113 STAT. 1112 PUBLIC LAW 106-74—OCT. 20, 1999 turnback rate for vouchers, or a lack of comparable rental housing; or "(iii) is a high priority for the local community, as demonstrated by a contribution of State or local funds to the property. In determining the rent level for a contract under this subparagraph, the Secretary shall approve rents sufficient to cover budget-based cost increases and shall give greater consideration to providing rent at a level up to comparable market rents for the market area based on the number of the criteria under clauses (i) through (iv) that the project meets. "(5) COMPARABLE MARKET RENTS AND COMPARISON WITH FAIR MARKET RENTS. — The Secretary shall prescribe the method for determining comparable market rent by comparison with rents charged for comparable properties (as such term is defined in section 512), which may include appropriate adjustments for utility allowances and adjustments to reflect the value of any subsidy (other than section 8 assistance) provided by the Department of Housing and Urban Development. "(b) EXCEPTION RENTS. — "(1) RENEWAL. —In the case of a multifamily housing project described in paragraph (2), pursuant to the request of the owner of the project, the contract for assistsince for the project pursuant to subsection (a) shall provide assistance at the lesser of the following rent levels: "(A) ADJUSTED EXISTING RENTS. — The existing rents under the expiring contract, as adjusted by an operating cost adjustment factor established by the Secretary (which shall not result in a negative adjustment). "(B) BUDGET-BASED RENTS.— Subject to a determination by the Secretary that a rent level under this subparagraph is appropriate for a project, a rent level that provides income sufficient to support a budget-based rent (including a budget-based rent adjustment if justified by reasonable and expected operating expenses). "(2) PROJECTS COVERED.— ^A multifamily housing project described in this paragraph is a multifamily housing project that— "(A) is not an eligible multifamily housing project under section 512(2); or "(B) is exempt from mortgage restructuring under this subtitle pursuant to section 514(h). "(3) MODERATE REHABILITATION PROJECTS. —In the case of a project with a contract under the moderate rehabilitation program, other than a moderate rehabilitation contract under section 441 of the Stewart B. McKinney Homeless Assistance Act, pursuant to the request of the owner of the project, the contract for assistance for the project pursuant to subsection (a) shall provide assistance at the lesser of the following rent levels: "(A) ADJUSTED EXISTING RENTS. —The existing rents under the expiring contract, as adjusted by an operating cost adjustment factor established by the Secretary (which shall not result in a negative adjustment). "(B) FAIR MARICET RENTS. —Fair market rents (less any amounts allowed for tenant-purchased utilities).
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