Reform of homeownership resale restrictions

Section 215 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745), as amended by section 201, is amended— (1) in subsection (b)— (A) in paragraph (2), by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively, and adjusting the margins accordingly; (B) by striking paragraph (3); (C) by redesignating paragraphs (1), (2), and (4) as subparagraphs (A), (B), and (D), respectively, and adjusting the margins accordingly; (D) by inserting after subparagraph (B), as so redesignated, the following: (C) is subject to restrictions that are established by the participating jurisdiction and determined by the Secretary to be appropriate, including with respect to the useful life of the property, to— (i) require that any subsequent purchase of the property be— (I) only by a person who meets the qualifications specified under subparagraph (B); and (II) at a price that is determined by a formula or method established by the participating jurisdiction that provides the owner with a reasonable return on investment, which may include a percentage of the cost of any improvements; or (ii) recapture the investment provided under this title in order to assist other persons in accordance with the requirements of this title, except where there are no net proceeds or where the net proceeds are insufficient to repay the full amount of the assistance; and; (E) by striking Housing that is for homeownership and inserting the following: (1) Qualification Housing that is for homeownership; and (F) by adding at the end the following: (2) Purchase by community land trust Notwithstanding subparagraph (C)(i) of paragraph (1) and under terms determined by the Secretary, the Secretary may permit a participating jurisdiction to allow a community land trust that used assistance provided under this subtitle for the development of housing that meets the criteria under paragraph (1), to acquire the housing— (A) in accordance with the terms of the preemptive purchase option, lease, covenant on the land, or other similar legal instrument of the community land trust when the terms and rights in the preemptive purchase option, lease, covenant, or legal instrument are and remain subject to the requirements of this title; (B) when the purchase is for— (i) the purpose of— (I) entering into the chain of title; (II) enabling a purchase by a person who meets the qualifications specified under paragraph (1)(B) and is on a waitlist maintained by the community land trust, subject to enforcement by the participating jurisdiction of all applicable requirements of this subtitle, as determined by the Secretary; (III) performing necessary rehabilitation and improvements; or (IV) adding a subsidy to preserve affordability, which may be from Federal or non-Federal sources; or (ii) another purpose determined appropriate by the Secretary; and (C) if, within a reasonable period of time after the applicable purpose under subparagraph (B) of this paragraph is fulfilled, as determined by the Secretary, the housing is then sold to a person who meets the qualifications specified under paragraph (1)(B). (3) Suspension or waiver of requirements for military members A participating jurisdiction, in accordance with terms established by the Secretary, may suspend or waive a requirement under paragraph (1)(B) with respect to housing that otherwise meets the criteria under paragraph (1) if the owner of the housing— (A) is a member of a regular component of the armed forces or a member of the National Guard on full-time National Guard duty, active Guard and Reserve duty, or inactive-duty training (as those terms are defined in section 101(d) of title 10, United States Code); and (B) has received— (i) temporary duty orders to deploy with a military unit or military orders to deploy as an individual acting in support of a military operation, to a location that is not within a reasonable distance from the housing, as determined by the Secretary, for a period of not less than 90 days; or (ii) orders for a permanent change of station. (4) Suspension or waiver of requirements for heir or beneficiary of deceased owner Notwithstanding subparagraph (C) of paragraph (1), housing that meets the criteria under that paragraph prior to the death of an owner may continue to qualify as affordable housing if— (A) the housing is the principal residence of an heir or beneficiary of the deceased owner, as defined by the Secretary; and (B) the heir or beneficiary, in accordance with terms established by the Secretary, assumes the duties and obligations of the deceased owner with respect to funds provided under this title..