
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: 42USC12874]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                CHAPTER 130--NATIONAL AFFORDABLE HOUSING
 
 SUBCHAPTER IV--HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY AND SINGLE FAMILY 
                                  HOMES
 
           Part A--HOPE for Homeownership of Multifamily Units
 
Sec. 12874. Homeownership program requirements


(a) In general

    A homeownership program under this part 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 part 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 part 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 part 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 [12 U.S.C. 1707 et seq.].

                   (2) Prohibition against pledges

        Property transferred under this part 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) of this 
        section or to make such additional capital improvements as the 
        Secretary determines to be consistent with the purposes of this 
        part.

                       (3) Opportunity to cure

        Any lender that provides financing in connection with a 
    homeownership program under this part 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.\1\
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    \1\ See References in Text note below.
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(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 part.

                        (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 1437f of 
    this title 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.

(Pub. L. 101-625, title IV, Sec. 424, Nov. 28, 1990, 104 Stat. 4166.)

                       References in Text

    The National Housing Act, referred to in subsec. (e)(1), is act June 
27, 1934, ch. 847, 48 Stat. 1246, as amended. Title II of the Act is 
classified principally to subchapter II (Sec. 1707 et seq.) of chapter 
13 of Title 12, Banks and Banking. For complete classification of this 
Act to the Code, see section 1701 of Title 12 and Tables.
    This title, referred to in subsec. (f)(2), is title IV of Pub. L. 
101-625, Nov. 28, 1990, 104 Stat. 4148, known as the Homeownership and 
Opportunity Through HOPE Act, which enacted this subchapter and 
subchapter II-A (Sec. 1437aaa et seq.) of chapter 8 of this title, 
amended sections 1437c, 1437f, 1437l, 1437p, 1437r, and 1437s of this 
title and section 1709 of Title 12, and enacted provisions set out as 
notes under sections 1437c, 1437aa, and 1437aaa of this title. For 
complete classification of title IV to the Code, see Short Title note 
set out under section 1437aaa of this title and Tables.
    Section 1437f of this title, referred to in subsec. (g)(2), was in 
the original ``section 8'', and was translated as reading ``section 8 of 
the United States Housing Act of 1937'' to reflect the probable intent 
of Congress.

                  Section Referred to in Other Sections

    This section is referred to in section 12873 of this title.
