§ 1701s. — Rent supplement payments for qualified lower income families.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1701s]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
Sec. 1701s. Rent supplement payments for qualified lower income
families
(a) Authorization; maximum term; maximum aggregate amount
The Secretary of Housing and Urban Development (hereinafter referred
to as the ``Secretary'') is authorized to make, and contract to make,
annual payments to a ``housing owner'' on behalf of ``qualified
tenants'', as those terms are defined herein, in such amounts and under
such circumstances as are prescribed in or pursuant to this section. In
no case shall a contract provide for such payments with respect to any
housing for a period exceeding forty years. The aggregate amount of the
contracts to make such payments shall not exceed amounts approved in
appropriation Acts, and payments pursuant to such contracts shall not
exceed $150,000,000 per annum prior to July 1, 1969, which maximum
dollar amount shall be increased by $40,000,000, on July 1, 1969, by
$100,000,000 on July 1, 1970, and by $40,000,000 on July 1, 1971.
(b) ``Housing owner'' defined; limitation on payments to housing owner
As used in this section, the term ``housing owner'' means a private
nonprofit corporation or other private nonprofit legal entity, a limited
dividend corporation or other limited dividend legal entity, or a
cooperative housing corporation, which is a mortgagor under section
221(d)(3) of the National Housing Act [12 U.S.C. 1715l(d)(3)] and which,
after August 10, 1965, has been approved for mortgage insurance
thereunder and has been approved for receiving the benefits of this
section: Provided, That, except as provided in subsection (j) of this
section, no payments under this section may be made with respect to any
property financed with a mortgage receiving the benefits of the interest
rate provided for in the proviso in section 221(d)(5) of that Act [12
U.S.C. 1715l(d)(5)]. Such term also includes a private nonprofit
corporation or other private nonprofit legal entity, a limited dividend
corporation or other limited dividend legal entity, or a cooperative
housing corporation, which is the owner of a rental or cooperative
housing project financed under a State or local program providing
assistance through loans, loan insurance, or tax abatement and which may
involve either new or existing construction and which is approved for
receiving the benefits of this section. Subject to the limitations
provided in subsection (j) of this section, the term ``housing owner''
also has the meaning prescribed in such subsection. Nothing in this
section shall be construed as preventing payments to a housing owner
with respect to projects in which all or part of the dwelling units do
not contain kitchen facilities; but of the total amount of contracts to
make annual payments approved in appropriation Acts pursuant to
subsection (a) of this section after December 31, 1970, not more than 10
per centum in the aggregate shall be made with respect to such projects.
(c) Definitions
As used in this section, the term--
(1) ``qualified tenant'' means any individual or family having
an income which would qualify such individual or family for
assistance under section 1437f of title 42, except that such term
shall also include any individual or family who was receiving
assistance under this section on the day preceding December 21,
1979, so long as such individual or family continues to meet the
conditions for such assistance which were in effect on such day; and
(2) ``income'' means income from all sources of each member of
the household, as determined in accordance with criteria prescribed
by the Secretary. In determining amounts to be excluded from income,
the Secretary may, in the Secretary's discretion, take into account
the number of minor children in the household and such other factors
as the Secretary may determine are appropriate.
The terms ``qualified tenant'' and ``tenant'' include a member of a
cooperative who satisfies the foregoing requirements and who, upon
resale of his membership to the cooperative, will not be reimbursed for
any equity increment accumulated through payments under this section.
With respect to members of a cooperative, the terms ``rental'' and
``rental charges'' mean the charges under the occupancy agreements
between such members and the cooperative.
(d) Annual payment amount
The amount of the annual payment with respect to any dwelling unit
shall be the lesser of (1) 70 per centum of the fair market rent, or (2)
the amount by which the fair market rental for such unit exceeds 30 per
centum of the tenant's adjusted income.
(e) Criteria and procedure for determining eligibility and rental
charges; recertification of income; agreements for services
required in selection of tenants; delegation of authority to
issue certificates
(1) For purposes of carrying out the provisions of this section, the
Secretary shall establish criteria and procedures for determining the
eligibility of occupants and rental charges, including criteria and
procedures with respect to periodic review of tenant incomes and
periodic adjustment of rental charges.
(2) Procedures adopted by the Secretary hereunder shall provide for
recertifications of the incomes of occupants no less frequently than
annually for the purpose of adjusting rental charges and annual payments
on the basis of occupants' incomes, but in no event shall rental charges
adjusted under this section for any dwelling exceed the fair market
rental of the dwelling.
(3) The Secretary may enter into agreements, or authorize housing
owners to enter into agreements, with public or private agencies for
services required in the selection of qualified tenants, including those
who may be approved, on the basis of the probability of future increases
in their incomes, as lessees under an option to purchase (which will
give such approved qualified tenants an exclusive right to purchase at a
price established or determined as provided in the option) dwellings,
and in the establishment of rentals. The Secretary is authorized
(without limiting his authority under any other provision of law) to
delegate to any such public or private agency his authority to issue
certificates pursuant to this subsection.
(4) No payments under this section may be made with respect to any
property for which the costs of operation (including wages and salaries)
are determined by the Secretary to be greater than similar costs of
operation of similar housing in the community where the property is
situated.
(f) Omitted
(g) Authority of Secretary
The Secretary is authorized to make such rules and regulations, to
enter into such agreements, and to adopt such procedures as he may deem
necessary or desirable to carry out the provisions of this section.
Nothing contained in this section shall affect the authority of the
Secretary of Housing and Urban Development with respect to any housing
assisted under this section, section 221(d)(3), section 231(c)(3), or
section 236 of the National Housing Act [12 U.S.C. 1715l(d)(3),
1715v(c)(3), 1715z-1], or section 1701q of this title, including the
authority to prescribe occupancy requirements under other provisions of
law or to determine the portion of such housing which may be occupied by
qualified tenants. To ensure that qualified tenants occupying that
number of units with respect to which assistance was being provided
under this section immediately prior to November 30, 1983, receive the
benefit of assistance contracted for under this section, the Secretary
shall offer annually to amend contracts entered into with owners of
projects assisted under this section but not subject to mortgages
insured under title II of the National Housing Act [12 U.S.C. 1707 et
seq.] to provide sufficient payments to cover 100 percent of the
necessary rent increases and changes in the incomes of qualified
tenants, subject to the availability of authority for such purpose under
section 1437c(c) of title 42. The Secretary shall take such actions as
may be necessary to ensure that payments, including payments that
reflect necessary rent increases and changes in the incomes of tenants,
are made on a timely basis for all units covered by contracts entered
into under this section.
(h) Authorization of appropriations
There are authorized to be appropriated such sums as may be
necessary to carry out the provisions of this section, including, but
not limited to, such sums as may be necessary to make annual payments as
prescribed in this section, pay for services provided under (or pursuant
to agreements entered into under) subsection (e) of this section, and
provide administrative expenses.
(i) Omitted
(j) Additional definition of housing owner; restrictions on payments
(1) For the purpose of assisting housing under this section on an
experimental basis, subject to the limitations of this subsection, the
term ``housing owner'' (in addition to the meaning prescribed in
subsection (b) of this section) includes--
(A) a private nonprofit corporation or other private nonprofit
legal entity, a limited dividend corporation or other limited
dividend legal entity, or a cooperative housing corporation, which
is a mortgagor under a mortgage which receives the benefits of the
interest rate provided for in the proviso in section 221(d)(5) of
the National Housing Act [12 U.S.C. 1715l(d)(5)] and which, after
August 10, 1965, has been approved for mortgage insurance under
section 221(d)(3) of the National Housing Act and has been approved
for receiving the benefits of this section;
(B) a private nonprofit corporation or other private nonprofit
legal entity which is a mortgagor under a mortgage insured under
section 231(c)(3) of the National Housing Act [12 U.S.C.
1715v(c)(3)] and which, after August 10, 1965, has obtained final
endorsement of such mortgage for mortgage insurance and has been
approved for receiving the benefits of this section;
(C) a private nonprofit corporation, a public body or agency, or
a cooperative housing corporation, which is a borrower under section
1701q of this title and has been approved for receiving the benefits
of this section: Provided, That, with respect to properties financed
with loans under such section made on or before August 10, 1965,
payments shall not be made with respect to more than 20 per centum
of the dwelling units in any property so financed; and
(D) a private nonprofit corporation or other private nonprofit
legal entity, a limited dividend corporation or other limited
dividend legal entity, or a cooperative housing corporation, which
is assisted under section 236 of the National Housing Act [12 U.S.C.
1715z-1] and which has been approved for receiving the benefits of
this section: Provided, That payments shall not be made with respect
to more than 20 per centum of the dwelling units in any property so
financed, except that the foregoing limitation may be increased to
40 per centum of the dwelling units in any such property if the
Secretary determines that such increase is necessary and desirable
in order to provide additional housing for individuals and families
meeting the requirements of subsection (c) of this section.
(2) Of the amounts approved in appropriation Acts pursuant to
subsection (a) of this section for payments under this section in any
year, not more than 5 per centum in the aggregate shall be paid with
respect to properties of housing owners as defined in paragraph (1)(A)
of this subsection, and not more than 5 per centum in the aggregate
shall be paid with respect to properties of housing owners as defined in
paragraphs (1)(B) and (1)(C) of this subsection.
(k) Repealed. Pub. L. 105-276, title V, Sec. 514(d), Oct. 21, 1998, 112
Stat. 2548
(l) Additional available assistance authority
Notwithstanding the provisions of subsection (a) of this section and
any other provision of law, the Secretary may utilize additional
authority under section 1437c(c) of title 42 made available by
appropriation Acts on or after October 1, 1979, to supplement assistance
authority available under this section. The Secretary shall utilize, to
the extent necessary after September 30, 1984, any authority under this
section that is recaptured either as the result of the conversion of
housing projects covered by assistance under this section to contracts
for assistance under section 1437f of title 42 or otherwise (1) for the
purpose of making assistance payments, including amendments as provided
in subsection (g) of this section, with respect to housing projects
assisted under this section, but not subject to mortgages insured under
the National Housing Act [12 U.S.C. 1701 et seq.], that remain covered
by assistance under this section; and (2) if not required to provide
assistance under this section, and notwithstanding any other provision
of law, for the purpose of contracting for assistance payments under
section 236(f)(2) of the National Housing Act [12 U.S.C. 1715z-1(f)(2)].
(m) Payments for benefit of certain projects having mortgages made by
State or local housing finance or government agencies
The Secretary shall, not later than 45 days after receipt of an
application by the mortgagee, provide interest reduction and rental
assistance payments for the benefit of projects assisted under this
section whose mortgages were made by State or local housing finance
agencies or State or local government agencies for a term equal to the
remaining mortgage term to maturity on projects assisted under this
section to the extent of--
(1) unexpended balances of amounts of authority as set forth in
certain letter agreements between the Department of Housing and
Urban Development and such State or local housing finance agencies
or State or local government agencies, and
(2) existing allocation under section 236 contracts on projects
whose mortgages were made by State or local housing finance agencies
or State or local government agencies which are not being funded, to
the extent of such excess allocation, for any purposes permitted
under the provisions of this section.
An application shall be eligible for assistance under the previous
sentence only if the mortgagee submits the application within 548 days
after February 5, 1988, along with a certification of the mortgagee that
amounts are to be utilized hereunder for the purpose of either (A)
reducing rents or rent increases to tenants, or (B) making repairs or
otherwise increasing the economic viability of a related project.
Unexpended balances referred to in the first sentence of this subsection
which remain after disposition of all such applications is favorably
concluded shall be rescinded. The authority conferred by this subsection
to provide interest reduction and rental assistance payments shall be
available only to the extent approved in appropriation Acts.
(Pub. L. 89-117, title I, Sec. 101, Aug. 10, 1965, 79 Stat. 451; Pub. L.
90-19, Sec. 22(a), (c), May 25, 1967, 81 Stat. 26; Pub. L. 90-448, title
II, Secs. 201(e), 202, title XI, Sec. 1106(b), Aug. 1, 1968, 82 Stat.
502, 503, 567; Pub. L. 91-152, title I, Sec. 112, Dec. 24, 1969, 83
Stat. 383; Pub. L. 91-609, title I, Secs. 103, 114[115](c), 118(b),
120(a), (b), Dec. 31, 1970, 84 Stat. 1771, 1774, 1775; Pub. L. 96-153,
title II, Sec. 203(a), Dec. 21, 1979, 93 Stat. 1106; Pub. L. 96-399,
Oct. 8, 1980, title II, Sec. 205, 94 Stat. 1630; Pub. L. 97-35, title
III, Secs. 322(g), 327, Aug. 13, 1981, 95 Stat. 403, 407; Pub. L. 98-
181, title II, Secs. 203(b)(3), 219, Nov. 30, 1983, 97 Stat. 1178, 1187;
Pub. L. 98-479, title I, Sec. 102(d), title II, Sec. 204(e), Oct. 17,
1984, 98 Stat. 2222, 2233; Pub. L. 100-242, title I, Secs. 167(a)(2),
168, 170(h), title IV, Sec. 430(b), Feb. 5, 1988, 101 Stat. 1864, 1867,
1920; Pub. L. 104-99, title IV, Sec. 402(d)(5), Jan. 26, 1996, 110 Stat.
42; Pub. L. 105-276, title V, Sec. 514(d), Oct. 21, 1998, 112 Stat.
2548.)
References in Text
The National Housing Act, referred to in subsecs. (g) and (l), is
act June 27, 1934, ch. 847, 48 Stat. 1246, as amended which is
classified principally to this chapter (Sec. 1701 et seq.). Title II of
the National Housing Act is classified generally to subchapter II
(Sec. 1707 et seq.) of this chapter. For complete classification of this
Act to the Code, see section 1701 of this title and Tables.
Section 236 contracts, referred to in subsec. (m)(2), refer to
contracts under section 1715z-1 of this title.
Codification
Subsecs. (f) and (i) of this section amended sections 1451(c) and
1465(c)(2) of Title 42, The Public Health and Welfare.
Section was enacted as part of the Housing and Urban Development Act
of 1965, and not as part of the National Housing Act which comprises
this chapter.
Amendments
1998--Subsec. (k). Pub. L. 105-276, which directed the repeal of
subsec. (k) of section 1010 of Pub. L. 89-117, was executed by striking
out subsec. (k) of this section, to reflect the probable intent of
Congress. For text, see 1996 Amendment note below.
1996--Subsec. (k). Pub. L. 104-99 temporarily substituted
``[Reserved.]'' for the text of subsec. (k), which read as follows: ``In
selecting individuals or families to be assisted under this section in
accordance with the eligibility criteria and procedures established
under subsection (e)(1) of this section, the project owner shall give
preference to individuals or families who are occupying substandard
housing, are paying more than 50 percent of family income for rent, or
are involuntarily displaced at the time they are seeking housing
assistance under this section.'' See Effective and Termination Dates of
1996 Amendment note below.
1988--Subsec. (e)(1). Pub. L. 100-242, Sec. 168(1), struck out
provisions authorizing the Secretary to issue, upon the request of a
housing owner, certificates of facts concerning individuals and families
applying for admission to, or residing in, dwellings of such owner.
Subsec. (g). Pub. L. 100-242, Sec. 167(a)(2), substituted ``100
percent'' for ``90 per centum''.
Subsec. (j)(1)(D). Pub. L. 100-242, Sec. 170(h), made amendment
identical to Pub. L. 98-479, Sec. 204(e). See 1984 Amendment note below.
Subsec. (k). Pub. L. 100-242, Sec. 168(2), amended subsec. (k)
generally. Prior to amendment, subsec. (k) read as follows: ``In making
assistance available under this section, the Secretary shall give
priority to individuals or families who are occupying substandard
housing or are involuntarily displaced at the time they are seeking
housing assistance under this section.''
Subsec. (m). Pub. L. 100-242, Sec. 430(b), added subsec. (m).
1984--Subsec. (g). Pub. L. 98-479, Sec. 102(d), struck out ``up to''
before ``90 per centum'' in next to last sentence.
Subsec. (j)(1)(D). Pub. L. 98-479, Sec. 204(e), substituted
``dividend'' for ``divided'' before ``legal entity''.
1983--Subsec. (e)(1)(B). Pub. L. 98-181, Sec. 203(b)(3), inserted
``, was paying more than 50 per centum of family income for rent,''.
Subsec. (g). Pub. L. 98-181, Sec. 219(a), inserted provision
relating to the offer annually to amend contracts to ensure that
qualified tenants receive the benefit of assistance contracted for under
this section.
Subsec. (l). Pub. L. 98-181, Sec. 219(b), inserted provision
relating to the utilization by the Secretary of any authority under this
section that is recaptured.
1981--Subsec. (c)(2). Pub. L. 97-35, Sec. 322(g)(1), substituted
provisions defining ``income'' as income from all sources of each member
and criteria for exclusions, for provisions defining ``income'' as
determined under section 1437f of title 42.
Subsec. (d). Pub. L. 97-35, Secs. 322(g)(2), 327(b), substituted
provisions relating to determination of annual payment amount, for
provisions relating to determination of maximum amount of annual
payment.
Subsec. (e)(2). Pub. L. 97-35, Sec. 322(g)(3), substituted
provisions relating to annual recertifications, for provisions relating
to the elderly and recertifications at intervals of two years or
shorter.
Subsec. (l). Pub. L. 97-35, Sec. 327(a), substituted provisions
relating to additional available assistance authority, for provisions
relating to amendment of contracts.
1980--Subsec. (l). Pub. L. 96-399 substituted ``shall, not later
than 4 years after October 8, 1980,'' for ``may'' in first sentence;
inserted second sentence relating to amending of contracts; and
substituted ``the first sentence of this paragraph'' for ``preceding''
in last sentence.
1979--Subsec. (c). Pub. L. 96-153, Sec. 203(a)(l), revised
definition of ``qualified tenant'' and inserted definition of
``income''.
Subsec. (d). Pub. L. 96-153, Sec. 203(a)(2), struck out provisions
that in determining the income of tenants, an amount equal to $300 for
each minor person shall be deducted and that the earnings of minor
persons shall not be included in the income of the tenant, and inserted
provisions relating to the determination of amount of payments under
contracts amended pursuant to subsec. (j) of this section by reference
to section 1437f of title 42.
Subsec. (e)(1)(B). Pub. L. 96-153, Sec. 203(a)(3), substituted
``occupying substandard housing or was involuntarily displaced at the
time it was seeking assistance under this section'' for ``displaced by
governmental action, is elderly, is physically handicapped, or is (or
was) occupying substandard housing or housing extensively damaged or
destroyed as the result of a natural disaster''.
Subsecs. (k), (l). Pub. L. 96-153, Sec. 203(a)(4), added subsecs.
(k) and (l).
1970--Subsec. (a). Pub. L. 91-609, Sec. 103, increased maximum
amount of payments by $40,000,000 on July 1, 1971.
Subsec. (b). Pub. L. 91-609, Secs. 114[115](c), 118(b), authorized
payments to housing owners with respect to projects with dwelling units
without kitchen facilities and provided for percentage limitation on
payments to housing owner, and substituted ``which may involve either
new or existing construction and which'' for ``which prior to completion
of construction or rehabilitation'' before ``is approved'',
respectively.
Subsec. (c)(2)(F). Pub. L. 91-609, Sec. 120(a), added par. (F).
Subsec. (e)(1)(B). Pub. L. 91-609, Sec. 120(b), provided for
issuance of certificates with respect to whether the individual or
family is a member of the Armed Forces of the United States serving on
active duty.
1969--Subsec. (j)(1)(D). Pub. L. 91-152 inserted exception which
authorized the Secretary to increase payments to 40 per centum of the
dwelling units under the specified conditions.
1968--Subsec. (a). Pub. L. 90-448, Sec. 202(a), increased maximum
amount of payments by $40,000,000 on July 1, 1969, and by $100,000,000
on July 1, 1970.
Subsec. (b). Pub. L. 90-448, Sec. 202(b), included within definition
of ``housing owner'' a private nonprofit corporation or other private
nonprofit legal entity, a limited dividend corporation or other limited
dividended legal entity, or a cooperative housing corporation, which is
the owner of a rental or cooperative housing project financed under a
State or local program.
Subsec. (c)(2)(E). Pub. L. 90-448, Sec. 1106(b), substituted
``affected by a disaster'' for ``affected by a natural disaster''.
Subsec. (d). Pub. L. 90-448, Sec. 201(e)(1), inserted provisions
authorizing, in determining the income of any tenant, a deduction of an
amount equal to $300 for each minor person who is a member of the
immediate family of the tenant and living with the tenant, and directing
that the earnings of any such minor shall not be included in the income
of such tenant.
Subsec. (g). Pub. L. 90-448, Sec. 201(e)(2), inserted reference to
section 1715z-1 of this title.
Subsec. (j)(1)(D). Pub. L. 90-448, Sec. 201(e)(3), inserted subpar.
(D).
1967--Pub. L. 90-19, Sec. 22(a), substituted ``Secretary'' for
``Administrator'' wherever appearing in subsecs. (c), (d), (e), and (g).
Subsec. (a). Pub. L. 90-19, Sec. 22(c)(1), substituted ``Secretary
of Housing and Urban Development (hereinafter referred to as the
`Secretary')'' for ``Housing and Home Finance Administrator (hereinafter
referred to as the `Administrator')''.
Subsec. (g). Pub. L. 90-19, Sec. 22(c)(2), consolidated in the
Secretary of Housing and Urban Development the authorities of the
Federal Housing Commissioner and the Housing and Home Finance
Administrator with respect to housing assisted under sections
1715l(d)(3) and 1715v(c)(3), and section 1701q of this title,
respectively.
Effective Date of 1998 Amendment
Pub. L. 105-276, title V, Sec. 514(g), Oct. 21, 1998, 112 Stat.
2549, provided that: ``This section [amending this section, sections
1701z-11 and 4116 of this title, and sections 1437d, 1437f, 12899d, and
13615 of Title 42, The Public Health and Welfare, enacting provisions
set out as notes under sections 1437a and 1437f of Title 42, and
repealing provisions set out as notes under sections 1437d and 1437f of
Title 42] shall take effect on, and the amendments made by this section
are made on, and shall apply beginning upon, the date of the enactment
of this Act [Oct. 21, 1998].''
Effective and Termination Dates of 1996 Amendment
Amendment by Pub. L. 104-99 effective Jan. 26, 1996, and only for
fiscal years 1996, 1997, and 1998, and to cease to be effective Oct. 21,
1998, see section 402(f) of Pub. L. 104-99, as amended, and section
514(f) of Pub. L. 105-276, set out as notes under section 1437a of Title
42, The Public Health and Welfare.
Effective Date of 1981 Amendment
Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section 371
of Pub. L. 97-35, set out as an Effective Date note under section 3701
of this title.
Effective Date of 1979 Amendment
Section 203(c) of Pub. L. 96-153 providing for the effective date of
amendment of this section and section 1715z-1 of this title as Dec. 21,
1979, and setting forth maximum applicable tenant contribution, was
repealed by Pub. L. 97-35, title III, Secs. 322(h)(2), 371, Aug. 13,
1981, 95 Stat. 404, 431, eff. Oct. 1, 1981.
Limitation on Withholding or Conditioning of Assistance
Assistance provided for in Housing and Community Development Act of
1974, National Housing Act, United States Housing Act of 1937, Housing
Act of 1949, Demonstration Cities and Metropolitan Development Act of
1966, and Housing and Urban Development Acts of 1965, 1968, 1969, and
1970 [see Short Title note set out under section 1701 of this title],
not to be withheld or made subject to conditions by reason of tax-exempt
status of obligations issued or to be issued for financing of
assistance, except as otherwise provided by law, see section 817 of Pub.
L. 93-383, set out as a note under section 5301 of Title 42, The Public
Health and Welfare.
Section Referred to in Other Sections
This section is referred to in sections 1701z-11, 1715l, 1715z,
1715z-1a, 1715z-6, 4119 of this title; title 26 section 32; title 31
section 1305; title 42 sections 1382a, 1436a, 1436b, 1437n, 1439, 11905.
