Text: S.566 — 101st Congress (1989-1990)All Information (Except Text)

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--S.566--
S.566
One Hundred First Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday, the twenty-third day
of January,
one thousand nine hundred and ninety
An Act
To authorize a new HOME Investment Partnerships program, a National
Homeownership Trust program, and HOPE programs, to amend and extend certain
laws relating to housing, community and neighborhood preservation, and
related programs, and for other purposes.
 Be it enacted by the Senate and House of Representatives of the United
 States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
 (a) SHORT TITLE- This Act may be cited as the `Cranston-Gonzalez National
 Affordable Housing Act'.
 (b) TABLE OF CONTENTS-
Section 1. Short title; table of contents.
TITLE I--GENERAL PROVISIONS AND POLICIES
Sec. 101. The national housing goal.
Sec. 102. Objective of national housing policy.
Sec. 103. Purposes of the Cranston-Gonzalez 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 and 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.
Sec. 232. Project-specific assistance to community housing development
organizations.
Sec. 233. Housing education and organizational 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. General 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 assistance 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 and accountability.
Sec. 284. Uniform recordkeeping and 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. Assistance 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.
Sec. 339. Limitation on GNMA guarantees of mortgage-backed securities.
Sec. 340. Increase in loan limits for property improvement loan insurance.
Subtitle C--Effective Date
Sec. 351. Effective date.
TITLE IV--HOMEOWNERSHIP 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 Indian housing homeownership.
Sec. 412. Amendment to section 18 regarding demolition and disposition of
public housing.
Sec. 413. Related amendments to section 8.
Sec. 414. Related CIAP amendment.
Sec. 415. Limitation on section 20 resident management financial assistance.
Sec. 416. Extension of section 21 homeownership program and provision of
technical and other assistance.
Sec. 417. Amendment to section 5(h).
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 Family Homes
Sec. 441. Program authority.
Sec. 442. Planning grants.
Sec. 443. Implementation grants.
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.
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. Formula 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
program.
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 efficiency demonstration.
Sec. 524. Study of public housing funding system.
Sec. 525. Study of prospective payment system for public housing.
Sec. 526. GAO study of alternatives 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 adjustments.
Sec. 543. Tenant rent contributions under tenant-based certificate program.
Sec. 544. Opt-outs.
Sec. 545. Preference rules.
Sec. 546. Tenant protections.
Sec. 547. Revisions to project-based certificate program.
Sec. 548. Section 8 assistance for PHA-owned units.
Sec. 549. Definitions of participating jurisdiction and 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 tenancy in new construction units.
Sec. 556. Distribution of section 8 certificates.
Sec. 557. Settlement agreement regarding 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 Indian tribe eligibility for voucher
program.
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 assistance plan.
Sec. 577. Housing counseling.
Sec. 578. Flexible subsidy program.
Sec. 579. Streamlined property disposition requirements for unsubsidized
multifamily housing projects.
Sec. 580. Multifamily housing disposition partnership.
Sec. 581. Public and 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 VII--RURAL HOUSING
Sec. 701. Program authorizations.
Sec. 702. Effect of foster care children in determination of family composition
and size.
Sec. 703. Escrow accounts.
Sec. 704. Remote rural 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 areas.
Sec. 710. Rural housing inventory.
Sec. 711. Rights of appeal.
Sec. 712. Section 515 loans.
Sec. 713. Set-aside of rural 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 among Federal
agencies.
Sec. 719. Rural housing technical amendments.
TITLE VIII--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 for 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 transient facilities.
Part 2--Amendments to Current Program
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 affordability strategy requirement.
Sec. 837. Shelter plus care.
Part 3--Effective Date
Sec. 841. Effective date.
Subtitle D--Housing Opportunities for Persons With 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.
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
demonstrations.
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
program.
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 and certain other
community development and public facility funds.
Sec. 919. Study regarding availability of housing proximate to places of
employment.
Sec. 920. Allocation of funds under title I of the Housing and Community
Development 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 standards.
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
housing programs.
Sec. 956. Eligibility under first-time homebuyer programs.
Sec. 957. Maximum annual limitation on rent increases resulting from
employment.
Sec. 958. Preferences for Native Hawaiians on Hawaiian 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.
TITLE I--GENERAL PROVISIONS AND POLICIES
SEC. 101. THE NATIONAL HOUSING GOAL.
 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.
 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 partnership 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 affordable 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 minorities, 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 AFFORDABLE 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 combines structural
 features and services needed to enable persons with special needs to live
 with dignity and independence.
SEC. 104. DEFINITIONS.
 As used in this title and in title II:
 (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 accordance with
 section 216(2) of this Act; and any agency or instrumentality thereof that
 is established pursuant to legislation 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 housing that is affordable
 to low-income and moderate-income persons;
 (B) maintains, through significant representation on the organization's
 governing board and otherwise, accountability to low-income community
 residents and, to the extent practicable, low-income beneficiaries with
 regard to decisions on the design, siting, development, and management of
 affordable housing;
 (C) has a demonstrated capacity for carrying out activities 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 corporations' 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 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.
 (10) The term `low-income families' means 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 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 homebuyer under this paragraph 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
 (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
 (B)(i) has 1 or more minor children for whom the individual 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 rehabilitation 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 States Housing Act of 1937 (42 U.S.C. 1437a(b)).
 (19) The term `metropolitan city' has the meaning given the term in
 section 102(a)(4) of the Housing and Community Development Act of 1974
 (42 U.S.C. 5302(a)(4)).
 (20) The term `urban county' has the meaning given the term in section
 102(a)(6) of the Housing and Community Development Act of 1974 (42
 U.S.C. 5302(a)(6)).
 (21) The term `certification' means a written assertion, based on supporting
 evidence, which shall be kept available for inspection by the Secretary,
 the Inspector General and the public, which assertion shall be deemed to be
 accurate for purposes of this Act, unless the Secretary determines otherwise
 after inspecting the evidence and providing due notice and opportunity
 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.
SEC. 105. STATE AND LOCAL HOUSING STRATEGIES.
 (a) IN GENERAL- The Secretary shall provide assistance directly to a
 jurisdiction only if--
 (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 submission
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 extensions 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 projected 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 appropriate;
 (2) describe the nature and extent of homelessness within the jurisdiction,
 providing an estimate of the special needs of various 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 facilities and services
 that meet such needs within that jurisdiction); and (C) helping homeless
 persons make the transition to permanent housing and independent living;
 (3) describe the significant characteristics of the jurisdiction's housing
 market, indicating how those characteristics will influence the use of
 funds made available for rental assistance, production of new units,
 rehabilitation of old units, or acquisition of existing units;
 (4) explain whether the cost of housing or the incentives to develop,
 maintain, or improve affordable housing in the jurisdiction 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 industry, nonprofit
 organizations, and public institutions, through which the jurisdiction will
 carry out its housing strategy, assessing the strengths and gaps in that
 delivery system and describing 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 identifying, 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 Community 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 geographically
 within the jurisdiction and among different activities 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 management 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 affirmatively
 further fair housing;
 (14) include a certification that the jurisdiction is in compliance with a
 residential antidisplacement and relocation assistance 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 housing
strategies by jurisdictions that are not otherwise expected to be participating
jurisdictions under title II of this Act. Such an abbreviated 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 the purpose of the preceding sentence,
 the adoption or continuation of a public policy identified pursuant to
 subsection (b)(4) 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 Secretary may extend the review period to not longer than 90 days.
 (2) ACTIONS IN CASE OF DISAPPROVAL- If the Secretary disapproves 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
 disapproval, 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 housing 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) CONSULTATION WITH SOCIAL SERVICE AGENCIES- When preparing a housing
 strategy for submission under this section, a jurisdiction shall make
 reasonable efforts to confer with appropriate social service agencies
 regarding the housing needs of children, elderly persons, persons with
 disabilities, homeless persons, and other persons served by such agencies.
 (f) BARRIER REMOVAL- Not later than 4 months after completion of the final
 report of the Secretary's Advisory Commission on Regulatory Barriers to
 Affordable Housing, the Secretary shall submit to the Congress a written
 report outlining the Secretary's recommendations 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 governments that (1) inflate the costs of or otherwise inhibit
 the construction, rehabilitation, or management of housing, particularly
 housing that otherwise could be affordable to low-income and moderate-income
 families, or (2) contribute to economic or racial discrimination.
SEC. 106. CERTIFICATION.
 The Secretary shall, by regulation or otherwise, as deemed by the 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.
 (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 assistance the jurisdiction
 expects to receive and the range of investment 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 opportunity 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.
 (b) 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 performance 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 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 strategies or performance reports.
SEC. 108. COMPLIANCE.
 (a) PERFORMANCE REPORTS-
 (1) IN GENERAL- Each participating jurisdiction shall annually 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(b)(15) of this Act, and information on the number and types
 of households 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, assistance 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 jurisdiction 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 Development 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 programs 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(b)(4) shall not be reviewable by any Federal, State, or other
 court. Review of a housing strategy by any 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.
 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 housing (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-effective 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 organizations, 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 multifamily 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 Department's plan to maintain such
 capacity, together with any recommendations for legislative and administrative
 action as the Secretary determines to be appropriate.
SEC. 111. PROTECTION OF STATE AND LOCAL AUTHORITY.
 Notwithstanding any other provision of this title or title II, the
 Secretary shall not establish any criteria for allocating or denying funds
 made available under programs administered by the Secretary 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 jurisdiction's duly established authority, and (2)
 not in violation of any Federal law.
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 Americans 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 affordable housing for very low-income and low-income families;
 (6) reliable Federal leadership is needed to achieve an adequate supply of
 affordable housing for all Americans;
 (7) to achieve 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 local 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 corporations, community action agencies, neighborhood
 housing services corporations, trade unions, groups sponsored by religious
 organizations, limited equity cooperatives, and other tenant organizations;
 (11) during the 1980's, nonprofit community housing development organizations,
 despite severe obstacles caused by inadequate 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 local 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.
 The purposes of this title are--
 (1) to expand the supply of decent, safe, sanitary, and affordable 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 assistance, 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 efficient 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 neighborhood 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, sanitary, and affordable
 housing;
 (9) to allocate Federal funds for investment in affordable housing among
 participating jurisdictions by formula allocation;
 (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
 repayments back to its HOME Investment 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 finance institutions when most
 efficient and supplementing their activities when appropriate; and
 (13) to assist very low-income and low-income families to obtain the skills
 and knowledge necessary to become responsible homeowners and tenants.
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 Secretary for
 Housing-FHA Commissioner of the Department of Housing 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 completion of activities under this title.
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.
SEC. 206. NOTICE.
 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
SEC. 211. AUTHORITY.
 The Secretary is authorized to make funds available to participating
 jurisdictions for investment to increase the number of families 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.
 (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 REHABILITATION- A participating jurisdiction shall give
 preference to rehabilitation of substandard housing 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 housing 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 subtitle may be used (at
 the discretion of a participating jurisdiction) 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 structures in the
 jurisdiction that are suitable for rehabilitation as affordable rental
 housing.
 (B) ESTABLISHMENT OF CRITERIA- The Secretary shall publish--
 (i) objective criteria for determining whether a jurisdiction'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 jurisdictions not
designated on the published list to demonstrate, on the basis of additional
information, that they meet the criteria. Such criteria shall permit new
construction by not fewer than 30 percent of the jurisdictions receiving an
allocation under section 216(1). Such criteria shall include objective data on
housing market conditions such as low vacancy rates, low turnover of units with
rents below fair market rents, and a high proportion of substandard housing.
 (C) NEIGHBORHOOD REVITALIZATION- 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 moderate-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 assistance under this
 subtitle does not exceed 20 percent of the total number of units in the
 neighborhood revitalization 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 section 104(6), or a public agency.
 (D) APPLICABILITY- 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
 housing needs, or
 (iii) the new construction is required to accomplish the neighborhood
 revitalization program.
 (E) SPECIAL NEEDS HOUSING- Notwithstanding subparagraph (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-based rental assistance is an essential element of the jurisdiction's
 annual housing 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 assistance 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
 quality 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 investments,
 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-based rental assistance for the special purposes 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-
 (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,
 reconstruction, 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 annually 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 national nonprofit organizations and national organizations
 representing private development firms 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 participating 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.
SEC. 213. DEVELOPMENT OF MODEL PROGRAMS.
 (a) IN GENERAL- The Secretary shall--
 (1) in cooperation with participating jurisdictions, government-sponsored
 mortgage finance corporations, nonprofit 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 appropriate
 variety of model programs designed for local market conditions, housing
 problems, project characteristics, and managerial capacities as they differ
 among participating jurisdictions;
 (4) negotiate and enter into agreements with agencies of the Federal
 Government, participating jurisdictions, private financial institutions,
 government-sponsored mortgage finance corporations, 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 requested by
 participating jurisdictions, private financial institutions, 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 investment 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.
 (b) 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 assistance 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.
 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 qualify as low-income families (other
 than families described 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, whichever is later; and
 (3) all such funds are invested with respect to housing that qualifies as
 affordable housing under section 215.
SEC. 215. QUALIFICATION AS AFFORDABLE HOUSING.
 (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 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 because 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(g)(2) 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 commitments 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 qualifying
 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 financial
 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 this section.
 (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 determined 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 qualifies 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 established by the
 participating jurisdiction and determined by the Secretary to be appropriate--
 (i) to provide the owner with a fair return on investment, 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.
 The Secretary shall designate a State or unit of general local 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
 accordance 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 Secretary shall inform the jurisdiction
 in writing how the jurisdiction 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.
 (3) ELIGIBILITY- (A) A jurisdiction receiving a formula allocation 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 jurisdiction's formula allocation and $750,000, or the
 State or jurisdiction has made available from the State's or jurisdiction's
 own sources an equal amount for use by the jurisdiction in conformance with
 the provisions of this subtitle.
 (B) If a jurisdiction has 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 available to the jurisdiction under subparagraph
 (A)(ii).
 (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 allocation (plus any
 reallocations for which the jurisdiction is eligible under section 217(d)(1))
 pending the jurisdiction's designation as a participating jurisdiction. The
 Secretary shall reallocate, in accordance with paragraph (6) of this section,
 any funds reserved under the previous sentence if the Secretary determines
 that the jurisdiction will not meet the requirements for designation as a
 participating jurisdiction within a reasonable period of time.
 (5) SUBMISSION OF STRATEGY- Not later than 90 days after providing
 notification under paragraph (4), an eligible jurisdiction shall submit to
 the Secretary a comprehensive housing affordability strategy in accordance
 with section 105.
 (6) REALLOCATION- If the Secretary determines that a jurisdiction 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), disapproves the jurisdiction's comprehensive housing
 affordability strategy, the Secretary shall reallocate any funds reserved
 for the jurisdiction as follows:
 (A) STATE- If a State has failed to meet the requirements, 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 government within the
 State, insofar as approvable applications 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 accordance 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 reallocate 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 approvable
 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 section 217(b).
 (D) CERTAIN JURISDICTIONS DEEMED TO BE PARTICIPATING JURISDICTIONS- If a
 State or unit of general local government 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 opportunity 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.
 (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 approved in an appropriations Act to carry out this
 title by formula as provided in subsection (b). Of the funds made available
 under the preceding sentence, the Secretary shall initially allocate 60
 percent among units of general local government and 40 percent among States.
 (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 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 Secretary after notice and public comment.
 (b) FORMULA ALLOCATION-
 (1) IN GENERAL-
 (A) RENTAL HOUSING PRODUCTION FORMULA- (i) Of the funds made available under
 subsection (a)(1), the Secretary shall designate 10 percent in fiscal year
 1991, and 15 percent 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 determination 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 inadequate 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 section 212(a)(3)(B). In
 no case may a jurisdiction's total allocation 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 rehabilitation 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.
 (B) BASIC FORMULA- The Secretary shall establish in regulation an allocation
 formula that reflects each jurisdiction'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, substandard 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 incapacity
 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 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 obtained 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 basic
 formula established under subparagraph (B) shall be used for all formula
 allocations and reallocations provided for in this subtitle.
 (E) WEIGHTS- When allocation 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 allocation of an excessively large share
 of amounts made available 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 formulas 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 Community 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
 formula 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 general local government
 within a State receives an allocation under paragraph (3), the State's
 allocation shall be increased 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 counties, 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 deduction 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, 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 applicable under section
 8 of the United States Housing Act of 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 participation in development
 by the private sector, including nonprofit 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 105(b)(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 all funds to be reallocated
 are made available to eligible jurisdictions 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 commitment of funds to a project from initial 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.
 (a) ESTABLISHMENT- The Secretary shall establish for each participating
 jurisdiction a HOME Investment Trust Fund, which shall be an account
 (or accounts as provided in section 219(c)) for use solely to invest in
 affordable housing within the participating jurisdiction's boundaries in
 accordance with the provisions of this subtitle.
 (b) LINE OF CREDIT- The Secretary shall establish a line of credit in the
 HOME Investment Trust Fund of each participating jurisdiction, which line
 of credit shall include--
 (1) funds allocated or reallocated to the participating jurisdiction 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)(1)(A)(ii), if any funds becoming available to a participating
 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 jurisdiction'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
 participating 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 Investment Trust Fund,
 including the status of amounts under various stages of commitment.
SEC. 219. REPAYMENT OF INVESTMENT.
 (a) IN GENERAL- Any repayment of funds drawn from a jurisdiction'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 payment or repayment is made, the amount of such
 payment or repayment 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 repayable when the housing no
 longer qualifies as affordable housing. Any repayment under the previous
 sentence shall be for deposit in the HOME Investment Trust Fund of the
 jurisdiction making the investment; except that if such jurisdiction is
 not a participating jurisdiction when such repayment 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 repayments deposited in a HOME Investment Trust Fund
 in accordance with this section shall be immediately available to the
 participating jurisdiction for investment 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 account 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 repayments are not receipts or collections of the
 Federal Government.
SEC. 220. MATCHING REQUIREMENTS.
 (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 available under
section 216(3)(A)(ii).
 (b) RECOGNITION-
 (1) IN GENERAL- A contribution shall be recognized for purposes 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 affordable housing under section 215.
 (2) ADMINISTRATIVE EXPENSES- Contributions for administrative 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 106(b) 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 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 infrastructure 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.
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.
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 distributing
 assistance throughout the State according to the State's assessment of
 the geographical distribution of the housing need within the State, as
 identified in the State's approved housing strategy. Participating 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.
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 Secretary 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--
 (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 prohibiting discrimination, or
 (2) a settlement has been entered into in any case where claims of such
 violations have been asserted against a participating jurisdiction, except
 to the extent permitted by subsection (b).
 (b) REMEDIAL USE OF FUNDS PERMITTED- In the case of settlement described
 in subsection (a)(2), 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 termination 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 specifying the grounds for the action.
 (c) MAINTENANCE AND REPLACEMENT- The owner of rental housing assisted under
 this title shall maintain the premises in compliance 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 lease,
 (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)(4)(A)), and
 (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.
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 available
 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
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 carrying out elements
 of the jurisdiction's housing 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
 organizations to carry out this section.
 (b) RECAPTURE AND REUSE- If any funds reserved under subsection (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 participating 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 organizations consistent with
 section 233, with preference to community housing development organizations
 serving the jurisdiction from which the funds were recaptured.
 (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 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 section 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 allowable
 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 development 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 Investment Trust Fund from construction loan proceeds or
 other project income. The participating jurisdiction may waive repayment
 of the loan, in part or in whole, if there are impediments to project
 development that the participating jurisdiction determines are reasonably
 beyond the control of the borrower.
 (c) Project-Specific Seed Money Loans-
 (1) IN GENERAL- Amounts reserved under the previous section may be used
 to provide loans to community housing development 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 specifications,
 zoning approvals, engineering studies and legal fees.
 (2) ELIGIBLE SPONSORS- A loan under this subsection may be provided only
 to a community housing development organization that has, with respect to
 the project concerned, site control, a preliminary financial commitment,
 and a capable development team.
 (3) REPAYMENT- A community housing development organization that receives a
 loan 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 development that
 the participating jurisdiction determines are reasonably beyond the control
 of the borrower.
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) ELIGIBLE ACTIVITIES- Assistance under this section may be used only
 for the following eligible activities:
 (1) ORGANIZATIONAL SUPPORT- Organizational support assistance may be
 made available to community housing development 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 organizations to cover expenses for providing
 or administering programs for educating, counseling, or organizing homeowners
 and tenants who are eligible to receive assistance under other provisions
 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 properties 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 encouraging 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 favorable
 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 privately owned, local community development
 banks and credit unions to finance affordable housing.
 (c) DELIVERY OF ASSISTANCE- The Secretary shall provide this 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) has demonstrated experience in providing a range of assistance
 (such as financing, technical assistance, construction and property
 management assistance, capacity building and training) to community housing
 development organizations or similar organizations that engage in community
 revitalization;
 (C) has demonstrated the ability to provide technical assistance and training
 for community-based developers of affordable housing; and
 (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 paragraph (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 contractor 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 contracting 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 development 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.
 (b) LIMITATION ON ASSISTANCE- A community housing development 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 Development Reform Act of 1989.
Subtitle C--Other Support for State and Local Housing Strategies
SEC. 241. AUTHORITY.
 The Secretary shall, insofar as is feasible through contract with eligible
 organizations, develop the capacity of participating jurisdictions, State
 and local housing finance agencies, nonprofit organizations and for-profit
 corporations, working in partnership, to identify and meet needs for an
 increased supply of decent, affordable housing.
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;
 (3) encourage private lenders and for-profit developers of low-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 planning, design, financing, construction, and operation of affordable
 housing; and
 (5) facilitate the establishment and efficient operation of employer-assisted
 housing programs through research, technical assistance and demonstration
 projects.
SEC. 243. CONDITIONS OF CONTRACTS.
 (a) ELIGIBLE ORGANIZATIONS- The Secretary shall carry out this subtitle
 insofar as is practicable through contract with--
 (1) a participating jurisdiction or agency 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 participating
 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 subtitle.
 (b) CONTRACT TERMS- Contracts under this subtitle shall be for not more than
 3 years and 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.
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 severe problems of housing affordability. For
 purposes of this section, agencies of the United States, government-sponsored
 mortgage finance corporations, and qualified research organizations shall
 be included as eligible organizations in addition to eligible organizations
 specified under section 243.
SEC. 245. REACH: ASSET RECYCLING INFORMATION DISSEMINATION.
 (a) IN GENERAL- The Secretary shall make available upon request 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) ELIGIBLE 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(d)(3)(ii) of the National Housing Act
 (12 U.S.C. 1715l(d)(3)(ii)) for elevator-type structures.
Subtitle D--Specified Model Programs
SEC. 251. GENERAL AUTHORITY.
 Among the alternative model programs 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 rehabilitation 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, as
 determined by the participating jurisdiction to be appropriate. Interest
 shall begin to accrue 1 year after the completion of the construction,
 acquisition, or substantial rehabilitation 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 payment of all amounts due under the first mortgage,
 operating expenses, and required replacement reserves, as determined 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 payments due under subparagraph (A), 50 percent of the
 excess surplus cash flow shall be paid to the participating jurisdiction's
 HOME Investment Trust Fund as additional interest.
 (C) PRINCIPAL AND UNPAID INTEREST- The principal amount of an advance under
 the model program, and any interest remaining unpaid pursuant to subparagraph
 (A)(ii) shall be repayable when the housing no longer qualifies as affordable
 housing in accordance with section 219(b).
 (b) Selection Guidelines-
 (1) IN GENERAL- The Secretary shall establish guidelines for the selection
 of projects by participating jurisdictions for assistance under the model
 program. Such guidelines shall be designed 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 occupancy 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 assistance 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 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) GUIDELINES- 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 rehabilitation 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 Secretary and where rents can reasonably
 be expected not to change materially over an extended period of time.
 (b) AMOUNT OF SUBSIDY- The amount of the rehabilitation subsidy 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 program shall
 generally comport with the additional protections and restrictions specified
 under section 17(c) of the United States Housing 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 rehabilitation of such property is
 consistent with a local plan for rehabilitation or code enforcement.
Additional guidelines for the model program shall generally comport with
the additional protections and restrictions specified under section 312 of
the Housing Act of 1964.
SEC. 255. SWEAT EQUITY MODEL PROGRAM.
 (a) IN GENERAL- The Secretary shall make available a model program to provide
 grants to public and private nonprofit organizations and community housing
 development organizations to provide technical and supervisory assistance to
 low-income and very low-income families, including the homeless, in acquiring,
 rehabilitating, and constructing housing by the self-help housing method.
 (b) REHABILITATION 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 program 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 payments 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 program shall
 generally comport with the additional protections and restrictions specified
 under section 523 of the Housing Act of 1949.
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) ELIGIBLE 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 noneconomic factors such as
 physical and mental disabilities, language 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.
SEC. 257. LOW-INCOME HOUSING CONSERVATION AND EFFICIENCY GRANT PROGRAMS.
 (a) IN GENERAL- The Secretary shall make available 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--
 (A) owned and occupied by low-income families who have received, are
 currently receiving, or are scheduled to receive 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 measures to protect such energy investments;
 (2) repairs that will significantly prolong the habitability of units
 identified under paragraph (1), including roofing, electrical, plumbing,
 furnace, and foundation repairs or replacement that will prolong the use of
 the unit as a safe and energy-efficient residence for low-income persons; and
 (3) reasonable steps to ensure that any units so repaired will remain
 occupied by persons or families eligible for assistance under this title.
SEC. 258. SECOND MORTGAGE ASSISTANCE FOR FIRST-TIME HOMEBUYERS.
 (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 payment of interest and principal to first-time homebuyers.
 (b) HOMEOWNERSHIP COUNSELING- The program under this section shall provide
 for homeownership counseling to first-time homebuyers assisted, which
 shall include--
 (1) counseling before and after purchase of the property;
 (2) assisting first-time homebuyers in identifying the most suitable and
 affordable properties;
 (3) providing homebuyers with financial management assistance;
 (4) assisting homebuyers in understanding mortgage transactions and home
 sales contracts; and
 (5) assisting homebuyers with eliminating any credit problems that may
 prevent the homebuyers from purchasing the property.
 (c) ELIGIBILITY REQUIREMENTS- Deferred payment 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 homebuyer; and
 (3) the principal obligation of the deferred payment 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 payment 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 acquisition 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.
 (3) REPAYMENT PERIOD- A deferred payment 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 payment 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.
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 local 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
SEC. 271. REPORT ON CREDIT ENHANCEMENT.
 (a) IN GENERAL- The Comptroller General 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 agencies, agencies of the United States, government-sponsored
 mortgage finance corporations, for-profit and nonprofit housing developers,
 private financial institutions, and sources of long-term mortgage 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 Development 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 jurisdictions, in coordination with other forms of
 assistance under this subtitle;
 (B) the Department 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;
 (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 mortgage 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.
 (a) SOLICITATION OF CONTRACTS- Each participating jurisdiction shall prescribe
 procedures acceptable to the Secretary to establish and oversee a minority
 outreach program within each such jurisdiction 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 determine to be appropriate to carry out the purposes of such subsection.
SEC. 282. NONDISCRIMINATION.
 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.
 (a) INDEPENDENT AUDITS- The Secretary, except as provided in paragraph
 (b)(1), 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
 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 PROGRAM- The Comptroller
 General, when the Comptroller General 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 Partnerships program for any fiscal year. The initiation
 of an audit for a fiscal year under the previous sentence shall 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 Secretary and the Congress and shall be published.
 (2) AUDITS OF RECIPIENTS- The financial transactions of participating
 jurisdictions and of other recipients of funds provided 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
 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 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 and establish uniform
 recordkeeping, performance reporting, and auditing requirements for use by
 participating jurisdictions.
 (b) 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 section 281(a) and such recommendations
 for administrative and legislative 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 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 receives no
 compensation or is paid expenses, reasonable benefits, or a nominal fee to
 perform the services for which the individual volunteered and such persons
 are not otherwise employed at any time in the construction work.
SEC. 287. INTERSTATE AGREEMENTS.
 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 assistance 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.
 (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 regulations 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 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 certification which meets the requirements
 of subsection (c). The Secretary'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
 releases of funds for projects to be carried out pursuant thereto which
 are covered by such certification.
 (c) CERTIFICATION- A certification under the procedures authorized 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 regulations of
 the Secretary,
 (3) specify that the recipient of assistance under this title has fully
 carried out its responsibilities as described under subsection (a), and
 (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.
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(e)(2) 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 as provided in paragraph (2), effective 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.
TITLE III--HOMEOWNERSHIP
Subtitle A--National Homeownership Trust Demonstration
SEC. 301. SHORT TITLE.
 This subtitle may be cited as the `National Homeownership Trust Act'.
SEC. 302. NATIONAL HOMEOWNERSHIP TRUST.
 (a) ESTABLISHMENT- There is established the National Homeownership Trust,
 which shall be in the Department of Housing and 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 (12 U.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 Government 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 executive 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.
SEC. 303. ASSISTANCE FOR FIRST-TIME HOMEBUYERS.
 (a) IN GENERAL- The Trust shall provide assistance payments for first-time
 homebuyers (including homebuyers buying shares in limited equity cooperatives)
 in the following manners:
 (1) INTEREST RATE BUYDOWNS- Assistance payments so that the rate of interest
 payable on the mortgages by the homebuyers does not exceed 6 percent.
 (2) DOWNPAYMENT ASSISTANCE- Assistance payments to provide amounts for
 downpayments (including closing costs and other costs payable at the time
 of closing) on mortgages for such homebuyers.
 (b) ELIGIBILITY REQUIREMENTS- Assistance payments under this subtitle may be
 made only to homebuyers and for mortgages meeting the following requirements:
 (1) FIRST-TIME HOMEBUYER- The homebuyer is an individual who--
 (A) (and whose spouse) has had no ownership in a principal residence
 during the 3-year period ending on the date of purchase of the property
 with respect to which assistance payments 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 metropolitan 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 payments under this subtitle and
shall provide for recertification of homebuyers (and families of homebuyers)
so assisted not less than every 2 years thereafter.
 (3) CERTIFICATION- The homebuyer (and spouse, where applicable) 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 mortgage is a single-family
 residence or unit in a cooperative and is the principal residence of the
 homebuyer.
 (5) MAXIMUM MORTGAGE AMOUNT- The principal obligation of the mortgage does
 not exceed the principal 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 (a)(2), 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 payment
 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 assistance 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 Directors
 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 (b)(2) for
 any 2-year period after such assistance is provided, the Board of Directors
 may provide for the repayment, on a monthly basis, of all 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 RESIDENCE- If the property
 for which assistance payments 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 homebuyers in each State for such
 assistance in comparison with the need of eligible first-time homebuyers
 for such assistance among all States.
SEC. 304. NATIONAL HOMEOWNERSHIP TRUST FUND.
 (a) ESTABLISHMENT- 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 carrying out this subtitle;
 (2) any amount received by the Trust as repayment for payments 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 carrying 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 agency 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 programs 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 technical assistance to neighborhood community development
 corporations.
 (4) In other areas, as the Secretary may determine.
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 302(b).
 (2) DISPLACED HOMEMAKER- 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.
 (3) FUND- The term `Fund' means the National Homeownership Trust Fund
 established in section 304.
 (4) SINGLE PARENT- The term `single parent' means an individual who--
 (A) is unmarried or legally separated from a spouse; and
 (B)(i) has 1 or more minor children for whom the individual 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.
 The Board of Directors shall issue any regulations necessary to carry out
 this subtitle.
SEC. 307. REPORT.
 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.
 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.
 (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 as may be necessary to provide for the
 conclusion of the outstanding affairs of the Trust.
 (b) APPLICABILITY 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 amounts 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.
 The Trust shall terminate on September 30, 1993.
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 program established by the Secretary) may contract with
 an appraiser 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 supervision 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 qualifications 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 employing 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(b)(2))
 is amended by striking `150 percent (185 percent until October 31, 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(b)(2)) is
 amended by adding at the end the following new undesignated paragraph:
 `Notwithstanding any other provision of this paragraph, a mortgage may not
 involve a principal obligation (including such initial service charges,
 appraisal, inspection, and other fees as the Secretary 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 principal 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 balance 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 appraised value of the property (as of the date the mortgage is
 accepted for insurance), for the first 11 years of the mortgage 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 percent of such value, for the first 30 years of the mortgage term;
 except that notwithstanding the matter preceding clause (i), for any mortgage
 involving an original principal obligation (excluding any premium collected
 under 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 (excluding the portion of the remaining balance attributable to the
 premium collected under subparagraph (A) and without taking into account
 delinquent payments or prepayments).'.
 (b) 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 premium payment 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 subparagraph (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 attributable to the
 premium collected under subparagraph (A) and without taking into account
 delinquent payments or prepayments), for any mortgage involving an original
 principal 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 mortgages 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 premium payment 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 subparagraph (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 attributable to the
 premium collected under subparagraph (A) and without taking into account
 delinquent payments or prepayments), for any mortgage involving an original
 principal 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;
 (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 premiums 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 secondary residences, the Secretary may not insure
 mortgages with respect to such residences unless the Secretary determines
 that it is necessary 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) APPLICABILITY- The amendments made by subsection (a) shall apply only
 with respect to--
 (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 appraisal 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 mortgagor was
 subject to such amendments.
 (c) TRANSITION PROVISIONS- Any mortgage insurance provided under title
 II of the National Housing Act before the expiration of 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.'.
SEC. 328. DELEGATION OF PROCESSING.
 (a) AUTHORITY- Not later than the expiration of the 60-day period beginning
 on the date of enactment this Act, the Secretary of Housing and Urban
 Development shall implement a system of mortgage insurance for mortgages
 insured under section 207, 221, 223, 232, or 241 of the National Housing Act
 that delegates processing functions to selected approved mortgagees. Under
 such system, the Secretary shall retain the authority to approve rents,
 expenses, property appraisals, and mortgage 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)(1) 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 principal 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
 prepayment. This paragraph shall apply to any insured mortgage outstanding
 on or after the expiration of the 90-day period beginning on the date of
 effectiveness 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
 prepayment. This paragraph shall apply to any mortgage 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:
 `(t)(1) 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 insured 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--
 `(A) the term `area' shall have the meaning given the term under subsection
 (b)(2);
 `(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 `mortgage 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:
`EXAMINATIONS AND SANCTIONS FOR CERTAIN VIOLATIONS
 `SEC. 539. (a) EXAMINATIONS AND SANCTIONS-
 `(1) In connection with any examination of a mortgagee 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(a)(7)(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
 publish in the Federal Register the disposition of any case referred by the
 Secretary to the Mortgagee Review Board. Such procedures shall be established
 by regulation under section 553 of title 5, United States Code. The Secretary
 shall issue regulations 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 annually, a
 report regarding any actions taken to carry out this section. The report
 shall include a list of all requests filed pursuant 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 type 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.'.
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.
 `(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 Secretary 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 outstanding 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 estimated by the Secretary.
 `(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 Secretary 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.
 `(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:
`INSURANCE OF MORTGAGES ON PROPERTY IN ALASKA, GUAM, HAWAII, AND THE VIRGIN
ISLANDS'.
SEC. 334. HOME EQUITY CONVERSION MORTGAGE INSURANCE DEMONSTRATION.
 (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 payment 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 and based upon a
 line of credit; or
 `(F) on any other basis that the Secretary considers appropriate; and
 `(10) provide that the mortgagor may convert the method of payment 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 LIABILITY OF MORTGAGOR- Section 255(d)(7) 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 sales 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 LIABILITY OF MORTGAGOR- 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: `informing 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 average 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
 `SEC. 540. (a) IN GENERAL- The Secretary of Housing and Urban 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 subsection (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
 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 insured 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 originated 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 foreclosures on insured
 mortgages 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 defaults 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 originated 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 Congress 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 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 statistical area, as defined
 pursuant to regulations issued by the Secretary of Commerce.'.
 (b) AVAILABILITY OF INFORMATION DURING TRANSITION- During 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 publicly available all reports regarding Default/Claim Rates per
 Regional 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. 1715l(g)(4))
 is amended by adding after subparagraph (B) the following new subparagraph:
 `(C)(i) 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 beneficial interests in the mortgage loan through an auction
 and sale of the (I) mortgage loans, or (II) participation 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).
 `(ii)(I) The Secretary shall conduct a public auction to determine the lowest
 interest rate necessary to accomplish a sale of the beneficial 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
 and persons bidding at the auction a description of the characteristics of
 the original credit instrument and mortgage securing the original credit
 instrument, which shall include the principal mortgage balance, original
 stated interest rate, service fees, real estate and tenant characteristics,
 the level and duration of applicable Federal subsidies, and any other
 information determined 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 subsequent 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 subsequent 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 prepayment rights.
 `(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 auction. 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 Secretary shall accept the
 lowest interest rate bid for purchase that the Secretary determines to be
 acceptable. The Secretary shall cause the accepted bid to be published in
 the Federal Register. Settlement for the sale of the credit instrument 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 require
 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 payment 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 appropriate) for the then unpaid principal
 balance plus accrued interest at a rate determined by the Secretary. Each
 interest subsidy payment 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 Federal Housing Administration.
 `(iv) The Secretary 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 Secretary shall encourage State housing
 finance agencies, nonprofit organizations, and organizations representing
 the tenants of the property securing the mortgage, or a qualified mortgagee
 participating 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 implementing
 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 revised agreement entered into pursuant to the Emergency
 Low Income Housing Preservation Act of 1987 or subsequent 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 (beginning in 1992), the Secretary shall submit
 to the Congress a report including statements of the number of mortgages
 auctioned and sold and their value, the amount of subsidies committed
 to the program under this subparagraph, the ability of the Secretary to
 coordinate the program with the incentives provided under the Emergency Low
 Income Housing Preservation Act of 1987 or subsequent Act, and the costs
 and benefits derived from the program for the Federal Government.'.
SEC. 337. DISAPPROVAL OF REGULATIONS REGARDING PROPERTY DISPOSITION.
 Section 291.1(c)(2) and section 291.100(b) (1) and (2) of the rule of
 the Department of Housing and Urban Development entitled `Disposition 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 Development may not publish a final rule
 containing or based on such provision and may not otherwise implement such
 provision of such rule.
SEC. 338. REPORT REGARDING FORECLOSED PROPERTIES.
 (a) IN GENERAL- Before the expiration of the 60-day 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 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, paying 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, nonprofit 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 authorities, and community housing
 development organizations to work with eligible families to purchase these
 homes and suggestions for mechanisms to facilitate the efforts. The report
 shall also include recommendations for (A) evaluating the rehabilitation
 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 properties 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 assistance
 that may be provided to such homebuyers to foster purchase.
SEC. 339. LIMITATION ON GNMA GUARANTEES OF MORTGAGE-BACKED SECURITIES.
 Section 306(g)(2) 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 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.
 (b) 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 following new subparagraph:
 `(A)(i) $25,000 if made for the purpose of financing alterations, 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 average 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) APPLICABILITY- The amendments made by this subsection shall apply to
 loans executed on or after June 1, 1991.
 (c) LOAN TERM- Section 2(b)(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:
 `(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 subparagraph (B), by striking `fifteen years' and inserting `twenty
 years'.
Subtitle C--Effective Date
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 applicability contained in such sections.
TITLE IV--HOMEOWNERSHIP AND OPPORTUNITY FOR PEOPLE EVERYWHERE PROGRAMS
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
`SEC. 301. PROGRAM AUTHORITY.
 `(a) IN GENERAL- The Secretary is authorized to make--
 `(1) planning grants to help applicants to develop homeownership programs
 in accordance with this title; and
 `(2) implementation grants to carry out homeownership programs 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 assistance
 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.
 `(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.
 `(a) GRANTS- The Secretary is authorized to make planning 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 activities to
 develop homeownership programs (which may include programs 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) 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, specifying the activities 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 composition of the tenants,
 including family size and income;
 `(D) 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
 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 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, 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.
`SEC. 303. 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 title.
 `(b) ELIGIBLE ACTIVITIES- Implementation grants may be used for activities
 to carry out homeownership programs (including programs 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, including 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 homeownership 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 costs 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.
 `(11) Legal fees.
 `(12) Defraying costs for the ongoing training needs of the recipient that
 are related to developing and carrying 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 contributions equal to not
 less than 25 percent of the grant amount made available under this section,
 excluding any amounts provided 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 of--
 `(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) 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, foregone, or deferred in a manner that
 facilitates the implementation 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 infrastructure 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 implementation 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 section 8 of this
 Act, which shall specify 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 housing for low-income families;
 `(D) a description of the proposed homeownership program, consistent with
 section 304 and the other requirements of this title, which shall specify the
 activities proposed to be carried out and their estimated costs, identifying
 reasonable schedules for carrying it out, and demonstrating 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 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 proposed 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 determination, and terms to the
 applicant;
 `(I) the estimated 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 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
 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 homeownership 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;
 `(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 affordability 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 105(b)(7) of the Cranston-Gonzalez 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 type 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 Secretary 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 application, 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 appropriations in subsequent fiscal years.
`SEC. 304. HOMEOWNERSHIP PROGRAM REQUIREMENTS.
 `(a) IN GENERAL- A homeownership program under this title shall provide
 for acquisition by eligible families of ownership interests 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 (including limited equity cooperative ownership)
 and fee simple ownership (including condominium ownership), for occupancy
 by the eligible families.
 `(b) AFFORDABILITY- A homeownership program under this title shall provide
 for the establishment of sales prices (including principal, 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 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 project;
 `(4) providing ongoing training and counseling for homebuyers 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 rehabilitation 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) any rehabilitation, and (B) acquisition (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 housing 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 financing in connection
 with a homeownership program under this subtitle shall give the public
 housing agency, resident management 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 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 transferred. 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(n)(1);
 `(3) the use of 5-year, tenant-based rental assistance under section 8(b)(2)
 and section 8(o)(9);
 `(4) the use of a State or local 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 corporation, 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 contribution 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 implementation 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 recipient will pay relocation
 assistance in accordance with the approved homeownership program.
 `(4) OTHER RIGHTS- Tenants renting a unit in a project transferred under
 this title shall have all rights provided to tenants of public housing
 under this Act.
`SEC. 305. OTHER PROGRAM REQUIREMENTS.
 `(a) SALE BY PUBLIC 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 shall transfer the project to such other applicant,
 in accordance with the approved homeownership program.
 `(b) PREFERENCES- In selecting eligible families for homeownership, 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) COST LIMITATIONS- The Secretary may establish cost limitations 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 ELIGIBLE 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 units 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 homeowner 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 agency or the implementation grant recipient 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 program 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--
 `(A) the contribution to equity paid by the family;
 `(B) the value, as 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, 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 homeowner 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 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. 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 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 successors 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 available under sections 302 and
 303 may be used for economic development activities under sections 302(b)(6)
 and 303(b)(9) for any project.
 `(j) 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 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 families. 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 management
 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.
 `(l) 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 title (and any proceeds
 from financing obtained in accordance with subsection (b) or sales under
 subsections (f) and (g)(4)), 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 pertinent 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
 pertinent to assistance received under this title.
`SEC. 306. DEFINITIONS.
 `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 housing authority).
 `(B) A resident management corporation, established in accordance with
 requirements of the Secretary under section 20.
 `(C) A resident council.
 `(D) A cooperative association.
 `(E) A public or private nonprofit organization.
 `(F) A public body, including an agency or instrumentality 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 approves an implementation grant;
 `(B) a low-income family; or
 `(C) a family or individual who is assisted under a housing program
 administered by the Secretary or the Secretary of Agriculture (not including
 any non-low income families assisted under any mortgage insurance program
 administered 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 nonprofit 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 establishing criteria for selecting applicants to receive assistance
 under this title, the Secretary may not establish any selection 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. 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 characteristics of
 families participating (or not participating) in homeownership programs
 funded under this title;
 `(3) the amount and type of financial assistance 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 Secretary for statutory and regulatory
 improvements to the program.'.
SEC. 412. AMENDMENT TO SECTION 18 REGARDING DEMOLITION AND DISPOSITION OF
PUBLIC HOUSING.
 (a) OPPORTUNITY TO PURCHASE- Section 18(b)(1) of the United States Housing
 Act of 1937 (42 U.S.C. 1437p(b)(1)) is amended by striking `disposition'
 and inserting the following: `disposition, and the tenant councils, resident
 management corporation, and tenant cooperative, if any, have been given
 appropriate opportunities to purchase the project or portion of the project
 covered by the application,'.
 (b) APPLICABILITY- 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) ELIGIBILITY- The first sentence of section 8(o)(3) of the United States
 Housing Act of 1937 (42 U.S.C. 1437f(o)(3)) 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-Gonzalez
 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 agencies 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. 1437l)
 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 FINANCIAL 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 paragraph:
 `(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.'.
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 inserting the following
 new subparagraph:
 `(B) The Secretary may provide financial assistance to public housing
 agencies, resident management corporations, or resident councils that
 obtain, by contract or otherwise, training, technical assistance, and
 educational assistance as the Secretary determines to be necessary to
 promote homeownership opportunities under this section.';
 (2) in paragraph (2)(C), 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 assistance 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 (3)(C), 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 contained 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 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, United States Code. The Secretary shall issue regulations based on the
 initial notice before the expiration of the 8-month period beginning on
 the date of the notice.
SEC. 419. APPLICABILITY TO INDIAN PUBLIC HOUSING.
 In accordance with section 201(b)(2) 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 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
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 authority 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 implementation 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 appropriated pursuant to
 this subsection shall remain available until expended.
SEC. 422. PLANNING GRANTS.
 (a) GRANTS- The Secretary is authorized to make planning grants to applicants
 for the purpose of developing homeownership programs 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 ACTIVITIES- Planning grants may be used for activities to
 develop homeownership programs (which may include programs for cooperative
 ownership), including--
 (1) development of resident management corporations and resident councils;
 (2) training and technical 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) 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, specifying the activities 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 tenants, including family size
 and income;
 (D) 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
 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 appropriate); 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, 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 purposes of carrying 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 programs 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 homeownership 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 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) Defraying costs for the ongoing training needs of the recipient that
 are related to developing and carrying 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 contributions equal to not
 less than 33 percent of the grant amounts made available under this section,
 excluding any amounts provided 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) 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, foregone, or deferred in a manner that
 facilitates the implementation 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 infrastructure 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 implementation 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 section 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 program, consistent with
 section 324 and the other requirements of this subtitle, specifying the
 activities proposed to be carried out and their estimated costs, identifying
 reasonable 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 involved, 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 proposed 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 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
 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 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.
 (d) SELECTION CRITERIA- The Secretary shall establish selection criteria
 for assistance under this section, which shall include--
 (1) the qualifications or potential capabilities of the applicant;
 (2) the feasibility of the homeownership program;
 (3) the extent of tenant 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 type 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; and
 (7) such other factors as the Secretary determines to be appropriate for
 purposes of carrying out the program established 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 application, 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 approved, subject to the availability of
 appropriations in subsequent fiscal years.
SEC. 424. HOMEOWNERSHIP PROGRAM REQUIREMENTS.
 (a) IN GENERAL- A homeownership program under this subtitle shall provide
 for acquisition by eligible families of ownership interest in, or shares
 representing, the 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) AFFORDABILITY- A homeownership program under this subtitle 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) 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 LIMITATION- Acquisition or rehabilitation
 of a property under a homeownership program under this subtitle may not
 consist of acquisition or rehabilitation of less than all of the units
 in the property. 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) any rehabilitation, and (B) acquisition (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 housing 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 subtitle.
 (3) OPPORTUNITY TO CURE- Any lender that provides financing in connection
 with a homeownership program under this subtitle shall give the public
 housing agency, resident management 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 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 recipient will pay relocation
 assistance in accordance with the approved homeownership program.
SEC. 425. OTHER PROGRAM REQUIREMENTS.
 (a) PREFERENCES- In selecting eligible families for homeownership, 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 limitations on eligible
 activities under this subtitle, subject to the provisions of this subtitle.
 (c) USE OF PROCEEDS FROM SALES TO ELIGIBLE 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.
 (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 units 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 homeowner 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 agency or the implementation grant recipient 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 program 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--
 (A) the contribution to equity paid by the family;
 (B) the value, as 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, 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 homeowner 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 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. 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 payments 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 successors 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 available under sections 422 and
 423 may be used for economic development activities under sections 422(b)(6)
 and 423(b)(9) 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 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 families. 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 pertinent 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
 pertinent to assistance received under this subtitle.
 (i) CERTAIN ENTITIES NOT ELIGIBLE- 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 requirement 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 basis.
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;
 (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(b)(11) of the United States Housing Act of 1937.
 (6) The term `low-income family' has the meaning given such term in section
 3(b)(2) of the United States Housing Act of 1937.
 (7) The term `public housing agency' has the meaning given such term in
 section 3(b)(6) 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 assume the obligations of the recipient under this subtitle.
 (9) The term `resident council' means any incorporated nonprofit 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 assistance under
 this subtitle, the Secretary may not establish any selection 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(b)(9) of the National Housing Act (12 U.S.C. 1709(b)(9))
 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,'.
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, United States Code. The Secretary shall
 issue regulations based on the initial notice before the expiration of the
 8-month period beginning on the date of the notice.
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 subtitle;
 (2) the income, race, gender, children and other characteristics 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
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.
 (b) 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.
SEC. 442. PLANNING GRANTS.
 (a) GRANTS- The Secretary is authorized to make planning grants to applicants
 for the purpose of developing homeownership programs 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 ACTIVITIES- Planning grants may be used for activities to
 develop homeownership programs (which may include programs 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;
 (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, specifying the activities 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 and income;
 (D) 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
 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 appropriate); 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, 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 homeownership program;
 (3) the potential of the applicant for developing a successful and affordable
 homeownership program and the availability and suitability of eligible
 properties in the applicable geographic 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 purposes of carrying out
 the program established by this subtitle in an effective and efficient manner.
SEC. 443. 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 (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 homeownership program meeting
 the requirements of this subtitle.
 (3) Rehabilitation of the property covered by the homeownership 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) Defraying 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 contributions 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, foregone, 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 infrastructure required
 for a homeownership program assisted under this subtitle; or
 (E) 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 implementation 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) a description of the qualifications and experience of the applicant in
 providing low-income housing;
 (C) a description of the proposed homeownership program, consistent with
 section 444 and the other requirements of this subtitle specifying the
 activities proposed to be carried out and their estimated costs, identifying
 reasonable schedules for carrying it out, and demonstrating that the program
 will comply with the affordability requirements 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 program;
 (F) identification and description of the financing proposed for any (i)
 rehabilitation and (ii) acquisition (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;
 (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 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
 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 appropriate); 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 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
 types 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(b)(7) 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 application, whether the
 application is approved or not approved.
SEC. 444. HOMEOWNERSHIP PROGRAM REQUIREMENTS.
 (a) IN GENERAL- A homeownership program under this subtitle shall provide
 for acquisition by eligible families of ownership interests 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) AFFORDABILITY- A homeownership program under this subtitle 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) ELIGIBLE 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 Secretary) 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;
 (2) providing relocation assistance to families who elect to move; and
 (3) ensuring continued affordability of the property to homebuyers 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.
 (a) COST LIMITATIONS- The Secretary may establish cost limitations on eligible
 activities under this subtitle, subject to the provisions of this subtitle.
 (b) USE OF PROCEEDS FROM SALES TO ELIGIBLE FAMILIES- 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 families, 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 units 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 homeowner 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 agency or the implementation grant recipient 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 program 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--
 (A) the contribution to equity paid by the family;
 (B) the value, as 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, 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 homeowner 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 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. 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 payments 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 successors 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.
 (e) PROTECTION OF NONPURCHASING FAMILIES- 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 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 (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 pertinent 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
 pertinent to assistance received under this subtitle.
SEC. 446. DEFINITIONS.
 For purposes of this subtitle:
 (1) The term `applicant' means a private nonprofit organization, 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 property, containing no
 more than four units, that is owned or held by the Secretary, the Secretary
 of Veterans Affairs, the Secretary 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 scattered
 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)(11) of the United States Housing Act of 1937.
 (8) The term `low-income family' has the meaning given such term in section
 3(b)(2) of the United States Housing Act of 1937.
 (9) The term `public housing agency' has the meaning given such term in
 section 3(b)(6) 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.
 (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
 (B)(i) has 1 or more minor children for whom the individual has custody or
 joint custody; or
 (ii) is pregnant.
SEC. 447. LIMITATION ON SELECTION CRITERIA.
 In establishing criteria for selecting applicants to receive assistance under
 this subtitle, the Secretary may not establish any selection 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. 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 requirements as may be necessary
 to carry out the provisions of this subtitle. 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 the
 8-month period beginning on the date of the notice.
TITLE V--HOUSING ASSISTANCE
Subtitle A--Public and Indian Housing
SEC. 501. PREFERENCE RULES.
 Section 6(c)(4)(A) of the United States Housing Act of 1937 (42
 U.S.C. 1437d(c)(4)(A)) 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 subparagraph 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 Stewart B. McKinney Homeless Assistance Act, or participate
 in a program designed to provide public assistance recipients with greater
 access to employment and educational opportunities; (II) assisting families
 in accordance with subsection (u)(2); (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 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. 502. REFORM OF PUBLIC HOUSING MANAGEMENT.
 (a) PERFORMANCE INDICATORS FOR PUBLIC 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:
 `(j)(1) The Secretary shall develop and publish in the Federal Register
 indicators to assess the management performance 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 Secretary 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 and unit sizes).
 `(E) The average period of time that an agency requires to repair and
 turn-around vacant units.
 `(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 agency fails to inspect to ascertain
 maintenance or modernization needs within such period of time as the
 Secretary deems appropriate (with appropriate 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 officials (as the Secretary
 determines appropriate), identify and commend 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 agency (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.
 `(B) The Secretary shall seek to enter into an agreement with 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 description 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
carrying out the agreement.
 `(3)(A) Notwithstanding any other provision of law or of any contract for
 contributions, upon the occurrence of events or conditions 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 eventuality 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 corporation) 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 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 acceptable to the
 Secretary and in the best interests of the public housing residents for
 managing all, or part of, such housing.
 `(B) In any proceeding under subparagraph (A)(ii), upon a determination that
 a substantial default has occurred, and without regard to the availability
 of alternative remedies, the court shall appoint a receiver to conduct
 the affairs 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
 preliminary 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 Department 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;
 `(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 designated as
 troubled with respect to the program under section 14 and specifies the
 amount of assistance the agency received under section 14 and any credits
 accumulated by the agency under section 14(k)(5)(D).'.
 (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 and 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(c)(4) of the United States Housing Act of 1937
 (42 U.S.C. 1437d(c)(4)) 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 maintenance 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 submitted to the appropriate local
 public official (as determined 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 enactment of this Act,
 the Secretary of Housing and Urban Development 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(j)(1) 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 determine whether to--
 (A) petition for the appointment of a receiver for the Buffalo Municipal
 Housing Authority under the provisions of section 6(j)(3) 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 tenancy that
involves any criminal activity that threatens the health, safety, or right
to peaceful enjoyment 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 as
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 shall establish 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.'.
 (b) LEASES- Section 6(1) of the United States Housing Act of 1937 (42
 U.S.C. 1437d(1)) 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 hearing 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 Development 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 implementing the amendments not later than the expiration
 of the 180-day period beginning on the date of the enactment of this Act.
 (d) APPLICABILITY- Any exclusion of grievances by a public housing 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 TENANCY IN PUBLIC
HOUSING.
 Section 6(l)(5) of the Housing Act of 1937 (42 U.S.C. 1437d(l)(5)) 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 amended by
 adding at the end the following new subsection:
 `(o) Subject to the preference rules specified in subsection (c)(4)(A),
 in providing housing in low-income housing projects, each public housing
 agency may coordinate with any local public agencies involved in providing
 for the welfare of children to make available dwelling units to--
 `(1) families identified by the agencies as having a lack of adequate
 housing that 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 ELIGIBLE COST- Section 9(a) of the United
 States Housing Act of 1937 (42 U.S.C. 1437g(a)) is amended--
 (1) in paragraph (1)--
 (A) by inserting `(A)' after the paragraph designation;
 (B) in the second sentence, by redesignating clauses (A), (B), and (C)
 as clauses (i), (ii), and (iii), respectively; and
 (C) by adding at the end the following new subparagraph:
 `(B) Annual contributions under this section to any public housing 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 disabilities 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, housekeeping 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 subparagraph, 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-Gonzalez National Affordable Housing Act'; and
 (2) in paragraph (3), by inserting before the first comma the following:
 `(except for payments under paragraph (1)(B))'.
SEC. 508. COOLING DEGREE DAY ADJUSTMENT UNDER PERFORMANCE FUNDING SYSTEM.
 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. 1437l(k)) is amended to read as follows:
 `(k)(1) From amounts approved in appropriation Acts for grants under this
 section for fiscal year 1992 and each fiscal year thereafter, and to the
 extent provided by such Acts, the Secretary shall reserve not more than
 $75,000,000 (including unused amounts reserved 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 assistance
 under paragraph (2), where available.
 `(2)(A) After determining the amounts to be reserved under paragraphs (1) and
 (5)(D)(iv), the Secretary shall allocate the amount remaining pursuant to a
 formula contained in a regulation prescribed 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 (e)(1)(A)(ii)(I)) and State
 and local 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, community, 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;
 `(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 regarding the backlog
needs of public housing agencies under this subparagraph, except by rule as
provided under section 553 of title 5, United States Code.
 `(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 (B)(i)
 (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 subparagraph (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;
 `(II) 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 regarding the accrual
needs of public housing agencies under this subparagraph, except by rule as
provided under section 553 of title 5, United States Code.
 `(D)(i) 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 contract, 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.
 `(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 subparagraphs
 (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 subsection (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)(A)(i), 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 determined under
 clause (i) and the amount that would be allocated to the agency in such
 fiscal year if the agency were not designated 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 subparagraph shall be based on the agency's progress
 toward meeting the performance indicators under section 6(j)(1). 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
 agency 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 subparagraph
 to provide agencies that receive allocations under subparagraph (A) with
 additional assistance 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 designation. The credit system shall be subject to the
 following requirements:
 `(i) Any agency that receives assistance pursuant to subparagraph (A)
 for any fiscal year shall receive credits for the difference between the
 amount that the agency would have been allocated in such year if it were
 not designated a troubled agency and the amount allocated for the agency
 for such year under subparagraph (A).
 `(ii) An agency may not receive credits under this subparagraph 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 accumulated 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 original total accumulated
 credits if the designation as a troubled agency 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 (2)(A) the
 amount necessary to provide 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 payments 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.
 `(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 designation of troubled
 agencies under section 6(j)(2)(A)(i). 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 designation 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 (2)(A).
 `(7) A public housing agency may appeal the amount of its allocation
 determined under the formula on the basis of unique circumstances or on the
 basis that the objectively measurable data 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 paragraph (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. 1437l) is amended--
 (A) in subsection (e)(3)(A), 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 housing agency that owns or operates fewer
 than 500 public housing dwelling units'; and
 (ii) in paragraph (2), by striking `or (e)'.
 (b) REMOVAL OF CERTAIN REQUIREMENTS FOR AGENCIES WITH FEWER THAN 500
 UNITS- Section 14(d)(4) of the United States Housing Act of 1937 (42
 U.S.C. 1437l(d)(4)) 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. 1437l) is amended--
 (1) in subsection (f)(2)(B), by striking `and to meet special purpose needs
 described in section 14(i)(1)(D)'; and
 (2) in the first sentence of subsection (i)(1), by striking `In addition'
 and all that follows through the third comma and inserting the following:
 `In addition to assistance made available 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 subsection
 (c), (d), (f), (g), or (h),'.
 (d) SPECIAL PURPOSE MANAGEMENT MODERNIZATION FOR AGENCIES WITH FEWER THAN
 500 UNITS- Section 14(i)(1) of the United States Housing Act of 1937 (42
 U.S.C. 1437l(i)(1))  is amended--
 (1) in subparagraph (C), by striking `or' at the end;
 (2) in subparagraph (D)(ii), 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) ESTABLISHMENT OF 250-UNIT THRESHOLD BEGINNING IN FISCAL YEAR 1993-
 (1) IN GENERAL- Effective October 1, 1992, section 14 of the United States
 Housing Act of 1937 (42 U.S.C. 1437l), as amended by this section, is further
 amended by striking `500' and inserting `250' in each of the following places:
 (A) The first sentence of subsection (d).
 (B) In subsection (e), the first sentence of each of paragraphs (1), (3)(A),
 (4)(A) and (4)(C).
 (C) Subsections (f)(1) and (f)(2).
 (D) Subsection (h).
 (E) The first sentence of subsection (i)(1).
 (F) In subsection (k), in paragraphs (2)(B)(i), (2)(B)(ii), (2)(C)(i),
 (2)(C)(ii), (3), (4), (5)(B), and (6).
 (G) Subsection (l)(2).
 (2) EXCEPTION- Effective October 1, 1992, section 14(k)(2)(D)(i) of the
 United States Housing Act of 1937 (42 U.S.C. 1437l(k)(2)(D)(i)) , 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. 1437l), 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
 determines to be appropriate.'.
 (g) SECTION HEADING- The section heading of section 14 of the United States
 Housing Act of 1937 (42 U.S.C. 1437l) is amended to read as follows:
`PUBLIC AND INDIAN HOUSING MODERNIZATION'.
 (h) REGULATIONS-
 (1) IN GENERAL- The Secretary of Housing and Urban Development 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 agencies, 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(k)(2);
 (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 alternative formulas, identifying the
 weights assigned to the various criteria under the formulas, and explaining
 the differences in operation and objectives of the alternative formulas.
 (i) REPORTS TO CONGRESS-
 (1) INDEPENDENT EVALUATION--The Secretary of Housing and Urban Development
 shall enter into a contract providing for 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 Secretary determines are appropriate to take
 into account the relative needs of public housing agencies for assistance to
 carry out lead-based paint testing and abatement activities. The Secretary
 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. 1437l), as amended by the preceding provisions of this Act,
 is further amended by adding at the end the following new subsection:
 `(p)(1) 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 taken 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,
 demolition, and disposition activities that have been funded or approved,
 (E) identifying any vacant dwelling units that are eligible for comprehensive
 modernization, major reconstruction, demolition, or disposition 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 recommended by the assessment team pursuant to
 paragraph (3)(C)) during the first fiscal year beginning after submission
 of the plan and including an estimate of the amount of assistance necessary
 to implement the improvements.
 `(3)(A) In cooperation with each agency participating in the program 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 representatives 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 assessment 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)(1).
 `(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 paragraph (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 families 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 Housing Act of
 1937 (42 U.S.C. 1437p(a)(2)(B)(i)) is amended by inserting before the first
 comma the following: `, which, in the case of 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'.
 (b) APPLICABILITY- 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 Development (in this
 subsection referred to as the `Secretary') shall carry out a program to
 demonstrate the effectiveness of replacing 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 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 provisions of section
 18(b)(3)(A) 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(b)(3)(B) of the United States Housing Act of 1937, the 5-year section 8
 assistance provided under this section may be tenant-based if such public
 housing authority shows, to the satisfaction of the Secretary, that an
 adequate supply of private rental housing affordable 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) APPLICABILITY 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(c)(2) of the United States Housing Act of 1937
 (42 U.S.C. 1437p(c)(2)) 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 subsection (b)(3); and
 `(B) specifying, by fiscal year, the budget authority required to carry
 out the commitments specified in subparagraph (A).'.
 (c) REPEALER- Section 18(c)(3) of the United States Housing Act of 1937
 (42 U.S.C 1437p(c)(3)) is repealed.
SEC. 514. PUBLIC HOUSING RESIDENT MANAGEMENT.
 Section 20(f)(3) of the United States Housing Act of 1937 (42
 U.S.C. 1437r(f)(3)) 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
 `SEC. 22. (a) PURPOSE- The purpose of this section is to provide families
 living in public housing with better access to educational and employment
 opportunities to achieve self-sufficiency and independence by--
 `(1) developing facilities in or near public housing for training and
 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 adjustments
 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;
 `(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 educational 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 subsection (e)(1) can be funded over the
 time period identified under such subsection;
 `(B) monitoring and evaluating the impact and effectiveness of any supportive
 service program receiving capital or operating assistance under this
 section; and
 `(V) performing 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 section shall be
 allocated by the Secretary among approvable applications submitted by public
 housing agencies.
 `(e) APPLICATIONS- 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 rehabilitation);
 `(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), including evidence of any
 intention to provide assistance expressed 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
 applying 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 (e)(1);
 `(2) the need for such services in the public housing project;
 `(3) the extent to which the envisioned renovation, conversion, and
 combination activities are appropriate to facilitate the provision of
 such services;
 `(4) the extent to which the public housing agency has demonstrated that such
 services will be provided for the period identified under subsection (e)(1);
 `(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 Secretary, 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 Congress annually,
 as a part of the report of the Secretary under section 8 of the Department
 of Housing and Urban Development 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 PUBLIC HOUSING RESIDENTS- Each public housing agency
 shall, to the maximum extent practicable, employ public housing residents to
 provide the services assisted under this 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(a)(1) of such Act applied to
 the resident and if the resident were not exempt under section 13 of such Act;
 `(2) the State or local minimum wage for the most nearly comparable covered
 employment; 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 housing resident
 under this section may be treated as income for the purpose of any other
 program or provision of State or Federal law.
 `(j) 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
 employment 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 fiscal 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 preceding 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 employment 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 of--
 `(i) the date the resident ceases to continue employment without good cause
 as the Secretary shall determine; 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 COMPREHENSIVE
IMPROVEMENT ASSISTANCE.
 Section 202(b) of the United States Housing Act of 1937 (42 U.S.C. 1437bb(b))
 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 CIAP- Notwithstanding the provisions of section
 14(c), the Secretary may provide assistance provided for 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 PROGRAM-
 (1) IN GENERAL- Section 222 of the Housing and Urban-Rural Recovery Act of
 1983 (12 U.S.C. 1701-6 note) is amended--
 (A) in subsection (a), by striking `child care services' each place it
 appears and inserting `early childhood development services';
 (B) in subsection (b)--
 (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 development 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 paragraph (2), by striking `child care services' and inserting
 `early childhood development services';
 (ii) in paragraph (3), in the matter preceding subparagraph (A), by striking
 `child care services program' and inserting `early childhood development
 program';
 (iii) in paragraph (3)(A), by striking `child care services' and inserting
 `early childhood development services'; and
 (iv) in paragraph (4), by striking `child care services' each place it
 appears and inserting `early childhood development services'; and
 (E) in subsection (e),  by striking `child care services' and inserting
 `early childhood development services'.
 (2) CONFORMING AMENDMENT- The section heading for section 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'.
SEC. 518. INDIAN PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT DEMONSTRATION
PROGRAM.
 (a) SET-ASIDE OF INDIAN PUBLIC 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 appropriations Acts) for carrying out a demonstration program
 under this section. Under the demonstration, the Secretary shall make grants
 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 authority 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 between 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 program under this section through various
 Indian housing authorities and provide for geographic distribution among
 such housing authorities.
 (d) REPORT-
 (1) IN GENERAL- Not later than the expiration of the 3-year 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 assisting 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.
 (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.
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 personnel (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 requirements 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 occupancy that the Secretary considers appropriate.
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 QUALIFIED 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 programs only with respect to public
 housing sites that the Secretary determines have a substantial problem
 regarding the use or sale of illegal drugs.
 (2) YOUTH SPORTS PROGRAM ELIGIBILITY- 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 activities, designed to appeal to youths
 as alternatives to the drug environment in the public housing project.
 (C) The sports program shall be operated as, in conjunction 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 expenses 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 amount provided by the grant.
 (2) NON-FEDERAL FUNDS- For purposes of this subsection, the term `funds
 from non-Federal sources' includes funds from States, units of general
 local governments, or agencies of such 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 any 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 designated 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 carrying out a youth sports
 program with respect to any single public housing project in an amount
 exceeding $125,000.
 (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 program 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 subsection (e)(1).
 (10) Any other information that the Secretary may require.
 (g) SELECTION CRITERIA- The Secretary shall select qualified entities 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, approaches, or ideas in the design or implementation
 of the program 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 resident management groups
 or associations (where such groups exist) and coordination of proposed
 activities with ongoing programs of the applicant that further the purposes
 of this section.
 (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 demonstrated 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(a)(17) of the Housing and Community Development Act of 1974.
 (2) PUBLIC 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) PUBLIC 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 subdivision of a State.
 (7) SECRETARY- The term `Secretary' means the Secretary of Housing and
 Urban Development.
 (j) REGULATIONS- The Secretary shall issue any regulations necessary 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 DEMONSTRATION.
 (a) ESTABLISHMENT OF DEMONSTRATION PROGRAM-
 (1) IN GENERAL- The Secretary of Housing and Urban Development, 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. Under
 the demonstration program, the Secretary shall make grants to not more than
 10 public housing agencies.
 (2) CONSULTATION REQUIREMENTS- In carrying out the demonstration program
 under this section, the Secretary shall consult with the heads of other
 appropriate Federal agencies.
 (b) 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 security will be provided so that women
 are safe when participating 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 pregnant 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) APPLICABLE 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 services 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 demonstration 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 education for pregnant women
 regarding perinatal care services, 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 infants (including measurement
 of weight) and referrals for health care services and related services
 and resources.
 (E) SOCIAL WORKER- Information and assistance regarding Federal and State
 social services provided by a social worker.
 (F) OTHER- Any other services to assist pregnant or new mothers.
 (2) PUBLIC 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 necessary to
 carry out this section.
 (g) AUTHORIZATION OF APPROPRIATIONS- Of any amounts approved in appropriations
 Acts under section 22(k) of the United States Housing Act of 1937 for fiscal
 year 1991, the Secretary shall use $150,000 (to the extent such amounts
 are approved in appropriations Acts) for carrying out the demonstration
 program under this section.
SEC. 522. PUBLIC HOUSING MIXED INCOME NEW COMMUNITIES STRATEGY DEMONSTRATION.
 (a) ESTABLISHMENT OF DEMONSTRATION PROGRAM-
 (1) IN GENERAL- The Secretary of Housing and Urban Development 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 development of new affordable
 housing in such communities.
 (2) COMPREHENSIVE SERVICES- Housing units provided under the demonstration
 program under this section shall be made available in connection with a
 comprehensive program of services and incentives under subsections (h) and
 (i), in order to prepare participating families for successful transition
 to the private rental housing market and homeownership within a reasonable
 period of time.
 (b) COORDINATING COMMITTEE-
 (1) ESTABLISHMENT- For a public housing agency to be eligible for designation
 or selection under subsection (d) for participation 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
 committee under this paragraph. The coordinating committee shall participate
 in developing a plan for implementing the demonstration program, review,
 monitor, and make recommendations 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 composed 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 financing.
 (3) SOCIAL SERVICE COMMITTEES- Each coordinating committee established under
 this subsection shall establish a subcommittee on social services, which
 shall, before any action is taken under subsection (e)(1) (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 agencies 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-
 (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 PUBLIC 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 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
 shall 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 provided 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 (f)(5) for 1 corresponding 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
 subsection (g)(1). 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(a)(2)(A) of such Act.
 (5) INCOME MIX- Not more than 25 percent of the units in each privately
 developed housing project under the demonstration program may be leased by a
 public housing agency pursuant 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 cooperation and receive
 assistance from State, county, and local governments and the private sector
 to develop housing for use under this subsection. Such assistance 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 private lenders;
 (E) low-income housing tax credits from State and local governments; and
 (F) mortgage revenue bonds from State or local governments.
 (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
 demonstration program carried out by the public housing agency and the
 number of units to be developed annually, with approval 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) for 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 administered by the agency.
 (f) EXISTING PUBLIC 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 demonstration 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.
 (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 available 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)(1).
 (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 provided under
 subsection (e) (from which operating subsidy amounts have been recaptured)
 with assistance under section 8(b) of such Act, subject to the availability
 of such assistance pursuant to appropriations Acts and notwithstanding any
 preferences for such assistance under section 8(d)(1)(A)(i) of such Act,
 and permit the family to remain in the unit.
 (g) CONTRACTS WITH PARTICIPATING FAMILIES-
 (1) IN GENERAL- Under the demonstration program, a participating 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 lease executed between the family and the public housing agency for
 such unit, shall set forth the provisions of the demonstration program, and
 shall specify the resources to be made available to the participating family
 and the responsibilities of the participating family under the program. 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)(1).
 (2) ESTABLISHMENT OF CRITERIA- Each public housing agency shall establish
 criteria for participation of families in the demonstration 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 educational 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 any 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 availability of supportive services and
 counseling to the family in accordance with the terms and conditions of the
 contract of participation under subsection (g)(1). The public housing agency
 shall provide for such 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 section 106 of the Housing and Urban Development
 Act of 1968, or otherwise provided.
 (i) ECONOMIC ADVANCEMENT OF PARTICIPATING FAMILIES-
 (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 employed 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, advancing 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 participating 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 ESTABLISHMENT- To ensure that participating families acquire
 the financial resources necessary to complete a successful transition from
 assisted rental housing 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 participating family's
 residency in housing provided under subsection (e) the public housing agency
 shall 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 participation under subsection
 (g)(1). 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
 family's escrow account only upon successful completion of participation in
 the demonstration program, for purchase of a home, for contribution 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 (j)(2)(B) 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 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
 (notwithstanding any preference for residency in public housing under section
 6(c)(4)(A)(i) of the United States Housing Act of 1937), or assistance under
 section 8 of such Act (subject to availability of amounts provided under
 appropriations Acts and notwithstanding any preference for such assistance
 under section 8(d)(1)(A)(i) of such Act).
 (B) EXCEPTION- Subparagraph (A) shall not apply to any participating family
 that has committed serious or repeated violations of the terms and conditions
 of the lease, violations of applicable Federal, State, or local law or that
 has been exempted from such requirement by the public housing 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 demonstration program
 under subsection (n), the Secretary shall submit to the Congress a final
 report evaluating the effectiveness 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.
 (l) DEFINITIONS- For purposes of this section:
 (1) The term `coordinating committee' means a local coordinating committee
 established under subsection (b)(1).
 (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.
 (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' means 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 necessary 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 demonstration 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.
 (a) ESTABLISHMENT- The Secretary of Housing and Urban Development 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
 Community 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 demonstration
 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 recommendations 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.
 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, maintenance and modernization of public
 housing. In analyzing such alternatives, 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 Department's Office of Policy,
 Development and Research in May 1982, and shall update such study as may be
 necessary. The Secretary shall submit a report to the Congress not later
 than 12 months after the 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 predictable capitated Federal payments 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 housing markets, and other pertinent factors, and
 (5) calculating annual inflation-based increases in capitated Federal
 payments. 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 General of the United States shall conduct a study assessing
 alternative methods of developing public housing dwelling units, other
 than under the existing public housing development 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 coordinating such program with
 local housing strategies; and
 (2) evaluate the effectiveness of developing public housing units by
 coordinating the low-income housing tax credit program 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(b)(2) of the United States Housing Act of
 1937 (42 U.S.C. 1437aa(b)(2)), 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 authority, 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 Housing Act of
 1937 (42 U.S.C. 1437f(b)) is amended by striking `(b)(1)' and inserting
 `(b) RENTAL CERTIFICATES AND OTHER EXISTING HOUSING PROGRAMS- '.
 (b) VOUCHER PROGRAM- Section 8(o) of the United States Housing Act of 1937
 (42 U.S.C 1437f(o)) is amended by inserting `RENTAL VOUCHERS- ' after `(o)'.
SEC. 542. DRUG-RELATED RENT ADJUSTMENTS.
 Section 8(c)(2)(B) of the United States Housing Act of 1937 (42
 U.S.C. 1437f(c)(2)(B)) 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, maintenance, and capital repair expenses have
 been substantially increased 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 amendments
 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 maintenance, 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. 543. TENANT RENT CONTRIBUTIONS UNDER TENANT-BASED CERTIFICATE PROGRAM.
 (a) EXCEPTION TO GENERAL RULE- Section 8(c)(3) 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:
 `(B)(i) A family receiving tenant-based rental assistance under subsection
 (b)(1) 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
 payments of the family are reasonable, after taking into account other
 family expenses (including child care, unreimbursed medical expenses,
 and other appropriate family expenses).
 `(ii) A public housing agency shall not approve such excess rentals for more
 than 10 percent of its annual allocation of incremental rental assistance
 under subsection (b)(1). 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 years,
 beginning not less than 30 days following the date on which the report is
 submitted to the Secretary.
 `(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. 1437f(c)(1)) 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 (3)(B).'.
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(d)(1)(A) of the United States Housing
 Act of 1937 (42 U.S.C. 1437f(d)(1)(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 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 section; except that any family otherwise eligible for assistance under
 this section may not be denied preference for assistance not attached to a
 structure (or delayed or otherwise adversely affected in the provision of
 such 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) assisting very
 low-income families who either reside in transitional 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 employment and educational opportunities; (II) assisting families
 in accordance with subsection (u)(2); (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 adoption 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 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
 (2) VOUCHER PROGRAM- Section 8(o)(3) of the United States Housing 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 `substandard 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 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 employment and educational opportunities, (ii) assisting families
 in accordance with subsection (u)(2); (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 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 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).'.
 (c) SECTION 8 NEW CONSTRUCTION- With respect to 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 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 available 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 family 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(d)(1)(A)(ii)
 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(d)(1)(B) of the United States Housing Act (42 U.S.C. 1437f(d)(1)(B))
 is amended--
 (1) by striking `and' at the end of clause (i); and
 (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 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
 `(iv) any termination of tenancy shall be preceded by the owner's provision
 of written notice to the tenant specifying the grounds for such action.'.
SEC. 547. REVISIONS TO PROJECT-BASED CERTIFICATE PROGRAM.
 (a) TENANT SELECTION- Section 8(d)(2) of the United States Housing Act of
 1937 (42 U.S.C. 1437f(d)(2)) is amended by adding at the end the following
 new subparagraph:
 `(D) Where a contract for assistance payments 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(d)(2) of the United States
 Housing Act of 1937 (42 U.S.C. 1437f(d)(2)), as amended by the preceding
 provisions of this Act, is further amended by adding at the end the following
 new subparagraph:
 `(E) The Secretary shall annually survey public housing agencies to determine
 which public housing agencies have, in providing assistance in such year,
 reached the 15 percent limitations contained in subparagraphs (A) and (B),
 and shall report to the Congress on the results of such survey.'.
 (c) TERM OF ASSISTANCE- Section 8(d)(2)(C) of the United States Housing
 Act of 1937 (42 U.S.C. 1437f(d)(2)(C)) is amended to read as follows:
 `(C) In the case of a contract for assistance payments 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 payments as provided in appropriations Acts, to extend the
 term of the underlying contract for assistance payments for such period or
 periods as the Secretary determines to be appropriate to achieve long-term
 affordability of the housing. The contract shall obligate the owner to have
 such extensions of the underlying contract for assistance payments 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(f)(1) of the United States Housing Act
 of 1937 (42 U.S.C. 1437f(f)(1)) 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 assistance 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 applicable limits.'.
SEC. 549. DEFINITIONS OF PARTICIPATING JURISDICTION AND DRUG-RELATED 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 preceding provisions of
 this Act, is further amended by adding at the end the following new paragraph:
 `(10)(A) 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 subsection (and all rent increases for units
 under lease by families assisted under this subsection) to determine whether
 the rent (or rent increase) 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.'.
 (b) DOCUMENTATION OF EXCESSIVE RENT BURDENS-
 (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 Congress 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 determined under section 3(a)(1)
 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, types 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(a)(1) 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 for legislative
 and administrative actions appropriate as a result of analysis of the data.
 (3) AVAILABILITY 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) ELIGIBILITY 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:
 `(11)(A) The Secretary may enter into contracts to make assistance 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 residence. 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 carrying out this paragraph
 the Secretary shall enter into annual contributions contracts with public
 housing agencies pursuant to which such agencies may enter into contracts
 to make such assistance payments to the owners of such real property.
 `(B)(i) 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 rents 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 payment made by such family to amortize the cost of
 purchasing the manufactured home;
 `(II) the monthly utility payments 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 its 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 adjustments of
 maximum monthly rents 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 constructed
 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(c)(3) of the National Housing Act,
 and the 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 carrying 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(r)(1) of the United States Housing Act of 1937 (42
 U.S.C. 1437f(r)(1) 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:
 `(w) RENEWAL OF EXPIRING CONTRACTS- Not later than 30 days after the beginning
 of each fiscal year, the Secretary shall publish in the 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 enactment 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(d)(2)(A) of the United States Housing Act
 of 1937 (42 U.S.C. 1437f(d)(2)(A)) 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 disruption 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) USE OF FUNDS- The amounts made available under this subsection shall be
 used only in connection with housing certificate 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
 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) APPLICANT- The term `applicant' means a public housing agency or any
 other agency responsible for administering assistance under section 8.
 `(B) PUBLIC 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.
 `(a) PURPOSE- The purpose of the Family Self-Sufficiency program 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 subsection (b) or (o) of section 8 or makes
 available new public housing dwelling units--
 `(A) may, during fiscal 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 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-sufficiency program under this section, the Secretary
shall consult with the heads of other appropriate Federal agencies and provide
for cooperative actions and funding agreements with such agencies. Each
public housing agency administering an approved 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 National Affordable Housing Act) to the Secretary,
 that the establishment 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 agency 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 section 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
 `(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 fulfill its obligations under the contract of participation
 not later than 5 years after entering into the contract. The public housing
 agency shall extend the term of the contract for any family that requests
 an extension, upon a finding of the agency of good cause.
 `(4) EMPLOYMENT AND COUNSELING- The contract of participation 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 counseling 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 Secretary 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 continues to qualify for and reside in a
 dwelling unit in public housing or housing assisted under section 8, the
 rent charged the participating 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 housing
 agency on behalf of the participating family. For families with incomes
 between 50 and 80 percent of the area median income, the Secretary shall
 provide for escrow of the difference between 30 percent of the family
 income and the amount paid by the family for rent as determined by the
 Secretary under paragraph (1). The Secretary 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 after 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 established 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 any program administered
 by the Secretary, 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).
 `(f) PROGRAM COORDINATING COMMITTEE-
 `(1) FUNCTIONS- Each public housing agency shall, in consultation 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 program 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 general local
 government, the local agencies (if any) responsible for carrying out programs
 under the Job Training Partnership 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 employment
 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 program 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 Partnership Act
 and the Job Opportunities and Basic Skills Training 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 supportive 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 assistance under this section through
 the section 8 and public 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 local program; and
 `(G) assurances satisfactory to the Secretary that development of the services
 and activities under the local program 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 Training Partnership Act
 and any other relevant employment, child care, transportation, training,
 and education programs 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 section 8(q)(2)(A)(i) shall,
 subject to approval in appropriations Acts, be $300. Upon the submission
 by the Comptroller 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 employing a full-time service coordinator) incurred by public
 housing agencies carrying out local programs under this section. The Secretary
 shall include an estimate of the administrative costs likely to be incurred by
 participating public housing agencies in the annual budget request for the
 Department of Housing 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) PUBLIC 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(a)(2) reserved under paragraph
 (4) and shall allocate such budget authority to public housing agencies
 pursuant to the competition.
 `(2) CRITERIA- The competition shall be based on successful and outstanding
 implementation by public housing agencies of a local self-sufficiency program
 under this section. The Secretary shall establish perfomance criteria for
 public housing agencies 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 allocation 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(a)(2) (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) FLEXIBILITY- In establishing and carrying out the self-sufficiency
 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.
 `(l) REPORTS-
 `(1) TO SECRETARY- Each public housing agency 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 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 recommendations 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 subsection evaluating and describing
 the Family Self-Sufficiency program carried out by the Secretary under
 this section.
 `(2) TIMING- The Comptroller General shall submit the following 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 participating family.
 `(2) The term `earned income' means income from wages, tips, salaries, and
 other employee compensation, and any earnings from self-employment. 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 Secretary 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 expiration of the 1-year period beginning
 on the date of the publication of the final regulations.
 `(2) APPLICABILITY TO INDIAN PUBLIC HOUSING- In accordance with section
 201(b)(2), 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 ECONOMIC
 SELF-SUFFICIENCY PROGRAMS-
 (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 participation in an economic self-sufficiency
 program as a condition 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 employment and experience a rise in income.
 (2) OTHER 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 Development (such as Project Self-Sufficiency, Operation Bootstrap,
 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 Program and other programs that link supportive services
 to Federal housing assistance;
 (C) an assessment of the policy and administrative implications of
 allocating section 8 rental assistance and public housing assistance only
 to localities that have a plan for providing incremental rental assistance
 only in conjunction 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 legislative changes to remove such disincentives.
 (3) CONSULTATION- In preparing the report under this subsection, the
 Comptroller General 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 and
 local officials, other knowledgeable individuals, and national and other
 organizations representing eligible beneficiaries, State and local welfare
 and employment agencies, public housing agencies, business, public and
 private education or training institutions, and other service providers.
 (4) DEFINITION OF 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 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(d)(1)(A) of the Housing and Community Development Act of 1974
 (42 U.S.C. 1439(d)(1)(A)) is amended--
 (1) by inserting `(i)' after `(d)(1)(A)'; and
 (2) by adding at the end the following new clause:
 `(ii) Assistance under section 8(b)(1) 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, comprehensive 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
 8(b)(1) 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 allocating
 such assistance. For purposes of this clause, 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.'.
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 assistance 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. 558. 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:
 (1) Whether establishment 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 families with better access to employment and
 education opportunities, 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, Delaware, and Columbus, Ohio.
 (2) The inflationary effects of fair market rentals under existing law
 within not less than 3 communities, including Oklahoma 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,
 employment, and transportation, and quality of housing stock), which shall
 be determined for not less than 3 communities including Washington, 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 available 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 contained 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.
SEC. 561. FEASIBILITY STUDY REGARDING INDIAN TRIBE ELIGIBILITY FOR VOUCHER
PROGRAM.
 (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(o) 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 conclusions 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 assistance 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(o).
 `(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;
 `(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 8(b)(1) 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 paragraph (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 (b)(1) 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 assistance 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 assistance 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(b)(3) 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.';
 (2) by striking the second sentence; and
 (3) by striking the third from last sentence.
 (b) INCOME- Section 3(b)(4) of the United States Housing Act of 1937 (42
 U.S.C. 1437a(b)(4)) 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(b)(5)(A) of the United States Housing
 Act of 1937 (42 U.S.C. 1437a(b)(5)(A)) is amended by striking `$480' and
 inserting `$550'.
 (2) ALLOWANCE FOR MEDICAL EXPENSES- Section 3(b)(5)(C) of the United States
 Housing Act of 1937 (42 U.S.C. 1437a(b)(5)(C)) is amended--
 (A) in clause (i), by striking `elderly'; and
 (B) by striking `and' at the end.
 (3) ALLOWANCES FOR WORKING FAMILIES AND CHILD SUPPORT AND ALIMONY
 PAYMENTS- Section 3(b)(5) of the United States Housing Act of 1937 (42
 U.S.C. 1437a(b)(5)) 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 subparagraphs:
 `(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
 payment is made.'.
 (d) DETERMINATION OF INCOME LIMITS- Section 3(b)(2) of the United States
 Housing Act of 1937 (42 U.S.C. 1437a(b)(2)) is amended by inserting after the
 period at the end the following: `In determining 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 determining 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 COMPLIANCE- 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 implementing
 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.
SEC. 574. EFFECT OF FOSTER CARE CHILDREN IN DETERMINING FAMILY COMPOSITION
AND SIZE.
 Section 3(b)(3) of the United States Housing Act of 1937 (42
 U.S.C. 1437a(b)(3)), as amended by the preceding provisions of this Act, is
 further 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 shall not be considered in considering family composition
 and family size.'.
SEC. 575. EXEMPTION FROM HOUSING DEVELOPMENT GRANT CONSTRUCTION COMMENCEMENT
REQUIREMENTS.
 (a) IN GENERAL- Notwithstanding section 17(d)(4)(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 and 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 referred 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(a)(5) of the Housing and Community Development Act of 1974 (42
 U.S.C. 1439(a)(5)) 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 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; 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 shall include in the housing assistance plan needs and goals
 with respect to such families and children.'.
SEC. 577. HOUSING COUNSELING.
 (a) COUNSELING SERVICES- The first sentence of section 106(a)(3) of the
 Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(3)) 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 COUNSELING-
 (1) AUTHORIZATION OF APPROPRIATIONS- The first sentence of section 106(c)(8)
 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(c)(8))
 is amended to read as follows: `There 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 (5)(D).'.
 (2) EXTENSION OF PROGRAM- Section 106(c)(9) of the Housing and Urban
 Development Act of 1968 (12 U.S.C. 1701x(c)(9)) is amended by striking
 `September 30, 1990' and inserting `September 30, 1992'.
 (3) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP COUNSELING- Section
 106(c)(5) of the Housing and Urban Development Act of 1968 (12
 U.S.C. 1701x(c)(5)) is amended to read as follows:
 `(5) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP COUNSELING-
 `(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 (D)(i).
 `(B) DEADLINE FOR NOTIFICATION- The notification required in subparagraph
 (A) shall be made--
 `(i) in a manner approved by the Secretary; and
 `(ii) before the expiration of the 45-day period beginning 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 guaranteed under chapter 37 of title 38, United States
 Code; or
 `(ii) for which the eligible homeowner pays the amount overdue before the
 expiration of the 45-day period under subparagraph (B)(ii).
 `(D) ADMINISTRATION AND COMPLIANCE- 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 experienced in the provision of
 homeownership counseling; and
 `(II) serve the area in which the residential property 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).
 `(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 subparagraphs (A) and (B) and the effectiveness of the entity
 monitoring 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 DEMONSTRATION- 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) PREPURCHASE 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 mortgages;
 `(C) to assist homeowners with such federally insured mortgages to retain
 the homes they have purchased pursuant to such mortgages; and
 `(D) to encourage the availability and expansion of housing opportunities
 in connection with such federally insured home mortgages.
 `(2) AUTHORITY- The Secretary of Housing and Urban Development shall carry
 out a program to demonstrate the effectiveness 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 nonprofit organizations under
 paragraph (4) to enable the organizations to provide prepurchase counseling
 services to eligible homebuyers and foreclosure-prevention counseling
 services to eligible homeowners, in counseling target areas.
 `(4) QUALIFIED 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 community-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 organization shall submit
 an application containing a proposal for providing counseling services in
 the form and manner required by the Secretary.
 `(5) PREPURCHASE COUNSELING-
 `(A) MANDATORY PARTICIPATION- Under the demonstration 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 determined by
 the Secretary) a qualified mortgage (as such term is defined in paragraph
 (10)(K)) on such home that involves 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 homebuyer can afford; and
 `(iv) options, programs, and actions available to the homebuyer in the
 event of actual or potential delinquency or default.
 `(B) ELIGIBILITY FOR COUNSELING- 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 payment 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 DELINQUENCY- Under the demonstration 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) notifying 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 demonstration program under this subsection.
 `(D) ELIGIBILITY FOR COUNSELING- 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 target area.
 `(7) SCOPE OF DEMONSTRATION PROGRAM-
 `(A) DESIGNATION OF COUNSELING TARGET AREAS- The Secretary shall designate
 3 counseling target areas (as provided in subparagraph (B)), which shall
 be located in not less than 2 separate metropolitan areas. The Secretary
 shall provide for counseling under the demonstration program under this
 subsection with respect to only such counseling target areas.
 `(B) COUNSELING 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 containing 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 mortgages 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 mortgages originated on homes in such area in the
 calendar year preceding the calendar year in which the area is selected 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 counseling target areas under
 subparagraph (A), the Secretary shall designate at least 1 such area that
 meets the requirements of subparagraph (B)(iv)(I) and at least 1 such area
 that meets the requirements of subparagraph (B)(iv)(II).
 `(D) EXPANSION OF TARGET AREAS- The Secretary may expand 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 demonstration 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 control
 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 (B)(iv), according to the subclause with which the
 corresponding counseling target area complies.
 `(8) EVALUATION- Each organization providing counseling under the
 demonstration program under this subsection shall maintain records with
 respect to each eligible homebuyer and 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 counseling under the program. The study shall include--
 `(i) a comparison of the default and foreclosure rates for each counseling
 target area and other areas, including 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 insurance 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 paragraph (13), a report regarding the study under
 subparagraph (A). The report shall include--
 `(i) information describing the results of the activities under clauses
 (i) through (iii) of such subparagraph;
 `(ii) an assessment of the effectiveness of the counseling under the program
 in preventing default and foreclosure, 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 mortgages.
 `(10) DEFINITIONS- For purposes of this subsection:
 `(A) The term `control area' means an area designated by the Secretary
 under paragraph (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 individual 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 experiencing difficulty in
 obtaining or upgrading employment.
 `(E) The term `downpayment' means the amount of purchase 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 individual 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
 requirements of clause (i); or
 `(iii) is a single parent who, except for owning a residence with his or
 her spouse or residing in a residence 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 occupancy 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
 `(ii)(I) 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 OF APPROPRIATIONS- There are authorized 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.
 (a) EXTENSION- Section 236(f)(3) of the National Housing Act is amended by
 striking `September 30, 1991' and inserting `September 30, 1992'.
 (b) AUTHORIZATION- Section 201(j) of the Housing and Community Development
 Amendments of 1978 (12 U.S.C. 1715z-1a(j)) is amended by adding at the end
 the following paragraph:
 `(5) There are authorized to be appropriated for assistance under the
 flexible subsidy fund not to exceed $50,000,000 for fiscal year 1991 and
 $52,200,000 for fiscal year 1992.'.
 (c) LIMITATION- Section 201(j)(1) of the Housing and Community Development
 Amendments of 1978 is amended by inserting before 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(a)(1)(B) of the Housing and Community Development
 Amendments of 1978 is amended by striking `or vacant'.
 (b) ACTIONS- Section 203(d) of the Housing and Community Development
 Amendments of 1978 is amended--
 (1) in paragraph (1)(B), 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 Secretary 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(c)(1) 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 enactment 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
`SEC. 5121. SHORT TITLE.
 `This chapter may be cited as the `Public and Assisted Housing Drug
 Elimination Act of 1990'.
`SEC. 5122. CONGRESSIONAL FINDINGS.
 `The Congress finds that--
 `(1) the Federal Government has a duty to provide public 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.
`SEC. 5123. AUTHORITY TO MAKE GRANTS.
 `The Secretary of Housing and Urban Development, in accordance with the
 provisions of this chapter, may make grants to public housing agencies
 (including Indian Housing Authorities) and private, for-profit and nonprofit
 owners of federally assisted low-income housing for use in eliminating
 drug-related crime.
`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 employment 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 employment 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 and resident councils to develop security and drug abuse
 prevention programs involving site residents.
`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 manner, and accompanied
 by such additional information as the Secretary may reasonably require. Such
 application shall include a plan for addressing the problem of drug-related
 crime on the premises 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 exclusively 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.
 `For the purposes of this chapter:
 `(1) CONTROLLED SUBSTANCE- The term `controlled substance' has the
 meaning given such term in section 102 of the Controlled Substance Act
 (21 U.S.C. 802).
 `(2) DRUG-RELATED CRIME- The term `drug-related crime' means the illegal
 manufacture, sale, distribution, use, or possession with intent to
 manufacture, sell, distribute, or use a controlled 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(d)(3), section 221(d)(4), 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.
`SEC. 5127. IMPLEMENTATION.
 `The Secretary shall issue regulations to implement this chapter within
 180 days after the date of enactment of the Cranston-Gonzalez 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 federally 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--Public and Assisted Housing Drug Elimination
`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 Urban 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 structures can best promote local private
 nonprofit organizations involvement 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 country
 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 Congress regarding
 the findings of this study not later than 1 year after the date of the
 enactment of this Act.
SEC. 583. EXTENSION OF CAPITAL ASSESSMENT STUDY.
 Section 204(c)(1) of the Department of Housing and Urban Development Reform
 Act of 1989 (12 U.S.C. 1715z-1a 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. 1715l note) are amended 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 prepayment of, a mortgage on such housing
 only in accordance with a plan of action approved by the Secretary under this
 subtitle or in accordance 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 prepayment 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) FILING WITH THE SECRETARY- An owner of eligible low-income housing
 that intends to terminate the low-income affordability 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 transfer 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) INELIGIBILITY FOR  FILING- 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
 `(2)(A) 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 appropriate, 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.
`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 transfer 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 transfer 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);
 `(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) TIMELINESS- 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 repayment of the existing federally
 assisted mortgage, termination of the existing 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 also meet the following requirements:
 `(1) RESIDENTIAL RENTAL VALUE- In the case of preservation value determined
 under subsection (b)(1), 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 preservation value determined
 under subsection (b)(2), 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.
 `(a) ANNUAL AUTHORIZED RETURN- Pursuant to an appraisal under section 213,
 the Secretary shall determine the annual authorized return on the appraised
 housing, which shall be equal to 8 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 AFFORDABILITY LIMITS- 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 housing.
 `(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 sale 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.
`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 multiplying
 120 percent 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 paragraph (1), the Secretary
 shall determine whether such aggregate rents exceed the amount determined by
 multiplying 120 percent of the prevailing rents in the relevant local 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
 shall be an area geographically smaller than a market area established by
 the Secretary under section 8(c)(1) 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 areas 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 paragraph (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 section 220 and take actions
 pursuant to such section.
 `(2) HOUSING EXCEEDING FEDERAL COST LIMITS- If the aggregate 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 shall not exceed the Federal cost limit;
 `(B) file a second notice of intent under section 216(d) indicating
 an intention to transfer the housing under section 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 voluntarily terminate the insurance,
 subject to the mandatory sale provisions under section 221.
`SEC. 216. INFORMATION FROM SECRETARY.
 `(a) INFORMATION TO OWNERS TERMINATING AFFORDABILITY RESTRICTIONS- The
 Secretary shall provide each owner who submits 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 documentation required to satisfy such criteria.
 `(b) INFORMATION TO OWNERS EXTENDING LOW-INCOME AFFORDABILITY 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 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 LIMITS- 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 information relating to the rights and
 opportunities of the tenants.
 `(d) SECOND NOTICE OF INTENT-
 `(1) FILING- 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.
`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 prepayment 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 acceptance 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 simultaneously 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 AFFORDABILITY RESTRICTIONS- If the plan of action proposes
 to terminate the low-income affordability restrictions through prepayment or
 voluntary termination 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 change 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 restrictions 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, including the identity
 of the transferee and a copy of any documents 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 the plan under this
 subtitle. The owner shall submit any revision to the Secretary and to the
 tenants of the housing.
`SEC. 218. PREPAYMENT AND VOLUNTARY TERMINATION.
 `(a) APPROVAL- The Secretary may approve a plan 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 tenant
 that exceeds 30 percent of the monthly adjusted income of the tenant or an
 increase in the monthly rental payment 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 percentage, 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 tenants (except for good cause) where
 comparable and affordable housing is not readily available determined without
 regard to the availability 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 families 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.
`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 appropriations for such purpose, enter
 into such agreements as are necessary to enable the owner to receive the
 annual authorized return for the housing determined under section 214(a),
 pay debt service on the federally-assisted mortgage covering the housing,
 pay debt service 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.
 `(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 appropriations 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 National Housing Act.
 `(6) In the case of housing defined in section 229(1)(A)(iii), redirection
 of the Interest Reduction Payment 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 National 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 established under section 236(f) of such Act absent the requirements
of this paragraph.
`SEC. 220. INCENTIVES FOR TRANSFER TO QUALIFIED PURCHASERS.
 `(a) IN GENERAL- With respect to any eligible low-income housing 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 purchasers as provided in this section. The Secretary
 shall issue regulations 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 (b)(3)
 (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
 213(b)(2). 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 section, 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 (b)(1), 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 213(b)(2). 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 qualified purchaser is a resident council, the Secretary
 may not approve a plan of action for assistance 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 approved in appropriations
 Acts, the Secretary shall, for approvable plans of action, provide assistance
 sufficient to enable qualified purchasers to--
 `(A) acquire the eligible low-income housing from the current owner for a
 purchase price not greater than the preservation equity of the housing;
 `(B) pay the debt service on the federally-assisted mortgage covering
 the housing;
 `(C) pay the debt service on any loan for the rehabilitation of the housing;
 `(D) meet project operating expenses and establish adequate 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 adequate reimbursement
 for transaction expenses relating to acquisition of the housing, subject
 to approval by the Secretary; and
 `(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 transfered 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(b)(7) may
 include an 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 market 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 LIMITS.
 `(a) IN GENERAL- With respect to any eligible low-income housing 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 paragraph (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 assistance available from the Federal Government
 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 to this section that
 meets the requirements of subsection (b) is made during the period under
 such subsection, during the 3-month period beginning upon the expiration
 of the 12-month period under subsection (b)(1), the owner of the housing
 may offer to sell and may sell the housing only to qualified purchasers. If,
 during such period, a qualified 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(b)(2), the Secretary shall require
 the owner to sell the housing pursuant to such offer.
 `(d) ASSISTANCE-
 `(1) FEDERAL COST LIMIT- 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 prevailing
 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 qualified 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 any 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(b)(2))
 and the level of assistance 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 and local governments
 to facilitate a sale under this section.
`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 families 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 inspections conducted under such subsection by the Secretary;
 `(C) current tenants will not be involuntarily displaced (except for
 good cause);
 `(D) any increase in rent contributions for current tenants 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
 section 8(c) of the United States Housing Act of 1937, whichever 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 (E)(ii) of this paragraph);
 `(E)(i) any resulting increase in rents for current tenants (except for
 increases made necessary by increased 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 Housing 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 persons,
 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 January 1, 1987 (based on the area median income limits
 established 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 Secretary shall take
 into account any additional incentives provided under this subtitle;
 `(G) future rent adjustments shall be--
 `(i) made by applying an annual factor (to be determined by the Secretary)
 to the portion of rent attributable 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 Secretary, for owners to
 apply for rent increases not adequately 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
 `(H) any savings from reductions in operating expenses due to management
 efficiencies shall be deposited 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 reserves 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 determines 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 agreement, modifications to the
 existing regulatory agreement or mortgage, 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 `remaining useful life'
 means, with respect to eligible low-income housing, the period during which
 the physical characteristics of the housing remain in a condition suitable
 for occupancy, assuming normal maintenance 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 Code, establish standards for determining 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 procedure 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 Secretary
 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 Secretary shall provide for comment by tenants
 of the housing and interested persons and organizations with respect to
 the petition. The Secretary shall also provide the tenants and interested
 persons and organizations with an opportunity to appeal a determination
 under this subsection.
 `(d) HOUSING STANDARDS-
 `(1) ESTABLISHMENT AND INSPECTION- The Secretary shall, by regulation,
 establish standards regarding the physical condition in which any eligible
 low income housing project receiving incentives under this subtitle shall
 be maintained. The Secretary 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 requiring 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 provision
 of assistance under this clause, the Secretary may, notwithstanding any
 other law or contract for assistance, 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 provided 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 contract 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 housing 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 accessibility of decent, affordable housing in all
 areas where properties are eligible to submit a notice of intent to prepay
 under section 212. To prevent payment of windfall profits, the Secretary may
 make available incentive payments 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 implementation 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.
`SEC. 223. ASSISTANCE FOR DISPLACED TENANTS.
 `(a) SECTION 8 ASSISTANCE- Each low-income family that is displaced as
 a result of the prepayment of the mortgage or voluntary termination of
 an insurance contract on eligible low income housing shall, subject to
 the availability or amounts provided under appropriations Acts, receive
 assistance under the certificate and voucher programs under sections 8(b)
 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 necessary to provide
 assistance payments for low-income families displaced 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 as the result of the prepayment 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
 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 disabilities), 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 privileges 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
 housing or the termination of an insurance contract on such housing.
`SEC. 224. PERMISSIBLE PREPAYMENT OR VOLUNTARY TERMINATION AND MODIFICATION
OF COMMITMENTS.
 `(a) IN GENERAL- Notwithstanding any limitations on prepayment or voluntary
 termination under this subtitle, an owner may terminate the low-income
 affordability restrictions through prepayment 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 prepayment
 pursuant to the terms of the mortgage (notwithstanding 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 expiration 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 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 appropriations 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 necessary 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 comparable
 to those received under the original approved plan of action, the Secretary,
 upon the request of the owner, shall take the following 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 agrees 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).
`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 withheld, the notice shall describe--
 `(A) the reasons for withholding approval; and
 `(B) the actions that could be taken to meet the criteria for approval.
 `(2) OPPORTUNITY TO REVISE- The Secretary shall subsequently 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.
 `(a) FORMATION OF RESIDENT COUNCIL- Tenants seeking to purchase 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)) based 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 appropriate, 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--
 `(A) the number of initial owners that are very low-income, lower income,
 or moderate-income persons at initial 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 sufficient to permit occupancy charges
 to cover the full operating 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 FAMILIES- The entity that
 transfers ownership interests in, or shares representing, units to eligible
 families, or another entity specified in the approved application,
 may use 50 percent of the proceeds, if any, from the initial sale 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 homeowner'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 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 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 mortgage securing
 the obligation of the note.
 `(B) 6 YEARS OR 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
 receive 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 improvements installed at the expense of the
 family during the family's tenure as owner; and
 `(iii) 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.
 `(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 housing under section 212 of
 the Cranston-Gonzalez National Affordable Housing Act. The Secretary shall
 require the maintenance of any records necessary to calculate accurately
 payments due under this paragraph.
 `(6) PROTECTION OF NONPURCHASING FAMILIES-
 `(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 program approved under this subtitle.
 `(B) RENTAL ASSISTANCE- If a tenant decides not to purchase 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 another property. The requirement for giving preference to certain
 categories of eligible families under sections 8(d)(1)(A) and 8(o)(3) 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 move, the owner will pay relocation
 assistance in accordance with the approved homeownership program.
 `(7) QUALIFIED MANAGEMENT- As a condition of approval of a homeownership
 program under this subtitle, the resident council 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 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 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 disclose the amount and the disposition by
 such resident council of the proceeds of assistance received under this
 subtitle (including any proceeds from sales under paragraphs (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 pertinent 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 mortgage 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 housing on a permanent basis.
`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 responsibility
 for implementing this subtitle to a State housing agency if such agency
 submits a preservation plan acceptable to the Secretary.
 `(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 multifamily 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 Secretary 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.
 `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 consideration 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.
 `For purposes of this subtitle:
 `(1) The term `eligible low-income housing' means any housing financed by
 a loan or mortgage--
 `(A) that is--
 `(i) insured or held by the Secretary under section 221(d)(3) of the
 National Housing Act 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;
 `(ii) insured or held by the Secretary and bears interest at a rate determined
 under the proviso of section 221(d)(5) 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
 `(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 activities related to
 the provision of decent housing that is affordable 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(f)(3) of the National Housing Act--
 `(i) the preservation value 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 paragraph (1) or (2) of section 213(b).
 `(10) The term `Secretary' means the Secretary of Housing and Urban
 Development.
 `(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.
 `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  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 requirements 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 determined 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 determined 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 financial 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 company that is owned or
 controlled by the selling owner or a principal thereof if retention of the
 management company is neither a condition 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.
 `(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 prepayment 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;
 `(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, including 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
 assistance 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 prepaying the mortgage on the housing (or terminating the insurance
 contract on the housing).
`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.
`SEC. 234. AUTHORIZATION OF APPROPRIATIONS.
 `(a) GENERAL- There are authorized to be appropriated for assistance 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(d)(2), subject to approval in appropriations Acts.
`SEC. 235. APPLICABILITY.
 `Subject to section 605 of the Cranston-Gonzalez National Affordable 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:
`Subtitle A--Short Title
`Sec. 201. Short title.
`Subtitle B--Prepayment of Mortgages Insured Under National Housing Act
`Sec. 211. General prepayment 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. Prepayment and voluntary termination.
`Sec. 219. Incentives to extend low-income use.
`Sec. 220. Incentives for transfer to qualified 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 prepayment 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:
 `(f)(1) 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 (as 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 Secretary 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 borrowing 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
 `(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 affordability
 restrictions pursuant to an approved plan of action under such Act.
 `(B) To be eligible for insurance under this paragraph, an acquisition 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
 implementation of the plan of action, subject to approval by the Secretary.
 `(4) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), (l),
 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 mortgage, the Secretary may--
 `(i) issue regulations providing that, in order to receive insurance benefits,
 the insured mortgagee 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 case 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 satisfactory 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 Act will be extended for the full term of the
 contract entered into under such Act. The Secretary may accelerate repayment
 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 Housing 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 8(v)(2) of the United States Housing Act of 1937 is 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.
 (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. The 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 as 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 immediately before the date of the
 enactment of this Act) shall apply with respect to any housing for which
 the election under subsection (a)(1) 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.
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 Housing Act (12
 U.S.C. 1715z-1) 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 family 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-1(f)) is amended by adding at the end the
 following new paragraph:
 `(5)(A) 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 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 appropriations 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. 1715l(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 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 tenants.'.
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:
 `(6)(A) 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 (g)(1).'.
 (b) SECTION 221- Section 221 of the National Housing Act is amended by
 inserting the following new subsection after subsection (k):
 `(l)(1) Notwithstanding any other provision of law, tenants residing 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 8(b) 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 (d)(3) 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 (d)(5).'.
SEC. 613. ASSISTANCE TO PREVENT PREPAYMENT UNDER STATE MORTGAGE PROGRAMS.
 (a) SECTION 8 ASSISTANCE-
 (1) AUTHORITY- Section 8(d)(2)(A)) of the United States Housing Act of 1937
 (42 U.S.C. 1437f(d)(2)(A)) is amended by inserting after the period at the
 end the following: `Notwithstanding 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 additional 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 attachment 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 assist 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 (1)(A) regarding the percentage of families that
 may receive assistance under this section who do not qualify for preferences
 under such paragraph.'.
 (2) CONTRACT TERM- Section 8(d)(2)(C) of the United States Housing Act of
 1937 (42 U.S.C. 1437f(d)(2)(C)) is amended by inserting after the period
 at the end the following: `To the extent assistance is used as provided in
 the penultimate sentence of subparagraph (A), the contract for assistance
 may, at the option of the public housing agency, have an initial term not
 exceeding 15 years.'.
 (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 program under the terms of which the
 owner may prepay a State assisted or subsidized mortgage on such housing. The
 application 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 moderate 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 available on existing section 8 contracts,
 or (ii) to provide additional 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 standards, inspections and sanctions
 established by the Secretary under section 224(e) of the Housing and Community
 Development Act of 1987. Any such section 8 assistance shall be provided
 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 affordable 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(a)(1) of the Housing
 Act of 1949 (42 U.S.C. 1483(a)(1)) is amended to read as follows:
 `(a)(1) 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 section 521(a)(1), $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(b)(1)(B), $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 513(b) 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(f)(1), $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.
 `(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(f)(6), $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 domestic 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 and migrant farmworkers 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(c)(1) of the Housing
 Act of 1949 (42 U.S.C. 1483(c)(1)) is amended to read as follows:
 `(c)(1) The Secretary, to the extent approved in appropriation Acts for
 fiscal years 1991 and 1992, may enter into rental assistance payment
 contracts under section 521(a)(2)(A) 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(c)(5)(D) aggregating $5,200,000 for fiscal year
 1991 and $5,500,000 for fiscal year 1992.'.
 (e) RENTAL HOUSING LOAN AUTHORITY- Section 515(b)(4) of the Housing Act
 of 1949 (42 U.S.C. 1485(b)(4)) is amended by striking `September 30, 1990'
 and inserting `September 30, 1991'.
 (f) MUTUAL AND SELF-HELP HOUSING GRANT AND LOAN AUTHORITY- Section 523(f)
 of the Housing Act of 1949 (42 U.S.C. 1490c(f)) is amended by striking
 `September 30, 1990' and inserting `September 30, 1991'.
SEC. 702. EFFECT OF FOSTER CARE CHILDREN IN DETERMINATION OF FAMILY COMPOSITION
AND SIZE.
 Section 501(b)(4) of the Housing Act of 1949 (42 U.S.C. 1471(b)(4)) 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.'.
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
 payment 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 construction 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 requirements 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 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 otherwise eligible
 for assistance under subsection (d) but having incomes below the amount
 determined to qualify for a loan under this section, the Secretary may defer
 mortgage payments 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 payment 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 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. 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 mortgage loans guaranteed by the Secretary of Agriculture for
 the purchase 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 necessary 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 residents 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)(1)(A), except as modified
 by the provisions of this subsection. Loans shall be guaranteed under this
 subsection in an amount equal to 90 percent of the loan.
 `(2) ELIGIBLE 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) ELIGIBLE 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 COUNSELING 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 (12)(A)).
 `(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 complete a program of homeownership counseling under section
 106(a)(1)(iii) of the Housing and Urban Development Act of 1968 and obtain
 certification from the provider of the program that the borrower is adequately
 prepared for the obligations of homeownership.
 `(5) ELIGIBLE 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 subsection shall--
 `(A) be made for a term not to exceed 30 years;
 `(B) involve a rate of interest that is fixed over the term of the loan and
 does not exceed the rate for loans guaranteed 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 service 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, subject to the maximum
 dollar limitation of section 203(b)(2) of the National Housing Act; and
 `(ii) for any borrower other than a first-time homebuyer, 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(b)(2) 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 subsection 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) NONASSUMPTION- Notwithstanding the transfer of property for which a
 guaranteed loan under this subsection was made, the borrower of a guaranteed
 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 standards to target and give
 priority to areas that have a demonstrated 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 individual 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 experiencing difficulty in
 obtaining or upgrading employment.
 `(B) The term `first-time homebuyer' means any individual 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 as a first-time homebuyer under this subparagraph 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.
 `(C) The term `single parent' means an individual who--
 `(i) is unmarried or legally separated from a spouse; and
 `(ii)(I) 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(a)(2) of the Housing and Urban
 Development Act of 1968 (12 U.S.C. 1701x(a)(2)) 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)'.
 (d) REGULATIONS AND IMPLEMENTATION-
 (1) PROPOSED REGULATIONS AND COMMENT PERIOD- Not later than 120 days
 after the date of the enactment of this Act, the 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 of the enactment
 of this Act, the Secretary of Agriculture shall issue final regulations to
 implement the amendments made by this section. The Secretary shall provide
 for the regulations to 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 paragraph (2) take effect.
 (4) CONSULTATION- In developing and promulgating the regulations under
 paragraphs (1) and (2), the Secretary of Agriculture shall consult with
 the chairperson of the Federal Agricultural 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 designation; 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.'.
SEC. 709. HOUSING IN UNDERSERVED AREAS.
 (a) PURPOSE- The purpose of this section is to improve the quality 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 as
 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(a)(9) 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-
 `(A) OUTREACH- The Secretary shall publicize the availability to targeted
 underserved areas of grants and loans under this title and promote, to the
 maximum extent feasible, 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 communities
 and counties for such designation and preference, examining the effects of
 such data on such eligibility. The Secretary shall 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 the Secretary for
 modifications in the standards for designation 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 appropriate 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 receive 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 sentence 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 sentence)
 shall be made available and allocated under the laws and regulations relating
 to such assistance, notwithstanding 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 subparagraph.
 `(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 applications 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 annually the
 current list of targeted underserved areas in the Federal Register.
 `(6) PROJECT PREPARATION ASSISTANCE-
 `(A) IN GENERAL- The Secretary may make grants to eligible applicants under
 subparagraph (D) to promote the 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 necessary 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 indicating 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 corporation, 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 appropriated to carry out this
 paragraph shall remain available until expended.
 `(7) PRIORITY FOR COLONIAS-
 `(A) IN GENERAL- In providing assistance 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 qualifying 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.'.
 (c) REGULATIONS- Not later than the expiration of the 120-day period beginning
 on the date of enactment of the Cranston-Gonzalez 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(e)(3) of the Housing
 Act of 1949 (42 U.S.C. 1480(e)(3)) is amended by inserting after `fifty
 years' the following: `, or for use as rental units under section 514 with
 mortgages containing repayment terms with up to 33 years,'.
 (b) TRANSFER TO FOR-PROFIT ENTITIES- Section 510(e) of the Housing 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
 payments, 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 appropriations 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 each assumption or transfer under this subsection
 for the assumption of the obligations, rights, and interests under the
 terms of the loan or loan obligation or such other terms as the Secretary
 determines 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 State 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 eligible entities under paragraph (1) in any such State. The Secretary
 shall establish a procedure to provide that any amounts pooled under this
 paragraph from the allocation for any State 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 paragraph (1) in such State.
 `(3) UNUSED AMOUNTS- Any amounts set aside or pooled under this subsection
 from the allocation for any State in any fiscal year that are not obligated
 by a reasonable date established by the Secretary (which shall be after
 the expiration of the period under paragraph (2)) shall be made available
 to any entity eligible under this section in such State.'.
SEC. 714. HOUSING FOR RURAL HOMELESS AND MIGRANT FARMWORKERS.
 (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 FARMWORKERS-
 `(1) IN GENERAL- The Secretary may provide financial assistance for providing
 affordable rental housing and related facilities 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 Secretary may provide the following assistance for
 housing under this subsection:
 `(i) An advance, in an amount not to exceed $400,000, of the cost of
 acquisition, substantial rehabilitation, or acquisition and rehabilitation
 of an existing structure or construction of a new structure for use in the
 provision of housing under this subsection. 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 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 payments 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 assistance 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 (A)(i)
 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 farmworkers and homeless individuals
 (and the families 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) APPLICATIONS-
 `(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 to the Secretary that the housing assisted
 will be operated 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 farmworkers (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 ownership 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;
 `(v) the extent to which the project would meet the needs of migrant
 farmworkers and homeless individuals (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 approve assistance for any
 housing under this subsection unless the applicant agrees--
 `(i) to operate the proposed project as housing for migrant farmworkers and
 homeless individuals (and the families of such individuals) in compliance
 with the provisions of this subsection and the application approved 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-
 `(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 establish such requirements as may be necessary to carry out the
 provisions of this subsection.
 `(B) LIMITATION ON USE OF FUNDS- No assistance received under this subsection
 (or any State or local government funds used to supplement such assistance)
 may be used to replace other public funds previously used, or designated 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 annually 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 subdivision thereof,
 Indian tribe, any private nonprofit organization incorporated within the
 State that has applied for a grant under this subsection.
 `(B) The term `homeless individual' has the same meaning 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 employment, 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 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.'.
 (b) APPLICABILITY- 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.
 Section 521(a)(2)(C) of the Housing Act of 1949 (42 U.S.C. 1491(a)(2)(C)) is
 amended by adding at the end the following: `Notwithstanding 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 subparagraph (A).'.
SEC. 717. HOUSING PRESERVATION GRANTS.
 (a) USE OF DEOBLIGATED FUNDS- Section 533(c)(1) of the Housing Act of 1949
 (42 U.S.C. 1490m(c)(1)) is amended by adding at the end the following:
 `Funds obligated, but subsequently unspent and deobligated, may remain
 available, to the extent provided in appropriations 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 housing preservation grants
 to such grantee or grantees as the Secretary may determine.'.
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 beginning 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(c)(1)(B)
 of the Housing Act of 1949 (42 U.S.C. 1472(c)(1)(B)) is amended by inserting
 `initial' after `any'.
TITLE VIII--HOUSING FOR PERSONS WITH SPECIAL NEEDS
Subtitle A--Supportive Housing for the Elderly
SEC. 801. 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. 202. 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 cooperatives to expand the supply
 of supportive housing for the elderly. Such assistance shall be provided as
 (1) capital advances in accordance with subsection (c)(1), and (2) contracts
 for project rental assistance in accordance with subsection (c)(2). 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 Corporation, 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-
 `(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).
 `(2) PROJECT RENTAL ASSISTANCE- Contracts for project rental assistance
 shall obligate the Secretary to make monthly payments 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 paragraph
 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 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.
 `(d) TERM OF COMMITMENT-
 `(1) USE LIMITATIONS- All units in housing assisted under this section
 shall be made available 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 (c)(2) 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 expiring contracts during the year prior to the date of expiration.
 `(e) APPLICATIONS- 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 occupying such housing; (C) the manner in
 which such services will be provided to such persons, including, in the
 case of frail elderly persons, evidence of such residential supervision as
 the Secretary determines 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 agency (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 housing 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 Secretary 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 (e)(4) 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 section, 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) occupying such housing. Such
 services may include (A) meal service adequate to meet nutritional need;
 (B) housekeeping 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 cost-effectiveness or operation of the program or add significantly
 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 (c)(2). Any cost associated with the employment 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-
 `(1) IN GENERAL- The Secretary shall periodically establish development
 cost limitations by market area for various types and sizes of supportive
 housing for the elderly by publishing a notice of the cost limitations in
 the Federal Register. The cost limitations shall reflect--
 `(A) the cost of construction, reconstruction, or rehabilitation 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 accommodate 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 Cranston-Gonzalez National Affordable Housing Act; and
 `(G) the cost of land, including necessary site improvement.
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, reconstruction, or rehabilitation, and land acquisition
in the area. 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.
 `(2) RTC PROPERTIES- In the case of existing housing and related facilities
 to be acquired 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
 construction, reconstruction, or rehabilitation costs.
 `(4) INCENTIVES FOR SAVINGS-
 `(A) SPECIAL HOUSING ACCOUNT- The Secretary shall use the development
 cost limitations established under paragraph (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 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 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 purposes
 as determined by the Secretary.
 `(5) DESIGN FLEXIBILITY- The Secretary shall, to the extent practicable,
 give owners the flexibility to design housing appropriate to their location
 and proposed resident population within broadly defined parameters.
 `(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 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) reasonably 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.
 `(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) information regarding the availability of housing
 assisted under this section.
 `(j) MISCELLANEOUS PROVISIONS-
 `(1) TECHNICAL ASSISTANCE- The Secretary shall make available 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 COMPLIANCE- 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
 prohibiting 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 paragraph (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 authority. 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
 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- Subparagraph (A) shall not apply if the individual receives no
 compensation or is paid expenses, reasonable benefits, or a nominal fee to
 perform the services 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.
 `(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 establish additional eligibility requirements
 (acceptable to the Secretary) 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 operate supportive housing
 for the elderly.
 `(4) 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
 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 possessions 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 initially 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(b)(2) of the United States
 Housing Act of 1937.
 `(l) Authorizations-
 `(1) CAPITAL ADVANCES- There are authorized to be appropriated for the
 purpose of funding capital advances in accordance with subsection (c)(1)
 $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 National
 Affordable Housing 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 (c)(2) 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) NONMETROPOLITAN ALLOCATION- Not less than 20 percent 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 `section 202 of the Housing
 Act of 1959'.
 (c) EFFECTIVE DATE AND APPLICABILITY- 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 public comment in accordance with
 section 553 of title 5, United States Code. Regulations shall be issued
 for comment not later than 180 days after the date of enactment of this Act.
 (d) EXPEDITED FINANCING AND CONSTRUCTION-
 (1) IN GENERAL- The Secretary may, subject to the availability 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(a)(1); and
 (B) make such adjustments to the relevant fair market rent limitations
 established under section 8(c)(1) of the United States Housing Act of 1937
 in providing assistance under such Act,
as are necessary to ensure the expedited financing and construction 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)(4)(C) of the Housing
 Act of 1959 (12 U.S.C. 1701q(a)(4)(C)) 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.'.
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
 enhance 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 and persons with
 disabilities;
 (D) 365,000 persons in federally assisted housing experience some form of
 frailty, and the number is expected 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) a large and growing number of frail elderly residents face premature or
 unnecessary institutionalization because of the absence of or deficiencies in
 the availability, adequacy, coordination, or delivery of supportive services;
 (G) the support service needs of frail residents of assisted housing are
 beyond the resources and experience that housing 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 services 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 necessary services in a noninstitutional setting; and
 (K) the Congregate Housing Services Program, established by Congress
 in 1978, and similar programs providing in-home services have been
 effective in preventing unnecessary institutionalization and encouraging
 deinstitutionalization.
 (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 services 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 residents 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 and persons with disabilities;
 (E) to provide readily available and efficient supportive services that
 provide a choice in supported living arrangements 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 difficulties and challenges created by serving
 older residents;
 (H) to develop partnerships between the Federal Government 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-
 (1) IN GENERAL- The Secretary of Housing and Urban Development and the
 Secretary of Agriculture (through Administrator 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 encourage maximum independence within a home environment for
 such residents capable of self-care with appropriate supportive services; 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 Secretary 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 State, Indian tribe, unit of general
 local government, and nonprofit housing sponsor, receiving 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 congregate services program--
 (i) shall--
 (I) apply for approval 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 coupons (as defined in section
 3(e) of such Act) as payment from individuals to whom such meal services
 are provided; and
 (ii) shall request, and use to provide such meal services, agricultural
 commodities made available without charge by the Secretary of Agriculture.
 (B) PREFERENCE FOR NUTRITION PROVIDERS- In contracting 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 Secretary shall require,
 in providing meal services in a housing project under the Congregate Housing
 Services Act of 1978 or any other program for congregate services.
 (3) RETROFIT AND RENOVATION- Assistance under this section may be provided
 with respect to eligible 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 retrofitting 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 accessible 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 accommodate the provision
 of supportive services to eligible residents; 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 employment 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;
 (D) monitoring and evaluating the impact and effectiveness 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 Secretary deems necessary to
ensure sound management. The Secretary may fund the employment of service
coordinators by using amounts appropriated under this section and by permitting
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, personal 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) ELIGIBLE PROJECT RESIDENTS- The owner of each eligible housing project
 shall establish fees for meals and other services provided under a congregate
 services program 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 payment. 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 services, 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.
 (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) ELIGIBILITY FOR SERVICES-
 (1) ELIGIBLE PROJECT RESIDENTS- Any eligible resident who is a resident
 of an eligible housing project (or who with deinstitutionalization and
 appropriate supportive services under this section could become a resident
 of eligible federally assisted housing) shall be eligible for services
 under a congregate services program assisted under this section.
 (2) ECONOMIC NEED- In providing services under a congregate services program,
 the program shall give consideration to serving eligible project residents
 with the greatest economic need.
 (3) IDENTIFICATION-
 (A) IN GENERAL- A professional assessment committee under subparagraph (B)
 shall identify eligible project residents under paragraph (1) and shall
 designate services appropriate to the functional abilities and needs of
 each eligible project resident. The committee shall utilize procedures
 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 professional assessment committee
 under this section shall consist 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 services 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 operation of the program or add significantly to
 the need for assistance under this section.
 (f) ELIGIBLE CONTRACT RECIPIENTS AND DISTRIBUTION OF ASSISTANCE- The
 Secretary concerned may provide assistance under this section and enter
 into contracts under subsection (b) with--
 (1) owners of eligible housing;
 (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) APPLICATIONS- 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 activities, 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 qualifying supportive services identified under
 paragraph (3) will enable eligible residents to live independently and
 avoid unnecessary institutionalization,
 (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 pursuant to subsection
 (d); and
 (8) such other information or certifications that the Secretary determines
 to be necessary or appropriate to achieve the purposes of this section.
The Secretary shall act on each application within 60 days of its submission.
 (h) SELECTION AND EVALUATION OF APPLICATIONS AND PROGRAMS-
 (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 shall select such entities to receive assistance. The criteria for
 selection shall include consideration of--
 (A) the extent to which the activities described in subsection (d)(3)
 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 institutionalization;
 (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 PROGRAMS- The Secretary
 of Housing and Urban Development and the Secretary of Agriculture shall,
 by regulation under subsection (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 congregate services
 programs of eligible housing projects receiving assistance under this
 section in such State; and
 (B) to submit annually, to the Secretary concerned, a report evaluating
 the impact and effectiveness of congregate 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 provide for the cost of providing the
 congregate services program assisted under this section to be distributed
 as follows:
 (i) Each State, Indian tribe, unit of general government, 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 congregate services program. Any monetary or
 in-kind contributions received by a congregate services program under the
 Congregate Housing Services Act of 1978 may be considered for purposes of
 fulfilling the requirement under this clause. The Secretary concerned shall
 encourage owners to use excess residual 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 subsection (b).
 (iii) Fees under subsection (d)(7) shall provide 10 percent of the cost.
 (B) EXCEPTIONS-
 (i) For any congregate services program that was receiving assistance under
 a contract under the Congregate Housing Services Act of 1978 on the date of
 the enactment of this Act, the unit of general local government 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 (A)(i) (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 services 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 subsection (d)(7) 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 recipient of amounts under the contract and 50 percent
 of such remaining costs shall be provided by the Secretary concerned under
 such contract.
 (C) ELIGIBLE 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 (A)(i), 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 Secretary concerned shall
 require each State, Indian tribe, unit of general local government, and
 local nonprofit housing sponsor, that receives assistance under this section
 to maintain the same dollar amount of annual 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.
 (E) LIMITATION- For purposes of complying with the requirement under
 subparagraph (A)(i), the appropriate Secretary concerned may not consider
 any amounts contributed or provided by any local government to any State
 receiving assistance under this section that exceed 10 percent of the amount
 required of the State under subparagraph (A)(i).
 (2) CONSULTATION- The Secretary shall consult with the Secretary of Health
 and Human Services regarding the availability of assistance from other
 Federal programs to support services under this section and shall make
 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(a)(1) 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 paragraph (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
 assistance or aid furnished under any Federal, federally assisted, or State
 program based on need.
 (3) ELIGIBILITY AND PRIORITY FOR 1978 ACT RECIPIENTS- Notwithstanding any
 other provision of this section, any public housing agency, housing assisted
 under section 202 of the Housing 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 appropriations 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 assistance
 under this section after the expiration of such period.
 (4) ADMINISTRATIVE COST LIMITATION- A recipient of assistance under this
 section may not use more than 10 percent of the sum of such assistance and the
 contribution amounts required under subsection (i)(1)(A)(i) for administrative
 costs and shall ensure that any entity to which the recipient distributes
 amounts from such sum may not expend more than a reasonable amount from
 such distributed amounts for administrative 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 construction or moderate rehabilitation of the structure under
 section 8(b)(2) 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 Agriculture 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(c)(4)
 of the Housing 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 definition 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 establish additional eligibility requirements
 (acceptable to the Secretary) based 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 management 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 3(b)(6) 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 essential 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 assistance (which may include, but is not limited to, aid given
 to eligible residents in grooming, dressing, and other activities which
 maintain personal 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 administered by such Secretary; and
 (B) the Secretary of Agriculture, with respect to eligible federally assisted
 housing administered by the Administrator of the Farmers Home Administration.
 (18) 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.
 (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 independently unless the
 individual receives congregate services.
 (20) The term `unit of general local government'--
 (A) means any city, town, township, county, parish, village, 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 government,
 as provided under subsection (g)(1)(B).
 (l) REPORTS TO CONGRESS-
 (1) IN GENERAL- Each Secretary concerned shall submit to the Congress, for
 each fiscal year for which assistance is provided for congregate services
 programs under this section, an annual report--
 (A) describing the activities being carried out with assistance under this
 section and the population being served by such activities;
 (B) evaluating the effectiveness of the program of providing 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
 Program 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 Secretary 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 Development 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
 programs administered by the Secretary of Housing and Urban Development
 to the total number of units assisted by programs administered by such
 Secretary and the Secretary of Agriculture, shall be used for assistance
 for congregate services programs in eligible federally assisted housing
 administered by the Secretary of Housing and Urban Development: 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 assisted housing for elderly individuals assisted by
 programs 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 supplement 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(a)(3)(B) of the United States Housing
 Act of 1937 is amended--
 (1) by striking `and' at the end of clause (iii);
 (2) by striking the period at the end of clause (iv) and inserting `;
 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 payments 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.
 (a) PURPOSE- The purpose of this section is to establish a demonstration
 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 demonstration 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 particular 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 demonstration 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 demonstration,
 the Secretary may also provide for supportive services in connection with
 existing contracts for housing assistance under sections 8(b) and 8(o).
 (c) SUPPORTIVE SERVICES REQUIREMENTS AND MATCHING FUNDING-
 (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 shall 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(b)(5) 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 payment.
 (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
 frail elderly persons to be served under this demonstration are provided
 throughout the demonstration period. Expenditures for supportive services
 need not be made in equal amounts for each year, but may vary depending
 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 (1)(B),
 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) APPLICATIONS- An application under this section shall be submitted by a
 public housing agency in such form and in accordance 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 description of any such
 assistance already made available that will be used in the demonstration;
 (2) a description of the size and characteristics of the population of
 frail elderly persons and of their housing and supportive services needs;
 (3) a description of the proposed method of determining whether a person
 qualifies as a frail elderly person (specifying 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 another 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 monitoring the person's progress in
 meeting that plan;
 (6) the identity of the proposed service providers and a statement 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 supportive services
 will be provided for the demonstration period;
 (9) the plan for coordinating the provision of housing assistance and
 supportive services;
 (10) a description of how the public housing agency will ensure that the
 service providers are providing supportive services, 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 section 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 aging 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 assistance 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
 (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 LIMITATIONS- 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 government.
 (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 program in an effective and
 efficient manner.
 (g) DEFINITIONS- For purposes of this section:
 (1) The term `demonstration period' means the period beginning 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 services 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 functional 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 3(b)(6) of the United States Housing Act of 1937. The term includes
 an Indian Housing Authority, as defined in section 3(b)(11) 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, including personal care, case management
 services, transportation, meal services, counseling, supervision, and 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 Secretary shall conduct a
 demonstration in one Federal region, subject to the terms and conditions of
 this subsection, to determine 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 to subsection (j)
 and subject to availability in appropriation Acts, the Secretary shall
 enter into a contract with a public housing agency 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 assistance payment 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 authorization 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 demonstration project who is a frail
 elderly individual. Grants for supportive 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 contain 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.
 (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 improvement.
 (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.
 (j) 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 section, 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.
 (l) IMPLEMENTATION- Not later than the expiration of the 180-day period
 beginning on the date that funds authorized for the demonstrations 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 PROPERTIES FOR SECTION
202 HOUSING.
 (a) AUTHORITY TO PURCHASE RESOLUTION TRUST CORPORATION PROPERTY FOR
 SECTION 202 PROGRAM- Section 202(d)(3) of the Housing Act of 1959 (12 U.S.C
 1701q(d)(3)) 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.'.
 (b) 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 reasonable 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 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 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 RTC DISPOSITION PROCEDURES FOR PROPERTIES RECEIVING
 HUD OR FMHA ASSISTANCE-
 (1) IN GENERAL- Section 21A(c)(6) 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(c)(3) of the Federal Home Loan Bank
 Act (12 U.S.C. 1441a(c)(3)) is amended by inserting after `RULES GOVERNING
 DISPOSITION OF ELIGIBLE MULTIFAMILY HOUSING PROPERTIES- ' the following:
 `Except as provided under paragraph (6)(D), the Corporation shall dispose
 of eligible multifamily housing property as follows:'.
 (e) EXEMPTION FROM PROJECT SIZE REQUIREMENT REGARDING SUPPORT SERVICES FOR
 FRAIL ELDERLY- Section 213(d)(1)(A) of the Housing and Community Development
 Act of 1974 (42 U.S.C. 1439(d)(1)(A)) 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 Corporation under
 section 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. 1701q) is 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) ELIGIBILITY FOR INSURANCE- Section 2 of the National Housing 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-
 (1) IN GENERAL- The Secretary of Housing and Urban Development 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, freestanding, 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.
 (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 SECTION 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 agency
 of the Federal Government or any other public or private department, agency,
 or organization to elderly, especially those who are frail, or handicapped
 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 subparagraph (B) of this subsection; and
 `(B) expenses for the provision of services for elderly, especially
 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
 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 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
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
 (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
 (d)(2).
Such assistance may be used to finance the acquisition, acquisition and
moderate rehabilitation, construction, reconstruction, or moderate or
substantial rehabilitation of housing, including the acquisition from the
Resolution Trust Corporation, to be used as supportive housing for persons
with disabilities and may include 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
persons with disabilities.
 (c) GENERAL REQUIREMENTS- The Secretary shall take such actions 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 units 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 housing with supportive
 services that address their individual needs;
 (B) provide such persons with opportunities for optimal independent living
 and participation in normal daily activities, and
 (C) facilitate access by such persons to the community at large and to
 suitable employment opportunities within such community.
 (d) FORMS OF ASSISTANCE-
 (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 persons with disabilities in
 accordance 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 payments 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 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 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 payments 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 occupying 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 Security 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 (d)(2) 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 expiring contracts during the year prior to the date of expiration.
 (f) APPLICATIONS- 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 occupying 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 necessary 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;
 (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 purposes 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 consistent, 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 development
 cost limitations by market area for various types and sizes of supportive
 housing for persons with disabilities by publishing a notice of the cost
 limitations in the Federal Register. 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,
 as 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 accommodate the provision of
 supportive services to persons with disabilities;
 (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 Cranston-Gonzalez National Affordable Housing Act; and
 (G) the cost of land, including necessary site improvement.
In establishing development cost limitations for a given market area,
the Secretary shall use data that reflect currently prevailing 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 paragraph (1) 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 project
 account. Such percentage shall be increased to 75 percent for owners
 which add energy efficiency features 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 housing; (iii) reduce gross rent requirements;
 and (iv) enhance 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 amenities 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) reasonably 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.
 (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 available 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 COMPLIANCE- 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
 prohibiting 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 employed
 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 paragraph 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
 services 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
 undertaking 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 applicant demonstrates that local market conditions dictate
 the 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 regulations 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 prescribe
 such regulations as may be necessary to prevent abuses in determining, under
 the definitions contained in this paragraph, the eligibility of families
 and persons for admission to and occupancy of housing assisted under this
 section. Notwithstanding 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 described 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 disabilities' means
 housing that--
 (A) is designed to meet the special needs of persons with disabilities, and
 (B) provides supportive services that address the individual 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 operate 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 possessions of the United States.
 (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.
 (l) Authorizations-
 (1) CAPITAL ADVANCES- There are authorized to be appropriated for the
 purpose of funding capital advances in accordance 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 obligations 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 such purpose after notice
 and public comment.
 (2) EARLIER 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:
`TITLE IV--HOUSING ASSISTANCE
`Subtitle A--General Provisions
`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 persons who require
 a supportive living environment; and
 `(5) provide supportive services to help homeless persons and families lead
 independent and dignified lives.
`SEC. 402. DEFINITIONS.
 `For purposes of this title--
 `(1) The term `assistance' means grants to assist the acquisition, lease,
 renovation, substantial rehabilitation, operation, or conversion of facilities
 to assist the homeless, grants for moderate rehabilitation, grants for other
 purposes, and other assistance made eligible under section 405 and subtitle B.
 `(2) The term `emergency activities' means supportive services 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 governments that have formed
 a consortium that, in the determination 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 received 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.
 `(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 security 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)(1)(B); and
 `(B) the provision of supportive services to the residents of such housing.
 `(10) The term `outpatient health services' means outpatient health care,
 outpatient mental health services, outpatient substance 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 provided under this title or
 with respect to which the Secretary provides technical assistance or annual
 payments 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 responsibility, 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 Secretary with
respect to assistance provided to such project sponsor 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 pursuant 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, persons with mental
 disabilities, other persons with disabilities, 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 counseling, 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 obtaining other Federal, State,
 and local assistance available for such individuals, including public
 assistance benefits, mental health benefits, employment counseling, and
 medical assistance.
 `(C) Such term does not include the provision of major medical equipment.
 `(D) All 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 meaning 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.
`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 emergency,
 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.
 `(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 strategy) in accordance with section 105 of
 the Cranston-Gonzalez National Affordable Housing Act.
 `(C) USE OF PROJECT SPONSORS- A grantee shall carry out activities authorized
 under this subsection 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.
 `(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) ELIGIBLE ACTIVITIES- Grants under this title shall be available only
 for approved activities. Approved activities shall include--
 `(1) the provision of assistance to help very low-income families 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 accordance 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 families who are
 residing in emergency shelter or transitional housing 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 subparagraph
 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 authorized under section 421, provide
 rental assistance to public housing agencies or other contracting agencies
 for the renovation of single room occupancy dwellings in accordance with
 subtitle C.
`SEC. 404. ALLOCATION FORMULA.
 `Subject to section 823(b) of the Cranston-Gonzalez National Affordable
 Housing Act, the Secretary shall issue regulations establishing an allocation
 formula, if any, that reflects each jurisdiction's share of the Nation's
 need for housing assistance for the homeless.
`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 areas 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.
 `(b) 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 assisted under
 sections 412 and 413 if such assistance is required to meet the special
 needs of homeless persons residing in such projects.
 `(c) APPLICATIONS- Assistance 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 homeless 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 property purchased,
 leased, 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 certification
 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 Secretary determines
 to be necessary to achieve the purposes of this section.
 `(d) SELECTION CRITERIA-
 `(1) IN GENERAL- The Secretary shall establish selection criteria for
 assistance under this subsection, which shall principally 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 Government,
 a State, a unit of general 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 exemplary coordination among State and
 local agencies administering 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 Facilities To Assist
 the Homeless-
 `(1) IN GENERAL- The Secretary may not provide assistance under subsection
 (b)(3) 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 (b)(3) 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 (b)(3) 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) GUIDELINES- The Secretary of Housing and Urban Development 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.
 `(a) MATCHING REQUIREMENTS-
 `(1) IN GENERAL- Each grantee shall be required to supplement the grants
 provided under this title for acquisition, rehabilitation, 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 assistance 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 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).
 `(b) HOUSING QUALITY- 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 undertaken 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 certify that each
 project sponsor shall administer, in good faith, a policy designed to
 ensure that any shelter or housing assisted 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 assistance 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 assessment 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 submission. The report
 shall include a summary of any comments received from interested parties.
 `(2) CONSULTATION- The Secretary shall consult with national associations of
 States, local governments, and other housing interests to develop uniform
 recordkeeping, performance reporting, and auditing requirements. After
 considering the results of such consultations, the Secretary shall establish
 uniform 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 furnish 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 prescribe 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 families.
 `(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 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 standards 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) APPLICABILITY OF SECTION 104(g) OF THE HOUSING AND COMMUNITY 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 sponsors may 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
 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.
`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.
`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 Secretary 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
`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.
 `(b) LIMITATION ON FINANCIAL ASSISTANCE- A grantee may provide 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 termination
 of services;
 `(3) there is a reasonable prospect that the family will be able to resume
 payments within a reasonable period of time; and
 `(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 shelter' if it is
 designed to provide overnight sleeping accommodations for homeless persons. An
 emergency shelter may include appropriate 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 appropriate privacy, safety, and sanitary and
 other health-related conditions 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 described 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 housing' if it
 is designed to facilitate the movement of homeless persons to independent
 living within 24 months (or such longer period as the Secretary determines
 is necessary to facilitate the transition of homeless persons to independent
 living). Transitional housing includes housing primarily designed to serve
 deinstitutionalized homeless 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 rehabilitation,
 or acquisition and rehabilitation of an existing structure for use as
 transitional housing. 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 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 structure 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 housing (including
 transitional housing 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.
 `(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 assistance 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 employment assistance program
 for the residents of transitional housing, which shall include--
 `(A) employment of residents in the operation and maintenance of the
 housing; and
 `(B) the payment of the transportation costs of residents to places of
 employment.
 `(7) A grant to establish and operate a child care services 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 housing; 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.
 `(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.
A project sponsor may receive assistance under both paragraphs (1) and (2).
 `(c) PROGRAM REQUIREMENTS-
 `(1) REQUIRED AGREEMENTS- A grantee may approve assistance for a project
 under this section only if the project sponsor has agreed--
 `(A) to operate the proposed project as transitional housing 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 Secretary 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 DISABILITIES.
 `(a) DEFINITION- A project shall be considered `permanent housing for homeless
 persons with disabilities' if it provides community-based long-term housing
 and supportive services for not more than 8 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 assistance to
 a project sponsor of permanent housing for homeless persons with disabilities:
 `(1) A grant for the cost of acquisition, substantial rehabilitation,
 or acquisition and rehabilitation of an existing structure for use as
 permanent housing for homeless persons with disabilities. 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 structure 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 housing 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
 assistance 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 persons 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
 provided from sources other than this Act).
 `(d) PROGRAM REQUIREMENTS-
 `(1) REQUIRED AGREEMENTS- A grantee may approve assistance for any project
 under this section only if the project sponsor has agreed--
 `(A) to operate the proposed project as permanent housing 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
 annually 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 Secretary 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 carrying 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 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 improving housing opportunities for very low-income persons
 with disabilities; and (ii) reasonably related to program eligibility and
 an applicant's ability to perform the obligations of the lease. Project
 sponsors shall promptly notify in writing 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 assurances 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.
 `(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 payment 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 counseling 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 provide assistance
 to eligible families in the form of a security deposit and the cost of rent
 for a reasonable period of time if--
 `(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 appropriate parties,
 shall develop additional approved activities to carry out the purposes of
 this title.
`Subtitle C--Section 8 Single Room Occupancy
`SEC. 421. SECTION 8 ASSISTANCE FOR SINGLE ROOM OCCUPANCY PROVISIONS.
 `(a) USE OF FUNDS- The amounts made available under this subtitle shall be
 used only in connection with the moderate rehabilitation of housing described
 in section 8(n) of the United States Housing Act of 1937 for occupancy by
 homeless persons, except that such amounts 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 such units.
 `(b) ALLOCATION- The amounts made available under this subtitle shall 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 demonstrate a need for the assistance under
 this section and the ability to undertake and carry out a program to be
 assisted under this subtitle. To be considered for assistance under this
 section, an applicant shall submit to the Secretary a proposal containing--
 `(1) a description of the size and characteristics of the population
 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 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 CEILING- 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 required 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 accommodate 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 contributions 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.
 `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.
 `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 mentally ill, have chronic problems
 with alcohol, drugs, or both, or have acquired immunodeficiency syndrome
 and related diseases) and the families of such persons.
`SEC. 432. RENTAL HOUSING ASSISTANCE.
 `(a) IN GENERAL- The Secretary is authorized, in accordance with the
 provisions of this subtitle, to provide rental housing assistance 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 seriously mentally ill or have
 chronic problems with alcohol, drugs, or both.
`SEC. 433. SUPPORTIVE SERVICES REQUIREMENTS.
 `(a) Matching Funding-
 `(1) IN GENERAL- Each recipient shall be required to supplement 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 recipient, 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. 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 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--
 `(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 population 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 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;
 `(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 government 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 participate, 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 persons 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, identification of
 the specific structures that the recipient is proposing for rehabilitation
 and assistance; and
 `(12) in the case of housing assistance under part IV, identification 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.
 `(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 supportive 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; and
 `(8) the cost-effectiveness of the proposed program; and
 `(9) such other factors as the Secretary specifies in regulations 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 assistance made
 available under this subtitle for any fiscal year may be used for programs
 located within any one unit of general local government.
`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 assistance 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 program in an effective and
 efficient manner.
`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.
`SEC. 438. DEFINITIONS.
 `For purposes of this subtitle:
 `(1) The term `acquired immunodeficiency syndrome and related diseases'
 has the same meaning given that term in section 853 of the Cranston-Gonzalez
 National Affordable Housing Act.
 `(2) The term `applicant' 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 assistance 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 `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(e)(2) 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) AVAILABILITY- Sums appropriated under this section shall remain
 available until expended.
`PART II--SHELTER PLUS CARE: HOMELESS RENTAL HOUSING ASSISTANCE
`SEC. 441. PURPOSE.
 `The Secretary is authorized to use amounts made available under section
 439(a) to provide rental housing assistance in accordance with the
 requirements of this part.
`SEC. 442. HOUSING ASSISTANCE.
 `Where necessary to assure that the provision of supportive services 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 appropriate 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
 receive in any year (1) up to 25 percent of such amounts or (2) such higher
 percentage as the Secretary may approve upon a demonstration 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. 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 directly 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 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
 `(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.
`SEC. 445. TENANT RENT.
 `Each tenant shall pay as rent an amount determined in accordance with the
 provisions of section 3(a)(1) 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 administering the housing
 assistance an administrative fee in an amount determined appropriate by
 the Secretary for the costs of administering the housing assistance.
`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 occupancy 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. 452. FIRE AND SAFETY IMPROVEMENTS.
 `Each contract for housing assistance payments 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 improvements 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 Secretary 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 payment 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. 461. PURPOSE.
 `The Secretary is authorized to use amounts made available under section
 439(c) of this subtitle only in connection with the 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 1992 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 for the purpose of providing such rental
 housing assistance.
`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 appropriate 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. 463. HOUSING STANDARDS AND RENT REASONABLENESS.
 `(a) IN GENERAL- The Secretary shall require that (1) the recipient 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 purpose of this part, and (2) the recipient 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 or lessor, as the case may be,
 promptly corrects the deficiency and the recipient verifies the correction.
`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 assistance.
`Subtitle E--Miscellaneous
`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. 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 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 the 8-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.
 (c) TRANSITION PROVISIONS- Amounts appropriated for use under subtitle D of
 title IV of the Stewart B. McKinney Homeless Assistance 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: `or homeless person'.
SEC. 823. TRANSITIONAL RULE.
 (a) IN GENERAL- The amendment made by section 821 shall take effect--
 (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) FEASIBILITY 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 jurisdictions 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 local 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:
`TITLE IV--HOUSING ASSISTANCE
`Subtitle A--General 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. Transition to permanent housing.
`Sec. 416. Development of additional approved activities.
`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 assistance.
`Sec. 444. Housing standards and rent reasonableness.
`Sec. 445. Tenant rent.
`Sec. 446. Administrative fees.
`Part III--Shelter Plus Care: Moderate Rehabilitation Assistance for Single
Room Occupancy Dwellings
`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 Development shall, not
 more than 9 months after the date of enactment of 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 homeless persons and other experts.
 (b) 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, transitional, 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 regulations 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 determines 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 accommodations 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
 (3) by adding at the end the following new paragraphs:
 `(7) a strategy provided by metropolitan cities, urban counties, 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 counties, 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 OF 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 biennially to
 the Secretary of Housing and Urban Development a comprehensive homeless
 assistance plan under this section.';
 (2) in subsection (b)(5), by inserting `Indian tribe,' after `State,';
 (3) in subsection (c)(1), 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) PUBLIC 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.
 `(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 STANDARDS- 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 inserting `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 `, services, 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 population, (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 contributing to homelessness'.
SEC. 832. EMERGENCY SHELTER GRANTS PROGRAM.
 (a) AUTHORIZATION OF APPROPRIATIONS- The first sentence of section 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.
 `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 pursuant to the preceding
 sentence with local governments funded by the State.'.
 (2) CONFORMING AMENDMENT- The table of contents for subtitle B of title IV
 of the Stewart B. McKinney Homeless Assistance 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(a)(2)(B) of
 the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11374(a)(2)(B))
 is amended by striking `20 percent' and inserting `30 percent'.
 (d) TREATMENT OF HOMELESSNESS PREVENTION ACTIVITIES- Section 414(a)(4)
 of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11374(a)(4))
 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 CONFIDENTIALITY-
 (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 subtitle 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 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
 subsection (a)(2); and
 `(5) 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 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 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 applying
 for a grant under the emergency shelter grants program under subtitle B,
 a strategy for obtaining any matching 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(a)(17) of the Housing and Community Development Act of 1974.'.
 (2) GRANT ASSISTANCE- Section 412 of the Stewart B. McKinney 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) by inserting `, or for Indian tribes' after `urban county' each place
 it appears.
 (4) DISTRIBUTION TO NONPROFIT ORGANIZATIONS- The first sentence 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(d)(3)) 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(a)(2) of the Stewart B. McKinney
 Homeless Assistance Act (42 U.S.C. 11374(a)(2)) is amended--
 (A) in subparagraph (A), by inserting `or Indian tribe' after `local
 government'; and
 (B) in subparagraph (B), by striking `or local government' 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 assisted under this section
 are environments that provide appropriate privacy, safety, and sanitary and
 other health-related conditions 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);
 (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(12)(B) of the Stewart B. McKinney Homeless
 Assistance Act (42 U.S.C. 11382(12)(B)) 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 TO GRANTS-
 (1) IN GENERAL- Section 423(a)(1) of the Stewart B. McKinney Homeless
 Assistance Act (42 U.S.C. 11383(a)(1)) is amended--
 (A) by striking `An advance' and inserting `A grant'; and
 (B) by striking `an advance' and inserting `a grant'.
 (2) CONVERSION OF