§ 4108. — Prepayment and voluntary termination.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4108]
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. 4108. Prepayment and voluntary termination
(a) Approval
The Secretary may approve a plan of action that provides for
termination of the low-income affordability restrictions through
prepayment of the mortgage or voluntary termination of the mortgage
insurance contract only upon a written finding that--
(1) implementation of the plan of action will not--
(A) materially increase economic hardship for current
tenants, and will not in any event result in (i) a monthly
rental payment by any current tenant that exceeds 30 percent of
the monthly adjusted income of the tenant or an increase in the
monthly rental payment in any year that exceeds 10 percent
(whichever is lower), or (ii) in the case of a current tenant
who already pays more than such percentage, an increase in the
monthly rental payment in any year that exceeds the increase in
the Consumer Price Index or 10 percent (whichever is lower); or
(B) involuntarily displace current tenants (except for good
cause) where comparable and affordable housing is not readily
available determined without regard to the availability of
Federal housing assistance that would address any such hardship
or involuntary displacement; and
(2) the supply of vacant, comparable housing is sufficient to
ensure that such prepayment will not materially affect--
(A) the availability of decent, safe, and sanitary housing
affordable to low-income and very low-income families or persons
in the area that the housing could reasonably be expected to
serve;
(B) the ability of low-income and very low-income families
or persons to find affordable, decent, safe, and sanitary
housing near employment opportunities; or
(C) the housing opportunities of minorities in the community
within which the housing is located.
(b) Standards and procedure for written findings
(1) Standards
A written finding under subsection (a) of this section shall be
based on an analysis of the evidence considered by the Secretary in
reaching such finding and shall contain documentation of such
evidence.
(2) Procedure and criteria
The Secretary shall, by regulation, develop (A) a procedure for
determining whether the conditions under paragraphs (1) and (2) of
subsection (a) of this section exist, (B) requirements for evidence
on which such determinations are based, and (C) criteria on which
such determinations are based.
(c) Disapproval
If the Secretary determines a plan of action to prepay a mortgage or
terminate an insurance contract fails to meet the requirements of
subsection (a) of this section, the Secretary shall disapprove the plan,
the notice of intent filed under section 4102 of this title by such
owner shall not be effective for purposes of this subchapter, and the
owner may, in order to receive incentives under this subchapter, file a
new notice of intent under such section.
(Pub. L. 100-242, title II, Sec. 218, as added Pub. L. 101-625, title
VI, Sec. 601(a), Nov. 28, 1990, 104 Stat. 4256; amended Pub. L. 102-550,
title III, Sec. 305, Oct. 28, 1992, 106 Stat. 3763.)
Amendments
1992--Subsecs. (b), (c). Pub. L. 102-550 added subsec. (b) and
redesignated former subsec. (b) as (c).
Section Referred to in Other Sections
This section is referred to in sections 4102, 4106, 4107 of this
title.
