[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2790 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 2790
To reform rural housing programs, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 13, 2023
Ms. Smith (for herself and Mr. Rounds) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To reform rural housing programs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Rural Housing
Service Reform Act of 2023''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--STREAMLINING AND UPDATES
Sec. 101. Application of multifamily mortgage foreclosure procedures to
multifamily mortgages held by the Secretary
of Agriculture and preservation of the
rental assistance contract upon
foreclosure.
Sec. 102. Study on rural housing loans for housing for low- and
moderate-income families.
Sec. 103. Authorization of appropriations for staffing needs and
information technology upgrades.
TITLE II--RURAL HOUSING PRESERVATION AND REVITALIZATION
Sec. 201. Permanent establishment of housing preservation and
revitalization program.
Sec. 202. Eligibility for rural housing vouchers.
Sec. 203. Amount of voucher assistance.
Sec. 204. Rental assistance contract authority.
Sec. 205. Funding for technical improvements.
TITLE III--NATIVE CDFI RELENDING
Sec. 301. Native CDFI relending program.
TITLE IV--SECTION 504 LOANS AND GRANTS
Sec. 401. Modifications to loans and grants for minor improvements to
farm housing and buildings.
TITLE V--RURAL COMMUNITY DEVELOPMENT INITIATIVE GRANTS
Sec. 501. Rural Community Development Initiative.
TITLE VI--REPORTS
Sec. 601. Annual report on rural housing programs.
Sec. 602. GAO report on Rural Housing Service technology.
TITLE VII--RURAL HOUSING VOUCHER PROGRAM
Sec. 701. Adjustment to rural development voucher amount.
TITLE VIII--TRANSFERS TO NONPROFIT ORGANIZATIONS
Sec. 801. Transfer of multifamily rural housing projects.
TITLE IX--TERM OF DIRECT LOANS MADE BY THE RURAL HOUSING SERVICE
Sec. 901. Extension of loan term.
TITLE I--STREAMLINING AND UPDATES
SEC. 101. APPLICATION OF MULTIFAMILY MORTGAGE FORECLOSURE PROCEDURES TO
MULTIFAMILY MORTGAGES HELD BY THE SECRETARY OF
AGRICULTURE AND PRESERVATION OF THE RENTAL ASSISTANCE
CONTRACT UPON FORECLOSURE.
(a) Multifamily Mortgage Procedures.--Section 363 of the
Multifamily Mortgage Foreclosure Act of 1981 (12 U.S.C. 3702) is
amended--
(1) in paragraph (2)--
(A) in subparagraph (D), by striking ``and'' at the
end;
(B) in subparagraph (E), by striking the period at
the end and inserting ``; or''; and
(C) by adding at the end the following:
``(F) section 514, 515, or 538 of the Housing Act
of 1949 (42 U.S.C. 1484, 1485, 1490p).''; and
(2) in paragraph (10)--
(A) by striking ``means the Secretary'' and
inserting the following: ``means--
``(A) the Secretary'';
(B) in subparagraph (A), as so designated, by
striking the period at the end and inserting ``, with
respect to a multifamily mortgage described in
subparagraph (A), (B), (C), (D), or (E) of paragraph
(2); and''; and
(C) by adding at the end the following:
``(B) the Secretary of Agriculture, with respect to
a multifamily mortgage described in paragraph
(2)(F).''.
(b) Preservation of Contract.--Section 521(d) of the Housing Act of
1949 (42 U.S.C. 1490a(d)) is amended by adding at the end the
following:
``(3) Notwithstanding any other provision of law in managing and
disposing of any multifamily property that is owned or has a mortgage
held by the Secretary, and during the process of foreclosure on any
property with a contract for rental assistance under this section--
``(A) the Secretary shall maintain any rental assistance
payments that are attached to any dwelling units in the
property; and
``(B) the rental assistance contract may be used to provide
further assistance to existing projects under 514, 515, or
516.''.
SEC. 102. STUDY ON RURAL HOUSING LOANS FOR HOUSING FOR LOW- AND
MODERATE-INCOME FAMILIES.
Not later than 6 months after the date of enactment of this Act,
the Secretary of Agriculture shall conduct a study and submit to
Congress a publicly available report on the loan program under section
521 of the Housing Act of 1949 (42 U.S.C. 1490a), including--
(1) the total amount provided by the Secretary in subsidies
under such section 521 to borrowers with loans made pursuant to
section 502 of such Act (42 U.S.C. 1472);
(2) how much of the subsidies described in paragraph (1)
are being recaptured; and
(3) the amount of time and costs associated with
recapturing those subsidies.
SEC. 103. AUTHORIZATION OF APPROPRIATIONS FOR STAFFING NEEDS AND
INFORMATION TECHNOLOGY UPGRADES.
There is authorized to be appropriated to the Secretary of
Agriculture for each of fiscal years 2024 through 2028 such sums as may
be necessary for increased staffing needs and information technology
upgrades to support all Rural Housing Service programs.
TITLE II--RURAL HOUSING PRESERVATION AND REVITALIZATION
SEC. 201. PERMANENT ESTABLISHMENT OF HOUSING PRESERVATION AND
REVITALIZATION PROGRAM.
Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.) is
amended by adding at the end the following:
``SEC. 545. HOUSING PRESERVATION AND REVITALIZATION PROGRAM.
``(a) Establishment.--The Secretary shall carry out a program under
this section for the preservation and revitalization of multifamily
rental housing projects financed under section 514, 515, or 516.
``(b) Notice of Maturing Loans.--
``(1) To owners.--On an annual basis, the Secretary shall
provide written notice to each owner of a property financed
under section 514, 515, or 516 that will mature within the 4-
year period beginning upon the provision of the notice, setting
forth the options and financial incentives that are available
to facilitate the extension of the loan term or the option to
decouple a rental assistance contract pursuant to subsection
(f).
``(2) To tenants.--
``(A) In general.--On an annual basis, for each
property financed under section 514, 515, or 516, not
later than the date that is 2 years before the date
that the loan will mature, the Secretary shall provide
written notice to each household residing in the
property that informs them of--
``(i) the date of the loan maturity;
``(ii) the possible actions that may happen
with respect to the property upon that
maturity; and
``(iii) how to protect their right to
reside in federally assisted housing, or how to
secure housing voucher, after that maturity.
``(B) Language.--Notice under this paragraph shall
be provided in plain English and shall be translated to
other languages in the case of any property located in
an area in which a significant number of residents
speak such other languages.
``(c) Loan Restructuring.--Under the program under this section, in
any circumstance in which the Secretary proposes a restructuring to an
owner or an owner proposes a restructuring to the Secretary, the
Secretary may restructure such existing housing loans, as the Secretary
considers appropriate, for the purpose of ensuring that those projects
have sufficient resources to preserve the projects to provide safe and
affordable housing for low-income residents and farm laborers, by--
``(1) reducing or eliminating interest;
``(2) deferring loan payments;
``(3) subordinating, reducing, or reamortizing loan debt;
``(4) providing other financial assistance, including
advances, payments, and incentives (including the ability of
owners to obtain reasonable returns on investment) required by
the Secretary; and
``(5) permanently removing a portion of the housing units
from income restrictions when sustained vacancies have
occurred.
``(d) Renewal of Rental Assistance.--
``(1) In general.--When the Secretary proposes to
restructure a loan or agrees to the proposal of an owner to
restructure a loan pursuant to subsection (c), the Secretary
shall offer to renew the rental assistance contract under
section 521(a)(2) for a 20-year term that is subject to annual
appropriations, provided that the owner agrees to bring the
property up to such standards that will ensure maintenance of
the property as decent, safe, and sanitary housing for the full
term of the rental assistance contract.
``(2) Additional rental assistance.--With respect to a
project described in paragraph (1), if rental assistance is not
available for all households in the project for which the loan
is being restructured pursuant to subsection (c), the Secretary
may extend such additional rental assistance to unassisted
households at that project as is necessary to make the project
safe and affordable to low-income households.
``(e) Restrictive Use Agreements.--
``(1) Requirement.--As part of the preservation and
revitalization agreement for a project, the Secretary shall
obtain a restrictive use agreement that is recorded and
obligates the owner to operate the project in accordance with
this title.
``(2) Term.--
``(A) No extension of rental assistance contract.--
Except when the Secretary enters into a 20-year
extension of the rental assistance contract for a
project, the term of the restrictive use agreement for
the project shall be consistent with the term of the
restructured loan for the project.
``(B) Extension of rental assistance contract.--If
the Secretary enters into a 20-year extension of the
rental assistance contract for a project, the term of
the restrictive use agreement for the project shall be
for the longer of--
``(i) 20 years; or
``(ii) the remaining term of the loan for
that project.
``(C) Termination.--The Secretary may terminate the
20-year use restrictive use agreement for a project
before the end of the term of the agreement if the 20-
year rental assistance contract for the project with
the owner is terminated at any time for reasons outside
the control of the owner.
``(f) Decoupling of Rental Assistance.--
``(1) Renewal of rental assistance contract.--If the
Secretary determines that a maturing loan for a project cannot
reasonably be restructured in accordance with subsection (c)
because it is not financially feasible or the owner does not
agree with the proposed restructuring, and the project was
operating with rental assistance under section 521 and the
recipient is a borrower under section 514 or 515, the Secretary
may renew the rental assistance contract, notwithstanding any
provision of section 521, for a term, subject to annual
appropriations, of 20 years.
``(2) Additional rental assistance.--With respect to a
project described in paragraph (1), if rental assistance is not
available for all households in the project for which the loan
is being restructured pursuant to subsection (c), the Secretary
may extend such additional rental assistance to unassisted
households at that project as is necessary to make the project
safe and affordable to low-income households.
``(3) Rents.--Any agreement to extend the term of the
rental assistance contract under section 521 for a project
shall obligate the owner to continue to maintain the project as
decent, safe and sanitary housing and to operate the
development as affordable housing in a manner that meets the
goals of this title, except that the Secretary shall establish
standards for the setting of rents.
``(4) Conditions for approval.--
``(A) Plan.--Before the approval of a rental
assistance contract authorized under this section, the
Secretary shall require the owner to submit to the
Secretary a plan that identifies financing sources and
a timetable for renovations and improvements determined
to be necessary by the Secretary to maintain and
preserve the project.
``(B) Automatic approval.--If a plan submitted
under subparagraph (A) is not acted upon by the
Secretary within 30 days of the submission, the rental
assistance contract is automatically approved for not
more than a 1-year period.
``(g) Multifamily Housing Transfer Technical Assistance.--Under the
program under this section, the Secretary may provide grants to
qualified nonprofit organizations and public housing agencies to
provide technical assistance, including financial and legal services,
to borrowers under loans under this title for multifamily housing to
facilitate the acquisition or preservation of such multifamily housing
properties in areas where the Secretary determines there is a risk of
loss of affordable housing.
``(h) Administrative Expenses.--Of any amounts made available for
the program under this section for any fiscal year, the Secretary may
use not more than $1,000,000 for administrative expenses for carrying
out such program.
``(i) Authorization of Appropriations.--There is authorized to be
appropriated for the program under this section $200,000,000 for each
of fiscal years 2024 through 2028.
``(j) Rulemaking.--
``(1) In general.--Not later than 180 days after the date
of enactment of the Rural Housing Service Reform Act of 2023,
the Secretary shall--
``(A) publish an advance notice of proposed
rulemaking; and
``(B) consult with appropriate stakeholders.
``(2) Interim final rule.--Not later than 1 year after the
date of enactment of the Rural Housing Service Reform Act of
2023, the Secretary shall publish an interim final rule to
carry out this section.''.
SEC. 202. ELIGIBILITY FOR RURAL HOUSING VOUCHERS.
Section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) is amended
by adding at the end the following:
``(c) Eligibility of Households in Sections 514, 515, and 516
Projects.--The Secretary may provide rural housing vouchers under this
section for any low-income household (including those not receiving
rental assistance) residing for a term longer than the remaining term
of their lease that is in effect on the date of mortgage maturity, in a
property financed with a loan under section 514 or 515 or a grant under
section 516 that has--
``(1) been prepaid with or without restrictions imposed by
the Secretary pursuant to section 502(c)(5)(G)(ii)(I);
``(2) been foreclosed; or
``(3) matured after September 30, 2005.''.
SEC. 203. AMOUNT OF VOUCHER ASSISTANCE.
Notwithstanding any other provision of law, in the case of any
rural housing voucher provided pursuant to section 542 of the Housing
Act of 1949 (42 U.S.C. 1490r), the amount of the monthly assistance
payment for the household on whose behalf the assistance is provided
shall be determined as provided in subsection (a) of such section 542,
including providing for interim and annual review of the voucher amount
in the event of a change in household composition or income or rental
rate.
SEC. 204. RENTAL ASSISTANCE CONTRACT AUTHORITY.
Section 521(d) of the Housing Act of 1949 (42 U.S.C. 1490a(d)), as
amended by section 101(b), is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively;
(B) by inserting after subparagraph (A) the
following:
``(B) upon request of an owner of a project financed under
section 514 or 515, the Secretary is authorized to enter into
renewal of such agreements for a period of 20 years or the term
of the loan, whichever is shorter, subject to amounts made
available in appropriations Acts;'';
(C) in subparagraph (C), as so redesignated, by
striking ``subparagraph (A)'' and inserting
``subparagraphs (A) and (B)''; and
(D) in subparagraph (D), as so redesignated, by
striking ``subparagraphs (A) and (B)'' and inserting
``subparagraphs (A), (B), and (C)'';
(2) in paragraph (2), by striking ``shall'' and inserting
``may''; and
(3) by adding at the end the following:
``(4) In the case of any rental assistance contract authority that
becomes available because of the termination of assistance on behalf of
an assisted family--
``(A) at the option of the owner of the rental project, the
Secretary shall provide the owner a period of not more than 6
months before unused assistance is made available pursuant to
subparagraph (B) during which the owner may use such assistance
authority to provide assistance on behalf of an eligible
unassisted family that--
``(i) is residing in the same rental project that
the assisted family resided before the termi