§ 4110. — Incentives for transfer to qualified purchasers.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4110]
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. 4110. Incentives for transfer to qualified purchasers
(a) In general
With respect to any eligible low-income housing for which an owner
has submitted a second notice of intent under section 4106(d) of this
title to transfer the housing to a qualified purchaser, the owner shall
offer the housing for transfer to qualified purchasers as provided in
this section. The Secretary shall issue regulations describing the means
by which potential qualified purchasers shall be notified of the
availability of the housing for sale. The Secretary shall take into
account the Federal cost limits under section 4105(a) of this title for
the housing when providing incentives under section 4109(b)(2) and
(b)(3) of this title (pursuant to subsection (d)(3) of this section).
(b) Right of first offer to priority purchasers
(1) Negotiation period
For the 12-month period beginning on the receipt by the
Secretary of a second notice of intent under section 4106(d) of this
title with respect to such housing, the owner may offer to sell and
negotiate a sale of the housing only with priority purchasers. The
negotiated sale price may not exceed the preservation value of the
housing determined under section 4103(b)(2) of this title. The owner
or the purchaser shall submit a plan of action under section 4107 of
this title for any sale under this subsection, which shall include
any request for assistance under this section, upon the acceptance
of any bona fide offer meeting the requirements of this paragraph.
(2) Expression of interest
During such period, priority purchasers may submit written
notice to the Secretary stating their interest in acquiring the
housing. Such notice shall be made in the form and include such
information as the Secretary may prescribe.
(3) Information
Within 30 days of receipt of an expression of interest by a
priority purchaser, the Secretary shall provide such purchaser with
information on the assistance available from the Federal Government
to facilitate a transfer and the owner shall provide appropriate
information on the housing, as determined by the Secretary.
(c) Right of refusal for other qualified purchasers
If no bona fide offer to purchase any eligible low-income housing
subject to this section that meets the requirements of subsection (b) of
this section is made and accepted during the period under such
subsection, during the 3-month period beginning upon the expiration of
the 12-month period under subsection (b)(1) of this section, the owner
of the housing may offer to sell and may sell the housing only to
qualified purchasers. The negotiated sale price may not exceed the
preservation value of the housing determined under section 4103(b)(2) of
this title. The owner or purchaser shall submit a plan of action under
section 4107 of this title for any sale under this subsection, which
shall include any request for assistance under this section, upon the
acceptance of any bona fide offer meeting the requirements of this
paragraph.\1\
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\1\ So in original. Probably should be ``subsection.''
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(d) Assistance
(1) Approval
If the qualified purchaser is a resident council, the Secretary
may not approve a plan of action for assistance under this section
unless the council's proposed resident homeownership program meets
the requirements under section 4116 of this title. For all other
qualified purchasers, the Secretary may not approve the plan unless
the Secretary finds that the criteria for approval under section
4112 of this title have been satisfied.
(2) Amount
Subject to the availability of amounts approved in
appropriations Acts, the Secretary shall, for approvable plans of
action, provide assistance sufficient to enable qualified purchasers
(including all priority purchasers other than resident councils
acquiring under the homeownership program authorized by section 4116
of this title) to--
(A) acquire the eligible low-income housing from the current
owner for a purchase price not greater than the preservation
equity of the housing;
(B) pay the debt service on the federally-assisted mortgage
covering the housing;
(C) pay the debt service on any loan for the rehabilitation
of the housing;
(D) meet project operating expenses and establish adequate
reserves for the housing, and in the case of a priority
purchaser, meet project oversight costs;
(E) receive a distribution equal to an 8 percent annual
return on any actual cash investment (from sources other than
assistance provided under this title \2\) made to acquire or
rehabilitate the project;
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\2\ See References in Text note below.
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(F) in the case of a priority purchaser, receive a
reimbursement of all reasonable transaction expenses associated
with the acquisition, loan closing, and implementation of an
approved plan of action; and
(G) in the case of an approved resident homeownership
program, cover the costs of training for the resident council,
homeownership counseling and training, the fees for the
nonprofit entity or public agency working with the resident
council and costs related to relocation of tenants who elect to
move.
(3) Incentives
(A) In general
For all qualified purchasers of housing under this
subsection, the Secretary may provide assistance for an approved
plan of action in the form of 1 or more of the incentives
authorized under section 4109(b) of this title, except that the
incentive under such section 4109(b)(7) of this title may
include an acquisition loan under section 1715z-6(f) \2\ of this
title.
(B) Priority purchasers
Where the qualified purchaser is a priority purchaser, the
Secretary may provide assistance for an approved plan of action
(in the form of a grant) for each unit in the housing in an
amount, as determined by the Secretary, that does not exceed the
present value of the total of the projected published fair
market rentals for existing housing (established by the
Secretary under section 1437f(c) of title 42) for the next 10
years (or such longer period if additional assistance is
necessary to cover the costs referred to in paragraph (2)).
(Pub. L. 100-242, title II, Sec. 220, as added Pub. L. 101-625, title
VI, Sec. 601(a), Nov. 28, 1990, 104 Stat. 4257; amended Pub. L. 102-550,
title III, Sec. 307, Oct. 28, 1992, 106 Stat. 3764.)
References in Text
This title, referred to in subsec. (d)(2)(E), means title II of Pub.
L. 100-242, as amended by Pub. L. 101-625, title VI, Sec. 601(a), Nov.
28, 1990, 104 Stat. 4249, known as the Low-Income Housing Preservation
and Resident Homeownership Act of 1990, which is classified principally
to this chapter. For complete classification of this Act to the Code,
see Short Title note set out under section 4101 of this title and
Tables.
Section 1715z-6(f) of this title, referred to in subsec. (d)(3)(A),
was repealed by Pub. L. 104-204, title II, Sept. 26, 1996, 110 Stat.
2885.
Amendments
1992--Subsec. (d)(2). Pub. L. 102-550, Sec. 307(a), inserted
``(including all priority purchasers other than resident councils
acquiring under the homeownership program authorized by section 4116 of
this title)'' after ``purchasers''.
Subsec. (d)(2)(D). Pub. L. 102-550, Sec. 307(b), inserted before
semicolon at end ``, and in the case of a priority purchaser, meet
project oversight costs''.
Subsec. (d)(2)(E), (F). Pub. L. 102-550, Sec. 307(c), (d), amended
subpars. (E) and (F) generally. Prior to amendment, subpars. (E) and (F)
read as follows:
``(E) receive an adequate return (as determined by the Secretary) on
any actual cash investment made to acquire the project;
``(F) in the case of a priority purchaser, receive an adequate
reimbursement for transaction expenses relating to acquisition of the
housing, subject to approval by the Secretary; and''.
Subsec. (d)(3)(A). Pub. L. 102-550, Sec. 307(e), struck out ``any
residual receipts for the housing transfered [sic] to the selling owner
shall be deducted from the sale price of the housing under subsection
(b) or (c) of this section and'' after ``except that''.
Section Referred to in Other Sections
This section is referred to in sections 4102, 4103, 4104, 4105,
4106, 4107, 4111, 4112, 4114, 4116, 4119, 4142, 4143 of this title.
