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US (United States) Code. Title 42. Chapter 8A: Slum clearance, urban renewal and farm housing

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-CITE-

42 USC Sec. 1484 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1484. Insurance of loans for housing and related facilities

for domestic farm labor

-STATUTE-

(a) Authorization; terms and conditions

The Secretary is authorized to insure and make commitments to

insure loans made by lenders other than the United States to the

owner of any farm or any association of farmers for the purpose of

providing housing and related facilities for domestic farm labor,

or to any Indian tribe for such purpose, or to any State (or

political subdivision thereof), or any broad-based public or

private nonprofit organization, or any limited partnership in which

the general partner is a nonprofit entity, or any nonprofit

organization of farmworkers incorporated within the State for the

purpose of providing housing and related facilities for domestic

farm labor any place within the State where a need exists. All such

loans shall be made in accordance with terms and conditions

substantially identical with those specified in section 1472 of

this title, except that -

(1) no such loan shall be insured in an amount in excess of the

value of the farm involved less any prior liens in the case of a

loan to an individual owner of a farm, or the total estimated

value of the structures and facilities with respect to which the

loan is made in the case of any other loan;

(2) no such loan shall be insured if it bears interest at a

rate in excess of 1 per centum per annum;

(3) out of interest payments by the borrower the Secretary

shall retain a charge in an amount not less than one-half of 1

per centum per annum of the unpaid principal balance of the loan;

(4) the insurance contracts and agreements with respect to any

loan may contain provisions for servicing the loan by the

Secretary or by the lender, and for the purchase by the Secretary

of the loan if it is not in default, on such terms and conditions

as the Secretary may prescribe; and

(5) the Secretary may take mortgages creating a lien running to

the United States for the benefit of the insurance fund referred

to in subsection (b) of this section notwithstanding the fact

that the note may be held by the lender or his assignee.

(b) Utilization of farm tenant mortgage insurance fund; additions

to and deposits in fund; deposits in Treasury

The Secretary shall utilize the insurance fund created by section

1005a of title 7 (!1) and the provisions of section 1005c(a), (b),

and (c) of title 7 (!1) to discharge obligations under insurance

contracts made pursuant to this section, and

(1) the Secretary may utilize the insurance fund to pay taxes,

insurance, prior liens, and other expenses to protect the

security for loans which have been insured hereunder and to

acquire such security property at foreclosure sale or otherwise;

(2) the notes and security therefor acquired by the Secretary

under insurance contracts made pursuant to this section shall

become a part of the insurance fund. Loans insured under this

section may be held in the fund and collected in accordance with

their terms or may be sold and reinsured. All proceeds from such

collections, including the liquidation of security and the

proceeds of sales, shall become a part of the insurance fund; and

(3) of the charges retained by the Secretary out of interest

payments by the borrower, amounts not less than one-half of 1 per

centum per annum of the unpaid principal balance of the loan

shall be deposited in and become a part of the insurance fund.

The remainder of such charges shall be deposited in the Treasury

of the United States and shall be available for administrative

expenses of the Farmers Home Administration, to be transferred

annually to and become merged with any appropriation for such

expenses.

incontestability

Any contract of insurance executed by the Secretary under this

section shall be an obligation of the United States and

incontestable except for fraud or misrepresentation of which the

holder of the contract has actual knowledge.

(d) Repealed. Pub. L. 96-153, title V, Sec. 501(b), Dec. 21, 1979,

93 Stat. 1133

(e) Administrative expenses

Amounts made available pursuant to section 1483 of this title

shall be available for administrative expenses incurred under this

section.

(f) Definitions

As used in this section -

(1) the term "housing" means (A) new structures (including

household furnishings) suitable for dwelling use by domestic farm

labor, and (B) existing structures (including household

furnishings) which can be made suitable for dwelling use by

domestic farm labor by rehabilitation, alteration, conversion, or

improvement;

(2) the term "related facilities" means (A) new structures

(including household furnishings) suitable for use as dining

halls, community rooms or buildings, or infirmaries, or for other

essential services facilities, and (B) existing structures

(including household furnishings) which can be made suitable for

the above uses by rehabilitation, alteration, conversion, or

improvement and (C) land necessary for an adequate site; and

(3) the term "domestic farm labor" means any person (and the

family of such person) who receives a substantial portion of his

or her income from primary production of agricultural or

aquacultural commodities or the handling of such commodities in

the unprocessed stage, without respect to the source of

employment, except that -

(A) such person shall be a citizen of the United States or a

person legally admitted for permanent residence;

(B) such term includes any person (and the family of such

person) who is retired or disabled, but who was domestic farm

labor at the time of retirement or becoming disabled; and

in farm labor housing, the Secretary shall make units available

for occupancy in the following order of priority:

(i) to active farm laborers (and their families);

(ii) to retired or disabled farm laborers (and their

families) who were active in the local farm labor market at

the time of retiring or becoming disabled; and

(iii) to other retired or disabled farm laborers (and their

families).

(g) Waiver of interest rate limitations

The Secretary may waive the interest rate limitation contained in

subsection (a)(2) of this section and the requirement of section

1471(c)(3) of this title in any case in which the Secretary

determines that qualified public or private nonprofit sponsors are

not currently available and are not likely to become available

within a reasonable period of time and such waiver is necessary to

permit farmers to provide housing and related facilities for

migrant domestic farm laborers, except that the benefits resulting

from such waiver shall accrue to the tenants, and the interest rate

on a loan insured under this section and for which the Secretary

permits such waiver shall be no less than one-eighth of 1 per

centum above the average interest rate on notes or other

obligations which are issued under section 1481 of this title and

have maturities comparable to such a loan.

(h) Determination of need for assistance

In making available assistance in any area under this section or

section 1486 of this title, the Secretary shall -

(1) in determining the need for the assistance, take into

consideration the housing needs only of domestic farm labor,

including migrant farmworkers, in the area; and

(2) in determining whether to provide such assistance, make

such determination without regard to the extent or nature of

other housing needs in the area.

(i) Domestic farm labor housing available for other families

Housing and related facilities constructed with loans under this

section may be used for tenants eligible for occupancy under

section 1485 of this title if the Secretary determines that -

(1) there is no longer a need in the area for farm labor

housing; or

(2) the need for such housing in the area has diminished to the

extent that the purpose of the loan, providing housing for

domestic farm labor, can no longer be met.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 514, as added Pub. L. 87-70,

title VIII, Sec. 804(a), June 30, 1961, 75 Stat. 186; amended Pub.

L. 88-560, title V, Sec. 502, Sept. 2, 1964, 78 Stat. 796; Pub. L.

90-448, title X, Sec. 1004, Aug. 1, 1968, 82 Stat. 553; Pub. L.

91-609, title VIII, Sec. 801(a)-(c), Dec. 31, 1970, 84 Stat. 1805,

1806; Pub. L. 95-128, title V, Sec. 505, Oct. 12, 1977, 91 Stat.

1140; Pub. L. 95-557, title V, Secs. 501(d), 504, Oct. 31, 1978, 92

Stat. 2111, 2112; Pub. L. 96-153, title V, Sec. 501(b), Dec. 21,

1979, 93 Stat. 1133; Pub. L. 96-399, title V, Sec. 507(b), Oct. 8,

1980, 94 Stat. 1670; Pub. L. 98-181, title V, Sec. 510, Nov. 30,

1983, 97 Stat. 1243; Pub. L. 100-242, title III, Secs. 305(a),

316(b), Feb. 5, 1988, 101 Stat. 1895, 1897; Pub. L. 100-628, title

X, Sec. 1043(a), Nov. 7, 1988, 102 Stat. 3273; Pub. L. 104-180,

title VII, Sec. 734(e)(1), Aug. 6, 1996, 110 Stat. 1603; Pub. L.

105-276, title V, Sec. 599C(d), Oct. 21, 1998, 112 Stat. 2661; Pub.

L. 106-569, title VII, Secs. 703, 708(b), Dec. 27, 2000, 114 Stat.

3013, 3018.)

-REFTEXT-

REFERENCES IN TEXT

Sections 1005a and 1005c(a), (b), and (c) of title 7, referred to

in subsec. (b), were repealed by section 341(a) of Pub. L. 87-128,

title III, Aug. 8, 1961, 75 Stat. 318 (set out as a note under

section 1921 of Title 7, Agriculture), which also provided that

references in other laws to the Bankhead-Jones Farm Tenant Act

shall be construed as referring to appropriate provisions of

section 1921 et seq. of Title 7. The fund established pursuant to

section 1005a of Title 7 was renamed the Agricultural Credit

Insurance Fund. See section 1929 of Title 7.

-COD-

CODIFICATION

Another section 801(b) of Pub. L. 91-609 amended section

1460(c)(1) of this title.

-MISC1-

AMENDMENTS

2000 - Subsec. (a). Pub. L. 106-569, Sec. 703, substituted

"limited partnership" for "nonprofit limited partnership" in first

sentence of introductory provisions.

Subsec. (j). Pub. L. 106-569, Sec. 708(b), struck out heading and

text of subsec. (j). Text read as follows: "Whoever, as an owner,

agent, or manger, or who is otherwise in custody, control, or

possession of property that is security for a loan made or insured

under this section willfully uses, or authorizes the use, of any

part of the rents, assets, proceeds, income, or other funds derived

from such property, for any purpose other than to meet actual or

necessary expenses of the property, or for any other purpose not

authorized by this subchapter or the regulations adopted pursuant

to this subchapter, shall be fined not more than $250,000 or

imprisoned not more than 5 years, or both."

1998 - Subsec. (a). Pub. L. 105-276 inserted ", or any nonprofit

limited partnership in which the general partner is a nonprofit

entity," after "private nonprofit organization" in first sentence.

1996 - Subsec. (j). Pub. L. 104-180 added subsec. (j).

1988 - Subsec. (f)(1). Pub. L. 100-242, Sec. 316(b), struck out

"and" at end.

Subsec. (f)(3). Pub. L. 100-242, Sec. 305(a), amended par. (3)

generally. Prior to amendment, par. (3) read as follows: "the term

'domestic farm labor' means persons who receive a substantial

portion (as determined by the Secretary) of their income as

laborers on farms situated in the United States, Puerto Rico, or

the Virgin Islands and either (A) are citizens of the United

States, or (B) reside in the United States, Puerto Rico, or the

Virgin Islands after being legally admitted for permanent residence

therein."

Subsec. (i). Pub. L. 100-628 added subsec. (i).

1983 - Subsec. (h). Pub. L. 98-181 added subsec. (h).

1980 - Subsec. (a). Pub. L. 96-399 inserted reference to Indian

tribe.

1979 - Subsec. (d). Pub. L. 96-153 repealed subsec. (d) which

provided for a maximum of $38,000,000 for the aggregate amount of

principal obligations of loans insured under this section.

1978 - Subsec. (d). Pub. L. 95-557, Sec. 501(d), substituted

"$38,000,000 (subject to approval in an appropriation Act)" for

"$25,000,000".

Subsec. (g). Pub. L. 95-557, Sec. 504, added subsec. (g).

1977 - Subsec. (f)(3). Pub. L. 95-128 extended definition of

"domestic farm labor" to include laborers on farms situated in

Puerto Rico and the Virgin Islands and the residents of the islands

after being legally admitted for permanent residence.

1970 - Subsec. (a). Pub. L. 91-609, Sec. 801(a), authorized

insurance of loans to broad-based nonprofit organizations and

nonprofit organizations of farmworkers incorporated within the

State and provided for housing and related facilities for domestic

farm labor any place within the State where need exists.

Subsec. (a)(2). Pub. L. 91-609, Sec. 801(b), substituted "1" for

"5" per centum.

Subsec. (f)(1), (2). Pub. L. 91-609, Sec. 801(c), substituted

"structures (including household furnishings)" for "structures" in

cls. (A) and (B).

1968 - Subsec. (f)(2). Pub. L. 90-448 included land necessary for

an adequate site within the definition of "related facilities".

1964 - Subsec. (f)(3). Pub. L. 88-560 included residents of the

United States after being legally admitted for permanent residence.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1472, 1479, 1480, 1483,

1486, 1487, 1490a, 1490j, 4851b, 8011, 13664 of this title.

-FOOTNOTE-

(!1) See References in Text note below.

-End-

-CITE-

42 USC Sec. 1485 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1485. Housing and related facilities for elderly persons and

families or other persons and families of low income

-STATUTE-

(a) Direct loans; authorization; terms and conditions; revolving

fund; appropriation

The Secretary is authorized to make loans to private nonprofit

corporations and consumer cooperatives and Indian tribes to provide

rental or cooperative housing and related facilities for elderly or

handicapped persons or families of low or moderate income or other

persons and families of low income in rural areas, in accordance

with terms and conditions substantially identical with those

specified in section 1472 of this title; except that -

(1) no such loan shall exceed the development cost or the value

of the security, whichever is less;

(2) such a loan may be made for a period of up to 30 years from

the making of the loan; and

(3) such a loan, when made to a consumer cooperative for

cooperative housing purposes, may, notwithstanding any other

provision of law, be made upon the condition that any person who

is admitted as an eligible member and tenant of the cooperative

may not subsequently be deprived of his membership or tenancy by

reason of his no longer meeting the income eligibility

requirements established by the Secretary.

There is authorized to be appropriated not to exceed $50,000,000,

which shall constitute a revolving fund to be used by the Secretary

in carrying out this subsection.

(b) Insurance of loans; authorization; terms and conditions;

utilization of Agricultural Credit Insurance Fund

The Secretary is authorized to insure and make commitments to

insure loans made to any individual, corporation, association,

trust, Indian tribe, or partnership to provide rental or

cooperative housing and related facilities for elderly or

handicapped persons or families or other persons and families of

moderate income in rural areas, in accordance with terms and

conditions substantially identical with those specified in section

1472 of this title; except that -

(1) no such loan shall exceed the development cost or the value

of the security, whichever is less;

(2) such a loan may be made for a period of up to 30 years from

the making of the loan, but the Secretary may provide for

periodic payments based on an amortization schedule of 50 years

with a final payment of the balance due at the end of the term of

the loan;

(3) for insuring such loans, the Secretary shall utilize the

Agricultural Credit Insurance Fund subject to all the provisions

of section 1929 of title 7 and the second and third sentences of

section 1928 (!1) of title 7, including the authority in section

1929(f)(1) (!1) of title 7 to utilize the insurance fund to make,

sell, and insure loans which could be insured under this

subsection; but the aggregate of the principal amounts of such

loans made by the Secretary and not disposed of shall not exceed

$10,000,000 outstanding at any one time; and the Secretary may

take liens running to the United States though the notes may be

held by other lenders;

(4) such a loan, when made to a consumer cooperative for

cooperative housing purposes, may, notwithstanding any other

provision of law, be made upon the condition that any person who

is admitted as an eligible member and tenant of the cooperative

may not subsequently be deprived of his membership or tenancy by

reason of his no longer meeting the income eligibility

requirements established by the Secretary;

(5) loans may be made to owners who are otherwise eligible

under this section to purchase and convert single-family

residences to rental units of two or more dwellings; and

(6) the Secretary may make a new loan to the current borrower

to finance the final payment of the original loan for an

additional period not to exceed twenty years, if -

(A) the Secretary determines -

(i) it is more cost-efficient and serves the tenant base

more effectively to maintain the current property than to

build a new property in the same location; or

(ii) the property has been maintained to such an extent

that it warrants retention in the current portfolio because

it can be expected to continue providing decent, safe, and

affordable rental units for the balance of the loan; and

(B) the Secretary determines -

(i) current market studies show that a need for low-income

rural rental housing still exists for that area; and

(ii) any other criteria established by the Secretary has

been met.

public agencies

With respect to a loan made or insured under subsection (a) or

(b) of this section, the Secretary is authorized to -

(1) make or insure an equity loan in the form of a supplemental

loan for the purpose of equity takeout to the owner of housing

financed with a loan made or insured under this section pursuant

to a contract entered into before December 15, 1989, for the

purpose of extending the affordability of the housing for low

income families or persons and very low-income families or

persons for not less than 20 years, except that such loan may not

exceed 90 percent of the value of the equity in the project as

determined by the Secretary;

(2) transfer and reamortize an existing loan in connection with

assistance provided under paragraph (1); and

(3) make or insure a loan to enable a nonprofit organization or

public agency to make a purchase described in section 1472(c)(5)

of this title.

(d) Construction requirements; detached units for cooperative

housing

No loan shall be made or insured under subsection (a) or (b) of

this section unless the Secretary finds that the construction

involved will be undertaken in an economical manner and will not be

of elaborate or extravagant design or materials. However,

specifically designed equipment required by elderly or handicapped

persons or families shall not be considered elaborate or

extravagant. A loan may be made or insured under subsection (a) or

(b) of this section with respect to detached units, including those

on scattered sites, for cooperative housing.

(e) Definitions

As used in this section -

(1) the term "housing" means new or existing housing suitable

for dwelling use by occupants eligible under this section, and

such term also means manufactured home rental parks where either

the lots or both the lots and the homes are available for use by

occupants eligible under this section; and such term also means

congregate housing facilities for elderly or handicapped persons

or families who require some supervision and central services but

are otherwise able to care for themselves; such housing for the

handicapped may be utilized in conjunction with educational and

training facilities;

(2) the term "related facilities" includes cafeterias or dining

halls, community rooms or buildings, appropriate recreation

facilities, and other essential service facilities;

(3) the term "congregate housing" means housing in which (A)

some of the units may not have kitchen facilities, and (B) there

is a central dining facility to provide wholesome and economic

meals for elderly or handicapped persons or families.

(4) the term "development cost" means the costs of

constructing, purchasing, improving, altering, or repairing new

or existing housing and related facilities and purchasing and

improving the necessary land, including necessary and appropriate

fees and charges, initial operating expenses up to 2 per centum

of the aforementioned costs, approved by the Secretary, impact

fees, local charges for installation, provision, or use of

infrastructure, and local assessments for public improvements and

services imposed by State and local governments. Such fees and

charges may include payments of qualified consulting

organizations or foundations which operate on a nonprofit basis

and which render services or assistance to nonprofit corporations

or consumer cooperatives who provide housing and related

facilities for low or moderate income families. Notwithstanding

the first sentence of this paragraph, the term "development cost"

shall not include any initial operating expenses in the case of

any nonprofit corporation or consumer cooperative that is

financing housing under this section and has been allocated a

low-income housing tax credit by a housing credit agency pursuant

to section 42 of title 26.

(f) Administrative expenses

Amounts made available pursuant to section 1483 of this title

shall be available for administrative expenses incurred under this

section.

(g) Loans for financing transfers of memberships in cooperatives

Notwithstanding the provisions of subsections (a) and (b) of this

section, the Secretary may make and insure loans to consumer

cooperatives to enable such cooperatives to finance the transfers

of memberships in the cooperatives upon such terms and conditions

as low- and moderate-income persons can reasonably afford, except

that such loans shall not be made upon terms more favorable than

are authorized under section 1490a(a) of this title, and that the

total loan to a cooperative under this section shall not exceed the

value of the property.

(h) Project transfers

After August 6, 1996, the ownership or control of a project for

which a loan is made or insured under this section may be

transferred only if the Secretary determines that such transfer

would further the provision of housing and related facilities for

low-income families or persons and would be in the best interests

of residents and the Federal Government.

(i) Limitations on cost increases after approval for project

involving newly constructed or substantially rehabilitated units;

applicable factors

After approving a project involving newly constructed or

substantially rehabilitated units under this section, the Secretary

shall limit cost increases to those approved by the Secretary. The

Secretary may approve those increases only for unforeseen factors

beyond the owner's control, design changes required by the

Secretary or the local government, or changes in financing approved

by the Secretary.

(j) Contract preferences for providing units in newly constructed

projects

For the purpose of achieving the lowest cost in providing units

in newly constructed projects assisted under this section, the

Secretary shall give a preference in entering into contracts under

this section for projects which are to be located on specific

tracts of land provided by States, units of local government, or

others if the Secretary determines that the tract of land is

suitable for such housing, and that affording such preference will

be cost effective.

(k) Management fees

The Secretary shall assure that management fees are not excessive

when a project developed under this section is managed by the

developer or an affiliate of the developer.

(l) Determination of market feasibility of project

For purposes of determining the market feasibility of any project

to be assisted under this section -

(1) in the case of any applicant who applies for rental

assistance payments under section 1490a of this title in

connection with such project, the Secretary shall consider the

availability of such rental assistance payments with respect to

the project and shall require such applicant to demonstrate that

a market exists for persons and families eligible for such rental

assistance payments; and

(2) in the case of any applicant whose project is expected to

utilize any assistance under a program of a State, or political

subdivision thereof, that is similar to such assistance payments

under section 1490a of this title, the Secretary shall only

require such applicant to demonstrate that -

(A) a market exists for persons and families eligible for

such program of assistance;

(B) such program of assistance will provide rental assistance

for a period of not less than five years, and, at the option of

the applicant, either that there is a reasonable assurance that

the contract for assistance will be extended or renewed, or for

the term of the loan remaining after the period of such

assistance, that an adequate rental market exists for the

project without such assistance; and

State or political subdivision shall make available the amounts

required for such rental assistance not less than annually.

(m) Standards for housing and related facilities rehabilitated or

repaired; establishment, criteria, etc.

The Secretary shall establish standards for housing and related

facilities rehabilitated or repaired with amounts received under a

loan made or insured under this section. Standards established by

the Secretary under this subsection shall provide that except for

substantial rehabilitation the particular items or systems repaired

or rehabilitated must meet appropriate levels of quality or

performance comparable to those levels prescribed by the Secretary

of Housing and Urban Development for rehabilitation, but shall not

require that such items or systems or the remainder of the property

meet the standards which are applicable to new construction. The

Secretary shall ensure that standards prescribed under this

subsection provide decent, safe, and sanitary housing and related

facilities.

(n) Assistance to projects located on more than one site

The Secretary may not deny assistance under this section or

section 1490a of this title on the basis that the project involved

is to be located on more than one site.

(o) Rental assistance payments as affecting assistance to projects

or occupancy by eligible persons

The Secretary may not (1) deny assistance under this section on

the basis that rental assistance payments under section 1490a of

this title may be required unless the authority to provide such

assistance is not available; or (2) promulgate any regulation that

would have the effect of denying occupancy to eligible persons on

the basis that such persons require rental assistance payments

under section 1490a of this title.

(p) Occupancy by low income persons and families other than very

low-income persons and families

(1) To the extent assistance is available under section

1490a(a)(2) of this title, not more than 25 per centum of the

dwelling units which were available for occupancy under this

section prior to November 30, 1983, and which will be leased on or

after November 30, 1983, shall be available for leasing by low

income persons and families other than very low-income persons and

families.

(2) To the extent assistance is available under section

1490a(a)(2) of this title, not more than 5 per centum of the

dwelling units which become available for occupancy under this

section on or after November 30, 1983, shall be available for

leasing by low income persons and families other than very

low-income persons and families.

(3) Units in projects financed under this section which become

available for occupancy after November 30, 1983, shall not be

available for occupancy by persons and families other than very

low-income persons and families if the authority to provide

assistance for such persons is available.

(4) In projects financed under this section, units that have been

allocated a low-income housing tax credit by a housing credit

agency pursuant to section 42 of title 26 shall not be available

for occupancy by persons or families other than persons or families

with incomes not in excess of the qualifying income applicable to

such units pursuant to subparagraph (A) or (B) of section 42(g)(1)

of title 26.

(5) The Secretary shall coordinate the processing of any

application for a loan under this section for a project and the

processing of any application for assistance under section

1490a(a)(2) of this title with respect to housing units in the same

project in an economical and efficient manner. At the time the

Secretary enters into a commitment to make or insure a loan under

this section the Secretary shall obligate amounts for assistance

payments under section 1490a(a)(2) of this title for the project,

to the extent that such amounts are available and the Secretary

determines such assistance is necessary for the market feasibility

of the project.

(q) Determination of income of person or family occupying financed

housing

In determining the income of a person or family occupying housing

financed under this section, the Secretary shall consider the value

of that person's or family's assets in the same manner as the

Secretary of Housing and Urban Development considers such value for

the purpose of the United States Housing Act of 1937 [42 U.S.C.

1437 et seq.].

(r) Operating reserve and equity contribution requirements;

regulations to implement adjustment by negotiated rulemaking

procedure

(1) the (!2) Secretary -

(A) may require that the initial operating reserve under this

section may be in the form of an irrevocable letter of credit;

and

(B) except as provided in paragraph (2), may require not more

than a 3 percent contribution to equity, except that the

Secretary shall require a 5 percent contribution in the case of a

project that is allocated a low-income housing tax credit

pursuant to section 42 of title 26.

(2) The Secretary may adjust the amount of equity contribution to

ensure that assistance provided is not more than is necessary to

provide affordable housing after taking account of assistance from

all Federal, State, and local sources.

(3) Not later than 60 days after August 6, 1996, the Secretary

shall issue regulations to implement subsection (r)(2) of this

section in accordance with the negotiated rulemaking procedures set

forth in subchapter III of chapter 5 of title 5: Provided, That if

the negotiated rulemaking is not completed within the designated

time, the Secretary shall proceed to promulgate regulations under

the rulemaking authority contained in section 557 of title 5.

(s) Limitation of fees on loans

No fee other than a late fee may be imposed by or for the

Secretary or any other Federal agency on or with respect to a loan

made or insured under this section.

(t) Equity takeout loans

(1) Authority

The Secretary is authorized to guarantee an equity loan (in the

form of a supplemental loan) to an owner of housing financed with

a loan made or insured under subsection (b) of this section, only

if the Secretary determines, after taking into account local

market conditions, that there is reasonable likelihood that the

housing will continue as decent, safe, and sanitary housing for

the remaining life of the original loan on the project made or

insured under subsection (b) of this section and that such an

equity loan is -

(A) necessary to provide a fair return on the owner's

investment in the housing;

(B) the least costly alternative for the Federal Government

that is consistent with carrying out the purposes of this

subsection; and

unreasonable cost to the Federal Government.

The amount of loans guaranteed under this subsection shall be

subject to limits provided in appropriations Acts.

(2) Timing

The Secretary is authorized to guarantee an equity loan under

this subsection after the expiration of the 20-year period

beginning on the date that an existing loan under subsection (b)

of this section was made or insured. Not more than one equity

loan under this subsection may be provided for any project.

(3) Amount of the takeout

The amount of an equity loan under this subsection shall not

exceed the difference between the outstanding principal on debt

secured by the project and 90 percent of the appraised value of

the project. The appraised value of the project shall be

determined by 2 independent appraisers, 1 of whom shall be

selected by the Secretary and 1 of whom shall be selected by the

owner. If the 2 appraisers fail to agree on the value of the

project, the Secretary and the owner shall jointly select a third

appraiser whose appraisal shall be binding on the Secretary and

the owner. The amount of the equity loan shall not exceed 30

percent of the amount of the original appraised value of the

project made or insured under subsection (b) of this section.

(4) Submission of plan

An owner requesting an equity loan under this subsection shall

submit a plan acceptable to the Secretary to ensure that the cost

of amortizing an equity loan under paragraph (1) does not result

in the displacement of very-low-income tenants or substantially

alter the income mix of the tenants in the project.

(5) Regulations

The Secretary shall issue final regulations within 180 days

from December 15, 1989.

(6) Effective date

The requirements of this subsection shall apply to any loan

obligated under this section on or after December 15, 1989. This

subsection shall not require retroactive reserve account payments

with respect to any loan that was obligated on or after December

15, 1989, and on or before June 16, 1990, but reserve account

payments shall be required for such loans beginning on November

28, 1990.

(u) Reuse of loan authority

Loan authority that is obligated under this section but that is

not expended due to any action that removes the original borrower,

may be reallocated to a different borrower during the same fiscal

year in which the loan authority was obligated. Any loan authority

under this section appropriated or made available within limits

established in appropriations Acts shall remain available until

expended.

(v) Assumption of loans

The Secretary may provide for the assumption or transfer of a

loan or loan obligation under this section to any person or entity

qualified to receive a loan or loan obligation under this section

in any case of default or foreclosure with respect to the original

borrower. The Secretary shall provide in each assumption or

transfer under this subsection for the assumption of the

obligations, rights, and interests under the terms of the loan or

loan obligation or such other terms as the Secretary determines

appropriate.

(w) Set-aside of rural rental housing funds

(1) Authority

Except as provided in paragraph (2), the Secretary shall set

aside from amounts made available for each State for loans under

this section, not less than 9 percent of the amounts available in

each fiscal year. Amounts set aside shall be available only for

nonprofit entities in the State, which may not be wholly or

partially owned or controlled by a for-profit entity. A

partnership, that has as its general partner a nonprofit entity

or the nonprofit entity's for-profit subsidiary, is eligible to

receive funds set aside under this subsection to sponsor a

project which is receiving low-income housing tax credits

authorized under section 42 of title 26. For the purposes of this

subsection, a nonprofit entity is an organization that -

(A) will own an interest in a project to be financed under

this section and will materially participate in the development

and the operation of the project;

(B) is a private organization that has nonprofit, tax exempt

status under section 501(c)(3) or section 501(c)(4) of title

26;

management of low-income housing or community development

projects; and

(D) is not affiliated with or controlled by a for-profit

organization.

(2) Minimum State set-aside

If the amount set aside under paragraph (1) for any State is

less than $750,000 in any fiscal year, the Secretary shall pool

such amount together with set-aside amounts from other States

whose set-aside is less than $750,000, and shall make such

amounts available for such eligible entities under paragraph (1)

in any such State. The Secretary shall establish a procedure to

provide that any amounts pooled under this paragraph from the

allocation for any State in any fiscal year that are not

obligated during a reasonable period in such year shall be made

available for any such eligible entities under paragraph (1) in

such State. The Secretary may provide amounts available for

reallocation under this subsection in excess of $750,000 in a

given State, if such amounts are necessary to finance a project

under this section.

(3) Unused amounts

(A) Equitable distribution

Any amounts set aside under this subsection from the

allocation for any State that are not obligated by 9 months

after the allocation, shall first be pooled and made available

to any other eligible nonprofit entity in any State as defined

in this subsection. The Secretary shall make reasonable efforts

to ensure that pooled funds are distributed under this

subparagraph in an equitable manner.

(B) Return to the States

After funds have been pooled and obligated for 30 days, the

Secretary shall return any remaining funds to the States on a

proportional basis for use by any other eligible entity as

defined in this section.

(x) Uniform project costs; coordination of housing resources and

tax benefits

The Secretary shall -

(1) establish standard guidelines for State offices that

describe allowable development costs which are required for

development of all projects under this section, without regard to

whether the project was allocated a low-income housing tax

credit;

(2) require each State to establish a process for coordinating

the selection of projects under this section with the housing

needs and priorities as established in a State comprehensive

housing affordability strategy under section 12705 of this title

and a low-income housing tax credit allocation plan under section

42 of title 26; and

(3) develop, in consultation with housing credit agencies (as

that term is defined under section 42 of title 26), uniform

procedures for identifying and sharing information on project

costs, builder profit, identity of interests relationships, and

other factors, as appropriate, with the relevant housing credit

agency for projects that are allocated a low-income housing tax

credit pursuant to section 42(h) of title 26 for the purpose of

achieving compliance with section 3545(d) of this title.

(y) Service coordinators

(1) Grants

The Secretary may make grants under this subsection, with

respect to any project that the Secretary determines has a

sufficient number of frail elderly residents, for the cost of

employing or otherwise retaining the services of one or more

individuals to coordinate services provided to frail elderly

residents of the project (in this subsection referred to as a

"service coordinator"), who shall be responsible for -

(A) assessing the supportive service needs of frail elderly

residents of the project, based on objective criteria and

interviews with such residents;

(B) working with service providers to design the provision of

services to meet the needs of frail elderly residents of the

project, taking into consideration the needs and desires of

such residents and their ability and willingness to pay for

such services, as expressed by the residents;

for such services for such residents;

(D) monitoring and evaluating the impact and effectiveness of

any supportive services provided for such residents;

(E) consulting and coordinating with any appropriate public

and private agencies regarding the provision of supportive

services; and

(F) performing such other duties that the Secretary deems

appropriate to enable frail elderly persons residing in

federally assisted housing to live with dignity and

independence.

(2) Qualifications

Individuals employed as service coordinators pursuant to this

subsection shall meet the minimum qualifications and standards

established under section 8011(d)(4) of this title for service

coordinators under a congregate housing services program.

(3) Application and selection

The Secretary shall provide for the form and manner of

applications for grants under this subsection and for the

selection of applicants to receive the grants.

(4) "Frail elderly" defined

For purposes of this subsection, the term "frail elderly" has

the meaning given the term in section 8011(k) of this title.

(z) Accounting and recordkeeping requirements

(1) Accounting standards

The Secretary shall require that borrowers in programs

authorized by this section maintain accounting records in

accordance with generally accepted accounting principles for all

projects that receive funds from loans made or guaranteed by the

Secretary under this section.

(2) Record retention requirements

The Secretary shall require that borrowers in programs

authorized by this section retain for a period of not less than 6

years and make available to the Secretary in a manner determined

by the Secretary, all records required to be maintained under

this subsection and other records identified by the Secretary in

applicable regulations.

(aa) Double damages for unauthorized use of housing projects assets

and income

(1) Action to recover assets or income

(A) In general

The Secretary may request the Attorney General to bring an

action in a United States district court to recover any assets

or income used by any person in violation of the provisions of

a loan made or guaranteed by the Secretary under this section

or in violation of any applicable statute or regulation.

(B) Improper documentation

For purposes of this subsection, a use of assets or income in

violation of the applicable loan, loan guarantee, statute, or

regulation shall include any use for which the documentation in

the books and accounts does not establish that the use was made

for a reasonable operating expense or necessary repair of the

project or for which the documentation has not been maintained

in accordance with the requirements of the Secretary and in

reasonable condition for proper audit.

For the purposes of this subsection, the term "person" means

(i) any individual or entity that borrows funds in

accordance with programs authorized by this section;

(ii) any individual or entity holding 25 percent or more

interest of any entity that borrows funds in accordance with

programs authorized by this section; and

(iii) any officer, director, or partner of an entity that

borrows funds in accordance with programs authorized by this

section.

(2) Amount recoverable

(A) In general

In any judgment favorable to the United States entered under

this subsection, the Attorney General may recover double the

value of the assets and income of the project that the court

determines to have been used in violation of the provisions of

a loan made or guaranteed by the Secretary under this section

or any applicable statute or regulation, plus all costs related

to the action, including reasonable attorney and auditing fees.

(B) Application of recovered funds

Notwithstanding any other provision of law, the Secretary may

use amounts recovered under this subsection for activities

authorized under this section and such funds shall remain

available for such use until expended.

(3) Time limitation

Notwithstanding any other provision of law, an action under

this subsection may be commenced at any time during the 6-year

period beginning on the date that the Secretary discovered or

should have discovered the violation of the provisions of this

section or any related statutes or regulations.

(4) Continued availability of other remedies

The remedy provided in this subsection is in addition to and

not in substitution of any other remedies available to the

Secretary or the United States.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 515, as added Pub. L.

87-723, Sec. 4(b), Sept. 28, 1962, 76 Stat. 671; amended Pub. L.

88-340, June 30, 1964, 78 Stat. 233; Pub. L. 88-560, title V, Sec.

501(d) Sept. 2, 1964, 78 Stat. 796; Pub. L. 89-117, title X, Sec.

1005(c), Aug. 10, 1965, 79 Stat. 501; Pub. L. 89-754, title VIII,

Secs. 804, 805, Nov. 3, 1966, 80 Stat. 1282; Pub. L. 91-78, Sec. 1,

Sept. 30, 1969, 83 Stat. 125; Pub. L. 91-152, title IV, Sec.

413(a), Dec. 24, 1969, 83 Stat. 398; Pub. L. 91-609, title VIII,

Sec. 803(c), Dec. 31, 1970, 84 Stat. 1807; Pub. L. 93-117, Sec.

13(b), Oct. 2, 1973, 87 Stat. 423; Pub. L. 93-383, title V, Secs.

509(b), 510, Aug. 22, 1974, 88 Stat. 695; Pub. L. 95-60, Sec. 4(b),

June 30, 1977, 91 Stat. 258; Pub. L. 95-80, Sec. 4(b), July 31,

1977, 91 Stat. 340; Pub. L. 95-128, title V, Secs. 501(b),

507(a)(3), 508, Oct. 12, 1977, 91 Stat. 1138, 1140, 1141; Pub. L.

95-406, Sec. 7(b), Sept. 30, 1978, 92 Stat. 881; Pub. L. 95-557,

title V, Sec. 501(e), Oct. 31, 1978, 92 Stat. 2111; Pub. L. 96-71,

Sec. 5(b), Sept. 28, 1979, 93 Stat. 502; Pub. L. 96-105, Sec. 5(b),

Nov. 8, 1979, 93 Stat. 795; Pub. L. 96-153, title V, Sec. 501(f),

Dec. 21, 1979, 93 Stat. 1134; Pub. L. 96-372, Sec. 6(b), Oct. 3,

1980, 94 Stat. 1364; Pub. L. 96-399, title V, Secs. 501(b), 502,

503, 507(c), Oct. 8, 1980, 94 Stat. 1668, 1670; Pub. L. 97-35,

title III, Sec. 351(b), Aug. 13, 1981, 95 Stat. 420; Pub. L.

97-289, Sec. 3(a), Oct. 6, 1982, 96 Stat. 1231; Pub. L. 98-35, Sec.

3(a), May 26, 1983, 97 Stat. 198; Pub. L. 98-109, Sec. 4(a), Oct.

1, 1983, 97 Stat. 746; Pub. L. 98-181, title V, Secs. 511(b), 512,

Nov. 30, 1983, 97 Stat. 1244; Pub. L. 98-479, title I, Sec. 105(e),

Oct. 17, 1984, 98 Stat. 2227; Pub. L. 99-120, Sec. 3(a), Oct. 8,

1985, 99 Stat. 503; Pub. L. 99-156, Sec. 3(a), Nov. 15, 1985, 99

Stat. 816; Pub. L. 99-219, Sec. 3(a), Dec. 26, 1985, 99 Stat. 1731;

Pub. L. 99-267, Sec. 3(a), Mar. 27, 1986, 100 Stat. 74; Pub. L.

99-272, title III, Sec. 3009(a), Apr. 7, 1986, 100 Stat. 105; Pub.

L. 99-289, Sec. 1(b), May 2, 1986, 100 Stat. 412; Pub. L. 99-345,

Sec. 1, June 24, 1986, 100 Stat. 673; Pub. L. 99-430, Sept. 30,

1986, 100 Stat. 986; Pub. L. 100-122, Sec. 1, Sept. 30, 1987, 101

Stat. 793; Pub. L. 100-154, Nov. 5, 1987, 101 Stat. 890; Pub. L.

100-170, Nov. 17, 1987, 101 Stat. 914; Pub. L. 100-179, Dec. 3,

1987, 101 Stat. 1018; Pub. L. 100-200, Dec. 21, 1987, 101 Stat.

1327; Pub. L. 100-242, title II, Secs. 242, 263, title III, Secs.

301(e), 306, 307, 316(c), Feb. 5, 1988, 101 Stat. 1890, 1891, 1893,

1895, 1896, 1898; Pub. L. 100-628, title X, Sec. 1042, Nov. 7,

1988, 102 Stat. 3273; Pub. L. 101-137, Sec. 7(a), Nov. 3, 1989, 103

Stat. 825; Pub. L. 101-235, title II, Sec. 207, title IV, Sec. 402,

Dec. 15, 1989, 103 Stat. 2042, 2048; Pub. L. 101-625, title VII,

Secs. 701(e), 712, 713, Nov. 28, 1990, 104 Stat. 4282, 4291, 4292;

Pub. L. 102-142, title VII, Sec. 743(a), Oct. 28, 1991, 105 Stat.

915; Pub. L. 102-230, Sec. 4, Dec. 12, 1991, 105 Stat. 1721; Pub.

L. 102-550, title VII, Secs. 701(e), 707(a)-(f)(1), 708(a), Oct.

28, 1992, 106 Stat. 3834, 3836-3839; Pub. L. 104-120, Sec. 4(b),

(c), Mar. 28, 1996, 110 Stat. 835; Pub. L. 104-180, title VII, Sec.

734(a), (c)(1), (2), (3)(C), (d), (e)(2), Aug. 6, 1996, 110 Stat.

1601-1603; Pub. L. 105-86, title VII, Sec. 735(b), Nov. 18, 1997,

111 Stat. 2110; Pub. L. 105-276, title V, Sec. 599C(b), Oct. 21,

1998, 112 Stat. 2661; Pub. L. 106-569, title VII, Sec. 704, Dec.

27, 2000, 114 Stat. 3014.)

-REFTEXT-

REFERENCES IN TEXT

Section 1928 of title 7, referred to in subsec. (b)(3), was

amended generally by Pub. L. 104-127, title VI, Sec. 605, Apr. 4,

1996, 110 Stat. 1086, and, as so amended, consists of subsecs. (a)

and (b) which are substantially similar to provisions formerly

contained in the third sentence of such section.

Section 1929(f)(1) of title 7, referred to in subsec. (b)(3), was

repealed and section 1929(f)(2) was redesignated section 1929(f)(1)

by Pub. L. 104-127, title VII, Sec. 744, Apr. 4, 1996, 110 Stat.

1125.

The United States Housing Act of 1937, referred to in subsec.

(q), is act Sept. 1, 1937, ch. 896, as revised generally by Pub. L.

93-383, title II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 653, and

amended, which is classified generally to chapter 8 (Sec. 1437 et

seq.) of this title. For complete classification of this Act to the

Code, see Short Title note set out under section 1437 of this title

and Tables.

-COD-

CODIFICATION

Section 203(a) of Pub. L. 100-242, as amended, which was formerly

set out in a note under section 1715l of Title 12, Banks and

Banking, and which provided that on Nov. 28, 1990, the amendment

made by section 263 of Pub. L. 100-242 is repealed and section is

to read as it would without such amendment, was omitted in the

general amendment of subtitle A of title II of Pub. L. 100-242 by

Pub. L. 101-625.

-MISC1-

AMENDMENTS

2000 - Subsec. (z). Pub. L. 106-569 added subsec. (z) and struck

out heading and text of former subsec. (z). Text read as follows:

"Whoever, as an owner, agent, or manager, or who is otherwise in

custody, control, or possession of property that is security for a

loan made or insured under this section willfully uses, or

authorizes the use, of any part of the rents, assets, proceeds,

income, or other fund derived from such property, for any purpose

other than to meet actual or necessary expenses of the property, or

for any other purpose not authorized by this subchapter or the

regulations adopted pursuant to this subchapter, shall be fined not

more than $250,000 or imprisoned not more than 5 years, or both."

Subsec. (aa). Pub. L. 106-569 added subsec. (aa).

1998 - Subsec. (b)(4) to (7). Pub. L. 105-276, Sec. 599C(b)(1),

redesignated pars. (5) to (7) as (4) to (6), respectively, and

struck out former par. (4) which read as follows: "no loan shall be

insured under this subsection after September 30, 1998;".

Subsec. (w)(1). Pub. L. 105-276, Sec. 599C(b)(2), substituted

"each fiscal year" for "fiscal year 1998" in first sentence.

1997 - Subsec. (a)(2). Pub. L. 105-86, Sec. 735(b)(3)(A),

substituted "up to 30 years" for "up to fifty years".

Subsec. (b)(2). Pub. L. 105-86, Sec. 735(b)(3)(B)(i), added par.

(2) and struck out former par. (2) which read as follows: "provide

for complete amortization by periodic payments within such term as

the Secretary may prescribe;".

Subsec. (b)(4). Pub. L. 105-86, Sec. 735(b)(1), substituted

"September 30, 1998" for "September 30, 1997".

Subsec. (b)(7). Pub. L. 105-86, Sec. 735(b)(3)(B)(ii)-(iv), added

par. (7).

Subsec. (w)(1). Pub. L. 105-86, Sec. 735(b)(2), substituted

"fiscal year 1998" for "fiscal year 1997".

1996 - Subsec. (b)(4). Pub. L. 104-180, Sec. 734(a)(1),

substituted "September 30, 1997" for "September 30, 1996".

Pub. L. 104-120, Sec. 4(b), substituted "September 30, 1996" for

"September 30, 1994".

Subsec. (c)(1). Pub. L. 104-180, Sec. 734(c)(3)(C), substituted

"December 15, 1989" for "December 21, 1979".

Subsec. (h). Pub. L. 104-180, Sec. 734(c)(1), added subsec. (h).

Subsec. (r). Pub. L. 104-180, Sec. 734(d)(1), added subsec. (r)

and struck out former subsec. (r) which read as follows: "The

Secretary -

"(1) may require that the initial operating reserve under this

section may be in the form of an irrevocable letter of credit;

and

"(2) may not require more than a 3 percent contribution to

equity, except that the Secretary shall require a 5 percent

contribution in the case of a project that is allocated a

low-income housing tax credit pursuant to section 42 of title

26."

Subsec. (t)(4). Pub. L. 104-180, Sec. 734(c)(2), redesignated

par. (6) as (4) and struck out heading and text of former par. (4).

Text read as follows: "For each initial loan made or insured under

subsection (b) of this section pursuant to a contract entered into

after the date this subsection takes effect, the owner shall make

monthly payments from project income to the Secretary for deposit

in a reserve account for the project. Such monthly payments shall,

in the first year after the loan is made or insured, equal $2 for

each unit in the project, and shall increase by $2 annually until

the expiration of the 20-year period beginning on the date that the

loan was made or insured, except that such initial payments, any

accrued payments, and annual increases shall not be required for a

unit occupied by a low-income family or individual who is paying

more than 30 percent of the family's or individual's adjusted

income in rent. The rent on a unit for which payment is made under

this paragraph shall be increased by the amount of such payment."

Subsec. (t)(5). Pub. L. 104-180, Sec. 734(c)(2), redesignated

par. (7) as (5) and struck out former par. (5) which read as

follows:

"(5) Reserve account. -

"(A) Payments under paragraph (4) shall be deposited in an

interest bearing account that the Secretary shall establish for

the project.

"(B) The Secretary shall make available amounts in the reserve

account only for payments of principal and interest on an equity

loan under this subsection. Such payments shall be in amounts

necessary to ensure that rent payments made by low-income

families residing in the housing do not exceed the maximum rent

under section 1490a(a)(2)(A) of this title;

"(C) Any payments to the account, and interest on such

payments, not expended in the project from which such payments

were made, shall be used in other projects to make payments of

principal and interest on an equity loan under this subsection.

Such payments shall be in amounts necessary to ensure that rent

payments made by low-income families residing in the housing do

not exceed the maximum rent under section 1490a(a)(2)(A) of this

title.

"(D) The Secretary shall make payments from accounts under this

paragraph only to the extent provided in appropriations Acts."

Subsec. (t)(6) to (8). Pub. L. 104-180, Sec. 734(c)(2)(B),

redesignated pars. (6) to (8) as (4) to (6), respectively.

Subsec. (w)(1). Pub. L. 104-180, Sec. 734(a)(2), substituted

"fiscal year 1997" for "fiscal year 1996".

Pub. L. 104-120, Sec. 4(c), substituted "fiscal year 1996" for

"fiscal years 1993 and 1994".

Subsec. (z). Pub. L. 104-180, Sec. 734(d)(2), (e)(2), added

subsec. (z) and struck out heading and text of former subsec. (z).

Text consisted of 3 pars. which denied Secretary authority to

refuse to make complying loan solely because facilities were in

rural or remote area or to provide preference for project based on

availability of particular essential service and required Secretary

to give preference to proposed projects serving rural communities

20 or more miles from an urban area.

1992 - Subsec. (b)(4). Pub. L. 102-550, Sec. 701(e), substituted

"1994" for "1992".

Subsec. (e)(4). Pub. L. 102-550, Sec. 707(a), struck out "and"

before "initial operating expenses up to", inserted ", impact fees,

local charges for installation, provision, or use of

infrastructure, and local assessments for public improvements and

services imposed by State and local governments" after "approved by

the Secretary", and inserted at end "Notwithstanding the first

sentence of this paragraph, the term 'development cost' shall not

include any initial operating expenses in the case of any nonprofit

corporation or consumer cooperative that is financing housing under

this section and has been allocated a low-income housing tax credit

by a housing credit agency pursuant to section 42 of title 26."

Subsec. (l)(1). Pub. L. 102-550, Sec. 707(b)(1), added par. (1)

and struck out former par. (1) which read as follows: "in the case

of any applicant whose project is expected to utilize rental

assistance payments under section 1490a of this title, the

Secretary shall only require such applicant to demonstrate that a

market exists for persons and families eligible for such rental

assistance payments; and".

Subsec. (p)(4). Pub. L. 102-550, Sec. 707(b)(2)(1), substituted

period at end for ", except when the Secretary determines that the

continued vacancy of units that have been unoccupied for at least 6

months threatens the financial viability of the project. The

preceding sentence shall not be interpreted as authorizing the

Secretary to -

"(A) limit the ability of a housing credit agency to require an

owner of housing, in order to receive a low-income housing tax

credit, to enter into a restrictive covenant, in such form and

for such period as the housing credit agency deems appropriate,

to maintain the occupancy characteristics of the project as

prescribed in section 42(h)(6) of title 26; or

"(B) deny or delay closing of financing under this section by

reason of the existence, or occupancy terms, of any such

restrictive covenant."

Subsec. (p)(5). Pub. L. 102-550, Sec. 707(b)(2)(2), added par.

(5).

Subsec. (r)(2). Pub. L. 102-550, Sec. 707(c), inserted before

period at end ", except that the Secretary shall require a 5

percent contribution in the case of a project that is allocated a

low-income housing tax credit pursuant to section 42 of title 26".

Subsec. (w)(1). Pub. L. 102-550, Sec. 708(a)(1)-(3), substituted

"not less than 9 percent of the amounts available in fiscal years

1993 and 1994" for "not less than 7 percent of the amounts

available in fiscal year 1991 and not less than 9 percent of the

amounts available in fiscal year 1992" in first sentence, struck

out "or under whole or partial control with a for-profit entity"

after "by a for-profit entity" in second sentence, and inserted at

end "A partnership, that has as its general partner a nonprofit

entity or the nonprofit entity's for-profit subsidiary, is eligible

to receive funds set aside under this subsection to sponsor a

project which is receiving low-income housing tax credits

authorized under section 42 of title 26. For the purposes of this

subsection, a nonprofit entity is an organization that - " and

subpars. (A) to (D).

Subsec. (w)(2). Pub. L. 102-550, Sec. 708(a)(4), inserted at end

"The Secretary may provide amounts available for reallocation under

this subsection in excess of $750,000 in a given State, if such

amounts are necessary to finance a project under this section."

Subsec. (w)(3). Pub. L. 102-550, Sec. 708(a)(5), added par. (3)

and struck out heading and text of former par. (3). Text read as

follows: "Any amounts set aside or pooled under this subsection

from the allocation for any State in any fiscal year that are not

obligated by a reasonable date established by the Secretary (which

shall be after the expiration of the period under paragraph (2))

shall be made available to any entity eligible under this section

in such State."

Subsec. (x). Pub. L. 102-550, Sec. 707(d), added subsec. (x).

Subsec. (y). Pub. L. 102-550, Sec. 707(e), added subsec. (y).

Subsec. (z). Pub. L. 102-550, Sec. 707(f)(1), added subsec. (z).

1991 - Subsec. (b)(4). Pub. L. 102-142 substituted "1992" for

"1991".

Subsec. (p)(4). Pub. L. 102-230 inserted at end "The preceding

sentence shall not be interpreted as authorizing the Secretary to -

" and subpars. (A) and (B).

1990 - Subsec. (b)(4). Pub. L. 101-625, Sec. 701(e), substituted

"1991" for "1990".

Subsec. (t)(3). Pub. L. 101-625, Sec. 712(a)(1), substituted

"original appraised value of the project" for "original loan on the

project".

Subsec. (t)(4). Pub. L. 101-625, Sec. 712(a)(2), inserted

"initial" before "loan" in first sentence and inserted "initial

payments, any accrued payments, and" after "except that such" in

second sentence.

Subsec. (t)(8). Pub. L. 101-625, Sec. 712(a)(3), added par. (8)

and struck out former par. (8) which read as follows: "The

requirements of this subsection shall apply to any applications for

assistance under this section on or after the expiration of 180

days from December 15, 1989."

Subsec. (u). Pub. L. 101-625, Sec. 712(b), inserted at end "Any

loan authority under this section appropriated or made available

within limits established in appropriations Acts shall remain

available until expended."

Subsec. (v). Pub. L. 101-625, Sec. 712(c), added subsec. (v).

Subsec. (w). Pub. L. 101-625, Sec. 713, added subsec. (w).

1989 - Subsec. (b)(4). Pub. L. 101-137 substituted "September 30,

1990" for "September 30, 1989".

Subsec. (t). Pub. L. 101-235, Sec. 207, added subsec. (t).

Subsec. (u). Pub. L. 101-235, Sec. 402, added subsec. (u).

1988 - Subsec. (b)(4). Pub. L. 100-242, Sec. 301(e), substituted

"September 30, 1989" for "March 15, 1988".

Subsec. (c). Pub. L. 100-242, Sec. 242, added subsec. (c). Former

subsec. (c) redesignated (d).

Subsecs. (d) to (g). Pub. L. 100-242, Sec. 242(1), redesignated

former subsecs. (c) to (f) as (d) to (g), respectively.

Subsec. (h). Pub. L. 100-628 struck out subsec. (h) which read as

follows: "The Secretary shall limit increases in rents on or after

November 30, 1983, for newly constructed or substantially

rehabilitated projects assisted under this section to the lesser of

the actual operating cost increases incurred or the amount of

operating cost increases incurred with respect to comparable rental

dwelling units of various sizes and types in the same market area

which are suitable for occupancy by families and persons assisted

under this section. Where no comparable dwelling units exist in the

same market area, the Secretary shall have authority to approve

such increases in accordance with the best available data regarding

operating cost increases in rental dwelling units."

Pub. L. 100-242, Sec. 242(1), redesignated subsec. (g) as (h).

Former subsec. (h) redesignated (i).

Subsecs. (i) to (p). Pub. L. 100-242, Sec. 242(1), redesignated

subsecs. (h) to (o) as (i) to (p), respectively.

Subsec. (p)(1). Pub. L. 100-242, Sec. 316(c), substituted "on or

after such date" for "on or after such effective date", which for

purposes of codification was translated as "on or after November

30, 1983", thus requiring no change in text.

Subsec. (p)(4). Pub. L. 100-242, Sec. 306, added par. (4).

Subsec. (q). Pub. L. 100-242, Sec. 242(1), redesignated former

subsec. (p) as (q).

Subsec. (r). Pub. L. 100-242, Sec. 263, added subsec. (r).

Subsec. (s). Pub. L. 100-242, Sec. 307, added subsec. (s).

1987 - Subsec. (b)(4). Pub. L. 100-200 substituted "March 15,

1988" for "December 16, 1987".

Pub. L. 100-179 substituted "December 16, 1987" for "December 2,

1987".

Pub. L. 100-170 substituted "December 2, 1987" for "November 15,

1987".

Pub. L. 100-154 substituted "November 15, 1987" for "October 31,

1987".

Pub. L. 100-122 substituted "October 31, 1987" for "September 30,

1987".

1986 - Subsec. (b)(4). Pub. L. 99-430 substituted "September 30,

1987" for "September 30, 1986".

Pub. L. 99-345 substituted "September 30, 1986" for "June 6,

1986".

Pub. L. 99-289 substituted "June 6, 1986" for "April 30, 1986".

Pub. L. 99-272 directed amendment identical to Pub. L. 99-219,

substituting "March 17, 1986" for "December 15, 1985".

Pub. L. 99-267 substituted "April 30, 1986" for "March 17, 1986".

1985 - Subsec. (b)(4). Pub. L. 99-219 substituted "March 17,

1986" for "December 15, 1985".

Pub. L. 99-156 substituted "December 15, 1985" for "November 14,

1985".

Pub. L. 99-120 substituted "November 14, 1985" for "September 30,

1985".

1984 - Subsec. (k)(2)(B). Pub. L. 98-479 inserted ", at the

option of the applicant, either that there is a reasonable

assurance that the contract for assistance will be extended or

renewed, or".

1983 - Subsec. (a)(2) to (4). Pub. L. 98-181, Sec. 512(c)(1),

(2), struck out par. (2) which related to rates of interest on

loans, and redesignated pars. (3) and (4) as (2) and (3),

respectively.

Subsec. (b)(2) to (4). Pub. L. 98-181, Sec. 512(c)(3), (4),

struck out par. (2) which related to rates of interest on loans and

redesignated pars. (3) to (5) as (2) to (4), respectively.

Subsec. (b)(5). Pub. L. 98-181, Sec. 512(c)(4), redesignated par.

(6) as (5). Former par. (5) redesignated (4).

Pub. L. 98-181, Sec. 511(b), substituted "September 30, 1985" for

"November 30, 1983".

Pub. L. 98-109 substituted "November 30, 1983" for "September 30,

1983".

Pub. L. 98-35 substituted "September 30, 1983" for "May 20,

1983".

Subsec. (b)(6), (7). Pub. L. 98-181, Sec. 512(c)(4), redesignated

par. (7) as (6). Former par. (6) redesignated (5).

Pub. L. 98-181, Sec. 512(b), added par. (7).

Subsec. (c). Pub. L. 98-181, Sec. 512(d), inserted provisions

relating to detached units, on scattered sites, for cooperative

housing.

Subsec. (d)(1). Pub. L. 98-181, Sec. 512(e), inserted provisions

relating to applicability to manufactured home rental parks.

Subsecs. (g) to (p). Pub. L. 98-181, Sec. 512(a), added subsecs.

(g) to (p).

1982 - Subsec. (b)(5). Pub. L. 97-289 substituted "May 20, 1983"

for "September 30, 1982".

1981 - Subsec. (b)(5). Pub. L. 97-35 substituted "1982" for

"1981".

1980 - Subsec. (a). Pub. L. 96-399, Secs. 503(a), 507(c)(1),

inserted reference to Indian tribes in provisions preceding par.

(1), and added par. (4).

Subsec. (b). Pub. L. 96-399, Secs. 501(b), 503(b), 507(c)(2),

inserted reference to Indian tribe in provisions preceding par.

(1), in par. (5) substituted "September 30, 1981" for "October 15,

1980", and added par. (6).

Pub. L. 96-372 substituted "October 15, 1980" for "September 30,

1980" in par. (5).

Subsec. (f). Pub. L. 96-399, Sec. 502, added subsec. (f).

1979 - Subsec. (b)(5). Pub. L. 96-153 substituted "September 30,

1980" for "November 30, 1979".

Pub. L. 96-105 substituted "November 30, 1979" for "October 31,

1979".

Pub. L. 96-71 substituted "October 31, 1979" for "September 30,

1979".

1978 - Subsec. (b)(5). Pub. L. 95-557 substituted "September 30,

1979" for "October 31, 1978".

Pub. L. 95-406 substituted "October 31, 1978" for "September 30,

1978".

1977 - Subsec. (a). Pub. L. 95-128, Sec. 507(a)(3), authorized

loans for housing of handicapped persons or families.

Subsec. (b). Pub. L. 95-128, Secs. 501(b), 507(a)(3), substituted

"elderly or handicapped persons or families" for "elderly persons

and elderly families" in provision preceding par. (1) and

"September 30, 1978" for "September 30, 1977" in par. (5).

Pub. L. 95-80 substituted "September 30, 1977" for "July 31,

1977" in par. (5).

Pub. L. 95-60 substituted "July 31, 1977" for "June 30, 1977" in

par. (5).

Subsec. (c). Pub. L. 95-128, Sec. 508(a), provided that

specifically designed equipment required by elderly or handicapped

persons or families shall not be considered elaborate or

extravagant.

Subsec. (d)(1). Pub. L. 95-128, Sec. 508(b), defined "housing" to

also mean congregate housing facilities for elderly or handicapped

persons or families who require some supervision and central

services but are otherwise able to care for themselves and

authorized such housing for the handicapped to be utilized in

conjunction with educational and training facilities.

Subsec. (d)(3). Pub. L. 95-128, Sec. 508(c), substituted

definition of "congregate housing" for prior definition of "elderly

persons" as persons 62 years of age or over and "elderly families"

as families the head of which (or his spouse) is 62 years of age or

over.

1974 - Subsec. (b)(1). Pub. L. 93-383, Sec. 510(a), struck out

"$750,000 or" after "exceed" and substituted "less" for "least".

Subsec. (b)(5). Pub. L. 93-383, Sec. 509(b), substituted "June

30, 1977" for "October 1, 1974".

Subsec. (d)(4). Pub. L. 93-383, Sec. 510(b), inserted provisions

including initial operating expenses up to 2 per centum of

enumerated costs and requiring payments to be made to consultants

rendering services to nonprofit corporations or consumer

cooperatives providing housing and related facilities to low or

moderate income families.

1973 - Subsec. (b)(5). Pub. L. 93-117 substituted "October 1,

1974" for "October 1, 1973".

1970 - Subsec. (b)(1). Pub. L. 91-609 substituted "$750,000" for

"$300,000".

1969 - Subsec. (b)(5). Pub. L. 91-152 substituted "October 1,

1973" for "January 1, 1970".

Pub. L. 91-78 substituted "January 1, 1970" for "October 1,

1969".

1966 - Subsec. (a). Pub. L. 89-754, Secs. 804(a), 805(a),

inserted "or other persons and families of low income" after

"income" and substituted "rental or cooperative housing" for

"rental housing", respectively.

Subsec. (b). Pub. L. 89-754, Sec. 805(a), (b), substituted

"rental or cooperative housing" for "rental housing" and inserted

"or other persons and families of moderate income" after

"families", respectively.

Subsec. (d)(1). Pub. L. 89-754, Sec. 804(b), substituted in the

definition of "housing" the words "occupants eligible under this

section," for "elderly persons or elderly families".

Subsec. (d)(4). Pub. L. 89-754, Sec. 805(c), defined fees and

charges as used for purposes of "development cost" to include

payments to qualified consulting organizations or foundations which

operate on a nonprofit basis and which render services or

assistance to nonprofit corporations or consumer cooperatives who

provide housing and related facilities.

1965 - Subsec. (b)(5). Pub. L. 89-117 substituted "October 1,

1969" for "September 30, 1965".

1964 - Subsec. (b). Pub. L. 88-560 substituted "$300,000" for

"$100,000" in cl. (1), and "1965" for "1964" in cl. (5).

Pub. L. 88-340 substituted "September 30, 1964" for "June 30,

1964" in cl. (5).

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-120 to be construed to have become

effective Oct. 1, 1995, see section 13(a) of Pub. L. 104-120, set

out as an Effective and Termination Dates of 1996 Amendments note

under section 1437d of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Section 708(b) of Pub. L. 102-550 provided that: "The amendment

made by subsection (a)(5) [amending this section] shall take effect

on October 1, 1993, and shall apply to fiscal year 1994 and each

fiscal year thereafter."

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section

371 of Pub. L. 97-35, set out as an Effective Date note under

section 3701 of Title 12, Banks and Banking.

REGULATIONS

Section 707(f)(2) of Pub. L. 102-550 provided that: "The

Secretary of Agriculture shall issue any regulations necessary to

carry out the amendment made by paragraph (1) [amending this

section] not later than the expiration of the 45-day period

beginning on the date of the enactment of this Act [Oct. 28, 1992].

Not later than the expiration of the 30-day period beginning on the

date of the enactment of this Act, the Secretary shall submit a

copy of any regulations to be issued under this subsection to the

Congress. The requirements of section 534(d) of the Housing Act of

1949 [42 U.S.C. 1490n(d)] and subsections (b) and (c) of section

553 of title 5, United States Code, shall apply to any such

regulations."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1472, 1479, 1480, 1483,

1486, 1487, 1490a, 1490f, 1490j, 1490l, 1490p-1, 1490p-2, 1490r,

4851b, 8011, 13664 of this title; title 12 sections 1701q-2, 1717;

title 26 section 42; title 40 section 14503.

-FOOTNOTE-

(!1) See References in Text note below.

(!2) So in original. Probably should be capitalized.

-End-

-CITE-

42 USC Sec. 1486 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1486. Financial assistance to provide low-rent housing for

domestic farm labor

-STATUTE-

(a) Application; considerations

Upon the application of any State or political subdivision

thereof, or any Indian tribe, or any broad-based public or private

nonprofit organization incorporated within the State, or any

nonprofit organization of farmworkers incorporated within the

State, the Secretary is authorized to provide financial assistance

for the provision of low-rent housing and related facilities (which

may be located any place within the State) for domestic farm labor,

if he finds that -

(1) the housing and related facilities for which financial

assistance is requested will fulfill a pressing need in the area

in which such housing and facilities will be located, and there

is reasonable doubt that the same can be provided without

financial assistance under this section;

(2) the applicant will contribute, from its own resources or

from funds borrowed under section 1484 of this title or

elsewhere, at least 10 per centum of the total development cost;

(3) the types of housing and related facilities to be provided

are most practicable, giving due consideration to the purposes to

be served thereby and the needs of the occupants thereof, and

such housing and facilities shall be durable and suitable for

year-around occupancy or use, unless the Secretary finds that

there is no need for such year-around occupancy or use in that

area; and

(4) the construction will be undertaken in an economical

manner, and the housing and related facilities will not be of

elaborate or extravagant design or material.

(b) Maximum amount of assistance

The amount of any financial assistance provided under this

section for low-rent housing and related facilities shall not

exceed 90 per centum of the total development cost thereof, as

determined by the Secretary, less such amount as the Secretary

determines can be practicably obtained from other sources

(including a loan under section 1484 of this title).

standards; priority of domestic farm labor

No financial assistance for low-rent housing and related

facilities shall be made available under this section unless, to

any extent and for any periods required by the Secretary, the

applicant agrees -

(1) that the rentals charged domestic farm labor shall not

exceed such amounts as may be approved by the Secretary, giving

due consideration to the income and earning capacity of the

tenants, and the necessary costs of operating and maintaining

such housing;

(2) that such housing shall be maintained at all times in a

safe and sanitary condition in accordance with such standards as

may be prescribed by State or local law, or, in the absence of

such standards, in accordance with such minimum requirements as

the Secretary shall prescribe; and

(3) an absolute priority will be given at all times in granting

occupancy of such housing and facilities to domestic farm labor.

(d) Payments; contracts to specify uses of housing

The Secretary may make payments pursuant to any contract for

financial assistance under this section at such times and in such

manner, as may be specified in the contract. In each contract, the

Secretary shall include such covenants, conditions, or provisions

as he deems necessary to insure that the housing and related

facilities, for which financial assistance is made available, be

used only in conformity with the provisions of this section.

(e) Regulations for prevention of waste

The Secretary shall prescribe regulations to insure that Federal

funds expended under this section are not wasted or dissipated. The

Secretary shall not give priority for funding under this section to

any one of the groups listed in subsection (a) of this section over

any of the others so listed.

(f) Wages; labor standards; waiver; authority and functions of

Secretary

All laborers and mechanics employed by contractors or

subcontractors on projects assisted by the Secretary which are

undertaken by approved applicants under this section shall be paid

wages at rates not less than those prevailing on similar

construction in the locality, as determined by the Secretary of

Labor in accordance with sections 3141-3144, 3146, and 3147 of

title 40. The Secretary shall not extend any financial assistance

under this section for any project without first obtaining adequate

assurance that these labor standards will be maintained on the

construction work; except that compliance with such standards may

be waived by the Secretary in cases or classes of cases where

laborers or mechanics, not otherwise employed at any time on the

project, voluntarily donate their services without compensation for

the purpose of lowering the costs of construction and the Secretary

determines that any amounts thereby saved are fully credited to the

person, corporation, association, organization, or other entity,

undertaking the project. The Secretary of Labor shall have, with

respect to the labor standards specified in this section, the

authority and functions set forth in Reorganization Plan Numbered

14 of 1950 (15 F.R. 3176; 64 Stat. 1267), and section 3145 of title

40.

(g) Definitions

As used in this section -

(1) the term "low-rent housing" means rental housing within the

financial reach of families of low income consisting of (A) new

structures (including household furnishings) suitable for

dwelling use by domestic farm labor, and (B) existing structures

(including household furnishings) which can be made suitable for

dwelling use by domestic farm labor by rehabilitation,

alteration, conversion, or improvement;

(2) the terms "related facilities" and "domestic farm labor"

shall have the meaning assigned to them in section 1484(f) of

this title;

(3) the term "development cost" shall have the meaning assigned

to it in section 1485(d)(4) (!1) of this title; and

(4) the term "domestic farm labor" has the meaning given such

term in section 1484(f)(3) of this title.

(h) Migrant farmworker housing

Notwithstanding the provisions of subsection (a)(3) of this

section, the Secretary may, upon a finding of persistent need for

migrant farmworker housing in any area, provide assistance to

eligible applicants for 90 per centum of the development costs of

such housing in such area to be used solely by migrant farmworkers

while they are away from their residence. Such housing shall be

constructed in such a manner as to be safe and weatherproof for the

time it is to be occupied, be equipped with potable water and

modern sanitation facilities (including a kitchen sink, toilet, and

bathing facilities), and meet such other requirements as the

Secretary may prescribe.

(i) Farm labor housing

The Secretary shall utilize not more than 10 per centum of the

amounts available for any fiscal year for purposes of this section

for financial assistance to eligible private and public nonprofit

agencies to encourage the development of domestic and migrant farm

labor housing projects under this subchapter.

(j) Domestic farm labor housing available for other families

Housing and related facilities constructed with grants under this

section may be used for tenants eligible for occupancy under

section 1485 of this title if the Secretary determines that -

(1) there is no longer a need in the area for farm labor

housing; or

(2) the need for such housing in the area has diminished to the

extent that the purpose of the grant, providing housing for

domestic farm labor, can no longer be met.

(k) Housing for rural homeless and migrant farmworkers

(1) In general

The Secretary may provide financial assistance for providing

affordable rental housing and related facilities for migrant

farmworkers and homeless individuals (and the families of such

individuals) to applicants as provided in this subsection.

(2) Types of assistance

(A) In general

The Secretary may provide the following assistance for

housing under this subsection:

(i) An advance, in an amount not to exceed $400,000, of the

cost of acquisition, substantial rehabilitation, or

acquisition and rehabilitation of an existing structure or

construction of a new structure for use in the provision of

housing under this subsection. The repayment of any

outstanding debt owed on a loan made to purchase an existing

structure shall be considered to be a cost of acquisition

eligible for an advance under this subparagraph if the

structure was not used for the purposes under this subsection

prior to the receipt of assistance.

(ii) A grant, in an amount not to exceed $400,000, for

moderate rehabilitation of an existing structure for use in

the provision of housing under this subsection.

(iii) Annual payments for operating costs of such housing

(without regard to whether the housing is an existing

structure), not to exceed 75 percent of the annual operating

costs of such housing.

(B) Available assistance

A recipient may receive assistance under both clauses (i) and

(ii) of subparagraph (A). The Secretary may increase the limit

contained in such clauses to $800,000 in areas which the

Secretary finds have high acquisition and rehabilitation costs.

Any advance provided under subparagraph (A)(i) shall be

repaid on such terms as may be prescribed by the Secretary when

the project ceases to be used as housing in accordance with the

provisions of this subsection. Recipients shall be required to

repay 100 percent of the advance if the housing is used for

purposes under this subsection for fewer than 10 years

following initial occupancy. If the housing is used for such

purposes for more than 10 years, the percentage of the amount

that shall be required to be repaid shall be reduced by 10

percentage points for each year in excess of 10 that the

property is so used.

(D) Prevention of undue benefits

Upon any sale or other disposition of housing acquired or

rehabilitated with assistance under this subsection prior to

the close of 20 years after the housing is placed in service,

other than a sale or other disposition resulting in the use of

the project for the direct benefit of low income persons or

where all of the proceeds are used to provide housing for

migrant farmworkers and homeless individuals (and the families

of such individuals), the recipient shall comply with such

terms and conditions as the Secretary may prescribe to prevent

the recipient from unduly benefiting from the sale or other

disposition of the project.

(3) Program requirements

(A) Applications

(i) Applications for assistance under this subsection shall

be submitted by an applicant in such form and in accordance

with such procedures as the Secretary shall establish.

(ii) The Secretary shall require that applications contain at

a minimum (I) a description of the proposed housing, (II) a

description of the size and characteristics of the population

that would occupy the housing, (III) a description of any

public and private resources that are expected to be made

available in connection with the housing, (IV) a description of

the housing needs for migrant farmworkers and homeless

individuals (and the families of such individuals) in the area

to be served by the housing, and (V) assurances satisfactory to

the Secretary that the housing assisted will be operated for

not less than 10 years for the purpose specified in the

application.

(iii) The Secretary shall require that an application furnish

reasonable assurances that the housing will be available for

occupancy by homeless individuals (and the families of such

individuals) only on an emergency and temporary basis during

the offseason and shall be otherwise available for occupancy by

migrant farmworkers (and their families).

(iv) The Secretary shall require that an application furnish

reasonable assurances that the applicant will own or have

control of a site for the proposed housing not later than 6

months after notification of an award for grant assistance. An

applicant may obtain ownership or control of a suitable site

different from the site specified in the application. If an

applicant fails to obtain ownership or control of the site

within 1 year after notification of an award for grant

assistance, the grant shall be recaptured and reallocated.

(B) Selection criteria

The Secretary shall establish selection criteria for a

national competition for assistance under this subsection,

which shall include -

(i) the ability of the applicant to develop and operate the

housing;

(ii) the feasibility of the proposal in providing the

housing;

(iii) the need for such housing in the area to be served;

(iv) the cost effectiveness of the proposed housing;

(v) the extent to which the project would meet the needs of

migrant farmworkers and homeless individuals (and the

families of such individuals) in the State;

(vi) the extent to which the applicant has control of the

site of the proposed housing; and

(vii) such other factors as the Secretary determines to be

appropriate for purposes of this subsection.

The Secretary may not approve assistance for any housing

under this subsection unless the applicant agrees -

(i) to operate the proposed project as housing for migrant

farmworkers and homeless individuals (and the families of

such individuals) in compliance with the provisions of this

subsection and the application approved by the Secretary;

(ii) to monitor and report to the Secretary on the progress

of the housing; and

(iii) to comply with such other terms and conditions as the

Secretary may establish for purposes of this subsection.

(D) Occupant rent

Each migrant farmworker and homeless individual residing in a

facility assisted under this subsection shall pay as rent an

amount determined in accordance with the provisions of section

1437a(a) of this title.

(4) Guidelines

(A) Regulations

Not later than 120 days after November 28, 1990, the

Secretary shall by notice establish such requirements as may be

necessary to carry out the provisions of this subsection.

(B) Limitation on use of funds

No assistance received under this subsection (or any State or

local government funds used to supplement such assistance) may

be used to replace other public funds previously used, or

designated for use, to assist homeless individuals (and the

families of such individuals) or migrant farmworkers.

(5) Limitation on administrative expenses

No recipient may use more than 5 percent of an advance or grant

received under this subsection for administrative purposes.

(6) Omitted

(7) Definitions

For purposes of this subsection:

(A) The term "applicant" means a State, political subdivision

thereof, Indian tribe, any private nonprofit organization

incorporated within the State that has applied for a grant

under this subsection.

(B) The term "homeless individual" has the same meaning given

the term under section 11302 of this title.

(i) means any person (and the family of such person) who

(I) receives a substantial portion of his or her income from

primary production of agricultural or aquacultural

commodities, the handling of such commodities in the

unprocessed stage, or the processing of such commodities,

without respect to the source of employment, and (II)

establishes residence in a location on a seasonal or

temporary basis, in an attempt to receive an income as

described in subclause (I); and

(ii) includes any person (and the family of such person)

who is retired or disabled, but who met the requirements of

clause (i) at the time of retirement or becoming disabled.

(D) The term "operating costs" means expenses incurred by a

recipient providing housing under this subsection with respect

to the administration, maintenance, repair, and security of

such housing and utilities, fuel, furnishings, and equipment

for such housing.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 516, as added Pub. L.

88-560, title V, Sec. 503(a), Sept. 2, 1964, 78 Stat. 796; amended

Pub. L. 91-609, title VIII, Sec. 801(c), (d), Dec. 31, 1970, 84

Stat. 1806; Pub. L. 95-557, title V, Sec. 505, Oct. 31, 1978, 92

Stat. 2112; Pub. L. 96-153, title V, Sec. 509, Dec. 21, 1979, 93

Stat. 1136; Pub. L. 96-399, title V, Sec. 507(d), Oct. 8, 1980, 94

Stat. 1670; Pub. L. 98-181, title V, Sec. 513, Nov. 30, 1983, 97

Stat. 1247; Pub. L. 100-242, title III, Sec. 305(b), Feb. 5, 1988,

101 Stat. 1895; Pub. L. 100-628, title X, Sec. 1043(b), Nov. 7,

1988, 102 Stat. 3273; Pub. L. 101-625, title VII, Sec. 714(a), Nov.

28, 1990, 104 Stat. 4292; Pub. L. 106-400, Sec. 2, Oct. 30, 2000,

114 Stat. 1675.)

-REFTEXT-

REFERENCES IN TEXT

Reorganization Plan Numbered 14 of 1950, referred to in subsec.

(f), is set out in the Appendix to Title 5, Government Organization

and Employees.

Section 1485(d)(4) of this title, referred to in subsec. (g)(3),

was redesignated section 1485(e)(4) of this title by Pub. L.

100-242, title II, Sec. 242(1), Feb. 5, 1988, 101 Stat. 1890.

-COD-

CODIFICATION

In subsec. (f), "sections 3141-3144, 3146, and 3147 of title 40"

substituted for "the Davis-Bacon Act, as amended (40 U.S.C. 276a -

276a-5)" and "section 3145 of title 40" substituted for "section 2

of the Act of June 13, 1934, as amended (40 U.S.C. 276c)" on

authority of Pub. L. 107-217, Sec. 5(c), Aug. 21, 2002, 116 Stat.

1303, the first section of which enacted Title 40, Public

Buildings, Property, and Works.

Subsec. (k)(6) of this section, which required the Secretary to

submit an annual report to Congress summarizing the activities

carried out under subsec. (k) and setting forth the findings,

conclusions, and recommendations of the Secretary as a result of

the activities, terminated, effective May 15, 2000, pursuant to

section 3003 of Pub. L. 104-66, as amended, set out as a note under

section 1113 of Title 31, Money and Finance. See, also, item 18 on

page 103 of House Document No. 103-7.

-MISC1-

AMENDMENTS

2000 - Subsec. (k)(7)(B). Pub. L. 106-400 made technical

amendment to reference in original act which appears in text as

reference to section 11302 of this title.

1990 - Subsec. (k). Pub. L. 101-625 added subsec. (k).

1988 - Subsec. (g)(4). Pub. L. 100-242 added par. (4).

Subsec. (j). Pub. L. 100-628 added subsec. (j).

1983 - Subsec. (i). Pub. L. 98-181 added subsec. (i).

1980 - Subsec. (a). Pub. L. 96-399 inserted reference to Indian

tribe in provisions preceding par. (1).

1979 - Subsec. (h). Pub. L. 96-153 added subsec. (h).

1978 - Subsec. (e). Pub. L. 95-557 inserted "The Secretary shall

not give priority for funding under this section to any one of the

groups listed in subsection (a) of this section over any of the

others so listed".

1970 - Subsec. (a). Pub. L. 91-609, Sec. 801(d)(1), authorized

financial assistance for broad-based nonprofit organizations

incorporated within the State and nonprofit organizations of

farmworkers incorporated within the State and provided for low-rent

housing and related facilities "(which may be located within the

State)".

Subsec. (a)(2). Pub. L. 91-609, Sec. 801(d)(2), substituted "10

per centum" for "one-third".

Subsec. (a)(3). Pub. L. 91-609, Sec. 801(d)(3), inserted ", and

such housing and facilities shall be durable and suitable for

year-around occupancy or use, unless the Secretary finds that there

is no need for such year-around occupancy or use in that area;".

Subsec. (b). Pub. L. 91-609, Sec. 801(d)(4), substituted "90 per

centum" for "two-thirds".

Subsec. (g)(1). Pub. L. 91-609, Sec. 801(c), substituted

"structures (including household furnishings)" for "structures" in

cls. (A) and (B).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1483, 1484, 1490a, 4851b,

8011 of this title; title 20 section 244.

-FOOTNOTE-

(!1) See References in Text note below.

-End-

-CITE-

42 USC Sec. 1487 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1487. Rural Housing Insurance Fund

-STATUTE-

(a) Authority to make and insure loans for housing and buildings on

adequate farms; amounts

The Secretary may insure loans meeting the requirements of

section 1472 of this title, and may make loans in accordance with

the requirements of such section to be sold and insured. The amount

of such a loan to a low income person or family shall not exceed

the amount necessary to provide adequate housing which is modest in

size, design, and cost (as determined by the Secretary).

(b) Authority to make and insure loans for housing and related

facilities for domestic farm labor and elderly persons; transfer

of notes, contracts, and mortgages from Agricultural Credit

Insurance Fund; compensation

The Secretary may insure loans in accordance with the

requirements of section 1484 of this title (exclusive of

subsections (a)(3), (a)(5), and (b) thereof), 1485 of this title

(exclusive of subsections (a) and (b)(3) thereof), 1490d, and 1490f

of this title, and may make loans meeting such requirements to be

sold and insured. Upon the expiration of ninety days after the

original capitalization of the Rural Housing Insurance Fund,

created by subsection (e) of this section, no new loans shall be

made or insured under section 1484 or 1485(b) of this title, except

in conformity with this section. The notes held in the Agricultural

Credit Insurance Fund (section 1929 of title 7) which evidence

loans made or insured by the Secretary under section 1484 or

1485(b) of this title, the rights and liabilities of that Fund

under insurance contracts relating to such loans held by insured

investors, the mortgages securing the obligations of the borrowers

under such loans held in the Fund or by insured investors, and all

rights to subsequent collections on and proceeds of such notes,

contracts, and mortgages, are hereby transferred to the Rural

Housing Insurance Fund and for the purposes of this subchapter and

any other Act shall be subject to the provisions of this section as

if created pursuant thereto. The Rural Housing Insurance Fund shall

compensate the Agricultural Credit Insurance Fund for the aggregate

unpaid principal balance plus accrued interest of the notes so

transferred.

of insured and guaranteed loans to public

The Secretary may use the Rural Housing Insurance Fund for the

purpose of making loans to be sold and insured under this section.

Any loan made and sold by the Secretary under this section after

April 7, 1986 (and any loan made by other lenders under this

subchapter that is insured or guaranteed in accordance with this

section, is purchased by the Secretary, and is sold by the

Secretary under this section after such date) shall be sold to the

public and may not be sold to the Federal Financing Bank, unless

such sale to the Federal Financing Bank is required to service

transactions under this subchapter between the Secretary and the

Federal Financing Bank occurring on or before such date.

(d) Authority to insure payment of interest and principal; liens;

assignability of notes evidencing loans; interest subsidy on

insured and guaranteed loans offered for sale to public;

protection of borrowers under loans sold to public

(1) The Secretary may, in conformity with subsections (a), (b),

and (m) of this section, insure the payment of principal and

interest on loans made by lenders other than the United States, and

on loans made from or otherwise acquired by the Rural Housing

Insurance Fund which are sold by the Secretary. Any contract of

insurance executed by the Secretary hereunder shall be an

obligation supported by the full faith and credit of the United

States, and shall be incontestable except for fraud or material

misrepresentation of which the holder has actual knowledge. In

connection with loans insured under this section, the Secretary may

take liens running to the United States notwithstanding the fact

that the notes evidencing such loans may be held by lenders other

than the United States. Notes evidencing such loans shall be freely

assignable, but the Secretary shall not be bound by any such

assignment until notice thereof is given to and acknowledged by

him.

(2) Each loan made by the Secretary or other lenders under this

subchapter that is insured or guaranteed in accordance with this

subsection shall, when offered for sale to the public, be

accompanied by an agreement by the Secretary to pay to the holder

of such loan (through an agreement to purchase such loan or through

such other means as the Secretary determines to be appropriate) the

difference between the rate of interest paid by the borrower of

such loan and the market rate of interest (as determined by the

Secretary) on obligations having comparable periods to maturity on

the date of such sale.

(3) Each loan made by the Secretary or other lenders under this

subchapter that is insured or guaranteed in accordance with this

subsection shall, when offered for sale to the public, be

accompanied by agreements for the benefit of the borrower under the

loan that provide that -

(A) the purchaser or any assignee of the loan shall not

diminish any substantive or procedural right of the borrower

arising under this subchapter;

(B) upon any substantial default of the borrower, but prior to

foreclosure, the loan shall be assigned to the Secretary for the

purpose of avoiding foreclosure; and

commencing any action to foreclose or otherwise dispossess the

borrower, the Secretary shall afford the borrower all substantive

and procedural rights arising under this subchapter, including

consideration for interest subsidy, moratorium, reamortization,

refinancing, and appeal of any adverse decision to an impartial

officer.

(4) From the proceeds of loan sales under paragraph (2), the

Secretary shall set aside as a reserve against future losses not

less than 5 percent of the outstanding face amount of the loans

held by the public at any time.

(e) Rural Housing Insurance Fund; creation; authorization of

appropriations; separate operation of guaranteed and insured loan

programs: transfer of funds

There is hereby created the Rural Housing Insurance Fund

(hereinafter referred to as the "Fund") which shall be used by the

Secretary as a revolving fund for carrying out the provisions of

this section. There are authorized to be appropriated to the

Secretary such sums as may be necessary for the purposes of the

Fund. The guaranteed loan program under this subchapter shall be

operated separately from the insured loan program operated under

this subchapter and no funds designated for one program may be

transferred to another program.

(f) Investment of excess Fund moneys

Money in the Fund not needed for current operations shall be

invested in direct obligations of the United States or obligations

guaranteed by the United States.

(g) Fund assets and liabilities; sale of loans; agreements for

servicing and purchasing loans

All funds, claims, notes, mortgages, contracts, and property

acquired by the Secretary under this section, and all collections

and proceeds therefrom, shall constitute assets of the Fund; and

all liabilities and obligations of such assets shall be liabilities

and obligations of the Fund. Loans may be held in the Fund and

collected in accordance with their terms or may be sold by the

Secretary with or without agreements for insurance thereof. The

Secretary is authorized to make agreements with respect to

servicing loans held or insured by him under this section and

purchasing such insured loans on such terms and conditions as he

may prescribe.

(h) Issuance of notes; form and denominations; interest rate;

purchase by Secretary of the Treasury; debt transactions

The Secretary is authorized to issue notes to the Secretary of

the Treasury to obtain funds necessary for discharging obligations

under this section and for authorized expenditures out of the Fund,

but, except as may be authorized in appropriation Acts, not for the

original or any additional capital of the Fund. Such notes shall be

in such form and denominations and have such maturities and be

subject to such terms and conditions as may be prescribed by the

Secretary with the approval of the Secretary of the Treasury. Each

note shall bear interest at the average rate, as determined by the

Secretary of the Treasury, payable by the Treasury upon its

marketable public obligations outstanding at the beginning of the

fiscal year in which such note is issued, which are neither due nor

callable for redemption for fifteen years from their date of issue.

The Secretary of the Treasury is authorized and directed to

purchase any notes of the Secretary issued hereunder, and for that

purpose the Secretary of the Treasury is authorized to use as a

public debt transaction the proceeds from the sale of any

securities issued under chapter 31 of title 31, and the purposes

for which such securities may be issued under such chapter are

extended to include purchases of notes issued by the Secretary. All

redemption, purchases, and sales by the Secretary of the Treasury

of such notes shall be treated as public debt transactions of the

United States. The notes issued by the Secretary to the Secretary

of the Treasury shall constitute obligations of the Fund.

(i) Retention of annual charge; administrative expenses; merger of

funds

The Secretary may retain out of interest payments by the borrower

an annual charge in an amount specified in the insurance or sale

agreement applicable to the loan. Of the charges retained by the

Secretary, if any, not to exceed 1 per centum per annum of the

unpaid balance of the loan shall be deposited in the Fund. Any

retained charges not deposited in the Fund shall be available for

administrative expenses in carrying out the provisions of this

subchapter, to be transferred annually, and become merged with any

appropriation for administrative expenses of the Farmers Home

Administration, when and in such amounts as may be authorized in

appropriation Acts.

(j) Additional uses of Fund moneys

The Secretary may also utilize the Fund -

(1) to pay amounts to which the holder of the note is entitled

in accordance with an insurance or sale agreement under this

section accruing between the date of any payment by the borrower

to the Secretary and the date of transmittal of any such payments

to the holder of the note; and in the discretion of the

Secretary, payments other than final payments need not be

remitted to the holder until due or until the next agreed annual

or semiannual remittance date;

(2) to pay the holder of any note insured under this section

any defaulted installment or, upon assignment of the note to the

Secretary at the Secretary's request, or pursuant to a purchase

agreement, the entire balance outstanding on the note;

(3) to pay taxes, insurance, prior liens, expenses necessary to

make fiscal adjustments in connection with the application and

transmittal of collections or necessary to obtain credit reports

on applicants or borrowers, and other services customary in the

industry, independent audits of project expenses, construction

inspections, commercial appraisals, servicing of loans, and other

related program services and expenses, and other expenses and

advances to protect the security for loans which are insured

under this section or held in the Fund, and to acquire such

security property at foreclosure sale or otherwise;

(4) to make assistance payments authorized by section 1490a(a)

of this title;

(5) after October 1, 1977, and as approved in appropriations

Acts, to make advances authorized by section 1471(e) of this

title;

(6) to make payments and take other actions in accordance with

agreements entered into under paragraphs (2) and (3) of

subsection (d) of this section; and

(7) to provide advances and assistance required to carry out

paragraphs (4) and (5) of section 1472(c) of this title.

(k) Sale of loans as sale of assets

Any sale by the Secretary of loans individually or in blocks,

pursuant to subsections (c) and (g) of this section, shall be

treated as a sale of assets for the purposes of chapter 11 of title

31, notwithstanding the fact that the Secretary, under an agreement

with the purchaser, holds the debt instruments evidencing the loans

and holds or reinvests payments thereon as trustee and custodian

for the purchaser.

(l) Commitments to make or insure loans to lenders, builders, or

sellers; terms and conditions

The Secretary may also, upon the application of lenders,

builders, or sellers and upon compliance with requirements

specified by him, make commitments upon such terms and conditions

as he shall prescribe to make or insure loans under this section to

eligible applicants.

(m) Transfer of assets, liabilities, and authorizations of Rural

Housing Direct Loan Account to Fund; abolition of Account;

applicability of provisions

The assets and liabilities of, and authorizations applicable to,

the Rural Housing Direct Loan Account are hereby transferred to the

Fund, and such Account is hereby abolished. Such assets and their

proceeds, including loans made out of the Fund pursuant to this

section, shall be subject to all of the provisions of this section.

(n) Purchase of eligible residential properties

The Secretary may guarantee and service loans made for the

purchase of eligible residential properties under section 1441a(c)

of title 12 in accordance with subsection (d) of this section and

the last sentence of section 1490a(a)(1)(A) of this title.

(o) Rules to encourage rehabilitation or purchase of existing

buildings; regulations to facilitate marketability of insured or

guaranteed loans in secondary mortgage market

(1) The Secretary shall promulgate rules which encourage the

rehabilitation or purchase of existing buildings for the purpose of

providing housing which is economical in cost and operation.

(2) Not later than the expiration of the 90-day period following

April 7, 1986, the Secretary shall issue regulations to facilitate

the marketability in the secondary mortgage market of loans insured

or guaranteed under this section. Such regulations shall ensure

that such loans are competitive with other loans and mortgages

insured or guaranteed by the Federal Government.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 517, as added Pub. L.

89-117, title X, Sec. 1003(a), Aug. 10, 1965, 79 Stat. 498; amended

Pub. L. 89-754, title VIII, Sec. 806, Nov. 3, 1966, 80 Stat. 1282;

Pub. L. 91-78, Sec. 1, Sept. 30, 1969, 83 Stat. 125; Pub. L.

91-152, title IV, Sec. 413(a)-(e)(2), (f)(2), Dec. 24, 1969, 83

Stat. 398-400; Pub. L. 91-609, title VIII, Sec. 803(d), Dec. 31,

1970, 84 Stat. 1807; Pub. L. 93-117, Sec. 13(c), Oct. 2, 1973, 87

Stat. 423; Pub. L. 93-383, title V, Secs. 505(c), 509(b), 514(c),

516(b), 517, 519(b), Aug. 22, 1974, 88 Stat. 694-696, 698, 699;

Pub. L. 95-60, Sec. 4(c), June 30, 1977, 91 Stat. 258; Pub. L.

95-80, Sec. 4(c), July 31, 1977, 91 Stat. 340; Pub. L. 95-128,

title V, Secs. 501(c), 502(b), (c), 506, 509, Oct. 12, 1977, 91

Stat. 1139-1141; Pub. L. 95-406, Sec. 7(c), Sept. 30, 1978, 92

Stat. 881; Pub. L. 95-557, title V, Secs. 501(f), 506(b), Oct. 31,

1978, 92 Stat. 2111, 2113; Pub. L. 96-71, Sec. 5(c), Sept. 28,

1979, 93 Stat. 502; Pub. L. 96-105, Sec. 5(c), Nov. 8, 1979, 93

Stat. 795; Pub. L. 96-153, title V, Secs. 501(g), 511, Dec. 21,

1979, 93 Stat. 1134, 1137; Pub. L. 96-372, Sec. 6(c), Oct. 3, 1980,

94 Stat. 1364; Pub. L. 96-399, title V, Secs. 501(c), 511, Oct. 8,

1980, 94 Stat. 1668, 1671; Pub. L. 97-35, title III, Sec. 351(c),

Aug. 13, 1981, 95 Stat. 421; Pub. L. 97-289, Sec. 3(b), Oct. 6,

1982, 96 Stat. 1231; Pub. L. 98-35, Sec. 3(b), May 26, 1983, 97

Stat. 198; Pub. L. 98-109, Sec. 4(b), Oct. 1, 1983, 97 Stat. 746;

Pub. L. 98-181, title V, Secs. 511(c), 514, Nov. 30, 1983, 97 Stat.

1244, 1247; Pub. L. 98-479, title I, Sec. 105(f), title II, Sec.

203(d)(5), (6), Oct. 17, 1984, 98 Stat. 2227, 2230; Pub. L. 99-272,

title III, Sec. 3006, Apr. 7, 1986, 100 Stat. 103; Pub. L. 100-242,

title II, Sec. 243, Feb. 5, 1988, 101 Stat. 1890; Pub. L. 101-73,

title V, Sec. 501(e)(2), Aug. 9, 1989, 103 Stat. 394; Pub. L.

102-550, title VII, Sec. 707(g), Oct. 28, 1992, 106 Stat. 3839.)

-MISC1-

AMENDMENTS

1992 - Subsec. (j)(3). Pub. L. 102-550 inserted "independent

audits of project expenses," after "customary in the industry,".

1989 - Subsec. (n). Pub. L. 101-73 added subsec. (n).

1988 - Subsec. (j)(7). Pub. L. 100-242 added par. (7).

1986 - Subsec. (c). Pub. L. 99-272, Sec. 3006(a), inserted

provision requiring any loan made and sold after Apr. 7, 1986, to

be sold to the public and not to Federal Financing Bank unless

required to service transactions between Secretary and Bank

occurring on or before such date.

Subsec. (d). Pub. L. 99-272, Sec. 3006(b), (c), designated

existing provisions as par. (1), and added pars. (2) to (4).

Subsec. (j)(6). Pub. L. 99-272, Sec. 3006(d), added par. (6).

Subsec. (n). Pub. L. 99-272, Sec. 3006(e), struck out subsec. (n)

which restricted loans guaranteed under this section to borrowers

with moderate or above-moderate incomes.

Subsec. (o). Pub. L. 99-272, Sec. 3006(f), designated existing

provisions as par. (1), and added par. (2).

1984 - Subsec. (h). Pub. L. 98-479, Sec. 203(d)(5), substituted

"chapter 31 of title 31" for "the Second Liberty Bond Act, as

amended" and "such chapter" for "such Act".

Subsec. (j)(4). Pub. L. 98-479, Sec. 105(f), inserted "and" after

the semicolon at the end.

Subsec. (k). Pub. L. 98-479, Sec. 203(d)(6), substituted "chapter

11 of title 31" for "the Budget and Accounting Act, 1921".

1983 - Subsec. (a). Pub. L. 98-181, Sec. 514(a)(1), substituted

provisions relating to amount of loan to low income person or

family, for provisions designated as pars. (1) and (2) relating to

restrictions on loans with respect to amounts, interest, etc.,

where the borrowers are persons of low or moderate income, and

similar restrictions where the borrowers are other persons.

Subsec. (a)(1). Pub. L. 98-181, Sec. 511(c), substituted

"September 30, 1985" for "November 30, 1983".

Pub. L. 98-109 substituted "November 30, 1983" for "September 30,

1983".

Pub. L. 98-35 substituted "September 30, 1983" for "May 20,

1983".

Subsec. (b). Pub. L. 98-181, Sec. 514(a)(2), substituted "(b)(3)"

for "(b)(4)".

Subsec. (j)(6). Pub. L. 98-181, Sec. 514(b), struck out par. (6)

which related to making expenditures under section 1479(c) of this

title after Oct. 1, 1977.

Subsec. (o). Pub. L. 98-181, Sec. 514(c), (d), added subsec. (o),

and struck out former subsec. (o) which related to loans to persons

of low income and to the minimum amounts available to such persons.

1982 - Subsec. (a)(1). Pub. L. 97-289 substituted "May 20, 1983"

for "September 30, 1982".

1981 - Subsec. (a)(1). Pub. L. 97-35 substituted "1982" for

"1981".

1980 - Subsec. (a)(1). Pub. L. 96-399, Sec. 501(c), substituted

"September 30, 1981" for "October 15, 1980".

Pub. L. 96-372 substituted "October 15, 1980" for "September 30,

1980".

Subsec. (n). Pub. L. 96-399, Sec. 511, inserted reference to

moderate income borrowers.

1979 - Subsec. (a)(1). Pub. L. 96-153, Sec. 501(g), substituted

"September 30, 1980" for "November 30, 1979".

Pub. L. 96-105 substituted "November 30, 1979" for "October 31,

1979".

Pub. L. 96-71 substituted "October 31, 1979" for "September 30,

1979".

Subsec. (o). Pub. L. 96-153, Sec. 511, redesignated existing

provisions as par. (1) and added par. (2).

1978 - Subsec. (a)(1). Pub. L. 95-557, Sec. 501(f), substituted

"September 30, 1979" for "October 31, 1978".

Pub. L. 95-406 substituted "October 31, 1978" for "September 30,

1978".

Subsec. (j)(4). Pub. L. 95-557, Sec. 506(b), substituted

"1490a(a)" for "1490a(a)(2)".

1977 - Subsec. (a)(1). Pub. L. 95-128, Sec. 501(c), substituted

"September 30, 1978" for "September 30, 1977".

Pub. L. 95-80 substituted "September 30, 1977" for "July 31,

1977".

Pub. L. 95-60 substituted "July 31, 1977" for "June 30, 1977".

Subsec. (e). Pub. L. 95-128, Sec. 502(b), required separate

operation of guaranteed loan program and insured loan program and

prohibited transfer of funds from one program to the other.

Subsec. (j)(5), (6). Pub. L. 95-128, Sec. 506, added pars. (5)

and (6).

Subsec. (n). Pub. L. 95-128, Sec. 502(c), added subsec. (n).

Subsec. (o). Pub. L. 95-128, Sec. 509, added subsec. (o).

1974 - Subsec. (a)(1). Pub. L. 93-383, Sec. 509(b), substituted

"June 30, 1977" for "October 1, 1974".

Subsec. (b). Pub. L. 93-383, Secs. 516(b), 517, inserted

reference to section 1490f of this title and provisions relating to

transfer of notes from and compensation for the Agricultural Credit

Insurance Fund.

Subsec. (d). Pub. L. 93-383, Sec. 505(c)(1), struck out "as it

becomes due" after "principal and interest".

Subsec. (j). Pub. L. 93-383, Secs. 505(c)(2), (3), 514(c),

519(b), in cl. (1) substituted "any payment" for "any prepayment"

and "such payments" for "such prepayments" and inserted provision

relating to next agreed annual or semiannual remittance date, in

cl. (3) inserted provisions authorizing other services customary in

the industry, etc., and added cl. (4).

1973 - Subsec. (a)(1). Pub. L. 93-117 substituted "October 1,

1974" for "October 1, 1973".

1970 - Subsec. (j)(3). Pub. L. 91-609 authorized use of Fund

moneys for expenses necessary to obtain credit reports on

applicants or borrowers.

1969 - Subsec. (a)(1). Pub. L. 91-152, Sec. 413(a), substituted

"October 1, 1973" for "January 1, 1970".

Pub. L. 91-78 substituted "January 1, 1970" for "October 1,

1969".

Subsec. (b). Pub. L. 91-152, Sec. 413(f)(2), inserted reference

to section 1490d of this title.

Subsec. (c). Pub. L. 91-152, Sec. 413(b), struck out provision

which imposed a limit of not to exceed $100,000,000 on the

aggregate amount of loans held by the Secretary at any one time.

Subsec. (d). Pub. L. 91-152, Sec. 413(e)(2), inserted reference

to subsec. (m) of this section and inserted "or otherwise acquired

by" after "loans made from".

Subsecs. (k) to (m). Pub. L. 91-152, Sec. 413(c)-(e)(1), added

subsecs. (k) to (m).

1966 - Subsec. (a)(1). Pub. L. 89-754 substituted restriction

against insurance or making of a loan under this par. after Oct. 1,

1969, except pursuant to a commitment entered into before that date

for former clause (C) which provided that such loans shall not

exceed in the aggregate of $300,000,000 of new loans made or

insured in any one fiscal year.

SALE OF RURAL HOUSING LOANS

Pub. L. 99-509, title II, Sec. 2001, Oct. 21, 1986, 100 Stat.

1879, directed Secretary of Agriculture to take such actions as

necessary to ensure that loans made under this subchapter are sold

to public in amounts sufficient to provide a net reduction in

outlays of not less than $1,715,000,000 in fiscal year 1987 from

proceeds of such sales, specified procedures and terms of sales,

required Secretary to report to specified Congressional committees

not later than 20 days before initial sale estimating amount of

discount at which loans will be sold at such initial sale and

estimating such amount at each subsequent sale during fiscal year

1987 and periodic reports to such committees, the first not later

than 60 days after Oct. 21, 1986, and subsequent reports each 60

days thereafter, on Secretary's activities regarding such sales,

authorized audits and evaluations of Secretary's activities by

Comptroller General and reports on such audits and evaluations to

Congressional committees, and excluded applicability of subsec.

(d)(2) and (3) of this section to sale of loans.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section

371 of Pub. L. 97-35, set out as an Effective Date note under

section 3701 of Title 12, Banks and Banking.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1472, 1490a, 1490j of

this title; title 7 section 1933.

-End-

-CITE-

42 USC Sec. 1488 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1488. Repealed. Pub. L. 91-152, title IV, Sec. 413(e)(3), Dec.

24, 1969, 83 Stat. 399

-MISC1-

Section, act July 15, 1949, ch. 338, title V, Sec. 518, as added

Aug. 10, 1965, Pub. L. 89-117, title X, Sec. 1003(a), 79 Stat. 500,

created the Rural Housing Direct Loan Account, set forth the

composition of such Account, and authorized the issuance of notes

to the Secretary of the Treasury.

-End-

-CITE-

42 USC Sec. 1489 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1489. Transfer of excess funds out of Rural Housing Insurance

Fund

-STATUTE-

Any sums in the Rural Housing Insurance Fund which the Secretary

determines are in excess of amounts needed to meet the obligations

and carry out the purposes of such Fund shall be returned to

miscellaneous receipts of the Treasury.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 519, as added Pub. L.

89-117, title X, Sec. 1006, Aug. 10, 1965, 79 Stat. 501; amended

Pub. L. 91-152, title IV, Sec. 413(e)(4), Dec. 24, 1969, 83 Stat.

399.)

-MISC1-

AMENDMENTS

1969 - Pub. L. 91-152 struck out applicability of provisions to

Rural Housing Direct Loan Account.

-End-

-CITE-

42 USC Sec. 1490 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1490. "Rural" and "rural area" defined

-STATUTE-

As used in this subchapter, the terms "rural" and "rural area"

mean any open country, or any place, town, village, or city which

is not (except in the cases of Pajaro, in the State of California,

and Guadalupe, in the State of Arizona) part of or associated with

an urban area and which (1) has a population not in excess of 2,500

inhabitants, or (2) has a population in excess of 2,500 but not in

excess of 10,000 if it is rural in character, or (3) has a

population in excess of 10,000 but not in excess of 20,000, and (A)

is not contained within a standard metropolitan statistical area,

and (B) has a serious lack of mortgage credit for lower and

moderate-income families, as determined by the Secretary and the

Secretary of Housing and Urban Development. For purposes of this

subchapter, any area classified as "rural" or a "rural area" prior

to October 1, 1990, and determined not to be "rural" or a "rural

area" as a result of data received from or after the 1990 or 2000

decennial census shall continue to be so classified until the

receipt of data from the decennial census in the year 2010, if such

area has a population in excess of 10,000 but not in excess of

25,000, is rural in character, and has a serious lack of mortgage

credit for lower and moderate-income families. Notwithstanding any

other provision of this section, the city of Plainview, Texas,

shall be considered a rural area for purposes of this subchapter,

and the city of Altus, Oklahoma, shall be considered a rural area

for purposes of this subchapter until the receipt of data from the

decennial census in the year 2000.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 520, as added Pub. L.

89-117, title X, Sec. 1007, Aug. 10, 1965, 79 Stat. 502; amended

Pub. L. 91-609, title VIII, Sec. 803(e), Dec. 31, 1970, 84 Stat.

1807; Pub. L. 93-383, title V, Sec. 511, Aug. 22, 1974, 88 Stat.

695; Pub. L. 94-375, Sec. 25(b), Aug. 3, 1976, 90 Stat. 1078; Pub.

L. 98-181, title V, Sec. 515, Nov. 30, 1983, 97 Stat. 1247; Pub. L.

98-479, title I, Sec. 105(g), Oct. 17, 1984, 98 Stat. 2227; Pub. L.

99-120, Sec. 3(b), Oct. 8, 1985, 99 Stat. 503; Pub. L. 99-156, Sec.

3(b), Nov. 15, 1985, 99 Stat. 816; Pub. L. 99-219, Sec. 3(b), Dec.

26, 1985, 99 Stat. 1731; Pub. L. 99-267, Sec. 3(b), Mar. 27, 1986,

100 Stat. 74; Pub. L. 99-272, title III, Sec. 3009(b), Apr. 7,

1986, 100 Stat. 105; Pub. L. 99-289, Sec. 1(b), May 2, 1986, 100

Stat. 412; Pub. L. 99-345, Sec. 1, June 24, 1986, 100 Stat. 673;

Pub. L. 99-430, Sept. 30, 1986, 100 Stat. 986; Pub. L. 100-122,

Sec. 1, Sept. 30, 1987, 101 Stat. 793; Pub. L. 100-154, Nov. 5,

1987, 101 Stat. 890; Pub. L. 100-170, Nov. 17, 1987, 101 Stat. 914;

Pub. L. 100-179, Dec. 3, 1987, 101 Stat. 1018; Pub. L. 100-200,

Dec. 21, 1987, 101 Stat. 1327; Pub. L. 100-242, title III, Sec.

308, Feb. 5, 1988, 101 Stat. 1896; Pub. L. 101-137, Sec. 7(b), Nov.

3, 1989, 103 Stat. 826; Pub. L. 101-625, title VII, Sec. 715(a),

Nov. 28, 1990, 104 Stat. 4296; Pub. L. 102-550, title VII, Sec.

709, Oct. 28, 1992, 106 Stat. 3840; Pub. L. 105-276, title V, Sec.

599H(g), Oct. 21, 1998, 112 Stat. 2669; Pub. L. 106-554, Sec.

1(a)(4) [div. A, Sec. 102], Dec. 21, 2000, 114 Stat. 2763,

2763A-172; Pub. L. 106-569, title VII, Sec. 705, Dec. 27, 2000, 114

Stat. 3015.)

-MISC1-

AMENDMENTS

2000 - Pub. L. 106-554 and Pub. L. 106-569 amended second

sentence identically, substituting "1990 or 2000 decennial census"

for "1990 decennial census" and "year 2010" for "year 2000".

1998 - Pub. L. 105-276 inserted before period at end ", and the

city of Altus, Oklahoma, shall be considered a rural area for

purposes of this subchapter until the receipt of data from the

decennial census in the year 2000".

1992 - Pub. L. 102-550 inserted at end "Notwithstanding any other

provision of this section, the city of Plainview, Texas, shall be

considered a rural area for purposes of this subchapter."

1990 - Pub. L. 101-625 substituted "cases" for "case" in first

sentence, inserted ", and Guadalupe, in the State of Arizona" after

"California", and substituted last sentence for "For purposes of

this subchapter, any area classified as 'rural' or a 'rural area'

prior to the receipt of data from or after the 1980 decennial

census and determined not to be 'rural' or a 'rural area' as a

result of such data shall continue to be so classified through

September 30, 1990, if such area has a population in excess of

10,000 but not in excess of 20,000."

1989 - Pub. L. 101-137 substituted "September 30, 1990" for

"September 30, 1989".

1988 - Pub. L. 100-242 added parenthetical exception for Pajaro,

in the State of California, and substituted "September 30, 1989"

for "March 15, 1988".

1987 - Pub. L. 100-200 substituted "March 15, 1988" for "December

16, 1987".

Pub. L. 100-179 substituted "December 16, 1987" for "December 2,

1987".

Pub. L. 100-170 substituted "December 2, 1987" for "November 15,

1987".

Pub. L. 100-154 substituted "November 15, 1987" for "October 31,

1987".

Pub. L. 100-122 substituted "October 31, 1987" for "September 30,

1987".

1986 - Pub. L. 99-430 substituted "September 30, 1987" for

"September 30, 1986".

Pub. L. 99-345 substituted "September 30, 1986" for "June 6,

1986".

Pub. L. 99-289 substituted "June 6, 1986" for "April 30, 1986".

Pub. L. 99-272 directed amendment identical to Pub. L. 99-219,

substituting "March 17, 1986" for "December 15, 1985".

Pub. L. 99-267 substituted "April 30, 1986" for "March 17, 1986".

1985 - Pub. L. 99-219 substituted "March 17, 1986" for "December

15, 1985".

Pub. L. 99-156 substituted "December 15, 1985" for "November 14,

1985".

Pub. L. 99-120 substituted "November 14, 1985" for "the end of

fiscal year 1985".

1984 - Pub. L. 98-479 substituted "1985" for "1984".

1983 - Pub. L. 98-181 inserted provisions relating to

applicability of this subchapter through fiscal year 1984 to areas

classified pursuant to 1980 decennial census.

1976 - Cl. (3)(B). Pub. L. 94-375 inserted "for lower and

moderate-income families" after "has a serious lack of mortgage

credit".

1974 - Cl. (3). Pub. L. 93-383 added cl. (3).

1970 - Pub. L. 91-609 substituted as upper population limit

"10,000" for "5,500".

EFFECTIVE DATE OF 1990 AMENDMENT

Section 715(b) of Pub. L. 101-625 provided that: "The amendment

made by this section [amending this section] shall apply with

respect to classification of rural areas for fiscal year 1991 and

any fiscal year thereafter."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1437a, 1479, 1480, 1485,

1490q of this title; title 12 section 1441a.

-End-

-CITE-

42 USC Sec. 1490a 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8A - SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING

SUBCHAPTER III - FARM HOUSING

-HEAD-

Sec. 1490a. Loans to provide occupant owned, rental, and

cooperative housing for low and moderate income, elderly or

handicapped persons or families

-STATUTE-

(a) Interest rates; additional assistance; payments to owners; rent

limitations

(1)(A) Notwithstanding the provisions of sections 1472, 1487(a)

and 1485 of this title, loans to persons of low or moderate income

under section 1472 or 1487(a)(1) (!1) of this title, loans under

section 1485 of this title to provide rental or cooperative housing

and related facilities for persons and families of low or moderate

income or elderly or handicapped persons or families and loans

under section 1490f of this title to provide condominium housing

for persons and families of low or moderate income, shall bear

interest at a rate prescribed by the Secretary at not less than a

rate determined by the Secretary of the Treasury upon the request

of the Secretary taking into consideration the current average

market yield on outstanding marketable obligations of the United

States with remaining periods to maturity comparable to the average

maturities of such loans, adjusted to the nearest one-eighth of 1

per centum. Any loan guaranteed under this subchapter shall bear

interest at such rate as may be agreed upon by the borrower and the

lender.

(B) From the interest rate so determined, the Secretary may

provide the borrower with assistance in the form of credits so as

to reduce the effective interest rate to a rate not less than 1 per

centum per annum for such periods of time as the Secretary may

determine for applicants described in subparagraph (A) if without

such assistance such applicants could not afford the dwelling or

make payments on the indebtedness of the rental or cooperative

housing. In the case of assistance provided under this subparagraph

with respect to a loan under section 1472 of this title, the

Secretary may not reduce, cancel, or refuse to renew the assistance

due to an increase in the adjusted income of the borrower if the

reduction, cancellation, or nonrenewal will cause the borrower to

be unable to reasonably afford the resulting payments required

under the loan.

this title who the Secretary determines are unable to afford a

dwelling with the assistance provided under subparagraph (B) and

when the Secretary determines that assisted rental housing programs

(as authorized under this subchapter, the National Housing Act [12

U.S.C. 1701 et seq.], and the United States Housing Act of 1937 [42

U.S.C. 1437 et seq.]) would be unsuitable in the area in which such

persons reside, the Secretary may provide additional assistance,

pursuant to amounts approved in appropriation Acts and for such

periods of time as the Secretary may determine, which may be in an

amount not to exceed the difference between (i) the amount

determined by the Secretary to be necessary to pay the principal

indebtedness, interest, taxes, insurance, utilities, and

maintenance, and (ii) 25 per centum of the income of such

applicant. The amount of such additional assistance which may be

approved in appropriation Acts may not exceed an aggregate amount

of $100,000,000. Such additional assistance may not be so approved

with respect to any fiscal year beginning on or after October 1,

1981.

(D)(i) With respect to borrowers under section 1472 or 1487(a) of

this title who have received assistance under subparagraph (B) or

(C), the Secretary shall provide for the recapture of all or a

portion of such assistance rendered upon the disposition or

nonoccupancy of the property by the borrower. In providing for such

recapture, the Secretary shall make provisions to provide

incentives for the borrower to maintain the property in a

marketable condition. Notwithstanding any other provision of law,

any such assistance whenever rendered shall constitute a debt

secured by the security instruments given by the borrower to the

Secretary to the extent that the Secretary may provide for

recapture of such assistance.

(ii) In determining the amount recaptured under this subparagraph

with respect to any loan made pursuant to section 1472(a)(3) of

this title for the purchase of a dwelling located on land owned by

a community land trust, the Secretary shall determine any

appreciation of the dwelling based on any agreement between the

borrower and the community land trust that limits the sale price or

appreciation of the dwelling.

(E) Except for Federal or State laws relating to taxation, the

assistance rendered to any borrower under subparagraphs (B) and (C)

shall not be considered to be income or resources for any purpose

under any Federal or State laws including, but not limited to, laws

relating to welfare and public assistance programs.

(F) Loans subject to the interest rates and assistance provided

under this paragraph (1) may be made only when the Secretary

determines the needs of the applicant for necessary housing cannot

be met with financial assistance from other sources including

assistance under the National Housing Act [12 U.S.C. 1701 et seq.]

and the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.].

(G) Interest on loans under section 1472 or 1487(a) of this title

to victims of a natural disaster shall not exceed the rate which

would be applicable to such loans under section 1472 of this title

without regard to this section.

(2)(A) The Secretary shall make and insure loans under this

section and sections 1484, 1485, and 1487 of this title to provide

rental or cooperative housing and related facilities for persons

and families of low income in multifamily housing projects, and

shall make, and contract to make, assistance payments to the owners

of such rental, congregate, or cooperative housing in order to make

available to low-income occupants of such housing rentals at rates

commensurate to income and not exceeding the highest of (i) 30 per

centum of monthly adjusted income, (ii) 10 per centum of monthly

income, or (iii) if the person or family is receiving payments for

welfare assistance from a public agency, the portion of such

payments which is specifically designated by such agency to meet

the person's or family's housing costs. Any rent or contribution of

any recipient shall not increase as a result of this section or any

other provision of Federal law or regulation by more than 10 per

centum during any twelve-month period, unless the increase above 10

per centum is attributable to increases in income which are

unrelated to this subsection or other law or regulation.

(B) The owner of any project assisted under this paragraph or

paragraph (5) shall be required to provide at least annually a

budget of operating expenses and record of tenants' income. The

budget (and the income, in the case of a project assisted under

this paragraph) shall be used to determine the amount of the

assistance for each project.

periodically pay to the Secretary any rental charges collected in

excess of basic rental charges as established by the Secretary in

conformity with subparagraph (A). These funds may be credited to

the appropriation and used by the Secretary for making such

assistance payments through the end of the next fiscal year.

Notwithstanding the preceding sentence, excess funds received from

tenants in projects financed under section 1485 of this title

during a fiscal year shall be available during the next succeeding

fiscal year, together with funds provided under subparagraph (D),

to the extent approved in appropriations Acts, to make assistance

payments to reduce rent overburden on behalf of tenants of any such

project whose rents exceed the levels referred to in subparagraph

(A). In providing assistance to relieve rent overburden, the

Secretary shall provide assistance with respect to very low-income

and low-income families to reduce housing rentals to the levels

specified in subparagraph (A).

(D) The Secretary, to the extent approved in appropriation Acts,

may enter into rental assistance contracts aggregating not more

than $398,000,000 in carrying out subparagraph (A) with respect to

the fiscal year ending on September 30, 1982.

(E) In order to assist elderly or handicapped persons or families

who elect to live in a shared housing arrangement in which they

benefit as a result of sharing the facilities of a dwelling with

others in a manner that effectively and efficiently meets their

housing needs and thereby reduces their cost of housing, the

Secretary shall permit rental assistance to be used by such persons

or families if the shared housing arrangement is in a single-family

dwelling. For the purpose of this subparagraph, the Secretary shall

prescribe minimum habitability standards to assure decent, safe,

and sanitary housing for such families while taking into account

the special circumstances of shared housing.

(3)(A) In the case of loans under sections 1484 and 1485 of this

title approved prior to the effective date of this paragraph with

respect to which rental assistance is provided, the rent for

tenants receiving such assistance shall not exceed the highest of

(i) 30 per centum of monthly adjusted income, (ii) 10 per centum of

monthly income, or (iii) if the person or family is receiving

payments for welfare assistance from a public agency, the portion

of such payments which is specifically designated by such agency to

meet the person's or family's housing costs.

(B) In the case of a section 1485 loan approved prior to the

effective date of this paragraph with respect to which interest

credits are provided, the tenant's rent shall not exceed the

highest of (i) 30 per centum of monthly adjusted income, (ii) 10

per centum of monthly income, or (iii) if the person or family is

receiving payments for welfare assistance from a public agency, the

portion of such payments which is specifically designated by such

agency to meet the person's or family's housing costs, or, where no

rental assistance authority is available, the rent level

established on a basis of a 1 per centum interest rate on debt

service.

this title shall be increased as a result of this subsection or

other provision of Federal law or Federal regulation by more than

10 per centum in any twelve-month period, unless the increase above

10 per centum is attributable to increases in income which are

unrelated to this subsection or other law, or regulation.

(4) In the case of a loan with respect to the purchase of a

manufactured home with respect to which rental assistance is

provided, the monthly payment for principal and interest on the

manufactured home and for lot rental and utilities shall not exceed

the highest of (A) 30 per centum of monthly adjusted income, (B) 10

per centum of monthly income, or (C) if the person or family is

receiving payments for welfare assistance from a public agency, the

portion of such payments which is specifically designated by such

agency to meet the person's or family's housing costs.

(5) Operating assistance for migrant farmworker projects. -

(A) Authority. - In the case of housing (and related

facilities) for migrant farmworkers provided or assisted with a

loan under section 1484 of this title or a grant under section

1486 of this title, the Secretary may, at the request of the

owner of the project, use amounts provided for rental assistance

payments under paragraph (2) to provide assistance for the costs

of operating the project. Any tenant or unit assisted under this

paragraph may not receive rental assistance under paragraph (2).

(B) Amount. - In any fiscal year, the assistance provided under

this paragraph for any project shall not exceed an amount equal

to 90 percent of the operating costs for the project for the

year, as determined by the Secretary. The amount of assistance to

be provided for a project under this paragraph shall be an amount

that makes units in the project available to migrant farmworkers

in the area of the project at rates not exceeding 30 percent of

the monthly adjusted incomes of such farmworkers, based on the

prevailing incomes of such farmworkers in the area.

assisted under this paragraph shall be required to provide to the

Secretary, at least annually, a budget of operating expenses and

estimated rental income, which the Secretary may use to determine

the amount of assistance for the project.

(D) Definitions. - For purposes of this paragraph, the

following definitions shall apply:

(i) The term "migrant farmworker" has the same meaning given

such term in section 1486(k)(7) of this title.

(ii) The term "operating cost" means expenses incurred in

operating a project, including expenses for -

(I) administration, maintenance, repair, and security of

the project;

(II) utilities, fuel, furnishings, and equipment for the

project; and

(III) maintaining adequate reserve funds for the project.

(b) Location in rural areas; inclusion of qualified nonrural

residents who will become rural residents

Housing and related facilities provided with loans described in

subsection (a) of this section shall be located in rural areas; and

applicants eligible for such loans under section 1472,

1487(a)(1),(!2) or 1490f(a) of this title, or for occupancy of

housing provided with such loans under section 1485 or 1490f(c) of

this title, shall include otherwise qualified nonrural residents

who will become rural residents.

There shall be reimbursed to the Rural Housing Insurance Fund by

annual appropriations (1) the amounts by which nonprincipal

payments made from the fund during each fiscal year to the holders

of insured loans described in subsection (a)(1) of this section

exceed interest due from the borrowers during each year, and (2)

the amount of assistance payments described in subsections (a)(2)

and (a)(5) of this section. There are authorized to be appropriated

to the Rural Housing Insurance Fund such sums as may be necessary

to reimburse such fund for the amount of assistance payments

described in subsection (a)(1)(C) of this section. The Secretary

may from time to time issue notes to the Secretary of the Treasury

under section 1487(h) and of this title and section 1490f of this

title to obtain amounts equal to such unreimbursed payments,

pending the annual reimbursement by appropriation.

(d) Rental assistance contract authority; preconditions,

limitations, etc.

(1) In utilizing the rental assistance payments authority

pursuant to subsection (a)(2) of this section -

(A) the Secretary shall make such assistance available in

existing projects for units occupied by low income families or

persons to extend expiring contracts or to provide additional

assistance when necessary to provide the full amount authorized

pursuant to existing contracts;

(B) any such authority remaining after carrying out

subparagraph (A) shall be used in projects receiving commitments

under section 1484, 1485, or 1486 of this title after fiscal year

1983 for contracts to assist very low-income families or persons

to occupy the units in such projects, except that not more than 5

percent of the units assisted may be occupied by low income

families or persons who are not very low-income families or

persons; and

subparagraphs (A) and (B) may be used to provide further

assistance to existing projects under section 1484, 1485, or 1486

of this title.

(2) The Secretary shall transfer rental assistance contract

authority under this section from projects where such authority is

unused after initial rentup and not needed because of a lack of

eligible tenants in the area to projects where such authority is

needed.

(e) Increases in rent or contribution of any recipient

Any rent or contribution of any recipient or any tenant in a

project assisted under subsection (a)(5) of this section shall not

increase as a result of this section, any amendment thereto, or any

other provision of Federal law or regulation by more than 10 per

centum during any twelve-month period, unless the increase above 10

per centum is attributable to increases in income which are

unrelated to this subsection or other law or regulation.

-SOURCE-

(July 15, 1949, ch. 338, title V, Sec. 521, as added Pub. L.

90-448, title X, Sec. 1001, Aug. 1, 1968, 82 Stat. 551; amended

Pub. L. 93-383, title V, Secs. 514(a), (b), 516(c), Aug. 22, 1974,

88 Stat. 696, 698; Pub. L. 94-375, Sec. 25(a), Aug. 3, 1976, 90

Stat. 1078; Pub. L. 95-128, title V, Secs. 502(d), 507(a)(4), (5),

511, Oct. 12, 1977, 91 Stat. 1139, 1140, 1142; Pub. L. 95-557,

title V, Secs. 506(a), 507, Oct. 31, 1978, 92 Stat. 2112, 2113;

Pub. L. 96-153, title V, Secs. 501(c), 502(a), 504, Dec. 21, 1979,

93 Stat. 1133-1135; Pub. L. 96-372, Sec. 6(d), Oct. 3, 1980, 94

Stat. 1364; Pub. L. 96-399, title V, Secs. 501(e), (f), 505, Oct.

8, 1980, 94 Stat. 1668, 1669; Pub. L. 97-35, title III, Secs.

351(d), 352, Aug. 13, 1981, 95 Stat. 421; Pub. L. 98-181, title V,

Secs. 516, 517(a)-(c), (e), Nov. 30, 1983, 97 Stat. 1247-1249; Pub.

L. 98-479, title I, Sec. 105(h), Oct. 17, 1984, 98 Stat. 2227; Pub.

L. 100-242, title III, Secs. 309, 316(d), Feb. 5, 1988, 101 Stat.

1896, 1898; Pub. L. 101-625, title VII, Sec. 716, Nov. 28, 1990,

104 Stat. 4296; Pub. L. 102-550, title VII, Sec. 702(b), Oct. 28,

1992, 106 Stat. 3834; Pub. L. 105-276, title V, Sec. 599C(e)(1),

(e)(2)(D)-(F), Oct. 21, 1998, 112 Stat. 2661, 2663; Pub. L.

106-569, title VII, Sec. 706, Dec. 27, 2000, 114 Stat. 3015.)

-REFTEXT-

REFERENCES IN TEXT

Section 1487(a) of this title, referred to in subsecs. (a)(1)(A)

and (b), was amended by Pub. L. 98-181, title V, Sec. 514(a)(1),

Nov. 30, 1983, 98 Stat. 1247, and, as so amended, does not contain

a par. (1).

The National Housing Act, referred to in subsec. (a)(1)(C) and

(F), is act June 27, 1934, ch. 847, 48 Stat. 1246, as amended,

which is classified principally to chapter 13 (Sec. 1701 et seq.)

of Title 12, Banks and Banking. For complete classification of this

Act to the Code, see section 1701 of Title 12 and Tables.

The United States Housing Act of 1937, referred to in subsec.

(a)(1)(C) and (F), is act Sept. 1, 1937, ch. 896, as revised

generally by Pub. L. 93-383, title II, Sec. 201(a), Aug. 22, 1974,

88 Stat. 653, and amended, which is classified generally to chapter

8 (Sec. 1437 et seq.) of this title. For complete classification of

this Act to the Code, see Short Title note set out under section

1437 of this title and Tables.

The effective date of this paragraph, referred to in subsec.

(a)(3)(A) and (B), is six months after Nov. 30, 1983, or upon the

earlier promulgation of implementing regulations by the Secretary.

See section 517(f) of Pub. L. 98-181, set out as an Effective Date

of 1983 Amendment note below.

-MISC1-

AMENDMENTS

2000 - Subsec. (a)(5)(A). Pub. L. 106-569 substituted "Any tenant

or unit assisted" for "Any project assisted" in last sentence.

1998 - Subsec. (a)(2)(B). Pub. L. 105-276, Sec. 599C(e)(2)(D),

inserted "or paragraph (5)" after "this paragraph" and substituted

". The budget (and the income, in the case of a project assisted

under this paragraph) shall be used to determine the amount of the

assistance for each project." for "which shall be used to determine

the amount of assistance for each project."

Subsec. (a)(5). Pub. L. 105-276, Sec. 599C(e)(1), added par. (5).

Subsec. (c)(2). Pub. L. 105-276, Sec. 599C(e)(2)(E), substituted

"subsections (a)(2) and (a)(5)" for "subsection (a)(2)".

Subsec. (e). Pub. L. 105-276, Sec. 599C(e)(2)(F), inserted "or

any tenant in a project assisted under subsection (a)(5) of this

section" after "recipient".

1992 - Subsec. (a)(1)(D). Pub. L. 102-550 designated existing

provisions as cl. (i) and added cl. (ii).

1990 - Subsec. (a)(2)(C). Pub. L. 101-625 inserted at end

"Notwithstanding the preceding sentence, excess funds received from