TITLE-II -- Investment in Affordable Housing


HOME Investment Partnerships: The Senate bill contained a provision not
included in the House amendment to establish a new Housing Opportunity
Partnerships (HOP) program to expand the supply of affordable housing
and make housing more affordable for low-income families. The conference
report contains the Senate provision under a HOME Investment
Partnerships program reflecting amendments noted below. The provision
would allocate funds, partly by formula and partly by incentive
allocation, among eligible State and local governments to strengthen
public-private partnerships able to provide more affordable housing.
HOME funds would have to be matched by State and local resources and
used to leverage private investment. Participating jurisdictions would
be able to use HOME funds to carry out multiyear housing strategies with
a variety of eligible uses, including rehabilitation of substandard
housing, new construction, substantial rehabilitation, acquisition and
tenant-based rental assistance. Jurisdictions would be able to provide
assistance in a number of eligible forms, including loans, advances,
equity investments, interest subsidies and other forms of investment
that the Secretary approves. The HOME program would have been
administered through the Office of the Assistant Secretary for
Housing/FHA Commissioner in a way that enables participating
jurisdictions to receive the various forms of assistance they need to
carry out activities under the HOP program (including capital
investment, Section 8 rental assistance, mortgage insurance and other
forms of federal housing assistance) to the maximum extent practicable
on a "one-stop" basis. HUD would be responsible for developing and
making available a selection of model programs designed to provide
guidelines to enable participating jurisdictions to use HOME funds most
effectively under a variety of local market conditions.

Short Title: The Senate bill authorized a short title not contained in
the House amendment. The conference report changes the short title from
the "Housing Opportunities Partnerships Act" to the "HOME Investment
Partnerships Act."

Findings: The House amendment contained provisions not included in the
Senate bill that found that: the nation has not made adequate progress
toward the goal of a national housing policy; the supply of affordable
housing is diminishing; the Tax Reform Act of 1986 removed tax
incentives for the production of affordable rental housing; the living
conditions for an increasing number of Americans has deteriorated as a
result of reduction in Federal assistance; many Americans face the
possibility of homelessness unless the private and public sectors work
together to develop and rehabilitate the nation's housing stock; there
is a need to strengthen nationwide a cost-effective community-based
housing partnership; direct assistance to expand the supply of
affordable rental housing should be provided in a way that is more
cost-effective and targeted than tax incentives; the nation's housing
system provides a strong base on which national housing policy should
build; an increasing number of states and local governments have been
successful in producing cost-effective housing by working in partnership
with the private sector; nonprofit organizations have played an
increasingly important role in the production and rehabilitation of
affordable housing; local communities need additional resources to
mobilize the private sector; and the efforts to provide more affordable
housing require tenants and homeowners to be fiscally responsible and
able managers. The conference report includes a section of findings
based on the House provisions.

Purposes: The conference report contains a provision that was contained
in the Senate bill and amended to reflect provisions in the House bill
that among purposes of this section are: to increase the supply of
affordable rental housing; to mobilize and strengthen the abilities of
States and local governments to design and implement strategies for
achieving an adequate supply of affordable housing; to provide
participating jurisdictions, on a coordinated basis, with the various
forms of Federal housing assistance needed to expand the supply of
affordable housing; to make housing more affordable through tenant-based
rental assistance; to expand the capacity of nonprofit organizations to
develop and manage affordable housing; to ensure that housing produced
with Federal assistance is affordable to low-income persons for the
property's remaining useful life, is appropriate to the neighborhood
surroundings, and is mixed-income housing wherever appropriate. The
conference report includes the Senate provision with the amendment
described above.

HOME Advisory Board: The Senate bill contained a provision not included
in the House amendment to establish an advisory Board. The conference
report does not include the Senate provision.

Authorization: The Senate bill contained a provision not included in the
House amendment to authorize three years of funding for a new
formula-based Housing Opportunity Partnerships program. The House
amendment included provisions not in the Senate bill to provide 1-year
authorizations for two new programs: the Community Housing Partnership
and the Rental Housing Production program. The conference report
establishes one formula-based HOME Investment Partnerships authorization
that achieves the purposes of the Community Housing Partnership, and
rental production programs and authorizes appropriations of
$1,000,000,000 in fiscal year 1991 and $2,086,000,000 in fiscal year
1992.

Eligible Uses of Investment: The Senate bill contained a provision not
in the House amendment that the conference report refined to make it
clear that the Secretary may not restrict a jurisdiction's choice among
eligible housing activities except as specifically provided for in the
statute. The conferees intend that the HOME Investment Partnerships be
directed primarily to encourage States and local governments-in
collaboration with private organizations-to take action and adopt
policies to expand the supply of affordable housing. Tenant-based rental
assistance would be a permitted use where a jurisdiction can certify
that it is an essential element of the jurisdiction's strategy for
expanding the supply, affordability and availability of decent housing,
and specifies the local market conditions that lead to the choice of
this option. Advances on interest-bearing loans would be added as an
eligible use of investment.

The conferees expect that rehabilitation of substandard housing will be
the predominant use of HOME funds. However, the conferees believe that
new construction will be an appropriate use of the funds under certain
circumstances. The conference report requires the Secretary to establish
criteria that would designate not less than 30 percent of the
jurisdictions receiving a HOME formula allocation would be determined
to have a housing supply sufficiently inadequate to permit new
construction without further approval by the Secretary. The Secretary
shall publish the criteria and a list of the jurisdictions that the
Secretary determines to have met those criteria. The Secretary shall
provide a fair opportunity for other jurisdictions to present evidence,
including evidence not considered by the Secretary when preparing the
list, showing that the jurisdiction meets the criteria. New construction
would be permitted elsewhere only if a jurisdiction certifies that the
proposed new construction meets criteria specified in the Senate bill
and contained in the conference report. The conference report expands
the neighborhood revitalization exception contained in the Senate bill
to permit new construction of more than 20 percent of the units assisted
if the housing is to be located in an area with an inadequate supply of
existing housing that can economically be rehabilitated to meet
identified housing needs or the new construction is required to
accomplish the neighborhood revitalization program. The conference
report contains the Senate provision as amended.

Rent affordability: The conferees reaffirm the policy that federal
housing assistance should be directed, wherever feasible, to holding the
contribution toward rent for low-income beneficiaries to within 30
percent of the family's adjusted income. The conference agreement would
make all housing assisted with HOME funds available to holders of
vouchers or rental certificates, who would be making a rent contribution
that does not exceed 30 percent of the family's adjusted income. The
conferees recognize that responsibility for providing subsidies to
achieve that affordability objective cannot be placed on a project
sponsor. The conferees intend that other forms of housing assistance,
particularly mortgage insurance and rental assistance, will have to be
provided in conjunction with HOME investment so that housing can be
affordable to very low-income families. The conferees therefore expect
that, to carry out the purposes of title II, the Secretary will
implement procedures to make rental assistance-both tenant-based and
project-based rental assistance under Section 8-available to achieve the
important affordability objectives related to housing assisted with HOME
funds. To the extent practicable and consistent with the availability
of appropriations and other priority uses for available rental
assistance, procedures for distributing rental assistance to the State
and local level should support efforts of participating jurisdictions
to carry out their comprehensive housing affordability strategies most
effectively.

Participation by States and Local Governments: The Senate bill contained
a provision not included in the House amendment to permit certain
smaller local jurisdictions, if they had received an insufficient
formula allocation, to become participating jurisdictions by forming
consortia with adjacent jurisdictions in similar circumstances. The
provision was amended to make it easier for smaller jurisdictions to
participate by permitting them, before the formula allocation is made,
to form a consortium that could qualify for an allocation large enough
to permit the consortium to become a participating jurisdiction. Such
a consortium of geographically contiguous units of local government
would be deemed a general local government for purposes of this subtitle
if the Secretary determines that the consortium has sufficient
authority, capacity, and written commitment by the State to direct its
activities towards alleviating its housing problems.

The conference agreement would permit a local jurisdiction including
consortia to participate if its allocation is not less than
$750,000-compared to a threshold of $2,000,000 in the Senate bill-or if
it supplements its allocation to make up any shortfall below $750,000.
A jurisdiction could become eligible if the Secretary found that the
jurisdiction is a central city, rather than the city with the largest
population in a metropolitan area, as in the Senate bill. The conference
report contains the Senate provision as amended.

Allocation of Resources: The Senate bill contained a provision not
included in the House amendment that was amended by initially
distributing all of the HOME funds by formula, compared to 80 percent
by formula, 20 percent by incentive allocation, as in the Senate bill.
The conference report contains the Senate provision as amended.

Rental Production: The House amendment contained a provision not
included in the Senate bill that established a rental housing production
program to make repayable advances from a new revolving loan established
in the Treasury to cover up to 50 percent of the cost of construction
for eligible rental housing. The conference report does not contain the
House provision, but includes an amendment to the Senate bill to include
Rental Housing Production advances as a specified model program under
the HOME Investment Partnerships Act.

The Rental Production Program contained in the House amendment would
have authorized HUD to make repayable advances to eligible project
sponsors to assist the sponsors in constructing, acquiring, or
substantial rehabilitating affordable rental housing, including limited
equity cooperatives and mutual housing. An advance could not have
exceeded 50 percent of the total costs of the projects. Interest
payments on such advances would have started one year after completion
of the project. The interest rate could not have been more than 3
percent. Interest would have been payable only from cash flow in excess
of that required to provide a minimum return on equity as determined by
the Secretary. Unpaid interest would have accrued to the principal owed.
If the cash flow were greater than the interest due, HUD would have
received 50 percent of the excess.

The House amendment contained a provision that would have required the
principal and any accrued interest payable at 25 years after the
completion of the construction, acquisition or rehabilitation. If, at
the end of the 25-year period, the developer agreed to maintain the
property according to the low-income restrictions of this program, the
repayment would have been deferred, no further interest would have
accrued, and the developer would have been forgiven the balance due at
a rate of 6.7 percent per year.

The House amendment contained a provision that would have designated
nonprofits, for-profits and public housing agencies as eligible
sponsors. The project sponsor would have had to commence construction,
acquisition or rehabilitation not later than 24 months after notice of
project selection, unless the Secretary for good cause extended the
date.

The House amendment contained a provision that would have required low
income occupancy requirements such that during the initial 25 years of
the advance, at least 20% of the units would have been required to be
occupied by very low income families (those whose income does not exceed
50% of area median income) or at least 40% by low income families (those
whose income does not exceed 60% of area median income). The allowable
rent for very low income families could not have exceeded 30% of
adjusted income of families whose income equals 40% of median income.
Allowable rent for the low income families would have been 30% of
adjusted income of families whose income equaled 50% of median income.
The cap for lower income families (80% of median income) would have been
30% of adjusted income for families whose income equals 60% of median
income. If a family that occupies a unit reserved for very low-income
or low-income families ceases to qualify as such, that family could have
continued to occupy the unit so long as the family is a low or lower
income family. Advances would have been limited to amounts needed to
meet occupancy and rent requirements.

The House amendment contained a provision that would have allocated
assistance, other than assistance under this title, to all units in the
project in determining the amount of the advance under this title.

The House amendment contained a provision that would have required the
Secretary to establish selection criteria for applicants designed to
select projects in areas demonstrating the greatest need for affordable
housing. Such criteria would have included: (1) the extent of the
shortage of rental housing for lower income families in an area; (2) the
extent to which large families with children will be served by the
specific project; the extent to which the project provides congregate
facilities and has available supportive services; (3) the extent of very
low and low income occupancy in excess of program requirements; (4) the
extent of the project sponsor's commitment of equity to the project; (5)
the extent of the project sponsor's commitment of equity to the project
in comparison to the value of all public assistance for the project; (6)
the extent to which the market rents do not exceed Section 8 certificate
limitations (rents equal to 30% of income); (7) the extent of
non-federal public assistance to the project; and (8) any other factors
determined by the Secretary to be appropriate.

The House amendment contained a provision that would have further
delineated selection criteria by prohibiting the Secretary from
selecting projects based on the ownership of the project sponsor. The
Secretary would have been able to establish selection criteria to limit
the areas in which projects eligible for advances may be located. Such
criteria would have had to be objective and timely and include the level
and duration of housing vacancies, the vacancy and turnover in units
with rents below the fair market rents, and the extent of housing
overcrowding. Projects serving special needs, such as housing for large
families with children, supportive housing for persons with disabilities
and congregate housing for the elderly and handicapped would be eligible
for advances without regard to the above limitation.

Rental housing production: The House amendment contained a provision
establishing the Rental Housing Production Fund as a revolving fund in
Treasury. The Fund would consist of appropriated funds, funds received
from repayments of advances under this title and amounts received from
the investment of excess funds. No project sponsor could discriminate
against a tenant because of such tenant's receipt of housing assistance.
The Secretary would be required to issue necessary regulations. This
provision would authorize $300 million for fiscal year 1991 and would
provide a conforming amendment that would allow CDBG funds to be used
for activities under this title.

The conference report amends the Senate bill to provide that, of the
funds appropriated for the HOME Investment Partnerships, 10 percent in
fiscal year 1991 and 15 percent in fiscal year 1992 would be designated
for use only to produce affordable rental housing through new
construction or substantial rehabilitation.  The conference agreement
would distribute those funds by special formula among jurisdictions
that, according to the Secretary, have a housing supply that is
sufficiently inadequate to permit new construction at the jurisdiction's
discretion, without further approval by the Secretary.  The funds would
be reserved for new construction or substantial rehabilitation for a
maximum period of 24 months, after which uncommitted amounts could be
used for other eligible purposes during an additional 12 months period.

The conferees note that the set-aside under section 217(b)(1)(A) does
not place a cap on funds that may be used for new construction. Other
funds may be used for this purpose so long as such use is in compliance
with provisions of the title. The set-aside amounts would be initially
allocated by formula among jurisdictions that the Secretary determines
has an inadequate supply of housing. The allocation formula would
reflect each jurisdiction's share of the total need for rental housing
production. The Secretary would establish a basic allocation formula by
objective measures of tightness in the housing market, inadequate
housing, the number of low-income families in housing likely to need
rehabilitation, the costs of producing housing, poverty, and capacity
of the jurisdiction to carry out housing activities without federal
assistance.

The conference agreement amends the basic formula for HOME funding
allocations to provide greater recognition of the need for affordable
housing in jurisdictions that are experiencing a variety of housing
problems. The changes in the allocation formula reflect the intent of
the conferees that assistance under this subtitle shall be available to
each jurisdiction with a demonstrated need and commitment to expanding
the supply of affordable housing.

The conference agreement adds two new formula factors to those contained
in the Senate bill: the number of low-income families in housing likely
to be in need of rehabilitation, and the fiscal incapacity of a
jurisdiction to carry out activities under this subtitle without federal
assistance. In determining the fiscal incapacity of each jurisdiction,
the Secretary shall assess the relative tax burden of each jurisdiction
and its inability or declining ability to increase local taxes to
develop affordable housing.

In addition, the conference agreement instructs the Secretary to
consider the need for appropriate geographic distribution of assistance
under this subtitle.

The conferees intend that the allocation of funds under the new
construction set-aside shall not reduce the funds received by any
jurisdiction below the level the jurisdiction would have received if the
basic HOME formula were used alone. The conference agreement therefore
provides that, if a jurisdiction receives an allocation under the rental
housing production formula, the Secretary shall reduce the
jurisdiction's allocation under the basic formula by the amount
allocated under the rental housing production formula. The conference
agreement also provides that a jurisdiction's rental housing production
formula shall not exceed the amount it would receive if the basic
formula were used alone. This provision is intended to ensure that the
Rental Housing Production formula provides fenced in resources for new
construction in jurisdictions that most need it, but does so without
redistributing funds geographically from regions that have other forms
of housing needs.

The conferees intend that the Secretary shall promptly begin the
development of formulas for distributing HOME funds so that the
appropriate committees of Congress can be notified of the Secretary's
recommended formulas within 120 days after enactment of the Act. The
conferees direct the Secretary to develop details of the formulas in
periodic and open consultation with the housing subcommittees of the
House and Senate as well as with representatives of State and local
government. The conference report contains the Senate provision as
amended.

State Allocation: The Senate bill contained a provision not included in
the House amendment that was amended to require the Secretary, when
applying the distribution formula to States, to give 20 percent weight
to measures of the State's share of the national housing need and 80
percent weight to measures of the share of need reflected among
nonparticipating jurisdictions within the State. This provision is
needed to provide a fair geographic distribution of HOME funds across
the nation. The conference report contains the Senate provision.

Minimum Local Allocation: The Senate bill contained a provision not
included in the House amendment that was amended by reducing the minimum
formula allocation to units of local government to $500,000, compared
to $1,500,000 in the Senate bill. Minimum funding would be $750,000,
compared to $2,000,000 in the Senate bill. The conferees believe that
these changes will allow participation by a larger number of communities
to participate, while ensuring that each participating jurisdiction will
have sufficient funds to carry out an effective housing strategy. The
conference report contains the Senate provision as amended.

Maximum Allocations: The Senate bill contained a provision not included
in the House amendment that placed specific caps on the portion of HOME
funding that could go to any one State or locality. The conference
agreement does not contain this provision but the conferees expect the
Secretary to develop a formula that avoids having an inappropriately
large share of the funds being allocated to only a few jurisdictions.

Incentive Allocation: The Senate bill contained a provision not included
in the House amendment that reserved 20 percent of the HOME funds for
distribution by incentive allocation rather than by formula. The
conference report does not contain the Senate provision. However, the
conference agreement retains the criteria for incentive allocations for
use when reallocating certain funds in accordance with various
provisions of the title.

Review of Allocation Percentage: The Senate bill contained a provision
not included in the House amendment that would have required an annual
review of the allocation formulas. The conference report does not
contain this provision because the conferees believe it is appropriate
to provide more effective collaboration in the development of allocation
formulas and then to retain those formulas over time to give States and
local governments enough predictability to permit sound planning and
management of housing strategies.

Tenant Selection: The Senate bill contained a provision not included in
the House amendment that requires rental projects assisted with HOME
funds to establish orderly tenant selection procedures. The conference
report contains the Senate provision with amendment to add that tenant
selection policies and criteria shall give reasonable consideration to
the housing needs of families that have preference under public housing
procedures.

HOME Investment Trust Funds: The Senate bill contained a provision not
included in the House amendment that was amended by changing the name
from "housing investment trust funds" to "HOME Investment Trust
Funds." The conference report contains the Senate provision as amended.

Monitoring of Compliance: The Senate bill contained a provision not
included in the House amendment that is amended by adding a technical
refinement allowing the Secretary to provide streamlined procedures in
the case of small-scale or scattered site housing. The conference report
contains the Senate provision as amended.

Community Housing Partnership: The Senate bill contained a provision not
included in the House amendment that would have required each
jurisdiction receiving a formula allocation of housing assistance to set
aside 10 percent of its allocation for nonprofit housing development.
The House amendment contained a provision not included in the Senate
bill that would have created a separate program, the Community Housing
Partnership program, which would authorize the Secretary to allocate
funds by formula to States, urban counties, cities, and nonprofit
organizations. The funds could have been used for housing education and
organizational support grants for capacity building, technical
assistance and community housing. Community Housing Partnership grants
could have been provided for maintaining, acquiring, constructing, and
rehabilitating affordable housing. The conference report does not
contain the House provision.

The conference agreement amends the Senae bill to include a new
subtitle, Community Housing Partnership, that provides a set-aside of
15 percent of HOME Investment Partnership funds for investment in
housing to be developed, sponsored or owned by non-profit community
housing development organizations. Amounts reserved could be used for
activities that are eligible generally under the HOME program-including
maintaining, acquiring, constructing, and rehabilitating affordable
housing-as well as for project-specific technical assistance and site
control loans and project-specific seed money loans.

The conference report permits not more than 10 percent of the amounts
set aside for the Community Housing Partnership to be used for project
specific technical assistance and seed money loans. Repayment of the
loans would be made into the participating jurisdiction's HOME
Investment Trust Fund.

The conference report contains a provision authorizing the Secretary to
provide housing education and organizational support grants to
facilitate the education of low and moderate income homeowners and
tenants and to promote the ability of community housing development
organizations to maintain, rehabilitate and construct housing for low
and moderate income families. Eligible activities include organizational
support to cover operational expenses and technical assistance, housing
education and program-wide support for nonprofit community housing
development organizations.

The conference report provides that assistance to community housing
development organizations shall be provided through contract with
private, nonprofit intermediary organizations that have demonstrated the
capacity to provide a range of technical assistance to nonprofit
organizations in more than one community. The conferees believe that the
Community Housing Partnership provides an opportunity for nonprofit
community housing development organizations to provide more affordable
housing most efficiently.

The House amendment contained a provision not in the Senate bill
requiring that recipients of Community Housing Partnership funds submit
and comply with a plan for community and resident participation in
development and management decisions. The conference report contains the
House provision with an amendment that requires a community housing
development organization to provide and follow a program of tenant
participation in management decisions.

The House amendment contained a provision that limited the federal
assistance received by any nonprofit sponsor to not more than 50 percent
of the total operating costs of the nonprofit sponsor in the fiscal
year. The conference report contains the House provision.

Other Support for State and Local Strategies: The House amendment
contained a provision not included in the Senate bill that establishes
that "REACH" asset recycling information dissemination program. The
House provision would have authorized the Secretary to make grants to
States on behalf of the State housing finance agencies (HFA) to
capitalize revolving loan funds to finance housing for low and moderate
income renters and first time homebuyers.

The House provision would have defined eligible properties to include
unoccupied single or multifamily units which are owned or controlled by
one of the following federal agencies: (A) the Department of Housing and
Urban Development, (B) the Department of Veterans Affairs, (C) the
Federal Deposit Insurance Corporation; (D) the Office of Thrift
Supervision; (E) the Farmers Home Administration; and (F) the Resolution
Trust Corporation.

The House provision would have established appraisal guidelines,
requirements on listing of eligible properties, reporting requirements,
and definitions for this section and would have authorized appropriation
of such sums as are necessary for fiscal year 1991 to be available until
expended.

The Conference Committee recognizes the importance of developing the
capacity of housing partnerships-public agencies, for-and-non-profit
corporations, lenders, developers and other-to identify and meet the
needs for increased supply of decent, affordable housing. Irrespective
of whether contracted providers are public agencies, associations or
corporations, or offer their services for profit or as non-profits, the
Conference Committee is concerned that HUD exercise enormous care to
select providers based upon their quality, professional skills,
expertise, demonstrated experience and cost-effective delivery of
services.

In addition, HUD should develop procedures to review on a regular basis
the service provided by all technical assistance service providers to
ensure the quality of work and cost effectiveness.

The conference report includes REACH among the other support for State
and local housing strategies provided through the HOME Investment
Partnerships. The Secretary is required to provide jurisdictions upon
request with a list of eligible properties owned by the federal
government that are available for purchase, development, or
rehabilitation.

Specified Model Programs

The House amendment contained three provisions not included in the
Senate bill that would produce affordable rental housing, provide Home
Repair Services Grants for Older and Disabled Homeowners, and establish
a Low-income Housing Conservation and Efficiency Grant Program. The
conference agreement includes these initiatives among the model programs
that the Secretary shall make available as guidelines for participating
jurisdictions using HOME funds.

Low income housing conservation and efficiency grant program: The House
amendment contained a provision not included in the Senate bill
authorizing the Secretary to make grants to States for distribution to
local governments and community action agencies to carry out a
low-income housing conservation and efficiency program to provide safe,
energy-efficient affordable housing for low-income persons. The
conference report includes a model program under the HOME Investment
Partnerships to achieve the purposes of the House provision.

The model program would provide guidelines for a participating
jurisdiction to identify housing that is (1) owned and occupied by
persons or families who have received, are currently receiving, or are
scheduled to receive assistance under the ECPA weatherization programs
(or a comparable Federal or State program); (2) in danger of becoming
uninhabitable within a 5-year period because of structural weaknesses
or problems; and (3) not sufficiently sound to permit energy
conservation improvements without other repair or rehabilitation
measures to protect such energy investments. The guidelines would
provide for repairs to prolong the habitability of the identified units,
including roofing, electrical, plumbing, furnace, and foundation repairs
or replacement that will prolong the use of the unit as a safe and
energy-efficient residence for low income persons. The guidelines would
indicate reasonable steps to ensure that any units so repaired will
remain occupied by persons or families eligible for assistance under
HOME.

Rehabilitation of In-Rem Properties: The House amendment contained a
provision not included in the Senate bill authorizing an additional $30
million for fiscal year 1991 for Community Development Block Grant funds
to be used specifically for converting and rehabilitating properties
that states and local governments have acquired as a result of tax
foreclosure proceedings (in rem properties). The conference report
includes a model program under the HOME Investment Partnerships to
achieve the purposes of the House provision.

The model program would provide guidelines for a participating
jurisdiction to convert in rem properties to provide affordable
permanent housing for the homeless by leasing the properties to
nonprofit organizations and permitting the organizations to rehabilitate
the properties. The model program would target vacant properties for
rehabilitation by nonprofit organizations.

Home Repair Service Grants: The House amendment contained a provision
not included in the Senate bill to establish a Home Repair Service Grant
program for older and disabled individuals and to authorize the
Secretary to make grants for repair services for older and disabled
homeowners to eligible organizations to the extent of appropriated
funds. The conference report includes a model program under the HOME
Investment Partnerships that would achieve the purposes of the House
provision.

The model program would provide guidelines for a participating
jurisdiction to repair the primary residences of older and disabled
homeowners who qualify as low-income families.

Second Mortgage Assistance for First-time Homebuyers: The House
amendment contained a provision not included in the Senate bill that
would have authorized the Secretary to provide second mortgages to
first-time homebuyers. The conference report includes a model program
under the HOME Investment Partnerships that would achieve the purposes
of the House provision.

The model program would provide guidelines to participating
jurisdictions could provide loans secured by second mortgages with
deferred payment of interest and principal to first-time homebuyers. The
guidelines would provide for homeownership counselling to help
homebuyers identify the most suitable properties, understand mortgage
transactions, eliminate credit problems and follow sound financial
management. The guidelines would require that the assistance be provided
only to eligible first-time homebuyers with respect to their principal
residence and would limit assistance to 30% of the acquisition price of
the home. Repayment could be deferred for not more than 5 years. Second
mortgage terms would have to include an interest rate of at least 4%
and require repayment within 15 years.

Protection of State and Local Authority: The conferees adopted a
provision that reaffirms an amendment in the Senate bill that was not
included in the House amendment that prohibits the Secretary from
establishing criteria that interfere with the public policies of states
and units of local government. The conferees intend that the federal
housing assistance be used to give State and local governments more
effective tools for achieving housing affordability within their
jurisdictions. It is not the conferees' intent to give HUD new authority
to intervene in State and local decision-making. For that reason the
conference agreement reaffirms and makes clearer the provisions in title
I of the Senate bill relating to this issue. The conference report
contains the Senate provision.

Anti-displacement: The House amendment contained a provision not in the
Senate bill that would require all recipients of Community Housing
Partnership funds to certify that they are in compliance with a
residential anti-displacement and relocation assistance plan required
of recipients of Community Development Block Grants. The conference
agreement includes this among the requirements of participating
jurisdictions under the HOME program. The conferees emphasize that
scarce federal dollars should be used to expand the availability of
affordable housing, not to reduce the supply. The conference report
contains the House amendment as amended.

Equal Opportunity: The Senate bill contained a provision not included
in the House amendment that would direct participating jurisdictions to
prescribe procedures acceptable to the Secretary to establish and
oversee a minority outreach program within each such jurisdiction. The
purpose of such an outreach program is to ensure the inclusion, to the
maximum extent possible, of minorities and women, and entities owned by
minorities and women, in all contracts entered into in order for the
participating jurisdiction to provide affordable housing authorized
under this Act or any federal housing law.

In addition, the Act requires that the Secretary submit to Congress a
report on the actions taken by each participating jurisdiction to
undertake a minority outreach program and any recommendations for
administrative and legislative actions necessary to carry out the
purposes of this subsection.

The Committee urges the Secretary, in addition to overseeing the
minority outreach efforts of participating jurisdictions, to reaffirm
the Department's commitment to include minorities and women in it's
contracting activities as prescribed under existing federal law.

The conferees recognized that minorities and women have historically
been disadvantaged and denied access to federal, state and local
contracting opportunities in the construction, real estate, financial
and legal service industries. The conferees also recognized that this
historical practice, in conjunction with other impediments to economic
and social opportunity, has contributed to the disproportionate
representation of minorities and women in poverty. The conferees urge
the Secretary to work towards eradicating any historical discriminatory
contracting practices in the construction, real estate, financial and
legal services industries and to affirmatively foster participation by
minorities and women in such industries. The conferees recognize that
only through meaningful economic opportunity and participation can
genuine empowerment occur. The conference report contains the Senate
provision.

Nehemiah program: The House amendment contained a provision not included
in the Senate bill that would authorize $100,000,000 in fiscal year 1991
for Nehemiah housing opportunity grants. The Senate bill contained a
provision that would extend the Nehemiah program until September 30,
1991, but authorized no funds and prohibited any new grants or loans
from being made under the Nehemiah program after October 1, 1990. The
conference report contains the Senate provision to terminate the
Nehemiah program, permitting no new projects to be approved, except
those that receive firm commitment by October 1, 1991. Any recaptured
funds would be rescinded. The conferees believe that homeownership
assistance provided under the Nehemiah program is an eligible activity
under the HOME program.

Credit Enhancement: The Senate bill contained a provision not included
in the House amendment that would have created a special commission to
explore ways in which federal credit enhancement could be provided more
effectively in conjunction with other forms of federal housing
assistance. The conference report contains the Senate provision with an
amendment to have the study carried out by GAO.

Repeal of existing housing programs

The Senate bill contained a provision that was not included in the House
amendment that would terminate grants for new construction and
substantial rehabilitation in fiscal year 1991 under the rental
rehabilitation; Section 312 loans; Nehemiah Housing Opportunity Grants
program; moderate rehabilitation; except where funds are allocated under
this authority for single-room occupancy dwellings as authorized by
title IV of the Stewart B. McKinney Homeless Assistance Act; Urban
Homesteading; Congregate Housing Services; Housing Counseling (Sec.
106); lower income public housing projects; and HODAG. The conference
report contains the Senate provision amended to repeal the following
existing housing programs as of fiscal year 1992: grants for new
construction and substantial rehabilitation under the rental
rehabilitation; Section 312 loans; Nehemiah Housing Opportunity Grants
program; moderate rehabilitation, except where funds are allocated under
this authority for single-room occupancy dwellings as authorized by
title IV of the Stewart B. McKinney Homeless Assistance Act; and Urban
Homesteading.

The conference report contains a provision requiring that any amounts
received on or after October 1, 1991, as repayments or recaptures in
connection with the programs referred to in subsection (a) and any other
amounts for such programs that are unobligated on or after such date
shall be paid into the general fund of the Treasury.