
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: 42USC1490m]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
       CHAPTER 8A--SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING
 
                      SUBCHAPTER III--FARM HOUSING
 
Sec. 1490m. Housing preservation grants


(a) Statement of purposes

    The purpose of this section is to authorize the Secretary to make 
grants to eligible grantees including private nonprofit organizations, 
Indian tribes, general units of local government, counties, States, and 
consortia of other eligible grantees, in order to--
        (1) rehabilitate or replace single family housing in rural areas 
    which is owned by low- and very low-income persons and families, and
        (2) rehabilitate or replace rental properties or cooperative 
    housing which has a membership resale structure that enables the 
    cooperative to maintain affordability for persons of low income in 
    rural areas serving low- and very low-income occupants.

The Secretary may also provide tenant-based assistance as provided under 
section 1437f of this title or section 1490r of this title upon the 
request of grantees in order to minimize the displacement of very low-
income tenants residing in units rehabilitated or replaced with 
assistance under this section.

(b) Mandatory program requirements

    Preservation programs assisted under this section shall--
        (1) be used to provide loans or grants to owners of single 
    family housing in order to cover the cost of repairs and 
    improvements;
        (2) be used to provide loans or grants, not to exceed $15,000 
    per unit, to owners of single family housing to replace existing 
    housing if repair or rehabilitation of the housing is determined by 
    the Secretary not to be practicable and the owner of the housing is 
    unable to afford a loan under section 1472 of this title for 
    replacement housing;
        (3) be used to provide interest reduction payment;
        (4) be used to provide loans or grants to owners of rental 
    housing, except that rental rehabilitation or replacement assistance 
    provided under this subsection for any structure shall not exceed 75 
    per centum of the total costs associated with the rehabilitation or 
    replacement of that structure;
        (5) be used to provide other comparable assistance that the 
    Secretary deems appropriate to carry out the purpose of this 
    section, designed to reduce the costs of such repair, 
    rehabilitation, and replacement in order to make such housing 
    affordable by persons of low income and, to the extent feasible, by 
    persons and families whose incomes do not exceed 50 per centum of 
    the area median income;
        (6) benefit low- and very low-income persons and families in 
    rural areas, without causing the displacement of current residents; 
    and
        (7) raise health and safety conditions to meet those specified 
    in section 1479(a) of this title.

(c) Allocation formula; transfer of funds; maximum amounts

    (1) The Secretary shall allocate grant funds under this section for 
use in each State on the basis of a formula contained in a regulation 
prescribed by the Secretary using the average of the ratios between--
        (A) the population of the rural areas in that State and the 
    population of the rural areas of all States;
        (B) the extent of poverty in the rural areas in that State and 
    the extent of poverty in the rural areas of all States; and
        (C) the extent of substandard housing in the rural areas of that 
    State and the extent of substandard housing in the rural areas of 
    all States.

Any funds which are allocated to a State but uncommitted to grantees 
will be transferred to the State office of the Farmers Home 
Administration in a timely manner and be used for authorized 
rehabilitation activities under section 1474 of this title. Funds 
obligated, but subsequently unspent and deobligated, may remain 
available, to the extent provided in appropriations Acts, for use as 
housing preservation grants in ensuing fiscal years.
    (2) Unless there is only one eligible grantee in a State, a single 
grantee may not receive more than 50 per centum of a State's allocation.

(d) Statement of activity by grantee; submission; contents; 
        availability; consultations; evaluation by Secretary; criteria 
        applicable; maximum amounts

    (1) Eligible grantees may submit a statement of activity to the 
Secretary at the time specified by the program administrator, containing 
a description of its proposed preservation program. The statement shall 
consist of the activities each entity proposes to undertake for the 
fiscal year, and the projected progress in carrying out those 
activities. The statement of activities shall be made available to the 
public for comment.
    (2) In preparing such statement, the grantee shall consult with and 
consider the views of appropriate local officials.
    (3) The Secretary shall evaluate the merits of each statement on the 
basis of such criteria as the Secretary shall prescribe, including the 
extent--
        (A) to which the repair, rehabilitation, and replacement 
    activities will assist persons of low income who lack adequate 
    shelter, with priority given to applications assisting the maximum 
    number of persons and families whose incomes do not exceed 50 per 
    centum of the area median income;
        (B) to which the repair, rehabilitation, and replacement 
    activities include the participation of other public or private 
    organizations in providing assistance, in addition to the assistance 
    provided under this section, in order to lower the costs of such 
    activities or provide for the leveraging of available funds to 
    supplement the rural housing preservation grant program;
        (C) to which such activities will be undertaken in rural areas 
    having populations below 10,000 or in remote parts of other rural 
    areas;
        (D) to which the repair, rehabilitation, and replacement 
    activities may be expected to result in achieving the greatest 
    degree of repair or improvement for the least cost per unit or 
    dwelling;
        (E) to which the program would minimize displacement;
        (F) to which the program would alleviate overcrowding in rural 
    residences inhabited by low- and very low-income persons and 
    families;
        (G) to which the program would minimize the use of grant funds 
    for administrative purposes; and
        (H) to which the owner agrees to meet the requirement of 
    subsection (e)(1)(B)(iv) of this section for a period longer than 5 
    years;

and shall assess the demonstrated capacity of the grantee to carry out 
the program as well as the financial feasibility of the program.
    (4) The amount of assistance provided under this section with 
respect to any housing shall be the least amount that the Secretary 
determines is necessary to provide, through the repair and 
rehabilitation, or replacement, of such housing, decent housing of 
modest design that is affordable for persons of low income.
    (5) A grantee may use housing preservation grant funds under this 
section for replacement housing only after providing documentation to 
the Secretary that--
        (A) the existing housing is in such poor condition that 
    rehabilitation is not economically feasible;
        (B) the owner of the housing lacks the income or repayment 
    ability necessary to qualify for a loan under section 1472 of this 
    title; and
        (C) the grantee will extend assistance to the owner of the 
    housing under terms that the owner can afford.

(e) Limitations on assistance; failure to implement required agreement

    (1) Assistance under this section may be provided with respect to 
rental or cooperative housing only if--
        (A) the owner has entered into such agreements with the 
    Secretary as may be necessary to assure compliance with the 
    requirements of this section, to assure the financial feasibility of 
    such housing, and to carry out the other provisions of this section;
        (B) the owner agrees--
            (i) to pass on to the tenants any reduction in the debt 
        service payments resulting from the assistance provided under 
        this section;
            (ii) not to convert the units to condominium ownership (or 
        in the case of a cooperative, to condominium ownership or any 
        form of cooperative ownership not eligible for assistance under 
        this section);
            (iii) not to refuse to rent a dwelling unit in the structure 
        to a family solely because the family is receiving or is 
        eligible to receive assistance under any Federal, State, or 
        local housing assistance program; and
            (iv) that the units repaired and rehabilitated with such 
        assistance will be occupied, or available for occupancy, by 
        persons of low income;

    during the 5-year period beginning on the date on which the units in 
    the housing are available for occupancy;
        (C) the unit of general local government or nonprofit 
    organization that receives the assistance certifies to the 
    satisfaction of the Secretary that the assistance will be made 
    available in conformity with Public Law 88-352 [42 U.S.C. 2000a et 
    seq.] and Public Law 90-284;
        (D) the owner agrees to enter into and abide by written leases 
    with the tenants, which leases shall provide that tenants may be 
    evicted only for good cause; and
        (E) the unit of general local government or nonprofit 
    organization will agree to supervise repairs and rehabilitation and 
    will agree to have a disinterested party inspect such repairs and 
    rehabilitation.

    (2) Assistance under this section provided with respect to any 
housing other than rental or cooperative housing may be provided only if 
the owner complies with the requirements set forth in subparagraph (E) 
of paragraph (1) and any other requirements established by the Secretary 
to carry out the purpose of this section.
    (3)(A) The Secretary shall provide that if the owner or his or her 
successors in interest fail to carry out the agreements described in 
subparagraphs (A) and (B) of paragraph (1) during the applicable period, 
the owner or his or her successors in interest shall make a payment to 
the Secretary of an amount that equals the total amount of assistance 
provided under this section with respect to such housing, plus interest 
thereon (without compounding), for each year and any fraction thereof 
that the assistance was outstanding, at a rate determined by the 
Secretary taking into account the average yield on outstanding 
marketable long-term obligations of the United States during the month 
preceding the date on which the assistance was made available.
    (B) Notwithstanding any other provision of law, any assistance 
provided under this section shall constitute a debt, which is payable in 
the case of any failure to carry out the agreements described in 
subparagraphs (A), (B), and (C) of paragraph (1), and shall be secured 
by the security instruments provided by the owner to the Secretary.

(f) Advance payments of assistance

    The Secretary shall provide for such advance payments of assistance 
under this section as the Secretary determines is necessary to 
effectively carry out the provisions of this section.

(g) Annual review and audit by Secretary of activities; adjustment, 
        etc., of resources; reallocation of amounts

    The Secretary shall, at least on an annual basis, make such review 
and audits as may be necessary or appropriate to determine whether the 
grantee has carried out its activities in a timely manner and in 
accordance with the requirements of this section, the degree to which 
the activities assisted benefitted low income families or persons and 
very low-income families or persons who lacked adequate housing, and 
whether the grantee has a continuing capacity to carry out the 
activities in a timely manner. The Secretary may adjust, reduce, or 
withdraw resources made available to grantees receiving assistance under 
this section, or take other action as appropriate in accordance with the 
findings of these reviews and audits. Any amounts which become available 
as a result of actions under this subsection shall be reallocated as 
housing preservation grants to such grantee or grantees as the Secretary 
may determine.

(h) Rules and regulations; delegation of authority

    (1) The Secretary is authorized to prescribe such rules and 
regulations and make such delegations of authority as he deems necessary 
to carry out this section within 90 days after November 30, 1983.
    (2) The Secretary shall, not later than the expiration of the 30-day 
period following February 5, 1988, issue regulations to carry out the 
program of grants under subsection (a)(2) of this section.

(i) National historic preservation objectives affected by rehabilitation 
        activities; establishment of procedures for determining 
        consonant purposes and measures

    The Secretary shall establish procedures which support national 
historic preservation objectives and which assure that, if any 
rehabilitation proposed to be assisted under this section would affect 
property that is included or is eligible for inclusion on the National 
Register of Historic Places, such activity shall not be undertaken 
unless (1) it will reasonably meet the standards for rehabilitation 
issued by the Secretary of the Interior and the appropriate State 
historic preservation officer is afforded the opportunity to comment on 
the specific rehabilitation plan, or (2) the Advisory Council on 
Historic Preservation is afforded an opportunity to comment on cases for 
which the recipient of assistance, in consultation with the State 
historic preservation officer, determines that the proposed 
rehabilitation activity cannot reasonably meet such standards or would 
adversely affect historic property as defined therein.

(July 15, 1949, ch. 338, title V, Sec. 533, as added Pub. L. 98-181, 
title V, Sec. 522, Nov. 30, 1983, 97 Stat. 1250; amended Pub. L. 100-
242, title III, Secs. 310, 316(g), Feb. 5, 1988, 101 Stat. 1896, 1898; 
Pub. L. 101-625, title VII, Sec. 717, Nov. 28, 1990, 104 Stat. 4296; 
Pub. L. 102-550, title VII, Secs. 706(1), 711, Oct. 28, 1992, 106 Stat. 
3835, 3840; Pub. L. 105-276, title V, Sec. 550(e), Oct. 21, 1998, 112 
Stat. 2610; Pub. L. 105-362, title I, Sec. 101(h), Nov. 10, 1998, 112 
Stat. 3281.)

                       References in Text

    Public Law 88-352, referred to in subsec. (e)(1)(C), is Pub. L. 88-
352, July 2, 1964, 78 Stat. 241, as amended, known as the Civil Rights 
Act of 1964, which is classified principally to subchapters II to IX 
(Sec. 2000a et seq.) of chapter 21 of this title. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 2000a of this title and Tables.
    Public Law 90-284, referred to in subsec. (e)(1)(C), is Pub. L. 90-
284, Apr. 11, 1968, 82 Stat. 73, as amended, known as the Civil Rights 
Act of 1968. For complete classification of this Act to the Code, see 
Short Title note set out under section 3601 of this title and Tables.


                               Amendments

    1998--Subsec. (a). Pub. L. 105-276 substituted ``tenant-based 
assistance as provided under section 1437f of this title'' for 
``assistance payments as provided by section 1437f(o) of this title'' in 
concluding provisions.
    Subsec. (j). Pub. L. 105-362 struck out subsec. (j) which read as 
follows: ``Not later than 180 days after the close of each fiscal year 
in which assistance under this section is furnished, the Secretary shall 
submit to the Congress a report which shall contain--
        ``(1) a description of the progress made in accomplishing the 
    objectives of this section; and
        ``(2) a summary of the use of such funds during the preceding 
    year.
The Secretary shall require grantees under this section to submit to him 
such reports, and other information as may be necessary in order for the 
Secretary to make the report required by this subsection.''
    1992--Subsec. (a). Pub. L. 102-550, Secs. 706(1), 711(1)(B), in 
concluding provisions, inserted reference to section 1490r of this title 
and ``or replaced'' after ``rehabilitated''.
    Subsec. (a)(1), (2). Pub. L. 102-550, Sec. 711(1)(A), inserted ``or 
replace'' after ``rehabilitate''.
    Subsec. (b). Pub. L. 102-550, Sec. 711(2)(A), substituted 
``Preservation programs'' for ``Rehabilitation programs'' in 
introductory provisions.
    Subsec. (b)(2). Pub. L. 102-550, Sec. 711(2)(E), added par. (2). 
Former par. (2) redesignated (3).
    Subsec. (b)(3). Pub. L. 102-550, Sec. 711(2)(D), redesignated par. 
(2) as (3). Former par. (3) redesignated (4).
    Pub. L. 102-550, Sec. 711(2)(B), inserted ``or replacement'' after 
``rehabilitation'' in two places.
    Subsec. (b)(4). Pub. L. 102-550, Sec. 711(2)(D), redesignated par. 
(3) as (4). Former par. (4) redesignated (5).
    Pub. L. 102-550, Sec. 711(2)(C), substituted ``repair, 
rehabilitation, and replacement'' for ``repair and rehabilitation''.
    Subsec. (b)(5) to (7). Pub. L. 102-550, Sec. 711(2)(D), redesignated 
pars. (4) to (6) as (5) to (7), respectively.
    Subsec. (c)(1). Pub. L. 102-550, Sec. 711(3), substituted ``grant 
funds under this section'' for ``rehabilitation grant funds'' in 
introductory provisions.
    Subsec. (d)(1). Pub. L. 102-550, Sec. 711(4)(A), substituted 
``preservation program'' for ``rehabilitation program''.
    Subsec. (d)(3)(A), (B), (D). Pub. L. 102-550, Sec. 711(4)(B), 
substituted ``repair, rehabilitation, and replacement'' for ``repair and 
rehabilitation''.
    Subsec. (d)(4). Pub. L. 102-550, Sec. 711(4)(C), inserted ``, or 
replacement,'' after ``rehabilitation''.
    Subsec. (d)(5). Pub. L. 102-550, Sec. 711(4)(D), added par. (5).
    1990--Subsec. (c)(1). Pub. L. 101-625, Sec. 717(a), inserted at end 
``Funds obligated, but subsequently unspent and deobligated, may remain 
available, to the extent provided in appropriations Acts, for use as 
housing preservation grants in ensuing fiscal years.''
    Subsec. (g). Pub. L. 101-625, Sec. 717(b), substituted last sentence 
for ``Any amounts which became available as a result of actions under 
this subsection shall be reallocated in the year in which they become 
available to such grantee or grantees as the Secretary may determine.''
    1988--Subsec. (e)(1)(B)(iii). Pub. L. 100-242, Sec. 316(g)(1), 
inserted ``to'' before ``refuse''.
    Subsec. (g). Pub. L. 100-242, Sec. 316(g)(2), substituted ``low 
income families or persons and very low-income families or persons'' for 
``persons of low income and very low-income''.
    Subsec. (h). Pub. L. 100-242, Sec. 310, designated existing 
provisions as par. (1) and added par. (2).


                    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.


                Rural Rental Rehabilitation Demonstration

    Pub. L. 100-242, title III, Sec. 311, Feb. 5, 1988, 101 Stat. 1896, 
as amended by Pub. L. 100-628, title X, Sec. 1044, Nov. 7, 1988, 102 
Stat. 3273; Pub. L. 101-137, Sec. 7(d), Nov. 3, 1989, 103 Stat. 826; 
Pub. L. 101-144, title II, Nov. 9, 1989, 103 Stat. 846; Pub. L. 105-362, 
title VII, Sec. 701(f), Nov. 10, 1998, 112 Stat. 3287, directed 
Secretary of Housing and Urban Development to carry out a rural rental 
rehabilitation demonstration program, provided funding for program, and 
terminated authority for such program after Sept. 30, 1991.

                  Section Referred to in Other Sections

    This section is referred to in sections 1437f, 1479, 1483, 1490r, 
4851b of this title; title 7 section 2204f.
