H. R. 2158—50
may be consolidated as part of an overall strategy for more
than 1 property.
(b) NOTICE
REQUIREMENTS.—The Secretary shall establish
notice procedures and hearing requirements for tenants and owners
concerning the dates for the expiration of project-based assistance
contracts for any eligible multifamily housing project.
(c) EXTENSION OF CONTRACT TERM.—Subject to agreement by
a project owner, the Secretary may extend the term of any expiring
contract or provide a section 8 contract with rent levels set in
accordance with subsection (g) for a period sufficient to facilitate
the implementation of a mortgage restructuring and rental assist-
ance sufficiency plan, as determined by the Secretary.
(d) TENANT RENT PROTECTION.—If the owner of a project with
an expiring Federal rental assistance contract does not agree to
extend the contract, not less than 12 months prior to terminating
the contract, the project owner shall provide written notice to the
Secretary and the tenants and the Secretary shall make tenant-
based assistance available to tenants residing in units assisted
under the expiring contract at the time of expiration.
(e) MORTGAGE
RESTRUCTURING
AND
RENTAL
ASSISTANCE
SUFFICIENCY PLAN.—Each mortgage restructuring and rental assist-
ance sufficiency plan shall—
(1) except as otherwise provided, restructure the project-
based assistance rents for the eligible multifamily housing
project in a manner consistent with subsection (g), or provide
for tenant-based assistance in accordance with section 515;
(2) allow for rent adjustments by applying an operating
cost adjustment factor established under guidelines established
by the Secretary;
(3) require the owner or purchaser of an eligible multifamily
housing project to evaluate the rehabilitation needs of the
project, in accordance with regulations of the Secretary, and
notify the participating administrative entity of the rehabilita-
tion needs;
(4) require the owner or purchaser of the project to provide
or contract for competent management of the project;
(5) require the owner or purchaser of the project to take
such actions as may be necessary to rehabilitate, maintain
adequate reserves, and to maintain the project in decent and
safe condition, based on housing quality standards established
by—
(A) the Secretary; or
(B) local housing codes or codes adopted by public
housing agencies that—
(i) meet or exceed housing quality standards estab-
lished by the Secretary; and
(ii) do not severely restrict housing choice;
(6) require the owner or purchaser of the project to
maintain affordability and use restrictions in accordance with
regulations promulgated by the Secretary, for a term of not
less than 30 years which restrictions shall be—
(A) contained in a legally enforceable document
recorded in the appropriate records; and
(B) consistent with the long-term physical and financial
viability and character of the project as affordable housing;
(7) include a certification by the participating administra-
tive entity that the restructuring meets subsidy layering
H. R. 2158—51
requirements established by the Secretary by regulation for
purposes of this subtitle;
(8) require the owner or purchaser of the project to meet
such other requirements as the Secretary determines to be
appropriate; and
(9) prohibit the owner from refusing to lease a reasonable
number of units to holders of certificates and vouchers under
section 8 of the United States Housing Act of 1937 because
of the status of the prospective tenants as certificate and
voucher holders.
(f) 
TENANT
AND
OTHER
PARTICIPATION
AND
CAPACITY
BUILDING.—
(1) PROCEDURES.—
(A) IN GENERAL.—The Secretary shall establish proce-
dures to provide an opportunity for tenants of the project,
residents of the neighborhood, the local government, and
other affected parties to participate effectively and on a
timely basis in the restructuring process established by
this subtitle.
(B) COVERAGE.—These procedures shall take into
account the need to provide tenants of the project, residents
of the neighborhood, the local government, and other
affected parties timely notice of proposed restructuring
actions and appropriate access to relevant information
about restructuring activities. To the extent practicable
and consistent with the need to accomplish project
restructuring in an efficient manner, the procedures shall
give all such parties an opportunity to provide comments
to the participating administrative entity in writing, in
meetings, or in another appropriate manner (which com-
ments shall be taken into consideration by the participating
administrative entity).
(2) REQUIRED CONSULTATION.—The procedures developed
pursuant to paragraph (1) shall require consultation with ten-
ants of the project, residents of the neighborhood, the local
government, and other affected parties, in connection with at
least the following:
(A) the mortgage restructuring and rental assistance
sufficiency plan;
(B) any proposed transfer of the project; and
(C) the rental assistance assessment plan pursuant
to section 515(c).
(3) FUNDING.—
(A) IN GENERAL.—The Secretary may provide not more
than $10,000,000 annually in funding from which the Sec-
retary may make obligations to tenant groups, nonprofit
organizations, and public entities for building the capacity
of tenant organizations, for technical assistance in further-
ing any of the purposes of this subtitle (including transfer
of developments to new owners) and for tenant services,
from those amounts made available under appropriations
Acts for implementing this subtitle or previously made
available for technical assistance in connection with the
preservation of affordable rental housing for low-income
persons.
(B) MANNER
OF
PROVIDING.—Notwithstanding any
other provision of law restricting the use of preservation
H. R. 2158—52
technical assistance funds, the Secretary may provide any
funds made available under subparagraph (A) through
existing technical assistance programs pursuant to any
other Federal law, including the Low-Income Housing
Preservation and Resident Homeownership Act of 1990
and the Multifamily Property Disposition Reform Act of
1994, or through any other means that the Secretary
considers consistent with the purposes of this subtitle, with-
out regard to any set-aside requirement otherwise
applicable to those funds.
(C) PROHIBITION.—None of the funds made available
under subparagraph (A) may be used directly or indirectly
to pay for any personal service, advertisement, telegram,
telephone, letter, printed or written matter, or other device,
intended or designed to influence in any manner a Member
of Congress, to favor or oppose, by vote or otherwise, any
legislation or appropriation by Congress, whether before
or after the introduction of any bill or resolution proposing
such legislation or appropriation.
(g) RENT LEVELS.—
(1) IN GENERAL.—Except as provided in paragraph (2), each
mortgage restructuring and rental assistance sufficiency plan
pursuant to the terms, conditions, and requirements of this
subtitle shall establish for units assisted with project-based
assistance in eligible multifamily housing projects adjusted rent
levels that—
(A) are equivalent to rents derived from comparable
properties, if—
(i) the participating administrative entity makes
the rent determination within a reasonable period of
time; and
(ii) the market rent determination is based on
not less than 2 comparable properties; or
(B) if those rents cannot be determined, are equal
to 90 percent of the fair market rents for the relevant
market area.
(2) EXCEPTIONS.—
(A) IN GENERAL.—A contract under this section may
include rent levels that exceed the rent level described
in paragraph (1) at rent levels that do not exceed 120
percent of the fair market rent for the market area (except
that the Secretary may waive this limit for not more than
five percent of all units subject to restructured mortgages
in any fiscal year, based on a finding of special need),
if the participating administrative entity—
(i) determines that the housing needs of the ten-
ants and the community cannot be adequately
addressed through implementation of the rent limita-
tion required to be established through a mortgage
restructuring and rental assistance sufficiency plan
under paragraph (1); and
(ii) follows the procedures under paragraph (3).
(B) EXCEPTION RENTS.—In any fiscal year, a participat-
ing administrative entity may approve exception rents on
not more than 20 percent of all units covered by the port-
folio restructuring agreement with expiring contracts in
H. R. 2158—53
that fiscal year, except that the Secretary may waive this
ceiling upon a finding of special need.
(3) RENT LEVELS FOR EXCEPTION PROJECTS.—For purposes
of this section, a project eligible for an exception rent shall
receive a rent calculated on the actual and projected costs
of operating the project, at a level that provides income suffi-
cient to support a budget-based rent that consists of—
(A) the debt service of the project;
(B) the operating expenses of the project, as determined
by the participating administrative entity, including—
(i) contributions to adequate reserves;
(ii) the costs of maintenance and necessary
rehabilitation; and
(iii) other eligible costs permitted under section
8 of the United States Housing Act of 1937;
(C) an adequate allowance for potential operating
losses due to vacancies and failure to collect rents, as
determined by the participating administrative entity;
(D) an allowance for a reasonable rate of return to
the owner or purchaser of the project, as determined by
the participating administrative entity, which may be
established to provide incentives for owners or purchasers
to meet benchmarks of quality for management and hous-
ing quality; and
(E) other expenses determined by the participating
administrative entity to be necessary for the operation
of the project.
(h) 
EXEMPTIONS
FROM
RESTRUCTURING.—The 
following
categories of projects shall not be covered by a mortgage restructur-
ing and rental assistance sufficiency plan if—
(1) the primary financing or mortgage insurance for the
multifamily housing project that is covered by that expiring
contract was provided by a unit of State government or a
unit of general local government (or an agency or instrumental-
ity of a unit of a State government or unit of general local
government);
(2) the project is a project financed under section 202
of the Housing Act of 1959 or section 515 of the Housing
Act of 1949; or
(3) the project has an expiring contract under section 8
of the United States Housing Act of 1937 entered into pursuant
to section 441 of the Stewart B. McKinney Homeless Assistance
Act.
SEC. 515. SECTION 8 RENEWALS AND LONG-TERM AFFORDABILITY
COMMITMENT BY OWNER OF PROJECT.
(a) SECTION 8 RENEWALS OF RESTRUCTURED PROJECTS.—
(1) PROJECT-BASED ASSISTANCE.—Subject to the availability
of amounts provided in advance in appropriations Acts, and
to the control of the Secretary of applicable accounts in the
Treasury of the United States, with respect to an expiring
section 8 contract on an eligible multifamily housing project
to be renewed with project-based assistance (based on a deter-
mination under subsection (c)), the Secretary shall enter into
contracts with participating administrative entities pursuant
to which the participating administrative entity shall offer to
renew or extend the contract, or the Secretary shall offer to