Strategy and Investment in Rural Housing Preservation Act of 2019

IIB 116TH CONGRESS 1ST SESSION H. R. 3620 IN THE SENATE OF THE UNITED STATES SEPTEMBER 11, 2019 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT 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. VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 3620 RFS 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 2019’’. 5 SEC. 2. PERMANENT ESTABLISHMENT OF HOUSING PRES- 6 ERVATION AND REVITALIZATION PROGRAM. 7 Title V of the Housing Act of 1949 (42 U.S.C. 1471 8 et seq.) is amended by adding at the end the following 9 new section: 10 ‘‘SEC. 545. HOUSING PRESERVATION AND REVITALIZATION 11 PROGRAM. 12 ‘‘(a) ESTABLISHMENT.—The Secretary shall carry 13 out a program under this section for the preservation and 14 revitalization of multifamily rental housing projects fi- 15 nanced under section 515 or both sections 514 and 516. 16 ‘‘(b) NOTICE OF MATURING LOANS.— 17 ‘‘(1) TO OWNERS.—On an annual basis, the 18 Secretary shall provide written notice to each owner 19 of a property financed under section 515 or both 20 sections 514 and 516 that will mature within the 4- 21 year period beginning upon the provision of such no- 22 tice, setting forth the options and financial incen- 23 tives that are available to facilitate the extension of 24 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 3620 RFS the loan term or the option to decouple a rental as- 1 sistance contract pursuant to subsection (f). 2 ‘‘(2) TO TENANTS.— 3 ‘‘(A) IN GENERAL.—For each property fi- 4 nanced under section 515 or both sections 514 5 and 516, not later than the date that is 2 years 6 before the date that such loan will mature, the 7 Secretary shall provide written notice to each 8 household residing in such property that in- 9 forms them of the date of the loan maturity, 10 the possible actions that may happen with re- 11 spect to the property upon such maturity, and 12 how to protect their right to reside in federally 13 assisted housing after such maturity. 14 ‘‘(B) LANGUAGE.—Notice under this para- 15 graph shall be provided in plain English and 16 shall be translated to other languages in the 17 case of any property located in an area in which 18 a significant number of residents speak such 19 other languages. 20 ‘‘(c) LOAN RESTRUCTURING.—Under the program 21 under this section, the Secretary may restructure such ex- 22 isting housing loans, as the Secretary considers appro- 23 priate, for the purpose of ensuring that such projects have 24 sufficient resources to preserve the projects to provide safe 25 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 3620 RFS and affordable housing for low-income residents and farm 1 laborers, by— 2 ‘‘(1) reducing or eliminating interest; 3 ‘‘(2) deferring loan payments; 4 ‘‘(3) subordinating, reducing, or reamortizing 5 loan debt; and 6 ‘‘(4) providing other financial assistance, in- 7 cluding advances, payments, and incentives (includ- 8 ing the ability of owners to obtain reasonable re- 9 turns on investment) required by the Secretary. 10 ‘‘(d) RENEWAL OF RENTAL ASSISTANCE.—When the 11 Secretary offers to restructure a loan pursuant to sub- 12 section (c), the Secretary shall offer to renew the rental 13 assistance contract under section 521(a)(2) for a 20-year 14 term that is subject to annual appropriations, provided 15 that the owner agrees to bring the property up to such 16 standards that will ensure its maintenance as decent, safe, 17 and sanitary housing for the full term of the rental assist- 18 ance contract. 19 ‘‘(e) RESTRICTIVE USE AGREEMENTS.— 20 ‘‘(1) REQUIREMENT.—As part of the preserva- 21 tion and revitalization agreement for a project, the 22 Secretary shall obtain a restrictive use agreement 23 that obligates the owner to operate the project in ac- 24 cordance with this title. 25 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 3620 RFS ‘‘(2) TERM.— 1 ‘‘(A) NO EXTENSION OF RENTAL ASSIST- 2 ANCE CONTRACT.—Except when the Secretary 3 enters into a 20-year extension of the rental as- 4 sistance contract for the project, the term of 5 the restrictive use agreement for the project 6 shall be consistent with the term of the restruc- 7 tured loan for the project. 8 ‘‘(B) EXTENSION OF RENTAL ASSISTANCE 9 CONTRACT.—If the Secretary enters into a 20- 10 year extension of the rental assistance contract 11 for a project, the term of the restrictive use 12 agreement for the project shall be for 20 years. 13 ‘‘(C) TERMINATION.—The Secretary may 14 terminate the 20-year use restrictive use agree- 15 ment for a project prior to the end of its term 16 if the 20-year rental assistance contract for the 17 project with the owner is terminated at any 18 time for reasons outside the owner’s control. 19 ‘‘(f) DECOUPLING OF RENTAL ASSISTANCE.— 20 ‘‘(1) RENEWAL OF RENTAL ASSISTANCE CON- 21 TRACT.—If the Secretary determines that a matur- 22 ing loan for a project cannot reasonably be restruc- 23 tured in accordance with subsection (c) and the 24 project was operating with rental assistance under 25 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 6 HR 3620 RFS section 521, the Secretary may renew the rental as- 1 sistance contract, notwithstanding any provision of 2 section 521, for a term, subject to annual appropria- 3 tions, of at least 10 years but not more than 20 4 years. 5 ‘‘(2) RENTS.—Any agreement to extend the 6 term of the rental assistance contract under section 7 521 for a project shall obligate the owner to con- 8 tinue to maintain the project as decent, safe and 9 sanitary housing and to operate the development in 10 accordance with this title, except that rents shall be 11 based on the lesser of— 12 ‘‘(A) the budget-based needs of the project; 13 or 14 ‘‘(B) (ii) the operating cost adjustment 15 factor as a payment standard as provided under 16 section 524 of the Multifamily Assisted Hous- 17 ing Reform and Affordability Act of 1997 (42 18 U.S.C. 1437 note). 19 ‘‘(g) MULTIFAMILY HOUSING TRANSFER TECHNICAL 20 ASSISTANCE.—Under the program under this section, the 21 Secretary may provide grants to qualified non-profit orga- 22 nizations and public housing agencies to provide technical 23 assistance, including financial and legal services, to bor- 24 rowers under loans under this title for multifamily housing 25 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 7 HR 3620 RFS to facilitate the acquisition of such multifamily housing 1 properties in areas where the Secretary determines there 2 is a risk of loss of affordable housing. 3 ‘‘(h) TRANSFER OF RENTAL ASSISTANCE.—After the 4 loan or loans for a rental project originally financed under 5 section 515 or both sections 514 and 516 have matured 6 or have been prepaid and the owner has chosen not to 7 restructure the loan pursuant to subsection (c), a tenant 8 residing in such project shall have 18 months prior to loan 9 maturation or prepayment to transfer the rental assist- 10 ance assigned to the tenant’s unit to another rental project 11 originally financed under section 515 or both sections 514 12 and 516, and the owner of the initial project may rent 13 the tenant’s previous unit to a new tenant without income 14 restrictions. 15 ‘‘(i) ADMINISTRATIVE EXPENSES.—Of any amounts 16 made available for the program under this section for any 17 fiscal year, the Secretary may use not more than 18 $1,000,000 for administrative expenses for carrying out 19 such program. 20 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 21 is authorized to be appropriated for the program under 22 this section $200,000,000 for each of fiscal years 2020 23 through 2024.’’. 24 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 8 HR 3620 RFS SEC. 3. ELIGIBILITY FOR RURAL HOUSING VOUCHERS. 1 Section 542 of the Housing Act of 1949 (42 U.S.C. 2 1490r) is amended by adding at the end the following new 3 subsection: 4 ‘‘(c) ELIGIBILITY OF HOUSEHOLDS IN SECTION 514, 5 515, AND 516 PROJECTS.—The Secretary may provide 6 rural housing vouchers under this section for any low-in- 7 come household (including those not receiving rental as- 8 sistance) residing in a property financed with a loan made 9 or insured under section 514 or 515 (42 U.S.C. 1484, 10 1485) which has been prepaid, has been foreclosed, or has 11 matured after September 30, 2005, or residing in a prop- 12 erty assisted under section 514 or 516 that is owned by 13 a nonprofit organization or public agency.’’. 14 SEC. 4. AMOUNT OF VOUCHER ASSISTANCE. 15 Notwithstanding any other provision of law, in the 16 case of any rural housing voucher provided pursuant to 17 section 542 of the Housing Act of 1949 (42 U.S.C. 18 1490r), the amount of the monthly assistance payment for 19 the household on whose behalf such assistance is provided 20 shall be determined as provided in subsection (a) of such 21 section 542. 22 SEC. 5. USE OF AVAILABLE RENTAL ASSISTANCE. 23 Subsection (d) of section 521 of the Housing Act of 24 1949 (42 U.S.C. 1490a(d)) is amended by adding at the 25 end the following new paragraph: 26 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 9 HR 3620 RFS ‘‘(3) In the case of any rental assistance contract au- 1 thority that becomes available because of the termination 2 of assistance on behalf of an assisted family— 3 ‘‘(A) at the option of the owner of the rental 4 project, the Secretary shall provide the owner a pe- 5 riod of 6 months before such assistance is made 6 available pursuant to subparagraph (B) during 7 which the owner may use such assistance authority 8 to provide assistance of behalf of an eligible unas- 9 sisted family that— 10 ‘‘(i) is residing in the same rental project 11 that the assisted family resided in prior to such 12 termination; or 13 ‘‘(ii) newly occupies a dwelling unit in such 14 rental project during such period; and 15 ‘‘(B) except for assistance used as provided in 16 subparagraph (A), the Secretary shall use such re- 17 maining authority to provide such assistance on be- 18 half of eligible families residing in other rental 19 projects originally financed under section 515 or 20 both sections 514 and 516 of this Act.’’. 21 SEC. 6. FUNDING FOR MULTIFAMILY TECHNICAL IMPROVE- 22 MENTS. 23 There is authorized to be appropriated to the Sec- 24 retary of Agriculture $50,000,000 for fiscal year 2020 for 25 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 10 HR 3620 RFS improving the technology of the Department of Agri- 1 culture used to process loans for multifamily housing and 2 otherwise managing such housing. Such improvements 3 shall be made within the 5-year period beginning upon the 4 appropriation of such amounts and such amount shall re- 5 main available until the expiration of such 5-year period. 6 SEC. 7. PLAN FOR PRESERVING AFFORDABILITY OF RENT- 7 AL PROJECTS. 8 (a) PLAN.—The Secretary of Agriculture (in this sec- 9 tion referred to as the ‘‘Secretary’’) shall submit a written 10 plan to the Congress, not later than the expiration of the 11 6-month period beginning on the date of the enactment 12 of this Act, for preserving the affordability for low-income 13 families of rental projects for which loans were made 14 under section 515 or made to nonprofit or public agencies 15 under section 514 and avoiding the displacement of tenant 16 households, which shall— 17 (1) set forth specific performance goals and 18 measures; 19 (2) set forth the specific actions and mecha- 20 nisms by which such goals will be achieved; 21 (3) set forth specific measurements by which 22 progress towards achievement of each goal can be 23 measured; 24 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 11 HR 3620 RFS (4) provide for detailed reporting on outcomes; 1 and 2 (5) include any legislative recommendations to 3 assist in achievement of the goals under the plan. 4 (b) ADVISORY COMMITTEE.— 5 (1) ESTABLISHMENT; PURPOSE.—The Sec- 6 retary shall establish an advisory committee whose 7 purpose shall be to assist the Secretary in preserving 8 section 515 properties and section 514 properties 9 owned by nonprofit or public agencies through the 10 multifamily housing preservation and revitalization 11 program under section 545 and in implementing the 12 plan required under subsection (a). 13 (2) MEMBER.—The advisory committee shall 14 consist of 14 members, appointed by the Secretary, 15 as follows: 16 (A) A State Director of Rural Develop- 17 ment for the Department of Agriculture. 18 (B) The Administrator for Rural Housing 19 Service of the Department of Agriculture. 20 (C) Two representatives of for-profit devel- 21 opers or owners of multifamily rural rental 22 housing. 23 VerDate Sep 11 2014 22:07 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3620.RFS H3620 pamtmann on DSKBC07HB2PROD with BILLS 12 HR 3620 RFS (D) Two representatives of non-profit de- 1 velopers or owners of multifamily rural rental 2 housing. 3 (E) Two representatives of State housing 4 finance agencies. 5 (F) Two representatives of tenants of mul- 6 tifamily rural rental housing. 7 (G) One representative of a community de- 8 velopment financial institution that is involved 9 in preserving the affordability of housing as- 10 sisted under sections 514, 515, and 516 of the 11 Housing Act of 1949. 12 (H) One representative of a nonprofit or- 13 ganization that operates nationally and has ac- 14 tivel [Text truncated for display. Full text available on Congress.gov.]