42 U.S.C. § 12744 — Income targeting

Page 8457 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 12744 necessary, replace a selection of model pro- grams designed to carry out the purposes of this subchapter; (2) make available to participating jurisdic- tions alternative model programs, which shall include suggested guidelines, procedures, forms, legal documents and such other ele- ments as the Secretary determines to be ap- propriate; (3) assure, insofar as is feasible, the avail- ability of an appropriate variety of model pro- grams designed for local market conditions, housing problems, project characteristics, and managerial capacities as they differ among participating jurisdictions; (4) negotiate and enter into agreements with agencies of the Federal Government, partici- pating jurisdictions, private financial institu- tions, government-sponsored mortgage finance corporations, nonprofit organizations, and other entities to provide such services, prod- ucts, or financing as may be required for the implementation of a model program; (5) provide detailed information on model programs as requested by participating juris- dictions, private financial institutions, devel- opers, nonprofit organizations, and other in- terested parties; and (6) encourage the use of such model pro- grams to achieve efficiency, economies of scale, and effectiveness in the investment of funds made available under this part through third-party training, printed materials, and such other means of support as the Secretary determines will achieve the purpose of this subchapter. (b) Adoption of programs Except as provided in section 12753(2) of this title, each participating jurisdiction shall have the discretion to adopt one or more model pro- grams, adapt one or more model programs to its own requirements, design additional forms of as- sistance by itself or in cooperation with other participating jurisdictions, and suggest addi- tional model programs for adoption by the Sec- retary as the participating jurisdiction may deem appropriate, and the Secretary may assist a participating jurisdiction in adopting, adapt- ing, or designing one or more model programs. (c) Part D programs The selection of model programs to be made available for adoption or adaptation shall in- clude programs meeting the criteria set forth in part D. (Pub. L. 101–625, title II, § 213, Nov. 28, 1990, 104 Stat. 4100.) § 12744. Income targeting Each participating jurisdiction shall invest funds made available under this part within each fiscal year so that— (1) with respect to rental assistance and rental units— (A) not less than 90 percent of (i) the fami- lies receiving such rental assistance are fam- ilies whose incomes do not exceed 60 percent of the median family income for the area, as determined by the Secretary with adjust- ments for smaller and larger families, (ex- cept that the Secretary may establish in- come ceilings higher or lower than 60 per- cent of the median for the area on the basis of the Secretary’s findings that such vari- ations are necessary because of prevailing levels of construction cost or fair market rent, or unusually high or low family in- come) at the time of occupancy or at the time funds are invested, whichever is later, or (ii) the dwelling units assisted with such funds are occupied by families having such incomes; and (B) the remainder of (i) the families receiv- ing such rental assistance are households that qualify as low-income families (other than families described in subparagraph (A)) at the time of occupancy or at the time funds are invested, whichever is later, or (ii) the dwelling units assisted with such funds are occupied by such households; (2) with respect to homeownership assist- ance, 100 percent of such funds are invested with respect to dwelling units that are occu- pied by households that qualify as low-income families; and (3) all such funds are invested with respect to housing that qualifies as affordable housing under section 12745 of this title. (Pub. L. 101–625, title II, § 214, Nov. 28, 1990, 104 Stat. 4101; Pub. L. 103–233, title II, § 202, Apr. 11, 1994, 108 Stat. 364; Pub. L. 105–276, title V, § 599B(a), Oct. 21, 1998, 112 Stat. 2660.) Editorial Notes AMENDMENTS 1998—Par. (2). Pub. L. 105–276 struck out ‘‘at the time of occupancy or at the time funds are invested, which- ever is later’’ before ‘‘; and’’. 1994—Par. (1)(A). Pub. L. 103–233, § 202(1), substituted ‘‘(i) the families receiving such rental assistance are’’ for ‘‘such funds are invested with respect to dwelling units that are occupied by’’, ‘‘, or’’ for ‘‘, and’’ before cl. (ii), and added cl. (ii). Par. (1)(B). Pub. L. 103–233, § 202(2), substituted ‘‘(i) the families receiving such rental assistance are’’ for ‘‘such funds are invested with respect to dwelling units that are occupied by’’ and added cl. (ii). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–276, title V, § 599B(c), Oct. 21, 1998, 112 Stat. 2660, provided that: ‘‘The amendments made by this section [amending this section and section 12745 of this title] are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998].’’ EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–233 applicable with re- spect to any amounts made available to carry out this subchapter after Apr. 11, 1994, and any amounts made available to carry out this subchapter before that date that remain uncommitted on that date, with Secretary to issue any regulations necessary to carry out such amendment not later than end of 45-day period begin- ning on that date, see section 209 of Pub. L. 103–233, set out as a note under section 5301 of this title. Page 8458 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 12745 1 So in original. 2 So in original. Probably should be ‘‘grandchildren’’. § 12745. Qualification as affordable housing (a) Rental housing (1) Qualification Housing that is for rental shall qualify as af- fordable housing under this subchapter only if the housing— (A) bears rents not greater than the lesser of (i) the existing fair market rent for com- parable units in the area as established by the Secretary under section 1437f of this title, or (ii) a rent that does not exceed 30 percent of the adjusted income of a family whose income equals 65 percent of the me- dian income for the area, as determined by the Secretary, with adjustment for number of bedrooms in the unit, except that the Sec- retary may establish income ceilings higher or lower than 65 percent of the median for the area on the basis of the Secretary’s find- ings that such variations are necessary be- cause of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes; (B) has not less than 20 percent of the units (i) occupied by very low-income fami- lies who pay as a contribution toward rent (excluding any Federal or State rental sub- sidy provided on behalf of the family) not more than 30 percent of the family’s month- ly adjusted income as determined by the Secretary, or (ii) occupied by very low-in- come families and bearing rents not greater than the gross rent for rent-restricted resi- dential units as determined under section 42(g)(2) of title 26; (C) is occupied only by households that qualify as low-income families; (D) is not refused for leasing to a holder of a voucher or certificate of eligibility under section 1437f of this title because of the sta- tus of the prospective tenant as a holder of such voucher or certificate of eligibility; (E) will remain affordable, according to binding commitments satisfactory to the Secretary, for the remaining useful life of the property, as determined by the Sec- retary, without regard to the term of the mortgage or to transfer of ownership, or for such other period that the Secretary deter- mines is the longest feasible period of time consistent with sound economics and the purposes of this Act, except upon a fore- closure by a lender (or upon other transfer in lieu of foreclosure) if such action (i) recog- nizes any contractual or legal rights of pub- lic agencies, nonprofit sponsors, or others to take actions that would avoid termination of low-income affordability in the case of foreclosure or transfer in lieu of foreclosure, and (ii) is not for the purpose of avoiding low income affordability restrictions, as deter- mined by the Secretary; and (F) if newly constructed, meets the energy efficiency standards promulgated by the Secretary in accordance with section 12709 of this title. (2) Adjustment of qualifying rent The Secretary may adjust the qualifying rent established for a project under subpara- graph (A) of paragraph (1), only if the Sec- retary finds that such adjustment is necessary to support the continued financial viability of the project and only by such amount as the Secretary determines is necessary to maintain continued financial viability of the project. (3) Increases in tenant income Housing shall qualify as affordable housing despite a temporary noncompliance with sub- paragraph (B) or (C) of paragraph (1) if such noncompliance is caused by increases in the incomes of existing tenants and if actions sat- isfactory to the Secretary are being taken to ensure that all vacancies are filled in accord- ance with paragraph (1) until such noncompli- ance is corrected. Tenants who no longer qual- ify as low-income families shall pay as rent the lesser of the amount payable by the tenant under State or local law or 30 percent of the family’s adjusted monthly income, as recer- tified annually. The preceding sentence shall not apply with respect to funds made available under this Act for units that have been allo- cated a low-income housing tax credit by a housing credit agency pursuant to section 42 of title 26. (4) Mixed-income project Housing that accounts for less than 100 per- cent of the dwelling units in a project shall qualify as affordable housing if such housing meets the criteria of this section. (5) Mixed-use project Housing in a project that is designed in part for uses other than residential use shall qual- ify as affordable housing if such housing meets the criteria of this section. (6) Waiver of qualifying rent (A) In general For the purpose of providing affordable housing appropriate for families described in subparagraph (B), the Secretary may, upon the application of the project owner, waive the applicability of subparagraph (A) of paragraph (1) with respect to a dwelling unit if— (i) the unit is occupied by such a family, on whose behalf tenant-based assistance is provided under section 1437f of this title; (ii) the rent for the unit is not greater than the existing fair market rent for comparable units in the area, as estab- lished by the Secretary under section 1437f of this title; and (iii) the Secretary determines that the waiver, together with waivers under this paragraph for other dwelling units in the project, will result in the use of amounts described in clause (iii) 1 in an effective manner that will improve the provision of affordable housing for such families. (B) Eligible families A family described in this subparagraph is a family that consists of at least one elderly person (who is the head of household) and one or more of such person’s grand 2 chil-