12 USC 1701s

Section 1701s. Rent supplement payments for qualified lower income families

(a) Authorization; maximum term; maximum aggregate amount

The Secretary of Housing and Urban Development (hereinafter

referred to as the ''Secretary'') is authorized to make, and

contract to make, annual payments to a ''housing owner'' on behalf

of ''qualified tenants'', as those terms are defined herein, in

such amounts and under such circumstances as are prescribed in or

pursuant to this section. In no case shall a contract provide for

such payments with respect to any housing for a period exceeding

forty years. The aggregate amount of the contracts to make such

payments shall not exceed amounts approved in appropriation Acts,

and payments pursuant to such contracts shall not exceed

$150,000,000 per annum prior to July 1, 1969, which maximum dollar

amount shall be increased by $40,000,000, on July 1, 1969, by

$100,000,000 on July 1, 1970, and by $40,000,000 on July 1, 1971.

(b) ''Housing owner'' defined; limitation on payments to housing

owner

As used in this section, the term ''housing owner'' means a

private nonprofit corporation or other private nonprofit legal

entity, a limited dividend corporation or other limited dividend

legal entity, or a cooperative housing corporation, which is a

mortgagor under section 221(d)(3) of the National Housing Act (12

U.S.C. 1715l(d)(3)) and which, after August 10, 1965, has been

approved for mortgage insurance thereunder and has been approved

for receiving the benefits of this section: Provided, That, except

as provided in subsection (j) of this section, no payments under

this section may be made with respect to any property financed with

a mortgage receiving the benefits of the interest rate provided for

in the proviso in section 221(d)(5) of that Act (12 U.S.C.

1715l(d)(5)). Such term also includes a private nonprofit

corporation or other private nonprofit legal entity, a limited

dividend corporation or other limited dividend legal entity, or a

cooperative housing corporation, which is the owner of a rental or

cooperative housing project financed under a State or local program

providing assistance through loans, loan insurance, or tax

abatement and which may involve either new or existing construction

and which is approved for receiving the benefits of this section.

Subject to the limitations provided in subsection (j) of this

section, the term ''housing owner'' also has the meaning prescribed

in such subsection. Nothing in this section shall be construed as

preventing payments to a housing owner with respect to projects in

which all or part of the dwelling units do not contain kitchen

facilities; but of the total amount of contracts to make annual

payments approved in appropriation Acts pursuant to subsection (a)

of this section after December 31, 1970, not more than 10 per

centum in the aggregate shall be made with respect to such

projects.

(c) Definitions

As used in this section, the term -

(1) ''qualified tenant'' means any individual or family having

an income which would qualify such individual or family for

assistance under section 1437f of title 42, except that such term

shall also include any individual or family who was receiving

assistance under this section on the day preceding December 21,

1979, so long as such individual or family continues to meet the

conditions for such assistance which were in effect on such day;

and

(2) ''income'' means income from all sources of each member of

the household, as determined in accordance with criteria

prescribed by the Secretary. In determining amounts to be

excluded from income, the Secretary may, in the Secretary's

discretion, take into account the number of minor children in the

household and such other factors as the Secretary may determine

are appropriate.

The terms ''qualified tenant'' and ''tenant'' include a member of a

cooperative who satisfies the foregoing requirements and who, upon

resale of his membership to the cooperative, will not be reimbursed

for any equity increment accumulated through payments under this

section. With respect to members of a cooperative, the terms

''rental'' and ''rental charges'' mean the charges under the

occupancy agreements between such members and the cooperative.

(d) Annual payment amount

The amount of the annual payment with respect to any dwelling

unit shall be the lesser of (1) 70 per centum of the fair market

rent, or (2) the amount by which the fair market rental for such

unit exceeds 30 per centum of the tenant's adjusted income.

(e) Criteria and procedure for determining eligibility and rental

charges; recertification of income; agreements for services

required in selection of tenants; delegation of authority to

issue certificates

(1) For purposes of carrying out the provisions of this section,

the Secretary shall establish criteria and procedures for

determining the eligibility of occupants and rental charges,

including criteria and procedures with respect to periodic review

of tenant incomes and periodic adjustment of rental charges.

(2) Procedures adopted by the Secretary hereunder shall provide

for recertifications of the incomes of occupants no less frequently

than annually for the purpose of adjusting rental charges and

annual payments on the basis of occupants' incomes, but in no event

shall rental charges adjusted under this section for any dwelling

exceed the fair market rental of the dwelling.

(3) The Secretary may enter into agreements, or authorize housing

owners to enter into agreements, with public or private agencies

for services required in the selection of qualified tenants,

including those who may be approved, on the basis of the

probability of future increases in their incomes, as lessees under

an option to purchase (which will give such approved qualified

tenants an exclusive right to purchase at a price established or

determined as provided in the option) dwellings, and in the

establishment of rentals. The Secretary is authorized (without

limiting his authority under any other provision of law) to

delegate to any such public or private agency his authority to

issue certificates pursuant to this subsection.

(4) No payments under this section may be made with respect to

any property for which the costs of operation (including wages and

salaries) are determined by the Secretary to be greater than

similar costs of operation of similar housing in the community

where the property is situated.

(f) Omitted

(g) Authority of Secretary

The Secretary is authorized to make such rules and regulations,

to enter into such agreements, and to adopt such procedures as he

may deem necessary or desirable to carry out the provisions of this

section. Nothing contained in this section shall affect the

authority of the Secretary of Housing and Urban Development with

respect to any housing assisted under this section, section

221(d)(3), section 231(c)(3), or section 236 of the National

Housing Act (12 U.S.C. 1715l(d)(3), 1715v(c)(3), 1715z-1), or

section 1701q of this title, including the authority to prescribe

occupancy requirements under other provisions of law or to

determine the portion of such housing which may be occupied by

qualified tenants. To ensure that qualified tenants occupying that

number of units with respect to which assistance was being provided

under this section immediately prior to November 30, 1983, receive

the benefit of assistance contracted for under this section, the

Secretary shall offer annually to amend contracts entered into with

owners of projects assisted under this section but not subject to

mortgages insured under title II of the National Housing Act (12

U.S.C. 1707 et seq.) to provide sufficient payments to cover 100

percent of the necessary rent increases and changes in the incomes

of qualified tenants, subject to the availability of authority for

such purpose under section 1437c(c) of title 42. The Secretary

shall take such actions as may be necessary to ensure that

payments, including payments that reflect necessary rent increases

and changes in the incomes of tenants, are made on a timely basis

for all units covered by contracts entered into under this section.

(h) Authorization of appropriations

There are authorized to be appropriated such sums as may be

necessary to carry out the provisions of this section, including,

but not limited to, such sums as may be necessary to make annual

payments as prescribed in this section, pay for services provided

under (or pursuant to agreements entered into under) subsection (e)

of this section, and provide administrative expenses.

(i) Omitted

(j) Additional definition of housing owner; restrictions on

payments

(1) For the purpose of assisting housing under this section on an

experimental basis, subject to the limitations of this subsection,

the term ''housing owner'' (in addition to the meaning prescribed

in subsection (b) of this section) includes -

(A) a private nonprofit corporation or other private nonprofit

legal entity, a limited dividend corporation or other limited

dividend legal entity, or a cooperative housing corporation,

which is a mortgagor under a mortgage which receives the benefits

of the interest rate provided for in the proviso in section

221(d)(5) of the National Housing Act (12 U.S.C. 1715l(d)(5)) and

which, after August 10, 1965, has been approved for mortgage

insurance under section 221(d)(3) of the National Housing Act and

has been approved for receiving the benefits of this section;

(B) a private nonprofit corporation or other private nonprofit

legal entity which is a mortgagor under a mortgage insured under

section 231(c)(3) of the National Housing Act (12 U.S.C.

1715v(c)(3)) and which, after August 10, 1965, has obtained final

endorsement of such mortgage for mortgage insurance and has been

approved for receiving the benefits of this section;

(C) a private nonprofit corporation, a public body or agency,

or a cooperative housing corporation, which is a borrower under

section 1701q of this title and has been approved for receiving

the benefits of this section: Provided, That, with respect to

properties financed with loans under such section made on or

before August 10, 1965, payments shall not be made with respect

to more than 20 per centum of the dwelling units in any property

so financed; and

(D) a private nonprofit corporation or other private nonprofit

legal entity, a limited dividend corporation or other limited

dividend legal entity, or a cooperative housing corporation,

which is assisted under section 236 of the National Housing Act

(12 U.S.C. 1715z-1) and which has been approved for receiving the

benefits of this section: Provided, That payments shall not be

made with respect to more than 20 per centum of the dwelling

units in any property so financed, except that the foregoing

limitation may be increased to 40 per centum of the dwelling

units in any such property if the Secretary determines that such

increase is necessary and desirable in order to provide

additional housing for individuals and families meeting the

requirements of subsection (c) of this section.

(2) Of the amounts approved in appropriation Acts pursuant to

subsection (a) of this section for payments under this section in

any year, not more than 5 per centum in the aggregate shall be paid

with respect to properties of housing owners as defined in

paragraph (1)(A) of this subsection, and not more than 5 per centum

in the aggregate shall be paid with respect to properties of

housing owners as defined in paragraphs (1)(B) and (1)(C) of this

subsection.

(k) Repealed. Pub. L. 105-276, title V, Sec. 514(d), Oct. 21, 1998,

112 Stat. 2548

(l) Additional available assistance authority

Notwithstanding the provisions of subsection (a) of this section

and any other provision of law, the Secretary may utilize

additional authority under section 1437c(c) of title 42 made

available by appropriation Acts on or after October 1, 1979, to

supplement assistance authority available under this section. The

Secretary shall utilize, to the extent necessary after September

30, 1984, any authority under this section that is recaptured

either as the result of the conversion of housing projects covered

by assistance under this section to contracts for assistance under

section 1437f of title 42 or otherwise (1) for the purpose of

making assistance payments, including amendments as provided in

subsection (g) of this section, with respect to housing projects

assisted under this section, but not subject to mortgages insured

under the National Housing Act (12 U.S.C. 1701 et seq.), that

remain covered by assistance under this section; and (2) if not

required to provide assistance under this section, and

notwithstanding any other provision of law, for the purpose of

contracting for assistance payments under section 236(f)(2) of the

National Housing Act (12 U.S.C. 1715z-1(f)(2)).

(m) Payments for benefit of certain projects having mortgages made

by State or local housing finance or government agencies

The Secretary shall, not later than 45 days after receipt of an

application by the mortgagee, provide interest reduction and rental

assistance payments for the benefit of projects assisted under this

section whose mortgages were made by State or local housing finance

agencies or State or local government agencies for a term equal to

the remaining mortgage term to maturity on projects assisted under

this section to the extent of -

(1) unexpended balances of amounts of authority as set forth in

certain letter agreements between the Department of Housing and

Urban Development and such State or local housing finance

agencies or State or local government agencies, and

(2) existing allocation under section 236 contracts on projects

whose mortgages were made by State or local housing finance

agencies or State or local government agencies which are not

being funded, to the extent of such excess allocation, for any

purposes permitted under the provisions of this section.

An application shall be eligible for assistance under the previous

sentence only if the mortgagee submits the application within 548

days after February 5, 1988, along with a certification of the

mortgagee that amounts are to be utilized hereunder for the purpose

of either (A) reducing rents or rent increases to tenants, or (B)

making repairs or otherwise increasing the economic viability of a

related project. Unexpended balances referred to in the first

sentence of this subsection which remain after disposition of all

such applications is favorably concluded shall be rescinded. The

authority conferred by this subsection to provide interest

reduction and rental assistance payments shall be available only to

the extent approved in appropriation Acts.