---
kind: "section"
citation: "12 U.S.C. § 4125"
title: "12"
title_heading: "Banks and Banking"
number: "4125"
heading: "State preservation project assistance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4125"
units:
  - "Chapter 42 — Low-Income Housing Preservation and Resident Homeownership"
  - "Subchapter I — Prepayment of Mortgages Insured under National Housing Act"
---

# §4125. State preservation project assistance

- (1) **In general—** Upon application by a [State](/usc/12/1707.md?p=d) or local housing authority (including public housing agencies), the [Secretary](/usc/12/4119.md?p=10) of Housing and Urban Development may make available, from sources of assistance appropriated to preserve the low and moderate income status of projects with expiring Federal use restrictions, assistance to such [State](/usc/12/1707.md?p=d) or local housing authorities for use in preventing the loss of housing affordable for low and moderate income families that is assisted under a [State](/usc/12/1707.md?p=d) program under the terms of which the [owner](/usc/12/4119.md?p=7) may prepay a [State](/usc/12/1707.md?p=d) assisted or subsidized [mortgage](/usc/12/1707.md?p=a) on such housing. The application of the [State](/usc/12/1707.md?p=d) or local housing authority shall demonstrate to the [Secretary](/usc/12/4119.md?p=10) that the total amount of incentives provided to the [owner](/usc/12/4119.md?p=7) to induce the [owner](/usc/12/4119.md?p=7) to preserve the low and moderate income status of the project shall not exceed the level of incentives which may be provided to a similarly situated project with expiring Federal use restrictions under subtitle B of title II of the Housing and Community Development Act of 1987 [[12 U.S.C. 4101](/usc/12/4101.md) et seq.].
- (2) **Section 1437f—** Any assistance under [section 1437f of title 42](/usc/42/1437f.md) made available pursuant to this section may be used (i) to supplement any assistance available on existing [section 8](/usc/12/8.md) [[42 U.S.C. 1437f](/usc/42/1437f.md)] contracts, or (ii) to provide additional assistance to structures to ensure that all units occupied by tenants who are lower income families (as such term is defined in [section 1437a(b) of title 42](/usc/42/1437a.md?p=b)) pay rents not exceeding 30 percent of their adjusted incomes. Any project receiving assistance hereunder shall be subject to standards, inspections and sanctions established by the [Secretary](/usc/12/4119.md?p=10) under [section 222(d)](/usc/12/222.md) of the Housing and Community Development Act of 1987 [[12 U.S.C. 4112(d)](/usc/12/4112.md?p=d)]. Any such [section 8](/usc/12/8.md) [[42 U.S.C. 1437f](/usc/42/1437f.md)] assistance shall be provided for a term and at the fair market rent levels or such higher levels used as applicable for [eligible low-income housing](/usc/12/4119.md?p=1) that receives incentives under subtitle B of title II of the Housing and Community Development Act of 1987 [[12 U.S.C. 4101](/usc/12/4101.md) et seq.].
- (3) **Restriction—** Assistance may be provided under this section only to [State](/usc/12/1707.md?p=d) and local housing authorities that require any housing receiving such assistance to remain affordable for lower and moderate income tenants for the period during which assistance under this section is received.

## Source credit

(Pub. L. 101–625, title VI, § 613(b), Nov. 28, 1990, 104 Stat. 4280; Pub. L. 102–550, title III, § 317(b), Oct. 28, 1992, 106 Stat. 3772.)

## Notes

### Editorial Notes

### References in Text

The Housing and Community Development Act of 1987, referred to in pars. (1) and (2), is Pub. L. 100–242, Feb. 5, 1988, 101 Stat. 1815. Subtitle B of title II of the Act is classified generally to this subchapter (§ 4101 et seq.). For complete classification of this Act to the Code, see Short Title of 1988 Amendment note under section 5301 of Title 42, The Public Health and Welfare, and Tables.

### Codification

Section was enacted as part of the Cranston-Gonzalez National Affordable Housing Act, and not as part of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 which comprises this chapter.

### Amendments

1992—Par. (2). Pub. L. 102–550 substituted “222(d)” for “224(e)”.