§ 516. PROHIBITION ON RESTRUCTURING.
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Prohibition on Restructuring .— The Secretary may elect not to consider any mortgage restructuring and rental assistance sufficiency plan or request for contract renewal if the Secretary or the participating administrative entity determines that— the owner or purchaser of the project has engaged in material adverse financial or managerial actions or omissions with regard to such project; or the owner or purchaser of the project has engaged in material adverse financial or managerial actions or omissions with regard to other projects of such owner or purchaser that are federally assisted or financed with a loan from, or mortgage insured or guaranteed by, an agency of the Federal Government; material adverse financial or managerial actions or omissions include— materially violating any Federal, State, or local law or regulation with regard to this project or any other federally assisted project, after receipt of notice and an opportunity to cure; materially breaching a contract for assistance under section 8 of the United States Housing Act of 1937 [ 42 U.S.C. 1437f ], after receipt of notice and an opportunity to cure; materially violating any applicable regulatory or other agreement with the Secretary or a participating administrative entity, after receipt of notice and an opportunity to cure; repeatedly and materially violating any Federal, State, or local law or regulation with regard to the project or any other federally assisted project; repeatedly and materially breaching a contract for assistance under section 8 of the United States Housing Act of 1937; repeatedly and materially violating any applicable regulatory or other agreement with the Secretary or a participating administrative entity; repeatedly failing to make mortgage payments at times when project income was sufficient to maintain and operate the property; materially failing to maintain the property according to housing quality standards after receipt of notice and a reasonable opportunity to cure; or committing any actions or omissions that would warrant suspension or debarment by the Secretary; the owner or purchaser of the property materially failed to follow the procedures and requirements of this subtitle, after receipt of notice and an opportunity to cure; or the poor condition of the project cannot be remedied in a cost effective manner, as determined by the participating administrative entity.
The term ‘owner’ as used in this subsection, in addition to it having the same meaning as in section 8(f) of the United States Housing Act of 1937, also means an affiliate of the owner. The term ‘purchaser’ as used in this subsection means any private person or entity, including a cooperative, an agency of the Federal Government, or a public housing agency, that, upon purchase of the project, would have the legal right to lease or sublease dwelling units in the project, and also means an affiliate of the purchaser.
The terms ‘affiliate of the owner’ and ‘affiliate of the purchaser’ means any person or entity (including, but not limited to, a general partner or managing member, or an officer of either) that controls an owner or purchaser, is controlled by an owner or purchaser, or is under common control with the owner or purchaser. The term ‘control’ means the direct or indirect power (under contract, equity ownership, the right to vote or determine a vote, or otherwise) to direct the financial, legal, beneficial or other interests of the owner or purchaser.
Opportunity To Dispute Findings.— In general .— During the 30-day period beginning on the date on which the owner or purchaser of an eligible multifamily housing project receives notice of a rejection under subsection
(a)or of a mortgage restructuring and rental assistance sufficiency plan under section 514, the Secretary or participating administrative entity shall provide that owner or purchaser with an opportunity to dispute the basis for the rejection and an opportunity to cure. Affirmation, modification, or reversal.— In general .— After providing an opportunity to dispute under paragraph (1), the Secretary or the participating administrative entity may affirm, modify, or reverse any rejection under subsection
(a)or rejection of a mortgage restructuring and rental assistance sufficiency plan under section 514. Reasons for decision .— The Secretary or the participating administrative entity, as applicable, shall identify the reasons for any final decision under this paragraph. Review process .— The Secretary shall establish an administrative review process to appeal any final decision under this paragraph. Final Determination .— Any final determination under this section shall not be subject to judicial review. Displaced Tenants.— Notice to certain residents .— The Office shall notify any tenant that is residing in a project or receiving assistance under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ) at the time of rejection under this section, of such rejection, except that the Office may delegate the responsibility to provide notice under this paragraph to the participating administrative entity. Assistance and moving expenses .— Subject to the availability of amounts provided in advance in appropriations Acts, for any low-income tenant that is residing in a project or receiving assistance under section 8 of the United States Housing Act of 1937 at the time of rejection under this section, that tenant shall be provided with tenant-based assistance and reasonable moving expenses, as determined by the Secretary. Transfer of Property .— For properties disqualified from the consideration of a mortgage restructuring and rental assistance sufficiency plan under this section in accordance with paragraph
(1)or
(2)of subsection
(a)because of actions by an owner or purchaser, the Secretary shall establish procedures to facilitate the voluntary sale or transfer of a property as part of a mortgage restructuring and rental assistance sufficiency plan, with a preference for tenant organizations and tenant-endorsed community-based nonprofit and public agency purchasers meeting such reasonable qualifications as may be established by the Secretary.
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§ 516
PROHIBITION ON RESTRUCTURING.
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