portfolio of such projects is aging and in need of 
preservation, while the need for affordable rural 
housing is increasing; 
(2) section 515 projects house some of the 
poorest families in rural America, with almost 60 
percent of the units occupied by senior citizens or 
persons with disabilities and an average annual 
household income among all occupants of approxi-
mately $10,000; 
(3) in many small towns and communities, rent-
al housing financed by direct loans under section 
515 is the only decent, affordable rental housing 
available; and 
(4) consequently, any preservation or disposi-
tion of the multifamily housing portfolio with loans 
under section 515, which houses approximately 
465,000 low-income families and seniors and farm-
workers, should be handled with great care. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to authorize the Secretary of Agriculture to 
carry out a program that encourages the preserva-
tion of section 515 housing project developments for 
long-term affordable use and the repair and revital-
ization of such properties; 
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(2) to provide for voucher assistance for tenants 
who live in such projects that are preserved under 
this Act; and 
(3) to provide voucher assistance for tenants 
who are displaced from such projects as a result of 
prepayment or foreclosure on a loan for the project. 
SEC. 3. PRESERVATION OF MULTIFAMILY HOUSING. 
(a) PRESERVATION PROGRAM.—Title V of the Hous-
ing Act of 1949 (42 U.S.C. 1471 et seq.) is amended by 
adding at the end the following new section: 
‘‘SEC. 544. PRESERVATION OF MULTIFAMILY HOUSING AND 
PROTECTION OF TENANTS. 
‘‘(a) PRESERVATION
PROGRAM.—The Secretary 
shall, subject to the availability of amounts appropriated, 
carry out a preservation program in accordance with this 
section to provide financial incentives and other assistance 
to owners of eligible projects through long-term use agree-
ments entered into between the project owners and the 
Secretary. 
‘‘(b) APPLICATIONS TO PARTICIPATE.— 
‘‘(1) IN GENERAL.—The Secretary shall accept 
applications from owners of eligible projects to par-
ticipate in the preservation program under this sec-
tion. 
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‘‘(2) PRIORITY.—In selecting among applica-
tions of eligible projects to participate in the preser-
vation program, the Secretary may give priority to 
applications for such projects that are located on 
tribal trust lands or other Indian areas, in colonias 
(as such term is defined in section 916(e) of the 
Cranston-Gonzalez National Affordable Housing Act 
(42 U.S.C. 5306 note), or in other small, poor, low- 
income communities. 
‘‘(c) LONG-TERM VIABILITY PLAN.— 
‘‘(1) REQUIREMENT.—The Secretary shall pre-
pare and approve a long-term viability plan under 
this subsection with respect to each eligible project 
for which the owner requests to participate. 
‘‘(2) CONTENTS.—Each long-term viability plan 
for an eligible project shall include the following in-
formation: 
‘‘(A) PHYSICAL
NEEDS
ASSESSMENT.—A 
physical needs assessment of the project that 
identifies and projects, for the following 30 
years— 
‘‘(i) all necessary repairs, improve-
ments, maintenance, and management 
standards for the project, and when they 
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will be made, in order to meet the require-
ments of this title; and 
‘‘(ii) the costs associated with the 
items referred to clause (i). 
‘‘(B) FINANCIAL PLAN.—A financial plan 
for the project that— 
‘‘(i) reviews the financial stability of 
the project; 
‘‘(ii) includes the loan restructuring 
elements, rent adjustments, management 
and operational efficiencies, and other fi-
nancial adjustments to the project that are 
necessary to cover operating expenses for 
the project and maintain an adequate fi-
nancial reserve for the future maintenance 
and capital needs of the project; 
‘‘(iii) provides the project owner with 
a long-term rate of return on equity of the 
project owner, as determined by the Sec-
retary, commensurate to comparable rural 
multifamily housing projects for which a 
tax credit is provided under section 42 of 
the Internal Revenue Code of 1986 (26 
U.S.C. 42), and provides that any return 
in excess of such rate of return shall be 
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made available to the Secretary only for 
use under section 515; 
‘‘(iv) meets the physical needs for the 
project determined under the physical 
needs assessment; 
‘‘(v) ensures that rents available 
under the plan are affordable to eligible 
households in accordance with subsection 
(f); and 
‘‘(vi) addresses any costs associated 
with any temporary tenant displacement 
resulting from renovations or rehabilitation 
undertaken as a result of participation of 
the project in the preservation program. 
‘‘(3) DEVELOPMENT THROUGH PARTICIPATING 
ADMINISTRATIVE ENTITIES.—The Secretary may de-
velop long-term viability plans through the use of 
third-party participating administrative entities, who 
may be a private contractor, a State housing finance 
agency, or a nonprofit organization. 
‘‘(4) PRESERVATION DETERMINATION.—Based 
on the long-term viability plan for an eligible project, 
the Secretary shall determine whether to offer the 
project owner a financial restructuring plan under 
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subsection (d) and the financial incentives to be in-
cluded in any such plan offered. 
‘‘(5) FINAL REVIEW AND COMMENT.—Before a 
determination is made under subparagraph (D) with 
respect to any long-term viability plan prepared by 
the Secretary, the Secretary shall— 
‘‘(A) provide the project owner an oppor-
tunity to review the plan and discuss the plan 
with the Secretary or its agent; 
‘‘(B) make available to the tenants of the 
project a copy of such plan and provide a period 
of not less than 30 days for tenants to submit 
comments regarding the plan to the Secretary; 
and 
‘‘(C) respond in writing to such comments. 
‘‘(6) FEES.—The Secretary may charge the 
project owner a fee for preparation of the long-term 
viability plan. 
‘‘(7) PAYMENT OF FEES.—If a long-term viabil-
ity for a project is approved, the payment of such 
fee may be incorporated into a project owner’s finan-
cial restructuring plan for the project provided by 
the Secretary pursuant to subsection (d). 
‘‘(d) FINANCIAL RESTRUCTURING PLAN; PRESERVA-
TION INCENTIVES.—Based on the long-term viability plan 
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‘‘(C) provisions terminating the agreement 
if any material preservation incentives for the 
project to be provided under the agreement are 
no longer available and the Secretary deter-
mines that such unavailability is not the fault 
of the owner; 
‘‘(D) any rent terms for the project pursu-
ant to subsection (f); 
‘‘(E) a covenant which runs with the land; 
‘‘(F) a representation and warranty by the 
owner to provide safe, healthy, clean buildings 
pursuant to the Secretary’s guidelines; 
‘‘(G) provisions providing for rural preser-
vation voucher assistance under section 542(c) 
for low-income households residing in the 
project who are eligible for such vouchers; and 
‘‘(H) such other terms as the Secretary de-
termines are necessary to implement the pur-
poses of this section. 
‘‘(f) RENTS
UNDER
LONG-TERM
USE
AGREE-
MENT.—Rents for any eligible households residing in 
dwelling units in any preserved project shall comply with 
the following requirements: 
‘‘(1) MAXIMUM HOUSEHOLD CONTRIBUTION TO 
RENT
AND
UTILITIES.—The maximum household 
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contribution to monthly rent and utilities for any eli-
gible household may not exceed 30 percent of the 
adjusted income of the eligible household. 
‘‘(2) RENT ADJUSTMENTS.—The rents for eligi-
ble projects may be increased or decreased only on 
an annual basis and only in accordance with stand-
ards incorporated in such agreement. 
‘‘(3) LOWEST COST REQUIREMENT.—In deter-
mining the terms of a restructuring plan, and the 
type and amount of preservation benefits under such 
plan to approve under this section for an eligible 
project, the Secretary shall, to the extent prac-
ticable, approve assistance that imposes the least 
cost to the Secretary while meeting the requirements 
of the long-term viability plan for the project. 
‘‘(g) EARNED
INCOME
DISREGARD
FOR
RESI-
DENTS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the amount of the contribution to-
ward rent for a dwelling unit payable, by any house-
hold described in paragraph (3), for occupancy in a 
project funded with a loan under section 515 may 
not be increased as a result of the increased income 
due to employment during the 12-month period be-
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ginning on the date on which the employment is 
commenced. 
‘‘(2) PHASE-IN
OF
RENT
INCREASES.—Upon 
the expiration of the 12-month period referred to in 
paragraph (1), the contribution toward rent payable 
by a household described in paragraph (3) may be 
increased due to the continued employment of the 
household 
member 
described 
in 
subparagraph 
(3)(B), except that during the 12-month period be-
ginning upon such expiration the amount of the in-
crease may not be greater than 50 percent of the 
amount of the total increase in contribution toward 
rent that would be applicable but for this paragraph. 
‘‘(3) ELIGIBLE HOUSEHOLD.—A household de-
scribed in this paragraph is a household that— 
‘‘(A)(i) is an eligible household who resides 
in a eligible project; or 
‘‘(ii) is provided rural preservation voucher 
assistance pursuant to section 542(c); and 
‘‘(B)(i) whose income increases as a result 
of employment of a member of the household 
who was previously unemployed for 1 or more 
years; 
‘‘(ii) whose earned income increases during 
the participation of a household member in any 
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family self-sufficiency or other job training pro-
gram; or 
‘‘(iii) who is or was, within 6 months, as-
sisted under any State program for temporary 
assistance for needy families funded under part 
A of title IV of the Social Security Act (42 
U.S.C. 601 et seq.) and whose earned income 
increases. 
‘‘(h) INELIGIBILITY.— 
‘‘(1) PROCEDURE FOR DETERMINATION.—The 
Secretary may determine that a project owner is in-
eligible for participation in the preservation program 
under this section in accordance with the standards 
under paragraph (2). 
‘‘(2) STANDARDS.—The Secretary may deter-
mine that a project owner is ineligible if— 
‘‘(A) the project owner has a history of 
poor management or maintenance of multi-
family housing properties; 
‘‘(B) the project owner is in default on a 
loan made available under the section 515 hous-
ing program; 
‘‘(C) the Secretary is unable to enter into 
a long-term use agreement for the project that 
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is the subject of the application with the project 
owner within a reasonable time; 
‘‘(D) the project owner is suspended or 
debarred from participating in Federal con-
tracts or programs; or 
‘‘(E) the Secretary has other good cause 
for withholding from the project owner the ben-
efits made available under this section. 
‘‘(3) INELIGIBILITY BECAUSE OF ACTION FOR 
PREPAYMENT.—A project owner shall be ineligible 
for participation in the preservation program under 
this section if the owner— 
‘‘(A) is a party to an ongoing civil action 
brought to authorize the prepayment of the sec-
tion 515 loan for the eligible project, or is a 
party to a damages action brought to recover 
damages caused by the passage of the Emer-
gency Low Income Housing Preservation Act of 
1987 or amendments to such Act, for which a 
final judgment, settlement agreement, or con-
sent decree has not yet been issued; or 
‘‘(B) was a party to a civil action brought 
to authorize the prepayment of the section 515 
loan for the eligible project, or was a party to 
a damages action brought to recover damages 
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caused by the passage of the Emergency Low 
Income Housing Preservation Act of 1987 or 
amendments to such Act, under which damages 
were awarded to the project owner, and the 
owner has not agreed to contribute at least 50 
percent of such damages, or $100,000, which-
ever is less, to carrying out the financial re-
structuring plan and long-term use agreement 
for the preserved project. 
‘‘(i) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) ELIGIBLE HOUSEHOLD.—The term ‘eligi-
ble household’ means a household that, under sec-
tion 515, is eligible to reside in a project funded 
with a loan made by the Secretary under such sec-
tion. 
‘‘(2) ELIGIBLE
PROJECT.—The term ‘eligible 
project’ means a housing project funded with a loan 
made at any time by the Secretary under section 
515, the principal obligation of which has not been 
fully repaid. 
‘‘(3) PROJECT
OWNER; OWNER.—The terms 
‘project owner’ and ‘owner’ mean, with respect to an 
eligible project, an individual or entity, or principals 
thereof that own, or plan to purchase, the project. 
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‘‘(4) PRESERVED
PROJECT.—The term ‘pre-
served project’ means an eligible project for which 
the Secretary and owner have entered into agree-
ment on a financial restructuring plan for the 
project and into a long-term use agreement for the 
project, under this section. 
‘‘(j) ANNUAL REPORT.—The Secretary shall submit 
a report to the Congress annually regarding the compli-
ance of owners of eligible projects participating in the 
preservation program under this section with the require-
ments of such program, which shall identify and describe 
any significant failures to comply. 
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated for each of fiscal years 
2008 through 2012 such sums as may be necessary to 
carry out the preservation program under this section.’’. 
SEC. 4. RURAL PRESERVATION AND RURAL TENANT PRO-
TECTION VOUCHERS. 
Section 542 of the Housing Act of 1949 (42 U.S.C. 
1490r) is amended by adding at the end the following new 
subsections: 
‘‘(c) RURAL PRESERVATION VOUCHERS.—In the case 
of a housing project subject to a loan made under section 
515 that is a preserved project (as such term is defined 
in section 544(i)), the Secretary shall, to the extent that 
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amounts for assistance under this subsection are provided 
in advance in appropriation Acts, make available voucher 
assistance to each eligible household (as such term is de-
fined in section 544(i)) that is not assisted under the rent-
al assistance program under section 521 or the program 
for rental assistance under section 8 of the United States 
Housing Act of 1937 (42 U.S.C. 1437f), and is residing 
in the project upon the date that a long-term use agree-
ment is entered into pursuant to section 544(e) between 
the project owner and the Secretary, voucher assistance 
upon such date, as follows: 
‘‘(1) The amount of assistance provided under 
the voucher shall be sufficient to allow such house-
hold to remain in the project after it is preserved. 
‘‘(2) The percentage of adjusted income paid by 
the eligible household for rent and utilities for the 
assisted dwelling, pursuant to the voucher, shall not 
exceed 30 percent of adjusted income of the eligible 
household. 
‘‘(3) The voucher assistance shall be available 
to the eligible household only during the period in 
which the eligible household resides in the preserved 
project and the long-term use agreement remains in 
effect. 
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‘‘(4) Upon termination of the participation of 
the eligible household in the voucher program, the 
voucher shall remain attached to the preserved 
project and shall be available for use by another eli-
gible household residing in the preserved project. 
‘‘(d) RURAL TENANT PROTECTION VOUCHERS.— 
‘‘(1) IN GENERAL.—In the case of a housing 
project subject to a loan made under section 515 
that is prepaid or foreclosed upon, the Secretary 
shall, to the extent that amounts for assistance 
under this subsection are provided in advance in ap-
propriation Acts, make available to each eligible 
household (as such term is defined in section 544(i)) 
that is not assisted under the rental assistance pro-
gram under section 521 or the program for rental 
assistance under section 8 of the United States 
Housing Act of 1937 (42 U.S.C. 1437f), and is re-
siding in a dwelling unit in the project upon the date 
that the Secretary approves the prepayment or sub-
mits notice of foreclosure to the project owner, as 
applicable, voucher assistance upon such date, as fol-
lows: 
‘‘(A) RELOCATION
VOUCHERS.—In the 
case of any such eligible household who must 
relocate from a project for which the loan is 
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being prepaid or foreclosed upon, voucher as-
sistance under this subsection shall be subject 
to the terms of section 8(o) of the United State 
Housing Act of 1937 (42 U.S.C. 1437(o)), ex-
cept that— 
‘‘(i) the percentage of adjusted income 
paid by the eligible household for rent and 
utilities for the assisted dwelling unit shall 
not at any time exceed 30 percent of the 
adjusted income of the eligible household; 
and 
‘‘(ii) a voucher provided pursuant to 
this subparagraph shall be subject to the 
terms of section 8(r) of such Act (relating 
to portability), except that if an eligible 
household uses the voucher to move to a 
community other than the community in 
which the project from which the family re-
located pursuant to such prepayment or 
foreclosure is located, upon termination of 
the participation of such eligible family in 
the voucher program, the voucher shall be 
returned for use in the community in 
which such project is located. 
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‘‘(B) ENHANCED VOUCHERS.—In the case 
of any such eligible household who remains in 
a project for which the loan is prepaid or fore-
closed upon, voucher assistance under this sub-
section shall be subject to the terms of section 
8(t) of the United State Housing Act of 1937 
(42 U.S.C. 1437f(t)), except that— 
‘‘(i) the percentage of adjusted income 
paid by the eligible household for rent and 
utilities for the assisted dwelling unit shall 
not at any time exceed 30 percent of the 
adjusted income of the eligible household; 
‘‘(ii) the owner of the project may not 
refuse to lease, to an eligible household for 
whom voucher assistance under this sub-
paragraph is made available, any available 
appropriately sized rental dwelling unit in 
the project; 
‘‘(iii) voucher assistance under this 
subparagraph may be used only for dwell-
ing units in housing that is decent, safe, 
and sanitary; and 
‘‘(iv) upon termination of participa-
tion of such eligible family in the enhanced 
voucher program, the voucher shall convert 
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to a relocation voucher under subpara-
graph (A) of this paragraph, and shall be 
available with respect to such project only 
to provide assistance in accordance with 
the provisions of such subparagraph. 
‘‘(e) ADMINISTRATION.—The Secretary may contract 
with a public housing agency or a private or nonprofit or-
ganization to administer vouchers authorized under sub-
sections (c) and (d). 
‘‘(f) RENEWAL.—Vouchers under subsections (c) and 
(d) shall be renewed annually, subject to the availability 
of appropriations for such renewal. 
‘‘(g) USE OF SAVINGS.—Notwithstanding any other 
provision of law, any amounts made available for voucher 
assistance under subsections (c) and (d) that remain un-
used because of increases in the incomes of household as-
sisted under such vouchers shall be available to the Sec-
retary for eligible activities under this Act. 
‘‘(h) APPLICABILITY OF SECTION 8 PROGRAM.—Ex-
cept as specifically provided otherwise in this section, to 
the maximum extent practicable, the Secretary shall ad-
minister voucher assistance subsections (c) and (d) in ac-
cordance with, but not subject to, regulations and admin-
istrative guidance for housing vouchers administered by 
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the Secretary of Housing and Urban Development under 
section 8(o) of such Act. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated for voucher assistance under 
subsections (c) and (d) such sums as may be necessary 
for each of fiscal years 2008 through 2012.’’. 
SEC. 5. PRIORITY FOR FINANCING. 
Subsection (j) of section 515 of the Housing Act of 
1949 (42 U.S.C. 1485(j)) is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘For’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) The Secretary may give priority, in entering into 
contracts under this section involving financing for new 
construction of a project, for projects located in eligible 
rural areas having a need for affordable low-income rental 
housing due to prepayment of loans made or insured 
under this section.’’. 
SEC. 6. CONFORMING AMENDMENT. 
Section 537(b)(1) of the Housing Act of 1949 (42 
U.S.C. 1490p–1(b)(1)) is amended by inserting before the 
semicolon the following: ‘‘and to administer the preserva-
tion program under section 544’’. 
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SEC. 7. REGULATIONS. 
The Secretary of Agriculture shall issue proposed 
regulations to carry out the amendments made by this Act 
not later than the expiration of the 90-day period begin-
ning upon the date of the enactment of this Act, and shall 
issue final regulations to carry out the amendments made 
by this Act not later than the expiration of the 180-day 
period beginning upon such date of enactment. 
Æ 
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