I
111th CONGRESS
2d Session
H. R. 4868
IN THE HOUSE OF REPRESENTATIVES
March 17, 2010
Mr. Frank of Massachusetts (for himself, Ms. Waters, Mr. Gutierrez, Ms. Velázquez, Mr. Capuano, Mr. Hinojosa, Mr. Baca, Mr. Lynch, Mr. Al Green of Texas, Ms. Kilroy, Mr. Himes, Ms. Clarke, and Mr. Delahunt) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on the Budget and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To prevent the loss of affordable housing dwelling units in the United States.
Short title and table of contents
Short title
This Act may be cited
as the Housing Preservation and Tenant
Protection Act of 2010
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Implementation.
Sec. 3. Budget treatment.
Title I—Preservation of federally financed and State-financed affordable housing at risk of conversion to market-rate housing
Sec. 101. Conversion of rent supplement and RAP contracts to project-based rental assistance under section 8.
Sec. 102. Preservation of properties with expiring use restrictions.
Sec. 103. Enhanced voucher assistance and preservation project-based section 8 assistance for State-financed affordable housing.
Sec. 104. Project-based preservation assistance.
Sec. 105. Preservation of State-financed affordable housing.
Sec. 106. Preservation exchange program.
Sec. 107. Federal first right of refusal.
Sec. 108. Amendment to Low-Income Housing Preservation and Resident Homeownership Act of 1990.
Sec. 109. Preservation of HUD-held and HUD-owned buildings.
Sec. 110. Authority for HUD to assign flexible subsidy loans.
Sec. 111. Use of existing section 8 funds to preserve and revitalize affordable housing.
Sec. 112. Authority for Ginnie Mae to securitize FHA risk-sharing mortgages.
Title II—Restoration of Housing at Risk of Loss Due to Deterioration
Sec. 201. Authority to transfer rental assistance to other properties.
Sec. 202. Building transfers: requirements for purchasers of FHA insured projects and section 8 projects.
Sec. 203. Use of interest reduction payments for rehabilitation grants.
Sec. 204. Clarification of budget-based rent increases for rehabilitated projects.
Sec. 205. Interest reduction payments for section 236 projects experiencing a reduction of units.
Title III—Protection of Residents
Sec. 301. Tenant protection voucher to replace lost subsidized units on 1-for-1 basis.
Sec. 302. Maintenance of housing.
Sec. 303. Resident enforcement of public housing agency or project owner agreements with HUD.
Sec. 304. Resident access to building information.
Title IV—Preservation of troubled projects facing foreclosure
Sec. 401. Maintaining affordability through escrowing of rental assistance.
Sec. 402. Multifamily housing mortgage foreclosure.
Sec. 403. Building acquisition: valuation of physically distressed properties sold by HUD.
Sec. 404. Investment through up-front grants from General Insurance Fund.
Sec. 405. Maintaining project-based assistance for projects disposed of by HUD.
Sec. 406. Correcting harm caused by late subsidy payments.
Title V—Incentives under MAHRA for owners to maintain housing affordability
Sec. 501. Extension of mark-to-market program.
Sec. 502. Maintaining affordability in preservation project transactions.
Sec. 503. Encouraging continued participation in assisted housing programs.
Sec. 504. Prepayment of FHA mortgages on multifamily housing.
Sec. 505. Period of eligibility for nonprofit debt relief.
Sec. 506. Acquisition of restructured projects by nonprofit organizations.
Sec. 507. Rent adjustments upon subsequent renewals of section 8 contracts.
Sec. 508. Budget-based rent adjustments.
Sec. 509. Independent appraisal requirement in cases of divergent rent studies.
Sec. 510. Extension of housing assistance payment contract.
Sec. 511. Otherwise eligible projects.
Sec. 512. Exception rents.
Sec. 513. Disaster-damaged eligible projects.
Sec. 514. Funding for tenant and other participation and capacity building.
Title VI—Preservation database
Sec. 601. Preservation database.
Title VII—Section 202 Supportive Housing for the Elderly
Sec. 701. Short title and table of contents.
Subtitle A—New construction reforms
Sec. 711. Project rental assistance.
Sec. 712. Selection criteria.
Sec. 713. Development cost limitations.
Sec. 714. Owner deposits.
Sec. 715. Definition of private nonprofit organization.
Sec. 716. Preferences for homeless elderly.
Sec. 717. Nonmetropolitan allocation.
Subtitle B—Refinancing
Sec. 721. Approval of prepayment of debt.
Sec. 722. Sources of refinancing.
Sec. 723. Use of unexpended amounts.
Sec. 724. Use of project residual receipts.
Sec. 725. Additional provisions.
Subtitle C—Assisted living facilities
Sec. 731. Definition of assisted living facility.
Sec. 732. Monthly assistance payment under rental assistance.
Subtitle D—National Senior Housing Clearinghouse
Sec. 741. National senior housing clearinghouse.
Title VIII—Rural housing preservation
Sec. 801. Short title.
Sec. 802. Preservation of multifamily housing.
Sec. 803. Rural preservation and rural tenant protection vouchers.
Sec. 804. Tenant participation.
Sec. 805. Priority for financing.
Sec. 806. Conforming amendment.
Sec. 807. Regulations.
Implementation
The Secretary of Housing and Urban Development and the Secretary of Agriculture, as applicable, shall by notice establish any additional requirements that may be necessary to immediately, except as specifically provided otherwise, carry out the provisions of this Act. Such notice shall take effect upon issuance.
Budget treatment
The budgetary
effects of this Act, for the purpose of complying with the Statutory
Pay-As-You-Go Act of 2010, shall be determined by reference to the latest
statement titled Budgetary Effects of PAYGO Legislation
for this
Act, submitted for printing in the Congressional Record by the Chairman of the
Committee on the Budget of the House of Representatives, provided that such
statement has been submitted prior to the vote on passage.
Preservation of federally financed and State-financed affordable housing at risk of conversion to market-rate housing
Conversion of rent supplement and RAP contracts to project-based rental assistance under section 8
Conversion
Notwithstanding any other provision of law
and subject to the availability of appropriations, the Secretary of Housing and
Urban Development shall, at the request of a project owner with a contract
under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C.
1701s) or a contract under section 236(f)(2) of the National Housing Act (12
U.S.C. 1715z–1(f)(2)), submitted during the 12-month period beginning on the
date of the enactment of this Act, convert such contract to project-based
assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f) (in this section referred to as section 8
).
Terms
A contract for project-based rental assistance under section 8 pursuant to a conversion under subsection (a) of this section shall—
be subject to the availability of amounts provided in appropriations Act; and
have a term that is not shorter in duration than the remaining term of the contract that is converted, pursuant to subsection (a) of this section, to project-based assistance under such section 8, plus an additional term of not less than 5 years, and up to 30 years at the request of the owner.
Loan management assistance contracts
After the initial year of a project-based rental assistance contract under section 8 for loan management assistance, the contract may, at the option of the project owner and subject to the conditions specified in section 524(a)(4)(D) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), be converted to a renewal contract under such section 524, subject to the availability of appropriations, if the project owner agrees to a contract term that extends 10 years beyond the remaining term of the assistance contract.
Use restrictions
Notwithstanding any other provision of law, conversion of a contract pursuant to subsection (a) shall not diminish the affordability restrictions or number of assisted units applicable to the property that is subject to the contract converted.
Use of recaptured amounts
Any budget authority recaptured as a result of conversion of any contract pursuant to subsection (a) shall be used by the Secretary of Housing and Urban Development for making assistance payments with respect to the initial 12-month period of the contract for project-based rental assistance under section 8 resulting from such conversion.
Preservation of properties with expiring use restrictions
Federal assistance and extension of affordability requirements
Provision of Assistance
Authority
The Secretary of Housing and Urban Development may use amounts made available under paragraph (5) to provide assistance under this section with respect to covered multifamily housing properties.
Applications and selection criteria
The Secretary shall provide for owners of covered multifamily housing properties to submit applications for assistance under this section and shall establish criteria for selection of properties to receive assistance that shall take into consideration the need of a property for such assistance.
Rehabilitation assistance
The Secretary may provide a grant or loan under this paragraph to the owner or purchaser of the property, subject to the following requirements:
Purpose
The assistance shall be provided for the purpose of rehabilitating the property for continued use as housing affordable to low- and moderate-income families.
Eligible use
Amounts from the grant or loan may be used only for payment of nonrecurring maintenance and capital improvements for the property, and associated transaction costs, under such terms and conditions as are determined by the Secretary.
Per unit amount limitations
The amount from a grant or loan used with respect to a dwelling unit in the property may not exceed the per unit dollar amount limitation as the Secretary shall establish for purposes of this paragraph for dwelling units of the applicable size.
Required extension of affordability restrictions
The Secretary may provide assistance under this paragraph for a property only if the owner of the property enters into such binding commitments as the Secretary may require, which shall be applicable to any subsequent owner, to ensure that the property will be operated, for a period of not less than 30 years that begins on the termination date for the property, in accordance with all affordability restrictions that are applicable to the property under the multifamily housing subsidy program under which the property is assisted before the termination date, with flexibility to recognize more significant restrictions accompanying other subsidies for the property.
Assistance for purchase
The Secretary may provide a grant or loan under this paragraph to an eligible organization under subparagraph (B) for acquisition of a covered multifamily housing property, subject to the following requirements:
Purpose
The assistance shall be provided for the purpose of facilitating acquisition of properties by eligible organizations whose missions are to provide affordable housing to low- and moderate-income families.
Eligible organizations
A grant or loan under this paragraph may be made only to a nonprofit organization, a for-profit organization, or a public housing agency (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) that provides such assurances as the Secretary may require that the organization—
will acquire the property; and
is capable of managing the property and related facilities (either directly or through a contract) for the remaining useful life of the property and related facilities.
Eligible use
Amounts from the grant or loan may be used only to cover any direct costs (other than the purchase price), including transaction costs, incurred by the eligible organization in purchasing and assuming responsibility for the property and related facilities involved.
Per unit amount limitations
The amount from a grant or loan used with respect to a dwelling unit in the property may not exceed the per unit dollar amount limitation as the Secretary shall establish for purposes of this paragraph for dwelling units of the applicable size.
Required extension of affordability restrictions
The Secretary may provide assistance under this paragraph for a property only if the eligible organization that purchases the property enters into such binding commitments as the Secretary may require, which shall be applicable to any subsequent owner, to ensure that the property will be operated, for the remaining useful life of the property, in accordance with all affordability restrictions that are applicable to the property under the multifamily housing subsidy program under which the property is assisted before the termination date.
Low- and moderate-income affordability assistance
The Secretary may provide new project-based assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) for currently unassisted units in covered multifamily housing properties occupied by tenants otherwise eligible for such assistance, subject to the following requirements:
Purpose
The assistance shall be provided for the purpose of maintaining the affordability of dwelling units in covered multifamily housing properties not currently provided project-based rental assistance.
Eligibility
Assistance may be made available for a property only if the property—
is located in an area having a demonstrated demand for affordable rental housing; or
may be subject to rent level increases as the result of mortgage maturity or termination or as the result of a recapitalization activity approved by the Secretary or the Secretary of Agriculture.
Form and term
The assistance shall be in the form of a housing assistance payment contract under such section 8 and shall be provided for such term as may be agreed to by the Secretary and the owner of the property. The form of assistance may include an amendment of an existing assistance contract to cover additional units in the subject property.
Prevention of duplicative subsidies
Assistance may not be provided for any dwelling unit in a property if such assistance would duplicate other project- or tenant-based rental assistance of any kind for the dwelling unit from any source.
Amount and rent levels
The Secretary shall determine the amount of annual assistance provided for a property based on rent levels, for the dwelling units in the property that are subject to affordability restrictions pursuant to subparagraph (F), that are equal to the lesser of—
comparable market rents for the market area in which the property is located for dwelling units of the applicable size; and
150 percent of the fair market rentals established under section 8(c) of the United States Housing Act of 1937 for the market area in which the property is located for dwelling units of the applicable size.
Required extension of affordability restrictions
The Secretary may provide assistance under this paragraph for a property only if the owner of the property enters into such binding commitments as the Secretary may require, which shall be applicable to any subsequent owner, to ensure that the property will be operated, for a period not shorter than the term of the assistance agreed to pursuant to subparagraph (C) or 10 years, whichever is longer, that begins on the termination date for the property, in accordance with all affordability restrictions that are applicable to the property under the multifamily housing subsidy program under which the property is assisted before the termination date.
Authorization of appropriations
There are authorized to be appropriated for assistance under this subsection such sums as may be necessary.
Enhanced vouchers
Qualification; election to remain in unit
Section 8(t)(1) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)(1)(B)) is amended—
in the matter
preceding subparagraph (A), by inserting and shall not require that the
family requalify under the selection standards for a public housing agency in
order to be eligible for such assistance
before the comma; and
by striking subparagraph (B) and inserting the following new subparagraph:
the assisted family may elect to remain in the same project in which the family was residing on the date of the eligibility event for the project regardless of unit and family size standards normally used by the administering public housing agency (except that tenants may be required to move to units of appropriate size if available on the premises), and the owner of the unit shall accept the enhanced voucher and terminate the tenancy only for serious or repeated violation of the terms and conditions of the lease or for violation of applicable law; and
if, during any period the family makes such an election and continues to so reside, the rent for the dwelling unit of the family in such project exceeds the applicable payment standard established pursuant to subsection (o) for the unit, the amount of rental assistance provided on behalf of the family shall be determined using a payment standard that is equal to the rent for the dwelling unit (as such rent may be increased from time-to-time), subject to paragraph (10)(A) of subsection (o) and any other reasonable limit prescribed by the Secretary, except that a limit shall not be considered reasonable for purposes of this subparagraph if it adversely affects such assisted families;
.
Provision to residents of assisted multifamily projects upon termination date
Requirement
Upon the termination date for each assisted multifamily housing property, to the extent that amounts for assistance under this paragraph are provided in advance in appropriation Acts, the Secretary of Housing and Urban Development shall make enhanced voucher assistance under section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)) available on behalf of each family described in subparagraph (B). The Secretary shall make such assistance available no later than 60 days before the termination date on behalf of each family described in subparagraph (B) that elects to move from the property.
Eligibility
A family described in this subparagraph is a family who—
is a low-income family (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b))); or
is a moderate-income family that is—
an elderly family (as such term is used in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)));
a disabled family (as such term is used in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b))); or
residing in a low-vacancy area (as determined by the Secretary); and
is residing in—
a property that immediately before such termination date was an assisted multifamily housing property; and
a dwelling unit that is not assisted after such termination date under section 8 of the United States Housing Act of 1937.
Eligibility event
Section 8(t)(2) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(t)(2)) is amended by adding
after the period at the end the following new sentence:
Such term includes, with respect to an
assisted multifamily housing property (as such term is defined in section
102(f) of the Housing Preservation and Tenant
Protection Act of 2010), the occurrence of the termination date
(as such term is defined in such section 102(f)) for the
property.
Regulations
The Secretary of Housing and Urban Development shall issue regulations to implement the amendments made by this subsection not later than the expiration of the 6-month period beginning on the date of enactment of this Act, and such regulations shall require that the provisions of such amendments relating to termination of tenancy shall be contained in the lease.
Notification requirement
Timing
An owner of an assisted multifamily housing property, including any owner of a property with rent limitations that expire concurrently with the expiration of the term of the mortgage for the property, who intends to terminate or alter the affordability restrictions for the property on or after the termination date for the property shall, not less than 12 months before such termination date, provide written notice of such termination date to the Secretary of Housing and Urban Development, the chief executive officer of the State and the unit of general local government (as such term is defined in section 104 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12704)) in which the property is located, and each tenant of the property.
Contents
The notice shall include—
a statement specifying any changes in the terms or applicability of the affordability restrictions for the property that the owner intends to make on or after the termination date for the property;
a statement that, if the owner proceeds with such intended changes and the Congress makes funds available, the Department of Housing and Urban Development will provide tenant-based rental assistance to all eligible residents, enabling them to choose the place they wish to rent, which may include the right to remain in the dwelling unit in which they currently reside; and
a statement that, if the Congress makes funds available, the owner and the Secretary may yet agree to renewal of assistance and affordability restrictions for the property, thereby obviating the need for such tenant-based rental assistance.
Failure to Provide Notice
If the owner does not provide the notice required under this subsection, notwithstanding any inapplicability of the affordability restrictions for the property, the owner may not evict the tenants or increase the tenants’ rent payments until such time as the owner has provided the notice and the 12-month period beginning upon the provision of such notice has elapsed.
Other Terms
The Secretary may, to preserve affordable housing or protect tenants in such properties, establish additional notice requirements.
Savings Provision
This subsection may not be construed to annul, alter, affect, or preempt any provision of the law of a State or political subdivision thereof requiring notice regarding termination of assistance or affordability restrictions with respect to a multifamily housing project or to exempt any person from complying with such a law.
Projects with common use agreements
Notwithstanding any provision of the Emergency Low Income Housing Preservation Act of 1987 (12 U.S.C. 1715l note), if two covered multifamily housing properties are encumbered by use agreements that were recorded in land records on the same date pursuant to such Act and both such properties are subject to a single mortgage, both such use agreements shall be deemed to expire on the earlier of the expiration dates stated in such use agreements, but only if the owner of the properties agrees to maintain any project-based rental assistance for both such properties for the 30-year period beginning upon such common expiration date. At the request of the owner, the Secretary shall establish contract rents for such project-based assistance at levels for comparable properties in the same market area.
Annual and semiannual reviews
Annual Review
To ensure compliance with this section, the Secretary shall conduct an annual review on actions taken under this section and the status of covered multifamily housing properties and submit a report to the Congress regarding each such annual review.
Semiannual Review
Not less than semiannually during the 2-year period beginning on the date of the enactment of this Act and not less than annually thereafter, the Secretary shall submit reports to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate stating, for such periods, the total number of assisted multifamily housing properties for which notification has been provided under subsection (c) during such period, the total number of covered multifamily housing properties for which assistance has been provided under subsection (a), and the type or types of such assistance provided.
Definitions
For purposes of this section:
Affordability restrictions
The term affordability restrictions
means, with respect to a covered multifamily housing property, limits imposed
by regulation, regulatory agreement, or contract on tenant rents, rent
contributions, or income eligibility.
Assisted multifamily housing property
The term assisted multifamily
housing property
means a multifamily housing project for which
assistance is provided under a multifamily housing subsidy program.
Comparable properties
The term comparable properties
means,
with respect to a covered multifamily housing property, properties in the same
market area, where practicable, that—
are similar to the covered multifamily housing property as to neighborhood (including risk of crime), type of location, access, street appeal, age, property size, apartment mix, physical configuration, property and unit amenities, utilities, and other relevant characteristics;
are not receiving rental assistance of any kind from any source; and
are not subject to affordability restrictions of any kind.
Covered multifamily housing property
The term covered multifamily
housing property
means an assisted multifamily housing property for
which the termination date will occur within the 10-year period beginning on
the date of the enactment of this Act.
Low-income family
The term low-income family
has the meaning
given such term in section 3(b) of the United States Housing Act of 1937 (42
U.S.C. 1437a(b)).
Moderate-income family
The term moderate-income family
has the
meaning given such term in section 229 of the Low-Income Housing Preservation
and Resident Homeownership Act of 1992 (12 U.S.C. 4119).
Multifamily housing subsidy program
The term multifamily housing
subsidy program
means—
the rent supplement program under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s);
the below-market interest rate mortgage insurance program under section 221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3));
a contract under section 236(f)(2) of the National Housing Act (12 U.S.C. 1715z–1(f)(2));
the program for interest reduction payments under section 236 of the National Housing Act (12 U.S.C. 1715z–1) and any comparable State program providing for interest reduction payments;
the program for supportive housing for the elderly under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), including assistance under such section as in effect before the enactment of the Cranston-Gonzalez National Affordable Housing Act;
the program for rural rental housing under section 515 of the Housing Act of 1949 (42 U.S.C. 1485); and
any other mortgage insurance program provided under the National Housing Act for which the insured property is subject to budget-based rent restrictions.
Nonprofit organization
The term
nonprofit organization
has the meaning, with respect to housing
assisted under this section, given such term in section 202(k) of the Housing
Act of 1959 (12 U.S.C. 1701q(k)).
Secretary
The
term Secretary
means the Secretary of Housing and Urban
Development.
Termination date
The term termination date
means, with respect
to an assisted or a covered multifamily housing property, the date that—
the mortgage, loan, or capital advance for the property matures or expires and the affordability restrictions applicable to the property because of assistance for the property pursuant to a multifamily housing subsidy program terminate with respect to the property;
an assistance contract for the property that is not renewed, terminates, or expires;
in the case of a property that is not eligible low-income housing, as such term is defined in section 229 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4119), the mortgage or loan that covers the property is prepaid or an insurance contract that covers the property terminates; or
use restrictions imposed with respect to the property pursuant to the Emergency Low Income Housing Preservation Act of 1987 expire.
Regulations
The Secretary may issue any regulations necessary to carry out this section.
Enhanced voucher assistance and preservation project-based section 8 assistance for State-financed affordable housing
Enhanced voucher assistance
Requirement
Upon the prepayment or maturity of a mortgage for which interest reduction payments have been made through a State housing program or financed by a State housing finance agency and subsidized by interest reduction payments made pursuant to section 236 of the National Housing Act (12 U.S.C. 1715z–1), to the extent that amounts for assistance under this subsection are provided in advance in appropriation Acts, the Secretary of Housing and Urban Development shall make enhanced voucher assistance under section 8(t) of the United States Housing Act of 1937(42 U.S.C. 1437(t)) available on behalf of families described in paragraph (2).
Eligible families
A family described in this paragraph is a family that—
is a low-income family, as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)); or
is a moderate-income family that has an income that is not less than 80 percent, and not greater than 95 percent, of the median income for the area, as determined by the Secretary, that—
is an elderly family (as such term is used in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b));
is a disabled family (as such term is used in such section 3(b); or
resides in a low-vacancy area, as determined by the Secretary; and
on such prepayment or maturity date is residing in dwelling unit of the project that—
immediately before such prepayment or maturity was subject to the mortgage for which interest reduction payments were made and subject to affordability restrictions; and
is not assisted after such prepayment or maturity date under section 8 of the United States Housing Act of 1937, other than as provided under section 8(t)(4) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)(4)).
Eligibility event
Paragraph (2) of section 8(t) of the United States Housing
Act of 1937 (42 U.S.C. 1437f(t)(2)), as amended by the preceding provisions of
this Act, is further amended by adding after the period at the end the
following new sentence: Such term also includes, with respect to a
multifamily family housing project with a mortgage for which interest reduction
payments have been made through a State housing program or financed by a State
housing finance agency, the prepayment or maturity of such mortgage which
results in eligible residents of such housing project being eligible for
enhanced voucher assistance under this subsection, pursuant to section 103(a)
of the Housing Preservation and Tenant
Protection Act of 2010.
.
Preservation project-Based section 8 assistance
In general
Notwithstanding any other provision of law, in connection with the prepayment or maturity of a multifamily housing project mortgage subsidized by interest reduction payments made through a State housing program or financed by a State housing finance agency and subsidized by interest reduction payments made pursuant to section 236 of the National Housing Act (12 U.S.C. 1715z–1), to prevent displacement of residents and to further preservation and affordability of such multifamily housing project, at the election of the project owner and in lieu of enhanced voucher assistance under subsection (a) of this section or project-based voucher assistance under subsections (t)(4) and (o)(13)(N) of section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), the Secretary of Housing and Urban Development shall, pursuant to the authority under subsections (a) and (b) of such section 8, enter an annual contributions contract with the State housing finance agency to permit the State housing finance agency enter project-based assistance contract under this subsection covering all units in the project for which such enhanced or project-based voucher assistance would otherwise be provided.
Contract terms
Any project-based assistance contract pursuant to this subsection shall—
be considered for all purposes a contract entered into under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f);
have a term of at least 20 years;
provide such assistance at rent levels established as provided under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note);
be subsequently renewable at the request of the owner under such section 524;
be subject to the availability of amounts provided in appropriations Acts; and
be subject to such other terms as the Secretary considers appropriate.
Income targeting
To the extent that dwelling units subject to an assistance contract under this paragraph are occupied by families eligible for enhanced voucher assistance under section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)), the units shall be considered to be in compliance with all income targeting requirements under the United States Housing Act of 1937.
Tenant eligibility
Notwithstanding any other provision of law, in the multifamily housing project for which project-based assistance is provided pursuant to this subsection, each eligible family described in subsection (a)(2) of this section that resides in a dwelling unit in such project on the date such assistance contract first becomes effective shall be considered to meet any applicable requirements for income eligibility and occupancy.
Contract administration
Notwithstanding any other provision of law, any contract for project-based assistance entered into pursuant to this subsection shall be administered by the project-based contract administrator of the State in which the multifamily housing project is located.
Project-based preservation assistance
Enhanced vouchers
Section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)) is amended—
by redesignating paragraph (4) as paragraph (5); and
by inserting after paragraph (3) the following new paragraph:
Project-based preservation assistance
Authority
Notwithstanding any other provision of law, in the case of a multifamily housing project eligible under subparagraph (C), the Secretary shall, subject to the availability of amounts provided in advance in appropriation Acts and at the request of the owner of the project, provide project-based preservation assistance in accordance with this paragraph, in such form authorized in subparagraph (B) as is requested by the owner, in lieu of enhanced voucher assistance under this subsection. Such owner of the project shall agree to accept such project-based preservation assistance for a period of not less than 20 years: Provided, That any renewal contract during such period is offered on terms and conditions comparable to the original contract.
Forms
Project-based preservation assistance provided in accordance with this paragraph shall be in one of the following forms:
Project-based preservation vouchers
Project-based voucher assistance, which shall be provided in accordance with subsection (o)(13)(N).
Project-based assistance
Project-based assistance under the terms and conditions in section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note). In determining the initial rent levels for a contract for project-based assistance under this subparagraph, the Secretary shall establish initial contract rents at the comparable market rents for the area (as such term is defined in section 524(a)(5) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note)).
Eligible projects
A multifamily housing project is eligible under this subparagraph if—
an eligibility event for the project occurs; and
the project is not a project for which the owner has opted not to renew a contract for project-based rental assistance under this section; or
enhanced voucher assistance has already been provided for the project pursuant to the conditions specified in subparagraph (F)(ii).
Eligible units
Income eligibility
Assistance pursuant to this paragraph may be provided for all dwelling units in a multifamily housing project for which tenants residing in the project at the time assistance is initially provided meet income eligibility requirements for enhanced voucher assistance under this subsection.
Additional units
At the request of the owner of a multifamily housing project for which assistance pursuant to this paragraph is provided, the Secretary may approve assistance for additional dwelling units, which may include units that are vacant at the time of the eligibility event, subject to a determination by the Secretary that such additional assistance is necessary or desirable to further the purposes reflected in subparagraph (E).
Rent payments
Eligible families residing in a project at the time assistance pursuant to this paragraph is provided shall be subject to the provisions of subparagraphs (A) and (D) of paragraph (1) of this subsection. Notwithstanding the preceding sentence, an eligible family that is a low-income family shall not be required to pay as rent for a dwelling unit assisted pursuant to this paragraph an amount that exceeds 30 percent of the family’s adjusted monthly income.
Income eligibility
For purposes of income targeting requirements under section 16 of the United States Housing Act of 1937 (42 U.S.C. 1437n), tenants initially assisted under this paragraph shall not be considered new tenants.
Required determinations
As a condition of entering into a contract pursuant to this paragraph, the Secretary shall have determined, pursuant to standards established by the Secretary and before entering into such contract, that—
the housing to be assisted under the contract is economically viable; and
there is a significant demand for the housing;
the housing will contribute to a community revitalization plan or to deconcentrating poverty and expanding housing and economic opportunities; or
the continued affordability of the housing otherwise is an important asset to the community.
Timing of request
Projects for which request is made before eligibility event
In the case of a project eligible for assistance under subparagraph (C)(i) that is requested prior to the occurrence of the eligibility event, a contract for assistance pursuant to this paragraph shall be provided upon the occurrence of the eligibility event.
Request made after issuance of enhanced vouchers
In the case of a project eligible for assistance under subparagraph (C)(ii) that is requested after the issuance of enhanced voucher assistance for the project, a contract for assistance pursuant to this paragraph shall be provided only—
if the eligibility event for the project occurred before the date of the enactment of the Housing Preservation and Tenant Protection Act of 2010 and a request for such assistance is made within 12 months after such date of enactment (or such longer period as the Secretary may permit to facilitate preservation of the project as affordable housing);
if the project is sold or otherwise transferred and the new owner requests such assistance within 12 months (or such longer period as the Secretary may permit to facilitate preservation of the project as affordable housing) of such purchase; or
in such other circumstances as the Secretary may determine are necessary or appropriate to facilitate preservation of the project as affordable.
.
PHA project-Based voucher assistance
Paragraph (13) of section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is amended by adding at the end the following new subparagraph:
Preservation assistance
Authority
Project-based voucher assistance in accordance with this subparagraph shall be provided for projects eligible for such assistance pursuant to subsection (t)(4).
Authority for higher rents
At the request of the owner of a multifamily housing project for a contract for assistance in accordance with this subparagraph to establish rents at levels above those permitted by subparagraph (H) of this paragraph, a public housing agency may request, and the Secretary may approve, higher unit rents if necessary to preserve housing opportunities that further the purposes of subsection (t)(4)(E).
Projects in multiple PHA jurisdictions
If the Secretary has not entered into a contract with a public housing agency to provide enhanced voucher assistance under subsection (t) for the project at the time the owner of a multifamily housing project requests assistance in accordance with this subparagraph, and the project is located within the jurisdiction for the program under this subsection of more than one public housing agency, in determining which agency will administer such assistance, the Secretary shall—
consider the ratio of the number of vouchers to be awarded under this subparagraph and of other project-based vouchers administered under this paragraph to the total number of vouchers administered by an agency; and
among other factors, provide preference to an agency for which the total number of project-based vouchers administered under this paragraph, including vouchers to be awarded pursuant to this subparagraph, would not exceed 50 percent of the total number of all vouchers to be administered by the agency after such award.
Inapplicability of goals
Subparagraph (C) shall not apply to a housing assistance payment contract pursuant to this subparagraph.
Disregard of assistance under percentage limitation
Amounts provided pursuant to this subparagraph shall not be considered for purposes of calculating the limitation under subparagraph (B).
Inapplicability of income-mixing requirement
Subparagraph (D) shall not apply with respect to a housing assistance payments contract pursuant to this subparagraph.
.
Preservation of State-financed affordable housing
Maximum contract term
In the case of a State housing finance agency that has entered into a housing assistance payments contract with the owner of a housing project for project-based rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), using the November 1975 version of form HUD 52645A of the Department of Housing and Urban Development, under the Section 8 Housing Assistance Payment Program for State Housing Finance and Development Agencies, if such contract provides that the maximum total term of the contract for any dwelling unit shall not exceed a period terminating on the date of the last payment of principal due on the permanent financing, the Secretary of Housing and Urban Development shall treat such provision as providing for a maximum term extending to the originally scheduled maturity date of the permanent financing, without regard to any prepayment of such permanent financing.
Amendment to Mark-to-Market provisions
Section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 is amended—
by redesignating subsection (g) as subsection (i); and
by inserting after subsection (f) the following new subsection:
State housing agency contracts
Rent adjustments for extended contracts
In the case of a contract for project-based assistance under section 8 of the United States Housing Act of 1937 pursuant to the State Housing Agencies program governed by part 883 of the Secretary’s regulations (24 C.F.R. 883), the provisions of this section authorizing the increase of rent levels to comparable market rents shall apply upon the expiration of any contract term, notwithstanding the renewal provisions of the contract. If, at any time during the five-year period ending upon the final expiration date of any such contract, the owner of the housing project assisted under the contract enters into a binding commitment to renew the contract at the rent levels authorized under subsection (a)(4)(A) for an additional five-year term beginning upon the final expiration of the contract, the annual rent adjustment during such five-year period ending upon such final expiration date may be to such rent levels.
Projects with debt financing
In the case of a contract for project-based assistance under section 8 for a project with debt financing provided by a State housing agency or local housing authority, with the approval of the State housing agency or local authority, the owner may terminate the contract and enter into a new contract for project-based assistance under this section for a term of 20 years, subject to the availability of amounts provided by appropriation Acts, but only if the owner enters into an enforceable commitment to preserve the affordability of the project for not fewer than 55 years from the date of such contract, subject to the continued provision of rental assistance under section 8 or a comparable program.
.
Preservation exchange program
Establishment of program
The Secretary of Housing and Urban Development shall carry out a preservation exchange program under this section to provide for the transfer of preservation projects to purchasers who agree to maintain the projects for use for affordable housing.
Participation
Election
The Secretary shall provide for owners of preservation projects to elect, in accordance with such procedures as the Secretary shall establish, to participate in the preservation exchange program under this section.
Transfer of preservation projects
A selling owner of a preservation project may, in accordance with this section, enter into a contract for transfer of the project to a preservation purchaser during the 12-month period beginning upon such election.
Offer period
A selling owner of a preservation project shall agree not to sell, transfer, or further encumber the preservation project during the period of the owner’s participation in the program, with respect to such project, except as otherwise provided in this section.
Compliance with program requirements
Except as otherwise provided by the Secretary, a preservation project may be sold under the program only if all of the parties to the transaction comply with the requirements of this section.
Notice of participation and certification
Recipients; timing
Each selling owner shall of a preservation project shall—
not later than the date that is 12 months before the date of maturity or expiration of the mortgage on the preservation project, provide written notice of election to participate in the program with respect to the project to—
the Secretary;
each tenant of the project;
any public housing agency or other organization representing tenants of the preservation project; and
qualified State and local authorities; and
post such notice conspicuously in the common area of the preservation project for the duration of the 12-month period beginning on the date that notice is required to be provided pursuant to subparagraph (A).
Contents
Notice required under subparagraph (A) shall—
include a statement that the selling owner has elected to participate in the preservation exchange program and to seek a contract for sale of the preservation project to a preservation purchaser within the 12-month period following the date of the notice, or within such other time period as permitted by this section;
clearly identify the preservation project;
identify, and provide contact information for, the selling owner; and
include such other information regarding the preservation project and its potential sale under the program as the Secretary may require, which shall include information concerning any applicable subsidies or restrictions applicable to the preservation project.
Certification
Not later than 7 days after completion of all notice requirements of paragraph (1) with respect to a preservation project, the selling owner shall certify in writing to the Secretary that notice to all recipients has been provided as required under this section.
Notification to Congress and public
Not later than 14 days after certification pursuant to paragraph (3) is provided to the Secretary regarding a preservation project, the Secretary shall—
provide to the Member of the House of Representatives representing the district in which the project is located, and to the Members of the Senate for the State in which the project is located, a copy of such notice and certification; and
make such notice and certification publicly available at an easily identifiable World Wide Web location of the Department of Housing and Urban Development.
Opportunity To purchase
Notification; offer
During the offer period referred to in subsection (b)(3) with respect to a preservation project—
the Secretary shall post on an easily identifiable World Wide Web location of the Department of Housing and Urban Development information that identifies the preservation project as eligible for purchase or transfer pursuant to the preservation exchange program, additional information about the property, as determined by the Secretary, and the identity of a contact person on behalf of the selling owner who may be contacted by a potential preservation purchaser; and
a potential preservation purchaser may make an offer to purchase the preservation project, in accordance with the requirements of this section, by providing the offer, in writing, to the selling owner and a copy of the offer to the Secretary.
Determination of bona fide offer
During the 21-day period beginning upon receipt
of a copy of an offer to purchase a preservation project made by a potential
preservation purchaser pursuant to paragraph (1)(B) (in this subsection
referred to as the review period
), the Secretary shall—
review the terms of the offer to purchase and determine whether it is a bona fide preservation purchase offer meeting the requirements of subsection (e); and
provide notice of such determination to the parties.
Tolling of other periods
During the review period for an offer to purchase a preservation project or until earlier receipt of a determination from the Secretary under paragraph (2), all other time periods set forth in this section shall be tolled with respect to such preservation project.
Action on offer
With respect to a bona fide offer to purchase a preservation project made by a potential preservation purchase, during the 30-day period that begins upon the earlier of the receipt of a determination from the Secretary under paragraph (2) regarding the offer or the expiration of the review period, the selling owner shall accept or reject the offer, subject to the conditions and requirements set forth in this section.
Accepted offer; contract
If a selling owner accepts a bona fide preservation purchase offer made by a potential preservation purchaser, such parties shall promptly enter into a binding contract that reflects the terms of the accepted offer.
Declined offer
If a selling owner declines to accept any bona fide preservation purchase offer made to the owner, such owner shall—
provide to the Secretary a written explanation of the basis for its decision; and
repay to the Secretary all funds it received as a participant in the program, plus interest at rate determined by the Secretary at the time the funds were made available.
Bona fide preservation purchase offer
An offer to purchase a preservation project shall constitute a bona fide preservation purchase offer meeting the requirements of this subsection only if the offer—
includes an agreement by the preservation purchaser to enter into such agreements, which shall be contained in the deed or other recorded instruments for the preservation project, as specified by the Secretary, that ensure that the preservation project will remain affordable for very-low income families for a period of not less than 40 years from the date of transfer pursuant to sale under such offer, utilizing all available assistance, including renewal of existing Federal assistance contracts and leasing to holders of tenant-based assistance;
includes an agreement by the preservation purchaser to accept any contract for project-based rental assistance applicable to the preservation project, notwithstanding the transfer of the preservation housing to the preservation purchaser, including the renewal of such contract upon expiration, for a period of not less than 40 years from the date of transfer;
requires that the preservation purchaser execute such agreements, which shall be contained in the deed or other recorded instruments for the preservation housing, as specified by the Secretary, that ensure that the preservation project and related facilities will remain affordable for very-low income households for a period of not less that 40 years from the date of transfer, using all available assistance, including renewal of existing Federal assistance contracts and leasing to holders of tenant-based assistance; and
includes such other terms and conditions as may be required by the Secretary.
Incentives
Notwithstanding any other provision of law or regulation, the Secretary may, with respect to a preservation project—
suspend physical inspections and management reviews of the project, during the period that begins upon the provision to the Secretary by the selling owner notice of its election to participate in the program and ending upon the completion of the transfer of the preservation project to a preservation purchaser or termination of participation of the selling owner in the program;
streamline approval of requests for prepayment, assignment of Housing Assistance Payments contracts, transfer of physical assets, and other activities and functions, to facilitate the sale or transfer under the program to a preservation purchaser;
release project resources, in the form of reserve for replacement funds or project residual receipts, to the selling owner for purposes related to preparation of the preservation project for sale under the program, applicable pre-development costs, or transaction costs related to sale or transfer of the preservation project under the program;
provide advances in the form of a forgivable loan for the selling owner to be used for direct predevelopment and administrative costs for preparation of the preservation project for sale under the program, and the transfer of the preservation project to the preservation purchaser, but not including compensation for property value beyond the purchase price;
provide grants or loans to a preservation purchaser who has entered into a bona fide preservation purchase contact under the program with the selling owner, which grant or loan funds shall be used for to purchase or rehabilitate the preservation project; and
provide grants or loans pursuant to section 102(a) of this Act to a preservation purchaser who has entered into a bona fide preservation purchase contract under the program with the selling owner.
Release of selling owner
Upon closing of the sale or transfer of the preservation project pursuant to this section—
the selling owner shall be released from obligations with respect to the preservation project under—
the new construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside programs, and any other program providing project-based assistance, under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f);
the below-market interest rate program under paragraphs (3) and (5) of section 221(d)(3) of the National Housing Act (12 U.S.C. 1715(d));
section 236 of the National Housing Act (12 U.S.C. 1715z–1);
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q);
the rent supplement program under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s); or
other Federal affordable housing programs, as identified by the Secretary; and
the preservation purchaser agrees—
to operate the preservation project in accordance with the provisions of this section and any agreements entered into pursuant to this section; and
to maintain any existing limits or restrictions on the amount of tenant rents, rent contributions, or income eligibility of tenants, or on the use of the preservation project, as required by the Secretary, for a period of not less than 40 years from the transfer date, except that rents may be increased to the extent that additional project-based assistance is provided by the Secretary.
Renewal of participation in program
In general
A selling owner who has participated in the program in good faith for 12 months and does not receive or does not reject a bona fide preservation purchase offer during that 12-month period of participation may seek approval of the Secretary to renew its participation for an additional 12-month period. A request for renewal under this paragraph shall be subject to the same provisions of subsection (c) applicable to a notice of election to participate in the program.
Timing
A request for renewal may be made, but shall not be required to be made, immediately upon the expiration of the selling owner’s initial 12-month period of participation in the program.
Approval
The Secretary may, at the discretion of the Secretary, approve or reject a renewal request under this subsection. A renewal request that is not accepted or rejected by the Secretary during the 30-day period beginning upon receipt of the request by the Secretary shall be considered for purposes of this section to have been accepted.
Terms
A selling owner who renews participation in the program shall be subject to the requirements and procedures for participation under this section for the initial term of participation.
Definitions
For purposes of this section, the following definitions shall apply:
Bona fide preservation purchase offer
The term bona fide
preservation purchase offer
means an offer to purchase a preservation
project that has been determined by the Secretary, pursuant to subsection
(d)(2) to meet the requirements under subsection (e).
Eligible jurisdiction
The term eligible jurisdiction
means
an area so designated by the Secretary for purposes of this section.
Preservation contract
The term
preservation contract
means any contract for sale or transfer of
a preservation project pursuant to the provisions of this section.
Preservation exchange program
The terms preservation exchange
program
and program
mean the preservation exchange
program authorized by, and established pursuant to, this section.
Preservation project
The term preservation project
means any
multifamily housing project that—
has been specifically identified to the Secretary by a selling owner as available for purchase or transfer under the preservation exchange program;
is located in an eligible jurisdiction;
is financed by a loan or mortgage that will mature or expire within 5 years of the election by the selling owner to participate in the preservation exchange program; and
is insured or assisted under—
the new construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside programs, or any other program providing project-based assistance, under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f);
the below-market interest rate program under paragraphs (3) and (5) of section 221(d)(3) of the National Housing Act (12 U.S.C. 1715(d));
section 236 of the National Housing Act (12 U.S.C. 1715z–1);
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q);
the rent supplement program under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s); or
any other Federal affordable housing program, as identified by the Secretary.
Preservation purchaser
The term
preservation purchaser
means any person or entity that acquires
a preservation project pursuant to an agreement to participate in the
preservation exchange program.
Secretary
The
term Secretary
means the Secretary of Housing and Urban
Development.
Selling owner
The term selling owner
means, with respect
to a preservation project, the person or entity that owns the project and that
has elected to participate in the preservation exchange program with respect to
such project.
Effect of participation
During the time that the owner is participating in the preservation exchange program with respect to a preservation project, such owner and such project shall not be subject to the requirements under section 107 of this Act.
Authorization of appropriations
There are authorized to be appropriated to the Secretary such sums as may be necessary to carry out this section, including amounts for the provision of additional educational services and training and technical assistance and to provide information to the public and to potential participants in the preservation exchange program to facilitate participation in the program, and for other activities to promote the preservation of affordable housing.
Regulations
The Secretary shall issue any regulations necessary to carry out this section.
Federal first right of refusal
Notice of termination of affordability restrictions
Notice of termination
Requirement
Except as provided in subparagraph (D), an owner of covered housing shall provide written notice under subparagraph (B) of any termination of the affordability restrictions affecting the covered housing, not later than one year, but no earlier than three years, before such termination to—
all tenants and the resident council, if any, of the covered housing;
the State housing agency or comparable State agency of the State in which the housing is located; and
the Secretary.
Contents
Written notice under this subparagraph with respect to covered housing shall include—
the address of the covered housing;
the name and address of the owner;
a statement identifying that an affordability restriction may terminate;
the date on which each affordability restriction may terminate; and
such other information as may be required by the Secretary.
Single notice covering multiple terminations
In any case in which more than one termination is scheduled to occur within a 12-month period, an owner may provide a single written notice covering all such terminations, but only if the notice is provided in accordance with subparagraph (A) at least one year before the earliest such termination and the notice otherwise complies with this paragraph.
Transition
Subparagraph (A) shall not apply with respect to covered housing subject to an affordability restriction that, as of the effective date under subsection (j), has less than two years of applicability remaining. Such covered housing shall be subject to paragraph (5).
Notice of intent to complete termination
An owner of covered housing shall not complete a termination or allow a termination to occur with respect to such housing unless, not later than one year before the completion of the last termination event affecting the covered housing, the owner provides the entities identified in paragraph (1) with written notice of intent to complete such termination. The notice shall include—
the address of the covered housing;
the name and address of the owner;
the date on which the owner intends to complete termination; and
such other information as may be required by the Secretary.
Opportunity for purchase by Secretary
Except as provided in subsection (d), an owner of covered housing shall not sell the covered housing at any time before—
providing notice, in writing, to the parties identified in paragraph (1) of the owner’s intention to sell the property; and
offering the Secretary the opportunity to purchase the property pursuant to subsection (b).
Delivery of notice
In general
Except as provided in subparagraph (B), any notice required by this subsection shall be deemed to have been provided when delivered in person or mailed by certified or registered mail, return receipt requested, to the party to whom notice is required.
Notice to tenant
With respect to any notice to tenants required by this subsection, any such notice shall be deemed to have been provided upon the when—
the notice is delivered in hand to the tenant or an adult member of the tenant’s household;
the notice is sent by first class mail; or
a copy is left in or under the door of the tenant’s dwelling unit.
Transition
Notwithstanding paragraph (1) of this subsection, an owner of covered housing who, on the effective date under subsection (j), has less than one year remaining before the date when the affordability restriction will cease to apply to such housing, shall not be required to give the one-year notice required by paragraph (1), but shall provide such notice within 90 days after the effective date under subsection (j). Notwithstanding paragraph (2) of this subsection, an owner who, on the effective date under subsection (j), has less than one year remaining before a termination shall not be required to give the one-year notice required by paragraph (2), but shall provide such notice within 90 days after such effective date.
Effect of offer, purchase, or sale
The notice requirements of this subsection shall not be affected by the status of an offer, purchase contract, or sale under subsection (b) or (c).
Right of Secretary to make offer
Opportunity for purchase by Secretary
An owner of covered housing shall offer the Secretary an opportunity to purchase the covered housing, in accordance with this subsection, before entering into any agreement to sell such housing to a third party. This paragraph may not be construed to establish any obligation on the part of an owner of covered housing to enter into an agreement to sell such housing to the Secretary.
Assignee of Secretary
Authority to select
The Secretary may select an assignee to act on behalf of the Secretary under this subsection as the purchaser of covered housing and shall give the owner written notice of any assignee selected.
Agreement
The Secretary shall enter into a written agreement with any assignee selected, which shall provide that the assignee, and any of its successors or assigns, agree to preserve the affordability of the covered housing. Upon entering into such an agreement, the assignee shall assume all rights and responsibilities of the Secretary as a prospective purchaser under this subsection and subsection (c).
Revocation
At any time before a sale of covered housing under this subsection or subsection (d), the Secretary may revoke the selection and designation of an assignee with respect to the covered housing pursuant to this paragraph and assume the rights and responsibilities in the Secretary’s own capacity or select a new assignee and enter into an agreement under subparagraph (B) with such assignee. No action under this subparagraph shall operate to extend or alter any time periods for performance under this section or in any purchase contract entered into pursuant to this section.
Purchase offer
Timing
During the 90-day period with respect to covered housing that begins upon receipt of notice pursuant to subsection (a)(3) of the owner’s intention to sell the covered housing, the Secretary may submit an offer to the owner to purchase the covered housing.
Failure to submit
Failure by the Secretary to submit an offer to purchase covered housing during the period under subparagraph (A) shall constitute an irrevocable waiver of the Secretary’s rights under this subsection and the owner may sell the covered housing subject to subsection (c).
Acceptance
If the owner accepts the initial or any revised offer of the Secretary, the owner and the Secretary shall enter into such other agreements as are necessary and appropriate to complete the purchase. If the owner and the Secretary have not entered into an agreement for the Secretary to purchase the property within 90 days after receipt of the notice pursuant to subsection (a)(3), the owner may enter into an agreement to sell the property to a purchaser of the owner’s choice, subject to subsection (c).
Availability of documents
Requirement
If the Secretary makes a request pursuant to this subparagraph to the owner of covered housing at any time after notice required under subsection (a)(1) has been provided, the owner shall, within 10 days after receiving the request, make the documents described in subparagraph (B) available to the Secretary for review and photocopying during normal business hours at the owner's principal place of business or at a commercial photocopying facility.
Covered documents
The documents described in this subparagraph with respect to covered housing shall include—
any existing architectural plans and specifications of the covered housing;
itemized lists of monthly operating expenses and capital expenditures for the covered housing in each of the two preceding calendar years;
any capital needs studies or market studies for the covered housing that have been submitted to a Federal, State, or local agency in the preceding three years;
utility consumption rates for the covered housing for preceding year;
the last two audited annual financial statements and physical inspection reports for the covered housing filed with Federal, State, or local agencies;
the most recent rent roll for the covered housing showing then-current vacancies and rent arrearages;
a statement of the approximate annualized vacancy rate for the covered housing for each of the two preceding calendar years; and
any other documents relating to the covered housing that the Secretary considers appropriate.
Protection of information
Documents obtained pursuant to a request under this paragraph shall not be considered public records, and the Secretary shall not make such documents available to the public without the written consent of the owner or pursuant to a court order, except that disclosure of such documents may be made to potential funding sources, regulatory agencies, or agents or consultants of the Secretary in connection with a purchase transaction pursuant to this subsection, subject to appropriate confidentiality agreements.
Inspections
In general
Subject to execution of an access and confidentiality agreement in accordance with subparagraph (B), upon request by the Secretary and with appropriate notice, the owner shall permit reasonable inspections of the dwelling units, building systems, common areas, and common grounds of the covered housing by agents, consultants, and representatives of the Secretary or the assignee of the Secretary, including inspections related to environmental, engineering, structural, or zoning matters.
Access and confidentiality agreement
An access and confidentiality agreement in accordance with this subparagraph is an agreement, entered into by the owner of covered housing and any agents, consultants, or representatives of the Secretary or the assignee of the Secretary, in a form approved by the Secretary, with respect to such matters as insurance to be carried by the inspectors of the covered housing, indemnities of the owner, restrictions on invasive testing, restoration requirements, the timing of such inspections, and the requirement to maintain confidentiality with respect to all matters discovered.
Notification to tenants
Not later than 30 days after the Secretary submits an offer to purchase the covered housing pursuant to subsection (c), the Secretary shall notify tenants in the housing development of its plans.
First right of refusal
Sale to third party
An owner of covered housing may execute a purchase contract with a third party to sell the covered housing pursuant to this subsection during the one-year period that begins upon the date on which notice for such housing was provided to the Secretary pursuant to subsection (a)(3). After such period expires, the owner may not sell the housing without providing notice of such sale in accordance with subsection (a)(3)(A).
Matching of third party offer by Secretary or other party
Notice of third party purchase contract
Upon execution of a third party purchase contract for covered housing, the owner shall, within 7 days, submit a copy of the contract to the Secretary, the resident council, if any, all tenants, and the State housing agency.
Purchase by Secretary and assignment of right to match offer
In the case of covered housing for which a third party purchase contract is executed, the Secretary may—
elect to purchase the housing under a contract under subparagraph (D); or
assign the right to match the third party offer for the covered housing under a contract under subparagraph (D).
Extension of time periods
The time periods set forth in this paragraph may be extended by agreement between the owner and the Secretary.
Terms of matching contract
The purchase contract between the owner and the Secretary or the Secretary’s assignee pursuant to this paragraph shall contain the same material terms and conditions as the executed third party purchase contract, except that the purchase contract between the owner and the assignee shall provide at least the following terms:
Amount of earnest money deposit
The amount of the earnest money deposit shall not exceed the lesser of—
the amount of the deposit provided under the third party purchase contract;
2 percent of the sale price; or
$250,000.
Escrow of earnest money deposit
The earnest money deposit shall be held under commercially reasonable terms by an escrow agent selected jointly by the owner and the Secretary or the assignee of the Secretary.
Refunding of earnest money deposit
The earnest money deposit shall be refundable for not less than 90 days from the date of execution of the purchase contract or such longer period as provided for in the third party purchase contract; except that if the owner unreasonably delays the buyer’s ability to conduct due diligence during the 90-day period, the earnest money deposit shall continue to be refundable for a period greater than 90 days.
Time for performance
The time for performance shall be no sooner than 240 days after the date of the execution of the purchase contract, or such later date provided for in the third party purchase contract.
Failure to execute purchase contract by Secretary or assignee
If the Secretary, or the assignee, fails to execute a proposed purchase contract during the 30-day period under paragraph (2)(B) (as such period may be extended pursuant to paragraph (2)(C)), the owner may, during the 2-year period beginning upon expiration of such 30-day (or extended) period, complete a sale of the owner’s covered housing to a third party, except as provided in paragraph (5). After the expiration of such 2-year period, the owner may not sell the housing without, after such expiration, complying with paragraph (3) of subsection (a) and with this subsection.
Failure to perform purchase contract by Secretary or assignee
If the Secretary, or the assignee, executes the proposed purchase contract as provided in paragraph (2) but fails to perform as provided in the executed purchase contract, the owner may, during the 2-year period beginning upon the date on which the executed purchase contract terminated, complete a sale of the owner’s covered housing to a third party. After the expiration of such 2-year period, the owner may not sell the housing without, after such expiration, complying with paragraph (3) of subsection (a) and with this subsection.
Counteroffer
Opportunity
After receipt of the third party purchase contract provided for in paragraph (2), the Secretary may, during the 30-day period under paragraph (2), make a counteroffer by executing and submitting to the owner an amended proposed purchase contract, or by assigning the right to make such a counteroffer to an assignee.
Assignment
If the Secretary assigns the right under subparagraph (A) to make a counteroffer, the assignee may, during the 15-day period that begins upon such assignment or the remaining period remaining in the 30-day period under paragraph (2), whichever is longer, make such a counteroffer.
Failure by Secretary to execute or assign
Failure by the Secretary to execute or assign the purchase contract or submit a counteroffer during the 30-day period under paragraph (2) shall constitute a waiver of the Secretary’s right to purchase under this subsection.
Period for owner response
If the Secretary or an assignee submits a counteroffer pursuant to this paragraph, the owner may, during the 30-day period beginning upon receipt of the amended proposed purchase contract, execute the amended proposed purchase contract or reject the counteroffer in writing.
Rejection by owner
If the owner rejects the counteroffer, the owner may, during the 2-year period beginning on the date of such rejection, complete a sale of the covered housing to a third party. If such sale is upon economic terms and conditions that are the same as, or materially more favorable to the proposed purchaser than, the economic terms and conditions in the proposed purchase contract offered by the Secretary or assignee in the Secretary’s or assignee’s counteroffer, the owner shall, within 7 days after such execution, provide a copy of the new third party purchase contract, along with a proposed purchase contract for execution by the Secretary or assignee, which shall contain the same terms and conditions as the executed third party purchase contract. The Secretary or assignee may, during the 30-day period beginning upon receipt of the third party purchase contract and the proposed purchase contract, execute the proposed purchase contract or such other agreement as is acceptable to the owner and the Secretary or assignee.
Provision of third party contract to Secretary
If any owner executes any purchase contract with a third party during any of the 2-year periods referred to paragraph (3), (4), or (5), the owner shall—
not later than 7 after such execution, provide the Secretary with a copy of the new or amended purchase contract executed with respect to the covered housing; and
not later than 7 days after the recording or filing of the deed or other document with the registry of deeds or the registry district of the land court of the county in which the affected covered housing is located, provide the Secretary with a copy of any such deed or other document transferring the owner’s interest in the covered housing.
Certification by owner
Any third party purchase contract, amended third party purchase contract, deed, or any other document transferring the owner’s interest in covered housing shall include a certification by the owner that the document is accurate and complete and that there are no other agreements between the owner and the third party buyer, or an affiliate of either, with respect to the sale of the covered housing.
Exemptions
Inapplicability of first right of refusal
Subsection (b) and (c) shall not apply to any of the following actions:
A government taking of covered housing by eminent domain or a negotiated purchase in lieu of eminent domain.
A forced sale of covered housing pursuant to a foreclosure.
A deed-in-lieu of foreclosure for covered housing.
A proposed sale of covered housing to a purchaser pursuant to terms and conditions that preserve affordability, as determined by the Secretary (including sales or transfers pursuant to section 106 of this Act).
A proposed sale of covered housing—
that the Secretary has determined was not, as of the effective date under subsection (j), receiving Federal assistance nor subject to regulation by any of the programs identified in subsection (g)(4), other than the program identified in subsection (g)(4)(A); and
under which the buyer has agreed, as provided in a regulatory agreement, to renew in whole, all contracts for project-based assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) or any successor program thereto; such renewal shall be subject to the availability, at the time of such renewal, of such assistance to the owner on economic terms and conditions that are comparable to the existing project-based rental assistance contract.
A proposed sale of covered housing to an affiliate of the owner that is not a termination, as determined by the Secretary.
A proposed sale of covered housing with respect to which the first scheduled termination will occur more than 15 years after the date of the sale.
A bona fide proposed sale pursuant to a purchase contract in effect on the effective date under subsection (j).
Requirement to submit request
The Secretary shall make a determination that an exemption under subparagraph (D), (E), or (F) of paragraph (1) applies only pursuant to a written request for such an exemption submitted by the owner of the covered housing. Such a request shall include the name and address of any resident council for the covered housing. The Secretary shall provide a copy of the Secretary’s determination under subparagraph (D), (E), or (F) of paragraph (1) to the owner and the resident council.
Regulatory agreement
A purchase of covered housing by the Secretary or an assignee of the Secretary pursuant to this section shall be subject to a regulatory agreement. Such a regulatory agreement shall not contain any terms or conditions that would preclude an owner or purchaser from participating in, or diminishing the benefits that an owner would otherwise receive by participating in the mark-to-market program of the Department under Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note).
Certificate of compliance
Issuance
An owner of covered housing who has complied with subsections (a), (b), and (c), which has not resulted in a purchase by the Secretary or the assignee of the Secretary of the covered housing, or which has resulted in a sale of the covered housing pursuant to subsection (c), may apply to the Secretary for a certificate of compliance by submitting a written request for the certificate, in such form and together with such documentation as the Secretary shall require. The Secretary shall issue the certificate of compliance within 30 days after receipt of the application if the Secretary determines that the owner has complied with said subsections (a), (b), and (c) and such certificate shall establish the owner’s compliance to the satisfaction of the Secretary.
Filing
An owner obtaining a certificate of compliance with respect to covered housing shall file the certificate with the registry of deeds or the registry district of the land court of the county in which the covered housing is located not later than one year after the date of issuance.
Provision to tenants
Upon request by any tenant of the affected covered housing, the owner shall provide a copy of the owner’s request for a certificate of compliance.
Relationship with other laws
This section shall not preempt any State or local law that has established a right of first refusal to preserve affordable housing that is on terms and conditions that are comparable to this section, establishes such a right after the effective date under subsection (j). Any covered housing located in a State or locality with such a right of first refusal shall not be subject to this section.
Definitions
For the purposes of this section, the following definitions shall apply:
Affiliate
The term affiliate
means an
entity owned or controlled by an owner or under common control with the
owner.
Affordability restriction
The term affordability restriction
means, with respect to covered housing, a limit on rents that an owner may
charge for occupancy of a rental unit in the housing or a limit on tenant
income for persons or families seeking to qualify for admission to such
housing.
Assignee
The
term assignee
means a State agency, local or regional housing
authority, nonprofit or for profit corporation, or other entity qualified to do
business in the affected State, that is selected by the Secretary to operate
covered housing that is decent, safe, and sanitary affordable housing in a
manner to be determined by the Secretary.
Covered housing
The term covered housing
means a housing
unit or development that receives Federal assistance under any of the following
programs or provisions:
The programs under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) for new construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside, and any other Federal program providing project-based rental assistance.
The Federal program for low-income housing tax credits under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42).
The program for rent supplement assistance under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s).
Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q).
The below-market interest rate program under paragraphs (3) and (5) of 221(d)(3) of the National Housing Act (12 U.S.C. 1715(d) (3) and (5)).
Section 221(d)(4) of the National Housing Act (12 U.S.C. 1715(d)(4)), to the extent the project’s rents are restricted pursuant to a government agreement.
A contract under section 236(f)(2) of the National Housing Act (12 U.S.C. 1715z–1(f)(2)).
Section 236 of the National Housing Act (12 U.S.C. 1715z–1) and any comparable State program providing for interest reduction payments or rental assistance payments.
Sections 514, 515, and 516 of the Housing Act of 1949 (42 U.S.C. 1484, 1485, and 1486).
Section 521 of the Housing Act of 1949 (42 U.S.C. 1490a).
The urban development action grant program under section 119 of the Housing and Community Development Act of 1974 (42 U.S.C. 5318), to the extent that the affordability of dwelling units subject to such program are restricted pursuant to a government agreement.
The rental development grant program under section 17(d) of the United States Housing Act of 1937 (42 U.S.C. 1437o), as in effect before October 1, 1989, to the extent that rents of a project assisted under such program are restricted pursuant to a government agreement.
Department
The term Department
means
the Department of Housing and Urban Development.
Low-income family
The term low-income family
has the meaning
given such term in section 3(b) of the Unites States Housing Act of 1937 (42
U.S.C. 1437a(b)).
Owner
The
term owner
means, with respect to covered housing, the person,
firm, partnership, corporation, trust, organization, limited liability company,
or other entity, or its successors or assigns, that holds title to the
housing.
Prepayment
The
term prepayment
means—
the payment in full, or the refinancing, of a federally insured or federally held mortgage loan indebtedness prior to the original maturity date,
the voluntary cancellation of mortgage insurance on covered housing, or
the payment in full of a government contract,
Purchase contract
The term purchase contract
means a
binding written agreement under which an owner agrees to sell covered housing
including, without limitation, a purchase and sale agreement, contract of sale,
purchase option, or other similar instrument.
Resident council
In general
The term
resident council
means, with respect to covered housing, any
incorporated nonprofit organization or association that—
is representative of the residents of the covered housing;
adopts written procedures providing for the election of officers on a regular basis; and
has a democratically elected governing board, elected by the residents of the covered housing.
Limitation
No owner of covered housing or other third party shall be required to ascertain an organization’s or association’s compliance with the requirements of subparagraph (A).
Sale
In general
The term
sale
means an act by which an owner conveys, transfers, or
disposes property by deed or otherwise, whether through a single transaction,
or a series of transactions, during a 2-year period.
Limitation
Such term does not include disposition of covered housing by an owner to an affiliate of such owner.
Secretary
The
term Secretary
means the Secretary of Housing and Urban
Development.
State housing agency
The term State housing agency
means the
department of housing or department of housing and community development of a
State, or any comparable State agency.
Tenant
The
term tenant
means, with respect to covered housing, a person
entitled to possession or occupancy of a rental unit within the covered
housing, including a subtenant, lessee, and sublessee.
Termination
The term termination
means,
with respect to covered housing, the date that—
the mortgage or loan for the housing matures and the affordability restrictions applicable to the housing because of assistance for the housing pursuant to a program referred to in paragraph (4) terminate with respect to the housing;
an assistance contract under a program referred to in paragraph (4) for the housing that is not renewed, terminates, or expires;
in the case of housing that is not eligible low-income housing, as such term is defined in section 229 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4119), the mortgage or loan that covers the housing is prepaid or an insurance contract that covers the housing terminates; or
use restrictions imposed with respect to the housing pursuant to the Emergency Low Income Housing Preservation Act of 1987 expire.
Regulations
The Secretary shall issue regulations to carry out this section not later than the effective date under subsection (j). This subsection shall take effect upon the date of the enactment of this Act.
Effective date
Except as otherwise specifically provided in this section, this section shall take upon the expiration of the 180-day period beginning on the date of the enactment of this Act.
Amendment to Low-Income Housing Preservation and Resident Homeownership Act of 1990
Section 232 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4122) is amended—
in subsection (a),
by striking No State
and inserting Except as provided in
subsection (c), no State
; and
by adding at the end the following new subsection:
Inapplicability to housing for which no plan of action is executed
Preemption under subsection (a) shall not apply to eligible low-income housing for which an owner has not executed a plan of action for incentives under this subtitle.
Clarification of congressional intent regarding Federal preemption
State and local laws intended to further the preservation of affordable housing or to protect tenants when owners propose to terminate their participation in Federal affordable housing programs are not preempted by Federal law, except as expressly required by the terms of any applicable Federal statute.
.
Preservation of HUD-held and HUD-owned buildings
Use of all available enforcement and intervention tools
To maximize the preservation of existing housing assisted by the Department of Housing and Urban Development, the Secretary of Housing and Urban Development shall utilize all available enforcement and intervention tools to stabilize properties in distress, including acting as mortgagee-in-possession, accepting deeds in lieu of foreclosure from owners, and exercising rights under applicable program contacts and regulations.
Management and disposition authority
Subsection (a) of 204 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 (12 U.S.C. 1715z–11a(a)) is amended—
by striking
During
and all that follows through and thereafter, the
provision of
and inserting In managing and disposing of
multifamily properties that are owned by the Secretary or that have mortgages
held by the Secretary, during any fiscal year, the Secretary may
provide
;
by striking
and multifamily mortgages held by the Secretary
; and
by striking
notwithstanding any other provision
and inserting
consistent with other applicable provisions
.
Authority for HUD to assign flexible subsidy loans
The Secretary of Housing and Urban Development may, in connection with a preservation transaction or transfer of an assisted project to an owner that commits to long-term use and affordability restrictions with respect to the property to forgive or assign to the transferee any debt held by the Secretary that was created pursuant to section 201 of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a), if required for the financial viability of the preservation transaction or the transfer. If any low-income housing tax credits under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42), State or local funds, tax-exempt housing bonds, or other affordable housing resources are being utilized by the purchaser in connection with the transfer of the property, the Secretary shall not require any repayment in connection with the assignment or forgiveness of the mortgages to the purchaser.
Use of existing section 8 funds to preserve and revitalize affordable housing
Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) is amended by adding at the end the following:
Affordable housing preservation and revitalization program
In general
The Secretary of Housing and Urban Development shall ensure that funds in the residual receipts account of an eligible multifamily housing property are, at the time of a qualified sale or pursuant to an approved rehabilitation plan approved by the Secretary or the section 8 contract administrator, transferred or released, in conjunction with an approved rehabilitation plan, to the acquiring owner.
Use of residual receipt funds by purchaser
An owner that acquires an assisted multifamily housing property through a qualified sale shall, subject to the approval of the Secretary, use the funds in the residual receipts account transferred to it, or for its benefit—
to pay for rehabilitation costs;
to deposit funds into the replacement reserve account of the property;
to pay for social and other services that directly benefit the tenants of such property;
to pay for costs associated with the acquisition of the property; and
to pay for any other costs, as determined eligible by the Secretary.
Use of residual receipts by owners to preserve and renew affordable housing
Subject to approval and any requirements established by the Secretary, an owner of an eligible multifamily housing property may use funds in the residual receipts account for the property to—
reduce operating or cash flow deficits when such use would prevent an increase in rental rates for tenants;
make a mortgage payment when a mortgage default is actual or imminent;
pay for rehabilitation costs, which may include—
making repairs to the property not otherwise covered by a reserve for replacements or other similar fund;
providing additional project amenities and improvements, such as air conditioning, a sprinkler system, fire or smoke detectors, energy saving devices or improvements, office equipment, and computers and associated software; and
making enhancements to the property or retrofit units to enhance accessibility;
pay accrued, allowable distributions in cases in which insufficient surplus cash is available;
repay residual receipt notes approved by the Secretary;
repay flexible subsidy operating assistance or capital improvements loans provided under section 201 of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a);
provide for testing or abatement of lead-based paint at the property;
provide for social and other services that directly benefit the tenants of such property; and
pay for any costs or purposes, as determined eligible by the Secretary.
Delegation of authority to section 8 contract administrator or other entity
At the request of a section 8 contract administrator or other appropriate entity, as determined by the Secretary, that administers assistance referred to in paragraph (5)(A)(i) with respect to an eligible multifamily housing property, the Secretary may delegate to such agency the authority of the Secretary under paragraph (2) or (3), or both, to approve the use of funds in residual receipt accounts for properties so assisted by such agency as provided in such paragraph or paragraphs.
Definitions
For purposes of this subsection, the following definitions shall apply:
Eligible multifamily housing property
The term eligible multifamily
housing property
means a property that—
is assisted under any program providing project-based assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f); and
is subject to regulations of the Secretary in effect on the date of enactment of this subsection that require remittance of excess funds to the Secretary upon termination of the project-based assistance contract.
Qualified sale
In general
The term qualified sale means the sale or other transfer of an eligible multifamily housing property to an owner who agrees to maintain affordability and use restrictions regarding the property that are—
for a term of not less than 30 years from the time of the qualified sale; and
legally enforceable.
Future applicability of restrictions
The restrictions under subparagraph (A) shall be—
binding on all successors and assigns of the qualified preservation owner; and
recorded as a restrictive covenant on the property pursuant to State law.
Residual receipts
The term residual receipts means—
funds generated by a property in excess of the amount needed for operating expenses, operating reserve requirements, and allowable distributions to project owners; and
includes any other funds that the Secretary, in his or her discretion, designates as residual receipts.
Residual receipts not treated as Federal funds
For the purposes of section 42 of the Internal Revenue Code of 1986, residual receipts used or transferred under this section shall not be considered Federal funds.
.
Authority for Ginnie Mae to securitize FHA risk-sharing mortgages
Authority
Section 542 of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z–22) is amended—
in subsection (b), by striking paragraph (8) and inserting the following new paragraph:
Ginnie Mae securitization
The Government National Mortgage Association may securitize any multifamily loan insured or reinsured under this subsection under the same terms and conditions as if the loan were insured under the National Housing Act.
; and
in subsection (c), by striking paragraph (6) and inserting the following new paragraph:
Ginnie Mae securitization
The Government National Mortgage Association may securitize any multifamily loan insured under this subsection under the same terms and conditions as if the loan were insured under the National Housing Act.
.
Limitation
Section 542 of the Housing and Community Development Act of 1992 is amended by adding at the end the following new subsection:
Limitation
In carrying out subsections (b)(8) and (c)(6), the Secretary shall prohibit State housing finance agencies from giving preference to, or conditioning the approval of, awards of subordinate debt funds, allocation of tax credits, or tax exempt bonds based on the use of financing for the first mortgage that is provided by such State housing finance agency.
.
Conforming amendment
Clause (ii) of the
first sentence of section 306(g)(1) of the National Housing Act (12 U.S.C.
1721(g)(1)) is amended by inserting before the period at the end the following:
; or insured or reinsured under subsection (b) or (c) of section 542 of
the Housing and Community Development Act of 1992, subject to the terms of
paragraph (8) or (6), respectively, of such subsection
.
Restoration of Housing at Risk of Loss Due to Deterioration
Authority to transfer rental assistance to other properties
Authority
Subject to subsection (b) and notwithstanding any other provision of law, the Secretary of Housing and Urban Development may authorize the transfer of some or all of project-based assistance, debt, interest reduction payments, and statutorily required low-income and very low-income use restrictions, associated with one or more covered multifamily housing properties to another covered multifamily housing property or properties located in the same metropolitan area.
Phased transfers
Transfers of project-based assistance under this section may be done in phases to accommodate the financing and other requirements related to improving or constructing the property or properties to which the assistance is transferred to ensure that such property or properties meet the standards under subsection (c).
Conditions
A transfer authorized in subsection (a) shall be subject to the following conditions:
Total number of low-income units
The number of low-income and very low-income dwelling units provided by the transferring property or properties shall remain the same as the number of such dwelling units in the receiving property or properties. Upon transfer of subsidy, vacant, nonviable, or obsolete units may be replaced with units that meet the demands of the local waiting list for assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) or current market demand, but only if there is no impact on assisted residents of such units.
Net amount of assistance
The net dollar amount of Federal assistance provided to the transferring property or properties shall remain the same as the net dollar amount of Federal assistance provided to the receiving property or properties, unless an increase in Federal assistance is necessary to secure project financing, to allow rent increases permitted under the Multifamily Affordable Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), to accommodate allowable reconfigurations of the units and bedrooms, or to allow standard contract extensions, or simultaneous termination of current contracts with extensions of new contract authority, similar to that extended to comparable properties, as determined by the Secretary.
Condition of transferring property
The transferring property shall, as determined by the Secretary, be physically obsolete or economically non-viable.
Condition of receiving property
The receiving property shall meet or exceed applicable physical standards established by the Secretary within a reasonable period of time, as determined by the Secretary.
Tenant protection
Notification and consultation
The owner or mortgagor of the transferring property shall notify and consult with the tenants of the transferring property concerning all significant elements of the transfer plan, including the identification of receiving properties and any proposed additional ownership entities.
Best interest of tenants; fair housing
The transfer shall, as determined by the Secretary—
be in the best interest of the tenants; and
comply with applicable statutes and regulations relating to fair housing.
Availability of new units
The tenants of the transferring property shall not be required to vacate their dwelling units in the transferring property until new units in the receiving property or properties are available for occupancy, including a phase or phases of a multi-phase project or projects that are available for occupancy. Tenants may choose to be temporarily relocated to facilitate their transition to the receiving property according to relocation procedures set forth in the Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (42 U.S.C. 4601 et seq.).
Mortgages under National Housing Act
Any lien on the receiving property resulting from additional financing obtained by the owner shall be subordinate to any lien under a mortgage insured under the National Housing Act that is transferred to, or placed on, such property by the Secretary, except that the Secretary may waive this requirement upon determination that such waiver is necessary to facilitate the financing of acquisition, construction, or rehabilitation of the receiving property.
Housing subject to a use agreement
The owner or mortgagor of the receiving property shall execute and record a continuation of the existing use agreement or a new use agreement for the property containing use restrictions having a duration at least as long as the existing restrictions.
No increase of risk to insurance funds
The transfer under this section shall result in no increase in financial risk to the General and Special Risk Insurance Funds of the Secretary, as determined by the Secretary, except that the Secretary may waive this requirement upon determination that such waiver is necessary to facilitate the financing of acquisition, construction, or rehabilitation of the receiving property.
No increase of Federal liability
Federal liability with regard to the receiving property shall not be increased, as determined by the Secretary, except as provided in paragraph (2).
Definitions
For purposes of this section, the following definitions shall apply:
Covered multifamily housing property
The term covered multifamily
housing property
means housing that is assisted or insured under one or
more of the following programs:
The rent supplement program under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s).
The below-market interest rate mortgage insurance program under section 221(d)(3) of the National Housing Act (12 U.S.C. 17151(d)(3)).
The program for assistance provided under the proviso in section 221(d)(5) of the National Housing Act (12 U.S.C. 17151(d)(5)).
A contract under section 236(f)(2) of the National Housing Act (12 U.S.C. 1715z–1(f)(2)).
The program for interest reduction payments under section 236 of the National Housing Act (12 U.S.C. 1715z–1) or a comparable State program providing for interest reduction payments.
Any other mortgage insurance program provided under the National Housing Act for which the insured property is subject to budget-based rent restrictions.
The program for supportive housing for the elderly under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), including assistance under such section as was in effect before the enactment of the Cranston-Gonzales National Affordable Housing Act.
The program for rural rental housing under section 515 of the Housing Act of 1949 (42 U.S.C. 1485).
Any program providing project-based assistance that is attached to the structure.
Any other program under which the Secretary provides any rental assistance, mortgage insurance, subsidy, or other financial assistance.
Low-income; very low-income
The terms
low-income
and very low-income
, with respect to a
covered multifamily housing property, shall have the meanings provided under
the laws and regulations governing the program under which the covered
multifamily housing property is insured or assisted.
Project-based assistance
The term project-based assistance
means—
assistance provided under section 8(b) of the United States Housing Act of 1937 (42 U.S.C. 1437f(b)), including the additional assistance program;
assistance for housing constructed or substantially rehabilitated pursuant to assistance provided under section 8(b)(2) of such Act (as such section was in effect immediately before October 1, 1983);
rent supplement payments under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s);
additional assistance payments under section 236(f)(2) of the National Housing Act (12 U.S.C. 1715z–1(f)(2)) or a comparable State program providing for interest reduction payments;
payments made under section 202(c)(2) of the Housing Act of 1959 (12 U.S.C. 1701q(c)(2)); and
payments made under any other Federal program under which rental assistance is attached to the structure.
Receiving property
The term receiving property
means, with
respect to a transfer of project-based assistance, debt, and statutorily
required low-income and very low-income use restrictions under this section,
the covered multifamily housing property or properties to which the assistance,
debt, and use restrictions are to be transferred.
Secretary
The
term Secretary
means the Secretary of Housing and Urban
Development.
Transferring property
The term transferring property
means,
with respect to a transfer of project-based assistance, debt, and statutorily
required low-income and very low-income use restrictions under this section,
the covered multifamily housing property or properties from which the
assistance, debt, and use restrictions are to be transferred.
Building transfers: requirements for purchasers of FHA insured projects and section 8 projects
Requirements for potential purchasers
Not later than 90 days after the date of the enactment of this Act, the Secretary of Housing and Urban Development shall issue a proposed rulemaking, in accordance with title 5, United States Code, that applies the participation and certification requirements for potential purchasers required under section 219 of Division G of the Consolidated Appropriations Act, 2004 (Public Law 108–199; 118 Stat. 397) to the sale or transfer of any multifamily housing having a mortgage that is insured or receives assistance under the National Housing Act or for which project-based assistance is provided under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).
Notice to local government and residents of application for transfer
The Secretary shall provide notice of an owner’s application for approval of any such transfer to the unit of local government where the property is located, and to the residents of the property, using procedures required under the Housing and Community Development Amendments of 1978.
Grounds for disapproval
Grounds for disapproval of a transfer may include—
a purchaser’s record of pervasive or continuing noncompliance under housing, health, and safety codes with respect to other housing owned or managed by the purchaser, regardless of location, except where the Secretary determines that such noncompliance did not result from the actions of the purchaser and would be satisfactorily remedied by a plan approved by the Secretary; and
a risk of financial instability for the project under the terms of the acquisition, such as indicated by the application of conventional underwriting standards.
Use of interest reduction payments for rehabilitation grants
The Secretary of Housing and Urban Development may obligate any amounts recaptured from the termination of a contract for interest reduction payments under section 236 of the National Housing Act (12 U.S.C. 1715z–1), for the use under subsection (s) of such section, except that the Secretary shall take immediate action to issue appropriate guidelines to make such funds available within 180 days after the date of the enactment of this Act, which shall include the availability of both loans and grants.
Clarification of budget-based rent increases for rehabilitated projects
Approval of rent increases
Approval
At the request of an owner of a covered multifamily housing property (which term, for purposes of this section, shall have the same meaning given such term in section 201(c) of this Act) that meets the requirements of paragraph (2), the Secretary of Housing and Urban Development shall, prior to rehabilitation and subject to subsection (b), adjust project rents on a budget-based basis to support the cost of the rehabilitation, any increased debt service, and other appropriate costs.
Requirements
The requirements of this paragraph with respect to a covered multifamily housing property are that—
the project is to undergo rehabilitation; and
the owner or purchaser of the project executes a binding agreement to preserve the project as affordable housing at least until the later of the maturity date of the original mortgage for the project or the termination of an assistance contract on the property.
Conditions
Rent adjustments pursuant to this section for a covered multifamily housing property shall be subject to the following conditions and requirements:
Effectiveness
Such rent adjustments shall not become effective until completion of the rehabilitation of the property.
Amount
Such rent adjustments shall—
be subject to adjustment by the Secretary based on differences between estimated and actual costs; and
with respect to units that are assisted under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437) that are subject to a renewal contract under section 524(a) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), not exceed, after rehabilitation, the rent for comparable unassisted units in the area.
Tenant notice and opportunity to comment
Tenants in the property shall be provided notice and an opportunity to comment on such rent adjustments in accordance with rent increase procedures of the Department of Housing and Urban Development issued pursuant to the authority under section 202(b) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1b(b)).
Provision of rental assistance
Rental assistance shall be provided for all affected eligible tenants of the property in the form of new project-based assistance for previously unassisted units and legally authorized contract rent increases under existing project-based contracts.
Effect on other transactions
This section shall not have any effect on transactions not meeting the terms and conditions of this section.
Interest reduction payments for section 236 projects experiencing a reduction of units
In general
Section 236(e)(2) of the National Housing Act (12 U.S.C. 1715z–1(e)(2)) is amended—
by striking
under the terms
and inserting for the remaining
term
; and
by adding at the
end the following new sentence: The Secretary may continue to provide
the interest reduction payments in their entirely, notwithstanding a reduction
of total units, if the project owner is able to demonstrate that such an action
will contribute to the long-term physical or financial viability of the
property.
.
Applicability
The amendments made by subsection (a) shall apply to all interest reduction payments made after October 1, 2006.
Protection of Residents
Tenant protection voucher to replace lost subsidized units on 1-for-1 basis
Subject only to the availability of amounts provided for such purpose in appropriation Acts, the Secretary of Housing and Urban Development shall provide replacement vouchers for rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) for all dwelling units in projects that cease to be covered multifamily housing properties (as such term is defined in section 201 of this Act) due to demolition, disposition, or conversion.
Maintenance of housing
Section 8(d) of the United States Housing Act of 1937 (42 U.S.C. 1437f(d)) is amended by adding at the end the following new paragraphs:
Enforcement of housing standards related to physical condition of property
If the Secretary determines, upon any inspection or management review for any multifamily housing project covered by a housing assistance payments contract under this section, that there are serious violations of housing standards applicable to such project that are not corrected after reasonable notice, or any other substantial or repeated violations of other program requirements, including residents right to organize, the Secretary may take one or more of the following actions:
Withhold all or part of the housing assistance payments due under the contract.
Withhold any rent increases otherwise due.
Assume possession and management of the project and take any actions necessary to correct the violations, including using such withheld payments to effectuate repairs or to reimburse others who make repairs.
Use such withheld payments to pay for utilities and other services that are the responsibility of the owner under the lease or applicable law.
Escrow of tenant rents
If the Secretary determines that there are serious violations of housing standards applicable to any multifamily housing project covered by a housing assistance payments contract under this section or any other substantial or repeated violations of other program requirements, any tenants in assisted units in the project may withhold the tenant contribution toward rent and pay such amount, when due, into an escrow fund, or use such withheld payments to effectuate repairs, in accordance with procedures established by the Secretary. If a tenant withholds the tenant contribution toward rent in accordance with this paragraph, the Secretary shall withhold all or part of the housing assistance payments due under the contract until the violation is remedied. An owner of a project shall not evict tenants for nonpayment of rent for exercising rights under this paragraph.
Protection of tenants
An owner of a multifamily housing project covered by a housing assistance payments contract under this subsection may not terminate the tenancy of any tenant because of the withholding or abatement of assistance pursuant to this subsection. During the period that assistance is abated pursuant to this subsection, the tenant may terminate the tenancy by notifying the owner.
Inspections upon request or petition
In addition to periodic inspections by the Secretary, the Secretary shall conduct an inspection or management review of any multifamily housing project covered by a housing assistance payments contract under this section when requested by the local government in which the project is located or by a petition signed by not less than 25 percent of the tenants of the occupied units in the project.
.
Resident enforcement of public housing agency or project owner agreements with HUD
In general
In each covered agreement described in subsection (c), any resident, or resident or tenant association, of an affected project shall be permitted to petition the Secretary of Housing and Urban Development requesting enforcement of alleged violations of the covered agreement.
Judicial relief
If the Secretary, or the designee of the Secretary, fails to issue a determination regarding an enforcement request within 90 days after receipt of the petition, the resident, or resident or tenant association, may seek appropriate judicial relief in connection with the alleged violation and enforcement of a covered agreement in any forum of competent jurisdiction. In the case of any alleged violation that threaten the health or safety of tenants, the time period for making such a determination shall be no longer than 15 days.
Covered agreements
A covered agreement described in this subsection is any—
contract between the Secretary and any public housing agency for housing assistance payments under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f);
agreement under the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) for—
Mark-to-Market Restructuring Commitments or renewal of section 8 rental assistance for a project involving any action under section 517(b) of such Act; or
Rehabilitation Escrow Deposit Agreements for Mark-to-Market; or
contract for mortgage insurance executed by the Secretary and any owner or purchaser of a multifamily housing project.
Regulations
Within 180 days after the date of the enactment of this Act, the Secretary shall issue regulations providing procedures for—
receiving tenant petitions to enforce the terms of a covered agreement;
evaluating alleged violations of a covered agreement; and
providing notice to residents, and resident and tenant associations.
Resident access to building information
Access to information
Upon a written request by a legitimate residents association established with respect to a multifamily housing property to which part 245 of the regulations of the Secretary of Housing and Urban Development (24 C.F.R. Part 245), by or through its duly appointed designee or representative, the Secretary shall make available, for the property represented by the association—
information identifying the legal entities that own and manage the property, including identification of general partners and other principals, and their other properties assisted by the Department of Housing and Urban Development, including previous participation certifications (with Social Security numbers redacted);
an annual operating statement of profit and loss, and project budgets submitted to the Department of Housing and Urban Development;
subsidy contracts and regulatory agreements, use agreements. or other contracts referred to in section 303(c) of this Act between owners and the Department of Housing and Urban Development, including correspondence between owners and the Department;
management reviews, capital needs assessments, and physical inspection reports conducted of entities identified in paragraph (1) by the Department or a contractor of the Department; and
an annual statement, prepared by the Department’s contract administrator for the subject property, of the balances of, and expenditures from, any replacement reserves and other escrow funds for the property.
Protection of personal information
Subsection (a) shall not be construed to require disclosure of Social Security numbers, personal tax returns, or any other personal financial information of or concerning individuals who have an interest in the ownership or management entities referred to in subsection (a).
Preservation of troubled projects facing foreclosure
Maintaining affordability through escrowing of rental assistance
In the case of any transfer of a distressed multifamily property that does not comply with housing quality standards applicable to the property, the Secretary of Housing and Urban Development may not recapture any rental assistance that is attached to any dwelling units in the property and provided under a contract for the property under section 8 of the United States Housing Act of 1937 or under any other program administered by the Secretary, but shall hold any such assistance in escrow for the property during the period of noncompliance and, upon determining that the property complies with such standards make such assistance available for the property.
Multifamily housing mortgage foreclosure
The Multifamily Mortgage Foreclosure Act of 1981 is amended—
in section 362 (12 U.S.C. 3701)—
in paragraph (5),
by striking and
at the end;
in paragraph (6),
by striking the period at the end and inserting ; and
;
and
by adding at the end the following new paragraph:
mortgages transferred by the Secretary to State and local governments should be foreclosed in the same manner as mortgages held by the Secretary.
;
in section 363 (12 U.S.C. 3702)—
in paragraph (9),
by striking and
at the end;
in paragraph (10),
by striking the period at the end and inserting ; and
;
and
by adding at the end the following new paragraph:
State or
local government transferee
means any State or unit of general local
government, any public housing authority, or any State or local housing finance
agency that has acquired mortgages pursuant to section 203 of the Housing and
Community Development Amendments of 1978 (12 U.S.C. 1701z–11), section 204 of
the Departments of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1997 (12 U.S.C. 1715z–11a), or any
other provision of law, that were previously held by the
Secretary.
;
in section 364 (12 U.S.C. 3703)—
by inserting
, or any State or local government transferee,
after
Secretary
the first and fourth places such term appears;
and
by inserting
, or the State or local government transferee,
after
Secretary
the second, third, and fifth places such term
appears;
in section 365 (12 U.S.C. 3704)—
by inserting
, or any State or local government transferee,
after
Secretary
the first place such term appears;
by inserting
, or the State or local government transferee,
after
Secretary
each other place such term appears; and
by striking the
last 3 sentences and inserting the following: The entity designating the
foreclosure commissioner, whether the Secretary or any State or local
government transferee, shall be a guarantor of payment of any judgment against
the foreclosure commissioner for damages based upon the commissioner’s failure
properly to perform the commissioner’s duties. As between the entity
designating the foreclosure commissioner, whether the Secretary or any State or
local government transferee, and the mortgagor, the entity designating the
foreclosure commissioner shall bear the risk of any financial default by the
foreclosure commissioner. In the event that the Secretary or any State or local
government transferee makes any payment pursuant to the preceding two
sentences, the Secretary or any State or local government transferee shall be
fully subrogated to the rights satisfied by such payment.
;
in section 366 (12 U.S.C. 3705)—
by inserting
, or any State or local government transferee,
after
Secretary
the first, third, fourth, and fifth place such term
appears; and
by inserting
, or the State or local government transferee,
after
Secretary
the second and sixth places such term appears;
in section 367 (12 U.S.C. 3706)—
in subsection (a)—
in
paragraph (1), by inserting or the State or local government
transferee,
after Secretary,
; and
in
paragraph (8), by inserting , or the State or local government
transferee
after Secretary
;
in subsection (b)—
by
inserting , or any State or local government transferee,
after
Secretary
the first and second places such term appears;
and
by
inserting , or the State or local government transferee,
after
Secretary
the third place such term appears; and
by adding at the end the following new subsection:
In any case in which a State or local government transferee is the purchaser of a multifamily project, the State or local government transferee shall manage and dispose of such project to benefit those originally intended to be assisted under the prior program unless continued operation and disposition of the property under such program is not feasible based on consideration of the costs of rehabilitating and operating the property after considering all available Federal, State, and local resources, including rent adjustments under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note).
.
in section 368 (12 U.S.C. 3707)—
by inserting
, or any State or local government transferee,
after
Secretary
the first and third places such term appears;
and
by inserting
, or the State of local government transferee,
after
Secretary
the second place such term appears;
in section 369A (12 U.S.C. 3709)—
by inserting , or any State or local
government transferee,
after Secretary
the second place
such term appears; and
by inserting `, or the State or local government transferee,' after `Secretary' the first, third, and fourth places such term appears;
in section 369B (12 U.S.C. 3710)—
by inserting
, or the State of local government transferee,
after
Secretary
the first and second places such term appears;
and
by inserting
, or any State or local government transferee,
after
Secretary
each other place such term appears;
in section 369E
(12 U.S.C. 3713), by inserting , or any State or local government
transferee,
after Secretary
each place such term
appears; and
in section
369F(a)(1) (12 U.S.C. 3714(a)(1)), by inserting , or any State or local
government transferee,
before the semicolon at the end.
Building acquisition: valuation of physically distressed properties sold by HUD
In general
Notwithstanding title II of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z–11 note) or any other provision of law, in determining the market value of any multifamily real property or multifamily loan for any noncompetitive sale to a State or local government, the Secretary of Housing and Urban Development shall consider, but not be limited to, industry standard appraisal practices, including the cost of repairs needed to bring the property into such condition as to satisfy minimum State and local code standards and the cost of maintaining the affordability requirements imposed by the Secretary on the multifamily real property or multifamily loan.
Definitions
For purposes of this section, the terms
affordability requirements
, multifamily loan
, and
multifamily real property
have the same meaning given such terms
in section 2001 of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z–11
note).
Investment through up-front grants from General Insurance Fund
1978 Act
Paragraph (4) of section 203(f) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1701z–11(f)(4)) is amended by striking the last sentence.
Clarification of authorized assistance
In implementing the provisions amended by subsection (b) of this section, the Secretary of Housing and Urban Development may utilize both up-front grants and project-based rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) as necessary to preserve the affordability of a multifamily housing project to low- and very low-income families.
Maintaining project-based assistance for projects disposed of by HUD
In general
In managing and disposing of any multifamily property that is owned by, or has a mortgage held by, the Secretary of Housing and Urban Development, the Secretary shall maintain any contracts for rental assistance payments under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) and other programs that are attached to any dwelling units in the property.
Infeasibility of continued assistance
To the extent the Secretary determines, in consultation with the tenants and the local government, that such a multifamily property owned or held by the Secretary is not feasible for continued rental assistance payments under such section 8 or other programs, based on consideration of (1) the costs of rehabilitating and operating the property and all available Federal, State, and local resources, including rent adjustments under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), and environmental conditions that cannot be remedied in a cost-effective fashion, the Secretary may, in consultation with the tenants of such property, contract for project-based rental assistance payments with an owner or owners of other existing housing properties, or provide other rental assistance.
Foreclosure
For all properties with project-based section 8 assistance, regardless of the type of underlying financing, the Secretary shall also take appropriate actions to ensure that project-based contracts remain in effect prior to foreclosure, subject to the exercise of contractual remedies to assist relocation of tenants for imminent major threats to health and safety, after written notice to and informed consent of the affected tenants and use of other available remedies, such as partial abatements or receivership.
Applicability of MAHRA
After disposition of any multifamily property described under this section, the contract and allowable rent levels on such properties shall be subject to section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note).
Correcting harm caused by late subsidy payments
Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsection: ”.
Late payments
In general
The Secretary shall make payments of project-based rental assistance provided under this section for each month on or before the due date under paragraph (2) for the payment.
Due date
The due date under this paragraph for a monthly payment is the first business day of the month.
Notification of late payment
The Secretary shall notify a project owner at least 10 days before the due date for a housing assistance payment if such payment will be late and shall inform the project owner of the approximate date the payment will be made.
Use of reserves
If a housing assistance payment for a project has not been received before the expiration of the 10-day period beginning upon the due date for such payment, the project owner shall, after the expiration of such period, be entitled to obtain funds from a project replacement reserve, residual receipts reserve, or other project reserve in order to pay operating and debt service costs for the project. Upon receipt of the monthly housing assistance payment from the Secretary, the project owner shall promptly replace or replenish any such funds advanced pursuant to the preceding sentence.
Interest payment
If a monthly housing assistance payment is not made before the expiration of the 30-day period beginning upon the due date for such payment, the Secretary shall pay to the owner simple interest on the amount of such monthly payment, from the due date until the date of payment, at a rate determined by the Secretary of Treasury in accordance with section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611). Interest payments under this paragraph shall be made from amounts made available for management and administration of the Department of Housing and Urban Development.
.
Incentives under MAHRA for owners to maintain housing affordability
Extension of mark-to-market program
Section
579 of the Multifamily Assisted Housing Reform and Affordability Act of 1997
(42 U.S.C. 1437f note) is amended by striking October 1, 2011
each place such term appears and inserting October 1, 2015
.
Maintaining affordability in preservation project transactions
Renewal under alternative authorities
Paragraph (1) of section 524(e) of the
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C.
1437f note) is amended by adding at the end the following new sentences:
At the request of the owner of the project, in order to facilitate a
rehabilitation plan approved by the Secretary as being necessary to ensure the
sustainability of a project, a contract eligible for renewal pursuant to this
paragraph may instead be renewed pursuant to any provision of subsection (a) or
(b) of this section if the contract is otherwise eligible for renewal pursuant
to such provision. In the case of a renewal pursuant to subsection (a) or (b),
the rent and rent adjustment standards applicable to a renewal pursuant to
those subsections shall apply, but tenant occupancy and affordability
restrictions in the plan of action shall continue to apply to the project for
the duration of those restrictions.
.
Extension of affordability period for ELIHPA projects
Section 524(e) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new paragraph:
Hybrid contract
To facilitate the sale, transfer, or rehabilitation of a project that is subject to a plan of action under the Emergency Low Income Housing Preservation Act of 1987 (12 U.S.C. 1715l note) to an owner who agrees to binding low-income affordability restrictions for at least 30 years beyond the term of the plan of action and a rehabilitation plan approved by the Secretary as being necessary to ensure the sustainability of the project, a contract for such a project shall, at the request of the owner of the project, be renewed under this paragraph for a term of not less than 30 years. The contract shall provide that the terms of the plan of action shall apply for the duration of the original plan of action, and that at the expiration of the plan of action the rents shall be established at rent levels equal to comparable market rents for the market area. After expiration of the plan of action, rent adjustments shall be determined in accordance with the provisions of subsection (c) that are applicable to contracts renewed pursuant to subsection (a). Any existing contract entered into pursuant to paragraph (1) shall be terminated at the request of the owner of the project, and replaced by a contract under this paragraph.
.
Encouraging continued participation in assisted housing programs
Elimination of discriminatory renewal terms
Paragraph (3) of section 524(b) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended—
in the matter
preceding subparagraph (A), by striking the lesser of
and
inserting as follows
; and
by striking subparagraphs (A), (B), and (C) and inserting the following:
Previously renewed projects
In the case of a project with a contract previously renewed under this paragraph, for the first renewal occurring after the date of the enactment of the Housing Preservation and Tenant Protection Act of 2010, at a rent level determined in accordance paragraph (1)(B) of this subsection.
Projects not previously renewed
In the case of a project with a contract not previously renewed under this paragraph, at a rent level determined in accordance with paragraph (1) of this subsection.
.
Subsequent renewals and rent adjustments
Paragraph (1) of section 524(c) of the
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C.
1437f note) is amended in the first sentence by striking (b)(1)
and inserting (b)(1), (b)(3)
.
Prepayment of FHA mortgages on multifamily housing
Conditions for prepayment
Section 250 of the National Housing Act (12 U.S.C. 1715z–15) is amended—
in subsection (a)—
by striking paragraph (1) and inserting the following new paragraph:
the Secretary has determined that—
such project is no longer meeting a need for rental housing for lower income families in the area, as evidenced by a persistent lack of demand for the units under the rent schedule approved by the Secretary; or
the prepayment is part of a transaction to preserve and improve the project as affordable housing, pursuant to the guidance in effect that implements section 236(e)(2) of this Act (12 U.S.C. 1715z–1(e)2)) or pursuant to additional administrative guidance, ensuring that—
the proceeds of any refinancing will be used for rehabilitation of the project and related costs or for affordable housing and related social services under a plan approved by the Secretary;
tenants will not be displaced from the project;
rent burdens for unassisted tenants as a result of the transaction will not be increased by more than 10 percent annually or 20 percent in total, unless additional project-based assistance is provided; and
binding commitments, which shall apply to current and subsequent owners, are made to ensure that the project will operate in accordance with all currently applicable low-income affordability restrictions for a period of not less than the original mortgage term plus an additional 20 years, including a duty to maintain a substantially similar occupancy profile for the project of low-, very low-, and extremely low-income tenants, to renew any expiring rental assistance contracts for the project, and accept additional rental assistance for the project.
;
in paragraph (2)—
in
subparagraph (A), by inserting before the semicolon at the end the following:
which shall include reasonable access to all information relevant to the
request, including the anticipated sources and uses of proceeds, any additional
financing, subsidies, and rental assistance, and any proposed rehabilitation
plan, affordable housing and services plan, or use agreement
;
and
in subparagraph (C), by inserting before
the semicolon the following: in making the determination required by
paragraph (1)
;
in paragraph (3),
by striking the period at the end and inserting ; and
; and
by adding at the end the following new paragraph:
the Secretary has ensured that such prepayment or termination involves extension of any low-income affordability restrictions (as such term is defined in section 229 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4119) for the project for a period of not less than 30 years.
.
Use of proceeds of preservation transactions by nonprofit owners of multifamily projects; section 236 transactions; clarification of effect
Section 250 of the National Housing Act (12 U.S.C. 1715z–15) is amended by adding at the end the following new subsections:
Use of proceeds from preservation transaction
Notwithstanding any other provision of law, in connection with a preservation transaction, the prepayment of a mortgage on a multifamily rental housing project or termination of an insurance contract pursuant to section 229, or the sale or refinancing of a multifamily rental housing project for which approval of the Secretary is required, the Secretary may not, in any manner that is not equally applicable to a for-profit owner of such a project—
impose on any owner of such a project that is a nonprofit organization or controlled by a nonprofit organization any limitation on the right of such owner to use the proceeds of such preservation transaction for the affordable housing mission (including tenant and supportive services) of such organization, except that any increase in the project-based rental assistance shall be used solely to cover the cost of actual debt service, customary operating costs, and project reserve requirements, and for any rehabilitation of the project and reasonably related costs, and not for cash distributions or proceeds made to any project owner or purchaser; or
restrict the right of any owner of such a project that is a nonprofit organization or controlled by a nonprofit organization to do business, in connection with any affiliate or entity in which it has a financial interest.
Section 236 decoupling refinancing transactions
In the case of a decoupling refinancing transaction under section 236, the Secretary may not enter into any agreement that establishes an escrow for the payment of future section 8 rent increases from sales proceeds funded by low-income housing tax credit equity and any such agreement already entered into shall be considered unenforceable, shall be rescinded, and may be reissued without the void condition.
Applicability
Notwithstanding any existing administrative directive of the Secretary to the contrary, except as specifically authorized in this section, this section shall apply to the prepayment of any multifamily mortgage on any property insured or held by the Secretary under this Act for which the approval of the Secretary is required for prepayment of the mortgage.
.
Period of eligibility for nonprofit debt relief
Section 517(a)(5) of the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is
amended by adding at the end the following new sentences: If such
purchaser acquires such project subsequent to the date of recordation of the
affordability agreement described in section 514(e)(6), (A) the purchaser must
acquire the project on or before the later of (i) seven years after the date of
recordation of the affordability agreement and (ii) two years after the date of
enactment of this sentence; and (B) the Secretary must have received, and
determined acceptable, the purchaser’s application for modification,
assignment, or forgiveness prior to the purchaser’s acquisition of the project.
In the event any low-income housing tax credits, State or local funds,
tax-exemption or other affordable housing resources are being utilized by the
purchaser in connection with the transfer of the property, the Secretary shall
not require any repayment in connection with the assignment or forgiveness of
the mortgages to the purchaser.
.
Acquisition of restructured projects by nonprofit organizations
Paragraph (5) of section 517(a) of the
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C.
1437 note) is amended by inserting , or the sole general partner of the
limited partnership owning the project,
after if the
project
.
Rent adjustments upon subsequent renewals of section 8 contracts
Section 524(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new paragraph:
Subsequent renewals
At the request of the owner of the project, a contract initially renewed pursuant to this section may subsequently be renewed under any renewal authority in this section for which it is eligible. The subsequent renewal of a contract initially renewed under subsection (b)(1) shall be at rents established in accordance with paragraph (1) of this subsection. A project whose contract is initially renewed under this section shall not be considered an eligible multifamily housing project as defined in section 512(2) unless (A) the owner of the project and the Secretary consent to the project’s designation as an eligible multifamily housing project, and (B) the project meets the requirements of subparagraphs (A) and (C) of such section 512(2).
.
Budget-based rent adjustments
Methods for annual rent adjustments
Section 514(g) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new paragraph:
Annual rent adjustments
The Secretary shall annually adjust the rents initially established pursuant to this section using an operating cost adjustment factor established by the Secretary (which shall not result in a negative adjustment) or, upon the request of the project owner, on a budget basis.
Meeting rehabilitation needs of previously restructured projects
Section 517(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new paragraph:
Rehabilitation needs of restructured projects
Rehabilitation assistance
Notwithstanding any other provision of this title, at the request of a project owner, the Secretary shall, pursuant to a revised evaluation of the physical condition of the project approved by the Secretary, provide rehabilitation assistance from the funding sources specified in the first sentence of paragraph (1)(A) for any project for which the Secretary and the project owner executed a mortgage restructuring and rental assistance sufficiency plan prior to October 1, 2001, pursuant to which mortgage debt on the project was restructured.
Funding through debt restructuring
The Secretary may, in connection with the transfer of a project to a qualified preservation owner, modify or waive any of the requirements or conditions on debt restructuring contained in this title in order to provide a simplified debt restructuring for funding the rehabilitation of previously restructured projects under this title. The Secretary may make a non-default partial or full payment of claim under a mortgage insurance contract pursuant to section 541(b) of the National Housing Act (12 U.S.C. 1735f–19(b)), notwithstanding the limitation in section 541(b) to its one-time use. The Secretary may also modify or waive any requirement or condition in such section 541(b) that the Secretary considers inconsistent with the simplified debt restructuring authorized by this paragraph.
Contribution
The project owner receiving rehabilitation assistance under this paragraph shall not be required to make the contribution specified in paragraph (1)(B) or (2)(C), except to the extent the Secretary increases project rents to provide for a return of the owner’s contribution over such period as the Secretary shall determine.
.
Independent appraisal requirement in cases of divergent rent studies
Section 524(a)(5) of the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is
amended by adding at the end the following new sentence: In connection
with a contract renewal under this section or section 515, if the comparable
market rent determination made by the Secretary and the owner’s appraiser
differ by 15 percent or more, the owner may request a third appraiser, jointly
selected and compensated by the Secretary and the owner, to make a comparable
market rent determination that shall be binding on both
parties.
.
Extension of housing assistance payment contract
In general
Section 524(a) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new paragraph:
Extension of contract term
In connection with the refinancing or sale of a project covered by a contract renewed under this subsection, the Secretary shall, at the request of the owner, amend the contract to extend the term to 30 years or such shorter term as the owner may request. Such an extension shall be subject to the availability of sufficient amounts provided in appropriation Acts.
.
Exception rent projects
Section 524(b) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new paragraph:
Extension of contract term
In connection with the refinancing or sale of a project covered by a contract renewed under this subsection, the Secretary shall, at the request of the owner, amend the contract to extend the term to 30 years or such shorter term as the owner may request. Such an extension shall be subject to the availability of sufficient amounts provided in appropriation Acts
.
Otherwise eligible projects
Section 514 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following new subsection:
Other eligible projects
In general
Notwithstanding any other provision of this subtitle, a project that meets the requirements of subparagraphs (B) and (C) of section 512(2) but does not meet the requirements of subparagraph (A) of section 512(2), may be treated as an eligible multifamily housing project on an exception basis if the Secretary determines, subject to paragraph (2), that such treatment is necessary to preserve the project in the most cost-effective manner in relation to other alternative preservation options.
Owner request
Request required
The Secretary shall not treat an otherwise eligible project described under paragraph (1) as an eligible multifamily housing project unless the owner of the project requests such treatment.
No adverse treatment if no request made
If the owner of a project does not make a request under subparagraph (A), the Secretary shall not withhold from such project any other available preservation option.
Cancellation
Timing
At any time prior to the completion of a mortgage restructuring under this subtitle, the owner of a project may—
withdraw any request made under paragraph (2)(A); and
pursue any other option with respect to the renewal of such owner’s section 8 contract pursuant to any applicable statute or regulation.
Documentation
If an owner of a project withdraws such owner’s request and pursues other renewal options under this paragraph, such owner shall be entitled to submit documentation or other information to replace the documentation or other information used during processing for mortgage restructuring under this subtitle.
Limitation
The Secretary may exercise the authority to treat projects as eligible multifamily housing projects pursuant to this subsection only to the extent that the number of units in such projects do not exceed 10 percent of all units for which mortgage restructuring pursuant to section 517 is completed.
.
Exception rents
In the matter preceding clause (i) of section 514(g)(2)(A) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended—
by inserting
disaster-damaged eligible projects and
after waive this
limit for
; and
by striking
five percent of all units
and inserting 9 percent of all
units
.
Disaster-damaged eligible projects
Market rent determination
Section 514(g)(1)(B) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by striking “determined, are equal” and inserting the following:
determined—
with respect to a disaster-damaged property, are equal to 100 percent of the fair market rents for the relevant market area (as such rents were in effect at the time of such disaster); and
with respect to other eligible multifamily housing projects, are equal
.
Owner Investment
Section 517(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following:
Properties damaged by natural disasters
With respect to a disaster-damaged eligible property, the owner contribution toward rehabilitation needs shall be determined in accordance with paragraph (2)(C).
.
Funding for tenant and other participation and capacity building
Paragraph (3) of section 514(f) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended—
in subparagraph (A)—
in the first sentence—
by
striking not more than
and inserting not less
than
;
by
striking of low-income housing for which project-based rental assistance
is provided at below market rent levels and may not be renewed
and
inserting the following: and improvement of low-income housing for which
project-based rental assistance, subsidized loans, or enhanced vouchers under
section 8(t) are provided
; and
in
the second parenthetical clause, by inserting before the closing parenthesis
the following: , and predevelopment assistance to enable such
transfers
; and
by inserting after
the period at the end the following: For outreach and training of
tenants and technical assistance, the Secretary shall implement a grant program
utilizing performance-based outcome measures for eligible costs incurred.
Recipients providing capacity building or technical assistance services to
tenant groups shall be qualified nonprofit Statewide, countywide, area-wide or
citywide organizations with demonstrated experience including at least a
two-year recent track record of organizing and providing assistance to tenants,
and independence from the owner, a prospective purchaser, or their managing
agents. The Secretary may provide assistance and training to grantees in
administrative and fiscal management to ensure compliance with applicable
Federal requirements. The Secretary shall expedite the provision of funding for
the fiscal year in which the date of the enactment of the
Housing Preservation and Tenant Protection
Act of 2010 occurs by entering into new multi-year contracts with
any prior grantee without adverse audit findings or whose adverse audit
findings have been cleared, and by entering into an interagency agreement for
not less than $1,000,000 with the Corporation for National and Community
Service or any other agency of the Federal Government, that is selected by the
Secretary and the Secretary determines is qualified to conduct such program, to
conduct a tenant outreach and training program under the same or similar terms
and conditions as was most recently conducted by the Corporation. The Secretary
shall also make available flexible grants to qualified nonprofit organizations
that do not own eligible multifamily properties, for tenant outreach in
underserved areas, and to experienced national or regional nonprofit
organizations to provide specialized training or support to grantees assisted
under this section. Notwithstanding any other provision of law, funds
authorized under this section for any fiscal year shall be available for
obligation in subsequent fiscal years. The Secretary shall require each
recipient of amounts made available pursuant to this subparagraph to submit to
the Secretary reports, on a quarterly basis, detailing the use of such funds
and including such information as the Secretary shall require.
;
and
by adding at the end the following new subparagraphs:
Prohibitions
None of the funds made available under
subparagraph (A) may be used for any political activities, political advocacy,
or lobbying (as such terms are defined by Circular A–122 of the Office of
Management and Budget, entitled Cost Principles for Non-Profit
Organizations
), or for expenses for travel to engage in political
activities or preparation of or provision of advice on tax returns.
Program compliance systems
Each recipient of amounts made available under subparagraph (A) shall develop systems to ensure compliance with the program and the requirements of this paragraph.
Penalties
The Secretary may impose penalties on any recipient of amounts made available under subparagraph (A) that fails to comply with any requirement under this paragraph or of the program established pursuant to this paragraph, which penalties may include—
ineligibility for further assistance from amounts made available under subparagraph (A); and
requiring the recipient to reimburse the Secretary for any amounts that were so misused.
.
Preservation database
Preservation database
Unique identifier
The Secretary of Housing and Urban Development, in consultation with the Secretary of Agriculture, shall establish a unique alphanumeric identifier for each covered multifamily property (as such term is defined in subsection (i)). A property shall have only one such identifier, regardless of whether such property is receiving more than one of the forms of assistance identified in subsection (i).
Public availability of information
The Secretary of Housing and Urban Development shall require the submission of information and make publicly available such information about each covered multifamily property, which information shall include the following:
The unique identifier for the property established pursuant to subsection (a).
The name of the property.
The address and geographical coordinates of the property.
The name of, and contact information for, the owner (or owners) or sponsor (or sponsors) of the property.
A characterization of the type of owners or sponsors of the property (such as nonprofit or for-profit).
The name of, and contact information for, the property management company.
The year that the property was built or placed in service.
The total number of dwelling units in the property.
The total number of dwelling units in the property of each size (such as studio units, 1-bedroom units, or 2-bedroom units).
The average income of tenants residing in dwelling units in the property receiving project-based rental assistance, according to the most recent available information.
For each size of dwelling unit in the property, the contract rents for such dwelling units.
For each size of dwelling unit in the property, the ratio of the contract rents for such dwelling units to the fair market rent established under section 8(c) of the United States Housing Act of 1937 for such size dwelling units for the area in which the property is located.
The most recent 3 scores for the property for any physical inspections, including any real estate assessment center (REAC) scores for the property, and the dates of such inspections.
Indicators of the financial condition of the property, which may include notification of any foreclosure proceedings on the property and any bankruptcy filings by the entity holding title to the property.
The form or forms of assistance identified in subsection (i) that are provided for the property.
For each form of assistance identified in subsection (i) that is provided for the property, the total number of dwelling units in the property for which such assistance is provided.
For each form of assistance identified in subsection (i) that is provided for the property, the total number of assisted dwelling units in the property of each size (such as studio units, 1-bedroom units, and 2-bedroom units).
For each form of assistance identified in subsection (i) that is provided for the property, a characterization of occupancy restrictions applicable to the property (such as restrictions limiting occupancy to only elderly, disabled, or families).
For each form of assistance identified in subsection (i) that is provided for the property, any limitations on the incomes of tenants applicable to the assistance.
For each form of assistance identified in subsection (i) that is provided for the property, the day, month, and year that any affordability or low-income use restrictions applicable to the property first applied.
For each form of assistance identified in subsection (i) that is provided for the property, the day, month, and year that any affordability or low-income use restrictions applicable to the property will terminate.
For each form of assistance identified in subsection (i) that is provided for the property, the day, month, and year of any early termination date for such form of assistance after which any affordability or low-income use restrictions will not necessarily apply to the property (such as the termination of the compliance period for any low-income housing tax credit for the property or the date that a loan or mortgage for the property held or insured by the Secretary is first eligible for prepayment).
Any notices, plans, and information relating to the property required under the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4101 et seq.), including any notice of intent to prepay a mortgage under section 212 of such Act, information provided under section 216 of such Act by the Secretary, second notice of intent under section 216(d) of such Act, plan of action under section 217 of such Act, and notice of approval of a plan of action under section 225 of such Act.
Any notice of a request to terminate an insurance contract under title II of the National Housing Act for a loan or mortgage on the property.
Any notice of a request to prepay a loan or mortgage on the property insured under title II of the National Housing Act and an indication of whether such request was made in conjunction with a refinance application under such title.
Any notice under section 8(c)(8) of the United States Housing Act of 1937 of proposed termination of an assistance contract under such section for the property.
A description of any notice indicating an intention of the owner in selling the property.
Any other information as the Secretary or the designee of the Secretary determines is appropriate.
Means
Availability through world wide web
The information made available pursuant to subsection (b) shall be made available to the public through a World Wide Web site of the Department of Housing and Urban Development.
Searchable electronic database
Such information shall be made available in a searchable electronic database format that allows for the data for each of the forms of assistance specified in subsection (i) to be aggregated in a single database.
Use of existing systems and databases
The requirements of subsection (b) may be met by adapting existing systems or databases to include the unique identifier established pursuant to subsection (a) and the information specified in subsection (b).
Annual and quarterly list
At least annually, the Secretary shall update and make available a list of properties receiving one of more forms of assistance specified in subsection (i). At least on a quarterly basis, the Secretary shall make available through a World Wide Web site of the Department of Housing and Urban Development a list of properties receiving one or more forms of assistance specified in subsection (i). Each such annual and quarterly list shall include, for each such property, the unique identifier established pursuant to subsection (a) and the information specified in paragraphs (1) through (3) of subsection (b).
Updating
The information made available pursuant to subsection (b) shall be updated not less than annually or in accordance with any rules or practice applicable to the subsidy program involved that require information to be made available more frequently. Any historical databases shall remain available to the public through a World Wide Web site of the Department of Housing and Urban Development.
Initial availability
The Secretary of Housing and Urban Development shall make information initially publicly available pursuant to this section not later than the expiration of the 18-month period beginning on the date of the enactment of this Act.
Information from Department of Agriculture
The Secretary of Agriculture shall take such actions as may be necessary to ensure that information regarding any covered multifamily properties described in paragraphs (1)(E) and (3)(G) of subsection (i) that is sufficient for the Secretary of Housing and Urban Development to comply with the requirements of this section, with respect to such properties, is timely made available to the Secretary of Housing and Urban Development.
Information from Secretary of the Treasury
The Secretary of the Treasury shall take such actions as may be necessary to ensure that information regarding any covered multifamily properties described in paragraphs (4) and (6) of subsection (i) that is sufficient for the Secretary of Housing and Urban Development to comply with the requirements of this section, with respect to such properties, is timely made available to the Secretary of Housing and Urban Development.
Grants to States and localities
Authority
The Secretary of Housing and Urban Development shall, to the extent amounts are made available for grants under this subsection, make grants to States and units of local government to enable such entities to collect and make available to the public information about State and local assistance provided to covered multifamily properties identified in databases developed by the Secretary pursuant to this section or to other properties assisted by such States and units of local government.
Authorization of appropriations
There is authorized to be appropriated to the Secretary of Housing and Urban Development for grants under this subsection such sums as may be necessary in each fiscal year to carry out this subsection.
Covered multifamily properties
For purposes of this section, the term
covered multifamily property
means a property consisting of more
than 4 rental dwelling units, which property—
is covered in whole or in part by a contract for assistance that is attached to the structure under—
section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), including—
subsections (b) and (o)(13) of such section 8;
the new construction and substantial rehabilitation program under such section 8(b)(2), as in effect before October 1, 1983;
the property disposition program under such section 8(b);
the moderate rehabilitation program under such section 8(e)(2); and
the loan management assistance program under such section 8;
section 23 of the United States Housing Act of 1937, as in effect before January 1, 1975;
the rent supplement program under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s);
section 8 of the United States Housing Act of 1937, following conversion from assistance under section 101 of the Housing and Urban Development Act of 1965; or
section 521 of the Housing Act of 1949 (42 U.S.C. 1490a);
is financed by a mortgage insured or held by the Secretary under title II of the National Housing Act (12 U.S.C. 1707 et seq.);
receives assistance that is attached to the structure pursuant to—
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), including properties receiving assistance prior to the enactment of the Cranston-Gonzalez National Affordable Housing Act;
section 811 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013);
section 5 or 9 of the United States Housing Act of 1937 (42 U.S.C. 1437c, 1437g);
title II of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12721 et seq.);
subtitle D of title VIII of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12901 et seq.);
title IV of the McKinney-Vento Homeless Assistance Act (12 U.S.C. 11301 et seq.); or
sections 514, 515, or 516 of the Housing Act of 1949 (42 U.S.C. 1484, 1485);
is financed in whole or part with low-income housing tax credits pursuant to section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42);
is financed in whole or part with amounts from the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568); or
is financed in whole or in part with the proceeds from a bond issued pursuant to section 141 or 142 of the Internal Revenue Code of 1986 (26 U.S.C. 141, 142).
Protection of information
This title shall not be construed to require disclosure of Social Security numbers, personal tax returns, or any other personal financial information of or concerning individuals who have an interest in the ownership or management entities of covered housing.
Section 202 Supportive Housing for the Elderly
Short title and table of contents
This title
may be cited as the Section 202
Supportive Housing for the Elderly Act of 2010
.
New construction reforms
Project rental assistance
Paragraph (2) of section 202(c) of the Housing Act of 1959 (12 U.S.C. 1701q(c)(2)) is amended—
by inserting after
assistance.—
the following: (A)
Initial project rental
assistance contract.—
;
in the last
sentence, by striking may
and inserting shall
;
and
by adding at the end the following new subparagraph:
Renewal of and increases in contract amounts
Expiration of contract term
Upon the expiration of each contract term, the Secretary shall adjust the annual contract amount to provide for reasonable project costs, and any increases, including adequate reserves, supportive services, and service coordinators.
Emergency situations
In the event of emergency situations that are outside the control of the owner, the Secretary shall increase the annual contract amount, subject to reasonable review and limitations as the Secretary shall provide.
.
Selection criteria
Section 202(f)(1) of the Housing Act of 1959 (12 U.S.C. 1701q(f)) is amended—
by redesignating subparagraphs (F) and (G) as subparagraphs (G) and (H), respectively; and
by inserting after subparagraph (E):
the extent to which the applicant has ensured that a service coordinator will be employed or otherwise retained for the housing, who has the managerial capacity and responsibility for carrying out the actions described in subparagraphs (A) and (B) of subsection (g)(2);
.
Development cost limitations
Section
202(h)(1) of the Housing Act of 1959 (12 U.S.C. 1701q(h)(1)) is amended, in the
matter preceding subparagraph (A), by inserting reasonable
before development cost limitations
.
Owner deposits
Section 202(j)(3)(A)
of the Housing Act of 1959 (12 U.S.C. 1701q(j)(3)(A)) is amended by inserting
after the period at the end the following: Such amount shall be used
only to cover operating deficits during the first 3 years of operations and
shall not be used to cover construction shortfalls or inadequate initial
project rental assistance amounts.
.
Definition of private nonprofit organization
Paragraph (4) of section 202(k) of the Housing Act of 1959 (12 U.S.C. 1701q(k)(4)) is amended to read as follows:
The term “private nonprofit organization” means—
any incorporated private institution or foundation—
no part of the net earnings of which inures to the benefit of any member, founder, contributor, or individual;
which has a governing board—
the membership of which is selected in a manner to assure that there is significant representation of the views of the community in which such housing is located, except that, in the case of any organization that is the sponsor of multiple housing projects assisted under this section, the organization may comply with this subclause by having a local advisory board for each community to the governing board of the organization, the membership of which is selected in the manner required under this subclause; and
which is responsible for the operation of the housing assisted under this section; and
which is approved by the Secretary as to financial responsibility;
a for-profit limited partnership the sole general partner of which is—
an organization meeting the requirements under subparagraphs (A); or
a for-profit corporation wholly owned and controlled by one or more organizations meeting the requirements under subparagraph (A); and
a limited liability company wholly owned or controlled by one or more organizations meeting the requirements under subparagraph (A).
.
Preferences for homeless elderly
Subsection (j) of section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(j)) is amended by adding at the end the following new paragraph:
Preferences for homeless elderly
The Secretary shall permit an owner of housing assisted under this section to establish for, and apply to, such housing a preference in tenant selection for the homeless elderly, either within the application or after selection pursuant to subsection (f), but only if—
such preference is consistent with paragraph (2); and
the owner demonstrates that the supportive services identified pursuant to subsection (e)(4), or additional supportive services to be made available upon implementation of the preference, will meet the needs of the homeless elderly, maintain safety and security for all tenants, and be provided on a consistent, long-term, and economical basis.
.
Nonmetropolitan allocation
Paragraph (3) of
section 202(l) of the Housing Act of 1959 (12 U.S.C. 1701q(l)(3)) is amended by
inserting after the period at the end the following: In complying with
this paragraph, the Secretary shall either operate a national competition for
the nonmetropolitan funds or make allocations to regional offices of the
Department of Housing and Urban Development.
.
Refinancing
Approval of prepayment of debt
Subsection (a) of section 811 of the American Homeownership and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended—
in the matter
preceding paragraph (1), by inserting , for which the Secretary’s
consent to prepayment is required,
after Affordable Housing
Act)
;
in paragraph (1)—
by inserting
at least 30 years following
before the maturity
date
;
by inserting
project-based
before rental assistance payments
contract
;
by inserting
project-based
before rental housing assistance
programs
; and
by inserting
, or any successor project-based rental assistance program,
after 1701s))
;
by amending paragraph (2) to read as follows:
the prepayment may involve refinancing of the loan if such refinancing results in—
a lower interest rate on the principal of the loan for the project and in reductions in debt service related to such loan; or
a transaction in which the project owner will address the physical needs of the project, but only if, as a result of the refinancing—
the rent charges for unassisted families residing in the project do not increase or such families are provided rental assistance under a senior preservation rental assistance contract for the project pursuant to subsection (e); and
the overall cost for providing rental assistance under section 8 for the project (if any) is not increased, except, upon approval by the Secretary to—
mark-up-to-market contracts pursuant to section 524(a)(3) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), as such section is carried out by the Secretary for properties owned by nonprofit organizations; or
mark-up-to-budget contracts pursuant to section 524(a)(4) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), as such section is carried out by the Secretary for properties owned by eligible owners (as such term is defined in section 202(k) of the Housing Act of 1959 (12 U.S.C. 1701q(k)); and
; and
by adding at the end the following:
notwithstanding paragraph (2)(A), the prepayment and refinancing authorized pursuant to paragraph (2)(B) involves an increase in debt service only in the case of a refinancing of a project assisted with a loan under such section 202 carrying an interest rate of 6 percent or lower.
.
Sources of refinancing
The last sentence of section 811(b) of the American Homeownership and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended—
by
inserting after National Housing Act,
the following: or
approving the standards used by authorized lenders to underwrite a loan
refinanced with risk sharing as provided by section 542 of the Housing and
Community Development Act of 1992 (12 U.S.C. 1701 note),
; and
by striking
may
and inserting shall
.
Use of unexpended amounts
Subsection (c) of section 811 of the American Homeownership and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended—
by striking
Use of unexpended
amounts.—
and inserting Use of
pro‑ceeds.—
;
by amending the
matter preceding paragraph (1) to read as follows: Upon execution of the
refinancing for a project pursuant to this section, the Secretary shall ensure
that proceeds are used in a manner advantageous to tenants of the project, or
are used in the provision of affordable rental housing and related social
services for elderly persons that are tenants of the project or of other
projects assisted with a loan under section 202 of the Housing Act of 1959 (12
U.S.C. 1701q) by the private nonprofit organization project owner, private
nonprofit organization project sponsor, or private nonprofit organization
project developer, including—
;
in paragraph (1),
by striking not more than 15 percent of
;
in paragraph (2),
by inserting before the semicolon the following; , including reducing
the number of units by reconfiguring units that are functionally obsolete,
unmarketable, or not economically viable
;
in paragraph (3),
by striking or
at the end;
in paragraph (4),
by striking according to a pro rata allocation of shared savings
resulting from the refinancing.
and inserting a semicolon; and
by adding at the end the following new paragraphs:
rehabilitation of the project to ensure long-term viability;
the payment to the project owner, sponsor, or third party developer of a developer’s fee in an amount not to exceed or duplicate—
in the case of a project refinanced through a State low income housing tax credit program, the fee permitted by the low income housing tax credit program as calculated by the State program as a percentage of acceptable development cost as defined by that State program; or
in the case of a project refinanced through any other source of refinancing, 15 percent of the acceptable development cost; and
the payment of equity, if any, to—
in the case of a sale, to the seller or the sponsor of the seller, in an amount equal to the lesser of the purchase price or the appraised value of the project, as each is reduced by the cost of prepaying any outstanding indebtedness on the project and transaction costs of the sale; or
in the case of a refinancing without the transfer of the project, to the project owner or the project sponsor, in an amount equal to the difference between the appraised value of the project less the outstanding indebtedness and total acceptable development cost.
For purposes of paragraphs (6)(B) and (7)(B), the term “acceptable development cost” shall include, as applicable, the cost of acquisition, rehabilitation, loan prepayment, initial reserve deposits, and transaction costs.
.
Use of project residual receipts
Paragraph (1) of section 811(d) of the American Homeownership and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended—
by
striking not more than 15 percent of
; and
by
inserting before the period at the end the following: or other purposes
approved by the Secretary
.
Additional provisions
Section 811 of the American Homeownership and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended by adding at the end the following new subsections:
Senior preservation rental assistance contracts
Notwithstanding any other provision of law, in connection with a prepayment plan for a project approved under subsection (a) by the Secretary or as otherwise approved by the Secretary to prevent displacement of elderly residents of the project in the case of refinancing or recapitalization and to further preservation and affordability of such project, the Secretary shall provide project-based rental assistance for the project under a senior preservation rental assistance contract, as follows:
Assistance under the contract shall be made available to the private nonprofit organization owner—
for a term of at least 20 years, subject to annual appropriations; and
under the same rules governing project-based rental assistance made available under section 8 of the Housing Act of 1937 or under the rules governing such other assistance as may be made available for the project.
Any projects for which a senior preservation rental assistance contract is provided shall be subject to a use agreement to ensure continued project affordability having a term of the longer of (A) the term of the senior preservation rental assistance contract, or (B) such term as is required by the new financing.
Subordination or assumption of existing debt
In lieu of prepayment under this section of the indebtedness with respect to a project, the Secretary may approve—
in connection with new financing for the project, the subordination of the loan for the project under section 202 of the Housing Act of 1959 (as in effect before the enactment of the Cranston-Gonzalez National Affordable Housing Act) and the continued subordination of any other existing subordinate debt previously approved by the Secretary to facilitate preservation of the project as affordable housing; or
the assumption (which may include the subordination described in paragraph (1)) of the loan for the project under such section 202 in connection with the transfer of the project with such a loan to a private nonprofit organization.
Flexible subsidy debt
The Secretary shall waive the requirement that debt for a project pursuant to the flexible subsidy program under section 201 of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a) be prepaid in connection with a prepayment, refinancing, or transfer under this section of a project if such waiver is necessary for the financial feasibility of the transaction and is consistent with the long-term preservation of the project as affordable housing.
Tenant involvement in prepayment and refinancing
The Secretary shall not accept an offer to prepay the loan for any project under section 202 of the Housing Act of 1959 unless the Secretary has—
determined that the owner of the project has notified the tenants of the owner’s request for approval of a prepayment;
determined that the owner of the project has provided the tenants with an opportunity to comment on the owner’s request for approval of a prepayment, including a description of any anticipated rehabilitation or other use of the proceeds from the transaction, and its impacts on project rents, tenant contributions, or the affordability restrictions for the project; and
taken such comments into consideration.
Definition of private nonprofit organization
For purposes of this section, the
term private nonprofit organization
has the meaning given such
term in section 202(k) of the Housing Act of 1959 (12 U.S.C.
1701q(k)).
.
Assisted living facilities
Definition of assisted living facility
Section 202b(g) of the Housing Act of 1959 (12 U.S.C. 1701q–2(g)) is amended by striking paragraph (1) and inserting the following new paragraph:
the term assisted living facility means a facility that—
is owned by a private nonprofit organization; and
is licensed and regulated by a State (or if there is no State law providing for such licensing and regulation by the State, by the municipality or other political subdivision in which the facility is located); or
makes available, directly or through licensed or certified third party service providers, to residents at the resident’s request or choice supportive services to assist the residents in carrying out the activities of daily living, as described in section 232(b)(6)(B) of the National Housing Act (12 U.S.C. 1715w(b)(6)(B)); and
provides separate dwelling units for residents, each of which may contain a full kitchen and bathroom and which includes common rooms and other facilities appropriate for the provision of supportive services to the residents of the facility; and
.
Monthly assistance payment under rental assistance
Clause (iii) of section 8(o)(18)(B) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(o)(18)(B)(iii)) is amended
by inserting before the period at the end the following: , except that a
family may be required at the time the family initially receives such
assistance to pay rent in an amount exceeding 40 percent of the monthly
adjusted income of the family by such an amount or percentage that is
reasonable given the services and amenities provided and as the Secretary deems
appropriate.
.
National Senior Housing Clearinghouse
National senior housing clearinghouse
Establishment
Not
later than 12 months after the date of enactment of this Act, the Secretary of
Housing and Urban Development (in this section referred to as the
Secretary
) shall establish and operate a clearinghouse to serve
as a national repository to receive, collect, process, assemble, and
disseminate information regarding the availability and quality of multifamily
developments for elderly tenants, including—
the availability of—
supportive housing for the elderly pursuant to section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), including any housing unit assisted with a project rental assistance contract under such section;
properties and units eligible for assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f);
properties eligible for the low-income housing tax credit under section 42 of the Internal Revenue Code of 1986;
units in assisted living facilities insured pursuant to section 221(d)(4) of the National Housing Act (12 U.S.C. 1715l(d)(4));
units in any multifamily project that has been converted into an assisted living facility for elderly persons pursuant to section 202b of the Housing Act of 1959 (12 U.S.C. 1701q–2); and
any other federally assisted or subsidized housing for the elderly;
the number of available units in each property, project, or facility described in paragraph (1);
the number of bedrooms in each available unit in each property, project, or facility described in paragraph (1);
the estimated cost to a potential tenant to rent or reside in each available unit in each property, project, or facility described in paragraph (1);
the presence of a waiting list for entry into any available unit in each property, project, or facility described in paragraph (1);
the number of persons on the waiting list for entry into any available unit in each property, project, or facility described in paragraph (1);
the amenities available in each available unit in each property, project, or facility described in paragraph (1), including—
the services provided by such property, project, or facility;
the size and availability of common space within each property, project, or facility;
the availability of organized activities for individuals residing in such property, project, or facility; and
any other additional amenities available to individuals residing in such property, project, or facility;
the level of care (personal, physical, or nursing) available to individuals residing in any property, project, or facility described in paragraph (1);
whether there is a service coordinator in any property, project, or facility described in paragraph (1); and
any other criteria determined appropriate by the Secretary.
Collection and updating of information
Initial Collection
Not later than 180 days after the date of enactment of this Act, the Secretary shall conduct an annual survey requesting information from each owner of a property, project, or facility described in subsection (a)(1) regarding the provisions described in paragraphs (2) through (11) of such subsection.
Response time
Not later than 60 days after receiving the request described under paragraph (1), the owner of each such property, project, or facility shall submit such information to the Secretary.
Public availability
Not later than 120 days after the Secretary receives the submission of any information required under paragraph (2), the Secretary shall make such information publicly available through the clearinghouse.
Updates
The Secretary shall conduct a biennial survey of each owner of a property, project, or facility described in subsection (a)(1) for the purpose of updating or modifying information provided in the initial collection of information under paragraph (1). Not later than 30 days after receiving such a request, the owner of each such property, project, or facility shall submit such updates or modifications to the Secretary. Not later than 60 days after receiving such updates or modifications, the Secretary shall inform the clearinghouse of such updated or modified information.
Functions
The clearinghouse established under subsection (a) shall—
respond to inquiries from State and local governments, other organizations, and individuals requesting information regarding the availability of housing in multifamily developments for elderly tenants;
make such information publicly available via the Internet website of the Department of Housing and Urban Development, which shall include—
access via electronic mail; and
an easily searchable, sortable, downloadable, and accessible index that itemizes the availability of housing in multifamily developments for elderly tenants by State, county, and zip code;
establish a toll-free number to provide the public with specific information regarding the availability of housing in multifamily developments for elderly tenants; and
perform any other duty that the Secretary determines necessary to achieve the purposes of this section.
Relationship with other databases
In carrying out this section, the Secretary may make the clearinghouse a part of any other multifamily housing database that the Secretary maintains or is otherwise required to establish pursuant to this Act or any other provision of law.
Authorization of appropriations
There are authorized to be appropriated such sums as necessary to carry out this section.
Rural housing preservation
Short title
This title may be cited
as the Rural Housing Preservation Act
of 2010
.
Preservation of multifamily housing
Preservation program
Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.) is amended by adding at the end the following new section:
Preservation of multifamily housing and protection of tenants
Preservation program
The Secretary shall, subject to the availability of amounts appropriated, carry out a preservation program in accordance with this section to provide financial incentives and other assistance to owners of eligible projects through long-term use agreements entered into between the project owners and the Secretary.
Applications To participate
In general
The Secretary shall accept applications from owners of eligible projects to participate in the preservation program under this section.
Priority
In selecting among applications of eligible projects to participate in the preservation program, the Secretary may give priority to applications for such projects that are located on tribal trust lands or other Indian areas, in colonias (as such term is defined in section 916(e) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 5306 note), or in other small, poor, low-income communities.
Long-Term viability plan
Requirement
The Secretary shall prepare and approve a long-term viability plan under this subsection with respect to each eligible project for which the owner requests to participate.
Contents
Each long-term viability plan for an eligible project shall include the following information:
Physical needs assessment
A physical needs assessment of the project that identifies and projects, for the following 30 years—
all necessary repairs, improvements, maintenance, and management standards for the project, and when they will be made, in order to meet the requirements of this title; and
the costs associated with the items referred to clause (i).
Financial plan
A financial plan for the project that—
reviews the financial stability of the project;
includes the loan restructuring elements, rent adjustments, management and operational efficiencies, and other financial adjustments to the project that are necessary to cover operating expenses for the project and maintain an adequate financial reserve for the future maintenance and capital needs of the project;
provides the project owner with a long-term rate of return on equity of the project owner, as determined by the Secretary, commensurate to comparable rural multifamily housing projects for which a tax credit is provided under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42), and provides that any return in excess of such rate of return shall be made available to the Secretary only for use under section 514, 515, or 516;
meets the physical needs for the project determined under the physical needs assessment;
ensures that rents available under the plan are affordable to eligible households in accordance with subsection (f); and
addresses any costs associated with any temporary tenant displacement resulting from renovations or rehabilitation undertaken as a result of participation of the project in the preservation program.
Development through participating administrative entities
The Secretary may develop long-term viability plans through the use of third-party participating administrative entities, who may be a private contractor, a State housing finance agency, or a nonprofit organization.
Preservation determination
Based on the long-term viability plan for an eligible project, the Secretary shall determine whether to offer the project owner a financial restructuring plan under subsection (d) and the financial incentives to be included in any such plan offered.
Final review and comment
Before a determination is made under subparagraph (D) with respect to any long-term viability plan prepared by the Secretary, the Secretary shall—
provide the project owner an opportunity to review the plan and discuss the plan with the Secretary or its agent;
make available to the tenants of the project a copy of such plan and provide a period of not less than 30 days for tenants to submit comments regarding the plan to the Secretary; and
respond in writing to such comments.
Fees
The Secretary may charge the project owner a fee for preparation of the long-term viability plan.
Payment of fees
If a long-term viability for a project is approved, the payment of such fee may be incorporated into a project owner’s financial restructuring plan for the project provided by the Secretary pursuant to subsection (d).
Financial restructuring plan; preservation incentives
Based on the long-term viability plan for an eligible project, the Secretary may offer a project owner a financial restructuring plan for the project. Such a plan may include one or more of the following preservation incentives:
Reduction or elimination of interest on the loan or loans for the project made under section 514, 515, or 516.
Partial or full deferral of payments due under such loan or loans.
Forgiveness of such loan or loans.
Subordination of such loan or loans, subject to such terms and conditions as the Secretary shall determine.
Reamortization of loan payments under such loan or loans over extended terms.
A grant from the Secretary for the project.
Payment of project costs associated with developing the long-term viability plan.
Opportunity for project owners to obtain further investment equity from third parties.
A direct loan or guarantee of a loan for the project, with a subsidized interest rate without regard to the value of the project.
Long-Term use agreement
In general
If the owner of an eligible project agrees to the terms of a financial restructuring plan for the project providing preservation benefits under subsection (d), in exchange for such benefits, the Secretary and the project owner shall enter into a long-term use agreement under this subsection for the project.
Agreement
A long-term use agreement for an eligible project shall include—
the terms of the financial restructuring plan for the project, including any preservation incentives to be provided;
an agreement by the project owner—
to continue the property use restrictions with respect to the project in accordance with this title for a period of—
30 years, or
the remaining term of any loans under this title for the project,
to comply with the long-term viability plan for the project; and
to comply with the rent terms under subsection (f) for the project;
provisions terminating the agreement if any material preservation incentives for the project to be provided under the agreement are no longer available and the Secretary determines that such unavailability is not the fault of the owner;
any rent terms for the project pursuant to subsection (f);
a covenant which runs with the land;
a representation and warranty by the owner to provide safe, healthy, clean buildings pursuant to the Secretary’s guidelines;
provisions providing for rural preservation voucher assistance under section 542(c) for low-income households residing in the project who are eligible for such vouchers; and
such other terms as the Secretary determines are necessary to implement the purposes of this section.
Rents under long-Term use agreement
Rents for any eligible households residing in dwelling units in any preserved project shall comply with the following requirements:
Maximum household contribution to rent and utilities
The maximum household contribution to monthly rent and utilities for any eligible household may not exceed 30 percent of the adjusted income of the eligible household.
Rent adjustments
The rents for eligible projects may be increased or decreased only on an annual basis and only in accordance with standards incorporated in such agreement.
Lowest cost requirement
In determining the terms of a restructuring plan, and the type and amount of preservation benefits under such plan to approve under this section for an eligible project, the Secretary shall, to the extent practicable, approve assistance that imposes the least cost to the Secretary while meeting the requirements of the long-term viability plan for the project.
Earned income disregard for residents
In general
Notwithstanding any other provision of law, the amount of the contribution toward rent for a dwelling unit payable, by any household described in paragraph (3), for occupancy in a project funded with a loan under section 514, 515, or 516 may not be increased as a result of the increased income due to employment during the 12-month period beginning on the date on which the employment is commenced.
Phase-in of rent increases
Upon the expiration of the 12-month period referred to in paragraph (1), the contribution toward rent payable by a household described in paragraph (3) may be increased due to the continued employment of the household member described in subparagraph (3)(B), except that during the 12-month period beginning upon such expiration the amount of the increase may not be greater than 50 percent of the amount of the total increase in contribution toward rent that would be applicable but for this paragraph.
Eligible household
A household described in this paragraph is a household that—
is an eligible household who resides in an eligible project; or
is provided rural preservation voucher assistance pursuant to section 542(c); and
whose income increases as a result of employment of a member of the household who was previously unemployed for 1 or more years;
whose earned income increases during the participation of a household member in any family self-sufficiency or other job training program; or
who is or was, within 6 months, assisted under any State program for temporary assistance for needy families funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) and whose earned income increases.
Ineligibility
Procedure for determination
The Secretary may determine that a project owner is ineligible for participation in the preservation program under this section in accordance with the standards under paragraph (2).
Standards
The Secretary may determine that a project owner is ineligible if—
the project owner has a history of poor management or maintenance of multifamily housing properties;
the project owner is in default on a loan made available under the section 514, 515, or 516 housing program;
the Secretary is unable to enter into a long-term use agreement for the project that is the subject of the application with the project owner within a reasonable time;
the project owner is suspended or debarred from participating in Federal contracts or programs; or
the Secretary has other good cause for withholding from the project owner the benefits made available under this section.
Definitions
For purposes of this section, the following definitions shall apply:
Eligible household
The term eligible household
means a
household that, under section 514, 515, or 516, is eligible to reside in a
project funded with a loan made by the Secretary under such section.
Eligible project
The term eligible project
means a housing
project funded with a loan made at any time by the Secretary under section 514,
515, or 516, the principal obligation of which has not been fully
repaid.
Project owner; owner
The terms project owner
and
owner
mean, with respect to an eligible project, an individual
or entity, or principals thereof that own, or plan to purchase, the
project.
Preserved project
The term preserved project
means an
eligible project for which the Secretary and owner have entered into agreement
on a financial restructuring plan for the project and into a long-term use
agreement for the project, under this section.
Annual report
The Secretary shall submit a report to the Congress annually regarding the compliance of owners of eligible projects participating in the preservation program under this section with the requirements of such program, which shall identify and describe any significant failures to comply.
Authorization of appropriations
There are authorized to be appropriated for each of fiscal years 2011 through 2015 such sums as may be necessary to carry out the preservation program under this section.
.
Rural preservation and rural tenant protection vouchers
Section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) is amended by adding at the end the following new subsections:
Rural preservation assistance
In the case of a housing project subject to a loan made under section 514, 515, or 516 that is a preserved project (as such term is defined in section 545(i)), the Secretary shall, to the extent that amounts for assistance under this subsection are provided in advance in appropriation Acts, make available to each eligible household (as such term is defined in section 545(i)) that is not already assisted under the rental assistance program under section 521 or the program for rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), and is residing in the project upon the date that a long-term use agreement is entered into pursuant to section 545(e) between the project owner and the Secretary, voucher assistance under this subsection or rental assistance under section 521 upon such date, as follows:
The amount of assistance provided shall be sufficient to allow such household to remain in the project after it is preserved.
The percentage of adjusted income paid by the eligible household for rent and utilities for the assisted dwelling shall not exceed 30 percent of adjusted income of the eligible household.
The assistance shall be available to the eligible household only during the period in which the eligible household resides in the preserved project and the long-term use agreement remains in effect.
Upon termination of the participation of the eligible household in the assistance program, the assistance shall remain attached to the preserved project and shall be available for use by another eligible household residing in the preserved project.
Rural tenant protection vouchers for prepayments and foreclosures
In general
In the case of a housing project subject to a loan made under section 514, 515, or 516 that is prepaid or foreclosed upon, the Secretary shall, to the extent that amounts for assistance under this subsection are provided in advance in appropriation Acts, make available to each eligible household (as such term is defined in section 545(i)) that is not assisted under the rental assistance program under section 521 or the program for rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), and is residing in a dwelling unit in the project upon the date that the Secretary approves the prepayment or submits notice of foreclosure to the project owner, as applicable, voucher assistance upon such date, as follows:
Relocation vouchers
In the case of any such eligible household who must relocate from a project for which the loan is being prepaid or foreclosed upon, voucher assistance under this subsection shall be subject to the terms of section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437(o)), except that—
the percentage of adjusted income paid by the eligible household for rent and utilities for the assisted dwelling unit shall not at any time exceed 30 percent of the adjusted income of the eligible household; and
a voucher provided pursuant to this subparagraph shall be subject to the terms of section 8(r) of such Act (relating to portability), except that if an eligible household uses the voucher to move to a community other than the community in which the project from which the family relocated pursuant to such prepayment or foreclosure is located, upon termination of the participation of such eligible family in the voucher program, the voucher shall be returned for use in the community in which such project is located.
Enhanced vouchers
In the case of any such eligible household who remains in a project for which the loan is prepaid or foreclosed upon, voucher assistance under this subsection shall be subject to the terms of section 8(t) of the United State Housing Act of 1937 (42 U.S.C. 1437f(t)), except that—
the percentage of adjusted income paid by the eligible household for rent and utilities for the assisted dwelling unit shall not at any time exceed 30 percent of the adjusted income of the eligible household;
the owner of the project may not refuse to lease, to an eligible household for whom voucher assistance under this subparagraph is made available, any available appropriately sized rental dwelling unit in the project;
voucher assistance under this subparagraph may be used only for dwelling units in housing that is decent, safe, and sanitary; and
upon termination of participation of such eligible family in the enhanced voucher program, the voucher shall convert to a relocation voucher under subparagraph (A) of this paragraph, and shall be available with respect to such project only to provide assistance in accordance with the provisions of such subparagraph.
Administration
The Secretary may contract with a public housing agency or a private or nonprofit organization to administer vouchers authorized under subsections (c) and (d).
Renewal
Vouchers under subsections (c) and (d) shall be renewed annually, subject to the availability of appropriations for such renewal.
Use of savings
Notwithstanding any other provision of law, any amounts made available for voucher assistance under subsections (c) and (d) that remain unused because of increases in the incomes of household assisted under such vouchers shall be available to the Secretary for eligible activities under this Act.
Applicability of section 8 program
Except as specifically provided otherwise in this section, to the maximum extent practicable, the Secretary shall administer voucher assistance under subsections (c) and (d) in accordance with, but not subject to, regulations and administrative guidance for housing vouchers administered by the Secretary of Housing and Urban Development under section 8(o) of such Act.
Authorization of appropriations
There is authorized to be appropriated for voucher assistance under subsections (c) and (d) such sums as may be necessary for each of fiscal years 2011 through 2015.
.
Tenant participation
Title V of the Housing Act of 1949 is amended by inserting after section 517 (42 U.S.C. 1487) the following new section:
Tenant participation
The Secretary shall extend to tenants in multifamily housing projects financed under sections 514, 515, 516 and 538 all of the rights that are specified in section 202 of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1b) with respect to tenants of multifamily housing projects (as such term is defined in subsection (a) of such section).
.
Priority for financing
Subsection (j) of section 515 of the Housing Act of 1949 (42 U.S.C. 1485(j)) is amended—
by inserting
(1)
before For
; and
by adding at the end the following new paragraph:
The Secretary may give priority, in entering into contracts under this section involving financing for new construction of a project, for projects located in eligible rural areas having a need for affordable low-income rental housing due to prepayment of loans made or insured under this section.
.
Conforming amendment
Section 537(b)(1) of
the Housing Act of 1949 (42 U.S.C. 1490p–1(b)(1)) is amended by inserting
before the semicolon the following: and to administer the preservation
program under section 545
.
Regulations
The Secretary of Agriculture shall issue proposed regulations to carry out the amendments made by this title not later than the expiration of the 90-day period beginning upon the date of the enactment of this Act, and shall issue final regulations to carry out the amendments made by this title not later than the expiration of the 180-day period beginning upon such date of enactment.