[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 853 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 853

 To protect the financial interests of the Federal Government through 
debt restructuring and subsidy reduction in connection with multifamily 
    housing; to enhance the effectiveness of enforcement provisions 
relating to single family and multifamily housing (including amendments 
 to the Bankruptcy code); to consolidate and reform the management of 
         multifamily housing programs; and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 9, 1997

Mr. D'Amato (by request) introduced the following bill; which was read 
  twice and referred to the Committee on Banking, Housing, and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
 To protect the financial interests of the Federal Government through 
debt restructuring and subsidy reduction in connection with multifamily 
    housing; to enhance the effectiveness of enforcement provisions 
relating to single family and multifamily housing (including amendments 
 to the Bankruptcy code); to consolidate and reform the management of 
         multifamily housing programs; 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 ``Housing 2020: 
Multifamily Management Reform Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows--

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
                   TITLE I--MULTIFAMILY RESTRUCTURING

Sec. 101. Short title.
                     Subtitle A--Housing Provisions

Sec. 110. FHA multifamily restructuring.
Sec. 111. Section 8 contract renewals.
Sec. 112. Reuse and rescission of certain recaptured budget authority.
 Subtitle B--Extension of Time for Payment of Tax Attributable to FHA 
                        Portfolio Restructuring

Sec. 120. Extension of time for payment of tax attributable to FHA 
                            multifamily restructuring.
                     TITLE II--HOUSING ENFORCEMENT

Sec. 201. Short title.
Sec. 202. Implementation.
           Subtitle A--Single Family and Multifamily Housing

Sec. 210. MRB exemption from automatic stay provisions of Bankruptcy 
                            Code.
Sec. 211. Authorize MRB to immediately suspend mortgagees.
Sec. 212. Extension of equity skimming to other single family and 
                            multifamily housing programs.
Sec. 213. Inclusion of criminal equity skimming as a money laundering 
                            offense.
Sec. 214. Effect of criminal equity skimming on mortgage insurance.
Sec. 215. Civil money penalties against mortgagees, lenders, and other 
                            participants in FHA programs.
                    Subtitle B--Multifamily Housing

Sec. 220. Civil money penalties against general partners, officers, 
                            directors, and certain managing agents of 
                            multifamily projects.
Sec. 221. Civil money penalties for noncompliance with section 8 HAP 
                            contracts.
Sec. 222. Extension of double damages remedy.
Sec. 223. Obstruction of Federal audits.
Sec. 224. Disposition of amounts recovered under the Program Fraud 
                            Civil Remedies Act.
Sec. 225. Extension of access to records to prevent fraud and abuse.
Sec. 226. Conditions for renewal or extension of HAP contracts.
                 Subtitle C--FHA Single Family Housing

Sec. 230. Termination of mortgagee origination approval.
TITLE III--EXEMPTION OF HUD AND USDA MULTIFAMILY LOAN FORECLOSURES AND 
                RELATED ACTIONS FROM THE BANKRUPTCY STAY

Sec. 301. Authority to appoint receiver or take other action not stayed 
                            under section 362(b)(8).
Sec. 302. Authority to foreclose or take other action notwithstanding 
                            the automatic stay.
       TITLE IV--FHA MULTIFAMILY HOUSING CONSOLIDATION AND REFORM

Sec. 401. Short title.
Sec. 402. Implementation.
                  Subtitle A--FHA Multifamily Housing

Sec. 410. Basic authority.
Sec. 411. Labor standards amendment.
Sec. 412. Implementation.
   Subtitle B--Extensions of Existing Authority and Other Provisions

Sec. 420. Extension of the section 221(g)(4) auction provisions.
Sec. 421. Extension of transferring excess receipts to the flexible 
                            subsidy program.
Sec. 422. Discretionary authority to regulate rents for specific 
                            multifamily property.
Sec. 423. Expansion of partial payment of claims authority to cover 
                            health care facilities.
Sec. 424. Environmental protection under section 202 and section 811 
                            programs.
Sec. 425. Assignment of regulatory agreements in connection with sale 
                            of mortgages held by HUD.
                     TITLE V--REHABILITATION GRANTS

Sec. 501. Capital grants for section 236 and other formerly insured 
                            projects.

SEC. 2. FINDINGS AND PURPOSES.

   (a) Findings.--The Congress finds that--
            (1) we have a shared national interest in creating safe, 
        decent, and affordable housing because, for all Americans, 
        housing is an essential building block toward holding a job, 
        getting an education, and strengthening our communities;
            (2) millions of Americans--including elderly citizens, 
        persons with disabilities, and low-income families with 
        children--have critical housing needs that must be met in order 
        to maintain stable, vibrant communities;
            (3) the American people recognized this need 23 years ago 
        when Congress and the Administration enacted the section 8 
        Housing Assistance Payments program, which millions of 
        Americans have used as a stepping stone toward greater 
        stability, independence, and self-sufficiency;
            (4) some 20 years after enactment, a record number of 
        section 8 contracts are expiring, including 1.8 million units 
        in 1998, and 2.7 million units between 1998 and 2002;
            (5) if we do not renew these contracts, 4.4 million 
        Americans in 1998 alone--90 percent of whom are elderly 
        residents, persons with disabilities, and low-income families 
        with children--are at risk of losing their homes, because of 
        sharp rent increases;
            (6) because of the shortage of affordable housing, we 
        cannot afford to let any of our Nation's affordable housing 
        units become unavailable;
            (7) this challenge occurs at a time of shrinking Federal 
        resources, and we have an undeniable responsibility both to 
        balance the Federal budget and to maximize every taxpayer 
        dollar spent;
            (8) we must renew section 8 contracts in a way that lowers 
        excessive subsidies, protects families, preserves 
        neighborhoods, and ensures safe, decent, and affordable housing 
        until the year 2020 and beyond;
            (9) we must also renew section 8 contracts in a way that 
        prevents a massive default on FHA-insured mortgages;
            (10) at the same time, we must ensure that owners meet 
        their obligations to both tenants and the Federal Government by 
        maintaining safe, decent, and affordable living conditions;
            (11) under a framework enacted by Congress, HUD has begun 
        major reforms to address these problems and has begun a major 
        overhaul of its organization, streamlining operations, 
        improving management, building stronger partnerships with State 
        and local agencies, and improving its ability to take 
        enforcement actions where necessary to assure that its programs 
        serve their intended purposes;
            (12) these efforts at reform are limited by a system of 
        outdated rules and excessive government regulation that hampers 
        our ability to propose innovative solutions, solve problems, 
        and hold bad owners accountable; and
            (13) for America to meet its housing commitments, 
        legislation is now needed to help avert a section 8 renewal 
        crisis, strip away outdated rules, provide necessary 
        enforcement tools, and empower HUD and public housing agencies 
        to meet the needs of America's families.
    (b) Purpose.--It is the purpose of this Act--
            (1) to extend affordable housing for elderly residents, 
        persons with disabilities, and low-income families with 
        children until the year 2020 and beyond;
            (2) to reaffirm America's historic commitment to safe, 
        decent, and affordable housing and to remove the obstacles to 
        meeting that goal;
            (3) to protect tenants and preserve communities while 
        sharply lowering costs to the American taxpayer;
            (4) to continue the complete overhaul of HUD management;
            (5) to end excessive taxpayer subsidies of the section 8 
        program and bring section 8 rents in line with fair market 
        value;
            (6) to take the steps necessary to prevent the default of 
        insured section 8 properties;
            (7) to create a new compact with owners of multifamily 
        housing in which they continue to provide safe, decent, and 
        affordable housing in exchange for tax incentives that will 
        help them prevent default;
            (8) to streamline and simplify HUD rental housing 
        operations by cutting excessive regulation and consolidating 
        FHA multifamily insurance programs into one simple, 
        understandable, user-friendly system;
            (9) to provide more choice for tenants in a way that 
        creates more hope and opportunity;
            (10) to achieve greater accountability of taxpayer funds by 
        empowering the Federal Government to take firmer, quicker, and 
        more effective action to crack down on fraud and abuse in HUD 
        programs and to pursue bad owners;
            (11) to rehabilitate properties when necessary in order to 
        maintain safe, clean living conditions while incurring no 
        additional cost to taxpayers;
            (12) through these comprehensive measures, to reform, 
        consolidate, and strengthen enforcement of HUD's affordable 
        housing programs; and
            (13) to ensure safe, decent, and affordable housing 
        opportunities for American families well into the next century.

                   TITLE I--MULTIFAMILY RESTRUCTURING

                     Subtitle A--Housing Provisions

SEC. 101. SHORT TITLE.

    This subtitle may be cited as the ``Housing Opportunity Act of 
1997''.

                     Subtitle A--Housing Provisions

SEC. 110. FHA MULTIFAMILY RESTRUCTURING.

    (a) Purpose and Goals.--
            (1) Purpose.--The purpose of the program under this section 
        is to permit the Secretary to protect the financial interests 
        of the Federal Government through debt restructuring and 
        subsidy reduction in connection with multifamily housing 
        projects described in subsection (c). The restructuring may 
        include recasting an existing mortgage insured under the 
        National Housing Act or execution of a new mortgage, and the 
        recast or new mortgage may be insured under the National 
        Housing Act or may be uninsured.
            (2) Goals.--The Secretary shall carry out the purpose of 
        this program, to the extent practicable, in a manner that takes 
        into account local housing market conditions and addresses the 
        goals set forth below. In addressing the goals, the Secretary 
        shall have discretion to balance competing goals, as such goals 
        may relate to an individual project. The goals of this program 
        are to--
                    (A) maintain existing affordable housing stock in a 
                decent, safe, and sanitary condition;
                    (B) minimize adverse impacts on tenants and 
                neighborhoods;
                    (C) support fair housing strategies; and
                    (D) encourage responsible ownership and management 
                of property.
    (b) Notice to Local Government and Tenants.--In carrying out this 
section, the Secretary shall develop procedures to provide appropriate 
and timely notice to the unit of general local government where the 
project is located, to the tenants of the project, and to the holder of 
the insured mortgage of participation by the owner in restructuring and 
subsidy reduction under this section.
    (c) Project Eligibility.--This section applies to any multifamily 
housing project with a mortgage insured by the Secretary under the 
National Housing Act, if--
            (1) the multifamily housing project is covered in whole or 
        in part by a project-based assistance contract under--
                    (A) the new construction or substantial 
                rehabilitation program under section 8(b)(2) of 
the United States Housing Act of 1937 (as in effect before October 1, 
1983);
                    (B) the property disposition program under section 
                8(b) of that Act;
                    (C) the loan management set-aside program under 
                section 8(b) of that Act;
                    (D) the project-based certificate program under 
                section 8(d)(2) of that Act;
                    (E) section 23 of the United States Housing Act of 
                1937 Act (as in effect before January 1, 1975);
                    (F) the preservation program under the Emergency 
                Low Income Housing Preservation Act of 1987 or the Low-
                Income Housing Preservation and Resident Homeownership 
                Act of 1990;
                    (G) the rent supplement program under section 101 
                of the Housing and Urban Development Act of 1965;
                    (H) section 8 of the United States Housing Act of 
                1937, following conversion from assistance under 
                section 101 of the Housing and Urban Development Act of 
                1965; or
                    (I) section 236(f)(2) of the National Housing Act;
            (2) the Secretary determines that the owner of the 
        multifamily housing project has not engaged in material adverse 
        financial or managerial actions or omissions with regard to the 
        project; and with regard to other projects, is not engaged in 
        such actions or omissions that would constitute a pattern of 
        mismanagement that would warrant suspension or debarment by the 
        Secretary; and
            (3) the rents for the project exceed, as determined by the 
        Secretary, market rents for the market area in which the 
        project is located.
    (d) Designee; Conditions; Authorized Actions.--
            (1) Designee.--In carrying out this program, the Secretary 
        may designate State housing finance agencies, housing agencies, 
        nonprofit organizations, and other entities (including, but not 
        limited to, legal, accounting, and investment firms) 
        (separately or in conjunction with each other) that the 
        Secretary determines to be qualified to carry out specified 
        activities under this section. The Secretary, by delegation, 
        contract, cooperative agreement, or otherwise, may enter into 
        relationships with one or more designees, which provide for the 
        assumption by the designee of some or all of the functions, 
        obligations, responsibilities, and benefits of the Secretary 
        authorized by subsections (d)(3)(A) and (d)(3)(B) and 
        subsection (e).
            (2) Conditions.--The Secretary or designee may take actions 
        under paragraph (3) to make the multifamily housing project 
        financially viable at market rents. The Secretary or designee 
        may take these actions when the Secretary or designee 
        determines that the actions are economically prudent and 
        feasible.
            (3) Authorized actions.--(A) The Secretary or the designee 
        may take the actions described in subparagraph (B), subject to 
        obtaining necessary consent to ensure that contract rights are 
        not abrogated, including consent by (i) the Government National 
        Mortgage Association if it owns a mortgage insured by the 
        Secretary, (ii) an issuer under the mortgage-backed securities 
        program of the Association, subject to the responsibilities of 
        the issuer to its security holders and the Association under 
        that program, and (iii) the parties to any contractual 
        agreement which the Secretary proposes to modify or 
        discontinue.
            (B) Notwithstanding any other law, the Secretary or 
        designee may--
                    (i) fully or partially pay a claim for mortgage 
                insurance (which may be made whether or not the 
                mortgage is in default and, in the case of partial 
                payment of a claim, may include requiring a recasting 
                of any provisions of the mortgage (such as changing the 
                term, interest, or amortization) in order to accord 
                consistency with then-current market conditions);
                    (ii) remove or modify (or agree to do so) mortgage, 
                regulatory, use agreement, or other restrictions with 
                respect to a project;
                    (iii) purchase reinsurance or otherwise transfer 
                economic interests in insurance contracts or premiums;
                    (iv) take appropriate action to induce 
                participation of owners, lenders, servicers, third 
                parties, and other entities;
                    (v) provide for restructuring of the mortgage 
                (which may include reduction of the outstanding 
                mortgage amount and prepayment of principal to the 
                mortgagee, if appropriate);
                    (vi) make payment from the appropriate insurance 
                fund under the National Housing Act for activities 
                under this subtitle, which may include payments for 
                repairs and rehabilitation; and
                    (vii) take other actions to enable the project to 
                be financially viable at market rents.
            (C) In addition to the actions described in subparagraph 
        (B), the Secretary may provide for the renewal of section 8 
        contracts in accordance with section 405(a) of the Balanced 
        Budget Downpayment Act, I.
    (e) Rental Assistance.--
            (1)(A) Except as provided in paragraph (2), in connection 
        with the termination of any assistance contract described in 
        subsection (c)(1), the Secretary or a designee shall provide 
        tenant-based assistance under section 8 to--
                    (i) each assisted family (other than a family 
                already receiving tenant-based assistance) residing in 
                the project at the time the assistance under subsection 
                (c) terminates; and
                    (ii) each very low-income family whose rent would 
                increase due to restructuring or subsidy reduction 
                under this section and whose increased rent would 
                exceed 30 percent of the adjusted income of the family 
                as determined under section 3(a)(1) of the United 
                States Housing Act of 1937.
            (B) Notwithstanding section 8(c)(1) and section 8(o)(1) of 
        the United States Housing Act of 1937, in the case of families 
        described in subparagraph (A) that reside in a project 
        described in subsection (c) where the reasonable rent (which 
        rent shall include any amount allowed for utilities and shall 
        not exceed comparable market rents for the relevant housing 
        market area) exceeds the fair market rent limitation or the 
        payment standard, as applicable, the amount of assistance for 
        the family shall be determined based on such reasonable rent. 
        Accordingly, for the certificate program under section 8(b), 
        the maximum monthly rent under the contract (plus any amount 
        allowed for utilities) shall be such reasonable rent for the 
        unit; and for the voucher program under section 8(o), the 
        payment standard shall be deemed to be such reasonable rent for 
        the unit.
            (2) Notwithstanding paragraph (1) and the requirements of 
        section 8(d)(2), the Secretary or designee shall, for an 
        otherwise eligible project, provide for project-based 
        assistance, at rents not exceeding market rents--
                    (A) for projects located in areas where the 
                Secretary or designee determines, based on housing 
                market indicators, such as exceptionally low vacancy 
                rates or exceptionally high absorption rates, that it 
                is difficult for families receiving tenant-based 
                assistance to find suitable units; and
                    (B) for projects with 90 percent or more occupancy 
                by elderly families, disabled families, or a 
                combination of such families.
    (f) Nondiscrimination Against Certificate Holders.--In the case of 
multifamily rental housing under this section that is receiving, or 
(except for insurance referred to in paragraph (4)) has received within 
two years before the effective date of this section, the benefit of 
Federal assistance from an agency of the United States, the owner shall 
not refuse to lease a reasonable number of units to holders of 
certificates or vouchers under section 8 because of the status of the 
prospective tenants as certificate or voucher holders. The Secretary 
shall establish reasonable time periods for applying the requirement of 
this subsection, taking into account the total amount of the assistance 
and the relative share of the assistance compared to the total cost of 
financing, developing, rehabilitating, or otherwise assisting a 
project. Federal assistance for purposes of this subsection shall 
mean--
            (1) project-based assistance under the United States 
        Housing Act of 1937;
            (2) assistance under title I of the Housing and Community 
        Development Act of 1974;
            (3) assistance under title II of the Cranston-Gonzalez 
        National Affordable Housing Act;
            (4) mortgage insurance under the National Housing Act;
            (5) low-income housing tax credits under section 42 of the 
        Internal Revenue Code of 1986;
            (6) assistance under title IV of the Stewart B. McKinney 
        Homeless Assistance Act;
            (7) assistance under this section; and
            (8) assistance under any other programs designated by the 
        Secretary.
    (g) Participation by Tenant Organizations and Nonprofit 
Organizations.--The Secretary shall establish procedures to facilitate 
the voluntary sale or transfer of multifamily housing projects under 
this section to, and management or other participation by, tenant 
organizations and community-based nonprofit and public agency 
purchasers meeting such reasonable qualifications as may be established 
by the Secretary.
    (h) Definitions.--For purposes of this section--
            (1) Disabled family.--The term ``disabled family'' means an 
        individual or family that qualifies as a disabled family under 
        section 3(b)(3)(B) of the United States Housing Act of 1937.
            (2) Elderly family.--The term ``elderly family'' means an 
        individual or family that qualifies as an elderly family under 
        section 3(b)(3)(B) of the United States Housing Act of 1937.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (4) Section 8.--The term ``section 8'' means section 8 of 
        the United States Housing Act of 1937 and references to 
        subsections of section 8 means subsections of section 8 of that 
        Act.
            (5) Very low-income family.--The term ``very low-income 
        family'' means a very low-income family as defined in section 
        3(b)(2) of the United States Housing Act of 1937.
    (i) Effect on Other Authority.--This section does not limit the 
Secretary's authority under other provisions of law.

SEC. 111. SECTION 8 CONTRACT RENEWALS.

    Section 405(a) of the Balanced Budget Downpayment Act, I is amended 
by inserting at the end the following: ``Notwithstanding the preceding 
sentence, upon the expiration of a contract with rent levels that 
exceed the Section 8 Existing Fair Market Rents--
            ``(1) If the Secretary determines that--
                    ``(A) the primary financing or mortgage insurance 
                for the multifamily housing project that is covered by 
                that expiring contract was provided by a unit of State 
                government (or an agency or instrumentality of a unit 
                of State government) and the financing does not involve 
                mortgage insurance under the National Housing Act;
                    ``(B) the project is a project financed under 
                section 202 of the Housing Act of 1959 or section 515 
                of the Housing Act of 1949; or
                    ``(C) the project is a project described in section 
                110(c) of the Housing Opportunity Act of 1997 and would 
                not be financially viable at market rents even if all 
                debt service obligations of the mortgagor were removed 
                or deferred,
        the Secretary, at the request of the owner and, in the case of 
        a project under subparagraph (A), the unit of State government 
        (or its agency or instrumentality), shall, for an otherwise 
        eligible project, provide project-based assistance under 
        section 8, in accordance with terms and conditions prescribed 
        by the Secretary, at rent levels that are equal to those under 
        the expiring contract as of the date on which the contract 
        expires.
            ``(2) If the project is not a project covered by paragraph 
        (1), but is a project described in section 110(c) of the 
        Housing Opportunity Act of 1997, the Secretary, at the request 
        of the owner, may provide project-based or tenant-based 
        assistance under section 8, in accordance with terms and 
        conditions prescribed by the Secretary, at rent levels that do 
        not exceed market rents. The Secretary shall provide project-
        based assistance for the following categories of projects (if 
        the project is otherwise eligible)--
                    ``(A) projects located in areas where the Secretary 
                or designee determine, based on housing market 
                indicators, such as exceptionally low vacancy rates or 
                exceptionally high absorption rates, that it is 
                difficult for families receiving tenant-based 
                assistance to find suitable units; and
                    ``(B) projects that have 90 percent or more 
                occupancy by elderly families, disabled families, or a 
                combination of such families.
            ``(3) For any project that is a project described in 
        section 110(c) of the Housing Opportunity Act of 1997, the 
        Secretary, at the request of the owner, may provide project-
        based assistance under section 8, in accordance with terms and 
        conditions prescribed by the Secretary. If the Secretary 
        determines to provide project-based assistance under this 
        paragraph, the rents shall not exceed rents approved by the 
        Secretary, based on an analysis of a budget for the project, 
        which, in any case, may not exceed rent levels equal to those 
        under the expiring contract as of the date on which the 
        contract expires. The Secretary may only approve rents under 
        this paragraph for projects with an aggregate number of units 
        that is no more than 10 percent of the units in all projects 
        subject to actions authorized by section 110 of the Housing 
        Opportunity Act of 1997, minus the number of units in projects 
        described in paragraph (1)(C), paragraph (2)(A), or paragraph 
        (2)(B).''.

SEC. 112. REUSE AND RESCISSION OF CERTAIN RECAPTURED BUDGET AUTHORITY.

    Section 8(bb) of the United States Housing Act of 1937 is amended 
to read as follows:
    ``(bb) Reuse and Rescission of Certain Recaptured Budget 
Authority.--If a project-based assistance contract for a project 
subject to actions authorized by section 110 of the Housing Opportunity 
Act of 1997 is terminated or amended as part of restructuring under 
section 110, the Secretary shall recapture the budget authority not 
required for the terminated or amended contract and, without regard to 
section 218 of the Departments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies Appropriations Act, 1997, 
use such amounts as are necessary to provide housing assistance for the 
same number of families covered by such contract for the remaining term 
of such contract, under a contract providing for project-based or 
tenant-based assistance. The amount of budget authority saved as a 
result of the shift to project-based or tenant-based assistance shall 
be rescinded.''.

 Subtitle B--Extension of Time for Payment of Tax Attributable to FHA 
                       Multifamily Restructuring

SEC. 120. EXTENSION OF TIME FOR PAYMENT OF TAX ATTRIBUTABLE TO FHA 
              MULTIFAMILY RESTRUCTURING.

    Subchapter 62B of Subtitle F of the Internal Revenue Code of 1986 
is amended by adding at the end the following new section:

``SEC. 6168. EXTENSION OF TIME FOR PAYMENT OF TAX ATTRIBUTABLE TO FHA 
              PORTFOLIO RESTRUCTURING.

    ``(a) In General.--
            ``(1) Debt reduction.--In the case of a qualified reduction 
        of the unpaid principal balance of indebtedness secured by 
        qualified section 8 housing, the taxpayer may elect to defer 
        the tax attributable to the qualified reduction.
            ``(2) Gain from sale.--In the case of a qualified sale of 
        qualified section 8 housing, the taxpayer may elect to defer 
        the tax attributable to the qualified sale.
    ``(b) Amount of Deferred Tax.--
            ``(1) In general.--The tax attributable to a qualified 
        reduction or a qualified sale is the excess, if any, of--
                    ``(A) the amount of the taxpayer's tax under 
                section 1 or section 11 for the taxable year (without 
                regard to section 172(a), section 1212(a), or section 
                1212(b)); over
                    ``(B) the amount of the taxpayer's tax under 
                section 1 or section 11 for the taxable year (without 
                regard to section 172(a), section 1212(a), or section 
                1212(b)) determined without regard to the income under 
                section 61(a)(12) attributable to a qualified reduction 
                or the gain under section 1001 attributable to a 
                qualified sale.
            ``(2) Tax attributes.--Any tax attributes utilized in 
        determining the amount of tax under subparagraph (b)(1)(i) 
        shall be considered utilized for all purposes of this Title.
    ``(c) Deferral Period.--
            ``(1) Qualified reduction.--Except as provided in 
        subsection (d), the tax deferred pursuant to paragraph (a)(1) 
        shall be payable in equal annual installments in accordance 
        with the following table:

Percentage of Qualified               
  Reduction                         Year of Payment
    Over 30 percent--less than 34 
        percent.
                                        HAP contract year
    34 percent--less than 36 
        percent.
                                        HAP contract year plus 1 year
    36 percent--less than 38 
        percent.
                                        HAP contract year plus 2 years
    38 percent--less than 40 
        percent.
                                        HAP contract year plus 3 years
    40 percent--less than 42 
        percent.
                                        HAP contract year plus 4 years
    42 percent--less than 44 
        percent.
                                        HAP contract year plus 5 years
    44 percent--less than 46 
        percent.
                                        HAP contract year plus 6 years
    46 percent--less than 48 
        percent.
                                        HAP contract year plus 7 years
    48 percent--less than 50 
        percent.
                                        HAP contract year plus 8 years
    50 percent--less than 75 
        percent.
                                        HAP contract year plus 9 years
            ``(2) Qualified sale.--Except as provided in subsection 
        (d), the tax deferred pursuant to paragraph (a)(2) shall be 
        payable in seven equal annual installments beginning with the 
        HAP contract year.
    ``(d) Acceleration of Deferred Tax.--Any remaining tax deferred 
under subsection (a) shall be payable for the taxable year of the 
taxpayer in which any of the following occurs--
            ``(1) The sale of exchange of the qualified section 8 
        housing property;
            ``(2) The sale or exchange of all or a portion of the 
        taxpayer's interest in a partnership or S corporation that 
        holds (or held) the qualified section 8 property (but only to 
        the extent of the portion of the interest sold or exchanged);
            ``(3) The gift of all or a portion of the taxpayer's 
        interest in a partnership or S corporation that holds (or held) 
        the qualified section 8 property (but only to the extent of the 
        portion of the interest transferred);
            ``(4) The death of the taxpayer;
            ``(5) A refinancing of the mortgage on the qualified 
        section 8 housing that is in excess of the refinanced debt, 
        unless the excess refinancing proceeds are used to improve the 
        qualified section 8 housing;
            ``(6) The failure of the qualified section 8 housing to 
        meet the qualification as a qualified low-income housing 
        project as defined in section 42(g)(1)(B) and section 42(g)(2-
        8); or
            ``(7) Any event specified in regulations prescribed by the 
        Secretary.
    ``(e) Time of Payment.--The due date for the payment of the 
installment of the tax deferred pursuant to subsection (a) or 
accelerated pursuant to subsection (d) shall be the due date (without 
extensions) for the taxpayer's return for the applicable year. For 
purposes of section 6601, in the case of an election under subsection 
(a), the date prescribed for payment of the installment of the tax 
deferred shall be the date specified in this subsection (e).
    ``(f) Election.--Any election under subsection (a) shall be made 
not later than the time prescribed by section 6072 for the filing of 
the return of tax imposed by section 1 or section 11 (including 
extensions thereof) for the taxable year in which the qualified 
reduction or qualified sale occurred and shall be made in such manner 
as the Secretary shall by regulations prescribe.
    ``(g) Definitions.--
            ``(1) Qualified reduction.--The term `qualified reduction' 
        means a reduction of more than 30 percent but less than 75 
        percent of the unpaid principal balance of indebtedness secured 
        by qualified section 8 housing that occurs as a result of a 
        payment by the Federal Housing Administration of a claim under 
        Title II of the National Housing Act (as described in section 
        2(d) of the Housing Opportunity Act of 1997), provided that the 
        reduction occurs prior to December 31, 2000, or the date that 
        is 60 days prior to the first expiration of a HAP contract with 
        respect to the qualified section 8 housing, whichever occurs 
        first.
            ``(2) Qualified sale.--The term `qualified sale' means a 
        sale or exchange of qualified section 8 housing to an 
        organization described in section 501(c)(3) and section 2(g) of 
        the Housing Opportunity Act of 1997, provided that the sale 
        occurs prior to December 31, 2000, or the date that is 60 days 
        prior to the first expiration of a HAP contract with respect to 
        the qualified section 8 housing, whichever occurs first.
            ``(3) Qualified section 8 housing.--The term `qualified 
        section 8 housing' means any multifamily housing described in 
        section 2(c) of the Housing Opportunity Act of 1997.
            ``(4) Unpaid principal balance.--The term `unpaid principal 
        balance' means unpaid principal plus accrued and unpaid 
        interest as of the date of introduction of the FHA Multifamily 
        Housing Reform, Consolidation, and Enforcement Act of 1997, 
        except that all accrued and unpaid interest shall be considered 
        in determining the percentage of the qualified reduction for 
        purposes of subsection (c)(1).
            ``(5) HAP contract.--The term `HAP contract' means a 
        contract between the owner of qualified section 8 housing and 
        the Department of Housing and Urban Development by which 
        assistance payments are made to the owner in accordance with 
        the provisions described in section 2(d) of the Housing 
        Opportunity Act of 1997.
            ``(6) HAP contract year.--The term `HAP contract year' 
        means the year in which the first HAP contract with respect to 
        the qualified section 8 housing at the time of the qualified 
        reduction would have expired.
    ``(h) Effective Date.--This section shall be effective upon 
enactment.''.

                     TITLE II--HOUSING ENFORCEMENT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Housing Enforcement Act of 1997''.

SEC. 202. 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.

           Subtitle A--Single Family and Multifamily Housing

SEC. 210. MRB EXEMPTION FROM AUTOMATIC STAY PROVISIONS OF BANKRUPTCY 
              CODE.

    Section 202(c)(3) of the National Housing Act is amended by 
inserting at the end the following:
    ``(f) Exemption From Bankruptcy Stay.--The stay provisions of title 
11 of the United States Code shall not preclude or limit the exercise 
by the Board of its right to take an administrative action against a 
mortgagee as provided in this paragraph.''.

SEC. 211. AUTHORIZE MRB TO IMMEDIATELY SUSPEND MORTGAGEES.

    Section 202(c)(3)(C) of the National Housing Act is amended by 
inserting after the first sentence the following new sentence: 
``Notwithstanding paragraph (4)(A), a suspension shall be effective 
upon issuance by the Board if there exists adequate evidence in the 
determination of the Board that immediate action is required to protect 
the financial interests of the Department or the public.''.

SEC. 212. EXTENSION OF EQUITY SKIMMING TO OTHER SINGLE FAMILY AND 
              MULTIFAMILY HOUSING PROGRAMS.

    Section 254 of the National Housing Act is amended to read as 
follows:

                       ``equity skimming penalty

    ``Whoever, as an owner, agent, or manager, or who is otherwise in 
custody, control, or possession of a multifamily project or a 1- to 4-
family residence that is security for a mortgage note that is insured, 
acquired, or held by the Secretary pursuant to the National Housing 
Act, or is made pursuant to section 202 of the Housing Act of 1959 
(including property still subject to section 202 program requirements 
that existed before the date of enactment of the Cranston-Gonzalez 
National Affordable Housing Act), or is insured or held pursuant to 
section 542 of the Housing and Community Development Act of 1992, but 
is not reinsured under section 542 of the Housing and Community 
Development Act of 1992, or is guaranteed, insured, or made by the 
Secretary of Veterans Affairs pursuant to chapter 37 of title 38, 
United States Code, willfully uses or authorizes the use of any part of 
the rents, assets, proceeds, income, or other funds derived from 
property covered by such mortgage note for any purpose other than to 
meet reasonable and necessary expenses that include expenses approved 
by the Secretary if such approval is required, during a period when the 
mortgage note is in default or the project is in a nonsurplus cash 
position as defined by the regulatory agreement covering such property, 
or the mortgagor has failed to comply with the provisions of such other 
form of regulatory control imposed by the Secretary, shall be fined not 
more than $500,000 or imprisoned not more than 5 years, or both.''.

SEC. 213. INCLUSION OF CRIMINAL EQUITY SKIMMING AS A MONEY LAUNDERING 
              OFFENSE.

    Section 1956(c)(7)(D) of title 18, United States Code, is amended 
by inserting ``section 254 of the National Housing Act (relating to 
equity skimming),'' before ``or any felony violation of the Foreign 
Corrupt Practices Act''.

SEC. 214. EFFECT OF CRIMINAL EQUITY SKIMMING ON MORTGAGE INSURANCE.

    Section 254 of the National Housing Act, as amended by section 212, 
is further amended--
            (1) by striking ``Whoever'' and inserting the following:
    ``(a) In General.--Whoever''; and
            (2) by adding at the end the following new subsection:
    ``(b) Additional Effect of Violation.--If an owner, agent, manager, 
or other person who is otherwise in custody, control, or possession of 
any property described in subsection (a) is convicted of a violation of 
that subsection, the Secretary may recover from such owner, agent, 
manager, or other person an amount equal to the sum of--
            ``(1) any amount of insurance claim paid to the mortgagee 
        by the Secretary with respect to the mortgage loan for such 
        property; and
            ``(2) any loss incurred by the Secretary in connection with 
        such property.
If the Secretary determines that the violation contributed to a claim 
or incurred loss, any recovery under this subsection shall be in 
addition to any fine, imprisonment, or other penalty imposed under 
subsection (a).''.

SEC. 215. CIVIL MONEY PENALTIES AGAINST MORTGAGEES, LENDERS, AND OTHER 
              PARTICIPANTS IN FHA PROGRAMS.

    (a) Change to Section Title.--The title of section 536 of the 
National Housing Act is amended to read as follows: ``civil money 
penalties against mortgagees, lenders, and other participants in fha 
programs''.
    (b) Expansion of Persons Eligible for Penalty.--Section 536(a) of 
the National Housing Act is amended--
            (1) in paragraph (1), by revising the first sentence to 
        read as follows:
            ``Whenever a mortgagee approved under the Act, a lender 
        holding a contract of insurance under title I of this Act, or a 
        principal, officer or employee of such mortgagee or lender, or 
        other person or entity participating in either an insured 
        mortgage or title I loan transaction under this Act or 
        providing assistance to the borrower in connection with any 
        such loan, including sellers of the real estate involved, 
        borrowers, closing agents, title companies, real estate agents, 
        mortgage brokers, appraisers, loan correspondents and dealers, 
        knowingly and materially violates any of the applicable 
        provisions of subsection (b), the Secretary may impose a civil 
        money penalty on the mortgagee or lender, or such other person 
        or entity, in accordance with the provisions of this section. 
        The penalty shall be in addition to any other available civil 
        remedy or any available criminal penalty, and may be imposed 
        whether or not the Secretary imposes other administrative 
        sanctions.''; and
            (2) in paragraph (2)--
                    (A) in the first sentence, by inserting ``or such 
                other person or entity'' after ``lender''; and
                    (B) in the second sentence, by striking 
                ``provision'' and inserting ``the provisions''.
    (c) Additional Violations for Mortgagees, Lenders, and Other 
Participants in FHA Programs.--Section 536(b) of such Act is amended--
            (1) by redesignating paragraph (2) as paragraph (3);
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) The Secretary may impose a civil money penalty under 
        subsection (a) for any knowing and material violation by a 
        principal, officer or employee of a mortgagee or lender, or 
        other participants in either an insured mortgage or title I 
        loan transaction under this Act or provision of assistance to 
        the borrower in connection with any such loan, including 
        sellers of the real estate involved, borrowers, closing agents, 
        title companies, real estate agents, mortgage brokers, 
        appraisers, loan correspondents, and dealers for the 
        following--
                    ``(A) submission to the Secretary of information 
                that was false, in connection with any mortgage insured 
                under this Act, or any loan that is covered by a 
                contract of insurance under title I of this Act;
                    ``(B) falsely certifying to the Secretary or 
                submitting to the Secretary a false certification by 
                another person or entity; or
                    ``(C) failure by a loan correspondent or dealer to 
                submit to the Secretary information which is required 
                by regulations or directives in connection with any 
                loan that is covered by a contract of insurance under 
                title I of this Act.''; and
            (3) in paragraph (3), as redesignated by paragraph (1) of 
        this subsection, by striking ``or paragraph (1)(F)'' and 
        inserting ``or (F), or paragraph (2) (A), (B), or (C)''.
    (d) Conforming and Technical Amendments.--Section 536 of the such 
Act is further amended as follows:
            (1) in subsection (c)(1)(B), by inserting after ``lender'' 
        the following: ``or such other person or entity'';
            (2) in subsection (d)(1)--
                    (A) by inserting after ``lender'' the following: 
                ``or such other person or entity''; and
                    (B) by striking ``part 25'' and inserting ``parts 
                24 and 25''; and
            (3) in subsection (e), by inserting after ``lender'' each 
        time it appears the following: ``or such other person or 
        entity''.

                    Subtitle B--Multifamily Housing

SEC. 220. CIVIL MONEY PENALTIES AGAINST GENERAL PARTNERS, OFFICERS, 
              DIRECTORS, AND CERTAIN MANAGING AGENTS OF MULTIFAMILY 
              PROJECTS.

    (a) Civil Money Penalties Against Multifamily Mortgagors.--Section 
537 of the National Housing Act is amended--
            (1) in subsection (b)(1), by striking ``on that mortgagor'' 
        and inserting the following: ``on that mortgagor, on a general 
        partner of a partnership mortgagor, or on any officer or 
        director of a corporate mortgagor'';
            (2) in subsection (c)--
                    (A) by striking the heading and inserting the 
                following: ``(c) Other Violations.--'';
                    (B) in paragraph (1)--
                            (i) by striking ``Violations.--The 
                        Secretary may'' and all that follows through 
                        the colon and inserting the following:
                    ``(A) Liable parties.--The Secretary may also 
                impose a civil money penalty under this section on--
                            ``(i) any mortgagor of a property that 
                        includes five or more living units and that has 
                        a mortgage insured, coinsured, or held pursuant 
                        to this Act;
                            ``(ii) any general partner of a partnership 
                        mortgagor of such property;
                            ``(iii) any officer or director of a 
                        corporate mortgagor;
                            ``(iv) any agent employed to manage the 
                        property that has an identity of interest with 
                        the mortgagor, with the general partner of a 
                        partnership mortgagor, or with any officer or 
                        director of a corporate mortgagor of such 
                        property; or
                            ``(v) any member of a limited liability 
                        company that is the mortgagor of such property 
                        or is the general partner of a limited 
                        partnership mortgagor or is a partner of a 
                        general partnership mortgagor.
                    ``(B) Violations.--A penalty may be imposed under 
                this section upon any liable party under subparagraph 
                (A) that knowingly and materially takes any of the 
                following actions:'';
                            (ii) in subparagraph (B), as designated by 
                        clause (i), by redesignating the subparagraph 
                        designations (A) through (L) as clauses (i) 
                        through (xii), respectively;
                            (iii) by adding after clause (xii), as 
                        redesignated by clause (ii), the following new 
                        clauses:
                    ``(xiii) Failure to maintain the premises, 
                accommodations, any living unit in the project, and the 
                grounds and equipment appurtenant thereto in good 
                repair and condition in accordance with regulations and 
                requirements of the Secretary, except that nothing in 
                this clause shall have the effect of altering the 
                provisions of an existing regulatory agreement or 
                federally insured mortgage on the property.
                    ``(xiv) Failure, by a mortgagor, a general partner 
                of a partnership mortgagor, or an officer or director 
                of a corporate mortgagor, to provide management for the 
                project that is acceptable to the Secretary pursuant to 
                regulations and requirements of the Secretary.
                    ``(xv) Failure to provide access to the books, 
                records, and accounts related to the operations of the 
                mortgaged property and of the project.''; and
                            (iv) in the last sentence, by deleting ``of 
                        such agreement'' and inserting ``of this 
                        subsection'';
            (3) in subsection (d)--
                    (A) in paragraph (1)(B), by inserting after 
                ``mortgagor'' the following: ``, general partner of a 
                partnership mortgagor, officer or director of a 
                corporate mortgagor, or identity of interest agent 
                employed to manage the property''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(5) Payment of Penalty.--No payment of a civil money 
        penalty levied under this section shall be payable out of 
        project income.'';
            (4) in subsection (e)(1), by deleting ``a mortgagor'' and 
        inserting ``an entity or person'';
            (5) in subsection (f), by inserting after ``mortgagor'' 
        each place such term appears, the following: ``, 
general partner of a partnership mortgagor, officer or director of a 
corporate mortgagor, or identity of interest agent employed to manage 
the property'';
            (6) by striking the heading of subsection (f) and inserting 
        the following: ``Civil Money Penalties Against Multifamily 
        Mortgagors, General Partners of Partnership Mortgagors, 
        Officers and Directors of Corporate Mortgagors, and Certain 
        Managing Agents''; and
            (7) by adding at the end the following new subsection:
    ``(k) Identity of Interest Managing Agent.--For purposes of this 
section, the terms `agent employed to manage the property that has an 
identity of interest' and `identity of interest agent' mean an entity--
            ``(1) that has management responsibility for a project;
            ``(2) in which the ownership entity, including its general 
        partner or partners (if applicable) and its officers or 
        directors (if applicable), has an ownership interest; and
            ``(3) over which such ownership entity exerts effective 
        control.''.
    (b) Implementation.--
            (1) Public comment.--The Secretary shall implement the 
        amendments made by this section by regulation issued after 
        notice and opportunity for public comment. The notice shall 
        seek comments primarily as to the definitions of the terms 
        ``ownership interest in'' and ``effective control'', as such 
        terms are used in the definition of the terms ``agent employed 
        to manage the property that has an identity of interest'' and 
        ``identity of interest agent''.
            (2) Timing.--A proposed rule implementing the amendments 
        made by this section shall be published not later than one year 
        after the date of enactment of this Act.
    (c) Applicability of Amendments.--The amendments made by subsection 
(a) shall apply only with respect to--
            (1) violations that occur on or after the effective date of 
        the final regulations implementing the amendments made by this 
        section; and
            (2) in the case of a continuing violation (as determined by 
        the Secretary of Housing and Urban Development), any portion of 
        a violation that occurs on or after such date.

SEC. 221. CIVIL MONEY PENALTIES FOR NONCOMPLIANCE WITH SECTION 8 HAP 
              CONTRACTS.

    (a) Basic Authority.--Title I of the United States Housing Act of 
1937 is amended by adding at the end the following new section:

``SEC. 28. CIVIL MONEY PENALTIES AGAINST SECTION 8 OWNERS.

    ``(a) In General.--The penalties set forth in this section shall be 
in addition to any other available civil remedy or any available 
criminal penalty, and may be imposed regardless of whether the 
Secretary imposes other administrative sanctions. The Secretary may not 
impose penalties under this section for a violation, if a material 
cause of the violation is the failure of the Secretary, an agent of the 
Secretary, or a public housing agency to comply with an existing 
agreement.
    ``(b) Violations of Housing Assistance Payment Contracts for Which 
Penalty May Be Imposed.--
            ``(1) Liable parties.--The Secretary may impose a civil 
        money penalty under this section on--
                    ``(A) any owner of a property receiving project-
                based assistance under section 8;
                    ``(B) any general partner of a partnership owner of 
                such property; and
                    ``(C) any agent employed to manage such property 
                that has an identity of interest with the owner or the 
                general partner of a partnership owner of the property.
            ``(2) Violations.--A penalty may be imposed under this 
        section for a knowing and material breach of a housing 
        assistance payments contract, including the following--
                    ``(A) failure to provide decent, safe, and sanitary 
                housing pursuant to section 8; or
                    ``(B) knowing or willful submission of false, 
                fictitious, or fraudulent statements or requests for 
                housing assistance payments to the Secretary or to any 
                department or agency of the United States.
            ``(3) Amount of penalty.--The amount of a penalty imposed 
        for a violation under this subsection, as determined by the 
        Secretary, may not exceed $25,000 per violation.
    ``(c) Agency Procedures.--
            ``(1) Establishment.--The Secretary shall issue regulations 
        establishing standards and procedures governing the imposition 
        of civil money penalties under subsection (b). These standards 
        and procedures--
                    ``(A) shall provide for the Secretary or other 
                department official to make the determination to impose 
                the penalty;
                    ``(B) shall provide for the imposition of a penalty 
                only after the liable party has received notice and the 
                opportunity for a hearing on the record; and
                    ``(C) may provide for review by the Secretary of 
                any determination or order, or interlocutory ruling, 
                arising from a hearing, and judicial review, as 
                provided under subsection (d).
            ``(2) Final orders.--If a hearing is not requested before 
        the expiration of the 15-day period beginning on the date on 
        which the notice of opportunity for hearing is received, the 
        imposition of a penalty under subsection (b) shall constitute a 
        final and unappealable determination. If the Secretary reviews 
        the determination or order, the Secretary may affirm, modify, 
        or reverse that determination or order. If the Secretary does 
        not review that determination or order before the expiration of 
        the 90-day period beginning on the date on which the 
        determination or order is issued, the determination or order 
        shall be final.
            ``(3) Factors in determining amount of penalty.--In 
        determining the amount of a penalty under subsection (b), the 
        Secretary shall take into consideration--
                    ``(A) the gravity of the offense;
                    ``(B) any history of prior offenses by the violator 
                (including offenses occurring before the enactment of 
                this section);
                    ``(C) the ability of the violator to pay the 
                penalty;
                    ``(D) any injury to tenants;
                    ``(E) any injury to the public;
                    ``(F) any benefits received by the violator as a 
                result of the violation;
                    ``(G) deterrence of future violations; and
                    ``(H) such other factors as the Secretary may 
                establish by regulation.
            ``(4) Payment of penalty.--No payment of a civil money 
        penalty levied under this section shall be payable out of 
        project income.
    ``(d) Judicial Review of Agency Determination.--Judicial review of 
determinations made under this section shall be carried out in 
accordance with section 537(e) of the National Housing Act.
    ``(e) Remedies for Noncompliance.--
            ``(1) Judicial intervention.--If a person or entity fails 
        to comply with the Secretary's determination or order imposing 
        a civil money penalty under subsection (b), after the 
        determination or order is no longer subject to review as 
        provided by subsections (c) and (d), the Secretary may request 
        the Attorney General of the United States to bring an action in 
        an appropriate United States district court to obtain a 
        monetary judgment against that person or entity and such other 
        relief as may be available. The monetary judgment may, in the 
        court's discretion, include the attorney's fees and other 
        expenses incurred by the United States in connection with the 
        action.
            ``(2) Nonreviewability of determination or order.--In an 
        action under this subsection, the validity and appropriateness 
        of the Secretary's determination or order imposing the penalty 
        shall not be subject to review.
    ``(f) Settlement by Secretary.--The Secretary may compromise, 
modify, or remit any civil money penalty which may be, or has been, 
imposed under this section.
    ``(g) Deposit of Penalties.--
            ``(1) Notwithstanding any other provision of law, where the 
        mortgage covering the property receiving section 8 assistance 
        is insured or formerly insured by the Secretary, the Secretary 
        shall apply all civil money penalties collected under this 
        section to the appropriate insurance fund or funds established 
        under this Act, as determined by the Secretary.
            ``(2) Notwithstanding any other provision of law, where the 
        mortgage covering the property receiving section 8 assistance 
        is neither insured nor formerly insured by the Secretary, the 
        Secretary shall make all civil money penalties collected under 
        this section available for use by the appropriate office within 
        the Department for administrative costs related to enforcement 
        of the requirements of the various programs administered by the 
        Secretary.
    ``(h) Definitions.--For the purposes of this section--
            ``(1) the term `agent employed to manage such property that 
        has an identity of interest' means an entity--
                    ``(A) that has management responsibility for a 
                project;
                    ``(B) in which the ownership entity, including its 
                general partner or partners (if applicable), has an 
                ownership interest; and
                    ``(C) over which such ownership entity exerts 
                effective control; and
            ``(2) the term `knowing' means having actual knowledge of 
        or acting with deliberate ignorance of or reckless disregard 
        for the prohibitions under this section.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply only with respect to--
            (1) violations that occur on or after the effective date of 
        final regulations implementing the amendments made by this 
        section; and
            (2) in the case of a continuing violation (as determined by 
        the Secretary of Housing and Urban Development), any portion of 
        a violation that occurs on or after such date.
    (c) Implementation.--
            (1) Regulations.--The Secretary shall implement the 
        amendments made by this section by regulation issued after 
        notice and opportunity for public comment. The notice shall 
        seek comments as to the definitions of the terms ``ownership 
        interest in'' and ``effective control'', as such terms are used 
        in the definition of the term ``agent employed to manage such 
        property that has an identity of interest''.
            (2) Timing.--A proposed rule implementing the amendments 
        made by this section shall be published not later than one year 
        from the date of enactment of this Act.

SEC. 222. EXTENSION OF DOUBLE DAMAGES REMEDY.

    Section 421 of the Housing and Community Development Act of 1987 is 
amended--
            (1) in subsection (a)(1)--
                     (A) in the first sentence, by striking ``Act; or 
                (B)'' and inserting the following: ``Act; (B) a 
                regulatory agreement that applies to a multifamily 
                project whose mortgage is insured or held by the 
                Secretary under section 202 of the Housing Act of 1959 
                (including property subject to section 202 of such Act 
                as it existed before enactment of the Cranston-Gonzalez 
                National Affordable Housing Act of 1990); (C) a 
                regulatory agreement or such other form of regulatory 
                control as may be imposed by the Secretary that applies 
                to mortgages insured or held by the Secretary under 
                section 542 of the Housing and Community Development 
                Act of 1992, but not reinsured under section 542 of the 
                Housing and Community Development Act of 1992; or 
                (D)''; and
                     (B) in the second sentence, by inserting after 
                ``agreement'' the following: ``, or such other form of 
                regulatory control as may be imposed by the 
                Secretary,'';
            (2) by redesignating subsection (a)(2) as subsection 
        (a)(3);
            (3) by inserting after subsection (a)(1) the following new 
        paragraph:
            ``(2) The Secretary may request the Attorney General to 
        bring an action in a United States district court to recover 
        management fees refunded to any person in return for awarding a 
        management contract to a management agent in connection with 
        the operation of a multifamily project whose mortgage is 
        insured or held by the Secretary under title II of the National 
        Housing Act, section 202 of the Housing Act of 1959 (including 
        property subject to section 202 of such Act as it existed 
        before enactment of the Cranston-Gonzalez National Affordable 
        Housing Act of 1990) or under section 542 of the Housing and 
        Community Development Act of 1992. Any payment by the 
management agent or an affiliate of the management agent to any person 
shall be presumed to be a refund in return for awarding a management 
contract.'';
            (4) in subsection (a)(3), as redesignated by paragraph (2), 
        by inserting after ``Act,'' the following: ``under section 202 
        of the Housing Act of 1959 (including section 202 of such Act 
        as it existed before enactment of the Cranston-Gonzalez 
        National Affordable Housing Act of 1990) and under section 542 
        of the Housing and Community Development Act of 1992,'';
            (5) in subsection (b), by inserting after ``agreement'' the 
        following: ``, or such other form of regulatory control as may 
        be imposed by the Secretary,'';
            (6) in subsection (c)--
                    (A) in the first sentence, by striking ``or any 
                applicable regulation,'' and inserting the following: 
                ``, or such other form of regulatory control as may be 
                imposed by the Secretary, or any applicable regulation, 
                or double the value of the management fees refunded to 
                any person in return for awarding a management contract 
                to a management agent,''; and
                    (B) in the second sentence, by inserting before the 
                period the following: ``or, in the case of any project 
                for which the mortgage is insured or held by the 
                Secretary under section 202 of the Housing Act of 1959 
                (including property subject to section 202 of such Act 
                as it existed before enactment of the Cranston-Gonzalez 
                National Affordable Housing Act of 1990), to the 
                project or to the Department for use by the appropriate 
                office within the Department for administrative costs 
                related to enforcement of the requirements of the 
                various programs administered by the Secretary, as 
                appropriate''; and
            (7) by revising subsection (d) to read as follows:
    ``(d) Time Limitation.--Notwithstanding any other statute of 
limitations, the Secretary may request the Attorney General to bring an 
action under this section at any time up to and including 6 years after 
the latest date that the Secretary discovers (1) any use of project 
assets and income in violation of the regulatory agreement, or such 
other form of regulatory control as may be imposed by the Secretary, or 
any applicable regulation, or (2) any refund of management fees to any 
person in return for awarding a management contract to a management 
agent.''.

SEC. 223. OBSTRUCTION OF FEDERAL AUDITS.

    Section 1516(a) of title 18, United States Code, is amended by 
inserting after ``under a contract or subcontract,'' the following: 
``or relating to any property that is security for a mortgage note that 
is insured, guaranteed, acquired, or held by the Secretary of Housing 
and Urban Development pursuant to any Act administered by the 
Secretary,''.

SEC. 224. DISPOSITION OF AMOUNTS RECOVERED UNDER THE PROGRAM FRAUD 
              CIVIL REMEDIES ACT.

    Section 3806(g)(2) of title 31, United States Code, is amended by 
adding at the end the following new subparagraphs:
            ``(F) Any amount of a penalty or assessment imposed by the 
        Secretary of Housing and Urban Development under this chapter 
        with respect to a claim or statement made in connection with 
        the mortgage and loan insurance functions of the Secretary 
        under the National Housing Act shall be deposited in the 
        appropriate Insurance Fund established under that Act.
            ``(G) Any amount of a penalty or assessment imposed by the 
        Secretary of Housing and Urban Development under this chapter 
        with respect to a claim or statement made in connection with 
        the guarantee functions of the Secretary under title III of the 
        National Housing Act shall be deposited in the account of the 
        Government National Mortgage Association with the United States 
        Treasury.''.

SEC. 225. EXTENSION OF ACCESS TO RECORDS TO PREVENT FRAUD AND ABUSE.

    Section 303(i)(5) of the Social Security Act is hereby repealed.

SEC. 226. CONDITIONS FOR RENEWAL OR EXTENSION OF HAP CONTRACTS.

    The Secretary of Housing and Urban Development may require that an 
expiring assistance contract for project-based assistance under section 
8 of the United States Housing Act of 1937 shall not be renewed or 
extended unless the owner executes an agreement to comply with 
additional conditions prescribed by HUD, or executes a new section 8 
assistance contract in the form prescribed by HUD.

                 Subtitle C--FHA Single Family Housing

SEC. 230. TERMINATION OF MORTGAGEE ORIGINATION APPROVAL.

    Section 533 of the National Housing Act is amended by adding at the 
end the following new subsections:
    ``(c) Termination of Mortgagee Origination Approval.--
Notwithstanding section 202(c) of this Act and in addition to the 
sanctions available under subsection (b) of this section, the Secretary 
may terminate the approval of a mortgagee to originate mortgages if the 
mortgagee is determined to present an unacceptable risk to the 
insurance funds, on the basis of a comparison between the indicators of 
portfolio risk, including rates of delinquencies, defaults, and claims, 
on insured mortgages by the mortgagee, and the comparable indicators 
applicable to other approved mortgagees making insured mortgage loans 
in the area.
    ``(d) Definition of Mortgagee.--For the purposes of this section, 
the term `mortgagee' means--
            ``(1) a mortgagee approved to participate in the single 
        family mortgage insurance programs under this Act;
            ``(2) a lender or loan correspondent approved under title I 
        of this Act; or
            ``(3) a branch office or subsidiary of the mortgagee, 
        lender, or loan correspondent.''.

TITLE III--EXEMPTION OF HUD AND USDA MULTIFAMILY LOAN FORECLOSURES AND 
                RELATED ACTIONS FROM THE BANKRUPTCY STAY

SEC. 301. AUTHORITY TO APPOINT RECEIVER OR TAKE OTHER ACTION NOT STAYED 
              UNDER SECTION 362(B)(8).

    Section 105(b) of title 11 of the United States Code is amended to 
read as follows:
    ``(b) Notwithstanding subsection (a) of this section, a court may 
not--
            ``(1) appoint a receiver in a case under this title; or
            ``(2) issue any order, process, or judgment that operates 
        as a stay of any of the acts excepted from automatic stay 
        pursuant to section 362(b)(8).''.

SEC. 302. AUTHORITY TO FORECLOSE OR TAKE OTHER ACTION NOTWITHSTANDING 
              THE AUTOMATIC STAY.

    Section 362(b)(8) of title 11 of the United States Code is amended 
to read as follows:
            ``(8)(A) under subsection (a) of this section, of any act 
        by the Secretary of Housing and Urban Development or the 
        Secretary of Agriculture included under subparagraph (B) 
        relating to property that--
                     ``(i) includes five or more living units and that 
                is subject to a lien insured or held by the Secretary 
                of Housing and Urban Development, including a lien held 
                in the name of the United States of America acting by 
                and through the Secretary of Housing and Urban 
                Development;
                     ``(ii) includes five or more living units and that 
                is subject to a lien insured or held by the Secretary 
                of Agriculture pursuant to title V of the Housing Act 
                of 1949;
                     ``(iii) is subject to a lien insured or held by 
                the Secretary of Housing and Urban Development pursuant 
                to title X of the National Housing Act, as it existed 
                immediately before the effective date of the Department 
                of Housing and Urban Development Reform Act of 1989;
                     ``(iv) is a hospital or nursing home and that is 
                subject to a lien insured or held by the Secretary of 
                Housing and Urban Development;
                     ``(v) is a project for the elderly or persons with 
                disabilities subject to a lien held by the Secretary of 
                Housing and Urban Development under section 202 of the 
                Housing Act of 1959 or section 811 of the Cranston-
                Gonzalez National Affordable Housing Act; or
                     ``(vi) is subject to a lien under section 312 of 
                the Housing Act of 1964, as it existed immediately 
                before October 1, 1991, except a lien on property or 
                combinations of property with up to, and including, 
                four living units, which property has no commercial 
                space.
            ``(B) The acts of the Secretary of Housing and Urban 
        Development or the Secretary of Agriculture referred to in 
        subparagraph (A) include--
                    ``(i) the commencement, continuation, or completion 
                of any act or proceeding by either Secretary for 
                obtaining and applying cash collateral; for obtaining 
                possession pursuant to contract with the debtor or 
                otherwise; for appointment of a receiver; for 
                foreclosure of a mortgage or other lien; or for sale 
                and conveyance of title to real or personal property; 
                or
                    ``(ii) any other act to protect the financial 
                position or interest of either Secretary, which act is 
                authorized under any applicable contract, regulatory 
                agreement, regulation, or statute.''.

       TITLE IV--FHA MULTIFAMILY HOUSING CONSOLIDATION AND REFORM

SEC. 401. SHORT TITLE.

    This title may be cited as the ``FHA Multifamily Housing Reform Act 
of 1997''.

SEC. 402. 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.

                  Subtitle A--FHA Multifamily Housing

SEC. 410. 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 nondiscriminatory 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 in research, development, and testing of new 
        products designed to 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 or 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 meet 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, and 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 Poor's 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. 411. 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. 412. IMPLEMENTATION.

    (a) Effective Date.--The provisions of, and the amendments made by, 
this Act 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 410), the Secretary shall take any administrative actions 
necessary to implement the provisions of, and the amendments made by, 
this Act. 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 Act, 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.

   Subtitle B--Extensions of Existing Authority and Other Provisions

SEC. 420. EXTENSION OF THE SECTION 221(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. 421. 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''.

SEC. 422. DISCRETIONARY AUTHORITY TO REGULATE RENTS FOR SPECIFIC 
              MULTIFAMILY PROPERTY.

    (a) Section 207(b)(2) of the National Housing Act is amended by 
striking ``The'' the first place it appears and inserting the 
following: ``For all projects with mortgages insured under this 
section, including those insured before the date of enactment of the 
Housing and Urban-Rural Recovery Act of 1983 (November 30, 1983), 
the''.
    (b) Section 223(f)(2) is amended by striking the second sentence 
and inserting the following: ``The Secretary shall prescribe such terms 
and conditions as the Secretary deems necessary to assure that the 
refinancing is used to lower the monthly debt service only to the 
extent necessary to assure the continued economic viability of the 
project, taking into account any rent reductions to be implemented by 
the mortgagor. For all projects with mortgages insured, or to be 
insured pursuant to this section, the Secretary may, in the Secretary's 
discretion, require any such mortgagor to be regulated or restricted as 
to rents or sales, charges, capital structure, rate of return, and 
methods of operation so as to provide reasonable rentals to tenants and 
a reasonable return on investment. Any such regulations or restrictions 
shall continue for such period or periods as the Secretary, in the 
Secretary's discretion, may require, including until the termination of 
all obligations of the Secretary under the insurance and during such 
further period of time as the Secretary shall be the owner, holder or 
reinsurer of the mortgage.''.

SEC. 423. EXPANSION OF PARTIAL PAYMENT OF CLAIMS AUTHORITY TO COVER 
              HEALTH CARE FACILITIES.

    (a) Expansion of Authority.--Section 541(a) of the National Housing 
Act is amended to read as follows:
    ``(a) Authority.--Notwithstanding any other provision of law, if 
the Secretary is requested to accept assignment of a mortgage insured 
by the Secretary that covers a multifamily housing project (as such 
term is defined in section 203(b) of the Housing and Community 
Development Amendments of 1978) or a health-care facility (including a 
nursing home, intermediate care facility, or board and care home (as 
such terms are defined in section 232 of this Act), a hospital (as such 
term is defined in section 242 of this Act), or a group practice 
facility (as such term is defined in title XI of this Act)) and the 
Secretary determines that partial payment would be less costly to the 
Federal Government than other reasonable alternatives for maintaining 
the low-income character of the project, or keeping the health care 
facility in operation to serve community needs, as appropriate, the 
Secretary may request the mortgagee in lieu of assignment, to--
            ``(1) accept partial payment of claim under the mortgage 
        insurance contract; and
            ``(2) recast the mortgage, under such terms and conditions 
        as the Secretary may determine.''.
    (b) Conforming Change.--The heading to section 541 of such Act is 
amended to read as follows:

``partial payment of claims on multifamily housing projects and health 
                           care facilities''.

SEC. 424. ENVIRONMENTAL PROTECTION UNDER SECTION 202 AND SECTION 811 
              PROGRAMS.

    (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 (4). 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 (4). 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.''.

SEC. 425. ASSIGNMENT OF REGULATORY AGREEMENTS IN CONNECTION WITH SALE 
              OF MORTGAGES HELD BY HUD.

    Section 203(k) of the Housing and Community Development Amendments 
of 1978 is amended by inserting the following new paragraph at the end:
            ``(7) Assignment of regulatory agreements in connection 
        with sale of mortgages.--Notwithstanding any other provision of 
        law, and upon such terms and conditions as the Secretary may 
        prescribe, the Secretary may, in connection with the sale of 
        mortgages held by the Secretary, assign to the purchaser of the 
        mortgage the regulatory agreement executed by or for the 
        benefit of the Secretary and executed by the mortgagor. Such 
        regulatory agreement shall continue to be binding upon the 
        mortgagor and its successors and assigns, and the Secretary and 
        the successors and assigns of the Secretary.''.

                     TITLE V--REHABILITATION GRANTS

SEC. 501. CAPITAL GRANTS FOR SECTION 236 AND OTHER FORMERLY INSURED 
              PROJECTS.

    Section 236 of the National Housing Act is amended by adding at the 
end thereof the following new subsection:
    ``(s)(1) Grant Authority in General.--The Secretary may make grants 
for the capital costs of rehabilitation to owners of projects that meet 
the eligibility and other criteria set forth in, and in accordance 
with, this subsection.
    ``(2) Project Eligibility.--A project may be eligible for capital 
grant assistance under this subsection if--
            ``(A)(i) the project was insured under section 236 or any 
        other provision of title II of the National Housing Act; and
            ``(ii) the project was assisted under section 8 of the 
        United States Housing Act of 1937 on the date of enactment of 
        the Housing 2020: Multifamily Management Reform Act;
            ``(B) the project mortgage was not held by a State agency 
        as of the date of enactment of this Act;
            ``(C) the project owner agrees to maintain the housing 
        quality standards that were in effect immediately prior to the 
        extinguishment of the mortgage insurance under such title II;
            ``(D) the Secretary determines that the owner of the 
        multifamily housing project has not engaged in material adverse 
        financial or managerial actions or omissions with regard to the 
        project; and with regard to other projects, is not engaged in 
        such actions or omissions that would constitute a pattern of 
        mismanagement that would warrant suspension or debarment by the 
        Secretary; and
            ``(E) the project owner demonstrates to the satisfaction of 
        the Secretary--
                    ``(i) using information in a comprehensive needs 
                assessment, that capital grant assistance is needed for 
                rehabilitation of the project; and
                    ``(ii) that project income is not sufficient to 
                support such rehabilitation.
    ``(3) Eligible Purposes.--The Secretary may make grants to the 
owners of eligible projects for the purposes of--
            ``(A) payment into project replacement reserves;
            ``(B) providing a fair return on equity investment;
            ``(C) debt service payments on non-Federal rehabilitation 
        loans; and
            ``(D) payment of non-recurring maintenance and capital 
        improvements, under terms and conditions as determined by the 
        Secretary.
    ``(4) Grant Agreement.--
            ``(A) The Secretary shall provide in any grant agreement 
        under this subsection that the grant shall be terminated if the 
        project fails to meet housing quality standards, as applicable 
        on the date of enactment of the Housing 2020: Multifamily 
        Management Reform Act, or any successor standards for the 
        physical conditions of projects, as determined by the 
        Secretary.
            ``(B) The Secretary may include in such grant agreement 
        such other terms and conditions as the Secretary determines 
        necessary.
    ``(5) Delegation.--
            ``(A) In addition to the authorities set forth in 
        subsection (p), the Secretary may delegate to State and local 
        governments the responsibility for the administration of grants 
        under this subsection. Any such government may carry out such 
        delegated responsibilities directly or under contracts.
            ``(B) In addition to other eligible purposes, amounts of 
        grants under this subsection may be made available for costs of 
        administration under subparagraph (A).
    ``(6) Funding.--
            ``(A) For the purposes of carrying out this subsection, the 
        Secretary may make available amounts that are unobligated 
        amounts for contracts for interest reduction payments--
                    ``(i) that were previously obligated for contracts 
                for interest reduction payments under this section 
                until insurance under this section was extinguished;
                    ``(ii) that become available as a result of the 
                outstanding principal balance of a mortgage having been 
                written down;
                    ``(iii) that are uncommitted balances within the 
                limitation on maximum payments that may heretofore have 
                been permitted in any fiscal year; or
                    ``(iv) that become available from any other source.
            ``(B) The Secretary may liquidate obligations entered into 
        under this subsection under section 1305(10) of title 31 of the 
        United States Code.
            ``(C) In making capital grants under the terms of this 
        subsection, using the amounts that the Secretary has recaptured 
        from contracts for interest reduction payments, the Secretary 
        shall assure that the rates and amounts of outlays do not at 
        any one time exceed the rates and amounts of outlays that would 
        have been experienced if the insurance had not been 
        extinguished or the principal amount had not been written down, 
        and the interest reduction payments that the Secretary has 
        recaptured had continued in accordance with the terms in effect 
        immediately prior to such extinguishment or write-down.''.
                                 <all>