§4122 — Title 12 Banks and Banking | U.S. Code

Summary

States and local governments must not make or enforce laws that stop owners of eligible low-income housing from prepaying the mortgage described in section 4119(1) or from voluntarily ending an insurance contract under section 1715t, that keep an owner from getting the annual return allowed by section 4104, that conflict with the rules in this subchapter or block incentives (like higher rents, transfers, secondary financing, or using proceeds), or that apply only to properties where the owner already prepaid or ended the insurance. Laws that do not conflict with these rules are still allowed, for example general building codes, zoning, health and safety rules, rent control, or condo conversion rules if they apply equally to housing with and without federal assistance. Contracts made before November 28, 1990 that limit prepayment or insurance termination remain in effect.

Title 12, §4122

Banks and Banking — Source: USLM XML via OLRC

(a)No State or political subdivision of a State may establish, continue in effect, or enforce any law or regulation that—

(1)restricts or inhibits the prepayment of any mortgage described in section 4119(1) of this title (or the voluntary termination of any insurance contract pursuant to section 1715t of this title) on eligible low income housing;

(2)restricts or inhibits an owner of such housing from receiving the authorized annual return provided under section 4104 of this title;

(3)is inconsistent with any provision of this subchapter, including any law, regulation, or other restriction that limits or impairs the ability of any owner of eligible low income housing to receive incentives authorized under this subchapter (including authorization to increase rental rates, transfer the housing, obtain secondary financing, or use the proceeds of any of such incentives); or

(4)in its applicability to low-income housing is limited only to eligible low-income housing for which the owner has prepaid the mortgage or terminated the insurance contract.

(b)This section shall not prevent the establishment, continuing in effect, or enforcement of any law or regulation of any State or political subdivision of a State not inconsistent with the provisions of this subchapter, such as any law or regulation relating to building standards, zoning limitations, health, safety, or habitability standards for housing, rent control, or conversion of rental housing to condominium or cooperative ownership, to the extent such law or regulation is of general applicability to both housing receiving Federal assistance and nonassisted housing. This section shall not preempt, annul, or alter any contractual restrictions or obligations existing before November 28, 1990, that prevent or limit an owner of eligible low-income housing from prepaying the mortgage on the housing (or terminating the insurance contract on the housing).

Editorial Notes

Amendments

1992—Subsec. (b). Pub. L. 102–550 substituted “, such as any law or regulation” for “and” after “subchapter”.

§4122 Preemption of State and Local Laws

Summary

Title 12, §4122

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata