I 

114TH CONGRESS 

1ST SESSION H. R. 2482 

To amend the Low-Income Housing Preservation and Resident 

Homeownership Act of 1990. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 20, 2015 

Mr. PAULSEN introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To amend the Low-Income Housing Preservation and 

Resident Homeownership Act of 1990. 

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 ‘‘Preservation Enhance5 ment and Savings Opportunity Act of 2015’’. 

6 SEC. 2. DISTRIBUTIONS AND RESIDUAL RECEIPTS. 

7 Section 222 of the Low-Income Housing Preservation 

8 and Resident Homeownership Act of 1990 (12 U.S.C. 

9 4112) is amended by adding at the end the following new 

10 subsection: 


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1 ‘‘(e) DISTRIBUTION AND RESIDUAL RECEIPTS.— 

2 ‘‘(1) AUTHORITY.—After the date of the enact3 ment of the Preservation Enhancement and Savings 

4 Opportunity Act of 2015, the owner of a property 

5 subject to a plan of action or use agreement pursu6 ant to this section shall be entitled to distribute— 

7 ‘‘(A) annually, all surplus cash generated 

8 by the property, but only if the owner is in ma9 terial compliance with such use agreement in10 cluding compliance with prevailing physical con11 dition standards established by the Secretary; 

12 and 

13 ‘‘(B) notwithstanding any conflicting provi14 sion in such use agreement, any funds accumu15 lated in a residual receipts account, but only if 

16 the owner is in material compliance with such 

17 use agreement and has completed, or set aside 

18 sufficient funds for completion of, any capital 

19 repairs identified by the most recent third party 

20 capital needs assessment. 

21 ‘‘(2) OPERATION OF PROPERTY.—An owner 

22 that distributes any amounts pursuant to paragraph 

23 (1) shall— 

24 ‘‘(A) continue to operate the property in 

25 accordance with the affordability provisions of 


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1 the use agreement for the property for the re2 maining useful life of the property; 

3 ‘‘(B) as required by the plan of action for 

4 the property, continue to renew or extend any 

5 project-based rental assistance contract for a 

6 term of not less than 20 years; and 

7 ‘‘(C) if the owner has an existing multi8 year project-based rental assistance contract for 

9 less than 20 years, have the option to extend 

10 the contract to a 20-year term.’’. 

11 SEC. 3. FUTURE REFINANCINGS. 

12 Section 214 of the Low-Income Housing Preservation 

13 and Resident Homeownership Act of 1990 (12 U.S.C. 

14 4104) is amended by adding at the end the following new 

15 subsection: 

16 ‘‘(c) FUTURE FINANCING.—Neither this section, nor 

17 any plan of action or use agreement implementing this 

18 section, shall restrict an owner from obtaining a new loan 

19 or refinancing an existing loan secured by the project, or 

20 from distributing the proceeds of such a loan; except that, 

21 in conjunction with such refinancing— 

22 ‘‘(1) the owner shall provide for adequate reha23 bilitation pursuant to a capital needs assessment to 

24 ensure long-term sustainability of the property satis25 factory to the lender or bond issuance agency; 


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1 ‘‘(2) any resulting budget-based rent increase 

2 shall include debt service on the new financing, com3 mercially reasonable debt service coverage, and re4 placement reserves as required by the lender; and 

5 ‘‘(3) for tenants of dwelling units not covered 

6 by a project- or tenant-based rental subsidy, any 

7 rent increases resulting from the refinancing trans8 action may not exceed 10 percent per year, except 

9 that— 

10 ‘‘(A) any tenant occupying a dwelling unit 

11 as of time of the refinancing may not be re12 quired to pay for rent and utilities, for the du13 ration of such tenancy, an amount that exceeds 

14 the greater of— 

15 ‘‘(i) 30 percent of the tenant’s income; 

16 or 

17 ‘‘(ii) the amount paid by the tenant 

18 for rent and utilities immediately before 

19 such refinancing; and 

20 ‘‘(B) this paragraph shall not apply to any 

21 tenant who does not provide the owner with 

22 proof of income. 

23 Paragraph (3) may not be construed to limit any rent in24 creases resulting from increased operating costs for a 

25 project.’’. 


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1 SEC. 4. IMPLEMENTATION. 

2 The Secretary of Housing and Urban Development 

3 shall issue any guidance that the Secretary considers nec4 essary to carry out the provisions added by the amend5 ments made by sections 2 and 3 not later than the expira6 tion of the 120-day period beginning on the date of the 

7 enactment of this Act. 

Æ 


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