§1715z–15 — Title 12 Banks and Banking | U.S. Code

Summary

The Secretary must not accept a prepayment or let insurance end on a multifamily rental project unless three things are true. The Secretary finds the project no longer serves the area’s need for lower income rental housing. Tenants were told about the owner’s prepayment request, had a chance to comment, and the Secretary considered their comments. There must be a plan to give relocation help and find adequate, comparable housing for any lower income tenants who will be displaced. A lender may foreclose or take a project by deed in lieu of foreclosure only if the lender also gives the project title to the Secretary when making an insurance claim. The term “lower income families” has the meaning in section 1437a(b)(2) of title 42.

Title 12, §1715z–15

Banks and Banking — Source: USLM XML via OLRC

(a)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)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)For purposes of this section, the term “lower income families” has the meaning given such term in section 1437a(b)(2) of title 42.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1990—Subsec. (b). Pub. L. 101–625, § 602(b), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “In the case of a project assisted under section 1715z–1 of this title or the proviso to section 1715l(d)(5) of this title, section 101 of the Housing and Urban Development Act of 1965, or section 1701q of this title where the owner has the right to prepay the mortgage covering the assisted project without the Secretary’s approval, the Secretary shall give a priority for additional assistance under section 1437f of title 42 and section 201 of the Housing and Community Development

Amendments

of 1978 to tenants and applicants to become tenants of the project, if— “(1) funds to provide such additional assistance are available; and “(2) the Secretary determines that making such additional assistance available to the project is necessary to prevent the owner from prepaying the mortgage.” Subsecs. (c), (d). Pub. L. 101–625, § 602(c), redesignated subsec. (d) as (c) and struck out former subsec. (c) which read as follows: “Any owner of a multifamily rental housing project referred to in subsection (b) of this section who receives additional assistance under section 1437f of title 42 under the priority established in subsection (b) of this section shall— “(1) fully utilize the assistance which is available; “(2) grant a priority to applicants to become tenants who have the lowest incomes; and “(3) maintain the low-income character of the project for a period at least equal to the remaining term of the project mortgage to the extent that assistance is provided.” 1989—Subsec. (a). Pub. L. 101–235 inserted “or permit a termination of an insurance contract pursuant to section 1715t of this title” after second reference to “project”. 1988—Subsec. (a)(1). Pub. L. 100–242 struck out “or that the needs of lower income families in such project can more efficiently and effectively be met through other Federal housing assistance taking into account the remaining time the project could meet such needs” after “families in the area”.

§1715z–15 Limitation on prepayment of mortgages on multifamily rental housing

Summary

Title 12, §1715z–15

Notes & Related Subsidiaries

Editorial Notes

Amendments

Amendments

Citations & Metadata