Strategy and Investment in Rural Housing Preservation Act of 2023

II 118TH CONGRESS 1ST SESSION S. 1490 To establish a permanent rural housing preservation and revitalization program, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 9, 2023 Mrs. SHAHEEN (for herself, Ms. SMITH, and Mr. KING) introduced the fol- lowing bill; which was read twice and referred to the Committee on Bank- ing, Housing, and Urban Affairs A BILL To establish a permanent rural housing preservation and revitalization program, and for other purposes. 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 2023’’. 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 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1490 IS ‘‘SEC. 545. HOUSING PRESERVATION AND REVITALIZATION 1 PROGRAM. 2 ‘‘(a) ESTABLISHMENT.—The Secretary shall carry 3 out a program under this section for the preservation and 4 revitalization of multifamily rental housing projects fi- 5 nanced under section 515 or both sections 514 and 516. 6 ‘‘(b) NOTICE OF MATURING LOANS.— 7 ‘‘(1) TO OWNERS.—On an annual basis, the 8 Secretary shall provide written notice to each owner 9 of a property financed under section 515 or both 10 sections 514 and 516 that will mature within the 4- 11 year period beginning upon the provision of the no- 12 tice, setting forth the options and financial incen- 13 tives that are available to facilitate the extension of 14 the loan term or the option to decouple a rental as- 15 sistance contract pursuant to subsection (f). 16 ‘‘(2) TO TENANTS.— 17 ‘‘(A) IN GENERAL.—For each property fi- 18 nanced under section 515 or both sections 514 19 and 516, not later than the date that is 2 years 20 before the date that the loan will mature, the 21 Secretary shall provide written notice to each 22 household residing in the property that informs 23 them of the date of the loan maturity, the pos- 24 sible actions that may happen with respect to 25 the property upon that maturity, and how to 26 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1490 IS protect their right to reside in federally assisted 1 housing after that maturity. 2 ‘‘(B) LANGUAGE.—Notice under this para- 3 graph shall be provided in plain English and 4 shall be translated to other languages in the 5 case of any property located in an area in which 6 a significant number of residents speak such 7 other languages. 8 ‘‘(c) LOAN RESTRUCTURING.—Under the program 9 under this section, in any circumstance in which the Sec- 10 retary proposes a restructuring to an owner or an owner 11 proposes a restructuring to the Secretary, the Secretary 12 may restructure such existing housing loans, as the Sec- 13 retary considers appropriate, for the purpose of ensuring 14 that those projects have sufficient resources to preserve 15 the projects to provide safe and affordable housing for low- 16 income residents and farm laborers, by— 17 ‘‘(1) reducing or eliminating interest; 18 ‘‘(2) deferring loan payments; 19 ‘‘(3) subordinating, reducing, or reamortizing 20 loan debt; and 21 ‘‘(4) providing other financial assistance, in- 22 cluding advances, payments, and incentives (includ- 23 ing the ability of owners to obtain reasonable re- 24 turns on investment) required by the Secretary. 25 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1490 IS ‘‘(d) RENEWAL OF RENTAL ASSISTANCE.— 1 ‘‘(1) IN GENERAL.—When the Secretary pro- 2 poses to restructure a loan or agrees to the proposal 3 of an owner to restructure a loan pursuant to sub- 4 section (c), the Secretary shall offer to renew the 5 rental assistance contract under section 521(a)(2) 6 for a 20-year term that is subject to annual appro- 7 priations, provided that the owner agrees to bring 8 the property up to or maintain the property at such 9 standards that will ensure maintenance of the prop- 10 erty as decent, safe, and sanitary housing for the 11 full term of the rental assistance contract. 12 ‘‘(2) ADDITIONAL RENTAL ASSISTANCE.— 13 ‘‘(A) IN GENERAL.—With respect to a 14 project described in paragraph (1), if rental as- 15 sistance is not available for all households in 16 the project for which the loan is being restruc- 17 tured pursuant to subsection (c), the Secretary 18 may extend such additional rental assistance to 19 unassisted households at that project as is nec- 20 essary to make the project safe and affordable 21 to low-income households. 22 ‘‘(B) UNAVAILABLE PROPERTY.—In the 23 event that a property is not available to provide 24 additional rental assistance to households under 25 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1490 IS subparagraph (A), the Secretary may offer a 1 rural housing voucher to those households. 2 ‘‘(e) RESTRICTIVE USE AGREEMENTS.— 3 ‘‘(1) REQUIREMENT.—As part of the preserva- 4 tion and revitalization agreement for a project, the 5 Secretary shall obtain a restrictive use agreement 6 that obligates the owner to operate the project in ac- 7 cordance with this title. 8 ‘‘(2) TERM.— 9 ‘‘(A) NO EXTENSION OF RENTAL ASSIST- 10 ANCE CONTRACT.—Except when the Secretary 11 enters into a 20-year extension of the rental as- 12 sistance contract for a project, the term of the 13 restrictive use agreement for the project shall 14 be consistent with the term of the restructured 15 loan for the project. 16 ‘‘(B) EXTENSION OF RENTAL ASSISTANCE 17 CONTRACT.—If the Secretary enters into a 20- 18 year extension of the rental assistance contract 19 for a project, the term of the restrictive use 20 agreement for the project shall be for 20 years. 21 ‘‘(C) TERMINATION.—The Secretary may 22 terminate the 20-year use restrictive use agree- 23 ment for a project before the end of the term 24 of the agreement if the 20-year rental assist- 25 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1490 IS ance contract for the project with the owner is 1 terminated at any time for reasons outside the 2 control of the owner. 3 ‘‘(f) DECOUPLING OF RENTAL ASSISTANCE.— 4 ‘‘(1) RENEWAL OF RENTAL ASSISTANCE CON- 5 TRACT.—If the Secretary determines that a matur- 6 ing loan for a project cannot reasonably be restruc- 7 tured in accordance with subsection (c) because it is 8 not financially feasible or the owner does not agree 9 with the proposed restructuring, and the project was 10 operating with rental assistance under section 521, 11 the Secretary may renew the rental assistance con- 12 tract, notwithstanding any provision of section 521, 13 for a term, subject to annual appropriations, of 20 14 years, provided that the owner enters into a restric- 15 tive use agreement. 16 ‘‘(2) ADDITIONAL RENTAL ASSISTANCE.—With 17 respect to a project described in paragraph (1), if 18 rental assistance is not available for all households 19 in the project, the Secretary may extend such addi- 20 tional rental assistance to unassisted households at 21 that project as is necessary to make the project safe 22 and affordable to low-income households. 23 ‘‘(3) RENTS.—Any agreement to extend the 24 term of the rental assistance contract under section 25 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1490 IS 521 for a project shall obligate the owner to con- 1 tinue to maintain the project as decent, safe and 2 sanitary housing and to operate the development in 3 accordance with this title, except that rents shall be 4 based on the lesser of— 5 ‘‘(A) the budget-based needs of the project; 6 or 7 ‘‘(B) the operating cost adjustment factor 8 as a payment standard as provided under sec- 9 tion 524 of the Multifamily Assisted Housing 10 Reform and Affordability Act of 1997 (42 11 U.S.C. 1437 note). 12 ‘‘(4) CONDITIONS FOR APPROVAL.— 13 ‘‘(A) PLAN.—Before the approval of a 14 rental assistance contract authorized under this 15 section, the Secretary shall require the owner to 16 submit to the Secretary a plan that identifies fi- 17 nancing sources and a timetable for renovations 18 and improvements determined to be necessary 19 by the Secretary to maintain and preserve the 20 project. 21 ‘‘(B) AUTOMATIC APPROVAL.—If a plan 22 submitted under subparagraph (A) is not acted 23 upon by the Secretary within 30 days of the 24 submission, the rental assistance contract is 25 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1490 IS automatically approved for not more than a 1- 1 year period. 2 ‘‘(g) MULTIFAMILY HOUSING TRANSFER TECHNICAL 3 ASSISTANCE.—Under the program under this section, the 4 Secretary may provide grants to qualified nonprofit orga- 5 nizations and public housing agencies to provide technical 6 assistance, including financial and legal services, to bor- 7 rowers under loans under this title for multifamily housing 8 to facilitate the acquisition of such multifamily housing 9 properties in areas where the Secretary determines there 10 is a risk of loss of affordable housing. 11 ‘‘(h) TRANSFER OF RENTAL ASSISTANCE.—After the 12 loan or loans for a rental project originally financed under 13 section 515 or both sections 514 and 516 have matured 14 or have been prepaid and the owner has chosen not to 15 restructure the loan pursuant to subsection (c)— 16 ‘‘(1) a tenant residing in the project shall have 17 18 months before loan maturation or prepayment to 18 transfer the rental assistance assigned to the unit of 19 the tenant to another rental project originally fi- 20 nanced under section 515 or both sections 514 and 21 516, and such tenants will have priority for admis- 22 sion over other applicants; and 23 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1490 IS ‘‘(2) the owner of the initial project may rent 1 the previous unit of the tenant to a new tenant with- 2 out income restrictions. 3 ‘‘(i) ADMINISTRATIVE EXPENSES.—Of any amounts 4 made available for the program under this section for any 5 fiscal year, the Secretary may use not more than 6 $1,000,000 for administrative expenses for carrying out 7 such program. 8 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 9 is authorized to be appropriated for the program under 10 this section $200,000,000 for each of fiscal years 2024 11 through 2028. 12 ‘‘(k) RULEMAKING.— 13 ‘‘(1) IN GENERAL.—Not later than 180 days 14 after the date of enactment of the Strategy and In- 15 vestment in Rural Housing Preservation Act of 16 2023, the Secretary shall— 17 ‘‘(A) publish an advance notice of proposed 18 rulemaking; and 19 ‘‘(B) consult with appropriate stake- 20 holders. 21 ‘‘(2) INTERIM FINAL RULE.—Not later than 1 22 year after the date of enactment of the Strategy and 23 Investment in Rural Housing Preservation Act of 24 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1490 IS 2023, the Secretary shall publish an interim final 1 rule to carry out this section.’’. 2 SEC. 3. ELIGIBILITY FOR RURAL HOUSING VOUCHERS. 3 Section 542 of the Housing Act of 1949 (42 U.S.C. 4 1490r) is amended by adding at the end the following: 5 ‘‘(c) ELIGIBILITY OF HOUSEHOLDS IN SECTIONS 6 514, 515, AND 516 PROJECTS.— 7 ‘‘(1) IN GENERAL.—The Secretary may provide 8 rural housing vouchers under this section for any 9 low-income household (including those not receiving 10 rental assistance) residing— 11 ‘‘(A) for a term longer than the remaining 12 term of their lease in effect just prior to pre- 13 payment, in a property financed with a loan 14 made or insured under section 514 or 515 that 15 has— 16 ‘‘(i) been prepaid without restrictions 17 imposed by the Secretary pursuant to sec- 18 tion 502(c)(5)(G)(ii)(I); 19 ‘‘(ii) been foreclosed; or 20 ‘‘(iii) matured after September 30, 21 2005, and the property is not receiving 22 rental assistance under section 545(f); or 23 ‘‘(B) in a property assisted under section 24 514 or 516. 25 VerDate Sep 11 2014 04:34 May 16, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1490 IS ‘‘(2) PRIORITY.—The Secretary shall prioritize 1 the provision of rental housing vouchers under this 2 section for projects owned by nonprofit organizations 3 and their affiliates or public agencies.’’. 4 SEC. 4. AMOUNT OF VOUCHER ASSISTANCE. 5 Notwithstanding any other provision of law, in the 6 case of any rural housing voucher provided pursuant to 7 section 542 of the Housing Act of 1949 (42 U.S.C. 8 1490r), the amount of the monthly assistance payment for 9 the household on whose behalf the assistance is provided 10 shall be determined as provided in subsection (a) of such 11 section 542. 12 SEC. 5. RENTAL ASSISTANCE CONTRACT AUTHORITY. 13 Section 521(d) of the Housing Act of 1949 (42 14 U.S.C. 1490a(d)) is amended— 15 (1) in paragraph (1)— 16 (A) by redesignating subparagraphs (B) 17 and (C) as subparagraphs (C) and (D), respec- 18 tively; 19 (B) by inserting after subparagraph (A) 20 the following: 21 ‘‘(B) upon request of an owner of a project 22 financed under section 514 or 515 or an owner 23 who has entered into a restrictive use agree- 24 ment under section 545(e), the Secretary is au- 25 VerDate Sep 11 2014 23:03 May 15, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1490.IS S1490 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1490 IS thorized to enter into a renewal of such agree- 1 ments for a period of 20 years or the term of 2 the loan, whichever is shorter, subject to 3 amounts made available in appropriations 4 Acts;’’; 5 (C) in subparagraph (C), as so redesig- 6 nated, by striking ‘‘subparagraph (A)’’ and in- 7 serting ‘‘subparagraphs (A) and (B)’’; and 8 (D) in subparagraph (D), as so redesig- 9 nated, by striking ‘‘subparagraphs (A) and 10 (B)’’ and inserting ‘‘subp [Text truncated for display. 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