38 U.S.C. § 2052 — Requirements

(a) A loan covered by section 2051 meets this subchapter’s requirements only if all of these conditions are met: (1) The loan is for construction, rehabilitation, or land acquisition for a multifamily transitional housing project described in subsection (b), or for more than one of those purposes; or it refinances an existing loan for such a project. The loan may also include reasonable additional amounts to finance furniture, equipment, supplies, or materials for the project. If the loan is for construction, rehabilitation, or land acquisition, it may also include working capital for the organization operating the project. (2) A State or local government, a nongovernmental entity, or both, provides funding or substantial property or services for the project. (3) The maximum loan is no more than the smaller of: (A) the amount normally approved, using prudent underwriting principles, for similar projects with similar risk so the loan can be repaid; or (B) 90 percent of the project’s total cost. (4) The loan has sound value, considering the creditworthiness of the applying entity and its individual members. (5) The loan is secured. (6) The loan has terms and conditions that the Secretary finds reasonable, considering other housing projects similar in size, location, population, and services. (b) For this subchapter, a multifamily transitional housing project is a project that: (1) provides transitional housing to homeless veterans. The housing may be single-room occupancy housing, as defined in section 8(n) of the United States Housing Act of 1937 (42 U.S.C. 1437f(n)); (2) provides supportive and counseling services, including job counseling, at the project site, with the goal of helping the veterans become self-sufficient; (3) requires each veteran to seek and keep employment; (4) charges a reasonable fee for occupying a unit; and (5) has strict sobriety rules as a condition of occupying a unit. (c) The project: (1) may include space for neighborhood retail services, other commercial activities, or job-training programs; and (2) may provide transitional housing to veterans who are not homeless and to homeless people who are not veterans only if: (A) when that person moves in, the transitional housing needs of homeless veterans in the project area have been met; (B) that person’s housing needs can be met in a way compatible with how the project meets homeless veterans’ needs under subsection (b)(1); and (C) the fee and sobriety requirements in subsection (b)(4) and (5) are met. (d) When deciding whether to guarantee a loan, the Secretary must consider: (1) whether Department of Veterans Affairs medical services are available to project residents; and (2) how fully the community meets homeless veterans’ needs, as assessed under section 107 of Public Law 102–405. The terms “supportive services,” “counseling services,” and “reasonable fee” are not defined in this section.