article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Neighborhood Rescue and Stabilization Act of 2008''. SEC. 2. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND FORECLOSED HOMES. (a) Direct Appropriations.--There is authorized to be appropriated for fiscal year 2008, $10,000,000,000, to remain available until expended, for assistance to States, qualified metropolitan cities, and units of general local government for the redevelopment of abandoned and foreclosed homes. (b) Allocation of Appropriated Amounts.-- (1) Allocation by hud for states.--Any amounts appropriated or otherwise made available pursuant to this section shall be allocated by the Secretary of Housing and Urban Development among the States, and provided to the States, in amounts determined according to the funding formula established pursuant to paragraph (2). (2) Formula for allocation among states.-- (A) Establishment.--Not later than 60 days after the date of the enactment of this Act, the Secretary shall establish a funding formula under this paragraph. (B) Criteria.--The funding formula under this paragraph shall provide that, of the aggregate amount appropriated or otherwise made available pursuant to this section, the amount allocated for each State shall be the amount that bears the same ratio to such aggregate amount as the number of foreclosures on mortgages for homes occurring in such State during the most recently completed two calendar quarters for which such information is available, as determined by the Secretary, bears to the aggregate number of such foreclosures occurring in all States during such calendar quarters, as such amount is adjusted to account for differences in the States in-- (i) the number and percentage of homes in a State that are financed by a subprime mortgage related loan; (ii) the number and percentage of homes in a State in default or delinquency; and (iii) the median home price in a State. (3) Distribution.--Amounts appropriated or otherwise made available under this section shall be distributed to the States according to the funding formula required under paragraph (2) not later than 30 days after the establishment of such formula. (4) Allocation by states for qualified metropolitan cities.-- (A) Requirement to allocate.--Of any amounts allocated pursuant to this subsection for a State, such State shall allocate for each qualified metropolitan city located in such State an amount, as determined according to the funding formula established pursuant to subparagraph (B). (B) Formula for allocation among states.-- (i) Establishment.--Not later than 60 days after the date of the enactment of this Act, the Secretary shall establish a funding formula under this subparagraph. (ii) Criteria.--The funding formula under this subparagraph shall provide that, of the aggregate amount allocated pursuant to this subsection for a State, the amount allocated for a qualified metropolitan city located in the State shall be the amount that bears the same ratio to such aggregate amount as the number of foreclosures on mortgages for homes occurring in such qualified metropolitan city during the most recently completed two calendar quarters for which such information is available, as determined by the Secretary, bears to the aggregate number of such foreclosures occurring in such State during such calendar quarters, as such amount is adjusted to account for differences between the qualified metropolitan city in and State in-- (I) the percentage of homes that are financed by a subprime mortgage related loan; (II) the percentage of homes in default or delinquency; and (III) the median home price. (5) Other amounts.--Any amounts allocated for a State that are not allocated for a qualified metropolitan city pursuant to paragraph (4) may be used for any units of general local government in the State. (c) Use of Funds.-- (1) In general.--Any State, qualified metropolitan city, 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 redevelop abandoned and foreclosed homes. (2) Priority.--Any State, qualified metropolitan city, 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; or (C) identified by the State, qualified metropolitan city, or unit of general local government as likely to face a significant rise in the rate of home foreclosures. (3) Eligible uses.-- (A) In general.--Amounts made available under this section may be used only as follows: (i) Financial assistance through institutions and organizations.--To make grants, loans, and other financing mechanisms to community development financial institutions (as such term is defined under section 103(5) of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702(5))), national intermediaries, and nonprofit housing or community development organizations and others to purchase and rehabilitate homes that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes. (ii) Financing mechanisms for redevelopment.--To establish financing mechanisms for redevelopment of foreclosed upon homes, including such mechanisms as soft- seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers. (iii) Purchase and rehabilitation for sale or rental.--To purchase and rehabilitate homes that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes. (iv) Land banks.--To establish land banks for homes that have been foreclosed upon. (v) Demolition.--To demolish blighted structures. (vi) Project-based rental assistance.--To provide rental assistance for low- and moderate-income persons (as such term is defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302)) that is attached to single family and multifamily residences. (vii) Project operating reserves.--To provide grants for use to cover the loss of rental assistance or in conjunction with a project loan that is attached to single family and multifamily residences. (viii) Project operating subsidies.--To fund project operating accounts used to cover net operating income shortfalls for single and multifamily residences. Eligible operating costs shall include costs of management, taxes, handling, insurance, and other related costs. (ix) CDBG-eligible activities.--To carry out any activities that, under section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305), are eligible to be carried out with amounts provided under title I of such Act. (B) Limitation.--Any funds used under this section for the purchase of an abandoned or foreclosed upon home shall be at a cost equal to or less than the appraised value of the home based on the most up-to- date appraisal, as such appraisal is defined by the Secretary. (d) Rule of Construction.--Amounts appropriated or otherwise made available to States, qualified metropolitan cities, 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. (e) Waiver Authority.-- (1) In general.--In administering any amounts appropriated or otherwise made available under this section, the Secretary may waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers (but not including the requirements of this section) in connection with the obligation by the Secretary or the use by the recipient of such funds (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment), in order to expedite or facilitate the use of such funds. (2) Low and moderate income requirement.--Notwithstanding the authority of the Secretary under paragraph (1)-- (A) all of the funds appropriated or otherwise made available under this section shall be used with respect to persons whose incomes do not exceed 120 percent of area median income; and (B) not less than 25 percent of the funds made available under this section to any State, qualified metropolitan city, or unit of general local government shall be used with respect to persons whose incomes do not exceed 30 percent of the area median income. (f) Definitions.--For purposes of this Act, the following definitions shall apply: (1) Qualified metropolitan city.--The term ``qualified metropolitan city'' means a metropolitan city, as such term is defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302), that has a population of not less than 200,000, as determined by the 2000 decennial census. (2) Secretary.--The term ``Secretary'' means the Secretary of Housing and Urban Development. (3) State; unit of general local government.--The terms ``State'' and ``unit of general local government'' have the meanings given such terms in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302). (g) Emergency Designation.--The amounts appropriated under this title are designated as an emergency requirement and necessary to meet emergency needs pursuant to section 204 of S . Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.
summary: Neighborhood Rescue and Stabilization Act of 2008 - Authorizes for FY2008 appropriations for assistance to states and local governmental units for the redevelopment of abandoned and foreclosed homes. Requires the Secretary of Housing and Urban Development (HUD) to allocate the funds among the states according to a funding formula reflecting the ratio that home mortgage foreclosures occurring in a state bears to the aggregate number of such foreclosures occurring in all states. Requires states to allocate funds to qualified metropolitan cities according to a similar formula. Requires states and local governmental units to give priority to those metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate-income areas, and other areas with the greatest need, including those: (1) with the greatest percentage of home foreclosures; (2) with the highest percentage of homes financed by a subprime mortgage related loan; or (3) identified as likely to face a significant rise in the rate of home foreclosures. Cites eligible uses and redevelopment financing mechanisms. Sets forth low- and moderate-income requirements for the use of all funds made available under this Act.