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determined instead by applying, for such State, the 
percentage that is equal to the percentage of the 
total amounts made available for such year for allo-
cation under subtitle A of title II of the Cranston- 
Gonzalez National Affordable Housing Act (42 
U.S.C. 12741 et seq.) that are allocated in such 
year, pursuant to such subtitle, to such State (in-
cluding any insular area or unit of general local gov-
ernment, as such terms are defined in section 104 
of such Act (42 U.S.C. 12704), that is treated as a 
State under section 1303 of this Act) and to partici-
pating jurisdictions and other eligible entities within 
such State. 
‘‘(d) 
ALLOCATION
OF
FORMULA
AMOUNT; 
GRANTS.— 
‘‘(1) FORMULA
AMOUNT.—For each year re-
ferred to in subsection (b)(1), the Director shall de-
termine the formula amount under this section for 
each grantee, which shall be the amount determined 
for such grantee— 
‘‘(A) for 2007, by applying the allocation 
percentages under subparagraph (A) of sub-
section (c)(1) to the sum of the total amounts 
allocated by the enterprises to the affordable 
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housing fund for such year, less any amounts 
used pursuant to subsection (i)(1); and 
‘‘(B) for any other year referred to in sub-
section (b)(1) (other than 2007), by applying 
the formula established pursuant to paragraph 
(2) of subsection (c) to the sum of the total 
amounts allocated by the enterprises to the af-
fordable housing fund for such year and any re-
captured amounts available pursuant to sub-
section (i)(4), less any amounts used pursuant 
to subsection (i)(1). 
‘‘(2) NOTICE.—In each year referred to in sub-
section (b)(1), not later than 60 days after the date 
that the Director determines the amounts described 
in paragraph (1) to be available for affordable hous-
ing fund grants to grantees in such year, the Direc-
tor shall cause to be published in the Federal Reg-
ister a notice that such amounts shall be so avail-
able. 
‘‘(3) GRANT AMOUNT.— 
‘‘(A) IN
GENERAL.—For each year re-
ferred to in subsection (b)(1), the Director shall 
make a grant from amounts in the affordable 
housing fund to each grantee in an amount that 
is, except as provided in subparagraph (B), 
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equal to the formula amount under this section 
for the grantee. A grantee may designate a 
State housing finance agency, housing and com-
munity development entity, tribally designated 
housing entity (as such term is defined in sec-
tion 4 of the Native American Housing Assist-
ance and Self-Determination Act of 1997 (25 
U.S.C. 4103)) or other qualified instrumentality 
of the grantee to receive such grant amounts. 
‘‘(B) REDUCTION FOR FAILURE TO OBTAIN 
RETURN OF MISUSED FUNDS.—If in any year a 
grantee fails to obtain reimbursement or return 
of the full amount required under subsection 
(j)(1)(B) to be reimbursed or returned to the 
grantee during such year— 
‘‘(i) except as provided in clause (ii)— 
‘‘(I) the amount of the grant for 
the grantee for the succeeding year, 
as determined pursuant to subpara-
graph (A), shall be reduced by the 
amount by which such amounts re-
quired to be reimbursed or returned 
exceed the amount actually reim-
bursed or returned; and 
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‘‘(II) the amount of the grant for 
the succeeding year for each other 
grantee whose grant is not reduced 
pursuant to subclause (I) shall be in-
creased by the amount determined by 
applying the formula established pur-
suant to subsection (c)(2) to the total 
amount of all reductions for all grant-
ees for such year pursuant to sub-
clause (I); or 
‘‘(ii) in any case in which such failure 
to obtain reimbursement or return occurs 
during a year immediately preceding a 
year in which grants under this subsection 
will not be made, the grantee shall pay to 
the Director for reallocation among the 
other grantees an amount equal to the 
amount of the reduction for the grantee 
that would otherwise apply under clause 
(i)(I). 
‘‘(e) GRANTEE ALLOCATION PLANS.— 
‘‘(1) IN GENERAL.—For each year that a grant-
ee receives affordable housing fund grant amounts, 
the grantee shall establish an allocation plan in ac-
cordance with this subsection, which shall be a plan 
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for the distribution of such grant amounts of the 
grantee for such year that— 
‘‘(A) is based on priority housing needs, as 
determined by the grantee in accordance with 
the regulations established under subsection 
(m)(2)(C); 
‘‘(B) complies with subsection (f); and 
‘‘(C) includes performance goals, bench-
marks, and timetables for the grantee for the 
production, preservation, and rehabilitation of 
affordable rental and homeownership housing 
with such grant amounts that comply with the 
requirements established by the Director pursu-
ant to subsection (m)(2)(F). 
‘‘(2) ESTABLISHMENT.—In establishing an allo-
cation plan, a grantee shall notify the public of the 
establishment of the plan, provide an opportunity for 
public comments regarding the plan, consider any 
public comments received, and make the completed 
plan available to the public. 
‘‘(3) CONTENTS.—An allocation plan of a 
grantee shall set forth the requirements for eligible 
recipients under subsection (h) to apply to the 
grantee to receive assistance from affordable housing 
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fund grant amounts, including a requirement that 
each such application include— 
‘‘(A) a description of the eligible activities 
to be conducted using such assistance; and 
‘‘(B) a certification by the eligible recipient 
applying for such assistance that any housing 
units assisted with such assistance will comply 
with the requirements under this section. 
‘‘(f) SELECTION OF ACTIVITIES FUNDED USING AF-
FORDABLE HOUSING FUND GRANT AMOUNTS.—Afford-
able housing fund grant amounts of a grantee may be 
used, or committed for use, only for activities that— 
‘‘(1) are eligible under subsection (g) for such 
use; 
‘‘(2) comply with the applicable allocation plan 
under subsection (e) of the grantee; and 
‘‘(3) are selected for funding by the grantee in 
accordance with the process and criteria for such se-
lection established pursuant to subsection (m)(2)(C). 
‘‘(g) ELIGIBLE
ACTIVITIES.—Affordable housing 
fund grant amounts of a grantee shall be eligible for use, 
or for commitment for use, only for assistance for— 
‘‘(1) the production, preservation, and rehabili-
tation of rental housing, including housing under the 
programs identified in section 1335(a)(2)(B), except 
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