[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1333 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1333

             To expand homeownership in the United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              July 1, 1999

Mr. Wyden (for himself and Mr. Bennett) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
             To expand homeownership in the United States.

    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 ``Promoting Housing 
Affordability for Working Families Act of 1999''.
    (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--REMOVING BARRIERS TO HOUSING AFFORDABILITY

Sec. 101. Housing impact analysis.
Sec. 102. Grants for regulatory barrier removal strategies.
Sec. 103. Eligibility for community development block grants.
Sec. 104. Regulatory barriers clearinghouse.
    TITLE II--REMOVING BARRIERS TO USE OF FHA SINGLE FAMILY HOUSING 
                       MORTGAGE INSURANCE PROGRAM

Sec. 201. Definition of area.
Sec. 202. Extension of loan term for manufactured home lots.
            TITLE III--HOME INVESTMENT PARTNERSHIPS PROGRAM

Sec. 301. Homeownership for municipal employees.
              TITLE IV--COMMUNITY DEVELOPMENT BLOCK GRANTS

Sec. 401. Homeownership for municipal employees.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the priorities of our Nation should include expanding 
        homeownership opportunities by providing access to affordable 
        housing that is safe, clean, and healthy;
            (2) homeownership has become a challenge for Americans of 
        moderate and low income levels;
            (3) decent housing has become unaffordable for many working 
        families, and according to the Department of Housing and Urban 
        Development, the median family income nationwide is $43,500 and 
        the median price of a single family home is $124,000, leading 
        to an ``affordability gap'' that makes it virtually impossible 
        for many people, especially young families, to obtain all the 
        benefits of home ownership;
            (4) housing comprises 12 percent of the economy of the 
        United States;
            (5) housing construction and remodeling employ 
        approximately 2,000,000 people each year;
            (6) new housing construction accounts for a third of the 
        growth of the Nation's economy during recovery periods;
            (7) homeowners have more than $4,500,000,000,000 in equity 
        in their homes, and this equity is the single largest source of 
        savings and wealth for most families;
            (8) the lack of a broad, effective, local dialog among 
        interested parties about the possible tradeoffs between housing 
        costs and other valued priorities and policies can be a 
        significant factor in raising housing costs;
            (9) in fact, an increase of $1,000 in the purchase price of 
        a median-priced home can force more than 21,000 potential 
        buyers out of the market; and
            (10) removing barriers to affordable housing is an 
        important public policy goal.
    (b) Purposes.--The purposes of this Act are--
            (1) to encourage and facilitate homeownership by families 
        in the United States who are not otherwise able to afford 
        homeownership; and
            (2) to expand homeownership through policies that--
                    (A) promote the ability of the private sector to 
                produce affordable housing without excessive government 
                regulation;
                    (B) encourage tax incentives, such as the mortgage 
                interest deduction, at all levels of government; and
                    (C) facilitate the availability of flexible capital 
                for homeownership opportunities.

          TITLE I--REMOVING BARRIERS TO HOUSING AFFORDABILITY

SEC. 101. HOUSING IMPACT ANALYSIS.

    (a) Applicability.--
            (1) In general.--The requirements of this section shall 
        apply with respect to--
                    (A) any proposed rule, unless the agency 
                promulgating the rule--
                            (i) has certified that the proposed rule 
                        will not, if given force or effect as a final 
                        rule, have a significant deleterious impact on 
                        housing affordability; and
                            (ii) has caused such certification to be 
                        published in the Federal Register at the time 
                        of publication of general notice of proposed 
                        rulemaking for the rule, together with a 
                        statement providing the factual basis for the 
                        certification; and
                    (B) any final rule, unless the agency promulgating 
                the rule--
                            (i) has certified that the rule will not, 
                        if given force or effect, have a significant 
                        deleterious impact on housing affordability; 
                        and
                            (ii) has caused such certification to be 
                        published in the Federal Register at the time 
                        of publication of the final rule, together with 
                        a statement providing the factual basis for the 
                        certification.
            (2) Notice to secretary.--Any agency making a certification 
        under this subsection shall provide a copy of such 
        certification and the statement providing the factual basis for 
        the certification to the Secretary of Housing and Urban 
        Development.
    (b) Statement of Proposed Rulemaking.--Whenever an agency publishes 
general notice of proposed rulemaking for any proposed rule, unless the 
agency has made a certification under subsection (a), the agency 
shall--
            (1) in the notice of proposed rulemaking--
                    (A) state with particularity the text of the 
                proposed rule; and
                    (B) request any interested persons to submit to the 
                agency any written analyses, data, views, and 
                arguments, and any specific alternatives to the 
                proposed rule that--
                            (i) accomplish the stated objectives of the 
                        applicable statutes, in a manner comparable to 
                        the proposed rule;
                            (ii) result in costs to the Federal 
                        Government equal to or less than the costs 
                        resulting from the proposed rule; and
                            (iii) result in housing affordability 
                        greater than the housing affordability 
                        resulting from the proposed rule;
            (2) provide an opportunity for interested persons to take 
        the actions specified under paragraph (1)(B) before 
        promulgation of the final rule; and
            (3) prepare and make available for public comment an 
        initial housing impact analysis in accordance with the 
        requirements of subsection (c).
    (c) Initial Housing Impact Analysis.--
            (1) Requirements.--Each initial housing impact analysis 
        shall describe the impact of the proposed rule on housing 
        affordability. The initial housing impact analysis, or a 
        summary, shall be published in the Federal Register at the same 
        time as, and together with, the publication of general notice 
        of proposed rulemaking for the rule. The agency shall transmit 
        a copy of the initial housing impact analysis to the Secretary 
        of Housing and Urban Development.
            (2) Monthly hud listing.--On a monthly basis, the Secretary 
        of Housing and Urban Development shall cause to be published in 
        the Federal Register, and shall make available through a World 
        Wide Web site of the Department, a listing of all proposed 
        rules for which an initial housing impact analysis was prepared 
        during the preceding month.
            (3) Contents.--Each initial housing impact analysis 
        required under this subsection shall contain--
                    (A) a description of the reasons why action by the 
                agency is being considered;
                    (B) a succinct statement of the objectives of, and 
                legal basis for, the proposed rule;
                    (C) a description of and, where feasible, an 
                estimate of the extent to which the proposed rule would 
                increase the cost or reduce the supply of housing or 
                land for residential development; and
                    (D) an identification, to the extent practicable, 
                of all relevant Federal rules which may duplicate, 
                overlap, or conflict with the proposed rule.
    (d) Proposal of Less Deleterious Alternative Rule.--
            (1) Analysis.--The agency publishing a general notice of 
        proposed rulemaking, as described in this section, shall review 
        any specific analyses and alternatives to the proposed rule 
        which have been submitted to the agency pursuant to subsection 
        (b)(2) to determine whether any alternative to the proposed 
        rule--
                    (A) accomplishes the stated objectives of the 
                applicable statutes, in a manner comparable to the 
                proposed rule;
                    (B) results in costs to the Federal Government 
                equal to or less than the costs resulting from the 
                proposed rule; and
                    (C) results in housing affordability greater than 
                the housing affordability resulting from the proposed 
                rule.
            (2) New notice of proposed rulemaking.--If the agency 
        determines that an alternative to the proposed rule meets the 
        requirements under paragraph (1), unless the agency provides an 
        explanation on the record for the proposed rule as to why the 
        alternative should not be implemented, the agency shall 
        incorporate the alternative into the final rule or, at the 
        agency's discretion, issue a new proposed rule that 
        incorporates the alternative.
    (e) Final Housing Impact Analysis.--
            (1) Requirement.--Whenever an agency promulgates a final 
        rule after publication of a general notice of proposed 
        rulemaking, unless the agency has made the certification under 
        subsection (a), the agency shall prepare a final housing impact 
        analysis.
            (2) Contents.--Each final housing impact analysis shall 
        contain--
                    (A) a succinct statement of the need for, and 
                objectives of, the rule;
                    (B) a summary of the significant issues raised 
                during the public comment period in response to the 
                initial housing impact analysis, a summary of the 
                assessment of the agency of such issues, and a 
                statement of any changes made in the proposed rule as a 
                result of such comments; and
                    (C) a description of and an estimate of the extent 
                to which the rule will impact housing affordability or 
                an explanation of why no such estimate is available.
            (3) Availability.--The agency shall make copies of the 
        final housing impact analysis available to members of the 
        public and shall publish in the Federal Register such analysis 
        or a summary thereof.
    (f) Avoidance of Duplicative or Unnecessary Analyses.--
            (1) Duplication.--Any Federal agency may perform the 
        analyses required by subsections (c) and (e) in conjunction 
        with or as a part of any other agenda or analysis required by 
        any other law, executive order, directive, or rule, if such 
        other analysis satisfies the provisions of those subsections.
            (2) Joinder.--In order to avoid duplicative action, an 
        agency may consider a series of closely related rules as one 
        rule for the purposes of subsections (c) and (e).
    (g) Preparation of Analyses.--In complying with the provisions of 
subsections (c) and (e), an agency may provide either a quantifiable or 
numerical description of the effects of a proposed rule or alternatives 
to the proposed rule, or more general descriptive statements if 
quantification is not practicable or reliable.
    (h) Effect on Other Law.--The requirements of subsections (c) and 
(e) do not alter in any manner standards otherwise applicable by law to 
agency action.
    (i) Procedure for Waiver or Delay of Completion.--
            (1) Initial housing impact analysis.--An agency head may 
        waive or delay the completion of some or all of the 
        requirements of subsection (c) by publishing in the Federal 
        Register, not later than the date of publication of the final 
        rule, a written finding, with reasons therefor, that the final 
        rule is being promulgated in response to an emergency that 
        makes compliance or timely compliance with the provisions of 
        subsection (a) impracticable.
            (2) Final housing impact analysis.--An agency head may not 
        waive the requirements of subsection (e). An agency head may 
        delay the completion of the requirements of subsection (e) for 
        a period of not more than 180 days beyond the date of 
        publication in the Federal Register of a final rule by 
        publishing in the Federal Register, not later than such date of 
        publication, a written finding, with reasons therefor, that the 
        final rule is being promulgated in response to an emergency 
        that makes timely compliance with the provisions of subsection 
        (e) impracticable. If the agency has not prepared a final 
        housing impact analysis pursuant to subsection (e) within 180 
        days from the date of publication of the final rule, such rule 
        shall lapse and have no force or effect. Such rule shall not be 
        repromulgated until a final housing impact analysis has been 
        completed by the agency.
    (j) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Housing affordability.--The term ``housing 
        affordability'' means the quantity of housing that is 
        affordable to families having incomes that do not exceed 150 
        percent of the median income of families in the area in which 
        the housing is located, with adjustments for smaller and larger 
        families. For purposes of this paragraph, area, median family 
        income for an area, and adjustments for family size shall be 
        determined in the same manner as such factors are determined 
        for purposes of section 3(b)(2) of the United States Housing 
        Act of 1937.
            (2) Agency.--The term ``agency'' means each authority of 
        the Government of the United States, whether or not it is 
        within or subject to review by another agency, but does not 
        include--
                    (A) the Congress;
                    (B) the courts of the United States;
                    (C) the governments of the territories or 
                possessions of the United States;
                    (D) the government of the District of Columbia;
                    (E) agencies composed of representatives of the 
                parties or of representatives of organizations of the 
                parties to the disputes determined by them;
                    (F) courts-martial and military commissions;
                    (G) military authority exercised in the field in 
                time of war or in occupied territory; or
                    (H) functions conferred by--
                            (i) sections 603, 604, 608, and 609 of the 
                        National Housing Act;
                            (ii) the Contract Settlement Act of 1944; 
                        or
                            (iii) subchapter II of chapter 471 of title 
                        49, United States Code.
            (3) Families.--The term ``families'' has the meaning given 
        such term in section 3 of the United States Housing Act of 
        1937.
            (4) Rule.--The term ``rule''--
                    (A) means any rule for which the agency publishes a 
                general notice of proposed rulemaking pursuant to 
                section 553(b) of title 5, United States Code, or any 
                other law, including any rule of general applicability 
                governing grants by an agency to State and local 
                governments for which the agency provides an 
                opportunity for notice and public comment; and
                    (B) does not include a rule of particular 
                applicability relating to rates, wages, corporate or 
                financial structures or reorganizations thereof, 
                prices, facilities, appliances, services, or allowances 
                therefor or to valuations, costs or accounting, or 
                practices relating to such rates, wages, structures, 
                prices, appliances, services, or allowances.
            (5) Significant.--The term ``significant'' means increasing 
        consumers' cost of housing by more than $100,000,000 per year.
    (k) Development.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Housing and Urban Development shall 
develop model initial and final housing impact analyses under this 
section, and shall cause such model analyses to be published in the 
Federal Register. The model analyses shall define the primary elements 
of a housing impact analysis to instruct other agencies on how to carry 
out and develop the analyses required under subsections (c) and (e).
    (l) Judicial Review.--
            (1) Determination by agency.--Except as provided in 
        paragraph (2), any determination by an agency concerning the 
        applicability of any of the provisions of this title to any 
        action of the agency shall not be subject to judicial review.
            (2) Other actions by agency.--Any housing impact analysis 
        prepared under subsection (c) or (e) and the compliance or 
        noncompliance of the agency with the provisions of this title 
        shall not be subject to judicial review. When an action for 
        judicial review of a rule is instituted, any housing impact 
        analysis for such rule shall constitute part of the whole 
        record of agency action in connection with the review.
            (3) Exception.--Nothing in this subsection bars judicial 
        review of any other impact statement or similar analysis 
        required by any other law if judicial review of such statement 
or analysis is otherwise provided by law.

SEC. 102. GRANTS FOR REGULATORY BARRIER REMOVAL STRATEGIES.

    (a) Authorization of Appropriations.--Section 1204(a) of the 
Housing and Community Development Act of 1992 (42 U.S.C. 12705c(a)) is 
amended to read as follows:
    ``(a) Funding.--There is authorized to be appropriated for grants 
under subsections (b) and (c) $15,000,000 for fiscal year 2000 and each 
fiscal year thereafter through fiscal year 2004.''.
    (b) Consolidation of State and Local Grants.--Section 1204(b) of 
the Housing and Community Development Act of 1992 (42 U.S.C. 12705c(b)) 
is amended--
            (1) in the subsection heading, by striking ``State Grants'' 
        and inserting ``Grant Authority'';
            (2) in the matter preceding paragraph (1), by inserting 
        after ``States'' the following: ``and units of general local 
        government (including consortia of such governments)'';
            (3) in paragraph (3), by striking ``a State program to 
        reduce State and local'' and inserting ``State, local, or 
        regional programs to reduce'';
            (4) in paragraph (4), by inserting ``or local'' after 
        ``State''; and
            (5) in paragraph (5), by striking ``State''.
    (c) Barriers to Homeownership and Housing Affordability Councils; 
Repeal of Local Grants Provision.--Section 1204(c) of the Housing and 
Community Development Act of 1992 (42 U.S.C. 12705c(c)) is amended to 
read as follows:
    ``(c) Barriers to Homeownership and Housing Affordability 
Councils.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, a State or unit of local government may use 
        amounts received from a grant awarded under this section to 
        establish a Barriers to Homeownership and Housing Affordability 
        Council (referred to in this section as a `Council') in 
        accordance with this subsection.
            ``(2) Membership.--A Council shall be comprised of 10 
        members, of whom--
                    ``(A) 1 member shall be an individual who is 
                actively engaged in the residential single family 
                homebuilding industry;
                    ``(B) 1 member shall be an individual who is 
                actively engaged in the residential multifamily 
                homebuilding industry;
                    ``(C) 1 member shall be an individual who is 
                actively engaged in the lending industry;
                    ``(D) 1 member shall be an individual who is a 
                representative of those areas of labor engaged in 
                homebuilding;
                    ``(E) 2 members shall be individuals with 
                experience in housing issues who are designated as 
                advocates for underserved populations;
                    ``(F) 1 member shall be an individual who is a real 
                estate professional; and
                    ``(G) 3 members shall be appointed, as determined 
                by the local government.
            ``(3) Functions of council.--A Council shall analyze the 
        local housing situation and make recommendations to the local 
        government on incentives for the production of affordable 
        housing.''.
    (d) Application and Selection.--The last sentence of section 
1204(e) of the Housing and Community Development Act of 1992 (42 U.S.C. 
12705c(e)) is amended--
            (1) by striking ``and for the selection of units of general 
        local government to receive grants under subsection (f)(2)''; 
        and
            (2) by inserting before the period at the end the 
        following: ``, and such criteria shall require that grant 
        amounts be used in a manner consistent with the strategy 
        contained in the comprehensive housing affordability strategy 
        for the jurisdiction pursuant to section 105(b)(4) of the 
        Cranston-Gonzalez National Affordable Housing Act''.
    (e) Selection of Grantees.--Section 1204(f) of the Housing and 
Community Development Act of 1992 (42 U.S.C. 12705c(f)) is amended to 
read as follows:
    ``(f) Selection of Grantees.--To the extent that amounts are made 
available to carry out this section, the Secretary shall provide grants 
on a competitive basis to eligible grantees based on the proposed uses 
of such amounts, as provided in applications under subsection (e).''.
    (f) Technical Amendments.--Section 107(a)(1) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5307(a)(1)) is amended--
            (1) in subparagraph (G), by adding ``and'' at the end;
            (2) by striking subparagraph (H); and
            (3) by redesignating subparagraph (I) as subparagraph (H).

SEC. 103. ELIGIBILITY FOR COMMUNITY DEVELOPMENT BLOCK GRANTS.

    (a) In General.--Section 104(c)(1) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5304(c)(1)) is amended by inserting 
before the comma the following: ``, which shall include making a good 
faith effort to carry out the strategy established under section 
105(b)(4) of that Act by the unit of general local government to remove 
barriers to affordable housing''.
    (b) Rule of Construction.--The amendment made by subsection (a) may 
not be construed to create any new private right of action.

SEC. 104. REGULATORY BARRIERS CLEARINGHOUSE.

    Section 1205 of the Housing and Community Development Act of 1992 
(42 U.S.C. 12705d) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``receive, collect, process, and assemble'' 
                and inserting ``serve as a national repository to 
                receive, collect, process, assemble, and disseminate'';
                    (B) in paragraph (1)--
                            (i) by striking ``, including'' and 
                        inserting ``(including''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``), and the prevalence 
                        and effects on affordable housing of such laws, 
                        regulations, and policies'';
                    (C) in paragraph (2), by inserting before the 
                semicolon the following: ``, including particularly 
                innovative or successful activities, strategies, and 
                plans''; and
                    (D) in paragraph (3), by inserting before the 
                period at the end the following: ``, including 
                particularly innovative or successful strategies, 
                activities, and plans'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) through a World Wide Web site of the Department or by 
        electronic mail, provide to each housing agency of a unit of 
        general local government that serves an area having a 
        population greater than 100,000, an index of all State and 
        local strategies and plans submitted under subsection (a) to 
        the clearinghouse, which--
                    ``(A) shall describe the types of barriers to 
                affordable housing that the strategy or plan was 
                designed to ameliorate or remove; and
                    ``(B) shall, not later than 30 days after 
                submission to the clearinghouse of any new strategy or 
                plan, be updated to include the new strategy or plan 
                submitted.''; and
            (3) by adding at the end the following:
    ``(c) Organization.--The clearinghouse under this section shall be 
established within the Office of Policy Development of the Department 
of Housing and Urban Development and shall be under the direction of 
the Assistant Secretary for Policy Development and Research.
    ``(d) Timing.--The clearinghouse under this section (as amended by 
section 104 of the Promoting Housing Affordability for Working Families 
Act of 1999) shall be established and commence carrying out the 
functions of the clearinghouse under this section not later than 1 year 
after the date of enactment of that Act. The Secretary of Housing and 
Urban Development may comply with the requirements under this section 
by reestablishing the clearinghouse that was originally established to 
comply with this section and updating and improving such clearinghouse 
to the extent necessary to comply with the requirements of this section 
as in effect pursuant to the enactment of that Act.''.

    TITLE II--REMOVING BARRIERS TO USE OF FHA SINGLE FAMILY HOUSING 
                       MORTGAGE INSURANCE PROGRAM

SEC. 201. DEFINITION OF AREA.

    (a) Discretion To Enlarge Areas and Median Price in MSA's.--Section 
203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is 
amended, in the first sentence after subparagraph (B), by inserting 
before the period the following: ``; except that the Secretary may 
provide that any county or statistical area, together with any counties 
contiguous or proximate to such county or statistical area, be treated 
as a single area for purposes of the preceding sentence; and except 
that the median 1-family housing price for any metropolitan statistical 
area shall be equal to the median 1-family housing price of the county 
within the area that has the highest such median price''.
    (b) Median Price in Expanded MSA's.--The first sentence after 
subparagraph (B) of section 203(b)(2) of the National Housing Act (12 
U.S.C. 1709(b)(2)), as amended by subsection (a) of this section, is 
further amended by inserting before the period at the end the 
following: ``; and except that for fiscal year 2000, the median 1-
family housing price for any area (for purposes of the preceding 
sentence) that consists of a metropolitan statistical area together 
with the counties contiguous or proximate to such metropolitan 
statistical area shall be equal to the median 1-family housing price of 
the county within such area (for purposes of the preceding sentence) 
that has the highest such median price''.

SEC. 202. EXTENSION OF LOAN TERM FOR MANUFACTURED HOME LOTS.

    Section 2(b)(3)(E) of the National Housing Act (12 U.S.C. 
1703(b)(3)(E)) is amended by striking ``fifteen'' and inserting 
``twenty''.

            TITLE III--HOME INVESTMENT PARTNERSHIPS PROGRAM

SEC. 301. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.

    (a) Eligible Activities.--Section 215(b)(2) of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12745(b)(2)) is 
amended to read as follows:
            ``(2) is the principal residence of an owner who--
                    ``(A) is a member of a family that qualifies as a 
                low-income family--
                            ``(i) in the case of a contract to purchase 
                        existing housing, at the time of purchase;
                            ``(ii) in the case of a lease-purchase 
                        agreement for existing housing or for housing 
                        to be constructed, at the time the agreement is 
                        signed; or
                            ``(iii) in the case of a contract to 
                        purchase housing to be constructed, at the time 
                        the contract is signed; or
                    ``(B)(i) is a uniformed employee (which shall 
                include policemen, firemen, and sanitation and other 
                maintenance workers) or a teacher who is an employee of 
                the participating jurisdiction (or an agency or school 
                district serving such jurisdiction) that is investing 
                funds made available under this subtitle to support 
                homeownership of the residence; and
                    ``(ii) is a member of a family whose income, at the 
                time referred to in clause (i), (ii), or (iii) of 
                subparagraph (A), as appropriate, and as determined by 
                the Secretary with adjustments for smaller and larger 
                families, does not exceed 115 percent of the median 
                income of the area;''.
    (b) Income Targeting.--Section 214(2) of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12744(2)) is amended by 
inserting before the semicolon the following: ``or families described 
in section 215(b)(2)(B)''.
    (c) Eligible Investments.--Section 212(b) of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12742(b)) is amended by 
adding at the end the following: ``Notwithstanding the preceding 
sentence, in the case of homeownership assistance for residences of 
owners described in section 215(b)(2)(B), funds made available under 
this subtitle may only be invested (A) to provide amounts for 
downpayments on mortgages, (B) to pay reasonable closing costs normally 
associated with the purchase of a residence, (C) to obtain pre- or 
post-purchase counseling relating to the financial and other 
obligations of homeownership, or (D) to subsidize mortgage interest 
rates.''.

              TITLE IV--COMMUNITY DEVELOPMENT BLOCK GRANTS

SEC. 401. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.

    (a) Eligible Activities.--Section 105(a) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5305(a)), is amended--
            (1) in paragraph (22)(C), by striking ``and'' at the end;
            (2) in paragraph (23), by striking the period at the end 
        and inserting a semicolon;
            (3) in paragraph (24), by striking ``and'' at the end;
            (4) in paragraph (25), by striking the period at the end 
        and inserting ``; and''; and
            (5) by adding at the end the following:
            ``(26) provision of direct assistance to facilitate and 
        expand homeownership among uniformed employees (including 
        policemen, firemen, and sanitation and other maintenance 
        workers) of, and teachers who are employees of, the 
        metropolitan city or urban county (or an agency or school 
        district serving such city or county) receiving grant amounts 
        under this title pursuant to section 106(b), or the unit of 
        general local government (or an agency or school district 
        serving such unit) receiving such grant amounts pursuant to 
        section 106(d), except that, notwithstanding section 
        102(a)(20)(B) or any other provision of this title, such 
        assistance may be provided on behalf of such employees whose 
        family incomes do not exceed 115 percent of the median income 
        of the area involved, as determined by the Secretary with 
        adjustments for smaller and larger families, and except that 
        such assistance shall be used only for acquiring principal 
        residences for such employees by--
                    ``(A) providing amounts for downpayments on 
                mortgages;
                    ``(B) paying reasonable closing costs normally 
                associated with the purchase of a residence;
                    ``(C) obtaining pre- or post-purchase counseling 
                relating to the financial and other obligations of 
                homeownership; or
                    ``(D) subsidizing mortgage interest rates.''.
    (b) Primary Objectives.--Section 105(c) of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5305(c)) is amended by 
adding at the end the following:
            ``(5) Homeownership assistance for municipal employees.--
        Notwithstanding any other provision of this title, any assisted 
        activity described in subsection (a)(26) shall be considered, 
        for purposes of this title, to benefit persons of low and 
        moderate income and shall be directed toward the objective 
        under section 101(c)(3).''.
                                 <all>