(a) Transfer Requirement.--Pursuant to the authority under section 204 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997, the Secretary shall transfer ownership of any qualified HUD property to the unit of general local government having jurisdiction for the area in which the property is located in accordance with this section, but only if the unit of general local government enters into an agreement with the Secretary meeting the requirements of subsection (d). (b) Qualified HUD Properties.--For purposes of this section, the term ``qualified HUD property'' means any unoccupied multifamily housing, project, substandard multifamily housing project, or unoccupied single family property, that is-- (1) owned by the Secretary; and (2) located within a renewal community. (c) Timing of Transfer.--Any transfer of ownership required under subsection (a) shall be completed-- (1) with respect to any multifamily housing project or single family property that is acquired by the Secretary before the date on which the area in which property is located is designated as a renewal community and that is substandard or unoccupied (as applicable) upon such date, not later than 1 year after such date; and (2) with respect to any multifamily housing project or single family property that is acquired by the Secretary on or after the date on which the area in which the property is located is designated as a renewal community, not later than 1 year after--

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(A) the date on which the project is determined to be substandard or unoccupied (as applicable), in the case of a property that is not unoccupied or substandard upon acquisition by the Secretary; or (B) the date on which the project is acquired by the Secretary, in the case of a property that is substandard or unoccupied (as applicable) upon such acquisition. (d) Agreements To Sell Property to Community Development Corporations.--An agreement described in this subsection is an agreement that requires a unit of general local government to dispose of the qualified HUD property acquired by the unit of general local government in accordance with the following requirements: (1) Notification to community development corporations.-- Not later than 30 days after the date on which the unit of general local government acquires title to the property under subsection (a), the unit of general local government shall notify each community development corporation located in the State in which the property is located-- (A) of such acquisition of title; and (B) that, during the 6-month period beginning on the date on which such notification is made, such community development corporations shall have the exclusive right under this subsection to make bona fide offers to purchase the property on a cost recovery basis. (2) Right of first refusal.--During the 6-month period described in paragraph (1)(B)-- (A) the unit of general local government may not sell or offer to sell the qualified HUD property other than to a party notified under paragraph (1), unless each community development corporation required to be so notified has notified the unit of general local government that the corporation will not make an offer to purchase the property; and (B) the unit of general local government shall accept a bona fide offer to purchase the property made during such period if the offer is acceptable to the unit of general local government, except that a unit of general local government may not sell a property to a community development corporation during that 6-month period other than on a cost recovery basis. (3) Other disposition.--During the 6-month period beginning on the expiration of the 6-month period described in paragraph (1)(B), the unit of general local government shall dispose of the property on a negotiated, competitive bid, or other basis, on such terms as the unit of general local government deems appropriate. (e) Satisfaction of Indebtedness.--Before transferring ownership of any qualified HUD property pursuant to subsection (a), the Secretary shall satisfy any indebtedness incurred in connection with the property to be transferred, by-- (1) canceling the indebtedness; or (2) reimbursing the unit of general local government to which the property is transferred for the amount of the indebtedness. (f) Determination of Status of Properties.--To ensure compliance with the requirements of subsection (c), the Secretary shall take the following actions: (1) Upon designation of renewal communities.--Upon the designation of any renewal community, the Secretary shall promptly assess each residential property owned by the Secretary that is located within such renewal community to determine whether such property is a qualified HUD property. (2) Upon acquisition.--Upon acquiring any residential property that is located with a renewal community, the Secretary shall promptly determine whether the property is a qualified HUD property. (3) Updates.--The Secretary shall periodically reassess the residential properties owned by the Secretary to determine whether any such properties have become qualified HUD properties. (g) Tenant Leases.--This section 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. (h) Procedures.--Not later than the expiration of the 6- month period beginning on the date of the enactment of this Act, the Secretary shall establish, by rule, regulation, or order, such procedures as may be necessary to carry out this section. (i) Definitions.--For purposes of this section, the following definitions shall apply: (1) 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. (2) Cost recovery basis.--The term ``cost recovery basis'' means, with respect to any sale of a residential property by a unit of general local government to a community development corporation under subsection (d)(2), that the purchase price paid by the community development corporation is less than or equal to the costs incurred by the unit of general local government in connection with such property during the period beginning on the date on which the unit of general local government acquires title to the property under subsection (a) and ending on the date on which the sale is consummated. (3) Low-income families.--The term ``low-income families'' has the meaning given the term in section 3(b) of the United States Housing Act of 1937. (4) Multifamily housing project.--The term ``multifamily housing project'' has the meaning given the term in section 203 of the Housing and Community Development Amendments of 1978. (5) Renewal community.--The term ``renewal community'' means an area designated (under subchapter X of chapter 1 of the Internal Revenue Code of 1986) as a renewal community. (6) Residential property.--The term ``residential property'' means a property that is a multifamily housing project or a single family property. (7) Secretary.--The term ``Secretary'' means the Secretary of Housing and Urban Development. (8) Severe physical problems.--The term ``severe physical problems'' means, with respect to a dwelling unit, that the unit-- (A) 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; (B) on not less than 3 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; (C) has no functioning electrical service, exposed wiring, any room in which there is not a functioning electrical outlet, or has experienced 3 or more blown fuses or tripped circuit breakers during the preceding 90-day period; (D) is accessible through a public hallway in which there are no working light fixtures, loose or missing steps or railings, and no elevator; or (E) 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. (9) Single family property.--The term ``single family property'' means a 1- to 4-family residence. (10) 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. (11) Unit of general local government.--The term ``unit of general local government'' has the meaning given the term in section 102(a) of the Housing and Community Development Act of 1974. (12) 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.

SEC. ____22. CRA CREDIT FOR INVESTMENTS IN COMMUNITY DEVELOPMENT ORGANIZATIONS LOCATED IN RENEWAL COMMUNITIES.

Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C. 2903) is amended by adding at the end the following new subsection: ``(c) Investments in Certain Community Development Organizations.--In assessing and taking into account, under subsection (a), the record of a regulated financial institution, the appropriate Federal financial supervisory agency may consider, as a factor, investments of the institution in, and capital investment, loan participation, and other ventures undertaken by the institution in cooperation with, any community development organization (as defined in section 234 of the Bank Enterprise Act of 1991) which is located in a renewal community (as designated under section 1400D of the Internal Revenue Code of 1986).''.