42 U.S.C. § 12898a — Enterprise zone homeownership opportunity grants

submitted 34 years ago by Pub. L. 102-550 to r/title-42-THE-PUBLIC-HEALTH-AND-WELFARE · 1,047 words · no verdicts yet

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This program gives grants to nonprofits building homes in enterprise zones. Nonprofits then give buyers interest-free loans to help pay for the homes. Buyers must meet income limits, make a down payment, and can't lease the home.

(a) Statement of purpose: The section aims to: encourage homeownership among families who couldn't otherwise afford it; encourage redevelopment of economically depressed areas; and create better housing options in federally approved or equivalent state-approved enterprise zones. (b) Definitions: "Home" means a 1- to 4-family dwelling, including a condo or co-op unit (in a project of no more than 4 units), a town house, or a manufactured home. "Metropolitan statistical area" is the one set by the Office of Management and Budget. "Nonprofit organization" means a private nonprofit corporation or entity the Secretary approves as financially responsible. "Secretary" means the Secretary of Housing and Urban Development. "State" includes the states, D.C., Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and other U.S. territories. "Unit of general local government" means a borough, city, county, parish, town, township, village, or similar political subdivision. (c) Assistance to nonprofit organizations: The Secretary can give grants to nonprofits to run enterprise zone homeownership programs. Applications follow whatever form and process the Secretary sets. (d) Eligible uses of assistance: A nonprofit getting this grant must use it to give loans to families buying homes built or fixed up under an approved program. Each loan must be secured by a second mortgage held by the Secretary; not exceed $15,000; charge no interest; and be repaid to the Secretary when the property is sold, leased, or otherwise transferred. (e) Program requirements: Assistance can only be used for building or fixing up homes under an enterprise zone program. Each buying family must have income at purchase time no higher than the median income for a 4-person family (adjusted for family size) in that metropolitan area, and must not have owned a home in the past 3 years. Each buying family must make a down payment of at least 5% of the sale price. A family that buys a home this way can't lease it out. (f) Terms and conditions of assistance: The Secretary can't approve a program unless the applicant shows it consulted with and got support from neighborhood residents, and got approval from each local government where the program will operate. Each applicant must submit an estimated completion schedule agreed to by each relevant local government. All homes must be in federally approved or equivalent state-approved enterprise zones. Sales contracts must require repayment of the loan when the home is sold or transferred, unless the Secretary approves a transfer without repayment — in which case the second mortgage stays in force until the loan is fully repaid. (g) Program selection criteria: In picking which programs to fund, the Secretary considers how much non-federal land contribution makes the program feasible; how much non-federal financial or other help (like tax abatements or waived fees) will lower building costs; how many units each program will produce per dollar of assistance, accounting for cost differences between markets; and how much local residents are involved in planning and construction. If state law bars a non-federal public entity from making the kind of contribution described above, the Secretary won't count that against the program. (h) Regulations: Within 180 days of October 28, 1992, the Secretary must issue final regulations, following the normal notice process under section 553 of title 5 (despite an exception that section otherwise allows). (i) Funding: $30,000,000 is authorized for each of fiscal years 1993 and 1994.

the actual law source: uscode.house.gov ↗public domain

(a) Statement of purpose

It is the purpose of this section—

(1)

to encourage homeownership by families in the United States who are not otherwise able to afford homeownership;

(2)

to encourage the redevelopment of economically depressed areas; and

(3)

to provide better housing opportunities in federally approved and equivalent State-approved enterprise zones.

(b) Definitions

For purposes of this section the following definitions shall apply:

(1) Home

The term “home” means any 1- to 4-family dwelling. Such term includes any dwelling unit in a condominium project or cooperative project consisting of not more than 4 dwelling units, any town house, and any manufactured home.

(2) Metropolitan statistical area

The term “metropolitan statistical area” means a metropolitan statistical area as established by the Office of Management and Budget.

(3) Nonprofit organization

The term “nonprofit organization” means a private nonprofit corporation, or other private nonprofit legal entity, that is approved by the Secretary as to financial responsibility.

(4) Secretary

The term “Secretary” means the Secretary of Housing and Urban Development.

(5) State

The term “State” means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States.

(6) Unit of general local government

The term “unit of general local government” means any borough, city, county, parish, town, township, village, or other general purpose political subdivision of a State.

(1) In general

The Secretary may provide assistance to nonprofit organizations to carry out enterprise zone homeownership opportunity programs to promote homeownership in federally approved and equivalent State-approved enterprise zones in accordance with the provisions of this section. Such assistance shall be made in the form of grants.

(2) Applications

Applications for assistance under this section shall be made in such form, and in accordance with such procedures, as the Secretary may prescribe.

(d) Eligible uses of assistance

(1) In general

Any nonprofit organization receiving assistance under this section shall use such assistance to provide loans to families purchasing homes constructed or rehabilitated in accordance with an enterprise zone homeownership opportunity program approved under this section.

(2) Specific requirements

Each loan made to a family under this subsection shall—

(A)

be secured by a second mortgage held by the Secretary on the property involved;

(B)

be in an amount not exceeding $15,000;

(C)

bear no interest; and

(D)

be repayable to the Secretary upon the sales, lease, or other transfer of such property.

(e) Program requirements

(1) In general

Assistance provided under this section may be used only in connection with an enterprise zone homeownership opportunity program of construction or rehabilitation of homes.

(2) Family need

Each family purchasing a home under this section shall—

(A)

have a family income on the date of such purchase that is not more than the median income for a family of 4 persons (adjusted for family size) in the metropolitan statistical area in which a federally approved or equivalent State-approved enterprise zone is located; and

(B)

not have owned a home during the 3-year period preceding such purchase.

(3) Downpayment

Each family purchasing a home under this section shall make a downpayment of not less than 5 percent of the sale price of such home.

(4) Leasing prohibition

No family purchasing a home under this section may lease such home.

(f) Terms and conditions of assistance

(1) Local consultation

No proposed enterprise zone homeownership opportunity program may be approved by the Secretary under this section unless the applicant involved demonstrates to the satisfaction of the Secretary that—

(A)

it has consulted with and received the support of residents of the neighborhood in which such program is to be located; and

(B)

it has the approval of each unit of general local government in which such program is to be located.

(2) Program schedule

Each applicant for assistance under this section shall submit to the Secretary an estimated schedule for completion of its proposed enterprise zone homeownership opportunity program, which schedule shall have been agreed to by each unit of general local government in which such program is to be located.

(3) Location

All homes constructed or rehabilitated under such program will be located in federally approved or equivalent State-approved enterprise zones.

(4) Sales contracts

Sales contracts entered into under such program will contain provisions requiring repayment of any loan made under this section upon the sale or other transfer of the home involved, unless the Secretary approves a transfer of such home without repayment (in which case the second mortgage held by the Secretary on such home shall remain in force until such loan is fully repaid).

(g) Program selection criteria

(1) In general

In selecting enterprise zone homeownership opportunity programs for assistance under this section from among eligible programs, the Secretary shall make such selection on the basis of the extent to which—

(A)

non-Federal public or private entities will contribute land necessary to make each program feasible;

(B)

non-Federal public and private financial or other contributions (including tax abatements, waivers of fees related to development, waivers of construction, development, or zoning requirements, and direct financial contributions) will reduce the cost of home 1 constructed or rehabilitated under each program;

(C)

each program will produce the greatest number of units for the least amount of assistance provided under this section, taking into consideration the cost differences among different market areas; and

(D)

each program provides for the involvement of local residents in the planning, and construction or rehabilitation, of homes.

(2) Exception

To the extent that non-Federal public entities are prohibited by the law of any State from making any form of contribution described in subparagraph (A) or (B) of paragraph (1), the Secretary shall not consider such form of contribution in evaluating such program.

(h) Regulations

Not later than 180 days after October 28, 1992, the Secretary shall issue final regulations to carry out the provisions of this title.2 Any such regulations shall be issued in accordance with section 553 of title 5, notwithstanding the provisions of subsection (a)(2) of such section.

(i) Funding

There are authorized to be appropriated to carry out this section $30,000,000 in each of fiscal years 1993 and 1994.

Source credit: (Pub. L. 102–550, title I, § 186, Oct. 28, 1992, 106 Stat. 3748.)

history & why it existsrecord from the source credit

1992Enacted · Pub. L. 102-550 · 106 Stat. 3748

A history note hasn’t been published yet. The record shows enactment by Pub. L. 102-550 on 1992-10-28.

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