[House Report 114-397]
[From the U.S. Government Publishing Office]


114th Congress    }                                       {     Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                       {    114-397

======================================================================



 
         HOUSING OPPORTUNITY THROUGH MODERNIZATION ACT OF 2015

                                _______
                                

January 28, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3700]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3700) to provide housing opportunities in the 
United States through modernization of various housing 
programs, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Housing Opportunity 
Through Modernization Act of 2015''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.

        TITLE I--SECTION 8 RENTAL ASSISTANCE AND PUBLIC HOUSING

Sec. 101. Inspection of dwelling units.
Sec. 102. Income reviews.
Sec. 103. Limitation on public housing tenancy for over-income 
families.
Sec. 104. Limitation on eligibility for assistance based on assets.
Sec. 105. Units owned by public housing agencies.
Sec. 106. PHA project-based assistance.
Sec. 107. Establishment of fair market rent.
Sec. 108. Collection of utility data.
Sec. 109. Public housing Capital and Operating Funds.
Sec. 110. Family unification program for children aging out of foster 
care.

                        TITLE II--RURAL HOUSING

Sec. 201. Delegation of guaranteed rural housing loan approval.

           TITLE III--FHA MORTGAGE INSURANCE FOR CONDOMINIUMS

Sec. 301. Modification of FHA requirements for mortgage insurance for 
condominiums.

      TITLE IV--HOUSING REFORMS FOR THE HOMELESS AND FOR VETERANS

Sec. 401. Definition of geographic area for Continuum of Care Program.
Sec. 402. Inclusion of public housing agencies and local redevelopment 
authorities in emergency solutions grants.
Sec. 403. Special assistant for Veterans Affairs in the Department of 
Housing and Urban Development.
Sec. 404. Annual supplemental report on veterans homelessness.

                         TITLE V--MISCELLANEOUS

Sec. 501. Inclusion of Disaster Housing Assistance Program in certain 
fraud and abuse prevention measures.
Sec. 502. Energy efficiency requirements under Self-Help Homeownership 
Opportunity program.
Sec. 503. Data exchange standardization for improved interoperability.

        TITLE I--SECTION 8 RENTAL ASSISTANCE AND PUBLIC HOUSING

SEC. 101. INSPECTION OF DWELLING UNITS.

  (a) In General.--Section 8(o)(8) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(o)(8)) is amended--
          (1) by striking subparagraph (A) and inserting the following 
        new subparagraph:
                  ``(A) Initial inspection.--
                          ``(i) In general.--For each dwelling unit for 
                        which a housing assistance payment contract is 
                        established under this subsection, the public 
                        housing agency (or other entity pursuant to 
                        paragraph (11)) shall inspect the unit before 
                        any assistance payment is made to determine 
                        whether the dwelling unit meets the housing 
                        quality standards under subparagraph (B), 
                        except as provided in clause (ii) or (iii) of 
                        this subparagraph.
                          ``(ii) Correction of non-life-threatening 
                        conditions.--In the case of any dwelling unit 
                        that is determined, pursuant to an inspection 
                        under clause (i), not to meet the housing 
                        quality standards under subparagraph (B), 
                        assistance payments may be made for the unit 
                        notwithstanding subparagraph (C) if failure to 
                        meet such standards is a result only of non-
                        life-threatening conditions, as such conditions 
                        are established by the Secretary. A public 
                        housing agency making assistance payments 
                        pursuant to this clause for a dwelling unit 
                        shall, 30 days after the beginning of the 
                        period for which such payments are made, 
                        withhold any assistance payments for the unit 
                        if any deficiency resulting in noncompliance 
                        with the housing quality standards has not been 
                        corrected by such time. The public housing 
                        agency shall recommence assistance payments 
                        when such deficiency has been corrected, and 
                        may use any payments withheld to make 
                        assistance payments relating to the period 
                        during which payments were withheld.
                          ``(iii) Use of alternative inspection method 
                        for interim period.--In the case of any 
                        property that within the previous 24 months has 
                        met the requirements of an inspection that 
                        qualifies as an alternative inspection method 
                        pursuant to subparagraph (E), a public housing 
                        agency may authorize occupancy before the 
                        inspection under clause (i) has been completed, 
                        and may make assistance payments retroactive to 
                        the beginning of the lease term after the unit 
                        has been determined pursuant to an inspection 
                        under clause (i) to meet the housing quality 
                        standards under subparagraph (B). This clause 
                        may not be construed to exempt any dwelling 
                        unit from compliance with the requirements of 
                        subparagraph (D).'';
          (2) by redesignating subparagraph (G) as subparagraph (H); 
        and
          (3) by inserting after subparagraph (F) the following new 
        subparagraph:
                  ``(G) Enforcement of housing quality standards.--
                          ``(i) Determination of noncompliance.--A 
                        dwelling unit that is covered by a housing 
                        assistance payments contract under this 
                        subsection shall be considered, for purposes of 
                        subparagraphs (D) and (F), to be in 
                        noncompliance with the housing quality 
                        standards under subparagraph (B) if--
                                  ``(I) the public housing agency or an 
                                inspector authorized by the State or 
                                unit of local government determines 
                                upon inspection of the unit that the 
                                unit fails to comply with such 
                                standards;
                                  ``(II) the agency or inspector 
                                notifies the owner of the unit in 
                                writing of such failure to comply; and
                                  ``(III) the failure to comply is not 
                                corrected--
                                          ``(aa) in the case of any 
                                        such failure that is a result 
                                        of life-threatening conditions, 
                                        within 24 hours after such 
                                        notice has been provided; and
                                          ``(bb) in the case of any 
                                        such failure that is a result 
                                        of non-life-threatening 
                                        conditions, within 30 days 
                                        after such notice has been 
                                        provided or such other 
                                        reasonable longer period as the 
                                        public housing agency may 
                                        establish.
                          ``(ii) Withholding of assistance amounts 
                        during correction.--The public housing agency 
                        may withhold assistance amounts under this 
                        subsection with respect to a dwelling unit for 
                        which a notice pursuant to clause (i)(II), of 
                        failure to comply with housing quality 
                        standards under subparagraph (B) as determined 
                        pursuant to an inspection conducted under 
                        subparagraph (D) or (F), has been provided. If 
                        the unit is brought into compliance with such 
                        housing quality standards during the periods 
                        referred to in clause (i)(III), the public 
                        housing agency shall recommence assistance 
                        payments and may use any amounts withheld 
                        during the correction period to make assistance 
                        payments relating to the period during which 
                        payments were withheld.
                          ``(iii) Abatement of assistance amounts.--The 
                        public housing agency shall abate all of the 
                        assistance amounts under this subsection with 
                        respect to a dwelling unit that is determined, 
                        pursuant to clause (i) of this subparagraph, to 
                        be in noncompliance with housing quality 
                        standards under subparagraph (B). Upon 
                        completion of repairs by the public housing 
                        agency or the owner sufficient so that the 
                        dwelling unit complies with such housing 
                        quality standards, the agency shall recommence 
                        payments under the housing assistance payments 
                        contract to the owner of the dwelling unit.
                          ``(iv) Notification.--If a public housing 
                        agency providing assistance under this 
                        subsection abates rental assistance payments 
                        pursuant to clause (iii) with respect to a 
                        dwelling unit, the agency shall, upon 
                        commencement of such abatement--
                                  ``(I) notify the tenant and the owner 
                                of the dwelling unit that--
                                          ``(aa) such abatement has 
                                        commenced; and
                                          ``(bb) if the dwelling unit 
                                        is not brought into compliance 
                                        with housing quality standards 
                                        within 60 days after the 
                                        effective date of the 
                                        determination of noncompliance 
                                        under clause (i) or such 
                                        reasonable longer period as the 
                                        agency may establish, the 
                                        tenant will have to move; and
                                  ``(II) issue the tenant the necessary 
                                forms to allow the tenant to move to 
                                another dwelling unit and transfer the 
                                rental assistance to that unit.
                          ``(v) Protection of tenants.--An owner of a 
                        dwelling unit may not terminate the tenancy of 
                        any tenant because of the withholding or 
                        abatement of assistance pursuant to this 
                        subparagraph. During the period that assistance 
                        is abated pursuant to this subparagraph, the 
                        tenant may terminate the tenancy by notifying 
                        the owner.
                          ``(vi) Termination of lease or assistance 
                        payments contract.--If assistance amounts under 
                        this section for a dwelling unit are abated 
                        pursuant to clause (iii) and the owner does not 
                        correct the noncompliance within 60 days after 
                        the effective date of the determination of 
                        noncompliance under clause (i), or such other 
                        reasonable longer period as the public housing 
                        agency may establish, the agency shall 
                        terminate the housing assistance payments 
                        contract for the dwelling unit.
                          ``(vii) Relocation.--
                                  ``(I) Lease of new unit.--The agency 
                                shall provide the family residing in 
                                such a dwelling unit a period of 90 
                                days or such longer period as the 
                                public housing agency determines is 
                                reasonably necessary to lease a new 
                                unit, beginning upon termination of the 
                                contract, to lease a new residence with 
                                tenant-based rental assistance under 
                                this section.
                                  ``(II) Availability of public housing 
                                units.--If the family is unable to 
                                lease such a new residence during such 
                                period, the public housing agency 
                                shall, at the option of the family, 
                                provide such family a preference for 
                                occupancy in a dwelling unit of public 
                                housing that is owned or operated by 
                                the agency that first becomes available 
                                for occupancy after the expiration of 
                                such period.
                                  ``(III) Assistance in finding unit.--
                                The public housing agency may provide 
                                assistance to the family in finding a 
                                new residence, including use of up to 
                                two months of any assistance amounts 
                                withheld or abated pursuant to clause 
                                (ii) or (iii), respectively, for costs 
                                directly associated with relocation of 
                                the family to a new residence, which 
                                shall include security deposits as 
                                necessary and may include 
                                reimbursements for reasonable moving 
                                expenses incurred by the household, as 
                                established by the Secretary. The 
                                agency may require that a family 
                                receiving assistance for a security 
                                deposit shall remit, to the extent of 
                                such assistance, the amount of any 
                                security deposit refunds made by the 
                                owner of the dwelling unit for which 
                                the lease was terminated.
                          ``(viii) Tenant-caused damages.--If a public 
                        housing agency determines that any damage to a 
                        dwelling unit that results in a failure of the 
                        dwelling unit to comply with housing quality 
                        standards under subparagraph (B), other than 
                        any damage resulting from ordinary use, was 
                        caused by the tenant, any member of the 
                        tenant's household, or any guest or other 
                        person under the tenant's control, the agency 
                        may waive the applicability of this 
                        subparagraph, except that this clause shall not 
                        exonerate a tenant from any liability otherwise 
                        existing under applicable law for damages to 
                        the premises caused by such tenant.
                          ``(ix) Applicability.--This subparagraph 
                        shall apply to any dwelling unit for which a 
                        housing assistance payments contract is entered 
                        into or renewed after the date of the 
                        effectiveness of the regulations implementing 
                        this subparagraph.''.
  (b) Effective Date.--The Secretary of Housing and Urban Development 
shall issue notice or regulations to implement subsection (a) of this 
section and such subsection shall take effect upon such issuance.

SEC. 102. INCOME REVIEWS.

  (a) Income Reviews for Public Housing and Section 8 Programs.--
Section 3 of the United States Housing Act of 1937 (42 U.S.C. 1437a) is 
amended--
          (1) in subsection (a)--
                  (A) in the second sentence of paragraph (1), by 
                striking ``at least annually'' and inserting ``pursuant 
                to paragraph (6)''; and
                  (B) by adding at the end the following new 
                paragraphs:
          ``(6) Reviews of family income.--
                  ``(A) Frequency.--Reviews of family income for 
                purposes of this section shall be made--
                          ``(i) in the case of all families, upon the 
                        initial provision of housing assistance for the 
                        family;
                          ``(ii) annually thereafter, except as 
                        provided in paragraph (1) with respect to 
                        fixed-income families;
                          ``(iii) upon the request of the family, at 
                        any time the income or deductions (under 
                        subsection (b)(5)) of the family change by an 
                        amount that is estimated to result in a 
                        decrease of 10 percent (or such lower amount as 
                        the Secretary may, by notice, establish, or 
                        permit the public housing agency or owner to 
                        establish) or more in annual adjusted income; 
                        and
                          ``(iv) at any time the income or deductions 
                        (under subsection (b)(5)) of the family change 
                        by an amount that is estimated to result in an 
                        increase of 10 percent or more in annual 
                        adjusted income, or such other amount as the 
                        Secretary may by notice establish, except that 
                        any increase in the earned income of a family 
                        shall not be considered for purposes of this 
                        clause (except that earned income may be 
                        considered if the increase corresponds to 
                        previous decreases under clause (iii)), except 
                        that a public housing agency or owner may elect 
                        not to conduct such review in the last three 
                        months of a certification period.
                  ``(B) In general.--Reviews of family income for 
                purposes of this section shall be subject to the 
                provisions of section 904 of the Stewart B. McKinney 
                Homeless Assistance Amendments Act of 1988 (42 U.S.C. 
                3544).
          ``(7) Calculation of income.--
                  ``(A) Use of current year income.--In determining 
                family income for initial occupancy or provision of 
                housing assistance pursuant to clause (i) of paragraph 
                (6)(A) or pursuant to reviews pursuant to clause (iii) 
                or (iv) of such paragraph, a public housing agency or 
                owner shall use the income of the family as estimated 
                by the agency or owner for the upcoming year.
                  ``(B) Use of prior year income.--In determining 
                family income for annual reviews pursuant to paragraph 
                (6)(A)(ii), a public housing agency or owner shall, 
                except as otherwise provided in this paragraph and 
                paragraph (1), use the income of the family as 
                determined by the agency or owner for the preceding 
                year, taking into consideration any redetermination of 
                income during such prior year pursuant to clause (iii) 
                or (iv) of paragraph (6)(A).
                  ``(C) Other income.--In determining the income for 
                any family based on the prior year's income, with 
                respect to prior year calculations of income not 
                subject to subparagraph (B), a public housing agency or 
                owner may make other adjustments as it considers 
                appropriate to reflect current income.
                  ``(D) Safe harbor.--A public housing agency or owner 
                may, to the extent such information is available to the 
                public housing agency or owner, determine the family's 
                income prior to the application of any deductions based 
                on timely income determinations made for purposes of 
                other means-tested Federal public assistance programs 
                (including the program for block grants to States for 
                temporary assistance for needy families under part A of 
                title IV of the Social Security Act, a program for 
                Medicaid assistance under a State plan approved under 
                title XIX of the Social Security Act, and the 
                supplemental nutrition assistance program (as such term 
                is defined in section 3 of the Food and Nutrition Act 
                of 2008 (7 U.S.C. 2012))). The Secretary shall, in 
                consultation with other appropriate Federal agencies, 
                develop procedures to enable public housing agencies 
                and owners to have access to such income determinations 
                made by other means-tested Federal programs that the 
                Secretary determines to have comparable reliability. 
                Exchanges of such information shall be subject to the 
                same limitations and tenant protections provided under 
                section 904 of the Stewart B. McKinney Homeless 
                Assistance Act Amendments of 1988 (42 U.S.C. 3544) with 
                respect to information obtained under the requirements 
                of section 303(i) of the Social Security Act (42 U.S.C. 
                503(i)).
                  ``(E) PHA and owner compliance.--A public housing 
                agency or owner may not be considered to fail to comply 
                with this paragraph or paragraph (6) due solely to any 
                de minimis errors made by the agency or owner in 
                calculating family incomes.'';
          (2) by striking subsections (d) and (e); and
          (3) by redesignating subsection (f) as subsection (d).
  (b) Certification Regarding Hardship Exception to Minimum Monthly 
Rent.--Not later than the expiration of the 6-month period beginning on 
the date of the enactment of this Act, the Secretary of Housing and 
Urban Development shall submit to the Congress a certification that the 
hardship and tenant protection provisions in clause (i) of section 
3(a)(3)(B) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(a)(3)(B)(i)) are being enforced at such time and that the 
Secretary will continue to provide due consideration to the hardship 
circumstances of persons assisted under relevant programs of this Act.
  (c) Income; Adjusted Income.--Section 3(b) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b)) is amended by striking 
paragraphs (4) and (5) and inserting the following new paragraphs:
          ``(4) Income.--The term `income' means, with respect to a 
        family, income received from all sources by each member of the 
        household who is 18 years of age or older or is the head of 
        household or spouse of the head of the household, plus unearned 
        income by or on behalf of each dependent who is less than 18 
        years of age, as determined in accordance with criteria 
        prescribed by the Secretary, in consultation with the Secretary 
        of Agriculture, subject to the following requirements:
                  ``(A) Included amounts.--Such term includes recurring 
                gifts and receipts, actual income from assets, and 
                profit or loss from a business.
                  ``(B) Excluded amounts.--Such term does not include--
                          ``(i) any imputed return on assets, except to 
                        the extent that net family assets exceed 
                        $50,000, except that such amount (as it may 
                        have been previously adjusted) shall be 
                        adjusted for inflation annually by the 
                        Secretary in accordance with an inflationary 
                        index selected by the Secretary;
                          ``(ii) any amounts that would be eligible for 
                        exclusion under section 1613(a)(7) of the 
                        Social Security Act (42 U.S.C. 1382b(a)(7));
                          ``(iii) deferred disability benefits from the 
                        Department of Veterans Affairs that are 
                        received in a lump sum amount or in prospective 
                        monthly amounts;
                          ``(iv) any expenses related to aid and 
                        attendance under section 1521 of title 38, 
                        United States Code, to veterans who are in need 
                        of regular aid and attendance; and
                          ``(v) exclusions from income as established 
                        by the Secretary by regulation or notice, or 
                        any amount required by Federal law to be 
                        excluded from consideration as income.
                  ``(C) Earned income of students.--Such term does not 
                include--
                          ``(i) earned income, up to an amount as the 
                        Secretary may by regulation establish, of any 
                        dependent earned during any period that such 
                        dependent is attending school or vocational 
                        training on a full-time basis; or
                          ``(ii) any grant-in-aid or scholarship 
                        amounts related to such attendance used--
                                  ``(I) for the cost of tuition or 
                                books; or
                                  ``(II) in such amounts as the 
                                Secretary may allow, for the cost of 
                                room and board.
                  ``(D) Educational savings accounts.--Income shall be 
                determined without regard to any amounts in or from, or 
                any benefits from, any Coverdell education savings 
                account under section 530 of the Internal Revenue Code 
                of 1986 or any qualified tuition program under section 
                529 of such Code.
                  ``(E) Recordkeeping.--The Secretary may not require a 
                public housing agency or owner to maintain records of 
                any amounts excluded from income pursuant to this 
                subparagraph.
          ``(5) Adjusted income.--The term `adjusted income' means, 
        with respect to a family, the amount (as determined by the 
        public housing agency or owner) of the income of the members of 
        the family residing in a dwelling unit or the persons on a 
        lease, after any deductions from income as follows:
                  ``(A) Elderly and disabled families.--$525 in the 
                case of any family that is an elderly family or a 
                disabled family.
                  ``(B) Dependents.--In the case of any family, $525 
                for each member who--
                          ``(i) is less than 18 years of age or 
                        attending school or vocational training on a 
                        full-time basis; or
                          ``(ii) is a person who is 18 years of age or 
                        older, resides in the household, and is 
                        certified as disabled and unable to work by the 
                        public housing agency of jurisdiction.
                  ``(C) Child care.--The amount, if any, that exceeds 5 
                percent of annual family income that is used to pay for 
                unreimbursed child care expenses, which shall include 
                child care for preschool-age children, for before- and 
                after-care for children in school, and for other child 
                care necessary to enable a member of the family to be 
                employed or further his or her education.
                  ``(D) Health and medical expenses.--The amount, if 
                any, by which 10 percent of annual family income is 
                exceeded by the sum of--
                          ``(i) in the case of any elderly or disabled 
                        family, any unreimbursed health and medical 
                        care expenses; and
                          ``(ii) any unreimbursed reasonable attendant 
                        care and auxiliary apparatus expenses for each 
                        handicapped member of the family, if determined 
                        necessary by the public housing agency or owner 
                        to enable any member of such family to be 
                        employed.
                 The Secretary shall, by regulation, provide hardship 
                exemptions to the requirements of this subparagraph and 
                subparagraph (C) for impacted families who demonstrate 
                an inability to pay calculated rents because of 
                financial hardship. Such regulations shall include a 
                requirement to notify tenants regarding any changes to 
                the determination of adjusted income pursuant to such 
                subparagraphs based on the determination of the 
                family's claim of financial hardship exemptions 
                required by the preceding sentence. Such regulations 
                shall be promulgated in consultation with tenant 
                organizations, industry participants, and the Secretary 
                of Health and Human Services, with an adequate comment 
                period provided for interested parties.
                  ``(E) Permissive deductions.--Such additional 
                deductions as a public housing agency may, at its 
                discretion, establish, except that the Secretary shall 
                establish procedures to ensure that such deductions do 
                not materially increase Federal expenditures.
        The Secretary shall annually calculate the amounts of the 
        deductions under subparagraphs (A) and (B), as such amounts may 
        have been previously calculated, by applying an inflationary 
        factor as the Secretary shall, by regulation, establish, except 
        that the actual deduction determined for each year shall be 
        established by rounding such amount to the next lowest multiple 
        of $25.''.
  (d) Housing Choice Voucher Program.--Section 8(o) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(o)) is amended--
          (1) in paragraph (1)(D), by inserting before the period at 
        the end the following: ``, except that a public housing agency 
        may establish a payment standard of not more than 120 percent 
        of the fair market rent where necessary as a reasonable 
        accommodation for a person with a disability, without approval 
        of the Secretary. A public housing agency may use a payment 
        standard that is greater than 120 percent of the fair market 
        rent as a reasonable accommodation for a person with a 
        disability, but only with the approval of the Secretary. In 
        connection with the use of any increased payment standard 
        established or approved pursuant to either of the preceding two 
        sentences as a reasonable accommodation for a person with a 
        disability, the Secretary may not establish additional 
        requirements regarding the amount of adjusted income paid by 
        such person for rent''; and
          (2) in paragraph (5)--
                  (A) in the paragraph heading, by striking ``Annual 
                review'' and inserting ``Reviews'';
                  (B) in subparagraph (A)--
                          (i) by striking ``the provisions of'' and 
                        inserting ``paragraphs (1), (6), and (7) of 
                        section 3(a) and to''; and
                          (ii) by striking ``and shall be conducted'' 
                        and all that follows through the end of the 
                        subparagraph and inserting a period; and
                  (C) in subparagraph (B), by striking the second 
                sentence.
  (e) Enhanced Voucher Program.--Section 8(t)(1)(D) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(t)(1)(D)) is amended by 
striking ``income'' each place such term appears and inserting ``annual 
adjusted income''.
  (f) Project-Based Housing.--Paragraph (3) of section 8(c) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(c)(3)) is amended by 
striking the last sentence.
  (g) Impact on Public Housing Revenues.--
          (1) Adjustments to operating formula.--If the Secretary of 
        Housing and Urban Development determines that the application 
        of subsections (a) through (e) of this section results in a 
        material and disproportionate reduction in the rental income of 
        certain public housing agencies during the first year in which 
        such subsections are implemented, the Secretary may make 
        appropriate adjustments in the formula income for such year of 
        those agencies experiencing such a reduction.
          (2) HUD reports on revenue and cost impact.--In each of the 
        first two years after the first year in which subsections (a) 
        through (e) are implemented, the Secretary of Housing and Urban 
        Development shall submit a report to Congress identifying and 
        calculating the impact of changes made by such subsections and 
        section 104 of this Act on the revenues and costs of operating 
        public housing units, the voucher program for rental assistance 
        under section 8 of the United States Housing Act of 1937, and 
        the program under such section 8 for project-based rental 
        assistance. If such report identifies a material reduction in 
        the net income of public housing agencies nationwide or a 
        material increase in the costs of funding the voucher program 
        or the project-based assistance program, the Secretary shall 
        include in such report recommendations for legislative changes 
        to reduce or eliminate such a reduction.
  (h) Effective Date.--The Secretary of Housing and Urban Development 
shall issue notice or regulations to implement this section and this 
section shall take effect after such issuance, except that this section 
may only take effect upon the commencement of a calendar year.

SEC. 103. LIMITATION ON PUBLIC HOUSING TENANCY FOR OVER-INCOME 
                    FAMILIES.

  Subsection (a) of section 16 of the United States Housing Act of 1937 
(42 U.S.C. 1437n(a)) is amended by adding at the end the following new 
paragraph:
          ``(5) Limitations on tenancy for over-income families.--
                  ``(A) Limitations.--Except as provided in 
                subparagraph (D), in the case of any family residing in 
                a dwelling unit of public housing whose income for the 
                most recent two consecutive years, as determined 
                pursuant to income reviews conducted pursuant to 
                section 3(a)(6), has exceeded the applicable income 
                limitation under subparagraph (C), the public housing 
                agency shall--
                          ``(i) notwithstanding any other provision of 
                        this Act, charge such family as monthly rent 
                        for the unit occupied by such family an amount 
                        equal to the greater of--
                                  ``(I) the applicable fair market 
                                rental established under section 8(c) 
                                for a dwelling unit in the same market 
                                area of the same size; or
                                  ``(II) the amount of the monthly 
                                subsidy provided under this Act for the 
                                dwelling unit, which shall include any 
                                amounts from the Operating Fund and 
                                Capital Fund under section 9 used for 
                                the unit, as determined by the agency 
                                in accordance with regulations that the 
                                Secretary shall issue to carry out this 
                                subclause; or
                          ``(ii) terminate the tenancy of such family 
                        in public housing not later than 6 months after 
                        the income determination described in 
                        subparagraph (A).
                  ``(B) Notice.--In the case of any family residing in 
                a dwelling unit of public housing whose income for a 
                year has exceeded the applicable income limitation 
                under subparagraph (C), upon the conclusion of such 
                year the public housing agency shall provide written 
                notice to such family of the requirements under 
                subparagraph (A).
                  ``(C) Income limitation.--The income limitation under 
                this subparagraph shall be 120 percent of the median 
                income for the area, as determined by the Secretary 
                with adjustments for smaller and larger families, 
                except that the Secretary may establish income 
                limitations higher or lower than 120 percent of such 
                median income on the basis of the Secretary's findings 
                that such variations are necessary because of 
                prevailing levels of construction costs, or unusually 
                high or low family incomes, vacancy rates, or rental 
                costs.
                  ``(D) Exception.--Subparagraph (A) shall not apply to 
                a family occupying a dwelling unit in public housing 
                pursuant to paragraph (5) of section 3(a) (42 U.S.C. 
                1437a(a)(5)).
                  ``(E) Reports on over-income families and waiting 
                lists.--The Secretary shall require that each public 
                housing agency shall--
                          ``(i) submit a report annually, in a format 
                        required by the Secretary, that specifies--
                                  ``(I) the number of families 
                                residing, as of the end of the year for 
                                which the report is submitted, in 
                                public housing administered by the 
                                agency who had incomes exceeding the 
                                applicable income limitation under 
                                subparagraph (C); and
                                  ``(II) the number of families, as of 
                                the end of such year, on the waiting 
                                lists for admission to public housing 
                                projects of the agency; and
                          ``(ii) make the information reported pursuant 
                        to clause (i) publicly available.''.

SEC. 104. LIMITATION ON ELIGIBILITY FOR ASSISTANCE BASED ON ASSETS.

  Section 16 of the United States Housing Act of 1937 (42 U.S.C. 1437n) 
is amended by inserting after subsection (d) the following new 
subsection:
  ``(e) Eligibility for Assistance Based on Assets.--
          ``(1) Limitation on assets.--Subject to paragraph (3) and 
        notwithstanding any other provision of this Act, a dwelling 
        unit assisted under this Act may not be rented and assistance 
        under this Act may not be provided, either initially or at each 
        recertification of family income, to any family--
                  ``(A) whose net family assets exceed $100,000, as 
                such amount is adjusted annually by applying an 
                inflationary factor as the Secretary considers 
                appropriate; or
                  ``(B) who has a present ownership interest in, a 
                legal right to reside in, and the effective legal 
                authority to sell, real property that is suitable for 
                occupancy by the family as a residence, except that the 
                prohibition under this subparagraph shall not apply 
                to--
                          ``(i) any property for which the family is 
                        receiving assistance under subsection (y) or 
                        (o)(12) of section 8 of this Act;
                          ``(ii) any person that is a victim of 
                        domestic violence; or
                          ``(iii) any family that is offering such 
                        property for sale.
          ``(2) Net family assets.--
                  ``(A) In general.--For purposes of this subsection, 
                the term `net family assets' means, for all members of 
                the household, the net cash value of all assets after 
                deducting reasonable costs that would be incurred in 
                disposing of real property, savings, stocks, bonds, and 
                other forms of capital investment. Such term does not 
                include interests in Indian trust land, equity in 
                property for which the family is receiving assistance 
                under subsection (y) or (o)(12) of section 8, equity 
                accounts in homeownership programs of the Department of 
                Housing and Urban Development, or Family Self 
                Sufficiency accounts.
                  ``(B) Exclusions.--Such term does not include--
                          ``(i) the value of personal property, except 
                        for items of personal property of significant 
                        value, as the Secretary may establish or the 
                        public housing agency may determine;
                          ``(ii) the value of any retirement account;
                          ``(iii) real property for which the family 
                        does not have the effective legal authority 
                        necessary to sell such property;
                          ``(iv) any amounts recovered in any civil 
                        action or settlement based on a claim of 
                        malpractice, negligence, or other breach of 
                        duty owed to a member of the family and arising 
                        out of law, that resulted in a member of the 
                        family being disabled;
                          ``(v) the value of any Coverdell education 
                        savings account under section 530 of the 
                        Internal Revenue Code of 1986 or any qualified 
                        tuition program under section 529 of such Code; 
                        and
                          ``(vi) such other exclusions as the Secretary 
                        may establish.
                  ``(C) Trust funds.--In cases in which a trust fund 
                has been established and the trust is not revocable by, 
                or under the control of, any member of the family or 
                household, the value of the trust fund shall not be 
                considered an asset of a family if the fund continues 
                to be held in trust. Any income distributed from the 
                trust fund shall be considered income for purposes of 
                section 3(b) and any calculations of annual family 
                income, except in the case of medical expenses for a 
                minor.
          ``(3) Self-certification.--
                  ``(A) Net family assets.--A public housing agency or 
                owner may determine the net assets of a family, for 
                purposes of this section, based on a certification by 
                the family that the net assets of such family do not 
                exceed $50,000, as such amount is adjusted annually by 
                applying an inflationary factor as the Secretary 
                considers appropriate.
                  ``(B) No current real property ownership.--A public 
                housing agency or owner may determine compliance with 
                paragraph (1)(B) based on a certification by the family 
                that such family does not have any current ownership 
                interest in any real property at the time the agency or 
                owner reviews the family's income.
                  ``(C) Standardized forms.--The Secretary may develop 
                standardized forms for the certifications referred to 
                in subparagraphs (A) and (B).
          ``(4) Compliance for public housing dwelling units.--When 
        recertifying family income with respect to families residing in 
        public housing dwelling units, a public housing agency may, in 
        the discretion of the agency and only pursuant to a policy that 
        is set forth in the public housing agency plan under section 5A 
        for the agency, choose not to enforce the limitation under 
        paragraph (1).
          ``(5) Enforcement.--When recertifying the income of a family 
        residing in a dwelling unit assisted under this Act, a public 
        housing agency or owner may choose not to enforce the 
        limitation under paragraph (1) or may establish exceptions to 
        such limitation based on eligibility criteria, but only 
        pursuant to a policy that is set forth in the public housing 
        agency plan under section 5A for the agency or under a policy 
        adopted by the owner. Eligibility criteria for establishing 
        exceptions may provide for separate treatment based on family 
        type and may be based on different factors, such as age, 
        disability, income, the ability of the family to find suitable 
        alternative housing, and whether supportive services are being 
        provided.
          ``(6) Authority to delay evictions.--In the case of a family 
        residing in a dwelling unit assisted under this Act who does 
        not comply with the limitation under paragraph (1), the public 
        housing agency or project owner may delay eviction or 
        termination of the family based on such noncompliance for a 
        period of not more than 6 months.''.

SEC. 105. UNITS OWNED BY PUBLIC HOUSING AGENCIES.

  Paragraph (11) of section 8(o) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(o)(11)) is amended--
          (1) by striking ``(11) Leasing of units owned by pha.--If'' 
        and inserting the following:
          ``(11) Leasing of units owned by pha.--
                  ``(A) Inspections and rent determinations.--If''; and
          (2) by adding at the end the following new subparagraph:
                  ``(B) Units owned by pha.--For purposes of this 
                subsection, the term `owned by a public housing agency' 
                means, with respect to a dwelling unit, that the 
                dwelling unit is in a project that is owned by such 
                agency, by an entity wholly controlled by such agency, 
                or by a limited liability company or limited 
                partnership in which such agency (or an entity wholly 
                controlled by such agency) holds a controlling interest 
                in the managing member or general partner. A dwelling 
                unit shall not be deemed to be owned by a public 
                housing agency for purposes of this subsection because 
                the agency holds a fee interest as ground lessor in the 
                property on which the unit is situated, holds a 
                security interest under a mortgage or deed of trust on 
                the unit, or holds a non-controlling interest in an 
                entity which owns the unit or in the managing member or 
                general partner of an entity which owns the unit.''.

SEC. 106. PHA PROJECT-BASED ASSISTANCE.

  (a) In General.--Paragraph (13) of section 8(o) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is amended--
          (1) by striking ``structure'' each place such term appears 
        and inserting ``project'';
          (2) by striking subparagraph (B) and inserting the following 
        new subparagraph:
                  ``(B) Percentage limitation.--
                          ``(i) In general.--Subject to clause (ii), a 
                        public housing agency may use for project-based 
                        assistance under this paragraph not more than 
                        20 percent of the authorized units for the 
                        agency.
                          ``(ii) Exception.--A public housing agency 
                        may use up to an additional 10 percent of the 
                        authorized units for the agency for project-
                        based assistance under this paragraph, to 
                        provide units that house individuals and 
                        families that meet the definition of homeless 
                        under section 103 of the McKinney-Vento 
                        Homeless Assistance Act (42 U.S.C. 11302), that 
                        house families with veterans, that provide 
                        supportive housing to persons with disabilities 
                        or elderly persons, or that are located in 
                        areas where vouchers under this subsection are 
                        difficult to use, as specified in subparagraph 
                        (D)(ii)(II). Any units of project-based 
                        assistance that are attached to units 
                        previously subject to federally required rent 
                        restrictions or receiving another type of long-
                        term housing subsidy provided by the Secretary 
                        shall not count toward the percentage 
                        limitation under clause (i) of this 
                        subparagraph. The Secretary may, by regulation, 
                        establish additional categories for the 
                        exception under this clause.'';
          (3) by striking subparagraph (D) and inserting the following 
        new subparagraph:
                  ``(D) Income-mixing requirement.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), not more than the greater of 25 
                        dwelling units or 25 percent of the dwelling 
                        units in any project may be assisted under a 
                        housing assistance payment contract for 
                        project-based assistance pursuant to this 
                        paragraph. For purposes of this subparagraph, 
                        the term `project' means a single building, 
                        multiple contiguous buildings, or multiple 
                        buildings on contiguous parcels of land.
                          ``(ii) Exceptions.--
                                  ``(I) Certain families.--The 
                                limitation under clause (i) shall not 
                                apply to dwelling units assisted under 
                                a contract that are exclusively made 
                                available to elderly families or to 
                                households eligible for supportive 
                                services that are made available to the 
                                assisted residents of the project, 
                                according to standards for such 
                                services the Secretary may establish.
                                  ``(II) Certain areas.--With respect 
                                to areas in which tenant-based vouchers 
                                for assistance under this subsection 
                                are difficult to use, as determined by 
                                the Secretary, and with respect to 
                                census tracts with a poverty rate of 20 
                                percent or less, clause (i) shall be 
                                applied by substituting `40 percent' 
                                for `25 percent', and the Secretary 
                                may, by regulation, establish 
                                additional conditions.
                                  ``(III) Certain contracts.--The 
                                limitation under clause (i) shall not 
                                apply with respect to contracts or 
                                renewal of contracts under which a 
                                greater percentage of the dwelling 
                                units in a project were assisted under 
                                a housing assistance payment contract 
                                for project-based assistance pursuant 
                                to this paragraph on the date of the 
                                enactment of the Housing Opportunity 
                                Through Modernization Act of 2015.
                                  ``(IV) Certain properties.--Any units 
                                of project-based assistance under this 
                                paragraph that are attached to units 
                                previously subject to federally 
                                required rent restrictions or receiving 
                                other project-based assistance provided 
                                by the Secretary shall not count toward 
                                the percentage limitation imposed by 
                                this subparagraph (D).
                          ``(iii) Additional monitoring and oversight 
                        requirements.--The Secretary may establish 
                        additional requirements for monitoring and 
                        oversight of projects in which more than 40 
                        percent of the dwelling units are assisted 
                        under a housing assistance payment contract for 
                        project-based assistance pursuant to this 
                        paragraph.'';
          (4) by striking subparagraph (F) and inserting the following 
        new subparagraph:
                  ``(F) Contract term.--
                          ``(i) Term.--A housing assistance payment 
                        contract pursuant to this paragraph between a 
                        public housing agency and the owner of a 
                        project may have a term of up to 20 years, 
                        subject to--
                                  ``(I) the availability of sufficient 
                                appropriated funds for the purpose of 
                                renewing expiring contracts for 
                                assistance payments, as provided in 
                                appropriation Acts and in the agency's 
                                annual contributions contract with the 
                                Secretary, provided that in the event 
                                of insufficient appropriated funds, 
                                payments due under contracts under this 
                                paragraph shall take priority if other 
                                cost-saving measures that do not 
                                require the termination of an existing 
                                contract are available to the agency; 
                                and
                                  ``(II) compliance with the inspection 
                                requirements under paragraph (8), 
                                except that the agency shall not be 
                                required to make biennial inspections 
                                of each assisted unit in the 
                                development.
                          ``(ii) Addition of eligible units.--Subject 
                        to the limitations of subparagraphs (B) and 
                        (D), the agency and the owner may add eligible 
                        units within the same project to a housing 
                        assistance payments contract at any time during 
                        the term thereof without being subject to any 
                        additional competitive selection procedures.
                          ``(iii) Housing under construction or 
                        recently constructed.--An agency may enter into 
                        a housing assistance payments contract with an 
                        owner for any unit that does not qualify as 
                        existing housing and is under construction or 
                        recently has been constructed whether or not 
                        the agency has executed an agreement to enter 
                        into a contract with the owner, provided that 
                        the owner demonstrates compliance with 
                        applicable requirements prior to execution of 
                        the housing assistance payments contract. This 
                        clause shall not subject a housing assistance 
                        payments contract for existing housing under 
                        this paragraph to such requirements or 
                        otherwise limit the extent to which a unit may 
                        be assisted as existing housing.
                          ``(iv) Additional conditions.--The contract 
                        may specify additional conditions, including 
                        with respect to continuation, termination, or 
                        expiration, and shall specify that upon 
                        termination or expiration of the contract 
                        without extension, each assisted family may 
                        elect to use its assistance under this 
                        subsection to remain in the same project if its 
                        unit complies with the inspection requirements 
                        under paragraph (8), the rent for the unit is 
                        reasonable as required by paragraph (10)(A), 
                        and the family pays its required share of the 
                        rent and the amount, if any, by which the unit 
                        rent (including the amount allowed for tenant-
                        based utilities) exceeds the applicable payment 
                        standard.'';
          (5) in subparagraph (G), by striking ``15 years'' and 
        inserting ``20 years'';
          (6) by striking subparagraph (I) and inserting the following 
        new subparagraph:
                  ``(I) Rent adjustments.--A housing assistance 
                payments contract pursuant to this paragraph entered 
                into after the date of the enactment of the Housing 
                Opportunity Through Modernization Act of 2015 shall 
                provide for annual rent adjustments upon the request of 
                the owner, except that--
                          ``(i) by agreement of the parties, a contract 
                        may allow a public housing agency to adjust the 
                        rent for covered units using an operating cost 
                        adjustment factor established by the Secretary 
                        pursuant to section 524(c) of the Multifamily 
                        Assisted Housing Reform and Affordability Act 
                        of 1997 (which shall not result in a negative 
                        adjustment), in which case the contract may 
                        require an additional adjustment, if requested, 
                        up to the reasonable rent periodically during 
                        the term of the contract, and shall require 
                        such an adjustment, if requested, upon 
                        extension pursuant to subparagraph (G);
                          ``(ii) the adjusted rent shall not exceed the 
                        maximum rent permitted under subparagraph (H);
                          ``(iii) the contract may provide that the 
                        maximum rent permitted for a dwelling unit 
                        shall not be less than the initial rent for the 
                        dwelling unit under the initial housing 
                        assistance payments contract covering the 
                        units; and
                          ``(iv) the provisions of subsection (c)(2)(C) 
                        shall not apply.'';
          (7) in subparagraph (J)--
                  (A) in the first sentence--
                          (i) by striking ``shall'' and inserting 
                        ``may''; and
                          (ii) by inserting before the period the 
                        following: ``or may permit owners to select 
                        applicants from site-based waiting lists as 
                        specified in this subparagraph'';
                  (B) by striking the third sentence and inserting the 
                following: ``The agency or owner may establish 
                preferences or criteria for selection for a unit 
                assisted under this paragraph that are consistent with 
                the public housing agency plan for the agency approved 
                under section 5A and that give preference to families 
                who qualify for voluntary services, including 
                disability-specific services, offered in conjunction 
                with assisted units.''; and
                  (C) by striking the fifth and sixth sentences and 
                inserting the following: ``A public housing agency may 
                establish and utilize procedures for owner-maintained 
                site-based waiting lists, under which applicants may 
                apply at, or otherwise designate to the public housing 
                agency, the project or projects in which they seek to 
                reside, except that all eligible applicants on the 
                waiting list of an agency for assistance under this 
                subsection shall be permitted to place their names on 
                such separate list, subject to policies and procedures 
                established by the Secretary. All such procedures shall 
                comply with title VI of the Civil Rights Act of 1964, 
                the Fair Housing Act, section 504 of the Rehabilitation 
                Act of 1973, and other applicable civil rights laws. 
                The owner or manager of a project assisted under this 
                paragraph shall not admit any family to a dwelling unit 
                assisted under a contract pursuant to this paragraph 
                other than a family referred by the public housing 
                agency from its waiting list, or a family on a site-
                based waiting list that complies with the requirements 
                of this subparagraph. A public housing agency shall 
                disclose to each applicant all other options in the 
                selection of a project in which to reside that are 
                provided by the public housing agency and are available 
                to the applicant.'';
          (8) in subparagraph (M)(ii), by inserting before the period 
        at the end the following: ``relating to funding other than 
        housing assistance payments''; and
          (9) by adding at the end the following new subparagraphs:
                  ``(N) Structure owned by agency.--A public housing 
                agency engaged in an initiative to improve, develop, or 
                replace a public housing property or site may attach 
                assistance to an existing, newly constructed, or 
                rehabilitated structure in which the agency has an 
                ownership interest or which the agency has control of 
                without following a competitive process, provided that 
                the agency has notified the public of its intent 
                through its public housing agency plan and subject to 
                the limitations and requirements of this paragraph.
                  ``(O) Special purpose vouchers.--A public housing 
                agency that administers vouchers authorized under 
                subsection (o)(19) or (x) of this section may provide 
                such assistance in accordance with the limitations and 
                requirements of this paragraph, without additional 
                requirements for approval by the Secretary.''.
  (b) Effective Date.--The Secretary of Housing and Urban Development 
shall issue notice or regulations to implement subsection (a) of this 
section and such subsection shall take effect upon such issuance.

SEC. 107. ESTABLISHMENT OF FAIR MARKET RENT.

  (a) In General.--Paragraph (1) of section 8(c) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(c)(1)) is amended--
          (1) by inserting ``(A)'' after the paragraph designation;
          (2) by striking the fourth, seventh, eighth, and ninth 
        sentences; and
          (3) by adding at the end the following:
  ``(B) Fair market rentals for an area shall be published not less 
than annually by the Secretary on the site of the Department on the 
World Wide Web and in any other manner specified by the Secretary. 
Notice that such fair market rentals are being published shall be 
published in the Federal Register, and such fair market rentals shall 
become effective no earlier than 30 days after the date of such 
publication. The Secretary shall establish a procedure for public 
housing agencies and other interested parties to comment on such fair 
market rentals and to request, within a time specified by the 
Secretary, reevaluation of the fair market rentals in a jurisdiction 
before such rentals become effective. The Secretary shall cause to be 
published for comment in the Federal Register notices of proposed 
material changes in the methodology for estimating fair market rentals 
and notices specifying the final decisions regarding such proposed 
substantial methodological changes and responses to public comments.''.
  (b) Payment Standard.--Subparagraph (B) of section 8(o)(1) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(o)(1)(B)) is amended 
by inserting before the period at the end the following: ``, except 
that no public housing agency shall be required as a result of a 
reduction in the fair market rental to reduce the payment standard 
applied to a family continuing to reside in a unit for which the family 
was receiving assistance under this section at the time the fair market 
rental was reduced. The Secretary shall allow public housing agencies 
to request exception payment standards within fair market rental areas 
subject to criteria and procedures established by the Secretary''.
  (c) Effective Date.--The amendments made by this section shall take 
effect upon the date of the enactment of this Act.

SEC. 108. COLLECTION OF UTILITY DATA.

  Section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(o)) is amended by adding at the end the following new paragraph:
          ``(20) Collection of utility data.--
                  ``(A) Publication.--The Secretary shall, to the 
                extent that data can be collected cost effectively, 
                regularly publish such data regarding utility 
                consumption and costs in local areas as the Secretary 
                determines will be useful for the establishment of 
                allowances for tenant-paid utilities for families 
                assisted under this subsection.
                  ``(B) Use of data.--The Secretary shall provide such 
                data in a manner that--
                          ``(i) avoids unnecessary administrative 
                        burdens for public housing agencies and owners; 
                        and
                          ``(ii) protects families in various unit 
                        sizes and building types, and using various 
                        utilities, from high rent and utility cost 
                        burdens relative to income.''.

SEC. 109. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.

  (a) Capital Fund Replacement Reserves.--Section 9 of the United 
States Housing Act of 1937 (42 U.S.C. 1437g) is amended--
          (1) in subsection (j), by adding at the end the following new 
        paragraph:
          ``(7) Treatment of replacement reserve.--The requirements of 
        this subsection shall not apply to funds held in replacement 
        reserves established pursuant to subsection (n).''; and
          (2) by adding at the end the following new subsection:
  ``(n) Establishment of Replacement Reserves.--
          ``(1) In general.--Public housing agencies shall be permitted 
        to establish a replacement reserve to fund any of the capital 
        activities listed in subsection (d)(1).
          ``(2) Source and amount of funds for replacement reserve.--At 
        any time, a public housing agency may deposit funds from such 
        agency's Capital Fund into a replacement reserve, subject to 
        the following:
                  ``(A) At the discretion of the Secretary, public 
                housing agencies may transfer and hold in a replacement 
                reserve funds originating from additional sources.
                  ``(B) No minimum transfer of funds to a replacement 
                reserve shall be required.
                  ``(C) At any time, a public housing agency may not 
                hold in a replacement reserve more than the amount the 
                public housing authority has determined necessary to 
                satisfy the anticipated capital needs of properties in 
                its portfolio assisted under this section, as outlined 
                in its Capital Fund 5-Year Action Plan, or a comparable 
                plan, as determined by the Secretary.
                  ``(D) The Secretary may establish, by regulation, a 
                maximum replacement reserve level or levels that are 
                below amounts determined under subparagraph (C), which 
                may be based upon the size of the portfolio assisted 
                under this section or other factors.
          ``(3) Transfer of operating funds.--In first establishing a 
        replacement reserve, the Secretary may allow public housing 
        agencies to transfer more than 20 percent of its operating 
        funds into its replacement reserve.
          ``(4) Expenditure.--Funds in a replacement reserve may be 
        used for purposes authorized by subsection (d)(1) and contained 
        in its Capital Fund 5-Year Action Plan.
          ``(5) Management and report.--The Secretary shall establish 
        appropriate accounting and reporting requirements to ensure 
        that public housing agencies are spending funds on eligible 
        projects and that funds in the replacement reserve are 
        connected to capital needs.''.
  (b) Flexibility of Operating Fund Amounts.--Paragraph (1) of section 
9(g) of the United States Housing Act of 1937 (42 U.S.C. 1437g(g)(1)) 
is amended--
          (1) by striking ``(1)'' and all that follows through ``--Of'' 
        and inserting the following:
          ``(1) Flexibility in use of funds.--
                  ``(A) Flexibility for capital fund amounts.--Of''; 
                and
          (2) by adding at the end the following new subparagraph:
                  ``(B) Flexibility for operating fund amounts.--Of any 
                amounts appropriated for fiscal year 2016 or any fiscal 
                year thereafter that are allocated for fiscal year 2016 
                or any fiscal year thereafter from the Operating Fund 
                for any public housing agency, the agency may use not 
                more than 20 percent for activities that are eligible 
                under subsection (d) for assistance with amounts from 
                the Capital Fund, but only if the public housing plan 
                under section 5A for the agency provides for such 
                use.''.

SEC. 110. FAMILY UNIFICATION PROGRAM FOR CHILDREN AGING OUT OF FOSTER 
                    CARE.

  Section 8(x) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(x)) is amended--
          (1) in paragraph (2)(B)--
                  (A) by striking ``18 months'' and inserting ``36 
                months'';
                  (B) by striking ``21 years of age'' and inserting 
                ``24 years of age''; and
                  (C) by inserting after ``have left foster care'' the 
                following: ``, or will leave foster care within 90 
                days, in accordance with a transition plan described in 
                section 475(5)(H) of the Social Security Act, and is 
                homeless or is at risk of becoming homeless'';
          (2) by redesignating paragraph (4) as paragraph (5); and
          (3) by inserting after paragraph (3) the following new 
        paragraph:
          ``(4) Coordination between public housing agencies and public 
        child welfare agencies.--The Secretary shall, not later than 
        the expiration of the 180-day period beginning on the date of 
        the enactment of the Housing Opportunity Through Modernization 
        Act of 2015 and after consultation with other appropriate 
        Federal agencies, issue guidance to improve coordination 
        between public housing agencies and public child welfare 
        agencies in carrying out the program under this subsection, 
        which shall provide guidance on--
                  ``(A) identifying eligible recipients for assistance 
                under this subsection;
                  ``(B) coordinating with other local youth and family 
                providers in the community and participating in the 
                Continuum of Care program established under subtitle C 
                of title IV of the McKinney-Vento Homeless Assistance 
                Act (42 U.S.C. 11381 et seq.);
                  ``(C) implementing housing strategies to assist 
                eligible families and youth;
                  ``(D) aligning system goals to improve outcomes for 
                families and youth and reducing lapses in housing for 
                families and youth; and
                  ``(E) identifying resources that are available to 
                eligible families and youth to provide supportive 
                services available through parts B and E of title IV of 
                the Social Security Act (42 U.S.C. 621 et seq.; 670 et 
                seq.) or that the head of household of a family or 
                youth may be entitled to receive under section 477 of 
                the Social Security Act (42 U.S.C. 677).''.

                        TITLE II--RURAL HOUSING

SEC. 201. DELEGATION OF GUARANTEED RURAL HOUSING LOAN APPROVAL.

  Subsection (h) of section 502 of the Housing Act of 1949 (42 U.S.C. 
1472(h)) is amended by adding at the end the following new paragraph:
          ``(18) Delegation of approval.--The Secretary may delegate, 
        in part or in full, the Secretary's authority to approve and 
        execute binding Rural Housing Service loan guarantees pursuant 
        to this subsection to certain preferred lenders, in accordance 
        with standards established by the Secretary.''.

           TITLE III--FHA MORTGAGE INSURANCE FOR CONDOMINIUMS

SEC. 301. MODIFICATION OF FHA REQUIREMENTS FOR MORTGAGE INSURANCE FOR 
                    CONDOMINIUMS.

  Section 203 of the National Housing Act (12 U.S.C. 1709) is amended 
by adding at the end the following new subsection:
  ``(y) Requirements for Mortgages for Condominiums.--
          ``(1) Project recertification requirements.--Notwithstanding 
        any other law, regulation, or guideline of the Secretary, 
        including chapter 2.4 of the Condominium Project Approval and 
        Processing Guide of the FHA, the Secretary shall streamline the 
        project certification requirements that are applicable to the 
        insurance under this section for mortgages for condominium 
        projects so that recertifications are substantially less 
        burdensome than certifications. The Secretary shall consider 
        lengthening the time between certifications for approved 
        properties, and allowing updating of information rather than 
        resubmission.
          ``(2) Commercial space requirements.--Notwithstanding any 
        other law, regulation, or guideline of the Secretary, including 
        chapter 2.1.3 of the Condominium Project Approval and 
        Processing Guide of the FHA, in providing for exceptions to the 
        requirement for the insurance of a mortgage on a condominium 
        property under this section regarding the percentage of the 
        floor space of a condominium property that may be used for 
        nonresidential or commercial purposes, the Secretary shall 
        provide that--
                  ``(A) any request for such an exception and the 
                determination of the disposition of such request may be 
                made, at the option of the requester, under the direct 
                endorsement lender review and approval process or under 
                the HUD review and approval process through the 
                applicable field office of the Department; and
                  ``(B) in determining whether to allow such an 
                exception for a condominium property, factors relating 
                to the economy for the locality in which such project 
                is located or specific to project, including the total 
                number of family units in the project, shall be 
                considered.
        Not later than the expiration of the 90-day period beginning on 
        the date of the enactment of this paragraph, the Secretary 
        shall issue regulations to implement this paragraph, which 
        shall include any standards, training requirements, and 
        remedies and penalties that the Secretary considers 
        appropriate.
          ``(3) Transfer fees.--Notwithstanding any other law, 
        regulation, or guideline of the Secretary, including chapter 
        1.8.8 of the Condominium Project Approval and Processing Guide 
        of the FHA and section 203.41 of the Secretary's regulations 
        (24 C.F.R. 203.41), existing standards of the Federal Housing 
        Finance Agency relating to encumbrances under private transfer 
        fee covenants shall apply to the insurance of mortgages by the 
        Secretary under this section to the same extent and in the same 
        manner that such standards apply to the purchasing, investing 
        in, and otherwise dealing in mortgages by the Federal National 
        Mortgage Association and the Federal Home Loan Mortgage 
        Corporation. If the provisions of part 1228 of the Director of 
        the Federal Housing Finance Agency's regulations (12 C.F.R. 
        part 1228) are amended or otherwise changed after the date of 
        the enactment of this paragraph, the Secretary of Housing and 
        Urban Development shall adopt any such amendments or changes 
        for purposes of this paragraph, unless the Secretary causes to 
        be published in the Federal Register a notice explaining why 
        the Secretary will disregard such amendments or changes within 
        90 days after the effective date of such amendments or changes.
          ``(4) Owner-occupancy requirement.--
                  ``(A) Establishment of percentage requirement.--Not 
                later than the expiration of the 90-day period 
                beginning on the date of the enactment of this 
                paragraph, the Secretary shall, by rule, notice, or 
                mortgagee letter, issue guidance regarding the 
                percentage of units that must be occupied by the owners 
                as a principal residence or a secondary residence (as 
                such terms are defined by the Secretary), or must have 
                been sold to owners who intend to meet such occupancy 
                requirements, including justifications for the 
                percentage requirements, in order for a condominium 
                project to be acceptable to the Secretary for insurance 
                under this section of a mortgage within such 
                condominium property.
                  ``(B) Failure to act.--If the Secretary fails to 
                issue the guidance required under subparagraph (A) 
                before the expiration of the 90-day period specified in 
                such clause, the following provisions shall apply:
                          ``(i) 35 percent requirement.--In order for a 
                        condominium project to be acceptable to the 
                        Secretary for insurance under this section, at 
                        least 35 percent of all family units (including 
                        units not covered by FHA-insured mortgages) 
                        must be occupied by the owners as a principal 
                        residence or a secondary residence (as such 
                        terms are defined by the Secretary), or must 
                        have been sold to owners who intend to meet 
                        such occupancy requirement.
                          ``(ii) Other considerations.--The Secretary 
                        may increase the percentage applicable pursuant 
                        to clause (i) to a condominium project on a 
                        project-by-project or regional basis, and in 
                        determining such percentage for a project shall 
                        consider factors relating to the economy for 
                        the locality in which such project is located 
                        or specific to project, including the total 
                        number of family units in the project.''.

      TITLE IV--HOUSING REFORMS FOR THE HOMELESS AND FOR VETERANS

SEC. 401. DEFINITION OF GEOGRAPHIC AREA FOR CONTINUUM OF CARE PROGRAM.

  (a) Definition.--Subtitle C of the McKinney-Vento Homeless Assistance 
Act is amended--
          (1) by redesignating sections 432 and 433 (42 U.S.C. 11387, 
        11388) as sections 433 and 434, respectively; and
          (2) by inserting after section 431 (42 U.S.C. 11386e) the 
        following new section:

``SEC. 432. GEOGRAPHIC AREAS.

  ``(a) Requirement to Define.--For purposes of this subtitle, the term 
`geographic area' shall have such meaning as the Secretary shall by 
notice provide.
  ``(b) Issuance of Notice.--Not later than the expiration of the 90-
day period beginning on the date of the enactment of the Housing 
Opportunity Through Modernization Act of 2015, the Secretary shall 
issue a notice setting forth the definition required by subsection 
(a).''.
  (b) Clerical Amendment.--The table of contents in section 101(b) of 
the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11301 note) is 
amended by striking the items relating to sections 432 and 433 and 
inserting the following new items:

``Sec. 432. Geographic areas.
``Sec. 433. Regulations.
``Sec. 434. Reports to Congress.''.

SEC. 402. INCLUSION OF PUBLIC HOUSING AGENCIES AND LOCAL REDEVELOPMENT 
                    AUTHORITIES IN EMERGENCY SOLUTIONS GRANTS.

  Section 414(c) of the McKinney-Vento Homeless Assistance Act (42 
U.S.C. 11373(c)) is amended--
          (1) in the subsection heading, by inserting ``, Public 
        Housing Agencies, and Local Redevelopment Authorities'' after 
        ``Organizations''; and
          (2) in the first sentence, by inserting before the period at 
        the end the following: ``, to public housing agencies (as 
        defined under section 3(b)(6) of the United States Housing Act 
        of 1937), or to local redevelopment authorities (as defined 
        under State law)''.

SEC. 403. SPECIAL ASSISTANT FOR VETERANS AFFAIRS IN THE DEPARTMENT OF 
                    HOUSING AND URBAN DEVELOPMENT.

  (a) Transfer of Position to Office of the Secretary.--Section 4 of 
the Department of Housing and Urban Development Act (42 U.S.C. 3533) is 
amended by adding at the end the following new subsection:
  ``(h) Special Assistant for Veterans Affairs.--
          ``(1) Position.--There shall be in the Office of the 
        Secretary a Special Assistant for Veterans Affairs, who shall 
        report directly to the Secretary.
          ``(2) Appointment.--The Special Assistant for Veterans 
        Affairs shall be appointed based solely on merit and shall be 
        covered under the provisions of title 5, United States Code, 
        governing appointments in the competitive service.
          ``(3) Responsibilities.--The Special Assistant for Veterans 
        Affairs shall be responsible for--
                  ``(A) ensuring veterans have fair access to housing 
                and homeless assistance under each program of the 
                Department providing either such assistance;
                  ``(B) coordinating all programs and activities of the 
                Department relating to veterans;
                  ``(C) serving as a liaison for the Department with 
                the Department of Veterans Affairs, including 
                establishing and maintaining relationships with the 
                Secretary of Veterans Affairs;
                  ``(D) serving as a liaison for the Department, and 
                establishing and maintaining relationships with the 
                United States Interagency Council on Homelessness and 
                officials of State, local, regional, and 
                nongovernmental organizations concerned with veterans;
                  ``(E) providing information and advice regarding--
                          ``(i) sponsoring housing projects for 
                        veterans assisted under programs administered 
                        by the Department; or
                          ``(ii) assisting veterans in obtaining 
                        housing or homeless assistance under programs 
                        administered by the Department;
                  ``(F) coordinating with the Secretary of Housing and 
                Urban Development and the Secretary of Veterans Affairs 
                in carrying out section 404 of the Housing Opportunity 
                Through Modernization Act of 2015; and
                  ``(G) carrying out such other duties as may be 
                assigned to the Special Assistant by the Secretary or 
                by law.''.
  (b) Transfer of Position in Office of Deputy Assistant Secretary for 
Special Needs.--On the date that the initial Special Assistant for 
Veterans Affairs is appointed pursuant to section 4(h)(2) of the 
Department of Housing and Urban Development Act, as added by subsection 
(a) of this section, the position of Special Assistant for Veterans 
Programs in the Office of the Deputy Assistant Secretary for Special 
Needs of the Department of Housing and Urban Development shall be 
terminated.

SEC. 404. ANNUAL SUPPLEMENTAL REPORT ON VETERANS HOMELESSNESS.

  (a) In General.--The Secretary of Housing and Urban Development and 
the Secretary of Veterans Affairs, in coordination with the United 
States Interagency Council on Homelessness, shall submit annually to 
the Committees of the Congress specified in subsection (b), together 
with the annual reports required by such Secretaries under section 
203(c)(1) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
11313(c)(1)), a supplemental report that includes the following 
information with respect to the preceding year:
          (1) The same information, for such preceding year, that was 
        included with respect to 2010 in the report by the Secretary of 
        Housing and Urban Development and the Secretary of Veterans 
        Affairs entitled ``Veterans Homelessness: A Supplemental Report 
        to the 2010 Annual Homeless Assessment Report to Congress''.
          (2) Information regarding the activities of the Department of 
        Housing and Urban Development relating to veterans during such 
        preceding year, as follows:
                  (A) The number of veterans provided assistance under 
                the housing choice voucher program for Veterans Affairs 
                supported housing under section 8(o)(19) of the United 
                States Housing Act of 1937 (42 U.S.C. 1437f(o)(19)), 
                the socioeconomic characteristics of such homeless 
                veterans, and the number, types, and locations of 
                entities contracted under such section to administer 
                the vouchers.
                  (B) A summary description of the special 
                considerations made for veterans under public housing 
                agency plans submitted pursuant to section 5A of the 
                United States Housing Act of 1937 (42 U.S.C. 1437c-1) 
                and under comprehensive housing affordability 
                strategies submitted pursuant to section 105 of the 
                Cranston-Gonzalez National Affordable Housing Act (42 
                U.S.C. 12705).
                  (C) A description of the activities of the Special 
                Assistant for Veterans Affairs of the Department of 
                Housing and Urban Development.
                  (D) A description of the efforts of the Department of 
                Housing and Urban Development and the other members of 
                the United States Interagency Council on Homelessness 
                to coordinate the delivery of housing and services to 
                veterans.
                  (E) The cost to the Department of Housing and Urban 
                Development of administering the programs and 
                activities relating to veterans.
                  (F) Any other information that the Secretary of 
                Housing and Urban Development and the Secretary of 
                Veterans Affairs consider relevant in assessing the 
                programs and activities of the Department of Housing 
                and Urban Development relating to veterans.
  (b) Committees.--The Committees of the Congress specified in this 
subsection are as follows:
          (1) The Committee on Banking, Housing, and Urban Affairs of 
        the Senate.
          (2) The Committee on Veterans' Affairs of the Senate.
          (3) The Committee on Appropriations of the Senate.
          (4) The Committee on Financial Services of the House of 
        Representatives.
          (5) The Committee on Veterans' Affairs of the House of 
        Representatives.
          (6) The Committee on Appropriations of the House of 
        Representatives.

                         TITLE V--MISCELLANEOUS

SEC. 501. INCLUSION OF DISASTER HOUSING ASSISTANCE PROGRAM IN CERTAIN 
                    FRAUD AND ABUSE PREVENTION MEASURES.

  The Disaster Housing Assistance Program administered by the 
Department of Housing and Urban Development shall be considered a 
``program of the Department of Housing and Urban Development'' under 
section 904 of the Stewart B. McKinney Homeless Assistance Amendments 
Act of 1988 (42 U.S.C. 3544) for the purpose of income verifications.

SEC. 502. ENERGY EFFICIENCY REQUIREMENTS UNDER SELF-HELP HOMEOWNERSHIP 
                    OPPORTUNITY PROGRAM.

  Section 11 of the Housing Opportunity Program Extension Act of 1996 
(42 U.S.C. 12805 note) is amended by inserting after subsection (f) the 
following new subsection:
  ``(g) Energy Efficiency Requirements.--The Secretary may not require 
any dwelling developed using amounts from a grant made under this 
section to meet any energy efficiency standards other than the 
standards applicable at such time pursuant to section 109 of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12709) to 
housing specified in subsection (a) of such section.''.

SEC. 503. DATA EXCHANGE STANDARDIZATION FOR IMPROVED INTEROPERABILITY.

  (a) Data Exchange Standardization.--Title I of the United States 
Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by adding at 
the end the following new section:

``SEC. 37. DATA EXCHANGE STANDARDS FOR IMPROVED INTEROPERABILITY.

  ``(a) Designation.--The Secretary shall, in consultation with an 
interagency work group established by the Office of Management and 
Budget, and considering State government perspectives, designate data 
exchange standards to govern, under this Act--
          ``(1) necessary categories of information that State agencies 
        operating related programs are required under applicable law to 
        electronically exchange with another State agency; and
          ``(2) Federal reporting and data exchange required under 
        applicable law.
  ``(b) Requirements.--The data exchange standards required by 
subsection (a) shall, to the maximum extent practicable--
          ``(1) incorporate a widely accepted, nonproprietary, 
        searchable, computer-readable format, such as the eXtensible 
        Markup Language;
          ``(2) contain interoperable standards developed and 
        maintained by intergovernmental partnerships, such as the 
        National Information Exchange Model;
          ``(3) incorporate interoperable standards developed and 
        maintained by Federal entities with authority over contracting 
        and financial assistance;
          ``(4) be consistent with and implement applicable accounting 
        principles;
          ``(5) be implemented in a manner that is cost- effective and 
        improves program efficiency and effectiveness; and
          ``(6) be capable of being continually upgraded as necessary.
  ``(c) Rules of Construction.--Nothing in this section requires a 
change to existing data exchange standards for Federal reporting found 
to be effective and efficient.''.
  (b) Applicability.--
          (1) In general.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary of Housing and Urban 
        Development shall issue a proposed rule to carry out the 
        amendments made by subsection (a).
          (2) Requirements.--The rule shall--
                  (A) identify federally required data exchanges;
                  (B) include specification and timing of exchanges to 
                be standardized;
                  (C) address the factors used in determining whether 
                and when to standardize data exchanges;
                  (D) specify State implementation options; and
                  (E) describe future milestones.

                          Purpose and Summary

    Introduced by Representative Luetkemeyer on October 7, 
2015, H.R. 3700, the Housing Opportunity Through Modernization 
Act of 2015, reforms certain Department of Housing and Urban 
Development (HUD) and Rural Housing Service programs in order 
to improve their effectiveness and provide enhanced opportunity 
for program beneficiaries and the organizations that serve such 
individuals.
    H.R. 3700 enhances the implementation of HUD's existing 
Section 8 voucher assistance and Public Housing programs, and 
also achieves savings by modernizing outdated rules and 
regulations which in some cases have not been updated in over a 
generation. Thus, H.R. 3700 streamlines the inspection protocol 
for rental assistance units, simplifies income review and 
recertification policies for all assisted households, modifies 
Federal Housing Administration (FHA) requirements for mortgage 
insurance for condominiums, clarifies homeless assistance 
program requirements, delegates rural housing loan approval 
authority, and provides limited flexibility between public 
housing operating and capital funds.
    H.R. 3700 gives state and local housing agencies, and 
private owners, enhanced flexibility in meeting key program 
objectives such as reducing homelessness, improving access to 
higher-opportunity neighborhoods, and addressing repair needs 
in public housing.
    In addition, H.R. 3700 reduces the lengthy process for the 
certification and recertification of condominium buildings, 
which can cost thousands of dollars for small condominium 
boards, modifies the process for approving condominium 
buildings with commercial space, aligns FHA's transfer fee 
policy to that of the Federal Housing Finance Agency, and 
changes the current standard owner-occupancy requirement from 
50% to 35%.
    Collectively, by improving program effectiveness while 
ensuring that scarce resources are used to support those who 
are most in need, these and other provisions within H.R. 3700 
expand affordable homeownership opportunities for American 
families.

                  Background and Need for Legislation

    For many years, the federal government has provided 
affordable housing for families of modest means. Federal 
housing programs trace their roots to programs established in 
the 1930s through which the federal government helped secure 
lower rents for low- and middle income tenants. Today, HUD-
administered programs rely on housing properties that are owned 
and managed at the local level by quasi-governmental public 
housing authorities, which are under contract to the federal 
government. Given this partnership between the federal 
government and local housing authorities, federal housing 
programs are governed in part by federal rules and regulations 
and in part by local policies.
    The federal government subsidizes affordable rental housing 
through two formula grants--the Public Housing Capital Fund and 
the Public Housing Operating Fund. These grants supplement 
rents collected by public housing authorities. Public housing 
authorities use the grants to meet their operation, 
maintenance, and capital improvement needs. Families who live 
in public housing generally pay rent equal to 30 percent of 
their adjusted gross income. Today, roughly 1.2 million public 
housing units receive federal funds.
    By the early 1970s, construction programs for public 
housing were increasingly criticized because they took too long 
to complete and because they were expensive. Policymakers had 
also become concerned that aging public housing units were 
beginning to physically deteriorate and that public housing 
communities might be contributing to social problems, including 
by perpetuating intergenerational dependence on government 
assistance, chronic poverty, and crime. In 1989, Congress 
established a National Commission on Severely Distressed Public 
Housing (Commission) to identify public housing projects that 
were in a severe state of distress, assess strategies for 
improvement, and develop a plan to improve public housing. In 
1992, the Commission reported that public housing residents 
lived in fear of crime, and that they suffered from high 
unemployment and limited opportunities for employment, 
insufficient resources to address the needs of residents, and 
disincentives to self-sufficiency. The Commission also found 
that some public housing units had deteriorated to the point 
that they posed a physical danger to their residents. To 
address these problems, the Commission recommended that (1) 
public housing residents be provided with more social services; 
(2) funding be increased for public housing capital needs; (3) 
the operational performance of public housing authorities be 
assessed; and (4) new forms of affordable housing public-
private partnerships be explored.
    Even prior to the Commission's report, Congress and the 
Executive Branch examined new ideas for delivering housing 
subsidies to low-income families. The Housing and Community 
Development Act of 1974 created the Housing Choice Voucher 
Program, popularly known as the Section 8 program. The Section 
8 program shifted funds from public-housing construction 
projects to subsidizing rents for low-income families living in 
privately-owned housing. The Section 8 program was designed to 
respond to criticisms of earlier housing programs by providing 
rental subsidies for tenants living in private units and 
relying less heavily on new construction and housing in 
concentrated public housing developments.
    The Section 8 program provides housing assistance to 
approximately two million low-income families and individuals 
each year. Under the Section 8 program, tenants pay 
approximately 30 percent of their income towards rent; the 
balance of rent is paid by the federal government. The Section 
8 program is itself comprised of two programs: the first 
provides tenant-based rental assistance and the second provides 
project-based rental assistance.
    Tenant-based rental assistance vouchers are subsidies that 
low-income families can use to pay part of their rent for 
private-market housing; because families can move yet still 
retain their vouchers, the subsidy is portable. By contrast, 
project-based rental assistance is a subsidy attached to a unit 
of privately-owned housing that houses low-income tenants; if 
the family moves, the subsidy remains with the unit of housing. 
The Section 8 program is administered by more than 3,000 local 
public housing authorities, which receive payments from the 
federal government.
    Over the past decade, the Section 8 program has consumed an 
increasingly large part of HUD's budget. In 2002, Section 8 
accounted for 46 percent of HUD's annual budget. For fiscal 
year 2015, the budget authority for the HUD division 
responsible for administering Section 8--the Office of Public 
and Indian Housing--was $26.401 billion, accounting for 58.21 
percent of HUD's budget. Within the Office of Public and Indian 
Housing, 99 percent of the FY 2015 funding was allocated to 
contract renewals or formula grants, meaning HUD had little 
flexibility or input regarding how the funds were spent.
    Section 8 is consuming a larger part of HUD's budget 
because more people are participating in the program and new 
participants have lower incomes than legacy participants. The 
subsidy provided by the federal government has increased for 
new Section 8 participants, which has in turn increased Section 
8's share of the HUD budget. This ever-increasing consumption 
of HUD resources by the Section 8 program has concerned both 
critics and advocates of the program. Many fear that unless the 
Section 8 program is reformed, it will soon drain resources 
from other HUD programs or it will require significant 
increased funding notwithstanding diminishing program 
effectiveness.
    In addition to reforming the Section 8 program, H.R. 3700 
remedies a byzantine condominium building approval process 
administered the FHA. The FHA was created by the National 
Housing Act of 1934 and primarily serves as a federal mortgage 
insurance program for loans made by banks and other private 
lenders. H.R. 3700 eases restrictions on the purchase of 
condominiums using an FHA-insured mortgage, which for some can 
be a low-cost housing opportunity in place of purchasing a more 
expensive free-standing home. Specifically, H.R. 3700 updates 
and clarifies the FHA's condominium approval regulations, which 
will provide broader and more affordable financing options 
particularly to low- and moderate income qualified homebuyers.

                                Hearings

    The Committee on Financial Services' Subcommittee on 
Housing and Insurance held a hearing examining matters relating 
to H.R. 3700 on October 21, 2015.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
December 8 and 9, 2015, and ordered H.R. 3700 to be reported 
favorably to the House as amended by a recorded vote of 44 yeas 
to 10 nays (recorded vote no. FC-76), a quorum being present. 
An amendment in the nature of a substitute offered by 
Representative Luetkemeyer was agreed to, as amended as set for 
the below, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. An 
amendment to the amendment in the nature of a substitute 
offered by Representative Luetkemeyer was agreed to be a 
recorded vote of 43 yeas--10 nays (FC-74). An amendment to the 
amendment in the nature of a substitute offered by 
Representative Waters was not agreed to by a recorded vote of 
21 yeas to 32 nays (FC-75). The third and final recorded vote 
in Committee was a motion by Chairman Hensarling to report the 
bill favorably to the House as amended. The motion was agreed 
to by a recorded vote of 44 yeas to 10 nays (Record vote no. 
FC-76), a quorum being present.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 3700 
updates HUD and Rural Housing Service rules to in order to 
increase their effectiveness and better serve program 
beneficiaries and organizations involved in assisting 
beneficiaries.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 28, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3700, the Housing 
Opportunity Through Modernization Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Elizabeth 
Cove Delisle.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 3700--Housing Opportunity Through Modernization Act of 2015

    Summary: H.R. 3700 would amend the United States Housing 
Act of 1937 to change certain aspects of the Department of 
Housing and Urban Development's (HUD's) rental assistance 
programs. The bill would alter calculations of tenant income 
and rent; make households that exceed new income and asset 
limits ineligible for assistance; change requirements for 
adjusting payment standards; and expand eligibility for the 
Family Unification Program. The bill also would make changes to 
Federal Housing Administration (FHA) requirements that affect 
whether buyers of certain condominiums would be eligible to 
receive mortgage insurance from the agency.
    CBO estimates that implementing this legislation would 
reduce spending subject to appropriation by $311 million over 
the 2017-2021 period, assuming appropriations are consistent 
with the estimate.
    Enacting H.R. 3700 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 3700 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2026.
    H.R. 3700 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 3700 is shown in the following table. 
The costs of this legislation fall within budget functions 370 
(housing) and 600 (income security).

----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars--
                                                       ---------------------------------------------------------
                                                          2017     2018     2019     2020     2021    2017-2021
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Changes to Allowances:
Medical Expense Allowance:
    Estimated Authorization Level.....................     -144     -201     -211     -223     -236       -1,015
    Estimated Outlays:................................      -79     -175     -207     -218     -230         -909
Childcare Allowance:
    Estimated Authorization Level.....................      -36      -49      -50      -51      -53         -239
    Estimated Outlays.................................      -20      -43      -49      -51      -52         -215
Elderly and Disabled Allowance:
    Estimated Authorization Level.....................       66       88       88      105      105          452
    Estimated Outlays.................................       36       78       88       97      105          404
Dependent Allowance:
    Estimated Authorization Level.....................       34       46       46       71       71          268
    Estimated Outlays.................................       19       41       46       60       71          237
Eligibility Changes:
Asset Eligibility
    Estimated Authorization Level.....................       10       13       14       14       14           65
    Estimated Outlays.................................        6       12       14       14       14           59
Income Limit in Public Housing:
    Estimated Authorization Level.....................        8       10       11       11       12           52
    Estimated Outlays.................................        4        9       11       11       11           46
Income Determination Changes:
Aid and Attendance Exclusion:
    Estimated Authorization Level.....................        6        6        6        6        6           30
    Estimated Outlays.................................        3        6        6        6        6           27
Imputed Return on Assets:
    Estimated Authorization Level.....................        2        3        3        3        3           14
    Estimated Outlays.................................        1        2        3        3        3           12
Other Housing Assistance Provisions:
Payment Standard for Rent:
    Estimated Authorization Level.....................       24       24       25       26       27          125
    Estimated Outlays.................................       13       24       25       25       26          113
Expansion of the Family Unification Program:
    Estimated Authorization Level.....................        4        6        5        5        6           27
    Estimated Outlays.................................        2        5        6        5        6           24
Moving Assistance:
    Estimated Authorization Level.....................        1        2        2        2        2            8
    Estimated Outlays.................................        1        1        2        2        2            7
Changes to FHA Insurance Requirementsa
Additional FHA Offsetting Collections:
    Estimated Authorization Level.....................      -25      -23      -21      -20      -18         -107
    Estimated Outlays.................................      -25      -23      -21      -20      -18         -107
Additional GNMA Offsetting Collections:
    Estimated Authorization Level.....................       -2       -2       -2       -2       -2          -10
    Estimated Outlays.................................       -2       -2       -2       -2       -2          -10
    Total Changes:
        Estimated Authorization Level.................      -52      -77      -84      -53      -65         -331
        Estimated Outlays.............................      -41      -64      -80      -68      -58         -311
----------------------------------------------------------------------------------------------------------------
Notes:FHA = Federal Housing Administration; GNMA = Government National Mortgage Association. Components may not
  sum to totals because of rounding.
aUsing the fair-value approach, CBO estimates that implementing H.R. 3700 would decrease offsetting collections
  generated by FHA and GNMA by $117 million over the 2017-2021 period, assuming appropriation actions to allow
  FHA to increase the amount of mortgage guarantees it provides by an amount sufficient to meet the increased
  demand for mortgage guarantees under the bill. As shown in the table, using a FCRA approach, CBO estimates
  that implementing H.R. 3700 would increase offsetting collections generated by FHA and GNMA by $117 million
  over the 2017-2021 period.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
3700 will be enacted by the end of fiscal year 2016, spending 
will follow historical outlay patterns, and future 
appropriations will be consistent with the bill. The bill would 
require the changes to income determinations and allowances to 
take effect at the start of a calendar year; CBO expects that 
those changes would take effect beginning in January 2017. In 
cases where the tenant rent contribution would change, CBO 
assumes that appropriations will be adjusted to reflect the 
costs of such changes. In addition, CBO assumes that these 
changes would not affect the funding requirements for about 
350,000 public housing or voucher units covered by Moving-to-
Work agreements because those public housing authorities (PHA) 
are funded pursuant to their agreements, rather than the 
standard administrative formulas.

Background

    Almost 5 million households receive assistance through 
HUD's various rental assistance programs, including the Section 
8 Housing Choice Voucher program, public housing, and other 
project-based subsidy programs. To be eligible for assistance, 
family income must be below either 50 percent or 80 percent of 
the area median income, depending on the program. Each program 
has a minimum percentage of families receiving assistance who 
must be below 30 percent of the area median income.
    Tenants who receive assistance generally pay 30 percent of 
their adjusted monthly income towards rent. Funding from HUD 
covers the difference between what the tenant pays and the full 
rent for the unit (up to certain limits). In the case of public 
housing, HUD provides PHAs with operating and capital funding 
that allows them to subsidize rents.
    Families participating in HUD's rental assistance programs 
have their incomes certified when they enter the program and at 
least annually thereafter in most cases. Current law allows 
various adjustments to income (called allowances) prior to 
calculating a family's rent payment. Families may deduct 
certain child care expenses and elderly and disabled households 
may deduct any medical expenses that exceed 3 percent of 
income. In addition, households may deduct $400 from gross 
income if they include an elderly or disabled member, and all 
households may deduct $480 for each dependent. As a result of 
these deductions, the average adjusted income is approximately 
8 percent lower than the average gross income.

Changes to allowances

    This bill would change how allowances are used to lower 
income to determine housing assistance; on net, CBO estimates 
that implementing these provisions would reduce outlays by $483 
million over the 2017-2021 period, assuming appropriation 
actions consistent with the bill.
    Medical Expense Allowance. Elderly and disabled families 
can currently deduct the amount of unreimbursed medical 
expenses that exceed 3 percent of the family's income. Based on 
data provided by HUD, CBO estimates that 16 percent of families 
claim an average allowance of $1,900 each (for a total of $1.3 
billion). The bill would decrease the amount of medical 
expenses that can be deducted to the amount that exceeds 10 
percent of the family's income. CBO estimates that this change 
would cut the number of families claiming medical expenses by 
40 percent and the total amount claimed by about 45 percent. 
CBO estimates that implementing that provision would reduce 
discretionary spending by $909 million over the 2017-2021 
period.
    Child Care Allowance. Families may deduct any child care 
expenses necessary to enable a member of the family to be 
employed or attend school. Section 102 would only allow 
families to deduct child care expenses that exceed 5 percent of 
their annual family income. Based on data provided by HUD, CBO 
estimates that about 4 percent of families (about 160,000) 
claim child care allowances of about $3,300 each. CBO estimates 
that implementing the new child care allowance would reduce 
outlays by $215 million over the 2017-2021 period.
    Elderly and Disabled Allowance. Section 102 would increase 
the amount that can be deducted by elderly and disabled 
households from $400 to $525, and would inflate that amount 
each year, rounded down to the nearest multiple of $25. Based 
on data provided by HUD, CBO estimates that this deduction is 
claimed by just over half of households receiving assistance. 
About 1 percent of families claiming the allowance would not 
see any additional benefit from the increase because their 
adjusted incomes are already at zero. CBO estimates that 
increasing the elderly and disabled allowance would cost $404 
million over the 2017-2021 period.
    Dependent Allowance. The bill also would increase the 
amount that can be deducted for dependents from $480 to $525, 
and would inflate that amount each year, rounded down to the 
nearest multiple of $25. Based on data provided by HUD, CBO 
estimates that this allowance is currently claimed for about 
3.7 million dependents. About 9 percent of families claiming 
the allowance would not see any additional benefit from the 
increase because their adjusted incomes are already at zero. 
CBO estimates that increasing the dependent allowance would 
cost $237 million over the 2017-2021 period.

Eligibility changes

    H.R. 3700 would affect how household income and assets are 
used to target assistance. On net, CBO estimates that 
implementing these provisions would increase outlays by $105 
million over the 2017-2021 period, assuming appropriation 
actions consistent with those provisions.
    Asset Eligibility. Section 104 would make households with 
more than $100,000 in assets ineligible for assistance, but 
would leave the enforcement of this provision up to the 
discretion of the PHAs and property owners. Assets in 
retirement accounts would be not be subject to the asset limit. 
Based on data provided by HUD, CBO estimates that about 9,000 
families would become ineligible for assistance under the bill. 
Because there is unmet demand for participation in HUD's rental 
assistance programs, CBO expects that families made ineligible 
would be replaced by families on housing authority waiting 
lists. Replacing those newly ineligible families (who have 
higher than average incomes) with families with average income 
would cost the government an additional $1,500 per family in 
2017. CBO estimates that implementing that provision would cost 
$59 million over the 2017-2021 period.
    Income Eligibility. Under current law, families with income 
over 80 percent of the area median income at their initial 
certification are not eligible for assistance. Eligibility 
tests are not done after the initial certification (most 
incomes are certified each year to determine a tenant's rent 
contribution); therefore, a family's income can rise above 80 
percent of the area median and the family can continue to 
receive assistance. Section 103 would require PHAs to terminate 
assistance for households in public housing whose income 
exceeds 120 percent of the median for two consecutive years. 
Alternatively, the PHA could charge the household the market 
rent for their unit.
    Based on data provided by HUD, CBO estimates that 
approximately 2,100 households that reside in public housing 
would lose their subsidy. Because there is unmet demand for 
participation in HUD's rental assistance programs, CBO expects 
that families made ineligible would be replaced by families on 
waiting lists maintained by housing authorities. Replacing 
those newly ineligible families with families with average 
income would cost the government an additional $4,900 per 
family in 2017. CBO estimates that implementing that provision 
would cost $46 million over the 2017-2021 period.

Income determination changes

    Section 102 would require PHAs and property owners to 
change the way they calculate income for determining housing 
assistance. In total, those changes would increase spending 
subject to appropriation by $39 million over the 2017-2021 
period, assuming appropriation of the necessary amounts.
    Aid and Attendance Exclusion. Section 102 would exclude 
federal pensions of veterans who receive Aid and Attendance 
(A&A) from the calculations of adjusted income. Doing so would 
reduce affected veterans' rent contributions, thereby 
increasing the cost of HUD's assistance payments. Based on data 
from the Government Accountability Office, CBO estimates that 
about 6 percent of households receiving assistance include a 
veteran. Based on information from the Department of Veterans 
Affairs, CBO estimates that less than 1 percent (about 1,600) 
of those households include a veteran receiving A&A and that 
those payments average about $16,000 per year. Excluding those 
amounts from calculations of adjusted income would lower 
tenants' rent contributions by about $6 million per year (once 
fully phased in). CBO estimates that implementing that 
provision would cost $27 million over the 2017-2021 period.
    Imputed Return on Assets. Under current law, housing 
authorities and property owners calculate a tenant's imputed 
rate of return on any assets over $5,000 by using an interest 
rate determined by HUD. If the imputed return on assets is 
greater than actual income from assets, the imputed return is 
included in the family's income. Section 102 would increase the 
threshold for calculating imputed returns to $50,000. Based on 
data provided by HUD, CBO estimates that about 1 percent of 
families (about 40,000) have imputed income from assets that 
would be excluded from their total income under the bill; asset 
income counted for determining housing assistance would 
decrease by about $8 million per year. CBO estimates that 
excluding the imputed return on assets with a value of less 
than $50,000 would cost $12 million over the 2017-2021 period.

Other housing assistance provisions

    Payment Standard for Rent. Under current law, PHAs 
generally must set a payment standard that is between 90 and 
110 percent of the fair market rent. The standard, in 
combination with a household's income, determines the amount of 
the housing assistance payment (HAP) that the PHA pays to the 
landlord. If the fair market rent in an area decreases, a PHA 
that has set its payment standard at 110 percent would have to 
decrease the HAP. Section 107 would allow a PHA to maintain the 
HAP at the prior year's amount when the fair market rent in an 
area decreases. Based on data from HUD, CBO estimates that 
implementing this provision would cost $113 million over the 
2017-2021 period.
    Expansion of the Family Unification Program. Section 110 
would make adults ages 22 to 24 who left foster care after age 
16 eligible for Family Unification Program vouchers. Under 
current law, only adults ages 18 to 21 who left foster care 
after age 16 are eligible for those vouchers. In 2015, the 
Congress appropriated about $6 million for that program. Based 
on information from HUD, the department of Health and Human 
Services, and studies on outcomes of adults that were 
previously in foster care, CBO estimates that the Family 
Unification Program served about 0.4 percent of eligible adults 
in 2015. Assuming that the program serves the same proportion 
of eligible adults ages 22 to 24 and adjusting for anticipated 
inflation, CBO estimates that implementing that section would 
cost $24 million over the 2017-2021 period.
    Moving Assistance. Under current law, voucher payments that 
are withheld because a unit failed inspection are retained by 
the PHA; HUD's future payments to the PHA are then reduced by 
the amount withheld. Section 101 would allow PHAs to use 
voucher payments that are withheld because a unit failed 
inspection to pay for the relocation costs of the tenant that 
occupies the unit. Based on data provided by HUD and 
information provided by PHAs, CBO expects that about 1,000 
households would receive assistance to move each year and that 
PHAs would provide about $1,500 per household. Thus, CBO 
estimates that implementing this provision would cost $7 
million over the 2017-2021 period.

Changes to FHA insurance requirement\1\
---------------------------------------------------------------------------

    \1\The budgetary effects of guarantees by FHA and the Government 
National Mortgage Association (GNMA) are classified as discretionary 
because new guarantees under those programs are subject to annual 
appropriation actions. Under current law, the budgetary effects of 
these activities are calculated under the Federal Credit Reform Act 
(FCRA). As required in S. Con. Res. 11, the Concurrent Resolution on 
the Budget for Fiscal Year 2016, CBO has also prepared a cost estimate 
for this section of H.R. 3700 using a fair-value approach to estimating 
the impact on FHA and GNMA. That alternative is discussed under the 
heading, ``Additional Information.''
---------------------------------------------------------------------------
    H.R. 3700 would change certain requirements that determine 
whether buyers of condominiums are eligible for FHA mortgage 
guarantees. The bill would reduce the amount of units in a 
condominium complex that must be owner occupied to qualify for 
an FHA guarantee from 50 percent to 35 percent. The bill also 
would eliminate a prohibition on providing FHA guarantees for 
units that are subject to certain fees that are assessed to 
owners who sell their condominiums.
    Based on information provided by FHA and industry 
representatives, CBO estimates that implementing H.R. 3700 
would increase offsetting collections generated by FHA and the 
Government National Mortgage Association (GNMA) by $117 million 
over the 2017-2021 period, assuming appropriation actions to 
allow FHA to increase the amount of mortgage guarantees it 
provides by an amount sufficient to meet the increased demand 
for mortgage guarantees under the bill. That estimate also 
accounts for uncertainty regarding administrative actions that 
may be taken by FHA under current law.
    Additional FHA Offsetting Collections. CBO estimates that, 
over the 2017-2021 period, implementing H.R. 3700 would 
increase offsetting collections for FHA's single-family program 
by $214 million. Those additional offsetting receipts would 
stem from an increase in the volume of FHA loan guarantees. The 
increase in the volume of guarantees would occur because 
changes to FHA rules under the bill would allow additional 
condominium buyers to qualify for FHA guarantees.
    CBO estimates that under current law FHA will guarantee 
about $1 trillion in new mortgages over the 2017-2021 period. 
We estimate that, over the same period, enacting H.R. 3700 
would increase mortgage guarantees from FHA's single-family 
program by roughly $8 billion--an increase of about 0.75 
percent. The combination of guarantee fees charged by FHA and 
estimated defaults and mortgage prepayments over the next five 
years yields an estimated average subsidy rate for FHA's 
guarantees of -2.7 percent.\2\ Multiplying that subsidy rate by 
the additional volume of mortgage guarantees expected to be 
offered by FHA under the bill would result in additional 
estimated offsetting collections of $214 million over the 2017-
2021 period. Because CBO estimates that there is a 50 percent 
chance FHA will make similar rule changes under current law, we 
estimate that new offsetting collections under the bill would 
total $107 million over that period.
---------------------------------------------------------------------------
    \2\A negative subsidy cost for a federal credit program can occur 
if the net present value of upfront and annual fees charged for a loan 
guarantee are greater than the estimated cost of a default on that 
loan.
---------------------------------------------------------------------------
    Additional GNMA Offsetting Collections. Through its 
Mortgage-Backed Securities (MBS) program, GNMA is responsible 
for guaranteeing securities backed by pools of mortgages that 
are insured by federal agencies such as FHA. In exchange for a 
fee paid by lenders or issuers of the securities, GNMA 
guarantees the timely payment of scheduled principal and 
interest due on the pooled mortgages that back those 
securities. Because the value of the fees collected by GNMA is 
estimated to exceed the cost of loan defaults in each year, CBO 
estimates that the GNMA MBS program will have an average 
subsidy rate of -0.28 percent over the 2017-2021 period, 
resulting in net receipts collections to the federal 
government.
    CBO estimates that each year about 90 percent of the new 
mortgage loan guarantees made by FHA would be included in 
GNMA's MBS program. We also estimate that changes in FHA's 
requirements for loan guarantees on condominiums under the bill 
would increase FHA's loan-guarantee volume by $8 billion over 
the next 5 years. Multiplying 90 percent of that amount by the 
subsidy rate (-0.28 percent) results in additional offsetting 
collections by GNMA's MBS program totaling $20 million over the 
2017-2021 period. Because CBO estimates that there is a 50 
percent chance that FHA will make similar rule changes under 
current law, we estimate that implementing the bill would 
increase offsetting collections from GNMA's MBS program by $10 
million over that period.
    Additional information: This section provides additional 
information on the estimated effects of title III of H.R. 3700 
on the fair-value costs of the FHA single-family, FHA 
multifamily, and GNMA programs. CBO is required to provide this 
information by S. Con. Res. 11. Under current law, the costs of 
those programs are measured in the budget according to the 
procedures established in the Federal Credit Reform Act (FCRA).
    The fair-value approach is an alternative to the approach 
specified in FCRA. Both the FCRA approach and the fair-value 
approach rely on the same projections of future cash flows for 
the guarantee programs, and both approaches take into account 
the lifetime cost of the new guarantees made in a given year 
(including the expected cost of defaults, net of fees 
collected). The fair-value estimates differ from the FCRA 
estimates by recognizing that the government's assumption of 
financial risk has a cost that exceeds the average amount of 
losses that would be expected from defaults. In practice, the 
main difference between FCRA estimates and fair-value estimates 
is the discount rates used to calculate the present value of 
estimated future guarantee costs and receipts.
    Using the fair-value approach, CBO estimates that 
implementing H.R. 3700 would decrease offsetting collections 
generated by FHA and GNMA by $117 million over the 2017-2021 
period, assuming appropriation actions to allow FHA to increase 
the amount of mortgage guarantees it provides by an amount 
sufficient to meet the increased demand for mortgage guarantees 
under the bill. Using a FCRA approach, CBO estimates that 
implementing H.R. 3700 would increase offsetting collections 
generated by FHA and GNMA by $117 million over the 2017-2021 
period.
    Pay-As-You-Go considerations: None.
    Increase in long term direct spending and deficits: CBO 
estimates that enacting H.R. 3700 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2026.
    Intergovernmental and private-sector impact: H.R. 3700 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. State, local, and tribal governments would 
benefit from housing assistance activities authorized in the 
bill. Any costs those governments incur to comply with grant 
requirements would result from conditions of federal 
assistance.
    Estimate prepared by: Federal costs: Elizabeth Cove Delisle 
(for public housing) and Jeff LaFave (for FHA); Impact on 
state, local, and tribal governments: J'nell Blanco Suchy; 
Impact on the private sector: Amy Petz.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 3700 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 3700 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 3700 contains four directed 
rulemakings.

             Section-by-Section Analysis of the Legislation


        TITLE I--SECTION 8 RENTAL ASSISTANCE AND PUBLIC HOUSING

Section 101. Inspection of dwelling units

    The section requires that a public housing authority (PHA) 
must conduct an initial inspection prior to any Section 8 
voucher housing assistance payment being made to a tenant. If 
the unit has been inspected within the previous 24 months 
through an alternative inspection method under a Federal, 
State, or local housing program (including the HOME and Low-
Income Housing Tax Credit programs), the tenant may occupy the 
unit for an interim period until the PHA determines, through an 
inspection, that the unit meets the housing quality standards. 
In the event that the unit does not meet the housing quality 
standards as a result of non-life-threatening conditions, the 
tenant may occupy the unit and the unit's owner has 30 days to 
correct the deficiency.
    A PHA can determine that a dwelling unit is in non-
compliance if (1) it fails inspection, (2) the PHA notifies the 
unit's owner of its failure to comply, and (3) the failure to 
comply is not corrected within 24 hours for a life-threatening 
condition and within 30 days for a non-life-threatening 
condition. Further, a PHA may withhold assistance payments 
during the correction period for life-threatening and non-life-
threatening conditions and shall abate all assistance amounts 
if the owner does not correct the deficiency during the 
appropriate correction period. The PHA shall recommence housing 
assistance payments to the owner once the deficiency is 
corrected.
    If a PHA abates assistance payments to the owner of the 
unit for failure to comply with the housing quality standards, 
the PHA must (1) notify the tenant that such abatement has 
commenced and that the tenant will have to move if the dwelling 
unit is not brought into compliance within 60 days and (2) 
allow the tenant to move to another unit and transfer the 
rental assistance to that unit. The owner of the unit may not 
terminate the tenant's lease if the PHA withholds or abates 
rental assistance payments. If the PHA abates assistance, the 
tenant may terminate the lease by notifying the owner.
    A PHA shall terminate the housing assistance payments 
contract for the unit if during the abatement period the owner 
does not correct the deficiency within 60 days after the 
determination of non-compliance. Once a contract is terminated, 
the PHA shall provide the affected tenant at least 90 days to 
lease a new unit. If the family is unable to lease a new unit, 
the PHA shall provide the tenant a preference for occupancy in 
a unit that is owned or operated by the PHA. In addition, the 
PHA may provide additional assistance to the tenants in finding 
a new residence, including payments of security deposits for 
the new unit and moving expenses. If the PHA determines that 
any damage to the unit that results in the unit's failure to 
comply with housing quality standards is due to tenant-caused 
damages, the PHA does not have to provide relocation assistance 
to the tenant or exonerate the tenant from liability for such 
damages.
    These provisions would take effect once HUD issues a notice 
or regulations regarding implementation.

Section 102. Income reviews

    This section provides that income reviews for assisted 
families in dwelling units assisted under the U.S. Housing Act 
of 1937 shall be made upon the initial provision of housing 
assistance for the family and annually thereafter, unless the 
family's adjusted annual income or deductions decrease by 10 
percent.
    In determining family income for initial occupancy, the PHA 
or owner shall use the income of the family as estimated by the 
agency or owner for the upcoming year. In determining family 
income for annual reviews, a PHA or owner shall use the prior 
year's income but take into consideration any redetermination 
of income during the prior year. In addition, HUD shall, in 
consultation with other appropriate agencies, develop 
procedures to enable PHAs and owners to have access to income 
determinations for families made by other means-tested Federal 
programs that have comparable reliability. Also, no later than 
six months after the bill is enacted, the Secretary shall 
certify for Congress that the hardship provisions currently in 
statute for minimum rents are enforced and will continue to 
provide due consideration to the hardship circumstances of 
persons receiving housing assistance.
    In addition, this section defines ``income'' with respect 
to assisted families as income received from all sources by 
each member of the household who is 18 years or older, plus 
unearned income by each dependent who is less than 18 years 
old. Such term for income includes recurring gifts and 
receipts, actual income from assets, and profit or loss from a 
business. Excluded amounts for the definition of income are: 
(1) any imputed return on assets below $50,000; (2) any amounts 
that would be eligible for exclusion under section 1613(a)(7) 
of the Social Security Act; (3) deferred disability benefits of 
the Department of Veterans Affairs; (4) expenses related to aid 
and attendance to veterans who are in need of regular aid and 
attendance; and (5) any exclusions from income as established 
by HUD. The income definition does not include earned income of 
any dependent who is attending school or any scholarship 
amounts related to school attendance. Income shall be 
determined without regard to any amounts in or from any 
Coverdell education savings accounts or any qualified tuition 
program under section 529 of the Internal Revenue Code of 1986. 
The HUD Secretary may not require a public housing agency or 
owner to maintain records of any amounts excluded from income.
    This section provides the following deductions for the 
purposes of defining an assisted family's `adjusted income:' 
(1) $525 for a family that is elderly or disabled; (2) $525 for 
each dependent; (3) any amount that exceeds 5 percent of annual 
family income that is used to pay for unreimbursed child care 
expenses; and (4) any amount by which 10 percent of annual 
family income is exceeded by the sum of unreimbursed health and 
medical care expenses, unreimbursed attendant care, and 
auxiliary apparatus expenses. The Secretary of HUD may provide 
hardship exemptions for impacted families by regulation (such 
regulations shall include a requirement to notify tenants 
regarding any changes to the determination of adjusted income) 
and shall establish procedures to ensure that additional 
deductions as determined by the PHA does not materially 
increase Federal expenditures. This section gives the PHA the 
ability to establish a voucher payment standard of not more 
than 120 percent of the fair market rent for a person with a 
disability.
    The section also provides conforming amendments for 
enhanced vouchers and project-based housing. In addition, if 
the Secretary of HUD determines that the income reviews under 
this section results in a material and disproportionate 
reduction in the rental income of certain PHAs, the Secretary 
may make appropriate adjustments in the formula income for such 
a reduction. This section requires that HUD submit a report to 
Congress on the changes made by this provision.

Section 103. Limitation on public housing tenancy for over-income 
        families

    Under this provision, for any tenant determined to have 
income in excess of 120 percent of the area median income for 
two consecutive years, a PHA would be required either to (1) 
charge the tenant either the greater of the fair market rent or 
the amount of taxpayer subsidy for the unit, or (2) terminate 
the tenancy of such tenant not later than 6 months after the 
tenant has exceeded the income limit for two years, as 
determined by the PHA. The provision gives the Secretary of HUD 
the ability to establish income limitations higher or lower 
than 120 percent of median income for those areas where there 
are unique local conditions, e.g. high cost or very-low-income 
rental market areas.

Section 104. Limitation on eligibility for assistance based on assets

    This section specifies that any dwelling unit assisted 
under the U.S. Housing Act of 1937 may not be rented and 
assistance may not be provided to any family whose net family 
assets exceed $100,000, as adjusted for inflation, or a family 
who has a present ownership interest in real property that is 
suitable for occupancy by the family as a residence. Victims of 
domestic violence, individuals using housing assistance for 
homeownership opportunities, or a family that is offering such 
property for sale are exempt from the limitations in this 
section.
    Net family assets is defined as the net cash value of all 
assets after deducting reasonable costs that would be incurred 
in disposing of real property, savings, stocks, bonds, and 
other forms of capital investment. The term `net family assets' 
does not include: (1) the value of personal property; (2) the 
value of any retirement account; (3) real property for which 
the family does not have the effective legal authority to sell; 
(4) any amounts recovered in any civil action or settlement 
based on a claim of malpractice, negligence that resulted in a 
family member being disabled; and (5) other exclusions the HUD 
Secretary may establish.
    In the cases in which a trust fund has been established and 
the trust is not revocable by any member of the family, the 
value of the trust fund shall not be considered an asset of the 
family if the fund continues to be held in trust. When 
recertifying family income with respect to families residing in 
public housing units, the PHA may chose not to enforce the 
asset limitation in this provision.

Section 105. Units owned by public housing agencies

    This provision defines the types of units owned by a PHA to 
be any dwelling unit that is located in a project that is owned 
by the PHA, by an entity wholly controlled by the PHA, or by a 
limited liability company or limited partnership where the PHA 
holds a controlling interest. Units will not be considered 
owned by a PHA if the agency only holds an interest in the 
ground lease, holds a security interest under a mortgage or 
deed of trust on the unit or holds a non-controlling interest 
in an entity that owns the unit.

Section 106. PHA project-based assistance

    This section authorizes a PHA to attach vouchers to an 
apartment, rather than a tenant, a.k.a. project base voucher 
(PBV), up to a limit of 20 percent of its authorized voucher 
allocation. It also enables a PHA to provide up to an 
additional 10 percent of its authorized vouchers to create 
units targeting homeless individuals and families, veterans, 
elderly households or households with persons with 
disabilities, or units in areas where vouchers are difficult to 
use due to market conditions. Any units previously subject to 
federally required rent restrictions or receiving another type 
of long-term housing subsidy provided by the HUD Secretary 
shall not count toward the 20 percent limitation.
    The section also allows a PHA to provide PBV assistance to 
properties where the assistance does not exceed 25 percent of 
the units in a property or 25 units, whichever is greater. 
These limits would not apply to units that are exclusively made 
available to elderly families or to households eligible for 
supportive services. Further, in areas where vouchers are 
difficult to use, or in census tracts with a poverty rate of 20 
percent or lower, PHAs may provide PBV assistance to up to 40 
percent of units in a property. The limitations on the share of 
units in a property that may have project-based assistance 
would only apply to newly assisted properties. Units of PBV 
assistance that are attached to units previously subject to 
federally required rent restrictions or receiving other 
project-based assistance would be exempted from this cap.
    In addition, this section extends the permissible term of 
PBV contracts from 15 to 20 years, and in the event of 
insufficient funding would require PHAs to prioritize payments 
for units subject to a PBV contract if other cost-saving 
measures are available. The PHA and the owner may add eligible 
units within the same project to a housing assistance payments 
contract at any time during the term. In addition, the 
provision further states that an agency may enter into a 
housing assistance payments contract with an owner for housing 
under construction or recently constructed. This section 
extends tenant-based assistance for households to continue to 
reside in the property or to choose to move in the event the 
PBV contract is not extended or is terminated.
    This section allows PHAs and owners to agree to limit the 
amount of a requested rent increase to the operating cost 
adjustment factor (OCAF) permitted for most properties with HUD 
section 8 contracts. It also allows owners to request an 
additional adjustment periodically subject to rent 
reasonableness.
    In addition, the section allows residents to place their 
names on site-specific waiting lists managed by owners, in 
addition to the waiting list established by the PHA. It allows 
a PHA to provide PBV assistance to improve, develop, or replace 
a public housing property or property that it controls or has 
an ownership interest in without having to use a competitive 
process, so long as it notifies residents and the public 
through its annual plan.
    This section clarifies that PHAs may use project-base HUD-
Veterans Affairs Supportive Housing (HUD-VASH) and Family 
Unification Program (FUP) vouchers under the same policies and 
procedures applicable to general purpose vouchers. This change 
will facilitate the use of these vouchers--which provide stable 
affordable homes for homeless veterans and families involved 
with the child welfare system--for supportive housing and in 
areas where there is a shortage of suitable rental units.

Section 107. Establishment of fair market rent

    This provision modifies the public notice requirements for 
proposed Fair Market Rents (FMRs) by moving the notifications 
to the HUD-designated website with notice of the availability 
of the data published in the Federal Register and eliminating 
publication in the Federal Register. HUD would continue to be 
required to publish in the Federal Register any proposed 
substantial methodological changes in advance and allow 
interested parties to request changes after final FMRs are 
published. Housing agencies are permitted to request exception 
payment standards subject to HUD established criteria. This 
provision also provides that a PHA would not be required to 
reduce any payment standard for a unit based on the fair market 
rent determination if the family occupying the unit before the 
FMR analysis continues to reside in the unit.

Section 108. Collection of utility data

    This provision requires HUD to collect and publish utility 
consumption data to assist in establishment of tenant-paid 
utility allowances by PHAs, provided the data can be collected 
in a cost effective manner. HUD must also establish guidelines 
for use of the data in a manner that avoids unnecessary 
administrative burdens for PHAs.

Section 109. Public housing Capital and Operating Funds

    This provision permits PHAs to establish a replacement 
reserve for capital fund activities. At the discretion of the 
Secretary of HUD, a PHA may hold in the replacement reserve 
funds originating from additional sources. Further, a PHA may 
hold, in its replacement reserve, only the amounts necessary to 
satisfy the anticipated capital needs of properties in its 
public housing portfolio. By regulation, the Secretary of HUD 
may establish a maximum reserve level that takes into 
consideration the size of the PHA's public housing portfolio. 
In establishing the replacement reserve, the Secretary of HUD 
may allow the PHA to transfer more than 20 percent of its 
operating funds into its replacement reserve. This provision 
also gives PHAs the discretion to use up to 20 percent of their 
operating funds for eligible capital fund activities, provided 
that the use is outlined in the PHA's annual plan.

Section 110. Family Unification Program

    This provision extends the period for which a young adult, 
recently aging out of foster care, can use a family unification 
housing voucher from 18 to 36 months and increases the maximum 
age for an individual using a Family Unification Program (FUP) 
voucher to 24 years of age. This provision also states that the 
HUD Secretary shall, beginning 180 days after enactment, issue 
guidance to improve coordination between PHAs and public child 
welfare agencies in carrying out FUP. It requires that HUD 
shall provide guidance on: (1) identifying eligible recipients 
for assistance; (2) coordinating with other local youth and 
family homeless assistance providers; (3) implementing housing 
strategies to assist eligible families and youth; (4) aligning 
system goals to improve outcomes for families and youth; and 
(5) identifying resources that are available to eligible 
families and youth to provide supportive services.

                        TITLE II--RURAL HOUSING

Section 201. Delegation of guaranteed rural housing loan approval

    This provision amends Section 502(h) of the Housing Act of 
1949 to authorize the Rural Housing Service single family 
housing guaranteed loan program (GLP) to delegate loan approval 
authority to preferred lenders, in accordance with standards 
established by the Secretary of Agriculture.

           TITLE III--FHA MORTGAGE INSURANCE FOR CONDOMINIUMS

Section 301. Modification of FHA requirements for mortgage insurance 
        for condominiums

    This section requires the Secretary of HUD to streamline 
the FHA's condominium project certification requirements so 
that re-certification is substantially less burdensome than 
original certifications. More specifically, the Secretary must 
consider lengthening the time between certification and re-
certifications. Also, this provision allows decisions on 
exemptions to current FHA commercial space requirements to be 
made at a HUD field office, and requires that any such 
exemption take into account factors relating to the local 
economy and specific condominium project. No later than 90 days 
after the date of enactment, the Secretary of HUD shall issue 
regulations to implement the commercial space exemption 
requirements.
    In addition, this section states that existing standards of 
the Federal Housing Finance Agency (FHFA) relating to 
encumbrances under private transfer fee covenants for Fannie 
Mae and Freddie Mac shall apply to FHA insured condominium 
mortgages. If the FHFA changes its existing standards for those 
private transfer fee covenants after the date of enactment of 
this provision, the Secretary of HUD shall adopt FHFA's 
changes.
    This section also requires that the Secretary of HUD shall, 
by rule, notice, or mortgagee letter, issue guidance regarding 
the percentage of units that must be occupied by the owners in 
order for a condominium project to be acceptable to HUD for 
insurance of a mortgage within such condominium property. If 
the Secretary of HUD fails to issue guidance before the 
expiration of the 90 day period, the following provisions shall 
apply: (1) at least 35 percent of all family units must be 
occupied by the owners who intend to meet such occupancy 
requirement, and (2) the Secretary of HUD may increase the 35 
percent requirement to a condominium project on a project-by-
project or regional basis, provided that in determining such 
percentage for a project shall consider factors relating to the 
economy for the locality in which such project is located.

      TITLE IV--HOUSING REFORMS FOR THE HOMELESS AND FOR VETERANS

Section 401. Definition of geographic area for Continuum of Care 
        Program

    This provision requires the Secretary of HUD to define the 
term ``geographic area'' for purposes of the Continuum of Care 
program.

Section 402. Inclusion of public housing agencies and local 
        redevelopment authorities in emergency solutions grants

    This provision expands the scope of the Emergency Solutions 
Grants (ESGs) distribution to PHAs and Local Redevelopment 
Authorities (LRAs) so that any state receiving ESG funds can 
distribute all or a portion of such assistance to private 
nonprofits, PHAs or LRAs if the local government for the 
locality in which the project is located approves the project.

Section 403. Special assistant for Veterans Affairs in the Department 
        of Housing and Urban Development

    This provision requires HUD to transfer the position of 
Special Assistant for Veterans Affairs from the HUD Office of 
the Deputy Assistant Secretary for Special Needs to the Office 
of the Secretary. There, the Special Assistant would be 
responsible for ensuring that veterans have fair access to HUD 
housing and homeless assistance programs, coordinate all HUD 
programs and activities relating to veterans, and serve as a 
HUD liaison with the Department of Veterans Affairs.

Section 404. Annual supplemental report on Veterans homelessness

    This provision requires the Secretaries of HUD and Veterans 
Affairs, in coordination with the U.S. Interagency Council on 
Homelessness, to submit annual reports to particular 
congressional committees regarding: the number of veterans 
provided assistance by HUD programs, coordination of services 
for veterans, and cost of administering programs to veterans.

                         TITLE V--MISCELLANEOUS

Section 501. Inclusion of Disaster Housing Assistance Program in 
        certain fraud and abuse prevention measures

    This provision requires that all recipients of HUD Disaster 
Assistance funds meet McKinney-Vento income verification and 
matching requirements.

Section 502. Energy efficiency requirement under Self-Help Ownership 
        Opportunity program

    This provision prohibits the Secretary of HUD from 
requiring that any dwelling in the Self-Help Ownership 
Opportunity Program (SHOP) be required to meet any energy 
efficiency standards other than those contained in the 
Cranston-Gonzalez National Affordable Housing Act.

Section 503. Data exchange standardization for improved 
        interoperability

    This provision streamlines data exchange standards to 
improve interoperability between state and federal agencies by 
requiring the Secretary of HUD to, through consultation, create 
data exchange standards such that agencies, such as HUD and 
RHS, are using the same data sets when administering and 
determining eligibility for its respective means-tested housing 
programs. The Secretary of HUD must issue a proposed rule 
within two years after enactment to identify federally-required 
data exchanges, specify the timing of exchanges to be 
standardized, address factors used in determining whether and 
when to standardize data exchanges, specify state 
implementation options, and outline future milestones.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                   UNITED STATES HOUSING ACT OF 1937

TITLE I--GENERAL PROGRAM OF ASSISTED HOUSING

           *       *       *       *       *       *       *


                      rental payments; definitions

  Sec. 3. (a)(1) Dwelling units assisted under this Act shall 
be rented only to families who are low-income families at the 
time of their initial occupancy of such units. Reviews of 
family income shall be made [at least annually] pursuant to 
paragraph (6) . Except as provided in paragraph (2) and subject 
to the requirement under paragraph (3), a family shall pay as 
rent for a dwelling unit assisted under this Act (other than a 
family assisted under section 8(o) or (y) or paying rent under 
section 8(c)(3)(B)) the highest of the following amounts, 
rounded to the nearest dollar:
          (A) 30 per centum of the family's monthly adjusted 
        income;
          (B) 10 per centum of the family's monthly income; or
          (C) if the family is receiving payments for welfare 
        assistance from a public agency and a part of such 
        payments, adjusted in accordance with the family's 
        actual housing costs, is specifically designated by 
        such agency to meet the family's housing costs, the 
        portion of such payments which is so designated.
  (2) Rental payments for public housing families.--
          (A) Authority for family to select.--
                  (i) In general.-- A family residing in a 
                public housing dwelling shall pay as monthly 
                rent for the unit the amount determined under 
                clause (i) or (ii) of subparagraph (B), subject 
                to the requirement under paragraph (3) 
                (relating to minimum rents). Each public 
                housing agency shall provide for each family 
                residing in a public housing dwelling unit 
                owned, assisted, or operated by the agency to 
                elect annually whether the rent paid by such 
                family shall be determined under clause (i) or 
                (ii) of subparagraph (B). A public housing 
                agency may not at any time fail to provide both 
                such rent options for any public housing 
                dwelling unit owned, assisted, or operated by 
                the agency.
                  (ii) Authority to retain flat and ceiling 
                rents.-- Notwithstanding clause (i) or any 
                other provision of law, any public housing 
                agency that is administering flat rents or 
                ceiling rents pursuant to any authority 
                referred to in section 519(d) of the Quality 
                Housing and Work Responsibility Act of 1998 
                before the effective day of such Act may 
                continue to charge rent in accordance with such 
                rent provisions after such effective date, 
                except that the agency shall provide for 
                families residing in public housing dwelling 
                units owned or operated by the agency to elect 
                annually whether to pay rent under such 
                provisions or in accordance with one of the 
                rent options referred to in subparagraph (A).
          (B) Allowable rent structures.--
                  (i) Flat rents.-- Each public housing agency 
                shall establish, for each dwelling unit in 
                public housing owned or operated by the agency, 
                a flat rental amount for the dwelling unit, 
                which--
                          (I) shall not be lower than 80 
                        percent of--
                                  (aa) the applicable fair 
                                market rental established under 
                                section 8(c) of this Act; or
                                  (bb) at the discretion of the 
                                Secretary, such other 
                                applicable fair market rental 
                                established by the Secretary 
                                that the Secretary determines 
                                more accurately reflects local 
                                market conditions and is based 
                                on an applicable market area 
                                that is geographically smaller 
                                than the applicable market area 
                                used for purposes of the 
                                applicable fair market rental 
                                under section 8(c);
                                except that a public housing 
                                agency may apply to the 
                                Secretary for exception 
                                allowing for a flat rental 
                                amount for a property that is 
                                lower than the amount otherwise 
                                determined pursuant to item 
                                (aa) or (bb) and the Secretary 
                                may grant such exception if the 
                                Secretary determines that the 
                                fair market rental for the 
                                applicable market area pursuant 
                                to item (aa) or (bb) does not 
                                reflect the market value of the 
                                property and the proposed lower 
                                flat rental amount is based on 
                                a market analysis of the 
                                applicable market and complies 
                                with subclause (II) and
                          (II) shall be designed in accordance 
                        with subparagraph (D) so that the rent 
                        structures do not create a disincentive 
                        for continued residency in public 
                        housing by families who are attempting 
                        to become economically self-sufficient 
                        through employment or who have attained 
                        a level of self-sufficiency through 
                        their own efforts.
                If a new flat rental amount for a dwelling unit 
                will increase a family's existing rental 
                payment by more than 35 percent, the new flat 
                rental amount shall be phased in as necessary 
                to ensure that the family's existing rental 
                payment does not increase by more than 35 
                percent annually. The preceding sentence shall 
                not be construed to require establishment of 
                rental amounts equal to 80 percent of the fair 
                market rental in years when the fair market 
                rental falls from the prior year.
                  (ii) Income-based rents.--
                          (I) In general.-- The monthly rental 
                        amount determined under this clause for 
                        a family shall be an amount, determined 
                        by the public housing agency, that does 
                        not exceed the greatest of the amounts 
                        (rounded to the nearest dollar) 
                        determined under subparagraphs (A), 
                        (B), and (C) of paragraph (1). This 
                        clause may not be construed to require 
                        a public housing agency to charge a 
                        monthly rent in the maximum amount 
                        permitted under this clause.
                          (II) Discretion.-- Subject to the 
                        limitation on monthly rental amount 
                        under subclause (I), a public housing 
                        agency may, in its discretion, 
                        implement a rent structure under this 
                        clause requiring that a portion of the 
                        rent be deposited to an escrow or 
                        savings account, imposing ceiling 
                        rents, or adopting income exclusions 
                        (such as those set forth in section 
                        3(b)(5)(B)), or may establish another 
                        reasonable rent structure or amount.
          (C) Switching rent determination methods because of 
        hardship circumstances.-- Notwithstanding subparagraph 
        (A), in the case of a family that has elected to pay 
        rent in the amount determined under subparagraph 
        (B)(i), a public housing agency shall immediately 
        provide for the family to pay rent in the amount 
        determined under subparagraph (B)(ii) during the period 
        for which such election was made upon a determination 
        that the family is unable to pay the amount determined 
        under subparagraph (B)(i) because of financial 
        hardship, including--
                  (i) situations in which the income of the 
                family has decreased because of changed 
                circumstances, loss of reduction of employment, 
                death in the family, and reduction in or loss 
                of income or other assistance;
                  (ii) an increase, because of changed 
                circumstances, in the family's expenses for 
                medical costs, child care, transportation, 
                education, or similar items; and
                  (iii) such other situations as may be 
                determined by the agency.
          (D) Encouragement of self-sufficiency.-- The rental 
        policy developed by each public housing agency shall 
        encourage and reward employment and economic self-
        sufficiency.
          (E) Income reviews.-- Notwithstanding the second 
        sentence of paragraph (1), in the case of families that 
        are paying rent in the amount determined under 
        subparagraph (B)(i), the agency shall review the income 
        of such family not less than once every 3 years.
  (3) Minimum rental amount.--
          (A) Requirement.-- Notwithstanding paragraph (1) of 
        this subsection, the method for rent determination 
        elected pursuant to paragraph (2)(A) of this subsection 
        by a family residing in public housing, section 8(o)(2) 
        of this Act, or section 206(d) of the Housing and 
        Urban-Rural Recovery Act of 1983 (including paragraph 
        (5) of such section), the following entities shall 
        require the following families to pay a minimum monthly 
        rental amount (which amount shall include any amount 
        allowed for utilities) of not more than $50 per month, 
        as follows:
                  (i) Each public housing agency shall require 
                the payment of such minimum monthly rental 
                amount, which amount shall be determined by the 
                agency, by--
                          (I) each family residing in a 
                        dwelling unit in public housing by the 
                        agency;
                          (II) each family who is assisted 
                        under the certificate or moderate 
                        rehabilitation program under section 8; 
                        and
                          (III) each family who is assisted 
                        under the voucher program under section 
                        8, and the agency shall reduce the 
                        monthly assistance payment on behalf of 
                        such family as may be necessary to 
                        ensure payment of such minimum monthly 
                        rental amount.
                  (ii) The Secretary shall require each family 
                who is assisted under any other program for 
                rental assistance under section 8 to pay such 
                minimum monthly rental amount, which amount 
                shall be determined by the Secretary.
          (B) Exception for hardship circumstances.--
                  (i) In general.-- Notwithstanding 
                subparagraph (A), a public housing agency (or 
                the Secretary, in the case of a family 
                described in subparagraph (A)(ii)) shall 
                immediately grant an exemption from application 
                of the minimum monthly rental under such 
                subparagraph to any family unable to pay such 
                amount because of financial hardship, which 
                shall include situations in which (I) the 
                family has lost eligibility for or is awaiting 
                an eligibility determination for a Federal, 
                State, or local assistance program, including a 
                family that includes a member who is an alien 
                lawfully admitted for permanent residence under 
                the Immigration and Nationality Act who would 
                be entitled to public benefits but for title IV 
                of the Personal Responsibility and Work 
                Opportunity Reconciliation Act of 1996; (II) 
                the family would be evicted as a result of the 
                imposition of the minimum rent requirement 
                under subparagraph (A); (III) the income of the 
                family has decreased because of changed 
                circumstance, including loss of employment; 
                (IV) a death in the family has occurred; and 
                (V) other situations as may be determined by 
                the agency (or the Secretary, in the case of a 
                family described in subparagraph (A)(ii)).
                  (ii) Waiting period.-- If a resident requests 
                a hardship exemption under this subparagraph 
                and the public housing agency (or the 
                Secretary, in the case of a family described in 
                subparagraph (A)(ii)) reasonably determines the 
                hardship to be of a temporary nature, an 
                exemption shall not be granted during the 90-
                day period beginning upon the making of a 
                request for the exemption. A resident may not 
                be evicted during such 90-day period for 
                nonpayment of rent. In such a case, if the 
                resident thereafter demonstrates that the 
                financial hardship is of a long-term basis, the 
                agency (or the Secretary) shall retroactively 
                exempt the resident from the applicability of 
                the minimum rent requirement for such 90-day 
                period.
          (4) Occupancy by police officers.--
                  (A) In general.-- Subject to subparagraph (B) 
                and notwithstanding any other provision of law, 
                a public housing agency may, in accordance with 
                the public housing agency plan for the agency, 
                allow a police officer who is not otherwise 
                eligible for residence in public housing to 
                reside in a public housing dwelling unit. The 
                number and location of units occupied by police 
                officers under this paragraph and the terms and 
                conditions of their tenancies shall be 
                determined by the public housing agency.
                  (B) Increased security.-- A public housing 
                agency may take the actions authorized in 
                subparagraph (A) only for the purpose of 
                increasing security for the residents of a 
                public housing project.
                  (C) Definition.-- In this paragraph, the term 
                ``police officer'' means any person determined 
                by a public housing agency to be, during the 
                period of residence of that person in public 
                housing, employed on a full-time basis as a 
                duly licensed professional police officer by a 
                Federal, State, or local government or by any 
                agency thereof (including a public housing 
                agency having an accredited police force).
          (5) Occupancy by over-income families in certain 
        public housing.--
                  (A) Authority.-- Notwithstanding any other 
                provision of law, a public housing agency that 
                owns or operates less than 250 units may, on a 
                month-to-month basis, lease a dwelling unit in 
                a public housing project to an over-income 
                family in accordance with this paragraph, but 
                only if there are no eligible families applying 
                for housing assistance from the public housing 
                agency for that month and the agency provides 
                not less than 30-day public notice of the 
                availability of such assistance.
                  (B) Terms and conditions.-- The number and 
                location of dwelling units of a public housing 
                agency occupied under this paragraph by over-
                income families, and the terms and conditions 
                of those tenancies, shall be determined by the 
                public housing agency, except that--
                          (i) notwithstanding paragraph (2), 
                        rent for a unit shall be in an amount 
                        that is not less than the costs to 
                        operate the unit;
                          (ii) if an eligible family applies 
                        for residence after an over-income 
                        family moves in to the last available 
                        unit, the over-income family shall 
                        vacate the unit in accordance with 
                        notice of termination of tenancy 
                        provided by the agency, which shall be 
                        provided not less than 30 days before 
                        such termination; and
                          (iii) if a unit is vacant and there 
                        is no one on the waiting list, the 
                        public housing agency may allow an 
                        over-income family to gain immediate 
                        occupancy in the unit, while 
                        simultaneously providing reasonable 
                        public notice and outreach with regard 
                        to availability of the unit.
                  (C) Definition.-- For purposes of this 
                paragraph, the term ``over-income family'' 
                means an individual or family that is not a 
                low-income family at the time of initial 
                occupancy.
          (6) Reviews of family income.--
                  (A) Frequency.-- Reviews of family income for 
                purposes of this section shall be made--
                          (i) in the case of all families, upon 
                        the initial provision of housing 
                        assistance for the family;
                          (ii) annually thereafter, except as 
                        provided in paragraph (1) with respect 
                        to fixed-income families;
                          (iii) upon the request of the family, 
                        at any time the income or deductions 
                        (under subsection (b)(5)) of the family 
                        change by an amount that is estimated 
                        to result in a decrease of 10 percent 
                        (or such lower amount as the Secretary 
                        may, by notice, establish, or permit 
                        the public housing agency or owner to 
                        establish) or more in annual adjusted 
                        income; and
                          (iv) at any time the income or 
                        deductions (under subsection (b)(5)) of 
                        the family change by an amount that is 
                        estimated to result in an increase of 
                        10 percent or more in annual adjusted 
                        income, or such other amount as the 
                        Secretary may by notice establish, 
                        except that any increase in the earned 
                        income of a family shall not be 
                        considered for purposes of this clause 
                        (except that earned income may be 
                        considered if the increase corresponds 
                        to previous decreases under clause 
                        (iii)), except that a public housing 
                        agency or owner may elect not to 
                        conduct such review in the last three 
                        months of a certification period.
                  (B) In general.-- Reviews of family income 
                for purposes of this section shall be subject 
                to the provisions of section 904 of the Stewart 
                B. McKinney Homeless Assistance Amendments Act 
                of 1988 (42 U.S.C. 3544).
          (7) Calculation of income.--
                  (A) Use of current year income.-- In 
                determining family income for initial occupancy 
                or provision of housing assistance pursuant to 
                clause (i) of paragraph (6)(A) or pursuant to 
                reviews pursuant to clause (iii) or (iv) of 
                such paragraph, a public housing agency or 
                owner shall use the income of the family as 
                estimated by the agency or owner for the 
                upcoming year.
                  (B) Use of prior year income.-- In 
                determining family income for annual reviews 
                pursuant to paragraph (6)(A)(ii), a public 
                housing agency or owner shall, except as 
                otherwise provided in this paragraph and 
                paragraph (1), use the income of the family as 
                determined by the agency or owner for the 
                preceding year, taking into consideration any 
                redetermination of income during such prior 
                year pursuant to clause (iii) or (iv) of 
                paragraph (6)(A).
                  (C) Other income.-- In determining the income 
                for any family based on the prior year's 
                income, with respect to prior year calculations 
                of income not subject to subparagraph (B), a 
                public housing agency or owner may make other 
                adjustments as it considers appropriate to 
                reflect current income.
                  (D) Safe harbor.-- A public housing agency or 
                owner may, to the extent such information is 
                available to the public housing agency or 
                owner, determine the family's income prior to 
                the application of any deductions based on 
                timely income determinations made for purposes 
                of other means-tested Federal public assistance 
                programs (including the program for block 
                grants to States for temporary assistance for 
                needy families under part A of title IV of the 
                Social Security Act, a program for Medicaid 
                assistance under a State plan approved under 
                title XIX of the Social Security Act, and the 
                supplemental nutrition assistance program (as 
                such term is defined in section 3 of the Food 
                and Nutrition Act of 2008 (7 U.S.C. 2012))). 
                The Secretary shall, in consultation with other 
                appropriate Federal agencies, develop 
                procedures to enable public housing agencies 
                and owners to have access to such income 
                determinations made by other means-tested 
                Federal programs that the Secretary determines 
                to have comparable reliability. Exchanges of 
                such information shall be subject to the same 
                limitations and tenant protections provided 
                under section 904 of the Stewart B. McKinney 
                Homeless Assistance Act Amendments of 1988 (42 
                U.S.C. 3544) with respect to information 
                obtained under the requirements of section 
                303(i) of the Social Security Act (42 U.S.C. 
                503(i)).
                  (E) PHA and owner compliance.-- A public 
                housing agency or owner may not be considered 
                to fail to comply with this paragraph or 
                paragraph (6) due solely to any de minimis 
                errors made by the agency or owner in 
                calculating family incomes.
  (b) When used in this Act:
  (1) The term ``low-income housing'' means decent, safe, and 
sanitary dwellings assisted under this Act. The term ``public 
housing'' means low-income housing, and all necessary 
appurtenances thereto, assisted under this Act other than under 
section 8. The term ``public housing'' includes dwelling units 
in a mixed finance project that are assisted by a public 
housing agency with capital or operating assistance. When used 
in reference to public housing, the term ``low-income housing 
project'' or ``project'' means (A) housing developed, acquired, 
or assisted by a public housing agency under this Act, and (B) 
the improvement of any such housing.
  (2)(A) The term low-income families means those families 
whose incomes do not exceed 80 per centum of the median income 
for the area, as determined by the Secretary with adjustments 
for smaller and larger families, except that the Secretary may 
establish income ceilings higher or lower than 80 per centum of 
the median for the area on the basis of the Secretary's 
findings that such variations are necessary because of 
prevailing levels of construction costs or unusually high or 
low family incomes.
  (B) The term very low-income families means low-income 
families whose incomes do not exceed 50 per centum of the 
median family income for the area, as determined by the 
Secretary with adjustments for smaller and larger families, 
except that the Secretary may establish income ceilings higher 
or lower than 50 per centum of the median for the area on the 
basis of the Secretary's findings that such variations are 
necessary because of unusually high or low family incomes.
          (C) The term extremely low-income families means very 
        low-income families whose incomes do not exceed the 
        higher of--
                  (i) the poverty guidelines updated 
                periodically by the Department of Health and 
                Human Services under the authority of section 
                673(2) of the Community Services Block Grant 
                Act applicable to a family of the size involved 
                (except that this clause shall not apply in the 
                case of public housing agencies or projects 
                located in Puerto Rico or any other territory 
                or possession of the United States); or
                  (ii) 30 percent of the median family income 
                for the area, as determined by the Secretary, 
                with adjustments for smaller and larger 
                families (except that the Secretary may 
                establish income ceilings higher or lower than 
                30 percent of the median for the area on the 
                basis of the Secretary's findings that such 
                variations are necessary because of unusually 
                high or low family incomes).
  (D) Such ceilings shall be established in consultation with 
the Secretary of Agriculture for any rural area, as defined in 
section 520 of the Housing Act of 1949, taking into account the 
subsidy characteristics and types of programs to which such 
ceilings apply. In determining median incomes (of persons, 
families, or households) for an area or establishing any 
ceilings or limits based on income under this Act, the 
Secretary shall determine or establish area median incomes and 
income ceilings and limits for Westchester and Rockland 
Counties, in the State of New York, as if each such county were 
an area not contained within the metropolitan statistical area 
in which it is located. In determining such area median incomes 
or establishing such income ceilings or limits for the portion 
of such metropolitan statistical area that does not include 
Westchester or Rockland Counties, the Secretary shall determine 
or establish area median incomes and income ceilings and limits 
as if such portion included Westchester and Rockland Counties. 
In determining areas that are designated as difficult 
development areas for purposes of the low-income housing tax 
credit, the Secretary shall include Westchester and Rockland 
Counties, New York, in the New York City metropolitan area.
  (3) Persons and families.--
          (A) Single persons.-- The term ``families'' includes 
        families consisting of a single person in the case of 
        (i) an elderly person, (ii) a disabled person, (iii) a 
        displaced person, (iv) the remaining member of a tenant 
        family, and (v) any other single persons. In no event 
        may any single person under clause (v) of the first 
        sentence be provided a housing unit assisted under this 
        Act of 2 or more bedrooms.
          (B) Families.-- The term ``families'' includes 
        families with children and, in the cases of elderly 
        families, near-elderly families, and disabled families, 
        means families whose heads (or their spouses), or whose 
        sole members, are elderly, near-elderly, or persons 
        with disabilities, respectively. The term includes, in 
        the cases of elderly families, near-elderly families, 
        and disabled families, 2 or more elderly persons, near-
        elderly persons, or persons with disabilities living 
        together, and 1 or more such persons living with 1 or 
        more persons determined under the public housing agency 
        plan to be essential to their care or well-being.
          (C) Absence of children.-- The temporary absence of a 
        child from the home due to placement in foster care 
        shall not be considered in determining family 
        composition and family size.
          (D) Elderly person.-- The term ``elderly person'' 
        means a person who is at least 62 years of age.
          (E) Person with disabilities.-- The term ``person 
        with disabilities'' means a person who--
                  (i) has a disability as defined in section 
                223 of the Social Security Act,
                  (ii) is determined, pursuant to regulations 
                issued by the Secretary, to have a physical, 
                mental, or emotional impairment which (I) is 
                expected to be of long-continued and indefinite 
                duration, (II) substantially impedes his or her 
                ability to live independently, and (III) is of 
                such a nature that such ability could be 
                improved by more suitable housing conditions, 
                or
                  (iii) has a developmental disability as 
                defined in section 102 of the Developmental 
                Disabilities Assistance and Bill of Rights Act 
                of 2000.
        Such term shall not exclude persons who have the 
        disease of acquired immunodeficiency syndrome or any 
        conditions arising from the etiologic agent for 
        acquired immunodeficiency syndrome. Notwithstanding any 
        other provision of law, no individual shall be 
        considered a person with disabilities, for purposes of 
        eligibility for low-income housing under this title, 
        solely on the basis of any drug or alcohol dependence. 
        The Secretary shall consult with other appropriate 
        Federal agencies to implement the preceding sentence.
          (F) Displaced person.-- The term ``displaced person'' 
        means a person displaced by governmental action, or a 
        person whose dwelling has been extensively damaged or 
        destroyed as a result of a disaster declared or 
        otherwise formally recognized pursuant to Federal 
        disaster relief laws.
          (G) Near-elderly person.-- The term ``near-elderly 
        person'' means a person who is at least 50 years of age 
        but below the age of 62.
  [(4) The term ``income'' means income from all sources of 
each member of the household, as determined in accordance with 
criteria prescribed by the Secretary, in consultation with the 
Secretary of Agriculture, except that any amounts not actually 
received by the family and any amounts which would be eligible 
for exclusion under section 1613(a)(7) of the Social Security 
Act (42 U.S.C. 1382b(a)(7)) or any deferred Department of 
Veterans Affairs disability benefits that are received in a 
lump sum amount or in prospective monthly amounts may not be 
considered as income under this paragraph.
  [(5) Adjusted income.--The term ``adjusted income'' means, 
with respect to a family, the amount (as determined by the 
public housing agency) of the income of the members of the 
family residing in a dwelling unit or the persons on a lease, 
after any income exclusions as follows:
          [(A) Mandatory exclusions.-- In determining adjusted 
        income, a public housing agency shall exclude from the 
        annual income of a family the following amounts:
                  [(i) Elderly and disabled families.-- $400 
                for any elderly or disabled family.
                  [(ii) Medical expenses.-- The amount by which 
                3 percent of the annual family income is 
                exceeded by the sum of--
                          [(I) unreimbursed medical expenses of 
                        any elderly family or disabled family;
                          [(II) unreimbursed medical expenses 
                        of any family that is not covered under 
                        subclause (I), except that this 
                        subclause shall apply only to the 
                        extent approved in appropriation Acts; 
                        and
                          [(III) unreimbursed reasonable 
                        attendant care and auxiliary apparatus 
                        expenses for each handicapped member of 
                        the family, to the extent necessary to 
                        enable any member of such family 
                        (including such handicapped member) to 
                        be employed.
                  [(iii) Child care expenses.-- Any reasonable 
                child care expenses necessary to enable a 
                member of the family to be employed or to 
                further his or her education.
                  [(iv) Minors, students, and persons with 
                disabilities.-- $480 for each member of the 
                family residing in the household (other than 
                the head of the household or his or her spouse) 
                who is less than 18 years of age or is 
                attending school or vocational training on a 
                full-time basis, or who is 18 years of age or 
                older and is a person with disabilities.
                  [(v) Child support payments.-- Any payment 
                made by a member of the family for the support 
                and maintenance of any child who does not 
                reside in the household, except that the amount 
                excluded under this clause may not exceed $480 
                for each child for whom such payment is made; 
                except that this clause shall apply only to the 
                extent approved in appropriations Acts.
                  [(vi) Spousal support expenses.-- Any payment 
                made by a member of the family for the support 
                and maintenance of any spouse or former spouse 
                who does not reside in the household, except 
                that the amount excluded under this clause 
                shall not exceed the lesser of (I) the amount 
                that such family member has a legal obligation 
                to pay, or (II) $550 for each individual for 
                whom such payment is made; except that this 
                clause shall apply only to the extent approved 
                in appropriations Acts.
                  [(vii) Earned income of minors.-- The amount 
                of any earned income of a member of the family 
                who is not--
                          [(I) 18 years of age or older; and
                          [(II) the head of the household (or 
                        the spouse of the head of the 
                        household).
          [(B) Permissive exclusions for public housing.-- In 
        determining adjusted income, a public housing agency 
        may, in the discretion of the agency, establish 
        exclusions from the annual income of a family residing 
        in a public housing dwelling unit. Such exclusions may 
        include the following amounts:
                  [(i) Excessive travel expenses.-- Excessive 
                travel expenses in an amount not to exceed $25 
                per family per week, for employment- or 
                education-related travel.
                  [(ii) Earned income.-- An amount of any 
                earned income of the family, established at the 
                discretion of the public housing agency, which 
                may be based on--
                          [(I) all earned income of the family,
                          [(II) the amount earned by particular 
                        members of the family;
                          [(III) the amount earned by families 
                        having certain characteristics; or
                          [(IV) the amount earned by families 
                        or members during certain periods or 
                        from certain sources.
                  [(iii) Others.-- Such other amounts for other 
                purposes, as the public housing agency may 
                establish.]
          (4) Income.-- The term ``income'' means, with respect 
        to a family, income received from all sources by each 
        member of the household who is 18 years of age or older 
        or is the head of household or spouse of the head of 
        the household, plus unearned income by or on behalf of 
        each dependent who is less than 18 years of age, as 
        determined in accordance with criteria prescribed by 
        the Secretary, in consultation with the Secretary of 
        Agriculture, subject to the following requirements:
                  (A) Included amounts.-- Such term includes 
                recurring gifts and receipts, actual income 
                from assets, and profit or loss from a 
                business.
                  (B) Excluded amounts.-- Such term does not 
                include--
                          (i) any imputed return on assets, 
                        except to the extent that net family 
                        assets exceed $50,000, except that such 
                        amount (as it may have been previously 
                        adjusted) shall be adjusted for 
                        inflation annually by the Secretary in 
                        accordance with an inflationary index 
                        selected by the Secretary;
                          (ii) any amounts that would be 
                        eligible for exclusion under section 
                        1613(a)(7) of the Social Security Act 
                        (42 U.S.C. 1382b(a)(7));
                          (iii) deferred disability benefits 
                        from the Department of Veterans Affairs 
                        that are received in a lump sum amount 
                        or in prospective monthly amounts;
                          (iv) any expenses related to aid and 
                        attendance under section 1521 of title 
                        38, United States Code, to veterans who 
                        are in need of regular aid and 
                        attendance; and
                          (v) exclusions from income as 
                        established by the Secretary by 
                        regulation or notice, or any amount 
                        required by Federal law to be excluded 
                        from consideration as income.
                  (C) Earned income of students.-- Such term 
                does not include--
                          (i) earned income, up to an amount as 
                        the Secretary may by regulation 
                        establish, of any dependent earned 
                        during any period that such dependent 
                        is attending school or vocational 
                        training on a full-time basis; or
                          (ii) any grant-in-aid or scholarship 
                        amounts related to such attendance 
                        used--
                                  (I) for the cost of tuition 
                                or books; or
                                  (II) in such amounts as the 
                                Secretary may allow, for the 
                                cost of room and board.
                  (D) Educational savings accounts.-- Income 
                shall be determined without regard to any 
                amounts in or from, or any benefits from, any 
                Coverdell education savings account under 
                section 530 of the Internal Revenue Code of 
                1986 or any qualified tuition program under 
                section 529 of such Code.
                  (E) Recordkeeping.-- The Secretary may not 
                require a public housing agency or owner to 
                maintain records of any amounts excluded from 
                income pursuant to this subparagraph.
          (5) Adjusted income.-- The term ``adjusted income'' 
        means, with respect to a family, the amount (as 
        determined by the public housing agency or owner) of 
        the income of the members of the family residing in a 
        dwelling unit or the persons on a lease, after any 
        deductions from income as follows:
                  (A) Elderly and disabled families.-- $525 in 
                the case of any family that is an elderly 
                family or a disabled family.
                  (B) Dependents.-- In the case of any family, 
                $525 for each member who--
                          (i) is less than 18 years of age or 
                        attending school or vocational training 
                        on a full-time basis; or
                          (ii) is a person who is 18 years of 
                        age or older, resides in the household, 
                        and is certified as disabled and unable 
                        to work by the public housing agency of 
                        jurisdiction.
                  (C) Child care.-- The amount, if any, that 
                exceeds 5 percent of annual family income that 
                is used to pay for unreimbursed child care 
                expenses, which shall include child care for 
                preschool-age children, for before- and after-
                care for children in school, and for other 
                child care necessary to enable a member of the 
                family to be employed or further his or her 
                education.
                  (D) Health and medical expenses.-- The 
                amount, if any, by which 10 percent of annual 
                family income is exceeded by the sum of--
                          (i) in the case of any elderly or 
                        disabled family, any unreimbursed 
                        health and medical care expenses; and
                          (ii) any unreimbursed reasonable 
                        attendant care and auxiliary apparatus 
                        expenses for each handicapped member of 
                        the family, if determined necessary by 
                        the public housing agency or owner to 
                        enable any member of such family to be 
                        employed.
                 The Secretary shall, by regulation, provide 
                hardship exemptions to the requirements of this 
                subparagraph and subparagraph (C) for impacted 
                families who demonstrate an inability to pay 
                calculated rents because of financial hardship. 
                Such regulations shall include a requirement to 
                notify tenants regarding any changes to the 
                determination of adjusted income pursuant to 
                such subparagraphs based on the determination 
                of the family's claim of financial hardship 
                exemptions required by the preceding sentence. 
                Such regulations shall be promulgated in 
                consultation with tenant organizations, 
                industry participants, and the Secretary of 
                Health and Human Services, with an adequate 
                comment period provided for interested parties.
                  (E) Permissive deductions.-- Such additional 
                deductions as a public housing agency may, at 
                its discretion, establish, except that the 
                Secretary shall establish procedures to ensure 
                that such deductions do not materially increase 
                Federal expenditures.
        The Secretary shall annually calculate the amounts of 
        the deductions under subparagraphs (A) and (B), as such 
        amounts may have been previously calculated, by 
        applying an inflationary factor as the Secretary shall, 
        by regulation, establish, except that the actual 
        deduction determined for each year shall be established 
        by rounding such amount to the next lowest multiple of 
        $25.
  (6) Public housing agency.--
          (A) In general.-- Except as provided in subparagraph 
        (B), the term ``public housing agency'' means any 
        State, county, municipality, or other governmental 
        entity or public body (or agency or instrumentality 
        thereof) which is authorized to engage in or assist in 
        the development or operation of public housing, or a 
        consortium of such entities or bodies as approved by 
        the Secretary.
          (B) Section 8 program.-- For purposes of the program 
        for tenant-based assistance under section 8, such term 
        includes--
                  (i) a consortia of public housing agencies 
                that the Secretary determines has the capacity 
                and capability to administer a program for 
                assistance under such section in an efficient 
                manner;
                  (ii) any other public or private nonprofit 
                entity that, upon the effective date under 
                section 503(a) of the Quality Housing and Work 
                Responsibility Act of 1998, was administering 
                any program for tenant-based assistance under 
                section 8 of this Act (as in effect before the 
                effective date of such Act), pursuant to a 
                contract with the Secretary or a public housing 
                agency; and
                  (iii) with respect to any area in which no 
                public housing agency has been organized or 
                where the Secretary determines that a public 
                housing agency is unwilling or unable to 
                implement a program for tenant-based assistance 
                section 8, or is not performing effectively--
                          (I) the Secretary or another public 
                        or private nonprofit entity that by 
                        contract agrees to receive assistance 
                        amounts under section 8 and enter into 
                        housing assistance payments contracts 
                        with owners and perform the other 
                        functions of public housing agency 
                        under section 8; or
                          (II) notwithstanding any provision of 
                        State or local law, a public housing 
                        agency for another area that contracts 
                        with the Secretary to administer a 
                        program for housing assistance under 
                        section 8, without regard to any 
                        otherwise applicable limitations on its 
                        area of operation.
  (7) The term ``State'' includes the several States, the 
District of Columbia, the Commonwealth of Puerto Rico, the 
territories and possessions of the United States, and the Trust 
Territory of the Pacific Islands.
  (8) The term ``Secretary'' means the Secretary of Housing and 
Urban Development.
  (9) Drug-related criminal activity.--The term ``drug-related 
criminal activity'' means the illegal manufacture, sale, 
distribution, use, or possession with intent to manufacture, 
sell, distribute, or use, of a controlled substance (as such 
term is defined in section 102 of the Controlled Substances 
Act).
  (10) Mixed-finance project.--The term ``mixed-finance 
project'' means a public housing project that meets the 
requirements of section 35.
  (11) Public housing agency plan.--The term ``public housing 
agency plan'' means the plan of a public housing agency 
prepared in accordance with section 5A.
  (12) Capital fund.--The term ``Capital Fund'' means the fund 
established under section 9(d).
  (13) Operating fund.--The term ``Operating Fund'' mean the 
fund established under section 9(e).
  (c) When used in reference to public housing:
  (1) The term ``development'' means any or all undertakings 
necessary for planning, land acquisition, demolition, 
construction, or equipment, in connection with a low-income 
housing project. The term ``development cost'' comprises the 
costs incurred by a public housing agency in such undertakings 
and their necessary financing (including the payment of 
carrying charges), and in otherwise carrying out the 
development of such project, but does not include the costs 
associated with the demolition of or remediation of 
environmental hazards associated with public housing units that 
will not be replaced on the project site, or other 
extraordinary site costs as determined by the Secretary. 
Construction activity in connection with a low-income housing 
project may be confined to the reconstruction, remodeling, or 
repair of existing buildings.
  (2) The term ``operation'' means any or all undertakings 
appropriate for management, operation, services, maintenance, 
security (including the cost of security personnel), or 
financing in connection with a low-income housing project. The 
term also means the financing of tenant programs and services 
for families residing in low-income housing projects, 
particularly where there is maximum feasible participation of 
the tenants in the development and operation of such tenant 
programs and services. As used in this paragraph, the term 
``tenant programs and services'' includes the development and 
maintenance of tenant organizations which participate in the 
management of low-income housing projects; the training of 
tenants to manage and operate such projects and the utilization 
of their services in project management and operation; 
counseling on household management, housekeeping, budgeting, 
money management, child care, and similar matters; advice as to 
resources for job training and placement, education, welfare, 
health, and other community services; services which are 
directly related to meeting tenant needs and providing a 
wholesome living environment; and referral to appropriate 
agencies in the community when necessary for the provision of 
such services. To the maximum extent available and appropriate, 
existing public and private agencies in the community shall be 
used for the provision of such services.
  (3) The term ``acquisition cost'' means the amount prudently 
required to be expended by a public housing agency in acquiring 
property for a low-income housing project.
  [(d) Disallowance of Earned Income From Rent 
Determinations.--
          [(1) In general.-- Notwithstanding any other 
        provision of law, the rent payable under subsection (a) 
        by a family described in paragraph (3) of this 
        subsection may not be increased as a result of the 
        increased income due to such employment during the 12-
        month period beginning on the date on which the 
        employment is commenced.
          [(2) Phase-in of rent increases.-- Upon the 
        expiration of the 12-month period referred to in 
        paragraph (1), the rent payable by a family described 
        in paragraph (3) may be increased due to the continued 
        employment of the family member described in paragraph 
        (3)(B), except that during the 12-month period 
        beginning upon such expiration the amount of the 
        increase may not be greater than 50 percent of the 
        amount of the total rent increase that would be 
        applicable but for this paragraph.
          [(3) Eligible families.-- A family described in this 
        paragraph is a family--
                  [(A) that--
                          [(i) occupies a dwelling unit in a 
                        public housing project; or
                          [(ii) receives assistance under 
                        section 8; and
                  [(B)(i) whose income increases as a result of 
                employment of a member of the family who was 
                previously unemployed for 1 or more years;
                  [(ii) whose earned income increases during 
                the participation of a family member in any 
                family self-sufficiency or other job training 
                program; or
                  [(iii) who is or was, within 6 months, 
                assisted under any State program for temporary 
                assistance for needy families funded under part 
                A of title IV of the Social Security Act and 
                whose earned income increases.
          [(4) Applicability.-- This subsection and subsection 
        (e) shall apply beginning upon October 1, 1999, except 
        that this subsection and subsection (e) shall apply 
        with respect to any family described in paragraph 
        3(A)(ii) only to the extent provided in advance in 
        appropriations Acts.
  [(e) Individual Savings Accounts.--
          [(1) In general.-- In lieu of a disallowance of 
        earned income under subsection (d), upon the request of 
        a family that qualifies under subsection (d), a public 
        housing agency may establish an individual savings 
        account in accordance with this subsection for that 
        family.
          [(2) Deposits to account.-- The public housing agency 
        shall deposit in any savings account established under 
        this subsection an amount equal to the total amount 
        that otherwise would be applied to the family's rent 
        payment under subsection (a) as a result of employment.
          [(3) Withdrawal from account.-- Amounts deposited in 
        a savings account established under this subsection may 
        only be withdrawn by the family for the purpose of--
                  [(A) purchasing a home;
                  [(B) paying education costs of family 
                members;
                  [(C) moving out of public or assisted 
                housing; or
                  [(D) paying any other expense authorized by 
                the public housing agency for the purpose of 
                promoting the economic self-sufficiency of 
                residents of public and assisted housing.]
  [(f)] (d) Availability of Income Matching Information.--
          (1) Disclosure to pha.-- A public housing agency, or 
        the owner responsible for determining the participant's 
        eligibility or level of benefits, shall require any 
        family described in paragraph (2) who receives 
        information regarding income, earnings, wages, or 
        unemployment compensation from the Department of 
        Housing and Urban Development pursuant to income 
        verification procedures of the Department to disclose 
        such information, upon receipt of the information, to 
        the public housing agency that owns or operates the 
        public housing dwelling unit in which such family 
        resides or that provides the housing assistance under 
        this Act on behalf of such family, as applicable, or to 
        the owner responsible for determining the participant's 
        eligibility or level of benefits.
          (2) Families covered.-- A family described in this 
        paragraph is a family that resides in a dwelling unit--
                  (A) that is a public housing dwelling unit;
                  (B) for which tenant-based assistance is 
                provided under section 8, or
          (C) for which project-based assistance is provided 
        under section 8, section 202, or section 811.

           *       *       *       *       *       *       *


                    lower income housing assistance

  Sec. 8. (a) For the purpose of aiding lower-income families 
in obtaining a decent place to live and of promoting 
economically mixed housing, assistance payments may be made 
with respect to existing housing in accordance with the 
provisions of this section.
  (b) Other Existing Housing Programs.--(1) In general.-- The 
Secretary is authorized to enter into annual contributions 
contracts with public housing agencies pursuant to which such 
agencies may enter into contracts to make assistance payments 
to owners of existing dwelling units in accordance with this 
section. In areas where no public housing agency has been 
organized or where the Secretary determines that a public 
housing agency is unable to implement the provisions of this 
section, the Secretary is authorized to enter into such 
contracts and to perform the other functions assigned to a 
public housing agency by this section.
  (2) The Secretary is authorized to enter into annual 
contributions contracts with public housing agencies for the 
purpose of replacing public housing transferred in accordance 
with title III of this Act. Each contract entered into under 
this subsection shall be for a term of not more than 60 months.
  (c)(1) (A) An assistance contract entered into pursuant to 
this section shall establish the maximum monthly rent 
(including utilities and all maintenance and management 
charges) which the owner is entitled to receive for each 
dwelling unit with respect to which such assistance payments 
are to be made. The maximum monthly rent shall not exceed by 
more than 10 per centum the fair market rental established by 
the Secretary periodically but not less than annually for 
existing or newly constructed rental dwelling units of various 
sizes and types in the market area suitable for occupancy by 
persons assisted under this section, except that the maximum 
monthly rent may exceed the fair market rental (A) by more than 
10 but not more than 20 per centum where the Secretary 
determines that special circumstances warrant such higher 
maximum rent or that such higher rent is necessary to the 
implementation of a housing strategy as defined in section 105 
of the Cranston-Gonzalez National Affordable Housing Act, or 
(B) by such higher amount as may be requested by a tenant and 
approved by the public housing agency in accordance with 
paragraph (3)(B). In the case of newly constructed and 
substantially rehabilitated units, the exception in the 
preceding sentence shall not apply to more than 20 per centum 
of the total amount of authority to enter into annual 
contributions contracts for such units which is allocated to an 
area and obligated with respect to any fiscal year beginning on 
or after October 1, 1980. [Proposed fair market rentals for an 
area shall be published in the Federal Register with reasonable 
time for public comment, and shall become effective upon the 
date of publication in final form in the Federal Register.] 
Each fair market rental in effect under this subsection shall 
be adjusted to be effective on October 1 of each year to 
reflect changes, based on the most recent available data 
trended so the rentals will be current for the year to which 
they apply, of rents for existing or newly constructed rental 
dwelling units, as the case may be, of various sizes and types 
in the market area suitable for occupancy by persons assisted 
under this section. Notwithstanding any other provision of this 
section, after the date of enactment of the Housing and 
Community Development Act of 1977, the Secretary shall prohibit 
high-rise elevator projects for families with children unless 
there is no practical alternative. [The Secretary shall 
establish separate fair market rentals under this paragraph for 
Westchester County in the State of New York.][The Secretary 
shall also establish separate fair market rentals under this 
paragraph for Monroe County in the Commonwealth of 
Pennsylvania. In establishing fair market rentals for the 
remaining portion of the market area in which Monroe County is 
located, the Secretary shall establish the fair market rentals 
as if such portion included Monroe County.] If units assisted 
under this section are exempt from local rent control while 
they are so assisted or otherwise, the maximum monthly rent for 
such units shall be reasonable in comparison with other units 
in the market area that are exempt from local rent control.
  (B) Fair market rentals for an area shall be published not 
less than annually by the Secretary on the site of the 
Department on the World Wide Web and in any other manner 
specified by the Secretary. Notice that such fair market 
rentals are being published shall be published in the Federal 
Register, and such fair market rentals shall become effective 
no earlier than 30 days after the date of such publication. The 
Secretary shall establish a procedure for public housing 
agencies and other interested parties to comment on such fair 
market rentals and to request, within a time specified by the 
Secretary, reevaluation of the fair market rentals in a 
jurisdiction before such rentals become effective. The 
Secretary shall cause to be published for comment in the 
Federal Register notices of proposed material changes in the 
methodology for estimating fair market rentals and notices 
specifying the final decisions regarding such proposed 
substantial methodological changes and responses to public 
comments.
  (2)(A) The assistance contract shall provide for adjustment 
annually or more frequently in the maximum monthly rents for 
units covered by the contract to reflect changes in the fair 
market rentals established in the housing area for similar 
types and sizes of dwelling units or, if the Secretary 
determines, on the basis of a reasonable formula. However, 
where the maximum monthly rent, for a unit in a new 
construction, substantial rehabilitation, or moderate 
rehabilitation project, to be adjusted using an annual 
adjustment factor exceeds the fair market rental for an 
existing dwelling unit in the market area, the Secretary shall 
adjust the rent only to the extent that the owner demonstrates 
that the adjusted rent would not exceed the rent for an 
unassisted unit of similar quality, type, and age in the same 
market area, as determined by the Secretary. The immediately 
foregoing sentence shall be effective only during fiscal year 
1995, fiscal year 1996 prior to April 26, 1996, and fiscal 
years 1997 and 1998, and during fiscal year 1999 and 
thereafter. Except for assistance under the certificate 
program, for any unit occupied by the same family at the time 
of the last annual rental adjustment, where the assistance 
contract provides for the adjustment of the maximum monthly 
rent by applying an annual adjustment factor and where the rent 
for a unit is otherwise eligible for an adjustment based on the 
full amount of the factor, 0.01 shall be subtracted from the 
amount of the factor, except that the factor shall not be 
reduced to less than 1.0. In the case of assistance under the 
certificate program, 0.01 shall be subtracted from the amount 
of the annual adjustment factor (except that the factor shall 
not be reduced to less than 1.0), and the adjusted rent shall 
not exceed the rent for a comparable unassisted unit of similar 
quality, type, and age in the market area. The immediately 
foregoing two sentences shall be effective only during fiscal 
year 1995, fiscal year 1996 prior to April 26, 1996, and fiscal 
years 1997 and 1998, and during fiscal year 1999 and 
thereafter. In establishing annual adjustment factors for units 
in new construction and substantial rehabilitation projects, 
the Secretary shall take into account the fact that debt 
service is a fixed expense. The immediately foregoing sentence 
shall be effective only during fiscal year 1998.
  (B) The contract shall further provide for the Secretary to 
make additional adjustments in the maximum monthly rent for 
units under contract to the extent he determines such 
adjustments are necessary to reflect increases in the actual 
and necessary expenses of owning and maintaining the units 
which have resulted from substantial general increases in real 
property taxes, utility rates, or similar costs which are not 
adequately compensated for by the adjustment in the maximum 
monthly rent authorized by subparagraph (A). The Secretary 
shall make additional adjustments in the maximum monthly rent 
for units under contract (subject to the availability of 
appropriations for contract amendments) to the extent the 
Secretary determines such adjustments are necessary to reflect 
increases in the actual and necessary expenses of owning and 
maintaining the units that have resulted from the expiration of 
a real property tax exemption. Where the Secretary determines 
that a project assisted under this section is located in a 
community where drug-related criminal activity is generally 
prevalent and the project's operating, maintenance, and capital 
repair expenses have been substantially increased primarily as 
a result of the prevalence of such drug-related activity, the 
Secretary may (at the discretion of the Secretary and subject 
to the availability of appropriations for contract amendments 
for this purpose), on a project by project basis, provide 
adjustments to the maximum monthly rents, to a level no greater 
than 120 percent of the project rents, to cover the costs of 
maintenance, security, capital repairs, and reserves required 
for the owner to carry out a strategy acceptable to the 
Secretary for addressing the problem of drug-related criminal 
activity. Any rent comparability standard required under this 
paragraph may be waived by the Secretary to so implement the 
preceding sentence. The Secretary may (at the discretion of the 
Secretary and subject to the availability of appropriations for 
contract amendments), on a project by project basis for 
projects receiving project-based assistance, provide 
adjustments to the maximum monthly rents to cover the costs of 
evaluating and reducing lead-based paint hazards, as defined in 
section 1004 of the Residential Lead-Based Paint Hazard 
Reduction Act of 1992.
  (C) Adjustments in the maximum rents under subparagraphs (A) 
and (B) shall not result in material differences between the 
rents charged for assisted units and unassisted units of 
similar quality, type, and age in the same market area, as 
determined by the Secretary. In implementing the limitation 
established under the preceding sentence, the Secretary shall 
establish regulations for conducting comparability studies for 
projects where the Secretary has reason to believe that the 
application of the formula adjustments under subparagraph (A) 
would result in such material differences. The Secretary shall 
conduct such studies upon the request of any owner of any 
project, or as the Secretary determines to be appropriate by 
establishing, to the extent practicable, a modified annual 
adjustment factor for such market area, as the Secretary shall 
designate, that is geographically smaller than the applicable 
housing area used for the establishment of the annual 
adjustment factor under subparagraph (A). The Secretary shall 
establish such modified annual adjustment factor on the basis 
of the results of a study conducted by the Secretary of the 
rents charged, and any change in such rents over the previous 
year, for assisted units and unassisted units of similar 
quality, type, and age in the smaller market area. Where the 
Secretary determines that such modified annual adjustment 
factor cannot be established or that such factor when applied 
to a particular project would result in material differences 
between the rents charged for assisted units and unassisted 
units of similar quality, type, and age in the same market 
area, the Secretary may apply an alternative methodology for 
conducting comparability studies in order to establish rents 
that are not materially different from rents charged for 
comparable unassisted units. If the Secretary or appropriate 
State agency does not complete and submit to the project owner 
a comparability study not later than 60 days before the 
anniversary date of the assistance contract under this section, 
the automatic annual adjustment factor shall be applied. The 
Secretary may not reduce the contract rents in effect on or 
after April 15, 1987, for newly constructed, substantially 
rehabilitated, or moderately rehabilitated projects assisted 
under this section (including projects assisted under this 
section as in effect prior to November 30, 1983), unless the 
project has been refinanced in a manner that reduces the 
periodic payments of the owner. Any maximum monthly rent that 
has been reduced by the Secretary after April 14, 1987, and 
prior to the enactment of this sentence shall be restored to 
the maximum monthly rent in effect on April 15, 1987. For any 
project which has had its maximum monthly rents reduced after 
April 14, 1987, the Secretary shall make assistance payments 
(from amounts reserved for the original contract) to the owner 
of such project in an amount equal to the difference between 
the maximum monthly rents in effect on April 15, 1987, and the 
reduced maximum monthly rents, multiplied by the number of 
months that the reduced maximum monthly rents were in effect.
  (3) The amount of the monthly assistance payment with respect 
to any dwelling unit shall be the difference between the 
maximum monthly rent which the contract provides that the owner 
is to receive for the unit and the rent the family is required 
to pay under section 3(a) of this Act. [Reviews of family 
income shall be made no less frequently than annually.]
  (4) The assistance contract shall provide that assistance 
payments may be made only with respect to a dwelling unit under 
lease for occupancy by a family determined to be a lower income 
family at the time it initially occupied such dwelling unit, 
except that such payments may be made with respect to 
unoccupied units for a period not exceeding sixty days (A) in 
the event that a family vacates a dwelling unit before the 
expiration date of the lease for occupancy or (B) where a good 
faith effort is being made to fill an unoccupied unit, and, 
subject to the provisions of the following sentence, such 
payments may be made, in the case of a newly constructed or 
substantially rehabilitated project, after such sixty-day 
period in an amount equal to the debt service attributable to 
such an unoccupied dwelling unit for a period not to exceed one 
year, if a good faith effort is being made to fill the unit and 
the unit provides decent, safe, and sanitary housing. No such 
payment may be made after such sixty-day period if the 
Secretary determines that the dwelling unit is in a project 
which provides the owner with revenues exceeding the costs 
incurred by such owner with respect to such project.
  (5) The Secretary shall take such steps as may be necessary, 
including the making of contracts for assistance payments in 
amounts in excess of the amounts required at the time of the 
initial renting of dwelling units, the reservation of annual 
contributions authority for the purpose of amending housing 
assistance contracts, or the allocation of a portion of new 
authorizations for the purpose of amending housing assistance 
contracts, to assure that assistance payments are increased on 
a timely basis to cover increases in maximum monthly rents or 
decreases in family incomes.
  (8)(A) Not less than one year before termination of any 
contract under which assistance payments are received under 
this section, other than a contract for tenant-based assistance 
under this section, an owner shall provide written notice to 
the Secretary and the tenants involved of the proposed 
termination. The notice shall also include a statement that, if 
the Congress makes funds available, the owner and the Secretary 
may agree to a renewal of the contract, thus avoiding 
termination, and that in the event of termination the 
Department of Housing and Urban Development will provide 
tenant-based rental assistance to all eligible residents, 
enabling them to choose the place they wish to rent, which is 
likely to include the dwelling unit in which they currently 
reside. Any contract covered by this paragraph that is renewed 
may be renewed for a period of up to 1 year or any number or 
years, with payments subject to the availability of 
appropriations for any year.
  (B) In the event the owner does not provide the notice 
required, the owner may not evict the tenants or increase the 
tenants' rent payment until such time as the owner has provided 
the notice and 1 year has elapsed. The Secretary may allow the 
owner to renew the terminating contract for a period of time 
sufficient to give tenants 1 year of advance notice under such 
terms and conditions as the Secretary may require.
  (C) Any notice under this paragraph shall also comply with 
any additional requirements established by the Secretary.
  (D) For purposes of this paragraph, the term ``termination'' 
means the expiration of the assistance contract or an owner's 
refusal to renew the assistance contract, and such term shall 
include termination of the contract for business reasons.
  (d)(1) Contracts to make assistance payments entered into by 
a public housing agency with an owner of existing housing units 
shall provide (with respect to any unit) that--
                  (A) the selection of tenants shall be the 
                function of the owner, subject to the annual 
                contributions contract between the Secretary 
                and the agency, except that with respect to the 
                certificate and moderate rehabilitation 
                programs only, for the purpose of selecting 
                families to be assisted, the public housing 
                agency may establish local preferences, 
                consistent with the public housing agency plan 
                submitted under section 5A (42 U.S.C. 1437c-1) 
                by the public housing agency;
          (B)(i) the lease between the tenant and the owner 
        shall be for at least one year or the term of such 
        contract, whichever is shorter, and shall contain other 
        terms and conditions specified by the Secretary;
          (ii) during the term of the lease, the owner shall 
        not terminate the tenancy except for serious or 
        repeated violation of the terms and conditions of the 
        lease, for violation of applicable Federal, State, or 
        local law, or for other good cause;
          (iii) during the term of the lease, any criminal 
        activity that threatens the health, safety, or right to 
        peaceful enjoyment of the premises by other tenants, 
        any criminal activity that threatens the health, 
        safety, or right to peaceful enjoyment of their 
        residences by persons residing in the immediate 
        vicinity of the premises, or any drug-related criminal 
        activity on or near such premises, engaged in by a 
        tenant of any unit, any member of the tenant's 
        household, or any guest or other person under the 
        tenant's control, shall be cause for termination of 
        tenancy;
          (iv) any termination of tenancy shall be preceded by 
        the owner's provision of written notice to the tenant 
        specifying the grounds for such action; and
                  (v) it shall be cause for termination of the 
                tenancy of a tenant if such tenant--
                          (I) is fleeing to avoid prosecution, 
                        or custody or confinement after 
                        conviction, under the laws of the place 
                        from which the individual flees, for a 
                        crime, or attempt to commit a crime, 
                        which is a felony under the laws of the 
                        place from which the individual flees, 
                        or which, in the case of the State of 
                        New Jersey, is a high misdemeanor under 
                        the laws of such State; or
                          (II) is violating a condition of 
                        probation or parole imposed under 
                        Federal or State law;
          (C) maintenance and replacement (including 
        redecoration) shall be in accordance with the standard 
        practice for the building concerned as established by 
        the owner and agreed to by the agency; and
          (D) the agency and the owner shall carry out such 
        other appropriate terms and conditions as may be 
        mutually agreed to by them.
  (2)(A) Each contract for an existing structure entered into 
under this section shall be for a term of not less than one 
month nor more than one hundred and eighty months. The 
Secretary shall permit public housing agencies to enter into 
contracts for assistance payments of less than 12 months 
duration in order to avoid disruption in assistance to eligible 
families if the annual contributions contract is within 1 year 
of its expiration date.
  (B)(i) In determining the amount of assistance provided under 
an assistance contract for project-based assistance under this 
paragraph or a contract for assistance for housing constructed 
or substantially rehabilitated pursuant to assistance provided 
under section 8(b)(2) of this Act (as such section existed 
immediately before October 1, 1983), the Secretary may consider 
and annually adjust, with respect to such project, for the cost 
of employing or otherwise retaining the services of one or more 
service coordinators under section 661 of the Housing and 
Community Development Act of 1992 to coordinate the provision 
of any services within the project for residents of the project 
who are elderly or disabled families.
  (ii) The budget authority available under section 5(c) for 
assistance under this section is authorized to be increased by 
$15,000,000 on or after October 1, 1992, and by $15,000,000 on 
or after October 1, 1993. Amounts made available under this 
subparagraph shall be used to provide additional amounts under 
annual contributions contracts for assistance under this 
section which shall be made available through assistance 
contracts only for the purpose of providing service 
coordinators under clause (i) for projects receiving project-
based assistance under this paragraph and to provide additional 
amounts under contracts for assistance for projects constructed 
or substantially rehabilitated pursuant to assistance provided 
under section 8(b)(2) of this Act (as such section existed 
immediately before October 1, 1983) only for such purpose.
          (C) An assistance contract for project-based 
        assistance under this paragraph shall provide that the 
        owner shall ensure and maintain compliance with 
        subtitle C of title VI of the Housing and Community 
        Development Act of 1992 and any regulations issued 
        under such subtitle.
          (D) An owner of a covered section 8 housing project 
        (as such term is defined in section 659 of the Housing 
        and Community Development Act of 1992) may give 
        preference for occupancy of dwelling units in the 
        project, and reserve units for occupancy, in accordance 
        with subtitle D of title VI of the Housing and 
        Community Development Act of 1992.
  (3) Notwithstanding any other provision of law, with the 
approval of the Secretary the public housing agency 
administering a contract under this section with respect to 
existing housing units may exercise all management and 
maintenance responsibilities with respect to those units 
pursuant to a contract between such agency and the owner of 
such units.
  (4) A public housing agency that serves more than one unit of 
general local government may, at the discretion of the agency, 
in allocating assistance under this section, give priority to 
disabled families that are not elderly families.
          (5) Calculation of limit.-- Any contract entered into 
        under section 514 of the Multifamily Assisted Housing 
        Reform and Affordability Act of 1997 shall be excluded 
        in computing the limit on project-based assistance 
        under this subsection.
  (6) Treatment of common areas.--The Secretary may not provide 
any assistance amounts pursuant to an existing contract for 
project-based assistance under this section for a housing 
project and may not enter into a new or renewal contract for 
such assistance for a project unless the owner of the project 
provides consent, to such local law enforcement agencies as the 
Secretary determines appropriate, for law enforcement officers 
of such agencies to enter common areas of the project at any 
time and without advance notice upon a determination of 
probable cause by such officers that criminal activity is 
taking place in such areas.
  (e)(1) Nothing in this Act shall be deemed to prohibit an 
owner from pledging, or offering as security for any loan or 
obligation, a contract for assistance payments entered into 
pursuant to this section: Provided, That such security is in 
connection with a project constructed or rehabilitated pursuant 
to authority granted in this section, and the terms of the 
financing or any refinancing have been approved by the 
Secretary.
  (f) As used in this section--
          (1) the term ``owner'' means any private person or 
        entity, including a cooperative, an agency of the 
        Federal Government, or a public housing agency, having 
        the legal right to lease or sublease dwelling units;
          (2) the terms ``rent'' or ``rental'' mean, with 
        respect to members of a cooperative, the charges under 
        the occupancy agreements between such members and the 
        cooperative;
          (3) the term ``debt service'' means the required 
        payments for principal and interest made with respect 
        to a mortgage secured by housing assisted under this 
        Act;
          (4) the term ``participating jurisdiction'' means a 
        State or unit of general local government designated by 
        the Secretary to be a participating jurisdiction under 
        title II of the Cranston-Gonzalez National Affordable 
        Housing Act;
          (5) the term ``drug-related criminal activity'' means 
        the illegal manufacture, sale, distribution, use, or 
        possession with intent to manufacture, sell, 
        distribute, or use, of a controlled substance (as 
        defined in section 102 of the Controlled Substances Act 
        (21 U.S.C. 802));
          (6) the term ``project-based assistance'' means 
        rental assistance under subsection (b) that is attached 
        to the structure pursuant to subsection (d)(2) or 
        (o)(13); and
          (7) the term ``tenant-based assistance'' means rental 
        assistance under subsection (o) that is not project-
        based assistance and that provides for the eligible 
        family to select suitable housing and to move to other 
        suitable housing.
  (g) Notwithstanding any other provision of this Act, 
assistance payments under this section may be provided, in 
accordance with regulations prescribed by the Secretary, with 
respect to some or all of the units in any project approved 
pursuant to section 202 of the Housing Act of 1959.
  (h) Sections 5(e) and 6 and any other provisions of this Act 
which are inconsistent with the provisions of this section 
shall not apply to contracts for assistance entered into under 
this section.
  (i) The Secretary may not consider the receipt by a public 
housing agency of assistance under section 811(b)(1) of the 
Cranston-Gonzalez National Affordable Housing Act, or the 
amount received, in approving assistance for the agency under 
this section or determining the amount of such assistance to be 
provided.
  (k) The Secretary shall establish procedures which are 
appropriate and necessary to assure that income data provided 
to public housing agencies and owners by families applying for 
or receiving assistance under this section is complete and 
accurate. In establishing such procedures, the Secretary shall 
randomly, regularly, and periodically select a sample of 
families to authorize the Secretary to obtain information on 
these families for the purpose of income verification, or to 
allow those families to provide such information themselves. 
Such information may include, but is not limited to, data 
concerning unemployment compensation and Federal income 
taxation and data relating to benefits made available under the 
Social Security Act, the Food and Nutrition Act of 2008, or 
title 38, United States Code. Any such information received 
pursuant to this subsection shall remain confidential and shall 
be used only for the purpose of verifying incomes in order to 
determine eligibility of families for benefits (and the amount 
of such benefits, if any) under this section.
  (o) Voucher Program.--
          (1) Authority.--
                  (A) In general.-- The Secretary may provide 
                assistance to public housing agencies for 
                tenant-based assistance using a payment 
                standard established in accordance with 
                subparagraph (B). The payment standard shall be 
                used to determine the monthly assistance that 
                may be paid for any family, as provided in 
                paragraph (2).
                  (B) Establishment of payment standard.-- 
                Except as provided under subparagraph (D), the 
                payment standard for each size of dwelling unit 
                in a market area shall not exceed 110 percent 
                of the fair market rental established under 
                subsection (c) for the same size of dwelling 
                unit in the same market area and shall be not 
                less than 90 percent of that fair market 
                rental, except that no public housing agency 
                shall be required as a result of a reduction in 
                the fair market rental to reduce the payment 
                standard applied to a family continuing to 
                reside in a unit for which the family was 
                receiving assistance under this section at the 
                time the fair market rental was reduced. The 
                Secretary shall allow public housing agencies 
                to request exception payment standards within 
                fair market rental areas subject to criteria 
                and procedures established by the Secretary .
                  (C) Set-aside.-- The Secretary may set aside 
                not more than 5 percent of the budget authority 
                made available for assistance under this 
                subsection as an adjustment pool. The Secretary 
                shall use amounts in the adjustment pool to 
                make adjusted payments to public housing 
                agencies under subparagraph (A), to ensure 
                continued affordability, if the Secretary 
                determines that additional assistance for such 
                purpose is necessary, based on documentation 
                submitted by a public housing agency.
                  (D) Approval.-- The Secretary may require a 
                public housing agency to submit the payment 
                standard of the public housing agency to the 
                Secretary for approval, if the payment standard 
                is less than 90 percent of the fair market 
                rental or exceeds 110 percent of the fair 
                market rental, except that a public housing 
                agency may establish a payment standard of not 
                more than 120 percent of the fair market rent 
                where necessary as a reasonable accommodation 
                for a person with a disability, without 
                approval of the Secretary. A public housing 
                agency may use a payment standard that is 
                greater than 120 percent of the fair market 
                rent as a reasonable accommodation for a person 
                with a disability, but only with the approval 
                of the Secretary. In connection with the use of 
                any increased payment standard established or 
                approved pursuant to either of the preceding 
                two sentences as a reasonable accommodation for 
                a person with a disability, the Secretary may 
                not establish additional requirements regarding 
                the amount of adjusted income paid by such 
                person for rent .
                  (E) Review.-- The Secretary--
                          (i) shall monitor rent burdens and 
                        review any payment standard that 
                        results in a significant percentage of 
                        the families occupying units of any 
                        size paying more than 30 percent of 
                        adjusted income for rent; and
                          (ii) may require a public housing 
                        agency to modify the payment standard 
                        of the public housing agency based on 
                        the results of that review.
          (2) Amount of monthly assistance payment.-- Subject 
        to the requirement under section 3(a)(3) (relating to 
        minimum rental amount), the monthly assistance payment 
        for a family receiving assistance under this subsection 
        shall be determined as follows:
                  (A) Tenant-based assistance; rent not 
                exceeding payment standard.-- For a family 
                receiving tenant-based assistance, if the rent 
                for the family (including the amount allowed 
                for tenant-paid utilities) does not exceed the 
                applicable payment standard established under 
                paragraph (1), the monthly assistance payment 
                for the family shall be equal to the amount by 
                which the rent (including the amount allowed 
                for tenant-paid utilities) exceeds the greatest 
                of the following amounts, rounded to the 
                nearest dollar:
                          (i) 30 percent of the monthly 
                        adjusted income of the family.
                          (ii) 10 percent of the monthly income 
                        of the family.
                          (iii) If the family is receiving 
                        payments for welfare assistance from a 
                        public agency and a part of those 
                        payments, adjusted in accordance with 
                        the actual housing costs of the family, 
                        is specifically designated by that 
                        agency to meet the housing costs of the 
                        family, the portion of those payments 
                        that is so designated.
                  (B) Tenant-based assistance; rent exceeding 
                payment standard.-- For a family receiving 
                tenant-based assistance, if the rent for the 
                family (including the amount allowed for 
                tenant-paid utilities) exceeds the applicable 
                payment standard established under paragraph 
                (1), the monthly assistance payment for the 
                family shall be equal to the amount by which 
                the applicable payment standard exceeds the 
                greatest of amounts under clauses (i), (ii), 
                and (iii) of subparagraph (A).
                  (C) Families receiving project-based 
                assistance.-- For a family receiving project-
                based assistance, the rent that the family is 
                required to pay shall be determined in 
                accordance with section 3(a)(1), and the amount 
                of the housing assistance payment shall be 
                determined in accordance with subsection (c)(3) 
                of this section.
                  (D) Utility allowance.--
                          (i) General.-- In determining the 
                        monthly assistance payment for a family 
                        under subparagraphs (A) and (B), the 
                        amount allowed for tenant-paid 
                        utilities shall not exceed the 
                        appropriate utility allowance for the 
                        family unit size as determined by the 
                        public housing agency regardless of the 
                        size of the dwelling unit leased by the 
                        family.
                          (ii) Exception for families in 
                        including persons with disabilities.-- 
                        Notwithstanding subparagraph (A), upon 
                        request by a family that includes a 
                        person with disabilities, the public 
                        housing agency shall approve a utility 
                        allowance that is higher than the 
                        applicable amount on the utility 
                        allowance schedule if a higher utility 
                        allowance is needed as a reasonable 
                        accommodation to make the program 
                        accessible to and usable by the family 
                        member with a disability.
          (3)  40 percent limit.-- At the time a family 
        initially receives tenant-based assistance under this 
        section with respect to any dwelling unit, the total 
        amount that a family may be required to pay for rent 
        may not exceed 40 percent of the monthly adjusted 
        income of the family.
          (4) Eligible families.-- To be eligible to receive 
        assistance under this subsection, a family shall, at 
        the time a family initially receives assistance under 
        this subsection, be a low-income family that is--
                  (A) a very low-income family;
                  (B) a family previously assisted under this 
                title;
                  (C) a low-income family that meets 
                eligibility criteria specified by the public 
                housing agency;
                  (D) a family that qualifies to receive a 
                voucher in connection with a homeownership 
                program approved under title IV of the 
                Cranston-Gonzalez National Affordable Housing 
                Act; or
                  (E) a family that qualifies to receive a 
                voucher under section 223 or 226 of the Low-
                Income Housing Preservation and Resident 
                Homeownership Act of 1990.
          (5)  [Annual review]  Reviews of family income.--
                  (A) In general.-- Reviews of family incomes 
                for purposes of this section shall be subject 
                to [the provisions of] paragraphs (1), (6), and 
                (7) of section 3(a) and to section 904 of the 
                Stewart B. McKinney Homeless Assistance 
                Amendments Act of 1988 [and shall be conducted 
                upon the initial provision of housing 
                assistance for the family and thereafter not 
                less than annually.].
                  (B) Procedures.-- Each public housing agency 
                administering assistance under this subsection 
                shall establish procedures that are appropriate 
                and necessary to ensure that income data 
                provided to the agency and owners by families 
                applying for or receiving assistance from the 
                agency is complete and accurate. [Each public 
                housing agency shall, not less frequently than 
                annually, conduct a review of the family income 
                of each family receiving assistance under this 
                subsection.]
          (6) Selection of families and disapproval of 
        owners.--
                  (A) Preferences.--
                          (i) Authority to establish.-- Each 
                        public housing agency may establish a 
                        system for making tenant-based 
                        assistance under this subsection 
                        available on behalf of eligible 
                        families that provides preference for 
                        such assistance to eligible families 
                        having certain characteristics, which 
                        may include a preference for families 
                        residing in public housing who are 
                        victims of a crime of violence (as such 
                        term is defined in section 16 of title 
                        18, United States Code) that has been 
                        reported to an appropriate law 
                        enforcement agency.
                          (ii) Content.-- Each system of 
                        preferences established pursuant to 
                        this subparagraph shall be based upon 
                        local housing needs and priorities, as 
                        determined by the public housing agency 
                        using generally accepted data sources, 
                        including any information obtained 
                        pursuant to an opportunity for public 
                        comment as provided under section 5A(f) 
                        and under the requirements applicable 
                        to the comprehensive housing 
                        affordability strategy for the relevant 
                        jurisdiction.
                  (B) Selection of tenants.-- Each housing 
                assistance payment contract entered into by the 
                public housing agency and the owner of a 
                dwelling unit) shall provide that the screening 
                and selection of families for those units shall 
                be the function of the owner. In addition, the 
                public housing agency may elect to screen 
                applicants for the program in accordance with 
                such requirements as the Secretary may 
                establish.
                  (C) PHA disapproval of owners.-- In addition 
                to other grounds authorized by the Secretary, a 
                public housing agency may elect not to enter 
                into a housing assistance payments contract 
                under this subsection with an owner who 
                refuses, or has a history of refusing, to take 
                action to terminate tenancy for activity 
                engaged in by the tenant, any member of the 
                tenant's household, any guest, or any other 
                person under the control of any member of the 
                household that--
                          (i) threatens the health or safety 
                        of, or right to peaceful enjoyment of 
                        the premises by, other tenants or 
                        employees of the public housing agency, 
                        owner, or other manager of the housing;
                          (ii) threatens the health or safety 
                        of, or right to peaceful enjoyment of 
                        the residences by, persons residing in 
                        the immediate vicinity of the premises; 
                        or
                          (iii) is drug-related or violent 
                        criminal activity.
          (7) Leases and tenancy.-- Each housing assistance 
        payment contract entered into by the public housing 
        agency and the owner of a dwelling unit--
                  (A) shall provide that the lease between the 
                tenant and the owner shall be for a term of not 
                less than 1 year, except that the public 
                housing agency may approve a shorter term for 
                an initial lease between the tenant and the 
                dwelling unit owner if the public housing 
                agency determines that such shorter term would 
                improve housing opportunities for the tenant 
                and if such shorter term is considered to be a 
                prevailing local market practice;
                  (B) shall provide that the dwelling unit 
                owner shall offer leases to tenants assisted 
                under this subsection that--
                          (i) are in a standard form used in 
                        the locality by the dwelling unit 
                        owner; and
                          (ii) contain terms and conditions 
                        that--
                                  (I) are consistent with State 
                                and local law; and
                                  (II) apply generally to 
                                tenants in the property who are 
                                not assisted under this 
                                section;
                  (C) shall provide that during the term of the 
                lease, the owner shall not terminate the 
                tenancy except for serious or repeated 
                violation of the terms and conditions of the 
                lease, for violation of applicable Federal, 
                State, or local law, or for other good cause, 
                and in the case of an owner who is an immediate 
                successor in interest pursuant to foreclosure 
                during the term of the lease vacating the 
                property prior to sale shall not constitute 
                other good cause, except that the owner may 
                terminate the tenancy effective on the date of 
                transfer of the unit to the owner if the 
                owner--
                          (i) will occupy the unit as a primary 
                        residence; and
                          (ii) has provided the tenant a notice 
                        to vacate at least 90 days before the 
                        effective date of such notice.;
                  (D) shall provide that during the term of the 
                lease, any criminal activity that threatens the 
                health, safety, or right to peaceful enjoyment 
                of the premises by other tenants, any criminal 
                activity that threatens the health, safety, or 
                right to peaceful enjoyment of their residences 
                by persons residing in the immediate vicinity 
                of the premises, or any violent or drug-related 
                criminal activity on or near such premises, 
                engaged in by a tenant of any unit, any member 
                of the tenant's household, or any guest or 
                other person under the tenant's control, shall 
                be cause for termination of tenancy;
                  (E) shall provide that any termination of 
                tenancy under this subsection shall be preceded 
                by the provision of written notice by the owner 
                to the tenant specifying the grounds for that 
                action, and any relief shall be consistent with 
                applicable State and local law; and
                  (F) may include any addenda required by the 
                Secretary to set forth the provisions of this 
                subsection. In the case of any foreclosure on 
                any federally-related mortgage loan (as that 
                term is defined in section 3 of the Real Estate 
                Settlement Procedures Act of 1974 (12 U.S.C. 
                2602)) or on any residential real property in 
                which a recipient of assistance under this 
                subsection resides, the immediate successor in 
                interest in such property pursuant to the 
                foreclosure shall assume such interest subject 
                to the lease between the prior owner and the 
                tenant and to the housing assistance payments 
                contract between the prior owner and the public 
                housing agency for the occupied unit, except 
                that this provision and the provisions related 
                to foreclosure in subparagraph (C) shall not 
                shall not affect any State or local law that 
                provides longer time periods or other 
                additional protections for tenants.
          (8) Inspection of units by pha's.--
                  [(A) In general.-- Except as provided in 
                paragraph (11), for each dwelling unit for 
                which a housing assistance payment contract is 
                established under this subsection, the public 
                housing agency shall inspect the unit before 
                any assistance payment is made to determine 
                whether the dwelling unit meets the housing 
                quality standards under subparagraph (B).]
                  (A) Initial inspection.--
                          (i) In general.-- For each dwelling 
                        unit for which a housing assistance 
                        payment contract is established under 
                        this subsection, the public housing 
                        agency (or other entity pursuant to 
                        paragraph (11)) shall inspect the unit 
                        before any assistance payment is made 
                        to determine whether the dwelling unit 
                        meets the housing quality standards 
                        under subparagraph (B), except as 
                        provided in clause (ii) or (iii) of 
                        this subparagraph.
                          (ii) Correction of non-life-
                        threatening conditions.-- In the case 
                        of any dwelling unit that is 
                        determined, pursuant to an inspection 
                        under clause (i), not to meet the 
                        housing quality standards under 
                        subparagraph (B), assistance payments 
                        may be made for the unit 
                        notwithstanding subparagraph (C) if 
                        failure to meet such standards is a 
                        result only of non-life-threatening 
                        conditions, as such conditions are 
                        established by the Secretary. A public 
                        housing agency making assistance 
                        payments pursuant to this clause for a 
                        dwelling unit shall, 30 days after the 
                        beginning of the period for which such 
                        payments are made, withhold any 
                        assistance payments for the unit if any 
                        deficiency resulting in noncompliance 
                        with the housing quality standards has 
                        not been corrected by such time. The 
                        public housing agency shall recommence 
                        assistance payments when such 
                        deficiency has been corrected, and may 
                        use any payments withheld to make 
                        assistance payments relating to the 
                        period during which payments were 
                        withheld.
                          (iii) Use of alternative inspection 
                        method for interim period.-- In the 
                        case of any property that within the 
                        previous 24 months has met the 
                        requirements of an inspection that 
                        qualifies as an alternative inspection 
                        method pursuant to subparagraph (E), a 
                        public housing agency may authorize 
                        occupancy before the inspection under 
                        clause (i) has been completed, and may 
                        make assistance payments retroactive to 
                        the beginning of the lease term after 
                        the unit has been determined pursuant 
                        to an inspection under clause (i) to 
                        meet the housing quality standards 
                        under subparagraph (B). This clause may 
                        not be construed to exempt any dwelling 
                        unit from compliance with the 
                        requirements of subparagraph (D).
                  (B) Housing quality standards.-- The housing 
                quality standards under this subparagraph are 
                standards for safe and habitable housing 
                established--
                          (i) by the Secretary for purposes of 
                        this subsection; or
                          (ii) by local housing codes or by 
                        codes adopted by public housing 
                        agencies that--
                                  (I) meet or exceed housing 
                                quality standards, except that 
                                the Secretary may waive the 
                                requirement under this 
                                subclause to significantly 
                                increase access to affordable 
                                housing and to expand housing 
                                opportunities for families 
                                assisted under this subsection, 
                                except where such waiver could 
                                adversely affect the health or 
                                safety of families assisted 
                                under this subsection; and
                                  (II) do not severely restrict 
                                housing choice
                  (C) Inspection.-- The determination required 
                under subparagraph (A) shall be made by the 
                public housing agency (or other entity, as 
                provided in paragraph (11)) pursuant to an 
                inspection of the dwelling unit conducted 
                before any assistance payment is made for the 
                unit. Inspections of dwelling units under this 
                subparagraph shall be made before the 
                expiration of the 15-day period beginning upon 
                a request by the resident or landlord to the 
                public housing agency or, in the case of any 
                public housing agency that provides assistance 
                under this subsection on behalf of more than 
                1250 families, before the expiration of a 
                reasonable period beginning upon such request. 
                The performance of the agency in meeting the 
                15-day inspection deadline shall be taken into 
                consideration in assessing the performance of 
                the agency.
                  (D) Biennial inspections.--
                          (i) Requirement.-- Each public 
                        housing agency providing assistance 
                        under this subsection (or other entity, 
                        as provided in paragraph (11)) shall, 
                        for each assisted dwelling unit, make 
                        inspections not less often than 
                        biennially during the term of the 
                        housing assistance payments contract 
                        for the unit to determine whether the 
                        unit is maintained in accordance with 
                        the requirements under subparagraph 
                        (A).
                          (ii) Use of alternative inspection 
                        method.-- The requirements under clause 
                        (i) may be complied with by use of 
                        inspections that qualify as an 
                        alternative inspection method pursuant 
                        to subparagraph (E).
                          (iii) Records.-- The public housing 
                        agency (or other entity) shall retain 
                        the records of the inspection for a 
                        reasonable time, as determined by the 
                        Secretary, and shall make the records 
                        available upon request to the 
                        Secretary, the Inspector General for 
                        the Department of Housing and Urban 
                        Development, and any auditor conducting 
                        an audit under section 5(h).
                          (iv) Mixed-finance properties.-- The 
                        Secretary may adjust the frequency of 
                        inspections for mixed-finance 
                        properties assisted with vouchers under 
                        paragraph (13) to facilitate the use of 
                        the alternative inspections in 
                        subparagraph (E).
                  (E) Alternative inspection method.-- An 
                inspection of a property shall qualify as an 
                alternative inspection method for purposes of 
                this subparagraph if--
                          (i) the inspection was conducted 
                        pursuant to requirements under a 
                        Federal, State, or local housing 
                        program (including the Home investment 
                        partnership program under title II of 
                        the Cranston-Gonzalez National 
                        Affordable Housing Act and the low-
                        income housing tax credit program under 
                        section 42 of the Internal Revenue Code 
                        of 1986); and
                          (ii) pursuant to such inspection, the 
                        property was determined to meet the 
                        standards or requirements regarding 
                        housing quality or safety applicable to 
                        properties assisted under such program, 
                        and, if a non-Federal standard or 
                        requirement was used, the public 
                        housing agency has certified to the 
                        Secretary that such standard or 
                        requirement provides the same (or 
                        greater) protection to occupants of 
                        dwelling units meeting such standard or 
                        requirement as would the housing 
                        quality standards under subparagraph 
                        (B).
                  (F) Interim inspections.-- Upon notification 
                to the public housing agency, by a family (on 
                whose behalf tenant-based rental assistance is 
                provided under this subsection) or by a 
                government official, that the dwelling unit for 
                which such assistance is provided does not 
                comply with the housing quality standards under 
                subparagraph (B), the public housing agency 
                shall inspect the dwelling unit--
                          (i) in the case of any condition that 
                        is life-threatening, within 24 hours 
                        after the agency's receipt of such 
                        notification, unless waived by the 
                        Secretary in extraordinary 
                        circumstances; and
                          (ii) in the case of any condition 
                        that is not life-threatening, within a 
                        reasonable time frame, as determined by 
                        the Secretary.
                  (G) Enforcement of housing quality 
                standards.--
                          (i) Determination of noncompliance.-- 
                        A dwelling unit that is covered by a 
                        housing assistance payments contract 
                        under this subsection shall be 
                        considered, for purposes of 
                        subparagraphs (D) and (F), to be in 
                        noncompliance with the housing quality 
                        standards under subparagraph (B) if--
                                  (I) the public housing agency 
                                or an inspector authorized by 
                                the State or unit of local 
                                government determines upon 
                                inspection of the unit that the 
                                unit fails to comply with such 
                                standards;
                                  (II) the agency or inspector 
                                notifies the owner of the unit 
                                in writing of such failure to 
                                comply; and
                                  (III) the failure to comply 
                                is not corrected--
                                          (aa) in the case of 
                                        any such failure that 
                                        is a result of life-
                                        threatening conditions, 
                                        within 24 hours after 
                                        such notice has been 
                                        provided; and
                                          (bb) in the case of 
                                        any such failure that 
                                        is a result of non-
                                        life-threatening 
                                        conditions, within 30 
                                        days after such notice 
                                        has been provided or 
                                        such other reasonable 
                                        longer period as the 
                                        public housing agency 
                                        may establish.
                          (ii) Withholding of assistance 
                        amounts during correction.-- The public 
                        housing agency may withhold assistance 
                        amounts under this subsection with 
                        respect to a dwelling unit for which a 
                        notice pursuant to clause (i)(II), of 
                        failure to comply with housing quality 
                        standards under subparagraph (B) as 
                        determined pursuant to an inspection 
                        conducted under subparagraph (D) or 
                        (F), has been provided. If the unit is 
                        brought into compliance with such 
                        housing quality standards during the 
                        periods referred to in clause (i)(III), 
                        the public housing agency shall 
                        recommence assistance payments and may 
                        use any amounts withheld during the 
                        correction period to make assistance 
                        payments relating to the period during 
                        which payments were withheld.
                          (iii) Abatement of assistance 
                        amounts.-- The public housing agency 
                        shall abate all of the assistance 
                        amounts under this subsection with 
                        respect to a dwelling unit that is 
                        determined, pursuant to clause (i) of 
                        this subparagraph, to be in 
                        noncompliance with housing quality 
                        standards under subparagraph (B). Upon 
                        completion of repairs by the public 
                        housing agency or the owner sufficient 
                        so that the dwelling unit complies with 
                        such housing quality standards, the 
                        agency shall recommence payments under 
                        the housing assistance payments 
                        contract to the owner of the dwelling 
                        unit.
                          (iv) Notification.-- If a public 
                        housing agency providing assistance 
                        under this subsection abates rental 
                        assistance payments pursuant to clause 
                        (iii) with respect to a dwelling unit, 
                        the agency shall, upon commencement of 
                        such abatement--
                                  (I) notify the tenant and the 
                                owner of the dwelling unit 
                                that--
                                          (aa) such abatement 
                                        has commenced; and
                                          (bb) if the dwelling 
                                        unit is not brought 
                                        into compliance with 
                                        housing quality 
                                        standards within 60 
                                        days after the 
                                        effective date of the 
                                        determination of 
                                        noncompliance under 
                                        clause (i) or such 
                                        reasonable longer 
                                        period as the agency 
                                        may establish, the 
                                        tenant will have to 
                                        move; and
                                  (II) issue the tenant the 
                                necessary forms to allow the 
                                tenant to move to another 
                                dwelling unit and transfer the 
                                rental assistance to that unit.
                          (v) Protection of tenants.-- An owner 
                        of a dwelling unit may not terminate 
                        the tenancy of any tenant because of 
                        the withholding or abatement of 
                        assistance pursuant to this 
                        subparagraph. During the period that 
                        assistance is abated pursuant to this 
                        subparagraph, the tenant may terminate 
                        the tenancy by notifying the owner.
                          (vi) Termination of lease or 
                        assistance payments contract.-- If 
                        assistance amounts under this section 
                        for a dwelling unit are abated pursuant 
                        to clause (iii) and the owner does not 
                        correct the noncompliance within 60 
                        days after the effective date of the 
                        determination of noncompliance under 
                        clause (i), or such other reasonable 
                        longer period as the public housing 
                        agency may establish, the agency shall 
                        terminate the housing assistance 
                        payments contract for the dwelling 
                        unit.
                          (vii) Relocation.--
                                  (I) Lease of new unit.-- The 
                                agency shall provide the family 
                                residing in such a dwelling 
                                unit a period of 90 days or 
                                such longer period as the 
                                public housing agency 
                                determines is reasonably 
                                necessary to lease a new unit, 
                                beginning upon termination of 
                                the contract, to lease a new 
                                residence with tenant-based 
                                rental assistance under this 
                                section.
                                  (II) Availability of public 
                                housing units.-- If the family 
                                is unable to lease such a new 
                                residence during such period, 
                                the public housing agency 
                                shall, at the option of the 
                                family, provide such family a 
                                preference for occupancy in a 
                                dwelling unit of public housing 
                                that is owned or operated by 
                                the agency that first becomes 
                                available for occupancy after 
                                the expiration of such period.
                                  (III) Assistance in finding 
                                unit.-- The public housing 
                                agency may provide assistance 
                                to the family in finding a new 
                                residence, including use of up 
                                to two months of any assistance 
                                amounts withheld or abated 
                                pursuant to clause (ii) or 
                                (iii), respectively, for costs 
                                directly associated with 
                                relocation of the family to a 
                                new residence, which shall 
                                include security deposits as 
                                necessary and may include 
                                reimbursements for reasonable 
                                moving expenses incurred by the 
                                household, as established by 
                                the Secretary. The agency may 
                                require that a family receiving 
                                assistance for a security 
                                deposit shall remit, to the 
                                extent of such assistance, the 
                                amount of any security deposit 
                                refunds made by the owner of 
                                the dwelling unit for which the 
                                lease was terminated.
                          (viii) Tenant-caused damages.-- If a 
                        public housing agency determines that 
                        any damage to a dwelling unit that 
                        results in a failure of the dwelling 
                        unit to comply with housing quality 
                        standards under subparagraph (B), other 
                        than any damage resulting from ordinary 
                        use, was caused by the tenant, any 
                        member of the tenant's household, or 
                        any guest or other person under the 
                        tenant's control, the agency may waive 
                        the applicability of this subparagraph, 
                        except that this clause shall not 
                        exonerate a tenant from any liability 
                        otherwise existing under applicable law 
                        for damages to the premises caused by 
                        such tenant.
                          (ix) Applicability.-- This 
                        subparagraph shall apply to any 
                        dwelling unit for which a housing 
                        assistance payments contract is entered 
                        into or renewed after the date of the 
                        effectiveness of the regulations 
                        implementing this subparagraph.
                  [(G)] (H) Inspection guidelines.-- The 
                Secretary shall establish procedural guidelines 
                and performance standards to facilitate 
                inspections of dwelling units and conform such 
                inspections with practices utilized in the 
                private housing market. Such guidelines and 
                standards shall take into consideration 
                variations in local laws and practices of 
                public housing agencies and shall provide 
                flexibility to authorities appropriate to 
                facilitate efficient provision of assistance 
                under this subsection.
          (9) Vacated units.-- If an assisted family vacates a 
        dwelling unit for which rental assistance is provided 
        under a housing assistance payment contract before the 
        expiration of the term of the lease for the unit, 
        rental assistance pursuant to such contract may not be 
        provided for the unit after the month during which the 
        unit was vacated.
          (10) Rent.--
                  (A) Reasonableness.-- The rent for dwelling 
                units for which a housing assistance payment 
                contract is established under this subsection 
                shall be reasonable in comparison with rents 
                charged for comparable dwelling units in the 
                private, unassisted local market.
                  (B) Negotiations.-- A public housing agency 
                (or other entity, as provided in paragraph 
                (11)) shall, at the request of a family 
                receiving tenant-based assistance under this 
                subsection, assist that family in negotiating a 
                reasonable rent with a dwelling unit owner. A 
                public housing agency (or such other entity) 
                shall review the rent for a unit under 
                consideration by the family (and all rent 
                increases for units under lease by the family) 
                to determine whether the rent (or rent 
                increase) requested by the owner is reasonable. 
                If a public housing agency (or other such 
                entity) determines that the rent (or rent 
                increase) for a dwelling unit is not 
                reasonable, the public housing agency (or other 
                such entity) shall not make housing assistance 
                payments to the owner under this subsection 
                with respect to that unit.
                  (C) Units exempt from local rent control.-- 
                If a dwelling unit for which a housing 
                assistance payment contract is established 
                under this subsection is exempt from local rent 
                control provisions during the term of that 
                contract, the rent for that unit shall be 
                reasonable in comparison with other units in 
                the market area that are exempt from local rent 
                control provisions.
                  (D) Timely payments.-- Each public housing 
                agency shall make timely payment of any amounts 
                due to a dwelling unit owner under this 
                subsection. The housing assistance payment 
                contract between the owner and the public 
                housing agency may provide for penalties for 
                the late payment of amounts due under the 
                contract, which shall be imposed on the public 
                housing agency in accordance with generally 
                accepted practices in the local housing market.
                  (E) Penalties.-- Unless otherwise authorized 
                by the Secretary, each public housing agency 
                shall pay any penalties from administrative 
                fees collected by the public housing agency, 
                except that no penalty shall be imposed if the 
                late payment is due to factors that the 
                Secretary determines are beyond the control of 
                the public housing agency.
                  (F) Tax credit projects.-- In the case of a 
                dwelling unit receiving tax credits pursuant to 
                section 42 of the Internal Revenue Code of 1986 
                or for which assistance is provided under 
                subtitle A of title II of the Cranston Gonzalez 
                National Affordable Housing Act of 1990, for 
                which a housing assistance contract not subject 
                to paragraph (13) of this subsection is 
                established, rent reasonableness shall be 
                determined as otherwise provided by this 
                paragraph, except that--
                          (i) comparison with rent for units in 
                        the private, unassisted local market 
                        shall not be required if the rent is 
                        equal to or less than the rent for 
                        other comparable units receiving such 
                        tax credits or assistance in the 
                        project that are not occupied by 
                        families assisted with tenant-based 
                        assistance under this subsection; and
                          (ii) the rent shall not be considered 
                        reasonable for purposes of this 
                        paragraph if it exceeds the greater 
                        of--
                                  (I) the rents charged for 
                                other comparable units 
                                receiving such tax credits or 
                                assistance in the project that 
                                are not occupied by families 
                                assisted with tenant-based 
                                assistance under this 
                                subsection; and
                                  (II) the payment standard 
                                established by the public 
                                housing agency for a unit of 
                                the size involved.
          [(11) Leasing of units owned by pha.--If]
          (11) Leasing of units owned by pha._
                  (A) Inspections and rent determinations._If 
                an eligible family assisted under this 
                subsection leases a dwelling unit (other than a 
                public housing dwelling unit) that is owned by 
                a public housing agency administering 
                assistance under this subsection, the Secretary 
                shall require the unit of general local 
                government or another entity approved by the 
                Secretary, to make inspections required under 
                paragraph (8) and rent determinations required 
                under paragraph (10). The agency shall be 
                responsible for any expenses of such 
                inspections and determinations.
                  (B) Units owned by pha.-- For purposes of 
                this subsection, the term ``owned by a public 
                housing agency'' means, with respect to a 
                dwelling unit, that the dwelling unit is in a 
                project that is owned by such agency, by an 
                entity wholly controlled by such agency, or by 
                a limited liability company or limited 
                partnership in which such agency (or an entity 
                wholly controlled by such agency) holds a 
                controlling interest in the managing member or 
                general partner. A dwelling unit shall not be 
                deemed to be owned by a public housing agency 
                for purposes of this subsection because the 
                agency holds a fee interest as ground lessor in 
                the property on which the unit is situated, 
                holds a security interest under a mortgage or 
                deed of trust on the unit, or holds a non-
                controlling interest in an entity which owns 
                the unit or in the managing member or general 
                partner of an entity which owns the unit.
          (12) Assistance for rental of manufactured housing.--
                  (A) In general.-- A public housing agency may 
                make assistance payments in accordance with 
                this subsection on behalf of a family that 
                utilizes a manufactured home as a principal 
                place of residence. Such payments may be made 
                only for the rental of the real property on 
                which the manufactured home owned by any such 
                family is located.
                  (B) Rent calculation.--
                          (i) Charges included.-- For 
                        assistance pursuant to this paragraph, 
                        the rent for the space on which a 
                        manufactured home is located and with 
                        respect to which assistance payments 
                        are to be made shall include 
                        maintenance and management charges and 
                        tenant-paid utilities.
                          (ii) Payment standard.-- The public 
                        housing agency shall establish a 
                        payment standard for the purpose of 
                        determining the monthly assistance that 
                        may be paid for any family under this 
                        paragraph. The payment standard may not 
                        exceed an amount approved or 
                        established by the Secretary.
                          (iii) Monthly assistance payment.-- 
                        The monthly assistance payment for a 
                        family assisted under this paragraph 
                        shall be determined in accordance with 
                        paragraph (2).
          (13) PHA project-based assistance.--
                  (A) In general.-- A public housing agency may 
                use amounts provided under an annual 
                contributions contract under this subsection to 
                enter into a housing assistance payment 
                contract with respect to an existing, newly 
                constructed, or rehabilitated [structure] 
                project , that is attached to the [structure] 
                project , subject to the limitations and 
                requirements of this paragraph.
                  [(B) Percentage limitation.-- Not more than 
                20 percent of the funding available for tenant-
                based assistance under this section that is 
                administered by the agency may be attached to 
                structures pursuant to this paragraph.]
                  (B) Percentage limitation.--
                          (i) In general.-- Subject to clause 
                        (ii), a public housing agency may use 
                        for project-based assistance under this 
                        paragraph not more than 20 percent of 
                        the authorized units for the agency.
                          (ii) Exception.-- A public housing 
                        agency may use up to an additional 10 
                        percent of the authorized units for the 
                        agency for project-based assistance 
                        under this paragraph, to provide units 
                        that house individuals and families 
                        that meet the definition of homeless 
                        under section 103 of the McKinney-Vento 
                        Homeless Assistance Act (42 U.S.C. 
                        11302), that house families with 
                        veterans, that provide supportive 
                        housing to persons with disabilities or 
                        elderly persons, or that are located in 
                        areas where vouchers under this 
                        subsection are difficult to use, as 
                        specified in subparagraph (D)(ii)(II). 
                        Any units of project-based assistance 
                        that are attached to units previously 
                        subject to federally required rent 
                        restrictions or receiving another type 
                        of long-term housing subsidy provided 
                        by the Secretary shall not count toward 
                        the percentage limitation under clause 
                        (i) of this subparagraph. The Secretary 
                        may, by regulation, establish 
                        additional categories for the exception 
                        under this clause.
                  (C) Consistency with pha plan and other 
                goals.-- A public housing agency may approve a 
                housing assistance payment contract pursuant to 
                this paragraph only if the contract is 
                consistent with--
                          (i) the public housing agency plan 
                        for the agency approved under section 
                        5A; and
                          (ii) the goal of deconcentrating 
                        poverty and expanding housing and 
                        economic opportunities.
                  [(D) Income mixing requirement.--
                          [(i) In general.-- Not more than 25 
                        percent of the dwelling units in any 
                        project may be assisted under a housing 
                        assistance payment contract for 
                        project-based assistance pursuant to 
                        this paragraph. For purposes of this 
                        subparagraph, the term ``project'' 
                        means a single building, multiple 
                        contiguous buildings, or multiple 
                        buildings on contiguous parcels of 
                        land.
                          [(ii) Exceptions.-- The limitation 
                        under clause (i) shall not apply in the 
                        case of assistance under a contract for 
                        housing consisting of single family 
                        properties or for dwelling units that 
                        are specifically made available for 
                        households comprised of elderly 
                        families, disabled families, and 
                        families receiving supportive 
                        services.]
                  (D) Income-mixing requirement.--
                          (i) In general.-- Except as provided 
                        in clause (ii), not more than the 
                        greater of 25 dwelling units or 25 
                        percent of the dwelling units in any 
                        project may be assisted under a housing 
                        assistance payment contract for 
                        project-based assistance pursuant to 
                        this paragraph. For purposes of this 
                        subparagraph, the term ``project'' 
                        means a single building, multiple 
                        contiguous buildings, or multiple 
                        buildings on contiguous parcels of 
                        land.
                          (ii) Exceptions.--
                                  (I) Certain families.-- The 
                                limitation under clause (i) 
                                shall not apply to dwelling 
                                units assisted under a contract 
                                that are exclusively made 
                                available to elderly families 
                                or to households eligible for 
                                supportive services that are 
                                made available to the assisted 
                                residents of the project, 
                                according to standards for such 
                                services the Secretary may 
                                establish.
                                  (II) Certain areas.-- With 
                                respect to areas in which 
                                tenant-based vouchers for 
                                assistance under this 
                                subsection are difficult to 
                                use, as determined by the 
                                Secretary, and with respect to 
                                census tracts with a poverty 
                                rate of 20 percent or less, 
                                clause (i) shall be applied by 
                                substituting ``40 percent'' for 
                                ``25 percent'', and the 
                                Secretary may, by regulation, 
                                establish additional 
                                conditions.
                                  (III) Certain contracts.-- 
                                The limitation under clause (i) 
                                shall not apply with respect to 
                                contracts or renewal of 
                                contracts under which a greater 
                                percentage of the dwelling 
                                units in a project were 
                                assisted under a housing 
                                assistance payment contract for 
                                project-based assistance 
                                pursuant to this paragraph on 
                                the date of the enactment of 
                                the Housing Opportunity Through 
                                Modernization Act of 2015.
                                  (IV) Certain properties.-- 
                                Any units of project-based 
                                assistance under this paragraph 
                                that are attached to units 
                                previously subject to federally 
                                required rent restrictions or 
                                receiving other project-based 
                                assistance provided by the 
                                Secretary shall not count 
                                toward the percentage 
                                limitation imposed by this 
                                subparagraph (D).
                          (iii) Additional monitoring and 
                        oversight requirements.-- The Secretary 
                        may establish additional requirements 
                        for monitoring and oversight of 
                        projects in which more than 40 percent 
                        of the dwelling units are assisted 
                        under a housing assistance payment 
                        contract for project-based assistance 
                        pursuant to this paragraph.
                  (E) Resident choice requirement.-- A housing 
                assistance payment contract pursuant to this 
                paragraph shall provide as follows:
                          (i) Mobility.-- Each low-income 
                        family occupying a dwelling unit 
                        assisted under the contract may move 
                        from the housing at any time after the 
                        family has occupied the dwelling unit 
                        for 12 months.
                          (ii) Continued assistance.-- Upon 
                        such a move, the public housing agency 
                        shall provide the low-income family 
                        with tenant-based rental assistance 
                        under this section or such other 
                        tenant-based rental assistance that is 
                        subject to comparable income, 
                        assistance, rent contribution, 
                        affordability, and other requirements, 
                        as the Secretary shall provide by 
                        regulation. If such rental assistance 
                        is not immediately available to fulfill 
                        the requirement under the preceding 
                        sentence with respect to a low-income 
                        family, such requirement may be met by 
                        providing the family priority to 
                        receive the next voucher or other 
                        tenant-based rental assistance amounts 
                        that become available under the program 
                        used to fulfill such requirement.
                  [(F) Contract term.-- A housing assistance 
                payment contract pursuant to this paragraph 
                between a public housing agency and the owner 
                of a structure may have a term of up to 15 
                years, subject to the availability of 
                sufficient appropriated funds for the purpose 
                of renewing expiring contracts for assistance 
                payments, as provided in appropriations Acts 
                and in the agency's annual contributions 
                contract with the Secretary, and to annual 
                compliance with the inspection requirements 
                under paragraph (8), except that the agency 
                shall not be required to make annual 
                inspections of each assisted unit in the 
                development. The contract may specify 
                additional conditions for its continuation. If 
                the units covered by the contract are owned by 
                the agency, the term of the contract shall be 
                agreed upon by the agency and the unit of 
                general local government or other entity 
                approved by the Secretary in the manner 
                provided under paragraph (11).]
                  (F) Contract term.--
                          (i) Term.-- A housing assistance 
                        payment contract pursuant to this 
                        paragraph between a public housing 
                        agency and the owner of a project may 
                        have a term of up to 20 years, subject 
                        to--
                                  (I) the availability of 
                                sufficient appropriated funds 
                                for the purpose of renewing 
                                expiring contracts for 
                                assistance payments, as 
                                provided in appropriation Acts 
                                and in the agency's annual 
                                contributions contract with the 
                                Secretary, provided that in the 
                                event of insufficient 
                                appropriated funds, payments 
                                due under contracts under this 
                                paragraph shall take priority 
                                if other cost-saving measures 
                                that do not require the 
                                termination of an existing 
                                contract are available to the 
                                agency; and
                                  (II) compliance with the 
                                inspection requirements under 
                                paragraph (8), except that the 
                                agency shall not be required to 
                                make biennial inspections of 
                                each assisted unit in the 
                                development.
                          (ii) Addition of eligible units.-- 
                        Subject to the limitations of 
                        subparagraphs (B) and (D), the agency 
                        and the owner may add eligible units 
                        within the same project to a housing 
                        assistance payments contract at any 
                        time during the term thereof without 
                        being subject to any additional 
                        competitive selection procedures.
                          (iii) Housing under construction or 
                        recently constructed.-- An agency may 
                        enter into a housing assistance 
                        payments contract with an owner for any 
                        unit that does not qualify as existing 
                        housing and is under construction or 
                        recently has been constructed whether 
                        or not the agency has executed an 
                        agreement to enter into a contract with 
                        the owner, provided that the owner 
                        demonstrates compliance with applicable 
                        requirements prior to execution of the 
                        housing assistance payments contract. 
                        This clause shall not subject a housing 
                        assistance payments contract for 
                        existing housing under this paragraph 
                        to such requirements or otherwise limit 
                        the extent to which a unit may be 
                        assisted as existing housing.
                          (iv) Additional conditions.-- The 
                        contract may specify additional 
                        conditions, including with respect to 
                        continuation, termination, or 
                        expiration, and shall specify that upon 
                        termination or expiration of the 
                        contract without extension, each 
                        assisted family may elect to use its 
                        assistance under this subsection to 
                        remain in the same project if its unit 
                        complies with the inspection 
                        requirements under paragraph (8), the 
                        rent for the unit is reasonable as 
                        required by paragraph (10)(A), and the 
                        family pays its required share of the 
                        rent and the amount, if any, by which 
                        the unit rent (including the amount 
                        allowed for tenant-based utilities) 
                        exceeds the applicable payment 
                        standard.
                  (G) Extension of contract term.-- A public 
                housing agency may enter into a contract with 
                the owner of a [structure] project assisted 
                under a housing assistance payment contract 
                pursuant to this paragraph to extend the term 
                of the underlying housing assistance payment 
                contract for such period as the agency 
                determines to be appropriate to achieve long-
                term affordability of the housing or to expand 
                housing opportunities. Such contract may, at 
                the election of the public housing agency and 
                the owner of the [structure] project , specify 
                that such contract shall be extended for 
                renewal terms of up to [15 years] 20 years 
                each, if the agency makes the determination 
                required by this subparagraph and the owner is 
                in compliance with the terms of the contract. 
                Such a contract shall provide that the 
                extension of such term shall be contingent upon 
                the future availability of appropriated funds 
                for the purpose of renewing expiring contracts 
                for assistance payments, as provided in 
                appropriations Acts, and may obligate the owner 
                to have such extensions of the underlying 
                housing assistance payment contract accepted by 
                the owner and the successors in interest of the 
                owner. A public housing agency may agree to 
                enter into such a contract at the time it 
                enters into the initial agreement for a housing 
                assistance payment contract or at any time 
                thereafter that is before the expiration of the 
                housing assistance payment contract.
                  (H) Rent calculation.-- A housing assistance 
                payment contract pursuant to this paragraph 
                shall establish rents for each unit assisted in 
                an amount that does not exceed 110 percent of 
                the applicable fair market rental (or any 
                exception payment standard approved by the 
                Secretary pursuant to paragraph (1)(D)), except 
                that if a contract covers a dwelling unit that 
                has been allocated low-income housing tax 
                credits pursuant to section 42 of the Internal 
                Revenue Code of 1986 (26 U.S.C. 42) and is not 
                located in a qualified census tract (as such 
                term is defined in subsection (d) of such 
                section 42), the rent for such unit may be 
                established at any level that does not exceed 
                the rent charged for comparable units in the 
                building that also receive the low-income 
                housing tax credit but do not have additional 
                rental assistance, except that in the case of a 
                contract unit that has been allocated low-
                income housing tax credits and for which the 
                rent limitation pursuant to such section 42 is 
                less than the amount that would otherwise be 
                permitted under this subparagraph, the rent for 
                such unit may, in the sole discretion of a 
                public housing agency, be established at the 
                higher section 8 rent, subject only to 
                paragraph (10)(A). The rents established by 
                housing assistance payment contracts pursuant 
                to this paragraph may vary from the payment 
                standards established by the public housing 
                agency pursuant to paragraph (1)(B), but shall 
                be subject to paragraph (10)(A).
                  [(I) Rent adjustments.-- A housing assistance 
                payments contract pursuant to this paragraph 
                shall provide for rent adjustments, except 
                that--
                          [(i) the adjusted rent for any unit 
                        assisted shall be reasonable in 
                        comparison with rents charged for 
                        comparable dwelling units in the 
                        private, unassisted, local market and 
                        may not exceed the maximum rent 
                        permitted under subparagraph (H), 
                        except that the contract may provide 
                        that the maximum rent permitted for a 
                        dwelling unit shall not be less than 
                        the initial rent for the dwelling unit 
                        under the initial housing assistance 
                        payments contract covering the unit; 
                        and
                          [(ii) the provisions of subsection 
                        (c)(2)(C) shall not apply.]
                  (I) Rent adjustments.-- A housing assistance 
                payments contract pursuant to this paragraph 
                entered into after the date of the enactment of 
                the Housing Opportunity Through Modernization 
                Act of 2015 shall provide for annual rent 
                adjustments upon the request of the owner, 
                except that--
                          (i) by agreement of the parties, a 
                        contract may allow a public housing 
                        agency to adjust the rent for covered 
                        units using an operating cost 
                        adjustment factor established by the 
                        Secretary pursuant to section 524(c) of 
                        the Multifamily Assisted Housing Reform 
                        and Affordability Act of 1997 (which 
                        shall not result in a negative 
                        adjustment), in which case the contract 
                        may require an additional adjustment, 
                        if requested, up to the reasonable rent 
                        periodically during the term of the 
                        contract, and shall require such an 
                        adjustment, if requested, upon 
                        extension pursuant to subparagraph (G);
                          (ii) the adjusted rent shall not 
                        exceed the maximum rent permitted under 
                        subparagraph (H);
                          (iii) the contract may provide that 
                        the maximum rent permitted for a 
                        dwelling unit shall not be less than 
                        the initial rent for the dwelling unit 
                        under the initial housing assistance 
                        payments contract covering the units; 
                        and
                          (iv) the provisions of subsection 
                        (c)(2)(C) shall not apply.
                  (J) Tenant selection.-- A public housing 
                agency [shall] may select families to receive 
                project-based assistance pursuant to this 
                paragraph from its waiting list for assistance 
                under this subsection or may permit owners to 
                select applicants from site-based waiting lists 
                as specified in this subparagraph . Eligibility 
                for such project-based assistance shall be 
                subject to the provisions of section 16(b) that 
                apply to tenant-based assistance. [The agency 
                may establish preferences or criteria for 
                selection for a unit assisted under this 
                paragraph that are consistent with the public 
                housing agency plan for the agency approved 
                under section 5A.] The agency or owner may 
                establish preferences or criteria for selection 
                for a unit assisted under this paragraph that 
                are consistent with the public housing agency 
                plan for the agency approved under section 5A 
                and that give preference to families who 
                qualify for voluntary services, including 
                disability-specific services, offered in 
                conjunction with assisted units. Any family 
                that rejects an offer of project-based 
                assistance under this paragraph or that is 
                rejected for admission to a [structure] project 
                by the owner or manager of a [structure] 
                project assisted under this paragraph shall 
                retain its place on the waiting list as if the 
                offer had not been made. [The owner or manager 
                of a structure assisted under this paragraph 
                shall not admit any family to a dwelling unit 
                assisted under a contract pursuant to this 
                paragraph other than a family referred by the 
                public housing agency from its waiting list. 
                Subject to its waiting list policies and 
                selection preferences, a public housing agency 
                may place on its waiting list a family referred 
                by the owner or manager of a structure and may 
                maintain a separate waiting list for assistance 
                under this paragraph, but only if all families 
                on the agency's waiting list for assistance 
                under this subsection are permitted to place 
                their names on the separate list.] A public 
                housing agency may establish and utilize 
                procedures for owner-maintained site-based 
                waiting lists, under which applicants may apply 
                at, or otherwise designate to the public 
                housing agency, the project or projects in 
                which they seek to reside, except that all 
                eligible applicants on the waiting list of an 
                agency for assistance under this subsection 
                shall be permitted to place their names on such 
                separate list, subject to policies and 
                procedures established by the Secretary. All 
                such procedures shall comply with title VI of 
                the Civil Rights Act of 1964, the Fair Housing 
                Act, section 504 of the Rehabilitation Act of 
                1973, and other applicable civil rights laws. 
                The owner or manager of a project assisted 
                under this paragraph shall not admit any family 
                to a dwelling unit assisted under a contract 
                pursuant to this paragraph other than a family 
                referred by the public housing agency from its 
                waiting list, or a family on a site-based 
                waiting list that complies with the 
                requirements of this subparagraph. A public 
                housing agency shall disclose to each applicant 
                all other options in the selection of a project 
                in which to reside that are provided by the 
                public housing agency and are available to the 
                applicant.
                  (K) Vacated units.-- Notwithstanding 
                paragraph (9), a housing assistance payment 
                contract pursuant to this paragraph may provide 
                as follows:
                          (i) Payment for vacant units.-- That 
                        the public housing agency may, in its 
                        discretion, continue to provide 
                        assistance under the contract, for a 
                        reasonable period not exceeding 60 
                        days, for a dwelling unit that becomes 
                        vacant, but only: (I) if the vacancy 
                        was not the fault of the owner of the 
                        dwelling unit; and (II) the agency and 
                        the owner take every reasonable action 
                        to minimize the likelihood and extent 
                        of any such vacancy. Rental assistance 
                        may not be provided for a vacant unit 
                        after the expiration of such period.
                          (ii) Reduction of contract.-- That, 
                        if despite reasonable efforts of the 
                        agency and the owner to fill a vacant 
                        unit, no eligible family has agreed to 
                        rent the unit within 120 days after the 
                        owner has notified the agency of the 
                        vacancy, the agency may reduce its 
                        housing assistance payments contract 
                        with the owner by the amount equivalent 
                        to the remaining months of subsidy 
                        attributable to the vacant unit. 
                        Amounts deobligated pursuant to such a 
                        contract provision shall be available 
                        to the agency to provide assistance 
                        under this subsection.
                Eligible applicants for assistance under this 
                subsection may enforce provisions authorized by 
                this subparagraph.
                  (L) Use in cooperative housing and elevator 
                buildings.-- A public housing agency may enter 
                into a housing assistance payments contract 
                under this paragraph with respect to--
                          (i) dwelling units in cooperative 
                        housing; and
                          (ii) notwithstanding subsection (c), 
                        dwelling units in a high-rise elevator 
                        project, including such a project that 
                        is occupied by families with children, 
                        without review and approval of the 
                        contract by the Secretary.
                  (M) Reviews.--
                          (i) Subsidy layering.-- A subsidy 
                        layering review in accordance with 
                        section 102(d) of the Department of 
                        Housing and Urban Development Reform 
                        Act of 1989 (42 U.S.C. 3545(d)) shall 
                        not be required for assistance under 
                        this paragraph in the case of a housing 
                        assistance payments contract for an 
                        existing [structure] project , or if a 
                        subsidy layering review has been 
                        conducted by the applicable State or 
                        local agency.
                          (ii) Environmental review.-- A public 
                        housing agency shall not be required to 
                        undertake any environmental review 
                        before entering into a housing 
                        assistance payments contract under this 
                        paragraph for an existing [structure] 
                        project , except to the extent such a 
                        review is otherwise required by law or 
                        regulation relating to funding other 
                        than housing assistance payments .
                  (N) Structure owned by agency.-- A public 
                housing agency engaged in an initiative to 
                improve, develop, or replace a public housing 
                property or site may attach assistance to an 
                existing, newly constructed, or rehabilitated 
                structure in which the agency has an ownership 
                interest or which the agency has control of 
                without following a competitive process, 
                provided that the agency has notified the 
                public of its intent through its public housing 
                agency plan and subject to the limitations and 
                requirements of this paragraph.
                  (O) Special purpose vouchers.-- A public 
                housing agency that administers vouchers 
                authorized under subsection (o)(19) or (x) of 
                this section may provide such assistance in 
                accordance with the limitations and 
                requirements of this paragraph, without 
                additional requirements for approval by the 
                Secretary.
          (14) Inapplicability to tenant-based assistance.-- 
        Subsection (c) shall not apply to tenant-based 
        assistance under this subsection.
          (15) Homeownership option.--
                  (A) In general.-- A public housing agency 
                providing assistance under this subsection may, 
                at the option of the agency, provide assistance 
                for homeownership under subsection (y).
                  (B) Alternative administration.-- A public 
                housing agency may contract with a nonprofit 
                organization to administer a homeownership 
                program under subsection (y).
          (16) Rental vouchers for relocation of witnesses and 
        victims of crime.--
                  (A) Witnesses.-- Of amounts made available 
                for assistance under this subsection in each 
                fiscal year, the Secretary, in consultation 
                with the Inspector General, shall make 
                available such sums as may be necessary for the 
                relocation of witnesses in connection with 
                efforts to combat crime in public and assisted 
                housing pursuant to requests from law 
                enforcement or prosecution agencies.
                  (B) Victims of crime.--
                          (i) In general.-- Of amounts made 
                        available for assistance under this 
                        section in each fiscal year, the 
                        Secretary shall make available such 
                        sums as may be necessary for the 
                        relocation of families residing in 
                        public housing who are victims of a 
                        crime of violence (as that term is 
                        defined in section 16 of title 18, 
                        United States Code) that has been 
                        reported to an appropriate law 
                        enforcement agency.
                          (ii) Notice.-- A public housing 
                        agency that receives amounts under this 
                        subparagraph shall establish procedures 
                        for providing notice of the 
                        availability of that assistance to 
                        families that may be eligible for that 
                        assistance.
          (17) Deed restrictions.-- Assistance under this 
        subsection may not be used in any manner that abrogates 
        any local deed restriction that applies to any housing 
        consisting of 1 to 4 dwelling units. This paragraph may 
        not be construed to affect the provisions or 
        applicability of the Fair Housing Act.
          (18) Rental assistance for assisted living 
        facilities.--
                  (A) In general.-- A public housing agency may 
                make assistance payments on behalf of a family 
                that uses an assisted living facility as a 
                principal place of residence and that uses such 
                supportive services made available in the 
                facility as the agency may require. Such 
                payments may be made only for covering costs of 
                rental of the dwelling unit in the assisted 
                living facility and not for covering any 
                portion of the cost of residing in such 
                facility that is attributable to service 
                relating to assisted living.
                  (B) Rent calculation.--
                          (i) Charges included.-- For 
                        assistance pursuant to this paragraph, 
                        the rent of the dwelling unit that is 
                        an assisted living facility with 
                        respect to which assistance payments 
                        are made shall include maintenance and 
                        management charges related to the 
                        dwelling unit and tenant-paid 
                        utilities. Such rent shall not include 
                        any charges attributable to services 
                        relating to assisted living.
                          (ii) Payment standard.-- In 
                        determining the monthly assistance that 
                        may be paid under this paragraph on 
                        behalf of any family residing in an 
                        assisted living facility, the public 
                        housing agency shall utilize the 
                        payment standard established under 
                        paragraph (1), for the market area in 
                        which the assisted living facility is 
                        located, for the applicable size 
                        dwelling unit.
                          (iii) Monthly assistance payment.-- 
                        The monthly assistance payment for a 
                        family assisted under this paragraph 
                        shall be determined in accordance with 
                        paragraph (2) (using the rent and 
                        payment standard for the dwelling unit 
                        as determined in accordance with this 
                        subsection), except that a family may 
                        be required at the time the family 
                        initially receives such assistance to 
                        pay rent in an amount exceeding 40 
                        percent of the monthly adjusted income 
                        of the family by such an amount or 
                        percentage that is reasonable given the 
                        services and amenities provided and as 
                        the Secretary deems appropriate..
                  (C) Definition.-- For the purposes of this 
                paragraph, the term ``assisted living 
                facility'' has the meaning given that term in 
                section 232(b) of the National Housing Act (12 
                U.S.C. 1715w(b)), except that such a facility 
                may be contained within a portion of a larger 
                multifamily housing project.
          (19) Rental vouchers for veterans affairs supported 
        housing program.--
                  (A) Set aside.-- Subject to subparagraph (C), 
                the Secretary shall set aside, from amounts 
                made available for rental assistance under this 
                subsection, the amounts specified in 
                subparagraph (B) for use only for providing 
                such assistance through a supported housing 
                program administered in conjunction with the 
                Department of Veterans Affairs. Such program 
                shall provide rental assistance on behalf of 
                homeless veterans who have chronic mental 
                illnesses or chronic substance use disorders, 
                shall require agreement of the veteran to 
                continued treatment for such mental illness or 
                substance use disorder as a condition of 
                receipt of such rental assistance, and shall 
                ensure such treatment and appropriate case 
                management for each veteran receiving such 
                rental assistance.
                  (B) Amount.-- The amount specified in this 
                subparagraph is--
                          (i) for fiscal year 2007, the amount 
                        necessary to provide 500 vouchers for 
                        rental assistance under this 
                        subsection;
                          (ii) for fiscal year 2008, the amount 
                        necessary to provide 1,000 vouchers for 
                        rental assistance under this 
                        subsection;
                          (iii) for fiscal year 2009, the 
                        amount necessary to provide 1,500 
                        vouchers for rental assistance under 
                        this subsection;
                          (iv) for fiscal year 2010, the amount 
                        necessary to provide 2,000 vouchers for 
                        rental assistance under this 
                        subsection; and
                          (v) for fiscal year 2011, the amount 
                        necessary to provide 2,500 vouchers for 
                        rental assistance under this 
                        subsection.
                  (C) Funding through incremental assistance.-- 
                In any fiscal year, to the extent that this 
                paragraph requires the Secretary to set aside 
                rental assistance amounts for use under this 
                paragraph in an amount that exceeds the amount 
                set aside in the preceding fiscal year, such 
                requirement shall be effective only to such 
                extent or in such amounts as are or have been 
                provided in appropriation Acts for such fiscal 
                year for incremental rental assistance under 
                this subsection.
          (20) Collection of utility data.--
                  (A) Publication.-- The Secretary shall, to 
                the extent that data can be collected cost 
                effectively, regularly publish such data 
                regarding utility consumption and costs in 
                local areas as the Secretary determines will be 
                useful for the establishment of allowances for 
                tenant-paid utilities for families assisted 
                under this subsection.
                  (B) Use of data.-- The Secretary shall 
                provide such data in a manner that--
                          (i) avoids unnecessary administrative 
                        burdens for public housing agencies and 
                        owners; and
                          (ii) protects families in various 
                        unit sizes and building types, and 
                        using various utilities, from high rent 
                        and utility cost burdens relative to 
                        income.
  (p) In order to assist elderly families (as defined in 
section 3(b)(3)) who elect to live in a shared housing 
arrangement in which they benefit as a result of sharing the 
facilities of a dwelling with others in a manner that 
effectively and efficiently meets their housing needs and 
thereby reduces their costs of housing, the Secretary shall 
permit assistance provided under the existing housing and 
moderate rehabilitation programs to be used by such families in 
such arrangements. In carrying out this subsection, the 
Secretary shall issue minimum habitability standards for the 
purpose of assuring decent, safe, and sanitary housing for such 
families while taking into account the special circumstances of 
shared housing.
  (q) Administrative Fees.--
          (1) Fee for ongoing costs of administration.--
                  (A) In general.-- The Secretary shall 
                establish fees for the costs of administering 
                the tenant-based assistance, certificate, 
                voucher, and moderate rehabilitation programs 
                under this section.
                  (B) Fiscal year 1999.--
                          (i) Calculation.-- For fiscal year 
                        1999, the fee for each month for which 
                        a dwelling unit is covered by an 
                        assistance contract shall be--
                                  (I) in the case of a public 
                                housing agency that, on an 
                                annual basis, is administering 
                                a program for not more than 600 
                                dwelling units, 7.65 percent of 
                                the base amount; and
                                  (II) in the case of an agency 
                                that, on an annual basis, is 
                                administering a program for 
                                more than 600 dwelling units 
                                (aa) for the first 600 units, 
                                7.65 percent of the base 
                                amount, and (bb) for any 
                                additional dwelling units under 
                                the program, 7.0 percent of the 
                                base amount.
                          (ii) Base amount.-- For purposes of 
                        this subparagraph, the base amount 
                        shall be the higher of--
                                  (I) the fair market rental 
                                established under section 8(c) 
                                of this Act (as in effect 
                                immediately before the 
                                effective date under section 
                                503(a) of the Quality Housing 
                                and Work Responsibility Act of 
                                1998) for fiscal year 1993 for 
                                a 2-bedroom existing rental 
                                dwelling unit in the market 
                                area of the agency, and
                                  (II) the amount that is the 
                                lesser of (aa) such fair market 
                                rental for fiscal year 1994, or 
                                (bb) 103.5 percent of the 
                                amount determined under clause 
                                (i),
                        adjusted based on changes in wage data 
                        or other objectively measurable data 
                        that reflect the costs of administering 
                        the program, as determined by the 
                        Secretary. The Secretary may require 
                        that the base amount be not less than a 
                        minimum amount and not more than a 
                        maximum amount.
                  (C) Subsequent fiscal years.-- For subsequent 
                fiscal years, the Secretary shall publish a 
                notice in the Federal Register, for each 
                geographic area, establishing the amount of the 
                fee that would apply for public housing 
                agencies administering the program, based on 
                changes in wage data or other objectively 
                measurable data that reflect the costs of 
                administering the program, as determined by the 
                Secretary.
                  (D) Increase.-- The Secretary may increase 
                the fee if necessary to reflect the higher 
                costs of administering small programs and 
                programs operating over large geographic areas.
                  (E) Decrease.-- The Secretary may decrease 
                the fee for units owned by a public housing 
                agency to reflect reasonable costs of 
                administration.
          (2) Fee for preliminary expenses.-- The Secretary 
        shall also establish reasonable fees (as determined by 
        the Secretary) for--
                  (A) the costs of preliminary expenses, in the 
                amount of $500, for a public housing agency, 
                except that such fee shall apply to an agency 
                only in the first year that the agency 
                administers a tenant-based assistance program 
                under this section, and only if, immediately 
                before the effective date under section 503(a) 
                of the Quality Housing and Work Responsibility 
                Act of 1998, the agency was not administering a 
                tenant-based assistance program under the 
                United States Housing Act of 1937 (as in effect 
                immediately before such effective date), in 
                connection with its initial increment of 
                assistance received;
                  (B) the costs incurred in assisting families 
                who experience difficulty (as determined by the 
                Secretary) in obtaining appropriate housing 
                under the programs; and
                  (C) extraordinary costs approved by the 
                Secretary.
          (3) Transfer of fees in cases of concurrent 
        geographical jurisdiction.-- In each fiscal year, if 
        any public housing agency provides tenant-based 
        assistance under this section on behalf of a family who 
        uses such assistance for a dwelling unit that is 
        located within the jurisdiction of such agency but is 
        also within the jurisdiction of another public housing 
        agency, the Secretary shall take such steps as may be 
        necessary to ensure that the public housing agency that 
        provides the services for a family receives all or part 
        of the administrative fee under this section (as 
        appropriate).
          (4) Applicability.-- This subsection shall apply to 
        fiscal year 1999 and fiscal years thereafter.
  (r) Portability.--(1) In general.-- (A) Any family receiving 
tenant-based assistance under subsection (o) may receive such 
assistance to rent an eligible dwelling unit if the dwelling 
unit to which the family moves is within any area in which a 
program is being administered under this section.
  (B)(i) Notwithstanding subparagraph (A) and subject to any 
exceptions established under clause (ii) of this subparagraph, 
a public housing agency may require that any family not living 
within the jurisdiction of the public housing agency at the 
time the family applies for assistance from the agency shall, 
during the 12-month period beginning on the date of initial 
receipt of housing assistance made available on behalf of the 
family from such agency, lease and occupy an eligible dwelling 
unit located within the jurisdiction served by the agency.
  (ii) The Secretary may establish such exceptions to the 
authority of public housing agencies established under clause 
(i).
  (2) The public housing agency having authority with respect 
to the dwelling unit to which a family moves under this 
subsection shall have the responsibility of carrying out the 
provisions of this subsection with respect to the family.
  (3) In providing assistance under subsection (o) for any 
fiscal year, the Secretary shall give consideration to any 
reduction in the number of resident families incurred by a 
public housing agency in the preceding fiscal year as a result 
of the provisions of this subsection. The Secretary shall 
establish procedures for the compensation of public housing 
agencies that issue vouchers to families that move into or out 
of the jurisdiction of the public housing agency under 
portability procedures. The Secretary may reserve amounts 
available for assistance under subsection (o) to compensate 
those public housing agencies.
  (4) The provisions of this subsection may not be construed to 
restrict any authority of the Secretary under any other 
provision of law to provide for the portability of assistance 
under this section.
  (5) Lease violations.--A family may not receive a voucher 
from a public housing agency and move to another jurisdiction 
under the tenant-based assistance program if the family has 
moved out of the assisted dwelling unit of the family in 
violation of a lease, except that a family may receive a 
voucher from a public housing agency and move to another 
jurisdiction under the tenant-based assistance program if the 
family has complied with all other obligations of the section 8 
program and has moved out of the assisted dwelling unit in 
order to protect the health or safety of an individual who is 
or has been the victim of domestic violence, dating violence, 
or stalking and who reasonably believed he or she was 
imminently threatened by harm from further violence if he or 
she remained in the assisted dwelling unit.
  (s) In selecting families for the provision of assistance 
under this section (including subsection (o)), a public housing 
agency may not exclude or penalize a family solely because the 
family resides in a public housing project.
  (t) Enhanced Vouchers.--
          (1) In general.-- Enhanced voucher assistance under 
        this subsection for a family shall be voucher 
        assistance under subsection (o), except that under such 
        enhanced voucher assistance--
                  (A) subject only to subparagraph (D), the 
                assisted family shall pay as rent no less than 
                the amount the family was paying on the date of 
                the eligibility event for the project in which 
                the family was residing on such date;
                  (B) the assisted family may elect to remain 
                in the same project in which the family was 
                residing on the date of the eligibility event 
                for the project, and if, during any period the 
                family makes such an election and continues to 
                so reside, the rent for the dwelling unit of 
                the family in such project exceeds the 
                applicable payment standard established 
                pursuant to subsection (o) for the unit, the 
                amount of rental assistance provided on behalf 
                of the family shall be determined using a 
                payment standard that is equal to the rent for 
                the dwelling unit (as such rent may be 
                increased from time-to-time), subject to 
                paragraph (10)(A) of subsection (o) and any 
                other reasonable limit prescribed by the 
                Secretary, except that a limit shall not be 
                considered reasonable for purposes of this 
                subparagraph if it adversely affects such 
                assisted families;
                  (C) subparagraph (B) of this paragraph shall 
                not apply and the payment standard for the 
                dwelling unit occupied by the family shall be 
                determined in accordance with subsection (o) 
                if--
                          (i) the assisted family moves, at any 
                        time, from such project; or
                          (ii) the voucher is made available 
                        for use by any family other than the 
                        original family on behalf of whom the 
                        voucher was provided; and
                  (D) if the [income] annual adjusted income of 
                the assisted family declines to a significant 
                extent, the percentage of [income] annual 
                adjusted income paid by the family for rent 
                shall not exceed the greater of 30 percent or 
                the percentage of [income] annual adjusted 
                income paid at the time of the eligibility 
                event for the project.
          (2) Eligibility event.-- For purposes of this 
        subsection, the term ``eligibility event'' means, with 
        respect to a multifamily housing project, the 
        prepayment of the mortgage on such housing project, the 
        voluntary termination of the insurance contract for the 
        mortgage for such housing project (including any such 
        mortgage prepayment during fiscal year 1996 or a fiscal 
        year thereafter or any insurance contract voluntary 
        termination during fiscal year 1996 or a fiscal year 
        thereafter), the termination or expiration of the 
        contract for rental assistance under section 8 of the 
        United States Housing Act of 1937 for such housing 
        project (including any such termination or expiration 
        during fiscal years after fiscal year 1994 prior to the 
        effective date of the Departments of Veterans Affairs 
        and Housing and Urban Development, and Independent 
        Agencies Appropriations Act, 2001), or the transaction 
        under which the project is preserved as affordable 
        housing, that, under paragraphs (3) and (4) of section 
        515(c), section 524(d) of the Multifamily Assisted 
        Housing Reform and Affordability Act of 1997 (42 U.S.C. 
        1437f note), section 223(f) of the Low-Income Housing 
        Preservation and Resident Homeownership Act of 1990 (12 
        U.S.C. 4113(f)), or section 201(p) of the Housing and 
        Community Development Amendments of 1978 (12 U.S.C. 
        1715z-1a(p)), results in tenants in such housing 
        project being eligible for enhanced voucher assistance 
        under this subsection.
          (3) Treatment of enhanced vouchers provided under 
        other authority.--
                  (A) In general.-- Notwithstanding any other 
                provision of law, any enhanced voucher 
                assistance provided under any authority 
                specified in subparagraph (B) shall (regardless 
                of the date that the amounts for providing such 
                assistance were made available) be treated, and 
                subject to the same requirements, as enhanced 
                voucher assistance under this subsection.
                  (B) Identification of other authority.-- The 
                authority specified in this subparagraph is the 
                authority under--
                          (i) the 10th, 11th, and 12th provisos 
                        under the ``Preserving Existing Housing 
                        Investment'' account in title II of the 
                        Departments of Veterans Affairs and 
                        Housing and Urban Development, and 
                        Independent Agencies Appropriations 
                        Act, 1997 (Public Law 104-204; 110 
                        Stat. 2884), pursuant to such provisos, 
                        the first proviso under the ``Housing 
                        Certificate Fund'' account in title II 
                        of the Departments of Veterans Affairs 
                        and Housing and Urban Development, and 
                        Independent Agencies Appropriations 
                        Act, 1998 (Public Law 105-65; 111 Stat. 
                        1351), or the first proviso under the 
                        ``Housing Certificate Fund'' account in 
                        title II of the Departments of Veterans 
                        Affairs and Housing and Urban 
                        Development, and Independent Agencies 
                        Appropriations Act, 1999 (Public Law 
                        105-276; 112 Stat. 2469); and
                          (ii) paragraphs (3) and (4) of 
                        section 515(c) of the Multifamily 
                        Assisted Housing Reform and 
                        Affordability Act of 1997 (42 U.S.C. 
                        1437f note), as in effect before the 
                        enactment of this Act.
          (4) Authorization of appropriations.-- There are 
        authorized to be appropriated for each of fiscal years 
        2000, 2001, 2002, 2003, and 2004 such sums as may be 
        necessary for enhanced voucher assistance under this 
        subsection.
  (u) In the case of low-income families living in rental 
projects rehabilitated under section 17 of this Act or section 
533 of the Housing Act of 1949 before rehabilitation--
          (1) vouchers under this section shall be made for 
        families who are required to move out of their units 
        because of the physical rehabilitation activities or 
        because of overcrowding;
          (2) at the discretion of each public housing agency 
        or other agency administering the allocation of 
        assistance or vouchers under this section may be made 
        for families who would have to pay more than 30 percent 
        of their adjusted income for rent after rehabilitation 
        whether they choose to remain in, or to move from, the 
        project; and
          (3) the Secretary shall allocate assistance for 
        vouchers under this section to ensure that sufficient 
        resources are available to address the physical or 
        economic displacement, or potential economic 
        displacement, of existing tenants pursuant to 
        paragraphs (1) and (2).
  (v) The Secretary may extend expiring contracts entered into 
under this section for project-based loan management assistance 
to the extent necessary to prevent displacement of low-income 
families receiving such assistance as of September 30, 1996.
  (x) Family Unification.--
          (1) Increase in budget authority.-- The budget 
        authority available under section 5(c) for assistance 
        under section 8(b) is authorized to be increased by 
        $100,000,000 on or after October 1, 1992, and by 
        $104,200,000 on or after October 1, 1993.
          (2) Use of funds.-- The amounts made available under 
        this subsection shall be used only in connection with 
        tenant-based assistance under section 8 on behalf of 
        (A) any family (i) who is otherwise eligible for such 
        assistance, and (ii) who the public child welfare 
        agency for the jurisdiction has certified is a family 
        for whom the lack of adequate housing is a primary 
        factor in the imminent placement of the family's child 
        or children in out-of-home care or the delayed 
        discharge of a child or children to the family from 
        out-of-home care and (B) for a period not to exceed 
        [18] 36 months, otherwise eligible youths who have 
        attained at least 18 years of age and not more than 
        [21] 24 years of age and who have left foster care, or 
        will leave foster care within 90 days, in accordance 
        with a transition plan described in section 475(5)(H) 
        of the Social Security Act, and is homeless or is at 
        risk of becoming homeless at age 16 or older.
          (3) Allocation.-- The amounts made available under 
        this subsection shall be allocated by the Secretary 
        through a national competition among applicants based 
        on demonstrated need for assistance under this 
        subsection. To be considered for assistance, an 
        applicant shall submit to the Secretary a written 
        proposal containing a report from the public child 
        welfare agency serving the jurisdiction of the 
        applicant that describes how a lack of adequate housing 
        in the jurisdiction is resulting in the initial or 
        prolonged separation of children from their families, 
        and how the applicant will coordinate with the public 
        child welfare agency to identify eligible families and 
        provide the families with assistance under this 
        subsection.
          (4) Coordination between public housing agencies and 
        public child welfare agencies.-- The Secretary shall, 
        not later than the expiration of the 180-day period 
        beginning on the date of the enactment of the Housing 
        Opportunity Through Modernization Act of 2015 and after 
        consultation with other appropriate Federal agencies, 
        issue guidance to improve coordination between public 
        housing agencies and public child welfare agencies in 
        carrying out the program under this subsection, which 
        shall provide guidance on--
                  (A) identifying eligible recipients for 
                assistance under this subsection;
                  (B) coordinating with other local youth and 
                family providers in the community and 
                participating in the Continuum of Care program 
                established under subtitle C of title IV of the 
                McKinney-Vento Homeless Assistance Act (42 
                U.S.C. 11381 et seq.);
                  (C) implementing housing strategies to assist 
                eligible families and youth;
                  (D) aligning system goals to improve outcomes 
                for families and youth and reducing lapses in 
                housing for families and youth; and
                  (E) identifying resources that are available 
                to eligible families and youth to provide 
                supportive services available through parts B 
                and E of title IV of the Social Security Act 
                (42 U.S.C. 621 et seq.; 670 et seq.) or that 
                the head of household of a family or youth may 
                be entitled to receive under section 477 of the 
                Social Security Act (42 U.S.C. 677).
          [(4)] (5) Definitions.-- For purposes of this 
        subsection:
                  (A) Applicant.-- The term ``applicant'' means 
                a public housing agency or any other agency 
                responsible for administering assistance under 
                section 8.
                  (B) Public child welfare agency.-- The term 
                ``public child welfare agency'' means the 
                public agency responsible under applicable 
                State law for determining that a child is at 
                imminent risk of placement in out-of-home care 
                or that a child in out-of-home care under the 
                supervision of the public agency may be 
                returned to his or her family.
  (y) Homeownership Option.--
          (1) Use of assistance for homeownership.-- A public 
        housing agency providing tenant-based assistance on 
        behalf of an eligible family under this section may 
        provide assistance for an eligible family that 
        purchases a dwelling unit (including a unit under a 
        lease-purchase agreement) that will be owned by 1 or 
        more members of the family, and will be occupied by the 
        family, if the family--
                  (A) is a first-time homeowner, or owns or is 
                acquiring shares in a cooperative;
                  (B) demonstrates that the family has income 
                from employment or other sources (other than 
                public assistance, except that the Secretary 
                may provide for the consideration of public 
                assistance in the case of an elderly family or 
                a disabled family), as determined in accordance 
                with requirements of the Secretary, that is not 
                less than twice the payment standard 
                established by the public housing agency (or 
                such other amount as may be established by the 
                Secretary);
                  (C) except as provided by the Secretary, 
                demonstrates at the time the family initially 
                receives tenant-based assistance under this 
                subsection that one or more adult members of 
                the family have achieved employment for the 
                period as the Secretary shall require;
                  (D) participates in a homeownership and 
                housing counseling program provided by the 
                agency; and
                  (E) meets any other initial or continuing 
                requirements established by the public housing 
                agency in accordance with requirements 
                established by the Secretary.
          (2) Determination of amount of assistance.--
                  (A) Monthly expenses not exceeding payment 
                standard.-- If the monthly homeownership 
                expenses, as determined in accordance with 
                requirements established by the Secretary, do 
                not exceed the payment standard, the monthly 
                assistance payment shall be the amount by which 
                the homeownership expenses exceed the highest 
                of the following amounts, rounded to the 
                nearest dollar:
                          (i) 30 percent of the monthly 
                        adjusted income of the family.
                          (ii) 10 percent of the monthly income 
                        of the family.
                          (iii) If the family is receiving 
                        payments for welfare assistance from a 
                        public agency, and a portion of those 
                        payments, adjusted in accordance with 
                        the actual housing costs of the family, 
                        is specifically designated by that 
                        agency to meet the housing costs of the 
                        family, the portion of those payments 
                        that is so designated.
                  (B) Monthly expenses exceed payment 
                standard.-- If the monthly homeownership 
                expenses, as determined in accordance with 
                requirements established by the Secretary, 
                exceed the payment standard, the monthly 
                assistance payment shall be the amount by which 
                the applicable payment standard exceeds the 
                highest of the amounts under clauses (i), (ii), 
                and (iii) of subparagraph (A).
          (3) Inspections and contract conditions.--
                  (A) In general.-- Each contract for the 
                purchase of a unit to be assisted under this 
                section shall--
                          (i) provide for pre-purchase 
                        inspection of the unit by an 
                        independent professional; and
                          (ii) require that any cost of 
                        necessary repairs be paid by the 
                        seller.
                  (B) Annual inspections not required.-- The 
                requirement under subsection (o)(8)(A)(ii) for 
                annual inspections shall not apply to units 
                assisted under this section.
          (4) Other authority of the secretary.-- The Secretary 
        may--
                  (A) limit the term of assistance for a family 
                assisted under this subsection; and
                  (B) modify the requirements of this 
                subsection as the Secretary determines to be 
                necessary to make appropriate adaptations for 
                lease-purchase agreements.
          (5) Inapplicability of certain provisions.-- 
        Assistance under this subsection shall not be subject 
        to the requirements of the following provisions:
                  (A) Subsection (c)(3)(B) of this section.
                  (B) Subsection (d)(1)(B)(i) of this section.
                  (C) Any other provisions of this section 
                governing maximum amounts payable to owners and 
                amounts payable by assisted families.
                  (D) Any other provisions of this section 
                concerning contracts between public housing 
                agencies and owners.
                  (E) Any other provisions of this Act that are 
                inconsistent with the provisions of this 
                subsection.
          (6) Reversion to rental status.--
                  (A) FHA-insured mortgages.-- If a family 
                receiving assistance under this subsection for 
                occupancy of a dwelling defaults under a 
                mortgage for the dwelling insured by the 
                Secretary under the National Housing Act, the 
                family may not continue to receive rental 
                assistance under this section unless the family 
                (i) transfers to the Secretary marketable title 
                to the dwelling, (ii) moves from the dwelling 
                within the period established or approved by 
                the Secretary, and (iii) agrees that any 
                amounts the family is required to pay to 
                reimburse the escrow account under section 
                23(d)(3) may be deducted by the public housing 
                agency from the assistance payment otherwise 
                payable on behalf of the family.
                  (B) Other mortgages.-- If a family receiving 
                assistance under this subsection defaults under 
                a mortgage not insured under the National 
                Housing Act, the family may not continue to 
                receive rental assistance under this section 
                unless it complies with requirements 
                established by the Secretary.
                  (C) All mortgages.-- A family receiving 
                assistance under this subsection that defaults 
                under a mortgage may not receive assistance 
                under this subsection for occupancy of another 
                dwelling owned by one or more members of the 
                family.
          (7) Downpayment assistance.--
                  (A) Authority.-- A public housing agency may, 
                in lieu of providing monthly assistance 
                payments under this subsection on behalf of a 
                family eligible for such assistance and at the 
                discretion of the public housing agency, 
                provide assistance for the family in the form 
                of a single grant to be used only as a 
                contribution toward the downpayment required in 
                connection with the purchase of a dwelling for 
                fiscal year 2000 and each fiscal year 
                thereafter to the extent provided in advance in 
                appropriations Acts.
                  (B) Amount.-- The amount of a downpayment 
                grant on behalf of an assisted family may not 
                exceed the amount that is equal to the sum of 
                the assistance payments that would be made 
                during the first year of assistance on behalf 
                of the family, based upon the income of the 
                family at the time the grant is to be made.
          (8) Definition of first-time homeowner.-- For 
        purposes of this subsection, the term ``first-time 
        homeowner'' means--
                  (A) a family, no member of which has had a 
                present ownership interest in a principal 
                residence during the 3 years preceding the date 
                on which the family initially receives 
                assistance for homeownership under this 
                subsection; and
                  (B) any other family, as the Secretary may 
                prescribe.
  (z) Termination of Section 8 Contracts and Reuse of 
Recaptured Budget Authority.--
          (1) General authority.-- The Secretary may reuse any 
        budget authority, in whole or part, that is recaptured 
        on account of expiration or termination of a housing 
        assistance payments contract only for one or more of 
        the following:
                  (A) Tenant-based assistance.-- Pursuant to a 
                contract with a public housing agency, to 
                provide tenant-based assistance under this 
                section to families occupying units formerly 
                assisted under the terminated contract.
                  (B) Project-based assistance.-- Pursuant to a 
                contract with an owner, to attach assistance to 
                one or more structures under this section, for 
                relocation of families occupying units formerly 
                assisted under the terminated contract.
          (2) Families occupying units formerly assisted under 
        terminated contract.-- Pursuant to paragraph (1), the 
        Secretary shall first make available tenant- or 
        project-based assistance to families occupying units 
        formerly assisted under the terminated contract. The 
        Secretary shall provide project-based assistance in 
        instances only where the use of tenant-based assistance 
        is determined to be infeasible by the Secretary.
  (aa) Refinancing Incentive.--
          (1) In general.-- The Secretary may pay all or a part 
        of the up front costs of refinancing for each project 
        that--
                  (A) is constructed, substantially 
                rehabilitated, or moderately rehabilitated 
                under this section;
                  (B) is subject to an assistance contract 
                under this section; and
                  (C) was subject to a mortgage that has been 
                refinanced under section 223(a)(7) or section 
                223(f) of the National Housing Act to lower the 
                periodic debt service payments of the owner.
          (2) Share from reduced assistance payments.-- The 
        Secretary may pay the up front cost of refinancing 
        only--
                  (A) to the extent that funds accrue to the 
                Secretary from the reduced assistance payments 
                that results from the refinancing; and
                  (B) after the application of amounts in 
                accordance with section 1012 of the Stewart B. 
                McKinney Homeless Assistance Amendments Act of 
                1988.
  (bb) Transfer, Reuse, and Rescission of Budget Authority.--
          (1) Transfer of Budget Authority.-- If an assistance 
        contract under this section, other than a contract for 
        tenant-based assistance, is terminated or is not 
        renewed, or if the contract expires, the Secretary 
        shall, in order to provide continued assistance to 
        eligible families, including eligible families 
        receiving the benefit of the project-based assistance 
        at the time of the termination, transfer any budget 
        authority remaining in the contract to another 
        contract. The transfer shall be under such terms as the 
        Secretary may prescribe.
          (2) Reuse and rescission of certain recaptured budget 
        authority.-- Notwithstanding paragraph (1), if a 
        project-based assistance contract for an eligible 
        multifamily housing project subject to actions 
        authorized under title I is terminated or amended as 
        part of restructuring under section 517 of the 
        Multifamily Assisted Housing Reform and Affordability 
        Act of 1997, the Secretary shall recapture the budget 
        authority not required for the terminated or amended 
        contract and use such amounts as are necessary to 
        provide housing assistance for the same number of 
        families covered by such contract for the remaining 
        term of such contract, under a contract providing for 
        project-based or tenant-based assistance. The amount of 
        budget authority saved as a result of the shift to 
        project-based or tenant-based assistance shall be 
        rescinded.
  (cc) Law Enforcement and Security Personnel.--
          (1) In general.-- Notwithstanding any other provision 
        of this Act, in the case of assistance attached to a 
        structure, for the purpose of increasing security for 
        the residents of a project, an owner may admit, and 
        assistance under this section may be provided to, 
        police officers and other security personnel who are 
        not otherwise eligible for assistance under the Act.
          (2) Rent requirements.-- With respect to any 
        assistance provided by an owner under this subsection, 
        the Secretary may--
                  (A) permit the owner to establish such rent 
                requirements and other terms and conditions of 
                occupancy that the Secretary considers to be 
                appropriate; and
                  (B) require the owner to submit an 
                application for those rent requirements, which 
                application shall include such information as 
                the Secretary, in the discretion of the 
                Secretary, determines to be necessary.
          (3) Applicability.-- This subsection shall apply to 
        fiscal year 1999 and fiscal years thereafter.
  (dd) Tenant-Based Contract Renewals.--Subject to amounts 
provided in appropriation Acts, starting in fiscal year 1999, 
the Secretary shall renew all expiring tenant-based annual 
contribution contracts under this section by applying an 
inflation factor based on local or regional factors to an 
allocation baseline. The allocation baseline shall be 
calculated by including, at a minimum, amounts sufficient to 
ensure continued assistance for the actual number of families 
assisted as of October 1, 1997, with appropriate upward 
adjustments for incremental assistance and additional families 
authorized subsequent to that date.

           *       *       *       *       *       *       *


SEC. 9. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.

  (a) Merger Into Capital Fund.--Except as otherwise provided 
in the Quality Housing and Work Responsibility Act of 1998, any 
assistance made available for public housing under section 14 
of this Act before October 1, 1999, shall be merged into the 
Capital Fund established under subsection (d).
  (b) Merger Into Operating Fund.--Except as otherwise provided 
in the Quality Housing and Work Responsibility Act of 1998, any 
assistance made available for public housing under section 9 of 
this Act before October 1, 1999, shall be merged into the 
Operating Fund established under subsection (e).
  (c) Allocation Amount.--
          (1) In General.-- For fiscal year 2000 and each 
        fiscal year thereafter, the Secretary shall allocate 
        amounts in the Capital Fund and Operating Funds for 
        assistance for public housing agencies eligible for 
        such assistance. The Secretary shall determine the 
        amount of the allocation for each eligible agency, 
        which shall be, for any fiscal year beginning after the 
        effective date of the formulas described in subsections 
        (d)(2) and (e)(2)--
                  (A) for assistance from the Capital Fund, the 
                amount determined for the agency under the 
                formula under subsection (d)(2); and
                  (B) for assistance from the Operating Fund, 
                the amount determined for the agency under the 
                formula under subsection (e)(2).
          (2) Funding.-- There are authorized to be 
        appropriated for assistance for public housing agencies 
        under this section the following amounts:
                  (A) Capital fund.-- For allocations of 
                assistance from the Capital Fund, 
                $3,000,000,000 for fiscal year 1999, and such 
                sums as may be necessary for fiscal years 2000, 
                2001, 2002, and 2003.
                  (B) Operating fund.-- For allocations of 
                assistance from the Operating Fund, 
                $2,900,000,000 for fiscal year 1999, and such 
                sums as may be necessary for each of fiscal 
                years 2000, 2001, 2002, and 2003.
  (d) Capital Fund.--
          (1) In general.-- The Secretary shall establish a 
        Capital Fund for the purpose of making assistance 
        available to public housing agencies to carry out 
        capital and management activities, including--
                  (A) the development, financing, and 
                modernization of public housing projects, 
                including the redesign, reconstruction, and 
                reconfiguration of public housing sites and 
                buildings (including accessibility 
                improvements) and the development of mixed-
                finance projects;
                  (B) vacancy reduction;
                  (C) addressing deferred maintenance needs and 
                the replacement of obsolete utility systems and 
                dwelling equipment;
                  (D) planned code compliance;
                  (E) management improvements, including the 
                establishment and initial operation of computer 
                centers in and around public housing through a 
                Neighborhood Networks initiative, for the 
                purpose of enhancing the self-sufficiency, 
                employability, and economic self-reliance of 
                public housing residents by providing them with 
                onsite computer access and training resources;
                  (F) demolition and replacement;
                  (G) resident relocation;
                  (H) capital expenditures to facilitate 
                programs to improve the empowerment and 
                economic self-sufficiency of public housing 
                residents and to improve resident 
                participation;
                  (I) capital expenditures to improve the 
                security and safety of residents;
                  (J) homeownership activities, including 
                programs under section 32;
                  (K) improvement of energy and water-use 
                efficiency by installing fixtures and fittings 
                that conform to the American Society of 
                Mechanical Engineers/American National 
                Standards Institute standards A112.19.2-1998 
                and A112.18.1-2000, or any revision thereto, 
                applicable at the time of installation, and by 
                increasing energy efficiency and water 
                conservation by such other means as the 
                Secretary determines are appropriate; and
                  (L) integrated utility management and capital 
                planning to maximize energy conservation and 
                efficiency measures.
          (2) Formula.-- The Secretary shall develop a formula 
        for determining the amount of assistance provided to 
        public housing agencies from the Capital Fund for a 
        fiscal year, which shall include a mechanism to reward 
        performance. The formula may take into account such 
        factors as--
                  (A) the number of public housing dwelling 
                units owned, assisted, or operated by the 
                public housing agency, the characteristics and 
                locations of the projects, and the 
                characteristics of the families served and to 
                be served (including the incomes of the 
                families);
                  (B) the need of the public housing agency to 
                carry out rehabilitation and modernization 
                activities, replacement housing, and 
                reconstruction, construction, and demolition 
                activities related to public housing dwelling 
                units owned, assisted, or operated by the 
                public housing agency, including backlog and 
                projected future needs of the agency;
                  (C) the cost of constructing and 
                rehabilitating property in the area;
                  (D) the need of the public housing agency to 
                carry out activities that provide a safe and 
                secure environment in public housing units 
                owned, assisted, or operated by the public 
                housing agency;
                  (E) any record by the public housing agency 
                of exemplary performance in the operation of 
                public housing, as indicated by the system of 
                performance indicators established pursuant to 
                section 6(j); and
                  (F) any other factors that the Secretary 
                determines to be appropriate.
          (3) Conditions on use for development and 
        modernization.--
                  (A) Development.-- Except as otherwise 
                provided in this Act, any public housing 
                developed using amounts provided under this 
                subsection, or under section 14 as in effect 
                before the effective date under section 503(a) 
                of the Quality Housing and Work Responsibility 
                Act of 1998, shall be operated under the terms 
                and conditions applicable to public housing 
                during the 40-year period that begins on the 
                date on which the project (or stage of the 
                project) becomes available for occupancy.
                  (B) Modernization.-- Except as otherwise 
                provided in this Act, any public housing or 
                portion thereof that is modernized using 
                amounts provided under this subsection or under 
                section 14 (as in effect before the effective 
                date under section 503(a) of the Quality 
                Housing and Work Responsibility Act of 1998) 
                shall be maintained and operated under the 
                terms and conditions applicable to public 
                housing during the 20-year period that begins 
                on the latest date on which modernization is 
                completed.
                  (C) Applicability of latest expiration 
                date.-- Public housing subject to this 
                paragraph or to any other provision of law 
                mandating the operation of the housing as 
                public housing or under the terms and 
                conditions applicable to public housing for a 
                specified length of time, shall be maintained 
                and operated as required until the latest such 
                expiration date.
  (e) Operating Fund.--
          (1) In general.-- The Secretary shall establish an 
        Operating Fund for the purpose of making assistance 
        available to public housing agencies for the operation 
        and management of public housing, including--
                  (A) procedures and systems to maintain and 
                ensure the efficient management and operation 
                of public housing units (including amounts 
                sufficient to pay for the reasonable costs of 
                review by an independent auditor of the 
                documentation or other information maintained 
                pursuant to section 6(j)(6) by a public housing 
                agency or resident management corporation to 
                substantiate the performance of that agency or 
                corporation);
                  (B) activities to ensure a program of routine 
                preventative maintenance;
                  (C) anticrime and antidrug activities, 
                including the costs of providing adequate 
                security for public housing residents, 
                including above-baseline police service 
                agreements;
                  (D) activities related to the provision of 
                services, including service coordinators for 
                elderly persons or persons with disabilities;
                  (E) activities to provide for management and 
                participation in the management and policy 
                making of public housing by public housing 
                residents;
                  (F) the costs of insurance;
                  (G) the energy costs associated with public 
                housing units, with an emphasis on energy 
                conservation;
                  (H) the costs of administering a public 
                housing work program under section 12, 
                including the costs of any related insurance 
                needs;
                  (I) the costs of repaying, together with rent 
                contributions, debt incurred to finance the 
                rehabilitation and development of public 
                housing units, which shall be subject to such 
                reasonable requirements as the Secretary may 
                establish;
                  (J) the costs associated with the operation 
                and management of mixed finance projects, to 
                the extent appropriate; and
                  (K) the costs of operating computer centers 
                in public housing through a Neighborhood 
                Networks initiative described in subsection 
                (d)(1)(E), and of activities related to that 
                initiative.
          (2) Formula.--
                  (A) In general.-- The Secretary shall 
                establish a formula for determining the amount 
                of assistance provided to public housing 
                agencies from the Operating Fund for a fiscal 
                year. The formula may take into account--
                          (i) standards for the costs of 
                        operating and reasonable projections of 
                        income, taking into account the 
                        characteristics and locations of the 
                        public housing projects and 
                        characteristics of the families served 
                        and to be served (including the incomes 
                        of the families), or the costs of 
                        providing comparable services as 
                        determined in accordance with criteria 
                        or a formula representing the 
                        operations of a prototype well-managed 
                        public housing project;
                          (ii) the number of public housing 
                        dwelling units owned, assisted, or 
                        operated by the public housing agency;
                          (iii) the number of public housing 
                        dwelling units owned, assisted, or 
                        operated by the public housing agency 
                        that are chronically vacant and the 
                        amount of assistance appropriate for 
                        those units;
                          (iv) to the extent quantifiable, the 
                        extent to which the public housing 
                        agency provides programs and activities 
                        designed to promote the economic self-
                        sufficiency and management skills of 
                        public housing residents;
                          (v) the need of the public housing 
                        agency to carry out anti-crime and 
                        anti-drug activities, including 
                        providing adequate security for public 
                        housing residents;
                          (vi) the amount of public housing 
                        rental income foregone by the public 
                        housing agency as a result of escrow 
                        savings accounts under section 23(d)(2) 
                        for families participating in a family 
                        self-sufficiency program of the agency 
                        under such section 23; and
                  (vii) any other factors that the Secretary 
                determines to be appropriate.
                  (B) Incentive to increase certain rental 
                income.-- The formula shall provide an 
                incentive to encourage public housing agencies 
                to facilitate increases in earned income by 
                families in occupancy. Any such incentive shall 
                provide that the agency shall benefit from 
                increases in such rental income and that such 
                amounts accruing to the agency pursuant to such 
                benefit may be used only for low-income housing 
                or to benefit the residents of the public 
                housing agency.
                  (C) Treatment of savings.--
                          (i) In general.-- The treatment of 
                        utility and waste management costs 
                        under the formula shall provide that a 
                        public housing agency shall receive the 
                        full financial benefit from any 
                        reduction in the cost of utilities or 
                        waste management resulting from any 
                        contract with a third party to 
                        undertake energy conservation 
                        improvements in one or more of its 
                        public housing projects.
                          (ii) Third party contracts.-- 
                        Contracts described in clause (i) may 
                        include contracts for equipment 
                        conversions to less costly utility 
                        sources, projects with resident-paid 
                        utilities, and adjustments to frozen 
                        base year consumption, including 
                        systems repaired to meet applicable 
                        building and safety codes and 
                        adjustments for occupancy rates 
                        increased by rehabilitation.
                          (iii) Term of contract.-- The total 
                        term of a contract described in clause 
                        (i) shall not exceed 20 years to allow 
                        longer payback periods for retrofits, 
                        including windows, heating system 
                        replacements, wall insulation, site-
                        based generation, advanced energy 
                        savings technologies, including 
                        renewable energy generation, and other 
                        such retrofits.
                          (iv) Existing contracts.-- The term 
                        of a contract described in clause (i) 
                        that, as of the date of enactment of 
                        this clause, is in repayment and has a 
                        term of not more than 12 years, may be 
                        extended to a term of not more than 20 
                        years to permit additional energy 
                        conservation improvements without 
                        requiring the reprocurement of energy 
                        performance contractors.
          (3) Condition on use.-- No portion of any public 
        housing project operated using amounts provided under 
        this subsection, or under this section as in effect 
        before the effective date under section 503(a) of the 
        Quality Housing and Work Responsibility Act of 1998, 
        may be disposed of before the expiration of the 10-year 
        period beginning upon the conclusion of the fiscal year 
        for which such amounts were provided, except as 
        otherwise provided in this Act.
  (f) Negotiated Rulemaking Procedure.--The formulas under 
subsections (d)(2) and (e)(2) shall be developed according to 
procedures for issuance of regulations under the negotiated 
rulemaking procedure under subchapter III of chapter 5 of title 
5, United States Code.
  (g) Limitations on Use of Funds.--
          (1) Flexibility [for capital fund amounts]  in use of 
        funds .--
                  (A) Flexibility for capital fund amounts.--Of 
                any amounts appropriated for fiscal year 2000 
                or any fiscal year thereafter that are 
                allocated for fiscal year 2000 or any fiscal 
                year thereafter from the Capital Fund for any 
                public housing agency, the agency may use not 
                more than 20 percent for activities that are 
                eligible under subsection (e) for assistance 
                with amounts from the Operating Fund, but only 
                if the public housing agency plan for the 
                agency provides for such use.
                  (B) Flexibility for operating fund amounts.-- 
                Of any amounts appropriated for fiscal year 
                2016 or any fiscal year thereafter that are 
                allocated for fiscal year 2016 or any fiscal 
                year thereafter from the Operating Fund for any 
                public housing agency, the agency may use not 
                more than 20 percent for activities that are 
                eligible under subsection (d) for assistance 
                with amounts from the Capital Fund, but only if 
                the public housing plan under section 5A for 
                the agency provides for such use.
          (2) Full flexibility for small pha's.-- Of any 
        amounts allocated for any fiscal year for any public 
        housing agency that owns or operates less than 250 
        public housing dwelling units, is not designated 
        pursuant to section 6(j)(2) as a troubled public 
        housing agency, and (in the determination of the 
        Secretary) is operating and maintaining its public 
        housing in a safe, clean, and healthy condition, the 
        agency may use any such amounts for any eligible 
        activities under subsections (d)(1) and (e)(1), 
        regardless of the fund from which the amounts were 
        allocated and provided. This subsection shall take 
        effect on the date of the enactment of the Quality 
        Housing and Work Responsibility Act of 1998.
          (3) Limitation on new construction.--
                  (A) In general.-- Except as provided in 
                subparagraphs (B) and (C), a public housing 
                agency may not use any of the amounts allocated 
                for the agency from the Capital Fund or 
                Operating Fund for the purpose of constructing 
                any public housing unit, if such construction 
                would result in a net increase from the number 
                of public housing units owned, assisted, or 
                operated by the public housing agency on 
                October 1, 1999, including any public housing 
                units demolished as part of any revitalization 
                effort.
                  (B) Exception regarding use of assistance.-- 
                A public housing agency may use amounts 
                allocated for the agency from the Capital Fund 
                or Operating Fund for the construction and 
                operation of housing units that are available 
                and affordable to low-income families in excess 
                of the limitations on new construction set 
                forth in subparagraph (A), but the formulas 
                established under subsections (d)(2) and (e)(2) 
                shall not provide additional funding for the 
                specific purpose of allowing construction and 
                operation of housing in excess of those 
                limitations (except to the extent provided in 
                subparagraph (C)).
                  (C) Exception regarding formulas.-- Subject 
                to reasonable limitations set by the Secretary, 
                the formulas established under subsections 
                (d)(2) and (e)(2) may provide additional 
                funding for the operation and modernization 
                costs (but not the initial development costs) 
                of housing in excess of amounts otherwise 
                permitted under this paragraph, and such 
                amounts may be so used, if--
                          (i) such units are part of a mixed-
                        finance project or otherwise leverage 
                        significant additional private or 
                        public investment; and
                          (ii) the estimated cost of the useful 
                        life of the project is less than the 
                        estimated cost of providing tenant-
                        based assistance under section 8(o) for 
                        the same period of time.
  (h) Technical Assistance.--To the extent amounts are provided 
in advance in appropriations Acts, the Secretary may make 
grants or enter into contracts or cooperative agreements in 
accordance with this subsection for purposes of providing, 
either directly or indirectly--
          (1) technical assistance to public housing agencies, 
        resident councils, resident organizations, and resident 
        management corporations, including assistance relating 
        to monitoring and inspections;
          (2) training for public housing agency employees and 
        residents;
          (3) data collection and analysis;
          (4) training, technical assistance, and education to 
        public housing agencies that are--
                  (A) at risk of being designated as troubled 
                under section 6(j), to assist such agencies 
                from being so designated; and
                  (B) designated as troubled under section 
                6(j), to assist such agencies in achieving the 
                removal of that designation;
          (5) contract expertise;
          (6) training and technical assistance to assist in 
        the oversight and management of public housing or 
        tenant-based assistance;
          (7) clearinghouse services in furtherance of the 
        goals and activities of this subsection; and
          (8) assistance in connection with the establishment 
        and operation of computer centers in public housing 
        through a Neighborhood Networks initiative described in 
        subsection (d)(1)(E).
As used in this subsection, the terms ``training'' and 
``technical assistance'' shall include training or technical 
assistance and the cost of necessary travel for participants in 
such training or technical assistance, by or to officials and 
employees of the Department and of public housing agencies, and 
to residents and to other eligible grantees.
  (i) Eligibility of Units Acquired From Proceeds of Sales 
Under Demolition or Disposition Plan.--If a public housing 
agency uses proceeds from the sale of units under a 
homeownership program in accordance with section 32 to acquire 
additional units to be sold to low-income families, the 
additional units shall be counted as public housing for 
purposes of determining the amount of the allocation to the 
agency under this section until sale by the agency, but in no 
case longer than 5 years.
  (j) Penalty for Slow Expenditure of Capital Funds.--
          (1) Obligation of amounts.-- Except as provided in 
        paragraph (4) and subject to paragraph (2), a public 
        housing agency shall obligate any assistance received 
        under this section not later than 24 months after, as 
        applicable--
                  (A) the date on which the funds become 
                available to the agency for obligation in the 
                case of modernization; or
                  (B) the date on which the agency accumulates 
                adequate funds to undertake modernization, 
                substantial rehabilitation, or new construction 
                of units.
          (2) Extension of time period for obligation.-- The 
        Secretary--
                  (A) may, extend the time period under 
                paragraph (1) for a public housing agency, for 
                such period as the Secretary determines to be 
                necessary, if the Secretary determines that the 
                failure of the agency to obligate assistance in 
                a timely manner is attributable to--
                          (i) litigation;
                          (ii) obtaining approvals of the 
                        Federal Government or a State or local 
                        government;
                          (iii) complying with environmental 
                        assessment and abatement requirements;
                          (iv) relocating residents;
                          (v) an event beyond the control of 
                        the public housing agency; or
                          (vi) any other reason established by 
                        the Secretary by notice published in 
                        the Federal Register;
                  (B) shall disregard the requirements of 
                paragraph (1) with respect to any unobligated 
                amounts made available to a public housing 
                agency, to the extent that the total of such 
                amounts does not exceed 10 percent of the 
                original amount made available to the public 
                housing agency; and
                  (C) may, with the prior approval of the 
                Secretary, extend the time period under 
                paragraph (1), for an additional period not to 
                exceed 12 months, based on--
                          (i) the size of the public housing 
                        agency;
                          (ii) the complexity of capital 
                        program of the public housing agency;
                          (iii) any limitation on the ability 
                        of the public housing agency to 
                        obligate the amounts allocated for the 
                        agency from the Capital Fund in a 
                        timely manner as a result of State or 
                        local law; or
                          (iv) such other factors as the 
                        Secretary determines to be relevant.
          (3) Effect of failure to comply.--
                  (A) Prohibition of new assistance.-- A public 
                housing agency shall not be awarded assistance 
                under this section for any month during any 
                fiscal year in which the public housing agency 
                has funds unobligated in violation of paragraph 
                (1) or (2).
                  (B) Withholding of assistance.-- During any 
                fiscal year described in subparagraph (A), the 
                Secretary shall withhold all assistance that 
                would otherwise be provided to the public 
                housing agency. If the public housing agency 
                cures its failure to comply during the year, it 
                shall be provided with the share attributable 
                to the months remaining in the year.
                  (C) Redistribution.-- The total amount of any 
                funds not provided public housing agencies by 
                operation of this paragraph shall be allocated 
                for agencies determined under section 6(j) to 
                be high-performing.
          (4) Exception to obligation requirements.--
                  (A) In general.-- Subject to subparagraph 
                (B), if the Secretary has consented, before the 
                effective date under section 503(a) of the 
                Quality Housing and Work Responsibility Act of 
                1998, to an obligation period for any agency 
                longer than provided under paragraph (1), a 
                public housing agency that obligates its funds 
                before the expiration of that period shall not 
                be considered to be in violation of paragraph 
                (1).
                  (B) Prior fiscal years.-- Notwithstanding 
                subparagraph (A), any funds appropriated to a 
                public housing agency for fiscal year 1997 or 
                prior fiscal years shall be fully obligated by 
                the public housing agency not later than 
                September 30, 1999.
          (5) Expenditure of amounts.--
                  (A) In general.-- A public housing agency 
                shall spend any assistance received under this 
                section not later than 4 years (plus the period 
                of any extension approved by the Secretary 
                under paragraph (2)) after the date on which 
                funds become available to the agency for 
                obligation.
                  (B) Enforcement.-- The Secretary shall 
                enforce the requirement of subparagraph (A) 
                through default remedies up to and including 
                withdrawal of the funding.
          (6) Right of recapture.-- Any obligation entered into 
        by a public housing agency shall be subject to the 
        right of the Secretary to recapture the obligated 
        amounts for violation by the public housing agency of 
        the requirements of this subsection.
          (7) Treatment of replacement reserve.-- The 
        requirements of this subsection shall not apply to 
        funds held in replacement reserves established pursuant 
        to subsection (n).
  (k) Treatment of Nonrental Income.--A public housing agency 
that receives income from nonrental sources (as determined by 
the Secretary) may retain and use such amounts without any 
decrease in the amounts received under this section from the 
Capital or Operating Fund. Any such nonrental amounts retained 
shall be used only for low-income housing or to benefit the 
residents assisted by the public housing agency.
  (l) Provision of Only Capital or Operating Assistance.--
          (1) Authority.-- In appropriate circumstances, as 
        determined by the Secretary, a public housing agency 
        may commit capital assistance only, or operating 
        assistance only, for public housing units, which 
        assistance shall be subject to all of the requirements 
        applicable to public housing except as otherwise 
        provided in this subsection.
          (2) Exemptions.-- In the case of any public housing 
        unit assisted pursuant to the authority under paragraph 
        (1), the Secretary may, by regulation, reduce the 
        period under subsection (d)(3) or (e)(3), as 
        applicable, during which such units must be operated 
        under requirements applicable to public housing. In 
        cases in which there is commitment of operating 
        assistance but no commitment of capital assistance, the 
        Secretary may make section 8 requirements applicable, 
        as appropriate, by regulation.
  (m) Treatment of Public Housing.--
          (2) Reduction of asthma incidence.-- Notwithstanding 
        any other provision of this section, the New York City 
        Housing Authority may, in its sole discretion, from 
        amounts provided from the Operating and Capital Funds, 
        or from amounts provided for public housing before 
        amounts are made available from such Funds, use not 
        more than exceeding $500,000 per year for the purpose 
        of initiating, expanding or continuing a program for 
        the reduction of the incidence of asthma among 
        residents. The Secretary shall consult with the 
        Administrator of the Environmental Protection Agency 
        and the Secretary of Health and Human Services to 
        identify and consider sources of funding for the 
        reduction of the incidence of asthma among recipients 
        of assistance under this title.
          (3) Services for elderly residents.-- Notwithstanding 
        any other provision of this section, the New York City 
        Housing Authority may, in its sole discretion, from 
        amounts provided from the Operating and Capital Funds, 
        or from amounts provided for public housing before the 
        amounts are made available from such Funds, use not 
        more than $600,000 per year for the purpose of 
        developing a comprehensive plan to address the need for 
        services for elderly residents. Such plan may be 
        developed by a partnership created by such Housing 
        Authority and may include the creation of a model 
        project for assisted living at one or more 
        developments. The model project may provide for 
        contracting with private parties for the delivery of 
        services.
          (4) Effective date.-- This subsection shall apply to 
        fiscal year 1999 and each fiscal year thereafter.
  (n) Establishment of Replacement Reserves.--
          (1) In general.-- Public housing agencies shall be 
        permitted to establish a replacement reserve to fund 
        any of the capital activities listed in subsection 
        (d)(1).
          (2) Source and amount of funds for replacement 
        reserve.-- At any time, a public housing agency may 
        deposit funds from such agency's Capital Fund into a 
        replacement reserve, subject to the following:
                  (A) At the discretion of the Secretary, 
                public housing agencies may transfer and hold 
                in a replacement reserve funds originating from 
                additional sources.
                  (B) No minimum transfer of funds to a 
                replacement reserve shall be required.
                  (C) At any time, a public housing agency may 
                not hold in a replacement reserve more than the 
                amount the public housing authority has 
                determined necessary to satisfy the anticipated 
                capital needs of properties in its portfolio 
                assisted under this section, as outlined in its 
                Capital Fund 5-Year Action Plan, or a 
                comparable plan, as determined by the 
                Secretary.
                  (D) The Secretary may establish, by 
                regulation, a maximum replacement reserve level 
                or levels that are below amounts determined 
                under subparagraph (C), which may be based upon 
                the size of the portfolio assisted under this 
                section or other factors.
          (3) Transfer of operating funds.-- In first 
        establishing a replacement reserve, the Secretary may 
        allow public housing agencies to transfer more than 20 
        percent of its operating funds into its replacement 
        reserve.
          (4) Expenditure.-- Funds in a replacement reserve may 
        be used for purposes authorized by subsection (d)(1) 
        and contained in its Capital Fund 5-Year Action Plan.
          (5) Management and report.-- The Secretary shall 
        establish appropriate accounting and reporting 
        requirements to ensure that public housing agencies are 
        spending funds on eligible projects and that funds in 
        the replacement reserve are connected to capital needs.

           *       *       *       *       *       *       *


                    eligibility for assisted housing

  Sec. 16. (a) Income Eligibility for Public Housing.--
          (1) Income mix within projects.-- A public housing 
        agency may establish and utilize income-mix criteria 
        for the selection of residents for dwelling units in 
        public housing projects, subject to the requirements of 
        this section.
          (2) PHA income mix.--
                  (A) Targeting.-- Except as provided in 
                paragraph (4), of the public housing dwelling 
                units of a public housing agency made available 
                for occupancy in any fiscal year by eligible 
                families, not less than 40 percent shall be 
                occupied by families whose incomes at the time 
                of commencement of occupancy do not exceed 30 
                percent of the area median income, as 
                determined by the Secretary with adjustments 
                for smaller and larger families; except that 
                the Secretary may establish income ceilings 
                higher or lower than 30 percent of the area 
                median income on the basis of the Secretary's 
                findings that such variations are necessary 
                because of unusually high or low family 
                incomes.
          (3) Prohibition of concentration of low-income 
        families.--
                  (A) Prohibition.-- A public housing agency 
                may not, in complying with the requirements 
                under paragraph (2), concentrate very low-
                income families (or other families with 
                relatively low incomes) in public housing 
                dwelling units in certain public housing 
                projects or certain buildings within projects. 
                The Secretary shall review the income and 
                occupancy characteristics of the public housing 
                projects and the buildings of such projects of 
                such agencies to ensure compliance with the 
                provisions of this paragraph and paragraph (2).
                  (B) Deconcentration.--
                          (i) In general.-- A public housing 
                        agency shall submit with its annual 
                        public housing agency plan under 
                        section 5A an admissions policy 
                        designed to provide for deconcentration 
                        of poverty and income-mixing by 
                        bringing higher income tenants into 
                        lower income projects and lower income 
                        tenants into higher income projects. 
                        This clause may not be construed to 
                        impose or require any specific income 
                        or racial quotas for any project or 
                        projects.
                          (ii) Incentives.-- In implementing 
                        the policy under clause (i), a public 
                        housing agency may offer incentives for 
                        eligible families having higher incomes 
                        to occupy dwelling unit in projects 
                        predominantly occupied by eligible 
                        families having lower incomes, and 
                        provide for occupancy of eligible 
                        families having lower incomes in 
                        projects predominantly occupied by 
                        eligible families having higher 
                        incomes.
                          (iii) Family choice.-- Incentives 
                        referred to in clause (ii) may be made 
                        available by a public housing agency 
                        only in a manner that allows for the 
                        eligible family to have the sole 
                        discretion in determining whether to 
                        accept the incentive and an agency may 
                        not take any adverse action toward any 
                        eligible family for choosing not to 
                        accept an incentive and occupancy of a 
                        project described in clause (i)(II), 
                        Provided, That the skipping of a family 
                        on a waiting list to reach another 
                        family to implement the policy under 
                        clause (i) shall not be considered an 
                        adverse action. An agency implementing 
                        an admissions policy under this 
                        subparagraph shall implement the policy 
                        in a manner that does not prevent or 
                        interfere with the use of site-based 
                        waiting lists authorized under section 
                        6(s).
          (4) Fungibility with tenant-based assistance.--
                  (A) Authority.-- Except as provided under 
                subparagraph (D), the number of public housing 
                dwelling units that a public housing agency 
                shall otherwise make available in accordance 
                with paragraph (2)(A) to comply with the 
                percentage requirement under such paragraph for 
                a fiscal year shall be reduced by the credit 
                number for the agency under subparagraph (B).
                  (B) Credit for exceeding tenant-based 
                assistance targeting requirement.-- Subject to 
                subparagraph (C), the credit number under this 
                subparagraph for a public housing agency for a 
                fiscal year shall be the number by which--
                          (i) the aggregate number of qualified 
                        families who, in such fiscal year, are 
                        initially provided tenant-based 
                        assistance under section 8 by the 
                        agency; exceeds
                          (ii) the number of qualified families 
                        that is required for the agency to 
                        comply with the percentage requirement 
                        under subsection (b)(1) for such fiscal 
                        year.
                  (C) Limitations on credit number.-- The 
                credit number under subparagraph (B) for a 
                public housing agency for a fiscal year may not 
                in any case exceed the lesser of--
                          (i) the number of dwelling units that 
                        is equivalent to 10 percent of the 
                        aggregate number of families initially 
                        provided tenant-based assistance under 
                        section 8 by the agency in such fiscal 
                        year; or
                          (ii) the number of public housing 
                        dwelling units of the agency that--
                                  (I) are in projects that are 
                                located in census tracts having 
                                a poverty rate of 30 percent or 
                                more; and
                                  (II) are made available for 
                                occupancy during such fiscal 
                                year and are actually filled 
                                only by families whose incomes 
                                at the time of commencement of 
                                such occupancy exceed 30 
                                percent of the area median 
                                income, as determined by the 
                                Secretary with adjustments for 
                                smaller and larger families.
                  (D) Fungibility floor.-- Notwithstanding any 
                authority under subparagraph (A), of the public 
                housing dwelling units of a public housing 
                agency made available for occupancy in any 
                fiscal year by eligible families, not less than 
                30 percent shall be occupied by families whose 
                incomes at the time of commencement of 
                occupancy do not exceed 30 percent of the area 
                median income, as determined by the Secretary 
                with adjustments for smaller and larger 
                families.
                  (E) Qualified family.-- For purposes of this 
                paragraph, the term ``qualified family'' means 
                a family having an income described in 
                subsection (b)(1).
          (5) Limitations on tenancy for over-income 
        families.--
                  (A) Limitations.-- Except as provided in 
                subparagraph (D), in the case of any family 
                residing in a dwelling unit of public housing 
                whose income for the most recent two 
                consecutive years, as determined pursuant to 
                income reviews conducted pursuant to section 
                3(a)(6), has exceeded the applicable income 
                limitation under subparagraph (C), the public 
                housing agency shall--
                          (i) notwithstanding any other 
                        provision of this Act, charge such 
                        family as monthly rent for the unit 
                        occupied by such family an amount equal 
                        to the greater of--
                                  (I) the applicable fair 
                                market rental established under 
                                section 8(c) for a dwelling 
                                unit in the same market area of 
                                the same size; or
                                  (II) the amount of the 
                                monthly subsidy provided under 
                                this Act for the dwelling unit, 
                                which shall include any amounts 
                                from the Operating Fund and 
                                Capital Fund under section 9 
                                used for the unit, as 
                                determined by the agency in 
                                accordance with regulations 
                                that the Secretary shall issue 
                                to carry out this subclause; or
                          (ii) terminate the tenancy of such 
                        family in public housing not later than 
                        6 months after the income determination 
                        described in subparagraph (A).
                  (B) Notice.-- In the case of any family 
                residing in a dwelling unit of public housing 
                whose income for a year has exceeded the 
                applicable income limitation under subparagraph 
                (C), upon the conclusion of such year the 
                public housing agency shall provide written 
                notice to such family of the requirements under 
                subparagraph (A).
                  (C) Income limitation.-- The income 
                limitation under this subparagraph shall be 120 
                percent of the median income for the area, as 
                determined by the Secretary with adjustments 
                for smaller and larger families, except that 
                the Secretary may establish income limitations 
                higher or lower than 120 percent of such median 
                income on the basis of the Secretary's findings 
                that such variations are necessary because of 
                prevailing levels of construction costs, or 
                unusually high or low family incomes, vacancy 
                rates, or rental costs.
                  (D) Exception.-- Subparagraph (A) shall not 
                apply to a family occupying a dwelling unit in 
                public housing pursuant to paragraph (5) of 
                section 3(a) (42 U.S.C. 1437a(a)(5)).
                  (E) Reports on over-income families and 
                waiting lists.-- The Secretary shall require 
                that each public housing agency shall--
                          (i) submit a report annually, in a 
                        format required by the Secretary, that 
                        specifies--
                                  (I) the number of families 
                                residing, as of the end of the 
                                year for which the report is 
                                submitted, in public housing 
                                administered by the agency who 
                                had incomes exceeding the 
                                applicable income limitation 
                                under subparagraph (C); and
                                  (II) the number of families, 
                                as of the end of such year, on 
                                the waiting lists for admission 
                                to public housing projects of 
                                the agency; and
                          (ii) make the information reported 
                        pursuant to clause (i) publicly 
                        available.
  (b) Income Eligibility for Tenant-Based Section 8 
Assistance.--
          (1) In general.-- Of the families initially provided 
        tenant-based assistance under section 8 by a public 
        housing agency in any fiscal year, not less than 75 
        percent shall be families whose incomes do not exceed 
        30 percent of the area median income, as determined by 
        the Secretary with adjustments for smaller and larger 
        families; except that the Secretary may establish 
        income ceilings higher or lower than 30 percent of the 
        area median income on the basis of the Secretary's 
        findings that such variations are necessary because of 
        unusually high or low family incomes.
          (2) Jurisdictions served by multiple pha's.-- In the 
        case of any 2 or more public housing agencies that 
        administer tenant-based assistance under section 8 with 
        respect solely to identical geographical areas, such 
        agencies shall be treated as a single public housing 
        agency for purposes of paragraph (1).
  (c) Income Eligibility for Project-Based Section 8 
Assistance.--
          (1) Pre-1981 act projects.-- Not more than 25 percent 
        of the dwelling units that were available for occupancy 
        under section 8 housing assistance payments contracts 
        under this Act before the effective date of the Housing 
        and Community Development Amendments of 1981, and which 
        will be leased on or after such effective date shall be 
        available for leasing by low-income families other than 
        very low-income families.
          (2) Post-1981 act projects.-- Not more than 15 
        percent of the dwelling units which become available 
        for occupancy under section 8 housing assistance 
        payments contracts under this Act on or after the 
        effective date of the Housing and Community Development 
        Amendments of 1981 shall be available for leasing by 
        low-income families other than very low-income 
        families.
          (3) Targeting.-- For each project assisted under a 
        contract for project-based assistance, of the dwelling 
        units that become available for occupancy in any fiscal 
        year that are assisted under the contract, not less 
        than 40 percent shall be available for leasing only by 
        extremely low-income families.
          (4) Prohibition of skipping.-- In developing 
        admission procedures implementing paragraphs (1), (2), 
        and (3), the Secretary shall prohibit project owners 
        from selecting families for residence in an order 
        different from the order on the waiting list for the 
        purpose of selecting relatively higher income families 
        for residence. Nothing in this paragraph or this 
        subsection may be construed to prevent an owner of 
        housing assisted under a contract for project-based 
        assistance from establishing a preference for occupancy 
        in such housing for families containing a member who is 
        employed.
          (5) Exception.-- The limitations established in 
        paragraphs (1), (2), and (3) shall not apply to 
        dwelling units made available under project-based 
        contracts under section 8 for the purpose of preventing 
        displacement, or ameliorating the effects of 
        displacement.
          (6) Definition.-- For purposes of this subsection, 
        the term ``project-based assistance'' means assistance 
        under any of the following programs:
                  (A) The new construction or substantial 
                rehabilitation program under section 8(b)(2) 
                (as in effect before October 1, 1983).
                  (B) The property disposition program under 
                section 8(b) (as in effect before the effective 
                date under section 503(a) of the Quality 
                Housing and Work Responsibility Act of 1998).
                  (C) The loan management set-aside program 
                under subsections (b) and (v) of section 8.
                  (D) The project-based certificate program 
                under section 8(d)(2).
                  (E) The moderate rehabilitation program under 
                section 8(e)(2) (as in effect before October 1, 
                1991).
                  (F) The low-income housing preservation 
                program under Low-Income Housing Preservation 
                and Resident Homeownership Act of 1990 or the 
                provisions of the Emergency Low Income Housing 
                Preservation Act of 1987 (as in effect before 
                November 28, 1990).
                  (G) Section 8 (as in effect before the 
                effective date under section 503(a) of the 
                Quality Housing and Work Responsibility Act of 
                1998), following conversion from assistance 
                under section 101 of the Housing and Urban 
                Development Act of 1965 or section 236(f)(2) of 
                the National Housing Act.
  (d) Establishment of Different Standards.--Notwithstanding 
subsection (a)(2) or (b)(1), if approved by the Secretary, a 
public housing agency may for good cause establish and 
implement, in accordance with the public housing agency plan, 
an admission standard other than the standard under such 
subsection.
  (e) Eligibility for Assistance Based on Assets.--
          (1) Limitation on assets.-- Subject to paragraph (3) 
        and notwithstanding any other provision of this Act, a 
        dwelling unit assisted under this Act may not be rented 
        and assistance under this Act may not be provided, 
        either initially or at each recertification of family 
        income, to any family--
                  (A) whose net family assets exceed $100,000, 
                as such amount is adjusted annually by applying 
                an inflationary factor as the Secretary 
                considers appropriate; or
                  (B) who has a present ownership interest in, 
                a legal right to reside in, and the effective 
                legal authority to sell, real property that is 
                suitable for occupancy by the family as a 
                residence, except that the prohibition under 
                this subparagraph shall not apply to--
                          (i) any property for which the family 
                        is receiving assistance under 
                        subsection (y) or (o)(12) of section 8 
                        of this Act;
                          (ii) any person that is a victim of 
                        domestic violence; or
                          (iii) any family that is offering 
                        such property for sale.
          (2) Net family assets.--
                  (A) In general.-- For purposes of this 
                subsection, the term ``net family assets'' 
                means, for all members of the household, the 
                net cash value of all assets after deducting 
                reasonable costs that would be incurred in 
                disposing of real property, savings, stocks, 
                bonds, and other forms of capital investment. 
                Such term does not include interests in Indian 
                trust land, equity in property for which the 
                family is receiving assistance under subsection 
                (y) or (o)(12) of section 8, equity accounts in 
                homeownership programs of the Department of 
                Housing and Urban Development, or Family Self 
                Sufficiency accounts.
                  (B) Exclusions.-- Such term does not 
                include--
                          (i) the value of personal property, 
                        except for items of personal property 
                        of significant value, as the Secretary 
                        may establish or the public housing 
                        agency may determine;
                          (ii) the value of any retirement 
                        account;
                          (iii) real property for which the 
                        family does not have the effective 
                        legal authority necessary to sell such 
                        property;
                          (iv) any amounts recovered in any 
                        civil action or settlement based on a 
                        claim of malpractice, negligence, or 
                        other breach of duty owed to a member 
                        of the family and arising out of law, 
                        that resulted in a member of the family 
                        being disabled;
                          (v) the value of any Coverdell 
                        education savings account under section 
                        530 of the Internal Revenue Code of 
                        1986 or any qualified tuition program 
                        under section 529 of such Code; and
                          (vi) such other exclusions as the 
                        Secretary may establish.
                  (C) Trust funds.-- In cases in which a trust 
                fund has been established and the trust is not 
                revocable by, or under the control of, any 
                member of the family or household, the value of 
                the trust fund shall not be considered an asset 
                of a family if the fund continues to be held in 
                trust. Any income distributed from the trust 
                fund shall be considered income for purposes of 
                section 3(b) and any calculations of annual 
                family income, except in the case of medical 
                expenses for a minor.
          (3) Self-certification.--
                  (A) Net family assets.-- A public housing 
                agency or owner may determine the net assets of 
                a family, for purposes of this section, based 
                on a certification by the family that the net 
                assets of such family do not exceed $50,000, as 
                such amount is adjusted annually by applying an 
                inflationary factor as the Secretary considers 
                appropriate.
                  (B) No current real property ownership.-- A 
                public housing agency or owner may determine 
                compliance with paragraph (1)(B) based on a 
                certification by the family that such family 
                does not have any current ownership interest in 
                any real property at the time the agency or 
                owner reviews the family's income.
                  (C) Standardized forms.-- The Secretary may 
                develop standardized forms for the 
                certifications referred to in subparagraphs (A) 
                and (B).
          (4) Compliance for public housing dwelling units.-- 
        When recertifying family income with respect to 
        families residing in public housing dwelling units, a 
        public housing agency may, in the discretion of the 
        agency and only pursuant to a policy that is set forth 
        in the public housing agency plan under section 5A for 
        the agency, choose not to enforce the limitation under 
        paragraph (1).
          (5) Enforcement.-- When recertifying the income of a 
        family residing in a dwelling unit assisted under this 
        Act, a public housing agency or owner may choose not to 
        enforce the limitation under paragraph (1) or may 
        establish exceptions to such limitation based on 
        eligibility criteria, but only pursuant to a policy 
        that is set forth in the public housing agency plan 
        under section 5A for the agency or under a policy 
        adopted by the owner. Eligibility criteria for 
        establishing exceptions may provide for separate 
        treatment based on family type and may be based on 
        different factors, such as age, disability, income, the 
        ability of the family to find suitable alternative 
        housing, and whether supportive services are being 
        provided.
          (6) Authority to delay evictions.-- In the case of a 
        family residing in a dwelling unit assisted under this 
        Act who does not comply with the limitation under 
        paragraph (1), the public housing agency or project 
        owner may delay eviction or termination of the family 
        based on such noncompliance for a period of not more 
        than 6 months.
  (f) Ineligibility of Individuals Convicted of Manufacturing 
or Producing Methamphetamine On the Premises.--Notwithstanding 
any other provision of law, a public housing agency shall 
establish standards for occupancy in public housing dwelling 
units and assistance under section 8 that--
          (1) permanently prohibit occupancy in any public 
        housing dwelling unit by, and assistance under section 
        8 for, any person who has been convicted of 
        manufacturing or otherwise producing methamphetamine on 
        the premises in violation of any Federal or State law; 
        and
          (2) immediately and permanently terminate the tenancy 
        in any public housing unit of, and the assistance under 
        section 8 for, any person who is convicted of 
        manufacturing or otherwise producing methamphetamine on 
        the premises in violation of any Federal or State law.

           *       *       *       *       *       *       *


SEC. 37. DATA EXCHANGE STANDARDS FOR IMPROVED INTEROPERABILITY.

  (a) Designation.--The Secretary shall, in consultation with 
an interagency work group established by the Office of 
Management and Budget, and considering State government 
perspectives, designate data exchange standards to govern, 
under this Act--
          (1) necessary categories of information that State 
        agencies operating related programs are required under 
        applicable law to electronically exchange with another 
        State agency; and
          (2) Federal reporting and data exchange required 
        under applicable law.
  (b) Requirements.--The data exchange standards required by 
subsection (a) shall, to the maximum extent practicable--
          (1) incorporate a widely accepted, nonproprietary, 
        searchable, computer-readable format, such as the 
        eXtensible Markup Language;
          (2) contain interoperable standards developed and 
        maintained by intergovernmental partnerships, such as 
        the National Information Exchange Model;
          (3) incorporate interoperable standards developed and 
        maintained by Federal entities with authority over 
        contracting and financial assistance;
          (4) be consistent with and implement applicable 
        accounting principles;
          (5) be implemented in a manner that is cost- 
        effective and improves program efficiency and 
        effectiveness; and
          (6) be capable of being continually upgraded as 
        necessary.
  (c) Rules of Construction.--Nothing in this section requires 
a change to existing data exchange standards for Federal 
reporting found to be effective and efficient.

           *       *       *       *       *       *       *

                              ----------                              


                          HOUSING ACT OF 1949



           *       *       *       *       *       *       *
TITLE V--FARM HOUSING

           *       *       *       *       *       *       *


           loans for housing and buildings on adequate farms

  Sec. 502. (a)(1) If the Secretary determines that an 
applicant is eligible for assistance as provided in section 501 
and that the applicant has the ability to repay in full the sum 
to be loaned, with interest giving due consideration to the 
income and earnings capacity of the applicant and his family 
from the farm and other sources, and the maintenance of a 
reasonable standard of living for the owner and the occupants 
of said farm, a loan may be made by the Secretary to said 
applicant for a period of not to exceed thirty-three years from 
the making of the loan with interest. The Secretary may accept 
the personal liability of any person with adequate repayment 
ability who will cosign the applicant's note to compensate for 
any deficiency in the applicant's repayment ability. At the 
borrower's option, the borrower may prepay to the Secretary as 
escrow agent, on terms and conditions prescribed by him, such 
taxes, insurance, and other expenses as the Secretary may 
require in accordance with section 501(e).
  (2) The Secretary may extend the period of any loan made 
under this section if the Secretary determines that such 
extension is necessary to permit the making of such loan to any 
person whose income does not exceed 60 per centum of the median 
income for the area and who would otherwise be denied such loan 
because the payments required under a shorter period would 
exceed the financial capacity of such person. The aggregate 
period for which any loan may be extended under this paragraph 
may not exceed 5 years.
  (3)(A) Notwithstanding any other provision of this title, a 
loan may be made under this section for the purchase of a 
dwelling located on land owned by a community land trust, if 
the borrower and the loan otherwise meet the requirements 
applicable to loans under this section.
  (B) For purposes of this paragraph, the term ``community land 
trust'' means a community housing development organization as 
such term is defined in section 104 of the Cranston-Gonzalez 
National Affordable Housing Act (except that the requirements 
under section 104(6)(C) and section 104(6)(D) shall not apply 
for purposes of this paragraph)--
          (i) that is not sponsored by a for-profit 
        organization;
          (ii) that is established to carry out the activities 
        under clause (iii);
          (iii) that--
                  (I) acquires parcels of land, held in 
                perpetuity, primarily for conveyance under 
                long-term ground leases;
                  (II) transfers ownership of any structural 
                improvements located on such leased parcels to 
                the lessees; and
                  (III) retains a preemptive option to purchase 
                any such structural improvement at a price 
                determined by formula that is designed to 
                ensure that the improvement remains affordable 
                to low- and moderate-income families in 
                perpetuity; and
          (iv) that has its corporate membership open to any 
        adult resident of a particular geographic area 
        specified in the bylaws of the organization.
  (b) The instruments under which the loan is made and the 
security given shall--
          (1) provide for security upon the applicant's equity 
        in the farm or such other security or collateral, if 
        any, as may be found necessary by the Secretary 
        reasonably to assure repayment of the indebtedness;
          (2) provide for the repayment of principal and 
        interest in accordance with schedules and repayment 
        plans prescribed by the Secretary, except that any 
        prepayment of a loan made or insured under section 514 
        or 515 shall be subject to the provisions of subsection 
        (c);
          (3) except for guaranteed loans, contain the 
        agreement of the borrower that he will, at the request 
        of the Secretary, proceed with diligence to refinance 
        the balance of the indebtedness through cooperative or 
        other responsible private credit sources whenever the 
        Secretary determines, in the light of the borrower's 
        circumstances, including his earning capacity and the 
        income from the farm, that he is able to do so upon 
        reasonable terms and conditions;
          (4) be in such form and contain such covenants as the 
        Secretary shall prescribe to secure the payment of the 
        loan with interest, protect the security, and assure 
        that the farm will be maintained in repair and that 
        waste and exhaustion of the farm will be prevented.
  (c)(1)(A) The Secretary may not accept an offer to prepay, or 
request refinancing in accordance with subsection (b)(3) of, 
any loan made or insured under section 514 or 515 of this title 
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, unless the 
Secretary takes appropriate action which will obligate the 
borrower (and successors in interest thereof) to utilize the 
assisted housing and related facilities for the purposes 
specified in section 514 or 515, as the case may be, for a 
period of--
          (i) fifteen years from the date on which the loan was 
        made in the case of a loan made or insured 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 
        utilized for housing and related facilities which have 
        not received assistance under section 521 (a)(1)(B), 
        (a)(2), or (5) of this title or section 8 of the United 
        States Housing Act of 1937; or
          (ii) twenty years from the date on which the loan was 
        made in the case of any or other such loan;
or until the Secretary determines (prior to the end of such 
period) that there is no longer a need for such housing and 
related facilities to be so utilized or that Federal or other 
financial assistance provided to the residents of such housing 
will no longer be provided.
  (B) The Secretary may not accept an offer to prepay, or 
request refinancing in accordance with subsection (b)(3) of, 
any initial loan made or insured under section 515 pursuant to 
a contract entered into on or after the date of the enactment 
of the Department of Housing and Urban Development Reform Act 
of 1989.
  (2) If any loan which was made or insured under section 514 
or 515 pursuant to a contract entered into prior to the date of 
enactment of the Department of Housing and Urban Development 
Reform Act of 1989, is prepaid or refinanced on or after the 
date of enactment of the Housing and Community Development Act 
of 1980, and tenants of the housing and related facilities 
financed with such loan are displaced due to a change in the 
use of the housing, or to an increase in rental or other 
charges, as a result of such prepayment or refinancing, the 
Secretary shall provide such tenants a priority for relocation 
in alternative housing assisted pursuant to this title.
  (3) Notice of offer to prepay.--Not less than 30 days after 
receiving an offer to prepay any loan made or insured under 
section 514 or 515, the Secretary shall provide written notice 
of the offer or request to the tenants of the housing and 
related facilities involved, to interested nonprofit 
organizations, and to any appropriate State and local agencies.
  (4)(A) Agreement by borrower to extend low income use.-- 
Before accepting any offer to prepay, or requesting refinancing 
in accordance with subsection (b)(3) of, any loan made or 
insured under section 514 or 515 pursuant to a contract entered 
into prior to the date of enactment of the Department of 
Housing and Urban Development Reform Act of 1989, the Secretary 
shall make reasonable efforts to enter into an agreement with 
the borrower under which the borrower will make a binding 
commitment to extend the low income use of the assisted housing 
and related facilities involved for not less than the 20-year 
period beginning on the date on which the agreement is 
executed.
  (B) Assistance available to borrower to extend low income 
use.--To the extent of amounts provided in appropriation Acts, 
the agreement under subparagraph (A) may provide for 1 or more 
of the following forms of assistance that the Secretary, after 
taking into account local market conditions, determines to be 
necessary to extend the low income use of the housing and 
related facilities involved:
          (i) Increase in the rate of return on investment.
          (ii) Reduction of the interest rate on the loan 
        through the provision of interest credits under section 
        521(a)(1)(B), or additional assistance or an increase 
        in assistance provided under section 521(a)(5).
          (iii) Additional rental assistance, or an increase in 
        assistance provided under existing contracts, under 
        section 521(a)(2) or under section 8 of the United 
        States Housing Act of 1937.
          (iv) An equity loan to the borrower under paragraphs 
        (1) and (2) of section 515(c) 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 Act entitled 
        ``An Act making appropriations for Agriculture, Rural 
        Development, Food and Drug Administration, and Related 
        Agencies programs for the fiscal year ending September 
        30, 1997, and for other purposes'', 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.
          (v) Incremental rental assistance in connection with 
        loans under clauses (ii) and (iv) to the extent 
        necessary to avoid increases in the rental payments of 
        current tenants not receiving rental assistance under 
        section 521(a)(2) or under section 8 of the United 
        States Housing Act of 1937, or current tenants of 
        projects not assisted under section 521(a)(5).
          (vi) In the case of a project that has received 
        rental assistance under section 8 of the United States 
        Housing Act of 1937, permitting the owner to receive 
        rent in excess of the amount determined necessary by 
        the Secretary to defray the cost of long-term repair or 
        maintenance of such a project.
  (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--
          (i) is necessary to provide a fair return on the 
        investment of the borrower; and
          (ii) is the least costly alternative for the Federal 
        Govern- ment that is consistent with carrying out the 
        purposes of this subsection.
  (5)(A) Offer to sell to nonprofit organizations and public 
agencies.--
          (i) In general.-- If the Secretary determines after a 
        reasonable period that an agreement will not be entered 
        into with a borrower under paragraph (4), the Secretary 
        shall require the borrower (except as provided in 
        subparagraph (G)) to offer to sell the assisted housing 
        and related facilities involved to any qualified 
        nonprofit organization or public agency at a fair 
        market value determined by 2 independent appraisers, 
        one of whom shall be selected by the Secretary and one 
        of whom shall be selected by the borrower. If the 2 
        appraisers fail to agree on the fair market value, the 
        Secretary and the borrower shall jointly select a third 
        appraiser, whose appraisal shall be binding on the 
        Secretary and the borrower.
          (ii) Period for which requirement applicable.-- If, 
        upon the expiration of 180 days after an offer is made 
        to sell housing and related facilities under clause 
        (i), no qualified nonprofit organization or public 
        agency has made a bona fide offer to purchase, the 
        Secretary may accept the offer to prepay, or may 
        request refinancing in accordance with subsection 
        (b)(3) of, the loan. This clause shall apply only when 
        funds are available for purposes of carrying out a 
        transfer under this paragraph.
  (B) Qualified nonprofit organizations and public agencies.--
          (i) Local nonprofit organization or public agency.-- 
        A local nonprofit organization or public agency may 
        purchase housing and related facilities under this 
        paragraph only if--
                  (I) the organization or agency is determined 
                by the Secretary to be capable of managing the 
                housing and related facilities (either directly 
                or through a contract) for the remaining useful 
                life of the housing and related facilities; and
                  (II) the organization or agency has entered 
                into an agreement that obligates it (and 
                successors in interest thereof) to maintain the 
                housing and related facilities as affordable 
                for very low-income families or persons and low 
                income families or persons for the remaining 
                useful life of the housing and related 
                facilities.
          (ii) National or regional nonprofit organization.-- 
        If the Secretary determines that there is no local 
        nonprofit organization or public agency qualified to 
        purchase the housing and related facilities involved, 
        the Secretary shall require the borrower to offer to 
        sell the assisted housing and related facilities to an 
        existing qualified national or regional nonprofit 
        organization.
          (iii) Selection of qualified purchaser.-- The 
        Secretary shall promulgate regulations that establish 
        criteria for selecting a qualified nonprofit 
        organization or public agency to purchase housing and 
        related facilities when more than 1 such organization 
        or agency has made a bona fide offer. Such regulations 
        shall give a priority to those organizations or 
        agencies with the greatest experience in developing or 
        managing low income housing or community development 
        projects and with the longest record of service to the 
        community.
  (C) Financing of sale.--To facilitate the sale described in 
subparagraph (A), the Secretary shall--
          (i) to the extent provided in appropriation Acts, 
        make an advance to the nonprofit organization or public 
        agency whose offer to purchase is accepted under this 
        paragraph to cover any direct costs (other than the 
        purchase price) incurred by the organization or agency 
        in purchasing and assuming responsibility for the 
        housing and related facilities involved;
          (ii) approve the assumption, by the nonprofit 
        organization or public agency involved, of the loan 
        made or insured under section 514 or 515;
          (iii) to the extent provided in appropriation Acts, 
        transfer any rental assistance payments that are 
        received under section 521(a)(2)(A) or under section 8 
        of the United States Housing Act of 1937, or any 
        assistance payments received under section 521(a)(5), 
        with respect to the housing and related facilities 
        involved; and
          (iv) to the extent provided in appropriation Acts, 
        provide a loan under section 515(c)(3) to the nonprofit 
        organization or public agency whose offer to purchase 
        is accepted under this paragraph to enable the 
        organization or agency to purchase the housing and 
        related facilities involved.
  (D) Rent limitation and assistance.--The Secretary shall, to 
the extent provided in appropriation Acts, provide to each 
nonprofit organization or public agency purchasing housing and 
related facilities under this paragraph financial assistance 
(in the form of monthly payments or forgiveness of debt) in an 
amount necessary to ensure that the monthly rent payment made 
by each low income family or person residing in the housing 
does not exceed the maximum rent permitted under section 
521(a)(2)(A) or, in the case of housing assisted under section 
521(a)(5), does not exceed the rents established for the 
project under such section.
  (E) Restriction on subsequent transfers.--Except as provided 
in subparagraph (B)(ii), the Secretary may not approve the 
transfer of any housing and related facilities purchased under 
this paragraph during the remaining useful life of the housing 
and related facilities, unless the Secretary determines that--
          (i) the transfer will further the provision of 
        housing and related facilities for low income families 
        or persons; or
          (ii) there is no longer a need for such housing and 
        related facilities by low income families or persons.
  (F) General restriction on prepayments and refinancings.--
Following the transfer of the maximum number of dwelling units 
set forth in subparagraph (H)(i) in any fiscal year or the 
maximum number of dwelling units for which budget authority is 
available in any fiscal year, the Secretary may not accept in 
such fiscal year any offer to prepay, or request refinancing in 
accordance with subsection (b)(3) of, any loan made or insured 
under section 514 or 515 pursuant to a contract entered into 
prior to the date of enactment of the Department of Housing and 
Urban Development Reform Act of 1989, except in accordance with 
subparagraph (G). The limitation established in this 
subparagraph shall not apply to an offer to prepay, or request 
to refinance, if, following the date on which such offer or 
request is made (or following the date of the enactment of the 
Housing and Community Development Act of 1987, whichever occurs 
later) a 15-month period expires during which no budget 
authority is available to carry out this paragraph. For 
purposes of this subparagraph, the Secretary shall allocate 
budget authority under this paragraph in the order in which 
offers to prepay, or request to refinance, are made.
  (G) Exception.--This paragraph shall not apply to any offer 
to prepay, or any request to refinance in accordance with 
subsection (b)(3), any loan made or insured under section 514 
or 515 pursuant to a contract entered into prior to the date of 
enactment of the Department of Housing and Urban Development 
Reform Act of 1989, if--
          (i) the borrower enters into an agreement with the 
        Secretary that obligates the borrower (and successors 
        in interest thereof)--
                  (I) to utilize the assisted housing and 
                related facilities for the purposes specified 
                in section 514 or 515, as the case may be, for 
                a period determined by the Secretary (but not 
                less than the period described in paragraph 
                (1)(B) calculated from the date on which the 
                loan is made or insured); and
                  (II) upon termination of the period described 
                in paragraph (1)(B), to offer to sell the 
                assisted housing and related facilities to a 
                qualified nonprofit organization or public 
                agency in accordance with this paragraph; or
          (ii) the Secretary determines that housing 
        opportunities of minorities will not be materially 
        affected as a result of the prepayment or refinancing, 
        and that--
                  (I) the borrower (and any successor in 
                interest thereof) are obligated to ensure that 
                tenants of the housing and related facilities 
                financed with the loan will not be displaced 
                due to a change in the use of the housing, or 
                to an increase in rental or other charges, as a 
                result of the prepayment or refinancing; or
                  (II) there is an adequate supply of safe, 
                decent, and affordable rental housing within 
                the market area of the housing and related 
                facilities and sufficient actions have been 
                taken to ensure that the rental housing will be 
                made available to each tenant upon 
                displacement.
  (H) Funding.--
          (i) Budget limitation.-- Not more than 5,000 dwelling 
        units may be transferred under this paragraph in any 
        fiscal year, and the budget authority that may be 
        provided under this paragraph for any fiscal year may 
        not exceed the amounts required to carry out this 
        paragraph with respect to such number.
          (ii) Reimbursement of rural housing insurance fund.-- 
        There are authorized to be appropriated to the Rural 
        Housing Insurance Fund such sums as may be necessary to 
        reimburse the Fund for financial assistance provided 
        under this paragraph, paragraph (4), and section 
        517(j)(7).
  (I) Definitions.--For purposes of this paragraph:
          (i) Local nonprofit organization.-- The term ``local 
        nonprofit organization'' means a nonprofit organization 
        that--
                  (I) has a broad based board reflecting 
                various interests in the community or trade 
                area; and
                  (II) is a non-for-profit charitable 
                organization whose principal purposes include 
                developing or managing low income housing or 
                community development projects.
          (ii) Nonprofit organization.-- The term ``nonprofit 
        organization'' means any private organization--
                  (I) no part of the net earnings of which 
                inures to the benefit of any member, founder, 
                contributor, or individual;
                  (II) that is approved by the Secretary as to 
                financial responsibility; and
                  (III) that does not have among its officers 
                or directorate persons or parties with a 
                material interest (or persons or parties 
                related to any person or party with such an 
                interest) in loans financed under section 515 
                that have been prepaid.
  (J) Regulations.--Notwithstanding section 534, the Secretary 
shall issue final regulations to carry out this paragraph not 
later than 60 days after the date of the enactment of the 
Housing and Community Development Act of 1987. The Secretary 
shall provide for the regulations to take effect not later than 
45 days after the date on which the regulations are issued.
  (d) On and after the effective date of the Rural Housing 
Amendments of 1983--
          (1) not less than 40 percent of the funds approved in 
        appropriation Acts for use under this section shall be 
        set aside and made available only for very low-income 
        families or persons; and
          (2) not less than 30 percent of the funds allocated 
        to each State under this section shall be available 
        only for very low-income families or persons.
  (e)(1) A loan which may be made or insured under this section 
with respect to housing shall be made or insured with respect 
to a manufactured home or with respect to a manufactured home 
and lot, whether such home or such home and lot is real 
property, personal property, or mixed real and personal 
property, if--
          (A) the manufactured home meets the standards 
        prescribed pursuant to title VI of the Housing and 
        Community Development Act of 1974;
          (B) the manufactured home, or the manufactured home 
        and lot, meets the installation, structural, and site 
        requirements which would apply under title II of the 
        National Housing Act; and
          (C) the manufactured home meets the energy conserving 
        requirements established under paragraph (2), or until 
        the energy conserving requirements are established 
        under paragraph (2), the manufactured home meets the 
        energy conserving requirements applicable to housing 
        other than manufactured housing financed under this 
        title.
  (2) Energy conserving requirements established by the 
Secretary for the purpose of paragraph (1)(C) shall--
          (A) reduce the operating costs for a borrower by 
        maximizing the energy savings and be cost-effective 
        over the life of the manufactured home or the term of 
        the loan, whichever is shorter, taking into account 
        variations in climate, types of energy used, the cost 
        to modify the home to meet such requirements, and the 
        estimated value of the energy saved over the term of 
        the mortgage; and
          (B) be established so that the increase in the annual 
        loan payment resulting from the added energy conserving 
        requirements in excess of those required by the 
        standards prescribed under title VI of the Housing and 
        Community Development Act of 1974 shall not exceed the 
        projected savings in annual energy costs.
  (3) A loan that may be made or insured under this section 
with respect to a manufactured home on a permanent foundation, 
or a manufactured home on a permanent foundation and a lot, 
shall be repayable over the same period as would be applicable 
under section 203(b) of the National Housing Act.
  (f) Remote Rural Areas.--
          (1) Loan supplements.-- The Secretary may supplement 
        any loan under this section to finance housing located 
        in a remote rural area or on tribal allotted or Indian 
        trust land with a grant in an amount not greater than 
        the amount by which the reasonable land acquisition and 
        construction costs of the security property exceeds the 
        appraised value of such property.
          (2) Prohibition.-- The Secretary may not refuse to 
        make, insure, or guarantee a loan that otherwise meets 
        the requirements under this section solely on the basis 
        that the housing involved is located in an area that is 
        excessively rural in character or excessively remote or 
        on tribal allotted or Indian trust land.
  (g) Deferred Mortgage Demonstration.--
          (1) Authority.-- With respect to families or persons 
        otherwise eligible for assistance under subsection (d) 
        but having incomes below the amount determined to 
        qualify for a loan under this section, the Secretary 
        may defer mortgage payments beyond the amount 
        affordable at 1 percent interest, taking into 
        consideration income, taxes and insurance. Deferred 
        mortgage payments shall be converted to payment status 
        when the ability of the borrower to repay improves. 
        Deferred amounts shall not exceed 25 percent of the 
        amount of the payment due at 1 percent interest and 
        shall be subject to recapture.
          (2) Interest.-- Interest on principal deferred shall 
        be set at 1 percent and any interest payments deferred 
        under this subsection shall not be treated as principal 
        in calculating indebtedness.
          (3) Funding.-- Subject to approval in appropriations 
        Acts, not more than 10 percent of the amount approved 
        for each of fiscal years 1993 and 1994 for loans under 
        this section may be used to carry out this subsection.
  (h) Doug Bereuter Section 502 Single Family Housing Loan 
Guarantee Program.--
          (1) Short title.-- This subsection may be cited as 
        the ``Doug Bereuter Section 502 Single Family Housing 
        Loan Guarantee Act''.
          (2) Authority.-- The Secretary shall, to the extent 
        provided in appropriation Acts, provide guaranteed 
        loans in accordance with this section, section 517(d), 
        and the last sentence of section 521(a)(1)(A), except 
        as modified by the provisions of this subsection. Loans 
        shall be guaranteed under this subsection in an amount 
        equal to 90 percent of the loan.
          (3) Eligible borrowers.-- Loans guaranteed pursuant 
        to this subsection shall be made only to borrowers who 
        are low or moderate income families or persons, whose 
        incomes do not exceed 115 percent of the median income 
        of the area, as determined by the Secretary.
          (4) Eligible housing.-- Loans may be guaranteed 
        pursuant to this subsection only if the loan is used to 
        acquire or construct a single-family residence that 
        is--
                  (A) to be used as the principal residence of 
                the borrower;
                  (B) eligible for assistance under this 
                section, section 203(b) of the National Housing 
                Act, or chapter 37 of title 38, United States 
                Code; and
                  (C) located in a rural area
          (5) Priority and counseling for first-time 
        homebuyers.--
                  (A) In providing guaranteed loans under this 
                subsection, the Secretary shall give priority 
                to first-time homebuyers (as defined in 
                paragraph (17)).
                  (B) The Secretary may require that, as a 
                condition of receiving a guaranteed loan 
                pursuant to this subsection, a borrower who is 
                a first-time homebuyer successfully complete a 
                program of homeownership counseling under 
                section 106(a)(1)(iii) of the Housing and Urban 
                Development Act of 1968 and obtain 
                certification from the provider of the program 
                that the borrower is adequately prepared for 
                the obligations of homeownership.
          (6) Eligible lenders.-- Guaranteed loans pursuant to 
        this subsection may be made only by lenders approved by 
        and meeting qualifications established by the 
        Secretary.
          (7) Loan terms.-- Loans guaranteed pursuant to this 
        subsection shall--
                  (A) be made for a term not to exceed 30 
                years;
                  (B) involve a rate of interest that is fixed 
                over the term of the loan and does not exceed 
                the rate for loans guaranteed under chapter 37 
                of title 38, United States Code, or comparable 
                loans in the area that are not guaranteed; and
                  (C) involve a principal obligation (including 
                initial service charges, appraisal, inspection, 
                and other fees as the Secretary may approve)--
                          (i) for a first-time homebuyer, in 
                        any amount not in excess of 100 percent 
                        of the appraised value of the property 
                        as of the date the loan is accepted or 
                        the acquisition cost of the property, 
                        whichever is less, plus the guarantee 
                        fee as authorized by subsection (h)(7); 
                        and
                          (ii) for any borrower other than a 
                        first-time homebuyer, in an amount not 
                        in excess of the percentage of the 
                        property or the acquisition cost of the 
                        property that the Secretary shall 
                        determine, such percentage or cost in 
                        any event not to exceed 100 percent of 
                        the appraised value of the property as 
                        of the date the loan is accepted or the 
                        acquisition cost of the property, 
                        whichever is less, plus the guarantee 
                        fee as authorized by subsection (h)(7).
          (8) Fees.-- Notwithstanding paragraph (14)(D), with 
        respect to a guaranteed loan issued or modified under 
        this subsection, the Secretary may collect from the 
        lender--
                  (A) at the time of issuance of the guarantee 
                or modification, a fee not to exceed 3.5 
                percent of the principal obligation of the 
                loan; and
                  (B) an annual fee not to exceed 0.5 percent 
                of the outstanding principal balance of the 
                loan for the life of the loan.
          (9) Refinancing.-- Any guaranteed loan under this 
        subsection 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 which exceeds the limitations under this 
        subsection.
          (10) Nonassumption.-- Notwithstanding the transfer of 
        property for which a guaranteed loan under this 
        subsection was made, the borrower of a guaranteed loan 
        under this subsection may not be relieved of liability 
        with respect to the loan.
          (11) Geographical targeting.-- In providing 
        guaranteed loans under this subsection, the Secretary 
        shall establish standards to target and give priority 
        to areas that have a demonstrated need for additional 
        sources of mortgage financing for low and moderate 
        income families.
          (12) Allocation.-- The Secretary shall provide that, 
        in each fiscal year, guaranteed loans under this 
        subsection shall be allocated among the States on the 
        basis of the need of eligible borrowers in each State 
        for such loans in comparison with the need of eligible 
        borrowers for such loans among all States.
          (13) Loss mitigation.-- Upon default or imminent 
        default of any mortgage guaranteed under this 
        subsection, mortgagees shall engage in loss mitigation 
        actions for the purpose of providing an alternative to 
        foreclosure (including actions such as special 
        forbearance, loan modification, pre-foreclosure sale, 
        deed in lieu of foreclosure, as required, support for 
        borrower housing counseling, subordinate lien 
        resolution, and borrower relocation), as provided for 
        by the Secretary.
          (14) Payment of partial claims and mortgage 
        modifications.-- The Secretary may authorize the 
        modification of mortgages, and establish a program for 
        payment of a partial claim to a mortgagee that agrees 
        to apply the claim amount to payment of a mortgage on a 
        1- to 4-family residence, for mortgages that are in 
        default or face imminent default, as defined by the 
        Secretary. Any payment under such program directed to 
        the mortgagee shall be made at the sole discretion of 
        the Secretary and on terms and conditions acceptable to 
        the Secretary, except that--
                  (A) the amount of the partial claim payment 
                shall be in an amount determined by the 
                Secretary, and shall not exceed an amount 
                equivalent to 30 percent of the unpaid 
                principal balance of the mortgage and any costs 
                that are approved by the Secretary;
                  (B) the amount of the partial claim payment 
                shall be applied first to any outstanding 
                indebtedness on the mortgage, including any 
                arrearage, but may also include principal 
                reduction;
                  (C) the mortgagor shall agree to repay the 
                amount of the partial claim to the Secretary 
                upon terms and conditions acceptable to the 
                Secretary;
                  (D) expenses related to a partial claim or 
                modification are not to be charged to the 
                borrower;
                  (E) the Secretary may authorize compensation 
                to the mortgagee for lost income on monthly 
                mortgage payments due to interest rate 
                reduction;
                  (F) the Secretary may reimburse the mortgagee 
                from the appropriate guaranty fund in 
                connection with any activities that the 
                mortgagee is required to undertake concerning 
                repayment by the mortgagor of the amount owed 
                to the Secretary;
                  (G) the Secretary may authorize payments to 
                the mortgagee on behalf of the borrower, under 
                such terms and conditions as are defined by the 
                Secretary, based on successful performance 
                under the terms of the mortgage modification, 
                which shall be used to reduce the principal 
                obligation under the modified mortgage; and
                  (H) the Secretary may authorize the 
                modification of mortgages with terms extended 
                up to 40 years from the date of modification.
          (15) Assignment.--
                  (A) Program authority.-- The Secretary may 
                establish a program for assignment to the 
                Secretary, upon request of the mortgagee, of a 
                mortgage on a 1- to 4-family residence 
                guaranteed under this chapter.
                  (B) Program requirements.--
                          (i) In general.-- The Secretary may 
                        encourage loan modifications for 
                        eligible delinquent mortgages or 
                        mortgages facing imminent default, as 
                        defined by the Secretary, through the 
                        payment of the guaranty and assignment 
                        of the mortgage to the Secretary and 
                        the subsequent modification of the 
                        terms of the mortgage according to a 
                        loan modification approved under this 
                        section.
                          (ii) Acceptance of assignment.-- The 
                        Secretary may accept assignment of a 
                        mortgage under a program under this 
                        subsection only if--
                                  (I) the mortgage is in 
                                default or facing imminent 
                                default;
                                  (II) the mortgagee has 
                                modified the mortgage or 
                                qualified the mortgage for 
                                modification sufficient to cure 
                                the default and provide for 
                                mortgage payments the mortgagor 
                                is reasonably able to pay, at 
                                interest rates not exceeding 
                                current market interest rates; 
                                and
                                  (III) the Secretary arranges 
                                for servicing of the assigned 
                                mortgage by a mortgagee (which 
                                may include the assigning 
                                mortgagee) through procedures 
                                that the Secretary has 
                                determined to be in the best 
                                interests of the appropriate 
                                guaranty fund.
                  (C) Payment of guaranty.-- Under the program 
                under this paragraph, the Secretary may pay the 
                guaranty for a mortgage, in the amount 
                determined in accordance with paragraph (2), 
                without reduction for any amounts modified, but 
                only upon the assignment, transfer, and 
                delivery to the Secretary of all rights, 
                interest, claims, evidence, and records with 
                respect to the mortgage, as defined by the 
                Secretary.
                  (D) Disposition.-- After modification of a 
                mortgage pursuant to this paragraph, and 
                assignment of the mortgage, the Secretary may 
                provide guarantees under this subsection for 
                the mortgage. The Secretary may subsequently--
                          (i) re-assign the mortgage to the 
                        mortgagee under terms and conditions as 
                        are agreed to by the mortgagee and the 
                        Secretary;
                          (ii) act as a Government National 
                        Mortgage Association issuer, or 
                        contract with an entity for such 
                        purpose, in order to pool the mortgage 
                        into a Government National Mortgage 
                        Association security; or
                          (iii) re-sell the mortgage in 
                        accordance with any program that has 
                        been established for purchase by the 
                        Federal Government of mortgages insured 
                        under this title, and the Secretary may 
                        coordinate standards for interest rate 
                        reductions available for loan 
                        modification with interest rates 
                        established for such purchase.
                  (E) Loan servicing.-- In carrying out the 
                program under this subsection, the Secretary 
                may require the existing servicer of a mortgage 
                assigned to the Secretary under the program to 
                continue servicing the mortgage as an agent of 
                the Secretary during the period that the 
                Secretary acquires and holds the mortgage for 
                the purpose of modifying the terms of the 
                mortgage. If the mortgage is resold pursuant to 
                subparagraph (D)(iii), the Secretary may 
                provide for the existing servicer to continue 
                to service the mortgage or may engage another 
                entity to service the mortgage.
          (16) Definitions.-- For purposes of this subsection:
                  (A) The term ``displaced homemaker'' means an 
                individual who--
                          (i) is an adult;
                          (ii) has not worked full-time full-
                        year in the labor force for a number of 
                        years but has, during such years, 
                        worked primarily without remuneration 
                        to care for the home and family; and
                          (iii) is unemployed or underemployed 
                        and is experiencing difficulty in 
                        obtaining or upgrading employment.
                  (B) The term ``first-time homebuyer'' means 
                any individual who (and whose spouse) has had 
                no present ownership in a principal residence 
                during the 3-year period ending on the date of 
                purchase of the property acquired with a 
                guaranteed loan under this subsection except 
                that--
                          (i) any individual who is a displaced 
                        homemaker may not be excluded from 
                        consideration as a first-time homebuyer 
                        under this subparagraph on the basis 
                        that the individual, while a homemaker, 
                        owned a home with his or her spouse or 
                        resided in a home owned by the spouse; 
                        and
                          (ii) any individual who is a single 
                        parent may not be excluded from 
                        consideration as a first-time homebuyer 
                        under this subparagraph on the basis 
                        that the individual, while married, 
                        owned a home with his or her spouse or 
                        resided in a home owned by the spouse.
                  (C) The term ``single parent'' means an 
                individual who--
                          (i) is unmarried or legally separated 
                        from a spouse; and
                          (ii)(I) has 1 or more minor children 
                        for whom the individual has custody or 
                        joint custody; or
                          (II) is pregnant.
                  (D) The term ``State'' means the States of 
                the United States, the Commonwealth of Puerto 
                Rico, the District of Columbia, the 
                Commonwealth of the Northern Mariana Islands, 
                Guam, the Virgin Islands, American Samoa, the 
                Trust Territories of the Pacific, and any other 
                possession of the United States.
          (17) Guarantees for refinancing loans.--
                  (A) In general.-- Upon the request of the 
                borrower, the Secretary shall, to the extent 
                provided in appropriation Acts and subject to 
                subparagraph (F), guarantee a loan that is made 
                to refinance an existing loan that is made 
                under this section or guaranteed under this 
                subsection, and that the Secretary determines 
                complies with the requirements of this 
                paragraph.
                  (B) Interest rate.-- To be eligible for a 
                guarantee under this paragraph, the refinancing 
                loan shall have a rate of interest that is 
                fixed over the term of the loan and does not 
                exceed the interest rate of the loan being 
                refinanced.
                  (C) Security.-- To be eligible for a 
                guarantee under this paragraph, the refinancing 
                loan shall be secured by the same single-family 
                residence as was the loan being refinanced, 
                which shall be owned by the borrower and 
                occupied by the borrower as the principal 
                residence of the borrower.
                  (D) Amount.-- To be eligible for a guarantee 
                under this paragraph, the principal obligation 
                under the refinancing loan shall not exceed an 
                amount equal to the sum of the balance of the 
                loan being refinanced and such closing costs as 
                may be authorized by the Secretary, which shall 
                include a discount not exceeding 200 basis 
                points and an origination fee not exceeding 
                such amount as the Secretary shall prescribe.
                  (E) Other requirements.-- The provisions of 
                the last sentence of paragraph (2) and 
                paragraphs (3), (6), (7)(A), (8), and (10) 
                shall apply to loans guaranteed under this 
                paragraph, and no other provisions of 
                paragraphs (2) through (13) shall apply to such 
                loans.
                  (F) Authority to establish limitation.-- The 
                Secretary may establish limitations on the 
                number of loans guaranteed under this 
                paragraph, which shall be based on market 
                conditions and other factors as the Secretary 
                considers appropriate.
          (18) Delegation of approval.-- The Secretary may 
        delegate, in part or in full, the Secretary's authority 
        to approve and execute binding Rural Housing Service 
        loan guarantees pursuant to this subsection to certain 
        preferred lenders, in accordance with standards 
        established by the Secretary.

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                              ----------                              


                          NATIONAL HOUSING ACT



           *       *       *       *       *       *       *
TITLE II--MORTGAGE INSURANCE

           *       *       *       *       *       *       *


                         insurance of mortgages

  Sec. 203. (a) The Secretary is authorized, upon application 
by the mortgagee, to insure as hereinafter provided any 
mortgage offered to him which is eligible for insurance as 
hereinafter provided, and, upon such terms as the Secretary may 
prescribe, to make commitments for the insuring of such 
mortgages prior to the date of their execution or disbursement 
thereon.
  (b) To be eligible for insurance under this section a 
mortgage shall comply with the following:
          (1) Have been made to, and be held by, a mortgagee 
        approved by the Secretary as responsible and able to 
        service the mortgage properly.
          (2) Involve a principal obligation (including such 
        initial service charges, appraisal, inspection, and 
        other fees as the Secretary shall approve) in an 
        amount--
                  (A) not to exceed the lesser of--
                          (i) in the case of a 1-family 
                        residence, 115 percent of the median 1-
                        family house price in the area, as 
                        determined by the Secretary; and in the 
                        case of a 2-, 3-, or 4-family 
                        residence, the percentage of such 
                        median price that bears the same ratio 
                        to such median price as the dollar 
                        amount limitation determined under the 
                        sixth sentence of section 305(a)(2) of 
                        the Federal Home Loan Mortgage 
                        Corporation Act (12 U.S.C. 1454(a)(2)) 
                        for a 2-, 3-, or 4-family residence, 
                        respectively, bears to the dollar 
                        amount limitation determined under such 
                        section for a 1-family residence; or
                          (ii) 150 percent of the dollar amount 
                        limitation determined under the sixth 
                        sentence of such section 305(a)(2) for 
                        a residence of applicable size;
                except that the dollar amount limitation in 
                effect under this subparagraph for any size 
                residence for any area may not be less than the 
                greater of: (I) the dollar amount limitation in 
                effect under this section for the area on 
                October 21, 1998; or (II) 65 percent of the 
                dollar amount limitation determined under the 
                sixth sentence of such section 305(a)(2) for a 
                residence of the applicable size; and
                  (B) not to exceed 100 percent of the 
                appraised value of the property.
        For purposes of the preceding sentence, the term 
        ``area'' means a metropolitan statistical area as 
        established by the Office of Management and Budget; and 
        the median 1-family house price for an area shall be 
        equal to the median 1-family house price of the county 
        within the area that has the highest such median price.
          Notwithstanding any other provision of this 
        paragraph, the amount which may be insured under this 
        section may be increased by up to 20 percent if such 
        increase is necessary to account for the increased cost 
        of the residence due to the installation of a solar 
        energy system (as defined in subparagraph (3) of the 
        last paragraph of section 2(a) of this Act) therein.
          Notwithstanding any other provision of this 
        paragraph, the Secretary may not insure, or enter into 
        a commitment to insure, a mortgage under this section 
        that is executed by a first-time homebuyer and that 
        involves a principal obligation (including such initial 
        service charges, appraisal, inspection, and other fees 
        as the Secretary shall approve) in excess of 97 percent 
        of the appraised value of the property unless the 
        mortgagor has completed a program of counseling with 
        respect to the responsibilities and financial 
        management involved in homeownership that is approved 
        by the Secretary; except that the Secretary may, in the 
        discretion of the Secretary, waive the applicability of 
        this requirement.
          (3) Have a maturity satisfactory to the Secretary, 
        but not to exceed, in any event, thirty-five years (or 
        thirty years if such mortgage is not approved for 
        insurance prior to construction) from the date of the 
        beginning of amortization of the mortgage.
          (4) Contain complete amortization provisions 
        satisfactory to the Secretary requiring periodic 
        payments by the mortgagor not in excess of his 
        reasonable ability to pay as determined by the 
        Secretary.
          (5) Bear interest at such rate as may be agreed upon 
        by the mortgagor and the mortgagee.
          (6) Provide, in a manner satisfactory to the 
        Secretary, for the application of the mortgagor's 
        periodic payments (exclusive of the amount allocated to 
        interest and to the premium charge which is required 
        for mortgage insurance as hereinafter provided) to 
        amortization of the principal of the mortgage.
          (7) Contain such terms and provisions with respect to 
        insurance, repairs, alterations, payment of taxes, 
        default reserves, delinquency charges, foreclosure 
        proceedings, anticipation of maturity, additional and 
        secondary liens, and other matters as the Secretary may 
        in his discretion prescribe.
          (9) Cash investment requirement.--
                  (A) In general.-- A mortgage insured under 
                this section shall be executed by a mortgagor 
                who shall have paid, in cash or its equivalent, 
                on account of the property an amount equal to 
                not less than 3.5 percent of the appraised 
                value of the property or such larger amount as 
                the Secretary may determine.
                  (B) Family members.-- For purposes of this 
                paragraph, the Secretary shall consider as cash 
                or its equivalent any amounts borrowed from a 
                family member (as such term is defined in 
                section 201), subject only to the requirements 
                that, in any case in which the repayment of 
                such borrowed amounts is secured by a lien 
                against the property, that--
                          (i) such lien shall be subordinate to 
                        the mortgage; and
                          (ii) the sum of the principal 
                        obligation of the mortgage and the 
                        obligation secured by such lien may not 
                        exceed 100 percent of the appraised 
                        value of the property plus any initial 
                        service charges, appraisal, inspection, 
                        and other fees in connection with the 
                        mortgage.
                  (C) Prohibited sources.-- In no case shall 
                the funds required by subparagraph (A) consist, 
                in whole or in part, of funds provided by any 
                of the following parties before, during, or 
                after closing of the property sale:
                          (i) The seller or any other person or 
                        entity that financially benefits from 
                        the transaction.
                          (ii) Any third party or entity that 
                        is reimbursed, directly or indirectly, 
                        by any of the parties described in 
                        clause (i).
                This subparagraph shall apply only to mortgages 
                for which the mortgagee has issued credit 
                approval for the borrower on or after October 
                1, 2008.
  (c)(1) The Secretary is authorized to fix premium charge for 
the insurance of mortgages under the separate sections of this 
title but in the case of any mortgage such charge shall be not 
less than an amount equivalent to one-fourth of 1 per centum 
per annum nor more than an amount equivalent to 1 per centum 
per annum of the amount of the principal obligation of the 
mortgage outstanding at any time, without taking into account 
delinquent payments or prepayments: Provided, That premium 
charges fixed for insurance (1) under section 245, 247, 251, 
252, or 253, or any other financing mechanism providing 
alternative methods for repayment of a mortgage that is 
determined by the Secretary to involve additional risk, or (2) 
under subsection (n) are not required to be the same as the 
premium charges for mortgages insured under the other 
provisions of this section, but in no case shall premium 
charges under subsection (n) exceed 1 per centum per annum: 
Provided, That any reduced premium charge so fixed and computed 
may, in the discretion of the Secretary, also be made 
applicable in such manner as the Secretary shall prescribe to 
each insured mortgage outstanding under the section or sections 
involved at the time the reduced premium charge is fixed. Such 
premium charges shall be payable by the mortgagee, either in 
cash, or in debentures issued by the Secretary under this title 
at par plus accrued interest, in such manner as may be 
prescribed by the Secretary: Provided, That debentures 
presented in payment of premium charges shall represent 
obligations of the particular insurance fund or account to 
which such premium charges are to be credited: Provided 
further, That the Secretary may require the payment of one or 
more such premium charges at the time the mortgage is insured, 
at such discount rate as he may prescribe not in excess of the 
interest rate specified in the mortgage. If the Secretary finds 
upon the presentation of a mortgage for insurance and the 
tender of the initial premium charge or charges so required 
that the mortgage complies with the provisions of this section, 
such mortgage may be accepted for insurance by endorsement or 
otherwise as the Secretary may prescribe; but no mortgage shall 
be accepted for insurance under this section unless the 
Secretary finds that the project with respect to which the 
mortgage is executed is economically sound. In the event that 
the principal obligation of any mortgage accepted for insurance 
under this title is paid in full prior to the maturity date, 
the Secretary is further authorized in his discretion to 
require the payment by the mortgagee of an adjusted premium 
charge in such amount as the Secretary determines to be 
equitable, but not in excess of the aggregate amount of the 
premium charges that the mortgagee would otherwise have been 
required to pay if the mortgage had continued to be insured 
until such maturity date; and in the event that the principal 
obligation is paid in full as herein set forth, the Secretary 
is authorized to refund to the mortgagee for the account of the 
mortgagor all, or such portion as he shall determine to be 
equitable, of the current unearned premium charges theretofore 
paid: Provided, That with respect to mortgages (1) for which 
the Secretary requires, at the time the mortgage is insured, 
the payment of a single premium charge to cover the total 
premium obligation for the insurance of the mortgage, and (2) 
on which the principal obligation is paid before the number of 
years on which the premium with respect to a particular 
mortgage was based, or the property is sold subject to the 
mortgage or is sold and the mortgage is assumed prior to such 
time, the Secretary shall provide for refunds, where 
appropriate, of a portion of the premium paid and shall provide 
for appropriate allocation of the premium cost among the 
mortgagors over the term of the mortgage, in accordance with 
procedures established by the Secretary which take into account 
sound financial and actuarial considerations.
  (2) Notwithstanding any other provision of this section, each 
mortgage secured by a 1- to 4-family dwelling that is an 
obligation of the Mutual Mortgage Insurance Fund shall be 
subject to the following requirements:
          (A) The Secretary shall establish and collect, at the 
        time of insurance, a single premium payment in an 
        amount not exceeding 3 percent of the amount of the 
        original insured principal obligation of the mortgage. 
        In the case of a mortgage for which the mortgagor is a 
        first-time homebuyer who completes a program of 
        counseling with respect to the responsibilities and 
        financial management involved in homeownership that is 
        approved by the Secretary, the premium payment under 
        this subparagraph shall not exceed 2.75 percent of the 
        amount of the original insured principal obligation of 
        the mortgage. Upon payment in full of the principal 
        obligation of a mortgage prior to the maturity date of 
        the mortgage, the Secretary shall refund all of the 
        unearned premium charges paid on the mortgage pursuant 
        to this subparagraph, provided that the mortgagor 
        refinances the unpaid principal obligation under title 
        II of this Act.
          (B) In addition to the premium under subparagraph 
        (A), the Secretary may establish and collect annual 
        premium payments in an amount not exceeding 1.5 percent 
        of the remaining insured principal balance (excluding 
        the portion of the remaining balance attributable to 
        the premium collected under subparagraph (A) and 
        without taking into account delinquent payments or 
        prepayments) for the following periods:
                  (i) For any mortgage involving an original 
                principal obligation (excluding any premium 
                collected under subparagraph (A)) that is less 
                than 90 percent of the appraised value of the 
                property (as of the date the mortgage is 
                accepted for insurance), for the first 11 years 
                of the mortgage term.
                  (ii) For any mortage involving an original 
                principal obligation (excluding any premium 
                collected under subparagraph (A)) that is 
                greater than or equal to 90 percent of such 
                value, for the first 30 years of the mortgage 
                term; except that notwithstanding the matter 
                preceding clause (i), for any mortgage 
                involving an original principal obligation 
                (excluding any premium collected under 
                subparagraph (A)) that is greater than 95 
                percent of such value, the annual premium 
                collected during the 30-year period under this 
                clause may be in an amount not exceeding 1.55 
                percent of the remaining insured principal 
                balance (excluding the portion of the remaining 
                balance attributable to the premium collected 
                under subparagraph (A) and without taking into 
                account delinquent payments or prepayments).
          (C)(i) In addition to the premiums under 
        subparagraphs (A) and (B), the Secretary shall 
        establish and collect annual premium payments for any 
        mortgage for which the Secretary collects an annual 
        premium payment under subparagraph (B), in an amount 
        described in clause (ii).
          (ii)(I) Subject to subclause (II), with respect to a 
        mortgage, the amount described in this clause is 10 
        basis points of the remaining insured principal balance 
        (excluding the portion of the remaining balance 
        attributable to the premium collected under 
        subparagraph (A) and without taking into account 
        delinquent payments or prepayments).
          (II) During the 2-year period beginning on the date 
        of enactment of this subparagraph, the Secretary shall 
        increase the number of basis points of the annual 
        premium payment collected under this subparagraph 
        incrementally, as determined appropriate by the 
        Secretary, until the number of basis points of the 
        annual premium payment collected under this 
        subparagraph is equal to the number described in 
        subclause (I).
  (d)(1) Except as provided in paragraph (2) of this 
subsection, notwithstanding provision of this title governing 
maximum mortgage amounts for insuring a mortgage secured by a 
one- to four-family dwelling, the maximum amount of the 
mortgage determined under any such provision may be increased 
by the amount of the mortgage insurance premium paid at the 
time the mortgage is insured.
  (2) The maximum amount of a mortgage determined under 
subsection (b)(2)(B) of this section may not be increased as 
provided in paragraph (1).
  (e) Any contract of insurance heretofore or hereafter 
executed by the Secretary under this title shall be conclusive 
evidence of the eligibility of the loan or mortgage for 
insurance, and the validility of any contract of insurance so 
executed shall be incontestable in the hands of an approved 
financial institution or approved mortgagee from the date of 
the execution of such contract, except for fraud or 
misrepresentation on the part of such approved financial 
institution or approved mortgagee.
  (f) Disclosure of Other Mortgage Products.--
          (1) In general.-- In conjunction with any loan 
        insured under this section, an original lender shall 
        provide to each prospective borrower a disclosure 
        notice that provides a 1-page analysis of mortgage 
        products offered by that lender and for which the 
        borrower would qualify.
          (2) Notice.-- The notice required under paragraph (1) 
        shall include--
                  (A) a generic analysis comparing the note 
                rate (and associated interest payments), 
                insurance premiums, and other costs and fees 
                that would be due over the life of the loan for 
                a loan insured by the Secretary under 
                subsection (b) with the note rates, insurance 
                premiums (if applicable), and other costs and 
                fees that would be expected to be due if the 
                mortgagor obtained instead other mortgage 
                products offered by the lender and for which 
                the borrower would qualify with a similar loan-
                to-value ratio in connection with a 
                conventional mortgage (as that term is used in 
                section 305(a)(2) of the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) 
                or section 302(b)(2) of the Federal National 
                Mortgage Association Charter Act (12 U.S.C. 
                1717(b)(2)), as applicable), assuming 
                prevailing interest rates; and
                  (B) a statement regarding when the 
                requirement of the mortgagor to pay the 
                mortgage insurance premiums for a mortgage 
                insured under this section would terminate, or 
                a statement that the requirement shall 
                terminate only if the mortgage is refinanced, 
                paid off, or otherwise terminated.
  (g)(1) The Secretary may insure a mortgage under this title 
that is secured by a 1- to 4-family dwelling, or approve a 
substitute mortgagor with respect to any such mortgage, only if 
the mortgagor is to occupy the dwelling as his or her principal 
residence or as a secondary residence, as determined by the 
Secretary. In making this determination with respect to the 
occupancy of secondary residences, the Secretary may not insure 
mortgages with respect to such residences unless the Secretary 
determines that it is necessary to avoid undue hardship to the 
mortgagor. In no event may a secondary residence under this 
subsection include a vacation home, as determined by the 
Secretary.
  (2) The occupancy requirement established in paragraph (1) 
shall not apply to any mortgagor (or co-mortgagor, as 
appropriate) that is--
          (A) a public entity, as provided in section 214 or 
        247, or any other State or local government or an 
        agency thereof;
          (B) a private nonprofit or public entity, as provided 
        in section 221(h) or 235(j), or other private nonprofit 
        organization that is exempt from taxation under section 
        501(c)(3) of the Internal Revenue Code of 1986 and 
        intends to sell or lease the mortgage property to low 
        or moderate-income persons, as determined by the 
        Secretary;
          (C) an Indian tribe, as provided in section 248;
          (D) a serviceperson who is unable to meet such 
        requirement because of his or her duty assignment, as 
        provided in section 216 or subsection (b)(4) or (f) of 
        section 222;
          (E) a mortgagor or co-mortgagor under subsection (k); 
        or
          (F) a mortgagor that, pursuant to section 223(a)(7), 
        is refinancing an existing mortgage insured under this 
        Act for not more than the outstanding balance of the 
        existing mortgage, if the amount of the monthly payment 
        due under the refinancing mortgage is less than the 
        amount due under the existing mortgage for the month in 
        which the refinancing mortgage is executed.
  (3) For purposes of this subsection, the term ``substitute 
mortgagor'' means a person who, upon the release by a mortgagee 
of a previous mortgagor from personal liability on the mortgage 
note, assumes such liability and agrees to pay the mortgage 
debt.
  (h) Notwithstanding any other provision of this section, the 
Secretary is authorized to insure any mortgage which involves a 
principal obligation not in excess of the applicable maximum 
dollar limit under subsection (b) and not in excess of 100 per 
centum of the appraised value of a property upon which there is 
located a dwelling designed principally for a single-family 
residence, where the mortgagor establishes (to the satisfaction 
of the Secretary) that his home which he occupied as an owner 
or as a tenant was destroyed or damaged to such an extent that 
reconstruction is required as a result of a flood, fire, 
hurricane, earthquake, storm, or other catastrophe, which the 
President, pursuant to Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, has determined to be a major 
disaster. In any case in which the single family residence to 
be insured under this subsection is within a jurisdiction in 
which the President has declared a major disaster to have 
occurred, the Secretary is authorized, for a temporary period 
not to exceed 18 months from the date of such Presidential 
declaration, to enter into agreements to insure a mortgage 
which involves a principal obligation of up to 100 percent of 
the dollar limitation determined under section 305(a)(2) of the 
Federal Home Loan Mortgage Corporation Act for single family 
residence, and not in excess of 100 percent of the appraised 
value.
  (j) Loans secured by mortgages insured under this section 
shall not be taken into account in determining the amount of 
real estate loans which a national bank may make in relation to 
its capital and surplus or its time and savings deposits.
  (k)(1) The Secretary may, in order to assist in the 
rehabilitation of one- to four-family structures used primarily 
for residential purposes, insure and make commitments to insure 
rehabilitation loans (including advances made during 
rehabilitation) made by financial institutions. Such 
commitments to insure and such insurance shall be made upon 
such terms and conditions which the Secretary may prescribe and 
which are consistent with the provisions of subsections (b), 
(c), (e), (i) and (j) of this section, except as modified by 
the provisions of this subsection.
  (2) For the purpose of this subsection--
          (A) the term ``rehabilitation loan'' means a loan, 
        advance of credit, or purchase of an obligation 
        representing a loan or advance of credit, made for the 
        purpose of financing--
                  (i) the rehabilitation of an existing one- to 
                four-unit structure which will be used 
                primarily for residential purposes;
                  (ii) the rehabilitation of such a structure 
                and the refinancing of the outstanding 
                indebtedness on such structure and the real 
                property on which the structure is located; or
                  (iii) the rehabilitation of such a structure 
                and the purchase of the structure and the real 
                property on which it is located; and
          (B) the term ``rehabilitation'' means the improvement 
        (including improvements designed to meet cost-effective 
        energy conservation standards prescribed by the 
        Secretary) or repair of a structure, or facilities in 
        connection with a structure, and may include the 
        provision of such sanitary or other facilities as are 
        required by applicable codes, a community development 
        plan, or a statewide property insurance plan to be 
        provided by the owner or tenant of the project. The 
        term ``rehabilitation'' may also include measures to 
        evaluate and reduce lead-based paint hazards, as such 
        terms are defined in section 1004 of the Residential 
        Lead-Based Paint Hazard Reduction Act of 1992.
  (3) To be eligible for insurance under this subsection, a 
rehabilitation loan shall--
          (A) involve a principal obligation (including such 
        initial service charges, appraisal, inspection, and 
        other fees as the Secretary shall approve) in an amount 
        which does not exceed, when added to any outstanding 
        indebtedness of the borrower which is secured by the 
        structure and the property on which it is located, the 
        amount specified in subsection (b)(2); except that, in 
        determining the amount of the principal obligation for 
        purposes of this subsection, the Secretary shall 
        establish as the appraised value of the property an 
        amount not to exceed the sum of the estimated cost of 
        rehabilitation and the Secretary's estimate of the 
        value of the property before rehabilitation;
          (B) bear interest at such rate as may be agreed upon 
        by the borrower and the financial institution;
          (C) be an acceptable risk, as determined by the 
        Secretary; and
          (D) comply with such other terms, conditions, and 
        restrictions as the Secretary may prescribe.
  (4) Any rehabilitation loan insured under this subsection may 
be refinanced and extended in accordance with such terms and 
conditions as the Secretary may prescribe, but in no event for 
an additional amount or term which exceeds the maximum provided 
for in this subsection.
  (5) All funds received and all disbursements made pursuant to 
the authority established by this subsection shall be credited 
or charged as appropriate, to the Mutual Mortgage Insurance 
Fund, and insurance benefits shall be paid in cash out of such 
Fund or in debentures executed in the name of such Fund. 
Insurance benefits paid with respect to loans secured by a 
first mortgage and insured under this subsection shall be paid 
in accordance with section 204. Insurance benefits paid with 
respect to loans secured by a mortgage other than a first 
mortgage and insured under this subsection shall be paid in 
accordance with paragraphs (6) and (7) of section 220(h), 
except that reference to ``this subsection'' in such paragraphs 
shall be construed as referring to this subsection.
          (6) The Secretary is authorized, for a temporary 
        period not to exceed 18 months from the date on which 
        the President has declared a major disaster to have 
        occurred, to enter into agreements to insure a 
        rehabilitation loan under this subsection which 
        involves a principal obligation of up to 100 percent of 
        the dollar limitation determined under section 
        305(a)(2) of the Federal Home Loan Mortgage Corporation 
        Act for a residence of the applicable size, if such 
        loan is secured by a structure and property that are 
        within a jurisdiction in which the President has 
        declared such disaster, pursuant to the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act, 
        and if such loan otherwise conforms to the loan-to-
        value ratio and other requirements of this subsection.
  (n)(1) The Secretary is authorized to insure under this 
section any mortgage meeting the requirements of subsection (b) 
of this section, except as modified by this subsection. To be 
eligible, the mortgage shall involve a dwelling unit in a 
cooperative housing project which is covered by a blanket 
mortgage insured under this Act or the construction of which 
was completed more than a year prior to the application for the 
mortgage insurance. The mortgage amount as determined under the 
other provisions of subsection (b) of this section shall be 
reduced by an amount equal to the portion of the unpaid balance 
of the blanket mortgage covering the project which is 
attributable (as of the date the mortgage is accepted for 
insurance) to such unit.
  (2) For the purpose of this subsection--
          (A) The terms ``home mortgage'' and ``mortgage'' 
        include a first or subordinate mortgage or lien given 
        (in accordance with the laws of the State where the 
        property is located and accompanied by such security 
        and other undertakings as may be required under 
        regulations of the Secretary) to secure a loan made to 
        finance the purchase of stock or membership in a 
        cooperative ownership housing corporation the permanent 
        occupancy of the dwelling units of which is restricted 
        to members of such corporation, where the purchase of 
        such stock or membership will entitle the purchaser to 
        the permanent occupancy of one of such units.
          (B) The terms ``appraised value of the property'', 
        ``value of the property'', and ``value'' include the 
        appraised value of a dwelling unit in a cooperative 
        housing project of the type described in subparagraph 
        (A) where the purchase of the stock or membership 
        involved will entitle the purchaser to the permanent 
        occupancy of that unit; and the term ``property'' 
        includes a dwelling unit in such a cooperative project.
          (C) The terms ``mortgagor'' includes a person or 
        persons giving a first or subordinate mortgage or lien 
        (of the type described in subparagraph (A)) to secure a 
        loan to finance the purchase of stock or membership in 
        a cooperative housing corporation.
  (r) The Secretary shall take appropriate actions to reduce 
losses under the single-family mortgage insurance programs 
carried out under this title. Such actions shall include--
          (1) an annual review by the Secretary of the rate of 
        early serious defaults and claims, in accordance with 
        section 533;
          (2) requiring that at least one person acquiring 
        ownership of a one- to four-family residential property 
        encumbered by a mortgage insured under this title be 
        determined to be credit-worthy under standards 
        prescribed by the Secretary, whether or not such person 
        assumes personal liability under the mortgage (except 
        that acquisitions by devise or descent shall not be 
        subject to this requirement);
          (3) in any case where personal liability under a 
        mortgage is assumed, requiring that the original 
        mortgagor be advised of the procedures by which he or 
        she may be released from liability; and
          (4) providing counseling, either directly or through 
        third parties, to delinquent mortgagors whose mortgages 
        are insured under this section 203 (12 U.S.C. 1709), 
        using the Fund to pay for such counseling.
In any case where the homeowner does not request a release from 
liability, the purchaser and the homeowner shall have joint and 
several liability for any default for a period of 5 years 
following the date of the assumption. After the close of such 
5-year period, only the purchaser shall be liable for any 
default on the mortgage unless the mortgage is in default at 
the time of the expiration of the 5-year period.
  (t)(1) Each mortgagee (or servicer) with respect to a 
mortgage under this section shall provide each mortgagor of 
such mortgagee (or servicer) written notice, not less than 
annually, containing a statement of the amount outstanding for 
prepayment of the principal amount of the mortgage and 
describing any requirements the mortgagor must fulfill to 
prevent the accrual of any interest on such principal amount 
after the date of any prepayment. This paragraph shall apply to 
any insured mortgage outstanding on or after the expiration of 
the 90-day period beginning on the date of effectiveness of 
final regulations implementing this paragraph.
  (2) Each mortgagee (or servicer) with respect to a mortgage 
under this section shall, at or before closing with respect to 
any such mortgage, provide the mortgagor with written notice 
(in such form as the Secretary shall prescribe, by regulation, 
before the expiration of the 90-day period beginning upon the 
date of the enactment of the Cranston-Gonzalez National 
Affordable Housing Act) describing any requirements the 
mortgagor must fulfill upon prepayment of the principal amount 
of the mortgage to prevent the accrual of any interest on the 
principal amount after the date of such prepayment. This 
paragraph shall apply to any mortgage executed after the 
expiration of the period under paragraph (1).
  (u)(1) No mortgagee may make or hold mortgages insured under 
this section if the customary lending practices of the 
mortgagee, as determined by the Secretary pursuant to section 
539, provide for a variation in mortgage charge rates that 
exceeds 2 percent for insured mortgages made by the mortgagee 
on dwellings located within an area. The Secretary shall ensure 
that any permissible variations in the mortgage charge rates of 
any mortgagee are based only on actual variations in fees or 
costs to the mortgagee to make the loan.
  (2) For purposes of this subsection--
          (A) the term ``area'' means a metropolitan 
        statistical area as established by the Office of 
        Management and Budget;
          (B) the term ``mortgage charges'' includes the 
        interest rate, discount points, loan origination fee, 
        and any other amount charged to a mortgagor with 
        respect to an insured mortgage; and
          (C) the term ``mortgage charge rate'' means the 
        amount of mortgage charges for an insured mortgage 
        expressed as a percentage of the initial principal 
        amount of the mortgage.
  (v) The insurance of a mortgage under this section in 
connection with the assistance provided under section 8(y) of 
the United States Housing Act of 1937 shall be the obligation 
of the Mutual Mortgage Insurance Fund.
  (w) Annual Report.--The Secretary of Housing and Urban 
Development shall submit to the Congress an annual report on 
the single family mortgage insurance program under this 
section. Each report shall set forth--
          (1) an analysis of the income groups served by the 
        single family insurance program, including--
                  (A) the percentage of borrowers whose incomes 
                do not exceed 100 percent of the median income 
                for the area;
                  (B) the percentage of borrowers whose incomes 
                do not exceed 80 percent of the median income 
                for the area; and
                  (C) the percentage of borrowers whose incomes 
                do not exceed 60 percent of the median income 
                for the area;
          (2) an analysis of the percentage of minority 
        borrowers annually assisted by the program; the 
        percentage of central city borrowers assisted and the 
        percentage of rural borrowers assisted by the program;
          (3) the extent to which the Secretary in carrying out 
        the program has employed methods to ensure that needs 
        of low and moderate income families, underserved areas, 
        and historically disadvantaged groups are served by the 
        program; and
          (4) the current impediments to having the program 
        serve low and moderate income borrowers; borrowers from 
        central city areas; borrowers from rural areas; and 
        minority borrowers.
  (x) Management Deficiencies Report.--
          (1) In general.-- Not later than 60 days after the 
        date of the enactment of this subsection, and annually 
        thereafter, the Secretary shall submit to Congress a 
        report on the plan of the Secretary to address each 
        material weakness, reportable condition, and 
        noncompliance with an applicable law or regulation (as 
        defined by the Director of the Office of Management and 
        Budget) identified in the most recent audited financial 
        statement of the Federal Housing Administration 
        submitted under section 3515 of title 31, United States 
        Code.
          (2) Contents of annual report.-- Each report 
        submitted under paragraph (1) shall include--
                  (A) an estimate of the resources, including 
                staff, information systems, and contract 
                assistance, required to address each material 
                weakness, reportable condition, and 
                noncompliance with an applicable law or 
                regulation described in paragraph (1), and the 
                costs associated with those resources;
                  (B) an estimated timetable for addressing 
                each material weakness, reportable condition, 
                and noncompliance with an applicable law or 
                regulation described in paragraph (1); and
                  (C) the progress of the Secretary in 
                implementing the plan of the Secretary included 
                in the report submitted under paragraph (1) for 
                the preceding year, except that this 
                subparagraph does not apply to the initial 
                report submitted under paragraph (1).
  (y) Requirements for Mortgages for Condominiums.--
          (1) Project recertification requirements.-- 
        Notwithstanding any other law, regulation, or guideline 
        of the Secretary, including chapter 2.4 of the 
        Condominium Project Approval and Processing Guide of 
        the FHA, the Secretary shall streamline the project 
        certification requirements that are applicable to the 
        insurance under this section for mortgages for 
        condominium projects so that recertifications are 
        substantially less burdensome than certifications. The 
        Secretary shall consider lengthening the time between 
        certifications for approved properties, and allowing 
        updating of information rather than resubmission.
          (2) Commercial space requirements.-- Notwithstanding 
        any other law, regulation, or guideline of the 
        Secretary, including chapter 2.1.3 of the Condominium 
        Project Approval and Processing Guide of the FHA, in 
        providing for exceptions to the requirement for the 
        insurance of a mortgage on a condominium property under 
        this section regarding the percentage of the floor 
        space of a condominium property that may be used for 
        nonresidential or commercial purposes, the Secretary 
        shall provide that--
                  (A) any request for such an exception and the 
                determination of the disposition of such 
                request may be made, at the option of the 
                requester, under the direct endorsement lender 
                review and approval process or under the HUD 
                review and approval process through the 
                applicable field office of the Department; and
                  (B) in determining whether to allow such an 
                exception for a condominium property, factors 
                relating to the economy for the locality in 
                which such project is located or specific to 
                project, including the total number of family 
                units in the project, shall be considered.
        Not later than the expiration of the 90-day period 
        beginning on the date of the enactment of this 
        paragraph, the Secretary shall issue regulations to 
        implement this paragraph, which shall include any 
        standards, training requirements, and remedies and 
        penalties that the Secretary considers appropriate.
          (3) Transfer fees.-- Notwithstanding any other law, 
        regulation, or guideline of the Secretary, including 
        chapter 1.8.8 of the Condominium Project Approval and 
        Processing Guide of the FHA and section 203.41 of the 
        Secretary's regulations (24 C.F.R. 203.41), existing 
        standards of the Federal Housing Finance Agency 
        relating to encumbrances under private transfer fee 
        covenants shall apply to the insurance of mortgages by 
        the Secretary under this section to the same extent and 
        in the same manner that such standards apply to the 
        purchasing, investing in, and otherwise dealing in 
        mortgages by the Federal National Mortgage Association 
        and the Federal Home Loan Mortgage Corporation. If the 
        provisions of part 1228 of the Director of the Federal 
        Housing Finance Agency's regulations (12 C.F.R. part 
        1228) are amended or otherwise changed after the date 
        of the enactment of this paragraph, the Secretary of 
        Housing and Urban Development shall adopt any such 
        amendments or changes for purposes of this paragraph, 
        unless the Secretary causes to be published in the 
        Federal Register a notice explaining why the Secretary 
        will disregard such amendments or changes within 90 
        days after the effective date of such amendments or 
        changes.
          (4) Owner-occupancy requirement.--
                  (A) Establishment of percentage 
                requirement.-- Not later than the expiration of 
                the 90-day period beginning on the date of the 
                enactment of this paragraph, the Secretary 
                shall, by rule, notice, or mortgagee letter, 
                issue guidance regarding the percentage of 
                units that must be occupied by the owners as a 
                principal residence or a secondary residence 
                (as such terms are defined by the Secretary), 
                or must have been sold to owners who intend to 
                meet such occupancy requirements, including 
                justifications for the percentage requirements, 
                in order for a condominium project to be 
                acceptable to the Secretary for insurance under 
                this section of a mortgage within such 
                condominium property.
                  (B) Failure to act.-- If the Secretary fails 
                to issue the guidance required under 
                subparagraph (A) before the expiration of the 
                90-day period specified in such clause, the 
                following provisions shall apply:
                          (i) 35 percent requirement.-- In 
                        order for a condominium project to be 
                        acceptable to the Secretary for 
                        insurance under this section, at least 
                        35 percent of all family units 
                        (including units not covered by FHA-
                        insured mortgages) must be occupied by 
                        the owners as a principal residence or 
                        a secondary residence (as such terms 
                        are defined by the Secretary), or must 
                        have been sold to owners who intend to 
                        meet such occupancy requirement.
                          (ii) Other considerations.-- The 
                        Secretary may increase the percentage 
                        applicable pursuant to clause (i) to a 
                        condominium project on a project-by-
                        project or regional basis, and in 
                        determining such percentage for a 
                        project shall consider factors relating 
                        to the economy for the locality in 
                        which such project is located or 
                        specific to project, including the 
                        total number of family units in the 
                        project.

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                              ----------                              


                 MCKINNEY-VENTO HOMELESS ASSISTANCE ACT



           *       *       *       *       *       *       *
SECTION 101. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``McKinney-
Vento Homeless Assistance Act''.
  (b) Table Of Contents.--

     * * * * * * *

                      TITLE IV--HOUSING ASSISTANCE

     * * * * * * *

                  Subtitle C--Continuum of Care Program

Sec. 421. Purposes.
     * * * * * * *
[Sec. 432. Regulations.
[Sec. 433. Reports to Congress.]
Sec. 432. Geographic areas.
Sec. 433. Regulations.
Sec. 434. Reports to Congress.
     * * * * * * *

TITLE IV--HOUSING ASSISTANCE

           *       *       *       *       *       *       *


Subtitle B--Emergency Solutions Grants Program

           *       *       *       *       *       *       *


SEC. 414. ALLOCATION AND DISTRIBUTION OF ASSISTANCE.

  (a) In General.--The Secretary shall allocate assistance 
under this subtitle to metropolitan cities, urban counties, and 
States (for distribution to local governments and private 
nonprofit organizations in the States) in a manner that ensures 
that the percentage of the total amount available under this 
subtitle for any fiscal year that is allocated to any State, 
metropolitan city, or urban county is equal to the percentage 
of the total amount available for section 106 of the Housing 
and Community Development Act of 1974 for such prior fiscal 
year that is allocated to such State, metropolitan city, or 
urban county.
  (b) Minimum Allocation Requirement.--If, under the allocation 
provisions applicable under this subtitle, any metropolitan 
city or urban county would receive a grant of less than 0.05 
percent of the amounts appropriated under section 408 and made 
available to carry out this subtitle for any fiscal year, such 
amount shall instead be reallocated to the State, except that 
any city that is located in a State that does not have counties 
as local governments, that has a population greater than 40,000 
but less than 50,000 as used in determining the fiscal year 
1987 community development block grant program allocation, and 
that was allocated in excess of $1,000,000 in community 
development block grant funds in fiscal year 1987, shall 
receive directly the amount allocated to such city under 
subsection (a).
  (c) Distributions to Nonprofit Organizations, Public Housing 
Agencies, and Local Redevelopment Authorities.--Any local 
government receiving assistance under this subtitle may 
distribute all or a portion of such assistance to private 
nonprofit organizations providing assistance to homeless 
individuals, to public housing agencies (as defined under 
section 3(b)(6) of the United States Housing Act of 1937), or 
to local redevelopment authorities (as defined under State law) 
. Any State receiving assistance under this subtitle may 
distribute all or a portion of such assistance to private 
nonprofit organizations providing assistance to homeless 
individuals, if the local government for the locality in which 
the project is located certifies that it approves of the 
project.
  (d) Reallocation of Funds.--
          (1) The Secretary shall, not less than twice during 
        each fiscal year, reallocate any assistance provided 
        under this subtitle that is unused or returned or that 
        becomes available under subsection (b).
          (2) If a city or county eligible for a grant under 
        subsection (a) fails to obtain approval of its 
        comprehensive plan during the 90-day period following 
        the date funds authorized by this subtitle first become 
        available for allocation during any fiscal year, the 
        amount that the city or county would have received 
        shall be available to the State in which the city or 
        county is located if the State has obtained approval of 
        its comprehensive plan. Any amounts that cannot be 
        allocated to a State under the preceding sentence shall 
        be reallocated to other States, counties, and cities 
        that demonstrate extraordinary need or large numbers of 
        homeless individuals, as determined by the Secretary.
          (3) If a State or Indian tribe fails to obtain 
        approval of its comprehensive plan during the 90-day 
        period following the date funds authorized by this 
        subtitle first become available for allocation during 
        any fiscal year, the amount that the State or Indian 
        tribe would have received shall be reallocated to other 
        States and to cities and counties as applicable, that 
        demonstrate extraordinary need or large numbers of 
        homeless individuals, as determined by the Secretary.
  (e) Allocations to Territories.--In addition to the other 
allocations required in this section, the Secretary shall (for 
amounts appropriated after the date of enactment of this Act) 
allocate assistance under this subtitle to the Virgin Islands, 
Guam, American Samoa, the Northern Mariana Islands, the Trust 
Territory of the Pacific Islands, and any other territory or 
possession of the United States, in accordance with an 
allocation formula established by the Secretary.

           *       *       *       *       *       *       *


Subtitle C--Continuum of Care Program

           *       *       *       *       *       *       *


SEC. 432. GEOGRAPHIC AREAS.

  (a) Requirement to Define.--For purposes of this subtitle, 
the term ``geographic area'' shall have such meaning as the 
Secretary shall by notice provide.
  (b) Issuance of Notice.--Not later than the expiration of the 
90-day period beginning on the date of the enactment of the 
Housing Opportunity Through Modernization Act of 2015, the 
Secretary shall issue a notice setting forth the definition 
required by subsection (a).

SEC. [432.]  433. REGULATIONS.

  Not later than the expiration of the 90-day period beginning 
on the date of the enactment of the Housing and Community 
Development Act of 1992, the Secretary shall issue interim 
regulations to carry out this subtitle, which shall take effect 
upon issuance. The Secretary shall issue final regulations to 
carry out this subtitle after notice and opportunity for public 
comment regarding the interim regulations, pursuant to the 
provisions of section 553 of title 5, United States Code 
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such 
section). The duration of the period for public comment shall 
not be less than 60 days, and the final regulations shall be 
issued not later than the expiration of the 60-day period 
beginning upon the conclusion of the comment period and shall 
take effect upon issuance.

SEC. [433.]  434. REPORTS TO CONGRESS.

  The Secretary shall submit a report to the Congress annually, 
summarizing the activities carried out under this subtitle and 
setting forth the findings, conclusions, and recommendations of 
the Secretary as a result of the activities. The report shall 
be submitted not later than 4 months after the end of each 
fiscal year (except that, in the case of fiscal year 1993, the 
report shall be submitted not later than 6 months after the end 
of the fiscal year).

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            DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT



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             under secretary and other officers and offices

  Sec. 4. (a)(1) There shall be in the Department a Deputy 
Secretary, 7 Assistant Secretaries, and a general counsel, who 
shall be appointed by the President by and with the advice and 
consent of the Senate, and who shall perform such functions, 
powers, and duties as the Secretary shall prescribe from time 
to time.
  (2) There shall be in the Department an Assistant Secretary 
for Public Affairs, who shall be appointed by the President and 
shall perform such functions, powers, and duties as the 
Secretary shall prescribe from time to time.
  (b) There shall be in the Department a Federal Housing 
Commissioner, who shall be one of the Assistant Secretaries, 
who shall head a Federal Housing Administration within the 
Department, who shall have such duties and powers as may be 
prescribed by the Secretary, and who shall administer, under 
the supervision and direction of the Secretary, departmental 
programs relating to the private mortgage market. The Secretary 
shall ensure, to the extent practicable, that managers of 
Federal Housing Administration programs, at each level of the 
Department, shall be accountable for program operation, risk 
management, management of cash and other Federal assets, and 
program financing related to activities over which such 
managers have responsibility.
  (c) There shall be in the Department a Director of Urban 
Program Coordination, who shall be designated by the Secretary. 
He shall assist the Secretary in carrying out his 
responsibilities to the President with respect to achieving 
maximum coordination of the programs of the various departments 
and agencies of the Government which have a major impact on 
community development. In providing such assistance, the 
Director shall make such studies of urban and community 
problems as the Secretary shall request, and shall develop 
recommendations relating to the administration of Federal 
programs affecting such problems, particularly with respect to 
achieving effective cooperation among the Federal, State, and 
local agencies concerned. Subject to the direction of the 
Secretary, the Director shall, in carrying out his 
responsibilities, (1) establish and maintain close liaison with 
the Federal departments and agencies concerned, and (2) consult 
with State, local, and regional officials, and consider their 
recommendations with respect to such programs.
  (d) There shall be in the Department an Assistant to the 
Secretary, designated by the Secretary, who shall be 
responsible for providing information and advice to nonprofit 
organizations desiring to sponsor housing projects assisted 
under programs administered by the Department.
  (e)(1)(A) There shall be in the Department a Special 
Assistant for Indian and Alaska Native Programs, who shall be 
located in the Office of the Assistant Secretary for Public and 
Indian Housing. The Special Assistant for Indian and Alaska 
Native Programs shall be designated by the Secretary not later 
than 60 days after the date of enactment of this subsection.
  (B) The Special Assistant for Indian and Alaska Native 
Programs shall be appointed based solely on merit and shall be 
covered under the provisions of title 5, United States Code, 
governing appointments in the competitive service.
  (C) The Special Assistant for Indian and Alaska Native 
Programs shall be responsible for--
          (i) administering, in coordination with the relevant 
        office in the Department, the provision of housing 
        assistance to Indian tribes or Indian housing 
        authorities under each program of the Department that 
        provides for such assistance;
          (ii) administering the community development block 
        grant program for Indian tribes under title I of the 
        Housing and Community Development Act of 1974 and the 
        provision of assistance to Indian tribes under such 
        Act;
          (iii) directing, coordinating, and assisting in 
        managing any regional offices of the Department that 
        administer Indian programs to the extent of such 
        programs; and
          (iv) coordinating all programs of the Department 
        relating to Indian and Alaska Native housing and 
        community development.
  (D) The Secretary shall include in the annual report under 
section 8 a description of the extent of the housing needs for 
Indian families and community development needs of Indian 
tribes in the United States and the activities of the 
Department, and extent of such activities, in meeting such 
needs.
  (2) The Secretary shall, not later than December 1 of each 
year, submit to Congress an annual report which shall include--
          (A) a description of his actions during the current 
        year and a projection of his activities during the 
        succeeding years;
          (B) estimate of the cost of the projected activities 
        for succeeding fiscal years;
          (C) a statistical report on the conditions of Indian 
        and Alaska Native housing; and
          (D) recommendations for such legislative, 
        administrative, and other actions, as he deems 
        appropriate.
  (f) There shall be in the Department a Federal Housing 
Administration Comptroller, designated by the Secretary, who 
shall be responsible for overseeing the financial operations of 
the Federal Housing Administration.
  (g) Office of Housing Counseling.--
          (1) Establishment.-- There is established, in the 
        Department, the Office of Housing Counseling.
          (2) Director.-- There is established the position of 
        Director of Housing Counseling. The Director shall be 
        the head of the Office of Housing Counseling and shall 
        be appointed by, and shall report to, the Secretary. 
        Such position shall be a career-reserved position in 
        the Senior Executive Service.
          (3) Functions.--
                  (A) In general.-- The Director shall have 
                primary responsibility within the Department 
                for all activities and matters relating to 
                homeownership counseling and rental housing 
                counseling, including--
                          (i) research, grant administration, 
                        public outreach, and policy development 
                        relating to such counseling; and
                          (ii) establishment, coordination, and 
                        administration of all regulations, 
                        requirements, standards, and 
                        performance measures under programs and 
                        laws administered by the Department 
                        that relate to housing counseling, 
                        homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity 
                        conversion mortgages and credit 
                        protection options to avoid 
                        foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures 
                        relating to housing counseling.
                  (B) Specific functions.-- The Director shall 
                carry out the functions assigned to the 
                Director and the Office under this section and 
                any other provisions of law. Such functions 
                shall include establishing rules necessary 
                for--
                          (i) the counseling procedures under 
                        section 106(g)(1) of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x(h)(1));
                          (ii) carrying out all other functions 
                        of the Secretary under section 106(g) 
                        of the Housing and Urban Development 
                        Act of 1968, including the 
                        establishment, operation, and 
                        publication of the availability of the 
                        toll-free telephone number under 
                        paragraph (2) of such section;
                          (iii) contributing to the 
                        distribution of home buying information 
                        booklets pursuant to section 5 of the 
                        Real Estate Settlement Procedures Act 
                        of 1974 (12 U.S.C. 2604);
                          (iv) carrying out the certification 
                        program under section 106(e) of the 
                        Housing and Urban Development Act of 
                        1968 (12 U.S.C. 1701x(e));
                          (v) carrying out the assistance 
                        program under section 106(a)(4) of the 
                        Housing and Urban Development Act of 
                        1968, including criteria for selection 
                        of applications to receive assistance;
                          (vi) carrying out any functions 
                        regarding abusive, deceptive, or 
                        unscrupulous lending practices relating 
                        to residential mortgage loans that the 
                        Secretary considers appropriate, which 
                        shall include conducting the study 
                        under section 6 of the Expand and 
                        Preserve Home Ownership Through 
                        Counseling Act;
                          (vii) providing for operation of the 
                        advisory committee established under 
                        paragraph (4) of this subsection;
                          (viii) collaborating with community-
                        based organizations with expertise in 
                        the field of housing counseling; and
                          (ix) providing for the building of 
                        capacity to provide housing counseling 
                        services in areas that lack sufficient 
                        services, including underdeveloped 
                        areas that lack basic water and sewer 
                        systems, electricity services, and 
                        safe, sanitary housing.
          (4) Advisory committee.--
                  (A) In general.-- The Secretary shall appoint 
                an advisory committee to provide advice 
                regarding the carrying out of the functions of 
                the Director.
                  (B) Members.-- Such advisory committee shall 
                consist of not more than 12 individuals, and 
                the membership of the committee shall equally 
                represent the mortgage and real estate 
                industry, including consumers and housing 
                counseling agencies certified by the Secretary.
                  (C) Terms.-- Except as provided in 
                subparagraph (D), each member of the advisory 
                committee shall be appointed for a term of 3 
                years. Members may be reappointed at the 
                discretion of the Secretary.
                  (D) Terms of initial appointees.-- As 
                designated by the Secretary at the time of 
                appointment, of the members first appointed to 
                the advisory committee, 4 shall be appointed 
                for a term of 1 year and 4 shall be appointed 
                for a term of 2 years.
                  (E) Prohibition of pay; travel expenses.-- 
                Members of the advisory committee shall serve 
                without pay, but shall receive travel expenses, 
                including per diem in lieu of subsistence, in 
                accordance with applicable provisions under 
                subchapter I of chapter 57 of title 5, United 
                States Code.
                  (F) Advisory role only.-- The advisory 
                committee shall have no role in reviewing or 
                awarding housing counseling grants.
          (5) Scope of homeownership counseling.-- In carrying 
        out the responsibilities of the Director, the Director 
        shall ensure that homeownership counseling provided by, 
        in connection with, or pursuant to any function, 
        activity, or program of the Department addresses the 
        entire process of homeownership, including the decision 
        to purchase a home, the selection and purchase of a 
        home, issues arising during or affecting the period of 
        ownership of a home (including refinancing, default and 
        foreclosure, and other financial decisions), and the 
        sale or other disposition of a home.
  (h) Special Assistant for Veterans Affairs.--
          (1) Position.-- There shall be in the Office of the 
        Secretary a Special Assistant for Veterans Affairs, who 
        shall report directly to the Secretary.
          (2) Appointment.-- The Special Assistant for Veterans 
        Affairs shall be appointed based solely on merit and 
        shall be covered under the provisions of title 5, 
        United States Code, governing appointments in the 
        competitive service.
          (3) Responsibilities.-- The Special Assistant for 
        Veterans Affairs shall be responsible for--
                  (A) ensuring veterans have fair access to 
                housing and homeless assistance under each 
                program of the Department providing either such 
                assistance;
                  (B) coordinating all programs and activities 
                of the Department relating to veterans;
                  (C) serving as a liaison for the Department 
                with the Department of Veterans Affairs, 
                including establishing and maintaining 
                relationships with the Secretary of Veterans 
                Affairs;
                  (D) serving as a liaison for the Department, 
                and establishing and maintaining relationships 
                with the United States Interagency Council on 
                Homelessness and officials of State, local, 
                regional, and nongovernmental organizations 
                concerned with veterans;
                  (E) providing information and advice 
                regarding--
                          (i) sponsoring housing projects for 
                        veterans assisted under programs 
                        administered by the Department; or
                          (ii) assisting veterans in obtaining 
                        housing or homeless assistance under 
                        programs administered by the 
                        Department;
                  (F) coordinating with the Secretary of 
                Housing and Urban Development and the Secretary 
                of Veterans Affairs in carrying out section 404 
                of the Housing Opportunity Through 
                Modernization Act of 2015; and
                  (G) carrying out such other duties as may be 
                assigned to the Special Assistant by the 
                Secretary or by law.

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  SECTION 11 OF THE HOUSING OPPORTUNITY PROGRAM EXTENSION ACT OF 1996

SEC. 11. ASSISTANCE FOR SELF-HELP HOUSING PROVIDERS.

  (a) Grant Authority.--The Secretary of Housing and Urban 
Development may, 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 national 
and regional organizations and 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 dwellings;
          (2) assistance provided under this section for land 
        acquisition and infrastructure development results in 
        the development of not less than 4,000 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 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 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) National Competition.--The Secretary shall select 
organizations and consortia referred to in subsection (a) to 
receive grants through a national competitive process, which 
the Secretary shall establish.
  (d) Use.--
          (1) Purpose.-- Amounts from grants made under this 
        section, including any recaptured amounts, 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), which 
                may include reimbursing an organization, 
                consortium, or affiliate, upon approval of any 
                required environmental review, for nongrant 
                amounts of the organization, consortium, or 
                affiliate advanced before such review to 
                acquire land.
                  (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 affiliates.-- Any organization or 
        consortia that receives a grant under this section may 
        use amounts in the fund established for such 
        organization or consortia pursuant to paragraph (1) for 
        the purposes under subsection (d) by providing 
        assistance from the fund to local affiliates of such 
        organization or consortia.
  (f) Requirements for Assistance.--The Secretary may make a 
grant to an organization or consortium under subsection (a) 
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) Energy Efficiency Requirements.--The Secretary may not 
require any dwelling developed using amounts from a grant made 
under this section to meet any energy efficiency standards 
other than the standards applicable at such time pursuant to 
section 109 of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12709) to housing specified in 
subsection (a) of such section.
  (h) Geographical Diversity.--In making grants under 
subsection (a), 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;
          (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 the Secretary shall recapture any 
        grant amounts provided to the organization or consortia 
        that are not used within 24 months after such amounts 
        are first disbursed to the organization or consortia, 
        except that such period shall be 36 months in the case 
        of grant amounts from amounts made available for fiscal 
        year 1996 to carry out this section, and in the case of 
        a grant amounts provided to a local affiliate of the 
        organization or consortia that is developing five or 
        more dwellings in connection with such grant 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) Fulfillment of Grant Agreement.--If the Secretary 
determines that an organization or consortia awarded a grant 
under this section has not, within 24 months after grant 
amounts are first made available to the organization or 
consortia (or, in the case of grant amounts from amounts made 
available for fiscal year 1996 to carry out this section and 
grant amounts provided to a local affiliate of the organization 
or consortia that is developing five or more dwellings in 
connection with such grant amounts, within 36 months), 
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.
  (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 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.--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.
  (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) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section such sums as may be 
necessary for fiscal year 2001.
  (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.

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