§4114 Permissible Prepayment or Voluntary Termination and Modification of Commitments

Summary

An owner may end the low‑income rent rules by prepaying the mortgage or by voluntarily terminating those restrictions, as long as the owner follows the required prepayment rules and one of these things happened: the federal housing official approved a plan to help the owner but did not give the approved help within 15 months of approval; the official approved a plan for housing that already could have been prepaid, but did not give the help before the earlier of (a) two months after the start of the next fiscal year or (b) six months after approval; the official approved a plan for other eligible housing, but did not give the help before the earlier of (a) two months after the start of the next fiscal year or (b) nine months after approval; or the owner tried to sell to a qualified buyer under the approved process, followed the rules, and got no real offers in the allowed time. When federal rental assistance is involved, the housing agency may sign a contract (depending on future funding) to extend that rental help so an approved plan can work. The contract and plan must say that if the agency cannot extend the rental help or cannot create a new package of incentives that matches the original, then at the owner’s request the agency will, within legal limits, change any binding promises that depend on that rental help and allow the owner to prepay the mortgage and end the plan and use restrictions — but only if the owner agrees in writing to follow the required prepayment rules.