HOMEOWNERSHIP OPTION.

SEC. 555. HOMEOWNERSHIP OPTION. (a) In general.— Section 8(y) of the United States Housing Act of 1937 (42 U.S.C. 1437f(y)) is amended— (1) in paragraph (1)— (A) in the matter preceding subparagraph (A), by striking “A family receiving” and all that follows through “if the family” and inserting the following: “A public housing agency providing tenant-based assistance on behalf of an eligible family under this section may provide assistance for an eligible family that purchases a dwelling unit (including a unit under a lease-purchase agreement) that will 112 STAT. 2612be owned by 1 or more members of the family, and will be occupied by the family, if the family”; (B) in subparagraph (A), by inserting before the semicolon “, or owns or is acquiring shares in a cooperative”; and (C) in subparagraph (B)— (i) by striking “(i) participates” and all that follows through “(ii) demonstrates” and inserting “demonstrates”; and (ii) by inserting “, except that the Secretary may provide for the consideration of public assistance in the case of an elderly family or a disabled family” after “other than public assistance”; (2) by striking paragraph (2) and inserting the following new paragraph: “(2) Determination of amount of assistance.— “(A) Monthly expenses not exceeding payment standard.— If the monthly homeownership expenses, as determined in accordance with requirements established by the Secretary, do not exceed the payment standard, the monthly assistance payment shall be the amount by which the homeownership expenses exceed the highest of the following amounts, rounded to the nearest dollar: “(i) 30 percent of the monthly adjusted income of the family. “(ii) 10 percent of the monthly income of the family. “(iii) If the family is receiving payments for welfare assistance from a public agency, and a portion of those payments, adjusted in accordance with the actual housing costs of the family, is specifically designated by that agency to meet the housing costs of the family, the portion of those payments that is so designated. “(B) Monthly expenses exceed payment standard.— If the monthly homeownership expenses, as determined in accordance with requirements established by the Secretary, exceed the payment standard, the monthly assistance payment shall be the amount by which the applicable payment standard exceeds the highest of the amounts under clauses (i), (ii), and (iii) of subparagraph (A).”; (3) by striking paragraphs (3), (4), and (5) and inserting the following new paragraphs: “(3) Inspections and contract conditions.— “(A) In general.— Each contract for the purchase of a unit to be assisted under this section shall— “(i) provide for pre-purchase inspection of the unit by an independent professional; and “(ii) require that any cost of necessary repairs be paid by the seller. “(B) Annual inspections not required.— The requirement under subsection (o)(8)(A)(ii) for annual inspections shall not apply to units assisted under this section. “(4) Other authority of the secretary.— The Secretary may— “(A) limit the term of assistance for a family assisted under this subsection; and 112 STAT. 2613 “(B) modify the requirements of this subsection as the Secretary determines to be necessary to make appropriate adaptations for lease-purchase agreements.”; and (4) by redesignating paragraphs (6), (7) (as previously amended by this Act), and (8) as paragraphs (5), (6), and(7), respectively. (b) Demonstration Program.— (1) In general.— With the consent of the affected public housing agencies, the Secretary may carry out (or contract with 1 or more entities to carry out) a demonstration program under section 8(y) of the United States Housing Act of 1937(42 U.S.C. 1437f(y)) to expand homeownership opportunities for low-income families. (2) Report.— The Secretary shall report annually to Congress on activities conducted under this subsection. (c) Applicability.— This section shall take effect on, and the amendments made by this section are made on, and shall apply beginning upon, the date of the enactment of this Act.