A bill to allow for the use of existing section 8 housing funds so as to preserve and revitalize affordable housing options for low-income individuals.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Housing Preservation and 
Revitalization Act of 2009''.

SEC. 2. AFFORDABLE HOUSING PRESERVATION AND REVITALIZATION PROGRAM.

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f) is amended by adding at the end the following:
    ``(ff) Affordable Housing Preservation and Revitalization 
Program.--
            ``(1) In general.--The Secretary of Housing and Urban 
        Development shall ensure that funds in the residual receipts 
        account of an eligible multifamily housing property are 
        transferred, at the time of a qualified sale or exchange, to a 
        preservation entity.
            ``(2) Purpose.--The purpose of this subsection is to 
        facilitate the transfer of multifamily housing projects with 
        expiring housing assistance payments contracts to preservation 
        entities that are committed to maintaining the affordability 
        and preservation of such projects by allowing expanded access 
        to existing residual receipts to assist with the acquisition 
        and rehabilitation of the project.
            ``(3) Use of funds.--A preservation entity that acquires an 
        eligible multifamily housing property through a qualified sale 
        shall, subject to the approval of the housing agency, use the 
        funds in the residual receipts account transferred to it, or 
        for its benefit--
                    ``(A) to pay for rehabilitation costs approved by 
                the housing agency;
                    ``(B) to deposit funds into the replacement reserve 
                account of the property;
                    ``(C) to pay for social and other services that 
                directly benefit the tenants of such property, but in 
                any 1 year such payments may not exceed 10 percent of 
                the balance of the residual receipts account of the 
                property at the end of the prior fiscal year;
                    ``(D) to pay for costs associated with the 
                acquisition of the property, but such payments may not 
                exceed 50 percent of the amount in the residual 
                receipts account of the property at the time of 
                acquisition; and
                    ``(E) to pay for any other costs that have been 
                approved by the housing agency and will directly 
                benefit the tenants of the property.
            ``(4) Definitions.--In this subsection, the following 
        definitions shall apply:
                    ``(A) Affordability and use restrictions.--The term 
                `affordability and use restrictions' means the 
                affordability and use restrictions in connection with 
                project-based housing assistance payments made under 
                this section.
                    ``(B) Extended use period.--The term `extended use 
                period' means the later of--
                            ``(i) 30 years after the close of the sale 
                        of an eligible multifamily housing property to 
                        a preservation entity, or
                            ``(ii) upon the expiration of the remaining 
                        useful life of the eligible multifamily 
                        property taking into account any rehabilitation 
                        undertaken in connection with the acquisition 
                        of said property by the preservation entity, as 
                        such remaining useful life is determined by the 
                        housing agency,
                provided that, such extended use period shall terminate 
                in the event that the Secretary of Housing and Urban 
                Development is unable to provide Section 8 assistance 
                on terms at least as advantageous to the preservation 
                entity as exist at the time of the acquisition of such 
                eligible multifamily housing property.
                    ``(C) Eligible multifamily housing property.--The 
                term `eligible multifamily housing property' means a 
                project that--
                            ``(i) is receiving project-based housing 
                        assistance payments under this section; and
                            ``(ii) was financed pursuant to part 883 of 
                        title 24, Code of Federal Regulations, on or 
                        after February 29, 1980.
                    ``(D) Housing agency.--The term `housing agency' 
                means, with respect to any eligible multifamily housing 
                property, the housing agency which administers housing 
                assistance with respect to such property.
                    ``(E) Preservation entity.--The term `preservation 
                entity' means an entity--
                            ``(i) that is--
                                    ``(I) a nonprofit corporation under 
                                State law that is exempt from Federal 
                                income taxation pursuant to paragraph 
                                (3) or (4) of section 501(c) of the 
                                Internal Revenue Code of 1986; or
                                    ``(II) a limited partnership or 
                                limited liability company where the 
                                sole general partner or sole managing 
                                member of such ownership entity is a 
                                nonprofit corporation under State law 
                                which is exempt from Federal income 
                                taxation pursuant to paragraphs (3) or 
                                (4) of section 501(c) of the Internal 
                                Revenue Code of 1986; and
                            ``(ii) approved by the housing agency that 
                        has the capacity to acquire and preserve an 
                        eligible multifamily housing property.
                    ``(F) Qualified sale.--
                            ``(i) In general.--The term `qualified 
                        sale' means the sale of an eligible multifamily 
                        housing property to a preservation entity which 
                        agrees to maintain affordability and use 
                        restrictions regarding the property that are--
                                    ``(I) for a term of not less than 
                                the extended use period; and
                                    ``(II) legally enforceable.
                            ``(ii) Future applicability of 
                        restrictions.--The restrictions under 
                        subparagraph (A) shall be--
                                    ``(I) binding on all successors and 
                                assigns of the preservation entity; and
                                    ``(II) recorded as a restrictive 
                                covenant on the property pursuant to 
                                State law.
                    ``(G) Residual receipts.--The term `residual 
                receipts' means--
                            ``(i) funds generated by a property in 
                        excess of the amount needed for operating 
                        expenses, operating reserve requirements, and 
                        allowable distributions to project owners; and
                            ``(ii) includes any other funds that the 
                        Secretary, in his or her discretion, designates 
                        as residual receipts.
            ``(5) Residual receipts not treated as federal funds.--For 
        the purposes of section 42 of the Internal Revenue Code of 
        1986, residual receipts used or transferred under this section 
        shall not be considered Federal funds.''.

Summary: Affordable Housing Preservation and Revitalization Act of 2009 - Amends the United States Housing Act of 1937 to direct the Secretary of Housing and Urban Development (HUD) to ensure that funds in the residual receipts account of an eligible multifamily housing property are transferred, at the time of a qualified sale or exchange, to preservation entities.

Requires that funds in the residual receipts account be used, subject to housing agency approval, to: (1) pay for rehabilitation costs approved by the housing agency; (2) deposit funds into the property's replacement reserve account; and (3) pay for social and other services, associated acquisition costs, and any other costs that have been approved by the housing agency and will directly benefit such tenants.

Defines "preservation entity" as: (1) a nonprofit tax-exempt corporation; or (2) a limited partnership or limited liability company where the sole general partner or sole managing member of such ownership entity is a nonprofit tax-exempt corporation; and (3) that has the capacity to acquire and preserve an eligible multifamily housing property.

States that, for purposes of the low-income housing credit under the Internal Revenue Code, residual receipts used or transferred under this Act shall not be considered federal funds.