II 115th CONGRESS 2d Session S. 2574 IN THE SENATE OF THE UNITED STATES March 20, 2018 Mrs. Shaheen (for herself and Ms. Smith ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To provide rental assistance to low-income tenants of certain multifamily rural housing projects, and for other purposes.

1. Short title This Act may be cited as the Rural Housing Preservation Act of 2018 . 2. Availability of rural housing vouchers for tenants in projects with maturing loans (a) In general Section 542 of the Housing Act of 1949 ( 42 U.S.C. 1490r ) is amended by adding at the end the following: (c) Rural vouchers for tenants of projects with prepaid or maturing loans (1) Authority Subject to the availability of amounts provided in appropriation Acts and to paragraph (3), the Secretary shall provide rural housing vouchers under this section, in the amount provided under this section, to any low-income household (including those not receiving rental assistance) residing in a property that is— (A) financed with a loan made or insured under section 514 or 515 that has been prepaid or has matured after September 30, 2005; or (B) assisted under section 514 or 516 that is owned by a nonprofit organization or public agency. (2) Administration and subsidies (A) In general The Secretary shall, to the maximum extent practicable, administer and operate rural housing vouchers under this section according to regulations and administrative guidance that is applicable to enhanced vouchers under section 8(t) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(t) ) administered by the Secretary of Housing and Urban Development. (B) Amount of assistance The amount of rental assistance provided on behalf of holders of rural housing vouchers under this section shall be the same as the rental assistance provided on behalf of holders of enhanced vouchers under section 8(t) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(t) ). (3) Termination of assistance The Secretary shall terminate the provision of voucher assistance pursuant to this subsection, with respect to a property, if— (A) at any time, a new loan is made or insured under section 514 or 515 for the property; and (B) as a result of a loan described in subparagraph (A), rental assistance is provided on behalf of the voucher holder in an amount comparable to the rental assistance provided on behalf of the voucher holder under the voucher program. (d) Limitation relating to projects with prepaid loans (1) In general The Secretary shall not issue rural housing vouchers under this section to residents who remain in properties that— (A) were financed with a loan made or insured under section 514 or 515 that has been prepaid; and (B) are subject to any restrictive use agreements entered into pursuant to section 502(c)(5)(G). (2) Review and approval The Secretary shall review and approve all proposed rent increases for residents of properties described in paragraph (1) that are protected by the use agreements described in that paragraph and issue, to those residents, limited voucher assistance that covers the cost of all approved future rent increases that are not related to the cost of prepaying the loan or refinancing the property. . (b) Requirement for section 515 projects To accept vouchers Section 515 of the Housing Act of 1949 ( 42 U.S.C. 1485 ) is amended by adding at the end the following: (bb) Requirement To accept rural housing vouchers No owner of a property financed with a loan made or insured under this section, whether the loan is outstanding or fully paid, may refuse to lease an available dwelling unit in the property to a household on behalf of whom voucher assistance is provided under section 542, and to enter into a voucher contract respecting the unit, a proximate cause of which is the status of the current or prospective tenant as a holder of that voucher. . 3. Decoupling rental assistance from maturing rural housing loans Section 521(a)(2) of the Housing Act of 1949 ( 42 U.S.C. 1490a(a)(2) ) is amended by adding at the end the following: (F) Rental assistance for projects with matured loans (i) Authority To continue to make decent, safe and sanitary housing available to low-income occupants of projects originally financed with a loan made or insured under section 514 or 515 that has matured on or after the date of enactment of this subparagraph or with a grant provided under section 516, and at rental rates commensurate to income as specified in subparagraph (A), the Secretary may, subject to the availability of amounts provided in appropriation Acts, contract to make and renew annual assistance payments pursuant to this subparagraph to the owners of those projects. (ii) Offer The Secretary shall ensure that an offer to provide a contract for assistance payments pursuant to this subparagraph shall be extended to all owners of projects described in clause (i) not later than 24 months before the maturation of the loan (except in the case of loans maturing after the date that is 24 months before the date of enactment of this subparagraph). (iii) Terms Each contract for assistance payments pursuant to this subparagraph shall— (I) have a term of 20 years and be subject to availability of amounts provided in annual appropriations Acts; (II) cover all new and existing households residing in the project, regardless of whether or not the households were previously assisted under the rental assistance program authorized under subparagraph (A); (III) be recorded at such local real property recording office as is prescribed by the State in which the project is located; (IV) bind the owner of the project and successors of the owner to continue to operate the project in accordance with such agreements; (V) require the owner and successors of the owner to agree to continue to operate the project as if the project were subject to an existing loan under section 514 or 515 or a grant under section 516, as applicable; (VI) extend to residents of the project all the rights that at the time the contract is entered into are extended to residents of projects subject to an existing loan under section 514 or 515 or a grant under section 516, as applicable; (VII) require the owner successors of the owner to maintain the assisted housing as decent, safe, and sanitary housing; and (VIII) provide that the Secretary may renew the contract for additional 5-year terms if the assisted housing is maintained in a decent, safe, and sanitary condition, as determined by the Secretary. (iv) Actual market rentals (I) In general A contract for assistance provided pursuant to this subparagraph for a project shall provide assistance to the owner based on an initial reasonable operating budget the rents for which do not exceed such actual market rental rates for the area in which the project is located, as are established by the Secretary. (II) Adjustment; renewal The Secretary shall annually adjust the actual market rental rates used for purposes of this clause. (v) Renewal; adjustment In providing assistance pursuant to this subparagraph, the Secretary shall require the owner of the project to renew the assistance provided to each household not less frequently than annually, in accordance with the provisions of subparagraph (A), and shall adjust the amount of assistance provided to a household at any other time upon a decrease in the monthly income of the household of $100 or more. (vi) Administration Except as otherwise provided in this subparagraph, rental assistance contracts authorized by this subparagraph shall be administered by the Secretary in the same manner as rental assistance contracts for projects having existing loans made or insured under section 515 or existing loans and grants made under sections 514 and 516. . 4. Uniform standards for transfers of section 515 properties using low-income tax credits Section 515 of the Housing Act of 1949 ( 42 U.S.C. 1485 ), as amended by this Act, is amended by adding at the end the following: (cc) Requirements for transfers of properties involving low-Income housing tax credits The Secretary shall establish, without exception, uniform requirements, terms, and conditions for any sale or transfer of a property financed with a loan under this section to any entity, including a nonprofit organization, that is seeking to acquire that property with amounts authorized under this section and any low-income housing tax credit under section 42 of the Internal Revenue Code of 1986. . 5. Rural multifamily housing revitalization program Section 515 of the Housing Act of 1949 ( 42 U.S.C. 1485 ), as amended by this Act, is amended by adding at the end the following: (cc) Multifamily housing revitalization program (1) In general The Secretary may establish a Multifamily Housing Revitalization Program for the preservation and revitalization of multifamily housing projects funded with loans made available pursuant to this section and sections 514 and 516 to ensure that those projects have sufficient resources to provide safe and affordable housing for low-income residents and farm laborers. (2) Options In carrying out paragraph (1), the Secretary may— (A) with respect to the loans— (i) reduce or eliminate interest; (ii) defer loan payments; and (iii) subordinate, reduce, or reamortize loan debt; and (B) provide other financial assistance, including— (i) advances; and (ii) payments and incentives (including the ability of owners to obtain reasonable returns on investment). (3) Requirements In exchange for assistance provided pursuant to this subsection, the Secretary shall enter into a restrictive use agreement with the property owner to ensure that the property remains subject to low-income use restrictions for an additional period of time consistent with the terms of the restructuring. (4) Use of funds for rural housing vouchers (A) Authority If the Secretary determines that additional voucher funds under section 542 are needed, funds for the revitalization program under this subsection may be used for those vouchers for any low-income household (including those not receiving rental assistance) residing in a property financed with a loan under this section that has been prepaid after September 30, 2005. (B) Amount Notwithstanding section 542, the amount of a voucher provided pursuant to this paragraph shall be the difference between comparable market rent for the unit and the tenant-paid rent for the unit. (C) Availability Funds made available for vouchers pursuant to this paragraph shall be subject to the availability of annual appropriations. (D) Administration The Secretary shall, to the maximum extent practicable, administer vouchers provided pursuant to this paragraph with regulations and administrative guidance that is applicable to housing vouchers under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ) administered by the Secretary of Housing and Urban Development. (5) Use of voucher funds for revitalization program If the Secretary determines that additional funds for the revitalization program under this subsection are needed, funds for the rural housing voucher program under section 542 may be used for the revitalization program under this subsection. . 6. Regulations Not later than 120 days after the date of enactment of this Act, the Secretary of Agriculture shall issue regulations necessary to carry out the amendments made by this Act.