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12 U.S.C. § 4108 — Prepayment and voluntary termination
Federal law — U.S. Code and appendices · legal_authorities
**(a) Approval** The Secretary may approve a plan of action that provides for termination of the low-income affordability restrictions through prepayment of the mortgage or voluntary termination of the mortgage insurance contract only upon a written finding that—
(1) implementation of the plan of action will not—
(A) materially increase economic hardship for current tenants, and will not in any event result in (i) a monthly rental payment by any current tenant that exceeds 30 percent of the monthly adjusted income of the tenant or an increase in the monthly rental payment in any year that exceeds 10 percent (whichever is lower), or (ii) in the case of a current tenant who already pays more than such percentage, an increase in the monthly rental payment in any year that exceeds the increase in the Consumer Price Index or 10 percent (whichever is lower); or
(B) involuntarily displace current tenants (except for good cause) where comparable and affordable housing is not readily available determined without regard to the availability of Federal housing assistance that would address any such hardship or involuntary displacement; and
(2) the supply of vacant, comparable housing is sufficient to ensure that such prepayment will not materially affect—
(A) the availability of decent, safe, and sanitary housing affordable to low-income and very low-income families or persons in the area that the housing could reasonably be expected to serve;
(B) the ability of low-income and very low-income families or persons to find affordable, decent, safe, and sanitary housing near employment opportunities; or
(C) the housing opportunities of minorities in the community within which the housing is located.
**(b) Standards and procedure for written findings**
(1) **Standards
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Source file: Laws/federal/codes/united-states-code/title-12/section-4108-prepayment-and-voluntary-termination--980423775e.md
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Source location: Title 12, Chapter 42, § 4108; chapter-042-low-income-housing-preservation-and-resident-homeownership.md
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**(a) Approval** The Secretary may approve a plan of action that provides for termination of the low-income affordability restrictions through prepayment of the mortgage or voluntary termination of the mortgage insurance contract only upon a written finding that—
(1) implementation of the plan of action will not—
(A) materially increase economic hardship for current tenants, and will not in any event result in (i) a monthly rental payment by any current tenant that exceeds 30 percent of the monthly adjusted income of the tenant or an increase in the monthly rental payment in any year that exceeds 10 percent (whichever is lower), or (ii) in the case of a current tenant who already pays more than such percentage, an increase in the monthly rental payment in any year that exceeds the increase in the Consumer Price Index or 10 percent (whichever is lower); or
(B) involuntarily displace current tenants (except for good cause) where comparable and affordable housing is not readily available determined without regard to the availability of Federal housing assistance that would address any such hardship or involuntary displacement; and
(2) the supply of vacant, comparable housing is sufficient to ensure that such prepayment will not materially affect—
(A) the availability of decent, safe, and sanitary housing affordable to low-income and very low-income families or persons in the area that the housing could reasonably be expected to serve;
(B) the ability of low-income and very low-income families or persons to find affordable, decent, safe, and sanitary housing near employment opportunities; or
(C) the housing opportunities of minorities in the community within which the housing is located.
**(b) Standards and procedure for written findings**
(1) **Standards** — A written finding under subsection (a) shall be based on an analysis of the evidence considered by the Secretary in reaching such finding and shall contain documentation of such evidence.
(2) **Procedure and criteria** — The Secretary shall, by regulation, develop (A) a procedure for determining whether the conditions under paragraphs (1) and (2) of subsection (a) exist, (B) requirements for evidence on which such determinations are based, and (C) criteria on which such determinations are based.
**(c) Disapproval** If the Secretary determines a plan of action to prepay a mortgage or terminate an insurance contract fails to meet the requirements of subsection (a), the Secretary shall disapprove the plan, the notice of intent filed under [section 4102 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4102&num=0&edition=prelim) by such owner shall not be effective for purposes of this subchapter, and the owner may, in order to receive incentives under this subchapter, file a new notice of intent under such section.
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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) 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
Page 1600
TITLE 12—BANKS AND BANKING
§ 4108
and analyses of how the owner will address
any physical or financial deficiencies and
maintain the low-income affordability re-
strictions of the housing;
(C) a description of any assistance from
State or local government agencies, includ-
ing low-income housing tax credits, that
have been offered to the owner or purchaser
or for which the owner or purchaser has ap-
plied or intends to apply;
(D) a description of any transfer of the
property, including the identity of the trans-
feree and a copy of any documents of sale;
and
(E) any other information that the Sec-
retary determines is necessary to achieve
the purposes of this title.1
(c) Revisions
An owner may from time to time revise and
amend the plan of action as may be necessary to
obtain approval of the plan under this sub-
chapter. The owner shall submit any revision to
the Secretary and to the tenants of the housing
and make available to the Secretary and ten-
ants all documentation supporting any revision,
but not including any information that the Sec-
retary determines is proprietary information.
(Pub. L. 100–242, title II, § 217, as added Pub. L.
101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat.
4254; amended Pub. L. 102–550, title III, § 304, Oct.
28, 1992, 106 Stat. 3763.)
Editorial Notes
REFERENCES IN TEXT
This title, referred to in subsecs. (a)(2) and (b)(1)(F),
(2)(E), means title II of Pub. L. 100–242, as amended by
Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat.
4249, known as the Low-Income Housing Preservation
and Resident Homeownership Act of 1990, which is clas-
sified principally to this chapter. For complete classi-
fication of this Act to the Code, see Short Title note
set out under section 4101 of this tit
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 4108
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