42 U.S.C. § 12804 — Rehabilitation loans

Page 8475 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 12804 1 See References in Text note below. 1 So in original. The words ‘‘the property’’ probably should not appear. 2 See References in Text note below. maining unpaid pursuant to subparagraph (A)(ii) shall be repayable when the housing no longer qualifies as affordable housing in accordance with section 12749(b) of this title. (b) Selection guidelines (1) In general The Secretary shall establish guidelines for the selection of projects by participating juris- dictions for assistance under the model pro- gram. Such guidelines shall be designed to se- lect projects in areas and for markets dem- onstrating the greatest need for the produc- tion of affordable rental housing. (2) Specific requirements The selection guidelines may include— (A) the extent of the shortage of rental housing in the area that is available to low- income families; (B) the extent large families with children will be served by the project; (C) the extent to which the project pro- vides congregate facilities and has available supportive services that will permit elderly or handicapped residents who become frail and are in need of assistance in living to continue to reside in the project; (D) the extent of very low-income and low- income occupancy in excess of the income targeting requirements in section 12744 of this title; (E) the extent of the project sponsor’s commitment of equity to the project (except that this criterion shall not apply to or af- fect the selection of applications submitted by public housing agencies and nonprofit en- tities); (F) the extent of the project sponsor’s commitment of equity to the project in com- parison to the value of all public assistance for the project, including assistance under this subchapter, other Federal assistance and financing, and State and local govern- ment contributions (except that this cri- terion shall not apply to or affect the selec- tion of applications submitted by public housing agencies and nonprofit entities); (G) the extent of non-Federal public or pri- vate assistance to the project; (H) the extent to which the project pro- vides supportive services for persons with disabilities; and (I) any other factor determined by the Sec- retary to be appropriate. (c) Guidelines The Secretary shall publish guidelines for the model program under this section not later than 180 days after November 28, 1990. (Pub. L. 101–625, title II, § 252, Nov. 28, 1990, 104 Stat. 4119.) § 12803. Rental rehabilitation (a) In general The Secretary shall make available a model program to support the rehabilitation of pri- vately owned rental housing located in neigh- borhoods where the median income does not ex- ceed 80 percent of the area median as deter- mined by the Secretary and where rents can rea- sonably be expected not to change materially over an extended period of time. (b) Amount of subsidy The amount of the rehabilitation subsidy shall be moderate and shall generally not exceed 50 percent of the total costs associated with the re- habilitation of the housing. (c) Additional restrictions The guidelines of the model program shall generally comport with the additional protec- tions and restrictions specified under section 1437o(c) 1 of this title. (Pub. L. 101–625, title II, § 253, Nov. 28, 1990, 104 Stat. 4121.) Editorial Notes REFERENCES IN TEXT Section 1437o of this title, referred to in subsec. (c), was repealed by Pub. L. 101–625, title II, § 289(b), Nov. 28, 1990, 104 Stat. 4128. § 12804. Rehabilitation loans (a) In general The Secretary shall make available a model program to provide direct loans to finance the rehabilitation of low and moderate income sin- gle family and multifamily residential prop- erties. (b) Condition of loans The Secretary shall establish terms and condi- tions to ensure that such loans are acceptable risks, taking into consideration the need for re- habilitation, the security for the loan and the ability of the borrower to repay the loan. The Secretary may establish the interest rate for loans under the model program, which shall in- clude special interest rates for loans to bor- rowers with incomes below 80 percent of the area median income. (c) Additional restrictions Guidelines for the model program may require that the property— (1) be located in an area that contains a sub- stantial number of dwellings in need of reha- bilitation; (2) the property 1 is residential and owner-oc- cupied; and (3) the property 1 is in need of rehabilitation or concentrated code enforcement within a reasonable time, and the rehabilitation of such property is consistent with a local plan for rehabilitation or code enforcement. Additional guidelines for the model program shall generally comport with the additional pro- tections and restrictions specified under section 1452b 2 of this title. (Pub. L. 101–625, title II, § 254, Nov. 28, 1990, 104 Stat. 4121.) Editorial Notes REFERENCES IN TEXT Section 1452b of this title, referred to in subsec. (c), was repealed by Pub. L. 101–625, title II, § 289(b)(1), Nov. Page 8476 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 12805 28, 1990, 104 Stat. 4128, which is classified to section 12839(b)(1) of this title. § 12805. Sweat equity model program (a) In general The Secretary shall make available a model program to provide grants to public and private nonprofit organizations and community housing development organizations to provide technical and supervisory assistance to low-income and very low-income families, including the home- less, in acquiring, rehabilitating, and con- structing housing by the self-help housing meth- od. (b) Rehabilitation of properties The program shall target for rehabilitation properties which have been acquired by the Fed- eral, State, or local governments. (c) Homeownership opportunities through sweat equity (1) The program shall utilize the skilled or un- skilled labor of eligible families in exchange for acquisition of the property. (2) Training shall be provided to eligible fami- lies in building and home maintenance skills. (d) Rental opportunities through sweat equity (1) The program shall include rental opportu- nities for eligible families which will help ex- pand the stock of affordable housing which is most appropriate for the target group. (2) The use of the tenant’s skilled or unskilled labor shall be encouraged in lieu of or as a sup- plement to rent payments by the tenant. (e) ‘‘Self-help housing’’ defined The term ‘‘self-help housing’’ means the same as in section 1490c of this title. (f) Additional restrictions The guidelines for the model program shall generally comport with the additional protec- tions and restrictions specified under section 1490c of this title. (Pub. L. 101–625, title II, § 255, Nov. 28, 1990, 104 Stat. 4121.) Statutory Notes and Related Subsidiaries ASSISTANCE FOR SELF-HELP HOUSING PROVIDERS Pub. L. 104–120, § 11, Mar. 28, 1996, 110 Stat. 841, as amended by Pub. L. 105–276, title V, § 599E(a), Oct. 21, 1998, 112 Stat. 2663; Pub. L. 106–569, title II, § 202, Dec. 27, 2000, 114 Stat. 2951; Pub. L. 108–285, § 2, Aug. 2, 2004, 118 Stat. 917; Pub. L. 114–201, title V, § 502, July 29, 2016, 130 Stat. 811, provided that: ‘‘(a) GRANT AUTHORITY.—The Secretary of Housing and Urban Development may, to the extent amounts are available to carry out this section and the require- ments of this section are met, make grants for use in accordance with this section to national and regional organizations and consortia that have experience in providing or facilitating self-help housing homeowner- ship opportunities. ‘‘(b) GOALS AND ACCOUNTABILITY.—In making grants under this section, the Secretary shall take such ac- tions as may be necessary to ensure that— ‘‘(1) assistance provided under this section is used to facilitate and encourage innovative homeowner- ship opportunities through the provision of self-help housing, under which the homeowner contributes a significant amount of sweat equity toward the con- struction of the new dwellings; ‘‘(2) assistance provided under this section for land acquisition and infrastructure development results in the development of not less than 4,000 new dwellings; ‘‘(3) the dwellings constructed in connection with assistance provided under this section are quality dwellings that comply with local building and safety codes and standards and are available at prices below the prevailing market prices; ‘‘(4) the provision of assistance under this section establishes and fosters a partnership between the Federal Government and organizations and consortia, resulting in efficient development of affordable hous- ing with minimal governmental intervention, limited governmental regulation, and significant involve- ment by private entities; ‘‘(5) activities to develop housing assisted pursuant to this section involve community participation in which volunteers assist in the construction of dwell- ings; and ‘‘(6) dwellings are developed in connection with as- sistance under this section on a geographically di- verse basis, which includes areas having high housing costs, rural areas, and areas underserved by other homeownership opportunities that are populated by low-income families unable to otherwise afford hous- ing. If, at any time, the Secretary determines that the goals under this subsection cannot be met by providing as- sistance in accordance with the terms of this section, the Secretary shall immediately notify the applicable Committees in writing of such determination and any proposed changes for such goals or this section. ‘‘(c) NATIONAL COMPETITION.—The Secretary shall se- lect organizations and consortia referred to in sub- section (a) to receive grants through a national com- petitive process, which the Secretary shall establish. ‘‘(d) USE.— ‘‘(1) PURPOSE.—Amounts from grants made under this section, including any recaptured amounts, shall be used only for eligible expenses in connection with developing new decent, safe, and sanitary nonluxury dwellings in the United States for families and per- sons who otherwise would be unable to afford to pur- chase a dwelling. ‘‘(2) ELIGIBLE EXPENSES.—For purposes of paragraph (1), the term ‘eligible expenses’ means costs only for the following activities: ‘‘(A) LAND ACQUISITION.—Acquiring land (includ- ing financing and closing costs), which may include reimbursing an organization, consortium, or affil- iate, upon approval of any required environmental review, for nongrant amounts of the organization, consortium, or affiliate advanced before such re- view to acquire land. ‘‘(B) INFRASTRUCTURE IMPROVEMENT.—Installing, extending, constructing, rehabilitating, or other- wise improving utilities and other infrastructure. Such term does not include any costs for the rehabili- tation, improvement, or construction of dwellings. ‘‘(e) ESTABLISHMENT OF GRANT FUND.— ‘‘(1) IN GENERAL.—Any amounts from any grant made under this section shall be deposited by the grantee organization or consortium in a fund that is established by such organization or consortium for such amounts, administered by such organization or consortium, and available for use only for the pur- poses under subsection (d). Any interest, fees, or other earnings of the fund shall be deposited in the fund and shall be considered grant amounts for pur- poses of this section. ‘‘(2) ASSISTANCE TO AFFILIATES.—Any organization or consortia that receives a grant under this section may use amounts in the fund established for such or- ganization or consortia pursuant to paragraph (1) for the purposes under subsection (d) by providing assist- ance from the fund to local affiliates of such organi- zation or consortia. ‘‘(f) REQUIREMENTS FOR ASSISTANCE.—The Secretary may make a grant to an organization or consortium under subsection (a) only pursuant to—