[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1798 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1798

     To reform the program of the Department of Housing and Urban 
    Development for disposition of single family properties in the 
         inventory of the Department for use for the homeless.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 5, 1997

 Mr. Baker (for himself and Mr. Bachus) introduced the following bill; 
 which was referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
     To reform the program of the Department of Housing and Urban 
    Development for disposition of single family properties in the 
         inventory of the Department for use for the homeless.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``HUD Property Disposition Reform 
Act''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) while there is a pressing need to serve homeless 
        families and individuals, the program of the Department of 
        Housing and Urban Development for disposition of single family 
        properties for use by the homeless is ineffective;
            (2) Federal housing programs for the homeless must serve 
        homeless families and individuals at a reasonable cost to 
        taxpayers; and
            (3) the single family property disposition program for the 
        homeless is poorly designed and administered, drains critical 
        human and financial resources from the Department of Housing 
        and Urban Development, is fraught with abuse and fraud, and, 
        therefore, is a poor use of taxpayer assets.

SEC. 3. ELIMINATION OF LEASE OPTIONS.

    In carrying out the disposition program (as such term is defined in 
section 6), the Secretary of Housing and Urban Development may not 
dispose of eligible properties--
            (1) by lease with an option to purchase; or
            (2) to any applicant for an acquisition grant under the 
        supportive housing program under any agreement that provides 
        for the lease of the property (including any lease-option to 
        purchase agreement).

SEC. 4. DISCOUNTS FOR PURCHASE OF PROPERTIES.

    In selling any property under the disposition program, the purchase 
price shall be the fair market value of the property, less a discount, 
as follows:
            (1) Insured sales and sales under supportive housing lease-
        option to purchase agreements.--In the case of any property 
        made available for purchase with mortgage insurance available 
        under the National Housing Act or any property purchased 
        pursuant to a lease-option to purchase agreement entered into 
        before the date of the enactment of this Act by an applicant 
        for an acquisition grant under the supportive housing program, 
        the discount shall be--
                    (A) 10 percent, for any property sold in a single 
                transaction involving not more than 4 properties;
                    (B) 15 percent, for any property sold in a single 
                transaction involving 5 or more properties; or
                    (C) notwithstanding subparagraphs (A) and (B), 30 
                percent, for any property located in a revitalization 
                area.
            (2) Uninsured sales.--
                    (A) In general.--In the case of any uninsurable 
                property, the discount shall be--
                            (i) 20 percent, for any property sold in a 
                        single transaction involving not more than 4 
                        properties;
                            (ii) 25 percent, for any property sold in a 
                        single transaction involving 5 or more 
                        properties; or
                            (iii) notwithstanding subparagraphs (A) and 
                        (B), 40 percent, for any property located in a 
                        revitalization area.
                    (B) Uninsurable properties.--For purposes of 
                subparagraph (A), the term ``uninsurable property'' 
                means an eligible property that--
                            (i) is made available for purchase without 
                        any mortgage insurance under the National 
                        Housing Act;
                            (ii) is not a property purchased pursuant 
                        to a lease-option to purchase agreement entered 
                        into before the date of the enactment of this 
                        Act by an applicant for an acquisition grant 
                        under the supportive housing program; and
                            (iii) if purchased by a private nonprofit 
                        organization, is purchased subject to such 
                        binding agreements as the Secretary shall 
require to ensure that the property is used to provide housing for 
homeless persons for a period of not less than 5 years.

SEC. 5. ELIGIBILITY OF PRIVATE NONPROFIT ORGANIZATIONS.

    (a) Additional Requirements.--In carrying out the disposition 
program, the Secretary may dispose of an eligible property to a private 
nonprofit organization only if the organization provides to the 
Secretary--
            (1) a mission statement and the articles of incorporation 
        for the organization, each of which state that a purpose of the 
        organization is providing housing assistance for homeless 
        persons;
            (2) such documentation as the Secretary may require to 
        ensure that the organization--
                    (A) is authorized to execute purchase agreements; 
                and
                    (B) has not less than 2 years experience in 
                operating housing and providing supportive services for 
                homeless persons.
The requirements under this subsection shall be additional to any 
requirements regarding eligibility of private nonprofit organizations 
for participation in the disposition program that may be established by 
the Secretary.
    (b) Existing Approved Applicants.--Notwithstanding subsection (a), 
any private nonprofit organization that, before the date of the 
enactment of this Act, is approved by the Secretary to lease or 
purchase properties under the disposition program shall not be required 
to comply with the requirements under such subsection to be eligible to 
purchase such properties after the date of enactment under the program 
as modified by this Act.

SEC. 6. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Disposition program.--The term ``disposition program'' 
        means the program under subpart E of part 291 of title 24, Code 
        of Federal Regulations, for disposition of single family 
        properties acquired by the Department of Housing and Urban 
        Development for use by homeless persons.
            (2) Eligible property.--The term ``eligible property'' 
        means a vacant property that--
                    (A) consists of not more than 4 dwelling units;
                    (B) is acquired by the Secretary under the Mutual 
                Mortgage Insurance Fund, the General Insurance Fund, or 
                the Special Risk Insurance Fund, each established under 
                the National Housing Act; and
                    (C) is not committed for use or disposition under 
                any program of the Department of Housing and Urban 
                Development other than the disposition program.
            (3) Revitalization area.--The term ``revitalization area'' 
        means a neighborhood that, as determined by the Secretary--
                    (A) has a significant concentration of vacant 
                properties, including properties needing extensive 
                repairs that have been in the inventory of the 
                Department of Housing and Urban Development not less 
                than 6 months, or a longer period as determined by the 
                Secretary;
                    (B) exhibits other characteristics of economic 
                distress; and
                    (C) has been targeted by the locality in which it 
                is located for establishing affordable housing and 
                providing adequate supportive services.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (5) Supportive housing program.--The term ``supportive 
        housing program'' means the supportive housing program under 
        subtitle C of title IV of the Stewart B. McKinney Homeless 
        Assistance Act.
                                 <all>