control

(2) Project eligibility A project may be eligible for capital assistance under this subsection under a grant or loan only— (A) if— (i) the project is or was insured under any provision of subchapter II of this chapter; (ii) the project was assisted under section 1437f of title 42 on October 27, 1997 ; and (iii) the project mortgage was not held by a State agency as of October 27, 1997 ; (B) if the project owner agrees to maintain the housing quality standards as required by the Secretary; (C) the project owner enters into such binding commitments as the Secretary may require (which shall be applicable to any subsequent owner) to ensure that the owner will continue to operate the project in accordance with all low-income affordability restrictions for the project in connection with the Federal assistance for the project for a period having a duration that is not less than the period referred to in paragraph (5)(C); (D) (i) if the Secretary determines that the owner or purchaser of the project has not engaged in material adverse financial or managerial actions or omissions with regard to such project; or (ii) if the Secretary elects to make such determination, that the owner or purchaser of the project has not engaged in material adverse financial or managerial actions or omissions with regard to other projects of such owner or purchaser that are federally assisted or financed with a loan from, or mortgage insured or guaranteed by, an agency of the Federal Government; (iii) material adverse financial or managerial actions or omissions, as the terms are used in this subparagraph, include— (I) materially violating any Federal, State, or local law or regulation with regard to this project or any other federally assisted project, after receipt of notice and an opportunity to cure; (II) materially breaching a contract for assistance under section 1437f of title 42 , after receipt of notice and an opportunity to cure; (III) materially violating any applicable regulatory or other agreement with the Secretary or a participating administrative entity, after receipt of notice and an opportunity to cure; (IV) repeatedly failing to make mortgage payments at times when project income was sufficient to maintain and operate the property; (V) materially failing to maintain the property according to housing quality standards after receipt of notice and a reasonable opportunity to cure; or (VI) committing any act or omission that would warrant suspension or debarment by the Secretary; and (iv) the term “owner” as used in this subparagraph, in addition to it having the same meaning as in section 1437f(f) of title 42 , also means an affiliate of the owner; the term “purchaser” as used in this subsection means any private person or entity, including a cooperative, an agency of the Federal Government, or a public housing agency, that, upon purchase of the project, would have the legal right to lease or sublease dwelling units in the project, and also means an affiliate of the purchaser; the terms “affiliate of the owner” and “affiliate of the purchaser” means any person or entity (including, but not limited to, a general partner or managing member, or an officer of either) that controls an owner or purchaser, is controlled by an owner or purchaser, or is under common control with the owner or purchaser; the term “control” means the direct or indirect power (under contract, equity ownership, the right to vote or determine a vote, or otherwise) to direct the financial, legal, beneficial or other interests of the owner or purchaser; and (E) if the project owner demonstrates to the satisfaction of the Secretary— (i) using information in a comprehensive needs assessment, that capital assistance under this subsection from a grant or loan (as appropriate) is needed for rehabilitation of the project; and (ii) that project income is not sufficient to support such rehabilitation.

Source

12 USC § 1715z-1(s)()(2)


Scoping language

in this subparagraph
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