[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5818 Engrossed in House (EH)]
110th CONGRESS
2d Session
H. R. 5818
_______________________________________________________________________
AN ACT
To authorize the Secretary of Housing and Urban Development to make
loans to States to acquire foreclosed housing and to make grants to
States for related costs.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Neighborhood
Stabilization Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Congressional purposes.
Sec. 3. Loans and grants to States, metropolitan cities, and urban
counties.
Sec. 4. Qualified plans.
Sec. 5. Allocation of amounts.
Sec. 6. Loans.
Sec. 7. Grants.
Sec. 8. Eligible housing stimulus activities.
Sec. 9. Shared appreciation agreement.
Sec. 10. Spending requirements.
Sec. 11. Servicer contact.
Sec. 12. Accountability.
Sec. 13. Definitions.
Sec. 14. Funding.
Sec. 15. Protection of right to bear arms.
Sec. 16. Ineligiblity of illegal aliens for assistance.
Sec. 17. Regulations and implementation.
SEC. 2. CONGRESSIONAL PURPOSES.
The purposes of this Act are--
(1) to establish a loan and grant program administered by
the Department of Housing and Urban Development to help States,
metropolitan cities, and urban counties preserve the equity and
ensure the safety of the neighbors of homes made vacant by the
predatory lending and foreclosure crises, to prevent and reduce
the incidence of such vacancies through various means,
including purchasing and rehabilitating owner-vacated,
foreclosed homes with the goal of stabilizing and occupying
them as soon as possible, either through resale or rental to
qualified families;
(2) to distribute these loans and grants to areas with the
highest levels of foreclosure and delinquent subprime
mortgages, and largest increases in the rate of vacant and
abandoned single family homes;
(3) to provide incentives for States, metropolitan cities,
and urban counties to use the funds to stabilize as many
properties as possible; and
(4) to provide housing for low- and moderate-income
families, especially those that have lost homes to foreclosure.
SEC. 3. LOANS AND GRANTS TO STATES, METROPOLITAN CITIES, AND URBAN
COUNTIES.
The Secretary of Housing and Urban Development shall, subject to
the availability of amounts under section 14, make grants under section
5(a) to qualified States and under subsections (f) and (g) of section 5
to qualified metropolitan cities and qualified urban counties,
respectively, and make loans under section 6 in accordance with the
approved plans of qualified States, qualified metropolitan cities, and
qualified urban counties, for use to carry out eligible housing
stimulus activities under section 8. The program under this Act shall
be administered through the Office of Community Planning and
Development of the Department of Housing and Urban Development or any
successor office responsible for administering the community
development block grant program under title I of the Housing and
Community Development Act of 1974 (42 U.S.C. 5301 et seq.).
SEC. 4. QUALIFIED PLANS.
(a) In General.--The Secretary may make a grant under this Act only
to a State, metropolitan city, or urban county, and may allocate a loan
authority amount under this Act only for a State, metropolitan city, or
urban county, that has submitted to the Secretary a plan that meets the
requirements under this section and has been approved under this
section.
(b) Contents.--A plan under this section for an allocation
recipient shall--
(1) designate a housing finance agency of the allocation
recipient, or other agency, department, or entity of the
allocation recipient, or any other designee, as the allocation
recipient administrator to act on behalf of the allocation
recipient for purposes of this Act;
(2) describe the housing stimulus activities under section
8 to be carried out with assistance under this Act for the
allocation recipient by the entity identified pursuant to
paragraph (1) of this subsection;
(3) prioritize the allocation of funds to low- and
moderate-income neighborhoods with high concentrations of
vacancies, according to the number of census tracts, as
determined by the Secretary, to have large increases in the
rate of vacancy during the past eight quarters and significant
levels of loans determined to be at risk of foreclosure, and
describe how such activities will help restore or improve the
viability of such neighborhoods by providing for purchase or
occupancy of qualified foreclosed properties as soon as
practicable and in a manner that will facilitate repayment of
the loans provided under this Act for carrying out such
activities;
(4) set forth the procedures that the allocation recipient
will use to allocate grant and loan amounts and monitor for
compliance with the requirements of section 8;
(5) provide that grant and loan amounts provided under this
Act for the allocation recipient will be used only for eligible
housing stimulus activities under section 8 that are eligible
under such section for assistance with grant or loan amounts,
as applicable;
(6) contain such assurances as the Secretary shall require
that the housing stimulus activities to be carried out with
assistance under this Act shall not result in a significant net
loss in rental housing in an area in which such activities are
undertaken;
(7) give priority emphasis and consideration to
metropolitan areas, metropolitan cities, urban areas, rural
areas, low- and moderate-income areas, census tracts and other
areas having the greatest need, including those--
(A) with the greatest percentage of home
foreclosures;
(B) with the highest percentage of homes financed
by subprime mortgage loans over 90 days delinquent; or
(C) identified by the State, qualified metropolitan
city, or unit of general local government as likely to
face a significant rise in the rate of home
foreclosures;
(8) notwithstanding any other preferences established or
authorized under this subsection, provide first priority, in
use of amounts from grants or loans under this Act for
rehabilitating housing, for providing housing for veterans,
members of the Armed Forces on active duty, members of the
National Guard or Armed Forces reserves, school teachers, and
emergency responders;
(9) provide preference for activities that serve the lowest
income families, who otherwise meet the income requirements
under section 8, for the longest period and homeowners, who
otherwise meet such income requirements, whose mortgages have
been foreclosed;
(10) provide preference for use of grant and loan amounts
in connection with acquisition of qualified foreclosed
properties that are acquired no earlier than 60 days after the
owner of the property described in section 13(7)(B) acquired
such ownership;
(11) describe any other preferences the allocation
recipient may establish, such as housing for first responders,
for veterans, for nurses serving underserved areas or homeless
persons, or for homeless persons in accordance with the 10-year
plan of the State to end homelessness, or providing housing for
public school teachers or workforce who are employed by the
city or locality in which the housing is located;
(12) provide for obligation and outlay of grant amounts,
and for loan commitments and disbursement, in accordance with
the requirements under section 10; and
(13) in the case of any grant or loan amounts that will be
invested with the possibility of a return on investment,
provide for use of any return on such investment only for one
or more eligible housing stimulus activities under section 8.
(c) Submission.--
(1) In general.--The Secretary shall provide for allocation
recipients to submit plans under this section to the Secretary
and shall establish requirements for the contents and form of
such plans. Except in the case of plan resubmitted pursuant to
subsection (d)(3), the Secretary may not accept or consider a
plan unless the plan is submitted to the Secretary before the
expiration of the 30-day period beginning upon the date of the
enactment of this Act.
(2) Public approval.--An allocation recipient may not
submit a plan to the Secretary unless the plan is approved by
the chief executive officer of the allocation recipient after a
public hearing on the plan held pursuant to reasonable public
notice.
(d) Review and Approval.--
(1) Timing.--The Secretary shall review, and approve or
disapprove, each plan submitted or resubmitted pursuant to
paragraph (3) in compliance with the requirements established
under this section before the expiration of the 30-day period
beginning upon the submission of the plan. If the Secretary
does not approve or disapprove a plan that is submitted or
resubmitted in accordance with the requirements under this
section before the expiration of such 30-day period and notify
the allocation recipient of such approval or disapproval, the
plan shall be considered approved for purposes of this section.
(2) Standard for disapproval.--The Secretary may disapprove
a plan only if the plan fails to comply with the requirements
of this Act.
(3) Resubmission.--If the Secretary disapproves the plan of
an allocation recipient, the Secretary shall submit to the
allocation recipient the reasons for the disapproval, and the
allocation recipient may, during the 15-day period that begins
upon notification of such disapproval and the reasons for such
disapproval, submit to the Secretary a revised plan for review
and approval in accordance with this subsection.
SEC. 5. ALLOCATION OF AMOUNTS.
(a) Grants.--From the total amount made available under section
14(a) for grants under this Act, the Secretary shall make a grant to
each qualified State in the grant amount determined under subsection
(c) of this section for the qualified State.
(b) Loans.--From the aggregate amount of authority for the
outstanding principal balance of loans made under this Act pursuant to
section 14(b)(1), the Secretary shall allocate such authority for loans
under this Act for each qualified State in the loan authority amount
determined under subsection (c) of this section for the qualified
State.
(c) Grant Amounts and Loan Authority Amounts.--
(1) In general.--The grant amount or loan authority amount
for a qualified State shall be the foreclosure grant share or
foreclosure loan share, respectively, for the State determined
under subsection (d), as such share is adjusted in accordance
with an index established or selected by the Secretary to
account for differences between qualified States in the median
price of single family housing in such States.
(2) Limitation on adjustment.--If such adjustment would
result in a grant amount or loan authority amount for any State
that exceeds 125 percent of the foreclosure grant share or
foreclosure loan share, respectively, for the State, the grant
amount or loan authority amount for the State shall be 125
percent of foreclosure grant share or foreclosure loan share,
respectively, for the State and the Secretary shall increase
the grant amounts or loan authority amounts for all other
States on a pro rata basis, except as provided in paragraph
(3), by the amount necessary to account for the aggregate of
any such decreases in grant amounts or loan authority amounts
for States to comply with the 125 percent limitation.
(3) Limitation on reallocation.--No increase in the grant
amount or loan authority amount for any State from amounts
reallocated pursuant to paragraph (2) shall result in the grant
amount or loan authority amount for any State exceeding 125
percent of the foreclosure grant share or foreclosure loan
share for the State, respectively.
(4) Priority preference for unused amounts.--States which
have their grant or loan amounts reduced under paragraph (2)
shall be granted a priority preference for any loans or grants
which may be reallocated under subsection (i) (relating to
reallocation of funds).
(d) Foreclosure Shares.--For purposes of this section:
(1) Grant share.--The foreclosure grant share for a
qualified State shall be the amount that bears the same ratio
to the total amount made available under section 14(a) as the
number of foreclosures on mortgages for single family housing
and subprime mortgage loans for single family housing that are
over 90 days delinquent, occurring in such State during the
most recently completed four calendar quarters for which such
information is available, as determined by the Secretary, bears
to the aggregate number of such foreclosures and such
delinquent subprime mortgage loans occurring in all qualified
States during such calendar quarters.
(2) Loan share.--The foreclosure loan share for a qualified
State shall be the amount that bears the same ratio to the
aggregate amount of the principal balance of loans that may be
outstanding at any time under this Act pursuant to section
14(b)(1) as the number of foreclosures on mortgages for single
family housing and subprime mortgage loans for single family
housing that are over 90 days delinquent, occurring in such
State during the most recently completed four calendar quarters
for which such information is available, as determined by the
Secretary, bears to the aggregate number of such foreclosures
and such delinquent subprime mortgage loans occurring in all
qualified States during such calendar quarters.
(e) Distribution of Full Amount.--The Secretary shall establish the
index referred to in subsection (c) and the grant and loan authority
amounts for the qualified States in a manner that provides that--
(1) the aggregate of the grant amounts for all qualified
States is equal to the total amount made available under
section 14(a); and
(2) the aggregate of the loan authority amounts for all
qualified States is equal to the aggregate amount of authority
for the outstanding principal balance of all loans made under
this Act pursuant to section 14(b)(1).
(f) Requirement To Allocate to Qualified Metropolitan Cities.--Of
any grant amounts and loan authority amounts allocated pursuant to this
section for a State, the Secretary shall allocate for each qualified
metropolitan city located in such State a portion of such grant amounts
and such loan authority amounts that bears the same ratio to such grant
amounts and loan authority amounts, respectively, allocated for the
State as the number of foreclosures on mortgages for single family
housing and subprime mortgage loans for single family housing that are
over 90 days delinquent, occurring in such qualified metropolitan city
during the most recently completed four calendar quarters for which
such information is available, as determined by the Secretary, bears to
the aggregate number of such foreclosures and such delinquent subprime
mortgage loans occurring in the State during such calendar quarters.
The Secretary shall adjust such allocation to account for differences
between median single family housing prices in the State and in
qualified metropolitan cities in the State.
(g) Requirement To Allocate to Qualified Urban Counties.--Of any
grant amounts and loan authority amounts allocated pursuant to this
section for a State, such State shall allocate for each qualified urban
county located in such State a portion of such grant amounts and such
loan authority amounts that bears the same ratio to such grant amounts
and loan authority amounts, respectively, allocated for the State as
the number of foreclosures on mortgages for single family housing and
subprime mortgage loans for single family housing that are over 90 days
delinquent, occurring in such qualified urban county during the most
recently completed four calendar quarters for which such information is
available, as determined by the Secretary, bears to the aggregate
number of such foreclosures and such delinquent subprime mortgage loans
occurring in the State during such calendar quarters. The Secretary
shall adjust such allocation to account for differences between median
single family housing prices in the State and in qualified urban
counties in the State.
(h) Allocation Exception.--If the aggregate grant and loan
authority amount to be allocated pursuant to subsection (f) or (g) to a
qualified metropolitan city or qualified urban county is less than
$10,000,000, the Secretary may, but is not required to, allocate such
grant and loan authority amount to such qualified metropolitan city or
qualified urban county, and the allocation for such State shall be
increased by the grant and loan authority amount not allocated to such
qualified metropolitan city or qualified urban county.
(i) Reallocation of Unused Amounts.--The Secretary shall recapture
any grant amounts and loan authority amounts allocated to a State that
are not used in a timely fashion in accordance with section 10, as the
Secretary shall prescribe, and shall reallocate such amounts among all
other qualified States in accordance with the provisions of this Act
for allocation of grant amounts and loan authority amounts.
SEC. 6. LOANS.
(a) Requirement of Loan Authority Amount.--The Secretary may make a
loan under this Act for use in the area of an allocation recipient only
to the extent and in such amounts that loan authority amounts for such
allocation recipient are available.
(b) Revolving Availability of Loan Authority Amount.--The loan
authority amount allocated for each allocation recipient shall--
(1) upon the Secretary entering into a binding commitment
to make a loan under this Act for use in the area of such
allocation recipient, be decreased by the amount of the
principal obligation of such loan; and
(2) upon the repayment to the Secretary by any borrower of
any principal amounts borrowed under a loan this Act for use in
the area of such allocation recipient, be increased by the
amount of principal repaid.
(c) Assisted Entities.--The loan authority amount of an allocation
recipient may be used for activities described in section 8(a)
undertaken by--
(1) the allocation recipient;
(2) a unit of local government or a local governmental
entity; or
(3) any other entity, as provided in the approved plan of
the allocation recipient under section 4.
(d) Loan Terms.--Each loan provided under this Act from the loan
authority amount of an allocation recipient shall--
(1) bear no interest;
(2) have a term to maturity of--
(A) 3 years, in the case of any loan made to
purchase or finance the purchase of qualified
foreclosed housing for use under section 8(a)(1) for
homeownership; and
(B) 5 years, in the case of any loan made to
purchase or finance the purchase of qualified
foreclosed housing for use under section 8(a)(2) for
rental;
(3) not provide for amortization of the principal
obligation of the loan during such term;
(4) be non-recourse;
(5) require payment of the original principal obligation
under the loan only upon the expiration of the term of the
loan; and
(6) have such other terms and conditions as the Secretary
may provide.
(e) Procedure.--A qualified State, a qualified metropolitan city,
and a qualified urban county shall--
(1) enter into a loan agreement on behalf of the Secretary
on terms established under this Act and any other terms such
State, qualified metropolitan city, or qualified urban county
determines appropriate;
(2) disburse the loan amount in accordance with such terms,
subject only to the absence of sufficient loan authority amount
for such State, such qualified metropolitan city, or such
qualified urban county;
(3) monitor such loans; and
(4) collect and transmit to the Secretary any loan
repayments.
(f) Eligibility for Repeat Lending.--A loan under this Act may be
made to an entity that has previously borrowed amounts under a loan
under this Act only if such entity has repaid 90 percent or more of the
amounts due under all previous such loans. The Secretary may waive such
requirement upon a request by an allocation recipient if the borrower
has demonstrated satisfactory progress in utilizing outstanding loans
and sufficient capacity to utilize additional loan amounts effectively.
(g) Sunset.--The Secretary may not enter into any commitment to
make a loan under this Act, or make any such loan, after the expiration
of the 48-month period beginning on the date of the enactment of this
Act.
SEC. 7. GRANTS.
The grant amount of an allocation recipient may be used under
section 8(b) by the allocation recipient, a unit of local government or
a local governmental entity, or a nonprofit organization.
SEC. 8. ELIGIBLE HOUSING STIMULUS ACTIVITIES.
(a) Loan Amounts.--Amounts provided under a loan under this Act for
an allocation recipient shall be used, in accordance with the approved
plan of such allocation recipient, only for the following activities:
(1) Homeownership housing provision.--To purchase or
finance the purchase of qualified foreclosed housing for resale
as housing for homeownership to families having incomes that do
not exceed 140 percent of the median income for the area in
which the housing is located.
(2) Rental housing provision.--To purchase or finance the
purchase of qualified foreclosed housing for use as rental,
lease-purchase, or rent-to-own housing, subject to the
following requirements:
(A) Qualified tenants.--All dwelling units in the
housing purchased or financed using any loan amounts
shall be available for rental only by families whose
incomes do not exceed 100 percent of the median income
for the area in which the housing is located.
(B) Rents.--Rents for each dwelling unit in the
housing purchased or financed using any loan amounts
shall be established at amounts that do not exceed
market rents for comparable dwelling units located in
the area in which the housing is located and in
accordance with such requirements as the Secretary
shall establish to ensure that rents are established in
a fair, objective, and arms-length manner.
(3) Housing rehabilitation.--To rehabilitate qualified
foreclosed housing acquired with assistance provided pursuant
to this subsection, to the extent necessary to comply with
applicable laws, codes, and other requirements relating to
housing safety, quality, and habitability, or to make
improvements to the housing to increase the energy efficiency
or conservation of the housing or provide a renewable energy
source or sources for the housing, for the purpose of reselling
the housing, to the extent possible, during the 3-month period
that begins upon completion of rehabilitation and at a price
that is as close as possible to the acquisition price of the
housing.
(b) Grant Amounts.--Grant amounts provided under this Act to an
allocation recipient shall be used, in accordance with the approved
plan of such allocation recipient, only for the following activities:
(1) Operating and holding costs.--For costs of holding and
operating qualified foreclosed housing acquired pursuant to
subsection (a), including expenses incurred operating housing
assisted under this Act with respect to the administration,
maintenance, repair, security, utilities, fuel, furnishings,
equipment, management, taxes, handling, insurance, and other
related costs.
(2) Costs relating to property acquisition.--For incidental
costs involved in acquiring qualified foreclosed housing
pursuant to subsection (a), including reasonable closing costs,
except that grant amounts may not be used to pay any portion of
the purchase price for the housing under section 13(7)(C).
(3) Administrative costs.--For costs of the allocation
recipient in administering loan authority amounts and grant
amounts under this Act, except that the amount of grant amounts
provided under this Act to an allocation recipient that may be
used under this paragraph shall not exceed the amount equal to
8 percent of the sum of the grant amounts provided to the
allocation recipient pursuant to subsection (a), (f), or (g) of
section 5, as applicable, and the loan authority amount
allocated to the allocation recipient pursuant to subsection
(b), (f), or (g) of section 5, as applicable.
(4) Planning costs.--For planning costs of the State in
connection with this Act, except that the amount of grant
amounts provided under this Act to an allocation recipient that
may be used under this paragraph shall not exceed the amount
equal to 2 percent of the sum of the grant amounts provided to
the allocation recipient pursuant to subsection (a), (f), or
(g) of section 5, as applicable, and the loan authority amount
allocated to the State pursuant to subsection (b), (f), or (g)
of section 5, as applicable.
(5) Housing rehabilitation.--For activities set forth in
subsection (a)(3), except that an allocation recipient shall
not use more than 20 percent of a grant amount allocation for
such activities.
(6) Demolition.--For costs of demolishing qualified
foreclosed housing that is deteriorated or unsafe, but amounts
may be used under this paragraph only if the Secretary
determines that the neighborhood or other area in which the
housing is located has a high incidence of vacant and abandoned
housing (or other vacant and abandoned structures) and is
experiencing a significant decline in population.
Notwithstanding any other provision of this subsection, grant amounts
provided under this Act may not be used to provide assistance of any
kind (including grants, loans, and closing cost financing) to provide
amounts for downpayments for any homebuyers of single family housing.
(c) Prohibited Uses.--The Secretary shall, by regulation, set forth
prohibited uses of grant or loan amounts under this Act, which shall
include use for--
(1) political activities;
(2) advocacy;
(3) lobbying, whether directly or through other parties;
(4) counseling services;
(5) travel expenses; and
(6) preparing or providing advice on tax returns.
(d) Income Targeting Requirement.--
(1) Very low-income families.--Not less than 50 percent of
the total grant amounts an allocation recipient makes available
under this Act shall be used for activities under subsection
(b) in connection with providing housing for families whose
incomes do not exceed 50 percent of the median income for the
area in which the housing is located.
(2) Extremely low-income families.--Not less than 50
percent of the total grant amounts an allocation recipient
makes available under paragraph (1) shall be used for
activities under subsection (b) in connection with providing
housing for families whose incomes do not exceed 30 percent of
the median income for the area in which the housing is located.
(3) Waiver.--
(A) In general.--The Secretary may establish a
percentage for purposes of paragraph (2) that is less
than 50 percent if an allocation recipient certifies
that, in addition to any other requirements the
Secretary may establish--
(i) such allocation recipient has attempted
to use all other federally related resources
available to it in combination with the
resources available under this Act to meet the
requirements of paragraph (2); and
(ii) the failure to comply with paragraph
(2) will not result in an overall loss of
housing affordable to families whose incomes do
not exceed 30 percent of area median income in
the area of such allocation recipient.
(B) Consideration of housing needs.--In
establishing an alternative percentage for purposes of
paragraph (2) for an allocation recipient that meets
the certification requirements of subparagraph (A), the
Secretary shall take into consideration the housing
needs in the area of such allocation recipient of
families whose incomes do not exceed 30 percent of area
median income.
(e) Use for Rural Areas.--An allocation recipient receiving any
grant or loan amounts under this Act that includes any rural areas
shall use a portion of its grant and loan authority amount for eligible
activities located in rural areas that is proportionate to the
identified need for such activities in such rural areas.
(f) Security.--A qualified State, or at its election, a qualified
metropolitan city or qualified urban county, shall record a lien in the
name of the Secretary on any qualified foreclosed housing purchased or
financed with a loan under this section in the amount of the principal
obligation under the loan and interest due under the loan.
(g) Qualified Homeowners.--This Act may not be construed to prevent
the resale of qualified foreclosed housing to a prior owner or occupant
of such housing who meets the income requirements of this Act.
(h) Voucher Nondiscrimination.--
(1) Prospective tenants.--A recipient of amounts from a
loan or grant under this Act may not refuse to lease a dwelling
unit in housing assisted with any such loan or grant amounts to
a holder of a voucher or certificate of eligibility under
section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f) because of the status of the prospective tenant as such
a holder.
(2) Current tenants.--In the case of any qualified
foreclosed housing for which funds made available under the Act
are used and in which a recipient of assistance under section
8(o) of the U.S. Housing Act of 1937 resides at the time of
acquisition or financing, the owner and any successor in
interest shall be subject to the lease and to the housing
assistance payments contract for the occupied unit. Vacating
the property prior to sale shall not constitute good cause for
termination of the tenancy unless the property is unmarketable
while occupied or unless the owner or subsequent purchaser
desires the unit for personal or family use. This paragraph
shall not preempt any State or local law that provides more
protection for tenants.
(i) Effect of Foreclosure on Preexisting Lease.--
(1) In general.--In the case of any foreclosure on any
dwelling or residential real property acquired with any amounts
made available under this Act, any successor in interest in
such property pursuant to the foreclosure shall assume such
interest subject to--
(A) the provision, by the successor in interest, of
a notice to vacate to any bona fide tenant at least 90
days before the effective date of the notice to vacate;
and
(B) the rights of any bona fide tenant, as of the
date of such notice of foreclosure--
(i) under any bona fide lease entered into
before the notice of foreclosure to occupy the
premises until the end of the remaining term of
the lease or the end of the 6-month period
beginning on the date of the notice of
foreclosure, whichever occurs first, subject to
the receipt by the tenant of the 90-day notice
under subparagraph (A); or
(ii) without a lease or with a lease
terminable at will under State law, subject to
the receipt by the tenant of the 90-day notice
under subparagraph (A), except that nothing
under this subparagraph shall affect the
requirements for termination of any federally
subsidized tenancy.
(2) Bona fide lease or tenancy.--For purposes of this
subsection, a lease or tenancy shall be considered bona fide
only if--
(A) the mortgagor under the contract is not the
tenant;
(B) the lease or tenancy was the result of an arms-
length transaction; or
(C) the lease or tenancy requires the receipt of
rent that is not substantially less than fair market
rent for the property.
(j) Prohibition of Demolition of Public Housing.--Notwithstanding
any other provision of this Act, amounts from a grant or loan under
this Act may not be used to demolish any public housing (as such term
is defined in section 3 of the United States Housing Act of 1937 (42
U.S.C. 1437a)).
SEC. 9. SHARED APPRECIATION AGREEMENT.
Notwithstanding any other provision of this Act, no amounts from a
loan or grant under this Act may be used under section 8 for any
qualified foreclosed housing unless such binding agreements are entered
into, in accordance with such requirements as the Secretary shall
establish, that ensure that the Federal Government shall, upon any sale
or disposition of the qualified foreclosed housing by the owner who
acquires the housing pursuant to assistance under this Act, receive an
amount equal to 20 percent of the difference between the net proceeds
from such sale or disposition and the cost of such acquisition of the
housing pursuant to assistance under this Act, after deductions for
expenditures paid or incurred after the date of such acquisition that
are properly chargeable to capital account (within the meaning of
section 1016 of the Internal Revenue Code of 1986) with respect to such
housing. In the case of a for-profit owner, this section shall be
applied by substituting ``50 percent'' for ``20 percent''.
SEC. 10. SPENDING REQUIREMENTS.
(a) In General.--Each allocation recipient that receives a grant
under this Act or is allocated loan authority amounts under this Act
pursuant to section 5(b) shall--
(1) commence obligation of such grant amounts and
commitment of such loan authority amounts not later than the
expiration of the 120-day period that begins upon approval of
the approved plan of allocation recipient;
(2) obligate all such grant amounts and enter into
commitments for all such loan authority amounts not later than
the expiration of the 180-day period beginning upon such
approval; and
(3) except as provided in subsection (b) of this section,
outlay all such grant amounts and disburse all such loan
authority amounts not later than the 24-month period that
begins upon such approval.
This subsection shall not apply to loan authority amounts of an
allocation recipient attributable, pursuant to section 6(b)(2), to
repayment of principal amounts of loans under this Act.
(b) Exception to Spending Requirement.--If an allocation recipient
in good faith makes a request, in the plan submitted to the Secretary
pursuant to section 4 or otherwise after approval of such plan, for
extension of the period referred to in paragraph (1), (2), or (3) of
subsection (a) of this section, the Secretary may extend the period for
not more than 5 months.
SEC. 11. SERVICER CONTACT.
The servicer of a federally related mortgage loan (as such term is
defined in section 3 of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2602)) shall notify the unit of general local
government in which the property securing the mortgage is located upon
becoming responsible for a qualified foreclosed property and provide
such unit of general local government with the name and 24-hour contact
information of a representative authorized to negotiate purchases.
SEC. 12. ACCOUNTABILITY.
(a) Reporting.--Each allocation recipient that receives a grant or
allocation of loan authority amount under this Act shall submit a
report to the Secretary, not later than the expiration of the 12-month
period beginning upon the approval of the qualified plan by the
Secretary, regarding use of such amounts which shall contain such
information, including information about the location and type of
assisted properties and the income of families purchasing or renting
housing assisted under this Act, as the Secretary shall require.
(b) Misuse of Amounts.--If the Secretary determines that any
amounts from a grant or loan under this Act for an allocation recipient
or other recipient of grant or loans funds has been used in a manner
that is in violation of this Act, any regulations issued under this
Act, or any requirements or conditions under which such amounts were
provided, the Secretary shall require the allocation recipient or other
recipient of grant or loans funds to reimburse the Treasury of the
United States in the amount of any such misused funds.
(c) Hold Harmless.--Notwithstanding subsection (b), a State shall
not be required to reimburse the Treasury of the United States for any
misused funds such State is required to allocate to a qualified
metropolitan city or qualified urban county under subsection (f) or (g)
of section 5, respectively.
SEC. 13. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) Allocation recipient.--The term ``allocation
recipient'' means--
(A) a qualified State;
(B) a qualified metropolitan city; and
(C) a qualified urban county.
(2) Allocation recipient administrator.--The term
``allocation recipient administrator'' means the entity that is
designated, pursuant to section 4(b)(1), in the approved plan
of the allocation recipient to act for the allocation recipient
for purposes of this Act.
(3) Approved plan.--The term ``approved plan'' means a plan
of an allocation recipient that has been approved pursuant to
section 4.
(4) Covered multifamily housing.--The term ``covered
multifamily housing'' means a residential structure that
consists of 64 or fewer dwelling units.
(5) Loan authority amount.--The term ``loan authority
amount'' means, with respect to an allocation recipient, the
amount of loan authority available pursuant to section 14(b)(1)
that is allocated for the allocation recipient pursuant to
subsection (b), (f), or (g) of section 5, as applicable, as
such amount may be increased or decreased pursuant to section
6(b).
(6) Nonprofit organization.--The term ``nonprofit
organization'' has the meaning given such term in section 104
of the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12704).
(7) Qualified foreclosed housing.--The term ``qualified
foreclosed housing'' means housing that--
(A)(i) is single family housing that is not
occupied by an owner, pursuant to foreclosure or
assignment of the mortgage on the housing or forfeiture
of the housing; or
(ii) is covered multifamily housing;
(B) is owned by a lender, mortgage company,
investor, financial institution, or other such entity,
or any government entity, pursuant to foreclosure or
assignment of the mortgage on the housing or forfeiture
of the housing; and
(C) has a purchase price--
(i) in the case of single family housing,
that does not exceed the lesser of--
(I) 110 percent of the average
purchase price for single family
housing in the area in which the
housing is located, as determined by
the Secretary; or
(II) the current appraised value of
the property;
except that in the case of any such housing
that has an appraised value that is less than
110 percent of the average purchase price for
single family housing in the area in which the
housing is located, an allocation recipient may
appeal such appraisal to the Secretary and the
Secretary may determine that the average
purchase price shall operate as the cap on the
purchase price; and
(ii) in the case of covered multifamily
housing, that does not exceed the dollar amount
limitation, for housing of the applicable size
located in the area in which the housing is
located, on the amount of a principal
obligation of a mortgage eligible for insurance
under section 207 of the National Housing Act
(12 U.S.C. 1713), as in effect on the date of
the enactment of this Act pursuant to such
section 207(c)(3)(A) and section 206A of such
Act (12 U.S.C. 1712a).
(8) Qualified metropolitan city.--The term ``qualified
metropolitan city'' means an incorporated place, for which
there is an improved plan, that--
(A) is among the 100 most populous incorporated
places in the United States, as determined according to
data from the most recent decennial census that is
published before the date of the enactment of this Act;
or
(B)(i) has a minimum population of 50,000, as
determined according to data from the most recent
decennial census that is published before the date of
the enactment of this Act; and
(ii) has a foreclosure rate that exceeds 125
percent of the foreclosure rate for the entire State.
(9) Qualified state.--The term ``qualified State'' means a
State for which there is an approved plan.
(10) Qualified urban county.--The term ``qualified urban
county'' means an urban county (as such term is defined in
section 102 of the Housing and Community Development Act of
1974 (42 U.S.C. 5302)), for which there is an approved plan,
that is among the 50 most populous urban counties in the United
States, as determined--
(A) according to data from the most recent
decennial census; and
(B) excluding the population of any qualified
metropolitan city within such urban county, unless such
metropolitan city has agreed to have its population
included with the population of the county for the
purposes of this Act.
(11) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(12) Single family housing.--The term ``single family
housing'' means a residential structure consisting of from one
to four dwelling units.
(13) State.--The term ``State'' means any State 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, and other territory
or possession of the United States.
SEC. 14. FUNDING.
(a) Grants.--There is authorized to be appropriated to the
Secretary of the Treasury $7,500,000,000 for grants under this Act.
(b) Direct Loans.--
(1) Loan commitment authority limitation.--Subject only to
the availability of sufficient amounts for the costs (as such
term is defined in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a)) of such loans and the absence of
qualified requests for loans, the Secretary shall enter into
commitments to make loans under this Act, and shall make such
loans, in an amount such that the aggregate outstanding
principal balance of such loans does not at any time exceed
$7,500,000,000.
(2) Authorization of appropriations for costs.--There is
authorized to be appropriated such sums as may be necessary for
costs (as such term is defined in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a)) of loans under this
Act.
SEC. 15. PROTECTION OF RIGHT TO BEAR ARMS.
Nothing in this Act shall affect the right to bear arms under the
Second Amendment to the Constitution of the United States.
SEC. 16. INELIGIBLITY OF ILLEGAL ALIENS FOR ASSISTANCE.
Aliens who are not lawfully present in the United States shall be
ineligible for financial assistance under this Act, as provided and
defined by section 214 of the Housing and Community Development Act of
1980 (42 U.S.C. 1436a). Nothing in this Act shall be construed to alter
the restrictions or definitions in such section 214.
SEC. 17. REGULATIONS AND IMPLEMENTATION.
(a) Regulations.--The Secretary shall issue any regulations
necessary to carry out this Act.
(b) Implementation.--Pending the effectiveness of regulations
issued pursuant to subsection (a), the Secretary shall take such action
as may be necessary to implement this Act by notice, guidance, and
interim rules.
Passed the House of Representatives May 8, 2008.
Attest:
Clerk.
110th CONGRESS
2d Session
H. R. 5818
_______________________________________________________________________
AN ACT
To authorize the Secretary of Housing and Urban Development to make
loans to States to acquire foreclosed housing and to make grants to
States for related costs.