LALSHAC 2000 HUD MULTIFAMILY HOUSING WORKING GROUP RELEVANT RECENT STATUTES
I. Prepayment Statutes A. Prepayment: 1998 Authorization and Federal Notice Requirement 112 STAT. 2487 PUBLIC LAW 105-276--OCT. 21, 1998 CLARIFICATION OF OWNER'S RIGHT TO PREPAY SEC. 219. (a) PREPAYMENT RIGHT.--Notwithstanding section 211 of the Housing and Community Development Act of 1987 or section 221 of the Housing and Community Development Act of 1987 (as in effect pursuant to section 604(c) of the Cranston-Gonzalez National Affordable Housing Act), subject to subsection (b), with respect to any project that is eligible low-income housing (as that term is defined in section 229 of the Housing and Community Development Act of 1987) --112 STAT. 2488 PUBLIC LAW 105-276--OCT. 21, 1998 (1) the owner of the project may prepay, and the mortgagee may accept prepayment of, the mortgage on the project, and (2) the owner may request voluntary termination of a mortgage insurance contract with respect to such project and thecontract may be terminated notwithstanding any requirements under sections 229 and 250 of the National Housing Act. (b) CONDITIONS.--Any prepayment of a mortgage or termination of an insurance contract authorized under subsection (a) may be made-- (1) only to the extent that such prepayment or termination is consistent with the terms and conditions of the mortgage on or mortgage insurance contract for the project; (2) only if the owner of the project involved agrees not to increase the rent charges for any dwelling unit in the project during the 60-day period beginning upon such prepayment or termination; and (3) only if the owner of the project provides notice of intent to prepay or terminate, in such form as the Secretary of Housing and Urban Development may prescribe, to each tenant of the housing, the Secretary, and the chief executive officer of the appropriate State or local government for the jurisdiction within which the housing is located, not less than 150 days, but not more than 270 days, before such prepayment or termi-nation, except that such requirement shall not apply to a prepayment or termination that- (A) occurs during the 150-day period immediately fol-lowing the date of the enactment of this Act; (B) is necessary to effect conversion to ownership by a priority purchaser (as defined in section 231(a) of the Low-Income Housing Preservation and Resident Ownership Act of 1990 (12 U.S.C. 4120(a)), or (C) will otherwise ensure that the project will continue to operate, at least until the maturity date of the loan or mortgage, in a manner that will provide rental housing on terms at least as advantageous to existing and future tenants as the terms required by the program under which the loan or mortgage was made or insured prior to the proposed prepayment or termination. B. Prepayment: Section 250 of the National Housing Act (enacted 1983), 12 USC Sec. 1715z-15 § 1715z-15. Limitation on prepayment of mortgages on multifamily rental housing (a) Acceptance of offer to prepay; qualifications During any period in which an owner of a multifamily rental housing project is required to obtain the approval of the Secretary for prepayment of the mortgage, the Secretary shall not accept an offer to prepay the mortgage on such project or permit a termination of an insurance contract pursuant to section 1715t of this title unless-- (1) the Secretary has determined that such project is no longer meeting a need for rental housing for lower income families in the area; (2) the Secretary (A) has determined that the tenants have been notified of the owner's request for approval of a prepayment; (B) has provided the tenants with an opportunity to comment on the owner's request; and (C) has taken such comments into consideration; and (3) the Secretary has ensured that there is a plan for providing relocation assistance for adequate, comparable housing for any lower income tenant who will be displaced as a result of the prepayment and withdrawal of the project from the program. (b) Approval prior to foreclosure A mortgagee may foreclose the mortgage on, or acquire by deed in lieu of foreclosure, any eligible low-income housing project (as such term is defined in section 4119 of this title) only if the mortgagee also conveys title to the project to the Secretary in connection with a claim for insurance benefits. (c) "Lower income families" defined For purposes of this section, the term "lower income families" has the meaning given such term in section 1437a(b)(2) of Title 42. II. Restrictions on HUD's Authority to Approve Sales of HUD-Subsidized HUD-held Mortgages or Properties Subject to HUD-held Mortgages (12 USC Sec. 1701z-11(k), enacted 2/5/88)) 12 USC Sec. 1701z-11(k) Mortgage and project sales (1) In general The Secretary may not approve the sale of any loan or mortgage held by the Secretary (including any loan or mortgage owned by the Government National Mortgage Association) on any subsidized project or formerly subsidized project, unless such sale is made as part of a transaction that will ensure that such project will continue to operate at least until the maturity date of such loan or mortgage, in a manner that will provide rental housing on terms at least as advantageous to existing and future tenants as the terms required by the program under which the loan or mortgage was made or insured prior to the assignment of the loan or mortgage on such project to the Secretary. (2) Sale of certain projects The Secretary may not approve the sale of any subsidized project- (A) that is subject to a mortgage held by the Secretary, or (B) if the sale transaction involves the provision of any additional
subsidy funds by the Secretary or a recasting of the mortgage, unless such
sale is made as part of a transaction that will ensure that the project
will continue to operate, at least until the maturity date of the loan
or mortgage, in a manner that will provide rental housing on terms at least
as advantageous to existing and future tenants as the terms required by
the program under which the loan or mortgage was made or insured prior
to the proposed sale of the project.
III. The "Enhanced Voucher" Statute (42 USC Sec. 1437f(t), enacted 1999, amended 2000). This does not include amendment made by Secs. 205 (authorizing HUD to establish "reasonable limits" on EV payment standard and 228 (expanded eligibility for prior opt-outs) of PL 106-377 (10/27/00). See those provisions at end of this section. [42 USC Sec. 1437f] (t) Enhanced vouchers (1) In general Enhanced voucher assistance under this subsection for a family shall be voucher assistance under subsection (o), except that under such enhanced voucher assistance- (A) subject only to subparagraph (D), the assisted family shall pay as rent no less than the amount the family was paying on the date of the eligibility event for the project in which the family was residing on such date; (B) 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, 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); (C) subparagraph (B) of this paragraph shall not apply and the payment standard for the dwelling unit occupied by the family shall be determined in accordance with subsection (o) if- (i) the assisted family moves, at any time, from such project; or (ii) the voucher is made available for use by any family other than the original family on behalf of whom the voucher was provided; and (D) if the income of the assisted family declines to a significant extent, the percentage of income paid by the family for rent shall not exceed the greater of 30 percent or the percentage of income paid at the time of the eligibility event for the project. (2) Eligibility event For purposes of this subsection, the term "eligibility event" means, with respect to a multifamily housing project, the prepayment of the mortgage on such housing project, the voluntary termination of the insurance contract for the mortgage for such housing project, the termination or expiration of the contract for rental assistance under section 8 of the United States Housing Act of 1937 for such housing project, or the transaction under which the project is preserved as affordable housing, that, under paragraphs (3) and (4) of section 515(c), section 524(d) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), section223(f) of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (12 U.S.C. 4113(f)), or section 201(p) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z-1a(p)), results in tenants in such housing project being eligible for enhanced voucher assistance under this subsection. (3) Treatment of enhanced vouchers provided under other authority (A) In general Notwithstanding any other provision of law, any enhanced voucher assistance provided under any authority specified in subparagraph (B) shall (regardless of the date that the amounts for providing such assistance were made available) be treated, and subject to the same requirements, as enhanced voucher assistance under this subsection. (B) Identification of other authority The authority specified in this subparagraph is the authority under- (i) the 10th, 11th, and 12th provisos under the "Preserving Existing Housing Investment" account in title II of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 (Public Law 104-204; 110 Stat. 2884), pursuant to such provisos, the first proviso under the "Housing Certificate Fund" account in title II of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1998 (Public Law 105-65; 111 Stat. 1351), or the first proviso under the "Housing Certificate Fund" account in title II of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999 (Public Law 105-276; 112 Stat. 2469); and (ii) paragraphs (3) and (4) of section 515(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note), as in effect before the enactment of this Act. (4) Authorization of appropriations There are authorized to be appropriated for each of fiscal years 2000,
2001, 2002, 2003, and 2004 such sums as may be necessary for enhanced voucher
assistance under this subsection.
Changes from FY '01 HUD Appropriations law, Pub. L. No 106-377: 1) Sec. 205 (10/27/00), allowing HUD to set "reasonable limits" on EV payment standards: MAXIMUM PAYMENT STANDARD FOR ENHANCED VOUCHERS SEC. 205. Section 8(t)(1)(B) of the United States Housing Act of 1937 is amended by inserting ''and any other reasonable limit pre-scribed by the Secretary'' immediately before the semicolon. 2) Sec. 228, expanding eligibility for opt-outs prior to 10/20/99, back to 10/1/96: USE OF SECTION 8 VOUCHERS FOR OPT-OUTS SEC. 228. Section 8(t)(2) of the United States Housing Act of 1937 is amended by inserting after ''contract for rental assistance under section 8 of the United States Housing Act of 1937 for suchhousing project'' the following: ''(including any such termination or expiration during fiscal years after fiscal year 1996 prior to the effective date of the Departments of Veterans Affairs and Housing andUrban Development, and Independent Agencies Appropriations Act, 2001)''. IV. The Section 8 Notice Statute (42 USC Sec. 1437f(c)(8), as amended 10/20/99): (8)(A) Not less than one year before termination of any contract under which assistance payments are received under this section, other than a contract for tenant-based assistance under this section, an owner shall provide written notice to the Secretary and the tenants involved of the proposed termination. The notice shall also include a statement that, if the Congress makes funds available, the owner and the Secretary may agree to a renewal of the contract, thus avoiding termination, and that in the event of termination 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 is likely to include the dwelling unit in which they currently reside. Any contract covered by this paragraph that is renewed may be renewed for a period of up to 1 year or any number or years, with payments subject to the availability of appropriations for any year. (B) In the event the owner does not provide the notice required, the owner may not evict the tenants or increase the tenants' rent payment until such time as the owner has provided the notice and 1 year has elapsed. The Secretary may allow the owner to renew the terminating contract for a period of time sufficient to give tenants 1 year of advance notice under such terms and conditions as the Secretary may require. (C) Any notice under this paragraph shall also comply with any additional requirements established by the Secretary. (D) For purposes of this paragraph, the term "termination" means the expiration of the assistance contract or an owner's refusal to renew the assistance contract, and such term shall include termination of the contract for business reasons. (E) Redesignated (D) (9) Redesignated (8) (10) Repealed. Pub.L. 105-276, Title V, § 549(a)(1)(A), Oct. 21,
1998, 112 Stat. 2607
V. The Property Disposition "Deregulation" Statute (12 USC Sec. 1715z-11a, enacted 1996 and amended annually since then) § 1715z-11a. Authority of Secretary to manage and dispose of multifamily properties and mortgages During fiscal year 1997 and fiscal years thereafter, the Secretary may manage and dispose of multifamily properties owned by the Secretary, including, for fiscal years 1997, 1998, 1999, and 2000, the provision of grants and loans from the General Insurance Fund (12 U.S.C. 1735c) for the necessary costs of rehabilitation, demolition, or construction on the properties (which shall be eligible whether vacant or occupied), and multifamily mortgages held by the Secretary on such terms and conditions as the Secretary may determine, notwithstanding any other provision of law. Amendment By FY '01 HUD Appropriations law: Pub. L. No. 106-377, Sec. 204 (10/27/00): ENHANCED DISPOSITION AUTHORITY SEC. 204. Section 204 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997, is amended by striking ''and 2000'' and inserting ''2000, and thereafter''.
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