
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC12802]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                CHAPTER 130--NATIONAL AFFORDABLE HOUSING
 
             SUBCHAPTER II--INVESTMENT IN AFFORDABLE HOUSING
 
                    Part D--Specified Model Programs
 
Sec. 12802. 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 12749(b) of 
        this title.

(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 12744 
        of this title;
            (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 
        subchapter, 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 November 28, 1990.

(Pub. L. 101-625, title II, Sec. 252, Nov. 28, 1990, 104 Stat. 4119.)
