124 
ernment transferee shall be fully subrogated to 
the rights satisfied by such payment.’’; 
(5) in section 366 (12 U.S.C. 3705)— 
(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
first, third, fourth, and fifth place such term 
appears; and 
(B) by inserting ‘‘, or the State or local 
government transferee,’’ after ‘‘Secretary’’ the 
second and sixth places such term appears; 
(6) in section 367 (12 U.S.C. 3706)— 
(A) in subsection (a)— 
(i) in paragraph (1), by inserting ‘‘or 
the State or local government transferee,’’ 
after ‘‘Secretary,’’; and 
(ii) in paragraph (8), by inserting ‘‘, 
or the State or local government trans-
feree’’ after ‘‘Secretary’’; 
(B) in subsection (b)— 
(i) by inserting ‘‘, or any State or 
local government transferee,’’ after ‘‘Sec-
retary’’ the first and second places such 
term appears; and 
(ii) by inserting ‘‘, or the State or 
local government transferee,’’ after ‘‘Sec-
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retary’’ the third place such term appears; 
and 
(C) by adding at the end the following new 
subsection: 
‘‘(c) In any case in which a State or local government 
transferee is the purchaser of a multifamily project, the 
State or local government transferee shall manage and dis-
pose of such project to benefit those originally intended 
to be assisted under the prior program unless continued 
operation and disposition of the property under such pro-
gram is not feasible based on consideration of the costs 
of rehabilitating and operating the property after consid-
ering all available Federal, State, and local resources, in-
cluding rent adjustments under section 524 of the Multi-
family Assisted Housing Reform and Affordability Act of 
1997 (42 U.S.C. 1437f note).’’. 
(7) in section 368 (12 U.S.C. 3707)— 
(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
first and third places such term appears; and 
(B) by inserting ‘‘, or the State of local 
government transferee,’’ after ‘‘Secretary’’ the 
second place such term appears; 
(8) in section 369A (12 U.S.C. 3709)— 
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(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
second place such term appears; and 
(B) by inserting ‘, or the State or local 
government transferee,’ after ‘Secretary’ the 
first, third, and fourth places such term ap-
pears; 
(9) in section 369B (12 U.S.C. 3710)— 
(A) by inserting ‘‘, or the State of local 
government transferee,’’ after ‘‘Secretary’’ the 
first and second places such term appears; and 
(B) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ each 
other place such term appears; 
(10) in section 369E (12 U.S.C. 3713), by in-
serting ‘‘, or any State or local government trans-
feree,’’ after ‘‘Secretary’’ each place such term ap-
pears; and 
(11) 
in 
section 
369F(a)(1) 
(12 
U.S.C. 
3714(a)(1)), by inserting ‘‘, or any State or local 
government transferee,’’ before the semicolon at the 
end. 
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127 
SEC. 403. BUILDING ACQUISITION: VALUATION OF PHYS-
ICALLY DISTRESSED PROPERTIES SOLD BY 
HUD. 
(a) IN GENERAL.—Notwithstanding title II of the 
Deficit Reduction Act of 2005 (12 U.S.C. 1701z–11 note) 
or any other provision of law, in determining the market 
value of any multifamily real property or multifamily loan 
for any noncompetitive sale to a State or local government, 
the Secretary of Housing and Urban Development shall 
consider, but not be limited to, industry standard ap-
praisal practices, including the cost of repairs needed to 
bring the property into such condition as to satisfy min-
imum State and local code standards and the cost of main-
taining the affordability requirements imposed by the Sec-
retary on the multifamily real property or multifamily 
loan. 
(b) DEFINITIONS.—For purposes of this section, the 
terms ‘‘affordability requirements’’, ‘‘multifamily loan’’, 
and ‘‘multifamily real property’’ have the same meaning 
given such terms in section 2001 of the Deficit Reduction 
Act of 2005 (12 U.S.C. 1701z–11 note). 
SEC. 404. INVESTMENT THROUGH UP-FRONT GRANTS FROM 
GENERAL INSURANCE FUND. 
(a) 1978 ACT.—Paragraph (4) of section 203(f) of 
the Housing and Community Development Amendments 
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of 1978 (12 U.S.C. 1701z–11(f)(4)) is amended by strik-
ing the last sentence. 
(b) CLARIFICATION OF AUTHORIZED ASSISTANCE.— 
In implementing the provisions amended by subsection (b) 
of this section, the Secretary of Housing and Urban Devel-
opment may utilize both up-front grants and project-based 
rental assistance under section 8 of the United States 
Housing Act of 1937 (42 U.S.C. 1437f) as necessary to 
preserve the affordability of a multifamily housing project 
to low- and very low-income families. 
SEC. 405. MAINTAINING PROJECT-BASED ASSISTANCE FOR 
PROJECTS DISPOSED OF BY HUD. 
(a) IN GENERAL.—In managing and disposing of any 
multifamily property that is owned by, or has a mortgage 
held by, the Secretary of Housing and Urban Develop-
ment, the Secretary shall maintain any contracts for rent-
al assistance payments under section 8 of the United 
States Housing Act of 1937 (42 U.S.C. 1437f) and other 
programs that are attached to any dwelling units in the 
property. 
(b) INFEASIBILITY OF CONTINUED ASSISTANCE.—To 
the extent the Secretary determines, in consultation with 
the tenants and the local government, that such a multi-
family property owned or held by the Secretary is not fea-
sible for continued rental assistance payments under such 
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section 8 or other programs, based on consideration of (1) 
the costs of rehabilitating and operating the property and 
all available Federal, State, and local resources, including 
rent adjustments under section 524 of the Multifamily As-
sisted Housing Reform and Affordability Act of 1997 (42 
U.S.C. 1437f note), and environmental conditions that 
cannot be remedied in a cost-effective fashion, the Sec-
retary may, in consultation with the tenants of such prop-
erty, contract for project-based rental assistance payments 
with an owner or owners of other existing housing prop-
erties, or provide other rental assistance. 
(c) FORECLOSURE.—For all properties with project- 
based section 8 assistance, regardless of the type of under-
lying financing, the Secretary shall also take appropriate 
actions to ensure that project-based contracts remain in 
effect prior to foreclosure, subject to the exercise of con-
tractual remedies to assist relocation of tenants for immi-
nent major threats to health and safety, after written no-
tice to and informed consent of the affected tenants and 
use of other available remedies, such as partial abatements 
or receivership. 
(d) APPLICABILITY OF MAHRA.—After disposition 
of any multifamily property described under this section, 
the contract and allowable rent levels on such properties 
shall be subject to section 524 of the Multifamily Assisted 
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Housing Reform and Affordability Act of 1997 (42 U.S.C. 
1437f note). 
SEC. 406. CORRECTING HARM CAUSED BY LATE SUBSIDY 
PAYMENTS. 
Section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f), as amended by the preceding provi-
sions of this Act, is further amended by adding at the end 
the following new subsection:’’. 
‘‘(gg) LATE PAYMENTS.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
payments of project-based rental assistance provided 
under this section for each month on or before the 
due date under paragraph (2) for the payment. 
‘‘(2) DUE
DATE.—The due date under this 
paragraph for a monthly payment is the first busi-
ness day of the month. 
‘‘(3) NOTIFICATION OF LATE PAYMENT.—The 
Secretary shall notify a project owner at least 10 
days before the due date for a housing assistance 
payment if such payment will be late and shall in-
form the project owner of the approximate date the 
payment will be made. 
‘‘(4) USE OF RESERVES.—If a housing assist-
ance payment for a project has not been received be-
fore the expiration of the 10-day period beginning 
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upon the due date for such payment, the project 
owner shall, after the expiration of such period, be 
entitled to obtain funds from a project replacement 
reserve, residual receipts reserve, or other project re-
serve in order to pay operating and debt service 
costs for the project. Upon receipt of the monthly 
housing assistance payment from the Secretary, the 
project owner shall promptly replace or replenish 
any such funds advanced pursuant to the preceding 
sentence. 
‘‘(5) INTEREST PAYMENT.—If a monthly hous-
ing assistance payment is not made before the expi-
ration of the 30-day period beginning upon the due 
date for such payment, the Secretary shall pay to 
the owner simple interest on the amount of such 
monthly payment, from the due date until the date 
of payment, at a rate determined by the Secretary 
of Treasury in accordance with section 12 of the 
Contract Disputes Act of 1978 (41 U.S.C. 611). In-
terest payments under this paragraph shall be made 
from amounts made available for management and 
administration of the Department of Housing and 
Urban Development.’’. 
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132 
TITLE 
V—INCENTIVES 
UNDER 
MAHRA 
FOR 
OWNERS 
TO 
MAINTAIN HOUSING AFFORD-
ABILITY 
SEC. 501. EXTENSION OF MARK-TO-MARKET PROGRAM. 
Section 579 of the Multifamily Assisted Housing Re-
form and Affordability Act of 1997 (42 U.S.C. 1437f 
note) is amended by striking ‘‘October 1, 2011’’ each place 
such term appears and inserting ‘‘October 1, 2015’’. 
SEC. 502. MAINTAINING AFFORDABILITY IN PRESERVATION 
PROJECT TRANSACTIONS. 
(a) RENEWAL
UNDER
ALTERNATIVE
AUTHORI-
TIES.—Paragraph (1) of section 524(e) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 
(42 U.S.C. 1437f note) is amended by adding at the end 
the following new sentences: ‘‘At the request of the owner 
of the project, in order to facilitate a rehabilitation plan 
approved by the Secretary as being necessary to ensure 
the sustainability of a project, a contract eligible for re-
newal pursuant to this paragraph may instead be renewed 
pursuant to any provision of subsection (a) or (b) of this 
section if the contract is otherwise eligible for renewal pur-
suant to such provision. In the case of a renewal pursuant 
to subsection (a) or (b), the rent and rent adjustment 
standards applicable to a renewal pursuant to those sub-
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133 
sections shall apply, but tenant occupancy and afford-
ability restrictions in the plan of action shall continue to 
apply to the project for the duration of those restric-
tions.’’. 
(b) EXTENSION
OF AFFORDABILITY PERIOD
FOR 
ELIHPA PROJECTS.—Section 524(e) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 
(42 U.S.C. 1437f note) is amended by adding at the end 
the following new paragraph: 
‘‘(4) HYBRID
CONTRACT.—To facilitate the 
sale, transfer, or rehabilitation of a project that is 
subject to a plan of action under the Emergency 
Low Income Housing Preservation Act of 1987 (12 
U.S.C. 1715l note) to an owner who agrees to bind-
ing low-income affordability restrictions for at least 
30 years beyond the term of the plan of action and 
a rehabilitation plan approved by the Secretary as 
being necessary to ensure the sustainability of the 
project, a contract for such a project shall, at the re-
quest of the owner of the project, be renewed under 
this paragraph for a term of not less than 30 years. 
The contract shall provide that the terms of the plan 
of action shall apply for the duration of the original 
plan of action, and that at the expiration of the plan 
of action the rents shall be established at rent levels 
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134 
equal to comparable market rents for the market 
area. After expiration of the plan of action, rent ad-
justments shall be determined in accordance with 
the provisions of subsection (c) that are applicable to 
contracts renewed pursuant to subsection (a). Any 
existing contract entered into pursuant to paragraph 
(1) shall be terminated at the request of the owner 
of the project, and replaced by a contract under this 
paragraph.’’. 
SEC. 503. ENCOURAGING CONTINUED PARTICIPATION IN 
ASSISTED HOUSING PROGRAMS. 
(a) ELIMINATION
OF DISCRIMINATORY RENEWAL 
TERMS.—Paragraph (3) of section 524(b) of the Multi-
family Assisted Housing Reform and Affordability Act of 
1997 (42 U.S.C. 1437f note) is amended— 
(1) in the matter preceding subparagraph (A), 
by striking ‘‘the lesser of’’ and inserting ‘‘as fol-
lows’’; and 
(2) by striking subparagraphs (A), (B), and (C) 
and inserting the following: 
‘‘(A) PREVIOUSLY RENEWED PROJECTS.— 
In the case of a project with a contract pre-
viously renewed under this paragraph, for the 
first renewal occurring after the date of the en-
actment of the Housing Preservation and Ten-
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135 
ant Protection Act of 2010, at a rent level de-
termined in accordance paragraph (1)(B) of 
this subsection. 
‘‘(B) PROJECTS
NOT
PREVIOUSLY
RE-
NEWED.—In the case of a project with a con-
tract not previously renewed under this para-
graph, at a rent level determined in accordance 
with paragraph (1) of this subsection.’’. 
(b) SUBSEQUENT RENEWALS AND RENT ADJUST-
MENTS.—Paragraph (1) of section 524(c) of the Multi-
family Assisted Housing Reform and Affordability Act of 
1997 (42 U.S.C. 1437f note) is amended in the first sen-
tence by striking ‘‘(b)(1)’’ and inserting ‘‘(b)(1), (b)(3)’’. 
SEC. 504. PREPAYMENT OF FHA MORTGAGES ON MULTI-
FAMILY HOUSING. 
(a) CONDITIONS FOR PREPAYMENT.—Section 250 of 
the National Housing Act (12 U.S.C. 1715z–15) is 
amended— 
(1) in subsection (a)— 
(A) by striking paragraph (1) and insert-
ing the following new paragraph: 
‘‘(1) the Secretary has determined that— 
‘‘(A) such project is no longer meeting a 
need for rental housing for lower income fami-
lies in the area, as evidenced by a persistent 
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136 
lack of demand for the units under the rent 
schedule approved by the Secretary; or 
‘‘(B) the prepayment is part of a trans-
action to preserve and improve the project as 
affordable housing, pursuant to the guidance in 
effect that implements section 236(e)(2) of this 
Act (12 U.S.C. 1715z–1(e)2)) or pursuant to 
additional administrative guidance, ensuring 
that— 
‘‘(i) the proceeds of any refinancing 
will be used for rehabilitation of the 
project and related costs or for affordable 
housing and related social services under a 
plan approved by the Secretary; 
‘‘(ii) tenants will not be displaced 
from the project; 
‘‘(iii) rent burdens for unassisted ten-
ants as a result of the transaction will not 
be increased by more than 10 percent an-
nually or 20 percent in total, unless addi-
tional project-based assistance is provided; 
and 
‘‘(iv) binding commitments, which 
shall apply to current and subsequent own-
ers, are made to ensure that the project 
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will operate in accordance with all cur-
rently applicable low-income affordability 
restrictions for a period of not less than 
the original mortgage term plus an addi-
tional 20 years, including a duty to main-
tain a substantially similar occupancy pro-
file for the project of low-, very low-, and 
extremely low-income tenants, to renew 
any expiring rental assistance contracts for 
the project, and accept additional rental 
assistance for the project.’’; 
(B) in paragraph (2)— 
(i) in subparagraph (A), by inserting 
before the semicolon at the end the fol-
lowing: ‘‘which shall include reasonable ac-
cess to all information relevant to the re-
quest, including the anticipated sources 
and uses of proceeds, any additional fi-
nancing, subsidies, and rental assistance, 
and any proposed rehabilitation plan, af-
fordable housing and services plan, or use 
agreement’’; and 
(ii) in subparagraph (C), by inserting 
before the semicolon the following: ‘‘in 
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138 
making the determination required by 
paragraph (1)’’; 
(C) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(D) by adding at the end the following new 
paragraph: 
‘‘(4) the Secretary has ensured that such pre-
payment or termination involves extension of any 
low-income affordability restrictions (as such term is 
defined in section 229 of the Low-Income Housing 
Preservation and Resident Homeownership Act of 
1990 (12 U.S.C. 4119) for the project for a period 
of not less than 30 years.’’. 
(b) USE OF PROCEEDS OF PRESERVATION TRANS-
ACTIONS
BY NONPROFIT OWNERS
OF MULTIFAMILY 
PROJECTS; SECTION 236 TRANSACTIONS; CLARIFICATION 
OF EFFECT.—Section 250 of the National Housing Act 
(12 U.S.C. 1715z–15) is amended by adding at the end 
the following new subsections: 
‘‘(d) USE
OF
PROCEEDS
FROM
PRESERVATION 
TRANSACTION.—Notwithstanding any other provision of 
law, in connection with a preservation transaction, the pre-
payment of a mortgage on a multifamily rental housing 
project or termination of an insurance contract pursuant 
to section 229, or the sale or refinancing of a multifamily 
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rental housing project for which approval of the Secretary 
is required, the Secretary may not, in any manner that 
is not equally applicable to a for-profit owner of such a 
project— 
‘‘(1) impose on any owner of such a project 
that is a nonprofit organization or controlled by a 
nonprofit organization any limitation on the right of 
such owner to use the proceeds of such preservation 
transaction for the affordable housing mission (in-
cluding tenant and supportive services) of such orga-
nization, except that any increase in the project- 
based rental assistance shall be used solely to cover 
the cost of actual debt service, customary operating 
costs, and project reserve requirements, and for any 
rehabilitation of the project and reasonably related 
costs, and not for cash distributions or proceeds 
made to any project owner or purchaser; or 
‘‘(2) restrict the right of any owner of such a 
project that is a nonprofit organization or controlled 
by a nonprofit organization to do business, in con-
nection with any affiliate or entity in which it has 
a financial interest. 
‘‘(e) SECTION
236 DECOUPLING
REFINANCING 
TRANSACTIONS.—In the case of a decoupling refinancing 
transaction under section 236, the Secretary may not 
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enter into any agreement that establishes an escrow for 
the payment of future section 8 rent increases from sales 
proceeds funded by low-income housing tax credit equity 
and any such agreement already entered into shall be con-
sidered unenforceable, shall be rescinded, and may be re-
issued without the void condition. 
‘‘(f) APPLICABILITY.—Notwithstanding any existing 
administrative directive of the Secretary to the contrary, 
except as specifically authorized in this section, this sec-
tion shall apply to the prepayment of any multifamily 
mortgage on any property insured or held by the Secretary 
under this Act for which the approval of the Secretary 
is required for prepayment of the mortgage.’’. 
SEC. 505. PERIOD OF ELIGIBILITY FOR NONPROFIT DEBT 
RELIEF. 
Section 517(a)(5) of the Multifamily Assisted Hous-
ing Reform and Affordability Act of 1997 (42 U.S.C. 
1437f note) is amended by adding at the end the following 
new sentences: ‘‘If such purchaser acquires such project 
subsequent to the date of recordation of the affordability 
agreement described in section 514(e)(6), (A) the pur-
chaser must acquire the project on or before the later of 
(i) seven years after the date of recordation of the afford-
ability agreement and (ii) two years after the date of en-
actment of this sentence; and (B) the Secretary must have 
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141 
received, and determined acceptable, the purchaser’s ap-
plication for modification, assignment, or forgiveness prior 
to the purchaser’s acquisition of the project. In the event 
any low-income housing tax credits, State or local funds, 
tax-exemption or other affordable housing resources are 
being utilized by the purchaser in connection with the 
transfer of the property, the Secretary shall not require 
any repayment in connection with the assignment or for-
giveness of the mortgages to the purchaser.’’. 
SEC. 506. ACQUISITION OF RESTRUCTURED PROJECTS BY 
NONPROFIT ORGANIZATIONS. 
Paragraph (5) of section 517(a) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 
(42 U.S.C. 1437 note) is amended by inserting ‘‘, or the 
sole general partner of the limited partnership owning the 
project,’’ after ‘‘if the project’’. 
SEC. 507. RENT ADJUSTMENTS UPON SUBSEQUENT RENEW-
ALS OF SECTION 8 CONTRACTS. 
Section 524(c) of the Multifamily Assisted Housing 
Reform and Affordability Act of 1997 (42 U.S.C. 1437f 
note) is amended by adding at the end the following new 
paragraph: 
‘‘(3) SUBSEQUENT RENEWALS.—At the request 
of the owner of the project, a contract initially re-
newed pursuant to this section may subsequently be 
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renewed under any renewal authority in this section 
for which it is eligible. The subsequent renewal of a 
contract initially renewed under subsection (b)(1) 
shall be at rents established in accordance with 
paragraph (1) of this subsection. A project whose 
contract is initially renewed under this section shall 
not be considered an eligible multifamily housing 
project as defined in section 512(2) unless (A) the 
owner of the project and the Secretary consent to 
the project’s designation as an eligible multifamily 
housing project, and (B) the project meets the re-
quirements of subparagraphs (A) and (C) of such 
section 512(2).’’. 
SEC. 508. BUDGET-BASED RENT ADJUSTMENTS. 
(a) METHODS FOR ANNUAL RENT ADJUSTMENTS.— 
Section 514(g) of the Multifamily Assisted Housing Re-
form and Affordability Act of 1997 (42 U.S.C. 1437f 
note) is amended by adding at the end the following new 
paragraph: 
‘‘(4) ANNUAL RENT ADJUSTMENTS.—The Sec-
retary shall annually adjust the rents initially estab-
lished pursuant to this section using an operating 
cost adjustment factor established by the Secretary 
(which shall not result in a negative adjustment) or, 
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143 
upon the request of the project owner, on a budget 
basis.’’ 
(b) MEETING REHABILITATION NEEDS
OF PRE-
VIOUSLY RESTRUCTURED PROJECTS.—Section 517(c) of 
the Multifamily Assisted Housing Reform and Afford-
ability Act of 1997 (42 U.S.C. 1437f note) is amended 
by adding at the end the following new paragraph: 
‘‘(3) REHABILITATION
NEEDS
OF
RESTRUC-
TURED PROJECTS.— 
‘‘(A) REHABILITATION ASSISTANCE.—Not-
withstanding any other provision of this title, at 
the request of a project owner, the Secretary 
shall, pursuant to a revised evaluation of the 
physical condition of the project approved by 
the Secretary, provide rehabilitation assistance 
from the funding sources specified in the first 
sentence of paragraph (1)(A) for any project 
for which the Secretary and the project owner 
executed a mortgage restructuring and rental 
assistance sufficiency plan prior to October 1, 
2001, pursuant to which mortgage debt on the 
project was restructured. 
‘‘(B) FUNDING THROUGH DEBT RESTRUC-
TURING.—The Secretary may, in connection 
with the transfer of a project to a qualified 
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preservation owner, modify or waive any of the 
requirements or conditions on debt restruc-
turing contained in this title in order to provide 
a simplified debt restructuring for funding the 
rehabilitation of previously restructured projects 
under this title. The Secretary may make a 
non-default partial or full payment of claim 
under a mortgage insurance contract pursuant 
to section 541(b) of the National Housing Act 
(12 U.S.C. 1735f–19(b)), notwithstanding the 
limitation in section 541(b) to its one-time use. 
The Secretary may also modify or waive any re-
quirement or condition in such section 541(b) 
that the Secretary considers inconsistent with 
the simplified debt restructuring authorized by 
this paragraph. 
‘‘(C) CONTRIBUTION.—The project owner 
receiving rehabilitation assistance under this 
paragraph shall not be required to make the 
contribution specified in paragraph (1)(B) or 
(2)(C), except to the extent the Secretary in-
creases project rents to provide for a return of 
the owner’s contribution over such period as the 
Secretary shall determine.’’. 
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145 
SEC. 509. INDEPENDENT APPRAISAL REQUIREMENT IN 
CASES OF DIVERGENT RENT STUDIES. 
Section 524(a)(5) of the Multifamily Assisted Hous-
ing Reform and Affordability Act of 1997 (42 U.S.C. 
1437f note) is amended by adding at the end the following 
new sentence: ‘‘In connection with a contract renewal 
under this section or section 515, if the comparable mar-
ket rent determination made by the Secretary and the 
owner’s appraiser differ by 15 percent or more, the owner 
may request a third appraiser, jointly selected and com-
pensated by the Secretary and the owner, to make a com-
parable market rent determination that shall be binding 
on both parties.’’. 
SEC. 510. EXTENSION OF HOUSING ASSISTANCE PAYMENT 
CONTRACT. 
(a) IN GENERAL.—Section 524(a) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 
(42 U.S.C. 1437f note) is amended by adding at the end 
the following new paragraph: 
‘‘(6) EXTENSION OF CONTRACT TERM.—In con-
nection with the refinancing or sale of a project cov-
ered by a contract renewed under this subsection, 
the Secretary shall, at the request of the owner, 
amend the contract to extend the term to 30 years 
or such shorter term as the owner may request. 
Such an extension shall be subject to the availability 
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of sufficient amounts provided in appropriation 
Acts.’’. 
(b) EXCEPTION RENT PROJECTS.—Section 524(b) of 
the Multifamily Assisted Housing Reform and Afford-
ability Act of 1997 (42 U.S.C. 1437f note) is amended 
by adding at the end the following new paragraph: 
‘‘(4) EXTENSION OF CONTRACT TERM.—In con-
nection with the refinancing or sale of a project cov-
ered by a contract renewed under this subsection, 
the Secretary shall, at the request of the owner, 
amend the contract to extend the term to 30 years 
or such shorter term as the owner may request. 
Such an extension shall be subject to the availability 
of sufficient amounts provided in appropriation 
Acts’’. 
SEC. 511. OTHERWISE ELIGIBLE PROJECTS. 
Section 514 of the Multifamily Assisted Housing Re-
form and Affordability Act of 1997 (42 U.S.C. 1437f 
note) is amended by adding at the end the following new 
subsection: 
‘‘(i) OTHER ELIGIBLE PROJECTS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this subtitle, a project that meets the re-
quirements of subparagraphs (B) and (C) of section 
512(2) but does not meet the requirements of sub-
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paragraph (A) of section 512(2), may be treated as 
an eligible multifamily housing project on an excep-
tion basis if the Secretary determines, subject to 
paragraph (2), that such treatment is necessary to 
preserve the project in the most cost-effective man-
ner in relation to other alternative preservation op-
tions. 
‘‘(2) OWNER REQUEST.— 
‘‘(A) REQUEST REQUIRED.—The Secretary 
shall not treat an otherwise eligible project de-
scribed under paragraph (1) as an eligible mul-
tifamily housing project unless the owner of the 
project requests such treatment. 
‘‘(B) NO ADVERSE TREATMENT IF NO RE-
QUEST MADE.—If the owner of a project does 
not make a request under subparagraph (A), 
the Secretary shall not withhold from such 
project any other available preservation option. 
‘‘(3) CANCELLATION.— 
‘‘(A) TIMING.—At any time prior to the 
completion of a mortgage restructuring under 
this subtitle, the owner of a project may— 
‘‘(i) withdraw any request made under 
paragraph (2)(A); and 
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148 
‘‘(ii) pursue any other option with re-
spect to the renewal of such owner’s sec-
tion 8 contract pursuant to any applicable 
statute or regulation. 
‘‘(B) DOCUMENTATION.—If an owner of a 
project withdraws such owner’s request and 
pursues other renewal options under this para-
graph, such owner shall be entitled to submit 
documentation or other information to replace 
the documentation or other information used 
during processing for mortgage restructuring 
under this subtitle. 
‘‘(4) LIMITATION.—The Secretary may exercise 
the authority to treat projects as eligible multifamily 
housing projects pursuant to this subsection only to 
the extent that the number of units in such projects 
do not exceed 10 percent of all units for which mort-
gage restructuring pursuant to section 517 is com-
pleted.’’. 
SEC. 512. EXCEPTION RENTS. 
In the matter preceding clause (i) of section 
514(g)(2)(A) of the Multifamily Assisted Housing Reform 
and Affordability Act of 1997 (42 U.S.C. 1437f note) is 
amended— 
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(1) by inserting ‘‘disaster-damaged eligible 
projects and’’ after ‘‘waive this limit for’’; and 
(2) by striking ‘‘five percent of all units’’ and 
inserting ‘‘9 percent of all units’’. 
SEC. 513. DISASTER-DAMAGED ELIGIBLE PROJECTS. 
(a) 
MARKET
RENT
DETERMINATION.—Section 
514(g)(1)(B) of the Multifamily Assisted Housing Reform 
and Affordability Act of 1997 (42 U.S.C. 1437f note) is 
amended by striking ‘‘determined, are equal’’ and insert-
ing the following: ‘‘determined— 
‘‘(i) with respect to a disaster-dam-
aged property, are equal to 100 percent of 
the fair market rents for the relevant mar-
ket area (as such rents were in effect at 
the time of such disaster); and 
‘‘(ii) with respect to other eligible 
multifamily housing projects, are equal’’. 
(b) OWNER INVESTMENT.—Section 517(c) of the 
Multifamily Assisted Housing Reform and Affordability 
Act of 1997 (42 U.S.C. 1437f note) is amended by adding 
at the end the following: 
‘‘(3) PROPERTIES DAMAGED BY NATURAL DIS-
ASTERS.—With respect to a disaster-damaged eligi-
ble property, the owner contribution toward rehabili-
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163 
tion 8(b)(2), as in effect before October 1, 
1983; 
(iii) the property disposition program 
under such section 8(b); 
(iv) the moderate rehabilitation pro-
gram under such section 8(e)(2); and 
(v) the loan management assistance 
program under such section 8; 
(B) section 23 of the United States Hous-
ing Act of 1937, as in effect before January 1, 
1975; 
(C) the rent supplement program under 
section 101 of the Housing and Urban Develop-
ment Act of 1965 (12 U.S.C. 1701s); 
(D) section 8 of the United States Housing 
Act of 1937, following conversion from assist-
ance under section 101 of the Housing and 
Urban Development Act of 1965; or 
(E) section 521 of the Housing Act of 
1949 (42 U.S.C. 1490a); 
(2) is financed by a mortgage insured or held 
by the Secretary under title II of the National Hous-
ing Act (12 U.S.C. 1707 et seq.); 
(3) receives assistance that is attached to the 
structure pursuant to— 
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(A) section 202 of the Housing Act of 
1959 (12 U.S.C. 1701q), including properties 
receiving assistance prior to the enactment of 
the Cranston-Gonzalez National Affordable 
Housing Act; 
(B) section 811 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 
8013); 
(C) section 5 or 9 of the United States 
Housing Act of 1937 (42 U.S.C. 1437c, 
1437g); 
(D) title II of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 
12721 et seq.); 
(E) subtitle D of title VIII of the Cran-
ston-Gonzalez National Affordable Housing Act 
(42 U.S.C. 12901 et seq.); 
(F) title IV of the McKinney-Vento Home-
less Assistance Act (12 U.S.C. 11301 et seq.); 
or 
(G) sections 514, 515, or 516 of the Hous-
ing Act of 1949 (42 U.S.C. 1484, 1485); 
(4) is financed in whole or part with low-income 
housing tax credits pursuant to section 42 of the In-
ternal Revenue Code of 1986 (26 U.S.C. 42); 
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