management standards applicable to eligible multifamily
housing projects subject to mortgage restructuring and
rental assistance sufficiency plans administered by such
entity, including requirements governing conflicts of inter-
est between owners, managers, and contractors with an
identity of interest, pursuant to guidelines established by
the Secretary and consistent with industry standards.
SEC. 12. MONITORING OF COMPLIANCE.
(a) COMPLIANCE AGREEMENTS.—Pursuant to regu-
lations issued by the Secretary after public notice and
comment, 
each 
participating 
administrative 
entity,
through binding contractual agreements with owners and
otherwise, shall ensure long-term compliance with the pro-
visions of this Act. Each agreement, shall, at a minimum,
provide for—
(1) enforcement of the provisions of this Act;
and
(2) remedies for the breach of such provisions.
(b) PERIODIC MONITORING.—
(1) IN GENERAL.—Unless otherwise inspected
or reviewed by the Secretary, State or local housing
agency, or an FHA-insured lender, on an annual
basis, each participating administrative entity shall
review the status of all multifamily housing projects
for which a mortgage restructuring and rental as-
sistance sufficiency plan has been implemented.
(2) INSPECTION.—Each review under this sub-
section shall include an annual on-site inspection of
a sample of units to determine compliance with
housing quality standards and other requirements as
provided in this Act and the multifamily housing
management agreements.
(c) AUDIT BY SECRETARY.—The Comptroller Gen-
eral of the United States, the Secretary, and the Inspector
General of the Department of Housing and Urban Devel-
opment may conduct an audit, not more frequently than
on an annual basis, of any multifamily housing project for
which a mortgage restructuring and rental assistance suf-
ficiency plan has been implemented.
SEC. 13. REVIEW.
To ensure compliance with this Act, the Secretary
shall conduct an annual review and report to the Congress
on actions taken under this Act and the status of eligible
multifamily housing projects.
SEC. 14. GAO AUDIT AND REVIEW.
(a) INITIAL AUDIT.—Not later than 18 months after
the effective date of interim or final regulations promul-
gated under this Act, the Comptroller General of the Unit-
ed States shall conduct an audit to evaluate a representa-
tive sample of eligible multifamily housing projects and the
implementation of all mortgage restructuring and rental
assistance sufficiency plans.
(b) REPORT.—
(1) IN GENERAL.—Not later than 18 months
after the audit conducted under subsection (a), the
Comptroller General of the United States shall sub-
mit to the Congress a report on the status of all eli-
gible multifamily housing projects and the imple-
mentation of all mortgage restructuring and rental
assistance sufficiency plans.
(2) CONTENTS.—The report submitted under
paragraph (1) shall include—
(A) a description of the initial audit con-
ducted under subsection (a); and
(B) recommendations for any legislative
action to increase the financial savings to the
Federal Government of the restructuring of eli-
gible multifamily housing projects balanced with
the continued availability of the maximum num-
ber of affordable low-income housing units.
(c) COMPLIANCE STUDY.—Not later than 6 months
after the effective date of this Act, the GAO shall issue
a report addressing the effectiveness of the enforcement
mechanisms that are currently available to the Secretary
to ensure compliance with mortgage covenants, regulatory
agreements, section 8 housing assistance payments con-
tracts, and other agreements entered into between the
Secretary, the participating administrative entity, or an
FHA-approved lender, and owners or managers of eligible
multifamily housing. This report shall also evaluate the
Secretary’s use of such enforcement mechanisms.
SEC. 15. REGULATIONS.
The Secretary shall issue interim regulations nec-
essary to implement this Act and the amendments made
by this Act not later than the expiration of the 6-month
period beginning on the date of enactment of this Act. Not
later than 1 year after the date of enactment of this Act,
in accordance with the negotiated rulemaking procedures
set forth in subchapter III of chapter 5 of title 5, United
States Code, the Secretary shall implement final regula-
tions implementing this Act. If the Secretary fails to issue
such final regulations within such period, the Secretary
shall renew expiring contracts for 1 year on current con-
tract terms.
SEC. 16. TECHNICAL AND CONFORMING AMENDMENTS.
(a) CALCULATION OF LIMIT ON PROJECT-BASED AS-
SISTANCE.—Section 8(d) of the United States Housing
Act of 1937 (42 U.S.C. 1437f(d)) is amended by adding
at the end of the following new paragraph:
‘‘(5) Any contract entered into under section 6 of the
Multifamily Housing Restructuring and Affordability Act
of 1997 shall be included in computing the limit on
project-based assistance under this subsection.’’.
(b) EXTENSION OF TEMPORARY PROVISIONS RELAT-
ING TO PUBLIC HOUSING AND SECTION 8 RENTAL AS-
SISTANCE.—
(1) MINIMUM RENTS.—Section 402(a) of the
Balanced Budget Downpayment Act, I (Public Law
104–99; 110 Stat. 40) is amended, in the matter
preceding paragraph (1)—
(A) by striking ‘‘ and subsection (f) of this
section,’’; and
(B) by inserting ‘‘and fiscal years there-
after’’ after ‘‘1997’’.
(2) GENERAL RULE FOR APPLICABILITY.—Sec-
tion 402(f) of the Balanced Budget Downpayment
Act, I (42 U.S.C. 1437aa note) is amended—
(1) by striking ‘‘This section’’ and inserting
‘‘Subsections (b) and (c) of this section’’; and
(2) by adding at the end the following new sen-
tence: ‘‘The provisions of and the amendments made
by subsections (a) and (d) of this section shall be ef-
fective upon the enactment of this Act and there-
after.’’.
(c) PARTIAL PAYMENT OF CLAIMS ON MULTIFAMILY
HOUSING PROJECTS.—Section 541 of the National Hous-
ing Act (12 U.S.C. 1735f–19) is amended—
(1) in subsection (a), in the subsection heading
by striking ‘‘AUTHORITY’’ and inserting ‘‘DE-
FAULTED MORTGAGES’’;
(2) by redesignating subsection (b) as sub-
section (c); and
(3) by inserting after subsection (a) the follow-
ing new subsection:
‘‘(b) EXISTING MORTGAGE.—Notwithstanding any
other provision of law, the Secretary, in connection with
a mortgage restructuring pursuant to section 5 of the
Multifamily Housing Restructuring and Affordability Act
of 1997, may make a one time, nondefault partial payment
of the claim under the mortgage insurance contract, which
shall include a determination by the Secretary or the par-
ticipating administrative entity, in accordance with such
Act, of the market value of the project and a restructuring
of the mortgage, under such terms and conditions as the
Secretary may establish.’’.
(d) PRESERVATION OF FHA INSURANCE FUND.—
Notwithstanding any other provision of or amendment
made by this Act, no mortgage restructuring carried out
pursuant to this Act shall impact the credit scoring of
(A) 
by 
inserting 
‘‘(1)’’ 
before
‘‘$10,000,000’’ and
(B) by striking ‘‘September 30, 1998.’’
and inserting the following: ‘‘the termination of
the demonstration program pursuant to sub-
section (k); and (2) only to the extent that the
other amounts referred to in this subsection
have been used, amounts in the General Insur-
ance Fund (established under section 519 of
the National Housing Act) and the Special Risk
Insurance Fund (established under section
238(b) of such Act) shall be available, until the
termination of the demonstration program pur-
suant to subsection (k), to cover such costs with
respect to multifamily projects subject to mort-
gages that are obligations of such Funds.’’.
SEC. 18. TERMINATION OF AUTHORITY.
(a) IN GENERAL.—This Act is repealed effective Oc-
tober 1, 2002.
(b) EXCEPTION.—Notwithstanding the repeal under
subsection (a), the provisions of this Act (as in effect im-
mediately before such repeal) shall apply with respect to
projects and programs for which binding commitments
have been entered into under this Act before October 1,
2002.
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