Permanent establishment of housing preservation and revitalization program; decoupling rental assistance

Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.) is amended by adding at the end the following new section: 545. Housing preservation and revitalization program (a) Establishment The Secretary shall carry out a program under this section for the preservation and revitalization of multifamily rental housing projects financed under section 515 or both sections 514 and 516. (b) Notice of maturing loans (1) To owners On an annual basis, the Secretary shall provide written notice to each owner of a property financed under section 515 or both sections 514 and 516 that will mature within the 4-year period beginning upon the provision of the notice, setting forth the options and financial incentives that are available to facilitate the extension of the loan term or the option to decouple a rental assistance contract pursuant to subsection (f). (2) To tenants (A) In general For each property financed under section 515 or both sections 514 and 516, not later than the date that is 2 years before the date that the loan will mature, the Secretary shall provide written notice to each household residing in the property that informs them of the date of the loan maturity, the possible actions that may happen with respect to the property upon that maturity, and how to protect their right to reside in federally assisted housing after that maturity. (B) Language Notice under this paragraph shall be provided in plain English and shall be translated to other languages in the case of any property located in an area in which a significant number of residents speak such other languages. (c) Loan restructuring Under the program under this section, in any circumstance in which the Secretary proposes a restructuring to an owner or an owner proposes a restructuring to the Secretary, the Secretary may restructure such existing housing loans, as the Secretary considers appropriate, for the purpose of ensuring that those projects have sufficient resources to preserve the projects to provide safe and affordable housing for low-income residents and farm laborers, by— (1) reducing or eliminating interest; (2) deferring loan payments; (3) subordinating, reducing, or reamortizing loan debt; and (4) providing other financial assistance, including advances, payments, and incentives (including the ability of owners to obtain reasonable returns on investment) required by the Secretary. (d) Renewal of rental assistance (1) In general When the Secretary proposes to restructure a loan or agrees to the proposal of an owner to restructure a loan pursuant to subsection (c), the Secretary shall offer to renew the rental assistance contract under section 521(a)(2) for a 20-year term that is subject to annual appropriations, provided that the owner agrees to bring the property up to or maintain the property at such standards that will ensure maintenance of the property as decent, safe, and sanitary housing for the full term of the rental assistance contract. (2) Additional rental assistance (A) In general With respect to a project described in paragraph (1), if rental assistance is not available for all households in the project for which the loan is being restructured pursuant to subsection (c), the Secretary may extend such additional rental assistance to unassisted households at that project as is necessary to make the project safe and affordable to low-income households. (B) Unavailable property In the event that a property is not available to provide additional rental assistance to households under subparagraph (A), the Secretary may offer a rural housing voucher to those households. (e) Restrictive use agreements (1) Requirement As part of the preservation and revitalization agreement for a project, the Secretary shall obtain a restrictive use agreement that obligates the owner to operate the project in accordance with this title. (2) Term (A) No extension of rental assistance contract Except when the Secretary enters into a 20-year extension of the rental assistance contract for a project, the term of the restrictive use agreement for the project shall be consistent with the term of the restructured loan for the project. (B) Extension of rental assistance contract If the Secretary enters into a 20-year extension of the rental assistance contract for a project, the term of the restrictive use agreement for the project shall be for 20 years. (C) Termination The Secretary may terminate the 20-year use restrictive use agreement for a project before the end of the term of the agreement if the 20-year rental assistance contract for the project with the owner is terminated at any time for reasons outside the control of the owner. (f) Decoupling of rental assistance (1) Renewal of rental assistance contract If the Secretary determines that a maturing loan for a project cannot reasonably be restructured in accordance with subsection (c) because it is not financially feasible or the owner does not agree with the proposed restructuring, and the project was operating with rental assistance under section 521, the Secretary may renew the rental assistance contract, notwithstanding any provision of section 521, for a term, subject to annual appropriations, of 20 years, provided that the owner enters into a restrictive use agreement. (2) Additional rental assistance With respect to a project described in paragraph (1), if rental assistance is not available for all households in the project, the Secretary may extend such additional rental assistance to unassisted households at that project as is necessary to make the project safe and affordable to low-income households. (3) Rents Any agreement to extend the term of the rental assistance contract under section 521 for a project shall obligate the owner to continue to maintain the project as decent, safe, and sanitary housing and to operate the development in accordance with this title, except that rents shall be based on the lesser of— (A) the budget-based needs of the project; or (B) the operating cost adjustment factor as a payment standard as provided under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437 note). (4) Conditions for approval (A) Plan Before the approval of a rental assistance contract authorized under this section, the Secretary shall require the owner to submit to the Secretary a plan that identifies financing sources and a timetable for renovations and improvements determined to be necessary by the Secretary to maintain and preserve the project. (B) Automatic approval If a plan submitted under subparagraph (A) is not acted upon by the Secretary within 30 days of the submission, the rental assistance contract is automatically approved for not more than a 1-year period. (g) Multifamily housing transfer technical assistance Under the program under this section, the Secretary may provide grants to qualified nonprofit organizations and public housing agencies to provide technical assistance, including financial and legal services, to borrowers under loans under this title for multifamily housing to facilitate the acquisition of such multifamily housing properties in areas where the Secretary determines there is a risk of loss of affordable housing. (h) Transfer of rental assistance After the loan or loans for a rental project originally financed under section 515 or both sections 514 and 516 have matured or have been prepaid and the owner has chosen not to restructure the loan pursuant to subsection (c)— (1) a tenant residing in the project shall have 18 months before loan maturation or prepayment to transfer the rental assistance assigned to the unit of the tenant to another rental project originally financed under section 515 or both sections 514 and 516, and such tenants will have priority for admission over other applicants; and (2) the owner of the initial project may rent the previous unit of the tenant to a new tenant without income restrictions. (i) Administrative expenses Of any amounts made available for the program under this section for any fiscal year, the Secretary may use not more than $1,000,000 for administrative expenses for carrying out such program. (j) Authorization of appropriations There is authorized to be appropriated for the program under this section $200,000,000 for each of fiscal years 2027 through 2031. (k) Rulemaking (1) In general Not later than 180 days after the date of enactment of this section, the Secretary shall— (A) publish an advance notice of proposed rulemaking; and (B) consult with appropriate stakeholders. (2) Interim final rule Not later than 1 year after the date of enactment of this section, the Secretary shall publish an interim final rule to carry out this section..