PUBLIC LAW 101-625—NOV. 28, 1990 104 STAT. 4251 "(D) the need for an appraiser retained by the Secretary to inspect the housing and project financial records; and "(E) any delegation to the appropriate State agency by the Secretary of responsibilities regarding the appraisal. "(3) TiMEUNESS. —The Secretary may approve a plan of action to receive incentives under section 219 or 220 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 subtitle, the preservation value of eligible low-income housing appraised under this section shall be— "(1) for purposes of extending the low-income affordability restrictions and receiving incentives under section 219, 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 220 or 221, the fair market value of the housing based on the highest and best use of the property. "(c) GUIDELINES.— The Secretary shall provide written guidelines for appraisals of preservation value, which shall assume repayment of the existing federally assisted mortgage, termination of the existing low-income affordability restrictions, and costs of compliance with any State 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 agency, as determined by the Secretary. 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. The guidelines established by the Secretary shall not be inconsistent with customary appraisal standards. The guidelines shall Eilso meet the following requirements: "(1) RESIDENTIAL RENTAL VALUE.— In the case of preservation value determined under subsection (b)(D. 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 could reasonably be expected to incur if the owner converted the property to market-rate multifamily rental housing. "(2) HIGHEST AND BEST USE VALUE.—In the case of preservation value determined under subsection (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 could reasonably be expected to incur if the owner converted the property to its highest and best use. "SEC. 214. ANNUAL AUTHORIZED RETURN AND PRESERVATION RENTS. 12 USC 4104. "(a) ANNUAL AUTHORIZED RETURN. — Pursuant to an appraisal under section 213, the Secretary shall determine the annual authorized return on the appraised housing, which shall be equal to 8 39-194O-91-30:QL3Part5
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