§ 1715z-1. — Rental and cooperative housing for lower income families.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715z-1]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-1. Rental and cooperative housing for lower income
families
(a) Authorization for periodic interest reduction payments on behalf of
owner of rental housing project
For the purpose of reducing rentals for lower income families, the
Secretary is authorized to make, and to contract to make, periodic
interest reduction payments on behalf of the owner of a rental housing
project designed for occupancy by lower income families, which shall be
accomplished through payments to morgagees \1\ holding mortgages meeting
the special requirements specified in this section.
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\1\ So in original. Probably should be ``mortgagees''.
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(b) Restrictions on payments; payments with respect to projects financed
under State or local programs; mortgage insurance premium
Interest reduction payments with respect to a project shall only be
made during such time as the project is operated as a rental housing
project and is subject to a mortgage which meets the requirements of,
and is insured under, subsection (j) of this section: Provided, That the
Secretary is authorized to continue making such interest reduction
payments where the mortgage has been assigned to the Secretary: Provided
further, That interest reduction payments may be made with respect to a
mortgage or part thereof on a rental or cooperative housing project
owned by a private nonprofit corporation or other private nonprofit
entity, a limited dividend corporation or other limited dividend entity,
public \2\ entity, or a cooperative housing corporation, which is
financed under a State or local program providing assistance through
loans, loan insurance, or tax abatements, and which may involve either
new or existing construction and which is approved for receiving the
benefits of this section. The term ``mortgage insurance premium'', when
used in this section in relation to a project financed by a loan under a
State or local program, means such fees and charges, approved by the
Secretary, as are payable by the mortgagor to the State or local agency
mortgagee to meet reserve requirements and administrative expenses of
such agency.
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\2\ So in original. Probably should be preceded by ``a''.
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(c) Amount of payments
The interest reduction payments to a mortgagee by the Secretary on
behalf of a project owner shall be in an amount not exceeding the
difference between the monthly payment for principal, interest, and
mortgage insurance premium which the project owner as a mortgagor is
obligated to pay under the mortgage and the monthly payment for
principal and interest such project owner would be obligated to pay if
the mortgage were to bear interest at the rate of 1 per centum per
annum.
(d) Mortgage handling expenses
The Secretary may include in the payment to the mortgagee such
amount, in addition to the amount computed under subsection (c) of this
section, as he deems appropriate to reimburse the mortgagee for its
expenses in handling the mortgage.
(e) Operation of project in accordance with requirements respecting
tenant eligibility and rents prescribed by Secretary
(1) As a condition for receiving the benefits of interest reduction
payments, the project owner shall operate the project in accordance with
such requirements with respect to tenant eligibility and rents as the
Secretary may prescribe. Procedures shall be adopted by the Secretary
for review of tenant incomes at intervals of one year (or at shorter
intervals where the Secretary deems it desirable).
(2) A project for which interest reduction payments are made under
this section and for which the mortgage on the project has been
refinanced shall continue to receive the interest reduction payments
under this section under the terms of the contract for such payments,
but only if the project owner enters into such binding commitments as
the Secretary may require (which shall be applicable to any subsequent
owner) to ensure that the owner will continue to operate the project in
accordance with all low-income affordability restrictions for the
project in connection with the Federal assistance for the project for a
period having a duration that is not less than the term for which such
interest reduction payments are made plus an additional 5 years.
(f) Establishment of basic and fair market rental charges; rental for
dwelling units; separate utility metering; additional assistance
payments for low-income tenants; limitations; amounts; approval
of payments
(1)(A)(i) For each dwelling unit there shall be established, with
the approval of the Secretary, a basic rental charge and fair market
rental charge.
(ii) The basic rental charge shall be--
(I) the amount needed to operate the project with payments of
principal and interest due under a mortgage bearing interest at the
rate of 1 percent per annum; or
(II) an amount greater than that determined under clause
(ii)(I), but not greater than the market rent for a comparable
unassisted unit, reduced by the value of the interest reduction
payments subsidy.
(iii) The fair market rental charge shall be--
(I) the amount needed to operate the project with payments of
principal, interest, and mortgage insurance premium which the
mortgagor is obligated to pay under the mortgage covering the
project; or
(II) an amount greater than that determined under clause
(iii)(I), but not greater than the market rent for a comparable
unassisted unit.
(iv) The Secretary may approve a basic rental charge and fair market
rental charge for a unit that exceeds the minimum amounts permitted by
this subparagraph for such charges only if--
(I) the approved basic rental charge and fair market rental
charges each exceed the applicable minimum charge by the same
amount; and
(II) the project owner agrees to restrictions on project use or
mortgage prepayment that are acceptable to the Secretary.
(v) The Secretary may approve a basic rental charge and fair market
rental charge under this paragraph for a unit with assistance under
section 1437f of title 42 that differs from the basic rental charge and
fair market rental charge for a unit in the same project that is similar
in size and amenities but without such assistance, as needed to ensure
equitable treatment of tenants in units without such assistance.
(B)(i) The rental charge for each dwelling unit shall be at the
basic rental charge or such greater amount, not exceeding the fair
market rental charge determined pursuant to subparagraph (A), as
represents 30 percent of the tenant's adjusted income, except as
otherwise provided in this subparagraph.
(ii) In the case of a project which contains more than 5000 units,
is subject to an interest reduction payments contract, and is financed
under a State or local project, the Secretary may reduce the rental
charge ceiling, but in no case shall the rental charge be below the
basic rental charge set forth in subparagraph (A)(ii)(I).
(iii) For plans of action approved for capital grants under the Low-
Income Housing Preservation and Resident Homeownership Act of 1990 [12
U.S.C. 4101 et seq.] or the Emergency Low Income Housing Preservation
Act of 1987, the rental charge for each dwelling unit shall be at the
minimum basic rental charge set forth in subparagraph (A)(ii)(I) or such
greater amount, not exceeding the lower of: (I) the fair market rental
charge set forth in subparagraph (A)(iii)(I); or (II) the actual rent
paid for a comparable unit in comparable unassisted housing in the
market area in which the housing assisted under this section is located,
as represents 30 percent of the tenant's adjusted income.
(C) With respect to those projects which the Secretary determines
have separate utility metering paid by the tenants for some or all
dwelling units, the Secretary may--
(i) permit the basic rental charge and the fair market rental
charge to be determined on the basis of operating the project
without the payment of the cost of utility services used by such
dwelling units; and
(ii) permit the charging of a rental for such dwelling units at
such an amount less than 30 percent of a tenant's adjusted income as
the Secretary determines represents a proportionate decrease for the
utility charges to be paid by such tenant, but in no case shall
rental be lower than 25 percent of a tenant's adjusted income.
(2) With respect to 20 per centum of the dwelling units in any
project made subject to a contract under this section after August 22,
1974, the Secretary shall make, and contract to make, additional
assistance payments to the project owner on behalf of tenants whose
incomes are too low for them to afford the basic rentals (including the
amount allowed for utilities in the case of a project with separate
utility metering) with 30 per centum of their adjusted income. The
additional assistance payments authorized by this paragraph with respect
to any dwelling unit shall be the amount required to reduce the rental
payment (including the amount allowed for utilities in the case of a
project with separate utility metering) by the tenant to the highest of
the following amounts, rounded to the nearest dollar:
(A) 30 per centum of the tenant's monthly adjusted income;
(B) 10 per centum of the tenant's monthly income; or
(C) if the family is receiving payments for welfare assistance
from a public agency and a part of such payments, adjusted in
accordance with the family's actual housing costs, is specifically
designated by such agency to meet the family's housing costs, the
portion of such payments which is so designated.
Notwithstanding the foregoing provisions of this paragraph, the
Secretary may--
(A) reduce such 20 per centum requirement in the case of any
project if he determines that such action is necessary to assure the
economic viability of the project; or
(B) increase such 20 per centum requirement in the case of any
project if he determines that such action is necessary and feasible
in order to, assure, insofar as is practicable, that there is in the
project a reasonable range in the income levels of tenants, or that
such action is to be taken to meet the housing needs of elderly or
handicapped families.
(3) The Secretary shall utilize amounts credited to the fund
described in subsection (g) of this section for the sole purpose of
carrying out the purposes of section 201 of the Housing and Community
Development Amendments of 1978. No payments may be made from such fund
unless approved in an appropriation Act. No amount may be so approved
for any fiscal year beginning after September 30, 1994.
(4) To ensure that eligible tenants occupying that number of units
with respect to which assistance was being provided under this
subsection immediately prior to November 30, 1983, receive the benefit
of assistance contracted for under paragraph (2), the Secretary shall
offer annually to amend contracts entered into under this subsection
with owners of projects assisted but not subject to mortgages insured
under this section to provide sufficient payments to cover 100 percent
of the necessary rent increases and changes in the incomes of eligible
tenants, subject to the availability of authority for such purpose under
section 1437c(c) of title 42. The Secretary shall take such actions as
may be necessary to ensure that payments, including payments that
reflect necessary rent increases and changes in the incomes of tenants,
are made on a timely basis for all units covered by contracts entered
into under paragraph (2).
(5)(A) In order to induce advances by owners for capital
improvements (excluding any owner contributions that may be required by
the Secretary as a condition for assistance under section 201 of the
Housing and Community Development Amendments of 1978) to benefit
projects assisted under this section, in establishing basic rental
charges and fair market rental charges under paragraph (1) the Secretary
may include an amount that would permit a return of such advances with
interest to the owner out of project income, on such terms and
conditions as the Secretary may determine. Any resulting increase in
rent contributions shall be--
(i) to a level not exceeding the lower of 30 percent of the
adjusted income of the tenant or the published existing fair market
rent for comparable housing established under section 1437f(c) of
title 42;
(ii) phased in equally over a period of not less than 3 years,
if such increase is 30 percent or more; and
(iii) limited to not more than 10 percent per year if such
increase is more than 10 percent but less than 30 percent.
(B) Assistance under section 1437f of title 42 shall be provided, to
the extent available under appropriations Acts, if necessary to mitigate
any adverse effects on income-eligible tenants.
(6) Repealed. Pub. L. 104-99, title IV, Sec. 405(d)(2), Jan. 26,
1996, 110 Stat. 45.
(7) The Secretary shall determine whether and under what conditions
the provisions of this subsection shall apply to mortgages sold by the
Secretary on a negotiated basis.
(g) Collection of excess rental charges; credit to reserve for
additional assistance payments; retention by project owner
(1) The project owner shall, as required by the Secretary,
accumulate, safeguard, and periodically pay the Secretary or such other
entity as determined by the Secretary and upon such terms and conditions
as the Secretary deems appropriate, all rental charges collected on a
unit-by-unit basis in excess of the basic rental charges. Unless
otherwise directed by the Secretary, such excess charges shall be
credited to a reserve used by the Secretary to make additional
assistance payments as provided in paragraph (3) of subsection (f) of
this section.
(2) Notwithstanding any other requirements of this subsection, a
project owner may retain some or all of such excess charges for project
use if authorized by the Secretary. Such excess charges shall be used
for the project and upon terms and conditions established by the
Secretary, unless the Secretary permits the owner to retain funds for
non-project use after a determination that the project is well-
maintained housing in good condition and that the owner has not engaged
in material adverse financial or managerial actions or omissions as
described in section 516 of the Multifamily Assisted Housing Reform and
Affordability Act of 1997. In connection with the retention of funds for
non-project use, the Secretary may require the project owner to enter
into a binding commitment (which shall be applicable to any subsequent
owner) to ensure that the owner will continue to operate the project in
accordance with all low-income affordability restrictions for the
project in connection with the Federal assistance for the project for a
period having a duration of not less than the term of the existing
affordability restrictions plus an additional 5 years.
(3) The Secretary shall not withhold approval of the retention by
the owner of such excess charges because of the existence of unpaid
excess charges if such unpaid amount is being remitted to the Secretary
over a period of time in accordance with a workout agreement with the
Secretary, unless the Secretary determines that the owner is in
violation of the workout agreement.
(h) Rules and regulations
In addition to establishing the requirements specified in subsection
(e) of this section, the Secretary is authorized to make such rules and
regulations, to enter into such agreements, and to adopt such procedures
as he may deem necessary or desirable to carry out the provisions of
this section.
(i) Authorization of appropriations; aggregate amount of contracts;
contracts for assistance payments; income limitations;
availability of amounts for projects approved prior to
rehabilitation and projects for occupancy by elderly or
handicapped families; definitions
(1) There are authorized to be appropriated such sums as may be
necessary to carry out the provisions of this section, including such
sums as may be necessary to make interest reduction payments under
contracts entered into by the Secretary under this section. The
aggregate amount of outstanding contracts to make such payments shall
not exceed amounts approved in appropriation Acts, and payments pursuant
to such contracts shall not exceed $75,000,000 per annum prior to July
1, 1969, which maximum dollar amount shall be increased by $125,000,000
on July 1, 1969, by $150,000,000 on July 1, 1970, by $200,000,000 on
July 1, 1971 and by $75,000,000 on July 1, 1974. The Secretary shall
utilize, to the extent necessary after September 30, 1984, any authority
under this section that is recaptured either as the result of the
conversion of housing projects covered by assistance under subsection
(f)(2) of this section to contracts for assistance under section 1437f
of title 42 or otherwise for the purpose of making assistance payments,
including amendments as provided in subsection (f)(4) of this section,
with respect to housing projects assisted, but not subject to mortgages
insured, under this section that remain covered by assistance under
subsection (f)(2) of this section.
(2) Contracts for assistance payments under this section may be
entered into only with respect to tenants whose incomes do not exceed 80
per centum of the median family income for the area, as determined by
the Secretary with adjustments for smaller and larger families, except
that the Secretary may establish income ceilings higher or lower than 80
per centum of the median for the area on the basis of his findings that
such variations are necessary because of prevailing levels of
construction costs, unusually high or low family incomes, or other
factors.
(3) Not less than 10 per centum of the total amount of contracts for
assistance payments authorized by appropriation Acts to be made after
June 30, 1974, shall be available for use only with respect to
dwellings, or dwelling units in projects, which are approved by the
Secretary prior to rehabilitation.
(4) At least 20 per centum of the total amount of contracts for
assistance payments authorized in appropriation Acts to be made after
June 30, 1974, shall be available for use only with respect to projects
which are planned in whole or in part for occupancy by elderly or
handicapped families. As used in this paragraph, the term ``elderly
families'' means families which consist of two or more persons the head
of which (or his spouse) is sixty-two years of age or over or is
handicapped. Such term also means a single person who is sixty-two years
of age or over or is handicapped. A person shall be considered
handicapped if such person is determined, pursuant to regulations issued
by the Secretary, to have an impairment which (A) is expected to be of
long-continued and indefinite duration, (B) substantially impedes his
ability to live independently, and (C) is of such a nature that such
ability could be improved by more suitable housing conditions.
(j) Insurance of mortgages; definitions; eligibility for insurance;
mortgage requirements; property or project requirements; sale of
individual dwelling units; release of mortgagor from liability
or release of property from lien of mortgage
(1) The Secretary is authorized, upon application by the mortgagee,
to insure a mortgage (including advances on such mortgage during
construction) which meets the requirements of this subsection.
Commitments for the insurance of such mortgages may be issued by the
Secretary prior to the date of their execution or disbursement thereon,
upon such terms and conditions as he may prescribe.
(2) As used in this subsection--
(A) the terms ``family'' and ``families'' shall have the same
meaning as in section 1715l of this title;
(B) the term ``elderly or handicapped families'' shall have the
same meaning as in section 1701q \3\ of this title; and
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\3\ See References in Text note below.
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(C) the terms ``mortgage'', ``mortgagee'', and ``mortgagor''
shall have the same meaning as in section 1707 of this title.
(3) To be eligible for insurance under this subsection, a mortgage
shall meet the requirements specified in subsections (d)(1) and (d)(3)
of section 1715l of this title, except as such requirements are modified
by this subsection. In the case of a project financed with a mortgage
insured under this subsection which involves a mortgagor other than a
cooperative or a private nonprofit corporation or association and which
is sold to a cooperative or a nonprofit corporation or association, the
Secretary is further authorized to insure under this subsection a
mortgage given by such purchaser in an amount not exceeding the
appraised value of the property at the time of purchase, which value
shall be based upon a mortgage amount on which the debt service can be
met from the income of the property when operated on a nonprofit basis,
after payment of all operating expenses, taxes, and required reserves.
(4) A mortgage to be insured under this subsection shall--
(A) be executed by a mortgagor eligible under subsection (d)(3)
or (e) of section 1715l of this title;
(B) bear interest at a rate not to exceed such percent per annum
on the amount of the principal obligation outstanding at any time as
the Secretary determines is necessary to meet the mortgage market,
taking into consideration the yields on mortgages in the primary and
secondary markets; and
(C) provide for complete amortization by periodic payments
within such term as the Secretary may prescribe.
(5) The property or project shall--
(A) comply with such standards and conditions as the Secretary
may prescribe to establish the acceptability of the property for
mortgage insurance and may include such nondwelling facilities as
the Secretary deems adequate and appropriate to serve the occupants
and the surrounding neighborhood: Provided, That the project shall
be predominantly residential and any nondwelling facility included
in the mortgage shall be found by the Secretary to contribute to the
economic feasibility of the project, and the Secretary shall give
due consideration to the possible effect of the project on other
business enterprises in the community: Provided further, That, in
the case of a project designed primarily for occupancy by elderly or
handicapped families, the project may include related facilities for
use by elderly or handicapped families, including cafeterias or
dining halls, community rooms, workshops, infirmaries, or other
inpatient or outpatient health facilities, and other essential
service facilities;
(B) include five or more dwelling units, but such units, in the
case of a project designed primarily for occupancy by displaced,
elderly, or handicapped families, need not, with the approval of the
Secretary, contain kitchen facilities; and
(C) be designed primarily for use as a rental project to be
occupied by lower income families or by elderly or handicapped
families: Provided, That lower income persons who are less than
sixty-two years of age shall be eligible for occupancy in such a
project.
In any case in which it is determined in accordance with regulations of
the Secretary that facilities in existence or under construction on
December 31, 1970, which could appropriately be used for classroom
purposes are available in any such property or project and that public
schools in the community are overcrowded due in part to the attendance
at such schools of residents of the property or project, such facilities
may be used for such purposes to the extent permitted in such
regulations (without being subject to any of the requirements of the
first proviso in subparagraph (A) except the requirement that the
project be predominantly residential).
(6) With the approval of the Secretary, the mortgagor may sell the
individual dwelling units to lower income or elderly or handicapped
purchasers. The Secretary may consent to the release of the mortgagor
from his liability under the mortgage and the credit instrument secured
thereby, or consent to the release of parts of the mortgaged property
from the lien of the mortgage, upon such terms and conditions as he may
prescribe, and the mortgage may provide for such release.
(k) Definitions
As used in this section the term ``tenant'' includes a member of a
cooperative; the term ``rental housing project'' includes a cooperative
housing project; and the terms ``rental'' and ``rental charge'' mean,
with respect to members of a cooperative, the charges under the
occupancy agreements between such members and the cooperative.
(l) Allocation and transfer of reasonable portion of total authority to
contract to make payments to Secretary of Agriculture for use in
rural areas and small towns
The Secretary shall from time to time allocate and transfer to the
Secretary of Agriculture, for use (in accordance with the terms and
conditions of this section) in rural areas and small towns, a reasonable
portion of the total authority to contract to make periodic interest
reduction payments as approved in appropriation Acts under subsection
(i) of this section.
(m) ``Income'' defined
For the purpose of this section the term ``income'' means income
from all sources of each member of the household, as determined in
accordance with criteria prescribed by the Secretary, except that any
amounts not actually received by the family may not be considered as
income under this subsection. In determining amounts to be excluded from
income, the Secretary may, in the Secretary's discretion, take into
account the number of minor children in the household and such other
factors as the Secretary may determine are appropriate.
(n) Termination date for insurance of mortgages; exception
No mortgage shall be insured under this section after November 30,
1983, except pursuant to a commitment to insure before that date. A
mortgage may be insured under this section after the date in the
preceding sentence in order to refinance a mortgage insured under this
section or to finance pursuant to subsection (j)(3) of this section the
purchase, by a cooperative or nonprofit corporation or association, of a
project assisted under this section.
(o) State funding of interest reduction payments
The Secretary is authorized to enter into agreements with any State
or agency thereof under which such State or agency thereof contracts to
make interest reduction payments, subject to all the terms and
conditions specified in this section and in rules, regulations and
procedures adopted by the Secretary under this section, with respect to
all or a part of a project covered by a mortgage insured under this
section. Any funds provided by a State or agency thereof for the purpose
of making interest reduction payments shall be administered, disbursed
and accounted for by the Secretary in accordance with the agreements
entered into by the Secretary with the State or agency thereof and for
such fees as shall be specified therein. Before entering into any
agreements pursuant to this subsection the Secretary shall require
assurances satisfactory to him that the State or agency thereof is able
to provide sufficient funds for the making of interest reduction
payments for the full period specified in the interest reduction
contract.
(p) Contracts with State or local agencies for monitoring and
supervision of management by private sponsors of assisted
projects
The Secretary is authorized to enter into contracts with State or
local agencies approved by him to provide for the monitoring and
supervision by such agencies of the management by private sponsors of
projects assisted under this section. Such contracts shall require that
such agencies promptly report to the Secretary any deficiencies in the
management of such projects in order to enable the Secretary to take
corrective action at the earliest practicable time.
(q) Assistance to residents of covered projects; contracting authority;
applicability
The Secretary may provide assistance under section 1437f of title 42
with respect to residents of units in a project assisted under this
section. In entering into contracts under section 1437c(c) of title 42
with respect to the additional authority provided on October 1, 1980,
the Secretary shall not utilize more than $20,000,000 of such additional
authority to provide assistance for elderly or handicapped families
which, at the time of applying for assistance under such section 1437f
of title 42, are residents of a project assisted under this section and
are expending more than 50 percent of their income on rental payments.
(r) Payments for benefit of certain projects having mortgages made by
State or local housing finance or government agencies
The Secretary shall, not later than 45 days after receipt of an
application by the mortgagee, provide interest reduction and rental
assistance payments for the benefit of projects assisted under this
section whose mortgages were made by State or local housing finance
agencies or State or local government agencies for a term equal to the
remaining mortgage term to maturity on projects assisted under this
section to the extent of--
(1) unexpended balances of amounts of authority as set forth in
certain letter agreements between the Department of Housing and
Urban Development and such State or local housing finance agencies
or State or local government agencies, and
(2) existing allocation under section 236 contracts on projects
whose mortgages were made by State or local housing finance agencies
or State or local government agencies which are not being funded, to
the extent of such excess allocation, for any purposes permitted
under the provisions of this section, including without limitation
rent supplement and rental assistance payment unit increases and
mortgage increases for any eligible purpose under this section,
including without limitation operating deficit loans.
An application shall be eligible for assistance under the previous
sentence only if the mortgagee submits the application within 548 days
after February 5, 1988, along with a certification of the mortgagee that
amounts hereunder are to be utilized only for the purpose of either (A)
reducing rents or rent increases to tenants, or (B) making repairs or
otherwise increasing the economic viability of a related project.
Unexpended balances referred to in the first sentence of this subsection
which remain after disposition of all such applications is favorably
concluded shall be rescinded. The calculation of the amount of
assistance to be provided under an interest reduction contract pursuant
to this subsection shall be made on the basis of an assumed mortgage
term equal to the lesser of a 40-year amortization period or the term of
that part of the mortgage which relates to the additional assistance
provided under this subsection, even though the additional assistance
may be provided for a shorter period. The authority conferred by this
subsection to provide interest reduction and rental assistance payments
shall be available only to the extent approved in appropriation Acts.
(s) Grants and loans for rehabilitation of multifamily projects
(1) In general
The Secretary may make grants and loans for the capital costs of
rehabilitation to owners of projects that meet the eligibility and
other criteria set forth in, and in accordance with, this
subsection.
(2) Project eligibility
A project may be eligible for capital assistance under this
subsection under a grant or loan only--
(A) if--
(i) the project is or was insured under any provision of
subchapter II of this chapter;
(ii) the project was assisted under section 1437f of
title 42 on October 27, 1997; and
(iii) the project mortgage was not held by a State
agency as of October 27, 1997;
(B) if the project owner agrees to maintain the housing
quality standards as required by the Secretary;
(C) the project owner enters into such binding commitments
as the Secretary may require (which shall be applicable to any
subsequent owner) to ensure that the owner will continue to
operate the project in accordance with all low-income
affordability restrictions for the project in connection with
the Federal assistance for the project for a period having a
duration that is not less than the period referred to in
paragraph (5)(C);
(D)(i) if the Secretary determines that the owner or
purchaser of the project has not engaged in material adverse
financial or managerial actions or omissions with regard to such
project; or
(ii) if the Secretary elects to make such determination,
that the owner or purchaser of the project has not engaged in
material adverse financial or managerial actions or omissions
with regard to other projects of such owner or purchaser that
are federally assisted or financed with a loan from, or mortgage
insured or guaranteed by, an agency of the Federal Government;
(iii) material adverse financial or managerial actions or
omissions, as the terms are used in this subparagraph, include--
(I) materially violating any Federal, State, or local
law or regulation with regard to this project or any other
federally assisted project, after receipt of notice and an
opportunity to cure;
(II) materially breaching a contract for assistance
under section 1437f of title 42, after receipt of notice and
an opportunity to cure;
(III) materially violating any applicable regulatory or
other agreement with the Secretary or a participating
administrative entity, after receipt of notice and an
opportunity to cure;
(IV) repeatedly failing to make mortgage payments at
times when project income was sufficient to maintain and
operate the property;
(V) materially failing to maintain the property
according to housing quality standards after receipt of
notice and a reasonable opportunity to cure; or
(VI) committing any act or omission that would warrant
suspension or debarment by the Secretary; and
(iv) the term ``owner'' as used in this subparagraph, in
addition to it having the same meaning as in section 1437f(f) of
title 42, also means an affiliate of the owner; the term
``purchaser'' as used in this subsection means any private
person or entity, including a cooperative, an agency of the
Federal Government, or a public housing agency, that, upon
purchase of the project, would have the legal right to lease or
sublease dwelling units in the project, and also means an
affiliate of the purchaser; the terms ``affiliate of the owner''
and ``affiliate of the purchaser'' means any person or entity
(including, but not limited to, a general partner or managing
member, or an officer of either) that controls an owner or
purchaser, is controlled by an owner or purchaser, or is under
common control with the owner or purchaser; the term ``control''
means the direct or indirect power (under contract, equity
ownership, the right to vote or determine a vote, or otherwise)
to direct the financial, legal, beneficial or other interests of
the owner or purchaser; and
(E) if the project owner demonstrates to the satisfaction of
the Secretary--
(i) using information in a comprehensive needs
assessment, that capital assistance under this subsection
from a grant or loan (as appropriate) is needed for
rehabilitation of the project; and
(ii) that project income is not sufficient to support
such rehabilitation.
(3) Eligible uses
Amounts from a grant or loan under this subsection may be used
only for projects eligible under paragraph (2) for the purposes of--
(A) payment into project replacement reserves;
(B) debt service payments on non-Federal rehabilitation
loans; and
(C) payment of nonrecurring maintenance and capital
improvements, under such terms and conditions as are determined
by the Secretary.
(4) Grant and loan agreements
(A) In general
The Secretary shall provide in any grant or loan agreement
under this subsection that the grant or loan shall be terminated
if the project fails to meet housing quality standards, as
applicable on October 27, 1997, or any successor standards for
the physical conditions of projects, as are determined by the
Secretary.
(B) Affordability and use clauses
The Secretary shall include in a grant or loan agreement
under this subsection a requirement for the project owners to
maintain such affordability and use restrictions as the
Secretary determines to be appropriate and consistent with
paragraph (2)(C).
(C) Other terms
The Secretary may include in a grant or loan agreement under
this subsection such other terms and conditions as the Secretary
determines to be necessary.
(5) Loan terms
A loan under this subsection--
(A) shall provide amounts for the eligible uses under
paragraph (3) in a single loan disbursement of loan principal;
(B) shall be repaid, as to principal and interest, on behalf
of the borrower using amounts recaptured from contracts for
interest reduction payments pursuant to clause (i) or (ii) of
paragraph (7)(A);
(C) shall have a term to maturity of a duration not shorter
than the remaining period for which the interest reduction
payments for the insured mortgage or mortgages that fund
repayment of the loan would have continued after extinguishment
or writedown of the mortgage (in accordance with the terms of
such mortgage in effect immediately before such extinguishment
or writedown);
(D) shall bear interest at a rate, as determined by the
Secretary of the Treasury, that is based upon the current market
yields on outstanding marketable obligations of the United
States having comparable maturities; and
(E) shall involve a principal obligation of an amount not
exceeding the amount that can be repaid using amounts described
in subparagraph (B) over the term determined in accordance with
subparagraph (C), with interest at the rate determined under
subparagraph (D).
(6) Delegation
(A) In general
In addition to the authorities set forth in subsection (p)
of this section, the Secretary may delegate to State and local
governments the responsibility for the administration of grants
under this subsection. Any such government may carry out such
delegated responsibilities directly or under contracts.
(B) Administration costs
In addition to other eligible purposes, amounts of grants
under this subsection may be made available for costs of
administration under subparagraph (A).
(7) Funding
(A) In general
For purposes of carrying out this subsection, the Secretary
may make available amounts that are unobligated amounts for
contracts for interest reduction payments--
(i) that were previously obligated for contracts for
interest reduction payments under this section until the
insured mortgage under this section was extinguished;
(ii) that become available as a result of the
outstanding principal balance of a mortgage having been
written down;
(iii) that are uncommitted balances within the
limitation on maximum payments that may have been, before
October 27, 1997, permitted in any fiscal year; or
(iv) that become available from any other source.
(B) Liquidation authority
The Secretary may liquidate obligations entered into under
this subsection under section 1305(10) of title 31.
(C) Capital grants
In making capital grants under the terms of this subsection,
using the amounts that the Secretary has recaptured from
contracts for interest reduction payments, the Secretary shall
ensure that the rates and amounts of outlays do not at any time
exceed the rates and amounts of outlays that would have been
experienced if the insured mortgage had not been extinguished or
the principal amount had not been written down, and the interest
reduction payments that the Secretary has recaptured had
continued in accordance with the terms in effect immediately
prior to such extinguishment or write-down.
(D) Loans
In making loans under this subsection using the amounts that
the Secretary has recaptured from contracts for interest
reduction payments pursuant to clause (i) or (ii) of paragraph
(7)(A)--
(i) the Secretary may use such recaptured amounts for
costs (as such term is defined in section 661a of title 2)
of such loans; and
(ii) the Secretary may make loans in any fiscal year
only to the extent or in such amounts that amounts are used
under clause (i) to cover costs of such loans.
(June 27, 1934, ch. 847, title II, Sec. 236, as added Pub. L. 90-448,
title II, Sec. 201(a), Aug. 1, 1968, 82 Stat. 498; amended Pub. L. 91-
152, title I, Secs. 101(e), 107(b), 108, title IV, Secs. 412(c), 418(b),
Dec. 24, 1969, 83 Stat. 379, 381, 398, 402; Pub. L. 91-609, title I,
Secs. 101(e), 102(b), 108, 114(b), 114[115](b), 117(c), 118(a), 121,
Dec. 31, 1970, 84 Stat. 1770, 1772-1776; Pub. L. 92-503, Sec. 1(e), Oct.
18, 1972, 86 Stat. 906; Pub. L. 93-85, Sec. 1(e), Aug. 10, 1973, 87
Stat. 220; Pub. L. 93-117, Sec. 1(e), Oct. 2, 1973, 87 Stat. 421; Pub.
L. 93-383, title II, Sec. 212, Aug. 22, 1974, 88 Stat. 672; Pub. L. 94-
173, Sec. 4(b), Dec. 23, 1975, 89 Stat. 1027; Pub. L. 94-375, Sec. 4,
Aug. 3, 1976, 90 Stat. 1070; Pub. L. 95-128, title II, Sec. 206(a)-(c),
title III, Sec. 301(e), Oct. 12, 1977, 91 Stat. 1130, 1131; Pub. L. 95-
406, Sec. 1(e), Sept. 30, 1978, 92 Stat. 879; Pub. L. 95-557, title II,
Sec. 201(k), formerly (i), title III, Sec. 301(e), Oct. 31, 1978, 92
Stat. 2087, 2096, as renumbered Pub. L. 97-35, title III,
Sec. 321(f)(2)(A), Aug. 13, 1981, 95 Stat. 400; Pub. L. 96-71,
Sec. 1(e), Sept. 28, 1979, 93 Stat. 501; Pub. L. 96-105, Sec. 1(e), Nov.
8, 1979, 93 Stat. 794; Pub. L. 96-153, title II, Secs. 203(b), 205(b),
title III, Sec. 301(e), Dec. 21, 1979, 93 Stat. 1107, 1108, 1111; Pub.
L. 96-372, Secs. 1(e), 2, Oct. 3, 1980, 94 Stat. 1363; Pub. L. 96-399,
title II, Sec. 204(b), 211, title III, Sec. 301(e), Oct. 8, 1980, 94
Stat. 1629, 1636, 1638; Pub. L. 97-35, title III, Secs. 321(f)(3),
322(f), 331(e), Aug. 13, 1981, 95 Stat. 400, 403, 413; Pub. L. 97-289,
Sec. 1(e), Oct. 6, 1982, 96 Stat. 1230; Pub. L. 98-35, Sec. 1(e), May
26, 1983, 97 Stat. 197; Pub. L. 98-109, Sec. 1(e), Oct. 1, 1983, 97
Stat. 745; Pub. L. 98-181, title II, Secs. 217(c), 218, Nov. 30, 1983,
97 Stat. 1186, 1187; Pub. L. 98-479, title I, Secs. 102(a)(2),
104(a)(4), title II, Sec. 204(a)(9), Oct. 17, 1984, 98 Stat. 2221, 2225,
2232; Pub. L. 100-242, title I, Secs. 167(a)(1), (b), 170(b), 186(a),
title IV, Secs. 429(f), 430(a), Feb. 5, 1988, 101 Stat. 1864, 1867,
1877, 1919; Pub. L. 101-235, title II, Sec. 203(a)(1), title III,
Sec. 301, Dec. 15, 1989, 103 Stat. 2037, 2043; Pub. L. 101-625, title V,
Sec. 578(a), title VI, Secs. 611(a), (b)(1), 612(a), Nov. 28, 1990, 104
Stat. 4244, 4278, 4279; Pub. L. 102-550, title III, Sec. 331, title IV,
Sec. 408(b), Oct. 28, 1992, 106 Stat. 3773, 3778; Pub. L. 104-99, title
IV, Sec. 405(d), Jan. 26, 1996, 110 Stat. 44; Pub. L. 104-134, title I,
Sec. 101(e) [title II, Sec. 228], Apr. 26, 1996, 110 Stat. 1321-257,
1321-292; renumbered title I, Pub. L. 104-140, Sec. 1(a), May 2, 1996,
110 Stat. 1327; Pub. L. 104-204, title II, Sec. 221, Sept. 26, 1996, 110
Stat. 2906; Pub. L. 105-65, title V, Sec. 531, Oct. 27, 1997, 111 Stat.
1409; Pub. L. 105-276, title II, Sec. 227, Oct. 21, 1998, 112 Stat.
2490; Pub. L. 106-74, title V, Secs. 532(a)-(d), 533, Oct. 20, 1999, 113
Stat. 1116, 1117, 1119; Pub. L. 106-377, Sec. 1(a)(1) [title II,
Sec. 216], Oct. 27, 2000, 114 Stat. 1441, 1441A-28; Pub. L. 106-569,
title VIII, Sec. 861(a), Dec. 27, 2000, 114 Stat. 3025.)
References in Text
The Low-Income Housing Preservation and Resident Homeownership Act
of 1990, referred to in subsec. (f)(1)(B)(iii), is title II of Pub. L.
100-242, Feb. 5, 1988, 101 Stat. 1877, as amended, which is classified
principally to chapter 42 (Sec. 4101 et seq.) of this title. For
complete classification of this Act to the Code, see Short Title note
set out under section 4101 of this title and Tables.
The Emergency Low Income Housing Preservation Act of 1987, referred
to in subsec. (f)(1)(B)(iii), is title II of Pub. L. 100-242, Feb. 5,
1988, 101 Stat. 1877, which, as amended by Pub. L. 101-625, is known as
the Low-Income Housing Preservation and Resident Homeownership Act of
1990. Subtitles A and B of title II, which were formerly set out as a
note under section 1715l of this title and which amended section 1715z-6
of this title, were amended generally by Pub. L. 101-625 and are
classified to subchapter I (Sec. 4101 et seq.) of chapter 42 of this
title. Subtitles C and D of title II amended section 1715z-15 of this
title and sections 1437f, 1472, 1485, and 1487 of Title 42, The Public
Health and Welfare. Another subtitle C of title II of Pub. L. 100-242,
as added by Pub. L. 102-550, is classified generally to subchapter II
(Sec. 4141 et seq.) of chapter 42 of this title. For complete
classification of this Act to the Code, see Short Title note set out
under section 4101 of this title and Tables.
Section 201 of the Housing and Community Development Amendments of
1978, referred to in subsec. (f)(3), (5)(A), 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 this section.
Section 516 of the Multifamily Assisted Housing Reform and
Affordability Act of 1997, referred to in subsec. (g)(2), is section 516
of Pub. L. 105-65, which is set out as a note under section 1437f of
Title 42, The Public Health and Welfare.
Section 1701q of this title, referred to in subsec. (j)(2)(B), was
amended generally by Pub. L. 101-625, title VIII, Sec. 801(a), Nov. 28,
1990, 104 Stat. 4297, and, as so amended, no longer defines the term
``elderly or handicapped families''.
Section 236 contracts, referred to in subsec. (r)(2), refer to
contracts under this section.
Codification
Subsec. (o), added as subsec. (n) by Pub. L. 91-609, Sec. 121(a),
designated subsec. (o) in the Code as a prior subsec. (n) was added by
Pub. L. 91-152, and amended by Pub. L. 91-609, Sec. 101(e).
Amendments
2000--Subsec. (g)(2). Pub. L. 106-569, Sec. 861(a)(1), substituted
``Notwithstanding'' for ``Subject to paragraph (3) and
notwithstanding''.
Subsec. (g)(3). Pub. L. 106-569, Sec. 861(a)(2), redesignated par.
(4) as (3) and struck out former par. (3) which related to authority
under par. (2) to retain and use excess charges.
Subsec. (g)(3)(A). Pub. L. 106-377 substituted ``fiscal years 2000
and 2001'' for ``fiscal year 2000''.
Subsec. (g)(4). Pub. L. 106-569, Sec. 861(a)(2), redesignated par.
(4) as (3).
1999--Subsec. (e). Pub. L. 106-74, Sec. 532(a), designated existing
provisions as par. (1) and added par. (2).
Subsec. (f)(1). Pub. L. 106-74, Sec. 532(d), added par. (1) and
struck out former par. (1) which required that basic and fair market
rental charges be established with the approval of the Secretary and
that the rental charge for each dwelling unit be within the basic and
fair market charges, subject to certain exceptions and refinements.
Subsec. (g). Pub. L. 106-74, Sec. 532(b), (c), designated existing
provisions as par. (1), struck out at end ``Notwithstanding any other
requirements of this subsection, an owner of a project with a mortgage
insured under this section, or a project previously assisted under
subsection (b) of this section but without a mortgage insured under this
section if the project mortgage was insured under section 1713 of this
title before July 30, 1998 pursuant to section 1715n(f) of this title
and assisted under subsection (b) of this section, may retain some or
all of such excess charges for project use if authorized by the
Secretary and upon such terms and conditions as established by the
Secretary.'', and added pars. (2) to (4).
Subsec. (s). Pub. L. 106-74, Sec. 533(a)(1), substituted ``Grants
and loans for rehabilitation of multifamily projects'' for ``Grant
authority'' in heading.
Subsec. (s)(1). Pub. L. 106-74, Sec. 533(a)(2), inserted ``and
loans'' after ``grants''.
Subsec. (s)(2). Pub. L. 106-74, Sec. 533(a)(3)(A), substituted
``capital assistance under this subsection under a grant or loan only''
for ``capital grant assistance under this subsection'' in introductory
provisions.
Subsec. (s)(2)(C). Pub. L. 106-74, Sec. 533(b)(1)(B), added subpar.
(C). Former subpar. (C) redesignated (D).
Subsec. (s)(2)(D). Pub. L. 106-74, Sec. 533(b)(1)(A), redesignated
subpar. (C) as (D). Former subpar. (D) redesignated (E).
Subsec. (s)(2)(D)(i). Pub. L. 106-74, Sec. 533(a)(3)(B), substituted
``capital assistance under this subsection from a grant or loan (as
appropriate)'' for ``capital grant assistance''.
Subsec. (s)(2)(E). Pub. L. 106-74, Sec. 533(b)(1)(A), redesignated
subpar. (D) as (E).
Subsec. (s)(3). Pub. L. 106-74, Sec. 533(a)(4), in par. heading,
substituted ``Eligible uses'' for ``Eligible purposes'' and in
introductory provisions, substituted ``Amounts from a grant or loan
under this subsection may be used only for projects eligible under
paragraph (2) for the purposes of--'' for ``The Secretary may make
grants to the owners of eligible projects for the purposes of--''.
Subsec. (s)(4). Pub. L. 106-74, Sec. 533(a)(5)(A), substituted
``Grant and loan agreements'' for ``Grant agreement'' in heading.
Subsec. (s)(4)(A). Pub. L. 106-74, Sec. 533(a)(5)(B), inserted ``or
loan'' after ``grant'' in two places.
Subsec. (s)(4)(B). Pub. L. 106-74, Sec. 533(a)(5)(B), (b)(2),
inserted ``or loan'' after ``grant'' and ``and consistent with paragraph
(2)(C)'' before period at end.
Subsec. (s)(4)(C). Pub. L. 106-74, Sec. 533(a)(5)(B), inserted ``or
loan'' after ``grant''.
Subsec. (s)(5). Pub. L. 106-74, Sec. 533(a)(9), added par. (5).
Former par. (5) redesignated (6).
Pub. L. 106-74, Sec. 533(a)(6), which directed the insertion of ``or
loan'' after ``grant'' each place it appeared, could not be executed
because the word ``grants'' did not appear.
Subsec. (s)(6). Pub. L. 106-74, Sec. 533(a)(8), redesignated par.
(5) as (6). Former par. (6) redesignated (7).
Subsec. (s)(6)(D). Pub. L. 106-74, Sec. 533(a)(7), added subpar.
(D).
Subsec. (s)(7). Pub. L. 106-74, Sec. 533(a)(8), redesignated par.
(6) as (7).
1998--Subsec. (g). Pub. L. 105-276 amended subsec. (g) generally.
Prior to amendment, subsec. (g) read as follows: ``The project owner
shall, as required by the Secretary, accumulate, safeguard, and
periodically pay the Secretary or such other entity as determined by the
Secretary and upon such terms and conditions as the Secretary deems
appropriate, all rental charges collected on a unit-by-unit basis in
excess of the basic rental charges. Unless otherwise directed by the
Secretary, such excess charges shall be credited to a reserve fund to be
used by the Secretary to make additional assistance payments as provided
in paragraph (3) of subsection (f) of this section. However, a project
owner with a mortgage insured under this section may retain some or all
of such excess charges for project use if authorized by the Secretary
and upon such terms and conditions as established by the Secretary.''
1997--Subsec. (s). Pub. L. 105-65 added subsec. (s).
1996--Subsec. (f)(1). Pub. L. 104-204, Sec. 221(a)(2), which
directed the amendment of second sentence by striking ``or (ii) the fair
market rental established under section 1437f(c) of title 42 for the
market area in which the housing is located, or (iii) the actual rent
(as determined by the Secretary) paid for a comparable unit in
comparable unassisted housing in the market area in which the housing
assisted under this section is located,'' after ``pursuant to this
paragraph,'', was executed by striking language which did not include
word ``or'' before ``(ii)'' to reflect the probable intent of Congress
and the amendment by Pub. L. 104-134, Sec. 101(e) [title II,
Sec. 228(a)]. See below.
Pub. L. 104-204, Sec. 221(a)(1), (3), struck out ``the lower of
(i)'' after ``amount, not exceeding'', and inserted after second
sentence ``However, in the case of a project which contains more than
5,000 units, is subject to an interest reduction payments contract, and
is financed under a State or local program, the Secretary may reduce the
rental charge ceiling, but in no case shall the rent be below basic
rent. For plans of action approved for Capital Grants under the Low-
Income Housing Preservation and Resident Homeownership Act of 1990
(LIHPRHA) or the Emergency Low Income Housing Preservation Act of 1987
(ELIHPA), the rental charge for each dwelling unit shall be at the basic
rental charge or such greater amount, not exceeding the lower of (i) the
fair market rental charge determined pursuant to this paragraph, or (ii)
the actual rent paid for a comparable unit in comparable unassisted
housing in the market area in which the housing assisted under this
section is located, as represents 30 percent of the tenant's adjusted
income, but in no case shall the rent be below basic rent.''
Pub. L. 104-134, Sec. 101(e) [title II, Sec. 228(a)], in second
sentence, struck out ``or'' before ``(ii)'' and substituted ``located,
or (iii) the actual rent (as determined by the Secretary) paid for a
comparable unit in comparable unassisted housing in the market area in
which the housing assisted under this section is located,'' for
``located,''.
Pub. L. 104-99, Sec. 405(d)(1), substituted ``The rental charge for
each dwelling unit shall be at the basic rental charge or such greater
amount, not exceeding the lower of (i) the fair market rental charge
determined pursuant to this paragraph, or (ii) the fair market rental
established under section 1437f(c) of title 42 for the market area in
which the housing is located, as represents 30 per centum of the
tenant's adjusted income.'' for ``The rental for each dwelling unit
shall be at the basic rental charge or such greater amount, not
exceeding the fair market rental charge, as represents 30 per centum of
the tenant's adjusted income.''
Subsec. (f)(6). Pub. L. 104-99, Sec. 405(d)(2), struck out par. (6)
which read as follows:
``(6)(A) Notwithstanding paragraph (1), tenants whose incomes exceed
80 percent of area median income shall pay as rent the lower of the
following amounts: (A) 30 percent of the family's adjusted monthly
income; or (B) the relevant fair market rental established under section
1437f(b) of title 42 for the jurisdiction in which the housing is
located.
``(B) An owner shall phase in any increase in rents for current
tenants resulting from subparagraph (A). Rental charges collected in
excess of the basic rental charges shall continue to be credited to the
reserve fund described in subsection (g)(1) of this section.''
Subsec. (f)(7). Pub. L. 104-204, Sec. 221(b), added par. (7).
Subsec. (g). Pub. L. 104-204, Sec. 221(c), amended subsec. (g)
generally. Prior to amendment, subsec. (g) read as follows: ``The
project owner shall, as required by the Secretary, accumulate,
safeguard, and periodically pay to the Secretary all rental charges
collected on a unit-by-unit basis in excess of the basic rental charges.
Such excess charges shall be credited to a reserve fund to be used by
the Secretary to make additional assistance payments as provided in
paragraph (3) of subsection (f) of this section.''
Pub. L. 104-134, Sec. 101(e) [title II, Sec. 228(b)], inserted ``on
a unit-by-unit basis'' after ``collected''.
1992--Subsec. (f)(3). Pub. L. 102-550, Sec. 408(b), substituted
``September 30, 1994'' for ``September 30, 1992''.
Subsec. (j)(4)(A). Pub. L. 102-550, Sec. 331, struck out ``private''
before ``mortgagor''.
1990--Subsec. (f)(3). Pub. L. 101-625, Sec. 578(a), substituted
``September 30, 1992'' for ``September 30, 1991''.
Subsec. (f)(5). Pub. L. 101-625, Sec. 611(b)(1), added par. (5).
Subsec. (f)(6). Pub. L. 101-625, Sec. 612(a), added par. (6).
Subsec. (m). Pub. L. 101-625, Sec. 611(a), inserted before period at
end of first sentence ``, except that any amounts not actually received
by the family may not be considered as income under this subsection''.
1989--Subsec. (b). Pub. L. 101-235, Sec. 203(a)(1), inserted
``public entity,'' after ``dividend entity,''.
Subsec. (f)(3). Pub. L. 101-235, Sec. 301, substituted ``September
30, 1991'' for ``September 30, 1989''.
1988--Subsec. (f)(3). Pub. L. 100-242, Sec. 186(a), substituted
``September 30, 1989'' for ``September 30, 1985''.
Subsec. (f)(4). Pub. L. 100-242, Sec. 167(a)(1), substituted ``100
percent'' for ``90 per centum''.
Subsec. (i)(1). Pub. L. 100-242, Secs. 170(b), 429(f), amended par.
(1) identically, substituting ``subsection (f)(4) of this section'' for
``subsection (h) of this section''.
Subsec. (n). Pub. L. 100-242, Sec. 167(b), inserted at end ``A
mortgage may be insured under this section after the date in the
preceding sentence in order to refinance a mortgage insured under this
section or to finance pursuant to subsection (j)(3) of this section the
purchase, by a cooperative or nonprofit corporation or association, of a
project assisted under this section.''
Subsec. (r). Pub. L. 100-242, Sec. 430(a), added subsec. (r).
1984--Subsec. (f)(4). Pub. L. 98-479, Sec. 102(a)(2), struck out
``up to'' before ``90 per centum''.
Subsec. (j)(4)(B). Pub. L. 98-479, Sec. 104(a)(4), substituted
``bear interest at a rate not to exceed such percent per annum on the
amount of the principal obligation outstanding at any time as the
Secretary determines is necessary to meet the mortgage market, taking
into consideration the yields on mortgages in the primary and secondary
markets'' for ``bear interest (exclusive of premium charges for
insurance and service charges, if any) at not to exceed such per centum
per annum (not in excess of 6 per centum), on the amount of the
principal obligation outstanding at any time, as the Secretary finds
necessary to meet the mortgage market''.
Subsec. (j)(5). Pub. L. 98-479, Sec. 204(a)(9), substituted ``of
residents'' for ``or residents'' in provision following subpar. (C).
1983--Subsec. (f)(3). Pub. L. 98-181, Sec. 217(c), substituted
``September 30, 1985'' for ``September 30, 1982''.
Subsec. (f)(4). Pub. L. 98-181, Sec. 218(a), added par. (4).
Subsec. (i)(1). Pub. L. 98-181, Sec. 218(b), inserted provision
relating to utilization by the Secretary of any authority under this
section that it recaptured.
Subsec. (n). Pub. L. 98-109 substituted ``November 30, 1983'' for
``September 30, 1983''.
Pub. L. 98-35 substituted ``September 30, 1983'' for ``May 20,
1983''.
1982--Subsec. (n). Pub. L. 97-289 substituted ``May 20, 1983'' for
``September 30, 1982''.
1981--Subsec. (e). Pub. L. 97-35, Sec. 322(f)(1), substituted ``one
year'' for ``two years''.
Subsec. (f)(1). Pub. L. 97-35, Sec. 322(f)(2), (3), substituted
provisions respecting applicability of specific percentage of tenant's
adjusted income, for provisions respecting applicability of specific
percentage of tenant's income.
Subsec. (f)(2). Pub. L. 97-35, Sec. 322(f)(4)-(6), substituted
provisions respecting applicability of specific percentage of tenant's
adjusted income, for provisions respecting applicability of specific
percentage of tenant's income, and struck out provisions relating to
reduction of rental payment.
Subsec. (f)(3). Pub. L. 97-35, Secs. 321(f)(3), 322(f)(7), struck
out subpar. (A) which related to establishment of an initial operating
expense level, redesignated subpar. (B) as entire provision and
substituted ``1982'' for ``1981''.
Subsec. (m). Pub. L. 97-35, Sec. 322(f)(8), substituted provisions
defining ``income'' as income from all sources of each member of the
household, subject to certain exclusions, for provisions defining term
``income'' as income determined under section 1437f of title 42.
Subsec. (n). Pub. L. 97-35, Sec. 331(e), substituted ``1982'' for
``1981''.
1980--Subsec. (f)(3)(B). Pub. L. 96-399, Sec. 204(b), substituted
``September 30, 1981'' for ``October 15, 1980'' in third sentence, and
struck out ``on or after October 1, 1978, or credited to such fund prior
to October 1, 1978, but remaining unobligation on October 31, 1978,'' in
first sentence.
Pub. L. 96-372, Sec. 2, substituted ``October 15, 1980'' for
``September 30, 1980''.
Subsec. (n). Pub. L. 96-399, Sec. 301(e), substituted ``September
30, 1981'' for ``October 15, 1980''.
Pub. L. 96-372, Sec. 1(e), substituted ``October 15, 1980'' for
``September 30, 1980''.
Subsec. (q). Pub. L. 96-399, Sec. 211, added subsec. (q).
1979--Subsec. (f)(3)(B). Pub. L. 96-153, Sec. 205(b), substituted
``after October 1, 1978, or credited to such fund prior to October 1,
1978, but remaining unobligated on October 31, 1978,'' for ``after
October 1, 1978,'', and in provision relating to the restriction on
approval of funds, substituted ``September 30, 1980'' for ``September
30, 1979''.
Subsec. (m). Pub. L. 96-153, Sec. 203(b), substituted definition of
``income'' by reference to section 1437f of title 42 for provisions
requiring deduction of $300 for each minor member of the family in
determining the income and further providing that the earnings of a
minor not be included in the income of person or family.
Subsec. (n). Pub. L. 96-153, Sec. 301(e), substituted ``September
30, 1980'' for ``November 30, 1979''.
Pub. L. 96-105 substituted ``November 30, 1979'' for ``October 31,
1979''.
Pub. L. 96-71 substituted ``October 31, 1979'' for ``September 30,
1979.''
1978--Subsec. (f)(3). Pub. L. 95-557, Sec. 201(k)(1), formerly
Sec. 201(i)(1), designated existing provisions as par. (A), substituted
``For each fiscal year prior to the fiscal year 1979, the'' for ``The'',
and added par. (B).
Subsec. (g). Pub. L. 95-557, Sec. 201(k)(2), formerly
Sec. 201(i)(2), struck out provisions authorizing, that if during any
period the balance in reserve fund was adequate to meet additional
assistance payments, such excess charges be credited to the
appropriation authorized by subsec. (i), and be available until the end
of the next fiscal year for purpose of making assistance payments with
respect to rental housing projects, and that for purpose of this
subsection and par. (3) of subsec. (f), initial operating expense level
for any project assisted under a contract entered into prior to Oct. 12,
1977, be established by the Secretary not later than 180 days after Oct.
12, 1977.
Subsec. (n). Pub. L. 95-557, Sec. 301(e), substituted ``September
30, 1979'' for ``October 31, 1978''.
Pub. L. 95-406 substituted ``October 31, 1978'' for ``September 30,
1978''.
1977--Subsec. (f)(3). Pub. L. 95-128, Sec. 206(a), (b), substituted
``The Secretary is authorized to make, and shall contract to make to the
extent of the moneys in the reserve fund established under subsection
(g) of this section and to the further extent of funds authorized in
appropriation Acts, an additional monthly assistance payment to the
project owner up to the amount by which the sum of the cost of utilities
and local property taxes exceeds the initial operating expense level.''
for ``At any time subsequent to the establishment of an initial
operating expense level, the Secretary is authorized to make, and
contract to make, additional assistance payments to the project owner in
an amount up to the amount by which the sum of the cost of utilities and
local property taxes exceeds the initial operating expense level, but
not to exceed the amount required to maintain the basic rentals of any
units at levels not in excess of 30 per centum or such lower per centum
not less than 25 per centum as shall reflect the reduction permitted in
clause (ii) of the last sentence of paragraph (1), of the income of
tenants occupying such units.'', inserted sentence ``Such payment shall
be used by the project owner solely to effect, and there shall be, a
reduction in the basic rental charges established for the project.'',
and substituted ``Any contract to make additional monthly assistance
payments shall be for a one-year period and shall be adjusted
periodically to provide, to the extent approved in appropriation Acts,
for continuation of the payments and for an appropriate adjustment in
the amount of the assistance payments.'' for ``Any contract to make
additional assistance payments may be amended periodically to provide
for appropriate adjustments in the amount of the assistance payments.'';
and substituted in last sentence ``unless the Secretary finds that the
increase in the cost of utilities or local property taxes is not
reasonable or not'' for ``only if the Secretary finds that the increase
in the cost of utilities or local property taxes, is reasonable and
is''.
Subsec. (g). Pub. L. 95-128, Sec. 206(c), substituted date of
enactment of Pub. L. 95-128, which is October 12, 1977, for date of
enactment of Pub. L. 93-383, which was August 22, 1974.
Subsec. (n). Pub. L. 95-128, Sec. 301(e), substituted ``September
30, 1978'' for ``September 30, 1977''.
1976--Subsec. (f)(2). Pub. L. 94-375, Sec. 4(b), inserted
``(including the amount allowed for utilities in the case of a project
with separate utility metering)'' after ``basic rentals'' and ``reduce
the rental payment'', and struck out ``or such lower per centum as may
be established pursuant to the provisions of clause (ii) of the last
sentence of paragraph (1)'' after ``25 per centum of their income'' and
``25 per centum of the tenant's income''.
Subsec. (n). Pub. L. 94-375, Sec. 4(a), substituted ``September 30,
1977'' for ``June 30, 1976''.
1975--Subsec. (j)(5)(C). Pub. L. 94-173 struck out provision
limiting to 10 per centum the number of dwelling units available to
lower income persons under the age of 62.
1974--Subsec. (f). Pub. L. 93-383, Sec. 212(1), (2), redesignated
existing subsec. (f) as (f)(1) and cls. (1) and (2) as (A) and (B),
respectively, and inserted provisions relating to separate utility
metering and pars. (2) and (3).
Subsec. (g). Pub. L. 93-383, Sec. 212(3), substituted provisions
authorizing the creation of a reserve fund of excess rental charges and
providing for use of such fund for making additional assistance
payments, for provisions authorizing the Secretary to deposit excess
charges in a revolving fund used for making interest reduction payments
to any housing project receiving assistance, and authorizing investment
of monies in United States obligations.
Subsec. (i)(1). Pub. L. 93-383, Sec. 212(4), inserted authorization
for increase by $75,000,000 on July 1, 1974.
Subsec. (i)(2). Pub. L. 93-383, Sec. 212(5), substituted provisions
relating to contracts for assistance payments and income limitations
with respect to families involved in such contracts, for provisions
relating to contracts for interest reduction payments, income
limitations with respect to families involved in such contracts, and
semiannual reports to Congressional Committees on income levels of
families living in assisted projects.
Subsec. (i)(3). Pub. L. 93-383, Sec. 212(5), substituted provisions
relating to availability of not less than 10 per centum of the total
amount of contracts for assistance payments, for provisions relating to
contracts for not more than 10 per centum of the total amount of
interest reduction payments.
Subsec. (i)(4). Pub. L. 93-383, Sec. 212(5), added par. (4).
Subsec. (n). Pub. L. 93-383, Sec. 212(6), substituted ``June 30,
1976'' for ``October 1, 1974''.
Subsec. (p). Pub. L. 93-383, Sec. 212(7), added subsec. (p).
1973--Subsec. (n). Pub. L. 93-117 substituted ``October 1, 1974''
for ``October 1, 1973''.
Pub. L. 93-85 substituted ``October 1, 1973'' for ``June 30, 1973''.
1972--Subsec. (n). Pub. L. 92-503 substituted ``June 30, 1973'' for
``October 1, 1972''.
1970--Subsec. (b). Pub. L. 91-609, Secs. 108, 118(a), inserted
definition of ``mortgage insurance premium'' and substituted ``which may
involve either new or existing construction and which'' for ``which
prior to completion of construction or rehabilitation'' before ``is
approved'', respectively.
Subsec. (g). Pub. L. 91-609, Sec. 117(c), provided for guarantee as
to principal and interest by any agency of the United States and for
investment of moneys in bonds or other obligations the proceeds of which
will be used to directly support the residential mortgage market.
Subsec. (i)(1). Pub. L. 91-609, Secs. 102(b), 121(b), in second
sentence inserted ``outstanding'' before ``contracts'' where first
appearing and substituted ``$150,000,000 on July 1, 1970'' and
``$200,000,000 on July 1, 1971'' for ``$125,000,000 on July 1, 1970''
and ``$170,000,000 on July 1, 1971'', respectively, and in first
sentence inserted ``by the Secretary'' after ``entered into''.
Subsec. (i)(3). Pub. L. 91-609, Sec. 114[115](b)(2), added par. (3).
Subsec. (j)(5). Pub. L. 91-609, Secs. 114(b), 114[115](b)(1),
provided for use of certain housing facilities for classroom purposes
where public schools in the community are overcrowded due in part to
attendance of residents of the property or project, but dispensed with
need for kitchen facilities in dwelling units in projects for displaced,
elderly, or handicapped families.
Subsec. (n). Pub. L. 91-609, Sec. 101(e), substituted ``October 1,
1972'' for ``October 1, 1971''.
Subsec. (o). Pub. L. 91-609, Sec. 121(a), added subsec. (o). See
Codification note above.
1969--Subsec. (b). Pub. L. 91-152, Secs. 108, 418(b), inserted
proviso authorizing the Secretary to continue making interest reduction
payments where the mortgage has been assigned to him, and inserted
``mortgage or part thereof on a'' after ``with respect to a''.
Subsec. (i)(1). Pub. L. 91-152, Sec. 107(b), substituted
``$125,000,000 on July 1, 1969, by $125,000,000 on July 1, 1970, and by
$170,000,000 on July 1, 1971'' for ``$100,000,000 on July 1, 1969, and
by $125,000,000 on July 1, 1970''.
Subsec. (i)(2). Pub. L. 91-152, Sec. 412(c), required the Secretary
to report semiannually instead of annually to the respective Committees
on Banking and Currency of the Senate and House of Representatives.
Subsec. (n). Pub. L. 91-152, Sec. 101(e), added subsec. (n).
Effective Date of 2000 Amendment
Amendment by Pub. L. 106-569 effective Dec. 27, 2000, unless
effectiveness or applicability upon another date certain is specifically
provided for, with provisions relating to effect of regulatory
authority, see section 803 of Pub. L. 106-569, set out as a note under
section 1701q of this title.
Effective Date of 1999 Amendment
Pub. L. 106-74, title V, Sec. 532(f), Oct. 20, 1999, 113 Stat. 1119,
provided that: ``This section [amending this section and enacting
provisions set out as a note below] shall take effect, and the
amendments made by this section are made and shall apply, on the date of
the enactment of this Act [Oct. 20, 1999].''
Effective Date of 1998 Amendment
Pub. L. 106-74, title V, Sec. 532(e), Oct. 20, 1999, 113 Stat. 1118,
provided that: ``Section 236(g) of the National Housing Act (12 U.S.C.
1715z-1(g)), as amended by section 227 of the Departments of Veterans
Affairs and Housing and Urban Development, and Independent Agencies
Appropriations Act, 1999 (Public Law 105-276; 112 Stat. 2490) shall be
effective on the date of the enactment of such Public Law 105-276 [Oct.
21, 1998], and any excess rental charges referred to in such section
that have been collected since such date of the enactment with respect
to projects with mortgages insured under section 207 of the National
Housing Act (12 U.S.C. 1713) may be retained by the project owner unless
the Secretary of Housing and Urban Development specifically provides
otherwise. The Secretary may return any excess charges remitted to the
Secretary since such date of the enactment.''
Effective Date of 1981 Amendment
Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section 371
of Pub. L. 97-35, set out as an Effective Date note under section 3701
of this title.
Effective Date of 1979 Amendment
Amendment by section 203(b) of Pub. L. 96-153 effective Dec. 21,
1979, and maximum amount of tenant contribution applicable, see section
203(c) of Pub. L. 96-153, set out as a note under section 1701s of this
title.
Effective Date of 1978 Amendment
Section 201(k), formerly (i), of Pub. L. 95-557, as redesignated by
Pub. L. 97-35, title III, Sec. 321(f)(2)(A), Aug. 13, 1981, 95 Stat.
400, provided that the amendment made by that section is effective Oct.
1, 1978.
Effective Date of 1977 Amendment; Applicability
Section 206(d) of Pub. L. 95-128 provided that: ``The amendments
made by this section [amending this section] shall become effective on
October 1, 1977, and shall apply to assistance payments pursuant to
section 236(f)(3) of the National Housing Act [subsec. (f)(3) of this
section] with respect only to periods commencing on or after such
date.''
Treatment of Excess Charges Previously Collected
Pub. L. 106-569, title VIII, Sec. 861(b), Dec. 27, 2000, 114 Stat.
3025, provided that: ``Any excess charges that a project owner may
retain pursuant to the amendments made by subsections (b) and (c) of
section 532 of the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 2000 (Public
Law 106-74; 113 Stat. 1116) [amending this section] that have been
collected by such owner since the date of the enactment of such
appropriations Act [Oct. 20, 1999] and that such owner has not remitted
to the Secretary of Housing and Urban Development may be retained by
such owner unless such Secretary otherwise provides. To the extent that
a project owner has remitted such excess charges to the Secretary since
such date of the enactment, the Secretary may return to the relevant
project owner any such excess charges remitted. Notwithstanding any
other provision of law, amounts in the Rental Housing Assistance Fund,
or heretofore or subsequently transferred from the Rental Housing
Assistance Fund to the Flexible Subsidy Fund, shall be available to make
such return of excess charges previously remitted to the Secretary,
including the return of excess charges referred to in section 532(e) of
such appropriations Act [see Effective Date of 1998 Amendment note
above].''
Rental Housing Assistance; Extension of Time Within Which To Submit
Application
Pub. L. 101-45, title II, June 30, 1989, 103 Stat. 127, provided:
``That notwithstanding the second sentence of such section 236(r) [12
U.S.C. 1715z-1(r)], an application shall be eligible for assistance
under such section if the mortgagee submits an application within five
hundred and forty-eight days after the effective date of this Act [June
30, 1989].''
Direct Financing Study by Secretary of Housing and Urban Development and
Secretary of the Treasury; Report to Congress; Transmittal Not Later
Than One Year After August 22, 1974
Section 822 of Pub. L. 93-383 directed Secretary of Housing and
Urban Development and Secretary of the Treasury to study feasibility of
financing programs authorized under section 236 of the National Housing
Act [this section] and section 802 of this Act [42 U.S.C. 1440] through
various financing methods, including direct loans from Federal Financing
Bank, with a view to determining whether there was any method that would
result in net savings to Federal Government (after taking into account
direct and indirect effects of such method) and to transmit to Congress
a report on study not later than one year after Aug. 22, 1974.
Transfer of Insurance of Mortgages Not Finally Endorsed for Insurance
Under Section 1715l(d)(3) of This Title
Section 201(c) of Pub. L. 90-448 provided that: ``The Secretary of
Housing and Urban Development is authorized, upon such terms and
conditions as he may prescribe, to transfer to section 236(j) of the
National Housing Act [subsec. (j) of this section] the insurance of a
mortgage which has not be [sic] finally endorsed for insurance under
section 221(d)(3) of such Act [section 1715l(d)(3) of this title] and
which has been approved for the below-market interest rate prescribed in
the proviso of section 221(d)(5) of such Act [section 1715l(d)(5) of
this title].''
Insurance of Mortgages Given To Refinance Mortgage Loans Made Under
Section 1701q of This Title
Section 201(d) of Pub. L. 90-448 provided that: ``The Secretary of
Housing and Urban Development is authorized, upon such terms and
conditions as he may prescribe, to insure under section 236(j) of the
National Housing Act [subsec. (j) of this section] a mortgage meeting
the requirements of such section which is given to refinance a mortgage
loan made under section 202 of the Housing Act of 1959 [section 1701q of
this title]: Provided, That the application for such insurance is filed
with the Secretary on or before the date of project completion, or
within such reasonable time thereafter as the Secretary may permit.''
Ceiling on Total Interest Reduction Payments in Any Fiscal Year
Pub. L. 90-608, ch. IV, Sec. 401, Oct. 21, 1968, 82 Stat. 1193,
provided in part that the total payments that may be required in any
fiscal year by all contracts entered into under section 236 of the
National Housing Act [this section] shall not exceed $25,000,000.
Pub. L. 91-47, title II, Sec. 201, July 22, 1969, 83 Stat. 53,
increased by $45,000,000 the limitation on total payments that may be
required in any fiscal year by all contracts entered into under section
236 of the National Housing Act (82 Stat. 498) [this section].
Section Referred to in Other Sections
This section is referred to in sections 1701s, 1701z-4, 1701z-11,
1715c, 1715n, 1715r, 1715z, 1715z-1a, 1715z-3, 1715z-6, 1715z-9, 1717,
1735c, 4109, 4119 of this title; title 26 sections 32, 42, 1250; title
31 section 1305; title 42 sections 1436a, 1436b, 1437n, 1490c, 4851b,
8011, 8231, 11905, 13641, 13664.
