12 U.S.C. § 4102 — Notice of intent

Page 1595 TITLE 12—BANKS AND BANKING § 4102 ‘‘(a) ELIHPA OF 1987.—The Secretary may not require, as a condition of eligibility for or receipt of technical assistance made available under the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1992 (Public Law 102–139 [105 Stat. 736, see Tables for classi- fication]) (including any phase of a grant), that an ap- plicant participate in a training program sponsored or conducted by the Department of Housing and Urban Development for acquisition of eligible low income housing under the provisions of the Emergency Low In- come Housing Preservation Act of 1987 [see Codifica- tion note above], and may not provide any preference or priority for such assistance for any applicant based on participation in such a program. ‘‘(b) LIHPRHA OF 1990.—The Secretary may require, as a condition of eligibility for or receipt of technical as- sistance made available under the Departments of Vet- erans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1992 (Public Law 102–139) (including any phase of a grant), that an applicant participate in a training program sponsored or conducted by the Department of Housing and Urban Development for acquisition of eligible low-income housing under this title [enacting sections 4141 to 4147 of this title, amending sections 1715z–1, 1715z–6, 4103, 4105 to 4112, 4116, 4119, 4121, 4122, 4124, and 4125 of this title, enacting provisions set out as notes under this section and sections 1715z–6, 4109, and 4117 of this title, and amending provisions set out as a note under this section], and may provide preference or priority for such assistance for applicants based on participation in such a program, but only if the program is made avail- able on a nationwide basis not later than March 1, 1993.’’ TRANSITION PROVISIONS Pub. L. 101–625, title VI, § 604, Nov. 28, 1990, 104 Stat. 4277, as amended by Pub. L. 102–550, title III, § 313, Oct. 28, 1992, 106 Stat. 3769, provided that: ‘‘(a) HOUSING ELIGIBLE FOR ELECTION.—Any owner of housing that becomes eligible low-income housing be- fore January 1, 1991 and who, before such date, filed a notice of intent under section 222 of the Emergency Low Income Housing Preservation Act of 1987 [formerly set out in a note under section 1715l of this title] (as such section existed before the date of the enactment of this Act [Nov. 28, 1990]) or under section 212 of such Act [12 U.S.C. 4102] (as amended by section 601(a)) may elect to be subject to (1) the provisions of such Act as in ef- fect before the date of the enactment of this Act, or (2) the provisions of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 [see Short Title note above], after the date of the enactment of this Act. The Secretary shall establish procedures for owners to make the election under the preceding sen- tence. An owner that elects to be subject to the provi- sions of the Emergency Low Income Housing Preserva- tion Act of 1987 shall comply with section 212(b), sec- tion 217(a)(2), and section 217(c) of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 [12 U.S.C. 4102(b) and 4107(a)(2), (c)]. ‘‘(b) RIGHT OF CONVERSION TO NEW SYSTEM.—Any owner who has filed a plan of action on or before Octo- ber 11, 1990, shall have the right to convert to the sys- tem of incentives and restrictions under this subtitle [subtitle A of title VI of Pub. L. 101–625, see Effective Date note above], with such adjustments as the Sec- retary determines to be appropriate to compensate for the value of any incentives the owner received under the Emergency Low Income Housing Preservation Act of 1987 [see Codification note preceding this section]. Owners filing plans after such date shall not have any right under this subsection. ‘‘(c) EFFECTIVENESS OF REPEALED PROVISIONS.—Not- withstanding the amendment made by section 601(a) [enacting this chapter], the provisions of the Emer- gency Low Income Housing Preservation Act of 1987 (as in effect immediately before the date of the enactment of this Act [Nov. 28, 1990]) shall apply with respect to any housing for which the election under subsection (a)(1) is made. With respect to housing for which such an election is made— ‘‘(1) in making incentives under section 224 of such Act [formerly set out in a note under section 1715l of this title] available to such housing, the Secretary— ‘‘(A) shall, for approvable plans of action, provide assistance sufficient to enable a nonprofit organiza- tion that has purchased or will purchase an eligible low income housing project to meet project over- sight costs; and ‘‘(B) may not refuse to offer incentives referred to in such section to any owner who filed a notice of intent under section 222 of such Act before October 15, 1991, based solely on the date of filing of the plan of action for the housing; and ‘‘(2) the provisions of section 233(1)(A)(i) of such Act [formerly set out in a note under section 1715l of this title] shall not apply, and the term ‘eligible low in- come housing’ shall, for purposes of such Act, shall [sic] include housing financed by a loan or mortgage that is insured or held by the Secretary or a State or State agency under section 221(d)(3) of the National Housing Act [12 U.S.C. 1715l(d)(3)] and receiving loan management assistance under section 8 of the United States Housing Act of 1937 [42 U.S.C. 1437f] due to a conversion from section 101 of the Housing and Urban Development Act of 1965 [12 U.S.C. 1701s]. ‘‘(d) REGULATIONS.—Not later than the expiration of the 90-day period beginning on the date of the enact- ment of this Act [Nov. 28, 1990], the Secretary of Hous- ing and Urban Development shall, subject to the provi- sions of section 553 of title 5, United States Code, pub- lish proposed rules to implement this subtitle and the amendments made by this subtitle. Not later than 45 days after the expiration of the period under the pre- ceding sentence the Secretary shall issue interim or final rules to implement such provisions.’’ § 4102. Notice of intent (a) Filing with Secretary An owner of eligible low-income housing that intends to terminate the low-income afford- ability restrictions through prepayment or vol- untary termination in accordance with section 4108 of this title, extend the low-income afford- ability restrictions of the housing in accordance with section 4109 of this title, or transfer the housing to a qualified purchaser in accordance with section 4110 of this title, shall file with the Secretary a notice indicating such intent in the form and manner as the Secretary shall pre- scribe. (b) Filing with State or local government, ten- ants, 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 cov- ering 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, Page 1596 TITLE 12—BANKS AND BANKING § 4103 for any losses sustained by the Fund as a re- sult of any work-out or other arrangement agreed to by the Secretary and the owner with respect to the defaulted mortgage. The Secretary shall carry out this subsection in a manner consistent with the provisions of sec- tion 1701z–11 of this title. (Pub. L. 100–242, title II, § 212, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4249.) § 4103. Appraisal and preservation value of eligi- ble low-income housing (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 or transfer the housing under section 4110 of this title, the Secretary shall provide for determina- tion 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, 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 para- graph (2). If the 2 appraisers fail to agree on the preservation value, and the Secretary and the owner also fail to agree on the preserva- tion 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 sec- tion 4109 of this title or transfer the property under section 4110 of this title, the Secretary shall provide written notice to the owner fil- ing the notice of intent of— (A) the need for the owner to acquire an appraisal of the property under paragraph (1); (B) the rules and guidelines for such ap- praisals; (C) the filing deadline for submission of the appraisal under paragraph (1); (D) the need for an appraiser retained by the Secretary to inspect the housing and project financial records; and (E) any delegation to the appropriate State agency by the Secretary of respon- sibilities regarding the appraisal. (3) Timeliness The Secretary may approve a plan of action to receive incentives under section 4109 or 4110 of this title only based upon an appraisal con- ducted in accordance with this subsection that is not more than 30 months old. (b) Preservation value For purposes of this subchapter, the preserva- tion value of eligible low-income housing ap- praised under this section shall be— (1) for purposes of extending the low-income affordability restrictions and receiving incen- tives under section 4109 of this title, the fair market value of the property based on the highest and best use of the property as resi- dential rental housing; and (2) for purposes of transferring the property under section 4110 or 4111 of this title, the fair market value of the housing based on the highest and best use of the property. (c) Guidelines The Secretary shall provide written guidelines for appraisals of preservation value, which shall assume repayment of the existing federally as- sisted mortgage, termination of the existing low-income affordability restrictions, simulta- neous termination of any Federal rental assist- ance, and costs of compliance with any State or local laws of general applicability. The guide- lines may permit reliance upon assessments of rehabilitation needs and other conversion costs determined by an appropriate State agency, as determined by the Secretary. The guidelines shall instruct the appraiser to use the greater of actual project operating expenses at the time of the appraisal (based on the average of the actual project operating expenses during the preceding 3 years) or projected operating expenses after conversion in determining preservation value. The guidelines established by the Secretary shall not be inconsistent with customary ap- praisal standards. The guidelines shall also meet the following requirements: (1) Residential rental value In the case of preservation value determined under subsection (b)(1), the guidelines shall as- sume conversion of the housing to market- rate rental housing and shall establish meth- ods for (A) determining rehabilitation expendi- tures that would be necessary to bring the housing up to quality standards required to at- tract and sustain a market rate tenancy upon conversion, and (B) assessing other costs that the owner could reasonably be expected to incur if the owner converted the property to market-rate multifamily rental housing. (2) Highest and best use value In the case of preservation value determined under subsection (b)(2), the guidelines shall as- sume conversion of the housing to highest and best use for the property and shall establish methods for (A) determining any rehabilita- tion expenditures that would be necessary to convert the housing to such use, and (B) as- sessing other costs that the owner could rea- sonably be expected to incur if the owner con- verted the property to its highest and best use. (Pub. L. 100–242, title II, § 213, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4250; amended Pub. L. 102–550, title III, § 302, Oct. 28, 1992, 106 Stat. 3763.)