---
kind: "section"
citation: "12 U.S.C. § 4121"
title: "12"
title_heading: "Banks and Banking"
number: "4121"
heading: "Definitions of qualified and priority purchaser and related party rule"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4121"
units:
  - "Chapter 42 — Low-Income Housing Preservation and Resident Homeownership"
  - "Subchapter I — Prepayment of Mortgages Insured under National Housing Act"
---

# §4121. Definitions of qualified and priority purchaser and related party rule

- (a) **Priority purchaser—** The term “priority purchaser” means (A) a [resident council](/usc/12/4119.md?p=11) organized to acquire the housing in accordance with a resident homeownership program that meets the requirements of section 4121[^1] of this title; and (B) any [nonprofit organization](/usc/12/4119.md?p=6) or [State](/usc/12/1707.md?p=d) or local agency that agrees to maintain [low-income affordability restrictions](/usc/12/4119.md?p=3) for the remaining useful life of the housing (as determined under [section 4112(d)](/usc/12/4112.md?p=d)[^2] of this title).
- (b) **Qualified purchaser—** The term “qualified purchaser” means any entity that agrees to maintain [low-income affordability restrictions](/usc/12/4119.md?p=3) for the remaining useful life of the housing (as determined under [section 4112(c) of this title](/usc/12/4112.md?p=c)), and includes for-profit entities and [priority purchasers](#a).
- (c) **Related parties—** Except as provided in [subsection (d)](#d), the terms “[qualified purchaser](#b)” and “[priority purchaser](#a)” do not include any entity that, either directly or indirectly, is wholly or partially owned or controlled by the [owner](/usc/12/4119.md?p=7) of the housing being transferred under this subchapter, is under whole or partial common control with such [owner](/usc/12/4119.md?p=7), or has any financial interest in such [owner](/usc/12/4119.md?p=7) or in which such [owner](/usc/12/4119.md?p=7) has any financial interest. The [Secretary](/usc/12/4119.md?p=10) shall issue any regulations appropriate to implement the preceding sentence.
- (d) **Management exception—** A [qualified purchaser](#b) shall not be precluded from retaining as a property management entity a company that is owned or controlled by the selling [owner](/usc/12/4119.md?p=7) or a principal thereof if retention of the management company is neither a condition of sale nor part of consideration paid for sale and the property management contract is negotiated by the [qualified purchaser](#b) on an arm’s length basis.

## Footnotes

[^1]: So in original. Probably should be section “4116”.
[^2]: So in original. Probably should be section “4112(c)”.

## Source credit

(Pub. L. 100–242, title II, § 231, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4273; amended Pub. L. 102–550, title III, § 317(a)(6), Oct. 28, 1992, 106 Stat. 3772.)

## Notes

### Editorial Notes

### Amendments

1992—Subsec. (b). Pub. L. 102–550 substituted “4112(c)” for “4112(d)”.