TITLE-IV -- Homeownership and Opportunity Through HOPE


Short title: The House amendment contained a provision not included in
the Senate bill that would provide the title "Homeownership and
Opportunity for People Everywhere Act of 1990". The conference
agreement contains the title "Homeownership Opportunity through HOPE
Act".

Authorization: The House amendment would authorize $136 million for FY
1991 for HOPE for Public and Indian Housing (HOPE I). The Senate bill
contained a provision that would authorize $96 million in FY 1991, $260
million in FY 1992 and $400 million for FY 1993 for HOPE I. The
conference report authorizes $68 million in FY 1991 and $380 million in
FY 1992 for HOPE I. The House amendment authorized $102 million for FY
1991 for HOPE for Multifamily Units (HOPE II). The Senate bill would
authorize $72 million for FY 1991, $195 million for FY 1992 and $300
million for FY 1993 for HOPE II. The conference report authorizes $51
million in FY 1991 and $280 million in FY 1992. The House amendment
would authorize $72 million for HOPE for Single Family Homes (HOPE III).
The Senate bill would authorize $72 million for FY 1991, $195 million
for FY 1992 and $300 million for FY 1993 for HOPE III. The conference
report authorizes $36 million in FY 1991 and $195 million in FY 1992 for
HOPE III.

Eligible properties: The House amendment contained a provision not
included in the Senate bill that would exclude scattered site public
housing from HOPE I. The conference report contains the House provision.

The House amendment contained a provision that would define the term
"eligible property" in HOPE II as meaning a multi-family rental
property, containing 5 or more units, that is- (a) owned or held by the
Secretary; (b) financed by a loan or mortgage held by the Secretary or
insured by the Secretary; (c) determined by the Secretary to have
serious physical or financial problems under the terms of an insurance
or loan program administered by the Secretary; or (d) owned or held by
the Secretary of Agriculture, the Resolution Trust Corporation, or a
State or local government. The Senate bill contained a similar provision
except that it expressly includes loans held by the Secretary under
section 312 of the 1964 Housing Act or the NHA. For purposes of
technical assistance grants under section 412, the term "eligible
property" would also mean single family property containing no more
than four units owned by the Secretary and eligible low-income housing
as defined in the Low-Income Housing Preservation and Resident
Homeownerhip of 1990. For purposes of planning grants under Section
412(b)(8), the term "eligible property" would also mean a property
insured under the National Housing Act and assisted under Section 8 of
the 1937 U.S. Housing Act. The conference report contains the House
provision.

The House amendment contained a provision that would define the term
"eligible property" in HOPE III as a single family property containing
no more than four units that is owned or held by the Secretary, the
Secretary of Veterans Affairs, the Secretary of Agriculture, the
Resolution Trust Corporation, a State or local government (including any
in rem property) or a public housing agency or an Indian housing
authority (including scattered site family properties and properties
held by institutions within the Resolution Trust Corporation
jurisdictions). The Senate bill contained a similar provision except
that the term eligible property would include a multi-family property
containing 5 or more units that is owned by any public entity specified
in subparagraph (a), other than by the Secretary or a public housing
agency, or manufactured housing owned by the Secretary. The conference
report contains the House provision.

Grant authority: The House amendment contained a provision that would
authorize the Secretary to make planning and implementation grants to
develop and carry out HOPE homeownership programs. The Senate bill
contained a provision that would be similar except: in HOPE I, program
authority would be for specific public housing projects and
homeownership programs; HOPE II would provide for technical assistance
grants and HOPE III would not provide for planning grants. The
conference report contains the House provision.

Grant limitations: The House amendment contained a provision that would
provide that no more than 15 percent of the appropriated amounts for any
fiscal year could be used for planning grants; and no more than 5
percent of the amount reserved for planning grants could be used for
grants to any single grant recipient. The Senate bill would limit
amounts appropriated for planning grants for HOPE I to no more than
$2,000,000 in any fiscal year. Assistance for planning grants with
respect to any public housing project would be limited to $100,000. In
HOPE II planning and technical grants each would be limited to $1
million of appropriated amounts. Assistance for planning grants for any
single property would be limited to $100,000.

The conference report contains the Senate provision with an amendment
to limit planning grants to $200,000 with waiver authority given to the
Secretary to exceed this limit.

Authority to reserve housing assistance: The House amendment would
provide that, in HOPE I, the Secretary could reserve authority to
provide assistance under Section 8 of this Act (other than assistance
under section 8(o)) to the extent necessary to provide rental assistance
for a nonpurchasing tenant who resides in the project on the date the
Secretary approves the application for an implementation grant, for use
by the tenant in that or another project. The Secretary could also
reserve authority to provide such assistance in connection with
replacement of units under HOPE I. The House amendment contained a
similar provision for HOPE II except the provision for replacement
housing would not be included. For HOPE I, the Senate bill would be
similar to the House provision except Section 8(o) vouchers would be
authorized as a means of rental assistance and such Section 8 assistance
would not be available for use by the tenant in the project in which he
currently resides. The Secretary would not be given authority to reserve
such rental assistance in connection with replacement of units. For HOPE
II, the Senate bill would also contain a provision similar to the House
amendment, except that voucher assistance and Section 8 assistance could
be provided for assistance in purchasing a unit. The House amendment
would provide no section 8 assistance for HOPE III. The Senate bill
would allow the Secretary to reserve Section 8 assistance (both
certificates and vouchers) for use as rental assistance for
non-purchasing tenants in the project subject to the HOPE program or any
other unit. The conference report contains the Senate provision for HOPE
I and II. The conference report contains the House provision for HOPE
III.

Planning grants

Eligible activities: The House amendment would provide that planning
grants for HOPE I, II and III could be used for activities to develop
homeownership programs (which could include programs for cooperative
ownership). The Senate bill included a similar provision for HOPE I and
II except that programs for cooperative ownership would not be expressly
included. The Senate bill would not provide planning grants for HOPE
III. The conference report contains the House provision with amendments
to allow: economic development activities that promote economic
self-sufficiency of homebuyers and homeownership program; legal fees;
defraying costs for the ongoing training needs of the recipient that are
directly related to developing and carrying out the homeownership
program. Operating subsidies would be limited to the amount previously
funded.

Application: The House amendment would require that an application
contain a request for a planning grant, specifying the activities
proposed to be carried out, the schedule for completing the activities,
the personnel necessary to complete the activities, and the amount of
the grant requested. The Senate bill was similar except that there would
be no requirement that the request for a planning grant specify the
personnel necessary to complete the activities and there would be a
requirement that an application contain, at a minimum, a certification
by the public official responsible for submitting the comprehensive
housing strategy under section 105 of the NAHA Act that the proposed
activities are consistent with the approved housing strategy of the
State or unit of general local government within which the project is
located. The conference report contains the House provision with an
amendment to include the Senate requirement that an application contain
a certification that the proposed activities are consistent with the
approved housing strategy of the state or local government within which
the project is located.

Selection criteria: The House amendment would require that, for HOPE I,
II and III, the Secretary establish by regulation selection criteria for
a national competition for assistance under this section, which would
include the potential of the applicant for developing a successful and
affordable homeownership program, the suitability of the project for
homeownership, and national geographic diversity among projects for
which applicants are selected to receive assistance. The House amendment
would also require that the Secretary consider the availability and
suitability of properties in the relevant geographical area for HOPE II
projects. For HOPE I and II, the Senate bill would include a similar
provision except that it does not expressly require that the Secretary
establish the selection criteria by regulation and the selection
criteria need not include national geographic diversity. The Senate
provision would require that the selection criteria include the
potential capabilities of the applicant and the potential for developing
an affordable homeownership program. The Senate bill would not provide
planning grants for HOPE III. The conference report contains the House
provision with an amendment to include povisions which require that the
selection criteria include the potential capabilities of the applicant
and the potential for developing an affordable homeownership program.

Technical assistance grants: The Senate bill contained a provision not
included in the House amendment that would authorize the Secretary to
make technical assistance grants to applicants for the purpose of
developing the capacity of applicants to develop and carry out
homeownership programs under HOPE II and under the Low-Income Housing
Preservation Act of 1990, and to develop and carry out other
homeownership opportunities involving acquisition of single family
property, containing no more than four units, owned by the Secretary.
The conference report does not contain that provision.

Implementation grants

General authority: The House amendment would authorize the Secretary to
make implementation grants to applicants for HOPE I, II or III for the
purpose of carrying out homeownership programs that meet the
requirements of this title. The Senate bill was similar except that the
homeownership programs must be approved under the title. The conference
report contains the Senate provision.

Eligible activities: The House amendment would provide that
implementation grants could be used for activities to carry out
homeownership programs (including programs for cooperative ownership)
that meet the requirements under this subtitle. The Senate bill is
similar except that it would not expressly include certain programs
contained in the House amendment. The conference report contains the
House provision with amendments to allow: economic development
activities that promote economic self-sufficiency of homebuyers and
homeownership program; legal fees; defraying costs for the ongoing
training needs of the recipient that are directly related to developing
and carrying out the homeownership program. Operating subsidies would
be limited to the amount previously funded.

Matching requirements: The House amendment would require that each HOPE
I, II or III grant recipient ensure that at least one-third of the total
cost of eligible activities be provided from non-Federal sources. The
Senate bill would require a 25 percent match of HUD grant by non-Federal
sources. The House amendment would include block grants made available
by the Federal Government to States or local governments on a formula
basis as non-federal sources. The Senate bill would not include Federal
tax expenditures or funds from a grant made under Section 106(b) or
Section 106(d) of the 1974 Housing and Community Development Act except
for administrative expenses as non-federal sources. The House amendment
would allow a recipient to include the value of such items as the
Secretary determines to be appropriate, if such items have a readily
discernible market value, in determining compliance with this
subsection. The Senate bill would include as eligible matching funds the
value of taxes, fees, or other charges that are waived, foregone, or
deferred to facilitate the implementation of a homeownership program;
the value of land or other real property (except in HOPE III); the value
of investment in on-site and off-site infrastructure required for a
homeownership program; or such other in-kind contributions as the
Secretary may approve with no requirement for readily discernible market
value. Contributions for administrative expenses could be recognized
only up to an amount equal to 7 percent of the total amount of grants
made available. The conference report contains the Senate provisions
with amendments to establish a 4 to 1 match for HOPE I and a 3 to 1
match for HOPE II and III. Post-sale subsidies would not have to be
matched.

Application: The House amendment contains provisions which specify what
applications for HOPE I, II and III must contain. The Senate bill
contains similar provisions. The conference report contains the House
provision with amendments to require the certification by the public
official responsible for submitting the comprehensive housing
affordability strategy; and require identification of property
management.

Selection criteria: The House amendment contained provisions which would
specify that selection criteria include the feasibility of the
homeownership program; the extent to which the project receives support
from entities other than those assisted under this title (HOPE III does
not include this criteria); national geographic diversity among housing
for which applicants are selected to receive assistance; and the extent
to which a sufficient supply of affordable rental housing of the type
assisted under this title exists in the locality, so that the
implementation of the homeownership program would not appreciably reduce
the number of such rental units available to residents curerntly
residing in such units or eligible for residency in such units. The
Senate bill contained a similar provision but would not include the
requirement for showing feasibility, geographic diversity, or the status
of the supply of housing in the area. The Senate bill would require that
the criteria include: the quality and viability of the proposed
homeownership program, including under HOPE I the viability of the
economic self-sufficiency plan; and whether the approved comprehensive
housing affordability strategy for the jurisdiction within which the
public housing project is located includes the proposed homeownership
program as one of the general priorities identified pursuant to section
105(b)(7) of the NAHA. HOPE II would include the extent and urgency of
the need to approve an application in order to provide homeownership of
units in the property. HOPE III would also include the extent to which
suitable eligible property is available for use under the program in the
area to be served and the extent to which the types of property expected
to be covered by the homeownership program are federally owned. The
conference report contains the Senate provision with an amendment
incorporating the feasibility of the homeownership program; national
geographic diversity and the status of the supply of housing in the
area.

Approval: The House amendment contained a provision that would require
the Secretary to notify each applicant of the application's approval or
disapproval, not later than 6 months after the date of the submission
of the application. The House amendment would provide, where applicable,
that the Secretary could approve the application for an implementation
grant with approval of the application for section 8 assistance for
nonpurchasing residents of the project conditional upon the availability
of appropriations in subsequent fiscal years. The Senate bill would
require the Secretary to notify the applicant whether the application
is approved or not approved and provide that the Secretary could approve
the application for an implementation grant with a statement that
application for the section 9 or Section 8 assistance is conditionally
approved, subject to the availability of appropriations in subsequent
fiscal years. No approval would be required for HOPE III. The conference
report contains the House provision.

Limitation on HOPE I implementation grants: The Senate bill contained
a provision not included in the House amendment that would provide that
the Secretary could approve applications for grants under HOPE I or II
only for public housing projects located within the boundaries of
jurisdictions that are participating jurisdictions under title III of
the NAHA. The conference report contains the Senate provision with an
amendment allowing non-HOPE eligible jurisdictions to have a housing
plan submitted by the agency responsible for affordable housing.

Homeownership program requirements

Affordability: The House amendment contained a provision not included
in the Senate bill that would require a homeownership program under HOPE
I or II to provide for the establishment of sales prices (including
principal, insurance, taxes, and interest and closing costs) for initial
acquisition of the property such that an eligible family would not be
required to expend more than 30 percent of their adjusted monthly income
to complete a sale under the homeownership program. The House amendment
would require a homeownership program under HOPE III to provide for the
eligible family to make payments toward the costs of homeownership
(including principal, insurance, taxes, and interest and closing costs)
in an amount not to exceed 30 percent of the adjusted income of the
family. The conference report contains the House provision.

Required participation: The House amendment contained a provision not
included in the Senate bill that would require that all tenants in a
HOPE III property participate in the homeownership program before the
property could be included in the program. The conference report
contains the House provision.

Required plans: The House amendment contained a provision not included
in the Senate bill that would require a homeownership program under this
title to provide a plan for: identifying and selecting eligible families
to participate in the homeownership program; providing relocation
assistance to families who elect to move; ensuring continued
affordability by tenants, homebuyers, and homeowners in the project;
providing ongoing training and counseling for homebuyers and homeowners
in HOPE I and II; and replacing units in eligible projects covered by
a homeownership program for HOPE I. The conferfence report contains the
House provision.

Acquisition and rehabilitation limitations: The House amendment
contained a provision not included in the Senate bill that would provide
that acquisition or rehabilitation of projects under a homeownership
program in HOPE I or II could not consist of acquisition or
rehabilitation of less than the whole project in a project consisting
of more than 1 building. It would also provide that the provisions of
this subsection could be waived upon a finding by the Secretary that the
sale of less than all of the buildings in a project would be feasible
and would not result in a hardship to any tenants of the project who are
not included in the homeownership program. The conference report
contains the House provision.

Financing: The Senate bill contained a provision that would require
identification and discription of the financing proposed for any
rehabilitation and acquisition of the property for transfer to eligible
families, or by eligible families with ownership interests in, or shares
representing, units in the property. Financing could include
conventional mortgage or FHA. The House amendment contained a similar
provision with the requirement that the financing plan be contained in
application which applies to all HOPE programs. The Senate bill also
contained a provision not included in the House amendment that would
prohibit property transferred under this title to be pledged as
collateral for debt or otherwise encumbered except when the Secretary
determines that such encumberances would not: threaten the long-term
availability of the property for occupancy by low-income families or
expose the Federal Government or the public housing agency to undue
risks related to action that could be taken pursuant to default. The
Secretary would also have to determine that any debt obligation could
be serviced from project income, including operating assistance that
would be provided in accordance with operating subsidies; and the
proceeds of such encumbrances would be used only to meet housing
standards in accordance with subsection (c) or to make such additional
capital improvements as the Secretary determines to be consistent with
the purposes of this title. The House amendment contained a provision
that would require that any lender that provides financing in connection
with a homeownership program under this title would give the public
housing agency, resident management corporation, purchasers of
individual units, or other appropriate entity a reasonable opportunity
to cure a financial default before foreclosing on the property, or
taking other action as a result of the default. The Senate bill
contained a similar provision, except that it would not extend default
protection to purchasers of individual units. The conference report
contains the Senate provision with an amendment to include in
application and to conform to changes in source of operating subsidies.

Housing quality standards: The House amendment contained a provision
that would require that the application include a plan ensuring that the
unit would be free from any defects that pose a danger to health or
safety before transfer of an ownership interest in, or shares
representing, a unit to an eligible family; and would meet housing
quality standards established by the Secretary for the purpose of this
title not later than 2 years after transfer of an ownership in, or
shares representing, a unit to an eligible family. The Senate bill
contained a provision that would require that projects transferred under
this title meet housing standards established by the Secretary. It would
provide that the Secretary, in response to a written plan contained in
an application, could give an applicant a period of not to exceed 3
years (from the date the property is transferred to the applicant to
meet such housing standards. Neither a public housing agency under HOPE
I or the Secretary or an existing owner under HOPE II could convey fee
simple title to a project until the property meets the housing standards
established under paragraph (1). Under HOPE III, the Senate bill would
require the eligible family to make or cause to be made repairs and
improvements required to correct all defects that pose a substantial
danger to health and safety within one year, make such repairs and
improvements to the property as may be necessary to meet housing
standards established by the Secretary within three years and permit
reasonable periodic inspections at reasonable times by the unit of
general local government or the recipient. The conference report
contains the House provision for HOPE I, II and III with an amendment
to include a prohibition on conveying fee simple title until the
property meets the minimum prescribed housing standards.

Replacement plan: The House amendment contained a provision that would
require each homeownership program under HOPE I to provide for the
replacement of each unit covered by the program for which the ownership
interest is not retained by the public housing agency. It would require
that such replacement would be in the form of a 5-year contract for
tenant-based assistance under section 8(b). The Senate bill contained
a provision that would prohibit public housing projects from being
transferred under this title unless the Secretary has entered into a
binding agreement with the local public housing agency to make available
to such agency and Federal funding assistance to provide an additional
decent, safe, sanitary, and affordable dwelling unit as a replacement
for each unit in a public housing project to be transferred. Such
replacement housing could consist of the development of new public
housing units by the public housing agency in accordance with section
5; the rehabilitation of vacant public housing units by the public
housing agency in accordance with section 14(n)(1); the use of 5-year,
tenant-based rental assistance under section 8(b)(2) and section
8(o)(9); the use of a State or local program that is comparable to any
of the Federal programs referred to above as to housing standards,
eligibility, and contribution to rent, and provides a term of assistance
of not less than 5 years; where the applicant is a resident management
corporation, resident council, or cooperative association, the
acquisition of nonpublicly owned housing units, which the applicant
shall operate as rental housing comparable to public housing as to term
of assistance, housing standards, eligibility, and contribution to rent;
or any combination of such methods. The Senate bill would also require
that tenant-based rental assistance under section 8 (or a comparable
State or local program) would be counted as replacement housing only if
the Secretary finds that replacement with assistance specified above is
not feasible, and the supply of private rental housing actually
available to those who would receive tenant-based assistance is
sufficient for the total number of certificates and vouchers available
in the community and that such supply is likely to remain available for
the full 5-year term of such assistance. It would provide that,
notwithstanding the preceding sentence, vouchers could be used to
provide replacement housing in any community where the vacancy rate for
standard rental units exceeds the national average vacancy rate for such
units. The conference report contains the Senate provision with an
amendment to delete the requirements related to the use of tenant-based
rental assistance.

Protection of existing tenants: The House amendment contained a
provision that would require the recipient to inform each such tenant
that if the tenant decides not to purchase a unit, or is not qualified
to do so, for HOPE I the public housing agency will offer each tenant
(a) a unit in another public housing project, or (b) assistance under
Section 8 (other than assistance under subsection (o) of such section),
for use in that or another project, and for HOPE II Section 8 assistance
(other than under 8(o)) for use in the program project or another
project. In both programs, tenants that elect to move would receive
relocation assistance. If a tenant in a HOPE I project decides not to
purchase a unit, or is not qualified to do so, the Senate bill would
require the recipient to permit each otherwise qualified tenant to
continue to reside in the project at rents that do not exceed levels
consistent with 1937 Housing Act during the term of the operating
assistance contract. If an otherwise qualified tenant chooses to move
(at any time during the term of such operating assistance contract), the
public housing agency would offer such tenant a unit in another public
housing project, or section 8 assistance for use in other housing.

The Senate bill would also require that tenants renting a unit in a
project transferred under this subtitle would have all rights provided
to tenants of public housing under this Act. The Senate bill contained
a provision, applicable to HOPE II, which was similar to the House
provision except that vouchers would not be expressly forbidden. The
conference report contains the Senate provision.

Other program requirements

Required transfer: The House amendment contained a provision that would
require that, where the Secretary approves an application providing for
the transfer of the eligible project from the public housing agency to
another applicant (or other entity, including a for-profit entity or a
nonprofit entity in cooperation with an applicant) under HOPE I, the
public housing agency would transfer the project to such other entity,
in accordance with the approved homeownership program. The Senate bill
contained a similar provision except that it would not state that
purchasing entities could include a for-profit entity or a nonprofit
entity in cooperation with an applicant. The conference report contains
the Senate provision.

Preferences: The House amendment contained a provision that would
require a recipient of an implementation grant under HOPE I or II to
give preference to current tenants in selecting eligible families for
homeownership. The Senate bill contained a similar provision except that
the recipient would give a second preference to otherwise qualified
eligible families who have completed participation in the project
independence program authorized under section 14(j) of the NAHA, or in
another economic self-sufficiency program specified by the Secretary.
The Senate bill contained a provision in HOPE III not included in the
House amendment that would require that the preference for certain
categories of eligible families under sections 8(d)(1)(a) and 8(o)(3)
must not apply to the provision of assistance to a family residing in
a dwelling unit in an eligible property on the date the Secretary
approves an application for an implementation grant. The conference
report contains the Senate provision with an amendment deleting
reference to Project Independence.

Operating subsidies: The House amendment contained a provision in HOPE
I which would provide that operating subsidies under section 9 of the
1937 Housing Act would not be available with respect to a public housing
project after the date of its sale by the public housing agency. The
Senate bill contained a provision which would provide that, to the
extent that the total income of a public housing project transferred
under this title is not sufficient to cover the costs of operation, the
public housing agency could enter into a 5-year operating assistance
contract, from amounts made available for use under section 9, to
provide assistance for the operating costs of an approved homeownership
program. The total amount of the contract would not exceed 5 times the
current annual operating subsidy determined under section 9 of this Act
with respect to the project for the year before sale of the project
under this title, plus an annual inflation adjustment determined by the
Secretary. The assistance would be paid on an annual basis, and the
assistance could not exceed an amount for each year that is equal to the
annual operating subsidy determined under section 9 of this Act with
respect to the project for the year before sale of the project under
this title, plus an annual inflation adjustment determined by the
Secretary. The conference report contains the House provision.

Use of proceeds: The House amendment contained a provision that would
require the entity that transfers ownership interest in units to
eligible families, or another entity specified in the approved
application, use the proceeds, if any, from the initial sale for costs
of the homeownership program, including operating expenses, improvements
to the project, business opportunities for lower income families,
supportive services related to the homeownership program, additional
homeownership opportunities, and other activities approved by the
Secretary. The Senate bill contained a provision that was similar except
that the transferring entity could use only 50 percent of the proceeds,
if any, from the initial sale for costs of the homeownership program.
The remaining 50 percent would be returned to the Secretary for use
under this subtitle, subject to limitations contained in appropriations
Acts. Such entity would keep and make available to the Secretary all
records necessary to accurately calculate payments due the Secretary
under this subsection. This restriction would apply only to multifamily
units in HOPE III. The conference report contains the House provision.

Restrictions on resale: The House amendment contained a provision that
would permit a homeowner under a homeownership program to transfer the
homeowner's ownership interest in, or shares representing, the unit.
Where a grant recipient (in the case of HOPE II), resident management
corporation, resident council, or cooperative has jurisdiction over the
unit, the grant recipient (HOPE II) corporation, council, or cooperative
would have the right to purchase the ownership interest in, or shares
representing, the unit from the homeowner for the amount specified in
a firm contract between the homeowner and a prospective buyer. Where
such an entity does not have jurisdiction over the unit or elects not
to purchase and if the prospective buyer is not a lower income family,
the public housing agency or the implementation grant recipient would
have the right to purchase the ownership interest in, or shares
representing, the unit for the same amount.

The Senate bill was similar except that the homeowner could transfer the
homeowner's interest in or shares representing the units only to
low-income families; and only at a price consistent with guidelines
established by the Secretary that are designed to provide the owner with
a fair return, including any improvements, and to ensure that the
housing would remain affordable to a reasonable range of low-income
homebuyers. Where a resident management corporation or resident council
elects to purchase, it would make the unit available for purchase by
eligible families in accordance with the preference that would apply
upon the initial sale of the unit.

The House amendment included a provision not included in the Senate bill
that would provide that the homeownership program could establish
additional restrictions on the resale of a unit under the program.

The House bill would require that, with respect to a homeowner assisted
under a homeownership program under this title, if such homeowner sells
a unit or shares representing a unit within 5 years after acquisition
by the homeowner, the Secretary would provide for the recapture of: an
amount equal to the net proceeds received by the homeowner from any sale
or transfer of the unit by such homeowner less the sum of the following
amounts: any equity interest of the homeowner in the unit (including any
costs paid at closing); the value of any improvements made by the
homeowner during ownership of the unit; and an amount equal to the price
paid for the unit upon sale to the homeowner multiplied by any percent
increase in the appropriate consumer price index, as published monthly
by the Bureau of Labor Statistics, over the period the property is owned
by the homeowner. The Senate bill would require that if the sale to the
first eligible family is for less than market value, the homeownership
program must provide for appropriate restrictions to assure that an
eligible family may not receive any undue profit. It would require that
the plan provide for authorizing the family to retain a portion of the
net proceeds of the sale on a sliding scale over a 10-year period;
limiting the family's consideration for its interest in the property to
the total of the contribution to equity paid by the family; the value,
as determined by such means as the Secretary shall determine through
regulation, of any improvements installed at the expense of the family
during the family's tenure as owner; and (iii) the appreciated value
determined by an inflation allowance at a rate which may be based on a
cost-of-living index, an income index, or market index as determined by
the Secretary through regulation and agreed to by the purchaser and the
entity that transfers ownership interests in, or shares representing,
units to eligible families (or another entity specified in the approved
application), at the time of initial sale, and applied against the
contribution to equity; such entity may, at the time of initial sale,
enter into an agreement with the family to set a maximum amount which
this appreciation may not exceed; execution by the initial purchaser of
a promissory note equal to the difference between the market value and
the purchase price, payable to the public housing agency or other entity
designated in the homeownership plan, together with a mortgage securing
the obligation of the note; or any other appropriate arrangement that
the Secretary determines is adequate to prevent undue profit for at
least 10 years.

The Senate bill contained a provision not included in the House
amendment that would provide that upon sale, the entity that transferred
ownership interests in, or shares representing, units to eligible
families, or another entity specified in the approved application, would
ensure that subsequent owners are bound by the same limitations on
resale and further restrictions on equity appreciation.

The House bill would require that any portion of the net sales proceeds
in HOPE I, II and III, not be retained by the homeowner pursuant to
recapture of the proceeds, would be returned to the Secretary for use
under this title, subject to approval under appropriations Acts. The
Senate bill would provide that 50 percent of any portion of the net
sales proceeds that may not be retained by the homeowner would be paid
to the entity that transferred ownership interests in, or shares
representing, units to eligible families, or another entity specified
in the approved application, for use for improvements to the project,
business opportunities for lower income families, supportive services
related to the homeownership program, additional homeownership
opportunities, and other activities approved by the Secretary. The
remaining 50 percent would be returned to the Secretary for use under
this subtitle, subject to limitations contained in appropriations Acts.
Such entity would keep and make available to the Secretary all records
necessary to accurately calculate payments due the Secretary under this
subsection. For HOPE III, the Senate bill would provide that in the case
of multifamily projects, 50 percent of any portion of the net sales
proceeds that may not be retained by homeowner under the approved plan
must be paid to the recipient, for use by the recipient for eligible
activities under HOPE III. The remaining 50 percent of such proceeds
would be returned to the Secretary for use under HOPE III, subject to
limitations contained in appropriations Acts. Such entity would keep and
make available to the Secretary all records necessary to calculate
accurately payments due to the Secretary under this subsection.

The House amendment contained a provision in HOPE I and II not included
in the Senate bill that would provide that the requirements under this
subsection regarding rehabilitation, resale, or transfer of the
ownership interest of a homeowner shall be judicially enforceable
against the grant recipient with respect to actions involving
rehabilitation, and against purchasers of properties under this
subsection or their successors in interest with respect to other actions
by affected lower income families, resident management corporations,
resident councils, (public housing agencies in the case of HOPE I), and
any agency, corporation, or authority of the United States Government.
The parties specified in the United States Government. The parties
specified in the preceding sentence would be entitled to reasonable
attorney fees upon prevailing in any such judicial action.

The conference report contains the House provision with an amendment to
restrict profit for 6 years and recapture subsidies for up to 15 years.

Limit on economic developmental activities: The House amendment
contained a provision applicable to HOPE I and II that would provide
that not more than an aggregate of $250,000 from amounts made available
could be used for economic development activities. The Senate bill
contained a similar provision in HOPE I except that the dollar
limitation on economic development activities would include amounts made
available under section 14 of this Act in addition to those made
available for economic development activities under this title. The
Senate bill also contained a provision in HOPE II that was similar
except the aggregate limitation is $225,000 and amounts under Section
14 of this Act would not be included.

Timely homeownership: The Senate bill contained a provision not included
in the House amendment that would require that grant recipients transfer
ownership of the property to tenants within a specified period of time
that the Secretary determines to be reasonable. It would require that
during the interim period when the property continues to be operated and
managed as rental housing, the recipient would utilize written tenant
selection policies and criteria that are approved by the Secretary as
consistent with the purpose of improving housing opportunities for very
low-income families. It would require the recipient to promptly notify
in writing any rejected applicant of the grounds for any rejection. The
Senate bill would require that tenants renting a unit in a project
transferred under HOPE I would have all rights provided to tenants of
public housing under this Act. The conference report contains the Senate
provision with an amendment to delete the word "very".

Records and audit: The Senate bill contained a provision not included
in the House amendment that would require each recipient under HOPE I
or II to keep such records as may be reasonably necessary to fully
disclose the amount and the disposition by such recipient of the
proceeds of assistance received under this title (and any proceeds from
financing or sales), the total cost of the homeownership program in
connection with which such assistance is given or used, and the amount
and nature of that portion of the program supplied by other sources, and
such other sources as will facilitate an effective audit. It would
provide the Secretary and the Comptroller General with access for the
purpose of audit and examination to any books, documents, papers, and
records of the recipient that are pertinent to assistance received under
this title. The conference report contains the Senate provision.

Continuation of mortgage terms: The House amendment contained a
provision that would require that any recipient of a grant that assumes
a mortgage covering eligible property would, in addition to any
requirements of the homeownership program, comply with the low-income
affordability restrictions under the mortgage for a period not shorter
than the remaining term of the mortgage. The Senate bill contained a
similar provision except that the continuation of affordability
restrictions would only apply to an entity that (as determined by the
Secretary) intends to own the housing on a permanent basis. The
conference report contains the Senate provision.

Foreclosure of HUD assisted property: The Senate bill contained a
provision not included in the House amendment that would provide that
in connection with a foreclosure sale, the Secretary could require, as
a term or condition of sale under HOPE II, that an eligible property be
used by the purchaser, and its successors and assigns only in accord
with an approved homeownership program. The conference report does not
contain that provision.

Definitions

Eligible Family:  The House amendment contained a provision that would
define "eligible family" in HOPE I as a family or individual who is a
tenant in the public or Indian housing project on the date the Secretary
approves an implementation grant; a lower income family; or a family or
individual who is assisted under a housing program administered by the
Secretary or the Secretary of Agriculture (not including any non-lower
income families assisted under any mortgage insurance program
administered by either Secretary).  The Senate bill contained a similar
provision except that the definition of the term "eligible family"
would not exclude any non-lower income families assisted under any
mortgage insurance program administered by either the Secretary of
Agriculture or the HUD Secretary.  The House bill would define the term
"eligible family" under HOPE III as a family or individual who has an
income that does not exceed 80 percent of the median income for the area
and is a first-time homebuyer.  The Senate bill contained a similar
provision except that the term "eligible family" would include
families or individuals who do not currently own a home.  The conference
report contains the House provision with a conforming amendment which
changes "lower income" to low income.

Recipient: The House amendment contained a provision that would define
the term "recipient" as meaning an applicant approved to receive a
grant under this title. The Senate bill contained a provision that would
be similar except that the term "recipient" could also mean such other
entity specified in the approved application that would assume the
obligations of the recipient under this title. The conference report
contains the Senate provision.

Relationships to other programs: The House amendment contained a
provision that would require that the program authorized under this
title would be in addition to any other public housing homeownership and
management opportunities, including opportunities under section 5(h) and
title II of this Act. The Senate bill contained a provision that would
provide that the provisions of this title would not apply to housing
developed or transferred for homeownership purposes prior to the
enactment of the National Affordable Housing Act under the turnkey III,
the mutual help, or any other homeownership program established under
section 5(h), section 6(c)(4)(d), or section 21 of this Act. The
conference report contains the Senate provision with an amendment to
allow for 5(h) to continue with HOPE replacement housing requirements.

Annual report: The Senate bill contained a provision not included in the
House amendment that would require the Secretary to annually submit to
the Congress a report setting forth the number, type, and cost of public
housing units pursuant to this title; the income, race, gender,
children, and other characteristics of families participating (or not
participating) in homeownership programs funded under this title; the
amount and type of financial assistance provided under and in
conjunction with this title; the amount of financial assistance provided
under this title that was needed to ensure affordability and meet future
maintenance and repair costs; and the recommendations of the Secretary
for statutory and regulatory improvements to the program. Any authority
of the Secretary under this title to provide financial assistance, or
to enter into contracts to provide financial assistance, would be
effective only to such extent or in such amounts as are or have been
provided in advance in an appropriation Act. The conference report
contains the Senate provision.

Limitation on selection criteria: The House amendment contained a
provision not included in the Senate bill that would provide that, in
establishing criteria for selecting applicants to receive assistance,
the Secretary could not establish any selection criterion or criteria
that grant or deny such assistance to an applicant (or have the effect
of granting or denying assistance) based on the implementation,
continuation, or discontinuation of any public policy, regulation, or
law of any jurisdiction in which the applicant or project is located.
The conference report contains the House provision.

Amendments relating to demolition and disposition of public housing: The
House amendment contained a provision that would amend Section 18(b)(1)
of the 1937 United States Housing Act by striking "disposition" and
inserting the following: "disposition, and the tenant councils,
resident managment corporation, and tenant cooperative, if any, have
been given appropriate opportunities to purchase the project or portion
of the project covered by the application". The Senate bill contained
a similar provision except tenant cooperatives would not be included.
The conference report contains the House provision.

The Senate bill contained an additional provision not included in the
House amendment that would provide that the provisions of Section 18
would not apply to the disposition of a public housing project in
accordance with an approved homeownership program under HOPE I. The
conference report contains the Senate provision.

Amendment to Section 8: The Senate bill contained a provision not
included in the House amendment that would make conforming amendments
to allow for Section 8 certificates and voucher assistance for families
that qualify because of their participation in a HOPE project voucher
in connection with a homeownership program approved under title IV of
the National Affordable Housing Act. The conference report contains the
Senate provision.

Section 8 assistance: The Senate bill contained a provision not included
in the House amendment that would provide that to the extent that the
total income of an eligible property transferred under HOPE II is not
sufficient to cover the costs of operation, the Secretary could extend
existing contracts for loan management assistance for up to 5 years and,
if such extensions are not sufficient, provide additional rental
assistance under section 8(b)(3) subject to the availability of
appropriations to provide assistance for the operating costs of an
approved homeownership program. The Senate bill would provide that the
requirement for giving preference to certain categories of eligible
families under sections 8(d)(1)(a) and 8(o)(3) would not apply to the
provision of assistance to a family residing in a dwelling unit in an
eligible project on the date the Secretary approves an application for
an implementation grant. The conference report contains the Senate
provision.

Related CIAP amendments: The Senate bill contained a provision not
included in the House amendment that would require the Secretary to make
assistance available in the form of grants for the purpose of
rehabilitating vacant public housing units as replacement housing for
public housing. The conference report does not contain that provision
but contains an amendment to allow for 5(h) scattered site and to
prevent CIAP from being used post-sale.


Transition for section 21A demonstration: The House amendment contained
a provision that would amend Section 21 Public Homeownership and
Management Opportunities provisions of the 1937 United States Housing
Act. The Secretary would be allowed to provide financial assistance to
public housing agencies, resident management corporations, or resident
councils that obtain, training, technical assistance, and educational
assistance as necessary to promote homeownership opportunities under
Section 21. The Secretary could use not more than $3,000,000 in any
fiscal year of amounts appropriated for CIAP to carry out this
subparagraph. Section 21 would not be in effect after the effective date
of the regulations implementing subtitle A of title III of the U.S.
Housing Act of 1937 but would provide transition to allow for
continuation of resident management development and project transfers
if such were initiated before the effective date. The Senate bill
contains a provision that would terminate Section 5(h) and Section 21
of the 1937 United States Housing Act on the effective date of enactment
of this Act. This termination would not affect housing transferred for
homeownership purposes prior to enactment of this Act under Section 5(h)
or Section 21 of this Act. The conference report contains the House
provision with an amendment to limit the authorization of $3 million
for fiscal year 1991 only.

Operating subsidies: The Senate bill contained a provision not included
in the House amendment that would provide that if a public housing
agency transfers a public housing project in accordance with an approved
homeownership program, the payments received under Section 9 with
respect to that project would continue for a 5-year period, subject to
the availability of appropriations for such purpose, in amounts not less
than the amounts that would have been received without such transfer.
The conference report does not contain the Senate provision.

Conforming amendment for HOPE II: The House amendment contained a
provision that would provide that eligible property assisted by a
homeownership implementation grant under HOPE II would not be subject
to the requirements of section 203 of the 1978 Housing and Community
Development Amendments applicable to the sale of projects either at
foreclosure or after acquisition by the Secretary. The Senate bill was
similar except that it would also exempt eligible property covered by
a homeownership program from the Low-Income Housing Preservation and
Resident Homeownership Act of 1990. The conference report contains the
Senate provision.

Applicability: The House amendment contained a provision that would
require that in accord with section 201(b)(2) of the 1937 United States
Housing Act, the amendments made by this subtitle would also apply to
public housing developed or operated pursuant to a contract between the
HUD Secretary and an Indian Housing Authority. The Senate bill contained
a similar provision except that nothing in this HOPE title would affect
the Indian mutual housing program. The conference report contains the
House provision.