Title 42, The Public Health and WelfareRelease 119-110
§12898a Enterprise Zone Homeownership Opportunity Grants
Title 42 › CHAPTER 130 — NATIONAL AFFORDABLE HOUSING › SUBCHAPTER IV — HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY AND SINGLE FAMILY HOMES › Part B — HOPE for Homeownership of Single Family Homes › § 12898a
Summary
Lets nonprofits get grants to help families buy homes in federally approved or equivalent State-approved enterprise zones. The grants must be used to make interest-free loans up to $15,000. Each loan is a second mortgage held by the Secretary of Housing and Urban Development and must be paid back if the home is sold, leased, or otherwise transferred. Families must have income at or below the median for a four-person family in the local metro area (adjusted for family size), not have owned a home in the last 3 years, put down at least 5% of the sale price, and may not rent out the home. Nonprofits apply to the HUD Secretary in the form HUD requires. Key terms (one line each): Home — a 1- to 4-family dwelling, including small condos, townhouses, and manufactured homes; Metropolitan statistical area — the OMB-defined metro area; Nonprofit organization — a private nonprofit approved by HUD for financial responsibility; Secretary — the HUD Secretary; State — each State and listed U.S. territories; Unit of general local government — cities, counties, towns, etc. Programs must involve neighborhood residents and local governments, place homes only in approved enterprise zones, and follow a schedule agreed with local governments. HUD must issue final rules within 180 days after October 28, 1992. Congress authorized $30,000,000 for each of fiscal years 1993 and 1994.
Full Legal Text
Title 42, §12898a
The Public Health and Welfare, Source: USLM XML via OLRC
(a)Statement of purpose
It is the purpose of this section— (1)
(2)to encourage the redevelopment of economically depressed areas; and
(3)to provide better housing opportunities in federally approved and equivalent State-approved enterprise zones.
(b)Definitions
For purposes of this section the following definitions shall apply:
(1)Home
The term “home” means any 1- to 4-family dwelling. Such term includes any dwelling unit in a condominium project or cooperative project consisting of not more than 4 dwelling units, any town house, and any manufactured home.
(2)Metropolitan statistical area
The term “metropolitan statistical area” means a metropolitan statistical area as established by the Office of Management and Budget.
(3)Nonprofit organization
The term “nonprofit organization” means a private nonprofit corporation, or other private nonprofit legal entity, that is approved by the Secretary as to financial responsibility.
(4)Secretary
The term “Secretary” means the Secretary of Housing and Urban Development.
(5)State
The term “State” means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States.
(6)Unit of general local government
The term “unit of general local government” means any borough, city, county, parish, town, township, village, or other general purpose political subdivision of a State.
(c)Assistance to nonprofit organizations
(1)In general
The Secretary may provide assistance to nonprofit organizations to carry out enterprise zone homeownership opportunity programs to promote homeownership in federally approved and equivalent State-approved enterprise zones in accordance with the provisions of this section. Such assistance shall be made in the form of grants.
(2)Applications
Applications for assistance under this section shall be made in such form, and in accordance with such procedures, as the Secretary may prescribe.
(d)Eligible uses of assistance
(1)In general
Any nonprofit organization receiving assistance under this section shall use such assistance to provide loans to families purchasing homes constructed or rehabilitated in accordance with an enterprise zone homeownership opportunity program approved under this section.
(2)Specific requirements
Each loan made to a family under this subsection shall—
(A)be secured by a second mortgage held by the Secretary on the property involved;
(B)be in an amount not exceeding $15,000;
(C)bear no interest; and
(D)be repayable to the Secretary upon the sales, lease, or other transfer of such property.
(e)Program requirements
(1)In general
Assistance provided under this section may be used only in connection with an enterprise zone homeownership opportunity program of construction or rehabilitation of homes.
(2)Family need
Each family purchasing a home under this section shall—
(A)have a family income on the date of such purchase that is not more than the median income for a family of 4 persons (adjusted for family size) in the metropolitan statistical area in which a federally approved or equivalent State-approved enterprise zone is located; and
(B)not have owned a home during the 3-year period preceding such purchase.
(3)Downpayment
Each family purchasing a home under this section shall make a downpayment of not less than 5 percent of the sale price of such home.
(4)Leasing prohibition
No family purchasing a home under this section may lease such home.
(f)Terms and conditions of assistance
(1)Local consultation
No proposed enterprise zone homeownership opportunity program may be approved by the Secretary under this section unless the applicant involved demonstrates to the satisfaction of the Secretary that—
(A)it has consulted with and received the support of residents of the neighborhood in which such program is to be located; and
(B)it has the approval of each unit of general local government in which such program is to be located.
(2)Program schedule
Each applicant for assistance under this section shall submit to the Secretary an estimated schedule for completion of its proposed enterprise zone homeownership opportunity program, which schedule shall have been agreed to by each unit of general local government in which such program is to be located.
(3)Location
All homes constructed or rehabilitated under such program will be located in federally approved or equivalent State-approved enterprise zones.
(4)Sales contracts
Sales contracts entered into under such program will contain provisions requiring repayment of any loan made under this section upon the sale or other transfer of the home involved, unless the Secretary approves a transfer of such home without repayment (in which case the second mortgage held by the Secretary on such home shall remain in force until such loan is fully repaid).
(g)Program selection criteria
(1)In general
In selecting enterprise zone homeownership opportunity programs for assistance under this section from among eligible programs, the Secretary shall make such selection on the basis of the extent to which—
(A)non-Federal public or private entities will contribute land necessary to make each program feasible;
(B)non-Federal public and private financial or other contributions (including tax abatements, waivers of fees related to development, waivers of construction, development, or zoning requirements, and direct financial contributions) will reduce the cost of home constructed or rehabilitated under each program;
(C)each program will produce the greatest number of units for the least amount of assistance provided under this section, taking into consideration the cost differences among different market areas; and
(D)each program provides for the involvement of local residents in the planning, and construction or rehabilitation, of homes.
(2)Exception
To the extent that non-Federal public entities are prohibited by the law of any State from making any form of contribution described in subparagraph (A) or (B) of paragraph (1), the Secretary shall not consider such form of contribution in evaluating such program.
(h)Regulations
Not later than 180 days after October 28, 1992, the Secretary shall issue final regulations to carry out the provisions of this title. Any such regulations shall be issued in accordance with section 553 of title 5, notwithstanding the provisions of subsection (a)(2) of such section.
(i)Funding
There are authorized to be appropriated to carry out this section $30,000,000 in each of fiscal years 1993 and 1994.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification Section was enacted as part of the Housing and Community Development Act of 1992, and not as part of subtitle C (§§ 441–448) of title IV of Pub. L. 101–625 which comprises this part.
Executive Documents
Termination of Trust Territory of the Pacific Islands For termination of Trust Territory of the Pacific Islands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions.
Reference
Citations & Metadata
Citation
42 U.S.C. § 12898a
Title 42, The Public Health and Welfare
Last Updated
Sep 23, 2026
Release point: 119-110