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Replacement Housing

Pursuant to 42 USCS § 4623, the head of the displacing agency must make an additional payment not in excess of $22,500 to any person who is displaced from a dwelling actually owned and occupied by the displaced person for not less than 180 days prior to the initiation of negotiations for the acquisition of the property.  The following elements are included in such additional payment:

  • The amount when added to the acquisition cost of the dwelling acquired by the displacing agency equals the reasonable cost of a comparable replacement dwelling.
  • The amount, if any shall compensate such displaced person for any increased interest costs and other debt service costs that such person is required to pay for financing the acquisition of any such comparable replacement dwelling. Such amount shall be paid only if the dwelling acquired was encumbered by a bona fide mortgage which was a valid lien on such dwelling for not less than 180 days immediately prior to the initiation of negotiations for the acquisition of such dwelling.
  • Reasonable expenses incurred by such displaced person for evidence of title, recording fees, and other closing costs incident to the purchase of the replacement dwelling, but not including prepaid expenses.

The additional payment so authorized shall be made only to a displaced person who purchases and occupies a decent, safe, and sanitary replacement dwelling within 1 year after the date on which such person receives final payment from the displacing agency for the acquired dwelling or the date on which the displacing agency’s obligation is met, whichever is later.  The displacing agency may extend such period for good cause.  If such period is extended, the payment shall be according to the costs of relocating the person to a comparable replacement dwelling within 1 year of such date.

Upon application by a mortgagee, the head of any Federal agency shall insure any mortgage, including any advances made during construction, on a comparable replacement dwelling executed by a displaced person, which mortgage is eligible for insurance under any Federal law administered by such agency regardless of the age, physical condition, or other personal characteristics of eligible mortgagors, and may make commitments for the insurance of such mortgage prior to the date of execution of the mortgage.

42 USCS § 4624 provides that the head of a displacing agency shall make a payment to or for any displaced person displaced from any dwelling not eligible to receive a payment, which dwelling was actually and lawfully occupied by such displaced person for not less than 90 days immediately prior to:

  • the initiation of negotiations for acquisition of such dwelling, or
  • in any case in which displacement is not a direct result of acquisition, then any other event as the head of the lead agency shall prescribe.

Such payment shall consist of the amount necessary to enable such person to lease or rent for a period not to exceed 42 months, but not to exceed $ 5,250. At the discretion of the head of the displacing agency, a payment shall be made in periodic installments.  The computation of a payment to a low-income displaced person for a comparable replacement dwelling shall consider such person’s income.

Any person eligible for a payment under this section may elect to apply such payment to a down payment on, and other incidental expenses pursuant to, the purchase of a decent, safe, and sanitary replacement dwelling. Any such person may, at the discretion of the head of the displacing agency, be eligible for the maximum payment allowed, except that, in the case of a displaced homeowner who has owned and occupied the displacement dwelling for at least 90 days but not more than 180 days immediately prior to the initiation of negotiations for the acquisition of such dwelling, such payment shall not exceed the payment such person would otherwise have received under this Act [42 USCS § 4623(a)] had the person owned and occupied the displacement dwelling 180 days immediately prior to the initiation of such negotiations.


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