    [United States Statutes at Large, Volume 117, 108th Congress, 1st Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    117 STAT. 2685

    Public Law 108-186
    108th Congress

    An Act

    To support certain housing proposals in the fiscal year 2003 budget for
    the Federal Government, including the downpayment assistance initiative
    under the HOME Investment Partnership Act, and for other
    purposes. <>

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

    SECTION 1. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

    Sec. 1. Table of contents.

    TITLE I--DOWNPAYMENT ASSISTANCE

    Sec. 101. Short title.
    Sec. 102. Downpayment assistance initiative.

    TITLE II--INTERGENERATIONAL HOUSING ASSISTANCE

    Sec. 201. Short title.
    Sec. 202. Definitions.
    Sec. 203. Demonstration program for elderly housing for
    intergenerational families.
    Sec. 204. Training for HUD personnel regarding grandparent-headed and
    relative-headed families issues.
    Sec. 205. Study of housing needs of grandparent-headed and relative-
    headed families.

    TITLE III--ADJUSTABLE RATE SINGLE FAMILY MORTGAGES AND LOAN LIMIT
    ADJUSTMENTS

    Sec. 301. Hybrid arms.
    Sec. 302. FHA multifamily loan limit adjustments.

    TITLE IV--HOPE VI PROGRAM REAUTHORIZATION

    Sec. 401. Short title.
    Sec. 402. Hope VI program reauthorization.
    Sec. 403. Hope VI grants for assisting affordable housing through main
    street projects.

    TITLE V--COMMUNITY DEVELOPMENT BLOCK GRANTS

    Sec. 501. Funding for insular areas.

    TITLE <> I--DOWNPAYMENT
    ASSISTANCE

    SEC. 101. SHORT TITLE. <>

    This title may be cited as the ``American Dream Downpayment Act''.

    SEC. 102. DOWNPAYMENT ASSISTANCE INITIATIVE.

    Subtitle E of title II of the Cranston-Gonzalez National Affordable
    Housing Act (42 U.S.C. 12821) is amended to read as follows:

    [[Page 2686]]
    117 STAT. 2686

    ``Subtitle E--Other Assistance

    ``SEC. 271. <> DOWNPAYMENT ASSISTANCE INITIATIVE.

    ``(a) Definitions.--In this section:
    ``(1) Downpayment assistance.--The term ``downpayment
    assistance'' means assistance to help a family acquire a
    principal residence.
    ``(2) Home repairs.--The term ``home repairs'' means capital
    improvements or repairs that--
    ``(A) are identified in an appraisal or home
    inspection completed in conjunction with a home
    purchase; or
    ``(B) are completed within 1 year of the purchase of
    a home, and are necessary to bring the housing into
    compliance with health and safety housing codes of the
    unit of general local government in which the housing is
    located, including the remediation of lead paint or
    other home health hazards.
    ``(3) Participating jurisdiction.--The term ``participating
    jurisdiction'' means a State or unit of general local government
    designated under section 216.
    ``(4) State.--The term ``State'' means any State of the
    United States and the District of Columbia.

    ``(b) Grant Authority.--The Secretary may award grants to
    participating jurisdictions to assist low-income families to achieve
    homeownership, in accordance with this section.
    ``(c) Eligible Activities.--
    ``(1) In general.--
    ``(A) Downpayment assistance.--Subject to
    subparagraph (B), grants awarded under this section may
    be used only for downpayment assistance toward the
    purchase of single family housing (including 1 to 4 unit
    family dwelling units, condominium units, cooperative
    units, and manufactured housing units which are located
    on land which is owned by the manufactured housing unit
    owner, owned as a cooperative, or is subject to a
    leasehold interest with a term equal to at least the
    term of the mortgage financing on the unit, and
    manufactured housing lots) by low-income families who
    are first-time home-buyers.
    ``(B) Home repairs.--Not more than 20 percent of the
    grant funds provided under subsection (d) to a
    participating jurisdiction may be used to provide
    assistance to low-income, first-time home-buyers for
    home repairs.
    ``(2) Limitations.--
    ``(A) Amount of assistance.--The amount of
    assistance provided to any low-income families under
    paragraph (1) shall not exceed the greater of--
    ``(i) 6 percent of the purchase price of a
    single family housing unit; or
    ``(ii) $10,000.
    ``(B) Participation.--A participating jurisdiction
    may not use any amount of a grant awarded under this
    section to provide funding to an entity or organization
    that provides downpayment assistance if the activities
    of that entity or organization are financed in whole or
    in part, directly or indirectly, by contributions,
    service fees, or other payments from the sellers of
    housing.

    [[Page 2687]]
    117 STAT. 2687

    ``(d) Formula Allocation.--
    ``(1) In general.--For each fiscal year, the Secretary shall
    allocate any amounts made available for assistance under this
    section to each State that is a participating jurisdiction in an
    amount equal to a percentage of the total allocation that is
    equal to the percentage of the national total of low-income
    households residing in rental housing in the State, as
    determined on the basis of the most recent census data compiled
    by the Bureau of the Census.
    ``(2) Participating jurisdictions other than states.--
    ``(A) In general.--Subject to subparagraph (B), for
    each fiscal year, of the amount allocated to each State
    under paragraph (1), the Secretary shall further
    allocate from such amount to each participating
    jurisdiction located within such State an amount equal
    to the percentage of the allocation made to the State
    under paragraph (1) that is equal to the percentage of
    the State-wide total of low-income households residing
    in rental housing in such participating jurisdiction, as
    determined on the basis of the most recent census data
    compiled by the Bureau of the Census.
    ``(B) Limitation.--
    ``(i) In general.--Direct allocations made
    under subparagraph (A) shall be made to a local
    participating jurisdiction only if--
    ``(I) the participating jurisdiction
    has a total population of 150,000
    individuals or more, as determined on
    the basis of the most recent census data
    compiled by the Bureau of the Census; or
    ``(II) the participating
    jurisdiction would receive an allocation
    of $50,000 or more.
    ``(ii) Reversion.--Any allocation that would
    have otherwise been made to a participating
    jurisdiction that does not meet the requirements
    of clause (i) shall revert back to the State in
    which the participating jurisdiction is located.

    ``(e) Reallocation.--If any amounts allocated to a participating
    jurisdiction under this section become available for reallocation, the
    amounts shall be reallocated to other participating jurisdictions in
    accordance with subsection (d).
    ``(f) Applicability of Other Provisions.--
    ``(1) In general.--Except as otherwise provided in this
    section, grants made under this section shall not be subject to
    the provisions of this title.
    ``(2) Applicable provisions.--In addition to the
    requirements of this section, grants made under this section
    shall be subject to the provisions of title I, sections 215(b),
    218, 219, 221, 223, 224, and 226(a) of subtitle A of this title,
    and subtitle F of this title.
    ``(3) References.--In applying the requirements of subtitle
    A referred to in paragraph (2)--
    ``(A) any references to funds under subtitle A shall
    be considered to refer to amounts made available for
    assistance under this section; and
    ``(B) any references to funds allocated or
    reallocated under section 217 or 217(d) shall be
    considered to refer

    [[Page 2688]]
    117 STAT. 2688

    to amounts allocated or reallocated under subsection (d)
    or (e) of this section, respectively.

    ``(g) Housing Strategy.--To be eligible to receive a grant under
    this section in any fiscal year, a participating jurisdiction shall
    include in its comprehensive housing affordability strategy developed
    under section 105 of the Cranston-Gonzalez National Affordable Housing
    Act (42 U.S.C. 12705) for such fiscal year--
    ``(1) a description of the anticipated use of any grant
    received under this section;
    ``(2) a plan for conducting targeted outreach to residents
    and tenants of public housing, trailer parks, and manufactured
    housing, and to other families assisted by public housing
    agencies, for the purpose of ensuring that grant amounts
    provided under this section to a participating jurisdiction are
    used for downpayment assistance for such residents, tenants, and
    families; and
    ``(3) a description of the actions to be taken to ensure the
    suitability of families receiving downpayment assistance under
    this section to undertake and maintain homeownership.

    ``(h) Report.--Not <> later than June 30, 2006, the
    Comptroller General of the United States shall submit a report
    containing a State-by-State analysis of the impact of grants awarded
    under this section to--
    ``(1) the Committee on Banking, Housing, and Urban Affairs
    of the Senate; and
    ``(2) the Committee on Financial Services of the House of
    Representatives.

    ``(i) Sunset.--The Secretary shall have no authority to make grants
    under this Act after December 31, 2007.
    ``(j) Relocation Assistance and Downpayment Assistance.--The Uniform
    Relocation Assistance and Real Property Acquisition Policies Act of 1970
    (84 Stat. 1894) shall not apply to downpayment assistance under this
    section.
    ``(k) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $200,000,000 for each of fiscal
    years 2004 through 2007.''.

    TITLE <> II--INTERGENERATIONAL HOUSING ASSISTANCE

    SEC. 201. <> SHORT TITLE.

    This title may be cited as the ``Living Equitably: Grandparents
    Aiding Children and Youth Act of 2003'' or the ``LEGACY Act of 2003''.

    SEC. 202. <> DEFINITIONS.

    In this title:
    (1) Child.--The term ``child'' means an individual who--
    (A) is not attending school and is not more than 18
    years of age; or
    (B) is attending school and is not more than 19
    years of age.
    (2) Covered family.--The term ``covered family'' means a
    family that--
    (A) includes a child; and
    (B) has a head of household who is--

    [[Page 2689]]
    117 STAT. 2689

    (i) a grandparent of the child who is raising
    the child; or
    (ii) a relative of the child who is raising
    the child.
    (3) Elderly person.--The term ``elderly person'' has the
    same meaning as in section 202(k) of the Housing Act of 1959 (12
    U.S.C. 1701q(k)).
    (4) Grandparent.--
    (A) In general.--The term ``grandparent'' means,
    with respect to a child, an individual who is a
    grandparent or stepgrandparent of the child by blood or
    marriage, regardless of the age of such individual.
    (B) Case of adoption.--In the case of a child who
    was adopted, the term includes an individual who, by
    blood or marriage, is a grandparent or stepgrandparent
    of the child as adopted.
    (5) Intergenerational dwelling unit.--The term
    ``intergenerational dwelling unit'' means a qualified dwelling
    unit that is reserved for occupancy only by an intergenerational
    family.
    (6) Intergenerational family.--The term ``intergenerational
    family'' means a covered family that has a head of household who
    is an elderly person.
    (7) Private nonprofit organization.--The term ``private
    nonprofit organization'' has the same meaning as in section
    202(k) of the Housing Act of 1959 (12 U.S.C. 1701q(k)).
    (8) Qualified dwelling unit.--The term ``qualified dwelling
    unit'' means a dwelling unit that--
    (A) has not fewer than 2 separate bedrooms;
    (B) is equipped with design features appropriate to
    meet the special physical needs of elderly persons, as
    needed; and
    (C) is equipped with design features appropriate to
    meet the special physical needs of young children, as
    needed.
    (9) Raising a child.--The term ``raising a child'' means,
    with respect to an individual, that the individual--
    (A) resides with the child; and
    (B) is the primary caregiver for the child--
    (i) because the biological or adoptive parents
    of the child do not reside with the child or are
    unable or unwilling to serve as the primary
    caregiver for the child; and
    (ii) regardless of whether the individual has
    a legal relationship to the child (such as
    guardianship or legal custody) or is caring for
    the child informally and has no such legal
    relationship with the child.
    (10) Relative.--
    (A) In general.--The term ``relative'' means, with
    respect to a child, an individual who--
    (i) is not a parent of the child by blood or
    marriage; and
    (ii) is a relative of the child by blood or
    marriage, regardless of the age of the individual.
    (B) Case of adoption.--In the case of a child who
    was adopted, the term ``relative'' includes an
    individual who, by blood or marriage, is a relative of
    the family who adopted the child.

    [[Page 2690]]
    117 STAT. 2690

    (11) Secretary.--The term ``Secretary'' means the Secretary
    of Housing and Urban Development.
    SEC. 203. DEMONSTRATION <> PROGRAM FOR
    ELDERLY HOUSING FOR INTERGENERATIONAL
    FAMILIES.

    (a) Demonstration Program.--The Secretary shall carry out a
    demonstration program (referred to in this section as the
    ``demonstration program'') to provide assistance for intergenerational
    dwelling units for intergenerational families in connection with the
    supportive housing program under section 202 of the Housing Act of 1959
    (12 U.S.C. 1701q).
    (b) Intergenerational Dwelling Units.--The Secretary shall provide
    assistance under this section only to private nonprofit organizations
    selected under subsection (d) for use only for expanding the supply of
    intergenerational dwelling units, which units shall be provided--
    (1) by designating and retrofitting, for use as
    intergenerational dwelling units, existing dwelling units that
    are located within a project assisted under section 202 of the
    Housing Act of 1959 (12 U.S.C. 1701q);
    (2) through development of buildings or projects comprised
    solely of intergenerational dwelling units; or
    (3) through the development of an annex or addition to an
    existing project assisted under section 202 of the Housing Act
    of 1959 (12 U.S.C. 1701q), that contains intergenerational
    dwelling units, including through the development of elder
    cottage housing opportunity units that are small, freestanding,
    barrier free, energy efficient, removable dwelling units located
    adjacent to a larger project or dwelling.

    (c) Program Terms.--Assistance provided pursuant to this section
    shall be subject to the provisions of section 202 of the Housing Act of
    1959 (12 U.S.C. 1701q), except that--
    (1) notwithstanding subsection (d)(1) of that section 202 or
    any provision of that section restricting occupancy to elderly
    persons, any intergenerational dwelling unit assisted under the
    demonstration program may be occupied by an intergenerational
    family;
    (2) subsections (e) and (f) of that section 202 shall not
    apply;
    (3) in addition to the requirements under subsection (g) of
    that section 202, the Secretary shall--
    (A) ensure that occupants of intergenerational
    dwelling units assisted under the demonstration program
    are provided a range of services that are tailored to
    meet the needs of elderly persons, children, and
    intergenerational families; and
    (B) coordinate with the heads of other Federal
    agencies as may be appropriate to ensure the provision
    of such services; and
    (4) the Secretary may waive or alter any other provision of
    that section 202 necessary to provide for assistance under the
    demonstration program.

    (d) Selection.--The <> Secretary shall--
    (1) establish application procedures for private nonprofit
    organizations to apply for assistance under this section; and
    (2) to the extent that amounts are made available pursuant
    to subsection (f), select not less than 2 and not more than

    [[Page 2691]]
    117 STAT. 2691

    4 projects that are assisted under section 202 of the Housing
    Act of 1959 (12 U.S.C. 1701q) for assistance under this section,
    based on the ability of the applicant to develop and operate
    intergenerational dwelling units and national geographical
    diversity among those projects funded.

    (e) Report.--Not <> later than 36 months after the
    date of enactment of this Act, the Secretary shall submit a report to
    Congress that--
    (1) describes the demonstration program; and
    (2) analyzes the effectiveness of the demonstration program.

    (f) Authorization of Appropriations.--There are authorized to be
    appropriated $10,000,000 to carry out this section.
    (g) Sunset.--The demonstration program carried out under this
    section shall terminate 5 years after the date of enactment of this Act.
    SEC. 204. TRAINING <> FOR HUD PERSONNEL
    REGARDING GRANDPARENT-HEADED AND RELATIVE-
    HEADED FAMILIES ISSUES.

    Section 7 of the Department of Housing and Urban Development Act (42
    U.S.C. 3535) is amended by adding at the end the following:
    ``(t) Training Regarding Issues Relating to Grandparent-Headed and
    Relative-Headed Families.--The Secretary shall ensure that all personnel
    employed in field offices of the Department who have responsibilities
    for administering the housing assistance program under section 8 of the
    United States Housing Act of 1937 (42 U.S.C. 1437f) or the supportive
    housing program under section 202 of the Housing Act of 1959 (12 U.S.C.
    1701q), and an appropriate number of personnel in the headquarters
    office of the Department who have responsibilities for those programs,
    have received adequate training regarding how covered families (as that
    term is defined in section 202 of the LEGACY Act of 2003) can be served
    by existing affordable housing programs.''.
    SEC. 205. STUDY <> OF HOUSING NEEDS OF
    GRANDPARENT-HEADED AND RELATIVE-HEADED
    FAMILIES.

    (a) In General.--The Secretary and the Director of the Bureau of the
    Census jointly shall--
    (1) conduct a study to determine an estimate of the number
    of covered families in the United States and their affordable
    housing needs; and
    (2) submit a report to Congress regarding the results of the
    study conducted under paragraph (1).

    (b) Report and Recommendations.--The report required under
    subsection (a) shall--
    (1) <> be submitted to Congress not later
    than 12 months after the date of enactment of this Act; and
    (2) include recommendations by the Secretary and the
    Director of the Bureau of the Census regarding how the major
    assisted housing programs of the Department of Housing and Urban
    Development, including the supportive housing for the elderly
    program under section 202 of the Housing Act of 1959 (12 U.S.C.
    1701q) can be used and, if appropriate, amended or altered, to
    meet the affordable housing needs of covered families.

    [[Page 2692]]
    117 STAT. 2692

    TITLE III--ADJUSTABLE RATE SINGLE FAMILY MORTGAGES AND LOAN LIMIT
    ADJUSTMENTS

    SEC. 301. HYBRID ARMS.

    (a) In General.--Section 251(d)(1)(C) of the National Housing Act
    (12 U.S.C. 1715z-16(d)(1)(C)) is amended by striking ``five'' and
    inserting ``3''.
    (b) <> Applicability.--The amendment
    made by subsection (a) shall apply to mortgages executed on or after the
    date of the enactment of this title.

    SEC. 302. <> FHA MULTIFAMILY LOAN LIMIT ADJUSTMENTS.

    (a) Short Title.--This section may be cited as the ``FHA Multifamily
    Loan Limit Adjustment Act of 2003''.
    (b) Maximum Mortgage Amount Limit for Multifamily Housing in High-
    Cost Areas.--Sections 207(c)(3), 213(b)(2)(B)(i),
    220(d)(3)(B)(iii)(III), 221(d)(3)(ii)(II), 221(d)(4)(ii)(II),
    231(c)(2)(B), and 234(e)(3)(B) of the National Housing Act (12 U.S.C.
    1713(c)(3), 1715e(b)(2)(B)(i), 1715k(d)(3)(B)(iii)(II),
    1715l(d)(3)(ii)(III), 1715l(d)(4)(ii)(II), 1715v(c)(2)(B), and
    1715y(e)(3)(B)) are each amended--
    (1) by striking ``110 percent'' and inserting ``140
    percent''; and
    (2) by inserting ``, or 170 percent in high cost areas,''
    after ``140 percent''.

    (c) Catch-up Adjustments to Certain Maximum Mortgage Amount
    Limits.--
    (1) Section 207 limits.--Section 207(c)(3)(A) of the
    National Housing Act (12 U.S.C. 1713(c)(3)(A)) is amended by
    striking ``$11,250'' and inserting ``$17,460''.
    (2) Section 213 limits.--Section 213(b)(2)(A) of the
    National Housing Act (12 U.S.C. 1715e(b)(2)(A)) is amended--
    (A) by striking ``$38,025'' and inserting
    ``$41,207'';
    (B) by striking ``$42,120'' and inserting
    ``$47,511'';
    (C) by striking ``$50,310'' and inserting
    ``$57,300'';
    (D) by striking ``$62,010'' and inserting
    ``$73,343'';
    (E) by striking ``$70,200'' and inserting
    ``$81,708'';
    (F) by striking ``$49,140'' and inserting
    ``$49,710'';
    (G) by striking ``$60,255'' and inserting
    ``$60,446'';
    (H) by striking ``$75,465'' and inserting
    ``$78,197''; and
    (I) by striking ``$85,328'' and inserting
    ``$85,836''.

    (d) Rehabilitation and Neighborhood Conservation Housing Mortgage
    Insurance.--Section 220(d)(3)(B)(iii) of the National Housing Act (12
    U.S.C. 1715k(d)(3)(B)(iii)) is amended--
    (1) by striking ``with respect to dollar amount limitations
    applicable to rehabilitation projects described in subclause
    (II),'' and inserting ``; (III)''; and
    (2) by redesignating subclauses (III) and (IV) as subclauses
    (IV) and (V), respectively.

    [[Page 2693]]
    117 STAT. 2693

    TITLE <> IV--HOPE VI PROGRAM
    REAUTHORIZATION

    SEC. 401. <> SHORT TITLE.

    This title may be cited as the ``HOPE VI Program Reauthorization and
    Small Community Mainstreet Rejuvenation and Housing Act of 2003''.

    SEC. 402. HOPE VI PROGRAM REAUTHORIZATION.

    (a) Selection Criteria.--Section 24(e)(2) of the United States
    Housing Act of 1937 (42 U.S.C. 1437v(e)(2)) is amended--
    (1) by striking the matter preceding subparagraph (A) and
    inserting the following:
    ``(2) Selection criteria.--The Secretary shall establish
    criteria for the award of grants under this section and shall
    include among the factors--'';
    (2) in subparagraph (B), by striking ``large-scale'';
    (3) in subparagraph (D)--
    (A) by inserting ``and ongoing implementation''
    after ``development''; and
    (B) by inserting ``, except that the Secretary may
    not award a grant under this section unless the
    applicant has involved affected public housing residents
    at the beginning and during the planning process for the
    revitalization program, prior to submission of an
    application'' before the semicolon at the end;
    (4) in subparagraph (H), by striking ``and'' at the end;
    (5) by redesignating subparagraph (I) as subparagraph (L);
    and
    (6) by inserting after subparagraph (H) the following:
    ``(I) the extent to which the plan minimizes
    permanent displacement of current residents of the
    public housing site who wish to remain in or return to
    the revitalized community and provides for community and
    supportive services to residents prior to any
    relocation;
    ``(J) the extent to which the plan sustains or
    creates more project-based housing units available to
    persons eligible for public housing in markets where the
    plan shows there is demand for the maintenance or
    creation of such units;
    ``(K) the extent to which the plan gives to existing
    residents priority for occupancy in dwelling units which
    are public housing dwelling units, or for residents who
    can afford to live in other units, priority for those
    units in the revitalized community; and''.

    (b) Definition of Severely Distressed Public Housing.--Section
    24(j)(2)(A)(iii) of the United States Housing Act of 1937 (42 U.S.C.
    1437v(j)(2)(A)(iii)) is amended--
    (1) in subclause (I), by striking ``or'' at the end;
    (2) in subclause (II), by inserting ``or'' after the
    semicolon at the end; and
    (3) by inserting at the end the following:
    ``(III) is lacking in sufficient appropriate
    transportation, supportive services, economic
    opportunity, schools, civic and religious
    institutions, and public services, resulting in
    severe social distress in the project;''.

    [[Page 2694]]
    117 STAT. 2694

    (c) Study <> of Elderly
    and Disabled Public Housing Needs.--Not later than 18 months after the
    date of enactment of this Act, the Comptroller General of the United
    States shall submit a report to Congress regarding the extent of
    severely distressed elderly and non-elderly disabled public housing, and
    recommendations for improving that housing through the HOPE VI program
    or other means, taking into account the special needs of the residents.

    (d) Authorization of Appropriations.--Paragraph (1) of section 24(m)
    of the United States Housing Act of 1937 (42 U.S.C. 1437v(m)(1)) is
    amended by striking ``, 2001, and 2002'' and inserting ``through 2006''.
    (e) Extension of Program.--Section 24(n) of the United States
    Housing Act of 1937 (42 U.S.C. 1437v(n)) is amended by striking
    ``September 30, 2004'' and inserting ``September 30, 2006''.
    SEC. 403. HOPE VI GRANTS FOR ASSISTING AFFORDABLE HOUSING THROUGH
    MAIN STREET PROJECTS.

    (a)  Purposes.--Section 24(a) of the United States Housing Act of
    1937 (42 U.S.C. 1437v(a)) is amended by adding after and below paragraph
    (4) the following:
    ``It is also the purpose of this section to provide assistance to
    smaller communities for the purpose of facilitating the development of
    affordable housing for low-income families that is undertaken in
    connection with a main street revitalization or redevelopment project in
    such communities.''.
    (b) Grants for Assisting Affordable Housing Developed Through Main
    Street Projects in Smaller Communities.--Section 24 of the United States
    Housing Act of 1937 (42 U.S.C. 1437v) is amended--
    (1) by redesignating subsection (n) as subsection (o); and
    (2) by inserting after subsection (m) the following new
    subsection:

    ``(n) Grants for Assisting Affordable Housing Developed Through Main
    Street Projects in Smaller Communities.--
    ``(1) Authority and use of grant amounts.--The Secretary may
    make grants under this subsection to smaller communities. Such
    grant amounts shall be used by smaller communities only to
    provide assistance to carry out eligible affordable housing
    activities under paragraph (4) in connection with an eligible
    project under paragraph (2).
    ``(2) Eligible project.--For purposes of this subsection,
    the term `eligible project' means a project that--
    ``(A) the Secretary determines, under the criteria
    established pursuant to paragraph (3), is a main street
    project;
    ``(B) is carried out within the jurisdiction of a
    smaller community receiving the grant; and
    ``(C) involves the development of affordable housing
    that is located in the commercial area that is the
    subject of the project.
    ``(3) Main street projects.--The Secretary shall establish
    requirements for a project to be considered a main street
    project for purposes of this section, which shall require that
    the project--
    ``(A) has as its purpose the revitalization or
    redevelopment of a historic or traditional commercial
    area;

    [[Page 2695]]
    117 STAT. 2695

    ``(B) involves investment, or other participation,
    by the government for, and private entities in, the
    community in which the project is carried out; and
    ``(C) complies with such historic preservation
    guidelines or principles as the Secretary shall identify
    to preserve significant historic or traditional
    architectural and design features in the structures or
    area involved in the project.
    ``(4) Eligible affordable housing activities.--For purposes
    of this subsection, the activities described in subsection
    (d)(1) shall be considered eligible affordable housing
    activities, except that--
    ``(A) such activities shall be conducted with
    respect to affordable housing rather than with respect
    to severely distressed public housing projects; and
    ``(B) eligible affordable housing activities under
    this subsection shall not include the activities
    described in subparagraphs (B) through (E), (J), or (K)
    of subsection (d)(1).
    ``(5) Maximum grant amount.--A grant under this subsection
    for a fiscal year for a single smaller community may not exceed
    $1,000,000.
    ``(6) Contribution requirement.--A smaller community
    applying for a grant under this subsection shall be considered
    an applicant for purposes of subsection (c) (relating to
    contributions by applicants), except that--
    ``(A) such supplemental amounts shall be used only
    for carrying out eligible affordable housing activities;
    and
    ``(B) paragraphs (1)(B) and (3) shall not apply to
    grants under this subsection.
    ``(7) Applications and selection.--
    ``(A) Application.--Pursuant to subsection (e)(1),
    the Secretary shall provide for smaller communities to
    apply for grants under this subsection, except that the
    Secretary may establish such separate or additional
    criteria for applications for such grants as may be
    appropriate to carry out this subsection.
    ``(B) Selection criteria.--The Secretary shall
    establish selection criteria for the award of grants
    under this subsection, which shall be based on the
    selection criteria established pursuant to subsection
    (e)(2), with such changes as may be appropriate to carry
    out the purposes of this subsection.
    ``(8) Cost limits.--The cost limits established pursuant to
    subsection (f) shall apply to eligible affordable housing
    activities assisted with grant amounts under this subsection.
    ``(9) Inapplicability of other provisions.--The provisions
    of subsections (g) (relating to disposition and replacement of
    severely distressed public housing), and (h) (relating to
    administration of grants by other entities), shall not apply to
    grants under this subsection.
    ``(10) Reporting.--The Secretary shall require each smaller
    community receiving a grant under this subsection to submit a
    report regarding the use of all amounts provided under the
    grant.
    ``(11) Definitions.--For purposes of this subsection, the
    following definitions shall apply:

    [[Page 2696]]
    117 STAT. 2696

    ``(A) Affordable housing.--The term `affordable
    housing' means rental or homeownership dwelling units
    that--
    ``(i) are made available for initial occupancy
    to low-income families, with a subset of units
    made available to very- and extremely-low income
    families; and
    ``(ii) are subject to the same rules regarding
    occupant contribution toward rent or purchase and
    terms of rental or purchase as dwelling units in
    public housing projects assisted with a grant
    under this section.
    ``(B) Smaller community.--The term `smaller
    community' means a unit of general local government (as
    such term is defined in section 102 of the Housing and
    Community Development Act of 1974 (42 U.S.C. 5302))
    that--
    ``(i) has a population of 50,000 or fewer; and
    ``(ii)(I) is not served by a public housing
    agency; or
    ``(II) is served by a single public housing
    agency, which agency administers 100 or fewer
    public housing dwelling units.''.

    (c) Annual Report.--Section 24(l) of the United States Housing Act
    of 1937 (42 U.S.C. 1437v(l)) is amended--
    (1) in paragraph (3), by striking ``; and'' and inserting
    ``, including a specification of the amount and type of
    assistance provided under subsection (n);'';
    (2) by redesignating paragraph (4) as paragraph (5); and
    (3) by inserting after paragraph (3) the following:
    ``(4) the types of projects funded, and number of affordable
    housing dwelling units developed with, grants under subsection
    (n); and''.

    (d) Funding.--Section 24(m) of the United States Housing Act of 1937
    (42 U.S.C. 1437v(m)) is amended by adding at the end the following:
    ``(3) Set-aside for main street housing grants.--Of the
    amount appropriated pursuant to paragraph (1) for any fiscal
    year, the Secretary shall provide up to 5 percent for use only
    for grants under subsection (n).''.

    TITLE V--COMMUNITY DEVELOPMENT BLOCK GRANTS

    SEC. 501. FUNDING FOR INSULAR AREAS.

    (a) Definition of Insular Areas.--Section 102(a) of the Housing and
    Community Development Act of 1974 (42 U.S.C. 5302(a)) is amended by
    adding at the end the following:
    ``(24) The term `insular area' means each of Guam, the
    Northern Mariana Islands, the Virgin Islands, and American
    Samoa.''.

    (b) Definition of Unit of General Government.--The first sentence of
    section 102(a)(1) of the Housing and Community Development Act of 1974
    (42 U.S.C. 5302(a)(1)) is amended--
    (1) by inserting ``and'' after ``Secretary;''; and
    (2) by striking ``; and the Trust Territory of the Pacific
    Islands''.

    [[Page 2697]]
    117 STAT. 2697

    (c) Statement of Activities and Review.--Section 104 of the Housing
    and Community Development Act of 1974 (42 U.S.C. 5304) is amended--
    (1) in subsection (a)(1)--
    (A) in the first sentence--
    (i) by striking ``or'' after ``State,''; and
    (ii) by inserting ``or under section 106(a)(3)
    by any insular area,'' after ``government,''; and
    (B) in the second sentence--
    (i) by striking ``and in the case of'' and
    inserting a comma; and
    (ii) by inserting ``and insular areas
    receiving grants pursuant to section 106(a)(3),''
    after ``106(d)(2)(B),'';
    (2) in subsection (e)(1), by striking ``section 106(b) or
    section 106(d)(2)(B)'' and inserting ``subsection (a)(3), (b),
    or (d)(2)(B) of section 106''; and
    (3) in subsection (m)--
    (A) in paragraph (1), by inserting ``(a)(2),'' after
    ``under subsection''; and
    (B) in paragraph (2), by striking ``government--''
    and inserting ``government other than an insular area--
    ''.

    (d) Allocation and Distribution of Funds.--Section 106(a) of the
    Housing and Community Development Act of 1974 (42 U.S.C. 5306(a)) is
    amended--
    (1) in the first sentence of paragraph (1)--
    (A) by striking ``an appropriation Act'' and
    inserting ``appropriation Acts''; and
    (B) by striking ``in any year'' and inserting ``for
    such fiscal year'';
    (2) in paragraph (2), by inserting ``under paragraph (1) and
    after reserving such amounts for insular areas under paragraph
    (2)'' after ``tribes'';
    (3) in paragraph (3), by striking ``paragraphs (1) and (2)''
    and inserting ``paragraphs (1), (2), and (3)'';
    (4) by redesignating paragraphs (2) and (3) (as so amended)
    as paragraphs (3) and (4); and
    (5) by inserting after paragraph (1) the following:

    ``(2) For each fiscal year, of the amount approved in appropriation
    Acts under section 103 for grants for such fiscal year (excluding the
    amounts provided for use in accordance with section 107), the Secretary
    shall reserve for grants to insular areas $7,000,000. The Secretary
    shall provide for distribution of amounts under this paragraph to
    insular areas on the basis of the ratio of the population of each
    insular area to the population of all insular areas. In determining the
    distribution of amounts to insular areas, the Secretary may also include
    other statistical criteria as data become available from the Bureau of
    the Census, but only if such criteria are contained in a regulation
    promulgated by the Secretary after notice and public comment.''.
    (e) Conforming Amendment.--The first sentence of section 106(d)(1)
    of the Housing and Community Development Act of 1974 (42 U.S.C.
    5306(d)(1)) is amended by striking ``paragraphs (1) and (2)'' and
    inserting ``paragraphs (1), (2), and (3)''.
    (f) Special Purpose Grants.--Section 107 of the Housing and
    Community Development Act of 1974 (42 U.S.C. 5307) is amended--
    (1) in subsection (a)(1)--
    (A) by striking subparagraph (A); and

    [[Page 2698]]
    117 STAT. 2698

    (B) by redesignating subparagraphs (B) through (H)
    as subparagraphs (A) through (G), respectively; and
    (2) in subsection (b)--
    (A) by striking paragraph (1); and
    (B) by redesignating paragraphs (2) through (7) as
    paragraphs (1) through (6), respectively.

    (g) Regulations.--The <> Secretary of Housing and Urban Development shall issue
    regulations to carry out the amendments made by this section, which
    shall take effect not later than the expiration of the 90-day period
    beginning on the date of the enactment of this Act.

    Approved December 16, 2003.

    LEGISLATIVE HISTORY--S. 811 (H.R. 1276) (H.R. 1614):
    ---------------------------------------------------------------------------

    HOUSE REPORTS: Nos. 108-164 accompanying H.R. 1276 and 108-165
    accompanying H.R. 1614 (both from Comm. on Financial Services).
    CONGRESSIONAL RECORD, Vol. 149 (2003):
    Nov. 24, considered and passed Senate.
    Dec. 8, considered and passed House.
    WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 39 (2003):
    Dec. 16, Presidential remarks.