42 USC CHAPTER 130, SUBCHAPTER IV: HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY AND SINGLE FAMILY HOMES

From Title 42—THE PUBLIC HEALTH AND WELFARECHAPTER 130—NATIONAL AFFORDABLE HOUSING

SUBCHAPTER IV—HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY AND SINGLE FAMILY HOMES

Subchapter Referred to in Other Sections

This subchapter is referred to in sections 1437f, 3535 of this title; title 12 sections 1831q, 1834a.

§12870. Authorization of appropriations

(a) Fiscal year 1993

There are authorized to be appropriated for grants under this title ¹ $855,000,000 for fiscal year 1993, of which—

(1) $285,000,000 shall be available for activities authorized under title III of the United States Housing Act of 1937 [42 U.S.C. 1437aaa et seq.], of which up to $4,500,000 of any amounts appropriated may be made available for technical assistance to potential applicants, applicants and recipients of assistance under this ² title;

(2) $285,000,000 shall be available for activities authorized under part A of this subchapter, of which up to $3,250,000 of any amounts appropriated may be made available for technical assistance to potential applicants, applicants and recipients of assistance under this ² part; and

(3) $285,000,000 shall be available for activities under part B of this subchapter, of which up to $2,250,000 of any amounts appropriated may be made available for technical assistance to potential applicants, applicants and recipients of assistance under this ² part.

Of the amounts appropriated pursuant to this subsection, up to $40,000,000, but not less than 5 percent, shall be available for activities authorized under part C of this subchapter. Any amount appropriated pursuant to this subsection shall remain available until expended.

(b) Fiscal year 1994

There are authorized to be appropriated for grants under this title ¹ $883,641,000 for fiscal year 1994, of which—

(1) $294,547,000 shall be available for activities authorized under title III of the United States Housing Act of 1937 [42 U.S.C. 1437aaa et seq.], up to $4,500,000 of which may be made available for technical assistance to potential applicants, applicants and recipients of assistance under this ² title;

(2) $294,547,000 shall be available for activities authorized under part A of this subchapter, up to $3,250,000 of which may be made available for technical assistance to potential applicants, applicants and recipients of assistance under this ² part; and

(3) $294,547,000 shall be available for activities under part B of this subchapter, up to $2,250,000 of which may be made available for technical assistance to potential applicants, applicants and recipients of assistance under this ² part.

Of the amounts appropriated pursuant to this subsection, up to $41,680,000, but not less than 5 percent, shall be available for activities authorized under part C of this subchapter. Any amount appropriated pursuant to this subsection shall remain available until expended.

(c) Technical assistance

Technical assistance made available under title III of the United States Housing Act of 1937 [42 U.S.C. 1437aaa et seq.] or part A of this subchapter or part B of this subchapter may include, but shall not be limited to, training, clearinghouse services, the collection, processing and dissemination of program information useful for local and national program management, and provision of seed money. Such technical assistance may be made available directly, or indirectly under contracts and grants, as appropriate. In any fiscal year, no single applicant, potential applicant, or recipient under title III of the United States Housing Act of 1937, or part A of this subchapter or part B of this subchapter may receive technical assistance in an amount exceeding 20 percent of the total amount made available for technical assistance under such title or part for the fiscal year.

(Pub. L. 101–625, title IV, §402, as added Pub. L. 102–550, title I, §181(a)(1), Oct. 28, 1992, 106 Stat. 3734.)

References in Text

This title, referred to in introductory provisions of subsecs. (a) and (b), is title IV of Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4148, known as the Homeownership and Opportunity Through HOPE Act, which enacted this subchapter and subchapter II–A (§1437aaa et seq.) of chapter 8 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 title IV to the Code, see Short Title note set out under section 1437aaa of this title and Tables.

The United States Housing Act of 1937, referred to in subsecs. (a)(1), (b)(1), and (c), is act Sept. 1, 1937, ch. 896, as revised generally by Pub. L. 93–383, title II, §201(a), Aug. 22, 1974, 88 Stat. 653. Title III of the Act is classified generally to subchapter II–A (§1437aaa et seq.) of chapter 8 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1437 of this title and Tables.

GAO Audit of Technical Assistance Contracts

Section 181(a)(3) of Pub. L. 102–550 provided that: "The Comptroller General of the United States shall conduct an audit of all of the technical assistance contracts awarded for fiscal years 1993 and 1994 pursuant to section 402 of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 12870]. The Comptroller General shall submit a report to the Congress describing the results of such audit not later than September 30, 1994."

Section Referred to in Other Sections

This section is referred to in section 12899g of this title.

¹ See References in Text note below.

² So in original. Probably should be "such".

Part A—HOPE for Homeownership of Multifamily Units

Part Referred to in Other Sections

This part is referred to in sections 12870, 12899c, 12899d of this title; title 12 sections 1701z–11, 1709.

§12871. Program authority

(a) In general

The Secretary is authorized to make—

(1) planning grants to enable applicants to develop homeownership programs; and

(2) implementation grants to enable applicants to carry out homeownership programs.

(b) Authority to reserve housing assistance

In connection with a grant under this part, the Secretary may reserve authority to provide assistance under section 1437f of this title to the extent necessary to provide rental assistance for a nonpurchasing tenant who resides in the project on the date the Secretary approves the application for an implementation grant, for use by the tenant in another project.

(Pub. L. 101–625, title IV, §421, Nov. 28, 1990, 104 Stat. 4162; Pub. L. 102–550, title I, §181(a)(2)(B)(i), Oct. 28, 1992, 106 Stat. 3735.)

References in Text

This part, referred to in subsec. (b), was in the original "this subtitle", meaning subtitle B (§§421–431) of title IV of Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4162, which enacted this part and amended section 1709 of Title 12, Banks and Banking.

Amendments

1992—Subsec. (c). Pub. L. 102–550 struck out subsec. (c) which read as follows: "Authorization of Appropriations.—There is authorized to be appropriated for grants under this part $51,000,000 for fiscal year 1991 and $280,000,000 for fiscal year 1992. Any amounts appropriated pursuant to this subsection shall remain available until expended."

§12872. Planning grants

(a) Grants

The Secretary is authorized to make planning grants to applicants for the purpose of developing homeownership programs under this part. The amount of a planning grant under this section may not exceed $200,000, except that the Secretary may for good cause approve a grant in a higher amount.

(b) Eligible activities

Planning grants may be used for activities to develop homeownership programs (which may include programs for cooperative ownership), including—

(1) development of resident management corporations and resident councils;

(2) training and technical assistance of applicants related to the development of a specific homeownership program;

(3) studies of the feasibility of a homeownership program;

(4) inspection for lead-based paint hazards, as required by section 4822(a) of this title;

(5) preliminary architectural and engineering work;

(6) tenant and homebuyer counseling and training;

(7) planning for economic development, job training, and self-sufficiency activities that promote economic self-sufficiency for homebuyers and homeowners under the homeownership program;

(8) development of security plans; and

(9) preparation of an application for an implementation grant under this part.

(c) Application

(1) Form and procedures

An application for a planning grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2) Minimum requirements

The Secretary shall require that an application contain at a minimum—

(A) a request for a planning grant, specifying the activities proposed to be carried out, the schedule for completing the activities, the personnel necessary to complete the activities, and the amount of the grant requested;

(B) a description of the applicant and a statement of its qualifications;

(C) identification and description of the eligible property involved, and a description of the composition of the tenants, including family size and income;

(D) a certification by the public official responsible for submitting the comprehensive housing affordability strategy under section 12705 of this title that the proposed activities are consistent with the approved housing strategy of the State or unit of general local government within which the project is located (or, during the first 12 months after November 28, 1990, that the application is consistent with such other existing State or local housing plan or strategy that the Secretary shall determine to be appropriate); and

(E) a certification that the applicant will comply with the requirements of the Fair Housing Act [42 U.S.C. 3601 et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], section 504 of the Rehabilitation Act of 1973 [29 U.S.C. 794], and the Age Discrimination Act of 1975 [42 U.S.C. 6101 et seq.], and will affirmatively further fair housing.

(d) Selection criteria

The Secretary shall, by regulation, establish selection criteria for a national competition for assistance under this section, which shall include—

(1) the qualifications or potential capabilities of the applicant;

(2) the extent of tenant interest in the development of a homeownership program for the property;

(3) the potential of the applicant for developing a successful and affordable homeownership program and the suitability of the property for homeownership;

(4) national geographic diversity among housing for which applicants are selected to receive assistance; and

(5) such other factors that the Secretary shall require that (in the determination of the Secretary) are appropriate for purposes of carrying out the program established by this part in an effective and efficient manner.

(Pub. L. 101–625, title IV, §422, Nov. 28, 1990, 104 Stat. 4162; Pub. L. 102–550, title X, §1012(i)(1), Oct. 28, 1992, 106 Stat. 3906.)

References in Text

The Fair Housing Act, referred to in subsec. (c)(2)(E), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, as amended, which is classified principally to subchapter I (§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.

The Civil Rights Act of 1964, referred to in subsec. (c)(2)(E), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241, as amended. Title VI of the Act is classified generally to subchapter V (§2000d 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.

The Age Discrimination Act of 1975, referred to in subsec. (c)(2)(E), is title III of Pub. L. 94–135, Nov. 28, 1975, 89 Stat. 728, as amended, which is classified generally to chapter 76 (§6101 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 6101 of this title and Tables.

Amendments

1992—Subsec. (b)(4) to (9). Pub. L. 102–550 added par. (4) and redesignated former pars. (4) to (8) as (5) to (9), respectively.

Section Referred to in Other Sections

This section is referred to in sections 12873, 12875 of this title.

§12873. Implementation grants

(a) Grants

The Secretary is authorized to make implementation grants to applicants for the purpose of carrying out homeownership programs approved under this part.

(b) Eligible activities

Implementation grants may be used for activities to carry out homeownership programs (including programs for cooperative ownership), including the following activities:

(1) Architectural and engineering work.

(2) Acquisition of the eligible property for the purpose of transferring ownership to eligible families in accordance with a homeownership program that meets the requirements under this part.

(3) Rehabilitation of any property covered by the homeownership program, in accordance with standards established by the Secretary.

(4) Abatement of lead-based paint hazards, as required by section 4822(a) of this title.

(5) Administrative costs of the applicant, which may not exceed 15 percent of the amount of the assistance provided under this section.

(6) Development of resident management corporations and resident management councils, but only if the applicant has not received assistance under section 12872 ¹ of this title for such activities.

(7) Counseling and training of homebuyers and homeowners under the homeownership program.

(8) Relocation of tenants who elect to move.

(9) Any necessary temporary relocation of tenants during rehabilitation.

(10) Planning for establishment of for- or not-for-profit small businesses by or on behalf of residents, job training, and other activities that promote economic self-sufficiency of homebuyers and homeowners of the property covered by the homeownership program and economic development of the neighborhood.

(11) Funding of operating expenses and replacement reserves of the property covered by the homeownership program.

(12) Legal fees.

(13) Defraying costs for the ongoing training needs of the recipient that are related to developing and carrying out the homeownership program.

(14) Economic development activities that promote economic self-sufficiency of homebuyers, residents, and homeowners under the homeownership program.

(c) Matching funding

(1) In general

Each recipient shall assure that contributions equal to not less than 33 percent of the grant amounts made available under this section, excluding any amounts provided for post-sale operating expense, shall be provided from non-Federal sources to carry out the homeownership program.

(2) Form

Such contributions may be in the form of—

(A) cash contributions from non-Federal resources, which may not include funds from a grant made under section 5306(b) or section 5306(d) of this title;

(B) payment of administrative expenses, as defined by the Secretary, from non-Federal resources, including funds from a grant made under section 5306(b) or section 5306(d) of this title;

(C) the value of taxes, fees, or other charges that are normally and customarily imposed but are waived, foregone, or deferred in a manner that facilitates the implementation of a homeownership program assisted under this part;

(D) the value of land or other real property as appraised according to procedures acceptable to the Secretary;

(E) the value of investment in on-site and off-site infrastructure required for a homeownership program assisted under this part; or

(F) such other in-kind contributions as the Secretary may approve.

Contributions for administrative expenses shall be recognized only up to an amount equal to 7 percent of the total amount of grants made available under this section.

(d) ² Application

(1) Form and procedure

An application for an implementation grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2) Minimum requirements

The Secretary shall require that an application contain at a minimum—

(A) a request for an implementation grant, specifying the amount of the grant requested and its proposed uses;

(B) if applicable, an application for assistance under section 1437f of this title, specifying the proposed uses of such assistance and the period during which the assistance will be needed;

(D) a description of the proposed homeownership program, consistent with section 12874 ³ of this title and the other requirements of this part, specifying the activities proposed to be carried out and their estimated costs, identifying reasonable schedules for carrying it out, and demonstrating the program will comply with the affordability requirements under section 12874(b) ³ of this title;

(E) identification and description of the property involved, and a description of the composition of the tenants, including family size and income;

(F) a description of and commitment for the resources that are expected to be made available to provide the matching funding required under subsection (c) of this section and of other resources that are expected to be made available in support of the homeownership program;

(G) identification and description of the financing proposed for any (i) rehabilitation and (ii) acquisition (I) of the property, by an entity for transfer to eligible families, and (II) by eligible families of ownership interests in, or shares representing, units in the project;

(H) the proposed sales price, the basis for such price determination, and terms to an entity, if any, that will purchase the property for resale to eligible families;

(I) the proposed sales prices, if any, and terms to eligible families;

(J) any proposed restrictions on the resale of units under a homeownership program;

(K) identification and description of the entity that will operate and manage the property;

(L) a certification by the public official responsible for submitting the comprehensive housing affordability strategy under section 12705 of this title that the proposed activities are consistent with the approved housing strategy of the State or unit of general local government within which the project is located (or, during the first 12 months after November 28, 1990, that the application is consistent with such other existing State or local housing plan or strategy that the Secretary shall determine to be appropriate); and

(M) a certification that the applicant will comply with the requirements of the Fair Housing Act [42 U.S.C. 3601 et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], section 504 of the Rehabilitation Act of 1973 [29 U.S.C. 794], and the Age Discrimination Act of 1975 [42 U.S.C. 6101 et seq.], and will affirmatively further fair housing.

(d) ⁴ Selection criteria

The Secretary shall establish selection criteria for assistance under this section, which shall include—

(1) the qualifications or potential capabilities of the applicant;

(2) the feasibility of the homeownership program;

(3) the extent of tenant interest in the development of a homeownership program for the property;

(4) the potential for developing an affordable homeownership program and the suitability of the property for homeownership;

(5) national geographic diversity among housing for which applicants are selected to receive assistance;

(6) the extent to which a sufficient supply of affordable rental housing of the type assisted under this title ⁵ exists in the locality, so that the implementation of the homeownership program will not appreciably reduce the number of such rental units available to residents currently residing in such units or eligible for residency in such units; and

(7) such other factors as the Secretary determines to be appropriate for purposes of carrying out the program established by the ⁶ part in an effective and efficient manner.

(e) Approval

The Secretary shall notify each applicant, not later than 6 months after the date of the submission of the application, whether the application is approved or not approved. The Secretary may approve the application for an implementation grant with a statement that the application for the section 8 [42 U.S.C. 1437f] assistance for residents of the project not purchasing units is conditionally approved, subject to the availability of appropriations in subsequent fiscal years.

(Pub. L. 101–625, title IV, §423, Nov. 28, 1990, 104 Stat. 4163; Pub. L. 102–550, title X, §1012(i)(2), Oct. 28, 1992, 106 Stat. 3906.)

References in Text

Section 12872 of this title, referred to in subsec. (b)(6), was in the original "section 322" and was translated as reading "section 422", meaning section 422 of Pub. L. 101–625, to reflect the probable intent of Congress. Section 322 of Pub. L. 101–625 amended section 1708 of Title 12, Banks and Banking.

Section 12874 of this title and section 12874(b) of this title, referred to in subsec. (d)(2)(D), were in the original "section 324" and "section 324(b)", respectively, and were translated as reading "section 424" and "section 424(b)", respectively, meaning section 424 of Pub. L. 101–625, to reflect the probable intent of Congress. Section 324 of Pub. L. 101–625, which proposed an amendment to section 1709 of Title 12, never took effect pursuant to section 351 of Pub. L. 101–625. Such section 324 did not contain a subsec. (b).

The Fair Housing Act, referred to in subsec. (d)(2)(M), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, as amended, which is classified principally to subchapter I (§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.

The Civil Rights Act of 1964, referred to in subsec. (d)(2)(M), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241, as amended. Title VI of the Act is classified generally to subchapter V (§2000d 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.

The Age Discrimination Act of 1975, referred to in subsec. (d)(2)(M), is title III of Pub. L. 94–135, Nov. 28, 1975, 89 Stat. 728, as amended, which is classified generally to chapter 76 (§6101 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 6101 of this title and Tables.

This title, referred to in subsec. (d)(6), means title IV of Pub. L. 101–625, known as the Homeownership and Opportunity Through HOPE Act, and probably should have been "this subtitle", meaning subtitle B (§§421–431) of title IV of Pub. L. 101–625, which is classified principally to this part. For complete classification of title IV of Pub. L. 101–625 to the Code, see Short Title note set out under section 1437aaa of this title and Tables.

Amendments

1992—Subsec. (b)(4) to (14). Pub. L. 102–550 added par. (4) and redesignated former pars. (4) to (13) as (5) to (14), respectively.

Section Referred to in Other Sections

This section is referred to in section 12875 of this title.

¹ See References in Text note below.

² So in original. Two subsecs. (d) have been enacted.

³ See References in Text note below.

⁴ So in original. Two subsecs. (d) have been enacted.

⁵ See References in Text note below.

⁶ So in original. Probably should be "this".

§12874. Homeownership program requirements

(a) In general

A homeownership program under this part shall provide for acquisition by eligible families of ownership interest in, or shares representing, the units in an eligible property under any arrangement determined by the Secretary to be appropriate, such as cooperative ownership (including limited equity cooperative ownership) and fee simple ownership (including condominium ownership), for occupancy by the eligible families.

(b) Affordability

A homeownership program under this part shall provide for the establishment of sales prices (including principal, insurance, taxes, and interest and closing costs) for initial acquisition of the property, and for sales to eligible families, such that the eligible family shall not be required to expend more than 30 percent of the adjusted income of the family per month to complete a sale under the homeownership program.

(c) Plan

A homeownership program under this part shall provide, and include a plan, for—

(1) identifying and selecting eligible families to participate in the homeownership program;

(2) providing relocation assistance to families who elect to move;

(3) ensuring continued affordability by tenants, homebuyers, and homeowners in the property; and

(4) providing ongoing training and counseling for homebuyers and homeowners.

(d) Acquisition and rehabilitation limitation

Acquisition or rehabilitation of a property under a homeownership program under this part may not consist of acquisition or rehabilitation of less than all of the units in the property. The provisions of this subsection may be waived upon a finding by the Secretary that the sale of less than all the buildings in a project is feasible and will not result in a hardship to any tenants of the project who are not included in the homeownership program.

(e) Financing

(1) In general

The application shall identify and describe the proposed financing for (A) any rehabilitation, and (B) acquisition (i) of the project, where applicable, by an entity for transfer to eligible families, and (ii) by eligible families of ownership interests in, or shares representing, units in the project. Financing may include use of the implementation grant, sale for cash, or other sources of financing (subject to applicable requirements), including conventional mortgage loans and mortgage loans insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.].

(2) Prohibition against pledges

Property transferred under this part shall not be pledged as collateral for debt or otherwise encumbered except when the Secretary determines that—

(A) such encumbrance will not threaten the long-term availability of the property for occupancy by low-income families;

(B) neither the Federal Government nor the public housing agency will be exposed to undue risks related to action that may have to be taken pursuant to paragraph (3);

(D) the proceeds of such encumbrance will be used only to meet housing standards in accordance with subsection (f) of this section or to make such additional capital improvements as the Secretary determines to be consistent with the purposes of this part.

(3) Opportunity to cure

Any lender that provides financing in connection with a homeownership program under this part shall give the public housing agency, resident management corporation, individual owner, or other appropriate entity a reasonable opportunity to cure a financial default before foreclosing on the property, or taking other action as a result of the default.

(f) Housing quality standards

The application shall include a plan ensuring that the unit—

(1) will be free from any defects that pose a danger to health or safety before transfer of an ownership interest in, or shares representing, a unit to an eligible family; and

(2) will, not later than 2 years after the transfer to an eligible family, meet minimum housing standards established by the Secretary for the purpose of this title.¹

(g) Protection of nonpurchasing families

(1) In general

No tenant residing in a dwelling unit in a property on the date the Secretary approves an application for an implementation grant may be evicted by reason of a homeownership program approved under this part.

(2) Rental assistance

If a tenant decides not to purchase a unit, or is not qualified to do so, the Secretary shall, subject to the availability of appropriations, ensure that rental assistance under section 1437f of this title is available for use by each otherwise qualified tenant in that or another property.

(3) Relocation assistance

The recipient shall also inform each such tenant that if the tenant chooses to move, the recipient will pay relocation assistance in accordance with the approved homeownership program.

(Pub. L. 101–625, title IV, §424, Nov. 28, 1990, 104 Stat. 4166.)

References in Text

The National Housing Act, referred to in subsec. (e)(1), is act June 27, 1934, ch. 847, 48 Stat. 1246, as amended. Title II of the Act is classified principally to subchapter II (§1707 et seq.) of chapter 13 of Title 12, Banks and Banking. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables.

This title, referred to in subsec. (f)(2), is title IV of Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4148, known as the Homeownership and Opportunity Through HOPE Act, which enacted this subchapter and subchapter II–A (§1437aaa et seq.) of chapter 8 of this title, amended sections 1437c, 1437f, 1437l, 1437p, 1437r, and 1437s of this title and section 1709 of Title 12, and enacted provisions set out as notes under sections 1437c, 1437aa, and 1437aaa of this title. For complete classification of title IV to the Code, see Short Title note set out under section 1437aaa of this title and Tables.

Section 1437f of this title, referred to in subsec. (g)(2), was in the original "section 8", and was translated as reading "section 8 of the United States Housing Act of 1937" to reflect the probable intent of Congress.

Section Referred to in Other Sections

This section is referred to in section 12873 of this title.

¹ See References in Text note below.

§12875. Other program requirements

(a) Preferences

In selecting eligible families for homeownership, the recipient shall give a first preference to otherwise qualified current tenants and a second preference to otherwise qualified eligible families who have completed participation in an economic self-sufficiency program specified by the Secretary.

(b) Cost limitations

The Secretary may establish cost limitations on eligible activities under this part, subject to the provisions of this part.

(c) Use of proceeds from sales to eligible families

The entity that transfers ownership interests in, or shares representing, units to eligible families, or another entity specified in the approved application, shall use the proceeds, if any, from the initial sale for costs of the homeownership program, including operating expenses, improvements to the project, business opportunities for low-income families, supportive services related to the homeownership program, additional homeownership opportunities, and other activities approved by the Secretary.

(d) Restrictions on resale by homeowners

(1) In general

(A) Transfer permitted

A homeowner under a homeownership program may transfer the homeowner's ownership interest in, or shares representing, the unit, except that a homeownership program may establish restrictions on the resale of units under the program.

(B) Right to purchase

Where a resident management corporation, resident council, or cooperative has jurisdiction over the unit, the corporation, council, or cooperative shall have the right to purchase the ownership interest in, or shares representing, the unit from the homeowner for the amount specified in a firm contract between the homeowner and a prospective buyer. If such an entity does not have jurisdiction over the unit or elects not to purchase and if the prospective buyer is not a low-income family, the public housing agency or the implementation grant recipient shall have the right to purchase the ownership interest in, or shares representing, the unit for the same amount.

(C) Promissory note required

The homeowner shall execute a promissory note equal to the difference between the market value and the purchase price, payable to the public housing agency or other entity designated in the homeownership plan, together with a mortgage securing the obligation of the note.

(2) 6 years or less

In the case of a transfer within 6 years of the acquisition under the program, the homeownership program shall provide for appropriate restrictions to assure that an eligible family may not receive any undue profit. The plan shall provide for limiting the family's consideration for its interest in the property to the total of—

(A) the contribution to equity paid by the family;

(B) the value, as determined by such means as the Secretary shall determine through regulation, of any improvements installed at the expense of the family during the family's tenure as owner; and

(C) 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 entity that transfers ownership interests in, or shares representing, units to eligible families (or another entity specified in the approved application), at the time of initial sale, and applied against the contribution to equity.

Such an entity may, at the time of initial sale, enter into an agreement with the family to set a maximum amount which this appreciation may not exceed.

(3) 6–20 years

In the case of a transfer during the period beginning 6 years after the acquisition and ending 20 years after the acquisition, the homeownership program shall provide for the recapture by the Secretary or the program of an amount equal to the amount of the declining balance on the note described in paragraph (1)(C).

(4) Use of recaptured funds

Fifty percent of any portion of the net sales proceeds that may not be retained by the homeowner under the plan approved pursuant to this subsection shall be paid to the entity that transferred ownership interests in, or shares representing, units to eligible families, or another entity specified in the approved application, for use for improvements to the project, business opportunities for low-income families, supportive services related to the homeownership program, additional homeownership opportunities, and other activities approved by the Secretary. The remaining 50 percent shall be returned to the Secretary for use under this part, subject to limitations contained in appropriations Acts. Such entity shall keep and make available to the Secretary all records necessary to calculate accurately payments due the Secretary under this subsection.

(e) Third party rights

The requirements under this part regarding quality standards, resale, or transfer of the ownership interest of a homeowner shall be judicially enforceable against the grant recipient with respect to actions involving rehabilitation, and against purchasers of property under this subsection or their successors in interest with respect to other actions by affected low-income families, resident management corporations, resident councils, public housing agencies, and any agency, corporation, or authority of the United States Government. The parties specified in the preceding sentence shall be entitled to reasonable attorney fees upon prevailing in any such judicial action.

(f) Dollar limitation on economic development activities

Not more than an aggregate of $250,000 from amounts made available under sections 12872 and 12873 of this title may be used for economic development activities under sections 12872(b)(6) and 12873(b)(9) ¹ of this title for any project.

(g) Timely homeownership

Recipients shall transfer ownership of the property to tenants within a specified period of time that the Secretary determines to be reasonable. During the interim period when the property continues to be operated and managed as rental housing, the recipient shall utilize written tenant selection policies and criteria that are approved by the Secretary as consistent with the purpose of improving housing opportunities for low-income families. The recipient shall promptly notify in writing any rejected applicant of the grounds for any rejection.

(h) Records and audit of recipients of assistance

(1) In general

Each recipient shall keep such records as may be reasonably necessary to fully disclose the amount and the disposition by such recipient of the proceeds of assistance received under this part (and any proceeds from financing obtained or sales under subsections (c) and (d) of this section), the total cost of the homeownership program in connection with which such assistance is given or used, and the amount and nature of that portion of the program supplied by other sources, and such other sources as will facilitate an effective audit.

(2) Access by Secretary

The Secretary shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipient that are pertinent to assistance received under this part.

(3) Access by Comptroller General

The Comptroller General of the United States, or any of the duly authorized representatives of the Comptroller General, shall also have access for the purpose of audit and examination to any books, documents, papers, and records of the recipient that are pertinent to assistance received under this part.

(i) Certain entities not eligible

Any entity that assumes, as determined by the Secretary, a mortgage covering eligible property in connection with the acquisition of the property from an owner under this section must comply with any low-income affordability restrictions for the remaining term of the mortgage. This requirement shall only apply to an entity, such as a cooperative association, that, as determined by the Secretary, intends to own the housing on a permanent basis.

(Pub. L. 101–625, title IV, §425, Nov. 28, 1990, 104 Stat. 4168.)

References in Text

Sections 12872(b)(6) and 12873(b)(9) of this title, referred to in subsec. (f), were redesignated sections 12872(b)(7) and 12873(b)(10) of this title, respectively, by Pub. L. 102–550, title X, §1012(i), Oct. 28, 1992, 106 Stat. 3906.

¹ See References in Text note below.

§12876. Definitions

For purposes of this part:

(1) The term "applicant" means the following entities that may represent the tenants of the housing:

(A) A resident management corporation established in accordance with the requirements of the Secretary under section 1437r of this title.

(B) A resident council.

(D) A public or private nonprofit organization.

(E) A public body (including an agency or instrumentality thereof).

(F) A public housing agency (including an Indian housing authority).

(G) A mutual housing association.

(2) The term "eligible family" means a family or individual—

(A) who is a tenant of the eligible property on the date the Secretary approves an implementation grant; or

(B) whose income does not exceed 80 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families.

(3) The term "eligible property" means a multifamily rental property, containing 5 or more units, that is—

(A) owned or held by the Secretary;

(B) financed by a loan or mortgage held by the Secretary or insured by the Secretary;

(C) determined by the Secretary to have serious physical or financial problems under the terms of an insurance or loan program administered by the Secretary; or

(D) owned or held by the Secretary of Agriculture, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, the Secretary of Defense, the Secretary of Transportation, the General Services Administration, any other Federal agency, or a State or local government or an agency or instrumentality thereof.

(4) The term "homeownership program" means a program for homeownership under this part.

(5) The term "Indian housing authority" has the meaning given such term in section 1437a(b)(11) ¹ of this title.

(6) The term "low-income family" has the meaning given such term in section 1437a(b)(2) of this title.

(7) The term "public housing agency" has the meaning given such term in section 1437a(b)(6) of this title.

(8) The term "recipient" means an applicant approved to receive a grant under this title ¹ or such other entity specified in the approved application that will assume the obligations of the recipient under this part.

(9) The term "resident council" means any incorporated nonprofit organization or association that—

(A) is representative of the tenants of the housing;

(B) adopts written procedures providing for the election of officers on a regular basis; and

(10) The term "Secretary" means the Secretary of Housing and Urban Development.

(Pub. L. 101–625, title IV, §426, Nov. 28, 1990, 104 Stat. 4170; Pub. L. 102–550, title I, §181(d), (e), (h), Oct. 28, 1992, 106 Stat. 3735, 3736.)

References in Text

Section 1437a(b)(11) of this title, referred to in par. (5), was repealed by Pub. L. 104–330, title V, §501(b)(1)(D), Oct. 26, 1996, 110 Stat. 4041, and a new section 1437a(b)(11), defining "public housing agency plan", was enacted by Pub. L. 105–276, title V, §506(4), Oct. 21, 1998, 112 Stat. 2524.

This title, referred to in par. (8), means title IV of Pub. L. 101–625, known as the Homeownership and Opportunity Through HOPE Act, and probably should have been "this subtitle", meaning subtitle B (§§421–431) of title IV of Pub. L. 101–625, which is classified principally to this part. For complete classification of title IV of Pub. L. 101–625 to the Code, see Short Title note set out under section 1437aaa of this title and Tables.

Amendments

1992—Par. (1)(G). Pub. L. 102–550, §181(d), added subpar. (G).

Par. (3)(D). Pub. L. 102–550, §181(e), (h), inserted "the Federal Deposit Insurance Corporation, the Secretary of Defense, the Secretary of Transportation, the General Services Administration, any other Federal agency," after "Corporation," and "or an agency or instrumentality thereof" before period at end.

¹ See References in Text note below.

§12877. Exemption

Eligible property covered by a homeownership program approved under this part shall not be subject to—

(1) the Low-Income Housing Preservation and Resident Homeownership Act of 1990 [12 U.S.C. 4101 et seq.], or

(2) the requirements of section 1701z–11 of title 12 applicable to the sale of projects either at foreclosure or after acquisition by the Secretary.

(Pub. L. 101–625, title IV, §427, Nov. 28, 1990, 104 Stat. 4171.)

References in Text

The Low-Income Housing Preservation and Resident Homeownership Act of 1990, referred to in par. (1), is title II of Pub. L. 100–242, as amended by Pub. L. 101–625, title VI, §601(a), Nov. 28, 1990, 104 Stat. 4249, which is classified principally to chapter 42 (§4101 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 4101 of Title 12 and Tables.

§12878. Limitation on selection criteria

In establishing criteria for selecting applicants to receive assistance under this part, the Secretary may not establish any selection criterion or criteria that grant or deny such assistance to an applicant (or have the effect of granting or denying assistance) based on the implementation, continuation, or discontinuation of any public policy, regulation, or law of any jurisdiction in which the applicant or project is located.

(Pub. L. 101–625, title IV, §428, Nov. 28, 1990, 104 Stat. 4171.)

§12879. Implementation

Not later than the expiration of the 180-day period beginning on the date that funds authorized under this part first become available for obligation, the Secretary shall by notice establish such requirements as may be necessary to carry out the provisions of this part. Such requirements shall be subject to section 553 of title 5. The Secretary shall issue regulations based on the initial notice before the expiration of the 8-month period beginning on the date of the notice.

(Pub. L. 101–625, title IV, §430, Nov. 28, 1990, 104 Stat. 4172.)

§12880. Report

The Secretary shall no later than December 31, 1995, submit to the Congress a report setting forth—

(1) the number, type and cost of eligible properties transferred pursuant to this part;

(2) the income, race, gender, children and other characteristics of families participating (or not participating) in homeownership programs funded under this part;

(3) the amount and type of financial assistance provided under and in conjunction with this part;

(4) the amount of financial assistance provided under this part that was needed to ensure continued affordability and meet future maintenance and repair costs; and

(5) the recommendations of the Secretary for statutory and regulatory improvements to the program.

(Pub. L. 101–625, title IV, §431, Nov. 28, 1990, 104 Stat. 4172; Pub. L. 104–66, title I, §1072(a), Dec. 21, 1995, 109 Stat. 721.)

Amendments

1995—Pub. L. 104–66 in section catchline substituted "Report" for "Annual report", and in introductory provisions substituted "The Secretary shall no later than December 31, 1995," for "The Secretary shall annually".

Part B—HOPE for Homeownership of Single Family Homes

Part Referred to in Other Sections

This part is referred to in sections 12870, 12899c, 12899d of this title; title 12 sections 1709, 1834a.

§12891. Program authority

The Secretary is authorized to make—

(1) planning grants to help applicants develop homeownership programs in accordance with this part; and

(2) implementation grants to enable applicants to carry out homeownership programs in accordance with this part.

(Pub. L. 101–625, title IV, §441, Nov. 28, 1990, 104 Stat. 4172; Pub. L. 102–550, title I, §181(a)(2)(B)(ii), Oct. 28, 1992, 106 Stat. 3735.)

Amendments

1992—Pub. L. 102–550 struck out "(a) In General" before "The Secretary is authorized" and subsec. (b) which read as follows: "Authorization of Appropriations.—There are authorized to be appropriated for grants under this part $36,000,000 for fiscal year 1991, and $195,000,000 for fiscal year 1992. Any amounts appropriated pursuant to this subsection shall remain available until expended."

§12892. Planning grants

(a) Grants

(b) Eligible activities

Planning grants may be used for activities to develop homeownership programs (which may include programs for cooperative ownership), including—

(1) identifying eligible properties;

(2) training and technical assistance of applicants related to the development of a specific homeownership program;

(3) studies of the feasibility of specific homeownership programs;

(4) inspection for lead-based paint hazards, as required by section 4822(a) of this title;

(5) preliminary architectural and engineering work;

(6) homebuyer counseling and training;

(7) planning for economic development, job training, and self-sufficiency activities that promote economic self-sufficiency for homebuyers and homeowners under the homeownership program;

(8) development of security plans; and

(9) preparation of an application for an implementation grant under this part.

(c) Application

(1) Form and procedures

An application for a planning grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2) Minimum requirements

The Secretary shall require that an application contain at a minimum—

(B) a description of the applicant and a statement of its qualifications;

(C) identification and description of the eligible properties likely to be involved, and a description of the composition of the potential homebuyers and residents of the areas in which such eligible properties are located, including family size and income;

(d) Selection criteria

The Secretary shall, by regulation, establish selection criteria for a national competition for assistance under this section, which shall include—

(1) the qualifications or potential capabilities of the applicant;

(2) the extent of interest in the development of a homeownership program;

(3) the potential of the applicant for developing a successful and affordable homeownership program and the availability and suitability of eligible properties in the applicable geographic area with respect to the application;

(4) national geographic diversity among housing for which applicants are selected to receive assistance; and

(Pub. L. 101–625, title IV, §442, Nov. 28, 1990, 104 Stat. 4172; Pub. L. 102–550, title X, §1012(j)(1), Oct. 28, 1992, 106 Stat. 3906.)

References in Text

Amendments

1992—Subsec. (b)(4) to (9). Pub. L. 102–550 added par. (4) and redesignated former pars. (4) to (8) as (5) to (9), respectively.

§12893. Implementation grants

(a) Grants

The Secretary is authorized to make implementation grants to applicants for the purpose of carrying out homeownership programs approved under this part.

(b) Eligible activities

Implementation grants may be used for activities to carry out homeownership programs (which may include programs for cooperative ownership), including the following activities:

(1) Architectural and engineering work.

(2) Acquisition of the property for the purpose of transferring ownership to eligible families in accordance with a homeownership program meeting the requirements of this part.

(3) Rehabilitation of the property covered by the homeownership program, in accordance with standards established by the Secretary.

(4) Abatement of lead-based paint hazards, as required by section 4822(a) of this title.

(5) Administrative costs of the applicant, which may not exceed 15 percent of the amount of assistance provided under this section.

(6) Counseling and training of homebuyers and homeowners under the homeownership program.

(7) Relocation of eligible families who elect to move.

(8) Any necessary temporary relocation of homebuyers during rehabilitation.

(9) Legal fees.

(10) Defraying costs for the ongoing training needs of the recipient that are related to developing and carrying out the homeownership program.

(11) Economic development activities that promote economic self-sufficiency of homebuyers and homeowners under the homeownership program.

(c) Matching funding

(1) In general

Each recipient shall assure that contributions equal to not less than 25 percent of the grant amounts under this section are provided from non-Federal sources to carry out the homeownership program.

(2) Form

Such contributions may be in the form of—

(A) cash contributions from non-Federal resources which may not include funds from a grant made under section 5306(b) or section 5306(d) of this title;

(B) payment of administrative expenses, as defined by the Secretary, from non-Federal resources, including funds from a grant made under section 5306(b) or section 5306(d) of this title;

(D) the value of investment in on-site and off-site infrastructure required for a homeownership program assisted under this part; or

(E) such other in-kind contributions as the Secretary may approve.

Contributions for administrative expenses shall be recognized only up to an amount equal to 7 percent of the total amount of grants made available under this section.

(d) Application

(1) Form and procedure

An application for an implementation grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2) Minimum requirements

The Secretary shall require that an application contain at a minimum—

(A) a request for an implementation grant, specifying the amount of the grant requested and its proposed uses;

(B) a description of the qualifications and experience of the applicant in providing low-income housing;

(C) a description of the proposed homeownership program, consistent with section 12894 of this title and the other requirements of this part specifying the activities proposed to be carried out and their estimated costs, identifying reasonable schedules for carrying it out, and demonstrating that the program will comply with the affordability requirements under section 12894(b) of this title;

(D) an identification and description of the properties to be acquired under the homeownership program and a description of the composition of potential eligible families, including family size and income;

(E) a description of and commitment for the resources that are expected to be made available to provide the matching funding required under subsection (c) of this section and of other resources that are expected to be made available in support of the homeownership program;

(F) identification and description of the financing proposed for any (i) rehabilitation and (ii) acquisition (I) of the project, where applicable, by an entity for transfer to eligible families, and (II) by eligible families of ownership interests in, or shares representing, units in the project;

(G) the proposed sales prices for the properties, the basis for such price determinations, and terms to an entity, if any, that will purchase that property for resale to eligible families;

(H) the proposed sales prices, if any, and terms to eligible families;

(I) identification and description of the entity that will operate and manage the property;

(J) a certification by the public official responsible for submitting the comprehensive housing affordability strategy under section 12705 of this title that the proposed activities are consistent with the approved housing strategy of the State or unit of general local government within which the project is located (or, during the first 12 months after November 28, 1990, that the application is consistent with such other existing State or local housing plan or strategy that the Secretary shall determine to be appropriate); and

(K) a certification that the applicant will comply with the requirements of the Fair Housing Act [42 U.S.C. 3601 et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], section 504 of the Rehabilitation Act of 1973 [29 U.S.C. 794], and the Age Discrimination Act of 1975 [42 U.S.C. 6101 et seq.], and will affirmatively further fair housing.

(e) Selection criteria

The Secretary shall establish selection criteria for assistance under this part, which shall include—

(1) the ability of the applicant to develop and carry out the proposed homeownership program, taking into account the qualifications and experience of the applicant and the quality of any related ongoing program of the applicant;

(2) the feasibility of the homeownership program;

(3) the quality and viability of the proposed homeownership program;

(4) the extent to which suitable eligible property is available for use under the program in the area to be served, and the extent to which the types of property expected to be covered by the proposed homeownership program are federally owned;

(5) whether the approved comprehensive housing affordability strategy for the jurisdiction within which the eligible property is located includes the proposed homeownership program as one of the general priorities identified pursuant to section 12705(b)(7) of this title;

(6) national geographic diversity among housing for which applicants are selected to receive assistance; and

(7) the extent to which a sufficient supply of affordable rental housing of the type assisted under this part exists in the locality, so that the implementation of the homeownership program will not appreciably reduce the number of such rental units available to residents currently residing in such units or eligible for residency in such units.

(f) Approval

The Secretary shall notify each applicant, not later than 6 months after the date of the submission of the application, whether the application is approved or not approved.

(Pub. L. 101–625, title IV, §443, Nov. 28, 1990, 104 Stat. 4174; Pub. L. 102–550, title X, §1012(j)(2), Oct. 28, 1992, 106 Stat. 3906; Pub. L. 103–233, title II, §221, Apr. 11, 1994, 108 Stat. 366.)

References in Text

The Fair Housing Act, referred to in subsec. (d)(2)(K), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, as amended, which is classified principally to subchapter I (§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.

The Civil Rights Act of 1964, referred to in subsec. (d)(2)(K), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241, as amended. Title VI of the Act is classified generally to subchapter V (§2000d 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.

The Age Discrimination Act of 1975, referred to in subsec. (d)(2)(K), is title III of Pub. L. 94–135, Nov. 28, 1975, 89 Stat. 728, as amended, which is classified generally to chapter 76 (§6101 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 6101 of this title and Tables.

Amendments

1994—Subsec. (c)(1). Pub. L. 103–233 substituted "25 percent" for "33 percent".

1992—Subsec. (b)(4) to (11). Pub. L. 102–550 added par. (4) and redesignated former pars. (4) to (10) as (5) to (11), respectively.

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–233 applicable with respect to any amounts made available to carry out subchapter II (§12721 et seq.) of this chapter after Apr. 11, 1994, and any amounts made available to carry out that subchapter before that date that remain uncommitted on that date, with Secretary to issue any regulations necessary to carry out such amendment not later than end of 45-day period beginning on that date, see section 209 of Pub. L. 103–233, set out as a note under section 5301 of this title.

§12894. Homeownership program requirements

(a) In general

A homeownership program under this part shall provide for acquisition by eligible families of ownership interests in, or shares representing, units in an eligible property under any arrangement determined by the Secretary to be appropriate, such as cooperative ownership (including limited equity cooperative ownership) and fee simple ownership (including condominium ownership), for occupancy by the eligible families.

(b) Affordability

(c) Eligible property

A property may not participate in a homeownership program under this part unless all tenants or occupants of the property (at the time of ¹ the application for the implementation grant covering the property is filed with the Secretary) participate in the homeownership program.

(d) Plan

A homeownership program under this part shall provide, and include a plan, for—

(1) identifying and selecting eligible families to participate in the homeownership program;

(2) providing relocation assistance to families who elect to move; and

(3) ensuring continued affordability of the property to homebuyers and homeowners.

(e) Housing quality standards

The application shall include a plan ensuring that the unit—

(1) will be free from any defects that pose a danger to health or safety before transfer of an ownership interest in, or shares representing, a unit to an eligible family; and

(2) will, not later than 2 years after the transfer to an eligible family, meet minimum housing standards established by the Secretary for the purpose of this title.²

(f) Preference for acquisition of vacant units

Each homeownership program under this part shall provide that, in making vacant units in eligible properties available for acquisition by eligible families, preference shall be given to eligible families who reside in public or Indian housing.

(Pub. L. 101–625, title IV, §444, Nov. 28, 1990, 104 Stat. 4176; Pub. L. 102–550, title I, §181(f), Oct. 28, 1992, 106 Stat. 3736.)

References in Text

This title, referred to in subsec. (e)(2), is title IV of Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4148, known as the Homeownership and Opportunity Through HOPE Act, which enacted this subchapter and subchapter II–A (§1437aaa et seq.) of chapter 8 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 title IV to the Code, see Short Title note set out under section 1437aaa of this title and Tables.

Amendments

1992—Subsec. (f). Pub. L. 102–550 added subsec. (f).

Section Referred to in Other Sections

This section is referred to in section 12893 of this title.

¹ So in original. The word "of" probably should not appear.

² So in original. See References in Text note below.

§12895. Other program requirements

(a) Cost limitations

The Secretary may establish cost limitations on eligible activities under this part, subject to the provisions of this part.

(b) Use of proceeds from sales to eligible families

Any entity that transfers ownership interests in, or shares representing, units to eligible families, or another entity specified in the approved application, may use the proceeds, if any, from the initial sale for costs of the homeownership program, including operating expenses, improvements to the project, business opportunities for low-income families, supportive services related to the homeownership program, additional homeownership opportunities, and other activities approved by the Secretary.

(c) Restrictions on resale by homeowners

(1) In general

(A) Transfer permitted

(B) Right to purchase

(C) Promissory note required

(2) 6 years or less

(A) the contribution to equity paid by the family;

(B) the value, as determined by such means as the Secretary shall determine through regulation, of any improvements installed at the expense of the family during the family's tenure as owner; and

Such an entity may, at the time of initial sale, enter into an agreement with the family to set a maximum amount which this appreciation may not exceed.

(3) 6–20 years

(4) Use of recaptured funds

(d) Third party rights

(e) Protection of nonpurchasing families

(h) ¹ Records and audit of recipients of assistance

(1) In general

Each recipient shall keep such records as may be reasonably necessary to fully disclose the amount and the disposition by such recipient of the proceeds of assistance received under this part (and any proceeds from financing obtained or sales under subsections (b) and (c) of this section), the total cost of the homeownership program in connection with which such assistance is given or used, and the amount and nature of that portion of the program supplied by other sources, and such other sources as will facilitate an effective audit.

(2) Access by Secretary

The Secretary shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipient that are pertinent to assistance received under this part.

(3) Access by Comptroller General

(Pub. L. 101–625, title IV, §445, Nov. 28, 1990, 104 Stat. 4177.)

¹ So in original. Probably should be "(f)".

§12896. Definitions

For purposes of this part:

(1) The term "applicant" means a private nonprofit organization, cooperative association, or a public agency (including an agency or instrumentality thereof) in cooperation with a private nonprofit organization.

(2) The term "displaced homemaker" has the same meaning as in section 12704 of this title.

(3) The term "eligible family" means a family or individual who—

(A) has an income that does not exceed 80 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families; and

(B) is a first-time homebuyer.

(4) The term "eligible property" means a single family property, containing no more than four units, that is owned or held by the Secretary, the Secretary of Veterans Affairs, the Secretary of Agriculture, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, the Secretary of Defense, the Secretary of Transportation, the General Services Administration, any other Federal agency, a State or local government (including any in rem property), or a public housing agency or an Indian housing authority (excluding public or Indian housing under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] and including properties held by institutions within the jurisdiction of the Resolution Trust Corporation).

(5) The term "first-time homebuyer" has the same meaning as in section 12704 of this title.

(6) The term "homeownership program" means a program for homeownership under this part.

(7) The term "Indian housing authority" has the meaning given such term in section 3(b)(11) ¹ of the United States Housing Act of 1937.

(8) The term "low-income family" has the meaning given such term in section 3(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)].

(9) The term "public housing agency" has the meaning given such term in section 3(b)(6) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)(6)].

(10) The term "recipient" means an applicant approved to receive a grant under this part or such other entity specified in the approved application that will assume the obligations of the recipient under this part.

(11) The term "Secretary" means the Secretary of Housing and Urban Development.

(12) The term "single parent" means an individual who—

(A) is unmarried or legally separated from a spouse; and

(B)(i) has 1 or more minor children for whom the individual has custody or joint custody; or

(ii) is pregnant.

(Pub. L. 101–625, title IV, §446, Nov. 28, 1990, 104 Stat. 4179; Pub. L. 102–550, title I, §181(g)(2), (h), Oct. 28, 1992, 106 Stat. 3736.)

References in Text

The United States Housing Act of 1937, referred to in par. (4), is act Sept. 1, 1937, ch. 896, as revised generally by Pub. L. 93–383, title II, §201(a), Aug. 22, 1974, 88 Stat. 653, and amended, which is classified generally to chapter 8 (§1437 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1437 of this title and Tables.

Section 3(b)(11) of the United States Housing Act of 1937, referred to in par. (7), was classified to section 1437a(b)(11) of this title prior to repeal by Pub. L. 104–330, title V, §501(b)(1)(D), Oct. 26, 1996, 110 Stat. 4041, and a new section 1437a(b)(11), defining "public housing agency plan", was enacted by Pub. L. 105–276, title V, §506(4), Oct. 21, 1998, 112 Stat. 2524.

Amendments

1992—Par. (4). Pub. L. 102–550 inserted "the Federal Deposit Insurance Corporation, the Secretary of Defense, the Secretary of Transportation, the General Services Administration, any other Federal agency," after "Corporation," and substituted "(excluding public or Indian housing under the United States Housing Act of 1937 and including" for "(including scattered site single family properties, and".

¹ See References in Text note below.

§12897. Limitation on selection criteria

(Pub. L. 101–625, title IV, §447, Nov. 28, 1990, 104 Stat. 4180.)

§12898. Implementation

Not later than the expiration of the 180-day period beginning on the date funds authorized under this part first become available for obligation, the Secretary shall by notice establish such requirements as may be necessary to carry out the provisions of this part. Such requirements shall be subject to section 553 of title 5. The Secretary shall issue regulations based on the initial notice before the expiration of the 8-month period beginning on the date of the notice.

(Pub. L. 101–625, title IV, §448, Nov. 28, 1990, 104 Stat. 4180.)

§12898a. Enterprise zone homeownership opportunity grants

(a) Statement of purpose

It is the purpose of this section—

(1) to encourage homeownership by families in the United States who are not otherwise able to afford homeownership;

(2) to encourage the redevelopment of economically depressed areas; and

(3) to provide better housing opportunities in federally approved and equivalent State-approved enterprise zones.

(b) Definitions

For purposes of this section the following definitions shall apply:

(1) Home

The term "home" means any 1- to 4-family dwelling. Such term includes any dwelling unit in a condominium project or cooperative project consisting of not more than 4 dwelling units, any town house, and any manufactured home.

(2) Metropolitan statistical area

The term "metropolitan statistical area" means a metropolitan statistical area as established by the Office of Management and Budget.

(3) Nonprofit organization

The term "nonprofit organization" means a private nonprofit corporation, or other private nonprofit legal entity, that is approved by the Secretary as to financial responsibility.

(4) Secretary

The term "Secretary" means the Secretary of Housing and Urban Development.

(5) State

The term "State" means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States.

(6) Unit of general local government

The term "unit of general local government" means any borough, city, county, parish, town, township, village, or other general purpose political subdivision of a State.

(c) Assistance to nonprofit organizations

(1) In general

The Secretary may provide assistance to nonprofit organizations to carry out enterprise zone homeownership opportunity programs to promote homeownership in federally approved and equivalent State-approved enterprise zones in accordance with the provisions of this section. Such assistance shall be made in the form of grants.

(2) Applications

Applications for assistance under this section shall be made in such form, and in accordance with such procedures, as the Secretary may prescribe.

(d) Eligible uses of assistance

(1) In general

Any nonprofit organization receiving assistance under this section shall use such assistance to provide loans to families purchasing homes constructed or rehabilitated in accordance with an enterprise zone homeownership opportunity program approved under this section.

(2) Specific requirements

Each loan made to a family under this subsection shall—

(A) be secured by a second mortgage held by the Secretary on the property involved;

(B) be in an amount not exceeding $15,000;

(D) be repayable to the Secretary upon the sales, lease, or other transfer of such property.

(e) Program requirements

(1) In general

Assistance provided under this section may be used only in connection with an enterprise zone homeownership opportunity program of construction or rehabilitation of homes.

(2) Family need

Each family purchasing a home under this section shall—

(A) have a family income on the date of such purchase that is not more than the median income for a family of 4 persons (adjusted for family size) in the metropolitan statistical area in which a federally approved or equivalent State-approved enterprise zone is located; and

(B) not have owned a home during the 3-year period preceding such purchase.

(3) Downpayment

Each family purchasing a home under this section shall make a downpayment of not less than 5 percent of the sale price of such home.

(4) Leasing prohibition

No family purchasing a home under this section may lease such home.

(f) Terms and conditions of assistance

(1) Local consultation

No proposed enterprise zone homeownership opportunity program may be approved by the Secretary under this section unless the applicant involved demonstrates to the satisfaction of the Secretary that—

(A) it has consulted with and received the support of residents of the neighborhood in which such program is to be located; and

(B) it has the approval of each unit of general local government in which such program is to be located.

(2) Program schedule

Each applicant for assistance under this section shall submit to the Secretary an estimated schedule for completion of its proposed enterprise zone homeownership opportunity program, which schedule shall have been agreed to by each unit of general local government in which such program is to be located.

(3) Location

All homes constructed or rehabilitated under such program will be located in federally approved or equivalent State-approved enterprise zones.

(4) Sales contracts

Sales contracts entered into under such program will contain provisions requiring repayment of any loan made under this section upon the sale or other transfer of the home involved, unless the Secretary approves a transfer of such home without repayment (in which case the second mortgage held by the Secretary on such home shall remain in force until such loan is fully repaid).

(g) Program selection criteria

(1) In general

In selecting enterprise zone homeownership opportunity programs for assistance under this section from among eligible programs, the Secretary shall make such selection on the basis of the extent to which—

(A) non-Federal public or private entities will contribute land necessary to make each program feasible;

(B) non-Federal public and private financial or other contributions (including tax abatements, waivers of fees related to development, waivers of construction, development, or zoning requirements, and direct financial contributions) will reduce the cost of home ¹ constructed or rehabilitated under each program;

(C) each program will produce the greatest number of units for the least amount of assistance provided under this section, taking into consideration the cost differences among different market areas; and

(D) each program provides for the involvement of local residents in the planning, and construction or rehabilitation, of homes.

(2) Exception

To the extent that non-Federal public entities are prohibited by the law of any State from making any form of contribution described in subparagraph (A) or (B) of paragraph (1), the Secretary shall not consider such form of contribution in evaluating such program.

(h) Regulations

Not later than 180 days after October 28, 1992, the Secretary shall issue final regulations to carry out the provisions of this title.² Any such regulations shall be issued in accordance with section 553 of title 5, notwithstanding the provisions of subsection (a)(2) of such section.

(i) Funding

There are authorized to be appropriated to carry out this section $30,000,000 in each of fiscal years 1993 and 1994.

(Pub. L. 102–550, title I, §186, Oct. 28, 1992, 106 Stat. 3748.)

Codification

Section was enacted as part of the Housing and Community Development Act of 1992, and not as part of subtitle C (§§441–448) of title IV of Pub. L. 101–625 which comprises this part.

Termination of Trust Territory of the Pacific Islands

For termination of Trust Territory of the Pacific Islands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions.

¹ So in original. Probably should be "homes".

² So in original. Probably should be "this section."

Part C—HOPE for Youth: Youthbuild

Part Referred to in Other Sections

This part is referred to in section 12870 of this title; title 12 section 1701u; title 25 section 4183.

§12899. Statement of purpose

It is the purpose of this part—

(1) to expand the supply of permanent affordable housing for homeless individuals and members of low- and very low-income families by utilizing the energies and talents of economically disadvantaged young adults;

(2) to provide economically disadvantaged young adults with opportunities for meaningful work and service to their communities in helping to meet the housing needs of homeless individuals and members of low- and very low-income families;

(3) to enable economically disadvantaged young adults to obtain the education and employment skills necessary to achieve economic self-sufficiency; and

(4) to foster the development of leadership skills and commitment to community development among young adults in low-income communities.

(Pub. L. 101–625, title IV, §451, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3723.)

§12899a. Program authority

The Secretary may make—

(1) planning grants to enable applicants to develop Youthbuild programs; and

(2) implementation grants to enable applicants to carry out Youthbuild programs.

(Pub. L. 101–625, title IV, §452, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3723.)

§12899b. Planning grants

(a) Grants

The Secretary is authorized to make planning grants to applicants for the purpose of developing Youthbuild programs under this part. The amount of a planning grant under this section may not exceed $150,000, except that the Secretary may for good cause approve a grant in a higher amount.

(b) Eligible activities

Planning grants may be used for activities to develop Youthbuild programs including—

(1) studies of the feasibility of a Youthbuild program;

(2) establishment of consortia between youth training and education programs and housing owners or developers, including any organizations specified in section 12899(2) of this title, which will participate in the Youthbuild program;

(3) identification and selection of a site for the Youthbuild program;

(4) preliminary architectural and engineering work for the Youthbuild program;

(5) identification and training of staff for the Youthbuild program;

(6) planning for education, job training, and other services that will be provided as part of the Youthbuild program;

(7) other planning, training, or technical assistance necessary in advance of commencing the Youthbuild program; and

(8) preparation of an application for an implementation grant under this part.

(c) Application

(1) Form and procedures

An application for a planning grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2) Minimum requirements

The Secretary shall require that an application contain at a minimum—

(B) a description of the applicant and a statement of its qualifications, including a description of the applicant's past experience with housing rehabilitation or construction and with youth and youth education and employment training programs, and its relationship with local unions and apprenticeship programs, and other community groups;

(C) identification and description of potential sites for the program and the construction or rehabilitation activities that would be undertaken at such sites; potential methods for identifying and recruiting youth participants; potential educational and job training activities, work opportunities and other services for participants; and potential coordination with other Federal, State, and local housing and youth education and employment training activities including activities conducted by Indian tribes;

(d) Selection criteria

The Secretary shall, by regulation, establish selection criteria for a national competition for assistance under this section, which shall include—

(1) the qualifications or potential capabilities of the applicant;

(2) the potential of the applicant for developing a successful and affordable Youthbuild program;

(3) the need for the prospective program, as determined by the degree of economic distress—

(A) of the community from which participants would be recruited (such as poverty, youth unemployment, and number of individuals who have dropped out of high school); and

(B) of the community in which the housing proposed to be constructed or rehabilitated would be located (such as incidence of homelessness, shortage of affordable housing, and poverty); and

(4) such other factors that the Secretary shall require that (in the determination of the Secretary) are appropriate for purposes of carrying out the program established by this part in an effective and efficient manner.

(Pub. L. 101–625, title IV, §453, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3723.)

References in Text

§12899c. Implementation grants

(a) Grants

The Secretary is authorized to make implementation grants to applicants for the purpose of carrying out Youthbuild programs approved under this part.

(b) Eligible activities

Implementation grants may be used to carry out Youthbuild programs, including the following activities:

(1) Architectural and engineering work.

(2) Acquisition, rehabilitation, acquisition and rehabilitation, or construction of housing and related facilities to be used for the purposes of providing homeownership under part A and part B of this subchapter, residential housing for homeless individuals, and low- and very low-income families, or transitional housing for persons who are homeless, have disabilities, are ill, are deinstitutionalized, or have other special needs.

(3) Administrative costs of the applicant, which may not exceed 15 percent of the amount of assistance provided under this section, or such higher percentage as the Secretary determines is necessary to support capacity development by a private nonprofit organization.

(4) Education and job training services and activities including—

(A) work experience and skills training, coordinated, to the maximum extent feasible, with preapprenticeship and apprenticeship programs, in the construction and rehabilitation activities described in subsection (b)(2) of this section;

(B) services and activities designed to meet the educational needs of participants, including—

(i) basic skills instruction and remedial education;

(ii) bilingual education for individuals with limited-English proficiency;

(iii) secondary education services and activities designed to lead to the attainment of a high school diploma or its equivalent; and

(iv) counseling and assistance in attaining post-secondary education and required financial aid;

(D) activities designed to develop employment and leadership skills, including support for youth councils; and

(E) support services and need-based stipends necessary to enable individuals to participate in the program and, for a period not to exceed 12 months after completion of training, to assist participants through support services in retaining employment.

(5) Wage stipends and benefits provided to participants.

(6) Funding of operating expenses and replacement reserves of the property covered by the Youthbuild program.

(7) Legal fees.

(8) Defraying costs for the ongoing training and technical assistance needs of the recipient that are related to developing and carrying out the Youthbuild program.

(c) Application

(1) Form and procedure

An application for an implementation grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2) Minimum requirements

The Secretary shall require that an application contain at a minimum—

(A) a request for an implementation grant, specifying the amount of the grant requested and its proposed uses;

(D) a description of the educational and job training activities, work opportunities, and other services that will be provided to participants;

(E) a description of the proposed construction or rehabilitation activities to be undertaken and the anticipated schedule for carrying out such activities;

(F) a description of the manner in which eligible youths will be recruited and selected, including a description of arrangements which will be made with community-based organizations, State and local educational agencies, including agencies of Indian tribes, public assistance agencies, the courts of jurisdiction for status and youth offenders, shelters for homeless individuals and other agencies that serve homeless youth, foster care agencies, and other appropriate public and private agencies;

(G) a description of the special outreach efforts that will be undertaken to recruit eligible young women (including young women with dependent children);

(H) a description of how the proposed program will be coordinated with other Federal, State, and local activities and activities conducted by Indian tribes, including vocational, adult and bilingual education programs, job training provided with funds available under the Job Training Partnership Act [29 U.S.C. 1501 et seq.] and title I of the Workforce Investment Act of 1998 [29 U.S.C. 2801 et seq.] and the Family Support Act of 1988, and housing and community development programs, including programs that receive assistance under section 5306 of this title;

(I) assurances that there will be a sufficient number of adequately trained supervisory personnel in the program who have attained the level of journeyman or its equivalent;

(J) a description of the applicant's relationship with local building trade unions regarding their involvement in training, and the relationship of the Youthbuild program with established apprenticeship programs;

(K) a description of activities that will be undertaken to develop the leadership skills of participants;

(L) a detailed budget and a description of the system of fiscal controls and auditing and accountability procedures that will be used to ensure fiscal soundness;

(M) a description of the commitments for any additional resources to be made available to the program from the applicant, from recipients of other Federal, State or local housing and community development assistance who will sponsor any part of the construction, rehabilitation, operation and maintenance, or other housing and community development activities undertaken as part of the program, or from other Federal, State or local activities and activities conducted by Indian tribes, including, but not limited to, vocational, adult and bilingual education programs, and job training provided with funds available under the Job Training Partnership Act [29 U.S.C. 1501 et seq.] and title I of the Workforce Investment Act of 1998 [29 U.S.C. 2801 et seq.] and the Family Support Act of 1988;

(N) identification and description of the financing proposed for any—

(i) rehabilitation;

(ii) acquisition of the property; or

(iii) construction;

(O) identification and description of the entity that will operate and manage the property;

(P) a certification by the public official responsible for submitting the comprehensive housing affordability strategy under section 12705 of this title that the proposed activities are consistent with the approved housing strategy of the State or unit of general local government within which the project is located; and

(Q) a certification that the applicant will comply with the requirements of the Fair Housing Act [42 U.S.C. 3601 et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], section 504 of the Rehabilitation Act of 1973 [29 U.S.C. 794], and the Age Discrimination Act of 1975 [42 U.S.C. 6101 et seq.], and will affirmatively further fair housing.

(d) Selection criteria

The Secretary shall establish selection criteria for assistance under this section, which shall include—

(1) the qualifications or potential capabilities of the applicant;

(2) the feasibility of the Youthbuild program;

(3) the potential for developing a successful Youthbuild program;

(4) the need for the prospective project, as determined by the degree of economic distress of the community from which participants would be recruited (such as poverty, youth unemployment, number of individuals who have dropped out of high school) and of the community in which the housing proposed to be constructed or rehabilitated would be located (such as incidence of homelessness, shortage of affordable housing, poverty);

(5) the apparent commitment of the applicant to leadership development, education, and training of participants;

(6) the inclusion of previously homeless tenants in the housing provided;

(7) the commitment of other resources to the program by the applicant and by recipients of other Federal, State or local housing and community development assistance who will sponsor any part of the construction, rehabilitation, operation and maintenance, or other housing and community development activities undertaken as part of the program, or by other Federal, State or local activities and activities conducted by Indian tribes, including, but not limited to, vocational, adult and bilingual education programs, and job training provided with funds available under the Job Training Partnership Act [29 U.S.C. 1501 et seq.] and title I of the Workforce Investment Act of 1998 [29 U.S.C. 2801 et seq.] and the Family Support Act of 1988; and

(8) such other factors as the Secretary determines to be appropriate for purposes of carrying out the program established by this part in an effective and efficient manner.

(e) Priority for applicants who obtain housing money from other sources

The Secretary shall give priority in the award of grants under this section to applicants to the extent that they propose to finance activities described in paragraphs (1), (2), and (6) of subsection (b) of this section from funds provided from Federal, State, local, or private sources other than assistance under this part.

(f) Approval

The Secretary shall notify each applicant, not later than 4 months after the date of the submission of the application, whether the application is approved or not approved.

(g) Combined planning and implementation grant application procedure

The Secretary shall develop a procedure under which an applicant may apply at the same time and in a single application for a planning grant and an implementation grant, with receipt of the implementation grant conditioned on successful completion of the activities funded by the planning grant.

(Pub. L. 101–625, title IV, §454, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3725; amended Pub. L. 105–277, div. A, §101(f) [title VIII, §405(d)(43)(A), (f)(34)], Oct. 21, 1998, 112 Stat. 2681–337, 2681-428, 2681-434.)

Amendment of Subsections (c)(2)(H), (M) and (d)(7)

Pub. L. 105–277, div. A, §101(f) [title VIII, §405(f)(34), (g)(2)(B)], Oct. 21, 1998, 112 Stat. 2681–337, 2681-434, 2681-435, provided that, effective July 1, 2000, subsections (c)(2)(H), (M) and (d)(7) of this section are amended by striking "the Job Training Partnership Act and".

References in Text

The Job Training Partnership Act, referred to in subsecs. (c)(2)(H), (M) and (d)(7), is Pub. L. 97–300, Oct. 13, 1982, 96 Stat. 1322, as amended, which is classified generally to chapter 19 (§1501 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 1501 of Title 29 and Tables.

The Workforce Investment Act of 1998, referred to in subsecs. (c)(2)(H), (M) and (d)(7), is Pub. L. 105–220, Aug. 7, 1998, 112 Stat. 936, as amended. Title I of the Act is classified principally to chapter 30 (§2801 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 9201 of Title 20, Education, and Tables.

The Family Support Act of 1988, referred to in subsecs. (c)(2)(H), (M) and (d)(7), is Pub. L. 100–485, Oct. 13, 1988, 102 Stat. 2343, as amended. For complete classification of this Act to the Code, see Short Title of 1988 Amendment note under section 1305 of this title and Tables.

The Fair Housing Act, referred to in subsec. (c)(2)(Q), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, as amended, which is classified principally to subchapter I (§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.

The Civil Rights Act of 1964, referred to in subsec. (c)(2)(Q), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241, as amended. Title VI of the Act is classified generally to subchapter V (§2000d 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.

The Age Discrimination Act of 1975, referred to in subsec. (c)(2)(Q), is title III of Pub. L. 94–135, Nov. 28, 1975, 89 Stat. 728, as amended, which is classified generally to chapter 76 (§6101 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 6101 of this title and Tables.

Amendments

1998—Subsecs. (c)(2)(H), (M), (d)(7). Pub. L. 105–277, §101(f) [title VIII, §405(d)(43)(A)], substituted "the Job Training Partnership Act and title I of the Workforce Investment Act of 1998" for "the Job Training Partnership Act".

Effective Date of 1998 Amendment

Amendment by section 101(f) [title VIII, §405(d)(43)(A)] of Pub. L. 105–277 effective Oct. 21, 1998, and amendment by section 101(f) [title VIII, §405(f)(34)] of Pub. L. 105–277 effective July 1, 2000, see section 101(f) [title VIII, §405(g)(1), (2)(B)] of Pub. L. 105–277, set out as a note under section 3502 of Title 5, Government Organization and Employees.

Section Referred to in Other Sections

This section is referred to in section 12899e of this title.

§12899d. Youthbuild program requirements

(a) Residential rental housing

Each residential rental housing project receiving assistance under this part shall meet the following requirements:

(1) Occupancy by low- and very low-income families

In the project—

(A) at least 90 percent of the units shall be occupied, or available for occupancy, by individuals and families with incomes less than 60 percent of the area median income, adjusted for family size; and

(B) the remaining units shall be occupied, or available for occupancy, by low-income families.

(2) Tenant protections

(A) Lease

The lease between a tenant and an owner of residential rental housing assisted under this part shall be for not less than 1 year, unless otherwise mutually agreed to by the tenant and the owner, and shall contain such terms and conditions as the Secretary shall determine to be appropriate.

(B) Termination of tenancy

An owner shall not terminate the tenancy or refuse to renew the lease of a tenant of residential rental housing assisted under this title ¹ 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. Any termination or refusal to renew must be preceded by not less than 30 days by the owner's service upon the tenant of a written notice specifying the grounds for the action.

(C) Maintenance and replacement

The owner of residential rental housing assisted under this part shall maintain the premises in compliance with all applicable housing quality standards and local code requirements.

(D) Tenant selection

The owner of residential rental housing assisted under this part shall adopt written tenant selection policies and criteria that—

(i) are consistent with the purpose of providing housing for very low-income and low-income families and individuals;

(ii) are reasonably related to program eligibility and the applicant's ability to perform the obligations of the lease;

(iii) give reasonable consideration to the housing needs of families that would qualify for a preference under any system of preferences established under section 1437d(c)(1) of this title; and

(iv) provide for (I) the selection of tenants from a written waiting list in the chronological order of their application, to the extent practicable, and (II) for the prompt notification in writing of any rejected applicant of the grounds for any rejection.

(3) Limitation on rental payments

Tenants in each project shall not be required to pay rent in excess of the amount provided under section 1437a(a) of this title.

(4) Tenant participation plan

For each project owned by a nonprofit organization, the organization shall provide a plan for and follow a program of tenant participation in management decisions.

(5) Prohibition against discrimination

A unit in a project assisted under this part may not be refused for leasing to a family holding tenant-based assistance under section 1437f of this title because of the status of the prospective tenant as a holder of such assistance.

(b) Transitional housing

Each transitional housing project receiving assistance under this part shall adhere to the requirements regarding service delivery, housing standards, and rent limitations applicable to comparable housing receiving assistance under title IV of the Stewart B. McKinney Homeless Assistance Act [42 U.S.C. 11361 et seq.].

(c) Limitations on profits for rental and transitional housing

(1) Monthly rental limitation

The aggregate monthly rental for each eligible project may not exceed the operating costs of the project (including debt service, management, adequate reserves, and other operating costs) plus a 6 percent return on any equity investment of the project owner.

(2) Profit limitations on partners

A nonprofit organization that receives assistance under this part for a project shall agree to use any profit received from the operation, sale, or other disposition of the project for the purpose of providing housing for low- and moderate-income families. Profit-motivated partners in a nonprofit partnership may receive—

(A) not more than a 6 percent return on their equity investment from project operations; and

(B) upon disposition of the project, not more than an amount equal to their initial equity investment plus a return on that investment equal to the increase in the Consumer Price Index for the geographic location of the project since the time of the initial investment of such partner in the project.

(d) Homeownership

Each homeownership project that receives assistance under this part shall comply with the requirements of part A or part B of this subchapter.

(e) Restrictions on conveyance

The ownership interest in a project that receives assistance under this part may not be conveyed unless the instrument of conveyance requires a subsequent owner to comply with the same restrictions imposed upon the original owner.

(f) Conversion of transitional housing

The Secretary may waive the requirements of subsection (b) of this section to permit the conversion of a transitional housing project to a permanent housing project only if such housing would meet the requirements for residential rental housing specified in this section.

(g) Period of restrictions

A project that receives assistance under this part shall comply with the requirements of this section for the remaining useful life of the property.

(Pub. L. 101–625, title IV, §455, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3728; amended Pub. L. 105–276, title V, §514(a)(2)(B), Oct. 21, 1998, 112 Stat. 2547.)

References in Text

This title, referred to in subsec. (a)(2)(B), means title IV of Pub. L. 101–625, known as the Homeownership and Opportunity Through HOPE Act, and probably should have been "this subtitle", meaning subtitle D of title IV of Pub. L. 101–625, as added by Pub. L. 102–550, which is classified generally to this part. For complete classification of title IV of Pub. L. 101–625 to the Code, see Short Title note set out under section 1437aaa of this title and Tables.

The Stewart B. McKinney Homeless Assistance Act, referred to in subsec. (b), is Pub. L. 100–77, July 22, 1987, 101 Stat. 482, as amended. Title IV of the Act is classified principally to subchapter IV (§11361 et seq.) of chapter 119 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 11301 of this title and Tables.

Amendments

1998—Subsec. (a)(2)(D)(iii). Pub. L. 105–276 substituted "any system of preferences established under section 1437d(c)(1) of this title" for "section 1437d(c)(4)(A) of this title".

¹ See References in Text note below.

§12899e. Additional program requirements

(a) Eligible participants

(1) In general

Except as provided in paragraph (2), an individual may participate in a Youthbuild program receiving assistance under this part only if such individual is—

(A) 16 to 24 years of age, inclusive;

(B) a very low-income individual or a member of a very low-income family; and

(2) Exception for individuals not meeting income or educational need requirements

Not more than 25 percent of the participants in such program may be individuals who do not meet the requirements of either paragraphs ¹ (1)(B) or (C), but who have educational needs despite attainment of a high school diploma or its equivalent.

(3) Participation limitation

Any eligible individual selected for full-time participation in a Youthbuild program may be offered full-time participation for a period of not less than 6 months and not more than 24 months.

(b) Minimum time devoted to educational services and activities

A Youthbuild program receiving assistance under this part shall be structured so that 50 percent of the time spent by participants in the program is devoted to educational services and activities, such as those specified in subparagraphs (B) through (F) ² of section 12899c(b)(4) of this title.

(c) Authority restriction

No provision of this part may be construed to authorize any agency, officer, or employee of the United States to exercise any direction, supervision, or control over the curriculum, program of instruction, administration, or personnel of any educational institution, school, or school system, or over the selection of library resources, textbooks, or other printed or published instructional materials by any educational institution or school system.

(d) State and local standards

All educational programs and activities supported with funds provided under this part shall be consistent with applicable State and local educational standards. Standards and procedures with respect to the awarding of academic credit and certifying educational attainment in such programs shall be consistent with applicable State and local educational standards.

(e) Wages, labor standards, and nondiscrimination

To the extent consistent with the provisions of this part, sections 142, 143 and 167 of the Job Training Partnership Act [29 U.S.C. 1552, 1553, 1577] (as in effect on the day before August 7, 1998), relating to wages and benefits, labor standards, and nondiscrimination, shall apply to the programs conducted under this part as if such programs were conducted under the Job Training Partnership Act [29 U.S.C. 1501 et seq.] (as in effect on the day before August 7, 1998). This section may not be construed to prevent a recipient of a grant under this part from using funds from non-Federal sources to increase wages and benefits under such programs, if appropriate.

(Pub. L. 101–625, title IV, §456, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3730; amended Pub. L. 105–277, div. A, §101(f) [title VIII, §405(d)(43)(B)], Oct. 21, 1998, 112 Stat. 2681–337, 2681-428.)

References in Text

The Job Training Partnership Act, referred to in subsec. (e), is Pub. L. 97–300, Oct. 13, 1982, 96 Stat. 1322, as amended, which is classified generally to chapter 19 (§1501 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 1501 of Title 29 and Tables.

Amendments

1998—Subsec. (e). Pub. L. 105–277 inserted "(as in effect on the day before August 7, 1998)" after "the Job Training Partnership Act" in two places.

¹ So in original. Probably should be "paragraph".

² So in original. Section 12899c(b)(4) of this title does not contain a subpar. (F).

§12899f. Definitions

For purposes of this part:

(1) Adjusted income

The term "adjusted income" has the meaning given the term in section 1437a(b) of this title.

(2) Applicant

The term "applicant" means a public or private nonprofit agency, including—

(A) a community-based organization;

(B) an administrative entity designated under section 1513(b)(1)(B) of title 29;

(D) a State and local housing development agency;

(E) a community development corporation;

(F) a State and local youth service and conservation corps; and

(G) any other entity eligible to provide education and employment training under other Federal employment training programs.

(3) Community-based organization

The term "community-based organization" means a private nonprofit organization that—

(A) maintains, through significant representation on the organization's governing board or otherwise, accountability to low-income community residents and, to the extent practicable, low-income beneficiaries of programs receiving assistance under this part; and

(B) has a history of serving the local community or communities where a program receiving assistance under this part is located.

(4) Homeless individual

The term "homeless individual" has the meaning given the term in section 11302 of this title.

(5) Housing development agency

The term "housing development agency" means any agency of a State or local government, or any private nonprofit organization that is engaged in providing housing for homeless or low-income families.

(6) Income

The term "income" has the meaning given the term in section 1437a(b) of this title.

(7) Indian tribe

The term "Indian tribe" has the same meaning given such term in section 5302(a)(17) of this title.

(8) Individual who has dropped out of high school

The term "individual who has dropped out of high school" means an individual who is neither attending any school nor subject to a compulsory attendance law and who has not received a secondary school diploma or a certificate of equivalency for such diploma.

(9) Institution of higher education

The term "institution of higher education" has the meaning given the term in section 1001 of title 20.

(10) Limited-English proficiency

The term "limited-English proficiency" has the meaning given the term in section 7601(8) ¹ of title 20.

(11) Low-income family

The term "low-income family" has the meaning given the term in section 1437a(b) of this title.

(12) Offender

The term "offender" means any adult or juvenile with a record of arrest or conviction for a criminal offense.

(13) Qualified nonprofit agency

The term "qualified public or private nonprofit agency" means any nonprofit agency that has significant prior experience in the operation of projects similar to the Youthbuild program authorized under this part and that has the capacity to provide effective technical assistance.

(14) Related facilities

The term "related facilities" includes cafeterias or dining halls, community rooms or buildings, appropriate recreation facilities, and other essential service facilities.

(15) Secretary

The term "Secretary" means the Secretary of Housing and Urban Development.

(16) State

The term "State" means any of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Trust Territories of the Pacific Islands, or any other territory or possession of the United States.

(17) Transitional housing

The term "transitional housing" means a project that has as its purpose facilitating the movement of homeless individuals and families to independent living within a reasonable amount of time. Transitional housing includes housing primarily designed to serve deinstitutionalized homeless individuals and other homeless individuals with mental or physical disabilities and homeless families with children.

(18) Very low-income family

The term "very low-income family" has the meaning given the term in section 1437a(b) of this title.

(19) Youthbuild program

The term "Youthbuild program" means any program that receives assistance under this part and provides disadvantaged youth with opportunities for employment, education, leadership development, and training in the construction or rehabilitation of housing for homeless individuals and members of low- and very low-income families.

(Pub. L. 101–625, title IV, §457, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3731; amended Pub. L. 103–382, title III, §394(d), Oct. 20, 1994, 108 Stat. 4027; Pub. L. 105–244, title I, §102(a)(13)(M), Oct. 7, 1998, 112 Stat. 1621.)

References in Text

Section 7601(8) of title 20, referred to in par. (10), was in the original section 7004(a) of the Elementary and Secondary Education Act of 1965, and was translated as if it read section 7501(8) of that Act to reflect the probable intent of Congress, because the Elementary and Secondary Education Act of 1965 does not contain a section 7004, and section 7501(8) defines limited English proficiency.

Amendments

1998—Par. (9). Pub. L. 105–244 substituted "section 1001" for "section 1141(a)".

1994—Par. (10). Pub. L. 103–382 substituted "section 7601(8) of title 20" for "section 3283 of title 20".

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of Title 20, Education.

Termination of Trust Territory of the Pacific Islands

For termination of Trust Territory of the Pacific Islands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions.

Section Referred to in Other Sections

This section is referred to in section 12899b of this title.

¹ See References in Text note below.

§12899g. Management and technical assistance

(a) Secretary assistance

The Secretary may enter into contracts with a qualified public or private nonprofit agency to provide assistance to the Secretary in the management, supervision, and coordination of Youthbuild programs receiving assistance under this part.

(b) Sponsor assistance

The Secretary shall enter into contracts with a qualified public or private nonprofit agency to provide appropriate training, information, and technical assistance to sponsors of programs assisted under this part.

(c) Application preparation

Technical assistance may also be provided in the development of program proposals and the preparation of applications for assistance under this part to eligible entities which intend or desire to submit such applications. Community-based organizations shall be given first priority in the provision of such assistance.

(d) Reservation of funds

In each fiscal year, the Secretary shall reserve 5 percent of the amounts available for activities under this part pursuant to section 12870 of this title to carry out subsections (b) and (c) of this section.

(Pub. L. 101–625, title IV, §458, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3733.)

§12899h. Contracts

Each Youthbuild program shall carry out the services and activities under this part directly or through arrangements or under contracts with administrative entities designated under section 1513(b)(1)(B) of title 29, with State and local educational agencies, institutions of higher education, State and local housing development agencies, or with other public agencies, including agencies of Indian tribes, and private organizations.

(Pub. L. 101–625, title IV, §459, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3733.)

§12899h–1. Ineligibility of Indian tribes

Indian tribes, Indian housing authorities, and other agencies primarily serving Indians or Indian areas shall not be eligible applicants for amounts made available for assistance under this part for fiscal year 1998 and fiscal years thereafter.

(Pub. L. 101–625, title IV, §460, as added Pub. L. 104–330, title V, §504(a)(2), Oct. 26, 1996, 110 Stat. 4044; amended Pub. L. 105–276, title V, §595(e)(15), Oct. 21, 1998, 112 Stat. 2659.)

Prior Provisions

A prior section 460 of Pub. L. 101–625 was renumbered section 461, and is classified to section 12899i of this title.

Amendments

1998—Pub. L. 105–276 substituted "1998" for "1997".

Effective Date

Section effective Oct. 1, 1997, except as otherwise expressly provided, see section 107 of Pub. L. 104–330, set out as a note under section 4101 of Title 25, Indians.

Section 504(b) of Pub. L. 104–330 provided that: "The amendments under subsection (a) [enacting this section] shall apply with respect to amounts made available for assistance under subtitle D of title II of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 12899 et seq.] for fiscal year 1998 and fiscal years thereafter."

§12899i. Regulations

The Secretary shall issue any regulations necessary to carry out this part.

(Pub. L. 101–625, title IV, §461, formerly §460, as added Pub. L. 102–550, title I, §164, Oct. 28, 1992, 106 Stat. 3733; renumbered §461, Pub. L. 104–330, title V, §504(a)(1), Oct. 26, 1996, 110 Stat. 4043.)

SUBCHAPTER IV—HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY AND SINGLE FAMILY HOMES

Subchapter Referred to in Other Sections

§12870. Authorization of appropriations

(a) Fiscal year 1993

(b) Fiscal year 1994

(c) Technical assistance

References in Text

GAO Audit of Technical Assistance Contracts

Section Referred to in Other Sections

Part A—HOPE for Homeownership of Multifamily Units

Part Referred to in Other Sections

§12871. Program authority

(a) In general

(b) Authority to reserve housing assistance

References in Text

Amendments

§12872. Planning grants

(a) Grants

(b) Eligible activities

(c) Application

(1) Form and procedures

(2) Minimum requirements

(d) Selection criteria

References in Text

Amendments

Section Referred to in Other Sections

§12873. Implementation grants

(a) Grants

(b) Eligible activities

(c) Matching funding

(1) In general

(2) Form

(d) 2 Application

(1) Form and procedure

(2) Minimum requirements

(d) 4 Selection criteria

(e) Approval

References in Text

Amendments

Section Referred to in Other Sections

§12874. Homeownership program requirements

(a) In general

(b) Affordability

(c) Plan

(d) Acquisition and rehabilitation limitation

(e) Financing

(1) In general

(2) Prohibition against pledges

(3) Opportunity to cure

(f) Housing quality standards

(g) Protection of nonpurchasing families

(1) In general

(2) Rental assistance

(3) Relocation assistance

References in Text

Section Referred to in Other Sections

§12875. Other program requirements

(a) Preferences

(b) Cost limitations

(c) Use of proceeds from sales to eligible families

(d) Restrictions on resale by homeowners

(1) In general

(A) Transfer permitted

(B) Right to purchase

(C) Promissory note required

(2) 6 years or less

(3) 6–20 years

(4) Use of recaptured funds

(e) Third party rights

(f) Dollar limitation on economic development activities

(g) Timely homeownership

(h) Records and audit of recipients of assistance

(1) In general

(2) Access by Secretary

(3) Access by Comptroller General

(i) Certain entities not eligible

References in Text

§12876. Definitions

References in Text

Amendments

(d) ² Application

(d) ⁴ Selection criteria

(h) ¹ Records and audit of recipients of assistance