§ 1715z-15. — Limitation on prepayment of mortgages on multifamily rental housing.
[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-15]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-15. Limitation on prepayment of mortgages on
multifamily rental housing
(a) Acceptance of offer to prepay; qualifications
During any period in which an owner of a multifamily rental housing
project is required to obtain the approval of the Secretary for
prepayment of the mortgage, the Secretary shall not accept an offer to
prepay the mortgage on such project or permit a termination of an
insurance contract pursuant to section 1715t of this title unless--
(1) the Secretary has determined that such project is no longer
meeting a need for rental housing for lower income families in the
area;
(2) the Secretary (A) has determined that the tenants have been
notified of the owner's request for approval of a prepayment; (B)
has provided the tenants with an opportunity to comment on the
owner's request; and (C) has taken such comments into consideration;
and
(3) the Secretary has ensured that there is a plan for providing
relocation assistance for adequate, comparable housing for any lower
income tenant who will be displaced as a result of the prepayment
and withdrawal of the project from the program.
(b) Approval prior to foreclosure
A mortgagee may foreclose the mortgage on, or acquire by deed in
lieu of foreclosure, any eligible low-income housing project (as such
term is defined in section 4119 of this title) only if the mortgagee
also conveys title to the project to the Secretary in connection with a
claim for insurance benefits.
(c) ``Lower income families'' defined
For purposes of this section, the term ``lower income families'' has
the meaning given such term in section 1437a(b)(2) of title 42.
(June 27, 1934, ch. 847, title II, Sec. 250, as added Pub. L. 98-181,
title IV, Sec. 433, Nov. 30, 1983, 97 Stat. 1221; amended Pub. L. 100-
242, title II, Sec. 261, Feb. 5, 1988, 101 Stat. 1890; Pub. L. 101-235,
title II, Sec. 202(d)(1), Dec. 15, 1989, 103 Stat. 2037; Pub. L. 101-
625, title VI, Sec. 602(b), (c), Nov. 28, 1990, 104 Stat. 4277.)
Amendments
1990--Subsec. (b). Pub. L. 101-625, Sec. 602(b), amended subsec. (b)
generally. Prior to amendment, subsec. (b) read as follows: ``In the
case of a project assisted under section 1715z-1 of this title or the
proviso to section 1715l(d)(5) of this title, section 101 of the Housing
and Urban Development Act of 1965, or section 1701q of this title where
the owner has the right to prepay the mortgage covering the assisted
project without the Secretary's approval, the Secretary shall give a
priority for additional assistance under section 1437f of title 42 and
section 201 of the Housing and Community Development Amendments of 1978
to tenants and applicants to become tenants of the project, if--
``(1) funds to provide such additional assistance are available;
and
``(2) the Secretary determines that making such additional
assistance available to the project is necessary to prevent the
owner from prepaying the mortgage.''
Subsecs. (c), (d). Pub. L. 101-625, Sec. 602(c), redesignated
subsec. (d) as (c) and struck out former subsec. (c) which read as
follows: ``Any owner of a multifamily rental housing project referred to
in subsection (b) of this section who receives additional assistance
under section 1437f of title 42 under the priority established in
subsection (b) of this section shall--
``(1) fully utilize the assistance which is available;
``(2) grant a priority to applicants to become tenants who have
the lowest incomes; and
``(3) maintain the low-income character of the project for a
period at least equal to the remaining term of the project mortgage
to the extent that assistance is provided.''
1989--Subsec. (a). Pub. L. 101-235 inserted ``or permit a
termination of an insurance contract pursuant to section 1715t of this
title'' after second reference to ``project''.
1988--Subsec. (a)(1). Pub. L. 100-242 struck out ``or that the needs
of lower income families in such project can more efficiently and
effectively be met through other Federal housing assistance taking into
account the remaining time the project could meet such needs'' after
``families in the area''.
Section Referred to in Other Sections
This section is referred to in section 1715t of this title.
