§ 513. AUTHORITY OF PARTICIPATING ADMINISTRATIVE ENTITIES.
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Participating Administrative Entities.— In general .— Subject to subsection (b)(3), the Secretary shall enter into portfolio restructuring agreements with participating administrative entities for the implementation of mortgage restructuring and rental assistance sufficiency plans to restructure multifamily housing mortgages insured or held by the Secretary under the National Housing Act [ 12 U.S.C. 1701 et seq.], in order to— reduce the costs of expiring contracts for assistance under section 8 of the United States Housing Act of 1937 [ 42 U.S.C. 1437f ]; address financially and physically troubled projects; and correct management and ownership deficiencies.
Portfolio restructuring agreements .— Each portfolio restructuring agreement entered into under this subsection shall— be a cooperative agreement to establish the obligations and requirements between the Secretary and the participating administrative entity; identify the eligible multifamily housing projects or groups of projects for which the participating administrative entity is responsible for assisting in developing and implementing approved mortgage restructuring and rental assistance sufficiency plans under section 514; require the participating administrative entity to review and certify to the accuracy and completeness of the evaluation of rehabilitation needs required under section 514(e)(3) for each eligible multifamily housing project included in the portfolio restructuring agreement, in accordance with regulations promulgated by the Secretary; identify the responsibilities of both the participating administrative entity and the Secretary in implementing a mortgage restructuring and rental assistance sufficiency plan, including any actions proposed to be taken under section 516 or 517; require each mortgage restructuring and rental assistance sufficiency plan to be prepared in accordance with the requirements of section 514 for each eligible multifamily housing project; include other requirements established by the Secretary, including a right of the Secretary to terminate the contract immediately for failure of the participating administrative entity to comply with any applicable requirement; if the participating administrative entity is a State housing finance agency or a local housing agency, indemnify the participating administrative entity against lawsuits and penalties for actions taken pursuant to the agreement, excluding actions involving willful misconduct or negligence; include compensation for all reasonable expenses incurred by the participating administrative entity necessary to perform its duties under this subtitle; and include, where appropriate, incentive agreements with the participating administrative entity to reward superior performance in meeting the purposes of this title.
Selection of Participating Administrative Entity.— Selection criteria .— The Secretary shall select a participating administrative entity based on whether, in the determination of the Secretary, the participating administrative entity— has demonstrated experience in working directly with residents of low-income housing projects and with tenants and other community-based organizations; has demonstrated experience with and capacity for multifamily restructuring and multifamily financing (which may include risk-sharing arrangements and restructuring eligible multifamily housing properties under the fiscal year 1997 Federal Housing Administration multifamily housing demonstration program); has a history of stable, financially sound, and responsible administrative performance (which may include the management of affordable low-income rental housing); has demonstrated financial strength in terms of asset quality, capital adequacy, and liquidity; has demonstrated that it will carry out the specific transactions and other responsibilities under this subtitle in a timely, efficient, and cost-effective manner; and meets other criteria, as determined by the Secretary.
Selection .— If more than 1 interested entity meets the qualifications and selection criteria for a participating administrative entity, the Secretary may select the entity that demonstrates, as determined by the Secretary, that it will— provide the most timely, efficient, and cost-effective— restructuring of the mortgages covered by the portfolio restructuring agreement; and administration of the section 8 project-based assistance contract, if applicable; and protect the public interest (including the long-term provision of decent low-income affordable rental housing and protection of residents, communities, and the American taxpayer).
Partnerships .— For the purposes of any participating administrative entity applying under this subsection, participating administrative entities are encouraged to develop partnerships with each other and with nonprofit organizations, if such partnerships will further the participating administrative entity’s ability to meet the purposes of this title. Alternative administrators .— With respect to any eligible multifamily housing project for which a participating administrative entity is unavailable, or should not be selected to carry out the requirements of this subtitle with respect to that multifamily housing project for reasons relating to the selection criteria under paragraph (1), the Secretary shall— carry out the requirements of this subtitle with respect to that eligible multifamily housing project; or contract with other qualified entities that meet the requirements of paragraph
(1)to provide the authority to carry out all or a portion of the requirements of this subtitle with respect to that eligible multifamily housing project. Priority for public agencies as participating administrative entities .— The Secretary shall provide a reasonable period during which the Secretary will consider proposals only from State housing finance agencies or local housing agencies, and the Secretary shall select such an agency without considering other applicants if the Secretary determines that the agency is qualified. The period shall be of sufficient duration for the Secretary to determine whether any State housing finance agencies or local housing agencies are interested and qualified. Not later than the end of the period, the Secretary shall notify the State housing finance agency or the local housing agency regarding the status of the proposal and, if the proposal is rejected, the reasons for the rejection and an opportunity for the applicant to respond. State and local portfolio requirements.— In general .— If the housing finance agency of a State is selected as the participating administrative entity, that agency shall be responsible for such eligible multifamily housing projects in that State as may be agreed upon by the participating administrative entity and the Secretary. If a local housing agency is selected as the participating administrative entity, that agency shall be responsible for such eligible multifamily housing projects in the jurisdiction of the agency as may be agreed upon by the participating administrative entity and the Secretary. Nondelegation .— Except with the prior approval of the Secretary, a participating administrative entity may not delegate or transfer responsibilities and functions under this subtitle to 1 or more entities. Private entity requirements.— In general .— If a for-profit entity is selected as the participating administrative entity, that entity shall be required to enter into a partnership with a public purpose entity (including the Department). Prohibition .— No private entity shall share, participate in, or otherwise benefit from any equity created, received, or restructured as a result of the portfolio restructuring agreement.
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