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 for fiscal year 2022, out of any money in the Treasury not otherwise appropriated— $3,870,000,000 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 $130,000,000 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; the Secretary may transfer and merge amounts appropriated under this paragraph to section 40301.
Amounts appropriated by this section shall remain available until September 30, 2031 Owners of distressed multifamily housing projects who meet each of the following requirements shall be eligible for loan assistance under this section: The actual rents received by the owner of the distressed property would not adequately sustain the debt needed to make necessary physical improvements. Any such additional eligibility criteria as the Secretary determines to be appropriate, including factors that contributed to the property’s distressed state.
Each recipient of loan assistance under this section may only use such loan assistance to make necessary physical improvements to a distressed property. The Secretary shall only provide loan assistance to an owner of a distressed property when such assistance, considered with other financial resources available to the owner, is necessary to remove the property from a distressed state. The Secretary may provide assistance in any amount that the Secretary determines is needed to make the necessary physical improvements that will correct the deficiencies of the distressed property.
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 (5), 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 property:
Waive any due on sale or due on refinancing restriction. Consent to the terms of new owner debt to which the loans may be subordinate, even if such new debt would impact the rate of 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 property that is subject to the loan by extending any existing affordable housing use agreements for an additional 30 years or, if the property 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 other than under this section, 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 a loan issued under this section that is secured by a property with insurance under title II of the National Housing Act ( 12 U.S.C. 1707 et seq. ), the Secretary may use funds available under this section as necessary to pay for the costs of modifying such loan in accordance with section 502 of the Congressional Budget Act of 1974 ( 2 U.S.C. 661a ). The costs of direct loans provided under this section, including the cost of modifying such direct loans, shall be as defined in section 502 of the Congressional Budget Act of 1974 ( 2 U.S.C. 661a ).
As used in this section— the term multifamily housing project means a project consisting of more than four dwelling units assisted, 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 under 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 ); the term distressed property means a multifamily housing project that has deficiencies that cause the property to be at risk of physical obsolescence or economic non-viability; the term Secretary means the Secretary of Housing and Urban Development; and the term necessary physical improvements means capital improvements that the Secretary determines are necessary to address the conditions making a property a distressed property or that rise to such a level that delaying physical improvements to the property would be detrimental to the longevity of the property as suitable housing for occupancy.
The Secretary shall have the authority to issue such regulations or other notices, guidance, forms, instructions, and publications as may be necessary or appropriate to carry out the programs, projects, or activities authorized under this section, including 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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