IB 

Union Calendar No. 348 

109TH CONGRESS 

2D SESSION H. R. 5039 

[Report No. 109–604] 

To establish a program to revitalize rural multifamily housing assisted under 

the Housing Act of 1949. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 29, 2006 

Mr. DAVIS of Kentucky (for himself, Mr. FRANK of Massachusetts, Mr. NEY, 

Mr. DAVIS of Alabama, Mr. GARY G. MILLER of California, Mr. 

HINOJOSA, and Mr. RENZI) introduced the following bill; which was referred to the Committee on Financial Services 

JULY 27, 2006 

Additional sponsors: Mr. CLAY, Mr. CUELLAR, Mr. YOUNG of Alaska, and Mr. 

PEARCE

JULY 27, 2006 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on March 29, 2006] 

A BILL 

To establish a program to revitalize rural multifamily 

housing assisted under the Housing Act of 1949. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Saving America’s Rural 

3 Housing Act of 2006’’. 

4 SEC. 2. FINDINGS AND PURPOSES. 

5 (a) FINDINGS.—The Congress finds that— 

6 (1) section 502(c) of the Housing Act of 1949 re7 stricts the rights of certain owners of projects for 

8 which loans were made or insured under section 515 

9 of such Act to prepay such loans; 

10 (2) expensive litigation against the Department 

11 of Agriculture has cost the taxpayers of the United 

12 States millions of dollars to date, funds that would be 

13 better spent preserving affordable multifamily hous14 ing; 

15 (3) if such section 502(c) is partially repealed 

16 and the prepayment restrictions are eliminated for 

17 multifamily housing loans made before 1989 under 

18 section 515, it is expected, according to a report, that 

19 approximately 10 percent of the portfolio of such 

20 loans would be prepaid and those projects would leave 

21 the program; 

22 (4) the average age of a multifamily housing 

23 project with a section 515 loan is 28 years, and there24 fore much of the portfolio of such projects is aging 

25 and in need of revitalization, while the need for af26 fordable rural housing is increasing; 


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1 (5) section 515 projects house some of the poorest 

2 families in rural America, with almost 60 percent of 

3 the units occupied by senior citizens or persons with 

4 disabilities and an average annual household income 

5 among all occupants of approximately $10,000; 

6 (6) in many small towns and communities, rent7 al housing financed by direct loans under section 515 

8 is the only decent, affordable rental housing avail9 able.; and 

10 (7) consequently, any revitalization or disposi11 tion of this portfolio, which houses nearly 450,000 

12 low-income families and seniors, should be handled 

13 with great care. 

14 (b) PURPOSES.—The purposes of this Act are— 

15 (1) to authorize the Secretary of Agriculture to 

16 carry out a program that encourages, to the extent 

17 practicable, the retention of section 515 housing 

18 project developments for long-term use and the repair 

19 and preservation of such properties, and ensures that 

20 the minimum number of residents are displaced; 

21 (2) to repeal a portion of section 502(c) of the 

22 Housing Act of 1949 to avoid further costly litigation 

23 against the Department of Agriculture; 

24 (3) to preserve the availability of affordable 

25 rural housing by providing a voluntary mechanism 


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1 for owners of multifamily rural housing projects with 

2 loans under section 515 to enter into loan restruc3 turing agreements with the Secretary to provide cap4 ital for revitalization activities; and 

5 (4) to provide for affordable rents for tenants 

6 who live in such projects that are revitalized under 

7 this Act and to protect tenants who live in such 

8 projects for which the loan is prepaid. 

9 SEC. 3. REVITALIZATION OF MULTIFAMILY HOUSING. 

10 (a) REVITALIZATION PROGRAM.—Title V of the Hous11 ing Act of 1949 (42 U.S.C. 1471 et seq.) is amended by 

12 adding at the end the following new section: 

13 ‘‘SEC. 544. REVITALIZATION AND TENANT PROTECTION 

14 VOUCHERS. 

15 ‘‘(a) PURPOSE.—The purposes of this section are— 

16 ‘‘(1) to protect tenants who live in multifamily 

17 housing projects that are subsidized under this title 

18 and, in the case of prepayments of loans under sec19 tion 515, to protect tenants that are displaced when 

20 the projects cease being eligible projects; 

21 ‘‘(2) to strengthen the long-term viability of eli22 gible projects; 

23 ‘‘(3) to promote the revitalization of rural multi24 family housing projects; and 

25 ‘‘(4) to accomplish such several purposes— 


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1 ‘‘(A) by providing a voluntary mechanism 

2 for project owners to enter into loan restruc3 turing agreements with the Secretary to obtain 

4 new types of financial assistance to rehabilitate 

5 and maintain the projects; and 

6 ‘‘(B) by deregulating certain projects in a 

7 manner that still provides measurable perform8 ance standards and effective financing and reha9 bilitation of multifamily housing. 

10 ‘‘(b) REVITALIZATION.— 

11 ‘‘(1) IN GENERAL.—The Secretary shall, subject 

12 to the availability of amounts appropriated, carry 

13 out a revitalization program in accordance with this 

14 subsection to provide financial incentives and other 

15 assistance to owners of eligible projects through vol16 untary long-term use agreements entered into between 

17 the project owners and the Secretary. 

18 ‘‘(2) APPLICATIONS TO PARTICIPATE.—The Sec19 retary may accept applications from owners of eligi20 ble projects to participate in the revitalization pro21 gram under this section. 

22 ‘‘(3) LONG-TERM VIABILITY PLAN.— 

23 ‘‘(A) REQUIREMENT.—The Secretary may 

24 prepare and approve a long-term viability plan 

25 under this paragraph with respect to each eligiVerDate Aug 31 2005 23:52 Jul 27, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H5039.RH H5039

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1 ble project for which the owner requests to par2 ticipate. 

3 ‘‘(B) CONTENTS.—Each long-term viability 

4 plan for an eligible project shall include the fol5 lowing information: 

6 ‘‘(i) PHYSICAL NEEDS ASSESSMENT.— 

7 A physical needs assessment of the project 

8 that identifies and projects, for the following 

9 20 years— 

10 ‘‘(I) all necessary repairs, im11 provements, maintenance, and man12 agement standards for the project, and 

13 when they will be made, in order to 

14 meet the requirements of this title; and 

15 ‘‘(II) the costs associated with the 

16 items referred to in this subparagraph 

17 (A). 

18 ‘‘(ii) FINANCIAL PLAN.—A financial 

19 plan for the project that— 

20 ‘‘(I) reviews the financial stability 

21 of the project; 

22 ‘‘(II) includes the loan restruc23 turing elements, rent adjustments, 

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1 ments to the project that are necessary 

2 to cover operating expenses for the 

3 project and maintain an adequate fi4 nancial reserve for the future mainte5 nance and capital needs of the project; 

6 ‘‘(III) provides the project owner 

7 with a long-term rate of return on new 

8 capital, as determined by the Sec9 retary, commensurate to comparable 

10 commercial multifamily housing 

11 projects; 

12 ‘‘(IV) meets the physical needs for 

13 the project determined under the phys14 ical needs assessment; 

15 ‘‘(V) ensures that rents available 

16 under the plan are affordable to eligi17 ble households in accordance with 

18 paragraph (7); and 

19 ‘‘(VI) addresses any costs associ20 ated with any temporary tenant dis21 placement resulting from renovations 

22 or rehabilitation undertaken as a re23 sult of participation of the project in 

24 the revitalization program. 


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1 ‘‘(C) DEVELOPMENT THROUGH PARTICI2 PATING ADMINISTRATIVE ENTITIES.—The Sec3 retary may develop long-term viability plans 

4 through the use of third-party participating ad5 ministrative entities, who may be a private con6 tractor, a State housing finance agency, or a 

7 nonprofit organization. 

8 ‘‘(D) REVITALIZATION DETERMINATION.— 

9 Based on the long-term viability plan for an eli10 gible project, the Secretary shall determine 

11 whether to offer the project owner a financial re12 structuring plan under paragraph (4) and the 

13 financial incentives to be included in any such 

14 plan offered. 

15 ‘‘(E) FINAL REVIEW AND COMMENT.—With 

16 respect to any long-term viability plan prepared 

17 by the Secretary, the Secretary shall provide the 

18 project owner an opportunity to review the plan 

19 and discuss the plan with the Secretary or its 

20 agent before a determination is made under sub21 paragraph (D). 

22 ‘‘(F) FEES.—The Secretary may charge the 

23 project owner a fee for preparation of the long24 term viability plan. 


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1 ‘‘(G) PAYMENT OF FEES.—If a long-term 

2 viability for a project is approved, the payment 

3 of such fee may be incorporated into a project 

4 owner’s financial restructuring plan for the 

5 project provided by the Secretary pursuant to 

6 paragraph (4) 

7 ‘‘(4) FINANCIAL RESTRUCTURING PLAN; REVITAL8 IZATION INCENTIVES.—Based on the long-term viabil9 ity plan for an eligible project, the Secretary may 

10 offer a project owner a financial restructuring plan 

11 for the project. Such a plan may include one or more 

12 of the following revitalization incentives: 

13 ‘‘(A) Reduction or elimination of interest on 

14 the loan or loans for the project made under sec15 tion 515. 

16 ‘‘(B) Partial or full deferral of payments 

17 due under such loan or loans. 

18 ‘‘(C) Forgiveness of such loan or loans. 

19 ‘‘(D) Subordination of such loan or loans, 

20 subject to such terms and conditions as the Sec21 retary shall determine. 

22 ‘‘(E) Reamortization of loan payments 

23 under such loan or loans over extended terms. 

24 ‘‘(F) A grant from the Secretary for the 

25 project. 


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1 ‘‘(G) Payment of project costs associated 

2 with developing the long-term viability plan. 

3 ‘‘(H) Opportunity for project owners to ob4 tain further investment equity from third parties 

5 in the project. 

6 ‘‘(I) A direct loan or guarantee of a loan for 

7 the project, with a subsidized interest rate with8 out regard to the value of the project. 

9 ‘‘(5) LONG-TERM USE AGREEMENT.— 

10 ‘‘(A) IN GENERAL.—If the owner of an eligi11 ble project agrees to the terms of a financial re12 structuring plan for the project providing revi13 talization benefits under paragraph (4), in ex14 change for such benefits, the Secretary and the 

15 project owner shall enter into a long-term use 

16 agreement under this paragraph for the project. 

17 ‘‘(B) AGREEMENT.—A long-term use agree18 ment for an eligible project shall include— 

19 ‘‘(i) the terms of the financial restruc20 turing plan for the project, including any 

21 revitalization incentives to be provided; 

22 ‘‘(ii) an agreement by the project 

23 owner— 

24 ‘‘(I) to continue the property use 

25 restrictions with respect to the project 


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1 in accordance with this title for a pe2 riod of (aa) 20 years, or (bb) the re3 maining term of any loans under this 

4 title for the project, whichever ends 

5 later; 

6 ‘‘(II) to comply with the long7 term viability plan for the project; 

8 ‘‘(III) to comply with the rent 

9 terms under paragraph (7) for the 

10 project; and 

11 ‘‘(IV) to make value payments 

12 under paragraph (6) to the Secretary, 

13 and the terms of such payments; 

14 ‘‘(iii) provisions terminating the agree15 ment if any revitalization incentives for the 

16 project to be provided under the agreement 

17 are no longer available and the Secretary 

18 determines that such unavailability is not 

19 the fault of the owner; 

20 ‘‘(iv) any rent terms for the project 

21 pursuant to paragraph (7); 

22 ‘‘(v) a covenant which runs with the 

23 land; and 


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1 ‘‘(vi) such other terms as the Secretary 

2 determines are necessary to implement the 

3 purposes of this section. 

4 ‘‘(6) SHARED VALUE AGREEMENTS.—Each long5 term use agreement shall include a shared value 

6 agreement secured by the property of the eligible 

7 project that is the subject of the long-term use agree8 ment, which shall determine how proceeds are divided 

9 at the end of the term of the loan or loans and shall 

10 require the project owner, at the end of such loan 

11 term or terms, to pay the lesser of— 

12 ‘‘(A) the sum of— 

13 ‘‘(i) the amounts of any loan 

14 writedowns, write-offs, and interest sub15 sidies provided in connection with the loan 

16 restructuring under this subsection, at the 

17 closing of revitalization; 

18 ‘‘(ii) any outstanding principal and 

19 interest; and 

20 ‘‘(iii) any non-loan funds provided by 

21 the Secretary under this subsection; or 

22 ‘‘(B) 75 percent of the appraised value of 

23 the eligible project. 

24 ‘‘(7) RENTS UNDER LONG-TERM USE AGREE25 MENT.—In any eligible project that is subject to a 


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1 long-term use agreement, rents for eligible households 

2 shall comply with the following requirements: 

3 ‘‘(A) MINIMUM RENT.—The Secretary, act4 ing through the director of the applicable local 

5 agency or office of the Department responsible 

6 for carrying out the programs under this title in 

7 such area, may provide that each eligible house8 hold is charged a minimum monthly rent in an 

9 amount determined by such local director that 

10 does not in any case exceed $25. The Secretary 

11 may allow exceptions to such minimum rent for 

12 an eligible household or groups of eligible house13 holds for demonstrated hardship, as determined 

14 by the Secretary, which hardship exceptions, if 

15 allowed by the Secretary, shall include the hard16 ship exceptions provided or established by the 

17 Secretary of Housing and Urban Development, 

18 as appropriate, under subclauses (I) through (V) 

19 of section 3(a)(3)(B)(i) of the United States 

20 Housing Act of 1937 (42 U.S.C. 

21 1437a(a)(3)(B)(i)). 

22 ‘‘(B) MAXIMUM HOUSEHOLD CONTRIBUTION

23 TO RENT.—Notwithstanding any minimum 

24 monthly rent established pursuant to subpara25 graph (A), the maximum household contribution 


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1 to monthly rent for any eligible household may 

2 not exceed 30 percent of the adjusted income of 

3 the eligible household. Such local director may 

4 take actions as may be necessary to verify tenant 

5 incomes for purposes of carrying out this sub6 paragraph. 

7 ‘‘(C) RENT ADJUSTMENTS.—The rents for 

8 eligible households may be increased or decreased 

9 only on an annual basis and only in accordance 

10 with standards incorporated in such agreement. 

11 The Secretary shall issue regulations establishing 

12 such standards, which shall include standards 

13 for rents that are considered affordable for eligi14 ble households for the area in which a project is 

15 located and for establishing rents that conform to 

16 such standards. 

17 ‘‘(8) LOWEST COST REQUIREMENT.—In deter18 mining the terms of a restructuring plan, and the 

19 type and amount of revitalization benefits under such 

20 plan to approve under this subsection for an eligible 

21 project, the Secretary shall, to the extent practicable, 

22 approve assistance that imposes the least cost to the 

23 Secretary while meeting the requirements of the long24 term viability plan for the project. 


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1 ‘‘(9) AUTHORIZATION OF APPROPRIATIONS.— 

2 There are authorized to be appropriated for each fis3 cal year such sums as may be necessary to carry out 

4 the revitalization program under this subsection. 

5 ‘‘(c) HOMEOWNERSHIP OPPORTUNITIES.—The owner 

6 of an eligible project may, in conjunction with revitaliza7 tion of the project pursuant to this section, propose a sale 

8 to a tenant-based condominium or cooperative. Any such 

9 proposal shall be subject to a notice to tenants under terms 

10 that the Secretary shall establish. 

11 ‘‘(d) DETERMINATION OF INELIGIBILITY.— 

12 ‘‘(1) PROCEDURE.—The Secretary may deter13 mine that a project owner is ineligible for participa14 tion in the revitalization program under this section 

15 in accordance with the standards under paragraph 

16 (2). 

17 ‘‘(2) STANDARDS.— The Secretary may deter18 mine that a project owner is ineligible if— 

19 ‘‘(A) the project owner has a history of poor 

20 management or maintenance of multifamily 

21 housing properties; 

22 ‘‘(B) the project owner is in default on a 

23 loan made available under the section 514 or 515 

24 housing program; 


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1 ‘‘(C) the Secretary is unable to enter into a 

2 long-term use agreement for the project that is 

3 the subject of the application with the project 

4 owner within a reasonable time; 

5 ‘‘(D) the project owner is suspended or 

6 debarred from participating in Federal contracts 

7 or programs; or 

8 ‘‘(E) the Secretary has other good cause for 

9 withholding from the project owner the benefits 

10 made available under this section. 

11 ‘‘(e) DEFINITIONS.—For purposes of this section, the 

12 following definitions shall apply: 

13 ‘‘(1) ELIGIBLE HOUSEHOLD.—The term ‘eligible 

14 household’ means a household that, under section 515, 

15 is eligible to reside in a project funded with a loan 

16 made by the Secretary under such section. 

17 ‘‘(2) ELIGIBLE PROJECT.—The term ‘eligible 

18 project’ means a housing project funded with a loan 

19 made at any time by the Secretary under section 515, 

20 the principal obligation of which has not been fully 

21 repaid. 

22 ‘‘(3) PROJECT OWNER; OWNER.—The terms 

23 ‘project owner’ and ‘owner’ mean, with respect to an 

24 eligible project, an individual or entity, or principals 

25 thereof that own, or plan to purchase, the project.’’. 


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1 (b) PRIORITY FOR SECTION 515 FINANCING.—Sub2 section (j) of section 515 of the Housing Act of 1949 (42 

3 U.S.C. 1485(j)) is amended— 

4 (1) by inserting ‘‘(1)’’ before ‘‘For’’; and 

5 (2) by adding at the end the following new para6 graph: 

7 ‘‘(2) The Secretary may give priority, in entering into 

8 contracts under this section involving financing for new 

9 construction of a project, for projects located in areas hav10 ing a need for affordable low-income rental housing due to 

11 prepayment of loans made or insured under this section.’’. 

12 (c) PARTIAL REPEAL OF PREPAYMENT RESTRICTIONS; 

13 ADMINISTRATION OF PREPAYMENT REQUESTS.—Section 

14 502 of the Housing Act of 1949 (42 U.S.C. 1472) is amend15 ed— 

16 (1) in subsection (c)— 

17 (A) by striking ‘‘or 515’’ each place such 

18 term appears; 

19 (B) in paragraph (4)(B)— 

20 (i) by striking clause (iv); 

21 (ii) by redesignating clauses (v) and 

22 (vi) as clauses (iv) and (v), respectively; 

23 and 

24 (iii) by realigning clause (v) (as so re25 designated by clause (ii) of this subparaVerDate Aug 31 2005 23:52 Jul 27, 2006 Jkt 049200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6203 E:\BILLS\H5039.RH H5039

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1 graph) so as to be indented two ems from 

2 the left margin; and 

3 (C) in paragraph (5)(G)(i)(I), by striking 

4 ‘‘, as the case may be,’’; and 

5 (2) by adding at the end the following new sub6 section: 

7 ‘‘(i) PREPAYMENT OF SECTION 515 MULTIFAMILY

8 HOUSING LOANS.— 

9 ‘‘(1) ADMINISTRATION.— 

10 ‘‘(A) PLAN.—The Secretary shall develop a 

11 plan to administer requests to prepay (not made 

12 in connection with any revitalization under sec13 tion 544) any loan made under section 515. The 

14 plan shall provide for administration of voucher 

15 assistance in accordance with paragraph (3). 

16 The plan shall encourage and facilitate owners of 

17 projects to maintain the projects, or to transfer 

18 projects to owners who will maintain projects, as 

19 housing affordable to low-income residents, but 

20 shall not prevent an owner from prepaying. 

21 ‘‘(B) IMPLEMENTATION.—The Secretary 

22 shall implement this subsection not later than 

23 the expiration of the 90-day period beginning on 

24 the date of the enactment of the Saving Amer25 ica’s Rural Housing Act of 2006. NotwithVerDate Aug 31 2005 23:52 Jul 27, 2006 Jkt 049200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6203 E:\BILLS\H5039.RH H5039

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1 standing that full implementation of this sub2 section may not have been completed, the Sec3 retary may not delay the processing of any re4 quest to prepay a loan made under section 515. 

5 ‘‘(2) NOTICE OF PREPAYMENT OR SALE.—In 

6 preparation for prepayment of a loan made or in7 sured under section 515, the project owner shall, not 

8 less than 120 days before the date of prepayment of 

9 the loan or sale of the project for which the loan was 

10 made, provide the following notices: 

11 ‘‘(A) NOTICE TO TENANTS.—To the tenants 

12 of the project, notice of the prepayment, as fol13 lows: 

14 ‘‘(i) The notice shall include informa15 tion sufficient to inform each tenant of the 

16 plan after prepayment for the project, in 

17 which they reside as a tenant, and whether 

18 such plan may result in, or is likely to re19 sult in, the tenant being required to move 

20 and the earliest date that the tenant’s lease 

21 will expire or the tenant may have to move, 

22 and of the availability of vouchers pursuant 

23 to paragraph (3), actions tenants must take 

24 to receive voucher assistance, the date pre25 payment is expected to take place, a teleVerDate Aug 31 2005 23:52 Jul 27, 2006 Jkt 049200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6203 E:\BILLS\H5039.RH H5039

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1 phone number and electronic mail address 

2 at which to contact the owner of the project, 

3 and any limitations, use, and other terms 

4 the Secretary considers appropriate. 

5 ‘‘(ii) In the case of any prepayment 

6 involving transfer of the ownership of a 

7 project, the notice shall include the name of 

8 the transferee, the date that the transfer was 

9 agreed to, the date the transfer is to take 

10 place, and telephone numbers and electronic 

11 mail addresses at which to contact the 

12 transferor and transferee. 

13 ‘‘(B) NOTICE TO SECRETARY.—To the Sec14 retary, notice that the requirements under sub15 paragraph (A) have been met, which shall iden16 tify the date that notice under such subpara17 graph was made and the names of each tenant 

18 to which such notice was provided. 

19 ‘‘(3) RURAL TENANT PROTECTION VOUCHERS.— 

20 ‘‘(A) IN GENERAL.—In the case of a housing 

21 project subject to a loan made under section 515, 

22 if the loan is prepaid or foreclosed upon, the Sec23 retary shall, to the extent that amounts for as24 sistance under this paragraph are provided in 

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1 sistance to each low-income family who on the 

2 date that notice is provided in accordance with 

3 paragraph (2)(A) is residing in a dwelling unit 

4 in the project. 

5 ‘‘(B) USE.—A voucher under this para6 graph for a family may be used for rental of a 

7 dwelling unit in the project that the family re8 sides in on the date of the notice in accordance 

9 with paragraph (2)(A) or for a dwelling unit 

10 elsewhere. 

11 ‘‘(C) RENEWAL.—Vouchers under this para12 graph shall be renewed annually, subject to the 

13 availability of appropriations for such renewal, 

14 during the period that the family assisted re15 mains eligible for such assistance. 

16 ‘‘(D) RIGHT TO USE.—In the case of a 

17 project for which a loan made under section 515 

18 is prepaid— 

19 ‘‘(i) a family residing in such project 

20 on the date of prepayment may elect to re21 main in the unit in which the family was 

22 residing on such date; and 

23 ‘‘(ii) the owner of the project may not 

24 refuse to lease, to a family for whom vouch25 er assistance under this paragraph is made 


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1 available, any available rental dwelling 

2 unit in the project. 

3 ‘‘(E) AMOUNT OF ASSISTANCE.—The 

4 amount of rental assistance provided under a 

5 voucher under this paragraph on behalf of a ten6 ant shall be the amount by which— 

7 ‘‘(i) the lesser of 

8 ‘‘(I) the rent for the dwelling unit 

9 rented using such voucher, or 

10 ‘‘(II) the rent for a comparable 

11 unit in the same market area as the 

12 housing project for which the loan was 

13 prepaid; exceeds 

14 ‘‘(ii) the lesser of 

15 ‘‘(I) the amount of rent paid by 

16 the tenant for the dwelling unit occu17 pied by the tenant at the time of the 

18 prepayment referred to in paragraph 

19 (1), or 

20 ‘‘ (II) the amount equal to 30 per21 cent of the tenant’s adjusted income (as 

22 such term is defined in section 3(b) of 

23 the United States Housing Act of 1937 

24 (42 U.S.C. 1437a(b)). 


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1 ‘‘(F) RURAL AFFORDABLE VOUCHER.—For 

2 communities with insufficient affordable housing 

3 alternatives, and in the case of any elderly or 

4 disabled tenant who is eligible for a voucher 

5 under this paragraph and has a need to move to 

6 another community to be near immediate family 

7 or necessary medical services, as determined by 

8 the Secretary, voucher assistance under this 

9 paragraph may be provided in accordance with 

10 section 8(t)(1) of the United States Housing Act 

11 of 1937 (42 U.S.C. 1437f(t)(1)). 

12 ‘‘(G) ADMINISTRATION.—To the maximum 

13 extent practicable, the Secretary shall administer 

14 voucher assistance under this paragraph in ac15 cordance with, but not subject to, regulations and 

16 administrative guidance for housing vouchers 

17 administered by the Secretary of Housing and 

18 Urban Development under section 8 of such Act. 

19 ‘‘(H) HOMEOWNERSHIP OPPORTUNITIES.— 

20 A voucher under this paragraph may be used by 

21 a tenant to make payments towards the purchase 

22 of a single-family home anywhere in the United 

23 States, subject to subsidy limits for vouchers 

24 under this title and the same limitations appli25 cable under section 8(y) of the United States 


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1 Housing Act of 1937 (42 U.S.C. 1437f(y)) to the 

2 use of tenant-based assistance under such section 

3 8 for homeownership. 

4 ‘‘(I) AUTHORIZATION OF APPROPRIA5 TIONS.—There is authorized to be appropriated 

6 for tenant protection vouchers under this para7 graph— 

8 ‘‘(i) for fiscal year 2007, $74,000,000; 

9 and 

10 ‘‘(ii) for each of fiscal years 2008 

11 through 2011, the amount necessary to pro12 vide vouchers in each such fiscal year for all 

13 of the families identified in subparagraph 

14 (A). 

15 ‘‘(4) PREPAYMENT STANDARDS FOR PRE-1989

16 LOANS.—In the case of a loan made or insured under 

17 section 515 pursuant to a contract entered into before 

18 December 15, 1989: 

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (B), the Secretary shall approve any offer 

21 to prepay such a loan that meets the following 

22 requirements: 

23 ‘‘(i) The borrower under the loan has 

24 not been provided any assistance to extend 

25 low-income use pursuant to section 


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1 502(c)(4) of this Act, as such section was in 

2 effect before the date of the enactment of the 

3 Saving America’s Rural Housing Act of 

4 2006. 

5 ‘‘(ii) The loan was not at any time re6 stricted by servicing actions, including 

7 transfers. 

8 ‘‘(iii) The 20-year period during which 

9 the project is subject to use restrictions 

10 under the loan has concluded. 

11 ‘‘(B) PROHIBITION.—The Secretary may 

12 not approve any offer to prepay such a loan dur13 ing the 20-year period during which the project 

14 is subject to use restrictions under the loan. 

15 ‘‘(5) SALE RESTRICTIONS AND MARKETING AS16 SISTANCE.— 

17 ‘‘(A) SALE RESTRICTIONS.—During the pe18 riod that begins upon the owner providing notice 

19 to the Secretary under paragraph (2)(B) and 

20 having a duration of 75 days, the owner may 

21 not sell the property except to a purchaser who 

22 enters into such binding agreements for purchase 

23 at market rates as the Secretary considers nec24 essary to continue the property use restrictions 

25 with respect to the project in accordance with 


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•HR 5039 RH

1 this title for a period of 20 years. This para2 graph may not be construed to prohibit an 

3 owner, during such period, from soliciting or re4 ceiving any offers of sale or purchase. 

5 ‘‘(B) MARKETING ASSISTANCE.— 

6 ‘‘(i) DATABASE OF POTENTIAL BUY7 ERS.—The Secretary shall establish and 

8 maintain a database of potential buyers of 

9 projects with loans made under section 515. 

10 Such database shall include only persons 

11 who have expressed an interest to the Sec12 retary in purchasing such projects at fair 

13 market value and maintaining the projects 

14 for use as affordable housing. 

15 ‘‘(ii) PUBLIC NOTIFICATION OF PRE16 PAYMENT.—Upon notification to the Sec17 retary under paragraph (2)(B) regarding 

18 prepayment of a loan for a project, the Sec19 retary shall make publicly available, on the 

20 appropriate World Wide Web site of the De21 partment or by other appropriate electronic 

22 method, including individual notification, a 

23 notice containing information sufficient, in 

24 the determination of the Secretary, to notify 


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•HR 5039 RH

1 persons with an interest in purchasing the 

2 project of the prepayment.’’. 

3 SEC. 4. CONFORMING AMENDMENTS TO TITLE V OF THE 

4 HOUSING ACT OF 1949. 

5 Title V of the Housing Act of 1949 is amended— 

6 (1) in section 502(b)(2) (42 U.S.C. 1472(b)(2))— 

7 (A) by striking ‘‘or 515’’; and 

8 (B) by inserting before the semicolon at the 

9 end the following: ‘‘and any prepayment of a 

10 loan made or insured under section 515 shall be 

11 subject to the provisions of subsection (i)’’; and 

12 (2) in section 537(b)(1) (42 U.S.C. 1490p– 

13 1(b)(1)), by inserting before the semicolon the fol14 lowing: ‘‘and to administer the revitalization pro15 gram under section 544’’. 

16 SEC. 5. EFFECTIVE DATE. 

17 This Act and the amendments made by this Act shall 

18 take effect on October 10, 2007. 


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Union Calendar No. 348 

109TH CONGRESS 

2D SESSION H. R. 5039 

[Report No. 109

–604] 

A BILL 

To establish a program to revitalize rural multi1949. family housing assisted under the Housing Act of 

JULY 27, 2006 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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