12 U.S.C. § 4114 — Permissible prepayment or voluntary termination and modification of commitments

submitted 36 years ago by Pub. L. 100-242 to r/title-12-BANKS-AND-BANKING · 613 words · no verdicts yet

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An owner may end low-income affordability restrictions in specified situations involving delayed assistance, unsuccessful qualified-purchaser efforts, or rental-assistance renewal problems. The Secretary may also modify commitments or permit prepayment after required notice.

(a) Despite this subchapter’s limits, an owner may end low-income affordability restrictions by prepayment or voluntary termination, while following section 4113, if (1)(A) the Secretary approved a section 4109(a) plan but did not provide its assistance within 15 months; (B) after the mortgage’s ordinary prepayment eligibility date, the Secretary approved a section 4110 or 4111 plan but did not provide its assistance by the earlier of two months after the first fiscal year began after approval or six months after approval; or (C) for other eligible housing, did not provide approved assistance by the earlier of two months after that fiscal year began or nine months after approval. (2) The owner intended to transfer the housing to a qualified purchaser and fully complied with section 4110 or 4111, but received no genuine qualified-purchaser offer within the applicable period. If the planned purchaser cannot complete the purchase for a reason other than the Secretary’s failure to provide incentives, the owner may end the restrictions by prepayment or voluntary termination subject to sections 4110 and 4111. (b) When providing section 1437f rental assistance, the Secretary may make a contract, dependent on future appropriations for renewals, to extend assistance as needed for an approved plan. If the Secretary cannot extend it or cannot create a revised incentive package giving the owner comparable benefits, then, at the owner’s request and subject to the later paragraphs, the Secretary must (1) modify section 4112(a)(2) commitments dependent on that assistance; or (2) allow prepayment and termination of the plan and implementing use agreements or restrictions if the owner agrees in writing to section 4113. The owner must notify the Secretary at least 30 days before requesting this. The Secretary has 90 days after receiving notice to extend assistance and continue the commitments.

the actual law source: uscode.house.gov ↗public domain

(a) In general

Notwithstanding any limitations on prepayment or voluntary termination under this subchapter, an owner may terminate the low-income affordability restrictions through prepayment or voluntary termination, subject to compliance with the provisions of section 4113 of this title, under one of the following circumstances:

(1)

(A)

The Secretary approves a plan of action 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 approved in such plan before the earlier of (i) the expiration of the 2-month period beginning on the commencement of the 1st fiscal year beginning after such approval, or (ii) the expiration 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 assistance approved in such plan before the earlier of (i) the expiration of the 2-month period beginning on the commencement of the 1st fiscal 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 receive 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 Secretary to provide incentives, an owner may terminate 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 section 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 rental 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 contract and the approved plan of action shall provide that, if the Secretary is unable to extend the term of such rental assistance or is unable to develop a revised package of incentives providing 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 paragraphs):

(1) Modification of commitments

Modify the binding commitments made pursuant to section 4112(a)(2) of this title that are dependent on such rental assistance.

(2) Termination of plan of action

Permit the owner to prepay the mortgage and terminate the plan of action and any implementing use agreements or restrictions, but only if the owner agrees in writing to comply with provisions of section 4113 of this title.

At least 30 days before making a request under this subsection, an owner shall notify the Secretary of the owner’s intention to submit the request. The Secretary shall have a period of 90 days following receipt of such notice to take action to extend the rental assistance contract and to continue the binding commitments under section 4112(a)(2) of this title.

Source credit: (Pub. L. 100–242, title II, § 224, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4265.)

history & why it existsrecord from the source credit

1990Enacted · Pub. L. 100-242 · 104 Stat. 4265

A history note hasn’t been published yet. The record shows enactment by Pub. L. 100-242 on 1990-11-28.

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