Short title; table of contents

(a)

Short Title

This Act may be cited as the

Mark-to-Market Extension and Enhancement Act of 2007

. (b)

Table of Contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Purposes.

Sec. 3. Definitions.

Sec. 4. Extension of Mark-to-Market program.

Sec. 5. Funding for tenant and other participation and capacity building.

Sec. 6. Exception rents.

Sec. 7. Otherwise eligible projects.

Sec. 8. Disaster-damaged eligible projects.

Sec. 9. Period of eligibility for nonprofit debt relief.

Sec. 10. Acquisition of restructured projects by nonprofit organizations.

Sec. 11. Mark-to-market for moderate rehabilitation projects.

Sec. 12. Enhanced voucher assistance upon contract termination.

Sec. 13. Correcting harm caused by late subsidy payments.

Sec. 14. Effective date.

Purposes

The purpose of this Act is to— (1)continue the progress of the Multifamily Assisted Housing Reform and Affordability Act of 1997, as amended by the Mark-To-Market Extension Act of 2001; (2)expand eligibility for Mark-to-Market restructuring so as to further the preservation of affordable housing in a cost-effective manner; and (3)provide for the preservation and rehabilitation of projects damaged by Hurricanes Katrina, Rita, and Wilma, or by other natural disasters.

Definitions

Section 512 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following:

(20)

Disaster-damaged eligible project

(A)

In general

The term disaster-damaged eligible project means an otherwise eligible multifamily housing project— (i)that is located in a county that was designated a major disaster area on or after January 1, 2005, by the President pursuant to title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.); (ii)whose owner carried casualty and liability insurance covering such project in an amount required by the Secretary; (iii)that suffered damages not covered by such insurance that the Secretary determines is likely to exceed $5,000 per unit in connection with the natural disaster that was the subject of the designation described in subparagraph (A); and (iv)whose owner requests restructuring of the project not later than 2 years after the date that such damage occurred. (B)

Rule of construction

A disaster-damaged eligible project shall be eligible for amounts under this Act without regard to the relationship between rent levels for the assisted units in such project and comparable rents for the relevant market area.

Extension of Mark-to-Market program

Section 579 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by striking October 1, 2011 each place such term appears and inserting October 1, 2012.

Funding for tenant and other participation and capacity building

Paragraph (3) of section 514(f) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended— (1)in subparagraph (A)— (A)in the first sentence— (i)by striking not more than and inserting not less than; (ii)by striking of low-income housing for which project-based rental assistance is provided at below market rent levels and may not be renewed and inserting the following: and improvement of low-income housing for which project-based rental assistance, subsidized loans, or enhanced vouchers under section 8(t) are provided; and (iii)in the second parenthetical clause, by inserting before the closing parenthesis the following: , and predevelopment assistance to enable such transfers; and (B)by inserting after the period at the end the following: For outreach and training of tenants and technical assistance, the Secretary shall implement a grant program utilizing performance-based outcome measures for eligible costs incurred. Recipients providing capacity building or technical assistance services to tenant groups shall be qualified nonprofit Statewide, countywide, areawide or citywide organizations with demonstrated experience including at least a two-year recent track record of organizing and providing assistance to tenants, and independence from the owner, a prospective purchaser, or their managing agents. The Secretary may provide assistance and training to grantees in administrative and fiscal management to ensure compliance with applicable Federal requirements. The Secretary shall expedite the provision of funding for fiscal year 2008 by entering into new multi-year contracts with any prior grantee without adverse audit findings or whose adverse audit findings have been cleared, and by entering into an interagency agreement for not less than $1,000,000 with the Corporation for National and Community Service or any other agency of the Federal Government, that is selected by the Secretary and the Secretary determines is qualified to conduct such program, to conduct a tenant outreach and training program under the same or similar terms and conditions as was most recently conducted by the Corporation. The Secretary shall also make available flexible grants to qualified nonprofit organizations that do not own eligible multifamily properties, for tenant outreach in underserved areas, and to experienced national or regional nonprofit organizations to provide specialized training or support to grantees assisted under this section. Notwithstanding any other provision of law, funds authorized under this section for any fiscal year shall be available for obligation in subsequent fiscal years. The Secretary shall require each recipient of amounts made available pursuant to this subparagraph to submit to the Secretary reports, on a quarterly basis, detailing the use of such funds and including such information as the Secretary shall require.; and (2)by adding at the end the following new subparagraphs:

(D)

Prohibitions

None of the funds made available under subparagraph (A) may be used for any political activities, political advocacy, or lobbying (as such terms are defined by Circular A–122 of the Office of Management and Budget, entitled Cost Principles for Non-Profit Organizations), or for expenses for travel to engage in political activities or preparation of or provision of advice on tax returns. (E)

Program compliance systems

Each recipient of amounts made available under subparagraph (A) shall develop systems to ensure compliance with the program and the requirements of this paragraph. (F)

Penalties

The Secretary may impose penalties on any recipient of amounts made available under subparagraph (A) that fails to comply with any requirement under this paragraph or of the program established pursuant to this paragraph, which penalties may include— (i)ineligibility for further assistance from amounts made available under subparagraph (A); and (ii)requiring the recipient to reimburse the Secretary for any amounts that were so misused.

Exception rents

In the matter preceding clause (i) of section 514(g)(2)(A) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended— (1)by inserting disaster-damaged eligible projects and after waive this limit for; and (2)by striking five percent and inserting 9 percent.

Otherwise eligible projects

Section 514 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following:

(i)

Other Eligible Projects

(1)

In general

Notwithstanding any other provision of this subtitle, a project that meets the requirements of subparagraphs (B) and (C) of section 512(2) but does not meet the requirements of subparagraph (A) of section 512(2), may be treated as an eligible multifamily housing project on an exception basis if the Secretary determines, subject to paragraph (2), that such treatment is necessary to preserve the project in the most cost-effective manner in relation to other alternative preservation options. (2)

Owner request

(A)

Request required

The Secretary shall not treat an otherwise eligible project described under paragraph (1) as an eligible multifamily housing project unless the owner of the project requests such treatment. (B)

No adverse treatment if no request made

If the owner of a project does not make a request under subparagraph (A), the Secretary shall not withhold from such project any other available preservation option. (3)

Cancellation

(A)

Timing

At any time prior to the completion of a mortgage restructuring under this subtitle, the owner of a project may— (i)withdraw any request made under paragraph (2)(A); and (ii)pursue any other option with respect to the renewal of such owner’s section 8 contract pursuant to any applicable statute or regulation. (B)

Documentation

If an owner of a project withdraws such owner’s request and pursues other renewal options under this paragraph, such owner shall be entitled to submit documentation or other information to replace the documentation or other information used during processing for mortgage restructuring under this subtitle. (4)

Limitation

The Secretary may exercise the authority to treat projects as eligible multifamily housing projects pursuant to this subsection only to the extent that the number of units in such projects do not exceed 10 percent of all units for which mortgage restructuring pursuant to section 517 is completed.

Disaster-damaged eligible projects

(a)

Market Rent Determinations

Section 514(g)(1)(B) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by striking “determined, are equal” and inserting the following: “determined—

(i)with respect to a disaster-damaged eligible property, are equal to 100 percent of the fair market rents for the relevant market area (as such rents were in effect at the time of such disaster); and (ii)with respect to other eligible multifamily housing projects, are equal

(b)

Owner Investment

Section 517(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following:

(3)

Properties damaged by natural disasters

With respect to a disaster-damaged eligible property, the owner contribution toward rehabilitation needs shall be determined in accordance with paragraph (2)(C).

Period of eligibility for nonprofit debt relief

Section 517(a)(5) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding at the end the following: “If such purchaser acquires such project subsequent to the date of recordation of the affordability agreement described in section 514(e)(6)—

(A)such purchaser shall acquire such project on or before the later of— (i)5 years after the date of recordation of the affordability agreement; or (ii)2 years after the date of enactment of the Mark-to-Market Extension and Enhancement Act of 2007; and (B)the Secretary shall have received, and determined acceptable, such purchaser’s application for modification, assignment, or forgiveness prior to the acquisition of the project by such purchaser.

10.

Acquisition of restructured projects by nonprofit organizations

Paragraph (5) of section 517(a) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437 note) is amended by inserting , or the sole general partner of the limited partnership owning the project, after if the project.

11.

Mark-to-market for moderate rehabilitation projects

(a)

Renewal of expiring project-based section 8 moderate rehabilitation contracts

Section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is amended— (1)in subsection (a)(4)(A)(iv)— (A)in subclause (I), by inserting or after the semicolon; (B)by striking subclause (II); and (C)by redesignating subclause (III) as subclause (II); and (2)in subsection (b), by striking paragraph (3). (b)

Rent adjustments for covered projects

(1)

Rent determination at initial renewal after enactment

Upon the first request by an owner of a covered housing project for renewal of project-based assistance pursuant to section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 made after the date of the enactment of this Act— (A)the rent levels at which assistance will be provided pursuant to such renewal shall be determined as if such renewal were the initial renewal of a contract for assistance under section 524, as amended by subsection (a) of this section; and (B)solely for purposes of determining the rent levels at which assistance will be provided pursuant to such first renewal after the date of the enactment of this Act, in the case of a project for which contract rents were reduced upon a prior renewal of an expiring contract pursuant to subsection (b)(3) of section 524, as in effect on the day before the date of the enactment of this Act, the contract rent levels in effect immediately prior to such first renewal after the date of the enactment of this Act shall be the considered to be the deemed rent levels described in paragraph (3)(C). (2)

Rent adjustments after initial renewal after enactment

After the first renewal of a contract for assistance of a covered housing project after the date of the enactment of this Act in accordance with paragraph (1) of this subsection, the Secretary of Housing and Urban Development shall adjust rents in accordance with subsection (c) of section 524. (3)

Definitions

For purposes of this subsection, the following definitions shall apply: (A)The term section 524 means section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note). (B)The term covered housing project means a project that receives project-based assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) which was renewed prior to the date of the enactment of this Act pursuant to subsection (b)(3) of section 524, as in effect on the day before the date of the enactment of this Act. (C)The term deemed rent levels means the contract rent levels in effect immediately prior to the first renewal of assistance pursuant to subsection (b)(3) of section 524, as in effect on the day before the date of the enactment of this Act, upon which contract rent levels were reduced, as adjusted by the applicable operating cost adjustment factor established by the Secretary at the date of such renewal and at the date of any subsequent renewal pursuant to such subsection (b)(3). (D)The term Secretary means the Secretary of Housing and Urban Development or any public housing agency approved by the Secretary to serve as the contracting party in lieu of the Secretary.

12.

Enhanced voucher assistance upon contract termination

Subsection (d) of section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437 note) is amended— (1)in the subsection heading, by inserting

or termination

after

contract expiration

; and (2)in paragraph (1)— (A)by inserting or termination after the date of the expiration; (B)by striking shall make and inserting shall provide; (C)by striking available on behalf of and inserting for; and (D)by inserting or termination after the date of such expiration.

13.

Correcting harm caused by late subsidy payments

Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) is amended by adding at the end the following new subsection:

(ff)

Late payments

(1)

General

The Secretary shall make payments of project-based rental assistance provided under this section for each month on or before the due date under paragraph (2) for the payment. (2)

Due date

The due date under this paragraph for a monthly payment is the first business day of the month. (3)

Notification of late payment

The Secretary shall notify a project owner at least 10 days before the due date for a housing assistance payment if such payment will be late and shall inform the project owner of the approximate date the payment will be made. (4)

Use of reserves

If a housing assistance payment for a project has not been received before the expiration of the 10-day period beginning upon the due date for such payment, the project owner shall, after the expiration of such period, be entitled to obtain funds from a project replacement reserve, residual receipts reserve, or other project reserve in order to pay operating and debt service costs for the project. Upon receipt of the monthly housing assistance payment from the Secretary, the project owner shall promptly replace or replenish any such funds advanced pursuant to the preceding sentence. (5)

Interest payment

If a monthly housing assistance payment is not made before the expiration of the 30-day period beginning upon the due date for such payment, the Secretary shall pay to the owner simple interest on the amount of such monthly payment, from the due date until the date of payment, at a rate determined by the Secretary of Treasury in accordance with section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611). Interest payments under this paragraph shall be made from amounts made available for management and administration of the Department of Housing and Urban Development.

14.

Effective date

This Act, and the amendments made by this Act, shall take effect on the earlier of— (1)the date of enactment of this Act; or (2)September 30, 2008.