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Title 12 — Banks and BankingRelease 119-73

§1701z–4 Abandoned properties demonstration proj­ect

Title 12 › Chapter CHAPTER 13— - NATIONAL HOUSING › § 1701z–4

Last updated Apr 6, 2026|Official source

Summary

The Secretary can give grants to local governments to run demonstration programs that stop housing abandonment or bring life back to run-down areas. Grants must help plan and act quickly. Projects that are likely to stop abandonment within two years and use new ideas get priority. Allowed actions include buying or taking control of bad properties by legal means, fixing streets and parks, tearing down unsafe buildings, creating community or play areas, improving trash and street cleaning, rehabbing homes, and starting local nonprofit housing managers or repair programs. Property from a project can be sold or leased at fair market value to nonprofits, cooperatives, public agencies, or buyers who qualify for certain insured mortgages, to provide housing for low- or moderate-income people. Grants can pay up to 90% of a project’s net cost. Up to $20,000,000 was authorized for the fiscal year ending June 30, 1971, and those funds remain available until spent. Money authorized but not yet appropriated could be made available for a succeeding fiscal year that starts before July 1, 1972. No more than one-third of a year’s total grant money may go to projects in one locality. Some urban renewal rules in title 42 may also apply as if these were urban renewal projects.

Full Legal Text

Title 12, §1701z–4

Banks and Banking — Source: USLM XML via OLRC

(a)In carrying out activities under section 1701z–1 of this title, the Secretary may undertake programs to demonstrate the most feasible means of providing assistance to localities in which a substantial number of structures are abandoned or are threatened with abandonment for the purpose of arresting the process of housing abandonment in its incipiency or in restoring viability to blighted areas in which abandonment is pervasive. For this purpose, the Secretary is authorized to make grants, subject to the limitations of this section, to assist local public bodies in planning and implementing demonstration projects for prompt and effective action in alleviating and preventing such abandonment in designated demonstration areas.
(b)In administering this section, the Secretary shall give preference to those demonstration projects which in his judgment can reasonably be expected to arrest the process of abandonment in the demonstration area within a period of two years and which provide for innovative approaches to combating the problem of housing abandonment. Such projects may include, but shall not be limited to (1) acquisition by negotiated purchase, lease, receivership, tax lien proceedings, or other means authorized by law and satisfactory to the Secretary, of real property within the demonstration area or areas which is abandoned, deteriorated, or in violation of applicable code standards; (2) the repair of streets, sidewalks, parks, playgrounds, publicly owned utilities, public buildings to meet needs consistent with the revitalization and continued use of the area; (3) the demolition of structures determined to be structurally unsound or unfit for human habitation or which contribute adversely to the physical or social environment of the locality involved; (4) the establishment of recreational or community facilities including public playgrounds; (5) the improvement of garbage and trash collection, street cleaning and other essential services necessary to the revitalization and maintenance of the area; (6) the rehabilitation of privately and publicly owned real property by the locality; and (7) the establishment and operation of locally controlled, nonprofit housing management corporations and municipal repair programs.
(c)Subject to such conditions as the Secretary may prescribe, real property held as part of a project assisted under this section may be made available to (1) a limited dividend corporation, nonprofit corporation, or association, cooperative or public body or agency, or other approved purchaser or lessee, or (2) a purchaser who would be eligible for a mortgage insured under section 1715l(d)(3) or (d)(4), section 1715l(h)(1), section 1715z(i) or (j)(1), or section 1715z–1 of this title, for purchase or lease at fair market value for use by such purchaser or lessee, as, or in the provision of, new or rehabilitated housing for occupancy by families or individuals of low or moderate income.
(d)Grants under this section shall be in amounts which do not exceed 90 per centum of the net project cost as determined by the Secretary. There are authorized to be appropriated for demonstration grants under this section not to exceed $20,000,000 for the fiscal year ending June 30, 1971. Any amounts appropriated shall remain available until expended and any amount authorized but not appropriated may be appropriated for any succeeding fiscal year commencing prior to July 1, 1972. Not more than one-third of the aggregate amount of grants made in any fiscal year under this section shall be made with respect to projects undertaken by one locality.
(e)The provisions of section 1456, 1465, and 1466 11 See References in Text note below. of title 42, and section 1452b 1 of title 42, may apply to projects assisted under this Act as if such projects were being carried out in urban renewal areas as part of urban renewal projects within the meaning of section 1460 1 of title 42.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 1456, 1460, and 1466 of title 42, referred to in subsec. (e), were omitted from the Code pursuant to section 5316 of Title 42, The Public Health and Welfare, which terminated authority to make grants or loans under those sections after Jan. 1, 1975. Section 1465 of title 42, referred to in subsec. (e), was repealed by Pub. L. 91–646, title II, § 220(a)(5), Jan. 2, 1971, 84 Stat. 1903. See section 4601 et seq. of Title 42. Section 1452b of title 42, referred to in subsec. (e), was repealed by Pub. L. 101–625, title II, § 289(b)(1), Nov. 28, 1990, 104 Stat. 4128. Codification Section was enacted as part of the Housing and Urban Development Act of 1970, and not as part of the National Housing Act which comprises this chapter.

Amendments

1986—Subsec. (f). Pub. L. 99–386 struck out subsec. (f) which related to annual reports to Congress by Secretary with respect to status of demonstration projects.

Reference

Citations & Metadata

Citation

12 U.S.C. § 1701z–4

Title 12 — Banks and Banking

Last Updated

Apr 6, 2026

Release point: 119-73