WASHINGTON - Legislation that would partially lift a ban on the use of private-activity housing bonds in conjunction with the HOME housing affordability program was passed by the Senate and to the President Thursday night in the waning moments of the 102d Congress.
Approved on a voice vote, the bill would allow state and local governments to count a portion of their multifamily and mortgage bond issuance in the contributions they make to the program that are eligible for federal matching funds.
President Bush has not said what action he will take on the bill, although housing lobbyists said they expect him to sign it.
The Senate's action came several days after Bush signed a separate bill allocating $1 billion to the HOME program in 1993.
The HOME program requires the federal government to match contributions that state and local governments make to low-income rental and homeownership projects. The 1990 law that created the program did not specify what financial instruments may be counted among the contributions eligible for federal matching funds.
The House approved legislation in August that would have allowed states and localities to count the full value of both multifamily and mortgage bond issuances as part of their eligible contributions.
Last month, the Senate approved a measure that would have permitted only 10% of the value of multifamily issuances to be counted toward the match. Mortgage bond issues would not have been eligible.
The final bill strikes a compromise on the bond question. Under that agreement, 25% of an issuer's total contribution to the HOME program may consist of private-activity housing bonds.
Within that amount, an issuer is permitted to count 50% of the value of multifamily housing bonds he has issued for projects that are eligible to receive HOME funding. The issuer is also permitted to count 25% of the value of his mortgage revenue bond issuances that are sold for projects eligible for HOME funding.
The $1 billion to be given to the HOME program next year is a decrease from the $1.5 billion allocated to the program last year and proposed this year by the Senate. But housing lobbyists pointed out that it also is substantially higher than the House's original proposal for $600 million.