secretary shall require 
that an application contain at a minimum— 
"(A) a request for an implementation grant, specif5dng 
the amount of the grant requested and its proposed uses; 
"(B) if applicable, an application for assistance under 
section 8 of this Act, which shall specify the proposed uses 
of such assistance and the period during which the assist-
£mce will be needed; 
"(C) a description of the qualifications and experience of 
the applicant in providing housing for low-income families; 
"(D) a description of the proposed homeownership pro- 
_ 
gram, consistent with section 304 and the other require-
ments of this title, which shall specify the activities 
proposed to be carried out and their estimated costs, identi-
104 STAT. 4152 
PUBLIC LAW 101-625—NOV. 28, 1990 
fying reasonable schedules for carrying it out, and dem-
onstrating that the program will comply with 
the 
affordability requirements under section 304(b); 
"(E) identification and description of the public housing 
project or projects involved, and a description of the com-
position of the tenants, including family size and income; 
"(F) a description of and commitment for the resources 
that are expected to be made available to provide the 
matching funding required under subsection (c) and of 
other resources that are expected to be made available in 
support of the homeownership program; 
"(G) identification and description of the financing pro-
posed for any (i) rehabilitation and (ii) acquisition (I) of the 
property, where applicable, by a resident council or other 
entity for transfer to eligible families, and (II) by eligible 
families of ownership interests in, or shares representing, 
units in the project; 
"(H) if the applicant is not a public housing agency, the 
proposed sales price, if any, the basis for such price deter-
mination, and terms to the applicant; 
"(I) the estimated sales prices, if any, and terms to eli-
gible families; 
"(J) any proposed restrictions on the resale of units under 
a homeownership program; 
"(K) identification and description of the entity that will 
operate and manage the property; 
"(L) a certification by the public official responsible for 
submitting the comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed activities are 
consistent with the approved housing strategy of the State 
or unit of general local government within which the 
project is located (or, during the first 12 months after 
enactment of the Cranston-Gonzalez National Affordable 
Housing Act, that the application is consistent with such 
other existing State or local housing plan or strategy that 
the Secretary shall determine to be appropriate); and 
"(M) a certification that the applicant will comply with 
the requirements of the Fair Housing Act, title VI of the 
Civil Rights Act of 1964, section 504 of the Rehabilitation 
Act of 1973, and the Age Discrimination Act of 1975, and 
will affirmatively further fair housing. 
"(e) SELECTION CRITERIA.—The Secretary shall establish selection 
criteria for a national competition for assistance under this section, 
which shall include— 
"(1) the ability of the applicant to develop and carry out the 
proposed homeownership program, taking into account the 
quality of any related ongoing program of the applicant, and the 
extent of tenant interest in the development of a homeowner-
ship program and community support; 
"(2) the feasibility of the homeownership program; 
"(3) the extent to which current tenants and other eligible 
families will be able to afford the purchase; 
"(4) the quality and viability of the proposed homeownership 
program, including the viability of the economic self-sufficiency 
plan; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4153 
"(5) the extent to which funds for activities that do not qualify 
as eligible activities will be provided in support of the 
homeownership program; 
"(6) whether the approved comprehensive housing afford-
ability strategy for the jurisdiction within which the public 
housing project is located includes the proposed homeownership 
program as one of the general priorities identified pursuant to 
section 1050t)X7) of the Cranston-Gonzailez National Affordable 
Housing Act; 
"(7) national geographic diversity among housing for which 
applicants are selected to receive assistance; and 
"(8) the extent to which a sufficient supply of affordable 
rental housing of the t5rpe assisted under this title exists in the 
locality, so that the implementation of the homeownership 
program will not appreciably reduce the number of such rental 
units available to residents currently residing in such units or 
eligible for residency in such units. 
"(f) LOCATION WITHIN PARTICIPATING JURISDICTIONS.—The Sec-
retary may approve applications for grants under this title 
only for public housing projects located within the boundaries of 
jurisdictions— 
"(1) which are participating jurisdictions under title III of the 
Cranston-Gonzalez National Affordable Housing Act; or 
"(2) on behalf of which the agency responsible for affordable 
housing has submitted a housing strategy or plan. 
"(g) APPROVAL.—The Secretary shall notify each applicant, not 
later than 6 months after the date of the submission of the applica-
tion, whether the application is approved or not approved. The 
Secretary may approve the application for an implementation grant 
with a statement that the application for the section 8 assistance for 
replacement housing and for residents of the project not purchasing 
units is conditionally approved, subject to the availability of appro-
priations in subsequent fiscal years. 
"SEC. 304. HOMEOWNERSHIP PROGRAM REQUIREMENTS. 
42 USC 
"(a) IN GENERAL.—A homeownership program under this title 
shall provide for acquisition by eligible femilies of ownership in-
terests in, or shares representing, at least one-half of the units in a 
public housing project under any arrangement determined by the 
Secretary to be appropriate, such as cooperative ownership (includ-
ing limited equity cooperative ownership) and fee simple ownership 
(including condominium ownership), for occupancy by the eligible 
families. 
"(b) AFFORDABILTTY.—A homeownership program under this title 
shall provide for the establishment of sales prices (including prin-
cipal, insurance, taxes, and interest and closing costs) for initial 
acquisition of the property from the public housing agency if the 
applicant is not a public housing agency, and for sales to eligible 
families, such that an eligible family shall not be required to expend 
more than 30 percent of the adjusted income of the family per 
month to complete a sale under the homeownership program. 
"(c) PLAN.—A homeownership program under this title shall pro-
vide, and include a plan, for— 
"(1) identif3dng and selecting eligible families to participate in 
the homeownership program; 
"(2) providing relocation assistance to families who elect to 
move; 
104 STAT. 4154 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(3) ensuring continued affordability by tenants, homebuyers, 
and homeowners in the project; 
"(4) providing ongoing training and counseling for home-
buyers and homeowners; and 
"(5) replacing units in eligible projects covered by a 
homeownership program. 
"(d) ACQUISITION AND REHABILITATION LIMITATIONS.—Acquisition 
or rehabilitation of public housing projects under a homeownership 
program under this title may not consist of acquisition or rehabilita-
tion of less than the whole public housing project (not including 
scattered site single family housing of a public housing agency) in a 
project consisting of more than 1 building. The provisions of this 
subsection may be waived upon a finding by the Secretary that the 
sale of less than all the buildings in a project is feasible and will not 
result in a hardship to any tenants of the project who are not 
included in the homeownership program. 
"(e) FINANCING.— 
"(1) IN GENERAL.—The application shall identify and describe 
the proposed financing for (A) £uiy rehabilitation, and (B) ac-
quisition (i) of the project, where applicable, by an entity other 
than the public housing agency for transfer to eligible families, 
and (ii) by eligible families of ownership interests in, or shares 
representing, units in the project. Financing may include use of 
the implementation grant, sale for cash, or other sources of 
financing 
(subject to applicable 
requirements), 
including 
conventional mortgage loans and mortgage loans insured under 
title II of the National Housing Act. 
"(2) PROHIBITION AGAINST PLEDGES.—Property transferred 
under this title shall not be pledged as collateral for debt or 
otherwise encumbered except when the Secretary determines 
that— 
"(A) such encumbrance will not threaten the long-term 
availability of the property for occupancy by low-income 
families; 
"(B) neither the Federal Government nor the public hous-
ing agency will be exposed to undue risks related to action 
that may have to be taken pursuant to paragraph (3); 
"(C) any debt obligation can be serviced from project 
income, including operating assistance; and 
"(D) the proceeds of such encumbrance will be used only 
to meet housing standards in accordance with subsection (f) 
or to make such additional capital improvements as the 
Secretary determines to be consistent with the purposes of 
this title. 
"(3) OPPORTUNITY TO CURE.—Any lender that provides financ-
ing in connection with a homeownership program under this 
subtitle shall give the public housing agency, resident manage-
ment corporation, individual owner, or other appropriate entity 
a reasonable opportunity to cure a financial default before 
foreclosing on the property, or taking other action as a result of 
the default. 
"(f) HOUSING QUALITY STANDARDS.—The application shall include 
a plan ensuring that the unit— 
"(1) will be free from any defects that pose a danger to health 
or safety before transfer of an ownership interest in, or shares 
representing, a unit to an eligible family; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4155 
"(2) will, not later than 2 years after the transfer to an 
eligible family, meet minimum housing standards established 
by the Secretary for the purposes of this title. 
"(g) REPLACEMENT PLAN.—Public housing projects shall not be 
transferred under this title unless the Secretary has entered into a 
binding agreement with the local public housing agency to make 
available to such agency Federal funding assistance to provide an 
additional decent, safe, sanitary, and affordable dwelling unit as a 
replacement for each unit in a public housing project to be trans-
ferred. Such replacement housing may consist of— 
"(1) the development of new public housing units by the 
public housing agency in accordance with section 5; 
"(2) the rehabilitation of vacant public housing units by the 
public housing agency in accordance with section 14(nXl); 
"(3) the use of 5-year, tenant-beised rental assistance under 
section 8(b)(2) and section 8(o)(9); 
"(4) the use of a State or IOCEQ program that is comparable to 
any of the Federal programs referred to in subparagraphs (A) 
through (C) as to housing standards, eligibility, and contribution 
to rent, and provides a term of assistance of not less than 5 
years; 
"(5) where the applicant is a resident management corpora-
tion, resident council, or cooperative association, the acquisition 
of nonpublicly owned housing units, which the applicant shall 
operate as rental housing comparable to public housing as to 
term of assistance, housing standards, eligibility, and contribu-
tion to rent; or 
"(6) any combination of such methods. 
"(h) PROTECTION OF NON-PURCHASING FAMILIES.— 
"(1) IN GENERAL.—No tenant residing in a dwelling unit in a 
public housing project on the date the Secretary approves an 
application for an implementation grant may be evicted by 
reason of a homeownership program approved under this title. 
"(2) REPLACEMENT ASSISTANCE.—If the tenant decides not to 
purchase a unit, or is not qualified to do so, the recipient shall, 
during the term of any operating assistance under the im-
plementation grant, permit each otherwise qualified tenant to 
continue to reside in the project at rents that do not exceed 
levels consistent with section 3(a) of this Act or, if an otherwise 
qualified tenant chooses to move (at any time during the term of 
such operating assistance contract), the public housing agency 
shall, to the extent approved in appropriations Acts, offer such 
tenant (A) a unit in another public housing project, or (B) 
section 8 assistance for use in other housing. 
"(3) RELOCATION ASSISTANCE.—The recipient shall also inform 
each such tenant that if the tenant chooses to move, the recipi-
ent will pay relocation assistance in accordance with the 
approved homeownership program. 
'(4) OTHER RIGHTS.—Tenante renting a unit in a project trans-
ferred under this title shall have all rights provided to tenants 
of public housing under this Act. 
"SEC. 
3
0
5
. 
OTHER 
PROGRAM 
REQUIREMENTS. 
4
2 
USC 
"(a) SALE BY PUBUC HOUSING AGENCY To APPLICANT OR OTHER 
^ 
^^~^' 
ENTITY REQUIRED.—Where the Secretary approves an application 
providing for the transfer of the eligible project from the public 
housing agency to another applicant, the public housing agency 
39-194 O - 91 - 27 : QL 3 Part 5 
104 STAT. 4156 
PUBLIC LAW 101-625—NOV. 28, 1990 
shall transfer the project to such other applicant, in accordance with 
the approved homeownership program. 
"(b) PREFERENCES.—In selecting eligible families for homeowner-
ship, the recipient shall give a first preference to otherwise qualified 
current tenants and a second preference to otherwise qualified 
eligible families who have completed participation in an economic 
self-sufficiency program specified by the Secretary. 
"(c) Ck)ST LIMITATIONS.—The Secretary may establish cost limita-
tions on eligible activities under this title, subject to the provisions 
of this title. 
"(d) ANNUAL CONTRIBUTIONS.—Notwithstanding the purchase of a 
public housing project under this section, or the purchase of a unit 
in a public housing project by an eligible family, the Secretary shall 
continue to pay annual contributions with respect to the project. 
Such contributions may not exceed the maximum contributions 
authorized in section 5(a). 
"(e) OPERATING SUBSIDIES.—Operating subsidies under section 9 of 
this Act shall not be available with respect to a public housing 
project after the date of its sale by the public housing agency. 
"(f) USE OF PROCEEDS FROM SALES TO EUGIBLE FAMILIES.—The 
entity that transfers ownership interests in, or shares representing, 
units to eligible families, or another entity specified in the approved 
application, shall use the proceeds, if any, from the initial sale for 
costs of the homeownership program, including operating expenses, 
improvements to the project, business opportunities for low-income 
families, supportive services related to the homeownership program, 
additional homeownership opportunities, and other 
activities 
approved by the Secretary. 
(g) RESTRICTIONS ON RESALE BY HOMEOWNERS.— 
"(1) IN GENERAL.— 
"(A) 
TRANSFER 
PERMITTED.—A homeowner under a 
homeownership program may transfer the homeowner's 
ownership interest in, or shares representing, the unit, 
except that a homeownership program may establish 
restrictions on the resale of unite under the program. 
"(B) RIGHT TO PURCHASE.—Where a resident management 
corporation, resident council, or cooperative has jurisdiction 
over the unit, the corporation, council, or cooperative shall 
have the right to purchase the ownership interest in, or 
shares representing, the unit from the homeowner for the 
# 
amount specified in a firm contract between the home-
owner and a prospective buyer. If such an entity does not 
have jurisdiction over the unit or electe not to purchase and 
if the prospective buyer is not a low-income family, the 
public housing agency or the implementation grant recipi-
ent shall have the right to purchase the ownership interest 
in, or shares representing, the unit for the same amount. 
"(C) PROMISSORY NOTE REQUIRED.—The homeowner shall 
execute a promissory note equal to the difference between 
the market value and the purchase price, payable to the 
public housing agency or other entity designated in the 
homeownership plan, together with a mortage securing 
the obligation of the note. 
"(2) 6 YEARS OR LESS.—In the case of a transfer within 6 years 
of the acquisition under the program, the homeownership pro-
gram shall provide for appropriate restrictions to assure that an 
eligible family may not receive any undue profit. The plan shall 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4157 
provide for limiting the family's consideration for its interest in 
the property to the total of— 
"(A) the contribution to equity paid by the family; 
"(B) the value, £is determined by such means as the 
Secretary shall determine through regulation, of any 
improvements installed at the expense of the family during 
the family's tenure as owner; and 
"(C) the appreciated value determined by an inflation 
allowance at a rate which may be based on a cost-of-living 
index, sin income index, or market index as determined by 
the Secretary through regulation and agreed to by the 
purchaser and the entity that transfers ownership interests 
in, or shares representing, units to eligible families (or 
another entity specified in the approved application), at the 
time of initial sale, and applied against the contribution to 
equity. 
Such an entity may, at the time of initial sale, enter into an 
agreement with the family to set a maximum amount which 
this appreciation may not exceed. 
"(3) 6-20 YEARS.—In the case of a transfer during the period 
beginning 6 years after the acquisition and ending 20 years 
after the acquisition, the homeownership program shall provide 
• 
for the recapture by the Secretary or the program of an amount 
equal to the amount of the declining balance on the note 
described in paragraph (1)(C). 
"(4) USE OF RECAPTURED FUNDS.—Fifty percent of any portion 
of the net sales proceeds that may not be retained by the 
homeowner under the plan approved pursuant to this subsec-
tion shall be paid to the entity that transferred ownership 
interests in, or shares representing, units to eligible families, or 
another entity specified in the approved application, for use for 
improvements to the project, business opportunities for low-
income families, supportive services related to the homeowner-
ship program, additional homeownership opportunities, and 
other activities approved by the Secretary. The remaining 50 
percent shsill be returned to the Secretary for use under this 
subtitle, subject to limitations contmned in appropriations Acts. 
Such entity shsill keep and make available to the Secretary all 
records necessary to calculate accurately payments due the 
Secretary under this subsection. 
"(h) THIRD PARTY RIGHTS.—The requirements under this title 
regarding quality standards, resale, or transfer of the ownership 
interest of a homeowner shall be judicially enforceable against the 
grant recipient with respect to actions involving rehabilitation, and 
against purchasers of property under this subsection or their succes-
sors in interest with respect to other actions by affected, low-income 
families, resident management corporations, resident councils, 
public housing agencies, and any agency, corporation, or authority 
of the United States Government. The parties specified in the 
preceding sentence shall be entitled to reasonable attorney fees 
upon prevailing in any such judicial action. 
"(i) DOLLAR LIMITATION ON ECONOMIC DEVELOPMENT ACTIVITIES.— 
Not more than an aggregate of $250,000 from amounts made avail-
able under sections 302 and 303 may be used for economic develop-
ment activities under sections 302(bX6) and 303(bX9) for any project. 
104 STAT. 4158 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(j) TIMELY HOMEOWNERSHIP.—Recipients shall transfer owner-
ship of the property to tenants within a specified period of time that 
the Secretary determines to be reasonable. During the interim 
period when the property continues to be operated and managed as 
rental housing, the recipient shall utilize written tenant selection 
policies and criteria that are consistent with the public housing 
program and that are approved by the Secretary as consistent with 
the purpose of improving housing opportunities for low-income fami-
lies. The recipient shall promptly notify in writing any rejected 
applicant of the grounds for any rejection. 
(k) CAPABILITY OF RESIDENT MANAGEMENT CORPORATIONS AND 
RESIDENT COUNCILS.—To be eligible to receive a grant- under section 
303, a resident mcmagement corporation or resident council shall 
demonstrate to the Secretary its ability to manage public housing by 
having done so effectively and efficiently for a period of not less 
than 3 years or by arranging for management by a qualified 
management entity. 
"(1) RECORDS AND AUDIT OF RECIPIENTS OF ASSISTANCE.— 
"(1) IN GENERAL.—Each recipient shall keep such records as 
may be regisonably necessary to fully disclose the amount and 
the disposition by such recipient of the proceeds of assistance 
received under this title (and any proceeds from financing 
obtained in accordance with subsection (b) or sales under 
subsections (f) and OgX4)), the total cost of the homeownership 
program in connection with which such gissistance is given or 
used, and the amount and nature of that portion of the program 
supplied by other sources, and such other sources as will facili-
tate an effective audit. 
"(2) ACCESS BY THE SECRETARY.—The Secretary shall have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of the recipient that are perti-
nent to assistance received under this title. 
"(3) ACCESS BY THE COMPTROLLER GENERAL.—The Comptroller 
General of the United States, or any of the duly authorized 
representatives of the Comptroller General, shall also have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of the recipient that are perti-
nent to assistance received under this title. 
42 u s e 
"SEC. 306. DEFINITIONS. 
1437aaa-5. 
,,-r^ 
n.-i' 
.•.-, 
For purposes of this title: 
"(1) The term 'applicant' means the following entities that 
may represent the tenants of the project: 
(A) A public housing agency (including an Indian hous-
ing authority). 
(B) A resident management corporation, established in 
accordance with requirements of the Secretary under sec-
tion 20. 
"(C) A resident council. 
"(D) A cooperative association. 
"(E) A public or private nonprofit organization. 
"(F) A public body, including an agency or instrumental-
ity thereof. 
"(2) The term 'eligible family' means— 
"(A) a family or individual who is a tenant in the public 
or Indian housing project on the date the Secretary ap-
proves an implementation grant; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4159 
"(B) a low-income family; or 
"(C) a family or individual who is assisted under a hous-
ing program administered by the Secretary or the Secretary 
of Agriculture (not including any non-low income families 
assisted under any mortgage insurance program adminis-
tered by either Secretary). 
"(3) The term 'homeownership program' means a program for 
homeownership meeting the requirements under this title. 
"(4) The term 'recipient' means an applicant approved to 
receive a grant under this title or such other entity specified in 
the approved application that will assume the obligations of the 
recipient under this title. 
"(5) The term 'resident council' means any incorporated non-
profit organization or association that— 
"(A) is representative of the tenants of the housing; 
"(B) adopts written procedures providing for the election 
of officers on a regular basis; and 
"(C) has a democratically elected governing board, elected 
by the tenants of the housing. 
"SEC. 307. RELATIONSHIP TO OTHER HOMEOWNERSHIP OPPORTUNITIES. 
"The program authorized under this title shall be in addition to 
any other public housing homeownership and management 
opportunities, including opportunities under section 5(h) and title II 
of this Act. 
"SEC. 308. LIMITATION ON SELECTION CRITERIA. 
"In esteblishing criteria for selecting applicants to receive assist-
ance under this title, the Secretary may not establish any selection 
criterion or criteria that grant or deny such assistance to an ap-
plicant (or have the effect of granting or denying assistance) based 
on the implementation, continuation, or discontinuation of any 
public policy, regulation, or law of any jurisdiction in which the 
applicant or project is located. 
"SEC. 309. ANNUAL REPORT. 
"The Secretary shall annually submit to the Congress a report 
setting forth— 
"(1) the number, type, and cost of public housing units sold 
pursuant to this title; 
"(2) the income, race, gender, children, and other characteris-
tics of families 
participating 
(or not participating) in 
homeownership programs funded under this title; 
"(3) the amount and type of financial assistence provided 
under and in conjunction with this title; 
"(4) the amount of financial assistance provided under this 
title that was needed to ensure continued affordability and meet 
future maintenance and repair costs; and 
"(5) the recommendations of the Secretery for statutory and 
regulatory improvements to the program.". 
SEC. 412. AMENDMENT TO SECTION 18 REGARDING DEMOLITION AND DIS-
POSITION OF PUBLIC HOUSING. 
(a) OPPORTUNITY TO PURCHASE.—Section 18(bXl) of the United 
States Housing Act of 1937 (42 U.S.C. 1437p(bXl)) is amended by 
striking "disposition" and inserting the following: "disposition, and 
the tenant councils, resident management corporation, and tenant 
42 use 
1437aaa-6. 
42 use 
1437aaa-7. 
42 use 
1437aaa-8. 
104 STAT. 4160 
PUBLIC LAW 101-625—NOV. 28, 1990 
cooperative, if any, have been given appropriate opportunities to 
purchase the project or portion of the project covered by the 
application,". 
(b) APPUCABILITY.—Section 18 of the United States Housing Act of 
1937 (42 U.S.C. 1437p) is amended by adding at the end the following 
new subsection: 
"(e) The provisions of this section shall not apply to the disposition 
of a public housing project in accordance with an approved 
homeownership program under title III of this Act.". 
SEC. 413. RELATED AMENDMENTS TO SECTION 8. 
(a) EuGiBiLiTY.—The first sentence of section 8(oX3) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(oX3)) is amended by— 
(1) striking "or"; and 
(2) inserting the following before the period: ", or 
"(D) a family that qualifies to receive a voucher in connection 
with a homeownership program approved under title IV of the 
Cranston-Gronzalez National Affordable Housing Act". 
(b) REPLACEMENT HOUSING.— 
(1) CERTIFICATES.—Section 8(b) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f[b)) is amended by adding at the end 
the following new paragraph: 
"(2) The Secretary is authorized to enter into annual contributions 
contracts with public housing Eigencies for the purpose of replacing 
public housing transferred in accordance with title III of this Act. 
Each contract entered into under this subsection shall be for a term 
of not more than 60 months.". 
(2) VOUCHERS.—Section 8(o) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(o)) is amended by adding at the end the 
following new paragraph: 
"(9) The Secretary is authorized to enter into contracts with public 
housing agencies to provide rental vouchers for the purpose of 
replacing public housing transferred in accordance with title III of 
this Act. Each contract entered into under this paragraph shall be 
for a term of not more than 60 months.". 
SEC. 414. RELATED CIAP AMENDMENT. 
Section 14 of the United States Housing Act of 1937 (42 U.S.C. 
1437Z) is amended by adding at the end the following subsection: 
"(n) LIMITATION.—The Secretary shall not make assistance under 
this section available with respect to a property transferred under 
title III.". 
SEC. 415. LIMITATION ON SECTION 20 RESIDENT MANAGEMENT FINAN-
CIAL ASSISTANCE. 
Section 20(f) of the United States Housing Act of 1937 (42 U.S.C. 
1437r(f)) is amended by adding at the end the following new para-
graph: 
"(4) LIMITATION REGARDING ASSISTANCE UNDER HOPE GRANT 
PROGRAM.—The Secretary may not provide financial assistance 
under this subsection to any resident management corporation 
or resident council with respect to which assistance for the 
development or formation of such entity is provided under 
title III.". 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4161 
SEC. 416. EXTENSION OF SECTION 21 HOMEOWNERSHIP PROGRAM AND 
PROVISION OF TECHNICAL AND OTHER ASSISTANCE. 
Section 21(a) of the United States Housing Act of 1937 (42 U.S.C. 
1437s(a)) is amended— 
(1) by striking subparagraph (B) of paragraph (2) and insert-
ing the following new subparagraph: 
"(B) The Secretary may provide financial assistance to 
public housing agencies, resident management corpora-
tions, or resident councils that obtain, by contract or other-
wise, training, technical 
assistance, and 
educational 
assistance as the Secretary determines to be necessary to 
promote homeownership opportunities under this section."; 
(2) in paragraph (2XC), by striking "September 30, 1990." and 
inserting the following: "the effective date of the regulations 
implementing title III of this Act. The Secretary may not 
provide financial assistance under subparagraph (B), after such 
effective date, unless the Secretary determines that such assist-
ance is necessary for the development of a homeownership 
program that was initiated, as determined by the Secretary, 
before the date of the enactment of such Act."; and 
(3) in paragraph (3XC), by striking "September 30, 1990." and 
inserting the following: "the effective date of the regulations 
implementing title III of this Act. The authority for a resident 
management corporation to purchase 1 or more multifamily 
buildings in a public housing project from a public housing 
agency shall terminate after such effective date, unless the 
Secretary determines that such purchase is necessary for the 
development of a homeownership program that was initiated, as 
determined by the Secretary, before the date of the enactment 
of such title.". 
SEC. 417. AMENDMENT TO SECTION 5(h). 
(a) IN GENERAL.— Section 5(h) of the United States Housing Act of 
1937 (42 U.S.C. 1437c(h)) is amended by adding at the end the 
following: "Any such sale shall be subject to the restrictions con-
tained in section 304(g).". 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall not apply to applications submitted under section 5(h) of the 
United States Housing Act of 1937 prior to October 1,1990. 
SEC. 418. IMPLEMENTATION. 
Not later than the expiration of the 180-day period beginning on 
the date that funds authorized under title III of the United States 
Housing Act of 1937 first become available for obligation, the Sec-
retary shall by notice establish such requirements as may be nec-
essary to carry out the provisions of this subtitle. Such requirements 
shall be subject to section 553 of title 5, United States Code. The Regulations 
Secretary shall issue regulations based on the initial notice before 
the expiration of the 8-month period beginning on the date of the 
notice. 
42 use 1437c 
note. 
42 use 1437aaa 
note. 
SEC. 419. APPLICABILITY TO INDIAN PUBLIC HOUSING. 
In accordance with section 201(bX2) of the United States Housing 
Act of 1937, the amendments made by this subtitle shall also apply 
to public housing developed or operated pursuant to a contract 
between the Secretary of Housing and Urban Development and an 
42 use 1437aa 
note. 
104 STAT. 4162 
PUBLIC LAW 101-625—NOV. 28, 1990 
Indian housing authority, except that nothing in this title affects 
the program under section 202 of such Act. 
Subtitle B—HOPE for Homeownership of 
Multifamily Units 
42 use 12871. 
SEC. 421. PROGRAM AUTHORITY. 
(a) IN GENERAL.—The Secretary is authorized to make— 
(1) planning 
grants to enable 
applicants to develop 
homeownership programs; and 
(2) implementation grants to enable applicants to carry out 
homeownership programs. 
(b) AUTHORITY TO RESERVE HOUSING ASSISTANCE.—In connection 
with a grant under this subtitle, the Secretary may reserve author-
ity to provide assistance under section 8 of the United States 
Housing Act of 1937 to the extent necessary to provide rental 
assistance for a nonpurchasing tenant who resides in the project on 
the date the Secretary approves the application for an implementa-
tion grant, for use by the tenant in another project. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be 
appropriated for grants under this subtitle $51,000,000 for fiscal 
year 1991 and $280,000,000 for fiscal year 1992. Any amounts appro-
priated pursuant to this subsection shall remain available until 
expended. 
42 use 12872. 
SEC. 422. PLANNING GRANTS. 
(a) GRANTS.—The Secretary is authorized to make planning grants 
to applicants for the purpose of developing homeownership pro-
grams under this subtitle. The amount of a planning grant under 
this section may not exceed $200,000, except that the Secretary may 
for good cause approve a grant in a higher amount. 
03) ELIGIBLE ACTIVITIES.—Planning grants may be used for activi-
ties to develop homeownership programs (which may include pro-
grams for cooperative ownership), including— 
(1) development of resident management corporations and 
resident councils; 
(2) training and technicsil assistance of applicants related to 
the development of a specific homeownership program; 
(3) studies of the feasibility of a homeownership program; 
(4) preliminary architectural and engineering work; 
(5) tenant and homebuyer counseling and training; 
(6) planning for economic development, job training, and self-
sufficiency activities that promote economic self-sufficiency for 
homebuyers and homeowners under the homeownership 
program; 
(7) development of security plans; and 
(8) preparation of an application for an implementation grant 
under this subtitle. 
(c) APPUCATION.— 
(1) FORM AND PROCEDURES.—An application for a planning 
grant shall be submitted by an applicant in such form and in 
accordance with such procedures as the Secretary shall estab-
lish. 
(2) MINIMUM REQUIREMENTS.—The Secretary shall require 
that an application contain at a minimum— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4163 
(A) a request for a planning grant, specifying the activi-
ties proposed to be carried out, the schedule for completing 
the activities, the personnel necessary to complete the 
activities, and the amount of the grant requested; 
(B) a description of the applicant and a statement of its 
qualifications; 
(C) identification and description of the eligible property 
involved, and a description of the composition of the ten-
ants, including family size and income; 
(D) a certification by the public official responsible for 
submitting the comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed activities are 
consistent with the approved housing strategy of the State 
or unit of general local government within which the 
project is located (or, during the first 12 months after 
enactment of this Act, that the application is consistent 
with such other existing State or local housing plan or 
strategy that the Secretary shall determine to be appro-
priate); and 
(E) a certification that the applicant will comply with the 
requirements of the Fair Housing Act, title VI of the Civil 
Rights Act of 1964, section 504 of the Rehabilitation Act of 
1973, and the Age Discrimination Act of 1975, and will 
affirmatively further fair housing. 
(d) SELECTION CRITERIA.—The Secretary shall, by regulation, Regulations, 
establish selection criteria for a national competition for assistance 
under this section, which shall include— 
(1) the qualifications or potential capabilities of the applicant; 
(2) the extent of tenant interest in the development of a 
homeownership program for the property; 
(3) the potential of the applicant for developing a successful 
and affordable homeownership program and the suitability of 
the property for homeownership; 
(4) national geographic diversity among housing for which 
applicants are selected to receive assistance; and 
(5) such other factors that the Secretary shall require that (in 
the determination of the Secretary) are appropriate for pur-
poses of carr3ring out the program established by this subtitle in 
an effective and efficient manner. 
SEC. 423. IMPLEMENTATION GRANTS. 
(a) GRANTS.—The Secretary is authorized to make implementation 
grants to applicants for the purpose of carrying out homeownership 
programs approved under this subtitle. 
(b) ELIGIBLE ACTIVITIES.—Implementation grants may be used for 
activities to carry out homeownership programs (including pro-
grams for cooperative ownership), including the following activities: 
(1) Architectural and engineering work, 
(2) Acquisition of the eligible property for the purpose of 
transferring ownership to eligible families in accordance with a 
homeownership program that meets the requirements under 
this subtitle. 
(3) Rehabilitation of any property covered by the homeowner-
ship program, in accordance with standards established by the 
Secretary. 
42 u s e 12873. 
104 STAT. 4164 
PUBLIC LAW 101-625—NOV. 28, 1990 
(4) Administrative costs of the applicant, which may not 
exceed 15 percent of the sunount of the assistance provided 
under this section. 
(5) Development of resident management corporations and 
resident management councils, but only if the applicant has not 
received assistance under section 322 for such activities. 
(6) Counseling and training of homebuyers and homeowners 
under the homeownership program. 
(7) Relocation of tenants who elect to move. 
(8) Any necessary temporary relocation of tenants during 
rehabilitation. 
(9) Planning for establishment of for- or not-for-profit small 
businesses by or on behalf of residents, job training, and other 
activities that promote economic self-sufficiency of homebuyers 
and homeowners of the property covered by the homeownership 
program and economic development of the neighborhood. 
(10) Funding of operating expenses and replacement reserves 
of the property covered by the homeownership program. 
(11) Legal fees. 
(12) Defra3dng costs for the ongoing training needs of the 
recipient that are related to developing and carr3ring out the 
homeownership program. 
(13) Ek;onomic development activities that promote economic 
self-sufficiency 
of homebuyers, residents, and homeowners 
under the homeownership program. 
(c) MATCHING FUNDING.— 
(1) IN GENERAL.—Each recipient shall assure that contribu-
tions equal to not less than 33 percent of the grant amounts 
made available under this section, excluding any amounts pro-
vided for post-sale operating expense, shall be provided from 
non-Federal sources to carry out the homeownership program. 
(2) FORM.—Such contributions may be in the form of— 
(A) cash contributions from non-Federal resources, which 
may not include funds from a grant made under section 
106(b) or section 106(d) of the Housing and Community 
Development Act of 1974; 
(B) pajrment of administrative expenses, as defined by the 
Secretary, from non-Federal resources, including funds 
from a grant made under section 106(b) or section 106(d) of 
the Housing and (Community Development Act of 1974; 
(C) the value of taxes, fees, or other charges that are 
normally and customarily imposed but are waived, fore-
gone, or deferred in a manner that facilitates the im-
plementation of a homeownership program assisted under 
this subtitle; 
(D) the value of land or other real property as appraised 
according to procedures acceptable to the Secretary; 
(E) the value of investment in on-site and off-site infra-
structure required for a homeownership program assisted 
under this subtitle; or 
(F) such other in-kind contributions as the Secretary may 
approve. 
Contributions for administrative expenses shall be recognized 
only up to an amount equal to 7 percent of the total amount of 
grants made available under this section. 
(d) APPLICATION.— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4165 
(1) FORM AND PROCEDURE.—An application for an implementa-
tion grant shall be submitted by an applicant in such form and 
in accordance with such procedures as the Secretary shall 
establish. 
(2) MINIMUM REQUIREMENTS.—The Secretary shall require 
that an application contain at a minimum— 
(A) a request for an implementation grant, specifying the 
amount of the grant requested and its proposed uses; 
(B) if applicable, an application for assistance under sec-
tion 8 of the United States Housing Act of 1937, specifying 
the proposed uses of such assistance and the period during 
which the assistance will be needed; 
(C) a description of the qualifications and experience of 
the applicant in providing low-income housing; 
(D) a description of the proposed homeownership pro-
gram, consistent with section 324 and the other require-
ments of this subtitle, specifying the activities proposed to 
be carried out and their estimated costs, identifjdng reason-
able schedules for carrying it out, and demonstrating the 
program will comply with the affordability requirements 
under section 324(b); 
(E) identification and description of the property in-
volved, and a description of the composition of the tenants, 
including family size and income; 
(F) a description of and commitment for the resources 
that are expected to be made available to provide the 
matching funding required under subsection (c) and of 
other resources that are expected to be made available in 
support of the homeownership program; 
(G) identification and description of the financing pro-
posed for any (i) rehabilitation and (ii) acquisition (I) of the 
property, by an entity for transfer to eligible families, and 
(II) by eligible families of ownership interests in, or shares 
representing, units in the project; 
(H) the proposed sales price, the basis for such price 
determination, and terms to an entity, if any, that will 
purchase the property for resale to eligible families; 
(I) the proposed sales prices, if any, and terms to eligible 
families; 
(J) any proposed restrictions on the resale of units under 
a homeownership program; 
(K) identification and description of the entity that will 
operate and manage the property; 
(L) a certification by the public official responsible for 
submitting the comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed activities are 
consistent with the approved housing strategy of the State 
or unit of general local government within which the 
project is located (or, during the first 12 months after 
enactment of this Act, that the application is consistent 
with such other existing State or local housing plan or 
strategy that the Secretary shadl determine to be appro-
priate); and 
(M) a certification that the applicant will comply with the 
requirements of the Fair Housing Act, title VI of the Civil 
Rights Act of 1964, section 504 of the Rehabilitation Act of 
104 STAT. 4166 
PUBLIC LAW 101-625—NOV. 28, 1990 
1973, and the Age Discrimination Act of 1975, and will 
affirmatively further fair housing. 
(d) SELECTION CRITERIA.—The Secretary shall establish selection 
criteria for assistance under this section, which shsdl include— 
(1) the qualifications or potential capabilities of the applicant; 
(2) the feasibility of the homeownership program; 
(3) the extent of tensuit interest in the development of a 
homeownership program for the property; 
(4) the potential for developing an affordable homeownership 
program and the suitability of the property for homeownership; 
(5) national geographic diversity among housing for which 
applicants are selected to receive assistance; 
(6) the extent to which a sufficient supply of affordable rental 
housing of the tjrpe assisted under this title exists in the local-
ity, so that the implementation of the homeownership program 
will not appreciably reduce the number of such rental units 
available to residents currently residing in such units or eligible 
for residency in such units; and 
(7) such other factors as the Secretary determines to be 
appropriate for purposes of carrying out the program estab-
lished by the subtitle in an effective and efficient manner. 
(e) APPROVAL.—The Secretary shall notify each applicant, not 
later than 6 months after the date of the submission of the applica-
tion, whether the application is approved or not approved. The 
Secretary may approve the application for an implementation grant 
with a statement that the application for the section 8 assistance for 
residents of the project not purchasing units is conditionally ap-
proved, subject to the availability of appropriations in subsequent 
fiscal years. 
42 use 12874. 
SEC. 424. HOMEOWNERSHIP PROGRAM REQUIREMENTS. 
(a) IN GENERAL.—A homeownership progrsim under this subtitle 
shall provide for acquisition by eligible families of ownership in-
terest in, or shares representing, the units in an eligible property 
under any arrangement determined by the Secretary to be appro-
priate, such as cooperative ownership (including limited equity co-
operative ownership) and fee simple ownership (including condomin-
ium ownership), for occupancy by the eligible families. 
(b) AFFORDABILTTY.—A homeownership program under this sub-
title shall provide for the establishment of sales prices (including 
principal, insurance, taxes, and interest and closing costs) for initisd 
acquisition of the property, and for sales to eligible families, such 
that the eligible family shall not be required to expend more than 30 
percent of the adjusted income of the family per month to complete 
a sale under the homeownership program. 
(c) PLAN.—A homeownership program under this subtitle shall 
provide, and include a plan, for— 
(1) identifying and selecting eligible families to participate in 
the homeownership program; 
(2) providing relocation assistance to families who elect to 
move; 
(3) ensuring continued affordability by tenants, homebuyers, 
and homeowners in the property; and 
(4) providing ongoing training and counseling for homebuyers 
and homeowners. 
(d) ACQUISITION AND REHABILITATION LIMFTATION.—Acquisition or 
rehabilitation of a property under a homeownership program under 
* , -i?*- <• 
:^j^f<fH'sff^. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4167 
this subtitle may not consist of acquisition or rehabilitation of less 
than all of the units in the property. The provisions of this subsec-
tion may be waived upon a finding by the Secretary that the sale of 
less than all the buildings in a project is feasible and will not result 
in a hardship to any tenants of the project who are not included in 
the homeownership program. 
(e) FINANCING.— 
(1) IN GENERAL.—The application shall identify and describe 
the proposed financing for (A) any rehabilitation, and (B) ac-
quisition (i) of the project, where applicable, by an entity for 
transfer to eligible families, and (ii) by eligible families of 
ownership interests in, or shares representing, units in the 
project. Financing may include use of the implementation 
grant, sale for cash, or other sources of financing (subject to 
applicable requirements), including conventional mortgage 
loans and mortgage loans insured under title II of the National 
Housing Act. 
(2) PROHIBITION 
AGAINST 
PLEDGES.—Property 
transferred 
under this subtitle shall not be pledged as collateral for debt or 
otherwise encumbered except when the Secretary determines 
that— 
(A) such encumbrance will not threaten the long-term 
availability of the property for occupancy by low-income 
families; 
(B) neither the Federal Government nor the public hous-
ing agency will be exposed to undue risks related to action 
that may have to be taken pursuant to paragraph (3); 
(C) any debt obligation can be serviced from project 
income, including operating assistance; and 
(D) the proceeds of such encumbrance will be used only to 
meet housing standards in accordance with subsection (f) or 
to make such additional capital improvements as the Sec-
retary determines to be consistent with the purposes of this 
subtitle. 
(3) OPPORTUNITY TO CURE.—Any lender that provides financ-
ing in connection with a homeownership program under this 
subtitle shall give the public housing agency, resident manage-
ment corporation, individual owner, or other appropriate entity 
a reasonable opportunity to cure a financial default before 
foreclosing on the property, or taking other action as a result of 
the default. 
(f) HOUSING QUALITY STANDARDS.—The application shall include a 
plan ensuring that the unit— 
(1) will be free from any defects that pose a danger to health 
or safety before transfer of an ownership interest in, or shares 
representing, a unit to an eligible family; and 
(2) will, not later than 2 years after the transfer to an eligible 
family, meet minimum housing standards established by the 
Secretary for the purpose of this title. 
(g) PROTECTION OF NONPURCHASING FAMILIES.— 
(1) IN GENERAL.—No tenant residing in a dwelling unit in a 
property on the date the Secretary approves an application for 
an implementation grant may be evicted by reason of a 
homeownership program approved under this subtitle. 
(2) RENTAL ASSISTANCE.—If a tenant decides not to purchase a 
unit, or is not qualified to do so, the Secretary shall, subject to 
the availability of appropriations, ensure that rental assistance 
104 STAT. 4168 
PUBLIC LAW 101-625—NOV. 28, 1990 
under section 8 is available for use by each otherwise qualified 
tenant in that or another property. 
(3) RELOCATION ASSISTANCE.—The recipient shall also inform 
each such tenant that if the tenant chooses to move, the recipi-
ent will pay relocation assistance in accordance with the ap-
proved homeownership program. 
42 use 12875. 
SEC. 425. OTHER PROGRAM REQUIREMENTS. 
(a) PREFERENCES.—In selecting eligible families for homeowner-
ship, the recipient shall give a first preference to otherwise qualified 
current tenants and a second preference to otherwise qualified 
eligible families who have completed participation in an economic 
self-sufficiency program specified by the Secretary. 
(b) COST LIMITATIONS.—The Secretary may establish cost limita-
tions on eligible activities under this subtitle, subject to the provi-
sions of this subtitle. 
(c) USE OF PROCEEDS FROM SALES TO ELIGIBLE FAMIUES.—The 
entity that transfers ownership interests in, or shares representing, 
units to eligible families, or another entity specified in the approved 
application, shall use the proceeds, if any, from the initial sale for 
costs of the homeownership program, including operating expenses, 
improvements to the project, business opportunities for low-income 
families, supportive services related to the homeownership program, 
additional homeownership opportunities, and other activities ap-
proved by the Secretary. 
(d) RESTRICTIONS ON RESALE BY HOMEOWNERS.— 
(1) IN GENERAL.— 
(A) 
TRANSFER 
PERMITTED.—A homeowner 
under a 
homeownership program may transfer the homeowner's 
ownership interest in, or shares representing, the unit, 
except that a homeownership program may establish 
restrictions on the resale of unite under the program. 
(B) RIGHT TO PURCHASE.—Where a resident management 
corporation, resident council, or cooperative has jurisdiction 
over the unit, the corporation, council, or cooperative shall 
have the right to purchase the ownership interest in, or 
shares representing, the unit from the homeowner for the 
amount specified in a firm contract between the home-
owner and a prospective buyer. If such an entity does not 
have jurisdiction over the unit or electe not to purchase and 
if the prospective buyer is not a low-income family, the 
public housing agency or the implementation grant recipi-
ent shall have the right to purchase the ownership interest 
in, or shares representing, the unit for the same amount. 
(C) PROMISSORY NOTE REQUIRED.—The homeowner shall 
execute a promissory note equal to the difference between 
the market value and the purchase price, payable to the 
public housing agency or other entity designated in the 
homeownership plan, together with a mortgage securing 
the obligation of the note. 
(2) 6 YEARS O
R LESS.—In the case of a transfer within 6 years of 
the acquisition under the program, the homeownership pro-
gram shall provide for appropriate restrictions to assure that an 
eligible family may not receive any undue profit. The plan shall 
provide for limiting the family's consideration for ite interest in 
the property to the total of— 
(A) the contribution to equity paid by the family; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4169 
(B) the value, as determined by such means as the Sec-
retary shall determine through regulation, of £iny improve-
ments installed at the expense of the family during the 
family's tenure as owner; and 
(C) the appreciated value determined by an inflation 
allowance at a rate which may be based on a cost-of-living 
index, an income index, or market index as determined by 
the Secretary through regulation and agreed to by the 
purchaser and the entity that transfers ownership interests 
in, or shares representing, units to eligible feimilies (or 
another entity specified in the approved application), at the 
time of initial sale, and applied ageiinst the contribution to 
equity. 
Such an entity may, at the time of initial sale, enter into an 
agreement with the family to set a maximum amount which 
this appreciation may not exceed. 
(3) 6-20 YEARS.—In the case of a transfer during the period 
beginning 6 years after the acquisition and ending 20 years 
after the acquisition, the homeownership program shall provide 
for the recapture by the Secretary or the program of an amount 
equal to the amount of the declining balance on the note 
described in paragraph (1)(C). 
(4) USE OF RECAPTURED FUNDS.—Fifty percent of any portion of 
the net sales proceeds that may not be retained by the home-
owner under the plan approved pursuant to this subsection 
shall be paid to the entity that transferred ownership interests 
in, or shares representing, units to eligible families, or another 
entity specified in the approved application, for use for improve-
ments to the project, business opportunities for low-income 
families, supportive services related to the homeownership pro-
gram, additional homeownership opportunities, and other 
activities approved by the Secretary. The remaining 50 percent 
shall be returned to the Secretary for use under this subtitle, 
subject to limitations contained in appropriations Acts. Such 
entity shall keep and make available to the Secretary all 
records necessary to calculate accurately pa3mients due the 
Secretary under this subsection. 
(e) THIRD PARTY RIGHTS.—The requirements under this subtitle 
regarding quality standards, resale, or transfer of the ownership 
interest of a homeowner shall be judicially enforceable against the 
grant recipient with respect to actions involving rehabilitation, and 
against purchasers of property under this subsection or their succes-
sors in interest with respect to other actions by affected low-income 
families, resident management corporations, resident councils, 
public housing agencies, and any agency, corporation, or authority 
of the United States Government. The parties specified in the 
preceding sentence shall be entitled to reasonable attorney fees 
upon prevailing in any such judicial action. 
(f) DOLLAR LIMITATION ON ECONOMIC DEVELOPMENT ACTIVITIES.— 
Not more than an aggregate of $250,000 from amounts made avail-
able under sections 422 and 423 may be used for economic develop-
ment activities under sections 4220)X6) and 4230)X9) for any project. 
(g) TIMELY HOMEOWNERSHIP.—Recipients shall transfer ownership 
of the property to tenants within a specified period of time that the 
Secretary determines to be reasonable. During the interim period 
when the property continues to be operated and managed as rental 
104 STAT. 4170 
PUBLIC LAW 101-625—NOV. 28, 1990 
housing, the recipient shall utilize written tenant selection policies 
and criteria that are approved by the Secretary as consistent with 
the purpose of improving housing opportunities for low-income fami-
lies. The recipient shall promptly notify in writing any rejected 
applicant of the grounds for any rejection, 
(h) RECORDS AND AUDIT OF RECIPIENTS OF ASSISTANCE.— 
(1) IN GENERAL.—Each recipient shall keep such records as 
may be reasonably necessary to fully disclose the amount and 
the disposition by such recipient of the proceeds of assistance 
received under this subtitle (and any proceeds from financing 
obtained or sales under subsections (c) and (d)), the total cost of 
the homeownership program in connection with which such 
assistance is given or used, and the amount and nature of that 
portion of the program supplied by other sources, and such 
other sources as will facilitate an effective audit. 
(2) ACCESS BY THE SECRETARY.—The Secretary shall have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of the recipient that are perti-
nent to assistance received under this subtitle. 
(3) ACCESS BY THE COMPTROLLER GENERAL.—The Comptroller 
General of the United States, or any of the duly authorized 
representatives of the Comptroller General, shall also have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of the recipient that are perti-
nent to assistance received under this subtitle. 
(i) CERTAIN ENTITIES NOT EUGIBLE.—Any entity that assumes, as 
determined by the Secretary, a mortgage covering eligible property 
in connection with the acquisition of the property from an owner 
under this section must comply with any low-income affordability 
restrictions for the remaining term of the mortgage. This require-
ment shall only apply to an entity, such as a cooperative association, 
that, as determined by the Secretary, intends to own the housing on 
a permanent beisis. 
42 u s e 12876. 
SEC. 426. DEFINITIONS. 
For purposes of this subtitle: 
(1) The term "applicant" means the following entities that 
may represent the tenants of the housing: 
(A) A resident management corporation established in 
accordance with the requirements of the Secretary under 
section 20 of the United States Housing Act of 1937. 
(B) A resident council. 
(C) A cooperative association. 
(D) A public or private nonprofit organization. 
(E) A public body (including an agency or instrumentality 
thereof). 
(F) A public housing agency (including an Indian housing 
authority). 
(2) The term "eligible family" means a family or individual— 
(A) who is a tenant of the eligible property on the date 
the Secretary approves an implementation grant; or 
(B) whose income does not exceed 80 percent of the 
median income for the area, as determined by the Secretary 
with adjustments for smaller and larger families. 
(3) The term "eligible property" means a multifamily rental 
property, containing 5 or more units, that is— 
(A) owned or held by the Secretary; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4171 
(B) financed by a loan or mortgage held by the Secretary 
or insured by the Secretary; 
(C) determined by the Secretary to have serious physical 
or financial problems under the terms of an insurance or 
loan program administered by the Secretary; or 
(D) owned or held by the Secretary of Agriculture, the 
Resolution 
Trust 
Corporation, 
or 
a 
State 
or 
local 
government. 
(4) The term "homeownership program" means a program for 
homeownership under this subtitle. 
(5) The term "Indian housing authority" has the meaning 
given such term in section 3(bXll) of the United States Housing 
Act of 1937. 
(6) The term "low-income family" has the meaning given such 
term in section 3(bX2) of the United States Housing Act of 1937. 
(7) The term "public housing agency" has the meeining given 
such term in section 3(bX6) of the United States Housing Act of 
1937. 
(8) The term "recipient" means an applicant approved to 
receive a grant under this title or such other entity specified in 
the approved application that will £issume the obligations of the 
recipient under this subtitle. 
(9) The term "resident council" means any incorporated non-
profit organization or association that— 
(A) is representative of the tenants of the housing; 
(B) adopts written procedures providing for the election of 
officers on a regular basis; and 
(C) has a democratically elected governing board, elected 
by the tenants of the housing. 
(10) The term "Secretary" means the Secretary of Housing 
and Urban Development. 
SEC. 427. EXEMPTION. 
Eligible property covered by a homeownership program approved 
under this subtitle shall not be subject to— 
(1) the Low-Income Housing Preservation and Resident 
Homeownership Act of 1990, or 
(2) the requirements of section 203 of the Housing and 
Community Development Amendments of 1978 applicable to the 
sale of projects either at foreclosure or after acquisition by the 
Secretary. 
SEC. 428. LIMITATION ON SELECTION CRITERIA. 
In establishing criteria for selecting applicants to receive assist-
ance under this subtitle, the Secretary may not establish any selec-
tion criterion or criteria that grant or deny such assistance to an 
applicant (or have the effect of granting or denying assistance) based 
on the implementation, continuation, or discontinuation of any 
public policy, regulation, or law of any jurisdiction in which the 
applicant or project is located. 
SEC. 429. AMENDMENT TO NATIONAL HOUSING ACT. 
Section 203(bX9) of the National Housing Act (12 U.S.C. 1709(bX9)) 
is amended by inserting after "Housing Act of 1961," the following: 
"or with respect to a mortgage covering a housing unit in connection 
with a homeownership program under the Homeownership and 
Opportunity Through HOPE Act,". 
42 use 12877. 
42 use 12878. 
104 STAT. 4172 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 12879. 
SEC. 430. IMPLEMENTATION. 
Not later than the expiration of the 180-day period beginning on 
the date that funds authorized under this subtitle first become 
available for obligation, the Secretary shall by notice establish such 
requirements as may be necessary to carry out the provisions of this 
subtitle. Such requirements shall be subject to section 553 of title 5, 
Regulations. 
United States Code. The Secretary shall issue regulations based on 
the initial notice before the expiration of the 8-month period begin-
ning on the date of the notice. 
42 use 12880. 
SEC. 431. ANNUAL REPORT. 
The Secretary shall annually submit to the Congress a report 
setting forth— 
(1) the number, type and cost of eligible properties transferred 
pursuant to this suotitle; 
(2) the income, race, gender, children and other characteris-
tics 
of families 
participating 
(or 
not 
participating) 
in 
homeownership programs funded under this subtitle; 
(3) the amount and type of financial assistance provided 
under and in conjunction with this subtitle; 
(4) the amount of financial assistance provided under this 
subtitle that was needed to ensure continued affordability and 
meet future maintenance and repair costs; and 
(5) the recommendations of the Secretary for statutory and 
regulatory improvements to the program. 
Subtitle C—HOPE for Homeownership of 
Single Family Homes 
42 use 12891. 
SEC. 441. PROGRAM AUTHORITY. 
(a) IN GENERAL.—The Secretary is authorized to make— 
(1) planning grants to help applicants develop homeownership 
programs in accordance with this subtitle; and 
(2) implementation grants to enable applicants to carry out 
homeownership programs in accordance with this subtitle. 
Oi) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 
be appropriated for grants under this subtitle $36,000,000 for fiscal 
year 1991, and $195,000,000 for fiscal year 1992. Any amounts 
appropriated pursuant to this subsection shall remain available 
until expended. 
42 use 12892. 
SEC. 442. PLANNING GRANTS. 
(a) GRANTS.—The Secretary is authorized to make planning grants 
to applicants for the purpose of developing homeownership pro-
grams under this subtitle. The amount of a planning grant under 
this section may not exceed $200,000, except that the Secretary may 
for good cause approve a grant in a higher amount. 
(b) ELIGIBLE AcnviriES.—Planning grants may be used for activi-
ties to develop homeownership programs (which may include pro-
grams for cooperative ownership), including— 
(1) identifying eligible properties; 
(2) training and technical assistance of applicants related to 
the development of a specific homeownership program; 
(3) studies of the feasibility of specific homeownership 
programs; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4173 
(4) preliminary architectural and engineering work; 
(5) homebuyer counseling and training; 
(6) planning for economic development, job training, and self-
sufficiency activities that promote economic self-sufficiency for 
homebuyers and homeowners 
under the homeownership 
program; 
(7) development of security plans; and 
(8) preparation of an application for an implementation grant 
under this subtitle. 
(c) APPLICATION.— 
(1) FORM AND PROCEDURES.—An application for a planning 
grant shall be submitted by an applicant in such form and in 
accordance with such procedures as the Secretary shall 
establish. 
(2) MINIMUM REQUIREMENTS.—The Secretary shall require 
that an application contain at a minimum— 
(A) a request for a planning grant, specifjdng the activi-
ties proposed to be carried out, the schedule for completing 
the activities, the personnel necessary to complete the 
activities, and the amount of the grant requested; 
(B) a description of the applicant and a statement of its 
qualifications; 
(C) identification and description of the eligible properties 
likely to be involved, and a description of the composition of 
the potential homebuyers and residents of the areas in 
which such eligible properties are located, including family 
size £uid income; 
(D) a certification by the public official responsible for 
submitting the comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed activities are 
consistent with the approved housing strategy of the State 
or unit of general local government within which the 
project is located (or, during the first 12 months sifter 
enactment of this Act, that the application is consistent 
with such other existing State or local housing plan or 
strategy that the Secretary shall determine to be appro-
priate); and 
(E) a certification that the applicant will comply with the 
requirements of the Fair Housing Act, title VI of the Civil 
Rights Act of 1964, section 504 of the Rehabilitation Act of 
1973, and the Age Discrimination Act of 1975, and will 
affirmatively further fair housing. 
(d) SELECTION CRITERIA.—The Secretary shall, by regulation. Regulations. 
establish selection criteria for a national competition for assistance 
under this section, which shall include— 
(1) the qualifications or potential capabilities of the applicant; 
(2) the extent of interest in the development of a homeowner-
ship program; 
(3) the potential of the applicant for developing a successful 
£md affordable homeownership program and the availability 
and suitability of eligible properties in the applicable geo-
graphic area with respect to the application; 
(4) national geographic diversity among housing for which 
applicants are selected to receive assistance; and 
(5) such other factors that the Secretary shall require that (in 
the determination of the Secretary) are appropriate for pur-
104 STAT. 4174 
PUBLIC LAW 101-625—NOV. 28, 1990 
poses of carrying out the program established by this subtitle in 
an effective and efficient manner. 
42 use 12893. 
SEC. 443. IMPLEMENTATION GRANTS. 
(a) GRANTS.—The Secretary is authorized to make implementation 
grants to applicants for the purpose of carrjdng out homeownership 
programs approved under this subtitle. 
(b) EuGiBLE ACTIVITIES.—Implementation grants may be used for 
activities to carry out homeownership programs (which may include 
programs for cooperative ownership), including the 
following 
activities: 
(1) Architectural and engineering work. 
(2) Acquisition of the property for the purpose of transferring 
ownership to eligible families in accordance with a homeowner-
ship program meeting the requirements of this subtitle. 
(3) Rehabilitation of the property covered by the homeowner-
ship program, in accordance with standards established by the 
Secretary. 
(4) Administrative costs of the applicant, which may not 
exceed 15 percent of the amount of assistance provided under 
this section. 
(5) Counseling and training of homebuyers and homeowners 
under the homeownership program. 
(6) Relocation of eligible families who elect to move. 
(7) Any necessary temporary relocation of homebuyers during 
rehabilitation. 
(8) Legal fees. 
(9) Defra3dng costs for the ongoing training needs of the 
recipient that are related to developing and carrying out the 
homeownership program. 
(10) Economic development activities that promote economic 
self-sufficiency of homebuyers and homeowners under the 
homeownership program. 
(c) MATCHING FUNDING.— 
(1) IN GENERAL.—Each recipient shall assure that contribu-
tions equal to not less than 33 percent of the grant amounts 
under this section are provided from non-Federal sources to 
carry out the homeownership program. 
(2) FORM.—Such contributions may be in the form of— 
(A) cash contributions from non-Federal resources which 
may not include funds from a grant made under section 
106(b) or section 106(d) of the Housing and Community 
Development Act of 1974; 
(B) payment of administrative expenses, as defined by the 
Secretary, from non-Federal resources, including funds 
from a grant made under section 106(b) or section 106(d) of 
the Housing and Community Development Act of 1974; 
(C) the value of taxes, fees, or other charges that are 
normally and customarily imposed but are waived, fore-
gone, or deferred 
in a manner that facilitates 
the 
implementation of a homeownership program assisted 
under this subtitle; 
(D) the value of investment in on-site and off-site infra-
structure required for a homeownership program assisted 
under this subtitle; or 
(E) such other in-kind contributions as the Secretary may 
approve. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4175 
Contributions for administrative expenses shall be recognized only 
up to an amount equal to 7 percent of the total amount of grante 
made available under this section, 
(d) APPLICATION.— 
(1) FORM AND PROCEDURE.—An application for an implementa-
tion grant shall be submitted by an applicant in such form and 
in accordance with such procedures as the Secretary shall 
establish. 
(2) MINIMUM REQUIREMENTS.—The Secretary shall require 
M that an application contain at a minimum— 
(A) a request for an implementation grant, specif5dng the 
amount of the grant requested and its proposed uses; 
(B) a description of the qualifications and experience of 
the applicant in providing low-income housing; 
(C) a description of the proposed homeownership pro-
gram, consistent with section 444 and the other require-
ments of this subtitle specifying the activities proposed to 
be carried out and their estimated costs, identifying reason-
able schedules for carr)dng it out, and demonstrating that 
the program will comply with the affordability require-
ments under section 444(b); 
(D) an identification and description of the properties to 
be acquired under the homeownership program and a 
description of the composition of potential eligible families, 
including family size and income; 
(E) a description of and commitment for the resources 
that are expected to be made available to provide the 
matching funding required under subsection (c) and of 
other resources that are expected to be made available in 
support of the homeownership progrsun; 
(F) identification and description of the financing pro-
posed for any (i) rehabilitation and (ii) acquisition (I) of the 
project, where applicable, by an entity for transfer to eli-
gible families, and (II) by eligible families of ownership 
interests in, or shares representing, units in the project; 
(G) the proposed sales prices for the properties, the basis 
for such price determinations, and terms to an entity, if 
any, that will purchase that property for resale to eligible 
families; 
(H) the proposed sales prices, if any, and terms to eligible 
families; 
(I) identification and description of the entity that will 
operate and manage the property; 
(J) a certification by the public official responsible for 
submitting the comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gonzalez Nationsd 
Affordable Housing Act that the proposed activities are 
consistent with the approved housing strategy of the State 
or unit of general local government within which the 
project is located (or, during the first 12 months after 
enactment of this Act, that the application is consistent 
with such other existing State or local housing plan or 
strategy that the Secretary shall determine to be appro-
priate); and 
(K) a certification that the applicant will comply with the 
requirements of the Fair Housing Act, title VI of the Civil 
Rights Act of 1964, section 504 of the Rehabilitation Act of 
104 STAT. 4176 
PUBLIC LAW 101-625—NOV. 28, 1990 
1973, and the Age Discrimination Act of 1975, and will 
affirmatively further fair housing. 
(e) SELECTION CRITERIA.—The Secretary shall establish selection 
criteria for assistance under this subtitle, which shall include— 
(1) the ability of the applicant to develop and carry out the 
proposed homeownership program, taking into account the 
qualifications and experience of the applicant and the quality of 
any related ongoing program of the applicant; 
(2) the feasibility of the homeownership program; 
(3) the quality and viability of the proposed homeownership 
program; 
(4) the extent to which suitable eligible property is available 
for use under the program in the area to be served, and the 
extent to which the t3rpes of property expected to be covered by 
the proposed homeownership program are federally owned; 
(5) whether the approved comprehensive housing affordability 
strategy for the jurisdiction within which the eligible property 
is located includes the proposed homeownership program as one 
of the general priorities identified pursuant to section 105(bX7) 
of the Cranston-Gonzalez National Affordable Housing Act; 
(6) national geographic diversity among housing for which 
applicants are selected to receive assistance; and 
(7) the extent to which a sufficient supply of affordable rental 
housing of the type assisted under this subtitle exists in the 
locality, so that the implementation of the homeownership 
program will not appreciably reduce the number of such rental 
units available to residents currently residing in such units or 
eligible for residency in such units. 
(f) APPROVAL.—The Secretary shall notify each applicant, not 
later than 6 months after the date of the submission of the applica-
tion, whether the application is approved or not approved. 
42 use 12894. 
SEC. 444. HOMEOWNERSHIP PROGRAM REQUIREMENTS. 
(a) IN GENERAL.—A homeownership program under this subtitle 
shall provide for acquisition by eligible families of ownership in-
terests in, or shares representing, units in an eligible property under 
any arrangement determined by the Secretary to be appropriate, 
such as cooperative ownership (including limited equity cooperative 
ownership) and fee simple ownership (including condominium 
ownership), for occupancy by the eligible families. 
(b) AFFORDABIUTY.—A homeownership program under this sub-
title shall provide for the establishment of sales prices (including 
principal, insurance, taxes, and interest and closing costs) for initial 
acquisition of the property, and for sales to eligible families, such 
' 
that the eligible family shall not be required to expend more than 30 
percent of the adjusted income of the family per month to complete 
a sale under the homeownership program. 
(c) EuGiBLE PROPERTY.—A property may not participate in a 
homeownership program under this subtitle unless all tenants or 
occupants of the property (at the time of the application for the 
implementation grant covering the property is filed with the Sec-
retary) participate in the homeownership program. 
(d) PLAN.—A homeownership program under this subtitle shall 
provide, and include a plan, for— 
(1) identifying and selecting eligible families to participate in 
the homeownership program; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4177 
(2) providing relocation assistance to families who elect to 
move; and 
(3) ensuring continued affordability of the property to home-
buyers and homeowners. 
(e) HOUSING QUALITY STANDARDS.—The application shall include a 
plan ensuring that the unit— 
(1) will be free from any defects that pose a danger to health 
or safety before transfer of an ownership interest in, or shares 
representing, a unit to an eligible family; and 
(2) will, not later than 2 years after the transfer to an eligible 
family, meet minimum housing standards established by the 
Secretary for the purpose of this title. 
SEC. 445. OTHER PROGRAM REQUIREMENTS. 
42 USC 12895. 
(a) COST LIMITATIONS.—The Secretary may establish cost limita-
tions on eligible activities under this subtitle, subject to the provi-
sions of this subtitle. 
(b) USE OF PROCEEDS FROM SALES TO ELIGIBLE FAMIUES.—Any 
entity that transfers ownership interests in, or shares representing, 
units to eligible families, or another entity specified in the approved 
application, may use the proceeds, if any, from the initial sale for 
costs of the homeownership program, including operating expenses, 
improvements to the project, business opportunities for low-income 
fsunilies, supportive services related to the homeownership program, 
additional homeownership opportunities, and other 
activities 
approved by the Secretary. 
(c) RESTRICTIONS ON RESALE BY HOMEOWNERS.— 
(1) IN GENERAL.— 
(A) 
TRANSFER 
PERMITTED.—A homeowner 
under a 
homeownership program may transfer the homeowner's 
ownership interest in, or shares representing, the unit, 
except that a homeownership program may establish 
restrictions on the resale of unite under the program. 
(B) RIGHT TO PURCHASE.—Where a resident management 
corporation, resident council, or cooperative has jurisdiction 
over the unit, the corporation, council, or cooperative shall 
have the right to purchase the ownership interest in, or 
shares representing, the unit from the homeowner for the 
amount specified in a firm contract between the home-
owner and a prospective buyer. If such an entity does not 
have jurisdiction over the unit or elects not to purchase and 
if the prospective buyer is not a low-income family, the 
public housing eigency or the implementation grant recipi-
ent shall have the right to purchase the ownership interest 
in, or shares representing, the unit for the same amount. 
(C) PROMISSORY NOTE REQUIRED.—The homeowner shall 
execute a promissory note equal to the difference between 
the market value and the purchase price, payable to the 
public housing agency or other entity designated in the 
homeownership plan, together with a mortgage securing 
the obligation of the note. 
(2) 6 YEARS OR LESS.—In the case of a transfer within 6 years of 
the acquisition under the program, the homeownership pro-
gram shall provide for appropriate restrictions to assure that an 
eligible family may not receive any undue profit. The plan shall 
provide for limiting the family's consideration for its interest in 
the property to the total of— 
104 STAT. 4178 
PUBLIC LAW 101-625—NOV. 28, 1990 
(A) the contribution to equity paid by the family; 
(B) the value, as determined by such means as the Sec-
retary shall determine through regulation, of any improve-
ments installed at the expense of the family during the 
family's tenure as owner; and 
(C) the appreciated value determined by an inflation 
allowance at a rate which may be based on a cost-of-living 
index, an income index, or market index as determined by 
the Secretary through regulation and agreed to by the 
purchaser and the entity that transfers ownership interests 
in, or shares representing, units to eligible families (or 
another entity specified in the approved application), at the 
time of initial sale, and applied against the contribution to 
equity. 
Such an entity may, at the time of initial sale, enter into an 
agreement with the family to set a maximum amount which 
this appreciation may not exceed. 
(3) 6-20 YEARS.—In the case of a transfer during the period 
beginning 6 years after the acquisition and ending 20 years 
after the acquisition, the homeownership program shall provide 
for the recapture by the Secretary or the program of an amount 
equal to the amount of the declining balance on the note 
described in paragraph (1)(C). 
(4) USE OF RECAPTURED FUNDS.—Fifty percent of any portion of 
the net sales proceeds that may not be retained by the home-
owner under the plan approved pursuant to this subsection 
shall be paid to the entity that transferred ownership interests 
in, or shares representing, units to eligible families, or another 
entity specified in the approved application, for use for improve-
ments to the project, business opportunities for low-income 
families, supportive services related to the homeownership pro-
gram, additional homeownership opportunities, and other 
activities approved by the Secretary. The remaining 50 percent 
shall be returned to the Secretary for use under this subtitle, 
subject to limitations contained in appropriations Acts. Such 
entity shall keep and make available to the Secretary all 
records necessary to calculate accurately pa5mients due the 
Secretary under this subsection. 
(d) THIRD PARTY RIGHTS.—The requirements under this subtitle 
regarding quality standards, resale, or transfer of the ownership 
interest of a homeowner shall be judicially enforceable against the 
grant recipient with respect to actions involving rehabilitation, and 
against purchasers of property under this subsection or their succes-
sors in interest with respect to other actions by affected low-income 
families, resident management corporations, resident councils, 
public housing agencies, and any agency, corporation, or authority 
of the United States Government. The parties specified in the 
preceding sentence shall be entitled to re£isonable attorney fees 
upon prevailing in any such judicial action. 
(e) PROTECTION OF NONPURCHASING FAMIUES.—No tenant residing 
in a dwelling unit in a property on the date the Secretary approves 
an application for an implementation grant may be evicted by 
reason of a homeownership program approved under this subtitle. 
(h) RECORDS AND AUDIT OF RECIPIENTS OF ASSISTANCE.— 
(1) IN GENERAL.—Each recipient shsdl keep such records as 
may be reasonably necessary to fully disclose the amount and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4179 
the disposition by such recipient of the proceeds of assistance 
received under this subtitle (and einy proceeds from financing 
obtained or sales under subsections (b) and (c)), the total cost of 
the homeownership program in connection with which such 
assistance is given or used, and the amount and nature of that 
portion of the program supplied by other sources, and such 
other sources as will facilitate an effective audit. 
(2) ACCESS BY THE SECRETARY.—The Secretary shall have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of the recipient that are perti-
nent to assistance received under this subtitle. 
(3) ACCESS BY THE COMPTROLLER GENERAL.—The Comptroller 
General of the United States, or any of the duly authorized 
representatives of the Comptroller General, shall also have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of the recipient that are perti-
nent to assistance received under this subtitle. 
SEC. 446. DEFINITIONS. 
42 USC 12896. 
For purposes of this subtitle: 
(1) The term "applicant" means a private nonprofit organiza-
tion, cooperative association, or a public agency (including an 
agency or instrumentality thereof) in cooperation with a private 
nonprofit organization. 
(2) The term "displaced homemaker" has the same meaning 
as in section 104. 
(3) The term "eligible family" means a family or individual 
who— 
(A) has an income that does not exceed 80 percent of the 
median income for the area, as determined by the Secretary 
with adjustments for smaller and larger families; and 
(B) is a first-time homebuyer. 
(4) The term "eligible property" means a single family prop-
erty, containing no more than four units, that is owned or held 
by the Secretary, the Secretary of Veterans Affairs, the Sec-
retary of Agriculture, the Resolution Trust Corporation, a State 
or local government (including any in rem property), or a public 
housing agency or an Indian housing authority (including scat-
tered site single family properties, and properties held by 
institutions within the jurisdiction of the Resolution Trust 
Corporation). 
(5) The term "first-time homebuyer" has the same meaning as 
in section 104. 
(6) The term "homeownership program" means a program for 
homeownership under this subtitle. 
(7) The term "Indian housing authority" has the meaning 
given such term in section 3(b)(ll) of the United States Housing 
Act of 1937. 
(8) The term "low-income family" has the meaning given such 
term in section 3(bX2) of the United States Housing Act of 1937. 
(9) The term "public housing agency" has the meaning given 
such term in section 3(bX6) of the United States Housing Act of 
1937. 
(10) The term "recipient" means an applicant approved to 
receive a grant under this subtitle or such other entity specified 
in the approved application that will assume the obligations of 
the recipient under this subtitle. 
104 STAT. 4180 
PUBLIC LAW 101-625—NOV. 28, 1990 
(11) The term "Secretary" means the Secretary of Housing 
and Urban Development. 
(12) The term 'single parent" means an individual who— 
(A) is unmarried or legally separated from a spouse; and 
(BXi) has 1 or more minor children for whom the individ-
ual has custody or joint custody; or 
(ii) is pregnant. 
42 use 12897. 
SEC. 447. LIMITATION ON SELECTION CRITERIA. 
In establishing criteria for selecting applicants to receive assist-
ance under this subtitle, the Secretary may not establish any selec-
tion criterion or criteria that grant or deny such assistance to an 
applicant (or have the effect of granting or denying assistance) based 
on the implementation, continuation, or discontinuation of any 
public policy, regulation, or law of any jurisdiction in which the 
applicant or project is located. 
42 use 12898. 
SEC. 448. IMPLEMENTATION. 
Not later than the expiration of the 180-day period beginning on 
the date funds authorized under this subtitle first become available 
for obligation, the Secretary shall by notice establish such require-
ments as may be necessary to carry out the provisions of this 
subtitle. Such requirements shall be subject to section 553 of title 5, 
Regulations. 
United States Code. The Secretary shall issue regulations based on 
the initial notice before the expiration of the 8-month period begin-
ning on the date of the notice. 
TITLE V—HOUSING ASSISTANCE 
Subtitle A—Public and Indian Housing 
SEC. 501. PREFERENCE RULES. 
Section 6(cX4XA) of the United States Housing Act of 1937 (42 
U.S.C. 1437d(cX4XA)) is amended to read as follows: 
"(A) except for projects or portions of projects specifically 
designated for elderly families with respect to which the 
Secretary has determined that application of this subpara-
graph would result in excessive delays in meeting the 
housing need of such families, the establishment of tenant 
selection criteria which— 
"(i) for not less than 70 percent of the units that are 
made available for occupancy in a given fiscal year, 
give preference to families that occupy substandard 
housing (including families that are homeless or living 
in a shelter for homeless families), are paying more 
than 50 percent of family income for rent, or are 
involuntarily displaced at the time they are seeking 
assistance under this Act; 
"(ii) for any remaining units to be made available for 
occupancy, give preference in accordance with a system 
of preferences established by the public housing agency 
in writing and after public hearing to respond to local 
housing needs and priorities, which may include (I) 
assisting very low-income families who either reside in 
transitional housing assisted under title IV of the Stew-
art B. McKinney Homeless Assistance Act, or partici-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4181 
pate in a program designed to provide public assistance 
recipients with greater access to employment and edu-
cational opportunities; (II) assisting families in accord-
ance with subsection (uX2); (III) assisting families 
identified by local public agencies involved in providing 
for the welfare of children as having a lack of adequate 
housing that is a primary factor in the imminent place-
ment of a child in foster care, or in preventing the 
discharge of a child from foster care and reunification 
with his or her family; (IV) assisting youth, upon dis-
charge from foster care, in cases in which return to the 
family or extended family or adoption is not available; 
and (V) achieving other objectives of national housing 
policy as affirmed by Congress; 
"(iii) prohibit any individual or family evicted from 
housing assisted under the Act by reason of drug-
related criminal activity from having a preference 
under any provision of this subparagraph for 3 years 
unless the evicted tenant successfully completes a 
rehabilitation program approved by the agency, except 
that the agency may waive the application of this 
clause under standards established by the Secretary 
(which shall include waiver for any member of a family 
of an individual prohibited from tenancy under this 
clause who the agency determines clearly did not 
participate in and had no knowledge of such criminal 
activity or when circumstances leading to eviction no 
longer exist); and 
"(iv) are designed to ensure that, to the maximum 
extent feasible, the projects of an agency will include 
families with a broad range of incomes and will avoid 
concentrations of low-income and deprived families 
with serious social problems.". 
SEC. 
5
0
2
. 
REFORM 
OF 
PUBLIC 
HOUSING 
MANAGEMENT. 
(a) PERFORMANCE INDICATORS FOR PUBUC HOUSING AGENCIES.— 
Section 6(j) of the United States Housing Act of 1937 (42 U.S.C. 
1437d(j)) is amended to read as follows: 
"(jXl) The Secretary shall develop and publish in the Federal 
Register indicators to assess the management performsmce of public 
housing agencies. The indicators shall be established by rule under 
section 553 of title 5, United States Code. Such indicators shall 
enable the Secretary to evaluate the performance of public housing 
agencies in all major areas of management operations. The Sec-
retary shall, in particular, use the following indicators: 
"(A) The number and percentage of vacancies within an 
agency's inventory, including the progress that an agency has 
made within the previous 3 years to reduce such vacancies. 
"(B) The amount and percentage of funds obligated to the 
public housing agency under section 14 of this Act which 
remain unexpended after 3 years. 
"(C) The percentage of rents uncollected. 
"(D) The energy consumption (with appropriate adjustments 
to reflect different regions £ind unit sizes). 
"(E) The average period of time that an agency requires to 
repair and turn-around vacant units. 
Federal 
Register, 
publication. 
104 STAT. 4182 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(F) The proportion of maintenance work orders outstanding, 
including any progress that an agency has made during the 
preceding 3 years to reduce the period of time required to 
complete maintenance work orders. 
"(G) The percentage of units that an gigency fails to inspect to 
ascertain maintenance or modernization needs within such 
period of time as the Secretary deems appropriate (with appro-
priate adjustments, if any, for large and small agencies). 
"(H) Any other factors as the Secretary deems appropriate. 
"(2)(A)(i) The Secretary shall, under the rulemaking procedures 
under section 553 of title 5, United States Code, establish procedures 
for designating troubled public housing agencies, which procedures 
shall include identification of serious and substantial failure to 
perform as measured by the performance indicators specified under 
paragraph (1) and such other factors as the Secretary may deem to 
be appropriate. The Secretary shall also designate, by rule under 
section 553 of title 5, United States Code, agencies that are troubled 
with respect to the program under section 14. 
"(ii) The Secretary may also, in consultation with national 
organizations representing public housing agencies and public offi-
cials (as the Secretary determines appropriate), identify and com-
mend public housing agencies that meet the performance standards 
established under paragraph (1) in an exemplary manner. 
"(iii) The Secretary shall establish procedures for public housing 
agencies to appeal designation as a troubled Eigency (including 
designation as a troubled agency for purposes of the program under 
section 14), to petition for removal of such designation, and to appeal 
any refusal to remove such designation. 
Government 
"(B) The Secretary shall seek to enter into an agreement with 
contracts. 
each troubled public housing agency setting forth— 
"(i) targets for improving performance as measured by the 
performance indicators specified under paragraph (1) and other 
requirements within a specified period of time; 
(ii) strategies for meeting such targets, including a descrip-
tion of the technical assistance that the Secretary will make 
available to the agency; and 
"(iii) incentives or sanctions for effective implementation of 
such strategies, which may include any constraints on the use of 
funds that the Secretary determines are appropriate. 
The Secretary and the public housing agency shall, to the maximum 
extent practicable, seek the assistance of local public and private 
entities in carr3dng out the agreement. 
"(3XA) Notwithstanding any other provision of law or of any 
contract for contributions, upon the occurrence of events or condi-
tions that constitute a substantial default by a public housing 
agency with respect to the covenants or conditions to which the 
public housing agency is subject or an agreement entered into under 
paragraph (2), the Secretary may— 
"(i) solicit competitive proposals from other public housing 
agencies and private housing management agents in the eventu-
ality that these agents may be needed for managing all, or part, 
of the housing administered by a public housing agency; 
"(ii) petition for the appointment of a receiver (which may be 
another public housing agency or a private management cor-
poration) of the public housing agency to any district court of 
the United States or to any court of the State in which the real 
property of the public housing agency is situated, that is 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4183 
Reports. 
authorized to appoint a receiver for the purposes and having the 
powers prescribed in this subsection; and 
"(iii) require the agency to make other arrangements accept-
able to the Secretary and in the best intereste of the public 
housing residents for managing all, or part of, such housing. 
"(B) In any proceeding under subparagraph (AXii), upon a deter- Ck)urts 
mination that a substantial default has occurred, and without 
regard to the availability of alternative remedies, the court shall 
appoint a receiver to conduct the Eiffairs of the public housing 
agency in a manner consistent with this Act and in accordance with 
such further terms and conditions as the court may provide. The 
court shall have power to grant appropriate temporary or prelimi-
nary relief pending final disposition of the petition by the Secretary. 
"(C) The appointment of a receiver pursuant to this subsection 
may be terminated, upon the petition of any party, when the court 
determines that all defaults have been cured and the housing 
operated by the public housing agency will thereafter be operated in 
accordance with the covenants and conditions to which the public 
housing agency is subject. 
"(4) The Secretary shall submit to the Congress annually, as a 
part of the report of the Secretary under section 8 of the Depart-
ment of Housing and Urban Development Act, a report that— 
"(A) identifies the public housing agencies that have been 
designated as troubled under paragraph (2); 
"(B) describes the grounds on which such public housing 
agencies were designated as troubled and continue to be so 
designated; 
f
, 
"(C) describes the agreements that have been entered into 
with such agencies under such paragraph; 
"(D) describes the status of progress under such agreements; 
"(E) describes any action that has been taken in accordance 
with paragraph (3); and 
"(F) describes the status of any public housing agency des-
ignated as troubled with respect to the program under section 
14 and specifies the sunount of assistance the agency received 
under section 14 and any credits accumulated by the agency 
under section 14(kX5XD).". 
(b) REPORT ON TRAINING AND CERTIFICATION STANDARDS.—The 
Secretary shall submit to the Congress, not later than 12 months 
after the date of the enactment of this Act, a report regarding the 
feasibility £ind effectiveness of establishing uniform standards for 
training and certification of executive directors and other officers 
and members of local, regional, and State public housing agencies. 
(c) PROJECT-BASED ACCOUNTING SYSTEMS.— 
(1) IN GENERAL.—Section 6(cX4) of the United States Housing 
Act of 1937 (42 U.S.C. 1437d(cX4)) is amended— 
(A) in subparagraph (C) by striking "and" at the end; 
(B) in subparagraph (D), by striking the period at the end 
and inserting "; and '; and 
(C) by adding at the end the following new subparagraph: 
"(E) except in the case of agencies not receiving operating 
assistance under section 9, the establishment and mainte-
nance of a system of accounting for rental collections and 
costs (including administrative, utility, maintenance, repair 
and other operating costs) for each project or operating cost 
center (as determined by the Secretary), which collections 
and costs shall be made available to the general public and 
42 use 1437d 
note. 
104 STAT. 4184 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 1437d 
note. 
Crime. 
submitted to the appropriate loceil public official (as deter-
mined by the Secretary); except that the Secretary may 
permit agencies owning or operating less than 250 units to 
comply with the requirements of this subparagraph by 
accounting on an agency-wide basis.". 
(2) IMPLEMENTATION.—The Secretary of Housing and Urban 
Development shall, under the rulemaking procedures under 
section 553 of title 5, United States Code, establish guidelines 
and timetables appropriate to implement the amendment made 
by paragraph (1)(C), taking into account the requirements of 
public housing agencies of different sizes and characteristics, to 
achieve compliance with requirements established by such 
amendment not later than January 1,1993. 
(c) REPORT.— 
(1) IN GENERAL.—Within 180 days after the date of the enact-
ment of this Act, the Secretary of Housing and Urban Develop-
ment shall submit to the Congress a report on the operation and 
efficiency of the Buffalo Municipal Housing Authority using, 
among other criteria, the performance indicators under section 
6(jXl) of the United States Housing Act of 1937 (as amended by 
this section), and giving special attention to such Authority's 
desegregation program and to the vacancy rate. 
(2) SPECIFIC RECOMMENDATIONS.—For purposes of the report 
required by paragraph (1), the Secretary may specifically deter-
mine whether to— 
(A) petition for the appointment of a receiver for the 
Buffalo Municipal Housing Authority under the provisions 
of section 6(jX3) of the United States Housing Act of 1937 (as 
amended by this section); or 
(B) reduce operating subsidies for such Authority under 
the provisions of section 9 of the United States Housing Act 
of 1937. 
SEC. 503. EVICTION AND TERMINATION PROCEDURES. 
(a) GRIEVANCE PROCEDURE.—Section 6(k) of the United States 
Housing Act of 1937 (42 U.S.C. 1437d(k) is amended by striking the 
matter after the period at the end of paragraph (6) and inserting the 
following: 
"For any grievance concerning an eviction or termination of ten-
ancy that involves any criminal activity that threatens the health, 
safety, or right to peaceful enjojnnent of the premises of other 
tenants or employees of the public housing agency or any drug-
related criminal activity on or near such premises, the agency may 
(A) establish an expedited grievance procedure £is the Secretary 
shall provide by rule under section 553 of title 5, United States Code, 
or (B) exclude from its grievance procedure any such grievance, in 
any jurisdiction which requires that prior to eviction, a tenant be 
given a hearing in court which the Secretary determines provides 
the basic elements of due process (which the Secretary shadl estab-
lish by rule under section 553 of title 5, United States Code). Such 
elements of due process shall not include a requirement that the 
tenant be provided an opportunity to examine relevant documents 
within the possession of the public housing agency. The agency shall 
provide to the tenant a reasonable opportunity, prior to hearing or 
trial, to examine any relevant documents, records, or regulations 
directly related to the eviction or termination.". 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4185 
(b) LEASES.—Section 6(1) of the United States Housing Act of 1937 
(42 U.S.C. 1437d(l)) is amended— 
(1) by striking "and" at the end of paragraph (4); 
(2) by inserting after paragraph (5), the following new 
paragraph: 
"(6) specify that with respect to any notice of eviction or 
termination, notwithstanding any State law, a public housing 
tenant shall be informed of the opportunity, prior to any hear-
ing or trial, to examine any relevant documents, records, or 
regulations directly related to the eviction or termination.". 
(c) REGULATIONS.—The Secretary of Housing and Urban Develop-
ment shall issue, and publish in the Federal Register for comment, 
proposed rules implementing the amendments made by this section 
not later than the expiration of the 60-day period beginning on the 
date of the enactment of this Act and shall issue final rules im-
plementing the amendments not later than the expiration of the 
180-day period beginning on the date of the enactment of this Act. 
(d) APPUCABIIITY.—Any exclusion of grievances by a public hous-
ing agency pursuant to a determination or waiver by the Secretary 
(under section 6(k) of the United States Housing Act of 1937, as such 
section existed before the date of the enactment of this Act) that a 
jurisdiction requires a hearing in court providing the basic elements 
of due process shall be effective after the date of the enactment of 
this Act only to the extent that the exclusion complies with the 
amendments made by this section, except that any such waiver 
provided before the date of the enactment of this Act shall remain in 
effect until the earlier of the effective date of the final rules 
implementing the amendments made by this section or 180 days 
after the date of the enactment. 
SEC. 504. LEASE REQUIREMENTS REGARDING TERMINATION OF TEN-
ANCY IN PUBLIC HOUSING. 
Section 6(1X5) of the Housing Act of 1937 (42 U.S.C. 1437d(lX5)) is 
amended to read as follows: 
"(5) provide that any criminal activity that threatens the 
health, safety, or right to peaceful enjoyment of the premises by 
other tenants or any drug-related criminal activity on or near 
such premises, engaged in by a public housing tenant, any 
member of the tenant's household, or any guest or other person 
under the tenant's control, shall be cause for termination of 
tenancy; and". 
SEC. 505. NOTICE TO POST OFFICE REGARDING EVICTION FOR CRIMINAL 
ACTIVITY. 
Section 6 of the United States Housing Act of 1937 (42 U.S.C. 
1437d) is amended by adding at the end the following subsection: 
"(n) When a public housing agency evicts an individual or family 
from a dwelling unit for engaging in criminal activity, including 
drug-related criminal activity, the public housing agency shall 
notify the local post office serving that dwelling unit that such 
individual or family is no longer residing in the dwelling unit.". 
SEC. 506. PUBLIC HOUSING ASSISTANCE FOR FOSTER CARE CHILDREN. 
Section 6 of the United States Housing Act of 1937 (42 U.S.C. 
1437d), as amended by the preceding provisions of this Act, is 
further eimended by adding at the end the following new subsection: 
Federal 
Register, 
publication. 
42 use 1437d 
note. 
42 use 1437d 
note. 
104 STAT. 4186 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(o) Subject to the preference rules specified in subsection (cX4)(A), 
in providing housing in low-income housing projects, each public 
housing agency may coordinate with any local public agencies in-
volved in providing for the welfare of children to make available 
dwelling units to— 
"(1) families identified by the agencies as having a lack of 
adequatehousingthat is a primary factor— 
"(A) in the imminent placement of a child in foster care; 
or 
"(B) in preventing the discharge of a child from foster 
care and reunification with his or her family; and 
"(2) youth, upon discharge from foster care, in cases in which 
return to the family or extended family or adoption is not 
available.". 
SEC. 507. PUBLIC HOUSING OPERATING SUBSIDIES. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 9(c) of the United 
States Housing Act of 1937 (42 U.S.C. 1437g(c)) is amended to read as 
follows: 
"(c) There are authorized to be appropriated for purposes of 
providing annual contributions under this section $2,000,000,000 for 
fiscal year 1991 and $2,086,000,000 in fiscal year 1992.". 
(b) SERVICES AND COORDINATORS AS EUGIBLE COST.—Section 9(a) of 
the United States Housing Act of 1937 (42 U.S.C. 1437g(a)) is amend-
ed— 
(1) in paragraph (1)— 
(A) by inserting "(A)" after the parsigraph designation; 
(B) in the second sentence, by redesignating clauses (A), 
(B), and (C) as clauses (i), (ii), Eind (iii), respectively; and 
(C) by adding at the end the following new subparsigraph: 
"(B) Annual contributions under this section to any public hous-
ing agency for any project with a sufficient number of residents who 
are frail elderly or persons with disabilities may be used, with 
respect to such project, for (i) the cost of a management staff 
member to coordinate the provision of any services within the 
project provided through any agency of the Federal Government or 
any other public or private department, agency, or organization to 
residents of the project who are frail elderly or persons with disabil-
ities to enable such residents to live independently and prevent 
placement in nursing homes or institutions; and (ii) expenses for the 
provision of services for such residents of the project to enable such 
residents to live independently and prevent placement in nursing 
homes or institutions, which may include meal services, house-
keeping and chore assistance, personal care, laundry assistance, 
transportation services, and health-related services, except that not 
more than 15 percent of the cost of the provision of such services 
may be provided under this section. For purposes of this subpara-
graph, the term 'frail elderly' shall have the meaning given the 
term under section 202(d) of the Housing Act of 1959, except that 
such term does not include any person receiving assistance provided 
under the Congregate Housing Services Act of 1978, and the term 
'persons with disabilities' shall have the meaning given the term 
under section 811 of the Cranston-Gronzalez National Affordable 
Housing Act"; and 
(2) in paragraph (3), by inserting before the first comma the 
following: "(except for pa3nnents under paragraph (IXB))". 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4187 
SEC. 508. COOLING DEGREE DAY ADJUSTMENT UNDER PERFORMANCE 
42 USC 1437g 
FUNDING SYSTEM. 
note. 
In determining the Performance Funding System utility subsidy 
for public housing agencies pursuant to section 9 of the United 
States Housing Act of 1937, the Secretary of Housing and Urban 
Development shall include a cooling degree day adjustment factor. 
The method by which a cooling degree day adjustment factor is 
included shall be identical to the method by which the heating 
degree day adjustment factor is included. 
SEC. 509. FORMULA ALLOCATION OF MODERNIZATION FUNDING. 
(a) 
FORMULA ALLOCATION TO AGENCIES WITH 
500 
OR MORE 
UNITS.— 
(1) IN GENERAL.—Section 14(k) of the United States Housing 
Act of 1937 (42 U.S.C. 1437/(k)) is amended to read as follows: 
"(kXD From amounts approved in appropriation Acts for grants 
under this section for fiscal year 1992 and each fiscal year there-
after, and to the extent provided by such Acts, the Secretary shall 
reserve not more than $75,000,000 (including unused amounts re-
served during previous fiscal years), which shall be available for 
modernization needs resulting from natural and other disasters and 
from emergencies. Amounts provided for emergencies shall be 
repaid by public housing agencies from future allocations of assist-
ance under paragraph (2), where available. 
"(2XA) After determining the amounts to be reserved under para-
graphs (1) and (5XD)(iv), the Secretary shall allocate the amount 
remaining pursuant to a formula contained in a regulation pre-
scribed by the Secretary, which shall be designed to measure the 
relative needs of public housing agencies. The formula shall take 
into account amounts previously made available by the Secretary 
for modernization under this section and for major reconstruction of 
obsolete projects, to the extent determined appropriate by the 
Secretary. 
"(B) The Secretary shall allocate half of the amount allocated 
under this paragraph based on the relative backlog needs of public 
housing agencies, determined— 
"(i) for individual public housing agencies with 500 or more 
units and for the aggregate of agencies with fewer than 500 
units, where the data are statistically reliable, on the basis of 
the most recently available, statistically reliable data regarding 
the (I) backlog of needed repairs and replacements of existing 
physical systems in public housing projects, (II) items that must 
be added to projects to meet the modernization standards of the 
Secretary (referred to in subsection (eXlXAXiiXD) and State and 
loc£il codes, and (III) items that are necessary or highly desirable 
for the long-term viability of a project; or 
"(ii) for individual public housing agencies with 500 or more 
units, where such data are not statistically reliable, on the basis 
of estimates of the categories of backlog specified in clause (i) 
using the most recently available data on the backlog, and 
objectively measurable data on public housing agency, commu-
nity, and project characteristics regarding— 
"(I) the average number of bedrooms in the units in a 
project; 
"(II) the proportion of units in a project available for 
occupancy by very large families; 
39-194 O - 91 - 28 : QL 3 Part 5 
104 STAT. 4188 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(III) the extent to which units for families are in high-
rise elevator projects; 
"(IV) the age of the projects; 
"(V) in the case of a large agency, as determined by the 
Secretary, the number of units with 2 or more bedrooms; 
"(VI) the cost of rehabilitating property in the area; 
"(VII) for family projects, the extent of population decline 
in the unit of general local government determined on the 
basis of the 1970 and 1980 censuses; and 
"(VIII) any other factors the Secretary determines are 
appropriate. 
The Secretary may not establish or amend any criteria regard-
ing the bacldog needs of public housing agencies under this 
subparagraph, except by rule as provided under section 553 of 
title 5, United States Ck)de. 
"(C) The Secretary shall allocate the other half of the amount 
allocated under this paragraph based on the relative accrued needs 
of public housing agencies for the categories of need specified in 
subparagraphs (BXi) (I) and (II), determined— 
"(i) for individual public housing agencies with 500 or more 
units and for the aggregate of agencies with fewer than 500 
units, where the data are statistically reliable, on the basis of 
the needs that are estimated to have accrued since the date of 
the last objective measurement of backlog needs under subpara-
graph (B); or 
"(ii) for individual public housing agencies with 500 or more 
units, where the estimates under clause (i) are not statistically 
reliable, on the basis of estimates of accrued need using the 
most recently available data on the backlog, and objectively 
measurable data on public housing agency, community, and 
project characteristics regarding— 
"(I) the average number of bedrooms of the units in a 
project; 
'Xll) the proportion of units in a project available for 
occupancy by very large families; 
"(III) the age of the projects; 
"(IV) the extent to which the buildings in projects of an 
agency average fewer than 5 units; 
"(V) the cost of rehabilitating property in the area; 
"(VI) the total number of units of each agency that owns 
or operates 500 or more units; and 
"(VII) any other factors the Secretary determines are 
appropriate. 
The Secretary may not establish or amend any criteria regard-
ing the accrual needs of public housing agencies under this 
subparagraph, except by rule as provided under section 553 of 
title 5, United States Code. 
"(DXi) In determining how many units an agency owns or operates 
and the relative modernization needs of agencies, the Secretary 
shall count each existing unit under the annual contributions con-
tract, except that an existing unit under the turnkey III and the 
mutual help programs may be counted as less than one unit, to take 
into account the responsibility of families for the costs of certain 
maintenance and repair. For purposes of this section, an agency that 
qualifies to receive a formula grant under paragraph (4) may elect to 
continue to qualify to receive a formula grant if it owns or operates 
at least 400 public housing units. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4189 
"(ii) Where an existing unit under a contract is demolished or 
disposed of, the Secretary shall not adjust the amount the agency 
receives under the formula unless more than one percent of the 
units are affected on a cumulative basis. Where more than one 
percent of the units are demolished or disposed of, the Secretary 
shall reduce the formula amount for the agency over a 3-year period 
to reflect removal of the units from the contract. 
"(iii) The Secretary shall determine whether the data under sub-
paragraphs (B) and (C) are statistically reliable. 
"(3) The amount determined under the formula for agencies with 
fewer than 500 units shall be allocated in accordance with subsec-
tion (d). 
"(4) The amount determined under the formula for each agency 
that owns or operates 500 or more units shall be allocated to each 
qualifying agency in accordance with subsection (e). 
"(5)(A) With respect to any agency that is designated as a troubled 
agency with respect to the program under this section upon the 
initial designation of such troubled agencies under 
section 
6(j)(2)(AXi), the Secretary shall limit the total amount of funding 
under this section for the agency for fiscal year 1992 and any fiscal 
year thereafter, if the agency remains designated as a troubled 
agency, to the sum of^ 
"(i) the average of the amount that the troubled agency 
received for modernization activities under this section and for 
major reconstruction of obsolete projects for each of fiscal years 
1989, 1990, and 1991, which average shall be adjusted to take 
into account changes in the cost of rehabilitating property; plus 
"(ii) 25 percent of the difference between the amount deter-
mined under clause (i) and the amount that would be allocated 
to the agency in such fiscal year if the agency were not des-
ignated as a troubled agency. 
"(B) In any fiscal year the Secretary may, pursuant to the request 
of a troubled agency, increase the amount allocated to the agency 
under subparagraph (A) to an amount not exceeding the amount 
that would be allocated to the agency in such fiscal year if the 
agency were not a troubled agency. An increase under this subpara-
graph shall be based on the sigency's progress toward meeting the 
performance indicators under section 6(j)(l). The Secretary shall 
render a decision in writing on each such request not later than 75 
days after receipt of the request and any necessary supporting 
documentation. 
"(C) For any fiscal year, any amounts that would have been 
allocated to an Eigency under the formula under paragraph (2) that 
are not allocated to the agency because the agency receives the 
amount provided under subparagraph (A) of this paragraph, shall be 
allocated in such year pursuant to the formula to other agencies 
with 500 or more units. 
"(D) The Secretary shall carry out a credit system under this Credit, 
subparagraph to provide agencies that receive allocations under 
subparagraph (A) with additional Eissistance under this section after 
the agency is determined not to be a troubled agency, to compensate 
for amounts not received because of the troubled agency desig-
nation. The credit system shall be subject to the following 
requirements: 
"(i) Any agency that receives assistance pursuant to subpara-
graph (A) for any fiscal year shall receive credits for the dif-
ference between the amount that the agency would have been 
104 STAT. 4190 
PUBLIC LAW 101-625—NOV. 28, 1990 
allocated in such year if it were not designated a troubled 
agency and the sunount allocated for the agency for such year 
under subparagraph (A). 
"(ii) An agency may not receive credits under this subpara-
graph for more than 3 consecutive fiscal years. 
"(iii) After a 3-year period during which an agency has 
accrued credits, the credits accrued by the agency shall be— 
"(I) decreased by 10 percent of the total credits accumu-
lated if the designation as a troubled agency is not removed 
before the conclusion of the first fiscal year after such 
3-year period of accrual of credits; 
"(II) decreased by an additional 20 percent of the original 
total accumulated credits if the designation as a troubled 
agency is not removed before the conclusion of the second 
fiscal year after such 3-year accrual period; 
"(III) decreased by an additional 30 percent of the origi-
nal total accumulated credits if the designation as a trou-
bled Eigency is not removed before the conclusion of the 
third fiscal year after such 3-year accrual period; and 
"(IV) eliminated if the designation as a troubled agency is 
not removed before the conclusion of the fourth fiscal year 
after such 3-year accrual period, 
"(iv) After a determination by the Secretary that an agency is 
not a troubled agency, the Secretary shall provide the agency 
with amounts made available under this clause in accordance 
with the amount of credits accumulated by the agency (subject 
to the reductions under clause (iii)). Such amounts shall be 
provided in addition to the amounts allocated to the agency 
pursuant to the formula under paragraph (2). In each fiscal 
year, the Secretary shall reserve from amounts available for 
allocation under paragraph (2XA) the amount necessary to pro-
vide assistance pursuant to such credits, except that the 
reserved amount may not exceed 5 percent of the total amount 
available for allocation under such paragraph. 
"(v) In making pajonents for accrued credits in accordance 
with clause (iv), the Secretary may take into account the ability 
of the agency to expeditiously expend amounts received for 
credits. 
Regulations. 
"(E) The Secretary shall, by regulation, establish special rules for 
limiting the amount of assistance provided under this section to 
agencies that become troubled after the date of the initial designa-
tion of troubled agencies under section 6(jX2XAXi). The rules may 
provide for a credit system based on the system established under 
this paragraph. 
"(6) Any amounts (A) allocated under paragraph (4) that become 
available for reallocation because an agency does not qualify to 
receive all or a part of its formula allocation due to failure to comply 
with the requirements of this section (other than because of designa-
tion as a troubled agency), and (B) recaptured by the Secretary for 
good cause, shall (subject to approval in appropriations Acts) be 
reallocated by the Secretary in the next fiscal year to other housing 
agencies that own or operate 500 or more units, based on their 
relative needs. The relative needs of agencies shall be measured by 
the formula established pursuant to paragraph (2XA). 
"(7) A public housing agency may appeal the eunount of its 
allocation determined under the formula on the beisis of unique 
circumstances or on the basis that the objectively measurable data 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4191 
regarding the agency, community, and project characteristics used 
for determining the formula amount were not correct. 
"(8) Amounts allocated to a public housing agency under para-
graph (3) or (4) may be used for any eligible activity in accordance 
with this section, notwithstanding that the allocation amount is 
determined by allocating half based on relative backlog needs and 
half based on relative accrued needs of agencies.". 
(2) CONFORMING AMENDMENTS.—Section 14 of the United 
States Housing Act of 1937 (42 U.S.C. 1437/) is amended— 
(A) in subsection (eX3XA), by striking the second sentence; 
and 
(B) in subsection (h)— 
(i) in the matter preceding paragraph (1), by inserting 
after "subsection (b)" the following: "to a public hous-
ing agency that owns or operates fewer than 500 public 
housing dwelling units"; and 
(ii) in paragraph (2), by striking "or (e)". 
O
t
>
) REMOVAL OF CERTAIN REQUIREMENTS FOR AGENCIES WITH 
FEWER THAN 500 UNITS.—Section 14(dX4) of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437Z(dX4)) is amended— 
(1) by inserting "and" at the end of subparagraph (A); 
(2) by striking the semicolon at the end of subparagraph (B) 
and inserting a period; and 
(3) by striking subparagraphs (C), (D), and (E). 
(c) LIMITATION OF SPECIAL PURPOSE MODERNIZATION TO AGENCIES 
WITH FEWER THAN 500 UNITS.—Section 14 of the United States 
Housing Act of 1937 (42 U.S.C. 14370 is amended— 
(1) in subsection (fK2XB), by striking "and to meet specigil 
purpose needs described in section 14(iXlXD)"; and 
(2) in the first sentence of subsection (iXl), by striking "In 
addition" and all that follows through the third comma and 
inserting the following: "In addition to assistance made avail-
able under subsection (b) to a public housing agency that owns 
or operates fewer than 500 public housing dwelling units, the 
Secretary may, without regard to the requirements of subsec-
tion (c), (d), (f), (g), or (h),". 
(d) SPECIAL PURPOSE MANAGEMENT MODERNIZATION FOR AGENCIES 
WITH FEWER THAN 500 UNITS.—Section 14(iXl) of the United States 
Housing Act of 1937 (42 U.S.C. 1437/(iXl)) is amended— 
(1) in subparagraph (C), by striking "or" at the end; 
(2) in subparagraph (DXii), by striking the period at the end 
and inserting "; or"; and 
(3) by adding at the end the following new subparagraph: 
"(E) management improvement needs which (i) would not 
otherwise be eligible for assistance under this section, and (ii) 
pertain to any low-income housing project other than a project 
assisted under section 8.". 
(e) ESTABUSHMENT OF 250-UNIT THRESHOLD BEGINNING IN FISCAL 
YEAR 1993.— 
(1) IN GENERAL.—Effective October 1, 1992, section 14 of the Effective date. 
United States Housing Act of 1937 (42 U.S.C. 1437/), as amended 
by this section, is further amended by striking "500" and insert-
ing "250" in each of the following places: 
(A) The first sentence of subsection (d). 
(B) In subsection (e), the first sentence of each of para-
graphs (1), (3XA), (4XA) and (4XC). 
(C) Subsections (fKD and (fX2). 
104 STAT. 4192 
PUBLIC LAW 101-625-NOV. 28, 1990 
(D) Subsection (h). 
(E) The first sentence of subsection (i)(l). 
(F) In subsection (k), in paragraphs (2XB)(i), (2)(BXii), 
(2XCXi), (2XCXii). (3), (4), (5XB), and (6). 
(G) Subsection (1X2). 
(2) EXCEPTION.—Effective October 1,1992, section 14(kX2XDXi) 
of the United States Housing Act of 1937 (42 U.S.C. 
1437Z(kX2XDXi)), as amended by this section, is further 
amended by striking "400" and inserting "200". 
(f) TRANSITION.—Section 14 of the United States Housing Act of 
1937 (42 U.S.C. 1437Z), as amended by the preceding provisions of 
this Act, is further amended by adding at the end the following new 
subsection: 
"(o) Any amount that the Secretary has obligated to a public 
housing agency under this section other than pursuant to the 
program established under subsection (e), shall be used for the 
purposes for which such amount was provided, or for purposes 
consistent with an action plan submitted by the agency under 
subsection (e) and approved by the Secretary, as the agency deter-
mines to be appropriate.". 
(g) SECTION HEADING.—The section heading of section 14 of the 
United States Housing Act of 1937 (42 U.S.C. 1437/) is amended to 
read as follows: 
"PUBLIC A N D INDIAN HOUSING MODERNIZATION". 
42 u s e 1437Z 
(h) REGULATIONS.— 
"o*^- 
(1) IN GENERAL.—The Secretary of Housing and Urban Devel-
opment shall implement the amendments made by this section 
by rule under section 553 of title 5, United States Code. The 
Secretary shall consult with the Congress, public housing agen-
cies, and professional organizations representing public housing 
agencies before publishing a proposed rule pursuant to such 
section. The proposed rule shall be published not later than the 
expiration of the 120-day period beginning on the date of the 
enactment of this Act. 
(2) ALLOCATION FORMULA.—The Secretary of Housing and 
Urban Development shall establish the allocation formula 
under section 14(k)(2)(A) of the United States Housing Act of 
1937, as amended by subsection (a) of this section, by rule under 
section 553 of title 5, United States Code. In publishing a 
proposed rule regarding the formula pursuant to such section 
553, the Secretary shall describe— 
(A) the analytic basis for the formula; 
(B) the weight assigned to the various criteria contained 
in the formula pursuant to such section 14(kX2); 
(C) deductions from the formula share for amounts 
received for modernization activities under section 14 and 
major reconstruction of obsolete projects; and 
(D) any other information the Secretary determines is 
appropriate. 
(3) ALTERNATIVE FORMULAS.—When publishing the proposed 
rule required under paragraph (2), the Secretary of Housing and 
Urban Development may, at the discretion of the Secretary, 
publish alternaitive formulas, identif3dng the weights assigned 
to the various criteria under the formulas, and explaining the 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4193 
differences in operation and objectives of the alternative 
formulas. 
(i) REPORTS TO CONGRESS.— 
42 use 1437/ 
(1) INDEPENDENT EVALUATION—The Secretary of Housing and ",ote. 
Urban Development shall enter into a contract providing for ^'^tra^te^'^ 
the independent evaluation of the modernization program 
authorized under section 14 of the United States Housing Act of 
1937, as amended by this section, and shall submit to the 
Congress a report on the results of the evaluation within 3 years 
after the initial allocation of assistance by formula under such 
section 14. 
(2) MODIFICATIONS.—The Secretary shall submit a report to 
Congress, within 2 years after the date of enactment of this Act, 
recommending any changes to such section 14 that the Sec-
retary determines are appropriate to take into account the 
relative needs of public housing Eigencies for assistance to carry 
out lead-based paint testing and abatement activities. The Sec-
retary shall not adopt any changes to the formula for this 
purpose except by law. 
SEC. 510. REDUCTION OF VACANCIES IN PUBLIC HOUSING UNITS. 
(a) IN GENERAL.—Section 14 of the United States Housing Act of 
1937 (42 U.S.C. 14371), as amended by the preceding provisions of 
this Act, is further amended by adding at the end the following new 
subsection: 
"(pXD The Secretary shall require any public housing agency that 
has a vacancy rate among dwelling units owned or operated by the 
agency that exceeds twice the average vacancy rate among all 
agencies or that is designated as a troubled agency under section 
6(j), to participate in the vacancy reduction program under this 
subsection. 
"(2) Each public housing agency participating in the program 
under this subsection shall develop and submit to the Secretary a 
vacancy reduction plan regarding vacancies in units owned or 
operated by the agency. The plan shall include statements (A) 
identifying vacant dwelling units administered by the agency and 
explaining the reasons for the vacancies, (B) describing the actions 
to be tEiken by the agency during the following 5 years to eliminate 
the vacancies, (C) identifying any impediments that will prevent 
elimination of the vacancies within the 5-year period, (D) identifying 
any vacant units subject to modernization, reconstruction, demoli-
tion, and disposition activities that have been funded or approved, 
(E) identifying any vacant dwelling units that are eligible for com-
prehensive modernization, major reconstruction, demolition, or dis-
position but have not been funded or approved for such activities 
and are not likely to be funded or approved for at least 3 years and 
estimating the amount of assistance necessary to complete the 
modernization, major reconstruction, demolition, or disposition of 
such units, (F) identifying any vacant units not identified under 
subparagraphs (E) and (F) and describing any appropriate activities 
relating to elimination of the vacancies in such units and estimating 
the amount of assistance necessary to carry out the activities, and 
(G) setting forth an agenda for implementation of management 
improvements 
(including, as appropriate, 
improvements 
rec-
ommended by the assessment team pursuant to paragraph (3XC)) 
during the first fiscal year beginning after submission of the plan 
104 STAT. 4194 
PUBLIC LAW 101-625—NOV. 28, 1990 
and including an estimate of the amount of assistance necessary to 
implement the improvements. 
"(3XA) In cooperation with each agency participating in the pro-
gram under this subsection, the Secretary shall provide for onsite 
assessment of the vacancy situation of the agency by a team of 
knowledgeable observers. The assessment team shall include rep-
resentatives of the Department of Housing and Urban Development 
and an equal number of independent experts knowledgeable with 
respect to vacancy problems and management issues relating to 
public housing, who shall be selected by the Secretary. The sissess-
ment team shall assess the vacancy situation of the agency to 
determine the causes of the vacancies, including any management 
deficiencies or modernization activities. 
"(B) The assessment team shall also examine indicators of the 
management performance of the agency relating to vacancy, which 
shall include consideration of the performance of the agency as 
measured by the indicators under subparagraphs (A) and (E) of 
section 6(j)(l). 
"(C) The assessment team shall submit to the agency and the 
Secretary written recommendations for management improvements 
to eliminate or alleviate management deficiencies, and may assist 
the agency in preparing the vacancy reduction plan under para-
graph (2), including determining appropriate actions to eliminate 
vacancies. 
"(4) The Secretary shall, to the extent approved in appropriations 
Acts, provide assistance under this subsection to public housing 
agencies submitting vacancy reduction plans for reasonable costs 
of— 
"(A) implementing management improvements; 
"(B) rehabilitating vacant dwelling units identified in the 
statement under paragraph (2); and 
"(C) carrying out vacancy reduction activities described in the 
statement under paragraph (2). 
"(5) Of any amounts available for allocation under this section to 
large public housing agencies pursuant to subsection (k)(2), not more 
than $105,000,000 shall be available in fiscal year 1991 and not more 
than $220,000,000 shall be available in fiscal year 1992 for carrying 
out this subsection.". 
SEC. 511. INCOME ELIGIBILITY FOR PUBLIC HOUSING. 
Section 16(b) of the United States Housing Act of 1937 (42 U.S.C. 
1437n(b)) is amended— 
(1) by striking "(b) Not" and inserting "(b)(1) Not"; 
(2) by striking "5 per centum" and inserting "15 percent"; and 
(3) by adding at the end the following new paragraph: 
"(2) Not more than 25 percent of the dwelling units in any project 
of any agency shall be available for occupancy by low-income fami-
lies other than very low-income families. The limitation shall not 
apply in the case of any project in which, before the date of the 
enactment of the Cranston-Gonzalez National Affordable Housing 
Act, such low-income families occupy more than 25 percent of the 
dwelling units.". 
SEC. 512. SCATTERED-SITE PUBLIC HOUSING DISPOSITION PROCEEDS. 
(a) IN GENERAL.—Section 18(a)(2)(B)(i) of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437p(a)(2XB)(i)) is amended by inserting 
before the first comma the following: ", which, in the case of 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4195 
42 use 1437p 
note. 
42 use 1437p 
note. 
scattered-site housing of a public housing agency, shall be in an 
amount that bears the same ratio to the total of such costs and 
obligations as the number of units disposed of bears to the total 
number of units of the project at the time of disposition". 
GJ) APPUCABILITY.—The amendment made by this section shall 
apply to any scattered-site public housing project or portion of such 
project disposed of after the date of the enactment of this Act. 
SEC. 513. REPLACEMENT HOUSING. 
(a) DEMONSTRATION PROGRAM.— 
(1) AUTHORITY.—The Secretary of Housing and Urban Devel-
opment (in this subsection referred to as the "Secretary") shall 
carry out a program to demonstrate the effectiveness of replac-
ing public housing dwelling units eligible for demolition or 
disposition with 5-year certificate assistance provided under 
section 8 of the United States Housing Act of 1937. 
(2) SCOPE.—The Secretary shall carry out the demonstration 
Missouri 
only with respect to public housing dwelling units owned or 
operated by the public housing authority for the City of Saint 
Louis, in the State of Missouri, that before the termination of 
the demonstration program under this subsection are approved 
for demolition or disposition. 
(3) REQUIREMENTS.— 
(A) SECTION 8 ASSISTANCE.—Notwithstanding the provi-
sions of section 18(bX3XA) of the United States Housing Act 
of 1937, under the demonstration program the Secretary 
may approve the demolition or disposition of public housing 
dwelling units and provide assistance for replacement of 
each such dwelling unit through the use of assistance under 
section 8 of such Act in the form of a 5-year certificate 
under such section 8(b). 
(B) 
TENANT-BASED 
ASSISTANCE.—Notwithstanding 
the 
provisions of section 18(bX3XB) of the United States Hous-
ing Act of 1937, the 5-year section 8 assistance provided 
under this section may be tenant-based if such public hous-
ing authority shows, to the satisfaction of the Secretary, 
that an adequate supply of private rentsil housing siffbrd-
able to low-income families is available in the market area 
for the 5-year period (at rents at or below the fair market 
rental for the area). 
(C) APPUCABILITY OF OTHER SECTION 18 PROVISIONS.— 
Except as provided under subparagraphs (A) and (B), the 
provisions of section 18 of the United States Housing Act of 
1937 shall apply to any public housing dwelling units 
demolished or disposed under the demonstration under this 
subsection. 
(4) TERMINATION.—The demonstration program under this 
subsection shall terminate at the end of September 30, 1992. 
(b) BUDGET REQUEST.—Section 18(cX2) of the United States Hous- Reports, 
ing Act of 1937 (42 U.S.C. 1437p(cX2)) is amended by inserting after 
the period at the end the following: "As part of each annual budget 
request for the Department of Housing and Urban Development, the 
Secretary shall submit to the Congress a report— 
"(A) outlining the commitments the Secretary entered into 
during the preceding year to fund plans approved under subsec-
tion (bX3); and 
104 STAT. 4196 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(B) specifying, by fiscal year, the budget authority required 
to carry out the commitments specified in subparagraph (A).", 
(c) REPEALER.—Section 18(cX3) of the United States Housing Act of 
1937 (42 U.S.C 1437p(cX3)) is repealed. 
SEC. 514. PUBLIC HOUSING RESIDENT MANAGEMENT. 
Section 20(fK3) of the United States Housing Act of 1937 (42 U.S.C. 
1437r(fK3)) is amended to read as follows: 
"(3) FUNDING.—Of amounts made available for 
financial 
assistance under section 14, the Secretary may use to carry out 
this subsection not more than $5,000,000 for each of fiscal years 
1991 and 1992.". 
SEC. 515. PUBLIC HOUSING FAMILY INVESTMENT CENTERS. 
(a) IN GENERAL.—Title I of the United States Housing Act of 1937 
(42 U.S.C. 1437 et seq.) is amended by adding at the end the 
following new section: 
"FAMILY INVESTMENT CENTERS 
Equal 
"SEC. 22. (a) PURPOSE.—The purpose of this section is to provide 
educational 
families living in public housing with better access to educational 
^aal ^^^ ^ 
^^^ 
employment opportunities to achieve self-sufficiency 
and 
employment 
independence by— 
opportunity. 
"(1) developing facilities in or near public housing for training 
42 use I437t. 
^jj(j support services; 
"(2) mobilizing public and private resources to expand and 
improve the delivery of such services; 
"(3) providing funding for such essential training and support 
services that cannot otherwise be funded; and 
"(4) improving the capacity of management to assess the 
training and service needs of families with children, coordinate 
the provision of training and services that meet such needs, and 
ensure the longterm provision of such training and services. 
"(b) GRANT AUTHORITY.— 
"(1) IN GENERAL.—The Secretary may make grants to public 
housing agencies to adapt public housing to help families living 
in the public housing gain better access to educational and job 
opportunities to achieve self-sufficiency 
and independence. 
Assistance under this section may be made available only to 
public housing agencies that demonstrate to the satisfaction of 
the Secretary that supportive services (as such term is defined 
under subsection (j)) will be made available. Facilities assisted 
under this section shall be in or near the premises of public 
housing. 
"(2) 
SUPPLEMENTAL GRANT SET-ASIDE.—The Secretary 
may 
reserve not more than 5 percent of the amounts available in 
each fiscal year under this section to supplement grants 
awarded to public housing agencies under this section when, in 
the determination of the Secretary, such supplemental adjust-
ments are required to maintain adequate levels of services to 
eligible residents. 
"(c) USE OF AMOUNTS.—Amounts received from a grant under this 
section may only be used for— 
"(1) the renovation, conversion, or combination of vacant 
dwelling units in a public housing project to create common 
areas to accommodate the provision of supportive services; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4197 
"(2) the renovation of existing common areas in a public 
housing project to accommodate the provision of supportive 
services; 
"(3) the renovation of facilities located near the premises of 1 
or more public housing projects to accommodate the provision of 
supportive services; 
(4) the provision of not more than 15 percent of the cost of 
any supportive services (which may be provided directly to 
eligible residents by the public housing agency or by contract or 
lease through other appropriate agencies or providers) only if 
the public housing agency demonstrates to the satisfaction of 
the Secretary that— 
"(A) the supportive services are appropriate to improve 
the access of eligible residents to employment and edu-
cational opportunities; and 
"(B) the public housing agency has made diligent efforts 
to use or obtain other available resources to fund or provide 
such services; and 
"(5) the employment of service coordinators subject to such 
minimum qualifications and standards that the Secretary may 
establish to ensure sound management, who may be responsible 
for— 
"(A) assessing the training and service needs of eligible 
residents; 
"(B) working with service providers to coordinate the 
provision of services and tailor such services to the needs 
and characteristics of eligible residents; 
"(C) mobilizing public and private resources to ensure 
that the supportive services identified pursuant to subsec-
tion (eXD can be funded over the time period identified 
under such subsection; 
"(B) monitoring and evaluating the impact and effective-
ness of any supportive service program receiving capital or 
operating assistance under this section; and 
"(V) perforttiing such other duties and functions that the 
Secretary determines are appropriate to provide families 
living in public housing with better access to educational 
and employment opportunities. 
"(d) ALLOCATION OF GRANT AMOUNTS.—Assistance under this sec-
tion shall be allocated by the Secretary among approvable applica-
tions submitted by public housing agencies. 
"(e) APPUCATIONS.—Applications for assistance under this section 
shall be submitted in such form and in accordance with such 
procedures as the Secretary shall establish. Each application for 
assistance shall contain— 
"(1) a description of the supportive services that are to be 
provided over a 5-year period (or such longer period that the 
Secretary determines to be appropriate if assistance is provided 
for activities under subsection (c) that involve substantial re-
habilitation); 
"(2) a firm commitment of assistance from 1 or more sources 
ensuring that the supportive services will be provided for not 
less than 1 year following the completion of activities assisted 
under subsection (c); 
"(3) a description of public or private sources of assistance 
that can reasonably be expected to fund or provide supportive 
services for the entire period specified under paragraph (1), 
104 STAT. 4198 
PUBLIC LAW 101-625—NOV. 28, 1990 
including evidence of any intention to provide assistance ex-
pressed by State and local governments, private foundations, 
and other 
organizations 
(including profit 
and 
nonprofit 
organizations); 
'(4) certification from the appropriate State or local agency 
(as determined by the Secretary) that— 
"(A) the provision of supportive services described in 
paragraph (1) is well designed to provide resident families 
better access to educational and employment opportunities; 
and 
"(B) there is a reasonable likelihood that such services 
will be funded or provided for the entire period specified in 
paragraph (1); 
"(5) a description of assistance for which the public housing 
agency is appl3dng under this section; and 
"(6) any other information or certifications that the Secretary 
determines are necessary or appropriate to achieve the purposes 
of this section. 
"(f) SELECTION.—The Secretary shall establish selection criteria 
for grants under this section, which shall take into account— 
"(1) the ability of the public housing agency or a designated 
service provider to provide the supportive services identified 
under subsection (eXl); 
"(2) the need for such services in the public housing project; 
"(3) the extent to which the envisioned renovation, conver-
sion, and combination activities are appropriate to facilitate the 
provision of such services; 
"(4) the extent to which the public housing agency has dem-
onstrated that such services will be provided for the period 
identified under subsection (eXl); 
"(5) the extent to which the public housing agency has a good 
record of maintaining and operating public housing; and 
"(6) any other factors that the Secretary determines to be 
appropriate to ensure that amounts made available under this 
section are used effectively. 
"(g) REPORTS.— 
"(1) To SECRETARY.—Each public housing agency receiving a 
grant under this section shall submit to the Siecretary, in such 
form and at such time as the Secretary shall prescribe, an 
annual progress report describing and evaluating the use of 
grant amounts received under this section. 
"(2) To CONGRESS.—The Secretary shall submit to the Con-
gress annually, as a part of the report of the Secretary under 
section 8 of the Department of Housing and Urban Develop-
ment Act, an evaluation of the effectiveness of activities carried 
out with grants under this section in such fiscal year. Such 
report shall summarize the progress reports submitted pursuant 
to paragraph (1). 
"(h) EMPLOYMENT OF PUBUC HOUSING RESIDENTS.—Each public 
housing agency shall, to the maximum extent practicable, employ 
public housing residents to provide the services assisted under th^ 
section or from other sources. Such persons shall be paid at a rate 
not less than the highest of— 
"(1) the minimum wage that would be applicable to the 
employee under the Fair Labor Standards Act of 1938, if section 
6(aXl) of such Act applied to the resident and if the resident 
were not exempt under section 13 of such Act; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4199 
"(2) the State or local minimum wage for the most nearly 
comparable covered emplojonent; or 
"(3) the prevailing rates of pay for persons employed in 
similar public occupations by the same employer. 
"(i) TREATMENT OF INCOME.—No service provided to a public hous-
ing resident under this section may be treated as income for the 
purpose of any other program or provision of State or Federal law. 
"0") DEFINITION OF SUPPORTIVE SERVICES,—For purpose of this 
section, the term 'supportive services' means new or significantly 
expanded services that the Secretary determines are essential to 
providing families living with children in public housing with better 
access to educational and emplojnnent opportunities. Such services 
may include— 
"(1) child care; 
"(2) employment training and counseling; 
"(3) literacy training; 
"(4) computer skills training; 
"(5) assistance in the attainment of certificates of high school 
equivalency; and 
"(6) other appropriate services. 
"(k) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 
be appropriated to carry out this section $25,000,000 in ^ c a l year 
1991, and $26,100,000 in fiscal year 1992.". 
(b) CONFORMING AMENDMENT.—Section 3 of the United States 
Housing Act of 1937 (42 U.S.C. 1437a), as amended by the precediijg 
provisions of this Act, is further amended by adding at the end the 
following new undesignated paragraph: 
"The earnings of and benefits to any public housing resident 
resulting from participation in a program providing employment 
training and supportive services in accordance with the Family 
Support Act of 1988, section 22 of this Act, or any comparable 
Federal, State, or local law shall not be considered as income for the 
purposes of determining a limitation on the amount of rent paid by 
the resident during— 
"(1) the period that the resident participates in such program; 
and 
"(2) the period that— 
"(A) begins with the commencement of emplojnnent of 
the resident in the first job acquired by the person after 
completion of such program that is not funded by assistance 
under this Act; and 
"(B) ends on the earlier o
f
— 
"(i) the date the resident ceases to continue employ-
ment without good cause as the Secretary shall deter-
mine; or 
"(ii) the expiration of the 18-month period beginning 
on the date referred to in subparagraph (A).". 
SEC. 516. ELIGIBILITY OF INDIAN MUTUAL HELP HOUSING FOR COM-
PREHENSIVE IMPROVEMENT ASSISTANCE. 
Section 202(b) of the United States Housing Act of 1937 (42 U.S.C. 
1437bbOt))) is amended— 
(1) by striking "The Secretary" and inserting the following: 
"(1) IN GENERAL.—The Secretary", and 
(2) by adding at the end the following new paragraph: 
"(2) ELIGIBILITY FOR CLAP.—Notwithstsmding the provisions of 
section 14(c), the Secretary may provide assistance provided for 
104 STAT. 4200 
PUBLIC LAW 101-625—NOV. 28, 1990 
comprehensive modernization under section 14 for the housing 
projects under this section for the purposes under section 14. 
Any assistance shall be provided under this paragraph only in 
the form of a single grant for each housing project (or unit 
within a project) selected for such assistance.". 
SEC. 517. PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT GRANTS. 
(a) AUTHORIZATION OF APPROPRIATIONS.—^^Section 222(g) of the 
Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701z-6 
note) is amended to read as follows: 
"(g) AUTHORIZATION OF APPROPRIATIONS.—To the extent provided 
in appropriations Acts, of the amounts made available for public 
^ 
housing grants under section 5(c) of the United States Housing Act 
of 1937, there shall be set aside to carry out this section $15,000,000 
for fiscal year 1991 and $15,700,000 for fiscal year 1992. Any amount 
appropriated pursuant to such section 5(c) and authorized for use 
under this subsection shall remain available until expended.". 
(b) 
REDESIGNATION AS EARLY CHILDHOOD DEVELOPMENT PRO-
GRAM.— 
(1) IN GENERAL.—Section 222 of the Housing and Urban-Rural 
12USC1701Z-6 
Recovery Act of 1983 (12 U.S.C. 1701-6 note) is amended— 
"ote. 
(A) in subsection (a), by striking "child care services" 
each place it appears and inserting "early childhood devel-
opment services"; 
(B) in subsection Ot))— 
(i) in the matter preceding paragraph (1), by striking 
"child care services" and inserting "early childhood 
development services"; 
(ii) in paragraph (1), by striking "a child care services 
program" and inserting "an early childhood develop-
ment program"; 
(iii) in paragraph (2), by striking "child care services" 
and inserting "early childhood development services"; 
and 
(iv) in paragraphs (3), (4), (5), and (6), by striking 
"child care services program" each place it appears and 
inserting "early childhood development program"; 
(C) in subsection (c)— 
(i) in paragraphs (1) and (2), by striking "child care 
services" each place it appears and inserting "early 
childhood development services"; and 
(ii) in paragraph (3), by striking "child care services 
programs" and inserting "early childhood development 
programs"; 
(D) in subsection (d)— 
(i) in parsigraph (2), by striking "child care services" 
and inserting "early childhood development services"; 
(ii) in paragraph (3), in the matter preceding subpara-
graph (A), by striking "child care services program" 
and inserting "early childhood development program"; 
(iii) in paragraph (3XA), by striking "child care serv-
ices" and inserting "early childhood development serv-
ices"; and 
(iv) in paragraph (4), by striking "child care services" 
each place it appears and inserting "early childhood 
development services"; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4201 
(E) in subsection (e), by striking "child care services" and 
inserting "early childhood development services". 
(2) CONFORMING AMENDMENT.—The section heading for sec-
tion 222 of the Housing and Urban-Rural Recovery Act of 1983 
(12 U.S.C. 1701-6 note) is amended to read as follows: 
"PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT PROGRAM". 
12 use 1701Z-6 
note. 
SEC. 518. INDIAN PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT 
DEMONSTRATION PROGRAM. 
12 use 1701Z-6 
note. 
(a) SET-ASIDE OF INDIAN PUBUC HOUSING AMOUNTS.—Of any 
amounts approved in appropriations Acts under section 5(c)(7) of the 
United States Housing Act of 1937 for public housing grants for 
Indian housing, the Secretary of Housing and Urban Development 
shall use $5,000,000 in fiscal year 1991 and $5,200,000 in fiscal year 
1992 (to the extent such amounts are approved under such appro-
priations Acts) for carrying out a demonstration program under this 
section. Under the demonstration, the Secretary shall make grants 
Grant programs. 
to nonprofit organizations to assist such organizations in providing 
early childhood development services in or near low-income housing 
developed or operated pursuant to a contract between the Secretary 
of Housing and Urban Development and an Indian housing author-
ity for low-income families who reside in such Indian public housing. 
(b) OPERATION OF DEMONSTRATION.—Except as provided in this 
section, the Secretary of Housing and Urban Development shall 
carry out the demonstration program under this section in low-
income housing developed or operated pursuant to a contract be-
tween the Secretary and an Indian housing authority in the same 
manner as the demonstration program under section 222 of the 
Housing and Urban-Rural Recovery Act of 1983 is carried out. For 
purposes of this section, any reference to "public housing" or a "low 
income housing project" in section 222 of such Act is deemed to refer 
to low-income housing developed or operated pursuant to a contract 
between the Secretary and an Indian housing authority. 
(c) LIMITATIONS.— 
(1) TRIBAL DIVERSITY.—The Secretary of Housing and Urban 
Development shall provide that the demonstration program 
under this section is carried out in not more than 1 Indian 
public housing project for any single Indian tribe. 
(2) GEOGRAPHIC DIVERSITY.—The Secretary of Housing and 
Urban Development shall carry out the demonstration progreun 
under this section through various Indian housing authorities 
and provide for geographic distribution smiong such housing 
authorities. 
(d) REPORT.— 
(1) IN GENERAL.—Not later than the expiration of the 3-year Reports. 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall prepare 
and submit to the Congress a detailed report setting forth the 
findings and conclusions of the Secretary as a result of carrying 
out the demonstration program established in this section. Such 
report shall include any recommendations of the Secretary with 
respect to the establishment of a permanent program of Eissist-
ing early childhood development services in or near low-income 
housing developed or operated pursuant to a contract between 
the Secretary and an Indian housing authority. 
104 STAT. 4202 
PUBLIC LAW 101-625—NOV. 28, 1990 
(2) CONFORMING PROVISION.—Notwithstanding subsection (b) 
of this section, section 222(e) of the Housing and Urban-Rural 
Recovery Act of 1983 (regarding submission of a report) shall 
not apply to this section and the demonstration program carried 
out under this section. 
42 use 1437a-l. 
SEC. 519. PUBLIC HOUSING RENT WAIVER FOR POLICE OFFICERS. 
(a) AUTHORITY.—Notwithstanding any other provision of law, the 
Secretary of Housing and Urban Development may permit public 
housing agencies to allow police officers and other security person-
nel (who are not otherwise eligible for residence in public housing) 
to reside in public housing dwelling units in accordance with this 
section. 
(b) PLAN.—To be eligible to utilize dwelling units as provided 
under this section, a public housing agency shall submit to the 
Secretary a plan identifying the projects in which the police officers 
or security personnel will reside and describing the anticipated 
benefits from such residence. 
(c) APPROVAL.—The Secretary may approve a plan and authorize 
the use of dwelling units under this section only if the Secretary 
determines that such use will— 
(1) increase security for other public housing residents; 
(2) result in a limited loss of income to the public housing 
agency; and 
, 
(3) not result in a significant reduction of units available for 
residence by families eligible for such residence under the 
provisions of the United States Housing Act of 1937. 
The Secretary shall notify each public housing agency submitting a 
plan under subsection (b) of approval or disapproval of the plan not 
later than 30 days after the Secretary receives the plan. 
(d) TERMS.—Upon approving a plan under subsection (b), the 
Secretary shall waive the applicability of any occupancy require-
ments with respect to the officers or other personnel, and may 
permit the public housing agency submitting the plan to establish 
such special rent requirements and other terms and conditions of 
occupgmcy that the Secretary considers appropriate. 
Drug abuse. 
42 use 11903a. 
SEC. 520. PUBLIC HOUSING YOUTH SPORTS PROGRAMS. 
(a) YOUTH SPORTS PROGRAM GRANTS.—From amounts provided for 
public and assisted housing drug elimination grants under section 
5130(a) of the Anti-Drug Abuse Act of 1988, the Secretary of Housing 
and Urban Development may make grants to qualified entities 
under subsection (b) to carry out youth sports programs in projects 
of public housing agencies with substantial drug problems. 
(b) ENTITIES QUAUFIED TO RECEIVE GRANTS.—Grants under this 
section may be made only to— 
(1) States; 
(2) units of general local government; 
(3) local park and recreation districts and agencies; 
(4) public housing agencies; 
(5) nonprofit organizations providing youth sports services 
programs; 
(6) Indian tribes; and 
(7) Indian housing authorities. 
(c) USE OF GRANTS.— 
(1) PUBLIC HOUSING SITES WITH SUBSTANTIAL DRUG PROBLEMS.— 
Grants under this section shall be used for youth sports pro-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4203 
grams only with respect to public housing sites that the Sec-
retary determines have a substantial problem regarding the use 
or sale of illegsd drugs. 
/ 
(2) YOUTH SPORTS PROGRAM ELIGIBIUTY.—To be eligible to 
receive assistance from a grant under this section, a youth 
sports program shall be designed and organized as follows: 
(A) The sports program shall serve primarily youths from 
the public housing project in which the program assisted by 
the grant is operated. 
(B) The sports program shall provide positive sports 
activities or positive cultural, recreational, or other activi-
ties, designed to appeal to youths as Eilternatives to the drug 
environment in the public housing project. 
(C) The sports progreim shall be operated as, in conjunc-
tion with, or in furtherance of, an organized program or 
plan designed to eliminate drugs and drug-related problems 
in the public housing project or projects within the public 
housing agency. 
(d) ELIGIBLE ACTIVITIES.—Any qualified entity that receives a 
grant under this section may use amounts from the grant to assist in 
carrying out a youth sports program in any of the following 
manners: 
(1) Acquisition; construction, or rehabilitation of community 
centers, parks, or playgrounds. 
(2) Redesigning or modifying public spaces in public housing 
projects to provide increased utilization of the areas by youth 
sports programs. 
(3) Provision of public services, including salaries and ex-
penses for staff of youth sports programs, cultural activities, 
educational programs relating to drug abuse, and sports and 
recreation equipment. 
(e) GRANT AMOUNT LIMITATIONS.— 
(1) MATCHING AMOUNT.—The Secretary may not make a grant 
to any qualified entity that applies for a grant under subsection 
(f) unless the applicant entity certifies to the Secretary, as the 
Secretary shall require, that the applicant will supplement the 
amount provided by the grant with an amount of funds from 
non-Federal sources equal to or greater than 50 percent of the 
Eunount provided by the grant. 
(2) NON-FEDERAL FUNDS.—For purposes of this subsection, the 
Inter-
term "funds from non-Federal sources" includes funds from 
governmental 
States, units of general local governments, or agencies of such 
^^'^^^o^s. 
governments, Indian tribes, private contributions, any salary 
paid to staff to carry out the youth sports program of the 
recipient, the value of the time and services contributed by 
volunteers to carry out the program of the recipient at a rate 
determined by the Secretary, the value of £uiy donated material, 
equipment, or building, and the value of any lease on a building. 
(3) PROHIBITION OF SUBSTITUTION OF FUNDS.—Neither amounts 
received from grants under this section nor any State or local 
government funds used to supplement such amounts may be 
used to replace other public funds previously used, or des-
ignated for use, for the purposes under this Act. 
(4) MAXIMUM ANNUAL GRANT AMOUNT.—For any single fiscal 
year, the Secretary may not award grants under this section for 
carr3dng out a youth sports program with respect to any single 
public housing project in an amount exceeding $125,000. 
104 STAT. 4204 
PUBLIC LAW 101-625—NOV. 28, 1990 
(f) APPLICATIONS.—To be eligible to receive a grant under this 
section, a qualified entity under subsection (b) shall submit to the 
Secretary an application as the Secretary may require, which shall 
include the following: 
(1) A description of the organization of the youth sports 
program. 
(2) A description of the nature of services provided by the 
youth sports program. 
(3) An estimate of the number of youth involved. 
(4) A description of the extent of involvement of local sports 
organizations or sports figures. 
(5) A description of the facilities used. 
(6) A description of plans to continue the youth sports pro-
gram in the future. 
(7) A statement regarding the extent to which the youth 
sports program 
meets the 
criteria 
for 
selection 
under 
subsection (g). 
(8) A description of the planned schedule and activities of the 
youth sports program and the financial and other resources 
committed to each activity and service of the program. 
(9) A budget describing the share of the costs of the youth 
sports program provided by the grant under this section and 
other sources of funds, including funds required under subsec-
tion (eXD. 
(10) Any other information that the Secretary may require. 
(g) SELECTION CRITERIA.—The Secretary shall select qualified enti-
ties that have applied under subsection (f) to receive grants under 
this section pursuant to a competition based on the following 
criteria: 
(1) The extent to which the youth sports program to be 
assisted with the grant addresses the particular needs of the 
area to be served by the program and employs methods, ap-
proaches, or ideas in the design or implementation of the pro-
gram particularly suited to fulfilling such needs (whether such 
methods are conventional or unique and innovative). 
(2) The technical merit of the application of the qualified 
entity. 
(3) The qualifications, capabilities, and experience of the 
personnel and staff of the sports program who are critical to 
achieving the objectives of the program as described in the 
application. 
(4) The capabilities, related experience, facilities, techniques 
of the applicant for carrying out the youth sports program and 
achieving the objectives of the program as described in the 
application and the potential of the applicant for continuing the 
youth sports program. 
(5) The severity of the drug problem at the local public 
housing site for the youth sports program and the extent of any 
planned or actual efforts to rid the site of the problem. 
(6) The extent to which local sports organizations or sports 
figures are involved. 
(7) The extent of the support of the public housing agency for 
the program, coordination of proposed activities with local resi-
dent management groups or associatiojis (where such groups 
exist) and coordination of proposed activities with ongoing pro-
grams of the applicant that further the purposes of this section. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4205 
(8) The extent of non-Federal contributions that exceed the 
amount of such funds required under subsection (e)(1). 
(9) In the case of a qualified entity under paragraph (3) or (4) 
of subsection (b), the extent to which the applicant has dem-
onstrated local government support for the program. 
(h) REPORT.—Each qualified entity that receives a grant under this 
section shall submit to the Secretary, not later than the expiration 
of the 90-day period beginning on the date on which the grant 
amounts provided under this section are fully expended, a report 
describing the activities carried out with the grant. 
(i) DEFINITIONS.—For purposes of this section: 
(1) INDIAN TRIBE.—The term "Indian tribe" has the meaning 
given such term in section 102(aX17) of the Housing and 
Community Development Act of 1974. 
(2) PuBuc HOUSING AGENCY.—The term "public housing 
agency" has the meaning given the term in section 3(b) of the 
United States Housing Act of 1937 (42 U.S.C. 1437a(b)). 
(3) PuBUC HOUSING PROJECT.—The terms "project" and 
"public housing" have the meanings given the terms in section 
3(6) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)). 
(4) QUALIFIED ENTITY.—The term "qualified entity" means an 
entity eligible under subsection (b) to apply for and receive a 
grant under this section. 
(5) STATE.—The term "State" means the States of the United 
States, the District of Columbia, the Commonwealth of Puerto 
Rico, the Commonwealth of the Northern Mariana Islands, 
Guam, the Virgin Islands, American Samoa, the Trust Territory 
of the Pacific Islands, and any other territory or possession of 
the United States. 
(6) UNIT OF GENERAL LOCAL GOVERNMENT.—The term "unit of 
general local government" means any city, town, township, 
county, parish, village, or other general purpose political sub-
division of a State. 
(7) SECRETARY.—The term "Secretary" means the Secretary of 
Housing and Urban Development. 
(j) REGULATIONS.—The Secretary shall issue any regulations nec-
essary to carry out this section. 
(k) AUTHORIZATION OF APPROPRIATIONS.—Section 5129 of the Anti-
Drug Abuse Act of 1988 (42 U.S.C. 11908), as amended by the 
preceding provisions of this Act, is further amended by inserting 
after the first sentence the following new sentence: 
From any 
amounts appropriated under this section in each fiscal year, 5 
percent of such amounts shall be available for public housing youth 
sports program grants under section 520 of the Cranston-Gonzalez 
National Affordable Housing Act for such fiscal year.". 
SEC. 521. PUBLIC HOUSING ONE-STOP PERINATAL SERVICES DEM- 
42 USC 1437t 
ONSTRATION. 
note. 
(a) ESTABUSHMENT OF DEMONSTRATION PROGRAM.— 
(1) IN GENERAL.—The Secretary of Housing and Urban Devel-
opment, in consultation with the Secretary of Health and 
Human Services, shall carry out a program to demonstrate the 
effectiveness of providing grants to public housing agencies to 
assist such agencies in providing facilities for making one-stop 
perinatal services programs (as defined in subsection (e)(1)) 
available for pregnant women who reside in public housing. 
104 STAT. 4206 
PUBLIC LAW 101-625—NOV. 28, 1990 
Under the demonstration program, the Secretary shall make 
grants to not more than 10 public housing agencies. 
(2) CONSULTATION REQUIREMENTS.—In carrying out the dem-
onstration program under this section, the Secretary shall con-
sult with the heads of other appropriate Federal agencies. 
OJ) ALLOCATION OF ASSISTANCE.— 
(1) PREFERENCES.—In selecting public housing agencies for 
grants under this section, the Secretary shall give preference to 
the following public housing agencies: 
(A) AREAS WITH HIGH INFANT MORTALITY RATES.—Public 
housing agencies serving areas with high infant mortality 
rates. 
(B) SECURE FACILITIES.—Public housing agencies that 
demonstrate, to the satisfaction of the Secretary, that secu-
rity will be provided so that women are safe when partici-
pating in the one-stop perinatal services program carried 
out at the facilities provided or assisted under this section. 
(2) LIMITATION ON GRANT AMOUNT.—The aggregate amount 
provided under this section for any public housing project may 
not exceed $15,000. 
(c) DEMONSTRATION PROGRAM REQUIREMENTS.— 
(1) APPLICATIONS.—Applications for grants under this section 
shall be made by public housing agencies in accordance with 
procedures established by the Secretary and shall include a 
description of the one-stop perinatal services program to be 
provided in the facilities provided or assisted under this section. 
(2) USE OF GRANTS.—Any public housing agency receiving a 
grant under this section may use the grant only for the costs of 
providing facilities and minor renovations of facilities necessary 
to make one-stop perinatal services programs available to preg-
nant women who reside in public housing. 
(3) REPORTS TO SECRETARY.—Each public housing agency 
receiving a grant under this section for any fiscal year shall 
submit to the Secretary, not later than 3 months after the end 
of such fiscal year, a report describing the facilities provided by 
the public housing agency under this section and the one-stop 
perinatal services program carried out in such facilities. The 
report shall include data on the size of the facilities, the costs 
and extent of any renovations, the previous use of the facilities, 
the number of women assisted by the program, the trimester of 
the pregnancy of the women at the time of initial assistance, 
infant birthweight, infant mortality rate, and other relevant 
information. 
(4) APPUCABLE STANDARDS.—No provision of this section may 
be construed to authorize the Secretary to establish any health, 
safety, or other standards with respect to the services provided 
by the one-stop perinatal services program or facilities provided 
or assisted with grants received under this section. Such serv-
ices and facilities shall comply with all applicable State and 
local laws, regulations, and ordinances, and all requirements 
established by the Secretary of Health and Human Services for 
such services and facilities. 
(d) REPORT TO CONGRESS.—Not later than 1 year after the date 
that amounts to carry out this section are first made available under 
appropriations Acts, the Secretary shall prepare and submit to the 
Congress a comprehensive report setting forth the findings and 
conclusions of the Secretary as a result of carrying out the dem-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4207 
onstration program under this section. The report shall include any 
recommendations of the Secretary with respect to the establishment 
of a permanent program of providing facilities in public housing for 
making perinatal services available to pregnant women who reside 
in the public housing. 
(e) DEFINITIONS.—^For purposes of this section: 
(1) ONE-STOP PERINATAL SERVICES PROGRAM.—The term "one-
stop perinatal services program" means a program to provide a 
wide range of services for pregnant and new mothers in a 
coordinated manner at a drop-in center, which may include any 
of the following: 
(A) INFORMATION AND EDUCATION.—Information and edu-
cation for pregnant women regarding perinatal care serv-
ices, and related services and resources, necessary to 
decrease infant mortality and disability. 
(B) HEALTH CARE SERVICES.—Basic health care services 
that can be provided without a physician present. 
(C) REFERRAL.—Basic health screening of pregnant 
women and referrals for health care services. 
(D) FOLLOWUP.—Followup assessment of women and in-
fants (including measurement of weight) and referrals for 
health care services and related services and resources. 
(E) SOCIAL WORKER.—Information and assistance regard-
ing Federal and State socisil services provided by a social 
worker. 
(F) OTHER.—Any other services to assist pregnant or new 
mothers. 
(2) PuBUC HOUSING.—The terms "public housing" and "public 
housing agency" have the meanings given such terms in section 
3(b) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)). 
(3) SECRETARY.—The term "Secretary" means the Secretary of 
Housing and Urban Development. 
(f) REGULATIONS.—The Secretary shall issue any regulations nec-
essary to carry out this section. 
(g) AUTHORIZATION OF APPROPRIATIONS.—Of any amounts ap-
groved in appropriations Acts under section 22(k) of the United 
tates Housing Act of 1937 for fiscal year 1991, the Secretary shall 
use $150,000 (to the extent such amounts are approved in appropria-
tions Acts) for carrying out the demonstration program under this 
section. 
SEC. 522. PUBLIC HOUSING MIXED INCOME NEW COMMUNITIES STRAT- 
42 USC 1437f 
EGY DEMONSTRATION. 
note. 
(a) ESTABUSHMENT OF DEMONSTRATION PROGRAM.— 
(1) IN GENERAL.—The Secretary of Housing and Urban Devel-
opment shall carry out a program to demonstrate 
the 
effectiveness of promoting the revitalization of troubled urban 
communities through the provision of public housing in 
socioeconomically mixed settings combined with the innovative 
use of public housing operating subsidies to stimulate the devel-
opment of new affordable housing in such communities. 
(2) Ck)MPREHENSivE SERVICES.—Housing units provided under 
the demonstration program under this section shall be made 
available in connection with a comprehensive program of serv-
ices and incentives under subsections (h) and (i), in order to 
prepare participating families for successful transition to the 
104 STAT. 4208 
PUBLIC LAW 101-625—NOV. 28, 1990 
private rental housing market and homeownership within a 
reasonable period of time. 
(b) COORDINATING COMMITTEE.— 
(1) EsTABUSHMENT.—For a public housing agency to be eli-
gible for designation or selection under subsection (d) for partici-
pation in the demonstration program, the chief executive officer 
of each unit of general local government in which the public 
housing agency is located shall appoint a coordinating commit-
tee under this paragraph. The coordinating committee shall 
participate in developing a plan for implementing the dem-
onstration program, review, monitor, and make recommenda-
tions for improvements in activities under the demonstration 
program, and ensure the coordination and delivery of services 
under subsection (h). 
(2) MEMBERSHIP.—Each coordinating committee shall be com-
posed of 12 members, who shall include, but may not be limited 
to, the following individuals: 
(A) A representative of the chief executive officer of the 
applicable unit of general local government. 
(B) A representative of the applicable public housing 
agency. 
(C) A representative of the regional administrator of the 
Department of Housing and Urban Development. 
(D) A representative of a local resident management 
corporation. 
(E) Not less than 1 individual affiliated with a local 
agency that administers programs in 1 of the following 
areas: health, human services, substance abuse, education, 
economic and business development, law enforcement, and 
housing. 
(F) A representative from among local businesses engaged 
in housing and real estate. 
(G) A representative from among business engaged in 
real estate ^nancing. 
(3) SOCIAL SERVICE COMMITTEES.—Each coordinating commit-
tee established under this subsection shall establish a sub-
committee on social services, which shall, before any action is 
taken under subsection (eXl) (with respect to the demonstration 
program as carried out by the applicable public housing 
agency), identify the specific services that are required to 
successfully carry out the demonstration program. 
(c) INTERAGENCY COOPERATION.—The Secretary shall coordinate 
with the appropriate heads of other Federal Eigencies as necessary to 
coordinate the implementation of the demonstration program and 
endeavor to ensure the delivery of supportive services required 
under subsection (h). 
(d) SCOPE OF DEMONSTRATION PROGRAM.— 
Illinois. 
(1) PARTICIPATING PUBLIC HOUSING AGENCIES.—The Secretary 
shall carry out the demonstration program with respect to 
public housing for families administered by the Housing 
Authority of the City of Chicago, in the State of Illinois. The 
Secretary may also carry out the demonstration program with 
respect to public housing administered by not more than 3 other 
public housing agencies. 
(2) PARTICIPATING PUBUC HOUSING UNITS.—Over the term of 
the demonstration, the demonstration may be applied to not 
more than 15 percent of the total number of public housing 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4209 
units for families administered by each participating public 
housing agency. 
(3) NoNDiSPLACEMENT.—No person who is a tenant of public 
housing during the term of the demonstration program may be 
involuntarily relocated or displaced under the demonstration 
program, 
(e) HOUSING DEVELOPMENT.— 
(1) USE OF PUBLIC HOUSING OPERATING SUBSIDIES.—For 
the 
purpose of providing reasonable and necessary operating costs 
in connection with the development of additional affordable 
housing, under the demonstration program the Secretary shsdl 
amend the annual contributions contract between the Secretary 
and each participating public housing agency as the Secretary 
determines appropriate to permit the public housing agency to 
utilize operating subsidy amounts allocated to the agency under 
section 9 of the United States Housing Act of 1937 with respect 
to newly constructed or rehabilitated housing units that are 
privately developed and owned. Such units shall be reserved for 
use under the demonstration program for occupancy by very 
low-income families as provided under this subsection and 
subsection (g). 
(2) LEASE TERMS.—Operating subsidy amounts shall be pro-
vided for the operation of housing under paragraph (1) pursuant 
to a lease contract between the owner of the housing and the 
public housing agency, which shall specify— 
(A) the number of units to be leased exclusively to the 
public housing agency for the term of the demonstration 
program, subject only to the availability of amounts under 
paragraph (1) or other funds for such purposes; and 
(B) the requirements under subsection (f)(6). 
(3) TRANSFER OF AMOUNTS.—Operating subsidy amounts may 
be provided for a unit of housing under paragraph (1) only after 
the execution of a lease under subsection (fK5) for 1 correspond-
ing public housing unit. 
(4) RENTAL TERMS.—Units leased by a participating public 
housing agency under this subsection shall be available only to 
very low-income families that reside, or have been offered a 
unit, in public housing administered by the public housing 
agency and that enter into a voluntary contract under subsec-
tion (gXD. The rental charge for each unit shall be the amount 
equal to 30 percent of the adjusted income of the resident family 
(as determined under section 3(b) of the United States Housing 
Act of 1937), except that the rental charge may not exceed a 
ceiling rent determined by the public housing agency in the 
manner that monthly rent is determined under section 
3(aX2XA)ofsuchAct. 
(5) INCOME MIX.—Not more than 25 percent of the units in 
each privately developed housing project under the demonstra-
tion program may be leased by a public housing agency pursu-
ant to a lease contract under paragraph (2). The number of 
units under each such lease may not be less than the number of 
public housing units that, notwithstanding the demonstration 
program, would have been assisted with the operating subsidy 
amounts made available under such contract, to ensure that 
there shall be no loss of public housing units. 
(6) COORDINATION WITH OTHER ENTITIES FOR DEVELOPMENT OF 
HOUSING.—A participating public housing agency may seek the 
104 STAT. 4210 
PUBLIC LAW 101-625—NOV. 28, 1990 
cooperation and receive assistance from State, county, and local 
governments and the private sector to develop housing for use 
under this subsection. Such assistsince may include, but is not 
limited to— 
(A) donations of land and write-downs and discounts on 
land by local governments; 
(B) abatement of real estate taxes for specified periods by 
local, county, or State governments; 
(C) assignment of community development block grant 
funds and loan guarantees made available under title I of 
the Housing and Community Development Act of 1974; 
(D) low interest rate financing through Federal Home 
Loan Bank programs. State or Federal programs, and pri-
vate lenders; 
(E) low-income housing tax credits from State and local 
governments; and 
(F) mortgage revenue bonds from State or local govern-
ments. 
(7) DETERMINATION OF LOCATION AND NUMBER OF UNITS.— 
(A) IN GENERAL.—A participating public housing agency 
and the applicable unit of general local government shall 
jointly determine the location of any newly constructed or 
rehabilitated housing to be utilized under the demonstra-
tion program carried out by the public housing agency and 
the number of units to be developed annually, with ap-
proval of the legislative body of the local government. 
(B) LIMITATION ON NUMBER OF UNITS.—The total number 
of newly constructed or rehabilitated units that may be 
used under this subsection in the demonstration program 
may not exceed— 
(i) for any participating public housing agency with 
not more than 5,000 public housing units, 15 percent of 
the number of units administered by the agency; 
(ii) tor any participating agency with more than 5,000 
but not more than 25,000 units, 10 percent of the 
number of units administered by the agency; and 
(iii) for any participating agency with more than 
25,000 units, 4 percent of the number of units adminis-
tered by the agency, 
(f) EXISTING PUBUC HOUSING.— 
(1) 
IN 
GENERAL.—To 
facilitate 
the 
establishment 
of 
socioeconomically mixed communities within existing public 
housing developments, under the demonstration program the 
Secretary shall authorize participating public housing agencies 
to lease units in existing public housing projects, as provided in 
this subsection, to low-income families who are not very low-
income families, notwithstanding the provisions of section 16(b) 
of the United States Housing Act of 1937. 
(2) LIMITATIONS ON PUBLIC HOUSING RESIDENTS.— 
(A) IN GENERAL.—Except as provided in subparagraph (B), 
not more than 25 percent of the units in each public 
housing project in which units are utilized under the dem-
onstration program may be occupied by low-income families 
who are not very low-income families. Not less than 75 
percent of the units in each such public housing project 
shall be occupied by very low-income families. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4211 
(B) EXCEPTION.—Upon determining that a public housing 
agency has a special need, the Secretary may provide for 
not more than 50 percent of the units in a public housing 
project utilized under the demonstration program to be 
occupied by low-income families who are not very low-
income families, and the remainder of the units to be 
occupied by very low-income families. Such special need 
may include the need to ensure the successful revitalization 
of 
troubled 
public 
housing 
through 
establishing 
a 
socioeconomically mixed resident population. 
(3) NUMBER OF UNITS.—The number of such units made avail-
able under this subsection by a public housing agency may not 
exceed the number of units provided under subsection (e) to 
participating families. 
(4) RENTAL TERMS.—The rent charged any family occupying a 
unit made available under this subsection may not, at any time 
during the demonstration period, exceed the ceiling rent level 
determined by the public housing agency in the manner that 
monthly rent is determined under section 3(a)(2)(A) of the 
United States Housing Act of 1937. 
(5) LEASE.—A participating public housing agency shall enter 
into a lease with each family occupying a public housing unit 
made available under this subsection. The term of each lease 
shall be 1 year. Each lease shall be. renewable upon expiration 
for a period not to exceed 7 years. A public housing agency may 
extend the period as provided under subsection (j)(l). 
(6) VACANCY.—If, at any time, a participating public housing 
agency is unable to rent a unit made available under this 
subsection and the unit has been vacant for a period of 6 
months, the agency may— 
(A) cancel a lease for 1 unit of housing provided under 
subsection (e) and recapture any operating subsidy amounts 
associated with the unit for use with respect to the vacant 
public housing unit, upon which such public housing unit 
shall be removed from participation in the demonstration 
program and made generally available for occupancy as 
provided under the United States Housing Act of 1937; and 
(B) provide the family residing in the housing unit pro-
vided under subsection (e) (from which operating subsidy 
amounts have been recaptured) with assistance under sec-
tion 8(b) of such Act, subject to the availability of such 
assistance pursuant to appropriations Acts and notwith-
standing any preferences for such assistance under section 
8(dXl)(A)(i) of such Act, and permit the family to remain in 
the unit. 
(g) CONTRACTS WITH PARTICIPATING FAMIUES.— 
(1) IN GENERAL.—Under the demonstration program, a partici-
pating public housing agency shall enter into a contract with 
each family that will reside in a unit of privately developed 
housing leased to the agency under subsection (e). Such family 
shall voluntarily enter into the contract and shall meet the 
criteria established under paragraph (2). The contract shall be 
made part of the lesise executed between the family and the 
public housing agency for such unit, shall set forth the provi-
sions of the demonstration program, and shall specify the re-
sources to be made available to the participating family and the 
responsibilities of the participating family under the program. 
104 STAT. 4212 
PUBLIC LAW 101-625—NOV. 28, 1990 
The lease shall be for a term of 1 year and shall be renewable 
upon expiration for a period not to exceed 7 years, except as 
provided under subsection (j)(l). 
(2) EsTABUSHMENT OF CRITERIA.—Each public housing agency 
shall establish criteria for participation of families in the dem-
onstration program. The criteria shall be based on factors that 
may reasonably be expected to predict the family's ability to 
successfully complete the requirements of the demonstration 
program. The criteria shall include— 
(A) the status and history of employment of family 
members; 
(B) enrollment of the children in the family in an edu-
cational program; 
(C) maintenance by the family of the family's previous 
dwelling; 
(D) ability of adult family members to complete training 
for long-term employment; 
(E) the existence and seriousness of any criminal records 
of family members; and 
(F) the status and history of substance abuse of family 
members. 
(3) CONTINUED RESIDENCE.—Continued residency of families in 
housing provided under subsection (e) shall be contingent upon 
compliance with standards established by the participating 
public housing agency, which shall include— 
(A) all members of the family remaining drug-free; 
(B) no member of the family engaging in Einy criminal 
activity; 
(C) each child in the family remaining in an educational 
program until receipt of a high school diploma or the 
equivalent thereof; and 
(D) family members participating in the support services 
and counseling under subsection (h). 
(h) PROVISION OF SUPPORTIVE SERVICES.—For the entire term of 
residency of a participating family in housing provided under 
subsection (e), the public housing agency shall ensure the availabil-
ity of supportive services and counseling to the family in accordance 
with the terms and conditions of the contract of participation under 
Intergovernmental 
subsection (g)(1). The public housing agency shall provide for such 
relations. 
services and counseling through its own resources and through 
coordination with Federal, State, and local agencies, community-
based organizations, and private individuals and entities. Services 
shall include the following: 
(1) Remedial education. 
(2) Education for completion of high school. 
(3) Job training and preparation. 
(4) Child care. 
(5) Substance abuse treatment and counseling. 
(6) Training in homemaking skills and parenting. 
(7) Family counseling. 
(8) Financial counseling services emphasizing planning for 
homeownership, provided by local financial institutions under 
the Community Reinvestment Act of 1977, provided under sec-
tion 106 of the Housing and Urban Development Act of 1968, or 
otherwise provided. 
(i) ECONOMIC ADVANCEMENT OF PARTICIPATING FAMILIES.— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4213 
(1) EMPLOYMENT.—Under the demonstration program, for the 
entire term of residency of each participating family in housing 
provided under subsection (e)— 
(A) the head of the family shall be required to be em-
ployed on a full-time basis, except that if the head of the 
family becomes unemployed, the public housing agency 
shall review the individual case to determine if mitigating 
factors, such as involuntary loss of employment, warrant 
continuing the family's participation in the demonstration 
program; and 
(B) the public housing agency shall ensure the provision 
of counseling to assist family members in gaining, advanc-
ing in, and retaining employment. 
(2) RENT INCREASES.—During the 1-year period beginning 
upon the residency of a participating family in housing provided 
under subsection (e), the amount of rent charged the participat-
ing family may not be increased on the basis of any increase in 
the earned income of the family, until such earned income 
exceeds 80 percent of the median family income for the area. 
(3) ESCROW SAVINGS ACCOUNTS.— 
(A) PURPOSE AND ESTABUSHMENT.—To ensure that partici-
pating families acquire the financial resources necessary to 
complete a successful transition from assisted rental hous-
ing to homeownership or other private housing, under the 
demonstration program each participating public housing 
agency shall establish for each participating family an 
interest-bearing escrow savings account held by the agency 
in the family's name. 
(B) PERIODIC DEPOSITS.—For the entire term of a partici-
pating family's residency in housing provided under subsec-
tion (e) the public housing agency shsill deposit in the 
account established for the family under subparagraph (A) 
a percentage of the monthly rent charged the family, which 
percentage shall be established in the contract of participa-
tion under subsection (gXl). Any rent increases charged 
because of increases in the earned income of the family 
shall also be deposited into the escrow account. 
(C) ACCESS TO AMOUNTS.—A participating family may 
withdraw amounts in the fsunily's escrow account only 
upon successful completion of participation in the dem-
onstration program, for purchase of a home, for contribu-
tion toward college tuition, or other good cause determined 
by the participating public housing agency. A participating 
family that has committed violations referred to under 
subsection (jX^XB) shall forfeit access to such amounts. 
(4) TREATMENT OF INCREASED INCOME.—Any increase in the 
earned income of a participating family during residency in 
housing provided under subsection (e) may not be considered as 
income or a resource for the purpose of the family for benefits, 
or amount of benefits payable to the family, under any other 
Federal law, unless the income of the family equals or exceeds 
80 percent of the median income of the area (as determined by 
the Secretary with adjustments for smaller and larger families). 
(j) CONCLUSION OF PARTICIPATION.— 
(1) 7-YEAR TERM.—Each family residing in housing provided 
under subsection (e) or (f) shall terminate residency in housing 
not later than the expiration of the 7-year period beginning on 
104 STAT. 4214 
PUBLIC LAW 101-625—NOV. 28, 1990 
the commencement of such residency. Notwithstanding the 
preceding sentence, a public housing agency shall extend the 
period for any family that requests extension of the period— 
(A) because the family is not prepared to enter a program 
for homeownership or to secure any other form of private 
housing; or 
(B) for other good cause. 
(2) INCOMPLETION.— 
(A) IN GENERAL.—Except as provided in subparagraph (B), 
if a participating family is unable to successfully fulfill the 
requirements under the demonstration program, the public 
housing agency shall offer the family a comparable public 
housing unit in a project administered by the agency (not-
withstanding any preference for residency in public hous-
ing under section 6(cX4XAXi) of the United States Housing 
Act of 1937), or assistance under section 8 of such Act 
(subject to availability of amounts provided under appro-
priations Acts and notwithstanding any preference for such 
assistance under section 8(dXlXAXi) of such Act). 
(B) EXCEPTION.—Subparagraph (A) shsdl not apply to any 
participating family that has committed serious or repeated 
violations of the terms and conditions of the lease, viola-
tions of applicable Federal, State, or local law or that has 
been exempted from such requirement by the public hous-
ing agency for other good cause. 
(k) REPORTS TO CONGRESS.— 
(1) INTERIM REPORT.—Upon the expiration of each 2-year 
period during the term of the demonstration, the first such 
period beginning on the date of the enactment of this Act, the 
Secretary shall submit to the Congress a report evaluating the 
effectiveness of the demonstration program under this section. 
(2) FINAL REPORT.—Not later than the expiration of the 60-day 
period beginning on the date of the termination of the dem-
onstration program under subsection (n), the Secretary shall 
submit to the Clongress a final report evEiluating the effective-
ness of the demonstration program under this section. The 
report shall also include findings and recommendations for any 
legislative action appropriate to establish a permanent program 
based on the demonstration program. 
(1) DEFINITIONS.—For purposes of this section: 
(1) The term "coordinating committee" mesuis a local coordi-
nating committee established under subsection (bXl). 
(2) The term "demonstration program" means the program 
established by the Secretary under this section. 
(3) The term "low-income family" means a family whose 
income does not exceed 80 percent of the median income for the 
area, as determined by the Secretary with adjustments for 
smaller and larger families, except that the Secretary may 
establish income ceilings higher or lower than 80 percent of the 
median for the area on the basis of findings by the Secretary 
that such variations are necessary because of prevailing levels 
of construction costs or unusually high or low family incomes. 
(4) The term "operating subsidy amounts" means assistance 
for public housing provided through the performance funding 
system under section 9 of the United States Housing Act of 
1937. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4215 
(5) The term "participating family" means a family that is 
residing in a housing unit provided under subsection (e). 
(6) The term "participating public housing agency" means a 
public housing agency with respect to which the Secretary 
carries out the demonstration program under this section. 
(7) The terms "public housing agency", "public housing", and 
"project" have the meanings given such terms under section 
3(b) of the United States Housing Act of 1937. 
(8) The term "Secretary" mesms the Secretary of Housing and 
Urban Development. 
(9) The term "unit of general local government" means any 
city, town, township, county, parish, village, or other general 
purpose political subdivision of a State. 
(m) REGULATIONS.—The Secretary shall issue any regulations nec-
essary to carry out this section not later than the expiration of the 
90-day period beginning on the date of the enactment of this Act. 
(n) TERMINATION OF DEMONSTRATION PROGRAM.—The demonstra-
tion program under this section shall terminate upon the expiration 
of the 10-year period beginning on the date of the enactment of this 
Act. 
SEC. 523. ENERGY EFFICIENCY DEMONSTRATION. 
42 USC 1437g 
(a) ESTABLISHMENT.—The Secretary of Housing and Urban Devel-
opment shall carry out a demonstration program to encourage the 
use of private energy service companies in accordance with section 
118(a) of the Housing and Clommunity Development Act of 1987. The 
Secretary shall provide technical assistance to 5 public housing 
agencies to demonstrate the opportunities for energy cost reduction 
in 5 public housing projects through energy services contracts. Not 
later than 90 days after the date of the enactment of this Act, the 
Secretary shall establish such selection criteria for this demonstra-
tion as the Secretary deems appropriate after consultation with 
representatives of public housing agencies and energy efficiency 
organizations. 
(b) REPORT.—As soon as practicable after the expiration of 
the 1-year period beginning on the date of the enactment of this 
Act, the Secretary of Housing and Urban Development shall submit 
" 
to the Congress a report setting forth the findings and recommenda-
tions of the Secretary as a result of the demonstration under this 
section. The Secretary shall disseminate such report, to the extent 
practicable, to other public housing agencies. 
SEC. 524. STUDY OF PUBLIC HOUSING FUNDING SYSTEM. 
42 USC 1437f 
The Secretary of Housing and Urban Development shall conduct a °° ' 
study assessing one or more revised methods of providing sufficient 
Federal funds to public housing agencies for the operation, mainte-
nance and modernization of public housing. In analyzing such alter-
natives, the Secretary shall compare and contrast existing methods 
of funding in public housing with those used by the Department of 
Housing and Urban Development in housing assisted under section 
8 of the United States Housing Act of 1937. In preparing the study 
mandated by this section, the Secretary shall, in particular, review 
the results of the study entitled "Alternative Operating Subsidies 
Systems for the Public Housing Program", released by the Depart-
ment's Office of Policy, Development and Research in May 1982, and 
shall update such study as may be necessary. The Secretary shall Reports, 
submit a report to the Congress not later than 12 months after the 
104 STAT. 4216 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 u s e 1437f 
note. 
Reports. 
42 u s e 1437f 
note. 
Reports. 
42 u s e 1437aa 
note. 
date of the enactment of this Act detailing the findings of the study 
conducted under this section. 
SEC. 525. STUDY OF PROSPECTIVE PAYMENT SYSTEM FOR PUBLIC 
HOUSING. 
The Secretary of Housing and Urban Development shall carry out 
a study assessing one or more revised methods of providing Federal 
housing assistance through local public housing agencies (in this 
section referred to as "PHA's")- In analyzing such alternatives, the 
Secretary shall examine methods of prospective payment, including 
the conversion of PHA operating assistance, modernization, and 
other Federal housing assistance to a schedule of steady and predict-
able capitated Federal pajmients to PHA's on behalf of low income 
public housing tenants. The Secretary shall assess, within the 
capitated funding alternative, means of (1) providing for tenant 
participation in the release of such capitated payments to PHA's; (2) 
providing financial incentives for PHA overall performance and 
efficiency; (3) designating certain PHA's as distressed and eligible 
for special Federal assistance; (4) differential treatment of PHA's 
based on differences in local population demographics, rental hous-
ing markets, and other pertinent factors, and (5) calculating annual 
inflation-based increases in capitated Federal pa3rments. The report 
shall be submitted to the Congress not later than 12 months after 
the date of the enactment of this Act. 
SEC. 526. GAO 
STUDY 
OF 
ALTERNATIVES 
IN 
PUBLIC 
HOUSING 
DEVELOPMENT. 
The Comptroller Greneral of the United States shall conduct a 
study assessing alternative methods of developing public housing 
dwelling units, other than under the existing public housing devel-
opment program under the United States Housing Act of 1937. 
Under the study the Comptroller General shall— 
(1) analyze and evaluate different methods of financing and 
structuring a program to develop public housing and of coordi-
nating such progrgmi with local housing strategies; and 
(2) evaluate the effectiveness of developing public housing 
units by coordinating the low-income housing tax credit pro-
gram with the development of public housing. 
The Comptroller General shall submit a report to the Congress 
regarding the findings and conclusions of the study not later than 12 
months after the date of the enactment of this Act. 
SEC. 527. APPLICABILITY. 
In accordance with section 201(bX2) of the United States Housing 
Act of 1937 (42 U.S.C. 1437aa(bX2)), the provisions of this subtitle 
that modify the public housing program under title I of the United 
States Housing Act of 1937 shall also apply to public housing 
developed or operated pursuant to a contract between the Secretary 
of Housing and Urban Development and an Indian housing author-
ity, except that sections 502 and 510 shall not apply. 
Subtitle B—Low-Income Rental Assistance 
SEC. 541. DESIGNATION OF CERTIFICATE AND VOUCHER PROGRAMS. 
(a) CERTIFICATE PROGRAM.—Section 8(b) of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f[b)) is amended by striking "(bXD" 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4217 
and inserting "(b) RENTAL CERTIFICATES AND OTHER EXISTING HOUS-
ING PROGRAMS.—". 
(b) VOUCHER PROGRAM.—Section 8(o) of the United States Housing 
Act of 1937 (42 U.S.C 1437fl:o)) is amended by inserting "RENTAL 
VOUCHERS.—" after "(o)". 
SEC. 542. DRUG-RELATED RENT ADJUSTMENTS. 
Section 8(cX2XB) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(cX2XB)) is amended by adding at the end the following: 
"Where the Secretary determines that a project assisted under this 
section is located in a community where drug-related criminal 
activity is generally prevalent and the project's operating, mainte-
nance, and capital repair expenses have been substantially in-
creased primarily as a result of the prevalence of such drug-related 
activity, the Secretary may (at the discretion of the Secretary and 
subject to the availability of appropriations for contract amend-
ments for this purpose), on a project by project basis, provide 
adjustments to the maximum monthly rents, to a level no greater 
than 120 percent of the project rents, to cover the costs of mainte-
nance, security, capital repairs, and reserves required for the owner 
to carry out a strategy acceptable to the Secretary for addressing the 
problem of drug-related criminal activity. Any rent comparability 
standard required under this paragraph may be waived by the 
Secretary to so implement the preceding sentence.". 
SEC. 
5
4
3
. 
TENANT 
RENT 
CONTRIBUTIONS 
UNDER 
TENANT-BASED 
CERTIFI-
CATE 
PROGRAM. 
(a) EXCEPTION TO GENERAL RULE.—Section 8(cX3) of the United 
States Housing Act of 1937 is amended— 
(1) by inserting "(A)" after the paragraph designation; and 
(2) by adding at the end the following new subparagraph: 
"(BXi) A family receiving tenant-based rental assistance under 
subsection (bXD may pay a higher percentage of income than that 
specified under section 3(a) of this Act if^ 
"(I) the family notifies the local public housing agency of its 
interest in a unit renting for an amount which exceeds the 
permissible maximum monthly rent established for the market 
area under paragraph (1), and 
"(II) such agency determines that the rent for the unit and 
the rental pa3anents of the family are reasonable, Eifter taking 
into account other family expenses (including child care, un-
reimbursed medical expenses, and other appropriate family 
expenses), 
"(ii) A public housing agency shall not approve such excess rentals Reports. 
for more than 10 percent of its annual allocation of incremental 
rental assistance under subsection (bXD. A public housing agency 
that approves such excess rentals for more than 5 percent of its 
annual allocation shall submit a report to the Secretary not later 
than 30 days following the end of the fiscal year. The report shall be 
submitted in such form and in accordance with such procedures as 
the Secretary shall establish and shall describe the public housing 
agency's reasons for making the exceptions, including any available 
evidence that the exceptions were made necessary by problems with 
the fair market rent established for the area. The Secretary shall 
ensure that each report submitted in accordance with this clause is 
readily available for public inspection for a period of not less than 3 
104 STAT. 4218 
PUBLIC LAW 101-625—NOV. 28, 1990 
years, beginning not less than 30 days following the date on which 
the report is submitted to the Secretary. 
Reports. 
"(iii) The Secretary shall, not later than 3 months following the 
end of each fiscal year, submit a report to Congress that identifies 
the public housing agencies that have submitted reports for such 
fiscal year under clause (ii), summarizes and assesses such reports, 
and includes recommendations for such legislative or administrative 
actions that the Secretary deems appropriate to correct problems 
identified in such reports.". 
(b) HOUSING STRATEGY.—The second sentence of section 8(c)(1) of 
the United States Housing Act of 1937 (42 U.S.C. 1437fl[cXl)) is 
amended by— 
(1) inserting "(A)" after "fair market rental" the second place 
it appears; and 
(2) by striking "a local housing assistance plan" and all that 
follows through the end of the sentence and inserting the 
following: "a housing strategy as defined in section 105 of the 
Cranston-Gonzalez National Affordable Housing Act, or (B) by 
such higher amount as may be requested by a tenant and 
approved by the public housing agency in accordance with 
paragraph (3XB).". 
SEC. 544. OPT-OUTS. 
Section 8(c)(9) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(c)(9)) is amended— 
(1) by inserting at the end of the first sentence the following 
new sentence: "The owner's notice shall include a statement 
that the owner and the Secretary may agree to a renewal of the 
contract, thus avoiding the termination."; and 
(2) by inserting before the final sentence the following new 
sentence: "Within 30 days of the Secretary's finding, the owner 
shall provide written notice to each tenant of the Secretary's 
decision.". 
SEC. 545. PREFERENCE RULES. 
(a) CERTIFICATE PROGRAM.—Section 8(dXl)(A) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f[dXl)(A)) is amended to read as 
follows: 
"(A) the selection of tenants for such units shall be the 
function of the owner, subject to the provisions of the annual 
contributions contract between the Secretary and the agency, 
except that the tenant selection criteria used by the owner 
shall— 
"(i) for not less than (I) 70 percent of the families who 
initially receive assistance in any 1-year period in the case 
of assistance attached to a structure and (II) 90 percent of 
such families in the case of assistance not attached to a 
structure, give preference to fsmiilies that occupy sub-
standard housing (including families that are homeless or 
living in a shelter for homeless families), are pajdng more 
than 50 percent of family income for rent, or are involun-
tarily displaced at the time they are seeking assistsince 
under this section; except that any family otherwise eligible 
for assistance under this section may not be denied pref-
erence for assistance not attached to a structure (or delayed 
or otherwise adversely affected in the provision of such 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4219 
assistance) solely because the family resides in public 
housing; 
"(ii) for any remaining assistance in any 1-year period, 
give preference to families who qualify under a system of 
local preferences established by the public housing agency 
in writing and after public hearing to respond to local 
housing needs and priorities, which may include (I) Eissist-
ing very low-income families who either reside in transi-
tional housing assisted under title IV of the Stewart B. 
McKinney Homeless Assistance Act, or participate in a 
program designed to provide public assistance recipients 
with greater access to emplojonent and 
educational 
opportunities; (II) assisting families in accordance with 
subsection (uX2); (III) assisting families identified by local 
public agencies involved in providing for the welfare of 
children as having a lack of adequate housing that is a 
primary factor in the imminent placement of a child in 
foster care, or in preventing the discharge of a child from 
foster care and reunification with his or her family; (IV) 
assisting youth, upon discharge from foster care, in cases 
in which return to the family or extended family or adop-
tion is not available; and (V) achieving other objectives of 
national housing policy as affirmed by Congress; and 
"(iii) prohibit any individual or family evicted from hous-
ing assisted under the Act by reason of drug-related crimi-
nsQ activity from having a preference under any provision 
of this subparagraph for 3 years unless the evicted tenant 
successfully completes a rehabilitation program approved 
by the agency, except that the agency may waive the 
application of this clause under staiidards established by 
the Secretary (which shall include waiver for any member 
of a family of an individual prohibited from tenancy under 
this clause who the agency determines clearly did not 
participate in and had no knowledge of such criminal activ-
ity or when circumstances leading to eviction no longer 
exist);"; and 
(2) VOUCHER PROGRAM.—Section 8(oX3) of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f(o)(3)), as amended by the preceding 
provisions of this Act, is further amended— 
(A) by inserting "(A)" after "(3)"; 
(B) by striking "(A)" and inserting "(i)"; 
(C) by striking "(B)" and inserting "(ii)"; 
(D) by striking "(C)" and inserting "(iii)"; 
(E) by striking "(D)" and inserting "(iv)"; 
(F) by paragraphing and inserting "(B)" after the first 
sentence; 
(G) by inserting "(including families that are homeless or 
living in a shelter for homeless families)" after "sub-
standard housing"; and 
(H) by adding at the end the following new sentences: 
"The public housing agency shall in implementing the 
preceding sentence establish a system of preferences in 
writing and after public hearing to respond to local housing 
needs and priorities which may include (i) assisting very 
low-income families who either reside in transitional hous-
ing assisted under title IV of the Stewart B. McKinney 
Homeless Assistance Act, or participate in a program de-
-194 O - 91 - 29 : QL 3 Part 5 
104 STAT. 4220 
PUBLIC LAW 101-625—NOV. 28, 1990 
signed to provide public assistance recipients with greater 
access to emplo3rment and educational opportunities, (ii) 
assisting families in accordance with subsection (uX2); (iii) 
assisting families identified by local public agencies in-
volved in providing for the welfare of children as having a 
lack of adequate housing that is a primary factor in the 
imminent placement of a child in foster care, or in prevent-
ing the discharge of a child from foster care and reunifica-
tion and his or her family; (iv) assisting youth, upon 
discharge from foster care, in cases in which return to the 
family or extended family or adoption is not available; and 
(v) achieving other objectives of national housing policy as 
affirmed by Congress. Any individual or family evicted 
from housing assisted under the Act by reason of drug-
related criminal activity (as defined in subsection (f)(5)) 
shall not be eligible for a preference under any provision of 
this subparagraph for 3 years unless the evicted tenant 
successfully completes a rehabilitation program approved 
by the Secretary (which shall include waiver for any 
member of a family of an individual prohibited from ten-
ancy under this clause who the agency determines clearly 
did not participate in and had no knowledge of such crimi-
nal activity or when circumstances leading to eviction no 
longer exist).". 
42 use I437f 
(c) SECTION 8 NEW CONSTRUCTION.—With respect to housing con-
note, 
structed or substantially rehabilitated pursuant to assistance pro-
vided under section 8(bX2) of the United States Housing Act of 1937, 
as such section existed before October 1,1983, and projects financed 
under section 202 of the Housing Act of 1959, notwithstanding any 
tenant selection criteria under a contract between the Secretary of 
Housing and Urban Development and an owner of such housing 
pursuant to the first sentence of such section— 
(1) for not less than 70 percent of units that become avgiilable 
in the housing, the tenant selection criteria for such housing 
shall give preference to families which occupy substandard 
housing (including families that are homeless or living in a 
shelter for homeless families), are paying more than 50 percent 
of famUy income for rent, or are involuntarily displaced at the 
time they are seeking assistance under such section; and 
(2) the system of local preferences established under section 
8((iXlXAXii) by the public housing agency for the jurisdiction 
within which the housing is located the tenant shall apply to 
any remaining units that become available in the housing, to 
the extent that such preferences are applicable with respect to 
any tenant eligibility limitations for the housing. 
SEC. 546. TENANT PROTECTIONS. 
Section 8(dXlXB) of the United States Housing Act (42 U.S.C. 
1437f[dXlXB)) is amended— 
(1) by striking "and" at the end of clause (i); £ind 
(2) by adding at the end the following new clauses: 
"(iii) provide that any criminal activity that threatens the 
health, safety, or right to peaceful enjo)mient of the premises by 
other tenants or any drug-related criminal activity on or near 
such premises, engaged in by a public housing tenant, any 
member of the tenant's household, or any guest or other person 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4221 
under the tenant's control, shall be cause for termination of 
tenancy; and 
"(iv) any termination of tenancy shall be preceded by the 
owner's provision of written notice to the tenant specif5dng the 
grounds for such action.". 
SEC. 547. REVISIONS TO PROJECT-BASED CERTIFICATE PROGRAM. 
(a) TENANT SELECTION.—Section 8(dX2) of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f[dX2)) is amended by adding at the 
end the following new subparagraph: 
"(D) Where a contract for assistance pa3rments is attached to a 
structure, the owner shall adopt written tenant selection procedures 
that are satisfactory to the Secretary as (i) consistent with the 
purpose of improving housing opportunities for very low-income 
families; and (ii) reasonably related to program eligibility and an 
applicant's ability to perform the obligations of the lease. An owner 
shall promptly notify in writing any rejected applicant of the 
grounds for any rejection.". 
(b) PROJECT-BASING OF CERTIFICATES.—Section 8(dX2) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(dX2)), as amended by the 
preceding provisions of this Act, is further simended by adding at the 
end the following new subparagraph: 
"(E) The Secretary shall annually survey public housing agencies Reports. 
to determine which public housing agencies have, in providing 
assistance in such year, reached the 15 percent limitations con-
tained in subparagraphs (A) and (B), and shall report to the Con-
gress on the results of such survey.". 
(c) TERM OF ASSISTANCE.—Section 8(dX2XC) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f[dX2XC)) is amended to read as 
follows: 
"(C) In the case of a contract for assistance pajonents that is 
attached to a structure under this paragraph, a public housing 
agency shall enter into a contract with an owner, contingent upon 
the future availability of appropriations for the purpose of renewing 
expiring contracts for assistance pajonents as provided in appropria-
tions Acts, to extend the term of the underl3dng contract for assist-
ance pajonents for such period or periods as the Secretary 
determines to be appropriate to achieve long-term siffordability of 
the housing. The contract shall obligate the owner to have such 
extensions of the underlying contract for assistance pa3rments 
accepted by the owner and the owner's successors in interest.". 
SEC. 548. SECTION 8 ASSISTANCE FOR PHA-OWNED UNITS. 
(a) DEFINITION OF OWNER.—Section 8(fXl) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f[fKl)) is amended by striking 
"newly constructed or substantially rehabilitated dwelling units as 
described in this section" and inserting "dwelling units". 
(b) PROGRAM REQUIREMENTS.—Section 8(a) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f[a)) is amended by adding at the 
end the following: "A public housing agency may contract to make 
assistsmce payments to itself (or any agency or instrumentality 
thereof) as the owner of dwelling units if such agency is subject to 
the same program requirements as are applied to other owners. In 
such cases, the Secretary may establish initial rents within ap-
plicable limits.". 
104 STAT. 4222 
PUBLIC LAW 101-625—NOV. 28, 1990 
SEC. 549. DEFINITIONS OF PARTICIPATING JURISDICTION AND DRUG-RE-
LATED CRIMINAL ACTIVITY. 
Section 8(f) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(f)) is amended— 
(1) by striking "and" at the end of paragraph (2); 
(2) by striking the period at the end of paragraph (3) and 
inserting a semicolon; and 
(3) by adding at the end the following new paragraphs: 
"(4) the term 'participating jurisdiction' means a State or unit 
of general local government designated by the Secretary to be a 
participating jurisdiction under title II of the Cranston-Gonzalez 
National Affordable Housing Act; and 
"(5) the term 'drug-related criminal activity' means the illegal 
manufacture, sale, distribution, use, or possession with intent to 
manufacture, sell, distribute, or use, of a controlled substance 
(as defined in section 102 of the Controlled Substances Act (21 
U.S.C. 802)).". 
SEC. 550. REVISIONS TO VOUCHER PROGRAM. 
(a) REASONABLENESS OF RENTS.—Section 8(o) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f[o)), as amended by the preced-
ing provisions of this Act, is further amended by adding at the end 
the following new paragraph: 
"(lOXA) The rent for units assisted under this subsection shall be 
reasonable in comparison with rents charged for comparable units 
in the private unassisted market or assisted under section (b). A 
public housing agency shall, at the request of a family assisted 
under this subsection, assist such family in negotiating a reasonable 
rent with an owner. A public housing agency shall review all rents 
for units under consideration by families assisted under this subsec-
tion (and all rent increases for units under lease by families Eissisted 
under this subsection) to determine whether the rent (or rent in-
crease) requested by an owner is reasonable. If a public housing 
agency determines that the rent (or rent increase) for a unit is not 
reasonable, the agency may disapprove a lease for such unit.". 
42 use I437f 
(b) DOCUMENTATION OF EXCESSIVE RENT BURDENS.— 
note- 
(1) DATA.—The Secretary of Housing and Urban Development 
shall collect and maintain, in an automated system, data 
describing the characteristics of families assisted under the 
certificate and voucher programs established under section 8 of 
the United States Housing Act of 1937, which data shall include 
the share of family income paid toward rent, 
(2) REPORT.—Not less than annually, the Secretary shall 
submit a report to the (Dongress setting forth, for each of the 
certificate program and the voucher program, the percentage of 
families participating in the program who are paying for rent 
more than the amount determineid under section 3(aXl) of such 
Act. The report shall set forth data in appropriate categories, 
such as various areas of the country, types and sizes of public 
housing agencies, t3rpes of families, and types or markets. The 
data shall identify the jurisdictions in which more than 10 
percent of the families assisted under section 8 of such Act pay 
for rent more than the amount determined under section 3(aXl) 
of such Act and the report shall include an examination of 
whether the fair market rent for such areas is appropriate. The 
report shall also include any recommendations of the Secretary 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4223 
for legislative and administrative actions appropriate as a 
result of analysis of the data. 
(3) AvAiLABiuTY OF DATA.—The Secretary shall make available to 
each public housing agency administering assistance under the 
certificate or voucher program any data maintained under this 
subsection that relates to the public housing agency. 
(c) ELIGIBIUTY FOR USE WITH MOBILE HOMES.—Section 8(o) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f[o)) is amended by 
adding at the end the following new paragraph: 
"(IIXA) The Secretary may enter into contracts to make assist-
ance payments under this paragraph to assist low-income families 
by making rental assistance payments on behalf of any such family 
which utilizes a manufactured home as its principal place of resi-
dence. Such payments may be made with respect to the rental of the 
real property on which there is located a manufactured home which 
is owned by any such family. In carrjdng out this paragraph the 
Secretary shall enter into annual contributions contracts with 
public housing agencies pursuant to which such sigencies may enter 
into contracts to make such assistance payments to the owners of 
such real property. 
"(BXi) A contract entered into pursuant to this subparagraph shall 
establish the rent (including maintenance and management 
charges) for the space on which a manufactured home is located and 
with respect to which assistance payments are to be made. The 
public housing agency shall establish a payment standard based on 
the fair market rental established by the Secretary periodically (but 
not less than annually) with respect to the market area for the 
rental of real property suitable for occupancy by families assisted 
under this subparagraph. 
"(ii) The amount of any monthly assistance payment with respect 
to any family which rente real property which is assisted under this 
subparagraph and on which is located a manufactured home which 
is owned by such family shall be the amount by which 30 percent of 
the family s monthly adjusted income is exceeded by the sum of^ 
"(I) the monthly pajonent made by such family to amortize 
the cost of purchasing the manufactured home; 
"(II) the monthly utility pajrmente made by such family, 
subject to reasonable limitations prescribed by the Secretary; 
and 
"(III) the payment standard with respect to the real property 
which is rented by such family for the purpose of locating ite 
manufactured home; 
except that in no case may such assistance exceed the amount by 
which the rent for the property exceeds 10 percent of the family's 
monthly income. 
"(C) The provisions of paragraph (6)(A) shall apply to the adjust-
mente of maximum monthly rente under this paragraph. 
"(D) The Secretary may carry out this paragraph without regard 
to whether the manufactured home park is existing, substantially 
rehabilitated, or newly constructed. 
"(E) In the case of any substantially rehabilitated or newly con-
structed manufactured home park containing spaces with respect to 
which assistance is made under this paragraph, the principal 
amount of the mortgage attributable to the rental spaces within the 
park may not exceed an amount established by the Secretary which 
is equal to or less than the limitation for manufactured home parks 
described in section 207(cX3) of the National Housing Act, and the 
Public 
information. 
Government 
contracts. 
104 STAT. 4224 
PUBLIC LAW 101-625—NOV. 28, 1990 
Secretary may increase such limitation in high cost areas in the 
manner described in such section. 
"(F) The Secretary may prescribe other terms and conditions 
which are necessary for the purpose of carrjdng out the provisions of 
this paragraph and which are consistent with the purposes of this 
paragraph.". 
SEC. 551. PORTABILITY OF CERTIFICATES AND VOUCHERS. 
Section 8(rXl) of the United States Housing Act of 1937 (42 U.S.C. 
1437f[rXl) is amended by striking "the same, or a contiguous," and 
inserting "the same State, or the same or a contiguous". 
SEC. 552. RENEWAL OF EXPIRING CONTRACTS. 
(a) IN GENERAL.—Section 8 of the United States Housing Act of 
1937 (42 U.S.C. 1437f) is amended by adding at the end the following 
new subsection: 
Federal 
"(w) RENEWAL OF EXPIRING CONTRACTS.—Not later than 30 days 
Register, 
after the beginning of each fiscal year, the Secretary shall publish in 
publication. 
^j^g Federal Register a plan for reducing, to the extent feasible, year-
to-year fluctuations in the levels of budget authority that will be 
required over the succeeding 5-year period to renew expiring rental 
assistance contracts entered into under this section since the enact-
ment of the Housing and Community Development Act of 1974. To 
the extent necessary to carry out such plan and to the extent 
approved in appropriations Acts, the Secretary is authorized to 
enter into annual contributions contracts with terms of less than 60 
months.". 
(b) SHORT-TERM CONTRACTS.—Section 8(dX2XA) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(dX2XA)) is amended by 
inserting after the first sentence the following: "The Secretary shall 
permit public housing agencies to enter into contracts for assistance 
payments of less than 12 months duration in order to avoid disrup-
tion in assistance to eligible families if the annual contributions 
contract is within 1 year of its expiration date,". 
SEC. 553. ASSISTANCE TO PROMOTE FAMILY UNIFICATION. 
Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f) is amended by adding at the end the following new subsection: 
"(x) FAMILY UNIFICATION.— 
"(1) INCREASE IN BUDGET AUTHORITY.—The budget authority 
available under section 5(c) for assistance under section 8(b) is 
authorized to be increased by $35,000,000 on or after October 1, 
1990, by $35,000,000 on or after October 1,1991. 
"(2) tJsE OF FUNDS.—The amounts made available under this 
subsection shsdl be used only in connection with housing certifi-
cate assistance under section 8 on behalf of any family (A) who 
is otherwise eligible for such assistance, and (B) who the public 
child welfare agency for the jurisdiction has certified is a family 
for whom the lack of adequate housing is a primary factor in 
the imminent placement of the family's child or children in out-
of-home care or the delayed discharge of a child or children to 
the family from out-of-home care. 
"(3) ALLOCATION.—The amounts made available under this 
subsection shall be allocated by the Secretary through a 
national competition among applicants based on demonstrated 
need for the assistance under this subsection. To be considered 
for assistance, an applicant shall submit to the Secretary a 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4225 
written proposal containing a report from the public child 
welfare agency serving the jurisdiction of the applicant that 
describes how a lack of adequate housing in the jurisdiction is 
resulting in the initial or prolonged separation of children from 
their families, and how the applicant will coordinate with the 
public child welfare agency to identify eligible families and 
provide the families with assistance under this subsection. 
"(4) DEFINITIONS.—For purposes of this subsection: 
"(A) APPUCANT.—The term 'applicant' means a public 
housing agency or any other agency responsible for admin-
istering assistance under section 8. 
"(B) PuBUC CHILD WELFARE AGENCY.—The term 'public 
child welfare agency' means the public agency responsible 
under applicable State law for determining that a child is 
at imminent risk of placement in out-of-home care or that a 
child in out-of-home care under the supervision of the 
public agency may be returned to his or her family.". 
SEC. 554. FAMILY SELF-SUFFICIENCY. 
(a) IN GENERAL.—Title I of the United States Housing Act of 1937 
(42 U.S.C. 1437 et seq.), as amended by the preceding provisions of 
this Act, is further amended by adding at the end the following new 
section: 
"SEC. 23. FAMILY SELF-SUFFICIENCY PROGRAM. 
42 USC 1437u. 
"(a) PURPOSE.—The purpose of the Family Self-Sufficiency pro-
gram established under this section is to promote the development 
of local strategies to coordinate use of public housing and assistance 
under the certificate and voucher programs under section 8 with 
public and private resources, to enable eligible families to achieve 
economic independence and self-sufficiency. 
"(b) ESTABLISHMENT OF PROGRAM.— 
"(1) REQUIRED PROGRAMS.—Except as provided in paragraph 
(2), the Secretary shall carry out a program under which each 
public housing agency that administers assistance under subsec-
tion (b) or (o) of section 8 or makes available new public housing 
dwelling units— 
"(A) may, during fiscEil years 1991 and 1992, carry out a 
local Family Self-Sufficiency program under this section; 
and 
"(B) effective on October 1, 1992, the Secretary shall Effective date. 
require each such agency to carry out a local Family Self-
Sufficiency program under this section. 
Each local program shall, subject to availability of supportive 
services, include an action plan under subsection (g) and shall 
provide comprehensive supportive services for families electing 
to participate in the program. In carrying out the self-suffi-
ciency program under this section, the Secretary shall consult 
with the heads of other appropriate Federal agencies and pro-
vide for cooperative actions and funding agreements with such 
agencies. Each public housing agency administering an ap-
proved local program may employ a service coordinator to 
administer the local program. 
"(2) EXCEPTION.—The Secretary shall not require a public 
housing agency to carry out a local program under subsection 
(a) if the public housing agency provides certification (as such 
term is defined under title I of the Cranston-Gonzalez Nationsd 
104 STAT. 4226 
PUBLIC LAW 101-625—NOV. 28, 1990 
Affordable Housing Act) to the Secretary, that the establish-
ment and operation of the program is not feasible because of 
local circumstances, which may include— 
"(A) lack of supportive services funding; 
"(B) lack of funding for reasonable administrative costs; 
"(C) lack of cooperation by other units of State or local 
government; or 
"(D) any other circumstances that the Secretary may 
consider appropriate. 
"(3) SCOPE.—Each public housing agency required to carry out 
a local program under this section shall make the following 
housing assistance available under the program in each fiscal 
year: 
"(A) Certificate and voucher assistance under section 8(b) 
and (o), in an amount equivalent to the increase for such 
year in the number of families so assisted by the agency (as 
compared to the preceding year). 
"(B) Public housing dwelling units, in the number equal 
to the increase for such year in units made available by the 
agency (as compared to the preceding year). 
Each such public housing sigency shall continue to operate a 
local program for the number of families determined under this 
paragraph subject only to the availability under appropriations 
Acts of sufficient amounts for assistance. 
"(c) CONTRACT OF PARTICIPATION.— 
"(1) IN GENERAL.—Each public housing agency carrying out a 
local program under this section shall enter into a contract with 
each leaseholder receiving assistance under the certificate and 
voucher programs of the public housing agency under section 8 
or residing in public housing administered by the agency, that 
elects to participate in the self-sufficiency program under this 
section. The contract shall set forth the provisions of the local 
program and shall specify the resources and supportive services 
to be made available to the participating family pursuant to 
paragraph (2) and the responsibilities of the participating 
family. The contract shall provide that the public housing 
agency may terminate or withhold assistance under section 8 
and services under paragraph (2) of this section if the family 
fails to comply with the requirements under the contract. 
"(2) SUPPORTIVE SERVICES.—A local program under this sec-
tion shall provide appropriate supportive services under this 
paragraph to each participating family entering into a contract 
of participation under paragraph (1) to each participating 
family. The supportive services shall be provided during the 
period the family is receiving assistance under section 8 or 
residing in public housing, and may include— 
"(A) child care; 
"(B) transportation necessary to receive services; 
"(C) remedial education; 
"(D) education for completion of high school; 
"(E) job training and preparation; 
"(F) substance abuse treatment and counseling; 
"(G) training in homemaking and parenting skills; 
"(H) training in money management; 
"(I) training in household management; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4227 
"(J) any other services and resources appropriate to assist 
eligible families to achieve economic independence and self-
sufficiency. 
"(3) TERM AND EXTENSION.—Each family participating in a 
local program shall be required to ful^l its obligations under 
the contract of participation not later than 5 years after enter-
ing into the contract. The public housing agency shall extend 
the term of the contract for any family that requests an exten-
sion, upon a finding of the agency of good cause. 
"(4) EMPLOYMENT AND COUNSELING.—The contract of partici-
pation shall require the head of the participating family to seek 
suitable employment during the term of the contract. The 
public housing agency may, during such period, provide counsel-
ing for the family with respect to affordable rental and 
homeownership opportunities in the private housing market 
and money management counseling. 
"(d) MAXIMUM RENTS AND ESCROW SAVINGS ACCOUNTS.— 
"(1) MAXIMUM RENTS.—During the term of the contract of 
participation, the amount of rent paid by any participating 
family whose monthly adjusted income does not exceed 50 
percent of the area median income for occupancy in the public 
housing unit or dwelling unit assisted under section 8 may not 
be increased on the basis of any increase in the earned income 
of the family, unless the increase results in an income exceeding 
50 percent of the area median income. The Secretory shall 
provide for increased rents for participating families whose 
incomes are between 50 and 80 percent of the area median 
income, so that any family whose income increases to 80 percent 
or more of the area median income pays 30 percent of the 
family's monthly adjusted income for rent. Upon completion of 
the contract of participation, if the participating family contin-
ues to qualify for and reside in a dwelling unit in public housing 
or housing assisted under section 8, the rent charged the partici-
pating family shall be increased (if applicable) to 30 percent of 
the monthly adjusted income of the family. 
"(2) ESCROW SAVINGS ACCOUNTS.—For each participating 
family whose monthly adjusted income is less than 50 percent of 
the area median income, the difference between 30 percent of 
the adjusted income of the participating family and the amount 
of rent paid by a participating family shall be placed in an 
interest-bearing escrow account established by the public hous-
ing agency on behalf of the participating family. For families 
with incomes between 50 and 80 percent of the area median 
income, the Secretory shall provide for escrow of the difference 
between 30 percent of the family income and the simount paid 
by the family for rent as determined by the Secretory under 
paragraph (1). The Secretory shall not escrow any amounts for 
any family whose adjusted income exceeds 80 percent of the 
area median income. Amounts in the escrow account may be 
withdrawn by the participating family only sifter the family is 
no longer a recipient of any Federal, State, or other public 
assistance for housing. 
"(e) EFFECT OF INCREASES IN FAMILY INCOME.—Any increase in the 
earned income of a family during the participation of the family in a 
local program estoblished under this section may not be considered 
as income or a resource for purposes of eligibility of the family for 
other benefits, or amount of benefits payable to the family, under 
104 STAT. 4228 
PUBLIC LAW 101-625—NOV. 28, 1990 
any program administered by the Secretary, unless the income of 
the family equals or exceeds oO percent of the median income of the 
area (as determined by the Secretary with adjustments for smaller 
and larger families). 
"(f) PROGRAM COORDINATING COMMITTEE.— 
"(1) FuNcrnoNS.—Each public housing agency shall, in con-
sultation with the chief executive officer of the unit of general 
local government, develop an action plan under subsection (g), 
carry out activities under the local program, and secure 
commitments of public and private resources through a pro-
gram coordinating committee established by the public housing 
agency under this subsection. 
"(2) MEMBERSHIP.—The program coordinating committee may 
consist of representatives of the public housing agency, the unit 
of genersd local government, the local agencies (if any) respon-
sible for carrying out programs under the Job Training Partner-
ship Act and the Job Opportunities and Basic Skills Training 
Program under part F of title IV of the Social Security Act, and 
other organizations, such as other State and local welfare and 
emplojnment agencies, public and private education or training 
institutions, nonprofit service providers, and private businesses. 
The public housing agency may, in consultation with the chief 
executive officer of the unit of general local government, utilize 
an existing entity as the program coordinating committee if it 
meets the requirements of this subsection. 
"(g) ACTION PLAN.— 
"(1) REQUIRED SUBMISSION.—The Secretary shall require each 
public housing agency participating in the self-sufficiency pro-
gram under this section to submit to the Secretary, for approval 
by the Secretary, an action plan under this subsection in such 
form and in accordance with such procedures as the Secretary 
shall require. 
"(2) DEVELOPMENT OF PLAN.—In developing the plan, the 
public housing agency shall consult with the chief executive 
officer of the applicable unit of general local government, the 
program coordinating committee established under subsection 
(f), representatives of residents of the public housing, any local 
agencies responsible for programs under the Job Training Part-
nership Act and the Job Opportunities and Basic Skills Train-
ing Program under part F of title IV of the Social Security Act, 
other appropriate organizations (such as other State and local 
welfare and employment or training institutions, child care 
providers, nonprofit service providers, and private businesses), 
and any other public and private service providers affected by 
the operation of the local program. 
"(3) CONTENTS OF PLAN.—The Secretary shall require that the 
action plan contain at a minimum— 
(A) a description of the size, characteristics, and needs of 
the population of the families expected to participate in the 
local self-sufficiency program; 
"(B) a description of the number of eligible participating 
families who can reasonably be expected to receive support-
ive services under the program, based on available and 
anticipated Federal, State, local, and private resources; 
"(C) a description of the services and activities under 
subsection (c)(2) to be provided to families receiving assist-
ance under this section through the section 8 and public 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4229 
housing programs, which shall be provided by both public 
and private resources; 
"(D) a description of how the local program will deliver 
services and activities according to the needs of the families 
participating in the program; 
"(E) a description of both the public and private resources 
that are expected to be made available to provide the 
activities and services under the local program; 
"(F) a timetable for implementation of the locsd program; 
and 
"(G) assurances satisfactory to the Secretary that devel-
opment of the services and activities under the local pro-
gram has been coordinated with the Job Opportunities and 
Basic Skills Training Program under part F of title IV of 
the Social Security Act and program under the Job Train-
ing Partnership Act and any other relevant employment, 
child care, transportation, training, and education pro-
grams in the applicable area, and that implementation will 
continue to be coordinated, in order to avoid duplication of 
services and activities. 
"(h) ALLOWABLE PUBLIC HOUSING AGENCY ADMINISTRATIVE FEES 
AND COSTS.— 
"(1) SECTION 8 FEES.—The Secretary shall establish a fee 
under section 8(q) for the costs incurred in administering the 
provision of certificate and voucher assistance under section 8 
through the self-sufficiency program under this section. The fee 
shall be the fee in effect under such section on June 1, 1990, 
except that for purposes of the fee under this paragraph the 
applicable dollar amount for preliminary expenses under sec-
tion 8(qX2XAXi) shall, subject to approval in appropriations 
Acts, be $300. Upon the submission by the (Domptroller General 
of the United States of the report required under section 554(b) 
of the Cranston-Gonzalez National Affordable Housing Act, the 
Secretary shall revise the fee under this paragraph, taking into 
consideration the report of the Comptroller General. 
"(2) PERFORMANCE FUNDING SYSTEM.—Notwithstanding any 
provision of section 9, the Secretary shall provide for inclusion 
under the performance funding system under section 9 of 
reasonable and eligible administrative costs (including the costs 
of emplojdng a full-time service coordinator) incurred by public 
housing agencies carr3dng out local progrEuns under this section. 
The Secretary shall include an estimate of the administrative 
costs likely to be incurred by participating public housing agen-
cies in the annual budget request for the Department of Hous-
ing and Urban Development for public housing operating 
assistance under section 9 and shall include a request for such 
amounts in the budget request. Of any amounts appropriated 
under section 9(c) for each of fiscal years 1991 and 1992, 
$25,000,000 is authorized to be used for costs under this 
paragraph, 
"(i) PuBuc HOUSING AGENCY INCENTIVE AWARD ALLOCATION.— 
"(1) IN GENERAL.—The Secretary shall carry out a competition 
for budget authority for certificate and voucher assistance 
under section 8 and public housing development assistance 
under section 5(aX2) reserved under paragraph (4) and shall 
allocate such budget authority to public housing agencies pursu-
ant to the competition. 
104 STAT. 4230 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(2) CRITERIA.—The competition shall be based on successful 
and outstanding implementation by public housing agencies of a 
Federal 
local self-sufficiency program under this section. The Secretary 
Register, 
shall establish perfomance criteria for public housing agencies 
publication. 
carrying out such local programs and the Secretary shall cause 
such criteria to be published in the Federal Register. 
"(3) USE.—Each public housing agency that receives an alloca-
tion of budget authority under this subsection shall use such 
authority to provide assistance under the local self-sufficiency 
program established by the public housing agency under this 
section. 
"(4) RESERVATION OF BUDGET AUTHORITY.—Notwithstanding 
section 213(d) of the Housing and Community Development Act 
of 1974, the Secretary shall reserve for allocation under this 
subsection not less than 10 percent of the portion of budget 
authority appropriated in each of fiscal years 1991 and 1992 for 
section 8 that is available for purposes of providing assistance 
under the existing housing certificate and housing voucher 
programs for families not currently receiving assistance, and 
not less than 10 percent of the public housing development 
assistance available in such fiscal years for the purpose under 
section 5(aX2) (excluding amounts for major reconstruction of 
obsolete projects). 
"(j) ON-SITE FACILITIES.—Each public housing agency carrying out 
a local program may, subject to the approval of the Secretary, make 
available and utilize common areas or unoccupied public housing 
units in public housing projects administered by the agency for the 
provision of supportive services under the local program. The use of 
the facilities of a public housing agency under this subsection shall 
not affect the amount of assistance provided to the agency under 
section 9. 
"(k) FLEXIBIUTY.—In establishing and carrying out the self-suffi-
ciency program under this section, the Secretary shall allow public 
housing agencies, units of general local government, and other 
organizations discretion and flexibility, to the extent practicable, in 
developing and carrying out local programs. 
"(1) REPORTS.— 
"(1) To SECRETARY.—Each public housing sigency that carries 
out a local self-sufficiency program approved by the Secretary 
under this section shall submit to the Secretary, not less than 
annually a report regarding the program. The report shall 
include— 
"(A) a description of the activities carried out under the 
program; 
"(B) a description of the effectiveness of the program in 
assisting families to achieve economic independence and 
self-sufficiency; 
"(C) a description of the effectiveness of the program in 
coordinating resources of communities to assist families to 
achieve economic independence and self-sufficiency; and 
"(D) any recommendations of the public housing agency 
or the appropriate local program coordinating committee 
for legislative or administrative action that would improve 
the self-sufficiency program carried out by the Secretary 
and ensure the effectiveness of the program. 
"(2) HUD ANNUAL REPORT.—The Secretary shall submit to the 
Congress annually, as a part of the report of the Secretary 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4231 
under section 8 of the Department of Housing and Urban 
Development Act, a report summarizing the 
information 
submitted by public housing agencies under paragraph (1). The 
report under this paragraph shall also include any rec-
ommendations of the Secretary for improving the effectiveness 
of the self-sufficiency program under this section. 
"(m) GAO REPORT.— 
"(1) IN GENERAL.—The Comptroller General of the United 
States shall submit to the Congress reports under this subsec-
tion evaluating and describing the Family Self-Sufficiency pro-
gram carried out by the Secretary under this section. 
"(2) TIMING.—The Comptroller General shall submit the fol-
lowing reports under this subsection: 
"(A) An interim report, not later than the expiration of 
the 2-year period beginning on the date of the enactment of 
the Cranston-Gonzalez National Affordable Housing Act. 
"(B) A final report, not later than the expiration of 
the 5-year period beginning on the date of the enactment of 
the Cranston-Gonzalez National Affordable Housing Act. 
"(n) DEFINITIONS.—As used in this section: 
"(1) The term 'contract of participation' means a contract 
under subsection (c) entered into by a public housing agency 
carrying out a local program under this section and a participat-
ing family. 
"(2) The term 'earned income' means income from wages, tips, 
salaries, and other employee compensation, and any earnings 
from self-emplojonent. The term does not include any pension 
or annuity, transfer payments, or any cash or in-kind benefits. 
"(3) The term 'local program' means a program for providing 
supportive services to participating families carried out by a 
public housing agency within the jurisdiction of the public 
housing agency. 
"(4) The term 'participating family' means a family that 
resides in public housing or housing assisted under section 8 
and elects to participate in a local self-sufficiency program 
under this section, 
"(o) EFFECTIVE DATE AND REGULATIONS.— 
"(1) REGULATIONS.—Not later than the expiration of the 
180-day period beginning on the date of the enactment of the 
Cranston-Gonzalez National Affordable Housing Act, the Sec-
retary shall by notice establish any requirements necessary to 
carry out this section. Such requirements shall be subject to 
section 553 of title 5, United States Code. The Secretary shall 
issue final regulations based on the notice not later than the 
expiration of the 8-month period beginning on the date of the 
notice. Such regulations shall become effective upon the expira-
tion of the 1-year period beginning on the date of the publica-
tion of the final regulations. 
"(2) APPLICABIUTY TO INDIAN PUBLIC HOUSING.—In accordance 
with section 201(bX2), the provisions of this section shall also 
apply to public housing developed or operated pursuant to a 
contract between the Secretary and an Indian 
housing 
authority.", 
(b) GAO STUDY ON LINKING FEDERAL HOUSING ASSISTANCE TO 42 use I437u 
ECONOMIC SELF-SUFFICIENCY PROGRAMS.— 
note. 
104 STAT. 4232 
PUBLIC LAW 101-625—NOV. 28, 1990 
Reports. 
(1) IN GENERAL.—The Comptroller General of the United 
States shall submit to the Congress, not later than 18 months 
after the date of the enactment of this Act, a report— 
(A) evaluating the policy and administrative implications 
of requiring State and local governments to require partici-
pation in an economic self-sufficiency program as a condi-
tion of the receipt of rental assistance under section 8 of the 
United States Housing Act of 1937 and public housing 
assistance; 
(B) determining the additional costs to public housing 
agencies under such programs and recommending a change 
in the amount of the administrative fee under section 8(q) 
of the United States Housing Act of 1937 to cover the 
additional costs of carrying out the Family Self-Sufficiency 
Program under section 23 of the United States Housing Act 
of 1937; and 
(C) examining how housing and social service policies 
affect beneficiaries, particularly persons receiving public 
assistance, when such beneficiaries gain emplo3nnent and 
experience a rise in income. 
(2) CKTHER CONTENTS.—The report under this subsection shall 
include— 
(A) an evaluation of Federal programs to link housing 
and supportive services for the promotion of economic self-
sufficiency, including programs that are being or have been 
administered by the Secretary of Housing and Urban Devel-
opment (such as Project Self-Sufficiency, Operation Boot-
strap, and the Public Housing Comprehensive Transition 
Demonstration); 
(B) an analysis of the extent to which public housing 
agencies can reasonably and effectively obtain supportive 
services in connection with the Family Self-Sufficiency Pro-
gram and other programs that link supportive services to 
Federal housing assistance; 
(C) an assessment of the policy and administrative im-
plications of allocating section 8 rental assistance and 
public housing assistance only to localities that have a plan 
for providing incremental rental assistance only in conjunc-
tion with economic self-sufficiency programs; and 
(D) an analysis of the extent to which existing laws 
regarding housing and other programs create disincentives 
to upward income mobility and recommendations for legis-
lative changes to remove such disincentives. 
(3) CONSULTATION.—In preparing the report under this subsec-
tion, the Comptroller (Jeneral shall consult with the Secretary 
of Housing and Urban Development, the Secretary of Health 
and Human Services, the Secretary of Labor, other appropriate 
Federal officials, appropriate State £ind local officisds, other 
knowledgeable individuals, and national and other organiza-
tions representing eligible beneficiaries, State and local welfare 
and emplo3anent agencies, public housing agencies, business, 
public and private education or training institutions, and other 
service providers. 
(4) DEFINITION OP ECONOMIC SELF-SUFFICIENCY PROGRAM.—For 
purposes of this subsection, the term "economic self-sufficiency 
program" means a public or private program designed to enable 
economically 
disadvantaged 
individuals 
achieve 
economic 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4233 
independence and includes programs authorized under the Job 
Training Partnership Act and the Family Support Act of 1988. 
SEC. 555. INCOME ELIGIBILITY FOR TENANCY IN NEW CONSTRUCTION 
UNITS. 
Any dwelling units in any housing constructed or substantially 
rehabilitated pursuant to assistance provided under section 8(b)(2) of 
the United States Housing Act of 1937, as such section existed before 
October 1, 1983, and with a contract for assistance under such 
section, shall be reserved for occupancy by low-income families and 
very low-income families. 
SEC. 556. DISTRIBUTION OF SECTION 8 CERTIFICATES. 
Section 213(dXlXA) of the Housing and Community Development 
Act of 1974 (42 U.S.C. 1439(dXlXA)) is amended— 
(1) by inserting "(i)" after "(dXlXA)"; and 
(2) by adding at the end the following new clause: 
"(ii) Assistance under section 8(bXl) of the United States Housing 
Act of 1937 shall be allocated in a manner that enables participating 
jurisdictions to carry out, to the maximum extent practicable, com-
prehensive housing affordability strategies approved in accordance 
with section 105 of the Cranston-Gonzalez National Affordable 
Housing Act. Such jurisdictions shall submit recommendations for 
allocating assistance under such section 80t>Xl) to the Secretary in 
accordance with procedures that the Secretary determines to be 
appropriate to permit allocations of such assistance to be made on 
the basis of timely and complete information. This clause may not 
be construed to prevent, alter, or otherwise affect the application of 
the formula established pursuant to clause (i) for purposes of allocat-
ing such assistance. For purposes of this clause, the term 'participat-
ing jurisdiction' means a State or unit of general local government 
designated by the Secretary to be a participating jurisdiction under 
title II of the Cranston-Gonzalez National Affordable Housing Act.". 
SEC. 557. SETTLEMENT AGREEMENT REGARDING CERTAIN SECTION 8 
ASSISTANCE. 
Notwithstanding any other provision of law, the Secretary of 
Housing and Urban Development shall, from any amounts provided 
under section 5(c) of the United States Housing Act of 1937 for use 
in fiscal year 1991 under section 8 of such Act, provide such assist-
ance to the City of Norfolk, in the State of Virginia, in an amount 
necessary to provide 186 certificates under subsection (b) of such 
section 8. The assistance provided under this section shall be in 
satisfaction of the settlement agreement dated October 6, 1981, in 
the case of Robin Hood Tenants Association v. Vincent J. Thomas, 
Jr. (civil action no. 80-501-N), in the Norfolk Division of the United 
States District Court for the Eastern Division of Virginia. 
SEC. 
5
5
8
. GAO STUDY 
REGARDING 
FAIR 
MARKET 
RENT 
CALCULATION. 
The Comptroller General of the United States shall conduct a 
study to examine fair market rentals under section 8(c)(1) of the 
United States Housing Act of 1937 and determine the feasibility and 
effects of establishing fair market for areas that are geographically 
smaller than market areas under such section which are wholly 
contained within such market areas. The study shall examine the 
following: 
42 use 1437f 
note. 
42 use 1437f 
note. 
104 STAT. 4234 
PUBLIC LAW 101-625—NOV. 28, 1990 
Reports. 
42 use 1437f 
note. 
(1) Whether estabUshment of such smaller fair market areas 
will more accurately reflect rent variations within market areas 
and improve housing opportunities for disadvantaged minorities 
and families with special needs, provide very low-income fami-
lies with better access to employment and education opportuni-
ties, or otherwise further the objectives of national housing 
policy as affirmed by the Congress, which shall be determined 
for not less than 3 communities, including Wilmington, Dela-
ware, and Columbus, Ohio. 
(2) The inflationary effects of fair market rentals under exist-
ing law within not less than 3 communities, including Okla-
homa City, Oklahoma, and Boston, Massachusetts. 
(3) The extent of geographical dispersion of families in 
particular communities receiving tenant-based assistance under 
such section 8, describing the differing characteristics of areas 
in which such assistance is used (including the character of 
neighborhoods, 
proximity 
to 
services, 
emplojnnent, 
and 
transportation, and quality of housing stock), which shall be 
determined for not less than 3 communities including Washing-
ton, District of Columbia, and Seattle, Washington. 
The Comptroller General shall submit a report to the Congress not 
later than 18 months after the date of the enactment of this Act 
regarding the findings and conclusions under the study. 
SEC. 559. STUDY OF SECTION 8 UTILIZATION RATES. 
(a) STUDY.—The Secretary of Housing and Urban Development 
shall conduct a study of the reasons for success or failure, within 
appropriate cities and localities, in utilizing assistance made avail-
able by the Secretary for such areas under the certificate and 
voucher programs under section 8 of the United States Housing Act 
of 1937. The study shall examine such rates and provide information 
regarding such rates based on the household size, age of household 
members, race of household members, income of households, welfare 
status of households, number of children in a household. 
(b) REPORT.—The Secretary of Housing and Urban Development 
shall submit to the Congress, not later than the expiration of 
the 1-year period beginning on the date of the enactment of this 
Act, a report regarding the study under this section. The report 
shall contain a conclusion of the Secretary, for each city or locality 
studied, whether the success or failure in utilizing assistance under 
such section 8 relates to the existence of a local problem or a 
programmatic failure with respect to the certificate or voucher 
program. 
SEC. 560. REPORT ON RESIDUAL RECEIPTS ACCOUNTS IN SECTION 8 AND 
SECTION 202 HOUSING. 
The Secretary of Housing and Urban Development shall conduct a 
study of a statistically significant sample of housing assisted under 
section 8 of the United States Housing Act of 1937 and section 202 of 
the Housing Act of 1959 to determine the amounts that are con-
tained in existing residual receipts accounts. The Secretary shall 
identify the existing rules and regulations governing the permissible 
uses of such accounts. Not later than 6 months after the date of 
enactment of this Act, the Secretary shall submit to the Congress a 
detailed report setting forth the findings of the Secretary as a result 
of the study. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4235 
SEC. 561. FEASIBILITY STUDY REGARDING INDIAN TRIBE ELIGIBILITY 42 USC 1437f 
FOR VOUCHER PROGRAM. 
note. 
(a) STUDY.—The Secretary of Housing and Urban Development 
shall carry out a study to determine the feasibility and effectiveness 
of entering into contracts with Indian housing authorities to provide 
voucher assistance under section 8(0) of the United States Housing 
Act of 1937. 
(b) CONSULTATION.—In carrying out the study under this section, 
the Secretary shall consult with Indian housing authorities. 
(c) REPORT.—The Secretary shall submit to the Congress, not later 
than the expiration of the 1-year period beginning on the date of the 
enactment of this Act, a report regarding the findings and conclu-
sions of the Secretary as a result of the study under this section. 
Subtitle C—General Provisions and Other 
Assistance Programs 
SEC. 571. LOW-INCOME HOUSING AUTHORIZATION. 
(a) AGGREGATE BUDGET AUTHORITY.—Section 5(c)(6) of the United 
States Housing Act of 1937 (42 U.S.C. 1437c(c)(6)) is amended by 
adding at the end the following new sentence: "The aggregate 
amount of budget authority that may be obligated for assistance 
referred to in paragraph (7) is increased (to the extent approved in 
appropriation Acts) by $16,194,000,000 on October 1, 1990, and by 
$14,709,400,000 on October 1,1991.". 
(b) UTILIZATION OF HOUSING BUDGET AUTHORITY.—Subparagraphs 
(A) and (B) of section 5(c)(7) of the United States Housing Act of 1937 
(42 U.S.C. 1437c(c)(7)) are amended to read as follows: 
"(7)(A) Using the additional budget authority provided under 
paragraph (6) and the balances of budget authority that become 
available during fiscal year 1991, the Secretary shall, to the extent 
approved in appropriations Acts, reserve authority to enter into 
obligations aggregating— 
"(i) for public housing grants under subsection (a)(2), not more 
than $742,100,000, of which amount not more than $228,000,000 
shall be available for Indian housing; 
"(ii) for Eissistance under subsections (b)(1) and (o) of section 8, 
not more than $1,880,000,000, of which the Secretary shall use 
such amounts as may be necessary to provide not more than 
1,000 certificates for purposes of replacement assistance under 
section 304(g) of the United States Housing Act of 1937; except 
that not more than 50 percent of the amounts appropriated 
under this clause may be used for vouchers under section 8(0). 
"(iii) for assistance under section 8 in connection with projects 
developed under section 202 of the Housing Act of 1959, not 
more than $1,200,000,000; 
"(iv) for comprehensive improvement assistance grants under 
section 14(k), not more than $2,150,000,000, of which not more 
than $3,000,000 shall be available for resident homeownership 
financial assistance under section 21(a)(2)(B); 
"(v) for assistance under section 8 for property disposition, not 
more than $420,000,000; 
"(vi) for assistance under section 8 for loan management, not 
more than $160,000,000; 
104 STAT. 4236 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(vii) for extensions of contracts expiring under section 8, not 
more than $7,735,000,000 which shall be for 5-year contracts for 
certificates under section 80t))(l) and vouchers under section 8(o), 
and for assistance under section 8 for loan management; 
"(viii) for amendments to contracts under section 8, not more 
than $1,620,500,000; 
"(ix) for public housing lease adjustments and amendments, 
not more than $207,300,000; and 
"(x) for public housing replacement activities, not more than 
$79,100,000. 
"(B) Using the additional budget authority provided under para-
graph (6) and the balances of budget authority that become available 
during fiscal year 1992, the Secretary shall, to the extent approved 
in appropriations Acts, reserve authority to enter into obligations 
aggregating— 
"(i) for public housing grants under subsection (a)(2), not more 
than $812,300,000, of which amount not more than $237,800,000 
shall be available for Indian housing; 
"(ii) for assistance under subsections (bXl) and (o) of section 8, 
not more than $1,960,800,000, of which the Secretary shall use 
such amounts as may be necessary to provide not more than 
1,000 certificates for purposes of replacement assistance under 
section 304(g) of the United States Housing Act of 1937; except 
that not more than 50 percent of the amounts appropriated 
under this clause may be used for vouchers under section 8(o). 
"(iii) for comprehensive improvement Eissistance grants under 
section 14(k), not more than $2,242,500,000; 
"(iv) for assistance under section 8 for property disposition, 
not more than $438,100,000; 
"(v) for assist£ince under section 8 for loan management, not 
more than $166,900,000; 
"(vi) for extensions of contracts expiring under section 8, not 
more than $7,100,000,000 which shall be for 5-year contracts for 
certificates under section 8(b)(1) and vouchers under section 8(o), 
and for assistance under section 8 for loan management; 
"(vii) for amendments to contracts under section 8, not more 
than $1,690,200,000; 
"(viii) for public housing lease adjustments and amendments, 
not more than $216,100,000; and 
"(ix) for public housing replacement activities, not more than 
$82,500,000.". 
SEC. 572. LOW-INCOME TERM. 
The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is 
amended— 
(1) by striking "lower income families" each place it appears 
and inserting "low-income families", 
(2) by striking "lower income housing" each place it appears 
and inserting "low-income housing". 
SEC. 573. DEFINITIONS UNDER UNITED STATES HOUSING ACT OF 1937. 
(a) FAMILY.—Section 3(bX3) of the United States Housing Act of 
1937 (42 U.S.C. 1437a(B)(3)) is amended— 
(1) in the first sentence, by striking "(D)" and all that follows 
and inserting the following: "(D) and any other single persons. 
In no event may any single person under clause (D) be provided 
a housing unit assisted under this Act of 2 bedrooms or more."; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4237 
(2) by striking the second sentence; and 
(3) by striking the third from last sentence. 
(b) INCOME.—Section 3(bX4) of the United States Housing Act of 
1937 (42 U.S.C. 1437a(bX4)) is amended by inserting before the period 
at the end the following: ", except that any amounts not actually 
received by the family may not be considered as income under this 
paragraph". 
(c) ADJUSTED INCOME.— 
(1) ALLOWANCE FOR DEPENDENTS.—Section 3(bX5XA) of the 
United States Housing Act of 1937 (42 U.S.C. 1437a(bX5XA)) is 
amended by striking "$480" and inserting "$550". 
(2) ALLOWANCE FOR MEDICAL EXPENSES.—Section 3(bX5XC) of 
the United States Housing Act of 1937 (42 U.S.C. 1437a(bX5XC)) 
is amended— 
(A) in clause (i), by striking "elderly"; and 
(B) by striking "and" at the end. 
(3) ALLOWANCES FOR WORKING FAMIUES AND CHILD SUPPORT 
AND ALIMONY PAYMENTS.—Section 3(bX5) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(bX5)) is amended— 
(A) by striking the period at the end of subparagraph (D) 
and inserting a semicolon; and 
(B) by adding at the end the following new subpara-
graphs: 
"(E) 10 percent of the earned income of the family; and 
"(F) any payment made by a member of the family for the 
support and maintenance of any child, spouse, or former spouse 
who does not reside in the household, except that the amount 
excluded under this subparagraph shall not exceed the lesser of 
(i) the amount that such family member has a legal obligation 
to pay; or (ii) $550 for each individual for whom such pa3mient is 
made.". 
(d) DETERMINATION OF INCOME LIMITS.—Section 3(bX2) of the 
United States Housing Act of 1937 (42 U.S.C. 1437a03X2)) is amended 
by inserting sifter the period at the end the following: "In determin-
ing median incomes (of persons, families, or households) for an area 
or establishing any ceilings or limits based on income under this 
Act, the Secretary shall determine or establish area median incomes 
and income ceilings and limits for Westchester County, in the State 
of New York, as if such county were an area not contained within 
the metropolitan statistical area in which it is located. In determin-
ing such area median incomes or establishing such income ceilings 
or limits for the portion of such metropolitan statistical area that 
does not include Westchester County, the Secretary shall determine 
or establish area median incomes and income ceilings and limits as 
if such portion included Westchester County.". 
(e) BUDGET COMPUANCE.—The amendments made by subsections 
(b) and (c) shall apply only to the extent approved in appropriations 
Acts. 
(f) EFFECTIVE DATE.—The Secretary shall issue regulations im-
plementing subsections (a) and (d) the amendments made by this 
section not later than the expiration of the 90-day period beginning 
on the date of the enactment of this Act. The regulations may not 
take effect until after September 30,1991. 
42 u s e 1437a 
note. 
Regulations. 
42 u s e 1437a 
note. 
104 STAT. 4238 
PUBLIC LAW 101-625—NOV. 28, 1990 
SEC. 574. EFFECT OF FOSTER CARE CHILDREN IN DETERMINING FAMILY 
COMPOSITION AND SIZE. 
Section 3(bX3) of the United States Housing Act of 1937 (42 U.S.C. 
14373(1^X3)), as Eimended by the preceding provisions of this Act, is 
further amended by inserting after the period at the end the follow-
ing new sentence: "The temporary absence of a child from the home 
due to placement in foster care shall not be considered in consider-
ing family composition and family size.". 
SEC. 575. EXEMPTION FROM HOUSING DEVELOPMENT GRANT CONSTRUC-
TION COMMENCEMENT REQUIREMENTS. 
(a) IN GENERAL.—Notwithstanding section 17(dX4)(G) of the 
United States Housing Act of 1937 and subject to approval in 
appropriations Acts, the county of Santa Cruz, in the State of 
California, may not be required to return, and the Secretary of 
Housing £ind Urban Development may not recapture, any housing 
development grant amounts referred to in subsection (b) if during 
the 6-month period beginning on the date of the enactment of this 
Act the county (or any subgrantee) commences construction or 
substantial rehabilitation activities for which such amounts were 
made available. 
(b) DESCRIPTION OF GRANT AMOUNTS.—The grant amounts re-
ferred to in subsection (a) are the amounts awarded to the county of 
Santa Cruz, in the State of California, on October 1, 1987, under 
section 17(d) of the United States Housing Act of 1937, for the 
purpose of providing 37 housing units for low- and very low-income 
families at the Murphy's Crossing housing development (project no. 
CA030HG701). 
SEC. 576. CONSULTATION REGARDING FOSTER CARE CHILDREN IN 
DEVELOPMENT OF HOUSING ASSISTANCE PLAN. 
Section 213(aX5) of the Housing and Community Development Act 
of 1974 (42 U.S.C. 1439(aX5)) is amended by inserting after the period 
at the end the following: "In developing a housing assistance plan 
under this paragraph a unit of general local government shall 
consult with local public agencies involved in providing for the 
welfare of children to determine the housing needs of (A) families 
identified by the agencies £is having a lack of adequate housing that 
is a primary factor in the imminent placement of a child in foster 
care or in preventing the discharge of a child from foster care and 
reunification with his or her family; and (B) children who, upon 
discharge of the child from foster care, cannot return to their family 
or extended family and for which adoption is not available. The unit 
of general local government sheill include in the housing assistance 
plan needs and goals with respect to such families and children.". 
SEC. 577. HOUSING COUNSELING. 
(a) COUNSEUNG SERVICES.—The first sentence of section 106(a)(3) 
of the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701x(aX3)) is amended by striking "except that" and all that follows 
and inserting the following: "except that for such purposes there are 
authorized to be appropriated $3,600,000 for fiscal year 1991 and 
$3,700,000 for fiscal year 1992.". 
(b) EMERGENCY HOMEOWNERSHIP COUNSEUNG.— 
(1) AUTHORIZATION OF APPROPRIATIONS.—The first sentence of 
section 106(cX8) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(cX8)) is amended to read as follows: "There 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4239 
is authorized to be appropriated to carry out this section 
$6,700,000 for fiscal year 1991 and $7,000,000 for fiscal year 
1992, of which amounts $2,000,000 shall be available in each 
such fiscal year to carry out paragraph (5XD).". 
(2) EXTENSION OF PROGRAM.—Section 106(cX9) of the Housing 
and Urban Development Act of 1968 (12 U.S.C. 1701x(cX9)) is 
amended by striking "September 30, 1990" and inserting 
"September 30,1992". 
(3) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP COUN-
SELING.—Section 106(cX5) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(cX5)) is amended to read as 
follows: 
"(5) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP COUN-
SEUNG.— 
"(A) IN GENERAL.—Except as provided in subparagraph 
(C), if any eligible homeowner fails to pay any amount by 
the date the amount is due under a home loan, the creditor 
of the loan shall notify the homeowner of the availability of 
any homeownership counseling offered by the creditor and, 
as a supplement to counseling provided by the creditor, 
shall notify the homeowner of 1 of the following: 
"(i) The availability of homeownership counseling 
provided by nonprofit organizations approved by the 
Secretary 
and 
experienced 
in 
the 
provision 
of 
homeownership counseling. 
"(ii) The toll-free telephone number described in 
subparagraph (DXi). 
"(B) DEADUNE FOR NOTIFICATION.—The notification re-
quired in subparagraph (A) shall be made— 
"(i) in a manner approved by the Secretary; and 
"(ii) before the expiration of the 45-day period begin-
ning on the date on which the failure referred to in 
such subparagraph occurs. 
"(C) EXCEPTIONS.—Notification under subparagraph (A) 
shall not be required with respect to any loan— 
"(i) insured or guarsmteed under chapter 37 of title 
38, United States Code; or 
"(ii) for which the eligible homeowner pays the 
emiount overdue before the expiration of the 45-day 
period under subparagraph (BXii). 
"(D) ADMINISTRATION AND COMPUANCE.—The Secretary 
shall, to the extent of amounts approved in appropriation 
Acts, enter into an agreement with an appropriate private 
entity under which the entity will— 
"(i) operate a toll-free telephone number through 
which any eligible homeowner can obtain a list of 
nonprofit organizations that— 
"(I) are approved by the Secretary and experi-
enced in the provision of homeownership counsel-
ing; and 
(II) serve the area in which the residential prop-
erty of the homeowner is located; 
"(ii) monitor the compliance of creditors with the 
requirements of subparagraphs (A) and (B); and 
(iii) report to the Secretary not less than annually 
regarding the extent of compliance of creditors with 
the requirements of subparagraphs (A) and (B). 
104 STAT. 4240 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(E) REPORT.—The Secretary shall submit a report to the 
Congress not less than annually regarding the extent of 
compliance of creditors with the requirements of subpara-
graphs (A) and (B) and the effectiveness of the entity mon-
itoring such compliance. The Secretary shall also include in 
the report any recommendations for legislative action to 
increase the authority of the Secretary to penalize creditors 
who do not comply with such requirements.", 
(c) PREPURCHASE AND FORECLOSURE-PREVENTION COUNSELING DEM-
ONSTRATION.—Section 106 of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the 
following new subsection: 
"(d) ftlEPURCHASE AND FORECLOSURE-PREVENTION COUNSELING 
DEMONSTRATION.— 
"(1) PURPOSES.—The purpose of this subsection is— 
"(A) to reduce defaults and foreclosures on mortgage 
loans insured under the Federal Housing Administration 
single family mortgage insurance program; 
"(B) to encourage responsible and prudent use of such 
federally insured home mortgsiges; 
"(C) to assist homeowners with such federally insured 
mortgages to retain the homes they have purchased pursu-
ant to such mortgages; and 
"(D) to encourage the avedlability and expansion of hous-
ing opportunities in connection with such federally insured 
home mortgages. 
"(2) AUTHORITY.—The Secretary of Housing and Urban Devel-
opment shall carry out a program to demonstrate the effective-
ness of providing coordinated prepurchase counseling and 
foreclosure-prevention counseling to first-time homebuyers and 
homeowners in avoiding defaults and foreclosures on mortgages 
insured under the Federal Housing Administration single 
family home mortgage insurance program. 
"(3) GRANTS.—Under the demonstration program under this 
subsection, the Secretary shall make grants to qualified non-
profit organizations under paragraph (4) to enable the organiza-
tions to provide prepurchase counseling services to eligible 
homebuyers and foreclosure-prevention counseling services to 
eligible homeowners, in counseling target areas. 
(4) QuAUFiED NONPROFIT ORGANIZATIONS.—The Secretary 
shall select nonprofit organizations to receive assistance under 
the demonstration program under this subsection based on the 
experience and ability of the organizations in providing 
homeownership counseling and their ability to provide commu-
nity-based prepurchase and foreclosure-prevention counseling 
under paragraphs (5) and (6) in a counseling target area. To be 
eligible for selection under this paragraph, a nonprofit organiza-
tion shall submit an application containing a proposal for 
providing counseling services in the form and manner required 
by the Secretary. 
"(5) PREPURCHASE couNSEUNG.— 
"(A) MANDATORY PARTICIPATION.—Under the demonstra-
tion program, the Secretary shall require any eligible 
homebuyer who intends to purchase a home located in a 
counseling target area and who has applied for (as deter-
mined by the Secretary) a qualified mortage (as such term 
is defined in paragraph (10)(K)) on such home that involves 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4241 
a downpayment of less than 10 percent of the principal 
obligation of the mortgage, to receive counseling prior to 
signing of a contract to purchase the home. The counseling 
shall include counseling with respect to— 
"(i) financial management and the responsibilities 
involved in homeownership; 
"(ii) fair housing laws and requirements; 
"(iii) the maximum mortgage amount that the home-
buyer can afford; and 
'(iv) options, programs, and actions available to the 
homebuyer in the event of actual or potential delin-
quency or default. 
"(B) EuGiBiLiTY FOR couNSEUNG.—A homebuyer shall be 
eligible for prepurchase counseling under this paragraph 
if— 
"(i) the homebuyer has applied for a qualified 
mortgage; 
"(ii) the homebuyer is a first-time homebuyer; and 
"(iii) the home to be purchased under the qualified 
mortgage is located in a counseling target area. 
"(6) FORECLOSURE-PREVENTION COUNSELING.— 
"(A) AVAILABILITY.—Under the demonstration program, 
the Secretary shall make counseling available for eligible 
homeowners who are 60 or more days delinquent with 
respect to a pa3mient under a qualified mortgage on a home 
located within a counseling target area. The counseling 
shall include counseling with respect to options, programs, 
and actions available to the homeowner for resolving the 
delinquency or default. 
"(B) NOTIFICATION OF DEUNQUENCY.—Under the dem-
onstration program, the Secretary shall require the creditor 
of any eligible homeowner who is delinquent (as described 
in subparagraph (A)) to send written notice by registered or 
certified mail within 5 days (excluding Saturdays, Sundays, 
and legal public holidays) after the occurrence of such 
delinquency— 
"(i) notifjdng the homeowner of the delinquency and 
the name, address, and phone number of the counseling 
organization for the counseling target area; and 
'(ii) notifying any counseling organization for the 
counseling target area of the delinquency and the 
name, address, and phone number of the delinquent 
homeowner. 
"(C) 
COORDINATION WITH EMERGENCY HOMEOWNERSHIP 
COUNSELING PROGRAM.—The Secretary may coordinate the 
provision of assistance under subsection (c) with the dem-
onstration program under this subsection. 
"(D) ELIGIBIUTY FOR COUNSEUNG.—A homeowner shall be 
eligible for foreclosure-prevention counseling under this 
paragraph if— 
"(i) the home owned by the homeowner is subject to a 
qualified mortgage; and 
"(ii) such home is located in a counseling terget area. 
"(7) SCOPE OF DEMONSTRATION PROGRAM.— 
"(A) 
DESIGNATION OF COUNSELING TARGET AREAS.—The 
Secretary shall designate 3 counseling target areas (as pro-
vided in subparagraph (B)), which shall be located in not 
104 STAT. 4242 
PUBLIC LAW 101-625—NOV. 28, 1990 
less than 2 separate metropolitan areas. The Secretary 
shall provide for counseling under the demonstration pro-
gram under this subsection with respect to only such coun-
seling target areas. 
"(B) CouNSEUNG TARGET AREAS.—Each Counseling target 
area shall consist of a group of contiguous census tracts— 
"(i) the population of which is greater than 50,000; 
"(ii) which 
together 
constitute an identifiable 
neighborhood, area, borough, district, or region within 
a metropolitan area (except that this clause may not be 
construed to exclude a group of census tracts contain-
ing areas not wholly contained within a single town, 
city, or other political subdivision of a State); 
'(iii) in which the average age of existing housing is 
greater than 20 years; and 
"(iv) for which (I) the percentage of qualified mort-
gages on homes within the area that are foreclosed 
exceeds 5 percent for the calendar year preceding the 
year in which the area is selected as a counseling 
target area, or (II) the number of qualified mortgeiges 
originated on homes in such area in the calendar year 
preceding the calendar year in which the area is se-
lected as a counseling target area exceeds 20 percent of 
the total number of mortgages originated on residences 
in the area during such year. 
"(C) MORTGAGE CHARACTERISTICS.—In designating coun-
seling target areas under subparagraph (A), the Secretary 
shall designate at least 1 such area that meets the require-
ments of subparagraph (BXivXD and at least 1 such area 
that meets the requirements of subparagraph (BXivXID-
"(D) EXPANSION OF TARGET AREAS.—The Secretary may 
expgmd any counseling target area during the term of the 
demonstration program, if the Secretary determines that 
counseling can be adequately provided within 
such 
expanded area and the purposes of this subsection will be 
furthered by such expansion. Any such expansion shall 
include only groups of census tracts that are contiguous to 
the counseling target area expanded and such census tract 
groups 
shall not be subject to the provisions of 
subparagraph (B). 
"(E) DESIGNATION OF CONTROL AREAS.—For purposes of 
determining the effectiveness of counseling under the dem-
onstration program, the Secretary shall designate 3 control 
areas, each of which shall correspond to 1 of the counseling 
target areas designated under subparagraph (A). Each con-
trol area shall be located in the metropolitan area in which 
the corresponding counseling target area is located, shall 
meet the requirements of subparagraph (B), and shall be 
similar to such area with respect to size, age of housing 
stock, median income, and racial makeup of the population. 
Each control area shall also comply with the requirements 
of subclause (I) or (II) of subparagraph (BXiv), according to 
the subclause with which the corresponding counseling 
target area complies. 
Records. 
"(8) EVALUATION,—Each Organization providing counseling 
under the demonstration program under this subsection shall 
maintain records with respect to each eligible homebuyer and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4243 
eligible homeowner counseled and shall provide information 
with respect to such counseling as the Secretary or the 
Comptroller General (for purposes of the study and report under 
paragraph (9)) may require. 
"(9) GAO STUDY AND REPORT.— 
"(A) STUDY.—During the 12-month period ending on the 
termination date under paragraph (13), the Comptroller 
General of the United States shall conduct a study to assess 
the effectiveness of the demonstration program and coun-
seling under the program. The study shall include— 
"(i) a comparison of the default and foreclosure rates 
for each counseling target area and other aresis, includ-
ing each corresponding control area; 
(ii) a survey of eligible homebuyers and eligible 
homeowners counseled under the program; and 
"(iii) identification of factors preventing participation 
in the program for single family home mortgage insur-
ance under the National Housing Act and contributing 
to default and foreclosure under such program. 
"(B) REPORT.—The Comptroller General shall submit to 
the Committees on Banking, Finance and Urban Affairs 
and Veterans' Affairs of the House of Representatives, the 
Committees on Banking, Housing, and Urban Affairs and 
Veterans' Affairs of the Senate, the Secretary of Housing 
and Urban Development, and the Secretary of Veterans 
Affairs, not later than the termination date under para-
graph (13), a report regarding the study under subpara-
graph (A). The report shall include— 
"(i) information describing the results of the activi-
ties under clauses (i) through (iii) of such subparagraph; 
"(ii) an assessment of the effectiveness of the counsel-
ing under the program in preventing default and fore-
closure, based on comparison between counseling 
target areas and control areas; and 
"(iii) a recommendation of whether a permanent 
counseling program involving prepurchase counseling 
or foreclosure-prevention counseling would be effective 
in reducing defaults and foreclosures on qualified mort-
gages. 
"(10) DEFINITIONS.—For purposes of this subsection: 
"(A) The term 'control area' means an area designated by 
the Secretary under parsigraph (7)(E). 
"(B) The term 'counseling target area' means an area 
designated by the Secretary under paragraph (7)(A). 
"(C) The term 'creditor' means a person or entity that is 
servicing a loan secured by a qualified mortgage on behalf 
of itself or another person or entity. 
"(D) The term 'displaced homemaker' means an individ-
ual who— 
"(i) is an adult; 
"(ii) has not worked full-time, full-year in the labor 
force for a number of years, but has during such years, 
worked primarily without remuneration to care for the 
home and family; and 
"(iii) is unemployed or underemployed and is experi-
encing difficulty in obtaining or upgrading employ-
ment. 
104 STAT. 4244 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(E) The term 'downpajonent' means the amount of pur-
chase price of home required to be paid at or before the 
time of purchase. 
"(F) The term 'eligible homebuyer' means a homebuyer 
that meets the requirements under paragraph (5)(B). 
"(G) The term 'eligible homeowner' means a homeowner 
that meets the requirements under paragraph (6)(D). 
"(H) The term 'first-time homebuyer' means an individ-
ual who— 
"(i) (and whose spouse) has had no ownership in a 
principal residence during the 3-year period ending on 
the date of purchase of the home pursuant to which 
counseling is provided under this subsection; 
"(ii) is a displaced homemaker who, except for 
owning a residence with his or her spouse or residing in 
a residence owned by the spouse, meets the require-
ments of clause (i); or 
"(iii) is a single parent who, except for owning a 
residence with his or her spouse or residing in a resi-
dence owned by the spouse while married, meets the 
requirements of clause (i). 
"(I) The term 'home' includes any dwelling or dwelling 
unit eligible for a qualified mortgage, and includes a unit in 
a condominium project, a membership interest and occu-
pancy agreement in a cooperative housing project, and a 
manufactured home and the lot on which the home is 
situated. 
"(J) The term 'metropolitan area' means a standard 
metropolitan statistical area as designated by the Director 
of the Office of Management and Budget. 
"(K) The term 'qualified mortgage' means a mortgage on 
a 1- to 4-family home that is insured under title II of the 
National Housing Act. 
"(L) The term 'Secretary' means the Secretary of Housing 
and Urban Development. 
"(M) The term 'single parent' means an individual who— 
"(i) is unmarried or legally separated from a spouse; 
and 
"(iiXD has 1 or more minor children for whom the 
individual has custody or joint custody; or 
"(II) is pregnant. 
"(11) REGULATIONS.—The Secretary may issue any regulations 
necessary to carry out this subsection. 
"(12) 
AUTHORIZATION OP APPROPRIATIONS.—There are 
au-
thorized to be appropriated to carry out this subsection $350,000 
for fiscal year 1991 and $365,000 for fiscal year 1992. 
"(13) TERMINATION.—The demonstration program under this 
subsection shall terminate at the end of fiscal year 1994.". 
SEC. 578. FLEXIBLE SUBSIDY PROGRAM. 
12 use 1715Z-1. 
(a) EXTENSION.—Section 236(fK3) of the National Housing Act is 
amended by striking "September 30, 1991" and inserting "Septem-
ber 30,1992". 
(b) AUTHORIZATION.—Section 201(j) of the Housing and Commu-
nity Development Amendments of 1978 (12 U.S.C. 1715z-la(j)) is 
amended by adding at the end the following paragraph: 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4245 
"(5) There are authorized to be appropriated for assistance under Appropriation 
the flexible subsidy fund not to exceed $50,000,000 for fiscal year authorization. 
1991 and $52,200,000 for fiscal year 1992.". 
(c) LIMITATION.—Section 2010X1) of the Housing and Community 
Development Amendments of 1978 is amended by inserting before 
12 USC I7i5z-la. 
the period at the end the following: "and shall not (except as 
provided in Public Law 100-4-4 (102 Stat. 1018), as in effect on 
October 1,1988) be available for any other purpose". 
SEC. 579. STREAMLINED PROPERTY DISPOSITION REQUIREMENTS FOR 
UNSUBSIDIZED MULTIFAMILY HOUSING PROJECTS. 
(a) GOALS.—Section 203(aXlXB) of the Housing and Community 
Development Amendments of 1978 is amended by striking "or 
12 USC I70lz-ll. 
vacant". 
(b) ACTIONS.—Section 203(d) of the Housing and Community 
Development Amendments of 1978 is amended— 
(1) in paragraph (IXB), by striking "or are vacant (which units 
shall be made available for such families as soon as possible)"; 
(2) by redesignating paragraph (2) as paragraph (3); and 
(3) by inserting after paragraph (1) the following new 
paragraph: 
"(2) In the case of multifamily housing projects (other than 
subsidized or formerly subsidized projects) that are acquired by 
a purchaser other than the Secretary at foreclosure or after sale 
by the Secretary, enter into annual contribution contracts with 
public housing agencies to provide vouchers or certificates 
under section 8 of the United States Housing Act of 1937 to all 
low-income families who are eligible for such assistance on the 
date that the project is acquired by the purchaser. The Sec-
retary shall take action under this paragraph only after making 
a determination that the requirements under subsection (e) 
have been complied with and there is available in the area an 
adequate supply of habitable affordable housing for low-income 
families.". 
SEC. 580. MULTIFAMILY HOUSING DISPOSITION PARTNERSHIP. 
Section 184(cXl) of the Housing and Community Development Act 
of 1987 (12 U.S.C. 1701Z-11 note) is amended by striking "upon the 
expiration of the 3-year period beginning on the date of the enact-
ment of this Act" and inserting "at the end of September 30, 1991". 
SEC. 581. PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION. 
(a) IN GENERAL.—The Public Housing Drug Elimination Act of 
1988 (chapter 2 of subtitle C of title V of Public Law 100-690) is 
amended to read as follows: 
"CHAPTER 2—PUBLIC AND ASSISTED HOUSING DRUG 
ELIMINATION 
Public and 
Assisted 
Housing Drug 
Elimination Act 
of 1990. 
"SEC. 5121. SHORT TITLE. 
"This chapter may be cited as the "Public and Assisted Housing 42^USC 11901 
Drug Elimination Act of 1990". 
"SEC. 5122. CONGRESSIONAL FINDINGS. 
"The Congress finds that— 
note. 
42 USC 11901. 
104 STAT. 4246 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(1) the Federal Government has a duty to provide pubhc and 
other federally assisted low-income housing that is decent, safe, 
and free from illegal drugs; 
"(2) public and other federally assisted low-income housing in 
many areas suffers from rampant drug-related crime; 
"(3) drug dealers are increasingly imposing a reign of terror 
on public and other federally assisted low-income housing 
tenants; 
"(4) the increase in drug-related crime not only leads to 
murders, muggings, and other forms of violence against tenants, 
but also to a deterioration of the physical environment that 
requires substantial government expenditures; and 
"(5) local law enforcement authorities often lack the resources 
to deal with the drug problem in public and other federally 
assisted low-income housing, particularly in light of the recent 
reductions in Federal aid to cities. 
42 u s e 11902. 
"SEC. 5123. AUTHORITY TO MAKE GRANTS. 
"The Secretary of Housing and Urban Development, in accord-
ance with the provisions of this chapter, may make grants to public 
housing agencies (including Indian Housing Authorities) and pri-
- . ,\ 
vate, for-profit and nonprofit owners of federally assisted low-
income housing for use in eliminating drug-related crime. 
42 use 11903. 
"SEC. 5124. ELIGIBLE ACTIVITIES. 
"Grants under this chapter may be used in public housing or 
other federally assisted low-income housing projects for— 
"(1) the emplo5mient of security personnel; 
"(2) reimbursement of local law enforcement agencies for 
additional security and protective services; 
"(3) physical improvements which are specifically designed to 
enhance security; 
"(4) the emplojnment of one or more individuals— 
"(A) to investigate drug-related crime on or about the real 
property comprising any public or other federally assisted 
low-income housing project; and 
"(B) to provide evidence relating to such crime in any 
administrative or judicial proceeding; 
"(5) the provision of training, communications equipment, 
and other related equipment for use by voluntary tenant patrols 
acting in cooperation with local law enforcement officials; 
"(6) programs designed to reduce use of drugs in and around 
public or other federally assisted low-income housing projects, 
including drug-abuse prevention, intervention, referral, and 
treatment programs; and 
"(7) providing funding to nonprofit public housing resident 
management corporations smd resident councils to develop secu-
rity and drug abuse prevention programs involving site 
residents. 
42 u s e 11904. 
"SEC. 5125. APPLICATIONS. 
"(a) IN GENERAL.—To receive a grant under this chapter, a public 
housing agency or an owner of federally assisted low-income housing 
shall submit an application to the Secretary, at such time, in such 
m£inner, and accompanied by such additional information as the 
Secretary may reeisonably require. Such application shall include a 
plan for addressing the problem of drug-related crime on the prem-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4247 
ises of the housing administered or owned by the applicant for 
which the application is being submitted. 
"(b) CRITERIA.—Except as provided by subsections (c) and (d) the 
Secretary shall approve applications under this chapter based exclu-
sively on— 
"(1) the extent of the drug-related crime problem in the public 
or federally assisted low-income housing project or projects 
proposed for assistance; 
"(2) the quality of the plan to address the crime problem in 
the public or federally assisted low-income housing project or 
projects proposed for assistance, including the extent to which 
the plan includes initiatives that can be sustained over a period 
of several years; 
"(3) the capability of the applicant to carry out the plan; and 
"(4) the extent to which tenants, the local government and the 
local community support and participate in the design and 
implementation of the activities proposed to be funded under 
the application. 
"(c) FEDERALLY ASSISTED LOW-INCOME HOUSING.—In addition to 
the selection criteria specified in subsection (b), the Secretary may 
establish other criteria for the evaluation of applications submitted 
by owners of federally assisted low-income housing, except that such 
additional criteria shall be designed only to reflect— 
"(1) relevant differences between the financial resources and 
other characteristics of public housing authorities and owners of 
federally assisted low-income housing, or 
"(2) relevant differences between the problem of drug-related 
crime in public housing and the problem of drug-related crime 
in federally assisted low-income housing. 
"(d) HIGH INTENSITY DRUG TRAFFICKING AREAS.—In evaluating 
the extent of the drug-related crime problem pursuant to subsection 
(b), the Secretary may consider whether housing projects proposed 
for assistance are located in a high intensity drug trafficking area 
designated pursuant to section 1005 of the Anti-Drug Abuse Act of 
1988. 
"SEC. 5126. DEFINITIONS. 
42 USC 11905. 
"For the purposes of this chapter: 
"(1) CONTROLLED SUBSTANCE.—The term 'controlled substance' 
has the meaning given such term in section 102 of the Con-
trolled Substance Act (21 U.S.C. 802). 
"(2) DRUG-RELATED CRIME.—The term 'drug-related crime' 
means the illegal manufacture, sale, distribution, use, or posses-
sion with intent to manufacture, sell, distribute, or use a con-
trolled substance. 
"(3) SECRETARY.—The term 'Secretary' means the Secretary of 
Housing and Urban Development. 
"(4) FEDERALLY ASSISTED LOW-INCOME HOUSING.—The term 
'federally assisted low-income housing' means housing assisted 
under— 
"(A) section 221(dX3), section 221(dX4), or 236 of the 
National Housing Act; 
"(B) section 101 of the Housing and Urban Development 
Act of 1965; or 
"(C) section 8 of the United States Housing Act of 1937. 
104 STAT. 4248 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 u s e 11906. 
Regulations. 
42 u s e 11907. 
42 u s e 11908. 
42 u s e 11909. 
42 u s e 1437 
note. 
"SEC. 5127. IMPLEMENTATION. 
"The Secretary shall issue regulations to implement this chapter 
within 180 days after the date of enactment of the Cranston-Gon-
zalez National Affordable Housing Act. 
"SEC. 5128. REPORTS. 
"The Secretary shall require grantees to provide periodic reports 
that include the obligation and expenditure of grant funds, the 
progress made by the grantee in implementing the plan described in 
section 5125(a), and any change in the incidence of drug-related 
crime in projects assisted under this chapter. 
"SEC. 5129. MONITORING. 
"The Secretary shall audit and monitor the programs funded 
under this chapter to ensure that assistance provided under this 
chapter is administered in accordance with the provisions of this 
chapter. 
"SEC. 5130. AUTHORIZATION OF APPROPRIATIONS. 
"(a) IN GENERAL.—There is authorized to be appropriated to carry 
out this chapter $160,000,000 for fiscal year 1991 and $166,900,000 
for fiscal year 1992. Any amount appropriated under this section 
shall remain available until expended. 
"(b) SET-ASIDE FOR ASSISTED HOUSING.—Of any amount made 
available in any fiscal year to carry out this chapter, not more than 
6.25 percent of such amount shall be available for grants for feder-
ally assisted, low-income housing.". 
(b) CONFORMING AMENDMENTS.—The table of contents for title V 
of Public Law 100-690 is amended by striking the items relating to 
chapter 2 and inserting the following new items: 
"CHAPTER 2—PUBUC AND ASSISTED HOUSING DRUG EUMINATION 
"Sec. 5121. Short title. 
"Sec. 5122. Congressional findings. 
"Sec. 5123. Authority to make grants. 
"Sec. 5124. Eligible activities. 
"Sec. 5125. Applications. 
"Sec. 5126. Definitions. 
"Sec. 5127. Implementation. 
"Sec. 5128. Reports. 
"Sec. 5129. Monitoring. 
"Sec. 5130. Authorization of appropriations.". 
SEC. 582. STUDY OF PRIVATE NONPROFIT INITIATIVES. 
(a) STUDY.—The Secretary of Housing and Urbem Development 
shall conduct a study to examine how private nonprofit initiatives to 
provide low-income housing development in local communities 
across the country have succeeded. The Secretary shall place 
particular emphasis on how Federal housing policy and tax struc-
tures can best promote local private nonprofit organizations involve-
ment in low-income housing development. The Secretary shall 
convene individuals, of his choosing, who have demonstrated an 
expertise in such private nonprofit initiatives from across the coun-
try and draw on their expertise in implementing such programs. 
The study shall include the results of, and suggestions by, such 
individuals. 
(b) REPORT.—The Secretary shall submit a report to the Ck)ngress 
regarding the findings of this study not later than 1 year after the 
date of the enactment of this Act. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4249 
SEC. 583. EXTENSION OF CAPITAL ASSESSMENT STUDY. 
Section 204(cXl) of the Department of Housing and Urban Devel-
opment Reform Act of 1989 (12 U.S.C. 1715z-la note) is amended by 
striking "Not later than one year after the date of enactment of this 
Act" and inserting "Not later than March 1,1992". 
TITLE VI—PRESERVATION OF 
AFFORDABLE RENTAL HOUSING 
Subtitle A—Prepayment of Mortgages Insured 
Under National Housing Act 
SEC. 601. PREPAYMENT OF MORTGAGES. 
(a) IN GENERAL.—Subtitles A and B of the Emergency Low Income 
Housing Preservation Act of 1987 (12 U.S.C. 1715/ note) are amend-
ed to read as follows: 
"Subtitle A—Short Title 
"SEC. 201. SHORT TITLE. 
"This title may be cited as the 'Low-Income Housing Preservation 
and Resident Homeownership Act of 1990'. 
"Subtitle B—Prepayment of Mortgages Insured 
Under National Housing Act 
"SEC. 211. GENERAL PREPAYMENT LIMITATION. 
"(a) PREPAYMENT AND TERMINATION.—An owner of eligible low-
income housing may prepay, and a mortgagee may accept prepay-
ment of, a mortgage on such housing only in accordance with a plan 
of action approved by the Secretary under this subtitle or in accord-
ance with section 224. An insurance contract with respect to eligible 
low-income housing may be terminated pursuant to section 229 of 
the National Housing Act only in accordance with a plan of action 
approved by the Secretary under this subtitle or in accordance with 
section 224. 
"(b) FORECLOSURE.—A mortgagee may foreclose the mortgage on, 
or acquire by deed in lieu of foreclosure, any eligible low-income 
housing project only if the mortgagee also conveys title to the 
project to the Secretary in connection with a claim for insurance 
benefits. 
"(c) EFFECT OF UNAUTHORIZED PREPAYMENT.—Any prepajonent of 
a mortgage on eligible low-income housing or termination of the 
mortgage insurance on such housing not in compliance with the 
provisions of this subtitle shall be null and void and any low-income 
affordability restrictions on the housing shall continue to apply to 
the housing. 
"SEC. 212. NOTICE OF INTENT. 
"(a) FiUNG WITH THE SECRETARY.—An owner of eligible low-
income housing that intends to terminate the low-income afford-
Low-Income 
Housing 
Preservation 
and Resident 
Homeownership 
Act of 1990. 
12 u s e 4101 
note. 
12 use 4101. 
12 use 4102. 
104 STAT. 4250 
PUBLIC LAW 101-625—NOV. 28, 1990 
ability restrictions through prepayment or voluntary termination in 
accordance with section 218, extend the low-income afFordability 
restrictions of the housing in accordance with section 219, or trans-
fer the housing to a qualified purchaser in accordance with section 
220, shall file with the Secretary a notice indicating such intent in 
the form and manner as the Secretary shall prescribe. 
"(b) FILING WITH THE STATE OR LOCAL GOVERNMENT, TENANTS, 
AND MORTGAGEE.—The owner, upon filing a notice of intent under 
this section, shall simultaneously file the notice of intent with the 
chief executive officer of the appropriate State or local government 
for the jurisdiction within which the housing is located and with the 
mortgagee, and shall inform the tenants of the housing of the filing. 
"(c) INELIGIBIUTY FOR FIUNG.—An owner shall not be eligible to 
file a notice of intent under this section if the mortgage covering the 
housing— 
"(1) falls into default on or after the date of the enactment of 
the Cranston-Gonzalez National Affordable Housing Act; or 
"(2XA) fell into default before, but is current as of, such date; 
and 
"(B) the owner does not agree to recompense the appropriate 
Insurance Fund, in the amount the Secretary determines appro-
priate, for any losses sustained by the Fund as a result of any 
work-out or other arrangement agreed to by the Secretary and 
the owner with respect to the defaulted mortgage. 
The Secretary shall carry out this subsection in a manner consistent 
with the provisions of section 203 of the Housing and Community 
Development Amendments of 1978. 
12 use 4103. 
"SEC. 213. APPRAISAL AND PRESERVATION VALUE OF ELIGIBLE LOW-
INCOME HOUSING. 
"(a) APPRAISAL.—Upon receiving notice of intent regarding an 
eligible low-income housing project indicating an intent to extend 
the low-income affordability restrictions under section 219 or trans-
fer the housing under section 220, the Secretary shall provide for 
determination of the preservation value of the housing, as follows: 
"(1) APPRAISERS.—The preservation value shall be determined 
by 2 independent appraisers, one of whom shall be selected by 
the Secretary and one of whom shall be selected by the owner. 
The appraisals shall be conducted not later than 4 months after 
filing the notice of intent under section 212, and the owner shall 
submit to the Secretary the appraisal made by the owner's 
selected appraiser not later than 90 days after receipt of the 
notice under paragraph (2). If the 2 appraisers fail to agree on 
the preservation value, and the Secretary and the owner also 
fail to agree on the preservation value, the Secretary and the 
owner shall jointly select and jointly compensate a third 
appraiser, whose appraisal shall be binding on the parties. 
"(2) NOTICE.—Not later than 30 days after the filing of a 
notice of intent to seek incentives under section 219 or trsmsfer 
the property under section 220, the Secretary shall provide 
written notice to the owner filing the notice of intent of— 
"(A) the need for the owner to acquire an appraisal of the 
property under paragraph (1); 
"(B) the rules and guidelines for such appraisals; 
"(C) the filing deadline for submission of the appraisal 
under paragraph (1); 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4251 
"(D) the need for an appraiser retained by the Secretary 
to inspect the housing and project financial records; and 
"(E) any delegation to the appropriate State agency by 
the Secretary of responsibilities regarding the appraisal. 
"(3) TiMEUNESS.—The Secretary may approve a plan of action 
to receive incentives under section 219 or 220 only based upon 
an appraisal conducted in accordance with this subsection that 
is not more than 30 months old. 
"(b) PRESERVATION VALUE.—For purposes of this subtitle, the 
preservation value of eligible low-income housing appraised under 
this section shall be— 
"(1) for purposes of extending the low-income affordability 
restrictions and receiving incentives under section 219, the fair 
market value of the property based on the highest and best use 
of the property as residential rental housing; and 
"(2) for purposes of transferring the property under section 
220 or 221, the fair market value of the housing based on the 
highest and best use of the property. 
"(c) GUIDELINES.—The Secretary shall provide written guidelines 
for appraisals of preservation value, which shall assume repajonent 
of the existing federally assisted mortgage, termination of the exist-
ing low-income affordability restrictions, and costs of compliance 
with any State or local laws of general applicability. The guidelines 
may permit reliance upon assessments of rehabilitation needs and 
other conversion costs determined by an appropriate State agency, 
as determined by the Secretary. The guidelines shall instruct the 
appraiser to use the greater of actual project operating expenses at 
the time of the appraisal (based on the average of the actual project 
operating expenses during the preceding 3 years) or projected 
operating expenses after conversion in determining preservation 
value. The guidelines established by the Secretary shall not be 
inconsistent with customary appraisal standards. The guidelines 
shall Eilso meet the following requirements: 
"(1) RESIDENTIAL RENTAL VALUE.—In the case of preservation 
value determined under subsection (bXD. the guidelines shall 
assume conversion of the housing to market-rate rental housing 
and shall establish methods for (A) determining rehabilitation 
expenditures that would be necessary to bring the housing up to 
quality standards required to attract and sustain a market rate 
tenancy upon conversion, and (B) assessing other costs that the 
owner could reasonably be expected to incur if the owner 
converted the property to market-rate multifamily rental 
housing. 
"(2) HIGHEST AND BEST USE VALUE.—In the case of preserva-
tion value determined under subsection (bX2), the guidelines 
shall assume conversion of the housing to highest and best use 
for the property and shall establish methods for (A) determining 
any rehabilitation expenditures that would be necessary to 
convert the housing to such use, and (B) assessing other costs 
that the owner could reasonably be expected to incur if the 
owner converted the property to its highest and best use. 
"SEC. 214. ANNUAL AUTHORIZED RETURN AND PRESERVATION RENTS. 12 USC 4104. 
"(a) ANNUAL AUTHORIZED RETURN.—Pursuant to an appraisal 
under section 213, the Secretary shall determine the annual au-
thorized return on the appraised housing, which shall be equal to 8 
39-194 O - 91 - 30 : QL 3 Part 5 
104 STAT. 4252 
PUBLIC LAW 101-625—NOV. 28, 1990 
percent of the preservation equity (as such term is defined in section 
229(8)). 
"(b) PRESERVATION RENTS.—The Secretary shall also determine 
the aggregate preservation rents under this subsection for each 
project appraised under section 213. The aggregate preservation 
rents shall be used solely for the purposes of comparison with 
Federal cost limits under section 215. Actual rents received by an 
owner (or a qualified purchaser) shall be determined pursuant to 
section 219, 220, or 221. The aggregate preservation rents shall be 
established as follows: 
"(1) 
EXTENSION OF AFFORDABILTTY UMITS.—The aggregate 
preservation rent for purposes of receiving incentives pursuant 
to extension of the low-income affordability restrictions under 
section 219 shall be the gross potential income for the project, 
determined by the Secretary, that would be required to support 
the following costs: 
"(A) The annual authorized return determined under 
subsection (a). 
"(B) Debt service on any rehabilitation loan for the hous-
ing. 
'(C) Debt service on the federally-assisted mortgage for 
the housing. 
"(D) Project operating expenses. 
"(E) Adequate reserves. 
"(2) SALE.—The aggregate preservation rent for purposes of 
receiving incentives pursuant to SEile under section 220 or 221 
shall be the gross income for the project determined by the 
Secretary, that would be required to support the following costs: 
"(A) Debt service on the loan for acquisition of the 
housing. 
"(B) Debt service on any rehabilitation loan for the 
housing. 
"(C) Debt service on the federally-assisted mortgage for 
the housing. 
"(D) Project operating expenses. 
"(E) Adequate reserves. 
12 use 4105. 
"SEC. 215. FEDERAL COST LIMITS AND LIMITATIONS ON PLANS OF 
ACTION. 
"(a) DETERMINATION OF RELATIONSHIP TO FEDERAL COST LIMITS.— 
"(1) INITIAL DETERMINATION.—For each eligible low-income 
housing project appraised under section 213(a), the Secretary 
shall determine whether the aggregate preservation rents for 
the project determined under paragraph (1) or (2) of section 
214(b) exceed the amount determined by multipljdng 120 per-
cent of the fair market rental (established under section 8(c) of 
the United States Housing Act of 1937) for the market area in 
which the housing is located by the number of dwelling units in 
the project (according to appropriate unit sizes). 
"(2) RELEVANT LOCAL MARKETS.—If the aggregate preservation 
rents for a project exceeds the amount determined under para-
graph (1), the Secretory shall determine whether such Eiggregate 
rents exceed the amount determined by multipljdng 120 percent 
of the prevailing rents in the relevant loc^ market area in 
which the housing is located by the number of units in the 
project (according to the appropriate unit sizes). A relevant local 
market area shedl be an area geographically smaller than a 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4253 
market area established by the Secretary under section 8(cXl) of 
the United States Act of 1937 that is identifiable as a distinct 
rental market area. The Secretary may rely on the appraisal to 
determine the relevant local market areeis and prevailing rents 
in such local areas and any other information the Secretary 
determines is appropriate. 
"(3) EFFECT.—For purposes of this subtitle, the aggregate 
preservation rents shall be considered to exceed the Federal cost 
limits under this subsection only if the aggregate preservation 
rents exceed the amount determined under paragraph (1) and 
the amount determined under parsigraph (2). 
"(b) LIMITATIONS ON ACTION PURSUANT TO FEDERAL COST LIMITS.— 
"(1) HOUSING WITHIN FEDERAL COST LIMITS.—If the aggregate 
preservation rents for an eligible low-income housing project do 
not exceed the Federal cost limit, the owner may not prepay the 
mortgage on the housing or terminate the insurance contract 
with respect to the housing, except as permitted under section 
224. The owner may— 
"(A) file a plan of action under section 217 to receive 
incentives under section 219; or 
"(B) file a second notice of intent under section 216(d) 
indicating an intention to transfer the housing under sec-
tion 220 and take actions pursuant to such section. 
"(2) HOUSING EXCEEDING FEDERAL COST UMITS.—If the aggre-
gate preservation rents for an eligible low-income housing 
project exceed the Federal cost limit, the owner may— 
"(A) file a plan of action under section 217 to receive 
incentives under section 219 if the owner agrees to accept 
incentives under such sections in an amount that shsill not 
exceed the Federal cost limit; 
"(B) file a second notice of intent under section 216(d) 
indicating £in intention to transfer the housing under sec-
tion 220 and take actions pursuant to such section if the 
owner agrees to transfer the housing at a price that shall 
not exceed the Federal cost limit; or 
"(C) file a second notice of intent under section 216(d) 
indicating an intention to prepay the mortgage or volun-
tarily terminate the insurance, subject to the mandatory 
sale provisions under section 221. 
"SEC. 216. INFORMATION FROM SECRETARY. 
12 USC 4106. 
"(a) 
INFORMATION TO 
OWNERS 
TERMINATING 
AFFORDABIUTY 
RESTRICTIONS.—The Secretary shall provide each owner who sub-
mits a notice of intent to terminate the low-income affordability 
restrictions on the housing under section 218 with information 
under this section not later than 6 months after receipt of the notice 
of intent. The information shall include a description of the criteria 
for such termination specified under section 218 and the documenta-
tion required to satisfy such criteria. 
"(b) INFORMATION TO OWNERS EXTENDING LOW-INCOME AFFORD-
ABILITY RESTRICTIONS.—The Secretary shall provide each owner who 
submits notice of intent to extend the low-income affordability 
restrictions on the housing under section 219 or transfer the housing 
under section 220 to a qualified purchaser with information under 
this subsection not later than 9 months after receipt of the notice of 
intent. The information shall include any information necessary for 
104 STAT. 4254 
PUBLIC LAW 101-625-NOV. 28, 1990 
the owner to prepare a plan of action under section 217, including 
the following: 
"(1) PRESERVATION VALUES.—A statement of the preservation 
value of the housing determined under paragraphs (1) and (2) of 
section 213(b). 
"(2) PRESERVATION RENT.—A statement of the preservation 
rent for the housing as calculated under section 214(b). 
"(3) FEDERAL COST UMITS.—A statement of the applicable 
Federal cost limits for the market area (or relevant local market 
area, if applicable) in which the housing is located, which shall 
explain the limitations under sections 219 and 220 of the 
amount of assistance that the Secretary may provide based on 
such cost limits. 
"(4) FEDERAL COST LIMIT ANALYSIS.—A statement of whether 
the aggregate preservation rents exceeds the Federal cost limits 
and a direction to the owner to file a plan of action under 
section 217 or submit a second notice of intent under section 
216(d), whichever is applicable. 
"(c) AVAILABILITY TO TENANTS.—The Secretary shall make any 
information provided to the owner under subsections (a) and (b) 
available to the tenants of the housing, together with other informa-
tion relating to the rights and opportunities of the tenants. 
"(d) SECOND NOTICE OF INTENT.— 
"(1) FiUNG.—Each owner of eligible low-income housing that 
elects to transfer housing under section 220 shall submit to the 
Secretary, in such form and manner as the Secretary prescribes, 
notice of intent to sell the housing under section 220. To be 
eligible to prepay the mortgage or voluntarily terminate the 
insurance contract on the mortgage, an owner of housing for 
which the preservation rents exceed the Federal cost limits 
under section 215(b) shall submit to the Secretary notice of such 
intent. The provisions of sections 221 and 223 shall apply to any 
owner submitting a notice under the preceding sentence. 
"(2) TIMING.—A second notice of intent under this subsection 
shall be submitted not later than 30 days after receipt of 
information from the Secretary under this section. If an owner 
fails to submit such notice within such period, the notice of 
intent submitted by the owner under section 212 shall be void 
and ineffective for purposes of this subtitle. 
12 use 4107. 
"SEC. 217. PLAN OF ACTION. 
"(a) SUBMISSION TO SECRETARY.— 
"(1) TIMING.—Not later than 6 months after receipt of the 
information from the Secretary under section 216 an owner 
seeking to terminate the low-income affordability restrictions 
through prepajrment of the mortgage or voluntary termination 
under section 218, or to extend the low-income affordability 
restriction on the housing under section 219, shall submit a plan 
of action to the Secretary in such form and manner as the 
Secretary shall prescribe. Any owner or purchaser seeking a 
transfer of the housing under section 220 or 221 shall submit a 
plan of action under this section to the Secretary upon accept-
ance of a bona fide offer under section 220 (b) or (c) or upon 
making of any bona fide offer under section 221. 
"(2) COPIES TO TENANTS.—Each owner submitting a plan of 
action under this section to the Secretary shall also submit a 
copy to the tenants of the housing. The owner shall simulta-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4255 
neously submit the plan of action to the office of the chief 
executive officer of the appropriate State or local government 
for the jurisdiction within which the housing is located. An 
appropriate agency of such State or local government shall 
review the plan and advise the tenants of the housing of any 
programs that are available to assist the tenants in carrying out 
the purposes of this title. 
"(3) FAILURE TO SUBMIT.—If the owner does not submit a plan 
of action to the Secretary within the 6-month period referred to 
in paragraph (1) (or the applicable longer period), the notice of 
intent shall be ineffective for purposes of this subtitle and the 
owner may not submit another notice of intent under section 
212 until 6 months after the expiration of such period. 
"(b) CONTENTS.— 
"(1) 
TERMINATION OF AFFORDABIUTY RESTRICTIONS.—If 
the 
plan of action proposes to terminate the low-income afford-
ability restrictions through prepayment or voluntary termi-
nation in accordance with section 218, the plan shall include— 
"(A) a description of any proposed changes in the status 
or terms of the mortgage or regulatory agreement; 
"(B) a description of any proposed changes in the low-
income affordability restrictions; 
"(C) a description of any chsinge in ownership that is 
related to prepayment or voluntary termination; 
"(D) an assessment of the effect of the proposed changes 
on existing tenants; 
"(E) an analysis of the effect of the proposed changes on 
the supply of housing affordable to low- and very low-
income families or persons in the community within which 
the housing is located and in the area that the housing 
could reasonably be expected to serve; and 
"(F) any other information that the Secretary determines 
is necessary to achieve the purposes of this title. 
"(2) EXTENSION OF AFFORDABILITY RESTRICTIONS.—If the plan of 
action proposes to extend the low-income affordability restric-
tions of the housing in accordance with section 219 or transfer 
the housing to a qualified purchaser in accordance with section 
220, the plan shall include— 
"(A) a description of any proposed changes in the status 
or terms of the mortgage or regulatory agreement; 
"(B) a description of the Federal incentives requested 
(including cash flow projections), and analyses of how the 
owner will address any physical or financial deficiencies 
and maintain the low-income affordability restrictions of 
the housing; 
"(C) a description of any assistance from State or local 
government agencies, including low-income housing tax 
credits, that have been offered to the owner or purchaser or 
for which the owner or purchaser has applied or intends to 
apply; 
(D) a description of any transfer of the property, includ-
ing the identity of the transferee and a copy of any docu-
ments of sale; and 
"(E) any other information that the Secretary determines 
is necessary to achieve the purposes of this title. 
"(c) REVISIONS.—An owner may from time to time revise and 
amend the plan of action as may be necessary to obtain approval of 
104 STAT. 4256 
PUBLIC LAW 101-625—NOV. 28, 1990 
the plan under this subtitle. The owner shall submit any revision to 
the Secretary and to the tenants of the housing, 
12 use 4108. 
"SEC. 218. PREPAYMENT AND VOLUNTARY TERMINATION. 
"(a) APPROVAL.—The Secretary may approve a plein of action that 
provides for termination of the low-income affordability restrictions 
through prepayment of the mortgage or voluntary termination of 
the mortgage insurance contract only upon a written finding that— 
"(1) implementation of the plan of action will not— 
"(A) materially increase economic hardship for current 
tenants, and will not in any event result in (i) a monthly 
rental payment by any current tensint that exceeds 30 
percent of the monthly adjusted income of the tenant or an 
increase in the monthly rental pajmient in any year that 
exceeds 10 percent (whichever is lower), or (ii) in the case of 
a current tenant who already pays more than such percent-
age, an increase in the monthly rental payment in any year 
that exceeds the increase in the Consumer Price Index or 10 
percent (whichever is lower); or 
"(B) involuntarily displace current tensints (except for 
good cause) where comparable and affordable housing is not 
readily available determined without regard to the avail-
ability of Federal housing assistance that would address 
any such hardship or involuntary displacement; and 
"(2) the supply of vacant, comparable housing is sufficient to 
ensure that such prepayment will not materially affect— 
"(A) the availability of decent, safe, and sanitary housing 
affordable to low-income and very low-income families or 
persons in the area that the housing could reasonably be 
expected to serve; 
(B) the ability of low-income and very low-income fami-
lies or persons to find affordable, decent, safe, and sanitary 
housing near employment opportunities; or 
"(C) the housing opportunities of minorities in the 
community within which the housing is located. 
"(b) DISAPPROVAL.—If the Secretary determines a plan of action to 
prepay a mortgage or terminate an insurance contract fails to meet 
the requirements of subsection (a), the Secretary shall disapprove 
the plan, the notice of intent filed under section 212 by such owner 
shall not be effective for purposes of this subtitle, and the owner 
may, in order to receive incentives under this subtitle, file a new 
notice of intent under such section. 
12 use 4109. 
"SEC, 219. INCENTIVES TO EXTEND LOW-INCOME USE. 
"(a) AGREEMENTS BY SECRETARY.—After approving a plan of action 
from an owner of eligible low-income housing that includes the 
owner's plan to extend the low-income affordability restrictions of 
the housing, the Secretary shall, subject to the availability of appro-
priations for such purpose, enter into such agreements as are nec-
essary to enable the owner to receive the einnual authorized return 
for the housing determined under section 214(a), pay debt service on 
the federally-assisted mortgage covering the housing, pay debt serv-
ice on any loan for rehabilitation of the housing, and meet project 
operating expenses and establish adequate reserves. The Secretary 
shall take into account the Federal cost limits under section 215(a) 
for the housing when providing incentives under subsections (b) (2) 
and (3) of this section. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4257 
"(b) PERMISSIBLE INCENTIVES.—Such agreements may include one 
or more of the following incentives: 
"(1) Increased access to residual receipts accounts. 
"(2) Subject to the availability of amounts provided in appro-
priations Acts— 
"(A) an increase in the rents permitted under an existing 
contract under section 8 of the United States Housing Act 
of 1937, or 
"(B) additional assistance under section 8 or an extension 
of any project-based assistance attached to the housing; and 
"(3) An increase in the rents on units occupied by current 
tenants as permitted under section 222. 
"(4) Financing of capital improvements under section 201 of 
the Housing and Community Development Amendments of 
1978. 
"(5) Financing of capital improvements through provision of 
insurance for a second mortgage under section 241 of the Na-
tional Housing Act. 
"(6) In the case of housing defined in section 229(lXA)(iii), 
redirection of the Interest Reduction Pajnnent subsidies to a 
second mortgage. 
"(7) Access by the owner to a portion of the preservation 
equity in the housing through provision of insurance for a 
second mortgage loan insured under section 241(f) of the Na-
tional Housing Act or a non-insured mortgage loan approved by 
the Secretary and the mortgagee. 
"(8) Other incentives authorized in law. 
With respect to any housing with a mortgage insured or otherwise 
assisted pursuant to section 236 of the National Housing Act, the 
provisions of subsections (f) and (g) of section 236 of such Act 
notwithstanding, the fair market rental charge for each unit in such 
housing may be increased in accordance with this subsection, but 
the owner shall pay to the Secretary all rental charges collected in 
excess of the basic rental charges, in an amount not greater than the 
fair market rental charges as such charges would have been estab-
lished under section 236(f) of such Act absent the requirements of 
this paragraph. 
"SEC. 220. INCENTIVES FOR TRANSFER TO QUALIFIED PURCHASERS. 
12 USC 4110. 
"(a) IN GENERAL.—With respect to any eligible low-income hous-
ing for which an owner has submitted a second notice of intent 
under section 216(d) to transfer the housing to a qualified purchaser, 
the owner shall offer the housing for transfer to qualified pur-
chasers as provided in this section. The Secretary shall issue regula- Regulations, 
tions describing the means by which potential qualified purchasers 
shall be notified of the availability of the housing for sale. The 
Secretary shall take into account the Federal cost limits under 
section 215(a) for the housing when providing incentives under 
section 219(b)(2) and (bX3) (pursuant to subsection (d)(3) of this 
section). 
"(b) RIGHT OF FIRST OFFER TO PRIORITY PURCHASERS.— 
"(1) NEGOTIATION PERIOD.—For the 12-month period beginning 
on the receipt by the Secretary of a second notice of intent 
under section 216(d) with respect to such housing, the owner 
may offer to sell and negotiate a sale of the housing only with 
priority purchasers. The negotiated sale price may not exceed 
the preservation value of the housing determined under section 
104 STAT. 4258 
PUBLIC LAW 101-625—NOV. 28, 1990 
213(bX2). The owner or the purchaser shall submit a plan of 
action under section 217 for any sale under this subsection, 
which shall include any request for assistance under this sec-
tion, upon the acceptance of any bona fide offer meeting the 
requirements of this paragraph. 
(2) EXPRESSION OF INTEREST.—During such period, priority 
purchasers may submit written notice to the Secretary stating 
their interest in acquiring the housing. Such notice shall be 
made in the form and include such information as the Secretary 
may prescribe. 
"(3) INFORMATION.—Within 30 days of receipt of an expression 
of interest by a priority purchaser, the Secretary shall provide 
such purchaser with information on the assistance available 
from the Federal Government to facilitate a transfer and the 
owner shall provide appropriate information on the housing, as 
determined by the Secretary. 
"(c) RIGHT OF REFUSAL FOR OTHER QUALIFIED PURCHASERS.—If no 
bona fide offer to purchase any eligible low-income housing subject 
to this section that meets the requirements of subsection (b) is made 
and accepted during the period under such subsection, during 
the 3-month period beginning upon the expiration of the 12-month 
period under subsection Ot)Xl), the owner of the housing may offer to 
sell and may sell the housing only to qualified purchasers. The 
negotiated sale price may not exceed the preservation value of the 
housing determined under section 2130^X2). The owner or purchaser 
shall submit a plan of action under section 217 for any sale under 
this subsection, which shall include any request for assistance under 
this section, upon the acceptance of any bona fide offer meeting the 
requirements of this paragraph. 
(d) ASSISTANCE.— 
"(1) APPROVAL.—If the qusdified purchaser is a resident coun-
cil, the Secretary may not approve a plan of action for assist-
ance under this section unless the council's proposed resident 
homeownership program meets the requirements under section 
226. For all other qualified purchasers, the Secretary may not 
approve the plan unless the Secretary finds that the criteria for 
approval under section 222 have been satisfied. 
(2) AMOUNT.—Subject to the availability of amounts ap-
proved in appropriations Acts, the Secretary shall, for approv-
able plans of action, provide assistance sufficient to enable 
qualified purchasers to— 
"(A) acquire the eligible low-income housing from the 
current owner for a purchgise price not greater th£in the 
preservation equity of the housing; 
"(B) pay the debt service on the federally-assisted mort-
gage covering the housing; 
"(C) pay the debt service on any loan for the rehabilita-
tion of the housing; 
"(D) meet project operating expenses and establish ade-
quate reserves for the housing; 
"(E) receive an adequate return (as determined by the 
Secretary) on any actual cash investment made to acquire 
the project; 
"(F) in the case of a priority purchaser, receive an ade-
quate reimbursement for transaction expenses relating to 
acquisition of the housing, subject to approval by the Sec-
retary; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4259 
"(G) in the case of an approved resident homeownership 
program, cover the costs of training for the resident council, 
homeownership counseling and training, the fees for the 
nonprofit entity or public agency working with the resident 
council and costs related to relocation of tenants who elect 
to move. 
"(3) INCENTIVES.— 
"(A) IN GENERAL.—For all qualified purchasers of housing 
under this subsection, the Secretary may provide assistance for 
an approved plan of action in the form of 1 or more of the 
incentives authorized under section 219(b), except that any 
residual receipts for the housing trsinsfered to the selling owner 
shall be deducted from the sale price of the housing under 
subsection (b) or (c) and the incentive under such section 
219(bX7) may include £ui acquisition loan under section 241(f) of 
the National Housing Act. 
"(B) PRIORITY PURCHASERS.—Where the qualified purchaser is 
^ 
a priority purchaser, the Secretary may provide assistance for 
an approved plan of action (in the form of a grant) for each unit 
in the housing in an amount, as determined by the Secretary, 
that does not exceed the present value of the total of the 
projected published fair mairket rentals for existing housing 
(established by the Secretary under section 8(c) of the United 
States Housing Act of 1937) for the next 10 years (or such longer 
period if additional assistance is necessary to cover the costs 
referred to in paragraph (2)). 
"SEC. 221. MANDATORY SALE FOR HOUSING EXCEEDING FEDERAL COST 12 USC 4111. 
LIMITS. 
"(a) IN GENERAL.—With respect to any eligible low-income hous-
ing for which the aggregate preservation rents determined under 
section 214(b) exceed the Federal cost limit, the owner shall offer the 
housing for sale to qualified purchasers as provided in this section. 
"(b) RIGHT OF FIRST REFUSAL TO PRIORITY PURCHASERS.— 
"(1) DURATION AND REQUIRED SALE.—For the 12-month period 
beginning upon the receipt by the Secretary of the second notice 
of intent under section 216(d) with respect to such housing, the 
owner of the housing may offer to sell and may sell the housing 
only to priority purchasers. If, during such period, a priority 
purchaser makes a bona fide offer to purchase the housing for a 
sale price not less than the preservation value of the housing 
determined under section 213(b)(2), the Secretary shall require 
the owner to sell the housing pursuant to such offer. 
"(2) EXPRESSION OF INTEREST.—During the period under para-
graph (1), priority purchasers shall have the opportunity to 
submit written notice to the owner and the Secretary stating 
their interest in acquiring the housing. Such written notice 
shall be in such form and include such information as the 
Secretary may prescribe. 
"(3) INFORMATION FROM SECRETARY.—Not later than 30 days 
after receipt of any notice under paragraph (2), the Secretary 
shall provide such purchaser with information on the assist£mce 
available from the Federal Grovemment to facilitate a transfer 
and the owner shall provide such purchaser with appropriate 
information on the housing, as determined by the Secretary. 
"(c) RIGHT OF REFUSAL FOR OTHER QUALIFIED PURCHASERS.—If no 
bona fide offer to purchase any eligible low-income housing subject 
104 STAT. 4260 
PUBLIC LAW 101-625—NOV. 28, 1990 
to this section that meets the requirements of subsection 0?) is made 
during the period under such subsection, during the 3-month period 
beginning upon the expiration of the 12-month period under subsec-
tion (bXl), the owner of the housing may offer to sell and may sell 
the housing only to qualified purchasers. If, during such period, a 
quEdified purchaser makes a bona fide offer to purchase the housing 
for a sale price not less that the preservation value of the housing 
determined under section 213(bX2), the Secretary shall require the 
owner to sell the housing pursuant to such offer. 
"(d) ASSISTANCE.— 
"(1) FEDERAL COST UMIT.—Subject to the availability of 
amounts approved in appropriations Acts, the Secretary shall, 
for approvable plans of action, provide to qualified purchasers 
assistance under section 8 of the United States Housing Act of 
1937 sufficient to produce a gross income potential equal to the 
amount determined by multiplying 120 percent of the prevail-
ing rents in the relevant local market area in which the housing 
is located by the number of units in the project (according to 
appropriate unit sizes), and any other incentives authorized 
under section 219(b) that would have been provided to a quali-
fied purchaser under section 220. 
"(2) ADDITIONAL ASSISTANCE.—From amounts made available 
under section 234(b), the Secretary may make grants to assist in 
the completion of sales and transfers under this section to smy 
qualified purchasers. Any grant under this paragraph shall be 
in an amount not exceeding the difference between the 
preservation value for the housing (determined under section 
213(bX2)) and the level of gissistance under paragraph (1) of this 
subsection. 
"(3) SECURING STATE AND LOCAL FUNDING.—The Secretary 
shall assist any qualified purchaser of such housing in securing 
funding and other assistance (including tax and assessment 
reductions) from State emd local governments to facilitate a sale 
under this section. 
12 use 4112. 
"SEC. 222. CRITERIA FOR APPROVAL OF PLAN OF ACTION INVOLVING 
INCENTIVES. 
"(a) IN GENERAL.—The Secretary may approve a plan of action for 
extension of the low-income affordability restrictions on any eligible 
low-income housing or transfer the housing to a qualified purchaser 
(other than a resident council) only upon finding that— 
"(1) due diligence has been given to ensuring that the package 
of incentives is, for the Federal Government, the least costly 
alternative that is consistent with the full achievement of the 
purposes of this title; 
"(2) binding commitments have been made to ensure that— 
"(A) the housing will be retained as housing affordable 
for very low-income families or persons, low income fami-
lies or persons, and moderate-income families or persons for 
the remaining useful life of such housing (as determined 
under subsection (c)); 
"(B) throughout such period, adequate expenditures will 
be made for maintenance and operation of the housing and 
that the project meets housing standards established by the 
Secretary under subsection (d), as determined by inspec-
tions conducted under such subsection by the Secretary; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4261 
"(C) current tenants will not be involuntarily displaced 
(except for good cause); 
"(D) any increase in rent contributions for current ten-
ants will be to a level that does not exceed 30 percent of the 
adjusted income of the tenant or the published existing fair 
market rent for comparable housing established under sec-
tion 8(c) of the United States Housing Act of 1937, which-
ever is lower, except that the rent contributions of any 
tenants occupying the housing at the time of any increase 
may not be reduced by reason of this subparagraph (except 
with respect to tenants receiving section 8 assistance in 
accordance with subparagraph (EXii) of this paragraph); 
"(E)(i) any resulting increase in rents for current tenants 
(except for increases made necessary by incresised operating 
costs)— 
"(I) shall be phased in equally over a period of not 
less than 3 years, if such increase is 30 percent or more; 
and 
"(II) shall be limited to not more than 10 percent per 
year if such increase is more than 10 percent but less 
than 30 percent; and 
"(ii) assistance under section 8 of the United States Hous-
ing Act of 1937 shall be provided, to the extent available 
under appropriation Acts, if necessary to mitigate any 
adverse effect on current income-eligible very low- and low-
income tenants; and 
"(F)(i) rents for units becoming available to new tenants 
shall be at levels approved by the Secretary that will 
ensure, to the extent practicable, that the units will be 
available and affordable to the same proportions of very 
low-income families or persons, low-income families or per-
sons, and moderate-income families or persons (including 
families or persons whose incomes are 95 percent or more of 
area median income) as resided in the housing as of Janu-
ary 1, 1987 (based on the area median income limits estab-
lished by the Secretary in February 1987), or the date the 
plan of action is approved, whichever date results in the 
highest proportion of very low-income families, except that 
this limitation shall not prohibit a higher proportion of 
very low-income families from occupying the housing; and 
"(ii) in approving rents under this paragraph, the Sec-
retary shall take into account any additional incentives 
provided under this subtitle; 
"(G) future rent adjustments shall be— 
"(i) made by appl3dng an annual factor (to be deter-
mined by the Secretary) to the portion of rent attrib-
utable to operating expenses for the housing and by 
making changes in the annual authorized return under 
section 214; and 
"(ii) subject to a procedure, established by the Sec-
retary, for owners to apply for rent increases not ade-
quately compensated by annual adjustment under 
clause (i), under which the Secretary may increase 
rents in excess of the amount determined under clause 
(i) only if the Secretary determines such increases are 
necessary to reflect extraordinary necessary expenses 
of owning and maintaining the housing; and 
104 STAT. 4262 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(H) any savings from reductions in operating ex-
penses due to mansigement efficiencies shall be depos-
ited in project reserves for replacement and the owner 
shall have periodic access to such reserves, to the 
extent the Secretary determines that the level of re-
serves is adequate and that the housing is maintained 
in accordance with the standards established under 
section 222(d); and 
"(3) no incentives under section 219 (other than to purchasers 
under section 220) may be provided until the Secretary deter-
mines the project meets housing standards under subsection (d), 
except that incentives under such section and other incentives 
designed to correct deficiencies in the project may be provided. 
"(b) IMPLEMENTATION.—Any agreement to maintain the low-
income affordability restrictions for the remaining useful life of the 
housing may be made through execution of a new regulatory agree-
ment, modifications to the existing regulatory agreement or mort-
gage, or, in the case of the prepayment of a mortgage or voluntary 
termination of mortgage insurance, a recorded instrument. 
"(c) DETERMINATION OF REMAINING USEFUL LIFE.— 
"(1) DEFINITION.—For purposes of this title, the term 'remain-
ing useful life' means, with respect to eligible low-income hous-
ing, the period during which the physical characteristics of the 
housing remain in a condition suitable for occupancy, assuming 
normal maintensince and repairs are made and major systems 
and capital components are replaced as becomes necessary. 
"(2) STANDARDS.—The Secretary shall, by rule under section 
553 of title 5, United States (Dode, establish standards for deter-
mining when the useful life of an eligible low-income housing 
project has expired. The determination shall be made on the 
record after opportunity for an hearing. 
"(3) OWNER PETITION.—The Secretary shall establish a proce-
dure under which owners of eligible low-income housing may 
petition the Secretary for a determination that the useful life of 
such housing has expired. The procedure shall not permit such 
a petition before the expiration of the 50-year period beginning 
upon the approval of a plan of action under this subtitle with 
respect to such housing. In making a determination pursuant to 
a petition under this paragraph, the Secretary shall presume 
that the useful life of the housing has not expired, and the 
owner shall have the burden of proof in establishing such 
expiration. The Secretory may not determine that the useful 
life of any housing has expired if such determination results 
primarily from failure to make regular and reasonable repairs 
and replacement, as became necessary. 
"(4) 
TENANT AND COMMUNITY COMMENT AND APPEAL.—In 
making a determination regarding the useful life of any housing 
pursuant to a petition submitted under paragraph (3), the Sec-
retory shall provide for comment by tenants of the housing and 
interested persons £ind organizations with respect to the peti-
tion. The Secretory shall also provide the tenants and interested 
persons and organizations with an opportunity to appeal a 
determination under this subsection. 
"(d) HOUSING STANDARDS.— 
Regulations. 
"(1) EsTABusHMENT AND INSPECTION.—The Secretory shall, by 
regulation, estoblish standards regarding the physical condition 
in which any eligible low income housing project receiving 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4263 
incentives under this subtitle shall be maintained. The Sec-
retary shall inspect each such project not less than annually to 
ensure that the project is in compliance with such standards. 
"(2) SANCTIONS.— 
"(A) IN GENERAL.—The Secretary shall take any action 
appropriate to require the owner of any housing not in 
compliance with such standards to bring such housing into 
compliance with the standards, including— 
"(i) directing the mortgagee, with respect to an 
equity take-out loan under section 241(f) of the 
National Housing Act, to withhold the disbursement to 
the owner of any escrowed loan proceeds and requiring 
that such proceeds be used for repair of the housing; 
and 
"(ii) reduce the amount of the annual authorized 
return, as determined by the Secretary, for the period 
ending upon a determination by the Secretary that the 
project is in compliance with the standards and requir-
ing that such amounts be used for repair. 
"(B) 
CONTINUED 
COMPLIANCE.—To ensure 
continued 
compliance with the standards for a project subject to any 
action under subparagraph (A), the Secretary may also 
limit access of the owner to such amounts and use of such 
amounts for not more than the 2-year period beginning 
upon the determination that project is in compliance with 
the standards. 
"(C) REMOVAL OF ASSISTANCE.—If, upon inspection, the 
Secretary determines that any eligible low income housing 
project has failed to comply with the standards established 
under this subsection for 2 consecutive years, the Secretary 
may take 1 or more of the following actions: 
"(i) Subject to availability of amounts provided in 
appropriations Acts, provide assistance under sections 
8(b) and 8(o) of the United States Housing Act of 1937 
(other than project-based assistance attached to the 
housing) for any tenant eligible for such assistance who 
desires to terminate occupancy in the housing. For 
each unit in the housing vacated pursuant to the provi-
sion of assistance under this clause, the Secretary may, 
notwithstanding any other law or contract for assist-
ance, cancel the provision of project-based assistance 
attached to the housing for 1 dwelling unit, if the 
housing is receiving such assistance. 
"(ii) In the case of housing for which an equity take-
out loan has been made under section 241(f) of the 
National Housing Act, declare such loan to be default 
and accelerate the maturity date of the loan. 
"(iii) Declare any rehabilitation loan insured or pro-
vided by the Secretary (with respect to the housing) to 
be in default and accelerate the maturity date of the 
loan. 
"(iv) Suspend payments under or terminate any con-
tract for project-based rental assistance under section 8 
of the United States Housing Act of 1937. 
"(v) Take any other action authorized by law or the 
project regulatory agreement to ensure that the hous-
104 STAT. 4264 
PUBLIC LAW 101-625—NOV. 28, 1990 
ing will be brought into compliance with the standards 
established under this subsection. 
"(e) WINDFALL PROFITS.—The Secretary shall submit a report to 
the Congress not later than 90 days after the enactment of the 
Cranston-Gonzalez National Affordable Housing Act, evaluating the 
availability, quality, and reliability of data to measure the acces-
sibility of decent, affordable housing in all areas where properties 
are eligible to submit a notice of intent to prepay under section 212. 
To prevent pajnnent of windfall profits, the Secretary may make 
available incentive pajmients under section 219 or 220 only to 
owners in those rental markets where there is an inadequate supply 
of decent, affordable housing, if the Secretary determines that 
adequate data can be obtained to permit objective and fair im-
plementation or where necessary to accomplish the other public 
policy objectives under this subtitle. The Secretary shall implement 
this subsection in a manner consistent with the process established 
by this subtitle. 
12 use 4113. 
"SEC. 223. ASSISTANCE FOR DISPLACED TENANTS. 
"(a) SECTION 8 ASSISTANCE.—Each low-income family that is dis-
placed as a result of the prepajmient of the mortgage or voluntary 
termination of an insurance contract on eligible low income housing 
shall, subject to the availability or amounts provided under appro-
priations Acts, receive assistance under the certificate and voucher 
programs under sections 803) and 8(o) of the United States Housing 
Act of 1937. To the extent sufficient amounts are made available 
under appropriations Acts, in each fiscal year the Secretary shall 
reserve from amounts made available under section 234(a) of this 
Act or, if necessary, under section 5(c) of the United States Housing 
Act of 1937, such amounts as the Secretary determines are nec-
essary to provide assistance pajonents for low-income families dis-
placed during the fiscal year. 
"(b) RELOCATION ASSISTANCE.—The Secretary shall coordinate 
with public housing agencies to ensure that any very low- or low-
income family displaced from eligible low-income housing £is the 
result of the prepajnnent of the mortgage (or termination of the 
mortgage insurance contract) on such housing is able to acquire a 
suitable, affordable dwelling unit in the area of the housing from 
which the family is displaced. The Secretary shall require the owner 
of such housing to pay 50 percent of the moving expenses of each 
family relocated, except that such percentage shall be increased to 
the extent that State or local law of general applicability requires a 
higher payment by the owner, 
(c) CONTINUED OCCUPANCY.— 
"(1) IN GENERAL.—Each owner that prepays the mortgage (or 
terminates the mortgage insurance contract) on eligible low-
income housing shall, as provided in paragraph (3), allow the 
tenants occupying units in such housing on the date of the 
submission of notice of intent under section 212 to remain in the 
housing for a period of 3 years, at rent levels (except for 
increases necessary for increased operating costs) existing at the 
time of prepayment. 
"(2) PROVISION OF ASSISTANCE BY OWNER.—In any case in 
which the Secretary requires an owner to allow tenants to 
occupy units under paragraph (1), an owner may fulfill the 
requirements of such paragraph by providing such assistance 
necessary for the tenant to rent a decent, safe, and sanitary unit 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4265 
in another project for the same period and at a rental cost to the 
tenant not in excess of the rental amount the tenant would have 
been required to pay in the housing of the owner, except that 
the tenant must freely agree to waive the right to occupy the 
unit in the owner's housing. 
"(3) APPLICABILITY TO LOW-VACANCY AREAS AND SPECIAL NEEDS 
TENANTS.—The provisions of this subsection shall apply only 
to— 
"(A) eligible low income housing located in a low-vacancy 
area (as such term is defined by the Secretary); and 
"(B) tenants in any eligible low-income housing in any 
area who have special needs restricting their ability to 
relocate (including elderly tenants and tenants with disabil-
ities), as determined under regulations established by the 
Secretary. 
"(d) REQUIRED ACCEPTANCE OF SECTION 8 ASSISTANCE.—An owner 
who prepays the mortgage (or terminates the mortgage insurance 
contract) on eligible low-income housing and maintains the housing 
for residential rental occupancy may not refuse to rent, refuse to 
negotiate for the rental of, or otherwise make unavailable or deny 
the rent of a dwelling unit in such property to any person, or 
discriminate against any person in the terms, conditions, or privi-
leges of rental of a dwelling (or in the provision of services or 
facilities in connection therewith), because the person receives 
assistance under section 8 of United States Housing Act of 1937. 
"(e) REGIONAL POOLS.—In providing assistance under this section, 
the Secretary shall allocate the assistance on a regional basis 
through the regional offices of the Department of Housing and 
Urban Development. The Secretary shall allocate assistance under 
this section in a manner so that the total number of assisted units in 
each such region available for occupancy by, and affordable to, lower 
income families and persons does not decrease because of the 
prepayment or payment of a mortgage on eligible low-income hous-
ing or the termination of an insurance contract on such 
housing. 
"SEC. 224. PERMISSIBLE PREPAYMENT OR VOLUNTARY TERMINATION 12 USC 4114. 
AND MODIFICATION OF COMMITMENTS. 
"(a) IN GENERAL.—Notwithstanding any limitations on prepay-
ment or voluntary termination under this subtitle, an owner may 
terminate the low-income affordability restrictions through prepay-
ment or voluntary termination, subject to compliance with the 
provisions of section 223, under one of the following circumstances: 
"(1)(A) The Secretary approves a plan of action under section 
219(a), but does not provide the assistance approved in such plan 
during the 15-month period beginning on the date of approval. 
"(B) After the date that the housing would have been eligible 
for prepa3mient pursuant to the terms of the mortgage (notwith-
standing this subtitle), the Secretary approves a plan of action 
under section 220 or 221, but does not provide the assistance 
approved in such plan before the earlier of (i) the expiration 
of the 2-month period beginning on the commencement of the 
1st fiscal year beginning after such approval, or (ii) the expira-
tion of the 6-month period beginning on the date of approval. 
"(C) The Secretary approves a plan of action under section 220 
or 221 for any eligible low-income housing not covered by 
subparagraph (B), but does not provide the assistance approved 
104 STAT. 4266 
PUBLIC LAW 101-625—NOV. 28, 1990 
in such plan before the earlier of (i) the expiration of the 
2-month period beginning on the commencement of the 1st 
fiscal year beginning after such approval, or (ii) the expiration 
of the 9-month period beginning on the date of approval. 
"(2) An owner who intended to transfer the housing to a 
qualified purchaser under section 220 or 221, and fully complied 
with the provisions of such section, did not receive any bona fide 
offers from any qualified purchasers within the applicable time 
periods. 
In the event that the purchaser under the plan of action is unable to 
consummate the purchase for reasons other than the failure of the 
Secretary to provide incentives, an owner may terminate the low-
income affordability restrictions through prepayment or voluntary 
termination subject to the provisions of sections 220 and 221. 
"(b) SECTION 8 RENTAL ASSISTANCE.—When providing rental 
assistance under section 8, the Secretary may enter into a contract 
with an owner, contingent upon the future availability of appropria-
tions for the purpose of renewing expiring contracts for rental 
assistance as provided in appropriations Acts, to extend the term of 
such rental assistance for such additional period or periods nec-
essary to carry out an approved plan of action. The contract and the 
approved plan of action shall provide that, if the Secretary is unable 
to extend the term of such rental assistance or is unable to develop a 
revised package of incentives providing benefits to the owner com-
parable to those received under the original approved plan of action, 
the Secretary, upon the request of the owner, shall take the follow-
ing actions (subject to the limitations under the 
following 
paragraphs): 
"(1) 
MODIFICATION OF COMMITMENTS.—Modify the 
binding 
commitments made pursuant to section 222(a)(2) that are 
dependent on such rental assistance. 
"(2) TERMINATION OF PLAN OF ACTION.—Permit the owner to 
prepay the mortgage and terminate the plan of action and any 
implementing use agreements or restrictions, but only if the 
owner gigrees in writing to comply with provisions of section 
223. 
At least 30 days before making a request under this subsection, an 
owner shall notify the Secretary of the owner's intention to submit 
the request. The Secretary shall have a period of 90 days following 
receipt of such notice to take action to extend the rental assistance 
contract and to continue the binding commitments under section 
222(a)(2). 
12 use 4115. 
"SEC. 225. TIMETABLE FOR APPROVAL OF PLAN OF ACTION. 
"(a) NOTIFICATION OF DEFICIENCIES.—Not later than 60 days after 
receipt of a plan of action, the Secretary shall notify the owner in 
writing of any deficiencies that prevent the plan of action from 
being approved. If deficiencies are found, such notice shall describe 
alternative ways in which the plan may be revised to meet the 
criteria for approval. 
"(b) NOTIFICATION OF APPROVAL.— 
"(1) IN GENERAL.—Not later than 180 days after receipt of a 
plan of action, or such longer period as the owner requests, the 
Secretary shall notify the owner in writing whether the plan of 
action, including any revisions, is approved. If approval is with-
held, the notice shall describe— 
"(A) the reasons for withholding approval; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4267 
"(B) the actions that could be taken to meet the criteria 
for approval. 
"(2) OPPORTUNITY TO REVISE.—The Secretary shall subse-
quently give the owner a reasonable opportunity to revise the 
plan of action and seek approval. 
"(c) DELAYED APPROVAL.—If the Secretary does not approve a plan 
of action within the period under subsection (b), the Secretary shall 
provide incentives and assistance under this subtitle in the amount 
that the owner would have received if the Secretary had complied 
with such time limitations. The preceding sentence shall not apply if 
the plan of action was not approved because of deficiencies. An 
owner may bring an action in the appropriate Federal district court 
to enforce this subsection. 
"SEC. 226. RESIDENT HOMEOWNERSHIP PROGRAM. 
12 USC 4116. 
"(a) FORMATION OF RESIDENT COUNCIL.—Tenants seeking to pur-
chase eligible low-income housing in accordance with section 220 
shall organize a resident council for the purpose of developing a 
resident homeownership program in accordance with standards 
established by the Secretary. The resident council shall work with a 
public or private nonprofit organization or a public body (including 
an agency or instrumentality thereof). Such organization or public 
body shall have experience to enable it to help the tenants consider 
their options and to develop the capacity necessary to own and 
manage the housing, where appropriate, and shall be approved by 
the Secretary. 
"(b) OTHER PROGRAM REQUIREMENTS AND LIMITATIONS.— 
"(1) SALES TO RESIDENTS.—As a condition of approval of a plan 
of action involving homeownership program under this subtitle, 
the resident council shall prepare a workable plan acceptable to 
the Secretary for giving all residents an opportunity to become 
owners, which plan shall identify— 
"(A) the price at which the resident council intends to 
transfer ownership interests in, or shares representing, 
units in the housing; 
"(B) the factors that will influence the establishment of 
such price; 
"(C) how such price compares to the estimated appraised 
value of the ownership interests or shares; 
"(D) the underwriting standard the resident council plans 
to use (or reasonably expects a public or private lender to 
use) for potential tenant purchasers; 
"(E) the financing arrangements the tenants are expected 
to pursue or be provided; and 
"(F) a workable schedule of sale (subject to the limitations 
of paragraph (8)) beised on estimated tenant incomes. 
"(2) APPROVAL OF METHOD OF CONVERSION.—The Secretary 
shall approve the method for converting the housing to 
homeownership, which may involve acquisition of ownership 
interests in, or shares representing, the units in a project under 
any arrangement determined by the Secretary to be appro-
priate, such as cooperative ownership (including limited equity 
cooperative ownership) and fee simple ownership (including 
condominium ownership). 
"(3) REQUIRED CONDITIONS.—The Secretary shall require that 
the form of homeownership impose appropriate conditions, 
including conditions to assure that— 
104 STAT. 4268 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(A) the number of initial owners that are very low-
income, lower income, or moderate-income persons at ini-
tial occupancy meet standards required or approved by the 
Secretary; 
"(B) occupancy charges payable by the owners meet 
requirements established by the Secretary; 
"(C) the aggregate incomes of initial and subsequent 
owners and other sources of funds for the project are suffi-
cient to permit occupancy charges to cover the full operat-
ing costs of the housing and any debt service; and 
"(D) each initial owner occupies the unit it acquires. 
"(4) USE OF PROCEEDS FROM SALES TO ELIGIBLE FAMIUES.—The 
entity that transfers ownership interests in, or shares rep-
resenting, units to eligible families, or another entity specified 
in the approved application, may use 50 percent of the proceeds, 
if any, from the initial saile for costs of the homeownership 
program, including improvements to the project, operating and 
replacement reserves for the project, additional homeownership 
opportunities in the project, and other project-related activities 
approved by the Secretary. The remaining 50 percent of such 
proceeds shall be returned to the Secretary for use under 
section 220, subject to availability under appropriations Acts. 
Such entity shall keep, and make available to the Secretary, all 
records necessary to calculate accurately payments due the 
Secretary under this paragraph. 
"(5) RESTRICTIONS ON RESALE BY HOMEOWNERS.— 
"(A) IN GENERAL.— 
"(i) TRANSFER PERMITTED.—A homeowner under a 
homeownership program may transfer the home-
owner's ownership interest in, or shares representing, 
the unit, except that a homeownership program may 
establish restrictions on the resale of units under the 
program. 
"(ii) RIGHT TO PURCHASE.—Where a resident manage-
ment corporation, resident council, or cooperative has 
jurisdiction over the unit, the corporation, council, or 
cooperative shall have the right to purchase the owner-
ship interest in, or shares representing, the unit from 
the homeowner for the amount specified in a firm 
contract between the homeowner and a prospective 
buyer. 
"(iii) PROMISSORY NOTE REQUIRED.—The homeowner 
shall execute a promissory note equal to the difference, 
if any, between the market value and the purchase 
price, payable to the Secretary, together with a mort-
gage securing the obligation of the note. 
"(B) 6 YEARS O
R LESS.—In the case of a transfer within 6 
years of the acquisition 
under the program, the 
homeownership program shall provide for appropriate 
restrictions to assure that an eligible family may not re-
ceive any undue profit. The plan shall provide for limiting 
the family's consideration for its interest in the property to 
the total of— 
"(i) the contribution to equity paid by the family; 
"(ii) the value, as determined by such means as the 
Secretary shall determine through regulation, of any 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4269 
improvements installed at the expense of the family 
during the family's tenure as owner; and 
"(iii) the appreciated value determined by an infla-
tion allowance at a rate which may be based on a cost-
of-living index, an income index, or market index as 
determined by the Secretary through regulation and 
agreed to by the purchaser and the entity that trans-
fers ownership interests in, or shares representing, 
units to eligible families (or another entity specified in 
the approved application), at the time of initial sale, 
and applied against the contribution to equity. 
Such an entity may, at the time of initial sale, enter into an 
agreement with the family to set a meiximum amount 
which this appreciation may not exceed. 
"(C) 6-20 YEARS.—In the case of a transfer during the 
period beginning 6 years after the acquisition and ending 20 
years after the acquisition, the homeownership program 
shall provide for the recapture by the Secretary or the 
program of an amount equal to the amount of the declining 
balance on the note described in subparagraph (A)(iii). 
"(D) USE OF RECAPTURED FUNDS.—Any net sales proceeds 
that may not be retained by the homeowner under the plan 
approved pursuant to this paragraph shall be paid to the 
HOME Investment Trust Fund for the unit of general local 
government in which the housing is located. If the housing 
is located in a unit of general local government that is not a 
participating jurisdiction (as such term is defined in section 
104 of the Cranston-Gonzalez National Affordable Housing 
Act), any such net sales proceeds shall be paid to the HOME 
Investment Trust Fund for the State in which the housing 
is located. With respect to any proceeds transferred to a 
HOME Investment Trust Fund under this subparagraph, 
the Secretary shall take such actions as are necessary to 
ensure that the proceeds shall be immediately available for 
eligible activities to expand the supply of affordable hous-
ing under section 212 of the Cranston-Gonzalez National 
Affordable Housing Act. The Secretary shall require the 
maintenance of any records necessary to calculate ac-
curately pa3nnents due under this paragraph. 
"(6) PROTECTION OF NONPURCHASING FAMIUES.— 
"(A) EVICTION.—No tenant residing in a dwelling unit in 
a property on the date the Secretary approves a plan of 
action may be evicted by reason of a homeownership pro-
gram approved under this subtitle. 
"(B) RENTAL ASSISTANCE.—If a tenant decides not to pur-
chase a unit, or is not qualified to do so, the Secretary shall 
ensure that rental assistance under section 8 is available 
for use by each otherwise qualified tenant (that meets the 
eligibility requirements under such section) in that or an-
other property. The requirement for giving preference to 
certain categories of eligible families under sections 
8(d)(lXA) and 8(oX3) of the United States Housing Act of 
1937 shall not apply to the provision of assistance to such 
families. 
"(C) RELOCATION ASSISTANCE.—The resident council shall 
also inform each such tenant that if the tenant chooses to 
104 STAT. 4270 
PUBLIC LAW 101-625—NOV. 28, 1990 
move, the owner will pay relocation assistance in accord-
ance with the approved homeownership program. 
"(7) QuAUFiED MANAGEMENT.—As a Condition of approval of a 
homeownership program under this subtitle, the resident coun-
cil shall have demonstrated its abilities to manage eligible 
properties by having done so effectively and efficiently for a 
period of not less than 3 years or by entering into a contract 
with a qualified management entity that meets such standards 
as the Secretary may prescribe to ensure that the property will 
be maintained in a decent, safe, and sanitary condition. 
"(8) TIMELY HOMEOWNERSHIP.—Resident councils shall trans-
fer ownership of the property to tenants within a specified 
period of time that the Secretary determines to be reasonable. 
During the interim period when the property continues to be 
operated and managed as rental housing, the resident council 
shall utilize written tenant selection policies and criteria that 
are approved by the Secretary as consistent with the purpose of 
providing housing for very low-income families. The resident 
council shall promptly notify in writing any rejected applicant 
of the grounds for any rejection. 
"(9) RECORDS AND AUDIT OF RESIDENT COUNCILS.— 
"(A) MAINTENANCE.—Each resident council shall keep 
such records as may be reasonably necessary to fully dis-
close the amount and the disposition by such resident 
council of the proceeds of assistance received under this 
subtitle (including any proceeds from sales under para-
graphs (4) and (5)(D)), the total cost of the homeownership 
program in connection with which such assistance is given 
or used, and the amount and nature of that portion of the 
program supplied by other sources, and such other sources 
as will facilitate an effective audit. 
"(B) ACCESS.—The Secretary shall have access for the 
purpose of audit and examination to any books, documents, 
papers, and records of the resident council that are perti-
( 
nent to assistance received under this subtitle. 
"(C) AUDIT.—The Comptroller General of the United 
States, or any of the duly authorized representatives of the 
Comptroller General, shall also have access for the purpose 
of audit and examination to any books, documents, papers, 
and records of the resident council that are pertinent to 
assistance received under this subtitle. 
"(10) ASSUMPTION CONDITIONS.—Any entity that assumes, as 
determined by the Secretary, a mort^E^e covering low-income 
housing in connection with the acquisition of the housing from 
an owner under this section must comply with any low-income 
affordability restrictions for the remaining useful life of the 
housing as determined under section 222(d). This requirement 
shall only apply to an entity, such as a cooperative association, 
that, as determined by the Secretary, intends to own the hous-
ing on a permanent basis. 
12 use 4117. 
"SEC. 227. DELEGATED RESPONSIBILITY TO STATE AGENCIES. 
"(a) IN GENERAL.—In addition to any responsibilities delegated 
under section 213(c), the Secretary shall delegate some or all respon-
sibility for implementing this subtitle to a State housing 
agency if such agency submits a preservation plan acceptable to the 
Secretary. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4271 
"(b) APPROVAL.—State preservation plans shall be submitted in 
such form and in accordance with such procedures as the Secretary 
shall establish. The Secretary may approve plans that contain— 
"(1) an inventory of low-income housing located within the 
State that is or will be eligible low-income housing under this 
subtitle within 5 years; 
"(2) a description of the agency's experience in the area of 
multifamily financing and restructuring; 
"(3) a description of the administrative resources that the 
agency will commit to the processing of plans of action in 
accordance with this subtitle; 
"(4) a description of the administrative resources that the 
agency will commit to the monitoring of approved plans of 
action in accordance with this subtitle; 
"(5) an independent analysis of the performance of the multi-
family housing inventory financed or otherwise monitored by 
the agency; 
"(6) a certification by the public official responsible for 
submitting the comprehensive housing affordability strategy 
under section 105 of the Cranston-Gonzalez National Affordable 
Housing Act that the proposed activities are consistent with the 
approved housing strategy of the State within which the eligible 
low-income housing is located; and 
"(7) such other certifications or information that the Sec-
retary determines to be necessary or appropriate to achieve the 
purposes of this subtitle. 
"(c) IMPLEMENTATION AGREEMENTS.—The Secretary may enter 
into any agreements necessary to implement an approved State 
preservation plan, which may include incentives that are authorized 
under other provisions of this subtitle. 
"SEC. 228. CONSULTATIONS WITH OTHER INTERESTED PARTIES. 
12 USC 4118. 
"The Secretary shall confer with any appropriate State or local 
government agency to confirm any State or local assistance that is 
available to achieve the purposes of this title and shall give consider-
ation to the views of any such agency when making determinations 
under this subtitle. The Secretary shall also confer with appropriate 
interested parties that the Secretary believes could assist in the 
development of a plan of action that best achieves the purposes of 
this subtitle. 
"SEC. 229. DEFINITIONS. 
12 USC 4119. 
"For purposes of this subtitle: 
"(1) The term 'eligible low-income housing' means any hous-
ing financed by a loan or mortgage— 
"(A) that is— 
"(i) insured or held by the Secretary under section 
221(dX3) of the National Housing Act and assisted 
under section 101 of the Housing and Urban Develop-
ment Act of 1965 or section 8 of the United States 
Housing Act of 1937; 
"(ii) insured or held by the Secretary and bears 
interest at a rate determined under the proviso of 
section 221(dX5) of the National Housing Act; 
"(iii) insured, assisted, or held by the Secretary or a 
State or State agency under section 236 of the National 
Housing Act; or. 
104 STAT. 4272 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(iv) held by the Secretary and formerly insured 
under a program referred to in clause (i), (ii), or (iii); 
and 
"(B) that, under regulation or contract in effect before 
February 5, 1988, is or will within 24 months become 
eligible for prepayment without prior approval of the 
Secretary. 
"(2) The term 'Federal cost limit' means, for any eligible low-
income housing, the amount determined under section 215(a). 
"(3) The term 'low-income affordability restrictions' means 
limits imposed by regulation or regulatory agreement on tenant 
rents, rent contributions, or income eligibility in eligible low-
income housing. 
"(4) The terms 'low-income families or persons' and 'very low-
income families or persons' mean families or persons whose 
incomes do not exceed the respective levels established for low-
income families and very low-income families, respectively, 
under section 3(b)(2) of the United States Housing Act of 1937. 
"(5) The term 'moderate-income families or persons' means 
families or persons whose incomes are between 80 percent and 
95 percent of the median income for the area, as determined by 
the Secretary with adjustments for smaller and larger families. 
"(6) The term 'nonprofit organization' means any private, 
nonprofit organization that— 
"(A) is organized or chartered under State or local laws; 
"(B) has no part of its net earnings inuring to the benefit 
of any member, founder, contributor, or individual; 
"(C) complies with standards of financial accountability 
acceptable to the Secretary; and 
"(D) has among its principal purposes significant activi-
ties related to the provision of decent housing that is afford-
able to very low-, low-, and moderate-income families. 
"(7) The term 'owner' means the current or subsequent owner 
or owners of eligible low-income housing. 
"(8) The term 'preservation equity' means, for any eligible 
low-income housing— 
"(A) for purposes of determining the authorized return 
under section 214(a) and providing incentives to extend the 
low-income affordability restrictions on the housing under 
section 219— 
"(i) the preservation value of the housing determined 
under section 213(b)(1); less 
"(ii) any debt secured by the property; and 
"(B) for purposes of determining incentives under section 
220 and 221 and determining the amount of an acquisition 
loan under the provisions of section 241(fX3) of the National 
Housing Act— 
"(i) the preservation vgilue of the housing determined 
under section 213(b)(2); less 
"(ii) the outstanding balance of the federally-assisted 
mortgage or mortgages for the housing. 
"(9) The term 'preservation value' means, for any eligible low-
income housing, the applicable value determined under para-
graph (1) or (2) of section 213(b). 
"(10) The term 'Secretary' means the Secretary of Housing 
and Urban Development. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4273 
"(11) The term 'resident council' means any incorporated 
nonprofit organization or association that— 
"(A) is representative of the resident of the housing; 
"(B) adopts written procedures providing for the election 
of officers on a regular basis; and 
"(C) has a democratically elected governing board, elected 
by the residents of the housing. 
"SEC. 230. NOTICE TO TENANTS. 
12 USC 4120. 
"Where a provision of this subtitle requires that information or 
material be given to tenants of the housing, the requirement may be 
met by (1) posting a copy of the information or material in readily 
accessible locations within each affected building, or posting notices 
in each such location describing the information or material and 
specifying a location, as convenient to the tenants as is reasonably 
practical, where a copy may be examined, and (2) supplying a copy 
of the information or material to a representative of the tenants. 
"SEC. 231. DEFINITIONS OF QUALIFIED AND PRIORITY PURCHASER AND 
12 USC 4121. 
RELATED PARTY RULE. 
"(a) PRIORITY PURCHASER.—The term 'priority purchaser' means 
(A) a resident council organized to acquire the housing in accordance 
with a resident homeownership program that meets the require-
ments of section 231; and (B) any nonprofit organization or State or 
local agency that agrees to maintain low-income affordability 
restrictions for the remaining useful life of the housing (as deter-
mined under section 222(d)). 
"(b) QUALIFIED PURCHASER.—The term 'qualified 
purchaser' 
means any entity that agrees to maintain low-income affordability 
restrictions for the remaining useful life of the housing (as deter-
mined under section 222(d)), and includes for-profit entities and 
priority purchasers. 
"(c) RELATED PARTIES.—Except as provided in subsection (d), the 
terms 'qualified purchaser' and 'priority purchaser' do not include 
any entity that, either directly or indirectly, is wholly or partially 
owned or controlled by the owner of the housing being transferred 
under this subtitle, is under whole or partial common control with 
such owner, or has any financial interest in such owner or in which 
such owner has any finsmcial interest. The Secretary shall issue any 
regulations appropriate to implement the preceding sentence. 
"(d) MANAGEMENT EXCEPTION,—A qualified purchaser shall not be 
precluded from retaining as a property management entity a com-
pany that is owned or controlled by the selling owner or a principal 
thereof if retention of the management company is neither a condi-
tion of sale nor part of consideration paid for sale and the property 
management contract is negotiated by the qualified purchaser on an 
arm's length basis. 
"SEC. 232. PREEMPTION OF STATE AND LOCAL LAWS. 
12 USC 4122. 
"(a) IN GENERAL.—No State or political subdivision of a State may 
establish, continue in effect, or enforce any law or regulation that— 
"(1) restricts or inhibits the prepa3anent of any mortgage 
described in section 229(1) (or the voluntary termination of any 
insurance contract pursuant to section 229 of the National 
Housing Act) on eligible low income housing; 
104 STAT. 4274 
PUBLIC LAW 101-625—NOV. 28,1990 
"(2) restricts or inhibits an owner of such housing from 
receiving the authorized annual return provided under section 
214; 
"(3) is inconsistent with any provision of this subtitle, includ-
ing any law, regulation, or other restriction that limits or 
impairs the ability of any owner of eligible low income housing 
to receive incentives authorized under this subtitle (including 
authorization to increase rental rates, transfer the housing, 
obtain secondary financing, or use the proceeds of any of such 
incentives); or 
"(4) in its applicability to low-income housing is limited only 
to eligible low-income housing for which the owner has prepaid 
the mortgage or terminated the insurance contract. 
Any law, regulation, or restriction described under paragraph (1), 
(2), (3), or (4) shall be ineffective and any eligible low-income housing 
exempt from the law, regulation, or restriction, only to the extent 
that it violates the provisions of this subsection. 
"(b) EFFECT.—This section shall not prevent the establishment, 
continuing in effect, or enforcement of any law or regulation of any 
State or political subdivision of a State not inconsistent with the 
provisions of this subtitle and relating to building standards, zoning 
limitations, health, safety, or habitability standards for housing, 
rent control, or conversion of rental housing to condominium or 
cooperative ownership, to the extent such law or regulation is of 
general applicability to both housing receiving Federal Eissistance 
and nonassisted housing. This section shall not preempt, annul, or 
alter any contractual restrictions or obligations existing before the 
date of the enactment of the Cranston-Gonzalez National Affordable 
Housing Act that prevent or limit an owner of eligible low-income 
housing from prepajdng the mortgage on the housing (or terminat-
ing the insurance contract on the housing). 
12 u s e 4123. 
"SEC. 233. SEVERABILITY. 
"If any provision of this subtitle, or the application of such 
provision with respect to any person or circumstance, is held invalid, 
the remainder of this Act, and the application of such provision to 
any other person or circumstance, shall not be affected by such 
holding. 
12 u s e 4124. 
"SEC. 234. AUTHORIZATION OF APPROPRIATIONS. 
"(a) GENERAL.—There are authorized to be appropriated for assist-
ance and incentives authorized under this subtitle $425,000,000 for 
fiscal year 1991 and $858,000,000 for fiscal year 1992. 
"(b) GRANTS.—Of the amounts made available under subsection 
(a), not more than $100,000,000 for each of fiscal years 1991 and 1992 
shall be available for grants under section 221(dX2), subject to 
approval in appropriations Acts. 
12 u s e 4101 
"SEC. 235. APPLICABILITY. 
"Subject to section 605 of the Cranston-Gonzalez National Afford-
able Housing Act, the requirements of this subtitle shall apply to 
any project that is eligible low-income housing on or after 
November 1,1987.". 
(b) TABLE OF CONTENTS.—The table of contents of such Act is 
amended by striking the items relating to subtitles A and B of title 
II and inserting the following: 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4275 
"Subtitle A—Short Title 
"Sec. 201. Short title. 
"Subtitle B—Prepasmient of Mortgages Insured Under National Housing Act 
"Sec. 211. General prepajmient limitation. 
"Sec. 212. Notice of intent. 
"Sec. 213. Appraisal and preservation value of eligible low-income housing. 
"Sec. 214. Annual authorized return and preservation rents. 
"Sec. 215. Federal cost limits and limitations on plans of action. 
"Sec. 216. Information from Secretary. 
"Sec. 217. Plan of action. 
"Sec. 218. Prepajrment and voluntary termination. 
"Sec. 219. Incentives to extend low-income use. 
"Sec. 220. Incentives for transfer to qualiHed purchasers. 
"Sec. 221. Mandatory sale for housing exceeding Federal cost limits. 
"Sec. 222. Criteria for approval of plan of action involving incentives. 
"Sec. 223. Assistance for displaced tenants. 
"Sec. 224. Permissible prepajonent or voluntary termination and modification of 
commitments. 
"Sec. 225. Timetable for approval of plan of action. 
"Sec. 226. Resident homeownership program. 
"Sec. 227. Delegated responsibility to State agencies. 
"Sec. 228. Consultations with other interested parties. 
"Sec. 229. Definitions. 
"Sec. 230. Notice to tenants. 
"Sec. 231. Definitions of qualified and priority purchasers and related party rule. 
"Sec. 232. Preemption of State and local laws. 
"Sec. 233. Severability. 
"Sec. 234. Authorization of appropriations. 
"Sec. 235. Applicability.". 
SEC. 602. RELATED NATIONAL HOUSING ACT AMENDMENTS. 
(a) INSURANCE FOR SECOND MORTGAGE FINANCING.—Section 241(f) 
of the National Housing Act is amended to read as follows: 
12 USC 17l5z-6. 
"(fKl) Notwithstanding any other provision of this section, the 
Secretary may, upon such terms and conditions as the Secretary 
may prescribe, make a commitment to insure and insure equity 
loans and acquisition loans made by financial institutions approved 
by the Secretary and State housing finance agencies that enter into 
risk-sharing agreements with the Secretary. 
"(2)(A) For purposes of this section, the term 'equity loan' means a 
loan or advance of credit to the owner of eligible low income housing 
(EIS defined in section 229 of the Low-Income Housing Preservation 
and Resident Homeownership Act of 1990) who agrees to extend the 
low-income affordability restrictions on the housing pursuant to an 
approved plan of action under such Act. 
(B) To be eligible for insurance under this paragraph, an equity 
loan shall— 
"(i) be limited to an amount equal to the lesser of (I) 70 
percent of the preservation equity in the project, as determined 
by the Secretary under such Act, or (II) the amount the Sec-
retary determines can be supported by the project on the basis 
of an 8 percent return on the preservation equity (assuming 
normal debt service coverages); and 
"(ii) provide for the lender to deposit (on behalf of the borrow-
ing owner) 10 percent of the loan amount in an escrow account, 
controlled by the Secretary or a State housing finance agency 
approved by the Secretary, which shall be made available to the 
owner upon the expiration of the 5-year period beginning on the 
date the loan is made, subject to compliance with section 222(d) 
of such Act; and 
104 STAT. 4276 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(3)(A) For purposes of this section, the term 'acquisition loan' 
means a loan or advance of credit to a qualified purchaser of eligible 
low-income housing (as defined in section 231 of the Low-Income 
Housing Preservation and Resident Homeownership Act of 1990) 
acquiring the housing under section 220 or 221 of such Act who 
agrees to extend the low-income Eiffordability restrictions pursuant 
to an approved plan of action under such Act. 
"(B) To be eligible for insurance under this paragraph, an acquisi-
tion loan shall be limited to 95 percent of the preservation equity of 
the housing determined under section 229(8) of the Low-Income 
Housing Preservation and Resident Homeownership Act of 1990, 
except that the loan may include, if the qualified purchaser is a 
priority purchaser as defined under section 231 of such Act, any 
expenses associated with the acquisition, loan closing, and im-
plementation of the plan of action, subject to approval by the 
Secretary. 
"(4) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), (1), and 
(n) of section 207 shall be applicable to loans insured under this 
subsection, except that— 
"(A) all references to the term 'mortgage' shall be construed 
to refer to the term 'loan' as used in this subsection; 
"(B) loans involving projects covered by a mortgage insured 
under section 236 shall be insured under and shall be the 
obligations of the Special Risk Insurance Fund; and 
"(C) with respect to any sale under foreclosure of a mortgage 
on the project that is senior to the equity loan insured under 
this subsection and when the equity loan is secured by a mort-
gage, the Secretary may— 
"(i) issue regulations providing that, in order to receive 
insurance benefits, the insured mortggigee shall either 
assign the equity or acquisition loan to the Secretary or bid 
the amount necessary to acquire the project and convey 
title to the project to the Secretary, in which CEise the 
insurance benefits paid by the Secretary shall include the 
amount bid by the mortgagee to satisfy the senior mortgage 
at the foreclosure sale; and 
"(ii) if the equity or acquisition loan has been assigned to 
the Secretary, bid, in addition to amounts authorized under 
section 207(k), any sum not in excess of the total unpaid 
indebtedness secured by such senior mortgage and the 
equity or acquisition loan, plus taxes, insurance, foreclosure 
costs, fees, and other expenses. 
"(5) Loans insured under this subsection shall— 
"(A) have a maturity and provisions for amortization satisfac-
tory to the Secretary, bear interest at such rate as may be 
agreed upon by the mortgagor and mortgagee, and be secured in 
such manner as the Secretary may require; and 
"(B) contain such other terms, conditions, and restrictions as 
the Secretary may prescribe, including phased advances of 
equity loan proceeds to reflect project rent levels. 
"(6) The Secretary may provide for combination of loans insured 
under subsection (d) with equity and acquisition loans insured under 
this subsection. 
"(7) When underwriting an equity or acquisiton loan under this 
subsection, the Secretary may assume that the rental assistance 
provided in accordance with an approved plan of action under 
section 222 of the Cranston-Gonzalez National Affordable Housing 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4277 
Act will be extended for the full term of the contract entered into 
under such Act. The Secretary may accelerate repajrment of a loan 
under this subsection if rental assistance is not extended under 
section 222(b) of such Act or the Secretary is unable to develop a 
revised package of incentives to the owner comparable to those 
received under the original approved plan of action. 
"(8) If the Secretary is unable to extend the term of rental 
assistance for the full term of the contract entered into under 
section 222(b) of the Cranston-Gonzalez National Affordable Hous-
ing Act, the Secretary may take such actions as the Secretary 
determines to be appropriate to avoid default, avoid disruption of 
the sound ownership and management of the housing, and otherwise 
minimize the cost to the Federal Government. 
"(9) A mortgagee approved by the Secretary may not withhold 
consent to an equity or acquisition loan on a property on which that 
mortgagee holds a mortgage. 
(b) APPROVAL PRIOR TO FORECLOSURE.—Section 250(b) of such Act 
(12 U.S.C. 1715z-15(b) is amended to read as follows: 
"(b) A mortgagee may foreclose the mortgage on, or acquire by 
deed in lieu of foreclosure, any eligible low-income housing project 
(as such term is defined in section 229 of the Low-Income Housing 
Preservation and Resident Homeownership Act of 1990) only if the 
mortgagee also conveys title to the project to the Secretary in 
connection with a claim for insurance benefits.". 
(c) REPEALER.—Section 250(c) of such Act is hereby repealed, and 
section 250(d) is redesignated as section 250(c). 
SEC. 603. RELATED UNITED STATES HOUSING ACT OF 1937 AMENDMENTS. 
Section 89(v)(2) of the United States Housing Act of 1937 is 42 USC I437f. 
amended by striking out "Emergency Low Income Housing 
Preservation Act of 1987" and inserting "Low-Income Housing 
Preservation and Resident Homeownership Act of 1990". 
SEC. 604. TRANSITION PROVISIONS. 
12 USC 4101 
(a) HOUSING ELIGIBLE FOR ELECTION.—Any owner of housing that 
becomes eligible low-income housing before January 1, 1991 and 
who, before such date, filed a notice of intent under section 222 of 
the Emergency Low Income Housing Preservation Act of 1987 (as 
such section existed before the date of the enactment of this Act) or 
under section 212 of such Act (as amended by section 601(a)) may 
elect to be subject to (1) the provisions of such Act as in effect before 
the date of the enactment of this Act, or (2) the provisions of the 
Low-Income Housing Preservation and Resident Homeownership 
Act of 1990, after the date of the enactment of this Act. Tlie 
Secretary shall establish procedures for owners to make the election 
under the preceding sentence. 
(b) RIGHT OF CONVERSION TO NEW SYSTEM.—Any owner who has 
filed a plan of action on or before October 11, 1990, shall have the 
right to convert to the system of incentives and restrictions under 
this subtitle, with such adjustments £is the Secretary determines to 
be appropriate to compensate for the value of any incentives the 
owner received under the Emergency Low Income Housing 
Preservation Act of 1987. Owners filing plans after such date shall 
not have any right under this subsection. 
(c) EFFECTIVENESS OF REPEALED PROVISIONS.—Notwithstanding the 
amendment made by section 601(a), the provisions of the Emergency 
Low Income Housing Preservation Act of 1987 (as in effect imme-
104 STAT. 4278 
PUBLIC LAW 101-625—NOV. 28, 1990 
diately before the date of the enactment of this Act) shall apply with 
respect to any housing for which the election under subsection (aXD 
is made. 
(d) REGULATIONS.—Not later than the expiration of the 90-day 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall, subject to the 
provisions of section 553 of title 5, United States Code, publish 
proposed rules to implement this subtitle and the amendments 
made by this subtitle. Not later than 45 days after the expiration of 
the period under the preceding sentence the Secretary shall issue 
interim or final rules to implement such provisions. 
12 use 4101 
SEC. 605. EFFECTIVE DATE. 
This subtitle shall take effect on the date of the enactment of this 
Act. 
Subtitle B—Other Preservation Provisions 
SEC. 611. SECTION 236 RENTAL ASSISTANCE. 
(a) DEFINITION OF INCOME.—Section 236(m) of the National Hous-
ing Act (12 U.S.C. 1715z-l) is amended by inserting before the period 
at the end of the first sentence the following: ', except that any 
amounts not actually received by the fEmaily may not be considered 
as income under this subsection". 
(b) RENT CHARGES.— 
(1) PROJECTS ASSISTED UNDER SECTION 236.—Section 236(f) of 
the National Housing Act (12 U.S.C. 1715z-l(f)) is amended by 
adding at the end the following new paragraph: 
"(5)(A) In order to induce advances by owners for capital improve-
ments (excluding any owner contributions that may be required by 
the Secretary as a condition for assistance under section 201 of the 
Housing and Community Development Amendments of 1978) to 
benefit projects assisted under this section, in establishing basic 
rental charges and fair market rental charges under paragraph (1) 
the Secretary may include an amount that would permit a return of 
such advances with interest to the owner out of project income, on 
such terms and conditions as the Secretary may determine. Any 
resulting increase in rent contributions shall be— 
"(i) to a level not exceeding the lower of 30 percent of the 
adjusted income of the tenant or the published existing fair 
market rent for comparable housing established under section 
8(c) of the United States Housing Act of 1937; 
"(ii) phased in equally over a period of not less than 3 years, if 
such increase is 30 percent or more; and 
"(iii) limited to not more than 10 percent per year if such 
increase is more than 10 percent but less than 30 percent. 
"(B) Assistance under section 8 of the United States Housing Act 
of 1937 shall be provided, to the extent available under appropria-
tions Acts, if necessary to mitigate any adverse effects on income-
eligible tenants.". 
(2) INSURED PROJECTS.—Section 221(f) of the National Housing Act 
(12 U.S.C. 1715/(f)) is amended by adding at the end the following 
new undesignated paragraph: 
"In order to induce advances by owners for capital improvements 
(excluding any owner contributions that may be required by the 
Secretary as a condition for assistance under section 201 of the 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4279 
Housing and Community Development Amendments of 1978) to 
benefit projects covered by a mortgage under the provisions of 
subsection (d)(3) that bears a below market interest rate prescribed 
in the proviso to subsection (d)(5), in establishing the rental charge 
for the project the Secretary may include an amount that would 
permit a return of such advances with interest to the owner out of 
project income, on such terms and conditions as the Secretary may 
determine. Any resulting increase in rent contributions shall be— 
"(A) to a level not exceeding the lower of 30 percent of the 
adjusted income of the tenant or the published existing fair 
« 
market rent for comparable housing established under section 
8(c) of the United States Housing Act of 1937; 
"(B) phased in equally over a period of not less than 3 years, if 
such increase is 30 percent or more; and 
"(C) limited to not more than 10 percent per year if such 
increase is more than 10 percent but less than 30 percent. 
Assistance under section 8 of the United States Housing Act of 1937 
shall be provided, to the extent available under appropriations Acts, 
if necessary to mitigate any adverse effects on income-eligible ten-
ants.". 
SEC. 612. MANAGEMENT AND PRESERVATION OF FEDERALLY ASSISTED 
HOUSING. 
(a) SECTION 236,—Section 236(f) of the National Housing Act, as 
amended by the preceding provisions of this Act, is further amended 
by adding at the end the following new paragraph: 
"(6XA) Notwithstanding paragraph (1), tenants whose incomes 
exceed 80 percent of area median income shall pay as rent the lower 
of the following amounts: (A) 30 percent of the family's adjusted 
monthly income; or (B) the relevant fair market rental established 
under section 8(b) of the United States Housing Act of 1937 for the 
jurisdiction in which the housing is located. 
"(B) An owner shall phase in any increase in rents for current 
tenants resulting from subparagraph (A). Rental charges collected 
in excess of the basic rental charges shall continue to be credited to 
the reserve fund described in subsection (gXl).". 
(b) SECTION 221.—Section 221 of the National Housing Act is 12 use 1715/. 
amended by inserting the following new subsection after subsection 
(k): 
"(1X1) Notwithstanding any other provision of law, tenants resid-
ing in eligible multifamily housing whose incomes exceed 80 percent 
of area median income shall pay as rent not more than the lower of 
the following amounts: (A) 30 percent of the family's adjusted 
monthly income; or (B) the relevant fair market rental established 
under section 80t)) of the United States Housing Act of 1937 for the 
jurisdiction in which the housing is located. An owner shall phase in 
any increase in rents for current tenants resulting from this 
subsection. 
"(2) For purposes of this subsection, the term 'eligible multifamily 
housing' means any housing financed by a loan or mortgage that is 
(A) insured or held by the Secretary under subsection (dX3) and 
assisted under section 101 of the Housing and Urban Development 
Act of 1965 or section 8 of the United States Housing Act of 1937; or 
(B) insured or held by the Secretary and bears interest at a rate 
determined under the proviso of subsection (dX5).". 
104 STAT. 4280 
PUBLIC LAW 101-625—NOV. 28, 1990 
SEC. 613. ASSISTANCE TO PREVENT PREPAYMENT UNDER STATE MORT-
GAGE PROGRAMS. 
(a) SECTION 8 ASSISTANCE.— 
(1) AUTHORITY.—Section 8(dX2XA)) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(dX2XA)) is amended by 
inserting after the period at the end the following: "Not-
withstanding any other provision of this section, a public 
housing agency and an applicable State agency may, on a 
priority basis, attach to structures not more than an addi-
tional 15 percent of the assistance provided by the public 
housing agency or the applicable State agency only with 
respect to projects assisted under a State program that 
permits the owner of the projects to prepay a State assisted 
or subsidized mortgage on the structure, except that attach-
ment of assistance under this sentence shall be for the 
purpose of (i) providing incentives to owners to preserve 
such projects for occupancy by lower and moderate income 
families (for the period that assistance under this sentence 
is available), and (ii) to Eissist lower income tenants to afford 
any increases in rent that may be required to induce the 
owner to maintain occupancy in the project by lower and 
moderate income tenants. Any assistance provided to lower 
income tenants under the preceding sentence shall not be 
considered for purposes of the limitation under paragraph 
(IXA) regarding the percentage of families that may receive 
assistance under this section who do not qualify for pref-
erences under such paragraph.". 
(2) CONTRACT TERM.—Section 8(dX2XC) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(dX2XC)) is amended by 
inserting after the period at the end the following: "To the 
extent assistance is used as provided in the penultimate sen-
tence of subparagraph (A), the contract for eissistance may, at 
the option of the public housing agency, have an initial term not 
exceeding 15 years.". 
12 use 4125. 
(b) STATE PRESERVATION PROJECT ASSISTANCE.— 
(1) IN GENERAL.—Upon application by a State or local housing 
authority (including public housing agencies), the Secretary of 
Housing and Urban Development may make available, from 
sources of assistance appropriated to preserve the low and 
moderate income status of projects with expiring Federal use 
restrictions, assistance to such State or local housing authorities 
for use in preventing the loss of housing affordable for low and 
moderate income families that is assisted under a State pro-
gram under the terms of which the owner may prepay a State 
assisted or subsidized mortgage on such housing. The applica-
tion of the State or local housing authority shall demonstrate to 
the Secretary that the total amount of incentives provided to 
the owner to induce the owner to preserve the low and mod-
erate income status of the project shall not exceed the level of 
incentives which may be provided to a similarly situated project 
with expiring Federal use restrictions under subtitle B of title II 
of the Housing and Community Development Act of 1987. 
(2) SECTION 8.—Any assistance under section 8 of the United 
States Housing Act of 1937 made available pursuant to this 
subsection may be used (i) to supplement any assistance avail-
able on existing section 8 contracts, or (ii) to provide additional 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4281 
assistance to structures to ensure that all units occupied by 
tenants who are lower income families (as such term is defined 
in section 3(b) of the United States Housing Act of 1937) pay 
rents not exceeding 30 percent of their adjusted incomes. Any 
project receiving assistance hereunder shall be subject to stand-
ards, inspections and sanctions established by the Secretary 
under section 224(e) of the Housing and Community Develop-
ment Act of 1987. Any such section 8 assistance shall be pro-
vided for a term and at the fair market rent levels or such 
higher levels used as applicable for eligible low-income housing 
that receives incentives under subtitle B of title II of the 
Housing and Community Development Act of 1987. 
(3) RESTRICTION.—Assistance may be provided under this 
subsection only to State and local housing authorities that 
require any housing receiving such assistance to remain afford-
able for lower and moderate income tenants for the period 
during which assistance under this subsection is received. 
TITLE VII—RURAL HOUSING 
SEC. 701. PROGRAM AUTHORIZATIONS. 
(a) INSURANCE AND GUARANTEE AUTHORITY.—Section 513(aXl) of 
the Housing Act of 1949 (42 U.S.C. 1483(aXl)) is amended to read as 
follows: 
"(aXl) The Secretary may, to the extent approved in appropriation 
Acts, insure and guarantee loans under this title during fiscal years 
1991 and 1992, in aggregate amounts not to exceed $2,125,800,000 
and $2,217,150,000, respectively, as follows: 
"(A) For insured or guaranteed loans under section 502 on 
behalf of low-income borrowers receiving assistance under sec-
tion 
521(aKl), 
$1,391,300,000 
for 
fiscal 
year 
1991 
and 
$1,451,100,000 for fiscal year 1992. 
"(B) For guaranteed loans under section 502(h) on behalf of 
low and moderate income borrowers, such sums as may be 
appropriated for fiscal years 1991 and 1992. 
"(C) For loans under section 504, $11,900,000 for fiscal year 
1991 and $12,400,000 for fiscal year 1992. 
"(D) For insured loans under section 514, $12,000,000 for fiscal 
year 1991 and $12,500,000 for fiscal year 1992. 
"(E) For insured loans under section 515, $709,000,000 for 
fiscal year 1991 and $739,500,000 for fiscal year 1992. 
"(F) For loans under section 523(bXlXB), $800,000 for fiscal 
year 1991 and $800,000 for fiscal year 1992. 
"(G) For site loans under section 524, $800,000 for fiscal year 
1991 and $850,000 for fiscal year 1992.". 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 5130t)) of 
the 
Housing Act of 1949 (42 U.S.C. 1483(b)) is amended to read as 
follows: 
"(b) There are authorized to be appropriated for fiscal years 1991 
and 1992, and to remain available until expended, the following 
amounts: 
"(1) For grants under section 502(fKl), $1,000,000 for fiscal 
year 1991 and $1,100,000 for fiscal year 1992. 
"(2) For grants under section 504, $20,200,000 for fiscal year 
1991 and $21,100,000 for fiscal year 1992. 
104 STAT. 4282 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(3) For purposes of section 509(c), $550,000 for fiscal year 
1991 and $600,000 for fiscal year 1992. 
"(4) For project preparation grants under section 509(fK6), 
$5,000,000 in fiscal year 1991 and $5,300,000 in fiscal year 1992. 
"(5) In fiscal years 1991 and 1992, such sums as may be 
necessary to meet payments on notes or other obligations issued 
by the Secretary under section 511 equal to— 
"(A) the aggregate of the contributions made by the 
Secretary in the form of credits on principal due on loans 
made pursuant to section 503; and 
"(B) the interest due on a similar sum represented by 
notes or other obligations issued by the Secretary. 
"(6) For financial assistance under section 516— 
"(A) for low-rent housing and related facilities for domes-
tic farm labor under subsections (a) through (j) of such 
section, $20,900,000 for fiscal year 1991 and $21,700,000 for 
fiscal year 1992; and 
"(B) for housing for rural homeless Eind migrant farm-
workers under subsection (k) of such section, $10,000,000 for 
fiscal year 1991 and $10,500,000 for fiscal year 1992. 
"(7) For grants under section 523(f), $13,400,000 for fiscal year 
1991 and $13,900,000 for fiscal year 1992. 
"(8) For grants under section 533, $29,600,000 for fiscal year 
1991 and $30,800,000 for fiscal year 1992.". 
(c) RENTAL ASSISTANCE PAYMENT CONTRACTS.—Section 513(cXl) of 
the Housing Act of 1949 (42 U.S.C. 1483(cXl)) is amended to read as 
follows: 
"(cXD The Secretary, to the extent approved in appropriation Acts 
for fiscal years 1991 and 1992, may enter into rental assistance 
pajnnent 
contracts 
under 
section 
521(aX2XA) 
aggregating 
$397,000,000 for fiscal year 1991 and $414,100,000 for fiscal year 
1992.". 
(d) SUPPLEMENTAL RENTAL ASSISTANCE CONTRACTS.—Section 513(d) 
of the Housing Act of 1949 (42 U.S.C. 1483(d)) is amended to read as 
follows: 
"(d) The Secretary, to the extent approved in appropriation Acts 
for fiscal years 1991 and 1992, may enter into 5-year supplemental 
rental assistance contracts under section 502(cX5XD) aggregating 
$5,200,000 for fiscal year 1991 and $5,500,000 for fiscal year 1992.". 
(e) RENTAL HOUSING LOAN AUTHORITY.—Section 515(bX4) of the 
Housing Act of 1949 (42 U.S.C. 14850)X4)) is amended by striking 
"September 30,1990" and inserting "September 30,1991". 
(f) MUTUAL AND SELF-HELP HOUSING GRANT AND LOAN AUTHOR-
ITY.—Section 523(f) of the Housing Act of 1949 (42 U.S.C. 1490c(f)) is 
amended by striking "September 30, 1990" and inserting "Septem-
ber 30,1991". 
SEC. 702. EFFECT OF FOSTER CARE CHILDREN IN DETERMINATION OF 
FAMILY COMPOSITION AND SIZE. 
Section 501(bX4) of the Housing Act of 1949 (42 U.S.C. 1471(bX4)) is 
amended by inserting after the period at the end the following new 
sentence: "The temporary absence of a child from the home due to 
placement in foster care should not be considered in considering 
family composition and family size.". 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4283 
SEC. 703. ESCROW ACCOUNTS. 
Section 501(e) of the Housing Act of 1949 (42 U.S.C. 1471(e)) is 
amended by inserting after the third sentence the following: "The 
Secretary shall pay the same rate of interest on escrowed funds as is 
required to be paid on escrowed funds held by other lenders in any 
State where State law requires pajonent of interest on escrowed 
funds, subject to appropriations to the extent that additional budget 
authority is necessary to carry out this sentence.". 
SEC. 704. REMOTE RURAL AREAS. 
(a) IN GENERAL.—Section 502 of the Housing Act of 1949 (42 U.S.C. 
1472) is amended by adding at the end the following new subsection: 
"(f) REMOTE RURAL AREAS.— 
"(1) LOAN SUPPLEMENTS.—The Secretary may supplement any 
loan under this section to finance housing located in a remote 
rural area with a grant in an amount not greater than the 
amount by which the reasonable land acquisition and construc-
tion costs of the security property exceeds the appraised value 
of such property. 
"(2) PROHIBITION.—The Secretary may not refuse to make, 
insure, or guarantee a loan that otherwise meets the require-
ments under this section solely on the basis that the housing 
involved is located in an area that is excessively rural in 
character or excessively remote.". 
(b) REGULATIONS.—Not later than the expiration of the 120-day 42 use 1472 
period beginning on the date of enactment of this Act, the Secretary ^°^-
of Agriculture shall issue any regulations necessary to carry out the * 
amendment made by subsection (a). 
SEC. 705. SECTION 502 DEFERRED MORTGAGE DEMONSTRATION. 
(a) IN GENERAL.—Section 502 of the Housing Act of 1949 (42 U.S.C. 
1472), as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new subsection: 
"(g) DEFERRED MORTGAGE DEMONSTRATION.— 
"(1) AUTHORITY.—With respect to families or persons other-
wise eligible for assistemce under subsection (d) but having 
incomes below the amount determined to qualify for a loan 
under this section, the Secretary may defer mortgage pa5anents 
beyond the amount affordable at 1 percent interest, taking into 
consideration income, taxes and insurance. Deferred mortgage 
payments shall be converted to payment status when the ability 
of the borrower to repay improves. Deferred amounts shall not 
exceed 25 percent of the amount of the pajnnent due at 1 
percent interest and shall be subject to recapture. 
"(2) INTEREST.—Interest on principal deferred shall be set 
at 1 percent and any interest payments deferred under this 
subsection shall not be treated as principal in calculating 
indebtedness. 
"(3) FUNDING.—Subject to approval in appropriations Acts, 
not more than 10 percent of the amount approved for each of 
fiscal years 1991 and 1992 for loans under this section may be 
used to carry out this subsection.". 
(b) REGULATIONS.—Not later than the expiration of the 120-day 42 use 1472 
period beginning on the date of enactment of this Act, the Secretary "ote. 
of Agriculture shall issue any regulations necessary to carry out the 
amendment made by subsection (a). 
-194 O - 91 - 31 : QL 3 Part 5 
104 STAT. 4284 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 1472 
SEC. 706. RURAL HOUSING LOAN GUARANTEES. 
(a) FINDINGS AND PURPOSE.— 
(1) FINDINGS.—The Congress finds that— 
(A) the Federal Government should encourage support 
for homeownership through nonsubsidized mortgsige loans 
guaranteed by the Secretary of Agriculture for the pur-
chase of modest homes located in rural areas and small 
communities of the country that are not adequately served 
by private conventional, federally insured, or guaranteed 
mortgage credit providers; and 
(B) many rural areas contain disproportionate amounts of 
substandard housing in need of repair, but lack the nec-
essary funding and support to modernize such housing 
through preservation. 
(2) PURPOSE.—The purpose of this section is to expand 
homeownership opportunities to low- and moderate-income resi-
dents of rural areas of the country through the establishment of 
guaranteed rural housing loans to be made available in rural 
locations where there is an insufficient availability of mortgage 
financing from other sources. 
(b) GUARANTEED LOANS FOR HOUSING ACQUISITION.—Section 502 of 
the Housing Act of 1949 (42 U.S.C. 1472), as amended by the 
preceding provisions of this Act, is further amended by adding at the 
end the following new subsection: 
"(h) GUARANTEED LOANS.— 
"(1) AUTHORITY.—The Secretary shall, to the extent provided 
in appropriation Acts, provide guaranteed loans in accordance 
with this section, section 517(d), and the last sentence of section 
521(a)(lXA), except as modified by the provisions of this subsec-
tion. Loans shall be guaranteed under this subsection in an 
emiount equal to 90 percent of the loan. 
"(2) EuGiBLE BORROWERS.—Loans guaranteed pursuant to this 
subsection shall be made only to borrowers who are low or 
moderate income families or persons, whose incomes do not 
exceed the median income of the area, as determined by the 
Secretary. 
"(3) EuGiBLE HOUSING.—Loans may be guaranteed pursuant 
to this subsection only if the loan is used to acquire or construct 
a single-family residence that is— 
"(A) to be used as the principal residence of the borrower; 
"(B) eligible for assistance under this section, section 
203(b) of the National Housing Act, or chapter 37 of title 38, 
United States Code; and 
"(C) located in a rural area that is more than 25 miles 
from an urban area or densely populated area. 
"(4) PRIORITY AND COUNSEUNG FOR FIRST-TIME HOMEBUYERS.— 
"(A) In providing guaranteed loans under this subsection, 
the Secretary shall give priority to first-time homebuyers 
(as defined in paragraph (12XA)). 
"(B) The Secretary may require that, as a condition of 
receiving a guaranteed loan pursuant to this subsection, a 
borrower who is a first-time homebuyer successfully com-
plete a program of homeownership counseling under sec-
tion 106(a)(l)(iii) of the Housing and Urban Development 
Act of 1968 and obtain certification from the provider of the 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4285 
program that the borrower is adequately prepared for the 
obligations of homeownership. 
"(5) EuGiBLE LENDERS.—Guaranteed loans pursuant to this 
subsection may be made only by lenders approved by and 
meeting qualifications established by the Secretary. 
"(6) LOAN TERMS.—Loans guaranteed pursuant to this subsec-
tion shall— 
"(A) be made for a term not to exceed 30 years; 
"(B) involve a rate of interest that is j^ed over the term 
of the loan and does not exceed the rate for loans guaran-
teed under chapter 37 of title 38, United States Code, or 
comparable loans in the area that are not guaranteed; and 
"(C) involve a principal obligation (including initial serv-
ice charges, appraisal, inspection, and other fees as the 
Secretary may approve)— 
"(i) for a first-time homebuyer, in any amount not in 
excess of 100 percent of the appraised value of the 
property as of the date the loan is accepted or the 
acquisition cost of the property, whichever is less, sub-
ject to the maximum dollar limitation of section 
203(bX2) of the National Housing Act; and 
"(ii) for any borrower other than a first-time home-
buyer, in an amount not in excess of the percentage of 
the property or the acquisition cost of the property that 
the Secretary shall determine, subject to the maximum 
dollar limitation of section 203(bX2) of the National 
Housing Act, such percentage or cost in any event not 
to exceed 100 percent of the appraised value of the 
property as of the date the loan is accepted or the 
acquisition cost of the property, whichever is less. 
"(7) GUARANTEE FEE.—With respect to a guaranteed loan 
under this subsection, the Secretary may collect from the lender 
at the time of issuance of the guarantee a fee equal to not more 
than 1 percent of the principal obligation of the loan. 
"(8) REFINANCING.—Any guaranteed loan under this subsec-
tion may be refinanced and extended in accordance with terms 
and conditions that the Secretary shall prescribe, but in no 
event for an additional amount or term which exceeds the 
limitations under this subsection. 
"(9) NoNASSUMpnoN.—Notwithstanding the transfer of prop-
erty for which a guaranteed loan under this subsection was 
made, the borrower of a guarsmteed loan under this subsection 
may not be relieved of liability with respect to the loan. 
"(10) GEOGRAPHICAL TARGETING.—In providing guaranteed 
loans under this subsection, the Secretary shall establish stand-
ards to target and give priority to areas that have a dem-
onstrated need for additional sources of mortgage financing for 
low and moderate income families. 
"(11) ALLOCATION.—The Secretary shall provide that, in each 
fiscal year, guaranteed loans under this subsection shall be 
allocated among the States on the basis of the need of eligible 
borrowers in each State for such loans in comparison with the 
need of eligible borrowers for such loans among all States. 
"(12) DEFINITIONS.—For purposes of this subsection: 
"(A) The term 'displaced homemaker' means an individ-
ual who— 
"(i) is an adult; 
104 STAT. 4286 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(ii) has not worked full-time full-year in the labor 
force for a number of years but has, during such years, 
worked primarily without remuneration to care for the 
home and family; and 
"(iii) is unemployed or underemployed and is experi-
encing difficulty in obtaining or upgrading employ-
ment. 
"(B) The term 'first-time homebuyer' means any individ-
ual who (and whose spouse) has had no present ownership 
in a principal residence during the 3-year period ending on 
the date of purchase of the property acquired with a 
guaranteed loan under this subsection except that— 
"(i) any individual who is a displaced homemaker 
may not be excluded from consideration as a first-time 
homebuyer under this subparagraph on the basis that 
the individual, while a homemaker, owned a home with 
his or her spouse or resided in a home owned by the 
spouse; and 
"(ii) any individual who is a single parent may not be 
excluded from consideration £is a first-time homebuyer 
under this subparagraph on the basis that the individ-
ual, while married, owned a home with his or her 
spouse or resided in a home owned by the spouse. 
"(C) The term 'single parent' means an individual who— 
"(i) is unmarried or legally separated from a spouse; 
and 
"(iiXD has 1 or more minor children for whom the 
individual has custody or joint custody; or 
"(II) is pregnant. 
"(D) The term 'State' means the States of the United 
States, the Commonwealth of Puerto Rico, the District of 
Columbia, the Commonwealth of the Northern Mariana 
Islands, Guam, the Virgin Islands, American Samoa, the 
Trust Territories of the Pacific, and any other possession of 
the United States.", 
(c) CONFORMING AMENDMENTS.—Section 106(aX2) of the Housing 
and Urban Development Act of 1968 (12 U.S.C. 1701x(aX2)) is 
amended— 
(1) by inserting "(A)" after "Secretary"; and 
(2) by striking "Act and" and inserting the following: "Act; (B) 
shall, in consultation with the Secretary of Agriculture, provide 
such services for borrowers who are first-time homebuyers with 
guaranteed loans under section 502(h) of the Housing Act of 
1949; and (C)". 
42 use 1472 
(d) REGULATIONS AND IMPLEMENTATION.— 
5.°*?- 
(1) PROPOSED REGULATIONS AND COMMENT PERIOD.—Not later 
^i^Jjgj. 
than 120 days after the date of the enactment of this Act, the 
publication. 
Secretary of Agriculture shall publish in the Federal Register 
proposed regulations to implement the amendments made by 
this section. The Secretary shall receive comments regarding 
the regulations during the 30-day period beginning on the date 
of the publication of the proposed regulations. 
(2) IMPLEMENTATION.—Not later than 180 days after the date 
I 
of the enactment of this Act, the Secretary of Agriculture shall 
, 
issue fined regulations to implement the amendments made by 
this section. The Secretary shall provide for the regulations to 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4287 
take effect not later than 30 days after the date on which the 
regulations are issued, 
(3) APPLICABILITY.—The amendments made by this section 
shall not apply to guaranteed loans under title V of the Housing 
Act of 1949 (42 U.S.C. 1471 et seq.) made before the date on 
which the final regulations issued by the Secretary under para-
graph (2) take effect. 
(4) CONSULTATION.—In developing and promulgating the 
regulations under paragraphs (1) and (2), the Secretary of Agri-
culture shall consult with the chairperson of the Federal Agri-
cultural Mortgage Corporation and shall solicit the views of 
borrowers, lenders, realtors, and homebuilders experienced and 
knowledgeable regarding housing in rural areas to provide that 
the regulations promulgated ensure that guaranteed loans 
pursuant to the amendments made by this section— 
(A) are made in a manner that is cost-effective; and 
(B) are made in a manner that reduces, to the extent 
practicable, the burden of administration and paperwork 
for borrowers and lenders. 
SEC. 707. FORECLOSURE PROCEDURES. 
(a) IN GENERAL.—Section 505 of the Housing Act of 1949 (42 U.S.C. 
1475) is amended— 
(1) by inserting "(a) MORATORIUM.—" after the section des-
ignation; and 
(2) by adding at the end the following new subsection: 
"(b) FORECLOSURE PROCEDURE.—In foreclosing on any mortgage 
held by the Secretary under this title, the Secretary shall follow the 
foreclosure procedures of the State in which the property involved is 
located to the extent such procedures are more favorable to the 
borrower than the foreclosure procedures that would otherwise be 
followed by the Secretary. This subsection shall be subject to the 
availability of amounts approved in appropriations Acts, to the 
extent additional budget authority is necessary to carry out this 
subsection.". 
(b) CONFORMING AMENDMENT.—The section heading for section 
505 of the Housing Act of 1949 (42 U.S.C. 1475) is amended to read as 
follows: 
"LOAN PAYMENT MORATORIUM AND FORECLOSURE PROCEDURES". 
SEC. 708. DISPOSITION OF INTERESTS ON INDIAN TRUST LAND. 
Section 509 of the Housing Act of 1949 (42 U.S.C. 1479) is 
amended— 
(1) by redesignating subsection (d) as subsection (e); and 
(2) by inserting after subsection (c) the following new 
subsection: 
"(d) In the event of default involving a security interest in tribal 
allotted or trust land, the Secretary shall only pursue liquidation 
after offering to transfer the account to an eligible tribal member, 
the tribe, or the Indian housing authority serving the tribe or tribes. 
If the Secretary subsequently proceeds to liquidate the account, the 
Secretary shall not sell, transfer, or otherwise dispose of or alienate 
the property except to one of the entities described in the preceding 
sentence.". 
104 STAT. 4288 
PUBLIC LAW 101-625—NOV. 28, 1990 
SEC. 709. HOUSING IN UNDERSERVED AREAS. 
42 use 1479 
(a) PURPOSE.—The purpose of this section is to improve the quality 
"ote- 
of affordable housing in communities that have extremely high 
concentrations of poverty and substandard housing and that have 
been underserved by rural housing programs, including extremely 
distressed areas in the Lower Mississippi Delta and other regions of 
the Nation, by directing Farmers Home Administration assistance 
toward designated underserved areas. 
(b) ASSISTANCE FOR UNDERSERVED AREAS.—Section 509 of 
the 
Housing Act of 1949 (42 U.S.C. 1479), as amended by the preceding 
provisions of this Act, is further amended by adding at the end the 
following new subsection: 
"(f) HOUSING IN UNDERSERVED AREAS.— 
"(1) DESIGNATION OF UNDERSERVED AREA.—The Secretary shall 
designate £is targeted underserved areas 100 counties and 
communities in each of fiscal years 1991 and 1992 that have 
severe, unmet housing needs as determined by the Secretary. A 
county or community shall be eligible for designation if, during 
the 5-year period preceding the year in which the designation is 
made, it has received an average annual amount of assistance 
under this title that is substantially lower than the average 
annual amount of such assistance received during that 5-year 
period by other counties and communities in the State that are 
eligible for such assistance calculated on a per capita basis, and 
has— 
"(A) 20 percent or more of its population at or below the 
poverty level; and 
"(B) 10 percent or more of its population residing in 
substandard housing. 
As used in this paragraph, the term 'poverty level' has the 
meaning given the term in section 102(aX9) of the Housing and 
Community Development Act of 1974. 
"(2) PREFERENCES.—In selecting projects to receive assistance 
with amounts set aside under paragraph (4), the Secretary shall 
give preference to any project located in a county or community 
that has, at the time of designation and as determined by the 
Secretary— 
"(A) 28 percent or more of its population at or below 
poverty level; and 
"(B) 13 percent or more of its population residing in 
substandard housing. 
"(3) OUTREACH PROGRAM AND REVIEW.— 
Public 
"(A) OUTREACH.—The Secretary shall publicize the avail-
information, 
ability to targeted underserved areas of grants and loans 
under this title and promote, to the maximum extent fea-
sible, efforts to apply for those grants and loans for housing 
in targeted underserved areas. 
"(B) REVIEW.—Upon the receipt of data from the 1990 
decennial census, the Secretary shall conduct a review of 
any designations made under paragraph (1) and preferences 
given under paragraph (2) and the eligibility of commu-
nities and counties for such designation Eind preference. 
Reports. 
examining the effects of such data on such eligibility. The 
Secretary shsill submit to the Congress, not later than 9 
months after the availability of the data, a report regarding 
the review, which shall include any recommendations of 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4289 
the Secretary for modifications in the standards for des-
ignation and preference. 
"(4) 
SET-ASIDE FOR 
TARGETED UNDERSERVED AREAS AND 
COLONIAS.— 
"(A) IN GENERAL.—The Secretary shall set aside and 
reserve for assistance in targeted underserved areas an 
amount equal to 3.5 percent in fiscal year 1991 and 5.0 
percent in fiscal year 1992 of the aggregate amount of 
lending authority under sections 502, 504, 514, 515, and 524. 
During each such fiscal year, the Secretary shall set aside 
an amount of section 521 rental assistance that is appro-
priate to provide assistance with respect to the lending 
authority under sections 514 and 515 that is set aside for 
such fiscal year. The Secretary shall establish a procedure 
to reallocate any assistance set aside in any fiscal year for 
targeted underserved areas that has not been expended 
during a reasonable period in such year for use in (i) 
colonias that have applied for and are eligible for assistance 
under subparagraph (B) or paragraph (7) and did not re-
ceive assistance, and (ii) counties and communities eligible 
for designation as targeted underserved areas but which 
were not so designated. The procedure shall also provide 
that any assistance reallocated under the preceding sen-
tence that has not been expended by a reasonable date 
established by the Secretary (which shall be after the 
expiration of the period referred to in the preceding sen-
tence) shall be made available and allocated under the laws 
and regulations relating to such assistance, notwithstand-
ing this subsection. 
"(B) PRIORITY FOR COLONIAS.— 
"(i) Notwithstanding the designation of counties and 
communities as targeted underserved areas under 
paragraph (1) and the provisions of section 520, colonias 
shall be eligible for assistance with amounts reserved 
under subparagraph (A), as provided in this subpara-
graph. 
"(ii) In providing assistance from amounts reserved 
under this paragraph in each fiscal year, the Secretary 
shall give priority to any application for assistance to 
be used in a colonia located in a State described under 
clause (iii). After the Secretary has provided assistance 
under the priority for colonias located in a State in an 
amount equal to 5 percent of the total amount of 
assistance allocated under this title to such State in the 
fiscal year, the priority shall not apply to any applica-
tions for colonias in such State. 
"(iii) This paragraph shall apply to any State for any 
fiscal year following 2 fiscal years in which the State 
obligated the total amount of assistance allocated to it 
under this title during each of such 2 fiscal years. 
"(5) LIST OF UNDERSERVED AREAS,—The Secretary shall publish Federal 
annually the current list of targeted underserved areas in the Register, 
Federal Register. 
publication. 
"(6) PROJECT PREPARATION ASSISTANCE.— 
"(A) IN GENERAL.—The Secretary may make grants to 
eligible applicants under subparagraph (D) to promote the 
104 STAT. 4290 
PUBLIC LAW 101-625—NOV. 28, 1990 
development of affordable housing in targeted underserved 
areas and colonias. 
"(B) USE.—A grant under this paragraph shall not exceed 
an amount that the Secretary determines to equal the 
customary and reasonable costs incurred in preparing an 
application for a loan under section 502, 504, 514, 515, or 
524, or a grant under section 533 (including preapplication 
planning, site analysis, market analysis, and other nec-
essary technical assistance). The Secretary shall adjust the 
loan or grant amount under such sections to take account of 
project preparation costs that have been paid from grant 
proceeds under this paragraph and that normally would be 
reimbursed with proceeds of the loan or grant. 
"(C) APPROVAL.—The Secretary shall approve a properly 
submitted application or issue a written statement indicat-
ing the reasons for disapproval not later than 60 days after 
the receipt of the application. 
"(D) ELIGIBILITY.—For purposes of this paragraph, an 
eligible applicant may be a nonprofit organization or cor-
poration, a community housing development organization, 
State, unit of general local government, or agency of a State 
or unit of general local government. 
"(E) AVAILABILITY OF FUNDING.—Any amounts appro-
priated to carry out this paragraph shall remain available 
until expended. 
"(7) PRIORITY FOR COLONIAS.— 
"(A) IN GENERAL.—In providing Eissistance under this title 
in any fiscal year described under subparagraph (B), each 
State in which colonias are located shall give priority to any 
application for assistance to be used in a colonia. The 
priority under this subparagraph shall not apply in such 
State after 5 percent of the assistance available in such 
fiscal year has been allocated for colonias qualif5dng for the 
priority. 
"(B) COVERED YEARS.—This paragraph shall apply to any 
fiscal year following 2 fiscal years in which the State did 
not obligate the total amount of assistance allocated it 
under this title during each of such 2 fiscal years. 
"(8) DEFINITION OF COLONIA.—For purposes of this subsection, 
the term 'colonia' means any identifiable community that— 
"(A) is in the State of Arizona, California, New Mexico, or 
Texas; 
"(B) is in the area of the United States within 150 miles of 
the border between the United States and Mexico, except 
that the term does not include any standard metropolitan 
statistical area that has a population exceeding 1,000,000; 
"(C) is designated by the State or county in which it is 
located as a colonia; 
"(D) is determined to be a colonia on the basis of objective 
criteria, including lack of potable water supply, lack of 
adequate sewage systems, and lack of decent, safe, and 
sanitary housing; and 
"(E) was in existence and generally recognized as a 
colonia before the date of the enactment of the Cranston-
Gonzalez National Affordable Housing Act.". 
42 use 1479 
(c) REGULATIONS.—Not later than the expiration of the 120-day 
"ote. 
period beginning on the date of enactment of the Cranston-Gonzalez 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4291 
National Affordable Housing Act, the Secretary of Agriculture shall 
issue any regulations necessary to carry out the amendment made 
by this section. 
SEC. 710. RURAL HOUSING INVENTORY. 
(a) TRANSFER FOR USE UNDER SECTION 514.—Section 510(eX3) of 
the Housing Act of 1949 (42 U.S.C. 1480(eX3)) is amended by insert-
ing after "fifty years" the following: ", or for use as rental units 
under section 514 with mortgages containing repajnnent terms with 
up to 33 years,". 
(b) TRANSFER TO FOR-PROFIT ENTITIES.—Section 510(e) of the Hous-
ing Act of 1949 is further amended by striking "or public bodies" 
and inserting ", public bodies, or for-profit entities, which have good 
records of providing low income housing under section 515". 
SEC. 711. RIGHTS OF APPEAL. 
Section 510(g) of the Housing Act of 1949 (42 U.S.C. 1480(g)) is 
amended by inserting before the semicolon the following: ", except 
that rules issued under this subsection may not exclude from their 
coverage decisions made by the Secretary that are not based on 
objective standards contained in published regulations". 
SEC. 712. SECTION 515 LOANS. 
(a) EQUITY TAKEOUT LOANS.—Section 515(t) of the Housing Act of 
1949 (42 U.S.C. 1485(t)) is amended— 
(1) in paragraph (3), by striking "original loan on the project" 
in the last sentence and inserting "original appraised value of 
the project"; 
(2) in paragraph (4)— 
(A) in the first sentence, by inserting "initial" before 
"loan"; and 
(B) in the second sentence, by inserting "initial payments, 
any accrued pajmients, and" after "except that such in the 
second sentence; and 
(3) by striking paragraph (8) and inserting the following new 
paragraph: 
"(8) EFFECTIVE DATE.—The requirements of this subsection 
shall apply to any loan obligated under this section on or after 
December 15,1989. This subsection shall not require retroactive 
reserve account payments with respect to any loan that was 
obligated on or after December 15, 1989, and on or before 
June 16, 1990, but reserve account payments shall be required 
for such loans beginning on the date of the enactment of this 
paragraph.". 
(b) REUSE OF LOAN AUTHORITY.—Section 515(u) of the Housing Act 
of 1949 (42 U.S.C. 1485(u)) is amended by inserting at the end the 
following new sentence: "Any loan authority under this section 
appropriated or made available within limits established in appro-
priations Acts shall remain available until expended.". 
(c) ASSUMPTION OF LOANS.—Section 515 of the Housing Act of 1949 
(42 U.S.C. 1485) is amended by adding at the end the following new 
subsection: 
"(v) ASSUMPTION OF LOANS.—The Secretary may provide for the 
assumption or transfer of a loan or loan obligation under this 
section to any person or entity qualified to receive a loan or loan 
obligation under this section in any case of default or foreclosure 
with respect to the original borrower. The Secretary shall provide in 
104 STAT. 4292 
PUBLIC LAW 101-625—NOV. 28, 1990 
each assumption or transfer under this subsection for the assump-
tion of the obligations, rights, and interests under the terms of the 
loan or loan obligation or such other terms as the Secretary deter-
mines appropriate.". 
SEC. 713. SET-ASIDE OF RURAL RENTAL HOUSING FUNDS. 
Section 515 of the Housing Act of 1949 (42 U.S.C. 1485), as 
amended by the preceding provisions of this Act, is further amended 
by adding at the end the following new subsection: 
"(w) SET-ASIDE OF RURAL RENTAL HOUSING FUNDS.— 
"(1) AUTHORITY.—Except as provided in paragraph (2), the 
Secretary shall set aside from amounts made available for each 
State for loans under this section, not less than 7 percent of the 
amounts available in fiscal year 1991 and not less than 9 
percent of the amounts available in fiscal year 1992. Amounts 
set aside shall be available only for nonprofit entities in the 
State, which may not be wholly or partially owned or controlled 
by a for-profit entity or under whole or partial control with a 
for-profit entity. 
"(2) MINIMUM STATE SET-ASIDE.—If the amount set aside under 
paragraph (1) for any Stete is less than $750,000 in any fiscal 
year, the Secretary shall pool such amount together with set-
aside amounts from other States whose set-aside is less than 
$750,000, and shall make such amounts available for such eli-
gible entities under paragraph (1) in any such State. The Sec-
retory shall esteblish a procedure to provide that any amounts 
pooled under this paragraph from the allocation for any Stote in 
any fiscal year that are not obligated during a reasonable period 
in such year shall be made available for any such eligible 
entities under pareigraph (1) in such Stoto. 
"(3) UNUSED AMOUNTS.—Any amounts set aside or pooled 
under this subsection from the allocation for any Stote in any 
fiscal year that are not obligated by a reasonable date estob-
lished by the Secretory (which shall be after the expiration of 
the period under parsigraph (2)) shall be made available to any 
entity eligible under this section in such Stote.". 
SEC. 714. HOUSING FOR RURAL HOMELESS AND MIGRANT FARMWORKERS. 
42 use 1486. 
(a) IN GENERAL.—Section 516 of the Housing Act of 1949 (42 U.S.C. 
1486 et seq.) is amended by adding at the end the following new 
subsection: 
"(k) 
HOUSING 
FOR RURAL 
HOMELESS AND MIGRANT 
FARM-
WORKERS.— 
"(1) IN GENERAL.—The Secretory may provide financial assist-
ance for providing Eiffordable rentol housing and related facili-
ties for migrant farmworkers and homeless individuals (and the 
families of such individuals) to applicants as provided in this 
subsection. 
"(2) TYPES OF ASSISTANCE.— 
"(A) IN GENERAL.—The Secretory may provide the follow-
ing assistance for housing under this subsection: 
"(i) An advance, in an amount not to exceed $400,000, 
of the cost of acquisition, substontial rehabilitotion, or 
acquisition and rehabilitation of an existing structure 
or construction of a new structure for use in the provi-
sion of housing under this subsection. The repayment 
of any outstanding debt owed on a loan made to pur-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4293 
chase an existing structure shall be considered to be a 
cost of acquisition eligible for an advance under this 
subparagraph if the structure was not used for the 
purposes under this subsection prior to the receipt of 
assistance. 
"(ii) A grant, in an amount not to exceed $400,000, for 
moderate rehabilitation of an existing structure for use 
in the provision of housing under this subsection. 
"(iii) Annual pa3mients for operating costs of such 
housing (without regard to whether the housing is an 
existing structure), not to exceed 75 percent of the 
annual operating costs of such housing. 
"(B) AVAILABLE ASSISTANCE.—A recipient may receive 
assisteince under both clauses (i) and (ii) of subparagraph 
(A). The Secretary may increase the limit contained in such 
clauses to $800,000 in areas which the Secretary finds have 
high acquisition and rehabilitation costs. 
(C) REPAYMENT OF ADVANCE.—Any advance provided 
under subparagraph (AXi) shall be repaid on such terms as 
may be prescribed by the Secretary when the project ceases 
to be used as housing in accordance with the provisions of 
this subsection. Recipients shall be required to repay 100 
percent of the advance if the housing is used for purposes 
under this subsection for fewer than 10 years following 
initial occupancy. If the housing is used for such purposes 
for more than 10 years, the percentage of the amount that 
shall be required to be repaid shall be reduced by 10 
percentage points for each year in excess of 10 that the 
property is so used. 
"(D) PREVENTION OF UNDUE BENEFITS.—Upon any sale or 
other disposition of housing acquired or rehabilitated with 
assistance under this subsection prior to the close of 20 
years after the housing is placed in service, other than a 
sale or other disposition resulting in the use of the project 
for the direct benefit of low income persons or where all of 
the proceeds are used to provide housing for migrant farm-
workers and homeless individuals (and the fEunilies of such 
individuals), the recipient shall comply with such terms and 
conditions as the Secretary may prescribe to prevent the 
recipient from unduly benefiting from the sale or other 
disposition of the project. 
"(3) PROGRAM REQUIREMENTS.— 
"(A) APPUCATIONS.— 
"(i) Applications for assistance under this subsection 
shall be submitted by an applicant in such form and in 
accordance with such procedures as the Secretary shall 
establish. 
"(ii) The Secretary shall require that applications 
contain at a minimum (I) a description of the proposed 
housing, (II) a description of the size and characteristics 
of the population that would occupy the housing, (III) a 
description of any public and private resources that are 
expected to be made available in connection with the 
housing, (IV) a description of the housing needs for 
migrant farmworkers and homeless individuals (and 
the families of such individuals) in the area to be 
served by the housing, and (V) assurances satisfactory 
104 STAT. 4294 
PUBLIC LAW 101-625—NOV. 28, 1990 
to the Secretary that the housing assisted will be oper-
ated for not less than 10 years for the purpose specified 
in the application. 
"(iii) The Secretary shall require that an application 
furnish reasonable assurances that the housing will be 
available for occupancy by homeless individuals (and 
the families of such individuals) only on an emergency 
and temporary basis during the offseason and shall be 
otherwise available for occupancy by migrant farm-
workers (and their families). 
"(iv) The Secretary shall require that an application 
furnish reasonable assurances that the applicant will 
own or have control of a site for the proposed housing 
not later than 6 months after notification of an award 
for grant assistance. An applicant may obtain owner-
ship or control of a suitable site different from the site 
specified in the application. If an applicant fails to 
obtain ownership or control of the site within 1 year 
after notification of an award for grant assistance, the 
grant shall be recaptured and reallocated. 
"(B) SELECTION CRITERIA.—The Secretary shall establish 
selection criteria for a national competition for assistance 
under this subsection, which shall include— 
"(i) the ability of the applicant to develop and operate 
the housing; 
"(ii) the feasibility of the proposal in providing the 
housing; 
"(iii) the need for such housing in the area to be 
served; 
"(iv) the cost effectiveness of the proposed housing; 
' 
(y) the extent to which the project would meet the 
needs of migrant farmworkers and homeless individ-
uals (and the families of such individuals) in the State; 
"(vi) the extent to which the applicant has control of 
the site of the proposed housing; and 
"(vii) such other factors as the Secretary determines 
to be appropriate for purposes of this subsection. 
"(C) REQUIRED AGREEMENTS.—The Secretary may not 
ap-
prove assistance for any housing under this subsection 
unless the applicant agrees— 
"(i) to operate the proposed project as housing for 
migr£int farmworkers and homeless individuals (and 
the families of such individuals) in compliance with the 
provisions of this subsection and the application ap-
proved by the Secretary; 
"(ii) to monitor and report to the Secretary on the 
progress of the housing; and 
"(iii) to comply with such other terms and conditions 
as the Secretary may establish for purposes of this 
subsection. 
"(D) OCCUPANT RENT.—Each migrant farmworker and 
homeless individual residing in a facility assisted under this 
subsection shall pay as rent an amount determined in 
accordance with the provisions of section 3(a) of the United 
States Housing Act of 1937. 
"(4) GUIDELINES.— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4295 
"(A) REGULATIONS.—Not later than 120 days after the 
date of enactment of the Cranston-Gonzalez National 
Affordable Housing Act, the Secretary shall by notice estab-
lish such requirements as may be necessary to carry out the 
provisions of this subsection. 
"(B) LIMITATION ON USE OF FUNDS.—No assistance re-
ceived under this subsection (or any State or local govern-
ment funds used to supplement such assistance) may be 
used to replace other public funds previously used, or des-
ignated for use, to assist homeless individuals (and the 
families of such individuals) or migrant farmworkers. 
"(5) LIMITATION ON ADMINISTRATIVE EXPENSES.—No recipient 
may use more than 5 percent of an advance or grant received 
under this subsection for administrative purposes. 
"(6) REPORTS TO CONGRESS.—The Secretary shall submit an-
nually to the Congress a report summarizing the activities 
carried out under this subsection and setting forth the findings, 
conclusions, and recommendations of the Secretary as a result 
of the activities. The report shall be submitted not later than 3 
months after the end of each fiscal year. 
"(7) DEFINITIONS.—For purposes of this subsection: 
"(A) The term 'applicant' means a State, political subdivi-
sion thereof, Indian tribe, any private nonprofit organiza-
tion incorporated within the State that has applied for a 
grant under this subsection, 
"(B) The term 'homeless individual' has the same mean-
ing given the term under section 103 of the Stewart B. 
McKinney Homeless Assistance Act. 
"(C) The term 'migrant farmworker'— 
"(i) means any person (and the family of such person) 
who (I) receives a substantial portion of his or her 
income from primary production of agricultural or 
aquacultural 
commodities, the 
handling 
of such 
commodities in the unprocessed stage, or the processing 
of such commodities, without respect to the source of 
emplo5anent, and (II) establishes residence in a location 
on a seasonal or temporary basis, in an attempt to 
receive an income as described in subclause (I); and 
"(ii) includes any person (and the family of such 
person) who is retired or disabled, but who met the 
requirements of clause (i) at the time of retirement or 
becoming disabled. 
"(D) The term 'operating costs' means expenses incurred 
by a recipient providing housing under this subsection with 
respect to the administration, maintenance, repair, and 
security of such housing and utilities, fuel, furnishings, and 
equipment for such housing.". 
(b) STUDY OF HOMELESSNESS IN RURAL AREAS.— 
(1) IN GENERAL.—The Secretary of Agriculture shall conduct a 
study 
to 
determine 
the 
extent 
and 
characteristics 
of 
homelessness in rural areas. 
(2) REPORT.—The Secretary of Agriculture shall submit to the 
Congress, not later than the expiration of the 9-month period 
beginning on the date of the enactment of this Act, a report 
describing the findings of the Secretary under the study. The 
report shall contain any recommendations of the Secretary for 
104 STAT. 4296 
PUBLIC LAW 101-625—NOV. 28, 1990 
administrative or legislative action to reduce or alleviate 
homelessness in rural areas. 
SEC. 715. RURAL AREA CLASSIFICATION. 
(a) IN GENERAL.—Section 520 of the Housing Act of 1949 (42 U.S.C. 
1490) is amended— 
(1) in the first sentence— 
(A) by striking "case" and inserting "cases"; 
(B) by inserting after "California" the following: ", and 
Guadalupe, in the State of Arizona"; and 
(2) by striking the last sentence and inserting the following 
new sentence: "For purposes of this title, any area classified as 
'rural' or a 'rural area' prior to October 1, 1990, and determined 
not to be 'rural' or a 'rural area' as a result of data received 
from or after the 1990 decennial census shall continue to be so 
classified until the receipt of data from the decennial census in 
the year 2000, if such area has a population in excess of 10,000 
but not in excess of 25,000, is rural in character, and has a 
serious lack of mortgage credit for lower and moderate-income 
families.". 
42 use 1490 
Ot)) APPUCABILITY.—The amendment made by this section shall 
^°^- 
apply with respect to classification of rural areas for fiscal year 1991 
and any fiscal year thereafter. 
SEC. 716. ASSISTANCE TO REDUCE RENT OVERBURDEN. 
42USCi490a. 
Section 521(a)(2XC) of the Housing Act of 1949 (42 U.S.C. 
1491(a)(2XC)) is amended by adding at the end the following: "Not-
withstanding the preceding sentence, excess funds received from 
tenants in projects financed under section 515 during a fiscal year 
shall be available during the next succeeding fiscal year, together 
with funds provided under subparagraph (D), to the extent approved 
in appropriations Acts, to make assistance payments to reduce rent 
overburden on behalf of tenants of any such project whose rents 
exceed the levels referred to in subparagraph (A). In providing 
assistance to relieve rent overburden, the Secretary shall provide 
assistance with respect to very low-income and low-income families 
to reduce housing rentals to the levels specified in subpara-
graph (A).". 
SEC. 717. HOUSING PRESERVATION GRANTS. 
(a) USE OF DEOBLIGATED FUNDS.—Section 533(cXl) of the Housing 
Act of 1949 (42 U.S.C. 1490m(cXl)) is amended by adding at the end 
) 
the following: "Funds obligated, but subsequently unspent and 
deobligated, may remain available, to the extent provided in appro-
priations Acts, for use as housing preservation grants in ensuing 
fiscal years.". 
(b) REALLOCATION.—Section 533(g) of the Housing Act of 1949 (42 
U.S.C. 1490m(g)) is amended by striking the last sentence and 
inserting the following: "Any amounts which become available as a 
result of actions under this subsection shall be reallocated as hous-
ing preservation grants to such grantee or grantees as the Secretary 
may determine.". 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4297 
SEC. 718. RECIPROCITY IN APPROVAL OF HOUSING SUBDIVISIONS 
AMONG FEDERAL AGENCIES. 
(a) EXTENSION OF AUTHORITY.—Section 535 of the Housing Act of 
1949 (42 U.S.C. 1490o) is amended in subsection (b), by striking 
"6-month period" and inserting "18-month period". 
(b) RETROACTIVITY.—Any administrative approval of any housing 
subdivision made after the expiration of the 6-month period begin-
ning on the date of the enactment of the Department of Housing and 
Urban Development Reform Act of 1989 and before the date of the 
enactment of this Act is hereby approved and shall be considered to 
have been lawfully made, but only if otherwise made in accordance 
with the provisions of section 535(b) of the Housing Act of 1949. 
SEC. 719. RURAL HOUSING TECHNICAL AMENDMENTS. 
(a) RURAL HOUSING ASSISTANCE DEFINITION.—Section 536(h) of the 
Housing Act of 1949 (42 U.S.C. 1490p(h)) is amended by striking the 
period at the end and inserting ", for the original construction or 
development of the project.". 
(b) 
PROHIBITION ON PREPAYMENT OF NEW RURAL HOUSING 
LOANS.—Section 502(cXlXB) of the Housing Act of 1949 (42 U.S.C. 
1472(cXlXB)) is amended by inserting "initial" after "any". 
TITLE VIII—HOUSING FOR PERSONS 
WITH SPECIAL NEEDS 
Subtitle A—Supportive Housing for the Elderly 
SEC. 
8
0
1
. 
SUPPORTIVE 
HOUSING 
FOR 
THE 
ELDERLY. 
(a) IN GENERAL.—Section 202 of the Housing Act of 1959 (12 U.S.C. 
1701q) is amended to read as follows: 
"SEC. 
2
0
2
. 
SUPPORTIVE 
HOUSING 
FOR 
THE 
ELDERLY. 
"(a) PURPOSE.—The purpose of this section is to enable elderly 
persons to live with dignity and independence by expanding the 
supply of supportive housing that— 
"(1) is designed to accommodate the special needs of elderly 
persons; and 
"(2) provides a range of services that are tailored to the needs 
of elderly persons occupying such housing. 
"(b) GENERAL AUTHORITY.—The Secretary is authorized to provide 
assistance to private nonprofit organizations and consumer coopera-
tives to expand the supply of supportive housing for the elderly. 
Such assistance shall be provided as (1) capital advances in accord-
ance with subsection (cXl), and (2) contracts for project rental 
assistance in accordance with subsection (cX2). Such assistance may 
be used to finance the construction, reconstruction, or moderate or 
substantial rehabilitation of a structure or a portion of a structure, 
or the acquisition of a structure from the Resolution Trust Corpora-
tion, to be used as supportive housing for the elderly in accordance 
with this section. Assistance may also cover the cost of real property 
acquisition, site improvement, conversion, demolition, relocation, 
and other expenses that the Secretary determines are necessary to 
expand the supply of supportive housing for the elderly. 
(c) FORMS OF ASSISTANCE.— 
104 STAT. 4298 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(1) CAPITAL ADVANCES.—A capital advance provided under 
this section shall bear no interest and its repayment shall not 
be required so long as the housing remains available for very 
low-income elderly persons in accordance with this section. 
Such advance shall be in an amount calculated in accordance 
with the development cost limitation established in subsection 
(h). 
Government 
"(2) PROJECT RENTAL ASSISTANCE.—Contracts for project rental 
contracts. 
assistance shall obligate the Secretary to make monthly pay-
ments to cover any part of the costs attributed to units occupied 
(or, as approved by the Secretary, held for occupancy) by very 
low-income elderly persons that is not met from project income. 
The annual contract amount for any project shall not exceed 
the sum of the initial annual project rentals for all units so 
occupied and any initial utility allowances for such units, as 
approved by the Secretary. Any contract amounts not used by a 
project in any year shall remain available to the project until 
the expiration of the contract. The Secretary may adjust the 
annual contract amount if the sum of the project income and 
the amount of assistance payments available under this para-
graph are inadequate to provide for reasonable project costs. 
"(3) TENANT RENT CONTRIBUTION.—A very low-income person 
shall pay as rent for a dwelling unit assisted under this section 
the highest of the following amounts, rounded to the nearest 
dollar: (A) 30 percent of the person's adjusted monthly income, 
(B) 10 percent of the person's monthly income, or (C) if the 
person is receiving payments for welfare assistance from a 
public agency and a part of such payments, adjusted in accord-
ance with the person's actual housing costs, is specifically des-
ignated by such agency to meet the person's housing costs, the 
portion of such payments which is so designated. 
"(d) TERM OF COMMITMENT.— 
"(1) USE LIMITATIONS.—All units in housing assisted under 
this section shall be made avEiilable for occupancy by very low-
income elderly persons for not less than 40 years. 
"(2) CONTRACT TERMS.—The initial term of a contract entered 
into under subsection (cX2) shall be 240 months. The Secretary 
shall, to the extent approved in appropriation Acts, extend any 
expiring contract for a term of not less than 60 months. In order 
to facilitate the orderly extension of expiring contracts, the 
Secretary is authorized to make commitments to extend expir-
ing contracts during the year prior to the date of expiration. 
"(e) APPUCATIONS.—Funds made available under this section shall 
be allocated by the Secretary among approvable applications 
submitted by private nonprofit organizations. Applications for 
assistance under this section shall be submitted by an applicant in 
such form and in accordance with such procedures as the Secretary 
shall establish. Such applications shall contain— 
"(1) a description of the proposed housing; 
"(2) a description of the assistance the applicant seeks under 
this section; 
"(3) a description of the resources that are expected to be 
made available in compliance with subsection (h); 
"(4) a description of (A) the category or categories of elderly 
persons the housing is intended to serve; (B) the supportive 
services, if any, to be provided to the persons occupjdng such 
housing; (C) the manner in which such services will be provided 
PUBLIC LAW 101-625-NOV. 28, 1990 
104 STAT. 4299 
to such persons, including, in the case of frail elderly persons, 
evidence of such residential supervision as the Secretary deter-
mines is necessary to facilitate the adequate provision of such 
services; and (D) the public or private sources of assistance that 
can reasonably be expected to fund or provide such services; 
"(5) a certification from the appropriate State or local sigency 
(as determined by the Secretary) that the provision of services 
identified in paragraph (4) is well designed to serve the special 
needs of the category or categories of elderly persons the hous-
ing is intended to serve; 
(6) a certification from the public official responsible for 
submitting a housing strategy for the jurisdiction to be served in 
accordance with section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed project is consistent 
with the approved housing strategy; and 
"(7) such other information or certifications that the Sec-
retary determines to be necessary or appropriate to achieve the 
purposes of this section. 
The Secretary shall not reject an application on technical grounds 
without giving notice of that rejection and the basis therefor to the 
applicant and affording the applicant an opportunity to respond, 
(f) SELECTION CRITERIA.—The Secretary shall establish selection 
criteria for assistance under this section, which shall include— 
"(1) the ability of the applicant to develop and operate the 
proposed housing; 
"(2) the need for supportive housing for the elderly in the area 
to be served; 
"(3) the extent to which the proposed size and unit mix of the 
housing will enable the applicant to manage and operate the 
housing efficiently and ensure that the provision of supportive 
services will be accomplished in an economical fashion; 
"(4) the extent to which the proposed design of the housing 
will meet the special physical needs of elderly persons; 
"(5) the extent to which the applicant has demonstrated that 
the supportive services identified in subsection (eX4) will be 
provided on a consistent, long-term basis; 
"(6) the extent to which the proposed design of the housing 
will accommodate the provision of supportive services that are 
expected to be needed, either initially or over the useful life of 
the housing, by the category or categories of elderly persons the 
housing is intended to serve; and 
"(7) such other factors as the Secretary determines to be 
appropriate to ensure that funds made available under this 
section are used effectively. 
"(g) PROVISIONS OF SERVICES.— 
"(1) IN GENERAL.—In carrying out the provisions of this sec-
tion, the Secretary shall ensure that housing assisted under this 
section provides a range of services tailored to the needs of the 
category or categories of elderly persons (including frail elderly 
persons) occup3dng such housing. Such services may include (A) 
meal service adequate to meet nutritional need; (B) house-
keeping aid; (C) personal assistance; (D) transportation services; 
(E) health-related services; and (F) such other services as the 
Secretary deems essential for maintaining independent living. 
The Secretary may permit the provision of services to elderly 
persons and persons with disabilities who are not residents if 
the participation of such persons will not adversely affect the 
104 STAT. 4300 
PUBLIC LAW 101-625—NOV. 28, 1990 
cost-effectiveness or operation of the progrEim or add signifi-
cantly to the need for assistance under this Act. 
"(2) LOCAL COORDINATION OF SERVICES.—The Secretary shall 
ensure that owners have the managerial capacity to— 
"(A) assess on an ongoing basis the service needs of 
residents; 
"(B) coordinate the provision of supportive services and 
tailor such services to the individual needs of residents; and 
"(C) seek on a continuous basis new sources of assistance 
to ensure the long-term provision of supportive services. 
Any cost associated with this subsection shall be an eligible cost 
under subsection (cX2). Any cost associated with the employ-
ment of a service coordinator in housing principally serving 
frail elderly persons shall also be an eligible cost except where 
the project is receiving congregate housing services assistance 
under section 802 of the Cranston-Gonzalez National Affordable 
Housing Act. 
\ 
"(h) DEVELOPMENT COST LIMITATIONS.— 
Federal 
"(1) IN GENERAL.—The Secretary shall periodically establish 
^hi^*^t' 
development cost limitations by market area for various types 
pubhca ion. 
^^^ ^^^^ ^^ supportive housing for the elderly by publishing a 
notice of the cost limitations in the Federal Register. The cost 
limitations shEill reflect— 
"(A) the cost of construction, reconstruction, or re-
habilitation of supportive housing for the elderly that meets 
applicable State and local housing and building codes; 
"(B) the cost of movables necessary to the basic operation 
of the housing, as determined by the Secretary; 
"(C) the cost of special design features necessary to make 
the housing accessible to elderly persons; 
"(D) the cost of special design features necessary to make 
individual dwelling units meet the physical needs of elderly 
project residents; 
"(E) the cost of congregate space necessary to accommo-
date the provision of supportive services to elderly project 
residents; 
"(F) if the housing is newly constructed, the cost of 
meeting the energy efficiency standards promulgated by 
the Secretary in accordance with section 109 of the Cran-
ston-Gonzalez National Affordable Housing Act; and 
"(G) the cost of land, including necessary site improve-
ment. 
In establishing development cost limitations for a given market 
area under this subsection, the Secretary shall use data that 
reflect currently prevailing costs of construction, reconstruc-
tion, or rehabilitation, and land acquisition in the area. For 
purposes of this paragrapji, the term 'congregate space' shall 
include space for cafeterias or dining halls, community rooms or 
buildings, workshops, adult day health facilities, or other out-
patient health facilities, or other essential service facilities. 
"(2) RTC PROPERTIES.—In the case of existing housing and 
related facilities to be acquired from the Resolution Trust Cor-
poration under section 21A(c) of the Federal Home Loan Bank 
Act, the cost limitations shall include— 
"(A) the cost of acquiring such housing, 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4301 
"(B) the cost of rehabilitation, alteration, conversion, or 
improvement, 
including the moderate 
rehabilitation 
thereof, and 
"(C) the cost of the land on which the housing and related 
facilities are located. 
"(3) ANNUAL ADJUSTMENTS.—The Secretary shall adjust the 
cost limitation not less than once annually to reflect changes in 
the general level of construction, reconstruction, or rehabilita-
tion costs. 
"(4) INCENTIVES FOR SAVINGS.— 
"(A) SPECIAL HOUSING ACCOUNT.—The Secretary shall use 
the development cost limitations established under para-
graph (1) or (2) to calculate the amount of financing to be 
made available to individual owners. Owners which incur 
actual development costs that are less than the amount of 
financing shall be entitled to retain 50 percent of the 
savings in a special housing account. Such percentage shall 
be increased to 75 percent for owners which add energy 
efficiency features which— 
"(i) exceed the energy efficiency standards promul-
gated by the Secretary in accordance with section 109 
of the Cranston-Gonzalez National Affordable Housing 
Act; 
"(ii) substantially reduce the life-cycle cost of the 
housing; 
"(iii) reduce gross rent requirements; and 
"(iv) enhance tenant comfort and convenience. 
"(B) USES.—The special housing account established 
under subparagraph (A) may be used (i) to supplement 
services provided to residents of the housing or funds set 
aside for replacement reserves, or (ii) for such other pur-
poses as determined by the Secretary. 
"(5) DESIGN FLEXIBILITY.—The Secretary shall, to the extent 
practicable, give owners the flexibility to design housing appro-
priate to their location and proposed resident population within 
broadly defined pareimeters. 
"(6) USE OF FUNDS FROM OTHER SOURCES.—An owner shall be 
permitted voluntarily to provide funds from 
non-Federal 
sources for amenities and other features of appropriate design 
and construction suitable for supportive housing for the elderly 
if the cost of such amenities is (A) not financed with the 
advance, and (B) is not taken into account in determining the 
amount of Federal assistance or of the rent contribution of 
tenants. 
"(i) TENANT SELECTION.— 
"(1) IN GENERAL.—An owner shall adopt written tenant selec-
tion procedures that are satisfactory to the Secretary as (A) 
consistent with the purpose of improving housing opportunities 
for very low-income persons with disabilities; and (B) reasonably 
related to program eligibility and an applicant's ability to per-
form the obligations of the lease. Owners shall promptly notify 
in writing any rejected applicant of the grounds for any 
rejection. 
"(2) INFORMATION REGARDING HOUSING UNDER THIS SECTION.— 
The Secretary shall provide to an appropriate agency in each 
area (which may be the applicable Area Agency on the Aging) 
104 STAT. 4302 
PUBLIC LAW 101-625—NOV. 28, 1990 
information regarding the availability of housing assisted under 
this section, 
"(j) MISCELLANEOUS PROVISIONS.— 
"(1) TECHNICAL ASSISTANCE.—The Secretary shall make avail-
able appropriate technical assistance to assure that applicants 
having limited resources, particularly minority applicants, are 
able to participate more fully in the program carried out under 
this section. 
"(2) CIVIL RIGHTS COMPUANCE.—Each owner shall certify, to 
the satisfaction of the Secretary, that assistance made available 
under this section will be conducted and administered in 
conformity with title VI of the Civil Rights Act of 1964, the Fair 
Housing Act, and other Federal, State, and local laws prohibit-
ing discrimination and promoting equal opportunity. 
"(3) OWNER DEPOSIT.— 
"(A) IN GENERAL.—The Secretary shall require an owner 
to deposit an amount not to exceed $25,000 in a special 
escrow account to assure the owner's commitment to the 
housing. 
"(B) REDUCTION OF REQUIREMENT.—The Secretary 
may 
reduce or waive the owner deposit specified under para-
graph (1) for individual applicants if the Secretary finds 
that such waiver or reduction is necessary to achieve the 
purposes of this section and the applicant demonstrates to 
the satisfaction of the Secretary that it has the capacity to 
manage and maintain the housing in accordance with this 
section. 
"(4) NOTICE OF APPEAL.—The Secretary shall notify an owner 
not less than 30 days prior to canceling any reservation of 
assistance provided under this section. During the 30-day period 
following the receipt of a notice under the preceding sentence, 
an owner may appeal the proposed cancellation of loan author-
ity. Such appeal, including review by the Secretary, shall be 
completed not later than 45 days after the appeal is filed. 
"(5) LABOR.— 
"(A) IN GENERAL.—Any contract for the construction of 
affordable housing with 12 or more units assisted with 
funds made available under this subtitle shall contain a 
provision requiring that not less than the wages prevailing 
in the locality, as predetermined by the Secretary of Labor 
pursuant to the Davis-Bacon Act (40 U.S.C. 276a-276a-5), 
shall be paid to all laborers and mechemics employed in the 
development of affordable housing involved, and participat-
ing jurisdictions shall require certification £is to compliance 
with the provisions of this section prior to making any 
payment under such contract. 
(B) WAIVER.—Subparagraph (A) shall not apply if the 
individual receives no compensation or is paid expenses, 
resisonable benefits, or a nominal fee to perform the serv-
ices for which the individual volunteered and such persons 
are not otherwise employed at any time in the construction 
work. 
"(k) DEFINITIONS.— 
"(1) The term 'elderly person' means a household composed of 
one or more persons at least one of whom is 62 years of age or 
more at the time of initial occupancy. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4303 
"(2) The term 'frail elderly' means an elderly person who is 
unable to perform at least 3 activities of daily living adopted by 
the Secretary for purposes of this program. Owners may estab-
lish additional eligibility requirements (acceptable to the Sec-
retary) based on the standards in local supportive services 
programs. 
"(3) The term 'owner' means a private nonprofit organization 
that receives assistance under this section to develop and oper-
ate supportive housing for the elderly. 
"(4) The term 'private nonprofit organization' means guiy 
incorporated private institution or foundation— 
"(A) no part of the net earnings of which, inures to the 
benefit of any member, founder, contributor, or individual; 
"(B) which has a governing board (i) the membership of 
which is selected in a manner to assure that there is 
significant representation of the views of the community in 
which such housing is located, and (ii) which is responsible 
for the operation of the housing assisted under this section; 
and 
"(C) which is approved by the Secretary as to financial 
responsibility. 
"(5) The term 'State' includes the several States, the District 
of Columbia, the Commonwealth of Puerto Rico, and the posses-
sions of the United States. 
"(6) The term 'Secretary' means the Secretary of Housing and 
Urban Development. 
"(7) The term 'supportive housing for the elderly' means 
housing that is designed (A) to meet the special physical needs 
of elderly persons and (B) to accommodate the provision of 
supportive services that are expected to be needed, either ini-
tially or over the useful life of the housing, by the category or 
categories of elderly persons that the housing is intended to 
serve. 
"(8) The term 'very low-income' has the same meaning as 
given the term 'very low-income families' under section 3(bX2) 
of the United States Housing Act of 1937. 
"(1) AUTHORIZATIONS.— 
"(1) CAPITAL ADVANCES.—There are authorized to be appro-
priated for the purpose of funding capital advances in accord-
ance with subsection (cXD $659,000,000 for fiscal year 1992. 
Amounts so appropriated, the repayments from such advances, 
and the proceeds from notes or obligations issued under this 
section prior to the enactment of the Cranston-Gonzalez Na-
tional Affordable Housing Act shall constitute a revolving fund 
to be used by the Secretary in canying out this section. 
"(2) PROJECT RENTAL ASSISTANCE.—For the purpose of funding 
contracts for project rental assistance in accordance with 
subsection (cX2) the Secretary may, to the extent approved in an 
appropriations Act, reserve authority to enter into obligations 
aggregating $363,000,000 for fiscal year 1992. 
"(3) NoNMETROPOLTTAN ALLOCATION.—Not less than 20 per-
cent of the funds made available under this subtitle shall be 
allocated by the Secretary 
on a 
national 
basis for 
nonmetropolitan areas.", 
(b) CONFORMING AMENDMENT.—Section 213(a) of the Housing and 
Community Development Act of 1974 is amended by striking "sec- 42 use 1439. 
tion 202 of the Housing Act of 1959". 
104 STAT. 4304 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 1701q 
(c) EFFECTIVE DATE AND AppucABiUTY.—The amendments made 
°°*®- 
by this section shall take effect on October 1, 1991, with respect to 
projects approved on or after such date. The Secretary shall issue 
regulations for such purpose after notice and an opportunity for 
gublic comment in accordance with section 553 of title 5, United 
tates Code. Regulations shall be issued for comment not later than 
180 days after the date of enactment of this Act. 
42 use 1701q 
(d) EXPEDITED FINANCING AND CONSTRUCTION.— 
note. 
(1) IN GENERAL.—The Secretary may, subject to the availabil-
ity of appropriations for contract amendments for the purposes 
of this subsection— 
(A) provide such adjustments and waivers to the cost 
limitations specified under 24 CFR 885.410(aXl); and 
(B) m£ike such adjustments to the relevant fair market 
rent limitations established under section 8(cXl) of the 
United States Housing Act of 1937 in providing assistance 
under such Act, 
as are necessary to ensure the expedited financing and construc-
tion of qualified supportive housing for the elderly provided 
that the Secretary finds that any applicable cost containment 
rules and regulations have been satisfied. 
(2) DEFINITION.—For purposes of this subsection, the term 
"supportive housing for the elderly" means housing— 
(A) located in a high-cost jurisdiction; and 
(B) for which a loan reservation was made under section 
202 of the Housing Act of 1959, 3 years before the date of 
enactment of this Act but for which no loan has been 
executed and recorded. 
(e) AUTHORIZATION FOR EXISTING PROGRAM.—Section 202(a)(4XC) of 
the Housing Act of 1959 (12 U.S.C. 1701q(aX4XC)) is amended— 
(1) by striking all that follows "Acts" the first time it appears 
and inserting a period; and 
(2) by adding at the end the following: "For fiscal year 1991, 
not more than $714,200,000 may be approved in appropriation 
Acts for such loans.". 
42 use 8011. 
SEC. 802. REVISED CONGREGATE HOUSING SERVICES PROGRAM. 
(a) FINDINGS AND PURPOSES.— 
(1) FINDINGS.—The Congress finds that— 
(A) the effective provision of congregate services may 
require the redesign of units and buildings to meet the 
special physical needs of the frail elderly persons and the 
creation of congregate space to accommodate services that 
enhsince independent living; 
(B) congregate housing, coordinated with the delivery of 
supportive services, offers an innovative, proven, and cost-
effective means of enabling frail older persons and persons 
with 
disabilities 
to 
maintain 
their 
dignity 
and 
independence; 
(C) independent living with assistance is a preferable 
housing alternative to institutionalization for many frail 
older persons £ind persons with disabilities; 
(D) 365,000 persons in federally assisted housing experi-
ence some form of frailty, and the number is expecteid to 
increase as the general population ages; 
(E) an estimated 20 to 30 percent of older adults living in 
federally assisted housing experience some form of frailty; 
,^^-'f*-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4305 
(F) a large and growing number of frail elderly residents 
face premature or unnecessary institutionalization because 
of the absence of or deficiencies in the availability, ade-
quacy, coordination, or delivery of supportive services; 
(G) the support service needs of frail residents of assisted 
housing are beyond the resources and experience that hous-
ing managers have for meeting such needs; 
(H) supportive services would promote the invaluable 
option of independent living for nonelderly persons with 
disabilities in federally assisted housing; 
(I) approximately 25 percent of congregate housing serv-
ices program sites provide congregate services to young 
individuals with disabilities; 
(J) to the extent that institutionalized older adults do not 
need the full costly support provided by such care, public 
moneys could be more effectively spent providing the nec-
essary services in a noninstitutional setting; and 
(K) the Congregate Housing Services Program, estab-
lished by Congress in 1978, and similar programs providing 
in-home services have been effective in preventing unneces-
sary 
institutionalization 
and 
encouraging 
deinstitu-
tionalization. 
(2) PURPOSES.—The purposes of this section are— 
(A) to provide assistance to retrofit individual dwelling 
units and renovate public and common areas in eligible 
housing to meet the special physical needs of eligible 
residents; 
(B) to create and rehabilitate congregate space in or 
adjacent to such housing to accommodate supportive serv-
ices that enhance independent living; 
(C) to improve the capacity of management to assess the 
service needs of eligible residents, coordinate the provision 
of supportive services that meet the needs of eligible resi-
dents and ensure the long-term provision of such services; 
(D) to provide services in federally assisted housing to 
prevent premature and inappropriate institutionalization 
in a manner that respects the dignity of the elderly £ind 
persons with disabilities; 
(E) to provide readily available and efficient supportive 
services that provide a choice in supported living arrange-
ments by utilizing the services of an on-site coordinator, 
with emphasis on maintaining a continuum of care for the 
vulnerable elderly; 
(F) to improve the quality of life of older Americans living 
in federally assisted housing; 
(G) to preserve the viability of existing affordable housing 
projects for lower-income older residents who are aging in 
place by assisting managers of such housing with the dif-
ficulties and challenges created by serying older residents; 
(H) to develop partnerships between the Federal Govern-
ment and State governments in providing services to the 
frail elderly and persons with disabilities; and 
(I) to utilize Federal and State funds in a more cost-
effective and humane way in serving the needs of older 
adults, 
(b) CONTRACTS FOR CONGREGATE SERVICES PROGRAMS.— 
104 STAT. 4306 
PUBLIC LAW 101-625—NOV. 28, 1990 
(1) IN GENERAL.—The Secretary of Housing and Urban Devel-
opment and the Secretary of Agriculture (through Adminis-
trator of the Farmers Home Administration) shall enter into 
contracts with States, Indian tribes, units of general local 
government and local nonprofit housing sponsors, utilizing any 
amounts appropriated under subsection (n)— 
(A) to provide congregate services programs for eligible 
project residents to promote and encoursige maximum 
independence within a home environment for such resi-
dents capable of self-care with appropriate supportive serv-
ices; or 
(B) to adapt housing to better accommodate the physical 
requirements and service needs of eligible residents. 
(2) TERM OF CONTRACTS.—Each contract between the Sec-
retary concerned and a State, Indian tribe, or unit of general 
local government, or local nonprofit housing sponsor, shall be 
for a term of 5 years and shall be renewable at the expiration of 
the term, except as otherwise provided in this section. 
(c) RESERVATION OF AMOUNTS.—For each Stete, Indian tribe, unit 
of general local government, and nonprofit housing sponsor, receiv-
ing a contract under this subsection, the Secretary concerned shall 
reserve a sum equal to the total approved contract amount from the 
amount authorized and appropriated for the fiscal year in which the 
notification date of funding approval occurs. 
(d) ELIGIBLE ACTIVITIES.— 
(1) IN GENERAL.—A congregate services program under this 
section shall provide meal and other services for eligible project 
residents (and other residents and nonresidents, as provided in 
subsection (e)), as provided in this section, that are coordinated 
on site. 
(2) MEAL SERVICES.—Congregate services programs assisted 
under this section shall include meal service adequate to meet 
at least one-third of the daily nutritional needs of eligible 
project residents, as follows: 
(A) FOOD STAMPS AND AGRICULTURAL COMMODITIES.—In 
providing meal services under this paragraph, each con-
gregate services program— 
(i) shall— 
(I) apply for approved as a retail food store under 
section 9 of the Food Stamp Act of 1977 (42 U.S.C. 
2018); and 
(II) if approved under such section, accept cou-
pons (as defined in section 3(e) of such Act) as 
payment from individuals to whom such meal serv-
ices are provided; and 
(ii) shall request, and use to provide such meal serv-
ices, agricultural commodities made available without 
charge by the Secretary of Agriculture. 
(B) PREFERENCE FOR NUTRITION PROVIDERS.—In contract-
ing for or otherwise providing for meal services under this 
paragraph, each congregate services program shall give 
preference to any provider of meal services who— 
(i) receives assistance under title III of the Older 
Americans Act of 1965; or 
(ii) has experience, according to standards as the 
Secretery shall require, in providing meal services in a 
housing project under the Congregate Housing Services 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4307 
Act of 1978 or any other program for congregate 
services. 
(3) RETROFIT AND RENOVATION.—Assistance under this section 
may be provided with respect to eUgible housing for the elderly 
for— 
(A) retrofitting of individual dwelling units to meet the 
special physical needs of current or future residents who 
are or are expected to be eligible residents, which retro-
fitting may include— 
(i) widening of doors to allow passage by persons with 
disabilities in wheelchairs into and within units in the 
project; 
(ii) placement of light switches, electrical outlets, 
thermostats and other environmental controls in acces-
sible locations; 
(iii) installation of grab bars in bathrooms or the 
placement of reinforcements in bathroom walls to 
allow later installation of grab bars; 
(iv) redesign of usable kitchens and bathrooms to 
permit a person in a wheelchair to maneuver about the 
space; and 
(v) such other features of adaptive design that the 
Secretary finds are appropriate to meet the special 
needs of such residents; 
(B) such renovation as is necessary to ensure that public 
and common areas are readily accessible to and usable by 
eligible residents; 
(C) renovation, conversion, or combination of vacant 
dwelling units to create congregate space to accommodate 
the provision of supportive services to eligible residents; 
(D) renovation of existing congregate space to accommo-
date the provision of supportive services to eligible resi-
dents; and 
(E) construction or renovation of facilities to create 
conveniently located congregate space to accommodate the 
provision of supportive services to eligible residents. 
For purposes of this paragraph, the term "congregate space" 
shall include space for cafeterias or dining halls, community 
rooms or buildings, workshops, adult day health facilities, or 
other outpatient health facilities, or other essential service 
facilities. 
(4) SERVICE COORDINATOR.—Assistance under this section may 
be provided with respect to the emplojnnent of one or more 
individuals (hereinafter referred to as "service coordinator") 
who may be responsible for— 
(A) working with the professional assessment committee 
established under subsection (f) on an ongoing basis to 
assess the service needs of eligible residents; 
(B) working with service providers and the professional 
assessment committee to tailor the provision of services to 
the needs and characteristics of eligible residents; 
(C) mobilizing public and private resources to ensure that 
the qualifying supportive services identified pursuant to 
subsection (d) can be funded over the time period identified 
under such subsection; 
104 STAT. 4308 
PUBLIC LAW 101-625—NOV. 28, 1990 
(D) monitoring and evaluating the impact and effective-
ness of any supportive service program receiving capital or 
operating assistance under this section; and 
(E) performing such other duties and functions that the 
Secretary deems appropriate to enable frail elderly persons 
residing in federally assisted housing to live with dignity 
and independence. 
The Secretary shall establish such minimum qualifications and 
standards for the position of service coordinator that the Sec-
retary deems necessary to ensure sound management. The Sec-
retary may fund the employment of service coordinators by 
using amounts appropriated under this section and by permit-
ting owners to use existing sources of funds, including excess 
project reserves. 
(5) OTHER SERVICES.—Congregate services programs assisted 
under this section may include services for transportation, per-
sonal care, dressing, bathing, toileting, housekeeping, chore 
assistance, nonmedical counseling, assessment of the safety of 
housing units, group and socialization activities, assistance with 
medications (in accordance with any applicable State law), case 
management, personal emergency response, and other services 
to prevent premature and unnecessary institutionalization of 
eligible project residents. 
(6) DETERMINATION OF NEEDS.—In determining the services to 
be provided to eligible project residents under a congregate 
services program assisted under this section, the program shall 
provide for consideration of the needs and wants of eligible 
project residents. 
(7) FEES.— 
(A) EuGiBLE PROJECT RESIDENTS.—The owuer of each eli-
gible housing project shall establish fees for meals and 
other services provided under a congregate services pro-
gram to eligible project residents, which shall be sufficient 
to provide 10 percent of the costs of the services provided. 
The Secretary concerned shall provide for the waiver of fees 
under this paragraph for individuals whose incomes are 
insufficient to provide for any pajonent. The fees for meals 
shall be in the following amounts: 
(i) FULL MEAL SERVICES.—The fees for residents 
receiving more than 1 meal per day, 7 days per week, 
shall be reasonable and shall equal between 10 and 20 
percent of the adjusted income of the project resident 
(as such income is determined under section 3(b) of the 
United States Housing Act of 1937), or the cost of 
providing the services, whichever is less. 
(ii) LESS THAN FULL MEAL SERVICES.—The fees for 
residents receiving meal services less frequently than 
as described in the preceding sentence shall be in an 
amount equal to 10 percent of such adjusted income of 
the project resident or the cost of providing the serv-
ices, whichever is less. 
(B) OTHER RESIDENTS AND NONRESIDENTS.—Fees shall be 
established under this paragraph for residents of eligible 
housing projects (other than eligible project residents) and 
for nonresidents that receive services from a congregate 
services program pursuant to subsection (e). Such fees shall 
be in an amount equal to the cost of providing the services. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4309 
(8) DIRECT AND INDIRECT PROVISION OF SERVICES.—Any State, 
Indian tribe, unit of general local government, or nonprofit 
housing sponsor that receives assistance under this section may 
provide congregate services directly to eligible project residents 
or may, by contract or lease, provide such services through 
other appropriate agencies or providers. 
(e) EUGIBIUTY FOR SERVICES.— 
(1) EuGiBLE PROJECT RESIDENTS.—Any eligible resident who is 
a resident of an eligible housing project (or who with deinstitu-
tionalization and appropriate supportive services under this 
section could become a resident of eligible federally assisted 
housing) shall be eligible for services under a congregate serv-
ices program assisted under this section. 
(2) ECONOMIC NEED.—In providing services under a congregate 
services program, the program shall give consideration to serv-
ing eligible project residents with the greatest economic need. 
(3) IDENTIFICATION.— 
(A) IN GENERAL.—A professional assessment committee 
under subparagraph (B) shall identify eligible project resi-
dents under paragraph (1) and shall designate services 
appropriate to the functional abilities and needs of each 
eligible project resident. The committee shall utilize proce-
dures that ensure that the process of determining eligibility 
of individuals for congregate services shall accord such 
individuals fair treatment and due process and a right of 
appeal of the determination of eligibility, and shall also 
ensure the confidentiality of personal and medical records. 
(B) PROFESSIONAL ASSESSMENT COMMITTEE.—A profes-
sional assessment committee under this section shall con-
sist of not less than 3 individuals, who shall be appointed to 
the committee by the officials of the eligible housing project 
responsible for the congregate services program, and shall 
include qualified medical and other health and social serv-
ices professionals competent to appraise the functional 
abilities of the frail elderly and persons with disabilities in 
relation to the performance of tasks of daily living. 
(4) ELIGIBILITY OF OTHER RESIDENTS.—The elderly and persons 
with disabilities who reside in an eligible housing project other 
than eligible project residents under paragraph (1) may receive 
services from a congregate services program under this section 
if the housing managers, congregate service coordinators, and 
the professional assessment committee jointly determine that 
the participation of such individuals will not negatively affect 
the provision of services to eligible project residents. Residents 
eligible for services under this paragraph shall pay fees as 
provided under subsection (d). 
(5) ELIGIBILITY OF NONRESIDENTS.—The Secretary may permit 
the provision of services to elderly persons and persons with 
disabilities who are not residents if the participation of such 
persons will not adversely affect the cost-effectiveness or oper-
ation of the program or add significantly to the need for assist-
since under this section. 
(f) EUGIBLE CONTRACT RECIPIENTS AND DISTRIBUTION OF ASSIST-
ANCE.—The Secretary concerned may provide assistance under this 
section and enter into contracts under subsection (b) with— 
(1) owners of eligible housing; 
104 STAT. 4310 
PUBLIC LAW 101-625—NOV. 28, 1990 
(2) States that submit applications in behalf of owners of 
eligible housing; and 
(3) Indian tribes and units of general local government that 
submit applications on behalf of owners of eligible housing. 
(g) APPUCATIONS.—The funds made available under this section 
shall be allocated by the Secretary among approvable applications 
submitted by or on behalf of owners. Applications for assistance 
under this section shall be submitted in such form and in accordance 
with such procedures as the Secretary shall establish. Applications 
for assistance shall contain— 
(1) a description of the type of assistance the applicant is 
applying for; 
(2) in the case of an application involving rehabilitation or 
retrofit, a description of the activities to be carried out, the 
number of elderly persons to be served, the costs of such activi-
ties, and evidence of a commitment for the services to be 
associated with the project; 
(3) a description of qualifying supportive services that can 
reasonably be expected to be made available to eligible residents 
over a 5-year period; 
(4) a firm commitment from one or more sources of assistance 
ensuring that some or all of the qualifying supportive services 
identified under paragraph (3) will be provided for not less than 
1 year following the completion of activities assisted under 
subsection (d); 
(5) a description of public or private sources of assistance that 
are likely to fund or provide qualifying supportive services, 
including evidence of any intention to provide assistance 
expressed by State and local governments, private foundations, 
and other organizations (including for-profit and nonprofit 
organizations); 
(6) a certifications from the appropriate State or local agency 
(as determined by the Secretary) that— 
(A) the provision of the qualifjdng supportive services 
identified under paragraph (3) will enable eligible residents 
to live independently and avoid unnecessary institutional-
ization, 
(B) there is a reasonable likelihood that such services will 
be funded or provided for the entire period specified under 
paragraph (3), and 
(C) the agency and the applicant will, during the term of 
the contract, actively seek assistance for such services from 
other sources; 
(7) a description of any fees that would be established pursu-
ant to subsection (d); and 
(8) such other information or certifications that the Secretary 
determines to be necessary or appropriate to achieve the pur-
poses of this section. 
The Secretary shall act on each application within 60 days of its 
submission. 
(h) 
SELECTION AND EVALUATION OF APPUCATIONS AND PRO-
GRAMS.— 
(1) IN GENERAL.—Each Secretary concerned shall establish 
criteria for selecting States, Indian tribes, units of general local 
government, and local nonprofit housing sponsors to receive 
assistance under this section, and shedl select such entities to 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4311 
receive assistance. The criteria for selection shall include 
consideration of— 
(A) the extent to which the activities described in subsec-
tion (dX3) will foster independent living and the provision of 
such services; 
(B) the types and priorities of the basic services proposed 
to be provided, the appropriateness of the targeting of 
services, the methods of providing for deinstitutionalized 
older individuals and individuals with disabilities, and the 
relationship of the proposal to the needs and characteristics 
of the eligible residents of the projects where the services 
are to be provided; 
(C) the schedule for establishment of services following 
approval of the application; 
(D) the degree to which local social services are adequate 
for the purpose of assisting eligible project residents to 
maintain independent living and avoid unnecessary institu-
tionalization; 
(E) the professional qualifications of the members of the 
professional assessment committee; 
(F) the reasonableness and application of fees schedules 
established for congregate services; 
(G) the adequacy and accuracy of the proposed budgets; 
and 
(H) the extent to which the owner will provide funds from 
other services in excess of that required by this section. 
(2) EVALUATION OF PROVISION OF CONGREGATE SERVICES PRO-
GRAMS.—The Secretary of Housing and Urban Development and Regulations. 
the Secretary of Agriculture shall, by regulation under subsec-
tion (n), establish procedures for States, Indian tribes, and units 
of general local government receiving assistance under this 
section— 
(A) to review and evaluate the performance of the con-
gregate services programs of eligible housing projects 
receiving assistance under this section in such State; and 
(B) to submit annually, to the Secretary concerned, a Reports, 
report evaluating the impact and effectiveness of con-
gregate services programs in the entity assisted under this 
section. 
(i) CONGREGATE SERVICES PROGRAM FUNDING.— 
(1) COST DISTRIBUTION.— 
(A) CONTRIBUTION REQUIREMENT.—In providing contracts 
under subsection (b), each Secretary concerned shall pro-
vide for the cost of providing the congregate services pro-
gram assisted under this section to be distributed as follows: 
(i) Each State, Indian tribe, unit of general govern-
ment, or nonprofit housing sponsor that receives 
amounts under a contract under subsection (b) shall 
supplement any such amount with amounts sufficient 
to provide 50 percent of the cost of providing the con-
gregate services program. Any monetary or in-kind 
contributions received by a congregate services pro-
gram under the Congregate Housing Services Act of 
1978 may be considered for purposes of fulfilling the 
requirement under this clause. The Secretary con-
cerned shall encourage owners to use excess residual 
104 STAT. 4312 
PUBLIC LAW 101-625—NOV. 28, 1990 
receipts to the extent available to supplement funds for 
retrofit and supportive services under this section. 
(ii) The Secretary concerned shall provide 40 percent 
of the cost, with amounts under contracts under subsec-
tion (b). 
(iii) Fees under subsection (dX7) shall provide 10 
percent of the cost. 
(B) EXCEPTIONS.— 
(i) For any congregate services program that was 
receiving Eissistance under a contract under the Con-
gregate Housing Services Act of 1978 on the date of the 
enactment of this Act, the unit of general local govern-
ment or nonprofit housing sponsor, in coordination 
with a local government with respect to such program 
shall not be subject to the requirement to provide 
supplemental contributions under subparagraph (AXi) 
(for such program) for the 3-year period beginning on 
the expiration of the contract for such assistance. The 
Secretary concerned shall require each such program 
to maintain, for such 3-year period, the same dollar 
amount of annual contributions in support of the serv-
ices eligible for assistance under this section as were 
contributed to such program during the year preceding 
the date of the enactment of this Act. 
(ii) To the extent that the limitations under subsec-
tion (dX7) regarding the percentage of income eligible 
residents may pay for services will result in collected 
fees for any congregate services program of less than 10 
percent of the cost of providing the program, 50 percent 
of such remaining costs shall be provided by the recipi-
ent of amounts under the contract and 50 percent of 
such remaining costs shall be provided by the Secretary 
concerned under such contract. 
(C) EUGIBLE SUPPLEMENTAL CONTRIBUTIONS.—If provided 
by the State, Indian tribe, unit of general local government, 
or local nonprofit housing sponsor, any salary paid to staff 
from governmental sources to carry out the program of the 
recipient and salary paid to residents employed by the 
program (other than from amounts under a contract under 
subsection (b)), and any other in-kind contributions from 
governmental sources shall be considered as supplemental 
contributions for purposes of meeting the supplemental 
contribution requirement under subparagraph (AXi), except 
that the amount of in-kind contributions considered for 
purposes of fulfilling such contribution requirement may 
not exceed 10 percent of the total amount to be provided by 
the State, Indian tribe, local government, or local nonprofit 
housing sponsor. 
(D) PROHIBITION OF SUBSTITUTION OF FUNDS.—The Sec-
retary concerned shall require each State, Indian tribe, unit 
of general local government, and local nonprofit housing 
sponsor, that receives assistance under this section to main-
tain the same dollar amount of annu£d contribution that 
such State, Indian tribe, local government, or sponsor was 
making, if any, in support of services eligible for assistance 
under this section before the date of the submission of the 
application for such assistance. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4313 
(E) LIMITATION.—For purposes of complying with the 
requirement under subparagraph (AXi), the appropriate 
Secretary concerned may not consider any amounts contrib-
uted or provided by any local government to any State 
receiving assistance under this section that exceed 10 per-
cent of the amount required of the State under subpara-
graph (AXi). 
(2) CONSULTATION.—The Secretary shall consult with the Sec-
retary of Health and Human Services regarding the availability 
of assistance from other Federal programs to support services 
under this section and shall laake information available to 
applicants for assistance under this section, 
(j) MISCELLANEOUS PROVISIONS.— 
(1) USE OF RESIDENTS IN PROVIDING SERVICES.—Each housing 
project that receives assistance under this section shall, to the 
maximum extent practicable, utilize the elderly and persons 
with disabilities who are residents of the housing project, but 
who are not eligible project residents, to participate in providing 
the services provided under congregate services programs under 
this section. Such individuals shall be paid wages that shall not 
be lower than the higher of^ 
(A) the minimum wage that would be applicable to the 
employee under the Fair Labor Standards Act of 1938, if 
section 6(aXl) of such Act applied to the resident and if the 
resident were not exempt under section 13 of such Act; 
(B) the State of local minimum wage for the most nearly 
comparable covered employment; or 
(C) the prevailing rates of pay for persons employed in 
similar public occupations by the same employer. 
(2) EFFECT OF SERVICES.—Except for wages paid under para-
graph (1) of this subsection, services provided to a resident of an 
eligible housing project under a congregate services program 
under this section may not be considered as income for the 
purpose of determining eligibility for or the amount of assist-
ance or aid furnished under any Federal, federally assisted, or 
State program bsised on need. 
(3) ELIGIBIUTY AND PRIORITY FOR 1978 ACT RECIPIENTS.—Not-
withstanding any other provision of this section, any public 
housing agency, housing assisted under section 202 of the Hous-
ing Act of 1959, or nonprofit corporation that was receiving 
assistance under a contract under the Congregate Housing 
Services Act of 1978 on the date of the enactment of this section 
shall (subject to approval and allocation of sufficient amounts 
under the Congregate Housing Services Act of 1978 and appro-
priations Acts under such Act) receive assistance under the 
Congregate Housing Services Act of 1978 for the remainder of 
the term of the contract for assistance for such agency or 
corporation under such Act, and shall receive priority for assist-
ance under this section after the expiration of such period. 
(4) ADMINISTRATIVE COST UMITATION.—A recipient of assist-
ance under this section may not use more than 10 percent of the 
sum of such assistance and the contribution amounts required 
under subsection (iXlXAXi) for administrative costs and shall 
ensure that any entity to which the recipient distributes 
amounts from such sum may not expend more than a reason-
able amount from such distributed amounts for administrative 
104 STAT. 4314 
PUBLIC LAW 101-625—NOV. 28, 1990 
costs. Administrative costs may not include any capital 
expenses, 
(k) DEFINITIONS.—For purposes of this section: 
(1) The term "activity of daily living" means an activity 
regularly necessary for personal care and includes bathing, 
dressing, eating, getting in and out of bed and chairs, walking, 
going outdoors, and using the toilet. 
(2) The term "case management" means assessment of the 
needs of a resident, ensuring access to and coordination of 
services for the resident, monitoring delivery of services to the 
resident, and periodic reassessment to ensure that services 
provided are appropriate to the needs and wants of the resident. 
(3) The term "congregate housing" means low-rent housing 
that is connected to a central dining facility where wholesome 
and economical meals can be served to the residents. 
(4) The term "congregate services" means services described 
in subsection (d) of this section. 
(5) The term "congregate services program" means a program 
assisted under this section undertaken by an eligible housing 
project to provide congregate services to eligible residents. 
(6) The term "eligible housing project" means— 
(A) public housing (as such term is defined in section 3(b) 
of the United States Housing Act of 1937) and lower income 
housing developed or operated pursuant to a contract 
between the Secretary of Housing and Urban Development 
and an Indian housing authority under title II of the United 
States Housing Act of 1937; 
(B) housing assisted under section 8 of the United States 
Housing Act of 1937 with a contract that is attached to the 
structure under subsection (d)(2) of such section or with a 
contract entered into in connection with the new construc-
tion or moderate rehabilitation of the structure under sec-
tion 8(bX2) of the United States Housing Act, as such 
section existed before October 1,1983; 
(C) housing assisted under section 202 of the Housing Act 
of 1959; 
(D) housing assisted under section 221(d) or 236 of the 
National Housing Act, with respect to which the owner has 
made a binding commitment to the Secretary of Housing 
and Urban Development not to prepay the mortgage or 
terminate the insurance contract under section 229 of such 
Act (unless the binding commitments have been made to 
extend the low-income use restrictions relating to such 
housing for the remaining useful life of the housing); 
(E) housing assisted under section 514 or 515 of the 
Housing Act of 1949, with respect to which the owner has 
made a binding commitment to the Secretary of Agri-
culture not to prepay or refinance the mortgage (unless the 
binding commitments have been made to extend the low-
income use restrictions relating to such housing for not less 
than the 20-year period under section 502(cX4) of the Hous-
ing Act of 1949); and 
(F) housing assisted under section 516 of the Housing Act 
of 1949. 
(7) The term "eligible resident" means a person residing in 
eligible housing for the elderly who qualifies under the defini-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4315 
tion of frail elderly, person with disabilities (regardless of 
whether the person is elderly), or temporarily disabled. 
(8) The term "frail elderly" means an elderly person who is 
unable to perform at least 3 activities of daily living adopted by 
the Secretary for purposes of this program. Owners may estab-
lish additional eligibility requirements (acceptable to the Sec-
retary) bsised on the standards in local supportive services 
programs. 
(9) The term "Indian tribe" means any Indian tribe, band, 
nation, or other organized group or community, including any 
Alaska Native village or regional corporation as defined in or 
established pursuant to the Alaska Native Claims Settlement 
Act, that is recognized as eligible for the special programs and 
services provided by the United States to Indians because of 
their status as Indians. 
(10) The term "instrumental activity of daily living" means a 
regularly necessary home mansigement activity and includes 
preparing meals, shopping for personal items, managing money, 
using the telephone, and performing light or heavy housework. 
(11) The term "local nonprofit housing sponsor" includes 
public housing agencies (as such term is defined in section 
303X6) of the United States Housing Act of 1937. 
(12) The term "nonprofit", as applied to an organization, 
means no part of the net earnings of the organization inures, or 
may lawfully inure, to the benefit of any private shareholder or 
individual. 
(13) The term "elderly person" means a person who is at least 
62 years of age. 
(14) The term "person with disabilities" has the meaning 
given the term by section 811 of this Act. 
(15) The term "professional assessment committee" means a 
committee established under subsection (e)(3)(B). 
(16) The term "qualifying supportive services" means new or 
significantly expanded services that the Secretary deems essen-
tial to enable eligible residents to live independently and avoid 
unnecessary institutionalization. Such services may include but 
not be limited to (A) meal service adequate to meet nutritional 
need; (B) housekeeping aid; (C) personal Eissistance (which may 
include, but is not limited to, aid given to eligible residents in 
grooming, dressing, and other activities which maintain per-
sonal appearance and hygiene); (D) transportation services; (E) 
health-related services; and (F) personal emergency response 
systems; the owner may provide the qualifying services directly 
to eligible residents or may, by contract or lease, provide such 
services through other appropriate agencies or providers. 
(17) The term "Secretary concerned" means— 
(A) the Secretary of Housing and Urban Development, 
with respect to eligible federally assisted housing adminis-
tered by such Secretary; and 
(B) the Secretary of Agriculture, with respect to eligible 
federally assisted housing administered by the Adminis-
trator of the Farmers Home Administration. 
(18) The term "State" means the States of the United States, 
the District of Columbia, the Commonwesilth of Puerto Rico, the 
Commonwealth of the Northern Mariana Islands, Guam, the 
Virgin Islands, American Samoa, the Trust Territory of the 
39-194 O - 91 - 32 : QL 3 Part 5 
104 STAT. 4316 
PUBLIC LAW 101-625—NOV. 28, 1990 
Pacific Islands, and any other territory or possession of the 
United States. 
(19) The term "temporarily disabled" means having an 
impairment that— 
(A) is expected to be of no more than 6 months duration; 
and 
(B) impedes the ability of the individual to live independ-
ently unless the individual receives congregate services. 
(20) The term "unit of general local government— 
(A) means any city, town, township, county, parish, vil-
lage, or other general purpose political subdivision of a 
State; and 
(B) includes a unit of general government acting as an 
applicant for assistance under this section in cooperation 
with a nonprofit housing sponsor and a nonprofit housing 
sponsor acting as an applicant for assistance under this 
section in cooperation with a unit of general local govern-
ment, as provided under subsection (gXlXB). 
(1) REPORTS TO CONGRESS.— 
(1) IN GENERAL.—Each Secretary concerned shall submit to 
the Congress, for each fiscal year for which assistance is pro-
vided for congregate services programs under this section, an 
annual report— 
(A) describing the activities being carried out with assist-
ance under this section and the population being served by 
such activities; 
(B) evaluating the effectiveness of the program of provid-
ing assistance for congregate services under this section, 
and a comparison of the effectiveness of the program under 
this section with the HOPE for Elderly Independence Pro-
gram under section 803 of this Act; and 
(C) containing any other information that the Secretary 
concerned considers helpful to the Congress in evaluating 
the effectiveness of this section. 
(2) SUBMISSION OF DATA TO SECRETARY CONCERNED.—The Sec-
retary of Housing and Urban Development and the Secretary of 
Agriculture shall provide, by regulation under subsection (m), 
for the submission of data by recipients of assistance under this 
section to be used in the repeat required by paragraph (1). 
(m) REGULATIONS.—The Secretary of Housing and Urban Develop-
ment and the Secretary of Agriculture shall, not later than the 
expiration of the 180-day period beginning on the date of the 
enactment of this Act, jointly issue any regulations necessary to 
carry out this section, 
(n) AUTHORIZATION OF APPROPRIATIONS.— 
(1) AUTHORIZATION AND USE.—There are authorized to be 
appropriated to carry out this section $25,000,000 for fiscal year 
1991, and $26,100,000 for fiscal year 1992, of which not more 
than— 
(A) the amount of such sums appropriated that, with 
respect to the total amount appropriated, represents the 
ratio of the total number of units of eligible federally 
assisted housing for elderly individuals assisted by pro-
grams administered by the Secretary of Housing and Urban 
Development to the total number of units assisted by pro-
grams administered by such Secretary and the Secretary of 
Agriculture, shall be used for assistance for congregate 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4317 
services programs in eligible federally assisted housing 
administered by the Secretary of Housing and Urban Devel-
opment: and 
(B) the amount of such sums appropriated that, with 
respect to the total amount appropriated, represents the 
ratio of the total number of units of eligible federally 
Eissisted housing for elderly individuals assisted by pro-
grams administered by the Secretary of Agriculture to the 
total number of units assisted by programs administered by 
such Secretary and the Secretary of Housing and Urban 
Development, shall be used for assistance for congregate 
services programs in eligible federally assisted housing 
administered by the Secretary of Agriculture (through the 
Administrator of the Farmers Home Administration). 
(2) AVAILABILITY.—Any amounts appropriated under this 
subsection shall remain available until expended, 
(o) RESERVE FUND.—The Secretary may reserve not more than 5 
percent of the amounts made available in each fiscal year to supple-
ment grants awarded to owners under this section when, in the 
determination of the Secretary, such supplemental adjustments are 
required to maintain adequate levels of services to eligible residents, 
(p) CONFORMING AMENDMENT.—Section 9(aX3XB) of the United 
States Housing Act of 1937 is amended— 
42USCi437g. 
(1) by striking "and" at the end of clause (iii); 
(2) by striking the period at the end of clause (iv) and insert-
ing "; and"; and 
(3) by adding at the end the following new clause: 
"(v) if a public housing agency renovates, converts, or 
combines one or more dwelling units in a public housing 
project to create congregate space to accommodate the 
provision of supportive services in accordance with section 
22 of this Act and section 802 of the Cranston-Gonzalez 
National Affordable Housing Act, the pa5nnents received 
under this section shall not be reduced because of the 
resulting reduction in the number of dwelling units.". 
SEC. 803. HOPE FOR ELDERLY INDEPENDENCE. 
42 USC 8012. 
(a) PURPOSE.—The purpose of this section is to establish a dem-
onstration program to test the effectiveness of combining housing 
certificates and vouchers with supportive services to assist frail 
elderly persons to continue to live independently. The demonstra-
tion program under this section shall terminate upon the expiration 
of the 5-year period beginning on the date of the enactment of this 
Act. 
(b) HOUSING ASSISTANCE.—In connection with this demonstration, 
the Secretary of Housing and Urban Development may enter into 
contracts with public housing agencies to provide not more than 
1,500 incremental vouchers and certificates under sections 8(b) and 
8(o) of the United States Housing Act of 1937. A public housing 
agency may not require that a frail elderly person live in a particu-
lar structure or unit, but the agency may restrict the program under 
this section to a geographic area, where necessary to ensure that the 
provision of supportive services is feasible. At the end of the dem-
onstration period, the public housing agency shall give each frail 
elderly person the option to continue to receive assistance under the 
housing certificate or voucher program of the agency. In the dem-
onstration, the Secretary may also provide for supportive services in 
104 STAT. 4318 
PUBLIC LAW 101-625—NOV. 28, 1990 
connection with existing contracts for housing assistance under 
sections 8(b) and 8(o). 
(c) SUPPORTIVE SERVICES REQUIREMENTS AND MATCHING FUND-
ING.— 
(1) 
FEDERAL, PHA AND, INDIVIDUAL CONTRIBUTIONS.—The 
amount estimated by the public housing agency and approved 
by the Secretary as necessary to provide the supportive services 
for the demonstration period sh£ill be funded as follows: 
(A) The Secretary shall provide 40 percent, using 
amounts appropriated under this section. 
(B) The public housing agency shall ensure the provision 
of at least 50 percent from sources other than under this 
section. 
(C) Notwithstanding any other provision of law, each frail 
elderly person shall pay 10 percent of the costs of the 
supportive services that the person receives, except that a 
frail elderly person may not be required to pay an amount 
that exceeds 20 percent of the adjusted income (as the term 
is defined in section 3(bX5) of the United States Housing Act 
of 1937) of such person and the Secretary shall provide for 
the waiver of the requirement to pay costs under this 
subparagraph for persons whose income is determined to be 
insufficient to provide for any pajmient. 
(D) To the extent that the limitation under subparagraph 
(C) regarding the percentage of income frail elderly persons 
may pay for services will result in collected amounts for 
any public housing agency of less than 10 percent of the 
cost of providing the services, 50 percent of such remaining 
costs shall be provided by the public housing agency and 50 
percent of such remaining costs shall be provided by the 
Secretary from amounts appropriated under this section. 
(2) PROVISION OF SERVICES FOR ENTIRE DEMONSTRATION.—Each 
public housing agency shall ensure that supportive services 
appropriate to the needs of the freiil elderly persons to be served 
under this demonstration are provided throughout the dem-
onstration period. Expenditures for supportive services need not 
be made in equal amounts for each year, but may vary depend-
ing on the needs of the frail elderly persons assisted under this 
section. A public housing agency may use up to 20 percent of the 
Federal assistance provided for supportive services in each year 
of this demonstration and any amounts from any prior year in 
which the public housing agency did not use 20 percent of the 
available Federal assistance. 
(3) CALCULATION OF MATCH.—In determining compliance with 
paragraph (IXB), an agency may include the value of such items 
as the Secretary determines to be appropriate, which may 
include the salary paid to staff to provide supportive services, if 
such items have a readily discernible market value. 
(d) APPUCATIONS.—An application under this section shall be 
submitted by a public housing agency in such form and in accord-
ance with such procedures as the Secretary shall establish. The 
Secretary shall require that an application contain at a minimum— 
(1) an application for housing assistance under section 8 of the 
United States Housing Act of 1937, if necessary, and a descrip-
tion of £iny such assistance already made available that will be 
used in the demonstration; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4319 
(2) a description of the size and characteristics of the popu-
lation of frail elderly persons and of their housing and support-
ive services needs; 
(3) a description of the proposed method of determining 
whether a person qualifies as a frail elderly person (specifjdng 
any additional eligibility requirements proposed by the agency), 
and of selecting frail elderly persons to participate; 
(4) a statement that the public housing agency will create a 
professional assessment committee or will work with an9ther 
entity which will assist the public housing agency in identifying 
and providing only services that each frail elderly person needs 
to remain living independently; 
(5) a description of the mechanisms for developing housing 
and supportive services plans for each person and for monitor-
ing the person's progress in meeting that plan; 
(6) the identity of the proposed service providers and a state-
ment of qualifications; 
(7) a description of the supportive services the public housing 
agency proposes to make available for the frail elderly persons 
to be served, the estimated costs of such services, a description 
of the resources that are expected to be made available to cover 
the portion of the costs required by subsection (c)(1); 
(8) assurances satisfactory to the Secretary that the support-
ive services will be provided for the demonstration period; 
(9) the plan for coordinating the provision of housing assist-
ance £ind supportive services; 
(10) a description of how the public housing agency will 
ensure that the service providers are providing supportive serv-
ices, at a reasonable cost, adequate to meet the needs of the 
persons to be served; 
(11) a plan for continuing supportive services to frail elderly 
persons that continue to receive housing assistance under sec-
tion 8 of the United States Housing Act of 1937 after the end of 
the demonstration period; and 
(12) a statement that the application has been developed in 
consultation with the area agency on eiging under title III of the 
Older Americans Act of 1965 and that the public housing 
agency will periodically consult with the area agency during the 
demonstration. 
(e) SELECTION.— 
(1) CRITERIA.—The Secretary shall establish selection criteria 
for a national competition for assistance under this section, 
which shall include— 
(A) the ability of the public housing agency to develop 
and operate the proposed housing assistance and supportive 
. services program; 
(B) the need for a program providing both housing assist-
ance and supportive services for frail elderly persons in the 
area to be served; 
(C) the quality of the proposed program for providing 
supportive services; 
(D) the extent to which the proposed funding for the 
supportive services is or will be available; 
(E) the extent to which the program would meet the 
needs of the frail elderly persons proposed to be served by 
the program; and 
-
104 STAT. 4320 
PUBLIC LAW 101-625—NOV. 28, 1990 
(F) such other factors as the Secretary specifies to be 
appropriate for purposes of carrying out the demonstration 
program established by this section in an effective and 
efficient manner. 
(2) CONSULTATION WITH HHS.—In reviewing the applications, 
the Secretary shall consult with the Secretary of Health and 
Human Services with respect to the supportive services aspects. 
(3) FUNDING UMITATIONS.—No more than 10 percent of the 
assistance made available under this section may be used for 
programs located within any one unit of general local govern-
ment. 
(f) REQUIRED AGREEMENTS.—The Secretary may not approve any 
assistance for any program under this section unless the public 
housing agency agrees— 
(1) to operate the proposed program in accordance with the 
program requirements established by the Secretary; 
(2) to conduct an ongoing assessment of the housing assistance 
and supportive services required by each frail elderly person 
participating in the program; 
(3) to ensure the adequate provision of supportive services, at 
a reasonable cost, to each frail elderly person participating in 
the program; and 
(4) to comply with such other terms and conditions as the 
Secretary may establish for purposes of carrying out the pro-
gram in an effective and efficient manner. 
(g) DEFINITIONS.—For purposes of this section: 
(1) The term "demonstration period" means the period begin-
ning on the date of the enactment of this Act and ending upon 
the termination date under subsection (a). 
(2) The term "elderly person" means a person who is at least 
62 years of age. 
(3) The term "frail elderly person" means an elderly person 
who is unable to perform at least 3 activities of daily living 
adopted by the Secretary for purposes of this program. Owners 
may establish additional eligibility requirements (acceptable to 
the Secretary) based on the standards in local supportive serv-
ices programs. 
(4) The term "professional assessment committee" means a 
group of at least 3 persons appointed by a public housing agency 
which shall include at least 1 qualified medical professional and 
other persons professionally competent to appraise the func-
tional abilities of the frail elderly in relation to the performance 
of activities of daily living. 
(5) The term "public housing agency" has the meaning given 
such term in section 303)(6) of the United States Housing Act of 
1937. The term includes an Indian Housing Authority, as de-
fined in section 3(bXll) of such Act. 
(6) The term "Secretary" means the Secretary of Housing and 
Urban Development. 
(7) The term "supportive services"— 
(A) means assistance, that the Secretary determines— 
(i) addresses the special needs of frail elderly persons; 
and 
(ii) provides appropriate supportive services or assists 
such persons in obtaining appropriate services, includ-
ing personal care, case management services, transpor-
tation, meal services, counseling, supervision, and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4321 
other services essential for achieving and maintaining 
independent living; and 
(B) does not include medical services, as determined by 
the Secretary. 
(h) MULTIFAMILY PROJECT DEMONSTRATION.— 
(1) IN GENERAL.—In addition to the demonstration program 
authorized by the preceding provisions of this section, the Sec-
retary shall conduct a demonstration in one Federal region, 
subject to the terms and conditions of this subsection, to deter-
mine the feasibility of using housing assistance under section 8 
of the United States Housing Act of 1937 to assist elderly 
persons who may become frail to live independently in housing 
specifically designed for occupancy by such persons in sufficient 
proportion to achieve economies of scale in the provision of 
services and facilities. 
(2) SECTION 8 ALLOCATION.—From amounts provided pursuant 
Government 
to subsection (j) ^^^ subject to availability in appropriation 
contracts. 
Acts, the Secretary shall enter into a contract with a public 
housing Eigency to provide housing assistance under section 8(b) 
of the United States Housing Act of 1937 to assist elderly 
persons in at least 75 percent of the units in a single housing 
project with more than 100 units. 
(3) SECTION 8 TERMS.—The sissistance pajmient contract under 
such section 8 shall be attached to the structure and shall be in 
an initial term of 5 years. The contract shall (at the option of 
the public housing agency and subject to availability of amounts 
approved in appropriations Acts) be renewable for 3 additional 
5-year terms. Rents for units in the project assisted pursuant to 
this subsection shall be subject to the rent limitations in effect 
for the area under section 8 for projects for the elderly receiving 
loans under section 202 of the Housing Act of 1959. 
(4) SUPPORTIVE SERVICES.—The Secretary shall allocate, for 
the project assisted pursuant to this subsection, a reasonable 
portion of the amounts appropriated pursuant to the authoriza-
tion for funds for supportive services in subsection (k), based on 
the estimated number of project residents who will be frail 
elderly individuals during the 5-year period beginning on the 
date of initial occupancy of the project. Grants for supportive 
services may be used to assist any occupant in the demonstra-
tion project who is a frail elderly individual. Grants for support-
ive services under this subsection shall be subject to the other 
terms and conditions specified in this section. 
(5) APPLICATIONS.—An application for assistance under this 
subsection may be submitted by any unit of general local 
government with a population under 50,000 and shall conteiin 
such information as the Secretary deems appropriate. 
(6) SELECTION.—The Secretary shall select one application for 
funding under this subsection based on the following criteria: 
(A) The number of elderly persons residing in the 
applicant's jurisdiction. 
(B) The extent of existing housing constructed prior to 
1940 in the applicant's jurisdiction. 
(C) The number of elderly persons living in adjacent 
projects to whom the services and facilities provided by the 
project would be available. 
104 STAT. 4322 
PUBLIC LAW 101-625—NOV. 28, 1990 
(D) The level of State and local contributions toward the 
cost of developing the project and of providing supportive 
services. 
(E) The project's contribution to neighborhood improve-
ment. 
(i) REPORT.—The Secretary shall submit to Congress an annual 
report evaluating the effectiveness of the demonstrations under this 
section. The report shall include a statement of the number of 
persons served, the types of services provided, the cost of providing 
such services, and any other information the Secretary considers 
appropriate in evaluating the demonstration. 
0) AVAILABLE SECTION 8 ASSISTANCE.—The Secretary may provide 
assistance under sections 8(b) and 8(o) of the United States Housing 
Act of 1937 in connection with the demonstrations under this sec-
tion, in an amount not to exceed $34,000,000 for fiscal year 1991, and 
$35,500,000 for fiscal year 1992, subject to the approval of sufficient 
amounts in appropriations Acts under section 5 of such Act. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 
be appropriated for the Secretary to carry out the responsibilities 
for supportive services under the demonstrations under this section, 
$10,000,000 to become available in fiscal year 1991, and $10,400,000 
to become available in fiscal year 1992, and remain available until 
expended. 
(1) IMPLEMENTATION.—Not later thgm the expiration of the 180-day 
period beginning on the date that funds authorized for the dem-
onstrations under this section first become available for obligation, 
the Secretary shall by notice establish such requirements as may be 
necessary to carry out the demonstration programs authorized 
under this section. 
SEC. 804. USE OF RESOLUTION TRUST CORPORATION ELIGIBLE PROP-
ERTIES FOR SECTION 202 HOUSING. 
(a) AUTHORITY TO PURCHASE RESOLUTION TRUST CORPORATION 
PROPERTY FOR SECTION 202 PROGRAM.—Section 202(d)(3) of the Hous-
ing Act of 1959 (12 U.S.C 1701q(dX3)) is amended by adding at the 
end the following new sentence: "The term also means the cost of 
acquiring existing housing and related facilities from the Resolution 
Trust Corporation under section 21A(c) of the Federal Home Loan 
Bank Act, the cost of rehabilitation, alteration, conversion, or 
improvement, including the moderate rehabilitation thereof, and 
the cost of the land on which the housing and related facilities are 
located.". 
Ot)) RESERVATION OF AUTHORITY BEFORE PURCHASE.—Section 202(a) 
of the Housing Act of 1959 (12 U.S.C. 1701q(a)) is amended by adding 
at the end the following new paragraph: 
"(9) The Secretary may reserve loan authority under this section 
and budget authority under section 8 of the United States Housing 
Act of 1937 for a project before acquisition of the project (or before 
an offer or option to purchase is made on the project) from the 
Resolution Trust Corporation under section 21A(c) of the Federal 
Home Loan Bank Act, if the Secretary determines there is a reason-
able likelihood that the project will be acquired from the Resolution 
Trust Corporation under section 21A(c).". 
(c) 20-YEAR SECTION 8 CONTRACTS.—Section 202(g) of the Housing 
12 use I70iq. 
Act of 1959 (42 U.S.C. 1701q(g)) is amended by inserting after the 
period at the end the following new sentence: "In the case of 
existing housing and related facilities acquired from the Resolution 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4323 
Trust Corporation under section 21A(c) of the Federal Home Loan 
Bank Act, the term of the contract pursuant to such section 8 shall 
be 240 months.". 
(d) MODIFICATION OF R T C DISPOSITION PROCEDURES FOR PROPERTIES 
RECEIVING HUD OR F M H A ASSISTANCE.— 
(1) IN GENERAL.—Section 21A(cX6) of the Federal Home Loan 
Bank Act (12 U.S.C. 1441a(c)(6)) is amended by adding at the end 
the following new subparagraph: 
"(D) EXCEPTION TO DISPOSITION RULES.—Notwithstanding 
the requirements under subparagraphs (A), (B), (C), (D), (F), 
and (G) of paragraph (3), the Corporation may provide for 
the disposition of eligible multifamily housing properties as 
necessary to facilitate purchase of such properties for use in 
connection with the section 202 of the Housing Act of 
1959.". 
(2) CONFORMING AMENDMENT.—Section 21A(cX3) of the Fed-
eral Home Loan Bank Act (12 U.S.C. 1441a(cX3)) is amended by 
inserting after 
"RULES GOVERNING DISPOSITION OF ELIGIBLE 
MULTIFAMILY HOUSING PROPERTIES.—" the following: "Except as 
provided under paragraph (6XD), the Corporation shall dispose 
of eligible multifamily housing property as follows:". 
(e) EXEMPTION FROM PROJECT SIZE REQUIREMENT REGARDING SUP-
PORT SERVICES FOR FRAIL ELDERLY.—Section 213(dXlXA) of the Hous-
ing and Community 
Development Act of 1974 (42 U.S.C. 
1439(dXlXA)) is amended by inserting after the period at the end the 
following new sentence: "The preceding sentence shall not apply to 
projects acquired from the Resolution Trust C!orporation under sec-
tion 21A(c) of the Federal Home Loan Bank Act.". 
SEC. 805. CENTRALIZED APPLICATIONS FOR SECTION 202 HOUSING. 
Section 202 of the Housing Act of 1959 (42 U.S.C. ITOlq) is 12 USC iTOlq. 
amended by adding at the end the following new subsection: 
"(p) The Secretary shall provide to an appropriate agency in each 
area (which may be the applicable Area Agency on the Aging) 
information regarding the availability of housing assisted under this 
section.". 
SEC. 806. ELDER COTTAGE HOUSING UNITS. 
(a) EuGiBiLTTY FOR INSURANCE.—Section 2 of the National Hous-
ing Act (12 U.S.C. 1703) is amended by adding at the end the 
following new subsection: 
"(i) For purposes of this section, the term 'manufactured home' 
includes any elder cottage housing opportunity unit that is small, 
freestanding, barrier-free, energy efficient, removable, and designed 
to be installed adjacent to an existing 1- to 4-family dwelling.", 
(b) DEMONSTRATION PROGRAM.— 
12 use i70iq 
(1) IN GENERAL.—The Secretary of Housing and Urban Devel- "°*® 
opment shall carry out a program to determine the feasibility of 
including as an eligible development cost under section 202 of 
the Housing Act of 1959 the cost of purchasing and installing 
elder cottage housing opportunity units that are small, free-
standing, barrier-free, energy efficient, removable, and designed 
to be installed adjacent to existing 1- to 4-family dwellings. In 
the conduct of the demonstration, the Secretary shall determine 
whether the durability of such units is appropriate for inclusion 
in the section 202 program. 
104 STAT. 4324 
PUBLIC LAW 101-625—NOV. 28, 1990 
(2) REPORT.—The Secretary shall transmit a report to the 
Congress not later than January 1, 1992 on the results of the 
demonstration under subsection (a). 
SEC. 807. NOTICE OF REJECTION. 
Section 202(k) of the Housing Act of 1959 (12 U.S.C. 1701q(k)) is 
amended by adding at the end the following: 
"(3) In considering applications for assistance under section 202, 
the Secretary shall not reject an application on technical grounds 
without giving notice of that rejection and the basis therefor to the 
applicant and affording the applicant an opportunity to respond.". 
SEC. 808. SERVICE COORDINATORS AS ELIGIBLE PROJECT COST IN SEC-
TION 202 PROJECTS. 
Section 202(g) of the Housing Act of 1959 (12 U.S.C. 1701q(g)) is 
amended— 
(1) by inserting "(1)" after "(g)"; and 
(2) by adding at the end the following: 
"(2) In determining the amount of assistance to be provided for a 
project pursuant to such section 8, subject to the availability of 
appropriations for contract amendments for the purpose of this 
paragraph the Secretary may also consider (and annually adjust for) 
the costs of— 
"(A) the expenses of a management staff member of the 
project to coordinate the provision of any services within the 
project provided through any sigency of the Federal Govern-
ment or any other public or private department, agency, or 
organization to elderly, especially those who are frail, or handi-
capped residents of the project to enable such residents to live 
independently and prevent placement in nursing homes or 
institutions, including services under subsection (f) and subpara-
graph (B) of this subsection; and 
"(B) expenses for the provision of services for elderly, espe-
cially those who are frail, and handicapped residents of the 
project that enable residents to live independently and prevent 
placement in nursing homes or institutions, which may include 
meal services, housekeeping and chore assist£mce, personal 
care, laundry assistance, transportation services, and health-
related services, 
except that not more than 15 percent of the cost of the provision of 
such services may be considered under this subsection for purposes 
of determining the amount of assistance provided. This paragraph 
shall not apply in the case of a project assisted under the congregate 
housing services program or a project where the tenants are not 
principally frail elderly.". 
Subtitle B—Supportive Housing for Persons 
With Disabilities 
42 use 8013. 
SEC. 811. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES. 
(a) PURPOSE.—The purpose of this section is to enable persons with 
disabilities to live with dignity and independence within their 
communities by expanding the supply of supportive housing that— 
(1) is designed to accommodate the special needs of such 
persons; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4325 
(2) provides supportive services that address the individual 
health, mental health, and other needs of such persons. 
(b) GENERAL AUTHORITY.—The Secretary is authorized to provide 
assistance to private, nonprofit organizations to expand the supply 
of supportive housing for persons with disabilities. Such assistance 
shall be provided as— 
(1) capital advances in accordance with subsection (d)(1), and 
(2) contracts for project rental assistance in accordance with 
subsection (dX2). 
Such assistance may be used to finance the acquisition, acquisition 
and moderate rehabilitation, construction^ reconstruction, or mod-
erate or substantial rehabilitation of housing, including the acquisi-
tion from the Resolution Trust Corporation, to be used as supportive 
housing for persons with disabilities and may include resil property 
acquisition, site improvement, conversion, demolition, relocation, 
and other expenses that the Secretary determines are necessary to 
expand the supply of supportive housing for persons with 
disabilities. 
(c) GENERAL REQUIREMENTS.—The Secretary shall take such ac-
tions as may be necessary to ensure that— 
(1) assistance made available under this section will be used to 
meet the special needs of persons with disabilities by providing 
a variety of housing options, ranging from group homes and 
independent living facilities to dwelling unite in multifamily 
housing developments, condominium housing, and cooperative 
housing; and 
(2) supportive housing for persons with disabilities assisted 
under this section shall— 
(A) provide persons with disabilities occupying such hous-
ing with supportive services that address their individual 
needs; 
(B) provide such persons with opportunities for optimal 
independent living and participation in normal daily activi-
ties, and 
(C) facilitate access by such persons to the community at 
large and to suitable emplo)mient opportunities within such 
community. 
(d) FORMS OF ASSISTANCE.— 
(1) CAPITAL ADVANCES.—A capital advance provided under 
this section sheill bear no interest and its repayment shall not 
be required so long as the housing remains available for very-
low-income persons with disabilities in accordsmce with this 
section. Such advance shall be in an amount calculated in 
accordance with the development cost limitation established in 
subsection (h). 
(2) PROJECT RENTAL ASSISTANCE.—Contracts for project rental 
assistance shall obligate the Secretary to make monthly pay-
ments to cover any part of the costs attributed to units occupied 
(or, as approved by the Secretary, held for occupancy) by very 
low-income persons with disabilities that is not met from project 
income. The annual contract amount for any project shall not 
exceed the sum of the initial annual project rentals for all units 
and any initial utility allowances for such units, as approved by 
the Secretary. Any contract amounts not used by a project in 
any year shall remain available to the project until the expira-
tion of the contract. The Secretary may adjust the annual 
contract amount if the sum of the project income and the 
104 STAT. 4326 
PUBLIC LAW 101-625—NOV. 28, 1990 
amount of assistance payments available under this paragraph 
are inadequate to provide for reasonable project costs. In the 
case of an intermediate care facility which is the residence of 
persons assisted under title XIX of the Social Security Act, 
project income under this paragraph shall include the same 
amount as if such person were being assisted under title XVI of 
the Social Security Act. 
(3) RENT CONTRIBUTION.—A very low-income person shall pay 
as rent for a dwelling unit assisted under this section the higher 
of the following amounts, rounded to the nearest dollar: (A) 30 
percent of the person's adjusted monthly income, (B) 10 percent 
of the person's monthly income, or (C) if the person is receiving 
pajmients for welfare assistance from a public agency and a part 
of such payments, adjusted in accordance with the person's 
actual housing costs, is specifically designated by such agency to 
meet the person's housing costs, the portion of such payments 
which is so designated; except that the gross income of a person 
occup3dng an intermediate care facility assisted under title XIX 
of the Social Security Act shall be the same amount as if the 
person were being assisted under title XVI of the Social Secu-
rity Act. 
(e) TERM OF COMMITMENT.— 
(1) USE LIMITATIONS.—All units in housing assisted under this 
section shall be made available for occupancy by very low-
income persons with disabilities for not less than 40 years. 
(2) CONTRACT TERMS.—The initial term of a contract entered 
into under subsection (dX2) shall be 240 months. The Secretary 
shall, to the extent approved in appropriation Acts, extend any 
expiring contract for a term of not less than 60 months. In order 
to facilitate the orderly extension of expiring contracts, the 
Secretary is authorized to make commitments to extend expir-
ing contracts during the year prior to the date of expiration, 
(f) APPUCATIONS.—Funds made available under this section shall 
be allocated by the Secretary among approvable applications 
submitted by private nonprofit organizations. Applications for 
assistance under this section shall be submitted in such form and in 
accordance with such procedures as the Secretary shall establish. 
Such applications shall contain— 
(1) a description of the proposed housing; 
(2) a description of the assistance the applicant seeks under 
this section; 
(3) a supportive service plan that contains— 
(A) a description of the needs of persons with disabilities 
that the housing is expected to serve; 
(B) assurances that persons with disabilities occupjdng 
such housing will receive supportive services based on their 
individual needs; 
(C) evidence of the applicant's (or a designated service 
provider's) 
experience 
in 
providing 
such 
supportive 
services; 
(D) a description of the manner in which such services 
will be provided to such persons, including evidence of such 
residential supervision as the Secretary determines is nec-
essary to facilitate the adequate provision of such services; 
and 
(E) identification of the extent of State and local funds 
available to assist in the provision of such services; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4327 
(4) a certification from the appropriate State or local agency 
(as determined by the Secretary) that the provision of the 
services identified in paragraph (3) are well designed to serve 
the special needs of persons with disabilities; 
(5) reasonable assurances that the applicant will own or have 
control of an acceptable site for the proposed housing not later 
than 6 months after notification of an award for assistance; 
(6) a certification from the public official responsible for 
submitting a housing strategy for the jurisdiction to be served in 
accordance with section 105 of the Cranston-Gonzalez National 
Affordable Housing Act that the proposed housing is consistent 
with the approved housing strategy; and 
(7) such other information or certifications that the Secretary 
determines to be necessary or appropriate to achieve the pur-
poses of this section. 
(g) SELECTION CRITERIA.—The Secretary shall establish selection 
criteria for assistance under this section, which shall include— 
(1) the ability of the applicant to develop and operate the 
proposed housing; 
(2) the need for housing for persons with disabilities in the 
area to be served; 
(3) the extent to which the proposed design of the housing will 
meet the special needs of persons with disabilities; 
(4) the extent to which the applicant has demonstrated that 
the necessary supportive services will be provided on a consist-
ent, long-term basis; 
(5) the extent to which the proposed design of the housing will 
accommodate the provision of such services; 
(6) the extent to which the applicant has control of the site of 
the proposed housing; and 
(7) such other factors as the Secretary determines to be 
appropriate to ensure that funds made available under this 
section are used effectively. 
(h) DEVELOPMENT COST LIMITATIONS.— 
(1) IN GENERAL.—The Secretary shall periodically establish Federal 
development cost limitations by market area for various types ^,^^|f*ff?^ 
and sizes of supportive housing for persons with disabilities by 
publishing a notice of the cost limitations in the Federal Reg-
ister. The cost limitations shall reflect— 
(A) the cost of acquisition, construction, reconstruction, or 
rehabilitation of supportive housing for persons with 
disabilities that (i) meets applicable State and local housing 
and building codes; and (ii) conforms with the design 
characteristics of the neighborhood in which it is to be 
located; 
(B) the cost of movables necessary to the basic operation 
of the housing, £is determined by the Secretary; 
(C) the cost of special design features necessary to make 
the housing accessible to persons with disabilities; 
(D) the cost of special design features necessary to make 
individual dwelling units meet the special needs of persons 
with disabilities; 
(E) the cost of congregate space necessary to accommo-
date the provision of supportive services to persons with 
disabilities; 
(F) if the housing is newly constructed, the cost of meet-
ing the energy efficiency standards promulgated by the 
publication. 
104 STAT. 4328 
PUBLIC LAW 101-625—NOV. 28, 1990 
Secretary in accordance with section 109 of the Cranston-
Gonzalez National Affordable Housing Act; and 
(G) the cost of land, including necessary site improve-
ment. 
In establishing development cost limitations for a given market 
area, the Secretary shall use data that reflect currently prevail-
ing costs of acquisition, construction, reconstruction, or 
rehabilitation, and land acquisition in the area. 
(2) RTC PROPERTIES.—In the case of existing housing and 
related facilities from the Resolution Trust Corporation under 
section 21A(c) of the Federal Home Loan Bank Act, the cost 
limitations shall include— 
(A) the cost of acquiring such housing, 
(B) the cost of rehabilitation, alteration, conversion, or 
improvement, 
including the moderate 
rehabilitation 
thereof, and 
(C) the cost of the land on which the housing and related 
facilities are located. 
(3) ANNUAL ADJUSTMENTS.—The Secretary shall adjust the 
cost limitation not less than once annually to reflect changes in 
the general level of acquisition, construction, reconstruction, or 
rehabilitation costs. 
(4) INCENTIVES FOR SAVINGS.— 
(A) SPECIAL PROJECT ACCOUNT.—The Secretary shall use 
the development cost limitations established under para-
graph (1) to calculate the Eimount of financing to be made 
available to individual owners. Owners which incur actual 
development costs that are less than the amount of financ-
ing shall be entitled to retain 50 percent of the savings in a 
special project account. Such percentage shall be increased 
to 75 percent for owners which add energy efficiency fea-
tures which (i) exceed the energy efficiency standards 
promulgated by the Secretary in accordance with section 
109 of the Cranston-Gonzalez National Affordable Housing 
Act; (ii) substantially reduce the life-cycle cost of the hous-
ing; (iii) reduce gross rent requirements; and (iv) enhsmce 
tenant comfort and convenience. 
(B) USES.—The special project account established under 
subparagraph (A) may be used (i) to supplement services 
provided to residents of the housing or funds set-aside for 
replacement reserves, or (ii) for such other purposes as 
determined by the Secretary. 
(5) FUNDS FROM OTHER SOURCES.—An owner shall be permitted 
voluntarily to provide funds from non-Federal sources for amen-
ities and other features of appropriate design and construction 
suitable for supportive housing for persons with disabilities if 
the cost of such amenities is (A) not financed with the advance, 
and (B) is not taken into account in determining the amount of 
Federal assistance or of the rent contribution of tenants. 
(i) TENANT SELECTION.—(1) An owner shall adopt written tenant 
selection procedures that are satisfactory to the Secretary as (A) 
consistent with the purpose of improving housing opportunities for 
very low-income persons with disabilities; and (B) resisonably related 
to program eligibility and an applicant's ability to perform the 
obligations of the lease. Owners shall promptly notify in writing any 
rejected applicant of the grounds for any rejection. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4329 
(2) Notwithstanding any other provision of law, an owner may, 
/ 
with the approval of the Secretary, limit occupancy within housing 
developed under this section to persons with disabilities who have 
similar disabilities and require a similar set of supportive services in 
a supportive housing environment. 
(j) MISCELLANEOUS PROVISIONS.— 
(1) TECHNICAL ASSISTANCE.—The Secretary shall make avail-
able appropriate technical assistance to assure that applicants 
having limited resources, particularly minority applicants, are 
able to participate more fully in the program carried out under 
this section. 
(2) CIVIL RIGHTS COMPUANCE.—Each owner shall certify, to 
the satisfaction of the Secretary, that assistance made available 
under this section will be conducted and administered in 
conformity with title VI of the Civil Rights Act of 1964, the Fair 
Housing Act and other Federal, State, and local laws prohibit-
ing discrimination and promoting equal opportunity; and 
(3) SITE CONTROL.—An applicant may obtain ownership or 
control of a suitable site different from the site specified in the 
initial application. If an applicant fails to obtain ownership or 
control of the site within 1 year after notification of an award 
for 
assistance, the assistance 
shall be recaptured and 
reallocated. 
(4) OWNER DEPOSIT.—The Secretary may require an owner to 
deposit an amount not to exceed $10,000 in a special escrow 
account to assure the owner's commitment to the housing. 
(5) NOTICE OF APPEAL.—The Secretary shall notify an owner 
not less than 30 days prior to canceling any reservation of 
assistance provided under this section. During the 30-day period 
following the receipt of a notice under the preceding sentence, 
an owner may appeal the proposed cancellation. Such appeal, 
including review by the Secretary, shall be completed not later 
than 45 days after the appeal is filed. 
(6) LABOR STANDARDS.—The Secretary shall take such action 
as may be necessary to insure that all laborers and mechanics 
employed by contractors and subcontractors in the construction 
of housing assisted under this section and designed for dwelling 
use by 12 or more persons with disabilities shall be paid wages 
at rates not less than those prevailing in the locality involved 
for the corresponding classes of laborers and mechanics em-
ployed on construction of a similar character, as determined by 
the Secretary of Labor in accordance with the Act of March 3, 
1931 (the Davis-Bacon Act); but the Secretary may waive the 
application of this pareigraph in cases or classes of cases where 
laborers or mechanics, not otherwise employed at any time in 
the construction of such housing, voluntarily donate their serv-
ices without full compensation for the purposes of lowering the 
costs of construction and the Secretary determines that any 
amounts saved thereby are fully credited to the corporation, 
cooperative, or public body or agency undertalang the 
construction. 
(k) DEFINITIONS.—As used in this section— 
(1) The term "group home" means a single family residential 
structure designed or adapted for occupancy by not more than 8 
persons with disabilities. The Secretary may waive the project 
size limitation contained in the previous sentence if the ap-
plicant demonstrates that local market conditions dictate the 
104 STAT. 4330 
PUBLIC LAW 101-625—NOV. 28, 1990 
Regulations. 
development of a larger project. Not more than 1 home may be 
located on any one site and no such home may be located on a 
site contiguous to another site containing such a home. 
(2) The term "person with disabilities" means a household 
composed of one or more persons at least one of whom is an 
adult who has a disability. A person shall be considered to have 
a disability if such person is determined, pursuant to regula-
tions issued by the Secretary to have a physical, mental, or 
emotional impairment which (A) is expected to be of long-
continued and indefinite duration, (B) substantially impedes his 
or her ability to live independently, and (C) is of such a nature 
that such ability could be improved by more suitable housing 
conditions. A person shall also be considered to have a disability 
if such person has a developmental disability as defined in 
section 102(7) of the Developmental Disabilities Assistance and 
Bill of Rights Act (42 U.S.C. 6001-7). The Secretary shall pre-
scribe such regulations as may be necessary to prevent abuses 
in determining, under the definitions contained in this para-
graph, the eligibility of families and persons for admission to 
and occupancy of housing assisted under this section. Notwith-
standing the preceding provisions of this paragraph, the term 
"person with disabilities" includes two or more persons with 
disabilities living together, one or more such persons living with 
another person who is determined (under regulations prescribed 
by the Secretary) to be important to their care or well-being, 
and the surviving member or members of any household de-
scribed in the first sentence of this paragraph who were living, 
in a unit assisted under this section, with the deceased member 
of the household at the time of his or her death. 
(3) The term "supportive housing for persons with disabil-
ities" means housing that— 
(A) is designed to meet the special needs of persons with 
disabilities, and 
(B) provides supportive services that address the individ-
ual health, mental health or other special needs of such 
persons. 
(4) The term "independent living facility" means a project 
designed for occupancy by not more than 20 persons with 
disabilities in separate dwelling units where each dwelling unit 
includes a kitchen and a bath. 
(5) The term "owner" means a private nonprofit organization 
that receives assistance under this section to develop and oper-
ate a project for supportive housing for persons with disabilities. 
(6) The term "private nonprofit organization" means any 
incorporated private institution or foundation— 
(A) no part of the net earnings of which inures to the 
benefit of any member, founder, contributor, or individual; 
(B) which has a governing board (i) the membership of 
which is selected in a manner to assure that there is 
significant representation of the views of persons with 
disabilities, and (ii) which is responsible for the operation of 
the housing assisted under this section; and 
(C) which is approved by the Secretary as to financial 
responsibility. 
(7) The term "State" includes the several States, the District 
of Columbia, the Commonwealth of Puerto Rico, and the posses-
sions of the United States. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4331 
(8) The term "Secretary" means the Secretary of Housing and 
Urban Development. 
(9) The term "very low-income" has the same meaning as 
given the term "very low-income families" under section 3(b)(2) 
of the United States Housing Act of 1937. 
(1) AUTHORIZATIONS.— 
(1) CAPITAL ADVANCES.—There are authorized to be appro-
priated for the purpose of funding capital advances in accord-
ance with subsection (d)(1), $271,000,000 for fiscal year 1992. 
Amounts so appropriated, the repayments from such advances, 
and the proceeds from notes or obligations issued under this 
section prior to the enactment of this Act shall constitute a 
revolving fund to be used by the Secretary in carrying out this 
section. 
(2) PROJECT RENTAL ASSISTANCE.—For the purpose of funding 
contracts for project rental assistance in accordance with 
subsection (d)(2), the Secretary may, to the extent approved in 
an appropriations Act, reserve authority to enter into obliga-
tions aggregating $246,000,000 for fiscal year 1992. 
(m) EFFECTIVE DATE AND APPLICABILITY.— 
(1) IN GENERAL.—The amendments made by this section shall 
take effect on October 1, 1991, with respect to projects approved 
on or after such date. The Secretary shall issue regulations for Regulations, 
such purpose after notice and public comment. 
(2) EARUER APPLICABILITY.—The Secretary shall, upon the 
request of an owner, apply the provisions of this section to any 
housing for which a loan reservation was made under section 
202 of the Housing Act of 1959 before the date of enactment of 
this Act but for which no loan has been executed and recorded. 
In the absence of such a request, any housing identified under 
the preceding sentence shall continue to be subject to the 
provisions of section 202 of the Housing Act of 1959 as they were 
in effect when such assistance was made or reserved. 
(3) COORDINATION.—When responding to an owner's request 
under paragraph (1), the Secretary shall, notwithstanding any 
other provision of law, apply such portion of amounts obligated 
at the time of loan reservation, including amounts reserved 
with respect to such housing under section 8 of the United 
States Housing Act of 1937, as are required for the owner's 
housing under the provisions of this section and shall make any 
remaining portion available for other housing under this 
section. 
Subtitle C—Supportive Housing for the 
Homeless 
PART 1—REVISED MCKINNEY ACT 
SEC. 821. AMENDMENT TO MCKINNEY ACT. 
(a) IN GENERAL.—Title IV of the Stewart B. McKinney Homeless 
Assistance Act is amended to read as follows: 
104 STAT. 4332 
PUBLIC LAW 101-625—NOV. 28, 1990 
"TITLE IV—HOUSING ASSISTANCE 
"Subtitle A—General Provisions 
42 use 11361. 
"SEC. 401. PURPOSE. 
"The purpose of this title is to expand the Federal commitment to 
alleviate homelessness in this Nation by providing States, Indian 
tribes, and localities with the resources to— 
"(1) help very low-income families avoid becoming homeless; 
"(2) meet the emergency shelter needs of homeless persons 
and families; 
"(3) provide transitional housing to facilitate the movement of 
homeless persons and families to independent living; 
"(4) provide specialized permanent housing for homeless per-
sons who require a supportive living environment; and 
"(5) provide supportive services to help homeless persons and 
families lead independent and dignified lives. 
42 use 11362. 
"SEC. 402. DEFINITIONS. 
"For purposes of this title— 
"(1) The term 'assistance' means grants to assist the acquisi-
tion, lease, renovation, substantial rehabilitation, operation, or 
conversion of facilities to assist the homeless, grants for mod-
erate rehabilitation, grants for other purposes, and other assist-
ance made eligible under section 405 and subtitle B. 
"(2) The term 'emergency activities' means supportive serv-
ices that are provided in an emergency shelter developed in 
accordance with section 412. 
"(3) The term 'families' has the same meaning given the term 
under section 3(b)(2) of the United States Housing Act of 1937. 
"(4) The term 'grantee' means— 
"(A) a State or unit of general local government receiving 
grants from the Secretary under section 403(a); 
"(B) a group of geographically contiguous local govern-
ments that have formed a consortium that, in the deter-
mination of the Secretary— 
"(i) has sufficient 
authority and 
administrative 
capability to act on behalf of its member jurisdictions 
in carrying out the provisions of section 403(a), and 
"(ii) is comprised only of jurisdictions that have re-
ceived a formula allocation for the fiscal year, and 
"(C) for purposes of section 406 and subsections (a), (b), (c), 
and (f) of section 407, an Indian tribe, Indian housing 
authority, or a private nonprofit organization receiving a 
direct grant under section 405. 
"(5) The term 'person with disabilities' has the same meaning 
given the term in section 811 of the Cranston-Gonzalez National 
Affordable Housing Act. 
"(6) The term 'homeless person with disabilities' means a 
person with disabilities who is a homeless person within the 
meaning of section 103, is at risk of becoming a homeless 
person, or has been a resident of transitional housing carried 
out pursuant to this Act or the provisions made effective by 
section 101(g) of Public Law 99-500 or Public Law 99-591. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4333 
"(7) The term 'locality' means the geographical area within 
the jurisdiction of a local government. 
"(8) The term 'operating costs' means expenses incurred by a 
project sponsor operating any housing assisted under this title 
with respect to— 
"(A) the administration, maintenance, repair, and secu-
rity of such housing; and 
"(B) utilities, fuels, furnishings, and equipment for such 
housing. 
"(9) The term 'operating costs' includes expenses incurred by 
a project sponsor operating transitional housing under this title 
with respect to— 
"(A) the conducting of the assessment required by section 
413(c)(lXB); and 
"(B) the provision of supportive services to the residents 
of such housing. 
"(10) The term 'outpatient health services' means outpatient 
hegilth care, outpatient mental health services, outpatient sub-
stance abuse services, and case management services. 
"(11) The term 'private nonprofit organization' means an 
organization— 
"(A) no part of the net earnings of which inures to the 
benefit of any member, founder, contributor, or individual; 
"(B) that has a voluntary board; 
"(C) that has an accounting system or has designated a 
fiscal agent in accordance with requirements established by 
the Secretary; and 
"(D) that practices nondiscrimination in the provision of 
assistance. 
"(12) The term 'project' means a structure or a portion of a 
structure that is acquired or rehabilitated with assistance pro-
vided under this title or with respect to which the Secretary 
provides technical assistance or annual pa)nnents for operating 
costs. 
"(13) The term 'project sponsor' means any governmental or 
private nonprofit organization that— 
"(A) receives assistance from the Secretary or from a 
grantee under section 403(a), 
"(B) is approved by the grantee as to financial responsibil-
ity, and 
"(C) is directly responsible for the administration of 
assistance provided under this title. 
Each project sponsor shall act as the fiscal agent of the Sec-
retary with respect to assistance provided to such project spon-
sor under this title. 
"(14) The term 'Secretary' means the Secretary of Housing 
and Urban Development. 
"(15) The term 'State' means a State of the United States, the 
District of Columbia, and the Commonwealth of Puerto Rico, or 
any agency or instrumentality thereof that is established pursu-
ant to legislation and designated by the chief executive to act on 
behalf of the jurisdiction with regard to provisions of this Act. 
"(16)(A) The term 'supportive services' means assistance 
designed by a project sponsor that— 
"(i) addresses the special needs of homeless persons, such 
as deinstitutionalized persons, families with children, per-
sons with mental disabilities, other persons with disabil-
104 STAT. 4334 
PUBLIC LAW 101-625—NOV. 28, 1990 
ities, the elderly, and veterans intended to be served by a 
project; and 
"(ii) assists in accomplishing the purposes of the different 
types of housing for the homeless made eligible under this 
subtitle. 
"(B) The term includes— 
"(i) food services, child care, substance abuse treatment, 
assistance in obtaining permanent housing, outpatient 
health services, employment counseling, nutritional coun-
seling, security arrangements for the protection of residents 
of facilities to assist the homeless, and such other services 
essential for maintaining or moving towards independent 
living as the Secretary determines to be appropriate; and 
"(ii) assistance to homeless persons in obtsiining other 
Federal, State, and local assistance available for such 
individuEils, including public assistance benefits, mental 
health benefits, employment counseling, and medical 
assistance. 
"(C) Such term does not include the provision of major medi-
cal equipment. 
"(D) AH or part of the supportive services may be provided 
directly by the project sponsor or by arrangements with other 
public or private service providers. 
"(17) The term 'unit of general local government' means any 
city, town, township, county, parish, village, or other general 
purpose subdivision of a State; Guam, the Northern Mariana 
Islands, the Virgin Islands, American Samoa, the Federated 
States of Micronesia and Palau, the Marshall Islands, or a 
general purpose political subdivision thereof; a consortium; and 
any other territory or possession of the United States. 
"(18) The term 'consortium' means a group of geographically 
contiguous local governments that the Secretary determines— 
"(A) has sufficient authority and administrative capability 
to act on behalf of its member jurisdictions in carrying out 
the provisions of section 403(a); and 
"(B) is comprised only of jurisdictions that have received a 
formula allocation for the fiscal year. 
"(18) The term 'very low-income families' has the same mean-
ing given the term under section 104 of the Cranston-Gonzalez 
National Affordable Housing Act. 
"(19) The terms 'Indian tribe' and 'Indian housing authority' 
have the same meanings as in section 3 of the United States 
Housing Act of 1937. 
42 use 11363. 
"SEC. 403. GENERAL AUTHORITY. 
"(a) GRANTS FOR HOMELESS HOUSING ASSISTANCE.— 
"(1) IN GENERAL.— 
"(A) GRANTS AUTHORIZED.—The Secretary shall, to the 
extent of amounts approved in appropriations Acts under 
section 408, make grants to States and units of general local 
government and to eligible applicants under section 405 in 
order to (i) carry out activities designed to meet the emer-
gency, transitional, and permanent housing needs of the 
homeless, (ii) help very low-income families and persons 
avoid becoming homeless, and (iii) help homeless families 
and persons make the transition to permanent housing. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4335 
"(B) STRATEGY REQUIRED.—A jurisdiction shall be eligible 
to receive a grant only if it has obtained an approved 
housing strategy (or an approved abbreviated housing strat-
egy) in accordance with section 105 of the Cranston-Gon-
zalez National Affordable Housing Act. 
"(C) USE OF PROJECT SPONSORS.—A grantee shall carry out 
activities authorized under this subsection through con-
tracts with project sponsors, except that a grantee that is a 
State shall obtain the approval of the unit of general local 
government for the locality in which a project is to be 
located prior to entering into such contracts. 
"(2) ALLOCATION OF RESOURCES.—The amounts approved in 
appropriations Acts under section 408 shall be allocated in 
accordance with a formula established under section 404. 
"(b) EuGiBLE ACTIVITIES.—Grants under this title shall be avail-
able only for approved activities. Approved activities shall include— 
"(1) the provision of assistance to help very low-income fami-
lies avoid becoming homeless in accordance with section 411; 
"(2) the development of emergency shelters for the homeless 
in accordance with section 412; 
"(3) the development of transitional housing to facilitate the 
transition of homeless persons to independent living in accord-
ance with section 413; 
"(4) the development of permanent housing for homeless 
persons with disabilities in accordance with section 414; 
"(5) the provision of assistance to help very low-income fami-
lies who are residing in emergency shelter or transitional hous-
ing make the transition to permanent housing in accordance 
with section 415; and 
"(6) such other activities that the Secretary develops in 
cooperation with grantees in accordance with section 416. 
The Secretary shall establish standards and guidelines for approved 
activities. The Secretary shall permit grantees to refine and adapt 
such standards and guidelines for individual projects, where such 
refinements and adaptations are made 
necessary by local 
circumstances. 
"(c) LIMITATIONS.— 
"(1) PREVENTION.—A grantee may use not more than 30 
percent 
of grants 
allocated 
under 
subsection 
(a) for 
homelessness prevention activities as defined in section 411. 
"(2) EMERGENCY ACTIVITIES.—A grantee may use not more 
than 30 percent of the grants allocated in accordance with 
subsection (a) for emergency activities as defined in section 412. 
The Secretary may approve a higher limitation if the grantee 
demonstrates that other approved activities under this subpara-
graph are already being carried out in the jurisdiction with 
other resources. 
"(d) SRO RENOVATION.—The Secretary shall, to the extent of 
amounts approved in appropriations Acts for the programs au-
thorized under section 421, provide rental assistance to public hous-
ing agencies or other contracting agencies for the renovation of 
single room occupancy dwellings in accordance with subtitle C. 
"SEC. 404. ALLOCATION FORMULA. 
42 USC 11364. 
"Subject to section 823(b) of the Cranston-Gonzalez National Regulations. 
Affordable Housing Act, the Secretary shall issue regulations 
establishing an allocation formula, if any, that reflects each jurisdic-
104 STAT. 4336 
PUBLIC LAW 101-625—NOV. 28, 1990 
tion's share of the Nation's need for housing assistance for the 
homeless. 
42 use 11365. 
"SEC. 405. DISCRETIONARY ALLOCATION. 
"(a) IN GENERAL.—In addition to grants otherwise authorized by 
this title, the Secretary is authorized to make grants to eligible 
applicants to meet urgent needs of homeless persons that are not 
being met by available public and private sources in aresis with an 
unusually high incidence of homelessness. For purposes of this 
section, the term 'eligible applicant' means a grantee, Indian tribe, 
Indian housing authority or private nonprofit organization, except 
that a grantee shall not be permitted to submit an application if the 
Secretary finds that the grantee is in noncompliance with sections 
406 and 407. 
**0t)) ELIGIBLE ACTIVITIES.—Assistance provided under this section 
may be used for approved activities under subtitle B and for— 
"(1) the purchase, lease, rehabilitation, renovation, operation, 
or conversion of facilities to assist the homeless; 
"(2) the transitional provision of supportive services designed 
to meet special needs of homeless persons, including families 
with children, deinstitutionalized persons, persons with mental 
disabilities, other persons with disabilities, the elderly, and 
veterans; and 
"(3) the provision of supplemental assistance to projects as-
sisted under sections 412 and 413 if such assistance is required 
to meet the special needs of homeless persons residing in such 
projects. 
"(c) APPUCATIONS.—Assistance under this section shall be allo-
cated among approvable applications submitted by eligible ap-
plicants. Applications for assistance under this section shall be 
submitted by an applicant in such form and in accordance with such 
procedures as the Secretary shall establish. Such applications shall 
contain— 
"(1) a description of the proposed activities; 
"(2) a description of the size and characteristics of the home-
less population that would be served by the proposed activities; 
"(3) a description of the public and private resources that are 
expected to be made available in connection with the proposed 
activities; 
"(4) assurances satisfactory to the Secretary that any prop-
erty purchased, leeised, rehabilitated, renovated, or converted 
with assistance under this section (except for property to be 
used as emergency shelter in accordance with section 412) shall 
be operated for not less than 10 years for the purpose specified 
in the application; 
"(5) evidence in a form acceptable to the Secretary that the 
proposed activities will meet urgent needs of homeless persons 
that are not being met by available public and private sources; 
"(6) if submitted by a private nonprofit organization, a certifi-
cation from the public official responsible for submitting a 
housing strategy in accordance with section 105 of the Cranston-
Gonzalez National Affordable Housing Act that the application 
is consistent with the approved housing strategy; and 
"(7) such other information or certifications that the Sec-
retary determines to be necessary to achieve the purposes of 
this section. 
"(d) SELECTION CRITERIA.— 
/ 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4337 
"(1) IN GENERAL.—The Secretary shall establish selection cri-
teria for assistance under this subsection, which shall prin-
' 
cipally take into account— 
"(A) the extent to which the proposed activities meet 
urgent needs of homeless persons that are not being met by 
available public and private sources; 
"(B) the extent to which the area in which the proposed 
activities are to be carried out is an area with an unusually 
high incidence of homelessness; and 
(C) the extent to which such area is not being served by 
current programs to assist homeless persons. 
"(2) ADDITIONAL CRITERIA.—Selection criteria established by 
the Secretary shall also take into account— 
"(A) the extent to which the proposed activities would 
make available as housing for homeless persons property 
owned by the Federal Grovernment, a State, a unit of gen-
eral local government, or other public entity, including in 
rem property, public buildings, and public land; 
"(B) the extent to which the proposed activities would be 
carried out in a jurisdiction that has demonstrated exem-
plary coordination among State and local agencies admin-
istering housing, child welfare, and public assistance 
activities; 
"(C) the extent to which the applicant has demonstrated 
the capacity to carry out the proposed activities; and 
"(D) such other factors as the Secretary determines to be 
appropriate to ensure that funds made available under this 
section are used effectively. 
"(e) SPECIAL RULES FOR SUPPLEMENTAL ASSISTANCE FOR FACIUTIES 
To ASSIST THE HOMELESS.— 
"(1) IN GENERAL.—The Secretary may not provide assistance 
under subsection (bX3) unless the Secretary determines that— 
"(A) the applicant has made reasonable efforts to utilize 
all available local resources and resources available under 
the other provisions of this title; and 
"(B) other resources are not sufficient or are not available 
to carry out the purpose for which the assistance is being 
sought. 
No assistance provided under subsection (bX3) may be used to 
supplant any non-Federal resources provided with respect to 
any project. 
(2) HEALTH SERVICES.—Not more than $10,000 of any grant or 
advance under subsection (bX3) may be used for outpatient 
health services (excluding the cost of any rehabilitation or 
conversion of a structure to accommodate the provision of such 
services). 
"(3) GuiDEUNES.—The Secretary of Housing and Urban Devel-
opment and the Secretary of Health and Human Services shall 
jointly establish guidelines for determining under this section 
the appropriateness of proposed outpatient health services. 
Such guidelines shall include such provisions as are necessary 
to enable the Secretary of Housing and Urban Development to 
meet the time limits under this section for the final selection of 
applications for assistance. 
"SEC. 406. RESPONSIBILITIES OF GRANTEES AND PROJECT SPONSORS. 42 USC 11366. 
"(a) MATCHING REQUIREMENTS.— 
104 STAT. 4338 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(1) IN GENERAL.—Each grantee shall be required to supple-
ment the grants provided under this title for acquisition, re-
habilitation, or construction activities, except for assistance 
described in section 421, with an equal amount of funds from 
non-Federal sources. Each grantee shall certify to the Secretary 
its compliance with this subsection, describing the sources and 
amounts of such supplemental funds. Supplemental funds may 
include the value of any donated material or building, the value 
of any lease on a building, any salary paid to staff to carry out 
the program of a project sponsor, and the value of the time and 
services contributed by volunteers to carry out the program of a 
project sponsor at a rate determined by the Secretary. 
"(2) STATE MATCHING REQUIREMENT.—Each grantee under this 
title that is a State shall be required to supplement the assist-
ance provided under this title with an amount of funds from 
sources other than this title equal to the difference between the 
amount received under this title and $100,000. If the amount 
received by the State is $100,000 or less, the State may not be 
required to supplement the assistance provided under this title. 
"(3) BENEFIT OF MATCH.—A State grantee shall obtain any 
matching amounts required under paragraph (2) in a manner so 
that local governments, Indian tribes, agencies, and local non-
profit organizations receiving assistance from the grant that are 
least capable of providing the recipient State with such match-
ing amounts receive the benefit of the $100,000 subtrahend 
under paragraph (2). 
"(\>) HOUSING QUAUTY.—Each grantee shall assure that housing 
assisted under this subtitle shall be decent, safe, and sanitary and, 
when appropriate, meet all applicable State and local housing codes, 
building codes, and licensing requirements in the jurisdiction in 
which the housing is located. 
"(c) CONSISTENCY WITH HOUSING STRATEGY.—Each grantee shall 
certify, to the satisfaction of the Secretary, that activities under-
taken by project sponsors with assistance from the grantee are 
consistent with the housing strategy submitted by the grantee in 
accordance with section 105 of the Cranston-Gonzalez National 
Affordable Housing Act. 
"(d) ASSISTANCE TO HOMELESS PERSONS.—Each grantee shall cer-
tify that each project sponsor shall administer, in good faith, a 
policy designed to ensure that any shelter or housing Eissisted under 
this subtitle is free from the illegal use, possession, or distribution of 
drugs or alcohol by its beneficiaries. 
"(e) LIMITATION ON USE OF FUNDS.—Each grantee shall certify, to 
the satisfaction of the Secretary, that neither Eissistance received 
under this subtitle nor any State or local government funds used to 
supplement such assistance will be used to replace other public 
funds previously used, or designated for use, to assist the homeless. 
"(f) CIVIL RIGHTS COMPLIANCE.—Each grantee shall certify, to the 
satisfaction of the Secretary, that the grant will be conducted and 
administered in conformity with title VI of the Civil Rights Act of 
1964 (Public Law 88-352), and the Fair Housing Act and the grantee 
will affirmatively further fair housing. 
"(g) REPORTS.— 
"(1) IN GENERAL.—Each grantee shall submit to the Secretary, 
in such form and at such time as the Secretary shall prescribe, a 
performance and evaluation report on the use of amounts made 
available under this subtitle, together with the grantee's assess-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4339 
Inter-
governmental 
relations. 
ment of the relationship of such usage to the grantee's approved 
housing strategy. The report shall include information on the 
number of homeless persons served and the reasons for their 
homelessness. The report shall also specify the amounts made 
available under this subtitle for each approved activity under 
subtitle B. The report shall be made available to the public so 
that citizens, public agencies, and other interested parties have 
an opportunity to comment on the report prior to its submis-
sion. The report shall include a summary of any comments 
received from interested parties. 
"(2) CONSULTATION.—The Secretary shall consult with na-
tional associations of States, local governments, and other hous-
ing interests to develop uniform recordkeeping, performance 
reporting, and auditing requirements. After considering the Records 
results of such consultations, the Secretary shall establish uni-
form recordkeeping, performance reporting, and auditing 
requirements for assistance made available under this subtitle. 
"(h) SITE CONTROL.— 
"(1) IN GENERAL.—Each grantee or project sponsor shall fur-
nish reasonable assurances that it will own or have control of a 
site for the proposed project not later than 6 months after 
notification of an award for grant assistance. A suitable site 
different from the site specified in the application satisfies the 
requirement of this subsection. If ownership or control of a site 
is not obtained within 1 year after notification of an award for 
grant assistance, the grant shall be recaptured and reallocated. 
"(2) WAIVER.—The Secretary may waive the requirement 
under paragraph (1) for any proposed project for which the 
Secretary determines such requirement is inapplicable because, 
under the application, the families and individuals served own 
or control, or will eventually own or control, the site, 
"(i) PREVENTION OF UNDUE BENEFITS.—The Secretary may pre-
scribe such terms and conditions as he deems necessary to prevent 
project sponsors from unduly benefiting from the sale or other 
disposition of projects constructed, rehabilitated, or acquired with 
assistance under this subtitle other than a sale or other disposition 
resulting in the use of the project for the direct benefit of very low-
income femilies. 
"(j) CONFIDENTIALITY.—Each grantee shall develop and implement 
procedures to ensure the confidentiality of records pertaining to any 
individual provided family violence prevention or treatment services 
under any project assisted under this title and to ensure that the 
address or location of any family violence shelter project assisted 
under this title will, except with written authorization of the person 
or persons responsible for the operation of such shelter, not be made 
public. 
"(k) ADDITIONAL REQUIREMENTS.—The Secretary may establish 
such other program requirements as the Secretary determines are 
necessary for grantees to administer activities authorized under this 
subtitle in an efficient manner. 
"SEC. 407. ADMINISTRATIVE PROVISIONS. 
"(a) LIMITATION ON ADMINISTRATIVE EXPENSES.—A grantee may 
not use more than 5 percent of the assistance received under this 
subtitle for administrative purposes. 
"(b) INCOME ELIGIBILITY.—A homeless person shall be eligible for 
assistance under any program provided by this subtitle, or by the 
42 use 11367. 
104 STAT. 4340 
PUBLIC LAW 101-625—NOV. 28, 1990 
amendments made by this subtitle, only if the person has income 
not exceeding 50 percent of the median income for the area, as 
adjusted in accordance with section 3(b)(2) of the United States 
Housing Act of 1937. 
"(c) FLOOD ELEVATION REQUIREMENTS.—Flood protection stand-
ards applicable to housing acquired, rehabilitated, or assisted under 
any provision of this subtitle shall be no more restrictive than the 
standards applicable to any other program administered by the 
Secretary. 
"(d) APPUCABIUTY OF SECTION 104(g) OF THE HOUSING AND COMMU-
NITY DEVELOPMENT ACT OF 1974.—The provisions of, and regulations 
and procedures applicable under, section 104(g) of the Housing and 
Community Development Act of 1974 shall apply to assistance and 
projects under this subtitle. 
"(e) GAO AUDITS.—Insofar as they relate to funds provided under 
this section, the financial transactions of grantees and project spon-
sors may be audited by the Greneral Accounting Office under such 
rules and regulations as may be prescribed by the Comptroller 
Records. 
General of the United States. The representatives of the General 
Accounting Office shall have access to all books, accounts, records, 
reports, files, and other papers, things, or property belonging to, or 
in use by, such grantees and project sponsors pertaining to the 
financial transactions and necessary to facilitate the audit. 
42 use 11368. 
"SEC. 408. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated to carry out this title 
such sums as may be necessary. Any amount appropriated under 
this section shall remain available until expended. 
42 use 11369. 
"SEC. 409. REPORTS TO CONGRESS. 
"The Secretary shall submit annually to the Congress a report 
summarizing the activities carried out under this title and setting 
forth the findings, conclusions, and recommendations of the Sec-
retary as a result of the activities. The report shall summarize and 
assess the results of performance reports provided in accordance 
with section 406(g). The report shall be submitted not later than 6 
months after the end of each fiscal year. 
"Subtitle B—Approved Activities 
42 use 11371. 
"SEC. 411. HOMELESSNESS PREVENTION. 
"(a) DEFINITION.—Assistance to help very low-income families 
avoid becoming homeless may include activities other than those 
that the Secretary has found to be inconsistent with the purposes of 
this Act. 
"Ot)) LIMITATION ON FINANCIAL ASSISTANCE.—A grantee may pro-
vide financial assistance to very low-income families who have 
received eviction notices or notices of termination of utility services 
if— 
"(1) the inability of the family to make the required payments 
is due to a sudden reduction in income; 
"(2) the assistance is necessary to avoid the eviction or termi-
nation of services; 
"(3) there is a reasonable prospect that the family will be able 
to resume payments within a reasonable period of time; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4341 
"(4) the assistance will not supplant funding for preexisting 
homelessness prevention activities from other sources. 
"SEC. 412. EMERGENCY SHELTER. 
"(a) DEFINITION.—A project shall be considered 'emergency shel-
ter' if it is designed to provide overnight sleeping accommodations 
for homeless persons. An emergency shelter may include appro-
priate eating and cooking accommodations. 
"(b) MINIMUM STANDARDS OF HABITABILITY.—The Secretary shall 
prescribe such minimum standards of habitability as the Secretary 
determines to be appropriate to ensure that emergency shelters 
assisted under this section are environments that provide appro-
priate privacy, safety, and sanitary and other health-related condi-
tions for homeless persons and families. Grantees are authorized to 
establish standards of habitability in addition to those prescribed by 
the Secretary. 
"(c) TYPES OF ASSISTANCE.—A grantee may provide the following 
assistance to a project sponsor of emergency shelter: 
"(1) a grant for the renovation, major rehabilitation, or 
conversion of buildings to be used as emergency shelters; 
"(2) a grant for the provision of supportive services if such 
services do not supplant any services provided by the local 
government during any part of the immediately preceding 12-
month period; and 
"(3) annual payments for maintenance, operation, insurance, 
utilities, and furnishings. 
"(d) PROGRAM REQUIREMENTS.—A grantee may approve assistance 
for a project under this subsection only if the project sponsor has 
agreed that it will— 
"(1) in the case of assistance involving major rehabilitation or 
conversion of a building, maintain the building as a shelter for 
homeless persons and families for not less than a 10-year period; 
"(2) in the case of assistance involving rehabilitation (other 
than major rehabilitation or conversion of a building), maintain 
the building as a shelter for homeless persons and families for 
not less than a 3-year period; 
"(3) in the case of assistance involving only activities de-
scribed in paragraphs (2) and (3) of subsection (c), provide 
services or shelter to homeless persons and families at the 
original site or structure or other sites or structures serving the 
same general population for the period during which such 
assistance is provided; 
"(4) comply with the standards of habitability prescribed by 
the Secretary and (if applicable) the State or unit of general 
local government; and 
"(5) assist homeless persons in obtaining— 
"(A) 
appropriate 
supportive 
services, 
including 
permanent housing, medical and mental health treatment, 
counseling, supervision, and other services essential for 
achieving independent living; and 
"(B) other Federal, State, local, and private assistance 
available for homeless persons. 
"SEC. 413. TRANSITIONAL HOUSING FOR THE HOMELESS. 
"(a) DEFINITION.—A project shall be considered 'transitional hous-
ing' if it is designed to facilitate the movement of homeless persons 
to independent living within 24 months (or such longer period as the 
Homeless. 
42 u s e 11372. 
42 u s e 11373. 
104 STAT. 4342 
PUBLIC LAW 101-625—NOV. 28, 1990 
Secretary determines is necessary to facilitate the transition of 
homeless persons to independent living). Transitional housing in-
cludes housing primarily designed to serve deinstitutionalized home-
less persons and other homeless persons with mental disabilities, 
and homeless families with children. 
"(b) TYPES OF ASSISTANCE.—A grantee may provide the following 
assistance to a project sponsor of transitional housing: 
"(1) A grant for the cost of acquisition, substantial rehabilita-
tion, or acquisition and rehabilitation of an existing structure 
for use as transitional housing. The repayment of any outstand-
ing debt owed on a loan made to purchase an existing structure 
shall be considered to be a cost of acquisition eligible for an 
advance under this paragraph if the structure was not used as 
transitional housing prior to the receipt of assistance. 
"(2) A grant for moderate rehabilitation of an existing struc-
ture for use as transitional housing. 
"(3) A grant, in an amount not to exceed $400,000, for the new 
construction of a structure for use in the provision of supportive 
housing. 
"(4) Annual payments for operating costs of transitional hous-
ing (including transitional housing that is newly constructed 
with assistance provided from sources other than this Act) not 
to exceed 75 percent of the smnual operating costs of such 
housing. 
"(5) Technical assistance in— 
"(A) establishing transitional housing in an existing 
structure; 
"(B) operating transitional housing in existing structures 
and in structures that are newly constructed with assist-
ance provided from sources other than this Act; and 
"(C) providing supportive services to the residents of 
transitional housing (including transitional housing that is 
newly constructed with assistance provided from sources 
other than this Act). 
"(6) A grant for establishing and operating an emplojnnent 
assistance program for the residents of transitional housing, 
which shall include— 
"(A) emplojnnent of residents in the operation and 
maintenance of the housing; and 
"(B) the pajnnent of the transportation costs of residents 
to places of employment. 
Daycare. 
"(7) A grant to establish and operate a child care services 
program for homeless families as follows: 
"(A) A progremi under this paragraph shall include— 
"(i) establishing, licensing, and operating an on-site 
child care facility for the residents of transitional hous-
ing; or 
(ii) making contributions for the child care costs of 
residents of transitional housing to existing community 
child care programs and facilities; and 
"(iii) counseling designed to inform the residents of 
transitional housing of public and private child care 
services for which they are eligible. 
"(B) A grant under this paragraph for any child care 
services program shall not exceed the amount equal to 75 
percent of the cost of operating the program for a period of 
up to 5 years. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4343 
"(C) Child care services provided with respect to a child 
care services program sissisted under this paragraph shall 
meet any applicable State and local laws and regulations. 
A project sponsor may receive assistance under both paragraphs 
(1) and (2). 
"(c) PROGRAM REQUIREMENTS.— 
"(1) REQUIRED AGREEMENTS.—A grantee may approve assist-
ance for a project under this section only if the project sponsor 
has agreed— 
"(A) to operate the proposed project as transitional hous-
ing for not less than 10 years, except that in the case of any 
leased property receiving assistance under this subtitle 
other than for lease of the property, assurances under this 
paragraph shall be made annually that the project will be 
operated to assist homeless individuals for such year; 
"(B) to conduct an ongoing assessment of the supportive 
services required by the residents of the project; 
"(C) to provide such residential supervision as the Sec-
retary determines is necessary to facilitate the adequate 
provision of supportive services to the residents of the 
project; 
"(D) to comply with such other terms and conditions as 
the Secretary or grantee may establish for purposes of 
carrying out this program in an effective and efficient 
manner. 
"(2) OCCUPANT RENT.—Each homeless person residing in a 
facility assisted under this section shall pay as rent an amount 
determined in accordance with the provisions of section 3(a) of 
the United States Housing Act of 1937. 
"(3) ALTERNATIVE USE.—A project may continue to be treated 
as transitional housing for purposes of this subsection if the 
grantee determines that such project is no longer needed for use 
as transitional housing and approves the use of such project for 
the direct benefit of very low-income families. 
"SEC. 414. PERMANENT HOUSING FOR HOMELESS PERSONS WITH 42 USC 11374. 
DISABILITIES. 
"(a) DEFINITION.—A project shall be considered 'permanent hous-
ing for homeless persons with disabilities' if it provides community-
based long-term housing and supportive services for not more than 8 
i 
homeless persons with disabilities (or 16 such persons, but only if 
not more than 20 percent of the units in a project are designated for 
such persons). The Secretary may waive the limitation contained in 
the preceding sentence if the grantee demonstrates that local 
market conditions dictate the development of a larger project. 
"(b) PROJECT DESIGN AND SITING.—Each project assisted under 
this subtitle shall be either a home designed solely for housing 
persons with disabilities or dwelling units in a multifamily housing 
project, condominium project, or cooperative project. Not more than 
1 home may be located on any 1 site and no such home may be 
' 
located on a site contiguous to another site containing such a home. 
"(c) TYPES OF ASSISTANCE.—A grantee may provide the following 
assist£uice to a project sponsor of permanent housing for homeless 
persons with disabilities: 
I 
"(1) A grant for the cost of acquisition, substeuitial rehabilita- 
' 
tion, or acquisition and rehabilitation of an existing structure 
^ 
for use as permanent housing for homeless persons with disabil-
104 STAT. 4344 
PUBLIC LAW 101-625—NOV. 28, 1990 
ities. The repayment of any outstanding debt owed on a loan 
made to purchase an existing structure shall be considered to be 
a cost of acquisition eligible for a grant under this paragraph if 
the structure was not used as permanent housing for homeless 
persons with disabilities prior to the receipt of assistance. 
"(2) A grant for moderate rehabilitation of an existing struc-
ture for use as permanent housing for homeless persons with 
disabilities. 
"(3) A grant, in an amount not to exceed $400,000, for the new 
construction of a structure for use in the provision of supportive 
housing. 
"(4) Annual payments for operating costs for permanent hous-
ing for homeless persons with disabilities (including permanent 
housing for homeless persons with disabilities that is newly 
constructed with assistance provided from sources other than 
this Act), not to exceed 75 percent of the annual operating costs 
of such housing, and any recipient may reapply for such assist-
ance or for the renewal of such assistance for use during 
the 10-year period under subsection (d) (unless such assistance 
is no longer necessary, in the determination of the Secretary). 
"(5) Technical assistance in— 
"(A) establishing permanent housing for homeless per-
sons with disabilities in an existing structure; 
"(B) operating permanent housing for homeless persons 
with disabilities in existing structures and in structures 
that are newly constructed with assistance provided from 
sources other than this Act; and 
"(C) providing supportive services to the residents of 
permanent housing for homeless persons with disabilities 
(including permanent housing for homeless persons with 
disabilities that is newly constructed with assistance pro-
vided from sources other than this Act). 
"(d) PROGRAM REQUIREMENTS.— 
"(1) REQUIRED AGREEMENTS.—A grantee may approve assist-
ance for any project under this section only if the project 
sponsor has agreed— 
"(A) to operate the proposed project as permanent hous-
ing for homeless persons with disabilities for not less than 
10 years, except that in the case of projects not receiving a 
grant under paragraph (1), (2), or (3) of subsection (c), 
assurances under this subparagraph shall be made an-
nually that the project will be operated for the purpose 
specified in the application for such year; 
"(B) to conduct an ongoing assessment of the supportive 
services required by the residents of the project; 
"(C) to provide such residential supervision as the Sec-
retary determines is necessary to facilitate the adequate 
provision of supportive services to the residents of the 
project; and 
"(D) to comply with such other terms and conditions as 
the Secretary or grantee may establish for purposes of 
carrjdng out this program in an effective and efficient 
manner. 
"(2) STATE PARTICIPATION.—Each grantee providing assistance 
to a project under this section shall transmit to the Secretary a 
letter of participation from the State assuring that the State 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4345 
will facilitate the provision of necessary supportive services to 
the residents of the project; 
"(3) OCCUPANT RENT.—Each homeless person residing in a 
project assisted under this section shall pay as rent an amount 
determined in accordance with the provisions of section 3(a) of 
the United States Housing Act of 1937. 
"(4) ALTERNATIVE USE.—A project may continue to be treated 
as permanent housing for homeless persons with disabilities for 
purposes of this subsection if the grantee determines that such 
project is no longer needed for use as such housing and approves 
the use of such project for the direct benefit of very low-income 
families. 
"(5) TENANT SELECTION.— 
"(A) IN GENERAL.—A project sponsor owner shall adopt 
written tenant selection procedures that are satisfactory to 
the Secretary as (i) consistent with the purpose of improv-
ing housing opportunities for very low-income persons with 
disabilities; and (ii) reasonably related to program eligi-
bility and an applicant's ability to perform the obligations 
of the lease. Project sponsors shall promptly notify in writ-
ing any rejected applicant of the grounds for any rejection. 
"(B) AUTHORITY TO LIMIT OCCUPANCY.—Notwithstanding 
any other provision of law, a project sponsor may, with the 
approval of the grantee, limit occupancy within housing 
developed under this section to persons with disabilities 
who have similar disabilities and require a similar set of 
supportive services in a supportive housing environment. 
"(6) RENEWED FUNDING FOR SHORT-TERM LEASE PROJECTS.— 
The Secretary may not provide assistance under paragraph (4) 
or (5) of subsection (c) to any project not receiving assistance 
under paragraph (1), (2), or (3) of such subsection unless assur-
ances have been made under paragraph (1)(A) of this subsection 
that the project will be operated for the purpose specified in the 
application for the year for which such assistance is provided. 
"SEC. 415. TRANSITION TO PERMANENT HOUSING. 
42 USC 11375. 
"(a) USE OF GRANTS,— 
"(1) IN GENERAL.—A grant under this section may be used by 
a grantee to provide grants or loans to help eligible families 
make the transition to permanent housing. A grantee may use 
assistance under this section to provide for the pajonent by very 
low-income families of security deposits and the cost of rent for 
a reasonable period of time. 
"(2) TECHNICAL ASSISTANCE.—The Secretary may provide 
informational and technical assistance to units of general local 
government and housing agencies in organizing and developing 
assistance programs under this section. For purposes of this 
section, the term 'eligible family' means a very low-income 
family who has resided in emergency shelter or transitional 
housing and who meets other conditions of eligibility as the 
Secretary determines to be appropriate. 
"(3) FINANCIAL COUNSELING.—'The grantee shall provide coun-
seling regarding household finances and budgeting to any 
family that receives a grant or loan under this section. 
"(b) LIMITATION ON FINANCIAL ASSISTANCE.—A grantee may pro-
vide assistance to eligible families in the form of a security deposit 
and the cost of rent for a reasonable period of time i
f
— 
104 STAT. 4346 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 11376. 
"(1) the grantee determines that the rental charge for the 
subject unit is reasonable in comparison with rents charged for 
comparable units in the private, unassisted market; 
"(2) there is a regular income and a reasonable prospect that 
the family will be able to sustain the rental payments for a 
reasonable period of time and to repay any loan provided; and 
"(3) the eligible family has made reasonable efforts to receive 
assistance under the program of aid to families with dependent 
children under part A of title IV of the Social Security Act or a 
similar local, State, or Federal public assistance program. 
"(c) PARTICIPATING LANDLORD.—If an eligible family vacates the 
rental unit, a landlord participating in this program shall return to 
the grantee any portion of the security deposit (including reasonable 
interest) against which such landlord does not have a claim. Any 
returned funds may be used by a grantee in accordance with section 
403(a). 
"SEC. 416. DEVELOPMENT OF ADDITIONAL APPROVED ACTIVITIES. 
"The Secretary, in cooperation with grantees and other appro-
priate parties, shall develop additional approved activities to carry 
out the purposes of this title. 
"Subtitle C—Section 8 Single Room Occupancy 
42 use 11381. 
"SEC. 421. SECTION 8 ASSISTANCE FOR SINGLE ROOM OCCUPANCY PROVI-
SIONS. 
"(a) USE OF FUNDS.—The amounts made available under this 
subtitle shall be used only in connection with the moderate re-
habilitation of housing described in section 8(n) of the United States 
Housing Act of 1937 for occupeincy by homeless persons, except that 
such amounts may be used in connection with the moderate re-
habilitation of efficiency units if the building owner agrees to pay 
the additional cost of rehabilitating and operating such units. 
"(b) ALLOCATION.—The amounts made available under this sub-
title shsdl be allocated by the Secretary on the basis of a national 
competition among approvable applications to the applicant public 
housing agencies or other contracting agencies that best dem-
onstrate a need for the assistance under this section and the ability 
to undertake and carry out a program to be assisted under this 
1 
subtitle. To be considered for assistance under this section, an 
1 
applicant shall submit to the Secretary a proposal containing— 
"(1) a description of the size and characteristics of the popu-
lation within the applicant's jurisdiction that would occupy 
single room occupancy dwellings; 
"(2) a listing of additional commitments from public and 
private sources that the applicant might be able to provide in 
connection with the program; 
"(3) an inventory of suitable housing stock to be rehabilitated 
with such assistance; and 
"(4) a description of the interest that has been expressed by 
builders, developers, and others (including profit and nonprofit 
organizations) in participating in the program. 
No single city or urban county shall be eligible to receive more than 
10 percent of the assistance made available under this subtitle. 
"(c) FIRE AND SAFETY IMPROVEMENTS.—Each annual contribution 
contract entered into with the authority provided under this subtitle 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4347 
shall require the installation of a sprinkler system that protects all 
major spaces, hard wired smoke detectors, and such other fire and 
safety improvements as may be required by State or local law. For 
purposes of this subsection, the term 'major spaces' means hallways, 
large common areas, and other areas specified in local fire, building, 
or safety codes. 
"(d) COST LIMITATION.— 
"(1) PER UNIT CEIUNG.—The total cost of rehabilitation that 
may be compensated for in an annual contribution contract 
entered into with the authority provided under this subtitle 
shall not exceed $15,000 per unit, plus the expenditures re-
quired by subsection (d). 
"(2) AUTHORITY TO INCREASE.—The Secretary shall increase 
the limitation contained in paragraph (1) by an amount the 
Secretary determines is reasonable and necessary to accommo-
date special local conditions, including— 
"(A) high construction costs; or 
"(B) stringent fire or building codes. 
"(3) ANNUAL ADJUSTMENT.—The Secretary shall increase the 
limitation in paragraph (1) on October 1 of each year by an 
amount necessary to take into account increases in construction 
costs during the previous 12-month period. 
"(e) CONTRACT REQUIREMENTS.—Each contract for annual con-
tributions entered into with a public housing agency or other 
contracting agency to obligate the authority made available under 
this subtitle shall— 
"(1) commit the Secretary to make such authority available to 
the public housing agency or other contracting agency for an 
aggregate period of 10 years, and require that any amendments 
increasing such authority shall be available for the remainder 
of such 10-year period; 
"(2) provide the Secretary with the option to renew the 
contract for an additional period of 10 years, subject to the 
availability of appropriations; and 
"(3) provide that, notwithstanding any other provision of law, 
first priority for occupancy of housing rehabilitated under this 
subtitle shall be given to homeless persons. 
"SEC. 422. APPLICABILITY TO INDIANS. 
42 USC 11382. 
"Pursuant to section 201(b) of the United States Housing Act of 
1937, this subtitle shall apply to Indian tribes and Indian housing 
authorities. 
"Subtitle D—Shelter Plus Care Program 
"PART 
I—SHELTER 
PLUS 
CARE: 
GENERAL 
REQUIREMENTS 
"SEC. 431. PURPOSE. 
42 USC 11391. 
"The purpose of the program authorized under this subtitle is to 
provide rental housing assistance, in connection with supportive 
services funded from sources other than this subtitle, to homeless 
persons with disabilities (primarily persons who are seriously men-
tally ill, have chronic problems with alcohol, drugs, or both, or have 
acquired immunodeficiency syndrome and related diseases) and the 
families of such persons. 
9-194 O - 91 - 33 : QL 3 Part 5 
104 STAT. 4348 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 11392. 
"SEC. 432. RENTAL HOUSING ASSISTANCE. 
"(a) IN GENERAL.—The Secretary is authorized, in accordance 
with the provisions of this subtitle, to provide rental housing assist-
ance under parts II, III, and IV. 
"(b) Funding Limitations.—To the maximum extent practicable, 
the Secretary shall reserve not less than 50 percent of all funds 
provided under this subtitle for homeless individuals who are seri-
ously mentally ill or have chronic problems with alcohol, drugs, or 
both. 
42 use 11393. 
"SEC. 433. SUPPORTIVE SERVICES REQUIREMENTS. 
"(a) MATCHING FUNDING.— 
"(1) IN GENERAL.—Each recipient shall be required to supple-
ment the assistance provided under this subtitle with an equal 
amount of funds for supportive services from sources other than 
this subtitle. Each recipient shall certify to the Secretary its 
compliance with this paragraph, and shall include with the 
certification a description of the sources and simounts of such 
supplemental funds. 
"(2) DETERMINATION OF MATCHING AMOUNTS.—In calculating 
the amount of supplemental funds provided under this subtitle, 
a recipient may include the value of any lease on a building, 
any salary paid to staff to carry out the program of the recipi-
ent, and the value of the time and services contributed by 
volunteers to carry out the program of the recipient at a rate 
determined by the Secretary. 
"(b) RECAPTURE.—If the supportive services and funding for the 
supportive services required by this section are not provided, the 
Secretory may recapture any unexpended housing assistance. 
42 use 11394. 
"SEC. 434. APPLICATIONS. 
"(a) IN GENERAL.—An application for rental housing assistance 
under this subtitle shall be submitted by an applicant in such forms 
and in accordance with such procedures as the Secretery shall 
esteblish. 
"(b) MINIMUM CONTENTS.—The Secretary shall require that an 
application identify the need for the assistance in the community to 
be served and shall contain at a minimum— 
"(1) a request for housing assistonce under part II, III, or IV, 
or a combination, specif)dng the number of units requested and 
the amount of necessary budget authority; 
"(2) a description of the size and characteristics of the popu-
lation of eligible persons; 
"(3) an identification of the need for the program in the 
community to be served; 
"(4) the identity of the proposed service provider or providers 
(which may be, or include, the applicant) and a stotement of the 
qualifications of the provider or providers; 
"(5) a description of the supportive services that the applicant 
proposes to assure will be available for eligible persons; 
"(6) a description of the resources that are expected to be 
made available to provide the supportive services required by 
section 433; 
"(7) a description of the mechanisms for developing a housing 
and supportive services plan for each person and for monitoring 
each person's progress in meeting that plan; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4349 
"(8) reasonable assurances satisfactory to the Secretary that 
the supportive services will be provided for the full term of the 
housing assistance under part II, III, or IV, or a combination; 
and a certification from the applicant that it will fund the 
supportive services itself if the planned resources do not become 
available for any reason; 
"(9) a certification by the public official responsible for 
submitting the comprehensive housing affordability strategy 
under section 105 of the Cranston-Gonzalez National Affordable 
Housing Act that the proposed activities are consistent with the 
approved housing strategy of the unit of general local govern- 
/ 
ment within which housing assistance under this subtitle will 
be provided; 
"(10) a plan for— 
"(A) in the case of rental housing assistance under part 
II, providing housing assistance; 
"(B) identifying and selecting eligible persons to partici-
pate, including a proposed definition of the term 'chronic 
problems with alcohol, other drugs, or both'; 
"(C) coordinating the provision of housing assistance and 
supportive services; 
"(D) ensuring that the service providers are providing 
supportive services adequate to meet the needs of the per-
sons served; 
"(E) obtaining participation of eligible persons who have 
previously not been assisted under programs designed to 
assist the homeless or have been considered not capable of 
participation in these programs; this plan shall specifically 
address how homeless persons, as defined in section 
103(aX2XC), (and the families of such persons) will be 
brought into the program; 
"(11) in the case of housing assistance under part III, identi-
fication of the specific structures that the recipient is proposing 
for rehabilitation and assistance; and 
"(12) in the case of housing assistance under part IV, identi-
fication of the nonprofit entity that will be the owner or lessor 
of the property, and identification of the specific structures in 
which the nonprofit entity proposes to house eligible persons. 
"SEC. 435. SELECTION CRITERIA. 
42 USC 11395. 
"(a) IN GENERAL.—The Secretary shall establish selection criteria 
for a national competition for assistance under this subtitle, which 
shall include— 
"(1) the ability of the applicant to develop and operate the 
proposed assisted housing and supportive services program, 
taking into account the quality of £iny ongoing program of the 
applicant; 
"(2) geographic diversity among the projects to be assisted; 
"(3) the need for a program providing housing assistance and 
supportive services for eligible persons in the area to be served; 
"(4) the quality of the proposed program for providing 
supportive services and housing assistance; 
"(5) the extent to which the proposed funding for the support-
ive services is or will be available; 
"(6) the extent to which the project would meet the needs of 
the homeless persons proposed to be served by the program; 
104 STAT. 4350 
PUBLIC LAW 101-625—NOV. 28, 1990 
*\7) the extent to which the program integrates program 
recipients into the community served by the program; and 
"(8) the cost-effectiveness of the proposed progrsim; and 
"(9) such other factors as the Secretary specifies in regula-
tions to be appropriate for purposes of canying out the program 
established by this subtitle in an effective and efficient manner. 
"(b) FUNDING LIMITATION.—No more than 10 percent of the assist-
ance made available under this subtitle for any fiscal year may be 
used for programs located within any one unit of general local 
government. 
42 use 11396. 
"SEC. 436. REQUIRED AGREEMENTS. 
"The Secretary may not approve assistance under this subtitle 
unless the applicant agrees— 
"(1) to operate the proposed program in accordance with the 
provisions of this subtitle; 
"(2) to conduct an ongoing assessment of the housing assist-
ance and supportive services required by the participants in the 
program; 
"(3) to assure the adequate provision of supportive services to 
the participants in the program; and 
"(4) to comply with such other terms and conditions as the 
Secretary may establish for purposes of carrying out the pro-
gram in an effective and efficient manner. 
42 use 11397. 
"SEC. 437. TERMINATION OF ASSISTANCE. 
"(a) AUTHORITY.—If an eligible individual who receives assistance 
under this subtitle violates program requirements, the recipient 
may terminate assistance in accordance with the process established 
pursuant to subsection (b). 
"(b) PROCEDURE.—In terminating assistance under this section, 
the recipient shall provide a formal process that recognizes the 
rights of individuals receiving such assistance to due process of law. 
42 u s e 11398. 
"SEC. 438. DEFINITIONS. 
"For purposes of this subtitle: 
"(1) The term 'acquired immunodeficiency sjmdrome and re-
lated diseases' has the same meaning given that term in section 
853 of the Cranston-Gonzalez National Affordable Housing Act. 
"(2) The term 'appliceuit' means— 
"(A) in the case of rental housing assistance under parts 
II and IV, a State, unit of general local government, or 
Indian tribe; and 
"(B) in the case of single room occupancy housing under 
the section 8 moderate rehabilitation program under part 
III (i) a State, unit of general local government, or Indian 
tribe (that shall be responsible for assuring the provision of 
supportive services and the overall administration of the 
program), and (ii) a public housing agency (that shall be 
primarily responsible for administering the housing assist-
ance under part III). 
"(3) The term 'eligible person' means a homeless person with 
disabilities (primarily persons who are seriously mentally ill, 
have chronic problems with alcohol, drugs, or both, or have 
acquired immunodeficiency syndrome and related diseases) and 
the family of such a person. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4351 
"(4) The term 'Indian tribe' has the meaning given such term 
in section 102 of the Housing and Community Development Act 
of 1974. 
"(5) The term 'person with disabilities' has the same meaning 
given the term in section 811 of the Cranston-Gonzalez National 
Affordable Housing Act. 
"(6) The term 'public housing agency' has the meaning given 
such term in section 3(b)(6) of the United States Housing Act of 
1937. 
"(7) The term 'recipient' means an applicant approved for 
participation in the program authorized under this subtitle. 
"(8) The term 'Secretary' means the Secretary of Housing and 
Urban Development. 
"(9) The term 'seriously mentally ill' means having a severe 
and persistent mental or emotional impairment that seriously 
limits a person's ability to live independently. 
"(10) The term 'State' means each of the several States, the 
District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, the Northern Mariana 
Islands, the Trust Territory of the Pacific Islands, and any other 
territory or possession of the United States. 
"(11) The term 'supportive services' means assistance that the 
Secretary determines (A) addresses the special needs of eligible 
persons; and (B) provides appropriate services or assists such 
persons in obtaining appropriate services, including health care, 
mental health services, substance and alcohol abuse services, 
child care services, case management services, counseling, 
supervision, education, job training, and other services essential 
for achieving and maintaining independent living. In-patient 
acute hospital care shall not qualify as a supportive service. 
"(13) The term 'unit of general local government' has the 
meaning given such term in section 102 of the Housing and 
Community Development Act of 1974. 
"SEC. 439. AUTHORIZATION OF APPROPRIATIONS. 
"(a) IN GENERAL.—For purposes of the housing program under 
part II of this subtitle, there are authorized to be appropriated such 
sums as may be necessary. 
"(b) PART III.—For purposes of the housing program under part III 
of this subtitle, the budget authority available under section 5(c) of 
the United States Housing Act of 1937 for assistance under section 
8(eX2) of such Act is authorized to be increased by such sums as may 
be necessary. 
"(c) PART IV.—For purposes of the housing program under part IV 
of this subtitle, there are authorized to be appropriated such sums as 
may be necessary. 
"(d) AvAiLABiuTY.—Sums appropriated under this section shall 
remain available until expended. 
"PART II—SHELTER PLUS CARE: HOMELESS 
RENTAL HOUSING ASSISTANCE 
42 use 11399. 
"SEC. 441. PURPOSE. 
"The Secretary is authorized to use amounts made available 
under section 439(a) to provide rental housing assistance in accord-
ance with the requirements of this part. 
42 use 11401. 
104 STAT. 4352 
PUBLIC LAW 101-625—NOV. 28, 1990 
Government 
contracts. 
42 use 11402. 
42 use 11401a. 
"SEC. 442. HOUSING ASSISTANCE. 
"Where necessary to assure that the provision of supportive serv-
ices to persons is feasible, a recipient may require that a person 
participating in the program live (1) in a particular structure or unit 
for up to the first year of participation, and (2) within a particular 
geographic area for the full period of participation or the period 
remaining after the period referred to in paragraph (1). 
"SEC. 443. AMOUNT OF ASSISTANCE. 
"The contract with a recipient for assistance under this part shall 
be for a term of 5 years. Each contract shall provide that the 
recipient shall receive aggregate amounts not to exceed the appro-
priate existing housing fair market rent limitation under section 
8(c) of the United States Housing Act of 1937 in effect at the time 
the application is approved. At the option of the recipient and 
subject to the availability of such amounts, the recipient may re-
ceive in any year (1) up to 25 percent of such amounts or (2) such 
' 
higher percentage as the Secretary may approve upon a demonstra-
tion satisfactory to the Secretary that the recipient has entered into 
f 
firra financial commitments to ensure that the housing assistance 
described in the application will be provided for the full term of the 
contract. Any amounts not needed for a year may be used to 
increase the amount available in subsequent years. Each recipient 
shall ensure that the assistance provided by the Secretary, and any 
amounts provided from other sources, are msinaged so that the 
housing £issistance described in the application is provided for the 
full term of the assistance. 
42 use 11402a. 
"SEC. 444. HOUSING STANDARDS AND RENT REASONABLENESS. 
"(a) STANDARDS REQUIRED.—The Secretary shall require that— 
"(1) before any assistance may be provided to or on behalf of 
the person, each unit shall be inspected by the applicant di-
rectly or by another entity, including the local public housing 
agency (or if no such agency exists in the applicable area, an 
entity selected by the Secretary), to determine that the unit 
meete the housing quality standards under section 8 of the 
United States Housing Act of 1937 and that the occupancy 
charge for the dwelling unit is reasonable; and 
"(2) the recipient shall make at least annual inspections of 
each unit during the contract term. 
"(b) PROHIBITION.—No assistance may be provided for a dwelling 
unit (1) for which the occupancy charge is not reasonable, or (2) 
which fails to meet the housing standards, unless the owner 
promptly corrects the deficiency £ind the recipient verifies the 
correction. 
42 use 11402b. 
42 use 11402c. 
"SEC. 445. TENANT RENT. 
"Each tenant shall pay as rent an amount determined in accord-
ance with the provisions of section 3(aXl) of the United States 
Housing Act of 1937. 
"SEC. 446. ADMINISTRATIVE FEES. 
"From amounts made available under appropriations Acts, the 
Secretary shall make amounts available to pay the entity admin-
istering the housing assistance an administrative fee in an amount 
determined appropriate by the Secretary for the costs of administer-
ing the housing assistance. 
, 
, 
, 
,^ , 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4353 
"PART III—SHELTER PLUS CARE: SECTION 8 
MODERATE 
REHABILITATION 
ASSISTANCE 
FOR SINGLE ROOM OCCUPANCY DWELLINGS 
"SEC. 451. PURPOSE. 
"The Secretary is authorized to use amounts made available 
under section 439(b) of this subtitle only in connection with the 
moderate rehabilitation of single room occupancy housing described 
in section 8(n) of the United States Housing Act of 1937 for occu-
pancy by homeless persons. However, amounts made available 
under section 439(b) may be used in connection with the moderate 
rehabilitation of efficiency units if the building owner agrees to pay 
the additional cost of rehabilitating and operating the efficiency 
units. 
'SEC. 
4
5
2
. 
FIRE 
AND 
SAFETY 
IMPROVEMENTS. 
"Each contract for housing assistance pajmients entered into 
using the authority provided under section 439(b) shall require the 
installation of a sprinkler system that protects all major spaces, 
hard-wired smoke detectors, and such other fire and safety improve-
ments as may be required by State or local law. For purposes of this 
section, the term 'major spaces' means hallways, large common 
areas, and other areas specified in local fire, building, or safety 
codes. 
"SEC. 453. CONTRACT REQUIREMENTS. 
"Each contract for annual contributions entered into by the Sec-
retary with a public housing agency to obligate the authority made 
available under section 439(b) shall— 
"(1) commit the Secretary to make the authority available to 
the public housing agency for an aggregate period of 10 years, 
and require that any amendments increasing the authority 
shall be available for the remainder of such 10-year period; 
"(2) provide the Secretary with the option to renew the 
contract for an additional period of 10 years, subject to the 
availability of authority; and 
"(3) provide that, notwithstanding any other provision of law, 
first priority for occupancy of housing rehabilitated under this 
part III shall be given to homeless persons. 
"SEC. 454. OCCUPANCY. 
"(a) OCCUPANCY AGREEMENT.—The occupancy agreement between 
the tenant and the owner shall be for at least one month. 
"(b) VACANCY PAYMENTS.—If an eligible person vacates a dwelling 
unit before the expiration of the occupancy agreement, no assistance 
pa5anent may be made with respect to the unit after the month 
during which the unit was vacated, unless it is occupied by another 
eligible person. 
"PART 
IV—SHELTER 
PLUS 
CARE: 
SECTION 
2
0
2 
RENTAL 
ASSISTANCE 
"SEC. 461. PURPOSE. 
"The Secretary is authorized to use amounts made available 
under section 439(c) of this subtitle only in connection with the 
42 use 11403. 
42 use 11403a. 
42 use 11403b. 
42 use 11403c. 
42 use 11404. 
104 STAT. 4354 
PUBLIC LAW 101-625—NOV. 28, 1990 
provision of rental housing assistance under section 202 of the 
Housing Act of 1959 in fiscal year 1991 or section 811 of the 
Cranston-Gonzalez National Affordable Housing Act in fiscal year 
Government 
1992 for very low-income eligible persons. The contract between the 
contracts. 
Secretary and the recipient shall require the recipient to enter into 
contracts with owners or lessors of housing meeting the require-
ments of section 202 or section 611 for the purpose of providing such 
rental housing assistance. 
, 
42 use 11404a. 
"SEC. 462. AMOUNT OF ASSISTANCE. 
"The contract with a recipient of assistance under this part shall 
be for a term of 5 years. Each contract shall provide that the 
recipient shall receive aggregate amounts not to exceed the appro-
priate existing housing fair market rent limitation under section 
8(c) of the United States Housing Act of 1937 in effect at the time 
the application is approved. Each recipient shall ensure that the 
assistance provided by the Secretary, and any amounts provided 
from other sources, are managed so that the housing assistance 
described in the application is provided for the full term of the 
assistance. 
42 use 11404b. 
"SEC. 463. HOUSING STANDARDS AND RENT REASONABLENESS. 
"(a) IN GENERAL.—The Secretary shall require that (1) the recipi-
ent inspect each unit before any assistance may be provided to or on 
behalf of the person to determine that the occupancy charge for the 
housing being or to be provided is reasonable and that each unit 
meets housing standards established by the Secretary for the pur-
pose of this part, and (2) the recipient make at least annual inspec-
tions of each unit during the contract term. 
(b) PROHIBITION.—No assistance may be provided for a dwelling 
unit (1) for which the occupancy charge is not reasonable, or (2) 
which fails to meet the housing standards, unless the owner or 
lessor, as the case may be, promptly corrects the deficiency and the 
recipient verifies the correction. 
42 use 11404c. 
"SEC. 464. ADMINISTRATIVE FEES. 
"From amounts made available under appropriations Acts, the 
Secretary shall make amounts available to pay the nonprofit entity 
that is the owner or lessor of the housing assisted under this part an 
administrative fee in an amount determined appropriate by the 
Secretary for the costs of administering the housing Eissistance. 
"Subtitle E—Miscellaneous 
42 use 11405. 
42 use 11391 
note. 
Regulations. 
"SEC. 471. ENVIRONMENTAL REVIEW. 
"The provisions of, and the regulations and procedures applicable 
under, section 104(g) of the Housing and Community Development 
Act of 1974 shall apply to assistance and projects under this title.". 
(b) IMPLEMENTATION.—Not later than 180 days after the date 
funds authorized under section 439 of the Stewart B. McKinriey 
Homeless Assistance Act, as amended by this section, first become 
available for obligation, the Secretary shall by notice establish such 
requirements as may be necessary to carry out the provisions of 
subtitle D of title IV of that Act. Such requirements shall be subject 
to section 553 of title 5, United States Code. The Secretary shall 
issue regulations based on the initial notice before the expiration of 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4355 
Regulations. 
42 u s e 11399 
note. 
the 8-month period following the date of the notice. The Secretary 
sh£ill issue regulations based on the initisil notice before the expira-
tion of the 8-month period following the date of the notice. In 
developing program guidelines and regulations to implement such 
subtitle, the Secretary of Housing and Urban Development may 
consult with the Secretary of Health and Human Services with 
respect to supportive services aspects of this subtitle. 
(c) TRANSITION PROVISIONS.—Amounts appropriated for use under 
subtitle D of title IV of the Stewart B. McKinney Homeless Assist-
ance Act, as it existed immediately before the effective date of the 
amendment made by this section, that are or become available for 
obligation shall be available for use under subtitle D of title IV of 
the Stewart B. McKinney Homeless Assistance Act, as amended by 
this section. 
SEC. 822. DEFINITION OF "HOMELESS PERSON". 
Section 103(a) of the Stewart B. McKinney Homeless Assistance 
Act is amended by adding after "homeless individual" the following: 42 USC 11302. 
"or homeless person". 
SEC. 823. TRANSITIONAL RULE. 
(a) IN GENERAL.—The amendment made by section 821 shall take 
(1) on October 1,1992, or 
(2) on the date specified by a statute adopting a proposed 
allocation formula described in subsections (b) and (c), 
whichever is later. 
(b) FEASIBIUTY STUDY.—The Secretary shall carry out a study to 
determine the feasibility of allocating homeless assistance by a 
formula that distributes housing assistance for the homeless in 
accordance with the relative incidence of homelessness in jurisdic-
tions across the United States. If the Secretary determines that the 
use of such a formula is feasible, the Secretary shall develop one or 
more such formulas. In determining alternative allocation formulas, 
the Secretary shall consider— 
(1) objective measures of the incidence of homelessness; 
(2) the relation between the supply of affordable housing for 
very low-income families and the number of such families in the 
jurisdiction; 
(3) poverty; 
(4) housing overcrowding; and 
(5) any other relevant factors, including the reliability of data 
pertaining to homelessness. 
(c) REPORT.—Not later than 18 months after the date of enactment 
of this Act, the Secretary shall transmit to the Congress a report on 
the feasibility study under this subsection. Such report shall contain 
any formula or formulas developed under subsection (b) together 
with detailed analysis of the formulas. In preparing such report, the 
Secretary shall consult with organizations representing homeless 
persons, nonprofit organizations, public housing agencies, and State 
and locEil housing and service agencies. 
(d) CONFORMING AMENDMENT.—Upon the adoption of a formula 
described in this section, that part of the table of contents of the 
Stewart B. McKinney Homeless Assistance Act that relates to title 
IV of such Act is amended to read as follows: 
42 USC 11361 
note. 
104 STAT. 4356 
PUBLIC LAW 101-625—NOV. 28, 1990 
"TITLE IV—HOUSING ASSISTANCE 
"Subtitle A—Greneral Provisions 
"Sec. 401. Purpose. 
"Sec. 402. Definitions. 
"Sec. 403. General authority. 
"Sec. 404. Allocation formula. 
"Sec. 405. Discretionary allocation. 
"Sec. 406. Responsibilities of grantees and project sponsors. 
"Sec. 407. Administrative provisions. 
"Sec. 408. Authorization of appropriations. 
"Sec. 409. Reports to Congress. 
"Subtitle B—Approved Activities 
"Sec. 411. Homelessness prevention. 
"Sec. 412. Emergency shelter. 
"Sec. 413. Transitional housing for the homeless. 
"Sec. 414. Permanent housing for homeless persons with disabilities. 
"Sec. 415. Trsmsition to permanent housing. 
"Sec. 416. Development of additional approved activities. 
42 u s e 11301 
note. 
Federal 
Register, 
publication. 
"Subtitle C—Section 8 Single Room Occupancy 
"Sec. 421. Section 8 single room occupancy provisions. 
"Sec. 422. Applicability to Indian tribes. 
"Subtitle D—Shelter Plus Care Program 
"PART I—SHELTER PLUS CARE: GENERAL REQUIREMENTS 
"Sec. 431. Purpose. 
"Sec. 432. Rental housing assistance. 
"Sec. 433. Supportive services requirements; matching funding. 
"Sec. 434. Applications. 
"Sec. 435. Selection criteria. 
"Sec. 436. Required agreements. 
"Sec. 437. Termination of assistance. 
"Sec. 438. Definitions. 
' 
"Sec. 439. Authorization of appropriations. 
"PART II—SHELTER PLUS CARE: HOMELESS RENTAL HOUSING ASSISTANCE 
"Sec. 441. Purpose. 
"Sec. 442. Housing assistance. 
"Sec. 443. Amount of assisttmce. 
"Sec. 444. Housing standards and rent reasonableness. 
"Sec. 445. Tenant rent. 
"Sec. 446. Administrative fees. 
"PART III—SHELTER PLUS CARE: MODERATE REHABIUTATION ASSISTANCE FOR SINGLE 
ROOM OCCUPANCY DWELUNGS 
"Sec. 451. Purpose. 
"Sec. 452. Fire and safety improvements. 
"Sec. 453. Contract requirements. 
"Sec. 454. Occupancy. 
"PART IV—SECTION 202 Rental Assistance 
"Sec. 461. Purpose. 
"Sec. 462. Amount of assistance. 
"Sec. 463. Housing standards and rent reasonableness. 
"Sec. 464. Administrative fees. 
"Subtitle E—Miscellaneous 
"Sec. 471. Environmental review.". 
SEC. 825. STRATEGY TO ELIMINATE UNFIT TRANSIENT FACILITIES. 
(a) IN GENERAL.—The Secretary of Housing and Urban Develop-
ment shall, not more than 9 months after the date of enactment of 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4357 
the Cranston-Gonzalez National Affordable Housing Act, identify 
the States and units of general local government which use unfit 
transient facilities as housing for homeless families with children 
and develop and publish in the Federal Register a strategy to 
eliminate such use by July 1, 1992, In developing the strategy 
required under this section, the Secretary shall consult with the 
Secretary of the Department of Health and Human Services, the 
Administrator of the Federal Emergency Management Agency, 
other appropriate Federal officials, appropriate States and units of 
general local government, major organizations representing home-
less persons and other experts. 
Q)) CONTENTS OF STRATEGY.—The strategy developed under this 
section shall specify— 
(1) actions to be taken to ensure that families with children 
currently residing in unfit transient facilities will make a 
timely transition to permanent housing; 
(2) actions to be taken to provide sufficient emergency, transi-
tional, and permanent housing to preclude the future use of 
unfit transient facilities as housing for homeless families with 
children; and 
(3) changes in Federal, State, and local statutes and regula-
tions that are needed to eliminate the use of unfit transient 
facilities as housing for homeless families with children. 
(c) IMPLEMENTATION OF STRATEGY.—To ensure that the strategy 
developed under this section is carried out within the statutory 
deadline, the Secretary of Housing and Urban Development shall be 
authorized to use and apply the following additional resources and 
powers: 
(1) such preferences in the allocation of resources under the 
Stewart B. McKinney Homeless Assistance Act as the Secretary 
determines to be appropriate; 
(2) such limitations upon a jurisdiction's discretion to allocate 
resources among approved activities under the Stewart B. 
McKinney Homeless Assistance Act as the Secretary deter-
mines to be appropriate; 
(3) such expedited decisionmaking or waivers or revisions of 
regulatory requirements under other provisions of Federal law 
as the Secretary determines to be appropriate; and 
(4) such additional constraints on the use of funds under other 
provisions of Federal law as the Secretary determines to be 
appropriate. 
(d) DEFINITIONS.—For purposes of this section the term 'unfit 
transient facility' means a facility that provides transient accom-
modations to homeless persons and families in an environment that 
does not meet the minimum standards of habitability established by 
the Secretary. 
PART 2—AMENDMENTS TO CURRENT PROGRAM 
SEC. 831. COMPREHENSIVE HOMELESS ASSISTANCE PLAN. 
(a) INCLUSION OF CHILD CARE STRATEGY AND FOOD DONATION 
STRATEGY.—Section 401(b) of the Stewart B. McKinney Homeless 
Assistance Act (42 U.S.C. 11361(b)) is amended— 
(1) by striking "and" at the end of paragraph (5); 
(2) by striking the period at the end of paragraph (6) and 
inserting a semicolon; and 
r 
104 STAT. 4358 
PUBLIC LAW 101-625—NOV. 28, 1990 
(3) by adding at the end the following new paragraphs: 
Daycare. 
"(7) a strategy provided by metropolitan cities, urban coun-
ties, Indian tribes, or otherwise on a local basis, for providing 
child care services within the area, which strategy shall be 
submitted (by the entity submitting the comprehensive plan) to 
any service providers under programs for which such entity 
receives assistance under this title; 
"(8) a strategy provided by metropolitan cities, urban coun-
ties, Indian tribes, or otherwise on a local basis, for providing a 
plan to encourage a program which waives certain local or State 
liability regulations or laws for those who wish to donate food to 
a nonprofit charitable organization or food bank for use in 
community shelters or other domiciles for the homeless, shall be 
submitted (by the entity submitting the comprehensive plan) to 
any service providers under programs for which such entities 
receive assistance under this title; and". 
(b) INCLUSION OP INDIAN TRIBES.—Section 401 of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11361) is amended— 
(1) in subsection (a), by adding at the end the following new 
sentence: "Assistance authorized by this title may be provided 
to any Indian tribe that is eligible to receive a grant under the 
emergency shelter grants program in any fiscal year, but only if 
the tribe submits biennisQly to the Secretary of Housing and 
Urban Development a comprehensive homeless assistance plan 
under this section."; 
(2) in subsection (bX5), by inserting "Indian tribe," after 
"State,"; 
(3) in subsection (cXD, by inserting "Indian tribe," after 
"State," each place it appears; 
(4) in subsection (d), by inserting "Indian tribe," after "State," 
each place it appears; and 
(5) in subsection (g>— 
(A) by inserting "(or tribal agency or contact)" after 
"State contact person"; 
(B) by inserting "(or tribe)" before the comma; and 
(C) by inserting "(or tribal agency or contact person)" 
after "or contact person". 
(c) MODIFICATION OF DEVELOPMENT AND TIMING, CONTENT, AND 
REVIEW STANDARDS.— 
(1) PuBUC PARTICIPATION PROCESS FOR DEVELOPMENT OF PLANS 
AND ANNUAL REPORTS.—Section 401 of the Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 11361) is amended by adding 
at the end the following new subsection: 
"(h) CONSULTATION.— 
"(1) REQUIREMENT.—Each State, Indian tribe, metropolitan 
city, and urban county described in subsection (a) shall consult 
with, and consider the comments of, citizens, public and private 
homeless shelter and service providers, and local governments 
concerning the contents of the comprehensive plan and the 
annual progress report required under subsection (d), prior to 
their submission to the Secretary. 
"(2) MODIFICATION.—Each State, Indian tribe, metropolitan 
city, and urban county described in subsection (a) may, if it 
considers it appropriate, modify the comprehensive plan and 
annual report to reflect the comments of citizens, public and 
private homeless shelter and service providers, and local 
governments. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4359 
"(3) AVAILABILITY.—Each State, Indian tribe, metropolitan 
city, and urban county shall make the comprehensive plan and 
annual report available to the public. 
"(4) CERTIFICATION.—Each State, Indian tribe, metropolitan 
-^ 
city, and urban county described in subsection (a) shall certify to 
the Secretary that citizens, public and private homeless shelter 
and service providers, and local governments were consulted 
concerning the contents of the comprehensive plan and the 
annual report, and that their views were considered prior to the 
submission of these documents to the Secretary, and that the 
comprehensive plan and annual report were available to the 
public". 
(2) MODIFICATION OF TIMING, CONTENT, AND REVIEW STAND-
ARDS.—Section 401 of the Stewart B. McKinney Homeless 
Assistance Act (42 U.S.C. 11361) is amended— 
(A) in subsection (a)(1), by striking "annually" and insert-
^ing "biennially"; 
(B) in subsection (b)(2), by striking "and services" and 
inserting ", services, and programs"; 
(C) in subsection (b)(3)— 
, 
(i) by striking "and services" and inserting ", serv-
s
-
, 
ices, and programs"; 
(ii) by striking "and" before "(B)"; and 
(iii) by inserting before the semicolon at the end the 
following: ", (C) responding to the emergency and long-
term housing and service needs of the homeless popu-
lation, (D) providing housing and supportive services 
for various homeless populations to facilitate their 
transition to more independent living, (E) providing 
housing and supportive services to the portions of the 
homeless population that are not capable of achieving 
total independence, and (F) preventing and reducing 
homelessness through (i) interventions focused upon 
individuals and families who are in danger of becoming 
homeless, and (ii) addressing systemic factors contribut-
ing to homelessness". 
SEC. 832. EMERGENCY SHELTER GRANTS PROGRAM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—The first sentence of sec-
tion 417 of the Stewart B. McKinney Homeless Assistance Act (42 
U.S.C. 11377) is amended to read as follows: "There are authorized 
to be appropriated to carry out this subtitle $125,000,000 for fiscal 
year 1991 and $138,000,000 for fiscal year 1992.". 
(b) USE OF GRANTS FOR ADMINISTRATIVE COSTS.— 
(1) IN GENERAL.—Subtitle B of title IV of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11371 et seq.) is 
amended by adding at the end the following new section: 
"SEC. 418. ADMINISTRATIVE COSTS. 
42 USC 11378. 
"A recipient may use up to 5 percent of any annual grant received 
under this subtitle for administrative purposes. A recipient State 
^ 
shall share the amount available for administrative purposes pursu-
ant to the preceding sentence with local governments funded by the 
State.". 
(2) CONFORMING AMENDMENT.—The table of contents for sub-
title B of title IV of the Stewart B. McKinney Homeless Assist-
104 STAT. 4360 
PUBLIC LAW 101-625—NOV. 28, 1990 
• • 
c 
ance Act is amended by inserting after the item relating to 
section 417 the following new item: 
"Sec. 418. Administrative costs.". 
(c) 
INCREASE IN , AMOUNT AVAILABLE FOR SERVICES.—Section 
414(aX2XB) of the Stewart B. McKinney Homeless Assistance Act (42 
U.S.C. 11374(aX2XB)) is amended by striking "20 percent" and 
< 
inserting "30 percent". 
(d) TREATMENT OF HOMELESSNESS PREVENTION ACTIVITIES.—Sec-
tion 414(aX4) of the Stewart B. McKinney Homeless Assistance Act 
(42 U.S.C. 11374(aX4)) is amended by striking the last sentence and 
inserting the following new sentence: "Not more than 30 percent of 
the aggregate amount of all assistance to a State, local government, 
or Indian tribe under this subtitle may be used for activities under 
this paragraph.". 
(e) REDUCTION OF REQUIRED MATCHING AMOUNTS AND CONFIDEN-
TIALITY.— 
(1) REDUCTION.—Section 415(a) of the Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 11375(a)) is amended— 
(A) in paragraph (1), by striking "Each" the first place it 
appears and inserting "Except as provided in paragraph (2), 
each"; 
(B) by redesignating paragraph (2) as paragraph (3); and 
(C) by inserting after paragraph (1) the following new 
paragraph: 
"(2) Each recipient under this subtitle that is a State shall be 
required to supplement the assistance provided under this sub-
title with an amount of funds from sources other than this 
subtitle equal to the difference between the amount received 
under this subtitle and $100,000. If the amount received by the 
State is $100,000 or less, the State may not be required to 
supplement the assistance provided under this subtitle.'. 
(2) USE OF BENEFIT AND CONFIDENTIALITY.—Section 415(c) of 
the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 
11375(c)) is amended— 
(A) by striking "and" at the end of paragraph (2); 
(B) by striking the period at the end of paragraph (3) and 
inserting "; and '; and 
(C) by adding at the end the following new paragraphs: 
"(4) in the case of a recipient that is a State, obtain any 
matching amounts required under subsection (a) in a manner so 
that local governments, Indian tribes, agencies, and local non-
profit organizations receiving assistance from the grant that are 
least capable of providing the recipient State with such match-
ing amounts receive the benefit of the $100,000 subtrahend 
under subsection (aX2); and 
"(5) develop and implement procedures to ensure the con-
fidentiality of records pertaining to any individual provided 
,- 
family violence prevention or treatment services under any 
project assisted under this subtitle and that the address or 
location of any family violence shelter project assisted under 
this subtitle will, except with written authorization of the 
person or persons responsible for the operation of such shelter, 
not be made public". 
(3) 
COMPREHENSIVE 
HOMELESS 
ASSISTANCE PLAN.—Section 
401(b) of the Stewart B. McKinney Homeless Assistance Act (42 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4361 
^ U.S.C. 11361(b)), as amended by the preceding provisions of this 
Act, is further amended by adding at the end the following new 
paragraph: 
"(9) with respect to a comprehensive plan submitted by a 
State appl3dng for a grant under the emergency shelter grants 
program under subtitle B, a strategy for obtaining any match-
ing amounts required under section 415(a) in a manner so that 
local governments, Indian tribes, agencies, and local nonprofit 
organizations receiving assistance from the grant that are least 
capable of providing the recipient State with such matching 
amounts receive the benefit of the $100,000 subtrahend under 
paragraph (2) of such section.". 
(f) INDIAN TRIBE ELIGIBILITY FOR GRANTS.— 
(1) DEFINITION OF INDIAN TRIBES.—Section 411 of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11371) is 
amended by adding at the end the following new paragraph: 
"(10) The term 'Indian tribe' has the meaning given such term 
in section 102(3X17) of the Housing and Community Develop-
ment Act of 1974.". 
(2) GRANT ASSISTANCE.—Section 412 of the Stewart B. McKin-
ney Homeless Assistance Act (42 U.S.C. 11372) is amended by 
striking "States and local governments" and inserting "States 
and local governments, and for Indian tribes,". 
(3) ALLOCATION AND DISTRIBUTION OF ASSISTANCE.—Section 
413(a) of the Stewart B. McKinney Homeless Assistance Act (42 
U.S.C. 11373(a)) is amended— 
(A) by inserting ", and to Indian tribes," after "States)"; 
) 
and 
(B) bv inserting ", or for Indian tribes" after "urban 
county' each place it appears. 
(4) DISTRIBUTION TO NONPROFIT ORGANIZATIONS.—The first sen-
tence of section 413(c) of the Stewart B. McKinney Homeless 
Assistance Act (42 U.S.C. 11373(c)) is amended by inserting "or 
Indian tribe" after "local government". 
(5) REALLOCATION OF FUNDS.—Section 413(d)(3) of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11373(dX3)) is 
amended— 
(A) by inserting "or Indian tribe" after "State" each place 
it appears; and 
(B) by inserting ", or other Indian tribes, as applicable," 
after "counties". 
(6) ESSENTIAL SERVICES CAP.—Section 414(aX2) of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11374(aX2)) is 
amended— 
- 
(A) in subparagraph (A), by inserting "or Indian tribe" 
after "local government"; and 
(B) in subparagraph (B), by striking "or local govern-
ment" and inserting ", local government, or Indian tribe". 
(7) INITIAL ALLOCATION OF ASSISTANCE.—Section 416(b) of the 
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 
11376(b)) is amended by inserting "Indian tribe ," after "State,". 
(g) MINIMUM STANDARDS OF HABITABILITY.—Section 416 of 
the 
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11376) is 
amended by adding at the end the following: 
"(c) MINIMUM STANDARDS OF HABITABILITY.—The Secretary shall 
prescribe such minimum standards of habitability as the Secretary 
determines to be appropriate to ensure that emergency shelters 
104 STAT. 4362 
PUBLIC LAW 101-625—NOV. 28, 1990 
assisted under this section are environments that provide appro-
priate privacy, safety, and sanitary and other health-related condi-
tions for homeless persons and families. Grantees are authorized to 
establish standards of habitability in addition to those prescribed by 
the Secretary.". 
(h) CONSISTENCY WITH HOUSING STRATEGY.—Section 415(c) of the 
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11375(c)) 
is amended— 
(1) by striking "and" at the end of clause (2); 
V 
- 
(2) by striking the period at the end of clause (3) and inserting 
"; and"; and 
(3) by adding at the end the following: 
"(4) activities undertaken by the recipient with assistance 
under this subtitle are consistent with any housing strategy 
submitted by the grantee in accordance with section 105 of the 
Cranston-Gonzalez National Affordable Housing Act.". 
SEC. 833. SUPPORTIVE HOUSING DEMONSTRATION PROGRAM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 428(a) of the 
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11388(a)) 
is amended to read as follows: 
"(a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 
be appropriated to carry out this subtitle $125,000,000 for fiscal year 
1991 and $150,000,000 for fiscal year 1992.". 
(b) MAXIMUM NUMBER OF HANDICAPPED RESIDENTS IN PERMANENT 
HOUSING FOR HANDICAPPED.—Section 422(12XB) of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11382(12XB)) is 
amended by inserting after "handicapped homeless persons" the 
second place it appears the following: ' (or 16 such persons, but only 
if not more than 20 percent of the units in a project are designated 
for such persons)". 
(c) CONVERSION OF ADVANCES T
O GRANTS.— 
(1) IN GENERAL.—Section 423(a)(1) of the Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 11383(aXl)) is amended— 
(A) by striking "An advance" and inserting "A grant"; 
and 
i 
(B) by striking "an advance" and inserting "a grant". 
(2) CONVERSION OF ADVANCE.—Section 423(b) of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 113830))) is 
amended— 
(A) by striking "(b) REPAYMENT OF ADVANCE.—" and 
inserting the following: 
"(b) REPAYMENT O
R CONVERSION OF ADVANCE.— 
"(1) REPAYMENT.—"; and 
(B) by adding at the end the following new paragraph: 
"(2) CONVERSION.—At such times as the Secretary may deter-
mine, and in accordance with such terms and conditions, and 
accounting and other procedures, as the Secretary may pre-
scribe, the Secretary may convert an advance made under 
subsection (aXD to a grant.'. 
(d) OPERATING C!OST PAYMENTS.—Section 423(a)(3) of the Stewart 
i 
B. McKinney Homeless Assistance Act (42 U.S.C. 11383(aX3)) is 
amended to read as follows: 
"(3) Annual pa3nnents for operating costs of trsinsitional hous-
ing (without regard to whether the housing is an existing 
structure), not to exceed 75 percent of the annual operating 
costs of such housing, and any recipient may reapply for such 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4363 
assistance or for the renewal of such assistance for use during 
the 10-year period under section 424(aX2XD) (unless such assist-
ance is no longer necessary, in the determination of the Sec-
retary), and for operating costs for permanent housing for 
handicapped homeless persons, not to exceed 75 percent of the 
annual operating costs of such housing in any year during the 
10-year period under section 424(aX2XD), and any recipient may 
reapply for such assistance or for renewal of such assistance for 
use during such period (unless such assistance is no longer 
necessary, in the determination of the Secretary).". 
(e) ELIGIBILITY OF NEW CONSTRUCTION.—Section 423(a) of the Stew-
art B. McKinney Homeless Assistance Act (42 U.S.C. 11383(a)), as 
amended by the preceding provisions of this section, is further 
amended— 
(1) by redesignating paragraphs (3) through (5) as paragraphs 
(4) through (6), respectively; 
(2) by inserting after paragraph (2) the following new 
paragraph: 
"(3) A grant, in an amount not to exceed $400,000, for the new 
construction of a structure for use in the provision of supportive 
housing."; and 
(3) in the last sentence, by striking "paragraphs (1) and (2)" 
and inserting "paragraphs (1), (2), and (3) . 
(f) SITE CONTROL REQUIREMENT!—Section 424(aX3) of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11384(aX3)) is 
amended— 
(1) by striking "(3) The Secretary" and inserting the following: 
"(3XA) Except as provided in subparagraph (B), the Secretary"; 
and 
(2) by adding at the end the following new subparagraph: 
"(B) The Secretary may waive the requirement under 
subparagraph (A) for any proposed project for which the Sec-
retary determines such requirement is inapplicable because, 
under the application, the families and individuals served own 
or control, or will eventually own or control, the site.". 
(g) CHILD CARE SERVICES,—Section 423(a) of the Stewart B. McKin-
ney Homeless Assistance Act (42 U.S.C. 11383(a)), as amended by the 
preceding provisions of this section, is further amended by inserting 
after paragraph (5) the following: 
"(6) A grant to establish and operate a child care services Daycare, 
program for homeless families as follows: 
"(A) A program under this paragraph shall include— 
"(i) establishing, licensing, and operating an on-site 
child care facility for the residents of transitional hous-
ing; or 
"(ii) making contributions for the child care costs of 
residents of transitional housing to existing community 
child care programs and facilities; and 
"(iii) counseling designed to inform the residents of 
transitional housing of public and private child care 
services for which they are eligible. 
"(B) A grant under this paragraph for any child care 
services program shall not exceed the amount equal to 75 
percent of the cost of operating the program for a period of 
up to 5 years. 
104 STAT. 4364 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(C) Child care services provided with respect to a child 
care services program assisted under this paragraph shall 
meet any applicable State and local laws and regulations.". 
(h) EUMINATION OF SiTE CONTROL AND EMPLOYMENT ASSISTANCE 
PROGRAMS AS SELECTION CRITERIA.—Section 424(b) of the Stewart B, 
/ McKinney Homeless Assistance Act (42 U.S.C. 11384(b)) is 
amended— 
(1) in paragraph (6), by inserting "and" after the semicolon at 
the end; 
(2) by striking paragraphs (7) and (8); and 
- 
(3) by redesignating paragraph (9) as paragraph (7). 
(i) CONFIDENTIALITY REQUIREMENT FOR DOMESTIC VIOLENCE SHEIT 
TERS.—Section 424(c) of the Stewart B. McKinney Homeless Assist-
ance Act (42 U.S.C. 11384(c)) is amended— 
(1) in paragraph (4), by striking "and" at the end; "
^ 
(2) in paragraph (5), by striking the period at the end and 
inserting "; and"; and 
(3) by adding at the end the following new parsigraph: 
Records. 
* 
"(6) to develop and implement procedures to ensure the con-
fidentigdity of records pertaining to any individual provided 
family violence prevention or treatment services under any 
project assisted under this subtitle and that the address or 
location of any family violence shelter project assisted under 
t 
this subtitle will, except with written authorization of the 
person or persons responsible for the operation of such shelter, 
not be made public". 
^ 
(j) SHORT-TERM LEASES.— 
(1) 10-YEAR REQUIREMENT.—Soction 424(a)(2)(D) of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11384(a)(2)(D)) 
is amended by inserting before the semicolon at the end the 
following: ", except that in the case of projects not receiving an 
advance or grant under paragraph (1), (2), or (3) of section 423(a), 
assurances under this subparagraph shall be made annually 
that the project will be operated for the purpose specified in the 
application for such year". 
"S 
(2) RENEWED FUNDING FOR SHORT-TERM LEASE PROJECTS.—Sec-
' t. tion 424 of the Stewart B. McKinney Homeless Assistance Act 
••%t (42 U.S.C. 11384) is amended by adding at the end the following 
new subsection: 
"(f) RENEWED FUNDING FOR SHORT-TERM LEASE PROJECTS.—The 
Secretary may not provide assistance under paragraph (4), (5), or (6) 
of section 423(a) to any project not receiving assistance under para-
graph (1), (2), or (3) of such section unless assurances have been 
made under subsection (aX2XD) of this section that the project will 
be operated for the purpose specified in the application for the year 
for which such assistance is provided.", 
(k) INDIAN TRIBE ELIGIBIUTY.— 
(1) DEFINITIONS.—Section 422 of the Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 11382) is amended— 
(A) in paragraph (1), by inserting "Indian tribe," after 
"State,"; and 
(B) by redesignating paragraphs (4) through (14) as para-
graphs (5) through (15), respectively; and 
(C) by inserting after paragraph (3) the following new 
paragraph: 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4365 
"(4) The term 'Indian tribe' has the meaning given such term 
in section 102(aX17) of the Housing and Community Develop-
ment Act of 1974.". 
(2) PROGRAM REQUIREMENTS.—Section 424 of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11384) is 
amended by inserting "or Indian tribe" after "State" each place 
it appears. 
(3) MATCHING FUNDS.—Section 425 of the Stewart B. McKin-
ney Homeless Assistance Act (42 U.S.C. 11385) is amended— 
(A) in subsection (a), by inserting "or Indian tribe" after 
"State"; and 
(B) in subsection (b), by striking "State or local" and 
inserting "State, tribal, or local". 
SEC. 834. SUPPLEMENTAL ASSISTANCE FOR FACILITIES TO ASSIST THE 
HOMELESS. 
(a) AUTHORIZATION OF APPROPRIATIONS.—The first sentence of sec-
tion 434 of the Stewart B. McKinney Homeless Assistance Act (42 
U.S.C. 11394) is amended to read as follows: "There are authorized 
to be appropriated to carry out this subtitle $30,000,000 for each of 
fiscal years 1991 and 1992.". 
(b) SHORT-TERM LEASES.— 
(1) 10-YEAR REQUIREMENT.—Section 432(dX2) of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11392(dX2)) is 
£imended— 
(A) by striking "leased,"; and 
(B) by inserting before the semicolon at the end the 
following: ", except that in the case of any leased property 
receiving assistance under this subtitle other than for lease 
of the property, assurances under this paragraph shall be 
made annually that the project will be operated to assist 
homeless individuals for such year". 
(2) RENEWED FUNDING FOR SHORT-TERM LEASE PROJECTS.—Sec-
tion 432 of the Stewart B. McKinney Homeless Assistance Act 
(42 U.S.C. 11392) is amended by adding at the end the following 
new subsection: 
"(h) RENEWED FUNDING FOR SHORT-TERM LEASE PROJECTS.—The 
Secretary may not provide assistance under this subtitle for any 
leased property for any year unless assurances under subsection 
(dX2) of this section have been made that the project will be operated 
to assist homeless individuals for the year for which such assistance 
is provided.". 
(c) CONFIDENTIALITY REQUIREMENT FOR DOMESTIC VIOLENCE SHEL-
TERS.—Section 432(d) of the Stewart B. McKinney Homeless Assist-
ance Act (42 U.S.C. 11392(d)) is amended— 
(1) in paragraph (3), by striking "and" at the end; 
(2) by redesignating paragraph (4) as paragraph (5); and 
(3) by inserting after paragraph (3) the following new 
paragraph: 
"(4) has furnished assurances satisfactory to the Secretary Records. 
that the applicant will develop and implement procedures to 
ensure the confidentisdity of records pertaining to any individ-
ual provided family violence prevention or treatment services 
under any project assisted under this subtitle and that the 
address or location of any family violence shelter project £is-
sisted under this subtitle will, except with written authorization 
104 STAT. 4366 
PUBLIC LAW 101-625—NOV. 28, 1990 
of the person or persons responsible for the operation of such 
shelter, not be made public; and". 
(d) SITE CONTROL REQUIREMENT.—Section 432(e) of the Stewart B. 
McKinney 
Homeless Assistance Act (42 U.S.C. 11392(e)) is 
amended— 
(1) by striking "(e) SITE CONTROL.—The Secretary" and insert-
ing the following: 
"(e) SITE CONTROL.— 
r, ; 
"(1) IN GENERAL.—Except as provided in paragraph (2), the 
Secretary"; and 
(2) by adding at the end the following new paragraph: 
"(2) EXCEPTION.—The Secretary may waive the requirement 
under paragraph (1) for any proposed project for which the 
Secretary determines such requirement is inapplicable because, 
under the application, the families and individuals served own 
or control, or will eventually own or control, the site.". 
SEC. 835. SECTION 8 ASSISTANCE FOR SINGLE ROOM OCCUPANCY 
DWELLINGS. 
(a) INCREASE IN BUDGET AUTHORITY.—Section 441(a) of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11401(a)) is 
amended to read as follows: 
"(a) INCREASE IN BUDGET AUTHORITY.—The budget authority avail-
able under section 5(c) of the United States Housing Act of 1937 for 
assistance under section 8(e)(2) of such Act is authorized to be 
increased by $79,000,000 on or after October 1, 1990, and by 
$82,400,000 on or after October 1,1991.". 
(b) APPLICABILITY TO INDIAN HOUSING AUTHORITIES.—Section 441 
of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 
11401) is amended by adding at the end the following new 
subsection: 
"(g) APPUCABILTTY TO INDIAN HOUSING AUTHORITIES.—Amounts 
made available for assistance under this section shall be available 
through contracts between the Secretary and Indian housing 
authorities, and the provisions of this section regarding public 
housing authorities shall include and apply to Indian housing 
authorities.". 
SEC. 836. HOUSING AFFORDABILITY STRATEGY REQUIREMENT. 
(a) IN GENERAL.—Section 401 of the Stewart B. McKinney Home-
less Assistance Act (42 U.S.C. 11361) is amended to read as follows: 
"SEC. 401. HOUSING AFFORDABILITY STRATEGY. 
"Assistance may be made under this title only if the grantee 
certifies that it is following— 
"(1) a current housing affordability strategy which has been 
approved by the Secretary in accordance with section 105 of the 
Cranston-Gonzalez National Affordable Housing Act, or 
"(2) a comprehensive homeless assistance plan which was 
approved by the Secretary during the 180-day period beginning 
on the date of enactment of the Cranston-Gonzalez National 
Affordable Housing Act, or during such longer period as may be 
prescribed by the Secretary in any case for good cause.". 
42 use 11361 
(b) EFFECTIVE DATE.—The smiendment made by subsection (a) 
note. 
shall take effect on October 1,1991. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4367 
SEC. 837. SHELTER PLUS CARE. 
(a) IN GENERAL.—Title IV of the Stewart B. McKinney Homeless 
Assistance Act is amended by adding at the end the following: 
"Subtitle F—Shelter Plus Care Program 
"PART I—SHELTER PLUS CARE: GENERAL 
REQUIREMENTS 
"SEC. 451. PURPOSE. 
42 USC 11403. 
"The purpose of the program authorized under this subtitle is to 
provide rental housing assistance, in connection with supportive 
services funded from sources other than this subtitle, to homeless 
persons with disabilities (primarily persons who are seriously men-
tally ill, have chronic problems with alcohol, drugs, or both, or have 
acquired immunodeficiency sjnidrome and related diseases) £md the 
families of such persons. 
"SEC. 452. RENTAL HOUSING ASSISTANCE. 
42 USC 11403a. 
"(a) IN GENERAL.—The Secretary is authorized, in accordance 
with the provisions of this subtitle, to provide rental housing assist-
ance under parts II, III, and IV. 
"(b) Funding Limitations.—To the maximum extent practicable, 
the Secretary shall reserve not less than 50 percent of all funds 
provided under this subtitle for homeless individuals who are seri-
ously mentally ill or have chronic problems with alcohol, drugs, or 
both. 
"SEC. 453. SUPPORTIVE SERVICES REQUIREMENTS. 
42 USCl 1403b. 
"(a) MATCHING FUNDING.— 
"(1) IN GENERAL.—Each recipient shall be required to supple-
ment the assistance provided under this subtitle with an equal 
amount of funds for supportive services from sources other than 
this subtitle. Each recipient shall certify to the Secretary its 
compliance with this paragraph, and shall include with the 
certification a description of the sources and amounts of such 
supplemental funds. 
(2) DETERMINATION OF MATCHING AMOUNTS.—In calculating 
the amount of supplemental funds provided under this subtitle, 
a recipient may include the value of any lease on a building, 
any salary paid to staff to carry out the program of the recipi-
ent, and the value of the time and services contributed by 
volunteers to carry out the program of the recipient at a rate 
determined by the Secretary. 
"(b) RECAPTURE.—If the supportive services and funding for the 
supportive services required by this section are not provided, the 
Secretary may recapture any unexpended housing assistance. 
"SEC. 454. APPLICATIONS. 
42 USC 11403c. 
"(a) IN GENERAL.—An application for rental housing assistance 
under this subtitle shall be submitted by an applicant in such forms 
and in accordance with such procedures as the Secretary shall 
establish. 
"(b) MINIMUM CONTENTS.—The Secretary shall require that an 
application identify the need for the assistance in the community to 
be served and shall contain at a minimum— 
104 STAT. 4368 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(1) a request for housing assistance under part II, III, or IV, 
or a combination, specifying the number of units requested and 
the amount of necessary budget authority; 
"(2) a description of the size and characteristics of the popu-
lation of eligible persons; 
"(3) an identification of the need for the program in the 
community to be served; 
"(4) the identity of the proposed service provider or providers 
(which may be, or include, the applicant) and a statement of the 
qualifications of the provider or providers; 
"(5) a description of the supportive services that the applicant 
proposes to assure will be available for eligible persons; 
"(6) a description of the resources that are expected to be 
made available to provide the supportive services required by 
section 453; 
"(7) a description of the mechanisms for developing a housing 
and supportive services plan for each person and for monitoring 
each person's progress in meeting that plan; 
"(8) reasonable assurances satisfactory to the Secretary that 
the supportive services will be provided for the full term of the 
housing Eissistance under part II, III, or IV, or a combination; 
and a certification from the applicant that it will fund the 
supportive services itself if the planned resources do not become 
available for any reason; 
"(9) a certification by the public official responsible for 
submitting the comprehensive housing affordability strategy 
under section 105 of the Cranston-Gonzalez National Affordable 
Housing Act that the proposed activities are consistent with the 
approved housing strategy of the unit of general local govern-
ment within which housing assistance under this subtitle will 
be provided; 
"(10) a plan for— 
"(A) in the case of rental housing assistance under part 
II, providing housing assistance; 
"(B) identifying and selecting eligible persons to partici-
pate, including a proposed definition of the term 'chronic 
problems with alcohol, other drugs, or both'; 
"(C) coordinating the provision of housing assistance and 
supportive services; 
"(D) ensuring that the service providers are providing 
supportive services adequate to meet the needs of the per-
sons served; 
"(E) obtaining participation of eligible persons who have 
previously not been assisted under programs designed to 
assist the homeless or have been considered not capable of 
participation in these programs; this plan shall specifically 
address how homeless persons, as defined in section 
103(a)(2)(C), (and the families of such persons) will be 
brought into the program; 
"(11) in the case of housing assistance under part III, identi-
fication of the specific structures that the recipient is proposing 
for rehabilitation and assistance; and 
"(12) in the case of housing assistance under part IV, identi-
fication of the nonprofit entity that will be the owner or lessor 
of the property, and identification of the specific structures in 
which the nonprofit entity proposes to house eligible persons. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4369 
'SEC. 455. SELECTION CRITERIA. 
42 use 11403d. 
"(a) IN GENERAL.—The Secretary shall establish selection criteria 
for a national competition for assistance under this subtitle, which 
shall include— 
"(1) the ability of the applicant to develop and operate the 
proposed assisted housing and supportive services program, 
taking into account the quality of any ongoing program of the 
applicant; 
(2) geographic diversity among the projects to be assisted; 
"(3) the need for a program providing housing assistance and 
supportive services for eligible persons in the area to be served; 
*(4) the quality of the proposed program for providing 
supportive services and housing assistance; 
(5) the extent to which the proposed funding for the support-
ive services is or will be available; 
"(6) the extent to which the project would meet the needs of 
the homeless persons proposed to be served by the program; 
"(7) the extent to which the program integrates program 
recipients into the community served by the program; 
"(8) the cost-effectiveness of the proposed program; and 
"(9) such other factors as the Secretary specifies in regula- Regulations, 
tions to be appropriate for purposes of carrying out the program 
established by this subtitle in an effective and efficient manner. 
"(b) FUNDING LIMITATION.—No more than 10 percent of the assist-
ance made available under this subtitle for any fiscal year may be 
used for programs located within any one unit of general local 
government. 
"SEC. 456. REQUIRED AGREEMENTS. 
42 USC 11403e. 
"The Secretary may not approve assistance under this subtitle 
unless the applicant agrees— 
"(1) to operate the proposed program in accordance with the 
provisions of this subtitle; 
"(2) to conduct an ongoing assessment of the housing assist-
ance and supportive services required by the participants in the 
program; 
"(3) to assure the adequate provision of supportive services to 
the participants in the program; and 
"(4) to comply with such other terms and conditions as the 
Secretary may establish for purposes of carrying out the pro-
gram in an effective and efficient manner. 
"SEC. 457. TERMINATION OF ASSISTANCE. 
42 USC 11403f. 
"(a) AUTHORITY.—If an eligible individual who receives assistance 
under this subtitle violates program requirements, the recipient 
may terminate assistance in accordance with the process established 
pursuant to subsection (b). 
"0)) PROCEDURE.—In terminating assistance under this section, 
the recipient shall provide a formal process that recognizes the 
rights of individuals receiving such assistance to due process of law. 
"SEC. 458. DEFINITIONS. 
42 USC 11403g. 
"For purposes of this subtitle: 
"(1) The term 'acquired immunodeficiency syndrome and re-
lated diseases' has the meaning given such term in section 853 
of the Cranston-Gonzalez National Affordable Housing Act. 
"(2) The term 'applicant' means— 
104 STAT. 4370 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(A) in the case of rental housing assistance under parts 
II and IV, a State, unit of general local government, or 
Indian tribe; and 
"(B) in the case of single room occupancy housing under 
the section 8 moderate rehabilitation program under part 
III (i) a State, unit of general local government, or Indian 
tribe (that shall be responsible for assuring the provision of 
supportive services and the overall administration of the 
program), and (ii) a public housing agency (that shall be 
primarily responsible for administering the housing assist-
ance under part III). 
"(3) The term 'eligible person' means a homeless person with 
disabilities (primarily persons who are seriously mentally ill, 
have chronic problems with alcohol, drugs, or both, or have 
acquired immunodeficiency syndrome and related diseases) and 
the family of such a person. 
"(4) The term 'Indian tribe' has the meaning given such term 
in section 102 of the Housing and Community Development Act 
of 1974. 
"(5) The term 'nonprofit organization' has the meaning given 
such term by section 104 of the Cranston-Gonzalez National 
Affordable Housing Act. 
"(6) The term 'person with disabilities' has the same meaning 
given the term in section 811 of the Cranston-Gonzalez Nation^ 
Affordable Housing Act. 
"(7) The term 'public housing agency' has the meaning given 
such term in section 3(bX6) of the United States Housing Act of 
1937. 
"(8) The term 'recipient' means an applicant approved for 
participation in the program authorized under this subtitle. 
"(9) The term 'Secretary' means the Secretary of Housing and 
Urban Development. 
"(10) The term 'seriously mentally ill' means having a severe 
and persistent mental or emotional impairment that seriously 
/ 
limits a person's ability to live independently. 
"(11) The term 'State' means each of the several States, the 
District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, the Northern Mariana 
Islands, the Trust Territory of the Pacific Islands, and any other 
/ 
territory or possession of the United States. 
"(12) The term 'supportive services' means assistance that the 
Secretary determines (A) addresses the special needs of eligible 
persons; and (B) provides appropriate services or assists such 
persons in obtaining appropriate services, including health care, 
mental health services, substance and alcohol abuse services, 
"^tld care services, case management services, counseling. 
Supervision, education, job training, and other services essential 
for achieving and maintaining independent living. Inpatient 
acute hospital care shall not qualify as a supportive service. 
"(13) The term 'unit of general local government' has the 
meaning given such term in section 102 of the Housing and 
Community Development Act of 1974. 
42USC11403h. 
"SEC. 459. AUTHORIZATION OF APPROPRIATIONS. 
"(a) IN GENERAL.—For purposes of the housing program under 
part II of this subtitle, there are authorized to be appropriated 
$80,400,000 for fiscal year 1991, and $167,200,000 for fiscal year 1992. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4371 
"(b) PART III.—For purposes of the housing program under part III 
of this subtitle, the budget authority available under section 5(c) of 
the United States Housing Act of 1937 for assistance under section 
8(eX2) of such Act is authorized to be increased by $24,800,000 on or 
after October 1, 1990, and $54,200,000 on or after October 1, 1991. 
"(c) PART IV.—For purposes of the housing program under part IV 
of this subtitle, there are authorized to be appropriated $18,000,000 
for fiscal year 1991, and $37,200,000 for fiscal year 1992. 
"(d) AVAILABILITY.—Sums appropriated under this section shall 
remain available until expended. 
( 
"PART II—SHELTER PLUS CARE: HOMELESS 
RENTAL HOUSING ASSISTANCE 
"SEC. 461. PURPOSE. 
42 USC 11404. 
"The Secretary is authorized to use amounts made available 
under section 459(a) to provide rental housing assistance in accord-
ance with the requirements of this part. 
"SEC. 462. HOUSING ASSISTANCE. 
42 USC 11404a. 
"Where necessary to assure that the provision of supportive serv-
ices to persons is feasible, a recipient may require that a person 
participating in the program live (1) in a particular structure or unit 
for up to the first year of participation, and (2) within a particular 
geographic area for the full period of participation or the period 
remaining after the period referred to in paragraph (1). 
"SEC. 463. AMOUNT OF ASSISTANCE. 
"The contract with a recipient for assistance under this part shall 
be for a term of 5 years. Each contract shall provide that the 
recipient shall receive aggregate amounts not to exceed the appro-
priate existing housing fair market rent limitation under section 
8(c) of the United States Housing Act of 1937 in effect at the time 
the application is approved. At the option of the recipient and 
subject to the availability of such amounts, the recipient may re-
ceive in any year (1) up to 25 percent of such amounts or (2) such 
higher percentage as the Secretary may approve upon a demonstra-
tion satisfactory to the Secretary that the recipient has entered into 
firm financial commitments to ensure that the housing assistance 
described in the application will be provided for the full term of the 
contract. Any amounts not needed for a year may be used to 
increase the amount available in subsequent years. Each recipient 
shall ensure that the assistance provided by the Secretary, and any 
amounts provided from other sources, are managed so that the 
housing assistance described in the application is provided for the 
full term of the assistance. 
"SEC. 464. HOUSING STANDARDS AND RENT REASONABLENESS. 
42 USC 11404c. 
"(a) STANDARDS REQUIRED.—The Secretary shall require that— 
"(1) before any assistance may be provided to or on behalf of 
the person, each unit shall be inspected by the applicant di-
rectly or by another entity, including the local public housing 
agency (or if no such ^ency exists in the applicable area, an 
entity selected by the Secretary), to determine that the unit 
meets the housing quality standards under section 8 of the 
United States Housing Act of 1937 and that the occupancy 
charge for the dwelling unit is reasonable; and 
42 USC 11404b. 
Government 
contracts. 
104 STAT. 4372 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(2) the recipient shall make at least annual inspections of 
' 
"' 
each unit during the contract term. 
"(b) PROHIBITION.—No assistance may be provided for a dwelling 
unit (1) for which the occupancy charge is not reasonable, or (2) 
which fails to meet the housing standards, unless the owner 
promptly corrects the deficiency and the recipient verifies the 
correction. 
42 use 11404d. 
"SEC. 465. TENANT RENT. 
"Each tenant shall pay as rent an amount determined in accord-
ance with the provisions of section 3(aXl) of the United States 
Housing Act of 1937. 
42 use 11404e. 
"SEC. 466. ADMINISTRATIVE FEES. 
SI 
"From amounts made available under appropriations Acts, the 
Secretary shall make amounts available to pay the entity admin-
istering the housing assistance an administrative fee in an amount 
determined appropriate by the Secretary for the costs of administer-
ing the housing assistance. 
"PART III—SHELTER PLUS CARE: SECTION 8 
MODERATE 
REHABILITATION 
ASSISTANCE 
FOR SINGLE ROOM OCCUPANCY DWELLINGS 
42 use 11405. 
"SEC. 471. PURPOSE. 
"The Secretary is authorized to use amounts made available 
under section 459(b) of this subtitle only in connection with the 
moderate rehabilitation of single room occupancy housing described 
in section 8(n) of the United States Housing Act of 1937 for occu-
pancy by homeless persons. However, amounts made available 
under section 459(b) may be used in connection with the moderate 
rehabilitation of efficiency units if the building owner agrees to pay 
the additional cost of rehabilitating and operating the efficiency 
units. 
^ 
, 
42 use 11405a. 
"SEC. 472. FIRE AND SAFETY IMPROVEMENTS. 
Government 
"Each Contract for housing assistance pa3mients entered into 
contracts. 
using the authority provided under section 459(b) shall require the 
installation of a sprinkler system that protects all major spaces, 
hard-wired smoke detectors, and such other fire and safety improve-
,
^ 
ments as may be required by State or local law. For purposes of this 
section, the term 'major spaces' meems hallways, large common 
areas, and other areas specified in local fire, building, or safety 
codes. 
;; 
; 
. 
42 use 11405b. 
"SEC. 473. CONTRACT REQUIREMENTS. 
"Each contract for annual contributions entered into by the Sec-
retary with a public housing agency to obligate the authority made 
available under section 459(b) shall— 
"(1) commit the Secretary to make the authority available to 
the public housing agency for an aggregate period of 10 years, 
and require that any amendments increasing the authority 
shall be available for the remainder of such 10-year period; 
"(2) provide the Secretary with the option to renew the 
contract for an additional period of 10 years, subject to the 
availability of authority; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4373 
"(3) provide that, notwithstanding any other provision of law, Homeless, 
first priority for occupancy of housing rehabilitated under this 
part III shall be given to homeless persons. 
"SEC. 474. OCCUPANCY. 
42 USC 11405c. 
"(a) OCCUPANCY AGREEMENT.—The occupancy agreement between 
the tenant and the owner shall be for at least one month. 
"(b) VACANCY PAYMENTS.—If an eligible person vacates a dwelling 
unit before the expiration of the occupancy agreement, no assistance 
pajnnent may be made with respect to the unit after the month 
during which the unit was vacated, unless it is occupied by another 
eligible person. 
"PART 
IV—SHELTER 
PLUS 
CARE: 
SECTION 202 
RENTAL 
ASSISTANCE 
"SEC. 481. PURPOSE. 
"The Secretary is authorized to use amounts made available 
under section 459(c) of this subtitle only in connection with the 
provision of rental housing assistance under section 202 of the 
Housing Act of 1959, section 811 of the Cranston-Gonzalez National 
Affordable Housing Act for very low-income eligible persons. The 
contract between the Secretary and the recipient shall require the 
recipient to enter into contracts with owners or lessors of housing 
meeting the requirements of section 202 or section 611, as appro-
priate for the purpose of providing such rental housing assistance. 
"SEC. 482. AMOUNT OF ASSISTANCE. 
"The contract with a recipient of assistance under this part shall 
be for a term of 5 years. Each contract shall provide that the 
recipient shall receive aggregate amounts not to exceed the appro-
priate existing housing fair market rent limitation under section 
8(c) of the United States Housing Act of 1937 in effect at the time 
the application is approved. Each recipient shall ensure that the 
assistance provided by the Secretary, and any amounts provided 
from other sources, are managed so that the housing assistance 
described in the application is provided for the full term of the 
assistance. 
"SEC. 483. HOUSING STANDARDS AND RENT REASONABLENESS. 
42 USC 11406b. 
"(a) IN GENERAL.—The Secretary shall require that (1) the recipi-
ent inspect each unit before any assistance may be provided to or on 
behalf of the person to determine that the occupancy charge for the 
housing being or to be provided is reasonable and that each unit 
meets housing standards established by the Secretary for the pur-
pose of this part, and (2) the recipient make at least annual inspec-
tions of each unit during the contract term. 
"(b) PROHIBITION.—No assistance may be provided for a dwelling 
unit (1) for which the occupancy charge is not reasonable, or (2) 
which fails to meet the housing standards, unless the owner or 
lessor, as the case may be, promptly corrects the deficiency and the 
recipient verifies the correction. 
"SEC. 484. ADMINISTRATIVE FEES. 
42 USC 11406c. 
"From amounts made available under appropriations Acts, the 
Secretary shall make amounts available to pay the nonprofit entity 
that is the owner or lessor of the housing assisted under this part an 
42 USC 11406. 
Government 
contracts. 
42 USC 11406a. 
Government 
contracts. 
104 STAT. 4374 
PUBLIC LAW 101-625—NOV. 28, 1990 
administrative fee in an amount determined appropriate by the 
Secretary for the costs of administering the housing assistance.". 
42 use 11403 
(b) IMPLEMENTATION.—Not later than 180 days after the date 
J^ote. 
funds authorized under section 459 of the Stewart B. McKinney 
Homeless Assistance Act, as amended by this section, first become 
^ 
available for obligation, the Secretary shall by notice establish such 
requirements as may be necessary to carry out the provisions of 
subtitle F of that Act. Such requirements shall be subject to section 
Regulations. 
553 of title 5, United States Code. The Secretary shall issue regula-
tions based on the initial notice before the expiration of the eight-
Regulations, 
month period following the date of the notice. The Secretary shall 
issue regulations based on the initial notice before the expiration of 
the 8-month period following the date of the notice. In developing 
program guidelines and regulations to implement such subtitle, the 
Secretary of Housing and Urban Development may consult with the 
Secretary of Health and Human Services with respect to supportive 
services aspects of this subtitle. 
42 use 11403 
(c) TRANSITION PROVISIONS.—Amounts appropriated for use under 
note. 
subtitle D of title IV of the Stewart B. McKinney Homeless Assist-
ance Act, as it existed immediately before the date of enactment 
' 
- made by this section, that are or become available for obligation 
^_ 
shall be available for use under subtitle F of title IV of the McKin-
'':'. • , 
ney Act, as amended by this section. 
(d) CONFORMING AMENDMENT.—That part of the table of contents 
of the Stewart B. McKinney Homeless Assistance Act that relates to 
title IV of such Act is amended by adding at the end the following: 
g.',, 
jt f'. 
"Subtitle F—Shelter Plus Care Program 
~ J, 
' >ri 
"PART I—SHELTER PLUS CARE: GENERAL REQUIREMENTS 
*' . 
-r^ 
"Sec. 451. Purpose. 
"Sec. 452. Rental housing assistance. 
, 
"Sec. 453. Supportive services requirements; matching funding. 
T 
"Sec. 454. Applications. 
"Sec. 455. Selection criteria. 
. , 
"Sec. 456. Required agreements. 
, 
-~- "Sec. 457. Termination of assistance. 
"Sec. 458. Definitions. 
*•' 
' 
"Sec. 459. Authorization of appropriations. 
"PART II—SHELTER PLUS CARE: HOMELESS RENTAL HOUSING ASSISTANCE 
"Sec. 461. Purpose. 
"Sec. 462. Housing assistance. 
" 
'' 
"Sec. 463. Amount of assistance. 
.. 
•
•
• 
"Sec. 464. Housing standards and rent reasonableness. 
w . 
"Sec. 465. Tenant rent. 
- ' 
"Sec. 466. Administrative fees. 
"PART III- -SHELTER PLUS CARE: MODERATE REHABILITATION ASSISTANCE FOR SINGLE 
ROOM OCCUPANCY DWELLINGS 
"Sec. 471. Purpose. 
"Sec. 472. Fire and seifety improvements. 
"Sec. 473. Contract requirements. 
"Sec. 474. Occupancy. 
"PART IV—SECTION 202 RENTAL ASSISTANCE 
"Sec. 481. Purpose. 
"Sec. 482. Amount of assistance. 
"Sec. 483. Housing standards and rent reasonableness. 
- • . 
"Sec. 484. Administrative fees.". 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4375 
PART 3 ~ E F F E C T I V E DATE 
SEC. 841. EFFECTIVE DATE. 
If the Stewart B. McKinney Homeless Assistance Amendments 
Act of 1990 is enacted before the enactment of this Act, the provi-
sions of this subtitle and the amendments made by this subtitle 
shall not take effect. 
Subtitle D—Housing Opportunities for Persons A
I
D
S H
o
u
s
i
n
g 
With AIDS 
A
r
^
^
"
"
^
'
' 
'AIDS Housing Opportunity 
SEC. 851. SHORT TITLE. 
This subtitle may be cited as the 
Act". 
SEC. 852. PURPOSE. 
The purpose of this title is to provide States and localities with the 
resources and incentives to devise long-term comprehensive strate-
gies for meeting the housing needs of persons with acquired 
immunodeficiency syndrome. 
SEC. 853. DEFINITIONS. 
For purposes of this subtitle: 
(1) The term "acquired immunodeficiency syndrome and re-
lated diseases" means the disease of acquired immunodeficiency 
syndrome or any conditions arising from the etiologic agent for 
. acquired immunodeficiency syndrome. 
(2) The term "applicant" means a State, a unit of general 
local government, or a nonprofit sponsor receiving assistance 
from a grantee. 
(3) The term "low-income individual" means any individual or 
family whose incomes do not exceed 80 percent of the median 
income for the area, as determined by the Secretary of Housing 
and Urban Development, with adjustments for smaller and 
larger families, except that the Secretary may establish income 
ceilings higher or lower than 80 percent of the median income 
for the area if the Secretary finds that such variations are 
necessary because of prevailing levels of construction costs or 
unusually high or low family incomes. 
(4) The term "grantee" means a State or unit of general local 
government receiving grants from the Secretary under this 
subtitle. 
(5) The term "metropolitan area" means a metropolitan 
statistical area as established by the Office of Management and 
Budget. Such term includes the District of Columbia. 
(6) The term "locality" means the geographical area within 
the jurisdiction of a local government. 
(7) The term "recipient' mesms a grantee or other applicant 
receiving funds under this title. 
(8) The term "Secretary" means the Secretary of Housing and 
Urban Development. 
(9) The term "State" means a State of the United States, the 
District of Columbia, and the Commonwealth of Puerto Rico, or 
any agency or instrumentality thereof that is established pursu-
42 use 12901 
note. 
42 use 12901. 
42 use 12902. 
104 STAT. 4376 
PUBLIC LAW 101-625—NOV. 28, 1990 
ant to legislation and designated by the chief executive to act on 
behalf of the jurisdiction with regard to provisions of this 
subtitle. 
(10) The term "unit of general local government" has the 
same meaning as in 104 of this Act. 
42 use 12903. 
SEC. 854. GENERAL AUTHORITY. 
(a) GRANTS AUTHORIZED.—The Secretary shall, to the extent of 
amounts approved in appropriations Acts under section 863, make 
grants to States and units of general local government. 
Ot)) EuGiBiLTTY.—A jurisdiction shall be eligible to receive a grant 
only if it has obtained an approved housing strategy (or an approved 
abbreviated housing strategy) in accordance with section 105 of this 
Government 
Act. A grantee shall carry out activities authorised under this 
contracts. 
subtitle through contracts with project sponsors, except that a 
grantee that is a State shall obtain the approval of the unit of 
general local government for the locality in which a project is to be 
located prior to entering into such contracts. 
(c) ALLOCATION OF RESOURCES.— 
(1) IN GENERAL.—90 percent of the amounts approved in 
appropriations Acts under section 863 shall be allocated among 
eligible grantees on the basis of the incidence of acquired 
immunodeficiency syndrome. Of the amounts made available 
under the previous sentence, the Secretary shall allocate— 
(A) 75 percent among units of general local government 
located in metropolitan statistical areas with populations in 
excess of 500,000 and more than 1,500 cases of acquired 
immunodeficiency syndrome and States with more than 
1,500 cases of acquired immunodeficiency sjoidrome outside 
of metropolitan statistical areas described in subparagraph 
(A), and 
(B) 25 percent among units of general local government 
in metropolitan statistical areas with populations in excess 
of 500,000 and more than 1,500 cases of acquired 
immunodeficiency syndrome, that have a higher than aver-
age per capita incidence of acquired immunodeficiency 
syndrome. 
(2) MINIMUM GRANT.—Subject only to the availability of 
amounts pursuant to appropriations Acts under section 863, for 
each fiscal year each eligible grantee under paragraph (1) shall 
receive funding according to its proportionate share of the total, 
except that each entity shall receive a minimum allocation of 
$200,000 from subparagraphs (A) and (B) of paragraph (1) com-
bined, and any increase this entails from the formula amount 
will be deducted from all other allocations exceeding $200,000 
on a pro rata basis. If allocation under subparagraph (A) of 
paragraph (1) would allocate less than $200,000 for any State, 
the allocation for such State shall be $200,000 and the amount 
of the increase under this sentence shall be deducted on a pro 
rata basis from the allocations of the other States, except that a 
reduction under this subparagraph may not reduce the amount 
allocated to any eligible entity to less than $200,000. 
(3) NONEUGIBLE GRANTEES.— 
(A) IN GENERAL.—10 percent of the amounts appropriated 
under section 863 shall be distributed to grantees and 
recipients by the Secretary— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4377 
(i) to meet housing needs in States and localities that 
do not qualify under paragraph (1), or that do qualify 
under paragraph (1) but do not have an approved hous-
ing strategy under section 105 of this Act, and 
(ii) to fund special projects of national significance. 
(B) SELECTION.—In selecting projects under this para-
graph, the Secretary shall consider (i) relative numbers of 
acquired immunodeficiency syndrome cases and per capita 
acquired immunodeficiency sjoidrome incidence; (ii) hous-
ing needs of persons with acquired immunodeficiency syn-
drome in the community; (iii) extent of local planning and 
coordination of housing programs for persons with acquired 
immunodeficiency syndrome; and (iv) the likelihood of the 
continuation of State and local efforts. 
(C) NATIONAL SIGNIFICANCE PROJECTS.—For the purpose of 
subparagraph (AXii), in selecting projects of national signifi-
cance the Secretary shall consider (i) the need to assess the 
effectiveness of a particular model for providing supportive 
housing for persons with acquired immunodeficiency S5ni-
drome; (ii) the innovative nature of the proposed activity; 
and (iii) the potential replicability of the proposed activity 
in other similar localities or nationally. 
(d) APPLICATIONS.—Funds made avsiilable under this section shall 
be allocated among approvable applications submitted by eligible 
applicants. Applications for assistance under this section shall be 
submitted by an applicant in such form and in accordance with such 
procedures as the Secretary shall establish. Such applications shall 
contain— 
(1) a description of the proposed activities; 
(2) a description of the size and characteristics of the popu-
lation that would be served by the proposed activities; 
(3) a description of the public and private resources that are 
expected to be made available in connection with the proposed 
activities; 
(4) assurances satisfactory to the Secretary that any property 
purchased, leased, rehabilitated, renovated, or converted with 
assistance under this section shall be operated for not less than 
10 years for the purpose specified in the application, except as 
otherwise specified in this subtitle; 
(5) evidence in a form acceptable to the Secretary that the 
proposed activities will meet urgent needs that are not being 
met by avsdlable public and private sources; and 
(6) such other information or certifications that the Secretary 
determines to be necessary to achieve the purposes of this 
section. 
(e) ADDITIONAL REQUIREMENT FOR METROPOLITAN AREAS.—In addi- Grant programs. 
tion to the requirements of subsection (b), to be eligible for a grant to 
a metropolitan area under this section, the major city, urban county, 
and any city with a population of 50,000 or more in that metropoli-
tan area shall establish or designate a governmental agency or 
organization for receipt and use of amounts received from a grant 
under this section and shall submit to the Secretary, together with 
the application under subsection (d) a proposal for the operation of 
such agency or organization. 
104 STAT. 4378 
PUBLIC LAW 101-625—NOV. 28, 1990 
Grant programs. 
42 use 12904. 
42 use 12905. 
SEC. 855. ELIGIBLE ACTIVITIES. 
Grants allocated under this subtitle shall be available only for 
approved activities to carry out strategies designed to prevent 
homelessness among such persons with acquired immunodeficiency 
syndrome. Approved activities shall include activities that— 
(1) enable public and nonprofit organizations or agencies to 
provide housing information to such persons and coordinate 
efforts to expand housing assistance resources for such persons 
under section 857; 
(2) facilitate the development and operation of shelter and 
services for such persons under section 858; 
(3) provide short-term rental assistance to such persons under 
section 859; 
(4) facilitate (through project-based rental assistance or other 
means) the moderate rehabilitation of single room occupancy 
dwellings (SROs) that would be made available only to such 
persons under section 860; 
(5) facilitate the development of community residences for 
eligible persons with acquired immunodeficiency syndrome 
under section 861; 
(6) carry out other activities that the Secretary develops in 
cooperation with eligible States and localities. 
The Secretary shall establish standards and guidelines for approved 
activities. The Secretary shall permit grantees to refine and adapt 
such standards and guidelines for individual projects, where 
such refinements and adaptations are made necessary by local 
circumstances. 
SEC. 856. RESPONSIBILITIES OF GRANTEES. 
(a) PROHIBITION OF SUBSTITUTION OF FUNDS.—Amounts received 
from grants under this subtitle may not be used to replace other 
amounts made available or designated by State or local govern-
ments for use for the purposes under this subtitle. 
0)) CAPABILITY.—The recipient shall have, in the determination of 
the grantee or the Secretary, the capacity and capability to effec-
tively administer a grant under this subtitle. 
(c) COOPERATION.—The recipient shall agree to cooperate and 
coordinate in providing assistance under this subtitle with the 
agencies of the relevant State and local governments responsible for 
services in the area served by the applicant for individuals with 
acquired immunodeficiency syndrome or related diseases and other 
public and private organizations and agencies providing services for 
such individuals. 
(d) No FEE.—The recipient shall agree that no fee will be charged 
of any low-income individual for any services provided with amounts 
from a grant under this subtitle and that if fees are charged of any 
other individuals, the fees will be based on the income and resources 
of the individual. 
(e) CoNFiDENTiAUTY.—The recipient shall agree to ensure the 
confidentiality of the name of any individual assisted with amounts 
from a grant under this subtitle and any other information regard-
ing individuals receiving such assistance. 
(f) FINANCIAL RECORDS.—The recipient shall agree to maintain 
and provide the grantee or the Secretary with financial records 
sufficient, in the determination of the Secretary, to ensure proper 
accounting and disbursing of amounts received from a grant under 
this subtitle. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4379 
SEC. 857. GRANTS FOR AIDS HOUSING INFORMATION AND COORDINATION 
SERVICES. 
Grants under this section may only be used for the following 
activities: 
(1) HOUSING INFORMATION SERVICES.—To provide (or contract 
to provide) counseling, information, and referral services to 
Eissist individuals with acquired immunodeficiency sjnidrome or 
related diseases to locate, acquire, finance, and maintain hous-
ing and meet their housing needs. 
(2) RESOURCE IDENTIFICATION.—To identify, coordinate, and 
develop housing assistance resources (including conducting 
preliminary research and making expenditures necessary to 
determine the feasibility of specific housing-related initiatives) 
for individuals with acquired immunodeficiency syndrome or 
related diseases. 
SEC. 858. AIDS SHORT-TERM SUPPORTED HOUSING AND SERVICES. 
(a) USE OF GRANTS.—Any amounts received from grants under 
this section may only be used to carry out a program to provide (or 
contract to provide) assistance to individuals with 
acquired 
immunodeficiency sjrndrome or related diseases who are homeless 
or in need of housing assistance to prevent homelessness, which may 
include the following activities: 
(1) SHORT-TERM SUPPORTED HOUSING.—Purchasing, leasing, 
renovating, repairing, and converting facilities to provide short-
term shelter and services. 
(2) SHORT-TERM HOUSING PAYMENTS ASSISTANCE.—Providing 
rent assistance pajmients for short-term supported housing and 
rent, mortgage, and utilities payments to prevent homelessness 
of the tenant or mortgagor of a dwelling. 
(3) SUPPORTIVE SERVICES.—Providing supportive services, to 
individuals assisted under paragraphs (1) and (2), including 
health, mental health, assessment, permanent housing place-
ment, drug and alcohol abuse treatment and counseling, day 
care, and nutritional services. 
(4) 
MAINTENANCE 
AND ADMINISTRATION.—Providing 
for 
maintenance, administration, security, operation, insurance, 
utilities, furnishings, equipment, supplies, and other incidental 
costs relating to any short-term supported housing provided 
under the demonstration program under this section. 
(5) TECHNICAL ASSISTANCE.—Providing technical assistance to 
such individuals to provide assistance in gaining access to bene-
fits and services for homeless individuals provided by the Fed-
eral Government and State and local governments. 
(b) PROGRAM REQUIREMENTS.— 
(1) MINIMUM USE PERIOD FOR STRUCTURES.— 
(A) IN GENERAL.—Any building or structure assisted with 
gmiounts from a grant under this section shall be main-
tained as a facility to provide short-term supported housing 
or 
assistance 
for 
individuals 
with 
acquired 
immunodeficiency s3nidrome or related diseases— 
(i) in the case of assistance involving substantial 
rehabilitation or acquisition of the building, for a 
period of not less than 10 years; and 
(ii) in the case of assistance under paragraph (1), (3), 
or (4) of subsection (a), for a period of not less than 3 
years. 
42 use 12906. 
42 use 12907. 
39-194 O - 91 - 34 : QL 3 Part 5 
104 STAT. 4380 
PUBLIC LAW 101-625—NOV. 28, 1990 
(B) WAIVER.—The Secretary may waive the requirement 
under subparagraph (A) with respect to any building or 
structure if the organization or agency that received the 
grant under which the building was assisted demonstrates, 
to the satisfaction of the Secretary, that— 
(i) the structure is no longer needed to provide short-
term supported housing or assistance or the continued 
operation of the structure for such purposes is no 
longer feasible; and 
(ii) the structure will be used to benefit individu£ils or 
families whose incomes do not exceed 80 percent of the 
median income for the area, as determined by the 
Secretary, with adjustments for smaller and larger 
families, except that the Secretary may establish 
income ceilings higher or lower than 80 percent of the 
median income for the area if the Secretary finds that 
such variations are necessary because of prevailing 
levels of construction costs or unusually high or low 
family incomes. 
(2) RESIDENCY AND LOCATION LIMITATIONS ON SHORT-TERM SUP-
PORTED HOUSING.— 
(A) RESIDENCY.—A short-term supported housing facility 
assisted with amounts from a grant under this section may 
not provide shelter or housing at any single time for more 
than 50 families or individuals. 
(B) LOCATION.—A facility for short-term supported hous-
ing assisted with amounts from a grant under this section 
may not be located in or contiguous to any other facility for 
emergency or short-term housing that is not limited to use 
by individuals with acquired immunodeficiency syndrome 
or related diseases. 
(C) WAIVER.—The Secretary may, as the Secretary deter-
mines appropriate, waive the limitations under subpara-
graphs (A) and (B) for any program or short-term supported 
housing facility. 
(3) TERM OF ASSISTANCE.— 
(A) SUPPORTED HOUSING ASSISTANCE.—A program assisted 
under this section may not provide residence in a short-
term housing facility assisted under this section to any 
individual for a sum of more than 60 days during any 
6-month period. 
(B) HOUSING PAYMENTS ASSISTANCE.—A program assisted 
under this section may not provide assistance for rent, 
mortgage, or utilities pa3anents to any individual for rent, 
mortgage, or utilities costs accruing over a period of more 
than 21 weeks of any 52-week period. 
(4) PLACEMENT.—A program assisted under this section shall 
provide for any individual who has remained in short-term 
supported housing assisted under the demonstration program, 
to the maximum extent practicable, the opportunity for place-
ment in permanent housing or an environment appropriate to 
the health and social needs of the individual. 
(5) 
PRESUMPTION FOR INDEPENDENT LIVING.—In providing 
assistance under this section in any case in which the residence 
of an individual is appropriate to the needs of the individual, a 
program assisted under this section shall, when reasonable. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4381 
provide for assistance in a manner appropriate to maintain the 
individual in such residence. 
(6) CASE MANAGEMENT SERVICES.—A program assisted under 
this section shall provide each individual assisted under the 
program with an opportunity, if eligible, to receive case 
management services available from the appropriate social 
service agencies. 
SEC. 859. SHORT-TERM RENTAL ASSISTANCE. 
42 USC 12908. 
(a) USE OF FUNDS.— 
(1) IN GENERAL.—Grants under this section may be used only 
for assistance to provide short-term rental assistance for low-
income individuals with acquired immunodeficiency syndrome 
or related diseases. Such assistance may be project based or 
tenant based and shall be provided to the extent practicable in 
the manner provided for under section 8 of the United States 
Housing Act of 1937. Grantees shall ensure that the housing 
provided is decent, safe, and sanitary. 
(2) SHARED HOUSING ARRANGEMENTS.—Grants under this sec-
tion may be used to assist individuals who elect to reside in 
shared housing arrangements in the manner provided under 
section 8(p) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(p)), except that, notwithstanding such section, assistance 
under this section may be made available to nonelderly individ-
uals. The Secretary shall issue any standards for shared hous-
ing under this paragraph that vary from standards issued under 
section 8(p) of the United States Housing Act of 1937 only to the 
extent necessary to provide for circumstances of shared housing 
arrangements under this paragraph that differ from cir-
cumstances of shared housing arrangements for elderly families 
under section 8(p) of the United States Housing Act of 1937. 
(b) LIMITATIONS.—A recipient under this section shall comply with 
the following requirements: 
(1) SERVICES.—The recipient shall provide for qualified service 
providers in the area to provide appropriate services to the 
individuals assisted under this section. 
(2) INTENSIVE ASSISTANCE.—For any individual who requires 
more care thsin can be provided in housing assisted under this 
section, the recipient shall provide for the locating of a care 
provider who can appropriately care for the individual and 
referral of the individual to the care provider. 
SEC. 860. SINGLE ROOM OCCUPANCY DWELLINGS. 
42 USC 12909. 
(a) USE OF GRANTS.—Grants under this section may be used to 
provide project-based rental assistance or grants to facilitate the 
development of single room occupancy dwellings. To the extent 
practicable, a program under this section shall be carried out in the 
manner provided for under section 8(n) of the United States Housing 
Act of 1937. 
(b) LIMITATION.—Recipients under this section shall require the 
provision to individuals assisted under this section of the following 
assistance: 
(1) SERVICES.—Appropriate services provided by qualified 
service providers in the area. 
(2) INTENSIVE ASSISTANCE.—For any individual who requires 
more care than can be provided in housing assisted under this 
section, locating a care provider who can appropriately care for 
104 STAT. 4382 
PUBLIC LAW 101-625—NOV. 28, 1990 
the individual and referral of the individual to the care 
provider. 
42 use 12910. 
SEC. 861. GRANTS FOR COMMUNITY RESIDENCES AND SERVICES. 
(a) GRANT AUTHORITY.—The Secretary of Housing and Urban 
Development may make grants to States and metropolitan areas to 
develop and operate community residences and provide services for 
persons with acquired immunodeficiency S3nidrome or related 
diseases. 
(b) COMMUNITY RESIDENCES AND SERVICES.— 
(1) COMMUNITY RESIDENCES.— 
(A) IN GENERAL.—A community residence under this sec-
tion shall be a multiunit residence designed for individuals 
with acquired immunodeficiency sjnidrome or related dis-
eases for the following purposes: 
(i) To provide a lower cost residential alternative to 
institutional care and to prevent or delay the need for 
institutional care. 
(ii) To provide a permanent or transitional residen-
tial setting with appropriate services that enhances the 
quality of life for individuals who are unable to live 
independently. 
(iii) To prevent homelessness among individuals with 
acquired immunodeficiency syndrome or related dis-
eases 
by increasing 
available 
suitable 
housing 
resources. 
(iv) 
To 
integrate 
individuals 
with 
acquired 
immunodeficiency syndrome or related diseases into 
local communities and provide services to maintain the 
abilities of such individuals to participate as fully as 
possible in community life. 
(B) RENT.—Except to the extent that the costs of provid-
ing residence are reimbursed or provided by any other 
assistance from Federal or non-Federal public sources, each 
resident in a community residence shall pay as rent for a 
dwelling unit an amount equal to the following: 
(i) For low-income individuals, the amount of rent 
paid under section 3(a) of the United States Housing 
Act of 1937 (42 U.S.C. 1437a(a)) by a low-income family 
(as the term is defined in section 3(bX2) of such Act (42 
U.S.C. 1437a(bX2))) for a dwelling unit assisted under 
such Act. 
(ii) For any resident that is not a low-income resi-
dent, an amount based on a formula, which shall be 
determined by the Secretary, under which rent is deter-
mined by the income and resources of the resident. 
(C) FEES.—Fees may be charged for any services provided 
under subsection (cX2) to residents of a community resi-
dence, except that any fees charged shall be based on the 
income and resources of the resident and the provision of 
services to any resident of a community residence may not 
be withheld because of an inability of the resident to pay 
such fee. 
(D) SECTION 8 ASSISTANCE.—Assistance made available 
under section 8 of the United States Housing Act of 1937 (42 
U.S.C. 1437f) may be used in conjunction with a community 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4383 
residence under this subsection for tenant-based certificates 
or vouchers. 
(2) SERVICES.—Services provided with a grant under this sec-
tion shall consist of services appropriate in assisting individuals 
with acquired immunodeficiency syndrome and related diseases 
\ 
to enhance their quality of life, enable such individuals to more 
fully participate in community life, and delay or prevent the 
placement of such individuals in hospitals or other institutions. 
" 
(c) USE OF GRANTS.—Any amounts received from a grant under 
this section may be used only as follows: 
(1) COMMUNITY RESIDENCES.—For providing assistance in 
connection with community residences under subsection (b)(1) 
for the following activities: 
(A) PHYSICAL IMPROVEMENTS.—Construction, acquisition, 
rehabilitation, conversion, retrofitting, and other physical 
improvements necessary to make a structure suitable for 
use as a community residence. 
(B) OPERATING COSTS.—Operating costs for a community 
residence. 
(C) 
TECHNICAL 
ASSISTANCE.—Technical assistance in 
establishing and operating a community residence, which 
may include planning and other predevelopment 
or 
preconstruction expenses. 
(D) IN-HOUSE SERVICES.—Services appropriate for individ-
uals residing in a community residence, which may include 
staff training and recruitment. 
(2) SERVICES.—For providing services under subsection (b)(2) 
to any individuals assisted under this subtitle. 
(3) ADMINISTRATIVE EXPENSES.—For administrative expenses 
, 
related to the planning and execution of activities under this 
section, except that a jurisdiction that receives a grant under 
this section may expend not more than 10 percent of the 
amount received under the grant for such administrative ex-
penses. Administrative expenses under this paragraph may 
include expenses relating to community outreach and edu-
cational activities regarding acquired immunodeficiency syn-
drome and related diseases, for staff carrying out activities 
assisted with a grant under this section and for individuals who 
reside in proximity of individuals assisted under this subtitle. 
(d) LIMITATIONS ON USE OF GRANTS.— 
(1) COMMUNITY RESIDENCES.—Any jurisdiction that receives a 
grant under this section may not use any amounts received 
under the grant for the purposes under subsection (c)(1), except 
for planning and other expenses preliminary to construction or 
other physical improvement under subsection (c)(1)(A), unless 
the jurisdiction certifies to the Secretary, as the Secretary shall 
require, the following: 
(A) SERVICE AGREEMENT.—That the jurisdiction has en-
tered into a written agreement with service providers quali-
fied to deliver any services included in the proposal under 
subsection (c) to provide such services to individuals as-
sisted by the community residence. 
(B) FUNDING AND CAPABILITY.—That the jurisdiction will 
have sufficient funding for such services and the service 
providers are qualified to assist individuals with acquired 
immunodeficiency syndrome and related diseases. 
104 STAT. 4384 
PUBLIC LAW 101-625—NOV. 28, 1990 
; £,. 
(C) ZONING AND BUILDING CODES.—That any construction 
or physical improvements carried out with amounts re-
ceived from the grant will comply with any applicable State 
and local housing codes and licensing requirements in the 
jurisdiction in which the building or structure is located. 
(D) INTENSIVE ASSISTANCE.—That, for any individual who 
resides in a community residence assisted under the grant 
and who requires more intensive care than can be provided 
by the community residence, the jurisdiction will locate for 
and refer the individual to a service provider who can 
appropriately care for the individual. 
(2) SERVICES.—Any jurisdiction that receives a grant under 
this section may use any amounts received under the grant for 
the purposes under subsection (cX2) only for the provision of 
services by service providers qualified to provide such services 
to individuals with acquired immunodeficiency syndrome and 
related diseases. 
42 use 12911. 
SEC. 862. REPORT. 
Any organization or agency that receives a grant under this 
subtitle shall submit to the Secretary, for any fiscal year in which 
the organization or agency receives a grant under this subtitle, a 
report describing the use of the amounts received, which shall 
include the number of individuals assisted, the types of assistance 
provided, and any other information that the Secretary determines 
to be appropriate. 
42 use 12912. 
SEC. 863. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to carry out this subtitle 
$75,000,000 for fiscal year 1991, and $156,500,000 for fiscal year 1992. 
TITLE IX—COMMUNITY DEVELOPMENT 
AND MISCELLANEOUS PROGRAMS 
Subtitle A—Community and Neighborhood 
Development and Preservation 
SEC. 901. COMMUNITY DEVELOPMENT AUTHORIZATIONS. 
(a) COMMUNITY DEVELOPMENT BLOCK GRANTS.—Section 103 of the 
Housing and Community Development Act of 1974 (42 U.S.C. 5303) 
is amended by striking the second sentence and inserting the follow-
ing: "For purposes of assistance under section 106, there are 
authorized to be appropriated $3,137,000,000 for fiscal year 1991 and 
$3,272,000,000 for fiscal year 1992. Of any amounts appropriated 
under this section, the Secretary shall, to the extent approved in 
appropriation Acts, make available— 
"(1) not less than $3,000,000 in each of fiscal years 1991 and 
1992 in the form of grants to institutions of higher education, 
either directly or through areawide planning organizations or 
States, for the purpose of providing assistance to economically 
disadvantaged and minority students who participate in 
community development work study programs and are enrolled 
in full-time graduate or undergraduate programs in community 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4385 
and economic development, community planning, or community 
management, 
"(2) not less than $6,500,000 for fiscal year 1991 and $6,500,000 
for fiscal year 1992 in the form of grants to historically black 
collesres 
"(3) not less than $7,000,000 for fiscal year 1991 and $7,000,000 Territories. 
for fiscal year 1992 for grants in Guam, the Virgin Islands, 
American Samoa, the Northern Mariana Islands, and the Trust 
Territory of the Pacific Islands, and 
"(4) not less than $500,000 in fiscal year 1991 for grants to 
demonstrate the feasilsility of developing an integrated database 
system and computer mapping tool for the compliance, 
programming, and evaluation of community development block 
grants.". 
(b) LIMITATION ON LOAN GUARANTEES.—The last sentence of sec-
tion 108(a) of the Housing and Community Development Act of 1974 
(42 U.S.C. 5308(a)) is amended to read as follows: "Not>yithstanding 
any other provision of law and subject only to the absence of 
qualified applicants or proposed activities and to the authority 
provided in this section, to the extent approved or provided in 
appropriation Acts, the Secretary shall enter into commitments to 
guarantee notes and obligations under this section with an aggre-
gate principal amount of $300,000,000 during fiscal year 1991 and 
$300,000,000 during fiscal year 1992.". 
(c) PAYMENTS WITH RESPECT TO INDIAN HOUSING.—Section 107(a) 
of the Housing and Urban Development Act of 1974 (42 U.S.C. 
5307(a)) is amended— 
(1) by redesignating paragraphs (3) and (4) as paragraphs (4) 
and (5), respectively; and 
(2) by inserting aiter paragraph (2) the following: 
"(3) to units of general local government that are located in North Dakota. 
North Dakota for public services with respect to Indian 
housing;". 
SEC. 902. TARGETING COMMUNITY DEVELOPMENT BLOCK GRANT ASSIST-
A N C E . 
(a) PRIMARY OBJECTIVE.—The second sentence of section 101(c) of 
the Housing and Community Development Act of 1974 (42 U.S.C. 
5301(c)) is amended by striking "60 percent" and inserting "70 
percent". 
(b) CERTIFICATION REGARDING ACTIVITIES.—Section 104(b)(3) of the 
Housing and Community Development Act of 1974 (42 U.S.C. 
5304(bX3)) is amended by striking "60 percent" and inserting "70 
percent". 
SEC. 903. COMMUNITY DEVELOPMENT CITY AND COUNTY CLASSIFICA-
TIONS. 
(a) METROPOUTAN CITIES.—Section 102(a)(4) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5302(aX4)) is 
amended— 
(1) by striking the second sentence and inserting the follow-
ing: "Any city that was clsissified as a metropolitan city for at 
least 2 years pursuant to the first sentence of this paragraph 
shall remain classified as a metropolitan city."; 
(2) in the fourth sentence, by striking "for fiscsQ year 1988 or 
1989"; and 
(3) in the last sentence, by striking— 
104 STAT. 4386 
PUBLIC LAW 101-625—NOV. 28, 1990 
Government 
contracts. 
42 u s e 5302 
note. 
(A) "the first or second sentence of; and 
(B) "under such first or second sentence". 
(b) URBAN COUNTIES.—Section 102(aX6XB) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5302(aX6XB)) is 
amended to read as follows: 
"(B) Any county that was classified as an urban county for at 
least 2 years pursuant to subparagraph (A), (C), or (D) shall 
remain classified as an urban county, unless it fails to qualify as 
an urban county pursuant to subparagraph (A) by reason of the 
election of any unit of general local government included in 
such county to have its population excluded under clause 
(iiXIXa) of subparagraph (A) or not to renew a cooperation 
agreement under clause (iiXIXb) of such subparagraph,". 
(c) REUNQUISHMENT OF ENTITLEMENT STATUS.— 
(1) RELINQUISHMENT BY METROPOLITAN CITY.—Section 102(aX4) 
of the Housing and Community Development Act of 1974 (42 
U.S.C. 5302(aX4)), as amended by subsection (a), is further 
amended by inserting after the period at the end the following: 
"Any unit of general local government that was classified as a 
metropolitan city in any fiscal year, may, upon submission of 
written notification to the Secretary, relinquish such classifica-
tion for all purposes under this title if it elects to have its 
population included with the population of a county for pur-
poses of qualifying for assistance (for such following fiscal year) 
under section 106 as an urban county under paragraph (6)(D). 
Any metropolitan city that elects to relinquish its classification 
under the preceding sentence and whose port authority shipped 
at least 35,000,000 tons of cargo in 1988, of which iron ore made 
up at least half, shall not receive, in any fiscal year, a total 
amount of assistance under section 106 from the urban county 
recipient that is less than the city would have received if it had 
not 
relinquished the classification 
under the preceding 
sentence.". 
(2) INCLUSION WITH URBAN COUNTY.—Section 102(aX6XD) of 
the Housing and Community Development Act of 1974 (42 
U.S.C. 5302(aX6XD)) is amended— 
(A) in clause (ii), by striking "or" at the end; 
(B) in clause (iii), by striking the period at the end and 
inserting "; or"; and 
(C) by adding at the end the following new clause: 
"(iv) has entered into a local cooperation agreement with 
a metropolitan city that received assistance under section 
106 because of such classification, and has elected under 
paragraph (4) to have its population included with the 
population of the county for purposes of qualifying as an 
urban county; except that to qualify as an urban county 
under this clause (I) the county must have a combined 
population of not less than 195,000, (II) more than 15 per-
cent of the residents of the county shall be 60 years of age 
or older (according to the most recent decennial census 
data), (III) not less than 20 percent of the total personal 
income in the county shall be from pensions, social security, 
disability, and other transfer programs, and (IV) not less 
than 40 percent of the land within the county shall be 
publicly owned and not subject to property tax levies.". 
(3) APPUCABILITY.—The amendments made by this subsection 
shall apply with respect to assistance under title I of the 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4387 
Housing and Community Development Act of 1974 for fiscal 
year 1991 and any fiscal year thereafter. 
SEC. 904. ALLOCATION FORMULA IN CASES OF ANNEXATION. 
(a) IN GENERAL.—Section 102(a)(12) of the Housing and Commu-
nity Development Act of 1974 (42 U.S.C. 5302(a)(12)) is amended by 
inserting after the period at the end the following new sentence: 
"Where the boundaries for a metropolitan city or urban county used 
for the 1980 census have changed as a result of annexation, the 
current population used to compute extent of growth lag shall be 
adjusted by multipljring the current population by the ratio of the 
population based on the 1980 census within the boundaries used for 
the 1980 census to the population based on the 1980 census within 
the current boundaries.". 
OJ) APPUCABIUTY.—The amendment made by subsection (a) shall 
apply to the first allocation of assistance under section 106 that is 
made after the date of the enactment of this Act and to each 
allocation thereafter. 
SEC. 905. HOUSING AFFORDABILITY STRATEGY REQUIREMENT. 
Section 104(c) of the Housing and Community Development Act of 
1974 (42 U.S.C. 5304(c)) is amended to read as follows: 
"(c) A grant may be made under section 106(b) only if the unit of 
general local government certifies that it is following— 
"(1) a current housing affordability strategy which has been 
approved by the Secretary in accordance with section 105 of the 
Cranston-Gonzalez National Affordable Housing Act, or 
"(2) a housing assistance plan which was approved by the 
Secretary during the 180-day period beginning on the date of 
enactment of the Cranston-Gonzalez National Affordable Hous-
ing Act, or during such longer period as may be prescribed by 
the Secretary in any case for good cause.". 
SEC. 906. PROTECTION OF INDIVIDUALS ENGAGING IN NONVIOLENT 
CIVIL RIGHTS DEMONSTRATIONS. 
Section 104 of the Housing and Community Development Act of 
1974 (42 U.S.C. 5304) is amended by adding at the end the following 
new subsection: 
"(1) PROTECTION OF INDIVIDUALS ENGAGING IN NON-VIOLENT CIVIL 
RIGHTS DEMONSTRATIONS.—No funds authorized to be appropriated 
under section 103 of this Act may be obligated or expended to any 
unit of general local government that— 
"(1) fails to adopt and enforce a policy prohibiting the use of 
excessive force by law enforcement agencies within its jurisdic-
tion against any individuals engaged in nonviolent civil rights 
demonstrations; or 
"(2) fails to adopt and enforce a policy of enforcing applicable 
State and local laws against physically barring entrance to or 
exit from a facility or location which is the subject of such non-
violent civil rights demonstration within its jurisdiction.". 
SEC. 907. CDBG ELIGIBLE ACTIVITIES. 
(a) ECONOMIC DEVELOPMENT PROJECTS THROUGH FOR-PROFIT ENTI-
TIES.—Section 105(a)(17) of the Housing and Community Develop-
ment Act of 1974 (42 U.S.C. 5305(aX17)) is amended to read as 
follows: 
42 use 5302 
note. 
104 STAT. 4388 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(17) provision of assistance to private, for-profit entities, 
when the assistance is appropriate to carry out an economic 
development project (that shall minimize, to the extent prac-
ticable, displacement of existing businesses and jobs in 
neighborhoods) that— 
"(A) creates or retains jobs for low- and moderate-income 
persons; 
"(B) prevents or eliminates slums and blight; 
"(C) meets urgent needs; 
"(D) creates or retains businesses owned by community 
residents; 
"(E) assists businesses that provide goods or services 
needed by, and affordable to, low- and moderate-income 
residents; or 
"(F) provides technical assistance to promote any of the 
activities under subparagraphs (A) through (E);". 
(b) DIRECT HOMEOWNERSHIP ASSISTANCE.— 
(1) IN GENERAL.—Section 105(a) of the Housing and Commu-
nity Development Act of 1974 (42 U.S.C. 5305(a)) is amended— 
(A) in paragraph (18), by striking "and" at the end; 
(B) in paragraph (19), by striking the period at the end 
and inserting "; and"; and 
(C) by adding at the end the following new paragraph: 
"(20) provision of direct assistance to facilitate and expand 
homeownership among persons of low and moderate income 
(except that such assistance shall not be considered a public 
service for purposes of paragraph (8)) by using such assistance 
to— 
"(A) subsidize interest rates and mortgage principal 
amounts for low- and moderate-income homebuyers; 
"(B) finance the acquisition by low- and moderate-income 
homebuyers of housing that is occupied by the homebuyers; 
"(C) acquire guarantees for mortgage financing obtained 
by low- and moderate-income homebuyers from private 
lenders (except that amounts received under this title may 
not be used under this subparagraph to directly guarantee 
such mortgage financing and grantees under this title may 
not directly provide such guarantees); 
"(D) provide up to 50 percent of any downpa3ntnent re-
quired from low- or moderate-income homebuyer; or 
"(E) pay reasonable closing costs (normally associated 
with the purchase of a home) incurred by a low- or mod-
erate-income homebuyer.". 
42 use 5305 
(2) TERMINATION.—Effective on October 1, 1992 (or October 1, 
^°*^- 
1993, if the Secretary determines that such later date is nec-
essary to continue to provide homeownership assistance until 
homeownership assistance is available under title II of the 
Cranston-Gonzalez National Affordable Housing Act), section 
105(a) of the Housing and Community Development Act of 1974 
(42 U.S.C. 5305(a)) is amended— 
(A) in paragraph (18), by inserting "and" at the end; 
(B) in paragraph (19), by striking "; and" at the end and 
inserting a period; and 
(C) by str^dng paragraph (20). 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4389 
SEC. 908. PUBLIC SERVICES. 
(a) STATEWIDE CEIUNG.—Section 105(a)(8) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5305(a)(8)) is 
amended by inserting after "unit of general local government" the 
third time it appears "(or in the case of nonentitled communities not 
more than 15 per centum statewide)". 
(b) PROGRAM INCOME.—Section 105(a)(8) of the Housing and 
Community Development Act of 1974 is amended by inserting after 
"under this title" the second place it appears "including program 
income". 
SEC. 909. AUTHORITY TO PROVIDE LUMP-SUM PAYMENTS TO REVOLVING 42 USC 5304 
LOAN FUNDS. 
i^ote. 
(a) IN GENERAL.—Notwithstanding any other provision of law, 
^ 
units of general local government receiving assistance under title I 
of the Housing and (Community Development Act of 1974 may 
receive funds 
in one pa3anent for 
use in establishing 
or 
supplementing revolving loan funds in the manner provided under 
section 104(h) of such Act (42 U.S.C. 5304(h)). 
(b) APPUCABILITY.—This section shall apply to funds approved in 
appropriations Acts for use under title I of the Housing and (Dommu-
nity Development Act of 1974 for fiscal year 1992 and any fiscal year 
thereafter. 
SEC. 910. COMMUNITY DEVELOPMENT LOAN GUARANTEES. 
42 USC 5308 
(a) STATEMENT OF PURPOSE AND OBJECTIVES.— 
(1) PURPOSES.—The purposes of the amendments made by this 
section are— 
(A) to reaffirm the commitment of the Federal Govern-
ment to assist local governments in their efforts in stimu-
lating economic and community development activities 
needed to combat severe economic distress and to help in 
^ 
promoting economic development activities needed to aid in 
economic recovery; and 
(B) to promote revitalization and development projects 
undertaken by local governments that principally benefit 
persons of low and moderate income, the elimination of 
slums and blight, and to meet urgent community needs, 
with special priority for projects located in areas designated 
as enterprise zones by the Federal Government or by any 
State. 
(2) OBJECTIVES.—In order to further the purpose described in 
paragraph (1), activities undertaken pursuant to the amend-
ments made by this section shall be directed toward meeting the 
objectives set forth in sections 101(c) and 104(b)(3) of the Hous-
ing and Community Development Act of 1974 (42 U.S.C. 5301(c) 
and 5304(b)(3)) and the additional objectives of— 
(A) encouraging local governments to establish public-
private partnerships; 
(B) preserving housing affordable for persons of low and 
moderate income; and 
(C) creating permanent employment opportunities, pri-
marily for persons of low and moderate income. 
(b) GUARANTEE OF LOANS ISSUED BY NONENTITLEMENT COMMU-
NITIES AND TERRITORIES.— 
(1) ELIGIBILITY.— 
104 STAT. 4390 
PUBLIC LAW 101-625—NOV. 28, 1990 
(A) IN GENERAL.—Section 108 of the Housing and Commu-
- 
nity Development Act of 1974 (42 U.S.C. 5308) is amended 
by striking "unit of general local government" or "units of 
general local government" each place such terms appear 
and inserting "eligible public entity" or "eligible public 
entities", respectively. 
(B) 
CONFORMING AMENDMENT.—Section 108(h) of 
the 
Housing and Community Development Act of 1974 (42 
U.S.C. 5308(h)) is amended by striking "unit or agency" and 
inserting "entity or agency". 
(2) 
GUARANTEE 
OF 
HOUSING 
CONSTRUCTION 
AND OTHER 
LOANS.—Section 108(a) of the Housing and Community Develop-
ment Act of 1974 (42 U.S.C. 5308(a)) is amended in the first 
sentence— 
(A) by striking "; or" and inserting a semicolon; and 
(B) by inserting before the period at the end the following: 
"; or (4) construction of housing by nonprofit organizations 
for homeownership under section 17(d) of the United States 
Housing Act of 1937 or title VI of the Housing £ind Commu-
nity Development Act of 1987". 
(3) STATE ASSISTANCE IN APPLICATIONS.—Section 108 of 
the 
Housing and Community Development Act of 1974 (42 U.S.C. 
5308) is amended by adding at the end the following new 
^ 
subsection: 
"(n) Any State that has elected under section 106(dX2)(A) to 
distribute funds to units of general local government in nonentitle- , 
ment areas may assist such units in the submission of applications 
for guarantees under this section.". 
(4) STATE GRANTS AS SECURITY.— 
(A) IN GENERAL.—Section 108(d) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5308(d)) is 
amended— 
(i) by inserting "(1)" after "(d)"; 
(ii) by redesignating paragraphs (1), (2), and (3), as 
subparagraphs (A), (B), and (C), respectively; and 
^ 
(iii) by adding at the end the following new 
paragraph: 
"(2) To assist in assuring the repayment of notes or other obliga-
tions and charges incurred under this section, a State shall pledge 
any grant for which the State may become eligible under this title 
as security for notes or other obligations and charges issued under 
this section by any unit of general local government in a nonentitle-
ment area in the State.". 
* • • ' ' • 
(B) REPAYMENTS.—Section 108(e) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5308(e)) is 
amended by striking "subsection (dX2)" and inserting 
"paragraphs (IXB) and (2) of subsection (d)". 
(5) DEFINITION.—Section 1()8 of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5308) (as previously 
amended by this section) is further amended by adding at the 
end the following new subsection: 
X 
"(o) For purposes of this section, the term 'eligible public entity' 
means any unit of general local government, including units of 
general local government in nonentitlement areas.". 
(c) LOAN REPAYMENT PERIOD.—Section 108(a) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5308(a)), as amended 
by the preceding provisions of this Act, is further amended by 
PUBLIC LAW 101-625--NOV. 28, 1990 
104 STAT. 4391 
inserting after the third sentence the following: "The Secretary may 
not deny a guarantee under this section on the basis of the proposed 
repayment period for the note or other obligation, unless the period 
is more than 20 years or the Secretary determines that the period 
causes the guarantee to constitute an unacceptable financial risk.". 
(d) OUTSTANDING LOAN GUARANTEE AMOUNT PER ISSUER.—Section 
108(b) of the Housing and Community Development Act of 1974 (42 
U.S.C. 5308(b)) is amended— 
(1) by inserting after "this section" the following: "(excluding 
any amount defeased under the contract entered into under 
subsection (dXlXA))"; 
(2) by striking "three" and inserting "5"; and 
(3) by inserting "or 107" after "section 106". 
(e) ALLOCATION OF LOAN GUARANTEES AND MONITORING OF 
AMOUNT GUARANTEED FOR EACH COMMUNITY.— 
(1) ALLOCATION OF GUARANTEES.—Section 108(a) of the Hous-
ing and Community Development Act of 1974 (42 U.S.C. 5308), 
as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new sentence: "Of 
the amount approved in any appropriation Act for guarantees 
under this section in any fiscal year, the Secretary shall allocate 
70 percent for guarantees for metropolitan cities, urban coun-
ties, and Indian tribes and 30 percent for guarantees for units of 
general local government in nonentitlement areas. The Sec-
retary may waive the percentage requirements of the preceding 
sentence in any fiscal year only to the extent that there is an 
absence of qualified applicants or proposed activities from 
metropolitan cities, urban counties, and Indian tribes or units of 
general local government in nonentitlement areas.". 
^ 
(2) MONITORING OF GUARANTEES PER COMMUNITY.—Section 
108(k) of the Housing and Community Development Act of 1974 
(42 U.S.C. 5308(k)) is amended— 
(A) by inserting "(1)" after "(k)"; and 
(B) by adding at the end the following new pargigraph: 
"(2) The Secretary shall monitor the use of guarantees under this 
section by eligible public entities. If the Secretary finds that 50 
percent of the aggregate guarantee authority has been committed, 
the Secretary may— 
"(A) impose limitations on the amount of guarantees any one 
/ 
entity may receive in any fiscal year of $35,000,000 for units of 
general local government receiving grants under section 106(b) 
and $7,000,000 for units of general local government receiving 
grants under section 106(d); or 
"(B) request the enactment of legislation increasing the aggre-
gate limitation on guarantees under this section.". 
(f) DEBT PAYMENT ASSISTANCE.—Section 108(h) of the Housing and 
, 
Community Development Act of 1974 (42 U.S.C. 5308(h)) is amended 
by adding at the end the following: "The Secretary may also, to the 
extent approved in appropriation Acts, assist the issuer of a note or 
other obligation guaranteed under this section in the pajnnent of all 
or a portion of the principal and interest amount due under the note 
or other obligation, if the Secretary determines that the issuer is 
unable to pay the amount because of circumstances of extreme 
hardship beyond the control of the issuer.". 
(g) TRAINING AND INFORMATION.—Section 108 of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5308) (as previously 
104 STAT. 4392 
PUBLIC LAW 101-625—NOV. 28, 1990 
amended by this Act) is further amended by adding at the end the 
following new subsection: 
"(pXD The Secretary, in cooperation with eligible public entities, 
shall carry out training and information activities with respect to 
! - 
the guarantee program under this section. Such activities shall 
commence not later than 1 year after the date of the enactment of 
the Housing and Community Development Act of 1990. 
"(2) The Secretary may use amounts set aside under section 107 to 
carry out this subsection.". 
(h) ANNUAL REPORT.—Section 113(a) of the Housing and Commu-
nity Development Act of 1974 (42 U.S.C. 5313(a)) is amended— 
(1) in paragraph (2), by striking "and"; 
(2) in paragraph (3), by striking the period at the end and 
inserting "; and"; and 
(3) by adding at the end the following new paragraph: 
"(4) a description of the activities carried out under section 
108.". 
42 use 5308 
(i) REGULATIONS.—To Carry out the amendments made by this 
note. 
section, the Secretary of Housing and Urban Development shall— 
(1) issue proposed regulations not later than 90 days after the 
date of the enactment of this Act; and 
(2) issue final regulations not later than 180 days after the 
date of the enactment of this Act. 
SEC. 911. HAWAIIAN HOME LANDS. 
Section 109 of the Housing and Community Development Act of 
42 use 5309 
1974 (42 U.S.C. 5309) is amended by adding at the end the following 
^^^- 
new subsection: 
"(d) The provisions of this section and section 104(b)(2) which 
relate to discrimination on the basis of race shall not apply to the 
provision of assistance by grantees under this title to the Hawaiian 
Home Lands.". 
SEC. 912. PROHIBITION OF DISCRIMINATION ON BASIS OF RELIGION 
UNDER CDBG PROGRAM. 
(a) IN GENERAL.—Section 109(a) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5309(a)) is amended by inserting 
"religion," after "national origin,". 
(b) APPLICABILITY.—The amendment made by subsection (a) shall 
apply with respect to conduct relating to discrimination occurring 
after the date of the enactment of this Act. 
SEC. 913. TECHNICAL CORRECTIONS REGARDING CDBG FOR INDIAN 
TRIBES. 
(a) INAPPUCABILITY OF LOW AND MODERATE INCOME REQUIRE-
MENTS.—Section 101(c) of the Housing and Community Development 
Act of 1974 (42 U.S.C. 5301(c)) is amended by inserting "to States and 
units of general local government" after "Federal assistance pro-
vided" the first place it appears. 
(b) ALLOCATION AND DISTRIBUTION OF FUNDS.— 
'' 
^ 
(1) SET-ASIDE FOR INDIAN TRIBES.— 
(A) REPEAL.—Section 106(b) of the Housing and Commu-
nity Development Act of 1974 (42 U.S.C. 5306(b)) is amended 
by striking paragraph (7). 
(B) REPLACEMENT.—Section 106 of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5306) is 
amended by striking "SEC. 106. (a)" and all that follows 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4393 
through the end of subsection (a) and inserting the 
following: 
"SEC. 106. (aXl) For each fiscal year, of the amount approved in an 
appropriation Act under section 108 for grants in any year (exclud-
ing the amounts provided for use in accordance with section 107), 
the Secretary shall reserve for grants to Indian tribes 1 percent of 
the amount appropriated under such section. The Secretary shall 
provide for distribution of amounts under this paragraph to Indian 
tribes on the basis of a competition conducted pursuant to specific 
criteria for the selection of Indian tribes to receive such amounts. 
The criteria shall be contained in a regulation promulgated by the Regulations. 
Secretary after notice and public comment. Notwithstanding any 
other provision of this Act, such grants to Indian tribes shall not be 
subject to the requirements of section 104, except subsections (f), (g), 
and (k) of such section. 
"(2) After reserving such amounts for Indiem tribes, the Secretary 
shall allocate amounts provided for use under section 107. 
"(3) Of the amount remaining after allocations pursuant to para-
graphs (1) and (2), 70 percent shall be allocated by the Secretary to 
metropolitan cities and urban counties. Except as otherwise specifi-
cally authorized, each metropolitan city and urban county shsdl be 
entitled to an annual grant from such allocation in an amount not 
exceeding its basic amount computed pursuant to paragraph (1) or 
(2) of subsection (b).". 
(2) ALLOCATION TO METROPOLITAN CITIES AND URBAN COUN-
TIES.—Paragraphs (1) and (2) of section 1060)) of the Housing 
and Community Development Act of 1974 (42 U.S.C. 5306(b)) are 
amended by striking "After taking into account the set-aside for 
Indian tribes under paragraph (7), the" each place it appears 
and inserting "The" in each place. 
(3) ALLOCATION TO NONENTTTLEMENT AREAS.—Section 106(dXl) 
of the Housing and Community Development Act of 1974 (42 
U.S.C. 5306(dXl)) is amended by striking "section 107 and sec-
tion 119" and inserting in lieu thereof "section 106(a) (1) and 
(2)". 
(c) PROGRAM REQUIREMENTS FOR GRANTS TO INDIAN TRIBES.— 
Section 107(eX2) of the Housing and Community Development Act of 
1974 (42 U.S.C. 5307(eX2)) is amended by inserting ", section 
106(aXl)," after "this section". 
(d) ADMINISTRATION OF GRANTS TO INDIAN TRIBES.—Section 702(c) 
of the Department of Housing and Urban Development Reform Act 
of 1989 (42 U.S.C. 5306 note) is repealed. 
(e) APPUCABILTTY OF HUD REFORM ACT.—Section 702(e) of the 
Department of Housing and Development Reform Act of 1989 (42 
U.S.C. 5306 note) is amended by striking "1991" and inserting 
"1990". 
(f) APPLICABILITY.— 
42 use 5306 
(1) IN GENERAL.—Except as provided in paragraph (2), the note. 
amendments made by this section shall apply to amounts ap-
proved in any appropriation Act under section 103 of the Hous-
ing and Community Development Act of 1974 for fiscal year 
1990 and each fiscal year thereafter. 
(2) GRANTS IN FISCAL YEAR 1990.—The Secretary of Housing 
and Urban Development may make grants to Indian tribes 
pursuant to the amendments made by this section with any 
amounts approved in any appropriation Act under section 103 
for fiscal year 1990 for grants to Indian tribes, and the first 
104 STAT. 4394 
PUBLIC LAW 101-625—NOV. 28, 1990 
sentence of section 106(aXl) of the Housing and Community 
Development Act of 1974 (as amended by this Act) shall not 
apply to such grants. 
SEC. 914. URBAN HOMESTEADING. 
(a) ACQUISITION OF PROPERTIES FROM THE RESOLUTION TRUST COR-
PORATION.—Section 810 of the Housing and Community Develop-
ment Act of 1974 (12 U.S.C. 1706e) is amended— 
(1) by redesignating subsections (1), (m), and (n) as subsections 
(m), (n), and (o), respectively; and 
(2) by inserting after subsection (k) the following new 
subsection: 
"(1)(1) The Secretary may acquire from the Resolution Trust Cor-
poration eligible single family properties (as such term is defined in 
section 21A(cX9)(F) of the Federal Home Loan Bank Act), in bulk (as 
agreed to by the Secretary and the Resolution Trust Corporation), 
for transfer to units of general local government or a State, or 
qualified community organizations or public agencies designated by 
a unit of general local government or a State, for use in connection 
with urban homesteading programs approved by the Secretary 
under this section and other disposition as provided under this 
subsection. Such properties shall be suitable for use in connection 
with approved urban homesteading programs, as determined by the 
Secretary. 
"(2) The acquisition price paid by the Secretary to the Resolution 
Trust Corporation for properties under paragraph (1) shall be in an 
amount to be agreed upon by the Secretary and the Resolution Trust 
Corporation for each property and shall include discounts for bulk 
purchase and for the estimated costs and other expenses of the 
Secretary related to holding a property until its transfer for use in 
connection with an urban homesteading program or other disposi-
tion under this subsection. Notwithstanding the preceding sentence, 
the price paid by the Secretary for acquisition of a property under 
this subsection may not exceed 50 percent of the fair market value 
of the property, as valued individually. 
"(3) If a unit of general local government. State, community 
organization, or public agency cannot make timely use under an 
urban homesteading program of a property acquired by the Sec-
retary under this subsection, or if the property is found to be 
unsuitable for such use after acquisition, the Secretary may deal 
with, complete, rent, secure, repair, renovate, modernize, insure, or 
sell for cash or credit (at a price determined by the Secretary), in the 
discretion of the Secretary, any property purchased under this 
subsection. The Secretary may use the proceeds from any sales to 
offset any costs or other expenses related to holding properties 
acquired under this subsection. 
(4) After determining suitability of property under paragraph (1), 
the Secretary may acquire property from the Resolution Trust 
Corporation for more than the msiximum amount that the Sec-
retary, by regulation, has established for reimbursement for prop-
erties transferred for urban homesteading uses under this section. 
The local government. State, organization, or agency administering 
the urban homesteading program under which an individual or 
family receives such a property shall pay to the Secretary (in a 
manner as the Secretary shall provide) the amount by which the 
acquisition price paid by the Secretary to the Resolution Trust 
Corporation is greater than such maximum amount. The local 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4395 
government, State, or organization or agency may recover some or 
all of the amount paid to the Secretary by the administering agency, 
as the Secretary shall provide. Any property acquired pursuant to 
this subsection may be transferred, under an urban homesteading 
program under this section, only to individuals and families who are 
lower income families (as such term is defined in subsection (hX3)). 
"(5) For purposes of this subsection, a bulk acquisition of prop-
erties shall involve not less than 100 properties. 
"(6) In using properties acquired under this subsection, each 
urban homesteading program shall provide for preference in convey-
ing such properties under the program to residents of public housing 
(as such term is d e ^ e d in section 3(b) of the United States Housing 
Act of 1937) who meet all eligibility criteria under this section. . 
(b) NEIGHBORHOOD IMPROVEMENT STRATEGY.—Section 810(bX6) of 
the Housing and Community Development Act of 1974 (12 U.S.C. 
1706e(bX6)) is amended by striking the period at the end and insert-
ing the following: ", except that this paragraph shall not apply with 
respect to any group of 10 or less properties obtained for use under 
an urban homesteading program if the properties (A) are located in 
any single census tract, and (B) were acquired by the Secretary from 
the Resolution Trust Corporation pursuant to subsection (1).". 
(c) RTC DISPOSITION PROCEDURES.—Section 21A(cX6) of the Federal 
Home Loan Bank Act (12 U.S.C. 1441a(cX6)), as amended by section 
804 of this Act, is further amended by adding at the end the 
following new subparagraph: 
"CE) URBAN HOMESTEADING ACQUISITION.— 
"(i) In providing for bulk acquisition of eligible single 
family properties by the Secretary under section 810(1) of 
the Housing and Community Development Act of 1974 and 
by participating jurisdictions for inclusion in affordable 
housing activities assisted under title II of the Cranston-
Gonzalez National Affordable Housing Act, the Corporation 
shall agree to an amount to be paid for acquisition of such 
properties. The acquisition price shall include discounts for 
bulk purchase and for holding of the property such that the 
acquisition price for each property shall not exceed 50 
percent of the fair market value of the property, as valued 
individually. 
"(ii) To the extent necessary to facilitate sale of prop-
erties to the Secretary and participating jurisdictions, the 
requirements of paragraphs (2), (5), and (6XA) of this subsec-
tion shall not apply to such transactions and property 
involved in such transactions. 
"(iii) To facilitate acquisitions by the Secretary and 
participating jurisdictions, the Corporation shall provide 
the Secretary and participating jurisdictions with an inven-
tory of eligible single family properties, not less than 4 
times each year.". 
SEC. 915. NEIGHBORHOOD DEVELOPMENT DEMONSTRATION. 
Section 123(g) of the Housing and Urban-Rural Recovery Act of 
1983 (42 U.S.C. 5318 note) is amended to read as follows: 
"(g) To the extent provided in appropriations Acts, of the amounts 
made available for assistance under section 103 of the Housing and 
Community Development Act of 1974, $2,000,000 for fiscal year 1991 
and $2,000,000 for fiscal year 1992 shall be available to carry out this 
section.". 
104 STAT. 4396 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 u s e 5306 
SEC. 916. CDBG ASSISTANCE FOR UNITED STATES-MEXICO BORDER 
"°*® 
REGION. 
State listing. 
(a) SET-ASIDE FOR CoLONiAS.—The States of Arizona, California, 
New Mexico, and Texas shall each make available, for activities 
designed to meet the needs of the residents of colonias in the State 
relating to water, sewage, and housing, the following percentage of 
the amount allocated for the State under section 106(d) of the 
Housing and Community Development Act of 1974 (42 U.S.C. 
5306(d)): 
(1) FIRST FISCAL YEAR.—For the first fiscal year to which this 
section applies, 10 percent. 
(2) SUCCEEDING FISCAL YEARS.—For each of the succeeding 
fiscal years to which this section applies, a percentage (not to 
exceed 10 percent) that is determined by the Secretary of Hous-
ing and Urban Development to be appropriate after consulta-
tion with representatives of the interests of the residents of 
colonias. 
(b) EuGiBLE ACTIVITIES.—Assistance distributed pursuant to this 
section may be used only to carry out the following activities: 
(1) PLANNING.—Pajmient of the cost of planning community 
development (including water and sewEige facilities) and hous-
ing activities, including the cost of^ 
(A) the provision of information and technical assistance 
to residents of the area in which the activities are to be 
concentrated and to appropriate nonprofit organizations 
and public agencies acting on behalf of the residents; and 
(B) preliminary surveys and analyses of market needs, 
preliminary site engineering and architectural services, site 
options, applications, mortgage commitments, legal serv-
ices, and obtaining construction loans. 
(2) ASSESSMENTS FOR PUBLIC IMPROVEMENTS.—The payment of 
assessments (including any charge made as a condition of 
obtaining access) levied against properties owned and occupied 
by persons of low and moderate income to recover the capital 
cost for a public improvement. 
(c) DISTRIBUTION OF ASSISTANCE.—Assistance shall be made avail-
able pursuant to this section in accordance with a distribution plan 
that gives priority to colonias having the greatest need for such 
assistance. 
(d) APPLICABLE LAW.—Except to the extent inconsistent with this 
section, assistance provided pursuant to this section shall be subject 
to the provisions of title I of the Housing and Community Develop-
ment Act of 1974 (42 U.S.C. 5301 et seq.). 
(e) DEFINITIONS.—For purposes of this section: 
(1) CoLONiA.—The term "colonia" means any identifiable 
community that— 
(A) is in the State of Arizona, California, New Mexico, or 
Texas; 
(B) is in the United States-Mexico border region; 
(C) is designated by the State or county in which it is 
located as a colonia; 
(D) is determined to be a colonia on the basis of objective 
criteria, including lack of potable water supply, lack of 
adequate sewage systems, £ind lack of decent, safe, and 
sanitary housing; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4397 
(E) was in existence and generally recognized as a colonia 
before the date of the enactment of this Act. 
(2) NONPROFIT ORGANIZATION.—The term "nonprofit organiza-
tion" means an organization described in section 501(c) of the 
Internal Revenue Code of 1986 and exempt from taxation under 
section 501(a) of such Code. 
(3) PERSONS OF LOW AND MODERATE INCOME.—The term "per-
sons of low and moderate income" has the meaning given the 
term in section 102(a) of the Housing and Community Develop-
ment Act of 1974 (42 U.S.C. 5302(a)). 
(4) UNITED STATES-MEXICO BORDER REGION.—The term "United 
States-Mexico border region" means the area of the United 
States within 150 miles of the border between the United States 
and Mexico, except that the term does not include any standard 
metropolitan statistical area that has a population exceeding 
1,000,000. 
(f) APPUCABILTTY.—This Act shall apply only with respect to fiscal 
years 1991,1992, and 1993. 
SEC. 917. NEIGHBORHOOD REINVESTMENT CORPORATION. 
42 USC 8107 
(a) FINDINGS.—The Congress finds that— 
(1) protecting the existing stock of unsubsidized privately held 
lower income housing through the rehabilitation and revitaliza-
tion of declining neighborhoods is essential to a national hous-
ing policy that seeks to increase the availability of affordable 
housing for low- and moderate-income families; 
(2) the Neighborhood Reinvestment Corporation, the anchor 
of the national neighborhood housing services network, was 
chartered by Congress more than 10 years ago to revitalize 
neighborhoods for the benefit of current residents by mobilizing 
public, private, and community resources at the neighborhood 
level; 
(3) the national neighborhood housing services network has 
proven its worth as a successful cost-effective program relying 
largely on local initiative for the specific design of local pro-
grams; 
(4) the national neighborhood housing services network has 
had more than 10 years of experience in revitalizing declining 
neighborhoods, creating housing for low- and moderate-income 
families, and equipping residents with skills and resources re-
quired to maintain safe and healthy communities; and 
(5) expanding upon the existing capabilities, resources, and 
potential of the national neighborhood housing services network 
is a cost-effective response to the Eiffordable housing and 
neighborhood revitalization needs confronting the Nation, and 
is a strong preventive measure in addressing the national trag-
edy of homelessness. 
(b) PURPOSE.—It is the purpose of this section to authorize appro-
priations for the Neighborhood Reinvestment Corporation for fiscal 
years 1991 and 1992 to permit the corporation— 
(1) to carefully expand the capacities of the national neighbor-
hood housing services network; 
(2) to begin to meet the urgent need for neighborhood housing 
services and mutual housing associations in neighborhoods 
across the Nation as the effort to preserve affordable housing 
for low- and moderate-income American families increases; 
104 STAT. 4398 
PUBLIC LAW 101-625—NOV. 28, 1990 
Grant programs. 
Grant programs. 
(3) to increase and provide ongoing technical and capacity 
development assistance to neighborhood housing services and 
related public-private partnership-based nonprofit institutions 
involved in the revitalization of neighborhoods for the benefit of 
current residents, rehabilitation, preservation of existing hous-
ing stock, and production of additional housing opportunities for 
low- and moderate-income families; 
(4) to expand the loan purchase capacity of the national 
neighborhood housing services secondary market, operated by 
Neighborhood Housing Services of America, for loans made by 
neighborhood housing services to residents who are unable to 
meet conventional lending standards, and other loans for 
community development purposes; 
(5) to provide increased capacity development and matching 
grants to preserve existing privately held unsubsidized rental 
housing affordable to low- and moderate-income households and 
to create flexible strategies effective in the diverse economic 
and geographic environments of the Nation; 
(6) to make grants to provide incentives to extend low-income 
housing use in connection with properties subject to prepay-
ment pursuant to the Low-Income Housing Preservation and 
Resident Ownership Act of 1990; 
(7) to increase the resources available to neighborhood hous-
ing services network programs for the purchase of multifamily 
and single-family properties owned by the Secretary of Housing 
and Urban Development for rehabilitation (if necessary) and 
sale to low- and moderate-income families; 
(8) to expand the national mutual housing association dem-
onstration by providing technical assistance and matching 
grants to assist low- and moderate-income families to partici-
pate in such associations; 
(9) to increase resources available to neighborhood housing 
services network programs for foreclosure intervention and 
prevention; and 
(10) to create additional neighborhood housing services part-
nership organizations to serve rural communities, Native 
Americans, Native Hawaiians, and other communities in need. 
(c) AUTHORIZATION OF APPROPRIATIONS.—Section 608(a) of the 
Neighborhood Reinvestment Corporation Act (42 U.S.C. 8107(a)) is 
amended to read as follows: 
"(a)(1) There are authorized to be appropriated to the corporation 
to carry out this title $35,000,000 for fiscal year 1991 and $36,500,000 
for fiscal year 1992. Not more than 15 percent of any amount 
appropriated under this paragraph for any fiscal year may be used 
for administrative expenses. 
"(2) Of the amount appropriated pursuant to this subsection for 
each of the fiscal years 1991 and 1992, amounts appropriated in 
excess of the amount necessary to continue existing services of the 
Neighborhood Reinvestment Corporation in revitalizing declining 
neighborhoods shall be available— 
"(A) to expand the national neighborhood housing services 
network and to assist network capacity development, including 
expansion of rental housing resources; 
"(B) to expand the loan purchase capacity of the national 
neighborhood housing services secondary market operated by 
Neighborhood Housing Services of America; 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4399 
"(C) to make grants to provide incentives to extend low- Grant programs, 
income housing use in connection with properties subject to 
prepajonent pursuant to the Low-Income Housing Preservation 
and Resident Ownership Act of 1990; 
"(D) to increase the resources available to the national 
neighborhood housing services network programs for the pur-
chase of multifamily and single-family properties owned by the 
Secretary of Housing and Urban Development for rehabilitation 
(if necessary) and sale to low- £ind moderate-income families; 
and 
"(E) to provide matching capital grants, operating subsidies, 
and technical services to mutual housing associations for the 
development, acquisition, and rehabilitation of multifamily and 
single-family properties (including properties owned by the Sec-
retary of Housing and Urban Development) to ensure afford-
ability by low- and moderate-income families.". 
SEC. 918. USE OF URBAN RENEWAL LAND DISPOSITION PROCEEDS AND 
CERTAIN OTHER COMMUNITY DEVELOPMENT AND PUBLIC 
FACILITY FUNDS. 
(a) LUZERNE COUNTY, PENNSYLVANIA.—Notwithstanding any other 
provision of law or other requirement, the city of Nanticoke, the 
Borough of Pl5anouth, and the Borough of Forty Fort, all in the 
county of Luzerne and in the State of Pennsylvania, are authorized 
to retain any categorical settlement grant funds or urban renewal 
grant funds that remain after the financial closeout of the Lower 
Broadway Disaster Urban Renewal Project (No. B-79-UR-42-0001) 
in the city of Nanticoke, the Pl5anouth Disaster Urban Renewal 
Project (No. PA-R-617 and No. B-79-UR-42-0007) in the borough of 
Pljnnouth, and the Forty Fort Disaster Urban Renewal Project (No. 
PA-R-613 and No. B-79-UR-42-0003) in the borough of Forty Fort, 
respectively, and to use such funds in accordance with the require-
ments of the community development block grant program specified 
in title I of the Housing and Community Development Act of 1974. 
The city of Nanticoke, the borough of Plymouth, and the borough of 
Forty Fort shall retain such funds in a lump sum and shall be 
entitled to retain and use, in accordance with this subsection, all 
past and future earnings from such funds, including any interest. 
(b) VALLEJO, CAUFORNIA.—Notwithstanding any other provision 
of law or other requirement, the city of Vallejo, California, is 
authorized to retain any land disposition proceeds or urban renewal 
grant funds that remain after the financial closeout of the Marina 
Vista Urban Renewal Project, and to use such funds in accordance 
with the requirements of the community development block grant 
program specified in title I of the Housing and Community Develop-
ment Act of 1974. The city of Vallejo shall retain such funds in a 
lump sum and shall be entitled to retain and use, in accordance with 
this subsection, all past and future earnings from such funds, includ-
ing any interest. 
(c) NEW HAVEN, CONNECTICUT.—Notwithstanding any other provi-
sion of law or other requirement, the city of New Haven, Connecti-
cut, is authorized to retain any land disposition proceeds or urban 
renewal grant funds that remain after the financial closeout of the 
Church Street Urban Renewal Project (No. Conn. R-2), and to use 
such funds in accordance with the requirements of the community 
development block grant program specified in title I of the Housing 
and Community Development Act of 1974. The city of New Haven 
104 STAT. 4400 
PUBLIC LAW 101-625—NOV. 28, 1990 
shall retain such funds in a lump sum and shall be entitled to retain 
and use, in accordance with this subsection, all past and future 
earnings from such funds, including any interest. 
(d) LEBANON, PENNSYLVANNIA.—Notwithstanding any other provi-
sion of law or other 
requirement, 
the city of 
Lebanon, 
Pennsylvannia, is authorized to retain any land disposition proceeds 
or urban renewal grant funds that remain after the financial close-
out of the Southside Urban Renewal Project (No. R-635(C)), and to 
use such funds in accordance with the requirements of the commu-
nity development block grant program specified in title I of the 
Housing and Community Development Act of 1974. The city of 
Lebanon shall retain such funds in a lump sum and shall be entitled 
to retain and use, in accordance with this subsection, all past and 
future earnings from such funds, including any interest. 
(e) EAST STROUDSBURG, PENNSYLVANNIA.—Notwithstanding any 
other provision of law or other requirement, the Borough of East 
Stroudsburg, Pennsylvania, is authorized to retain any land disposi-
tion proceeds from the financial closeout of the Courtland Plaza 
Urban Renewal Project (No. PA-R-352) not paid to the Department 
of Housing and Urban Development, and to use such proceeds in 
accordance with the requirements of the community development 
block grant program specified in title I of the Housing and Commu-
nity Development Act of 1974. The Borough of East Stroudsburg 
shall retain such proceeds in a lump sum and shall be entitled to 
retain and use, in accordance with this subsection, all psist and 
future earnings from such proceeds, including any interest. 
(f) FAIRMOUNT HEIGHTS, MARYLAND.—Notwithstanding any other 
provision of law or other requirement, the Secretary of Housing and 
Urban Development shall cancel the indebtedness of the Town of 
Fairmount Heights, Maryland, relating to the public facilities loan 
(project number MD-18-PFL003) issued July 1, 1969, under title II 
of the Housing Amendments of 1965. The Town of Fairmount 
Heights is relieved of all liability to the Federal Government for the 
outstanding principal balance on such loan, for the amount of 
accrued interest on such loan, and for any other fees and charges 
payable in connection with such loan. 
(g) NEWBURYPORT, LAWRENCE, AND MALDEN, MASSACHUSETTS.— 
Notwithstanding any other provision of law or other requirement, 
the cities of Newburyport, Lawrence, and Maiden, all in Massachu-
setts, are authorized to retain any categorical settlement grant 
funds or urban renewal grant funds that remain after the financial 
closeout of the Central Business Urban Renewal Project (No. MASS-
R-80) in the city of Newburyport, the Theatre Row Redevelopment 
Project (No. MASS-R-61) in the city of Lawrence, and the Civic 
Center Urban Renewal Project (No. MASS-R-118) in the city of 
Maiden, respectively, and to use such funds in accordance with the 
requirements of the community development block grant program 
specified in title I of the Housing and Community Development Act 
of 1974. The cities of Newburyport, Lawrence, and Maiden shall 
retain such funds in a lump sum and shall be entitled to retain and 
use, in accordance with this subsection, all past and future earnings 
from such funds, including any interest. 
(h) BUDGET COMPLIANCE.—This section shall be effective only to 
the extent provided in appropriations Acts. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4401 
SEC. 919. STUDY REGARDING AVAILABILITY OF HOUSING PROXIMATE TO 42 USC 5313 
PLACES OF EMPLOYMENT. 
note. 
(a) IN GENERAL.—The Secretary of Housing and Urban Develop-
ment shall conduct a study regarding the availability of housing 
within reasonable proximity of places of employment. The study 
shall— 
(1) identify causes of, and factors relating to, the geographic 
divergence of available housing for low- and moderate-income 
families from places of emplo3nnent for working members of 
such families; and 
(2) propose methods for preventing such divergence and for 
providing housing within reasonable proximity of places of 
emplojonent, without promoting establishment of cottage indus-
tries or housing developments for employees owned or con-
trolled by the employer. 
OJ) STUDY REQUIREMENTS.—In canying out the study under this 
section the Secretary of Housing and Urban Development shall— 
(1) use, to the extent available and practicable, existing re-
gional plans and strategies developed or implemented by public, 
private, and nonprofit environmental organizations and regu-
latory entities; 
(2) select and analyze one particular region of the Nation or 
one State in which emplojnnent opportunities are available, 
relative to the remainder of the Nation, but for which lack of 
available housing is an acute problem; and 
(3) give priority to analysis of regions and metropolitan areas 
not complying with Federal laws and regulations relating to 
clean air standards. 
(c) REPORT.—Not later than the expiration of the 1-year period 
beginning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall submit to the Committee on 
Banking, Finance and Urban Affairs of the House of Representa-
tives and the Committee on Banking, Housing, and Urban Affairs of 
the Senate a report containing the results and conclusions of the 
study conducted under this section. The report shall also contain 
proposed strategies for adoption by local, regional, and State govern-
mental agencies, in consultation with nonprofit organizations, to 
increase the availability of housing for low- and moderate-income 
families within reasonable proximity of places of employment for 
working members of such families and prevent the geographical 
divergence of such housing £uid places of employment. 
SEC. 920. ALLOCATION OF FUNDS UNDER TITLE I OF THE HOUSING AND 
COMMUNITY DEVELOPMENT ACT OF 1974. 
The Secretary of Housing and Urban Development shall, not later Reports, 
than July 1, 1991, report to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Banking, 
Finance and UrbEin Affairs of the House of Representatives with 
respect to the adequacy, effectiveness, and equity of the formula 
used for allocations of funds under title I of the Housing and 
Community Development Act of 1974, with specific analysis and 
recommendations concerning the structure of the formulas, the 
eligibility criteria, the formula factors, and the weights that are 
assigned to the formula factors. The study should specifically exam-
ine the appropriateness of using the age of housing as a factor and 
also consider quality of housing as an additional factor and the 
desirability of including at an equal or greater weight the age of 
104 STAT. 4402 
PUBLIC LAW 101-625—NOV. 28, 1990 
Regulations. 
Regulations. 
housing and the quality of housing. Based on the Secretary's analy-
sis, the Secretary shall submit a new formula for the allocation of 
funds if the Secretary determines that the study indicates that a 
new formula is required to meet the purposes of title I of the 
Housing and Community Development Act of 1974. The Committee 
on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Banking, Finance and Urban Affairs of the House of 
Representatives shall hold hearings on the Secretary's recommenda-
tions not later than 60 days after receipt of the report. The study 
shall be completed using the data derived from the 1990 census. 
SEC. 
9
2
1
. 
STUDY 
ON 
TURNING 
DRUG 
ZONES 
INTO 
OPPORTUNITY 
ZONES. 
Within 90 days from the date of enactment of this Act, the 
Secretary of Housing and Urban Development shall conduct a study 
and report to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and 
Urban Affairs of the House of Representatives, on ways in which 
areas ravaged by drug trade, drug related crime and drug abuse may 
be made more attractive as investment locations for companies, 
including the provision of special incentives to encourage companies 
to invest in these areas, in order to provide economic opportunity 
within communities to the residents of these communities. 
SEC. 922. COMMUNITY DEVELOPMENT PLANS. 
Section 104 of the Housing and Community Development Act of 
1974 (42 U.S.C. 5304) is amended by adding at the end the following 
new subsection: 
"(1) COMMUNITY DEVELOPMENT PLANS.— 
"(1) IN GENERAL.—Prior to the receipt in any fiscal year of a 
grant from the Secretary under subsection O3), (dXl), or (d)(2)(B) 
of section 106, each recipient shall have prepared and submitted 
in accordance with this subsection and in such standardized 
form £is the Secretary shall, by regulation, prescribe a descrip-
tion of its nonhousing community development needs and 
strategies for meeting those needs. 
"(2) LOCAL GOVERNMENTS.—In the case of a recipient that is a 
unit of general local government— 
"(A) prior to the submission required by paragraph (1), 
the recipient shall consult with adjacent units of general 
local government and hold one or more public hearings to 
obtain the views of citizens on community development 
needs; and 
"(B) the description required under paragraph (1) shall be 
submitted to the Secretary, the State, and any other unit of 
general local government within which the recipient is 
located, in such standardized form as the Secretary shall, 
by regulation, prescribe. 
"(3) STATES.—In the case of a recipient that is a State, the 
description required in paragraph (1)-— 
"(A) shall include only the needs and strategies to meet 
those needs within the State that affect more than one unit 
of general local government; 
"(B) shall include the needs and strategies to meet those 
needs of units of local government within the State which 
are eligible for a distribution under subsection (d)(2)(A) of 
section 106; and 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4403 
"(C) shall be submitted to the Secretary in such standard 
form as the Secretary, by regulation, shall prescribe. 
"(4) EFFECT OF SUBMISSION.—A submission under this subsec- Regulations. 
tion shall not be binding with respect to the use or distribution 
of amounts received under section 106.". 
Subtitle B—Disaster Relief 
SEC. 931. SECTION 8 CERTIFICATES AND VOUCHERS. 
The budget authority available under section 5(c) of the United 
States Housing Act of 1937 (42 U.S.C. 1437c(c)) for assistance under 
the certificate and voucher programs under sections 8 (b) and (o) of 
such Act is authorized to be increeised in any fiscal year in which a 
major disaster is declared by the President under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act in such 
amounts as may be necessary to provide assistance under such 
programs for individuals and families whose housing has been 
damaged or destroyed as a result of such disaster, except that in 
implementing this section, the Secretary shall evaluate the natural 
hazards to which any permanent replacement housing is exposed 
and shall take appropriate action to mitigate such hazards. 
SEC. 932. MODERATE REHABILITATION. 
The budget authority available under section 5(c) of the United 
States Housing Act of 1937 (42 U.S.C. 1437c(c)) for assistance under 
the moderate rehabilitation program under section 8(e)(2) of such 
Act is authorized to be increased in any fiscal year in which a major 
disaster is declared by the President under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act in such amount as 
may be necessary to provide assistance under such program for 
individuals and families whose housing has been damaged or de-
stroyed as a result of such disaster, except that in implementing this 
section, the Secretary shall evaluate the natural hazards to which 
any permanent replacement housing is exposed and shall take 
appropriate action to mitigate such hazards. 
SEC. 933. COMMUNITY DEVELOPMENT. 
Section 106(c) of the Housing and (Community Development Act of 
1974 (42 U.S.C. 5306) is amended— 
(1) in paragraph (1), bv striking "paragraph (2)," and inserting 
"paragraphs (2) and (4),'; and 
(2) by adding at the end the following new paragraph: 
"(4XA) Notwithstanding paragraph (1), in the event of a major 
disaster declared by the President under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act, the Secretary shall 
make available, to metropolitan cities and urban counties located or 
partially located in the areas affected by the disaster, any amounts 
that become available as a result of actions under section 104(e) or 
111. 
"(B) In using £iny amounts that become available as a result of 
actions under section 104(e) or 111, the Secretary shall give priority 
to providing emergency assistance under this paragraph. 
"(C) The Secretary may provide assistance to any metropolitan 
city or urban county under this paragraph only to the extent 
necessary to meet emergency community development needs, as the 
Secretary shall determine (subject to subparagraph (D)), of the city 
42 use 1437c 
note. 
42 use 1487c 
note. 
39-194 O - 91 - 35 : QL 3 Part 5 
104 STAT. 4404 
PUBLIC LAW 101-625—NOV. 28, 1990 
or county resulting from the disaster that are not met with amounts 
otherwise provided under this title, the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act, and other sources of 
assistance. 
"(D) Amounts provided to metropolitan cities and urban counties 
under this paragraph may be used only for eligible activities under 
section 105, and in implementing this section, the Secretary shall 
evaluate the natural hazards to which any permanent replacement 
housing is exposed and shall take appropriate action to mitigate 
such hazards. 
"(E) The Secretary shall provide for applications (or amended 
applications and statements under section 104) for assistance under 
this paragraph. 
"(F) A metropolitan city or urban county eligible for assistance 
under this paragraph may receive such assistance only in each of 
the fiscal years ending during the 3-year period beginning on the 
date of the declaration of the disaster by the President. 
"(G) This paragraph may not be construed to require the Sec-
retary to reserve any amounts that become available as a result of 
actions under section 104(e) or 111 for assistance under this para-
graph if, when such amounts are to be reallocated under paragraph 
(1), no metropolitan city or urban county qualifies for assistance 
under this paragraph.". 
SEC. 934. RURAL HOUSING. 
Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.) is 
amended by adding at the end the following new section: 
"DISASTER ASSISTANCE 
42 use I490g. 
"SEC. 541. (a) AUTHORITY.— 
"(1) IN GENERAL.—Notwithstanding any other provision of 
this title, in the event of a natural disaster, so declared by the 
President under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, the Secretary shall allocate, for 
assistance under this section to the States affected for use in the 
counties designated as disaster areas and the counties contig-
uous to such counties, amounts available under this title. 
Allocations under this section may be made for each of the 
fiscal years ending during the 3-year period beginning on the 
declaration of the disaster by the President. 
"(2) AMOUNT.—Subject to the availability of amounts pursu-
ant to appropriations Acts, assistance under paragraph (1) shall 
be made in an amount equal to the product of— 
"(A) the sum of the official State estimate of the number 
of dwelling units in the counties described in paragraph (1) 
within the eligible service area of the Farmers Home 
Administration (or otherwise if the Secretary provides for a 
waiver under subsection (d)) that are destroyed or seriously 
damaged; and 
"(B) 20 percent of the average cost of all dwelling units 
assisted by the Secretary in the State during the previous 3 
years. 
Regulations. 
"(b) UsE.—The assistance made available under this section may 
be used for the housing purposes authorized under this title, and the 
Secretary shall issue such regulations £is may be necessary to carry 
out this section to assure the prompt and expeditious use of such 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4405 
funds for the restoration of decent, safe, and sanitary housing within 
the areas described in subsection (aXl). In implementing this sec-
tion, the Secretary shall evaluate the natural hazards to which any 
permanent replacement housing is exposed and shall take appro-
priate action to mitigate such hazards. 
"(c) ELIGIBILITY.—Notwithstanding any other provision of this 
title, assistance allocated under this section shall be available to 
units of general local government and their agencies and to local 
nonprofit organizations, agencies, and corporations for the construc-
tion or rehabilitation of housing for agricultural employees and 
their families. 
"(d) WAIVER OF RURAL AREA REQUIREMENTS.—The Secretary may 
waive the application of the provisions of section 520 with respect to 
assistance under this section, as the Secretary considers appro-
priate. 
"(e) RURAL HOUSING INSURANCE FUND.—The Secretary is au-
thorized to advance from the Rural Housing Insurance Fund such 
sums as may be necessary to meet the requirements of subsection 
(aXl), subject to limits previously approved in appropriations Acts.". 
Subtitle C—Regulatory Programs 
SEC. 941. MORTGAGE SERVICING TRANSFER DISCLOSURE. 
The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 
et seq.) is amended by inserting after section 5 the following new 
section: 
"SERVICING OF MORTGAGE LOANS AND ADMINISTRATION OF ESCROW 
ACCOUNTS 
"SEC. 6. (a) DISCLOSURE TO APPUCANT RELATING TO ASSIGNMENT, 12 use 2605. 
SALE, OR TRANSFER OF LOAN SERVICING.— 
"(1) IN GENERAL.—Each person who makes a federally related 
mortgage loan shall disclose to each person who applies for any 
such loan, at the time of application for the loan— 
"(A) whether the servicing of any such loan may be 
assigned, sold, or transferred to any other person at any 
time while such loan is outstanding; 
"(B) for each of the most recent 3 calendar years com-
pleted (at the time of such application), the percentage 
(rounded to the nearest quartile) of loans made by such 
person for which the servicing has been assigned, sold, or 
transferred as of the end of the most recent calendar year 
completed, except that— 
"(i) for any loan application during the 12-month 
period beginning on the date of the enactment of the 
Cranston-Gonzalez National Affordable Housing Act, 
the information disclosed under this subparagraph may 
be for only the most recent calendar year completed, 
and for any loan application during the 12-month 
period beginning 1 year after the date of the enactment 
of the Cranston-Gonzalez National Affordable Housing 
Act, the information disclosed under this subparagraph 
may be for the most recent 2 calendar years completed; 
and 
104 STAT. 4406 
PUBLIC LAW 101-625—NOV. 28, 1990 
"(ii) this subparagraph may not be construed to re-
quire the inclusion, in the percentage disclosed, of any 
loans the servicing of which has been assigned, sold, or 
transferred by the person making the loan to a trans-
feree servicer that is an affiliate or subsidiary of such 
person; and 
"(C) if the person who makes the loan does not engage in 
the servicing of any federally related mortgage loans, that 
there is a present intent on the part of such person (at the 
time of such application) to assign, sell, or transfer the 
servicing of such loan to another person. 
"(2) MODEL DISCLOSURE STATEMENTS.—Not later than 90 days 
after the date of the enactment of the Cranston-Gonzalez Na-
tional Affordable Housing Act, the Secretary shall develop a 
model disclosure statement for notification to applicants under 
paragraph (1) with respect to servicing procedures, transfer 
practices and requirements, and complaint resolution. The 
model statement shall provide for the person originating the 
loan to disclose their capacity to service loans and the best 
available estimate of the percentage of all loans made by such 
person for which the servicing will be assigned, sold, or trans-
ferred during the 12-month period beginning upon the origina-
tion. The estimate shall be expressed as one of the following 
range of possibilities—between 0 and 25 percent, between 26 
and 50 percent, between 51 and 75 percent, or between 76 and 
100 percent. This parsigraph may not be construed to require 
the inclusion, in the estimate disclosed, of any loans the servic-
ing of which will be assigned, sold, or transferred by the person 
originating the loan to a transferee servicer that is an affiliate 
or subsidiary of such person. 
"(3) SIGNATURE OF APPUCANT.—Any disclosure of the informa-
tion required under paragraph (1) shall not be effective for 
purposes of this section unless the disclosure is accompanied by 
a written statement, in such form as the Secretary shall develop 
before the expiration of the 90-day period beginning on the date 
of the enactment of the Cranston-Gonzalez National Affordable 
Housing Act, that the applicant has read and understood the 
disclosure and that is evidenced by the signature of the 
applicant at the place where such statement appears in the 
application. 
"(b) NOTICE BY TRANSFEROR OR LOAN SERVICING AT TIME OF 
TRANSFER.— 
"(1) NOTICE REQUIREMENT.—Each servicer of any federally 
related mortgage loan shall notify the borrower in writing of 
any assignment, sale, or transfer of the servicing of the loan to 
anv other person. 
(2) TIME OF NOTICE.— 
"(A) IN GENERAL.—Except as provided under subpara-
graphs (B) and (C), the notice required under paragraph (1) 
shall be made to the borrower not less than 15 days before 
the effective date of transfer of the servicing of the mort-
gage loan (with respect to which such notice is made). 
(B) EXCEPTION FOR CERTAIN PROCEEDINGS.—The notice 
required under paragraph (1) shall be made to the borrower 
not more than 30 days after the effective date of assign-
ment, sale, or transfer of the servicing of the mortgage loan 
(with respect to which such notice is made) in any case in 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4407 
which the assignment, sale, or transfer of the servicing of 
the mortgage loan is preceded by— 
"(i) termination of the contract for servicing the loan 
for cause; 
"(ii) commencement of proceedings for bankruptcy of 
the servicer; or 
"(iii) commencement of proceedings by the Federal 
Deposit Insurance Corporation or the Resolution Trust 
Corporation for conservatorship or receivership of the 
servicer (or an entity by which the servicer is owned or 
controlled). 
"(C) EXCEPTION FOR NOTICE PROVIDED AT CLOSING.—The 
provisions of subparagraphs (A) and (B) shall not apply to 
any assignment, sale, or transfer of the servicing of any 
mortgage loan if the person who makes the loan provides to 
the borrower, at settlement (with respect to the property for 
which the mortgage loan is made), written notice under 
paragraph (3) of such transfer. 
"(3) CONTENTS OF NOTICE.—The notice required under para-
graph (1) shall include the following information: 
"(A) The effective date of transfer of the servicing de-
scribed in such paragraph. 
"(B) The name, address, and toll-free or collect call tele-
phone number of the transferee servicer. 
"(C) A toll-free or collect call telephone number for (i) an 
individual employed by the transferor servicer, or (ii) the 
department of the transferor servicer, that can be contacted 
by the borrower to answer inquiries relating to the transfer 
of servicing. 
"(D) The name and toll-free or collect call telephone 
number for (i) an individual employed by the transferee 
servicer, or (ii) the department of the transferee servicer, 
that can be contacted by the borrower to answer inquiries 
relating to the transfer of servicing. 
"(E) The date on which the transferor servicer who is 
servicing the mortgage loan before the assignment, sale, or 
transfer will cease to accept pajrments relating to the loan 
and the date on which the transferee servicer will begin to 
accept such payments. 
"(F) Any information concerning the effect the transfer 
may have, if any, on the terms of or the continued availabil-
ity of mortgage life or disability insurance or any other type 
of optional insurance and what action, if any, the borrower 
must take to maintain coverage. 
"(G) A statement that the assignment, sale, or transfer of 
the servicing of the mortgage loan does not affect any term 
or condition of the security instruments other than terms 
directly related to the servicing of such loan. 
"(c) 
NOTICE BY TRANSFEREE OF LOAN SERVICING AT TIME OF 
TRANSFER.— 
"(1) NOTICE REQUIREMENT.—Each transferee servicer to whom 
the servicing of any federally related mortgage loan is assigned, 
sold, or transferred shall notify the borrower of any such assign-
ment, sale, or transfer. 
"(2) TIME OF NOTICE.— 
"(A) IN GENERAL.—Except as provided in subparagraphs 
(B) and (C), the notice required under paragraph (1) shall be 
104 STAT. 4408 
PUBLIC LAW 101-625—NOV. 28, 1990 
made to the borrower not more than 15 days after the 
effective date of transfer of the servicing of the mortgsige 
loan (with respect to which such notice is made). 
"(B) EXCEPTION FOR CERTAIN PROCEEDINGS.—The notice 
required under paragraph (1) shall be made to the borrower 
not more than 30 days after the effective date of assign-
ment, sale, or transfer of the servicing of the mortgage loan 
(with respect to which such notice is made) in any case in 
which the assignment, sale, or transfer of the servicing of 
the mortgage loan is preceded by— 
"(i) termination of the contract for servicing the loan 
for cause; 
"(ii) commencement of proceedings for bankruptcy of 
the servicer; or 
"(iii) commencement of proceedings by the Federal 
Deposit Insurance Corporation or the Resolution Trust 
Corporation for conservatorship or receivership of the 
servicer (or an entity by which the servicer is owned or 
controlled). 
"(C) EXCEPTION FOR NOTICE PROVIDED AT CLOSING.—The 
provisions of subparagraphs (A) and (B) shall not apply to 
any assignment, sale, or transfer of the servicing of any 
mortgage loan if the person who makes the lo£m provides to 
the borrower, at settlement (with respect to the property for 
which the mortgage loan is made), written notice under 
paragraph (3) of such transfer. 
"(3) CONTENTS OF NOTICE.—Any notice required under para-
graph (1) shall include the information described in subsection 
(bX3). 
"(d) TREATMENT OF LOAN PAYMENTS DURING TRANSFER PERIOD.— 
During the 60-day period beginning on the effective date of transfer 
of the servicing of any federally related mortgage loan, a late fee 
may not be imposed on the borrower with respect to any payment on 
such loan and no such pa)anent may be treated as late for any other 
purposes, if the payment is received by the transferor servicer 
(rather than the transferee servicer who should properly receive 
payment) before the due date applicable to such pa3anent. 
"(e) 
DUTY 
OF LOAN 
SERVICER 
TO 
RESPOND 
TO BORROWER 
INQUIRIES.— 
"(1) NOTICE OF RECEIPT OF INQUIRY.— 
"(A) IN GENERAL.—If any servicer of a federally related 
mortgage loan receives a qualified written request from the 
borrower (or an agent of the borrower) for information 
relating to the servicing of such loan, the servicer shall 
provide a written response acknowledging receipt of the 
correspondence within 20 days (excluding legal public holi-
days, Saturdays, and Sundays) unless the action requested 
is taken within such period. 
"(B) QuAUFiED WRITTEN REQUEST.—For purposes of this 
subsection, a quEilified written request shall be a written 
correspondence, other than notice on a payment coupon or 
other payment medium supplied by the servicer, that— 
(i) includes, or otherwise enables the servicer to 
identify, the name and account of the borrower; and 
"(ii) includes a statement of the reasons for the belief 
of the borrower, to the extent applicable, that the 
account is in error or provides sufficient detail to the 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4409 
servicer regarding other information sought by the 
borrower. 
"(2) ACTION WITH RESPECT TO INQUIRY.—Not later than 60 days 
(excluding legal public holidays, Saturdays, and Sundays) after 
the receipt from any borrower of any qualified written request 
under paragraph (1) and, if applicable, before taking any action 
with respect to the inquiry of the borrower, the servicer shall— 
"(A) make appropriate corrections in the account of the 
borrower, including the crediting of any late charges or 
penalties, and transmit to the borrower a written notifica-
tion of such correction (which shall include the name and 
telephone number of a representative of the servicer who 
can provide assistance to the borrower); 
"(B) after conducting an investigation, provide the bor-
rower with a written explanation or clarification that 
includes— 
"(i) to the extent applicable, a statement of the rea-
sons for which the servicer believes the account of the 
borrower is correct as determined by the servicer; and 
"(ii) the name and telephone number of an individual 
employed by, or the office or department of, the 
servicer who can provide assistance to the borrower; or 
"(C) after conducting an investigation, provide the bor-
rower with a written explanation or clarification that 
includes— 
"(i) information requested by the borrower or an 
explanation of why the information requested is un-
available or cannot be obtained by the servicer; and 
"(ii) the name and telephone number of an individual 
employed by, or the office or department of, the 
servicer who can provide Eissistance to the borrower. 
"(3) PROTECTION OF CREDIT RATING.—During the 60-day period 
beginning on the date of the servicer's receipt from any bor-
rower of a qualified written request relating to a dispute regard-
ing the borrower's payments, a servicer may not provide 
information regarding any overdue pa3anent, owed by such 
borrower and relating to such period or qualified written re-
quest, to any consumer reporting agency (as such term is de-
fined under section 603 of the Fair Credit Reporting Act). 
"(f) DAMAGES AND COSTS.—Whoever fails to comply with any 
provision of this section shall be liable to the borrower for each such 
failure in the following amounts: 
"(1) INDIVIDUALS.—In the case of any action by an individual, 
an amount equal to the sum of— 
"(A) any actual damages to the borrower as a result of the 
failure; and 
"(B) any additional damages, as the court may allow, in 
the case of a pattern or practice of noncompliance with the 
requirements of this section, in an amount not to exceed 
$1,000. 
"(2) CLASS ACTIONS.—In the case of a class action, an amount 
equal to the sum of— 
"(A) any actual damages to each of the borrowers in the 
class as a result of the failure; and 
"(B) any additional damages, as the court may allow, in 
the case of a pattern or practice of noncompliance with the 
requirements of this section, in an amount not greater than 
104 STAT. 4410 
PUBLIC LAW 101-625—NOV. 28, 1990 
$1,000 for each member of the class, except that the total 
amount of damages under this subparagraph in any class 
action may not exceed the lesser of— 
"(i) $500,000; or 
"(ii) 1 percent of the net worth of the servicer. 
"(3) COSTS.—In addition to the amounts under paragraph (1) 
or (2), in the case of any successful action under this section, the 
costs of the action, together with any attorneys fees incurred in 
connection with such action as the court may determine to be 
reasonable under the circumstances. 
"(4) NoNUABiUTY.—A transferor or transferee servicer shall 
not be liable under this subsection for any failure to comply 
with any requirement under this section if, within 60 days after 
discovering an error (whether pursuant to a final written exam-
ination report or the servicer's own procedures) and before the 
commencement of an action under this subsection and the 
receipt of written notice of the error from the borrower, the 
servicer notifies the person concerned of the error and makes 
whatever adjustments are necessary in the appropriate account 
to ensure that the person will not be required to pay an amount 
in excess of any amount that the person otherwise would have 
paid. 
"(g) ADMINISTRATION OF ESCROW ACCOUNTS.—If the terms of any 
federally related mortgage loan require the borrower to make pay-
ments to the servicer of the loan for deposit into an escrow account 
for the purpose of assuring payment of taxes, insurance premiums, 
and other charges with respect to the property, the servicer shall 
make payments from the escrow account for such taxes, insurance 
premiums, and other charges in a timely manner as such payments 
become due. 
"(h) PREEMPTION OF CONFLICTING STATE LAWS.—Notwithstanding 
any provision of any law or regulation of any State, a person who 
makes a federally related mortgage loan or a servicer shall be 
considered to have complied with the provisions of any such State 
law or regulation requiring notice to a borrower at the time of 
application for a loan or transfer of the servicing of a loan if such 
person or servicer complies with the requirements under this section 
regarding timing, content, and procedures for notification of the 
borrower. 
"(i) DEFINITIONS.—For purposes of this section: 
"(1) EFFECTIVE DATE OF TRANSFER.—The term 'effective date of 
transfer' means the date on which the mortgage pajmient of a 
borrower is first due to the transferee servicer of a mortgage 
loan pursuant to the assignment, sale, or transfer of the servic-
ing of the mortgage loan. 
(2) SERVICER.—The term 'servicer' means the person respon-
sible for servicing of a loan (including the person who makes or 
holds a loan if such person also services the loan). The term does 
not include— 
"(A) the Federal Deposit Insurance Corporation or the 
Resolution Trust Corporation, in connection with assets 
acquired, assigned, sold, or transferred pursuant to section 
13(c) of the Federal Deposit Insurance Act or as receiver or 
conservator of an insured depository institution; and 
"(B) the Government National Mortgage Association, the 
Federal National Mortgage Association, the Federal Home 
Loan Mortgage Corporation, the Resolution Trust Corpora-
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4411 
tion, or the Federal Deposit Insurance Corporation, in any 
case in which the assignment, sale, or transfer of the 
servicing of the mortgage loan is preceded by— 
"(i) termination of the contract for servicing the loan 
for cause; 
"(ii) commencement of proceedings for bankruptcy of 
the servicer; or 
"(iii) commencement of proceedings by the Federal 
Deposit Insurance Corporation or the Resolution Trust 
Corporation for conservatorship or receivership of the 
servicer (or an entity by which the servicer is owned or 
controlled). 
"(3) SERVICING.—The term 'servicing' means receiving any 
scheduled periodic pa3nnents from a borrower pursuant to the 
terms of any loan, including amounts for escrow accounts de-
scribed in section 10, and m ^ n g the payments of principal and 
interest and such other payments with respect to the amounts 
received from the borrower as may be required pursuant to the 
terms of the loan.". 
SEC. 942. MORTGAGE ESCROW ACCOUNTS. 
(a) IN GENERAL.—Section 10 of the Real Estate Settlement Proce-
dures Act of 1974 (12 U.S.C. 2609) is amended— 
(1) by inserting "(a) IN GENERAL.—" after the section designa-
tion; and 
(2) by adding at the end the following new subsections: 
"(b) NOTIFICATION OF SHORTAGE IN ESCROW ACCOUNT.—If the 
terms of any federally related mortgage loan require the borrower 
to make pajnnents to the servicer (as the term is defined in section 
6(i)) of the loan for deposit into an escrow account for the purpose of 
assuring pa3mient of taxes, insurance premiums, and other charges 
with respect to the property, the servicer shall notify the borrower 
not less than annually of any shortage of funds in the escrow 
account. 
"(c) ESCROW ACCOUNT STATEMENTS.— 
"(1) INITIAL STATEMENT.— 
"(A) IN GENERAL.—Any servicer that has established an 
escrow account in connection with a federally related mort-
g£ige loan shall submit to the borrower for which the escrow 
account has been established a statement clearly itemizing 
the estimated taxes, insurance premiums, and other 
charges that are reasonably anticipated to be paid from the 
escrow account during the first 12 months after the 
establishment of the account and the anticipated dates of 
such payments. 
"(B) TIME OF SUBMISSION.—The statement required under 
subparagraph (A) shall be submitted to the borrower at 
closing with respect to the property for which the mortgage 
loan is made or not later than the expiration of the 45-day 
period beginning on the date of the establishment of the 
escrow account. 
"(C) INITIAL STATEMENT AT CLOSING.—Any servicer may 
submit the statement required under subparagraph (A) to 
the borrower at closing and may incorporate such state-
ment in the uniform settlement statement required under 
section 4. Not later than the expiration of the 90-day period Regulations, 
beginning on the date of the enactment of the Cranston-
104 STAT. 4412 
PUBLIC LAW 101-625—NOV. 28, 1990 
Gonzalez National Affordable Housing Act, the Secretary 
shall issue regulations prescribing any changes necessary to 
the uniform settlement statement under section 4 that 
specify how the statement required under subparagraph (A) 
of this section shall be incorporated in the uniform settle-
ment statement. 
' 
"(2) ANNUAL STATEMENT.— 
"(A) IN GENERAL.—Any servicer that has established or 
continued an escrow account in connection with a federally 
related mortgage loan shall submit to the borrower for 
which the escrow account has been established or continued 
a statement clearly itemizing, for each period described in 
subparagraph (B) (during which the servicer services the 
escrow account), the amount of the borrower's current 
monthly pa)maent, the portion of the monthly payment 
being placed in the escrow account, the total amount paid 
into the escrow account during the period, the total amount 
paid out of the escrow account during the period for taxes, 
insurance premiums, and other charges (as separately 
identified), and the balance in the escrow account at the 
conclusion of the period. 
"(B) TIME OF SUBMISSION.—The statement required under 
subparagraph (A) shall be submitted to the borrower not 
less than once for each 12-month period, the first such 
period beginning on the first January 1st that occurs after 
the date of the enactment of the Cranston-Gronzalez Na-
tional Affordable Housing Act, and shall be submitted not 
more than 30 days after the conclusion of each such 1-year 
period. 
"(d) Pira^ALTIES.— 
"(1) IN GENERAL.—In the case of each failure to submit a 
statement to a borrower as required under subsection (c), the 
Secretary shall assess to the lender or escrow servicer failing to 
submit the statement a civil penalty of $50 for each such failure, 
but the total amount imposed on such lender or escrow servicer 
for all such failures during any 12-month period referred to in 
subsection (b) may not exceed $100,000. 
"(2) INTENTIONAL VIOLATIONS.—If any failure to which para-
graph (1) applies is due to intentional disregard of the require-
ment to submit the statement, then, with respect to such 
failure— 
"(A) the penalty imposed under paragraph (1) shall be 
$100; and 
"(B) in the case of any penalty determined under 
subparagraph (A), the $100,000 limitation under paragraph 
(1) shall not apply.". 
(b) PROHIBITION OF FEES FOR ESCROW ACCOUNT STATEMENTS.— 
Section 12 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2610) is amended— 
(1) by inserting after the first comma the following: "or by a 
servicer (as the term is defined under section 6(i)),"; 
(2) by striking "lender" the second place it appears and 
inserting "lender or servicer"; 
(3) by striking "6" and inserting "10(c)"; and 
(4) by striking the section heading and inserting the following 
new section heading: 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4413 
"PROHIBITION OF FEES FOR PREPARATION OF TRUTH-IN-LENDING, 
UNIFORM SETTLEMENT, AND ESCROW ACCOUNT STATEMENTS". 
SEC. 943. NATIONAL COMMISSION ON MANUFACTURED HOUSING. 
(a) PURPOSE.—The purpose of this section is to establish a national 
commission to develop recommendations for modernizing the Na-
tional Manufactured Housing Construction and Safety Standards 
Act of 1974. 
(b) ESTABLISHMENT OF COMMISSION.—There is established a 
commission to be known as the National Commission on Manufac-
tured Housing (in this section referred to as the "Commission"). 
(c) COMPOSITION OF COMMISSION.— 
(1) IN GENERAL.—The Commission shall consist of the Sec-
retary and 16 members appointed, not later than 60 days after 
funds are provided as described in subsection (f) or made avail-
able from non-Federal sources, as follows: 
(A) 8 members shall be appointed by the Chairman and 
Ranking Minority Member of the Subcommittee on Hous-
ing and Urban Affairs of the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate (4 members by each); 
and 
(B) 8 members shall be appointed by the Chairman and 
Ranking Minority Member of the Subcommittee on Hous-
ing and Community Development of the Committee on 
Banking, Finance and Urban Affairs of the House of Rep-
resentatives (4 members by each). 
(2) APPOINTMENT CRITERIA.—The 8 members of the Commis-
sion appointed under each of subparagraphs (A) and (B) of 
paragraph (1) shall include— 
(A) 2 individuals who are elected public officiEils at the 
State or local level; 
(B) 2 individuals with knowledge and experience concern-
ing the manufactured housing industry; 
(C) 2 individuals chosen from organizations with more 
than a 2-year history of representing consumer or commu-
nity interests on housing issues; 
(D) 1 individual with knowledge and experience concern-
ing the development and implementation of building codes; 
and 
(E) 1 individual who occupies a manufactured home and 
is affiliated with an association representing manufactured 
home owners. 
(3) CHAIRPERSON.—The Commission shall elect a chairperson 
from among members of the Commission. 
(4) QUORUM.—A majority of the members of the Commission 
shall constitute a quorum for the transaction of business. 
(5) VOTING.—Each member of the Commission shall be enti-
tled to 1 vote, and all votes shall be given equal weight. 
(6) VACANCIES.—Any vacancy on the Commission sh£dl not 
eiffect its powers, but shall be filled in the manner in which the 
original appointment was made. 
(7) 
PROHIBITION ON ADDITIONAL PAY.—Members of 
the 
Commission shall serve without compensation, but shall be 
reimbursed for travel, subsistence, and other necessary ex-
penses incurred in the performance of their duties as members 
of the Commission. 
104 STAT. 4414 
PUBLIC LAW 101-625—NOV. 28, 1990 
(d) FuNCJnoNS OF THE COMMISSION.— 
(1) IN GENERAL.—The Commission shall study and investigate 
the National Manufactured Housing Construction and Ss^ety 
Standards Act of 1974 and current construction and safety 
regulatory standards applicable to manufactured housing. In 
conducting the study, the Commission shall— 
(A) consult with the Secretary of Housing and Urban 
Development and other agencies and housing authorities at 
the Federal, State, and local level, consumer groups, manu-
factured housing industry representatives, and other in-
terested parties to assess the effectiveness of the National 
Manufactured Housing Construction and Safety Standards 
Act of 1974; 
(B) consider deletion of the reference to the permanent 
chassis in the existing definition of a manufactured home 
£ind the effect of such a change on the affordability and 
durability of manufactured homes; 
(C) examine the implications for State regulatory jurisdic-
tion over modular housing, in the event of changes in 
definitions and standards relating to manufactured hous-
ing; 
(D) consider the need for additional and revised standards 
applicable to manufactured housing, including, but not lim-
ited to standards in the areas of construction, installation, 
thermal insulation, energy efficiency, and fire safety; 
(E) review the current system of inspections of manufac-
tured housing and enforcement of applicable standards and 
recommend improvements to the S5rstem; 
(F) consider the need for independent financing of inspec-
tion agencies to insure the autonomy of regulators; 
(G) evaluate the impact of the manufactured housing 
program under the title I of the National Housing Act on 
the actuarial soundness of Federal mortgage insurance and 
secondary market programs, and the impact that proposed 
changes to current law would have on fingincing of these 
homes; and 
(H) develop an action plan containing specific rec-
ommendations for legislative and regulatory revisions to 
present law (taking into consideration the amendments 
contained in section 766 of the bill, H.R. 1180, 101st Con-
gress, 2d Session, as passed by the House of Representa-
tives) in order to modernize the National Manufactured 
Housing Construction and Safety Standards Act of 1974 and 
a system for reviewing and updating applicable standards 
on an annual basis. 
(2) FINAL REPORT.—Not later than 9 months after the Commis-
sion is esteblished pursuant to subsection (b), the Commission 
shall submit to the Secretary of Housing and Urban Develop-
ment and to the Congress a final report which shall contain the 
information, evaluations, and recommendations specified in 
paragraph (1). 
(e) POWERS OF COMMISSION.— 
(1) HEARINGS.—The Commission may, for the purpose of 
canying out this section, hold such hearings and sit and act at 
such times and places as the Commission may find advisable. 
(2) RULES AND REGULATIONS.—The Commission may adopt 
such rules and regulations as may be necessary to esteblish its 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4415 
procedures and to govern the manner of its operations, 
organization, and personnel. 
(3) ASSISTANCE FROM FEDERAL AGENCIES.— 
(A) INFORMATION.—The Commission may secure directly 
from any department or agency of the United States such 
data and information as the Commission may require for 
the purpose of carr5dng out this section. Upon request of 
the Commission, any such department or agency shall fur-
nish such data or information. The Commission may ac-
quire data or information directly from such departments 
or 
agencies to the same extent the Secretary of 
Housing and Urban Development may acquire such data or 
information. 
(B) ADMINISTRATIVE SUPPORT.—The General 
Services 
Administration shall provide to the Commission, on a re-
imbursable basis, such administrative support services as 
the Commission may request. 
(C) PERSONNEL DETAILS.—Upon the request of the chair-
person of the Commission, the Secretary of Housing and 
Urban Development shall, to the extent possible and sub-
ject to the discretion of the Secretary, detail any of the 
personnel of the Department of Housing and Urban Devel-
opment, on a nonreimbursable basis, to assist the Commis-
sion in carrying out its duties under this section. 
(4) MAiLS.^The Commission may use the United States mails 
in the same manner and under the same conditions as other 
Federal agencies. 
(5) CONTRACTING.—The Commission may, to such extent and 
in such amounts as are provided in appropriations Acts, enter 
into contracts necessary to carry out its duties under this 
section. 
(6) ADVISORY COMMITTEE.—The Commission shall be consid-
ered an advisory committee within the meaning of the Federal 
Advisory Committee Act (5 U.S.C. App.). 
(f) AUTHORIZATION OF APPROPRIATIONS.—Of any amounts made 
available under section 501 of the Housing and Urban Development 
Act of 1970, not more than $500,000 shall be available to carry out 
this section in fiscal year 1991. 
(g) SUNSET.—The Commission shall terminate upon the expiration 
of the 9 months following the appointment of all the members under 
subsection (c), 
SEC. 944. ENERGY ASSESSMENT REPORT. 
42 USC 12712 
(a) IN GENERAL.—The Secretary of Housing and Urban Develop-
ment shall submit a report to the Congress, not later than one year 
after the date of the enactment of this Act, assessing any activity 
undertaken by the Secretary to increase energy efficiency in hous-
ing. The report shall include an analysis of the August 15, 1990 
DOEJ-HUD program to expand energy efficiency and increase afford-
ability of federally-assisted housing. 
(b) ESTABLISHMENT OF ENERGY EFFICIENCY STANDARD.—In the 
report submitted under this section, the Secretary of Housing and 
Urban Development (in consultation with the Secretary of Energy) 
shall establish, and include a description of, a standard measure by 
which changes over time in residential energy efficiency may be 
compared. 
104 STAT. 4416 
PUBLIC LAW 101-625—NOV. 28, 1990 
42 use 12712. 
SEC. 945. 5-YEAR ENERGY EFFICIENCY PLAN. 
(a) ESTABUSHMENT.—The Secretary of Housing and Urban Devel-
opment shall establish a plan for activities to be undertaken and 
policies to be adopted by the Secretary within the 5-year period 
beginning upon the submission of the plan to the Congress under 
subsection (d) to provide for, encourage, and improve energy effi-
ciency in newly constructed, rehabilitated, and existing housing. In 
developing the plan, the Secretary shall consider, as appropriate, 
any energy assessments under section 944. 
(b) INITIAL PLAN.—The Secretary of Housing and Urban Develop-
ment shall establish the first plan under this section not later than 
the expiration of the 1-year period beginning on the date of the 
enactment of this Act. 
(c) UPDATES.—The Secretary of Housing and Urban Development 
shall revise and update the plan under this section not less than 
once for each 2-year period, the first such 2-year period beginning on 
the date of the submission of the initial plan under subsection (b) to 
the Congress (as provided in subsection (d)). Each such update shall 
revise the plan for the 5-year period beginning upon the submission 
of the updated plan to the Congress. 
(d) SUBMISSION TO CONGRESS.—The Secretary of Housing and 
Urban Development shall submit the initial plan established under 
subsection (b) and any updated plans under subsection (c) to the 
Congress not later than the date by which such plans are to be 
established or updated under such paragraphs. 
42 use 12712 
SEC. 946. UNIFORM MORTGAGE FINANCING PLAN FOR ENERGY EFFI-
note. 
CIENCY. 
(a) UNIFORM PLAN.—The Secretary of Housing and Urban Devel-
opment, in consultation with the Secretary of Energy, shall promul-
gate a uniform plan to make housing more affordable through 
mortgage financing incentives for energy efficiency. The plan shall 
be promulgated not later than 2 years after the date of the enact-
ment of the Cranston-Gronzalez National Affordable Housing Act. 
(b) TASK FORCE.—To develop the plan, the Secretary shall form a 
task force to make recommendation on financing energy efficiency 
in private mortgages, through the policies of Federal sigencies and 
federally chartered financial institutions, mortgage bankers, home-
builders, real estate brokers, private mortgage insurers, energy 
suppliers, and nonprofit housing and energy organizations. The task 
force shall include individuals representing the Federal Housing 
Administration mortgage programs of the Department of Housing 
and Urban Development, the Farmers Home Administration mort-
gage loan and insurance programs of Department of Agriculture, 
the Federal Home Loan Mortgage Corporation, and the Federal 
National Mortgage Association. 
42 use 7704a. 
SEC. 947. REPORT ON SEISMIC SAFETY PROPERTY STANDARDS. 
(a) AUTHORITY.—The Secretary of Housing and Urban Develop-
ment (in this section referred to as the "Secretary") shall assess the 
risk of earthquake-related damage to properties assisted under pro-
grams administered by the Secretary and shall develop seismic 
safety standards for such properties. This section may not be con-
strued to prohibit the Secretary from deferring to local building 
codes that meet the requirements of the seismic safety standards 
developed under this section. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4417 
(b) STANDARDS.—The standards shall be designed to reduce the 
risk of loss of life to building occupants to the maximum extent 
feasible and to reduce the risk of shake-related property damage to 
the maximum extent practicable. 
(c) CONSULTATION.—In carrjdng out this section, the Secretary 
shall consult with the Director of the Federal Emergency Manage-
ment Agency and may utilize the resources under the National 
Earthquake Hazards Reduction Program (established under the 
Earthquake Hazards Reduction Act of 1977) and any other resources 
as may be required to carry out the activities under this section. 
(d) REPORTS.— 
(1) SUBMISSION AND CONTENTS.—The Secretary shall submit a 
report to the Congress, not less than biennially, containing a 
statement of the findings of the risk assessment study con-
ducted under this section, including risk assessment of prop-
erties located in seismic risk zones and a compilation of the 
standards developed pursuant to this section. The report shall 
also include a statement of the activities undertaken by the 
Secretary to carry out this section and the amount and sources 
of any funds expended by the Secretary for such purposes. The 
report shall also include a statement of the activities under-
taken by the Secretary to carry out the requirements of Execu-
tive Order No. 12699 (January 5, 1990) and the amount and 
sources of any funds expended by the Secretary for such 
purposes. 
(2) INITIAL SUBMISSION.—The first report required under this 
subsection shall be submitted not later than the expiration of 
the 18-month period beginning on the date of the enactment of 
this Act. 
Subtitle D—Miscellaneous Programs 
SEC. 951. HUD RESEARCH AND DEVELOPMENT. 
(a) IN GENERAL.—The second sentence of section 501 of the Hous-
ing and Urban Development Act of 1970 (12 U.S.C. 1701z-l) is 
amended to read as follows: "There are authorized to be appro-
priated to carry out this title $21,200,000 for fiscal year 1991 and 
$22,100,000 for fiscal year 1992. From any amounts appropriated 
under this section for fiscal year 1991, the Secretary shall use not 
more than $500,000 to carry out a demonstration project to test 
affordable housing technologies, and shall include in the annual 
report under section 8 of the Department of Housing and Urban 
Development Act (for the appropriate year) a statement of the 
activities under the demonstration program and findings resulting 
from the program. The statement shall set forth the amount and use 
of funds expended by the Secretary under the program for the year 
relating to the report and the Secretary shall include such a state-
ment in each such annual report for each year that amounts 
appropriated under this section are used under the demonstration.". 
(b) REPORT REGARDING RESEARCH ACTIVITIES.—Not later than the 
expiration of the 1-year period beginning on the date of the enact-
ment of this Act, the Secretary of Housing and Urban Development 
shall submit to the Congress a report listing and describing the 
various research activities, studies, testing, and demonstration pro-
grams relating to the mission and programs of the Department of 
Housing and Urban Development that are being conducted, have 
Appropriation 
authorization. 
12 u s e ITOlz-l 
note. 
104 STAT. 4418 
PUBLIC LAW 101-625—NOV. 28, 1990 
concluded, or will conclude during such period, pursuant to section 
501 of the Housing and Urban Development Act of 1970, title V of 
such Act, or any other authority. The report shall include a state-
ment identif3dng the individual or entity that is conducting each, 
such activity, study, test, and demonstration program.". 
SEC. 952. NATIONAL INSTITUTE OF BUILDING SCIENCES. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 809(h) of the 
Housing and Community Development Act of 1974 (12 U.S.C. 1701j-
2) is amended by striking the second sentence and inserting the 
following new sentence: "In addition to the eimounts authorized to 
be appropriated under the first sentence of this section, there are 
authorized to be appropriated to the Institute to carry out the 
provisions of this section not to exceed $512,000 for fiscal year 1991 
and $534,000 for fiscal year 1992.". 
(b) ADVANCED BUILDING TECHNOLOGY PROGRAM.—Section 809 
of 
the National Housing Act (12 U.S.C. 1701J-2) is amended— 
(1) by redesignating subsections (h) and (i) as subsections (i) 
and (j), respectively; and 
(2) by inserting after subsection (g) the following new 
subsection: 
"(h) ADVANCED BUILDING TECHNOLOGY PROGRAM.— 
"(1) 
ESTABLISHMENT OF ADVANCED BUILDING TECHNOLOGY 
COUNCIL.—There is established within the Institute, the Ad-
vanced Building Technology Council (hereafter referred to as 
the 'Council'). 
"(2) 
PURPOSES.—The Council shall carry out an Advanced 
Building Technology Program for the purposes of— 
"(A) identifying, selecting, and evaluating existing and 
new buUding technologies, including energy cost saving^ 
technologies, that conform to recognized performance cri-
teria and meet applicable test standards for maintenance of 
life, safety, health, and public welfare when used in occu-
pied buildings; 
"(B) to the extent necessary, developing criteria for the 
use of such technology; 
"(C) conducting economic analyses of proposed new 
technologies when produced and installed in buildings at 
volumes associated with comparable conventional tech-
nologies; 
"(D) in cooperation with the appropriate Federal agen-
cies, advising building designers, installers, subcontractors, 
contractors and supervisory officials on the appropriate 
design and use of new builmng technology incorporated in 
federally owned or operated buildings; 
"(E) in cooperation with the appropriate Federal agen-
cies, monitoring and evaluating the performance of new 
building technologies for at least 1 year after installation 
and building occupancy; and 
"(F) disseminating resulting data to Eiffected parties 
through automated information management systems. 
"(3) COUNCIL MEMBERSHIP.—The Council shall be comprised of 
not less than 6 and not more than 11 members selected by the 
Secretary of Housing and Urban Development from among 
representatives of the various segments of the nationwide build-
ing community that have extensive experience in building in-
dustries, including, but not limited to— 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4419 
"(A) product manufacturers; 
"(B) experts in the fields of health, fire hazards, and 
safety; and 
"(C) independent representatives of the public interest 
such as architects, professional engineers, and representa-
tives of consumer organizations, 
except that serving members of the National Institute of Build-
ing Sciences Advisory Council shall not be eligible to serve 
simultaneously on the Council. 
"(4) FEDERAL PARTICIPATION.— 
"(A) IN GENERAL.—Any agency of the Federsil Govern-
ment involved in any building or construction may partici-
pate in the Advanced Building Technology Program with 
the Council to develop and implement programs to incor-
porate one or more of the recommended new technologies 
in a new or existing building within the agency. 
"(B) REQUIRED ASSURANCES.—Upon agreement between a 
participating Federal agency £uid the Council, with respect 
to the selection of the appropriate technology and the 
schedule of necessary work, the Council shall— 
"(i) provide the Federal agency with a 5-year guaran-
tee from the technology manufacturer that— 
"(I) all necessary corrections to the technology 
will be made in the design, installation, and 
maintenance of the technology; 
"(II) all msilfunctions will be repaired without 
delay; and 
"(III) the technology manufacturer 
will be 
responsible for removal of the technology in the 
event of its failure to perform as required; 
"(ii) provide the Federal agency and its officials 
responsible for constructing or renovating buUdings 
utilizing the new technology, as well as the designers, 
installers, subcontractors, and contractors responsible 
for the design, construction, or renovation of the build-
ings utilizing such technology with the technical 
information necessary to ensure its most appropriate 
use, 
"(iii) in cooperation with the Federal agency, monitor 
and evaluate the performance of the new technology, 
and 
"(iv) prepare reports to be made available to public Reports. 
agencies at all levels of government, the industry, and 
the public on the performance of the new technology. 
"(5) REPORT TO THE INSTITUTE.—The Council shall submit to 
the Institute annually a description of its activities under the 
Advanced Building Technology Program for inclusion in the 
Institute's annual report to the CJongress under subsection (j).". 
SEC. 953. FAIR HOUSING INITIATIVES PROGRAM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—The first sentence of sec-
tion 561(d) of the Housing and Community Development Act of 1987 
^ 
(42 U.S.C. 3616 note) is amended to read as follows: "There are 
authorized to be appropriated to carry out the provisions of this 
section, including any program evaluations, $6,000,000 for fiscal 
year 1991 and $6,300,000 for fiscal year 1992, of which not more than 
104 STAT. 4420 
PUBLIC LAW 101-625—NOV. 28, 1990 
$3,000,000 in each year shall be for the private enforcement initia-
tive demonstration.". 
0)) EXTENSION OF PROGRAM.—Section 561(e) of the Housing and 
Community Development Act of 1987 (42 U.S.C. 3616 note) is amend-
ed by striking "September 30, 1989" and inserting "September 30, 
1992". 
SEC. 
9
5
4
. 
COLLECTION 
AND 
MAINTENANCE 
OF 
DATA 
REGARDING 
PRO-
GRAMS 
UNDER HUD. 
(a) PROGRAM EVALUATION AND MONITORING.—Section 7(r) of the 
Department of Housing and Urban Development Act (42 U.S.C. 
3535(r)) is amended— 
(1) in paragraph (1), by striking the periods at the end of the 
first and last sentences and inserting in each place the follow-
ing: "and collecting and maintaining data for such purposes."; 
(2) in paragraph (2)— 
(A) in subparagraph (I), by striking "and" at the end; 
(B) in subparagraph (J), by striking the period at the end 
and inserting "; and"; and 
(C) by adding at the end the following new subparagraph: 
"(K) titles II, III, and IV and section 811 of the Cranston-
Gonzalez National Affordable Housing Act."; 
(3) in paragraph (3)— 
(A) by inserting after the comma the following: "and 
collecting and maintaining data pursuant to the authority 
under this subsection,"; and 
(B) by striking the period at the end and inserting the 
following: "and collecting and maintaining data for such 
purposes."; and 
(4) in paragraph (4)— 
(A) in subparagraph (A), by inserting after "subsection" 
the following: "and collecting and maintaining data for 
such purposes"; and 
(B) in subparagraph (B), by inserting after "paragraph 
(2)" the following: "and to collect and maintain data for 
such purposes". 
(b) ANNUAL REPORT ON CHARACTERISTICS OF FAMILIES IN ASSISTED 
HOUSING.—Section 166 of the Housing and Community Develop-
ment Act of 1987 (42 U.S.C. 3536 note) is amended by adding at the 
end the following new subsection: 
"(c) COLLECTION AND MAINTENANCE OF DATA.—The Secretary shall 
collect and maintain data necessary to carry out the purposes of this 
section and shall coordinate such efforts, to the greatest extent 
possible, with activities and responsibilities under section 8 of the 
Department of Housing and Urban Development Act.". 
SEC. 955. EXEMPTION FROM DAVIS-BACON ACT REQUIREMENTS OF VOL-
UNTEERS UNDER HOUSING PROGRAMS. 
(a) COMMUNITY DEVELOPMENT BLOCK GRANT.—Section 110 of the 
Housing and Community Development Act of 1974 (42 U.S.C. 5310) 
is amended— 
(1) by inserting "(a)" after "SEC. 110."; and 
(2) by adding at the end the following new subsection: 
"(b) Subsection (a) shall not apply to any individual that— 
"(1) performs services for which the individual volunteered; 
"(2XA) does not receive compensation for such services; or 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4421 
"(B) is paid expenses, reasonable benefits, or a nominal fee for 
such services; and 
"(3) is not otherwise employed at any time in the construction 
work.". 
(b) PuBUC HOUSING AND SECTION 8 ASSISTANCE.—Section 12 of the 
United States Housing Act of 1937 (42 U.S.C. 1437j) is amended— 
(1) by inserting "(a)" after "SEC. 12."; and 
(2) by adding at the end the following new subsection: 
"(b) Subsection (a) and the provisions relating to wages (pursuant 
to subsection (a)) in any contract for loans, annual contributions, 
sale, or lease pursuant to this Act, shall not apply to any individual 
that— 
"(1) performs services for which the individual volunteered; 
"(2XA) does not receive compensation for such services; or 
"(B) is paid expenses, reasonable benefits, or a nominal fee for 
such services; and 
"(3) is not otherwise employed at any time in the construction 
work.". 
(c) ELDERLY AND HANDICAPPED HOUSING.—Section 202(cX3) of the 
Housing Act of 1959 (12 U.S.C. 1701q(c)(3)) is amended— 
(1) by inserting "(A)" after the paragraph designation; 
(2) by striking "; but the Secretary and all that follows and 
inserting a period; and 
(3) by adding at the end the following new subparagraph: 
"(B) Subparagraph (A) shall not apply to any individual that— 
"(i) performs services for which the individual volunteered; 
"(iiXD does not receive compensation for such services; or 
"(II) is paid expenses, reasonable benefits, or a nominal fee for 
such services; and 
"(iii) is not otherwise employed at any time in the construc-
tion work.". 
(d) APPUCABIUTY.—The amendments made by this section shall 
42 USC I437j 
apply to any volunteer services provided before, on, or after the date 
"°^-
of the enactment of this Act, except that such amendments may not 
be construed to require the repayment of any wages psiid before the 
date of the enactment of this Act for services provided before such 
date. 
SEC. 956. ELIGIBILITY UNDER FIRST-TIME HOMEBUYER PROGRAMS. 
42 USC 12713. 
(a) ELIGIBILITY OF DISPLACED HOMEMAKERS AND SINGLE PARENTS 
FOR FEDERAL ASSISTANCE FOR FIRST-TIME HOMEBUYERS.— 
(1) DISPLACED HOMEMAKERS.—No individual who is a displaced 
homemaker may be denied eligibility under any Federal pro-
gram to assist first-time homebuyers on the basis that the 
individual, while a homemaker, owned a home with his or her 
spouse or resided in a home owned by the spouse. 
(2) SINGLE PARENTS.—No individual who is a single parent 
may be denied eligibility under any Federal program to assist 
first-time homebuyers on the basis that the individual, while 
married, owned a home with his or her spouse or resided in a 
home owned by the spouse. 
(b) DEFINITIONS.—For purposes of this section: 
(1) DISPLACED HOMEMAKER.—The term "displaced home-
maker" means an individual who— 
(A) is an adult; 
(B) has not worked full-time, full-year in the labor force 
for a number of years but has, during such years, worked 
104 STAT. 4422 
PUBLIC LAW 101-625—NOV. 28, 1990 
primarily without remuneration to care for the home and 
family; and 
(C) is unemployed or underemployed and is experiencing 
difficulty in obtaining or upgrading employment. 
(2) FIRST-TIME HOMEBUYER.—The term "first-time homebuyer" 
means an individual who has never, or has not during a speci-
fied period of time, had any present ownership interest in a 
principal residence. 
(3) SINGLE PARENT.—The term "single parent" means an 
individual who— 
(A) is unmarried or legally separated from a spouse; and 
(BXi) has 1 or more minor children for whom the individ-
ual has custody or joint custody; or 
(ii) is pregnant, 
(c) APPUCABIUTY.—This section shall apply to any Federal pro-
gram to assist first-time homebuyers, unless the program is 
exempted from this section by a statute that amends this subsection 
or explicitly refers to this subsection. 
42 use 12714. 
SEC. 957. MAXIMUM ANNUAL LIMITATION ON RENT INCREASES RESULT-
ING FROM EMPLOYMENT. 
(a) IN GENERAL.—Notwithstanding any other law and subject to 
approval in appropriations Acts, the rent charged for any dwelling 
unit assisted under any housing assistance program administered by 
the Secretary of Housing and Urban Development, to a family 
whose monthly adjusted income increases as a result of the employ-
ment of a member of the family who wsis previously unemployed, 
may not be increased as a result of the increased monthly adjusted 
income due to such employment by more than 10 percent in each 
12-month period during the 36-month period beginning upon such 
employment. 
(b) DEFINITION OF HOUSING ASSISTANCE.—For purposes of this 
section, the term "housing assistance program" means any program 
of assistance for housing— 
(1) for which assistance is provided by the Secretary of Hous-
ing and Urban Development in the form of a grant, contract, 
loan, loan guarantee, cooperative agreement, interest subsidy, 
insurance, or direct appropriation; and 
(2) under which rent payments, with respect to all or some of 
the units in the housing assisted, are limited, restricted, or 
determined under law or regulation based on the income of the 
occupjdng families. 
42 use 1437f 
SEC. 958. PREFERENCES FOR NATIVE HAWAIIANS ON HAWAIIAN HOME-
note. 
LANDS UNDER HUD PROGRAMS. 
(a) AUTHORITY.—The Secretary of Housing and Urban Develop-
ment shall provide a preference to native Hawaiians for housing 
assistance programs described in subsection (b) for housing located 
on Hawaiian home lands. 
Ot)) ASSISTANCE PROGRAMS.—For purposes of subsection (a), the 
Federal housing assistance programs described in this subsection 
are— 
(1) the public housing and project-based section 8 assistance 
programs under the United States Housing Act of 1937; 
(2) the program under section 202 of the Housing Act of 1959; 
and 
(3) the programs under the National Housing Act. 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4423 
(c) MORTGAGE INSURANCE.— 
(1) IN GENERAL.—Notwithstanding any other provision or 
limitation of this Act, including those relating to marketability 
of title, the Secretary of Housing and Urban Development may 
provide mortgage insurance covering any Hawaiian home lands 
property upon which there is located a multi-family residence, 
for which the Department of Hawaiian Home Lands of the State 
of Hawaii— 
(A) is the mortgagor or co-mortgagor; 
(B) guarsmtees in writing to reimburse the Secretary for 
any mortgage insurance claim paid in connection with such 
property; or 
(C) offers other security that is acceptable to the Sec-
retary, 
subject to appropriate conditions prescribed by the Secretary. 
(2) SALE ON DEFAULT.—In the event of a default on a mortgage 
insured pursuant to paragraph (1), the Department of Hawaiian 
Home Lands of the State of Hawaii may sell the insured prop-
erty or housing unit to an eligible native Hawaiian. 
(d) DEFINITIONS.—For purposes of this section: 
(1) The term "native Hawaiian" means— 
(A) any descendant of not less than one-half; or 
(B) in the case of an individual who succeeds a spouse or 
parent in an interest in a lease of Hawaiian home lands, 
such lower percentage as may be established under section 
209 of the Hawaiian Homes Commission Act, 1920, (42 Stat. 
Ill) or under the corresponding provision of the Constitu-
tion of the State of Hawaii adopted under section 4 of the 
Act entitled "An Act to provide for the admission of the 
State of Hawaii into the Union", approved March 18, 1959 
(Public Law 86-3; 73 Stat. 5), 
of the blood of the races inhabiting the Hawaiian Islands before 
January 1,1778. 
(2) The term "Hawaiian home Isinds" means all lands given 
the status of Hawaiian home lands under section 204 of the 
Hawaiian Home (Dommission Act, 1920, (42 Stat. 108) or under 
the corresponding provision of the Constitution of the State of 
Hawaii adopted under section 4 of the Act entitled "An Act to 
provide for the admission of the State of Hawaii into the 
Union", approved March 18, 1959 (Public Law 86-3; 73 Stat. 5). 
SEC. 959. WAIVER OF MATCHING FUNDS REQUIREMENTS IN INDIAN 42 USC 1437fr. 
HOUSING PROGRAMS. 
(a) AUTHORIZATION OF WAIVER.—For any housing program that 
provides assistance through any Indian housing authority, the Sec-
retary of Housing and Urban Development may provide assistance 
under such program in £iny fiscal year notwithstanding any other 
provision of law that requires the Indian housing authority to 
provide amounts to match or supplement the amounts provided 
under such program, if the Indian housing authority has not re-
ceived amounts for such fiscal year under title I of the Housing and 
Community Development Act of 1974. 
(b) EXTENT OF WAIVER.—The authority under subsection (a) to 
provide assistance notwithstanding requirements regarding match-
ing or supplemental £imounts shall be effective only to the extent 
provided by the Secretary, which shall not extend beyond the fiscal 
year in which the waiver is made or beyond the receipt of any 
104 STAT. 4424 
PUBLIC LAW 101-625—NOV. 28, 1990 
amounts by an Indian housing authority under title I of the Housing 
and Community Development Act of 1974. 
(c) DEFINITION OF HOUSING PROGRAM.—For purposes of this sec-
tion, the term "housing program" means a program under the 
administration of the Secretary of Housing £ind Urban Development 
or the Secretary of Agriculture (through the Administrator of the 
Farmers Home Administration) that provides assistance in the form 
of contracts, grants, loans, cooperative agreements, or any other 
form of assistance (including the insurance or guarantee of a loan, 
mortgage, or pool of mortgages) for housing. 
SEC. 960. STUDY OF PENSION FUND FINANCING OF HOUSING. 
The Secretary of Housing and Urban Development shall conduct a 
study of ways in which State and local pension funds can be used to 
Reports. 
finance 
construction of low and moderate income housing. Not later 
than 90 days after the date of the enactment of this Act, the 
Secretary shall submit to the Congress a report on the results of 
such study. 
42 use 12712 
SEC. 961. ENERGY EFFICIENCY DEMONSTRATION. 
(a) AUTHORITY.—The Secretary of Housing £ind Urban Develop-
ment shall establish a program to demonstrate various methods of 
improving the energy efficiency of existing housing. For the purpose 
of this section, the Secretary may, after funds are made available for 
the purposes of section 304(e), use $2,000,000 of the amounts set 
aside under section 304(e). 
(b) EXISTING HOUSING.—The demonstration under this section 
shall determine appropriate design, improvement, and rehabilita-
tion methods and practices for increasing residential energy effi-
ciency in housing already constructed. 
(c) REPORT.—As soon as practicable after September 30, 1991, the 
Secretary of Housing and Urban Development shall submit to the 
Congress a report setting forth the findings and recommendations of 
the Secretary as a result of the demonstration under this section. 
TITLE X—EXPEDITED FUNDS 
AVAILABILITY 
SEC. 1001. AMENDMENTS TO EXPEDITED FUNDS AVAILABILITY ACT. 
Section 603(e) of the Expedited Funds Availability Act (12 U.S.C. 
4002(e)Hs amended— 
(1) in paragraph (1)(A), by striking "6" and inserting "4"; 
(2) in paragraph (1)(C), by striking "before September 1, 1990" 
and inserting "prior to the expiration of the 2-year period 
beginning on the date of enactment of the Cranston-Gonzalez 
National Affordable Housing Act"; and 
(3) in paragraph (2XD), by striking out "September 1, 1990" 
and inserting in lieu "the expiration of the 2-year period 
PUBLIC LAW 101-625—NOV. 28, 1990 
104 STAT. 4425 
beginning on the date of enactment of the Cranston-Gonzalez 
National Affordable Housing Act". 
Approved November 28,1990. 
LEGISLATIVE fflSTORY—S. 566 (H.R. 1180): 
HOUSE REPORTS: No. 101-559 accompanying H.R. 1180 (Comm. on Banking, 
Finance, and Urban Affairs) and Nos. 101-922 and 101-943 
Gioth from Comm. of Conference). 
SENATE REPORTS: No. 101-316 (Comm. on Banking, Housing, and Urban Affairs). 
CONGRESSIONAL RECORD, Vol. 136 (1990): 
June 18-22, 27, considered and passed Senate. 
July 27, 31, Aug. 1, H.R. 1180 considered and passed House; S. 566, amended, 
passed in lieu. 
Oct. 24, House recommitted conference report. 
Oct. 25, House agreed to conference report. 
Oct. 26, 27, Senate considered and agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 26 (1990): 
Nov. 28, Presidential remarks and statement.