Franconia Associates v. United States, 536 U.S. 129, 9 (2002)

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Cite as: 536 U. S. 129 (2002)

Opinion of the Court

made by a nonprofit organization or agency within 180 days, the FmHA may accept the owner's offer to prepay. 1472(c)(5)(A)(ii). The offer-for-sale requirement may be avoided if the FmHA determines that prepayment will not "materially affec[t]" housing opportunities for minorities and one of two other conditions is met: Prepayment will not displace the tenants of the affected housing, or there is "an adequate supply of safe, decent, and affordable rental housing within the market area" and "sufficient actions have been taken to ensure" that such housing "will be made available" to displaced tenants. 1472(c)(5)(G)(ii).

ELIHPA's implementing regulations establish a process by which the FmHA addresses prepayment requests. Under those procedures, the FmHA first "develo[ps] an incentive offer," making a "reasonable effort . . . to enter into an agreement with the borrower to maintain the housing for low-income use that takes into consideration the economic loss the borrower may suffer by foregoing [sic] prepayment." 7 CFR 1965.210 (2002). Only if the borrower rejects that offer will the FmHA attempt to make the deter-minations—regarding the effect on minority housing opportunities, the displacement of tenants, and the supply of affordable housing in the market—required by 42 U. S. C. 1472(c)(5)(G) before prepayment can be accepted. 7 CFR 1965.215(a) (2002).3


Petitioners in Franconia filed this action in the United States Court of Federal Claims on May 30, 1997. Plaintiffs included petitioners—all of whom had entered into loan agreements before December 21, 1979, and were therefore

3 In 1992, Congress passed the Housing and Community Development Act of 1992, 106 Stat. 3672, codified in relevant part at 42 U. S. C. 1472(c) (1992 legislation). That provision, which had no effect on petitioners' loans, extended ELIHPA's restrictions to loans made after those of petitioners, i. e., loans made from December 21, 1979, through 1989. See 106 Stat. 3841.


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