((a)) ** Determination of relationship to Federal cost limits**

((1)) ** Initial determination** For each eligible low-income housing project appraised under , the Secretary shall determine whether the aggregate preservation rents for the project determined under paragraph (1) or (2) of exceed the amount determined by multiplying 120 percent of the fair market rental (established under ) for the market area in which the housing is located by the number of dwelling units in the project (according to appropriate unit sizes).section 4103(a) of this titlesection 4104(b) of this titlesection 1437f(c) of title 42

((2)) ** Relevant local markets** If the aggregate preservation rents for a project exceeds the amount determined under paragraph (1), the Secretary shall determine whether such aggregate rents exceed the amount determined by multiplying 120 percent of the prevailing rents in the relevant local market area in which the housing is located by the number of units in the project (according to the appropriate unit sizes). A relevant local market area shall be an area geographically smaller than a market area established by the Secretary under that is identifiable as a distinct rental market area. The Secretary may rely on the appraisal to determine the relevant local market areas and prevailing rents in such local areas and any other information the Secretary determines is appropriate.section 1437f(c)(1) of title 42

((3)) ** Effect** For purposes of this subchapter, the aggregate preservation rents shall be considered to exceed the Federal cost limits under this subsection only if the aggregate preservation rents exceed the amount determined under paragraph (1) and the amount determined under paragraph (2).

((b)) ** Limitations on action pursuant to Federal cost limits**

((1)) ** Housing within Federal cost limits** If the aggregate preservation rents for an eligible low-income housing project do not exceed the Federal cost limit, the owner may not prepay the mortgage on the housing or terminate the insurance contract with respect to the housing, except as permitted under . The owner may—

((A)) file a plan of action under to receive incentives under ; or

((B)) file a second notice of intent under indicating an intention to transfer the housing under and take actions pursuant to such section.

((2)) ** Housing exceeding Federal cost limits** If the aggregate preservation rents for an eligible low-income housing project exceed the Federal cost limit, the owner may—

((A)) file a plan of action under to receive incentives under if the owner agrees to accept incentives under such sections in an amount that shall not exceed the Federal cost limit;

((B)) file a second notice of intent under indicating an intention to transfer the housing under and take actions pursuant to such section if the owner agrees to transfer the housing at a price that shall not exceed the Federal cost limit; or

((C)) file a second notice of intent under indicating an intention to prepay the mortgage or voluntarily terminate the insurance, subject to the mandatory sale provisions under .