§ 4109. — Incentives to extend lowincome use.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4109]
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. 4109. Incentives to extend low-income use
(a) Agreements by Secretary
After approving a plan of action from an owner of eligible low-
income housing that includes the owner's plan to extend the low-income
affordability restrictions of the housing, the Secretary shall, subject
to the availability of appropriations for such purpose, enter into such
agreements as are necessary to enable the owner to receive (for each
year after the approval of the plan of action) the annual authorized
return for the housing determined under section 4104(a) of this title,
pay debt service on the federally-assisted mortgage covering the
housing, pay debt service on any loan for rehabilitation of the housing,
and meet project operating expenses and establish adequate reserves. The
Secretary shall take into account the Federal cost limits under section
4105(a) of this title for the housing when providing incentives under
subsections \1\ (b)(2) and (3) of this section. The Secretary shall take
such actions as are necessary to ensure that owners receive the annual
authorized return for the housing determined under section 4104(a) of
this title during the period in which rent increases are phased in as
provided in section 4112(a)(2)(E) of this title, including (in order of
preference) (1) allowing the owner access to residual receipt accounts
(pursuant to subsection (b)(1) of this section), (2) deferring
remittance of excess rent payments, and (3) providing an increase in
rents permitted under an existing contract under section 1437f of title
42 (pursuant to subsection (b)(2) of this section).
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\1\ So in original. Probably should be ``subsection''.
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(b) Permissible incentives
Such agreements may include one or more of the following incentives:
(1) Increased access to residual receipts accounts.
(2) Subject to the availability of amounts provided in
appropriations Acts--
(A) an increase in the rents permitted under an existing
contract under section 1437f of title 42, or
(B) additional assistance under section 1437f of title 42 or
an extension of any project-based assistance attached to the
housing; and
(3) An increase in the rents on units occupied by current
tenants as permitted under section 4112 of this title.
(4) Financing of capital improvements under section 201 of the
Housing and Community Development Amendments of 1978.
(5) Financing of capital improvements through provision of
insurance for a second mortgage under section 1715z-6 of this title.
(6) In the case of housing defined in section 4119(1)(A)(iii) of
this title, redirection of the Interest Reduction Payment subsidies
to a second mortgage.
(7) Access by the owner to a portion of the preservation equity
in the housing through provision of insurance for a second mortgage
loan insured under section 1715z-6(f) \2\ of this title or a non-
insured mortgage loan approved by the Secretary and the mortgagee.
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\2\ See References in Text note below.
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(8) Other incentives authorized in law.
With respect to any housing with a mortgage insured or otherwise
assisted pursuant to section 1715z-1 of this title, the provisions of
subsections (f) and (g) of section 1715z-1 of this title
notwithstanding, the fair market rental charge for each unit in such
housing may be increased in accordance with this subsection, but the
owner shall pay to the Secretary all rental charges collected in excess
of the basic rental charges, in an amount not greater than the fair
market rental charges as such charges would have been established under
section 1715z-1(f) of this title absent the requirements of this
paragraph.
(Pub. L. 100-242, title II, Sec. 219, 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. 306, Oct. 28, 1992, 106 Stat. 3764.)
References in Text
Section 201 of the Housing and Community Development Amendments of
1978, referred to in subsec. (b)(4), is section 201 of Pub. L. 95-557,
title II, Oct. 31, 1978, 92 Stat. 2084, which enacted section 1715z-1a
of this title and amended section 1715z-1 of this title.
Section 1715z-6(f) of this title, referred to in subsec. (b)(7), was
repealed by Pub. L. 104-204, title II, Sept. 26, 1996, 110 Stat. 2885.
Amendments
1992--Subsec. (a). Pub. L. 102-550 inserted ``(for each year after
the approval of the plan of action)'' after ``receive'' and inserted at
end ``The Secretary shall take such actions as are necessary to ensure
that owners receive the annual authorized return for the housing
determined under section 4104(a) of this title during the period in
which rent increases are phased in as provided in section 4112(a)(2)(E)
of this title, including (in order of preference) (1) allowing the owner
access to residual receipt accounts (pursuant to subsection (b)(1) of
this section), (2) deferring remittance of excess rent payments, and (3)
providing an increase in rents permitted under an existing contract
under section 1437f of title 42 (pursuant to subsection (b)(2) of this
section).''
Study of Projects Assisted Under Flexible Subsidy Program
Section 318 of Pub. L. 102-550 provided that:
``(a) Study.--The Secretary shall conduct a study of housing
projects that (1) are assisted under section 236 of the National Housing
Act [12 U.S.C. 1715z-1] or the proviso of section 221(d)(5) of such Act
[12 U.S.C. 1715l(d)(5)], and (2) have received or are receiving
assistance under section 201 of the Housing and Community Development
Amendments of 1978 [see References in Text note above], to determine the
cost of providing such projects with incentives under the Low-Income
Housing Preservation and Resident Homeownership Act of 1990 [see Short
Title note set out under section 4101 of this title]. The study shall
examine any projects portions of which assisted under such section 236
that are assisted primarily by State agencies.
``(b) Report.--The Secretary shall submit a report to the Congress
regarding any findings and conclusions of the study under subsection (a)
not later than the expiration of the 1-year period beginning on the date
of the enactment of this Act [Oct. 28, 1992].''
Section Referred to in Other Sections
This section is referred to in sections 4102, 4103, 4104, 4105,
4106, 4107, 4110, 4111, 4112, 4114, 4119 of this title.
