12 U.S.C. § 4114 — Permissible prepayment or voluntary ter-

Page 1608 TITLE 12—BANKS AND BANKING § 4114 person, or discriminate against any person in the terms, conditions, or privileges of rental of a dwelling (or in the provision of services or fa- cilities in connection therewith), because the person receives assistance under section 1437f of title 42. (e) Regional pools In providing assistance under this section, the Secretary shall allocate the assistance on a re- gional basis through the regional offices of the Department of Housing and Urban Development. The Secretary shall allocate assistance under this section in a manner so that the total num- ber of assisted units in each such region avail- able for occupancy by, and affordable to, lower income families and persons does not decrease because of the prepayment or payment of a mortgage on eligible low-income housing or the termination of an insurance contract on such housing. (f) Enhanced voucher assistance for certain ten- ants (1) Authority In lieu of benefits under subsections (b), (c), and (d), and subject to the availability of ap- propriated amounts, each family described in paragraph (2) shall be offered enhanced vouch- er assistance under section 1437f(t) of title 42. (2) Eligible families A family described in this paragraph is a family that is— (A)(i) a low-income family; or (ii) a moderate-income family that is: (I) an elderly family; (II) a disabled family; or (III) residing in a low-vacancy area; and (B) residing in eligible low-income housing on the date of the prepayment of the mort- gage or voluntary termination of the insur- ance contract. (Pub. L. 100–242, title II, § 223, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4264; amended Pub. L. 105–276, title V, § 550(d), Oct. 21, 1998, 112 Stat. 2610; Pub. L. 106–74, title V, § 538(c), Oct. 20, 1999, 113 Stat. 1123.) Editorial Notes AMENDMENTS 1999—Subsec. (f). Pub. L. 106–74 added subsec. (f). 1998—Subsec. (a). Pub. L. 105–276 substituted ‘‘tenant- based assistance under section 1437f of title 42’’ for ‘‘as- sistance under the certificate and voucher programs under sections 1437f(b) and 1437f(o)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Amendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as other- wise provided, with provision that Secretary may im- plement amendment before such date, except to extent that such amendment provides otherwise, and with sav- ings provision, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of Title 42, The Public Health and Welfare. § 4114. Permissible prepayment or voluntary ter- mination and modification of commitments (a) In general Notwithstanding any limitations on prepay- ment or voluntary termination under this sub- chapter, an owner may terminate the low-in- come affordability restrictions through prepay- ment or voluntary termination, subject to com- pliance with the provisions of section 4113 of this title, under one of the following cir- cumstances: (1)(A) The Secretary approves a plan of ac- tion under section 4109(a) of this title, 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 ap- proved in such plan before the earlier of (i) the expiration of the 2-month period beginning on the commencement of the 1st fiscal year be- ginning after such approval, or (ii) the expira- tion 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 as- sistance approved in such plan before the ear- lier of (i) the expiration of the 2-month period beginning on the commencement of the 1st fis- cal 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 under section 4110 or 4111 of this title, and fully complied with the provisions of such section, did not re- ceive any bona fide offers from any qualified purchasers within the applicable time periods. In the event that the purchaser under the plan of action is unable to consummate the purchase for reasons other than the failure of the Sec- retary to provide incentives, an owner may ter- minate the low-income affordability restrictions through prepayment or voluntary termination subject to the provisions of sections 4110 and 4111 of this title. (b) Section 1437f rental assistance When providing rental assistance under sec- tion 1437f of title 42, the Secretary may enter into a contract with an owner, contingent upon the future availability of appropriations for the purpose of renewing expiring contracts for rent- al assistance as provided in appropriations Acts, to extend the term of such rental assistance for such additional period or periods necessary to carry out an approved plan of action. The con- tract and the approved plan of action shall pro- vide that, if the Secretary is unable to extend the term of such rental assistance or is unable to develop a revised package of incentives pro- viding benefits to the owner comparable to those received under the original approved plan of action, the Secretary, upon the request of the owner, shall take the following actions (subject to the limitations under the following para- graphs): (1) Modification of commitments Modify the binding commitments made pur- suant to section 4112(a)(2) of this title that are dependent on such rental assistance. Page 1609 TITLE 12—BANKS AND BANKING § 4116 (2) Termination of plan of action Permit the owner to prepay the mortgage and terminate the plan of action and any im- plementing use agreements or restrictions, but only if the owner agrees in writing to com- ply with provisions of section 4113 of this title. At least 30 days before making a request under this subsection, an owner shall notify the Sec- retary of the owner’s intention to submit the re- quest. The Secretary shall have a period of 90 days following receipt of such notice to take ac- tion to extend the rental assistance contract and to continue the binding commitments under section 4112(a)(2) of this title. (Pub. L. 100–242, title II, § 224, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4265.) § 4115. Timetable for approval of plan of action (a) Notification of deficiencies Not later than 60 days after receipt of a plan of action, the Secretary shall notify the owner in writing of any deficiencies that prevent the plan of action from being approved. If defi- ciencies are found, such notice shall describe al- ternative ways in which the plan may be revised to meet the criteria for approval. (b) Notification of approval (1) In general Not later than 180 days after receipt of a plan of action, or such longer period as the owner requests, the Secretary shall notify the owner in writing whether the plan of action, including any revisions, is approved. If ap- proval is withheld, the notice shall describe— (A) the reasons for withholding approval; and (B) the actions that could be taken to meet the criteria for approval. (2) Opportunity to revise The Secretary shall subsequently give the owner a reasonable opportunity to revise the plan of action and seek approval. (c) Delayed approval If the Secretary does not approve a plan of ac- tion within the period under subsection (b), the Secretary shall provide incentives and assist- ance under this subchapter in the amount that the owner would have received if the Secretary had complied with such time limitations. The preceding sentence shall not apply if the plan of action was not approved because of deficiencies. An owner may bring an action in the appro- priate Federal district court to enforce this sub- section. (Pub. L. 100–242, title II, § 225, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4266.) § 4116. Resident homeownership program (a) Formation of resident council Tenants seeking to purchase eligible low-in- come housing in accordance with section 4110 of this title shall organize a resident council for the purpose of developing a resident homeowner- ship program in accordance with standards es- tablished by the Secretary. The resident council shall work with a public or private nonprofit or- ganization or a public body (including an agency or instrumentality thereof). Such organization or public body shall have experience to enable it to help the tenants consider their options and to develop the capacity necessary to own and man- age the housing, where appropriate, and shall be approved by the Secretary. (b) Other program requirements and limitations (1) Sales to residents As a condition of approval of a plan of action involving homeownership program under this subchapter, the resident council shall prepare a workable plan acceptable to the Secretary for giving all residents an opportunity to be- come owners, which plan shall identify— (A) the price at which the resident council intends to transfer ownership interests in, or shares representing, units in the housing; (B) the factors that will influence the es- tablishment of such price; (C) how such price compares to the esti- mated appraised value of the ownership in- terests or shares; (D) the underwriting standard the resident council plans to use (or reasonably expects a public or private lender to use) for potential tenant purchasers; (E) the financing arrangements the ten- ants are expected to pursue or be provided; and (F) a workable schedule of sale (subject to the limitations of paragraph (8)) based on es- timated tenant incomes. (2) Approval of method of conversion and limi- tation on conditions of approval The Secretary shall approve the method for converting the housing to homeownership, which may involve acquisition of ownership interests in, or shares representing, the units in a project under any arrangement deter- mined by the Secretary to be appropriate, such as cooperative ownership (including lim- ited equity cooperative ownership) and fee simple ownership (including condominium ownership). The Secretary may not require the prepayment of the mortgage on eligible low-income housing for the approval of a plan of action involving a homeownership program for the housing. (3) Required conditions The Secretary shall require that the form of homeownership impose appropriate condi- tions, including conditions to assure that— (A) the number of initial owners that are very low-income, lower income, or mod- erate-income persons at initial occupancy meet standards required or approved by the Secretary; (B) occupancy charges payable by the own- ers meet requirements established by the Secretary; (C) the aggregate incomes of initial and subsequent owners and other sources of funds for the project are sufficient to permit occupancy charges to cover the full oper- ating costs of the housing and any debt serv- ice;