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12 U.S.C. § 4107 — Plan of action
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
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Source file: Laws/federal/codes/united-states-code/title-12/section-4107-plan-of-action--f1d5b4c9fe.md
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Source location: Title 12, Chapter 42, § 4107; chapter-042-low-income-housing-preservation-and-resident-homeownership.md
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**(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 appropriate State or local government for the jurisdiction within which the housing is located all documentation supporting the plan of action, but not including any information that the Secretary determines is proprietary information. An appropriate agency of such State or local government shall review the plan and advise the tenants of the housing of any programs that are available to assist the tenants in carrying out the purposes of this title.11 See References in Text note below.
(3) **Failure to submit** — If the owner does not submit a plan of action to the Secretary within the 6-month period referred to in paragraph (1) (or the applicable longer period), the notice of intent shall be ineffective for purposes of this subchapter and the owner may not submit another 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) until 6 months after the expiration of such period.
**(b) Contents**
(1) **Termination of affordability restrictions** — If the plan of action proposes 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), the plan shall include—
(A) a description of any proposed changes in the status or terms of the mortgage or regulatory agreement;
(B) a description of any proposed changes in the low-income affordability restrictions;
(C) a description of any change in ownership that is related to prepayment or voluntary termination;
(D) an assessment of the effect of the proposed changes on existing tenants;
(E) an analysis of the effect of the proposed changes on the supply of housing affordable to low- and very low-income families or persons in the community within which the housing is located and in the area that the housing could reasonably be expected to serve; and
(F) any other information that the Secretary determines is necessary to achieve the purposes of this title.1
(2) **Extension of affordability restrictions** — If the plan of action proposes to 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), the plan shall include—
(A) a description of any proposed changes in the status or terms of the mortgage or regulatory agreement;
(B) a description of the Federal incentives requested (including cash flow projections), and analyses of how the owner will address any physical or financial deficiencies and maintain the low-income affordability restrictions of the housing;
(C) a description of any assistance from State or local government agencies, including low-income housing tax credits, that have been offered to the owner or purchaser or for which the owner or purchaser has applied or intends to apply;
(D) a description of any transfer of the property, including the identity of the transferee and a copy of any documents of sale; and
(E) any other information that the Secretary 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 subchapter. The owner shall submit any revision to the Secretary and to the tenants of the housing and make available to the Secretary and tenants all documentation supporting any revision, but not including any information that the Secretary determines is proprietary information.
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Federal law — U.S. Code and appendices · legal_authorities
**(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
**(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) 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
**(a) Prepayment and termination** An owner of eligible low-income housing may prepay, and a mortgagee may accept prepayment of, a mortgage on such housing only in accordance with a plan of action approved by the Secretary under this subchapter or in accordance with [section 4114 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4114&num=0&edition=prelim). An insurance contract with respect to eligible low-income housing may be terminated pursuant to [section 1715t of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715t&num=0&edition=prelim) only in accordance with a plan of action approved by the Secretary under this subchapter or in accordance with [section 4114 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4114&num=0&edition=prelim).
**(b) Foreclosure** A mortgagee may foreclose the mortgage on, or acquire by deed in lieu of foreclosure, any eligible low-income housing project only if the mortgagee also conveys title to the project to the Secretary in connection with a claim for insurance benefits.
**(c) Effect of unauthorized prepayment** Any prepayment of a mortgage on eligible low-income housing or termination of the mortgage insurance on such housing not in compliance with the provisions of this subchapter shall be null and void and any low-income affordability restrictions on the housing shall continue to apply to the housing.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4101
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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
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4108
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Federal law — U.S. Code and appendices · legal_authorities
**(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
**(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) 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
Page 1599
TITLE 12—BANKS AND BANKING
§ 4107
1 See References in Text note below.
4110 of this title shall submit to the Secretary,
in such form and manner as the Secretary pre-
scribes, notice of intent to sell the housing
under section 4110 of this title. To be eligible
to prepay the mortgage or voluntarily termi-
nate the insurance contract on the mortgage,
an owner of housing for which the preserva-
tion rents exceed the Federal cost limits under
section 4105(b) of this title shall submit to the
Secretary notice of such intent. The provi-
sions of sections 4111 and 4113 of this title shall
apply to any owner submitting a notice under
the preceding sentence.
(2) Timing
A second notice of intent under this sub-
section shall be submitted not later than 30
days after receipt of information from the Sec-
retary under this section. If an owner fails to
submit such notice within such period, the no-
tice of intent submitted by the owner under
section 4102 of this title shall be void and inef-
fective for purposes of this subchapter.
(3) Filing with the State or local government,
tenants, and mortgagee
Upon filing a second notice of intent under
this subsection, the owner shall simulta-
neously file such notice of the intent with the
chief executive officer of the appropriate State
or local government for the jurisdiction with-
in which the housing is located and with the
mortgagee, and shall inform the tenants of the
housing of the filing.
(Pub. L. 100–242, title II, § 216, as added Pub. L.
101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat.
4253; amended Pub. L. 102–550, title III, §§ 303,
317(a)(2), Oct. 28, 1992, 106 Stat. 3763, 3772.)
Editorial Notes
AMENDMENTS
1992—Subsec. (b)(4). Pub. L. 102–550, § 317(a)(2), sub-
stituted ‘‘exceed’’ for
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 4107
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.