‘‘(B) in the case of a refinancing without 
the transfer of the property, to the project owner 
or the project sponsor, in an amount equal to the 
difference between the appraised value of the 
property less the outstanding indebtedness and 
total acceptable development cost. 
For purposes of paragraphs (5)(B) and (6)(B), the term 
‘acceptable development cost’ shall include, as applicable, 
the cost of acquisition, rehabilitation, loan prepayment, ini-
tial reserve deposits, and transaction costs.’’. 
SEC. 204. USE OF PROJECT RESIDUAL RECEIPTS. 
Paragraph (1) of section 811(d) of the American 
Homeownership and Economic Opportunity Act of 2000 
(12 U.S.C. 1701q note) is amended— 
(1) by striking ‘‘not more than 15 percent of’’; 
and 
(2) by inserting before the period at the end the 
following: ‘‘or other purposes approved by the Sec-
retary’’. 
SEC. 205. ADDITIONAL PROVISIONS. 
Section 811 of the American Homeownership and Eco-
nomic Opportunity Act of 2000 (12 U.S.C. 1701q note) is 
amended by adding at the end the following new sub-
sections: 
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‘‘(e) SENIOR PRESERVATION RENTAL ASSISTANCE 
CONTRACTS.—Notwithstanding any other provision of law, 
in connection with a prepayment plan for a project ap-
proved under subsection (a) by the Secretary or as otherwise 
approved by the Secretary, to prevent displacement of elder-
ly residents of the project in the case of refinancing or re-
capitalization and to further preservation and affordability 
of such project, at the election of the private nonprofit orga-
nization owner of the project, the Secretary shall provide 
project-based rental assistance for the project under a senior 
preservation rental assistance contract, as follows: 
‘‘(1) Assistance under the contract shall be made 
available to the private nonprofit organization 
owner— 
‘‘(A) for a term of at least 20 years, subject 
to annual appropriations, and 
‘‘(B) under the same rules governing 
project-based rental assistance made available 
under section 8 of the Housing Act of 1937. 
‘‘(2) Any projects for which a senior preservation 
rental assistance contract is provided shall be subject 
to a use agreement to ensure continued project afford-
ability having a term of the longer of (A) the term 
of the senior preservation rental assistance contract, 
or (B) such term as is required by the new financing. 
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‘‘(f) MORTGAGE SALE DEMONSTRATION.— 
‘‘(1) IN
GENERAL.—The Secretary may sell 
mortgages associated with loans made under section 
202 of the Housing Act of 1959 (as in effect before the 
enactment of the Cranston-Gonzalez National Afford-
able Housing Act) in accordance with the relevant 
terms for sales of subsidized loans on multifamily 
housing projects under section 203 of the Housing 
and Community Development Amendments of 1978 
(12 U.S.C. 1701z–11). For the purpose of dem-
onstrating the efficiency, effectiveness, quality, and 
timeliness of asset management and regulatory over-
sight of certain portfolios of such mortgages by State 
housing finance agencies, the Secretary shall carry 
out a demonstration program, in not more than three 
States, to sell portfolios of such mortgages to State 
housing finance agencies for a price not to exceed the 
unpaid principal balances of such mortgages and oth-
erwise in accordance with the requirements of such 
section 203. 
‘‘(2) LIMITATIONS.—In carrying out the dem-
onstration program, the Secretary shall— 
‘‘(A) prohibit State housing finance agen-
cies from giving preference to, or conditioning 
the approval of, awards of subordinate debt 
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