
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1437s]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
            SUBCHAPTER I--GENERAL PROGRAM OF ASSISTED HOUSING
 
Sec. 1437s. Public housing homeownership and management 
        opportunities
        

(a) Homeownership opportunities in general

    Low-income families residing in a public housing project shall be 
provided with the opportunity to purchase the dwelling units in the 
project through a qualifying resident management corporation as follows:

          (1) Formation of resident management corporation

        As a condition for public housing homeownership--
            (A) the adult residents of a public housing project shall 
        have formed a resident management corporation in accordance with 
        regulations and requirements of the Secretary prescribed under 
        this section and section 1437r of this title;
            (B) the resident management corporation shall have entered 
        into a contract with the public housing agency establishing the 
        respective management rights and responsibilities of the 
        resident management corporation and the public housing agency; 
        and
            (C) the resident management corporation shall have 
        demonstrated its ability to manage public housing effectively 
        and efficiently for a period of not less than 3 years.

                    (2) Homeownership assistance

        (A) The Secretary may provide assistance from the Capital Fund 
    to a public housing project in which homeownership activities under 
    this section are conducted.
        (B) The Secretary may provide financial assistance to public 
    housing agencies, resident management corporations, or resident 
    councils that obtain, by contract or otherwise, training, technical 
    assistance, and educational assistance as the Secretary determines 
    to be necessary to promote homeownership opportunities under this 
    section.
        (C) This paragraph shall not have effect after February 4, 1991. 
    The Secretary may not provide financial assistance under 
    subparagraph (B), after such date, unless the Secretary determines 
    that such assistance is necessary for the development of a 
    homeownership program that was initiated, as determined by the 
    Secretary, before November 28, 1990.

        (3) Conditions of purchase by a resident management 
                                 corporation

        (A) A resident management corporation may purchase from a public 
    housing agency one or more multifamily buildings in a public housing 
    project following a determination by the Secretary that--
            (i) the resident management corporation has met the 
        conditions of paragraph (1);
            (ii) the resident management corporation has applied for and 
        is prepared to undertake the ownership, management, and 
        maintenance of the building or buildings with continued 
        assistance from the Secretary;
            (iii) the public housing agency has held one or more public 
        hearings to obtain the views of citizens regarding the proposed 
        purchase and, in consultation with the Secretary, has certified 
        that the purchase will not interfere with the rights of other 
        families residing in public housing, will not harm the efficient 
        operation of other public housing, and is in the interest of the 
        community;
            (iv) the public housing agency has certified that it has and 
        will implement a plan to replace public housing units sold under 
        this section within 30 months of the sale, which plan shall 
        provide for replacement of 100 percent of the units sold under 
        this section by--
                (I) production, acquisition, or rehabilitation of vacant 
            public housing units by the public housing agency; and
                (II) acquisition by the resident management corporation 
            of nonpublicly owned, decent, and affordable housing units, 
            which the resident management corporation shall operate as 
            rental housing subject to tenant income and rent limitations 
            comparable to the limitations applicable to public housing; 
            and

            (v) the building or buildings meet the housing quality 
        standards applicable under section 1437d(f) of this title, and 
        the physical condition, management, and operation of the 
        building or buildings are sufficient to permit affordable 
        homeownership by the families residing in the project.

        (B) The price of a building purchased under the preceding 
    sentence shall be approved by the Secretary, in consultation with 
    the public housing agency and resident management corporation, 
    taking into account the fair market value of the property, the 
    ability of resident families to afford and maintain the property, 
    and such other factors as the Secretary determines to be consistent 
    with increasing the supply of dwelling units affordable to very low 
    income families.
        (C) This paragraph shall not have effect after February 4, 1991. 
    The authority for a resident management corporation to purchase 1 or 
    more multifamily buildings in a public housing project from a public 
    housing agency shall terminate after such date, unless the Secretary 
    determines that such purchase is necessary for the development of a 
    homeownership program that was initiated, as determined by the 
    Secretary, before November 28, 1990.

                      (4) Conditions of resale

        (A)(i) A resident management corporation may sell a dwelling 
    unit or ownership rights in a dwelling unit only to a lower income 
    family residing in, or eligible to reside in, public housing and 
    only if the Secretary determines that the purchase will not 
    interfere with the rights of other families residing in the housing 
    project or harm the efficient operation of the project, and the 
    family will be able to purchase and maintain the property.
        (ii) The sale of dwelling units or ownership rights in dwelling 
    units under clause (i) shall be made to families in the following 
    order of priority:
            (I) a lower income family residing in the public housing 
        project in which the dwelling unit is located;
            (II) a lower income family residing in any public housing 
        project within the jurisdiction of the public housing agency 
        having jurisdiction with respect to the project in which the 
        dwelling unit is located;
            (III) a lower income family receiving Federal housing 
        assistance and residing in the jurisdiction of such public 
        housing agency; and
            (IV) a lower income family on the waiting list of such 
        public housing agency for public housing or assistance under 
        section 1437f of this title, with priority given in the order in 
        which the family appears on the waiting list.

        (iii) Each resident management corporation shall provide each 
    family described in clause (ii) with a notice of the eligibility of 
    the family to purchase a dwelling unit under this paragraph.
        (B) A purchase under subparagraph (A) may be made under any of 
    the following arrangements:
            (i) Limited dividend cooperative ownership.
            (ii) Condominium ownership.
            (iii) Fee simple ownership.
            (iv) Shared appreciation with a public housing agency 
        providing financing under paragraph (6).
            (v) Any other arrangement determined by the Secretary to be 
        appropriate.

        (C) Property purchased under this section shall be resold only 
    to the resident management corporation, a lower income family 
    residing in or eligible to reside in public housing or housing 
    assisted under section 1437f of this title, or to the public housing 
    agency.
        (D) In no case may the owner receive consideration for his or 
    her interest in the property that exceeds the total of--
            (i) the contribution to equity paid by the owner;
            (ii) the value, as determined by such means as the Secretary 
        shall determine through regulation, of any improvements 
        installed at the expense of the owner during the owner's tenure 
        as owner; and
            (iii) the appreciated value determined by an inflation 
        allowance at a rate which may be based on a cost of living 
        index, an income index, or market index as determined by the 
        Secretary through regulation and agreed to by the purchaser and 
        the resident management corporation or the public housing 
        agency, whichever is appropriate, at the time of initial sale, 
        and applied against the contribution to equity; the resident 
        management corporation or the public housing agency may, at the 
        time of initial sale, enter into an agreement with the owner to 
        set a maximum amount which this appreciation may not exceed.

        (E) Upon sale, the resident management corporation or the public 
    housing agency, whichever is appropriate, shall ensure that 
    subsequent owners are bound by the same limitations on resale and 
    further restrictions on equity appreciation.

                         (5) Use of proceeds

        Notwithstanding any other provision of this chapter or other law 
    to the contrary, proceeds from the sale of a building or buildings 
    under paragraph (3) and amounts recaptured under paragraph (4) shall 
    be paid to the public housing agency and shall be retained and used 
    by the public housing agency only to increase the number of public 
    housing units available for occupancy. The resident management 
    corporation shall keep and make available to the public housing 
    agency and the Secretary all records necessary to calculate 
    accurately payments due the local housing agency under this section. 
    The Secretary shall not reduce or delay payments under other 
    provisions of law as a result of amounts made available to the local 
    housing agency under this section.

                            (6) Financing

        When financing for the purchase of the property is not otherwise 
    available for purposes of assisting any purchase by a family or 
    resident management corporation under this section, the public 
    housing agency involved may make a loan on the security of the 
    property involved to the family or resident management corporation 
    at a rate of interest that shall not be lower than 70 percent of the 
    market interest rate for conventional mortgages on the date on which 
    the loan is made.

                (7) Capital and operating assistance

        Notwithstanding the purchase of a building in a public housing 
    project under this section, the Secretary shall continue to provide 
    assistance under section 1437g of this title with respect to the 
    project. Such assistance may not exceed the allocation for the 
    project under section 1437g of this title.

                    (8) Operating Fund allocation

        Amounts from the Operating Fund shall not be available with 
    respect to a building after the date of its sale by the public 
    housing agency.

(b) Protection of nonpurchasing families

                      (1) Eviction prohibition

        No family residing in a dwelling unit in a public housing 
    project may be evicted by reason of the sale of the project to a 
    resident management corporation under this section.

                         (2) Tenants rights

        Families renting a dwelling unit purchased by a resident 
    management corporation shall have all rights provided to tenants of 
    public housing under this chapter.

                        (3) Rental assistance

        If any family resides in a dwelling unit in a building purchased 
    by a resident management corporation, and the family decides not to 
    purchase the dwelling unit, the Secretary shall offer to provide to 
    the family (at the option of the family) tenant-based assistance 
    under section 1437f(o) of this title for as long as the family 
    continues to reside in the building. The Secretary may adjust the 
    payment standard for such assistance to take into account conditions 
    under which the building was purchased.

                (4) Rental and relocation assistance

        If any family resides in a dwelling unit in a public housing 
    project in which other dwelling units are purchased under this 
    section, and the family decides not to purchase the dwelling unit, 
    the Secretary shall offer (to be selected by the family, at its 
    option)--
            (A) to assist the family in relocating to a comparable 
        appropriate sized dwelling unit in another public housing 
        project, and to reimburse the family for their cost of 
        relocation; and
            (B) to provide to the family the financial assistance 
        necessary to permit the family to stay in the dwelling unit or 
        to move to another comparable dwelling unit and to pay no more 
        for rent than required under subparagraph (A), (B), or (C) of 
        section 1437a(a)(1) of this title.

(c) Financial assistance for public housing agencies

    The Secretary shall provide to public housing agencies such 
financial assistance as is necessary to permit such agencies to carry 
out the provisions of this section.

(d) Additional homeownership and management opportunities

    This section shall not apply to the turnkey III, the mutual help, or 
any other homeownership program established under section 1437d(c)(4)(D) 
of this title, as in effect before the effective date under section 
503(a) of the Quality Housing and Work Responsibility Act of 1998, and 
in existence before February 5, 1988.

(e) Regulations

    The Secretary shall issue such regulations as may be necessary to 
carry out the provisions of this section. Such regulations may establish 
any additional terms and conditions for homeownership or resident 
management under this section that are determined by the Secretary to be 
appropriate.

(f) Repealed. Pub. L. 104-66, title I, Sec. 1071(a), Dec. 21, 1995, 109 
        Stat. 720

(g) Limitation

    Any authority of the Secretary under this section to provide 
financial assistance, or to enter into contracts to provide financial 
assistance, shall be effective only to such extent or in such amounts as 
are or have been provided in advance in an appropriation Act.

(Sept. 1, 1937, ch. 896, title I, Sec. 21, as added Pub. L. 100-242, 
title I, Sec. 123, Feb. 5, 1988, 101 Stat. 1842; renumbered title I, 
Pub. L. 100-358, Sec. 5, June 29, 1988, 102 Stat. 681; amended Pub. L. 
101-625, title IV, Sec. 416, title V, Sec. 572(1), Nov. 28, 1990, 104 
Stat. 4161, 4236; Pub. L. 102-550, title I, Sec. 118, Oct. 28, 1992, 106 
Stat. 3695; Pub. L. 104-66, title I, Sec. 1071(a), Dec. 21, 1995, 109 
Stat. 720; Pub. L. 105-276, title V, Secs. 518(a)(2)(A), 532(b), Oct. 
21, 1998, 112 Stat. 2551, 2575.)

                       References in Text

    Section 503(a) of the Quality Housing and Work Responsibility Act of 
1998, referred to in subsec. (d), 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.


                               Amendments

    1998--Subsec. (a)(2)(A). Pub. L. 105-276, Sec. 532(b)(1)(A), 
substituted ``assistance from the Capital Fund'' for ``comprehensive 
improvement assistance under section 1437l of this title''.
    Subsec. (a)(3)(A)(v). Pub. L. 105-276, Sec. 532(b)(1)(B), 
substituted ``housing quality standards applicable under section 
1437d(f) of this title'' for ``minimum safety and livability standards 
applicable under section 1437l of this title''.
    Subsec. (a)(7). Pub. L. 105-276, Sec. 532(b)(1)(C), in heading, 
substituted ``Capital and operating assistance'' for ``Annual 
contributions'', in first sentence, substituted ``provide assistance 
under section 1437g of this title'' for ``pay annual contributions'', 
and at end, substituted ``Such assistance may not exceed the allocation 
for the project under section 1437g of this title'' for ``Such 
contributions may not exceed the maximum contributions authorized in 
section 1437c(a) of this title.''
    Subsec. (a)(8). Pub. L. 105-276, Sec. 532(b)(1)(D), in heading 
substituted ``fund allocation'' for ``subsidies'' and in text 
substituted ``Amounts from the Operating Fund'' for ``Operating 
subsidies''.
    Subsec. (b)(3). Pub. L. 105-276, Sec. 532(b)(2), in first sentence, 
substituted ``tenant-based assistance'' for ``a certificate under 
section 1437f(b)(1) of this title or a housing voucher'' and, in second 
sentence, substituted ``payment standard for such assistance'' for 
``fair market rent for such certificate''.
    Subsec. (d). Pub. L. 105-276, Sec. 532(b)(3), inserted ``, as in 
effect before the effective date under section 503(a) of the Quality 
Housing and Work Responsibility Act of 1998,'' after ``section 
1437d(c)(4)(D) of this title''.
    Pub. L. 105-276, Sec. 518(a)(2)(A), struck out ``section 1437c(h) of 
this title or'' after ``program established under''.
    1995--Subsec. (f). Pub. L. 104-66 struck out heading and text of 
subsec. (f). Text read as follows: ``The Secretary shall annually submit 
to the Congress a report setting forth--
        ``(1) the number, type, and cost of units sold;
        ``(2) the income, race, gender, children, and other 
    characteristics of families purchasing or moving and not purchasing;
        ``(3) the amount and type of financial assistance provided;
        ``(4) the need for subsidy to ensure continued affordability and 
    meet future maintenance and repair costs;
        ``(5) any need for the development of additional public housing 
    dwelling units as a result of the sale of public housing dwelling 
    units under this section;
        ``(6) recommendations of the Secretary for additional budget 
    authority to carry out such development;
        ``(7) recommendations of the Secretary to ensure decent homes 
    and decent neighborhoods for low-income families; and
        ``(8) the recommendations of the Secretary for statutory and 
    regulatory improvements to the program.''
    1992--Subsec. (a)(2)(C), (3)(C). Pub. L. 102-550 substituted 
``February 4, 1991'' for ``the effective date of the regulations 
implementing subchapter II-A of this chapter'' and ``after such date'' 
for ``after such effective date'' and made technical amendment to 
reference to November 28, 1990, to reflect correction of corresponding 
provisions of original act.
    1990--Subsec. (a). Pub. L. 101-625, Sec. 572(1), which directed 
substitution of ``low-income families'' for ``lower income families'', 
was executed by substituting ``Low-income families'' for ``Lower income 
families'' in introductory provisions to reflect the probable intent of 
Congress.
    Subsec. (a)(2)(B). Pub. L. 101-625, Sec. 416(1), amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: ``The 
Secretary, and the public housing agency owning and operating a public 
housing project, shall provide such training, technical assistance, and 
educational assistance as the Secretary determines to be necessary to 
prepare the families residing in the project, and any resident 
management corporation established under paragraph (1), for 
homeownership.''
    Subsec. (a)(2)(C). Pub. L. 101-625, Sec. 416(2), substituted ``the 
effective date of the regulations implementing subchapter II-A of this 
chapter. The Secretary may not provide financial assistance under 
subparagraph (B), after such effective date, unless the Secretary 
determines that such assistance is necessary for the development of a 
homeownership program that was initiated, as determined by the 
Secretary, before November 28, 1990'' for ``September 30, 1990''.
    Subsec. (a)(3)(C). Pub. L. 101-625, Sec. 416(3), substituted ``the 
effective date of the regulations implementing subchapter II-A of this 
chapter. The authority for a resident management corporation to purchase 
1 or more multifamily buildings in a public housing project from a 
public housing agency shall terminate after such effective date, unless 
the Secretary determines that such purchase is necessary for the 
development of a homeownership program that was initiated, as determined 
by the Secretary, before November 28, 1990'' for ``September 30, 1990''.
    Subsec. (f)(7). Pub. L. 101-625, Sec. 572(1), substituted ``low-
income families'' for ``lower income families''.


                    Effective Date of 1998 Amendment

    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.
