TITLE-VII -- Rural Housing


Purpose Clause: The Senate bill contained a provision not included in
the House amendment that established purposes of the title to reaffirm
the national commitment to expand affordable housing in rural areas; to
promote full use of the Section 502 program by very low income people
through a partially deferred mortgage program; and to improve the
quality of affordable housing in underserved rural areas with high
concentrations of poverty and substandard housing. The conference report
does not contain the Senate provision, except to the extent that the
purpose of serving underserved areas has been amended and inserted under
the section titled Underserved Areas.

Authorizations

Loan insurance and loan guarantee: The House amendment contained a
provision that provided the Secretary of Agriculture with aggregate loan
insurance and guarantee authority of $2,091,200,000 for FY 1991. The
Senate bill contained a provision that provided aggregate amounts
including: aggregate loan insurance and guarantee authority of
$2,160,000,000 for FY 1991; $2,246,400,000 for FY 1992; and
$2,336,256,000 for FY 1993. The conference report contains an
authorization for aggregate loan insurance and guarantee authority of
$2,125,800,000 for FY 1991 and $2,217,150,000 for FY 1992.

Section 502: The House amendment contained a provision that authorized
Section 502 loans at $1,325,000,000 for FY 1991. The Senate bill
contained a provision that authorized Section 502 loans at
$1,457,465,000 for FY 1991; $1,515,764,000 for FY 1992; and
$1,576,394,000 for FY 1993. The conference report contains an
authorization for Section 502 loans at $1,391,300,000 for FY 1991 and
$1,451,100,000 for FY 1992.

The House amendment contained a provision not included in the Senate
bill that authorized a new loan guarantee program for low and moderate
income borrowers. The conference report contains an authorization for
502(h) at such sums as are appropriated. The committee's intent for
providing a separate authorization for 502(h) is to insure that funds
appropriated under this new program for low and moderate income
borrowers do not count under the authorization ceiling for insured and
direct loans for low income borrowers, as authorized under 502.

Section 504: The House amendment contained a provision that authorized
Section 504 improvement loans at $12,000,000 in FY 1991. The Senate bill
contained a provision that authorized Section 504 improvement loan at
$11,715,000 for FY 1991; $12,184,000 for FY 1992; and $12,671,000 for
FY 1993. The conference report contains an authorization for Section 504
loans at $11,900,000 for FY 1991 and $12,400,000 for FY 1992.

Section 514: The House amendment contained a provision that authorized
Section 514 farm labor housing loans at $12,000,000 for FY 1991. The
Senate bill contained a provision that authorized Section 514 farm labor
housing loans at $11,870,000 for FY 1991, $12,344,000 for FY 1992 and
$12,839,000 for FY 1993. The conference report contains an authorization
for Section 514 loans at $12,000,000 for FY 1991 and $12,500,000 for FY
1992.

Section 515: The House amendment contained a provision that authorized
Section 515 rental housing loans at $740,200,000 for FY 1991. The Senate
bill contained a provision that authorized Section 515 rental housing
loans at $677,840,000 for FY 1991, $704,954,000 for FY 1992 and
$733,152,000 for FY 1993. The conference report contains an
authorization for Section 515 loans at $709,000,000 for FY 1991 and
$739,500,000 for FY 1992.

Section 523 mutual housing: The House amendment contained a provision
that authorized Section 523(b)(1)(B) mutual housing and self-help loans
at $1,000,000 for FY 1991. The Senate bill contained a provision that
authorized Section 523(b)(1) mutual housing and self-help loans at
$520,000 for FY 1991, $540,000 for FY 1992 and $562,000 for FY 1993. The
conference report contains an authorization for Section 523 loans at
$800,000 for FY 1991 and $800,000 for FY 1992.

Section 524: The House amendment contained a provision that authorized
Section 524 site loans at $1,000,000 for FY 1991. The Senate bill
contained a provision that authorized Section 524 site loans at $590,000
for FY 1991, $614,000 for FY 1992 and $638,000 for FY 1993. The
conference report contains an authorization for Section 524 loans at
$800,000 for FY 1991 and $850,000 for FY 1992.

Authorizations for appropriations

Section 502(f)(1): The House amendment contained a provision not
included in the Senate bill to finance the difference between the
appraised value and the costs of land and building for single family new
houses in remote rural areas. The conference report contains a new grant
authority at $1,000,000 for FY 1991 and $1,100,000 for FY 1992.

Section 504: The House amendment contained a provision that authorized
Section 504 grants at $18,000,000 for FY 1991. The Senate bill contained
a provision that authorized Section 504 at $19 million for FY 1991;
$19,760,000 for FY 1992 and $20,550,000 for FY 1993. The conference
report contains an authorization for Section 504 grants of $20,200,000
for FY 1991 and $21,100,000 for FY 1992.

Section 509(c): The House amendment contained a provision that provided
grants for correcting defective housing under Section 509(c) in the
amount of $1,000,000 for FY 1991. The Senate bill contained a provision
that provided such grants under Section 509(c) in the amount of $520,000
for FY 1991, $540,000 for FY 1992, and $562,000 for FY 1993. The
conference report contains an authorization for Section 509(c) of
$550,000 for FY 1991 and $600,000 for FY 1992.

Section 511: The Senate bill contained a provision not included in the
House amendment that allocated such sums as are necessary to meet notes
and other obligations equal to the aggregate of contributions and
credits on principal due on Section 503 loans and any interest due on
similar notes or other obligations. The conference report contains the
Senate provision.

Section 516: The House amendment contained a provision that authorized
Section 516(a-j) farm labor rental assistance at $21,296,000 for FY
1991. The Senate bill contained a provision that authorized Section
516(a-j) at $20,340,000 for FY 1991, $21,154,000 for FY 1992 and $22
million for FY 1993. The conference report contains an authorization for
Section 516 at $20,900,000 for FY 1991 and $21,700,000 for FY 1992.

The House amendment contained a provision not included in the Senate
bill that provided grants for the construction, rehabilitation, and
acquisition of housing for migrant farmworkers and rural homeless. The
conference report contains an authorization for this new provision under
516(k) at $10,000,000 for FY 1991 and $10,500,000 for FY 1992.

Section 523(f): The House amendment contained a provision that
authorized Section 523(f) mutual and self-help housing grants at
$8,979,000 for FY 1991. The Senate bill contained a provision that
authorized Section 523(f) at $14,340,000 for FY 1991, $14,914,000 for
FY 1992 and $15,510,000 for FY 1993. The conference report contains an
authorization for Section 523(f) at $13,400,000 for FY 1991 and
$13,900,000 for FY 1992.

Section 533: The House amendment contained a provision that authorized
Section 533 housing preservation grants at $29,906,000 for FY 1991. The
Senate bill contained a provision that authorized Section 533 at
$25,800,000 in FY 1991; $26,832,000 for FY 1992; and $27,906,000 for FY
1993. The conference report contains an authorization for Section 533
at $29,600,000 for FY 1991 and $30,800,000 for FY 1992.

Rental assistance payment contracts: The House amendment contained a
provision that authorized Section 521 rental assistance payment
contracts to total $400,000,000 for FY 1991. The Senate bill contained
a provision that authorized rental assistance up to $395,000,000 for FY
1991; $410,800,000 for FY 1992; and $427,232,000 for FY 1993. The
conference report contains an authorization for Section 521 at
$397,000,000 for FY 1991 and $414,100,000 for FY 1992.

Supplemental rental assistance contracts: The House amendment contained
a provision not included in the Senate bill that authorized supplemental
rental assistance contracts to total $5,200,000 for FY 1991. The
conference report contains the House provision with an amendment to
provide an additional authorization for FY 1992 of $5,500,000.

Extension of authority: The Senate bill contained a provision not
included in the House amendment that extended rural rental
rehabilitation demonstration under Section 17 of the 1937 Act until
September 30, 1992. The conference report does not contain the Senate
provision. The conferees intend that rental rehabilitation activities
in rural areas be undertaken through the housing preservation grant
program which FmHA has yet to implement for rental properties.

The House amendment contained a provision that extended Section
515(b)(4) rental housing loan authority and Section 523 mutual and
self-help loan authority until September 30, 1991. The Senate bill
contained a provision that extended Section 515 loan authority and
Section 523 mutual and self-help loan authority until September 30,
1993. The conference report contains the House provision.

Effect of foster care children in determination of family composition
and size: The House amendment contained a provision not included in the
Senate bill that establishes that a child's temporary absence from a
home due to placement in foster care would not affect the family
composition and size. The conference report contains the House
provision.

Escrow accounts: The Senate bill contained a provision not included in
the House amendment that required the Secretary to pay interest rates
on escrow accounts comparable to conventional lenders where the state
prescribes interest to be paid. The conference report contains the
Senate provision.

Remote rural areas: The House amendment contained a provision not
included in the Senate bill that required the Secretary to consider the
actual cost of land and buildings as sufficient security for a Section
502 home loan in a remote rural area or for a borrower who lives or
works in a remote rural area. The conference report contains the House
provision with an amendment which provides for a grant program, subject
to appropriations, to make up the difference between the appraised value
and the costs of land and building for single-family new houses in
remote rural areas.

The House amendment contained a provision not included in the Senate
bill that prohibited the Secretary from refusing to make or insure any
FmHA Section 502 loans on the basis that the housing involved is located
in an area that is excessively rural in character or excessively remote.
The amendment made by this section would apply with respect to
classification of rural areas for fiscal year 1991 and after. The
conference report contains the House provision. The conferees are aware
that there is a legitimate concern that security in remote rural areas
may not be sufficient for the federal mortgage. In such situations and
where the appraised value of a home is less than the cost of land and
construction, the conferees intend that the Secretary provide grants for
the difference between the appraised value and cost. The Secretary is
directed to promulgate interim rules within 120 days of enactment.

Deferred mortgage program: The House amendment contained a provision
that permitted the Secretary to defer Section 502 loan payments on a
demonstration basis for families who do not have sufficient income to
repay Section 502 loans but are otherwise qualified under Section 502.
The Secretary could defer mortgage payments beyond the affordable amount
at 1% interest, but no deferred payment could exceed 50% of the amount
of the payment due at 1% interest. Deferred mortgages would return to
normal payment status when the borrower's ability to repay improves and
deferred amounts are subject to recapture. Subject to appropriations,
no more than 10% of the amount approved for Section 502 loans would be
authorized to be used for deferred mortgages in FY 1991.

The Senate bill contained a similar provision that provided for a
deferral of not more than 20% of principal if (1) the borrowers reside
in a state where 10% or more of set-asides have not been obligated since
11/30/83; (2) the deferral is necessary to enable the borrower to make
payments and the borrower can be expected to amortize fully deferred
principal over the remaining life of the loan. Any increases in mortgage
payments would be applied first to repayment of deferred principal with
interest and then to an increase in interest on the loan. Interest on
deferred principal would remain at 1% until the deferral has been repaid
in full.

The conference report contains the House provision with an amendment
which provides authority in fiscal years 1991 and 1992 for FmHA to defer
up to 25 percent of Section 502 mortgage payments at 1 percent interest
for very-low-income families or persons otherwise deemed unable to
afford the regular payment. In addition, the committee adopted technical
amendments recommended by FmHA. In implementing this program the
Secretary shall promulgate interim rules no later than 120 days after
enactment, and shall provide the authorizing committees with a
preliminary report on the demonstration results no later than 90 days
prior to the end of fiscal year 1992 and a final report no later than
120 days after the end of that fiscal year.

Section 502 loan guarantee program: The House amendment contained a
provision not included in the Senate bill with respect to the Section
502 loan guarantee program.

The House provision established findings and purposes, and amended the
existing Section 502 FmHA program by authorizing for up to 100% of the
loan amount, loan guarantees for moderate-income borrowers whose incomes
do not exceed area median incomes.

The conference report contains the House provisions amended to provide
a separate authorization. This new subsection directs the Secretary to
establish a program for the guarantee of single-family housing loans and
provides in part that "loans shall be guaranteed in an amount equal to
90 percent of the loan." The conferees intend by this language to give
the agency flexibility in the use of different methods of structuring
its guarantees, so long as the agreement would result in the Secretary
bearing 90 percent of the loss of the total amount of the total of the
loan so guaranteed. For example, the Secretary might construct a system
in which 100 percent of the first portion of the loss would be borne by
the Secretary and a lesser percentage of the remaining loss would be
repaid to the lender. We encourage the Secretary to consult with
interested groups in the private sector to determine how best to
construct the guarantee program so as to create mortgage-backed
securities which will be attractive to investors and thus maximize the
capital available flowing through to finance homes for moderate and low
income borrowers.

Foreclosure procedures:  The House amendment contained a provision not
included in the Senate bill that required the Secretary of Agriculture
to follow the mortgage foreclosure procedures of the state where a
property is located to the extent that the state's procedures are more
favorable to the borrower than the procedures that the Secretary would
otherwise follow when foreclosing a mortgage.  The conference report
contains the House provision.

Housing in underserved areas: The House amendment contained a provision
that required the Secretary of Agriculture to designate 50 counties and
communities in FY 1991 and 100 counties and communities in FY 1992 as
targeted underserved areas that have severe unmet housing needs. The
Senate bill contained a similar provision except that the Secretary
would be authorized to designate 100 underserved counties in FY 1991 and
1992. The conference report contains the Senate provision with an
amendment to include purposes for the program which highlight the lower
Mississippi Delta region and incorporate provisions related to colonias
which are deemed to be underserved areas in this section of the
conference report.

Definition of underserved areas: The House provision defined underserved
areas as those which over the last 10 years have received a
substantially lower than average FmHA assistance than other counties and
communities in the state and have 20% or more of their population at or
below poverty level and 10% or more in substandard housing. The Senate
bill defined eligible counties as those where between 1986-1988, the
number of FmHA assisted units for families below 80% of median is less
than the % assisted in the state and those where there is a high
combined number of rural households below 50% of median as compared to
the county and number of substandard housing compared to the county. The
conference report contains the House provision with an amendment to
consider the previous 5 years funding rather than 10 years in order to
reflect more accurately the level of assistance now being provided in
each area.

Preference: The House provision established preferences for counties
within the lower Mississippi delta. The conference report contains the
House provision with an amendment to replace the preference as stated
with language that gives preference to projects in designated
underserved counties that have a poverty rate of 28% or greater and a
substandard housing rate of 13% or greater. The conferees intend that
FmHA will redesignate these counties as of the 1990 Census. To ensure
the greatest possible benefit to all eligible counties, the conferees
expect that FmHA will designate these underserved areas on a rotating
funding basis so that all eligible counties have an opportunity to
utilize this program before any designated county is funded for a second
time.

Funding set aside for targeted underserved areas: The House provision
required the Secretary to set aside and reserve 3.5% of the aggregate
amount of rural housing lending authority in FY 1991 and 5% in FY 1992
for such designated areas. The Senate bill would establish set-asides
for targeted areas as: $25 million for Section 515, $40 million for
Section 502 and $1 million each for Section 504 loans and grants in FYs
1991, 1992, 1993. The conference report contains the House provision
with an amendment to eliminate the set-aside for the Lower Mississippi
Delta and to include colonias as an eligible area.

Colonias: The House amendment included a provision that was not included
in the Senate bill that would give priority within a state's allocation
for applications serving colonias in the four border states. Colonias
would receive priority for all FmHA Title V funds, without limitation
to a state's allocation. The conferees consolidated a version of this
provision into the Underserved Area program. California, New Mexico,
Arizona, and Texas would each be required to give priority on 5% of
their state's allocation for approvable applications serving colonias
if the state has not used its entire allocation during the previous two
fiscal years. Those border states that have used their entire state
allocation of FmHA funding during the two previous fiscal years would
be eligible to participate in the Underserved Areas program for purposes
of assisting colonias. This funding would be in addition to any
designated counties in the state. In fact, approvable applications
serving colonias would receive a priority up to the amount equal to 5%
of the state's allocation from which the application was submitted.

Reallocation: The House provision provided that the preference for the
Lower Mississippi Delta terminate on August 1 of the fiscal year and the
unused funds be available to all underserved areas. Any assistance
reallocated on August 1 that is unused on September 1 of a fiscal year
shall be reallocated under the laws and regulations of the applicable
FmHA programs, notwithstanding this provision. The Senate bill made the
unused amounts subject to pooling procedures established by the
Secretary. The conference report contains the House provision with an
amendment to delete references to the Lower Mississippi Delta region,
include reallocations for the colonias, and give the Secretary the
authority to design a reallocation procedure rather than specifying
dates in legislative language. The committee's intent is to insure that
eligible applicants will have a reasonable opportunity to take full
advantage of the reallocated funds while giving all applicants ample
time to participate prior to reallocation.

Preproject planning assistance: The House provision authorized the
Secretary to provide advances to nonprofit organizations and public
entities for 80% of the customary costs of preparing and submitting
housing applications. The Senate bill provided project preparation
grants rather than repayable advances.

The House provision required that repayments be made from loan proceeds
but could be deferred or waived or could be forgiven. The Senate bill
required the Secretary to adjust loan amount to reflect the grant.

The House amendment contained a provision not included in the Senate
bill that required the Secretary to establish guidelines for the
application which would be required to include a budget and
documentation that funds required for the project but not to be provided
by the Secretary would be available.

The House amendment contained a provision requiring the Secretary to
approve, or provide a written decision, regarding loans within 60 days
of receipt of the applications.

The House provision required that preferences be given to applications
made with advances or to residents of underserved areas. It would
establish applicant eligibility for public and private nonprofit
organizations.

The conference report contains the Senate provision with an amendment
to add the requirement that the Secretary establish guidelines for the
application, including applicant eligibility, and to provide decisions
within 60 days of application.

Rural Housing Inventory: The House amendment contained a provision not
included in the Senate bill that provided authority to transfer Section
502 inventory property as rental projects under Section 514. The
conference report contains the House provision.

Appeal rights: The Senate bill contained a provision not included in the
House amendment that prohibited the Secretary from excluding from the
requirements for written notice and appeal decisions that are not based
on objective standards contained in published regulations. The
conference report contains the Senate provision.

Section 515 loans

Equity take out loan cap: The House amendment contained a provision not
included in the Senate bill that required that equity takeout loans be
limited by the appraised value of the property, not the original
mortgage amount for post 12/15/89 loans. The conference report contains
the House provision.

Applicability of equity takeout loan account assessment to low income
tenants: The House amendment contained a provision that exempted from
the annual assessment for reserve account purposes, units which are
occupied by low income tenants or those paying in excess of 30% of their
income. The Senate bill contained a provision that required new moderate
and assisted low income tenants to pay basic rent plus yearly $2.00
assessments. New unassisted but eligible low income tenants would pay
only the basic rent plus $2.00. The conference report contains the House
provision.

Effective date of HUD Reform for equity take out loans: The House
amendment contained a provision not included in the Senate bill that
changed the effective date of HUD Reform equity takeout provisions from
180 days after enactment to 12/15/89. The conference report contains the
House provision. This provision contains technical amendments to the
Department of Housing and Urban Development Reform Act of 1989 related
to the prohibition of prepayment of new FmHA Section 515 rural rental
housing loans and the authority provided the Secretary to guarantee
supplemental equity takeout loans after the 20th anniversary of a
project.

It was the intent of the 1989 Act and is the intent of this Act that the
Secretary is expected to approve and guarantee the equity takeout loans
once the conditions and determinations required by the 1989 Act are
satisfied. The requirements are similar to and consistent with the
prepayment provisions of the Housing and Community Development Act of
1987 which, in the Committee's view, have worked very well.

The FmHA borrower should expect the timely processing and approval of
guaranteed equity takeout loans after the specified requirements of the
legislation have been met.

Reuse of Section 515 loan authority: The Senate bill contained a
provision not included in the House amendment that provided that amounts
appropriated for Section 515 shall remain available until expended. The
conference report contains the Senate provision.

Section 515 loan assumption: The House amendment contained a provision
not included in the Senate provision that permitted assumption or
transfer of Section 515 loan obligations. The conference report contains
the House provision.

The House amendment contained a provision that allowed transfer of
Section 515 loan obligation authority without regard to fiscal year
limitations. The Senate bill contained a similar provision making funds
eligible until expended. The conference report contains the Senate
provision amended to blend with the House provision regarding the
assumption or transfer of Section 515 loan obligations.

Nonprofit set-aside: The Senate bill contained a provision not included
in the House amendment that authorized the Secretary to set aside 7% in
FY 1991, 8% in FY 1992, and 10% in FY 1993 of funds for Section 515
projects for nonprofits sponsors. Any unused funds would be subject to
pooling. The conference report contains the Senate provision with an
amendment which reserves 7% in FY 1991 and 9% in FY 1992 of Section 515
funds for nonprofit sponsors. Nonprofit sponsors are those organizations
which are exempt from federal taxes under section 501(c)(3) and section
501(c)(4) of the Internal Revenue Code and whose principle purposes
include the planning, development, and management of low income housing.
Such sponsors include private, nonprofit organizations as well as
consumer cooperatives and Indian tribes. The committee amended the
Senate provision by establishing that only organizations that are wholly
owned and operated by a nonprofit group may participate. It is the
committee's intent to avoid any opportunity for other eligible
organizations under 515 to abuse the set aside by creating nonprofit
sponsors of their own with which to co-venture.

The conference report also establishes a method for the administration
of the set aside. The greater of the percentage to be set aside or
$750,000 will be available in each state. For those states in which the
percentage to be set aside is less than $750,000, that amount will be
pooled at the national office. Nonprofits from states affected will
compete for these funds. All set aside funds unobligated first must be
made available to all eligible applicants within a state and then
returned to the national pool. The committee's intent is to insure that
eligible applicants will have a reasonable opportunity to take full
advantage of the reallocated funds while giving all applicants ample
time to participate prior to reallocation.

The conferees recognize that many nonprofit organizations have the
capability to plan, develop, and manage rural rental housing projects.
However, the conferees understand that because of the extensive backlog
of eligible applications, there is routinely a two to three year waiting
period before receiving assistance. During this period a sponsor must
pay for technical and legal fees, as well as servicing cost related to
the building site for the project. Few nonprofit organizations have the
financial capability to absorb these costs for such an extended period
of time. As the demand for rural rental housing loans has increased in
recent years, nonprofit participation has declined.

The set aside will establish a minimum level of participation for
nonprofits. It will make it possible for those with minimal resources,
but with the ability to plan and carry out an eligible project, to
receive assistance.

The conferees note that the 1987 Housing Act provided FmHA with
authority to provide packaging fees for nonprofit organizations
preparing rural rental housing applications and expect FmHA to work to
coordinate such packaging assistance with the set aside.

Housing for rural homeless and migrant farmworker program: The House
amendment contained a provision not included in the Senate bill that
targeted assistance to rural homeless and migrant farmworkers by
providing financial assistance for affordable rental housing and related
facilities for migrant farmworkers and homeless individuals (and the
families of such individuals). The House provision authorizes
$10,000,000 for Fiscal Year 1991 for this program.

The conference report contains the House provision with an amendment
that only permits housing the homeless who are not migrants on an
emergency and temporary basis, in the off-season and requires FmHA to
complete a study regarding the extent of the problem of homelessness in
rural areas with recommendations for future legislation and programs.
This amends Section 516 of the Housing Act of 1949 with a separate
appropriation.

This provision is in response to two different, but complementary,
concerns. First, under current law, the Secretary may provide a grant
of up to 90% of the costs of developing housing for farm workers. The
remainder of the funds is to be provided through private credit. The
conferees have learned that, in reality, the split between grant and
loan amount for most projects has been 60% grant and 40% loan. This has
worked satisfactorily for farmworkers who occupy the housing for 10-12
months because such projects bring in adequate rental income to make the
units viable. However, this program has not been effective in creating
affordable housing opportunities for seasonal workers who may only
occupy the units for 2-4 months each year. Such housing is not available
under existing programs because the debt burden on such properties
require nearly year-round occupancy. Second, the conferees recognize the
increasing problem of homeless individuals and families in rural areas,
a problem which is not satisfactorily addressed by McKinney Act
assistance. In responding to this urgent need, the conference committee
expects that the housing built for seasonal workers under this provision
will be made available as shelter on a temporary emergency basis.

Rural area classification: The House amendment contained a provision not
included in the Senate bill that redefined rural and rural areas to mean
any open country or place, town, village or city which is not (except
in the case of Pajaro, California and Guadalupe, Arizona) part of or
associated with an urban area and which has: (1) a population not in
excess of 10,000 if it is rural in character; or (2) a population in
excess of 10,000 but not in excess of 25,000, but must also be rural in
character, not contained within a standard metropolitan statistical
area; and has a serious lack of mortgage credit for lower and moderate
income households as determined by FmHA and HUD. The conference report
contains the House provision with an amendment to grandfather all
presently eligible communities under 20,000 which as a result of the
1990 census do not exceed 25,000 in population, are rural in character,
and have a serious lack of mortgage credit.

Use of rental overage: The Senate bill contained a provision not
included in the House amendment that permitted rent overages to be used
as supplemental rental assistance for very low and low income families
not receiving rental assistance. Subject to appropriations, the
conference report contains the Senate provision. However, the conferees
do not intend that the incremental appropriations for rental assistance
should be reduced to reflect these rental overages made available to
owners.

Housing preservation grants: The Senate bill contained a provision not
included in the House amendment that permitted the Secretary to retain
and reobligate grants obligated but not expended in any fiscal year. The
conference report contains the Senate provision.

Reciprocity in approval of housing subdivisions among federal agencies:
The House amendment contained a provision not included in the Senate
bill that extended for 6 months the required HUD acceptance of VA
certificate of reasonable value as approval of an entire subdivision.
The conference report contains the House provision with a technical
amendment relating to a gap in applicability.

Technical amendments: The House amendment contained two technical
amendments not included in the Senate bill. The first defined
"assistance" in accountability provisions. It limited "assistance"
to grants, loans, etc., for original development costs, not subsequent
loans. It excluded equity takeout loans from accountability provisions
of HUD reform act. The second technical amendment that the House
amendment contained established a prepayment prohibition. It amended
prepayment prohibition before 50 years to apply only to new Section 515
loans not subsequent loans. The conference report contains the House
provisions.