SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Mark-to-Market 
Extension Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
Sec. 4. Extension of Mark-to-Market program.
Sec. 5. Exception rents.
Sec. 6. Otherwise eligible projects.
Sec. 7. Disaster-damaged eligible projects.
Sec. 8. Period of eligibility for nonprofit debt relief.
Sec. 9. Effective date.

SEC. 2. PURPOSES.

    The purpose of this Act is to--
            (1) continue the progress of the Multifamily Assisted 
        Housing Reform and Affordability Act of 1997, as amended by the 
        Mark-To-Market Extension Act of 2001;
            (2) expand eligibility for Mark-to-Market restructuring so 
        as to further the preservation of affordable housing in a cost-
        effective manner; and
            (3) provide for the preservation and rehabilitation of 
        projects damaged by Hurricanes Katrina, Rita, and Wilma, or by 
        other natural disasters.

SEC. 3. DEFINITIONS.

    Section 512 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding 
at the end the following:
            ``(20) Disaster-damaged eligible project.--
                    ``(A) In general.--The term `disaster-damaged 
                eligible project' means an otherwise eligible 
                multifamily housing project--
                            ``(i) that is located in a county that was 
                        designated a major disaster area on or after 
                        January 1, 2005, by the President pursuant to 
                        title IV of the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 U.S.C. 
                        5121 et seq.);
                            ``(ii) whose owner carried casualty and 
                        liability insurance covering such project in an 
                        amount required by the Secretary;
                            ``(iii) that suffered damages not covered 
                        by such insurance that the Secretary determines 
                        is likely to exceed $5,000 per unit in 
                        connection with the natural disaster that was 
                        the subject of the designation described in 
                        subparagraph (A); and
                            ``(iv) whose owner requests restructuring 
                        of the project not later than 2 years after the 
                        date that such damage occurred.
                    ``(B) Rule of construction.--A disaster-damaged 
                eligible project shall be eligible for amounts under 
                this Act without regard to the relationship between 
                rent levels for the assisted units in such project and 
                comparable rents for the relevant market area.''.

SEC. 4. EXTENSION OF MARK-TO-MARKET PROGRAM.

    Section 579 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by striking 
``October 1, 2006'' each place that term appears and inserting 
``October 1, 2011''.

SEC. 5. EXCEPTION RENTS.

    Section 514(g)(2) of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended--
            (1) by inserting ``disaster-damaged eligible projects and'' 
        after ``waive this limit''; and
            (2) by striking ``five percent'' and inserting ``9 
        percent''.

SEC. 6. OTHERWISE ELIGIBLE PROJECTS.

    Section 514 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding 
at the end the following:
    ``(i) Other Eligible Projects.--
            ``(1) In general.--Notwithstanding any other provision of 
        this subtitle, a project that meets the requirements of 
        subparagraphs (B) and (C) of section 512(2) but does not meet 
        the requirements of subparagraph (A) of section 512(2), may be 
        treated as an eligible multifamily housing project on an 
        exception basis if the Secretary determines, subject to 
        paragraph (2), that such treatment is necessary to preserve the 
        project in the most cost-effective manner in relation to other 
        alternative preservation options.
            ``(2) Owner request.--
                    ``(A) Request required.--The Secretary shall not 
                treat an otherwise eligible project described under 
                paragraph (1) as an eligible multifamily housing 
                project unless the owner of the project requests such 
                treatment.
                    ``(B) No adverse treatment if no request made.--If 
                the owner of a project does not make a request under 
                subparagraph (A), the Secretary shall not withhold from 
                such project any other available preservation option.
            ``(3) Cancellation.--
                    ``(A) Timing.--At any time prior to the completion 
                of a mortgage restructuring under this subtitle, the 
                owner of a project may--
                            ``(i) withdraw any request made under 
                        paragraph (2)(A); and
                            ``(ii) pursue any other option with respect 
                        to the renewal of such owner's section 8 
                        contract pursuant to any applicable statute or 
                        regulation.
                    ``(B) Documentation.--If an owner of a project 
                withdraws such owner's request and pursues other 
                renewal options under this paragraph, such owner shall 
                be entitled to submit documentation or other 
                information to replace the documentation or other 
                information used during processing for mortgage 
                restructuring under this subtitle.
            ``(4) Limitation.--The Secretary may exercise the authority 
        to treat projects as eligible multifamily housing projects 
        pursuant to this subsection only to the extent that the number 
        of units in such projects do not exceed 10 percent of all units 
        for which mortgage restructuring pursuant to section 517 is 
        completed.''.

SEC. 7. DISASTER-DAMAGED ELIGIBLE PROJECTS.

    (a) Market Rent Determinations.--Section 514(g)(1)(B) of the 
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 
U.S.C. 1473f note) is amended by striking ``determined, are equal'' and 
inserting the following: ``determined--
                            ``(i) with respect to a disaster-damaged 
                        eligible property, are equal to 100 percent of 
                        the fair market rents for the relevant market 
                        area (as such rents were in effect at the time 
                        of such disaster; and
                            ``(ii) with respect to other eligible 
                        multifamily housing projects, are equal''.
    (b) Owner Investment.--Section 517(c) of the Multifamily Assisted 
Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is 
amended by adding at the end the following:
            ``(3) Properties damaged by natural disasters.--With 
        respect to a disaster-damaged eligible property, the owner 
        contribution toward rehabilitation needs shall be determined in 
        accordance with paragraph (2)(C).''.

SEC. 8. PERIOD OF ELIGIBILITY FOR NONPROFIT DEBT RELIEF.

    Section 517(a)(5) of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding 
at the end the following: ``If such purchaser acquires such project 
subsequent to the date of recordation of the affordability agreement 
described in section 514(e)(6)--
            ``(1) such purchaser shall acquire such project on or 
        before the later of--
                    ``(A) 5 years after the date of recordation of the 
                affordability agreement; or
                    ``(B) 2 years after the date of enactment of the 
                Mark-to-Market Extension Act of 2007; and
            ``(2) the Secretary shall have received, and determined 
        acceptable, such purchaser's application for modification, 
        assignment, or forgiveness prior to the acquisition of the 
        project by such purchaser.''.

SEC. 9. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
the earlier of--
            (1) the date of enactment of this Act; or
            (2) September 30, 2007.
Mark-to-Market Extension Act of 2007 - Amends the Multifamily Assisted Housing Reform and Affordability Act of 1997 to reauthorize through FY2011: (1) the Federal Housing Administration (FHA)-insured Multifamily Housing Mortgage and Housing Assistance Restructuring (Mark-to-Market) program; and (2) the Office of Multifamily Housing Assistance Restructuring.

Permits the Secretary of Housing and Urban Development to waive rent level limits for: (1) disaster-damaged eligible projects; and (2) up to 9% (currently 5%) of all units subject to restructured mortgages in any fiscal year, based on certain findings of special need.

Redefines multifamily housing project eligible for the Mark-to-Market program to authorize eligibility treatment, upon owner request, for certain projects whose rents do not, on an average per unit or per room basis, exceed the rent of comparable properties in the same market area, if the Secretary determines that such treatment is necessary to preserve a project in the most cost-effective manner in relation to other alternative preservation options.

Requires each mortgage restructuring and rental assistance sufficiency plan to determine, for units assisted with project-based assistance in eligible multifamily housing projects, adjusted rent levels for disaster-damaged eligible projects equal to 100% of the fair market rents for the relevant market area.

Revises requirements for an approved mortgage restructuring and rental assistance sufficiency plan with respect to modification or forgiveness of all or part of a second mortgage held by the Secretary (debt relief) if the project concerned is acquired by a tenant organization or tenant-endorsed community-based nonprofit or public agency.

 Sets forth requirements for alternative periods of eligibility for such nonprofit debt relief if the purchaser acquires the project subsequent to the date of recordation of the related affordability agreement.
To extend for 5 years the Mark-to-Market program of the Department of Housing and Urban Development.