Opinion ID: 783493
Heading Depth: 3
Heading Rank: 1

Heading: Federal Housing Statutes

Text: 4 In 1934, Congress enacted the National Housing Act (NHA) to provide a decent home and suitable living environment for every American family. 12 U.S.C. § 1701t. In 1968, Congress added Section 236 to the NHA [f]or the purpose of reducing rentals for lower income families[.] 12 U.S.C. § 1715z-1. Under Section 236, the federal government enters into 40-year agreements with property owners by which it provides mortgage interest subsidies to owners who are willing to charge below-market rents. Id. In 1970, HUD promulgated regulations that permit participants, after 20 years in the federal program, to prepay their subsidized mortgages, exit the program, and free themselves from federal rent control. 24 C.F.R. § 221.524(a)(ii) (1970). 5 In 1987, Congress passed the Emergency Low Income Housing Preservation Act (ELIHPA) out of concern that the stock of low income housing would be depleted if property owners left the federal rent control program after just 20 years. 12 U.S.C. § 1715l note (1988). ELIHPA effectively placed a two-year moratorium on participants' ability to prepay their mortgages and leave the federal program. Id. 6 In 1990, Congress replaced ELIHPA with the Low Income Housing Preservation and Resident Homeownership Act (LIHPRHA). 12 U.S.C. § 4101. LIHPRHA imposed stringent requirements upon property owners who wanted to prepay their mortgages and exit the federal program. Id. §§ 4101(a), 4108. At the same time, LIHPRHA provided incentives for property owners to stay in the program. See id. § 4109. LIHPRHA also expressly preempted state laws that restrict[] or inhibit[] the prepayment of any [subsidized] mortgage, or are limited only to eligible low income housing for which the owner has prepaid the mortgage[.] Id. § 4122(a). LIHPRHA provided, however, that its preemption provision would not prevent the establishment, continuing in effect, or enforcement of any law or regulation of any State ... relating to ... rent control ... to the extent such law or regulation is of general applicability[.] Id. § 4122(b). 7 In 1996, Congress eliminated the prepayment restrictions imposed by LIHPRHA by enacting the Housing Opportunity Program Extension Act (HOPE), Pub.L. No. 104-120, 110 Stat. 834. HOPE permits property owners to prepay their mortgages after 20 years, but prohibits them from raising rents for 60 days after exiting the program. See 12 U.S.C. § 4101 note. HOPE contains no preemption provision nor does it mention LIHPRHA's preemption provision. After enacting HOPE, Congress ceased funding the additional incentives provided by LIHPRHA.