URBAN HOMESTEADING.

SEC. 517. URBAN HOMESTEADING. (a) Extensions.— (1) Section 810(h)(1) of the Housing and Community Development Act of 1974 is amended by striking out “1984 and 1985” and inserting in lieu thereof “1988 and 1989”. (2) Section 810(i)(1) of such Act is amended by striking out “1984 and 1985” and inserting in lieu thereof “1988 and 1989”. (3) Section 810(j) of such Act is amended by striking out “December 31, 1985” and inserting in lieu thereof “December 1, 1987”. (b) State Administrative Expenses.— (1) The second sentence of section 106(d)(3)(A) of the Housing and Community Development Act of 1974 is amended— (A) by inserting immediately after “such expenses” the first time it appears the following: “and its administrative expenses under section 810 of this Act”; and (B) by inserting immediately after “such expenses” the second time it appears the following: “under this title”. (2) Section 107(b)(4) of such Act is amended by inserting before the first semicolon the following: “and section 810 of this Act”. (c) Selection Procedure.— (1) Section 810(b)(2) of the Housing and Community Development Act of 1974 is amended to read as follows: “(2) an equitable procedure for selecting recipients of homestead properties who have the capacity to make or cause to be made the repairs and improvements required under paragraph (3) of this subsection, which procedure shall— “(A) give special priority to applicants who are ‘lower income families’ as defined in section 3(b)(2) of the United States Housing Act of 1937; “(B) exclude applicants who are currently homeowners; “(C) take into account the applicant’s capacity to contribute a substantial amount of labor to the rehabilitation process, or to obtain assistance from private sources, community organizations, or other sources; and “(D) include other reasonable selection criteria.”. (2) Section 810(b)(5) of such Act is amended by adding “and” after the semicolon. (3) Section 810(b)(6) of such Act is amended by striking out and” and inserting in lieu thereof a period. (4) Section 810(b)(7) of such Act is repealed. (d) Transfer of Property to Qualified Community Organizations.— Section 810 of the Housing and Community Development Act of 1974 is amended— 101 STAT. 1937 (1) in subsection (a), by inserting “qualified community organization or” before “public agency designated”; (2) in subsection (b), by inserting “qualified community organization or” before “public agency designated”; (3) in subsection (b)(1), by inserting before the semicolon the following: “or in accordance with subsection (1) to qualified community organizations”; (4) in subsection (b)(3)(D), by inserting “qualified community organization or” before “public agency designated”; (5) in subsection (b)(5), by inserting “qualified community organization or” before “public agency designated”; (6) by redesignating subsection (k) as subsection (1); and (7) by inserting after subsection (j) the following new subsection: “(k) A unit of general local government or a State, or a public agency designated by a unit of general local government or a State, may transfer any real property that it receives under subsection (a) or purchases under subsection (i) to a qualified community organization. Qualified community organizations shall be limited to organizations that— “(1) are incorporated and controlled by a board of directors whose members receive no compensation of any kind for the performance of their duties; “(2) are organized exclusively for charitable, educational, scientific purposes, or the promotion of social welfare, and qualify as exempt organizations under paragraph (3) or (4) of section 501(c) of the Internal Revenue Code of 1986; and “(3) agree to assist the applicable State or unit of general local government with the selection of homesteaders, the selection, inspection, and rehabilitation of the properties, and to perform such other functions as may be agreed between the State or unit of general local government and the qualified nonprofit organization, including the acceptance of title to property from the relevant Federal agency and the direct conveyance of the property to the homesteaders subject to the terms and conditions specified in this section.”. (e) Authorization of Appropriations.— The first sentence of section 810(1) of the Housing and Community Development Act of 1974 (as so redesignated by subsection (d) of this section) is amended to read as follows: “To reimburse the housing loan funds for properties transferred pursuant to this section, and to carry out subsections (c), (g), (h), and (i), there are authorized to be appropriated $12,000,000 for fiscal year 1988, and $13,000,000 for fiscal year 1989.”.