[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5487 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 5487

  To establish the Affordable Homeownership Preservation Fund of the 
                 Neighborhood Reinvestment Corporation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 25, 2008

    Ms. Loretta Sanchez of California (for herself and Ms. Clarke) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL


 
  To establish the Affordable Homeownership Preservation Fund of the 
                 Neighborhood Reinvestment Corporation.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Homeownership 
Preservation Fund Act of 2008''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) many communities in the United States are facing a loss 
        of affordable housing options arising in part from unethical 
        lending practices and the resulting tightening of credit to 
        low- and moderate-income families;
            (2) the restoration and maintenance of the economies of 
        these communities will require support to preserve affordable 
        workforce housing;
            (3) non-governmental business interests are facing 
        increasing difficulties expanding operations due to the limited 
        workforce available in regions with low inventories of 
        affordable housing; and
            (4) community development organizations and affordable 
        housing trust funds have proven their ability to identify and 
        respond to community needs for equity investments, loans, and 
        educational services.
    (b) Purpose.--The purpose of this Act is to establish an Affordable 
Homeownership Preservation Fund of the Neighborhood Reinvestment 
Corporation that will protect the interests of low- and moderate-income 
homebuyers and ensure that non-governmental interests continue to have 
affordable housing for their workforces.

SEC. 3. AFFORDABLE HOMEOWNERSHIP PRESERVATION FUND.

    The Neighborhood Reinvestment Corporation Act is amended--
            (1) in section 606(b)(5) (42 U.S.C. 8105(b)(5)), by 
        striking ``section 608(d))'' and inserting ``section 609(d)'';
            (2) by redesignating sections 607 and 608 (12 U.S.C. 8106, 
        8107) as sections 608 and 609, respectively; and
            (3) by inserting after section 606 (12 U.S.C. 8105) the 
        following new section:

``SEC. 607. AFFORDABLE HOMEOWNERSHIP PRESERVATION FUND.

    ``(a) Establishment.--There is established a fund of the 
corporation to be known as the Affordable Homeownership Preservation 
Fund (in this section referred to as the `Fund'), which shall be 
administered by the corporation.
    ``(b) Use.--To the extent that amounts are made available pursuant 
to subsection (l), the corporation, doing business as NeighborWorks 
America, shall provide financial assistance from the Fund through 
grants to community development organizations for use for eligible 
activities under subsection (d) to enhance the availability of 
affordable housing.
    ``(c) Eligible Community Development Organizations.--Grants from 
the Fund may be made only to community development organizations that 
operate affordable housing trust funds that are affiliated with the 
NeighborWorks America network established by the corporation.
    ``(d) Eligible Activities.--
            ``(1) In general.--Amounts from a grant from the Fund for 
        an eligible community development organization may be used only 
        for activities to improve and enhance the availability of 
        affordable housing that--
                    ``(A) are carried out in accordance with the 
                comprehensive strategic plan for the organization 
                submitted under subsection (f)(2)(B);
                    ``(B) are consistent with existing economic, 
                community, and housing development plans adopted by or 
                applicable to the area or targeted population served by 
                the organization; and
                    ``(C) may include--
                            ``(i) assisting distressed homeowners with 
                        small low-interest or no-interest loans;
                            ``(ii) making mortgage loans to first-time 
                        homebuyers;
                            ``(iii) purchasing, rehabilitating, and 
                        selling foreclosed properties for owner-
                        occupancy; and
                            ``(iv) such other activities as the 
                        corporation considers appropriate.
            ``(2) Capacity building.--Notwithstanding paragraph (1), a 
        grantee may use not more than 10 percent of the amounts of any 
        grant from the Fund and of any matching amounts provided in 
        accordance with subsection (e) for costs of hiring and training 
        personnel to carry out performance goals and the mortgage 
        foreclosure mitigation counseling required by the item relating 
        to `Neighborhood Reinvestment Corporation' in title III of the 
        Transportation, Housing and Urban Development, and Related 
        Agencies Appropriations Act, 2008 (Division K of Public Law 
        110-161).
    ``(e) Matching Requirements.--
            ``(1) In general.--A grant under this section for an 
        eligible community development organization may not be made in 
        an amount that exceeds the amount that the organization 
        declares to the corporation have been or will be contributed 
        from sources other than the Federal Government for use for 
        eligible activities described in the application of the 
        organization. Such matching funds shall be at least comparable 
        in form and value to the assistance provided from the Fund for 
        the organization.
            ``(2) Requirement of firm commitment of matching amounts.--
        The corporation may not provide any grant amounts for an 
        eligible community development organization before the 
        organization has secured firm commitments for the matching 
        funds required by paragraph (1).
            ``(3) Exception.--In the case of an applicant that the 
        corporation determines is subject to severe constraints on 
        available sources of matching funds, the corporation may permit 
        the applicant to comply with the matching requirements of 
        paragraph (1) by--
                    ``(A) reducing the amount required to be matched by 
                such applicant by not more than 50 percent;
                    ``(B) for not more than 60 percent of the amount 
                required to be matched by such applicant, allowing such 
                applicant to use amounts made available pursuant to--
                            ``(i) section 106 of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5306);
                            ``(ii) section 623(c)(1) of the Community 
                        Economic Development Act of 1981 (42 U.S.C. 
                        9812(c)); or
                            ``(iii) section 310B(c) of the Consolidated 
                        Farm and Rural Development Act (7 U.S.C. 
                        1932(c)); or
                    ``(C) permitting such applicant to provide matching 
                funds in a form to be determined at the discretion of 
                the corporation if such applicant--
                            ``(i) has total assets of less than 
                        $100,000;
                            ``(ii) serves nonmetropolitan areas; and
                            ``(iii) is requesting a grant under this 
                        section of not more than $25,000.
            ``(4) Limitation.--Not more than 25 percent of the total 
        amount disbursed in any fiscal year from the Fund may be 
        matched as provided in paragraph (3).
    ``(f) Applications for Assistance.--
            ``(1) Form and procedures.--To be eligible to receive 
        assistance from the Fund, an eligible community development 
        organization shall submit to the corporation an application 
        meeting the requirements under this subsection, in such form 
        and in accordance with such procedures as the corporation shall 
        establish.
            ``(2) Minimum requirements.--The corporation shall require 
        each application--
                    ``(A) to establish that the applicant is, or by the 
                time a grant under this section is made to the 
                organization will be, an eligible community development 
                organization;
                    ``(B) to include a comprehensive strategic plan for 
                the organization that contains--
                            ``(i) a plan of not less than 5 years in 
                        duration that demonstrates that the applicant 
                        will use amounts from a grant from the Fund 
                        only for eligible activities under subsection 
                        (d);
                            ``(ii) an analysis of the needs of the area 
                        or targeted population that the applicant 
                        serves and a strategy for how the applicant 
                        will attempt to meet such needs;
                            ``(iii) a plan that coordinates use of 
                        assistance from the Fund with existing Federal, 
                        State, local, and tribal government assistance 
                        programs, and private sector financial 
                        services;
                            ``(iv) an explanation of how the proposed 
                        eligible activities to be carried out using 
                        amounts from the grant from the Fund comply 
                        with the requirement under subsection 
                        (d)(1)(B); and
                            ``(v) a description of how the applicant 
                        will coordinate with community organizations 
                        and financial institutions that will provide 
                        equity investments, loans, secondary markets, 
                        or other services to investment areas or 
                        targeted populations;
                    ``(C) to include a detailed description of how the 
                applicant will comply with the matching requirement 
                under subsection (e) and the likely sources of funds 
                for such compliance;
                    ``(D) in the case of an applicant that has 
                previously received assistance from the Fund, to 
                demonstrate that the applicant--
                            ``(i) has substantially met its performance 
                        goals established pursuant to subsection 
                        (h)(2)(B) and otherwise carried out its 
                        responsibilities under the assistance agreement 
                        for such assistance; and
                            ``(ii) will expand its operations into a 
                        new service area or to serve a new targeted 
                        population, offer more services, or increase 
                        the volume of its business;
                    ``(E) in the case of an applicant with a prior 
                history of serving investment areas or targeted 
                populations, to demonstrate that the applicant--
                            ``(i) has a record of success in serving 
                        service areas or targeted populations; and
                            ``(ii) will expand its operations into a 
                        new service area or to serve a new targeted 
                        population, offer more services, or increase 
                        the volume of its current business; and
                    ``(F) to include such other information as the 
                corporation considers appropriate.
            ``(3) Preapplication outreach program.--The corporation may 
        operate an outreach program to identify and provide information 
        to potential applicants for assistance under this section.
    ``(g) Selection Criteria.--The corporation shall establish criteria 
for selection of applications for grants under this section, which 
shall include--
            ``(1) the likelihood of success of the applicant in meeting 
        the goals of its comprehensive strategic plan submitted under 
        subsection (f)(2)(B);
            ``(2) the experience and background of the proposed team 
        that will manage the grant;
            ``(3) the extent of need for affordable housing for the 
        service area or targeted populations to be served under the 
        grant;
            ``(4) the extent to which the applicant will concentrate 
        its activities on serving its service area or targeted 
        populations;
            ``(5) the amount for which firm commitments have been made 
        for contributions to be used to meet or exceed the matching 
        amount required under subsection (e) and the likely success of 
        the plan for securing any balance of the amounts required under 
        such subsection;
            ``(6) whether the applicant is located in a community that 
        has experienced a sudden and significant loss in homeownership 
        as a result of an increase in mortgage foreclosures;
            ``(7) in the case of an applicant having a prior history 
        with the corporation, the extent of success of the applicant in 
        serving the service areas or targeted populations involved; and
            ``(8) any other factors (such as the extent to which the 
        applicant has strong ties to the community that it will serve) 
        that the corporation considers appropriate.
    ``(h) Grant Terms and Conditions.--
            ``(1) Soundness of organizations.--The corporation shall--
                    ``(A) ensure, to the maximum extent practicable, 
                that each community development organization that 
                receives a grant under this section is financially and 
                managerially sound and maintains appropriate internal 
                controls; and
                    ``(B) require each community development 
                organization that receives a grant under this section 
                to submit to the corporation, not less than once during 
                each 18-month period, a statement of financial 
                condition audited by an independent certified public 
                accountant as part of the report required by subsection 
                (j)(1)(E).
            ``(2) Assistance agreement.--
                    ``(A) In general.--No grant amounts may be provided 
                under this section to an eligible community development 
                corporation before the corporation enters into an 
                agreement with the organization that requires the 
                organization to comply with performance goals 
                established pursuant to subparagraph (B) and with all 
                other terms and conditions of assistance received under 
                this section.
                    ``(B) Performance goals.--For each community 
                development organization receiving assistance under 
                this section, performance goals relating to the use of 
                such assistance shall be established by negotiation 
                between the corporation and the organization. Such 
                goals shall be based upon the strategic plan of the 
                organization submitted pursuant to subsection 
                (f)(2)(b). Such goals may be modified by consent of 
                both parties, or as provided in subparagraph (C).
                    ``(C) Sanctions.--The agreement required under 
                subparagraph (A) for each eligible community 
                development corporation shall provide that, in the 
                event of fraud, mismanagement, noncompliance with this 
                section, or noncompliance with the terms of the 
                agreement, the corporation may, in the discretion of 
                the corporation, take one or more of the following 
                actions:
                            ``(i) Revoke approval of the application of 
                        the organization.
                            ``(ii) Terminate or reduce future 
                        assistance under this section for the 
                        organization.
                            ``(iii) Require repayment of assistance 
                        provided under this section to the 
                        organization.
                            ``(iv) Require changes to the performance 
                        goals established pursuant to subparagraph (B) 
                        for the organization.
                            ``(v) Bar the organization from reapplying 
                        for assistance from the Fund.
                            ``(vi) Require changes to the strategic 
                        plan of the organization submitted pursuant to 
                        subsection (f)(2)(B).
                            ``(vii) Take such other actions as the 
                        corporation considers appropriate.
    ``(i) Encouragement of Private Entities.--The corporation may 
facilitate the organization of corporations in which the Federal 
Government has no ownership interest that will complement the 
activities of the corporation in carrying out the purpose of this 
section. The purpose of any such entity shall be to assist community 
development organizations in a manner that is complementary to the 
activities of the corporation under this section. Any such entity shall 
be managed exclusively by persons not employed by the Federal 
Government or any agency or instrumentality thereof.
    ``(j) Recordkeeping, Reports, and Audits.--
            ``(1) Recordkeeping.--
                    ``(A) In general.--Each community development 
                organization receiving assistance from the Fund shall 
                keep such records, for such periods as may be 
                prescribed, as may be necessary to disclose the manner 
                in which any assistance under this section is used and 
                to demonstrate compliance with the requirements of this 
                section.
                    ``(B) User profile information.--The corporation 
                shall require each community development organization 
                receiving assistance under this section to compile and 
                maintain data on the gender, race, ethnicity, national 
                origin, and other pertinent information concerning 
                individuals that utilize the services of the 
                organization to ensure that targeted populations and 
                low-income residents of investment areas are adequately 
                served.
                    ``(C) Access to records.--The corporation shall 
                have access on demand, for the purpose of determining 
                compliance with this section, to any records of a 
                community development organization that receives 
                assistance from the Fund.
                    ``(D) Review.--Not less than annually, the 
                corporation shall review the progress of each community 
                development organization receiving assistance under 
                this section in carrying out its strategic plan, 
                meeting its performance goals, and satisfying the terms 
                and conditions of its assistance agreement.
                    ``(E) Annual reports.--
                            ``(i) Requirement.--The corporation shall 
                        require each community development organization 
                        receiving assistance under this section to 
                        submit to the corporation, in such form and 
                        manner as the corporation shall require, an 
                        annual report regarding its activities, its 
                        financial condition, and its success in meeting 
                        performance goals, in satisfying the terms and 
                        conditions of its assistance agreement, and in 
                        complying with other requirements of this 
                        section.
                            ``(ii) Availability.--After deleting or 
                        redacting any material as appropriate to 
                        protect privacy or proprietary interests, the 
                        corporation shall make such reports available 
                        for public inspection.
            ``(2) Annual report by corporation.--The corporation shall 
        conduct an annual evaluation of the activities of the Fund and 
        the community development organizations assisted under this 
        section, and shall include in the annual report submitted 
        pursuant to section 608(a) a report of its findings, together 
        with financial statements audited in accordance with paragraph 
        (4).
            ``(3) Optional studies.--The corporation may conduct such 
        studies as the corporation considers necessary to further the 
        purpose of this section and to facilitate investment in 
        distressed communities. The findings of any studies conducted 
        pursuant to this paragraph shall be included in the report 
        required by paragraph (2).
            ``(4) Examination and audit.--The financial statements of 
        the Fund for each fiscal year shall be audited by the 
        Comptroller General of the United States under the authority 
        provided in section 608(c).
    ``(k) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Community development organization.--The term 
        `community development organization' means a private, nonprofit 
        organization that--
                    ``(A) serves a specific area experiencing a limited 
                supply of affordable housing relative to the needs of 
                the local workforce, as determined by the corporation, 
                or a targeted low- or moderate-income population;
                    ``(B) maintains, through significant representation 
                on the organization's board of directors or other 
                governing body, accountability to the specific targeted 
                area or population served by the organization; and
                    ``(C) whose primary purpose includes the provision 
                of low-income housing or community economic development 
                projects that primarily benefit low-income individuals 
                or communities.
            ``(2) Eligible community development organization.--The 
        term `eligible community development organization' means a 
        community development organization that meets the requirements 
        of subsection (c).
            ``(3) Nonprofit organization.--The term `nonprofit 
        organization' means an organization (including a State or 
        locally chartered organization) that--
                    ``(A) is organized under State or local laws;
                    ``(B) has no part of its net earnings inuring to 
                the benefit of any member, founder, contributor, or 
                individual; and
                    ``(C) complies with standards of financial 
                accountability acceptable to the corporation.
    ``(l) Authorization of Appropriations.--In addition to any amounts 
authorized to be appropriated under section 609(a) or appropriated 
pursuant to such section, there are authorized to be appropriated to 
the Neighborhood Reinvestment Corporation such sums as may be necessary 
for assistance under this section.''.
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