IIB 

114TH CONGRESS 

1ST SESSION H. R. 2482 

IN THE SENATE OF THE UNITED STATES 

JULY 15, 2015 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Preservation Enhance3 ment and Savings Opportunity Act of 2015’’. 

4 SEC. 2. DISTRIBUTIONS AND RESIDUAL RECEIPTS. 

5 Section 222 of the Low-Income Housing Preservation 

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

7 4112) is amended by adding at the end the following new 

8 subsection: 

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

10 ‘‘(1) AUTHORITY.—After the date of the enact11 ment of the Preservation Enhancement and Savings 

12 Opportunity Act of 2015, the owner of a property 

13 subject to a plan of action or use agreement pursu14 ant to this section shall be entitled to distribute— 

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

16 by the property, but only if the owner is in ma17 terial compliance with such use agreement in18 cluding compliance with prevailing physical con19 dition standards established by the Secretary; 

20 and 

21 ‘‘(B) notwithstanding any conflicting provi22 sion in such use agreement, any funds accumu23 lated in a residual receipts account, but only if 

24 the owner is in material compliance with such 

25 use agreement and has completed, or set aside 

26 sufficient funds for completion of, any capital 


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1 repairs identified by the most recent third party 

2 capital needs assessment. 

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

4 that distributes any amounts pursuant to paragraph 

5 (1) shall— 

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

7 accordance with the affordability provisions of 

8 the use agreement for the property for the re9 maining useful life of the property; 

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

11 the property, continue to renew or extend any 

12 project-based rental assistance contract for a 

13 term of not less than 20 years; and 

14 ‘‘(C) if the owner has an existing multi15 year project-based rental assistance contract for 

16 less than 20 years, have the option to extend 

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

18 SEC. 3. FUTURE REFINANCINGS. 

19 Section 214 of the Low-Income Housing Preservation 

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

21 4104) is amended by adding at the end the following new 

22 subsection: 

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

24 any plan of action or use agreement implementing this 

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


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

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

3 in conjunction with such refinancing— 

4 ‘‘(1) the owner shall provide for adequate reha5 bilitation pursuant to a capital needs assessment to 

6 ensure long-term sustainability of the property satis7 factory to the lender or bond issuance agency; 

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

9 shall include debt service on the new financing, com10 mercially reasonable debt service coverage, and re11 placement reserves as required by the lender; and 

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

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

14 rent increases resulting from the refinancing trans15 action may not exceed 10 percent per year, except 

16 that— 

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

18 as of time of the refinancing may not be re19 quired to pay for rent and utilities, for the du20 ration of such tenancy, an amount that exceeds 

21 the greater of— 

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

23 or 


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

2 for rent and utilities immediately before 

3 such refinancing; and 

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

5 tenant who does not provide the owner with 

6 proof of income. 

7 Paragraph (3) may not be construed to limit any rent in8 creases resulting from increased operating costs for a 

9 project.’’. 

10 SEC. 4. IMPLEMENTATION. 

11 The Secretary of Housing and Urban Development 

12 shall issue any guidance that the Secretary considers nec13 essary to carry out the provisions added by the amend14 ments made by sections 2 and 3 not later than the expira15 tion of the 120-day period beginning on the date of the 

16 enactment of this Act. 

Passed the House of Representatives July 14, 2015. 

Attest: KAREN L. HAAS, 

Clerk. 


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