Requirements for covered loan programs

(a) Requirements On and after the date that is 180 days after the date of enactment of this Act, no loan shall be eligible for insurance by the Secretary or purchase by an enterprise, as applicable, under a covered loan program unless— (1) the borrower under the loan certifies to the Secretary or the applicable enterprise that the borrower will include, in any lease agreement for a pad site, or a pad site and manufactured home, located in any manufactured home community that the borrower or an affiliate of the borrower owns, the minimum consumer protections described in subsection (b); and (2) the borrower complies with regulations issued by the Secretary or the Director, as applicable, that require the borrower to submit documentation to the Secretary, or to the applicable enterprise and the Director, that is sufficient, as determined by the Secretary or the Director, to ensure that the borrower is complying with the certification described in paragraph (1), which shall include a copy of the standard lease agreement used by the borrower that includes the minimum protections described in subsection (b). (b) Minimum consumer protections (1) In general The minimum consumer protections described in this subsection are as follows: (A) 1-year lease terms that are renewable for additional 1-year terms unless there is good cause for non-renewal. (B) (i) A right to receive written notice of any newly required charges (including water and other utilities) or increase in the rents for pad sites, or pad sites and manufactured homes, located in the community, including a written justification of the increase with information on increases in the costs of operating, maintaining, or improving the community. (ii) A written notice described in clause (i) shall— (I) be provided to the tenant not less than 60 days before the effective date of any newly required charge or increase in the rents, except that, in the case of any increase exceeding 5 percent of the previous monthly rent, an additional 30-days notice shall be provided for each additional 2.5-percent increase in the rent; and (II) include identification of the amount of, and a description of, any newly required charges (including water and other utilities) that the tenant is not currently responsible for but will be responsible for upon the rent increase and, if available, an estimate of the monthly amount of those charges. (iii) For purposes of the calculation in clause (i)(I)— (I) the amount of any increase in the monthly rent for a dwelling unit shall be considered to include any newly required charges described in clause (i)(II); and (II) any newly required charges without an estimate of the monthly amount shall be estimated at 5 percent of the previous monthly rent. (C) A 5-day grace period for rent payments. (D) A right to cure defaults on rent payments within 15 days of the due date. (E) A right for a tenant who owns a manufactured home to sell a manufactured home owned by the tenant without having to first relocate the manufactured home out of the community. (F) A right for a tenant who owns a manufactured home to sell a manufactured home owned by the tenant in place within a reasonable time period, but not earlier than 45 days, after eviction by the owner of the manufactured home community. (G) A right for a tenant who owns a manufactured home— (i) to sublease or assign the pad site lease for the unexpired term to a new buyer of the manufactured home unless the prospective tenant fails to meet the reasonable and uniformly applied application criteria of the manufactured home community; and (ii) in such a case of denial, a right to written notice provided by the owner of the manufactured home community informing the tenant of the denial and the prospective tenant of the denial and the specific reason or reasons for denial. (H) A right for a tenant who owns a manufactured home to post For Sale signs. (I) A right to receive 60-day advance written notice of the planned sale or closure of the manufactured home community, which shall— (i) include the price, terms and conditions for the sale of the manufactured home community; and (ii) provide that— (I) no final acceptance of an offer to sell the manufactured home community may be made for 60 days; and (II) the owner shall negotiate in good faith with the tenants if they wish to purchase the manufactured home community during that 60-day period; (J) (i) A right against termination of tenancy except in cases in which a tenant engages in a material noncompliance with the rental agreement, a tenant commits a material violation of the manufactured home community reasonable rules or regulations, or the community has a material, legitimate, and uniformly applied business reason for termination that was included in the lease agreement as grounds for termination. (ii) In the case of a termination described in clause (i), a right to written notice provided by the owner of the community informing the tenant of the termination and the specific reason or reasons for termination. (2) Rule of construction Nothing in this subsection may be construed to annul, alter, or affect any State or local law providing greater protections to tenants of manufactured home communities than the protections afforded under this subsection. (c) Pricing incentives (1) In general Any covered pricing incentive offered for loans purchased under a covered loan program on or after the date that is 180 days after the date of enactment of this Act shall reward implementation of resident protections that are more protective than those specified in subsection (b). (2) Prohibition Any covered pricing incentive described in paragraph (1) that does not comply with the requirement described in that paragraph may not be offered for any loan purchased under a covered loan program on or after the date that is 180 days after the date of enactment of this Act. (d) Publication (1) In general The Secretary and the Director shall make the list of properties covered by the protections described in subsection (b) publicly available on a single website. (2) Other covered properties Properties that are covered as of the date of enactment of this Act by the Federal National Mortgage Association’s Tenant Site Lease Protections or the Federal Home Loan Mortgage Corporation’s MHC Tenant Protections shall— (A) be made publicly available; and (B) include an explanation of the differences between those protections and the minimum consumer protections described in subsection (b). (e) Penalties (1) In general The Secretary and the Director shall— (A) prohibit a borrower or an affiliate of the borrower from securing future federally backed financing or other housing-related Federal assistance for a period of not less than 2 years beginning on the date of the violation or failure if the borrower or affiliate, as applicable, willfully and materially— (i) violates a consumer protection described in subsection (b); or (ii) fails to include the consumer protections described in subsection (b) in any lease agreement; and (B) determine appropriate penalties for any borrower who fails to— (i) include the consumer protections described in subsection (b) in any lease agreement; or (ii) comply with a lease agreement including the protections described in subsection (b). (2) Nature of penalties The penalties determined under paragraph (1)(B) shall be in addition to minimum payments to the injured tenant as follows: (A) For a material violation of subparagraph (A) or (J) of subsection (b)(1), 6 months of the current monthly rent. (B) For a material violation of subsection (b)(1)(B), any increased rent must be paid back to the tenant with interest, plus 25 percent. (C) For a material violation of subsection (b)(1)(C), any penalties or late fees must be paid back to the tenant with interest, plus 25 percent. (D) For a material violation of subparagraph (D), (E), or (F) of subsection (b)(1), the greater of— (i) the sale price of the manufactured home, if the borrower or an affiliate sells it within 12 months of the violation; or (ii) 12 months of the prior monthly rent. (E) For a material violation of subparagraph (G) or (H) of subsection (b)(1), the total remaining monthly rent owed on the tenant’s lease. (F) For a material violation of subsection (b)(1)(I), the greater of 2 months rent or 10 percent of the sale price of the community divided by the number of tenants in the manufactured home community.