§4109 — Title 12 Banks and Banking | U.S. Code

Summary

The Secretary must, after approving an owner's plan to extend low-income rules for eligible housing and if money is available from Congress, make agreements so the owner can get the annual authorized return (as set in section 4104(a)), pay debt service on the federally-assisted mortgage and any rehab loan, cover project operating costs, and keep adequate reserves. The Secretary must follow the federal cost limits in section 4105(a). To make sure the owner gets that return while rents are phased in under section 4112(a)(2)(E), the Secretary must act in this order: allow access to residual receipt accounts, defer remitting excess rent payments, or allow higher rents under an existing contract under section 1437f of title 42. Agreements may include one or more of eight incentives, such as more residual receipt access; higher rents or extra help under section 1437f; phased rent increases under section 4112; financing or second-mortgage insurance for capital repairs (including section 201 and section 1715z–6); redirecting Interest Reduction Payment subsidies for certain housing; letting owners access some preservation equity; or other incentives allowed by law.

Title 12, §4109

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(a)After approving a plan of action from an owner of eligible low-income housing that includes the owner’s plan to extend the low-income affordability restrictions of the housing, the Secretary shall, subject to the availability of appropriations for such purpose, enter into such agreements as are necessary to enable the owner to receive (for each year after the approval of the plan of action) the annual authorized return for the housing determined under section 4104(a) of this title, pay debt service on the federally-assisted mortgage covering the housing, pay debt service on any loan for rehabilitation of the housing, and meet project operating expenses and establish adequate reserves. The Secretary shall take into account the Federal cost limits under section 4105(a) of this title for the housing when providing incentives under subsection 11 So in original. Probably should be “subsection”. (b)(2) and (3) of this section. The Secretary shall take such actions as are necessary to ensure that owners receive the annual authorized return for the housing determined under section 4104(a) of this title during the period in which rent increases are phased in as provided in section 4112(a)(2)(E) of this title, including (in order of preference) (1) allowing the owner access to residual receipt accounts (pursuant to subsection (b)(1) of this section), (2) deferring remittance of excess rent payments, and (3) providing an increase in rents permitted under an existing contract under section 1437f of title 42 (pursuant to subsection (b)(2) of this section).

(b)Such agreements may include one or more of the following incentives:

(1)Increased access to residual receipts accounts.

(2)Subject to the availability of amounts provided in appropriations Acts—

(A)an increase in the rents permitted under an existing contract under section 1437f of title 42, or

(B)additional assistance under section 1437f of title 42 or an extension of any project-based assistance attached to the housing; and

(3)An increase in the rents on units occupied by current tenants as permitted under section 4112 of this title.

(4)Financing of capital improvements under section 201 of the Housing and Community Development Amendments of 1978.

(5)Financing of capital improvements through provision of insurance for a second mortgage under section 1715z–6 of this title.

(6)In the case of housing defined in section 4119(1)(A)(iii) of this title, redirection of the Interest Reduction Payment subsidies to a second mortgage.

(7)Access by the owner to a portion of the preservation equity in the housing through provision of insurance for a second mortgage loan insured under section 1715z–6(f) 22 See References in Text note below. of this title or a non-insured mortgage loan approved by the Secretary and the mortgagee.

(8)Other incentives authorized in law.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 201 of the Housing and Community Development

Amendments

of 1978, referred to in subsec. (b)(4), is section 201 of Pub. L. 95–557, title II, Oct. 31, 1978, 92 Stat. 2084, which enacted section 1715z–1a of this title and amended section 1715z–1 of this title. section 1715z–6(f) of this title, referred to in subsec. (b)(7), was repealed by Pub. L. 104–204, title II, Sept. 26, 1996, 110 Stat. 2885.

Amendments

1992—Subsec. (a). Pub. L. 102–550 inserted “(for each year after the approval of the plan of action)” after “receive” and inserted at end “The Secretary shall take such actions as are necessary to ensure that owners receive the annual authorized return for the housing determined under section 4104(a) of this title during the period in which rent increases are phased in as provided in section 4112(a)(2)(E) of this title, including (in order of preference) (1) allowing the owner access to residual receipt accounts (pursuant to subsection (b)(1) of this section), (2) deferring remittance of excess rent payments, and (3) providing an increase in rents permitted under an existing contract under section 1437f of title 42 (pursuant to subsection (b)(2) of this section).”

Statutory Notes and Related Subsidiaries

Study of Projects Assisted Under Flexible Subsidy Program Pub. L. 102–550, title III, § 318, Oct. 28, 1992, 106 Stat. 3772, directed the Secretary to conduct a study of certain housing projects assisted under 12 U.S.C. 1715z–1 or the proviso of 12 U.S.C. 1715l(d)(5) and submit a report to the Congress regarding any findings and conclusions of the study not later than the expiration of the 1-year period beginning on Oct. 28, 1992.

§4109 Incentives to Extend Low-income Use

Summary

Title 12, §4109

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Amendments

Statutory Notes and Related Subsidiaries

Citations & Metadata