PRIA, Government Policy, Made Personal

Summary

A homeownership program must let eligible families buy ownership interests or shares in at least one-half of the units in a public housing project. The program must set sale prices and costs so a buying family does not have to pay more than 30 percent of its adjusted monthly income. The program must also have a plan for picking eligible families, helping people who move with relocation payments, keeping homes affordable, giving ongoing training and counseling to buyers and owners, and replacing units when needed. Projects with more than one building usually must be converted or fixed up as a whole, unless the Secretary approves doing part of it. Applications must describe how rehabilitation and purchases will be financed. Property given to buyers generally may not be used as loan collateral unless the Secretary finds four conditions are met: it will not threaten long-term availability for low-income families, it will not create undue federal or agency risk, the debt can be paid from project income (including operating help), and the money will be used only for required housing standards or approved capital improvements. Lenders must give owners or agencies a reasonable chance to fix a default before foreclosing. Units must be safe before transfer and must meet the Secretary’s minimum housing standards within 2 years. No tenant living in a unit when an implementation grant is approved may be evicted because of the program. If a tenant does not or cannot buy, they may stay at rents consistent with public housing limits while operating assistance continues, and if they move during that time the agency must, as funds allow, offer another public housing unit or Section 8 help and provide relocation assistance. Tenants in projects transferred under the program keep all public housing tenant rights.

Title 42, §1437aaa–3

The Public Health and Welfare, Source: USLM XML via OLRC

(a)A homeownership program under this subchapter shall provide for acquisition by eligible families of ownership interests in, or shares representing, at least one-half of the units in a public housing project under any arrangement determined by the Secretary to be appropriate, such as cooperative ownership (including limited equity cooperative ownership) and fee simple ownership (including condominium ownership), for occupancy by the eligible families.

(b)A homeownership program under this subchapter shall provide for the establishment of sales prices (including principal, insurance, taxes, and interest and closing costs) for initial acquisition of the property from the public housing agency if the applicant is not a public housing agency, and for sales to eligible families, such that an eligible family shall not be required to expend more than 30 percent of the adjusted income of the family per month to complete a sale under the homeownership program.

(c)A homeownership program under this subchapter shall provide, and include a plan, for—

(1)identifying and selecting eligible families to participate in the homeownership program;

(2)providing relocation assistance to families who elect to move;

(3)ensuring continued affordability by tenants, homebuyers, and homeowners in the project;

(4)providing ongoing training and counseling for homebuyers and homeowners; and

(5)replacing units in eligible projects covered by a homeownership program.

(d)Acquisition or rehabilitation of public housing projects under a homeownership program under this subchapter may not consist of acquisition or rehabilitation of less than the whole public housing project in a project consisting of more than 1 building. The provisions of this subsection may be waived upon a finding by the Secretary that the sale of less than all the buildings in a project is feasible and will not result in a hardship to any tenants of the project who are not included in the homeownership program.

(e)(1)The application shall identify and describe the proposed financing for (A) any rehabilitation, and (B) acquisition (i) of the project, where applicable, by an entity other than the public housing agency for transfer to eligible families, and (ii) by eligible families of ownership interests in, or shares representing, units in the project. Financing may include use of the implementation grant, sale for cash, or other sources of financing (subject to applicable requirements), including conventional mortgage loans and mortgage loans insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.].

(2)Property transferred under this subchapter shall not be pledged as collateral for debt or otherwise encumbered except when the Secretary determines that—

(A)such encumbrance will not threaten the long-term availability of the property for occupancy by low-income families;

(B)neither the Federal Government nor the public housing agency will be exposed to undue risks related to action that may have to be taken pursuant to paragraph (3);

(C)any debt obligation can be serviced from project income, including operating assistance; and

(D)the proceeds of such encumbrance will be used only to meet housing standards in accordance with subsection (f) or to make such additional capital improvements as the Secretary determines to be consistent with the purposes of this subchapter.

(3)Any lender that provides financing in connection with a homeownership program under this subchapter shall give the public housing agency, resident management corporation, individual owner, 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.

(f)The application shall include a plan ensuring that the unit—

(1)will 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

(2)will, not later than 2 years after the transfer to an eligible family, meet minimum housing standards established by the Secretary for the purposes of this subchapter.

(g)

(h)(1)No tenant residing in a dwelling unit in a public housing project on the date the Secretary approves an application for an implementation grant may be evicted by reason of a homeownership program approved under this subchapter.

(2)If the tenant decides not to purchase a unit, or is not qualified to do so, the recipient shall, during the term of any operating assistance under the implementation grant, permit each otherwise qualified tenant to continue to reside in the project at rents that do not exceed levels consistent with section 1437a(a) of this title or, if an otherwise qualified tenant chooses to move (at any time during the term of such operating assistance contract), the public housing agency shall, to the extent approved in appropriations Acts, offer such tenant (A) a unit in another public housing project, or (B) section 8 [42 U.S.C. 1437f] assistance for use in other housing.

(3)The recipient shall also inform each such tenant that if the tenant chooses to move, the recipient will pay relocation assistance in accordance with the approved homeownership program.

(4)Tenants renting a unit in a project transferred under this subchapter shall have all rights provided to tenants of public housing under this chapter.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The National Housing Act, referred to in subsec. (e)(1), is act June 27, 1934, ch. 847, 48 Stat. 1246. Title II of the Act is classified principally to subchapter II (§ 1707 et seq.) of chapter 13 of Title 12, Banks and Banking. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables. This subchapter, referred to in subsec. (e)(3), 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.

Amendments

1998—Subsec. (g). Pub. L. 105–276 struck out subsec. (g) which prohibited transfer of projects without plan for replacement housing. See 1995 Amendment note below. 1995—Subsec. (g). Pub. L. 104–19 struck out subsec. (g) which prohibited transfer of projects without plan for replacement housing. 1992—Subsec. (d). Pub. L. 102–550 struck out “(not including scattered site single family housing of a public housing agency)” after “housing project”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1998 AmendmentAmendment by section 531(b)(1) of Pub. L. 105–276 effective with respect to any plan for the demolition, disposition, or conversion to homeownership of public housing that is approved by Secretary after Sept. 30, 1995, see section 531(b)(2) of Pub. L. 105–276, set out as a note below.

Effective Date

of 1995 AmendmentAmendment by Pub. L. 104–19 effective for applications for demolition, disposition, or conversion to homeownership of public housing approved by the Secretary, and other consolidation and relocation activities of public housing agencies undertaken on, before, or after Sept. 30, 1995, and on or before Sept. 30, 1998, see section 1002(d) of Pub. L. 104–19, as amended, set out as a note under section 1437c of this title. Homeownership Replacement Plan Pub. L. 105–276, title V, § 531(b), Oct. 21, 1998, 112 Stat. 2573, provided that: “(1) In general.—Notwithstanding subsections (b) and (c) of section 1002 of the Emergency Supplemental Appropriations for Additional Disaster Assistance, for Anti-terrorism Initiatives, for Assistance in the Recovery from the Tragedy that Occurred At Oklahoma City, and Rescissions Act, 1995 [amending this section and enacting provision set out as a note under section 1437c of this title] (Public Law 104–19; 109 Stat. 236), subsection (g) of section 304 of the United States Housing Act of 1937 (42 U.S.C. 1437aaa–3(g)) is repealed. “(2)

Effective Date

.—The amendment made by paragraph (1) shall be effective with respect to any plan for the demolition, disposition, or conversion to homeownership of public housing that is approved by the Secretary after September 30, 1995.”

§1437aaa–3 Homeownership Program Requirements

Summary

Title 42, §1437aaa–3

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Citations & Metadata