RURAL HOUSING GUARANTEED LOAN DEMONSTRATION.

SEC. 304. RURAL HOUSING GUARANTEED LOAN DEMONSTRATION. (a) Establishment of Demonstration.— The Secretary of Agriculture (referred to in this section as the “Secretary”) shall carry out a rural housing guaranteed loan demonstration program under which the Secretary shall, to the extent of amounts provided in appropriation Acts, provide guaranteed loans in accordance with section 502, section 517(d), and the last sentence of section 521(a)(1)(A), of the Housing Act of 1949. (b) Amount Available for Demonstration.— (1) There shall be available for guaranteed loans under this section for any fiscal year in each State an amount equal to whichever of the following is lower: (A) 10 percent of the total loan authority allocated under section 502 of the Housing Act of 1949 to the State for the fiscal year. (B) The average, during the preceding 3 fiscal years, of the funds allocated to the State under section 502 of the Housing Act of 1949 that have not been utilized. (2) Any amount made available under this subsection that is not used before the last 60 days of a fiscal year shall become available for assistance for low income families or persons under section 502 of the Housing Act of 1949. (c) Eligibility for Loans.— Loans guaranteed pursuant to this section shall be made only to borrowers with moderate incomes that do not exceed the median income of the area, as determined by the Secretary, with adjustments for smaller and larger families. (d) Reports to Congress.— The Secretary shall submit to the Congress— 101 STAT. 1895 (1) as soon as practicable after September 30, 1989, an interim report setting forth the findings and recommendations of the Secretary as a result of the demonstration; and (2) as soon as practicable after September 30, 1991, a final report setting forth the findings and recommendations of the Secretary as a result of the demonstration. (e) Termination.— The Secretary may not provide any guaranteed loan under this section after September 30, 1991, except pursuant to a commitment entered into on or before such date.