§4113 — Title 12 Banks and Banking | U.S. Code

Summary

When the owner prepays the mortgage or cancels mortgage insurance on eligible low-income housing and low-income families are forced to move, those families must get tenant-based rental help if Congress provides the money. Each year HUD must set aside enough funds from its accounts, when available, to pay these housing benefits. HUD will work with local housing agencies to help families find a suitable, affordable place nearby. The owner must pay 50% of each family’s moving costs, unless state or local law requires the owner to pay more. If the owner prepays, tenants who lived there when the owner gave notice must be allowed to stay for 3 years at the same rent (except for increases needed for higher operating costs). An owner can instead help a tenant move to another decent unit for the same 3 years and rent cost, but the tenant must agree to give up the right to stay. These stay-or-relocate rules apply in low-vacancy areas and to tenants with special needs like the elderly or disabled. Owners who keep the property for rent cannot refuse or treat people badly because they get rental help. HUD must distribute help through its regional offices and make sure the total number of affordable units in each region does not drop because of a prepayment. In place of the moving, stay, and non-discrimination rules, eligible families may be offered enhanced vouchers if funds are available; eligible families are low-income households and certain moderate-income households (elderly, disabled, or in low-vacancy areas) living in the housing when the prepayment occurs.

Title 12, §4113

Banks and Banking — Source: USLM XML via OLRC

(a)Each low-income family that is displaced as a result of the prepayment of the mortgage or voluntary termination of an insurance contract on eligible low income housing shall, subject to the availability or 11 So in original. Probably should be “of”. amounts provided under appropriations Acts, receive tenant-based assistance under section 1437f of title 42. To the extent sufficient amounts are made available under appropriations Acts, in each fiscal year the Secretary shall reserve from amounts made available under section 4124(a) of this title or, if necessary, under section 1437c(c) of title 42, such amounts as the Secretary determines are necessary to provide assistance payments for low-income families displaced during the fiscal year.

(b)The Secretary shall coordinate with public housing agencies to ensure that any very low- or low-income family displaced from eligible low-income housing as the result of the prepayment of the mortgage (or termination of the mortgage insurance contract) on such housing is able to acquire a suitable, affordable dwelling unit in the area of the housing from which the family is displaced. The Secretary shall require the owner of such housing to pay 50 percent of the moving expenses of each family relocated, except that such percentage shall be increased to the extent that State or local law of general applicability requires a higher payment by the owner.

(c)(1)Each owner that prepays the mortgage (or terminates the mortgage insurance contract) on eligible low-income housing shall, as provided in paragraph (3), allow the tenants occupying units in such housing on the date of the submission of notice of intent under section 4102 of this title to remain in the housing for a period of 3 years, at rent levels (except for increases necessary for increased operating costs) existing at the time of prepayment.

(2)In any case in which the Secretary requires an owner to allow tenants to occupy units under paragraph (1), an owner may fulfill the requirements of such paragraph by providing such assistance necessary for the tenant to rent a decent, safe, and sanitary unit in another project for the same period and at a rental cost to the tenant not in excess of the rental amount the tenant would have been required to pay in the housing of the owner, except that the tenant must freely agree to waive the right to occupy the unit in the owner’s housing.

(3)The provisions of this subsection shall apply only to—

(A)eligible low income housing located in a low-vacancy area (as such term is defined by the Secretary); and

(B)tenants in any eligible low-income housing in any area who have special needs restricting their ability to relocate (including elderly tenants and tenants with disabilities), as determined under regulations established by the Secretary.

(d)An owner who prepays the mortgage (or terminates the mortgage insurance contract) on eligible low-income housing and maintains the housing for residential rental occupancy may not refuse to rent, refuse to negotiate for the rental of, or otherwise make unavailable or deny the rent of a dwelling unit in such property to any person, or discriminate against any person in the terms, conditions, or privileges of rental of a dwelling (or in the provision of services or facilities in connection therewith), because the person receives assistance under section 1437f of title 42.

(e)In providing assistance under this section, the Secretary shall allocate the assistance on a regional basis through the regional offices of the Department of Housing and Urban Development. The Secretary shall allocate assistance under this section in a manner so that the total number of assisted units in each such region available for occupancy by, and affordable to, lower income families and persons does not decrease because of the prepayment or payment of a mortgage on eligible low-income housing or the termination of an insurance contract on such housing.

(f)(1)In lieu of benefits under subsections (b), (c), and (d), and subject to the availability of appropriated amounts, each family described in paragraph (2) shall be offered enhanced voucher assistance under section 1437f(t) of title 42.

(2)A family described in this paragraph is a family that is—

(A)(i)a low-income family; or

(ii)a moderate-income family that is: (I) an elderly family; (II) a disabled family; or (III) residing in a low-vacancy area; and

(B)residing in eligible low-income housing on the date of the prepayment of the mortgage or voluntary termination of the insurance contract.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1999—Subsec. (f). Pub. L. 106–74 added subsec. (f). 1998—Subsec. (a). Pub. L. 105–276 substituted “tenant-based assistance under section 1437f of title 42” for “assistance under the certificate and voucher programs under section 1437f(b) and 1437f(o)”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1998 AmendmentAmendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as otherwise provided, with provision that Secretary may implement amendment before such date, except to extent that such amendment provides otherwise, and with

Savings Provision

, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of Title 42, The Public Health and Welfare.

§4113 Assistance for displaced tenants