(a) In general
A homeownership program under this subchapter shall provide for acquisition by eligible families of ownership interests in, or shares representing, at least one-half of the units in a public housing project under any arrangement determined by the Secretary to be appropriate, such as cooperative ownership (including limited equity cooperative ownership) and fee simple ownership (including condominium ownership), for occupancy by the eligible families.
Terms Used In 42 USC 1437aaa-3
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- families: includes families consisting of a single person in the case of (i) an elderly person, (ii) a disabled person, (iii) a displaced person, (iv) the remaining member of a tenant family, and (v) any other single persons. See 42 USC 1437a
- Fee simple: Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
- income: means income from all sources of each member of the household, as determined in accordance with criteria prescribed by the Secretary, in consultation with the Secretary of Agriculture, except that any amounts not actually received by the family and any amounts which would be eligible for exclusion under section 1382b(a)(7) of this title or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts may not be considered as income under this paragraph. See 42 USC 1437a
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See
- low-income families: means those families whose incomes do not exceed 80 per centum of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceilings higher or lower than 80 per centum of the median for the area on the basis of the Secretary's findings that such variations are necessary because of prevailing levels of construction costs or unusually high or low family incomes. See 42 USC 1437a
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- project: means (A) housing developed, acquired, or assisted by a public housing agency under this chapter, and (B) the improvement of any such housing. See 42 USC 1437a
- public housing: includes dwelling units in a mixed finance project that are assisted by a public housing agency with capital or operating assistance. See 42 USC 1437a
- public housing agency: means any State, county, municipality, or other governmental entity or public body (or agency or instrumentality thereof) which is authorized to engage in or assist in the development or operation of public housing, or a consortium of such entities or bodies as approved by the Secretary. See 42 USC 1437a
- Secretary: means the Secretary of Commerce. See
A homeownership program under this subchapter shall provide for the establishment of sales prices (including principal, insurance, taxes, and interest and closing costs) for initial acquisition of the property from the public housing agency if the applicant is not a public housing agency, and for sales to eligible families, such that an eligible family shall not be required to expend more than 30 percent of the adjusted income of the family per month to complete a sale under the homeownership program.
A homeownership program under this subchapter shall provide, and include a plan, for–
(1) identifying and selecting eligible families to participate in the homeownership program;
(2) providing relocation assistance to families who elect to move;
(3) ensuring continued affordability by tenants, homebuyers, and homeowners in the project;
(4) providing ongoing training and counseling for homebuyers and homeowners; and
(5) replacing units in eligible projects covered by a homeownership program.
(d) Acquisition and rehabilitation limitations
Acquisition or rehabilitation of public housing projects under a homeownership program under this subchapter may not consist of acquisition or rehabilitation of less than the whole public housing project in a project consisting of more than 1 building. The provisions of this subsection may be waived upon a finding by the Secretary that the sale of less than all the buildings in a project is feasible and will not result in a hardship to any tenants of the project who are not included in the homeownership program.
(1) In general
The application shall identify and describe the proposed financing for (A) any rehabilitation, and (B) acquisition (i) of the project, where applicable, by an entity other than the public housing agency for transfer to eligible families, and (ii) by eligible families of ownership interests in, or shares representing, units in the project. Financing may include use of the implementation grant, sale for cash, or other sources of financing (subject to applicable requirements), including conventional mortgage loans and mortgage loans insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.].
(2) Prohibition against pledges
Property transferred under this subchapter shall not be pledged as collateral for debt or otherwise encumbered except when the Secretary determines that–
(A) such encumbrance will not threaten the long-term availability of the property for occupancy by low-income families;
(B) neither the Federal Government nor the public housing agency will be exposed to undue risks related to action that may have to be taken pursuant to paragraph (3);
(C) any debt obligation can be serviced from project income, including operating assistance; and
(D) the proceeds of such encumbrance will be used only to meet housing standards in accordance with subsection (f) or to make such additional capital improvements as the Secretary determines to be consistent with the purposes of this subchapter.
(3) Opportunity to cure
Any lender that provides financing in connection with a homeownership program under this subchapter shall give the public housing agency, resident management corporation, individual owner, or other appropriate entity a reasonable opportunity to cure a financial default before foreclosing on the property, or taking other action as a result of the default.
(f) Housing quality standards
The application shall include a plan ensuring that the unit–
(1) will be free from any defects that pose a danger to health or safety before transfer of an ownership interest in, or shares representing, a unit to an eligible family; and
(2) will, not later than 2 years after the transfer to an eligible family, meet minimum housing standards established by the Secretary for the purposes of this subchapter.
(g) Repealed. Pub. L. 105-276, title V, §531(b)(1), Oct. 21, 1998, 112 Stat. 2573
(h) Protection of non-purchasing families
(1) In general
No tenant residing in a dwelling unit in a public housing project on the date the Secretary approves an application for an implementation grant may be evicted by reason of a homeownership program approved under this subchapter.
(2) Replacement assistance
If the tenant decides not to purchase a unit, or is not qualified to do so, the recipient shall, during the term of any operating assistance under the implementation grant, permit each otherwise qualified tenant to continue to reside in the project at rents that do not exceed levels consistent with section 1437a(a) of this title or, if an otherwise qualified tenant chooses to move (at any time during the term of such operating assistance contract), the public housing agency shall, to the extent approved in appropriations Acts, offer such tenant (A) a unit in another public housing project, or (B) section 8 [42 U.S.C. 1437f] assistance for use in other housing.
(3) Relocation assistance
The recipient shall also inform each such tenant that if the tenant chooses to move, the recipient will pay relocation assistance in accordance with the approved homeownership program.
(4) Other rights
Tenants renting a unit in a project transferred under this subchapter shall have all rights provided to tenants of public housing under this chapter.