ASSISTANCE UNDER SECTION 8 FOR HOMEOWNERSHIP.

SEC. 185. ASSISTANCE UNDER SECTION 8 FOR HOMEOWNERSHIP. (a) Authority.—Section 8 of the United States Housing Act of 1937 (42 U.S.C. 14370, is amended by adding at the end the following new subsection: “(y) Homeownership Option.— “(1) Use of assistance for homeownership.— A family receiving tenant-based assistance under this section may receive assistance for occupancy of a dwelling owned by one or more members of the family if the family— “(A) is a first-time homeowner; “(B) (i) participates in the family self-sufficiency pro-gram under section 23 of the public housing agency providing the assistance; or “(ii) demonstrates that the family has income from employment or other sources (other than public assistance), as determined in accordance with requirements of the Secretary, that is not less than twice the payment standard established by the public housing agency (or such other amount as may be established by the Secretary); “(C) except as provided by the Secretary, demonstrates at the time the family initially receives tenant-based assistance under this subsection that one or more adult members of the family have achieved employment for the period as the Secretary shall require; “(D) participates in a homeownership and housing counseling program provided by the agency; and 106 STAT. 3746 “(E) meets any other initial or continuing requirements established by the public housing agency in accordance with requirements established by the Secretary. “(2) Monthly assistance payment.— “(A) In general.—Notwithstanding any other provisions of this section governing determination of the amount of assistance payments under this section on behalf of a family, the monthly assistance payment for any family assisted under this subsection shall be the amount by which the fair market rental for the area established under subsection (c)(1) exceeds 30 percent of the family’s monthly adjusted income; except that the monthly assistance payment shall not exceed the amount by which the monthly homeownership expenses, as determined in accordance with requirements established by the Secretary, exceeds 10 per-cent of the family’s monthly income. “(B) Exclusion of equity from income.—For purposes of determining the monthly assistance payment for a family, the Secretary shall not include in family income an amount imputed from the equity of the family in a dwelling occupied by the family with assistance under this subsection. “(3) Recapture of certain amounts.—Upon sale of the dwelling by the family, the Secretary shall recapture from any net proceeds the amount of additional assistance (as deter-mined in accordance with requirements established by the Secretary) paid to or on behalf of the eligible family as a result of paragraph (2)(B). “(4) Downpayment requirement.—Each public housing agency providing assistance under this subsection shall ensure that each family assisted shall provide from its own resources not less than 80 percent of any downpayment in connection with a loan made for the purchase of a dwelling. Such resources may include amounts from any escrow account for the family established under section 23(d). Not more than 20 percent of the downpayment may be provided from other sources, such as from nonprofit entities and programs of States and units of general local government. “(5) Ineligibility under other programs.—A family may not receive assistance under this subsection during any period when assistance is being provided for the family under other Federal homeownership assistance programs, as determined by the Secretary, including assistance under the HOME Investment Partnerships Act, the Homeownership and Opportunity Through HOPE Act, title II of the Housing and Community Development Act of 1987, and section 502 of the Housing Act of 1949. “(6) Inapplicability of certain provisions.— Assistance under this subsection shall not be subject to the requirements of the following provisions: “(A) Subsection (c)(3)(B) of this section. “(B) Subsection (d)(I))(B)(i) of this section. “(C) Any other provisions of this section governing maximum amounts payable to owners and amounts payable by assisted families. “(D) Any other provisions of this section concerning contracts between public housing agencies and owners. 106 STAT. 3747 “(E) Any other provisions of this Act that are inconsistent with the provisions of this subsection. “(7) Reversion to rental status.— “(A) FHA-insured mortgages.—If a family receiving assistance under this subsection for occupancy of a dwelling defaults under a mortgage for the dwelling insured by the Secretary under the National Housing Act, the family may not continue to receive rental assistance under this section unless the family (i) transfers to the Secretary marketable title to the dwelling, (ii) moves from the dwelling within the period established or approved by the Secretary, and (iii) agrees that any amounts the family is required to pay to reimburse the escrow account under section 23(d)(3) may be deducted by the public housing agency from the assistance payment otherwise payable on behalf of the family. “(B) Other mortgages.—If a family receiving assistance under this subsection defaults under a mortgage not insured under the National Housing Act, the family may not continue to receive rental assistance under this section unless it complies with requirements established by the Secretary. “(C) All mortgages.—A family receiving assistance under this subsection that defaults under a mortgage may not receive assistance under this subsection for occupancy of another dwelling owned by one or more members of the family. “(8) Definition of first-time homeowner.— For purposes of this subsection, the term ‘first-time homeowner* means— “(A) a family, no member of which has had a present ownership interest in a principal residence during the 3 years preceding the date on which the family initially receives assistance for homeownership under this sub-section; and “(B) any other family, as the Secretary may prescribe.”. (b) Family Self-Sufficiency Program.—Section 23(d) of the United States Housing Act of 1937 (42 U.S.C. 1437u) is amended by adding at the end the following new paragraph: “(3) Use of escrow savings accounts for section b homeownership.—Notwithstanding paragraph (3), a family that uses assistance under section 8(y) to purchase a dwelling may use up to SO percent of the amount in its escrow account established under paragraph (3) for a downpayment on the dwelling. In addition, after the family purchases the dwelling, the family may use any amounts remaining in the escrow account to cover the costs of major repair and replacement needs of the dwelling. If a family defaults in connection with the loan to purchase a dwelling and the mortgage is foreclosed, the remaining amounts in the escrow account shall be recaptured by the Secretary”. (c) Use of FHA Insurance With Section 8 Homeowner-ship.— (1) In general.— Section 203 of the National Housing Act (12 U.S.C. 1709) is amended— (A) in the matter preceding subparagraph (A) in sub-section (c)(2), by inserting “or of the General Insurance Fund pursuant to subsection (v)” after “Fund”; and 106 STAT. 3748 (B) by adding at the end the following new subsection: “(v) Notwithstanding section 202 of this title, the insurance of a mortgage under this section in connection with the assistance provided under section 8(y) of the United States Housing Act of 1937 shall be the obligation of the General Insurance Fund created pursuant to section 519 of this title. The provisions of subsections (a) through (h), (j), and (k) of section 204 shall apply to such mortgages, except that (1) all references in section 204 to the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the General Insurance Fund, and (2) any excess amounts described in section 204(f)(1) shall be retained by the Secretary and credited to the General Insurance Fund.”. (2) General insurance fund.—Section 519(e) of the National Housing Act (12 U.S.C. 1735c(e)) is amended by inserting after “203(b)” the following: “(except as provided in section 203(v))”. (3) Mortgage insurance transition premiums.—The matter preceding paragraph (1) in section 2103(b) of the Omni-bus Budget Reconciliation Act of 1990 (12 U.S.C. 1709 note) is amended by inserting “or of the General Insurance Fund pursuant to section 203(v) of the National Housing Act” after “Fund”. (4) Conforming amendment.—The third sentence of section 3(a)(1) of the United States Housing Act of 1937 (42 U.S.C. 1437a(a)(D) is amended by inserting “or (y) or paying rent under section 8(c)(3)(B)” after “section 8fo)”.