§4108 Prepayment and Voluntary Termination

Summary

The Secretary may allow a plan that ends low-income rules when an owner prepays the mortgage or ends mortgage insurance only after a written decision showing the plan will not hurt current tenants or the local housing market. The decision must show the plan will not increase tenant hardship. Rent for any current tenant cannot go above 30% of their monthly adjusted income, and yearly rent increases cannot be more than 10% (whichever is lower). For tenants already paying more than 30%, yearly increases cannot exceed the rise in the Consumer Price Index or 10% (whichever is lower). The plan also must not force tenants out without good cause unless similar affordable housing is readily available (decided without counting federal housing help). There must also be enough vacant, comparable housing so the change won’t reduce decent, affordable housing, limit access to jobs, or hurt housing chances for minorities where the property is. The Secretary must put the findings in writing with analysis and proof. The Secretary must make rules about how to decide these things, what evidence is needed, and the standards to use. If a plan fails these tests, the Secretary will reject it, the owner’s prior notice won’t count, and the owner can file a new notice to try again.