§4108 Prepayment and Voluntary Termination

Summary

The Secretary can approve a plan to end low-income rules by prepaying a mortgage or ending mortgage insurance only if they write that it will not seriously hurt current tenants. Rents for current tenants must not go above 30 percent of a tenant’s monthly adjusted income, and any yearly rent increase must not be more than 10 percent (use whichever rule is stricter). If a tenant already pays more than 30 percent, their yearly rent rise can’t be more than the increase in the Consumer Price Index or 10 percent, whichever is lower. Tenants cannot be forced to leave without good cause when comparable and affordable housing is not readily available, and that decision must ignore whether federal housing aid could fix the problem. The Secretary must also find enough vacant, comparable housing so the change will not reduce decent, safe, affordable housing for low-income and very low-income people, make it harder for them to find housing near jobs, or hurt housing opportunities for minorities in the area. The Secretary’s written approval must show the analysis and evidence used. The Secretary must make rules for how to decide these things, what evidence is needed, and the criteria to use. If a plan does not meet these requirements, the Secretary must disapprove it, the owner’s notice of intent will not count, and the owner may file a new notice of intent to try again.