§4122 Preemption of State and Local Laws

Summary

States and local governments cannot make or enforce laws that stop owners of eligible low-income housing from prepaying the mortgage or ending certain federal insurance, that keep owners from getting the allowed annual return, or that block the incentives the federal rules allow (for example, raising rents, selling the building, getting secondary loans, or using money from those actions). They also cannot make rules that only apply to buildings after the owner has prepaid the mortgage or ended the insurance. Any state law that conflicts with these rules is not effective to that extent. Laws that do not conflict are still allowed. That includes general building and zoning rules, health, safety, and habitability standards, rent control, or rules about converting rentals to condos or co-ops, so long as they apply to both federally assisted and non-assisted housing. Private contracts made before November 28, 1990 that limit prepayment or ending insurance remain valid.