
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: 42USC1437z-4]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
            SUBCHAPTER I--GENERAL PROGRAM OF ASSISTED HOUSING
 
Sec. 1437z-4. Resident homeownership programs


(a) In general

    A public housing agency may carry out a homeownership program in 
accordance with this section and the public housing agency plan of the 
agency to make public housing dwelling units, public housing projects, 
and other housing projects available for purchase by low-income families 
for use only as principal residences for such families. An agency may 
transfer a unit pursuant to a homeownership program only if the program 
is authorized under this section and approved by the Secretary.

(b) Participating units

    A program under this section may cover any existing public housing 
dwelling units or projects, and may include other dwelling units and 
housing owned, assisted, or operated, or otherwise acquired for use 
under such program, by the public housing agency.

(c) Eligible purchasers

                     (1) Low-income requirement

        Only low-income families assisted by a public housing agency, 
    other low-income families, and entities formed to facilitate such 
    sales by purchasing units for resale to low-income families shall be 
    eligible to purchase housing under a homeownership program under 
    this section.

                       (2) Other requirements

        A public housing agency may establish other requirements or 
    limitations for families to purchase housing under a homeownership 
    program under this section, including requirements or limitations 
    regarding employment or participation in employment counseling or 
    training activities, criminal activity, participation in 
    homeownership counseling programs, evidence of regular income, and 
    other requirements. In the case of purchase by an entity for resale 
    to low-income families, the entity shall sell the units to low-
    income families within 5 years from the date of its acquisition of 
    the units. The entity shall use any net proceeds from the resale and 
    from managing the units, as determined in accordance with guidelines 
    of the Secretary, for housing purposes, such as funding resident 
    organizations and reserves for capital replacements.

(d) Right of first refusal

    In making any sale under this section, the public housing agency 
shall initially offer the public housing unit at issue to the resident 
or residents occupying that unit, if any, or to an organization serving 
as a conduit for sales to any such resident.

(e) Protection of nonpurchasing residents

    If a public housing resident does not exercise the right of first 
refusal under subsection (d) of this section with respect to the public 
housing unit in which the resident resides, the public housing agency--
        (1) shall notify the resident residing in the unit 90 days prior 
    to the displacement date except in cases of imminent threat to 
    health or safety, consistent with any guidelines issued by the 
    Secretary governing such notifications, that--
            (A) the public housing unit will be sold;
            (B) the transfer of possession of the unit will occur until 
        the resident is relocated; and
            (C) each resident displaced by such action will be offered 
        comparable housing--
                (i) that meets housing quality standards;
                (ii) that is located in an area that is generally not 
            less desirable than the location of the displaced resident's 
            housing; and
                (iii) which may include--
                    (I) tenant-based assistance, except that the 
                requirement under this subclause regarding offering of 
                comparable housing shall be fulfilled by use of tenant-
                based assistance only upon the relocation of such 
                resident into such housing;
                    (II) project-based assistance; or
                    (III) occupancy in a unit owned, operated, or 
                assisted by the public housing agency at a rental rate 
                paid by the resident that is comparable to the rental 
                rate applicable to the unit from which the resident is 
                vacated;

        (2) shall provide for the payment of the actual and reasonable 
    relocation expenses of the resident to be displaced;
        (3) shall ensure that the displaced resident is offered 
    comparable housing in accordance with the notice under paragraph 
    (1);
        (4) shall provide any necessary counseling for the displaced 
    resident; and
        (5) shall not transfer possession of the unit until the resident 
    is relocated.

(f) Financing and assistance

    A homeownership program under this section may provide financing for 
acquisition of housing by families purchasing under the program, or for 
acquisition of housing by the public housing agency for sale under the 
program, in any manner considered appropriate by the agency (including 
sale to a resident management corporation).

(g) Downpayment requirement

                           (1) In general

        Each family purchasing housing under a homeownership program 
    under this section shall be required to provide from its own 
    resources a downpayment in connection with any loan for acquisition 
    of the housing, in an amount determined by the public housing 
    agency. Except as provided in paragraph (2), the agency shall permit 
    the family to use grant amounts, gifts from relatives, contributions 
    from private sources, and similar amounts as downpayment amounts in 
    such purchase.

                   (2) Direct family contribution

        In purchasing housing pursuant to this section, each family 
    shall contribute an amount of the downpayment, from resources of the 
    family other than grants, gifts, contributions, or other similar 
    amounts referred to in paragraph (1), that is not less than 1 
    percent of the purchase price.

(h) Ownership interests

    A homeownership program under this section may provide for sale to 
the purchasing family of any ownership interest that the public housing 
agency considers appropriate under the program, including ownership in 
fee simple, a condominium interest, an interest in a limited dividend 
cooperative, a shared appreciation interest with a public housing agency 
providing financing.

(i) Resale

                    (1) Authority and limitation

        A homeownership program under this section shall permit the 
    resale of a dwelling unit purchased under the program by an eligible 
    family, but shall provide such limitations on resale as the agency 
    considers appropriate (whether the family purchases directly from 
    the agency or from another entity) for the agency to recapture--
            (A) some or all of the economic gain derived from any such 
        resale occurring during the 5-year period beginning upon 
        purchase of the dwelling unit by the eligible family; and
            (B) after the expiration of such 5-year period, only such 
        amounts as are equivalent to the assistance provided under this 
        section by the agency to the purchaser.

                         (2) Considerations

        The limitations referred to in paragraph (1)(A) may provide for 
    consideration of the aggregate amount of assistance provided under 
    the program to the family, the contribution to equity provided by 
    the purchasing eligible family, the period of time elapsed between 
    purchase under the homeownership program and resale, the reason for 
    resale, any improvements to the property made by the eligible 
    family, any appreciation in the value of the property, and any other 
    factors that the agency considers appropriate.

(j) Net proceeds

    The net proceeds of any sales under a homeownership program under 
this section remaining after payment of all costs of the sale shall be 
used for purposes relating to low-income housing and in accordance with 
the public housing agency plan of the agency carrying out the program.

(k) Homeownership assistance

    From amounts distributed to a public housing agency under the 
Capital Fund under section 1437g(d) of this title, or from other income 
earned by the public housing agency, the public housing agency may 
provide assistance to public housing residents to facilitate the ability 
of those residents to purchase a principal residence, including a 
residence other than a residence located in a public housing project.

(l) Inapplicability of disposition requirements

    The provisions of section 1437p of this title shall not apply to 
disposition of public housing dwelling units under a homeownership 
program under this section.

(Sept. 1, 1937, ch. 896, title I, Sec. 32, as added Pub. L. 105-276, 
title V, Sec. 536, Oct. 21, 1998, 112 Stat. 2586.)


                             Effective Date

    Section effective and applicable beginning upon Oct. 1, 1999, except 
as otherwise provided, with provision that Secretary may implement 
section before such date except to extent otherwise provided, see 
section 503 of Pub. L. 105-276, set out as an Effective Date of 1998 
Amendment note under section 1437 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 1437c-1, 1437g of this 
title.
