Page:United States Statutes at Large Volume 101 Part 3.djvu/593

 PUBLIC LAW 100-242—FEB. 5, 1988

101 STAT. 1891

owner's notice, shall consider whether there are additional actions that can be taken by the Secretary to avoid the termination, and shall ensure a proper adjustment of the contract rents for the project in conformity with the requirements of paragraph (2). The Secretary shall issue a written finding of the legality of the termination and the reasons for the termination, including the actions considered or taken to avoid the termination. For purposes of this paragraph, the term 'termination' means the expiration of the assistance contract or an owner's refusal to renew the assistance contract.". (b) ADJUSTMENT OF ALLOWABLE RENT.—Section 8(c) of the United States Housing Act of 1937 (as amended by subsection (a) of this section) is further amended by adding at the end the following new paragraph: "(10) If an owner provides notice of proposed termination under paragraph (9) and the contract rent is lower than the maximum monthly rent for units assisted under subsection (b)(l), the Secretary shall adjust the contract rent based on the maximum monthly rent for units assisted under subsection (b)(1) and the value of the lower income housing after rehabilitation.". (c) LOAN MANAGEMENT AND PROPERTY DISPOSITION PROGRAMS.—

Contracts.

Contracts.

Section 8 of the United States Housing Act of 1937 (as amended by section 149 of this Act) is further amended by adding at the end the following new subsection: "(v)(1) Each contract entered into by the Secretary under this section for loan management assistance shall be for a term of 180 months. "(2) The Secretary shall extend any expiring contract entered into under this section for loan management assistance or execute a new contract, if the owner agrees to continue providing housing for lower income families during the term of the contract.". SEC. 263. SECTION 515 OPERATING RESERVE AND EQUITY CONTRIBUTION REQUIREMENTS.

Section 515 of the Housing Act of 1949 (as amended by section 242) is further amended by adding at the end the following new subsection: "(r) The Secretary— "(1) may require that the initial operating reserve under this section may be in the form of an irrevocable letter of credit; and "(2) may not require more than a 3 percent contribution to equity.".

TITLE III—RURAL HOUSING SEC. 301. PROGRAM AUTHORIZATIONS.

(a) INSURANCE AND GUARANTEE AUTHORITY.—Section 513(a)(l) of the Housing Act of 1949 is amended to read as follows: "(a)(1) The Secretary may, to the extent approved in appropriation Acts, insure and guarantee loans under this title during fiscal years 1988 and 1989 in aggregate amounts not to exceed $1,775,395,000 and $1,794,925,000, respectively, as follows: "(A) For insured or guaranteed loans under section 502 on behalf of borrowers receiving assistance under section 521(a)(l) or receiving guaranteed loans pursuant to section 304 of the Housing and Community Development Act of 1987,

42 USC 1483.

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