Affordable Housing Preservation and Protection Act of 2024

As used in this section—

(1) the term multifamily housing project means a project consisting of five or more dwelling units assisted or approved to receive a transfer of assistance, insured, or with a loan held by the Secretary or a State or State agency in part or in whole pursuant to—

(A) section 8(b) of the United States Housing Act of 1937 (42 U.S.C. 1437f(b));

(B) section 202 of the Housing Act of 1959 (12 U.S.C. 1701q);

(C) section 202 of the Housing Act of 1959 (former 12 U.S.C. 1701q), as such section existed before the enactment of the Cranston-Gonzalez National Affordable Housing Act (Public Law 101–625; 104 Stat. 4079);

(D) section 811 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013);

(E) section 236 of the National Housing Act (12 U.S.C. 1715z–1);

(F) a housing assistance payments contract for project-based rental assistance; or

(G) a Second Component contract for project-based rental assistance converted in accordance with the matter under the heading rental assistance demonstration under the heading management and administration under the heading Department of Housing and Urban Development in title II of division C of the Consolidated and Continuing Appropriations Act, 2012 (42 U.S.C. 1437f note; Public Law 112–55); and

(2) the term necessary physical improvements means new construction or capital improvements to an existing multifamily housing project that the Secretary determines are necessary to address the deficiencies or that rise to such a level that delaying physical improvements to the project would be detrimental to the longevity of the project as suitable housing for occupancy.

To such extent or in such amounts as provided in appropriations Acts, the Secretary of Housing and Urban Development (in this section referred to as the Secretary) may offer capital assistance under this section to owners or sponsors of eligible multifamily housing projects for the purpose of ensuring the long-term preservation of safe, affordable housing.

The Secretary may use funds under this section for—

(1) the cost of providing direct loans, which may be forgivable, and the costs of modifying such loans, to owners or sponsors of distressed multifamily housing projects for the purpose of making necessary physical improvements, including to subsidize gross obligations for the principal amount of such loans, subject to the terms and conditions in subsection (d), to fund projects that improve physical conditions; and

(2) administering the implementation of this section, including—

(A) the cost of contracts or cooperative agreements to support implementation; and

(B) costs related to outreach and consultation with residents of distressed multifamily housing projects and other community stakeholders.

Owners or sponsors of multifamily housing projects who meet each of the following requirements shall be eligible for loan assistance under this section:

(A) The multifamily housing project, including any project from which assistance has been approved to be transferred has deficiencies that cause the project to be at risk of physical obsolescence or economic nonviability.

(B) The actual rents received by the owner or sponsor of the distressed property would not adequately sustain the debt needed to make necessary physical improvements.

(C) The owner or sponsor meets any such additional eligibility criteria as the Secretary determines to be appropriate, considering factors that contributed to the project’s deficiencies.

(D) The owner or sponsor agrees to extend or establish an affordable housing use agreement for 30 years and agrees to accept a renewal of a housing assistance payments contract in any year in which a renewal is offered by the Secretary.

Each recipient of loan assistance under this section may only use such loan assistance for eligible uses, as determined by the Secretary, to result in necessary physical improvements.

The Secretary shall only provide loan assistance to an owner or sponsor of a multifamily housing project when such assistance, considered with other financial resources available to the owner or sponsor, is needed to make the necessary physical improvements.

Loans provided under this section shall bear interest at 1 percent, and at origination shall have a repayment period coterminous with the affordability period described in paragraph (1)(D), with the frequency and amount of repayments to be determined by requirements established by the Secretary.

With respect to loans provided under this section, the Secretary may take any of the following actions if the Secretary determines that doing so will preserve affordability of the project:

(A) Waive any due on sale or due on refinancing restriction.

(B) Consent to the terms of new debt to which the loans may be subordinate, even if such new debt would impact the repayment of the loan.

(C) Extend the term of the loan.

(D) Forgive the loan in whole or in part.

Each recipient of loan assistance under this section shall secure at least 20 percent of the total cost needed to make the necessary physical improvements from non-Federal sources, except in cases where the Secretary determines that a lack of financial resources qualifies a loan recipient for—

(A) a reduced contribution below 20 percent; or

(B) an exemption to the matching contribution requirement.

The Secretary may establish additional conditions for loan eligibility provided under this section as the Secretary determines to be appropriate.

In the case of any property with respect to which assistance is provided under this section that has a mortgage insured by the Secretary, the Secretary may use funds available under this section as necessary to pay for the costs of modifying such loan.

The Secretary shall take steps to ensure the effective implementation of this section, including ensuring—

(A) timely execution of rehabilitation activities funded by assistance under this section;

(B) ongoing owner compliance with contract or program requirements; and

(C) outreach to and consultation with residents of distressed properties.

The Secretary shall have the authority to establish by notice any requirements that the Secretary determines are necessary for timely and effective implementation of the program and expenditure of funds appropriated, which requirements shall take effect upon issuance.

There are authorized to be appropriated to the Secretary to carry out this section—

(1) for fiscal year 2025, $25,000,000; and

(2) for each fiscal year thereafter, such sums as may be necessary.