HOUSING FOR THE ELDERLY AND HANDICAPPED.

SEC. 161. HOUSING FOR THE ELDERLY AND HANDICAPPED. (a) Borrowing Authority.— The first sentence of section 202(a)(4)(B)(i) of the Housing Act of 1959 is amended— (1) by striking “and” the first place it appears; and (2) by inserting after “1984,” the following: “and to such sums as may approved in appropriation Acts for fiscal years 1988 and 1989,” (b) Loan Authority.— Section 202(a)(4)(C) of the Housing Act of 1959 is amended by adding at the end the following new sentence: “For fiscal years 1988 and 1989, not more than $621,701,000 and $630,000,000, respectively, may be approved in appropriation Acts for such loans.”. (c) Interest Rate on Loans.— (1) Calculation of rate.— Section 202(a)(3) of the Housing Act of 1959 is amended— (A) by inserting “(A)” after the paragraph designation; (B) by striking all that follows “Secretary” the second place it appears through “loan is made” and inserting the following: “taking into consideration the average yield, during the 3-month period immediately preceding the fiscal year in which the loan is made, on the most recently issued 30-year marketable obligations of the United States”; and (C) by adding at the end the following new subparagraph: “(B) At the option of the borrower, a loan under this section may be made and may be processed for a conditional or firm commitment either (i) at an interest rate not to exceed a rate and allowance determined by the Secretary in accordance with subparagraph (A) using the 1-month period immediately prior to the month in which the request for a commitment is submitted; or (ii) at an interest rate not to exceed a rate and allowance determined by the Secretary in 101 STAT. 1856accordance with subparagraph (A) using the 3-month period immediately preceding the fiscal year in which the request for a commitment is submitted.”. (2) Maximum rate.— Section 223(a) of the Housing and Urban-Rural Recovery Act of 1983 is amended by striking paragraph (2). (d) Interest Rate on Notes.— The second sentence of section 202(a)(4)(B)(i) of the Housing Act of 1959 is amended to read as follows: “Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury taking into consideration the average yield, during the 3-month period immediately preceding the fiscal year in which the loan is made, on the most recently issued 30-year marketable obligations of the United States.”. (e) Appeal of Cancellation of Loan Authority.— Section 202 of the Housing Act of 1959 is amended by adding at the end the following new subsection: “(n) The Secretary shall notify the project sponsor not less than 30 days prior to canceling any loan authority provided under this section. During the 30-day period following the receipt of a notice under paragraph (1), a sponsor may appeal the proposed cancellation of loan authority. Such appeal, including review by the Secretary, shall be completed not later than 45 days after the appeal is filed.”. (f) Priority.— Section 202(a) of the Housing Act of 1959 is amended by adding at the end the following new paragraph: “(8) In reviewing applications for loans under this section, the Secretary shall give a priority to any project that will provide housing designed to replace a structure that is owned by a public housing agency, contains not less than 100 dwelling units, is used for housing only elderly families, and is to be demolished. The requirements of this paragraph shall not apply after September 30, 1988.”.