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[CITE: 42USC1437f]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
            SUBCHAPTER I--GENERAL PROGRAM OF ASSISTED HOUSING
 
Sec. 1437f. Low-income housing assistance


(a) Authorization for assistance payments

    For the purpose of aiding low-income families in obtaining a decent 
place to live and of promoting economically mixed housing, assistance 
payments may be made with respect to existing housing in accordance with 
the provisions of this section.

(b) Other existing housing programs

    (1) In general.--The Secretary is authorized to enter into annual 
contributions contracts with public housing agencies pursuant to which 
such agencies may enter into contracts to make assistance payments to 
owners of existing dwelling units in accordance with this section. In 
areas where no public housing agency has been organized or where the 
Secretary determines that a public housing agency is unable to implement 
the provisions of this section, the Secretary is authorized to enter 
into such contracts and to perform the other functions assigned to a 
public housing agency by this section.
    (2) The Secretary is authorized to enter into annual contributions 
contracts with public housing agencies for the purpose of replacing 
public housing transferred in accordance with subchapter II-A of this 
chapter. Each contract entered into under this subsection shall be for a 
term of not more than 60 months.

(c) Contents and purposes of contracts for assistance payments; amount 
        and scope of monthly assistance payments

    (1) An assistance contract entered into pursuant to this section 
shall establish the maximum monthly rent (including utilities and all 
maintenance and management charges) which the owner is entitled to 
receive for each dwelling unit with respect to which such assistance 
payments are to be made. The maximum monthly rent shall not exceed by 
more than 10 per centum the fair market rental established by the 
Secretary periodically but not less than annually for existing or newly 
constructed rental dwelling units of various sizes and types in the 
market area suitable for occupancy by persons assisted under this 
section, except that the maximum monthly rent may exceed the fair market 
rental (A) by more than 10 but not more than 20 per centum where the 
Secretary determines that special circumstances warrant such higher 
maximum rent or that such higher rent is necessary to the implementation 
of a housing strategy as defined in section 12705 of this title, or (B) 
by such higher amount as may be requested by a tenant and approved by 
the public housing agency in accordance with paragraph (3)(B). In the 
case of newly constructed and substantially rehabilitated units, the 
exception in the preceding sentence shall not apply to more than 20 per 
centum of the total amount of authority to enter into annual 
contributions contracts for such units which is allocated to an area and 
obligated with respect to any fiscal year beginning on or after October 
1, 1980. Proposed fair market rentals for an area shall be published in 
the Federal Register with reasonable time for public comment, and shall 
become effective upon the date of publication in final form in the 
Federal Register. Each fair market rental in effect under this 
subsection shall be adjusted to be effective on October 1 of each year 
to reflect changes, based on the most recent available data trended so 
the rentals will be current for the year to which they apply, of rents 
for existing or newly constructed rental dwelling units, as the case may 
be, of various sizes and types in the market area suitable for occupancy 
by persons assisted under this section. Notwithstanding any other 
provision of this section, after October 12, 1977, the Secretary shall 
prohibit high-rise elevator projects for families with children unless 
there is no practical alternative. The Secretary shall establish 
separate fair market rentals under this paragraph for Westchester County 
in the State of New York. The Secretary shall also establish separate 
fair market rentals under this paragraph for Monroe County in the 
Commonwealth of Pennsylvania. In establishing fair market rentals for 
the remaining portion of the market area in which Monroe County is 
located, the Secretary shall establish the fair market rentals as if 
such portion included Monroe County. If units assisted under this 
section are exempt from local rent control while they are so assisted or 
otherwise, the maximum monthly rent for such units shall be reasonable 
in comparison with other units in the market area that are exempt from 
local rent control.
    (2)(A) The assistance contract shall provide for adjustment annually 
or more frequently in the maximum monthly rents for units covered by the 
contract to reflect changes in the fair market rentals established in 
the housing area for similar types and sizes of dwelling units or, if 
the Secretary determines, on the basis of a reasonable formula. However, 
where the maximum monthly rent, for a unit in a new construction, 
substantial rehabilitation, or moderate rehabilitation project, to be 
adjusted using an annual adjustment factor exceeds the fair market 
rental for an existing dwelling unit in the market area, the Secretary 
shall adjust the rent only to the extent that the owner demonstrates 
that the adjusted rent would not exceed the rent for an unassisted unit 
of similar quality, type, and age in the same market area, as determined 
by the Secretary. The immediately foregoing sentence shall be effective 
only during fiscal year 1995, fiscal year 1996 prior to April 26, 1996, 
and fiscal years 1997 and 1998, and during fiscal year 1999 and 
thereafter. Except for assistance under the certificate program, for any 
unit occupied by the same family at the time of the last annual rental 
adjustment, where the assistance contract provides for the adjustment of 
the maximum monthly rent by applying an annual adjustment factor and 
where the rent for a unit is otherwise eligible for an adjustment based 
on the full amount of the factor, 0.01 shall be subtracted from the 
amount of the factor, except that the factor shall not be reduced to 
less than 1.0. In the case of assistance under the certificate program, 
0.01 shall be subtracted from the amount of the annual adjustment factor 
(except that the factor shall not be reduced to less than 1.0), and the 
adjusted rent shall not exceed the rent for a comparable unassisted unit 
of similar quality, type, and age in the market area. The immediately 
foregoing two sentences shall be effective only during fiscal year 1995, 
fiscal year 1996 prior to April 26, 1996, and fiscal years 1997 and 
1998, and during fiscal year 1999 and thereafter. In establishing annual 
adjustment factors for units in new construction and substantial 
rehabilitation projects, the Secretary shall take into account the fact 
that debt service is a fixed expense. The immediately foregoing sentence 
shall be effective only during fiscal year 1998.
    (B) The contract shall further provide for the Secretary to make 
additional adjustments in the maximum monthly rent for units under 
contract to the extent he determines such adjustments are necessary to 
reflect increases in the actual and necessary expenses of owning and 
maintaining the units which have resulted from substantial general 
increases in real property taxes, utility rates, or similar costs which 
are not adequately compensated for by the adjustment in the maximum 
monthly rent authorized by subparagraph (A). The Secretary shall make 
additional adjustments in the maximum monthly rent for units under 
contract (subject to the availability of appropriations for contract 
amendments) to the extent the Secretary determines such adjustments are 
necessary to reflect increases in the actual and necessary expenses of 
owning and maintaining the units that have resulted from the expiration 
of a real property tax exemption. Where the Secretary determines that a 
project assisted under this section is located in a community where 
drug-related criminal activity is generally prevalent and the project's 
operating, maintenance, and capital repair expenses have been 
substantially increased primarily as a result of the prevalence of such 
drug-related activity, the Secretary may (at the discretion of the 
Secretary and subject to the availability of appropriations for contract 
amendments for this purpose), on a project by project basis, provide 
adjustments to the maximum monthly rents, to a level no greater than 120 
percent of the project rents, to cover the costs of maintenance, 
security, capital repairs, and reserves required for the owner to carry 
out a strategy acceptable to the Secretary for addressing the problem of 
drug-related criminal activity. Any rent comparability standard required 
under this paragraph may be waived by the Secretary to so implement the 
preceding sentence. The Secretary may (at the discretion of the 
Secretary and subject to the availability of appropriations for contract 
amendments), on a project by project basis for projects receiving 
project-based assistance, provide adjustments to the maximum monthly 
rents to cover the costs of evaluating and reducing lead-based paint 
hazards, as defined in section 4851b of this title.
    (C) Adjustments in the maximum rents under subparagraphs (A) and (B) 
shall not result in material differences between the rents charged for 
assisted units and unassisted units of similar quality, type, and age in 
the same market area, as determined by the Secretary. In implementing 
the limitation established under the preceding sentence, the Secretary 
shall establish regulations for conducting comparability studies for 
projects where the Secretary has reason to believe that the application 
of the formula adjustments under subparagraph (A) would result in such 
material differences. The Secretary shall conduct such studies upon the 
request of any owner of any project, or as the Secretary determines to 
be appropriate by establishing, to the extent practicable, a modified 
annual adjustment factor for such market area, as the Secretary shall 
designate, that is geographically smaller than the applicable housing 
area used for the establishment of the annual adjustment factor under 
subparagraph (A). The Secretary shall establish such modified annual 
adjustment factor on the basis of the results of a study conducted by 
the Secretary of the rents charged, and any change in such rents over 
the previous year, for assisted units and unassisted units of similar 
quality, type, and age in the smaller market area. Where the Secretary 
determines that such modified annual adjustment factor cannot be 
established or that such factor when applied to a particular project 
would result in material differences between the rents charged for 
assisted units and unassisted units of similar quality, type, and age in 
the same market area, the Secretary may apply an alternative methodology 
for conducting comparability studies in order to establish rents that 
are not materially different from rents charged for comparable 
unassisted units. If the Secretary or appropriate State agency does not 
complete and submit to the project owner a comparability study not later 
than 60 days before the anniversary date of the assistance contract 
under this section, the automatic annual adjustment factor shall be 
applied. The Secretary may not reduce the contract rents in effect on or 
after April 15, 1987, for newly constructed, substantially 
rehabilitated, or moderately rehabilitated projects assisted under this 
section (including projects assisted under this section as in effect 
prior to November 30, 1983), unless the project has been refinanced in a 
manner that reduces the periodic payments of the owner. Any maximum 
monthly rent that has been reduced by the Secretary after April 14, 
1987, and prior to November 7, 1988, shall be restored to the maximum 
monthly rent in effect on April 15, 1987. For any project which has had 
its maximum monthly rents reduced after April 14, 1987, the Secretary 
shall make assistance payments (from amounts reserved for the original 
contract) to the owner of such project in an amount equal to the 
difference between the maximum monthly rents in effect on April 15, 
1987, and the reduced maximum monthly rents, multiplied by the number of 
months that the reduced maximum monthly rents were in effect.
    (3) The amount of the monthly assistance payment with respect to any 
dwelling unit shall be the difference between the maximum monthly rent 
which the contract provides that the owner is to receive for the unit 
and the rent the family is required to pay under section 1437a(a) of 
this title. Reviews of family income shall be made no less frequently 
than annually.
    (4) The assistance contract shall provide that assistance payments 
may be made only with respect to a dwelling unit under lease for 
occupancy by a family determined to be a lower income family at the time 
it initially occupied such dwelling unit, except that such payments may 
be made with respect to unoccupied units for a period not exceeding 
sixty days (A) in the event that a family vacates a dwelling unit before 
the expiration date of the lease for occupancy or (B) where a good faith 
effort is being made to fill an unoccupied unit, and, subject to the 
provisions of the following sentence, such payments may be made, in the 
case of a newly constructed or substantially rehabilitated project, 
after such sixty-day period in an amount equal to the debt service 
attributable to such an unoccupied dwelling unit for a period not to 
exceed one year, if a good faith effort is being made to fill the unit 
and the unit provides decent, safe, and sanitary housing. No such 
payment may be made after such sixty-day period if the Secretary 
determines that the dwelling unit is in a project which provides the 
owner with revenues exceeding the costs incurred by such owner with 
respect to such project.
    (5) The Secretary shall take such steps as may be necessary, 
including the making of contracts for assistance payments in amounts in 
excess of the amounts required at the time of the initial renting of 
dwelling units, the reservation of annual contributions authority for 
the purpose of amending housing assistance contracts, or the allocation 
of a portion of new authorizations for the purpose of amending housing 
assistance contracts, to assure that assistance payments are increased 
on a timely basis to cover increases in maximum monthly rents or 
decreases in family incomes.
    (6) Redesignated (5).
    (7) Repealed. Pub. L. 105-276, title V, Sec. 550(a)(3)(C), Oct. 21, 
1998, 112 Stat. 2609.
    (8)(A) Not less than one year before termination of any contract 
under which assistance payments are received under this section, other 
than a contract for tenant-based assistance under this section, an owner 
shall provide written notice to the Secretary and the tenants involved 
of the proposed termination. The notice shall also include a statement 
that, if the Congress makes funds available, the owner and the Secretary 
may agree to a renewal of the contract, thus avoiding termination, and 
that in the event of termination the Department of Housing and Urban 
Development will provide tenant-based rental assistance to all eligible 
residents, enabling them to choose the place they wish to rent, which is 
likely to include the dwelling unit in which they currently reside. Any 
contract covered by this paragraph that is renewed may be renewed for a 
period of up to 1 year or any number or years, with payments subject to 
the availability of appropriations for any year.
    (B) In the event the owner does not provide the notice required, the 
owner may not evict the tenants or increase the tenants' rent payment 
until such time as the owner has provided the notice and 1 year has 
elapsed. The Secretary may allow the owner to renew the terminating 
contract for a period of time sufficient to give tenants 1 year of 
advance notice under such terms and conditions as the Secretary may 
require.
    (C) Any notice under this paragraph shall also comply with any 
additional requirements established by the Secretary.
    (D) For purposes of this paragraph, the term ``termination'' means 
the expiration of the assistance contract or an owner's refusal to renew 
the assistance contract, and such term shall include termination of the 
contract for business reasons.

(d) Required provisions and duration of contracts for assistance 
        payments; waiver of limitation

    (1) Contracts to make assistance payments entered into by a public 
housing agency with an owner of existing housing units shall provide 
(with respect to any unit) that--
        (A) the selection of tenants shall be the function of the owner, 
    subject to the annual contributions contract between the Secretary 
    and the agency, except that with respect to the certificate and 
    moderate rehabilitation programs only, for the purpose of selecting 
    families to be assisted, the public housing agency may establish 
    local preferences, consistent with the public housing agency plan 
    submitted under section 1437c-1 of this title by the public housing 
    agency;
        (B)(i) the lease between the tenant and the owner shall be for 
    at least one year or the term of such contract, whichever is 
    shorter, and shall contain other terms and conditions specified by 
    the Secretary;
        (ii) during the term of the lease, the owner shall not terminate 
    the tenancy except for serious or repeated violation of the terms 
    and conditions of the lease, for violation of applicable Federal, 
    State, or local law, or for other good cause;
        (iii) during the term of the lease, any criminal activity that 
    threatens the health, safety, or right to peaceful enjoyment of the 
    premises by other tenants, any criminal activity that threatens the 
    health, safety, or right to peaceful enjoyment of their residences 
    by persons residing in the immediate vicinity of the premises, or 
    any drug-related criminal activity on or near such premises, engaged 
    in by a tenant of any unit, any member of the tenant's household, or 
    any guest or other person under the tenant's control, shall be cause 
    for termination of tenancy;
        (iv) any termination of tenancy shall be preceded by the owner's 
    provision of written notice to the tenant specifying the grounds for 
    such action; and
        (v) it shall be cause for termination of the tenancy of a tenant 
    if such tenant--
            (I) is fleeing to avoid prosecution, or custody or 
        confinement after conviction, under the laws of the place from 
        which the individual flees, for a crime, or attempt to commit a 
        crime, which is a felony under the laws of the place from which 
        the individual flees, or which, in the case of the State of New 
        Jersey, is a high misdemeanor under the laws of such State; or
            (II) is violating a condition of probation or parole imposed 
        under Federal or State law;

        (C) maintenance and replacement (including redecoration) shall 
    be in accordance with the standard practice for the building 
    concerned as established by the owner and agreed to by the agency; 
    and
        (D) the agency and the owner shall carry out such other 
    appropriate terms and conditions as may be mutually agreed to by 
    them.

    (2)(A) Each contract for an existing structure entered into under 
this section shall be for a term of not less than one month nor more 
than one hundred and eighty months. The Secretary shall permit public 
housing agencies to enter into contracts for assistance payments of less 
than 12 months duration in order to avoid disruption in assistance to 
eligible families if the annual contributions contract is within 1 year 
of its expiration date.
    (B)(i) In determining the amount of assistance provided under an 
assistance contract for project-based assistance under this paragraph or 
a contract for assistance for housing constructed or substantially 
rehabilitated pursuant to assistance provided under subsection (b)(2) of 
this section (as such subsection existed immediately before October 1, 
1983), the Secretary may consider and annually adjust, with respect to 
such project, for the cost of employing or otherwise retaining the 
services of one or more service coordinators under section 661 \1\ of 
the Housing and Community Development Act of 1992 [42 U.S.C. 13631] to 
coordinate the provision of any services within the project for 
residents of the project who are elderly or disabled families.
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    \1\ So in original. Probably should be section ``671''.
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    (ii) The budget authority available under section 1437c(c) of this 
title for assistance under this section is authorized to be increased by 
$15,000,000 on or after October 1, 1992, and by $15,000,000 on or after 
October 1, 1993. Amounts made available under this subparagraph shall be 
used to provide additional amounts under annual contributions contracts 
for assistance under this section which shall be made available through 
assistance contracts only for the purpose of providing service 
coordinators under clause (i) for projects receiving project-based 
assistance under this paragraph and to provide additional amounts under 
contracts for assistance for projects constructed or substantially 
rehabilitated pursuant to assistance provided under subsection (b)(2) of 
this section (as such subsection existed immediately before October 1, 
1983) only for such purpose.
    (C) An assistance contract for project-based assistance under this 
paragraph shall provide that the owner shall ensure and maintain 
compliance with subtitle C of title VI of the Housing and Community 
Development Act of 1992 [42 U.S.C. 13601 et seq.] and any regulations 
issued under such subtitle.
    (D) An owner of a covered section 8 housing project (as such term is 
defined in section 659 of the Housing and Community Development Act of 
1992 [42 U.S.C. 13619]) may give preference for occupancy of dwelling 
units in the project, and reserve units for occupancy, in accordance 
with subtitle D of title VI of the Housing and Community Development Act 
of 1992 [42 U.S.C. 13611 et seq.].
    (3) Notwithstanding any other provision of law, with the approval of 
the Secretary the public housing agency administering a contract under 
this section with respect to existing housing units may exercise all 
management and maintenance responsibilities with respect to those units 
pursuant to a contract between such agency and the owner of such units.
    (4) A public housing agency that serves more than one unit of 
general local government may, at the discretion of the agency, in 
allocating assistance under this section, give priority to disabled 
families that are not elderly families.
    (5) Calculation of limit.--Any contract entered into under section 
514 of the Multifamily Assisted Housing Reform and Affordability Act of 
1997 shall be excluded in computing the limit on project-based 
assistance under this subsection.
    (6) Treatment of common areas.--The Secretary may not provide any 
assistance amounts pursuant to an existing contract for project-based 
assistance under this section for a housing project and may not enter 
into a new or renewal contract for such assistance for a project unless 
the owner of the project provides consent, to such local law enforcement 
agencies as the Secretary determines appropriate, for law enforcement 
officers of such agencies to enter common areas of the project at any 
time and without advance notice upon a determination of probable cause 
by such officers that criminal activity is taking place in such areas.

(e) Restrictions on contracts for assistance payments

    (1) Nothing in this chapter shall be deemed to prohibit an owner 
from pledging, or offering as security for any loan or obligation, a 
contract for assistance payments entered into pursuant to this section: 
Provided, That such security is in connection with a project constructed 
or rehabilitated pursuant to authority granted in this section, and the 
terms of the financing or any refinancing have been approved by the 
Secretary.
    (2) Repealed. Pub. L. 101-625, title II, Sec. 289(b), Nov. 28, 1990, 
104 Stat. 4128.

(f) Definitions

    As used in this section--
        (1) the term ``owner'' means any private person or entity, 
    including a cooperative, an agency of the Federal Government, or a 
    public housing agency, having the legal right to lease or sublease 
    dwelling units;
        (2) the terms ``rent'' or ``rental'' mean, with respect to 
    members of a cooperative, the charges under the occupancy agreements 
    between such members and the cooperative;
        (3) the term ``debt service'' means the required payments for 
    principal and interest made with respect to a mortgage secured by 
    housing assisted under this chapter;
        (4) the term ``participating jurisdiction'' means a State or 
    unit of general local government designated by the Secretary to be a 
    participating jurisdiction under title II of the Cranston-Gonzalez 
    National Affordable Housing Act [42 U.S.C. 12721 et seq.];
        (5) the term ``drug-related criminal activity'' means the 
    illegal manufacture, sale, distribution, use, or possession with 
    intent to manufacture, sell, distribute, or use, of a controlled 
    substance (as defined in section 802 of title 21);
        (6) the term ``project-based assistance'' means rental 
    assistance under subsection (b) of this section that is attached to 
    the structure pursuant to subsection (d)(2) or (o)(13) of this 
    section; and
        (7) the term ``tenant-based assistance'' means rental assistance 
    under subsection (o) of this section that is not project-based 
    assistance and that provides for the eligible family to select 
    suitable housing and to move to other suitable housing.

(g) Regulations applicable for implementation of assistance payments

    Notwithstanding any other provision of this chapter, assistance 
payments under this section may be provided, in accordance with 
regulations prescribed by the Secretary, with respect to some or all of 
the units in any project approved pursuant to section 1701q of title 12.

(h) Nonapplicability of inconsistent provisions to contracts for 
        assistance payments

    Sections 1437c(e) and 1437d of this title (except as provided in 
section 1437d(j)(3) of this title), and any other provisions of this 
chapter which are inconsistent with the provisions of this section shall 
not apply to contracts for assistance entered into under this section.

(i) Receipt of assistance by public housing agency under other law not 
        to be considered

    The Secretary may not consider the receipt by a public housing 
agency of assistance under section 811(b)(1) of the Cranston-Gonzalez 
National Affordable Housing Act [42 U.S.C. 8013(b)(1)], or the amount 
received, in approving assistance for the agency under this section or 
determining the amount of such assistance to be provided.

(j) Repealed. Pub. L. 105-276, title V, Sec. 550(a)(6), Oct. 21, 1998, 
        112 Stat. 2609

(k) Verification of income

    The Secretary shall establish procedures which are appropriate and 
necessary to assure that income data provided to public housing agencies 
and owners by families applying for or receiving assistance under this 
section is complete and accurate. In establishing such procedures, the 
Secretary shall randomly, regularly, and periodically select a sample of 
families to authorize the Secretary to obtain information on these 
families for the purpose of income verification, or to allow those 
families to provide such information themselves. Such information may 
include, but is not limited to, data concerning unemployment 
compensation and Federal income taxation and data relating to benefits 
made available under the Social Security Act [42 U.S.C. 301 et seq.], 
the Food Stamp Act of 1977 [7 U.S.C. 2011 et seq.], or title 38. Any 
such information received pursuant to this subsection shall remain 
confidential and shall be used only for the purpose of verifying incomes 
in order to determine eligibility of families for benefits (and the 
amount of such benefits, if any) under this section.

(l), (m) Repealed. Pub. L. 98-181, title II, Sec. 209(a)(5), Nov. 30, 
        1983, 97 Stat. 1183

(n) Repealed. Pub. L. 105-276, title V, Sec. 550(a)(7), Oct. 21, 1998, 
        112 Stat. 2609

(o) Voucher program

                            (1) Authority

        (A) In general

            The Secretary may provide assistance to public housing 
        agencies for tenant-based assistance using a payment standard 
        established in accordance with subparagraph (B). The payment 
        standard shall be used to determine the monthly assistance that 
        may be paid for any family, as provided in paragraph (2).

        (B) Establishment of payment standard

            Except as provided under subparagraph (D), the payment 
        standard for each size of dwelling unit in a market area shall 
        not exceed 110 percent of the fair market rental established 
        under subsection (c) of this section for the same size of 
        dwelling unit in the same market area and shall be not less than 
        90 percent of that fair market rental.

        (C) Set-aside

            The Secretary may set aside not more than 5 percent of the 
        budget authority made available for assistance under this 
        subsection as an adjustment pool. The Secretary shall use 
        amounts in the adjustment pool to make adjusted payments to 
        public housing agencies under subparagraph (A), to ensure 
        continued affordability, if the Secretary determines that 
        additional assistance for such purpose is necessary, based on 
        documentation submitted by a public housing agency.

        (D) Approval

            The Secretary may require a public housing agency to submit 
        the payment standard of the public housing agency to the 
        Secretary for approval, if the payment standard is less than 90 
        percent of the fair market rental or exceeds 110 percent of the 
        fair market rental.

        (E) Review

            The Secretary--
                (i) shall monitor rent burdens and review any payment 
            standard that results in a significant percentage of the 
            families occupying units of any size paying more than 30 
            percent of adjusted income for rent; and
                (ii) may require a public housing agency to modify the 
            payment standard of the public housing agency based on the 
            results of that review.

              (2) Amount of monthly assistance payment

        Subject to the requirement under section 1437a(a)(3) of this 
    title (relating to minimum rental amount), the monthly assistance 
    payment for a family receiving assistance under this subsection 
    shall be determined as follows:

        (A) Tenant-based assistance; rent not exceeding payment standard

            For a family receiving tenant-based assistance, if the rent 
        for the family (including the amount allowed for tenant-paid 
        utilities) does not exceed the applicable payment standard 
        established under paragraph (1), the monthly assistance payment 
        for the family shall be equal to the amount by which the rent 
        (including the amount allowed for tenant-paid utilities) exceeds 
        the greatest of the following amounts, rounded to the nearest 
        dollar:
                (i) 30 percent of the monthly adjusted income of the 
            family.
                (ii) 10 percent of the monthly income of the family.
                (iii) If the family is receiving payments for welfare 
            assistance from a public agency and a part of those 
            payments, adjusted in accordance with the actual housing 
            costs of the family, is specifically designated by that 
            agency to meet the housing costs of the family, the portion 
            of those payments that is so designated.

        (B) Tenant-based assistance; rent exceeding payment standard

            For a family receiving tenant-based assistance, if the rent 
        for the family (including the amount allowed for tenant-paid 
        utilities) exceeds the applicable payment standard established 
        under paragraph (1), the monthly assistance payment for the 
        family shall be equal to the amount by which the applicable 
        payment standard exceeds the greatest of amounts under clauses 
        (i), (ii), and (iii) of subparagraph (A).

        (C) Families receiving project-based assistance

            For a family receiving project-based assistance, the rent 
        that the family is required to pay shall be determined in 
        accordance with section 1437a(a)(1) of this title, and the 
        amount of the housing assistance payment shall be determined in 
        accordance with subsection (c)(3) of this section.

                        (3) 40 percent limit

        At the time a family initially receives tenant-based assistance 
    under this section with respect to any dwelling unit, the total 
    amount that a family may be required to pay for rent may not exceed 
    40 percent of the monthly adjusted income of the family.

                        (4) Eligible families

        To be eligible to receive assistance under this subsection, a 
    family shall, at the time a family initially receives assistance 
    under this subsection, be a low-income family that is--
            (A) a very low-income family;
            (B) a family previously assisted under this subchapter;
            (C) a low-income family that meets eligibility criteria 
        specified by the public housing agency;
            (D) a family that qualifies to receive a voucher in 
        connection with a homeownership program approved under title IV 
        of the Cranston-Gonzalez National Affordable Housing Act; or
            (E) a family that qualifies to receive a voucher under 
        section 223 or 226 of the Low-Income Housing Preservation and 
        Resident Homeownership Act of 1990 [12 U.S.C. 4113, 4116].

                 (5) Annual review of family income

        (A) In general

            Reviews of family incomes for purposes of this section shall 
        be subject to the provisions of section 3544 of this title and 
        shall be conducted upon the initial provision of housing 
        assistance for the family and thereafter not less than annually.

        (B) Procedures

            Each public housing agency administering assistance under 
        this subsection shall establish procedures that are appropriate 
        and necessary to ensure that income data provided to the agency 
        and owners by families applying for or receiving assistance from 
        the agency is complete and accurate. Each public housing agency 
        shall, not less frequently than annually, conduct a review of 
        the family income of each family receiving assistance under this 
        subsection.

         (6) Selection of families and disapproval of owners

        (A) Preferences

            (i) Authority to establish

                Each public housing agency may establish a system for 
            making tenant-based assistance under this subsection 
            available on behalf of eligible families that provides 
            preference for such assistance to eligible families having 
            certain characteristics, which may include a preference for 
            families residing in public housing who are victims of a 
            crime of violence (as such term is defined in section 16 of 
            title 18) that has been reported to an appropriate law 
            enforcement agency.
            (ii) Content

                Each system of preferences established pursuant to this 
            subparagraph shall be based upon local housing needs and 
            priorities, as determined by the public housing agency using 
            generally accepted data sources, including any information 
            obtained pursuant to an opportunity for public comment as 
            provided under section 1437c-1(f) of this title and under 
            the requirements applicable to the comprehensive housing 
            affordability strategy for the relevant jurisdiction.

        (B) Selection of tenants

            Each housing assistance payment contract entered into by the 
        public housing agency and the owner of a dwelling unit) \2\ 
        shall provide that the screening and selection of families for 
        those units shall be the function of the owner. In addition, the 
        public housing agency may elect to screen applicants for the 
        program in accordance with such requirements as the Secretary 
        may establish.
---------------------------------------------------------------------------
    \2\ So in original. No opening parenthesis was enacted.
---------------------------------------------------------------------------

        (C) PHA disapproval of owners

            In addition to other grounds authorized by the Secretary, a 
        public housing agency may elect not to enter into a housing 
        assistance payments contract under this subsection with an owner 
        who refuses, or has a history of refusing, to take action to 
        terminate tenancy for activity engaged in by the tenant, any 
        member of the tenant's household, any guest, or any other person 
        under the control of any member of the household that--
                (i) threatens the health or safety of, or right to 
            peaceful enjoyment of the premises by, other tenants or 
            employees of the public housing agency, owner, or other 
            manager of the housing;
                (ii) threatens the health or safety of, or right to 
            peaceful enjoyment of the residences by, persons residing in 
            the immediate vicinity of the premises; or
                (iii) is drug-related or violent criminal activity.

                       (7) Leases and tenancy

        Each housing assistance payment contract entered into by the 
    public housing agency and the owner of a dwelling unit--
            (A) shall provide that the lease between the tenant and the 
        owner shall be for a term of not less than 1 year, except that 
        the public housing agency may approve a shorter term for an 
        initial lease between the tenant and the dwelling unit owner if 
        the public housing agency determines that such shorter term 
        would improve housing opportunities for the tenant and if such 
        shorter term is considered to be a prevailing local market 
        practice;
            (B) shall provide that the dwelling unit owner shall offer 
        leases to tenants assisted under this subsection that--
                (i) are in a standard form used in the locality by the 
            dwelling unit owner; and
                (ii) contain terms and conditions that--
                    (I) are consistent with State and local law; and
                    (II) apply generally to tenants in the property who 
                are not assisted under this section;

            (C) shall provide that during the term of the lease, the 
        owner shall not terminate the tenancy except for serious or 
        repeated violation of the terms and conditions of the lease, for 
        violation of applicable Federal, State, or local law, or for 
        other good cause;
            (D) shall provide that during the term of the lease, any 
        criminal activity that threatens the health, safety, or right to 
        peaceful enjoyment of the premises by other tenants, any 
        criminal activity that threatens the health, safety, or right to 
        peaceful enjoyment of their residences by persons residing in 
        the immediate vicinity of the premises, or any violent or drug-
        related criminal activity on or near such premises, engaged in 
        by a tenant of any unit, any member of the tenant's household, 
        or any guest or other person under the tenant's control, shall 
        be cause for termination of tenancy;
            (E) shall provide that any termination of tenancy under this 
        subsection shall be preceded by the provision of written notice 
        by the owner to the tenant specifying the grounds for that 
        action, and any relief shall be consistent with applicable State 
        and local law; and
            (F) may include any addenda required by the Secretary to set 
        forth the provisions of this subsection.

                   (8) Inspection of units by PHAs

        (A) In general

            Except as provided in paragraph (11), for each dwelling unit 
        for which a housing assistance payment contract is established 
        under this subsection, the public housing agency shall inspect 
        the unit before any assistance payment is made to determine 
        whether the dwelling unit meets the housing quality standards 
        under subparagraph (B).

        (B) Housing quality standards

            The housing quality standards under this subparagraph are 
        standards for safe and habitable housing established--
                (i) by the Secretary for purposes of this subsection; or
                (ii) by local housing codes or by codes adopted by 
            public housing agencies that--
                    (I) meet or exceed housing quality standards, except 
                that the Secretary may waive the requirement under this 
                subclause to significantly increase access to affordable 
                housing and to expand housing opportunities for families 
                assisted under this subsection, except where such waiver 
                could adversely affect the health or safety of families 
                assisted under this subsection; and
                    (II) do not severely restrict housing choice \3\
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    \3\ So in original. Probably should be followed by a period.
---------------------------------------------------------------------------

        (C) Inspection

            The determination required under subparagraph (A) shall be 
        made by the public housing agency (or other entity, as provided 
        in paragraph (11)) pursuant to an inspection of the dwelling 
        unit conducted before any assistance payment is made for the 
        unit. Inspections of dwelling units under this subparagraph 
        shall be made before the expiration of the 15-day period 
        beginning upon a request by the resident or landlord to the 
        public housing agency or, in the case of any public housing 
        agency that provides assistance under this subsection on behalf 
        of more than 1250 families, before the expiration of a 
        reasonable period beginning upon such request. The performance 
        of the agency in meeting the 15-day inspection deadline shall be 
        taken into consideration in assessing the performance of the 
        agency.

        (D) Annual inspections

            Each public housing agency providing assistance under this 
        subsection (or other entity, as provided in paragraph (11)) 
        shall make an annual inspection of each assisted dwelling unit 
        during the term of the housing assistance payments contract for 
        the unit to determine whether the unit is maintained in 
        accordance with the requirements under subparagraph (A). The 
        agency (or other entity) shall retain the records of the 
        inspection for a reasonable time and shall make the records 
        available upon request to the Secretary, the Inspector General 
        for the Department of Housing and Urban Development, and any 
        auditor conducting an audit under section 1437c(h) of this 
        title.

        (E) Inspection guidelines

            The Secretary shall establish procedural guidelines and 
        performance standards to facilitate inspections of dwelling 
        units and conform such inspections with practices utilized in 
        the private housing market. Such guidelines and standards shall 
        take into consideration variations in local laws and practices 
        of public housing agencies and shall provide flexibility to 
        authorities appropriate to facilitate efficient provision of 
        assistance under this subsection.

                          (9) Vacated units

        If an assisted family vacates a dwelling unit for which rental 
    assistance is provided under a housing assistance payment contract 
    before the expiration of the term of the lease for the unit, rental 
    assistance pursuant to such contract may not be provided for the 
    unit after the month during which the unit was vacated.

                              (10) Rent

        (A) Reasonableness

            The rent for dwelling units for which a housing assistance 
        payment contract is established under this subsection shall be 
        reasonable in comparison with rents charged for comparable 
        dwelling units in the private, unassisted local market.

        (B) Negotiations

            A public housing agency (or other entity, as provided in 
        paragraph (11)) shall, at the request of a family receiving 
        tenant-based assistance under this subsection, assist that 
        family in negotiating a reasonable rent with a dwelling unit 
        owner. A public housing agency (or such other entity) shall 
        review the rent for a unit under consideration by the family 
        (and all rent increases for units under lease by the family) to 
        determine whether the rent (or rent increase) requested by the 
        owner is reasonable. If a public housing agency (or other such 
        entity) determines that the rent (or rent increase) for a 
        dwelling unit is not reasonable, the public housing agency (or 
        other such entity) shall not make housing assistance payments to 
        the owner under this subsection with respect to that unit.

        (C) Units exempt from local rent control

            If a dwelling unit for which a housing assistance payment 
        contract is established under this subsection is exempt from 
        local rent control provisions during the term of that contract, 
        the rent for that unit shall be reasonable in comparison with 
        other units in the market area that are exempt from local rent 
        control provisions.

        (D) Timely payments

            Each public housing agency shall make timely payment of any 
        amounts due to a dwelling unit owner under this subsection. The 
        housing assistance payment contract between the owner and the 
        public housing agency may provide for penalties for the late 
        payment of amounts due under the contract, which shall be 
        imposed on the public housing agency in accordance with 
        generally accepted practices in the local housing market.

        (E) Penalties

            Unless otherwise authorized by the Secretary, each public 
        housing agency shall pay any penalties from administrative fees 
        collected by the public housing agency, except that no penalty 
        shall be imposed if the late payment is due to factors that the 
        Secretary determines are beyond the control of the public 
        housing agency.

                 (11) Leasing of units owned by PHA

        If an eligible family assisted under this subsection leases a 
    dwelling unit (other than a public housing dwelling unit) that is 
    owned by a public housing agency administering assistance under this 
    subsection, the Secretary shall require the unit of general local 
    government or another entity approved by the Secretary, to make 
    inspections required under paragraph (8) and rent determinations 
    required under paragraph (10). The agency shall be responsible for 
    any expenses of such inspections and determinations.

         (12) Assistance for rental of manufactured housing

        (A) In general

            A public housing agency may make assistance payments in 
        accordance with this subsection on behalf of a family that 
        utilizes a manufactured home as a principal place of residence. 
        Such payments may be made only for the rental of the real 
        property on which the manufactured home owned by any such family 
        is located.

        (B) Rent calculation

            (i) Charges included

                For assistance pursuant to this paragraph, the rent for 
            the space on which a manufactured home is located and with 
            respect to which assistance payments are to be made shall 
            include maintenance and management charges and tenant-paid 
            utilities.
            (ii) Payment standard

                The public housing agency shall establish a payment 
            standard for the purpose of determining the monthly 
            assistance that may be paid for any family under this 
            paragraph. The payment standard may not exceed an amount 
            approved or established by the Secretary.
            (iii) Monthly assistance payment

                The monthly assistance payment for a family assisted 
            under this paragraph shall be determined in accordance with 
            paragraph (2).

                  (13) PHA project-based assistance

        (A) In general

            If the Secretary enters into an annual contributions 
        contract under this subsection with a public housing agency 
        pursuant to which the public housing agency will enter into a 
        housing assistance payment contract with respect to an existing 
        structure under this subsection--
                (i) the housing assistance payment contract may not be 
            attached to the structure unless the owner agrees to 
            rehabilitate or newly construct the structure other than 
            with assistance under this chapter, and otherwise complies 
            with this section; and
                (ii) the public housing agency may approve a housing 
            assistance payment contract for such existing structures for 
            not more than 15 percent of the funding available for 
            tenant-based assistance administered by the public housing 
            agency under this section.

        (B) Extension of contract term

            In the case of a housing assistance payment contract that 
        applies to a structure under this paragraph, a public housing 
        agency may enter into a contract with the owner, contingent upon 
        the future availability of appropriated funds for the purpose of 
        renewing expiring contracts for assistance payments, as provided 
        in appropriations Acts, to extend the term of the underlying 
        housing assistance payment contract for such period as the 
        Secretary determines to be appropriate to achieve long-term 
        affordability of the housing. The contract shall obligate the 
        owner to have such extensions of the underlying housing 
        assistance payment contract accepted by the owner and the 
        successors in interest of the owner.

        (C) Rent calculation

            For project-based assistance under this paragraph, housing 
        assistance payment contracts shall establish rents and provide 
        for rent adjustments in accordance with subsection (c) of this 
        section.

        (D) Adjusted rents

            With respect to rents adjusted under this paragraph--
                (i) the adjusted rent for any unit shall be reasonable 
            in comparison with rents charged for comparable dwelling 
            units in the private, unassisted, local market; and
                (ii) the provisions of subsection (c)(2)(C) of this 
            section shall not apply.

           (14) Inapplicability to tenant-based assistance

        Subsection (c) of this section shall not apply to tenant-based 
    assistance under this subsection.

                      (15) Homeownership option

        (A) In general

            A public housing agency providing assistance under this 
        subsection may, at the option of the agency, provide assistance 
        for homeownership under subsection (y) of this section.

        (B) Alternative administration

            A public housing agency may contract with a nonprofit 
        organization to administer a homeownership program under 
        subsection (y) of this section.

    (16) Rental vouchers for relocation of witnesses and victims 
                                  of crime

        (A) Witnesses

            Of amounts made available for assistance under this 
        subsection in each fiscal year, the Secretary, in consultation 
        with the Inspector General, shall make available such sums as 
        may be necessary for the relocation of witnesses in connection 
        with efforts to combat crime in public and assisted housing 
        pursuant to requests from law enforcement or prosecution 
        agencies.

        (B) Victims of crime

            (i) In general

                Of amounts made available for assistance under this 
            section in each fiscal year, the Secretary shall make 
            available such sums as may be necessary for the relocation 
            of families residing in public housing who are victims of a 
            crime of violence (as that term is defined in section 16 of 
            title 18) that has been reported to an appropriate law 
            enforcement agency.
            (ii) Notice

                A public housing agency that receives amounts under this 
            subparagraph shall establish procedures for providing notice 
            of the availability of that assistance to families that may 
            be eligible for that assistance.

                       (17) Deed restrictions

        Assistance under this subsection may not be used in any manner 
    that abrogates any local deed restriction that applies to any 
    housing consisting of 1 to 4 dwelling units. This paragraph may not 
    be construed to affect the provisions or applicability of the Fair 
    Housing Act [42 U.S.C. 3601 et seq.].

        (18) Rental assistance for assisted living facilities

        (A) In general

            A public housing agency may make assistance payments on 
        behalf of a family that uses an assisted living facility as a 
        principal place of residence and that uses such supportive 
        services made available in the facility as the agency may 
        require. Such payments may be made only for covering costs of 
        rental of the dwelling unit in the assisted living facility and 
        not for covering any portion of the cost of residing in such 
        facility that is attributable to service relating to assisted 
        living.

        (B) Rent calculation

            (i) Charges included

                For assistance pursuant to this paragraph, the rent of 
            the dwelling unit that is an assisted living facility with 
            respect to which assistance payments are made shall include 
            maintenance and management charges related to the dwelling 
            unit and tenant-paid utilities. Such rent shall not include 
            any charges attributable to services relating to assisted 
            living.
            (ii) Payment standard

                In determining the monthly assistance that may be paid 
            under this paragraph on behalf of any family residing in an 
            assisted living facility, the public housing agency shall 
            utilize the payment standard established under paragraph 
            (1), for the market area in which the assisted living 
            facility is located, for the applicable size dwelling unit.
            (iii) Monthly assistance payment

                The monthly assistance payment for a family assisted 
            under this paragraph shall be determined in accordance with 
            paragraph (2) (using the rent and payment standard for the 
            dwelling unit as determined in accordance with this 
            subsection).

        (C) Definition

            For the purposes of this paragraph, the term ``assisted 
        living facility'' has the meaning given that term in section 
        232(b) of the National Housing Act (12 U.S.C. 1715w(b)), except 
        that such a facility may be contained within a portion of a 
        larger multifamily housing project.

(p) Shared housing for elderly and handicapped

    In order to assist elderly families (as defined in section 
1437a(b)(3) of this title who elect to live in a shared housing 
arrangement in which they benefit as a result of sharing the facilities 
of a dwelling with others in a manner that effectively and efficiently 
meets their housing needs and thereby reduces their cost of housing, the 
Secretary shall permit assistance provided under the existing housing 
and moderate rehabilitation programs to be used by such families in such 
arrangements. In carrying out this subsection, the Secretary shall issue 
minimum habitability standards for the purpose of assuring decent, safe, 
and sanitary housing for such families while taking into account the 
special circumstances of shared housing.

(q) Administrative fees

             (1) Fee for ongoing costs of administration

        (A) In general

            The Secretary shall establish fees for the costs of 
        administering the tenant-based assistance, certificate, voucher, 
        and moderate rehabilitation programs under this section.

        (B) Fiscal year 1999

            (i) Calculation

                For fiscal year 1999, the fee for each month for which a 
            dwelling unit is covered by an assistance contract shall 
            be--
                    (I) in the case of a public housing agency that, on 
                an annual basis, is administering a program for not more 
                than 600 dwelling units, 7.65 percent of the base 
                amount; and
                    (II) in the case of an agency that, on an annual 
                basis, is administering a program for more than 600 
                dwelling units (aa) for the first 600 units, 7.65 
                percent of the base amount, and (bb) for any additional 
                dwelling units under the program, 7.0 percent of the 
                base amount.
            (ii) Base amount

                For purposes of this subparagraph, the base amount shall 
            be the higher of--
                    (I) the fair market rental established under 
                subsection (c) of this section (as in effect immediately 
                before the effective date under section 503(a) of the 
                Quality Housing and Work Responsibility Act of 1998) for 
                fiscal year 1993 for a 2-bedroom existing rental 
                dwelling unit in the market area of the agency, and
                    (II) the amount that is the lesser of (aa) such fair 
                market rental for fiscal year 1994, or (bb) 103.5 
                percent of the amount determined under clause (i),

          adjusted based on changes in wage data or other objectively 
            measurable data that reflect the costs of administering the 
            program, as determined by the Secretary. The Secretary may 
            require that the base amount be not less than a minimum 
            amount and not more than a maximum amount.

        (C) Subsequent fiscal years

            For subsequent fiscal years, the Secretary shall publish a 
        notice in the Federal Register, for each geographic area, 
        establishing the amount of the fee that would apply for public 
        housing agencies administering the program, based on changes in 
        wage data or other objectively measurable data that reflect the 
        costs of administering the program, as determined by the 
        Secretary.

        (D) Increase

            The Secretary may increase the fee if necessary to reflect 
        the higher costs of administering small programs and programs 
        operating over large geographic areas.

        (E) Decrease

            The Secretary may decrease the fee for units owned by a 
        public housing agency to reflect reasonable costs of 
        administration.

                  (2) Fee for preliminary expenses

        The Secretary shall also establish reasonable fees (as 
    determined by the Secretary) for--
            (A) the costs of preliminary expenses, in the amount of 
        $500, for a public housing agency, except that such fee shall 
        apply to an agency only in the first year that the agency 
        administers a tenant-based assistance program under this 
        section, and only if, immediately before the effective date 
        under section 503(a) of the Quality Housing and Work 
        Responsibility Act of 1998, the agency was not administering a 
        tenant-based assistance program under this chapter (as in effect 
        immediately before such effective date), in connection with its 
        initial increment of assistance received;
            (B) the costs incurred in assisting families who experience 
        difficulty (as determined by the Secretary) in obtaining 
        appropriate housing under the programs; and
            (C) extraordinary costs approved by the Secretary.

      (3) Transfer of fees in cases of concurrent geographical 
                                jurisdiction

        In each fiscal year, if any public housing agency provides 
    tenant-based assistance under this section on behalf of a family who 
    uses such assistance for a dwelling unit that is located within the 
    jurisdiction of such agency but is also within the jurisdiction of 
    another public housing agency, the Secretary shall take such steps 
    as may be necessary to ensure that the public housing agency that 
    provides the services for a family receives all or part of the 
    administrative fee under this section (as appropriate).

                          (4) Applicability

        This subsection shall apply to fiscal year 1999 and fiscal years 
    thereafter.

(r) Portability

    (1) In general.--(A) Any family receiving tenant-based assistance 
under subsection (o) of this section may receive such assistance to rent 
an eligible dwelling unit if the dwelling unit to which the family moves 
is within any area in which a program is being administered under this 
section.
    (B)(i) Notwithstanding subparagraph (A) and subject to any 
exceptions established under clause (ii) of this subparagraph, a public 
housing agency may require that any family not living within the 
jurisdiction of the public housing agency at the time the family applies 
for assistance from the agency shall, during the 12-month period 
beginning on the date of initial receipt of housing assistance made 
available on behalf of the family from such agency, lease and occupy an 
eligible dwelling unit located within the jurisdiction served by the 
agency.
    (ii) The Secretary may establish such exceptions to the authority of 
public housing agencies established under clause (i).
    (2) The public housing agency having authority with respect to the 
dwelling unit to which a family moves under this subsection shall have 
the responsibility of carrying out the provisions of this subsection 
with respect to the family.
    (3) In providing assistance under subsection (o) of this section for 
any fiscal year, the Secretary shall give consideration to any reduction 
in the number of resident families incurred by a public housing agency 
in the preceding fiscal year as a result of the provisions of this 
subsection. The Secretary shall establish procedures for the 
compensation of public housing agencies that issue vouchers to families 
that move into or out of the jurisdiction of the public housing agency 
under portability procedures. The Secretary may reserve amounts 
available for assistance under subsection (o) of this section to 
compensate those public housing agencies.
    (4) The provisions of this subsection may not be construed to 
restrict any authority of the Secretary under any other provision of law 
to provide for the portability of assistance under this section.
    (5) Lease violations.--A family may not receive a voucher from a 
public housing agency and move to another jurisdiction under the tenant-
based assistance program if the family has moved out of the assisted 
dwelling unit of the family in violation of a lease.

(s) Prohibition of denial of certificates and vouchers to residents of 
        public housing

    In selecting families for the provision of assistance under this 
section (including subsection (o) of this section), a public housing 
agency may not exclude or penalize a family solely because the family 
resides in a public housing project.

(t) Enhanced vouchers

                           (1) In general

        Enhanced voucher assistance under this subsection for a family 
    shall be voucher assistance under subsection (o) of this section, 
    except that under such enhanced voucher assistance--
            (A) subject only to subparagraph (D), the assisted family 
        shall pay as rent no less than the amount the family was paying 
        on the date of the eligibility event for the project in which 
        the family was residing on such date;
            (B) during any period that the assisted family continues 
        residing in the same project in which the family was residing on 
        the date of the eligibility event for the project, if the rent 
        for the dwelling unit of the family in such project exceeds the 
        applicable payment standard established pursuant to subsection 
        (o) of this section for the unit, the amount of rental 
        assistance provided on behalf of the family shall be determined 
        using a payment standard that is equal to the rent for the 
        dwelling unit (as such rent may be increased from time-to-time), 
        subject to paragraph (10)(A) of subsection (o) of this section;
            (C) subparagraph (B) of this paragraph shall not apply and 
        the payment standard for the dwelling unit occupied by the 
        family shall be determined in accordance with subsection (o) of 
        this section if--
                (i) the assisted family moves, at any time, from such 
            project; or
                (ii) the voucher is made available for use by any family 
            other than the original family on behalf of whom the voucher 
            was provided; and

            (D) if the income of the assisted family declines to a 
        significant extent, the percentage of income paid by the family 
        for rent shall not exceed the greater of 30 percent or the 
        percentage of income paid at the time of the eligibility event 
        for the project.

                        (2) Eligibility event

        For purposes of this subsection, the term ``eligibility event'' 
    means, with respect to a multifamily housing project, the prepayment 
    of the mortgage on such housing project, the voluntary termination 
    of the insurance contract for the mortgage for such housing project, 
    the termination or expiration of the contract for rental assistance 
    under this section for such housing project, or the transaction 
    under which the project is preserved as affordable housing, that, 
    under paragraphs (3) and (4) of section 515(c), section 524(d) of 
    the Multifamily Assisted Housing Reform and Affordability Act of 
    1997 (42 U.S.C. 1437f note), section 4113(f) of title 12, or section 
    1715z-1a(p) of title 12, results in tenants in such housing project 
    being eligible for enhanced voucher assistance under this 
    subsection.

      (3) Treatment of enhanced vouchers provided under other 
                                  authority

        (A) In general

            Notwithstanding any other provision of law, any enhanced 
        voucher assistance provided under any authority specified in 
        subparagraph (B) shall (regardless of the date that the amounts 
        for providing such assistance were made available) be treated, 
        and subject to the same requirements, as enhanced voucher 
        assistance under this subsection.

        (B) Identification of other authority

            The authority specified in this subparagraph is the 
        authority under--
                (i) the 10th, 11th, and 12th provisos under the 
            ``Preserving Existing Housing Investment'' account in title 
            II of the Departments of Veterans Affairs and Housing and 
            Urban Development, and Independent Agencies Appropriations 
            Act, 1997 (Public Law 104-204; 110 Stat. 2884), pursuant to 
            such provisos, the first proviso under the ``Housing 
            Certificate Fund'' account in title II of the Departments of 
            Veterans Affairs and Housing and Urban Development, and 
            Independent Agencies Appropriations Act, 1998 (Public Law 
            105-65; 111 Stat. 1351), or the first proviso under the 
            ``Housing Certificate Fund'' account in title II of the 
            Departments of Veterans Affairs and Housing and Urban 
            Development, and Independent Agencies Appropriations Act, 
            1999 (Public Law 105-276; 112 Stat. 2469); and
                (ii) paragraphs (3) and (4) of section 515(c) of the 
            Multifamily Assisted Housing Reform and Affordability Act of 
            1997 (42 U.S.C. 1437f note), as in effect before October 20, 
            1999.

                 (4) Authorization of appropriations

        There are authorized to be appropriated for each of fiscal years 
    2000, 2001, 2002, 2003, and 2004 such sums as may be necessary for 
    enhanced voucher assistance under this subsection.

(u) Assistance for residents of rental rehabilitation projects

    In the case of low-income families living in rental projects 
rehabilitated under section 1437o \4\ of this title or section 1490m of 
this title before rehabilitation--
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    \4\ See References in Text note below.
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        (1) vouchers under this section shall be made for families who 
    are required to move out of their units because of the physical 
    rehabilitation activities or because of overcrowding;
        (2) at the discretion of each public housing agency or other 
    agency administering the allocation of assistance or vouchers under 
    this section may be made for families who would have to pay more 
    than 30 percent of their adjusted income for rent after 
    rehabilitation whether they choose to remain in, or to move from, 
    the project; and
        (3) the Secretary shall allocate assistance for vouchers under 
    this section to ensure that sufficient resources are available to 
    address the physical or economic displacement, or potential economic 
    displacement, of existing tenants pursuant to paragraphs (1) and 
    (2).

(v) Extension of expiring contracts

    The Secretary may extend expiring contracts entered into under this 
section for project-based loan management assistance to the extent 
necessary to prevent displacement of low-income families receiving such 
assistance as of September 30, 1996.

(w) Repealed. Pub. L. 106-74, title V, Sec. 531(d)(2), Oct. 20, 1999, 
        113 Stat. 1116

(x) Family unification

                  (1) Increase in budget authority

        The budget authority available under section 1437c(c) of this 
    title for assistance under subsection (b) of this section is 
    authorized to be increased by $100,000,000 on or after October 1, 
    1992, and by $104,200,000 on or after October 1, 1993.

                          (2) Use of funds

        The amounts made available under this subsection shall be used 
    only in connection with tenant-based assistance under this section 
    on behalf of any family (A) who is otherwise eligible for such 
    assistance, and (B) who the public child welfare agency for the 
    jurisdiction has certified is a family for whom the lack of adequate 
    housing is a primary factor in the imminent placement of the 
    family's child or children in out-of-home care or the delayed 
    discharge of a child or children to the family from out-of-home 
    care.

                           (3) Allocation

        The amounts made available under this subsection shall be 
    allocated by the Secretary through a national competition among 
    applicants based on demonstrated need for the assistance under this 
    subsection. To be considered for assistance, an applicant shall 
    submit to the Secretary a written proposal containing a report from 
    the public child welfare agency serving the jurisdiction of the 
    applicant that describes how a lack of adequate housing in the 
    jurisdiction is resulting in the initial or prolonged separation of 
    children from their families, and how the applicant will coordinate 
    with the public child welfare agency to identify eligible families 
    and provide the families with assistance under this subsection.

                           (4) Definitions

        For purposes of this subsection:

        (A) Applicant

            The term ``applicant'' means a public housing agency or any 
        other agency responsible for administering assistance under this 
        section.

        (B) Public child welfare agency

            The term ``public child welfare agency'' means the public 
        agency responsible under applicable State law for determining 
        that a child is at imminent risk of placement in out-of-home 
        care or that a child in out-of-home care under the supervision 
        of the public agency may be returned to his or her family.

(y) Homeownership option

               (1) Use of assistance for homeownership

        A public housing agency providing tenant-based assistance on 
    behalf of an eligible family under this section may provide 
    assistance for an eligible family that purchases a dwelling unit 
    (including a unit under a lease-purchase agreement) that will be 
    owned by 1 or more members of the family, and will be occupied by 
    the family, if the family--
            (A) is a first-time homeowner, or owns or is acquiring 
        shares in a cooperative;
            (B) demonstrates that the family has income from employment 
        or other sources (other than public assistance, except that the 
        Secretary may provide for the consideration of public assistance 
        in the case of an elderly family or a disabled family), as 
        determined in accordance with requirements of the Secretary, 
        that is not less than twice the payment standard established by 
        the public housing agency (or such other amount as may be 
        established by the Secretary);
            (C) except as provided by the Secretary, demonstrates at the 
        time the family initially receives tenant-based assistance under 
        this subsection that one or more adult members of the family 
        have achieved employment for the period as the Secretary shall 
        require;
            (D) participates in a homeownership and housing counseling 
        program provided by the agency; and
            (E) meets any other initial or continuing requirements 
        established by the public housing agency in accordance with 
        requirements established by the Secretary.

              (2) Determination of amount of assistance

        (A) Monthly expenses not exceeding payment standard

            If the monthly homeownership expenses, as determined in 
        accordance with requirements established by the Secretary, do 
        not exceed the payment standard, the monthly assistance payment 
        shall be the amount by which the homeownership expenses exceed 
        the highest of the following amounts, rounded to the nearest 
        dollar:
                (i) 30 percent of the monthly adjusted income of the 
            family.
                (ii) 10 percent of the monthly income of the family.
                (iii) If the family is receiving payments for welfare 
            assistance from a public agency, and a portion of those 
            payments, adjusted in accordance with the actual housing 
            costs of the family, is specifically designated by that 
            agency to meet the housing costs of the family, the portion 
            of those payments that is so designated.

        (B) Monthly expenses exceed payment standard

            If the monthly homeownership expenses, as determined in 
        accordance with requirements established by the Secretary, 
        exceed the payment standard, the monthly assistance payment 
        shall be the amount by which the applicable payment standard 
        exceeds the highest of the amounts under clauses (i), (ii), and 
        (iii) of subparagraph (A).

               (3) Inspections and contract conditions

        (A) In general

            Each contract for the purchase of a unit to be assisted 
        under this section shall--
                (i) provide for pre-purchase inspection of the unit by 
            an independent professional; and
                (ii) require that any cost of necessary repairs be paid 
            by the seller.

        (B) Annual inspections not required

            The requirement under subsection (o)(8)(A)(ii) \5\ of this 
        section for annual inspections shall not apply to units assisted 
        under this section.
---------------------------------------------------------------------------
    \5\ See References in Text note below.
---------------------------------------------------------------------------

                (4) Other authority of the Secretary

        The Secretary may--
            (A) limit the term of assistance for a family assisted under 
        this subsection; and
            (B) modify the requirements of this subsection as the 
        Secretary determines to be necessary to make appropriate 
        adaptations for lease-purchase agreements.

              (5) Inapplicability of certain provisions

        Assistance under this subsection shall not be subject to the 
    requirements of the following provisions:
            (A) Subsection (c)(3)(B) \5\ of this section.
            (B) Subsection (d)(1)(B)(i) of this section.
            (C) Any other provisions of this section governing maximum 
        amounts payable to owners and amounts payable by assisted 
        families.
            (D) Any other provisions of this section concerning 
        contracts between public housing agencies and owners.
            (E) Any other provisions of this chapter that are 
        inconsistent with the provisions of this subsection.

                   (6) Reversion to rental status

        (A) FHA-insured mortgages

            If a family receiving assistance under this subsection for 
        occupancy of a dwelling defaults under a mortgage for the 
        dwelling insured by the Secretary under the National Housing Act 
        [12 U.S.C. 1701 et seq.], the family may not continue to receive 
        rental assistance under this section unless the family (i) 
        transfers to the Secretary marketable title to the dwelling, 
        (ii) moves from the dwelling within the period established or 
        approved by the Secretary, and (iii) agrees that any amounts the 
        family is required to pay to reimburse the escrow account under 
        section 1437u(d)(3) \5\ of this title may be deducted by the 
        public housing agency from the assistance payment otherwise 
        payable on behalf of the family.

        (B) Other mortgages

            If a family receiving assistance under this subsection 
        defaults under a mortgage not insured under the National Housing 
        Act [12 U.S.C. 1701 et seq.], the family may not continue to 
        receive rental assistance under this section unless it complies 
        with requirements established by the Secretary.

        (C) All mortgages

            A family receiving assistance under this subsection that 
        defaults under a mortgage may not receive assistance under this 
        subsection for occupancy of another dwelling owned by one or 
        more members of the family.

                (7) ``First-time homeowner'' defined

        For purposes of this subsection, the term ``first-time 
    homeowner'' means--
            (A) a family, no member of which has had a present ownership 
        interest in a principal residence during the 3 years preceding 
        the date on which the family initially receives assistance for 
        homeownership under this subsection; and
            (B) any other family, as the Secretary may prescribe.

(z) Termination of section 1437f contracts and reuse of recaptured 
        budget authority

                        (1) General authority

        The Secretary may reuse any budget authority, in whole or part, 
    that is recaptured on account of expiration or termination of a 
    housing assistance payments contract only for one or more of the 
    following:

        (A) Tenant-based assistance

            Pursuant to a contract with a public housing agency, to 
        provide tenant-based assistance under this section to families 
        occupying units formerly assisted under the terminated contract.

        (B) Project-based assistance

            Pursuant to a contract with an owner, to attach assistance 
        to one or more structures under this section, for relocation of 
        families occupying units formerly assisted under the terminated 
        contract.

        (2) Families occupying units formerly assisted under 
                             terminated contract

        Pursuant to paragraph (1), the Secretary shall first make 
    available tenant- or project-based assistance to families occupying 
    units formerly assisted under the terminated contract. The Secretary 
    shall provide project-based assistance in instances only where the 
    use of tenant-based assistance is determined to be infeasible by the 
    Secretary.

(aa) Omitted

(bb) Transfer, reuse, and rescission of budget authority

                  (1) Transfer of budget authority

        If an assistance contract under this section, other than a 
    contract for tenant-based assistance, is terminated or is not 
    renewed, or if the contract expires, the Secretary shall, in order 
    to provide continued assistance to eligible families, including 
    eligible families receiving the benefit of the project-based 
    assistance at the time of the termination, transfer any budget 
    authority remaining in the contract to another contract. The 
    transfer shall be under such terms as the Secretary may prescribe.

       (2) Reuse and rescission of certain recaptured budget 
                                  authority

        Notwithstanding paragraph (1), if a project-based assistance 
    contract for an eligible multifamily housing project subject to 
    actions authorized under this subchapter is terminated or amended as 
    part of restructuring under section 517 of the Multifamily Assisted 
    Housing Reform and Affordability Act of 1997, the Secretary shall 
    recapture the budget authority not required for the terminated or 
    amended contract and use such amounts as are necessary to provide 
    housing assistance for the same number of families covered by such 
    contract for the remaining term of such contract, under a contract 
    providing for project-based or tenant-based assistance. The amount 
    of budget authority saved as a result of the shift to project-based 
    or tenant-based assistance shall be rescinded.

(cc) Law enforcement and security personnel

                           (1) In general

        Notwithstanding any other provision of this chapter, in the case 
    of assistance attached to a structure, for the purpose of increasing 
    security for the residents of a project, an owner may admit, and 
    assistance under this section may be provided to, police officers 
    and other security personnel who are not otherwise eligible for 
    assistance under the chapter.

                        (2) Rent requirements

        With respect to any assistance provided by an owner under this 
    subsection, the Secretary may--
            (A) permit the owner to establish such rent requirements and 
        other terms and conditions of occupancy that the Secretary 
        considers to be appropriate; and
            (B) require the owner to submit an application for those 
        rent requirements, which application shall include such 
        information as the Secretary, in the discretion of the 
        Secretary, determines to be necessary.

                          (3) Applicability

        This subsection shall apply to fiscal year 1999 and fiscal years 
    thereafter.

(dd) Tenant-based contract renewals

    Subject to amounts provided in appropriation Acts, starting in 
fiscal year 1999, the Secretary shall renew all expiring tenant-based 
annual contribution contracts under this section by applying an 
inflation factor based on local or regional factors to an allocation 
baseline. The allocation baseline shall be calculated by including, at a 
minimum, amounts sufficient to ensure continued assistance for the 
actual number of families assisted as of October 1, 1997, with 
appropriate upward adjustments for incremental assistance and additional 
families authorized subsequent to that date.

(Sept. 1, 1937, ch. 896, title I, Sec. 8, as added Pub. L. 93-383, title 
II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 662; amended Pub. L. 94-375, 
Sec. 2(d), (e), (g), Aug. 3, 1976, 90 Stat. 1068; Pub. L. 95-24, title 
I, Sec. 101(c), Apr. 30, 1977, 91 Stat. 55; Pub. L. 95-128, title II, 
Sec. 201(c)-(e), Oct. 12, 1977, 91 Stat. 1128; Pub. L. 95-557, title II, 
Sec. 206(d)(1), (e), (f), Oct. 31, 1978, 92 Stat. 2091, 2092; Pub. L. 
96-153, title II, Secs. 202(b), 206(b), 210, 211(b), Dec. 21, 1979, 93 
Stat. 1106, 1108-1110; Pub. L. 96-399, title II, Sec. 203, title III, 
Sec. 308(c)(3), Oct. 8, 1980, 94 Stat. 1629, 1641; Pub. L. 97-35, title 
III, Secs. 322(e), 324-326(a), (e)(1), 329H(a), Aug. 13, 1981, 95 Stat. 
402, 405-407, 410; Pub. L. 98-181, title II, Secs. 203(b)(1), (2), 207-
209(a), 210, 211, Nov. 30, 1983, 97 Stat. 1178, 1181-1183; Pub. L. 98-
479, title I, Sec. 102(b)(6)-(10), Oct. 17, 1984, 98 Stat. 2221, 2222; 
Pub. L. 100-242, title I, Secs. 141-149, title II, Sec. 262, Feb. 5, 
1988, 101 Stat. 1849-1853, 1890; renumbered title I, Pub. L. 100-358, 
Sec. 5, June 29, 1988, 102 Stat. 681; Pub. L. 100-628, title X, 
Secs. 1004(a), 1005(b)(1), (c), 1006, 1014(b), (c), 1029, Nov. 7, 1988, 
102 Stat. 3264, 3265, 3269, 3272; Pub. L. 101-235, title I, Sec. 127, 
title VIII, Sec. 801(c), (g), Dec. 15, 1989, 103 Stat. 2025, 2058, 2059; 
Pub. L. 101-625, title II, Sec. 289(b), title IV, Sec. 413, title V, 
Secs. 541-545(a), 545(2)[(b)], 546-549, 550(a), (c), 551-553, 572, title 
VI, Secs. 603, 613(a), Nov. 28, 1990, 104 Stat. 4128, 4160, 4216-4224, 
4236, 4277, 4280; Pub. L. 102-139, title II, Oct. 28, 1991, 105 Stat. 
756; Pub. L. 102-550, title I, Secs. 141-148, 185(a), title VI, 
Secs. 623(b), 660, 674, 675, 682(b), title X, Sec. 1012(g), Oct. 28, 
1992, 106 Stat. 3713-3715, 3745, 3819, 3825, 3827, 3828, 3830, 3905; 
Pub. L. 103-233, title I, Sec. 101(c)(2), (3), (d), Apr. 11, 1994, 108 
Stat. 357; Pub. L. 103-327, title II, Sept. 28, 1994, 108 Stat. 2315; 
Pub. L. 104-19, title I, Sec. 1003, July 27, 1995, 109 Stat. 236; Pub. 
L. 104-99, title IV, Secs. 402(d)(2), (3), (6)(A)(iii), (iv), 405(c), 
Jan. 26, 1996, 110 Stat. 41, 42, 44; Pub. L. 104-134, title I, 
Sec. 101(e) [title II, Secs. 203(a)-(c), 208], Apr. 26, 1996, 110 Stat. 
1321-257, 1321-281, 1321-284; renumbered title I, Pub. L. 104-140, 
Sec. 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 104-193, title IX, 
Sec. 903(a)(2), Aug. 22, 1996, 110 Stat. 2348; Pub. L. 104-204, title 
II, Sec. 201(g), Sept. 26, 1996, 110 Stat. 2893; Pub. L. 105-18, title 
II, Sec. 10002, June 12, 1997, 111 Stat. 201; Pub. L. 105-33, title II, 
Secs. 2003, 2004, Aug. 5, 1997, 111 Stat. 257; Pub. L. 105-65, title II, 
Secs. 201(c), 205, title V, Sec. 523(a), (c), Oct. 27, 1997, 111 Stat. 
1364, 1365, 1406, 1407; Pub. L. 105-276, title II, Sec. 209(a), title V, 
Secs. 514(b)(1), 545(a), (b), 547-549(a)(2), (b), 550(a), 552-555(a), 
556(a), 565(c), Oct. 21, 1998, 112 Stat. 2485, 2547, 2596-2607, 2609-
2611, 2613, 2631; Pub. L. 106-74, title II, Sec. 223, title V, 
Secs. 523(a), 531(d), 535, 538(a), Oct. 20, 1999, 113 Stat. 1076, 1104, 
1116, 1121, 1122.)

                       References in Text

    The Cranston-Gonzalez National Affordable Housing Act, referred to 
in subsecs. (f)(4) and (o)(4)(D), is Pub. L. 101-625, Nov. 28, 1990, 104 
Stat. 4079. Title II of the Act, also known as the ``HOME Investment 
Partnerships Act'', is classified principally to subchapter II 
(Sec. 12721 et seq.) of chapter 130 of this title. Title IV of the Act, 
also known as the ``Homeownership and Opportunity Through HOPE Act'', 
enacted subchapter II-A (Sec. 1437aaa et seq.) of this chapter and 
subchapter IV (Sec. 12871 et seq.) of chapter 130 of this title, amended 
sections 1437c, 1437f, 1437l, 1437p, 1437r, and 1437s of this title and 
section 1709 of Title 12, Banks and Banking, and enacted provisions set 
out as notes under sections 1437c, 1437aa, and 1437aaa of this title. 
For complete classification of this Act to the Code, see Short Title 
note set out under section 12701 of this title and Tables.
    The Housing and Community Development Act of 1992, referred to in 
subsec. (d)(2)(C), (D), is Pub. L. 102-550, Oct. 28, 1992, 106 Stat. 
3672. Subtitle C of title VI of the Act is classified generally to 
subchapter I (Sec. 13601 et seq.) of chapter 135 of this title. Subtitle 
D of title VI of the Act is classified principally to subchapter II 
(Sec. 13611 et seq.) of chapter 135 of this title. For complete 
classification of this Act to the Code, see Short Title of 1992 
Amendment note set out under section 5301 of this title and Tables.
    Sections 514 and 517 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997, referred to in subsecs. (d)(5) and (bb)(2), 
are sections 514 and 517 of Pub. L. 105-65, and are set out as a note 
under this section.
    The Social Security Act, referred to in subsec. (k), is act Aug. 14, 
1935, ch. 531, 49 Stat. 620, as amended, which is classified generally 
to chapter 7 (Sec. 301 et seq.) of this title. For complete 
classification of this Act to the Code, see section 1305 of this title 
and Tables.
    The Food Stamp Act of 1977, referred to in subsec. (k), is Pub. L. 
88-525, Aug. 31, 1964, 78 Stat. 703, as amended, which is classified 
generally to chapter 51 (Sec. 2011 et seq.) of Title 7, Agriculture. For 
complete classification of this Act to the Code, see Short Title note 
set out under 2011 of Title 7 and Tables.
    The Fair Housing Act, referred to in subsec. (o)(17), is title VIII 
of Pub. L. 90-284, Apr. 11, 1968, 82 Stat. 81, as amended, which is 
classified principally to subchapter I (Sec. 3601 et seq.) of chapter 45 
of this title. For complete classification of this Act to the Code, see 
Short Title note set out under section 3601 of this title and Tables.
    Section 503(a) of the Quality Housing and Work Responsibility Act of 
1998, referred to in subsec. (q)(1)(B)(ii)(I), (2)(A), is section 503(a) 
of Pub. L. 105-276, which is set out as an Effective Date of 1998 
Amendment note under section 1437 of this title.
    Section 1437o of this title, referred to in subsec. (u), was 
repealed by Pub. L. 101-625, title II, Sec. 289(b), Nov. 28, 1990, 104 
Stat. 4128.
    Subsection (o)(8)(A) of this section, referred to in subsec. 
(y)(3)(B), does not contain a cl. (ii) and does not relate to annual 
inspections. For provisions of subsec. (o)(8) which relate to annual 
inspections, see subpar. (D).
    Subsection (c)(3)(B) of this section, referred to in subsec. (y)(5), 
was repealed by Pub. L. 105-276, title V, Sec. 550(a)(3)(A)(ii), Oct. 
21, 1998, 112 Stat. 2609.
    The National Housing Act, referred to in subsec. (y)(6), is act June 
27, 1934, ch. 847, 48 Stat. 1246, as amended, which is classified 
principally to chapter 13 (Sec. 1701 et seq.) of Title 12, Banks and 
Banking. For complete classification of this Act to the Code, see 
section 1701 of Title 12 and Tables.
    Section 1437u(d)(3) of this title, relating to reimbursement of 
escrow accounts, referred to in subsec. (y)(6)(A), was repealed by Pub. 
L. 105-276, title V, Sec. 509(a)(2), Oct. 21, 1998, 112 Stat. 2531.

                          Codification

    October 20, 1999, referred to in subsec. (t)(3)(B)(ii), was in the 
original ``the enactment of this Act'', which was translated as meaning 
the enactment of Pub. L. 106-74, which enacted subsec. (t) of this 
section, to reflect the probable intent of Congress.
    Section 203(a) of Pub. L. 100-242, as amended, which was formerly 
set out in a note under section 1715l of Title 12, Banks and Banking, 
and which provided that on Nov. 28, 1990, the amendment made by section 
262 of Pub. L. 100-242 is repealed and section is to read as it would 
without such amendment, was omitted in the general amendment of subtitle 
A of title II of Pub. L. 100-242 by Pub. L. 101-625.


                            Prior Provisions

    A prior section 8 of act Sept. 1, 1937, ch. 896, 50 Stat. 891, as 
amended, authorized promulgation of rules and regulations by the 
Authority and was classified to section 1408 of this title, prior to the 
general revision of this chapter by Pub. L. 93-383.


                               Amendments

    1999--Subsec. (c)(8)(A). Pub. L. 106-74, Sec. 535(1), substituted 
``termination of'' for ``terminating'' after ``Not less than one year 
before'' and ``. The notice shall also include a statement that, if the 
Congress makes funds available, the owner and the Secretary may agree to 
a renewal of the contract, thus avoiding termination, and that in the 
event of termination the Department of Housing and Urban Development 
will provide tenant-based rental assistance to all eligible residents, 
enabling them to choose the place they wish to rent, which is likely to 
include the dwelling unit in which they currently reside. Any contract 
covered by this paragraph that is renewed may be renewed for a period of 
up to 1 year or any number or years, with payments subject to the 
availability of appropriations for any year.'' for ``, specifying the 
reasons for the termination with sufficient detail to enable the 
Secretary to evaluate whether the termination is lawful and whether 
there are additional actions that can be taken by the Secretary to avoid 
the termination. The owner's notice shall include a statement that the 
owner and the Secretary may agree to a renewal of the contract, thus 
avoiding the termination.''
    Subsec. (c)(8)(B). Pub. L. 106-74, Sec. 535(2), (4), redesignated 
subpar. (C) as (B) and struck out former subpar. (B) which read as 
follows: ``In the case of owner who has requested that the Secretary 
renew the contract, the owner's notice under subparagraph (A) to the 
tenants shall include statements that--
        ``(i) the owner currently has a contract with the Department of 
    Housing and Urban Development that pays the Government's share of 
    the tenant's rent and the date on which the contract will expire;
        ``(ii) the owner intends to renew the contract for another year;
        ``(iii) renewal of the contract may depend upon the Congress 
    making funds available for such renewal;
        ``(iv) the owner is required by law to notify tenants of the 
    possibility that the contract may not be renewed if Congress does 
    not provide funding for such renewals;
        ``(v) in the event of nonrenewal, the Department of Housing and 
    Urban Development will provide tenant-based rental assistance to all 
    eligible residents, enabling them to choose the place they wish to 
    rent; and
        ``(vi) the notice itself does not indicate an intent to 
    terminate the contract by either the owner or the Department of 
    Housing and Urban Development, provided there is Congressional 
    approval of funding availability.''
    Subsec. (c)(8)(C). Pub. L. 106-74, Sec. 535(4), redesignated subpar. 
(D) as (C). Former subpar. (C) redesignated (B).
    Pub. L. 106-74, Sec. 535(3), struck out ``Notwithstanding the 
preceding provisions of this paragraph, if the owner agrees to a 5-year 
contract renewal offered by the Secretary, payments under which shall be 
subject to the availability of appropriations for any year, the owner 
shall provide a written notice to the Secretary and the tenants not less 
than 180 days before the termination of such contract.'' after ``(C)'' 
and ``in the immediately preceding sentence'' before ``, the owner may 
not evict the tenants'', struck out ``180-day'' before ``notice'' in two 
places, and substituted ``1 year has elapsed'' for ``such period has 
elapsed'' and ``1 year of advance notice'' for ``180 days of advance 
notice''.
    Subsec. (c)(8)(D), (E). Pub. L. 106-74, Sec. 535(4), redesignated 
subpars. (D) and (E) as (C) and (D), respectively.
    Subsec. (o)(18). Pub. L. 106-74, Sec. 523(a), added par. (18).
    Subsec. (t). Pub. L. 106-74, Sec. 538(a), added subsec. (t).
    Subsec. (v). Pub. L. 106-74, Sec. 531(d)(1), designated sentence 
enacted by Pub. L. 104-99, Sec. 405(c), as subsec. (v).
    Subsec. (w). Pub. L. 106-74, Sec. 531(d)(2), struck out heading and 
text of subsec. (w). Text read as follows: ``Not later than 30 days 
after the beginning of each fiscal year, the Secretary shall publish in 
the Federal Register a plan for reducing, to the extent feasible, year-
to-year fluctuations in the levels of budget authority that will be 
required over the succeeding 5-year period to renew expiring rental 
assistance contracts entered into under this section since August 22, 
1974. To the extent necessary to carry out such plan and to the extent 
approved in appropriations Acts, the Secretary is authorized to enter 
into annual contributions contracts with terms of less than 60 months.''
    Subsec. (z)(1). Pub. L. 106-74, Sec. 223(1), in introductory 
provisions, inserted ``expiration or'' after ``on account of'' and 
struck out ``(other than a contract for tenant-based assistance)'' after 
``payments contract''.
    Subsec. (z)(3). Pub. L. 106-74, Sec. 223(2), struck out heading and 
text of par. (3). Text read as follows: ``This subsection shall be 
effective for actions initiated by the Secretary on or before September 
30, 1995.''
    1998--Subsec. (a). Pub. L. 105-276, Sec. 550(a)(1), struck out at 
end ``A public housing agency may contract to make assistance payments 
to itself (or any agency or instrumentality thereof) as the owner of 
dwelling units if such agency is subject to the same program 
requirements as are applied to other owners. In such cases, the 
Secretary may establish initial rents within applicable limits.''
    Subsec. (b). Pub. L. 105-276, Sec. 550(a)(2), substituted ``Other'' 
for ``Rental certificates and other'' in subsec. heading, inserted par. 
(1) designation and heading, and struck out after first sentence ``The 
Secretary shall enter into a separate annual contributions contract with 
each public housing agency to obligate the authority approved each year, 
beginning with the authority approved in appropriations Acts for fiscal 
year 1988 (other than amendment authority to increase assistance 
payments being made using authority approved prior to the appropriations 
Acts for fiscal year 1988), and such annual contributions contract 
(other than for annual contributions under subsection (o) of this 
section) shall bind the Secretary to make such authority, and any 
amendments increasing such authority, available to the public housing 
agency for a specified period.''
    Subsec. (c)(3). Pub. L. 105-276, Sec. 550(a)(3)(A), struck out 
``(A)'' after par. designation, and struck out subpar. (B), which 
authorized payment of higher percentage of income as rent than that 
specified under section 1437a(a) of this title if family receiving 
tenant-based rental assistance notified public housing agency of its 
interest in a unit renting for an excess rent and agency determined that 
the rent was reasonable, and set forth provisions which limited agency 
approval of such excess rentals to 10 percent of annual allocation, 
required report to Secretary where such rentals exceeded 5 percent of 
allocation, and required Secretary to report to Congress annually on 
agencies which had submitted such reports and include recommendations 
deemed appropriate to correct problems identified in reports.
    Subsec. (c)(4). Pub. L. 105-276, Sec. 550(a)(3)(B), struck out ``or 
by a family that qualifies to receive assistance under subsection (b) of 
this section pursuant to section 223 or 226 of the Low-Income Housing 
Preservation and Resident Homeownership Act of 1990'' after ``such 
dwelling unit'' in first sentence.
    Subsec. (c)(5), (6). Pub. L. 105-276, Sec. 550(a)(3)(C), (D), 
redesignated par. (6) as (5) and struck out former par. (5) which read 
as follows: ``Assistance payments may be made with respect to up to 100 
per centum of the dwelling units in any structure upon the application 
of the owner or prospective owner. Within the category of projects 
containing more than fifty units and designed for use primarily by 
nonelderly and nonhandicapped persons which are not subject to mortgages 
purchased under section 305 of the National Housing Act, the Secretary 
may give preference to applications for assistance involving not more 
than 20 per centum of the dwelling units in a project. In according any 
such preference, the Secretary shall compare applications received 
during distinct time periods not exceeding sixty days in duration.''
    Subsec. (c)(7). Pub. L. 105-276, Sec. 550(a)(3)(C), struck out par. 
(7) which read as follows: ``To the extent authorized in contracts 
entered into by the Secretary with a public housing agency, such agency 
may purchase any structure containing one or more dwelling units 
assisted under this section for the purpose of reselling the structure 
to the tenant or tenants occupying units aggregating in value at least 
80 per centum of the structure's total value. Any such resale may be 
made on the terms and conditions prescribed under section 1437c(h) of 
this title and subject to the limitation contained in such section.''
    Subsec. (c)(8). Pub. L. 105-276, Sec. 549(b), redesignated par. (9) 
as (8)(A) and substituted subpars. (B) to (E) for ``The Secretary shall 
review the owner's notice, shall consider whether there are additional 
actions that can be taken by the Secretary to avoid the termination, and 
shall ensure a proper adjustment of the contract rents for the project 
in conformity with the requirements of paragraph (2). The Secretary 
shall issue a written finding of the legality of the termination and the 
reasons for the termination, including the actions considered or taken 
to avoid the termination. Within 30 days of the Secretary's finding, the 
owner shall provide written notice to each tenant of the Secretary's 
decision. For purposes of this paragraph, the term `termination' means 
the expiration of the assistance contract or an owner's refusal to renew 
the assistance contract, and such term shall include termination of the 
contract for business reasons.''
    Pub. L. 105-276, Sec. 549(a)(1)(A), struck out par. (8) which read 
as follows: ``Each contract under this section shall provide that the 
owner will notify tenants at least 90 days prior to the expiration of 
the contract of any rent increase which may occur as a result of the 
expiration of such contract.''
    Subsec. (c)(9). Pub. L. 105-276, Sec. 549(b)(1), redesignated par. 
(9) as (8)(A).
    Pub. L. 105-276, Sec. 549(a)(1)(B), substituted ``Not less than one 
year before terminating any contract under which assistance payments are 
received under this section, other than a contract for tenant-based 
assistance under this section, an owner shall provide written notice to 
the Secretary and the tenants involved of the proposed termination, 
specifying the reasons for the termination with sufficient detail to 
enable the Secretary to evaluate whether the termination is lawful and 
whether there are additional actions that can be taken by the Secretary 
to avoid the termination.'' for ``Not less than 180 days prior to 
terminating any contract under which assistance payments are received 
under this section (but not less than 90 days in the case of housing 
certificates or vouchers under subsection (b) or (o) of this section), 
an owner shall provide written notice to the Secretary and the tenants 
involved of the proposed termination, specifying the reasons for the 
termination with sufficient detail to enable the Secretary to evaluate 
whether the termination is lawful and whether there are additional 
actions that can be taken by the Secretary to avoid the termination.''
    Subsec. (c)(10). Pub. L. 105-276, Sec. 549(a)(1)(A), struck out par. 
(10) which read as follows: ``If an owner provides notice of proposed 
termination under paragraph (9) and the contract rent is lower than the 
maximum monthly rent for units assisted under subsection (b)(1) of this 
section, the Secretary shall adjust the contract rent based on the 
maximum monthly rent for units assisted under subsection (b)(1) of this 
section and the value of the low-income housing after rehabilitation.''
    Subsec. (d)(1)(A). Pub. L. 105-276, Sec. 514(b)(1), amended subpar. 
(A) generally. For former text of subpar. (A), see 1996 Amendment note 
below.
    Subsec. (d)(1)(B)(ii). Pub. L. 105-276, Sec. 549(a)(2)(A), 
substituted ``during the term of the lease, the owner'' for ``the 
owner''.
    Subsec. (d)(1)(B)(iii). Pub. L. 105-276, Sec. 549(a)(2)(B), 
substituted ``during the term of the lease, any criminal activity'' for 
``provide that any criminal activity''.
    Subsec. (d)(2)(A). Pub. L. 105-276, Sec. 550(a)(4)(A), struck out at 
end ``Where the Secretary enters into an annual contributions contract 
with a public housing agency pursuant to which the agency will enter 
into a contract for assistance payments with respect to an existing 
structure, the contract for assistance payments may not be attached to 
the structure unless (i) the Secretary and the public housing agency 
approve such action, and (ii) the owner agrees to rehabilitate the 
structure other than with assistance under this chapter and otherwise 
complies with the requirements of this section, except that the 
Secretary shall permit the public housing agency to approve such 
attachment with respect to not more than 15 percent of the assistance 
provided by the public housing agency if the requirements of clause (ii) 
are met. Notwithstanding any other provision of this section, a public 
housing agency and an applicable State agency may, on a priority basis, 
attach to structures not more than an additional 15 percent of the 
assistance provided by the public housing agency or the applicable State 
agency only with respect to projects assisted under a State program that 
permits the owner of the projects to prepay a State assisted or 
subsidized mortgage on the structure, except that attachment of 
assistance under this sentence shall be for the purpose of (i) providing 
incentives to owners to preserve such projects for occupancy by lower 
and moderate income families (for the period that assistance under this 
sentence is available), and (ii) to assist lower income tenants to 
afford any increases in rent that may be required to induce the owner to 
maintain occupancy in the project by lower and moderate income tenants. 
Any assistance provided to lower income tenants under the preceding 
sentence shall not be considered for purposes of the limitation under 
paragraph (1)(A) regarding the percentage of families that may receive 
assistance under this section who do not qualify for preferences under 
such paragraph.''
    Subsec. (d)(2)(B) to (G). Pub. L. 105-276, Sec. 550(a)(4)(C), 
redesignated subpars. (F) to (H) as (B) to (D), respectively, and struck 
out former subpars. (B) to (E). Prior to repeal, former subpar. (B) 
required the Secretary to permit a public housing agency to approve 
attachment of assistance with respect to any newly constructed structure 
if certain conditions were met, former subpar. (C) required a public 
housing agency to enter into a contract with an owner of a structure to 
which a contract for assistance was attached under this par. to provide 
for renewal of expiring assistance payment contracts, former subpar. (D) 
required owners of structures to which a contract for assistance was 
attached to adopt certain tenant selection procedures, and former 
subpar. (E) required the Secretary to annually survey public housing 
agencies to determine which have reached certain limitations in 
providing assistance and to report the survey results to Congress.
    Subsec. (d)(2)(H). Pub. L. 105-276, Sec. 550(a)(4)(C), redesignated 
subpar. (H) as (D).
    Pub. L. 105-276, Sec. 550(a)(4)(B), substituted ``An owner'' for 
``Notwithstanding subsection (d)(1)(A)(i) of this section, an owner''.
    Subsec. (d)(6). Pub. L. 105-276, Sec. 552, added par. (6).
    Subsec. (f)(6). Pub. L. 105-276, Sec. 545(b), inserted ``or 
(o)(13)'' after ``(d)(2)''.
    Subsec. (f)(7). Pub. L. 105-276, Sec. 550(a)(5), struck out ``(b) 
or'' after ``under subsection'' and inserted before period at end ``and 
that provides for the eligible family to select suitable housing and to 
move to other suitable housing''.
    Subsec. (h). Pub. L. 105-276, Sec. 565(c), which directed insertion 
of ``(except as provided in section 1437d(j)(3) of this title)'' after 
``section 1437d of this title'', was executed by making the insertion 
after ``Sections 1437c(e) and 1437d of this title'', to reflect the 
probable intent of Congress.
    Subsec. (j). Pub. L. 105-276, Sec. 550(a)(6), struck out subsec. 
(j), which authorized contracts for making rental assistance payments on 
behalf of low-income families utilizing manufactured homes as principal 
places of residence, directed that contract establish maximum monthly 
rent permitted with respect to home and real property on which it was 
located and provided formula for calculating amount of monthly 
assistance, provided for adjustments, set forth minimum and maximum 
terms, in the case of substantially rehabilitated or newly constructed 
park, provided limit on principal amount of mortgage attributable to 
rental spaces within park, and authorized Secretary to prescribe other 
terms and conditions necessary for purpose of carrying out subsection.
    Subsec. (n). Pub. L. 105-276, Sec. 550(a)(7), struck out subsec. (n) 
which read as follows: ``In making assistance available under 
subsections (b)(1) and (e)(2) of this section, the Secretary may provide 
assistance with respect to residential properties in which some or all 
of the dwelling units do not contain bathroom or kitchen facilities, 
if--
        ``(1) the property is located in an area in which there is a 
    significant demand for such units, as determined by the Secretary;
        ``(2) the unit of general local government in which the property 
    is located and the local public housing agency approve of such units 
    being utilized for such purpose; and
        ``(3) in the case of assistance under subsection (b)(1) of this 
    section, the unit of general local government in which the property 
    is located and the local public housing agency certify to the 
    Secretary that the property complies with local health and safety 
    standards.
The Secretary may waive, in appropriate cases, the limitation and 
preference described in the second and third sentences of section 
1437a(b)(3) of this title with respect to the assistance made available 
under this subsection.''
    Subsec. (o). Pub. L. 105-276, Sec. 545(a), amended subsec. (o) 
generally. Prior to amendment, subsec. (o) contained provisions relating 
to assistance using a payment standard based upon fair market rental, 
categories of families eligible for assistance and preferences, 
contracts with public housing agencies for annual contributions, annual 
adjustments of assistance payment amounts, assistance with respect to 
certain cooperative and mutual housing, contracts to provide rental 
vouchers, set asides of budget authority for an adjustment pool, 
reasonable rent requirements and disapproval of leases with unreasonable 
rents, and assistance on behalf of families utilizing manufactured homes 
as principal places of residence.
    Subsec. (o)(2). Pub. L. 105-276, Sec. 209(a), inserted at end 
``Notwithstanding the preceding sentence, for families being admitted to 
the voucher program who remain in the same unit or complex, where the 
rent (including the amount allowed for utilities) does not exceed the 
payment standard, the monthly assistance payment for any family shall be 
the amount by which such rent exceeds the greater of 30 percent of the 
family's monthly adjusted income or 10 percent of the family's monthly 
income.'' Notwithstanding sections 209(b) and 503 of Pub. L. 105-276, 
set out as Effective Date of 1998 Amendment notes below and under 
section 1437 of this title, this amendment was executed before the 
amendment by section 545(a) of Pub. L. 105-276 to reflect the probable 
intent of Congress and the provisions of section 545(c) of Pub. L. 105-
276, set out as an Effective Date of 1998 Amendment note below, and 
section 559 of Pub. L. 105-276, set out as a Regulations note below.
    Subsec. (q). Pub. L. 105-276, Sec. 547, amended subsec. (q) 
generally, substituting present provisions for provisions which 
authorized establishment of fee for costs incurred in administering 
certificate and housing voucher programs under subsecs. (b) and (o) of 
this section, costs of preliminary expenses in connection with new 
allocations of assistance, costs incurred in assisting families who 
experienced difficulty in obtaining appropriate housing under the 
programs, and extraordinary costs; provisions which set forth use of 
fees for employing one or more service coordinators to coordinate 
provision of supportive services for elderly or disabled families on 
whose behalf assistance was provided; and provision which limited 
establishment or increase of fees to amounts provided in appropriation 
Acts.
    Subsec. (r). Pub. L. 105-276, Sec. 553(3), inserted heading, added 
par. (1), and struck out former par. (1) which read as follows: ``Any 
family assisted under subsection (b) or (o) of this section may receive 
such assistance to rent an eligible dwelling unit if the dwelling unit 
to which the family moves is within the same State, or the same or a 
contiguous metropolitan statistical area as the metropolitan statistical 
area within which is located the area of jurisdiction of the public 
housing agency approving such assistance; except that any family not 
living within the jurisdiction of a public housing agency at the time 
that such family applies for assistance from such agency shall, during 
the 12-month period beginning upon the receipt of any tenant-based 
rental assistance made available on behalf of the family, use such 
assistance to rent an eligible dwelling unit located within the 
jurisdiction served by such public housing agency.''
    Subsec. (r)(2). Pub. L. 105-276, Sec. 553(1), struck out at end ``If 
no public housing agency has authority with respect to the dwelling unit 
to which a family moves under this subsection, the public housing agency 
approving the assistance shall have such responsibility.''
    Subsec. (r)(3). Pub. L. 105-276, Sec. 553(2), struck out ``(b) or'' 
before ``(o) of this section for'' and inserted at end ``The Secretary 
shall establish procedures for the compensation of public housing 
agencies that issue vouchers to families that move into or out of the 
jurisdiction of the public housing agency under portability procedures. 
The Secretary may reserve amounts available for assistance under 
subsection (o) of this section to compensate those public housing 
agencies.''
    Subsec. (r)(5). Pub. L. 105-276, Sec. 553(5), added par. (5).
    Subsec. (t). Pub. L. 105-276, Sec. 554, struck out subsec. (t). For 
text, see 1996 Amendment note below.
    Subsec. (u). Pub. L. 105-276, Sec. 550(a)(8), in pars. (1) and (3), 
struck out ``certificates or'' before ``vouchers'' and, in par. (2), 
struck out ``, certificates'' before ``or vouchers''.
    Subsec. (x)(2). Pub. L. 105-276, Sec. 550(a)(9), substituted 
``tenant-based assistance'' for ``housing certificate assistance''.
    Subsec. (y)(1). Pub. L. 105-276, Sec. 555(a)(1)(A), in introductory 
provisions, substituted ``A public housing agency providing tenant-based 
assistance on behalf of an eligible family under this section may 
provide assistance for an eligible family that purchases a dwelling unit 
(including a unit under a lease-purchase agreement) that will be owned 
by 1 or more members of the family, and will be occupied by the family, 
if the family'' for ``A family receiving tenant-based assistance under 
this section may receive assistance for occupancy of a dwelling owned by 
one or more members of the family if the family''.
    Subsec. (y)(1)(A). Pub. L. 105-276, Sec. 555(a)(1)(B), inserted ``, 
or owns or is acquiring shares in a cooperative'' before semicolon at 
end.
    Subsec. (y)(1)(B). Pub. L. 105-276, Sec. 555(a)(1)(C), struck out 
cl. (i), redesignated cl. (ii) as entire subpar., and inserted ``, 
except that the Secretary may provide for the consideration of public 
assistance in the case of an elderly family or a disabled family'' after 
``public assistance''. Prior to amendment, cl. (i) read as follows: 
``participates in the family self-sufficiency program under section 
1437u of this title of the public housing agency providing the 
assistance; or''.
    Subsec. (y)(2). Pub. L. 105-276, Sec. 555(a)(2), added par. (2) and 
struck out heading and text of former par. (2). Text read as follows:
    ``(A) In general.--Notwithstanding any other provisions of this 
section governing determination of the amount of assistance payments 
under this section on behalf of a family, the monthly assistance payment 
for any family assisted under this subsection shall be the amount by 
which the fair market rental for the area established under subsection 
(c)(1) of this section exceeds 30 percent of the family's monthly 
adjusted income; except that the monthly assistance payment shall not 
exceed the amount by which the monthly homeownership expenses, as 
determined in accordance with requirements established by the Secretary, 
exceeds 10 percent of the family's monthly income.
    ``(B) Exclusion of equity from income.--For purposes of determining 
the monthly assistance payment for a family, the Secretary shall not 
include in family income an amount imputed from the equity of the family 
in a dwelling occupied by the family with assistance under this 
subsection.''
    Subsec. (y)(3), (4). Pub. L. 105-276, Sec. 555(a)(3), added pars. 
(3) and (4) and struck out former pars. (3) and (4) which read as 
follows:
    ``(3) Recapture of certain amounts.--Upon sale of the dwelling by 
the family, the Secretary shall recapture from any net proceeds the 
amount of additional assistance (as determined in accordance with 
requirements established by the Secretary) paid to or on behalf of the 
eligible family as a result of paragraph (2)(B).
    ``(4) Downpayment requirement.--Each public housing agency providing 
assistance under this subsection shall ensure that each family assisted 
shall provide from its own resources not less than 80 percent of any 
downpayment in connection with a loan made for the purchase of a 
dwelling. Such resources may include amounts from any escrow account for 
the family established under section 1437u(d) of this title. Not more 
than 20 percent of the downpayment may be provided from other sources, 
such as from nonprofit entities and programs of States and units of 
general local government.''
    Subsec. (y)(5). Pub. L. 105-276, Sec. 555(a)(3), (4), redesignated 
par. (6) as (5) and struck out heading and text of former par. (5). Text 
read as follows: ``A family may not receive assistance under this 
subsection during any period when assistance is being provided for the 
family under other Federal homeownership assistance programs, as 
determined by the Secretary, including assistance under the HOME 
Investment Partnerships Act, the Homeownership and Opportunity Through 
HOPE Act, title II of the Housing and Community Development Act of 1987, 
and section 1472 of this title.''
    Subsec. (y)(6) to (8). Pub. L. 105-276, Sec. 555(a)(4), redesignated 
pars. (7) and (8) as (6) and (7), respectively. Former par. (6) 
redesignated (5).
    Subsec. (z). Pub. L. 105-276, Sec. 548(1), made technical amendment 
relating to placement of subsection.
    Subsec. (cc). Pub. L. 105-276, Sec. 548(2), added subsec. (cc).
    Subsec. (dd). Pub. L. 105-276, Sec. 556(a), added subsec. (dd).
    1997--Subsec. (c)(2)(A). Pub. L. 105-65, Secs. 201(c), 205, 
substituted ``fiscal years 1997 and 1998'' for ``fiscal year 1997'' in 
third and sixth sentences and inserted at end ``In establishing annual 
adjustment factors for units in new construction and substantial 
rehabilitation projects, the Secretary shall take into account the fact 
that debt service is a fixed expense. The immediately foregoing sentence 
shall be effective only during fiscal year 1998.''
    Pub. L. 105-33, Secs. 2003, 2004, inserted ``, and during fiscal 
year 1999 and thereafter'' before period at end of third and sixth 
sentences.
    Subsec. (c)(9). Pub. L. 105-18, which directed substitution of ``Not 
less than 180 days prior to terminating any contract'' for ``Not less 
than one year prior to terminating any contract'', was executed by 
making the substitution for ``Not less than 1 year prior to terminating 
any contract'' to reflect the probable intent of Congress.
    Subsec. (d)(5). Pub. L. 105-65, Sec. 523(a), added par. (5).
    Subsec. (bb). Pub. L. 105-65, Sec. 523(c), inserted heading, 
designated existing provisions as par. (1) and former subsec. heading as 
par. (1) heading, and added par. (2).
    1996--Subsec. (c)(2)(A). Pub. L. 104-204 inserted ``, fiscal year 
1996 prior to April 26, 1996, and fiscal year 1997'' after ``fiscal year 
1995'' in two places, substituted ``Except for assistance under the 
certificate program, for'' for ``For'', inserted after fourth sentence 
``In the case of assistance under the certificate program, 0.01 shall be 
subtracted from the amount of the annual adjustment factor (except that 
the factor shall not be reduced to less than 1.0), and the adjusted rent 
shall not exceed the rent for a comparable unassisted unit of similar 
quality, type, and age in the market area.'', and substituted ``The 
immediately foregoing two sentences'' for ``The immediately foregoing 
sentence''.
    Subsec. (c)(8). Pub. L. 104-134, Sec. 101(e) [title II, 
Sec. 203(b)(1), (d)], temporarily inserted ``(other than a contract for 
assistance under the certificate or voucher program)'' after 
``section''. See Effective and Termination Dates of 1996 Amendments note 
below.
    Subsec. (c)(9). Pub. L. 104-134, Sec. 101(e) [title II, 
Sec. 203(b)(2), (d)], temporarily substituted ``, other than a contract 
under the certificate or voucher program'' for ``(but not less than 90 
days in the case of housing certificates or vouchers under subsection 
(b) or (o) of this section)''. See Effective and Termination Dates of 
1996 Amendments note below.
    Subsec. (d)(1)(A). Pub. L. 104-99, Sec. 402(d)(2), (f), temporarily 
amended subpar. (A) generally, substituting ``the selection of tenants 
shall be the function of the owner, subject to the provisions of the 
annual contributions contract between the Secretary and the agency, 
except that for the certificate and moderate rehabilitation programs 
only, for the purpose of selecting families to be assisted, the public 
housing agency may establish, after public notice and an opportunity for 
public comment, a written system of preferences for selection that is 
not inconsistent with the comprehensive housing affordability strategy 
under title I of the Cranston-Gonzalez National Affordable Housing 
Act;'' for ``the selection of tenants for such units shall be the 
function of the owner, subject to the provisions of the annual 
contributions contract between the Secretary and the agency, except that 
the tenant selection criteria used by the owner shall--
        ``(i) for not less than (I) 70 percent of the families who 
    initially receive assistance in any 1-year period in the case of 
    assistance attached to a structure and (II) 90 percent of such 
    families in the case of assistance not attached to a structure, give 
    preference to families that occupy substandard housing (including 
    families that are homeless or living in a shelter for homeless 
    families), are paying more than 50 percent of family income for 
    rent, or are involuntarily displaced (including displacement because 
    of disposition of a multifamily housing project under section 1701z-
    11 of title 12) at the time they are seeking assistance under this 
    section; except that any family otherwise eligible for assistance 
    under this section may not be denied preference for assistance not 
    attached to a structure (or delayed or otherwise adversely affected 
    in the provision of such assistance) solely because the family 
    resides in public housing;
        ``(ii) for any remaining assistance in any 1-year period, give 
    preference to families who qualify under a system of local 
    preferences established by the public housing agency in writing and 
    after public hearing to respond to local housing needs and 
    priorities, which may include (I) assisting very low-income families 
    who either reside in transitional housing assisted under title IV of 
    the Stewart B. McKinney Homeless Assistance Act, or participate in a 
    program designed to provide public assistance recipients with 
    greater access to employment and educational opportunities; (II) 
    assisting families in accordance with subsection (u)(2) of this 
    section; (III) assisting families identified by local public 
    agencies involved in providing for the welfare of children as having 
    a lack of adequate housing that is a primary factor in the imminent 
    placement of a child in foster care, or in preventing the discharge 
    of a child from foster care and reunification with his or her 
    family; (IV) assisting youth, upon discharge from foster care, in 
    cases in which return to the family or extended family or adoption 
    is not available; (V) assisting veterans who are eligible and have 
    applied for assistance, will use the assistance for a dwelling unit 
    designed for the handicapped, and, upon discharge or eligibility for 
    discharge from a hospital or nursing home, have physical disability 
    which, because of the configuration of their homes, prevents them 
    from access to or use of their homes; and (VI) achieving other 
    objectives of national housing policy as affirmed by Congress; and
        ``(iii) prohibit any individual or family evicted from housing 
    assisted under the chapter by reason of drug-related criminal 
    activity from having a preference under any provision of this 
    subparagraph for 3 years unless the evicted tenant successfully 
    completes a rehabilitation program approved by the agency, except 
    that the agency may waive the application of this clause under 
    standards established by the Secretary (which shall include waiver 
    for any member of a family of an individual prohibited from tenancy 
    under this clause who the agency determines clearly did not 
    participate in and had no knowledge of such criminal activity or 
    when circumstances leading to eviction no longer exist);''.
See Effective and Termination Dates of 1996 Amendments note below.
    Subsec. (d)(1)(B)(ii), (iii). Pub. L. 104-134, Sec. 101(e) [title 
II, Sec. 203(c), (d)], in cl. (ii) temporarily inserted ``during the 
term of the lease,'' after ``(ii)'' and in cl. (iii) temporarily 
substituted ``during the term of the lease,'' for ``provide that''. See 
Effective and Termination Dates of 1996 Amendments note below.
    Subsec. (d)(1)(B)(v). Pub. L. 104-193, Sec. 903(a)(2), added cl. 
(v).
    Subsec. (d)(2)(A). Pub. L. 104-99, Sec. 402(d)(6)(A)(iii), (f), 
temporarily struck out at end ``Any assistance provided to lower income 
tenants under the preceding sentence shall not be considered for 
purposes of the limitation under paragraph (1)(A) regarding the 
percentage of families that may receive assistance under this section 
who do not qualify for preferences under such paragraph.'' See Effective 
and Termination Dates of 1996 Amendments note below.
    Subsec. (d)(2)(H). Pub. L. 104-99, Sec. 402(d)(6)(A)(iv), (f), 
temporarily substituted ``An owner'' for ``Notwithstanding subsection 
(d)(1)(A)(i) of this section, an owner''. See Effective and Termination 
Dates of 1996 Amendments note below.
    Subsec. (o)(3)(B). Pub. L. 104-99, Sec. 402(d)(3), (f), temporarily 
amended subpar. (B) generally. Prior to amendment, subpar. (B) read as 
follows: ``In selecting families to be assisted, preference shall be 
given to families which, at the time they are seeking assistance, occupy 
substandard housing (including families that are homeless or living in a 
shelter for homeless families), are involuntarily displaced (including 
displacement because of disposition of a multifamily housing project 
under section 1701z-11 of title 12), or are paying more than 50 per 
centum of family income for rent. A public housing agency may provide 
for circumstances in which families who do not qualify for any 
preference established in the preceding sentence are provided assistance 
under this subsection before families who do qualify for such 
preference, except that not more than 10 percent (or such higher 
percentage determined by the Secretary to be necessary to ensure that 
public housing agencies can assist families in accordance with 
subsection (u)(2) of this section or determined by the Secretary to be 
appropriate for other good cause) of the families who initially receive 
assistance in any 1-year period (or such shorter period selected by the 
public housing agency before the beginning of its first full year 
subject to this sentence) may be families who do not qualify for such 
preference. The public housing agency shall in implementing the 
preceding sentence establish a system of preferences in writing and 
after public hearing to respond to local housing needs and priorities 
which may include (i) assisting very low-income families who either 
reside in transitional housing assisted under title IV of the Stewart B. 
McKinney Homeless Assistance Act, or participate in a program designed 
to provide public assistance recipients with greater access to 
employment and educational opportunities, (ii) assisting families in 
accordance with subsection (u)(2) of this section; (iii) assisting 
families identified by local public agencies involved in providing for 
the welfare of children as having a lack of adequate housing that is a 
primary factor in the imminent placement of a child in foster care, or 
in preventing the discharge of a child from foster care and 
reunification and his or her family; (iv) assisting youth, upon 
discharge from foster care, in cases in which return to the family or 
extended family or adoption is not available; (v) assisting veterans who 
are eligible and have applied for assistance, will use the assistance 
for a dwelling unit designed for the handicapped, and, upon discharge or 
eligibility for discharge from a hospital or nursing home, have physical 
disability which, because of the configuration of their homes, prevents 
them from access to or use of their homes; and (vi) achieving other 
objectives of national housing policy as affirmed by Congress. Any 
individual or family evicted from housing assisted under the chapter by 
reason of drug-related criminal activity (as defined in subsection 
(f)(5) of this section) shall not be eligible for a preference under any 
provision of this subparagraph for 3 years unless the evicted tenant 
successfully completes a rehabilitation program approved by the 
Secretary (which shall include waiver for any member of a family of an 
individual prohibited from tenancy under this clause who the agency 
determines clearly did not participate in and had no knowledge of such 
criminal activity or when circumstances leading to eviction no longer 
exist).'' See Effective and Termination Dates of 1996 Amendments note 
below.
    Subsec. (t). Pub. L. 104-134, Sec. 101(e) [title II, Sec. 203(a), 
(d)], temporarily repealed subsec. (t) which read as follows:
    ``(1) No owner who has entered into a contract for housing 
assistance payments under this section on behalf of any tenant in a 
multifamily housing project shall refuse--
        ``(A) to lease any available dwelling unit in any multifamily 
    housing project of such owner that rents for an amount not greater 
    than the fair market rent for a comparable unit, as determined by 
    the Secretary under this section, to a holder of a certificate of 
    eligibility under this section a proximate cause of which is the 
    status of such prospective tenant as a holder of such certificate, 
    and to enter into a housing assistance payments contract respecting 
    such unit; or
        ``(B) to lease any available dwelling unit in any multifamily 
    housing project of such owner to a holder of a voucher under 
    subsection (o) of this section, and to enter into a voucher contract 
    respecting such unit, a proximate cause of which is the status of 
    such prospective tenant as holder of such voucher.
    ``(2) For purposes of this subsection, the term `multifamily housing 
project' means a residential building containing more than 4 dwelling 
units.'' See Effective and Termination Dates of 1996 Amendments note 
below.
    Subsec. (v). Pub. L. 104-99, Sec. 405(c), amended subsec. (v) 
generally. Prior to amendment, subsec. (v) read as follows:
    ``(1) The Secretary shall extend any expiring contract entered into 
under this section for loan management assistance or execute a new 
contract for project-based loan management assistance, if the owner 
agrees to continue providing housing for low-income families during the 
term of the contract.
    ``(2)(A) The eligiblity of a multifamily residential project for 
loan management assistance under this section shall be determined 
without regard to whether the project is subsidized or unsubsidized.
    ``(B) In allocating loan management assistance under this section, 
the Secretary may give a priority to any project only on the basis that 
the project has serious financial problems that are likely to result in 
a claim on the insurance fund in the near future or the project is 
eligible to receive incentives under subtitle B of the Low-Income 
Housing Preservation and Resident Homeownership Act of 1990.''
    Subsec. (bb). Pub. L. 104-134, Sec. 101[(e)] [title II, Sec. 208], 
added subsec. (bb).
    1995--Subsec. (z). Pub. L. 104-19 added subsec. (z).
    1994--Subsec. (c)(2)(A). Pub. L. 103-327 inserted at end: ``However, 
where the maximum monthly rent, for a unit in a new construction, 
substantial rehabilitation, or moderate rehabilitation project, to be 
adjusted using an annual adjustment factor exceeds the fair market 
rental for an existing dwelling unit in the market area, the Secretary 
shall adjust the rent only to the extent that the owner demonstrates 
that the adjusted rent would not exceed the rent for an unassisted unit 
of similar quality, type, and age in the same market area, as determined 
by the Secretary. The immediately foregoing sentence shall be effective 
only during fiscal year 1995. For any unit occupied by the same family 
at the time of the last annual rental adjustment, where the assistance 
contract provides for the adjustment of the maximum monthly rent by 
applying an annual adjustment factor and where the rent for a unit is 
otherwise eligible for an adjustment based on the full amount of the 
factor, 0.01 shall be subtracted from the amount of the factor, except 
that the factor shall not be reduced to less than 1.0. The immediately 
foregoing sentence shall be effective only during fiscal year 1995.''
    Subsec. (d)(1)(A)(i). Pub. L. 103-233, Sec. 101(c)(2), inserted 
``(including displacement because of disposition of a multifamily 
housing project under section 1701z-11 of title 12)'' after 
``displaced''.
    Subsec. (d)(1)(A)(ii). Pub. L. 103-327 which directed the amendment 
of cl. (ii) by striking ``and (V)'' and inserting in lieu thereof ``(V) 
assisting families that include one or more adult members who are 
employed; and (VI)'', and inserting after the final semicolon 
``subclause (V) shall be effective only during fiscal year 1995;'', was 
not executed because the words ``and (V)'' did not appear and cl. (ii) 
already contains subcls. (V) and (VI). See 1992 Amendment note below.
    Subsec. (f)(1). Pub. L. 103-233, Sec. 101(d), inserted ``an agency 
of the Federal Government,'' after ``cooperative,''.
    Subsec. (o)(3)(B). Pub. L. 103-233, Sec. 101(c)(3), inserted 
``(including displacement because of disposition of a multifamily 
housing project under section 1701z-11 of title 12)'' after 
``displaced''.
    Subsec. (aa). Pub. L. 103-327 temporarily added subsec. (aa), 
``Refinancing incentive'', which read as follows:
    ``(1) In general.--The Secretary may pay all or a part of the up 
front costs of refinancing for each project that--
        ``(A) is constructed, substantially rehabilitated, or moderately 
    rehabilitated under this section;
        ``(B) is subject to an assistance contract under this section; 
    and
        ``(C) was subject to a mortgage that has been refinanced under 
    section 223(a)(7) or section 223(f) of the National Housing Act to 
    lower the periodic debt service payments of the owner.
    ``(2) Share from reduced assistance payments.--The Secretary may pay 
the up front cost of refinancing only--
        ``(A) to the extent that funds accrue to the Secretary from the 
    reduced assistance payments that results from the refinancing; and
        ``(B) after the application of amounts in accordance with 
    section 1012 of the Stewart B. McKinney Homeless Assistance 
    Amendments Act of 1988.''
See Effective and Termination Dates of 1994 Amendment note below.
    1992--Subsec. (c)(2)(B). Pub. L. 102-550, Sec. 1012(g), inserted at 
end ``The Secretary may (at the discretion of the Secretary and subject 
to the availability of appropriations for contract amendments), on a 
project by project basis for projects receiving project-based 
assistance, provide adjustments to the maximum monthly rents to cover 
the costs of evaluating and reducing lead-based paint hazards, as 
defined in section 4851b of this title.''
    Pub. L. 102-550, Sec. 142, inserted after first sentence ``The 
Secretary shall make additional adjustments in the maximum monthly rent 
for units under contract (subject to the availability of appropriations 
for contract amendments) to the extent the Secretary determines such 
adjustments are necessary to reflect increases in the actual and 
necessary expenses of owning and maintaining the units that have 
resulted from the expiration of a real property tax exemption.''
    Subsec. (c)(4). Pub. L. 102-550, Sec. 141(a), inserted ``or by a 
family that qualifies to receive assistance under subsection (b) of this 
section pursuant to section 223 or 226 of the Low-Income Housing 
Preservation and Resident Homeownership Act of 1990'' after first comma 
in first sentence.
    Subsec. (c)(9). Pub. L. 102-550, Sec. 143, inserted before period at 
end ``, and such term shall include termination of the contract for 
business reasons''.
    Subsec. (d)(1)(A)(ii)(V), (VI). Pub. L. 102-550, Sec. 144(a), added 
subcl. (V) and redesignated former subcl. (V) as (VI).
    Subsec. (d)(1)(B)(iii). Pub. L. 102-550, Sec. 145, inserted ``, any 
criminal activity that threatens the health, safety, or right to 
peaceful enjoyment of their residences by persons residing in the 
immediate vicinity of the premises,'' before ``or any drug-related'' and 
substituted ``tenant of any unit'' for ``public housing tenant''.
    Subsec. (d)(2)(F). Pub. L. 102-550, Sec. 674, added subpar. (F).
    Subsec. (d)(2)(G), (H). Pub. L. 102-550, Sec. 682(b), added subpars. 
(G) and (H).
    Subsec. (d)(4). Pub. L. 102-550, Sec. 660, added par. (4).
    Subsec. (f)(6), (7). Pub. L. 102-550, Sec. 146, added pars. (6) and 
(7).
    Subsec. (i). Pub. L. 102-550, Sec. 623(b), added subsec. (i).
    Subsec. (o)(3)(A). Pub. L. 102-550, Sec. 141(b), struck out ``or'' 
before ``(iv)'' and inserted before period at end ``, or'' and cl. (v).
    Subsec. (o)(3)(B)(v), (vi). Pub. L. 102-550, Sec. 144(b), in third 
sentence, added cl. (v) and redesignated former cl. (v) as (vi).
    Subsec. (q)(3), (4). Pub. L. 102-550, Sec. 675, added par. (3) and 
redesignated former par. (3) as (4).
    Subsec. (r)(1). Pub. L. 102-550, Sec. 147, inserted before period at 
end ``; except that any family not living within the jurisdiction of a 
public housing agency at the time that such family applies for 
assistance from such agency shall, during the 12-month period beginning 
upon the receipt of any tenant-based rental assistance made available on 
behalf of the family, use such assistance to rent an eligible dwelling 
unit located within the jurisdiction served by such public housing 
agency''.
    Subsec. (x)(1). Pub. L. 102-550, Sec. 148, amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``The budget 
authority available under section 1437c(c) of this title for assistance 
under subsection (b) of this section is authorized to be increased by 
$35,000,000 on or after October 1, 1990, by $35,000,000 on or after 
October 1, 1991.''
    Subsec. (y). Pub. L. 102-550, Sec. 185(a), added subsec. (y).
    1991--Subsec. (c)(1). Pub. L. 102-139 inserted provisions relating 
to separate fair market rentals for Monroe County, Pennsylvania.
    1990--Subsec. (a). Pub. L. 101-625, Sec. 572(1), which directed the 
substitution of ``low-income families'' for ``lower income families'', 
was executed by making the substitution for ``lower-income families'' to 
reflect the probable intent of Congress.
    Pub. L. 101-625, Sec. 548(b), inserted at end ``A public housing 
agency may contract to make assistance payments to itself (or any agency 
or instrumentality thereof) as the owner of dwelling units if such 
agency is subject to the same program requirements as are applied to 
other owners. In such cases, the Secretary may establish initial rents 
within applicable limits.''
    Subsec. (b). Pub. L. 101-625, Sec. 541(a), inserted heading and 
struck out par. (1) designation preceding text.
    Subsec. (b)(2). Pub. L. 101-625, Sec. 413(b)(1), added par. (2).
    Subsec. (c)(1). Pub. L. 101-625, Sec. 543(b), inserted ``(A)'' after 
second reference to ``fair market rental'' and substituted ``a housing 
strategy as defined in section 12705 of this title, or (B) by such 
higher amount as may be requested by a tenant and approved by the public 
housing agency in accordance with paragraph (3)(B).'' for ``a local 
housing assistance plan as defined in section 1439(a)(5) of this 
title.''
    Subsec. (c)(2)(B). Pub. L. 101-625, Sec. 542, inserted at end 
``Where the Secretary determines that a project assisted under this 
section is located in a community where drug-related criminal activity 
is generally prevalent and the project's operating, maintenance, and 
capital repair expenses have been substantially increased primarily as a 
result of the prevalence of such drug-related activity, the Secretary 
may (at the discretion of the Secretary and subject to the availability 
of appropriations for contract amendments for this purpose), on a 
project by project basis, provide adjustments to the maximum monthly 
rents, to a level no greater than 120 percent of the project rents, to 
cover the costs of maintenance, security, capital repairs, and reserves 
required for the owner to carry out a strategy acceptable to the 
Secretary for addressing the problem of drug-related criminal activity. 
Any rent comparability standard required under this paragraph may be 
waived by the Secretary to so implement the preceding sentence.''
    Subsec. (c)(3). Pub. L. 101-625, Sec. 543(a), designated existing 
provisions as subpar. (A) and added subpar. (B).
    Subsec. (c)(9). Pub. L. 101-625, Sec. 544, inserted after first 
sentence ``The owner's notice shall include a statement that the owner 
and the Secretary may agree to a renewal of the contract, thus avoiding 
the termination.'' and inserted at end ``Within 30 days of the 
Secretary's finding, the owner shall provide written notice to each 
tenant of the Secretary's decision.''
    Subsec. (c)(10). Pub. L. 101-625, Sec. 572(2), substituted ``low-
income housing'' for ``lower income housing''.
    Subsec. (d)(1)(A). Pub. L. 101-625, Sec. 545(a), amended subpar. (A) 
generally. Prior to amendment, subpar. (A) read as follows: ``the 
selection of tenants for such unit shall be the function of the owner, 
subject to the provisions of the annual contributions contract between 
the Secretary and the agency, except that (i) the tenant selection 
criteria used by the owner shall give preference to families which 
occupy substandard housing, are paying more than 50 per centum of family 
income for rent, or are involuntarily displaced at the time they are 
seeking assistance under this section; and (ii) the public housing 
agency may provide for circumstances in which families who do not 
qualify for any preference established in clause (i) are provided 
assistance before families who do qualify for such preference, except 
that not more than 10 percent (or such higher percentage determined by 
the Secretary to be necessary to ensure that public housing agencies can 
assist families in accordance with subsection (u)(2) of this section or 
determined by the Secretary to be appropriate for other good cause) of 
the families who initially receive assistance in any 1-year period (or 
such shorter period selected by the public housing agency before the 
beginning of its first full year subject to this clause) may be families 
who do not qualify for such preference;''.
    Subsec. (d)(1)(B)(iii), (iv). Pub. L. 101-625, Sec. 546, added cls. 
(iii) and (iv).
    Subsec. (d)(2)(A). Pub. L. 101-625, Sec. 552(b), inserted after 
first sentence ``The Secretary shall permit public housing agencies to 
enter into contracts for assistance payments of less than 12 months 
duration in order to avoid disruption in assistance to eligible families 
if the annual contributions contract is within 1 year of its expiration 
date.''
    Pub. L. 101-625, Sec. 613(a)(1), inserted at end ``Notwithstanding 
any other provision of this section, a public housing agency and an 
applicable State agency may, on a priority basis, attach to structures 
not more than an additional 15 percent of the assistance provided by the 
public housing agency or the applicable State agency only with respect 
to projects assisted under a State program that permits the owner of the 
projects to prepay a State assisted or subsidized mortgage on the 
structure, except that attachment of assistance under this sentence 
shall be for the purpose of (i) providing incentives to owners to 
preserve such projects for occupancy by lower and moderate income 
families (for the period that assistance under this sentence is 
available), and (ii) to assist lower income tenants to afford any 
increases in rent that may be required to induce the owner to maintain 
occupancy in the project by lower and moderate income tenants. Any 
assistance provided to lower income tenants under the preceding sentence 
shall not be considered for purposes of the limitation under paragraph 
(1)(A) regarding the percentage of families that may receive assistance 
under this section who do not qualify for preferences under such 
paragraph.''
    Subsec. (d)(2)(C). Pub. L. 101-625, Sec. 613(a)(2), inserted at end 
``To the extent assistance is used as provided in the penultimate 
sentence of subparagraph (A), the contract for assistance may, at the 
option of the public housing agency, have an initial term not exceeding 
15 years.''
    Pub. L. 101-625, Sec. 547(c), amended subpar. (C) generally. Prior 
to amendment, subpar. (C) read as follows: ``Any contract for assistance 
payments that is attached to a structure under this paragraph shall (at 
the option of the public housing agency but subject to available funds) 
be renewable for 2 additional 5-year terms, except that the aggregate 
term of the initial contract and renewals shall not exceed 15 years.''
    Subsec. (d)(2)(D), (E). Pub. L. 101-625, Sec. 547(a), (b), added 
subpars. (D) and (E).
    Subsec. (e)(2). Pub. L. 101-625, Sec. 289(b), struck out par. (2) 
which read as follows: ``For the purpose of upgrading and thereby 
preserving the Nation's housing stock, the Secretary is authorized to 
make assistance payments under this section directly or through public 
housing agencies pursuant to contracts with owners or prospective owners 
who agree to upgrade housing so as to make and keep such housing decent, 
safe, and sanitary through upgrading which involves less than 
substantial rehabilitation, as such upgrading and rehabilitation are 
defined by the Secretary, and which shall involve a minimum expenditure 
of $3,000 for a unit, including its prorated share of work to be 
accomplished on common areas or systems. The Secretary is authorized to 
prescribe such terms and conditions for contracts entered into under 
this section pursuant to this paragraph as the Secretary determines to 
be necessary and appropriate, except that such terms and conditions, to 
the maximum extent feasible, shall be consistent with terms and 
conditions otherwise applicable with respect to other dwelling units 
assisted under this section. Notwithstanding subsection (c)(1) of this 
section, the Secretary may, in carrying out the preceding sentence, 
establish a maximum monthly rent (for units upgraded pursuant to this 
paragraph) which exceeds the fair market rental by not more than 20 per 
centum if such units are located in an area where the Secretary finds 
cost levels so require, except that the Secretary may approve maximum 
monthly rents which exceed the fair market rentals by more than 20 but 
not more than 30 per centum where the Secretary determines that special 
circumstances warrant such higher rent or where necessary to the 
implementation of a local housing assistance plan. The Secretary is also 
authorized to make assistance available under this section pursuant to 
this paragraph to any unit in a housing project which, on an overall 
basis, reflects the need for such upgrading. The Secretary shall 
increase the amount of assistance provided under this paragraph above 
the amount of assistance otherwise permitted by this paragraph and 
subsection (c)(1) of this section, if the Secretary determines such 
increase necessary to assist in the sale of multifamily housing projects 
owned by the Department of Housing and Urban Development. In order to 
maximize the availability of low-income housing, in providing assistance 
under this paragraph, the Secretary shall include in any calculation or 
determination regarding the amount of the assistance to be made 
available the extent to which any proceeds are available from any tax 
credits provided under section 42 of title 26 (or from any syndication 
of such credits) with respect to the housing. For each fiscal year, the 
Secretary may not provide assistance pursuant to this paragraph to any 
project for rehabilitation of more than 100 units. Assistance pursuant 
to this paragraph shall be allocated according to the formula 
established pursuant to section 1439(d) of this title, and awarded 
pursuant to a competition under such section. The Secretary shall 
maintain a single listing of any assistance provided pursuant to this 
paragraph, which shall include a statement identifying the owner and 
location of the project to which assistance was made, the amount of the 
assistance, and the number of units assisted.''
    Subsec. (f)(1). Pub. L. 101-625, Sec. 548(a), substituted ``dwelling 
units'' for ``newly constructed or substantially rehabilitated dwelling 
units as described in this section''.
    Subsec. (f)(4), (5). Pub. L. 101-625, Sec. 549, added pars. (4) and 
(5).
    Subsec. (j)(1). Pub. L. 101-625, Sec. 572(1), substituted ``low-
income families'' for ``lower income families'' in introductory 
provisions.
    Subsec. (o). Pub. L. 101-625, Sec. 541(b), inserted heading.
    Subsec. (o)(3). Pub. L. 101-625, Sec. 545(2)[(b)], inserted ``(A)'' 
after ``(3)'', redesignated former cls. (A) to (D) as cls. (i) to (iv), 
respectively, inserted ``(B)'' before ``In selecting families'', 
``(including families that are homeless or living in a shelter for 
homeless families)'' after ``substandard housing'', and inserted at end 
``The public housing agency shall in implementing the preceding sentence 
establish a system of preferences in writing and after public hearing to 
respond to local housing needs and priorities which may include (i) 
assisting very low-income families who either reside in transitional 
housing assisted under title IV of the Stewart B. McKinney Homeless 
Assistance Act, or participate in a program designed to provide public 
assistance recipients with greater access to employment and educational 
opportunities, (ii) assisting families in accordance with subsection 
(u)(2) of this section; (iii) assisting families identified by local 
public agencies involved in providing for the welfare of children as 
having a lack of adequate housing that is a primary factor in the 
imminent placement of a child in foster care, or in preventing the 
discharge of a child from foster care and reunification and his or her 
family; (iv) assisting youth, upon discharge from foster care, in cases 
in which return to the family or extended family or adoption is not 
available; and (v) achieving other objectives of national housing policy 
as affirmed by Congress. Any individual or family evicted from housing 
assisted under the chapter by reason of drug-related criminal activity 
(as defined in subsection (f)(5) of this section) shall not be eligible 
for a preference under any provision of this subparagraph for 3 years 
unless the evicted tenant successfully completes a rehabilitation 
program approved by the Secretary (which shall include waiver for any 
member of a family of an individual prohibited from tenancy under this 
clause who the agency determines clearly did not participate in and had 
no knowledge of such criminal activity or when circumstances leading to 
eviction no longer exist).''
    Pub. L. 101-625, Sec. 413(a), added cl. (D).
    Subsec. (o)(7). Pub. L. 101-625, Sec. 572(1), substituted ``low-
income families'' for ``lower income families''.
    Subsec. (o)(9). Pub. L. 101-625, Sec. 413(b)(2), added par. (9).
    Subsec. (o)(10), (11). Pub. L. 101-625, Sec. 550(a), (c), added 
pars. (10) and (11).
    Subsec. (r)(1). Pub. L. 101-625, Sec. 551, substituted ``the same 
State, or the same or a contiguous'' for ``the same, or a contiguous,''.
    Subsec. (u). Pub. L. 101-625, Sec. 572(1), substituted ``low-income 
families'' for ``lower income families'' in introductory provisions.
    Subsec. (v)(1). Pub. L. 101-625, Sec. 572(1), substituted ``low-
income families'' for ``lower income families''.
    Subsec. (v)(2)(B). Pub. L. 101-625, Sec. 603, which directed the 
substitution of ``Low-Income Housing Preservation and Resident 
Homeownership Act of 1990'' for ``Emergency Low Income Housing 
Preservation Act of 1987'' in section ``89(v)(2) of the United States 
Housing Act of 1937'', was executed to subsec. (v)(2)(B) of this section 
(section 8 of the United States Housing Act of 1937) to reflect the 
probable intent of Congress.
    Subsecs. (w), (x). Pub. L. 101-625, Secs. 552(a), 553, added 
subsecs. (w) and (x).
    1989--Subsec. (c)(2)(C). Pub. L. 101-235, Sec. 702(g), substituted 
``quality, type, and age'' for ``quality and age''.
    Pub. L. 101-235, Sec. 702(c), inserted after first sentence ``In 
implementing the limitation established under the preceding sentence, 
the Secretary shall establish regulations for conducting comparability 
studies for projects where the Secretary has reason to believe that the 
application of the formula adjustments under subparagraph (A) would 
result in such material differences. The Secretary shall conduct such 
studies upon the request of any owner of any project, or as the 
Secretary determines to be appropriate by establishing, to the extent 
practicable, a modified annual adjustment factor for such market area, 
as the Secretary shall designate, that is geographically smaller than 
the applicable housing area used for the establishment of the annual 
adjustment factor under subparagraph (A). The Secretary shall establish 
such modified annual adjustment factor on the basis of the results of a 
study conducted by the Secretary of the rents charged, and any change in 
such rents over the previous year, for assisted units and unassisted 
units of similar quality, type, and age in the smaller market area. 
Where the Secretary determines that such modified annual adjustment 
factor cannot be established or that such factor when applied to a 
particular project would result in material differences between the 
rents charged for assisted units and unassisted units of similar 
quality, type, and age in the same market area, the Secretary may apply 
an alternative methodology for conducting comparability studies in order 
to establish rents that are not materially different from rents charged 
for comparable unassisted units.''
    Subsec. (e)(2). Pub. L. 101-235, Sec. 127(1), inserted before period 
at end of first sentence ``, and which shall involve a minimum 
expenditure of $3,000 for a unit, including its prorated share of work 
to be accomplished on common areas or systems''.
    Pub. L. 101-235, Sec. 127(2), (3), inserted at end ``In order to 
maximize the availability of low-income housing, in providing assistance 
under this paragraph, the Secretary shall include in any calculation or 
determination regarding the amount of the assistance to be made 
available the extent to which any proceeds are available from any tax 
credits provided under section 42 of title 26 (or from any syndication 
of such credits) with respect to the housing. For each fiscal year, the 
Secretary may not provide assistance pursuant to this paragraph to any 
project for rehabilitation of more than 100 units. Assistance pursuant 
to this paragraph shall be allocated according to the formula 
established pursuant to section 1439(d) of this title, and awarded 
pursuant to a competition under such section. The Secretary shall 
maintain a single listing of any assistance provided pursuant to this 
paragraph, which shall include a statement identifying the owner and 
location of the project to which assistance was made, the amount of the 
assistance, and the number of units assisted.''
    1988--Subsec. (b)(1). Pub. L. 100-242, Sec. 141, inserted provisions 
at end authorizing Secretary to enter into separate contributions 
contracts with each public housing agency to obligate authority approved 
each year, beginning with fiscal year 1988.
    Subsec. (c)(1). Pub. L. 100-242, Sec. 142(a), inserted before last 
sentence ``Each fair market rental in effect under this subsection shall 
be adjusted to be effective on October 1 of each year to reflect 
changes, based on the most recent available data trended so the rentals 
will be current for the year to which they apply, of rents for existing 
or newly constructed rental dwelling units, as the case may be, of 
various sizes and types in the market area suitable for occupancy by 
persons assisted under this section.''
    Pub. L. 100-242, Sec. 142(b), inserted at end ``The Secretary shall 
establish separate fair market rentals under this paragraph for 
Westchester County in the State of New York.''
    Pub. L. 100-242, Sec. 142(c)(1), inserted at end ``If units assisted 
under this section are exempt from local rent control while they are so 
assisted or otherwise, the maximum monthly rent for such units shall be 
reasonable in comparison with other units in the market area that are 
exempt from local rent control.''
    Subsec. (c)(2)(C). Pub. L. 100-628, Sec. 1004(a)(1), substituted 
``under subparagraphs (A) and (B)'' for ``as hereinbefore provided''.
    Pub. L. 100-628, Sec. 1004(a)(2), inserted at end ``Any maximum 
monthly rent that has been reduced by the Secretary after April 14, 
1987, and prior to November 7, 1988, shall be restored to the maximum 
monthly rent in effect on April 15, 1987. For any project which has had 
its maximum monthly rents reduced after April 14, 1987, the Secretary 
shall make assistance payments (from amounts reserved for the original 
contract) to the owner of such project in an amount equal to the 
difference between the maximum monthly rents in effect on April 15, 
1987, and the reduced maximum monthly rents, multiplied by the number of 
months that the reduced maximum monthly rents were in effect.''
    Pub. L. 100-242, Sec. 142(c)(2), substituted ``assisted units and 
unassisted units of similar quality and age in the same market area'' 
for ``assisted and comparable unassisted units'' and inserted at end 
``If the Secretary or appropriate State agency does not complete and 
submit to the project owner a comparability study not later than 60 days 
before the anniversary date of the assistance contract under this 
section, the automatic annual adjustment factor shall be applied.''
    Pub. L. 100-242, Sec. 142(d), inserted at end ``The Secretary may 
not reduce the contract rents in effect on or after April 15, 1987, for 
newly constructed, substantially rehabilitated, or moderately 
rehabilitated projects assisted under this section (including projects 
assisted under this section as in effect prior to November 30, 1983), 
unless the project has been refinanced in a manner that reduces the 
periodic payments of the owner.''
    Subsec. (c)(2)(D). Pub. L. 100-242, Sec. 142(e), struck out subpar. 
(D) which read as follows: ``Notwithstanding the foregoing, the 
Secretary shall limit increases in contract rents for newly constructed 
or substantially rehabilitated projects assisted under this section to 
the amount of operating cost increases incurred with respect to 
comparable rental dwelling units of various sizes and types in the same 
market area which are suitable for occupancy by families assisted under 
this section. Where no comparable dwelling units exist in the same 
market area, the Secretary shall have authority to approve such 
increases in accordance with the best available data regarding operating 
cost increases in rental dwelling units.''
    Subsec. (c)(9), (10). Pub. L. 100-242, Sec. 262(a), (b), added pars. 
(9) and (10).
    Subsec. (d)(1)(A). Pub. L. 100-628, Sec. 1014(b), inserted cl. (i) 
designation after ``except that'' and added cl. (ii) before semicolon at 
end.
    Subsec. (d)(2). Pub. L. 100-628, Sec. 1005(b)(1), designated 
existing provisions as subpar. (A), substituted ``(i)'' and ``(ii)'' for 
``(A)'' and ``(B)'' wherever appearing, and added subpar. (B).
    Pub. L. 100-628, Sec. 1005(c), added subpar. (C).
    Pub. L. 100-242, Sec. 148, inserted exception authorizing Secretary 
to permit public housing authority to approve attachment with respect to 
not more than 15 percent of assistance provided by public housing agency 
if requirements of cl. (B) are met.
    Subsec. (o)(1). Pub. L. 100-242, Sec. 143(a)(1), substituted ``The 
Secretary may provide assistance'' for ``In connection with the rental 
rehabilitation and development program under section 1437o of this title 
or the rural housing preservation grant program under section 1490m of 
this title, or for other purposes, the Secretary is authorized to 
conduct a demonstration program''.
    Subsec. (o)(3). Pub. L. 100-628, Sec. 1014(c), inserted sentence at 
end authorizing public housing agencies to provide for circumstances in 
which families who do not qualify for any preference are provided 
assistance under this subsection before families who do qualify for such 
preference.
    Subsec. (o)(4). Pub. L. 100-242, Sec. 143(a)(2), (3), redesignated 
par. (5) as (4) and struck out former par. (4) which read as follows: 
``The Secretary shall use substantially all of the authority to enter 
into contracts under this subsection to make assistance payments for 
families residing in dwellings to be rehabilitated with assistance under 
section 1437o of this title and for families displaced as a result of 
rental housing development assisted under such section or as a result of 
activities assisted under section 1490m of this title.''
    Subsec. (o)(5). Pub. L. 100-242, Sec. 143(a)(3), redesignated par. 
(6) as (5). Former par. (5) redesignated (4).
    Subsec. (o)(6). Pub. L. 100-242, Sec. 143(a)(3), (b), redesignated 
par. (7) as (6), substituted ``annually'' for ``as frequently as twice 
during any five-year period'' in subpar. (A), and struck out subpar. (D) 
which directed that public housing agency consult with public and units 
of local government regarding impact of adjustments made under this 
section on the number of families that can be assisted. Former par. (6) 
redesignated (5).
    Subsec. (o)(7). Pub. L. 100-242, Sec. 143(a)(3), (c), redesignated 
par. (8) as (7), and struck out ``not to exceed 5 per centum of the 
amount of'' after ``utilize''. Former par. (7) redesignated (6).
    Subsec. (o)(8). Pub. L. 100-242, Sec. 143(a)(3), (d), added par. 
(8). Former par. (8) redesignated (7).
    Subsecs. (q) to (u). Pub. L. 100-242, Secs. 144-149, added subsecs. 
(q) to (u).
    Subsec. (u)(3). Pub. L. 100-628, Sec. 1006, added par. (3).
    Subsec. (v). Pub. L. 100-628, Sec. 1029, redesignated par. (2) as 
(1) and inserted ``for project-based loan management assistance'', added 
par. (2), and struck out former par. (1) which required that each 
contract entered into by Secretary for loan management assistance be for 
a term of 180 months.
    Pub. L. 100-242, Sec. 262(c), added subsec. (v).
    1984--Subsec. (d)(2). Pub. L. 98-479, Sec. 102(b)(6), substituted 
``Where the Secretary enters into an annual contributions contract with 
a public housing agency pursuant to which the agency will enter into a 
contract for assistance payments with respect to an existing structure, 
the contract for assistance payments may not be attached to the 
structure unless (A) the Secretary and the public housing agency approve 
such action, and (B) the owner agrees to rehabilitate the structure 
other than with assistance under this chapter and otherwise complies 
with the requirements of this section.'' for ``A contract under this 
section may not be attached to the structure except where the Secretary 
specifically waives the foregoing limitation and the public housing 
agency approves such action, and the owner agrees to rehabilitate the 
structure other than with assistance under this chapter and otherwise 
complies with the requirements of this section. The aggregate term of 
such contract and any contract extension may not be more than 180 
months.''
    Subsec. (e)(2). Pub. L. 98-479, Sec. 102(b)(7), inserted at end 
``The Secretary shall increase the amount of assistance provided under 
this paragraph above the amount of assistance otherwise permitted by 
this paragraph and subsection (c)(1) of this section, if the Secretary 
determines such increase necessary to assist in the sale of multifamily 
housing projects owned by the Department of Housing and Urban 
Development.''
    Subsec. (n). Pub. L. 98-479, Sec. 102(b)(8), substituted 
``subsections (b)(1) and (e)(2) of this section'' for ``subsection 
(b)(1), subsection (e)(2) of this section''.
    Subsec. (o)(3)(C). Pub. L. 98-479, Sec. 102(b)(9), added cl. (C).
    Subsec. (o)(7)(D). Pub. L. 98-479, Sec. 102(b)(10), inserted ``unit 
of'' before ``general''.
    1983--Subsec. (a). Pub. L. 98-181, Sec. 209(a)(1), substituted 
``existing housing'' for ``existing, newly constructed, and 
substantially rehabilitated housing''.
    Subsec. (b)(2). Pub. L. 98-181, Sec. 209(a)(2), repealed par. (2) 
which related to authorization of assistance payments by the Secretary 
and contractually obligated public housing agencies for construction or 
substantial rehabilitation of housing, modest in design, with units for 
occupancy by low-income families and requirement that contracts 
providing housing assistance and entered into after Aug. 13, 1981, 
specify the number of units available for occupancy by eligible 
families.
    Subsec. (d)(1)(A). Pub. L. 98-181, Sec. 203(b)(1), inserted ``, are 
paying more than 50 per centum of family income for rent,''.
    Subsec. (d)(2). Pub. L. 98-181, Sec. 208, inserted second and third 
sentences respecting waiver of limitation and limitation of contract and 
any extension to prescribed period.
    Subsec. (e)(1). Pub. L. 98-181, Sec. 209(a)(3), redesignated par. 
(4) as (1) and struck out former par. (1) which prescribed terms of 20 
to 30 years for newly constructed or substantially rehabilitated 
dwelling units.
    Subsec. (e)(2). Pub. L. 98-181, Sec. 209(a)(3), redesignated par. 
(5) as (2) and struck out former par. (2) which required owners to 
assume ownership, management, and maintenance responsibilities, 
including selection of tenants and termination of tenancy for newly 
constructed or substantially rehabilitated dwelling units.
    Pub. L. 98-181, Sec. 203(b)(2), inserted ``, are paying more than 50 
per centum of family income for rent,'' after ``substandard housing''.
    Subsec. (e)(3). Pub. L. 98-181, Sec. 209(a)(3), struck out par. (3) 
which required that construction or substantial rehabilitation of 
dwelling units be eligible for mortgages insured under the National 
Housing Act and that assistance not be withheld by reason of 
availability of mortgage insurance under section 1715z-9 of title 12 or 
tax-exempt status obligations used to finance the construction or 
rehabilitation.
    Subsec. (e)(4), (5). Pub. L. 98-181, Sec. 209(a)(3), redesignated 
pars. (4) and (5) as (1) and (2), respectively.
    Subsec. (i). Pub. L. 98-181, Sec. 209(a)(4), repealed subsec. (i) 
which related to contracts with respect to substantially rehabilitated 
dwelling units.
    Subsecs. (l), (m). Pub. L. 98-181, Sec. 209(a)(5), repealed subsec. 
(l) relating to limitation of cost and rent increases, and subsec. (m) 
relating to preference for projects on suitable State and local 
government tracts.
    Subsec. (n). Pub. L. 98-181, Sec. 209(a)(6), substituted 
``subsection (e)(2) of this section'' for ``subsection (e)(5) and 
subsection (i) of this section''.
    Pub. L. 98-181, Sec. 210(1), (2), inserted ``subsection (b)(1) of 
this section,'' before ``subsection (e)(5)'' and a comma after 
``subsection (e)(5) of this section''.
    Subsec. (n)(3). Pub. L. 98-181, Sec. 210(3)-(5), added par. (3).
    Subsec. (o). Pub. L. 98-181, Sec. 207, added subsec. (o).
    Subsec. (p). Pub. L. 98-181, Sec. 211, added subsec. (p).
    1981--Subsec. (b)(2). Pub. L. 97-35, Secs. 324(1), 325(1), inserted 
provisions relating to increasing housing opportunities for very low-
income families and provisions relating to availability for occupancy 
the number of units for which assistance is committed.
    Subsec. (c)(2)(D). Pub. L. 97-35, Sec. 324(2), added par. (D).
    Subsec. (c)(3). Pub. L. 97-35, Sec. 322(e)(1), revised formula for 
computation of amount of monthly assistance and struck out authority to 
make reviews at least every two years in cases of elderly families.
    Subsec. (c)(5). Pub. L. 97-35, Sec. 325(2), inserted reference to 
mortgages under section 1720 of title 12.
    Subsec. (c)(7). Pub. L. 97-35, Sec. 322(e)(2), struck out par. (7) 
relating to percentage requirement for families with very low income and 
redesignated former par. (8) as (7).
    Subsec. (c)(8). Pub. L. 97-35, Sec. 326(a), added par. (8). Former 
par. (8) redesignated (7).
    Subsec. (d)(1)(B). Pub. L. 97-35, Sec. 326(e)(1), substituted 
provisions relating to terms and conditions, and termination of the 
lease by the owner for provisions relating to right of the agency to 
give notice to terminate and owner the right to make representation to 
agency for termination of the tenancy.
    Subsec. (f). Pub. L. 97-35, Sec. 322(e)(3), struck out pars. (1) to 
(3) which defined ``lower income families'', ``very low-income 
families'' and ``income'', respectively, and redesignated pars. (4) to 
(6) as (1) to (3), respectively.
    Subsec. (h). Pub. L. 97-35, Sec. 322(e)(4), (5), struck out 
reference to section 1437a(1) of this title.
    Subsec. (j). Pub. L. 97-35, Sec. 329H(a), generally revised and 
reorganized provisions and, as so revised and reorganized, substituted 
provisions relating to contracts to make assistance payments to assist 
lower income families by making rental assistance payments on behalf of 
such family, for provisions relating to annual contributions contracts 
to assist lower income families by making rental assistance payments.
    Subsec. (j)(3). Pub. L. 97-35, Sec. 322(e)(6), substituted in par. 
(3) ``the rent the family is required to pay under section 1437a(a) of 
this title'' for ``25 per centum of one-twelfth of the annual income of 
such family''.
    Subsecs. (l) to (n). Pub. L. 97-35, Sec. 324(3), added subsecs. (l) 
to (n).
    1980--Subsec. (c)(1). Pub. L. 96-399, Sec. 203(a), inserted 
provision that in the case of newly constructed and substantially 
rehabilitated units, the exception in the preceding sentence shall not 
apply to more than 20 per centum of the total amount of authority to 
enter into annual contributions contracts for such units which is 
allocated to an area and obligated with respect to any fiscal year 
beginning on or after Oct. 1, 1980.
    Subsec. (e)(5). Pub. L. 96-399, Sec. 203(b), inserted provision 
relating to the authority of the Secretary, notwithstanding subsec. 
(c)(1) of this section, to establish monthly rent exceeding fair market 
rental where cost levels so require or where necessary to the 
implementation of a local housing assistance plan.
    Subsec. (j). Pub. L. 96-399, Sec. 308(c)(3), substituted 
``manufactured home'' for ``mobile home'' wherever appearing.
    1979--Subsec. (c)(3). Pub. L. 96-153, Sec. 202(b), substituted new 
provisions for computation of the amount of monthly assistance payments 
with respect to dwelling units and laid down criteria to be followed by 
the Secretary in regard to payments to families with different income 
levels.
    Subsec. (d)(1)(A). Pub. L. 96-153, Sec. 206(b)(1), substituted 
``Secretary and the agency, except that the tenant selection criteria 
used by the owner shall give preference to families which occupy 
substandard housing or are involuntarily displaced at the time they are 
seeking assistance under this section.'' for ``Secretary and the 
agency;''.
    Subsec. (e)(1). Pub. L. 96-153, Sec. 211(b), substituted ``term of 
less than two hundred and forty months'' for ``term of less than one 
month''.
    Subsec. (e)(2). Pub. L. 96-153, Sec. 206(b)(2), substituted 
``performance of such responsibilities), except that the tenant 
selection criteria shall give preference to families which occupy 
substandard housing or are involuntarily displaced at the time they are 
seeking housing assistance under this section'' for ``performance of 
such responsibilities)''.
    Subsec. (k). Pub. L. 96-153, Sec. 210, added subsec. (k).
    1978--Subsec. (e)(5). Pub. L. 95-557, Sec. 206(e), added par. (5).
    Subsec. (i). Pub. L. 95-557, Sec. 206(d)(1), added subsec. (i).
    Subsec. (j). Pub. L. 95-557, Sec. 206(f), added subsec. (j).
    1977--Subsec. (c), Pub. L. 95-128, Sec. 201(c), (d), inserted in 
par. (1) prohibition against high-rise elevator projects for families 
with children after Oct. 12, 1977, and struck out from par. (4) 
provision which prohibited payment after the sixty-day period if the 
unoccupied unit was in a project insured under the National Housing Act, 
except pursuant to section 1715z-9 of title 12.
    Subsec. (d)(3). Pub. L. 95-128, Sec. 201(e)(1), added par. (3).
    Subsec. (e)(1). Pub. L. 95-24 substituted ``three hundred and sixty 
months, except that such term may not exceed two hundred and forty 
months in the case of a project financed with assistance of a loan made 
by, or insured, guaranteed or intended for purchase by, the Federal 
Government, other than pursuant to section 1715z-9 of title 12'' for 
``two hundred and forty months'' and ``Notwithstanding the preceding 
sentence, in the case of'' for ``In the case of''.
    Subsec. (e)(2). Pub. L. 95-128, Sec. 201(e)(2), inserted provision 
respecting the Secretary's approval of any public housing agency for 
assumption of management and maintenance responsibilities of dwelling 
units under the preceding sentence.
    1976--Subsec. (c)(4). Pub. L. 94-375, Sec. 2(d), inserted provision 
extending payments to newly constructed or substantially rehabilitated 
unoccupied units in an amount equal to the debt service of such unit for 
a period not to exceed one year, provided that a good faith effort is 
being made to fill the unit, the unit provides decent and safe housing, 
the unit is not insured under the National Housing Act, except pursuant 
to section 1715z-9 of title 12, and the revenues from the project do not 
exceed the cost.
    Subsec. (e)(1). Pub. L. 94-375, Sec. 2(g), inserted ``or the 
Farmers' Home Administration'' after ``State or local agency''.
    Subsec. (f)(6). Pub. L. 94-375, Sec. 2(e), added par. (6).


                    Effective Date of 1998 Amendment

    Pub. L. 105-276, title II, Sec. 209(b), Oct. 21, 1998, 112 Stat. 
2485, provided that: ``This section [amending this section] shall take 
effect 60 days after the later of October 1, 1998 or the date of the 
enactment of this Act [Oct. 21, 1998].''
    Amendment by title V of Pub. L. 105-276 effective and applicable 
beginning upon Oct. 1, 1999, except as otherwise provided, with 
provision that Secretary may implement amendment before such date, 
except to extent that such amendment provides otherwise, and with 
savings provision, see section 503 of Pub. L. 105-276, set out as a note 
under section 1437 of this title.
    Amendment by section 514(b)(1) of Pub. L. 105-276 effective and 
applicable beginning upon Oct. 21, 1998, see section 514(g) of Pub. L. 
105-276, set out as a note under section 1701s of Title 12, Banks and 
Banking.
    Pub. L. 105-276, title V, Sec. 545(c), Oct. 21, 1998, 112 Stat. 
2604, provided that: ``Notwithstanding the amendment made by subsection 
(a) of this section [amending this section], any amendments to section 
8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) that 
are contained in title II of this Act [see Tables for classification] 
shall apply with respect to the provision of assistance under such 
section during the period before implementation (pursuant to section 559 
of this title [set out as a Regulations and Transition Provisions note 
below]) of such section 8(o) as amended by subsection (a) of this 
section.''
    Pub. L. 105-276, title V, Sec. 549(a)(3), Oct. 21, 1998, 112 Stat. 
2607, provided that: ``The amendments under this subsection [amending 
this section] are made on, and shall apply beginning upon, the date of 
the enactment of this Act [Oct. 21, 1998], and shall apply thereafter, 
notwithstanding section 203 of the Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies Appropriations 
Act, 1996 [section 101(e) [title II, Sec. 203] of Pub. L. 104-134, 
amending this section and enacting provisions set out as an Effective 
and Termination Dates of 1996 Amendments note below] (42 U.S.C. 1437f 
note) or any other provision of law (including the expiration of the 
applicability of such section 203 or any repeal of such section 203).''
    Pub. L. 105-276, title V, Sec. 554, Oct. 21, 1998, 112 Stat. 2611, 
provided that: ``Notwithstanding section 203(d) of the Departments of 
Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 1996 (as contained in section 101(e) of the 
Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Public 
Law 104-134; 42 U.S.C. 1437f note) [see Effective and Termination Dates 
of 1996 Amendments note below]), section 8 of the United States Housing 
Act of 1937 (42 U.S.C. 1437f) is amended by striking subsection (t). 
This section shall apply beginning upon, and the amendment made by this 
section is made on, and shall apply beginning upon, the date of the 
enactment of this Act [Oct. 21, 1998].''
    Pub. L. 105-276, title V, Sec. 555(c), Oct. 21, 1998, 112 Stat. 
2613, provided that: ``This section [amending this section and enacting 
provisions set out as a note below] shall take effect on, and the 
amendments made by this section are made on, and shall apply beginning 
upon, the date of the enactment of this Act [Oct. 21, 1998].''
    Amendment by section 565(c) of Pub. L. 105-276 effective and 
applicable beginning upon Oct. 21, 1998, see section 565(e) of Pub. L. 
105-276, set out as a note under section 1437d of this title.


           Effective and Termination Dates of 1996 Amendments

    Section 101(e) [title II, Sec. 203(d)] of Pub. L. 104-134, as 
amended by Pub. L. 104-204, title II, Sec. 201(e), Sept. 26, 1996, 110 
Stat. 2893; Pub. L. 105-65, title II, Sec. 201(b), Oct. 27, 1997, 111 
Stat. 1364, provided that: ``The provisions of this section [amending 
this section] shall be effective for fiscal years 1996, 1997, and 1998 
only.''
    Amendment by section 402(d)(2), (3), (6)(A)(iii), (iv) of Pub. L. 
104-99 effective Jan. 26, 1996, only for fiscal years 1996, 1997, and 
1998, and to cease to be effective Oct. 21, 1998, see section 402(f) of 
Pub. L. 104-99, as amended, and section 514(f) of Pub. L. 105-276, set 
out as notes under section 1437a of this title.


            Effective and Termination Dates of 1994 Amendment

    Amendment by Pub. L. 103-327 enacting subsec. (aa), effective only 
during fiscal year 1995, see title II in part of Pub. L. 103-327, set 
out as a note under section 1715n of Title 12, Banks and Banking.


                    Effective Date of 1992 Amendment

    Amendment by subtitles B through F of title VI [Secs. 621-685] of 
Pub. L. 102-550 applicable upon expiration of 6-month period beginning 
Oct. 28, 1992, except as otherwise provided, see section 13642 of this 
title.


                    Effective Date of 1990 Amendment

    Amendment by section 289(b)(1) of Pub. L. 101-625, repealing subsec. 
(e)(2) of this section, effective Oct. 1, 1991; however, provisions of 
subsec. (e)(2) to remain in effect with respect to single room occupancy 
dwellings as authorized by subchapter IV (Sec. 11361 et seq.) of chapter 
119 of this title, see section 12839(a)(4), (b) of this title.


           Effective Date of 1983 Amendment; Savings Provision

    Section 209(b) Pub. L. 98-181 provided that: ``The amendments made 
by subsection (a) [amending this section] shall take effect on October 
1, 1983, except that the provisions repealed shall remain in effect--
        ``(1) with respect to any funds obligated for a viable project 
    under section 8 of the United States Housing Act of 1937 [this 
    section] prior to January 1, 1984; and
        ``(2) with respect to any project financed under section 202 of 
    the Housing Act of 1959 [12 U.S.C. 1701q].''


                    Effective Date of 1981 Amendment

    Amendments by sections 322(e) and 329H(a) of Pub. L. 97-35 effective 
Oct. 1, 1981, and amendments by sections 324, 325, and 326(a) of Pub. L. 
97-35 applicable with respect to contracts entered into on or after Oct. 
1, 1981, see section 371 of Pub. L. 97-35, set out as an Effective Date 
note under section 3701 of Title 12, Banks and Banking.
    Section 326(e)(2) of Pub. L. 97-35 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply with respect 
to leases entered into on or after October 1, 1981.''


                    Effective Date of 1979 Amendment

    Amendment by section 202(b) of Pub. L. 96-153 effective Jan. 1, 
1980, except with respect to amount of tenant contribution required of 
families whose occupancy commenced prior to such date, see section 
202(c) of Pub. L. 96-153, set out as a note under section 1437a of this 
title.


                    Effective Date of 1978 Amendment

    Section 206(d)(2) of Pub. L. 95-557 provided that: ``The amendment 
made by this subsection [amending this section] shall become effective 
with respect to contracts entered into on or after 270 days following 
the date of enactment of this Act [Oct. 31, 1978].''
    Amendment by section 206(e), (f) of Pub. L. 95-557 effective Oct. 1, 
1978, see section 206(h) of Pub. L. 95-557, set out as a note under 
section 1437c of this title.


                             Effective Date

    Section effective not later than Jan. 1, 1975, see section 201(b) of 
Pub. L. 93-383, set out as a note under section 1437 of this title.


                    Applicability of 1994 Amendments

    Title II of Pub. L. 103-327, 108 Stat. 2315, third par., provided 
that: ``The immediately foregoing amendment [amending subsec. (c)(2)(A) 
of this section by authorizing modification of rent adjustment where 
adjusted rent exceeds fair market rental] shall apply to all contracts 
for new construction, substantial rehabilitation, and moderate 
rehabilitation projects under which rents are adjusted under section 
8(c)(2)(A) of such Act [subsec. (c)(2)(A) of this section] by applying 
an annual adjustment factor.''
    Title II of Pub. L. 103-327, 108 Stat. 2315, fifth par., provided 
that: ``The immediately foregoing [amending subsec. (c)(2)(A) of this 
section by inserting two sentences at end authorizing reduction of 
annual adjustment factor in certain circumstances] shall hereafter apply 
to all contracts that are subject to section 8(c)(2)(A) of such Act 
[subsec. (c)(2)(A) of this section] and that provide for rent 
adjustments using an annual adjustment factor.''


                  Regulations and Transition Provisions

    Pub. L. 105-276, title V, Sec. 559, Oct. 21, 1998, 112 Stat. 2615, 
provided that:
    ``(a) Interim Regulations.--The Secretary of Housing and Urban 
Development shall issue such interim regulations as may be necessary to 
implement the amendments made by this subtitle [subtitle C (Secs. 545-
559) of title V of Pub. L. 105-276, see Tables for classification] and 
other provisions in this title [see Tables for classification] which 
relate to section 8(o) of the United States Housing Act of 1937 [42 
U.S.C. 1437f(o)].
    ``(b) Final Regulations.--The Secretary shall issue final 
regulations necessary to implement the amendments made by this subtitle 
and other provisions in this title which relate to section 8(o) of the 
United States Housing Act of 1937 [42 U.S.C. 1437f(o)] not later then 1 
year after the date of the enactment of this Act [Oct. 21, 1998].
    ``(c) Factors For Consideration.--Before the publication of the 
final regulations under subsection (b), in addition to public comments 
invited in connection with the publication of the interim rule, the 
Secretary shall--
        ``(1) seek recommendations on the implementation of sections 
    8(o)(6)(B), 8(o)(7)(B), and 8(o)(10)(D) of the United States Housing 
    Act of 1937 [42 U.S.C. 1437f(o)(6)(B), (7)(B), (10)(D)] and of 
    renewals of expiring tenant-based assistance from organizations 
    representing--
            ``(A) State or local public housing agencies;
            ``(B) owners and managers of tenant-based housing assisted 
        under section 8 of the United States Housing Act of 1937;
            ``(C) families receiving tenant-based assistance under 
        section 8 of the United States Housing Act of 1937; and
            ``(D) legal service organizations; and
        ``(2) convene not less than 2 public forums at which the persons 
    or organizations making recommendations under paragraph (1) may 
    express views concerning the proposed disposition of the 
    recommendations.
    ``(d) Conversion Assistance.--
        ``(1) In general.--The Secretary may provide for the conversion 
    of assistance under the certificate and voucher programs under 
    subsections (b) and (o) of section 8 of the United States Housing 
    Act of 1937 [42 U.S.C. 1437f(b), (o)], as in effect before the 
    applicability of the amendments made by this subtitle, to the 
    voucher program established by the amendments made by this subtitle.
        ``(2) Continued applicability.--The Secretary may apply the 
    provisions of the United States Housing Act of 1937 [42 U.S.C. 1437 
    et seq.], or any other provision of law amended by this subtitle, as 
    those provisions were in effect immediately before the date of the 
    enactment of this Act [Oct. 21, 1998] (except that such provisions 
    shall be subject to any amendments to such provisions that may be 
    contained in title II of this Act [see Tables for classification]), 
    to assistance obligated by the Secretary before October 1, 1999, for 
    the certificate or voucher program under section 8 of the United 
    States Housing Act of 1937 [42 U.S.C. 1437f], if the Secretary 
    determines that such action is necessary for simplification of 
    program administration, avoidance of hardship, or other good cause.
    ``(e) Effective Date.--This section shall take effect on the date of 
the enactment of this Act [Oct. 21, 1998].''


                               Regulations

    Pub. L. 105-276, title V, Sec. 556(b), Oct. 21, 1998, 112 Stat. 
2613, provided that: ``The Secretary of Housing and Urban Development 
shall implement the provision added by the amendment made by subsection 
(a) [amending this section] through notice, not later than December 31, 
1998, and shall issue final regulations which shall be developed 
pursuant to the procedures for issuance of regulations under the 
negotiated rulemaking procedure under subchapter III of chapter 5 of 
title 5, United States Code, not later than one year after the date of 
the enactment of this Act [Oct. 21, 1998].''
    For provisions requiring Secretary of Housing and Urban Development 
to issue regulations necessary to implement amendment to this section by 
Pub. L. 103-233, see section 101(f) of Pub. L. 103-233, set out as a 
note under section 1701z-11 of Title 12, Banks and Banking.
    For provision requiring that not later than expiration of the 180-
day period beginning Oct. 28, 1992, the Secretary of Housing and Urban 
Development shall issue regulations implementing amendments to this 
section by section 545 of Pub. L. 101-625, see section 104 of Pub. L. 
102-550, set out as a note under section 1437d of this title.
    Section 149 of Pub. L. 102-550 provided that: ``The Secretary of 
Housing and Urban Development shall issue any final regulations 
necessary to carry out the amendments made by section 547 of the 
Cranston-Gonzalez National Affordable Housing Act [Pub. L. 101-625, 
amending this section] not later than the expiration of the 180-day 
period beginning on the date of the enactment of this Act [Oct. 28, 
1992]. The regulations shall be issued after notice and opportunity for 
public comment pursuant to the provisions of section 553 of title 5, 
United States Code (notwithstanding subsections (a)(2), (b)(B), and 
(d)(3) of such section) and shall take effect upon the expiration of the 
30-day period beginning upon issuance.''
    Section 151 of Pub. L. 102-550 provided that: ``The Secretary of 
Housing and Urban Development shall issue any final regulations 
necessary to carry out the provisions of section 555 of the Cranston-
Gonzalez National Affordable Housing Act [Pub. L. 101-625] (42 U.S.C. 
1437f note) not later than the expiration of the 180-day period 
beginning on the date of the enactment of this Act [Oct. 28, 1992]. The 
regulations shall be issued after notice and opportunity for public 
comment pursuant to the provisions of section 553 of title 5, United 
States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of 
such section) and shall take effect upon the expiration of the 30-day 
period beginning upon issuance.''


                  Determination of Administrative Fees

    Pub. L. 106-74, title II, Oct. 20, 1999, 113 Stat. 1056, provided in 
part: ``That the fee otherwise authorized under section 8(q) of such Act 
[42 U.S.C. 1437f(q)] shall be determined in accordance with section 
8(q), as in effect immediately before the enactment of the Quality 
Housing and Work Responsibility Act of 1998 [Pub. L. 105-276]''.


            Homeownership Opportunities Demonstration Program

    Pub. L. 105-276, title V, Sec. 555(b), Oct. 21, 1998, 112 Stat. 
2613, provided that:
    ``(1) In general.--With the consent of the affected public housing 
agencies, the Secretary may carry out (or contract with 1 or more 
entities to carry out) a demonstration program under section 8(y) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(y)) to expand 
homeownership opportunities for low-income families.
    ``(2) Report.--The Secretary shall report annually to Congress on 
activities conducted under this subsection.''


                     Multifamily Housing Assistance

    Subtitles A (Secs. 511-524) and D (Secs. 571-579) of title V of Pub. 
L. 105-65, as amended by Pub. L. 105-276, title V, Secs. 549(c), 597(b), 
Oct. 21, 1998, 112 Stat. 2608, 2659; Pub. L. 106-74, title II, 
Secs. 213(b), 219, title V, Secs. 531(a)-(c), 534, 538(b), Oct. 20, 
1999, 113 Stat. 1074, 1075, 1109-1116, 1120, 1123, provided that:


   ``subtitle a--fha-insured multifamily housing mortgage and housing 
                        assistance restructuring

``SEC. 511. FINDINGS AND PURPOSES.
    ``(a) Findings.--Congress finds that--
        ``(1) there exists throughout the Nation a need for decent, 
    safe, and affordable housing;
        ``(2) as of the date of enactment of this Act [Oct. 27, 1997], 
    it is estimated that--
            ``(A) the insured multifamily housing portfolio of the 
        Federal Housing Administration consists of 14,000 rental 
        properties, with an aggregate unpaid principal mortgage balance 
        of $38,000,000,000; and
            ``(B) approximately 10,000 of these properties contain 
        housing units that are assisted with project-based rental 
        assistance under section 8 of the United States Housing Act of 
        1937 [42 U.S.C. 1437f];
        ``(3) FHA-insured multifamily rental properties are a major 
    Federal investment, providing affordable rental housing to an 
    estimated 2,000,000 low- and very low-income families;
        ``(4) approximately 1,600,000 of these families live in dwelling 
    units that are assisted with project-based rental assistance under 
    section 8 of the United States Housing Act of 1937;
        ``(5) a substantial number of housing units receiving project-
    based assistance have rents that are higher than the rents of 
    comparable, unassisted rental units in the same housing rental 
    market;
        ``(6) many of the contracts for project-based assistance will 
    expire during the several years following the date of enactment of 
    this Act;
        ``(7) it is estimated that--
            ``(A) if no changes in the terms and conditions of the 
        contracts for project-based assistance are made before fiscal 
        year 2000, the cost of renewing all expiring rental assistance 
        contracts under section 8 of the United States Housing Act of 
        1937 for both project-based and tenant-based rental assistance 
        will increase from approximately $3,600,000,000 in fiscal year 
        1997 to over $14,300,000,000 by fiscal year 2000 and some 
        $22,400,000,000 in fiscal year 2006;
            ``(B) of those renewal amounts, the cost of renewing 
        project-based assistance will increase from $1,200,000,000 in 
        fiscal year 1997 to almost $7,400,000,000 by fiscal year 2006; 
        and
            ``(C) without changes in the manner in which project-based 
        rental assistance is provided, renewals of expiring contracts 
        for project-based rental assistance will require an increasingly 
        larger portion of the discretionary budget authority of the 
        Department of Housing and Urban Development in each subsequent 
        fiscal year for the foreseeable future;
        ``(8) absent new budget authority for the renewal of expiring 
    rental contracts for project-based assistance, many of the FHA-
    insured multifamily housing projects that are assisted with project-
    based assistance are likely to default on their FHA-insured mortgage 
    payments, resulting in substantial claims to the FHA General 
    Insurance Fund and Special Risk Insurance Fund;
        ``(9) more than 15 percent of federally assisted multifamily 
    housing projects are physically or financially distressed, including 
    a number which suffer from mismanagement;
        ``(10) due to Federal budget constraints, the downsizing of the 
    Department of Housing and Urban Development, and diminished 
    administrative capacity, the Department lacks the ability to ensure 
    the continued economic and physical well-being of the stock of 
    federally insured and assisted multifamily housing projects;
        ``(11) the economic, physical, and management problems facing 
    the stock of federally insured and assisted multifamily housing 
    projects will be best served by reforms that--
            ``(A) reduce the cost of Federal rental assistance, 
        including project-based assistance, to these projects by 
        reducing the debt service and operating costs of these projects 
        while retaining the low-income affordability and availability of 
        this housing;
            ``(B) address physical and economic distress of this housing 
        and the failure of some project managers and owners of projects 
        to comply with management and ownership rules and requirements; 
        and
            ``(C) transfer and share many of the loan and contract 
        administration functions and responsibilities of the Secretary 
        to and with capable State, local, and other entities; and
        ``(12) the authority and duties of the Secretary, not including 
    the control by the Secretary of applicable accounts in the Treasury 
    of the United States, may be delegated to State, local or other 
    entities at the discretion of the Secretary, to the extent the 
    Secretary determines, and for the purpose of carrying out this Act 
    [probably means title V of Pub. L. 105-65, see Short Title of 1997 
    Amendment note set out under section 1701 of Title 12, Banks and 
    Banking], so that the Secretary has the discretion to be relieved of 
    processing and approving any document or action required by these 
    reforms.
    ``(b) Purposes.--Consistent with the purposes and requirements of 
the Government Performance and Results Act of 1993 [Pub. L. 103-62, see 
Short Title of 1993 Amendment note set out under section 1101 of Title 
31, Money and Finance], the purposes of this subtitle are--
        ``(1) to preserve low-income rental housing affordability and 
    availability while reducing the long-term costs of project-based 
    assistance;
        ``(2) to reform the design and operation of Federal rental 
    housing assistance programs, administered by the Secretary, to 
    promote greater multifamily housing project operating and cost 
    efficiencies;
        ``(3) to encourage owners of eligible multifamily housing 
    projects to restructure their FHA-insured mortgages and project-
    based assistance contracts in a manner that is consistent with this 
    subtitle before the year in which the contract expires;
        ``(4) to reduce the cost of insurance claims under the National 
    Housing Act [12 U.S.C. 1701 et seq.] related to mortgages insured by 
    the Secretary and used to finance eligible multifamily housing 
    projects;
        ``(5) to streamline and improve federally insured and assisted 
    multifamily housing project oversight and administration;
        ``(6) to resolve the problems affecting financially and 
    physically troubled federally insured and assisted multifamily 
    housing projects through cooperation with residents, owners, State 
    and local governments, and other interested entities and 
    individuals;
        ``(7) to protect the interest of project owners and managers, 
    because they are partners of the Federal Government in meeting the 
    affordable housing needs of the Nation through the section 8 rental 
    housing assistance program;
        ``(8) to protect the interest of tenants residing in the 
    multifamily housing projects at the time of the restructuring for 
    the housing; and
        ``(9) to grant additional enforcement tools to use against those 
    who violate agreements and program requirements, in order to ensure 
    that the public interest is safeguarded and that Federal multifamily 
    housing programs serve their intended purposes.
``SEC. 512. DEFINITIONS.
    ``In this subtitle:
        ``(1) Comparable properties.--The term `comparable properties' 
    means properties in the same market areas, where practicable, that--
            ``(A) are similar to the eligible multifamily housing 
        project as to neighborhood (including risk of crime), type of 
        location, access, street appeal, age, property size, apartment 
        mix, physical configuration, property and unit amenities, 
        utilities, and other relevant characteristics; and
            ``(B) are not receiving project-based assistance.
        ``(2) Eligible multifamily housing project.--The term `eligible 
    multifamily housing project' means a property consisting of more 
    than 4 dwelling units--
            ``(A) with rents that, on an average per unit or per room 
        basis, exceed the rent of comparable properties in the same 
        market area, determined in accordance with guidelines 
        established by the Secretary;
            ``(B) that is covered in whole or in part by a contract for 
        project-based assistance under--
                ``(i) the new construction or substantial rehabilitation 
            program under section 8(b)(2) of the United States Housing 
            Act of 1937 [42 U.S.C. 1437f(b)(2)] (as in effect before 
            October 1, 1983);
                ``(ii) the property disposition program under section 
            8(b) of the United States Housing Act of 1937;
                ``(iii) the moderate rehabilitation program under 
            section 8(e)(2) of the United States Housing Act of 1937;
                ``(iv) the loan management assistance program under 
            section 8 of the United States Housing Act of 1937;
                ``(v) section 23 of the United States Housing Act of 
            1937 [42 U.S.C. 1437u] (as in effect before January 1, 
            1975);
                ``(vi) the rent supplement program under section 101 of 
            the Housing and Urban Development Act of 1965 [12 U.S.C. 
            1701s]; or
                ``(vii) section 8 of the United States Housing Act of 
            1937, following conversion from assistance under section 101 
            of the Housing and Urban Development Act of 1965; and
            ``(C) financed by a mortgage insured or held by the 
        Secretary under the National Housing Act [12 U.S.C. 1701 et 
        seq.].
    Such term does not include any project with an expiring contract 
    described in paragraph (1) or (2) of section 524(e).
        ``(3) Expiring contract.--The term `expiring contract' means a 
    project-based assistance contract attached to an eligible 
    multifamily housing project which, under the terms of the contract, 
    will expire.
        ``(4) Expiration date.--The term `expiration date' means the 
    date on which an expiring contract expires.
        ``(5) Fair market rent.--The term `fair market rent' means the 
    fair market rental established under section 8(c) of the United 
    States Housing Act of 1937.
        ``(6) Low-income families.--The term `low-income families' has 
    the same meaning as provided under section 3(b)(2) of the United 
    States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)].
        ``(7) Mortgage restructuring and rental assistance sufficiency 
    plan.--The term `mortgage restructuring and rental assistance 
    sufficiency plan' means the plan as provided under section 514.
        ``(8) Nonprofit organization.--The term `nonprofit organization' 
    means any private nonprofit organization that--
            ``(A) is organized under State or local laws;
            ``(B) has no part of its net earnings inuring to the benefit 
        of any member, founder, contributor, or individual; and
            ``(C) has a long-term record of service in providing or 
        financing quality affordable housing for low-income families 
        through relationships with public entities.
        ``(9) Portfolio restructuring agreement.--The term `portfolio 
    restructuring agreement' means the agreement entered into between 
    the Secretary and a participating administrative entity, as provided 
    under section 513.
        ``(10) Participating administrative entity.--The term 
    `participating administrative entity' means a public agency 
    (including a State housing finance agency or a local housing 
    agency), a nonprofit organization, or any other entity (including a 
    law firm or an accounting firm) or a combination of such entities, 
    that meets the requirements under section 513(b).
        ``(11) Project-based assistance.--The term `project-based 
    assistance' means rental assistance described in paragraph (2)(B) of 
    this section that is attached to a multifamily housing project.
        ``(12) Renewal.--The term `renewal' means the replacement of an 
    expiring Federal rental contract with a new contract under section 8 
    of the United States Housing Act of 1937, consistent with the 
    requirements of this subtitle.
        ``(13) Secretary.--The term `Secretary' means the Secretary of 
    Housing and Urban Development.
        ``(14) State.--The term `State' has the same meaning as in 
    section 104 of the Cranston-Gonzalez National Affordable Housing Act 
    [42 U.S.C. 12704].
        ``(15) Tenant-based assistance.--The term `tenant-based 
    assistance' has the same meaning as in section 8(f) of the United 
    States Housing Act of 1937.
        ``(16) Unit of general local government.--The term `unit of 
    general local government' has the same meaning as in section 104 of 
    the Cranston-Gonzalez National Affordable Housing Act.
        ``(17) Very low-income family.--The term `very low-income 
    family' has the same meaning as in section 3(b) of the United States 
    Housing Act of 1937 [42 U.S.C. 1437a(b)].
        ``(18) Qualified mortgagee.--The term `qualified mortgagee' 
    means an entity approved by the Secretary that is capable of 
    servicing, as well as originating, FHA-insured mortgages, and that--
            ``(A) is not suspended or debarred by the Secretary;
            ``(B) is not suspended or on probation imposed by the 
        Mortgagee Review Board; and
            ``(C) is not in default under any Government National 
        Mortgage Association obligation.
``SEC. 513. AUTHORITY OF PARTICIPATING ADMINISTRATIVE ENTITIES.
    ``(a) Participating Administrative Entities.--
        ``(1) In general.--Subject to subsection (b)(3), the Secretary 
    shall enter into portfolio restructuring agreements with 
    participating administrative entities for the implementation of 
    mortgage restructuring and rental assistance sufficiency plans to 
    restructure multifamily housing mortgages insured or held by the 
    Secretary under the National Housing Act [12 U.S.C. 1701 et seq.], 
    in order to--
            ``(A) reduce the costs of expiring contracts for assistance 
        under section 8 of the United States Housing Act of 1937 [42 
        U.S.C. 1437f];
            ``(B) address financially and physically troubled projects; 
        and
            ``(C) correct management and ownership deficiencies.
        ``(2) Portfolio restructuring agreements.--Each portfolio 
    restructuring agreement entered into under this subsection shall--
            ``(A) be a cooperative agreement to establish the 
        obligations and requirements between the Secretary and the 
        participating administrative entity;
            ``(B) identify the eligible multifamily housing projects or 
        groups of projects for which the participating administrative 
        entity is responsible for assisting in developing and 
        implementing approved mortgage restructuring and rental 
        assistance sufficiency plans under section 514;
            ``(C) require the participating administrative entity to 
        review and certify to the accuracy and completeness of the 
        evaluation of rehabilitation needs required under section 
        514(e)(3) for each eligible multifamily housing project included 
        in the portfolio restructuring agreement, in accordance with 
        regulations promulgated by the Secretary;
            ``(D) identify the responsibilities of both the 
        participating administrative entity and the Secretary in 
        implementing a mortgage restructuring and rental assistance 
        sufficiency plan, including any actions proposed to be taken 
        under section 516 or 517;
            ``(E) require each mortgage restructuring and rental 
        assistance sufficiency plan to be prepared in accordance with 
        the requirements of section 514 for each eligible multifamily 
        housing project;
            ``(F) include other requirements established by the 
        Secretary, including a right of the Secretary to terminate the 
        contract immediately for failure of the participating 
        administrative entity to comply with any applicable requirement;
            ``(G) if the participating administrative entity is a State 
        housing finance agency or a local housing agency, indemnify the 
        participating administrative entity against lawsuits and 
        penalties for actions taken pursuant to the agreement, excluding 
        actions involving willful misconduct or negligence;
            ``(H) include compensation for all reasonable expenses 
        incurred by the participating administrative entity necessary to 
        perform its duties under this subtitle; and
            ``(I) include, where appropriate, incentive agreements with 
        the participating administrative entity to reward superior 
        performance in meeting the purposes of this Act.
    ``(b) Selection of Participating Administrative Entity.--
        ``(1) Selection criteria.--The Secretary shall select a 
    participating administrative entity based on whether, in the 
    determination of the Secretary, the participating administrative 
    entity--
            ``(A) has demonstrated experience in working directly with 
        residents of low-income housing projects and with tenants and 
        other community-based organizations;
            ``(B) has demonstrated experience with and capacity for 
        multifamily restructuring and multifamily financing (which may 
        include risk-sharing arrangements and restructuring eligible 
        multifamily housing properties under the fiscal year 1997 
        Federal Housing Administration multifamily housing demonstration 
        program);
            ``(C) has a history of stable, financially sound, and 
        responsible administrative performance (which may include the 
        management of affordable low-income rental housing);
            ``(D) has demonstrated financial strength in terms of asset 
        quality, capital adequacy, and liquidity;
            ``(E) has demonstrated that it will carry out the specific 
        transactions and other responsibilities under this subtitle in a 
        timely, efficient, and cost-effective manner; and
            ``(F) meets other criteria, as determined by the Secretary.
        ``(2) Selection.--If more than 1 interested entity meets the 
    qualifications and selection criteria for a participating 
    administrative entity, the Secretary may select the entity that 
    demonstrates, as determined by the Secretary, that it will--
            ``(A) provide the most timely, efficient, and cost-
        effective--
                ``(i) restructuring of the mortgages covered by the 
            portfolio restructuring agreement; and
                ``(ii) administration of the section 8 project-based 
            assistance contract, if applicable; and
            ``(B) protect the public interest (including the long-term 
        provision of decent low-income affordable rental housing and 
        protection of residents, communities, and the American 
        taxpayer).
        ``(3) Partnerships.--For the purposes of any participating 
    administrative entity applying under this subsection, participating 
    administrative entities are encouraged to develop partnerships with 
    each other and with nonprofit organizations, if such partnerships 
    will further the participating administrative entity's ability to 
    meet the purposes of this Act.
        ``(4) Alternative administrators.--With respect to any eligible 
    multifamily housing project for which a participating administrative 
    entity is unavailable, or should not be selected to carry out the 
    requirements of this subtitle with respect to that multifamily 
    housing project for reasons relating to the selection criteria under 
    paragraph (1), the Secretary shall--
            ``(A) carry out the requirements of this subtitle with 
        respect to that eligible multifamily housing project; or
            ``(B) contract with other qualified entities that meet the 
        requirements of paragraph (1) to provide the authority to carry 
        out all or a portion of the requirements of this subtitle with 
        respect to that eligible multifamily housing project.
        ``(5) Priority for public agencies as participating 
    administrative entities.--The Secretary shall provide a reasonable 
    period during which the Secretary will consider proposals only from 
    State housing finance agencies or local housing agencies, and the 
    Secretary shall select such an agency without considering other 
    applicants if the Secretary determines that the agency is qualified. 
    The period shall be of sufficient duration for the Secretary to 
    determine whether any State housing finance agencies or local 
    housing agencies are interested and qualified. Not later than the 
    end of the period, the Secretary shall notify the State housing 
    finance agency or the local housing agency regarding the status of 
    the proposal and, if the proposal is rejected, the reasons for the 
    rejection and an opportunity for the applicant to respond.
        ``(6) State and local portfolio requirements.--
            ``(A) In general.--If the housing finance agency of a State 
        is selected as the participating administrative entity, that 
        agency shall be responsible for such eligible multifamily 
        housing projects in that State as may be agreed upon by the 
        participating administrative entity and the Secretary. If a 
        local housing agency is selected as the participating 
        administrative entity, that agency shall be responsible for such 
        eligible multifamily housing projects in the jurisdiction of the 
        agency as may be agreed upon by the participating administrative 
        entity and the Secretary.
            ``(B) Nondelegation.--Except with the prior approval of the 
        Secretary, a participating administrative entity may not 
        delegate or transfer responsibilities and functions under this 
        subtitle to 1 or more entities.
        ``(7) Private entity requirements.--
            ``(A) In general.--If a for-profit entity is selected as the 
        participating administrative entity, that entity shall be 
        required to enter into a partnership with a public purpose 
        entity (including the Department).
            ``(B) Prohibition.--No private entity shall share, 
        participate in, or otherwise benefit from any equity created, 
        received, or restructured as a result of the portfolio 
        restructuring agreement.
``SEC. 514. MORTGAGE RESTRUCTURING AND RENTAL ASSISTANCE SUFFICIENCY 
        PLAN.
    ``(a) In General.--
        ``(1) Development of procedures and requirements.--The Secretary 
    shall develop procedures and requirements for the submission of a 
    mortgage restructuring and rental assistance sufficiency plan for 
    each eligible multifamily housing project with an expiring contract.
        ``(2) Terms and conditions.--Each mortgage restructuring and 
    rental assistance sufficiency plan submitted under this subsection 
    shall be developed by the participating administrative entity, in 
    cooperation with an owner of an eligible multifamily housing project 
    and any servicer for the mortgage that is a qualified mortgagee, 
    under such terms and conditions as the Secretary shall require.
        ``(3) Consolidation.--Mortgage restructuring and rental 
    assistance sufficiency plans submitted under this subsection may be 
    consolidated as part of an overall strategy for more than 1 
    property.
    ``(b) Notice Requirements.--The Secretary shall establish notice 
procedures and hearing requirements for tenants and owners concerning 
the dates for the expiration of project-based assistance contracts for 
any eligible multifamily housing project.
    ``(c) Extension of Contract Term.--Subject to agreement by a project 
owner, the Secretary may extend the term of any expiring contract or 
provide a section 8 contract with rent levels set in accordance with 
subsection (g) for a period sufficient to facilitate the implementation 
of a mortgage restructuring and rental assistance sufficiency plan, as 
determined by the Secretary.
    ``(d) Tenant Rent Protection.--If the owner of a project with an 
expiring Federal rental assistance contract does not agree to extend the 
contract, not less than 12 months prior to terminating the contract, the 
project owner shall provide written notice to the Secretary and the 
tenants and the Secretary shall make tenant-based assistance available 
to tenants residing in units assisted under the expiring contract at the 
time of expiration. In addition, if after giving the notice required in 
the first sentence, an owner determines to terminate a contract, an 
owner shall provide an additional written notice with respect to the 
termination, in a form prescribed by the Secretary, not less than 120 
days prior to the termination. In the event the owner does not provide 
the 120-day notice required in the preceding sentence, the owner may not 
evict the tenants or increase the tenants' rent payment until such time 
as the owner has provided the 120-day notice and such period has 
elapsed. The Secretary may allow the owner to renew the terminating 
contract for a period of time sufficient to give tenants 120 days of 
advance notice in accordance with section 524 of this Act.
    ``(e) Mortgage Restructuring and Rental Assistance Sufficiency 
Plan.--Each mortgage restructuring and rental assistance sufficiency 
plan shall--
        ``(1) except as otherwise provided, restructure the project-
    based assistance rents for the eligible multifamily housing project 
    in a manner consistent with subsection (g), or provide for tenant-
    based assistance in accordance with section 515;
        ``(2) allow for rent adjustments by applying an operating cost 
    adjustment factor established under guidelines established by the 
    Secretary;
        ``(3) require the owner or purchaser of an eligible multifamily 
    housing project to evaluate the rehabilitation needs of the project, 
    in accordance with regulations of the Secretary, and notify the 
    participating administrative entity of the rehabilitation needs;
        ``(4) require the owner or purchaser of the project to provide 
    or contract for competent management of the project;
        ``(5) require the owner or purchaser of the project to take such 
    actions as may be necessary to rehabilitate, maintain adequate 
    reserves, and to maintain the project in decent and safe condition, 
    based on housing quality standards established by--
            ``(A) the Secretary; or
            ``(B) local housing codes or codes adopted by public housing 
        agencies that--
                ``(i) meet or exceed housing quality standards 
            established by the Secretary; and
                ``(ii) do not severely restrict housing choice;
        ``(6) require the owner or purchaser of the project to maintain 
    affordability and use restrictions in accordance with regulations 
    promulgated by the Secretary, for a term of not less than 30 years 
    which restrictions shall be--
            ``(A) contained in a legally enforceable document recorded 
        in the appropriate records; and
            ``(B) consistent with the long-term physical and financial 
        viability and character of the project as affordable housing;
        ``(7) include a certification by the participating 
    administrative entity that the restructuring meets subsidy layering 
    requirements established by the Secretary by regulation for purposes 
    of this subtitle;
        ``(8) require the owner or purchaser of the project to meet such 
    other requirements as the Secretary determines to be appropriate; 
    and
        ``(9) prohibit the owner from refusing to lease a reasonable 
    number of units to holders of certificates and vouchers under 
    section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] 
    because of the status of the prospective tenants as certificate and 
    voucher holders.
    ``(f) Tenant and Other Participation and Capacity Building.--
        ``(1) Procedures.--
            ``(A) In general.--The Secretary shall establish procedures 
        to provide an opportunity for tenants of the project, residents 
        of the neighborhood, the local government, and other affected 
        parties to participate effectively and on a timely basis in the 
        restructuring process established by this subtitle.
            ``(B) Coverage.--These procedures shall take into account 
        the need to provide tenants of the project, residents of the 
        neighborhood, the local government, and other affected parties 
        timely notice of proposed restructuring actions and appropriate 
        access to relevant information about restructuring activities. 
        To the extent practicable and consistent with the need to 
        accomplish project restructuring in an efficient manner, the 
        procedures shall give all such parties an opportunity to provide 
        comments to the participating administrative entity in writing, 
        in meetings, or in another appropriate manner (which comments 
        shall be taken into consideration by the participating 
        administrative entity).
        ``(2) Required consultation.--The procedures developed pursuant 
    to paragraph (1) shall require consultation with tenants of the 
    project, residents of the neighborhood, the local government, and 
    other affected parties, in connection with at least the following:
            ``(A) the mortgage restructuring and rental assistance 
        sufficiency plan;
            ``(B) any proposed transfer of the project; and
            ``(C) the rental assistance assessment plan pursuant to 
        section 515(c).
        ``(3) Funding.--
            ``(A) In general.--The Secretary may provide not more than 
        $10,000,000 annually in funding from which the Secretary may 
        make obligations to tenant groups, nonprofit organizations, and 
        public entities for building the capacity of tenant 
        organizations, for technical assistance in furthering any of the 
        purposes of this subtitle (including transfer of developments to 
        new owners), for technical assistance for preservation of low-
        income housing for which project-based rental assistance is 
        provided at below market rent levels and may not be renewed 
        (including transfer of developments to tenant groups, nonprofit 
        organizations, and public entities), and for tenant services, 
        from those amounts made available under appropriations Acts for 
        implementing this subtitle or previously made available for 
        technical assistance in connection with the preservation of 
        affordable rental housing for low-income persons.
            ``(B) Manner of providing.--Notwithstanding any other 
        provision of law restricting the use of preservation technical 
        assistance funds, the Secretary may provide any funds made 
        available under subparagraph (A) through existing technical 
        assistance programs pursuant to any other Federal law, including 
        the Low-Income Housing Preservation and Resident Homeownership 
        Act of 1990 [12 U.S.C. 4101 et seq.] and the Multifamily 
        [Housing] Property Disposition Reform Act of 1994 [Pub. L. 103-
        233, see Short Title of 1994 Amendment note set out under 
        section 1701 of Title 12, Banks and Banking], or through any 
        other means that the Secretary considers consistent with the 
        purposes of this subtitle, without regard to any set-aside 
        requirement otherwise applicable to those funds.
            ``(C) Prohibition.--None of the funds made available under 
        subparagraph (A) may be used directly or indirectly to pay for 
        any personal service, advertisement, telegram, telephone, 
        letter, printed or written matter, or other device, intended or 
        designed to influence in any manner a Member of Congress, to 
        favor or oppose, by vote or otherwise, any legislation or 
        appropriation by Congress, whether before or after the 
        introduction of any bill or resolution proposing such 
        legislation or appropriation.
    ``(g) Rent Levels.--
        ``(1) In general.--Except as provided in paragraph (2), each 
    mortgage restructuring and rental assistance sufficiency plan 
    pursuant to the terms, conditions, and requirements of this subtitle 
    shall establish for units assisted with project-based assistance in 
    eligible multifamily housing projects adjusted rent levels that--
            ``(A) are equivalent to rents derived from comparable 
        properties, if--
                ``(i) the participating administrative entity makes the 
            rent determination within a reasonable period of time; and
                ``(ii) the market rent determination is based on not 
            less than 2 comparable properties; or
            ``(B) if those rents cannot be determined, are equal to 90 
        percent of the fair market rents for the relevant market area.
        ``(2) Exceptions.--
            ``(A) In general.--A contract under this section may include 
        rent levels that exceed the rent level described in paragraph 
        (1) at rent levels that do not exceed 120 percent of the fair 
        market rent for the market area (except that the Secretary may 
        waive this limit for not more than five percent of all units 
        subject to restructured mortgages in any fiscal year, based on a 
        finding of special need), if the participating administrative 
        entity--
                ``(i) determines that the housing needs of the tenants 
            and the community cannot be adequately addressed through 
            implementation of the rent limitation required to be 
            established through a mortgage restructuring and rental 
            assistance sufficiency plan under paragraph (1); and
                ``(ii) follows the procedures under paragraph (3).
            ``(B) Exception rents.--In any fiscal year, a participating 
        administrative entity may approve exception rents on not more 
        than 20 percent of all units covered by the portfolio 
        restructuring agreement with expiring contracts in that fiscal 
        year, except that the Secretary may waive this ceiling upon a 
        finding of special need.
        ``(3) Rent levels for exception projects.--For purposes of this 
    section, a project eligible for an exception rent shall receive a 
    rent calculated on the actual and projected costs of operating the 
    project, at a level that provides income sufficient to support a 
    budget-based rent that consists of--
            ``(A) the debt service of the project;
            ``(B) the operating expenses of the project, as determined 
        by the participating administrative entity, including--
                ``(i) contributions to adequate reserves;
                ``(ii) the costs of maintenance and necessary 
            rehabilitation; and
                ``(iii) other eligible costs permitted under section 8 
            of the United States Housing Act of 1937;
            ``(C) an adequate allowance for potential operating losses 
        due to vacancies and failure to collect rents, as determined by 
        the participating administrative entity;
            ``(D) an allowance for a reasonable rate of return to the 
        owner or purchaser of the project, as determined by the 
        participating administrative entity, which may be established to 
        provide incentives for owners or purchasers to meet benchmarks 
        of quality for management and housing quality; and
            ``(E) other expenses determined by the participating 
        administrative entity to be necessary for the operation of the 
        project.
    ``(h) Exemptions From Restructuring.--The following categories of 
projects shall not be covered by a mortgage restructuring and rental 
assistance sufficiency plan if--
        ``(1) the primary financing or mortgage insurance for the 
    multifamily housing project that is covered by that expiring 
    contract was provided by a unit of State government or a unit of 
    general local government (or an agency or instrumentality of a unit 
    of a State government or unit of general local government) and the 
    financing involves mortgage insurance under the National Housing Act 
    [42 U.S.C. 1701 et seq.], such that the implementation of a mortgage 
    restructuring and rental assistance sufficiency plan under this 
    subtitle is in conflict with applicable law or agreements governing 
    such financing;
        ``(2) the project is a project financed under section 202 of the 
    Housing Act of 1959 [12 U.S.C. 1701q] or section 515 of the Housing 
    Act of 1949 [42 U.S.C. 1485]; or
        ``(3) the project has an expiring contract under section 8 of 
    the United States Housing Act of 1937 entered into pursuant to 
    section 441 of the Stewart B. McKinney Homeless Assistance Act [42 
    U.S.C. 11401].
``SEC. 515. SECTION 8 RENEWALS AND LONG-TERM AFFORDABILITY COMMITMENT BY 
        OWNER OF PROJECT.
    ``(a) Section 8 Renewals of Restructured Projects.--
        ``(1) Project-based assistance.--Subject to the availability of 
    amounts provided in advance in appropriations Acts, and to the 
    control of the Secretary of applicable accounts in the Treasury of 
    the United States, with respect to an expiring section 8 contract on 
    an eligible multifamily housing project to be renewed with project-
    based assistance (based on a determination under subsection (c)), 
    the Secretary shall enter into contracts with participating 
    administrative entities pursuant to which the participating 
    administrative entity shall offer to renew or extend the contract, 
    or the Secretary shall offer to renew such contract, and the owner 
    of the project shall accept the offer, if the initial renewal is in 
    accordance with the terms and conditions specified in the mortgage 
    restructuring and rental assistance sufficiency plan and the rental 
    assistance assessment plan.
        ``(2) Tenant-based assistance.--Subject to the availability of 
    amounts provided in advance in appropriations Acts and to the 
    control of the Secretary of applicable accounts in the Treasury of 
    the United States, with respect to an expiring section 8 contract on 
    an eligible multifamily housing project to be renewed with tenant-
    based assistance (based on a determination under subsection (c)), 
    the Secretary shall enter into contracts with participating 
    administrative entities pursuant to which the participating 
    administrative entity shall provide for the renewal of section 8 
    assistance on an eligible multifamily housing project with tenant-
    based assistance, or the Secretary shall provide for such renewal, 
    in accordance with the terms and conditions specified in the 
    mortgage restructuring and rental assistance sufficiency plan and 
    the rental assistance assessment plan.
    ``(b) Required Commitment.--After the initial renewal of a section 8 
contract pursuant to this section, the owner shall accept each offer 
made pursuant to subsection (a) to renew the contract, for the term of 
the affordability and use restrictions required by section 514(e)(6), if 
the offer to renew is on terms and conditions specified in the mortgage 
restructuring and rental assistance sufficiency plan.
    ``(c) Determination of Whether To Renew With Project-Based or 
Tenant-Based Assistance.--
        ``(1) Mandatory renewal of project-based assistance.--Section 8 
    assistance shall be renewed with project-based assistance, if--
            ``(A) the project is located in an area in which the 
        participating administrative entity determines, based on housing 
        market indicators, such as low vacancy rates or high absorption 
        rates, that there is not adequate available and affordable 
        housing or that the tenants of the project would not be able to 
        locate suitable units or use the tenant-based assistance 
        successfully;
            ``(B) a predominant number of the units in the project are 
        occupied by elderly families, disabled families, or elderly and 
        disabled families;
            ``(C) the project is held by a nonprofit cooperative 
        ownership housing corporation or nonprofit cooperative housing 
        trust.
        ``(2) Rental assistance assessment plan.--
            ``(A) In general.--With respect to any project that is not 
        described in paragraph (1), the participating administrative 
        entity shall, after consultation with the owner of the project, 
        develop a rental assistance assessment plan to determine whether 
        to renew assistance for the project with tenant-based assistance 
        or project-based assistance.
            ``(B) Rental assistance assessment plan requirements.--Each 
        rental assistance assessment plan developed under this paragraph 
        shall include an assessment of the impact of converting to 
        tenant-based assistance and the impact of extending project-
        based assistance on--
                ``(i) the ability of the tenants to find adequate, 
            available, decent, comparable, and affordable housing in the 
            local market;
                ``(ii) the types of tenants residing in the project 
            (such as elderly families, disabled families, large 
            families, and cooperative homeowners);
                ``(iii) the local housing needs identified in the 
            comprehensive housing affordability strategy, and local 
            market vacancy trends;
                ``(iv) the cost of providing assistance, comparing the 
            applicable payment standard to the project's adjusted rent 
            levels determined under section 514(g);
                ``(v) the long-term financial stability of the project;
                ``(vi) the ability of residents to make reasonable 
            choices about their individual living situations;
                ``(vii) the quality of the neighborhood in which the 
            tenants would reside; and
                ``(viii) the project's ability to compete in the 
            marketplace.
            ``(C) Reports to director.--Each participating 
        administrative entity shall report regularly to the Director as 
        defined in subtitle D, as the Director shall require, 
        identifying--
                ``(i) each eligible multifamily housing project for 
            which the entity has developed a rental assistance 
            assessment plan under this paragraph that determined that 
            the tenants of the project generally supported renewal of 
            assistance with tenant-based assistance, but under which 
            assistance for the project was renewed with project-based 
            assistance; and
                ``(ii) each project for which the entity has developed 
            such a plan under which the assistance is renewed using 
            tenant-based assistance.
        ``(3) Eligibility for tenant-based assistance.--Subject to 
    paragraph (4), with respect to any project that is not described in 
    paragraph (1), if a participating administrative entity approves the 
    use of tenant-based assistance based on a rental assistance 
    assessment plan developed under paragraph (2), tenant-based 
    assistance shall be provided to each assisted family (other than a 
    family already receiving tenant-based assistance) residing in the 
    project at the time the assistance described in section 512(2)(B) 
    terminates.
        ``(4) Assistance through enhanced vouchers.--In the case of any 
    family described in paragraph (3) that resides in a project 
    described in section 512(2)(B), the tenant-based assistance provided 
    shall be enhanced voucher assistance under section 8(t) of the 
    United States Housing Act of 1937 (42 U.S.C. 1437f(t)).
        ``(5) Inapplicability of certain provision.--If a participating 
    administrative entity approves renewal with project-based assistance 
    under this subsection, section 8(d)(2) of the United States Housing 
    Act of 1937 shall not apply.
``SEC. 516. PROHIBITION ON RESTRUCTURING.
    ``(a) Prohibition on Restructuring.--The Secretary may elect not to 
consider any mortgage restructuring and rental assistance sufficiency 
plan or request for contract renewal if the Secretary or the 
participating administrative entity determines that--
        ``(1)(A) the owner or purchaser of the project has engaged in 
    material adverse financial or managerial actions or omissions with 
    regard to such project; or
        ``(B) the owner or purchaser of the project has engaged in 
    material adverse financial or managerial actions or omissions with 
    regard to other projects of such owner or purchaser that are 
    federally assisted or financed with a loan from, or mortgage insured 
    or guaranteed by, an agency of the Federal Government;
        ``(2) material adverse financial or managerial actions or 
    omissions include--
            ``(A) materially violating any Federal, State, or local law 
        or regulation with regard to this project or any other federally 
        assisted project, after receipt of notice and an opportunity to 
        cure;
            ``(B) materially breaching a contract for assistance under 
        section 8 of the United States Housing Act of 1937 [42 U.S.C. 
        1437f], after receipt of notice and an opportunity to cure;
            ``(C) materially violating any applicable regulatory or 
        other agreement with the Secretary or a participating 
        administrative entity, after receipt of notice and an 
        opportunity to cure;
            ``(D) repeatedly and materially violating any Federal, 
        State, or local law or regulation with regard to the project or 
        any other federally assisted project;
            ``(E) repeatedly and materially breaching a contract for 
        assistance under section 8 of the United States Housing Act of 
        1937;
            ``(F) repeatedly and materially violating any applicable 
        regulatory or other agreement with the Secretary or a 
        participating administrative entity;
            ``(G) repeatedly failing to make mortgage payments at times 
        when project income was sufficient to maintain and operate the 
        property;
            ``(H) materially failing to maintain the property according 
        to housing quality standards after receipt of notice and a 
        reasonable opportunity to cure; or
            ``(I) committing any actions or omissions that would warrant 
        suspension or debarment by the Secretary;
        ``(3) the owner or purchaser of the property materially failed 
    to follow the procedures and requirements of this subtitle, after 
    receipt of notice and an opportunity to cure; or
        ``(4) the poor condition of the project cannot be remedied in a 
    cost effective manner, as determined by the participating 
    administrative entity.
The term `owner' as used in this subsection, in addition to it having 
the same meaning as in section 8(f) of the United States Housing Act of 
1937, also means an affiliate of the owner. The term `purchaser' as used 
in this subsection means any private person or entity, including a 
cooperative, an agency of the Federal Government, or a public housing 
agency, that, upon purchase of the project, would have the legal right 
to lease or sublease dwelling units in the project, and also means an 
affiliate of the purchaser. The terms `affiliate of the owner' and 
`affiliate of the purchaser' means any person or entity (including, but 
not limited to, a general partner or managing member, or an officer of 
either) that controls an owner or purchaser, is controlled by an owner 
or purchaser, or is under common control with the owner or purchaser. 
The term `control' means the direct or indirect power (under contract, 
equity ownership, the right to vote or determine a vote, or otherwise) 
to direct the financial, legal, beneficial or other interests of the 
owner or purchaser.
    ``(b) Opportunity To Dispute Findings.--
        ``(1) In general.--During the 30-day period beginning on the 
    date on which the owner or purchaser of an eligible multifamily 
    housing project receives notice of a rejection under subsection (a) 
    or of a mortgage restructuring and rental assistance sufficiency 
    plan under section 514, the Secretary or participating 
    administrative entity shall provide that owner or purchaser with an 
    opportunity to dispute the basis for the rejection and an 
    opportunity to cure.
        ``(2) Affirmation, modification, or reversal.--
            ``(A) In general.--After providing an opportunity to dispute 
        under paragraph (1), the Secretary or the participating 
        administrative entity may affirm, modify, or reverse any 
        rejection under subsection (a) or rejection of a mortgage 
        restructuring and rental assistance sufficiency plan under 
        section 514.
            ``(B) Reasons for decision.--The Secretary or the 
        participating administrative entity, as applicable, shall 
        identify the reasons for any final decision under this 
        paragraph.
            ``(C) Review process.--The Secretary shall establish an 
        administrative review process to appeal any final decision under 
        this paragraph.
    ``(c) Final Determination.--Any final determination under this 
section shall not be subject to judicial review.
    ``(d) Displaced Tenants.--Subject to the availability of amounts 
provided in advance in appropriations Acts, for any low-income tenant 
that is residing in a project or receiving assistance under section 8 of 
the United States Housing Act of 1937 [42 U.S.C. 1437f] at the time of 
rejection under this section, that tenant shall be provided with tenant-
based assistance and reasonable moving expenses, as determined by the 
Secretary.
    ``(e) Transfer of Property.--For properties disqualified from the 
consideration of a mortgage restructuring and rental assistance 
sufficiency plan under this section in accordance with paragraph (1) or 
(2) of subsection (a) because of actions by an owner or purchaser, the 
Secretary shall establish procedures to facilitate the voluntary sale or 
transfer of a property as part of a mortgage restructuring and rental 
assistance sufficiency plan, with a preference for tenant organizations 
and tenant-endorsed community-based nonprofit and public agency 
purchasers meeting such reasonable qualifications as may be established 
by the Secretary.
``SEC. 517. RESTRUCTURING TOOLS.
    ``(a) Mortgage Restructuring.--
        ``(1) In this subtitle, an approved mortgage restructuring and 
    rental assistance sufficiency plan shall include restructuring 
    mortgages in accordance with this subsection to provide--
            ``(A) a restructured or new first mortgage that is 
        sustainable at rents at levels that are established in section 
        514(g); and
            ``(B) a second mortgage that is in an amount equal to no 
        more than the difference between the restructured or new first 
        mortgage and the indebtedness under the existing insured 
        mortgage immediately before it is restructured or refinanced, 
        provided that the amount of the second mortgage shall be in an 
        amount that the Secretary or participating administrative entity 
        determines can reasonably be expected to be repaid.
        ``(2) The second mortgage shall bear interest at a rate not to 
    exceed the applicable Federal rate as defined in section 1274(d) of 
    the Internal Revenue Code of 1986 [26 U.S.C. 1274(d)]. The term of 
    the second mortgage shall be equal to the term of the restructured 
    or new first mortgage.
        ``(3) Payments on the second mortgage shall be deferred when the 
    first mortgage remains outstanding, except to the extent there is 
    excess project income remaining after payment of all reasonable and 
    necessary operating expenses (including deposits in a reserve for 
    replacement), debt service on the first mortgage, and any other 
    expenditures approved by the Secretary. At least 75 percent of any 
    excess project income shall be applied to payments on the second 
    mortgage, and the Secretary or the participating administrative 
    entity may permit up to 25 percent to be paid to the project owner 
    if the Secretary or participating administrative entity determines 
    that the project owner meets benchmarks for management and housing 
    quality.
        ``(4) The full amount of the second mortgage shall be 
    immediately due and payable if--
            ``(A) the first mortgage is terminated or paid in full, 
        except as otherwise provided by the holder of the second 
        mortgage;
            ``(B) the project is purchased and the second mortgage is 
        assumed by any subsequent purchaser in violation of guidelines 
        established by the Secretary; or
            ``(C) the Secretary provides notice to the project owner 
        that such owner has failed to materially comply with any 
        requirements of this section or the United States Housing Act of 
        1937 [42 U.S.C. 1437 et seq.] as those requirements apply to the 
        project, with a reasonable opportunity for such owner to cure 
        such failure.
        ``(5) The Secretary may modify the terms or forgive all or part 
    of the second mortgage if the Secretary holds the second mortgage 
    and if the project is acquired by a tenant organization or tenant-
    endorsed community-based nonprofit or public agency, pursuant to 
    guidelines established by the Secretary.
        ``(6) The second mortgage under this section may be a first 
    mortgage if no restructured or new first mortgage will meet the 
    requirement of paragraph (1)(A).
    ``(b) Restructuring Tools.--In addition to the requirements of 
subsection (a) and to the extent these actions are consistent with this 
section and with the control of the Secretary of applicable accounts in 
the Treasury of the United States, an approved mortgage restructuring 
and rental assistance sufficiency plan under this subtitle may include 
one or more of the following actions:
        ``(1) Full or partial payment of claim.--making a full payment 
    of claim or partial payment of claim under section 541(b) of the 
    National Housing Act [12 U.S.C. 1735f-19(b)], as amended by section 
    523(b) of this Act. Any payment under this paragraph shall not 
    require the approval of a mortgagee;
        ``(2) Refinancing of debt.--refinancing of all or part of the 
    debt on a project. If the refinancing involves a mortgage that will 
    continue to be insured under the National Housing Act [12 U.S.C. 
    1701 et seq.], the refinancing shall be documented through amendment 
    of the existing insurance contract and not through a new insurance 
    contract;
        ``(3) Mortgage insurance.--providing FHA multifamily mortgage 
    insurance, reinsurance or other credit enhancement alternatives, 
    including multifamily risk-sharing mortgage programs, as provided 
    under section 542 of the Housing and Community Development Act of 
    1992 [Pub. L. 102-550, 12 U.S.C. 1707 note]. The Secretary shall use 
    risk-shared financing under section 542(c) of the Housing and 
    Community Development Act of 1992 for any mortgage restructuring, 
    rehabilitation financing, or debt refinancing included as part of a 
    mortgage restructuring and rental assistance sufficiency plan if the 
    terms and conditions are considered to be the best available 
    financing in terms of financial savings to the FHA insurance funds 
    and will result in reduced risk of loss to the Federal Government. 
    Any limitations on the number of units available for mortgage 
    insurance under section 542 shall not apply to eligible multifamily 
    housing projects. Any credit subsidy costs of providing mortgage 
    insurance shall be paid from the Liquidating Accounts of the General 
    Insurance Fund or the Special Risk Insurance Fund and shall not be 
    subject to any limitation on appropriations;
        ``(4) Credit enhancement.--providing any additional State or 
    local mortgage credit enhancements and risk-sharing arrangements 
    that may be established with State or local housing finance 
    agencies, the Federal Housing Finance Board, the Federal National 
    Mortgage Association, and the Federal Home Loan Mortgage 
    Corporation, to a modified or refinanced first mortgage;
        ``(5) Compensation of third parties.--consistent with the 
    portfolio restructuring agreement, entering into agreements, 
    incurring costs, or making payments, including incentive agreements 
    designed to reward superior performance in meeting the purposes of 
    this Act, as may be reasonably necessary, to compensate the 
    participation of participating administrative entities and other 
    parties in undertaking actions authorized by this subtitle. Upon 
    request to the Secretary, participating administrative entities that 
    are qualified under the United States Housing Act of 1937 to serve 
    as contract administrators shall be the contract administrators 
    under section 8 of the United States Housing Act of 1937 [12 U.S.C. 
    1437f] for purposes of any contracts entered into as part of an 
    approved mortgage restructuring and rental assistance sufficiency 
    plan. Subject to the availability of amounts provided in advance in 
    appropriations Acts for administrative fees under section 8 of the 
    United States Housing Act of 1937, such amounts may be used to 
    compensate participating administrative entities for compliance 
    monitoring costs incurred under section 519;
        ``(6) Use of project accounts.--applying any residual receipts, 
    replacement reserves, and any other project accounts not required 
    for project operations, to maintain the long-term affordability and 
    physical condition of the property or of other eligible multifamily 
    housing projects. The participating administrative entity may 
    expedite the acquisition of residual receipts, replacement reserves, 
    or other such accounts, by entering into agreements with owners of 
    housing covered by an expiring contract to provide an owner with a 
    share of the receipts, not to exceed 10 percent, in accordance with 
    guidelines established by the Secretary; and
        ``(7) Rehabilitation needs.--
            ``(A) In general.--Rehabilitation may be paid from the 
        residual receipts, replacement reserves, or any other project 
        accounts not required for project operations, or, as provided in 
        appropriations Acts and subject to the control of the Secretary 
        of applicable accounts in the Treasury of the United States, 
        from budget authority provided for increases in the budget 
        authority for assistance contracts under section 8 of the United 
        States Housing Act of 1937, the rehabilitation grant program 
        established under section 236 of the National Housing Act [12 
        U.S.C. 1715z-1], as amended by section 531 of subtitle B of this 
        Act, or through the debt restructuring transaction. 
        Rehabilitation under this paragraph shall only be for the 
        purpose of restoring the project to a non-luxury standard 
        adequate for the rental market intended at the original approval 
        of the project-based assistance.
            ``(B) Contribution.--Each owner or purchaser of a project to 
        be rehabilitated under an approved mortgage restructuring and 
        rental assistance sufficiency plan shall contribute, from non-
        project resources, not less than 25 percent of the amount of 
        rehabilitation assistance received, except that the 
        participating administrative entity may provide an exception 
        from the requirement of this subparagraph for housing 
        cooperatives.
    ``(c) Role of FNMA and FHLMC.--[Amended section 4565 of Title 12, 
Banks and Banking.]
    ``(d) Prohibition on Equity Sharing by the Secretary.--The Secretary 
is prohibited from participating in any equity agreement or profit-
sharing agreement in conjunction with any eligible multifamily housing 
project.
    ``(e) Conflict of Interest Guidelines.--The Secretary may establish 
guidelines to prevent conflicts of interest by a participating 
administrative entity that provides, directly or through risk-sharing 
arrangements, any form of credit enhancement or financing pursuant to 
subsections [sic] (b)(3) or (b)(4) or to prevent conflicts of interest 
by any other person or entity under this subtitle.
``SEC. 518. MANAGEMENT STANDARDS.
    ``Each participating administrative entity shall establish 
management standards, including requirements governing conflicts of 
interest between owners, managers, contractors with an identity of 
interest, pursuant to guidelines established by the Secretary and 
consistent with industry standards.
``SEC. 519. MONITORING OF COMPLIANCE.
    ``(a) Compliance Agreements.--(1) Pursuant to regulations issued by 
the Secretary under section 522(a), each participating administrative 
entity, through binding contractual agreements with owners and 
otherwise, shall ensure long-term compliance with the provisions of this 
subtitle. Each agreement shall, at a minimum, provide for--
        ``(A) enforcement of the provisions of this subtitle; and
        ``(B) remedies for the breach of those provisions.
    ``(2) If the participating administrative entity is not qualified 
under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] to 
be a section 8 contract administrator or fails to perform its duties 
under the portfolio restructuring agreement, the Secretary shall have 
the right to enforce the agreement.
    ``(b) Periodic Monitoring.--
        ``(1) In general.--Not less than annually, each participating 
    administrative entity that is qualified to be the section 8 contract 
    administrator shall review the status of all multifamily housing 
    projects for which a mortgage restructuring and rental assistance 
    sufficiency plan has been implemented.
        ``(2) Inspections.--Each review under this subsection shall 
    include onsite inspection to determine compliance with housing codes 
    and other requirements as provided in this subtitle and the 
    portfolio restructuring agreements.
        ``(3) Administration.--If the participating administrative 
    entity is not qualified under the United States Housing Act of 1937 
    to be a section 8 contract administrator, either the Secretary or a 
    qualified State or local housing agency shall be responsible for the 
    review required by this subsection.
    ``(c) Audit by the Secretary.--The Comptroller General of the United 
States, the Secretary, and the Inspector General of the Department of 
Housing and Urban Development may conduct an audit at any time of any 
multifamily housing project for which a mortgage restructuring and 
rental assistance sufficiency plan has been implemented.
``SEC. 520. REPORTS TO CONGRESS.
    ``(a) Annual Review.--In order to ensure compliance with this 
subtitle, the Secretary shall conduct an annual review and report to the 
Congress on actions taken under this subtitle and the status of eligible 
multifamily housing projects.
    ``(b) Semiannual Review.--Not less than semiannually during the 2-
year period beginning on the date of the enactment of this Act [Oct. 27, 
1997] and not less than annually thereafter, the Secretary shall submit 
reports to the Committee on Banking and Financial Services of the House 
of Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate stating, for such periods, the total number of 
projects identified by participating administrative entities under each 
of clauses (i) and (ii) of section 515(c)(2)(C).
``SEC. 521. GAO AUDIT AND REVIEW.
    ``(a) Initial Audit.--Not later than 18 months after the effective 
date of final regulations promulgated under this subtitle, the 
Comptroller General of the United States shall conduct an audit to 
evaluate eligible multifamily housing projects and the implementation of 
mortgage restructuring and rental assistance sufficiency plans.
    ``(b) Report.--
        ``(1) In general.--Not later than 18 months after the audit 
    conducted under subsection (a), the Comptroller General of the 
    United States shall submit to Congress a report on the status of 
    eligible multifamily housing projects and the implementation of 
    mortgage restructuring and rental assistance sufficiency plans.
        ``(2) Contents.--The report submitted under paragraph (1) shall 
    include--
            ``(A) a description of the initial audit conducted under 
        subsection (a); and
            ``(B) recommendations for any legislative action to increase 
        the financial savings to the Federal Government of the 
        restructuring of eligible multifamily housing projects balanced 
        with the continued availability of the maximum number of 
        affordable low-income housing units.
``SEC. 522. REGULATIONS.
    ``(a) Rulemaking and Implementation.--
        ``(1) Interim regulations.--The Director shall issue such 
    interim regulations as may be necessary to implement this subtitle 
    and the amendments made by this subtitle with respect to eligible 
    multifamily housing projects covered by contracts described in 
    section 512(2)(B) that expire in fiscal year 1999 or thereafter. If, 
    before the expiration of such period, the Director has not been 
    appointed, the Secretary shall issue such interim regulations.
        ``(2) Final regulations.--The Director shall issue final 
    regulations necessary to implement this subtitle and the amendments 
    made by this subtitle with respect to eligible multifamily housing 
    projects covered by contracts described in section 512(2)(B) that 
    expire in fiscal year 1999 or thereafter before the later of: (A) 
    the expiration of the 12-month period beginning upon the date of the 
    enactment of this Act [Oct. 27, 1997]; and (B) the 3-month period 
    beginning upon the appointment of the Director under subtitle D.
        ``(3) Factors for consideration.--Before the publication of the 
    final regulations under paragraph (2), in addition to public 
    comments invited in connection with publication of the interim rule, 
    the Secretary shall--
            ``(A) seek recommendations on the implementation of sections 
        513(b) and 515(c)(1) from organizations representing--
                ``(i) State housing finance agencies and local housing 
            agencies;
                ``(ii) other potential participating administering 
            entities;
                ``(iii) tenants;
                ``(iv) owners and managers of eligible multifamily 
            housing projects;
                ``(v) States and units of general local government; and
                ``(vi) qualified mortgagees; and
            ``(B) convene not less than 3 public forums at which the 
        organizations making recommendations under subparagraph (A) may 
        express views concerning the proposed disposition of the 
        recommendations.
    ``(b) Transition Provision for Contracts Expiring in Fiscal Year 
1998.--Notwithstanding any other provision of law, the Secretary shall 
apply all the terms of section 211 and section 212 of the Departments of 
Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 1997 [Pub. L. 104-204, set out below] 
(except for section 212(h)(1)(G) and the limitation in section 212(k)) 
contracts for project-based assistance that expire during fiscal year 
1998 (in the same manner that such provisions apply to expiring 
contracts defined in section 212(a)(3) of such Act), except that section 
517(a) of the Act shall apply to mortgages on projects subject to such 
contracts.
``SEC. 523. TECHNICAL AND CONFORMING AMENDMENTS.
    ``(a) Calculation of Limit on Project-Based Assistance.--[Amended 
this section.]
    ``(b) Partial Payment of Claims on Multifamily Housing Projects.--
[Amended section 1735f-19 of Title 12, Banks and Banking.]
    ``(c) Reuse and Rescission of Certain Recaptured Budget Authority.--
[Amended this section.]
    ``(d) Section 8 Contract Renewals.--[Amended section 405(a) of Pub. 
L. 104-99, set out below.]
    ``(e) Renewal Upon Request of Owner.--[Amended section 211 of Pub. 
L. 104-204, set out below.]
    ``(f) Extension of Demonstration Contract Period.--[Amended section 
212 of Pub. L. 104-204, set out below.]
``SEC. 524. RENEWAL OF EXPIRING PROJECT-BASED SECTION 8 CONTRACTS.
    ``(a) In General.--
        ``(1) Renewal.--Subject to paragraph (2), upon termination or 
    expiration of a contract for project-based assistance under section 
    8 for a multifamily housing project (and notwithstanding section 
    8(v) of the United States Housing Act of 1937 [42 U.S.C. 1437f] for 
    loan management assistance), the Secretary shall, at the request of 
    the owner of the project and to the extent sufficient amounts are 
    made available in appropriation Acts, use amounts available for the 
    renewal of assistance under section 8 of such Act to provide such 
    assistance for the project. The assistance shall be provided under a 
    contract having such terms and conditions as the Secretary considers 
    appropriate, subject to the requirements of this section. This 
    section shall not require contract renewal for a project that is 
    eligible under this subtitle for a mortgage restructuring and rental 
    assistance sufficiency plan, if there is no approved plan for the 
    project and the Secretary determines that such an approved plan is 
    necessary.
        ``(2) Prohibition on renewal.--Notwithstanding part 24 of title 
    24 of the Code of Federal Regulations, the Secretary may elect not 
    to renew assistance for a project otherwise required to be renewed 
    under paragraph (1) or provide comparable benefits under paragraph 
    (1) or (2) of subsection (e) for a project described in either such 
    paragraph, if the Secretary determines that a violation under 
    paragraphs (1) through (4) of section 516(a) has occurred with 
    respect to the project. For purposes of such a determination, the 
    provisions of section 516 shall apply to a project under this 
    section in the same manner and to the same extent that the 
    provisions of such section apply to eligible multifamily housing 
    projects, except that the Secretary shall make the determination 
    under section 516(a)(4).
        ``(3) Contract term for mark-up-to-market contracts.--In the 
    case of an expiring or terminating contract that has rent levels 
    less than comparable market rents for the market area, if the rent 
    levels under the renewal contract under this section are equal to 
    comparable market rents for the market area, the contract shall have 
    a term of not less than 5 years, subject to the availability of 
    sufficient amounts in appropriation Acts.
        ``(4) Renewal rents.--Except as provided in subsection (b), the 
    contract for assistance shall provide assistance at the following 
    rent levels:
            ``(A) Market rents.--At the request of the owner of the 
        project, at rent levels equal to the lesser of comparable market 
        rents for the market area or 150 percent of the fair market 
        rents, in the case only of a project that--
                ``(i) has rent levels under the expiring or terminating 
            contract that do not exceed such comparable market rents;
                ``(ii) does not have a low- and moderate-income use 
            restriction that can not be eliminated by unilateral action 
            by the owner;
                ``(iii) is decent, safe, and sanitary housing, as 
            determined by the Secretary;
                ``(iv) is not--
          ``(I) owned by a nonprofit entity;
          ``(II) subject to a contract for moderate rehabilitation 
                assistance under section 8(e)(2) of the United States 
                Housing Act of 1937, as in effect before October 1, 
                1991; or
          ``(III) a project for which the public housing agency provided 
                voucher assistance to one or more of the tenants after 
                the owner has provided notice of termination of the 
                contract covering the tenant's unit; and
                ``(v) has units assisted under the contract for which 
            the comparable market rent exceeds 110 percent of the fair 
            market rent.
    The Secretary may adjust the percentages of fair market rent (as 
        specified in the matter preceding clause (i) and in clause (v)), 
        but only upon a determination and written notification to the 
        Congress within 10 days of making such determination, that such 
        adjustment is necessary to ensure that this subparagraph covers 
        projects with a high risk of nonrenewal of expiring contracts 
        for project-based assistance.
            ``(B) Reduction to market rents.--In the case of a project 
        that has rent levels under the expiring or terminating contract 
        that exceed comparable market rents for the market area, at rent 
        levels equal to such comparable market rents.
            ``(C) Rents not exceeding market rents.--In the case of a 
        project that is not subject to subparagraph (A) or (B), at rent 
        levels that--
                ``(i) are not less than the existing rents under the 
            terminated or expiring contract, as adjusted by an operating 
            cost adjustment factor established by the Secretary (which 
            shall not result in a negative adjustment), if such adjusted 
            rents do not exceed comparable market rents for the market 
            area; and
                ``(ii) do not exceed comparable market rents for the 
            market area.
    In determining the rent level for a contract under this 
        subparagraph, the Secretary shall approve rents sufficient to 
        cover budget-based cost increases and shall give greater 
        consideration to providing rent at a level up to comparable 
        market rents for the market area based on the number of the 
        criteria under clauses (i) through (iii) of subparagraph (D) 
        that the project meets.
            ``(D) Waiver of 150 percent limitation.--Notwithstanding 
        subparagraph (A), at rent levels up to comparable market rents 
        for the market area, in the case of a project that meets the 
        requirements under clauses (i) through (v) of subparagraph (A) 
        and--
                ``(i) has residents who are a particularly vulnerable 
            population, as demonstrated by a high percentage of units 
            being rented to elderly families, disabled families, or 
            large families;
                ``(ii) is located in an area in which tenant-based 
            assistance would be difficult to use, as demonstrated by a 
            low vacancy rate for affordable housing, a high turnback 
            rate for vouchers, or a lack of comparable rental housing; 
            or
                ``(iii) is a high priority for the local community, as 
            demonstrated by a contribution of State or local funds to 
            the property.
    In determining the rent level for a contract under this 
        subparagraph, the Secretary shall approve rents sufficient to 
        cover budget-based cost increases and shall give greater 
        consideration to providing rent at a level up to comparable 
        market rents for the market area based on the number of the 
        criteria under clauses (i) through (iv) that the project meets.
        ``(5) Comparable market rents and comparison with fair market 
    rents.--The Secretary shall prescribe the method for determining 
    comparable market rent by comparison with rents charged for 
    comparable properties (as such term is defined in section 512), 
    which may include appropriate adjustments for utility allowances and 
    adjustments to reflect the value of any subsidy (other than section 
    8 assistance) provided by the Department of Housing and Urban 
    Development.
    ``(b) Exception Rents.--
        ``(1) Renewal.--In the case of a multifamily housing project 
    described in paragraph (2), pursuant to the request of the owner of 
    the project, the contract for assistance for the project pursuant to 
    subsection (a) shall provide assistance at the lesser of the 
    following rent levels:
            ``(A) Adjusted existing rents.--The existing rents under the 
        expiring contract, as adjusted by an operating cost adjustment 
        factor established by the Secretary (which shall not result in a 
        negative adjustment).
            ``(B) Budget-based rents.--Subject to a determination by the 
        Secretary that a rent level under this subparagraph is 
        appropriate for a project, a rent level that provides income 
        sufficient to support a budget-based rent (including a budget-
        based rent adjustment if justified by reasonable and expected 
        operating expenses).
        ``(2) Projects covered.--A multifamily housing project described 
    in this paragraph is a multifamily housing project that--
            ``(A) is not an eligible multifamily housing project under 
        section 512(2); or
            ``(B) is exempt from mortgage restructuring under this 
        subtitle pursuant to section 514(h).
        ``(3) Moderate rehabilitation projects.--In the case of a 
    project with a contract under the moderate rehabilitation program, 
    other than a moderate rehabilitation contract under section 441 of 
    the Stewart B. McKinney Homeless Assistance Act [42 U.S.C. 11401], 
    pursuant to the request of the owner of the project, the contract 
    for assistance for the project pursuant to subsection (a) shall 
    provide assistance at the lesser of the following rent levels:
            ``(A) Adjusted existing rents.--The existing rents under the 
        expiring contract, as adjusted by an operating cost adjustment 
        factor established by the Secretary (which shall not result in a 
        negative adjustment).
            ``(B) Fair market rents.--Fair market rents (less any 
        amounts allowed for tenant-purchased utilities).
            ``(C) Market rents.--Comparable market rents for the market 
        area.
    ``(c) Rent Adjustments After Renewal of Contract.--
        ``(1) Required.--After the initial renewal of a contract for 
    assistance under section 8 of the United States Housing Act of 1937 
    [42 U.S.C. 1437f] pursuant to subsection (a), (b)(1), or (e)(2), the 
    Secretary shall annually adjust the rents using an operating cost 
    adjustment factor established by the Secretary (which shall not 
    result in a negative adjustment) or, upon the request of the owner 
    and subject to approval of the Secretary, on a budget basis. In the 
    case of projects with contracts renewed pursuant to subsection (a) 
    or pursuant to subsection (e)(2) at rent levels equal to comparable 
    market rents for the market area, at the expiration of each 5-year 
    period, the Secretary shall compare existing rents with comparable 
    market rents for the market area and may make any adjustments in the 
    rent necessary to maintain the contract rents at a level not greater 
    than comparable market rents or to increase rents to comparable 
    market rents.
        ``(2) Discretionary.--In addition to review and adjustment 
    required under paragraph (1), in the case of projects with contracts 
    renewed pursuant to subsection (a) or pursuant to subsection (e)(2) 
    at rent levels equal to comparable market rents for the market area, 
    the Secretary may, at the discretion of the Secretary but only once 
    within each 5-year period referred to in paragraph (1), conduct a 
    comparison of rents for a project and adjust the rents accordingly 
    to maintain the contract rents at a level not greater than 
    comparable market rents or to increase rents to comparable market 
    rents.
    ``(d) Enhanced Vouchers Upon Contract Expiration.--
        ``(1) In general.--In the case of a contract for project-based 
    assistance under section 8 for a covered project that is not renewed 
    under subsection (a) or (b) of this section (or any other 
    authority), to the extent that amounts for assistance under this 
    subsection are provided in advance in appropriation Acts, upon the 
    date of the expiration of such contract the Secretary shall make 
    enhanced voucher assistance under section 8(t) of the United States 
    Housing Act of 1937 (42 U.S.C. 1437f(t)) available on behalf of each 
    low-income family who, upon the date of such expiration, is residing 
    in an assisted dwelling unit in the covered project.
        ``(2) Definitions.--For purposes of this subsection, the 
    following definitions shall apply:
            ``(A) Assisted dwelling unit.--The term `assisted dwelling 
        unit' means a dwelling unit that--
                ``(i) is in a covered project; and
                ``(ii) is covered by rental assistance provided under 
            the contract for project-based assistance for the covered 
            project.
            ``(B) Covered project.--The term `covered project' means any 
        housing that--
                ``(i) consists of more than four dwelling units;
                ``(ii) is covered in whole or in part by a contract for 
            project-based assistance under--
          ``(I) the new construction or substantial rehabilitation 
                program under section 8(b)(2) of the United States 
                Housing Act of 1937 (as in effect before October 1, 
                1983);
          ``(II) the property disposition program under section 8(b) of 
                the United States Housing Act of 1937;
          ``(III) the moderate rehabilitation program under section 
                8(e)(2) of the United States Housing Act of 1937 (as in 
                effect before October 1, 1991);
          ``(IV) the loan management assistance program under section 8 
                of the United States Housing Act of 1937;
          ``(V) section 23 of the United States Housing Act of 1937 [42 
                U.S.C. 1437u] (as in effect before January 1, 1975);
          ``(VI) the rent supplement program under section 101 of the 
                Housing and Urban Development Act of 1965 [12 U.S.C. 
                1701s]; or
          ``(VII) section 8 of the United States Housing Act of 1937, 
                following conversion from assistance under section 101 
                of the Housing and Urban Development Act of 1965,
          which contract will (under its own terms) expire during the 
            period consisting of fiscal years 2000 through 2004; and
                ``(iii) is not housing for which residents are eligible 
            for enhanced voucher assistance as provided, pursuant to the 
            `Preserving Existing Housing Investment' account in the 
            Departments of Veterans Affairs and Housing and Urban 
            Development, and Independent Agencies Appropriations Act, 
            1997 (Public Law 104-204; 110 Stat. 2884) or any other 
            subsequently enacted provision of law, in lieu of any 
            benefits under section 223 of the Low-Income Housing 
            Preservation and Resident Homeownership Act of 1990 (12 
            U.S.C. 4113).
        ``(4) Authorization of appropriations.--There are authorized to 
    be appropriated for each of fiscal years 2000, 2001, 2002, 2003, and 
    2004 such sums as may be necessary for enhanced voucher assistance 
    under this subsection.
    ``(e) Contractual Commitments Under Preservation Laws.--Except as 
provided in subsection (a)(2) and notwithstanding any other provision of 
this subtitle, the following shall apply:
        ``(1) Preservation projects.--Upon expiration of a contract for 
    assistance under section 8 [42 U.S.C. 1437f] for a project that is 
    subject to an approved plan of action under the Emergency Low Income 
    Housing Preservation Act of 1987 (12 U.S.C. 1715l note) or the Low-
    Income Housing Preservation and Resident Homeownership Act of 1990 
    (12 U.S.C. 4101 et seq.), to the extent amounts are specifically 
    made available in appropriation Acts, the Secretary shall provide to 
    the owner benefits comparable to those provided under such plan of 
    action, including distributions, rent increase procedures, and 
    duration of low-income affordability restrictions. This paragraph 
    shall apply to projects with contracts expiring before, on, or after 
    the date of the enactment of this section [Oct. 27, 1997].
        ``(2) Demonstration projects.--
            ``(A) In general.--Upon expiration of a contract for 
        assistance under section 8 for a project entered into pursuant 
        to any authority specified in subparagraph (B) for which the 
        Secretary determines that debt restructuring is inappropriate, 
        the Secretary shall, at the request of the owner of the project 
        and to the extent sufficient amounts are made available in 
        appropriation Acts, provide benefits to the owner comparable to 
        those provided under such contract, including annual 
        distributions, rent increase procedures, and duration of low-
        income affordability restrictions. This paragraph shall apply to 
        projects with contracts expiring before, on, or after the date 
        of the enactment of this section [Oct. 27, 1997].
            ``(B) Demonstration programs.--The authority specified in 
        this subparagraph is the authority under--
                ``(i) section 210 of the Departments of Veterans Affairs 
            and Housing and Urban Development, and Independent Agencies 
            Appropriations Act, 1996 (Public Law 104-134; 110 Stat. 
            1321-285; 42 U.S.C. 1437f note);
                ``(ii) section 212 of the Departments of Veterans 
            Affairs and Housing and Urban Development, and Independent 
            Agencies Appropriations Act, 1997 (Public Law 104-204; 110 
            Stat. 2897; 42 U.S.C. 1437f note); and
                ``(iii) either of such sections, pursuant to any 
            provision of this title [see Short Title of 1997 Amendment 
            note set out under section 1701 of title 12].
    ``(f) Preemption of Conflicting State Laws Limiting Distributions.--
        ``(1) In general.--Except as provided in paragraph (2), no State 
    or political subdivision of a State may establish, continue in 
    effect, or enforce any law or regulation that limits or restricts, 
    to an amount that is less than the amount provided for under the 
    regulations of the Secretary establishing allowable project 
    distributions to provide a return on investment, the amount of 
    surplus funds accruing after the date of the enactment of this 
    section [Oct. 27, 1997] that may be distributed from any multifamily 
    housing project assisted under a contract for rental assistance 
    renewed under any provision of this section (except subsection (b)) 
    to the owner of the project.
        ``(2) Exception and waiver.--Paragraph (1) shall not apply to 
    any law or regulation to the extent such law or regulation applies 
    to--
            ``(A) a State-financed multifamily housing project; or
            ``(B) a multifamily housing project for which the owner has 
        elected to waive the applicability of paragraph (1).
        ``(3) Treatment of low-income use restrictions.--This subsection 
    may not be construed to provide for, allow, or result in the release 
    or termination, for any project, of any low- or moderate-income use 
    restrictions that can not be eliminated by unilateral action of the 
    owner of the project.
    ``(g) Applicability.--Except to the extent otherwise specifically 
provided in this section, this section shall apply with respect to any 
multifamily housing project having a contract for project-based 
assistance under section 8 [42 U.S.C. 1437f] that terminates or expires 
during fiscal year 2000 or thereafter.


  ``subtitle d--office of multifamily housing assistance restructuring

``SEC. 571. ESTABLISHMENT OF OFFICE OF MULTIFAMILY HOUSING ASSISTANCE 
        RESTRUCTURING.
    ``There is hereby established an office within the Department of 
Housing and Urban Development, which shall be known as the Office of 
Multifamily Housing Assistance Restructuring.
``SEC. 572. DIRECTOR.
    ``(a) Appointment.--The Office shall be under the management of a 
Director, who shall be appointed by the President by and with the advice 
and consent of the Senate, from among individuals who are citizens of 
the United States and have a demonstrated understanding of financing and 
mortgage restructuring for affordable multifamily housing. Not later 
than 60 days after the date of the enactment of this Act [Oct. 27, 
1997], the President shall submit to the Senate a nomination for initial 
appointment to the position of Director.
    ``(b) Vacancy.--A vacancy in the position of Director shall be 
filled in the manner in which the original appointment was made under 
subsection (a).
    ``(c) Deputy Director.--
        ``(1) In general.--The Office shall have a Deputy Director who 
    shall be appointed by the Director from among individuals who are 
    citizens of the United States and have a demonstrated understanding 
    of financing and mortgage restructuring for affordable multifamily 
    housing.
        ``(2) Functions.--The Deputy Director shall have such functions, 
    powers, and duties as the Director shall prescribe. In the event of 
    the death, resignation, sickness, or absence of the Director, the 
    Deputy Director shall serve as acting Director until the return of 
    the Director or the appointment of a successor pursuant to 
    subsection (b).
``SEC. 573. DUTY AND AUTHORITY OF DIRECTOR.
    ``(a) Duty.--The Secretary shall, acting through the Director, 
administer the program of mortgage and rental assistance restructuring 
for eligible multifamily housing projects under subtitle A. During the 
period before the Director is appointed, the Secretary may carry out 
such program.
    ``(b) Authority.--The Director is authorized to make such 
determinations, take such actions, issue such regulations, and perform 
such functions assigned to the Director under law as the Director 
determines necessary to carry out such functions, subject to the review 
and approval of the Secretary. The Director shall semiannually submit a 
report to the Secretary regarding the activities, determinations, and 
actions of the Director.
    ``(c) Delegation of Authority.--The Director may delegate to 
officers and employees of the Office (but not to contractors, 
subcontractors, or consultants) any of the functions, powers, and duties 
of the Director, as the Director considers appropriate.
    ``(d) Independence in Providing Information to Congress.--
        ``(1) In general.--Notwithstanding subsection (a) or (b), the 
    Director shall not be required to obtain the prior approval, 
    comment, or review of any officer or agency of the United States 
    before submitting to the Congress, or any committee or subcommittee 
    thereof, any reports, recommendations, testimony, or comments if 
    such submissions include a statement indicating that the views 
    expressed therein are those of the Director and do not necessarily 
    represent the views of the Secretary or the President.
        ``(2) Requirement.--If the Director determines at any time that 
    the Secretary is taking or has taken any action that interferes with 
    the ability of the Director to carry out the duties of the Director 
    under this Act [probably means title V of Pub. L. 105-65, see Short 
    Title of 1997 Amendment note set out under section 1701 of Title 12, 
    Banks and Banking] or that affects the administration of the program 
    under subtitle A of this Act in a manner that is inconsistent with 
    the purposes of this Act, including any proposed action by the 
    Director, in the discretion of the Director, that is overruled by 
    the Secretary, the Director shall immediately report directly to the 
    Committee on Banking and Financial Services of the House of 
    Representatives and the Committee on Banking, Housing, and Urban 
    Affairs of the Senate regarding such action. Notwithstanding 
    subsection (a) or (b), any determination or report under this 
    paragraph by the Director shall not be subject to prior review or 
    approval of the Secretary.
``SEC. 574. PERSONNEL.
    ``(a) Office Personnel.--The Director may appoint and fix the 
compensation of such officers and employees of the Office as the 
Director considers necessary to carry out the functions of the Director 
and the Office. Officers and employees may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of title 5, 
United States Code, relating to classification and General Schedule pay 
rates.
    ``(b) Comparability of Compensation With Federal Banking Agencies.--
In fixing and directing compensation under subsection (a), the Director 
shall consult with, and maintain comparability with compensation of 
officers and employees of the Federal Deposit Insurance Corporation.
    ``(c) Personnel of Other Federal Agencies.--In carrying out the 
duties of the Office, the Director may use information, services, staff, 
and facilities of any executive agency, independent agency, or 
department on a reimbursable basis, with the consent of such agency or 
department.
    ``(d) Outside Experts and Consultants.--The Director may procure 
temporary and intermittent services under section 3109(b) of title 5, 
United States Code.
``SEC. 575. BUDGET AND FINANCIAL REPORTS.
    ``(a) Financial Operating Plans and Forecasts.--Before the beginning 
of each fiscal year, the Secretary shall submit a copy of the financial 
operating plans and forecasts for the Office to the Director of the 
Office of Management and Budget.
    ``(b) Reports of Operations.--As soon as practicable after the end 
of each fiscal year and each quarter thereof, the Secretary shall submit 
a copy of the report of the results of the operations of the Office 
during such period to the Director of the Office of Management and 
Budget.
    ``(c) Inclusion in President's Budget.--The annual plans, forecasts, 
and reports required under this section shall be included: (1) in the 
Budget of the United States in the appropriate form; and (2) in the 
congressional justifications of the Department of Housing and Urban 
Development for each fiscal year in a form determined by the Secretary.
``SEC. 576. LIMITATION ON SUBSEQUENT EMPLOYMENT.
    ``Neither the Director nor any former officer or employee of the 
Office who, while employed by the Office, was compensated at a rate in 
excess of the lowest rate for a position classified higher than GS-15 of 
the General Schedule under section 5107 of title 5, United States Code, 
may, during the 2-year period beginning on the date of separation from 
employment by the Office, accept compensation from any party (other than 
a Federal agency) having any financial interest in any mortgage 
restructuring and rental assistance sufficiency plan under subtitle A or 
comparable matter in which the Director or such officer or employee had 
direct participation or supervision.
``SEC. 577. AUDITS BY GAO.
    ``The Comptroller General shall audit the operations of the Office 
in accordance with generally accepted Government auditing standards. All 
books, records, accounts, reports, files, and property belonging to, or 
used by, the Office shall be made available to the Comptroller General. 
Audits under this section shall be conducted annually for the first 2 
fiscal years following the date of the enactment of this Act [Oct. 27, 
1997] and as appropriate thereafter.
``SEC. 578. SUSPENSION OF PROGRAM BECAUSE OF FAILURE TO APPOINT 
        DIRECTOR.
    ``(a) In General.--If, upon the expiration of the 12-month period 
beginning on the date of the enactment of this Act [Oct. 27, 1997], the 
initial appointment to the office of Director has not been made, the 
operation of the program under subtitle A shall immediately be suspended 
and such provisions shall not have any force or effect during the period 
that ends upon the making of such appointment.
    ``(b) Interim applicability of demonstration program.--
Notwithstanding any other provision of law, during the period referred 
to in subsection (a), the Secretary shall carry out sections 211 and 212 
of the Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 1997 [Pub. L. 
104-204, set out below]. For purposes of applying such sections pursuant 
to the authority under this section, the term `expiring contract' shall 
have the meaning given in such sections, except that such term shall 
also include any contract for project-based assistance under section 8 
of the United States Housing Act of 1937 [42 U.S.C. 1437f] that expires 
during the period that the program is suspended under subsection (a).
``SEC. 579. TERMINATION.
    ``(a) Repeal.--Subtitle A (except for section 524) and subtitle D 
(except for this section) are repealed effective October 1, 2001.
    ``(b) Exception.--Notwithstanding the repeal under subsection (a), 
the provisions of subtitle A (as in effect immediately before such 
repeal) shall apply with respect to projects and programs for which 
binding commitments have been entered into under this Act before October 
1, 2001.
    ``(c) Termination of Director and Office.--The Office of Multifamily 
Housing Assistance Restructuring and the position of Director of such 
Office shall terminate upon September 30, 2001.
    ``(d) Transfer of Authority.--Effective upon the termination under 
subsection (c), any authority and responsibilities assigned to the 
Director that remain applicable after such date pursuant to subsection 
(b) are transferred to the Secretary.''
    [Pub. L. 105-276, title V, Sec. 597(c), Oct. 21, 1998, 112 Stat. 
2659, provided that: ``This section [amending section 524(a)(2) of Pub. 
L. 105-65, set out above] shall take effect on, and the amendments made 
by this section are made on, and shall apply beginning upon, the date of 
the enactment of this Act [Oct. 21, 1998].'']


   GAO Report on Section 8 Rental Assistance for Multifamily Housing 
                                Projects

    Section 532 of Pub. L. 105-65 provided that: ``Not later than the 
expiration of the 18-month period beginning on the date of the enactment 
of this Act [Oct. 27, 1997], the Comptroller General of the United 
States shall submit a report to the Congress analyzing--
        ``(1) the housing projects for which project-based assistance is 
    provided under section 8 of the United States Housing Act of 1937 
    [42 U.S.C. 1437f], but which are not subject to a mortgage insured 
    or held by the Secretary under the National Housing Act [12 U.S.C. 
    1701 et seq.];
        ``(2) how State and local housing finance agencies have 
    benefited financially from the rental assistance program under 
    section 8 of the United States Housing Act of 1937, including any 
    benefits from fees, bond financings, and mortgage refinancings; and
        ``(3) the extent and effectiveness of State and local housing 
    finance agencies oversight of the physical and financial management 
    and condition of multifamily housing projects for which project-
    based assistance is provided under section 8 of the United States 
    Housing Act of 1937.''


    Administrative Fees for Certificate and Housing Voucher Programs

    Section 202 of Pub. L. 104-204 provided that: ``Notwithstanding 
section 8(q) of the United States Housing Act of 1937 [42 U.S.C. 
1437f(q)], as amended--
    ``(a) The Secretary shall establish fees for the cost of 
administering the certificate, voucher and moderate rehabilitation 
programs.
        ``(1)(A) For fiscal year 1997, the fee for each month for which 
    a dwelling unit is covered by an assistance contract shall be 7.5 
    percent of the base amount, adjusted as provided herein, in the case 
    of an agency that, on an annual basis, is administering a program of 
    no more than 600 units, and 7 percent of the base amount, adjusted 
    as provided herein, for each additional unit above 600.
        ``(B) The base amount shall be the higher of--
            ``(i) the fair market rental for fiscal year 1993 for a 2-
        bedroom existing rental dwelling unit in the market area of the 
        agency; and
            ``(ii) such fair market rental for fiscal year 1994, but not 
        more than 103.5 percent of the amount determined under clause 
        (i).
        ``(C) The base amount shall be adjusted to reflect changes in 
    the wage data or other objectively measurable data that reflect the 
    costs of administering the program during fiscal year 1996; except 
    that the Secretary may require that the base amount be not less than 
    a minimum amount and not more than a maximum amount.
        ``(2) For subsequent fiscal years, the Secretary shall publish a 
    notice in the Federal Register, for each geographic area, 
    establishing the amount of the fee that would apply for the agencies 
    administering the program, based on changes in wage data or other 
    objectively measurable data that reflect the cost of administering 
    the program, as determined by the Secretary.
        ``(3) The Secretary may increase the fee if necessary to reflect 
    higher costs of administering small programs and programs operating 
    over large geographic areas.
        ``(4) The Secretary may decrease the fee for PHA-owned units.
    ``(b) Beginning in fiscal year 1997 and thereafter, the Secretary 
shall also establish reasonable fees (as determined by the Secretary) 
for--
        ``(1) the costs of preliminary expenses, in the amount of $500, 
    for a public housing agency, but only in the first year it 
    administers a tenant-based assistance program under the United 
    States Housing Act of 1937 [42 U.S.C. 1437 et seq.] and only if, 
    immediately before the effective date of this Act [Sept. 26, 1996], 
    it was not administering a tenant-based assistance program under the 
    1937 Act (as in effect immediately before the effective date of this 
    Act), in connection with its initial increment of assistance 
    received;
        ``(2) the costs incurred in assisting families who experience 
    difficulty (as determined by the Secretary) in obtaining appropriate 
    housing under the program; and
        ``(3) extraordinary costs approved by the Secretary.''
    Similar provisions were contained in the following prior 
appropriations Acts:
    Pub. L. 104-99, title IV, Sec. 403(b), Jan. 26, 1996, 110 Stat. 43.
    Pub. L. 103-120, Sec. 11(a), Oct. 27, 1993, 107 Stat. 1151.


                            Contract Renewals

    Section 211 of Pub. L. 104-204, as amended by Pub. L. 105-18, title 
II, Sec. 10006, June 12, 1997, 111 Stat. 201; Pub. L. 105-65, title V, 
Sec. 523(e), Oct. 27, 1997, 111 Stat. 1407, provided that:
    ``(a) Definitions.--For purposes of this section--
        ``(1) the term `expiring contract' means a contract for project-
    based assistance under section 8 of the United States Housing Act of 
    1937 [42 U.S.C. 1437f] that expires during fiscal year 1997;
        ``(2) the term `family' has the same meaning as in section 3(b) 
    of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)];
        ``(3) the term `multifamily housing project' means a property 
    consisting of more than 4 dwelling units that is covered in whole or 
    in part by a contract for project-based assistance under section 8 
    of the United States Housing Act of 1937;
        ``(4) the term `owner' has the same meaning as in section 8(f) 
    of the United States Housing Act of 1937;
        ``(5) the term `project-based assistance' means rental 
    assistance under section 8 of the United States Housing Act of 1937 
    that is attached to a multifamily housing project;
        ``(6) the term `public agency' means a State housing finance 
    agency, a local housing agency, or other agency with a public 
    purpose and status;
        ``(7) the term `Secretary' means the Secretary of Housing and 
    Urban Development; and
        ``(8) the term `tenant-based assistance' has the same meaning as 
    in section 8(f) of the United States Housing Act of 1937.
    ``(b) Section 8 Contract Renewal Authority.--
        ``(1) In general.--Notwithstanding section 405(a) of the 
    Balanced Budget Downpayment Act, I [Pub. L. 104-99, set out below], 
    upon the request of the owner of a multifamily housing project that 
    is covered by an expiring contract, the Secretary shall use amounts 
    made available for the renewal of assistance under section 8 of the 
    United States Housing Act of 1937 [42 U.S.C. 1437f] to renew the 
    expiring contract as project-based assistance for a period of not 
    more than one year, at rent levels that are equal to those under the 
    expiring contract as of the date on which the contract expires: 
    Provided, That those rent levels do not exceed 120 percent of the 
    fair market rent for the market area in which the project is 
    located. For an FHA-insured multifamily housing project with an 
    expiring contract at rent levels that exceed 120 percent of the fair 
    market rent for the market area, the Secretary shall provide, at the 
    request of the owner, section 8 project-based assistance, for a 
    period of not more than one year, at rent levels that do not exceed 
    120 percent of the fair market rent.
        ``(2) Exemption for state and local housing agency projects.--
    Notwithstanding paragraph (1), upon the expiration of a contract 
    with rent levels that exceed the percentage described in that 
    paragraph, if the Secretary determines that the primary financing or 
    mortgage insurance for the multifamily housing project that is 
    covered by that expiring contract was provided by a public agency, 
    the Secretary shall, at the request of the owner and the public 
    agency, renew the expiring contract--
            ``(A) for a period of not more than one year; and
            ``(B) at rent levels that are equal to those under the 
        expiring contract as of the date on which the contract expires.
        ``(3) Exemption of certain other projects.--Notwithstanding 
    paragraph (1), for section 202 projects, section 515 projects, 
    projects with contracts entered into pursuant to section 441 of the 
    Stewart B. McKinney Homeless Assistance Act [42 U.S.C. 11401], and 
    projects with rents that exceed 100 percent of fair market rent for 
    the market area, but that are less than rents for comparable 
    projects, upon the expiration of a section 8 contract, the Secretary 
    shall, at the request of the owner, renew the expiring contract--
            ``(A) for a period of not more than one year; and
            ``(B) at rent levels that are equal to those under the 
        expiring contract as of the date on which the contract expires.
        ``(4) Other contracts.--
            ``(A) Participation in demonstration.--For a contract 
        covering an FHA-insured multifamily housing project that expires 
        during fiscal year 1997 with rent levels that exceed the 
        percentage described in paragraph (1) and after notice to the 
        tenants, the Secretary shall, at the request of the owner of the 
        project and after notice to the tenants, include that 
        multifamily housing project in the demonstration program under 
        section 212 of this Act [set out below]. The Secretary shall 
        ensure that a multifamily housing project with an expiring 
        contract in fiscal year 1997 shall be allowed to be included in 
        the demonstration.
            ``(B) Effect of material adverse actions and omissions.--
        Notwithstanding paragraph (1) or any other provision of law, the 
        Secretary shall not renew an expiring contract if the Secretary 
        determines that the owner of the multifamily housing project has 
        engaged in material adverse financial or managerial actions or 
        omissions with regard to the project (or with regard to other 
        similar projects if the Secretary determines that such actions 
        or omissions constitute a pattern of mismanagement that would 
        warrant suspension or debarment by the Secretary). The term 
        `owner', as used in this subparagraph, in addition to it having 
        the same meaning as in section 8(f) of the United States Housing 
        Act of 1937 [42 U.S.C. 1437f(f)], also means an affiliate of the 
        owner. The term `affiliate of the owner' means any person or 
        entity (including, but not limited to, a general partner or 
        managing member, or an officer of either) that controls an 
        owner, is controlled by an owner, or is under common control 
        with the owner. The term `control' means the direct or indirect 
        power (under contract, equity ownership, the right to vote or 
        determine a vote, or otherwise) to direct the financial, legal, 
        beneficial, or other interests of the owner.
            ``(C) Transfer of property.--For properties disqualified 
        from the demonstration program because of actions by an owner or 
        purchaser in accordance with subparagraph (B), the Secretary 
        shall establish procedures to facilitate the voluntary sale or 
        transfer of the property, with a preference for tenant 
        organizations and tenant-endorsed community-based nonprofit and 
        public agency purchasers meeting such reasonable qualifications 
        as may be established by the Secretary. The Secretary may 
        include the transfer of section 8 project-based assistance.
        ``(5) Tenant protections.--Any family residing in an assisted 
    unit in a multifamily housing project that is covered by an expiring 
    contract that is not renewed, shall be offered tenant-based 
    assistance before the date on which the contract expires or is not 
    renewed.''
    Pub. L. 104-120, Sec. 2(a), Mar. 28, 1996, 110 Stat. 834, provided 
that: ``Notwithstanding section 405(b) of the Balanced Budget 
Downpayment Act, I (Public Law 104-99; 110 Stat. 44) [set out below], at 
the request of the owner of any project assisted under section 8(e)(2) 
of the United States Housing Act of 1937 [42 U.S.C. 1437f(e)(2)] (as 
such section existed immediately before October 1, 1991), the Secretary 
of Housing and Urban Development may renew, for a period of 1 year, the 
contract for assistance under such section for such project that expires 
or terminates during fiscal year 1996 at current rent levels.''
    Section 405(a), (b) of Pub. L. 104-99, as amended by Pub. L. 105-65, 
title V, Sec. 523(d), Oct. 27, 1997, 111 Stat. 1407, provided that:
    ``(a) Notwithstanding part 24 of title 24 of the Code of Federal 
Regulations, for fiscal year 1996 and henceforth, the Secretary of 
Housing and Urban Development may use amounts available for the renewal 
of assistance under section 8 of the United States Housing Act of 1937 
[42 U.S.C. 1437f], upon termination or expiration of a contract for 
assistance under section 8 of such Act of 1937 (other than a contract 
for tenant-based assistance and notwithstanding section 8(v) of such Act 
for loan management assistance), to provide assistance under section 8 
of such Act, subject to the Section 8 Existing Fair Market Rents, for 
the eligible families assisted under the contracts at expiration or 
termination, which assistance shall be in accordance with terms and 
conditions prescribed by the Secretary.
    ``(b) Notwithstanding subsection (a) and except for projects 
assisted under section 8(e)(2) of the United States Housing Act of 1937 
(as it existed immediately prior to October 1, 1991), at the request of 
the owner, the Secretary shall renew for a period of one year contracts 
for assistance under section 8 that expire or terminate during fiscal 
year 1996 at the current rent levels.''


                 FHA Multifamily Demonstration Authority

    Section 212 of title II of Pub. L. 104-204, as amended by Pub. L. 
105-65, title V, Sec. 523(f), Oct. 27, 1997, 111 Stat. 1407, provided 
that:
    ``(a) In General.--
        ``(1) Repeal.--
            ``(A) In general.--Section 210 of the Departments of 
        Veterans Affairs and Housing and Urban Development and 
        Independent Agencies Appropriations Act, 1996 (110 Stat. 1321) 
        [section 101(e) [title II, Sec. 210] of Pub. L. 104-134, 
        formerly set out as a note below] is repealed.
            ``(B) Exception.--Notwithstanding the repeal under 
        subparagraph (A), amounts made available under section 210(f) 
        [of] the Departments of Veterans Affairs and Housing and Urban 
        Development and Independent Agencies Appropriations Act, 1996 
        shall remain available for the demonstration program under this 
        section through the end of fiscal year 1997.
        ``(2) Savings provisions.--Nothing in this section shall be 
    construed to affect any commitment entered into before the date of 
    enactment of this Act [Sept. 26, 1996] under the demonstration 
    program under section 210 of the Departments of Veterans Affairs and 
    Housing and Urban Development and Independent Agencies 
    Appropriations Act, 1996.
        ``(3) Definitions.--For purposes of this section--
            ``(A) the term `demonstration program' means the program 
        established under subsection (b);
            ``(B) the term `expiring contract' means a contract for 
        project-based assistance under section 8 of the United States 
        Housing Act of 1937 [42 U.S.C. 1437f] that expires during fiscal 
        year 1997;
            ``(C) the term `family' has the same meaning as in section 
        3(b) of the United States Housing Act of 1937 [42 U.S.C. 
        1437a(b)];
            ``(D) the term `multifamily housing project' means a 
        property consisting of more than 4 dwelling units that is 
        covered in whole or in part by a contract for project-based 
        assistance;
            ``(E) the term `owner' has the same meaning as in section 
        8(f) of the United States Housing Act of 1937;
            ``(F) the term `project-based assistance' means rental 
        assistance under section 8 of the United States Housing Act of 
        1937 that is attached to a multifamily housing project;
            ``(G) the term `Secretary' means the Secretary of Housing 
        and Urban Development; and
            ``(H) the term `tenant-based assistance' has the same 
        meaning as in section 8(f) of the United States Housing Act of 
        1937.
    ``(b) Demonstration Authority.--
        ``(1) In general.--Subject to the funding limitation in 
    subsection (l), the Secretary shall administer a demonstration 
    program with respect to multifamily projects--
            ``(A) whose owners agree to participate;
            ``(B) with rents on units assisted under section 8 of the 
        United States Housing Act of 1937 [42 U.S.C. 1437f] that are, in 
        the aggregate, in excess of 120 percent of the fair market rent 
        of the market area in which the project is located; and
            ``(C) the mortgages of which are insured under the National 
        Housing Act [12 U.S.C. 1701 et seq.].
        ``(2) Purpose.--The demonstration program shall be designed to 
    obtain as much information as is feasible on the economic viability 
    and rehabilitation needs of the multifamily housing projects in the 
    demonstration, to test various approaches for restructuring 
    mortgages to reduce the financial risk to the FHA Insurance Fund 
    while reducing the cost of section 8 subsidies, and to test the 
    feasibility and desirability of--
            ``(A) ensuring, to the maximum extent practicable, that the 
        debt service and operating expenses, including adequate 
        reserves, attributable to such multifamily projects can be 
        supported at the comparable market rent with or without mortgage 
        insurance under the National Housing Act and with or without 
        additional section 8 rental subsidies;
            ``(B) utilizing section 8 rental assistance, while taking 
        into account the capital needs of the projects and the need for 
        adequate rental assistance to support the low- and very low-
        income families residing in such projects; and
            ``(C) preserving low-income rental housing affordability and 
        availability while reducing the long-term cost of section 8 
        rental assistance.
    ``(c) Goals.--
        ``(1) In general.--The Secretary shall carry out the 
    demonstration program in a manner that will protect the financial 
    interests of the Federal Government through debt restructuring and 
    subsidy reduction and, in the least costly fashion, address the 
    goals of--
            ``(A) maintaining existing affordable housing stock in a 
        decent, safe, and sanitary condition;
            ``(B) minimizing the involuntary displacement of tenants;
            ``(C) taking into account housing market conditions;
            ``(D) encouraging responsible ownership and management of 
        property;
            ``(E) minimizing any adverse income tax impact on property 
        owners; and
            ``(F) minimizing any adverse impacts on residential 
        neighborhoods and local communities.
        ``(2) Balance of competing goals.--In determining the manner in 
    which a mortgage is to be restructured or a subsidy reduced under 
    this subsection, the Secretary may balance competing goals relating 
    to individual projects in a manner that will further the purposes of 
    this section.
    ``(d) Participation Arrangements.--
        ``(1) In general.--In carrying out the demonstration program, 
    the Secretary may enter into participation arrangements with 
    designees, under which the Secretary may provide for the assumption 
    by designees (by delegation, by contract, or otherwise) of some or 
    all of the functions, obligations, responsibilities and benefits of 
    the Secretary.
        ``(2) Designees.--In entering into any arrangement under this 
    subsection, the Secretary shall select state housing finance 
    agencies, housing agencies or nonprofits (separately or in 
    conjunction with each other) to act as designees to the extent such 
    agencies are determined to be qualified by the Secretary. In 
    locations where there is no qualified State housing finance agency, 
    housing agency or nonprofit to act as a designee, the Secretary may 
    act as a designee. Each participation arrangement entered into under 
    this subsection shall include a designee as the primary partner. Any 
    organization selected by the Secretary under this section shall have 
    a long-term record of service in providing low-income housing and 
    meet standards of fiscal responsibility, as determined by the 
    Secretary.
        ``(3) Designee partnerships.--For purposes of any participation 
    arrangement under this subsection, designees are encouraged to 
    develop partnerships with each other, and to contract or subcontract 
    with other entities, including--
            ``(A) public housing agencies;
            ``(B) financial institutions;
            ``(C) mortgage servicers;
            ``(D) nonprofit and for-profit housing organizations;
            ``(E) the Federal National Mortgage Association;
            ``(F) the Federal Home Loan Mortgage Corporation;
            ``(G) Federal Home Loan Banks; and
            ``(H) other State or local mortgage insurance companies or 
        bank lending consortia.
    ``(e) Long-Term Affordability.--
        ``(1) In general.--After the renewal of a section 8 contract 
    pursuant to a restructuring under this section, the owner shall 
    accept each offer to renew the section 8 contract, for a period of 
    20 years from the date of the renewal under the demonstration, if 
    the offer to renew is on terms and conditions, as agreed to by the 
    Secretary or designee and the owner under a restructuring.
        ``(2) Affordability requirements.--Except as otherwise provided 
    by the Secretary, in exchange for any mortgage restructuring under 
    this section, a project shall remain affordable for a period of not 
    less than 20 years. Affordability requirements shall be determined 
    in accordance with guidelines established by the Secretary or 
    designee. The Secretary or designee may waive these requirements for 
    good cause.
    ``(f) Procedures.--
        ``(1) Notice of participation in demonstration.--Not later than 
    45 days before the date of expiration of an expiring contract (or 
    such later date, as determined by the Secretary, for good cause), 
    the owner of the multifamily housing project covered by that 
    expiring contract shall notify the Secretary or designee and the 
    residents of the owner's intent to participate in the demonstration 
    program.
        ``(2) Demonstration contract.--Upon receipt of a notice under 
    paragraph (1), the owner and the Secretary or designee shall enter 
    into a demonstration contract, which shall provide for initial 
    section 8 project-based rents at the same rent levels as those under 
    the expiring contract or, if practical, the budget-based rent to 
    cover debt service, reasonable operating expenses (including 
    reasonable and appropriate services), and a reasonable return to the 
    owner, as determined solely by the Secretary. The demonstration 
    contract shall be for the minimum term necessary for the rents and 
    mortgages of the multifamily housing project to be restructured 
    under the demonstration program, but shall not be for a period of 
    time to exceed 180 days, unless extended for good cause by the 
    Secretary.
    ``(g)(1) Project-Based Section 8.--The Secretary shall renew all 
expiring contracts under the demonstration as section 8 project-based 
contracts, for a period of time not to exceed one year, unless otherwise 
provided under subsection (h) or in paragraph (2).
    ``(2) The Secretary may renew a demonstration contract for an 
additional period of not to exceed 120 days, if--
        ``(A) the contract was originally executed before February 1, 
    1997, and the Secretary determines, in the sole discretion of the 
    Secretary, that the renewal period for the contract needs to exceed 
    1 year, due to delay of publication of the Secretary's demonstration 
    program guidelines until January 23, 1997 (not to exceed 21 
    projects); or
        ``(B) the contract was originally executed before October 1, 
    1997, in connection with a project that has been identified for 
    restructuring under the joint venture approach described in section 
    VII.B.2. of the Secretary's demonstration program guidelines, and 
    the Secretary determines, in the sole discretion of the Secretary, 
    that the renewal period for the contract needs to exceed 1 year, due 
    to delay in implementation of the joint venture agreement required 
    by the guidelines (not to exceed 25 projects).
    ``(h) Demonstration Actions.--
        ``(1) Demonstration actions.--For purposes of carrying out the 
    demonstration program, and in order to ensure that contract rights 
    are not abrogated, subject to such third party consents as are 
    necessary (if any), including consent by the Government National 
    Mortgage Association if it owns a mortgage insured by the Secretary, 
    consent by an issuer under the mortgage-backed securities program of 
    the Association, subject to the responsibilities of the issuer to 
    its security holders and the Association under such program, and 
    consent by parties to any contractual agreement which the Secretary 
    proposes to modify or discontinue, the Secretary or, except with 
    respect to subparagraph (B), designee, subject to the funding 
    limitation in subsection (l), shall take not less than one of the 
    actions specified in subparagraphs (G), (H), and (I) and may take 
    any of the following actions:
            ``(A) Removal of restrictions.--
                ``(i) In general.--Consistent with the purposes of this 
            section, subject to the agreement of the owner of the 
            project and after consultation with the tenants of the 
            project, the Secretary or designee may remove, relinquish, 
            extinguish, modify, or agree to the removal of any mortgage, 
            regulatory agreement, project-based assistance contract, use 
            agreement, or restriction that had been imposed or required 
            by the Secretary, including restrictions on distributions of 
            income which the Secretary or designee determines would 
            interfere with the ability of the project to operate without 
            above-market rents.
                ``(ii) Accumulated residual receipts.--The Secretary or 
            designee may require an owner of a property assisted under 
            the section 8 new construction/substantial rehabilitation 
            program under the United States Housing Act of 1937 [42 
            U.S.C. 1437 et seq.] to apply any accumulated residual 
            receipts toward effecting the purposes of this section.
            ``(B) Reinsurance.--With respect to not more than 5,000 
        units within the demonstration during fiscal year 1997, the 
        Secretary may enter into contracts to purchase reinsurance, or 
        enter into participations or otherwise transfer economic 
        interest in contracts of insurance or in the premiums paid, or 
        due to be paid, on such insurance, on such terms and conditions 
        as the Secretary may determine. Any contract entered into under 
        this paragraph shall require that any associated units be 
        maintained as low-income units for the life of the mortgage, 
        unless waived by the Secretary for good cause.
            ``(C) Participation by third parties.--The Secretary or 
        designee may enter into such agreements, provide such 
        concessions, incur such costs, make such grants (including 
        grants to cover all or a portion of the rehabilitation costs for 
        a project) and other payments, and provide other valuable 
        consideration as may reasonably be necessary for owners, 
        lenders, servicers, third parties, and other entities to 
        participate in the demonstration program. The Secretary may 
        establish performance incentives for designees.
            ``(D) Section 8 administrative fees.--Notwithstanding any 
        other provision of law, the Secretary may make fees available 
        from the section 8 contract renewal appropriation to a designee 
        for contract administration under section 8 of the United States 
        Housing Act of 1937 [42 U.S.C. 1437f] for purposes of any 
        contract restructured or renewed under the demonstration 
        program.
            ``(E) Full or partial payment of claim.--Notwithstanding any 
        other provision of law, the Secretary may make a full payment of 
        claim or partial payment of claim prior to default.
            ``(F) Credit enhancement.--
                ``(i) In general.--The Secretary or designee may provide 
            FHA multifamily mortgage insurance, reinsurance, or other 
            credit enhancement alternatives, including retaining the 
            existing FHA mortgage insurance on a restructured first 
            mortgage at market value or using the multifamily risk-
            sharing mortgage programs, as provided under section 542 of 
            the Housing and Community Development Act of 1992 [12 U.S.C. 
            1707 note]. Any limitations on the number of units available 
            for mortgage insurance under section 542 shall not apply to 
            insurance issued for purposes of the demonstration program.
                ``(ii) Maximum percentage.--During fiscal year 1997, not 
            more than 25 percent of the units in multifamily housing 
            projects with expiring contracts in the demonstration, in 
            the aggregate, may be restructured without FHA insurance, 
            unless otherwise agreed to by the owner of a project.
                ``(iii) Credit subsidy.--Any credit subsidy costs of 
            providing mortgage insurance shall be paid from amounts made 
            available under subsection (l).
            ``(G) Mortgage restructuring.--
                ``(i) In general.--The Secretary or designee may 
            restructure mortgages to provide a restructured first 
            mortgage to cover debt service and operating expenses 
            (including a reasonable rate of return to the owner) at the 
            market rent, and a second mortgage equal to the difference 
            between the restructured first mortgage and the mortgage 
            balance of the eligible multifamily housing project at the 
            time of restructuring.
                ``(ii) Credit subsidy.--Any credit subsidy costs of 
            providing a second mortgage shall be paid from amounts made 
            available under subsection (l).
            ``(H) Debt forgiveness.--The Secretary or designee, for good 
        cause and at the request of the owner of a multifamily housing 
        project, may forgive at the time of the restructuring of a 
        mortgage any portion of a debt on the project that exceeds the 
        market value of the project.
            ``(I) Budget-based rents.--The Secretary or designee may 
        renew an expiring contract, including a contract for a project 
        in which operating costs exceed comparable market rents, for a 
        period of not more than one year, at a budget-based rent that 
        covers debt service, reasonable operating expenses (including 
        all reasonable and appropriate services), and a reasonable rate 
        of return to the owner, as determined solely by the Secretary, 
        provided that the contract does not exceed the rent levels under 
        the expiring contract. The Secretary may establish a preference 
        under the demonstration program for budget-based rents for 
        unique housing projects, such as projects designated for 
        occupancy by elderly families and projects in rural areas.
            ``(J) Section 8 tenant-based assistance.--For not more than 
        10 percent of units in multifamily housing projects that have 
        had their mortgages restructured in any fiscal year under the 
        demonstration, the Secretary or designee may provide, with the 
        agreement of an owner and in consultation with the tenants of 
        the housing, section 8 tenant-based assistance for some or all 
        of the assisted units in a multifamily housing project in lieu 
        of section 8 project-based assistance. Section 8 tenant-based 
        assistance may only be provided where the Secretary determines 
        and certifies that there is adequate available and affordable 
        housing within the local area and that tenants will be able to 
        use the section 8 tenant-based assistance successfully.
        ``(2) Offer and acceptance.--Notwithstanding any other provision 
    of law, an owner of a project in the demonstration must accept any 
    reasonable offer made by the Secretary or a designee under this 
    subsection. An owner may appeal the reasonableness of any offer to 
    the Secretary and the Secretary shall respond within 30 days of the 
    date of appeal with a final offer. If the final offer is not 
    acceptable, the owner may opt out of the program.
    ``(i) Community and Tenant Input.--In carrying out this section, the 
Secretary shall develop procedures to provide appropriate and timely 
notice, including an opportunity for comment and timely access to all 
relevant information, to officials of the unit of general local 
government affected, the community in which the project is situated, and 
the tenants of the project.
    ``(j) Transfer of Property.--The Secretary shall establish 
procedures to facilitate the voluntary sale or transfer of multifamily 
housing projects under the demonstration to tenant organizations and 
tenant-endorsed community-based nonprofit and public agency purchasers 
meeting such reasonable qualifications as may be established by the 
Secretary.
    ``(k) Limitation on Demonstration Authority.--The Secretary shall 
carry out the demonstration program with respect to mortgages not to 
exceed 50,000 units.
    ``(l) Funding.--In addition to the $30,000,000 made available under 
section 210 of the Departments of Veterans Affairs and Housing and Urban 
Development and Independent Agencies Appropriations Act, 1996 (110 Stat. 
1321) [section 101(e) [title II, Sec. 210] of Pub. L. 104-134, formerly 
set out as a note below], for the costs (including any credit subsidy 
costs associated with providing direct loans or mortgage insurance) of 
modifying and restructuring loans held or guaranteed by the Federal 
Housing Administration, as authorized under this section, $10,000,000 is 
hereby appropriated, to remain available until September 30, 1998.
    ``(m) Report to Congress.--
        ``(1) In general.--
            ``(A) Quarterly reports.--Not less than every 3 months, the 
        Secretary shall submit to the Congress a report describing and 
        assessing the status of the projects in the demonstration 
        program.
            ``(B) Final report.--Not later than 6 months after the end 
        of the demonstration program, the Secretary shall submit to the 
        Congress a final report on the demonstration program.
        ``(2) Contents.--Each report submitted under paragraph (1)(A) 
    shall include a description of--
            ``(A) each restructuring proposal submitted by an owner of a 
        multifamily housing project, including a description of the 
        physical, financial, tenancy, and market characteristics of the 
        project;
            ``(B) the Secretary's evaluation and reasons for each 
        multifamily housing project selected or rejected for 
        participation in the demonstration program;
            ``(C) the costs to the FHA General Insurance and Special 
        Risk Insurance funds;
            ``(D) the subsidy costs provided before and after 
        restructuring;
            ``(E) the actions undertaken in the demonstration program, 
        including the third-party arrangements made; and
            ``(F) the demonstration program's impact on the owners of 
        the projects, including any tax consequences.
        ``(3) Contents of final report.--The report submitted under 
    paragraph (1)(B) shall include--
            ``(A) the required contents under paragraph (2); and
            ``(B) any findings and recommendations for legislative 
        action.''
    Section 101(e) [title II, Sec. 210] of title I of Pub. L. 104-134, 
Apr. 26, 1996, 110 Stat. 1321-257, 1321-285; renumbered title I, Pub. L. 
104-140, Sec. 1(a), May 2, 1996, 110 Stat. 1327, which authorized the 
Secretary of Housing and Urban Development on and after Oct. 1, 1995, 
and before Oct. 1, 1997, to initiate a FHA multifamily demonstration 
program, was repealed by Pub. L. 104-204, title II, Sec. 212(a)(1)(A), 
Sept. 26, 1996, 110 Stat. 2897.


               Public Housing Moving to Work Demonstration

    Section 101(e) [title II, Sec. 204] of Pub. L. 104-134, as amended 
by Pub. L. 105-276, title V, Sec. 522(b)(3), Oct. 21, 1998, 112 Stat. 
2564, provided that:
    ``(a) Purpose.--The purpose of this demonstration is to give public 
housing agencies and the Secretary of Housing and Urban Development the 
flexibility to design and test various approaches for providing and 
administering housing assistance that: reduce cost and achieve greater 
cost effectiveness in Federal expenditures; give incentives to families 
with children where the head of household is working, seeking work, or 
is preparing for work by participating in job training, educational 
programs, or programs that assist people to obtain employment and become 
economically self-sufficient; and increase housing choices for low-
income families.
    ``(b) Program Authority.--The Secretary of Housing and Urban 
Development shall conduct a demonstration program under this section 
beginning in fiscal year 1996 under which up to 30 public housing 
agencies (including Indian housing authorities) administering the public 
or Indian housing program and the section 8 [42 U.S.C. 1437f] housing 
assistance payments program may be selected by the Secretary to 
participate. The Secretary shall provide training and technical 
assistance during the demonstration and conduct detailed evaluations of 
up to 15 such agencies in an effort to identify replicable program 
models promoting the purpose of the demonstration. Under the 
demonstration, notwithstanding any provision of the United States 
Housing Act of 1937 [42 U.S.C. 1437 et seq.] except as provided in 
subsection (e), an agency may combine operating assistance provided 
under section 9 of the United States Housing Act of 1937 [42 U.S.C. 
1437g], modernization assistance provided under section 14 of such Act 
[42 U.S.C. 1437l], and assistance provided under section 8 of such Act 
for the certificate and voucher programs, to provide housing assistance 
for low-income families, as defined in section 3(b)(2) of the United 
States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)], and services to 
facilitate the transition to work on such terms and conditions as the 
agency may propose and the Secretary may approve.
    ``(c) Application.--An application to participate in the 
demonstration--
        ``(1) shall request authority to combine assistance under 
    sections 8, 9, and 14 of the United States Housing Act of 1937 [42 
    U.S.C. 1437f, 1437g, 1437l];
        ``(2) shall be submitted only after the public housing agency 
    provides for citizen participation through a public hearing and, if 
    appropriate, other means;
        ``(3) shall include a plan developed by the agency that takes 
    into account comments from the public hearing and any other public 
    comments on the proposed program, and comments from current and 
    prospective residents who would be affected, and that includes 
    criteria for--
            ``(A) families to be assisted, which shall require that at 
        least 75 percent of the families assisted by participating 
        demonstration public housing authorities shall be very low-
        income families, as defined in section 3(b)(2) of the United 
        States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)];
            ``(B) establishing a reasonable rent policy, which shall be 
        designed to encourage employment and self-sufficiency by 
        participating families, consistent with the purpose of this 
        demonstration, such as by excluding some or all of a family's 
        earned income for purposes of determining rent;
            ``(C) continuing to assist substantially the same total 
        number of eligible low-income families as would have been served 
        had the amounts not been combined;
            ``(D) maintaining a comparable mix of families (by family 
        size) as would have been provided had the amounts not been used 
        under the demonstration; and
            ``(E) assuring that housing assisted under the demonstration 
        program meets housing quality standards established or approved 
        by the Secretary; and
        ``(4) may request assistance for training and technical 
    assistance to assist with design of the demonstration and to 
    participate in a detailed evaluation.
    ``(d) Selection.--In selecting among applications, the Secretary 
shall take into account the potential of each agency to plan and carry 
out a program under the demonstration, the relative performance by an 
agency under the public housing management assessment program under 
section 6(j) of the United States Housing Act of 1937 [42 U.S.C. 
1437d(j)], and other appropriate factors as determined by the Secretary.
    ``(e) Applicability of 1937 Act Provisions.--
        ``(1) Section 18 of the United States Housing Act of 1937 [42 
    U.S.C. 1437p] shall continue to apply to public housing 
    notwithstanding any use of the housing under this demonstration.
        ``(2) Section 12 of such Act [42 U.S.C. 1437j] shall apply to 
    housing assisted under the demonstration, other than housing 
    assisted solely due to occupancy by families receiving tenant-based 
    assistance.
    ``(f) Effect on Section 8, Operating Subsidies, and Comprehensive 
Grant Program Allocations.--The amount of assistance received under 
section 8, section 9, or pursuant to section 14 [42 U.S.C. 1437f, 1437g, 
1437l] by a public housing agency participating in the demonstration 
under this part [section] shall not be diminished by its participation.
    ``(g) Records, Reports, and Audits.--
        ``(1) Keeping of records.--Each agency shall keep such records 
    as the Secretary may prescribe as reasonably necessary to disclose 
    the amounts and the disposition of amounts under this demonstration, 
    to ensure compliance with the requirements of this section, and to 
    measure performance.
        ``(2) Reports.--Each agency shall submit to the Secretary a 
    report, or series of reports, in a form and at a time specified by 
    the Secretary. Each report shall--
            ``(A) document the use of funds made available under this 
        section;
            ``(B) provide such data as the Secretary may request to 
        assist the Secretary in assessing the demonstration; and
            ``(C) describe and analyze the effect of assisted activities 
        in addressing the objectives of this part [section].
        ``(3) Access to documents by the secretary.--The Secretary shall 
    have access for the purpose of audit and examination to any books, 
    documents, papers, and records that are pertinent to assistance in 
    connection with, and the requirements of, this section.
        ``(4) Access to documents by the comptroller general.--The 
    Comptroller General of the United States, or any of the duly 
    authorized representatives of the Comptroller General, shall have 
    access for the purpose of audit and examination to any books, 
    documents, papers, and records that are pertinent to assistance in 
    connection with, and the requirements of, this section.
    ``(h) Evaluation and Report.--
        ``(1) Consultation with pha and family representatives.--In 
    making assessments throughout the demonstration, the Secretary shall 
    consult with representatives of public housing agencies and 
    residents.
        ``(2) Report to congress.--Not later than 180 days after the end 
    of the third year of the demonstration, the Secretary shall submit 
    to the Congress a report evaluating the programs carried out under 
    the demonstration. The report shall also include findings and 
    recommendations for any appropriate legislative action.
    ``(i) Funding for Technical Assistance and Evaluation.--From amounts 
appropriated for assistance under section 14 of the United States 
Housing Act of 1937 [42 U.S.C. 1437l] for fiscal years 1996, 1997, and 
1998, the Secretary may use up to a total of $5,000,000--
        ``(1) to provide, directly or by contract, training and 
    technical assistance--
            ``(A) to public housing agencies that express an interest to 
        apply for training and technical assistance pursuant to 
        subsection (c)(4), to assist them in designing programs to be 
        proposed for the demonstration; and
            ``(B) to up to 10 agencies selected to receive training and 
        technical assistance pursuant to subsection (c)(4), to assist 
        them in implementing the approved program; and
        ``(2) to conduct detailed evaluations of the activities of the 
    public housing agencies under paragraph (1)(B), directly or by 
    contract.
    ``(j) Capital and Operating Fund Assistance.--With respect to any 
public housing agency participating in the demonstration under this 
section that receives assistance from the Capital or Operating Fund 
under section 9 of the United States Housing Act of 1937 [42 U.S.C. 
1437g] (as amended by the Quality Housing and Work Responsibility Act of 
1998), for purposes of this section--
        ``(1) any reference to assistance under section 9 of the United 
    States Housing Act of 1937 shall be considered to refer also to 
    assistance provided from the Operating Fund under section 9(e) of 
    such Act (as so amended); and
        ``(2) any reference to assistance under section 14 of the United 
    States Housing Act of 1937 [former 42 U.S.C. 1437l] shall be 
    considered to refer also to assistance provided from the Capital 
    Fund under section 9(d) of such Act (as so amended).''


    Prohibition Against Preferences With Respect to Certain Projects

    Pub. L. 104-99, title IV, Sec. 402(d)(4)(B), Jan. 26, 1996, 110 
Stat. 42, provided that: ``Notwithstanding any other provision of law, 
no Federal tenant selection preferences under the United States Housing 
Act of 1937 [42 U.S.C. 1437 et seq.] shall apply with respect to--
        ``(i) housing constructed or substantially rehabilitated 
    pursuant to assistance provided under section 8(b)(2) of the United 
    States Housing Act of 1937 [42 U.S.C. 1437f(b)(2)] (as such section 
    existed on the day before October 1, 1983); or
        ``(ii) projects financed under section 202 of the Housing Act of 
    1959 [12 U.S.C. 1701q] (as such section existed on the day before 
    the date of enactment of the Cranston-Gonzalez National Affordable 
    Housing Act [Nov. 28, 1990]).''
    [Pub. L. 105-276, title V, Sec. 514(c)(2), Oct. 21, 1998, 112 Stat. 
2548, provided that: ``Notwithstanding any other provision of law 
(including subsection (f) of this section [set out as an Effective and 
Termination Dates of 1996 Amendments note under section 1437a of this 
title]), section 402(d)(4)(B) of The Balanced Budget Downpayment Act, I 
[Pub. L. 104-99, set out above] (42 U.S.C. 1437a note) shall apply to 
fiscal year 1999 and thereafter.'']
    [Section 402(d)(4)(B) of Pub. L. 104-99, set out above, effective 
Jan. 26, 1996, only for fiscal years 1996, 1997, and 1998, and to cease 
to be effective Oct. 21, 1998, see section 402(f) of Pub. L. 104-99, as 
amended, and section 514(f) of Pub. L. 105-276, set out as Effective and 
Termination Dates of 1996 Amendments notes under section 1437a of this 
title.]


               Community Investment Demonstration Program

    Pub. L. 103-120, Sec. 6, Oct. 27, 1993, 107 Stat. 1148, as amended 
by Pub. L. 104-316, title I, Sec. 122(j), Oct. 19, 1996, 110 Stat. 3837, 
provided that:
    ``(a) Demonstration Program.--The Secretary shall carry out a 
demonstration program to attract pension fund investment in affordable 
housing through the use of project-based rental assistance under section 
8 of the United States Housing Act of 1937 [42 U.S.C. 1437f].
    ``(b) Funding Requirements.--In carrying out this section, the 
Secretary shall ensure that not less than 50 percent of the funds 
appropriated for the demonstration program each year are used in 
conjunction with the disposition of either--
        ``(1) multifamily properties owned by the Department; or
        ``(2) multifamily properties securing mortgages held by the 
    Department.
    ``(c) Contract Terms.--
        ``(1) In general.--Project-based assistance under this section 
    shall be provided pursuant to a contract entered into by the 
    Secretary and the owner of the eligible housing that--
            ``(A) provides assistance for a term of not less than 60 
        months and not greater than 180 months; and
            ``(B) provides for contract rents, to be determined by the 
        Secretary, which shall not exceed contract rents permitted under 
        section 8 of the United States Housing Act of 1937 [42 U.S.C. 
        1437f], taking into consideration any costs for the 
        construction, rehabilitation, or acquisition of the housing.
        ``(2) Amendment to section 203.--[Amended section 1701z-11 of 
    Title 12, Banks and Banking.]
    ``(d) Limitation.--(1) The Secretary may not provide (or make a 
commitment to provide) more than 50 percent of the funding for housing 
financed by any single pension fund, except that this limitation shall 
not apply if the Secretary, after the end of the 6-month period 
beginning on the date notice is issued under subsection (e)--
        ``(A) determines that--
            ``(i) there are no expressions of interest that are likely 
        to result in approvable applications in the reasonably 
        foreseeable future; or
            ``(ii) any such expressions of interest are not likely to 
        use all funding under this section; and
        ``(B) so informs the Committee on Banking, Finance and Urban 
    Affairs [now Committee on Banking and Financial Services] of the 
    House of Representatives and the Committee on Banking, Housing, and 
    Urban Affairs of the Senate.
    ``(2) If the Secretary determines that there are expressions of 
interest referred to in paragraph (1)(A)(ii), the Secretary may reserve 
funding sufficient in the Secretary's determination to fund such 
applications and may use any remaining funding for other pension funds 
in accordance with this section.
    ``(e) Implementation.--The Secretary shall by notice establish such 
requirements as may be necessary to carry out the provisions of this 
section. The notice shall take effect upon issuance.
    ``(f) Applicability of ERISA.--Notwithstanding section 514(d) of the 
Employee Retirement Income Security Act of 1974 [29 U.S.C. 1144(d)], 
nothing in this section shall be construed to authorize any action or 
failure to act that would constitute a violation of such Act [29 U.S.C. 
1001 et seq.].
    ``(g) Report.--Not later than 3 months after the last day of each 
fiscal year, the Secretary shall submit to the Committee on Banking, 
Finance and Urban Affairs [now Committee on Banking and Financial 
Services] of the House of Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate a report summarizing the 
activities carried out under this section during that fiscal year.
    ``(h) Establishment of Standards.--Mortgages secured by housing 
assisted under this demonstration shall meet such standards regarding 
financing and securitization as the Secretary may establish.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated $100,000,000 for fiscal year 1994 to carry out this 
section.
    ``[(j) Redesignated (i).]
    ``(k) Termination Date.--The Secretary shall not enter into any new 
commitment to provide assistance under this section after September 30, 
1998.''


Administrative Fees for Certificate and Housing Voucher Programs During 
                            Fiscal Year 1994

    Pub. L. 103-120, Sec. 11(a), Oct. 27, 1993, 107 Stat. 1151, provided 
that: ``Notwithstanding the second sentence of section 8(q)(1) of the 
United States Housing Act of 1937 [42 U.S.C. 1437f(q)(1)], other 
applicable law, or any implementing regulations and related 
requirements, the fee for the ongoing costs of administering the 
certificate and housing voucher programs under subsections (b) and (o) 
of section 8 of such Act during fiscal year 1994 shall be--
        ``(1) not less than a fee calculated in accordance with the fair 
    market rents for Federal fiscal year 1993; or
        ``(2) not more than--
            ``(A) a fee calculated in accordance with section 8(q) of 
        such Act, except that such fee shall not be in excess of 3.5 
        percent above the fee calculated in accordance with paragraph 
        (1); or
            ``(B) to the extent approved in an appropriation Act, a fee 
        calculated in accordance with such section 8(q).''


             Effectiveness of Assistance for PHA-Owned Units

    Section 150 of Pub. L. 102-550 provided that: ``The amendments made 
by section 548 of the Cranston-Gonzalez National Affordable Housing Act 
[Pub. L. 101-625, amending this section] shall be effective 
notwithstanding the absence of any regulations issued by the Secretary 
of Housing and Urban Development.''


                 Moving to Opportunity for Fair Housing

    Section 152 of Pub. L. 102-550, as amended by Pub. L. 103-120, 
Sec. 3, Oct. 27, 1993, 107 Stat. 1148, which directed Secretary of 
Housing and Urban Development to carry out demonstration program in 
eligible cities to provide tenant-based assistance to very low-income 
families with children to move out of areas of high concentrations of 
persons living in poverty to areas with low concentrations of such 
persons, required biennial report to Congress evaluating effectiveness 
and final report not later than Sept. 30, 2004, provided for increased 
funding under section 1437c(c) of this title to carry out demonstration, 
and authorized implementation by notice of requirements necessary to 
carry out program, was repealed by Pub. L. 105-276, title V, 
Sec. 550(f), Oct. 21, 1998, 112 Stat. 2610.


   Directive to Further Fair Housing Objectives Under Certificate and 
                            Voucher Programs

    Section 153 of Pub. L. 102-550, which directed Secretary of Housing 
and Urban Development, not later than 2 years after Oct. 28, 1992, to 
review and comment upon study prepared pursuant to section 558(3) of 
Pub. L. 101-625, formerly set out as a note below, to evaluate 
implementation and effects of existing demonstration and judicially 
mandated programs, to assess factors that might impede geographic 
dispersion of families receiving section 8 certificates and vouchers, to 
identify and implement administrative revisions that would enhance 
dispersion and tenant choice, and to submit report to Congress 
describing findings, actions taken, and recommendations, was repealed by 
Pub. L. 105-276, title V, Sec. 582(a)(3), Oct. 21, 1998, 112 Stat. 2643.


   Inapplicability of Certain 1992 Amendments to Indian Public Housing

    Amendment by section 623(b) of Pub. L. 102-550 not applicable with 
respect to lower income housing developed or operated pursuant to 
contract between Secretary of Housing and Urban Development and Indian 
housing authority, see section 626 of Pub. L. 102-550, set out as a note 
under section 1437a of this title.


                Termination of Existing Housing Programs

    Except with respect to projects and programs for which binding 
commitments have been entered into prior to Oct. 1, 1991, no new grants 
or loans to be made after Oct. 1, 1991, under subsec. (e)(2) of this 
section except for funds allocated under such section for single room 
occupancy dwellings as authorized by subchapter IV (Sec. 11361 et seq.) 
of chapter 119 of this title, see section 12839(a)(4) of this title.


   Public Housing Mixed Income New Communities Strategy Demonstration

    Section 522 of Pub. L. 101-625, as amended by Pub. L. 104-66, title 
I, Sec. 1071(b), Dec. 21, 1995, 109 Stat. 720; Pub. L. 104-99, title IV, 
Sec. 402(d)(6)(B), Jan. 26, 1996, 110 Stat. 43, which directed Secretary 
of Housing and Urban Development to carry out program to demonstrate 
effectiveness of promoting revitalization of troubled urban communities 
through provision of public housing in socioeconomically mixed settings, 
directed appointment of coordinating committees to develop 
implementation plans, set forth scope of program including provision of 
supportive services, required report to Congress evaluating program's 
effectiveness and including findings and recommendations, and provided 
for termination of the program 10 years after Nov. 28, 1990, was 
repealed by Pub. L. 105-276, title V, Sec. 582(a)(10), Oct. 21, 1998, 
112 Stat. 2644.


                 Study of Public Housing Funding System

    Section 524 of Pub. L. 101-625 directed Secretary of Housing and 
Urban Development to conduct a study assessing one or more revised 
methods of providing sufficient Federal funds to public housing agencies 
for operation, maintenance and modernization of public housing, which 
study was to include a comparison of existing methods of funding in 
public housing with those used by Department of Housing and Urban 
Development in housing assisted under this section and a review of 
results of study entitled ``Alternative Operating Subsidies Systems for 
the Public Housing Program'', with an update of such study as necessary, 
and to submit a report to Congress not later than 12 months after Nov. 
28, 1990, detailing the findings of this study.


         Study of Prospective Payment System for Public Housing

    Section 525 of Pub. L. 101-625 directed Secretary of Housing and 
Urban Development to conduct a study assessing one or more revised 
methods of providing Federal housing assistance through local public 
housing agencies, examining methods of prospective payment, including 
the conversion of PHA operating assistance, modernization, and other 
Federal housing assistance to a schedule of steady and predictable 
capitated Federal payments on behalf of low income public housing 
tenants, and making specific assessments and to submit a report to 
Congress not later than 12 months after Nov. 28, 1990.


         GAO Study of Alternatives in Public Housing Development

    Section 526 of Pub. L. 101-625 directed Comptroller General to 
conduct a study assessing alternative methods of developing public 
housing dwelling units, other than under the existing public housing 
development program under this chapter, and submit a report to Congress 
regarding the findings and conclusions of the study not later than 12 
months after Nov. 28, 1990.


           Preference for New Construction Under This Section

    Section 545(c) of Pub. L. 101-625, as amended by Pub. L. 104-99, 
title IV, Sec. 402(d)(4)(A), Jan. 26, 1996, 110 Stat. 42, which provided 
that, with respect to housing constructed or substantially rehabilitated 
pursuant to assistance provided under subsec. (b)(2) of this section, as 
such provisions existed before Oct. 1, 1983, and projects financed under 
section 1701q of Title 12, Banks and Banking, notwithstanding tenant 
selection criteria under contract between Secretary and owner pursuant 
to first sentence of such section, for at least 70 percent of units 
becoming available, tenant selection criteria for such housing was to 
give preference to families occupying substandard housing (including 
homeless families and those living in shelters), paying more than 50 
percent of family income for rent, or involuntarily displaced, and 
system of local preferences established under subsec. (d)(1)(A)(ii) of 
this section by public housing agency was to apply to remaining units 
that became available, to extent that such preferences were applicable 
with respect to tenant eligibility limitations, was repealed by Pub. L. 
105-276, title V, Sec. 514(c)(1), Oct. 21, 1998, 112 Stat. 2548.


                 Documentation of Excessive Rent Burdens

    Section 550(b) of Pub. L. 101-625 provided that:
    ``(1) Data.--The Secretary of Housing and Urban Development shall 
collect and maintain, in an automated system, data describing the 
characteristics of families assisted under the certificate and voucher 
programs established under section 8 of the United States Housing Act of 
1937 [42 U.S.C. 1437f], which data shall include the share of family 
income paid toward rent.
    ``(2) Report.--Not less than annually, the Secretary shall submit a 
report to the Congress setting forth, for each of the certificate 
program and the voucher program, the percentage of families 
participating in the program who are paying for rent more than the 
amount determined under section 3(a)(1) of such Act [42 U.S.C. 
1437a(a)(1)]. The report shall set forth data in appropriate categories, 
such as various areas of the country, types and sizes of public housing 
agencies, types of families, and types or markets. The data shall 
identify the jurisdictions in which more than 10 percent of the families 
assisted under section 8 of such Act pay for rent more than the amount 
determined under section 3(a)(1) of such Act and the report shall 
include an examination of whether the fair market rent for such areas is 
appropriate. The report shall also include any recommendations of the 
Secretary for legislative and administrative actions appropriate as a 
result of analysis of the data.
    ``(3) Availability of data.--The Secretary shall make available to 
each public housing agency administering assistance under the 
certificate or voucher program any data maintained under this subsection 
that relates to the public housing agency.''


        Income Eligibility for Tenancy in New Construction Units

    Section 555 of Pub. L. 101-625 provided that: ``Any dwelling units 
in any housing constructed or substantially rehabilitated pursuant to 
assistance provided under section 8(b)(2) of the United States Housing 
Act of 1937 [42 U.S.C. 1437f(b)(2)], as such section existed before 
October 1, 1983, and with a contract for assistance under such section, 
shall be reserved for occupancy by low-income families and very low-
income families.''


            GAO Study Regarding Fair Market Rent Calculation

    Section 558 of Pub. L. 101-625 directed Comptroller General to 
conduct a study to examine fair market rentals under subsec. (c)(1) of 
this section which are wholly contained within such market areas and 
submit a report to Congress not later than 18 months after Nov. 28, 
1990, regarding findings and conclusions.


                       Study of Utilization Rates

    Section 559 of Pub. L. 101-625 directed Secretary of Housing and 
Urban Development to conduct a study of reasons for success or failure, 
within appropriate cities and localities, in utilizing assistance made 
available for such areas under this section and submit a report to 
Congress concerning this study not later than the expiration of the 1-
year period beginning on Nov. 28, 1990.


Feasibility Study Regarding Indian Tribe Eligibility for Voucher Program

    Section 561 of Pub. L. 101-625 directed Secretary of Housing and 
Urban Development to conduct a study to determine feasibility and 
effectiveness of entering into contracts with Indian housing authorities 
to provide voucher assistance under subsec. (o) of this section and 
submit a report to Congress regarding findings and conclusions not later 
than the expiration of the 1-year period beginning on Nov. 28, 1990.


                 Study of Private Nonprofit Initiatives

    Section 582 of Pub. L. 101-625 directed Secretary of Housing and 
Urban Development to conduct a study to examine how private nonprofit 
initiatives to provide low-income housing development in local 
communities across the country have succeeded, with particular emphasis 
on how Federal housing policy and tax structures can best promote local 
private nonprofit organizations involvement in low-income housing 
development, and submit a report to Congress regarding findings not 
later than 1-year after Nov. 28, 1990.


    Preferences for Native Hawaiians on Hawaiian Homelands Under HUD 
                                Programs

    Section 958 of Pub. L. 101-625, which directed Secretary of Housing 
and Urban Development to provide preferences for housing assistance 
programs to native Hawaiians in subsec. (a), described assistance 
programs available in subsec. (b), authorized Secretary to provide 
mortgage insurance in certain situations in subsec. (c), and defined 
pertinent terms in subsec. (d), was repealed by Pub. L. 102-238, 
Sec. 5(b), Dec. 17, 1991, 105 Stat. 1910.


 Authorization for Provision of Assistance to Programs Administered by 
                State of Hawaii Under Act of July 9, 1921

    Section 962 of Pub. L. 101-625, as added by Pub. L. 102-238, 
Sec. 5(a), Dec. 17, 1991, 105 Stat. 1909, provided that:
    ``(a) Assistance Authorized.--The Secretary of Housing and Urban 
Development is authorized to provide assistance, under any housing 
assistance program administered by the Secretary, to the State of 
Hawaii, for use by the State in meeting the responsibilities with which 
it has been charged under the provisions of the Act of July 9, 1921 (42 
Stat. 108) [formerly 48 U.S.C. 691-718].
    ``(b) Mortgage Insurance.--
        ``(1) In general.--Notwithstanding any other provision or 
    limitation of this Act [see Short Title note set out under section 
    12701 of this title], or the National Housing Act [12 U.S.C. 1701 et 
    seq.], including those relating to marketability of title, the 
    Secretary of Housing and Urban Development may provide mortgage 
    insurance covering any property on lands set aside under the 
    provisions of the Act of July 9, 1921 (42 Stat. 108), upon which 
    there is or will be located a multifamily residence, for which the 
    Department of the Hawaiian Home Lands of the State of Hawaii--
            ``(A) is the mortgagor or co-mortgagor;
            ``(B) guarantees in writing to reimburse the Secretary for 
        any mortgage insurance claim paid in connection with such 
        property; or
            ``(C) offers other security that is acceptable to the 
        Secretary, subject to appropriate conditions prescribed by the 
        Secretary.
        ``(2) Sale on default.--In the event of a default on a mortgage 
    insured pursuant to paragraph (1), the Department of Hawaiian Home 
    Lands of the State of Hawaii may sell the insured property or 
    housing unit to an eligible beneficiary as defined in the Act of 
    July 9, 1921 (42 Stat. 108).''


     Annual Adjustment Factors for Rents Under Lower-Income Housing 
                           Assistance Program

    Section 801(a), (b), (d), (e) of Pub. L. 101-235 provided that:
    ``(a) Effect of Prior Comparability Studies.--
        ``(1) In general.--In any case in which, in implementing section 
    8(c)(2) of the United States Housing Act of 1937 [42 U.S.C. 
    1437f(c)(2)]--
            ``(A) the use of comparability studies by the Secretary of 
        Housing and Urban Development or the appropriate State agency as 
        an independent limitation on the amount of rental adjustments 
        resulting from the application of an annual adjustment factor 
        under such section has resulted in the reduction of the maximum 
        monthly rent for units covered by the contract or the failure to 
        increase such contract rent to the full amount otherwise 
        permitted under the annual adjustment factor, or
            ``(B) an assistance contract requires a project owner to 
        make a request before becoming eligible for a rent adjustment 
        under the annual adjustment factor and the project owner 
        certifies that such a request was not made because of 
        anticipated negative adjustment to the project rents,
    for fiscal year 1980, and annually thereafter until regulations 
    implementing this section take effect, rental adjustments shall be 
    calculated as an amount equal to the annual adjustment factor 
    multiplied by a figure equal to the contract rent minus the amount 
    of contract rent attributable to debt service. Upon the request of 
    the project owner, the Secretary shall pay to the project owner the 
    amount, if any, by which the total rental adjustment calculated 
    under the preceding sentence exceeds the total adjustments the 
    Secretary or appropriate State agency actually approved, except that 
    solely for purposes of calculating retroactive payments under this 
    subsection, in no event shall any project owner be paid an amount 
    less than 30 percent of a figure equal to the aggregate of the 
    annual adjustment factor multiplied by the full contract rent for 
    each year on or after fiscal year 1980, minus the sum of the rental 
    payments the Secretary or appropriate State agency actually approved 
    for those years. The method provided by this subsection shall be the 
    exclusive method by which retroactive payments, whether or not 
    requested, may be made for projects subject to this subsection for 
    the period from fiscal year 1980 until the regulations issued under 
    subsection (e) take effect. For purposes of this paragraph, `debt 
    service' shall include interest, principal, and mortgage insurance 
    premium if any.
        ``(2) Applicability.--
            ``(A) In general.--Subsection (a) shall apply with respect 
        to any use of comparability studies referred to in such 
        subsection occurring before the effective date of the 
        regulations issued under subsection (e).
            ``(B) Final litigation.--Subsection (a) shall not apply to 
        any project with respect to which litigation regarding the 
        authority of the Secretary to use comparability studies to limit 
        rental adjustments under section 8(c)(2) of the United States 
        Housing Act of 1937 has resulted in a judgment before the 
        effective date of this Act [Dec. 15, 1989] that is final and not 
        appealable (including any settlement agreement).
    ``(b) 3-Year Payments.--The Secretary shall provide the amounts 
under subsection (a) over the 3-year period beginning on the effective 
date of the regulations issued under subsection (e). The Secretary shall 
provide the payments authorized under subsection (a) only to the extent 
approved in subsequent appropriations Acts. There are authorized to be 
appropriated such sums as may be necessary for this purpose.
    ``(d) Determination of Contract Rent.--(1) The Secretary shall upon 
the request of the project owner, make a one-time determination of the 
contract rent for each project owner referred to in subsection (a). The 
contract rent shall be the greater of the contract rent--
        ``(A) currently approved by the Secretary under section 8(c)(2) 
    of the United States Housing Act of 1937 [42 U.S.C. 1437f(c)(2)], or
        ``(B) calculated in accordance with the first sentence of 
    subsection (a)(1).
    ``(2) All adjustments in contract rents under section 8(c)(2) of the 
United States Housing Act of 1937, including adjustments involving 
projects referred to in subsection (a), that occur beginning with the 
first anniversary date of the contract after the regulations issued 
under subsection (e) take effect shall be made in accordance with the 
annual adjustment and comparability provisions of sections 8(c)(2)(A) 
and 8(c)(2)(C) of such Act, respectively, using the one-time contract 
rent determination under paragraph (1).
    ``(e) Regulations.--The Secretary shall issue regulations to carry 
out this section and the amendments made by this section [amending this 
section], including the amendments made by subsection (c) with regard to 
annual adjustment factors and comparability studies. The Secretary shall 
issue such regulations not later than the expiration of the 180-day 
period beginning on the date of the enactment of this Act [Dec. 15, 
1989].''


      Prohibition of Reduction of Contract Rents; Budget Compliance

    Section 1004(b) of Pub. L. 100-628 provided that: ``During fiscal 
year 1989, the amendment made by subsection (a)(2) [amending this 
section] shall be effective only to such extent or in such amounts as 
are provided in appropriation Acts. For purposes of section 202 of the 
Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 
(Public Law 100-119) [2 U.S.C. 909], to the extent that this section has 
the effect of transferring an outlay of the United States from one 
fiscal year to an adjacent fiscal year, the transfer is a necessary (but 
secondary) result of a significant policy change.''


Project-Based Lower-Income Housing Assistance; Implementation of Program

    Section 1005(a) of Pub. L. 100-628 provided that: ``To implement the 
amendment made by section 148 of the Housing and Community Development 
Act of 1987 [Pub. L. 100-242, see 1988 Amendment note above], the 
Secretary of Housing and Urban Development shall issue regulations that 
take effect not later than 30 days after the date of the enactment of 
this Act [Nov. 7, 1988]. Until the effective date of the regulations, 
the Secretary of Housing and Urban Development shall consider each 
application from a public housing agency to attach a contract for 
assistance payments to a structure, in accordance with the amendment 
made by such section 148 to section 8(d)(2) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f(d)(2)), and shall promptly approve such 
application if it meets the requirements of such section 8(d)(2).''


   Project-Based Lower-Income Housing Assistance in New Construction; 
                    Regulations Implementing Program

    Section 1005(b)(2) of Pub. L. 100-628 provided that: ``To implement 
the amendments made by this subsection [amending this section], the 
Secretary of Housing and Urban Development shall issue regulations that 
take effect not later than 90 days after the date of the enactment of 
this Act [Nov. 7, 1988].''


    Use of Funds Recaptured From Refinancing State and Local Finance 
                                Projects

    Section 1012 of Pub. L. 100-628, as amended by Pub. L. 102-273, 
Sec. 2(a), (c)(1), Apr. 21, 1992, 106 Stat. 113; Pub. L. 102-550, title 
I, Sec. 163, Oct. 28, 1992, 106 Stat. 3722, provided that:
    ``(a) Definition of Qualified Project.--For purposes of this 
section, the term `qualified project' means any State financed project 
or local government or local housing agency financed project, that--
        ``(1) was--
            ``(A) provided a financial adjustment factor under section 8 
        of the United States Housing Act of 1937 [42 U.S.C. 1437f]; or
            ``(B) constructed or substantially rehabilitated pursuant to 
        assistance provided under a contract under section 8(b)(2) of 
        the United States Housing Act of 1937 (as in effect on September 
        30, 1983) entered into during any of calendar years 1979 through 
        1984; and
        ``(2) is being refinanced.
    ``(b) Availability of Funds.--The Secretary shall make available to 
the State housing finance agency in the State in which a qualified 
project is located, or the local government or local housing agency 
initiating the refinancing of the qualified project, as applicable, an 
amount equal to 50 percent of the amounts recaptured from the project 
(as determined by the Secretary on a project-by-project basis). 
Notwithstanding any other provision of law, such amounts shall be used 
only for providing decent, safe, and sanitary housing affordable for 
very low-income families and persons.
    ``(c) Applicability and Budget Compliance.--
        ``(1) Retroactivity.--This section shall apply to refinancings 
    of projects for which settlement occurred or occurs before, on, or 
    after the date of the enactment of the Housing and Community 
    Development Act of 1992 [Oct. 28, 1992], subject to the provisions 
    of paragraph (2).
        ``(2) Budget compliance.--This section shall apply only to the 
    extent or in such amounts as are provided in appropriation Acts.''
    [Section 2(b) of Pub. L. 102-273 provided that: ``The amendments 
made by subsection (a) [amending section 1012 of Pub. L. 100-628, set 
out above] shall apply to any refinancing of a local government or local 
housing agency financed project approved by the Secretary of Housing and 
Urban Development for which settlement occurred after January 1, 
1992.'']


          Public Housing Comprehensive Transition Demonstration

    Section 126 of Pub. L. 100-242, which directed Secretary of Housing 
and Urban Development to carry out program in 11 public housing agencies 
to demonstrate effectiveness of providing services to ensure transition 
of public housing residents to private housing, set forth requirements 
of program, and required interim report to Congress not later than 2 
years after Feb. 5, 1988, and final report not later than 60 days after 
termination of program 7 years after such date, was repealed by Pub. L. 
105-276, title V, Sec. 582(a)(8), Oct. 21, 1998, 112 Stat. 2644.


  Nondiscrimination Against Section 8 Certificate Holders and Voucher 
                                 Holders

    Section 183(c) of Pub. L. 100-242, which prohibited owner of 
subsidized project to refuse to lease dwelling unit to holder of 
certificate of eligibility or voucher under this section, where 
proximate cause of refusal was status of prospective tenant as holder of 
such certificate or voucher, was repealed by Pub. L. 105-276, title V, 
Sec. 582(a)(2), Oct. 21, 1998, 112 Stat. 2643.


Withdrawal by Owners, Developers, and Sponsors From Programs Under This 
   Section; Survey and Determination of Number; Notification of Rent 
   Increases; Report to Congress; Regulations To Prevent Conflict of 
Interest on the Part of Federal, State, and Local Officials; Recovery of 
                Legal Expenses; Contents of Annual Report

    Section 326(b)-(d) of Pub. L. 97-35, as amended by Pub. L. 102-550, 
title I, Sec. 129(a), Oct. 28, 1992, 106 Stat. 3711; Pub. L. 105-276, 
title V, Sec. 582(a)(4), Oct. 21, 1998, 112 Stat. 2643, provided that:
    ``(b)[(1) Repealed. Pub. L. 105-276, title V, Sec. 582(a)(4), Oct. 
21, 1998, 112 Stat. 2643.]
    ``(2) Not later than one year after the date of the enactment of 
this Act [Aug. 13, 1981], the Secretary shall transmit to the Congress a 
report indicating alternative methods which may be utilized for 
recapturing the cost to the Federal Government of front-end investment 
in those units which are removed from the section 8 program.
    ``[(c) Repealed. Pub. L. 105-276, title V, Sec. 582(a)(4), Oct. 21, 
1998, 112 Stat. 2643.]
    ``(d) Rental Assistance Fraud Recoveries.--
        ``(1) Authority to retain recovered amounts.--The Secretary of 
    Housing and Urban Development shall permit public housing agencies 
    administering the housing assistance payments program under section 
    8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] to 
    retain, out of amounts obtained by the agencies from tenants that 
    are due as a result of fraud and abuse, an amount (determined in 
    accordance with regulations issued by the Secretary) equal to the 
    greater of--
            ``(A) 50 percent of the amount actually collected, or
            ``(B) the actual, reasonable, and necessary expenses related 
        to the collection, including costs of investigation, legal fees, 
        and collection agency fees.
        ``(2) Use.--Amounts retained by an agency shall be made 
    available for use in support of the affected program or project, in 
    accordance with regulations issued by the Secretary. Where the 
    Secretary is the principal party initiating or sustaining an action 
    to recover amounts from families or owners, the provisions of this 
    section shall not apply.
        ``(3) Recovery.--Amounts may be recovered under this paragraph--
            ``(A) by an agency through a lawsuit (including settlement 
        of the lawsuit) brought by the agency or through court-ordered 
        restitution pursuant to a criminal proceeding resulting from an 
        agency's investigation where the agency seeks prosecution of a 
        family or where an agency seeks prosecution of an owner; or
            ``(B) through administrative repayment agreements with a 
        family or owner entered into as a result of an administrative 
        grievance procedure conducted by an impartial decisionmaker in 
        accordance with section 6(k) of the United States Housing Act of 
        1937 [42 U.S.C. 1437d(k)].''
    [Section 129(b) of Pub. L. 102-550, provided that: ``Subsection (a) 
[amending section 326(d) of Pub. L. 97-35, set out above] shall apply 
with respect to actions by public housing agencies initiated on or after 
the date of the enactment of this Act [Oct. 28, 1992].''


   Study by Secretary Concerning Feasibility of Minimum Rent Payment 
                              Requirements

    Section 212 of Pub. L. 96-153 directed the Secretary of Housing and 
Urban Development to conduct a study of the feasibility and financial 
desirability of requiring minimum rent payments from tenants in low-
income housing assisted under this chapter, and to submit a report to 
the Congress containing the findings and conclusions of such study not 
later than ten days after the Budget for fiscal year 1981 is transmitted 
pursuant to section 11 of former Title 31, Money and Finance, and 
directed the Secretary of Housing and Urban Development to conduct a 
study to provide detailed comparisons between the rents paid by tenants 
occupying low-income housing assisted under this chapter and the rents 
paid by tenants at the same income level who are not in assisted housing 
and to transmit a report on such study to the Congress not later than 
Mar. 1, 1980.


  Study of Alternative Means of Encouraging the Development of Housing

    Section 208 of Pub. L. 95-557 directed that Secretary of Housing and 
Urban Development conduct a study for purpose of examining alternative 
means of encouraging development of housing to be assisted under this 
section for occupancy by large families which reside in areas with a 
low-vacancy rate in rental housing and report to Congress no later than 
one year after Oct. 31, 1978, for purpose of providing legislative 
recommendations with respect to this study.


Taxation of Interest Paid on Obligations Secured by Insured Mortgage and 
                         Issued by Public Agency

    Section 319(b) of Pub. L. 93-383, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``With respect to 
any obligation secured by a mortgage which is insured under section 
221(d)(3) of the National Housing Act [section 1715l(d)(3) of Title 12, 
Banks and Banking] and issued by a public agency as mortgagor in 
connection with the financing of a project assisted under section 8 of 
the United States Housing Act of 1937 [this section], the interest paid 
on such obligation shall be included in gross income for purposes of 
chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] 
[chapter 1 of Title 26, Internal Revenue Code].''


  Rental or Income Contributions; Use of Special Schedules of Required 
 Payments for Participants in Mutual Help Projects Contributing Labor, 
                                  Etc.

    Section 203 of Pub. L. 93-383 provided that: ``The rental or income 
contribution provisions of the United States Housing Act of 1937 
[sections 1437 to 1437j of this title], as amended by section 201 of 
this Act, shall not preclude the use of special schedules of required 
payments as approved by the Secretary for participants in mutual help 
housing projects who contribute labor, land, or materials to the 
development of such projects.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1436a, 1436d, 1437, 1437a, 
1437c, 1437c-1, 1437d, 1437e, 1437g, 1437j, 1437m, 1437n, 1437p, 1437s, 
1437t, 1437u, 1437v, 1437y, 1437z, 1437z-5, 1437aaa, 1437aaa-2, 1437aaa-
3, 1437bbb-2, 1437bbb-3, 1437bbb-4, 1439, 1472, 1490j, 1490m, 4822, 
4851b, 4855, 5302, 5304, 8011, 8012, 8013, 11401, 11403e-1, 11404b, 
11405b, 11406b, 11407, 11905, 12742, 12745, 12747, 12839, 12871, 12873, 
12874, 12899d, 12908, 12909, 12910, 13603, 13611, 13613, 13614, 13615, 
13616, 13617, 13619, 13641, 13664 of this title; title 12 sections 
1701q-2, 1701s, 1701z-11, 1701z-12, 1701z-13, 1709, 1715l, 1715z-1, 
1715z-1a, 1715z-1b, 1715z-1c, 1715z-6, 4105, 4109, 4110, 4111, 4112, 
4113, 4116, 4119, 4125; title 26 sections 42, 142, 143, 1250; title 38 
section 3773; title 40 App. section 207.
