Consolidated Omnibus Budget Reconciliation Act of 1985/Title III

==TITLE XX — HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS==

Sec. 3001. Short Title and Table of Sections.

(a) Short Title.—

This title may be cited as the “Housing and Community Development Reconciliation Amendments of 1985”.

(b) Table of Sections.—

Sec. 3002. Purchase of CDBG Guaranteed Obligations by the Federal Financing Bank.

(a) PROHIBITION.—Section 108 of the Housing and Community Development Act of 1974 is amended by adding at the end thereof the following:

"(1) Notes or other obligations guaranteed under this section may not be purchased by the Federal Financing Bank .".

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect on July 1, 1986.

(c) ADMINISTRATIVE ACTIONS.—The Secretary of Housing and Urban Development shall take such administrative actions as are necessary to provide by the effective date of subsection (a) private sector financing of loans guaranteed under section 108 of the Housing and Community Development Act of 1974.

Sec. 3003. Public Housing Operating Subsidies.

Section 9(c) of such Act is amended by striking out "and by" after "1983," and by inserting after "1984" the following:", and not to exceed $1,279,000,000 on or after October 1, 1985".

Sec. 3004. Public and Indian Housing Financing Reforms.

Section 4 of the United States Housing Act of 1937 is amended by adding at the end thereof the following new subsection:

"(c)(1) At such times as the Secretary may determine, and in accordance with such accounting and other procedures as the Secretary may prescribe, each loan made by the Secretary under subsection (a) that has any principal amount outstanding or any interest amount outstanding or accrued shall be forgiven ; and the terms and conditions of any contract, or any amendment to a contract, for such loan with respect to any promise to repay such principal and interest shall be canceled. Such cancellation shall not affect any other terms and conditions of such contract, which shall remain in effect as if the cancellation had not occurred . This paragraph shall not apply to any loan the repayment of which was not to be made using annual contributions, or to any loan all or part of the proceeds of which are due a public housing agency from contractors or others .

"(2)(A) On the date of the enactment of the Housing and Community Development Reconciliation Amendments of 1985, each note or other obligation issued by the Secretary to the Secretary of the Treasury pursuant to subsection (b), together with any promise to repay the principal and unpaid interest that has accrued on each note or obligation, shall be forgiven ; and any other term or condition specified by each such obligation shall be canceled .

"(B) On September 30, 1986, and on any subsequent September 30, each such note or other obligation issued by the Secretary to the Secretary of the Treasury pursuant to subsection (b) during the fiscal year ending on such date, together with any promise to repay the principal and unpaid interest that has accrued on each note or obligation, shall be forgiven; and any other term or condition specified by each such obligation shall be canceled.

"(3) Any amount of budget authority (and contract authority) that becomes available during any fiscal year as a result of the forgiveness of any loan, note, or obligation under this subsection shall be rescinded.".

Sec. 3005. Rural Housing Authorizations.

Subsection (a)(1) of section 513 of the Housing Act of 1949 is amended to read as follows:

"(a)(1) The Secretary may insure and guarantee loans under this title during fiscal year 1986 in an aggregate amount not to exceed $2,146,600,000, of which-

"(A) $1,209,600,000 shall be for loans under section 502 ;

"(B) $17,000,000 shall be for loans under section 504 ;

"(C) $19,000,000 shall be for loans under section 514 ;

"(D) $900,000,000 shall be for loans under section 515 ; and

"(E) $1,000,000 shall be for loans under section 524 .".

Sec. 3006. Management of Insured and Guaranteed Rural Housing Loans.

(a) SALE OF INSURED AND GUARANTEED LOANS TO PUBLIC .-Section 517(c) of the Housing Act of 1949 is amended by adding at the end thereof the following new sentence : "Any loan made and sold by the Secretary under this section after the date of the enactment of the Housing and Community Development Reconciliation Amendments of 1985 (and any loan made by other lenders under this title 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 title between the Secretary and the Federal Financing Bank occurring on or before such date.".

(b) INTEREST SUBSIDY ON INSURED AND GUARANTEED LOANS OFFERED FOR SALE TO PUBLIC .-Section 517(d) of the Housing Act of 1949 is amended-

(1) by inserting "(1)" after the subsection designation ; and

(2) by adding at the end thereof the following new paragraph :

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

(c) PROTECTION OF BORROWERS UNDER LOANS SOLD TO PUBLIC.- Section 517(d) of the Housing Act of 1949, as amended by subsection (b) of this section, is amended by adding at the end thereof the following new paragraph :

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

"(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

"(C) following any assignment under subparagraph (B) and before commencing any action to foreclose or otherwise dispossess the borrower, the Secretary shall afford the borrower all substantive and procedural rights arising under this title, 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 .".

(d) USE OF RURAL HOUSING INSURANCE FUND .-Section 517(j) of the Housing Act of 1949 is amended-

(1) by Striking out "and" at the end of paragraph (4);

(2) by striking out the period at the end of paragraph (5) and inserting in lieu thereof ` ; and"; and

(3) by adding at the end thereof the following new paragraph :

"(6) to make payments and take other actions in accordance with agreements entered into under paragraphs (2) and (3) of subsection (d) .".

(e) ELIGIBILITY FOR GUARANTEED LOANS .-Section 517 of the Housing Act of 1949 is amended by striking out subsection (n).

(f) REGULATIONS.-Section 517(o) of the Housing Act of 1949 is amended-

(1) by inserting "(1)" after the subsection designation ; and

(2) by adding at the end thereof the following new paragraph :

"(2) Not later than the expiration of the 90-day period following the date of the enactment of the Housing and Community Development Reconciliation Amendments of 1985, 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.".

Sec. 3007. Extension of Federal Housing Administration Mortgage Insurance Programs.

(a) TITLE I INSURANCE .-Section 2(a) of the National Housing Act is amended by striking out "prior to December 16, 1985" in the first Sentence and inserting in lieu thereof "not later than March 17, 1986".

(b) GENERAL INSURANCE .-Section 217 of the National Housing Act is amended by Striking out "December 15, 1985" and inserting in lieu thereof "March 17, 1986" .

(c) LOW AND MODERATE INCOME HOUSING INSURANCE.-Section 221(f) of the National Housing Act is amended by striking out "December 15, 1985" in the fifth Sentence and inserting in lieu thereof "March 17, 1986".

(d) SECTION 235 HOMEOWNERSHIP.-

(1) ASSISTANCE PAYMENTS AUTHORITY .-Section 235(h)(1) of the National Housing Act is amended by striking out "December 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

(2) INSURANCE AUTHORITY .-Section 235(m) of the National Housing Act is amended by striking out "December 15, 1985" and inserting in lieu thereof "March 17,1986" .

(3) HOUSING STIMULUS AUTHORITY .-Section 235(q)(1) of the National Housing Act is amended by striking out "December 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

(e) CO-INSURANCE.-

(1) GENERAL AUTHORITY .-Section 244(d) of the National Housing Act is amended by striking out "December 15, 1985" and inserting in lieu thereof "March 17, 1986" .

(2) RENTAL REHABILITATION AND DEVELOPMENT PROJECTS .-Section 244(h) of the National Housing Act is amended by striking out "on or after December 16, 1985" in the last sentence and inserting in lieu thereof "after March 17, 1986" .

(f) GRADUATED PAYMENT AND INDEXED MORTGAGE INSURANCE.- Section 245(a) of the National Housing Act is amended by striking out "December 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

(g) REINSURANCE CONTRACTS .-Section 249(a) of the National Housing Act is amended by striking out "December 15, 1985" in the second sentence and inserting in lieu thereof "March 17, 1986" .

(h) ARMED SERVICES HOUSING INSURANCE .-

(1) CIVILIAN EMPLOYEES OF ARMED FORCES .-Section 809(f) of the National Housing Act is amended by striking out "Decem- ber 15, 1985" in the last sentence and inserting in lieu thereof "March 17,1986" .

(2) DEFENSE HOUSING FOR IMPACTED AREAS .-Section 810(k) of the National Housing Act is amended by striking out "Decem- ber 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

(i) LAND DEVELOPMENT INSURANCE .-Section 1002(a) of the National Housing Act is amended by striking out "December 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

(j) GROUP PRACTICE FACILITIES INSURANCE .-Section 1101(a) of the National Housing Act is amended by striking out "December 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

Sec. 3008. Extension of Rehabilitation Loan Authority.

Section 312(h) of the Housing Act of 1964 is amended-

(1) by striking out "December 15, 1985" and inserting in lieu thereof "March 17, 1986" ; and

(2) by striking out "prior to December 16, 1985" and inserting in lieu thereof "on or before such date" .

Sec. 3009. Extension of Rural Housing Authorities.

(a) RENTAL HOUSING LOAN AUTHORITY .-Section 515(b)(4) of the Housing Act of 1949 is amended by striking out "December 15,1985" and inserting in lieu thereof "March 17, 1986" .

(b) RURAL AREA CLASSIFICATION .-Section 520 of the Housing Act of 1949 is amended by striking out "December 15, 1985" in the last sentence and inserting in lieu thereof "March 17, 1986" .

(c) MUTUAL AND SELF-HELP HOUSING GRANT AND LOAN AUTHORITY.- Section 523(f) of the Housing Act of 1949 is amended by striking out "December 15, 1985" and inserting in lieu thereof "March 17,1986" .

Sec. 3010. Extension of Flood and Crime Insurance Programs.

(a) FLOOD INSURANCE.-

(1) GENERAL AUTHORITY.-Section 1319 of the National Flood Insurance Act of 1968 is amended by striking out "December 15, 1985" and inserting in lieu thereof "March 17, 1986" .

(2) EMERGENCY IMPLEMENTATION .-Section 1336(a) of the Na- tional Flood Insurance Act of 1968 is amended by striking out "December 15, 1985" and inserting in lieu thereof "March 17, 1986".

(3) ESTABLISHMENT OF FLOOD-RISK ZONES .-Section 1360(a)(2) of the National Flood Insurance Act of 1968 is amended by striking out "December 15, 1985" and inserting in lieu thereof "March 17, 1986" .

(b) CRIME INSURANCE .-Section 1201(b)(1) of the National Housing Act is amended by striking out "December 15, 1985" in the matter preceding subparagraph (A) and inserting in lieu thereof "March 17, 1986".

Sec. 3011. Miscellaneous Extensions.

(a) COMMUNITY DEVELOPMENT BLOCK GRANT CLASSIFICATIONS.-

(1) METROPOLITAN CITY.-Section 102(a)(4) of the Housing and Community Development Act of 1974 is amended by striking out "December 15, 1985" in the second sentence and inserting in lieu thereof "March 17, 1986" .

(2) URBAN COUNTY.-Section 102(a)(6) of the Housing and Community Development Act of 1974 is amended by striking out "December 15, 1985" in the second sentence and inserting in lieu thereof "March 17, 1986" .

(b) SECTION 202 INTEREST RATE LIMITATION.-Section 223(a)(2) of the Housing and Urban-Rural Recovery Act of 1983 is amended by striking out "prior to December 16, 1985" and inserting in lieu thereof "not later than March 17, 1986" .

(c) HOME MORTGAGE DISCLOSURE ACT OF 1975.-Section 312 of the Home Mortgage Disclosure Act of 1975 is amended by striking out "December 16, 1985" and inserting in lieu thereof "March 17, 1986" .