[Congressional Record Volume 147, Number 106 (Thursday, July 26, 2001)]
[Senate]
[Page S8284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SARBANES (for himself, Mr. Reed, and Mr. Allard):
  S. 1254. A bill to reauthorize the Multifamily Assisted Housing 
Reform and Affordability Act of 1997, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. SARBANES. Mr. President, today I am introducing the Mark-to-
Market Extension Act of 2001 with my colleagues Senator Reed and 
Senator Allard, the chair and ranking member of the Housing and 
Transportation Subcommittee of the Banking, Housing, and Urban Affairs 
Committee. This legislation will extend the Multifamily Assisted 
Housing Restructuring and Affordability Act of 1997, MAHRAA, for an 
additional five years.
  The legislation will ensure that HUD continues to have the authority 
to restructure the rents and the mortgages of its FHA-insured section 8 
project-based portfolio. These properties have been operating for the 
past 20 years on long term rental subsidy contracts, many of which are 
currently paying above-market rents. The program we seek to reauthorize 
provides HUD with the tools to reduce those rents to market levels and 
restructure the underlying mortgages so that the new, lower rents will 
be sufficient to cover the debt. At the same time, the program provides 
for the rehabilitation of these projects, and requires another long 
term commitment to keep the properties affordable.
  This program expires in September. Both HUD and the General 
Accounting Office believe the program should be reauthorized in order 
to continue the progress in getting these projects restructured, 
rehabilitated, and on a sound footing for the taxpayer, for the owner, 
and for the resident.
  In a hearing on this program held on June 19, we heard from all the 
stakeholders, HUD, and the GAO. We have adopted many of the 
recommendations heard at that hearing in this legislation. Some of the 
changes we have included should further reduce the costs of the program 
to the federal government, while simultaneously allowing for more 
extensive rehabilitation and more economic certainty for property 
owners. The bill also extends the authorization for funding for 
tenants, non-profits, and public agencies that participate in the 
restructuring process.
  I ask unanimous consent that a section by section analysis be printed 
in the Record.
  There being no objection, the materials was ordered to be printed in 
the Record, as follows:

     Section-by-Section of the Mark-to-Market Extension Act of 2001

       This legislation reauthorizes the ``Multifamily Assisted 
     Housing Reform and Affordability Act of 1997'' (MAHRAA) with 
     some amendments.
       Section 1--Short Title.
       Section 2--Purposes.
       Section 3--Definitions.
       Section 4--Provides for reauthorization of grants for 
     tenant services, non-profits, and public entities engaged in 
     the restructuring process; readjustment of calculation of 
     properties eligible for exception rents; use of enhanced 
     vouchers; notice regarding rejection of restructuring plan; 
     voluntary participation of Preservation projects in mortgage 
     restructuring upon sale or transfer of property; discretion 
     for the Secretary in requiring owner contributions for new 
     features in addition to basic rehabilitation; establish 
     consistent rent standard; provide for GAO reports on physical 
     and financial condition of the property and HUD's oversight; 
     and, allow for resizing of second mortgages.
       Section 5--Provides for consistent rent standard for 
     projects undergoing restructuring, and for tenant-based 
     vouchers.
       Section 6--Provides for HUD-held mortgages to go through 
     FHA's streamlined refinance process established by section 
     237(a)(7) of the National Housing Act; provides for the term 
     of such loans to be up to 30 years.
       Section 7--Technical correction to renumber a section of 
     the law.
       Section 8--Eliminate the requirement that the Director of 
     the Office of Multifamily Housing Assistance Restructuring, 
     OMHAR, be confirmed by the Senate; make the Director report 
     to the FHA Commissioner; extend the program and Office for 5 
     years; and make the limitation on subsequent employment 1 
     year, consistent with Congressional rules.
                                 ______