A bill to amend the Housing and Community Development Act of 1974 for the purpose of providing guaranteed loans under title I of such Act to assist communities with a shortage of water supply.

Amends the Housing and Community Development Act of 1974 to authorize the Secretary of Housing and Urban Development to: (1) guarantee obligations issued by local governments to finance activities to alleviate problems caused by a water shortage; and (2) accept as security a repayment commitment based on a water surcharge or other financial resources of the local government.