U.S. Code » Title 12 » Chapter CHAPTER 42— LOW-INCOME HOUSING PRESERVATION AND RESIDENT HOMEOWNERSHIP › Subchapter SUBCHAPTER I— PREPAYMENT OF MORTGAGES INSURED UNDER NATIONAL HOUSING ACT

12 U.S.C. § 4122

Preemption of State and local laws

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(a) In generalNo State or political subdivision of a State may establish, continue in effect, or enforce any law or regulation that—(1) restricts or inhibits the prepayment of any mortgage described in section 4119(1) of this title (or the voluntary termination of any insurance contract pursuant to section 1715t of this title) on eligible low income housing;(2) restricts or inhibits an owner of such housing from receiving the authorized annual return provided under section 4104 of this title;(3) is inconsistent with any provision of this subchapter, including any law, regulation, or other restriction that limits or impairs the ability of any owner of eligible low income housing to receive incentives authorized under this subchapter (including authorization to increase rental rates, transfer the housing, obtain secondary financing, or use the proceeds of any of such incentives); or(4) in its applicability to low-income housing is limited only to eligible low-income housing for which the owner has prepaid the mortgage or terminated the insurance contract.Any law, regulation, or restriction described under paragraph (1), (2), (3), or (4) shall be ineffective and any eligible low-income housing exempt from the law, regulation, or restriction, only to the extent that it violates the provisions of this subsection.(b) Effect

This section shall not prevent the establishment, continuing in effect, or enforcement of any law or regulation of any State or political subdivision of a State not inconsistent with the provisions of this subchapter, such as any law or regulation relating to building standards, zoning limitations, health, safety, or habitability standards for housing, rent control, or conversion of rental housing to condominium or cooperative ownership, to the extent such law or regulation is of general applicability to both housing receiving Federal assistance and nonassisted housing. This section shall not preempt, annul, or alter any contractual restrictions or obligations existing before November 28, 1990, that prevent or limit an owner of eligible low-income housing from prepaying the mortgage on the housing (or terminating the insurance contract on the housing).

(Pub. L. 100–242, title II, § 232, as added Pub. L. 101–625, title VI, § 601(a), Nov. 28, 1990, 104 Stat. 4273; amended Pub. L. 102–550, title III, § 311, Oct. 28, 1992, 106 Stat. 3765.)Editorial NotesAmendments

1992—Subsec. (b). Pub. L. 102–550 substituted “, such as any law or regulation” for “and” after “subchapter”.

Notes of Decisions
Cited in 10 cases, 1997–2016 · leading case: Indep. Park Apts. v. United States, 61 Fed. Cl. 692 (Fed. Cl. 2004).
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Indep. Park Apts. v. United States, 61 Fed. Cl. 692 (Fed. Cl. 2004). · cites it 4× “9 The Ninth Circuit additionally cited 12 U.S.C. § 4122 (b), which preserves certain state or local laws, 10 and commented that “[n]othing in the HUD regulations purports to limit states from enacting their own rent control laws of general applicability which apply equally to…”
Topa Equities, Ltd., Coalition for Econ. Survival, Intervenor-Appellee v. City of Los Angeles, Maria Lourdes Lara Tai Park, Intervenors-Appellees, 342 F.3d 1065 (9th Cir. 2003). · cites it 5× “” 12 U.S.C. § 4122 (a). Los Angeles contends this preemption provision has been repealed by HOPE, and as a result we need not concern ourselves with it.”
Cienega Gardens v. United States, 38 Fed. Cl. 64 (Fed. Cl. 1997). · cites it 3× “” See 12 U.S.C. § 4122 (a). Defendant maintains that even if plaintiffs could have prepaid their HUD-insured mortgages and converted the subject properties to conventional, LARSO would have limited the rents plaintiffs could have charged.”
Burbank Apts. Tenant Ass'n v. Kargman, 48 N.E.3d 394 (Mass. 2016). “The express preemption argument is overcome by 12 U.S.C. § 4122 (b), which makes clear that the policy covered in § 4122(a) does not affect laws of general applicability, such as State fair housing laws, which are “not inconsistent with the provisions of this subchapter.”
Indep. Park Apts. v. United States, 449 F.3d 1235 (Fed. Cir. 2006). “The Court of Federal Claims rejected that argument, holding that it was barred by this court’s mandate and by the doctrine of law of the case from entertaining that contention.”
Forest Park II v. Hadley, 203 F. Supp. 2d 1071 (D. Minnesota 2002). · cites it 2× “Express Preemption Forest Park II asserts that the relevant Minnesota statutes are expressly preempted by 12 U.S.C. § 4122 . The Court finds, however, that based on the statute’s legislative history, and the language contained in the preemption provision specifically, there is…”
Cienega Gardens v. United States, 265 F.3d 1237 (Fed. Cir. 2001). “12 U.S.C. § 4122 (a). During the damages trial in the breach of contract claim, the trial court concluded that LIHPRHA preempts LAR-SO, because the latter would “restrict or inhibit prepayment” of the Owners’ mortgages, as the ongoing effect of LARSO “is to interfere materially…”
Real Est. Bd. of New York, Inc. v. City Council, 16 Misc. 3d 530 (N.Y. Sup. Ct. 2007). “(See 12 USC § 4122 [a].) In contrast, HOPE (Pub L 104-120, 110 US Stat 834), which removed federal restrictions on mortgage prepayments previously contained in LIHPRHA, also eliminated the express preemption provision.”
Forest Park II v. Katherine Hadley, 336 F.3d 724 (8th Cir. 2003). · cites it 2× “12 U.S.C. § 4122 (a). Forest Park’s mortgage is described in 12 U.”
Responsibility of Agencies to Pay Attorney's Fee Awards Under the Equal Access to Just. Act (OLC 2007). “Treasury notes that “the cause of action was based upon a statute within HUD’s purview ( 12 U.S.C. § 4122 ), DOJ consulted with HUD as the client agency, and HUD attor- neys were listed on the court briefs as ‘of counsel.”
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