Sec. 40007. Revitalization of distressed multifamily properties
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In addition to amounts otherwise available, there is appropriated to the Secretary of Housing and Urban Development (in this section referred to as the Secretary ) for fiscal year 2022, out of any money in the Treasury not otherwise appropriated— $1,550,000,000 for providing direct loans, which may be forgivable, to owners of distressed properties for the purpose of making necessary physical improvements, including to subsidize gross obligations for the principal amount of direct loans not to exceed $6,000,000,000, subject to the terms and conditions in subsection (b); and $50,000,000 for the costs to the Secretary of administering and overseeing the implementation of this section and the Office of Housing programs generally, including information technology, financial reporting, research and evaluations, other cross-program costs in support of programs administered by the Secretary in this title, and other costs.
Amounts appropriated by this section shall remain available until September 30, 2029. Owners or sponsors of multifamily housing projects who meet each of the following requirements shall be eligible for loan assistance under this section: The multifamily housing project, including any project from which assistance has been approved to be transferred has deficiencies that cause the project to be at risk of physical obsolescence or economic non-viability. The actual rents received by the owner or sponsor of the distressed property would not adequately sustain the debt needed to make necessary physical improvements.
The owner or sponsor meets any such additional eligibility criteria as the Secretary determines to be appropriate, considering factors that contributed to the project’s deficiencies. Each recipient of loan assistance under this section may only use such loan assistance to make necessary physical improvements. The Secretary shall only provide loan assistance to an owner or sponsor of a multifamily housing project when such assistance, considered with other financial resources available to the owner or sponsor, is needed to make the necessary physical improvements.
Loans provided under this section shall bear interest at 1 percent, and at origination shall have a repayment period coterminous with the affordability period established under paragraph (6), with the frequency and amount of repayments to be determined by requirements established by the Secretary. With respect to loans provided under this section, the Secretary may take any of the following actions if the Secretary determines that doing so will preserve affordability of the project:
Waive any due on sale or due on refinancing restriction. Consent to the terms of new debt to which the loans may be subordinate, even if such new debt would impact the repayment of the loans. Extend the term of the loan. Forgive the loan in whole or in part. Each recipient of loan assistance under this section shall agree to an extended affordability period for the project that is subject to the loan by extending any existing affordable housing use agreements for an additional 30 years or, if the project is not currently subject to a use agreement establishing affordability requirements, by establishing a use agreement for 30 years.
Each recipient of loan assistance under this section shall secure at least 20 percent of the total cost needed to make the necessary physical improvements from non-Federal sources, except in cases where the Secretary determines that a lack of financial resources qualifies a loan recipient for— a reduced contribution below 20 percent; or an exemption to the matching contribution requirement. The Secretary may establish additional conditions for loan eligibility provided under this section as the Secretary determines to be appropriate.
In the case of any property with respect to which assistance is provided under this section that has a mortgage insured by the Secretary, the Secretary may use funds available under this section as necessary to pay for the costs of modifying such loan. As used in this section— the term multifamily housing project means a project consisting of five or more dwelling units assisted or approved to receive a transfer of assistance, insured, or with a loan held by the Secretary or a State or State agency in part or in whole pursuant to— section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ), not including subsection (o)(13) of such section; section 202 of the Housing Act of 1959 ( 12 U.S.C. 1701q ), as amended by section 801 of the Cranston-Gonzalez National Affordable Housing Act; section 202 of the Housing Act of 1959 (former 12 U.S.C. 1701q ), as such section existed before the enactment of the Cranston-Gonzalez National Affordable Housing Act; section 811 of the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 8013 ); or section 236 of the National Housing Act ( 12 U.S.C. 1715z-1 ); and the term necessary physical improvements means new construction or capital improvements to an existing multifamily housing project that the Secretary determines are necessary to address the deficiencies or that rise to such a level that delaying physical improvements to the project would be detrimental to the longevity of the project as suitable housing for occupancy.
The Secretary may waive or specify alternative requirements for any provision of subsection
(c)or
(bb)of section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(c) , 1437f(bb)) upon a finding that the waiver or alternative requirement is necessary to facilitate the use of amounts made available under this section. The Secretary shall have the authority to issue such regulations, notices, or other guidance, forms, instructions, and publications to carry out the programs, projects, or activities authorized under this section to ensure that such programs, projects, or activities are completed in a timely and effective manner.
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Sec. 40007
Revitalization of distressed multifamily properties
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