42 U.S.C. § 1437f — Low-income housing assistance

Page 4580 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f of 6-month period beginning Oct. 28, 1992, except as oth- erwise provided, see section 13642 of this title. INAPPLICABILITY OF CERTAIN 1992 AMENDMENTS TO INDIAN PUBLIC HOUSING Amendment by Pub. L. 102–550 not applicable with re- spect to lower income housing developed or operated pursuant to contract between Secretary of Housing and Urban Development and Indian housing authority, see section 626 of Pub. L. 102–550, set out as a note under section 1437a of this title. § 1437f. Low-income housing assistance (a) Authorization for assistance payments For the purpose of aiding low-income families in obtaining a decent place to live and of pro- moting 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 dwell- ing 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 imple- ment the provisions of this section, the Sec- retary 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 subchapter II–A of this chapter. Each contract entered into under this subsection shall be for a term of not more than 60 months. (c) Contents and purposes of contracts for assist- ance payments; amount and scope of month- ly assistance payments (1)(A) An assistance contract entered into pur- suant to this section shall establish the max- imum monthly rent (including utilities and all maintenance and management charges) which the owner is entitled to receive for each dwell- ing unit with respect to which such assistance payments are to be made. The maximum month- ly rent shall not exceed by more than 10 per cen- tum the fair market rental established by the Secretary periodically but not less than annu- ally 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 max- imum 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 max- imum rent or that such higher rent is necessary to the implementation of a housing strategy as defined in section 12705 of this title, or (B) by such higher amount as may be requested by a tenant and approved by the public housing agen- cy in accordance with paragraph (3)(B). In the case of newly constructed and substantially re- habilitated 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 ob- ligated with respect to any fiscal year beginning on or after October 1, 1980. 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 re- cent 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 sec- tion. Notwithstanding any other provision of this section, after October 12, 1977, the Secretary shall prohibit high-rise elevator projects for families with children unless there is no prac- tical alternative. 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 Sec- retary on the site of the Department on the World Wide Web and in any other manner speci- fied by the Secretary. Notice that such fair mar- ket rentals are being published shall be pub- lished 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 rent- als in a jurisdiction before such rentals become effective. The Secretary shall cause to be pub- lished for comment in the Federal Register no- tices of proposed material changes in the meth- odology 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 mar- ket rentals established in the housing area for similar types and sizes of dwelling units or, if the Secretary determines, on the basis of a rea- sonable formula. However, where the maximum monthly rent, for a unit in a new construction, substantial rehabilitation, or moderate rehabili- tation project, to be adjusted using an annual adjustment factor exceeds the fair market rent- al 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 Page 4581 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f the same family at the time of the last annual rental adjustment, where the assistance con- tract provides for the adjustment of the max- imum monthly rent by applying an annual ad- justment 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 sub- tracted 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 certifi- cate 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 ef- fective 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 there- after. In establishing annual adjustment factors for units in new construction and substantial re- habilitation 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 con- tract to the extent he determines such adjust- ments 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 adjust- ment in the maximum monthly rent authorized by subparagraph (A). The Secretary shall make additional adjustments in the maximum month- ly rent for units under contract (subject to the availability of appropriations for contract amendments) to the extent the Secretary deter- mines 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 lo- cated in a community where drug-related crimi- nal activity is generally prevalent and the project’s operating, maintenance, and capital re- pair 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 max- imum 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 ad- dressing the problem of drug-related criminal activity. Any rent comparability standard re- quired 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 haz- ards, as defined in section 4851b of this title. (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 imple- menting the limitation established under the preceding sentence, the Secretary shall estab- lish regulations for conducting comparability studies for projects where the Secretary has rea- son to believe that the application of the for- mula adjustments under subparagraph (A) would result in such material differences. The Sec- retary shall conduct such studies upon the re- quest of any owner of any project, or as the Sec- retary determines to be appropriate by estab- lishing, to the extent practicable, a modified an- nual adjustment factor for such market area, as the Secretary shall designate, that is geographi- cally smaller than the applicable housing area used for the establishment of the annual adjust- ment factor under subparagraph (A). The Sec- retary shall establish such modified annual ad- justment 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 deter- mines that such modified annual adjustment factor cannot be established or that such factor when applied to a particular project would re- sult 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 alter- native methodology for conducting com- parability 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 be- fore the anniversary date of the assistance con- tract under this section, the automatic annual adjustment factor shall be applied. The Sec- retary may not reduce the contract rents in ef- fect on or after April 15, 1987, for newly con- structed, substantially rehabilitated, or mod- erately 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 November 7, 1988, shall be re- stored 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 origi- nal 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 re- duced maximum monthly rents were in effect. Page 4582 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (3) The amount of the monthly assistance pay- ment 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 1437a(a) of this title. (4) The assistance contract shall provide that assistance payments may be made only with re- spect to a dwelling unit under lease for occu- pancy by a family determined to be a lower in- come 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 be- fore the expiration date of the lease for occu- pancy 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 proj- ect, 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 ex- ceed one year, if a good faith effort is being made to fill the unit and the unit provides de- cent, safe, and sanitary housing. No such pay- ment 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 an- nual 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 con- tracts, to assure that assistance payments are increased on a timely basis to cover increases in maximum monthly rents or decreases in family incomes. (6) Redesignated (5). (7) Repealed. Pub. L. 105–276, title V, § 550(a)(3)(C), Oct. 21, 1998, 112 Stat. 2609 (8)(A) Not less than one year before termi- nation 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 writ- ten notice to the Secretary and the tenants in- volved of the proposed termination. The notice shall also include a statement that, if the Con- gress makes funds available, the owner and the Secretary may agree to a renewal of the con- tract, 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 re- quire. (C) Any notice under this paragraph shall also comply with any additional requirements estab- lished by the Secretary. (D) For purposes of this paragraph, the term ‘‘termination’’ means the expiration of the as- sistance contract or an owner’s refusal to renew the assistance contract, and such term shall in- clude termination of the contract for business reasons. (d) Required provisions and duration of con- tracts for assistance payments; waiver of lim- itation (1) Contracts to make assistance payments en- tered 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, con- sistent with the public housing agency plan submitted under section 1437c–1 of this title 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 se- rious or repeated violation of the terms and conditions of the lease, for violation of appli- cable Federal, State, or local law, or for other good cause; (iii) during the term of the lease, any crimi- nal 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 peace- ful enjoyment of their residences by persons residing in the immediate vicinity of the premises, or any drug-related criminal activ- ity on or near such premises, engaged in by a tenant of any unit, any member of the ten- ant’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 pre- ceded by the owner’s provision of written no- tice 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 cus- tody or confinement after conviction, under the laws of the place from which the indi- Page 4583 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 1 So in original. Probably should be section ‘‘671’’. vidual flees, for a crime, or attempt to com- mit 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 dis- ruption 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 con- structed or substantially rehabilitated pursuant to assistance provided under subsection (b)(2) of this section (as such subsection existed imme- diately before October 1, 1983), the Secretary may consider and annually adjust, with respect to such project, for the cost of employing or oth- erwise retaining the services of one or more service coordinators under section 661 1 of the Housing and Community Development Act of 1992 [42 U.S.C. 13631] to coordinate the provision of any services within the project for residents of the project who are elderly or disabled fami- lies. (ii) The budget authority available under sec- tion 1437c(c) of this title 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 an- nual contributions contracts for assistance under this section which shall be made available through assistance contracts only for the pur- pose of providing service coordinators under clause (i) for projects receiving project-based as- sistance under this paragraph and to provide ad- ditional amounts under contracts for assistance for projects constructed or substantially reha- bilitated pursuant to assistance provided under subsection (b)(2) of this section (as such sub- 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 com- pliance with subtitle C of title VI of the Housing and Community Development Act of 1992 [42 U.S.C. 13601 et seq.] and any regulations issued under such subtitle. (D) An owner of a covered section 8 [42 U.S.C. 1437f] housing project (as such term is defined in section 659 of the Housing and Community De- velopment Act of 1992 [42 U.S.C. 13619]) may give preference for occupancy of dwelling units in the project, and reserve units for occupancy, in ac- cordance with subtitle D of title VI of the Hous- ing and Community Development Act of 1992 [42 U.S.C. 13611 et seq.]. (3) Notwithstanding any other provision of law, with the approval of the Secretary the pub- lic housing agency administering a contract under this section with respect to existing hous- ing 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 as- sistance under this section, give priority to dis- abled families that are not elderly families. (5) CALCULATION OF LIMIT.—Any contract en- tered 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 sub- section. (6) TREATMENT OF COMMON AREAS.—The Sec- retary 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 Sec- retary determines appropriate, for law enforce- ment officers of such agencies to enter common areas of the project at any time and without ad- vance notice upon a determination of probable cause by such officers that criminal activity is taking place in such areas. (e) Restrictions on contracts for assistance pay- ments (1) Nothing in this chapter 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 re- habilitated pursuant to authority granted in this section, and the terms of the financing or any refinancing have been approved by the Sec- retary. (2) Repealed. Pub. L. 101–625, title II, § 289(b), Nov. 28, 1990, 104 Stat. 4128 (f) Definitions As used in this section— (1) the term ‘‘owner’’ means any private per- son 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 be- tween such members and the cooperative; (3) the term ‘‘debt service’’ means the re- quired payments for principal and interest made with respect to a mortgage secured by housing assisted under this chapter; Page 4584 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (4) the term ‘‘participating jurisdiction’’ means a State or unit of general local govern- ment designated by the Secretary to be a par- ticipating jurisdiction under title II of the Cranston-Gonzalez National Affordable Hous- ing Act [42 U.S.C. 12721 et seq.]; (5) the term ‘‘drug-related criminal activ- ity’’ means the illegal manufacture, sale, dis- tribution, use, or possession with intent to manufacture, sell, distribute, or use, of a con- trolled substance (as defined in section 802 of title 21); (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 suit- able housing and to move to other suitable housing. (g) Regulations applicable for implementation of assistance payments Notwithstanding any other provision of this chapter, 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 1701q of title 12. (h) Nonapplicability of inconsistent provisions to contracts for assistance payments Sections 1437c(e) and 1437d of this title (except as provided in section 1437d(j)(3) of this title), and any other provisions of this chapter which are inconsistent with the provisions of this sec- tion shall not apply to contracts for assistance entered into under this section. (i) Receipt of assistance by public housing agen- cy under other law not to be considered The Secretary may not consider the receipt by a public housing agency of assistance under sec- tion 811(b)(1) of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 8013(b)(1)], or the amount received, in approving assistance for the agency under this section or determining the amount of such assistance to be provided. (j) Carbon monoxide alarms Each owner of a dwelling unit receiving project-based assistance under this section shall ensure that carbon monoxide alarms or detec- tors are installed in the dwelling unit in a man- ner that meets or exceeds— (1) the standards described in chapters 9 and 11 of the 2018 publication of the International Fire Code, as published by the International Code Council; or (2) any other standards as may be adopted by the Secretary, including any relevant updates to the International Fire Code, through a no- tice published in the Federal Register. (k) Verification of income 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 com- plete and accurate. In establishing such proce- dures, 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 pro- vide such information themselves. Such infor- mation 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 Secu- rity Act [42 U.S.C. 301 et seq.], the Food and Nu- trition Act of 2008 [7 U.S.C. 2011 et seq.], or title 38. 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 fam- ilies for benefits (and the amount of such bene- fits, if any) under this section. (l) Qualifying smoke alarms (1) In general Each owner of a dwelling unit receiving project-based assistance under this section shall ensure that qualifying smoke alarms are installed in accordance with applicable codes and standards published by the International Code Council or the National Fire Protection Association and the requirements of the Na- tional Fire Protection Association Standard 72, or any successor standard, in each level and in or near each sleeping area in such dwelling unit, including in basements but excepting crawl spaces and unfinished attics, and in each common area in a project containing such a dwelling unit. (2) Definitions For purposes of this subsection, the fol- lowing definitions shall apply: (A) Smoke alarm defined The term ‘‘smoke alarm’’ has the meaning given the term ‘‘smoke detector’’ in section 2225(d) of title 15. (B) Qualifying smoke alarm defined The term ‘‘qualifying smoke alarm’’ means a smoke alarm that— (i) in the case of a dwelling unit built be- fore December 29, 2022, and not substan- tially rehabilitated after December 29, 2022— (I)(aa) is hardwired; or (bb) uses 10-year non rechargeable, nonreplaceable primary batteries and— (AA) is sealed; (BB) is tamper resistant; and (CC) contains silencing means; and (II) provides notification for persons with hearing loss as required by the Na- tional Fire Protection Association Standard 72, or any successor standard; or (ii) in the case of a dwelling unit built or substantially rehabilitated after December 29, 2022, is hardwired. Page 4585 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (m) Repealed. Pub. L. 98–181, title I [title II, § 209(a)(5)], Nov. 30, 1983, 97 Stat. 1183 (n) Repealed. Pub. L. 105–276, title V, § 550(a)(7), Oct. 21, 1998, 112 Stat. 2609 (o) Voucher program (1) Authority (A) In general The Secretary may provide assistance to public housing agencies for tenant-based as- sistance using a payment standard estab- lished in accordance with subparagraph (B). The payment standard shall be used to de- termine the monthly assistance that may be paid for any family, as provided in para- graph (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 ex- ceed 110 percent of the fair market rental es- tablished 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 pub- lic housing agency shall be required as a re- sult 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 mar- ket rental was reduced. The Secretary shall allow public housing agencies to request ex- ception payment standards within fair mar- ket rental areas subject to criteria and pro- cedures 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 sub- section as an adjustment pool. The Sec- retary shall use amounts in the adjustment pool to make adjusted payments to public housing agencies under subparagraph (A), to ensure continued affordability, if the Sec- retary determines that additional assistance for such purpose is necessary, based on docu- mentation submitted by a public housing agency. (D) Approval The Secretary may require a public hous- ing agency to submit the payment standard of the public housing agency to the Sec- retary for approval, if the payment standard is less than 90 percent of the fair market rental or exceeds 110 percent of the fair mar- ket 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 accom- modation 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 per- son 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 oc- cupying 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 1437a(a)(3) of this title (relating to minimum rental amount), the monthly assistance pay- ment for a family receiving assistance under this subsection shall be determined as follows: (A) Tenant-based assistance; rent not exceed- ing payment standard For a family receiving tenant-based assist- ance, 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 al- lowed for tenant-paid utilities) exceeds the greatest of the following amounts, rounded to the nearest dollar: (i) 30 percent of the monthly adjusted in- come 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 assist- ance, if the rent for the family (including the amount allowed for tenant-paid utilities) exceeds the applicable payment standard es- tablished 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 assist- ance For a family receiving project-based as- sistance, the rent that the family is required to pay shall be determined in accordance with section 1437a(a)(1) of this title, and the Page 4586 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 2 So in original. No opening parenthesis was enacted. amount of the housing assistance payment shall be determined in accordance with sub- section (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 ten- ant-paid utilities shall not exceed the ap- propriate utility allowance for the family unit size as determined by the public hous- ing agency regardless of the size of the dwelling unit leased by the family. (ii) Exception for families in including per- sons with disabilities Notwithstanding subparagraph (A), upon request by a family that includes a person with disabilities, the public housing agen- cy shall approve a utility allowance that is higher than the applicable amount on the utility allowance schedule if a higher util- ity allowance is needed as a reasonable ac- commodation to make the program acces- sible to and usable by the family member with a disability. (3) 40 percent limit At the time a family initially receives ten- ant-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 ad- justed 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 subchapter; (C) a low-income family that meets eligi- bility criteria specified by the public hous- ing agency; (D) a family that qualifies to receive a voucher in connection with a homeowner- ship 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 [12 U.S.C. 4113, 4116]. (5) Reviews of family income (A) In general Reviews of family incomes for purposes of this section shall be subject to paragraphs (1), (6), and (7) of section 1437a(a) of this title and to section 3544 of this title. (B) Procedures Each public housing agency administering assistance under this subsection shall estab- lish procedures that are appropriate and nec- essary to ensure that income data provided to the agency and owners by families apply- ing for or receiving assistance from the agency is complete and accurate. (6) Selection of families and disapproval of owners (A) Preferences (i) Authority to establish Each public housing agency may estab- lish a system for making tenant-based as- sistance 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 fami- lies residing in public housing who are vic- tims of a crime of violence (as such term is defined in section 16 of title 18) that has been reported to an appropriate law en- forcement agency. (ii) Content Each system of preferences established pursuant to this subparagraph shall be based upon local housing needs and prior- ities, as determined by the public housing agency using generally accepted data sources, including any information ob- tained pursuant to an opportunity for pub- lic comment as provided under section 1437c–1(f) of this title and under the re- quirements applicable to the comprehen- sive 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) 2 shall pro- vide that the screening and selection of fam- ilies 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 re- quirements as the Secretary may establish. That an applicant or participant is or has been a victim of domestic violence, dating violence, or stalking is not an appropriate basis for denial of program assistance or for denial of admission if the applicant other- wise qualifies for assistance or admission. (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 ten- ancy 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 prem- ises 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 resi- dences by, persons residing in the imme- diate vicinity of the premises; or (iii) is drug-related or violent criminal activity. Page 4587 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 3 So in original. (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 pub- lic 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 lo- cality 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 viola- tion 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 suc- cessor 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 res- idence; and (ii) has provided the tenant a notice to vacate at least 90 days before the effective date of such notice.; 3 (D) shall provide that during the term of the lease, any criminal activity that threat- ens 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 enjoy- ment 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 ten- ant’s household, or any guest or other per- son 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 pre- ceded 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 fore- closure on any federally-related mortgage loan (as that term is defined in section 2602 of title 12) or on any residential real prop- erty in which a recipient of assistance under this subsection resides, the immediate suc- cessor 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 occu- pied unit, except that this provision and the provisions related to foreclosure in subpara- graph (C) shall not shall not 3 affect any State or local law that provides longer time periods or other additional protections for tenants. (8) Inspection of units by PHAs (A) Initial inspection (i) In general For each dwelling unit for which a hous- ing assistance payment contract is estab- lished under this subsection, the public housing agency (or other entity pursuant to paragraph (11)) shall inspect the unit be- fore any assistance payment is made to de- termine whether the dwelling unit meets the housing quality standards under sub- paragraph (B), except as provided in clause (ii) or (iii) of this subparagraph. (ii) Correction of non-life-threatening con- ditions 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 Sec- retary. 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 as- sistance payments for the unit if any defi- ciency resulting in noncompliance with the housing quality standards has not been corrected by such time. The public housing agency shall recommence assistance pay- ments when such deficiency has been cor- rected, and may use any payments with- held 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 re- quirements of an inspection that qualifies as an alternative inspection method pursu- ant to subparagraph (E), a public housing agency may authorize occupancy before the inspection under clause (i) has been completed, and may make assistance pay- ments retroactive to the beginning of the Page 4588 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 4 So in original. Probably should be followed by a period. lease term after the unit has been deter- mined 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 hab- itable 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 ac- cess to affordable housing and to expand housing opportunities for families as- sisted 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 4 (C) Inspection The determination required under sub- paragraph (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 as- sistance payment is made for the unit. In- spections of dwelling units under this sub- paragraph shall be made before the expira- tion 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 assist- ance under this subsection on behalf of more than 1250 families, before the expiration of a reasonable period beginning upon such re- quest. 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 in- spections not less often than biennially during the term of the housing assistance payments contract for the unit to deter- mine whether the unit is maintained in ac- cordance with the requirements under sub- paragraph (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 en- tity) shall retain the records of the inspec- tion for a reasonable time, as determined by the Secretary, and shall make the records available upon request to the Sec- retary, the Inspector General for the De- partment of Housing and Urban Develop- ment, and any auditor conducting an audit under section 1437c(h) of this title. (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 pur- poses of this subparagraph if— (i) the inspection was conducted pursu- ant to requirements under a Federal, State, or local housing program (including the Home investment partnership program under title II of the Cranston-Gonzalez Na- tional Affordable Housing Act [42 U.S.C. 12721 et seq.] and the low-income housing tax credit program under section 42 of title 26); and (ii) pursuant to such inspection, the property was determined to meet the standards or requirements regarding hous- ing quality or safety applicable to prop- erties assisted under such program, and, if a non-Federal standard or requirement was used, the public housing agency has cer- tified to the Secretary that such standard or requirement provides the same (or greater) protection to occupants of dwell- ing units meeting such standard or re- quirement 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 assist- ance is provided does not comply with the housing quality standards under subpara- graph (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, un- less waived by the Secretary in extraor- dinary circumstances; and (ii) in the case of any condition that is not life-threatening, within a reasonable time frame, as determined by the Sec- retary. (G) Enforcement of housing quality stand- ards (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— Page 4589 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (I) the public housing agency or an in- spector authorized by the State or unit of local government determines upon in- spection 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 cor- rected— (aa) in the case of any such failure that is a result of life-threatening con- ditions, within 24 hours after such no- tice 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 dur- ing 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 pur- suant 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 relat- ing 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 noncompli- ance with housing quality standards under subparagraph (B). Upon completion of re- pairs by the public housing agency or the owner sufficient so that the dwelling unit complies with such housing quality stand- ards, the agency shall recommence pay- ments under the housing assistance pay- ments contract to the owner of the dwell- ing unit. (iv) Notification If a public housing agency providing as- sistance under this subsection abates rent- al 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 an- other dwelling unit and transfer the rental assistance to that unit. (v) Protection of tenants An owner of a dwelling unit may not ter- minate the tenancy of any tenant because of the withholding or abatement of assist- ance pursuant to this subparagraph. Dur- ing 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 pay- ments 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 non- compliance 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 re- siding in such a dwelling unit a period of 90 days or such longer period as the pub- lic housing agency determines is reason- ably necessary to lease a new unit, be- ginning upon termination of the con- tract, to lease a new residence with ten- ant-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 op- tion 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 be- comes available for occupancy after the expiration of such period. (III) Assistance in finding unit The public housing agency may pro- vide assistance to the family in finding a new residence, including use of up to two months of any assistance amounts with- held or abated pursuant to clause (ii) or (iii), respectively, for costs directly asso- ciated with relocation of the family to a new residence, which shall include secu- rity deposits as necessary and may in- clude reimbursements for reasonable moving expenses incurred by the house- hold, as established by the Secretary. The agency may require that a family receiving assistance for a security de- posit shall remit, to the extent of such assistance, the amount of any security Page 4590 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 5 So in original. Probably should be ‘‘Cranston-Gonzalez’’. 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 assist- ance payments contract is entered into or renewed after the date of the effectiveness of the regulations implementing this sub- paragraph. (H) Inspection guidelines The Secretary shall establish procedural guidelines and performance standards to fa- cilitate inspections of dwelling units and conform such inspections with practices uti- lized in the private housing market. Such guidelines and standards shall take into con- sideration variations in local laws and prac- tices 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 con- tract 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 es- tablished under this subsection shall be rea- sonable 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 hous- ing agency (or other such entity) determines that the rent (or rent increase) for a dwell- ing unit is not reasonable, the public hous- ing 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 as- sistance 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 hous- ing agency in accordance with generally ac- cepted practices in the local housing mar- ket. (E) Penalties Unless otherwise authorized by the Sec- retary, each public housing agency shall pay any penalties from administrative fees col- lected 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 title 26 or for which assistance is provided under sub- title A of title II of the Cranston Gonzalez 5 National Affordable Housing Act of 1990 [42 U.S.C. 12741 et seq.], for which a housing as- sistance contract not subject to paragraph (13) of this subsection is established, rent reasonableness shall be determined as other- wise 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 fami- lies assisted with tenant-based assistance under this subsection; and (ii) the rent shall not be considered rea- sonable for purposes of this paragraph if it exceeds the greater of— (I) the rents charged for other com- parable units receiving such tax credits or assistance in the project that are not occupied by families assisted with ten- ant-based assistance under this sub- section; and Page 4591 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (II) the payment standard established by the public housing agency for a unit of the size involved. (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 Sec- retary 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 pur- poses 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-control- ling 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 assist- ance payments in accordance with this sub- section on behalf of a family that utilizes a manufactured home as a principal place of residence and rents 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 para- graph, rent shall mean the sum of the monthly payments made by a family as- sisted under this paragraph to amortize the cost of purchasing the manufactured home, including any required insurance and property taxes, the monthly amount allowed for tenant-paid utilities, and the monthly rent charged for the real property on which the manufactured home is lo- cated, including monthly management and maintenance charges. (ii) Monthly assistance payment The monthly assistance payment for a family assisted under this paragraph shall be determined in accordance with para- graph (2). If the amount of the monthly as- sistance payment for a family exceeds the monthly rent charged for the real property on which the manufactured home is lo- cated, including monthly management and maintenance charges, a public housing agency may pay the remainder to the fam- ily, lender or utility company, or may choose to make a single payment to the family for the entire monthly assistance amount. (13) PHA project-based assistance (A) In general A public housing agency may use amounts provided under an annual contributions con- tract under this subsection to enter into a housing assistance payment contract with respect to an existing, newly constructed, or rehabilitated project, that is attached to the project, subject to the limitations and re- quirements of this paragraph. (B) Percentage limitation (i) In general Subject to clause (ii), a public housing agency may use for project-based assist- ance 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 as- sistance under this paragraph, to provide units that house individuals and families that meet the definition of homeless under section 103 of the McKinney-Vento Home- less Assistance Act (42 U.S.C. 11302), that house families with veterans, that provide supportive housing to persons with disabil- ities or elderly persons, that house eligible youths receiving assistance pursuant to subsection (x)(2)(B), or that are located in areas where vouchers under this sub- section 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 re- quired rent restrictions or receiving an- other type of long-term housing subsidy provided by the Secretary shall not count toward the percentage limitation under clause (i) of this subparagraph. The Sec- retary may, by regulation, establish addi- tional 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 pursu- ant to this paragraph only if the contract is consistent with— (i) the public housing agency plan for the agency approved under section 1437c–1 of this title; and (ii) the goal of deconcentrating poverty and expanding housing and economic op- portunities. Page 4592 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (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 para- graph. For purposes of this subparagraph, the term ‘‘project’’ means a single build- ing, multiple contiguous buildings, or mul- tiple 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, to el- igible youths receiving assistance pursu- ant to subsection (x)(2)(B), or to house- holds 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 deter- mined 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 per- cent’’, and the Secretary may, by regula- tion, 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 hous- ing assistance payment contract for project-based assistance pursuant to this paragraph on July 29, 2016. (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 fam- ily with tenant-based rental assistance under this section or such other tenant- based rental assistance that is subject to comparable income, assistance, rent con- tribution, affordability, and other require- ments, as the Secretary shall provide by regulation. If such rental assistance is not immediately available to fulfill the re- quirement 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 (i) Term A housing assistance payment contract pursuant to this paragraph between a pub- lic housing agency and the owner of a project may have a term of up to 20 years, subject to— (I) the availability of sufficient appro- priated funds for the purpose of renewing expiring contracts for assistance pay- ments, as provided in appropriation Acts and in the agency’s annual contributions contract with the Secretary, provided that in the event of insufficient appro- priated funds, payments due under con- tracts 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 re- quirements under paragraph (8), except that the agency shall not be required to make biennial inspections of each as- sisted unit in the development. (ii) Addition of eligible units Subject to the limitations of subpara- graphs (B) and (D), the agency and the owner may add eligible units within the same project to a housing assistance pay- ments contract at any time during the term thereof without being subject to any additional competitive selection proce- dures. (iii) Housing under construction or re- cently constructed An agency may enter into a housing as- sistance payments contract with an owner for any unit that does not qualify as exist- ing 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 Page 4593 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f compliance with applicable requirements prior to execution of the housing assist- ance payments contract. This clause shall not subject a housing assistance payments contract for existing housing under this paragraph to such requirements or other- wise limit the extent to which a unit may be assisted as existing housing. (iv) Additional conditions The contract may specify additional con- ditions, including with respect to continu- ation, termination, or expiration, and shall specify that upon termination or ex- piration 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 rea- sonable 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 al- lowed 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 project assisted under a housing assistance payment con- tract pursuant to this paragraph to extend the term of the underlying housing assist- ance payment contract for such period as the agency determines to be appropriate to achieve long-term affordability of the hous- ing or to expand housing opportunities. Such contract may, at the election of the public housing agency and the owner of the project, specify that such contract shall be extended for renewal terms of up to 20 years each, if the agency makes the determination re- quired by this subparagraph and the owner is in compliance with the terms of the con- tract. 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 pro- vided in appropriations Acts, and may obli- gate the owner to have such extensions of the underlying housing assistance payment contract accepted by the owner and the suc- cessors in interest of the owner. A public housing agency may agree to enter into such a contract at the time it enters into the ini- tial agreement for a housing assistance pay- ment contract or at any time thereafter that is before the expiration of the housing as- sistance 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 appli- cable 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 cred- its pursuant to section 42 of title 26 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 es- tablished 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 addi- tional rental assistance, except that in the case of a contract unit that has been allo- cated 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 agen- cy, be established at the higher section 8 [42 U.S.C. 1437f] rent, subject only to paragraph (10)(A). The rents established by housing as- sistance 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 entered into after July 29, 2016, shall provide for annual rent adjustments upon the request of the owner, except that— (i) by agreement of the parties, a con- tract may allow a public housing agency to adjust the rent for covered units using an operating cost adjustment factor estab- lished by the Secretary pursuant to sec- tion 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 peri- odically during the term of the contract, and shall require such an adjustment, if re- quested, upon extension pursuant to sub- paragraph (G); (ii) the adjusted rent shall not exceed the maximum rent permitted under sub- paragraph (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 cov- ering the units; and (iv) the provisions of subsection (c)(2)(C) shall not apply. (J) Tenant selection A public housing agency may select fami- lies to receive project-based assistance pur- suant 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 sub- paragraph. Eligibility for such project-based assistance shall be subject to the provisions of section 1437n(b) of this title that apply to tenant-based assistance. The agency or owner may establish preferences or criteria for selection for a unit assisted under this paragraph that are consistent with the pub- lic housing agency plan for the agency ap- Page 4594 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f proved under section 1437c–1 of this title 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 project by the owner or manager of a project assisted under this paragraph shall retain its place on the waiting list as if the offer had not been made. 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 appli- cants on the waiting list of an agency for as- sistance under this subsection shall be per- mitted to place their names on such sepa- rate list, subject to policies and procedures established by the Secretary. All such proce- dures shall comply with title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], the Fair Housing Act [42 U.S.C. 3601 et seq.], section 794 of title 29, 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 as- sisted 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 re- side 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 assist- ance under the contract, for a reasonable period not exceeding 60 days, for a dwell- ing 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 reason- able action to minimize the likelihood and extent of any such vacancy. Rental assist- ance 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 va- cant unit. Amounts deobligated pursuant to such a contract provision shall be avail- able to the agency to provide assistance under this subsection. Eligible applicants for assistance under this subsection may enforce provisions author- ized 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, with- out review and approval of the contract by the Secretary. (M) Reviews (i) Subsidy layering A subsidy layering review in accordance with section 3545(d) of this title shall not be required for assistance under this para- graph in the case of a housing assistance payments contract for an existing 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 re- quired to undertake any environmental re- view before entering into a housing assist- ance payments contract under this para- graph for an existing 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 ini- tiative to improve, develop, or replace a pub- lic housing property or site may attach as- sistance to an existing, newly constructed, or rehabilitated structure in which the agen- cy has an ownership interest or which the agency has control of without following a competitive process, provided that the agen- cy 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 as- sistance 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 assist- ance under this subsection may, at the op- tion 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 Page 4595 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f a homeownership program under subsection (y). (16) Rental vouchers for relocation of wit- nesses 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 Inspec- tor General, shall make available such sums as may be necessary for the relocation of witnesses in connection with efforts to com- bat crime in public and assisted housing pur- suant to requests from law enforcement or prosecution agencies. (B) Victims of crime (i) In general Of amounts made available for assist- ance under this section in each fiscal year, the Secretary shall make available such sums as may be necessary for the reloca- tion 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) that has been reported to an appro- priate law enforcement agency. (ii) Notice A public housing agency that receives amounts under this subparagraph shall es- tablish procedures for providing notice of the availability of that assistance to fami- lies that may be eligible for that assist- ance. (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 para- graph may not be construed to affect the pro- visions or applicability of the Fair Housing Act [42 U.S.C. 3601 et seq.]. (18) Rental assistance for assisted living facili- ties (A) In general A public housing agency may make assist- ance payments on behalf of a family that uses an assisted living facility as a principal place of residence and that uses such sup- portive services made available in the facil- ity as the agency may require. Such pay- ments may be made only for covering costs of rental of the dwelling unit in the assisted living facility and not for covering any por- tion of the cost of residing in such facility that is attributable to service relating to as- sisted living. (B) Rent calculation (i) Charges included For assistance pursuant to this para- graph, 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 serv- ices 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 estab- lished 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 para- graph (2) (using the rent and payment standard for the dwelling unit as deter- mined 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 ex- ceeding 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..3 (C) Definition For the purposes of this paragraph, the term ‘‘assisted living facility’’ has the mean- ing 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 sup- ported 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 ad- ministered in conjunction with the Depart- ment 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 nec- essary to provide 500 vouchers for rental assistance under this subsection; (ii) for fiscal year 2008, the amount nec- essary to provide 1,000 vouchers for rental assistance under this subsection; (iii) for fiscal year 2009, the amount nec- essary to provide 1,500 vouchers for rental assistance under this subsection; (iv) for fiscal year 2010, the amount nec- essary to provide 2,000 vouchers for rental assistance under this subsection; and Page 4596 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (v) for fiscal year 2011, the amount nec- essary 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 ex- ceeds the amount set aside in the preceding fiscal year, such requirement shall be effec- tive only to such extent or in such amounts as are or have been provided in appropria- tion Acts for such fiscal year for incre- mental rental assistance under this sub- section. (D) Veteran defined In this paragraph, the term ‘‘veteran’’ has the meaning given that term in section 2002(b) of title 38, United States Code. (20) Collection of utility data (A) Publication The Secretary shall, to the extent that data can be collected cost effectively, regu- larly 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 sub- section. (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 utili- ties, from high rent and utility cost bur- dens relative to income. (21) Carbon monoxide alarms Each dwelling unit receiving tenant-based assistance or project-based assistance under this subsection shall have carbon monoxide alarms or detectors installed in the dwelling unit in a manner that meets or exceeds— (A) the standards described in chapters 9 and 11 of the 2018 publication of the Inter- national Fire Code, as published by the International Code Council; or (B) any other standards as may be adopted by the Secretary, including any relevant up- dates to the International Fire Code, through a notice published in the Federal Register. (22) Qualifying smoke alarms (A) In general Each dwelling unit receiving tenant-based assistance or project-based assistance under this subsection shall have a qualifying smoke alarm installed in accordance with applicable codes and standards published by the International Code Council or the Na- tional Fire Protection Association and the requirements of the National Fire Protec- tion Association Standard 72, or any suc- cessor standard, in each level and in or near each sleeping area in such dwelling unit, in- cluding in basements but excepting crawl spaces and unfinished attics, and in each common area in a project containing such a dwelling unit. (B) Definitions For purposes of this paragraph, the fol- lowing definitions shall apply: (i) Smoke alarm defined The term ‘‘smoke alarm’’ has the mean- ing given the term ‘‘smoke detector’’ in section 2225(d) of title 15. (ii) Qualifying smoke alarm defined The term ‘‘qualifying smoke alarm’’ means a smoke alarm that— (I) in the case of a dwelling unit built before December 29, 2022, and not sub- stantially rehabilitated after December 29, 2022— (aa)(AA) is hardwired; or (BB) uses 10-year non rechargeable, nonreplaceable primary batteries and is sealed, is tamper resistant, and con- tains silencing means; and (bb) provides notification for persons with hearing loss as required by the National Fire Protection Association Standard 72, or any successor standard; or (II) in the case of a dwelling unit built or substantially rehabilitated after De- cember 29, 2022, is hardwired. (p) Shared housing for elderly and handicapped In order to assist elderly families (as defined in section 1437a(b)(3) of this title 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 effec- tively and efficiently meets their housing needs and thereby reduces their cost of housing, the Secretary shall permit assistance provided under the existing housing and moderate reha- bilitation programs to be used by such families in such arrangements. In carrying out this sub- section, the Secretary shall issue minimum hab- itability standards for the purpose of assuring decent, safe, and sanitary housing for such fami- lies while taking into account the special cir- cumstances 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 as- sistance, 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 agen- cy that, on an annual basis, is admin- istering a program for not more than 600 dwelling units, 7.65 percent of the base amount; and Page 4597 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (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 subsection (c) of this section (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 mar- ket 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 re- flect the costs of administering the pro- gram, 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 Reg- ister, 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 re- flect the costs of administering the program, as determined by the Secretary. (D) Increase The Secretary may increase the fee if nec- essary to reflect the higher costs of admin- istering small programs and programs oper- ating 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 reason- able 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 assist- ance 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 assist- ance program under this chapter (as in effect immediately before such effective date), in connection with its initial increment of as- sistance 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 geo- graphical 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 lo- cated 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. (5) Supplements for administering assistance for youth aging out of foster care The Secretary may provide supplemental fees under this subsection to the public hous- ing agency for the cost of administering any assistance for foster youth under subsection (x)(2)(B), in an amount determined by the Sec- retary, but only if the agency waives for such eligible youth receiving assistance any resi- dency requirement that it has otherwise es- tablished pursuant to subsection (r)(1)(B)(i). (r) Portability (1) IN GENERAL.—(A) Any family receiving ten- ant-based assistance under subsection (o) may receive such assistance to rent an eligible dwell- ing 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 assist- ance 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 ju- risdiction served by the agency. (ii) The Secretary may establish such excep- tions to the authority of public housing agencies established under clause (i). (2) The public housing agency having author- ity 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 con- sideration 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 Page 4598 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f of public housing agencies that issue vouchers to families that move into or out of the jurisdic- tion of the public housing agency under port- ability procedures. The Secretary may reserve amounts available for assistance under sub- section (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 re- ceive a voucher from a public housing agency and move to another jurisdiction under the ten- ant-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 fam- ily may receive a voucher from a public housing agency and move to another jurisdiction under the tenant-based assistance program if the fam- ily has complied with all other obligations of the section 8 [42 U.S.C. 1437f] 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 vio- lence, dating violence, or stalking and who rea- sonably believed he or she was imminently threatened by harm from further violence if he or she remained in the assisted dwelling unit. (s) Prohibition of denial of certificates and vouchers to residents of public housing In selecting families for the provision of as- sistance under this section (including subsection (o)), a public housing agency may not exclude or penalize a family solely because the family re- sides in a public housing project. (t) Enhanced vouchers (1) In general Enhanced voucher assistance under this sub- section for a family shall be voucher assist- ance 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 re- main in the same project in which the fam- ily was residing on the date of the eligibility event for the project, and if, during any pe- riod the family makes such an election and continues to so reside, the rent for the dwell- ing unit of the family in such project ex- ceeds the applicable payment standard es- tablished pursuant to subsection (o) for the unit, the amount of rental assistance pro- vided on behalf of the family shall be deter- mined 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 sub- section (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 sub- section (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 fam- ily on behalf of whom the voucher was pro- vided; and (D) if the annual adjusted income of the assisted family declines to a significant ex- tent, the percentage of annual adjusted in- come paid by the family for rent shall not exceed the greater of 30 percent or the per- centage of 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 con- tract for the mortgage for such housing project (including any such mortgage prepay- ment during fiscal year 1996 or a fiscal year thereafter or any insurance contract vol- untary termination during fiscal year 1996 or a fiscal year thereafter), the termination or ex- piration of the contract for rental assistance under this section for such housing project (in- cluding 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 De- velopment, and Independent Agencies Appro- priations 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 4113(f) of title 12, or section 1715z–1a(p) of title 12, re- sults 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 pro- vided under any authority specified in sub- paragraph (B) shall (regardless of the date that the amounts for providing such assist- ance were made available) be treated, and subject to the same requirements, as en- hanced voucher assistance under this sub- section. (B) Identification of other authority The authority specified in this subpara- graph is the authority under— (i) the 10th, 11th, and 12th provisos under the ‘‘Preserving Existing Housing Invest- ment’’ account in title II of the Depart- ments of Veterans Affairs and Housing and Urban Development, and Independent Page 4599 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 6 See References in Text note below. 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 Af- fairs 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 Hous- ing and Urban Development, and Inde- pendent 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 Octo- ber 20, 1999. (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 en- hanced voucher assistance under this sub- section. (u) Assistance for residents of rental rehabilita- tion projects In the case of low-income families living in rental projects rehabilitated under section 1437o 6 of this title or section 1490m of this title 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 rehabilita- tion activities or because of overcrowding; (2) at the discretion of each public housing agency or other agency administering the al- location of assistance or vouchers under this section may be made for families who would have to pay more than 30 percent of their ad- justed 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 po- tential economic displacement, of existing tenants pursuant to paragraphs (1) and (2). (v) Extension of expiring contracts The Secretary may extend expiring contracts entered into under this section for project-based loan management assistance to the extent nec- essary to prevent displacement of low-income families receiving such assistance as of Sep- tember 30, 1996. (w) Repealed. Pub. L. 106–74, title V, § 531(d)(2), Oct. 20, 1999, 113 Stat. 1116 (x) Family unification (1) Increase in budget authority The budget authority available under sec- tion 1437c(c) of this title for assistance under subsection (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 sub- section shall be used only in connection with tenant-based assistance under this section 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) subject to para- graph (5), for a period not to exceed 36 months, otherwise eligible youths who have attained at least 18 years of age and not more than 24 years of age and who have left foster care, or will leave foster care within 90 days, in accord- ance with a transition plan described in sec- tion 475(5)(H) of the Social Security Act [42 U.S.C. 675(5)(H)], and is homeless or is at risk of becoming homeless at age 16 or older. (3) Allocation (A) In general The amounts made available under this subsection shall be allocated by the Sec- retary through a national competition among applicants based on demonstrated need for the assistance under this sub- section. 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 juris- diction is resulting in the initial or pro- longed separation of children from their families, and how the applicant will coordi- nate with the public child welfare agency to identify eligible families and provide the families with assistance under this sub- section. (B) Assistance for youth aging out of foster care Notwithstanding any other provision of law, the Secretary shall, subject only to the availability of funds, allocate such assist- ance to any public housing agencies that (i) administer assistance pursuant to paragraph (2)(B), or seek to administer such assistance, consistent with procedures established by the Secretary, (ii) have requested such as- sistance so that they may provide timely as- sistance to eligible youth, and (iii) have sub- mitted to the Secretary a statement describ- ing how the agency will connect assisted youths with local community resources and self-sufficiency services, to the extent they are available, and obtain referrals from pub- lic child welfare agencies regarding youths in foster care who become eligible for such assistance. (4) Coordination between public housing agen- cies and public child welfare agencies The Secretary shall, not later than the expi- ration of the 180-day period beginning on July 29, 2016, and after consultation with other ap- propriate Federal agencies, issue guidance to Page 4600 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f improve coordination between public housing agencies and public child welfare agencies in carrying out the program under this sub- section, which shall provide guidance on— (A) identifying eligible recipients for as- sistance under this subsection and estab- lishing a point of contact at public housing agencies to ensure that public housing agen- cies receive appropriate referrals regarding eligible recipients; (B) coordinating with other local youth and family providers in the community and participating in the Continuum of Care pro- gram 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 as- sist eligible families and youth; (D) aligning system goals to improve out- comes 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 sup- portive 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). (5) Requirements for assistance for youth aging out of foster care Assistance provided under this subsection for an eligible youth pursuant to paragraph (2)(B) shall be subject to the following require- ments: (A) Requirements to extend assistance (i) Participation in family self-sufficiency In the case of a public housing agency that is providing such assistance under this subsection on behalf of an eligible youth and that is carrying out a family self-sufficiency program under section 1437u of this title, the agency shall, subject only to the availability of such assistance, extend the provision of such assistance for up to 24 months beyond the period referred to in paragraph (2)(B), but only during such period that the youth is in compli- ance with the terms and conditions appli- cable under section 1437u of this title and the regulations implementing such section to a person participating in a family self- sufficiency program. (ii) Education, workforce development, or employment In the case of a public housing agency that is providing such assistance under this subsection on behalf of an eligible youth and that is not carrying out a fam- ily self-sufficiency program under section 1437u of this title, or is carrying out such a program in which the youth has been un- able to enroll, the agency shall, subject only to the availability of such assistance, extend the provision of such assistance for two successive 12-month periods, after the period referred to in paragraph (2)(B), but only if for not less than 9 months of the 12- month period preceding each such exten- sion the youth was— (I) engaged in obtaining a recognized postsecondary credential or a secondary school diploma or its recognized equiva- lent; (II) enrolled in an institution of higher education, as such term is defined in sec- tion 1001(a) of title 20 and including the institutions described in subparagraphs (A) and (B) of section 1002(a)(1) of title 20; or (III) participating in a career pathway, as such term is defined in section 3102 of title 29. Notwithstanding any other provision of this clause, a public housing agency shall consider employment as satisfying the re- quirements under this subparagraph. (iii) Exceptions Notwithstanding clauses (i) and (ii), a public housing agency that is providing such assistance under this subsection on behalf of an eligible youth shall extend the provision of such assistance for up to 24 months beyond the period referred to in paragraph (2)(B), and clauses (i) and (ii) of this subparagraph shall not apply, if the eligible youth certifies that he or she is— (I) a parent or other household member responsible for the care of a dependent child under the age of 6 or for the care of an incapacitated person; (II) a person who is regularly and ac- tively participating in a drug addiction or alcohol treatment and rehabilitation program; or (III) a person who is incapable of com- plying with the requirement under clause (i) or (ii), as applicable, due to a documented medical condition. (iv) Verification of compliance The Secretary shall require the public housing agency to verify compliance with the requirements under this subparagraph by each eligible youth on whose behalf the agency provides such assistance under this subsection on an annual basis in conjunc- tion with reviews of income for purposes of determining income eligibility for such as- sistance. (B) Supportive services (i) Eligibility Each eligible youth on whose behalf such assistance under this subsection is pro- vided shall be eligible for any supportive services (as such term is defined in section 3102 of title 29) made available, in connec- tion with any housing assistance program of the agency, by or through the public housing agency providing such assistance. (ii) Information Upon the initial provision of such assist- ance under this subsection on behalf of any eligible youth, the public housing agency shall inform such eligible youth of the ex- istence of any programs or services re- ferred to in clause (i) and of their eligi- bility for such programs and services. Page 4601 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (C) Applicability to Moving to Work agencies Notwithstanding any other provision of law, the requirements of this paragraph shall apply to assistance under this sub- section pursuant to paragraph (2)(B) made available by each public housing agency par- ticipating in the Moving to Work Program under section 204 of the Departments of Vet- erans Affairs and Housing and Urban Devel- opment, and Independent Agencies Appro- priations Act, 1996 (42 U.S.C. 1437f note), ex- cept that in lieu of compliance with clause (i) or (ii) of subparagraph (A) of this para- graph, such an agency may comply with the requirements under such clauses by com- plying with such terms, conditions, and re- quirements as may be established by the agency for persons on whose behalf such rental assistance under this subsection is provided. (D) Termination of vouchers upon turn-over A public housing agency shall not reissue any such assistance made available from ap- propriated funds when assistance for the youth initially assisted is terminated, unless specifically authorized by the Secretary. (E) Reports (i) In general The Secretary shall require each public housing agency that provides such assist- ance under this subsection in any fiscal year to submit a report to the Secretary for such fiscal year that— (I) specifies the number of persons on whose behalf such assistance under this subsection was provided during such fis- cal year; (II) specifies the number of persons who applied during such fiscal year for such assistance under this subsection, but were not provided such assistance, and provides a brief identification in each instance of the reason why the pub- lic housing agency was unable to award such assistance; and (III) describes how the public housing agency communicated or collaborated with public child welfare agencies to col- lect such data. (ii) Information collections The Secretary shall, to the greatest ex- tent possible, utilize existing information collections, including the voucher manage- ment system (VMS), the Inventory Man- agement System/PIH Information Center (IMS/PIC), or the successors of those sys- tems, to collect information required under this subparagraph. (F) Consultation The Secretary shall consult with the Sec- retary of Health and Human Services to pro- vide such information and guidance to the Secretary of Health and Human Services as may be necessary to facilitate such Sec- retary in informing States and public child welfare agencies on how to correctly and ef- ficiently implement and comply with the re- quirements of this subsection relating to as- sistance provided pursuant to paragraph (2)(B). (6) Definitions For purposes of this subsection: (A) Applicant The term ‘‘applicant’’ means a public housing agency or any other agency respon- sible for administering assistance under this section. (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 pub- lic 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 in- come from employment or other sources (other than public assistance, except that the Secretary may provide for the consider- ation of public assistance in the case of an elderly family or a disabled family), as de- termined 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 ini- tially receives tenant-based assistance under this subsection that one or more adult mem- bers of the family have achieved employ- ment 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 hous- ing 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 require- ments 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, round- ed to the nearest dollar: (i) 30 percent of the monthly adjusted in- come of the family. Page 4602 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (ii) 10 percent of the monthly income of the family. (iii) If the family is receiving payments for welfare assistance from a public agen- cy, and a portion of those payments, ad- justed in accordance with the actual hous- ing costs of the family, is specifically des- ignated by that agency to meet the hous- ing costs of the family, the portion of those payments that is so designated. (B) Monthly expenses exceed payment stand- ard If the monthly homeownership expenses, as determined in accordance with require- ments established by the Secretary, exceed the payment standard, the monthly assist- ance 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 re- pairs be paid by the seller. (B) Annual inspections not required The requirement under subsection (o)(8)(A)(ii) 6 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 fam- ily assisted under this subsection; and (B) modify the requirements of this sub- section 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) 6 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 chapter 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 de- faults under a mortgage for the dwelling in- sured by the Secretary under the National Housing Act [12 U.S.C. 1701 et seq.], the fam- ily may not continue to receive rental as- sistance 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 ap- proved by the Secretary, and (iii) agrees that any amounts the family is required to pay to reimburse the escrow account under section 1437u(d)(3) 6 of this title may be de- ducted 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 in- sured under the National Housing Act [12 U.S.C. 1701 et seq.], the family may not con- tinue 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 sub- section for occupancy of another dwelling owned by one or more members of the fam- ily. (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 discre- tion of the public housing agency, provide assistance for the family in the form of a single grant to be used only as a contribu- tion 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) ‘‘First-time homeowner’’ defined 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 1437f contracts and reuse of recaptured budget authority (1) General authority The Secretary may reuse any budget author- ity, in whole or part, that is recaptured on ac- count of expiration or termination of a hous- ing assistance payments contract only for one or more of the following: Page 4603 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f (A) Tenant-based assistance Pursuant to a contract with a public hous- ing agency, to provide tenant-based assist- ance under this section to families occu- pying units formerly assisted under the ter- minated 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 con- tract. 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) Omitted (bb) Transfer, reuse, and rescission of budget au- thority (1) Transfer of budget authority If an assistance contract under this section, other than a contract for tenant-based assist- ance, 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 mul- tifamily housing project subject to actions au- thorized under this subchapter is terminated or amended as part of restructuring under sec- tion 517 of the Multifamily Assisted Housing Reform and Affordability Act of 1997, the Sec- retary shall recapture the budget authority not required for the terminated or amended contract and use such amounts as are nec- essary to provide housing assistance for the same number of families covered by such con- tract for the remaining term of such contract, under a contract providing for project-based or tenant-based assistance. The amount of budg- et 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 chapter, in the case of assistance attached to a structure, for the purpose of increasing secu- rity 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 eli- gible for assistance under the chapter. (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 con- ditions of occupancy that the Secretary con- siders to be appropriate; and (B) require the owner to submit an appli- cation 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 ap- plying an inflation factor based on local or re- gional factors to an allocation baseline. The al- location baseline shall be calculated by includ- ing, at a minimum, amounts sufficient to ensure continued assistance for the actual number of families assisted as of October 1, 1997, with ap- propriate upward adjustments for incremental assistance and additional families authorized subsequent to that date. (Sept. 1, 1937, ch. 896, title I, § 8, as added Pub. L. 93–383, title II, § 201(a), Aug. 22, 1974, 88 Stat. 662; amended Pub. L. 94–375, § 2(d), (e), (g), Aug. 3, 1976, 90 Stat. 1068; Pub. L. 95–24, title I, § 101(c), Apr. 30, 1977, 91 Stat. 55; Pub. L. 95–128, title II, § 201(c)–(e), Oct. 12, 1977, 91 Stat. 1128; Pub. L. 95–557, title II, § 206(d)(1), (e), (f), Oct. 31, 1978, 92 Stat. 2091, 2092; Pub. L. 96–153, title II, §§ 202(b), 206(b), 210, 211(b), Dec. 21, 1979, 93 Stat. 1106, 1108–1110; Pub. L. 96–399, title II, § 203, title III, § 308(c)(3), Oct. 8, 1980, 94 Stat. 1629, 1641; Pub. L. 97–35, title III, §§ 322(e), 324–326(a), (e)(1), 329H(a), Aug. 13, 1981, 95 Stat. 402, 405–407, 410; Pub. L. 98–181, title I [title II, §§ 203(b)(1), (2), 207–209(a), 210, 211], Nov. 30, 1983, 97 Stat. 1178, 1181–1183; Pub. L. 98–479, title I, § 102(b)(6)–(10), Oct. 17, 1984, 98 Stat. 2221, 2222; Pub. L. 100–242, title I, §§ 141–149, title II, § 262, Feb. 5, 1988, 101 Stat. 1849–1853, 1890; renumbered title I, Pub. L. 100–358, § 5, June 29, 1988, 102 Stat. 681; Pub. L. 100–628, title X, §§ 1004(a), 1005(b)(1), (c), 1006, 1014(b), (c), 1029, Nov. 7, 1988, 102 Stat. 3264, 3265, 3269, 3272; Pub. L. 101–235, title I, § 127, title VIII, § 801(c), (g), Dec. 15, 1989, 103 Stat. 2025, 2058, 2059; Pub. L. 101–625, title II, § 289(b), title IV, § 413, title V, §§ 541–545(a), 545(2)[(b)], 546–549, 550(a), (c), 551–553, 572, title VI, §§ 603, 613(a), Nov. 28, 1990, 104 Stat. 4128, 4160, 4216–4224, 4236, 4277, 4280; Pub. L. 102–139, title II, Oct. 28, 1991, 105 Stat. 756; Pub. L. 102–550, title I, §§ 141–148, 185(a), title VI, §§ 623(b), 660, 674, 675, 682(b), title X, § 1012(g), Oct. 28, 1992, 106 Stat. 3713–3715, 3745, 3819, 3825, 3827, 3828, 3830, 3905; Pub. L. 103–233, title I, § 101(c)(2), (3), (d), Apr. 11, 1994, 108 Stat. 357; Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2315; Pub. L. 104–19, title I, § 1003, July 27, 1995, 109 Stat. 236; Pub. L. 104–99, title IV, §§ 402(d)(2), (3), (6)(A)(iii), (iv), 405(c), Jan. 26, 1996, 110 Stat. 41, 42, 44; Pub. L. 104–134, title I, § 101(e) [title II, Page 4604 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f §§ 203(a)–(c), 208], Apr. 26, 1996, 110 Stat. 1321–257, 1321–281, 1321–284; renumbered title I, Pub. L. 104–140, § 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 104–193, title IX, § 903(a)(2), Aug. 22, 1996, 110 Stat. 2348; Pub. L. 104–204, title II, § 201(g), Sept. 26, 1996, 110 Stat. 2893; Pub. L. 105–18, title II, § 10002, June 12, 1997, 111 Stat. 201; Pub. L. 105–33, title II, §§ 2003, 2004, Aug. 5, 1997, 111 Stat. 257; Pub. L. 105–65, title II, §§ 201(c), 205, title V, § 523(a), (c), Oct. 27, 1997, 111 Stat. 1364, 1365, 1406, 1407; Pub. L. 105–276, title II, § 209(a), title V, §§ 514(b)(1), 545(a), (b), 547–549(a)(2), (b), 550(a), 552–555(a), 556(a), 565(c), Oct. 21, 1998, 112 Stat. 2485, 2547, 2596–2607, 2609–2611, 2613, 2631; Pub. L. 106–74, title II, § 223, title V, §§ 523(a), 531(d), 535, 538(a), Oct. 20, 1999, 113 Stat. 1076, 1104, 1116, 1121, 1122; Pub. L. 106–246, div. B, title II, § 2801, July 13, 2000, 114 Stat. 569; Pub. L. 106–377, § 1(a)(1) [title II, §§ 205, 228, 232(a), 234], Oct. 27, 2000, 114 Stat. 1441, 1441A–24, 1441A–30, 1441A–31, 1441A–35; Pub. L. 106–569, title III, § 301(a), title IX, §§ 902(a), 903(a), Dec. 27, 2000, 114 Stat. 2952, 3026; Pub. L. 107–95, § 12, Dec. 21, 2001, 115 Stat. 921; Pub. L. 107–116, title VI, § 632, Jan. 10, 2002, 115 Stat. 2227; Pub. L. 109–162, title VI, § 606, Jan. 5, 2006, 119 Stat. 3041; Pub. L. 109–271, § 5(d), (e), Aug. 12, 2006, 120 Stat. 759; Pub. L. 109–461, title VII, § 710, Dec. 22, 2006, 120 Stat. 3441; Pub. L. 110–234, title IV, § 4002(b)(1)(B), (2)(Y), May 22, 2008, 122 Stat. 1096, 1097; Pub. L. 110–246, § 4(a), title IV, § 4002(b)(1)(B), (2)(Y), June 18, 2008, 122 Stat. 1664, 1857, 1859; Pub. L. 110–289, div. B, title VIII, § 2835(a), July 30, 2008, 122 Stat. 2871; Pub. L. 111–22, div. A, title VII, §§ 703, 704, May 20, 2009, 123 Stat. 1661, 1662; Pub. L. 111–203, title XIV, § 1484(2), July 21, 2010, 124 Stat. 2204; Pub. L. 111–372, title III, § 302, Jan. 4, 2011, 124 Stat. 4084; Pub. L. 113–4, title VI, § 601(b)(2), Mar. 7, 2013, 127 Stat. 107; Pub. L. 113–76, div. L, title II, §§ 220(a), 242, Jan. 17, 2014, 128 Stat. 630, 636; Pub. L. 114–94, div. G, title LXXVIII, § 78001(b), Dec. 4, 2015, 129 Stat. 1791; Pub. L. 114–201, title I, §§ 101(a), 102(d)–(f), 105, 106(a), 107(a), (b), 108, 110, 112(a), July 29, 2016, 130 Stat. 783, 790, 791, 796, 800, 801, 803; Pub. L. 115–174, title III, § 304(a), (b), May 24, 2018, 132 Stat. 1339; Pub. L. 116–260, div. Q, title I, §§ 101(b)(2), 103(b), (c), Dec. 27, 2020, 134 Stat. 2163, 2166, 2169; Pub. L. 116–283, div. H, title XCI, § 9103(a), Jan. 1, 2021, 134 Stat. 4781; Pub. L. 117–328, div. AA, title VI, § 601(a)(2), Dec. 29, 2022, 136 Stat. 5543.) Editorial Notes REFERENCES IN TEXT The Housing and Community Development Act of 1992, referred to in subsec. (d)(2)(C), (D), is Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3672. Subtitle C of title VI of the Act is classified generally to subchapter I (§ 13601 et seq.) of chapter 135 of this title. Subtitle D of title VI of the Act is classified principally to subchapter II (§ 13611 et seq.) of chapter 135 of this title. For complete classification of this Act to the Code, see Short Title of 1992 Amendment note set out under section 5301 of this title and Tables. The Multifamily Assisted Housing Reform and Af- fordability Act of 1997, referred to in subsecs. (d)(5), (o)(13)(I)(i), and (bb)(2), is title V of Pub. L. 105–65, Oct. 27, 1997, 111 Stat. 1384. Sections 514, 517, and 524 of the Act are set out in a note under this section. For com- plete classification of this Act to the Code, see Short Title of 1997 Amendment note set out under section 1701 of Title 12, Banks and Banking, and Tables. The Cranston-Gonzalez National Affordable Housing Act, referred to in subsecs. (f)(4) and (o)(4)(D), (8)(E)(i), (10)(F), is Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4079. Title II of the Act, also known as the ‘‘HOME Invest- ment Partnerships Act’’, is classified principally to subchapter II (§ 12721 et seq.) of chapter 130 of this title. Subtitle A of title II of the Act is classified generally to part A (§ 12741 et seq.) of subchapter II of chapter 130 of this title. Title IV of the Act, also known as the ‘‘Homeownership and Opportunity Through HOPE Act’’, enacted subchapter II–A (§ 1437aaa et seq.) of this chapter and subchapter IV (§ 12871 et seq.) of chapter 130 of this title, amended sections 1437c, 1437f, 1437l, 1437p, 1437r, and 1437s of this title and section 1709 of Title 12, Banks and Banking, and enacted provisions set out as notes under sections 1437c, 1437aa, and 1437aaa of this title. For complete classification of this Act to the Code, see Short Title note set out under section 12701 of this title and Tables. The Social Security Act, referred to in subsecs. (k) and (x)(4)(E), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, which is classified generally to chapter 7 (§ 301 et seq.) of this title. Parts B and E of title IV of the Act are classified generally to parts B (§ 621 et seq.) and E (§ 670 et seq.), respectively, of subchapter IV of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables. The Food and Nutrition Act of 2008, referred to in subsec. (k), is Pub. L. 88–525, Aug. 31, 1964, 78 Stat. 703, which is classified generally to chapter 51 (§ 2011 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under 2011 of Title 7 and Tables. The Civil Rights Act of 1964, referred to in subsec. (o)(13)(J), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241. Title VI of the Act is classified generally to subchapter V (§ 2000d et seq.) of chapter 21 of this title. For com- plete classification of this Act to the Code, see Short Title note set out under section 2000a of this title and Tables. The Fair Housing Act, referred to in subsec. (o)(13)(J), (17), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, which is classified principally to subchapter I (§ 3601 et seq.) of chapter 45 of this title. For complete classi- fication of this Act to the Code, see Short Title note set out under section 3601 of this title and Tables. Section 503(a) of the Quality Housing and Work Re- sponsibility Act of 1998, referred to in subsec. (q)(1)(B)(ii)(I), (2)(A), is section 503(a) of Pub. L. 105–276, which is set out as an Effective Date of 1998 Amend- ment note under section 1437 of this title. The effective date of the Departments of Veterans Af- fairs and Housing and Urban Development, and Inde- pendent Agencies Appropriations Act, 2001, referred to in subsec. (t)(2), means the effective date of H.R. 5482, as enacted by section 1(a)(1) of Pub. L. 106–377, which was approved Oct. 27, 2000. Section 1437o of this title, referred to in subsec. (u), was repealed by Pub. L. 101–625, title II, § 289(b), Nov. 28, 1990, 104 Stat. 4128. The McKinney-Vento Homeless Assistance Act, re- ferred to in subsec. (x)(4)(B), is Pub. L. 100–77, July 22, 1987, 101 Stat. 482. Subtitle C of title IV of the Act is classified generally to part C (§ 11381 et seq.) of sub- chapter IV of chapter 119 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 11301 of this title and Tables. Section 204 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996, referred to in sub- sec. (x)(5)(C), is section 204 of Pub. L. 104–134, title I, § 101(e) [title II], Apr. 26, 1996, 110 Stat. 1321–257, 1321–281, which is set out as a note under this section. Subsection (o)(8)(A) of this section, referred to in sub- sec. (y)(3)(B), does not contain a cl. (ii) and does not re- late to annual inspections. For provisions of subsec. (o)(8) which relate to annual inspections, see subpar. (D). Subsection (c)(3)(B) of this section, referred to in sub- sec. (y)(5), was repealed by Pub. L. 105–276, title V, § 550(a)(3)(A)(ii), Oct. 21, 1998, 112 Stat. 2609. Page 4605 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f The National Housing Act, referred to in subsec. (y)(6), is act June 27, 1934, ch. 847, 48 Stat. 1246, which is classified principally to chapter 13 (§ 1701 et seq.) of Title 12, Banks and Banking. For complete classifica- tion of this Act to the Code, see section 1701 of Title 12 and Tables. Section 1437u(d)(3) of this title, relating to reimburse- ment of escrow accounts, referred to in subsec. (y)(6)(A), was repealed by Pub. L. 105–276, title V, § 509(a)(2), Oct. 21, 1998, 112 Stat. 2531. CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. October 20, 1999, referred to in subsec. (t)(3)(B)(ii), was in the original ‘‘the enactment of this Act’’, which was translated as meaning the enactment of Pub. L. 106–74, which enacted subsec. (t) of this section, to reflect the probable intent of Congress. Pub. L. 100–242, title II, § 203(a), Feb. 5, 1988, 101 Stat. 1878, as amended, which was formerly set out in a note under section 1715l of Title 12, Banks and Banking, and which provided that on Nov. 28, 1990, the amendment made by section 262 of Pub. L. 100–242 is repealed and section is to read as it would without such amendment, was omitted in the general amendment of subtitle A of title II of Pub. L. 100–242 by Pub. L. 101–625. PRIOR PROVISIONS A prior section 8 of act Sept. 1, 1937, ch. 896, 50 Stat. 891, as amended, authorized promulgation of rules and regulations by the Authority and was classified to sec- tion 1408 of this title, prior to the general revision of this chapter by Pub. L. 93–383. AMENDMENTS 2022—Subsec. (l). Pub. L. 117–328, § 601(a)(2)(A), added subsec. (l). Subsec. (o)(22). Pub. L. 117–328, § 601(a)(2)(B), added par. (22). 2021—Subsec. (o)(19)(D). Pub. L. 116–283 added subpar. (D). 2020—Subsec. (j). Pub. L. 116–260, § 101(b)(2)(A), added subsec. (j). Subsec. (o)(13)(B)(ii). Pub. L. 116–260, § 103(c)(1), in- serted ‘‘that house eligible youths receiving assistance pursuant to subsection (x)(2)(B),’’ before ‘‘or that’’. Subsec. (o)(13)(D)(ii)(I). Pub. L. 116–260, § 103(c)(2), in- serted ‘‘, to eligible youths receiving assistance pursu- ant to subsection (x)(2)(B),’’ after ‘‘elderly families’’. Subsec. (o)(21). Pub. L. 116–260, § 101(b)(2)(B), added par. (21). Subsec. (q)(5). Pub. L. 116–260, § 103(b)(3), added par. (5). Subsec. (x)(2)(B). Pub. L. 116–260, § 103(b)(1)(A), in- serted ‘‘subject to paragraph (5),’’ before ‘‘for a period’’. Subsec. (x)(3). Pub. L. 116–260, § 103(b)(1)(B), des- ignated existing provisions as subpar. (A), inserted heading, and added subpar. (B). Subsec. (x)(4)(A). Pub. L. 116–260, § 103(b)(2), inserted ‘‘and establishing a point of contact at public housing agencies to ensure that public housing agencies receive appropriate referrals regarding eligible recipients’’ be- fore semicolon at end. Subsec. (x)(5), (6). Pub. L. 116–260, § 103(b)(1)(C), (D), added par. (5) and redesignated former par. (5) as (6). 2018—Subsec. (o)(7)(C), (F). Pub. L. 115–174 repealed Pub. L. 111–22, § 704, and restored and revived amend- ment by Pub. L. 111–22, § 703, as in effect Dec. 30, 2014. See 2009 Amendment notes below. 2016—Subsec. (c)(1). Pub. L. 114–201, § 107(a), des- ignated existing provisions as subpar. (A), struck out ‘‘Proposed fair market rentals for an area shall be pub- lished 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 Reg- ister.’’ after ‘‘October 1, 1980.’’ and ‘‘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 Coun- ty in the Commonwealth of Pennsylvania. In estab- lishing 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.’’ after ‘‘no practical alternative.’’, and added subpar. (B). Subsec. (c)(3). Pub. L. 114–201, § 102(f), struck out at end ‘‘Reviews of family income shall be made no less frequently than annually.’’ Subsec. (o)(1)(B). Pub. L. 114–201, § 107(b), inserted be- fore period at end ‘‘, 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 mar- ket rental areas subject to criteria and procedures es- tablished by the Secretary’’. Subsec. (o)(1)(D). Pub. L. 114–201, § 102(d)(1), inserted before period at end ‘‘, except that a public housing agency may establish a payment standard of not more than 120 percent of the fair market rent where nec- essary 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 dis- ability, 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 accommo- dation 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’’. Subsec. (o)(5). Pub. L. 114–201, § 102(d)(2)(A), sub- stituted ‘‘Reviews’’ for ‘‘Annual review’’ in heading. Subsec. (o)(5)(A). Pub. L. 114–201, § 102(d)(2)(B), sub- stituted ‘‘paragraphs (1), (6), and (7) of section 1437a(a) of this title and to’’ for ‘‘the provisions of’’ and struck out ‘‘and shall be conducted upon the initial provision of housing assistance for the family and thereafter as required by section 1437a(a)(1) of this title’’ before pe- riod at end. Subsec. (o)(5)(B). Pub. L. 114–201, § 102(d)(2)(C), struck out at end ‘‘Each public housing agency shall, not less frequently than annually, conduct a review of the fam- ily income of each family receiving assistance under this subsection.’’ Subsec. (o)(8)(A). Pub. L. 114–201, § 101(a)(1), added sub- par. (A) and struck out former subpar. (A). Prior to amendment, text read as follows: ‘‘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 hous- ing quality standards under subparagraph (B).’’ Subsec. (o)(8)(G), (H). Pub. L. 114–201, § 101(a)(2), (3), added subpar. (G) and redesignated former subpar. (G) as (H). Subsec. (o)(11). Pub. L. 114–201, § 105, designated exist- ing provisions as subpar. (A), inserted heading, and added subpar. (B). Subsec. (o)(12)(A). Pub. L. 114–201, § 112(a)(1), sub- stituted ‘‘residence and rents’’ for ‘‘residence. Such payments may be made only for the rental of’’. Subsec. (o)(12)(B)(i). Pub. L. 114–201, § 112(a)(2)(A), sub- stituted ‘‘rent shall mean the sum of the monthly pay- ments made by a family assisted under this paragraph to amortize the cost of purchasing the manufactured home, including any required insurance and property taxes, the monthly amount allowed for tenant-paid utilities, and the monthly rent charged for the real Page 4606 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f property on which the manufactured home is located, including monthly management and maintenance charges.’’ for ‘‘the rent for the space on which a manu- factured home is located and with respect to which as- sistance payments are to be made shall include mainte- nance and management charges and tenant-paid utili- ties.’’ Subsec. (o)(12)(B)(ii). Pub. L. 114–201, § 112(a)(2)(B), (C)(ii), redesignated cl. (iii) as (ii) and struck out former cl. (ii) which related to establishment of pay- ment standard for the purpose of determining monthly assistance. Subsec. (o)(12)(B)(iii). Pub. L. 114–201, § 112(a)(2)(C), in- serted ‘‘If the amount of the monthly assistance pay- ment for a family exceeds the monthly rent charged for the real property on which the manufactured home is located, including monthly management and mainte- nance charges, a public housing agency may pay the re- mainder to the family, lender or utility company, or may choose to make a single payment to the family for the entire monthly assistance amount.’’ after ‘‘para- graph (2).’’ and redesignated cl. (iii) as (ii). Subsec. (o)(13)(A). Pub. L. 114–201, § 106(a)(1), sub- stituted ‘‘project’’ for ‘‘structure’’ in two places. Subsec. (o)(13)(B). Pub. L. 114–201, § 106(a)(2), added subpar. (B) and struck out former subpar. (B). Prior to amendment, text read as follows: ‘‘Not more than 20 percent of the funding available for tenant-based as- sistance under this section that is administered by the agency may be attached to structures pursuant to this paragraph.’’ Subsec. (o)(13)(D). Pub. L. 114–201, § 106(a)(3), added subpar. (D) and struck out former subpar. (D). Prior to amendment, text read as follows: ‘‘(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 con- tract for housing consisting of single family properties or for dwelling units that are specifically made avail- able for households comprised of elderly families, dis- abled families, and families receiving supportive serv- ices.’’ Subsec. (o)(13)(F). Pub. L. 114–201, § 106(a)(4), added subpar. (F) and struck out former subpar. (F). Prior to amendment, text read as follows: ‘‘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 avail- ability 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 ad- ditional 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 agen- cy and the unit of general local government or other entity approved by the Secretary in the manner pro- vided under paragraph (11).’’ Subsec. (o)(13)(G). Pub. L. 114–201, § 106(a)(1), (5), sub- stituted ‘‘project’’ for ‘‘structure’’ in two places and ‘‘20 years’’ for ‘‘15 years’’. Subsec. (o)(13)(I). Pub. L. 114–201, § 106(a)(6), added subpar. (I) and struck out former subpar. (I). Prior to amendment, text read as follows: ‘‘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 com- parable 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 per- mitted 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.’’ Subsec. (o)(13)(J). Pub. L. 114–201, § 106(a)(1), (7), sub- stituted ‘‘may select families’’ for ‘‘shall select fami- lies’’, inserted ‘‘or may permit owners to select appli- cants from site-based waiting lists as specified in this subparagraph’’ before period at end of first sentence, and substituted ‘‘The agency or owner may establish preferences or criteria for selection for a unit assisted under this paragraph that are consistent with the pub- lic housing agency plan for the agency approved under section 1437c–1 of this title and that give preference to families who qualify for voluntary services, including disability-specific services, offered in conjunction with assisted units.’’ for ‘‘The agency may establish pref- erences or criteria for selection for a unit assisted under this paragraph that are consistent with the pub- lic housing agency plan for the agency approved under section 1437c–1 of this title.’’, ‘‘admission to a project by the owner or manager of a project’’ for ‘‘admission to a structure by the owner or manager of a structure’’, and ‘‘A public housing agency may establish and utilize procedures for owner-maintained site-based waiting lists, under which applicants may apply at, or other- wise 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 794 of title 29, 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 para- graph other than a family referred by the public hous- ing 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 dis- close to each applicant all other options in the selec- tion of a project in which to reside that are provided by the public housing agency and are available to the ap- plicant.’’ for ‘‘The owner or manager of a structure as- sisted 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 sub- section are permitted to place their names on the sepa- rate list.’’ Subsec. (o)(13)(M). Pub. L. 114–201, § 106(a)(1), sub- stituted ‘‘project’’ for ‘‘structure’’ in cls. (i) and (ii). Subsec. (o)(13)(M)(ii). Pub. L. 114–201, § 106(a)(8), in- serted before period at end ‘‘relating to funding other than housing assistance payments’’. Subsec. (o)(13)(N), (O). Pub. L. 114–201, § 106(a)(9), added subpars. (N) and (O). Subsec. (o)(20). Pub. L. 114–201, § 108, added par. (20). Subsec. (t)(1)(D). Pub. L. 114–201, § 102(e), substituted ‘‘annual adjusted income’’ for ‘‘income’’ wherever ap- pearing. Subsec. (x)(2)(B). Pub. L. 114–201, § 110(1), substituted ‘‘36 months’’ for ‘‘18 months’’ and ‘‘24 years of age’’ for ‘‘21 years of age’’ and inserted ‘‘, or will leave foster care within 90 days, in accordance with a transition plan described in section 475(5)(H) of the Social Secu- rity Act, and is homeless or is at risk of becoming homeless’’ after ‘‘have left foster care’’. Page 4607 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f Subsec. (x)(4), (5). Pub. L. 114–201, § 110(2), (3), added par. (4) and redesignated former par. (4) as (5). 2015—Subsec. (o)(5)(A). Pub. L. 114–94 substituted ‘‘as required by section 1437a(a)(1) of this title’’ for ‘‘not less than annually’’. 2014—Subsec. (o)(2)(D). Pub. L. 113–76, § 242, added sub- par. (D). Subsec. (o)(8)(D) to (G). Pub. L. 113–76, § 220(a), added subpars. (D) to (F), redesignated former subpar. (E) as (G), and struck out former subpar. (D) which required every public housing agency providing assistance under this subsection to make an annual inspection of each assisted dwelling unit. 2013—Subsec. (c)(9). Pub. L. 113–4, § 601(b)(2)(A), struck out par. (9) which related to prohibitions against the denial of program assistance or admission to victims of domestic violence, dating violence, or stalking and the termination of assistance, tenancy, or occupancy rights of such victims. Subsec. (d)(1)(A). Pub. L. 113–4, § 601(b)(2)(B)(i), struck out ‘‘and that an applicant or participant is or has been a victim of domestic violence, dating violence, or stalk- ing is not an appropriate basis for denial of program as- sistance or for denial of admission if the applicant oth- erwise qualifies for assistance or admission’’ before semicolon at end. Subsec. (d)(1)(B)(ii). Pub. L. 113–4, § 601(b)(2)(B)(ii)(I), struck out ‘‘, and that an incident or incidents of ac- tual or threatened domestic violence, dating violence, or stalking will not be construed as a serious or re- peated violation of the lease by the victim or threat- ened victim of that violence and will not be good cause for terminating the tenancy or occupancy rights of the victim of such violence’’ before semicolon at end. Subsec. (d)(1)(B)(iii). Pub. L. 113–4, § 601(b)(2)(B)(ii)(II), struck out before semicolon at end ‘‘, except that: (I) criminal activity directly relating to domestic vio- lence, dating violence, or stalking, engaged in by a member of a tenant’s household or any guest or other person under the tenant’s control, shall not be cause for termination of the tenancy or occupancy rights or program assistance, if the tenant or immediate mem- ber of the tenant’s family is a victim of that domestic violence, dating violence, or stalking; (II) Notwith- standing subclause (I) or any Federal, State, or local law to the contrary, a public housing agency may ter- minate assistance to, or an owner or manager may bi- furcate a lease under this section, or remove a house- hold member from a lease under this section, without regard to whether a household member is a signatory to a lease, in order to evict, remove, terminate occu- pancy rights, or terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family mem- bers or others, without evicting, removing, terminating assistance to, or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant. Such eviction, removal, termination of occupancy rights, or termination of assistance shall be effected in accordance with the procedures prescribed by Federal, State, and local law for the termination of leases or as- sistance under the relevant program of HUD-assisted housing. (III) nothing in subclause (I) may be construed to limit the authority of a public housing agency, owner, or manager, when notified, to honor court or- ders addressing rights of access to or control of the property, including civil protection orders issued to protect the victim and issued to address the distribu- tion or possession of property among the household members in cases where a family breaks up; (IV) noth- ing in subclause (I) limits any otherwise available au- thority of an owner or manager to evict or the public housing agency to terminate assistance to a tenant for any violation of a lease not premised on the act or acts of violence in question against the tenant or a member of the tenant’s household, provided that the owner, manager, or public housing agency does not subject an individual who is or has been a victim of domestic vio- lence, dating violence, or stalking to a more demanding standard than other tenants in determining whether to evict or terminate; (V) nothing in subclause (I) may be construed to limit the authority of an owner or man- ager to evict, or the public housing agency to termi- nate assistance, to any tenant if the owner, manager, or public housing agency can demonstrate an actual and imminent threat to other tenants or those em- ployed at or providing service to the property if that tenant is not evicted or terminated from assistance; and (VI) nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic violence, dating violence, or stalking.’’ Subsec. (f)(8) to (11). Pub. L. 113–4, § 601(b)(2)(C), struck out pars. (8) to (11) which defined ‘‘domestic vio- lence’’, ‘‘dating violence’’, ‘‘stalking’’, and ‘‘immediate family member’’, respectively. Subsec. (o)(6)(B). Pub. L. 113–4, § 601(b)(2)(D)(i), struck out at end ‘‘Nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic violence, dating vio- lence, or stalking.’’ Subsec. (o)(7)(C). Pub. L. 113–4, § 601(b)(2)(D)(ii)(I), in introductory provisions, struck out ‘‘and that an inci- dent or incidents of actual or threatened domestic vio- lence, dating violence, or stalking shall not be con- strued as a serious or repeated violation of the lease by the victim or threatened victim of that violence and shall not be good cause for terminating the tenancy or occupancy rights of the victim of such violence’’ before ‘‘and in the case’’. Subsec. (o)(7)(D). Pub. L. 113–4, § 601(b)(2)(D)(ii)(II), struck out before semicolon at end ‘‘; except that (i) criminal activity directly relating to domestic vio- lence, dating violence, or stalking, engaged in by a member of a tenant’s household or any guest or other person under the tenant’s control shall not be cause for termination of the tenancy or occupancy rights, if the tenant or immediate member of the tenant’s family is a victim of that domestic violence, dating violence, or stalking; (ii) LIMITATION.—Notwithstanding clause (i) or any Federal, State, or local law to the contrary, a public housing agency may terminate assistance to, or an owner or manager may bifurcate a lease under this section, or remove a household member from a lease under this section, without regard to whether a house- hold member is a signatory to a lease, in order to evict, remove, terminate occupancy rights, or terminate as- sistance to any individual who is a tenant or lawful oc- cupant and who engages in criminal acts of physical vi- olence against family members or others, without evicting, removing, terminating assistance to, or other- wise penalizing the victim of such violence who is also a tenant or lawful occupant. Such eviction, removal, termination of occupancy rights, or termination of as- sistance shall be effected in accordance with the proce- dures prescribed by Federal, State, and local law for the termination of leases or assistance under the rel- evant program of HUD-assisted housing. (iii) nothing in clause (i) may be construed to limit the authority of a public housing agency, owner, or manager, when noti- fied, to honor court orders addressing rights of access or control of the property, including civil protection orders issued to protect the victim and issued to ad- dress the distribution or possession of property among the household members in cases where a family breaks up; (iv) nothing in clause (i) limits any otherwise avail- able authority of an owner or manager to evict or the public housing agency to terminate assistance to a ten- ant for any violation of a lease not premised on the act or acts of violence in question against the tenant or a member of the tenant’s household, provided that the owner, manager, or public housing agency does not sub- ject an individual who is or has been a victim of domes- tic violence, dating violence, or stalking to a more de- manding standard than other tenants in determining whether to evict or terminate; (v) nothing in clause (i) may be construed to limit the authority of an owner or manager to evict, or the public housing agency to ter- Page 4608 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f minate assistance to any tenant if the owner, manager, or public housing agency can demonstrate an actual and imminent threat to other tenants or those em- ployed at or providing service to the property if that tenant is not evicted or terminated from assistance; and (vi) nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic violence, dating violence, or stalking.’’ Subsec. (o)(20). Pub. L. 113–4, § 601(b)(2)(D)(iii), struck out par. (20) which related to prohibited basis for termi- nation of assistance. Subsec. (ee). Pub. L. 113–4, § 601(b)(2)(E), struck out subsec. (ee) which related to certification that an indi- vidual is a victim of domestic violence, dating violence, or stalking and confidentiality of information provided to any owner, manager, or public housing agency. 2011—Subsec. (o)(18)(B)(iii). Pub. L. 111–372 inserted before period at end ‘‘, except that a family may be re- quired at the time the family initially receives such as- sistance 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.’’ 2009—Subsec. (o)(7)(C). Pub. L. 111–22, § 703(1), as amended by Pub. L. 115–174, § 304(a), (b), inserted before semicolon at end ‘‘and in the case of an owner who is an immediate successor in interest pursuant to fore- closure during the term of the lease vacating the prop- erty prior to sale shall not constitute other good cause, except that the owner may terminate the tenancy ef- fective 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.’’ Subsec. (o)(7)(F). Pub. L. 111–22, § 703(2), as amended by Pub. L. 115–174, § 304(a), (b), inserted at end ‘‘In the case of any foreclosure on any federally-related mort- gage loan (as that term is defined in section 2602 of title 12) 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 con- tract between the prior owner and the public housing agency for the occupied unit, except that this provision and the provisions related to foreclosure in subpara- graph (C) shall not shall not affect any State or local law that provides longer time periods or other addi- tional protections for tenants.’’ 2008—Subsec. (k). Pub. L. 110–246, § 4002(b)(1)(B), (2)(Y), substituted ‘‘Food and Nutrition Act of 2008’’ for ‘‘Food Stamp Act of 1977’’. Subsec. (o)(10)(F). Pub. L. 110–289, § 2835(a)(2), added subpar. (F). Subsec. (o)(13)(D)(i). Pub. L. 110–289, § 2835(a)(1)(A), substituted ‘‘any project’’ for ‘‘any building’’ and in- serted at end ‘‘For purposes of this subparagraph, the term ‘project’ means a single building, multiple contig- uous buildings, or multiple buildings on contiguous parcels of land.’’ Subsec. (o)(13)(F). Pub. L. 110–289, § 2835(a)(1)(B), sub- stituted ‘‘15 years’’ for ‘‘10 years’’. Subsec. (o)(13)(G). Pub. L. 110–289, § 2835(a)(1)(C), in- serted after first sentence ‘‘Such contract may, at the election of the public housing agency and the owner of the structure, specify that such contract shall be ex- tended for renewal terms of up to 15 years each, if the agency makes the determination required by this sub- paragraph and the owner is in compliance with the terms of the contract.’’ and inserted at end ‘‘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.’’ Subsec. (o)(13)(H). Pub. L. 110–289, § 2835(a)(1)(D), in- serted before period at end of first sentence ‘‘, except that in the case of a contract unit that has been allo- cated 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 estab- lished at the higher section 8 rent, subject only to para- graph (10)(A)’’. Subsec. (o)(13)(I)(i). Pub. L. 110–289, § 2835(a)(1)(E), in- serted before semicolon ‘‘, 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’’. Subsec. (o)(13)(L), (M). Pub. L. 110–289, § 2835(a)(1)(F), added subpars. (L) and (M). 2006—Subsec. (c)(9). Pub. L. 109–162, § 606(1), added par. (9). Subsec. (c)(9)(C)(ii). Pub. L. 109–271, § 5(e)(1), added cl. (ii) and struck out former cl. (ii) which read as follows: ‘‘Notwithstanding clause (i), an owner or manager may bifurcate a lease under this section, in order to evict, remove, or terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family mem- bers or others, without evicting, removing, terminating assistance to, or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant.’’ Subsec. (d)(1)(A). Pub. L. 109–271, § 5(d), amended sub- par. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘‘the selection of tenants shall be the function of the owner, subject to the annual contribu- tions contract between the Secretary and the agency, except that with respect to the certificate and mod- erate 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 1437c–1 of this title by the public housing agency and that an applicant or participant is or has been a victim of domestic violence, dating violence, or stalking is not an appropriate basis for denial of program assistance or for denial of admission if the applicant otherwise quali- fies for assistance or admission;’’. Pub. L. 109–162, § 606(2)(A), which directed insertion of ‘‘and that an applicant or participant is or has been a victim of domestic violence, dating violence, or stalk- ing is not an appropriate basis for denial of program as- sistance or for denial of admission if the applicant oth- erwise qualifies for assistance or admission’’ after ‘‘public housing agency’’, was executed by making the insertion after ‘‘public housing agency’’ the last place appearing to reflect the probable intent of Congress. Subsec. (d)(1)(B)(ii). Pub. L. 109–162, § 606(2)(B), in- serted ‘‘, and that an incident or incidents of actual or threatened domestic violence, dating violence, or stalk- ing will not be construed as a serious or repeated viola- tion of the lease by the victim or threatened victim of that violence and will not be good cause for termi- nating the tenancy or occupancy rights of the victim of such violence’’ before semicolon at end. Subsec. (d)(1)(B)(iii). Pub. L. 109–162, § 606(2)(C), in- serted before semicolon at end ‘‘, except that: (I) crimi- nal activity directly relating to domestic violence, dat- ing violence, or stalking, engaged in by a member of a tenant’s household or any guest or other person under the tenant’s control, shall not be cause for termination of the tenancy or occupancy rights or program assist- ance, if the tenant or immediate member of the ten- ant’s family is a victim of that domestic violence, dat- ing violence, or stalking; (II) notwithstanding sub- clause (I), a public housing agency may terminate as- sistance to any individual who is a tenant or lawful oc- cupant and who engages in criminal acts of physical vi- olence against family members or others, or an owner or manager under this section may bifurcate a lease, in order to evict, remove, or terminate assistance to any individual who is a tenant or lawful occupant and who Page 4609 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f engages in criminal acts of physical violence against family members or others, without evicting, removing, terminating assistance to, or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant; (III) nothing in subclause (I) may be con- strued to limit the authority of a public housing agen- cy, owner, or manager, when notified, to honor court orders addressing rights of access to or control of the property, including civil protection orders issued to protect the victim and issued to address the distribu- tion or possession of property among the household members in cases where a family breaks up; (IV) noth- ing in subclause (I) limits any otherwise available au- thority of an owner or manager to evict or the public housing agency to terminate assistance to a tenant for any violation of a lease not premised on the act or acts of violence in question against the tenant or a member of the tenant’s household, provided that the owner, manager, or public housing agency does not subject an individual who is or has been a victim of domestic vio- lence, dating violence, or stalking to a more demanding standard than other tenants in determining whether to evict or terminate; (V) nothing in subclause (I) may be construed to limit the authority of an owner or man- ager to evict, or the public housing agency to termi- nate assistance, to any tenant if the owner, manager, or public housing agency can demonstrate an actual and imminent threat to other tenants or those em- ployed at or providing service to the property if that tenant is not evicted or terminated from assistance; and (VI) nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic violence, dating violence, or stalking.’’ Subsec. (d)(1)(B)(iii)(II). Pub. L. 109–271, § 5(e)(2), added subcl. (II) and struck out former subcl. (II) which read as follows: ‘‘notwithstanding subclause (I), a pub- lic housing agency may terminate assistance to any in- dividual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others, or an owner or manager under this section may bifurcate a lease, in order to evict, remove, or terminate assistance to any indi- vidual who is a tenant or lawful occupant and who en- gages in criminal acts of physical violence against fam- ily members or others, without evicting, removing, ter- minating assistance to, or otherwise penalizing the vic- tim of such violence who is also a tenant or lawful oc- cupant;’’. Subsec. (f)(8). Pub. L. 109–162, § 606(3), added par. (8). Subsec. (f)(9). Pub. L. 109–271, § 5(e)(3)(A), struck out ‘‘and’’ after semicolon at end. Pub. L. 109–162, § 606(3), added par. (9). Subsec. (f)(10). Pub. L. 109–162, § 606(3), added par. (10). Subsec. (f)(10)(A)(i). Pub. L. 109–271, § 5(e)(3)(B), sub- stituted ‘‘or’’ for ‘‘and’’ at end. Subsec. (f)(11). Pub. L. 109–162, § 606(3), added par. (11). Subsec. (f)(11)(B). Pub. L. 109–271, § 5(e)(3)(C), sub- stituted ‘‘blood or marriage’’ for ‘‘blood and marriage’’. Subsec. (o)(6)(B). Pub. L. 109–271, § 5(e)(4)(A)(iii), which directed the substitution of ‘‘admission. Noth- ing’’ for ‘‘admission, and that nothing’’ in second sen- tence, was executed by making the substitution in third sentence, to reflect the probable intent of Con- gress. Pub. L. 109–271, § 5(e)(4)(A)(ii), which directed the sub- stitution of ‘‘for admission or’’ for ‘‘for admission for’’ in second sentence, was executed by substituting ‘‘for assistance or’’ for ‘‘for assistance for’’ in third sen- tence, to reflect the probable intent of Congress. Pub. L. 109–271, § 5(e)(4)(A)(i), which directed amend- ment of second sentence of subpar. (B) by striking ‘‘by’’ after ‘‘denial of program assistance’’, was executed by striking that language in third sentence, to reflect the probable intent of Congress. Pub. L. 109–162, § 606(4)(A), inserted ‘‘That an appli- cant or participant is or has been a victim of domestic violence, dating violence, or stalking is not an appro- priate basis for denial of program assistance by or for denial of admission if the applicant otherwise qualifies for assistance for admission, and that nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic vi- olence, dating violence, or stalking.’’ at end. Subsec. (o)(7)(C). Pub. L. 109–162, § 606(4)(B), inserted ‘‘, and that an incident or incidents of actual or threat- ened domestic violence, dating violence, or stalking shall not be construed as a serious or repeated viola- tion of the lease by the victim or threatened victim of that violence and shall not be good cause for termi- nating the tenancy or occupancy rights of the victim of such violence’’ before semicolon at end. Subsec. (o)(7)(D). Pub. L. 109–162, § 606(4)(C), inserted at end ‘‘; except that (i) criminal activity directly re- lating to domestic violence, dating violence, or stalk- ing, engaged in by a member of a tenant’s household or any guest or other person under the tenant’s control shall not be cause for termination of the tenancy or oc- cupancy rights, if the tenant or immediate member of the tenant’s family is a victim of that domestic vio- lence, dating violence, or stalking; (ii) notwithstanding clause (i), a public housing agency may terminate as- sistance to any individual who is a tenant or lawful oc- cupant and who engages in criminal acts of physical vi- olence against family members or others, or an owner or manager may bifurcate a lease under this section, in order to evict, remove, or terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others, without evicting, removing, terminating assistance to, or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant; (iii) nothing in clause (i) may be construed to limit the authority of a public housing agency, owner, or manager, when notified, to honor court orders ad- dressing rights of access to control of the property, in- cluding civil protection orders issued to protect the victim and issued to address the distribution or posses- sion of property among the household members in cases where a family breaks up; (iv) nothing in clause (i) lim- its any otherwise available authority of an owner or manager to evict or the public housing agency to ter- minate assistance to a tenant for any violation of a lease not premised on the act or acts of violence in question against the tenant or a member of the ten- ant’s household, provided that the owner, manager, or public housing agency does not subject an individual who is or has been a victim of domestic violence, dating violence, or stalking to a more demanding standard than other tenants in determining whether to evict or terminate; (v) nothing in clause (i) may be construed to limit the authority of an owner or manager to evict, or the public housing agency to terminate, assistance to any tenant if the owner, manager, or public housing agency can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the property if that tenant is not evicted or terminated from assistance; and (vi) nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic vi- olence, dating violence, or stalking.’’ Subsec. (o)(7)(D)(ii). Pub. L. 109–271, § 5(e)(4)(B)(i), added cl. (ii) and struck out former cl. (ii) which read as follows: ‘‘notwithstanding clause (i), a public hous- ing agency may terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family mem- bers or others, or an owner or manager may bifurcate a lease under this section, in order to evict, remove, or terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others, without evicting, removing, terminating assistance to, or otherwise penalizing the victim of such violence who is also a tenant or lawful occupant;’’. Subsec. (o)(7)(D)(iii). Pub. L. 109–271, § 5(e)(4)(B)(ii), substituted ‘‘access or control’’ for ‘‘access to control’’. Page 4610 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f Subsec. (o)(7)(D)(v). Pub. L. 109–271, § 5(e)(4)(B)(iii), substituted ‘‘terminate’’ for ‘‘terminate,’’. Subsec. (o)(19)(B). Pub. L. 109–461 reenacted heading without change and amended text generally, sub- stituting cls. (i) to (v) relating to amounts necessary to provide vouchers for rental assistance for fiscal years 2007 to 2011 for former cls. (i) through (iv) relating to amounts necessary to provide vouchers for rental as- sistance for fiscal years 2003 to 2006. Subsec. (o)(20). Pub. L. 109–162, § 606(4)(D), added par. (20). Subsec. (o)(20)(D)(ii). Pub. L. 109–271, § 5(e)(4)(C), sub- stituted ‘‘distribution or’’ for ‘‘distribution’’. Subsec. (r)(5). Pub. L. 109–162, § 606(5), inserted ‘‘, 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 fam- ily has complied with all other obligations of the sec- tion 8 program and has moved out of the assisted dwell- ing unit in order to protect the health or safety of an individual who is or has been the victim of domestic vi- olence, 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 as- sisted dwelling unit’’ before period at end. Subsec. (ee). Pub. L. 109–162, § 606(6), added subsec. (ee). Subsec. (ee)(1)(A). Pub. L. 109–271, § 5(e)(5)(A), sub- stituted ‘‘the individual receives a request for such cer- tification from the owner, manager, or public housing agency’’ for ‘‘the owner, manager, or public housing agency requests such certification’’. Subsec. (ee)(1)(B). Pub. L. 109–271, § 5(e)(5)(B), sub- stituted ‘‘the individual has received a request in writ- ing for such certification for the owner, manager, or public housing agency’’ for ‘‘the owner, manager, pub- lic housing agency, or assisted housing provider has re- quested such certification in writing’’ and ‘‘The owner, manager or public housing’’ for ‘‘The owner, manager, public housing’’ and struck out ‘‘, or assisted housing provider’’ before ‘‘may extend the 14-day deadline’’. Subsec. (ee)(1)(C)(i). Pub. L. 109–271, § 5(e)(5)(C), struck out ‘‘sexual assault,’’ after ‘‘addressing domes- tic violence, dating violence,’’. Subsec. (ee)(1)(D). Pub. L. 109–271, § 5(e)(5)(D), struck out ‘‘sexual assault,’’ after ‘‘dating violence,’’. Subsec. (ee)(1)(E). Pub. L. 109–271, § 5(e)(5)(E)(ii), struck out ‘‘, or assisted housing provider’’ in two places after ‘‘public housing agency’’. Pub. L. 109–271, § 5(e)(5)(E)(i), which directed the sub- stitution of ‘‘manager or public housing’’ for ‘‘manager, public housing’’ wherever appearing, was executed by making the substitution for ‘‘manager, public housing’’ and ‘‘manger, public housing’’, to reflect the probable intent of Congress. 2002—Subsec. (t)(2). Pub. L. 107–116 inserted ‘‘(includ- ing any such mortgage prepayment during fiscal year 1996 or a fiscal year thereafter or any insurance con- tract voluntary termination during fiscal year 1996 or a fiscal year thereafter)’’ after ‘‘insurance contract for the mortgage for such housing project’’. 2001—Subsec. (o)(19). Pub. L. 107–95 added par. (19). 2000—Subsec. (o)(13). Pub. L. 106–377, § 1(a)(1) [title II, § 232(a)], reenacted heading without change and amend- ed text generally, substituting subpars. (A) to (K) pro- viding for funding percentage limitation, consistency of contracts with public housing agency plan and goals, income mixing requirement, resident choice require- ment, contract term and its extension, rent calculation and adjustments, tenant selection, and vacated units for former subpars. (A) to (D) providing for extension of contract term, rent calculation, and adjusted rents. Subsec. (t)(1)(B). Pub. L. 106–569, § 903(a), inserted be- fore semicolon at end ‘‘, except that a limit shall not be considered reasonable for purposes of this subpara- graph if it adversely affects such assisted families’’. Pub. L. 106–377, § 1(a)(1) [title II, § 205], inserted ‘‘and any other reasonable limit prescribed by the Sec- retary’’ before semicolon at end. Pub. L. 106–246, which directed the substitution of ‘‘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,’’ for ‘‘during any period that the assisted family continues residing in the same project in which the family was residing on the date of the eligibility event for the project, if’’ in section 538 of Pub. L. 106–74, was executed by making the substitution in subsec. (t)(1)(B) of this section, which was enacted by section 538 of Pub. L. 106–74, to reflect the probable intent of Congress. Subsec. (t)(2). Pub. L. 106–569, § 902(a), substituted ‘‘fiscal year 1994’’ for ‘‘fiscal year 1996’’. Pub. L. 106–377, § 1(a)(1) [title II, § 228], inserted ‘‘(in- cluding any such termination or expiration during fis- cal years after fiscal year 1996 prior to the effective date of the Departments of Veterans Affairs and Hous- ing and Urban Development, and Independent Agencies Appropriations Act, 2001)’’ after ‘‘contract for rental assistance under this section for such housing project’’. Subsec. (x)(2). Pub. L. 106–377, § 1(a)(1) [title II, § 234], substituted ‘‘(A) any family (i) who is otherwise eligi- ble for such assistance, and (ii)’’ for ‘‘any family (A) who is otherwise eligible for such assistance, and (B)’’ and inserted before period at end ‘‘and (B) for a period not to exceed 18 months, otherwise eligible youths who have attained at least 18 years of age and not more than 21 years of age and who have left foster care at age 16 or older’’. Subsec. (y)(7), (8). Pub. L. 106–569, § 301(a), added par. (7) and redesignated former par. (7) as (8). 1999—Subsec. (c)(8)(A). Pub. L. 106–74, § 535(1), sub- stituted ‘‘termination of’’ for ‘‘terminating’’ after ‘‘Not less than one year before’’ and ‘‘. 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, ena- bling them to choose the place they wish to rent, which is likely to include the dwelling unit in which they cur- rently 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.’’ for ‘‘, specifying the reasons for the termination with suf- ficient detail to enable the Secretary to evaluate whether the termination is lawful and whether there are additional actions that can be taken by the Sec- retary to avoid the termination. The owner’s notice shall include a statement that the owner and the Sec- retary may agree to a renewal of the contract, thus avoiding the termination.’’ Subsec. (c)(8)(B). Pub. L. 106–74, § 535(2), (4), redesig- nated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: ‘‘In the case of owner who has requested that the Secretary renew the contract, the owner’s notice under subparagraph (A) to the ten- ants shall include statements that— ‘‘(i) the owner currently has a contract with the De- partment of Housing and Urban Development that pays the Government’s share of the tenant’s rent and the date on which the contract will expire; ‘‘(ii) the owner intends to renew the contract for another year; ‘‘(iii) renewal of the contract may depend upon the Congress making funds available for such renewal; ‘‘(iv) the owner is required by law to notify tenants of the possibility that the contract may not be re- newed if Congress does not provide funding for such renewals; ‘‘(v) in the event of nonrenewal, the Department of Housing and Urban Development will provide tenant- based rental assistance to all eligible residents, ena- bling them to choose the place they wish to rent; and ‘‘(vi) the notice itself does not indicate an intent to terminate the contract by either the owner or the De- partment of Housing and Urban Development, pro- vided there is Congressional approval of funding availability.’’ Page 4611 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f Subsec. (c)(8)(C). Pub. L. 106–74, § 535(4), redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B). Pub. L. 106–74, § 535(3), struck out ‘‘Notwithstanding the preceding provisions of this paragraph, if the owner agrees to a 5-year contract renewal offered by the Sec- retary, payments under which shall be subject to the availability of appropriations for any year, the owner shall provide a written notice to the Secretary and the tenants not less than 180 days before the termination of such contract.’’ after ‘‘(C)’’ and ‘‘in the immediately preceding sentence’’ before ‘‘, the owner may not evict the tenants’’, struck out ‘‘180-day’’ before ‘‘notice’’ in two places, and substituted ‘‘1 year has elapsed’’ for ‘‘such period has elapsed’’ and ‘‘1 year of advance no- tice’’ for ‘‘180 days of advance notice’’. Subsec. (c)(8)(D), (E). Pub. L. 106–74, § 535(4), redesig- nated subpars. (D) and (E) as (C) and (D), respectively. Subsec. (o)(18). Pub. L. 106–74, § 523(a), added par. (18). Subsec. (t). Pub. L. 106–74, § 538(a), added subsec. (t). Subsec. (v). Pub. L. 106–74, § 531(d)(1), designated sen- tence enacted by Pub. L. 104–99, § 405(c), as subsec. (v). Subsec. (w). Pub. L. 106–74, § 531(d)(2), struck out heading and text of subsec. (w). Text read as follows: ‘‘Not later than 30 days after the beginning of each fis- cal year, the Secretary shall publish in the Federal Register a plan for reducing, to the extent feasible, year-to-year fluctuations in the levels of budget au- thority that will be required over the succeeding 5-year period to renew expiring rental assistance contracts en- tered into under this section since August 22, 1974. To the extent necessary to carry out such plan and to the extent approved in appropriations Acts, the Secretary is authorized to enter into annual contributions con- tracts with terms of less than 60 months.’’ Subsec. (z)(1). Pub. L. 106–74, § 223(1), in introductory provisions, inserted ‘‘expiration or’’ after ‘‘on account of’’ and struck out ‘‘(other than a contract for tenant- based assistance)’’ after ‘‘payments contract’’. Subsec. (z)(3). Pub. L. 106–74, § 223(2), struck out head- ing and text of par. (3). Text read as follows: ‘‘This sub- section shall be effective for actions initiated by the Secretary on or before September 30, 1995.’’ 1998—Subsec. (a). Pub. L. 105–276, § 550(a)(1), struck out at end ‘‘A public housing agency may contract to make assistance payments to itself (or any agency or instrumentality thereof) as the owner of dwelling units if such agency is subject to the same program require- ments as are applied to other owners. In such cases, the Secretary may establish initial rents within applicable limits.’’ Subsec. (b). Pub. L. 105–276, § 550(a)(2), substituted ‘‘Other’’ for ‘‘Rental certificates and other’’ in subsec. heading, inserted par. (1) designation and heading, and struck out after first sentence ‘‘The Secretary shall enter into a separate annual contributions contract with each public housing agency to obligate the au- thority approved each year, beginning with the author- ity approved in appropriations Acts for fiscal year 1988 (other than amendment authority to increase assist- ance payments being made using authority approved prior to the appropriations Acts for fiscal year 1988), and such annual contributions contract (other than for annual contributions under subsection (o) of this sec- tion) shall bind the Secretary to make such authority, and any amendments increasing such authority, avail- able to the public housing agency for a specified pe- riod.’’ Subsec. (c)(3). Pub. L. 105–276, § 550(a)(3)(A), struck out ‘‘(A)’’ after par. designation, and struck out subpar. (B), which authorized payment of higher percentage of income as rent than that specified under section 1437a(a) of this title if family receiving tenant-based rental assistance notified public housing agency of its interest in a unit renting for an excess rent and agency determined that the rent was reasonable, and set forth provisions which limited agency approval of such ex- cess rentals to 10 percent of annual allocation, required report to Secretary where such rentals exceeded 5 per- cent of allocation, and required Secretary to report to Congress annually on agencies which had submitted such reports and include recommendations deemed ap- propriate to correct problems identified in reports. Subsec. (c)(4). Pub. L. 105–276, § 550(a)(3)(B), struck out ‘‘or by a family that qualifies to receive assistance under subsection (b) of this section pursuant to section 223 or 226 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990’’ after ‘‘such dwelling unit’’ in first sentence. Subsec. (c)(5), (6). Pub. L. 105–276, § 550(a)(3)(C), (D), redesignated par. (6) as (5) and struck out former par. (5) which read as follows: ‘‘Assistance payments may be made with respect to up to 100 per centum of the dwell- ing units in any structure upon the application of the owner or prospective owner. Within the category of projects containing more than fifty units and designed for use primarily by nonelderly and nonhandicapped persons which are not subject to mortgages purchased under section 305 of the National Housing Act, the Sec- retary may give preference to applications for assist- ance involving not more than 20 per centum of the dwelling units in a project. In according any such pref- erence, the Secretary shall compare applications re- ceived during distinct time periods not exceeding sixty days in duration.’’ Subsec. (c)(7). Pub. L. 105–276, § 550(a)(3)(C), struck out par. (7) which read as follows: ‘‘To the extent author- ized in contracts entered into by the Secretary with a public housing agency, such agency may purchase any structure containing one or more dwelling units as- sisted under this section for the purpose of reselling the structure to the tenant or tenants occupying units ag- gregating in value at least 80 per centum of the struc- ture’s total value. Any such resale may be made on the terms and conditions prescribed under section 1437c(h) of this title and subject to the limitation contained in such section.’’ Subsec. (c)(8). Pub. L. 105–276, § 549(b), redesignated par. (9) as (8)(A) and substituted subpars. (B) to (E) for ‘‘The Secretary shall review the owner’s notice, shall consider whether there are additional actions that can be taken by the Secretary to avoid the termination, and shall ensure a proper adjustment of the contract rents for the project in conformity with the require- ments of paragraph (2). The Secretary shall issue a written finding of the legality of the termination and the reasons for the termination, including the actions considered or taken to avoid the termination. Within 30 days of the Secretary’s finding, the owner shall provide written notice to each tenant of the Secretary’s deci- sion. For purposes of this paragraph, the term ‘termi- nation’ 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 con- tract for business reasons.’’ Pub. L. 105–276, § 549(a)(1)(A), struck out par. (8) which read as follows: ‘‘Each contract under this section shall provide that the owner will notify tenants at least 90 days prior to the expiration of the contract of any rent increase which may occur as a result of the expiration of such contract.’’ Subsec. (c)(9). Pub. L. 105–276, § 549(b)(1), redesignated par. (9) as (8)(A). Pub. L. 105–276, § 549(a)(1)(B), substituted ‘‘Not less than one year before terminating any contract under which assistance payments are received under this sec- tion, other than a contract for tenant-based assistance under this section, an owner shall provide written no- tice to the Secretary and the tenants involved of the proposed termination, specifying the reasons for the termination with sufficient detail to enable the Sec- retary to evaluate whether the termination is lawful and whether there are additional actions that can be taken by the Secretary to avoid the termination.’’ for ‘‘Not less than 180 days prior to terminating any con- tract under which assistance payments are received under this section (but not less than 90 days in the case of housing certificates or vouchers under subsection (b) or (o) of this section), an owner shall provide written notice to the Secretary and the tenants involved of the proposed termination, specifying the reasons for the Page 4612 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f termination with sufficient detail to enable the Sec- retary to evaluate whether the termination is lawful and whether there are additional actions that can be taken by the Secretary to avoid the termination.’’ Subsec. (c)(10). Pub. L. 105–276, § 549(a)(1)(A), struck out par. (10) which read as follows: ‘‘If an owner pro- vides notice of proposed termination under paragraph (9) and the contract rent is lower than the maximum monthly rent for units assisted under subsection (b)(1) of this section, the Secretary shall adjust the contract rent based on the maximum monthly rent for units as- sisted under subsection (b)(1) of this section and the value of the low-income housing after rehabilitation.’’ Subsec. (d)(1)(A). Pub. L. 105–276, § 514(b)(1), amended subpar. (A) generally. For former text of subpar. (A), see 1996 Amendment note below. Subsec. (d)(1)(B)(ii). Pub. L. 105–276, § 549(a)(2)(A), sub- stituted ‘‘during the term of the lease, the owner’’ for ‘‘the owner’’. Subsec. (d)(1)(B)(iii). Pub. L. 105–276, § 549(a)(2)(B), substituted ‘‘during the term of the lease, any criminal activity’’ for ‘‘provide that any criminal activity’’. Subsec. (d)(2)(A). Pub. L. 105–276, § 550(a)(4)(A), struck out at end ‘‘Where the Secretary enters into an annual contributions contract with a public housing agency pursuant to which the agency will enter into a contract for assistance payments with respect to an existing structure, the contract for assistance payments may not be attached to the structure unless (i) the Sec- retary and the public housing agency approve such ac- tion, and (ii) the owner agrees to rehabilitate the struc- ture other than with assistance under this chapter and otherwise complies with the requirements of this sec- tion, except that the Secretary shall permit the public housing agency to approve such attachment with re- spect to not more than 15 percent of the assistance pro- vided by the public housing agency if the requirements of clause (ii) are met. Notwithstanding any other provi- sion of this section, a public housing agency and an ap- plicable State agency may, on a priority basis, attach to structures not more than an additional 15 percent of the assistance provided by the public housing agency or the applicable State agency only with respect to projects assisted under a State program that permits the owner of the projects to prepay a State assisted or subsidized mortgage on the structure, except that at- tachment of assistance under this sentence shall be for the purpose of (i) providing incentives to owners to pre- serve such projects for occupancy by lower and mod- erate income families (for the period that assistance under this sentence is available), and (ii) to assist lower income tenants to afford any increases in rent that may be required to induce the owner to maintain occu- pancy in the project by lower and moderate income tenants. Any assistance provided to lower income ten- ants under the preceding sentence shall not be consid- ered for purposes of the limitation under paragraph (1)(A) regarding the percentage of families that may re- ceive assistance under this section who do not qualify for preferences under such paragraph.’’ Subsec. (d)(2)(B) to (G). Pub. L. 105–276, § 550(a)(4)(C), redesignated subpars. (F) to (H) as (B) to (D), respec- tively, and struck out former subpars. (B) to (E). Prior to repeal, former subpar. (B) required the Secretary to permit a public housing agency to approve attachment of assistance with respect to any newly constructed structure if certain conditions were met, former sub- par. (C) required a public housing agency to enter into a contract with an owner of a structure to which a con- tract for assistance was attached under this par. to pro- vide for renewal of expiring assistance payment con- tracts, former subpar. (D) required owners of structures to which a contract for assistance was attached to adopt certain tenant selection procedures, and former subpar. (E) required the Secretary to annually survey public housing agencies to determine which have reached certain limitations in providing assistance and to report the survey results to Congress. Subsec. (d)(2)(H). Pub. L. 105–276, § 550(a)(4)(C), redes- ignated subpar. (H) as (D). Pub. L. 105–276, § 550(a)(4)(B), substituted ‘‘An owner’’ for ‘‘Notwithstanding subsection (d)(1)(A)(i) of this sec- tion, an owner’’. Subsec. (d)(6). Pub. L. 105–276, § 552, added par. (6). Subsec. (f)(6). Pub. L. 105–276, § 545(b), inserted ‘‘or (o)(13)’’ after ‘‘(d)(2)’’. Subsec. (f)(7). Pub. L. 105–276, § 550(a)(5), struck out ‘‘(b) or’’ after ‘‘under subsection’’ and inserted before period at end ‘‘and that provides for the eligible family to select suitable housing and to move to other suitable housing’’. Subsec. (h). Pub. L. 105–276, § 565(c), which directed in- sertion of ‘‘(except as provided in section 1437d(j)(3) of this title)’’ after ‘‘section 1437d of this title’’, was exe- cuted by making the insertion after ‘‘Sections 1437c(e) and 1437d of this title’’, to reflect the probable intent of Congress. Subsec. (j). Pub. L. 105–276, § 550(a)(6), struck out sub- sec. (j), which authorized contracts for making rental assistance payments on behalf of low-income families utilizing manufactured homes as principal places of residence, directed that contract establish maximum monthly rent permitted with respect to home and real property on which it was located and provided formula for calculating amount of monthly assistance, provided for adjustments, set forth minimum and maximum terms, in the case of substantially rehabilitated or newly constructed park, provided limit on principal amount of mortgage attributable to rental spaces with- in park, and authorized Secretary to prescribe other terms and conditions necessary for purpose of carrying out subsection. Subsec. (n). Pub. L. 105–276, § 550(a)(7), struck out sub- sec. (n) which read as follows: ‘‘In making assistance available under subsections (b)(1) and (e)(2) of this sec- tion, the Secretary may provide assistance with respect to residential properties in which some or all of the dwelling units do not contain bathroom or kitchen fa- cilities, if— ‘‘(1) the property is located in an area in which there is a significant demand for such units, as deter- mined by the Secretary; ‘‘(2) the unit of general local government in which the property is located and the local public housing agency approve of such units being utilized for such purpose; and ‘‘(3) in the case of assistance under subsection (b)(1) of this section, the unit of general local government in which the property is located and the local public housing agency certify to the Secretary that the property complies with local health and safety stand- ards. The Secretary may waive, in appropriate cases, the limitation and preference described in the second and third sentences of section 1437a(b)(3) of this title with respect to the assistance made available under this sub- section.’’ Subsec. (o). Pub. L. 105–276, § 545(a), amended subsec. (o) generally. Prior to amendment, subsec. (o) con- tained provisions relating to assistance using a pay- ment standard based upon fair market rental, cat- egories of families eligible for assistance and pref- erences, contracts with public housing agencies for an- nual contributions, annual adjustments of assistance payment amounts, assistance with respect to certain cooperative and mutual housing, contracts to provide rental vouchers, set asides of budget authority for an adjustment pool, reasonable rent requirements and dis- approval of leases with unreasonable rents, and assist- ance on behalf of families utilizing manufactured homes as principal places of residence. Subsec. (o)(2). Pub. L. 105–276, § 209(a), inserted at end ‘‘Notwithstanding the preceding sentence, for families being admitted to the voucher program who remain in the same unit or complex, where the rent (including the amount allowed for utilities) does not exceed the payment standard, the monthly assistance payment for any family shall be the amount by which such rent ex- ceeds the greater of 30 percent of the family’s monthly adjusted income or 10 percent of the family’s monthly Page 4613 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f income.’’ Notwithstanding sections 209(b) and 503 of Pub. L. 105–276, set out as Effective Date of 1998 Amend- ment notes below and under section 1437 of this title, this amendment was executed before the amendment by section 545(a) of Pub. L. 105–276 to reflect the prob- able intent of Congress and the provisions of section 545(c) of Pub. L. 105–276, set out as an Effective Date of 1998 Amendment note below, and section 559 of Pub. L. 105–276, set out as a Regulations note below. Subsec. (q). Pub. L. 105–276, § 547, amended subsec. (q) generally, substituting present provisions for provi- sions which authorized establishment of fee for costs incurred in administering certificate and housing voucher programs under subsecs. (b) and (o) of this sec- tion, costs of preliminary expenses in connection with new allocations of assistance, costs incurred in assist- ing families who experienced difficulty in obtaining ap- propriate housing under the programs, and extraor- dinary costs; provisions which set forth use of fees for employing one or more service coordinators to coordi- nate provision of supportive services for elderly or dis- abled families on whose behalf assistance was provided; and provision which limited establishment or increase of fees to amounts provided in appropriation Acts. Subsec. (r). Pub. L. 105–276, § 553(3), inserted heading, added par. (1), and struck out former par. (1) which read as follows: ‘‘Any family assisted under subsection (b) or (o) of this section may receive such assistance to rent an eligible dwelling unit if the dwelling unit to which the family moves is within the same State, or the same or a contiguous metropolitan statistical area as the metropolitan statistical area within which is located the area of jurisdiction of the public housing agency approving such assistance; except that any family not living within the jurisdiction of a public housing agen- cy at the time that such family applies for assistance from such agency shall, during the 12-month period be- ginning upon the receipt of any tenant-based rental as- sistance made available on behalf of the family, use such assistance to rent an eligible dwelling unit lo- cated within the jurisdiction served by such public housing agency.’’ Subsec. (r)(2). Pub. L. 105–276, § 553(1), struck out at end ‘‘If no public housing agency has authority with re- spect to the dwelling unit to which a family moves under this subsection, the public housing agency ap- proving the assistance shall have such responsibility.’’ Subsec. (r)(3). Pub. L. 105–276, § 553(2), struck out ‘‘(b) or’’ before ‘‘(o) for’’ and inserted at end ‘‘The Secretary shall establish procedures for the compensation of pub- lic housing agencies that issue vouchers to families that move into or out of the jurisdiction of the public housing agency under portability procedures. The Sec- retary may reserve amounts available for assistance under subsection (o) to compensate those public hous- ing agencies.’’ Subsec. (r)(5). Pub. L. 105–276, § 553(5), added par. (5). Subsec. (t). Pub. L. 105–276, § 554, struck out subsec. (t). For text, see 1996 Amendment note below. Subsec. (u). Pub. L. 105–276, § 550(a)(8), in pars. (1) and (3), struck out ‘‘certificates or’’ before ‘‘vouchers’’ and, in par. (2), struck out ‘‘, certificates’’ before ‘‘or vouch- ers’’. Subsec. (x)(2). Pub. L. 105–276, § 550(a)(9), substituted ‘‘tenant-based assistance’’ for ‘‘housing certificate as- sistance’’. Subsec. (y)(1). Pub. L. 105–276, § 555(a)(1)(A), in intro- ductory provisions, substituted ‘‘A public housing agency providing tenant-based assistance on behalf of an eligible family under this section may provide as- sistance for an eligible family that purchases a dwell- ing unit (including a unit under a lease-purchase agree- ment) that will be owned by 1 or more members of the family, and will be occupied by the family, if the fam- ily’’ for ‘‘A family receiving tenant-based assistance under this section may receive assistance for occu- pancy of a dwelling owned by one or more members of the family if the family’’. Subsec. (y)(1)(A). Pub. L. 105–276, § 555(a)(1)(B), in- serted ‘‘, or owns or is acquiring shares in a coopera- tive’’ before semicolon at end. Subsec. (y)(1)(B). Pub. L. 105–276, § 555(a)(1)(C), struck out cl. (i), redesignated cl. (ii) as entire subpar., and in- serted ‘‘, except that the Secretary may provide for the consideration of public assistance in the case of an el- derly family or a disabled family’’ after ‘‘public assist- ance’’. Prior to amendment, cl. (i) read as follows: ‘‘par- ticipates in the family self-sufficiency program under section 1437u of this title of the public housing agency providing the assistance; or’’. Subsec. (y)(2). Pub. L. 105–276, § 555(a)(2), added par. (2) and struck out heading and text of former par. (2). Text read as follows: ‘‘(A) IN GENERAL.—Notwithstanding any other provi- sions of this section governing determination of the amount of assistance payments under this section on behalf of a family, the monthly assistance payment for any family assisted under this subsection shall be the amount by which the fair market rental for the area es- tablished under subsection (c)(1) of this section exceeds 30 percent of the family’s monthly adjusted income; ex- cept that the monthly assistance payment shall not ex- ceed the amount by which the monthly homeownership expenses, as determined in accordance with require- ments established by the Secretary, exceeds 10 percent of the family’s monthly income. ‘‘(B) EXCLUSION OF EQUITY FROM INCOME.—For pur- poses of determining the monthly assistance payment for a family, the Secretary shall not include in family income an amount imputed from the equity of the fam- ily in a dwelling occupied by the family with assistance under this subsection.’’ Subsec. (y)(3), (4). Pub. L. 105–276, § 555(a)(3), added pars. (3) and (4) and struck out former pars. (3) and (4) which read as follows: ‘‘(3) RECAPTURE OF CERTAIN AMOUNTS.—Upon sale of the dwelling by the family, the Secretary shall recap- ture from any net proceeds the amount of additional assistance (as determined in accordance with require- ments established by the Secretary) paid to or on be- half of the eligible family as a result of paragraph (2)(B). ‘‘(4) DOWNPAYMENT REQUIREMENT.—Each public hous- ing agency providing assistance under this subsection shall ensure that each family assisted shall provide from its own resources not less than 80 percent of any downpayment in connection with a loan made for the purchase of a dwelling. Such resources may include amounts from any escrow account for the family estab- lished under section 1437u(d) of this title. Not more than 20 percent of the downpayment may be provided from other sources, such as from nonprofit entities and programs of States and units of general local govern- ment.’’ Subsec. (y)(5). Pub. L. 105–276, § 555(a)(3), (4), redesig- nated par. (6) as (5) and struck out heading and text of former par. (5). Text read as follows: ‘‘A family may not receive assistance under this subsection during any pe- riod when assistance is being provided for the family under other Federal homeownership assistance pro- grams, as determined by the Secretary, including as- sistance under the HOME Investment Partnerships Act, the Homeownership and Opportunity Through HOPE Act, title II of the Housing and Community Develop- ment Act of 1987, and section 1472 of this title.’’ Subsec. (y)(6) to (8). Pub. L. 105–276, § 555(a)(4), redes- ignated pars. (7) and (8) as (6) and (7), respectively. Former par. (6) redesignated (5). Subsec. (z). Pub. L. 105–276, § 548(1), made technical amendment relating to placement of subsection. Subsec. (cc). Pub. L. 105–276, § 548(2), added subsec. (cc). Subsec. (dd). Pub. L. 105–276, § 556(a), added subsec. (dd). 1997—Subsec. (c)(2)(A). Pub. L. 105–65, §§ 201(c), 205, substituted ‘‘fiscal years 1997 and 1998’’ for ‘‘fiscal year 1997’’ in third and sixth sentences and inserted at end ‘‘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 Page 4614 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f foregoing sentence shall be effective only during fiscal year 1998.’’ Pub. L. 105–33, §§ 2003, 2004, inserted ‘‘, and during fis- cal year 1999 and thereafter’’ before period at end of third and sixth sentences. Subsec. (c)(9). Pub. L. 105–18, which directed substi- tution of ‘‘Not less than 180 days prior to terminating any contract’’ for ‘‘Not less than one year prior to ter- minating any contract’’, was executed by making the substitution for ‘‘Not less than 1 year prior to termi- nating any contract’’ to reflect the probable intent of Congress. Subsec. (d)(5). Pub. L. 105–65, § 523(a), added par. (5). Subsec. (bb). Pub. L. 105–65, § 523(c), inserted heading, designated existing provisions as par. (1) and former subsec. heading as par. (1) heading, and added par. (2). 1996—Subsec. (c)(2)(A). Pub. L. 104–204 inserted ‘‘, fiscal year 1996 prior to April 26, 1996, and fiscal year 1997’’ after ‘‘fiscal year 1995’’ in two places, substituted ‘‘Except for assistance under the certificate program, for’’ for ‘‘For’’, inserted after fourth sentence ‘‘In the case of assistance under the certificate program, 0.01 shall be subtracted from the amount of the annual ad- justment factor (except that the factor shall not be re- duced 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.’’, and substituted ‘‘The immediately foregoing two sen- tences’’ for ‘‘The immediately foregoing sentence’’. Subsec. (c)(8). Pub. L. 104–134, § 101(e) [title II, § 203(b)(1), (d)], temporarily inserted ‘‘(other than a con- tract for assistance under the certificate or voucher program)’’ after ‘‘section’’. See Effective and Termi- nation Dates of 1996 Amendments note below. Subsec. (c)(9). Pub. L. 104–134, § 101(e) [title II, § 203(b)(2), (d)], temporarily substituted ‘‘, other than a contract under the certificate or voucher program’’ for ‘‘(but not less than 90 days in the case of housing cer- tificates or vouchers under subsection (b) or (o) of this section)’’. See Effective and Termination Dates of 1996 Amendments note below. Subsec. (d)(1)(A). Pub. L. 104–99, § 402(d)(2), (f), tempo- rarily amended subpar. (A) generally, substituting ‘‘the selection of tenants shall be the function of the owner, subject to the provisions of the annual contributions contract between the Secretary and the agency, except that for the certificate and moderate rehabilitation programs only, for the purpose of selecting families to be assisted, the public housing agency may establish, after public notice and an opportunity for public com- ment, a written system of preferences for selection that is not inconsistent with the comprehensive housing af- fordability strategy under title I of the Cranston-Gon- zalez National Affordable Housing Act;’’ for ‘‘the selec- tion of tenants for such units shall be the function of the owner, subject to the provisions of the annual con- tributions contract between the Secretary and the agency, except that the tenant selection criteria used by the owner shall— ‘‘(i) for not less than (I) 70 percent of the families who initially receive assistance in any 1-year period in the case of assistance attached to a structure and (II) 90 percent of such families in the case of assist- ance not attached to a structure, give preference to families that occupy substandard housing (including families that are homeless or living in a shelter for homeless families), are paying more than 50 percent of family income for rent, or are involuntarily dis- placed (including displacement because of disposition of a multifamily housing project under section 1701z–11 of title 12) at the time they are seeking as- sistance under this section; except that any family otherwise eligible for assistance under this section may not be denied preference for assistance not at- tached to a structure (or delayed or otherwise ad- versely affected in the provision of such assistance) solely because the family resides in public housing; ‘‘(ii) for any remaining assistance in any 1-year pe- riod, give preference to families who qualify under a system of local preferences established by the public housing agency in writing and after public hearing to respond to local housing needs and priorities, which may include (I) assisting very low-income families who either reside in transitional housing assisted under title IV of the Stewart B. McKinney Homeless Assistance Act, or participate in a program designed to provide public assistance recipients with greater access to employment and educational opportunities; (II) assisting families in accordance with subsection (u)(2) of this section; (III) assisting families identified by local public agencies involved in providing for the welfare of children as having a lack of adequate hous- ing that is a primary factor in the imminent place- ment of a child in foster care, or in preventing the discharge of a child from foster care and reunifica- tion with his or her family; (IV) assisting youth, upon discharge from foster care, in cases in which return to the family or extended family or adoption is not available; (V) assisting veterans who are eligible and have applied for assistance, will use the assistance for a dwelling unit designed for the handicapped, and, upon discharge or eligibility for discharge from a hos- pital or nursing home, have physical disability which, because of the configuration of their homes, prevents them from access to or use of their homes; and (VI) achieving other objectives of national housing policy as affirmed by Congress; and ‘‘(iii) prohibit any individual or family evicted from housing assisted under the chapter by reason of drug- related criminal activity from having a preference under any provision of this subparagraph for 3 years unless the evicted tenant successfully completes a re- habilitation program approved by the agency, except that the agency may waive the application of this clause under standards established by the Secretary (which shall include waiver for any member of a fam- ily of an individual prohibited from tenancy under this clause who the agency determines clearly did not participate in and had no knowledge of such criminal activity or when circumstances leading to eviction no longer exist);’’. See Effective and Termination Dates of 1996 Amend- ments note below. Subsec. (d)(1)(B)(ii), (iii). Pub. L. 104–134, § 101(e) [title II, § 203(c), (d)], in cl. (ii) temporarily inserted ‘‘during the term of the lease,’’ after ‘‘(ii)’’ and in cl. (iii) tem- porarily substituted ‘‘during the term of the lease,’’ for ‘‘provide that’’. See Effective and Termination Dates of 1996 Amendments note below. Subsec. (d)(1)(B)(v). Pub. L. 104–193, § 903(a)(2), added cl. (v). Subsec. (d)(2)(A). Pub. L. 104–99, § 402(d)(6)(A)(iii), (f), temporarily struck out at end ‘‘Any assistance pro- vided to lower income tenants under the preceding sen- tence shall not be considered for purposes of the limita- tion under paragraph (1)(A) regarding the percentage of families that may receive assistance under this section who do not qualify for preferences under such para- graph.’’ See Effective and Termination Dates of 1996 Amendments note below. Subsec. (d)(2)(H). Pub. L. 104–99, § 402(d)(6)(A)(iv), (f), temporarily substituted ‘‘An owner’’ for ‘‘Notwith- standing subsection (d)(1)(A)(i) of this section, an owner’’. See Effective and Termination Dates of 1996 Amendments note below. Subsec. (o)(3)(B). Pub. L. 104–99, § 402(d)(3), (f), tempo- rarily amended subpar. (B) generally. Prior to amend- ment, subpar. (B) read as follows: ‘‘In selecting families to be assisted, preference shall be given to families which, at the time they are seeking assistance, occupy substandard housing (including families that are home- less or living in a shelter for homeless families), are in- voluntarily displaced (including displacement because of disposition of a multifamily housing project under section 1701z–11 of title 12), or are paying more than 50 per centum of family income for rent. A public housing agency may provide for circumstances in which fami- lies who do not qualify for any preference established in the preceding sentence are provided assistance under this subsection before families who do qualify for such Page 4615 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f preference, except that not more than 10 percent (or such higher percentage determined by the Secretary to be necessary to ensure that public housing agencies can assist families in accordance with subsection (u)(2) of this section or determined by the Secretary to be ap- propriate for other good cause) of the families who ini- tially receive assistance in any 1-year period (or such shorter period selected by the public housing agency before the beginning of its first full year subject to this sentence) may be families who do not qualify for such preference. The public housing agency shall in imple- menting the preceding sentence establish a system of preferences in writing and after public hearing to re- spond to local housing needs and priorities which may include (i) assisting very low-income families who ei- ther reside in transitional housing assisted under title IV of the Stewart B. McKinney Homeless Assistance Act, or participate in a program designed to provide public assistance recipients with greater access to em- ployment and educational opportunities, (ii) assisting families in accordance with subsection (u)(2) of this section; (iii) assisting families identified by local pub- lic agencies involved in providing for the welfare of children as having a lack of adequate housing that is a primary factor in the imminent placement of a child in foster care, or in preventing the discharge of a child from foster care and reunification and his or her fam- ily; (iv) assisting youth, upon discharge from foster care, in cases in which return to the family or extended family or adoption is not available; (v) assisting vet- erans who are eligible and have applied for assistance, will use the assistance for a dwelling unit designed for the handicapped, and, upon discharge or eligibility for discharge from a hospital or nursing home, have phys- ical disability which, because of the configuration of their homes, prevents them from access to or use of their homes; and (vi) achieving other objectives of na- tional housing policy as affirmed by Congress. Any in- dividual or family evicted from housing assisted under the chapter by reason of drug-related criminal activity (as defined in subsection (f)(5) of this section) shall not be eligible for a preference under any provision of this subparagraph for 3 years unless the evicted tenant suc- cessfully completes a rehabilitation program approved by the Secretary (which shall include waiver for any member of a family of an individual prohibited from tenancy under this clause who the agency determines clearly did not participate in and had no knowledge of such criminal activity or when circumstances leading to eviction no longer exist).’’ See Effective and Termi- nation Dates of 1996 Amendments note below. Subsec. (t). Pub. L. 104–134, § 101(e) [title II, § 203(a), (d)], temporarily repealed subsec. (t) which read as fol- lows: ‘‘(1) No owner who has entered into a contract for housing assistance payments under this section on be- half of any tenant in a multifamily housing project shall refuse— ‘‘(A) to lease any available dwelling unit in any multifamily housing project of such owner that rents for an amount not greater than the fair market rent for a comparable unit, as determined by the Sec- retary under this section, to a holder of a certificate of eligibility under this section a proximate cause of which is the status of such prospective tenant as a holder of such certificate, and to enter into a housing assistance payments contract respecting such unit; or ‘‘(B) to lease any available dwelling unit in any multifamily housing project of such owner to a hold- er of a voucher under subsection (o) of this section, and to enter into a voucher contract respecting such unit, a proximate cause of which is the status of such prospective tenant as holder of such voucher. ‘‘(2) For purposes of this subsection, the term ‘multi- family housing project’ means a residential building containing more than 4 dwelling units.’’ See Effective and Termination Dates of 1996 Amendments note below. Subsec. (v). Pub. L. 104–99, § 405(c), amended subsec. (v) generally. Prior to amendment, subsec. (v) read as follows: ‘‘(1) The Secretary shall extend any expiring contract entered into under this section for loan management assistance or execute a new contract for project-based loan management assistance, if the owner agrees to continue providing housing for low-income families during the term of the contract. ‘‘(2)(A) The eligiblity of a multifamily residential project for loan management assistance under this sec- tion shall be determined without regard to whether the project is subsidized or unsubsidized. ‘‘(B) In allocating loan management assistance under this section, the Secretary may give a priority to any project only on the basis that the project has serious fi- nancial problems that are likely to result in a claim on the insurance fund in the near future or the project is eligible to receive incentives under subtitle B of the Low-Income Housing Preservation and Resident Home- ownership Act of 1990.’’ Subsec. (bb). Pub. L. 104–134, § 101[(e)] [title II, § 208], added subsec. (bb). 1995—Subsec. (z). Pub. L. 104–19 added subsec. (z). 1994—Subsec. (c)(2)(A). Pub. L. 103–327 inserted at end: ‘‘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 fore- going sentence shall be effective only during fiscal year 1995. 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 adjust- ment 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. The immediately foregoing sentence shall be effective only during fiscal year 1995.’’ Subsec. (d)(1)(A)(i). Pub. L. 103–233, § 101(c)(2), inserted ‘‘(including displacement because of disposition of a multifamily housing project under section 1701z–11 of title 12)’’ after ‘‘displaced’’. Subsec. (d)(1)(A)(ii). Pub. L. 103–327 which directed the amendment of cl. (ii) by striking ‘‘and (V)’’ and in- serting in lieu thereof ‘‘(V) assisting families that in- clude one or more adult members who are employed; and (VI)’’, and inserting after the final semicolon ‘‘sub- clause (V) shall be effective only during fiscal year 1995;’’, was not executed because the words ‘‘and (V)’’ did not appear and cl. (ii) already contains subcls. (V) and (VI). See 1992 Amendment note below. Subsec. (f)(1). Pub. L. 103–233, § 101(d), inserted ‘‘an agency of the Federal Government,’’ after ‘‘coopera- tive,’’. Subsec. (o)(3)(B). Pub. L. 103–233, § 101(c)(3), inserted ‘‘(including displacement because of disposition of a multifamily housing project under section 1701z–11 of title 12)’’ after ‘‘displaced’’. Subsec. (aa). Pub. L. 103–327 temporarily added sub- sec. (aa), ‘‘Refinancing incentive’’, which read as fol- lows: ‘‘(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 refi- nanced under section 223(a)(7) or section 223(f) of the National Housing Act to lower the periodic debt serv- ice payments of the owner. ‘‘(2) SHARE FROM REDUCED ASSISTANCE PAYMENTS.— The Secretary may pay the up front cost of refinancing only— Page 4616 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(A) to the extent that funds accrue to the Sec- retary from the reduced assistance payments that re- sults from the refinancing; and ‘‘(B) after the application of amounts in accordance with section 1012 of the Stewart B. McKinney Home- less Assistance Amendments Act of 1988.’’ See Effective and Termination Dates of 1994 Amend- ment note below. 1992—Subsec. (c)(2)(B). Pub. L. 102–550, § 1012(g), in- serted at end ‘‘The Secretary may (at the discretion of the Secretary and subject to the availability of appro- priations for contract amendments), on a project by project basis for projects receiving project-based assist- ance, provide adjustments to the maximum monthly rents to cover the costs of evaluating and reducing lead-based paint hazards, as defined in section 4851b of this title.’’ Pub. L. 102–550, § 142, inserted after first sentence ‘‘The Secretary shall make additional adjustments in the maximum monthly rent for units under contract (subject to the availability of appropriations for con- tract amendments) to the extent the Secretary deter- mines such adjustments are necessary to reflect in- creases in the actual and necessary expenses of owning and maintaining the units that have resulted from the expiration of a real property tax exemption.’’ Subsec. (c)(4). Pub. L. 102–550, § 141(a), inserted ‘‘or by a family that qualifies to receive assistance under sub- section (b) of this section pursuant to section 223 or 226 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990’’ after first comma in first sentence. Subsec. (c)(9). Pub. L. 102–550, § 143, inserted before pe- riod at end ‘‘, and such term shall include termination of the contract for business reasons’’. Subsec. (d)(1)(A)(ii)(V), (VI). Pub. L. 102–550, § 144(a), added subcl. (V) and redesignated former subcl. (V) as (VI). Subsec. (d)(1)(B)(iii). Pub. L. 102–550, § 145, inserted ‘‘, any criminal activity that threatens the health, safety, or right to peaceful enjoyment of their resi- dences by persons residing in the immediate vicinity of the premises,’’ before ‘‘or any drug-related’’ and sub- stituted ‘‘tenant of any unit’’ for ‘‘public housing ten- ant’’. Subsec. (d)(2)(F). Pub. L. 102–550, § 674, added subpar. (F). Subsec. (d)(2)(G), (H). Pub. L. 102–550, § 682(b), added subpars. (G) and (H). Subsec. (d)(4). Pub. L. 102–550, § 660, added par. (4). Subsec. (f)(6), (7). Pub. L. 102–550, § 146, added pars. (6) and (7). Subsec. (i). Pub. L. 102–550, § 623(b), added subsec. (i). Subsec. (o)(3)(A). Pub. L. 102–550, § 141(b), struck out ‘‘or’’ before ‘‘(iv)’’ and inserted before period at end ‘‘, or’’ and cl. (v). Subsec. (o)(3)(B)(v), (vi). Pub. L. 102–550, § 144(b), in third sentence, added cl. (v) and redesignated former cl. (v) as (vi). Subsec. (q)(3), (4). Pub. L. 102–550, § 675, added par. (3) and redesignated former par. (3) as (4). Subsec. (r)(1). Pub. L. 102–550, § 147, inserted before pe- riod at end ‘‘; except that any family not living within the jurisdiction of a public housing agency at the time that such family applies for assistance from such agen- cy shall, during the 12-month period beginning upon the receipt of any tenant-based rental assistance made available on behalf of the family, use such assistance to rent an eligible dwelling unit located within the juris- diction served by such public housing agency’’. Subsec. (x)(1). Pub. L. 102–550, § 148, amended par. (1) generally. Prior to amendment, par. (1) read as follows: ‘‘The budget authority available under section 1437c(c) of this title for assistance under subsection (b) of this section is authorized to be increased by $35,000,000 on or after October 1, 1990, by $35,000,000 on or after October 1, 1991.’’ Subsec. (y). Pub. L. 102–550, § 185(a), added subsec. (y). 1991—Subsec. (c)(1). Pub. L. 102–139 inserted provi- sions relating to separate fair market rentals for Mon- roe County, Pennsylvania. 1990—Subsec. (a). Pub. L. 101–625, § 572(1), which di- rected the substitution of ‘‘low-income families’’ for ‘‘lower income families’’, was executed by making the substitution for ‘‘lower-income families’’ to reflect the probable intent of Congress. Pub. L. 101–625, § 548(b), inserted at end ‘‘A public housing agency may contract to make assistance pay- ments to itself (or any agency or instrumentality thereof) as the owner of dwelling units if such agency is subject to the same program requirements as are ap- plied to other owners. In such cases, the Secretary may establish initial rents within applicable limits.’’ Subsec. (b). Pub. L. 101–625, § 541(a), inserted heading and struck out par. (1) designation preceding text. Subsec. (b)(2). Pub. L. 101–625, § 413(b)(1), added par. (2). Subsec. (c)(1). Pub. L. 101–625, § 543(b), inserted ‘‘(A)’’ after second reference to ‘‘fair market rental’’ and sub- stituted ‘‘a housing strategy as defined in section 12705 of this title, or (B) by such higher amount as may be requested by a tenant and approved by the public hous- ing agency in accordance with paragraph (3)(B).’’ for ‘‘a local housing assistance plan as defined in section 1439(a)(5) of this title.’’ Subsec. (c)(2)(B). Pub. L. 101–625, § 542, inserted at end ‘‘Where the Secretary determines that a project as- sisted under this section is located in a community where drug-related criminal activity is generally prev- alent and the project’s operating, maintenance, and capital repair expenses have been substantially in- creased primarily as a result of the prevalence of such drug-related activity, the Secretary may (at the discre- tion of the Secretary and subject to the availability of appropriations for contract amendments for this pur- pose), on a project by project basis, provide adjust- ments 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 com- parability standard required under this paragraph may be waived by the Secretary to so implement the pre- ceding sentence.’’ Subsec. (c)(3). Pub. L. 101–625, § 543(a), designated ex- isting provisions as subpar. (A) and added subpar. (B). Subsec. (c)(9). Pub. L. 101–625, § 544, inserted after first sentence ‘‘The owner’s notice shall include a statement that the owner and the Secretary may agree to a re- newal of the contract, thus avoiding the termination.’’ and inserted at end ‘‘Within 30 days of the Secretary’s finding, the owner shall provide written notice to each tenant of the Secretary’s decision.’’ Subsec. (c)(10). Pub. L. 101–625, § 572(2), substituted ‘‘low-income housing’’ for ‘‘lower income housing’’. Subsec. (d)(1)(A). Pub. L. 101–625, § 545(a), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘‘the selection of tenants for such unit shall be the function of the owner, subject to the provi- sions of the annual contributions contract between the Secretary and the agency, except that (i) the tenant se- lection criteria used by the owner shall give preference to families which occupy substandard housing, are pay- ing more than 50 per centum of family income for rent, or are involuntarily displaced at the time they are seeking assistance under this section; and (ii) the pub- lic housing agency may provide for circumstances in which families who do not qualify for any preference established in clause (i) are provided assistance before families who do qualify for such preference, except that not more than 10 percent (or such higher percentage de- termined by the Secretary to be necessary to ensure that public housing agencies can assist families in ac- cordance with subsection (u)(2) of this section or deter- mined by the Secretary to be appropriate for other good cause) of the families who initially receive assist- ance in any 1-year period (or such shorter period se- lected by the public housing agency before the begin- ning of its first full year subject to this clause) may be families who do not qualify for such preference;’’. Page 4617 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f Subsec. (d)(1)(B)(iii), (iv). Pub. L. 101–625, § 546, added cls. (iii) and (iv). Subsec. (d)(2)(A). Pub. L. 101–625, § 552(b), inserted after first sentence ‘‘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 ex- piration date.’’ Pub. L. 101–625, § 613(a)(1), inserted at end ‘‘Notwith- standing any other provision of this section, a public housing agency and an applicable State agency may, on a priority basis, attach to structures not more than an additional 15 percent of the assistance provided by the public housing agency or the applicable State agency only with respect to projects assisted under a State program that permits the owner of the projects to pre- pay a State assisted or subsidized mortgage on the structure, except that attachment of assistance under this sentence shall be for the purpose of (i) providing incentives to owners to preserve such projects for occu- pancy by lower and moderate income families (for the period that assistance under this sentence is available), and (ii) to assist lower income tenants to afford any in- creases in rent that may be required to induce the owner to maintain occupancy in the project by lower and moderate income tenants. Any assistance provided to lower income tenants under the preceding sentence shall not be considered for purposes of the limitation under paragraph (1)(A) regarding the percentage of families that may receive assistance under this section who do not qualify for preferences under such para- graph.’’ Subsec. (d)(2)(C). Pub. L. 101–625, § 613(a)(2), inserted at end ‘‘To the extent assistance is used as provided in the penultimate sentence of subparagraph (A), the con- tract for assistance may, at the option of the public housing agency, have an initial term not exceeding 15 years.’’ Pub. L. 101–625, § 547(c), amended subpar. (C) gen- erally. Prior to amendment, subpar. (C) read as follows: ‘‘Any contract for assistance payments that is attached to a structure under this paragraph shall (at the option of the public housing agency but subject to available funds) be renewable for 2 additional 5-year terms, ex- cept that the aggregate term of the initial contract and renewals shall not exceed 15 years.’’ Subsec. (d)(2)(D), (E). Pub. L. 101–625, § 547(a), (b), added subpars. (D) and (E). Subsec. (e)(2). Pub. L. 101–625, § 289(b), struck out par. (2) which read as follows: ‘‘For the purpose of upgrading and thereby preserving the Nation’s housing stock, the Secretary is authorized to make assistance payments under this section directly or through public housing agencies pursuant to contracts with owners or prospec- tive owners who agree to upgrade housing so as to make and keep such housing decent, safe, and sanitary through upgrading which involves less than substantial rehabilitation, as such upgrading and rehabilitation are defined by the Secretary, and which shall involve a minimum expenditure of $3,000 for a unit, including its prorated share of work to be accomplished on common areas or systems. The Secretary is authorized to pre- scribe such terms and conditions for contracts entered into under this section pursuant to this paragraph as the Secretary determines to be necessary and appro- priate, except that such terms and conditions, to the maximum extent feasible, shall be consistent with terms and conditions otherwise applicable with respect to other dwelling units assisted under this section. Not- withstanding subsection (c)(1) of this section, the Sec- retary may, in carrying out the preceding sentence, es- tablish a maximum monthly rent (for units upgraded pursuant to this paragraph) which exceeds the fair mar- ket rental by not more than 20 per centum if such units are located in an area where the Secretary finds cost levels so require, except that the Secretary may ap- prove maximum monthly rents which exceed the fair market rentals by more than 20 but not more than 30 per centum where the Secretary determines that spe- cial circumstances warrant such higher rent or where necessary to the implementation of a local housing as- sistance plan. The Secretary is also authorized to make assistance available under this section pursuant to this paragraph to any unit in a housing project which, on an overall basis, reflects the need for such upgrading. The Secretary shall increase the amount of assistance pro- vided under this paragraph above the amount of assist- ance otherwise permitted by this paragraph and sub- section (c)(1) of this section, if the Secretary deter- mines such increase necessary to assist in the sale of multifamily housing projects owned by the Department of Housing and Urban Development. In order to maxi- mize the availability of low-income housing, in pro- viding assistance under this paragraph, the Secretary shall include in any calculation or determination re- garding the amount of the assistance to be made avail- able the extent to which any proceeds are available from any tax credits provided under section 42 of title 26 (or from any syndication of such credits) with re- spect to the housing. For each fiscal year, the Sec- retary may not provide assistance pursuant to this paragraph to any project for rehabilitation of more than 100 units. Assistance pursuant to this paragraph shall be allocated according to the formula established pursuant to section 1439(d) of this title, and awarded pursuant to a competition under such section. The Sec- retary shall maintain a single listing of any assistance provided pursuant to this paragraph, which shall in- clude a statement identifying the owner and location of the project to which assistance was made, the amount of the assistance, and the number of units assisted.’’ Subsec. (f)(1). Pub. L. 101–625, § 548(a), substituted ‘‘dwelling units’’ for ‘‘newly constructed or substan- tially rehabilitated dwelling units as described in this section’’. Subsec. (f)(4), (5). Pub. L. 101–625, § 549, added pars. (4) and (5). Subsec. (j)(1). Pub. L. 101–625, § 572(1), substituted ‘‘low-income families’’ for ‘‘lower income families’’ in introductory provisions. Subsec. (o). Pub. L. 101–625, § 541(b), inserted heading. Subsec. (o)(3). Pub. L. 101–625, § 545(2)[(b)], inserted ‘‘(A)’’ after ‘‘(3)’’, redesignated former cls. (A) to (D) as cls. (i) to (iv), respectively, inserted ‘‘(B)’’ before ‘‘In selecting families’’, ‘‘(including families that are home- less or living in a shelter for homeless families)’’ after ‘‘substandard housing’’, and inserted at end ‘‘The pub- lic housing agency shall in implementing the preceding sentence establish a system of preferences in writing and after public hearing to respond to local housing needs and priorities which may include (i) assisting very low-income families who either reside in transi- tional housing assisted under title IV of the Stewart B. McKinney Homeless Assistance Act, or participate in a program designed to provide public assistance recipi- ents with greater access to employment and edu- cational opportunities, (ii) assisting families in accord- ance with subsection (u)(2) of this section; (iii) assist- ing families identified by local public agencies involved in providing for the welfare of children as having a lack of adequate housing that is a primary factor in the im- minent placement of a child in foster care, or in pre- venting the discharge of a child from foster care and re- unification and his or her family; (iv) assisting youth, upon discharge from foster care, in cases in which re- turn to the family or extended family or adoption is not available; and (v) achieving other objectives of na- tional housing policy as affirmed by Congress. Any in- dividual or family evicted from housing assisted under the chapter by reason of drug-related criminal activity (as defined in subsection (f)(5) of this section) shall not be eligible for a preference under any provision of this subparagraph for 3 years unless the evicted tenant suc- cessfully completes a rehabilitation program approved by the Secretary (which shall include waiver for any member of a family of an individual prohibited from tenancy under this clause who the agency determines clearly did not participate in and had no knowledge of such criminal activity or when circumstances leading to eviction no longer exist).’’ Page 4618 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f Pub. L. 101–625, § 413(a), added cl. (D). Subsec. (o)(7). Pub. L. 101–625, § 572(1), substituted ‘‘low-income families’’ for ‘‘lower income families’’. Subsec. (o)(9). Pub. L. 101–625, § 413(b)(2), added par. (9). Subsec. (o)(10), (11). Pub. L. 101–625, § 550(a), (c), added pars. (10) and (11). Subsec. (r)(1). Pub. L. 101–625, § 551, substituted ‘‘the same State, or the same or a contiguous’’ for ‘‘the same, or a contiguous,’’. Subsec. (u). Pub. L. 101–625, § 572(1), substituted ‘‘low- income families’’ for ‘‘lower income families’’ in intro- ductory provisions. Subsec. (v)(1). Pub. L. 101–625, § 572(1), substituted ‘‘low-income families’’ for ‘‘lower income families’’. Subsec. (v)(2)(B). Pub. L. 101–625, § 603, which directed the substitution of ‘‘Low-Income Housing Preservation and Resident Homeownership Act of 1990’’ for ‘‘Emer- gency Low Income Housing Preservation Act of 1987’’ in section ‘‘89(v)(2) of the United States Housing Act of 1937’’, was executed to subsec. (v)(2)(B) of this section (section 8 of the United States Housing Act of 1937) to reflect the probable intent of Congress. Subsecs. (w), (x). Pub. L. 101–625, §§ 552(a), 553, added subsecs. (w) and (x). 1989—Subsec. (c)(2)(C). Pub. L. 101–235, § 702(g), sub- stituted ‘‘quality, type, and age’’ for ‘‘quality and age’’. Pub. L. 101–235, § 702(c), inserted after first sentence ‘‘In implementing the limitation established under the preceding sentence, the Secretary shall establish regu- lations for conducting comparability studies for projects where the Secretary has reason to believe that the application of the formula adjustments under sub- paragraph (A) would result in such material dif- ferences. 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 adjust- ment 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 ad- justment 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 as- sisted units and unassisted units of similar quality, type, and age in the smaller market area. Where the Secretary determines that such modified annual ad- justment factor cannot be established or that such fac- tor when applied to a particular project would result in material differences between the rents charged for as- sisted 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.’’ Subsec. (e)(2). Pub. L. 101–235, § 127(1), inserted before period at end of first sentence ‘‘, and which shall in- volve a minimum expenditure of $3,000 for a unit, in- cluding its prorated share of work to be accomplished on common areas or systems’’. Pub. L. 101–235, § 127(2), (3), inserted at end ‘‘In order to maximize the availability of low-income housing, in providing assistance under this paragraph, the Sec- retary shall include in any calculation or determina- tion regarding the amount of the assistance to be made available the extent to which any proceeds are avail- able from any tax credits provided under section 42 of title 26 (or from any syndication of such credits) with respect to the housing. For each fiscal year, the Sec- retary may not provide assistance pursuant to this paragraph to any project for rehabilitation of more than 100 units. Assistance pursuant to this paragraph shall be allocated according to the formula established pursuant to section 1439(d) of this title, and awarded pursuant to a competition under such section. The Sec- retary shall maintain a single listing of any assistance provided pursuant to this paragraph, which shall in- clude a statement identifying the owner and location of the project to which assistance was made, the amount of the assistance, and the number of units assisted.’’ 1988—Subsec. (b)(1). Pub. L. 100–242, § 141, inserted pro- visions at end authorizing Secretary to enter into sepa- rate contributions contracts with each public housing agency to obligate authority approved each year, be- ginning with fiscal year 1988. Subsec. (c)(1). Pub. L. 100–242, § 142(a), inserted before last sentence ‘‘Each fair market rental in effect under this subsection shall be adjusted to be effective on Oc- tober 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 mar- ket area suitable for occupancy by persons assisted under this section.’’ Pub. L. 100–242, § 142(b), inserted at end ‘‘The Sec- retary shall establish separate fair market rentals under this paragraph for Westchester County in the State of New York.’’ Pub. L. 100–242, § 142(c)(1), inserted at end ‘‘If units as- sisted 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 reason- able in comparison with other units in the market area that are exempt from local rent control.’’ Subsec. (c)(2)(C). Pub. L. 100–628, § 1004(a)(1), sub- stituted ‘‘under subparagraphs (A) and (B)’’ for ‘‘as hereinbefore provided’’. Pub. L. 100–628, § 1004(a)(2), inserted at end ‘‘Any max- imum monthly rent that has been reduced by the Sec- retary after April 14, 1987, and prior to November 7, 1988, 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 ef- fect on April 15, 1987, and the reduced maximum month- ly rents, multiplied by the number of months that the reduced maximum monthly rents were in effect.’’ Pub. L. 100–242, § 142(c)(2), substituted ‘‘assisted units and unassisted units of similar quality and age in the same market area’’ for ‘‘assisted and comparable unas- sisted units’’ and inserted at end ‘‘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 assist- ance contract under this section, the automatic annual adjustment factor shall be applied.’’ Pub. L. 100–242, § 142(d), inserted at end ‘‘The Sec- retary may not reduce the contract rents in effect on or after April 15, 1987, for newly constructed, substan- tially rehabilitated, or moderately rehabilitated projects assisted under this section (including projects assisted under this section as in effect prior to Novem- ber 30, 1983), unless the project has been refinanced in a manner that reduces the periodic payments of the owner.’’ Subsec. (c)(2)(D). Pub. L. 100–242, § 142(e), struck out subpar. (D) which read as follows: ‘‘Notwithstanding the foregoing, the Secretary shall limit increases in contract rents for newly constructed or substantially rehabilitated projects assisted under this section to the amount of operating cost increases incurred with re- spect to comparable rental dwelling units of various sizes and types in the same market area which are suit- able for occupancy by families assisted under this sec- tion. Where no comparable dwelling units exist in the same market area, the Secretary shall have authority to approve such increases in accordance with the best available data regarding operating cost increases in rental dwelling units.’’ Subsec. (c)(9), (10). Pub. L. 100–242, § 262(a), (b), added pars. (9) and (10). Subsec. (d)(1)(A). Pub. L. 100–628, § 1014(b), inserted cl. (i) designation after ‘‘except that’’ and added cl. (ii) be- fore semicolon at end. Page 4619 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f Subsec. (d)(2). Pub. L. 100–628, § 1005(b)(1), designated existing provisions as subpar. (A), substituted ‘‘(i)’’ and ‘‘(ii)’’ for ‘‘(A)’’ and ‘‘(B)’’ wherever appearing, and added subpar. (B). Pub. L. 100–628, § 1005(c), added subpar. (C). Pub. L. 100–242, § 148, inserted exception authorizing Secretary to permit public housing authority to ap- prove attachment with respect to not more than 15 per- cent of assistance provided by public housing agency if requirements of cl. (B) are met. Subsec. (o)(1). Pub. L. 100–242, § 143(a)(1), substituted ‘‘The Secretary may provide assistance’’ for ‘‘In con- nection with the rental rehabilitation and development program under section 1437o of this title or the rural housing preservation grant program under section 1490m of this title, or for other purposes, the Secretary is authorized to conduct a demonstration program’’. Subsec. (o)(3). Pub. L. 100–628, § 1014(c), inserted sen- tence at end authorizing public housing agencies to provide for circumstances in which families who do not qualify for any preference are provided assistance under this subsection before families who do qualify for such preference. Subsec. (o)(4). Pub. L. 100–242, § 143(a)(2), (3), redesig- nated par. (5) as (4) and struck out former par. (4) which read as follows: ‘‘The Secretary shall use substantially all of the authority to enter into contracts under this subsection to make assistance payments for families residing in dwellings to be rehabilitated with assist- ance under section 1437o of this title and for families displaced as a result of rental housing development as- sisted under such section or as a result of activities as- sisted under section 1490m of this title.’’ Subsec. (o)(5). Pub. L. 100–242, § 143(a)(3), redesignated par. (6) as (5). Former par. (5) redesignated (4). Subsec. (o)(6). Pub. L. 100–242, § 143(a)(3), (b), redesig- nated par. (7) as (6), substituted ‘‘annually’’ for ‘‘as fre- quently as twice during any five-year period’’ in sub- par. (A), and struck out subpar. (D) which directed that public housing agency consult with public and units of local government regarding impact of adjustments made under this section on the number of families that can be assisted. Former par. (6) redesignated (5). Subsec. (o)(7). Pub. L. 100–242, § 143(a)(3), (c), redesig- nated par. (8) as (7), and struck out ‘‘not to exceed 5 per centum of the amount of’’ after ‘‘utilize’’. Former par. (7) redesignated (6). Subsec. (o)(8). Pub. L. 100–242, § 143(a)(3), (d), added par. (8). Former par. (8) redesignated (7). Subsecs. (q) to (u). Pub. L. 100–242, §§ 144–149, added subsecs. (q) to (u). Subsec. (u)(3). Pub. L. 100–628, § 1006, added par. (3). Subsec. (v). Pub. L. 100–628, § 1029, redesignated par. (2) as (1) and inserted ‘‘for project-based loan manage- ment assistance’’, added par. (2), and struck out former par. (1) which required that each contract entered into by Secretary for loan management assistance be for a term of 180 months. Pub. L. 100–242, § 262(c), added subsec. (v). 1984—Subsec. (d)(2). Pub. L. 98–479, § 102(b)(6), sub- stituted ‘‘Where the Secretary enters into an annual contributions contract with a public housing agency pursuant to which the agency will enter into a contract for assistance payments with respect to an existing structure, the contract for assistance payments may not be attached to the structure unless (A) the Sec- retary and the public housing agency approve such ac- tion, and (B) the owner agrees to rehabilitate the struc- ture other than with assistance under this chapter and otherwise complies with the requirements of this sec- tion.’’ for ‘‘A contract under this section may not be attached to the structure except where the Secretary specifically waives the foregoing limitation and the public housing agency approves such action, and the owner agrees to rehabilitate the structure other than with assistance under this chapter and otherwise com- plies with the requirements of this section. The aggre- gate term of such contract and any contract extension may not be more than 180 months.’’ Subsec. (e)(2). Pub. L. 98–479, § 102(b)(7), inserted at end ‘‘The Secretary shall increase the amount of assist- ance provided under this paragraph above the amount of assistance otherwise permitted by this paragraph and subsection (c)(1) of this section, if the Secretary determines such increase necessary to assist in the sale of multifamily housing projects owned by the Depart- ment of Housing and Urban Development.’’ Subsec. (n). Pub. L. 98–479, § 102(b)(8), substituted ‘‘subsections (b)(1) and (e)(2) of this section’’ for ‘‘sub- section (b)(1), subsection (e)(2) of this section’’. Subsec. (o)(3)(C). Pub. L. 98–479, § 102(b)(9), added cl. (C). Subsec. (o)(7)(D). Pub. L. 98–479, § 102(b)(10), inserted ‘‘unit of’’ before ‘‘general’’. 1983—Subsec. (a). Pub. L. 98–181, § 209(a)(1), sub- stituted ‘‘existing housing’’ for ‘‘existing, newly con- structed, and substantially rehabilitated housing’’. Subsec. (b)(2). Pub. L. 98–181, § 209(a)(2), repealed par. (2) which related to authorization of assistance pay- ments by the Secretary and contractually obligated public housing agencies for construction or substantial rehabilitation of housing, modest in design, with units for occupancy by low-income families and requirement that contracts providing housing assistance and en- tered into after Aug. 13, 1981, specify the number of units available for occupancy by eligible families. Subsec. (d)(1)(A). Pub. L. 98–181, § 203(b)(1), inserted ‘‘, are paying more than 50 per centum of family in- come for rent,’’. Subsec. (d)(2). Pub. L. 98–181, § 208, inserted second and third sentences respecting waiver of limitation and limitation of contract and any extension to prescribed period. Subsec. (e)(1). Pub. L. 98–181, § 209(a)(3), redesignated par. (4) as (1) and struck out former par. (1) which pre- scribed terms of 20 to 30 years for newly constructed or substantially rehabilitated dwelling units. Subsec. (e)(2). Pub. L. 98–181, § 209(a)(3), redesignated par. (5) as (2) and struck out former par. (2) which re- quired owners to assume ownership, management, and maintenance responsibilities, including selection of tenants and termination of tenancy for newly con- structed or substantially rehabilitated dwelling units. Pub. L. 98–181, § 203(b)(2), inserted ‘‘, are paying more than 50 per centum of family income for rent,’’ after ‘‘substandard housing’’. Subsec. (e)(3). Pub. L. 98–181, § 209(a)(3), struck out par. (3) which required that construction or substantial rehabilitation of dwelling units be eligible for mort- gages insured under the National Housing Act and that assistance not be withheld by reason of availability of mortgage insurance under section 1715z–9 of title 12 or tax-exempt status obligations used to finance the con- struction or rehabilitation. Subsec. (e)(4), (5). Pub. L. 98–181, § 209(a)(3), redesig- nated pars. (4) and (5) as (1) and (2), respectively. Subsec. (i). Pub. L. 98–181, § 209(a)(4), repealed subsec. (i) which related to contracts with respect to substan- tially rehabilitated dwelling units. Subsecs. (l), (m). Pub. L. 98–181, § 209(a)(5), repealed subsec. (l) relating to limitation of cost and rent in- creases, and subsec. (m) relating to preference for projects on suitable State and local government tracts. Subsec. (n). Pub. L. 98–181, § 209(a)(6), substituted ‘‘subsection (e)(2) of this section’’ for ‘‘subsection (e)(5) and subsection (i) of this section’’. Pub. L. 98–181, § 210(1), (2), inserted ‘‘subsection (b)(1) of this section,’’ before ‘‘subsection (e)(5)’’ and a comma after ‘‘subsection (e)(5) of this section’’. Subsec. (n)(3). Pub. L. 98–181, § 210(3)–(5), added par. (3). Subsec. (o). Pub. L. 98–181, § 207, added subsec. (o). Subsec. (p). Pub. L. 98–181, § 211, added subsec. (p). 1981—Subsec. (b)(2). Pub. L. 97–35, §§ 324(1), 325(1), in- serted provisions relating to increasing housing oppor- tunities for very low-income families and provisions re- lating to availability for occupancy the number of units for which assistance is committed. Subsec. (c)(2)(D). Pub. L. 97–35, § 324(2), added par. (D). Subsec. (c)(3). Pub. L. 97–35, § 322(e)(1), revised for- mula for computation of amount of monthly assistance Page 4620 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f and struck out authority to make reviews at least every two years in cases of elderly families. Subsec. (c)(5). Pub. L. 97–35, § 325(2), inserted reference to mortgages under section 1720 of title 12. Subsec. (c)(7). Pub. L. 97–35, § 322(e)(2), struck out par. (7) relating to percentage requirement for families with very low income and redesignated former par. (8) as (7). Subsec. (c)(8). Pub. L. 97–35, § 326(a), added par. (8). Former par. (8) redesignated (7). Subsec. (d)(1)(B). Pub. L. 97–35, § 326(e)(1), substituted provisions relating to terms and conditions, and termi- nation of the lease by the owner for provisions relating to right of the agency to give notice to terminate and owner the right to make representation to agency for termination of the tenancy. Subsec. (f). Pub. L. 97–35, § 322(e)(3), struck out pars. (1) to (3) which defined ‘‘lower income families’’, ‘‘very low-income families’’ and ‘‘income’’, respectively, and redesignated pars. (4) to (6) as (1) to (3), respectively. Subsec. (h). Pub. L. 97–35, § 322(e)(4), (5), struck out reference to section 1437a(1) of this title. Subsec. (j). Pub. L. 97–35, § 329H(a), generally revised and reorganized provisions and, as so revised and reor- ganized, substituted provisions relating to contracts to make assistance payments to assist lower income fami- lies by making rental assistance payments on behalf of such family, for provisions relating to annual contribu- tions contracts to assist lower income families by mak- ing rental assistance payments. Subsec. (j)(3). Pub. L. 97–35, § 322(e)(6), substituted in par. (3) ‘‘the rent the family is required to pay under section 1437a(a) of this title’’ for ‘‘25 per centum of one- twelfth of the annual income of such family’’. Subsecs. (l) to (n). Pub. L. 97–35, § 324(3), added sub- secs. (l) to (n). 1980—Subsec. (c)(1). Pub. L. 96–399, § 203(a), inserted provision that 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 Oct. 1, 1980. Subsec. (e)(5). Pub. L. 96–399, § 203(b), inserted provi- sion relating to the authority of the Secretary, not- withstanding subsec. (c)(1) of this section, to establish monthly rent exceeding fair market rental where cost levels so require or where necessary to the implementa- tion of a local housing assistance plan. Subsec. (j). Pub. L. 96–399, § 308(c)(3), substituted ‘‘manufactured home’’ for ‘‘mobile home’’ wherever ap- pearing. 1979—Subsec. (c)(3). Pub. L. 96–153, § 202(b), sub- stituted new provisions for computation of the amount of monthly assistance payments with respect to dwell- ing units and laid down criteria to be followed by the Secretary in regard to payments to families with dif- ferent income levels. Subsec. (d)(1)(A). Pub. L. 96–153, § 206(b)(1), sub- stituted ‘‘Secretary and the agency, except that the tenant selection criteria used by the owner shall give preference to families which occupy substandard hous- ing or are involuntarily displaced at the time they are seeking assistance under this section.’’ for ‘‘Secretary and the agency;’’. Subsec. (e)(1). Pub. L. 96–153, § 211(b), substituted ‘‘term of less than two hundred and forty months’’ for ‘‘term of less than one month’’. Subsec. (e)(2). Pub. L. 96–153, § 206(b)(2), substituted ‘‘performance of such responsibilities), except that the tenant selection criteria shall give preference to fami- lies which occupy substandard housing or are involun- tarily displaced at the time they are seeking housing assistance under this section’’ for ‘‘performance of such responsibilities)’’. Subsec. (k). Pub. L. 96–153, § 210, added subsec. (k). 1978—Subsec. (e)(5). Pub. L. 95–557, § 206(e), added par. (5). Subsec. (i). Pub. L. 95–557, § 206(d)(1), added subsec. (i). Subsec. (j). Pub. L. 95–557, § 206(f), added subsec. (j). 1977—Subsec. (c), Pub. L. 95–128, § 201(c), (d), inserted in par. (1) prohibition against high-rise elevator projects for families with children after Oct. 12, 1977, and struck out from par. (4) provision which prohibited payment after the sixty-day period if the unoccupied unit was in a project insured under the National Hous- ing Act, except pursuant to section 1715z–9 of title 12. Subsec. (d)(3). Pub. L. 95–128, § 201(e)(1), added par. (3). Subsec. (e)(1). Pub. L. 95–24 substituted ‘‘three hun- dred and sixty months, except that such term may not exceed two hundred and forty months in the case of a project financed with assistance of a loan made by, or insured, guaranteed or intended for purchase by, the Federal Government, other than pursuant to section 1715z–9 of title 12’’ for ‘‘two hundred and forty months’’ and ‘‘Notwithstanding the preceding sentence, in the case of’’ for ‘‘In the case of’’. Subsec. (e)(2). Pub. L. 95–128, § 201(e)(2), inserted pro- vision respecting the Secretary’s approval of any public housing agency for assumption of management and maintenance responsibilities of dwelling units under the preceding sentence. 1976—Subsec. (c)(4). Pub. L. 94–375, § 2(d), inserted pro- vision extending payments to newly constructed or substantially rehabilitated unoccupied units in an amount equal to the debt service of such unit for a pe- riod not to exceed one year, provided that a good faith effort is being made to fill the unit, the unit provides decent and safe housing, the unit is not insured under the National Housing Act, except pursuant to section 1715z–9 of title 12, and the revenues from the project do not exceed the cost. Subsec. (e)(1). Pub. L. 94–375, § 2(g), inserted ‘‘or the Farmers’ Home Administration’’ after ‘‘State or local agency’’. Subsec. (f)(6). Pub. L. 94–375, § 2(e), added par. (6). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2022 AMENDMENT Amendment by Pub. L. 117–328 effective 2 years after Dec. 29, 2022, see section 601(h) of div. AA of Pub. L. 117–328, set out as a note under section 1701q of Title 12, Banks and Banking. EFFECTIVE DATE OF 2020 AMENDMENT Amendment by section 101(b)(2) of div. Q of Pub. L. 116–260 effective 2 years after Dec. 27, 2020, see section 101(h) of div. Q of Pub. L. 116–260, set out as a note under section 1701q of Title 12, Banks and Banking. Amendment by section 103(b), (c) of div. Q of Pub. L. 116–260 not applicable to housing choice voucher assist- ance made available pursuant to subsec. (x) of this sec- tion in use on behalf of an assisted family as of Dec. 27, 2020, see section 103(d) of div. Q of Pub. L. 116–260, set out as a note under section 1437a of this title. EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115–174, title III, § 304(c), May 24, 2018, 132 Stat. 1339, provided that: ‘‘Subsections (a) and (b) [amending this section, enacting provisions set out as a note under this section, amending provisions set out as notes under sections 5201 and 5220 of Title 12, Banks and Banking, and repealing provisions set out as a note under this section] shall take effect on the date that is 30 days after the date of enactment of this Act [May 24, 2018].’’ EFFECTIVE DATE OF 2016 AMENDMENT Pub. L. 114–201, title I, § 101(b), July 29, 2016, 130 Stat. 786, provided that: ‘‘The Secretary of Housing and Urban Development shall issue notice or regulations to implement subsection (a) of this section [amending this section] and such subsection shall take effect upon such issuance.’’ [Amendment by section 101(a)(1) effec- tive June 6, 2024, based on notice issued May 7, 2024, see 89 F.R. 38224.] Amendment by section 102(d)–(f) of Pub. L. 114–201 ef- fective upon the issuance of notice or regulations by Page 4621 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f the Secretary of Housing and Urban Development im- plementing section 102 of Pub. L. 114–201, except that such section 102 may only take effect upon the com- mencement of a calendar year, see section 102(h) of Pub. L. 114–201, set out as a note under section 1437a of this title. [Amendment by section 102(d) effective Jan. 1, 2017, based on notice issued Oct. 24, 2016, see 81 F.R. 73030. Amendment by section 102(e), (f) effective Jan. 1, 2024, based on notice issued Feb. 14, 2023, see 88 F.R. 9600, as corrected Feb. 28, 2023, 88 F.R. 12559.] Pub. L. 114–201, title I, § 106(b), July 29, 2016, 130 Stat. 800, provided that: ‘‘The Secretary of Housing and Urban Development shall issue notice or regulations to implement subsection (a) of this section [amending this section] and such subsection shall take effect upon such issuance.’’ [Amendment by section 106 effective June 6, 2024, based on notice issued May 7, 2024, see 89 F.R. 38224.] Pub. L. 114–201, title I, § 107(c), July 29, 2016, 130 Stat. 801, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall take effect upon the date of the enactment of this Act [July 29, 2016].’’ Pub. L. 114–201, title I, § 112(b), July 29, 2016, 130 Stat. 804, provided that: ‘‘The Secretary of Housing and Urban Development shall issue notice to implement the amendments made by subsection (a) [amending this section] and such amendments shall take effect upon such issuance.’’ [Amendment by section 112 effective June 6, 2024, based on notice issued May 7, 2024, see 89 F.R. 38224] EFFECTIVE DATE OF 2014 AMENDMENT Pub. L. 113–76, div. L, title II, § 220(b), Jan. 17, 2014, 128 Stat. 631, provided that: ‘‘The amendments in sub- section (a) [amending this section] shall take effect upon such date as the Secretary determines, in the Sec- retary’s sole discretion, through the Secretary’s publi- cation of such date in the Federal Register, as part of regulations promulgated, or a notice issued, by the Sec- retary to implement such amendments.’’ [Notice implementing certain provisions of section 220 of Pub. L. 113–76 in a limited fashion was published June 25, 2014, effective July 1, 2014, see 79 F.R. 35940.] EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the date on which final regulations implementing that amend- ment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade. TERMINATION DATE OF 2009 AMENDMENT Pub. L. 111–22, div. A, title VII, § 704, May 20, 2009, 123 Stat. 1662, as amended by Pub. L. 111–203, title XIV, § 1484(2), July 21, 2010, 124 Stat. 2204, which provided that title VII of div. A of Pub. L. 111–22 (amending this section and enacting provisions set out as notes under sections 5201 and 5220 of Title 12, Banks and Banking), and any amendments made by such title are repealed, and the requirements under such title shall terminate, on Dec. 31, 2014, was repealed by Pub. L. 115–174, title III, § 304(a), (c), May 24, 2018, 132 Stat. 1339, effective 30 days after May 24, 2018. EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of Title 7, Agriculture. Amendment by section 4002(b)(1)(B), (2)(Y) of Pub. L. 110–246 effective Oct. 1, 2008, see section 4407 of Pub. L. 110–246, set out as a note under section 1161 of Title 2, The Congress. EFFECTIVE DATE OF 2002 AMENDMENT Amendment by Pub. L. 107–116 effective Sept. 30, 2001, see section 603 of Pub. L. 107–116, set out as a note under section 1715n of Title 12, Banks and Banking. EFFECTIVE DATE OF 2000 AMENDMENT Pub. L. 106–569, title III, § 301(b), Dec. 27, 2000, 114 Stat. 2952, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall take effect immediately after the amendments made by section 555(c) of the Quality Housing and Work Responsibility Act of 1998 [Pub. L. 105–276, set out as an Effective Date of 1998 Amendment note below] take effect pursuant to such section.’’ Pub. L. 106–569, title IX, § 902(b), Dec. 27, 2000, 114 Stat. 3026, provided that: ‘‘The amendment under subsection (a) [amending this section] shall be made and shall apply— ‘‘(1) upon the enactment of this Act, if the Depart- ments of Veterans Affairs and Housing and Urban De- velopment, and Independent Agencies Appropriations Act, 2001 [H.R. 5482, as enacted by section 1(a)(1) of Pub. L. 106–377], is enacted before the enactment of this Act; and ‘‘(2) immediately after the enactment of such ap- propriations Act, if such appropriations Act is en- acted after the enactment of this Act.’’ Pub. L. 106–569, title IX, § 903(b), Dec. 27, 2000, 114 Stat. 3026, provided that: ‘‘The amendment under subsection (a) [amending this section] shall be made and shall apply— ‘‘(1) upon the enactment of this Act, if the Depart- ments of Veterans Affairs and Housing and Urban De- velopment, and Independent Agencies Appropriations Act, 2001 [H.R. 5482, as enacted by section 1(a)(1) of Pub. L. 106–377], is enacted before the enactment of this Act; and ‘‘(2) immediately after the enactment of such ap- propriations Act, if such appropriations Act is en- acted after the enactment of this Act.’’ EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–276, title II, § 209(b), Oct. 21, 1998, 112 Stat. 2485, provided that: ‘‘This section [amending this sec- tion] shall take effect 60 days after the later of October 1, 1998 or the date of the enactment of this Act [Oct. 21, 1998].’’ Amendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as other- wise provided, with provision that Secretary may im- plement amendment before such date, except to extent that such amendment provides otherwise, and with sav- ings provision, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of this title. Amendment by section 514(b)(1) of Pub. L. 105–276 ef- fective and applicable beginning upon Oct. 21, 1998, see section 514(g) of Pub. L. 105–276, set out as a note under section 1701s of Title 12, Banks and Banking. Pub. L. 105–276, title V, § 545(c), Oct. 21, 1998, 112 Stat. 2604, provided that: ‘‘Notwithstanding the amendment made by subsection (a) of this section [amending this section], any amendments to section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) that are contained in title II of this Act [see Tables for classi- fication] shall apply with respect to the provision of as- sistance under such section during the period before implementation (pursuant to section 559 of this title [set out as a Regulations and Transition Provisions note below]) of such section 8(o) as amended by sub- section (a) of this section.’’ Pub. L. 105–276, title V, § 549(a)(3), Oct. 21, 1998, 112 Stat. 2607, provided that: ‘‘The amendments under this subsection [amending this section] are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998], and shall apply thereafter, notwithstanding section 203 of the Departments of Vet- erans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 [section 101(e) [title II, § 203] of Pub. L. 104–134, amending this Page 4622 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f section and enacting provisions set out as an Effective and Termination Dates of 1996 Amendments note below] (42 U.S.C. 1437f note) or any other provision of law (including the expiration of the applicability of such section 203 or any repeal of such section 203).’’ Pub. L. 105–276, title V, § 554, Oct. 21, 1998, 112 Stat. 2611, provided that: ‘‘Notwithstanding section 203(d) of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appro- priations Act, 1996 (as contained in section 101(e) of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Public Law 104–134; 42 U.S.C. 1437f note) [see Effective and Termination Dates of 1996 Amendments note below]), section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) is amended by striking sub- section (t). This section shall apply beginning upon, and the amendment made by this section is made on, and shall apply beginning upon, the date of the enact- ment of this Act [Oct. 21, 1998].’’ Pub. L. 105–276, title V, § 555(c), Oct. 21, 1998, 112 Stat. 2613, provided that: ‘‘This section [amending this sec- tion and enacting provisions set out as a note below] shall take effect on, and the amendments made by this section are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998].’’ Amendment by section 565(c) of Pub. L. 105–276 effec- tive and applicable beginning upon Oct. 21, 1998, see sec- tion 565(e) of Pub. L. 105–276, set out as a note under section 1437d of this title. EFFECTIVE AND TERMINATION DATES OF 1996 AMENDMENTS Pub. L. 104–134, title I, § 101(e) [title II, § 203(d)], Apr. 26, 1996, 110 Stat. 1321–257, 1321–281, as amended by Pub. L. 104–204, title II, § 201(e), Sept. 26, 1996, 110 Stat. 2893; Pub. L. 105–65, title II, § 201(b), Oct. 27, 1997, 111 Stat. 1364, provided that: ‘‘The provisions of this section [amending this section] shall be effective for fiscal years 1996, 1997, and 1998 only.’’ Amendment by section 402(d)(2), (3), (6)(A)(iii), (iv) of Pub. L. 104–99 effective Jan. 26, 1996, only for fiscal years 1996, 1997, and 1998, and to cease to be effective Oct. 21, 1998, see section 402(f) of Pub. L. 104–99, as amended, and section 514(f) of Pub. L. 105–276, set out as notes under section 1437a of this title. EFFECTIVE AND TERMINATION DATES OF 1994 AMENDMENT Amendment by Pub. L. 103–327 enacting subsec. (aa), effective only during fiscal year 1995, see title II in part of Pub. L. 103–327, set out as a note under section 1715n of Title 12, Banks and Banking. EFFECTIVE DATE OF 1992 AMENDMENT Amendment by subtitles B through F of title VI [§§ 621–685] of Pub. L. 102–550 applicable upon expiration of 6-month period beginning Oct. 28, 1992, except as oth- erwise provided, see section 13642 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Amendment by section 289(b)(1) of Pub. L. 101–625, re- pealing subsec. (e)(2) of this section, effective Oct. 1, 1991; however, provisions of subsec. (e)(2) to remain in effect with respect to single room occupancy dwellings as authorized by subchapter IV (§ 11361 et seq.) of chap- ter 119 of this title, see section 12839(a)(4), (b) of this title. EFFECTIVE DATE OF 1983 AMENDMENT; SAVINGS PROVISION Pub. L. 98–181, title I [title II, § 209(b)], Nov. 30, 1983, 97 Stat. 1183, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall take effect on October 1, 1983, except that the provisions repealed shall remain in effect— ‘‘(1) with respect to any funds obligated for a viable project under section 8 of the United States Housing Act of 1937 [this section] prior to January 1, 1984; and ‘‘(2) with respect to any project financed under sec- tion 202 of the Housing Act of 1959 [12 U.S.C. 1701q].’’ EFFECTIVE DATE OF 1981 AMENDMENT Amendments by sections 322(e) and 329H(a) of Pub. L. 97–35 effective Oct. 1, 1981, and amendments by sections 324, 325, and 326(a) of Pub. L. 97–35 applicable with re- spect to contracts entered into on or after Oct. 1, 1981, see section 371 of Pub. L. 97–35, set out as an Effective Date note under section 3701 of Title 12, Banks and Banking. Pub. L. 97–35, title III, § 326(e)(2), Aug. 13, 1981, 95 Stat. 407, provided that: ‘‘The amendment made by para- graph (1) [amending this section] shall apply with re- spect to leases entered into on or after October 1, 1981.’’ EFFECTIVE DATE OF 1979 AMENDMENT Amendment by section 202(b) of Pub. L. 96–153 effec- tive Jan. 1, 1980, except with respect to amount of ten- ant contribution required of families whose occupancy commenced prior to such date, see section 202(c) of Pub. L. 96–153, set out as a note under section 1437a of this title. EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–557, title II, § 206(d)(2), Oct. 31, 1978, 92 Stat. 2092, provided that: ‘‘The amendment made by this sub- section [amending this section] shall become effective with respect to contracts entered into on or after 270 days following the date of enactment of this Act [Oct. 31, 1978].’’ Amendment by section 206(e), (f) of Pub. L. 95–557 ef- fective Oct. 1, 1978, see section 206(h) of Pub. L. 95–557, set out as a note under section 1437c of this title. EFFECTIVE DATE Section effective not later than Jan. 1, 1975, see sec- tion 201(b) of Pub. L. 93–383, set out as a note under sec- tion 1437 of this title. APPLICABILITY OF 1994 AMENDMENTS Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2315, third par., provided that: ‘‘The immediately foregoing amendment [amending subsec. (c)(2)(A) of this section by authorizing modification of rent adjustment where adjusted rent exceeds fair market rental] shall apply to all contracts for new construction, substantial rehabili- tation, and moderate rehabilitation projects under which rents are adjusted under section 8(c)(2)(A) of such Act [subsec. (c)(2)(A) of this section] by applying an annual adjustment factor.’’ Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2315, fifth par., provided that: ‘‘The immediately foregoing [amending subsec. (c)(2)(A) of this section by inserting two sentences at end authorizing reduction of annual adjustment factor in certain circumstances] shall here- after apply to all contracts that are subject to section 8(c)(2)(A) of such Act [subsec. (c)(2)(A) of this section] and that provide for rent adjustments using an annual adjustment factor.’’ REGULATIONS AND TRANSITION PROVISIONS Pub. L. 105–276, title V, § 559, Oct. 21, 1998, 112 Stat. 2615, provided that: ‘‘(a) INTERIM REGULATIONS.—The Secretary of Hous- ing and Urban Development shall issue such interim regulations as may be necessary to implement the amendments made by this subtitle [subtitle C (§§ 545–559) of title V of Pub. L. 105–276, see Tables for classification] and other provisions in this title [see Tables for classification] which relate to section 8(o) of the United States Housing Act of 1937 [42 U.S.C. 1437f(o)]. ‘‘(b) FINAL REGULATIONS.—The Secretary shall issue final regulations necessary to implement the amend- ments made by this subtitle and other provisions in this title which relate to section 8(o) of the United States Housing Act of 1937 [42 U.S.C. 1437f(o)] not later then 1 year after the date of the enactment of this Act [Oct. 21, 1998]. ‘‘(c) FACTORS FOR CONSIDERATION.—Before the publi- cation of the final regulations under subsection (b), in Page 4623 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f addition to public comments invited in connection with the publication of the interim rule, the Secretary shall— ‘‘(1) seek recommendations on the implementation of sections 8(o)(6)(B), 8(o)(7)(B), and 8(o)(10)(D) of the United States Housing Act of 1937 [42 U.S.C. 1437f(o)(6)(B), (7)(B), (10)(D)] and of renewals of expir- ing tenant-based assistance from organizations rep- resenting— ‘‘(A) State or local public housing agencies; ‘‘(B) owners and managers of tenant-based hous- ing assisted under section 8 of the United States Housing Act of 1937; ‘‘(C) families receiving tenant-based assistance under section 8 of the United States Housing Act of 1937; and ‘‘(D) legal service organizations; and ‘‘(2) convene not less than 2 public forums at which the persons or organizations making recommenda- tions under paragraph (1) may express views con- cerning the proposed disposition of the recommenda- tions. ‘‘(d) CONVERSION ASSISTANCE.— ‘‘(1) IN GENERAL.—The Secretary may provide for the conversion of assistance under the certificate and voucher programs under subsections (b) and (o) of sec- tion 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f(b), (o)], as in effect before the applica- bility of the amendments made by this subtitle, to the voucher program established by the amendments made by this subtitle. ‘‘(2) CONTINUED APPLICABILITY.—The Secretary may apply the provisions of the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.], or any other provi- sion of law amended by this subtitle, as those provi- sions were in effect immediately before the date of the enactment of this Act [Oct. 21, 1998] (except that such provisions shall be subject to any amendments to such provisions that may be contained in title II of this Act [see Tables for classification]), to assist- ance obligated by the Secretary before October 1, 1999, for the certificate or voucher program under sec- tion 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f], if the Secretary determines that such action is necessary for simplification of program ad- ministration, avoidance of hardship, or other good cause. ‘‘(e) EFFECTIVE DATE.—This section shall take effect on the date of the enactment of this Act [Oct. 21, 1998].’’ REGULATIONS Pub. L. 105–276, title V, § 556(b), Oct. 21, 1998, 112 Stat. 2613, directed the Secretary of Housing and Urban De- velopment to implement the amendment made by sub- sec. (a), adding 42 U.S.C. 1437f(dd), through notice, not later than Dec. 31, 1998, and to issue final regulations, not later than one year after Oct. 21, 1998. HUD Notice 98–65 was issued Dec. 30, 1998, and final regulations were published in the Federal Register Oct. 21, 1999, effective Nov. 22, 1999. See 64 F.R. 56882. For provisions requiring Secretary of Housing and Urban Development to issue regulations necessary to implement amendment to this section by Pub. L. 103–233, see section 101(f) of Pub. L. 103–233, set out as a note under section 1701z–11 of Title 12, Banks and Banking. For provision requiring that not later than expira- tion of the 180-day period beginning Oct. 28, 1992, the Secretary of Housing and Urban Development shall issue regulations implementing amendments to this section by section 545 of Pub. L. 101–625, see section 104 of Pub. L. 102–550, set out as a note under section 1437d of this title. Pub. L. 102–550, title I, § 149, Oct. 28, 1992, 106 Stat. 3715, provided that: ‘‘The Secretary of Housing and Urban Development shall issue any final regulations necessary to carry out the amendments made by sec- tion 547 of the Cranston-Gonzalez National Affordable Housing Act [Pub. L. 101–625, amending this section] not later than the expiration of the 180-day period be- ginning on the date of the enactment of this Act [Oct. 28, 1992]. The regulations shall be issued after notice and opportunity for public comment 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) and shall take effect upon the expiration of the 30-day period beginning upon issuance.’’ Pub. L. 102–550, title I, § 151, Oct. 28, 1992, 106 Stat. 3716, provided that: ‘‘The Secretary of Housing and Urban Development shall issue any final regulations necessary to carry out the provisions of section 555 of the Cranston-Gonzalez National Affordable Housing Act [Pub. L. 101–625] (42 U.S.C. 1437f note) not later than the expiration of the 180-day period beginning on the date of the enactment of this Act [Oct. 28, 1992]. The regulations shall be issued after notice and oppor- tunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwith- standing subsections (a)(2), (b)(B), and (d)(3) of such section) and shall take effect upon the expiration of the 30-day period beginning upon issuance.’’ SAVINGS PROVISION Pub. L. 106–377, § 1(a)(1) [title II, § 232(b)], Oct. 27, 2000, 114 Stat. 1441, 1441A–34, as amended by Pub. L. 110–28, title VI, § 6904, May 25, 2007, 121 Stat. 185, provided that: ‘‘In the case of any dwelling unit that, upon the date of the enactment of this Act [Oct. 27, 2000], is assisted under a housing assistance payment contract under section 8(o)(13) [of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13))] as in effect before such en- actment, or under section 8(d)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437f(d)(2)) as in effect be- fore the enactment of the Quality Housing and Work Responsibility Act of 1998 (title V of Public Law 105–276) [approved Oct. 21, 1998], assistance may be re- newed or extended under such section 8(o)(13), as amended by subsection (a), provided that the initial contract term and rent of such renewed or extended as- sistance shall be determined pursuant to subparagraphs (F) and (H), and subparagraphs (C) and (D) of such sec- tion shall not apply to such extensions or renewals.’’ CONSTRUCTION OF 2022 AMENDMENT Nothing in amendment made by Pub. L. 117–328 to be construed to preempt or limit applicability of certain State or local laws relating to smoke alarms, see sec- tion 601(i) of div. AA of Pub. L. 117–328, set out as a note under section 1701q of Title 12, Banks and Banking. CONSTRUCTION OF 2020 AMENDMENT Nothing in amendment made by section 101(b)(2) of Pub. L. 116–260 to be construed to preempt or limit ap- plicability of certain State or local laws relating to carbon monoxide devices, see section 101(j) of div. Q of Pub. L. 116–260, set out as a note under section 1437a of this title. RESTORATION OF TERMINATED PROVISIONS Pub. L. 115–174, title III, § 304(b), May 24, 2018, 132 Stat. 1339, provided that: ‘‘Sections 701 through 703 of the Protecting Tenants at Foreclosure Act of 2009 [title VII of div. A of Pub. L. 111–22, amending this section and enacting provisions set out as notes under section 5201 and 5220 of Title 12, Banks and Banking], the provi- sions of law amended by such sections, and any regula- tions promulgated pursuant to such sections, as were in effect on December 30, 2014, are restored and revived.’’ EMERGENCY HOUSING VOUCHERS Pub. L. 117–2, title III, § 3202, Mar. 11, 2021, 135 Stat. 58, provided that: ‘‘(a) APPROPRIATION.—In addition to amounts other- wise available, there is appropriated to the Secretary of Housing and Urban Development (in this section re- ferred to as the ‘Secretary’) for fiscal year 2021, out of any money in the Treasury not otherwise appropriated, $5,000,000,000, to remain available until September 30, 2030, for— Page 4624 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(1) incremental emergency vouchers under sub- section (b); ‘‘(2) renewals of the vouchers under subsection (b); ‘‘(3) fees for the costs of administering vouchers under subsection (b) and other eligible expenses de- fined by notice to prevent, prepare, and respond to coronavirus to facilitate the leasing of the emergency vouchers, such as security deposit assistance and other costs related to retention and support of par- ticipating owners; and ‘‘(4) adjustments in the calendar year 2021 section 8 renewal funding allocation, including mainstream vouchers, for public housing agencies that experience a significant increase in voucher per-unit costs due to extraordinary circumstances or that, despite taking reasonable cost savings measures, would otherwise be required to terminate rental assistance for families as a result of insufficient funding. ‘‘(b) EMERGENCY VOUCHERS.— ‘‘(1) IN GENERAL.—The Secretary shall provide emergency rental assistance vouchers under sub- section (a), which shall be tenant-based rental assist- ance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)). ‘‘(2) QUALIFYING INDIVIDUALS OR FAMILIES DEFINED.— For the purposes of this section, qualifying individ- uals or families are those who are— ‘‘(A) homeless (as such term is defined in section 103(a) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302(a)); ‘‘(B) at risk of homelessness (as such term is de- fined in section 401(1) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11360(1))); ‘‘(C) fleeing, or attempting to flee, domestic vio- lence, dating violence, sexual assault, stalking, or human trafficking, as defined by the Secretary; or ‘‘(D) recently homeless, as determined by the Sec- retary, and for whom providing rental assistance will prevent the family’s homelessness or having high risk of housing instability. ‘‘(3) ALLOCATION.—The Secretary shall notify public housing agencies of the number of emergency vouch- ers provided under this section to be allocated to the agency not later than 60 days after the date of the en- actment of this Act [Mar. 11, 2021], in accordance with a formula that includes public housing agency capacity and ensures geographic diversity, including with respect to rural areas, among public housing agencies administering the Housing Choice Voucher program. ‘‘(4) TERMS AND CONDITIONS.— ‘‘(A) ELECTION TO ADMINISTER.—The Secretary shall establish a procedure for public housing agen- cies to accept or decline the emergency vouchers allocated to the agency in accordance with the for- mula under subparagraph (3). ‘‘(B) FAILURE TO USE VOUCHERS PROMPTLY.—If a public housing agency fails to lease its authorized vouchers under subsection (b) on behalf of eligible families within a reasonable period of time, the Secretary may revoke and redistribute any un- leased vouchers and associated funds, including ad- ministrative fees and costs referred to in subsection (a)(3), to other public housing agencies according to the formula under paragraph (3). ‘‘(5) WAIVERS AND ALTERNATIVE REQUIREMENTS.—The Secretary may waive or specify alternative require- ments for any provision of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) or regulation appli- cable to such statute other than requirements related to fair housing, nondiscrimination, labor standards, and the environment, upon a finding that the waiver or alternative requirement is necessary to expedite or facilitate the use of amounts made available in this section. ‘‘(6) TERMINATION OF VOUCHERS UPON TURNOVER.— After September 30, 2023, a public housing agency may not reissue any vouchers made available under this section when assistance for the family assisted ends. ‘‘(c) TECHNICAL ASSISTANCE AND OTHER COSTS.—The Secretary may use not more $20,000,000 of the amounts made available under this section for the costs to the Secretary of administering and overseeing the imple- mentation of this section and the Housing Choice Voucher program generally, including information technology, financial reporting, and other costs. Of the amounts set aside under this subsection, the Secretary may use not more than $10,000,000, without competi- tion, to make new awards or increase prior awards to existing technical assistance providers to provide an immediate increase in capacity building and technical assistance to public housing agencies. ‘‘(d) IMPLEMENTATION.—The Secretary may imple- ment the provisions of this section by notice.’’ MOBILITY DEMONSTRATION PROGRAM Pub. L. 116–6, div. G, title II, § 235, Feb. 15, 2019, 133 Stat. 465, provided that: ‘‘(a) AUTHORITY.—The Secretary of Housing and Urban Development (in this section referred to as the ‘Secretary’) may carry out a mobility demonstration program to enable public housing agencies to admin- ister housing choice voucher assistance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) in a manner designed to encourage families re- ceiving such voucher assistance to move to lower-pov- erty areas and expand access to opportunity areas. ‘‘(b) SELECTION OF PHAS.— ‘‘(1) REQUIREMENTS.—The Secretary shall establish requirements for public housing agencies to partici- pate in the demonstration program under this sec- tion, which shall provide that the following public housing agencies may participate: ‘‘(A) Public housing agencies that together— ‘‘(i) serve areas with high concentrations of holders of rental assistance vouchers under sec- tion 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) in poor, low-opportunity neigh- borhoods; and ‘‘(ii) have an adequate number of moderately priced rental units in higher-opportunity areas. ‘‘(B) Planned consortia or partial consortia of public housing agencies that— ‘‘(i) include at least one agency with a high-per- forming Family Self-Sufficiency (FSS) program; and ‘‘(ii) will enable participating families to con- tinue in such program if they relocate to the ju- risdiction served by any other agency of the con- sortium. ‘‘(C) Planned consortia or partial consortia of public housing agencies that— ‘‘(i) serve jurisdictions within a single region; ‘‘(ii) include one or more small agencies; and ‘‘(iii) will consolidate mobility focused oper- ations. ‘‘(D) Such other public housing agencies as the Secretary considers appropriate. ‘‘(2) SELECTION CRITERIA.—The Secretary shall es- tablish competitive selection criteria for public hous- ing agencies eligible under paragraph (1) to partici- pate in the demonstration program under this sec- tion. ‘‘(3) RANDOM SELECTION OF FAMILIES.—The Sec- retary may require participating agencies to use a randomized selection process to select among the families eligible to receive mobility assistance under the demonstration program. ‘‘(c) REGIONAL HOUSING MOBILITY PLAN.—The Sec- retary shall require each public housing agency apply- ing to participate in the demonstration program under this section to submit a Regional Housing Mobility Plan (in this section referred to as a ‘Plan’), which shall— ‘‘(1) identify the public housing agencies that will participate under the Plan and the number of vouch- ers each participating agency will make available out of their existing programs in connection with the demonstration; Page 4625 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(2) identify any community-based organizations, nonprofit organizations, businesses, and other enti- ties that will participate under the Plan and describe the commitments for such participation made by each such entity; ‘‘(3) identify any waivers or alternative require- ments under subparagraph (e) requested for the exe- cution of the Plan; ‘‘(4) identify any specific actions that the public housing agencies and other entities will undertake to accomplish the goals of the demonstration, which shall include a comprehensive approach to enable a successful transition to opportunity areas and may include counseling and continued support for fami- lies; ‘‘(5) specify the criteria that the public housing agencies would use to identify opportunity areas under the plan; ‘‘(6) provide for establishment of priority and pref- erences for participating families, including a pref- erence for families with young children, as such term is defined by the Secretary, based on regional housing needs and priorities; and ‘‘(7) comply with any other requirements estab- lished by the Secretary. ‘‘(d) FUNDING FOR MOBILITY-RELATED SERVICES.— ‘‘(1) USE OF ADMINISTRATIVE FEES.—Public housing agencies participating in the demonstration program under this section may use administrative fees under section 8(q) of the United States Housing Act of 1937 (42 U.S.C. 1437f(q)), their administrative fee reserves, and funding from private entities to provide mobil- ity-related services in connection with the dem- onstration program, including services such as coun- seling, portability coordination, landlord outreach, security deposits, and administrative activities asso- ciated with establishing and operating regional mo- bility programs. ‘‘(2) USE OF HOUSING ASSISTANCE FUNDS.—Public housing agencies participating in the demonstration under this section may use housing assistance pay- ments funds under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) for security de- posits if necessary to enable families to lease units with vouchers in designated opportunity areas. ‘‘(e) WAIVERS; ALTERNATIVE REQUIREMENTS.— ‘‘(1) WAIVERS.—To allow for public housing agencies to implement and administer their Regional Housing Mobility Plans, the Secretary may waive or specify alternative requirements for the following provisions of the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.]: ‘‘(A) Sections 8(o)(7)(A) [42 U.S.C. 1437f (o)(7)(A)] and 8(o)(13)(E)(i)[42 U.S.C. 1437f (o)(13)(E)(i)] (relat- ing to the term of a lease and mobility require- ments). ‘‘(B) Section 8(o)(13)(C)(i) [42 U.S.C. 1437f (o)(13)(C)(i)](relating to the public housing plan for an agency). ‘‘(C) Section 8(r)(2) [42 U.S.C. 1437f(r)(2)] (relating to the responsibility of a public housing agency to administer ported assistance). ‘‘(2) ALTERNATIVE REQUIREMENTS FOR CONSORTIA.— The Secretary shall provide alternative administra- tive requirements for public housing agencies in a se- lected region to— ‘‘(A) form a consortium that has a single housing choice voucher funding contract; or ‘‘(B) enter into a partial consortium to operate all or portions of the Regional Housing Mobility Plan, which may include agencies participating in the Moving To Work Demonstration program. ‘‘(3) EFFECTIVE DATE.—Any waiver or alternative re- quirements pursuant to this subsection shall not take effect before the expiration of the 10-day period be- ginning upon publication of notice of such waiver or alternative requirement in the Federal Register. ‘‘(f) IMPLEMENTATION.—The Secretary may implement the demonstration, including its terms, procedures, re- quirements, and conditions, by notice. ‘‘(g) EVALUATION.—Not later than five years after im- plementation of the regional housing mobility pro- grams under the demonstration program under this section, the Secretary shall submit to the Congress and publish in the Federal Register a report evaluating the effectiveness of the strategies pursued under the dem- onstration, subject to the availability of funding to conduct the evaluation. Through official websites and other methods, the Secretary shall disseminate interim findings as they become available, and shall, if prom- ising strategies are identified, notify the Congress of the amount of funds that would be required to expand the testing of these strategies in additional types of public housing agencies and housing markets. ‘‘(h) TERMINATION.—The demonstration program under this section shall terminate on October 1, 2028.’’ RENTAL ASSISTANCE DEMONSTRATION Pub. L. 112–55, div. C, title II, Nov. 18, 2011, 125 Stat. 673, as amended by Pub. L. 113–76, div. L, title II, § 239, Jan. 17, 2014, 128 Stat. 635; Pub. L. 113–235, div. K, title II, § 234, Dec. 16, 2014, 128 Stat. 2757; Pub. L. 114–113, div. L, title II, § 237, Dec. 18, 2015, 129 Stat. 2897; Pub. L. 115–31, div. K, title II, § 239, May 5, 2017, 131 Stat. 789; Pub. L. 115–141, div. L, title II, § 237, Mar. 23, 2018, 132 Stat. 1038; Pub. L. 117–103, div. L, title II, § 236, Mar. 15, 2022, 136 Stat. 763; Pub. L. 118–42, div. F, title II, § 231, Mar. 9, 2024, 138 Stat. 382, provided that: ‘‘To conduct a demonstration designed to preserve and improve public housing and certain other multifamily housing through the voluntary conversion of properties with assistance under section 9 of the United States Housing Act of 1937 [42 U.S.C. 1437g], (hereinafter, ‘the Act’), or the mod- erate rehabilitation program under section 8(e)(2) of the Act [42 U.S.C. 1437f(e)(2)], to properties with assist- ance under a project-based subsidy contract under sec- tion 8 of the Act [42 U.S.C. 1437f], which shall be eligible for renewal under section 524 of the Multifamily As- sisted Housing Reform and Affordability Act of 1997 [Pub. L. 105–65, set out below], or assistance under sec- tion 8(o)(13) of the Act [42 U.S.C. 1437f(o)(13)], the Sec- retary may transfer amounts provided through con- tracts under section 8(e)(2) of the Act or under the headings ‘Public Housing Capital Fund’, ‘Public Hous- ing Operating Fund’, and ‘Public Housing Fund’ to the headings ‘Tenant-Based Rental Assistance’ or ‘Project- Based Rental Assistance’ (herein the ‘First Compo- nent’): Provided, That the initial long-term contract under which converted assistance is made available may allow for rental adjustments only by an operating cost factor established by the Secretary, and shall be subject to the availability of appropriations for each year of such term: Provided further, That project appli- cations may be received under this demonstration until September 30, 2029: Provided further, That any increase in cost for ‘Tenant-Based Rental Assistance’ or ‘Project-Based Rental Assistance’ associated with such conversion in excess of amounts made available under this heading shall be equal to amounts transferred from ‘Public Housing Capital Fund’ and ‘Public Housing Op- erating Fund’ or other account from which it was transferred: Provided further, That not more than 455,000 units currently receiving assistance under sec- tion 9 or section 8(e)(2) of the Act shall be converted under the authority provided under this heading: Pro- vided further, That at properties with assistance under section 9 of the Act [42 U.S.C. 1437g] requesting to par- tially convert such assistance, and where an event under section 18 of the Act [42 U.S.C. 1437p] occurs that results in the eligibility for tenant protection vouchers under section 8(o) of the Act [42 U.S.C. 1437f(o)], the Secretary may convert the tenant protection voucher assistance to assistance under a project-based subsidy contract under section 8 of the Act, which shall be eli- gible for renewal under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 [Pub. L. 105–65, set out below], or assistance under sec- tion 8(o)(13) of the Act, so long as the property meets any additional requirements established by the Sec- retary to facilitate conversion: Provided further, That Page 4626 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f to facilitate the conversion of assistance under the pre- vious proviso, the Secretary may transfer an amount equal to the total amount that would have been allo- cated for tenant protection voucher assistance for prop- erties that have requested such conversions from amounts made available for tenant protection voucher assistance under the heading ‘Tenant-Based Rental As- sistance’ to the heading ‘Project-Based Rental Assist- ance’: Provided further, That at properties with assist- ance previously converted hereunder to assistance under the heading ‘Project-Based Rental Assistance,’ which are also separately assisted under section 8(o)(13) of the Act, the Secretary may, with the consent of the public housing agency and owner, terminate such project-based subsidy contracts and immediately enter into one new project-based subsidy contract under sec- tion 8 of the Act, which shall be eligible for renewal under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997, subject to the re- quirement that any residents assisted under section 8(o)(13) of the Act at the time of such termination of such project-based subsidy contract shall retain all rights accrued under section 8(o)(13)(E) of the Act under the new project-based subsidy contract and section 8(o)(13)(F)(iv) of the Act shall not apply: Provided fur- ther, That to carry out the previous proviso, the Sec- retary may transfer from the heading ‘Tenant-Based Rental Assistance’ to the heading ‘Project-Based Rent- al Assistance’ an amount equal to the amounts associ- ated with such terminating contract under section 8(o)(13) of the Act: Provided further, That tenants of such properties with assistance converted from assist- ance under section 9 shall, at a minimum, maintain the same rights under such conversion as those provided under sections 6 [42 U.S.C. 1437d] and 9 of the Act: Pro- vided further, That the Secretary shall select properties from applications for conversion as part of this dem- onstration through a competitive process: Provided fur- ther, That in establishing criteria for such competition, the Secretary shall seek to demonstrate the feasibility of this conversion model to recapitalize and operate public housing properties (1) in different markets and geographic areas, (2) within portfolios managed by pub- lic housing agencies of varying sizes, and (3) by leveraging other sources of funding to recapitalize properties: Provided further, That the Secretary shall provide an opportunity for public comment on draft eli- gibility and selection criteria and procedures that will apply to the selection of properties that will partici- pate in the demonstration: Provided further, That the Secretary shall provide an opportunity for comment from residents of properties to be proposed for partici- pation in the demonstration to the owners or public housing agencies responsible for such properties: Pro- vided further, That the Secretary may waive or specify alternative requirements for (except for requirements related to fair housing, nondiscrimination, labor stand- ards, and the environment) any provision of section 8(o)(13) or any provision that governs the use of assist- ance from which a property is converted under the demonstration or funds made available under the head- ings of ‘Public Housing Capital Fund’, ‘Public Housing Operating Fund’, ‘Public Housing Fund’, ‘Self-Suffi- ciency Programs’, ‘Family Self-Sufficiency’[,] and ‘Project-Based Rental Assistance’, under this Act or any prior Act or any Act enacted during the period of conversion of assistance under the demonstration for properties with assistance converted under the dem- onstration, upon a finding by the Secretary that any such waivers or alternative requirements are necessary for the effective conversion of assistance under the demonstration or the ongoing availability of services for residents: Provided further, That the Secretary shall publish by notice in the Federal Register any waivers or alternative requirements pursuant to the previous proviso no later than 10 days before the effective date of such notice: Provided further, That the demonstra- tion may proceed after the Secretary publishes notice of its terms in the Federal Register: Provided further, That notwithstanding sections 3 [42 U.S.C. 1437a] and 16 [42 U.S.C. 1437n] of the Act, the conversion of assistance under the demonstration shall not be the basis for re- screening or termination of assistance or eviction of any tenant family in a property participating in the demonstration, and such a family shall not be consid- ered a new admission for any purpose, including com- pliance with income targeting requirements: Provided further, That in the case of a property with assistance converted under the demonstration from assistance under section 9 of the Act, section 18 of the Act [42 U.S.C. 1437p] shall not apply to a property converting assistance under the demonstration for all or substan- tially all of its units, the Secretary shall require own- ership or control of assisted units by a public or non- profit entity except as determined by the Secretary to be necessary pursuant to foreclosure, bankruptcy, or termination and transfer of assistance for material vio- lations or substantial default, in which case the pri- ority for ownership or control shall be provided to a ca- pable public or nonprofit entity, then a capable entity, as determined by the Secretary, shall require long- term renewable use and affordability restrictions for assisted units, and may allow ownership to be trans- ferred to a for-profit entity to facilitate the use of tax credits only if the public housing agency or a nonprofit entity preserves an interest in the property in a man- ner approved by the Secretary, and upon expiration of the initial contract and each renewal contract, the Sec- retary shall offer and the owner of the property shall accept renewal of the contract subject to the terms and conditions applicable at the time of renewal and the availability of appropriations each year of such re- newal: Provided further, That the Secretary may permit transfer of assistance at or after conversion under the demonstration to replacement units subject to the re- quirements in the previous proviso: Provided further, That the Secretary may establish the requirements for converted assistance under the demonstration through contracts, use agreements, regulations, or other means: Provided further, That the Secretary shall assess and publish findings regarding the impact of the conversion of assistance under the demonstration on the preserva- tion and improvement of public housing, the amount of private sector leveraging as a result of such conversion, and the effect of such conversion on tenants: Provided further, That conversions of assistance under the fol- lowing provisos herein shall be considered as the ‘Sec- ond Component’ and shall be authorized for fiscal year 2012 and thereafter: Provided further, That owners of properties assisted under section 101 of the Housing and Urban Development Act of 1965 [12 U.S.C. 1701s], section 236(f)(2) of the National Housing Act [12 U.S.C. 1715z–1(f)(2)], or section 8(e)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(e)(2)], for which an event after October 1, 2006 has caused or results in the termination of rental assistance or affordability re- strictions and the issuance of tenant protection vouch- ers under section 8(o) of the Act [42 U.S.C. 1437f(o)] shall be eligible, subject to requirements established by the Secretary, for conversion of assistance available for such vouchers or assistance contracts to assistance under a long term project-based subsidy contract under section 8 of the Act: Provided further, That owners of properties with a project rental assistance contract under section 202(c)(2) of the Housing Act of 1959 [12 U.S.C. 1701q(c)(2)] shall be eligible, subject to require- ments established by the Secretary, including but not limited to the subordination, restructuring, or both, of any capital advance documentation, including any note, mortgage, use agreement or other agreements, evidencing or securing a capital advance previously provided by the Secretary under section 202(c)(1) of the Housing Act of 1959 [12 U.S.C. 1701q(c)(1)] as necessary to facilitate the conversion of assistance while main- taining the affordability period and the designation of the property as serving elderly persons, and tenant con- sultation procedures, for conversion of assistance avail- able for such assistance contracts to assistance under a long term project-based subsidy contract under section 8 of the Act: Provided further, That owners of properties Page 4627 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f with a senior preservation rental assistance contract under section 811 of the American Homeownership and Economic Opportunity Act of 2000 [Pub. L. 106–569] (12 U.S.C. 1701q note), shall be eligible, subject to require- ments established by the Secretary as necessary to fa- cilitate the conversion of assistance while maintaining the affordability period and the designation of the property as serving elderly families, and tenant con- sultation procedures, for conversion of assistance avail- able for such assistance contracts to assistance under a long-term project-based subsidy contract under section 8 of the Act: Provided further, That owners of properties with a project rental assistance contract under section 811(d)(2) of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 8013(d)(2)], shall be eligible, sub- ject to requirements established by the Secretary, in- cluding but not limited to the subordination, restruc- turing, or both, of any capital advance documentation, including any note, mortgage, use agreement or other agreements, evidencing or securing a capital advance previously provided by the Secretary under section 811(d)(2) of the Cranston-Gonzalez National Affordable Housing Act as necessary to facilitate the conversion of assistance while maintaining the affordability period and the designation of the property as serving persons with disabilities, and tenant consultation procedures, for conversion of assistance contracts to assistance under a long term project-based subsidy contract under section 8 of the Act: Provided further, That long term project-based subsidy contracts under section 8 of the Act which are established under this Second Compo- nent shall have a term of no less than 20 years, with rent adjustments only by an operating cost factor es- tablished by the Secretary, which shall be eligible for renewal under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 [title V of Pub. L. 105–65] (42 U.S.C. 1437f note), or, subject to agreement of the administering public housing agency, to assistance under section 8(o)(13) of the Act, to which the limitation under subsection (B) of section 8(o)(13) of the Act shall not apply and for which the Secretary may waive or alter the provisions of subparagraphs (C) and (D) of section 8(o)(13) of the Act: Provided further, That contracts provided to properties converting as- sistance from section 101 of the Housing and Urban De- velopment Act of 1965 [12 U.S.C. 1701s] or section 236(f)(2) of the National Housing Act [12 U.S.C. 1715z–1(f)(2)] located in high-cost areas shall have ini- tial rents set at comparable market rents for the mar- ket area: Provided further, That the Secretary may waive or alter the requirements of section 8(c)(1)(A) of the Act for contracts provided to properties converting assistance from section 202(c)(2) of the Housing Act of 1959, section 811 of the American Homeownership and Economic Opportunity Act of 2000, or section 811(d)(2) of the Cranston-Gonzalez National Affordable Housing Act as necessary to ensure the ongoing provision and coordination of services or to avoid a reduction in project subsidy: Provided further, That conversions of assistance under the Second Component may not be the basis for re-screening or termination of assistance or eviction of any tenant family in a property partici- pating in the demonstration and such a family shall not be considered a new admission for any purpose, in- cluding compliance with income targeting: Provided further, That amounts made available under the head- ing ‘Rental Housing Assistance’ during the period of conversion under the Second Component, except for conversion of section 202 project rental assistance con- tracts, shall be available for project-based subsidy con- tracts entered into pursuant to the Second Component: Provided further, That amounts, including contract au- thority, recaptured from contracts following a conver- sion under the Second Component, except for conver- sion of section 202 project rental assistance contracts, are hereby rescinded and an amount of additional new budget authority, equivalent to the amount rescinded is hereby appropriated, to remain available until ex- pended for such conversions: Provided further, That the Secretary may transfer amounts made available under the heading ‘Rental Housing Assistance’, amounts made available for tenant protection vouchers under the heading ‘Tenant-Based Rental Assistance’ and spe- cifically associated with any such conversions, and amounts made available under the previous proviso as needed to the account under the ‘Project-Based Rental Assistance’ heading to facilitate conversion under the Second Component, except for conversion of section 202 project rental assistance contracts, and any increase in cost for ‘Project-Based Rental Assistance’ associated with such conversion shall be equal to amounts so transferred: Provided further, That the Secretary may transfer amounts made available under the headings ‘Housing for the Elderly’ and ‘Housing for Persons with Disabilities’ to the accounts under the headings ‘Project-Based Rental Assistance’ or ‘Tenant-Based Rental Assistance’ to facilitate the conversion of as- sistance from section 202(c)(2) of the Housing Act of 1959 [12 U.S.C. 1701q(c)(2)], section 811 of the American Homeownership and Economic Opportunity Act of 2000 [Pub. L. 106–569, 12 U.S.C. 1701q note], or section 811(d)(2) of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 8013(d)(2)] under the Second Component, and any increase in cost for ‘Project-Based Rental Assistance’ or ‘Tenant-Based Rental Assistance’ associated with such conversion shall be equal to amounts so transferred: Provided further, That with re- spect to the previous four provisos, the Comptroller General of the United States shall conduct a study of the long-term impact of the fiscal year 2012 and 2013 conversion of tenant protection vouchers to assistance under section 8(o)(13) of the Act on the ratio of tenant- based vouchers to project-based vouchers.’’ CONVERSION OF HUD CONTRACTS Pub. L. 110–289, div. A, title VI, § 1603, July 30, 2008, 122 Stat. 2825, provided that: ‘‘(a) IN GENERAL.—Notwithstanding any other provi- sion of law, the Secretary may, at the request of an owner of a multifamily housing project that exceeds 5,000 units to which a contract for project-based rental assistance under section 8 of the United States Housing Act of 1937 (‘Act’) (42 U.S.C. 1437f) and a Rental Assist- ance Payment contract is subject, convert such con- tracts to a contract for project-based rental assistance under section 8 of the Act. ‘‘(b) INITIAL RENEWAL.— ‘‘(1) At the request of an owner under subsection (a) made no later than 90 days prior to a conversion, the Secretary may, to the extent sufficient amounts are made available in appropriation Acts and notwith- standing any other law, treat the contemplated re- sulting contract as if such contract were eligible for initial renewal under section 524(a) of the Multi- Family Assisted Housing Reform and Affordability Act of 1997 [Pub. L. 105–65] (42 U.S.C. 1437f note) (‘MAHRA’) (42 U.S.C. 1437f note). ‘‘(2) A request by an owner pursuant to paragraph (1) shall be upon such terms and conditions as the Secretary may require. ‘‘(c) RESULTING CONTRACT.—The resulting contract shall— ‘‘(1) be subject to section 524(a) of MAHRA [Pub. L. 105–65] (42 U.S.C. 1437f note); ‘‘(2) be considered for all purposes a contract that has been renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note) for a term not to exceed 20 years; ‘‘(3) be subsequently renewable at the request of an owner, under any renewal option for which the project is eligible under MAHRA (42 U.S.C. 1437f note); ‘‘(4) contain provisions limiting distributions, as the Secretary determines appropriate, not to exceed 10 percent of the initial investment of the owner; ‘‘(5) be subject to the availability of sufficient amounts in appropriation Acts; and ‘‘(6) be subject to such other terms and conditions as the Secretary considers appropriate. ‘‘(d) INCOME TARGETING.—To the extent that assisted dwelling units, subject to the resulting contract under Page 4628 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f subsection (a), serve low-income families, as defined in section 3(b)(2) of the Act (42 U.S.C. 1437a(b)(2)) the units shall be considered to be in compliance with all income targeting requirements under the Act (42 U.S.C. 1437 et seq[.]). ‘‘(e) TENANT ELIGIBILITY.—Notwithstanding any other provision of law, each family residing in an assisted dwelling unit on the date of conversion of a contract under this section, subject to the resulting contract under subsection (a), shall be considered to meet the applicable requirements for income eligibility and oc- cupancy. ‘‘(f) DEFINITIONS.—As used in this section— ‘‘(1) the term ‘Secretary’ means the Secretary of Housing and Urban Development; ‘‘(2) the term ‘conversion’ means the action under which a contract for project-based rental assistance under section 8 of the Act [42 U.S.C. 1437f] and a Rent- al Assistance Payment contract become a contract for project-based rental assistance under section 8 of the Act (42 U.S.C. 1437f) pursuant to subsection (a); ‘‘(3) the term ‘resulting contract’ means the new contract after a conversion pursuant to subsection (a); and ‘‘(4) the term ‘assisted dwelling unit’ means a dwelling unit in a multifamily housing project that exceeds 5,000 units that, on the date of conversion of a contract under this section, is subject to a contract for project-based rental assistance under section 8 of the Act (42 U.S.C. 1437f) or a Rental Assistance Pay- ment contract.’’ PURPOSES OF MARK-TO-MARKET EXTENSION ACT OF 2001 Pub. L. 107–116, title VI, § 602, Jan. 10, 2002, 115 Stat. 2221, provided that: ‘‘The purposes of this title [see Short Title of 2002 Amendment note set out under sec- tion 1437 of this title] are— ‘‘(1) to continue the progress of the Multifamily As- sisted Housing Reform and Affordability Act of 1997 [title V of Pub. L. 105–65, see Short Title of 1997 Amendment note set out under section 1701 of Title 12, Banks and Banking] (referred to in this section as ‘that Act’); ‘‘(2) to ensure that properties that undergo mort- gage restructurings pursuant to that Act are reha- bilitated to a standard that allows the properties to meet their long-term affordability requirements; ‘‘(3) to ensure that, for properties that undergo mortgage restructurings pursuant to that Act, re- serves are set at adequate levels to allow the prop- erties to meet their long-term affordability require- ments; ‘‘(4) to ensure that properties that undergo mort- gage restructurings pursuant to that Act are oper- ated efficiently, and that operating expenses are suf- ficient to ensure the long-term financial and physical integrity of the properties; ‘‘(5) to ensure that properties that undergo rent restructurings have adequate resources to maintain the properties in good condition; ‘‘(6) to ensure that the Office of Multifamily Hous- ing Assistance Restructuring of the Department of Housing and Urban Development continues to focus on the portfolio of properties eligible for restruc- turing under that Act; ‘‘(7) to ensure that the Department of Housing and Urban Development carefully tracks the condition of those properties on an ongoing basis; ‘‘(8) to ensure that tenant groups, nonprofit organi- zations, and public entities continue to have the re- sources for building the capacity of tenant organiza- tions in furtherance of the purposes of subtitle A of that Act [subtitle A of title V of Pub. L. 105–65, set out in a note below]; and ‘‘(9) to encourage the Office of Multifamily Housing Assistance Restructuring to continue to provide par- ticipating administrative entities, including public participating administrative entities, with the flexi- bility to respond to specific problems that individual cases may present, while ensuring consistent out- comes around the country.’’ PILOT PROGRAM FOR HOMEOWNERSHIP ASSISTANCE FOR DISABLED FAMILIES Pub. L. 106–569, title III, § 302, Dec. 27, 2000, 114 Stat. 2953, authorized a public housing agency providing ten- ant-based assistance to provide homeownership assist- ance to a disabled family that purchases a dwelling unit (including a dwelling unit under a lease-purchase agreement) that will be owned by one or more members of the disabled family and will be occupied by the dis- abled family and required the Secretary of Housing and Urban Development to issue implementing regulations not later than 90 days after Dec. 27, 2000. DETERMINATION OF ADMINISTRATIVE FEES Pub. L. 108–7, div. K, title II, [(5)], Feb. 20, 2003, 117 Stat. 485, which provided that the fee otherwise author- ized under subsec. (q) of this section was to be deter- mined in accordance with subsec. (q) as in effect imme- diately before Oct. 21, 1998, was from the Departments of Veterans Affairs and Housing and Urban Develop- ment, and Independent Agencies Appropriations Act, 2003 and was not repeated in subsequent appropriation acts. Similar provisions were contained in the fol- lowing prior appropriation acts: Pub. L. 107–73, title II, Nov. 26, 2001, 115 Stat. 660. Pub. L. 106–377, § 1(a)(1) [title II], Oct. 27, 2000, 114 Stat. 1441, 1441A–12. Pub. L. 106–74, title II, Oct. 20, 1999, 113 Stat. 1056. HOMEOWNERSHIP OPPORTUNITIES DEMONSTRATION PROGRAM Pub. L. 105–276, title V, § 555(b), Oct. 21, 1998, 112 Stat. 2613, provided that: ‘‘(1) IN GENERAL.—With the consent of the affected public housing agencies, the Secretary may carry out (or contract with 1 or more entities to carry out) a demonstration program under section 8(y) of the United States Housing Act of 1937 (42 U.S.C. 1437f(y)) to expand homeownership opportunities for low-income families. ‘‘(2) REPORT.—The Secretary shall report annually to Congress on activities conducted under this sub- section.’’ MULTIFAMILY HOUSING ASSISTANCE Pub. L. 105–65, title V, subtitle A (§§ 511–524), subtitle D (§§ 571–579), Oct. 27, 1997, 111 Stat. 1385–1408, 1420–1423, as amended by Pub. L. 105–276, title V, §§ 549(c), 597(b), Oct. 21, 1998, 112 Stat. 2608, 2659; Pub. L. 106–74, title II, §§ 213(b), 219, title V, §§ 531(a)–(c), 534, 538(b), Oct. 20, 1999, 113 Stat. 1074, 1075, 1109–1116, 1120, 1123; Pub. L. 106–400, § 2, Oct. 30, 2000, 114 Stat. 1675; Pub. L. 107–116, title VI, §§ 611–614, 616(a)(1), (b), 621, 622(a), 623(a), 624, 625, Jan. 10, 2002, 115 Stat. 2222–2227; Pub. L. 109–289, div. B, title II, § 21043(a), as added by Pub. L. 110–5, § 2, Feb. 15, 2007, 121 Stat. 53; Pub. L. 110–289, div. A, title II, § 1216(d), July 30, 2008, 122 Stat. 2792; Pub. L. 112–55, div. C, title II, § 237, Nov. 18, 2011, 125 Stat. 702; Pub. L. 113–235, div. K, title II, § 232, Dec. 16, 2014, 128 Stat. 2757; Pub. L. 115–141, div. L, title II, § 236, Mar. 23, 2018, 132 Stat. 1037; Pub. L. 117–328, div. L, title II, § 236, Dec. 29, 2022, 136 Stat. 5179, provided that: ‘‘SUBTITLE A—FHA-INSURED MULTIFAMILY HOUSING MORTGAGE AND HOUSING ASSISTANCE RESTRUCTURING ‘‘SEC. 511. FINDINGS AND PURPOSES. ‘‘(a) FINDINGS.—Congress finds that— ‘‘(1) there exists throughout the Nation a need for decent, safe, and affordable housing; ‘‘(2) as of the date of enactment of this Act [Oct. 27, 1997], it is estimated that— ‘‘(A) the insured multifamily housing portfolio of the Federal Housing Administration consists of 14,000 rental properties, with an aggregate unpaid principal mortgage balance of $38,000,000,000; and ‘‘(B) approximately 10,000 of these properties con- tain housing units that are assisted with project- based rental assistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f]; Page 4629 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(3) FHA-insured multifamily rental properties are a major Federal investment, providing affordable rental housing to an estimated 2,000,000 low- and very low-income families; ‘‘(4) approximately 1,600,000 of these families live in dwelling units that are assisted with project-based rental assistance under section 8 of the United States Housing Act of 1937; ‘‘(5) a substantial number of housing units receiv- ing project-based assistance have rents that are high- er than the rents of comparable, unassisted rental units in the same housing rental market; ‘‘(6) many of the contracts for project-based assist- ance will expire during the several years following the date of enactment of this Act; ‘‘(7) it is estimated that— ‘‘(A) if no changes in the terms and conditions of the contracts for project-based assistance are made before fiscal year 2000, the cost of renewing all ex- piring rental assistance contracts under section 8 of the United States Housing Act of 1937 for both project-based and tenant-based rental assistance will increase from approximately $3,600,000,000 in fiscal year 1997 to over $14,300,000,000 by fiscal year 2000 and some $22,400,000,000 in fiscal year 2006; ‘‘(B) of those renewal amounts, the cost of renew- ing project-based assistance will increase from $1,200,000,000 in fiscal year 1997 to almost $7,400,000,000 by fiscal year 2006; and ‘‘(C) without changes in the manner in which project-based rental assistance is provided, renew- als of expiring contracts for project-based rental as- sistance will require an increasingly larger portion of the discretionary budget authority of the De- partment of Housing and Urban Development in each subsequent fiscal year for the foreseeable fu- ture; ‘‘(8) absent new budget authority for the renewal of expiring rental contracts for project-based assist- ance, many of the FHA-insured multifamily housing projects that are assisted with project-based assist- ance are likely to default on their FHA-insured mort- gage payments, resulting in substantial claims to the FHA General Insurance Fund and Special Risk Insur- ance Fund; ‘‘(9) more than 15 percent of federally assisted mul- tifamily housing projects are physically or finan- cially distressed, including a number which suffer from mismanagement; ‘‘(10) due to Federal budget constraints, the downsizing of the Department of Housing and Urban Development, and diminished administrative capac- ity, the Department lacks the ability to ensure the continued economic and physical well-being of the stock of federally insured and assisted multifamily housing projects; ‘‘(11) the economic, physical, and management problems facing the stock of federally insured and as- sisted multifamily housing projects will be best served by reforms that— ‘‘(A) reduce the cost of Federal rental assistance, including project-based assistance, to these projects by reducing the debt service and operating costs of these projects while retaining the low-in- come affordability and availability of this housing; ‘‘(B) address physical and economic distress of this housing and the failure of some project man- agers and owners of projects to comply with man- agement and ownership rules and requirements; and ‘‘(C) transfer and share many of the loan and con- tract administration functions and responsibilities of the Secretary to and with capable State, local, and other entities; and ‘‘(12) the authority and duties of the Secretary, not including the control by the Secretary of applicable accounts in the Treasury of the United States, may be delegated to State, local or other entities at the discretion of the Secretary, to the extent the Sec- retary determines, and for the purpose of carrying out this title [see Short Title of 1997 Amendment note set out under section 1701 of Title 12, Banks and Banking], so that the Secretary has the discretion to be relieved of processing and approving any document or action required by these reforms. ‘‘(b) PURPOSES.—Consistent with the purposes and re- quirements of the Government Performance and Re- sults Act of 1993 [Pub. L. 103–62, see Short Title of 1993 Amendment note set out under section 1101 of Title 31, Money and Finance], the purposes of this subtitle are— ‘‘(1) to preserve low-income rental housing afford- ability and availability while reducing the long-term costs of project-based assistance; ‘‘(2) to reform the design and operation of Federal rental housing assistance programs, administered by the Secretary, to promote greater multifamily hous- ing project operating and cost efficiencies; ‘‘(3) to encourage owners of eligible multifamily housing projects to restructure their FHA-insured mortgages and project-based assistance contracts in a manner that is consistent with this subtitle before the year in which the contract expires; ‘‘(4) to reduce the cost of insurance claims under the National Housing Act [12 U.S.C. 1701 et seq.] re- lated to mortgages insured by the Secretary and used to finance eligible multifamily housing projects; ‘‘(5) to streamline and improve federally insured and assisted multifamily housing project oversight and administration; ‘‘(6) to resolve the problems affecting financially and physically troubled federally insured and assisted multifamily housing projects through cooperation with residents, owners, State and local governments, and other interested entities and individuals; ‘‘(7) to protect the interest of project owners and managers, because they are partners of the Federal Government in meeting the affordable housing needs of the Nation through the section 8 rental housing as- sistance program; ‘‘(8) to protect the interest of tenants residing in the multifamily housing projects at the time of the restructuring for the housing; and ‘‘(9) to grant additional enforcement tools to use against those who violate agreements and program requirements, in order to ensure that the public in- terest is safeguarded and that Federal multifamily housing programs serve their intended purposes. ‘‘SEC. 512. DEFINITIONS. ‘‘In this subtitle: ‘‘(1) COMPARABLE PROPERTIES.—The term ‘com- parable properties’ means properties in the same market areas, where practicable, that— ‘‘(A) are similar to the eligible multifamily hous- ing project as to neighborhood (including risk of crime), type of location, access, street appeal, age, property size, apartment mix, physical configura- tion, property and unit amenities, utilities, and other relevant characteristics; and ‘‘(B) are not receiving project-based assistance. ‘‘(2) ELIGIBLE MULTIFAMILY HOUSING PROJECT.—The term ‘eligible multifamily housing project’ means a property consisting of more than 4 dwelling units— ‘‘(A) with rents that, on an average per unit or per room basis, exceed the rent of comparable prop- erties in the same market area, determined in ac- cordance with guidelines established by the Sec- retary; ‘‘(B) that is covered in whole or in part by a con- tract for project-based assistance under— ‘‘(i) the new construction or substantial reha- bilitation program under section 8(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(b)(2)] (as in effect before October 1, 1983); ‘‘(ii) the property disposition program under section 8(b) of the United States Housing Act of 1937; ‘‘(iii) the moderate rehabilitation program under section 8(e)(2) of the United States Housing Act of 1937; ‘‘(iv) the loan management assistance program under section 8 of the United States Housing Act of 1937; Page 4630 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(v) section 23 of the United States Housing Act of 1937 [42 U.S.C. 1437u] (as in effect before Janu- ary 1, 1975); ‘‘(vi) the rent supplement program under sec- tion 101 of the Housing and Urban Development Act of 1965 [12 U.S.C. 1701s]; or ‘‘(vii) section 8 of the United States Housing Act of 1937, following conversion from assistance under section 101 of the Housing and Urban Devel- opment Act of 1965; and ‘‘(C) financed by a mortgage insured or held by the Secretary under the National Housing Act [12 U.S.C. 1701 et seq.]. Such term does not include any project with an expir- ing contract described in paragraph (1) or (2) of sec- tion 524(e), but does include a project described in section 524(e)(3). Notwithstanding any other provision of this title, the Secretary may treat a project as an eligible multifamily housing project for purposes of this title if (I) the project is assisted pursuant to a contract for project-based assistance under section 8 of the United States Housing Act of 1937 renewed under section 524 of this Act, (II) the owner consents to such treatment, and (III) the project met the re- quirements of the first sentence of this paragraph for eligibility as an eligible multifamily housing project before the initial renewal of the contract under sec- tion 524. ‘‘(3) EXPIRING CONTRACT.—The term ‘expiring con- tract’ means a project-based assistance contract at- tached to an eligible multifamily housing project which, under the terms of the contract, will expire. ‘‘(4) EXPIRATION DATE.—The term ‘expiration date’ means the date on which an expiring contract ex- pires. ‘‘(5) FAIR MARKET RENT.—The term ‘fair market rent’ means the fair market rental established under section 8(c) of the United States Housing Act of 1937. ‘‘(6) LOW-INCOME FAMILIES.—The term ‘low-income families’ has the same meaning as provided under section 3(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)]. ‘‘(7) MORTGAGE RESTRUCTURING AND RENTAL ASSIST- ANCE SUFFICIENCY PLAN.—The term ‘mortgage restruc- turing and rental assistance sufficiency plan’ means the plan as provided under section 514. ‘‘(8) NONPROFIT ORGANIZATION.—The term ‘nonprofit organization’ means any private nonprofit organiza- tion that— ‘‘(A) is organized under State or local laws; ‘‘(B) has no part of its net earnings inuring to the benefit of any member, founder, contributor, or in- dividual; and ‘‘(C) has a long-term record of service in pro- viding or financing quality affordable housing for low-income families through relationships with public entities. ‘‘(9) PORTFOLIO RESTRUCTURING AGREEMENT.—The term ‘portfolio restructuring agreement’ means the agreement entered into between the Secretary and a participating administrative entity, as provided under section 513. ‘‘(10) PARTICIPATING ADMINISTRATIVE ENTITY.—The term ‘participating administrative entity’ means a public agency (including a State housing finance agency or a local housing agency), a nonprofit organi- zation, or any other entity (including a law firm or an accounting firm) or a combination of such enti- ties, that meets the requirements under section 513(b). ‘‘(11) PROJECT-BASED ASSISTANCE.—The term ‘project-based assistance’ means rental assistance de- scribed in paragraph (2)(B) of this section that is at- tached to a multifamily housing project. ‘‘(12) RENEWAL.—The term ‘renewal’ means the re- placement of an expiring Federal rental contract with a new contract under section 8 of the United States Housing Act of 1937, consistent with the re- quirements of this subtitle. ‘‘(13) SECRETARY.—The term ‘Secretary’ means the Secretary of Housing and Urban Development. ‘‘(14) STATE.—The term ‘State’ has the same mean- ing as in section 104 of the Cranston-Gonzalez Na- tional Affordable Housing Act [42 U.S.C. 12704]. ‘‘(15) TENANT-BASED ASSISTANCE.—The term ‘tenant- based assistance’ has the same meaning as in section 8(f) of the United States Housing Act of 1937. ‘‘(16) UNIT OF GENERAL LOCAL GOVERNMENT.—The term ‘unit of general local government’ has the same meaning as in section 104 of the Cranston-Gonzalez National Affordable Housing Act. ‘‘(17) VERY LOW-INCOME FAMILY.—The term ‘very low-income family’ has the same meaning as in sec- tion 3(b) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)]. ‘‘(18) QUALIFIED MORTGAGEE.—The term ‘qualified mortgagee’ means an entity approved by the Sec- retary that is capable of servicing, as well as origi- nating, FHA-insured mortgages, and that— ‘‘(A) is not suspended or debarred by the Sec- retary; ‘‘(B) is not suspended or on probation imposed by the Mortgagee Review Board; and ‘‘(C) is not in default under any Government Na- tional Mortgage Association obligation. ‘‘(19) OFFICE.—The term ‘Office’ means the Office of Multifamily Housing Assistance Restructuring estab- lished under section 571. ‘‘SEC. 513. AUTHORITY OF PARTICIPATING ADMIN- ISTRATIVE ENTITIES. ‘‘(a) PARTICIPATING ADMINISTRATIVE ENTITIES.— ‘‘(1) IN GENERAL.—Subject to subsection (b)(3), the Secretary shall enter into portfolio restructuring agreements with participating administrative enti- ties for the implementation of mortgage restruc- turing and rental assistance sufficiency plans to re- structure multifamily housing mortgages insured or held by the Secretary under the National Housing Act [12 U.S.C. 1701 et seq.], in order to— ‘‘(A) reduce the costs of expiring contracts for as- sistance under section 8 of the United States Hous- ing Act of 1937 [42 U.S.C. 1437f]; ‘‘(B) address financially and physically troubled projects; and ‘‘(C) correct management and ownership defi- ciencies. ‘‘(2) PORTFOLIO RESTRUCTURING AGREEMENTS.—Each portfolio restructuring agreement entered into under this subsection shall— ‘‘(A) be a cooperative agreement to establish the obligations and requirements between the Sec- retary and the participating administrative entity; ‘‘(B) identify the eligible multifamily housing projects or groups of projects for which the partici- pating administrative entity is responsible for as- sisting in developing and implementing approved mortgage restructuring and rental assistance suffi- ciency plans under section 514; ‘‘(C) require the participating administrative en- tity to review and certify to the accuracy and com- pleteness of the evaluation of rehabilitation needs required under section 514(e)(3) for each eligible multifamily housing project included in the port- folio restructuring agreement, in accordance with regulations promulgated by the Secretary; ‘‘(D) identify the responsibilities of both the par- ticipating administrative entity and the Secretary in implementing a mortgage restructuring and rental assistance sufficiency plan, including any ac- tions proposed to be taken under section 516 or 517; ‘‘(E) require each mortgage restructuring and rental assistance sufficiency plan to be prepared in accordance with the requirements of section 514 for each eligible multifamily housing project; ‘‘(F) include other requirements established by the Secretary, including a right of the Secretary to terminate the contract immediately for failure of the participating administrative entity to comply with any applicable requirement; ‘‘(G) if the participating administrative entity is a State housing finance agency or a local housing Page 4631 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f agency, indemnify the participating administrative entity against lawsuits and penalties for actions taken pursuant to the agreement, excluding actions involving willful misconduct or negligence; ‘‘(H) include compensation for all reasonable ex- penses incurred by the participating administrative entity necessary to perform its duties under this subtitle; and ‘‘(I) include, where appropriate, incentive agree- ments with the participating administrative entity to reward superior performance in meeting the pur- poses of this title. ‘‘(b) SELECTION OF PARTICIPATING ADMINISTRATIVE EN- TITY.— ‘‘(1) SELECTION CRITERIA.—The Secretary shall se- lect a participating administrative entity based on whether, in the determination of the Secretary, the participating administrative entity— ‘‘(A) has demonstrated experience in working di- rectly with residents of low-income housing projects and with tenants and other community- based organizations; ‘‘(B) has demonstrated experience with and capac- ity for multifamily restructuring and multifamily financing (which may include risk-sharing arrange- ments and restructuring eligible multifamily hous- ing properties under the fiscal year 1997 Federal Housing Administration multifamily housing dem- onstration program); ‘‘(C) has a history of stable, financially sound, and responsible administrative performance (which may include the management of affordable low-in- come rental housing); ‘‘(D) has demonstrated financial strength in terms of asset quality, capital adequacy, and liquid- ity; ‘‘(E) has demonstrated that it will carry out the specific transactions and other responsibilities under this subtitle in a timely, efficient, and cost- effective manner; and ‘‘(F) meets other criteria, as determined by the Secretary. ‘‘(2) SELECTION.—If more than 1 interested entity meets the qualifications and selection criteria for a participating administrative entity, the Secretary may select the entity that demonstrates, as deter- mined by the Secretary, that it will— ‘‘(A) provide the most timely, efficient, and cost- effective— ‘‘(i) restructuring of the mortgages covered by the portfolio restructuring agreement; and ‘‘(ii) administration of the section 8 project- based assistance contract, if applicable; and ‘‘(B) protect the public interest (including the long-term provision of decent low-income afford- able rental housing and protection of residents, communities, and the American taxpayer). ‘‘(3) PARTNERSHIPS.—For the purposes of any par- ticipating administrative entity applying under this subsection, participating administrative entities are encouraged to develop partnerships with each other and with nonprofit organizations, if such partner- ships will further the participating administrative entity’s ability to meet the purposes of this title. ‘‘(4) ALTERNATIVE ADMINISTRATORS.—With respect to any eligible multifamily housing project for which a participating administrative entity is unavailable, or should not be selected to carry out the require- ments of this subtitle with respect to that multi- family housing project for reasons relating to the se- lection criteria under paragraph (1), the Secretary shall— ‘‘(A) carry out the requirements of this subtitle with respect to that eligible multifamily housing project; or ‘‘(B) contract with other qualified entities that meet the requirements of paragraph (1) to provide the authority to carry out all or a portion of the re- quirements of this subtitle with respect to that eli- gible multifamily housing project. ‘‘(5) PRIORITY FOR PUBLIC AGENCIES AS PARTICIPATING ADMINISTRATIVE ENTITIES.—The Secretary shall pro- vide a reasonable period during which the Secretary will consider proposals only from State housing fi- nance agencies or local housing agencies, and the Secretary shall select such an agency without consid- ering other applicants if the Secretary determines that the agency is qualified. The period shall be of sufficient duration for the Secretary to determine whether any State housing finance agencies or local housing agencies are interested and qualified. Not later than the end of the period, the Secretary shall notify the State housing finance agency or the local housing agency regarding the status of the proposal and, if the proposal is rejected, the reasons for the re- jection and an opportunity for the applicant to re- spond. ‘‘(6) STATE AND LOCAL PORTFOLIO REQUIREMENTS.— ‘‘(A) IN GENERAL.—If the housing finance agency of a State is selected as the participating adminis- trative entity, that agency shall be responsible for such eligible multifamily housing projects in that State as may be agreed upon by the participating administrative entity and the Secretary. If a local housing agency is selected as the participating ad- ministrative entity, that agency shall be respon- sible for such eligible multifamily housing projects in the jurisdiction of the agency as may be agreed upon by the participating administrative entity and the Secretary. ‘‘(B) NONDELEGATION.—Except with the prior ap- proval of the Secretary, a participating administra- tive entity may not delegate or transfer respon- sibilities and functions under this subtitle to 1 or more entities. ‘‘(7) PRIVATE ENTITY REQUIREMENTS.— ‘‘(A) IN GENERAL.—If a for-profit entity is selected as the participating administrative entity, that en- tity shall be required to enter into a partnership with a public purpose entity (including the Depart- ment). ‘‘(B) PROHIBITION.—No private entity shall share, participate in, or otherwise benefit from any equity created, received, or restructured as a result of the portfolio restructuring agreement. ‘‘SEC. 514. MORTGAGE RESTRUCTURING AND RENTAL ASSISTANCE SUFFICIENCY PLAN. ‘‘(a) IN GENERAL.— ‘‘(1) DEVELOPMENT OF PROCEDURES AND REQUIRE- MENTS.—The Secretary shall develop procedures and requirements for the submission of a mortgage re- structuring and rental assistance sufficiency plan for each eligible multifamily housing project with an ex- piring contract. ‘‘(2) TERMS AND CONDITIONS.—Each mortgage re- structuring and rental assistance sufficiency plan submitted under this subsection shall be developed by the participating administrative entity, in coopera- tion with an owner of an eligible multifamily housing project and any servicer for the mortgage that is a qualified mortgagee, under such terms and conditions as the Secretary shall require. ‘‘(3) CONSOLIDATION.—Mortgage restructuring and rental assistance sufficiency plans submitted under this subsection may be consolidated as part of an overall strategy for more than 1 property. ‘‘(b) NOTICE REQUIREMENTS.—The Secretary shall es- tablish notice procedures and hearing requirements for tenants and owners concerning the dates for the expira- tion of project-based assistance contracts for any eligi- ble multifamily housing project. ‘‘(c) EXTENSION OF CONTRACT TERM.—Subject to agreement by a project owner, the Secretary may ex- tend the term of any expiring contract or provide a sec- tion 8 contract with rent levels set in accordance with subsection (g) for a period sufficient to facilitate the implementation of a mortgage restructuring and rental assistance sufficiency plan, as determined by the Sec- retary. Page 4632 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(d) TENANT RENT PROTECTION.—If the owner of a project with an expiring Federal rental assistance con- tract does not agree to extend the contract, not less than 12 months prior to terminating the contract, the project owner shall provide written notice to the Sec- retary and the tenants and the Secretary shall make tenant-based assistance available to tenants residing in units assisted under the expiring contract at the time of expiration. In addition, if after giving the notice re- quired in the first sentence, an owner determines to terminate a contract, an owner shall provide an addi- tional written notice with respect to the termination, in a form prescribed by the Secretary, not less than 120 days prior to the termination. In the event the owner does not provide the 120-day notice required in the pre- ceding sentence, the owner may not evict the tenants or increase the tenants’ rent payment until such time as the owner has provided the 120-day notice and such period has elapsed. The Secretary may allow the owner to renew the terminating contract for a period of time sufficient to give tenants 120 days of advance notice in accordance with section 524 of this Act. ‘‘(e) MORTGAGE RESTRUCTURING AND RENTAL ASSIST- ANCE SUFFICIENCY PLAN.—Each mortgage restructuring and rental assistance sufficiency plan shall— ‘‘(1) except as otherwise provided, restructure the project-based assistance rents for the eligible multi- family housing project in a manner consistent with subsection (g), or provide for tenant-based assistance in accordance with section 515; ‘‘(2) allow for rent adjustments by applying an oper- ating cost adjustment factor established under guide- lines established by the Secretary; ‘‘(3) require the owner or purchaser of an eligible multifamily housing project to evaluate the rehabili- tation needs of the project, in accordance with regu- lations of the Secretary, and notify the participating administrative entity of the rehabilitation needs; ‘‘(4) require the owner or purchaser of the project to provide or contract for competent management of the project; ‘‘(5) require the owner or purchaser of the project to take such actions as may be necessary to rehabili- tate, maintain adequate reserves, and to maintain the project in decent and safe condition, based on housing quality standards established by— ‘‘(A) the Secretary; or ‘‘(B) local housing codes or codes adopted by pub- lic housing agencies that— ‘‘(i) meet or exceed housing quality standards established by the Secretary; and ‘‘(ii) do not severely restrict housing choice; ‘‘(6) require the owner or purchaser of the project to maintain affordability and use restrictions in accord- ance with regulations promulgated by the Secretary, for a term of not less than 30 years which restrictions shall be— ‘‘(A) contained in a legally enforceable document recorded in the appropriate records; and ‘‘(B) consistent with the long-term physical and financial viability and character of the project as affordable housing; ‘‘(7) include a certification by the participating ad- ministrative entity that the restructuring meets sub- sidy layering requirements established by the Sec- retary by regulation for purposes of this subtitle; ‘‘(8) require the owner or purchaser of the project to meet such other requirements as the Secretary deter- mines to be appropriate; and ‘‘(9) prohibit the owner from refusing to lease a rea- sonable number of units to holders of certificates and vouchers under section 8 of the United States Hous- ing Act of 1937 [42 U.S.C. 1437f] because of the status of the prospective tenants as certificate and voucher holders. ‘‘(f) TENANT AND OTHER PARTICIPATION AND CAPACITY BUILDING.— ‘‘(1) PROCEDURES.— ‘‘(A) IN GENERAL.—The Secretary shall establish procedures to provide an opportunity for tenants of the project, residents of the neighborhood, the local government, and other affected parties to partici- pate effectively and on a timely basis in the re- structuring process established by this subtitle. ‘‘(B) COVERAGE.—These procedures shall take into account the need to provide tenants of the project, residents of the neighborhood, the local govern- ment, and other affected parties timely notice of proposed restructuring actions and appropriate ac- cess to relevant information about restructuring activities. To the extent practicable and consistent with the need to accomplish project restructuring in an efficient manner, the procedures shall give all such parties an opportunity to provide comments to the participating administrative entity in writ- ing, in meetings, or in another appropriate manner (which comments shall be taken into consideration by the participating administrative entity). ‘‘(2) REQUIRED CONSULTATION.—The procedures de- veloped pursuant to paragraph (1) shall require con- sultation with tenants of the project, residents of the neighborhood, the local government, and other af- fected parties, in connection with at least the fol- lowing: ‘‘(A) the mortgage restructuring and rental as- sistance sufficiency plan; ‘‘(B) any proposed transfer of the project; and ‘‘(C) the rental assistance assessment plan pursu- ant to section 515(c). ‘‘(3) FUNDING.— ‘‘(A) IN GENERAL.—The Secretary shall make available not more than $10,000,000 annually in funding, which amount shall be in addition to any amounts made available under this subparagraph and carried over from previous years, from which the Secretary may make obligations to tenant groups, nonprofit organizations, and public entities for building the capacity of tenant organizations, for technical assistance in furthering any of the purposes of this subtitle (including transfer of de- velopments to new owners), for technical assistance for preservation of low-income housing for which project-based rental assistance is provided at below market rent levels and may not be renewed (includ- ing transfer of developments to tenant groups, non- profit organizations, and public entities), for tenant services, and for tenant groups, nonprofit organiza- tions, and public entities described in section 517(a)(5), from those amounts made available under appropriations Acts for implementing this subtitle or previously made available for technical assist- ance in connection with the preservation of afford- able rental housing for low-income persons. ‘‘(B) MANNER OF PROVIDING.—Notwithstanding any other provision of law restricting the use of preservation technical assistance funds, the Sec- retary may provide any funds made available under subparagraph (A) through existing technical assist- ance programs pursuant to any other Federal law, including the Low-Income Housing Preservation and Resident Homeownership Act of 1990 [12 U.S.C. 4101 et seq.] and the Multifamily Housing Property Disposition Reform Act of 1994 [Pub. L. 103–233, see Short Title of 1994 Amendment note set out under section 1701 of Title 12, Banks and Banking], or through any other means that the Secretary con- siders consistent with the purposes of this subtitle, without regard to any set-aside requirement other- wise applicable to those funds. ‘‘(C) PROHIBITION.—None of the funds made avail- able under subparagraph (A) may be used directly or indirectly to pay for any personal service, adver- tisement, telegram, telephone, letter, printed or written matter, or other device, intended or de- signed to influence in any manner a Member of Congress, to favor or oppose, by vote or otherwise, any legislation or appropriation by Congress, whether before or after the introduction of any bill or resolution proposing such legislation or appro- priation. Page 4633 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(g) RENT LEVELS.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), each mortgage restructuring and rental assist- ance sufficiency plan pursuant to the terms, condi- tions, and requirements of this subtitle shall estab- lish for units assisted with project-based assistance in eligible multifamily housing projects adjusted rent levels that— ‘‘(A) are equivalent to rents derived from com- parable properties, if— ‘‘(i) the participating administrative entity makes the rent determination within a reason- able period of time; and ‘‘(ii) the market rent determination is based on not less than 2 comparable properties; or ‘‘(B) if those rents cannot be determined, are equal to 90 percent of the fair market rents for the relevant market area. ‘‘(2) EXCEPTIONS.— ‘‘(A) IN GENERAL.—A contract under this section may include rent levels that exceed the rent level described in paragraph (1) at rent levels that do not exceed 120 percent of the fair market rent for the market area (except that the Secretary may waive this limit for not more than five percent of all units subject to portfolio restructuring agreements, based on a finding of special need), if the partici- pating administrative entity— ‘‘(i) determines that the housing needs of the tenants and the community cannot be adequately addressed through implementation of the rent limitation required to be established through a mortgage restructuring and rental assistance suf- ficiency plan under paragraph (1); and ‘‘(ii) follows the procedures under paragraph (3). ‘‘(B) EXCEPTION RENTS.—In any fiscal year, a par- ticipating administrative entity may approve ex- ception rents on not more than 20 percent of all units covered by the portfolio restructuring agree- ment with expiring contracts in that fiscal year, except that the Secretary may waive this ceiling upon a finding of special need. ‘‘(3) RENT LEVELS FOR EXCEPTION PROJECTS.—For purposes of this section, a project eligible for an ex- ception rent shall receive a rent calculated on the ac- tual and projected costs of operating the project, at a level that provides income sufficient to support a budget-based rent that consists of— ‘‘(A) the debt service of the project; ‘‘(B) the operating expenses of the project, as de- termined by the participating administrative enti- ty, including— ‘‘(i) contributions to adequate reserves; ‘‘(ii) the costs of maintenance and necessary re- habilitation; and ‘‘(iii) other eligible costs permitted under sec- tion 8 of the United States Housing Act of 1937; ‘‘(C) an adequate allowance for potential oper- ating losses due to vacancies and failure to collect rents, as determined by the participating adminis- trative entity; ‘‘(D) an allowance for a reasonable rate of return to the owner or purchaser of the project, as deter- mined by the participating administrative entity, which may be established to provide incentives for owners or purchasers to meet benchmarks of qual- ity for management and housing quality; and ‘‘(E) other expenses determined by the partici- pating administrative entity to be necessary for the operation of the project. ‘‘(h) EXEMPTIONS FROM RESTRUCTURING.—The fol- lowing categories of projects shall not be covered by a mortgage restructuring and rental assistance suffi- ciency plan if— ‘‘(1) the primary financing or mortgage insurance for the multifamily housing project that is covered by that expiring contract was provided by a unit of State government or a unit of general local govern- ment (or an agency or instrumentality of a unit of a State government or unit of general local govern- ment) and the financing involves mortgage insurance under the National Housing Act [42 U.S.C. 1701 et seq.], such that the implementation of a mortgage re- structuring and rental assistance sufficiency plan under this subtitle is in conflict with applicable law or agreements governing such financing; ‘‘(2) the project is a project financed under section 202 of the Housing Act of 1959 [12 U.S.C. 1701q] or sec- tion 515 of the Housing Act of 1949 [42 U.S.C. 1485], or refinanced pursuant to section 811 of the American Homeownership and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note); or ‘‘(3) the project has an expiring contract under sec- tion 8 of the United States Housing Act of 1937 en- tered into pursuant to [former] section 441 of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11401]. ‘‘SEC. 515. SECTION 8 RENEWALS AND LONG-TERM AFFORDABILITY COMMITMENT BY OWNER OF PROJECT. ‘‘(a) SECTION 8 RENEWALS OF RESTRUCTURED PROJECTS.— ‘‘(1) PROJECT-BASED ASSISTANCE.—Subject to the availability of amounts provided in advance in appro- priations Acts, and to the control of the Secretary of applicable accounts in the Treasury of the United States, with respect to an expiring section 8 contract on an eligible multifamily housing project to be re- newed with project-based assistance (based on a de- termination under subsection (c)), the Secretary shall enter into contracts with participating adminis- trative entities pursuant to which the participating administrative entity shall offer to renew or extend the contract, or the Secretary shall offer to renew such contract, and the owner of the project shall ac- cept the offer, if the initial renewal is in accordance with the terms and conditions specified in the mort- gage restructuring and rental assistance sufficiency plan and the rental assistance assessment plan. ‘‘(2) TENANT-BASED ASSISTANCE.—Subject to the availability of amounts provided in advance in appro- priations Acts and to the control of the Secretary of applicable accounts in the Treasury of the United States, with respect to an expiring section 8 contract on an eligible multifamily housing project to be re- newed with tenant-based assistance (based on a deter- mination under subsection (c)), the Secretary shall enter into contracts with participating administra- tive entities pursuant to which the participating ad- ministrative entity shall provide for the renewal of section 8 assistance on an eligible multifamily hous- ing project with tenant-based assistance, or the Sec- retary shall provide for such renewal, in accordance with the terms and conditions specified in the mort- gage restructuring and rental assistance sufficiency plan and the rental assistance assessment plan. ‘‘(b) REQUIRED COMMITMENT.—After the initial re- newal of a section 8 contract pursuant to this section, the owner shall accept each offer made pursuant to sub- section (a) to renew the contract, for the term of the affordability and use restrictions required by section 514(e)(6), if the offer to renew is on terms and condi- tions specified in the mortgage restructuring and rent- al assistance sufficiency plan. ‘‘(c) DETERMINATION OF WHETHER TO RENEW WITH PROJECT-BASED OR TENANT-BASED ASSISTANCE.— ‘‘(1) MANDATORY RENEWAL OF PROJECT-BASED ASSIST- ANCE.—Section 8 assistance shall be renewed with project-based assistance, if— ‘‘(A) the project is located in an area in which the participating administrative entity determines, based on housing market indicators, such as low va- cancy rates or high absorption rates, that there is not adequate available and affordable housing or that the tenants of the project would not be able to locate suitable units or use the tenant-based assist- ance successfully; ‘‘(B) a predominant number of the units in the project are occupied by elderly families, disabled families, or elderly and disabled families; or Page 4634 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(C) the project is held by a nonprofit cooperative ownership housing corporation or nonprofit cooper- ative housing trust. ‘‘(2) RENTAL ASSISTANCE ASSESSMENT PLAN.— ‘‘(A) IN GENERAL.—With respect to any project that is not described in paragraph (1), the partici- pating administrative entity shall, after consulta- tion with the owner of the project, develop a rental assistance assessment plan to determine whether to renew assistance for the project with tenant-based assistance or project-based assistance. ‘‘(B) RENTAL ASSISTANCE ASSESSMENT PLAN RE- QUIREMENTS.—Each rental assistance assessment plan developed under this paragraph shall include an assessment of the impact of converting to ten- ant-based assistance and the impact of extending project-based assistance on— ‘‘(i) the ability of the tenants to find adequate, available, decent, comparable, and affordable housing in the local market; ‘‘(ii) the types of tenants residing in the project (such as elderly families, disabled families, large families, and cooperative homeowners); ‘‘(iii) the local housing needs identified in the comprehensive housing affordability strategy, and local market vacancy trends; ‘‘(iv) the cost of providing assistance, com- paring the applicable payment standard to the project’s adjusted rent levels determined under section 514(g); ‘‘(v) the long-term financial stability of the project; ‘‘(vi) the ability of residents to make reasonable choices about their individual living situations; ‘‘(vii) the quality of the neighborhood in which the tenants would reside; and ‘‘(viii) the project’s ability to compete in the marketplace. ‘‘(C) REPORTS TO DIRECTOR.—Each participating administrative entity shall report regularly to the Director as defined in subtitle D, as the Director shall require, identifying— ‘‘(i) each eligible multifamily housing project for which the entity has developed a rental assist- ance assessment plan under this paragraph that determined that the tenants of the project gen- erally supported renewal of assistance with ten- ant-based assistance, but under which assistance for the project was renewed with project-based as- sistance; and ‘‘(ii) each project for which the entity has de- veloped such a plan under which the assistance is renewed using tenant-based assistance. ‘‘(3) ELIGIBILITY FOR TENANT-BASED ASSISTANCE.— Subject to paragraph (4), with respect to any project that is not described in paragraph (1), if a partici- pating administrative entity approves the use of ten- ant-based assistance based on a rental assistance as- sessment plan developed under paragraph (2), tenant- based assistance shall be provided to each assisted family (other than a family already receiving tenant- based assistance) residing in the project at the time the assistance described in section 512(2)(B) termi- nates. ‘‘(4) ASSISTANCE THROUGH ENHANCED VOUCHERS.—In the case of any family described in paragraph (3) that resides in a project described in section 512(2)(B), the tenant-based assistance provided shall be enhanced voucher assistance under section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)). ‘‘(5) INAPPLICABILITY OF CERTAIN PROVISION.—If a participating administrative entity approves renewal with project-based assistance under this subsection, section 8(d)(2) of the United States Housing Act of 1937 shall not apply. ‘‘(d) RENT ADJUSTMENTS AND SUBSEQUENT RENEW- ALS.—After the initial renewal of a section 8 contract pursuant to this section and notwithstanding any other provision of law or contract regarding the adjustment of rents or subsequent renewal of such contract for a project, including such a provision in section 514 or this section, in the case of a project subject to any restric- tions imposed pursuant to sections 514 or this section, the Secretary may, not more often than once every 10 years, adjust such rents or renew such contracts at rent levels that are equal to the lesser of budget-based rents or comparable market rents for the market area upon the request of an owner or purchaser who— ‘‘(1) demonstrates that— ‘‘(A) project income is insufficient to operate and maintain the project, and no rehabilitation is cur- rently needed, as determined by the Secretary; or ‘‘(B) the rent adjustment or renewal contract is necessary to support commercially reasonable fi- nancing (including any required debt service cov- erage and replacement reserve) for rehabilitation necessary to ensure the long-term sustainability of the project, as determined by the Secretary, and in the event the owner or purchaser fails to imple- ment the rehabilitation as required by the Sec- retary, the Secretary may take such action against the owner or purchaser as allowed by law; and ‘‘(2) agrees to— ‘‘(A) extend the affordability and use restrictions required under [section] 514(e)(6) for an additional twenty years; and ‘‘(B) enter into a binding commitment to con- tinue to renew such contract for and during such extended term, provided that after the affordability and use restrictions required under [section] 514(e)(6) have been maintained for a term of 30 years: ‘‘(i) an owner with a contract for which rent levels were set at the time of its initial renewal under section 514(g)(2) shall request that the Sec- retary renew such contract under section 524 for and during such extended term; and ‘‘(ii) an owner with a contract for which rent levels were set at the time of its initial renewal under section 514(g)(1) may request that the Sec- retary renew such contract under section 524 for and during such extended term. ‘‘SEC. 516. PROHIBITION ON RESTRUCTURING. ‘‘(a) PROHIBITION ON RESTRUCTURING.—The Secretary may elect not to consider any mortgage restructuring and rental assistance sufficiency plan or request for contract renewal if the Secretary or the participating administrative entity determines that— ‘‘(1)(A) the owner or purchaser of the project has engaged in material adverse financial or managerial actions or omissions with regard to such project; or ‘‘(B) the owner or purchaser of the project has en- gaged in material adverse financial or managerial ac- tions or omissions with regard to other projects of such owner or purchaser that are federally assisted or financed with a loan from, or mortgage insured or guaranteed by, an agency of the Federal Government; ‘‘(2) material adverse financial or managerial ac- tions or omissions include— ‘‘(A) materially violating any Federal, State, or local law or regulation with regard to this project or any other federally assisted project, after receipt of notice and an opportunity to cure; ‘‘(B) materially breaching a contract for assist- ance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f], after receipt of notice and an opportunity to cure; ‘‘(C) materially violating any applicable regu- latory or other agreement with the Secretary or a participating administrative entity, after receipt of notice and an opportunity to cure; ‘‘(D) repeatedly and materially violating any Fed- eral, State, or local law or regulation with regard to the project or any other federally assisted project; ‘‘(E) repeatedly and materially breaching a con- tract for assistance under section 8 of the United States Housing Act of 1937; ‘‘(F) repeatedly and materially violating any ap- plicable regulatory or other agreement with the Secretary or a participating administrative entity; Page 4635 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(G) repeatedly failing to make mortgage pay- ments at times when project income was sufficient to maintain and operate the property; ‘‘(H) materially failing to maintain the property according to housing quality standards after re- ceipt of notice and a reasonable opportunity to cure; or ‘‘(I) committing any actions or omissions that would warrant suspension or debarment by the Sec- retary; ‘‘(3) the owner or purchaser of the property materi- ally failed to follow the procedures and requirements of this subtitle, after receipt of notice and an oppor- tunity to cure; or ‘‘(4) the poor condition of the project cannot be remedied in a cost effective manner, as determined by the participating administrative entity. The term ‘owner’ as used in this subsection, in addition to it having the same meaning as in section 8(f) of the United States Housing Act of 1937, also means an affil- iate of the owner. The term ‘purchaser’ as used in this subsection means any private person or entity, includ- ing a cooperative, an agency of the Federal Govern- ment, or a public housing agency, that, upon purchase of the project, would have the legal right to lease or sublease dwelling units in the project, and also means an affiliate of the purchaser. The terms ‘affiliate of the owner’ and ‘affiliate of the purchaser’ means any per- son or entity (including, but not limited to, a general partner or managing member, or an officer of either) that controls an owner or purchaser, is controlled by an owner or purchaser, or is under common control with the owner or purchaser. The term ‘control’ means the direct or indirect power (under contract, equity owner- ship, the right to vote or determine a vote, or other- wise) to direct the financial, legal, beneficial or other interests of the owner or purchaser. ‘‘(b) OPPORTUNITY TO DISPUTE FINDINGS.— ‘‘(1) IN GENERAL.—During the 30-day period begin- ning on the date on which the owner or purchaser of an eligible multifamily housing project receives no- tice of a rejection under subsection (a) or of a mort- gage restructuring and rental assistance sufficiency plan under section 514, the Secretary or participating administrative entity shall provide that owner or purchaser with an opportunity to dispute the basis for the rejection and an opportunity to cure. ‘‘(2) AFFIRMATION, MODIFICATION, OR REVERSAL.— ‘‘(A) IN GENERAL.—After providing an opportunity to dispute under paragraph (1), the Secretary or the participating administrative entity may affirm, modify, or reverse any rejection under subsection (a) or rejection of a mortgage restructuring and rental assistance sufficiency plan under section 514. ‘‘(B) REASONS FOR DECISION.—The Secretary or the participating administrative entity, as applicable, shall identify the reasons for any final decision under this paragraph. ‘‘(C) REVIEW PROCESS.—The Secretary shall estab- lish an administrative review process to appeal any final decision under this paragraph. ‘‘(c) FINAL DETERMINATION.—Any final determination under this section shall not be subject to judicial re- view. ‘‘(d) DISPLACED TENANTS.— ‘‘(1) NOTICE TO CERTAIN RESIDENTS.—The Office shall notify any tenant that is residing in a project or re- ceiving assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) at the time of rejection under this section, of such rejec- tion, except that the Office may delegate the respon- sibility to provide notice under this paragraph to the participating administrative entity. ‘‘(2) ASSISTANCE AND MOVING EXPENSES.—Subject to the availability of amounts provided in advance in appropriations Acts, for any low-income tenant that is residing in a project or receiving assistance under section 8 of the United States Housing Act of 1937 at the time of rejection under this section, that tenant shall be provided with tenant-based assistance and reasonable moving expenses, as determined by the Secretary. ‘‘(e) TRANSFER OF PROPERTY.—For properties dis- qualified from the consideration of a mortgage restruc- turing and rental assistance sufficiency plan under this section in accordance with paragraph (1) or (2) of sub- section (a) because of actions by an owner or purchaser, the Secretary shall establish procedures to facilitate the voluntary sale or transfer of a property as part of a mortgage restructuring and rental assistance suffi- ciency plan, with a preference for tenant organizations and tenant-endorsed community-based nonprofit and public agency purchasers meeting such reasonable qualifications as may be established by the Secretary. ‘‘SEC. 517. RESTRUCTURING TOOLS. ‘‘(a) MORTGAGE RESTRUCTURING.— ‘‘(1) In this subtitle, an approved mortgage restruc- turing and rental assistance sufficiency plan shall in- clude restructuring mortgages in accordance with this subsection to provide— ‘‘(A) a restructured or new first mortgage that is sustainable at rents at levels that are established in section 514(g); and ‘‘(B) a second mortgage that is in an amount equal to not more than the greater of— ‘‘(i) the full or partial payment of claim made under this subtitle; or ‘‘(ii) the difference between the restructured or new first mortgage and the indebtedness under the existing insured mortgage immediately before it is restructured or refinanced, provided that the amount of the second mortgage shall be in an amount that the Secretary or participating ad- ministrative entity determines can reasonably be expected to be repaid. ‘‘(2) The second mortgage shall bear interest at a rate not to exceed the applicable Federal rate as de- fined in section 1274(d) of the Internal Revenue Code of 1986 [26 U.S.C. 1274(d)]. The term of the second mortgage shall be equal to the term of the restruc- tured or new first mortgage. ‘‘(3) Payments on the second mortgage shall be de- ferred when the first mortgage remains outstanding, except to the extent there is excess project income remaining after payment of all reasonable and nec- essary operating expenses (including deposits in a re- serve for replacement), debt service on the first mort- gage, and any other expenditures approved by the Secretary. At least 75 percent of any excess project income shall be applied to payments on the second mortgage, and the Secretary or the participating ad- ministrative entity may permit up to 25 percent to be paid to the project owner if the Secretary or partici- pating administrative entity determines that the project owner meets benchmarks for management and housing quality. ‘‘(4) The full amount of the second mortgage shall be immediately due and payable if— ‘‘(A) the first mortgage is terminated or paid in full, except as otherwise provided by the holder of the second mortgage; ‘‘(B) the project is purchased and the second mortgage is assumed by any subsequent purchaser in violation of guidelines established by the Sec- retary; or ‘‘(C) the Secretary provides notice to the project owner that such owner has failed to materially comply with any requirements of this section or the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] as those requirements apply to the project, with a reasonable opportunity for such owner to cure such failure. ‘‘(5) The Secretary may modify the terms of the second mortgage, assign the second mortgage to the acquiring organization or agency, or forgive all or part of the second mortgage if the Secretary holds the second mortgage and if the project is acquired by a tenant organization or tenant-endorsed commu- nity-based nonprofit or public agency, pursuant to guidelines established by the Secretary. Page 4636 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(6) The second mortgage under this section may be a first mortgage if no restructured or new first mort- gage will meet the requirement of paragraph (1)(A). ‘‘(b) RESTRUCTURING TOOLS.—In addition to the re- quirements of subsection (a) and to the extent these ac- tions are consistent with this section and with the con- trol of the Secretary of applicable accounts in the Treasury of the United States, an approved mortgage restructuring and rental assistance sufficiency plan under this subtitle may include one or more of the fol- lowing actions: ‘‘(1) FULL OR PARTIAL PAYMENT OF CLAIM.—Making a full payment of claim or partial payment of claim under section 541(b) of the National Housing Act [12 U.S.C. 1735f–19(b)], as amended by section 523(b) of this Act. Any payment under this paragraph shall not require the approval of a mortgagee. ‘‘(2) REFINANCING OF DEBT.—Refinancing of all or part of the debt on a project. If the refinancing in- volves a mortgage that will continue to be insured under the National Housing Act [12 U.S.C. 1701 et seq.], the refinancing shall be documented through amendment of the existing insurance contract and not through a new insurance contract. ‘‘(3) MORTGAGE INSURANCE.—Providing FHA multi- family mortgage insurance, reinsurance or other credit enhancement alternatives, including multi- family risk-sharing mortgage programs, as provided under section 542 of the Housing and Community De- velopment Act of 1992 [Pub. L. 102–550, 12 U.S.C. 1707 note]. The Secretary shall use risk-shared financing under section 542(c) of the Housing and Community Development Act of 1992 for any mortgage restruc- turing, rehabilitation financing, or debt refinancing included as part of a mortgage restructuring and rental assistance sufficiency plan if the terms and conditions are considered to be the best available fi- nancing in terms of financial savings to the FHA in- surance funds and will result in reduced risk of loss to the Federal Government. Any limitations on the number of units available for mortgage insurance under section 542 shall not apply to eligible multi- family housing projects. Any credit subsidy costs of providing mortgage insurance shall be paid from the Liquidating Accounts of the General Insurance Fund or the Special Risk Insurance Fund and shall not be subject to any limitation on appropriations. ‘‘(4) CREDIT ENHANCEMENT.—Providing any addi- tional State or local mortgage credit enhancements and risk-sharing arrangements that may be estab- lished with State or local housing finance agencies, the Federal Housing Finance Agency, the Federal Na- tional Mortgage Association, and the Federal Home Loan Mortgage Corporation, to a modified or refi- nanced first mortgage. ‘‘(5) COMPENSATION OF THIRD PARTIES.—Consistent with the portfolio restructuring agreement, entering into agreements, incurring costs, or making pay- ments, including incentive agreements designed to reward superior performance in meeting the purposes of this Act, as may be reasonably necessary, to com- pensate the participation of participating adminis- trative entities and other parties in undertaking ac- tions authorized by this subtitle. Upon request to the Secretary, participating administrative entities that are qualified under the United States Housing Act of 1937 to serve as contract administrators shall be the contract administrators under section 8 of the United States Housing Act of 1937 [12 U.S.C. 1437f] for pur- poses of any contracts entered into as part of an ap- proved mortgage restructuring and rental assistance sufficiency plan. Subject to the availability of amounts provided in advance in appropriations Acts for administrative fees under section 8 of the United States Housing Act of 1937, such amounts may be used to compensate participating administrative en- tities for compliance monitoring costs incurred under section 519. ‘‘(6) USE OF PROJECT ACCOUNTS.—Applying any resid- ual receipts, replacement reserves, and any other project accounts not required for project operations, to maintain the long-term affordability and physical condition of the property or of other eligible multi- family housing projects. The participating adminis- trative entity may expedite the acquisition of resid- ual receipts, replacement reserves, or other such ac- counts, by entering into agreements with owners of housing covered by an expiring contract to provide an owner with a share of the receipts, not to exceed 10 percent, in accordance with guidelines established by the Secretary. ‘‘(c) REHABILITATION NEEDS AND ADDITION OF SIGNIFI- CANT FEATURES.— ‘‘(1) REHABILITATION NEEDS.— ‘‘(A) IN GENERAL.—Rehabilitation may be paid from the residual receipts, replacement reserves, or any other project accounts not required for project operations, or, as provided in appropriations Acts and subject to the control of the Secretary of appli- cable accounts in the Treasury of the United States, from budget authority provided for in- creases in the budget authority for assistance con- tracts under section 8 of the United States Housing Act of 1937, the rehabilitation grant program estab- lished under section 236 of the National Housing Act [12 U.S.C. 1715z–1], as amended by section 531 of subtitle B of this Act, or through the debt restruc- turing transaction. Rehabilitation under this para- graph shall only be for the purpose of restoring the project to a non-luxury standard adequate for the rental market intended at the original approval of the project-based assistance. ‘‘(B) CONTRIBUTION.—Each owner or purchaser of a project to be rehabilitated under an approved mort- gage restructuring and rental assistance sufficiency plan shall contribute, from non-project resources, not less than 25 percent of the amount of rehabili- tation assistance received, except that the partici- pating administrative entity may provide an excep- tion from the requirement of this subparagraph for housing cooperatives. ‘‘(2) ADDITION OF SIGNIFICANT FEATURES.— ‘‘(A) AUTHORITY.—An approved mortgage restruc- turing and rental assistance sufficiency plan may require the improvement of the project by the addi- tion of significant features that are not necessary for rehabilitation to the standard provided under paragraph (1), such as air conditioning, an elevator, and additional community space. The Secretary shall establish guidelines regarding the inclusion of requirements regarding such additional significant features under such plans. ‘‘(B) FUNDING.—Significant features added pursu- ant to an approved mortgage restructuring and rental assistance sufficiency plan may be paid from the funding sources specified in the first sentence of paragraph (1)(A). ‘‘(C) LIMITATION ON OWNER CONTRIBUTION.—An owner of a project may not be required to con- tribute from non-project resources, toward the cost of any additional significant features required pur- suant to this paragraph, more than 25 percent of the amount of any assistance received for the inclu- sion of such features. ‘‘(D) APPLICABILITY.—This paragraph shall apply to all eligible multifamily housing projects, except projects for which the Secretary and the project owner executed a mortgage restructuring and rent- al assistance sufficiency plan on or before the date of the enactment of the Mark-to-Market Extension Act of 2001 [Jan. 10, 2002]. ‘‘(d) PROHIBITION ON EQUITY SHARING BY THE SEC- RETARY.—The Secretary is prohibited from partici- pating in any equity agreement or profit-sharing agree- ment in conjunction with any eligible multifamily housing project. ‘‘(e) CONFLICT OF INTEREST GUIDELINES.—The Sec- retary may establish guidelines to prevent conflicts of interest by a participating administrative entity that provides, directly or through risk-sharing arrange- Page 4637 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ments, any form of credit enhancement or financing pursuant to subsections [sic] (b)(3) or (b)(4) or to pre- vent conflicts of interest by any other person or entity under this subtitle. ‘‘SEC. 518. MANAGEMENT STANDARDS. ‘‘Each participating administrative entity shall es- tablish management standards, including requirements governing conflicts of interest between owners, man- agers, contractors with an identity of interest, pursu- ant to guidelines established by the Secretary and con- sistent with industry standards. ‘‘SEC. 519. MONITORING OF COMPLIANCE. ‘‘(a) COMPLIANCE AGREEMENTS.—(1) Pursuant to regu- lations issued by the Secretary under section 522(a), each participating administrative entity, through bind- ing contractual agreements with owners and otherwise, shall ensure long-term compliance with the provisions of this subtitle. Each agreement shall, at a minimum, provide for— ‘‘(A) enforcement of the provisions of this subtitle; and ‘‘(B) remedies for the breach of those provisions. ‘‘(2) If the participating administrative entity is not qualified under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] to be a section 8 contract admin- istrator or fails to perform its duties under the port- folio restructuring agreement, the Secretary shall have the right to enforce the agreement. ‘‘(b) PERIODIC MONITORING.— ‘‘(1) IN GENERAL.—Not less than annually, each par- ticipating administrative entity that is qualified to be the section 8 contract administrator shall review the status of all multifamily housing projects for which a mortgage restructuring and rental assistance sufficiency plan has been implemented. ‘‘(2) INSPECTIONS.—Each review under this sub- section shall include onsite inspection to determine compliance with housing codes and other require- ments as provided in this subtitle and the portfolio restructuring agreements. ‘‘(3) ADMINISTRATION.—If the participating adminis- trative entity is not qualified under the United States Housing Act of 1937 to be a section 8 contract administrator, either the Secretary or a qualified State or local housing agency shall be responsible for the review required by this subsection. ‘‘(c) AUDIT BY THE SECRETARY.—The Comptroller Gen- eral of the United States, the Secretary, and the In- spector General of the Department of Housing and Urban Development may conduct an audit at any time of any multifamily housing project for which a mort- gage restructuring and rental assistance sufficiency plan has been implemented. ‘‘SEC. 520. REPORTS TO CONGRESS. ‘‘(a) ANNUAL REVIEW.—In order to ensure compliance with this subtitle, the Secretary shall conduct an an- nual review and report to the Congress on actions taken under this subtitle and the status of eligible mul- tifamily housing projects. ‘‘(b) SEMIANNUAL REVIEW.—Not less than semiannu- ally during the 2-year period beginning on the date of the enactment of this Act [Oct. 27, 1997] and not less than annually thereafter, the Secretary shall submit reports to the Committee on Financial Services of the House of Representatives and the Committee on Bank- ing, Housing, and Urban Affairs of the Senate stating, for such periods, the total number of projects identified by participating administrative entities under each of clauses (i) and (ii) of section 515(c)(2)(C). ‘‘SEC. 521. GAO AUDIT AND REVIEW. ‘‘(a) INITIAL AUDIT.—Not later than 18 months after the effective date of final regulations promulgated under this subtitle, the Comptroller General of the United States shall conduct an audit to evaluate eligi- ble multifamily housing projects and the implementa- tion of mortgage restructuring and rental assistance sufficiency plans. ‘‘(b) REPORT.— ‘‘(1) IN GENERAL.—Not later than 18 months after the audit conducted under subsection (a), the Comp- troller General of the United States shall submit to Congress a report on the status of eligible multi- family housing projects and the implementation of mortgage restructuring and rental assistance suffi- ciency plans. ‘‘(2) CONTENTS.—The report submitted under para- graph (1) shall include— ‘‘(A) a description of the initial audit conducted under subsection (a); and ‘‘(B) recommendations for any legislative action to increase the financial savings to the Federal Government of the restructuring of eligible multi- family housing projects balanced with the contin- ued availability of the maximum number of afford- able low-income housing units. ‘‘SEC. 522. REGULATIONS. ‘‘(a) RULEMAKING AND IMPLEMENTATION.— ‘‘(1) INTERIM REGULATIONS.—The Director shall issue such interim regulations as may be necessary to im- plement this subtitle and the amendments made by this subtitle with respect to eligible multifamily housing projects covered by contracts described in section 512(2)(B) that expire in fiscal year 1999 or thereafter. If, before the expiration of such period, the Director has not been appointed, the Secretary shall issue such interim regulations. ‘‘(2) FINAL REGULATIONS.—The Director shall issue final regulations necessary to implement this sub- title and the amendments made by this subtitle with respect to eligible multifamily housing projects cov- ered by contracts described in section 512(2)(B) that expire in fiscal year 1999 or thereafter before the later of: (A) the expiration of the 12-month period begin- ning upon the date of the enactment of this Act [Oct. 27, 1997]; and (B) the 3-month period beginning upon the appointment of the Director under subtitle D. ‘‘(3) FACTORS FOR CONSIDERATION.—Before the publi- cation of the final regulations under paragraph (2), in addition to public comments invited in connection with publication of the interim rule, the Secretary shall— ‘‘(A) seek recommendations on the implementa- tion of sections 513(b) and 515(c)(1) from organiza- tions representing— ‘‘(i) State housing finance agencies and local housing agencies; ‘‘(ii) other potential participating admin- istering entities; ‘‘(iii) tenants; ‘‘(iv) owners and managers of eligible multi- family housing projects; ‘‘(v) States and units of general local govern- ment; and ‘‘(vi) qualified mortgagees; and ‘‘(B) convene not less than 3 public forums at which the organizations making recommendations under subparagraph (A) may express views con- cerning the proposed disposition of the rec- ommendations. ‘‘(b) TRANSITION PROVISION FOR CONTRACTS EXPIRING IN FISCAL YEAR 1998.—Notwithstanding any other provi- sion of law, the Secretary shall apply all the terms of section 211 and section 212 of the Departments of Vet- erans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 [Pub. L. 104–204, set out below] (except for section 212(h)(1)(G) and the limitation in section 212(k)) contracts for project-based assistance that expire during fiscal year 1998 (in the same manner that such provisions apply to expiring contracts defined in section 212(a)(3) of such Act), except that section 517(a) of the Act shall apply to mortgages on projects subject to such contracts. ‘‘SEC. 523. TECHNICAL AND CONFORMING AMEND- MENTS. ‘‘(a) CALCULATION OF LIMIT ON PROJECT-BASED ASSIST- ANCE.—[Amended this section.] Page 4638 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(b) PARTIAL PAYMENT OF CLAIMS ON MULTIFAMILY HOUSING PROJECTS.—[Amended section 1735f–19 of Title 12, Banks and Banking.] ‘‘(c) REUSE AND RESCISSION OF CERTAIN RECAPTURED BUDGET AUTHORITY.—[Amended this section.] ‘‘(d) SECTION 8 CONTRACT RENEWALS.—[Amended sec- tion 405(a) of Pub. L. 104–99, set out below.] ‘‘(e) RENEWAL UPON REQUEST OF OWNER.—[Amended section 211 of Pub. L. 104–204, set out below.] ‘‘(f) EXTENSION OF DEMONSTRATION CONTRACT PE- RIOD.—[Amended section 212 of Pub. L. 104–204, set out below.] ‘‘SEC. 524. RENEWAL OF EXPIRING PROJECT- BASED SECTION 8 CONTRACTS. ‘‘(a) IN GENERAL.— ‘‘(1) RENEWAL.—Subject to paragraph (2), upon ter- mination or expiration of a contract for project-based assistance under section 8 for a multifamily housing project (and notwithstanding section 8(v) of the United States Housing Act of 1937 [42 U.S.C. 1437f] for loan management assistance), the Secretary shall, at the request of the owner of the project and to the ex- tent sufficient amounts are made available in appro- priation Acts, use amounts available for the renewal of assistance under section 8 of such Act to provide such assistance for the project. The assistance shall be provided under a contract having such terms and conditions as the Secretary considers appropriate, subject to the requirements of this section. This sec- tion shall not require contract renewal for a project that is eligible under this subtitle for a mortgage re- structuring and rental assistance sufficiency plan, if there is no approved plan for the project and the Sec- retary determines that such an approved plan is nec- essary. ‘‘(2) PROHIBITION ON RENEWAL.—Notwithstanding part 24 of title 24 of the Code of Federal Regulations, the Secretary may elect not to renew assistance for a project otherwise required to be renewed under paragraph (1) or provide comparable benefits under paragraph (1) or (2) of subsection (e) for a project de- scribed in either such paragraph, if the Secretary de- termines that a violation under paragraphs (1) through (4) of section 516(a) has occurred with respect to the project. For purposes of such a determination, the provisions of section 516 shall apply to a project under this section in the same manner and to the same extent that the provisions of such section apply to eligible multifamily housing projects, except that the Secretary shall make the determination under section 516(a)(4). ‘‘(3) CONTRACT TERM FOR MARK-UP-TO-MARKET CON- TRACTS.—In the case of an expiring or terminating contract that has rent levels less than comparable market rents for the market area, if the rent levels under the renewal contract under this section are equal to comparable market rents for the market area, the contract shall have a term of not less than 5 years, subject to the availability of sufficient amounts in appropriation Acts. ‘‘(4) RENEWAL RENTS.—Except as provided in sub- section (b), the contract for assistance shall provide assistance at the following rent levels: ‘‘(A) MARKET RENTS.—At the request of the owner of the project, at rent levels equal to the lesser of comparable market rents for the market area or 150 percent of the fair market rents, in the case only of a project that— ‘‘(i) has rent levels under the expiring or termi- nating contract that do not exceed such com- parable market rents; ‘‘(ii) does not have a low- and moderate-income use restriction that can not be eliminated by uni- lateral action by the owner; ‘‘(iii) is decent, safe, and sanitary housing, as determined by the Secretary; ‘‘(iv) is not— ‘‘(I) owned by a nonprofit entity; ‘‘(II) subject to a contract for moderate reha- bilitation assistance under section 8(e)(2) of the United States Housing Act of 1937, as in effect before October 1, 1991; or ‘‘(III) a project for which the public housing agency provided voucher assistance to one or more of the tenants after the owner has pro- vided notice of termination of the contract cov- ering the tenant’s unit; and ‘‘(v) has units assisted under the contract for which the comparable market rent exceeds 110 percent of the fair market rent. The Secretary may adjust the percentages of fair market rent (as specified in the matter preceding clause (i) and in clause (v)), but only upon a deter- mination and written notification to the Congress within 10 days of making such determination, that such adjustment is necessary to ensure that this subparagraph covers projects with a high risk of nonrenewal of expiring contracts for project-based assistance. ‘‘(B) REDUCTION TO MARKET RENTS.—In the case of a project that has rent levels under the expiring or terminating contract that exceed comparable mar- ket rents for the market area, at rent levels equal to such comparable market rents. ‘‘(C) RENTS NOT EXCEEDING MARKET RENTS.—In the case of a project that is not subject to subpara- graph (A) or (B), at rent levels that— ‘‘(i) are not less than the existing rents under the terminated or expiring contract, as adjusted by an operating cost adjustment factor estab- lished by the Secretary (which shall not result in a negative adjustment), if such adjusted rents do not exceed comparable market rents for the mar- ket area; and ‘‘(ii) do not exceed comparable market rents for the market area. In determining the rent level for a contract under this subparagraph, the Secretary shall approve rents sufficient to cover budget-based cost in- creases and shall give greater consideration to pro- viding rent at a level up to comparable market rents for the market area based on the number of the criteria under clauses (i) through (iii) of sub- paragraph (D) that the project meets. Notwith- standing any other provision of law, the Secretary shall include in such budget-based cost increases costs relating to the project as a whole (including costs incurred with respect to units not covered by the contract for assistance), but only (I) if inclusion of such costs is requested by the owner or purchaser of the project, (II) if inclusion of such costs will permit capital repairs to the project or acquisition of the project by a nonprofit organization, and (III) to the extent that inclusion of such costs (or a por- tion thereof) complies with the requirement under clause (ii). ‘‘(D) WAIVER OF 150 PERCENT LIMITATION.—Notwith- standing subparagraph (A), at rent levels up to comparable market rents for the market area, in the case of a project that meets the requirements under clauses (i) through (v) of subparagraph (A) and— ‘‘(i) has residents who are a particularly vulner- able population, as demonstrated by a high per- centage of units being rented to elderly families, disabled families, or large families; ‘‘(ii) is located in an area in which tenant-based assistance would be difficult to use, as dem- onstrated by a low vacancy rate for affordable housing, a high turnback rate for vouchers, or a lack of comparable rental housing; or ‘‘(iii) is a high priority for the local community, as demonstrated by a contribution of State or local funds to the property. In determining the rent level for a contract under this subparagraph, the Secretary shall approve rents sufficient to cover budget-based cost in- creases and shall give greater consideration to pro- viding rent at a level up to comparable market rents for the market area based on the number of Page 4639 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f the criteria under clauses (i) through (iv) that the project meets. ‘‘(5) COMPARABLE MARKET RENTS AND COMPARISON WITH FAIR MARKET RENTS.—The Secretary shall pre- scribe the method for determining comparable mar- ket rent by comparison with rents charged for com- parable properties (as such term is defined in section 512), which may include appropriate adjustments for utility allowances and adjustments to reflect the value of any subsidy (other than section 8 assistance) provided by the Department of Housing and Urban Development. ‘‘(b) EXCEPTION RENTS.— ‘‘(1) RENEWAL.—In the case of a multifamily hous- ing project described in paragraph (2), pursuant to the request of the owner of the project, the contract for assistance for the project pursuant to subsection (a) shall provide assistance at the lesser of the fol- lowing rent levels: ‘‘(A) ADJUSTED EXISTING RENTS.—The existing rents under the expiring contract, as adjusted by an operating cost adjustment factor established by the Secretary (which shall not result in a negative ad- justment). ‘‘(B) BUDGET-BASED RENTS.—Subject to a deter- mination by the Secretary that a rent level under this subparagraph is appropriate for a project, a rent level that provides income sufficient to sup- port a budget-based rent (including a budget-based rent adjustment if justified by reasonable and ex- pected operating expenses). ‘‘(2) PROJECTS COVERED.—A multifamily housing project described in this paragraph is a multifamily housing project that— ‘‘(A) is not an eligible multifamily housing project under section 512(2); or ‘‘(B) is exempt from mortgage restructuring under this subtitle pursuant to section 514(h). ‘‘(3) MODERATE REHABILITATION PROJECTS.—In the case of a project with a contract under the moderate rehabilitation program, other than a moderate reha- bilitation contract under [former] section 441 of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11401], pursuant to the request of the owner of the project, the contract for assistance for the project pursuant to subsection (a) shall provide assistance at the lesser of the following rent levels: ‘‘(A) ADJUSTED EXISTING RENTS.—The existing rents under the expiring contract, as adjusted by an operating cost adjustment factor established by the Secretary (which shall not result in a negative ad- justment). ‘‘(B) FAIR MARKET RENTS.—Fair market rents (less any amounts allowed for tenant-purchased utili- ties). ‘‘(C) MARKET RENTS.—Comparable market rents for the market area. ‘‘(c) RENT ADJUSTMENTS AFTER RENEWAL OF CON- TRACT.— ‘‘(1) REQUIRED.—After the initial renewal of a con- tract for assistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] pursuant to subsection (a), (b)(1), or (e)(2), the Secretary shall annually adjust the rents using an operating cost ad- justment factor established by the Secretary (which shall not result in a negative adjustment) or, upon the request of the owner and subject to approval of the Secretary, on a budget basis. In the case of projects with contracts renewed pursuant to sub- section (a) or pursuant to subsection (e)(2) at rent levels equal to comparable market rents for the mar- ket area, at the expiration of each 5-year period, the Secretary shall compare existing rents with com- parable market rents for the market area and may make any adjustments in the rent necessary to main- tain the contract rents at a level not greater than comparable market rents or to increase rents to com- parable market rents. ‘‘(2) DISCRETIONARY.—In addition to review and ad- justment required under paragraph (1), in the case of projects with contracts renewed pursuant to sub- section (a) or pursuant to subsection (e)(2) at rent levels equal to comparable market rents for the mar- ket area, the Secretary may, at the discretion of the Secretary but only once within each 5-year period re- ferred to in paragraph (1), conduct a comparison of rents for a project and adjust the rents accordingly to maintain the contract rents at a level not greater than comparable market rents or to increase rents to comparable market rents. ‘‘(d) ENHANCED VOUCHERS UPON CONTRACT EXPIRA- TION.— ‘‘(1) IN GENERAL.—In the case of a contract for project-based assistance under section 8 for a covered project that is not renewed under subsection (a) or (b) of this section (or any other authority), to the extent that amounts for assistance under this subsection are provided in advance in appropriation Acts, upon the date of the expiration of such contract the Secretary shall make enhanced voucher assistance under sec- tion 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)) available on behalf of each low-income family who, upon the date of such expiration, is resid- ing in an assisted dwelling unit in the covered project. ‘‘(2) DEFINITIONS.—For purposes of this subsection, the following definitions shall apply: ‘‘(A) ASSISTED DWELLING UNIT.—The term ‘assisted dwelling unit’ means a dwelling unit that— ‘‘(i) is in a covered project; and ‘‘(ii) is covered by rental assistance provided under the contract for project-based assistance for the covered project. ‘‘(B) COVERED PROJECT.—The term ‘covered project’ means any housing that— ‘‘(i) consists of more than four dwelling units; ‘‘(ii) is covered in whole or in part by a contract for project-based assistance under— ‘‘(I) the new construction or substantial reha- bilitation program under section 8(b)(2) of the United States Housing Act of 1937 (as in effect before October 1, 1983); ‘‘(II) the property disposition program under section 8(b) of the United States Housing Act of 1937; ‘‘(III) the moderate rehabilitation program under section 8(e)(2) of the United States Hous- ing Act of 1937 (as in effect before October 1, 1991); ‘‘(IV) the loan management assistance pro- gram under section 8 of the United States Hous- ing Act of 1937; ‘‘(V) section 23 of the United States Housing Act of 1937 [42 U.S.C. 1437u] (as in effect before January 1, 1975); ‘‘(VI) the rent supplement program under sec- tion 101 of the Housing and Urban Development Act of 1965 [12 U.S.C. 1701s]; or ‘‘(VII) section 8 of the United States Housing Act of 1937, following conversion from assist- ance under section 101 of the Housing and Urban Development Act of 1965, which contract will (under its own terms) expire during the period consisting of fiscal years 2000 through 2004; and ‘‘(iii) is not housing for which residents are eli- gible for enhanced voucher assistance as provided, pursuant to the ‘Preserving Existing Housing In- vestment’ account in the Departments of Vet- erans Affairs and Housing and Urban Develop- ment, and Independent Agencies Appropriations Act, 1997 (Public Law 104–204; 110 Stat. 2884) or any other subsequently enacted provision of law, in lieu of any benefits under section 223 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4113). ‘‘(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. Page 4640 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ‘‘(e) CONTRACTUAL COMMITMENTS UNDER PRESERVA- TION LAWS.—Except as provided in subsection (a)(2) and notwithstanding any other provision of this subtitle, the following shall apply: ‘‘(1) PRESERVATION PROJECTS.—Upon expiration of a contract for assistance under section 8 [42 U.S.C. 1437f] for a project that is subject to an approved plan of action under the Emergency Low Income Housing Preservation Act of 1987 (12 U.S.C. 1715l note) or the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4101 et seq.), to the extent amounts are specifically made available in appropriation Acts, the Secretary shall provide to the owner benefits comparable to those provided under such plan of action, including distributions, rent in- crease procedures, and duration of low-income afford- ability restrictions. This paragraph shall apply to projects with contracts expiring before, on, or after the date of the enactment of this section [Oct. 27, 1997]. ‘‘(2) DEMONSTRATION PROJECTS.— ‘‘(A) IN GENERAL.—Upon expiration of a contract for assistance under section 8 for a project entered into pursuant to any authority specified in sub- paragraph (B) for which the Secretary determines that debt restructuring is inappropriate, the Sec- retary shall, at the request of the owner of the project and to the extent sufficient amounts are made available in appropriation Acts, provide bene- fits to the owner comparable to those provided under such contract, including annual distribu- tions, rent increase procedures, and duration of low-income affordability restrictions. This para- graph shall apply to projects with contracts expir- ing before, on, or after the date of the enactment of this section [Oct. 27, 1997]. ‘‘(B) DEMONSTRATION PROGRAMS.—The authority specified in this subparagraph is the authority under— ‘‘(i) section 210 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 (Public Law 104–134; 110 Stat. 1321–285; 42 U.S.C. 1437f note); ‘‘(ii) section 212 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 (Public Law 104–204; 110 Stat. 2897; 42 U.S.C. 1437f note); and ‘‘(iii) either of such sections, pursuant to any provision of this title [see Short Title of 1997 Amendment note set out under section 1701 of title 12]. ‘‘(3) MORTGAGE RESTRUCTURING AND RENTAL ASSIST- ANCE SUFFICIENCY PLANS.—Notwithstanding para- graph (1), the owner of the project may request, and the Secretary may consider, mortgage restructuring and rental assistance sufficiency plans to facilitate sales or transfers of properties under this subtitle, subject to an approved plan of action under the Emer- gency Low Income Housing Preservation Act of 1987 (12 U.S.C. 1715l note) [see Codification note preceding section 4101 of Title 12, Banks and Banking] or the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4101 et seq.), which plans shall result in a sale or transfer of those properties. ‘‘(f) PREEMPTION OF CONFLICTING STATE LAWS LIM- ITING DISTRIBUTIONS.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), no State or political subdivision of a State may establish, continue in effect, or enforce any law or regulation that limits or restricts, to an amount that is less than the amount provided for under the regu- lations of the Secretary establishing allowable project distributions to provide a return on invest- ment, the amount of surplus funds accruing after the date of the enactment of this section [Oct. 27, 1997] that may be distributed from any multifamily hous- ing project assisted under a contract for rental assist- ance renewed under any provision of this section (ex- cept subsection (b)) to the owner of the project. ‘‘(2) EXCEPTION AND WAIVER.—Paragraph (1) shall not apply to any law or regulation to the extent such law or regulation applies to— ‘‘(A) a State-financed multifamily housing project; or ‘‘(B) a multifamily housing project for which the owner has elected to waive the applicability of paragraph (1). ‘‘(3) TREATMENT OF LOW-INCOME USE RESTRICTIONS.— This subsection may not be construed to provide for, allow, or result in the release or termination, for any project, of any low- or moderate-income use restric- tions that can not be eliminated by unilateral action of the owner of the project. ‘‘(g) APPLICABILITY.—Except to the extent otherwise specifically provided in this section, this section shall apply with respect to any multifamily housing project having a contract for project-based assistance under section 8 [42 U.S.C. 1437f] that terminates or expires during fiscal year 2000 or thereafter. ‘‘SEC. 525. CONSISTENCY OF RENT LEVELS UNDER ENHANCED VOUCHER ASSISTANCE AND RENT RESTRUCTURINGS. ‘‘(a) IN GENERAL.—The Secretary shall examine the standards and procedures for determining and estab- lishing the rent standards described under subsection (b). Pursuant to such examination, the Secretary shall establish procedures and guidelines that are designed to ensure that the amounts determined by the various rent standards for the same dwelling units are reason- ably consistent and reflect rents for comparable unas- sisted units in the same area as such dwelling units. ‘‘(b) RENT STANDARDS.—The rent standards described in this subsection are as follows: ‘‘(1) ENHANCED VOUCHERS.—The payment standard for enhanced voucher assistance under section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)). ‘‘(2) MARK-TO-MARKET.—The rents derived from comparable properties, for purposes of section 514(g) of this Act. ‘‘(3) CONTRACT RENEWAL.—The comparable market rents for the market area, for purposes of section 524(a)(4) of this Act. ‘‘SUBTITLE D—OFFICE OF MULTIFAMILY HOUSING ASSISTANCE RESTRUCTURING ‘‘[SECS. 571 to 578. Repealed. Pub. L. 105–65, title V, § 579(a)(2), as added by Pub. L. 107–116, title VI, § 621(1), Jan. 10, 2002, 115 Stat. 2226.] ‘‘SEC. 579. TERMINATION. ‘‘(a) REPEALS.— ‘‘(1) MARK-TO-MARKET PROGRAM.—Subtitle A (except for section 524) is repealed effective October 1, 2027. ‘‘(2) OMHAR.—Subtitle D (except for this section) is repealed effective October 1, 2004. ‘‘(b) EXCEPTION.—Notwithstanding the repeal under subsection (a), the provisions of subtitle A (as in effect immediately before such repeal) shall apply with re- spect to projects and programs for which binding com- mitments have been entered into under this Act before October 1, 2027. ‘‘(c) TERMINATION OF DIRECTOR AND OFFICE.—The Of- fice of Multifamily Housing Assistance Restructuring and the position of Director of such Office shall termi- nate at the end of September 30, 2004. ‘‘(d) TRANSFER OF AUTHORITY.—Effective upon the re- peal of subtitle D under subsection (a)(2) of this sec- tion, all authority and responsibilities to administer the program under subtitle A are transferred to the Secretary.’’ [Pub. L. 109–289, div. B, title II, § 21043(b), as added by Pub. L. 110–5, § 2, Feb. 15, 2007, 121 Stat. 53, provided that: ‘‘The repeal made by section 579(a)(1) of the Mul- tifamily Assisted Housing Reform and Affordability Act of 1997 [Pub. L. 105–65, set out above] shall be Page 4641 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f deemed not to have taken effect before the date of the enactment of the Revised Continuing Appropriations Resolution, 2007 [Feb. 15, 2007], and subtitle A of such Act [set out above] shall be in effect as if no such re- peal had been made before such date of enactment.’’] [Pub. L. 107–116, title VI, § 616(a)(2), Jan. 10, 2002, 115 Stat. 2225, provided that: ‘‘The amendment made by paragraph (1) of this subsection [amending section 514 of Pub. L. 105–65, set out above] is deemed to have taken effect on the date of the enactment of Public Law 106–74 [Oct. 20, 1999] (113 Stat. 1109).’’] [Pub. L. 107–116, title VI, § 622(b), Jan. 10, 2002, 115 Stat. 2227, provided that: ‘‘The amendment made by subsection (a) [amending section 572(a) of Pub. L. 105–65, set out above] shall apply to the first Director of the Office of Multifamily Housing Assistance Re- structuring of the Department of Housing and Urban Development appointed after the date of the enactment of this Act [Jan. 10, 2002], and any such Director ap- pointed thereafter.’’] [Pub. L. 107–116, title VI, § 623(b), Jan. 10, 2002, 115 Stat. 2227, provided that: ‘‘The amendment made by subsection (a) [amending section 572(b) of Pub. L. 105–65, set out above] shall apply to any vacancy in the position of Director of the Office of Multifamily Hous- ing Assistance Restructuring of the Department of Housing and Urban Development which occurs or exists after the date of the enactment of this Act [Jan. 10, 2002].’’] [Pub. L. 105–276, title V, § 597(c), Oct. 21, 1998, 112 Stat. 2659, provided that: ‘‘This section [amending section 524(a)(2) of Pub. L. 105–65, set out above] shall take ef- fect on, and the amendments made by this section are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998].’’] GAO REPORT ON SECTION 8 RENTAL ASSISTANCE FOR MULTIFAMILY HOUSING PROJECTS Pub. L. 105–65, title V, § 532, Oct. 27, 1997, 111 Stat. 1411, directed the Comptroller General of the United States to report to the Congress on section 8 (42 U.S.C. 1437f) rental assistance for multifamily housing projects, including an analysis of how State and local housing finance agencies had benefited from rental as- sistance and the effectiveness of project oversight, not later than the expiration of the 18-month period begin- ning on Oct. 27, 1997. ADMINISTRATIVE FEES FOR CERTIFICATE AND HOUSING VOUCHER PROGRAMS Pub. L. 104–204, title II, § 202, Sept. 26, 1996, 110 Stat. 2893, provided that: ‘‘Notwithstanding section 8(q) of the United States Housing Act of 1937 [42 U.S.C. 1437f(q)], as amended— ‘‘(a) The Secretary shall establish fees for the cost of administering the certificate, voucher and moderate re- habilitation programs. ‘‘(1)(A) For fiscal year 1997, the fee for each month for which a dwelling unit is covered by an assistance contract shall be 7.5 percent of the base amount, ad- justed as provided herein, in the case of an agency that, on an annual basis, is administering a program of no more than 600 units, and 7 percent of the base amount, adjusted as provided herein, for each addi- tional unit above 600. ‘‘(B) The base amount shall be the higher of— ‘‘(i) the fair market rental for fiscal year 1993 for a 2-bedroom existing rental dwelling unit in the market area of the agency; and ‘‘(ii) such fair market rental for fiscal year 1994, but not more than 103.5 percent of the amount de- termined under clause (i). ‘‘(C) The base amount shall be adjusted to reflect changes in the wage data or other objectively meas- urable data that reflect the costs of administering the program during fiscal year 1996; except that the Secretary may require that the base amount be not less than a minimum amount and not more than a maximum amount. ‘‘(2) For subsequent fiscal years, the Secretary shall publish a notice in the Federal Register, for each geo- graphic area, establishing the amount of the fee that would apply for the agencies administering the pro- gram, based on changes in wage data or other objec- tively measurable data that reflect the cost of admin- istering the program, as determined by the Sec- retary. ‘‘(3) The Secretary may increase the fee if nec- essary to reflect higher costs of administering small programs and programs operating over large geo- graphic areas. ‘‘(4) The Secretary may decrease the fee for PHA- owned units. ‘‘(b) Beginning in fiscal year 1997 and thereafter, the Secretary shall also establish reasonable fees (as deter- mined by the Secretary) for— ‘‘(1) the costs of preliminary expenses, in the amount of $500, for a public housing agency, but only in the first year it administers a tenant-based assist- ance program under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] and only if, immediately before the effective date of this Act [Sept. 26, 1996], it was not administering a tenant-based assistance pro- gram under the 1937 Act (as in effect immediately be- fore the effective date of this Act), in connection with its initial increment of assistance received; ‘‘(2) the costs incurred in assisting families who ex- perience difficulty (as determined by the Secretary) in obtaining appropriate housing under the program; and ‘‘(3) extraordinary costs approved by the Sec- retary.’’ Similar provisions were contained in the following prior appropriations Acts: Pub. L. 104–99, title IV, § 403(b), Jan. 26, 1996, 110 Stat. 43. Pub. L. 103–120, § 11(a), Oct. 27, 1993, 107 Stat. 1151. CONTRACT RENEWALS Pub. L. 104–204, title II, § 211, Sept. 26, 1996, 110 Stat. 2895, as amended by Pub. L. 105–18, title II, § 10006, June 12, 1997, 111 Stat. 201; Pub. L. 105–65, title V, § 523(e), Oct. 27, 1997, 111 Stat. 1407; Pub. L. 106–400, § 2, Oct. 30, 2000, 114 Stat. 1675, provided that: ‘‘(a) DEFINITIONS.—For purposes of this section— ‘‘(1) the term ‘expiring contract’ means a contract for project-based assistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] that expires during fiscal year 1997; ‘‘(2) the term ‘family’ has the same meaning as in section 3(b) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)]; ‘‘(3) the term ‘multifamily housing project’ means a property consisting of more than 4 dwelling units that is covered in whole or in part by a contract for project-based assistance under section 8 of the United States Housing Act of 1937; ‘‘(4) the term ‘owner’ has the same meaning as in section 8(f) of the United States Housing Act of 1937; ‘‘(5) the term ‘project-based assistance’ means rent- al assistance under section 8 of the United States Housing Act of 1937 that is attached to a multifamily housing project; ‘‘(6) the term ‘public agency’ means a State housing finance agency, a local housing agency, or other agency with a public purpose and status; ‘‘(7) the term ‘Secretary’ means the Secretary of Housing and Urban Development; and ‘‘(8) the term ‘tenant-based assistance’ has the same meaning as in section 8(f) of the United States Housing Act of 1937. ‘‘(b) SECTION 8 CONTRACT RENEWAL AUTHORITY.— ‘‘(1) IN GENERAL.—Notwithstanding section 405(a) of the Balanced Budget Downpayment Act, I [Pub. L. 104–99, set out below], upon the request of the owner of a multifamily housing project that is covered by an expiring contract, the Secretary shall use amounts made available for the renewal of assistance under section 8 of the United States Housing Act of Page 4642 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f 1937 [42 U.S.C. 1437f] to renew the expiring contract as project-based assistance for a period of not more than one year, at rent levels that are equal to those under the expiring contract as of the date on which the con- tract expires: Provided, That those rent levels do not exceed 120 percent of the fair market rent for the market area in which the project is located. For an FHA-insured multifamily housing project with an ex- piring contract at rent levels that exceed 120 percent of the fair market rent for the market area, the Sec- retary shall provide, at the request of the owner, sec- tion 8 project-based assistance, for a period of not more than one year, at rent levels that do not exceed 120 percent of the fair market rent. ‘‘(2) EXEMPTION FOR STATE AND LOCAL HOUSING AGEN- CY PROJECTS.—Notwithstanding paragraph (1), upon the expiration of a contract with rent levels that ex- ceed the percentage described in that paragraph, if the Secretary determines that the primary financing or mortgage insurance for the multifamily housing project that is covered by that expiring contract was provided by a public agency, the Secretary shall, at the request of the owner and the public agency, renew the expiring contract— ‘‘(A) for a period of not more than one year; and ‘‘(B) at rent levels that are equal to those under the expiring contract as of the date on which the contract expires. ‘‘(3) EXEMPTION OF CERTAIN OTHER PROJECTS.—Not- withstanding paragraph (1), for section 202 projects, section 515 projects, projects with contracts entered into pursuant to [former] section 441 of the McKin- ney-Vento Homeless Assistance Act [42 U.S.C. 11401], and projects with rents that exceed 100 percent of fair market rent for the market area, but that are less than rents for comparable projects, upon the expira- tion of a section 8 contract, the Secretary shall, at the request of the owner, renew the expiring con- tract— ‘‘(A) for a period of not more than one year; and ‘‘(B) at rent levels that are equal to those under the expiring contract as of the date on which the contract expires. ‘‘(4) OTHER CONTRACTS.— ‘‘(A) PARTICIPATION IN DEMONSTRATION.—For a contract covering an FHA-insured multifamily housing project that expires during fiscal year 1997 with rent levels that exceed the percentage de- scribed in paragraph (1) and after notice to the ten- ants, the Secretary shall, at the request of the owner of the project and after notice to the ten- ants, include that multifamily housing project in the demonstration program under section 212 of this Act [set out below]. The Secretary shall ensure that a multifamily housing project with an expiring contract in fiscal year 1997 shall be allowed to be included in the demonstration. ‘‘(B) EFFECT OF MATERIAL ADVERSE ACTIONS AND OMISSIONS.—Notwithstanding paragraph (1) or any other provision of law, the Secretary shall not renew an expiring contract if the Secretary deter- mines that the owner of the multifamily housing project has engaged in material adverse financial or managerial actions or omissions with regard to the project (or with regard to other similar projects if the Secretary determines that such actions or omissions constitute a pattern of mismanagement that would warrant suspension or debarment by the Secretary). The term ‘owner’, as used in this sub- paragraph, in addition to it having the same mean- ing as in section 8(f) of the United States Housing Act of 1937 [42 U.S.C. 1437f(f)], also means an affil- iate of the owner. The term ‘affiliate of the owner’ means any person or entity (including, but not lim- ited to, a general partner or managing member, or an officer of either) that controls an owner, is con- trolled by an owner, or is under common control with the owner. The term ‘control’ means the di- rect or indirect power (under contract, equity own- ership, the right to vote or determine a vote, or otherwise) to direct the financial, legal, beneficial, or other interests of the owner. ‘‘(C) TRANSFER OF PROPERTY.—For properties dis- qualified from the demonstration program because of actions by an owner or purchaser in accordance with subparagraph (B), the Secretary shall estab- lish procedures to facilitate the voluntary sale or transfer of the property, with a preference for ten- ant organizations and tenant-endorsed community- based nonprofit and public agency purchasers meet- ing such reasonable qualifications as may be estab- lished by the Secretary. The Secretary may include the transfer of section 8 project-based assistance. ‘‘(5) TENANT PROTECTIONS.—Any family residing in an assisted unit in a multifamily housing project that is covered by an expiring contract that is not re- newed, shall be offered tenant-based assistance before the date on which the contract expires or is not re- newed.’’ Pub. L. 104–120, § 2(a), Mar. 28, 1996, 110 Stat. 834, pro- vided that: ‘‘Notwithstanding section 405(b) of the Bal- anced Budget Downpayment Act, I (Public Law 104–99; 110 Stat. 44) [set out below], at the request of the owner of any project assisted under section 8(e)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(e)(2)] (as such section existed immediately before October 1, 1991), the Secretary of Housing and Urban Development may renew, for a period of 1 year, the contract for as- sistance under such section for such project that ex- pires or terminates during fiscal year 1996 at current rent levels.’’ Pub. L. 104–99, title IV, § 405(a), (b), Jan. 26, 1996, 110 Stat. 44, as amended by Pub. L. 105–65, title V, § 523(d), Oct. 27, 1997, 111 Stat. 1407, provided that: ‘‘(a) Notwithstanding part 24 of title 24 of the Code of Federal Regulations, for fiscal year 1996 and hence- forth, the Secretary of Housing and Urban Develop- ment may use amounts available for the renewal of as- sistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f], upon termination or expira- tion of a contract for assistance under section 8 of such Act of 1937 (other than a contract for tenant-based as- sistance and notwithstanding section 8(v) of such Act for loan management assistance), to provide assistance under section 8 of such Act, subject to the Section 8 Ex- isting Fair Market Rents, for the eligible families as- sisted under the contracts at expiration or termi- nation, which assistance shall be in accordance with terms and conditions prescribed by the Secretary. ‘‘(b) Notwithstanding subsection (a) and except for projects assisted under section 8(e)(2) of the United States Housing Act of 1937 (as it existed immediately prior to October 1, 1991), at the request of the owner, the Secretary shall renew for a period of one year con- tracts for assistance under section 8 that expire or ter- minate during fiscal year 1996 at the current rent lev- els.’’ FHA MULTIFAMILY DEMONSTRATION AUTHORITY Pub. L. 104–204, title II, § 212, Sept. 26, 1996, 110 Stat. 2897, as amended by Pub. L. 105–65, title V, § 523(f), Oct. 27, 1997, 111 Stat. 1407, provided that: ‘‘(a) IN GENERAL.— ‘‘(1) REPEAL.— ‘‘(A) IN GENERAL.—Section 210 of the Departments of Veterans Affairs and Housing and Urban Devel- opment and Independent Agencies Appropriations Act, 1996 (110 Stat. 1321) [section 101(e) [title II, § 210] of Pub. L. 104–134, formerly set out as a note below] is repealed. ‘‘(B) EXCEPTION.—Notwithstanding the repeal under subparagraph (A), amounts made available under section 210(f) [of] the Departments of Vet- erans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1996 shall remain available for the demonstration pro- gram under this section through the end of fiscal year 1997. ‘‘(2) SAVINGS PROVISIONS.—Nothing in this section shall be construed to affect any commitment entered Page 4643 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f into before the date of enactment of this Act [Sept. 26, 1996] under the demonstration program under sec- tion 210 of the Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1996. ‘‘(3) DEFINITIONS.—For purposes of this section— ‘‘(A) the term ‘demonstration program’ means the program established under subsection (b); ‘‘(B) the term ‘expiring contract’ means a con- tract for project-based assistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] that expires during fiscal year 1997; ‘‘(C) the term ‘family’ has the same meaning as in section 3(b) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)]; ‘‘(D) the term ‘multifamily housing project’ means a property consisting of more than 4 dwell- ing units that is covered in whole or in part by a contract for project-based assistance; ‘‘(E) the term ‘owner’ has the same meaning as in section 8(f) of the United States Housing Act of 1937; ‘‘(F) the term ‘project-based assistance’ means rental assistance under section 8 of the United States Housing Act of 1937 that is attached to a multifamily housing project; ‘‘(G) the term ‘Secretary’ means the Secretary of Housing and Urban Development; and ‘‘(H) the term ‘tenant-based assistance’ has the same meaning as in section 8(f) of the United States Housing Act of 1937. ‘‘(b) DEMONSTRATION AUTHORITY.— ‘‘(1) IN GENERAL.—Subject to the funding limitation in subsection (l), the Secretary shall administer a demonstration program with respect to multifamily projects— ‘‘(A) whose owners agree to participate; ‘‘(B) with rents on units assisted under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] that are, in the aggregate, in excess of 120 percent of the fair market rent of the market area in which the project is located; and ‘‘(C) the mortgages of which are insured under the National Housing Act [12 U.S.C. 1701 et seq.]. ‘‘(2) PURPOSE.—The demonstration program shall be designed to obtain as much information as is feasible on the economic viability and rehabilitation needs of the multifamily housing projects in the demonstra- tion, to test various approaches for restructuring mortgages to reduce the financial risk to the FHA In- surance Fund while reducing the cost of section 8 subsidies, and to test the feasibility and desirability of— ‘‘(A) ensuring, to the maximum extent prac- ticable, that the debt service and operating ex- penses, including adequate reserves, attributable to such multifamily projects can be supported at the comparable market rent with or without mortgage insurance under the National Housing Act and with or without additional section 8 rental subsidies; ‘‘(B) utilizing section 8 rental assistance, while taking into account the capital needs of the projects and the need for adequate rental assistance to support the low- and very low-income families residing in such projects; and ‘‘(C) preserving low-income rental housing afford- ability and availability while reducing the long- term cost of section 8 rental assistance. ‘‘(c) GOALS.— ‘‘(1) IN GENERAL.—The Secretary shall carry out the demonstration program in a manner that will protect the financial interests of the Federal Government through debt restructuring and subsidy reduction and, in the least costly fashion, address the goals of— ‘‘(A) maintaining existing affordable housing stock in a decent, safe, and sanitary condition; ‘‘(B) minimizing the involuntary displacement of tenants; ‘‘(C) taking into account housing market condi- tions; ‘‘(D) encouraging responsible ownership and man- agement of property; ‘‘(E) minimizing any adverse income tax impact on property owners; and ‘‘(F) minimizing any adverse impacts on residen- tial neighborhoods and local communities. ‘‘(2) BALANCE OF COMPETING GOALS.—In determining the manner in which a mortgage is to be restructured or a subsidy reduced under this subsection, the Sec- retary may balance competing goals relating to indi- vidual projects in a manner that will further the pur- poses of this section. ‘‘(d) PARTICIPATION ARRANGEMENTS.— ‘‘(1) IN GENERAL.—In carrying out the demonstra- tion program, the Secretary may enter into partici- pation arrangements with designees, under which the Secretary may provide for the assumption by des- ignees (by delegation, by contract, or otherwise) of some or all of the functions, obligations, responsibil- ities and benefits of the Secretary. ‘‘(2) DESIGNEES.—In entering into any arrangement under this subsection, the Secretary shall select state housing finance agencies, housing agencies or non- profits (separately or in conjunction with each other) to act as designees to the extent such agencies are de- termined to be qualified by the Secretary. In loca- tions where there is no qualified State housing fi- nance agency, housing agency or nonprofit to act as a designee, the Secretary may act as a designee. Each participation arrangement entered into under this subsection shall include a designee as the primary partner. Any organization selected by the Secretary under this section shall have a long-term record of service in providing low-income housing and meet standards of fiscal responsibility, as determined by the Secretary. ‘‘(3) DESIGNEE PARTNERSHIPS.—For purposes of any participation arrangement under this subsection, des- ignees are encouraged to develop partnerships with each other, and to contract or subcontract with other entities, including— ‘‘(A) public housing agencies; ‘‘(B) financial institutions; ‘‘(C) mortgage servicers; ‘‘(D) nonprofit and for-profit housing organiza- tions; ‘‘(E) the Federal National Mortgage Association; ‘‘(F) the Federal Home Loan Mortgage Corpora- tion; ‘‘(G) Federal Home Loan Banks; and ‘‘(H) other State or local mortgage insurance companies or bank lending consortia. ‘‘(e) LONG-TERM AFFORDABILITY.— ‘‘(1) IN GENERAL.—After the renewal of a section 8 contract pursuant to a restructuring under this sec- tion, the owner shall accept each offer to renew the section 8 contract, for a period of 20 years from the date of the renewal under the demonstration, if the offer to renew is on terms and conditions, as agreed to by the Secretary or designee and the owner under a restructuring. ‘‘(2) AFFORDABILITY REQUIREMENTS.—Except as oth- erwise provided by the Secretary, in exchange for any mortgage restructuring under this section, a project shall remain affordable for a period of not less than 20 years. Affordability requirements shall be deter- mined in accordance with guidelines established by the Secretary or designee. The Secretary or designee may waive these requirements for good cause. ‘‘(f) PROCEDURES.— ‘‘(1) NOTICE OF PARTICIPATION IN DEMONSTRATION.— Not later than 45 days before the date of expiration of an expiring contract (or such later date, as deter- mined by the Secretary, for good cause), the owner of the multifamily housing project covered by that ex- piring contract shall notify the Secretary or designee and the residents of the owner’s intent to participate in the demonstration program. ‘‘(2) DEMONSTRATION CONTRACT.—Upon receipt of a notice under paragraph (1), the owner and the Sec- Page 4644 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f retary or designee shall enter into a demonstration contract, which shall provide for initial section 8 project-based rents at the same rent levels as those under the expiring contract or, if practical, the budg- et-based rent to cover debt service, reasonable oper- ating expenses (including reasonable and appropriate services), and a reasonable return to the owner, as de- termined solely by the Secretary. The demonstration contract shall be for the minimum term necessary for the rents and mortgages of the multifamily housing project to be restructured under the demonstration program, but shall not be for a period of time to ex- ceed 180 days, unless extended for good cause by the Secretary. ‘‘(g)(1) PROJECT-BASED SECTION 8.—The Secretary shall renew all expiring contracts under the demonstra- tion as section 8 project-based contracts, for a period of time not to exceed one year, unless otherwise provided under subsection (h) or in paragraph (2). ‘‘(2) The Secretary may renew a demonstration con- tract for an additional period of not to exceed 120 days, if— ‘‘(A) the contract was originally executed before February 1, 1997, and the Secretary determines, in the sole discretion of the Secretary, that the renewal pe- riod for the contract needs to exceed 1 year, due to delay of publication of the Secretary’s demonstration program guidelines until January 23, 1997 (not to ex- ceed 21 projects); or ‘‘(B) the contract was originally executed before October 1, 1997, in connection with a project that has been identified for restructuring under the joint ven- ture approach described in section VII.B.2. of the Sec- retary’s demonstration program guidelines, and the Secretary determines, in the sole discretion of the Secretary, that the renewal period for the contract needs to exceed 1 year, due to delay in implementa- tion of the joint venture agreement required by the guidelines (not to exceed 25 projects). ‘‘(h) DEMONSTRATION ACTIONS.— ‘‘(1) DEMONSTRATION ACTIONS.—For purposes of car- rying out the demonstration program, and in order to ensure that contract rights are not abrogated, sub- ject to such third party consents as are necessary (if any), including consent by the Government National Mortgage Association if it owns a mortgage insured by the Secretary, consent by an issuer under the mortgage-backed securities program of the Associa- tion, subject to the responsibilities of the issuer to its security holders and the Association under such program, and consent by parties to any contractual agreement which the Secretary proposes to modify or discontinue, the Secretary or, except with respect to subparagraph (B), designee, subject to the funding limitation in subsection (l), shall take not less than one of the actions specified in subparagraphs (G), (H), and (I) and may take any of the following actions: ‘‘(A) REMOVAL OF RESTRICTIONS.— ‘‘(i) IN GENERAL.—Consistent with the purposes of this section, subject to the agreement of the owner of the project and after consultation with the tenants of the project, the Secretary or des- ignee may remove, relinquish, extinguish, mod- ify, or agree to the removal of any mortgage, reg- ulatory agreement, project-based assistance con- tract, use agreement, or restriction that had been imposed or required by the Secretary, including restrictions on distributions of income which the Secretary or designee determines would interfere with the ability of the project to operate without above-market rents. ‘‘(ii) ACCUMULATED RESIDUAL RECEIPTS.—The Secretary or designee may require an owner of a property assisted under the section 8 new con- struction/substantial rehabilitation program under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] to apply any accumulated re- sidual receipts toward effecting the purposes of this section. ‘‘(B) REINSURANCE.—With respect to not more than 5,000 units within the demonstration during fiscal year 1997, the Secretary may enter into con- tracts to purchase reinsurance, or enter into par- ticipations or otherwise transfer economic interest in contracts of insurance or in the premiums paid, or due to be paid, on such insurance, on such terms and conditions as the Secretary may determine. Any contract entered into under this paragraph shall require that any associated units be main- tained as low-income units for the life of the mort- gage, unless waived by the Secretary for good cause. ‘‘(C) PARTICIPATION BY THIRD PARTIES.—The Sec- retary or designee may enter into such agreements, provide such concessions, incur such costs, make such grants (including grants to cover all or a por- tion of the rehabilitation costs for a project) and other payments, and provide other valuable consid- eration as may reasonably be necessary for owners, lenders, servicers, third parties, and other entities to participate in the demonstration program. The Secretary may establish performance incentives for designees. ‘‘(D) SECTION 8 ADMINISTRATIVE FEES.—Notwith- standing any other provision of law, the Secretary may make fees available from the section 8 con- tract renewal appropriation to a designee for con- tract administration under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] for pur- poses of any contract restructured or renewed under the demonstration program. ‘‘(E) FULL OR PARTIAL PAYMENT OF CLAIM.—Not- withstanding any other provision of law, the Sec- retary may make a full payment of claim or partial payment of claim prior to default. ‘‘(F) CREDIT ENHANCEMENT.— ‘‘(i) IN GENERAL.—The Secretary or designee may provide FHA multifamily mortgage insur- ance, reinsurance, or other credit enhancement alternatives, including retaining the existing FHA mortgage insurance on a restructured first mortgage at market value or using the multi- family risk-sharing mortgage programs, as pro- vided under section 542 of the Housing and Com- munity Development Act of 1992 [12 U.S.C. 1707 note]. Any limitations on the number of units available for mortgage insurance under section 542 shall not apply to insurance issued for pur- poses of the demonstration program. ‘‘(ii) MAXIMUM PERCENTAGE.—During fiscal year 1997, not more than 25 percent of the units in mul- tifamily housing projects with expiring contracts in the demonstration, in the aggregate, may be restructured without FHA insurance, unless oth- erwise agreed to by the owner of a project. ‘‘(iii) CREDIT SUBSIDY.—Any credit subsidy costs of providing mortgage insurance shall be paid from amounts made available under subsection (l). ‘‘(G) MORTGAGE RESTRUCTURING.— ‘‘(i) IN GENERAL.—The Secretary or designee may restructure mortgages to provide a restruc- tured first mortgage to cover debt service and op- erating expenses (including a reasonable rate of return to the owner) at the market rent, and a second mortgage equal to the difference between the restructured first mortgage and the mortgage balance of the eligible multifamily housing project at the time of restructuring. ‘‘(ii) CREDIT SUBSIDY.—Any credit subsidy costs of providing a second mortgage shall be paid from amounts made available under subsection (l). ‘‘(H) DEBT FORGIVENESS.—The Secretary or des- ignee, for good cause and at the request of the owner of a multifamily housing project, may for- give at the time of the restructuring of a mortgage any portion of a debt on the project that exceeds the market value of the project. ‘‘(I) BUDGET-BASED RENTS.—The Secretary or des- ignee may renew an expiring contract, including a contract for a project in which operating costs ex- Page 4645 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ceed comparable market rents, for a period of not more than one year, at a budget-based rent that covers debt service, reasonable operating expenses (including all reasonable and appropriate services), and a reasonable rate of return to the owner, as de- termined solely by the Secretary, provided that the contract does not exceed the rent levels under the expiring contract. The Secretary may establish a preference under the demonstration program for budget-based rents for unique housing projects, such as projects designated for occupancy by elder- ly families and projects in rural areas. ‘‘(J) SECTION 8 TENANT-BASED ASSISTANCE.—For not more than 10 percent of units in multifamily housing projects that have had their mortgages re- structured in any fiscal year under the demonstra- tion, the Secretary or designee may provide, with the agreement of an owner and in consultation with the tenants of the housing, section 8 tenant-based assistance for some or all of the assisted units in a multifamily housing project in lieu of section 8 project-based assistance. Section 8 tenant-based as- sistance may only be provided where the Secretary determines and certifies that there is adequate available and affordable housing within the local area and that tenants will be able to use the section 8 tenant-based assistance successfully. ‘‘(2) OFFER AND ACCEPTANCE.—Notwithstanding any other provision of law, an owner of a project in the demonstration must accept any reasonable offer made by the Secretary or a designee under this sub- section. An owner may appeal the reasonableness of any offer to the Secretary and the Secretary shall re- spond within 30 days of the date of appeal with a final offer. If the final offer is not acceptable, the owner may opt out of the program. ‘‘(i) COMMUNITY AND TENANT INPUT.—In carrying out this section, the Secretary shall develop procedures to provide appropriate and timely notice, including an op- portunity for comment and timely access to all rel- evant information, to officials of the unit of general local government affected, the community in which the project is situated, and the tenants of the project. ‘‘(j) TRANSFER OF PROPERTY.—The Secretary shall es- tablish procedures to facilitate the voluntary sale or transfer of multifamily housing projects under the demonstration to tenant organizations and tenant-en- dorsed community-based nonprofit and public agency purchasers meeting such reasonable qualifications as may be established by the Secretary. ‘‘(k) LIMITATION ON DEMONSTRATION AUTHORITY.—The Secretary shall carry out the demonstration program with respect to mortgages not to exceed 50,000 units. ‘‘(l) FUNDING.—In addition to the $30,000,000 made available under section 210 of the Departments of Vet- erans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1996 (110 Stat. 1321) [section 101(e) [title II, § 210] of Pub. L. 104–134, formerly set out as a note below], for the costs (including any credit subsidy costs associated with pro- viding direct loans or mortgage insurance) of modi- fying and restructuring loans held or guaranteed by the Federal Housing Administration, as authorized under this section, $10,000,000 is hereby appropriated, to re- main available until September 30, 1998. ‘‘(m) REPORT TO CONGRESS.— ‘‘(1) IN GENERAL.— ‘‘(A) QUARTERLY REPORTS.—Not less than every 3 months, the Secretary shall submit to the Congress a report describing and assessing the status of the projects in the demonstration program. ‘‘(B) FINAL REPORT.—Not later than 6 months after the end of the demonstration program, the Secretary shall submit to the Congress a final re- port on the demonstration program. ‘‘(2) CONTENTS.—Each report submitted under para- graph (1)(A) shall include a description of— ‘‘(A) each restructuring proposal submitted by an owner of a multifamily housing project, including a description of the physical, financial, tenancy, and market characteristics of the project; ‘‘(B) the Secretary’s evaluation and reasons for each multifamily housing project selected or re- jected for participation in the demonstration pro- gram; ‘‘(C) the costs to the FHA General Insurance and Special Risk Insurance funds; ‘‘(D) the subsidy costs provided before and after restructuring; ‘‘(E) the actions undertaken in the demonstration program, including the third-party arrangements made; and ‘‘(F) the demonstration program’s impact on the owners of the projects, including any tax con- sequences. ‘‘(3) CONTENTS OF FINAL REPORT.—The report sub- mitted under paragraph (1)(B) shall include— ‘‘(A) the required contents under paragraph (2); and ‘‘(B) any findings and recommendations for legis- lative action.’’ Pub. L. 104–134, title I, § 101(e) [title II, § 210], Apr. 26, 1996, 110 Stat. 1321–257, 1321–285; renumbered title I, Pub. L. 104–140, § 1(a), May 2, 1996, 110 Stat. 1327, which authorized the Secretary of Housing and Urban Devel- opment on and after Oct. 1, 1995, and before Oct. 1, 1997, to initiate a FHA multifamily demonstration program, was repealed by Pub. L. 104–204, title II, § 212(a)(1)(A), Sept. 26, 1996, 110 Stat. 2897. PUBLIC HOUSING MOVING TO WORK DEMONSTRATION Pub. L. 114–113, div. L, title II, § 239, Dec. 18, 2015, 129 Stat. 2897, as amended by Pub. L. 118–42, div. F, title II, § 241, Mar. 9, 2024, 138 Stat. 386, provided that: ‘‘The Sec- retary of Housing and Urban Development shall in- crease, pursuant to this section, the number of Moving to Work agencies authorized under section 204, title II, of the Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Ap- propriations Act, 1996 (Public Law 104–134; 110 Stat. 1321) [set out below] by adding to the program 100 pub- lic housing agencies that are designated as high per- forming agencies under the Public Housing Assessment System (PHAS) or the Section Eight Management As- sessment Program (SEMAP). No public housing agency shall be granted this designation through this section that administers in excess of 27,000 aggregate housing vouchers and public housing units. Of the agencies se- lected under this section, no less than 50 shall admin- ister 1,000 or fewer aggregate housing voucher and pub- lic housing units, no less than 47 shall administer 1,001- 6,000 aggregate housing voucher and public housing units, and no more than 3 shall administer 6,001–27,000 aggregate housing voucher and public housing units. Of the 100 agencies selected under this section, five shall be agencies with portfolio awards under the Rental As- sistance Demonstration that meet the other require- ments of this section, including current designations as high performing agencies or such designations held im- mediately prior to such portfolio awards. Selection of agencies under this section shall be based on ensuring the geographic diversity of Moving to Work agencies. In addition to the preceding selection criteria, agencies shall be designated by the Secretary over a 7-year pe- riod. The Secretary shall establish a research advisory committee which shall advise the Secretary with re- spect to specific policy proposals and methods of re- search and evaluation for the demonstration. The advi- sory committee shall include program and research ex- perts from the Department, a fair representation of agencies with a Moving to Work designation, and inde- pendent subject matter experts in housing policy re- search. For each cohort of agencies receiving a designa- tion under this heading, the Secretary shall direct one specific policy change to be implemented by the agen- cies, and with the approval of the Secretary, such agen- cies may implement additional policy changes. All agencies designated under this section shall be evalu- ated through rigorous research as determined by the Secretary, and shall provide information requested by the Secretary to support such oversight and evalua- Page 4646 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f tion, including the targeted policy changes. Research and evaluation shall be coordinated under the direction of the Secretary, and in consultation with the advisory committee, and findings shall be shared broadly. The Secretary shall consult the advisory committee with respect to policy changes that have proven successful and can be applied more broadly to all public housing agencies, and propose any necessary statutory changes. The Secretary may, at the request of a Moving to Work agency and one or more adjacent public housing agen- cies in the same area, designate that Moving to Work agency as a regional agency. A regional Moving to Work agency may administer the assistance under sec- tions 8 and 9 of the United States Housing Act of 1937 (42 U.S.C. 1437f and [1437]g) for the participating agen- cies within its region pursuant to the terms of its Mov- ing to Work agreement with the Secretary. The Sec- retary may agree to extend the term of the agreement and to make any necessary changes to accommodate regionalization. A Moving to Work agency may be se- lected as a regional agency if the Secretary determines that unified administration of assistance under sec- tions 8 and 9 [42 U.S.C. 1437f, 1437g] by that agency across multiple jurisdictions will lead to efficiencies and to greater housing choice for low-income persons in the region. For purposes of this expansion, in addition to the provisions of the Act retained in section 204, sec- tion 8(r)(1) of the Act [42 U.S.C. 1437f(r)(1)] shall con- tinue to apply unless the Secretary determines that waiver of this section is necessary to implement com- prehensive rent reform and occupancy policies subject to evaluation by the Secretary, and the waiver con- tains, at a minimum, exceptions for requests to port due to employment, education, health and safety. No public housing agency granted this designation through this section shall receive more funding under sections 8 or 9 of the United States Housing Act of 1937 [42 U.S.C. 1437f, 1437g] than it otherwise would have re- ceived absent this designation. The Secretary shall ex- tend the current Moving to Work agreements of pre- viously designated participating agencies until the end of each such agency’s fiscal year 2038 under the same terms and conditions of such current agreements, ex- cept for any changes to such terms or conditions other- wise mutually agreed upon by the Secretary and any such agency and such extension agreements shall pro- hibit any statutory offset of any reserve balances equal to 4 months of operating expenses. Any such reserve balances that exceed such amount shall remain avail- able to any such agency for all permissible purposes under such agreement unless subject to a statutory off- set. In addition to other reporting requirements, all Moving to Work agencies shall report financial data to the Department of Housing and Urban Development as specified by the Secretary, so that the effect of Moving to Work policy changes can be measured.’’ Pub. L. 104–134, title I, § 101(e) [title II, § 204], Apr. 26, 1996, 110 Stat. 1321–257, 1321–281, as amended by Pub. L. 105–276, title V, § 522(b)(3), Oct. 21, 1998, 112 Stat. 2564, provided that: ‘‘(a) PURPOSE.—The purpose of this demonstration is to give public housing agencies and the Secretary of Housing and Urban Development the flexibility to de- sign and test various approaches for providing and ad- ministering housing assistance that: reduce cost and achieve greater cost effectiveness in Federal expendi- tures; give incentives to families with children where the head of household is working, seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people to obtain employment and become economically self- sufficient; and increase housing choices for low-income families. ‘‘(b) PROGRAM AUTHORITY.—The Secretary of Housing and Urban Development shall conduct a demonstration program under this section beginning in fiscal year 1996 under which up to 30 public housing agencies (including Indian housing authorities) administering the public or Indian housing program and the section 8 [42 U.S.C. 1437f] housing assistance payments program may be se- lected by the Secretary to participate. The Secretary shall provide training and technical assistance during the demonstration and conduct detailed evaluations of up to 15 such agencies in an effort to identify replicable program models promoting the purpose of the dem- onstration. Under the demonstration, notwithstanding any provision of the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] except as provided in subsection (e), an agency may combine operating assistance pro- vided under section 9 of the United States Housing Act of 1937 [42 U.S.C. 1437g], modernization assistance pro- vided under section 14 of such Act [42 U.S.C. 1437l], and assistance provided under section 8 of such Act for the certificate and voucher programs, to provide housing assistance for low-income families, as defined in sec- tion 3(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)], and services to facilitate the transi- tion to work on such terms and conditions as the agen- cy may propose and the Secretary may approve. ‘‘(c) APPLICATION.—An application to participate in the demonstration— ‘‘(1) shall request authority to combine assistance under sections 8, 9, and 14 of the United States Hous- ing Act of 1937 [42 U.S.C. 1437f, 1437g, 1437l]; ‘‘(2) shall be submitted only after the public hous- ing agency provides for citizen participation through a public hearing and, if appropriate, other means; ‘‘(3) shall include a plan developed by the agency that takes into account comments from the public hearing and any other public comments on the pro- posed program, and comments from current and pro- spective residents who would be affected, and that in- cludes criteria for— ‘‘(A) families to be assisted, which shall require that at least 75 percent of the families assisted by participating demonstration public housing au- thorities shall be very low-income families, as de- fined in section 3(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)]; ‘‘(B) establishing a reasonable rent policy, which shall be designed to encourage employment and self-sufficiency by participating families, con- sistent with the purpose of this demonstration, such as by excluding some or all of a family’s earned income for purposes of determining rent; ‘‘(C) continuing to assist substantially the same total number of eligible low-income families as would have been served had the amounts not been combined; ‘‘(D) maintaining a comparable mix of families (by family size) as would have been provided had the amounts not been used under the demonstra- tion; and ‘‘(E) assuring that housing assisted under the demonstration program meets housing quality standards established or approved by the Secretary; and ‘‘(4) may request assistance for training and tech- nical assistance to assist with design of the dem- onstration and to participate in a detailed evalua- tion. ‘‘(d) SELECTION.—In selecting among applications, the Secretary shall take into account the potential of each agency to plan and carry out a program under the dem- onstration, the relative performance by an agency under the public housing management assessment pro- gram under section 6(j) of the United States Housing Act of 1937 [42 U.S.C. 1437d(j)], and other appropriate factors as determined by the Secretary. ‘‘(e) APPLICABILITY OF 1937 ACT PROVISIONS.— ‘‘(1) Section 18 of the United States Housing Act of 1937 [42 U.S.C. 1437p] shall continue to apply to public housing notwithstanding any use of the housing under this demonstration. ‘‘(2) Section 12 of such Act [42 U.S.C. 1437j] shall apply to housing assisted under the demonstration, other than housing assisted solely due to occupancy by families receiving tenant-based assistance. ‘‘(f) EFFECT ON SECTION 8, OPERATING SUBSIDIES, AND COMPREHENSIVE GRANT PROGRAM ALLOCATIONS.—The Page 4647 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f amount of assistance received under section 8, section 9, or pursuant to section 14 [42 U.S.C. 1437f, 1437g, 1437l] by a public housing agency participating in the dem- onstration under this part [section] shall not be dimin- ished by its participation. ‘‘(g) RECORDS, REPORTS, AND AUDITS.— ‘‘(1) KEEPING OF RECORDS.—Each agency shall keep such records as the Secretary may prescribe as rea- sonably necessary to disclose the amounts and the disposition of amounts under this demonstration, to ensure compliance with the requirements of this sec- tion, and to measure performance. ‘‘(2) REPORTS.—Each agency shall submit to the Secretary a report, or series of reports, in a form and at a time specified by the Secretary. Each report shall— ‘‘(A) document the use of funds made available under this section; ‘‘(B) provide such data as the Secretary may re- quest to assist the Secretary in assessing the dem- onstration; and ‘‘(C) describe and analyze the effect of assisted ac- tivities in addressing the objectives of this part [section]. ‘‘(3) ACCESS TO DOCUMENTS BY THE SECRETARY.—The Secretary shall have access for the purpose of audit and examination to any books, documents, papers, and records that are pertinent to assistance in con- nection with, and the requirements of, this section. ‘‘(4) ACCESS TO DOCUMENTS BY THE COMPTROLLER GENERAL.—The Comptroller General of the United States, or any of the duly authorized representatives of the Comptroller General, shall have access for the purpose of audit and examination to any books, docu- ments, papers, and records that are pertinent to as- sistance in connection with, and the requirements of, this section. ‘‘(h) EVALUATION AND REPORT.— ‘‘(1) CONSULTATION WITH PHA AND FAMILY REP- RESENTATIVES.—In making assessments throughout the demonstration, the Secretary shall consult with representatives of public housing agencies and resi- dents. ‘‘(2) REPORT TO CONGRESS.—Not later than 180 days after the end of the third year of the demonstration, the Secretary shall submit to the Congress a report evaluating the programs carried out under the dem- onstration. The report shall also include findings and recommendations for any appropriate legislative ac- tion. ‘‘(i) FUNDING FOR TECHNICAL ASSISTANCE AND EVALUA- TION.—From amounts appropriated for assistance under section 14 of the United States Housing Act of 1937 [42 U.S.C. 1437l] for fiscal years 1996, 1997, and 1998, the Sec- retary may use up to a total of $5,000,000— ‘‘(1) to provide, directly or by contract, training and technical assistance— ‘‘(A) to public housing agencies that express an interest to apply for training and technical assist- ance pursuant to subsection (c)(4), to assist them in designing programs to be proposed for the dem- onstration; and ‘‘(B) to up to 10 agencies selected to receive train- ing and technical assistance pursuant to subsection (c)(4), to assist them in implementing the approved program; and ‘‘(2) to conduct detailed evaluations of the activi- ties of the public housing agencies under paragraph (1)(B), directly or by contract. ‘‘(j) CAPITAL AND OPERATING FUND ASSISTANCE.—With respect to any public housing agency participating in the demonstration under this section that receives as- sistance from the Capital or Operating Fund under sec- tion 9 of the United States Housing Act of 1937 [42 U.S.C. 1437g] (as amended by the Quality Housing and Work Responsibility Act of 1998), for purposes of this section— ‘‘(1) any reference to assistance under section 9 of the United States Housing Act of 1937 shall be consid- ered to refer also to assistance provided from the Op- erating Fund under section 9(e) of such Act (as so amended); and ‘‘(2) any reference to assistance under section 14 of the United States Housing Act of 1937 [former 42 U.S.C. 1437l] shall be considered to refer also to as- sistance provided from the Capital Fund under sec- tion 9(d) of such Act (as so amended).’’ PROHIBITION AGAINST PREFERENCES WITH RESPECT TO CERTAIN PROJECTS Pub. L. 104–99, title IV, § 402(d)(4)(B), Jan. 26, 1996, 110 Stat. 42, provided that: ‘‘Notwithstanding any other provision of law, no Federal tenant selection pref- erences under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.] shall apply with respect to— ‘‘(i) housing constructed or substantially rehabili- tated pursuant to assistance provided under section 8(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(b)(2)] (as such section existed on the day before October 1, 1983); or ‘‘(ii) projects financed under section 202 of the Housing Act of 1959 [12 U.S.C. 1701q] (as such section existed on the day before the date of enactment of the Cranston-Gonzalez National Affordable Housing Act [Nov. 28, 1990]).’’ [Pub. L. 105–276, title V, § 514(c)(2), Oct. 21, 1998, 112 Stat. 2548, provided that: ‘‘Notwithstanding any other provision of law (including subsection (f) of this section [set out as an Effective and Termination Dates of 1996 Amendments note under section 1437a of this title]), section 402(d)(4)(B) of The Balanced Budget Downpay- ment Act, I [Pub. L. 104–99, set out above] (42 U.S.C. 1437a note) shall apply to fiscal year 1999 and there- after.’’] [Section 402(d)(4)(B) of Pub. L. 104–99, set out above, effective Jan. 26, 1996, only for fiscal years 1996, 1997, and 1998, and to cease to be effective Oct. 21, 1998, see section 402(f) of Pub. L. 104–99, as amended, and section 514(f) of Pub. L. 105–276, set out as Effective and Termi- nation Dates of 1996 Amendments notes under section 1437a of this title.] COMMUNITY INVESTMENT DEMONSTRATION PROGRAM Pub. L. 103–120, § 6, Oct. 27, 1993, 107 Stat. 1148, as amended by Pub. L. 104–316, title I, § 122(j), Oct. 19, 1996, 110 Stat. 3837, provided that: ‘‘(a) DEMONSTRATION PROGRAM.—The Secretary shall carry out a demonstration program to attract pension fund investment in affordable housing through the use of project-based rental assistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f]. ‘‘(b) FUNDING REQUIREMENTS.—In carrying out this section, the Secretary shall ensure that not less than 50 percent of the funds appropriated for the demonstra- tion program each year are used in conjunction with the disposition of either— ‘‘(1) multifamily properties owned by the Depart- ment; or ‘‘(2) multifamily properties securing mortgages held by the Department. ‘‘(c) CONTRACT TERMS.— ‘‘(1) IN GENERAL.—Project-based assistance under this section shall be provided pursuant to a contract entered into by the Secretary and the owner of the el- igible housing that— ‘‘(A) provides assistance for a term of not less than 60 months and not greater than 180 months; and ‘‘(B) provides for contract rents, to be determined by the Secretary, which shall not exceed contract rents permitted under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f], taking into consideration any costs for the construction, rehabilitation, or acquisition of the housing. ‘‘(2) AMENDMENT TO SECTION 203.—[Amended section 1701z–11 of Title 12, Banks and Banking.] ‘‘(d) LIMITATION.—(1) The Secretary may not provide (or make a commitment to provide) more than 50 per- cent of the funding for housing financed by any single Page 4648 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f pension fund, except that this limitation shall not apply if the Secretary, after the end of the 6-month pe- riod beginning on the date notice is issued under sub- section (e)— ‘‘(A) determines that— ‘‘(i) there are no expressions of interest that are likely to result in approvable applications in the reasonably foreseeable future; or ‘‘(ii) any such expressions of interest are not like- ly to use all funding under this section; and ‘‘(B) so informs the Committee on Banking, Fi- nance and Urban Affairs [now Committee on Finan- cial Services] of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate. ‘‘(2) If the Secretary determines that there are ex- pressions of interest referred to in paragraph (1)(A)(ii), the Secretary may reserve funding sufficient in the Secretary’s determination to fund such applications and may use any remaining funding for other pension funds in accordance with this section. ‘‘(e) IMPLEMENTATION.—The Secretary shall by notice establish such requirements as may be necessary to carry out the provisions of this section. The notice shall take effect upon issuance. ‘‘(f) APPLICABILITY OF ERISA.—Notwithstanding sec- tion 514(d) of the Employee Retirement Income Secu- rity Act of 1974 [29 U.S.C. 1144(d)], nothing in this sec- tion shall be construed to authorize any action or fail- ure to act that would constitute a violation of such Act [29 U.S.C. 1001 et seq.]. ‘‘(g) REPORT.—Not later than 3 months after the last day of each fiscal year, the Secretary shall submit to the Committee on Banking, Finance and Urban Affairs [now Committee on Financial Services] of the House of Representatives and the Committee on Banking, Hous- ing, and Urban Affairs of the Senate a report summa- rizing the activities carried out under this section dur- ing that fiscal year. ‘‘(h) ESTABLISHMENT OF STANDARDS.—Mortgages se- cured by housing assisted under this demonstration shall meet such standards regarding financing and securitization as the Secretary may establish. ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated $100,000,000 for fiscal year 1994 to carry out this section. ‘‘[(j) Redesignated (i).] ‘‘(k) TERMINATION DATE.—The Secretary shall not enter into any new commitment to provide assistance under this section after September 30, 1998.’’ ADMINISTRATIVE FEES FOR CERTIFICATE AND HOUSING VOUCHER PROGRAMS DURING FISCAL YEAR 1994 Pub. L. 103–120, § 11(a), Oct. 27, 1993, 107 Stat. 1151, pro- vided that: ‘‘Notwithstanding the second sentence of section 8(q)(1) of the United States Housing Act of 1937 [42 U.S.C. 1437f(q)(1)], other applicable law, or any im- plementing regulations and related requirements, the fee for the ongoing costs of administering the certifi- cate and housing voucher programs under subsections (b) and (o) of section 8 of such Act during fiscal year 1994 shall be— ‘‘(1) not less than a fee calculated in accordance with the fair market rents for Federal fiscal year 1993; or ‘‘(2) not more than— ‘‘(A) a fee calculated in accordance with section 8(q) of such Act, except that such fee shall not be in excess of 3.5 percent above the fee calculated in accordance with paragraph (1); or ‘‘(B) to the extent approved in an appropriation Act, a fee calculated in accordance with such sec- tion 8(q).’’ EFFECTIVENESS OF ASSISTANCE FOR PHA-OWNED UNITS Pub. L. 102–550, title I, § 150, Oct. 28, 1992, 106 Stat. 3715, provided that: ‘‘The amendments made by section 548 of the Cranston-Gonzalez National Affordable Hous- ing Act [Pub. L. 101–625, amending this section] shall be effective notwithstanding the absence of any regula- tions issued by the Secretary of Housing and Urban De- velopment.’’ MOVING TO OPPORTUNITY FOR FAIR HOUSING Pub. L. 102–550, title I, § 152, Oct. 28, 1992, 106 Stat. 3716, as amended by Pub. L. 103–120, § 3, Oct. 27, 1993, 107 Stat. 1148, which directed Secretary of Housing and Urban Development to carry out demonstration pro- gram in eligible cities to provide tenant-based assist- ance to very low-income families with children to move out of areas of high concentrations of persons living in poverty to areas with low concentrations of such per- sons, required biennial report to Congress evaluating effectiveness and final report not later than Sept. 30, 2004, provided for increased funding under section 1437c(c) of this title to carry out demonstration, and authorized implementation by notice of requirements necessary to carry out program, was repealed by Pub. L. 105–276, title V, § 550(f), Oct. 21, 1998, 112 Stat. 2610. DIRECTIVE TO FURTHER FAIR HOUSING OBJECTIVES UNDER CERTIFICATE AND VOUCHER PROGRAMS Pub. L. 102–550, title I, § 153, Oct. 28, 1992, 106 Stat. 3717, which directed Secretary of Housing and Urban Development, not later than 2 years after Oct. 28, 1992, to review and comment upon study prepared pursuant to section 558(3) of Pub. L. 101–625, formerly set out as a note below, to evaluate implementation and effects of existing demonstration and judicially mandated pro- grams, to assess factors that might impede geographic dispersion of families receiving section 8 certificates and vouchers, to identify and implement administra- tive revisions that would enhance dispersion and ten- ant choice, and to submit report to Congress describing findings, actions taken, and recommendations, was re- pealed by Pub. L. 105–276, title V, § 582(a)(3), Oct. 21, 1998, 112 Stat. 2643. INAPPLICABILITY OF CERTAIN 1992 AMENDMENTS TO INDIAN PUBLIC HOUSING Amendment by section 623(b) of Pub. L. 102–550 not applicable with respect to lower income housing devel- oped or operated pursuant to contract between Sec- retary of Housing and Urban Development and Indian housing authority, see section 626 of Pub. L. 102–550, set out as a note under section 1437a of this title. TERMINATION OF EXISTING HOUSING PROGRAMS Except with respect to projects and programs for which binding commitments have been entered into prior to Oct. 1, 1991, no new grants or loans to be made after Oct. 1, 1991, under subsec. (e)(2) of this section ex- cept for funds allocated under such section for single room occupancy dwellings as authorized by subchapter IV (§ 11361 et seq.) of chapter 119 of this title, see sec- tion 12839(a)(4) of this title. PUBLIC HOUSING MIXED INCOME NEW COMMUNITIES STRATEGY DEMONSTRATION Pub. L. 101–625, title V, § 522, Nov. 28, 1990, 104 Stat. 4207, as amended by Pub. L. 104–66, title I, § 1071(b), Dec. 21, 1995, 109 Stat. 720; Pub. L. 104–99, title IV, § 402(d)(6)(B), Jan. 26, 1996, 110 Stat. 43, which directed Secretary of Housing and Urban Development to carry out program to demonstrate effectiveness of promoting revitalization of troubled urban communities through provision of public housing in socioeconomically mixed settings, directed appointment of coordinating commit- tees to develop implementation plans, set forth scope of program including provision of supportive services, required report to Congress evaluating program’s effec- tiveness and including findings and recommendations, and provided for termination of the program 10 years after Nov. 28, 1990, was repealed by Pub. L. 105–276, title V, § 582(a)(10), Oct. 21, 1998, 112 Stat. 2644. STUDY OF PUBLIC HOUSING FUNDING SYSTEM Pub. L. 101–625, title V, § 524, Nov. 28, 1990, 104 Stat. 4215, directed Secretary of Housing and Urban Develop- Page 4649 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f ment to conduct a study assessing one or more revised methods of providing sufficient Federal funds to public housing agencies for operation, maintenance and mod- ernization of public housing, which study was to in- clude a comparison of existing methods of funding in public housing with those used by Department of Hous- ing and Urban Development in housing assisted under this section and a review of results of study entitled ‘‘Alternative Operating Subsidies Systems for the Pub- lic Housing Program’’, with an update of such study as necessary, and to submit a report to Congress not later than 12 months after Nov. 28, 1990, detailing the find- ings of this study. STUDY OF PROSPECTIVE PAYMENT SYSTEM FOR PUBLIC HOUSING Pub. L. 101–625, title V, § 525, Nov. 28, 1990, 104 Stat. 4216, directed Secretary of Housing and Urban Develop- ment to conduct a study assessing one or more revised methods of providing Federal housing assistance through local public housing agencies, examining methods of prospective payment, including the conver- sion of PHA operating assistance, modernization, and other Federal housing assistance to a schedule of steady and predictable capitated Federal payments on behalf of low income public housing tenants, and mak- ing specific assessments and to submit a report to Con- gress not later than 12 months after Nov. 28, 1990. GAO STUDY OF ALTERNATIVES IN PUBLIC HOUSING DEVELOPMENT Pub. L. 101–625, title V, § 526, Nov. 28, 1990, 104 Stat. 4216, directed Comptroller General to conduct a study assessing alternative methods of developing public housing dwelling units, other than under the existing public housing development program under this chap- ter, and submit a report to Congress regarding the find- ings and conclusions of the study not later than 12 months after Nov. 28, 1990. PREFERENCE FOR NEW CONSTRUCTION UNDER THIS SECTION Pub. L. 101–625, title V, § 545(c), Nov. 28, 1990, 104 Stat. 4220, as amended by Pub. L. 104–99, title IV, § 402(d)(4)(A), Jan. 26, 1996, 110 Stat. 42, which provided that, with respect to housing constructed or substan- tially rehabilitated pursuant to assistance provided under subsec. (b)(2) of this section, as such provisions existed before Oct. 1, 1983, and projects financed under section 1701q of Title 12, Banks and Banking, notwith- standing tenant selection criteria under contract be- tween Secretary and owner pursuant to first sentence of such section, for at least 70 percent of units becom- ing available, tenant selection criteria for such housing was to give preference to families occupying sub- standard housing (including homeless families and those living in shelters), paying more than 50 percent of family income for rent, or involuntarily displaced, and system of local preferences established under subsec. (d)(1)(A)(ii) of this section by public housing agency was to apply to remaining units that became available, to extent that such preferences were applicable with re- spect to tenant eligibility limitations, was repealed by Pub. L. 105–276, title V, § 514(c)(1), Oct. 21, 1998, 112 Stat. 2548. DOCUMENTATION OF EXCESSIVE RENT BURDENS Pub. L. 101–625, title V, § 550(b), Nov. 28, 1990, 104 Stat. 4222, provided that: ‘‘(1) DATA.—The Secretary of Housing and Urban De- velopment shall collect and maintain, in an automated system, data describing the characteristics of families assisted under the certificate and voucher programs es- tablished under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f], which data shall include the share of family income paid toward rent. ‘‘(2) REPORT.—Not less than annually, the Secretary shall submit a report to the Congress setting forth, for each of the certificate program and the voucher pro- gram, the percentage of families participating in the program who are paying for rent more than the amount determined under section 3(a)(1) of such Act [42 U.S.C. 1437a(a)(1)]. The report shall set forth data in appro- priate categories, such as various areas of the country, types and sizes of public housing agencies, types of families, and types or markets. The data shall identify the jurisdictions in which more than 10 percent of the families assisted under section 8 of such Act pay for rent more than the amount determined under section 3(a)(1) of such Act and the report shall include an ex- amination of whether the fair market rent for such areas is appropriate. The report shall also include any recommendations of the Secretary for legislative and administrative actions appropriate as a result of anal- ysis of the data. ‘‘(3) AVAILABILITY OF DATA.—The Secretary shall make available to each public housing agency admin- istering assistance under the certificate or voucher pro- gram any data maintained under this subsection that relates to the public housing agency.’’ [For termination, effective May 15, 2000, of reporting provisions in section 550(b)(2) of Pub. L. 101–625, set out above, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and item 16 on page 103 of House Document No. 103–7.] INCOME ELIGIBILITY FOR TENANCY IN NEW CONSTRUCTION UNITS Pub. L. 101–625, title V, § 555, Nov. 28, 1990, 104 Stat. 4233, provided that: ‘‘Any dwelling units in any housing constructed or substantially rehabilitated pursuant to assistance provided under section 8(b)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(b)(2)], as such section existed before October 1, 1983, and with a con- tract for assistance under such section, shall be re- served for occupancy by low-income families and very low-income families.’’ GAO STUDY REGARDING FAIR MARKET RENT CALCULATION Pub. L. 101–625, title V, § 558, Nov. 28, 1990, 104 Stat. 4233, directed Comptroller General to conduct a study to examine fair market rentals under subsec. (c)(1) of this section which are wholly contained within such market areas and submit a report to Congress not later than 18 months after Nov. 28, 1990, regarding findings and conclusions. STUDY OF UTILIZATION RATES Pub. L. 101–625, title V, § 559, Nov. 28, 1990, 104 Stat. 4234, directed Secretary of Housing and Urban Develop- ment to conduct a study of reasons for success or fail- ure, within appropriate cities and localities, in uti- lizing assistance made available for such areas under this section and submit a report to Congress con- cerning this study not later than the expiration of the 1-year period beginning on Nov. 28, 1990. FEASIBILITY STUDY REGARDING INDIAN TRIBE ELIGIBILITY FOR VOUCHER PROGRAM Pub. L. 101–625, title V, § 561, Nov. 28, 1990, 104 Stat. 4235, directed Secretary of Housing and Urban Develop- ment to conduct a study to determine feasibility and effectiveness of entering into contracts with Indian housing authorities to provide voucher assistance under subsec. (o) of this section and submit a report to Congress regarding findings and conclusions not later than the expiration of the 1-year period beginning on Nov. 28, 1990. STUDY OF PRIVATE NONPROFIT INITIATIVES Pub. L. 101–625, title V, § 582, Nov. 28, 1990, 104 Stat. 4248, directed Secretary of Housing and Urban Develop- ment to conduct a study to examine how private non- profit initiatives to provide low-income housing devel- opment in local communities across the country have succeeded, with particular emphasis on how Federal Page 4650 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f housing policy and tax structures can best promote local private nonprofit organizations involvement in low-income housing development, and submit a report to Congress regarding findings not later than 1-year after Nov. 28, 1990. PREFERENCES FOR NATIVE HAWAIIANS ON HAWAIIAN HOMELANDS UNDER HUD PROGRAMS Pub. L. 101–625, title IX, § 958, Nov. 28, 1990, 104 Stat. 4422, which directed Secretary of Housing and Urban Development to provide preferences for housing assist- ance programs to native Hawaiians in subsec. (a), de- scribed assistance programs available in subsec. (b), au- thorized Secretary to provide mortgage insurance in certain situations in subsec. (c), and defined pertinent terms in subsec. (d), was repealed by Pub. L. 102–238, § 5(b), Dec. 17, 1991, 105 Stat. 1910. AUTHORIZATION FOR PROVISION OF ASSISTANCE TO PRO- GRAMS ADMINISTERED BY STATE OF HAWAII UNDER ACT OF JULY 9, 1921 Pub. L. 101–625, title IX, § 962, as added by Pub. L. 102–238, § 5(a), Dec. 17, 1991, 105 Stat. 1909, provided that: ‘‘(a) ASSISTANCE AUTHORIZED.—The Secretary of Housing and Urban Development is authorized to pro- vide assistance, under any housing assistance program administered by the Secretary, to the State of Hawaii, for use by the State in meeting the responsibilities with which it has been charged under the provisions of the Act of July 9, 1921 (42 Stat. 108) [formerly 48 U.S.C. 691–718]. ‘‘(b) MORTGAGE INSURANCE.— ‘‘(1) IN GENERAL.—Notwithstanding any other provi- sion or limitation of this Act [see Short Title note set out under section 12701 of this title], or the Na- tional Housing Act [12 U.S.C. 1701 et seq.], including those relating to marketability of title, the Sec- retary of Housing and Urban Development may pro- vide mortgage insurance covering any property on lands set aside under the provisions of the Act of July 9, 1921 (42 Stat. 108), upon which there is or will be lo- cated a multifamily residence, for which the Depart- ment of the Hawaiian Home Lands of the State of Ha- waii— ‘‘(A) is the mortgagor or co-mortgagor; ‘‘(B) guarantees in writing to reimburse the Sec- retary for any mortgage insurance claim paid in connection with such property; or ‘‘(C) offers other security that is acceptable to the Secretary, subject to appropriate conditions prescribed by the Secretary. ‘‘(2) SALE ON DEFAULT.—In the event of a default on a mortgage insured pursuant to paragraph (1), the De- partment of Hawaiian Home Lands of the State of Hawaii may sell the insured property or housing unit to an eligible beneficiary as defined in the Act of July 9, 1921 (42 Stat. 108).’’ ANNUAL ADJUSTMENT FACTORS FOR RENTS UNDER LOWER-INCOME HOUSING ASSISTANCE PROGRAM Pub. L. 101–235, title VIII, § 801(a), (b), (d), (e), Dec. 15, 1989, 103 Stat. 2057–2059, provided that: ‘‘(a) EFFECT OF PRIOR COMPARABILITY STUDIES.— ‘‘(1) IN GENERAL.—In any case in which, in imple- menting section 8(c)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(c)(2)]— ‘‘(A) the use of comparability studies by the Sec- retary of Housing and Urban Development or the appropriate State agency as an independent limita- tion on the amount of rental adjustments resulting from the application of an annual adjustment fac- tor under such section has resulted in the reduction of the maximum monthly rent for units covered by the contract or the failure to increase such con- tract rent to the full amount otherwise permitted under the annual adjustment factor, or ‘‘(B) an assistance contract requires a project owner to make a request before becoming eligible for a rent adjustment under the annual adjustment factor and the project owner certifies that such a request was not made because of anticipated nega- tive adjustment to the project rents, for fiscal year 1980, and annually thereafter until reg- ulations implementing this section take effect, rental adjustments shall be calculated as an amount equal to the annual adjustment factor multiplied by a fig- ure equal to the contract rent minus the amount of contract rent attributable to debt service. Upon the request of the project owner, the Secretary shall pay to the project owner the amount, if any, by which the total rental adjustment calculated under the pre- ceding sentence exceeds the total adjustments the Secretary or appropriate State agency actually ap- proved, except that solely for purposes of calculating retroactive payments under this subsection, in no event shall any project owner be paid an amount less than 30 percent of a figure equal to the aggregate of the annual adjustment factor multiplied by the full contract rent for each year on or after fiscal year 1980, minus the sum of the rental payments the Sec- retary or appropriate State agency actually approved for those years. The method provided by this sub- section shall be the exclusive method by which retro- active payments, whether or not requested, may be made for projects subject to this subsection for the period from fiscal year 1980 until the regulations issued under subsection (e) take effect. For purposes of this paragraph, ‘debt service’ shall include inter- est, principal, and mortgage insurance premium if any. ‘‘(2) APPLICABILITY.— ‘‘(A) IN GENERAL.—Subsection (a) shall apply with respect to any use of comparability studies referred to in such subsection occurring before the effective date of the regulations issued under subsection (e). ‘‘(B) FINAL LITIGATION.—Subsection (a) shall not apply to any project with respect to which litiga- tion regarding the authority of the Secretary to use comparability studies to limit rental adjustments under section 8(c)(2) of the United States Housing Act of 1937 has resulted in a judgment before the ef- fective date of this Act [Dec. 15, 1989] that is final and not appealable (including any settlement agreement). ‘‘(b) 3-YEAR PAYMENTS.—The Secretary shall provide the amounts under subsection (a) over the 3-year period beginning on the effective date of the regulations issued under subsection (e). The Secretary shall provide the payments authorized under subsection (a) only to the extent approved in subsequent appropriations Acts. There are authorized to be appropriated such sums as may be necessary for this purpose. ‘‘(d) DETERMINATION OF CONTRACT RENT.—(1) The Sec- retary shall upon the request of the project owner, make a one-time determination of the contract rent for each project owner referred to in subsection (a). The contract rent shall be the greater of the contract rent— ‘‘(A) currently approved by the Secretary under section 8(c)(2) of the United States Housing Act of 1937 [42 U.S.C. 1437f(c)(2)], or ‘‘(B) calculated in accordance with the first sen- tence of subsection (a)(1). ‘‘(2) All adjustments in contract rents under section 8(c)(2) of the United States Housing Act of 1937, includ- ing adjustments involving projects referred to in sub- section (a), that occur beginning with the first anniver- sary date of the contract after the regulations issued under subsection (e) take effect shall be made in ac- cordance with the annual adjustment and com- parability provisions of sections 8(c)(2)(A) and 8(c)(2)(C) of such Act, respectively, using the one-time contract rent determination under paragraph (1). ‘‘(e) REGULATIONS.—The Secretary shall issue regula- tions to carry out this section and the amendments made by this section [amending this section], including the amendments made by subsection (c) with regard to annual adjustment factors and comparability studies. The Secretary shall issue such regulations not later than the expiration of the 180-day period beginning on the date of the enactment of this Act [Dec. 15, 1989].’’ Page 4651 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f PROHIBITION OF REDUCTION OF CONTRACT RENTS; BUDGET COMPLIANCE Pub. L. 100–628, title X, § 1004(b), Nov. 7, 1988, 102 Stat. 3264, provided that: ‘‘During fiscal year 1989, the amendment made by subsection (a)(2) [amending this section] shall be effective only to such extent or in such amounts as are provided in appropriation Acts. For purposes of section 202 of the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (Public Law 100–119) [2 U.S.C. 909], to the extent that this section has the effect of transferring an outlay of the United States from one fiscal year to an adjacent fiscal year, the transfer is a necessary (but secondary) result of a significant policy change.’’ PROJECT-BASED LOWER-INCOME HOUSING ASSISTANCE; IMPLEMENTATION OF PROGRAM Pub. L. 100–628, title X, § 1005(a), Nov. 7, 1988, 102 Stat. 3264, provided that: ‘‘To implement the amendment made by section 148 of the Housing and Community De- velopment Act of 1987 [Pub. L. 100–242, see 1988 Amend- ment note above], the Secretary of Housing and Urban Development shall issue regulations that take effect not later than 30 days after the date of the enactment of this Act [Nov. 7, 1988]. Until the effective date of the regulations, the Secretary of Housing and Urban Devel- opment shall consider each application from a public housing agency to attach a contract for assistance pay- ments to a structure, in accordance with the amend- ment made by such section 148 to section 8(d)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437f(d)(2)), and shall promptly approve such application if it meets the requirements of such section 8(d)(2).’’ PROJECT-BASED LOWER-INCOME HOUSING ASSISTANCE IN NEW CONSTRUCTION; REGULATIONS IMPLEMENTING PROGRAM Section 1005(b)(2) of Pub. L. 100–628 provided that: ‘‘To implement the amendments made by this sub- section [amending this section], the Secretary of Hous- ing and Urban Development shall issue regulations that take effect not later than 90 days after the date of the enactment of this Act [Nov. 7, 1988].’’ USE OF FUNDS RECAPTURED FROM REFINANCING STATE AND LOCAL FINANCE PROJECTS Pub. L. 100–628, title X, § 1012, Nov. 7, 1988, 102 Stat. 3268, as amended by Pub. L. 102–273, § 2(a), (c)(1), Apr. 21, 1992, 106 Stat. 113; Pub. L. 102–550, title I, § 163, Oct. 28, 1992, 106 Stat. 3722, provided that: ‘‘(a) DEFINITION OF QUALIFIED PROJECT.—For purposes of this section, the term ‘qualified project’ means any State financed project or local government or local housing agency financed project, that— ‘‘(1) was— ‘‘(A) provided a financial adjustment factor under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f]; or ‘‘(B) constructed or substantially rehabilitated pursuant to assistance provided under a contract under section 8(b)(2) of the United States Housing Act of 1937 (as in effect on September 30, 1983) en- tered into during any of calendar years 1979 through 1984; and ‘‘(2) is being refinanced. ‘‘(b) AVAILABILITY OF FUNDS.—The Secretary shall make available to the State housing finance agency in the State in which a qualified project is located, or the local government or local housing agency initiating the refinancing of the qualified project, as applicable, an amount equal to 50 percent of the amounts recap- tured from the project (as determined by the Secretary on a project-by-project basis). Notwithstanding any other provision of law, such amounts shall be used only for providing decent, safe, and sanitary housing afford- able for very low-income families and persons. ‘‘(c) APPLICABILITY AND BUDGET COMPLIANCE.— ‘‘(1) RETROACTIVITY.—This section shall apply to refinancings of projects for which settlement oc- curred or occurs before, on, or after the date of the enactment of the Housing and Community Develop- ment Act of 1992 [Oct. 28, 1992], subject to the provi- sions of paragraph (2). ‘‘(2) BUDGET COMPLIANCE.—This section shall apply only to the extent or in such amounts as are provided in appropriation Acts.’’ [Pub. L. 102–273, § 2(b), Apr. 21, 1992, 106 Stat. 113, pro- vided that: ‘‘The amendments made by subsection (a) [amending section 1012 of Pub. L. 100–628, set out above] shall apply to any refinancing of a local government or local housing agency financed project approved by the Secretary of Housing and Urban Development for which settlement occurred after January 1, 1992.’’] PUBLIC HOUSING COMPREHENSIVE TRANSITION DEMONSTRATION Pub. L. 100–242, title I, § 126, Feb. 5, 1988, 101 Stat. 1847, which directed Secretary of Housing and Urban Devel- opment to carry out program in 11 public housing agen- cies to demonstrate effectiveness of providing services to ensure transition of public housing residents to pri- vate housing, set forth requirements of program, and required interim report to Congress not later than 2 years after Feb. 5, 1988, and final report not later than 60 days after termination of program 7 years after such date, was repealed by Pub. L. 105–276, title V, § 582(a)(8), Oct. 21, 1998, 112 Stat. 2644. NONDISCRIMINATION AGAINST SECTION 8 CERTIFICATE HOLDERS AND VOUCHER HOLDERS Pub. L. 100–242, title I, § 183(c), Feb. 5, 1988, 101 Stat. 1872, which prohibited owner of subsidized project to refuse to lease dwelling unit to holder of certificate of eligibility or voucher under this section, where proxi- mate cause of refusal was status of prospective tenant as holder of such certificate or voucher, was repealed by Pub. L. 105–276, title V, § 582(a)(2), Oct. 21, 1998, 112 Stat. 2643. WITHDRAWAL BY OWNERS, DEVELOPERS, AND SPONSORS FROM PROGRAMS UNDER THIS SECTION; SURVEY AND DETERMINATION OF NUMBER; NOTIFICATION OF RENT INCREASES; REPORT TO CONGRESS; REGULATIONS TO PREVENT CONFLICT OF INTEREST ON THE PART OF FEDERAL, STATE, AND LOCAL OFFICIALS; RECOVERY OF LEGAL EXPENSES; CONTENTS OF ANNUAL REPORT Pub. L. 97–35, title III, § 326(b)–(d), Aug. 13, 1981, 95 Stat. 406, 407, as amended by Pub. L. 102–550, title I, § 129(a), Oct. 28, 1992, 106 Stat. 3711; Pub. L. 105–276, title V, § 582(a)(4), Oct. 21, 1998, 112 Stat. 2643, provided that: ‘‘(b)[(1) Repealed. Pub. L. 105–276, title V, § 582(a)(4), Oct. 21, 1998, 112 Stat. 2643.] ‘‘(2) Not later than one year after the date of the en- actment of this Act [Aug. 13, 1981], the Secretary shall transmit to the Congress a report indicating alter- native methods which may be utilized for recapturing the cost to the Federal Government of front-end invest- ment in those units which are removed from the sec- tion 8 program. ‘‘[(c) Repealed. Pub. L. 105–276, title V, § 582(a)(4), Oct. 21, 1998, 112 Stat. 2643.] ‘‘(d) RENTAL ASSISTANCE FRAUD RECOVERIES.— ‘‘(1) AUTHORITY TO RETAIN RECOVERED AMOUNTS.— The Secretary of Housing and Urban Development shall permit public housing agencies administering the housing assistance payments program under sec- tion 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] to retain, out of amounts obtained by the agencies from tenants that are due as a result of fraud and abuse, an amount (determined in accord- ance with regulations issued by the Secretary) equal to the greater of— ‘‘(A) 50 percent of the amount actually collected, or ‘‘(B) the actual, reasonable, and necessary ex- penses related to the collection, including costs of investigation, legal fees, and collection agency fees. ‘‘(2) USE.—Amounts retained by an agency shall be made available for use in support of the affected pro- Page 4652 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f–1 1 So in original. Probably should be ‘‘Fund’’. gram or project, in accordance with regulations issued by the Secretary. Where the Secretary is the principal party initiating or sustaining an action to recover amounts from families or owners, the provi- sions of this section shall not apply. ‘‘(3) RECOVERY.—Amounts may be recovered under this paragraph— ‘‘(A) by an agency through a lawsuit (including settlement of the lawsuit) brought by the agency or through court-ordered restitution pursuant to a criminal proceeding resulting from an agency’s in- vestigation where the agency seeks prosecution of a family or where an agency seeks prosecution of an owner; or ‘‘(B) through administrative repayment agree- ments with a family or owner entered into as a re- sult of an administrative grievance procedure con- ducted by an impartial decisionmaker in accord- ance with section 6(k) of the United States Housing Act of 1937 [42 U.S.C. 1437d(k)].’’ [Pub. L. 102–550, title I, § 129(b), Oct. 28, 1992, 106 Stat. 3712, provided that: ‘‘Subsection (a) [amending section 326(d) of Pub. L. 97–35, set out above] shall apply with respect to actions by public housing agencies initiated on or after the date of the enactment of this Act [Oct. 28, 1992].’’] STUDY BY SECRETARY CONCERNING FEASIBILITY OF MINIMUM RENT PAYMENT REQUIREMENTS Pub. L. 96–153, title II, § 212, Dec. 21, 1979, 93 Stat. 1110, directed the Secretary of Housing and Urban Develop- ment to conduct a study of the feasibility and financial desirability of requiring minimum rent payments from tenants in low-income housing assisted under this chapter, and to submit a report to the Congress con- taining the findings and conclusions of such study not later than ten days after the Budget for fiscal year 1981 is transmitted pursuant to section 11 of former Title 31, Money and Finance, and directed the Secretary of Housing and Urban Development to conduct a study to provide detailed comparisons between the rents paid by tenants occupying low-income housing assisted under this chapter and the rents paid by tenants at the same income level who are not in assisted housing and to transmit a report on such study to the Congress not later than Mar. 1, 1980. STUDY OF ALTERNATIVE MEANS OF ENCOURAGING THE DEVELOPMENT OF HOUSING Pub. L. 95–557, title II, § 208, Oct. 31, 1978, 92 Stat. 2095, directed that Secretary of Housing and Urban Develop- ment conduct a study for purpose of examining alter- native means of encouraging development of housing to be assisted under this section for occupancy by large families which reside in areas with a low-vacancy rate in rental housing and report to Congress no later than one year after Oct. 31, 1978, for purpose of providing leg- islative recommendations with respect to this study. TAXATION OF INTEREST PAID ON OBLIGATIONS SECURED BY INSURED MORTGAGE AND ISSUED BY PUBLIC AGENCY Pub. L. 93–383, title III, § 319(b), Aug. 22, 1974, 88 Stat. 686, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘With respect to any obliga- tion secured by a mortgage which is insured under sec- tion 221(d)(3) of the National Housing Act [section 1715l(d)(3) of Title 12, Banks and Banking] and issued by a public agency as mortgagor in connection with the fi- nancing of a project assisted under section 8 of the United States Housing Act of 1937 [this section], the in- terest paid on such obligation shall be included in gross income for purposes of chapter 1 of the Internal Rev- enue Code of 1986 [formerly I.R.C. 1954] [chapter 1 of Title 26, Internal Revenue Code].’’ RENTAL OR INCOME CONTRIBUTIONS; USE OF SPECIAL SCHEDULES OF REQUIRED PAYMENTS FOR PARTICI- PANTS IN MUTUAL HELP PROJECTS CONTRIBUTING LABOR, ETC. Pub. L. 93–383, title II, § 203, Aug. 22, 1974, 88 Stat. 668, provided that: ‘‘The rental or income contribution pro- visions of the United States Housing Act of 1937 [sec- tions 1437 to 1437j of this title], as amended by section 201 of this Act, shall not preclude the use of special schedules of required payments as approved by the Sec- retary for participants in mutual help housing projects who contribute labor, land, or materials to the develop- ment of such projects.’’ § 1437f–1. Repealed. Pub. L. 116–6, div. G, title II, § 236, Feb. 15, 2019, 133 Stat. 467 Section, Pub. L. 113–235, div. K, title II, § 221, Dec. 16, 2014, 128 Stat. 2754, related to report on section 8 project-based housing. Provisions similar to those in this section were con- tained in the following prior act: Pub. L. 113–76, div. L, title II, § 225, Jan. 17, 2014, 128 Stat. 632. § 1437g. 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 1437l of this title before October 1, 1999, shall be merged into the Capital Fund es- tablished 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 this section 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 1 for assistance for public housing agen- cies 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 Cap- ital 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 Op- erating 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.