H. R. 2158—46
rental assistance sufficiency plan’’ means the plan as provided
under section 514.
(8) 
NONPROFIT
ORGANIZATION.—The 
term 
‘‘nonprofit
organization’’ means any private nonprofit organization that—
(A) is organized under State or local laws;
(B) has no part of its net earnings inuring to the
benefit of any member, founder, contributor, or individual;
and
(C) has a long-term record of service in providing or
financing quality affordable housing for low-income families
through relationships with public entities.
(9) PORTFOLIO
RESTRUCTURING
AGREEMENT.—The term
‘‘portfolio restructuring agreement’’ means the agreement
entered into between the Secretary and a participating adminis-
trative entity, as provided under section 513.
(10) PARTICIPATING
ADMINISTRATIVE
ENTITY.—The term
‘‘participating administrative entity’’ means a public agency
(including a State housing finance agency or a local housing
agency), a nonprofit organization, or any other entity (including
a law firm or an accounting firm) or a combination of such
entities, that meets the requirements under section 513(b).
(11) PROJECT-BASED ASSISTANCE.—The term ‘‘project-based
assistance’’ means rental assistance described in paragraph
(2)(B) of this section that is attached to a multifamily housing
project.
(12) RENEWAL.—The term ‘‘renewal’’ means the replace-
ment of an expiring Federal rental contract with a new contract
under section 8 of the United States Housing Act of 1937,
consistent with the requirements of this subtitle.
(13) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of Housing and Urban Development.
(14) STATE.—The term ‘‘State’’ has the same meaning as
in section 104 of the Cranston-Gonzalez National Affordable
Housing Act.
(15) TENANT-BASED ASSISTANCE.—The term ‘‘tenant-based
assistance’’ has the same meaning as in section 8(f) of the
United States Housing Act of 1937.
(16) UNIT
OF
GENERAL
LOCAL
GOVERNMENT.—The term
‘‘unit of general local government’’ has the same meaning as
in section 104 of the Cranston-Gonzalez National Affordable
Housing Act.
(17) VERY
LOW-INCOME
FAMILY.—The term ‘‘very low-
income family’’ has the same meaning as in section 3(b) of
the United States Housing Act of 1937.
(18) QUALIFIED MORTGAGEE.—The term ‘‘qualified mortga-
gee’’ means an entity approved by the Secretary that is capable
of servicing, as well as originating, FHA-insured mortgages,
and that—
(A) is not suspended or debarred by the Secretary;
(B) is not suspended or on probation imposed by the
Mortgagee Review Board; and
(C) is not in default under any Government National
Mortgage Association obligation.
SEC. 513. AUTHORITY OF PARTICIPATING ADMINISTRATIVE ENTITIES.
(a) PARTICIPATING ADMINISTRATIVE ENTITIES.—
H. R. 2158—47
(1) IN GENERAL.—Subject to subsection (b)(3), the Secretary
shall enter into portfolio restructuring agreements with
participating administrative entities for the implementation of
mortgage restructuring and rental assistance sufficiency plans
to restructure multifamily housing mortgages insured or held
by the Secretary under the National Housing Act, in order
to—
(A) reduce the costs of expiring contracts for assistance
under section 8 of the United States Housing Act of 1937;
(B) address financially and physically troubled projects;
and
(C) correct management and ownership deficiencies.
(2) PORTFOLIO RESTRUCTURING AGREEMENTS.—Each port-
folio restructuring agreement entered into under this subsection
shall—
(A) be a cooperative agreement to establish the obliga-
tions and requirements between the Secretary and the
participating administrative entity;
(B) identify the eligible multifamily housing projects
or groups of projects for which the participating administra-
tive entity is responsible for assisting in developing and
implementing approved mortgage restructuring and rental
assistance sufficiency plans under section 514;
(C) require the participating administrative entity to
review and certify to the accuracy and completeness of
the evaluation of rehabilitation needs required under sec-
tion 514(e)(3) for each eligible multifamily housing project
included in the portfolio restructuring agreement, in accord-
ance with regulations promulgated by the Secretary;
(D) identify the responsibilities of both the participat-
ing administrative entity and the Secretary in implement-
ing a mortgage restructuring and rental assistance
sufficiency plan, including any actions proposed to be taken
under section 516 or 517;
(E) require each mortgage restructuring and rental
assistance sufficiency plan to be prepared in accordance
with the requirements of section 514 for each eligible multi-
family housing project;
(F) include other requirements established by the Sec-
retary, including a right of the Secretary to terminate
the contract immediately for failure of the participating
administrative entity to comply with any applicable
requirement;
(G) if the participating administrative entity is a State
housing finance agency or a local housing agency,
indemnify the participating administrative entity against
lawsuits and penalties for actions taken pursuant to the
agreement, excluding actions involving willful misconduct
or negligence;
(H) include compensation for all reasonable expenses
incurred by the participating administrative entity nec-
essary to perform its duties under this subtitle; and
(I) include, where appropriate, incentive agreements
with the participating administrative entity to reward supe-
rior performance in meeting the purposes of this Act.
(b) SELECTION OF PARTICIPATING ADMINISTRATIVE ENTITY.—
H. R. 2158—48
(1) SELECTION
CRITERIA.—The Secretary shall select a
participating administrative entity based on whether, in the
determination of the Secretary, the participating administrative
entity—
(A) has demonstrated experience in working directly
with residents of low-income housing projects and with
tenants and other community-based organizations;
(B) has demonstrated experience with and capacity
for multifamily restructuring and multifamily financing
(which 
may 
include 
risk-sharing 
arrangements 
and
restructuring eligible multifamily housing properties under
the fiscal year 1997 Federal Housing Administration multi-
family housing demonstration program);
(C) has a history of stable, financially sound, and
responsible administrative performance (which may include
the management of affordable low-income rental housing);
(D) has demonstrated financial strength in terms of
asset quality, capital adequacy, and liquidity;
(E) has demonstrated that it will carry out the specific
transactions and other responsibilities under this subtitle
in a timely, efficient, and cost-effective manner; and
(F) meets other criteria, as determined by the Sec-
retary.
(2) SELECTION.—If more than 1 interested entity meets
the qualifications and selection criteria for a participating
administrative entity, the Secretary may select the entity that
demonstrates, as determined by the Secretary, that it will—
(A) provide the most timely, efficient, and cost-effec-
tive—
(i) restructuring of the mortgages covered by the
portfolio restructuring agreement; and
(ii) administration of the section 8 project-based
assistance contract, if applicable; and
(B) protect the public interest (including the long-term
provision of decent low-income affordable rental housing
and protection of residents, communities, and the American
taxpayer).
(3) PARTNERSHIPS.—For the purposes of any participating
administrative entity applying under this subsection, participat-
ing administrative entities are encouraged to develop partner-
ships with each other and with nonprofit organizations, if such
partnerships will further the participating administrative
entity’s ability to meet the purposes of this Act.
(4) ALTERNATIVE
ADMINISTRATORS.—With respect to any
eligible multifamily housing project for which a participating
administrative entity is unavailable, or should not be selected
to carry out the requirements of this subtitle with respect
to that multifamily housing project for reasons relating to the
selection criteria under paragraph (1), the Secretary shall—
(A) carry out the requirements of this subtitle with
respect to that eligible multifamily housing project; or
(B) contract with other qualified entities that meet
the requirements of paragraph (1) to provide the authority
to carry out all or a portion of the requirements of this
subtitle with respect to that eligible multifamily housing
project.
H. R. 2158—49
(5) PRIORITY
FOR
PUBLIC
AGENCIES
AS
PARTICIPATING
ADMINISTRATIVE
ENTITIES.—The Secretary shall provide a
reasonable period during which the Secretary will consider
proposals only from State housing finance agencies or local
housing agencies, and the Secretary shall select such an agency
without considering other applicants if the Secretary deter-
mines that the agency is qualified. The period shall be of
sufficient duration for the Secretary to determine whether any
State housing finance agencies or local housing agencies are
interested and qualified. Not later than the end of the period,
the Secretary shall notify the State housing finance agency
or the local housing agency regarding the status of the proposal
and, if the proposal is rejected, the reasons for the rejection
and an opportunity for the applicant to respond.
(6) STATE AND LOCAL PORTFOLIO REQUIREMENTS.—
(A) IN GENERAL.—If the housing finance agency of a
State is selected as the participating administrative entity,
that agency shall be responsible for such eligible multifam-
ily housing projects in that State as may be agreed upon
by the participating administrative entity and the Sec-
retary. If a local housing agency is selected as the
participating administrative entity, that agency shall be
responsible for such eligible multifamily housing projects
in the jurisdiction of the agency as may be agreed upon
by the participating administrative entity and the Sec-
retary.
(B) NONDELEGATION.—Except with the prior approval
of the Secretary, a participating administrative entity may
not delegate or transfer responsibilities and functions under
this subtitle to 1 or more entities.
(7) PRIVATE ENTITY REQUIREMENTS.—
(A) IN GENERAL.—If a for-profit entity is selected as
the participating administrative entity, that entity shall
be required to enter into a partnership with a public pur-
pose entity (including the Department).
(B) PROHIBITION.—No private entity shall share,
participate in, or otherwise benefit from any equity created,
received, or restructured as a result of the portfolio
restructuring agreement.
SEC. 514. MORTGAGE RESTRUCTURING AND RENTAL ASSISTANCE
SUFFICIENCY PLAN.
(a) IN GENERAL.—
(1) DEVELOPMENT OF PROCEDURES AND REQUIREMENTS.—
The Secretary shall develop procedures and requirements for
the submission of a mortgage restructuring and rental assist-
ance sufficiency plan for each eligible multifamily housing
project with an expiring contract.
(2) TERMS AND CONDITIONS.—Each mortgage restructuring
and rental assistance sufficiency plan submitted under this
subsection shall be developed by the participating administra-
tive entity, in cooperation with an owner of an eligible multi-
family housing project and any servicer for the mortgage that
is a qualified mortgagee, under such terms and conditions
as the Secretary shall require.
(3) CONSOLIDATION.—Mortgage restructuring and rental
assistance sufficiency plans submitted under this subsection