§4109 Incentives to extend low-income use

Summary

When an owner of eligible low-income housing gives a plan to keep the homes affordable and the Secretary approves it, the Secretary must, if money is available, make deals so the owner can get the annual authorized return (under 4104(a)), pay mortgage debt including rehab loans, cover operating costs, and keep proper reserves. The Secretary must follow the federal cost limits in 4105(a) when offering certain incentives. The Secretary must also make sure the owner still gets that annual return while rents are slowly increased under 4112(a)(2)(E). To do that, in this order the Secretary should let the owner use residual receipt accounts (b)(1), delay turning in excess rent payments, or raise rents allowed under an existing contract under 42 U.S.C. 1437f (b)(2). Possible incentives may include access to residual receipts; rent increases or extra project-based help under 42 U.S.C. 1437f; tenant rent increases under 4112; financing for capital repairs under section 201 of the Housing and Community Development Amendments of 1978 or by insuring a second mortgage under 1715z–6; redirecting Interest Reduction Payment subsidies for certain housing under 4119(1)(A)(iii); letting owners take some preservation equity through an insured or approved second mortgage under 1715z–6(f); and other legal incentives.