§ 1715z-11a. — Disposition of HUDowned properties.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715z-11a]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-11a. Disposition of HUD-owned properties
(a) Flexible authority for multifamily projects
During fiscal year 1997 and fiscal years thereafter, the Secretary
may manage and dispose of multifamily properties owned by the Secretary,
including, for fiscal years 1997, 1998, 1999, 2000, and thereafter, the
provision of grants and loans from the General Insurance Fund (12 U.S.C.
1735c) for the necessary costs of rehabilitation, demolition, or
construction on the properties (which shall be eligible whether vacant
or occupied), and multifamily mortgages held by the Secretary on such
terms and conditions as the Secretary may determine, notwithstanding any
other provision of law.
(b) Transfer of unoccupied and substandard housing to local governments
and community development corporations
(1) Transfer authority
Notwithstanding the authority under subsection (a) of this
section and the last sentence of section 1710(g) of this title, the
Secretary of Housing and Urban Development shall transfer ownership
of any qualified HUD property, subject to the requirements of this
section, to a unit of general local government having jurisdiction
for the area in which the property is located or to a community
development corporation which operates within such a unit of general
local government in accordance with this subsection, but only to the
extent that units of general local government and community
development corporations consent to transfer and the Secretary
determines that such transfer is practicable.
(2) Qualified HUD properties
For purposes of this subsection, the term ``qualified HUD
property'' means any property for which, as of the date that
notification of the property is first made under paragraph (3)(B),
not less than 6 months have elapsed since the later of the date that
the property was acquired by the Secretary or the date that the
property was determined to be unoccupied or substandard, that is
owned by the Secretary and is--
(A) an unoccupied multifamily housing project;
(B) a substandard multifamily housing project; or
(C) an unoccupied single family property that--
(i) has been determined by the Secretary not to be an
eligible asset under section 1710(h) of this title; or
(ii) is an eligible asset under such section 1710(h) of
this title, but--
(I) is not subject to a specific sale agreement
under such section; and
(II) has been determined by the Secretary to be
inappropriate for continued inclusion in the program
under such section 1710(h) of this title pursuant to
paragraph (10) of such section.
(3) Timing
The Secretary shall establish procedures that provide for--
(A) time deadlines for transfers under this subsection;
(B) notification to units of general local government and
community development corporations of qualified HUD properties
in their jurisdictions;
(C) such units and corporations to express interest in the
transfer under this subsection of such properties;
(D) a right of first refusal for transfer of qualified HUD
properties to units of general local government and community
development corporations, under which--
(i) the Secretary shall establish a period during which
the Secretary may not transfer such properties except to
such units and corporations;
(ii) the Secretary shall offer qualified HUD properties
that are single family properties for purchase by units of
general local government at a cost of $1 for each property,
but only to the extent that the costs to the Federal
Government of disposal at such price do not exceed the costs
to the Federal Government of disposing of property subject
to the procedures for single family property established by
the Secretary pursuant to the authority under the last
sentence of section 1710(g) of this title;
(iii) the Secretary may accept an offer to purchase a
property made by a community development corporation only if
the offer provides for purchase on a cost recovery basis;
and
(iv) the Secretary shall accept an offer to purchase
such a property that is made during such period by such a
unit or corporation and that complies with the requirements
of this paragraph; and
(E) a written explanation, to any unit of general local
government or community development corporation making an offer
to purchase a qualified HUD property under this subsection that
is not accepted, of the reason that such offer was not
acceptable.
(4) Other disposition
With respect to any qualified HUD property, if the Secretary
does not receive an acceptable offer to purchase the property
pursuant to the procedure established under paragraph (3), the
Secretary shall dispose of the property to the unit of general local
government in which property is located or to community development
corporations located in such unit of general local government on a
negotiated, competitive bid, or other basis, on such terms as the
Secretary deems appropriate.
(5) Satisfaction of indebtedness
Before transferring ownership of any qualified HUD property
pursuant to this subsection, the Secretary shall satisfy any
indebtedness incurred in connection with the property to be
transferred, by canceling the indebtedness.
(6) Determination of status of properties
To ensure compliance with the requirements of this subsection,
the Secretary shall take the following actions:
(A) Upon enactment
Upon the enactment of this subsection [December 21, 2000],
the Secretary shall promptly assess each residential property
owned by the Secretary to determine whether such property is a
qualified HUD property.
(B) Upon acquisition
Upon acquiring any residential property, the Secretary shall
promptly determine whether the property is a qualified HUD
property.
(C) Updates
The Secretary shall periodically reassess the residential
properties owned by the Secretary to determine whether any such
properties have become qualified HUD properties.
(7) Tenant leases
This subsection shall not affect the terms or the enforceability
of any contract or lease entered into with respect to any
residential property before the date that such property becomes a
qualified HUD property.
(8) Use of property
Property transferred under this subsection shall be used only
for appropriate neighborhood revitalization efforts, including
homeownership, rental units, commercial space, and parks, consistent
with local zoning regulations, local building codes, and subdivision
regulations and restrictions of record.
(9) Inapplicability to properties made available for
homeless
Notwithstanding any other provision of this subsection, this
subsection shall not apply to any properties that the Secretary
determines are to be made available for use by the homeless pursuant
to subpart E of part 291 of title 24, Code of Federal Regulations,
during the period that the properties are so available.
(10) Protection of existing contracts
This subsection may not be construed to alter, affect, or annul
any legally binding obligations entered into with respect to a
qualified HUD property before the property becomes a qualified HUD
property.
(11) Definitions
For purposes of this subsection, the following definitions shall
apply:
(A) Community development corporation
The term ``community development corporation'' means a
nonprofit organization whose primary purpose is to promote
community development by providing housing opportunities for
low-income families.
(B) Cost recovery basis
The term ``cost recovery basis'' means, with respect to any
sale of a residential property by the Secretary, that the
purchase price paid by the purchaser is equal to or greater than
the sum of: (i) the appraised value of the property, as
determined in accordance with such requirements as the Secretary
shall establish; and (ii) the costs incurred by the Secretary in
connection with such property during the period beginning on the
date on which the Secretary acquires title to the property and
ending on the date on which the sale is consummated.
(C) Multifamily housing project
The term ``multifamily housing project'' has the meaning
given the term in section 1701z-11 of this title.
(D) Residential property
The term ``residential property'' means a property that is a
multifamily housing project or a single family property.
(E) Secretary
The term ``Secretary'' means the Secretary of Housing and
Urban Development.
(F) Severe physical problems
The term ``severe physical problems'' means, with respect to
a dwelling unit, that the unit--
(i) lacks hot or cold piped water, a flush toilet, or
both a bathtub and a shower in the unit, for the exclusive
use of that unit;
(ii) on not less than three separate occasions during
the preceding winter months, was uncomfortably cold for a
period of more than 6 consecutive hours due to a malfunction
of the heating system for the unit;
(iii) has no functioning electrical service, exposed
wiring, any room in which there is not a functioning
electrical outlet, or has experienced three or more blown
fuses or tripped circuit breakers during the preceding 90-
day period;
(iv) is accessible through a public hallway in which
there are no working light fixtures, loose or missing steps
or railings, and no elevator; or
(v) has severe maintenance problems, including water
leaks involving the roof, windows, doors, basement, or pipes
or plumbing fixtures, holes or open cracks in walls or
ceilings, severe paint peeling or broken plaster, and signs
of rodent infestation.
(G) Single family property
The term ``single family property'' means a 1- to 4-family
residence.
(H) Substandard
The term ``substandard'' means, with respect to a
multifamily housing project, that 25 percent or more of the
dwelling units in the project have severe physical problems.
(I) Unit of general local government
The term ``unit of general local government'' has the
meaning given such term in section 5302(a) of title 42.
(J) Unoccupied
The term ``unoccupied'' means, with respect to a residential
property, that the unit of general local government having
jurisdiction over the area in which the project is located has
certified in writing that the property is not inhabited.
(12) Regulations
(A) Interim
Not later than 30 days after December 21, 2000, the
Secretary shall issue such interim regulations as are necessary
to carry out this subsection.
(B) Final
Not later than 60 days after December 21, 2000, the
Secretary shall issue such final regulations as are necessary to
carry out this subsection.
(Pub. L. 104-204, title II, Sec. 204, Sept. 26, 1996, 110 Stat. 2894;
Pub. L. 105-65, title II, Sec. 213, Oct. 27, 1997, 111 Stat. 1366; Pub.
L. 105-276, title II, Sec. 206, Oct. 21, 1998, 112 Stat. 2484; Pub. L.
106-74, title V, Sec. 537, Oct. 20, 1999, 113 Stat. 1122; Pub. L. 106-
377, Sec. 1(a)(1) [title II, Sec. 204], Oct. 27, 2000, 114 Stat. 1441,
1441A-24; Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 141], Dec. 21,
2000, 114 Stat. 2763, 2763A-614.)
Codification
Section was enacted as part of the Departments of Veterans Affairs
and Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997, and not as part of the National Housing Act
which comprises this chapter.
Amendments
2000--Pub. L. 106-554 substituted ``Disposition of HUD-owned
properties'' for ``Flexible authority'' in section catchline, designated
existing provisions as subsec. (a), inserted heading, and added subsec.
(b).
Pub. L. 106-377 substituted ``2000, and thereafter'' for ``and
2000''.
1999--Pub. L. 106-74 substituted ``1999, and 2000'' for ``and 1999''
and ``, demolition, or construction on the properties (which shall be
eligible whether vacant or occupied)'' for ``or demolition''.
1998--Pub. L. 105-276 substituted ``fiscal years 1997, 1998, and
1999'' for ``fiscal years 1997 and 1998''.
1997--Pub. L. 105-65 inserted ``, including, for fiscal years 1997
and 1998, the provision of grants and loans from the General Insurance
Fund (12 U.S.C. 1735c) for the necessary costs of rehabilitation or
demolition,'' after ``owned by the Secretary''.
