[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3743 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 3743

To establish a single authority under title IV of the National Housing 
Act for rental and cooperative housing with five or more units and for 
 health care facilities through consolidation of multifamily programs, 
    authorization of risk sharing programs with private and public 
   entities, and increased flexibility for FHA to establish program 
    operations; to make changes to the multifamily housing programs 
   designed for the elderly and persons with disabilities; to extend 
      certain provisions of existing law; and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 27, 1996

Mr. Lazio of New York (by request) introduced the following bill; which 
    was referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
To establish a single authority under title IV of the National Housing 
Act for rental and cooperative housing with five or more units and for 
 health care facilities through consolidation of multifamily programs, 
    authorization of risk sharing programs with private and public 
   entities, and increased flexibility for FHA to establish program 
    operations; to make changes to the multifamily housing programs 
   designed for the elderly and persons with disabilities; to extend 
      certain provisions of existing law; and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``FHA Multifamily 
Housing Reform Act of 1996''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Implementation.
                    TITLE I--FHA MULTIFAMILY HOUSING

Sec. 10. Basic authority.
Sec. 11. Labor standards amendment.
Sec. 12. Implementation.
               TITLE II--HOUSING FOR SPECIAL POPULATIONS

Sec. 20. Term of rental assistance contracts for supportive housing for 
                            the elderly and supportive housing for 
                            persons with disabilities.
Sec. 21. Tenant-based assistance for persons with disabilities.
Sec. 22. Environmental protection.
              TITLE III--EXTENSIONS OF EXISTING AUTHORITY

Sec. 30. Extension of the section 221(g)(4) auction provisions.
Sec. 31. Extension of transferring excess receipts to the flexible 
                            subsidy program.

SEC. 2. IMPLEMENTATION.

    (a) Issuance of Necessary Regulations.--Notwithstanding 42 U.S.C. 
3535(o) or 24 CFR part 10, the Secretary shall issue such regulations 
as may be necessary to implement any provision of this Act, and any 
amendment made by this Act, in accordance with section 552 or 553 of 
title 5, United States Code, as determined by the Secretary.
    (b) Use of Existing Rules.--In implementing any provision of this 
Act, the Secretary may, in the Secretary's discretion, provide for the 
use of existing rules to the extent appropriate, without the need for 
further rulemaking.

                    TITLE I--FHA MULTIFAMILY HOUSING

SEC. 10. BASIC AUTHORITY.

    The National Housing Act is amended by inserting the following new 
title after title III:

  ``TITLE IV--CREDIT ENHANCEMENT FOR MULTIFAMILY HOUSING PROJECTS AND 
                         HEALTH CARE FACILITIES

``SEC. 401. PURPOSES.

    ``The purposes of this title are to--
            ``(1) expand the opportunities for rental housing and 
        health care facilities through the provision of credit 
        enhancement and related activities;
            ``(2) address the unmet housing credit needs of American 
        families and communities;
            ``(3) address the unmet health care facility credit needs 
        of communities;
            ``(4) supplement and expand private sector activity by 
        better serving underserved markets, testing new products, and 
        filling gaps in the provision and delivery of mortgage credit;
            ``(5) deliver housing credit enhancement and provide other 
        services in a non-discriminatory manner, and carry out 
        activities under this title in a manner that affirmatively 
        furthers fair housing;
            ``(6) promote liquidity and provide stability to the 
        housing finance market by continuing to provide credit 
        enhancement on a sound basis during times of regional and 
        national economic downturn;
            ``(7) engage is research, development, and testing of new 
        products designed in expand housing and health care facility 
        credit;
            ``(8) collect, generate, and make available information 
        relevant to the provision of housing and health care facility 
        credit to American families and communities; and
            ``(9) increase the capacity of localities, States, and for-
        profit and nonprofit entities to expand access to decent 
        housing and health care facilities and to deliver housing 
        credit to American families and communities.

``SEC. 402. DEFINITIONS.

    ``As used in this title:
            ``(1) The term `credit enhancement' means to enhance and 
        make commitments to enhance credit, including commitments to 
        lend, insure and reinsure (including insuring and reinsuring 
        pools of mortgages), make advances, incur liabilities, pool 
        loans, and risk-share.
            ``(2) The term `first mortgage' means such classes of first 
        liens as are commonly given to secure advances (including, but 
        not limited to, advances during construction) on, or the unpaid 
        purchase price of, real estate under the laws of the State in 
        which the real estate is located, together with the credit 
        instrument or instruments, if any, secured thereby, and may be 
        in the form of trust mortgages or mortgage indentures or deeds 
        of trust securing notes, bonds, or other credit instruments.
            ``(3) The term `health care facility' means--
                    ``(A) a facility of integrated health care delivery 
                system designed and operated to provide medical, 
                convalescent, skilled nursing, rehabilitation, 
                custodial, personal care services, or any combination 
                thereof; and
                    ``(B) a project designed, in whole or in part, to 
                provide a continuum of care, as determined by the 
                Secretary;
        that meets standards acceptable to the Secretary, including 
        standards governing licensure or State or local approval and 
        regulation of the mortgagor.
            ``(4) The term `mortgage' means a first mortgage on real 
        estate in fee simple, or on the interest of either the lessor 
        or lessee under a lease with a term at least 20 years longer 
        than the stated maturity of the mortgage indebtedness, and upon 
        which there is located or will be constructed a multifamily 
        housing project or a health care facility.
            ``(5) The term `mortgagee' means the original lender under 
        a mortgage, and its successors and assigns, the includes the 
        holders of credit instruments issued under a trust mortgage or 
        deed of trust pursuant to which such holders act by and through 
        a trustee therein named.
            ``(6) The term `mortgagor' means the original borrower 
        under a mortgage and its successors and assigns, which 
        mortgagor shall be regulated by the Secretary or other entity 
        under this section as required by the Secretary.
            ``(7) The term `multifamily housing project' means a rental 
        or cooperative housing project comprised of five or more 
        dwelling units, including--
                    ``(A) projects designed for single room occupancy; 
                and
                    ``(B) projects designed, in whole or in part, for 
                occupancy--
                            ``(i) by elderly persons who are 62 years 
                        of age or older; or
                            ``(ii) by persons with disabilities;
        that meet standards acceptable to the Secretary, including 
        standards governing regulation of the mortgagor and eligibility 
        for occupancy. Occupancy of projects under this paragraph shall 
        be under a written lease for a period of at least 30 days, 
        except that in the case of projects designed for single room 
        occupancy, the Secretary may establish shorter rental periods 
        for individual projects.
            ``(8) The term `qualified housing finance agency' means any 
        State or local housing finance agency that--
                    ``(A) carries the designation of `top tier' or its 
                equivalent, as evaluated by Standard and Poors or any 
                other nationally recognized rating agency;
                    ``(B) receives a rating of `A' or better for its 
                general obligation bonds from a nationally recognized 
                rating agency; or
                    ``(C) otherwise demonstrates its capacity as a 
                sound and experienced agency, based on factors such as 
                its experience in financing multifamily housing 
                projects or health care facilities (as appropriate), 
                fund balances, administrative capabilities, investment 
                policy, internal controls and financial management, 
                portfolio quality, and State or local support.
            ``(9) The term `qualified participating entity' means the 
        Federal Housing Finance Board, the Federal National Mortgage 
        Association, the Federal Home Loan Mortgage Corporation, a 
        qualified financial institution, and other State or local 
        mortgage insurance companies or bank lending consortia.
            ``(10) The term `refinancing' includes the refinancing of 
        any multifamily housing project or health care facility 
        mortgage. To the extent such mortgage refinancings for 
        transactions originally insured under this title are not in 
        excess of the principal amount of the original mortgage loan 
        and such other limitations as may be imposed by the Secretary, 
        such refinancings shall be subject to the provisions of section 
        223(a)(7).
            ``(11) The term `reinsurance agreement' means a contractual 
        obligation under which the Secretary, in exchange for 
        appropriate compensation, agrees to assume a specified portion 
        of the risk of loss that a lender or other party has previously 
        assumed with respect to a mortgage on a multifamily housing 
        project or health care facility.
            ``(12) The term `State' includes the several States and 
        Puerto Rico, the District of Columbia, Guam, the Northern 
        Mariana Islands, American Samoa, and the Virgin Islands.

``SEC. 403. DIRECT MORTGAGE INSURANCE PROGRAM.

    ``(a) Basic Authority.--
            ``(1) First mortgages.--The Secretary may insure first 
        mortgages under this section (including advances on such 
        mortgages during construction) which are secured by multifamily 
        housing projects or health care facilities owned by mortgagors 
        approved by the Secretary under terms and conditions acceptable 
        to the Secretary, and may engage in other types of credit 
        enhancement involving approved mortgagees.
            ``(2) Second mortgages.--The Secretary is authorized to 
        insure mortgages in a secondary position to a mortgage 
        previously insured under this Act, where such mortgage is 
        necessary, as defined by the Secretary, to better protect the 
        interests of the mortgagee or the Secretary, under terms and 
        conditions approved by the Secretary.
    ``(b) Delegation.--The Secretary may permit an approved mortgagee 
to carry out (under a delegation or otherwise, and with or without 
compensation, but subject to audit, exception, or review requirements) 
such credit approval, appraisal, inspection, issuance of commitments, 
approval of insurance of advances, cost certification, endorsement of 
the mortgage note, servicing, property disposition, or other credit 
enhancement functions as the Secretary shall approve as consistent with 
the purpose of this title. All appraisals of property for mortgage 
insurance under this section shall be completed by a Certified General 
Appraiser in accordance with the Uniform Standards of Professional 
Appraisal Practice.

``SEC. 404. QUALIFIED PARTICIPATING ENTITY RISK-SHARING PROGRAM.

    ``(a) Basic Authority.--The Secretary may enter into contractual 
arrangements (including reinsurance and risk-sharing agreements) with 
qualified participating entities to provide credit enhancement for 
first mortgage loans for affordable multifamily housing projects and 
health care facilities and other credit enhancement through a system of 
risk-sharing agreements with such entities.
    ``(b) Authority of Secretary.--The Secretary, upon request of a 
qualified participating entity, is authorized to permit the qualified 
participating entity to insure or reinsure (and make commitments to 
insure or reinsure) under this section any first mortgage, advance, 
thereon, or pool of first mortgages otherwise eligible under this 
section, pursuant to a risk-sharing agreement providing that the 
qualified participating entity will carry out (under a delegation or 
otherwise, and with or without compensation, but subject to audit, 
exception, or review requirements) such credit approval, appraisal, 
inspection, issuance of commitments, approval of insurance of advances, 
cost certification, endorsement of the mortgage note, servicing, 
property disposition, or other functions as the Secretary shall approve 
as consistent with the purpose of this section. All appraisals of 
property for security property for a loan financed under this section 
shall be completed by a Certified General Appraiser in accordance with 
the Uniform Standards of Professional Appraisal Practice.
    ``(c) Program Requirements.--
            ``(1) Eligibility standards.--The Secretary shall establish 
        and enforce standards for eligibility of qualified 
        participating entities under this section, as the Secretary 
        determines to be appropriate.
            ``(2) Mortgage insurance and reinsurance.--Agreements under 
        this section may provide for--
                    ``(A) mortgage insurance through the Secretary of 
                first mortgage loans for affordable multifamily housing 
                projects and health care facilities originated by or 
                through, or purchased by, qualified participating 
                entities; and
                    ``(B) reinsurance, including reinsurance of pools 
                of loans, on affordable multifamily housing projects 
                and health care facilities.
        In entering into risk-sharing agreements under this section 
        covering first mortgages, the Secretary may give preference to 
        first mortgages that are not already in the portfolios of 
        qualified participating entities.
            ``(3) Risk apportionment.--Agreements entered into under 
        this section between the Secretary and a qualified 
        participating entity shall specify the percentage of loss that 
        each of the parties to the agreement will assume in the event 
        of default of the insured or reinsured affordable multifamily 
        housing project or health care facility first mortgage. Such 
        agreements shall specify that the qualified participating 
        entity and the Secretary shall share any loss in accordance 
        with the risk-sharing agreement.
            ``(4) Reimbursement capacity.--Agreements entered into 
        under this section between the Secretary and a qualified 
        participating entity shall provide evidence acceptable to the 
        Secretary of the capacity of such entity to fulfill any 
        reimbursement obligations made pursuant to this section. 
        Evidence of such capacity may include--
                    ``(A) a pledge of the full faith and credit of a 
                qualified participating entity to fulfill any 
                obligations entered into by the entity;
                    ``(B) reserves pledged or otherwise restricted by 
                the qualified participating entity in an amount equal 
                to an agreed upon percentage of the loss assumed by the 
                entity under paragraph (3);
                    ``(C) funds pledged through a State or local 
                guarantee fund; or
                    ``(D) any other form of evidence mutually agreed 
                upon by the Secretary and the qualified participating 
                entity.
            ``(5) Underwriting standards.--
                    ``(A) Use of entity's underwriting standards.--
                Except as provided by subparagraph (B), the Secretary 
                may permit any qualified participating entity to use 
                its own underwriting standards and loan terms and 
                conditions for purposes of underwriting first mortgage 
                loans to be insured under this section, without further 
review by the Secretary: Provided, That the qualified participating 
entity shall certify that it has complied with all applicable statutes 
and requirements of the Secretary.
                    ``(B) Federal underwriting standards.--The 
                Secretary may impose additional or different 
                underwriting criteria and loan terms and conditions for 
                contractual agreements for risk-sharing where the 
                Secretary retains more than 50 percent of the risk of 
                loss. Any other financing permitted on security 
                property for a loan financed under this section shall 
                be expressly subordinate to the first mortgage covering 
                the security property.
    ``(d) Risk-Sharing Alternatives.--
            ``(1) Development of alternatives.--The Secretary may 
        develop a variety of risk-sharing alternatives, including 
        arrangements under which the Secretary assumes an appropriate 
        share of the risk related to long-term first mortgage loans on 
        newly constructed or acquired multifamily rental housing 
        projects and health care facilities, first mortgage 
        refinancings, bridge financing for construction under a first 
        mortgage loan, and other forms of multifamily housing project 
        and health care facility first mortgage lending and other 
        credit enhancement that the Secretary deems appropriate to 
        carry out the purposes of this section.
            ``(2) Nature of alternatives.--Alternatives under paragraph 
        (1) shall be designed--
                    ``(A) to ensure that other parties bear a share of 
                the risk, in percentage amount and in position of 
                exposure, that is sufficient to create strong market-
                oriented incentives for other participating parties to 
                maintain sound underwriting and loan management 
                practices;
                    ``(B) to develop credit mechanisms, including sound 
                underwriting criteria, processing methods, and credit 
                enhancements, through which the Secretary can assist in 
                increasing multifamily housing project and health care 
                facility first mortgage lending as needed to meet the 
                expected need in the United States;
                    ``(C) to provide a more adequate supply of first 
                mortgage credit for sound multifamily rental housing 
                and health care facility projects in underserved urban 
                and rural markets;
                    ``(D) to increase the efficiency, and lower the 
                costs to the Federal Government, of processing and 
                servicing multifamily housing project and health care 
                facility first mortgage loans insured by the Secretary; 
                and
                    ``(E) to improve the quality and expertise of staff 
                and of the Department of Housing and Urban Development 
                and other resources, as required for sound management 
                of reinsurance and other market-oriented forms of 
                credit enhancement.
    ``(e) Non-Federal Participation.--The Secretary shall carry out 
this section, to the maximum extent practicable, with the participation 
of well-established residential mortgage originators, financial 
institutions that invest in multifamily housing project and health care 
facility mortgages, multifamily housing project and health care 
facility sponsors, and such other private sector experts in multifamily 
housing project and health care facility financing as the Secretary 
determines to be appropriate.
    ``(f) Qualification as Affordable Housing.--Multifamily housing 
projects securing loans insured or reinsured under this section shall 
qualify as affordable, only if the housing is occupied by families, 
elderly persons, or persons with disabilities, and bears rents not 
greater than the gross rent for rent-restricted residential units, as 
determined under section 42(g) of the Internal Revenue Code of 1986.

``SEC. 405. HOUSING FINANCE AGENCY PROGRAM.

    ``(a) Basic Authority.--The Secretary may enter into contractual 
arrangements (including risk-sharing agreements with partnerships) with 
qualified housing finance agencies (including entities established by 
States that provide mortgage insurance) to provide Federal credit 
enhancement for first mortgage loans for affordable multifamily housing 
projects and health care facilities through a system of risk-sharing 
agreements with such agencies.
    ``(b) Authority of the Secretary.--The Secretary, upon request of a 
qualified housing finance agency, may insure on a risk-sharing basis, 
and make commitments to insure on a risk-sharing basis, under this 
section any first mortgage, or advance thereon, pursuant to a risk-
sharing agreement providing that the qualified housing finance agency 
will carry out (under a delegation or otherwise and with or without 
compensation, but subject to audit, exception or review requirements) 
such credit approval, appraisal, inspection, issuance of commitments, 
approval of insurance of advances, cost certification, endorsement of 
the mortgage, servicing, property disposition, or other functions as 
the Secretary shall approve as consistent with the purpose of this 
section. All appraisals of property for first mortgage insurance under 
this section shall be completed by a Certified General Appraiser in 
accordance with the Uniform standards of Professional Appraisal 
Practice.
    ``(c) Mortgage Insurance Premiums.--The Secretary shall establish a 
schedule of insurance premium payments for first mortgages insured 
under this section based on the percentage of loss the Secretary may 
assume. Such schedule shall reflect a greater portion of the premium 
inuring to qualified housing finance agencies that assume a greater 
share of the risk apportioned according to subsection (d)(2).
    ``(d) Program Requirements.--
            ``(1) Mortgage insurance.--Agreements under subsection (a) 
        shall provide for full first mortgage insurance through the 
        Secretary of the loans for affordable multifamily housing 
        projects and health care facilities originated by or through 
        qualified housing finance agencies and for reimbursement to the 
        Secretary by such agencies for all or a portion of the losses 
        incurred on the first mortgage loans insured.
            ``(2) Risk apportionment.--Agreements entered into under 
        this section between the Secretary and a qualified housing 
        finance agency shall specify the percentage of loss that each 
        of the parties to the agreement will assume in the event of 
        default of the insured first mortgage on the affordable 
        multifamily project or health care facility. Such agreements 
        shall specify that the qualified housing finance agency and the 
        Secretary shall share any loss in accordance with the risk-
        sharing agreement.
            ``(3) Reimbursement capacity.--Agreements entered into 
        under this section between the Secretary and a qualified 
        housing finance agency shall provide evidence of the capacity 
        of such agency to fulfill any reimbursement obligations made 
        pursuant to this section. Evidence of such capacity may 
        include--
                    ``(A) a pledge of the full faith and credit of a 
                qualified State or local agency to fulfill any 
                obligations entered into by the qualified housing 
                finance agency;
                    ``(B) reserves pledged or otherwise restricted by 
                the qualified housing finance agency in an amount equal 
                to an agreed upon percentage of the loss assumed by the 
                housing finance agency under paragraph (2);
                    ``(C) funds pledged through a State or local 
                guarantee fund; or
                    ``(D) any other form of evidence mutually agreed 
                upon by the Secretary and the qualified housing finance 
                agency.
    ``(e) Underwriting Standards.--
            ``(1) Use of hfa underwriting standards.--The Secretary may 
        permit a qualified housing finance agency to use its own 
        underwriting standards and loan terms and conditions for 
        purposes of underwriting first mortgage loans to be insured 
        under this section without further review by the Secretary: 
        Provided, That the qualified housing agency certifies that it 
        has complied with all applicable statutes and requirements of 
        the Secretary.
            ``(2) Use of federal underwriting standards.--The Secretary 
        may impose additional or different underwriting criteria and 
        loan terms and conditions for contractual agreements where the 
        Secretary retains more than 50 percent of the risk of loss.
    ``(f) Identity of Interest.--Notwithstanding any other provision of 
law, the Secretary may not apply identity of interest provisions to 
agreements entered into with qualified State housing finance agencies 
under this section.
    ``(g) Qualification as Affordable Housing.--Multifamily housing 
projects securing loans insured under this section shall qualify as 
affordable only if the housing is occupied by families, elderly 
persons, or persons with disabilities, and bears rents not greater than 
the gross rent for rent-restricted residential projects, as determined 
under section 42(g) of the Internal Revenue Code of 1986.

``SEC. 406. PREMIUMS AND FEES.

    ``The Secretary shall establish and collect such premiums and fees 
under this title as the Secretary determines appropriate to compensate 
for the risks assumed and related administrative costs of providing 
insurance, reinsurance, or other credit enhancement under this title.

``SEC. 407. CONTRACT OF MORTGAGE INSURANCE.

    ``(a) In General.--All contracts of mortgage insurance under this 
title shall--
            ``(1) be evidenced by the endorsement of the mortgage note 
        for insurance or reinsurance, and shall be incontestable when 
        held by an approved mortgagee to the extent provided in section 
        203(e); and
            ``(2) be subject to, and obligations of, the General 
        Insurance Fund established under section 519.
    ``(b) Uniform Claims Settlement.--
            ``(1) In general.--The Secretary shall have the discretion 
        to establish uniform systems and to settle claims for benefits 
        under the contract of mortgage insurance thereunder in any 
        manner consistent with, and not exceeding, the current 
        statutory authority of sections 207 (g) through (j), 520, and 
        541.
            ``(2) Partial payment of claims.--For partial payments of 
        claims under this title pursuant to section 541, the Secretary 
        may require a mortgagee--
                    ``(A) to accept a partial payment of claim for all 
                such claims; and
                    ``(B) to accept a partial payment of insurance 
                benefits in order to avert a claim where such claim is 
                inevitable, regardless of whether a monetary default 
                has occurred.

``SEC. 408. DEFAULT AND CLAIMS UNDER CONTRACT OF MORTGAGE INSURANCE.

    ``(a) In General.--If a mortgagor fails to make any payment due, or 
provided to be paid by the terms of a mortgage insured, under this 
section, such failure shall be a default under the mortgage. If the 
default continues for a period of 30 days, the mortgagee shall be 
entitled to receive the benefits of the insurance provided by the 
Secretary under this section.
    ``(b) Claims Requirements.--
            ``(1) In general.--The Secretary shall issue requirements 
        under subsection (a). These requirements may be changed from 
        time to time to accommodate advances in technology, including 
        those related to electronic transfers and filings. The 
        requirements shall establish procedures under which the 
        mortgagee shall be required to assign, transfer, and deliver to 
        the Secretary--
                    ``(A) the mortgage so in default and all rights and 
                interests arising thereunder;
                    ``(B) all claims of the mortgagee against the 
                mortgagor or others, arising out of the mortgage 
                transactions;
                    ``(C) all policies of title or other insurance or 
                surety bonds or other guaranties and any and all claims 
                thereunder;
                    ``(D) any balance of the mortgage loan not advanced 
                to the mortgagor;
                    ``(E) any cash, property, or other assets (such as 
                receivables) held by the mortgagee, or to which the 
                mortgagee is entitled to hold or receive for the 
                account of the mortgagor or as excess proceeds arising 
                out of the mortgage or underlying bond transaction and 
                which have not been applied in reduction of the 
                principal amount of the mortgage indebtedness; and
                    ``(F) all records, documents, books, papers, and 
                accounts relating to the mortgage transaction.
            ``(2) Optional procedure.--If a mortgagor defaults under a 
        mortgage insured under section 403, the Secretary may permit 
        the mortgagee to exercise the option, pursuant to procedures 
        established by the Secretary, of foreclosing upon the security 
        property and obtaining title, or obtaining title through deed-
        in-lieu of foreclosure, or otherwise, and conveying title to 
        the Secretary. A mortgagee exercising the option under this 
        paragraph shall comply with the requirements of paragraph (1), 
        except subparagraphs (A) and (D).
    ``(c) Termination of MIP Obligation.--After receipt of an 
application for insurance benefits under this title, the Secretary is 
authorized to terminate the obligation of the mortgagee to pay mortgage 
insurance premium charges.
    ``(d) Amount of Claim.--The total amount of any payout under an 
insurance claim under this title may not exceed the amount which the 
mortgagee would have received if the mortgage indebtedness and any 
other fiscal obligations under the mortgage had been fully satisfied on 
the date of the assignment of the claim or the conveyance of title, 
plus interest and necessary expenses incurred by the mortgagee in 
connection with the claim and preservation of the project, if 
applicable, as determined by the Secretary, and in accordance with any 
contract involving risk-sharing.
    ``(e) Acquisition of Possession or Title.--The Secretary may, 
through foreclosure or otherwise, acquire possession of, or title to, 
any property covered by a mortgage assigned to the Secretary under this 
title.
    ``(f) Powers of Secretary.--
            ``(1) With respect to property.--Notwithstanding any other 
        provisions of law relating to the acquisition, handling, or 
        disposal of real and other property by the United States, the 
        Secretary, in the Secretary's discretion and for the protection 
        of the General Insurance Fund, may--
                    ``(A) pay out of such Fund any expenses or charges 
                in connection with the preservation of any security 
                property under this title;
                    ``(B) deal with, complete, reconstruct, rent, 
                renovate, modernize, insure, make contracts for the 
                management of any property acquired under this title;
                    ``(C) establish suitable agencies for the 
                management or lease of any property acquired under this 
                title; and
                    ``(D) sell or lease any real or personal property 
                (including mortgages) acquired under this title.
            ``(2) With respect to mortgages.--Notwithstanding any other 
        provision of law, the Secretary may pursue to final collection, 
        by way of compromise or otherwise, obligations under mortgages 
        assigned under this title and all claims in connection with any 
        other transactions, under this title.

``SEC. 409. ADJUSTED PREMIUM CHARGE UPON PREPAYMENT.

    ``If the principal obligation of any mortgage accepted for 
insurance or reinsurance under this title is paid in full before the 
maturity date, the Secretary may require the mortgagee to pay an 
adjusted premium charge in such amount as the Secretary determines to 
be equitable, but not in excess of the aggregate amount of the premium 
charges that the mortgagee would otherwise have been required to pay if 
the mortgage had continued to be insured until such maturity date.

``SEC. 410. ENVIRONMENTAL REVIEW.

    ``(a) In General.--In order to assure that the policies of the 
National Environmental Policy Act of 1969 and other provisions of law 
which further the purposes of such Act (as specified in regulations 
issued by the Secretary) are most effectively implemented in connection 
with credit enhancement under this title, and to assure to the public 
undiminished protection of the environment, the Secretary may, under 
such regulations, in lieu of the environmental protection procedures 
otherwise applicable, provide for agreements to endorse for insurance 
mortgages under this title upon the request of the mortgagee, qualified 
entity, or qualified housing finance agency, if the State or unit of 
general local government, as designated by the Secretary in accordance 
with regulations, assumes all of the responsibilities for environmental 
review, decision making, and action pursuant to such Act, and such 
other provisions of law as the regulations of the Secretary may 
specify, that would otherwise apply to the Secretary with respect to 
the insurance of mortgages on particular properties. For purposes of 
this subsection, the terms `unit of general local government' and 
`State' have the same meanings as in section 102(a) of the Housing and 
Community Development Act of 1974.
    ``(b) Implementation.--The Secretary shall issue regulations to 
carry out this section only after consultation with the Council on 
Environmental Quality. Such regulations shall, among other matters, 
provide--
            ``(1) for the monitoring of the performance of 
        environmental reviews under this subparagraph;
            ``(2) subject to the discretion of the Secretary, for the 
        provision or facilitation of training for such performance; and
            ``(3) subject to the discretion of the Secretary, for the 
        suspension or termination by the Secretary of the State or unit 
        of general local government's responsibilities under subsection 
        (a).
    ``(c) Savings.--The Secretary's duty under subsection (b) shall not 
be construed to limit any responsibility assumed by a State or unit of 
general local government with respect to any particular property under 
subsection (a).
    ``(d) Procedure.--The Secretary shall approve a mortgage for the 
provision of mortgage insurance subject to the procedures authorized by 
this section only if, not less than 30 days before such approval, 
before any approval, commitment, or endorsement of mortgage insurance 
on the property by or on behalf of the Secretary, and before any 
agreement by a qualified entity or a qualified housing finance agency 
to provide financing under a risk-sharing agreement with respect to the 
property, the mortgagee or the qualified participating entity or the 
qualified housing finance agency submits to the Secretary a request for 
such approval, accompanied by a certification of the State or unit of 
general local government that meets the requirements of subsection (e). 
The Secretary's approval of any such certification shall be deemed to 
satisfy the Secretary's responsibilities under the National 
Environmental Policy Act of 1969 and such other provisions of law as 
the regulations of the Secretary specify insofar as those 
responsibilities relate to the provision of mortgage insurance on the 
property that is covered by such certification.
    ``(e) Certification.--A certification under the procedures 
authorized by this subsection shall--
            ``(1) be in a form acceptable to the Secretary;
            ``(2) be executed by the chief executive officer or other 
        officer of the State or unit of general local government who 
        qualifies under regulations of the Secretary;
            ``(3) specify that the State or unit of general local 
        government under this section has fully carried out its 
        responsibilities as described under subsection (a); and
            ``(4) specify that the certifying officer consents to 
        assume the status of a responsible Federal official under the 
        National Environmental Policy Act of 1969 and under each 
        provision of law specified in regulations issued by the 
        Secretary insofar as the provisions of such Act or such other 
        provisions of law apply pursuant to subsection (a), and is 
        authorized and consents on behalf of the State or unit of 
        general local government and himself or herself to accept the 
        jurisdiction of the Federal courts for the purpose of 
        enforcement of the responsibilities as such an official.
    ``(f) Approval by States.--If a unit of general local government 
carries out the responsibilities described in subsection (a), the 
Secretary may permit the State to perform those actions of the 
Secretary described in subsection (a) and the performance of such 
actions by the State, where permitted by the Secretary, shall be deemed 
to satisfy the Secretary's responsibilities referred to in the second 
sentence of clause (ii).

``SEC. 411. LEAD-BASED PAINT POISONING PREVENTION.

    ``In carrying out the requirements of section 302 of the Lead-Based 
Paint Poisoning Prevention Act, the Secretary may provide in 
regulations for the assumption of all or part of the Secretary's duties 
under such Act by a State or unit of general local government for 
purposes of this title.

``SEC. 412. SUBSIDY LAYERING.

    ``Section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 shall not apply to any type of insurance, 
reinsurance, or other credit enhancement under this title.

``SEC. 413. LABOR STANDARDS AND COST CERTIFICATION.

    ``This title shall be subject to the labor standards set forth in 
section 212 and the cost certification standards set forth in section 
227.

``SEC. 414. DISCLOSURE OF RECORDS.

    ``Mortgagees under section 403, qualified participating entities 
under section 404, and qualified housing finance agencies under section 
405 shall make available to the Secretary or the Secretary's designee, 
at the Secretary's request, such financial and other records as the 
Secretary deems necessary for purposes of review and monitoring under 
this title.''.

SEC. 11. LABOR STANDARDS AMENDMENT.

    Section 212(a) of the National Housing Act is amended--
            (1) by striking ``or section 210'' in the first sentence; 
        and
            (2) by inserting after the first sentence the following new 
        sentence: ``The provisions of this section shall also apply to 
        the insurance of any mortgage under title IV, except that the 
        provisions of this section shall not apply to--
            ``(1) the insurance of any mortgage that would have been 
        eligible for insurance under regulations of the Secretary 
        implementing section 223(f) of this Act, as that section and 
        those regulations existed immediately before the enactment of 
        the FHA Multifamily Housing Reform Act of 1996; and
            ``(2) work performed by any individual who--
                    ``(A) volunteers--
                            ``(i) to perform a service for civic, 
                        charitable, or humanitarian reasons, without 
                        promise, expectation, or receipt of 
                        compensation for services rendered, but solely 
                        for the personal purpose or pleasure of the 
                        individual; and
                            ``(ii) to provide such services freely and 
                        without pressure or coercion, direct or 
                        implied, from any employer; and
                    ``(B) is not otherwise employed at any time in the 
                construction work.''.

SEC. 12. IMPLEMENTATION.

    (a) Effective Date.--The provisions of, and the amendments made by, 
this part shall become effective upon implementation by the Secretary 
in accordance with this section.
    (b) Administrative Implementation.--Except as otherwise 
specifically provided by title IV of the National Housing Act (as added 
by section 10), the Secretary shall take any administrative actions 
necessary to implement the provisions of, and the amendments made by, 
this part. The Secretary shall complete the initial implementation of 
such provisions and amendments within 180 days of the date of enactment 
of this Act.
    (c) Termination of Insuring Authority.--
            (1) In general.--Effective on the date of implementation of 
        this part, the Secretary may not accept applications or issue 
        firm commitments under any authority of title II of the 
        National Housing Act providing for the insurance of mortgages 
        covering multifamily rental housing or health care facilities 
        (as determined by the Secretary).
            (2) Exceptions.--Paragraph (1) shall not apply to--
                    (A) refinancings pursuant to section 223(a)(7) of 
                the National Housing Act;
                    (B) extension of firm commitments entered into 
                before such date of implementation, but only if the 
                Secretary determines there is good cause for an 
                extension; or
                    (C) outstanding applications not having received a 
                firm commitment if unusual equitable considerations are 
                present.

               TITLE II--HOUSING FOR SPECIAL POPULATIONS

SEC. 20. TERM OF RENTAL ASSISTANCE CONTRACTS FOR SUPPORTIVE HOUSING FOR 
              THE ELDERLY AND SUPPORTIVE HOUSING FOR PERSONS WITH 
              DISABILITIES.

    (a) Supportive Housing for the Elderly.--The first sentence of 
section 202(d)(2) of the Housing Act of 1959 is amended by striking 
``240'' and inserting ``60''.
    (b) Supportive Housing for Persons With Disabilities.--The first 
sentence of section 811(e)(2) of the Cranston-Gonzalez National 
Affordable Housing Act is amended by striking ``240'' and inserting 
``60''.

SEC. 21. TENANT-BASED ASSISTANCE FOR PERSONS WITH DISABILITIES.

    (a) Eligible Entities.--Section 811(d)(4) of the Cranston-Gonzalez 
National Affordable Housing Act is amended--
            (1) by striking the first sentence and inserting the 
        following: ``Tenant-based rental assistance provided under 
        subsection (b)(1) may be provided through private nonprofit 
        organizations and public housing agencies. A public housing 
        agency shall be eligible to apply under this section only for 
        the purposes of providing such assistance.''; and
            (2) by striking the last sentence.
    (b) Definition of Private Nonprofit Organization.--Section 
811(k)(6)(A) of such Act is amended to read as follows:
                    ``(A) that has received tax-exempt status under 
                paragraph (3) or (4) of section 501(c) of the Internal 
                Revenue Code of 1986;''.
    (c) Funding Set-Aside.--Section 811(l)(1) of such Act is amended to 
read as follows:
            ``(1) Allocation of funds for tenant-based assistance.--Of 
        any amount made available for assistance under this section in 
        any fiscal year, the Secretary may use up to 25 percent for 
        tenant-based assistance under subsection (b)(1).''.

SEC. 22. ENVIRONMENTAL PROTECTION.

    (a) Supportive Housing for the Elderly.--Section 202 of the Housing 
Act of 1959 is amended by adding at the end the following new 
subsection:
    ``(k) Environmental Protection.--
            ``(1) Purpose.--The purpose of this subsection is to 
        authorize a procedure for the assumption of environmental 
        review responsibilities of the Secretary by States and units of 
        general local government in connection with capital advances 
        provided under this section. This procedure shall be designed 
        to ensure--
                    ``(A) that the policies of the National 
                Environmental Policy Act of 1969 and other provisions 
                of law which further the purposes of such Act (as 
                specified by the Secretary) are most effectively 
                implemented in connection with the provision of such 
                assistance; and
                    ``(B) undiminished protection of the environment to 
                the public.
            ``(2) Basic authority.--The Secretary may, in lieu of the 
        environmental protection procedures otherwise applicable and in 
        accordance with the provisions of this subsection, provide for 
        the release of funds for particular projects or activities upon 
        the request of a recipient of the assistance, if the State or 
        unit of general local government, as designated by the 
        Secretary, assumes all of the responsibilities for 
        environmental review, decisionmaking, and action pursuant to 
        the Act and the other provisions of law referred to in 
        paragraph (1) that would otherwise apply to the Secretary in 
        connection with the provision of capital grant assistance to 
        such projects or activities.
            ``(3) Procedure.--The Secretary shall approve the release 
        of funds for projects or activities subject to the procedures 
        authorized by this subsection only if the recipient submits to 
        the Secretary a request for such release--
                    ``(A) not less than 15 days before such release, 
                except that this paragraph shall not apply in the case 
                of a project or activity proposed in an area covered by 
                a declaration by the President of a major disaster or 
                emergency under the Robert T. Stafford Disaster Relief 
                and Emergency Assistance Act; and
                    ``(B) before any commitment of funds or other 
                assistance for such projects (other than for 
                environmental studies and such other purposes as the 
                Secretary shall specify, consistent with the Act and 
                the other provisions of law referred to in paragraph 
                (1)).
        The request for release shall be accompanied by a certification 
        by the State or unit of general local government which meets 
        the requirements of paragraph (5). The Secretary's approval of 
        any such certification shall be deemed to satisfy the 
        Secretary's responsibilities under the Act and the other 
        provisions of law referred to in paragraph (1), insofar as 
        those responsibilities relate to the provision of capital grant 
        assistance for projects to be carried out pursuant thereto 
        which are covered by the certification.
            ``(4) Certification.--A certification under the procedures 
        authorized by this subsection shall--
                    ``(A) be in a form acceptable to the Secretary;
                    ``(B) be executed by the chief executive officer or 
                other officer of the State or unit of general local 
                government who qualifies as the certifying officer as 
                determined by the Secretary;
                    ``(C) specify that the State or unit of general 
                local government has fully carried out its 
                responsibilities, as described in paragraph (2); and
                    ``(D) specify that the certifying officer--
                            ``(i) consents to assume the status of a 
                        responsible Federal official under the Act and 
                        the other provisions of law referred to in 
                        paragraph (1), insofar as the provisions of the 
                        Act or the other provisions of law apply 
                        pursuant to paragraph (1); and
                            ``(ii) is authorized and consents on behalf 
                        of the State or unit of general local 
                        government himself or herself to accept the 
                        jurisdiction of the Federal courts for the 
                        purpose of enforcement of the responsibilities 
                        as such an official.
            ``(5) Approval by states.--If a unit of general local 
        government carries out the responsibilities described in 
        paragraph (4), the Secretary may permit the State to perform 
        those actions of the Secretary described in paragraph (3). The 
        performance of such actions by the State shall be deemed 
to satisfy the Secretary's responsibilities referred to in the last 
sentence of paragraph (3).
            ``(6) Implementation.--
                    ``(A) The Secretary shall implement this subsection 
                after consultation with the Council on Environmental 
                Quality. The implementation shall include provision--
                            ``(i) for monitoring of the performance of 
                        environmental reviews under this subsection;
                            ``(ii) in the discretion of the Secretary, 
                        for the provision or facilitation of training 
                        for such performance;
                            ``(iii) in the discretion of the Secretary, 
                        for suspension or termination by the Secretary 
                        of the assumption under paragraph (1); and
                            ``(iv) in the discretion of the Secretary, 
                        for the imposition of appropriate sanctions for 
                        failure to comply with responsibilities assumed 
                        under this subsection, including the denial, 
                        withdrawal, reduction, or abatement of 
                        assistance.
                    ``(B) The Secretary's duty under subparagraph (A) 
                shall not be construed to limit or reduce any 
                responsibility assumed by a State or unit of general 
                local government with respect to any particular project 
                under this subsection.''.
    (b) Supportive Housing for Persons With Disabilities.--Section 811 
of the Cranston-Gonzalez National Affordable Housing Act is amended by 
adding at the end the following new subsection:
    ``(n) Environmental Protection.--
            ``(1) Purpose.--The purpose of this subsection is to 
        authorize a procedure for the assumption of environmental 
        review responsibilities of the Secretary by States and units of 
        general local government in connection with assistance provided 
        under subsection (b)(2). This procedure shall be designed to 
        ensure--
                    ``(A) that the policies of the National 
                Environmental Policy Act of 1969 and other provisions 
                of law which further the purposes of such Act (as 
                specified by the Secretary) are most effectively 
                implemented in connection with the provision of such 
                assistance; and
                    ``(B) undiminished protection of the environment to 
                the public.
            ``(2) Basic authority.--The Secretary may, in lieu of the 
        environmental protection procedures otherwise applicable and in 
        accordance with the provisions of this subsection, provide for 
        the release of funds for particular projects or activities upon 
        the request of a recipient of the assistance, if the State or 
        unit of general local government, as designated by the 
        Secretary, assumes all of the responsibilities for 
        environmental review, decisionmaking, and action pursuant to 
        the Act and the other provisions of law referred to in 
        paragraph (1) that would otherwise apply to the Secretary in 
        connection with the provision of assistance to such projects or 
        activities.
          ``(3) Procedure.--The Secretary shall approve the release of 
        funds for projects or activities subject to the procedures 
        authorized by this subsection only if the recipient submits to 
        the Secretary a request for such release--
                    ``(A) not less than 15 days before such release, 
                except that this paragraph shall not apply in the case 
                of a project or activity proposed in an area covered by 
                a declaration by the President of a major disaster or 
                emergency under the Robert T. Stafford Disaster Relief 
                and Emergency Assistance Act; and
                    ``(B) before any commitment of funds or other 
                assistance for such projects (other than for 
                environmental studies and such other purposes as the 
                Secretary shall specify, consistent with the Act and 
                the other provisions of law referred to in paragraph 
                (1)).
        The request for release shall be accompanied by a certification 
        by the State or unit of general local government which meets 
        the requirements of paragraph (5). The Secretary's approval of 
        any such certification shall be deemed to satisfy the 
        Secretary's responsibilities under the Act and the other 
        provisions of law referred to in paragraph (1), insofar as 
        those responsibilities relate to the provision of assistance 
        for projects to be carried out pursuant thereto which are 
        covered by the certification.
            ``(4) Certification.--A certification under the procedures 
        authorized by this subsection shall--
                    ``(A) be in a form acceptable to the Secretary;
                    ``(B) be executed by the chief executive officer or 
                other officer of the State or unit of general 
local government who qualifies as the certifying officer as determined 
by the Secretary;
                    ``(C) specify that the State or unit of general 
                local government has fully carried out its 
                responsibilities, as described in paragraph (2); and
                    ``(D) specify that the certifying officer--
                            ``(i) consents to assume the status of a 
                        responsible Federal official under the Act and 
                        the other provisions of law referred to in 
                        paragraph (1), insofar as the provisions of the 
                        Act or the other provisions of law apply 
                        pursuant to paragraph (1); and
                            ``(ii) is authorized and consents on behalf 
                        of the State or unit of general local 
                        government himself or herself to accept the 
                        jurisdiction of the Federal courts for the 
                        purpose of enforcement of the responsibilities 
                        as such an official.
            ``(5) Approval by states.--If a unit of general local 
        government carries out the responsibilities described in 
        paragraph (4), the Secretary may permit the State to perform 
        those actions of the Secretary described in paragraph (3). The 
        performance of such actions by the State shall be deemed to 
        satisfy the Secretary's responsibilities referred to in the 
        last sentence of paragraph (3).
            ``(6) Implementation.--
                    ``(A) The Secretary shall implement this subsection 
                after consultation with the Council on Environmental 
                Quality. The implementation shall include provision--
                            ``(i) for monitoring of the performance of 
                        environmental reviews under this subsection;
                            ``(ii) in the discretion of the Secretary, 
                        for the provision or facilitation of training 
                        for such performance;
                            ``(iii) in the discretion of the Secretary, 
                        for suspension or termination by the Secretary 
                        of the assumption under paragraph (1); and
                            ``(iv) in the discretion of the Secretary, 
                        for the imposition of appropriate sanctions for 
                        failure to comply with responsibilities assumed 
                        under this subsection, including the denial, 
                        withdrawal, reduction, or abatement of 
                        assistance.
                    ``(B) The Secretary's duty under subparagraph (A) 
                shall not be construed to limit or reduce any 
                responsibility assumed by a State or unit of general 
                local government with respect to any particular project 
                under this subsection.''.

              TITLE III--EXTENSIONS OF EXISTING AUTHORITY

SEC. 30. EXTENSION OF THE SECTION 211(g)(4) AUCTION PROVISIONS.

    The first sentence of section 221(g)(4)(C)(viii) of the National 
Housing Act is amended by striking ``September 30, 1996'' and inserting 
``December 31, 2005, except that the authority to apply this 
subparagraph in any fiscal year shall be subject to appropriations for 
that year''.

SEC. 31. EXTENSION OF TRANSFERRING EXCESS RECEIPTS TO THE FLEXIBLE 
              SUBSIDY PROGRAM.

    Section 236(f)(3) of the National Housing Act is amended by 
striking ``1994'' and inserting ``2000''.
                                 <all>