Preservation Outline of Authorities and Information
NHLP sponsors an e-mail discussion group on preservation, and sends this group a periodic e-newsletter of significant developments. Here are the first two newsletters: NHLP Preservation e-News #1 (Nov. 2002) and NHLP Preservation enNews #2 (Dec. 2002). If you have an ongoing interest in working on preservation of HUD assisted housing and would like to join the discussion group, send an e-mail with your contact information, including the name of any organization, to Amy Siemens <ASiemens@nhlp.org>. Comments on Draft HUD Occupancy Handbook 4350.3 submitted by National Alliance of HUD Tenants (NAHT) and the Housing Justice Network/National Housing Law Project. Download in PDF WordPerfect or Microsoft Word format The text of the Draft HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs" is posted on this site here. . Prepayment of HUD-subsidized mortgages Description: In 1990, Congress enacted a federal preservation program designed to preserve federally assisted housing as affordable housing for low- and moderate-income households by providing financial incentives to owners and financing purchases by nonprofits and tenant organizations. Congress first authorized unrestricted prepayment of many federally-subsidized mortgages in 1996, and has provided "enhanced vouchers" to most affected residents through annual appropriations Acts and general authority enacted in 1999. Currently, owners must give 150 days advance notice of prepayment. While the Title VI Low-Income Housing Preservation and Resident Homeownership Act ("LIHPRHA") has not been repealed, Congress short-funded the program beginning in 1996 and zero-funded the program in FY ‘98, and this trend has continued up to the present, limiting its funding to replacement vouchers. For more information see: HUD Housing Programs: Tenants’ Rights and 1998 Supplement, Sec. 15.3.1. Statutes Pub. L. No. 105-276, §219, 112 Stat. 2461, 2487 (Oct. 21, 1998) (authority for prepayments of "eligible low-income housing" upon giving HUD, tenants and local government at least 150 days, but no more than 270 days written notice). [pdf] Section 250 of the National Housing Act, codified at 12 U.S.C. §1715z-15 (standards and procedures governing prepayments of other multifamily mortgages requiring HUD approval, usually those with other use restrictions). [wpd] Section 8(t) of the United States Housing Act, codified at 42 U.S.C. §1437f(t), enacted by Pub. L. No. 106-74, §538, 113 Stat.1122 (Oct. 20, 1999) (authority for enhanced vouchers, issued to eligible tenants after prepayment). For more on enhanced vouchers and amendments to this statute, see the Enhanced Vouchers section. [wpd] Note: While the Title VI Low-Income Housing Preservation and Resident Homeownership Act of 1990 ("LIHPRHA", codified at 12 U.S.C. §4101 et seq.) has not been repealed, Congress short-funded the program beginning in 1996 and zero-funded the program in FY ‘98, and this trend has continued up to the present. Note: While the Emergency Low-Income Housing Preservation Act of 1987 (referred to as "ELIHPA" or "Title II"), Pub. L. No. 100-242 §§ 261-263, 101 Stat. 1877 (1988), as amended by Pub. L. No. 100-628, §§ 1021-1027, 102 Stat. 3270 (1988), codified at 12 U.S.C.A. § 1715l Note ("Preservation of Low Income Housing") was replaced by LIHPRHA, the statute remains relevant because many owners executed preservation plans pursuant to its terms. Older statutes re prepayments:
Regulations: 24 C.F.R. Part 248, Subpart B (provides guidance on prepayment limitations, required notice, appraisals, plans of action, criteria for HUD approval of prepayment, incentives to extend low-income use, assistance for displaced tenants, and other issues relating to prepayment under the Title VI Low-Income Housing Preservation and Resident Homeownership Act of 1990 ("LIHPRHA", codified at 12 U.S.C. §4101 et seq.). Note: While the Title VI Low-Income Housing Preservation and Resident Homeownership Act of 1990 ("LIHPRHA", codified at 12 U.S.C. §4101 et seq.) has not been repealed, Congress short-funded the program beginning in 1996 and zero-funded the program in FY ‘98, and this trend has continued up to the present. Thus, while these regulations remain unchanged, they are essentially dormant until such time as Congress sees fit to re-fund the program. 24 C.F.R. Part 248, Subparts A and C are generally no longer relevant, but do provide guidance on prepayments and plans of action for those few owners to whom the Emergency Low Income Preservation Act of 1987 (Pub. L. No. 100-242 §§ 261-263, 101 Stat. 1877 (1988), as amended by Pub. L. No. 100-628, §§ 1021-1027, 102 Stat. 3270 (1988), codified at 12 U.S.C.A. § 1715l Note ("Preservation of Low Income Housing") applies. Note: No regulations exist for Pub. L. No. 105-276, §219, 112 Stat. 2461, 2487 (Oct. 21, 1998) or for Section 250 of the National Housing Act, codified at 12 U.S.C. §1715z-15. HUD Handbooks: 4350.6 Processing Plans of Action Under the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (4/10/92, with changes through CHG-4 8/7/95). See note above regarding LIHPRHA implementation. While this handbook remains unchanged, it is not used so long as the preservation program is not funded. [HUD Handbooks may be accessed through <www.hudclips.org/sub_nonhud/cgi/hudclips.cgi> ] Notices and Other Administrative Issuances: HUD, Section 8 Renewal Policy Guide (Jan. 19, 2001) The document posted here is a version of the Guide as amended through November 2001. Check HUD's web site for any revisions. This guide explicitly supercedes notices H 99-36. HUD Notice H00-26, "Prepayment of Direct Loans on Section 202 and 202/8 Projects with Inclusion of FHA Mortgage Insurance Guidelines" (Dec. 11, 2000).[WPD] See Enhanced Voucher portion of this outline for notices related to the administration of these vouchers for tenants after prepayment. HUD Notice H 99-36 "Project-based Section 8 Contracts Expiring in Fiscal Year 2000", App. 3E (Dec. 29, 1999) (explicitly superceded by Section 8 Renewal Guide, above). HUD Notice H 99-8 "Revision to Notice H 98-34 (HUD) on Project-based Section 8 Contracts Expiring in Fiscal Year 1999" (May 27, 1999) (explicitly superceded by Section 8 Renewal Guide, above). [HUD Notices also may be accessed through <www.hudclips.org/sub_nonhud/cgi/hudclips.cgi> ] Websites: National Housing Law Project - www.nhlp.org National Housing Trust - www.nhtinc.org National Low-Income Housing Coalition Website - www.nlihc.org/marktomarket HUD - www.hud.gov/mfh/fha/pre. New HUD data on Section 8 projects (except Mod Rehabs) compiled from its various information systems is now available at: http://www.hud.gov/fha/mfh/mfhdiscl.html HUD’s Office of Multifamily Housing Assistance Restructuring (OMHAR) - www.hud.gov/omhar - has some data on project filings, rules and guidelines, PAEs, and other helpful information HUDClips - www.hudclips.org/sub_nonhud/cgi/hudclips.cgi . Website has the applicable statutes, regs, Notices, and guidelines Cases: Community Stabilization Project v. Cuomo, No. 00-1761 (D. Minn, filed Sept. 2000) (prepayment of 221(d)(3) mortgage; claims for violation of Section 250, 12 U.S.C. §1701z-11(k)(1), and Fair Housing Act) Hopkins Villagers v. Cuomo, No. 98-1794 (D. Minn., filed 1998) (available from www.mhponline.org , use facts and research link, then Preservation/prepayment ) Yarbrough v. Cuomo, No. 98-933 (D. Minn, filed 1998) (challenging prepayment of HUD held-mortgage on troubled property as violation of 12 U.S.C. 1701z-11 and Fair Housing laws) ( available from "www.mhponline.org ", use "facts and research" link, then "Preservation/prepayment") Browning v. Martinez (Audobon Park) (S. D. Ohio, filed 2001) (challenging HUD’s issuance of only 47 enhanced vouchers for a 122 unit § 236 project which prepaid its mortgage) Kenneth Arms Tenants’ Association v. Martinez, No. 01 CV 832 LKK JFM (E.D.Ca. filed May 2, 2001) (challenging prepayment, opt-out, and sale transaction as violative of federal and state laws, including notice statutes and fair housing duties) Hines v. Charleston Hous. Auth., No. 1:01CV00070 CDP (E.D. Mo. filed April, 2001) (challenging PHA’s threatened Section 8 opt-out, prepayment and demolition plan of RHS-financed property as violative of federal laws and contracts, including notice statutes, prepayment statutes, and fair housing duties) Topa Equities v. City of Los Angeles, No. CV 00-10455 GHK (RNBx) (C.D. Ca. pending June 2001) (owner’s federal preemption challenge to application of local rent control law in wake of prepayment of Section 236 project) Good Haven Apartments (Dallas, TX, challenging prepayment by nonprofit owner as violation of Section 250, other statutory and Fair Housing Act claims?) Lifgren v. Yeutter, 767 F. Supp. 1473 (D. Minn. 1991) (upholding statutory restrictions on RHS Section 515 prepayments, and ordering reinstatement of loan) Gillanders v. Smith, No. S-86-867 (E.D. Ca. filed 1986) (statutory and Fair Housing challenge to FmHA prepayment) (Clearinghouse No. 41,556). State and Local Resources: Since federal laws no longer guarantee preservation of federally assisted use-restricted properties, states and localities have provided further protections for these properties through supplemental laws and policies. See the State and Local Initiatives portion of this outline. Articles: "HUD Multifamily Inventory Awaits Decisions," 27 HOUSING LAW BULLETIN 139 (Sept. 1997). "House and Senate Settle on HUD Funding for FY 1998," 27 HOUSING LAW BULLETIN 156 (Oct. 1997). "Why Does the Section 8 Budget Estimate Keep Changing?", 28 HOUSING LAW BULLETIN 80 (May 1998). "Preservation Crisis Mounts: HUD and Congress Respond" 29 HOUSING LAW BULLETIN 67 (April 1999). "HUD Issues Guidance for FY 2000 Enhanced Vouchers," 30 HOUS. L. BULL. 64 (May 2000). "Senate Considers New Preservation Legislation," 30 HOUS. L. BULL. 103 (July 2000). "HUD Issues Final Rule on Tenant Organizing," 30 HOUS. L. BULL. 113 (Aug. 2000). "California Adopts Improved Notice Requirements for Federal Housing Conversions," 31 HOUS. L. BULL. 14 (Jan. 2001). "Fair Housing Litigation to Prevent the Loss of Federally Assisted Housing: The Duties of Public Housing Authorities and Project Owners (Part One)," 31 HOUS. L. BULL. 73 (April 2001). "Fair Housing Litigation to Prevent the Loss of Federally Assisted Housing: The Duties of Public Housing Authorities and Project Owners (Part Two)," 31 HOUS. L. BULL. 157 (July/Aug.2001). "Opt-out and Prepayment of Four Section 8 Properties Preliminarily Enjoined," 31 HOUS. L. BULL. 180 (July/Aug.2001). |
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