S1490-118

1. Short title This Act may be cited as the Strategy and Investment in Rural Housing Preservation Act of 2023.

2. Permanent establishment of housing preservation and revitalization program 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: 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. 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). 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. 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. 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— reducing or eliminating interest; deferring loan payments; subordinating, reducing, or reamortizing loan debt; and providing other financial assistance, including advances, payments, and incentives (including the ability of owners to obtain reasonable returns on investment) required by the Secretary. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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— the budget-based needs of the project; or 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). 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. 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. 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. 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)— 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 the owner of the initial project may rent the previous unit of the tenant to a new tenant without income restrictions. 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. There is authorized to be appropriated for the program under this section $200,000,000 for each of fiscal years 2024 through 2028. Not later than 180 days after the date of enactment of the Strategy and Investment in Rural Housing Preservation Act of 2023, the Secretary shall— publish an advance notice of proposed rulemaking; and consult with appropriate stakeholders. Not later than 1 year after the date of enactment of the Strategy and Investment in Rural Housing Preservation Act of 2023, the Secretary shall publish an interim final rule to carry out this section. 545.Housing preservation and revitalization program(a)EstablishmentThe 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 ownersOn 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 generalFor 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)LanguageNotice 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 restructuringUnder 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 generalWhen 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 generalWith 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 propertyIn 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)RequirementAs 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 contractExcept 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 contractIf 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)TerminationThe 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 contractIf 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 assistanceWith 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)RentsAny 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)PlanBefore 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 approvalIf 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 assistanceUnder 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 assistanceAfter 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 expensesOf 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 appropriationsThere is authorized to be appropriated for the program under this section $200,000,000 for each of fiscal years 2024 through 2028.(k)Rulemaking(1)In generalNot later than 180 days after the date of enactment of the Strategy and Investment in Rural Housing Preservation Act of 2023, the Secretary shall—(A)publish an advance notice of proposed rulemaking; and (B)consult with appropriate stakeholders. (2)Interim final ruleNot later than 1 year after the date of enactment of the Strategy and Investment in Rural Housing Preservation Act of 2023, the Secretary shall publish an interim final rule to carry out this section..

3. Eligibility for rural housing vouchers Section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) is amended by adding at the end the following: The Secretary may provide rural housing vouchers under this section for any low-income household (including those not receiving rental assistance) residing— for a term longer than the remaining term of their lease in effect just prior to prepayment, in a property financed with a loan made or insured under section 514 or 515 that has— been prepaid without restrictions imposed by the Secretary pursuant to section 502(c)(5)(G)(ii)(I); been foreclosed; or matured after September 30, 2005, and the property is not receiving rental assistance under section 545(f); or in a property assisted under section 514 or 516. The Secretary shall prioritize the provision of rental housing vouchers under this section for projects owned by nonprofit organizations and their affiliates or public agencies. (c)Eligibility of households in sections 514, 515, and 516 projects(1)In generalThe Secretary may provide rural housing vouchers under this section for any low-income household (including those not receiving rental assistance) residing—(A)for a term longer than the remaining term of their lease in effect just prior to prepayment, in a property financed with a loan made or insured under section 514 or 515 that has—(i)been prepaid without restrictions imposed by the Secretary pursuant to section 502(c)(5)(G)(ii)(I);(ii)been foreclosed; or (iii)matured after September 30, 2005, and the property is not receiving rental assistance under section 545(f); or(B)in a property assisted under section 514 or 516. (2)PriorityThe Secretary shall prioritize the provision of rental housing vouchers under this section for projects owned by nonprofit organizations and their affiliates or public agencies..

4. Amount of voucher assistance Notwithstanding any other provision of law, in the case of any rural housing voucher provided pursuant to section 542 of the Housing Act of 1949 (42 U.S.C. 1490r), the amount of the monthly assistance payment for the household on whose behalf the assistance is provided shall be determined as provided in subsection (a) of such section 542.

5. Rental assistance contract authority Section 521(d) of the Housing Act of 1949 (42 U.S.C. 1490a(d)) is amended— in paragraph (1)— by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively; by inserting after subparagraph (A) the following: upon request of an owner of a project financed under section 514 or 515 or an owner who has entered into a restrictive use agreement under section 545(e), the Secretary is authorized to enter into a renewal of such agreements for a period of 20 years or the term of the loan, whichever is shorter, subject to amounts made available in appropriations Acts; in subparagraph (C), as so redesignated, by striking subparagraph (A) and inserting subparagraphs (A) and (B); and in subparagraph (D), as so redesignated, by striking subparagraphs (A) and (B) and inserting subparagraphs (A), (B), and (C); and in paragraph (2)— by striking shall and inserting may; and by inserting (other than the authority described in paragraph (1)(B)) after this section. (B)upon request of an owner of a project financed under section 514 or 515 or an owner who has entered into a restrictive use agreement under section 545(e), the Secretary is authorized to enter into a renewal of such agreements for a period of 20 years or the term of the loan, whichever is shorter, subject to amounts made available in appropriations Acts;;

7. Plan for preserving affordability of rental projects Not later than 6 months after the date of enactment of this Act, the Secretary of Agriculture (in this section referred to as the Secretary) shall submit to Congress a written plan for preserving the affordability for low-income families of rental projects for which loans were made under section 514 or 515 of the Housing Act of 1949 (42 U.S.C. 1484, 1485) and avoiding the displacement of tenant households, which shall— set forth specific performance goals and measures; set forth the specific actions and mechanisms by which those goals will be achieved; set forth specific measurements by which progress towards achievement of each goal can be measured; provide for detailed reporting on outcomes; and include any legislative recommendations to assist in achievement of the goals under the plan. The Secretary shall establish an advisory committee (in this section referred to as the advisory committee) to assist the Secretary in— preserving properties assisted under section 514 or 515 of the Housing Act of 1949 (42 U.S.C. 1484, 1485) through the multifamily housing preservation and revitalization program under section 545 of such Act, as added by section 2 of this Act; and implementing the plan required under subsection (a). The advisory committee shall consist of 16 members, appointed by the Secretary, as follows: A State Director of Rural Development for the Department of Agriculture. The Administrator for Rural Housing Service of the Department of Agriculture. Two representatives of for-profit developers or owners of multifamily rural rental housing. Two representatives of nonprofit developers or owners of multifamily rural rental housing. Two representatives of State housing finance agencies. Two representatives of tenants of multifamily rural rental housing. One representative of a community development financial institution that is involved in preserving the affordability of housing assisted under sections 514, 515, and 516 of the Housing Act of 1949 (42 U.S.C. 1484, 1485, 1486). One representative of a nonprofit organization that operates nationally and has actively participated in the preservation of housing assisted by the Rural Housing Service by conducting research regarding, and providing financing and technical assistance for, preserving the affordability of that housing. One representative of low-income housing tax credit investors. One representative of regulated financial institutions that finance affordable multifamily rural rental housing developments. Two representatives from nonprofit organizations representing farmworkers, including 1 organization representing farmworker women. The advisory committee shall meet not less often than once each calendar quarter. In providing assistance to the Secretary to carry out the purpose of the advisory committee, the advisory committee shall carry out the following functions: Assisting the Rural Housing Service of the Department of Agriculture to improve estimates of the size, scope, and condition of rental housing portfolio of the Rural Housing Service, including the time frames for maturity of mortgages and costs for preserving the portfolio as affordable housing. Reviewing policies and procedures of the Rural Housing Service regarding preservation of affordable rental housing financed under sections 514, 515, 516, and 538 of the Housing Act of 1949 (42 U.S.C. 1484, 1485, 1486, 1490p–2), the Multifamily Preservation and Revitalization Demonstration program, and the rental assistance program and making recommendations regarding improvements and modifications to those policies and procedures. Providing ongoing review of Rural Housing Service program results. Providing reports to Congress and the public on meetings, recommendations, and other findings of the advisory committee. Any amounts made available for administrative costs of the Department of Agriculture may be used for costs of travel by members of the advisory committee to meetings of the advisory committee.