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12 U.S.C. § 4105 — Federal cost limits and limitations on plans of action

Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4105 — Federal cost limits and limitations on plans of action

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Source file: Laws/federal/codes/united-states-code/title-12/section-4105-federal-cost-limits-and-limitations-on-plans-of-action--b317a437fe.md
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Source location: Title 12, Chapter 42, § 4105; chapter-042-low-income-housing-preservation-and-resident-homeownership.md

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**(a) Determination of relationship to Federal cost limits** (1) **Initial determination** — For each eligible low-income housing project appraised under [section 4103(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4103/a&num=0&edition=prelim), the Secretary shall determine whether the aggregate preservation rents for the project determined under paragraph (1) or (2) of [section 4104(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4104/b&num=0&edition=prelim) exceed the amount determined by multiplying 120 percent of the fair market rental (established under [section 1437f(c) of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f/c&num=0&edition=prelim)) for the market area in which the housing is located by the number of dwelling units in the project (according to appropriate unit sizes). (2) **Relevant local markets** — If the aggregate preservation rents for a project exceeds the amount determined under paragraph (1), the Secretary shall determine whether such aggregate rents exceed the amount determined by multiplying 120 percent of the prevailing rents in the relevant local market area in which the housing is located by the number of units in the project (according to the appropriate unit sizes). A relevant local market area shall be an area geographically smaller than a market area established by the Secretary under [section 1437f(c)(1) of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f/c/1&num=0&edition=prelim) that is identifiable as a distinct rental market area. The Secretary may rely on the appraisal to determine the relevant local market areas and prevailing rents in such local areas and any other information the Secretary determines is appropriate. (3) **Effect** — For purposes of this subchapter, the aggregate preservation rents shall be considered to exceed the Federal cost limits under this subsection only if the aggregate preservation rents exceed the amount determined under paragraph (1) and the amount determined under paragraph (2). **(b) Limitations on action pursuant to Federal cost limits** (1) **Housing within Federal cost limits** — If the aggregate preservation rents for an eligible low-income housing project do not exceed the Federal cost limit, the owner may not prepay the mortgage on the housing or terminate the insurance contract with respect to the housing, except as permitted under [section 4114 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4114&num=0&edition=prelim). The owner may— (A) file a plan of action under [section 4107 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4107&num=0&edition=prelim) to receive incentives under [section 4109 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109&num=0&edition=prelim); or (B) file a second notice of intent under [section 4106(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106/d&num=0&edition=prelim) indicating an intention to transfer the housing under [section 4110 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4110&num=0&edition=prelim) and take actions pursuant to such section. (2) **Housing exceeding Federal cost limits** — If the aggregate preservation rents for an eligible low-income housing project exceed the Federal cost limit, the owner may— (A) file a plan of action under [section 4107 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4107&num=0&edition=prelim) to receive incentives under [section 4109 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109&num=0&edition=prelim) if the owner agrees to accept incentives under such sections in an amount that shall not exceed the Federal cost limit; (B) file a second notice of intent under [section 4106(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106/d&num=0&edition=prelim) indicating an intention to transfer the housing under [section 4110 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4110&num=0&edition=prelim) and take actions pursuant to such section if the owner agrees to transfer the housing at a price that shall not exceed the Federal cost limit; or (C) file a second notice of intent under [section 4106(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106/d&num=0&edition=prelim) indicating an intention to prepay the mortgage or voluntarily terminate the insurance, subject to the mandatory sale provisions under [section 4111 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4111&num=0&edition=prelim).

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4111 — Mandatory sale for housing exceeding Federal cost limits

**(a) In general** With respect to any eligible low-income housing for which the aggregate preservation rents determined under [section 4104(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4104/b&num=0&edition=prelim) exceed the Federal cost limit, the owner shall offer the housing for sale to qualified purchasers as provided in this section. **(b) Right of first refusal to priority purchasers** (1) **Duration and required sale** — For the 12-month period beginning upon the receipt by the Secretary of the second notice of intent under [section 4106(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106/d&num=0&edition=prelim) with respect to such housing, the owner of the housing may offer to sell and may sell the housing only to priority purchasers. If, during such period, a priority purchaser makes a bona fide offer to purchase the housing for a sale price not less than the preservation value of the housing determined under [section 4103(b)(2) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4103/b/2&num=0&edition=prelim), the Secretary shall require the owner to sell the housing pursuant to such offer. (2) **Expression of interest** — During the period under paragraph (1), priority purchasers shall have the opportunity to submit written notice to the owner and the Secretary stating their interest in acquiring the housing. Such written notice shall be in such form and include such information as the Secretary may prescribe. (3) **Information from Secretary** — Not later than 30 days after receipt of any notice under paragraph (2), the Secretary shall provide such purchaser with information on the assistance available from the Federal

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4111

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4109 — Incentives to extend low-income use

**(a) Agreements by Secretary** After approving a plan of action from an owner of eligible low-income housing that includes the owner’s plan to extend the low-income affordability restrictions of the housing, the Secretary shall, subject to the availability of appropriations for such purpose, enter into such agreements as are necessary to enable the owner to receive (for each year after the approval of the plan of action) the annual authorized return for the housing determined under [section 4104(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4104/a&num=0&edition=prelim), pay debt service on the federally-assisted mortgage covering the housing, pay debt service on any loan for rehabilitation of the housing, and meet project operating expenses and establish adequate reserves. The Secretary shall take into account the Federal cost limits under [section 4105(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4105/a&num=0&edition=prelim) for the housing when providing incentives under subsections 11 So in original. Probably should be “subsection”. (b)(2) and (3) of this section. The Secretary shall take such actions as are necessary to ensure that owners receive the annual authorized return for the housing determined under [section 4104(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4104/a&num=0&edition=prelim) during the period in which rent increases are phased in as provided in [section 4112(a)(2)(E) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4112/a/2/E&num=0&edition=prelim), including (in order of preference) (1) allowing the owner access to residual receipt accounts (pursuant to subsecti

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4109

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4110 — Incentives for transfer to qualified purchasers

**(a) In general** With respect to any eligible low-income housing for which an owner has submitted a second notice of intent under [section 4106(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106/d&num=0&edition=prelim) to transfer the housing to a qualified purchaser, the owner shall offer the housing for transfer to qualified purchasers as provided in this section. The Secretary shall issue regulations describing the means by which potential qualified purchasers shall be notified of the availability of the housing for sale. The Secretary shall take into account the Federal cost limits under [section 4105(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4105/a&num=0&edition=prelim) for the housing when providing incentives under section 4109(b)(2) and (b)(3) of this title (pursuant to subsection (d)(3) of this section). **(b) Right of first offer to priority purchasers** (1) **Negotiation period** — For the 12-month period beginning on the receipt by the Secretary of a second notice of intent under [section 4106(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106/d&num=0&edition=prelim) with respect to such housing, the owner may offer to sell and negotiate a sale of the housing only with priority purchasers. The negotiated sale price may not exceed the preservation value of the housing determined under [section 4103(b)(2) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4103/b/2&num=0&edition=prelim). The owner or the purchaser shall submit a plan of action under [section 4107 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4107&num=0&edition=p

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4110

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4107 — Plan of action

**(a) Submission to Secretary** (1) **Timing** — Not later than 6 months after receipt of the information from the Secretary under [section 4106 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4106&num=0&edition=prelim) an owner seeking to terminate the low-income affordability restrictions through prepayment of the mortgage or voluntary termination under [section 4108 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4108&num=0&edition=prelim), or to extend the low-income affordability restriction on the housing under [section 4109 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109&num=0&edition=prelim), shall submit a plan of action to the Secretary in such form and manner as the Secretary shall prescribe. Any owner or purchaser seeking a transfer of the housing under section 4110 or 4111 of this title shall submit a plan of action under this section to the Secretary upon acceptance of a bona fide offer under section 4110(b) or (c) of this title or upon making of any bona fide offer under [section 4111 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4111&num=0&edition=prelim). (2) **Copies to tenants** — Each owner submitting a plan of action under this section to the Secretary shall also submit a copy to the tenants of the housing. The owner shall simultaneously submit the plan of action to the office of the chief executive officer of the appropriate State or local government for the jurisdiction within which the housing is located. Each owner and the Secretary shall also, upon request, make available to the tenants of the housing and to the office of the chief executive officer of the appropriat

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4107

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4114 — Permissible prepayment or voluntary termination and modification of commitments

**(a) In general** Notwithstanding any limitations on prepayment or voluntary termination under this subchapter, an owner may terminate the low-income affordability restrictions through prepayment or voluntary termination, subject to compliance with the provisions of [section 4113 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4113&num=0&edition=prelim), under one of the following circumstances: (1) (A) The Secretary approves a plan of action under [section 4109(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109/a&num=0&edition=prelim), but does not provide the assistance approved in such plan during the 15-month period beginning on the date of approval. (B) After the date that the housing would have been eligible for prepayment pursuant to the terms of the mortgage (notwithstanding this subchapter), the Secretary approves a plan of action under section 4110 or 4111 of this title, but does not provide the assistance approved in such plan before the earlier of (i) the expiration of the 2-month period beginning on the commencement of the 1st fiscal year beginning after such approval, or (ii) the expiration of the 6-month period beginning on the date of approval. (C) The Secretary approves a plan of action under section 4110 or 4111 of this title for any eligible low-income housing not covered by subparagraph (B), but does not provide the assistance approved in such plan before the earlier of (i) the expiration of the 2-month period beginning on the commencement of the 1st fiscal year beginning after such approval, or (ii) the expiration of the 9-month period beginning on the date of approval. (2) An owner who intended to transfer the housing to a qualified purchaser unde

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4114

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4104 — Annual authorized return and preservation rents

**(a) Annual authorized return** Pursuant to an appraisal under [section 4103 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4103&num=0&edition=prelim), the Secretary shall determine the annual authorized return on the appraised housing, which shall be equal to 8 percent of the preservation equity (as such term is defined in [section 4119(8) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4119/8&num=0&edition=prelim)). **(b) Preservation rents** The Secretary shall also determine the aggregate preservation rents under this subsection for each project appraised under [section 4103 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4103&num=0&edition=prelim). The aggregate preservation rents shall be used solely for the purposes of comparison with Federal cost limits under [section 4105 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4105&num=0&edition=prelim). Actual rents received by an owner (or a qualified purchaser) shall be determined pursuant to section 4109, 4110, or 4111 of this title. The aggregate preservation rents shall be established as follows: (1) **Extension of affordability limits** — The aggregate preservation rent for purposes of receiving incentives pursuant to extension of the low-income affordability restrictions under [section 4109 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109&num=0&edition=prelim) shall be the gross potential income for the project, determined by the Secretary, that would be required to support the following costs: (A) The annual authorized return determined under subsection (a). (B) Debt service on any reh

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4104

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4112 — Criteria for approval of plan of action involving incentives

**(a) In general** The Secretary may approve a plan of action for extension of the low-income affordability restrictions on any eligible low-income housing or transfer the housing to a qualified purchaser (other than a resident council) only upon finding that— (1) due diligence has been given to ensuring that the package of incentives is, for the Federal Government, the least costly alternative that is consistent with the full achievement of the purposes of this title; 11 See References in Text note below. (2) binding commitments have been made to ensure that— (A) the housing will be retained as housing affordable for very low-income families or persons, low-income families or persons, and moderate-income families or persons for the remaining useful life of such housing (as determined under subsection (c)); (B) throughout such period, adequate expenditures will be made for maintenance and operation of the housing and that the project meets housing standards established by the Secretary under subsection (d), as determined by inspections conducted under such subsection by the Secretary; (C) current tenants will not be involuntarily displaced (except for good cause); (D) any increase in rent contributions for current tenants will be to a level that does not exceed 30 percent of the adjusted income of the tenant or the published existing fair market rent for comparable housing established under [section 1437f(c) of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f/c&num=0&edition=prelim), whichever is lower, except that the rent contributions of any tenants occupying the housing at the time of any increase may not be reduced by reason of this subparagraph (except with respect to tenants receiving section 8 [[42 U.S.C.

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4112

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 4105 — Federal cost limits and limitations on

Page 1597 TITLE 12—BANKS AND BANKING § 4105 Editorial Notes AMENDMENTS 1992—Subsec. (c). Pub. L. 102–550 inserted ‘‘simulta- neous termination of any Federal rental assistance,’’ before ‘‘and costs’’ in first sentence. § 4104. Annual authorized return and preserva- tion rents (a) Annual authorized return Pursuant to an appraisal under section 4103 of this title, the Secretary shall determine the an- nual authorized return on the appraised housing, which shall be equal to 8 percent of the preser- vation equity (as such term is defined in section 4119(8) of this title). (b) Preservation rents The Secretary shall also determine the aggre- gate preservation rents under this subsection for each project appraised under section 4103 of this title. The aggregate preservation rents shall be used solely for the purposes of comparison with Federal cost limits under section 4105 of this title. Actual rents received by an owner (or a qualified purchaser) shall be determined pursu- ant to section 4109, 4110, or 4111 of this title. The aggregate preservation rents shall be estab- lished as follows: (1) Extension of affordability limits The aggregate preservation rent for purposes of receiving incentives pursuant to extension of the low-income affordability restrictions under section 4109 of this title shall be the gross potential income for the project, deter- mined by the Secretary, that would be re- quired to support the following costs: (A) The annual authorized return deter- mined under subsection (a). (B) Debt service on any rehabilitation loan for the housing. (C) Debt service on the federally-assisted mortgage for the housing. (D) Project operating expenses. (E) Adequate reserves. (2) Sale The aggregate preservation rent for purposes of receivi

Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 4105

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