Short title

This Act may be cited as the

Rural Housing Preservation Act of 2016

Availability of rural housing vouchers for tenants in projects with maturing loans

(a)

In general

Section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) is amended by adding at the end the following:

(c)

Rural vouchers for tenants of projects with prepaid or maturing loans

(1)

Authority

Subject to the availability of amounts provided in appropriation Acts and to paragraph (3), the Secretary shall provide rural housing vouchers under this section, in the amount provided under this section, to any low-income household (including those not receiving rental assistance) residing in a property financed with a loan made or insured under section 515 that has been prepaid or has matured after September 30, 2005. (2)

Administration and subsidies

The Secretary shall, to the maximum extent practicable, administer and operate such vouchers with current regulations and administrative guidance applicable to enhanced vouchers under section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)) and administered by the Secretary of Housing and Urban Development. The amount of rental assistance provided on behalf of holders of such vouchers shall be the same as that provided on behalf of holders of enhanced vouchers under such section 8(t). (3)

Termination of assistance

The Secretary shall terminate the provision of voucher assistance pursuant to this subsection, with respect to a property, if— (A)at any time, a new loan is made or insured under section 515 for the property; and (B)as a result of such loan, rental assistance is provided on behalf of the voucher holder in an amount comparable to the rental assistance provided on behalf of the voucher holder under the voucher program.

(b)

Requirement for section 515 projects To accept vouchers

Section 515 of the Housing Act of 1949 (42 U.S.C. 1485) is amended by adding at the end the following:

(bb)

Requirement To accept rural housing vouchers

No owner of a property financed with a loan made or insured under this section, whether such loan is outstanding or fully paid, may refuse to lease an available dwelling unit in the property to a household on behalf of whom voucher assistance is provided under section 542, and to enter into a voucher contract respecting such unit, a proximate cause of which is the status of such current or prospective tenant as a holder of such voucher.

Decoupling rental assistance from maturing rural housing loans

Section 521(a)(2) of the Housing Act of 1949 (42 U.S.C. 1490a(a)(2)) is amended by adding at the end the following:

(F)

Rental assistance for projects with matured loans

(i)

Authority

To continue to make decent, safe and sanitary housing available to low-income occupants of projects originally financed with a loan made or insured under section 515 that has matured on or after the date of enactment of this subparagraph, and at rental rates commensurate to income as specified in subparagraph (A) of this paragraph, the Secretary may, subject to the availability of amounts provided in appropriation Acts, contract to make and renew annual assistance payments pursuant to this subparagraph to the owners of such projects. (ii)

Offer

The Secretary shall ensure that an offer to provide a contract for assistance payments pursuant to this subparagraph shall be extended to all owners of projects described in clause (i) not later than 24 months before the maturation of the loan (except in the case of loans maturing after the date that is 24 months before the date of enactment of this subparagraph). (iii)

Terms

Each contract for assistance payments pursuant to this subparagraph shall— (I)have a term of 20 years and be subject to availability of amounts provided in annual appropriations Acts; (II)cover all new and existing households residing in the project, regardless of whether or not they were previously assisted under the rental assistance program authorized under subparagraph (A); (III)be recorded at such local real property recording office as is prescribed by the State in which the project is located; (IV)bind the owner of the project and the owner’s successors to continue to operate the project in accordance with such agreements; (V)require the owner (and such successors) to agree to continue to operate the projects as if it were subject to an existing loan under section 515; (VI)extend to residents of the project all the rights that at the time such contract is entered into are extended to residents of projects subject to an existing loan under section 515; and (VII)require the owner (and such successors) to maintain the assisted housing as decent, safe, and sanitary housing. (iv)

Actual market rentals

(I)

In general

A contract for assistance provided pursuant to this subparagraph for a project shall provide assistance to the owner based on an initial reasonable operating budget the rents for which do not exceed such actual market rental rates for the area in which the project is located, as are established by the Secretary. (II)

Adjustment; renewal

The Secretary shall annually adjust the actual market rental rates used for purposes of this clause. (v)

Renewal; adjustment

In providing assistance pursuant to this subparagraph, the Secretary shall require the owner of the project to renew the assistance provided to each household not less frequently than annually, in accordance with the provisions of subparagraph (A), and shall adjust the amount of assistance provided to a household at any other time upon a decrease in the household’s monthly income of $100 or more. (vi)

Administration

Rental assistance contracts authorized by this subparagraph shall, except as otherwise provided in this subparagraph, be administered by the Secretary in the same manner as rental assistance contracts for projects having existing loans made or insured under section 515 or existing loans and grants made under sections 514 and 516.

Uniform standards for transfers of section 515 properties using low-income tax credits

Section 515 of the Housing Act of 1949 (42 U.S.C. 1485), as amended by this Act, is amended by adding at the end the following:

(cc)

Requirements for transfers of properties involving low-Income housing tax credits

The Secretary shall establish, without exception, uniform requirements, terms, and conditions for any sale or transfer of a property financed with a loan under this section to any entity, including a nonprofit organization, that is seeking to acquire such property with amounts authorized under this section and any low-income housing tax credit under section 42 of the Internal Revenue Code of 1986.

Rural multifamily housing revitalization program

Section 515 of the Housing Act of 1949 (42 U.S.C. 1485), as amended by this Act, is amended by adding at the end the following:

(dd)

Multifamily housing revitalization program

(1)

In general

The Secretary may establish a Multifamily Housing Revitalization Program for the preservation and revitalization of multifamily housing projects funded with loans made available pursuant to this section and sections 514 and 516 to ensure that such projects have sufficient resources to provide safe and affordable housing for low-income residents and farm laborers. (2)

Options

In carrying out paragraph (1), the Secretary may— (A)with respect such loans— (i)reduce or eliminate interest; (ii)defer loan payments; and (iii)subordinate, reduce, or reamortize loan debt; and (B)provide other financial assistance, including— (i)advances; and (ii)payments and incentives (including the ability of owners to obtain reasonable returns on investment). (3)

Requirements

In exchange for assistance provided pursuant to this subsection, the Secretary shall enter into with the property owner a restrictive use agreement to ensure that the property remains subject to low-income use restrictions for an additional period of time consistent with the terms of the restructuring. (4)

Use of funds for rural housing vouchers

(A)

Authority

If the Secretary determines that additional funds for vouchers under the rural housing voucher program under section 542 are needed, funds for the revitalization program under this subsection may be used for such vouchers for any low-income household (including those not receiving rental assistance) residing in a property financed with a loan under this section that has been prepaid after September 30, 2005. (B)

Amount

Notwithstanding section 542, the amount of a voucher provided pursuant to this paragraph shall be the difference between comparable market rent for the unit and the tenant-paid rent for such unit. (C)

Availability

Funds made available for vouchers pursuant to this paragraph shall be subject to the availability of annual appropriations. (D)

Administration

The Secretary shall, to the maximum extent practicable, administer vouchers provided pursuant to this paragraph with current regulations and administrative guidance applicable to housing vouchers under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) administered by the Secretary of Housing and Urban Development.

Regulations

Not later than 120 days after the date of enactment of this Act, the Secretary of Agriculture shall issue regulations necessary to carry out the amendments made by this Act.