Title III of Hera

122 STAT. 2850

PUBLIC LAW 110–289—JULY 30, 2008
‘‘(2) OBLIGATION OR LIABILITY.—The term ‘obligation or
liability’ includes an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage.’’.
(c) EFFECTIVE DATE; SUNSET.—
(1) EFFECTIVE DATE.—The amendment made by subsection
(a) shall take effect on the date of enactment of this Act.
(2) SUNSET.—The amendments made by subsection (a) shall
expire on December 31, 2010. Effective January 1, 2011, the
provisions of subsections (b) and (c) of section 303 of the
Servicemembers Civil Relief Act, as in effect on the day before
the date of the enactment of this Act, are hereby revived.

50 USC app. 533
note.

TITLE III—EMERGENCY ASSISTANCE
FOR THE REDEVELOPMENT OF ABANDONED AND FORECLOSED HOMES
42 USC 5301
note.

State and
local
governments.

Deadline.

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SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF
ABANDONED AND FORECLOSED HOMES.

(a) DIRECT APPROPRIATIONS.—There are appropriated out of
any money in the Treasury not otherwise appropriated for the
fiscal year 2008, $4,000,000,000, to remain available until expended,
for assistance to States and units of general local government
(as such terms are defined in section 102 of the Housing and
Community Development Act of 1974 (42 U.S.C. 5302)) for the
redevelopment of abandoned and foreclosed upon homes and residential properties.
(b) ALLOCATION OF APPROPRIATED AMOUNTS.—
(1) IN GENERAL.—The amounts appropriated or otherwise
made available to States and units of general local government
under this section shall be allocated based on a funding formula
established by the Secretary of Housing and Urban Development (in this title referred to as the ‘‘Secretary’’).
(2) FORMULA TO BE DEVISED SWIFTLY.—The funding formula
required under paragraph (1) shall be established not later
than 60 days after the date of enactment of this section.
(3) CRITERIA.—The funding formula required under paragraph (1) shall ensure that any amounts appropriated or otherwise made available under this section are allocated to States
and units of general local government with the greatest need,
as such need is determined in the discretion of the Secretary
based on—
(A) the number and percentage of home foreclosures
in each State or unit of general local government;
(B) the number and percentage of homes financed by
a subprime mortgage related loan in each State or unit
of general local government; and
(C) the number and percentage of homes in default
or delinquency in each State or unit of general local government.
(4) DISTRIBUTION.—Amounts appropriated or otherwise
made available under this section shall be distributed according
to the funding formula established by the Secretary under
paragraph (1) not later than 30 days after the establishment
of such formula.
(c) USE OF FUNDS.—

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PUBLIC LAW 110–289—JULY 30, 2008

122 STAT. 2851

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(1) IN GENERAL.—Any State or unit of general local government that receives amounts pursuant to this section shall,
not later than 18 months after the receipt of such amounts,
use such amounts to purchase and redevelop abandoned and
foreclosed homes and residential properties.
(2) PRIORITY.—Any State or unit of general local government that receives amounts pursuant to this section shall in
distributing such amounts give priority emphasis and consideration to those metropolitan areas, metropolitan cities, urban
areas, rural areas, low- and moderate-income areas, and other
areas with the greatest need, including those—
(A) with the greatest percentage of home foreclosures;
(B) with the highest percentage of homes financed
by a subprime mortgage related loan; and
(C) identified by the State or unit of general local
government as likely to face a significant rise in the rate
of home foreclosures.
(3) ELIGIBLE USES.—Amounts made available under this
section may be used to—
(A) establish financing mechanisms for purchase and
redevelopment of foreclosed upon homes and residential
properties, including such mechanisms as soft-seconds, loan
loss reserves, and shared-equity loans for low- and moderate-income homebuyers;
(B) purchase and rehabilitate homes and residential
properties that have been abandoned or foreclosed upon,
in order to sell, rent, or redevelop such homes and properties;
(C) establish land banks for homes that have been
foreclosed upon;
(D) demolish blighted structures; and
(E) redevelop demolished or vacant properties.
(d) LIMITATIONS.—
(1) ON PURCHASES.—Any purchase of a foreclosed upon
home or residential property under this section shall be at
a discount from the current market appraised value of the
home or property, taking into account its current condition,
and such discount shall ensure that purchasers are paying
below-market value for the home or property.
(2) REHABILITATION.—Any rehabilitation of a foreclosedupon home or residential property under this section shall
be to the extent necessary to comply with applicable laws,
codes, and other requirements relating to housing safety,
quality, and habitability, in order to sell, rent, or redevelop
such homes and properties. Rehabilitation may include
improvements to increase the energy efficiency or conservation
of such homes and properties or provide a renewable energy
source or sources for such homes and properties.
(3) SALE OF HOMES.—If an abandoned or foreclosed upon
home or residential property is purchased, redeveloped, or
otherwise sold to an individual as a primary residence, then
such sale shall be in an amount equal to or less than the
cost to acquire and redevelop or rehabilitate such home or
property up to a decent, safe, and habitable condition.
(4) REINVESTMENT OF PROFITS.—
(A) PROFITS FROM SALES, RENTALS, AND REDEVELOPMENT.—

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Deadline.

Urban and
rural areas.

Discounts.

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122 STAT. 2852

State and local
governments.

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State and local
governments.

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PUBLIC LAW 110–289—JULY 30, 2008
(i) 5-YEAR REINVESTMENT PERIOD.—During the 5year period following the date of enactment of this
Act, any revenue generated from the sale, rental,
redevelopment, rehabilitation, or any other eligible use
that is in excess of the cost to acquire and redevelop
(including reasonable development fees) or rehabilitate
an abandoned or foreclosed upon home or residential
property shall be provided to and used by the State
or unit of general local government in accordance with,
and in furtherance of, the intent and provisions of
this section.
(ii) DEPOSITS IN THE TREASURY.—
(I) PROFITS.—Upon the expiration of the 5year period set forth under clause (i), any revenue
generated from the sale, rental, redevelopment,
rehabilitation, or any other eligible use that is
in excess of the cost to acquire and redevelop
(including reasonable development fees) or
rehabilitate an abandoned or foreclosed upon home
or residential property shall be deposited in the
Treasury of the United States as miscellaneous
receipts, unless the Secretary approves a request
to use the funds for purposes under this Act.
(II) OTHER AMOUNTS.—Upon the expiration of
the 5-year period set forth under clause (i), any
other revenue not described under subclause (I)
generated from the sale, rental, redevelopment,
rehabilitation, or any other eligible use of an abandoned or foreclosed upon home or residential property shall be deposited in the Treasury of the
United States as miscellaneous receipts.
(B) OTHER REVENUES.—Any revenue generated under
subparagraphs (A), (C) or (D) of subsection (c)(3) shall
be provided to and used by the State or unit of general
local government in accordance with, and in furtherance
of, the intent and provisions of this section.
(e) RULES OF CONSTRUCTION.—
(1) IN GENERAL.—Except as otherwise provided by this
section, amounts appropriated, revenues generated, or amounts
otherwise made available to States and units of general local
government under this section shall be treated as though such
funds were community development block grant funds under
title I of the Housing and Community Development Act of
1974 (42 U.S.C. 5301 et seq.).
(2) NO MATCH.—No matching funds shall be required in
order for a State or unit of general local government to receive
any amounts under this section.
(f) AUTHORITY TO SPECIFY ALTERNATIVE REQUIREMENTS.—
(1) IN GENERAL.—In administering any amounts appropriated or otherwise made available under this section, the
Secretary may specify alternative requirements to any provision
under title I of the Housing and Community Development
Act of 1974 (except for those related to fair housing, nondiscrimination, labor standards, and the environment) in
accordance with the terms of this section and for the sole
purpose of expediting the use of such funds.

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PUBLIC LAW 110–289—JULY 30, 2008

122 STAT. 2853

(2) NOTICE.—The Secretary shall provide written notice
of its intent to exercise the authority to specify alternative
requirements under paragraph (1) to the Committee on
Banking, Housing and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives not later than 10 business days before such exercise
of authority is to occur.
(3) LOW AND MODERATE INCOME REQUIREMENT.—
(A) IN GENERAL.—Notwithstanding the authority of the
Secretary under paragraph (1)—
(i) all of the funds appropriated or otherwise made
available under this section shall be used with respect
to individuals and families whose income does not
exceed 120 percent of area median income; and
(ii) not less than 25 percent of the funds appropriated or otherwise made available under this section
shall be used for the purchase and redevelopment of
abandoned or foreclosed upon homes or residential
properties that will be used to house individuals or
families whose incomes do not exceed 50 percent of
area median income.
(B) RECURRENT REQUIREMENT.—The Secretary shall,
by rule or order, ensure, to the maximum extent practicable
and for the longest feasible term, that the sale, rental,
or redevelopment of abandoned and foreclosed upon homes
and residential properties under this section remain affordable to individuals or families described in subparagraph
(A).
(g) PERIODIC AUDITS.—In consultation with the Secretary of
Housing and Urban Development, the Comptroller General of the
United States shall conduct periodic audits to ensure that funds
appropriated, made available, or otherwise distributed under this
section are being used in a manner consistent with the criteria
provided in this section.

Deadline.

SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

42 USC 5301
note.

Notwithstanding any other provision of this Act or the amendments made by this Act, each State shall receive not less than
0.5 percent of funds made available under section 2301 (relating
to emergency assistance for the redevelopment of abandoned and
foreclosed homes).
SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT
DOMAIN.

Regulations.
Orders.

42 USC 5301
note.

No State or unit of general local government may use any
amounts received pursuant to section 2301 to fund any project
that seeks to use the power of eminent domain, unless eminent
domain is employed only for a public use: Provided, That for purposes of this section, public use shall not be construed to include
economic development that primarily benefits private entities.
SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

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(a) IN GENERAL.—None of the funds made available under
this title or title IV shall be distributed to—
(1) an organization which has been indicted for a violation
under Federal law relating to an election for Federal office;
or
(2) an organization which employs applicable individuals.

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42 USC 5301
note.

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122 STAT. 2854

PUBLIC LAW 110–289—JULY 30, 2008

(b) APPLICABLE INDIVIDUALS DEFINED.—In this section, the term
‘‘applicable individual’’ means an individual who—
(1) is—
(A) employed by the organization in a permanent or
temporary capacity;
(B) contracted or retained by the organization; or
(C) acting on behalf of, or with the express or apparent
authority of, the organization; and
(2) has been indicted for a violation under Federal law
relating to an election for Federal office.
42 USC 5301
note.

SEC. 2305. COUNSELING INTERMEDIARIES.

Disadvantaged
persons.

Grants.

Legal assistance.
Deadline.

Notwithstanding any other provision of this Act, the amount
appropriated under section 2301(a) of this Act shall be
$3,920,000,000 and the amount appropriated under section 2401
of this Act shall be $180,000,000: Provided, That of the amount
appropriated under section 2401 of this Act pursuant to this section,
not less than 15 percent shall be provided to counseling organizations that target counseling services regarding loss mitigation to
minority and low-income homeowners or provide such services in
neighborhoods with high concentrations of minority and low-income
homeowners: Provided further, That of amounts appropriated under
such section 2401 $30,000,000 shall be used by the Neighborhood
Reinvestment Corporation (referred to in this section as the ‘‘NRC’’)
to make grants to counseling intermediaries approved by the
Department of Housing and Urban Development or the NRC to
hire attorneys to assist homeowners who have legal issues directly
related to the homeowner’s foreclosure, delinquency or short sale.
Such attorneys shall be capable of assisting homeowners of owneroccupied homes with mortgages in default, in danger of default,
or subject to or at risk of foreclosure and who have legal issues
that cannot be handled by counselors already employed by such
intermediaries: Provided further, That of the amounts provided
for in the prior provisos the NRC shall give priority consideration
to counseling intermediaries and legal organizations that (1) provide
legal assistance in the 100 metropolitan statistical areas (as defined
by the Director of the Office of Management and Budget) with
the highest home foreclosure rates, and (2) have the capacity to
begin using the financial assistance within 90 days after receipt
of the assistance: Provided further, That no funds provided under
this Act shall be used to provide, obtain, or arrange on behalf
of a homeowner, legal representation involving or for the purposes
of civil litigation: Provided further, That the NRC, in awarding
counseling grants under section 2401 of this Act, may consider,
where appropriate, whether the entity has implemented a written
plan for providing in-person counseling and for making contact,
including personal contact, with defaulted mortgagors, for the purpose of providing counseling or providing information about available counseling.

TITLE IV—HOUSING COUNSELING
RESOURCES

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Appropriations
authorization.

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SEC. 2401. HOUSING COUNSELING RESOURCES.

There are appropriated out of any money in the Treasury
not otherwise appropriated for the fiscal year 2008, for an additional

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