ble project for which the owner requests to par-
ticipate. 
‘‘(B) CONTENTS.—Each long-term viability 
plan for an eligible project shall include the fol-
lowing information: 
‘‘(i) PHYSICAL NEEDS ASSESSMENT.— 
A physical needs assessment of the project 
that identifies and projects, for the following 
20 years— 
‘‘(I) all necessary repairs, im-
provements, maintenance, and man-
agement standards for the project, and 
when they will be made, in order to 
meet the requirements of this title; and 
‘‘(II) the costs associated with the 
items referred to in this subparagraph 
(A). 
‘‘(ii) FINANCIAL
PLAN.—A financial 
plan for the project that— 
‘‘(I) reviews the financial stability 
of the project; 
‘‘(II) includes the loan restruc-
turing 
elements, 
rent 
adjustments, 
management 
and 
operational 
effi-
ciencies, and other financial adjust-
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ments to the project that are necessary 
to cover operating expenses for the 
project and maintain an adequate fi-
nancial reserve for the future mainte-
nance and capital needs of the project; 
‘‘(III) provides the project owner 
with a long-term rate of return on new 
capital, as determined by the Sec-
retary, commensurate to comparable 
commercial 
multifamily 
housing 
projects; 
‘‘(IV) meets the physical needs for 
the project determined under the phys-
ical needs assessment; 
‘‘(V) ensures that rents available 
under the plan are affordable to eligi-
ble households in accordance with 
paragraph (7); and 
‘‘(VI) addresses any costs associ-
ated with any temporary tenant dis-
placement resulting from renovations 
or rehabilitation undertaken as a re-
sult of participation of the project in 
the revitalization program. 
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‘‘(C) DEVELOPMENT
THROUGH
PARTICI-
PATING
ADMINISTRATIVE
ENTITIES.—The Sec-
retary may develop long-term viability plans 
through the use of third-party participating ad-
ministrative entities, who may be a private con-
tractor, a State housing finance agency, or a 
nonprofit organization. 
‘‘(D) REVITALIZATION
DETERMINATION.— 
Based on the long-term viability plan for an eli-
gible project, the Secretary shall determine 
whether to offer the project owner a financial re-
structuring plan under paragraph (4) and the 
financial incentives to be included in any such 
plan offered. 
‘‘(E) FINAL REVIEW AND COMMENT.—With 
respect to any long-term viability plan prepared 
by the Secretary, the Secretary shall provide the 
project owner an opportunity to review the plan 
and discuss the plan with the Secretary or its 
agent before a determination is made under sub-
paragraph (D). 
‘‘(F) FEES.—The Secretary may charge the 
project owner a fee for preparation of the long- 
term viability plan. 
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‘‘(G) PAYMENT OF FEES.—If a long-term 
viability for a project is approved, the payment 
of such fee may be incorporated into a project 
owner’s financial restructuring plan for the 
project provided by the Secretary pursuant to 
paragraph (4) 
‘‘(4) FINANCIAL RESTRUCTURING PLAN; REVITAL-
IZATION INCENTIVES.—Based on the long-term viabil-
ity plan for an eligible project, the Secretary may 
offer a project owner a financial restructuring plan 
for the project. Such a plan may include one or more 
of the following revitalization incentives: 
‘‘(A) Reduction or elimination of interest on 
the loan or loans for the project made under sec-
tion 515. 
‘‘(B) Partial or full deferral of payments 
due under such loan or loans. 
‘‘(C) Forgiveness of such loan or loans. 
‘‘(D) Subordination of such loan or loans, 
subject to such terms and conditions as the Sec-
retary shall determine. 
‘‘(E) Reamortization of loan payments 
under such loan or loans over extended terms. 
‘‘(F) A grant from the Secretary for the 
project. 
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‘‘(G) Payment of project costs associated 
with developing the long-term viability plan. 
‘‘(H) Opportunity for project owners to ob-
tain further investment equity from third parties 
in the project. 
‘‘(I) A direct loan or guarantee of a loan for 
the project, with a subsidized interest rate with-
out regard to the value of the project. 
‘‘(5) LONG-TERM USE AGREEMENT.— 
‘‘(A) IN GENERAL.—If the owner of an eligi-
ble project agrees to the terms of a financial re-
structuring plan for the project providing revi-
talization benefits under paragraph (4), in ex-
change for such benefits, the Secretary and the 
project owner shall enter into a long-term use 
agreement under this paragraph for the project. 
‘‘(B) AGREEMENT.—A long-term use agree-
ment for an eligible project shall include— 
‘‘(i) the terms of the financial restruc-
turing plan for the project, including any 
revitalization incentives to be provided; 
‘‘(ii) an agreement by the project 
owner— 
‘‘(I) to continue the property use 
restrictions with respect to the project 
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in accordance with this title for a pe-
riod of (aa) 20 years, or (bb) the re-
maining term of any loans under this 
title for the project, whichever ends 
later; 
‘‘(II) to comply with the long- 
term viability plan for the project; 
‘‘(III) to comply with the rent 
terms under paragraph (7) for the 
project; and 
‘‘(IV) to make value payments 
under paragraph (6) to the Secretary, 
and the terms of such payments; 
‘‘(iii) provisions terminating the agree-
ment if any revitalization incentives for the 
project to be provided under the agreement 
are no longer available and the Secretary 
determines that such unavailability is not 
the fault of the owner; 
‘‘(iv) any rent terms for the project 
pursuant to paragraph (7); 
‘‘(v) a covenant which runs with the 
land; and 
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‘‘(vi) such other terms as the Secretary 
determines are necessary to implement the 
purposes of this section. 
‘‘(6) SHARED VALUE AGREEMENTS.—Each long- 
term use agreement shall include a shared value 
agreement secured by the property of the eligible 
project that is the subject of the long-term use agree-
ment, which shall determine how proceeds are divided 
at the end of the term of the loan or loans and shall 
require the project owner, at the end of such loan 
term or terms, to pay the lesser of— 
‘‘(A) the sum of— 
‘‘(i) 
the 
amounts 
of 
any 
loan 
writedowns, write-offs, and interest sub-
sidies provided in connection with the loan 
restructuring under this subsection, at the 
closing of revitalization; 
‘‘(ii) any outstanding principal and 
interest; and 
‘‘(iii) any non-loan funds provided by 
the Secretary under this subsection; or 
‘‘(B) 75 percent of the appraised value of 
the eligible project. 
‘‘(7) RENTS
UNDER
LONG-TERM
USE
AGREE-
MENT.—In any eligible project that is subject to a 
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long-term use agreement, rents for eligible households 
shall comply with the following requirements: 
‘‘(A) MINIMUM RENT.—The Secretary, act-
ing through the director of the applicable local 
agency or office of the Department responsible 
for carrying out the programs under this title in 
such area, may provide that each eligible house-
hold is charged a minimum monthly rent in an 
amount determined by such local director that 
does not in any case exceed $25. The Secretary 
may allow exceptions to such minimum rent for 
an eligible household or groups of eligible house-
holds for demonstrated hardship, as determined 
by the Secretary, which hardship exceptions, if 
allowed by the Secretary, shall include the hard-
ship exceptions provided or established by the 
Secretary of Housing and Urban Development, 
as appropriate, under subclauses (I) through (V) 
of section 3(a)(3)(B)(i) of the United States 
Housing 
Act 
of 
1937 
(42 
U.S.C. 
1437a(a)(3)(B)(i)). 
‘‘(B) MAXIMUM HOUSEHOLD CONTRIBUTION 
TO
RENT.—Notwithstanding 
any 
minimum 
monthly rent established pursuant to subpara-
graph (A), the maximum household contribution 
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to monthly rent for any eligible household may 
not exceed 30 percent of the adjusted income of 
the eligible household. Such local director may 
take actions as may be necessary to verify tenant 
incomes for purposes of carrying out this sub-
paragraph. 
‘‘(C) RENT ADJUSTMENTS.—The rents for 
eligible households may be increased or decreased 
only on an annual basis and only in accordance 
with standards incorporated in such agreement. 
The Secretary shall issue regulations establishing 
such standards, which shall include standards 
for rents that are considered affordable for eligi-
ble households for the area in which a project is 
located and for establishing rents that conform to 
such standards. 
‘‘(8) LOWEST
COST
REQUIREMENT.—In deter-
mining the terms of a restructuring plan, and the 
type and amount of revitalization benefits under such 
plan to approve under this subsection for an eligible 
project, the Secretary shall, to the extent practicable, 
approve assistance that imposes the least cost to the 
Secretary while meeting the requirements of the long- 
term viability plan for the project. 
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‘‘(9) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated for each fis-
cal year such sums as may be necessary to carry out 
the revitalization program under this subsection. 
‘‘(c) HOMEOWNERSHIP OPPORTUNITIES.—The owner 
of an eligible project may, in conjunction with revitaliza-
tion of the project pursuant to this section, propose a sale 
to a tenant-based condominium or cooperative. Any such 
proposal shall be subject to a notice to tenants under terms 
that the Secretary shall establish. 
‘‘(d) DETERMINATION OF INELIGIBILITY.— 
‘‘(1) PROCEDURE.—The Secretary may deter-
mine that a project owner is ineligible for participa-
tion in the revitalization 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 multifamily 
housing properties; 
‘‘(B) the project owner is in default on a 
loan made available under the section 514 or 515 
housing program; 
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‘‘(C) the Secretary is unable to enter into a 
long-term use agreement for the project that 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 contracts 
or programs; or 
‘‘(E) the Secretary has other good cause for 
withholding from the project owner the benefits 
made available under this section. 
‘‘(e) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) ELIGIBLE HOUSEHOLD.—The term ‘eligible 
household’ means a household that, under section 515, 
is eligible to reside in a project funded with a loan 
made by the Secretary under such section. 
‘‘(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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(b) PRIORITY FOR SECTION 515 FINANCING.—Sub-
section (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 para-
graph: 
‘‘(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 areas hav-
ing a need for affordable low-income rental housing due to 
prepayment of loans made or insured under this section.’’. 
(c) PARTIAL REPEAL OF PREPAYMENT RESTRICTIONS; 
ADMINISTRATION
OF PREPAYMENT REQUESTS.—Section 
502 of the Housing Act of 1949 (42 U.S.C. 1472) is amend-
ed— 
(1) in subsection (c)— 
(A) by striking ‘‘or 515’’ each place such 
term appears; 
(B) in paragraph (4)(B)— 
(i) by striking clause (iv); 
(ii) by redesignating clauses (v) and 
(vi) as clauses (iv) and (v), respectively; 
and 
(iii) by realigning clause (v) (as so re-
designated by clause (ii) of this subpara-
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