
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-7]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
            SUBCHAPTER I--GENERAL PROGRAM OF ASSISTED HOUSING
 
Sec. 1437z-7. Mixed-finance public housing


(a) Authority

    A public housing agency may own, operate, assist, or otherwise 
participate in 1 or more mixed-finance projects in accordance with this 
section.

(b) Assistance

                              (1) Forms

        A public housing agency may provide to a mixed-finance project 
    assistance from the Operating Fund under section 1437g of this 
    title, assistance from the Capital Fund under such section, or both 
    forms of assistance. A public housing agency may, in accordance with 
    regulations established by the Secretary, provide capital assistance 
    to a mixed-finance project in the form of a grant, loan, guarantee, 
    or other form of investment in the project, which may involve 
    drawdown of funds on a schedule commensurate with construction draws 
    for deposit into an interest-bearing escrow account to serve as 
    collateral or credit enhancement for bonds issued by a public 
    agency, or for other forms of public or private borrowings, for the 
    construction or rehabilitation of the development.

                               (2) Use

        To the extent deemed appropriate by the Secretary, assistance 
    used in connection with the costs associated with the operation and 
    management of mixed-finance projects may be used for funding of an 
    operating reserve to ensure affordability for low-income and very 
    low-income families in lieu of the availability of operating funds 
    for public housing units in a mixed-finance project.

(c) Compliance with public housing requirements

    The units assisted with capital or operating assistance in a mixed-
finance project shall be developed, operated, and maintained in 
accordance with the requirements of this chapter relating to public 
housing during the period required by under \1\ this chapter, unless 
otherwise specified in this section. For purposes of this chapter, any 
reference to public housing owned or operated by a public housing agency 
shall include dwelling units in a mixed finance project that are 
assisted by the agency with capital or operating assistance.
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    \1\ So in original.
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(d) Mixed-finance projects

                           (1) In general

        For purposes of this section, the term ``mixed-finance project'' 
    means a project that meets the requirements of paragraph (2) and is 
    financially assisted by private resources, which may include low-
    income housing tax credits, in addition to amounts provided under 
    this chapter.

                        (2) Types of projects

        The term includes a project that is developed--
            (A) by a public housing agency or by an entity affiliated 
        with a public housing agency;
            (B) by a partnership, a limited liability company, or other 
        entity in which the public housing agency (or an entity 
        affiliated with a public housing agency) is a general partner, 
        managing member, or otherwise participates in the activities of 
        that entity;
            (C) by any entity that grants to the public housing agency 
        the right of first refusal and first option to purchase, after 
        the close of the compliance period, of the qualified low-income 
        building in which the public housing units exist in accordance 
        with section 42(i)(7) of title 26; or
            (D) in accordance with such other terms and conditions as 
        the Secretary may prescribe by regulation.

(e) Structure of projects

    Each mixed-finance project shall be developed--
        (1) in a manner that ensures that public housing units are made 
    available in the project, by regulatory and operating agreement, 
    master contract, individual lease, condominium or cooperative 
    agreement, or equity interest;
        (2) in a manner that ensures that the number of public housing 
    units bears approximately the same proportion to the total number of 
    units in the mixed-finance project as the value of the total 
    financial commitment provided by the public housing agency bears to 
    the value of the total financial commitment in the project, or shall 
    not be less than the number of units that could have been developed 
    under the conventional public housing program with the assistance, 
    or as may otherwise be approved by the Secretary; and
        (3) in accordance with such other requirements as the Secretary 
    may prescribe by regulation.

(f) Taxation

                           (1) In general

        A public housing agency may elect to exempt all public housing 
    units in a mixed-finance project--
            (A) from the provisions of section 1437d(d) of this title, 
        and instead subject such units to local real estate taxes; and
            (B) from the finding of need and cooperative agreement 
        provisions under section 1437c(e)(1)(ii) and 1437c(e)(2) of this 
        title, but only if the development of the units is not 
        inconsistent with the jurisdiction's comprehensive housing 
        affordability strategy.

                  (2) Low-income housing tax credit

        With respect to any unit in a mixed-finance project that is 
    assisted pursuant to the low-income housing tax credit under section 
    42 of title 26, the rents charged to the residents may be set at 
    levels not to exceed the amounts allowable under that section, 
    provided that such levels for public housing residents do not exceed 
    the amounts allowable under section 1437a of this title.

(g) Use of savings

    Notwithstanding any other provision of this chapter, to the extent 
deemed appropriate by the Secretary, to facilitate the establishment of 
socioeconomically mixed communities, a public housing agency that uses 
assistance from the Capital Fund for a mixed-finance project, to the 
extent that income from such a project reduces the amount of assistance 
used for operating or other costs relating to public housing, may use 
such resulting savings to rent privately developed dwelling units in the 
neighborhood of the mixed-finance project. Such units shall be made 
available for occupancy only by low-income families eligible for 
residency in public housing.

(h) Effect of certain contract terms

    If an entity that owns or operates a mixed-finance project, that 
includes a significant number of units other than public housing units 
enters into a contract with a public housing agency, the terms of which 
obligate the entity to operate and maintain a specified number of units 
in the project as public housing units in accordance with the 
requirements of this chapter for the period required by law, such 
contractual terms may provide that, if, as a result of a reduction in 
appropriations under section 1437g of this title or any other change in 
applicable law, the public housing agency is unable to fulfill its 
contractual obligations with respect to those public housing units, that 
entity may deviate, under procedures and requirements developed through 
regulations by the Secretary, from otherwise applicable restrictions 
under this chapter regarding rents, income eligibility, and other areas 
of public housing management with respect to a portion or all of those 
public housing units, to the extent necessary to preserve the viability 
of those units while maintaining the low-income character of the units 
to the maximum extent practicable.

(Sept. 1, 1937, ch. 896, title I, Sec. 35, as added Pub. L. 105-276, 
title V, Sec. 539[(a)], Oct. 21, 1998, 112 Stat. 2594.)


                             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.


                               Regulations

    Pub. L. 105-276, title V, Sec. 539(b), Oct. 21, 1998, 112 Stat. 
2596, provided that: ``The Secretary shall issue such regulations as may 
be necessary to promote the development of mixed-finance projects, as 
that term is defined in section 3(b) of the United States Housing Act of 
1937 [42 U.S.C. 1437a(b)] (as amended by this Act).''

                  Section Referred to in Other Sections

    This section is referred to in section 1437a of this title.
