[Federal Register Volume 59, Number 201 (Wednesday, October 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25072]


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[Federal Register: October 19, 1994]


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RESOLUTION TRUST CORPORATION

12 CFR Part 1609

RIN 3205-AA03

 

Affordable Housing Disposition Program

AGENCY: Resolution Trust Corporation.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Resolution Trust Corporation (RTC) is amending the 
existing regulations governing its Affordable Housing Disposition 
Program (AHDP). The amendments set forth in this interim final rule are 
necessary because the Resolution Trust Corporation Refinancing, 
Restructuring and Improvement Act of 1991 (Refinancing Act), the 
Departments of Veterans Affairs, Housing and Urban Development and 
Independent Agencies Appropriations Act of 1992 (1992 Appropriations 
Act), the Housing and Community Development Act of 1992 (1992 Housing 
Act) and the Resolution Trust Corporation Completion Act of 1993 
(Completion Act) changed the manner in which the RTC is to identify, 
market and sell certain affordable housing properties. This interim 
final rule also clarifies certain policies of the RTC regarding the 
disposition of assets in the AHDP and reflects certain comments 
received with respect to a previously published interim final rule. By 
implementing the statutory changes required by the Refinancing Act, the 
1992 Appropriations Act, the 1992 Housing Act and the Completion Act, 
and clarifying certain provisions of the AHDP and making the other 
changes set forth herein, these regulations will enhance the 
availability and affordability of residential real property for very-
low income, lower-income and moderate-income families and individuals.

DATES: This interim final rule is effective October 19, 1994. Comments 
must be received by November 18, 1994.

ADDRESSES: Written comments regarding this interim final rule should be 
addressed to John M. Buckley, Jr., Secretary, Resolution Trust 
Corporation, 801 17th Street, NW., Washington, DC 20434-0001. Comments 
may be hand delivered to room 314 on business days between 9 a.m. and 5 
p.m. Comments may also be inspected in the Public Reading Room, 801 
17th Street, NW., between 9 a.m. and 5 p.m. on business days. Phone 
number: 202-416-6940; FAX 202-659-1460.

FOR FURTHER INFORMATION CONTACT:
Stephen S. Allen, Director, Affordable Housing Disposition Program, 
(202) 416-7348, or Barry Wides, Deputy Director, Affordable Housing 
Disposition Program, (202) 416-7138. (These are not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Regulatory Procedure

    On August 31, 1990 (55 FR 35564), the RTC published a final rule 
establishing the procedures to be followed by the RTC in connection 
with the sale of eligible residential properties to qualifying 
purchasers under the AHDP. Those procedures were established in 
accordance with the affordable housing provisions of section 21A(c) of 
the Federal Home Loan Bank Act, as amended by section 501 of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 
(FIRREA) (12 U.S.C. 1441a).
    On May 6, 1992 (57 FR 19500), the RTC published an interim final 
rule and request for comments (May 6, 1992 Interim Rule). That 
publication implemented some of the statutory changes made to the AHDP 
by the Refinancing Act and clarified the RTC's policies on a number of 
issues relating to the disposition of assets in the AHDP.
    On June 12, 1992 (57 FR 24937), the RTC published an interim 
statement of policy. That publication provided that when more than one 
multifamily property is purchased from the RTC under the AHDP, the RTC 
will require that not less than 15 percent of the dwelling units in 
each separate property purchased be made available to low or very-low 
income individuals. The final statement of policy was published on 
August 19, 1992 (57 FR 37581) and reflected no significant changes from 
the interim statement of policy.
    This interim final rule differs from the May 6, 1992 Interim Rule 
in several ways:
    (1) It implements several statutory changes made to the AHDP by the 
Refinancing Act and not reflected in the May 6 1992 interim final rule;
    (2) It implements a number of statutory changes made to the AHDP by 
the enactment of the 1992 Appropriations Act, the 1992 Housing Act and 
the Completion Act;
    (3) It further clarifies RTC policies relating to the disposition 
of assets within the AHDP.

Comments

    The RTC received written comments on the May 6, 1992 Interim Rule 
only from Public Citizen, Inc. Many of the recommendations have been 
incorporated in this interim final rule. Descriptions of specific 
comments, and several changes made in response thereto, are included in 
the following discussion.

Discussion of Changes

    The following are the principal changes being made to the 
regulations:
    (1) The definitions of eligible condominium property, eligible 
multifamily property and eligible single family property are modified 
to substitute specific value limits for the former references to 
various sections of the National Housing Act of 1934, as amended 
(National Housing Act). In order to implement section 12 of the 
Completion Act, the definitions of eligible condominium property and 
eligible single family property are modified to permit specific maximum 
values higher than those set by the National Housing Act so long as 
Congress has appropriated funds for such purpose. To implement section 
601 of the Refinancing Act, the definition of eligible multifamily 
property is modified to permit the inclusion of conservatorship 
properties, if Congress appropriates funds for that purposes. Public 
Citizen, Inc. requested that the definition of eligible multifamily 
property be extended generally to include otherwise eligible 
conservatorship properties. In view of section 12 of the Completion 
Act, this interim final rule goes as far in that direction as the RTC 
believes is permissible without a Congressional appropriation.
    (2) Section 14(a) of the Completion Act is implemented in this 
interim final rule by a requirement that the RTC send notices to 
clearinghouses of the availability for sale of certain properties which 
are ``ineligible'' under the AHDP program. ``Ineligible properties'' 
include (a) properties that would otherwise be eligible condominium 
property or eligible single family property, but have values above the 
applicable AHDP limits and within certain higher limits set forth in 
the statute (if Congress has not appropriated funds to include such 
properties as eligible), and (b) properties that would be eligible 
multifamily property but for being owned by the RTC in its capacity as 
conservator (if Congress has not appropriated funds to include such 
properties as eligible). The clearinghouse is required to make such 
notice available to qualifying purchasers, as well as other purchasers, 
as appropriate and technical assistance advisors are permitted to 
perform a similar function.
    (3) Consistent with the interim and final statements of policy 
discussed above, the definition of lower-income occupancy 
requirement(s) applicable to eligible multifamily properties sold in a 
bulk sale is revised to require that at least 15 percent of the units 
in each property must be made available for low- or very low-income 
families.
    (4) The marketing period continues to be 97 days for eligible 
single family property, but the definition permits a longer marketing 
period to the extent Congress appropriates funds for such purpose.
    (5) Section 14(d) of the Completion Act is being implemented to 
increase participation by minority-owned and women-owned businesses in 
the AHDP. The interim final rule requires that brokers and RTC staff 
provide, to a wide range of minority-owned and women-owned businesses 
and minority-controlled nonprofit organizations, each engaged in 
providing affordable housing, information concerning the availability 
of purchase money loans under section 21A(c)(6)(A)(ii) of the Federal 
Home Loan Bank Act (12 U.S.C. 1441a(c)(6)(A)(ii)). Clearinghouses and 
technical assistance advisors are also authorized to provide such 
information to such parties. In addition to the explicit requirements, 
the interim final rule includes various definitions concerning this 
aspect of the AHDP.
    (6) The definition of nonprofit organization is modified to limit 
the opportunity for for-profit individuals or entities to benefit from 
such status.
    (7) The definition of public agency is clarified to include 
entities operating under executive, legislative or judicial authority.
    (8) Consistent with current RTC directive, the interim final rule 
requires that the RTC send clearinghouses notices containing 
information concerning properties with appraised values or values 
determined by the RTC which exceed the applicable AHDP values. These 
properties (including the ``ineligible'' single family and condominium 
properties discussed in paragraph (2) above) will not be marketed or 
sold as a part of the AHDP, and may be sold to any purchaser if the 
sales price exceeds the applicable maximum AHDP value. However, if the 
sales price falls below the applicable maximum value, these ``non-AHDP 
properties'' may only be sold, initially, to a qualifying purchaser. 
This change is consistent with a suggestion made by Public Citizen, 
Inc.
    (9) The RTC's authority to issue a second Notice of Marketing 
Period for unsold properties has been expanded to cover single family 
properties and condominium units.
    (10) The provisions concerning eligible multifamily properties are 
being clarified to reflect that if a purchaser makes a commitment to 
reserve a higher proportion of properties for very low income families, 
that commitment must be reflected in the LURA for such property.
    (11) The provisions concerning rent restrictions applicable to AHDP 
properties are being clarified to reflect that family size adjustments 
for purposes of determining rent will be based on unit size, rather 
than household size.
    (12) The provisions describing the property listing which must 
accompany a Notice of Marketing Period are being revised to conform 
more closely to statutory requirements.
    (13) In order to implement section 609 of the Refinancing Act, the 
RTC will be required to establish a net realizable market value for an 
eligible multifamily property, which value will be a minimum sales 
price in all cases, except for expedited sales to public agencies or 
nonprofit organizations.
    (14) Clarification and an addition examples are provided as to the 
preference given, with respect to the bulk sale of eligible condominium 
properties, to sales that will benefit the larger number of very low- 
and low-income households.
    (15) The provisions concerning bulk sales of eligible condomium 
property and eligible multifamily property are modified to permit the 
RTC, when a bulk package is being marketed, to sell individual 
properties to qualifying purchasers. Public Citizen, Inc. had suggested 
such a revision with respect to eligible multifamily property. This 
interim final rule goes a step further by making a similar revision 
with respect to eligible condominium property.
    (16) The provision which specifies the information to be provided 
in reports to Congress concerning the AHDP, has been revised so that it 
more closely tracks the statute.
    (17) The provision of Sec. 1609.11 which addresses public agencies 
that acquire properties under the AHDP has been expanded to specify the 
particular lower-income requirements that apply.
    (18) Consistent with existing RTC policy, a new subsection 
1609.9(b) has been added which provides that, with respect to eligible 
multifamily property, the RTC will offer such property, initially, for 
direct sale exclusively to public agencies and nonprofit organizations 
for a period of 45 days. If the RTC receives no notice of serious 
interest, the property will be marketed pursuant to section 1609.7.
    Other stylistic changes to the regulations have also been made.
    Because of the length of the interim final rule and the number of 
changes from the May 6, 1992 Interim Rule, this interim final rule is 
published in its entirety.

Administrative Procedure Act

    The RTC is adopting this regulation as an interim final regulation. 
It will be effective immediately upon publication in the Federal 
Register, without the usual notice-and-comment period or delayed 
effective date as provided for in the Administrative Procedure Act, 5 
U.S.C. 553. These requirements may be waived for ``good cause''. The 
RTC believes that good cause exists because the amendments made to the 
affordable housing provisions of FIRREA by the Refinancing Act, the 
1992 Appropriations Act, the 1992 Housing Act and the Completion Act 
took effect immediately upon their enactment. Moreover, immediate 
clarification of existing policies is necessary in order to avoid undue 
delays in the disposition of affordable housing properties.
    By implementing these changes immediately, the RTC is complying 
with the mandate from Congress to dispose of single family, multifamily 
and condominium properties expeditiously and to the benefit of low and 
moderate income households. The immediate effective date of the 
regulation is also desirable in order to avoid public confusion 
regarding the RTC's policies and procedures in this area. Such 
confusion could impede the sales of affordable housing properties and 
result in deterioration of existing inventory and increased holding 
costs associated with these properties. Such costs ultimately would be 
borne by the taxpayer.
    For these reasons, the RTC finds that the benefits to the public in 
adopting an interim final rule outweigh any harm from the delay in 
seeking public comment. The RTC solicits comments and will consider 
those comments in the adoption of the rule as final, which will take 
place within 90 days after the close of the public period.

Regulatory Flexibility Act

    As required by the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq., the following initial regulatory flexibility analysis is hereby 
provided:
    1. Reasons, objectives, and legal bases underlying the interim 
final regulations. These elements have been discussed elsewhere in the 
preamble.
    2. Impact of the interim final regulations on small businesses: 
This interim final rule is not expected to have a significant economic 
impact on a substantial number of small entities. The RTC expects, 
rather, that the interim final regulation will result in a benefit to 
small business entities whose service will be utilized in fulfilling 
the mandates of the legislation.
    3. Overlapping or conflicting federal rules. There are no known 
federal rules which overlap, duplicate, or conflict with the interim 
final regulations.

List of Subjects in 12 CFR Part 1609

    Low and moderate income housing, Reporting and recordkeeping 
requirements, Savings associations.

    For the reasons set out in the preamble, title 12 chapter XVI of 
the Code of Federal Regulations is amended by revising part 1609 to 
read as follows:

PART 1609--AFFORDABLE HOUSING DISPOSITION PROGRAM

Sec.
1609.1  Authority, purpose, and scope.
1609.2  Definitions.
1609.3  Clearinghouses.
1609.4  Technical assistance advisors.
1609.5  Brokers and other marketing specialists.
1609.6  RTC staff.
1609.7  Marketing period.
1609.8  Recapture of profits from resale.
1609.9  Suspension of marketing period for sales to nonprofit 
organizations and public agencies.
1609.10  Reporting.
1609.11  Transfer of eligible properties to State housing finance 
agencies, State housing agencies and local housing agencies.
1609.12  RTC notice and sale of ineligible residential properties 
and non-AHDP properties.

    Authority: 12 U.S.C. 1441a.


Sec. 1609.1  Authority, purpose, and scope.

    The regulations in this part implement section 21A(c) and section 
21A(b)(12) of the Federal Home Loan Bank Act, as added by section 501 
of the Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (FIRREA) (12 U.S.C. 1441a), and as amended by the Resolution Trust 
Corporation Refinancing, Restructuring, and Improvement Act of 1991, 12 
U.S.C. 1441a(c)), the Department of Veterans Affairs and Housing and 
Urban Development and Independent Agencies Appropriations Act of 1992, 
Public Law 102-139 (105 Stat. 736), the Housing and Community 
Development Act of 1992, Public Law 102-550 (106 Stat. 3672), and the 
Resolution Trust Corporation Completion Act of 1993 (12 U.S.C. 1441a). 
This part applies to the disposition of eligible residential properties 
to qualifying purchasers to provide homeownership and rental housing 
opportunities for very low-income, lower-income, and moderate-income 
families. The Affordable Housing Disposition Program will be carried 
out in accordance with applicable requirements of the Fair Housing Act 
(42 U.S.C. 3601-3619) and other applicable civil rights authorities.


Sec. 1609.2  Definitions.

    (a) Adjusted income and income shall have the meanings given such 
terms in section 3(b) of the United States Housing Act of 1937 (42 
U.S.C. 1437a(b)(5)).
    (b) Adjustment for family size means that factor based on family 
size applied by the RTC to median income to determine a family's 
adjusted income for purposes of this program. For RTC purposes, 50 
percent and 65 percent of area median income numbers shall be adjusted 
for family size in the same manner as HUD adjusts 50 percent numbers; 
and 80 percent and 115 percent numbers shall be adjusted in the same 
manner as HUD adjusts 80 percent numbers.
    (c) Annual income has the same meaning as such term has under 24 
CFR 813.106.
    (d) Bona fide offer means offer to purchase eligible multifamily 
property which meets the terms and conditions set forth in the 
applicable notice of readiness for sale and includes the information 
set forth in Sec. 1609.7(b)(7) of this part.
    (e) Bulk purchase offer means an offer to purchase in a single 
transaction two or more eligible residential properties.
    (f) Cash equivalent offer means an offer after application of a 
cash equivalency calculation consisting of a discounted cash flow 
comparison between cash offers for a property and seller financed 
offers for the same property.
    (g) Clearinghouse means:
    (1) The State housing finance agency for the State in which an 
eligible multifamily property, eligible condominium property or 
eligible single family property is located;
    (2) The Office of Community Investment (or other comparable 
division) within the Federal Housing Finance Board in the jurisdiction 
where the eligible multifamily property, eligible condominium property 
or eligible single family property is located; and
    (3) Any national nonprofit organization (including any nonprofit 
entity under title IX of the Housing and Community Development Act of 
1968) (42 U.S.C. 3931) that the RTC determines has the capacity to act 
as a clearinghouse for information.
    (h) Condominium project means real estate which has five or more 
residential condominium units and the remaining portions of which are 
designated for common ownership solely by the owners of the condominium 
units, each owner having an undivided interest in the common elements; 
provided however, that such condominium units are not required to be 
located in the same structure, but must be part of a common condominium 
regime or plan.
    (i) Condominium unit means a portion of a condominium project 
designated for separate ownership.
    (j) Eligible condominium property means a condominium unit:
    (1) To which the RTC acquires title in its corporate capacity, its 
capacity as conservator, or its capacity as receiver (including its 
capacity as the sole owner of a subsidiary corporation of a depository 
institution under conservatorship or receivership, which subsidiary has 
as its principal business the ownership of real property); and
    (2) That has an appraised value or value determined by the RTC that 
does not exceed $67,500 in the case of a 1-family residence, $76,000 in 
the case of a 2-family residence, $92,000 in the case of a 3-family 
residence, and $107,000 in the case of a 4-family residence; or 
$101,250 in the case of a 1-family residence, $114,000 in the case of a 
2-family residence, $138,000 in the case of a 3-family residence and 
$160,500 in the case of a 4-family residence to the extent that 
Congress shall have appropriated funds to cover additional costs and 
losses resulting from including property with such higher maximum 
values.
    (k) Eligible multifamily property means a property consisting of 
more than four dwelling units:
    (1) To which the RTC acquires title either in its corporate 
capacity or as receiver (including its capacity as the sole owner of a 
subsidiary corporation of depository institution under receivership, 
which subsidiary has as its principal business the ownership of real 
property), but not in its capacity as an operating conservator, except 
to the extent that Congress shall have appropriated funds to cover the 
additional costs and losses of including property held in such 
capacity; and
    (2) That has an appraised value or value determined by the RTC that 
does not exceed, for such part of the property as may be attributable 
to dwelling use (excluding exterior land improvements), $29,500 per 
family unit without a bedroom $33,816 per family unit with 1 bedroom 
$41,120 per family unit with 2 bedrooms, $53,195 per family unit with 3 
bedrooms, and $58,392 per family unit with 4 or more bedrooms.
    (l) Eligible residential property includes eligible single family 
property and eligible multifamily property.
    (m) Eligible single family property means a one- to four-family 
residence (including a cooperative or manufactured home permanently 
attached to real estate):
    (1) To which the RTC requires title in its corporate capacity, its 
capacity as conservator, or its capacity as receiver (including its 
capacity as the sole owner of a subsidiary corporation of a depository 
institution under conservatorship or receivership, which subsidiary has 
as its principal business the ownership of real property); and
    (2) That has an appraised value or value determined by the RTC that 
does not exceed $67,500 in the case of a 1-family residence, $76,000 in 
the case of a 2-family residence, $92,000 in the case of a 3-family 
residence, and $107,000 in the case of a 4-family residence, or 
$101,250 in the case of a 1-family residence, $114,000 in the case of a 
2-family residence, $138,000 in the case of a 3-family residence and 
$160,500 in the case of a 4-family residence to the extent that 
Congress shall have appropriated funds to cover additional costs and 
losses resulting from including property with such higher maximum 
values.
    (n) HUD means the U.S. Department of Housing and Urban Development.
    (o) Ineligible condominium property means a condominium unit:
    (1) To which the RTC acquires title in its corporate capacity, its 
capacity as conservator, or its capacity as receiver (including its 
capacity as the sole owner of a subsidiary corporation of a depository 
institution under conservatorship or receivership, which subsidiary 
corporation has as its principal business the ownership of real 
property);
    (2) That has an appraised value or value determined by the RTC that 
does not exceed the applicable dollar amount limitation for the 
property under paragraph (j)(2)(ii) of this section; and
    (3) That is not an eligible condominium property.
    (p) Ineligible multifamily property means a property consisting of 
more than four dwelling units:
    (1) To which the RTC acquires title in its capacity as conservator 
(including its capacity as the sole owner of a subsidiary corporation 
of a depository institution under conservatorship, which subsidiary 
corporation has as its principal business the ownership of real 
property);
    (2) That has an appraised value or a value determined by the RTC 
that does not exceed, for such part of the property as may be 
attributable to dwelling use (excluding exterior land improvements), 
the dollar amount limitations under paragraph (k)(2) of this section; 
and
    (3) That is not an eligible multifamily property.
    (q) Ineligble residential property includes ineligible single 
family property, ineligible multifamily property and ineligible 
condominium property.
    (r) Ineligible single family property means a one to four family 
residence (including a cooperative or manufactured home permanently 
attached to real estate):
    (1) To which the RTC acquires title in its corporate capacity, its 
capacity as conservator, or its capacity as receiver (including its 
capacity as the sole owner of a subsidiary corporation of a depository 
institution under conservatorship or receivership, which subsidiary has 
as its principal business the ownership of real property);
    (2) That has an appraised value or value determined by the RTC that 
does not exceed the applicable dollar amount limitation for the 
property under paragraph (m)(2)(ii) of this section; and
    (3) That is not an eligible single family property.
    (s) Lower-income families means families and individuals whose 
incomes do not exceed 80 percent of area median income, as defined 
under 42 U.S.C. 1437a(b)(2) and as determined by the Secretary of HUD, 
with adjustment for family size.
    (t) Lower-income occupancy requirement(s) means:
    (1) With respect to eligible multifamily property, that not less 
than 35 percent of all dwelling units purchased by a qualifying 
multifamily purchaser in a single transaction shall be made available 
for occupancy by, and be maintained as affordable for, lower-income 
families during the remaining useful life of the property in which the 
units are located, provided that not less than 20 percent of all units 
shall be made available for occupancy by, and be maintained as 
affordable for, very low-income families during the remaining useful 
life of such property. In the event that more than one eligible 
multifamily property is purchased as part of a single transaction, not 
less than 15 percent of the dwelling units in each separate property 
shall be made available for occupancy by and maintained as affordable 
for lower-income families (including very low-income families) for the 
remaining useful life of the property in which the units are located.
    (2) With respect to eligible single family property, that all 
eligible single family property purchased by public agencies or 
nonprofit organizations shall be made available for occupancy by, and 
be maintained as affordable for, lower-income families for the 
remaining useful life of the property, or be made available for 
purchase by any such family that agrees to occupy the property as a 
principal residence for at least 12 months and certifies in writing 
that the family intends to occupy the property for at least 12 months.
    (3) With respect to eligible condominium property, that, unless 
otherwise waived by the RTC in accordance with Sec. 1609.7(c)(4)(ii) of 
this part, each eligible condominium property purchased by public 
agencies, nonprofit organizations, or for-profit entities shall be made 
available for occupancy by, and be maintained as affordable for, lower-
income families for the remaining useful life of the property, or be 
made available for purchase by any such family who agrees to occupy the 
property as a principal residence for at least 12 months and who 
certifies in writing that the family intends to occupy the property for 
at least 12 months.
    (4) Properties shall be affordable for lower-income and very low-
income families at rent levels which do not exceed those prescribed at 
Sec. 1609.7(a)(6), (b)(4), or (c)(4) of this part, as applicable.
    (u) LURA means a Land Use Restriction Agreement or other form of 
recordable legal agreement between the RTC and the purchaser of an 
eligible multifamily property, eligible condominium property or 
eligible single family property, which sets forth the lower-income 
occupancy requirements and other restrictions on the property.
    (v) Marketing period means the period of time during which 
qualifying purchasers have exclusive rights to make offers to purchase 
eligible single family properties or eligible condominium properties 
and to submit expressions of serious interest in purchasing eligible 
multifamily properties. The marketing period begins, with respect to an 
eligible multifamily property, eligible condominium property or 
eligible single family property, on the date specified in the Notice of 
Marketing Period issued by the RTC for the property. The marketing 
period ends, with respect to an eligible single family property, three 
months and one week after the date so specified in the Notice of 
Marketing Period, except to the extent that Congress shall have 
appropriated funds to cover the additional costs and losses of such 
longer period, the marketing period shall end 180 days after the date 
so specified in the Notice of Marketing Period. The marketing period 
ends, with respect to an eligible multifamily property, three months 
after the date so specified in the Notice of Marketing Period; however, 
if the marketing period is extended in accordance with the provisions 
of Sec. 1609.7(b)(12) of this part, the marketing period will end three 
months after the date specified in the subsequent Notice of Marketing 
Period or on an earlier date, if any, specified in the subsequent 
Notice of Marketing Period. The marketing period ends, with respect to 
an eligible condominium property, 180 days after the date so specified 
in the Notice of Marketing Period.
    (w) Median income for the area has the same meaning as the term has 
under section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)). For RTC purposes, 65 percent of area median income numbers 
shall be calculated on the basis of HUD's income limits for very low-
income families and 115 percent of area median income numbers, on the 
basis of HUD's income limits for lower-income families.
    (x) Minority means any Black American, Native American, Hispanic 
American, or Asian America.
    (y) Minority-owned business means a business--
    (1) more than 50 percent of the ownership or control of which is 
held by 1 or more minority individuals; and
    (2) more than 50 percent of the net profit or loss of which accrues 
to 1 or more minority individuals.
    (z) MOU means memorandum of understanding.
    (aa) Moderate-income families means families and individuals whose 
incomes exceed 80 percent but do not exceed 115 percent of area median 
income, as determined by the Secretary of HUD, with adjustment for 
family size.
    (bb) National nonprofit organization means a nonprofit organization 
which has membership in more than one State or operates housing and 
community development programs or provides technical assistance in more 
than one State.
    (cc) Net realizable market value means a price below the market 
value that takes into account:
    (1) Any reductions in holding costs resulting from the expedited 
sale of a property including, but not limited to, foregone real estate 
taxes, insurance, maintenance costs, security costs, potential 
diminution of value from property being held in inventory, and loss of 
use of funds; and
    (2) The avoidance, where applicable, of fees paid to real estate 
brokers, auctioneers, or other individuals of organizations involved in 
the sale of property owned by the RTC.
    (dd) Non-AHDP property means a property that would constitute an 
eligible multifamily property, eligible condominium property or 
eligible single family property except that its appraised value or the 
value determined by the RTC exceeds the applicable maximum values set 
out in paragraph (j)(2) of this section with respect to condominium 
units, in paragraph (k)(2) of this section with respect to multifamily 
property, and in paragraph (m)(2) of this section with respect to 
single family property.
    (ee)(1) Nonprofit organization means a private organization 
(including a limited equity cooperative):
    (i) No part of the net earnings of which inures to the benefit of 
any member, shareholder, founder, contributor, lender, management 
company or individual and in which no equity interest or investment is 
held by a lender or management company, as determined by the RTC; and
    (ii) That is approved by the RTC as to financial responsibility.
    (2) The determination of whether an organization qualifies as a 
nonprofit organization for purposes of this part shall be made by RTC.
    (ff) Principal residence means the dwelling at which a household 
resides for at least a majority of each year.
    (gg) Public agency means any Federal, State, local, or other 
governmental entity, whether operating under executive, legislative or 
judicial authority, and includes any public housing agency.
    (hh) Qualifying condominium purchaser means:
    (1) A qualifying household, in the case of eligible condominium 
property offered for sale individually; or
    (2) In the case of eligible condominium property offered for sale 
in bulk, a nonprofit organization, public agency or for-profit entity, 
which makes a commitment to satisfy the lower-income occupancy 
requirements for the eligible condominium property for which it makes a 
purchase offer.
    (ii) Qualifying household means a household:
    (1) That intends to occupy an eligible single family property or 
condominium property as a principal residence;
    (2) That agrees to occupy the property as a principal residence for 
at least 12 months;
    (3) That certifies in writing that it intends to occupy the 
property as a principal residence for at least 12 months; and
    (4) Whose annual income does not exceed 115 percent of area median 
income, as determined by the Secretary of HUD, with adjustment for 
family size.
    (jj) Qualifying multifamily purchaser means a public agency, a 
nonprofit organization, or a for-profit entity which makes a commitment 
(for itself or any related entity) to satisfy the lower-income 
occupancy requirements for any eligible multifamily property for which 
it makes a purchase offer.
    (kk) Qualifying purchaser includes qualifying single family 
purchasers, qualifying multifamily purchasers, and qualifying 
condominium purchasers. For bulk sales transactions, qualifying 
purchaser excludes qualifying households.
    (ll) Qualifying single family purchaser means:
    (1) A qualifying household (including qualifying households with 
members who are veterans); or
    (2) A public agency or nonprofit organization that agrees to 
either:
    (i) Make an eligible single family property available for occupancy 
as affordable housing for lower-income families (including lower-income 
families with members who are veterans) during the remaining useful 
life of such property; or
    (ii) Make the property available for purchase by any such family 
that agrees to occupy the property as a principal residence for at 
least 12 months and that certifies in writing that the family intends 
to occupy the property for at least 12 months.
    (mm) Recapture means the process by which the RTC receives a 
percentage of the proceeds from the sale of properties which are 
subject to recapture, as set forth in Sec. 1609.8 of this part.
    (nn) RTC means the Resolution Trust Corporation.
    (oo) Secretary means the Secretary of Housing and Urban 
Development.
    (pp) Single Transaction means the purchase of more than one 
eligible multifamily property by the same qualifying multifamily 
purchaser where such purchaser is the winning bidder on each such 
property and the properties were listed with one or more clearinghouses 
such that bids could be and were submitted contemporaneously by the 
purchaser therefore, offered for sale by the RTC as part of a 
designated bulk sale transaction or identified by the purchaser and 
accepted by RTC as part of a bulk sale bid by the purchaser and 
accepted by RTC as part of a bulk sale bid by the purchaser; provided, 
however, that in any such event the RTC and the purchaser may elect to 
treat such purchases as being made pursuant to separate and distinct 
transactions, rather than a single transaction.
    (qq) Subsidiary means an entity which is a wholly-owned subsidiary 
of a depository institution under conservatorship or receivership, as 
applicable, which has as its principal business the ownership of real 
property, including wholly-owned subsidiaries of subsidiaries.
    (rr) Technical assistance advisor (TAA) means a public agency or 
nonprofit organization that is designated by the RTC to provide 
assistance to potential purchasers of eligible multifamily properties, 
eligible condominium properties and eligible single family properties.
    (ss) Useful life means the later of forty (40) years from the date 
of the LURA or fifty (50) years from the date the property was 
initially occupied as housing; provided, however, that in the event of 
an involuntary loss of use of the property caused by seizure, 
condemnation, foreclosure, deed in lieu of foreclosure, fire or other 
casualty, the useful life of the property shall terminate on the date 
of such loss.
    (tt) Very low-income families means families and individuals whose 
incomes do not exceed 50 percent of area median income, as defined 
under 42 U.S.C. 1437a(b)(2) and as determined by the Secretary of HUD, 
with adjustment for family size.
    (uu) Veteran means a person who served in the active military, 
naval, or air service, and who was discharged or release therefrom 
under conditions other than dishonorable.
    (vv) Women-owned business means a business--
    (1) More than 50 percent of the ownership or control of which is 
held by one or more women;
    (2) More than 50 percent of the net profit or loss of which accrues 
to one or more women; and
    (3) A significant percentage of senior management positions are 
held by women.


Sec. 1609.3  Clearinghouses.

    (a) Eligibility. Clearinghouses shall include:
    (1) The State housing finance agency for the State in which an 
eligible multifamily property, eligible condominium property or 
eligible single family property is located;
    (2) The Office of Community Investment (or other comparable 
division) within the Federal Housing Finance Board in the jurisdiction 
where the eligible multifamily property, eligible condominium property 
or eligible single family property is located; and
    (3) Any national nonprofit organization that the RTC determines has 
the capacity to act as a clearinghouse for information.
    (b) Designation. The RTC shall designate one or more eligible 
clearinghouses to act in that capacity in each State.
    (1) State housing finance agencies. The RTC may ask the Governor of 
each State to confirm the designation of the State housing finance 
agency to serve as a clearinghouse. At the Governor's discretion, the 
clearinghouse function may be supported, in part, by a State agency, 
which is not a State housing finance agency, serving as a technical 
assistance advisor.
    (2) Office of Community Investment. The RTC may ask the Federal 
Housing Finance Board (FHFB) to designate the Office of Housing Finance 
Programs or other comparable division to serve as a clearinghouse. At 
the FHFB's discretion, the clearinghouse function may be delegated to, 
or supplemented in whole or in part by, its District Banks.
    (3) National nonprofit organizations. The RTC may ask national 
nonprofit organizations to submit a written request for designation as 
a clearinghouse. The request should take the form of a written 
expression of interest in serving as a clearinghouse; evidence of 
Internal Revenue Service determination of nonprofit status pursuant to 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) or 
other appropriate sections, where applicable; a list of cities and 
States in which the organization is operating; a description of 
experience in promoting low- and moderate-income housing; the latest 
annual report; and a description of means by which the organization 
will disseminate property information. The RTC may, in its discretion, 
accept or reject such a request in writing.
    (c) Functions. (1) Under the terms of the MOU's to be entered into 
between the RTC and the clearinghouses, the clearinghouses shall 
perform the following functions:
    (i) Serve as repository of property listings and Notices of 
Marketing Period from the RTC for public inspection;
    (ii) Make information available upon request during the marketing 
period to qualifying purchasers concerning eligible residential 
properties for which the clearinghouse has received a Notice of 
Marketing Period; and
    (iii) Following receipt of a notice required under Sec. 1609.12 of 
this part concerning ineligible residential properties or non-AHDP 
properties, make the information contained in such notice available, 
upon request, to public agencies, nonprofit organizations, qualifying 
households, qualifying multifamily purchasers and other purchasers, as 
applicable.
    (2) Clearinghouses are encouraged to perform the following 
functions:
    (i) Disseminate RTC property inventories as well as listings of 
properties for which they have received Notices of Marketing Period for 
sale on a regular basis to State and local government agencies, 
nonprofit housing organizations, for-profit entities, organizations 
representing special population groups such as the homeless, and 
disabled, handicapped, and elderly persons, and members of minority 
groups;
    (ii) Publicize the availability of eligible residential properties 
through various media, including newspapers and other media serving 
minority groups; and
    (iii) Periodically provide to a wide range of minority-owned 
businesses and women-owned businesses engaged in providing affordable 
housing, and to nonprofit organizations more than 50 percent of the 
control of which is held by 1 or more minority individuals, that are 
engaged in providing affordable housing, information that is sufficient 
to inform such businesses and organizations of the availability and 
terms of financing under section 21A(c)(6)(A)(ii) of the Federal Home 
Loan Bank Act (12 U.S.C. 1441a(c)(6)(A)(ii)) concerning purchase loans, 
such information to be provided directly, by notices published in 
periodicals and other publications that regularly provide information 
to such businesses or organizations, or through persons and 
organizations that regularly provide information or services to such 
businesses or organizations.
    (3) A clearinghouse shall not be subject to suit for its failure to 
comply with the requirements of this section.


Sec. 1609.4  Technical assistance advisors.

    (a) Eligibility. Technical assistance advisors (TAA) may include 
clearinghouses, State and local public agencies, and nonprofit 
organizations.
    (b) Designation. An eligible entity may submit a written request to 
the RTC regional and national office for designation as a TAA. Such 
request shall include: evidence of Internal Revenue Service 
determination of nonprofit status pursuant to section 501(c)(3) of the 
Internal Revenue Code (26 U.S.C. 501(c)(3)) or other appropriate 
sections, where applicable; a description of experience in promoting 
low- and moderate-income housing; and a description of the functions 
that the entity proposes to perform, identifying staffing capability to 
perform such functions. The RTC may, in its discretion, accept or 
reject such a request in writing.
    (c) Functions. A TAA may assist a purchaser of an eligible 
multifamily property, eligible condominium property or eligible single 
family property. It may perform one or more of the following functions:
    (1) Qualifying potential purchasers of eligible single family 
properties or eligible condominium properties;
    (2) Assisting qualifying households to identify suitable properties 
and secure financing;
    (3) Assisting qualifying multifamily purchasers and qualifying 
condominium purchasers to identify suitable properties and secure 
financing;
    (4) Assisting sponsors of housing for special populations, such as 
homeless, disabled, handicapped, and elderly persons, to identify 
suitable properties and secure financing;
    (5) Providing specialized assistance to qualifying purchasers, 
including, but not limited to, families with members who are members of 
minority groups and those with members who are veterans;
    (6) Providing to minority-owned businesses and women-owned 
businesses engaged in providing affordable housing, and to nonprofit 
organizations more than 50 percent of the control of which is held by 1 
or more minority individuals, that are engaged in providing affordable 
housing, information about the availability and terms of financing for 
purchase loans, as further described at Sec. 1609.3(c)(2)(iii) of this 
part; and
    (7) Assisting in other promotional services as needed by the RTC 
such as information dissemination, identification of qualifying 
purchasers, and other promotional activities as needed.
    (d) Compensation. (1) The RTC shall enter into an MOU with each TAA 
which will specify the services that the TAA will perform.
    (2) The MOU may provide that the RTC shall compensate the TAA for 
its services on a basis agreed upon between the RTC and TAA. 
Compensation arrangements may include special compensation for services 
which lead to the purchase of eligible residential properties by lower-
income families and other groups targeted for assistance.


Sec. 1609.5  Brokers and other marketing specialists.

    (a) Designation. The RTC shall involve brokers, auctioneers, and 
other marketing specialists in the marketing of eligible residential 
properties that it offers for sale.
    (b) Functions. The broker, auctioneer, or other marketing 
specialists shall:
    (1) Actively market the eligible residential properties on its 
listing, including using multi-listing services, as appropriate, and 
advertising in local media and media targeted to low- and moderate-
income families (including families with one or more members who are 
members of minority groups and those with members who are veterans);
    (2) Provide to minority-owned businesses and women-owned businesses 
engaged in providing affordable housing, and to nonprofit organizations 
more than 50 percent of the control of which is held by 1 or more 
minority individuals, that are engaged in providing affordable housing, 
information about the availability and terms of financing for purchase 
loans, as further described at Sec. 1609.3(c)(2)(iii) of this part;
    (3) Pre-qualify and counsel prospective purchasers, as prescribed 
by the RTC;
    (4) Provide an opportunity for prospective purchasers to inspect 
the property and to review property records, including purchasers 
identified by TAA's, without regard to race, color, religion, sex, 
national origin, handicap, and familial status;
    (5) Certify that they--
    (i) Will not decline to show properties, or discriminate in the 
marketing or sale of properties because of race, color, religion, sex, 
national origin, handicap, or familial status;
    (ii) Will prominently display the Fair Housing Poster in all 
offices where brokering and sales activities take place;
    (iii) Will use the Equal Housing Opportunity logo, slogan, or 
statement in advertising; and
    (iv) Will use any available minority media (in addition to other 
media that are used) when advertising properties;
    (6) Present offers or contracts from qualifying purchasers to the 
RTC for acceptance, rejection, or counteroffer, along with 
certifications of eligibility from the qualifying purchasers; and
    (7) Perform all other responsibilities incident to the sale and 
closing.
    (c) Compensation. The RTC shall enter into a listing agreement with 
each broker or, at its discretion, utilize open listing agreements 
which specify the mutual responsibilities of the RTC and the broker and 
which provide for compensation as a percentage of the sales price of a 
property sold with the broker's services. The RTC shall compensate the 
auctioneers and other marketing specialists for their services on the 
basis of a contract which specifies the services to be provided and 
rate of compensation. Compensation arrangements may include incentives 
for the sale of properties to lower-income families and individuals 
(including lower-income veterans and lower-income families with members 
who are veterans).


Sec. 1609.6  RTC staff.

    (a) Designation. The RTC shall designate affordable housing 
disposition specialists on the staff of field offices.
    (b) Functions. (1) The affordable housing disposition specialists 
generally shall perform the following functions:
    (i) Coordinate sales of eligible residential properties in each 
office and serve as an advocate for the program;
    (ii) Review and approve written requests from eligible entities to 
serve as TAA's;
    (iii) Negotiate an MOU with each TAA regarding the services to be 
performed and the method and amount of compensation;
    (iv) Negotiate an MOU with the clearinghouses regarding the 
services to be performed;
    (v) Within a reasonable time after acquisition of title to eligible 
residential properties, send a list of eligible residential properties 
to clearinghouses with a Notice of Marketing Period, and coordinate the 
sale of properties to nonprofit organizations or public agencies;
    (vi) Monitor marketing efforts of clearinghouses, TAA's, and 
brokers or other marketing specialists, giving particular attention to 
marketing of eligible single family properties and eligible condominium 
properties for sale to lower-income families, and marketing of 
properties to special needs populations, veterans and minority groups;
    (vii) Identify potential sources of financing for eligible 
residential properties through coordination with Federal, State, and 
local agencies and private lenders and investors;
    (viii) Coordinate with other Federal agencies that are selling 
residential properties in the same market areas;
    (ix) Provide to minority-owned businesses and women-owned 
businesses engaged in providing affordable housing, and to nonprofit 
organizations more than 50 percent of the control of which is held by 1 
or more minority individuals, that are engaged in providing affordable 
housing, information about the availability and terms of financing for 
purchase loans, as further described at Sec. 1609.3(c)(2)(iii) of this 
part; and
    (x) Carry out all other necessary activities for the program.
    (2) The functions performed by the affordable housing disposition 
specialists may be amended or expanded from time to time at the 
discretion of the RTC.


Sec. 1609.7  Marketing period.

    (a) Eligible single family property--(1) Notice of Marketing 
Period. (i) Subject to exercise by the RTC of its authority under 
Secs. 1609.9 and 1609.11 of this part, when an eligible single family 
property is ready for marketing, the RTC shall send a Notice of 
Marketing Period to the clearinghouse serving the area in which the 
property is located. The Notice shall be transmitted by certified mail 
or any other means of communication with date and time confirmation.
    (ii) The property listing accompanying the Notice shall contain 
basic information about the property, including location, condition and 
information relating to the estimated fair market value of the 
property, and such other information as the RTC may determine to be 
useful.
    (iii) The Notice shall specify a date that begins the start of the 
Marketing Period and state that the Marketing Period ends 3 months and 
one week, or such longer time period as may be applicable, after such 
date.
    (2) Qualifying single family purchases--(i) Households. To qualify 
to purchase an eligible single family property, a household must 
certify in writing to the RTC that its annual income does not exceed 
115 percent of area median income, with adjustment for family size, and 
that it intends to occupy the property as a principal residence for at 
least 12 months.
    (ii) Public agencies and nonprofit organizations. To qualify to 
purchase one or more eligible single family properties, a public agency 
or nonprofit organization must certify to the RTC that it will make the 
property available for occupancy by, and maintain it as affordable for, 
lower-income families (including lower-income families with members who 
are veterans) for the remaining useful life of such property; or make 
the property available for purchase by any such family that agrees to 
occupy the property as a principal residence for at least 12 months and 
certifies in writing that the family intends to occupy the property for 
at least 12 months.
    (iii) Penalty for false certifications. A household that provides 
false or incomplete information regarding its income or that falsely 
certifies that it intends to occupy the property as its principal 
residence can be fined or imprisoned pursuant to 18 U.S.C. 1001 and 31 
U.S.C. 3802. A household that sells the property within 12 months of 
acquisition will be subject to the recapture provisions set forth in 
Sec. 1609.8 of this part.
    (3) Offer and sale. The RTC may sell eligible single family 
property to qualifying households, nonprofit organizations, and public 
agencies without regard to any minimum sale price. The RTC may, before 
the end of the marketing period, accept purchase offers on eligible 
single family property from qualifying single family purchasers.
    (4) Preference for sales that benefit lower income groups--(i) 
Purchase offers from qualifying households. In choosing among equal 
purchase offers from qualifying households for eligible single family 
property, the RTC will give preference to bids from households in the 
lower or lowest income group (e.g. very low-income over lower-income);.
    (ii) Purchase offers from nonprofit organizations and public 
agencies. In choosing among bulk purchase offers from nonprofit 
organizations and public agencies, the RTC will give preference to the 
offer that would reserve the highest percentage of single family 
properties for occupancy or purchase by very low-income families and 
would retain such affordability for the longest term (not exceeding the 
term of the applicable LURA). The preference will be calculated in 
accordance with the following formula:

    Add to the cash equivalent offer, 0.25% of that cash equivalent 
offer for each 1% of the properties set aside for occupancy or 
purchase by very low-income families.
    Example: Nonprofit organization X offers to purchase 10 eligible 
single family properties for $300,000 and agrees to reserve 5 of 
those properties for occupancy or purchase by very low-income 
families. Nonprofit organization Y offers to purchase the same 10 
eligible single family properties for $325,000 and intends to 
reserve all of the properties for occupancy and purchase by lower-
income families (but not very low-income families). Although Y has 
offered more for the properties, the properties should be sold to 
nonprofit organization X for $300,000.

X's offer=$300,000.

X's preference price=$300,000+
    ($300,000 x 50 x 0.0025)=$300,000+
    $37,500=$337,500

Y's offer=$325,000. Y does not receive a preference because Y did 
not set aside any of the properties for occupancy or purchase by 
very low-income families.

    (5) Deed restrictions--(i) Qualifying households. An eligible 
single family property purchased by a qualifying household which is 
subject to recapture pursuant to Sec. 1609.8 of this part must be so 
restricted by a LURA or other recorded instrument for the recapture 
period.
    (ii) Nonprofit organizations and public agencies. Eligible single 
family properties purchased by a public agency or nonprofit 
organization for rental or resale to lower-income families must be so 
restricted by a LURA or other recorded instrument which is binding upon 
successors in interest, with the provision that the property may 
subsequently be sold to a lower-income family without further deed 
restrictions (except applicable recapture restrictions). The LURA or 
other recorded legal instrument shall also require the property owner 
to rent such properties at affordable rates, to cooperate with periodic 
compliance reviews and to pay a reasonable fee to cover the cost of the 
reviews. The LURA or other recorded instrument shall reflect any 
commitment, made in accordance with a purchase offer pursuant to 
paragraph (a)(4)(ii) of this section, to reserve a percentage of single 
family properties for occupancy or purchase by very low-income families 
and retain such affordability for the longest term.
    (iii) Lower-income occupancy requirements shall be judicially 
enforceable against purchasers of eligible single family property or 
their successors in interest by affected very low- and lower-income 
families, State housing finance agencies, and any agency, corporation, 
or authority of the United States Government.
    (6) Restrictions on the rental of single family properties. (i) In 
the event that a public agency or nonprofit organization purchases one 
or more eligible single family properties for rental purposes, the 
rents charged to very low-income families may not exceed 30 percent of 
the adjusted income of a family whose income equals 50 percent of area 
median income, with adjustment for family size; and the rents charged 
to lower-income families may not exceed 30 percent of the adjusted 
income of a family whose income equals 65 percent of area median 
income, with adjustment for family size. Adjustments for family size 
for purposes of determining the maximum rent that may be charged with 
respect to a particular eligible single family property shall be 
calculated on the basis of the size of household anticipated to occupy 
a unit with the particular number of bedrooms as follows:

Unit Size

0-Bedroom 1-BR 2-BR 3-BR 4-BR 5-BR

Household Size

1 Person 2 Pers. 3 Pers. 5 Pers. 7 Pers. 8 Pers.

    Example. Thus, for example, rent for a 3-bedroom unit occupied 
by a very low-income family will be based upon the HUD-determined 
income for a household at 50% of area median income which has 5 
members. The rent for a 2-bedroom unit occupied by a lower-income 
household will be based upon the HUD figure for a household at 65% 
of median income which has 3 members.

    (ii) Where a property is occupied by a family receiving housing 
assistance payments, pursuant to section 8 of the United States Housing 
Act of 1937 (42 U.S.C. 1437f), as amended, the family's contribution 
toward rent may not exceed 30 percent of the family's adjusted income.
    (7) Continued occupancy of current residents. No public agency or 
nonprofit organization which purchases one or more eligible single 
family properties may terminate the occupancy of any person residing in 
the property on the date of purchase for purposes of meeting the lower-
income occupancy requirement. The purchaser shall be in compliance with 
the requirement if each newly vacant dwelling unit in the property is 
reserved for lower-income occupancy until the lower-income occupancy 
requirement is met.
    (8) Property offered for resale. If the RTC receives a purchase 
offer, but fails to close on an eligible single family property, the 
RTC may accept an alternative contract offer or notify the appropriate 
clearinghouses so that the property can be re-offered for sale for an 
appropriate interval determined by the RTC, provided, however, that the 
appropriate interval shall not exceed 97 days, or such other period as 
may be applicable pursuant to paragraph (a)(1) of this section.
    (9) Sales after the marketing period. If the RTC does not receive a 
purchase offer for an eligible single family property within the 
applicable marketing period, the RTC may sell the property to any 
purchaser.
    (10) Avoidance of displacement. Prior to or during the marketing 
period, the RTC may sell an eligible single family property to the 
household residing in the property without regard to the income of the 
household, provided that:
    (i) The household was residing in the property at the earlier of 
the time of sale or the time the Notice of Marketing Period was 
provided to the clearinghouse;
    (ii) The sale was necessary to avoid the displacement of, and 
unnecessary hardship to, the resident household;
    (iii) The resident household intends to occupy the property as its 
principal residence for at least 12 months; and
    (iv) The resident household certifies in writing that the household 
intends to occupy the property for at least 12 months and acknowledges 
that it is subject to the penalties described in paragraph (a)(2)(iii) 
of this section if the household fails to comply with the residency 
requirement.
    (b) Eligible multifamily property--(1) Notice of Marketing Period. 
(i) Subject to exercise by the RTC of its authority under Secs. 1609.9 
and 1609.11 of this part, the RTC shall send a Notice of Marketing 
Period to clearinghouses when an eligible multifamily property is ready 
for marketing to qualifying multifamily purchasers. The RTC shall send 
a second Notice of Marketing Period to the clearinghouse if it 
determines, in accordance with paragraph (b)(12) of this section, to 
extend the marketing period for an eligible multifamily property. The 
Notice shall be transmitted by certified mail or any other means of 
communication with date and time confirmation.
    (ii) The property listing accompanying the Notice shall contain 
basic information about the property, including location, number of 
units (identified by number of bedrooms) and information relating to 
the estimated fair market value of the property, and such other 
information as the RTC may determine to be useful.
    (iii) The Notice shall specify a date that begins the start of the 
marketing period and state that the Marketing Period ends 3 months, or 
such other time period as may be applicable, after such date.
    (iv) During the marketing period, the RTC shall offer an eligible 
multifamily property exclusively to qualifying multifamily purchasers.
    (v) The RTC shall allow qualifying multifamily purchasers 
reasonable access to eligible properties for purposes of inspection.
    (2) Qualifying multifamily purchasers. Prior to receiving access to 
an eligible multifamily property, a public agency, nonprofit 
organization, or for-profit entity must make a written commitment (for 
itself or any related entity) to the listing broker or other marketing 
specialist that it is a qualifying multifamily purchaser which will 
satisfy the lower-income occupancy requirements in any eligible 
multifamilly property for which it requests access, if and when it 
makes an offer to purchaser that property. The written commitment 
should acknowledge the terms and conditions governing the sale of 
eligible multifamily properties. This commitment will be included as a 
part of the bid package.
    (3) Determination of market value. The RTC shall establish a market 
value and estimate a net realizable market value for each eligible 
multifamily property, giving consideration to the lower-income 
occupancy requirements and the related rent limitations. The RTC shall 
sell each eligible multifamily property at a price no less than the 
estimated net realizable market value unless sale at a lower price is 
necessary to facilitate an expedited sale of such property and to 
enable a public agency or nonprofit organization to comply with the 
applicable lower-income occupancy requirements. If the RTC receives an 
offer higher than its estimate of the net realizable market value, the 
amount of such offer shall be deemed to be the net realizable market 
value.
    (4) Lower-income occupancy requirements--(i) Rent limitations. (A) 
To comply with lower-income occupancy requirements, the rents charged 
to very low-income families may not exceed 30 percent of the adjusted 
income of a family whose income equals 50 percent of area median 
income, with adjustment for family size; and the rents charged to 
lower-income families may not exceed 30 percent of the adjusted income 
of a family whose income equals 65 percent of area median income, with 
adjustment for family size. Adjustments for family size for purposes of 
determining the maximum rent that may be charged shall be made as shown 
at paragraph (a)(6) of this section.
    (B) Where a unit is occupied by a family receiving housing 
assistance payments, pursuant to section 8 of the United States Housing 
Act of 1937 (42 U.S.C. 1437f), as amended, the family's contribution 
toward rent may not exceed 30 percent of the family's adjusted income.
    (ii) Continued occupancy of current residents. No purchaser of an 
eligible multifamily property may terminate the occupancy of any person 
residing in the property on the date of purchase for purposes of 
meeting the lower-income occupancy requirements. The purchaser shall be 
in compliance with the requirement if each newly vacant dwelling unit 
is reserved for lower-income occupancy until the lower-income occupancy 
requirements are met.
    (iii) Financial infeasibility. The Secretary, the RTC or its 
successor, or the State housing finance agency for the State in which 
the property is located may temporarily reduce the lower-income 
occupancy requirements applicable to a property sold under this program 
if the Secretary or the applicable State housing finance agency 
determines that an owner's compliance with such requirements is no 
longer financially feasible. The owner of the property shall make a 
good-faith effort to return lower-income occupancy to the level 
required by the property's LURA, and the Secretary or the agency, as 
appropriate, shall review the reduction annually to determine whether 
financial infeasibility continues to exist.
    (5) Expression of serious interest. Before the end of the marketing 
period, a qualifying multifamily purchaser may express serious interest 
in purchasing an eligible multifamily property from the RTC. The 
expression of serious interest shall be submitted to the listing broker 
or other marketing specialist and shall provide evidence that the 
purchaser intends to prepare a bona fide offer and has the ability to 
purchase the property. At a minimum, the documentation supporting the 
expression of serious interest would include:
    (i) Confirmation of public, nonprofit, or for-profit status;
    (ii) A financial statement and evidence of a source of equity 
funds; and
    (iii) Certification of no prior exclusion from Federal procurement 
or non-procurement programs.
    (6) Notice of Readiness for Sale. At the end of the marketing 
period, the RTC will send a Notice of Readiness for Sale only to 
qualifying multifamily purchasers that submitted, during the marketing 
period, a written expression of serious interest in an eligible 
multifamily property. This Notice will outline the minimum terms and 
conditions for sale of the property.
    (7) Bona fide offer. Within forty-five days, or such longer time 
period as RTC may determine, after receipt of a Notice of Readiness for 
Sale, a qualifying multifamily purchaser may submit a bona fide offer 
to purchase the property. The Notice of Readiness for Sale will be 
deemed received 5 days after it is mailed. The bona fide offer, as 
specified in the bid package, should include:
    (i) A sales contract constituting a binding offer for a sum certain 
accompanied by a reasonable earnest money deposit specified by the RTC;
    (ii) A conditional commitment for financing from a lender, a 
request for seller financing, or other evidence, acceptable to the RTC, 
of financial resources to consummate the transaction;
    (iii) A written commitment to meet specific lower-income occupancy 
objectives and the process for complying with these objectives;
    (iv) A written description of experience in housing ownership or 
management, preferably of low- and moderate-income housing;
    (v) Reaffirmation or revision of the information submitted with the 
expression of serious interest;
    (vi) A governing body resolution, where applicable, authorizing the 
purchase and affirming the commitment to meet the lower-income 
occupancy requirements.
    (8) Failed offers. (i) If, before the expiration of the period for 
submission of bona fide offers, an offer to purchase a property 
initially accepted by the RTC is subsequently rejected or fails (for 
any reason), the RTC shall accept another offer to purchase the 
property that complies with the terms and conditions established by the 
RTC (if another offer was made during the period for submission of bona 
fide offers). This provision does not require a qualifying multifamily 
purchaser whose offer is accepted during the bona fide offer period to 
purchase the property before the expiration of that period.
    (ii) If, after the expiration of the period for the submission of 
bona fide offers, the offer to purchase a property initially accepted 
by the RTC is subsequently rejected or fails (for any reason), the RTC, 
in its sole discretion, may negotiate with any of the parties who 
submitted bona fide offers on the property during the bona fide offer 
period to secure an offer acceptable to the RTC.
    (9) Preference for sales that benefit lower income groups. (i) In 
choosing among bona fide offers for eligible multifamily property, the 
RTC will give preference to the offer that would reserve the highest 
percentage of dwelling units for occupancy by very low-income families 
and lower-income families and would retain such affordability for the 
longest term (not exceeding the term of the deed restrictions). For 
purposes of making calculations pursuant to this paragraph (b)(9) 
alone, as described in the following examples, ``lower-income 
families'' shall mean families and individuals whose incomes are 
greater than 50 percent of area median income but do not exceed 80 
percent of area median income, as defined under 42 U.S.C. 1437a(b)(2) 
and as determined by the Secretary of HUD, with adjustment for family 
size. The preference will be calculated in accordance with the 
following formula:

    Add to the cash equivalent offer--

0.25% of the cash equivalent offer amount for each 1% of the ``very 
low-income'' units that exceed the minimum 20% very low-income units 
requirement, and
0.125% of the cash equivalent offer amount for each 1% of the 
``lower income'' units that exceed the minimum 15% lower-income 
units requirement.

    Example: Multifamily purchaser A offers to purchase an eligible 
multifamily property for $1,000,000 and agrees to reserve 20% of the 
units for occupancy by very low-income families and 30% for lower-
income families. Multifamily purchaser B offers to purchase the same 
eligible multifamily property for $900,000 and intends to reserve 
50% of the units for occupancy by very low-income families and 50% 
for occupancy by lower-income families. Multifamily purchaser C 
offers to purchase the eligible multifamily property for $1,015,000 
and agrees to reserve 20% of the units for occupancy by very low-
income families and 15% for occupancy by lower-income families. 
Under the preference formula described above, the property should be 
sold to purchaser A for $1,000,000.

A's offer=$1,000,000.
A's preference price=$1,000,000+
    ($1,000,000 x 15 x 0.00125)=$1,000,000+
    $18,750=$1,018,750.
B's offer=$900,000.
B's preference price=$900,000+
    ($900,000 x 30 x 0.0025)+
    ($900,000 x 35 x 0.00125)=$900,000+
    $67,500+$39,375=$1,006,875.
C's offer=$1,015,000. C does not receive a preference because C did 
not set aside any units above the minimum 20% for very low-income 
families and 15% for lower income families.

    (ii) No preference will be given for the substitution of units for 
very low-income families for units required to be maintained for lower-
income families (e.g., an offer which proposes to provide 35% very low-
income units and no lower-income units will be treated no differently 
from one meeting the basic 20% very low- and 15% lower-income unit 
requirement).
    (10) Deed restrictions. (i) Lower-income occupancy requirements 
shall be judicially enforceable against purchasers of eligible 
multifamily property or their successors in interest by affected very 
low- and lower-income families, State housing finance agencies, and any 
agency, corporation, or authority of the United States Government.
    (ii) Lower-income occupancy requirements shall be contained in a 
LURA or other recorded legal instrument which shall require the 
property owner to cooperate with periodic compliance reviews and to pay 
a reasonable fee to cover the cost of the reviews. The LURA or other 
recorded instrument shall reflect any commitment, made in accordance 
with a purchase offer pursuant to paragraph (b)(9) of this section, to 
reserve a higher percentage of dwelling units for occupancy by very 
low-income families and lower-income families and retain such 
affordability for the longest term.
    (11) Offer and sale of multifamily properties in bulk--
    (i) Expression of serious interest. (A) The RTC may, in its 
discretion, list multiple eligible multifamily properties with a 
clearinghouse for bulk sale. During the marketing period, a qualifying 
multifamily purchaser may submit an expression of serious interest in a 
bulk sale package offered by the RTC.
    (B) During the marketing period, a qualifying multifamily purchaser 
also may submit an expression of serious interest in a bulk package of 
its own choice accompanied by a list of eligible multifamily 
properties.
    (ii) Notice of Readiness for Sale. At the end of the marketing 
period, the RTC shall send a Notice of Readiness for Sale to each 
qualifying multifamily purchaser who expressed serious interest in 
making a bulk purchase. The notice will identify the properties in the 
bulk sale package and will outline the minimum terms and conditions for 
the sale of the properties in the bulk sale package. The RTC will 
consider the expressions of serious interest, but reserves the right to 
determine the final composition of the bulk sale package.
    (iii) Bona fide offer. Within 45 days, or such other time period as 
RTC may determine, of receipt of the Notice of Readiness for Sale, a 
qualifying multifamily purchaser may submit a bona fide purchase offer 
for the bulk sale package which conforms to the terms and conditions 
set forth in the Notice of Readiness for Sale. A qualifying multifamily 
purchaser, in its discretion, may submit both individual and bulk 
purchase offers for each multifamily property for which the RTC 
received an expression of serious interest from a purchaser interested 
in an individual sale. The offers shall be in conformance with the 
requirements in paragraph (b)(7) of this section.
    (iv) All other restrictions on the sale of eligible multifamily 
property shall apply to bulk sales of eligible multifamily property. 
Properties purchased in a bulk sale shall be subject to the lower-
income occupancy requirements applicable to properties purchased in a 
single transaction, as such terms are defined in Sec. 1609.2 of this 
part.
    (v) At any time during the marketing period for a bulk package of 
eligible multifamily properties, a qualifying multifamily purchaser may 
submit to the RTC a notice of serious interest with respect to any 
single eligible multifamily property within the bulk package, and the 
RTC may determine to sell such eligible multifamily property to a 
qualifying multifamily purchaser.
    (12) Sale to other purchasers. If the RTC does not receive an 
expression of serious interest with respect to an eligible multifamily 
property during the marketing period, or does not receive a bona fide 
offer for such a property within the period following the date of 
receipt of a Notice of Readiness for Sale, the RTC may sell the 
property, individually or in combination with other properties, to any 
purchaser(s).
    (c) Eligible condominium property--(1) Notice of Marketing Period. 
(i) Subject to the exercise by the RTC of its authority under 
Secs. 1609.9 and 1609.11 of this part, the RTC shall send a Notice of 
Marketing Period to clearinghouses when an eligible condominium 
property is ready for marketing to qualifying condominium purchasers. 
The Notice shall be transmitted by certified mail or any other means of 
communication with date and time confirmation.
    (ii) The Notice shall specify a date that begins the marketing 
period and shall state that the marketing period ends 180 days, or such 
other time period as may be applicable, after such date.
    (iii) The Notice shall state whether the eligible condominium 
property is offered for sale individually or in bulk.
    (iv) The property listing accompanying the Notice shall contain 
basic information about the property and such other information as the 
RTC may determine to be useful.
    (v) The RTC shall allow qualifying condominium purchasers 
reasonable access to eligible properties for purposes of inspection.
    (2) Marketing eligible condominium properties. Prior to listing an 
eligible condominium property with a clearinghouse, the RTC, in its 
sole discretion, will determine whether to offer the property for sale 
individually or as part of a bulk sale package of multiple eligible 
condominium properties. Subject to paragraph (c)(4)(vii) of this 
section, the composition of a bulk sale package will be determined 
solely by the RTC prior to listing the properties with a clearinghouse. 
Properties listed for sale on an individual basis will be available for 
purchase by qualifying households only. Properties listed as part of a 
bulk sale package may be purchased by nonprofit organizations, public 
agencies or for-profit entities. After 90 days of marketing, properties 
listed for individual sales may be relisted as part of a bulk sale 
package for the remaining 90 days.
    (3) Individual sales--(i) Qualifying condominium purchasers; 
qualifying households. To qualify to purchase an eligible condominium 
property, a household must certify in writing to the RTC that its 
income does not exceed 115 percent of area median income, with 
adjustment for family size; and that it intends to occupy the property 
as a principal residence for at least 12 months.
    (ii) Avoidance of displacement. Prior to or during the marketing 
period, the RTC may sell an eligible condominium property to the 
household residing in the property without regard to the income of the 
household, provided that:
    (A) The household was residing in the property at the earlier of 
the time of sale or the time the Notice of Marketing Period was 
provided to the clearinghouse;
    (B) The sale is necessary to avoid the displacement of, and 
unnecessary hardship to, the resident household;
    (C) The resident household intends to occupy the property as its 
principal residence for at least 12 months; and
    (D) The resident household certifies in writing that it intends to 
occupy the property for at least 12 months.
    (iii) Penalty for false certifications. A household that provides 
false or incomplete information regarding its income or that falsely 
certifies that it intends to occupy the property as its principal 
residence can be fined or imprisoned pursuant to 18 U.S.C. 1001 and 31 
U.S.C. 3802. A household that sells the property within 12 months of 
acquisition will be subject to the recapture provisions set forth in 
Sec. 1609.8 of this part.
    (iv) Deed restrictions. An eligible condominium property purchased 
by a qualifying household or a resident household which is subject to 
recapture must be so restricted for the recapture period by deed or 
other recorded instrument.
    (4) Bulk sales to public agencies, nonprofit organizations and for-
profit entities--(i) Lower-income occupancy requirement. To qualify to 
purchase a bulk package of eligible condominium properties, a public 
agency, nonprofit organization, or for-profit entity must certify to 
the RTC that it will make 100 percent of the properties purchased 
available for occupancy by, and will maintain the properties as 
affordable for, lower-income families (including lower-income families 
with members who are veterans) for the remaining useful life of such 
properties, or make the properties available for purchase by any lower-
income family that agrees to occupy the property as a principal 
residence for at least 12 months and certifies in writing that the 
family intends to occupy the property for at least 12 months and is 
subject to the penalties described in paragraph (c)(3)(iii) of this 
section if the household fails to comply with the residency 
requirement.
    (ii) Waiver of 100 percent lower-income occupancy requirement. 
Notwithstanding the 100 percent lower-income occupancy requirement set 
forth in paragraph (c)(4)(i) of this section, the RTC may, in its sole 
discretion, waive the 100 percent lower-income occupancy requirement 
and provide instead that not less than 35 percent of all eligible 
condominium properties purchased shall be made available for occupancy 
by, and be maintained as affordable for, lower-income families for the 
remaining useful life of the property, or be made available for 
purchase by any such family that agrees to occupy the property as a 
principal residence for at least 12 months. Any determination by the 
RTC to reduce the percentage of properties set aside for lower-income 
and very low-income families must be made prior to listing the property 
with a clearinghouse and the applicable percentages shall be specified 
in the Notice of Marketing Period.
    (iii) Rent limitations. (A) To comply with lower-income occupancy 
requirements, the rents charged to very low-income families may not 
exceed 30 percent of the adjusted income of a family whose income 
equals 50 percent of area median income, with adjustment for family 
size; and the rents charged to lower-income families may not exceed 30 
percent of the adjusted income of a family whose income equals 65 
percent of area median income, with adjustment for family size. 
Adjustments for family size for purposes of determining the maximum 
rent that may be charged shall be calculated in the manner set forth in 
paragraph (a)(6) of this section.
    (B) Where a unit is occupied by a family receiving housing 
assistance payments pursuant to section 8 of the United States Housing 
Act of 1937 (42 U.S.C. 1437f), as amended, the family's contribution 
toward rent may not exceed 30 percent of the family's adjusted income.
    (iv) Continued occupancy of current residents. No public agency, 
nonprofit organization, or for-profit entity which purchases eligible 
condominium property may terminate the occupancy of any person residing 
in the property on the date of purchase for purposes of meeting the 
lower-income occupancy requirement. The purchaser shall be in 
compliance with the lower-income occupancy requirement if each newly 
vacant dwelling unit is reserved for lower-income occupancy until such 
requirement is met.
    (v) Financial infeasibility. The Secretary, the RTC or its 
successor, or the State housing finance agency for the State in which 
the property is located may temporarily reduce the lower-income 
occupancy requirements applicable to a property sold under this program 
if the Secretary or the applicable State housing finance agency 
determines that an owner's compliance with such requirements is no 
longer financially feasible. The owner of the property shall make a 
good-faith effort to return lower-income occupancy to the level 
required by the property's LURA, and the agency, as appropriate, shall 
review the reduction annually to determine whether financial 
infeasibility continues to exist.
    (vi) Written commitment before access. Prior to receiving access to 
an eligible condominium property, a public agency, nonprofit 
organization, or for-profit entity must make a written commitment (for 
itself or any related entity) to the listing broker or other marketing 
specialist that it is a qualifying condominium purchaser that will 
satisfy the lower-income occupancy requirements in any eligible 
condominium property for which it requests access, if and when it makes 
an offer to purchase that property. The written commitment should 
acknowledge the terms and conditions governing the sale of eligible 
condominium properties.
    (vii) Location. The RTC may not sell or offer to sell as part of 
the same negotiation or purchase multiple eligible condominium 
properties that are not located in the same condominium project. The 
properties need not be located in the same structure.
    (viii) Preference for sales that benefit lower income groups. In 
choosing among bulk purchase offers from nonprofit organizations, 
public agencies and for-profit entities, the RTC will give preference 
to the offer that would reserve the highest percentage of dwelling 
units for occupancy or purchase by very low-income families and lower-
income families and would retain such affordability for the longest 
term (not exceeding the term of the LURA). The preference will be 
calculated in accordance with the following formula:

    Add to the cash equivalent offer--

0.25% of the cash equivalent offer for each 1% of the units set 
aside for occupancy or purchase by very low-income families, and
in response to bulk sale offers with respect to which the RTC has 
determined to waive the 100 percent lower-income occupancy 
requirement pursuant to paragraph (c)(4)(ii) of this section, 0.125% 
of the cash equivalent offer for each 1% of the units set aside for 
occupancy by lower-income families that exceeds the applicable 
lower-income unit requirement; provided, however, that very low-
income units receiving a 0.25% preference for purposes of the 
preceding clause, shall not also receive a benefit under this 
clause.

    Example 1: Nonprofit organization X offers to purchase 10 
eligible condominium properties for $300,000 and agrees to reserve 5 
of those properties for occupancy or purchase by very low-income 
families. For-profit entity Y offers to purchase the same 10 
eligible condominium properties for $325,000 and intends to reserve 
all of the properties for occupancy and purchase by lower-income 
families (but not very low-income families). Although for-profit 
entity Y has offered more for the properties, the properties should 
be sold to nonprofit organization X for $300,000.

X's offer=$300,000.
X's preference price=$300,000+ ($300,000 x 50 x x0.0025)=$300,000+ 
$37,500=$337,500
Y's offer=$325,000. Y does not receive a preference because Y did 
not set aside any units for occupancy or purchase by very low-income 
families.

    Example 2: The RTC markets 20 eligible condominium properties in 
bulk, with a requirement that only 35% (7) of those properties be 
made available for occupancy by or sale to lower-income families. 
Nonprofit organization X and for-profit entity Y each offer to 
purchase all 20 eligible condominium properties for $600,000. 
Nonprofit organization X agrees to reserve 7 of those properties for 
occupancy or purchase by very low-income families. For-profit entity 
Y agrees to reserve 2 of the properties for occupancy and purchase 
by very low-income families and the remaining 18 properties for 
occupancy by lower-income families that are not very low-income 
families. Under the preference formula, the properties are sold to 
for-profit entity Y.

X's offer=$600,000.
X's preference price=$600,000+
    ($600,000 x 35 x 0.0025)=$600,000+
    $52,500=$652,500
Y's offer=$600,000.
Y's preference price=$600,000+
    ($600,000 x 10 x 0.0025) (for very low-
    income units)+($600,000 x 55 x 00125)=
    $600,000+$15,000+$41,250=$656,250.

    (ix) Deed restrictions.--(A) Eligible condominium properties 
purchased by a public agency, nonprofit organization, or for-profit 
entity for rental or resale to lower-income families must be so 
restricted by a LURA or other recorded instrument which is binding upon 
successors in interest, with the provision that the property may 
subsequently be sold to a lower-income family without further deed 
restrictions (except for recapture restrictions). The deed or other 
recorded legal instrument shall also require the property owner to 
cooperate with periodic compliance reviews and to pay a reasonable fee 
to cover the cost of the review. The LURA or other recorded instrument 
shall reflect any commitment, made in accordance with a purchase offer 
pursuant to paragraph (c)(4)(viii) of this section, to reserve a higher 
percentage of eligible condominium properties for occupancy by or sale 
to very low-income families and lower-income families and retain such 
affordability for the longest term.
    (B) Lower-income occupancy requirements shall be judicially 
enforceable against purchasers of eligible condominium property or 
their successors in interest by affected very low- and lower-income 
families, State housing finance agencies, and any agency, corporation, 
or authority of the United States Government.
    (x) At any time during the marketing period for a bulk package of 
eligible condominium properties, a qualifying single family purchaser 
may submit to the RTC a notice of serious interest with respect to one 
eligible condominium property within the bulk package, and the RTC may 
determine to sell one eligible condominium property to a qualifying 
household.
    (5) Offer and sale. The RTC shall establish a market value for each 
eligible condominium property. The RTC may sell eligible condominium 
property to qualifying households, nonprofit organizations, and public 
agencies without regard to any minimum sales price.
    (6) Sale to other purchasers. If the RTC does not receive a 
purchase offer with the respect to an eligible condominium property 
during the marketing period the RTC may sell the property, individually 
or in combination with other properties, to any other purchasers.
    (d) Extended marketing period. If it determines that an eligible 
multifamily property, eligible condominium property or eligible single 
family property has not been properly offered for the applicable 
marketing period in accordance with section 21A(c) of the Federal Home 
Loan Bank Act (12 U.S.C. 1441a(c)) and the applicable regulations, the 
RTC may provide a second Notice of Marketing Period and offer for sale 
such property. During any such extended marketing period, the 
provisions for marketing and selling the eligible multifamily property, 
eligible condominium property or the eligible single family property 
under this Sec. 1609.7, including the duration of applicable time 
periods (unless shortened by the RTC), shall apply.


Sec. 1609.8  Recapture of profits from resale.

    (a) Property subject to recapture. All eligible single family 
property and eligible condominium property sold to the following 
purchasers shall be subject to the recapture provisions of this section 
if resold by the purchaser within one-year after acquisition of the 
property:
    (1) Qualifying households;
    (2) Lower-income families who purchase the property from a 
nonprofit organization, a public agency or a for-profit entity, in 
accordance with Secs. 1609.7(a), 1609.7(c), 1609.9, or 1609.11 of this 
part; and
    (3) Resident households who purchase the property under the 
avoidance of displacement provisions in Secs. 1609.7(a)(10) or 
1609.7(c)(3) of this part.
    (b) Recapture formula. The RTC shall receive 75 percent of the 
amount of any proceeds from resale (after any broker commissions and 
other expenses of sale) in excess of the sum of:
    (1) The original sale price for the acquisition of the property by 
the purchasers listed in paragraph (a) of this section;
    (2) The actual cost of any improvements to the property made after 
the date of the acquisition; and
    (3) Any closing costs in connection with the acquisition.
    (c) Exceptions to recapture--(1) Relocation. The RTC may, in its 
discretion, waive the applicability of the recapture requirement of 
this Sec. 1609.8 to any qualifying household, lower-income family or 
resident household. The RTC may grant any such waiver only for good 
cause shown, including any necessary relocation of the affected 
household.
    (2) Other recapture provisions apply. The recapture provisions 
shall not apply to any eligible single family property or eligible 
condominium property for which a portion of the sale proceeds or any 
subsidy provided in connection with the acquisition of the property is 
required to be recaptured or repaid under any other Federal, State, or 
local law (including section 143(m) of the Internal Revenue Code of 
1986 (26 U.S.C. 143(m)) or regulation, or under any sale agreement.
    (d) Deed restrictions. The recapture provisions shall be set forth 
in a LURA or other recorded legal instrument.


Sec. 1609.9  Suspension of marketing period for sales to nonprofit 
organizations and public agencies.

    (a) The RTC may, for such period of time as it determines 
appropriate, suspend any of the rules governing the marketing or sale 
of eligible residential property set forth in this part, if during such 
period the RTC negotiates the sale of any such property to a nonprofit 
organization or public agency. If the property is not sold pursuant to 
such negotiations, the requirements of any provisions suspended shall 
apply upon termination of the suspension. Any time periods applicable 
to the disposition of eligible residential property shall be tolled for 
the duration of any suspension under this section.
    (b) When an eligible multifamily property is ready for sale, and 
prior to sending the Notice of Marketing Period to clearinghouses 
pursuant to Sec. 1609.7(b)(1) of this part, the RTC shall suspend such 
marketing period and offer such property exclusively to public agencies 
and nonprofit organizations serving the jurisdiction or area in which 
such property is located. The marketing period for direct sales to 
public agencies and nonprofit organizations shall be forty-five (45) 
days from the date on which the notice of marketing period is mailed by 
the RTC. If the RTC receives no notices of serious interest from public 
agencies or nonprofit organizations during such marketing period, then 
the RTC shall offer such property to all qualifying multifamily 
purchasers pursuant to Sec. 1609.7(b) of this part.
    (c) Upon the sale of an eligible residential property to a 
nonprofit organization or a public agency pursuant to this section, 
such property and its purchaser shall be required to meet the 
requirements of this part, including, with respect to sales to a public 
agency, the provisions of Sec. 1609.11 of this part.


Sec. 1609.10  Reporting.

    (a) Reports to Congress. The RTC shall submit to the Congress 
semiannual reports regarding the disposition of eligible multifamily 
property, eligible condominium property and eligible single family 
property during the most recently concluded reporting period. The first 
report to Congress shall be submitted not later than April 12, 1992. 
Subsequent reports shall be submitted not less than every 6 months 
thereafter.
    (b) Reporting Period. The term ``reporting period'' means the six-
months period for which a report under this Sec. 1609.10 is made. The 
first reporting period shall be the period beginning on August 9, 1989, 
the date of enactment of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989, and ending on December 12, 1991, the date 
of the enactment of the Resolution Trust Corporation Refinancing, 
Restructuring, and Improvement Act of 1991. Each successive reporting 
period shall begin upon the conclusion of the preceding reporting 
period.
    (c) Information Regarding Properties Sold. Each report under this 
Sec. 1609.10 shall contain information regarding each eligible 
multifamily property, eligible condominium property and eligible single 
family property sold by the RTC during the applicable reporting period, 
as follows:
    (1) A description of the property, the location of the property, 
and the number of dwelling units in the property;
    (2) The appraised value of the property;
    (3) The sale price of the property;
    (4) For eligible single family properties--
    (i) The income and race (to the extent allowed by applicable 
federal law) of the purchaser of the property, if the property is sold 
to an occupying household, or is sold for resale to an occupying 
household; and
    (ii) Whether the property is reserved for residency by very low- or 
lower-income families, if the property is sold for use as rental 
property;
    (5) For eligible multifamily properties, the number and percentage 
of dwelling units in the property reserved for occupancy by very low- 
and lower-income families;
    (6) The number of eligible single family properties sold after the 
expiration of the applicable marketing period for each such property;
    (7) The number of eligible multifamily properties sold after the 
expiration of the periods for submission of a notice of serious 
interest and a bona fide offer to purchase;
    (8) The number of eligible single family properties for which the 
marketing period had not expired before the conclusion of the 
applicable reporting period (or had not yet commenced);
    (9) The number of eligible multifamily properties for which the 
marketing period had not expired before the conclusion of the 
applicable reporting period (or had not yet commenced); and
    (10) Summary information about the total number of eligible 
multifamily properties remaining subject to LURAs, the number of units 
set aside for lower-income families and very low-income families in 
such properties, the total number of units occupied by qualifying 
lower-income and very low-income families, and the number of eligible 
multifamily properties which ceased to be subject to LURAs in the 
reporting period.


Sec. 1609.11  Transfer of eligible properties to State housing finance 
agencies, State housing agencies and local housing agencies.

    (a) Transfers to State and local housing agencies. The RTC may 
transfer any eligible multifamily property, eligible condominium 
property or eligible single family property to the State housing 
finance agency or any other State housing agency for the State in which 
the property is located or to any local housing agency in whose 
jurisdiction the property is located. The transfer may be conducted by 
direct sale pursuant to Sec. 1609.9 of this part, by consignment sale, 
or by any other method the RTC considers appropriate. The offering, 
negotiation or preparation for sale of an eligible condominium property 
to a State housing finance agency or State or local housing agency does 
not relieve RTC of its obligation to provide to clearinghouses the 
Notice of Marketing Period required by Sec. 1609.7(c)(1) of this part 
with respect to such property.
    (b) Individual or bulk transfers. The RTC may transfer such 
properties individually or in bulk, as agreed to by the RTC and the 
State housing finance agency or State or local housing agency.
    (c) Acquisition price and discount. The acquisition price paid by 
the State housing finance agency or State or local housing agency for 
the transferred properties shall be an amount agreed to by the RTC and 
the transferee agency.
    (d) Lower-income use. Any State housing finance agency or State or 
local housing agency acquiring properties under this provision must 
agree that it will offer to sell or transfer the properties only as 
follows:
    (1) Eligible single family properties--
    (i) May only be sold to qualifying single family purchasers;
    (ii) If sold to a qualifying single family purchaser that is a 
public agency or a nonprofit organization, shall be subject to the rent 
limitations set forth at Sec. 1609.7(a)(6) of this part;
    (iii) Shall be subject to a LURA or other recorded instrument 
containing the applicable rent, occupancy and resale restrictions, as 
prescribed in Sec. 1609.7(a)(5) of this part; and
    (iv) Shall be subject to recapture as provided in Sec. 1609.8 of 
this part.
    (2) Eligible multifamily properties--
    (i) May only be sold to qualifying multifamily purchasers;
    (ii) Shall be subject to the lower-income occupancy requirements 
applicable to all eligible multifamily property, including the rent 
limitations, requirements as to continued occupancy of current 
residents and provision for financial infeasibility, all as set forth 
at Sec. 1609.7(b)(4) of this part; and
    (iii) Shall be sold in accordance with procedures that would give a 
preference, among financially acceptable offers, to the offer that 
would reserve the highest percentage of dwelling units for occupancy or 
purchase by very low-income families and lower-income families and 
would retain such affordability for the longest term.
    (3) Eligible condominium properties shall be offered by the 
particular State housing finance agency or State or local housing 
agency as either eligible single family property or eligible 
multifamily property and shall be subject to the requirements of 
paragraph (d) (1) or (2) of this section based upon such choice.
    (e) Affordability. The State housing finance agency or State or 
local housing agency shall endeavor to make the properties transferred 
more affordable to lower-income families based upon the extent to which 
the acquisition price of a property is less than the market value of 
the property.


Sec. 1609.12  RTC notice and sale of ineligible residential properties 
and non-AHDP properties.

    (a) To the extent practicable, within a reasonable period of time 
after acquiring title to any non-AHDP property (including an ineligible 
condominium property or an ineligible single family property) or to an 
ineligible multifamily property, the RTC shall provide written notice 
to the clearinghouses. For single family properties, the notice shall 
contain the same information about the properties that the notice 
required under Sec. 1609.7(a)(1)(ii) of this part contains with respect 
to eligible single family properties. For multifamily properties, the 
notice shall contain the same information about the properties that the 
notice required under Sec. 1609.7(b)(1)(ii) of this part contains with 
respect to eligible multifamily properties. For condominium properties, 
the notice shall contain the same information about such properties as 
the notice required under Sec. 1609.7(c)(1)(iv) of this part contains 
with respect to eligible condominium properties. Each notice also shall 
state that the property is not being sold or marketed through the AHDP. 
With respect to a non-AHDP property (including an ineligible 
condominium property or an ineligible single family property), the 
notice shall state that any purchaser may purchase the property at a 
sales price above the maximum value set out in Secs. 1609.2(j)(2), 
1609.2(k)(2) or Sec. 1609.2(m)(2) of this part, as applicable, but only 
a qualifying purchaser may purchase the property at a sales price below 
such maximum value.
    (b) Any person or entity may purchase a non-AHDP property for a 
sales price above the maximum value set out in Secs. 1609.2(j)(2), 
1609.2(k)(2) or Sec. 1609.2(m)(2) of this part, as applicable, but only 
a qualifying purchaser may purchase such a property at a sales price 
below such maximum value. If the RTC is unable to sell a non-AHDP 
property in compliance with the requirements of the preceding sentence, 
then the RTC may dispose of the property in such manner as it 
determines appropriate.

    By order of the Chief Executive Officer of Resolution Trust 
Corporation.

    Dated at Washington, DC, this 5th day of October 1994.

Resolution Trust Corporation.
John M. Buckley, Jr.,
Secretary.
[FR Doc. 94-25072 Filed 10-18-94; 8:45 am]
BILLING CODE 6714-01-M