42 U.S.C. § 1437aaa–2: Implementation grants

Summary

The Secretary can give grants to help run HUD-approved homeownership programs, including co-ops. Grants may pay for things like design and engineering, buying a public housing project to transfer to eligible families, rehab work and temporary moves during rehab, removal of lead-paint hazards, counseling and training for buyers, legal fees, setting up resident management, funding project operating costs and replacement reserves (with limits), developing replacement housing, and other steps needed to carry out the program. Administrative costs charged to the grant cannot be more than 15 percent of the grant. Recipients must provide at least 25 percent of the grant amount from non-Federal sources to help run the program, not counting post-sale operating costs and replacement housing. That match can be cash, non-Federal administrative payments, waived taxes or fees, land value, infrastructure, or other approved in-kind support. Only up to 7 percent of the grant total may be counted as matching administrative expenses. The Secretary may reduce the match using the formula in section 220(d) of the Cranston-Gonzalez Act. Applicants must apply in the form the Secretary requires and include the grant request, program plan, costs and schedules, tenant and project details, financing and sales terms, management plans, local housing strategy approval, and civil-rights certifications. The Secretary will pick winners based on ability to carry out the program, feasibility, tenant affordability, program quality, local needs, and geographic balance. Grants are for projects in participating jurisdictions or places with an approved housing plan. Applicants will be told yes or no within 6 months; related Section 8 help can be conditionally approved pending future funding.

Title 42, §1437aaa–2

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(a)Grants

The Secretary is authorized to make implementation grants to applicants for the purpose of carrying out homeownership programs approved under this subchapter.

(b)Eligible activities

Implementation grants may be used for activities to carry out homeownership programs (including programs for cooperative ownership) that meet the requirements under this subchapter, including the following activities:

(1)Architectural and engineering work.

(2)Implementation of the homeownership program, including acquisition of the public housing project from a public housing agency for the purpose of transferring ownership to eligible families in accordance with a homeownership program that meets the requirements under this subchapter.

(3)Rehabilitation of any public housing project covered by the homeownership program, in accordance with standards established by the Secretary.

(4)Abatement of lead-based paint hazards, as required by section 4822(a) of this title.

(5)Administrative costs of the applicant, which may not exceed 15 percent of the amount of assistance provided under this section.

(6)Development of resident management corporations and resident management councils, but only if the applicant has not received assistance under section 1437aaa–1 of this title for such activities.

(7)Counseling and training of homebuyers and homeowners under the homeownership program.

(8)Relocation of tenants who elect to move.

(9)Any necessary temporary relocation of tenants during rehabilitation.

(10)Funding of operating expenses and replacement reserves of the project covered by the homeownership program, except that the amount of assistance for operating expenses shall not exceed the amount the project would have received if it had continued to receive such assistance from the Operating Fund, with adjustments comparable to those that would have been made under section 1437g of this title, and except that implementation grants may not be used under this paragraph to fund operating expenses for scattered site public housing acquired under a homeownership program.

(11)Implementation of a replacement housing plan.

(12)Legal fees.

(13)Defraying costs for the ongoing training needs of the recipient that are related to developing and carrying out the homeownership program.

(14)Economic development activities that promote economic self-sufficiency of homebuyers, residents, and homeowners under the homeownership program.

(c)Matching funding

(1)In general

Each recipient shall assure that contributions equal to not less than 25 percent of the grant amount made available under this section, excluding any amounts provided for post-sale operating expenses and replacement housing, shall be provided from non-Federal sources to carry out the homeownership program.

(2)Form

Such contributions may be in the form of— (A)

(B)payment of administrative expenses, as defined by the Secretary, from non-Federal resources, including funds from a grant made under section 5306(b) of this title or section 5306(d) of this title;

(C)the value of taxes, fees, or other charges that are normally and customarily imposed but are waived, foregone, or deferred in a manner that facilitates the implementation of a homeownership program assisted under this subchapter;

(D)the value of land or other real property as appraised according to procedures acceptable to the Secretary;

(E)the value of investment in on-site and off-site infrastructure required for a homeownership program assisted under this subchapter; or

(F)such other in-kind contributions as the Secretary may approve.

Contributions for administrative expenses shall be recognized only up to an amount equal to 7 percent of the total amount of grants made available under this section.

(3)Reduction of requirement

The Secretary shall reduce the matching requirement for homeownership programs carried out under this section in accordance with the formula established under section 220(d) of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 12750(d)].

(d)Application

(1)Form and procedure

An application for an implementation grant shall be submitted by an applicant in such form and in accordance with such procedures as the Secretary shall establish.

(2)Minimum requirements

The Secretary shall require that an application contain at a minimum—

(A)a request for an implementation grant, specifying the amount of the grant requested and its proposed uses;

(B)if applicable, an application for assistance under section 1437f of this title, which shall specify the proposed uses of such assistance and the period during which the assistance will be needed;

(C)a description of the qualifications and experience of the applicant in providing housing for low-income families;

(D)a description of the proposed homeownership program, consistent with section 1437aaa–3 of this title and the other requirements of this subchapter, which shall specify the activities proposed to be carried out and their estimated costs, identifying reasonable schedules for carrying it out, and demonstrating that the program will comply with the affordability requirements under section 1437aaa–3(b) of this title;

(E)identification and description of the public housing project or projects involved, and a description of the composition of the tenants, including family size and income;

(F)a description of and commitment for the resources that are expected to be made available to provide the matching funding required under subsection (c) and of other resources that are expected to be made available in support of the homeownership program;

(G)identification and description of the financing proposed for any (i) rehabilitation and (ii) acquisition (I) of the property, where applicable, by a resident council or other entity for transfer to eligible families, and (II) by eligible families of ownership interests in, or shares representing, units in the project;

(H)if the applicant is not a public housing agency, the proposed sales price, if any, the basis for such price determination, and terms to the applicant;

(I)the estimated sales prices, if any, and terms to eligible families;

(J)any proposed restrictions on the resale of units under a homeownership program;

(K)identification and description of the entity that will operate and manage the property;

(L)a certification by the public official responsible for submitting the comprehensive housing affordability strategy under section 105 of the Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 12705] 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 (or, during the first 12 months after November 28, 1990, that the application is consistent with such other existing State or local housing plan or strategy that the Secretary shall determine to be appropriate); and

(M)a certification that the applicant will comply with the requirements of the Fair Housing Act [42 U.S.C. 3601 et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], section 794 of title 29, and the Age Discrimination Act of 1975 [42 U.S.C. 6101 et seq.], and will affirmatively further fair housing.

(e)Selection criteria

The Secretary shall establish selection criteria for a national competition for assistance under this section, which shall include—

(1)the ability of the applicant to develop and carry out the proposed homeownership program, taking into account the quality of any related ongoing program of the applicant, and the extent of tenant interest in the development of a homeownership program and community support;

(2)the feasibility of the homeownership program;

(3)the extent to which current tenants and other eligible families will be able to afford the purchase;

(4)the quality and viability of the proposed homeownership program, including the viability of the economic self-sufficiency plan;

(5)the extent to which funds for activities that do not qualify as eligible activities will be provided in support of the homeownership program;

(6)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 Cranston-Gonzalez National Affordable Housing Act [42 U.S.C. 12705(b)(7)];

(7)national geographic diversity among housing for which applicants are selected to receive assistance; and

(8)the extent to which a sufficient supply of affordable rental housing exists in the locality, so that the implementation of the homeownership program will not reduce the number of such rental units available to residents currently residing in such units or eligible for residency in such units.

(f)Location within participating jurisdictions

The Secretary may approve applications for grants under this subchapter only for public housing projects located within the boundaries of jurisdictions—

(1)which are participating jurisdictions under title III of the Cranston-Gonzalez National Affordable Housing Act; or

(2)on behalf of which the agency responsible for affordable housing has submitted a housing strategy or plan.

(g)Approval

The Secretary shall notify each applicant, not later than 6 months after the date of the submission of the application, whether the application is approved or not approved. The Secretary may approve the application for an implementation grant with a statement that the application for the section 8 [42 U.S.C. 1437f] assistance for replacement housing and for residents of the project not purchasing units is conditionally approved, subject to the availability of appropriations in subsequent fiscal years.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This subchapter, referred to in subsecs. (b) (introductory provisions) and (c)(2)(C), (E), was in the original “this subtitle”, and was translated as reading “this title”, meaning title III of act Sept. 1, 1937, ch. 896, as added by Pub. L. 101–625, to reflect the probable intent of Congress, because title III of act Sept. 1, 1937, does not contain subtitles. The Fair Housing Act, referred to in subsec. (d)(2)(M), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, which is classified principally to subchapter I of chapter 45 (§ 3601 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 3601 of this title and Tables. The Civil Rights Act of 1964, referred to in subsec. (d)(2)(M), 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 complete classification of this Act to the Code, see

Short Title

note set out under section 2000a of this title and Tables. The Age Discrimination Act of 1975, referred to in subsec. (d)(2)(M), is title III of Pub. L. 94–135, Nov. 28, 1975, 89 Stat. 728, which is classified generally to chapter 76 (§ 6101 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 6101 of this title and Tables. The Cranston-Gonzalez National Affordable Housing Act, referred to in subsec. (f)(1), is Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4079. Title III of the Act enacted subchapter III (§ 12851 et seq.) of chapter 130 of this title and section 1735f–17 and 1735f–18 of Title 12, Banks and Banking, amended section 1703, 1708, 1709, 1715d, 1715z–20, 1721, and 1735f–9 of Title 12, and enacted provisions set out as notes under section 1703, 1709, 1713, and 1735f–18 of Title 12. For complete classification of this Act to the Code, see

Short Title

note set out under section 12701 of this title and Tables.

Amendments

1998—Subsec. (b)(10). Pub. L. 105–276 substituted “such assistance from the Operating Fund” for “such assistance under section 1437g of this title”. 1992—Subsec. (b)(2). Pub. L. 102–550, § 181(g)(1)(A), struck out “(not including scattered site single family housing of a public housing agency)” after “public housing project”. Subsec. (b)(4) to (8). Pub. L. 102–550, § 1012(h)(2), added par. (4) and redesignated former pars. (4) to (7) as (5) to (8), respectively. Former par. (8) redesignated (9). Subsec. (b)(9). Pub. L. 102–550, § 1012(h)(2)(A), redesignated par. (8) as (9). Former par. (9) redesignated (10). Pub. L. 102–550, § 181(g)(1)(B), which directed insertion of “, and except that implementation grants may not be used under this paragraph to fund operating expenses for scattered site public housing acquired under a homeownership program” before period at end of section “303(b)(9) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 1437aaa–2(b)(9))”, was executed by making the insertion before period at end of subsec. (b)(9) of this section, which is section 303 of the United States Housing Act of 1937, to reflect the probable intent of Congress. Subsec. (b)(10) to (14). Pub. L. 102–550, § 1012(h)(2)(A), redesignated pars. (9) to (13) as (10) to (14), respectively. Subsec. (c)(1). Pub. L. 102–550, § 181(b)(1), inserted “and replacement housing” after “expenses”. Subsec. (c)(3). Pub. L. 102–550, § 181(b)(2), added par. (3). Subsec. (e)(8). Pub. L. 102–550, § 181(c), struck out “of the type assisted under this subchapter” after “rental housing” and “appreciably” before “reduce”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1998 AmendmentAmendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as otherwise provided, with provision that Secretary may implement amendment before such date, except to extent that such amendment provides otherwise, and with

Savings Provision

, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of this title.

§1437aaa–2 Implementation Grants

Summary

Title 42, §1437aaa–2

Notes & Related Subsidiaries

Editorial Notes

References in Text

Short Title

Short Title

Short Title

Short Title

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Savings Provision

Citations & Metadata