II 

111TH CONGRESS 

1ST SESSION S. 1676 

To allow for use of existing Section 8 housing funds so as to preserve 

and revitalize affordable housing options for low-income individuals. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 16, 2009 

Mr. WYDEN (for himself and Mr. MERKLEY) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To allow for use of existing Section 8 housing funds so 

as to preserve and revitalize affordable housing options 

for low-income individuals. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Affordable Housing 

5 Preservation and Revitalization Act of 2009’’. 


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1 SEC. 2. AFFORDABLE HOUSING PRESERVATION AND REVI2 TALIZATION PROGRAM. 

3 Section 8 of the United States Housing Act of 1937 

4 (42 U.S.C. 1437f) is amended by adding at the end the 

5 following: 

6 ‘‘(ff) AFFORDABLE HOUSING PRESERVATION AND

7 REVITALIZATION PROGRAM.— 

8 ‘‘(1) IN GENERAL.—The Secretary of Housing 

9 and Urban Development shall ensure that funds in 

10 the residual receipts account of an eligible multi11 family housing property are transferred, at the time 

12 of a qualified sale or exchange, to a preservation en13 tity. 

14 ‘‘(2) PURPOSE.—The purpose of this subsection 

15 is to facilitate the transfer of multifamily housing 

16 projects with expiring housing assistance payments 

17 contracts to preservation entities that are committed 

18 to maintaining the affordability and preservation of 

19 such projects by allowing expanded access to existing 

20 residual receipts to assist with the acquisition and 

21 rehabilitation of the project. 

22 ‘‘(3) USE OF FUNDS.—A preservation entity 

23 that acquires an eligible multifamily housing prop24 erty through a qualified sale shall, subject to the ap25 proval of the housing agency, use the funds in the 


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1 residual receipts account transferred to it, or for its 

2 benefit— 

3 ‘‘(A) to pay for rehabilitation costs ap4 proved by the housing agency; 

5 ‘‘(B) to deposit funds into the replacement 

6 reserve account of the property; 

7 ‘‘(C) to pay for social and other services 

8 that directly benefit the tenants of such prop9 erty, but in any 1 year such payments may not 

10 exceed 10 percent of the balance of the residual 

11 receipts account of the property at the end of 

12 the prior fiscal year; 

13 ‘‘(D) to pay for costs associated with the 

14 acquisition of the property, but such payments 

15 may not exceed 50 percent of the amount in the 

16 residual receipts account of the property at the 

17 time of acquisition; and 

18 ‘‘(E) to pay for any other costs that have 

19 been approved by the housing agency and will 

20 directly benefit the tenants of the property. 

21 ‘‘(4) DEFINITIONS.—In this subsection, the fol22 lowing definitions shall apply: 

23 ‘‘(A) AFFORDABILITY AND USE RESTRIC24 TIONS.—The term ‘affordability and use restric25 tions’ means the affordability and use restricVerDate Nov 24 2008 01:11 Sep 17, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1676.IS S1676

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1 tions in connection with project-based housing 

2 assistance payments made under this section. 

3 ‘‘(B) EXTENDED USE PERIOD.—The term 

4 ‘extended use period’ means the later of— 

5 ‘‘(i) 30 years after the close of the 

6 sale of an eligible multifamily housing 

7 property to a preservation entity, or 

8 ‘‘(ii) upon the expiration of the re9 maining useful life of the eligible multi10 family property taking into account any re11 habilitation undertaken in connection with 

12 the acquisition of said property by the 

13 preservation entity, as such remaining use14 ful life is determined by the housing agen15 cy, 

16 provided that, such extended use period shall 

17 terminate in the event that the Secretary of 

18 Housing and Urban Development is unable to 

19 provide Section 8 assistance on terms at least 

20 as advantageous to the preservation entity as 

21 exist at the time of the acquisition of such eligi22 ble multifamily housing property. 

23 ‘‘(C) ELIGIBLE MULTIFAMILY HOUSING

24 PROPERTY.—The term ‘eligible multifamily 

25 housing property’ means a project that— 


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1 ‘‘(i) is receiving project-based housing 

2 assistance payments under this section; 

3 and 

4 ‘‘(ii) was financed pursuant to part 

5 883 of title 24, Code of Federal Regula6 tions, on or after February 29, 1980. 

7 ‘‘(D) HOUSING AGENCY.—The term ‘hous8 ing agency’ means, with respect to any eligible 

9 multifamily housing property, the housing agen10 cy which administers housing assistance with 

11 respect to such property. 

12 ‘‘(E) PRESERVATION ENTITY.—The term 

13 ‘preservation entity’ means an entity— 

14 ‘‘(i) that is— 

15 ‘‘(I) a nonprofit corporation 

16 under State law that is exempt from 

17 Federal income taxation pursuant to 

18 paragraph (3) or (4) of section 501(c) 

19 of the Internal Revenue Code of 1986; 

20 or 

21 ‘‘(II) a limited partnership or 

22 limited liability company where the 

23 sole general partner or sole managing 

24 member of such ownership entity is a 

25 nonprofit corporation under State law 


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1 which is exempt from Federal income 

2 taxation pursuant to paragraphs (3) 

3 or (4) of section 501(c) of the Inter4 nal Revenue Code of 1986; and 

5 ‘‘(ii) approved by the housing agency 

6 that has the capacity to acquire and pre7 serve an eligible multifamily housing prop8 erty. 

9 ‘‘(F) QUALIFIED SALE.— 

10 ‘‘(i) IN GENERAL.—The term ‘quali11 fied sale’ means the sale of an eligible mul12 tifamily housing property to a preservation 

13 entity which agrees to maintain afford14 ability and use restrictions regarding the 

15 property that are— 

16 ‘‘(I) for a term of not less than 

17 the extended use period; and 

18 ‘‘(II) legally enforceable. 

19 ‘‘(ii) FUTURE APPLICABILITY OF RE20 STRICTIONS.—The restrictions under sub21 paragraph (A) shall be— 

22 ‘‘(I) binding on all successors 

23 and assigns of the preservation entity; 

24 and 


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1 ‘‘(II) recorded as a restrictive 

2 covenant on the property pursuant to 

3 State law. 

4 ‘‘(G) RESIDUAL RECEIPTS.—The term ‘re5 sidual receipts’ means— 

6 ‘‘(i) funds generated by a property in 

7 excess of the amount needed for operating 

8 expenses, operating reserve requirements, 

9 and allowable distributions to project own10 ers; and 

11 ‘‘(ii) includes any other funds that the 

12 Secretary, in his or her discretion, des13 ignates as residual receipts. 

14 ‘‘(5) RESIDUAL RECEIPTS NOT TREATED AS

15 FEDERAL FUNDS.—For the purposes of section 42 

16 of the Internal Revenue Code of 1986, residual re17 ceipts used or transferred under this section shall 

18 not be considered Federal funds.’’. 

Æ 


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