--- kind: "section" citation: "12 U.S.C. § 4103" title: "12" title_heading: "Banks and Banking" number: "4103" heading: "Appraisal and preservation value of eligible low-income housing" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/12/4103" units: - "Chapter 42 — Low-Income Housing Preservation and Resident Homeownership" - "Subchapter I — Prepayment of Mortgages Insured under National Housing Act" --- # §4103. Appraisal and preservation value of eligible low-income housing - (a) **Appraisal—** Upon receiving notice of intent regarding an [eligible low-income housing](/usc/12/4119.md?p=1) project indicating an intent to extend the [low-income affordability restrictions](/usc/12/4119.md?p=3) under [section 4109 of this title](/usc/12/4109.md) or transfer the housing under [section 4110 of this title](/usc/12/4110.md), the [Secretary](/usc/12/4119.md?p=10) shall provide for determination of the [preservation value](/usc/12/4119.md?p=9) of the housing, as follows: - (1) **Appraisers—** The [preservation value](/usc/12/4119.md?p=9) shall be determined by 2 independent appraisers, one of whom shall be selected by the [Secretary](/usc/12/4119.md?p=10) and one of whom shall be selected by the [owner](/usc/12/4119.md?p=7). The appraisals shall be conducted not later than 4 months after filing the notice of intent under [section 4102 of this title](/usc/12/4102.md), and the [owner](/usc/12/4119.md?p=7) shall submit to the [Secretary](/usc/12/4119.md?p=10) the appraisal made by the [owner](/usc/12/4119.md?p=7)’s selected appraiser not later than 90 days after receipt of the notice under [paragraph (2)](#a-2). If the 2 appraisers fail to agree on the [preservation value](/usc/12/4119.md?p=9), and the [Secretary](/usc/12/4119.md?p=10) and the [owner](/usc/12/4119.md?p=7) also fail to agree on the [preservation value](/usc/12/4119.md?p=9), the [Secretary](/usc/12/4119.md?p=10) and the [owner](/usc/12/4119.md?p=7) shall jointly select and jointly compensate a third appraiser, whose appraisal shall be binding on the parties. - (2) **Notice—** Not later than 30 days after the filing of a notice of intent to seek incentives under [section 4109 of this title](/usc/12/4109.md) or transfer the property under [section 4110 of this title](/usc/12/4110.md), the [Secretary](/usc/12/4119.md?p=10) shall provide written notice to the [owner](/usc/12/4119.md?p=7) filing the notice of intent of— - (A) the need for the [owner](/usc/12/4119.md?p=7) to acquire an appraisal of the property under [paragraph (1)](#a-1); - (B) the rules and guidelines for such appraisals; - (C) the filing deadline for submission of the appraisal under [paragraph (1)](#a-1); - (D) the need for an appraiser retained by the [Secretary](/usc/12/4119.md?p=10) to inspect the housing and project financial records; and - (E) any delegation to the appropriate [State](/usc/12/1707.md?p=d) agency by the [Secretary](/usc/12/4119.md?p=10) of responsibilities regarding the appraisal. - (3) **Timeliness—** The [Secretary](/usc/12/4119.md?p=10) may approve a plan of action to receive incentives under section [4109](/usc/12/4109.md) or [4110](/usc/12/4110.md) of this title only based upon an appraisal conducted in accordance with this subsection that is not more than 30 months old. - (b) **Preservation value—** For purposes of this subchapter, the [preservation value](/usc/12/4119.md?p=9) of [eligible low-income housing](/usc/12/4119.md?p=1) appraised under this section shall be— - (1) for purposes of extending the [low-income affordability restrictions](/usc/12/4119.md?p=3) and receiving incentives under [section 4109 of this title](/usc/12/4109.md), the fair market value of the property based on the highest and best use of the property as residential rental housing; and - (2) for purposes of transferring the property under section [4110](/usc/12/4110.md) or [4111](/usc/12/4111.md) of this title, the fair market value of the housing based on the highest and best use of the property. - (c) **Guidelines—** The [Secretary](/usc/12/4119.md?p=10) shall provide written guidelines for appraisals of [preservation value](/usc/12/4119.md?p=9), which shall assume repayment of the existing federally assisted [mortgage](/usc/12/1707.md?p=a), termination of the existing [low-income affordability restrictions](/usc/12/4119.md?p=3), simultaneous termination of any Federal rental assistance, and costs of compliance with any [State](/usc/12/1707.md?p=d) or local laws of general applicability. The guidelines may permit reliance upon assessments of rehabilitation needs and other conversion costs determined by an appropriate [State](/usc/12/1707.md?p=d) agency, as determined by the [Secretary](/usc/12/4119.md?p=10). The guidelines shall instruct the appraiser to use the greater of actual project operating expenses at the time of the appraisal (based on the average of the actual project operating expenses during the preceding 3 years) or projected operating expenses after conversion in determining [preservation value](/usc/12/4119.md?p=9). The guidelines established by the [Secretary](/usc/12/4119.md?p=10) shall not be inconsistent with customary appraisal standards. The guidelines shall also meet the following requirements: - (1) **Residential rental value—** In the case of [preservation value](/usc/12/4119.md?p=9) determined under [subsection (b)(1)](#b-1), the guidelines shall assume conversion of the housing to market-rate rental housing and shall establish methods for (A) determining rehabilitation expenditures that would be necessary to bring the housing up to quality standards required to attract and sustain a market rate tenancy upon conversion, and (B) assessing other costs that the [owner](/usc/12/4119.md?p=7) could reasonably be expected to incur if the [owner](/usc/12/4119.md?p=7) converted the property to market-rate multifamily rental housing. - (2) **Highest and best use value—** In the case of [preservation value](/usc/12/4119.md?p=9) determined under [subsection (b)(2)](#b-2), the guidelines shall assume conversion of the housing to highest and best use for the property and shall establish methods for (A) determining any rehabilitation expenditures that would be necessary to convert the housing to such use, and (B) assessing other costs that the [owner](/usc/12/4119.md?p=7) could reasonably be expected to incur if the [owner](/usc/12/4119.md?p=7) converted the property to its highest and best use. ## Source credit (Pub. L. 100–242, title II, § 213, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4250; amended Pub. L. 102–550, title III, § 302, Oct. 28, 1992, 106 Stat. 3763.) ## Notes ### Editorial Notes ### Amendments 1992—Subsec. (c). Pub. L. 102–550 inserted “simultaneous termination of any Federal rental assistance,” before “and costs” in first sentence.