SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Housing Act of 2000''.

SEC. 2. PREPAYMENT OF RURAL MULTIFAMILY HOUSING LOANS.

    Subsection (c) of section 502 of the Housing Act of 1949 (42 U.S.C. 
1472(c)) is amended to read as follows:
    ``(c) Prepayment of Loans and Preservation of Affordable Housing.--
            ``(1) Loans made or insured before december 22, 1979.--A 
        loan made or insured under section 514 or 515 of this title 
        pursuant to a contract entered into before December 22, 1979, 
        may be prepaid at any time without restriction.
            ``(2) Loans made or insured after december 21, 1979.--A 
        loan made or insured under section 514 or 515 of this title 
        pursuant to a contract entered into after December 21, 1979, 
        but before December 15, 1989, may be prepaid without 
        restriction only if--
                    ``(A) 15 years have elapsed from the date on which 
                the loan was made or insured, if the housing and 
                related facilities have not received assistance under 
                paragraph (1)(B), (2), or (5) of section 521(a) of this 
                title or section 8 of the United States Housing Act of 
                1937;
                    ``(B) 20 years have elapsed from the date on which 
                the loan was made or insured, in the case of any other 
                such loan;
                    ``(C) the Secretary determines, before the end of 
                the period described in subparagraph (A) or (B), that 
                there is no longer a need for such housing and related 
                facilities or that Federal or other financial 
                assistance being provided to the residents of such 
                housing will no longer be provided; or
                    ``(D) before the end of the period described in 
                subparagraph (A) or (B), the owner agrees to extend the 
                low income use restrictions for the remainder of such 
                period.
            ``(3) Loans made or insured after december 14, 1989.--A 
        loan made or insured under section 514 or 515 of this title 
        pursuant to a contract entered into after December 14, 1989, 
        may not be prepaid.
            ``(4) Alternatives to prepayment.--A borrower who is 
        authorized to prepay a loan pursuant to paragraph (1) or (2) 
        may, in the sole discretion of the borrower, request that--
                    ``(A) the Secretary offer incentives pursuant to 
                paragraph (5); or
                    ``(B) the housing and related facilities that are 
                subject to the loan be sold pursuant to paragraph (6) 
                to a nonprofit organization or public agency.
            ``(5) Incentives.--
                    ``(A) In general.--If a borrower who is authorized 
                to prepay a loan pursuant to paragraph (1) or (2) 
                agrees to extend the low income use of the assisted 
                housing and related facilities involved for not less 
                than the 20-year period beginning on the date on which 
                the agreement is executed, the Secretary shall, subject 
                to the availability of amounts for such assistance 
                provided in advance in appropriation Acts, provide one 
                or more of the following forms of assistance:
                            ``(i) Increased return on investment.--An 
                        increase in the rate of return on investment.
                            ``(ii) Reduced interest rate.--A reduction 
                        of the interest rate on the loan through the 
                        provision of interest credits under section 
                        521(a)(1)(B).
                            ``(iii) Additional rental assistance.--
                        Additional rental assistance, or an increase in 
                        assistance provided under existing contracts, 
                        under section 521(a)(2) or under section 8 of 
                        the United States Housing Act of 1937.
                            ``(iv) Equity loan.--An equity loan to the 
                        borrower under paragraphs (1) and (2) of 
                        section 515(c) or under section 515(t).
                            ``(v) Incremental rental assistance.--
                        Incremental rental assistance in connection 
                        with loans pursuant to clauses (ii) and (iv) of 
                        this subparagraph to the extent necessary to 
                        avoid increases in the rental payments of 
                        current tenants not receiving rental assistance 
                        under section 521(a)(2) or under section 8 of 
                        the United States Housing Act of 1937.
                            ``(vi) Excess rent.--In the case of a 
                        project that has received rental assistance 
                        under section 8 of the United States Housing 
                        Act of 1937, authority for the owner to receive 
                        rent in excess of the amount determined 
                        necessary by the Secretary to defray the cost 
                        of long-term repair or maintenance of such a 
                        project.
                    ``(B) Failure to agree on incentives.--If the 
                borrower does not agree to extend the low income use of 
the assisted housing and related facilities involved as provided under 
subparagraph (A), the borrower may prepay the loan pursuant to 
paragraph (1) or (2).
            ``(6) Sale to nonprofit organizations and public 
        agencies.--If a borrower who is authorized to prepay a loan 
        pursuant to paragraph (1) or (2) agrees to sell the assisted 
        housing and related facilities involved to a nonprofit 
        organization or public agency at fair market value, the 
        Secretary, in order to facilitate the sale, may take one or 
        more of the following actions:
                    ``(A) Advance for certain costs relating to 
                acquisition.--To the extent amounts for advances under 
                this clause are made available in advance in 
                appropriation Acts, make an advance to the nonprofit 
                organization or public agency whose offer to purchase 
                is accepted under this paragraph to cover any direct 
                costs (other than the purchase price) incurred by the 
                organization or agency in purchasing and assuming 
                responsibility for the housing and related facilities.
                    ``(B) Assumption of loan.--Approve the assumption, 
                by the nonprofit organization or public agency 
                involved, of the loan made or insured under section 514 
                or 515.
                    ``(C) Transfer of assistance.--To the extent 
                provided in appropriation Acts, transfer any rental 
                assistance payments that are received under section 
                521(a)(2)(A) or under section 8 of the United States 
                Housing Act of 1937, with respect to the housing and 
                related facilities, to the nonprofit organization or 
                public agency involved.
                    ``(D) Purchase loan.--To the extent budget 
                authority for such loans is provided in advance in 
                appropriation Acts, provide a loan under section 
                515(c)(3) to the nonprofit organization or public 
                agency whose offer to purchase is accepted under this 
                paragraph to enable the organization or agency to 
                purchase the housing and related facilities involved.
                    ``(E) Rental assistance.--To the extent amounts for 
                assistance under this clause are provided in advance in 
                appropriation Acts, provide to the nonprofit 
                organization or public agency purchasing the housing 
                and related facilities financial assistance (in the 
                form of monthly payments or forgiveness of debt) in an 
                amount necessary to ensure that the monthly rent 
                payment made by each low income family or person 
                residing in the housing does not exceed the maximum 
                rent permitted under section 521(a)(2)(A).
            ``(7) Funding.--In addition to any other amounts made 
        available for providing incentives under paragraph (5), any 
        amounts resulting from the prepayment of loans made or insured 
        under section 514 or 515 of this title shall be available, to 
        the extent provided in appropriation Acts, for providing 
        incentives under paragraph (5) and for costs of actions under 
        paragraph (6) in connection with sale of projects to nonprofit 
        organizations and public agencies. Such amounts shall be 
        available first for the uses described in the preceding 
        sentence and if not so used, then for other uses in accordance 
        with other provisions of law authorizing such use.
            ``(8) Tenant protection.--If a loan is prepaid pursuant to 
        paragraph (1) or (2), the Secretary shall offer tenant-based 
        assistance under section 8 of the United States Housing Act of 
        1937 to each low income tenant residing in the housing involved 
        at the time of such prepayment, subject to the availability of 
        appropriated amounts for such assistance. If after prepayment 
        the rent for a dwelling unit in such housing exceeds the 
        applicable payment standard established pursuant to section 
        8(o) of such Act, the assistance offered under this paragraph 
        shall be in the form of enhanced vouchers under section 8(t) of 
        such Act, subject to the availability of appropriated amounts 
        for such assistance.''.

SEC. 3. ENHANCED VOUCHER ELIGIBILITY.

    Section 8(t)(2) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(t)(2)) is amended--
            (1) by inserting ``or loan'' after ``of the mortgage''; and
            (2) by inserting ``section 502(c)(8) of the Housing Act of 
        1959 (42 U.S.C. 1472(c)(8)),'' after ``(12 U.S.C. 413(f)),''.

SEC. 4. RURAL RENTAL HOUSING LOAN TERM.

    In the case of a loan made or insured under section 515 of the 
Housing Act of 1949 pursuant to a contract entered into before the date 
of the enactment of this Act, if the Secretary of Agriculture and the 
borrower under the loan agree to such applicability, the amendments 
made by section 735(b)(3) of the Agriculture, Rural Development, Food 
and Drug Administration, and Related Agencies Appropriations Act, 1998 
(Public Law 105-86; 111 Stat. 2110) shall apply to such loan. In no 
case shall the borrower be obligated to accept a new loan pursuant to 
section 515(b)(7) of the Housing Act of 1949 for financing the final 
payment of the original loan.
Amends the United States Housing Act of 1937 to permit enhanced voucher use for loan prepayments.
Rural Housing Act of 2000