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12 U.S.C. § 4109 — Incentives to extend low-income use
Federal law — U.S. Code and appendices · legal_authorities
**(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
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Source file: Laws/federal/codes/united-states-code/title-12/section-4109-incentives-to-extend-low-income-use--142146153f.md
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Source location: Title 12, Chapter 42, § 4109; chapter-042-low-income-housing-preservation-and-resident-homeownership.md
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**(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 subsection (b)(1) of this section), (2) deferring remittance of excess rent payments, and (3) providing an increase in rents permitted under an existing contract under [section 1437f of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f&num=0&edition=prelim) (pursuant to subsection (b)(2) of this section).
**(b) Permissible incentives** Such agreements may include one or more of the following incentives:
(1) Increased access to residual receipts accounts.
(2) Subject to the availability of amounts provided in appropriations Acts—
(A) an increase in the rents permitted under an existing contract under [section 1437f of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f&num=0&edition=prelim), or
(B) additional assistance under [section 1437f of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f&num=0&edition=prelim) or an extension of any project-based assistance attached to the housing; and
(3) An increase in the rents on units occupied by current tenants as permitted under [section 4112 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4112&num=0&edition=prelim).
(4) Financing of capital improvements under section 201 of the Housing and Community Development Amendments of 1978.
(5) Financing of capital improvements through provision of insurance for a second mortgage under [section 1715z–6 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-6&num=0&edition=prelim).
(6) In the case of housing defined in [section 4119(1)(A)(iii) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4119/1/A/iii&num=0&edition=prelim), redirection of the Interest Reduction Payment subsidies to a second mortgage.
(7) Access by the owner to a portion of the preservation equity in the housing through provision of insurance for a second mortgage loan insured under section 1715z–6(f) 22 See References in Text note below. of this title or a non-insured mortgage loan approved by the Secretary and the mortgagee.
(8) Other incentives authorized in law.
With respect to any housing with a mortgage insured or otherwise assisted pursuant to [section 1715z–1 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-1&num=0&edition=prelim), the provisions of subsections (f) and (g) of [section 1715z–1 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-1&num=0&edition=prelim) notwithstanding, the fair market rental charge for each unit in such housing may be increased in accordance with this subsection, but the owner shall pay to the Secretary all rental charges collected in excess of the basic rental charges, in an amount not greater than the fair market rental charges as such charges would have been established under [section 1715z–1(f) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z–1/f&num=0&edition=prelim) absent the requirements of this paragraph.
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section, act Aug. 2, 1954, ch. 649, title VIII, § 815, 68 Stat. 647, required submission of specifications by applicants prior to award of any contract for construction of a project and submission of data with respect to acquisition of land prior to authorization to purchase such land.
Source: Supplied U.S. Code snapshot — release unconfirmed · 42 U.S.C. § 1437f
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Federal law — U.S. Code and appendices · legal_authorities
The Secretary of Housing and Urban Development shall take action to secure the payment of any deficiency after foreclosure on a mortgage insured or assisted under Federal law where the Secretary has reason to believe that the mortgage proceeds have been fraudulently misappropriated by the mortgagor.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 1715
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Federal law — U.S. Code and appendices · legal_authorities
**(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
**(a) Filing with Secretary** An owner of eligible low-income housing that intends to terminate the low-income affordability restrictions through prepayment or voluntary termination in accordance with [section 4108 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4108&num=0&edition=prelim), extend the low-income affordability restrictions of the housing in accordance with [section 4109 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109&num=0&edition=prelim), or transfer the housing to a qualified purchaser in accordance with [section 4110 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4110&num=0&edition=prelim), shall file with the Secretary a notice indicating such intent in the form and manner as the Secretary shall prescribe.
**(b) Filing with State or local government, tenants, and mortgagee** The owner, upon filing a notice of intent under this section, shall simultaneously file the notice of intent with the chief executive officer of the appropriate State or local government for the jurisdiction within which the housing is located and with the mortgagee, and shall inform the tenants of the housing of the filing.
**(c) Ineligibility for filing** An owner shall not be eligible to file a notice of intent under this section if the mortgage covering the housing—
(1) falls into default on or after November 28, 1990; or
(2)
(A) fell into default before, but is current as of, November 28, 1990; and
(B) the owner does not agree to recompense the appropriate Insurance Fund, in the amount the Secretary determines appropriate, for any losses sustained by the Fund as a result of any work-out or other arrangement agreed to by the Secretary
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4102
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Appraisal** Upon receiving notice of intent regarding an eligible low-income housing project indicating an intent to extend 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) or 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), the Secretary shall provide for determination of the preservation value of the housing, as follows:
(1) **Appraisers** — The preservation value shall be determined by 2 independent appraisers, one of whom shall be selected by the Secretary and one of whom shall be selected by the owner. The appraisals shall be conducted not later than 4 months after filing the notice of intent under [section 4102 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4102&num=0&edition=prelim), and the owner shall submit to the Secretary the appraisal made by the owner’s selected appraiser not later than 90 days after receipt of the notice under paragraph (2). If the 2 appraisers fail to agree on the preservation value, and the Secretary and the owner also fail to agree on the preservation value, the Secretary and the owner shall jointly select and jointly compensate a third appraiser, whose appraisal shall be binding on the parties.
(2) **Notice** — Not later than 30 days after the filing of a notice of intent to seek incentives under [section 4109 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4109&num=0&edition=prelim) or transfer the property under [section 4110 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-t
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4103
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Federal law — U.S. Code and appendices · legal_authorities
**(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
**(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 area
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4105
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Information to owners terminating affordability restrictions** The Secretary shall provide each owner who submits a notice of intent to terminate the low-income affordability restrictions on the housing under [section 4108 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4108&num=0&edition=prelim) with information under this section not later than 6 months after receipt of the notice of intent. The information shall include a description of the criteria for such termination specified under [section 4108 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4108&num=0&edition=prelim) and the documentation required to satisfy such criteria.
**(b) Information to owners extending low-income affordability restrictions** The Secretary shall provide each owner who submits notice of intent to extend the low-income affordability restrictions 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) or 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) to a qualified purchaser with information under this subsection not later than 9 months after receipt of the notice of intent. The information shall include any information necessary for the owner to prepare 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), including the following:
(1) **Preservation values** — A statement of the preservation value of the housing determined under paragraphs (1) and (2) of [section 4103(b) of this title](https:
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4106
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Federal law — U.S. Code and appendices · legal_authorities
**(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
For purposes of this subchapter:
(1) The term “eligible low-income housing” means any housing financed by a loan or mortgage—
(A) that is—
(i) insured or held by the Secretary under section 1715l(d)(3) of this title and receiving loan management assistance under [section 1437f of title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1437f&num=0&edition=prelim) due to a conversion from [section 1701s of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1701s&num=0&edition=prelim);
(ii) insured or held by the Secretary and bears interest at a rate determined under the proviso of section 1715l(d)(5) of this title;
(iii) insured, assisted, or held by the Secretary or a State or State agency under [section 1715z–1 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-1&num=0&edition=prelim); or
(iv) held by the Secretary and formerly insured under a program referred to in clause (i), (ii), or (iii); and
(B) that, under regulation or contract in effect before February 5, 1988, is or will within 24 months become eligible for prepayment without prior approval of the Secretary.
(2) The term “Federal cost limit” means, for any eligible low-income housing, the amount determined under [section 4105(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4105/a&num=0&edition=prelim).
(3) The term “low-income affordability restrictions” means limits imposed by regulation or regulatory agreement on tenant rents, rent contributions, or income eligibility in eligible low-income housing.
(4) The terms “low-income families or persons” and “very low-income families or persons” mean families or persons whose inco
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4119
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