Collapse to view only § 12877. Exemption
- § 12871. Program authority
- § 12872. Planning grants
- § 12873. Implementation grants
- § 12874. Homeownership program requirements
- § 12875. Other program requirements
- § 12876. Definitions
- § 12877. Exemption
- § 12878. Limitation on selection criteria
- § 12879. Implementation
- § 12880. Report
§ 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
(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.)
§ 12872. 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) 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
(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.)
§ 12873. Implementation grants
(a) Grants
(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
1 See References in Text note below.
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
(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
2 So in original. Two subsecs. (d) have been enacted.
Application(1) Form and procedure
(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;
(C) a description of the qualifications and experience of the applicant in providing low-income housing;
(D) a description of the proposed homeownership program, consistent with section 12874 1 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) 1 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) 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)2 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 1 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 3
3 So in original. Probably should be “this”.
part in an effective and efficient manner.(e) Approval
(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.)
§ 12874. Homeownership program requirements
(a) In general
(b) Affordability
(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
(e) Financing
(1) In general
(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);
(C) any debt obligation can be serviced from project income, including operating assistance; and
(D) the proceeds of such encumbrance will be used only to meet housing standards in accordance with subsection (f) or to make such additional capital improvements as the Secretary determines to be consistent with the purposes of this part.
(3) Opportunity to cure
(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
1 See References in Text note below.
(g) Protection of nonpurchasing families
(1) In general
(2) Rental assistance
(3) Relocation assistance
(Pub. L. 101–625, title IV, § 424, Nov. 28, 1990, 104 Stat. 4166.)
§ 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
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
(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
(Pub. L. 101–625, title IV, § 425, Nov. 28, 1990, 104 Stat. 4168.)
§ 12876. DefinitionsFor 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.
(C) A cooperative association.
(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
1 See References in Text note below.
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
(C) has a democratically elected governing board, elected by the tenants of the housing.
(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.)
§ 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.)
§ 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.)