§ 4104. — Annual authorized return and preservation rents.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4104]
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. 4104. Annual authorized return and preservation rents
(a) Annual authorized return
Pursuant to an appraisal under section 4103 of this title, the
Secretary shall determine the annual authorized return on the appraised
housing, which shall be equal to 8 percent of the preservation equity
(as such term is defined in section 4119(8) of this title).
(b) Preservation rents
The Secretary shall also determine the aggregate preservation rents
under this subsection for each project appraised under section 4103 of
this title. The aggregate preservation rents shall be used solely for
the purposes of comparison with Federal cost limits under section 4105
of this title. Actual rents received by an owner (or a qualified
purchaser) shall be determined pursuant to section 4109, 4110, or 4111
of this title. The aggregate preservation rents shall be established as
follows:
(1) Extension of affordability limits
The aggregate preservation rent for purposes of receiving
incentives pursuant to extension of the low-income affordability
restrictions under section 4109 of this title shall be the gross
potential income for the project, determined by the Secretary, that
would be required to support the following costs:
(A) The annual authorized return determined under subsection
(a) of this section.
(B) Debt service on any rehabilitation loan for the housing.
(C) Debt service on the federally-assisted mortgage for the
housing.
(D) Project operating expenses.
(E) Adequate reserves.
(2) Sale
The aggregate preservation rent for purposes of receiving
incentives pursuant to sale under section 4110 or 4111 of this title
shall be the gross income for the project determined by the
Secretary, that would be required to support the following costs:
(A) Debt service on the loan for acquisition of the housing.
(B) Debt service on any rehabilitation loan for the housing.
(C) Debt service on the federally-assisted mortgage for the
housing.
(D) Project operating expenses.
(E) Adequate reserves.
(Pub. L. 100-242, title II, Sec. 214, as added Pub. L. 101-625, title
VI, Sec. 601(a), Nov. 28, 1990, 104 Stat. 4251.)
Section Referred to in Other Sections
This section is referred to in sections 4105, 4106, 4109, 4111,
4119, 4122 of this title.
