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National Housing Conference & the Center for Housing Policy, profile picture
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Gideon Anders, National Housing Law Project

This document summarizes proposed rural housing preservation legislation. It outlines a program that would allow owners of Section 515 rural rental housing and Section 514/516 farm labor housing to apply to participate in preservation efforts. If approved, owners would prepare a long-term viability plan, physical needs assessment, and financial plan. The legislation provides financial restructuring options for owners, such as loan forgiveness or subsidized interest rates. It also establishes long-term use agreements and provides tenant protection vouchers to allow residents to remain in the housing.

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GIDEON ANDERS SENIOR ATTORNEY NATIONAL HOUSING LAW PROJECT PARTNERS IN INNOVATION PORTLAND, OREGON MAY 17, 2010 Rural Housing Preservation Legislation www.nhlp.org
HR 4868 Housing Preservation and Tenant Protection Act of 2010 Title VIII: Preservation of RD/RHS Housing Additional applicable provisions in Title I.
Title VIII Rural Housing Preservation Act of 2010 Preservation of Section 515 Rural Rental Housing and Section 514/516 Farm Labor Housing Preservation and Tenant Protection Vouchers Miscellaneous Provisions
Preservation Program Owner must apply to participate Secretary must prepare long-term viability plan (may use participating administrative agencies) 30- year Physical Needs Assessment Financial Plan Reviewed by the owner and residents Cost may be included in owner’s restructuring plan Preservation Determination Whether to offer Restructuring Financial Incentives to be offered Lack of accessible units the housing authority
Financial Restructuring Plan Reduction or elimination of interest Partial or full deferral of payments Loan forgiveness Loan subordination Reamortization Grant from RD/RHS (subject to appropriations) Third party equity investment Direct or Guaranteed Loan w/ subsidized interest rate.
Long Term Use Agreement 30-year term or remaining term of any loan, whichever is longer. Subject to termination if any material incentives are not available. Providing rural preservation vouchers to residents. Rents May not exceed 30% of household income
Preservation and Tenant Protection Vouchers Preservation Assistance Rental or Voucher Assistance to allow residents to remain in the development. Assistance is project-based Foreclosure Prepayment Vouchers Relocation voucher Enhanced voucher Owner required to accept Converts to reloation voucher upon resident’s departure.
Miscellaneous Provisions Resident Earned Income Disregard Same as HUD program For 1 year, excludes from income calculations household income of person who becomes employed after one year of unemployment, or who participates in any family self-sufficiency or other job training program. After one-year—excludes 50% on income. Extends tenant participation rights to those rights of residents under HUD Section 202 program.
Title I Provisions Section 102: Notice Requirement for mortgage maturity 12 month notice to HUD, State and Local Gov’t. (Does not preempt other state or local notice laws.) Changes in affordability planned. Subject to appropriations, availability of Section 8 vouchers, including enhanced vouchers. Subject to appropriations, possibility of entering into new agreement with HUD. Owner may not increase rent or evict residents for 12 months from provision of notice. HUD financial incentives to keep project affordable.
Possible Amendments RD/RHS Report on preserving non-participating owners. Restrictions on defaults, accelerations, and foreclosures to avoid prepayment restrictions. Extension of financial assistance to nonprofit and public agencies when project purchased by transfer. Extension of eligibility for predevelopment grants. Plain English notices to residents. Reduction of CNA period to 20 years.
FOR TECHNICAL ASSISTANCE, TRAININGS, AND ONLINE RESOURCES: GIDEON ANDERS SENIOR ATTORNEY NATIONAL HOUSING LAW PROJECT [email_address] (510)251-9400 EXT. 3103 HTTP://NHLP.ORG/RESOURCECENTER?TID=61