I 114th CONGRESS 1st Session H. R. 2482 IN THE HOUSE OF REPRESENTATIVES May 20, 2015 Mr. Paulsen introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Low-Income Housing Preservation and Resident Homeownership Act of 1990.

1. Short title This Act may be cited as the Preservation Enhancement and Savings Opportunity Act of 2015 . 2. Distributions and residual receipts Section 222 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 ( 12 U.S.C. 4112 ) is amended by adding at the end the following new subsection: (e) Distribution and residual receipts (1) Authority After the date of the enactment of the Preservation Enhancement and Savings Opportunity Act of 2015, the owner of a property subject to a plan of action or use agreement pursuant to this section shall be entitled to distribute— (A) annually, all surplus cash generated by the property, but only if the owner is in material compliance with such use agreement including compliance with prevailing physical condition standards established by the Secretary; and (B) notwithstanding any conflicting provision in such use agreement, any funds accumulated in a residual receipts account, but only if the owner is in material compliance with such use agreement and has completed, or set aside sufficient funds for completion of, any capital repairs identified by the most recent third party capital needs assessment. (2) Operation of property An owner that distributes any amounts pursuant to paragraph (1) shall— (A) continue to operate the property in accordance with the affordability provisions of the use agreement for the property for the remaining useful life of the property; (B) as required by the plan of action for the property, continue to renew or extend any project-based rental assistance contract for a term of not less than 20 years; and (C) if the owner has an existing multi-year project-based rental assistance contract for less than 20 years, have the option to extend the contract to a 20-year term. . 3. Future refinancings Section 214 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 ( 12 U.S.C. 4104 ) is amended by adding at the end the following new subsection: (c) Future financing Neither this section, nor any plan of action or use agreement implementing this section, shall restrict an owner from obtaining a new loan or refinancing an existing loan secured by the project, or from distributing the proceeds of such a loan; except that, in conjunction with such refinancing— (1) the owner shall provide for adequate rehabilitation pursuant to a capital needs assessment to ensure long-term sustainability of the property satisfactory to the lender or bond issuance agency; (2) any resulting budget-based rent increase shall include debt service on the new financing, commercially reasonable debt service coverage, and replacement reserves as required by the lender; and (3) for tenants of dwelling units not covered by a project- or tenant-based rental subsidy, any rent increases resulting from the refinancing transaction may not exceed 10 percent per year, except that— (A) any tenant occupying a dwelling unit as of time of the refinancing may not be required to pay for rent and utilities, for the duration of such tenancy, an amount that exceeds the greater of— (i) 30 percent of the tenant’s income; or (ii) the amount paid by the tenant for rent and utilities immediately before such refinancing; and (B) this paragraph shall not apply to any tenant who does not provide the owner with proof of income. Paragraph (3) may not be construed to limit any rent increases resulting from increased operating costs for a project. . 4. Implementation The Secretary of Housing and Urban Development shall issue any guidance that the Secretary considers necessary to carry out the provisions added by the amendments made by sections 2 and 3 not later than the expiration of the 120-day period beginning on the date of the enactment of this Act.