I 

113TH CONGRESS 

2D SESSION H. R. 4146 

To amend the Low-Income Housing Preservation and Resident 

Homeownership Act of 1990. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 4, 2014 

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 2014’’. 

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 2014, 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; and 

9 ‘‘(B) upon request made to the Secretary 

10 and notwithstanding any conflicting provision in 

11 such use agreement; any funds accumulated in 

12 a residual receipts account, but only if the 

13 owner is in material compliance with such use 

14 agreement. 

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

16 that distributes any amounts pursuant to paragraph 

17 (1) shall— 

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

19 accordance with the affordability provisions of 

20 the use agreement for the property for the re21 maining useful life of the property; 

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

23 the property, continue to renew or extend any 

24 project-based rental assistance contract for a 

25 term of not less than 20 years; and 


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1 ‘‘(C) if the owner has an existing multi2 year project-based rental assistance contract for 

3 less than 20 years, have the option to extend 

4 the contract to a 20-year term.’’. 

5 SEC. 3. FUTURE REFINANCINGS. 

6 Section 214 of the Low-Income Housing Preservation 

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

8 4104) is amended by adding at the end the following new 

9 subsection: 

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

11 any plan of action or use agreement implementing this 

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

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

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

15 in conjunction with such refinancing— 

16 ‘‘(1) the owner shall provide for adequate reha17 bilitation pursuant to a capital needs assessment to 

18 ensure long-term sustainability of the property satis19 factory to the lender or bond issuance agency; 

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

21 shall include debt service on the new financing, com22 mercially reasonable debt service coverage, and re23 placement reserves as required by the lender; and 


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1 ‘‘(3) rent increases for units not covered by a 

2 project-based rental subsidy contract or tenant-based 

3 rental subsidy shall be limited to 10 percent.’’. 

Æ 


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