§ 4105. — Federal cost limits and limitations on plans of action.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4105]
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. 4105. Federal cost limits and limitations on plans of
action
(a) Determination of relationship to Federal cost limits
(1) Initial determination
For each eligible low-income housing project appraised under
section 4103(a) of this title, the Secretary shall determine whether
the aggregate preservation rents for the project determined under
paragraph (1) or (2) of section 4104(b) of this title exceed the
amount determined by multiplying 120 percent of the fair market
rental (established under section 1437f(c) of title 42) for the
market area in which the housing is located by the number of
dwelling units in the project (according to appropriate unit sizes).
(2) Relevant local markets
If the aggregate preservation rents for a project exceeds the
amount determined under paragraph (1), the Secretary shall determine
whether such aggregate rents exceed the amount determined by
multiplying 120 percent of the prevailing rents in the relevant
local market area in which the housing is located by the number of
units in the project (according to the appropriate unit sizes). A
relevant local market area shall be an area geographically smaller
than a market area established by the Secretary under section
1437f(c)(1) of title 42 that is identifiable as a distinct rental
market area. The Secretary may rely on the appraisal to determine
the relevant local market areas and prevailing rents in such local
areas and any other information the Secretary determines is
appropriate.
(3) Effect
For purposes of this subchapter, the aggregate preservation
rents shall be considered to exceed the Federal cost limits under
this subsection only if the aggregate preservation rents exceed the
amount determined under paragraph (1) and the amount determined
under paragraph (2).
(b) Limitations on action pursuant to Federal cost limits
(1) Housing within Federal cost limits
If the aggregate preservation rents for an eligible low-income
housing project do not exceed the Federal cost limit, the owner may
not prepay the mortgage on the housing or terminate the insurance
contract with respect to the housing, except as permitted under
section 4114 of this title. The owner may--
(A) file a plan of action under section 4107 of this title
to receive incentives under section 4109 of this title; or
(B) file a second notice of intent under section 4106(d) of
this title indicating an intention to transfer the housing under
section 4110 of this title and take actions pursuant to such
section.
(2) Housing exceeding Federal cost limits
If the aggregate preservation rents for an eligible low-income
housing project exceed the Federal cost limit, the owner may--
(A) file a plan of action under section 4107 of this title
to receive incentives under section 4109 of this title if the
owner agrees to accept incentives under such sections in an
amount that shall not exceed the Federal cost limit;
(B) file a second notice of intent under section 4106(d) of
this title indicating an intention to transfer the housing under
section 4110 of this title and take actions pursuant to such
section if the owner agrees to transfer the housing at a price
that shall not exceed the Federal cost limit; or
(C) file a second notice of intent under section 4106(d) of
this title indicating an intention to prepay the mortgage or
voluntarily terminate the insurance, subject to the mandatory
sale provisions under section 4111 of this title.
(Pub. L. 100-242, title II, Sec. 215, as added Pub. L. 101-625, title
VI, Sec. 601(a), Nov. 28, 1990, 104 Stat. 4252; amended Pub. L. 102-550,
title III, Sec. 317(a)(1), Oct. 28, 1992, 106 Stat. 3772.)
Amendments
1992--Subsec. (a)(2). Pub. L. 102-550 made technical amendment to
reference to section 1437f(c)(1) of title 42 to reflect correction of
corresponding provision of original act.
Section Referred to in Other Sections
This section is referred to in sections 4104, 4106, 4109, 4110, 4119
of this title.
