Strategy and Investment in Rural Housing Preservation Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 1728 To provide rental assistance to low-income tenants in certain multifamily rural housing projects financed by the Rural Housing Service of the Department of Agriculture, and to develop and implement a plan for preserving the affordability of rural rental housing, and for other pur- poses. IN THE HOUSE OF REPRESENTATIVES MARCH 10, 2021 Mrs. AXNE introduced the following bill; which was referred to the Committee on Financial Services A BILL To provide rental assistance to low-income tenants in certain multifamily rural housing projects financed by the Rural Housing Service of the Department of Agriculture, and to develop and implement a plan for preserving the af- fordability of rural rental housing, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Strategy and Invest- 4 ment in Rural Housing Preservation Act of 2021’’. 5 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 1728 IH SEC. 2. PERMANENT ESTABLISHMENT OF HOUSING PRES- 1 ERVATION AND REVITALIZATION PROGRAM. 2 Title V of the Housing Act of 1949 (42 U.S.C. 1471 3 et seq.) is amended by adding at the end the following 4 new section: 5 ‘‘SEC. 545. HOUSING PRESERVATION AND REVITALIZATION 6 PROGRAM. 7 ‘‘(a) ESTABLISHMENT.—The Secretary shall carry 8 out a program under this section for the preservation and 9 revitalization of multifamily rental housing projects fi- 10 nanced under section 515 or both sections 514 and 516. 11 ‘‘(b) NOTICE OF MATURING LOANS.— 12 ‘‘(1) TO OWNERS.—On an annual basis, the 13 Secretary shall provide written notice to each owner 14 of a property financed under section 515 or both 15 sections 514 and 516 that will mature within the 4- 16 year period beginning upon the provision of such no- 17 tice, setting forth the options and financial incen- 18 tives that are available to facilitate the extension of 19 the loan term or the option to decouple a rental as- 20 sistance contract pursuant to subsection (f). 21 ‘‘(2) TO TENANTS.— 22 ‘‘(A) IN GENERAL.—For each property fi- 23 nanced under section 515 or both sections 514 24 and 516, not later than the date that is 2 years 25 before the date that such loan will mature, the 26 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 1728 IH Secretary shall provide written notice to each 1 household residing in such property that in- 2 forms them of the date of the loan maturity, 3 the possible actions that may happen with re- 4 spect to the property upon such maturity, and 5 how to protect their right to reside in federally 6 assisted housing after such maturity. 7 ‘‘(B) LANGUAGE.—Notice under this para- 8 graph shall be provided in plain English and 9 shall be translated to other languages in the 10 case of any property located in an area in which 11 a significant number of residents speak such 12 other languages. 13 ‘‘(c) LOAN RESTRUCTURING.—Under the program 14 under this section, the Secretary may restructure such ex- 15 isting housing loans, as the Secretary considers appro- 16 priate, for the purpose of ensuring that such projects have 17 sufficient resources to preserve the projects to provide safe 18 and affordable housing for low-income residents and farm 19 laborers, by— 20 ‘‘(1) reducing or eliminating interest; 21 ‘‘(2) deferring loan payments; 22 ‘‘(3) subordinating, reducing, or reamortizing 23 loan debt; and 24 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 1728 IH ‘‘(4) providing other financial assistance, in- 1 cluding advances, payments, and incentives (includ- 2 ing the ability of owners to obtain reasonable re- 3 turns on investment) required by the Secretary. 4 ‘‘(d) RENEWAL OF RENTAL ASSISTANCE.—When the 5 Secretary offers to restructure a loan pursuant to sub- 6 section (c), the Secretary shall offer to renew the rental 7 assistance contract under section 521(a)(2) for a 20-year 8 term that is subject to annual appropriations, provided 9 that the owner agrees to bring the property up to such 10 standards that will ensure its maintenance as decent, safe, 11 and sanitary housing for the full term of the rental assist- 12 ance contract. 13 ‘‘(e) RESTRICTIVE USE AGREEMENTS.— 14 ‘‘(1) REQUIREMENT.—As part of the preserva- 15 tion and revitalization agreement for a project, the 16 Secretary shall obtain a restrictive use agreement 17 that obligates the owner to operate the project in ac- 18 cordance with this title. 19 ‘‘(2) TERM.— 20 ‘‘(A) NO EXTENSION OF RENTAL ASSIST- 21 ANCE CONTRACT.—Except when the Secretary 22 enters into a 20-year extension of the rental as- 23 sistance contract for the project, the term of 24 the restrictive use agreement for the project 25 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 1728 IH shall be consistent with the term of the restruc- 1 tured loan for the project. 2 ‘‘(B) EXTENSION OF RENTAL ASSISTANCE 3 CONTRACT.—If the Secretary enters into a 20- 4 year extension of the rental assistance contract 5 for a project, the term of the restrictive use 6 agreement for the project shall be for 20 years. 7 ‘‘(C) TERMINATION.—The Secretary may 8 terminate the 20-year use restrictive use agree- 9 ment for a project prior to the end of its term 10 if the 20-year rental assistance contract for the 11 project with the owner is terminated at any 12 time for reasons outside the owner’s control. 13 ‘‘(f) DECOUPLING OF RENTAL ASSISTANCE.— 14 ‘‘(1) RENEWAL OF RENTAL ASSISTANCE CON- 15 TRACT.—If the Secretary determines that a matur- 16 ing loan for a project cannot reasonably be restruc- 17 tured in accordance with subsection (c) and the 18 project was operating with rental assistance under 19 section 521, the Secretary may renew the rental as- 20 sistance contract, notwithstanding any provision of 21 section 521, for a term, subject to annual appropria- 22 tions, of at least 10 years but not more than 20 23 years. 24 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 1728 IH ‘‘(2) RENTS.—Any agreement to extend the 1 term of the rental assistance contract under section 2 521 for a project shall obligate the owner to con- 3 tinue to maintain the project as decent, safe and 4 sanitary housing and to operate the development in 5 accordance with this title, except that rents shall be 6 based on the lesser of— 7 ‘‘(A) the budget-based needs of the project; 8 or 9 ‘‘(B) (ii) the operating cost adjustment 10 factor as a payment standard as provided under 11 section 524 of the Multifamily Assisted Hous- 12 ing Reform and Affordability Act of 1997 (42 13 U.S.C. 1437 note). 14 ‘‘(g) MULTIFAMILY HOUSING TRANSFER TECHNICAL 15 ASSISTANCE.—Under the program under this section, the 16 Secretary may provide grants to qualified non-profit orga- 17 nizations and public housing agencies to provide technical 18 assistance, including financial and legal services, to bor- 19 rowers under loans under this title for multifamily housing 20 to facilitate the acquisition of such multifamily housing 21 properties in areas where the Secretary determines there 22 is a risk of loss of affordable housing. 23 ‘‘(h) TRANSFER OF RENTAL ASSISTANCE.—After the 24 loan or loans for a rental project originally financed under 25 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 1728 IH section 515 or both sections 514 and 516 have matured 1 or have been prepaid and the owner has chosen not to 2 restructure the loan pursuant to subsection (c), a tenant 3 residing in such project shall have 18 months prior to loan 4 maturation or prepayment to transfer the rental assist- 5 ance assigned to the tenant’s unit to another rental project 6 originally financed under section 515 or both sections 514 7 and 516, and the owner of the initial project may rent 8 the tenant’s previous unit to a new tenant without income 9 restrictions. 10 ‘‘(i) ADMINISTRATIVE EXPENSES.—Of any amounts 11 made available for the program under this section for any 12 fiscal year, the Secretary may use not more than 13 $1,000,000 for administrative expenses for carrying out 14 such program. 15 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 16 is authorized to be appropriated for the program under 17 this section $200,000,000 for each of fiscal years 2022 18 through 2026.’’. 19 SEC. 3. ELIGIBILITY FOR RURAL HOUSING VOUCHERS. 20 Section 542 of the Housing Act of 1949 (42 U.S.C. 21 1490r) is amended by adding at the end the following new 22 subsection: 23 ‘‘(c) ELIGIBILITY OF HOUSEHOLDS IN SECTION 514, 24 515, AND 516 PROJECTS.—The Secretary may provide 25 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 1728 IH rural housing vouchers under this section for any low-in- 1 come household (including those not receiving rental as- 2 sistance) residing in a property financed with a loan made 3 or insured under section 514 or 515 (42 U.S.C. 1484, 4 1485) which has been prepaid, has been foreclosed, or has 5 matured after September 30, 2005, or residing in a prop- 6 erty assisted under section 514 or 516 that is owned by 7 a nonprofit organization or public agency.’’. 8 SEC. 4. AMOUNT OF VOUCHER ASSISTANCE. 9 Notwithstanding any other provision of law, in the 10 case of any rural housing voucher provided pursuant to 11 section 542 of the Housing Act of 1949 (42 U.S.C. 12 1490r), the amount of the monthly assistance payment for 13 the household on whose behalf such assistance is provided 14 shall be determined as provided in subsection (a) of such 15 section 542. 16 SEC. 5. USE OF AVAILABLE RENTAL ASSISTANCE. 17 Subsection (d) of section 521 of the Housing Act of 18 1949 (42 U.S.C. 1490a(d)) is amended by adding at the 19 end the following new paragraph: 20 ‘‘(3) In the case of any rental assistance contract au- 21 thority that becomes available because of the termination 22 of assistance on behalf of an assisted family— 23 ‘‘(A) at the option of the owner of the rental 24 project, the Secretary shall provide the owner a pe- 25 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 1728 IH riod of 6 months before such assistance is made 1 available pursuant to subparagraph (B) during 2 which the owner may use such assistance authority 3 to provide assistance of behalf of an eligible unas- 4 sisted family that— 5 ‘‘(i) is residing in the same rental project 6 that the assisted family resided in prior to such 7 termination; or 8 ‘‘(ii) newly occupies a dwelling unit in such 9 rental project during such period; and 10 ‘‘(B) except for assistance used as provided in 11 subparagraph (A), the Secretary shall use such re- 12 maining authority to provide such assistance on be- 13 half of eligible families residing in other rental 14 projects originally financed under section 515 or 15 both sections 514 and 516 of this Act.’’. 16 SEC. 6. FUNDING FOR MULTIFAMILY TECHNICAL IMPROVE- 17 MENTS. 18 There is authorized to be appropriated to the Sec- 19 retary of Agriculture $50,000,000 for fiscal year 2022 for 20 improving the technology of the Department of Agri- 21 culture used to process loans for multifamily housing and 22 otherwise managing such housing. Such improvements 23 shall be made within the 5-year period beginning upon the 24 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 1728 IH appropriation of such amounts and such amount shall re- 1 main available until the expiration of such 5-year period. 2 SEC. 7. PLAN FOR PRESERVING AFFORDABILITY OF RENT- 3 AL PROJECTS. 4 (a) PLAN.—The Secretary of Agriculture (in this sec- 5 tion referred to as the ‘‘Secretary’’) shall submit a written 6 plan to the Congress, not later than the expiration of the 7 6-month period beginning on the date of the enactment 8 of this Act, for preserving the affordability for low-income 9 families of rental projects for which loans were made 10 under section 515 or made to nonprofit or public agencies 11 under section 514 and avoiding the displacement of tenant 12 households, which shall— 13 (1) set forth specific performance goals and 14 measures; 15 (2) set forth the specific actions and mecha- 16 nisms by which such goals will be achieved; 17 (3) set forth specific measurements by which 18 progress towards achievement of each goal can be 19 measured; 20 (4) provide for detailed reporting on outcomes; 21 and 22 (5) include any legislative recommendations to 23 assist in achievement of the goals under the plan. 24 (b) ADVISORY COMMITTEE.— 25 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 1728 IH (1) ESTABLISHMENT; PURPOSE.—The Sec- 1 retary shall establish an advisory committee whose 2 purpose shall be to assist the Secretary in preserving 3 section 515 properties and section 514 properties 4 owned by nonprofit or public agencies through the 5 multifamily housing preservation and revitalization 6 program under section 545 and in implementing the 7 plan required under subsection (a). 8 (2) MEMBER.—The advisory committee shall 9 consist of 14 members, appointed by the Secretary, 10 as follows: 11 (A) A State Director of Rural Develop- 12 ment for the Department of Agriculture. 13 (B) The Administrator for Rural Housing 14 Service of the Department of Agriculture. 15 (C) Two representatives of for-profit devel- 16 opers or owners of multifamily rural rental 17 housing. 18 (D) Two representatives of non-profit de- 19 velopers or owners of multifamily rural rental 20 housing. 21 (E) Two representatives of State housing 22 finance agencies. 23 (F) Two representatives of tenants of mul- 24 tifamily rural rental housing. 25 VerDate Sep 11 2014 19:29 May 03, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1728.IH H1728 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 1728 IH (G) One representative of a community d [Text truncated for display. 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