[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[Senate]
[Page S12050]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         REFINANCING BOND FINANCED SECTION 8 HOUSING PROPERTIES

 Mr. MACK. Mr. President, I rise to address a matter regarding 
the refinancing of section 8 assisted properties whose bonds are 
financed with a financial adjustment factor [FAF]. In order to save 
section 8 housing assistance payment funds, the Congress through the 
enactment of the McKinney Homeless Assistance Act encouraged owners of 
FAF properties to refund their bonds with lower interest rates. The 
recaptured section 8 savings were equally shared between the bond 
issuing housing agency and HUD and the housing agencies were required 
to use their share of the savings for affordable housing purposes. In 
the recently enacted VA, HUD appropriations legislation, a provision 
was included to encourage owners to refinance their properties by 
providing the owners a 15-percent share of the savings.
  It has come to my attention that there may be some question as to 
whether the fiscal year 1998 VA, HUD appropriations act would allow an 
owner or an issuer to refinance a FAF property which was previously 
refinanced. We reviewed this matter while developing the amendments to 
this version of S. 562. However, upon review of the appropriations 
language, it appears unnecessary to include statutory language to 
clarify this matter. I would like to ask Senator Bond, the chairman of 
the VA, HUD Appropriations Subcommittee, if he could confirm my 
interpretation of this issue.
  Mr. BOND. I thank the Senator for raising this issue. It is the 
intent of the appropriations legislation to allow a second refinancing 
to save section 8 funds. I am hopeful that owners working in 
cooperation with the bond issuers will voluntarily refinance their FAF 
properties, where existing laws and bond documents permit. Owners and 
bond issuers will hopefully take advantage of the historically low 
interest rates and refinance their properties.
  Mr. MACK. I thank my colleague for his assistance in this 
matter.

                          ____________________