[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5818 Referred in Senate (RFS)]

  2d Session
                                H. R. 5818


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 12, 2008

     Received; read twice and referred to the Committee on Banking, 
                       Housing, and Urban Affairs

_______________________________________________________________________

                                 AN ACT


 
  To authorize the Secretary of Housing and Urban Development to make 
  loans to States to acquire foreclosed housing and to make grants to 
                       States for related costs.

    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 ``Neighborhood 
Stabilization Act of 2008''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Congressional purposes.
Sec. 3. Loans and grants to States, metropolitan cities, and urban 
                            counties.
Sec. 4. Qualified plans.
Sec. 5. Allocation of amounts.
Sec. 6. Loans.
Sec. 7. Grants.
Sec. 8. Eligible housing stimulus activities.
Sec. 9. Shared appreciation agreement.
Sec. 10. Spending requirements.
Sec. 11. Servicer contact.
Sec. 12. Accountability.
Sec. 13. Definitions.
Sec. 14. Funding.
Sec. 15. Protection of right to bear arms.
Sec. 16. Ineligiblity of illegal aliens for assistance.
Sec. 17. Regulations and implementation.

SEC. 2. CONGRESSIONAL PURPOSES.

    The purposes of this Act are--
            (1) to establish a loan and grant program administered by 
        the Department of Housing and Urban Development to help States, 
        metropolitan cities, and urban counties preserve the equity and 
        ensure the safety of the neighbors of homes made vacant by the 
        predatory lending and foreclosure crises, to prevent and reduce 
        the incidence of such vacancies through various means, 
        including purchasing and rehabilitating owner-vacated, 
        foreclosed homes with the goal of stabilizing and occupying 
        them as soon as possible, either through resale or rental to 
        qualified families;
            (2) to distribute these loans and grants to areas with the 
        highest levels of foreclosure and delinquent subprime 
        mortgages, and largest increases in the rate of vacant and 
        abandoned single family homes;
            (3) to provide incentives for States, metropolitan cities, 
        and urban counties to use the funds to stabilize as many 
        properties as possible; and
            (4) to provide housing for low- and moderate-income 
        families, especially those that have lost homes to foreclosure.

SEC. 3. LOANS AND GRANTS TO STATES, METROPOLITAN CITIES, AND URBAN 
              COUNTIES.

    The Secretary of Housing and Urban Development shall, subject to 
the availability of amounts under section 14, make grants under section 
5(a) to qualified States and under subsections (f) and (g) of section 5 
to qualified metropolitan cities and qualified urban counties, 
respectively, and make loans under section 6 in accordance with the 
approved plans of qualified States, qualified metropolitan cities, and 
qualified urban counties, for use to carry out eligible housing 
stimulus activities under section 8. The program under this Act shall 
be administered through the Office of Community Planning and 
Development of the Department of Housing and Urban Development or any 
successor office responsible for administering the community 
development block grant program under title I of the Housing and 
Community Development Act of 1974 (42 U.S.C. 5301 et seq.).

SEC. 4. QUALIFIED PLANS.

    (a) In General.--The Secretary may make a grant under this Act only 
to a State, metropolitan city, or urban county, and may allocate a loan 
authority amount under this Act only for a State, metropolitan city, or 
urban county, that has submitted to the Secretary a plan that meets the 
requirements under this section and has been approved under this 
section.
    (b) Contents.--A plan under this section for an allocation 
recipient shall--
            (1) designate a housing finance agency of the allocation 
        recipient, or other agency, department, or entity of the 
        allocation recipient, or any other designee, as the allocation 
        recipient administrator to act on behalf of the allocation 
        recipient for purposes of this Act;
            (2) describe the housing stimulus activities under section 
        8 to be carried out with assistance under this Act for the 
        allocation recipient by the entity identified pursuant to 
        paragraph (1) of this subsection;
            (3) prioritize the allocation of funds to low- and 
        moderate-income neighborhoods with high concentrations of 
        vacancies, according to the number of census tracts, as 
        determined by the Secretary, to have large increases in the 
        rate of vacancy during the past eight quarters and significant 
        levels of loans determined to be at risk of foreclosure, and 
        describe how such activities will help restore or improve the 
        viability of such neighborhoods by providing for purchase or 
        occupancy of qualified foreclosed properties as soon as 
        practicable and in a manner that will facilitate repayment of 
        the loans provided under this Act for carrying out such 
        activities;
            (4) set forth the procedures that the allocation recipient 
        will use to allocate grant and loan amounts and monitor for 
        compliance with the requirements of section 8;
            (5) provide that grant and loan amounts provided under this 
        Act for the allocation recipient will be used only for eligible 
        housing stimulus activities under section 8 that are eligible 
        under such section for assistance with grant or loan amounts, 
        as applicable;
            (6) contain such assurances as the Secretary shall require 
        that the housing stimulus activities to be carried out with 
        assistance under this Act shall not result in a significant net 
        loss in rental housing in an area in which such activities are 
        undertaken;
            (7) give priority emphasis and consideration to 
        metropolitan areas, metropolitan cities, urban areas, rural 
        areas, low- and moderate-income areas, census tracts and other 
        areas having the greatest need, including those--
                    (A) with the greatest percentage of home 
                foreclosures;
                    (B) with the highest percentage of homes financed 
                by subprime mortgage loans over 90 days delinquent; or
                    (C) identified by the State, qualified metropolitan 
                city, or unit of general local government as likely to 
                face a significant rise in the rate of home 
                foreclosures;
            (8) notwithstanding any other preferences established or 
        authorized under this subsection, provide first priority, in 
        use of amounts from grants or loans under this Act for 
        rehabilitating housing, for providing housing for veterans, 
        members of the Armed Forces on active duty, members of the 
        National Guard or Armed Forces reserves, school teachers, and 
        emergency responders;
            (9) provide preference for activities that serve the lowest 
        income families, who otherwise meet the income requirements 
        under section 8, for the longest period and homeowners, who 
        otherwise meet such income requirements, whose mortgages have 
        been foreclosed;
            (10) provide preference for use of grant and loan amounts 
        in connection with acquisition of qualified foreclosed 
        properties that are acquired no earlier than 60 days after the 
        owner of the property described in section 13(7)(B) acquired 
        such ownership;
            (11) describe any other preferences the allocation 
        recipient may establish, such as housing for first responders, 
        for veterans, for nurses serving underserved areas or homeless 
        persons, or for homeless persons in accordance with the 10-year 
        plan of the State to end homelessness, or providing housing for 
        public school teachers or workforce who are employed by the 
        city or locality in which the housing is located;
            (12) provide for obligation and outlay of grant amounts, 
        and for loan commitments and disbursement, in accordance with 
        the requirements under section 10; and
            (13) in the case of any grant or loan amounts that will be 
        invested with the possibility of a return on investment, 
        provide for use of any return on such investment only for one 
        or more eligible housing stimulus activities under section 8.
    (c) Submission.--
            (1) In general.--The Secretary shall provide for allocation 
        recipients to submit plans under this section to the Secretary 
        and shall establish requirements for the contents and form of 
        such plans. Except in the case of plan resubmitted pursuant to 
        subsection (d)(3), the Secretary may not accept or consider a 
        plan unless the plan is submitted to the Secretary before the 
        expiration of the 30-day period beginning upon the date of the 
        enactment of this Act.
            (2) Public approval.--An allocation recipient may not 
        submit a plan to the Secretary unless the plan is approved by 
        the chief executive officer of the allocation recipient after a 
        public hearing on the plan held pursuant to reasonable public 
        notice.
    (d) Review and Approval.--
            (1) Timing.--The Secretary shall review, and approve or 
        disapprove, each plan submitted or resubmitted pursuant to 
        paragraph (3) in compliance with the requirements established 
        under this section before the expiration of the 30-day period 
        beginning upon the submission of the plan. If the Secretary 
        does not approve or disapprove a plan that is submitted or 
        resubmitted in accordance with the requirements under this 
        section before the expiration of such 30-day period and notify 
        the allocation recipient of such approval or disapproval, the 
        plan shall be considered approved for purposes of this section.
            (2) Standard for disapproval.--The Secretary may disapprove 
        a plan only if the plan fails to comply with the requirements 
        of this Act.
            (3) Resubmission.--If the Secretary disapproves the plan of 
        an allocation recipient, the Secretary shall submit to the 
        allocation recipient the reasons for the disapproval, and the 
        allocation recipient may, during the 15-day period that begins 
        upon notification of such disapproval and the reasons for such 
        disapproval, submit to the Secretary a revised plan for review 
        and approval in accordance with this subsection.

SEC. 5. ALLOCATION OF AMOUNTS.

    (a) Grants.--From the total amount made available under section 
14(a) for grants under this Act, the Secretary shall make a grant to 
each qualified State in the grant amount determined under subsection 
(c) of this section for the qualified State.
    (b) Loans.--From the aggregate amount of authority for the 
outstanding principal balance of loans made under this Act pursuant to 
section 14(b)(1), the Secretary shall allocate such authority for loans 
under this Act for each qualified State in the loan authority amount 
determined under subsection (c) of this section for the qualified 
State.
    (c) Grant Amounts and Loan Authority Amounts.--
            (1) In general.--The grant amount or loan authority amount 
        for a qualified State shall be the foreclosure grant share or 
        foreclosure loan share, respectively, for the State determined 
        under subsection (d), as such share is adjusted in accordance 
        with an index established or selected by the Secretary to 
        account for differences between qualified States in the median 
        price of single family housing in such States.
            (2) Limitation on adjustment.--If such adjustment would 
        result in a grant amount or loan authority amount for any State 
        that exceeds 125 percent of the foreclosure grant share or 
        foreclosure loan share, respectively, for the State, the grant 
        amount or loan authority amount for the State shall be 125 
        percent of foreclosure grant share or foreclosure loan share, 
        respectively, for the State and the Secretary shall increase 
        the grant amounts or loan authority amounts for all other 
        States on a pro rata basis, except as provided in paragraph 
        (3), by the amount necessary to account for the aggregate of 
        any such decreases in grant amounts or loan authority amounts 
        for States to comply with the 125 percent limitation.
            (3) Limitation on reallocation.--No increase in the grant 
        amount or loan authority amount for any State from amounts 
        reallocated pursuant to paragraph (2) shall result in the grant 
        amount or loan authority amount for any State exceeding 125 
        percent of the foreclosure grant share or foreclosure loan 
        share for the State, respectively.
            (4) Priority preference for unused amounts.--States which 
        have their grant or loan amounts reduced under paragraph (2) 
        shall be granted a priority preference for any loans or grants 
        which may be reallocated under subsection (i) (relating to 
        reallocation of funds).
    (d) Foreclosure Shares.--For purposes of this section:
            (1) Grant share.--The foreclosure grant share for a 
        qualified State shall be the amount that bears the same ratio 
        to the total amount made available under section 14(a) as the 
        number of foreclosures on mortgages for single family housing 
        and subprime mortgage loans for single family housing that are 
        over 90 days delinquent, occurring in such State during the 
        most recently completed four calendar quarters for which such 
        information is available, as determined by the Secretary, bears 
        to the aggregate number of such foreclosures and such 
        delinquent subprime mortgage loans occurring in all qualified 
        States during such calendar quarters.
            (2) Loan share.--The foreclosure loan share for a qualified 
        State shall be the amount that bears the same ratio to the 
        aggregate amount of the principal balance of loans that may be 
        outstanding at any time under this Act pursuant to section 
        14(b)(1) as the number of foreclosures on mortgages for single 
        family housing and subprime mortgage loans for single family 
        housing that are over 90 days delinquent, occurring in such 
        State during the most recently completed four calendar quarters 
        for which such information is available, as determined by the 
        Secretary, bears to the aggregate number of such foreclosures 
        and such delinquent subprime mortgage loans occurring in all 
        qualified States during such calendar quarters.
    (e) Distribution of Full Amount.--The Secretary shall establish the 
index referred to in subsection (c) and the grant and loan authority 
amounts for the qualified States in a manner that provides that--
            (1) the aggregate of the grant amounts for all qualified 
        States is equal to the total amount made available under 
        section 14(a); and
            (2) the aggregate of the loan authority amounts for all 
        qualified States is equal to the aggregate amount of authority 
        for the outstanding principal balance of all loans made under 
        this Act pursuant to section 14(b)(1).
    (f) Requirement To Allocate to Qualified Metropolitan Cities.--Of 
any grant amounts and loan authority amounts allocated pursuant to this 
section for a State, the Secretary shall allocate for each qualified 
metropolitan city located in such State a portion of such grant amounts 
and such loan authority amounts that bears the same ratio to such grant 
amounts and loan authority amounts, respectively, allocated for the 
State as the number of foreclosures on mortgages for single family 
housing and subprime mortgage loans for single family housing that are 
over 90 days delinquent, occurring in such qualified metropolitan city 
during the most recently completed four calendar quarters for which 
such information is available, as determined by the Secretary, bears to 
the aggregate number of such foreclosures and such delinquent subprime 
mortgage loans occurring in the State during such calendar quarters. 
The Secretary shall adjust such allocation to account for differences 
between median single family housing prices in the State and in 
qualified metropolitan cities in the State.
    (g) Requirement To Allocate to Qualified Urban Counties.--Of any 
grant amounts and loan authority amounts allocated pursuant to this 
section for a State, such State shall allocate for each qualified urban 
county located in such State a portion of such grant amounts and such 
loan authority amounts that bears the same ratio to such grant amounts 
and loan authority amounts, respectively, allocated for the State as 
the number of foreclosures on mortgages for single family housing and 
subprime mortgage loans for single family housing that are over 90 days 
delinquent, occurring in such qualified urban county during the most 
recently completed four calendar quarters for which such information is 
available, as determined by the Secretary, bears to the aggregate 
number of such foreclosures and such delinquent subprime mortgage loans 
occurring in the State during such calendar quarters. The Secretary 
shall adjust such allocation to account for differences between median 
single family housing prices in the State and in qualified urban 
counties in the State.
    (h) Allocation Exception.--If the aggregate grant and loan 
authority amount to be allocated pursuant to subsection (f) or (g) to a 
qualified metropolitan city or qualified urban county is less than 
$10,000,000, the Secretary may, but is not required to, allocate such 
grant and loan authority amount to such qualified metropolitan city or 
qualified urban county, and the allocation for such State shall be 
increased by the grant and loan authority amount not allocated to such 
qualified metropolitan city or qualified urban county.
    (i) Reallocation of Unused Amounts.--The Secretary shall recapture 
any grant amounts and loan authority amounts allocated to a State that 
are not used in a timely fashion in accordance with section 10, as the 
Secretary shall prescribe, and shall reallocate such amounts among all 
other qualified States in accordance with the provisions of this Act 
for allocation of grant amounts and loan authority amounts.

SEC. 6. LOANS.

    (a) Requirement of Loan Authority Amount.--The Secretary may make a 
loan under this Act for use in the area of an allocation recipient only 
to the extent and in such amounts that loan authority amounts for such 
allocation recipient are available.
    (b) Revolving Availability of Loan Authority Amount.--The loan 
authority amount allocated for each allocation recipient shall--
            (1) upon the Secretary entering into a binding commitment 
        to make a loan under this Act for use in the area of such 
        allocation recipient, be decreased by the amount of the 
        principal obligation of such loan; and
            (2) upon the repayment to the Secretary by any borrower of 
        any principal amounts borrowed under a loan this Act for use in 
        the area of such allocation recipient, be increased by the 
        amount of principal repaid.
    (c) Assisted Entities.--The loan authority amount of an allocation 
recipient may be used for activities described in section 8(a) 
undertaken by--
            (1) the allocation recipient;
            (2) a unit of local government or a local governmental 
        entity; or
            (3) any other entity, as provided in the approved plan of 
        the allocation recipient under section 4.
    (d) Loan Terms.--Each loan provided under this Act from the loan 
authority amount of an allocation recipient shall--
            (1) bear no interest;
            (2) have a term to maturity of--
                    (A) 3 years, in the case of any loan made to 
                purchase or finance the purchase of qualified 
                foreclosed housing for use under section 8(a)(1) for 
                homeownership; and
                    (B) 5 years, in the case of any loan made to 
                purchase or finance the purchase of qualified 
                foreclosed housing for use under section 8(a)(2) for 
                rental;
            (3) not provide for amortization of the principal 
        obligation of the loan during such term;
            (4) be non-recourse;
            (5) require payment of the original principal obligation 
        under the loan only upon the expiration of the term of the 
        loan; and
            (6) have such other terms and conditions as the Secretary 
        may provide.
    (e) Procedure.--A qualified State, a qualified metropolitan city, 
and a qualified urban county shall--
            (1) enter into a loan agreement on behalf of the Secretary 
        on terms established under this Act and any other terms such 
        State, qualified metropolitan city, or qualified urban county 
        determines appropriate;
            (2) disburse the loan amount in accordance with such terms, 
        subject only to the absence of sufficient loan authority amount 
        for such State, such qualified metropolitan city, or such 
        qualified urban county;
            (3) monitor such loans; and
            (4) collect and transmit to the Secretary any loan 
        repayments.
    (f) Eligibility for Repeat Lending.--A loan under this Act may be 
made to an entity that has previously borrowed amounts under a loan 
under this Act only if such entity has repaid 90 percent or more of the 
amounts due under all previous such loans. The Secretary may waive such 
requirement upon a request by an allocation recipient if the borrower 
has demonstrated satisfactory progress in utilizing outstanding loans 
and sufficient capacity to utilize additional loan amounts effectively.
    (g) Sunset.--The Secretary may not enter into any commitment to 
make a loan under this Act, or make any such loan, after the expiration 
of the 48-month period beginning on the date of the enactment of this 
Act.

SEC. 7. GRANTS.

    The grant amount of an allocation recipient may be used under 
section 8(b) by the allocation recipient, a unit of local government or 
a local governmental entity, or a nonprofit organization.

SEC. 8. ELIGIBLE HOUSING STIMULUS ACTIVITIES.

    (a) Loan Amounts.--Amounts provided under a loan under this Act for 
an allocation recipient shall be used, in accordance with the approved 
plan of such allocation recipient, only for the following activities:
            (1) Homeownership housing provision.--To purchase or 
        finance the purchase of qualified foreclosed housing for resale 
        as housing for homeownership to families having incomes that do 
        not exceed 140 percent of the median income for the area in 
        which the housing is located.
            (2) Rental housing provision.--To purchase or finance the 
        purchase of qualified foreclosed housing for use as rental, 
        lease-purchase, or rent-to-own housing, subject to the 
        following requirements:
                    (A) Qualified tenants.--All dwelling units in the 
                housing purchased or financed using any loan amounts 
                shall be available for rental only by families whose 
                incomes do not exceed 100 percent of the median income 
                for the area in which the housing is located.
                    (B) Rents.--Rents for each dwelling unit in the 
                housing purchased or financed using any loan amounts 
                shall be established at amounts that do not exceed 
                market rents for comparable dwelling units located in 
                the area in which the housing is located and in 
                accordance with such requirements as the Secretary 
                shall establish to ensure that rents are established in 
                a fair, objective, and arms-length manner.
            (3) Housing rehabilitation.--To rehabilitate qualified 
        foreclosed housing acquired with assistance provided pursuant 
        to this subsection, to the extent necessary to comply with 
        applicable laws, codes, and other requirements relating to 
        housing safety, quality, and habitability, or to make 
        improvements to the housing to increase the energy efficiency 
        or conservation of the housing or provide a renewable energy 
        source or sources for the housing, for the purpose of reselling 
        the housing, to the extent possible, during the 3-month period 
        that begins upon completion of rehabilitation and at a price 
        that is as close as possible to the acquisition price of the 
        housing.
    (b) Grant Amounts.--Grant amounts provided under this Act to an 
allocation recipient shall be used, in accordance with the approved 
plan of such allocation recipient, only for the following activities:
            (1) Operating and holding costs.--For costs of holding and 
        operating qualified foreclosed housing acquired pursuant to 
        subsection (a), including expenses incurred operating housing 
        assisted under this Act with respect to the administration, 
        maintenance, repair, security, utilities, fuel, furnishings, 
        equipment, management, taxes, handling, insurance, and other 
        related costs.
            (2) Costs relating to property acquisition.--For incidental 
        costs involved in acquiring qualified foreclosed housing 
        pursuant to subsection (a), including reasonable closing costs, 
        except that grant amounts may not be used to pay any portion of 
        the purchase price for the housing under section 13(7)(C).
            (3) Administrative costs.--For costs of the allocation 
        recipient in administering loan authority amounts and grant 
        amounts under this Act, except that the amount of grant amounts 
        provided under this Act to an allocation recipient that may be 
        used under this paragraph shall not exceed the amount equal to 
        8 percent of the sum of the grant amounts provided to the 
        allocation recipient pursuant to subsection (a), (f), or (g) of 
        section 5, as applicable, and the loan authority amount 
        allocated to the allocation recipient pursuant to subsection 
        (b), (f), or (g) of section 5, as applicable.
            (4) Planning costs.--For planning costs of the State in 
        connection with this Act, except that the amount of grant 
        amounts provided under this Act to an allocation recipient that 
        may be used under this paragraph shall not exceed the amount 
        equal to 2 percent of the sum of the grant amounts provided to 
        the allocation recipient pursuant to subsection (a), (f), or 
        (g) of section 5, as applicable, and the loan authority amount 
        allocated to the State pursuant to subsection (b), (f), or (g) 
        of section 5, as applicable.
            (5) Housing rehabilitation.--For activities set forth in 
        subsection (a)(3), except that an allocation recipient shall 
        not use more than 20 percent of a grant amount allocation for 
        such activities.
            (6) Demolition.--For costs of demolishing qualified 
        foreclosed housing that is deteriorated or unsafe, but amounts 
        may be used under this paragraph only if the Secretary 
        determines that the neighborhood or other area in which the 
        housing is located has a high incidence of vacant and abandoned 
        housing (or other vacant and abandoned structures) and is 
        experiencing a significant decline in population.
Notwithstanding any other provision of this subsection, grant amounts 
provided under this Act may not be used to provide assistance of any 
kind (including grants, loans, and closing cost financing) to provide 
amounts for downpayments for any homebuyers of single family housing.
    (c) Prohibited Uses.--The Secretary shall, by regulation, set forth 
prohibited uses of grant or loan amounts under this Act, which shall 
include use for--
            (1) political activities;
            (2) advocacy;
            (3) lobbying, whether directly or through other parties;
            (4) counseling services;
            (5) travel expenses; and
            (6) preparing or providing advice on tax returns.
    (d) Income Targeting Requirement.--
            (1) Very low-income families.--Not less than 50 percent of 
        the total grant amounts an allocation recipient makes available 
        under this Act shall be used for activities under subsection 
        (b) in connection with providing housing for families whose 
        incomes do not exceed 50 percent of the median income for the 
        area in which the housing is located.
            (2) Extremely low-income families.--Not less than 50 
        percent of the total grant amounts an allocation recipient 
        makes available under paragraph (1) shall be used for 
        activities under subsection (b) in connection with providing 
        housing for families whose incomes do not exceed 30 percent of 
        the median income for the area in which the housing is located.
            (3) Waiver.--
                    (A) In general.--The Secretary may establish a 
                percentage for purposes of paragraph (2) that is less 
                than 50 percent if an allocation recipient certifies 
                that, in addition to any other requirements the 
                Secretary may establish--
                            (i) such allocation recipient has attempted 
                        to use all other federally related resources 
                        available to it in combination with the 
                        resources available under this Act to meet the 
                        requirements of paragraph (2); and
                            (ii) the failure to comply with paragraph 
                        (2) will not result in an overall loss of 
                        housing affordable to families whose incomes do 
                        not exceed 30 percent of area median income in 
                        the area of such allocation recipient.
                    (B) Consideration of housing needs.--In 
                establishing an alternative percentage for purposes of 
                paragraph (2) for an allocation recipient that meets 
                the certification requirements of subparagraph (A), the 
                Secretary shall take into consideration the housing 
                needs in the area of such allocation recipient of 
                families whose incomes do not exceed 30 percent of area 
                median income.
    (e) Use for Rural Areas.--An allocation recipient receiving any 
grant or loan amounts under this Act that includes any rural areas 
shall use a portion of its grant and loan authority amount for eligible 
activities located in rural areas that is proportionate to the 
identified need for such activities in such rural areas.
    (f) Security.--A qualified State, or at its election, a qualified 
metropolitan city or qualified urban county, shall record a lien in the 
name of the Secretary on any qualified foreclosed housing purchased or 
financed with a loan under this section in the amount of the principal 
obligation under the loan and interest due under the loan.
    (g) Qualified Homeowners.--This Act may not be construed to prevent 
the resale of qualified foreclosed housing to a prior owner or occupant 
of such housing who meets the income requirements of this Act.
    (h) Voucher Nondiscrimination.--
            (1) Prospective tenants.--A recipient of amounts from a 
        loan or grant under this Act may not refuse to lease a dwelling 
        unit in housing assisted with any such loan or grant amounts to 
        a holder of a voucher or certificate of eligibility under 
        section 8 of the United States Housing Act of 1937 (42 U.S.C. 
        1437f) because of the status of the prospective tenant as such 
        a holder.
            (2) Current tenants.--In the case of any qualified 
        foreclosed housing for which funds made available under the Act 
        are used and in which a recipient of assistance under section 
        8(o) of the U.S. Housing Act of 1937 resides at the time of 
        acquisition or financing, the owner and any successor in 
        interest shall be subject to the lease and to the housing 
        assistance payments contract for the occupied unit. Vacating 
        the property prior to sale shall not constitute good cause for 
        termination of the tenancy unless the property is unmarketable 
        while occupied or unless the owner or subsequent purchaser 
        desires the unit for personal or family use. This paragraph 
        shall not preempt any State or local law that provides more 
        protection for tenants.
    (i) Effect of Foreclosure on Preexisting Lease.--
            (1) In general.--In the case of any foreclosure on any 
        dwelling or residential real property acquired with any amounts 
        made available under this Act, any successor in interest in 
        such property pursuant to the foreclosure shall assume such 
        interest subject to--
                    (A) the provision, by the successor in interest, of 
                a notice to vacate to any bona fide tenant at least 90 
                days before the effective date of the notice to vacate; 
                and
                    (B) the rights of any bona fide tenant, as of the 
                date of such notice of foreclosure--
                            (i) under any bona fide lease entered into 
                        before the notice of foreclosure to occupy the 
                        premises until the end of the remaining term of 
                        the lease or the end of the 6-month period 
                        beginning on the date of the notice of 
                        foreclosure, whichever occurs first, subject to 
                        the receipt by the tenant of the 90-day notice 
                        under subparagraph (A); or
                            (ii) without a lease or with a lease 
                        terminable at will under State law, subject to 
                        the receipt by the tenant of the 90-day notice 
                        under subparagraph (A), except that nothing 
                        under this subparagraph shall affect the 
                        requirements for termination of any federally 
                        subsidized tenancy.
            (2) Bona fide lease or tenancy.--For purposes of this 
        subsection, a lease or tenancy shall be considered bona fide 
        only if--
                    (A) the mortgagor under the contract is not the 
                tenant;
                    (B) the lease or tenancy was the result of an arms-
                length transaction; or
                    (C) the lease or tenancy requires the receipt of 
                rent that is not substantially less than fair market 
                rent for the property.
    (j) Prohibition of Demolition of Public Housing.--Notwithstanding 
any other provision of this Act, amounts from a grant or loan under 
this Act may not be used to demolish any public housing (as such term 
is defined in section 3 of the United States Housing Act of 1937 (42 
U.S.C. 1437a)).

SEC. 9. SHARED APPRECIATION AGREEMENT.

    Notwithstanding any other provision of this Act, no amounts from a 
loan or grant under this Act may be used under section 8 for any 
qualified foreclosed housing unless such binding agreements are entered 
into, in accordance with such requirements as the Secretary shall 
establish, that ensure that the Federal Government shall, upon any sale 
or disposition of the qualified foreclosed housing by the owner who 
acquires the housing pursuant to assistance under this Act, receive an 
amount equal to 20 percent of the difference between the net proceeds 
from such sale or disposition and the cost of such acquisition of the 
housing pursuant to assistance under this Act, after deductions for 
expenditures paid or incurred after the date of such acquisition that 
are properly chargeable to capital account (within the meaning of 
section 1016 of the Internal Revenue Code of 1986) with respect to such 
housing. In the case of a for-profit owner, this section shall be 
applied by substituting ``50 percent'' for ``20 percent''.

SEC. 10. SPENDING REQUIREMENTS.

    (a) In General.--Each allocation recipient that receives a grant 
under this Act or is allocated loan authority amounts under this Act 
pursuant to section 5(b) shall--
            (1) commence obligation of such grant amounts and 
        commitment of such loan authority amounts not later than the 
        expiration of the 120-day period that begins upon approval of 
        the approved plan of allocation recipient;
            (2) obligate all such grant amounts and enter into 
        commitments for all such loan authority amounts not later than 
        the expiration of the 180-day period beginning upon such 
        approval; and
            (3) except as provided in subsection (b) of this section, 
        outlay all such grant amounts and disburse all such loan 
        authority amounts not later than the 24-month period that 
        begins upon such approval.
This subsection shall not apply to loan authority amounts of an 
allocation recipient attributable, pursuant to section 6(b)(2), to 
repayment of principal amounts of loans under this Act.
    (b) Exception to Spending Requirement.--If an allocation recipient 
in good faith makes a request, in the plan submitted to the Secretary 
pursuant to section 4 or otherwise after approval of such plan, for 
extension of the period referred to in paragraph (1), (2), or (3) of 
subsection (a) of this section, the Secretary may extend the period for 
not more than 5 months.

SEC. 11. SERVICER CONTACT.

    The servicer of a federally related mortgage loan (as such term is 
defined in section 3 of the Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2602)) shall notify the unit of general local 
government in which the property securing the mortgage is located upon 
becoming responsible for a qualified foreclosed property and provide 
such unit of general local government with the name and 24-hour contact 
information of a representative authorized to negotiate purchases.

SEC. 12. ACCOUNTABILITY.

    (a) Reporting.--Each allocation recipient that receives a grant or 
allocation of loan authority amount under this Act shall submit a 
report to the Secretary, not later than the expiration of the 12-month 
period beginning upon the approval of the qualified plan by the 
Secretary, regarding use of such amounts which shall contain such 
information, including information about the location and type of 
assisted properties and the income of families purchasing or renting 
housing assisted under this Act, as the Secretary shall require.
    (b) Misuse of Amounts.--If the Secretary determines that any 
amounts from a grant or loan under this Act for an allocation recipient 
or other recipient of grant or loans funds has been used in a manner 
that is in violation of this Act, any regulations issued under this 
Act, or any requirements or conditions under which such amounts were 
provided, the Secretary shall require the allocation recipient or other 
recipient of grant or loans funds to reimburse the Treasury of the 
United States in the amount of any such misused funds.
    (c) Hold Harmless.--Notwithstanding subsection (b), a State shall 
not be required to reimburse the Treasury of the United States for any 
misused funds such State is required to allocate to a qualified 
metropolitan city or qualified urban county under subsection (f) or (g) 
of section 5, respectively.

SEC. 13. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Allocation recipient.--The term ``allocation 
        recipient'' means--
                    (A) a qualified State;
                    (B) a qualified metropolitan city; and
                    (C) a qualified urban county.
            (2) Allocation recipient administrator.--The term 
        ``allocation recipient administrator'' means the entity that is 
        designated, pursuant to section 4(b)(1), in the approved plan 
        of the allocation recipient to act for the allocation recipient 
        for purposes of this Act.
            (3) Approved plan.--The term ``approved plan'' means a plan 
        of an allocation recipient that has been approved pursuant to 
        section 4.
            (4) Covered multifamily housing.--The term ``covered 
        multifamily housing'' means a residential structure that 
        consists of 64 or fewer dwelling units.
            (5) Loan authority amount.--The term ``loan authority 
        amount'' means, with respect to an allocation recipient, the 
        amount of loan authority available pursuant to section 14(b)(1) 
        that is allocated for the allocation recipient pursuant to 
        subsection (b), (f), or (g) of section 5, as applicable, as 
        such amount may be increased or decreased pursuant to section 
        6(b).
            (6) Nonprofit organization.--The term ``nonprofit 
        organization'' has the meaning given such term in section 104 
        of the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 12704).
            (7) Qualified foreclosed housing.--The term ``qualified 
        foreclosed housing'' means housing that--
                    (A)(i) is single family housing that is not 
                occupied by an owner, pursuant to foreclosure or 
                assignment of the mortgage on the housing or forfeiture 
                of the housing; or
                    (ii) is covered multifamily housing;
                    (B) is owned by a lender, mortgage company, 
                investor, financial institution, or other such entity, 
                or any government entity, pursuant to foreclosure or 
                assignment of the mortgage on the housing or forfeiture 
                of the housing; and
                    (C) has a purchase price--
                            (i) in the case of single family housing, 
                        that does not exceed the lesser of--
                                    (I) 110 percent of the average 
                                purchase price for single family 
                                housing in the area in which the 
                                housing is located, as determined by 
                                the Secretary; or
                                    (II) the current appraised value of 
                                the property;
                        except that in the case of any such housing 
                        that has an appraised value that is less than 
                        110 percent of the average purchase price for 
                        single family housing in the area in which the 
                        housing is located, an allocation recipient may 
                        appeal such appraisal to the Secretary and the 
                        Secretary may determine that the average 
                        purchase price shall operate as the cap on the 
                        purchase price; and
                            (ii) in the case of covered multifamily 
                        housing, that does not exceed the dollar amount 
                        limitation, for housing of the applicable size 
                        located in the area in which the housing is 
                        located, on the amount of a principal 
                        obligation of a mortgage eligible for insurance 
                        under section 207 of the National Housing Act 
                        (12 U.S.C. 1713), as in effect on the date of 
                        the enactment of this Act pursuant to such 
                        section 207(c)(3)(A) and section 206A of such 
                        Act (12 U.S.C. 1712a).
            (8) Qualified metropolitan city.--The term ``qualified 
        metropolitan city'' means an incorporated place, for which 
        there is an improved plan, that--
                    (A) is among the 100 most populous incorporated 
                places in the United States, as determined according to 
                data from the most recent decennial census that is 
                published before the date of the enactment of this Act; 
                or
                    (B)(i) has a minimum population of 50,000, as 
                determined according to data from the most recent 
                decennial census that is published before the date of 
                the enactment of this Act; and
                    (ii) has a foreclosure rate that exceeds 125 
                percent of the foreclosure rate for the entire State.
            (9) Qualified state.--The term ``qualified State'' means a 
        State for which there is an approved plan.
            (10) Qualified urban county.--The term ``qualified urban 
        county'' means an urban county (as such term is defined in 
        section 102 of the Housing and Community Development Act of 
        1974 (42 U.S.C. 5302)), for which there is an approved plan, 
        that is among the 50 most populous urban counties in the United 
        States, as determined--
                    (A) according to data from the most recent 
                decennial census; and
                    (B) excluding the population of any qualified 
                metropolitan city within such urban county, unless such 
                metropolitan city has agreed to have its population 
                included with the population of the county for the 
                purposes of this Act.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (12) Single family housing.--The term ``single family 
        housing'' means a residential structure consisting of from one 
        to four dwelling units.
            (13) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, and other territory 
        or possession of the United States.

SEC. 14. FUNDING.

    (a) Grants.--There is authorized to be appropriated to the 
Secretary of the Treasury $7,500,000,000 for grants under this Act.
    (b) Direct Loans.--
            (1) Loan commitment authority limitation.--Subject only to 
        the availability of sufficient amounts for the costs (as such 
        term is defined in section 502 of the Federal Credit Reform Act 
        of 1990 (2 U.S.C. 661a)) of such loans and the absence of 
        qualified requests for loans, the Secretary shall enter into 
        commitments to make loans under this Act, and shall make such 
        loans, in an amount such that the aggregate outstanding 
        principal balance of such loans does not at any time exceed 
        $7,500,000,000.
            (2) Authorization of appropriations for costs.--There is 
        authorized to be appropriated such sums as may be necessary for 
        costs (as such term is defined in section 502 of the Federal 
        Credit Reform Act of 1990 (2 U.S.C. 661a)) of loans under this 
        Act.

SEC. 15. PROTECTION OF RIGHT TO BEAR ARMS.

    Nothing in this Act shall affect the right to bear arms under the 
Second Amendment to the Constitution of the United States.

SEC. 16. INELIGIBLITY OF ILLEGAL ALIENS FOR ASSISTANCE.

    Aliens who are not lawfully present in the United States shall be 
ineligible for financial assistance under this Act, as provided and 
defined by section 214 of the Housing and Community Development Act of 
1980 (42 U.S.C. 1436a). Nothing in this Act shall be construed to alter 
the restrictions or definitions in such section 214.

SEC. 17. REGULATIONS AND IMPLEMENTATION.

    (a) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this Act.
    (b) Implementation.--Pending the effectiveness of regulations 
issued pursuant to subsection (a), the Secretary shall take such action 
as may be necessary to implement this Act by notice, guidance, and 
interim rules.

            Passed the House of Representatives May 8, 2008.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.