I
106TH CONGRESS
2D SESSION
H. R. 5079
To amend section 502 of the Housing Act of 1949 to provide for the
prepayment of loans for rural multifamily housing and for the preserva-
tion of such housing as affordable for low-income families, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 27, 2000
Mr. RAMSTAD introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To amend section 502 of the Housing Act of 1949 to provide
for the prepayment of loans for rural multifamily housing
and for the preservation of such housing as affordable
for low-income families, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Rural Housing Act
of 2000’’.
SEC. 2. PREPAYMENT OF RURAL MULTIFAMILY HOUSING
LOANS.
Subsection (c) of section 502 of the Housing Act of
1949 (42 U.S.C. 1472(c)) is amended to read as follows:
‘‘(c) PREPAYMENT OF LOANS AND PRESERVATION
OF AFFORDABLE HOUSING.—
‘‘(1) LOANS MADE OR INSURED BEFORE DE-
CEMBER 22, 1979.—A loan made or insured under
section 514 or 515 of this title pursuant to a con-
tract entered into before December 22, 1979, may
be prepaid at any time without restriction.
‘‘(2) LOANS MADE OR INSURED AFTER DECEM-
BER 21, 1979.—A loan made or insured under section
514 or 515 of this title pursuant to a contract en-
tered into after December 21, 1979, but before De-
cember 15, 1989, may be prepaid without restriction
only if—
‘‘(A) 15 years have elapsed from the date
on which the loan was made or insured, if the
housing and related facilities have not received
assistance under paragraph (1)(B), (2), or (5)
of section 521(a) of this title or section 8 of the
United States Housing Act of 1937;
‘‘(B) 20 years have elapsed from the date
on which the loan was made or insured, in the
case of any other such loan;
‘‘(C) the Secretary determines, before the
end of the period described in subparagraph (A)
or (B), that there is no longer a need for such
housing and related facilities or that Federal or
other financial assistance being provided to the
residents of such housing will no longer be pro-
vided; or
‘‘(D) before the end of the period described
in subparagraph (A) or (B), the owner agrees
to extend the low income use restrictions for the
remainder of such period.
‘‘(3) LOANS MADE OR INSURED AFTER DECEM-
BER 14, 1989.—A loan made or insured under section
514 or 515 of this title pursuant to a contract en-
tered into after December 14, 1989, may not be pre-
paid.
‘‘(4) ALTERNATIVES TO PREPAYMENT.—A bor-
rower who is authorized to prepay a loan pursuant
to paragraph (1) or (2) may, in the sole discretion
of the borrower, request that—
‘‘(A) the Secretary offer incentives pursu-
ant to paragraph (5); or
‘‘(B) the housing and related facilities that
are subject to the loan be sold pursuant to
paragraph (6) to a nonprofit organization or
public agency.
‘‘(5) INCENTIVES.—
‘‘(A) IN GENERAL.—If a borrower who is
authorized to prepay a loan pursuant to para-
graph (1) or (2) agrees to extend the low in-
come use of the assisted housing and related fa-
cilities involved for not less than the 20-year pe-
riod beginning on the date on which the agree-
ment is executed, the Secretary shall, subject to
the availability of amounts for such assistance
provided in advance in appropriation Acts, pro-
vide one or more of the following forms of as-
sistance:
‘‘(i) INCREASED RETURN ON INVEST-
MENT.—An increase in the rate of return
on investment.
‘‘(ii) REDUCED
INTEREST
RATE.—A
reduction of the interest rate on the loan
through the provision of interest credits
under section 521(a)(1)(B).
‘‘(iii) ADDITIONAL
RENTAL
ASSIST-
ANCE.—Additional rental assistance, or an
increase in assistance provided under exist-
ing contracts, under section 521(a)(2) or
under section 8 of the United States Hous-
ing Act of 1937.
‘‘(iv) EQUITY LOAN.—An equity loan
to the borrower under paragraphs (1) and
(2) of section 515(c) or under section
515(t).
‘‘(v) INCREMENTAL
RENTAL
ASSIST-
ANCE.—Incremental rental assistance in
connection with loans pursuant to clauses
(ii) and (iv) of this subparagraph to the
extent necessary to avoid increases in the
rental payments of current tenants not re-
ceiving rental assistance under section
521(a)(2) or under section 8 of the United
States Housing Act of 1937.
‘‘(vi) EXCESS RENT.—In the case of a
project that has received rental assistance
under section 8 of the United States Hous-
ing Act of 1937, authority for the owner to
receive rent in excess of the amount deter-
mined necessary by the Secretary to defray
the cost of long-term repair or mainte-
nance of such a project.
‘‘(B) FAILURE
TO
AGREE
ON
INCEN-
TIVES.—If the borrower does not agree to ex-