Recent
Announcements

H.R. 4002, the Rural Housing Preservation Act of 2007, was introduced in the House of Representatives on October 30, 2007 by Reps. Lincoln Davis (D-Tennessee) and Geoff Davis (R-Kentucky). The bill is in some ways a successor to last year's H.R. 5039, which passed the House Committee on Financial Services in 2006 but was never considered by the full House. Unlike H.R. 5039, however, H.R. 4002 would not remove prepayment restrictions on pre-1989 Section 515 properties.

H.R. 4002 addresses the need for revitalization and refinancing of properties developed under the U.S. Department of Agriculture (USDA) Section 515 Rural Rental Housing Program. It would:

1. create a new Section 544 preservation program that would:
• provide the kind of financial restructuring options that have been available through USDA's Multi-Family Housing Preservation and Revitalization Restructuring Program (MPR) demonstration, including loan forgiveness, payment deferrals, reamortizations, grants, loans, loan guarantees, and others;
• authorize USDA to use third parties – participating administrative entities – as in the Mark to Market program for U.S. Department of Housing and Urban Development (HUD) rental properties;
• require use restrictions (i.e., continued affordability for low-income tenants) lasting 30 years or the term of USDA's loan, whichever is longer, for any property participating in the revitalization program;
• cap rents for all tenants in revitalized properties at 30 percent of income, providing new USDA Section 542 vouchers as necessary (not new Section 521 Rental Assistance (RA), although USDA would still be able to offer new RA as a preservation incentive to owners who requested prepayment);
• be offered to an owner who was awarded damages through a prepayment lawsuit only if the owner contributed the lesser of 50 percent of the damage award or $100,000 towards revitalizing the property; and
• not be available to owners who were participating in active lawsuits, had a history of poor property management, were in default on a Section 515 loan, or the like.
2. add two new types of vouchers under Section 542 for:
   • tenants in Section 515 properties preserved under Section 544 who did not have Section 521 or Section 8 rental assistance and needed aid to keep their rent costs at 30 percent of income; and
   • tenants of Section 515 properties whose mortgages were prepaid or foreclosed, whether the tenants relocated or remained in the properties.

H.R. 4002 is not expected to be considered in the House this year. House Financial Services Committee Chairman Barney Frank (D-Massachusetts) has said preservation of both HUD and USDA properties will be a priority for his committee in 2008.

The bill was developed with input from a variety of stakeholders involved in rural preservation. The Housing Assistance Council is grateful to congressional staff for including HAC in these discussions.

H.R. 4002 is available here in PDF format. Details, as well as the text of the bill, are available at http://thomas.loc.gov (search for the bill by number).

A printable version of this summary and the summary of H.R. 3783 is available here. For more information about rural rental housing preservation, visit HAC's preservation page here.

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Posted: October 31, 2007
Updated: November 1, 2007