--- kind: "section" citation: "42 U.S.C. § 11408a" title: "42" title_heading: "The Public Health and Welfare" number: "11408a" heading: "Use of FMHA inventory for transitional housing for homeless persons and for turnkey housing" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/42/11408a" units: - "Chapter 119 — Homeless Assistance" - "Subchapter IV — Housing Assistance" - "Part D — Rural Housing Stability Assistance Program" --- # §11408a. Use of FMHA inventory for transitional housing for homeless persons and for turnkey housing - (a) **In general—** The [Secretary](/usc/42/11371.md?p=7) of Agriculture (in this section referred to as the “[Secretary](/usc/42/11371.md?p=7)”) shall, on a priority basis, lease or sell program and nonprogram inventory properties held by the [Secretary](/usc/42/11371.md?p=7) under title V of the Housing Act of 1949 [[42 U.S.C. 1471](/usc/42/1471.md) et seq.]— - (1) to provide transitional housing; and - (2) to provide turnkey housing for tenants of such transitional housing and for eligible families. - (b) **Priority—** The priority uses of inventory property under this section shall not have a higher priority than— - (1) the disposition of such property by sale to eligible families; or - (2) the disposition of such property by transfer for use as rental housing by eligible families. - (c) **Transitional housing—** - (1) **Leases authorized—** The [Secretary](/usc/42/11371.md?p=7) shall lease inventory properties to [public agencies](/usc/42/11851.md?p=8) and [nonprofit](/usc/42/300s–3.md?p=3) organizations to provide transitional housing for [homeless](/usc/42/11302.md?p=a) families and individuals and to provide such [agencies](/usc/42/8262.md?p=1) the option to provide turnkey housing opportunities for [homeless persons](/usc/42/11302.md?p=a) and other inadequately housed families. - (2) **Rental to eligible families—** A [public agency](/usc/42/11851.md?p=8) or [nonprofit](/usc/42/300s–3.md?p=3) organization may rent housing leased to it under [paragraph (1)](#c-1) to a family for up to 10 years and may, during that period, assist the tenant in obtaining a loan and credit assistance under title V of the Housing Act of 1949 [[42 U.S.C. 1471](/usc/42/1471.md) et seq.] to purchase the housing from the [Secretary](/usc/42/11371.md?p=7). - (d) **Lease procedures—** - (1) **Identification of property—** Upon receipt by the [Secretary](/usc/42/11371.md?p=7) of written notification from a [public agency](/usc/42/11851.md?p=8) or [nonprofit](/usc/42/300s–3.md?p=3) organization that it proposes to lease a property for the purpose of providing transitional housing or for the purpose of providing transitional housing and turnkey housing opportunities, the [Secretary](/usc/42/11371.md?p=7) shall— - (A) withdraw the property from the market for not more than 30 days for the purpose of negotiations under [subparagraph (B)](#d-1-B); - (B) negotiate a lease agreement with the organization or [agency](/usc/42/8262.md?p=1); and - (C) if a lease is agreed to, commence the repairs necessary to make the property meet standards for decent, safe, and sanitary housing. - (2) **Lease terms—** A lease of inventory property under this section shall— - (A) be for a period of not more than 10 years; - (B) provide for the payment of $1 for the 10-year lease; and - (C) provide the [nonprofit](/usc/42/300s–3.md?p=3) organization or [public agency](/usc/42/11851.md?p=8)— - (i) the right to use the property for transitional housing; and - (ii) the option to arrange for the sale of the property to an eligible purchaser. - (e) **Purchase procedures—** - (1) **Identification of property—** Upon receipt by the [Secretary](/usc/42/11371.md?p=7) of written notification from a [public agency](/usc/42/11851.md?p=8) or [nonprofit](/usc/42/300s–3.md?p=3) organization that it proposes to purchase a property for the purpose of providing transitional housing or for the purpose of providing transitional housing and turnkey housing opportunities, the [Secretary](/usc/42/11371.md?p=7) shall— - (A) withdraw the property from the market for not more than 30 days for the purpose of negotiations under [subparagraph (B)](#e-1-B); - (B) negotiate a purchase agreement with the organization or [agency](/usc/42/8262.md?p=1); and - (C) if a purchase agreement is agreed to, commence the repairs necessary to make the property meet standards for decent, safe, and sanitary housing. - (2) **Purchase terms—** A purchase of inventory property under this section shall provide for a purchase price equal to not more than the fair market value of the property minus 10 percent. - (f) **Employment of homeless individuals—** A [public agency](/usc/42/11851.md?p=8) or [nonprofit](/usc/42/300s–3.md?p=3) organization may lease or purchase property under this section only if the [agency](/usc/42/8262.md?p=1) or organization, to the maximum extent practicable, involves [homeless individuals](/usc/42/11302.md?p=a) and families, through employment, volunteer services, or otherwise, in maintaining, operating, and renovating any properties leased or acquired under this section and in providing any services for occupants of properties assisted under this section. - (g) **Participation of homeless individuals—** - (1) **In general—** The [Secretary](/usc/42/11371.md?p=7) shall, by regulation, require each [public agency](/usc/42/11851.md?p=8) and [nonprofit](/usc/42/300s–3.md?p=3) organization leasing or purchasing property under this section to provide for the participation of not less than 1 [homeless individual](/usc/42/11302.md?p=a) or former [homeless individual](/usc/42/11302.md?p=a) on the board of [directors](/usc/42/11851.md?p=5) or other equivalent policy making entity of such [agency](/usc/42/8262.md?p=1) or organization, to the extent that such organization or applicant considers and makes policies and decisions regarding any property acquired under this section. - (2) **Waiver—** The [Secretary](/usc/42/11371.md?p=7) may grant a waiver to a [public agency](/usc/42/11851.md?p=8) or [nonprofit](/usc/42/300s–3.md?p=3) organization that is unable to meet the requirement of [paragraph (1)](#g-1), if the [agency](/usc/42/8262.md?p=1) or organization agrees to otherwise consult with [homeless](/usc/42/11302.md?p=a) or formerly [homeless individuals](/usc/42/11302.md?p=a) in considering and making such policies and decisions. - (h) **Budget compliance—** The authority provided to the [Secretary](/usc/42/11371.md?p=7) under this section shall be effective only to the extent approved in advance in appropriations Acts. ## Source credit (Pub. L. 100–77, title IV, § 592[492], as added Pub. L. 102–550, title XIV, § 1414, Oct. 28, 1992, 106 Stat. 4041.) ## Notes ### Editorial Notes ### References in Text The Housing Act of 1949, referred to in subsecs. (a) and (c)(2), is act July 15, 1949, ch. 338, 63 Stat. 413. Title V of the Act is classified generally to subchapter III (§ 1471 et seq.) of chapter 8A of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1441 of this title and Tables.