Urban Homestead Act of 1986

Urban Homestead Act of 1986 - Amends the United States Housing Act of 1937 to provide homeownership and resident management opportunities for public housing families.

Requires the formation of a resident management corporation as a condition for such ownership and management.

Requires the Secretary of Housing and Urban Development to provide comprehensive improvement assistance to ensure that the physical condition, management, and operation of such projects are sufficient to encourage resident ownership.

Directs the Secretary and the responsible public housing agency to provide ownership and management training and technical and educational assistance.

Authorizes a homeownership association to purchase a public housing project after the Secretary determines that the association is prepared to manage and maintain the project with continued Federal assistance. Allows an eligible family to purchase a dwelling if the Secretary determines that such purchase will not interfere with the rights of other resident families or harm the efficient operation of the project. Requires the Secretary to continue to pay annual contributions to a project after such a purchase. Limits the purchase price for a project or unit to 25 percent of its fair market value. Lists alternative purchasing arrangements. Directs the agency to assist a purchase by making a loan to a family or association at an interest rate not exceeding 70 percent of the market interest rate.

Requires any unit or project purchaser who sells such property before the expiration of five years to pay the public housing agency a specified percentage of the sale price.

Prohibits the eviction of any resident family because of the sale of a project to a homeownership association. Authorizes the Secretary to: (1) help relocate any family which decides not to purchase its dwelling in a project where other units are purchased; or (2) provide such family with a housing voucher in order to obtain comparable alternative housing.