
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: 42USC1437aaa-3]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
         SUBCHAPTER II-A--HOPE FOR PUBLIC HOUSING HOMEOWNERSHIP
 
Sec. 1437aaa-3. Homeownership program requirements


(a) In general

    A homeownership program under this subchapter 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 subchapter 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 subchapter 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 subchapter may not consist of 
acquisition or rehabilitation of less than the whole public housing 
project 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 [12 U.S.C. 1707 et seq.].

                   (2) Prohibition against pledges

        Property transferred under this subchapter 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 
        subchapter.

                       (3) Opportunity to cure

        Any lender that provides financing in connection with a 
    homeownership program under this subchapter 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 subchapter.

(g) Repealed. Pub. L. 105-276, title V, Sec. 531(b)(1), Oct. 21, 1998, 
        112 Stat. 2573

(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 subchapter.

                     (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 1437a(a) of 
    this title 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 [42 U.S.C. 1437f] 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 
    subchapter shall have all rights provided to tenants of public 
    housing under this chapter.

(Sept. 1, 1937, ch. 896, title III, Sec. 304, as added Pub. L. 101-625, 
title IV, Sec. 411, Nov. 28, 1990, 104 Stat. 4153; amended Pub. L. 102-
550, title I, Sec. 181(g)(1)(A), Oct. 28, 1992, 106 Stat. 3736; Pub. L. 
104-19, title I, Sec. 1002(b), July 27, 1995, 109 Stat. 236; Pub. L. 
105-276, title V, Sec. 531(b)(1), Oct. 21, 1998, 112 Stat. 2573.)

                       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 subchapter, referred to in subsec. (e)(3), was in the original 
``this subtitle'', and was translated as reading ``this title'', meaning 
title III of act Sept. 1, 1937, ch. 896, as added by Pub. L. 101-625, to 
reflect the probable intent of Congress, because title III of act Sept. 
1, 1937, does not contain subtitles.


                               Amendments

    1998--Subsec. (g). Pub. L. 105-276 struck out subsec. (g) which 
prohibited transfer of projects without plan for replacement housing. 
See 1995 Amendment note below.
    1995--Subsec. (g). Pub. L. 104-19 struck out subsec. (g) which 
prohibited transfer of projects without plan for replacement housing.
    1992--Subsec. (d). Pub. L. 102-550 struck out ``(not including 
scattered site single family housing of a public housing agency)'' after 
``housing project''.


                    Effective Date of 1998 Amendment

    Amendment by section 531(b)(1) of Pub. L. 105-276 effective with 
respect to any plan for the demolition, disposition, or conversion to 
homeownership of public housing that is approved by Secretary after 
Sept. 30, 1995, see section 531(b)(2) of Pub. L. 105-276, set out as a 
note below.


                    Effective Date of 1995 Amendment

    Amendment by Pub. L. 104-19 effective for applications for 
demolition, disposition, or conversion to homeownership of public 
housing approved by the Secretary, and other consolidation and 
relocation activities of public housing agencies undertaken on, before, 
or after Sept. 30, 1995, and on or before Sept. 30, 1998, see section 
1002(d) of Pub. L. 104-19, as amended, set out as a note under section 
1437c of this title.


                     Homeownership Replacement Plan

    Pub. L. 105-276, title V, Sec. 531(b), Oct. 21, 1998, 112 Stat. 
2573, provided that:
    ``(1) In general.--Notwithstanding subsections (b) and (c) of 
section 1002 of the Emergency Supplemental Appropriations for Additional 
Disaster Assistance, for Anti-terrorism Initiatives, for Assistance in 
the Recovery from the Tragedy that Occurred At Oklahoma City, and 
Rescissions Act, 1995 [amending this section and enacting provision set 
out as a note under section 1437c of this title] (Public Law 104-19; 109 
Stat. 236), subsection (g) of section 304 of the United States Housing 
Act of 1937 (42 U.S.C. 1437aaa-3(g)) is repealed.
    ``(2) Effective date.--The amendment made by paragraph (1) shall be 
effective with respect to any plan for the demolition, disposition, or 
conversion to homeownership of public housing that is approved by the 
Secretary after September 30, 1995.''

                  Section Referred to in Other Sections

    This section is referred to in section 1437aaa-2 of this title.
