
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: 42USC12895]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                CHAPTER 130--NATIONAL AFFORDABLE HOUSING
 
 SUBCHAPTER IV--HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY AND SINGLE FAMILY 
                                  HOMES
 
          Part B--HOPE for Homeownership of Single Family Homes
 
Sec. 12895. Other program requirements


(a) Cost limitations

    The Secretary may establish cost limitations on eligible activities 
under this part, subject to the provisions of this part.

(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 part, 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 part 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 part.

(h) \1\ Records and audit of recipients of assistance
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    \1\ So in original. Probably should be ``(f)''.
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                           (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 part 
    (and any proceeds from financing obtained or sales under subsections 
    (b) and (c) of this section), 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 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 part.

                  (3) Access by 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 part.

(Pub. L. 101-625, title IV, Sec. 445, Nov. 28, 1990, 104 Stat. 4177.)
