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U.S. Code as of:
01/19/04
Section 1701x. Assistance with respect to housing for low- and moderate-income families
(a) Authorization to provide information, advice, and technical
assistance; scope of assistance; authorization of appropriations
(1) The Secretary is authorized to provide, or contract with
public or private organizations to provide, information, advice,
and technical assistance, including but not limited to -
(i) the assembly, correlation, publication, and dissemination
of information with respect to the construction, rehabilitation,
and operation of low- and moderate-income housing;
(ii) the provision of advice and technical assistance to public
bodies or to nonprofit or cooperative organizations with respect
to the construction, rehabilitation, and operation of low- and
moderate-income housing, including assistance with respect to
self-help and mutual self-help programs;
(iii) counseling and advice to tenants and homeowners with
respect to property maintenance, financial management, and such
other matters as may be appropriate to assist them in improving
their housing conditions and in meeting the responsibilities of
tenancy or homeownership; and
(iv) the provision of technical assistance to communities,
particularly smaller communities, to assist such communities in
planning, developing, and administering Community Development
Programs pursuant to title I of the Housing and Community
Development Act of 1974 [42 U.S.C. 5301 et seq.].
(2) The Secretary (A) shall provide the services described in
clause (iii) of paragraph (1) for homeowners assisted under section
235 of the National Housing Act [12 U.S.C. 1715z]; (B) shall, in
consultation with the Secretary of Agriculture, provide such
services for borrowers who are first-time homebuyers with
guaranteed loans under section 502(h) of the Housing Act of 1949
[42 U.S.C. 1472(h)]; and (C) may provide such services for other
owners of single family dwelling units insured under title II of
the National Housing Act [12 U.S.C. 1707 et seq.] or guaranteed or
insured under chapter 37 of title 38. For purposes of this
paragraph and clause (iii) of paragraph (1), the Secretary may
provide the services described in such clause directly or may enter
into contracts with, make grants to, and provide other types of
assistance to private or public organizations with special
competence and knowledge in counseling low- and moderate-income
families to provide such services.
(3) There is authorized to be appropriated for the purposes of
this subsection, without fiscal year limitation, such sums as may
be necessary; except that for such purposes there are authorized to
be appropriated $6,025,000 for fiscal year 1993 and $6,278,050 for
fiscal year 1994. Of the amounts appropriated for each of fiscal
years 1993 and 1994, up to $500,000 shall be available for use for
counseling and other activities in connection with the
demonstration program under section 152 of the Housing and
Community Development Act of 1992. Any amounts so appropriated
shall remain available until expended.
(b) Loans to nonprofit organizations or public housing agencies;
purpose and terms; repayment; authorization of appropriations;
deposit of appropriations in Low and Moderate Income Sponsor Fund
(1) The Secretary is authorized to make loans to nonprofit
organizations or public housing agencies for the necessary
expenses, prior to construction, in planning, and obtaining
financing for, the rehabilitation or construction of housing for
low or moderate income families under section 235 of the National
Housing Act [12 U.S.C. 1715z] or any other federally assisted
program. Such loans shall be made without interest and shall not
exceed 80 per centum of the reasonable costs expected to be
incurred in planning, and in obtaining financing for, such housing
prior to the availability of financing, including, but not limited
to, preliminary surveys and analyses of market needs, preliminary
site engineering and architectural fees, site acquisition,
application and mortgage commitment fees, and construction loan
fees and discounts. The Secretary shall require repayment of loans
made under this subsection, under such terms and conditions as he
may require, upon completion of the project or sooner, and may
cancel any part or all of a loan if he determines that it cannot be
recovered from the proceeds of any permanent loan made to finance
the rehabilitation or construction of the housing.
(2) The Secretary shall determine prior to the making of any loan
that the nonprofit organization or public housing agency meets such
requirements with respect to financial responsibility and stability
as he may prescribe.
(3) There are authorized to be appropriated for the purposes of
this subsection not to exceed $7,500,000 for the fiscal year ending
June 30, 1969, and not to exceed $10,000,000 for the fiscal year
ending June 30, 1970. Any amounts so appropriated shall remain
available until expended, and any amounts authorized for any fiscal
year under this paragraph but not appropriated may be appropriated
for any succeeding fiscal year.
(4) All funds appropriated for the purposes of this subsection
shall be deposited in a fund which shall be known as the Low and
Moderate Income Sponsor Fund, and which shall be available without
fiscal year limitation and be administered by the Secretary as a
revolving fund for carrying out the purposes of this subsection.
Sums received in repayment of loans made under this subsection
shall be deposited in such fund.
(c) Grants for homeownership counseling organizations
(1) In general
The Secretary of Housing and Urban Development may make grants
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(A) to nonprofit organizations experienced in the provision
of homeownership counseling to enable the organizations to
provide homeownership counseling to eligible homeowners; and
(B) to assist in the establishment of nonprofit homeownership
counseling organizations.
(2) Program requirements
(A) Applications for grants under this subsection shall be
submitted in the form, and in accordance with the procedures,
that the Secretary requires.
(B) The homeownership counseling organizations receiving
assistance under this subsection shall use the assistance only to
provide homeownership counseling to eligible homeowners.
(C) The homeownership counseling provided by homeownership
counseling organizations receiving assistance under this
subsection shall include counseling with respect to -
(i) financial management;
(ii) available community resources, including public
assistance programs, mortgage assistance programs, home repair
assistance programs, utility assistance programs, food
programs, and social services; and
(iii) employment training and placement.
(3) Availability of homeownership counseling
The Secretary shall take any action that is necessary -
(A) to ensure the availability throughout the United States
of homeownership counseling from homeownership counseling
organizations receiving assistance under this subsection, with
priority to areas that -
(i) are experiencing high rates of home foreclosure and any
other indicators of homeowner distress determined by the
Secretary to be appropriate;
(ii) are not already adequately served by homeownership
counseling organizations; and
(iii) have a high incidence of mortgages involving
principal obligations (including such initial service
charges, appraisal, inspection, and other fees as the
Secretary shall approve) in excess of 97 percent of the
appraised value of the properties that are insured pursuant
to section 203 of the National Housing Act [12 U.S.C. 1709];
and
(B) to inform the public of the availability of the
homeownership counseling.
(4) Eligibility for counseling
A homeowner shall be eligible for homeownership counseling
under this subsection if -
(A) the home loan is secured by property that is the
principal residence (as defined by the Secretary) of the
homeowner;
(B) the home loan is not assisted under title V of the
Housing Act of 1949 [42 U.S.C. 1471 et seq.]; and
(C) the homeowner is, or is expected to be, unable to make
payments, correct a home loan delinquency within a reasonable
time, or resume full home loan payments due to a reduction in
the income of the homeowner because of -
(i) an involuntary loss of, or reduction in, the employment
of the homeowner, the self-employment of the homeowner, or
income from the pursuit of the occupation of the homeowner;
or
(ii) any similar loss or reduction experienced by any
person who contributes to the income of the homeowner.
An applicant for a mortgage shall be eligible for homeownership
counseling under this subsection if the applicant is a first-time
homebuyer who meets the requirements of section 12852(b)(1) of
title 42 and the mortgage involves a principal obligation
(including such initial service charges, appraisal, inspection,
and other fees as the Secretary shall approve) in excess of 97
percent of the appraised value of the property and is to be
insured pursuant to section 203 of the National Housing Act [12
U.S.C. 1709].
(5) Notification of availability of homeownership counseling
(A) Notification of availability of homeownership counseling
(i) Requirement
Except as provided in subparagraph (C), the creditor of a
loan (or proposed creditor) shall provide notice under clause
(ii) to (I) any eligible homeowner who fails to pay any
amount by the date the amount is due under a home loan, and
(II) any applicant for a mortgage described in paragraph (4).
(ii) Content
Notification under this subparagraph shall -
(I) notify the homeowner or mortgage applicant of the
availability of any homeownership counseling offered by the
creditor (or proposed creditor);
(II) if provided to an eligible mortgage applicant, state
that completion of a counseling program is required for
insurance pursuant to section 203 of the National Housing
Act [12 U.S.C. 1709]; and
(III) notify the homeowner or mortgage applicant of the
availability of homeownership counseling provided by
nonprofit organizations approved by the Secretary and
experienced in the provision of homeownership counseling,
or provide the toll-free telephone number described in
subparagraph (D)(i).
(B) Deadline for notification
The notification required in subparagraph (A) shall be made -
(i) in a manner approved by the Secretary; and
(ii) before the expiration of the 45-day period beginning
on the date on which the failure referred to in such
subparagraph occurs.
(C) Notification
Notification under subparagraph (A) shall not be required
with respect to any loan for which the eligible homeowner pays
the amount overdue before the expiration of the 45-day period
under subparagraph (B)(ii).
(D) Administration and compliance
The Secretary shall, to the extent of amounts approved in
appropriation Acts, enter into an agreement with an appropriate
private entity under which the entity will -
(i) operate a toll-free telephone number through which any
eligible homeowner can obtain a list of nonprofit
organizations, which shall be updated annually, that -
(I) are approved by the Secretary and experienced in the
provision of homeownership counseling; and
(II) serve the area in which the residential property of
the homeowner is located;
(ii) monitor the compliance of creditors with the
requirements of subparagraphs (A) and (B); and
(iii) report to the Secretary not less than annually
regarding the extent of compliance of creditors with the
requirements of subparagraphs (A) and (B).
(E) Report
The Secretary shall submit a report to the Congress not less
than annually regarding the extent of compliance of creditors
with the requirements of subparagraphs (A) and (B) and the
effectiveness of the entity monitoring such compliance. The
Secretary shall also include in the report any recommendations
for legislative action to increase the authority of the
Secretary to penalize creditors who do not comply with such
requirements.
(6) Definitions
For purposes of this subsection:
(A) The term "creditor" means a person or entity that is
servicing a home loan on behalf of itself or another person or
entity.
(B) The term "eligible homeowner" means a homeowner eligible
for counseling under paragraph (4).
(C) The term "home loan" means a loan secured by a mortgage
or lien on residential property.
(D) The term "homeowner" means a person who is obligated
under a home loan.
(E) The term "residential property" means a 1-family
residence, including a 1-family unit in a condominium project,
a membership interest and occupancy agreement in a cooperative
housing project, and a manufactured home and the lot on which
the home is situated.
(7) Regulations
The Secretary shall issue any regulations that are necessary to
carry out this subsection.
(8) Authorization of appropriations
There are authorized to be appropriated to carry out this
section $7,000,000 for fiscal year 1993 and $7,294,000 for fiscal
year 1994, of which amounts $1,000,000 shall be available in each
such fiscal year to carry out paragraph (5)(D). Any amount
appropriated under this subsection shall remain available until
expended.
(d) Prepurchase and foreclosure-prevention counseling demonstration
(1) Purposes
The purpose of this subsection is -
(A) to reduce defaults and foreclosures on mortgage loans
insured under the Federal Housing Administration single family
mortgage insurance program;
(B) to encourage responsible and prudent use of such
federally insured home mortgages;
(C) to assist homeowners with such federally insured
mortgages to retain the homes they have purchased pursuant to
such mortgages; and
(D) to encourage the availability and expansion of housing
opportunities in connection with such federally insured home
mortgages.
(2) Authority
The Secretary of Housing and Urban Development shall carry out
a program to demonstrate the effectiveness of providing
coordinated prepurchase counseling and foreclosure-prevention
counseling to first-time homebuyers and homeowners in avoiding
defaults and foreclosures on mortgages insured under the Federal
Housing Administration single family home mortgage insurance
program.
(3) Grants
Under the demonstration program under this subsection, the
Secretary shall make grants to qualified nonprofit organizations
under paragraph (4) to enable the organizations to provide
prepurchase counseling services to eligible homebuyers and
foreclosure-prevention counseling services to eligible
homeowners, in counseling target areas.
(4) Qualified nonprofit organizations
The Secretary shall select nonprofit organizations to receive
assistance under the demonstration program under this subsection
based on the experience and ability of the organizations in
providing homeownership counseling and their ability to provide
community-based prepurchase and foreclosure-prevention counseling
under paragraphs (5) and (6) in a counseling target area. To be
eligible for selection under this paragraph, a nonprofit
organization shall submit an application containing a proposal
for providing counseling services in the form and manner required
by the Secretary.
(5) Prepurchase counseling
(A) Mandatory participation
Under the demonstration program, the Secretary shall require
any eligible homebuyer who intends to purchase a home located
in a counseling target area and who has applied for (as
determined by the Secretary) a qualified mortgage (as such term
is defined in paragraph (9)) on such home that involves a
downpayment of less than 10 percent of the principal obligation
of the mortgage, to receive counseling prior to signing of a
contract to purchase the home. The counseling shall include
counseling with respect to -
(i) financial management and the responsibilities involved
in homeownership;
(ii) fair housing laws and requirements;
(iii) the maximum mortgage amount that the homebuyer can
afford; and
(iv) options, programs, and actions available to the
homebuyer in the event of actual or potential delinquency or
default.
(B) Eligibility for counseling
A homebuyer shall be eligible for prepurchase counseling
under this paragraph if -
(i) the homebuyer has applied for a qualified mortgage;
(ii) the homebuyer is a first-time homebuyer; and
(iii) the home to be purchased under the qualified mortgage
is located in a counseling target area.
(6) Foreclosure-prevention counseling
(A) Availability
Under the demonstration program, the Secretary shall make
counseling available for eligible homeowners who are 60 or more
days delinquent with respect to a payment under a qualified
mortgage on a home located within a counseling target area. The
counseling shall include counseling with respect to options,
programs, and actions available to the homeowner for resolving
the delinquency or default.
(B) Notification of delinquency
Under the demonstration program, the Secretary shall require
the creditor of any eligible homeowner who is delinquent (as
described in subparagraph (A)) to send written notice by
registered or certified mail within 5 days (excluding
Saturdays, Sundays, and legal public holidays) after the
occurrence of such delinquency -
(i) notifying the homeowner of the delinquency and the
name, address, and phone number of the counseling
organization for the counseling target area; and
(ii) notifying any counseling organization for the
counseling target area of the delinquency and the name,
address, and phone number of the delinquent homeowner.
(C) Coordination with emergency homeownership counseling
program
The Secretary may coordinate the provision of assistance
under subsection (c) of this section with the demonstration
program under this subsection.
(D) Eligibility for counseling
A homeowner shall be eligible for foreclosure-prevention
counseling under this paragraph if -
(i) the home owned by the homeowner is subject to a
qualified mortgage; and
(ii) such home is located in a counseling target area.
(7) Scope of demonstration program
(A) Designation of counseling target areas
The Secretary shall designate 3 counseling target areas (as
provided in subparagraph (B)), which shall be located in not
less than 2 separate metropolitan areas. The Secretary shall
provide for counseling under the demonstration program under
this subsection with respect to only such counseling target
areas.
(B) Counseling target areas
Each counseling target area shall consist of a group of
contiguous census tracts -
(i) the population of which is greater than 50,000;
(ii) which together constitute an identifiable
neighborhood, area, borough, district, or region within a
metropolitan area (except that this clause may not be
construed to exclude a group of census tracts containing
areas not wholly contained within a single town, city, or
other political subdivision of a State);
(iii) in which the average age of existing housing is
greater than 20 years; and
(iv) for which (I) the percentage of qualified mortgages on
homes within the area that are foreclosed exceeds 5 percent
for the calendar year preceding the year in which the area is
selected as a counseling target area, or (II) the number of
qualified mortgages originated on homes in such area in the
calendar year preceding the calendar year in which the area
is selected as a counseling target area exceeds 20 percent of
the total number of mortgages originated on residences in the
area during such year.
(C) Mortgage characteristics
In designating counseling target areas under subparagraph
(A), the Secretary shall designate at least 1 such area that
meets the requirements of subparagraph (B)(iv)(I) and at least
1 such area that meets the requirements of subparagraph
(B)(iv)(II).
(D) Expansion of target areas
The Secretary may expand any counseling target area during
the term of the demonstration program, if the Secretary
determines that counseling can be adequately provided within
such expanded area and the purposes of this subsection will be
furthered by such expansion. Any such expansion shall include
only groups of census tracts that are contiguous to the
counseling target area expanded and such census tract groups
shall not be subject to the provisions of subparagraph (B).
(E) Designation of control areas
For purposes of determining the effectiveness of counseling
under the demonstration program, the Secretary shall designate
3 control areas, each of which shall correspond to 1 of the
counseling target areas designated under subparagraph (A). Each
control area shall be located in the metropolitan area in which
the corresponding counseling target area is located, shall meet
the requirements of subparagraph (B), and shall be similar to
such area with respect to size, age of housing stock, median
income, and racial makeup of the population. Each control area
shall also comply with the requirements of subclause (I) or
(II) of subparagraph (B)(iv), according to the subclause with
which the corresponding counseling target area complies.
(8) Evaluation
Each organization providing counseling under the demonstration
program under this subsection shall maintain records with respect
to each eligible homebuyer and eligible homeowner counseled and
shall provide information with respect to such counseling as the
Secretary or the Comptroller General may require.
(9) Definitions
For purposes of this subsection:
(A) The term "control area" means an area designated by the
Secretary under paragraph (7)(E).
(B) The term "counseling target area" means an area
designated by the Secretary under paragraph (7)(A).
(C) The term "creditor" means a person or entity that is
servicing a loan secured by a qualified mortgage on behalf of
itself or another person or entity.
(D) The term "displaced homemaker" means an individual who -
(i) is an adult;
(ii) has not worked full-time, full-year in the labor force
for a number of years, but has during such years, worked
primarily without remuneration to care for the home and
family; and
(iii) is unemployed or underemployed and is experiencing
difficulty in obtaining or upgrading employment.
(E) The term "downpayment" means the amount of purchase price
of home required to be paid at or before the time of purchase.
(F) The term "eligible homebuyer" means a homebuyer that
meets the requirements under paragraph (5)(B).
(G) The term "eligible homeowner" means a homeowner that
meets the requirements under paragraph (6)(D).
(H) The term "first-time homebuyer" means an individual who -
(i) (and whose spouse) has had no ownership in a principal
residence during the 3-year period ending on the date of
purchase of the home pursuant to which counseling is provided
under this subsection;
(ii) is a displaced homemaker who, except for owning a
residence with his or her spouse or residing in a residence
owned by the spouse, meets the requirements of clause (i); or
(iii) is a single parent who, except for owning a residence
with his or her spouse or residing in a residence owned by
the spouse while married, meets the requirements of clause
(i).
(I) The term "home" includes any dwelling or dwelling unit
eligible for a qualified mortgage, and includes a unit in a
condominium project, a membership interest and occupancy
agreement in a cooperative housing project, and a manufactured
home and the lot on which the home is situated.
(J) The term "metropolitan area" means a standard
metropolitan statistical area as designated by the Director of
the Office of Management and Budget.
(K) The term "qualified mortgage" means a mortgage on a 1- to
4-family home that is insured under title II of the National
Housing Act [12 U.S.C. 1707 et seq.].
(L) The term "Secretary" means the Secretary of Housing and
Urban Development.
(M) The term "single parent" means an individual who -
(i) is unmarried or legally separated from a spouse; and
(ii)(I) has 1 or more minor children for whom the
individual has custody or joint custody; or
(II) is pregnant.
(10) Regulations
The Secretary may issue any regulations necessary to carry out
this subsection.
(11) Authorization of appropriations
There are authorized to be appropriated to carry out this
subsection $365,000 for fiscal year 1993 and $380,330 for fiscal
year 1994.
(12) Termination
The demonstration program under this subsection shall terminate
at the end of fiscal year 1994.
(e) Certification
(1) Requirement for assistance
An organization may not receive assistance for counseling
activities under subsection (a)(1)(iii), (a)(2), (c), or (d) of
this section, unless the organization provides such counseling,
to the extent practicable, by individuals who have been certified
by the Secretary under this subsection as competent to provide
such counseling.
(2) Standards and examination
The Secretary shall, by regulation, establish standards and
procedures for testing and certifying counselors. Such standards
and procedures shall require for certification that the
individual shall demonstrate, by written examination (as provided
under subsection (f)(4) of this section), competence to provide
counseling in each of the following areas:
(A) Financial management.
(B) Property maintenance.
(C) Responsibilities of homeownership and tenancy.
(D) Fair housing laws and requirements.
(E) Housing affordability.
(F) Avoidance of, and responses to, rental and mortgage
delinquency and avoidance of eviction and mortgage default.
(3) Encouragement
The Secretary shall encourage organizations engaged in
providing homeownership and rental counseling that do not receive
assistance under this section to employ individuals to provide
such counseling who are certified under this subsection or meet
the certification standards established under this subsection.
(f) Homeownership and rental counselor training and certification
programs
(1) Establishment
To the extent amounts are provided in appropriations Acts under
paragraph (7), the Secretary shall contract with an appropriate
entity (which may be a nonprofit organization) to carry out a
program under this subsection to train individuals to provide
homeownership and rental counseling and to administer the
examination under subsection (e)(2) of this section and certify
individuals under such subsection.
(2) Eligibility and selection
(A) Eligibility
To be eligible to provide the training and certification
program under this subsection, an entity shall have
demonstrated experience in training homeownership and rental
counselors.
(B) Selection
The Secretary shall provide for entities meeting the
requirements of subparagraph (A) to submit applications to
provide the training and certification program under this
subsection. The Secretary shall select an application based on
the ability of the entity to -
(i) establish the program as soon as possible on a national
basis, but not later than the date under paragraph (6);
(ii) minimize the costs involved in establishing the
program; and
(iii) effectively and efficiently carry out the program.
(3) Training
The Secretary shall require that training of counselors under
the program under this subsection be designed and coordinated to
prepare individuals for successful completion of the examination
for certification under subsection (e)(2) of this section. The
Secretary, in consultation with the entity selected under
paragraph (2)(B), shall establish the curriculum and standards
for training counselors under the program.
(4) Certification
The entity selected under paragraph (2)(B) shall administer the
examination under subsection (e)(2) of this section and, on
behalf of the Secretary, certify individuals successfully
completing the examination. The Secretary, in consultation with
such entity, shall establish the content and format of the
examination.
(5) Fees
Subject to the approval of the Secretary, the entity selected
under paragraph (2)(B) may establish and impose reasonable fees
for participation in the training provided under the program and
for examination and certification under subsection (e)(2) of this
section, in an amount sufficient to cover any costs of such
activities not covered with amounts provided under paragraph (7).
(6) Timing
The entity selected under paragraph (2)(B) to carry out the
training and certification program shall establish the program as
soon as possible after such selection, and shall make training
and certification available under the program on a national basis
not later than the expiration of the 1-year period beginning upon
such selection.
(7) Authorization of appropriations
There are authorized to be appropriated to carry out this
subsection $2,000,000 for fiscal year 1993 and $2,084,000 for
1994.
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