[Congressional Record Volume 141, Number 169 (Monday, October 30, 1995)]
[House]
[Pages H11392-H11398]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         HOMESTEADING AND NEIGHBORHOOD RESTORATION ACT OF 1995

  Mr. LAZIO of New York. Mr. Speaker, I move to suspend the rules and 
pass the bill, H.R. 1691, to provide for innovative approaches for home 
ownership opportunity and provide for the temporary extension of the 
rural rental housing program, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 1691

       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 ``Homesteading and 
     Neighborhood Restoration Act of 1995''.

     SEC. 2. ASSISTANCE FOR HABITAT FOR HUMANITY AND OTHER SELF-
                   HELP HOUSING PROVIDERS.

       (a) Grant Authority.--The Secretary of Housing and Urban 
     Development shall, to the extent amounts are available to 
     carry out this section and the requirements of this section 
     are met, make grants for use in accordance with this section 
     to--
       (1) Habitat for Humanity International, whose 
     organizational headquarters are located in Americus, Georgia; 
     and
       (2) other national or regional organizations or consortia 
     that have experience in providing or facilitating self-help 
     housing homeownership opportunities.
       (b) Goals and Accountability.--In making grants under this 
     section, the Secretary shall take such actions as may be 
     necessary to ensure that--
       (1) assistance provided under this section is used to 
     facilitate and encourage innovative homeownership 
     opportunities through the provision of self-help housing, 
     under which the homeowner contributes a significant amount of 
     sweat equity toward the construction of the new dwelling;
       (2) assistance provided under this section for land 
     acquisition and infrastructure development results in the 
     development of not less than 5,000 new dwellings;
       (3) the dwellings constructed in connection with assistance 
     provided under this section are quality dwellings that comply 
     with local building and safety codes and standards and are 
     available at prices below the prevailing market prices;
       (4) the provision of assistance under this section 
     establishes and fosters a partnership between the Federal 
     Government and Habitat for Humanity International, its 
     affiliates, and other organizations and consortia, resulting 
     in efficient development of affordable housing with minimal 
     Governmental intervention, limited Governmental regulation, 
     and significant involvement by private entities;
       (5) activities to develop housing assisted pursuant to this 
     section involve community participation similar to the 
     homeownership program carried out by Habitat for Humanity 
     International, in which volunteers assist in the construction 
     of dwellings; and
       (6) dwellings are developed in connection with assistance 
     under this section on a geographically diverse basis, which 
     includes areas having high housing costs, rural areas, and 
     areas underserved by other homeownership opportunities that 
     are populated by low-income families unable to otherwise 
     afford housing.

     If, at any time, the Secretary determines that the goals 
     under this subsection cannot be met by providing assistance 
     in accordance with the terms of this section, the Secretary 
     shall immediately notify the applicable Committees in writing 
     of such determination and any proposed changes for such goals 
     or this section.
       (c) Allocation.--Of any amounts available for grants under 
     this section--
       (1) 50 percent shall be used for a grant to the 
     organization specified in subsection (a)(1); and
       (2) 50 percent shall be used for grants to organizations 
     and consortia under subsection (a)(2).
       (d) Use.--
       (1) Purpose.--Amounts from grants made under this section 
     shall be used only for eligible expenses in connection with 
     developing new decent, safe, and sanitary nonluxury dwellings 
     in the United States for families and persons who otherwise 
     would be unable to afford to purchase a dwelling.
       (2) Eligible expenses.--For purposes of paragraph (1), the 
     term ``eligible expenses'' means costs only for the following 
     activities:
       (A) Land acquisition.--Acquiring land (including financing 
     and closing costs).
       (B) Infrastructure improvement.--Installing, extending, 
     constructing, rehabilitating, or otherwise improving 
     utilities and other infrastructure.

     Such term does not include any costs for the rehabilitation, 
     improvement, or construction of dwellings.
       (e) Establishment of Grant Fund.--
       (1) In general.--Any amounts from any grant made under this 
     section shall be deposited by the grantee organization or 
     consortium in a fund that is established by such organization 
     or consortium for such amounts, administered by such 
     organization or consortium, and available for use only for 
     the purposes under subsection (d). Any interest, fees, or 
     other earnings of the fund shall be deposited in the fund and 
     shall be considered grant amounts for purposes of this 
     section.
       (2) Assistance to habitat for humanity affiliates.--Habitat 
     for Humanity International may use amounts in the fund 
     established for such organization pursuant to paragraph (1) 
     for the purposes under subsection (d) by providing assistance 
     from the fund to local affiliates of such organization.
       (f) Requirements for Assistance to Other Organizations.--
     The Secretary may make a grant to an organization or 
     consortium under subsection (a)(2) only pursuant to--
       (1) an expression of interest by such organization or 
     consortia to the Secretary for a grant for such purposes;
       (2) a determination by the Secretary that the organization 
     or consortia has the capability and has obtained financial 
     commitments (or has the capacity to obtain financial 
     commitments) necessary to--
       (A) develop not less than 30 dwellings in connection with 
     the grant amounts; and
       (B) otherwise comply with a grant agreement under 
     subsection (i); and
       (3) a grant agreement entered into under subsection (i).
       (g) Treatment of Unused Amounts.--Upon the expiration of 
     the 6-month period beginning upon the Secretary first 
     providing notice of the availability of amounts for grants 
     under subsection (a)(2), the Secretary shall determine 
     whether the amount remaining from the aggregate amount 
     reserved under subsection (c)(2) exceeds the amount needed to 
     provide funding in connection with any expressions of 
     interest under subsection (f)(1) made by such date that are 
     likely to result in grant agreements under subsection (i). If 
     the Secretary determines that such excess amounts remain, the 
     Secretary shall provide the excess amounts to Habitat for 
     Humanity International by making a grant to such organization 
     in accordance with this section.
       (h) Geographical Diversity.--In using grant amounts 
     provided under subsection (a)(1), Habitat for Humanity 
     International shall ensure that the amounts are used in a 
     manner that results in national geographic diversity among 
     housing developed using such amounts. In making grants under 
     subsection (a)(2), the Secretary shall ensure that grants are 
     provided and grant amounts are used in a manner that results 
     in national geographic diversity among housing developed 
     using grant amounts under this section.
       (i) Grant Agreement.--A grant under this section shall be 
     made only pursuant to a grant agreement entered into by the 
     Secretary and the organization or consortia receiving the 
     grant, which shall--
       (1) require such organization or consortia to use grant 
     amounts only as provided in this section;
       (2) provide for the organization or consortia to develop a 
     specific and reasonable number of dwellings using the grant 
     amounts, which number shall be established taking into 
     consideration costs and economic conditions in the areas in 
     which the dwellings will be developed, but in no case shall 
     be less than 30;

[[Page H 11393]]

       (3) require the organization or consortia to use the grant 
     amounts in a manner that leverages other sources of funding 
     (other than grants under this section), including private or 
     public funds, in developing the dwellings;
       (4) require the organization or consortia to comply with 
     the other provisions of this section;
       (5) provide that if the organization or consortia has not 
     used any grant amounts within 24 months after such amounts 
     are first disbursed to the organization or consortia, the 
     Secretary shall recapture such unused amounts; and
       (6) contain such other terms as the Secretary may require 
     to provide for compliance with subsection (b) and the 
     requirements of this section.
       (j) Grant Payments.--
       (1) 1-step disbursement.--With respect to any grant under 
     subsection (a)(2) in an amount less than $8,000,000, the 
     Secretary shall make the total amount of the grant available 
     to the grantee organization or consortia upon entering into 
     the grant agreement under subsection (i) and providing notice 
     under paragraph (3).
       (2) 2-step disbursement.--With respect to the grant under 
     subsection (a)(1) and any grant under subsection (a)(2) in an 
     amount equal to or exceeding $8,000,000, the Secretary shall 
     disburse the grant amounts in 2 equal payments, as follows:
       (A) Initial payment.--The first payment shall be made 
     available to the grantee organization or consortia upon 
     entering into the grant agreement under subsection (i) and 
     providing notice under paragraph (3).
       (B) Final payment.--The second payment shall be made 
     available to the organization or consortia subject to the 
     following requirements:
       (i) Notice.--The amounts may not be made available until 30 
     days after the Secretary certifies to the applicable 
     Committees that the grant amounts provided under subparagraph 
     (A) to the organization or consortia have been used in 
     accordance with this section to develop the new dwellings 
     required under the grant agreement.
       (ii) Fulfillment of grant agreement.--If the Secretary 
     determines that the organization or consortia has not, within 
     24 months after amounts are first made available under 
     subparagraph (A) to the organization or consortia, 
     substantially fulfilled the obligations under the grant 
     agreement, including development of the appropriate number of 
     dwellings under the agreement, the Secretary shall use any 
     such undisbursed amounts remaining from such grant for other 
     grants in accordance with this section.
       (3) Notification to congress.--Notification under this 
     paragraph is written notification to the applicable 
     Committees of a grant, the amount of the grant, and the terms 
     of the grant agreement.
       (4) Failure to report.--If at any time the Secretary fails 
     to report to the applicable Committees as required in this 
     subsection, the Secretary may not subsequently make any grant 
     under this section and may not subsequently disburse any 
     amounts under any grant previously made.
       (k) Records and Audits.--During the period beginning upon 
     the making of a grant under this section and ending upon 
     close-out of the grant under subsection (l)--
       (1) the organization awarded the grant under subsection 
     (a)(1) or (a)(2) shall keep such records and adopt such 
     administrative practices as the Secretary may require to 
     ensure compliance with the provisions of this section and the 
     grant agreement; and
       (2) the Secretary and the Comptroller General of the United 
     States, and any of their duly authorized representatives, 
     shall have access for the purpose of audit and examination to 
     any books, documents, papers, and records of the grantee 
     organization or consortia and its affiliates that are 
     pertinent to the grant made under this section.
       (l) Close-Out.--
       (1) In general.--The Secretary shall close out a grant made 
     under this section upon determining that the aggregate amount 
     of any assistance provided from the fund established under 
     subsection (e)(1) by the grantee organization or consortium 
     exceeds the amount of the grant. For purposes of this 
     paragraph, any interest, fees, and other earnings of the fund 
     shall be excluded from the amount of the grant.
       (2) Effect.--After such close-out, no grantee organization 
     or consortia, or its affiliates, may be required to comply 
     with any provision of this section or the grant agreement or 
     to account to the Secretary for use of grant amounts.
       (m) Environmental Review.--A grant under this section shall 
     be considered to be funds for a special project for purposes 
     of section 305(c) of the Multifamily Housing Property 
     Disposition Reform Act of 1994.
       (n) Report to Congress.--Not later than 90 days after 
     close-out of all grants under this section is completed, the 
     Secretary shall submit a report to the applicable Committees 
     describing the grants made under this section, the grantees, 
     the housing developed in connection with the grant amounts, 
     and the purposes for which the grant amounts were used.
       (o) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Applicable committees.--The term ``applicable 
     Committees'' means the Committee on Banking and Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (3) United states.--The term ``United States'' includes the 
     States 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 any other territory or possession of the United States.
       (p) Funding.--Of any amounts previously made available for 
     annual contributions for assisted housing, $50,000,000 shall 
     be used by the Secretary to carry out this section, subject 
     to existing laws and rules governing reprogramming of 
     amounts. Any such amounts shall remain available for such 
     purposes until expended.
       (q) Regulations.--The Secretary shall issue any final 
     regulations necessary to carry out this section not later 
     than 30 days after the date of the enactment of this Act. The 
     regulations shall take effect upon issuance and may not 
     exceed, in length, 5 full pages in the Federal Register.

     SEC. 3. EXTENSION OF MULTIFAMILY RURAL HOUSING LOAN PROGRAM.

       (a) Authority To Make Loans.--Section 515(b)(4) of the 
     Housing Act of 1949 (42 U.S.C. 1485(b)(4)) is amended by 
     striking ``September 30, 1994'' and inserting ``September 30, 
     1996''.
       (b) Set-Aside for Nonprofit Entities.--The first sentence 
     of section 515(w)(1) of the Housing Act of 1949 is amended by 
     striking ``fiscal years 1993 and 1994'' and inserting 
     ``fiscal year 1996''.

     SEC. 4. REFORMS FOR MULTIFAMILY RURAL HOUSING LOAN PROGRAM.

       (a) Limitation on Project Transfers.--Section 515 of the 
     Housing Act of 1949 (42 U.S.C. 1485) is amended by inserting 
     after subsection (g) the following new subsection:
       ``(h) Project Transfers.--After the date of the enactment 
     of the Homesteading and Neighborhood Restoration Act of 1995, 
     any interest in the ownership of a project for which a loan 
     is made or insured under this section may be transferred only 
     if the Secretary determines that such transfer would be in 
     the best interests of the tenants of the housing for which 
     the loan was made or insured and of the Federal 
     Government.''.
       (b) Equity Loans.--Section 515(t) of the Housing Act of 
     1949 is amended--
       (1) by striking paragraphs (4) and (5); and
       (2) by redesignating paragraphs (6) through (8) as 
     paragraphs (4) through (6), respectively.
       (c) Repeal of Prohibitions.--Section 515 of the Housing Act 
     of 1949 is amended by striking subsection (z).
       (d) Location of Projects.--Section 532 of the Housing Act 
     of 1949 (42 U.S.C. 1490l) is amended--
       (1) in subsection (a), by inserting ``other than assistance 
     under section 515'' after ``in making assistance''; and
       (2) by adding at the end the following new subsection:
       ``(c) Allocation of Section 515 Loans.--
       ``(1) Procedure.--The Secretary shall make assistance under 
     section 515 available pursuant to an objective procedure 
     established by the Secretary, under which the Secretary shall 
     identify counties and communities having the greatest need 
     for such assistance and designate such counties and 
     communities to receive such assistance. Under such procedure, 
     the Secretary shall use objective measures to determine the 
     need for rental housing assistance, which may include the 
     incidence of poverty, substandard housing, lack of mortgage 
     credit, lack or insufficient amount of affordable housing, 
     and other factors demonstrating a need for affordable 
     housing.
       ``(2) Information.--The Secretary shall use information 
     from the decennial censuses of the United States, relevant 
     comprehensive affordable housing strategies under section 105 
     of the Cranston-Gonzalez National Affordable Housing Act, and 
     other reliable sources obtained by the Secretary which 
     demonstrate the need for affordable rental housing in rural 
     areas.
       ``(3) Designation.--A designation under paragraph (1) shall 
     not be effective for a period of more than 3 years, but may 
     be renewed by the Secretary under the procedure under 
     paragraph (1). The Secretary shall cause to be published in 
     the Federal Register a list of areas designated under 
     paragraph (1) and a reasonable timetable for submission of 
     preapplications. The Secretary shall take such other 
     reasonable actions as the Secretary considers appropriate to 
     notify the public of such designations.''.
       (e) Equity Takeout Loans To Extend Low-Income Use.--
       (1) Authority and limitation.--Section 502(c)(4)(B)(iv) of 
     the Housing Act of 1949 (42 U.S.C. 1472(c)(4)(B)(iv)) is 
     amended by inserting before the period at the end the 
     following: ``or under paragraphs (1) and (2) of section 
     514(j), except that an equity loan referred to in this clause 
     may not be made available after the date of the enactment of 
     the Homesteading and Neighborhood Restoration Act of 1995 
     unless the Secretary determines that the other incentives 
     available under this subparagraph are not adequate to provide 
     a fair return on the investment of the borrower, to prevent 
     prepayment of the loan insured under section 514 or 515, or 
     to prevent the displacement of tenants of the housing for 
     which the loan was made''.
       (2) Approval of assistance.--Subparagraph (C) of section 
     502(c)(4) of the Housing 

[[Page H 11394]]
     Act of 1949 is amended by striking the matter preceding clause (i) and 
     inserting the following:
       ``(C) Approval of Assistance.--The Secretary may approve 
     assistance under subparagraph (B) for assisted housing only 
     if the restrictive period has expired for any loan for the 
     housing made or insured under section 514 or 515 pursuant to 
     a contract entered into after December 21, 1979, but before 
     the date of the enactment of the Department of Housing and 
     Urban Development Reform Act of 1989, and the Secretary 
     determines that the combination of assistance provided--''.
       (3) Technical correction.--Section 515(c)(1) of the Housing 
     Act of 1949 (42 U.S.C. 1485(c)(1)) is amended by striking 
     ``December 21, 1979'' and inserting ``December 15, 1989''.

     SEC. 5. LOAN GUARANTEES FOR MULTIFAMILY RENTAL HOUSING IN 
                   RURAL AREAS.

       (a) In General.--Title V of the Housing Act of 1949 (42 
     U.S.C. 1471 et seq.) is amended by inserting after section 
     537 the following new section:

     ``SEC. 538. LOAN GUARANTEES FOR MULTIFAMILY RENTAL HOUSING IN 
                   RURAL AREAS.

       ``(a) Authority.--The Secretary may make commitments to 
     guarantee eligible loans for the development costs of 
     eligible housing and related facilities, and may guarantee 
     such eligible loans, in accordance with this section.
       ``(b) Extent of Guarantee.--A guarantee made under this 
     section shall guarantee repayment of an amount not exceeding 
     the total of the amount of the unpaid principal and interest 
     of the loan for which the guarantee is made. The liability of 
     the United States under any guarantee under this section 
     shall decrease or increase pro rata with any decrease or 
     increase of the amount of the unpaid portion of the 
     obligation.
       ``(c) Eligible Borrowers.--A loan guaranteed under this 
     section may be made to a nonprofit organization, an agency or 
     body of any State government or political subdivision 
     thereof, or a private entity.
       ``(d) Eligible Housing.--A loan may be guaranteed under 
     this section only if the loan is used for the development 
     costs of housing and related facilities (as such terms are 
     defined in section 515(e)) that--
       ``(1) consists of 5 or more adequate dwellings;
       ``(2) is available for occupancy only by low or moderate 
     income families or persons, whose incomes at the time of 
     initial occupancy do not exceed 115 percent of the median 
     income of the area, as determined by the Secretary;
       ``(3) will remain available as provided in paragraph (2), 
     according to such binding commitments as the Secretary may 
     require, for the period of the original term of the loan 
     guaranteed, unless the housing is acquired by foreclosure (or 
     instrument in lieu of foreclosure) or the Secretary waives 
     the applicability of such requirement for the loan only after 
     determining, based on objective information, that--
       ``(A) there is no longer a need for low- and moderate-
     income housing in the market area in which the housing is 
     located;
       ``(B) housing opportunities for low-income households and 
     minorities will not be reduced as a result of the waiver; and
       ``(C) additional Federal assistance will not be necessary 
     as a result of the waiver; and
       ``(4) is located in a rural area.
       ``(e) Eligible Lenders.--
       ``(1) Requirement.--A loan may be guaranteed under this 
     section only if the loan is made by a lender that the 
     Secretary determines--
       ``(A) meets the qualifications, and has been approved by 
     the Secretary of Housing and Urban Development, to make loans 
     for multifamily housing that are to be insured under the 
     National Housing Act;
       ``(B) meets the qualifications, and has been approved by 
     the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation, to make loans for multifamily 
     housing that are to be sold to such corporations; or
       ``(C) meets any qualifications that the Secretary may, by 
     regulation, establish for participation of lenders in the 
     loan guarantee program under this section.
       ``(2) Eligibility list and annual audit.--The Secretary 
     shall establish a list of eligible lenders and shall annually 
     conduct an audit of each lender included in the list for 
     purposes of determining whether such lender continues to be 
     an eligible lender.
       ``(f) Loan Terms.--Each loan guaranteed pursuant to this 
     section shall--
       ``(1) provide for complete amortization by periodic 
     payments to be made for a term not to exceed 40 years;
       ``(2) involve a rate of interest agreed upon by the 
     borrower and the lender that does not exceed the maximum 
     allowable rate established by the Secretary for purposes of 
     this section and is fixed over the term of the loan;
       ``(3) involve a principal obligation (including initial 
     service charges, appraisal, inspection, and other fees as the 
     Secretary may approve) not to exceed--
       ``(A) in the case of a borrower that is a nonprofit 
     organization or an agency or body of any State or local 
     government, 97 percent of the development costs of the 
     housing and related facilities or the value of the housing 
     and facilities, whichever is less;
       ``(B) in the case of a borrower that is a for-profit entity 
     not referred to in subparagraph (A), 90 percent of the 
     development costs of the housing and related facilities or 
     the value of the housing and facilities, whichever is less; 
     and
       ``(C) in the case of any borrower, for such part of the 
     property as may be attributable to dwelling use, the 
     applicable maximum per unit dollar amount limitations under 
     section 207(c) of the National Housing Act;
       ``(4) be secured by a first mortgage on the housing and 
     related facilities for which the loan is made, or otherwise, 
     as the Secretary may determine necessary to ensure repayment 
     of the obligation; and
       ``(5) for at least 20 percent of the loans made under this 
     section, the Secretary shall provide the borrower with 
     assistance in the form of credits pursuant to section 
     521(a)(1)(B) to the extent necessary to reduce the rate of 
     interest under paragraph (2) to the applicable Federal rate, 
     as such term is used in section 42(i)(2)(D) of the Internal 
     Revenue Code of 1986.
       ``(g) Guarantee Fee.--At the time of issuance of a loan 
     guaranteed under this section, the Secretary may collect from 
     the lender a fee equal to not more than 1 percent of the 
     principal obligation of the loan.
       ``(h) Authority for Lenders To Issue Certificates of 
     Guarantee.--The Secretary may authorize certain eligible 
     lenders to determine whether a loan meets the requirements 
     for guarantee under this section and, subject to the 
     availability of authority to enter into guarantees under this 
     section, execute a firm commitment for a guarantee binding 
     upon the Secretary and issue a certificate of guarantee 
     evidencing a guarantee, without review and approval by the 
     Secretary of the specific loan. The Secretary may establish 
     standards for approving eligible lenders for a delegation of 
     authority under this subsection.
       ``(i) Payment Under Guarantee.--
       ``(1) Notice of default.--In the event of default by the 
     borrower on a loan guaranteed under this section, the holder 
     of the guarantee certificate for the loan shall provide 
     written notice of the default to the Secretary.
       ``(2) Foreclosure.--After receiving notice under paragraph 
     (1) and providing written notice of action under this 
     paragraph to the Secretary, the holder of the guarantee 
     certificate for the loan may initiate foreclosure proceedings 
     for the loan in a court of competent jurisdiction, in 
     accordance with regulations issued by the Secretary, to 
     obtain possession of the security property. After the court 
     issues a final order authorizing foreclosure on the property, 
     the holder of the certificate shall be entitled to payment by 
     the Secretary under the guarantee (in the amount provided 
     under subsection (b)) upon (A) conveyance to the Secretary of 
     title to the security property, (B) submission to the 
     Secretary of a claim for payment under the guarantee, and (C) 
     assignment to the Secretary of all the claims of the holder 
     of the guarantee against the borrower or others arising out 
     of the loan transaction or foreclosure proceedings, except 
     claims released with the consent of the Secretary.
       ``(3) Assignment by secretary.--After receiving notice 
     under paragraph (1), the Secretary may accept assignment of 
     the loan if the Secretary determines that the assignment is 
     in the best interests of the United States. Assignment of a 
     loan under this paragraph shall include conveyance to the 
     Secretary of title to the security property, assignment to 
     the Secretary of all rights and interests arising under the 
     loan, and assignment to the Secretary of all claims against 
     the borrower or others arising out of the loan transaction. 
     Upon assignment of a loan under this paragraph, the holder of 
     a guarantee certificate for the loan shall be entitled to 
     payment by the Secretary under the guarantee (in the amount 
     provided under subsection (b)).
       ``(4) Requirements.--Before any payment under a guarantee 
     is made under paragraph (2) or (3), the holder of the 
     guarantee certificate shall exhaust all reasonable 
     possibilities of collection on the loan guaranteed. Upon 
     payment, in whole or in part, to the holder, the note or 
     judgment evidencing the debt shall be assigned to the United 
     States and the holder shall have no further claim against the 
     borrower or the United States. The Secretary shall then take 
     such action to collect as the Secretary determines 
     appropriate.
       ``(j) Violation of Guarantee Requirements by Lenders 
     Issuing Guarantees.--
       ``(1) Indemnification.--If the Secretary determines that a 
     loan guaranteed by an eligible lender pursuant to delegation 
     of authority under subsection (h) was not originated in 
     accordance with the requirements under this section and the 
     Secretary pays a claim under the guarantee for the loan, the 
     Secretary may require the eligible lender authorized under 
     subsection (h) to issue the guarantee certificate for the 
     loan--
       ``(A) to indemnify the Secretary for the loss, if the 
     payment under the guarantee was made within a reasonable 
     period specified by the Secretary; or
       ``(B) to indemnify the Secretary for the loss regardless of 
     when payment under the guarantee was made, if the Secretary 
     determines that fraud or misrepresentation was involved in 
     connection with the origination of the loan.
       ``(2) Termination of authority to issue guarantees.--The 
     Secretary may cancel a delegation of authority under 
     subsection (h) to an eligible lender if the Secretary 
     determines that the lender has violated the requirements and 
     procedures for guaranteed loans under this section or for 
     other good cause. Any such cancellation shall be made by 
     giving notice to the eligible lender and 

[[Page H 11395]]
     shall take effect upon receipt of the notice by the mortgagee or at a 
     later date, as the Secretary may provide. A decision by the 
     Secretary to cancel a delegation shall be final and 
     conclusive and shall not be subject to judicial review.
       ``(k) Refinancing.--Any loan guaranteed under this section 
     may be refinanced and extended in accordance with terms and 
     conditions that the Secretary shall prescribe, but in no 
     event for an additional amount or term that exceeds the 
     limitations under subsection (f).
       ``(l) Nonassumption.--The borrower under a loan that is 
     guaranteed under this section and under which any portion of 
     the principal obligation or interest remains outstanding may 
     not be relieved of liability with respect to the loan, 
     notwithstanding the transfer of property for which the loan 
     was made.
       ``(m) Geographical Targeting.--
       ``(1) Study.--The Secretary shall provide for an 
     independent entity to conduct a study to determine the extent 
     to which borrowers in the United States will utilize loan 
     guarantees under this section, the rural areas in the United 
     States in which borrowers can best utilize and most need 
     loans guaranteed under this section, and the rural areas in 
     the United States in which housing of the type eligible for a 
     loan guarantee under this section is most needed by low- and 
     moderate-income families. The Secretary shall require the 
     independent entity conducting the study to submit a report to 
     the Secretary and to the Congress describing the results of 
     the study not later than the expiration of the 90-day period 
     beginning on the date of the enactment of the Homesteading 
     and Neighborhood Restoration Act of 1995.
       ``(2) Targeting.--In providing loan guarantees under this 
     section, the Secretary shall establish standards to target 
     and give priority to rural areas in which borrowers can best 
     utilize and most need loans guaranteed under this section, as 
     determined by the Secretary based on the results of the study 
     under paragraph (1) and any other information the Secretary 
     considers appropriate.
       ``(n) Inapplicability of Credit-Elsewhere Test.--Section 
     501(c) shall not apply to guarantees, or loans guaranteed, 
     under this section.
       ``(o) Tenant Protections.--The Secretary shall establish 
     standards for the treatment of tenants of housing developed 
     using amounts from a loan guaranteed under this section, 
     which shall incorporate, to the extent applicable, existing 
     standards applicable to tenants of housing developed with 
     loans made under section 515. Such standards shall include 
     standards for fair housing and equal opportunity, lease and 
     grievance procedures, and tenant appeals of adverse actions.
       ``(p) Housing Standards.--The standards established under 
     section 515(m) for housing and related facilities assisted 
     under section 515 shall apply to housing and related 
     facilities the development costs of which are financed in 
     whole or in part with a loan guaranteed under this section.
       ``(q) Limitation on Commitments To Guarantee Loans.--
       ``(1) Requirement of appropriations for cost subsidy.--The 
     authority of the Secretary to enter into commitments to 
     guarantee loans under this section, and to guarantee loans, 
     shall be effective for each fiscal year only to the extent 
     that appropriations of budget authority to cover the costs 
     (as such term is defined in section 502 of the Congressional 
     Budget Act of 1974) of the guarantees are made in advance for 
     such fiscal year.
       ``(2) Annual limitation on amount of loan guarantees.--In 
     fiscal year 1996, the Secretary may enter into commitments to 
     guarantee loans under this section only to the extent that 
     the costs of the guarantees entered into in such fiscal year 
     do not exceed $1,000,000.
       ``(r) Report.--
       ``(1) In general.--The Secretary shall submit a report to 
     the Congress, not later than the expiration of the 2-year 
     period beginning on the date of the enactment of the 
     Homesteading and Neighborhood Restoration Act of 1995, 
     describing the program under this section for guaranteeing 
     loans.
       ``(2) Contents.--The report shall--
       ``(A) describe the types of borrowers providing housing 
     with loans guaranteed under this section, the areas served by 
     the housing provided and the geographical distribution of the 
     housing, the levels of income of the residents of the 
     housing, the number of dwelling units provided, the extent to 
     which borrowers under such loans have obtained other 
     financial assistance for development costs of housing 
     provided with the loans, and the extent to which borrowers 
     under such loans have used low-income housing tax credits 
     provided under section 42 of the Internal Revenue Code of 
     1986 in connection with the housing provided with the loans;
       ``(B) analyze the financial viability of the housing 
     provided with loans guaranteed under this section and the 
     need for project-based rental assistance for such housing;
       ``(C) include any recommendations of the Secretary for 
     expanding or improving the program under this section for 
     guaranteeing loans; and
       ``(D) include any other information regarding the program 
     for guaranteeing loans under this section that the Secretary 
     considers appropriate.
       ``(s) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) The term `development cost' has the meaning given the 
     term in section 515(e).
       ``(2) The term `eligible lender' means a lender determined 
     by the Secretary to meet the requirements of subparagraph 
     (A), (B), (C), or (D) of subsection (e)(1).
       ``(3) The terms `housing' and `related facilities' have the 
     meanings given such terms in section 515(e).
       ``(t) Authorization of Appropriations.--There is authorized 
     to be appropriated for fiscal year 1996 $1,000,000 for costs 
     (as such term is defined in section 502 of the Congressional 
     Budget Act of 1974) of loan guarantees made under this 
     section.
       ``(u) Termination Date.--A loan may not be guaranteed under 
     this section after September 30, 1996.''.
       (b) Effect of Authorizing Legislation.--The enactment of 
     this section shall be considered the enactment of authorizing 
     legislation referred to in the 3d undesignated paragraph 
     under the head ``Rural Housing and Community Development 
     Service--rural housing insurance fund program account'' in 
     title III of the Agriculture, Rural Development, Food and 
     Drug Administration, and Related Agencies Appropriations Act, 
     1996 (Public Law 104-37; 109 Stat. 299 et seq.; approved 
     October 21, 1995).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York [Mr. Lazio] and the gentleman from Texas [Mr. Gonzales] will each 
be recognized for 20 minutes.
  The Chair recognizes the gentleman from New York [Mr. Lazio].
  (Mr. LAZIO of New York asked and was given permission to revise and 
extend his remarks and to include extraneous matter.)
  Mr. LAZIO of New York, Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, these are contentious times on Capitol Hill. The need to 
balance the Federal budget, the need to return accountability to 
Government and the need to provide better services to the American 
taxpayers all weigh very heavily on the minds of Members of this House.
  In the midst of this, however, we have before us today a tremendous 
example of how Government can work well, how Government can provide a 
service without a big bureaucracy or huge Federal subsidies.
  H.R. 1691, the Homesteading and Neighborhood Restoration Act of 1995, 
signals an important change for Government's role in housing.
  Despite the success groups like Habitat for Humanity International 
have had, these initiatives are often hampered by the high costs of 
acquiring land and providing infrastructure.
  H.R. 1691 provides a one-time grant of $50 million for land 
acquisition and infrastructure development so that Habitat and other 
national and regional organizations who performed similar types of 
homeownership programs can be more effective. This funding comes from 
reprogramming unused HUD funds, resulting in no increased cost to the 
Government or the deficit.
  By allocating 50 percent of the funds to Habitat for Humanity, we 
acknowledge the fine work this organization has done by providing 
30,000 homes to low-income people since its founding in 1976.
  Clearly, Government has a role in housing. But ultimately, success 
depends on the involvement of local communities--neighbors helping 
neighbors--to make our efforts in Congress work.
  There is a lot of talk in Washington right now about where we will go 
with housing legislation and what will happen to HUD. Habitat, with 
minimal management overhead and strong partnerships with communities 
nationwide, is providing quality housing and solid homes for tens of 
thousands of people. This is a model of how Government and the private 
sector can work together.
  H.R. 1691 also reauthorizes the Section 515 housing program under the 
Rural Housing and Community Development Service of the Department of 
Agriculture. The legislation addresses some of the concerns we faced 
about the program's operation during the 103d Congress and also heralds 
a change for this program by providing for a loan guarantee 
demonstration program, sponsored by my very distinguished colleague and 
vice chairman of the Housing Subcommittee, Congressman Bereuter. I 
believe this demonstration will show how Federal dollars can be used 
more effectively to leverage private dollars. In essence, getting more 
housing bang for every taxpayer buck.
  H.R. 1691 has very broad bi-partisan support from Speaker Gingrich, 
HUD 

[[Page H 11396]]
Secretary Cisneros--both of whom testified before the Housing 
Subcommittee on May 25, 1995--and former President Jimmy Carter. When 
the subcommittee marked up H.R. 1691 it received strong support from 
both Republicans and Democrats.
  Before I finish, I would like to make a personal statement about 
Habitat for Humanity. Last year I had the opportunity to join my 
neighbors on Long Island to build the first Habitat for Humanity home 
in Babylon, NY. I encourage members of the House to get involved in the 
work of this fine organization, both by passing this bill and by 
working with Habitat in their own districts.
  Mr. Speaker, I include for the Record the following documents 
regarding the Homesteading and neighborhood Restoration Act of 1995:

         Homesteading and Neighborhood Restoration Act of 1995


                      Section-by-Section Analysis

       Section 1. Designates legislation as the ``Homesteading and 
     Neighborhood Restoration Act of 1995.''
       Section 2. Assistance for Habitat for Humanity and Other 
     Self Help housing Providers.
       The Secretary of Housing and Urban Development is 
     authorized to provide $50 million in grants for land 
     acquisition and infrastructure extensions and developments 
     for self help homeownership opportunities. Fifty percent 
     (50%) of funds are allocated to Habitat and the remainder 
     with other national and regional organizations (or consortia) 
     that perform similar type homeownership programs. Besides 
     Habitat, each organization will be required to express their 
     interest, within six months of enactment, to the HUD 
     Secretary and enter into agreements to provide a reasonable 
     amount of new dwellings (at least 30), consistent with the 
     costs and economic conditions of the area. The HUD Secretary 
     is required to ensure geographic diversity and that each 
     organization leverages other funds, including private or 
     public sources.
       Payments to Habitat will be split with 50% up-front, 
     followed by a second 50% payment after Habitat certifies and 
     the HUD Secretary confirms that it has met the terms of the 
     grant agreement. Other organizations that receive in excess 
     of $8 million will be required, similar to Habitat, to 
     certify and confirm that the terms of the grant agreement 
     were met before the remaining funds (50%) are allotted. All 
     other organizations will receive a one-time pay ment.
       The funds will come from unused program amounts from 
     existing HUD accounts and build at least 5,000 new dwellings.
       Section 3. Extension of Multifamily Rural Housing Loan 
     Program.
       The rural multifamily housing loan program, authorized 
     under Sec. 515 of the Housing Act of 1949 is extended through 
     FY 1996. The accompanying non-profit set aside is also 
     extended through FY 1996. Additionally, reforms, originally 
     included in the 103rd House-passed H.R. 3838 as follows: (1) 
     limits ownership transferability of Sec. 515 multifamily 
     developments to circumstances where the transfer is in the 
     best interest of the tenants; (2) prohibits equity loans 
     unless the USDA Secretary determines that other incentives 
     are not adequate to provide a fair return, to prevent 
     payment, or to prevent displacement of tenants; (3) requires 
     location and allocation of Sec. 515 projects with the 
     greatest need in terms of county poverty, substandard housing 
     and lack of affordable housing rates; and, (4) repeals 
     prohibitions related to remote rural areas, areas without 
     essential services, or certain geographic locations.
       Additionally, this section authorizes a rural multifamily 
     loan guarantee program, through FY 1996, where the USDA 
     Secretary guarantees a Sec. 515 loan made by a lender, which 
     would serve families up to 115% of median area income with a 
     loan-to-value ration of 90% (97% for non-profit groups). 
     Eligible lenders are HUD-, Fannie Mae-, Freddi Mac- or USDA-
     approved mortgagees. The loans may be amortized up to 40 
     years; 20% of loans would be provided credits to ``buy down'' 
     the rate of interest to the applicable Federal rate 
     (approximately 7%). Guarantee fees are limited to 1%.
       In the event of loan guarantee defaults, the lender 
     notifies the USDA Secretary and then initiates foreclosure 
     procedures. Payment of a claim is made upon assignment of the 
     program where the lender has made all reasonable efforts of 
     collection. In cases where the lender has originated a Sec. 
     515 loan improperly, the USDA Secretary may require 
     indemnification and/or cancel a lender's authority to issue 
     certificates of guarantee.
                                                                    ____

                                        U.S. Department of Housing


                                        and Urban Development,

                                Washington, DC, February 22, 1995.
     Hon. Rick Lazio,
     Chairman, Subcommittee on Housing and Community Development, 
         Washington, DC.
       Dear Mr. Chairman: This weekend I jointed Millard Fuller, 
     President of Habitat for Humanity International, for the 
     dedication of their new headquarters in Americus, Georgia and 
     the dedication of the 200th home they have built in Sumpter 
     County, part of a plan to eliminate all sub-standard housing 
     in Sumpter County by the year 2000. I have long had great 
     admiration for Habitat's unique work as a builder not only of 
     homes, but of strong, dignified communities and individuals. 
     I am writing to apprise you of their current plans and to 
     request you to consider making available $50 million to 
     assist them.
       Since its founding in 1976 Habitat has used a creative 
     combination of private sector donations, homeowner sweat 
     equity and volunteer service to create over 35,000 homes for 
     low income persons worldwide. The Habitat model of building 
     with, not for, low income homeowners has created 
     homeownership opportunities for thousands of low income 
     families in the United States.
       Through volunteer labor, management expertise, and tax-
     deductible donations of money and materials, Habitat builds 
     and rehabilitates homes with the help of homeowners. Houses 
     are sold at no profit to partner families, and no-interest 
     mortgages are issued over a fixed period. Costs for the homes 
     differ relative to location, land, labor and materials.
       Habitat has never requested government funds for 
     construction of new houses, renovation or repair of existing 
     houses, or the general operating expenses of projects. 
     However, Habitat has identified a need for government 
     assistance with land acquisition and infrastructure 
     development costs because these costs are seldom available on 
     a donated basis. Moreover, acquisition funds would permit the 
     purchase of land where it makes sense, not where it happens 
     to be donated. Provision of acquisition funds would be 
     ``recycled''. Habitat would require homeowners to repay the 
     grants over time and create a fund for additional land 
     acquisition, thereby creating new homeownership opportunities 
     for additional low income families.
       This is a unique opportunity to leverage federal dollars to 
     provide thousands of low income homes nationwide and to build 
     on volunteer efforts. For every $10,000 provided for land 
     acquisition costs, Habitat will obtain donations and 
     volunteer assistance to construct a single-family home. 
     Therefore, this $50 million would lead to the construction of 
     5,000 new affordable homes and homeowners.
       Some may argue that Habitat could use HOME and CDBG funds 
     for land acquisition and infrastructure development. Habitat 
     has tried this, successfully in some cases, however it has 
     been problematic. Habitat is unique in that it has 1,125 
     affiliates that are primarily staffed by volunteers. 
     Therefore, they often do not have the capacity to apply for 
     HOME and CDBG funds. Providing this grant would hold Habitat 
     for Humanity International accountable for equitable 
     distribution nationwide.
       Mr. Chairman, providing federal funds in this way would 
     enable this vital private initiative to proceed at a more 
     rapid pace. We are not asking to be partners in housing 
     construction, but in making land resources available so that 
     this private initiative can function more efficiently.
       I would greatly appreciate your consideration of the 
     appropriate vehicle to provide $50 million to Habitat for 
     land acquisition/infrastructure development.
           Sincerely,
     Henry G. Cisneros.
                                                                    ____

                                                   March 16, 1995.
     Hon. Rick Lazio,
     Chair, Housing and Community Opportunity Subcommittee, 
         Banking, Finance, and Urban Affairs Committee, U.S. House 
         of Representatives, Washington, DC:
       It is not possible for me to testify in the proposed 
     hearing before your committee relative to the proposal for 
     Habitat For Humanity International to receive a grant to 
     establish a revolving loan fund to be used to secure land and 
     infrastructure in all fifty states. However, I wish to 
     express my support for this concept which will allow Habitat 
     to increase greatly our unique service to families who 
     otherwise could not experience the American dream of owning a 
     home. This approach will insure and increase the diversity of 
     partnerships of individuals and groups from the private, the 
     non-profit and the public sectors of our society for support 
     in the now over 1,100 cities and communities in the United 
     States where Habitat is building homes with low income 
     persons.
       I continue my personal commitment to Habitat For Humanity 
     International and its mission to make it possible for all 
     persons to have a simple, decent home. My experiences in 
     Habitat have been very positive and fulfilling. Thousands of 
     Americans who would not otherwise have this experience now 
     own homes, with all the positive benefits, both for 
     themselves and for society as a whole. One major reality is 
     the large number of persons in all parts of our country who 
     qualify for the Habitat program and cannot participate until 
     the Habitat capacity can increase. This proposed grant for 
     land and infrastructure will increase the capacity in ways 
     which are consistent with ``the Habitat Way.''
       Thank you for your leadership role in facilitating the 
     achievement of these goals we hold for our society.
           Sincerely,
     Jimmy Carter.
                                                                    ____



                             National Rural Housing Coalition,

                                 Washington, DC, October 27, 1995.
     Hon. Rick Lazio,
     Chairman, Subcommittee on Housing and Community Opportunity, 
         Committee on Banking and Financial Services, U.S. House 
         of Representatives, Washington, DC.
       Dear Mr. Chairman: I am writing to you to indicate our 
     support for HR 1691, the 

[[Page H 11397]]
     Homesteading and Neighborhood Restoration Act of 1995.
       We support passage of HR 1691 because of the provisions of 
     the bill related to rural rental housing. HR 1691 extends the 
     section 515 rural rental housing program which is the only 
     federal program providing rental housing to rural low income 
     families and the elderly.
       In addition, the legislation contains important provisions 
     which will improve program operations by better targeting 
     funds, preventing abuses, limiting uses of funds for re-
     financing, and clarifying the law regarding equity loans. 
     These provisions will ensure that limited federal funds are 
     used in the best, most appropriate manner to provide 
     assistance to rural households needing decent housing.
       Extension of section 515 authority is particularly 
     important because of a limitation in HR 1976, the Fiscal Year 
     1996 Agriculture Appropriations Act. This legislation bars 
     the use of funds appropriations for section 515 for new 
     construction until enactment of authorization legislation. 
     So, without passage of HR 1691, there will be no new rental 
     housing construction in rural areas through section 515.
       Thank you for your leadership on this important issue.
       Sincerely yours,
     Robert A. Rapoza.
                                                                    ____

                                           National Association of


                                                Home Builders,

                                 Washington, DC, October 27, 1995.
     Hon. Rick Lazio,
     Subcommittee on Housing and Community Opportunity, Committee 
         on Banking and Financial Services, Washington, DC.
       Dear Chairman Lazio: On behalf of the 185,000 member firms 
     of the National Association of Home Builders, as you recall, 
     we supported the Homesteading and Neighborhood Restoration 
     Act, HR 1691, in your Subcommittee. We are pleased to support 
     passage of this bill on Monday, October 30, under suspension 
     of the rules.
       The rural multifamily housing loan program authorization, 
     Section 515, expired at the end of fiscal year 1994, and this 
     bill would extend the program authority through the end of 
     fiscal year 1996. Funds for this program were appropriated 
     last year and currently are being expended by the Department 
     of Agriculture.
       Additionally, the legislation authorizes the Secretary of 
     HUD to provide $50 million to expand self-help homeownership 
     opportunities. NAHB supports this as one of many approaches 
     available to increase homeownership.
           Best regards,
                                                  James R. Irvine.

  Mr. LAZIO of New York. Mr. Speaker, I yield 2 minutes to my 
distinguished colleague, the gentleman from Nebraska [Mr. Bereuter].
  (Mr. BEREUTER asked and was given permission to revise and extend his 
remarks.)
  Mr. BEREUTER. Mr. Speaker, this Member is pleased to rise in support 
of H.R. 1691, the Homesteading and Neighborhood Restoration Act. This 
Member would like to thank the distinguished gentleman from Iowa [Mr. 
Leach], the chairman of the House Banking Committee, and the 
distinguished gentleman from Texas [Mr. Gonzalez], the ranking member 
of the House Banking Committee, for bringing this measure to the House 
floor. This Member also extends his special appreciation to the 
gentleman from New York [Mr. Lazio], the chairman of the Banking 
Subcommittee on Housing, and the gentleman from Massachusetts [Mr. 
Kennedy], for their support for this legislation.
  This Member is pleased to be here today supporting legislation which 
contains the authorization of a program this Member has proposed to 
provide multifamily housing loan guarantees in rural areas.
  On Tuesday, January 4, 1995, this Member reintroduced legislation to 
authorize a demonstration program for a new Federal loan guarantee 
program for the construction of multi-family rental housing units in 
small cities, towns, and rural areas. The text of that legislation 
(H.R. 66) has been incorporated into the Homesteading and Neighborhood 
Restoration Act of 1995.
  The language in this measure is in effect identical to this Member's 
legislation which was passed by the House in the 103d Congress as part 
of H.R. 3838, the Housing and Community Development Act of 1994--passed 
July 22, 1994. This legislation would have created a demonstration 
program for a new Federal loan guarantee program for the construction 
of multifamily rental housing units. Because H.R. 3838 died when the 
Senate failed to act on it in the last hours of the 103d Congress, this 
Member reintroduced legislation to authorize the loan guarantee program 
in the 104th Congress.
  Currently, the only Federal program allowing development of this type 
of housing is the Rural Housing and Community Development Service's--
formerly the Farmers Home Administration--Section 515 program, a direct 
loan program which has, unfortunately, been plagued with problems. 
Because Federal funds become more scarce every year, the direct loan 
program is almost certain to shrink. Therefore, this Member saw the 
need for a new approach that would cost taxpayers less but still 
provide equal or greater housing opportunity in rural areas. The new 
program will be known as the Section 515 Loan Guarantee Program.
  Mr. Speaker, this bill has two or three major parts to it.
  The one I am most interested in speaking about today has been made 
reference to by the gentleman from New York [Mr. Lazio], and it is the 
loan guaranty program called the 515 Loan Guarantee Program. It has 
been a part of the Farmers Home Administration, now renamed a component 
of the United States Department of Agriculture.
  We have had a direct loan program, the 515 Program, for multifamily 
rental housing. This legislation will make some reforms in that 
program, and we intend, I am sure, to try to do further work in the 515 
direct loan program next year.
  However, Mr. Speaker, the initiative on which I am pleased to have 
the support of my colleagues is an effort to establish a 2-year 
demonstration 515 Loan Guarantee Program, for 25 projects per year.
  At this point this Member is not advocating that this demonstration 
program replace the existing program, but only augment it, at a lower 
cost, in order to provide adequate rental housing opportunities for a 
segment of America's population living in smaller communities. The 
demonstration program will provide a Federal guarantee on loans made to 
eligible persons by private lenders. In fiscal year 1996 25 new 
developments will be guaranteed by the Rural Housing and Community 
Development Service. Developers will bring 10 percent of the cost of 
the project to the table, and private lenders will make loans for the 
balance. The lenders will be given a 100 percent Federal guarantee on 
the loans they make. Unlike the current 515 program, where the full 
costs are borne by the Federal Government, the only costs to the 
Federal Government under the 515 Loan Guarantee Program will be for 
administrative costs and potential defaults. It should be noted that 
this program is based on the recent experience with the very successful 
FmHA 502 Middle Income Loan Guarantee Program for home ownership. That 
program, which this Member first proposed, has a default rate of only 
2.33 percent with over 41,000 units financed since 1991.
  Also, this Member ask you to note that, with bipartisan support on 
the Appropriations Committee, H.R. 1976, the fiscal year 1996 
Agriculture Appropriations bill, which was signed by the President on 
October 21, 1995, appropriates $1 million in credit subsidy for the 
Section 515 loan guarantee demonstration program. Therefore, the 
program can move forward as soon as it is authorized, but the 
appropriation will be recaptured if the demonstration is not authorized 
in fiscal 1995.
  This Member is convinced by experience that loan guarantee programs 
for housing are typically a much more effective use of scare Federal 
dollars than existing programs. As budgets are slashed, this type of 
program promises to continue to make Federal assistance available for 
housing development in America's non-metropolitan cities.
  Again, Mr. Speaker, this Member supports H.R. 2491 and asks that his 
colleagues also vote in support of this legislation.

                              {time}  1645

  Mr. GONZALEZ. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, first and above all, I want to thank my distinguished 
colleague, the gentleman from Nebraska [Mr. Bereuter] for his kind 
words and his very, very tremendous contribution in this respect, in 
housing, and on the committee.
  Mr. Speaker, the bill before us is simple enough: it provides $25 
million to the Habitat for Humanity organization and sets aside another 
$25 million that similar self-help housing groups can compete for. In 
addition, the bill reauthorizes certain rural rental housing programs, 
as was provided for in H.R. 3838, the housing bill that the House 
passed overwhelmingly last year, but which was stopped by the failure 
of the other body to act.
  The idea of self-help housing is not new; community roof raising and 
barn-raising is as old as this country. What is new is the adaptation 
of these old community building ideas for our time--which is what 
Habitat for Humanity and other organizations do. And they are 
successful, not only in building new houses for an affordable 

[[Page H 11398]]
price, but in rehabilitating old houses and making them available for 
an affordable price. The secret is very simple: donated materials and 
volunteer labor. In my own community of San Antonio, Habitat has built 
81 new homes in the space of 16 years--one about every two months. This 
is an important contribution, and a significant effort toward meeting 
one of our greatest needs, which is affordable housing. This bill would 
enhance the much-needed efforts of community building groups like 
Habitat.
  But there is considerable irony here.
  In the past decade or so, the country has lost about 1 million 
affordable housing units. And, the same Republicans who a few weeks ago 
voted to save $30 million or so by killing the Resolution Trust 
Corporation's very successful affordable housing program 3 months 
earlier than it would have died anyway, are in this bill claiming a 
commitment to affordable housing.
  And there is further irony: Republicans have bitterly complained over 
the proliferation of small programs, and so they have insisted on 
creating vast block grants. In fact one of the earliest block grants 
was in the area of urban renewal, which was a Nixon-era innovation. But 
here we are, with a bill that creates a brand-new small program. 
Certainly it is worthy, but the irony of the block grant party's 
support for this tiny program is rich indeed.
  Of course if we were to talk about housing funding in general, the 
fact is that this bill would authorize a program that provides about 
$1,000 for every $1 million that the Republicans are cutting from the 
Nation's housing programs. It is a pitifully small gesture. Yes, it's 
worthy, and yes, I support this bill because it is at least a 
recognition that this country's housing needs cannot be met even by the 
best of completely unaided volunteer efforts. But, I submit that if you 
subtract $1 million from housing, and then put in $1,000 to replace it, 
no one can believe that we will end up with more housing at the end of 
the day.
  And, if you consider all the cuts in medical care, the cuts in 
education, the cuts in all kinds of programs that help the poor, the 
irony is complete: a possible $1 million per State, to address the 
problems that will be created by the cuts in the thousands of millions.
  But, I am happy to see this small gesture toward decency and 
community responsibility. I am happy to see this encouragement of those 
who want to help, and who are doing their best to provide that help. I 
am glad to see this effort to expand the efforts of the volunteers who 
help people build their own housing, efforts that are clearly in 
keeping with the quintessential American spirit of community. This 
legislation will make a difference in a much needed direction; it is a 
good thing to do, and it deserves our support.
  I reserve the balance of my time.
  Mr. LAZIO of New York. Mr. Speaker, I yield myself 30 seconds.
  Mr. Speaker, this is truly a historic vote in the true sense of the 
word. This is the first time Habitat for Humanity will receive approval 
for Federal funding, and again it is for infrastructure; it is for the 
most difficult type of funding, frankly, for Habitat for Humanity to be 
able to get in terms of contributions and charitable donations. This is 
everything that we talk about. It is leveraging, it is private/public 
partnerships, it is people working with people, it is getting self-help 
housing off the ground, and it is true value for the American 
taxpayers.
  We are going to be in a position where we can provide not just a 
rental apartment, but a house per family for as little as $6,000, and 
this will be replicated throughout America with geographic diversity.
  I thank the distinguished gentleman from Texas [Mr. Gonzalez] for 
working with me and rounding off the edges of this bill; it has gone so 
smoothly, and again, I would like to express my appreciation for my 
distinguished colleague from Nebraska [Mr. Bereuter] for all of his 
hard work on the 515 program.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York [Mr. Lazio] that the House suspend the rules 
and pass the bill, H.R. 1691, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________