The owner of a property subject to a plan of action or use agreement would be entitled to distribute:
All surplus cash generated annually by the property;
Any funds accumulated in a residual receipts account, upon request made to the Secretary and notwithstanding any conflicting provision in the use agreement. This applies only if the individual is in compliance with the use agreement.
An owner distributing surplus cash would be required to:
Continue to operate the property in accordance with the affordability requirements of its use agreement for its remaining useful life;
Renew or extend any project-based rental assistance contract for at least 20 years, as required by the property’s plan of action;
Have the option to extend the contract to a 20-year term if he or she has an existing multi-year project-based rental assistance totalling less than 20 years.
Neither the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA) or any plan of action or use agreement implementing it would restrict an owner from obtaining a new loan or refinancing an existing loan secured by a low-income housing project. Owners also would not be prohibited from distributing the proceeds of such alone, except in cases where — along with refinancing:
The owner provides for adequate rehabilitation pursuant to a capital needs assessment to ensure long-term sustainability of the property satisfactory to the lender or bond issuance agency;
Resulting budget-based rent increases includes debt service on the new financing, has commercially reasonable debt service coverage, and replacement reserves as required by the lender;
Rent increases for units not covered by a project-based rental subsidy contract or tenant-based rental subsidy are limited to 10 percent.