Pub. L. 104-180, tit. VII, sec. 734

Sec. 734. Rural Housing Program Extensions.— (a) Extension of Multifamily Rural Housing Loan Program.— 110 STAT. 1602 (1) Authority to make loans.— Section 515(b)(4) of the Housing Act of 1949 (42 U.S.C. 1485(b)(4)) is amended by striking “September 30, 1996” and inserting “September 30, 1997”. (2) Set-aside for nonprofit entities.— The first sentence of section 515(w)(1) of the Housing Act of 1949 (42 U.S.C. 1485(w)(1)) is amended by striking “fiscal year 1996” and inserting “fiscal year 1997”. (b) Extension of Housing in Underserved Areas Program.— The first sentence of section 509(f)(4)(A) of the Housing Act of 1949 (42 U.S.C. 1479(f)(4)(A)) is amended by striking “fiscal year 1996” and inserting “fiscal year 1997”. (c) Reforms for Multifamily Rural Housing Loan Program.— (1) Limitation on project transfers.— Section 515 of the Housing Act of 1949 (42 U.S.C. 1485) is amended by inserting after subsection (g) the following new subsection: “(h) Project Transfers.— After the date of the enactment of the Act entitled ‘An Act making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year ending September 30, 1997, and for other purposes’, the ownership or control of a project for which a loan is made or insured under this section may be transferred only if the Secretary determines that such transfer would further the provision of housing and related facilities for low-income families or persons and would be in the best interests of residents and the Federal Government.”. (2) Equity Loans.— Section 515(t) of the Housing Act of 1949 (42 U.S.C. 1485(t)) is amended— (A) by striking paragraphs (4) and (5); and (B) by redesignating paragraphs (6) through (8) as paragraphs (4) through (6), respectively. (3) Equity takeout loans to extend low-income use.— (A) Authority and limitation.— Section 502(c)(4)(B)(iv) of the Housing Act of 1949 (42 U.S.C. 1472(c)(4)(B)(iv)) is amended by inserting before the period at the end the following: “or under paragraphs (1) and (2) of section 514(j), except that an equity loan referred to in this clause may not be made available after the date of the enactment of the Act entitled ‘An Act making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year ending September 30, 1997, and for other purposes’, unless the Secretary determines that the other incentives available under this subparagraph are not adequate to provide a fair return on the investment of the borrower, to prevent prepayment of the loan insured under section 514 or 515, or to prevent the displacement of tenants of the housing for which the loan was made”. (B) Approval of assistance.— Section 502(c)(4)(C) of the Housing Act of 1949 (42 U.S.C. 1472(c)(4)(C)) is amended b7, striking “(C)” and all that follows through “provided—” and inserting the following: “(C) Approval of assistance.— The Secretary may approve assistance under subparagraph (B) for assisted housing only if the restrictive period has expired for any loan for the housing made or insured under section 514 or 515 pursuant to a contract 110 STAT. 1603entered into after December 21, 1979, but before the date of the enactment of the Department of Housing and Urban Development Reform Act of 1989, and the Secretary determines that the combination of assistance provided—”. (C) Technical correction.— Section 515(c)(1) of the Housing Act of 1949 (42 U.S.C. 1485(c)(1)) is amended by striking “December 21, 1979” and inserting “December 15, 1989”. (d) Reform of section 515.— Section 515 of the Housing Act of 1949 (42 U.S.C. 1485) is amended— (1) by striking subsection (r) and inserting the following: “(r) (1) the Secretary— “(A) may require that the initial operating reserve under this section may be in the form of an irrevocable letter of credit; and “(B) except as provided in paragraph (2), may require not more than a 3 percent contribution to equity, except that the Secretary shall require a 5 percent contribution in the case of a project that is allocated a low-income housing tax credit pursuant to section 42 of the Internal Revenue Code of 1986. “(2) The Secretary may adjust the amount of equity contribution to ensure that assistance provided is not more than is necessary to provide affordable housing after taking account of assistance from all Federal, State, and local sources. “(3) Not later than 60 days after the date of enactment of the Act entitled ‘An Act making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year ending September 30, 1997, and for other purposes’, the Secretary shall issue regulations to implement subsection (r)(2) in accordance with the negotiated rulemaking procedures set forth in subchapter III of chapter 5 of title 5, United States Code: Provided, That if the negotiated rulemaking is not completed within the designated time, the Secretary shall proceed to promulgate regulations under the rulemaking authority contained in 5 U.S.C. 567.”; and (2) by striking subsection (z). (e) Equity Skimming Penalties.— (1) Insurance of loans for the provision of housing and related facilities for domestic farm labor.— Section 514 of the Housing Act of 1949 (42 U.S.C. 1484) is amended by adding at the end the following new subsection: “(j) Equity Skimming Penalty.— Whoever, as an owner, agent, or manger, or who is otherwise in custody, control, or possession of property that is security for a loan made or insured under this section willfully uses, or authorizes the use, of any part of the rents, assets, proceeds, income, or other funds derived from such property, for any purpose other than to meet actual or necessary expenses of the property, or for any other purpose not authorized by this title or the regulations adopted pursuant to this title, shall be fined not more than $250,000 or imprisoned not more than 5 years, or both.”. (2) Direct and insured loans to provide housing and related facilities for elderly persons and families in rural areas.— Section 515 of the Housing Act of 1949 (42 U.S.C. 1485), as amended by subsection (d)(2) of this section, is amended by adding at the end the following new subsection: 110 STAT. 1604 “(z) Equity Skimming Penalty.— Whoever, as an owner, agent, or manager, or who is otherwise in custody, control, or possession of property that is security for a loan made or insured under this section willfully uses, or authorizes the use, of any part of the rents, assets, proceeds, income, or other fund derived from such property, for any purpose other than to meet actual or necessary expenses of the property, or for any other purpose not authorized by this title or the regulations adopted pursuant to this title, shall be fined not more than $250,000 or imprisoned not more than 5 years, or both.”. (f) Prioritization of Assistance.— Section 532 of the Housing Act of 1949 (42 U.S.C. 14901) is amended— (1) in subsection (a), by striking “The Secretary” and inserting “Except as otherwise provided in subsection (c), the Secretary”; and (2) by adding at the end the following new subsection: “(c) Prioritization of Section 515 Housing Assistance.— “(1) In general.— The Secretary shall make assistance under section 515 available pursuant to an objective procedure established by the Secretary, under which the Secretary shall identify counties and communities having the greatest need for such assistance and designate such counties and communities to receive such assistance. “(2) Objective measures.— The Secretary shall use the following objective measures to determine the need for rental housing assistance under paragraph (1): “(A) The incidence of poverty. “(B) The lack of affordable housing and the existence of substandard housing. “(C) The lack of mortgage credit. “(D) The rural characteristics of the location. “(E) Other factors as determined by the Secretary, demonstrating the need for affordable housing. “(3) Information.— In administering this subsection, the Secretary shall use information from the most recent decennial census of the United States, relevant comprehensive affordable housing strategies under section 105 of the Cranston-Gonzalez National Affordable Housing Act, and other reliable sources obtained by the Secretary which demonstrate the need for affordable housing in rural areas. “(4) Designation.— A designation under this subsection shall not be effective for a period of more than 3 years, but may be renewed by the Secretary in accordance with the procedure set forth in this subsection. The Secretary shall take such other reasonable actions as the Secretary considers to be appropriate to notify the public of such designations.”.