§4110 — Title 12 Banks and Banking | U.S. Code

Summary

Owners who file a second notice saying they want to sell low-income housing must first offer the buildings to qualified buyers, and the Secretary must make rules to tell those buyers the housing is for sale and must consider federal cost limits when offering incentives. For 12 months after that second notice, the owner can only talk or sell to "priority purchasers" (buyers given first chance). The sale price cannot be higher than the housing’s preservation value. A buyer or owner must submit a plan of action when a real offer is accepted. Priority buyers can file a written notice of interest in the form the Secretary requires, and the Secretary has 30 days to tell them what federal help is available. The owner must give appropriate information about the housing. If no acceptable offer is made and accepted in that 12-month period, the owner then has a 3-month window to sell only to "qualified purchasers" (buyers who meet the rules). Resident councils that buy must meet the homeownership program rules; other buyers must meet the approval criteria. If money is available from Congress, the Secretary must help approved buyers enough to cover buying at preservation value, pay mortgage and rehab loan debt, cover operating costs and reserves, and in some cases pay oversight costs. Buyers may get an 8 percent annual return on real cash they put in. Priority buyers can be reimbursed for reasonable transaction costs. Resident homeownership programs can get money for training, counseling, fees, and relocation costs. The Secretary may use the listed incentives to help, and for priority buyers a per-unit grant cannot be more than the present value of the next 10 years of projected fair market rents (or longer if needed).

Title 12, §4110

Banks and Banking — Source: USLM XML via OLRC

(a)With respect to any eligible low-income housing for which an owner has submitted a second notice of intent under section 4106(d) of this title to transfer the housing to a qualified purchaser, the owner shall offer the housing for transfer to qualified purchasers as provided in this section. The Secretary shall issue regulations describing the means by which potential qualified purchasers shall be notified of the availability of the housing for sale. The Secretary shall take into account the Federal cost limits under section 4105(a) of this title for the housing when providing incentives under section 4109(b)(2) and (b)(3) of this title (pursuant to subsection (d)(3) of this section).

(b)(1)For the 12-month period beginning on the receipt by the Secretary of a second notice of intent under section 4106(d) of this title with respect to such housing, the owner may offer to sell and negotiate a sale of the housing only with priority purchasers. The negotiated sale price may not exceed the preservation value of the housing determined under section 4103(b)(2) of this title. The owner or the purchaser shall submit a plan of action under section 4107 of this title for any sale under this subsection, which shall include any request for assistance under this section, upon the acceptance of any bona fide offer meeting the requirements of this paragraph.

(2)During such period, priority purchasers may submit written notice to the Secretary stating their interest in acquiring the housing. Such notice shall be made in the form and include such information as the Secretary may prescribe.

(3)Within 30 days of receipt of an expression of interest by a priority purchaser, the Secretary shall provide such purchaser with information on the assistance available from the Federal Government to facilitate a transfer and the owner shall provide appropriate information on the housing, as determined by the Secretary.

(c)If no bona fide offer to purchase any eligible low-income housing subject to this section that meets the requirements of subsection (b) is made and accepted during the period under such subsection, during the 3-month period beginning upon the expiration of the 12-month period under subsection (b)(1), the owner of the housing may offer to sell and may sell the housing only to qualified purchasers. The negotiated sale price may not exceed the preservation value of the housing determined under section 4103(b)(2) of this title. The owner or purchaser shall submit a plan of action under section 4107 of this title for any sale under this subsection, which shall include any request for assistance under this section, upon the acceptance of any bona fide offer meeting the requirements of this paragraph.11 So in original. Probably should be “subsection.”

(d)(1)If the qualified purchaser is a resident council, the Secretary may not approve a plan of action for assistance under this section unless the council’s proposed resident homeownership program meets the requirements under section 4116 of this title. For all other qualified purchasers, the Secretary may not approve the plan unless the Secretary finds that the criteria for approval under section 4112 of this title have been satisfied.

(2)Subject to the availability of amounts approved in appropriations Acts, the Secretary shall, for approvable plans of action, provide assistance sufficient to enable qualified purchasers (including all priority purchasers other than resident councils acquiring under the homeownership program authorized by section 4116 of this title) to—

(A)acquire the eligible low-income housing from the current owner for a purchase price not greater than the preservation equity of the housing;

(B)pay the debt service on the federally-assisted mortgage covering the housing;

(C)pay the debt service on any loan for the rehabilitation of the housing;

(D)meet project operating expenses and establish adequate reserves for the housing, and in the case of a priority purchaser, meet project oversight costs;

(E)receive a distribution equal to an 8 percent annual return on any actual cash investment (from sources other than assistance provided under this title 22 See References in Text note below.) made to acquire or rehabilitate the project;

(F)in the case of a priority purchaser, receive a reimbursement of all reasonable transaction expenses associated with the acquisition, loan closing, and implementation of an approved plan of action; and

(G)in the case of an approved resident homeownership program, cover the costs of training for the resident council, homeownership counseling and training, the fees for the nonprofit entity or public agency working with the resident council and costs related to relocation of tenants who elect to move.

(3)(A)For all qualified purchasers of housing under this subsection, the Secretary may provide assistance for an approved plan of action in the form of 1 or more of the incentives authorized under section 4109(b) of this title, except that the incentive under such section 4109(b)(7) of this title may include an acquisition loan under section 1715z–6(f) 2 of this title.

(B)Where the qualified purchaser is a priority purchaser, the Secretary may provide assistance for an approved plan of action (in the form of a grant) for each unit in the housing in an amount, as determined by the Secretary, that does not exceed the present value of the total of the projected published fair market rentals for existing housing (established by the Secretary under section 1437f(c) of title 42) for the next 10 years (or such longer period if additional assistance is necessary to cover the costs referred to in paragraph (2)).

Notes & Related Subsidiaries

Editorial Notes

References in Text

This title, referred to in subsec. (d)(2)(E), means title II of Pub. L. 100–242, as amended by Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4249, known as the Low-Income Housing Preservation and Resident Homeownership Act of 1990, which is classified principally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 4101 of this title and Tables. section 1715z–6(f) of this title, referred to in subsec. (d)(3)(A), was repealed by Pub. L. 104–204, title II, Sept. 26, 1996, 110 Stat. 2885.

Amendments

1992—Subsec. (d)(2). Pub. L. 102–550, § 307(a), inserted “(including all priority purchasers other than resident councils acquiring under the homeownership program authorized by section 4116 of this title)” after “purchasers”. Subsec. (d)(2)(D). Pub. L. 102–550, § 307(b), inserted before semicolon at end “, and in the case of a priority purchaser, meet project oversight costs”. Subsec. (d)(2)(E), (F). Pub. L. 102–550, § 307(c), (d), amended subpars. (E) and (F) generally. Prior to amendment, subpars. (E) and (F) read as follows: “(E) receive an adequate return (as determined by the Secretary) on any actual cash investment made to acquire the project; “(F) in the case of a priority purchaser, receive an adequate reimbursement for transaction expenses relating to acquisition of the housing, subject to approval by the Secretary; and”. Subsec. (d)(3)(A). Pub. L. 102–550, § 307(e), struck out “any residual receipts for the housing transfered [sic] to the selling owner shall be deducted from the sale price of the housing under subsection (b) or (c) of this section and” after “except that”.

§4110 Incentives for Transfer to Qualified Purchasers