§ 4103. — Appraisal and preservation value of eligible lowincome 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: 12USC4103]
TITLE 12--BANKS AND BANKING
CHAPTER 42--LOW-INCOME HOUSING PRESERVATION AND RESIDENT HOMEOWNERSHIP
SUBCHAPTER I--PREPAYMENT OF MORTGAGES INSURED UNDER NATIONAL HOUSING ACT
Sec. 4103. Appraisal and preservation value of eligible low-
income housing
(a) Appraisal
Upon receiving notice of intent regarding an eligible low-income
housing project indicating an intent to extend the low-income
affordability restrictions under section 4109 of this title or transfer
the housing under section 4110 of this title, the Secretary shall
provide for determination of the preservation value of the housing, as
follows:
(1) Appraisers
The preservation value shall be determined by 2 independent
appraisers, one of whom shall be selected by the Secretary and one
of whom shall be selected by the owner. The appraisals shall be
conducted not later than 4 months after filing the notice of intent
under section 4102 of this title, and the owner shall submit to the
Secretary the appraisal made by the owner's selected appraiser not
later than 90 days after receipt of the notice under paragraph (2).
If the 2 appraisers fail to agree on the preservation value, and the
Secretary and the owner also fail to agree on the preservation
value, the Secretary and the owner shall jointly select and jointly
compensate a third appraiser, whose appraisal shall be binding on
the parties.
(2) Notice
Not later than 30 days after the filing of a notice of intent to
seek incentives under section 4109 of this title or transfer the
property under section 4110 of this title, the Secretary shall
provide written notice to the owner filing the notice of intent of--
(A) the need for the owner to acquire an appraisal of the
property under paragraph (1);
(B) the rules and guidelines for such appraisals;
(C) the filing deadline for submission of the appraisal
under paragraph (1);
(D) the need for an appraiser retained by the Secretary to
inspect the housing and project financial records; and
(E) any delegation to the appropriate State agency by the
Secretary of responsibilities regarding the appraisal.
(3) Timeliness
The Secretary may approve a plan of action to receive incentives
under section 4109 or 4110 of this title only based upon an
appraisal conducted in accordance with this subsection that is not
more than 30 months old.
(b) Preservation value
For purposes of this subchapter, the preservation value of eligible
low-income housing appraised under this section shall be--
(1) for purposes of extending the low-income affordability
restrictions and receiving incentives under section 4109 of this
title, the fair market value of the property based on the highest
and best use of the property as residential rental housing; and
(2) for purposes of transferring the property under section 4110
or 4111 of this title, the fair market value of the housing based on
the highest and best use of the property.
(c) Guidelines
The Secretary shall provide written guidelines for appraisals of
preservation value, which shall assume repayment of the existing
federally assisted mortgage, termination of the existing low-income
affordability restrictions, simultaneous termination of any Federal
rental assistance, and costs of compliance with any State or local laws
of general applicability. The guidelines may permit reliance upon
assessments of rehabilitation needs and other conversion costs
determined by an appropriate State agency, as determined by the
Secretary. The guidelines shall instruct the appraiser to use the
greater of actual project operating expenses at the time of the
appraisal (based on the average of the actual project operating expenses
during the preceding 3 years) or projected operating expenses after
conversion in determining preservation value. The guidelines established
by the Secretary shall not be inconsistent with customary appraisal
standards. The guidelines shall also meet the following requirements:
(1) Residential rental value
In the case of preservation value determined under subsection
(b)(1) of this section, the guidelines shall assume conversion of
the housing to market-rate rental housing and shall establish
methods for (A) determining rehabilitation expenditures that would
be necessary to bring the housing up to quality standards required
to attract and sustain a market rate tenancy upon conversion, and
(B) assessing other costs that the owner could reasonably be
expected to incur if the owner converted the property to market-rate
multifamily rental housing.
(2) Highest and best use value
In the case of preservation value determined under subsection
(b)(2) of this section, the guidelines shall assume conversion of
the housing to highest and best use for the property and shall
establish methods for (A) determining any rehabilitation
expenditures that would be necessary to convert the housing to such
use, and (B) assessing other costs that the owner could reasonably
be expected to incur if the owner converted the property to its
highest and best use.
(Pub. L. 100-242, title II, Sec. 213, as added Pub. L. 101-625, title
VI, Sec. 601(a), Nov. 28, 1990, 104 Stat. 4250; amended Pub. L. 102-550,
title III, Sec. 302, Oct. 28, 1992, 106 Stat. 3763.)
Amendments
1992--Subsec. (c). Pub. L. 102-550 inserted ``simultaneous
termination of any Federal rental assistance,'' before ``and costs'' in
first sentence.
Section Referred to in Other Sections
This section is referred to in sections 4104, 4105, 4106, 4110,
4111, 4117, 4119 of this title.
