§ 4114. — Permissible prepayment or voluntary termination and modification of commitments.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4114]
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. 4114. Permissible prepayment or voluntary termination and
modification of commitments
(a) In general
Notwithstanding any limitations on prepayment or voluntary
termination under this subchapter, an owner may terminate the low-income
affordability restrictions through prepayment or voluntary termination,
subject to compliance with the provisions of section 4113 of this title,
under one of the following circumstances:
(1)(A) The Secretary approves a plan of action under section
4109(a) of this title, but does not provide the assistance approved
in such plan during the 15-month period beginning on the date of
approval.
(B) After the date that the housing would have been eligible for
prepayment pursuant to the terms of the mortgage (notwithstanding
this subchapter), the Secretary approves a plan of action under
section 4110 or 4111 of this title, but does not provide the
assistance approved in such plan before the earlier of (i) the
expiration of the 2-month period beginning on the commencement of
the 1st fiscal year beginning after such approval, or (ii) the
expiration of the 6-month period beginning on the date of approval.
(C) The Secretary approves a plan of action under section 4110
or 4111 of this title for any eligible low-income housing not
covered by subparagraph (B), but does not provide the assistance
approved in such plan before the earlier of (i) the expiration of
the 2-month period beginning on the commencement of the 1st fiscal
year beginning after such approval, or (ii) the expiration of the 9-
month period beginning on the date of approval.
(2) An owner who intended to transfer the housing to a qualified
purchaser under section 4110 or 4111 of this title, and fully
complied with the provisions of such section, did not receive any
bona fide offers from any qualified purchasers within the applicable
time periods.
In the event that the purchaser under the plan of action is unable to
consummate the purchase for reasons other than the failure of the
Secretary to provide incentives, an owner may terminate the low-income
affordability restrictions through prepayment or voluntary termination
subject to the provisions of sections 4110 and 4111 of this title.
(b) Section 1437f rental assistance
When providing rental assistance under section 1437f of title 42,
the Secretary may enter into a contract with an owner, contingent upon
the future availability of appropriations for the purpose of renewing
expiring contracts for rental assistance as provided in appropriations
Acts, to extend the term of such rental assistance for such additional
period or periods necessary to carry out an approved plan of action. The
contract and the approved plan of action shall provide that, if the
Secretary is unable to extend the term of such rental assistance or is
unable to develop a revised package of incentives providing benefits to
the owner comparable to those received under the original approved plan
of action, the Secretary, upon the request of the owner, shall take the
following actions (subject to the limitations under the following
paragraphs):
(1) Modification of commitments
Modify the binding commitments made pursuant to section
4112(a)(2) of this title that are dependent on such rental
assistance.
(2) Termination of plan of action
Permit the owner to prepay the mortgage and terminate the plan
of action and any implementing use agreements or restrictions, but
only if the owner agrees in writing to comply with provisions of
section 4113 of this title.
At least 30 days before making a request under this subsection, an owner
shall notify the Secretary of the owner's intention to submit the
request. The Secretary shall have a period of 90 days following receipt
of such notice to take action to extend the rental assistance contract
and to continue the binding commitments under section 4112(a)(2) of this
title.
(Pub. L. 100-242, title II, Sec. 224, as added Pub. L. 101-625, title
VI, Sec. 601(a), Nov. 28, 1990, 104 Stat. 4265.)
Section Referred to in Other Sections
This section is referred to in sections 4101, 4105 of this title.
