42 U.S.C. § 1437z–4 — Resident homeownership programs

(a) A public housing agency^* may run a homeownership program under this section and its agency plan to make public-housing units, projects, and other housing available for purchase by low-income families^* for use only as their principal residences. The agency may transfer a unit only under a program authorized here and approved by the Secretary^*.

(b) The program may cover existing public-housing units or projects and other units or housing the agency owns, assists, operates, or acquires for the program.

(c)(1) Eligible purchasers are low-income^* families^* assisted by an agency, other low-income families, and entities formed to buy units and resell them to low-income families. (2) The agency may set other requirements or limits, including about employment or employment counseling or training, criminal activity, homeownership counseling, regular income, and other matters. An entity buying for resale must sell the units to low-income families within five years after acquiring them. It must use net proceeds from resale and management, calculated under the Secretary’s guidelines, for housing purposes such as resident organizations and capital-replacement reserves.

(d) Before making a sale, the agency must first offer the unit to its resident or residents, if any, or to an organization acting as a conduit for a sale to a resident.

(e) If a resident does not use that right of first refusal, the agency must, 90 days before displacement unless there is an imminent health or safety threat and subject to the Secretary’s notification guidelines, notify the resident that the unit will be sold; possession will not transfer until relocation; and every displaced resident will be offered comparable housing. The comparable housing must meet housing-quality standards and be in an area generally no less desirable than the old location. It may be tenant-based assistance, but that option satisfies the offer requirement only when the resident has moved into the assisted housing; project^*-based assistance; or an agency-owned, operated, or assisted unit at a comparable rent. The agency must pay actual and reasonable relocation costs, ensure the offer is made, provide needed counseling, and not transfer possession until relocation.

(f) The program may finance family purchases or the agency’s purchases for later sale in any way the agency considers suitable, including a sale to a resident management corporation.

(g)(1) Each purchasing family must provide a down payment from its own resources in an amount the agency sets. Except under paragraph (2), the agency must allow grants, relatives’ gifts, private contributions, and similar amounts to count. (2) The family’s own resources, excluding those amounts, must provide at least 1 percent of the purchase price.

(h) The program may sell any ownership interest the agency considers suitable, including fee-simple ownership, a condominium interest, an interest in a limited-dividend cooperative, or a shared-appreciation interest with an agency that provides financing.

(i)(1) The program must allow an eligible family to resell a purchased unit, but may impose suitable limits so the agency can recover some or all of the economic gain from a resale during the first five years after purchase, and after five years only amounts equal to the agency’s assistance under this section. (2) First-five-year limits may consider total assistance, the family’s equity contribution, time since purchase, the reason for resale, family improvements, property appreciation, and any other suitable factors.

(j) Net sales proceeds after all sale costs must be used for low-income-housing purposes under the program agency plan.

(k) From Capital Fund^* amounts under section 1437g(d), or other agency income, the agency may help residents buy a principal residence, including one outside a public-housing project.

(l) Section 1437p does not apply to disposing of units under this program.