123 
215(b)(2) of the Cranston-Gonzalez National 
Affordable 
Housing 
Act 
(42 
U.S.C. 
12745(b)(2)); and 
‘‘(ii) first-time homebuyers, as such 
term is defined in section 104 of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12704), except that any ref-
erence in such section to assistance under 
title II of such Act shall for purposes of this 
section be considered to refer to assistance 
from the affordable housing fund of the en-
terprise; 
‘‘(B) has an initial purchase price that 
meets the requirements of section 215(b)(1) of the 
Cranston-Gonzalez National Affordable Housing 
Act; and 
‘‘(C) is subject to the same resale restric-
tions established under section 215(b)(3) of the 
Cranston-Gonzalez National Affordable Housing 
Act and applicable to the participating jurisdic-
tion that is the State in which such housing is 
located; and 
‘‘(3) leveraged grants under subsection (e). 
‘‘(e) LEVERAGED GRANTS.—
124 
‘‘(1) IN
GENERAL.—Pursuant to regulations 
issued by the Director, each enterprise shall carry out 
a program under this subsection to make leveraged 
grants from amounts in the affordable housing fund 
of the enterprise, subject to the requirements under 
this subsection. 
‘‘(2) ELIGIBLE PURPOSES.—Amounts from the 
affordable housing fund of an enterprise may be used 
only for leveraged grants under paragraph (4) for— 
‘‘(A) the development, preservation, reha-
bilitation, or purchase of affordable housing that 
meets underserved needs for affordable housing; 
‘‘(B) community or economic development 
activities in economically underserved areas; or 
‘‘(C) a combination of the activities identi-
fied in subparagraphs (A) and (B). 
‘‘(3) ELIGIBLE
SPONSORS.—A leveraged grant 
under this subsection may be made only on behalf of 
a sponsor that meets such requirements as the Direc-
tor shall establish for experience and success in car-
rying out the types of activities proposed under the 
application of the sponsor, such as the following enti-
ties: 
‘‘(A) A low-income housing fund.
125 
‘‘(B) A housing finance agency of a State or 
unit of general local government. 
‘‘(C) A non-profit organization having as 
one of its principal purposes the development or 
management of affordable housing. 
‘‘(D) A community development financial 
institution. 
‘‘(E) A national non-profit housing inter-
mediary. 
‘‘(F) A community development corpora-
tion. 
‘‘(G) A community development entity. 
‘‘(4) ELIGIBLE USES.—Amounts from the afford-
able housing fund of an enterprise may be used under 
this subsection only for the following types of lever-
aged grants: 
‘‘(A) To provide loan loss reserves. 
‘‘(B) To capitalize a revolving loan fund. 
‘‘(C) To provide equity capitalization of an 
affordable housing fund. 
‘‘(D) To provide equity capitalization of a 
community development or economic develop-
ment fund. 
‘‘(E) For risk sharing loans.
126 
‘‘(F) For the funding of a specific, detailed 
investment plan that identifies the specific types 
of uses and the expected timeframes with respect 
to such uses. 
‘‘(5) APPLICATIONS.—The Director shall provide, 
in the application process established pursuant to 
subsection (l)(2)(C), for eligible sponsors under para-
graph (3) of this subsection to submit applications to 
an enterprise for leveraged grants pursuant to this 
subsection, which shall include a detailed description 
of— 
‘‘(A) the types of affordable housing or com-
munity or economic development activities for 
which the leveraged grant is made; 
‘‘(B) the type of eligible leveraged grants 
under paragraph (4) to be made in the project; 
‘‘(C) the types, sources, and amounts of 
other funding for the project; 
‘‘(D) and the expected time frame of the le-
veraged grant under this subsection. 
‘‘(6) LIMITATIONS.—The Director shall by regu-
lation— 
‘‘(A) ensure that leveraged grants pursuant 
to this subsection are designed to alleviate need 
for affordable housing in underserved markets
127 
identified in section 1335(a) having the greatest 
need for such housing or to address community 
and economic development needs in economically 
underserved areas having the greatest need; and 
‘‘(B) ensure that any returns from leveraged 
grants under this subsection accrue to the afford-
able housing fund of the enterprise and are 
available for use only as provided under this sec-
tion. 
‘‘(f) LIMITATIONS ON USE.— 
‘‘(1) AMOUNTS FOR HOMEOWNERSHIP.—Of any 
amounts allocated pursuant to subsection (b) in each 
year to the affordable housing fund of an enterprise, 
not less than 10 percent shall be used for activities 
under paragraph (2) of subsection (d). 
‘‘(2) AMOUNTS
FOR
LEVERAGED
GRANTS.—Of 
any amounts allocated pursuant to subsection (b) in 
each year to the affordable housing fund of an enter-
prise, not more than 12.5 percent shall be used for le-
veraged grants under subsection (e). 
‘‘(3) DEADLINE FOR COMMITMENT OR USE.—Any 
amounts allocated to the affordable housing fund of 
an enterprise shall be used or committed for use with-
in two years of the date of such allocation.
128 
‘‘(4) USE OF RETURNS.—Any return on invest-
ment of any amounts allocated pursuant to subsection 
(b) to the affordable housing fund of an enterprise 
shall be available for use by the enterprise only for el-
igible activities under subsection (d). 
‘‘(5) ADMINISTRATIVE
COSTS.—The Director 
shall, by regulation— 
‘‘(A) provide that, except as provided in 
subparagraph (B), amounts allocated to the af-
fordable housing fund of an enterprise may not 
be used for administrative, outreach, or other 
costs of— 
‘‘(i) the enterprise; or 
‘‘(ii) any recipient of amounts from 
the affordable housing fund; and 
‘‘(B) limit the amount of any such con-
tributions that may be used for administrative 
costs of the enterprise of maintaining the afford-
able housing fund and carrying out the program 
under this section. 
‘‘(6) PROHIBITION OF CONSIDERATION OF USE 
FOR MEETING HOUSING GOALS.—In determining com-
pliance with the housing goals under this subpart, the 
Director may not consider amounts used under this 
section for eligible activities under subsection (d). The
129 
Director shall give credit toward the achievement of 
such housing goals to purchases of mortgages for hous-
ing that receives funding under this section, but only 
to the extent that such purchases are funded other 
than under this section. 
‘‘(7) PROHIBITION
OF
CERTAIN
SUBGRANTS.— 
The Director shall, by regulation, ensure that 
amounts from the affordable housing fund of an enter-
prise awarded under this section to a national non- 
profit housing intermediary are not used for the pur-
pose of distributing subgrants to other non-profit enti-
ties. 
‘‘(g) CONSISTENCY OF USE WITH HOUSING NEEDS.— 
‘‘(1) QUARTERLY REPORTS.—The Director shall 
require each enterprise to submit a report, on a quar-
terly basis, to the Director and the affordable housing 
board established under subsection (j) describing the 
activities funded under this section during such quar-
ter with amounts from the affordable housing fund of 
the enterprise established under this section. The Di-
rector shall make such reports publicly available. The 
affordable housing board shall review each report by 
an enterprise to determine the consistency of such ac-
tivities funded with the criteria for selection of such 
activities established pursuant to subsection (l)(2)(C).
130 
‘‘(2) REPLENISHMENT.—If the affordable housing 
board determines that an activity funded by an enter-
prise with amounts from the affordable housing fund 
of the enterprise is not consistent with the criteria es-
tablished pursuant to subsection (l)(2)(C), the board 
shall notify the Director and the Director shall re-
quire the enterprise to allocate to such affordable 
housing fund (in addition to amounts allocated in 
compliance with subsection (b)) an amount equal to 
the sum of the amounts from the affordable housing 
fund used and further committed for use for such ac-
tivity. 
‘‘(h) CAPITAL REQUIREMENTS.—The utilization or 
commitment of amounts from the affordable housing fund 
of an enterprise shall not be subject to the risk-based capital 
requirements established pursuant to section 1361(a). 
‘‘(i) REPORTING
REQUIREMENT.—Each enterprise 
shall include, in the report required under section 309(m) 
of the Federal National Mortgage Association Charter Act 
or section 307(f) of the Federal Home Loan Mortgage Cor-
poration Act, as applicable, a description of the actions 
taken by the enterprise to utilize or commit amounts allo-
cated under this section to the affordable housing fund of 
the enterprise established under this section. 
‘‘(j) AFFORDABLE HOUSING BOARD.—
131 
‘‘(1) APPOINTMENT.—The Director shall appoint 
an affordable housing board of 7, 9, or 11 persons, 
who shall include— 
‘‘(A) the Director, or the Director’s designee; 
‘‘(B) the Secretary of Housing and Urban 
Development, or the Secretary’s designee; 
‘‘(C) the Secretary of Agriculture, or the 
Secretary’s designee; 
‘‘(D) 2 persons from for-profit organizations 
or businesses actively involved in providing or 
promoting affordable housing for extremely low- 
and very low-income households; and 
‘‘(E) 2 persons from nonprofit organiza-
tions actively involved in providing or pro-
moting affordable housing for extremely low- and 
very low-income households. 
‘‘(2) TERMS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term of each member of 
the affordable housing board appointed pursuant 
to paragraph (1) (but not including members 
appointed pursuant to subparagraphs (A), (B), 
and (C)) shall be 3 years. 
‘‘(B) INITIAL
APPOINTEES.—The Director 
shall appoint the initial members of the afford-
132 
able housing board not later than the expiration 
of the 60-day period beginning on the date of the 
enactment of this Act. As designated by the Di-
rector at the time of appointment, of the mem-
bers of the affordable housing board first ap-
pointed pursuant to paragraph (1) (but not in-
cluding members appointed pursuant to sub-
paragraphs (A), (B), and (C))— 
‘‘(i) in the case of a board having 7 
members— 
‘‘(I) one shall be appointed for a 
term of one year; and 
‘‘(II) one shall be appointed for a 
term of two years; 
‘‘(ii) in the case of a board having 9 
members— 
‘‘(I) two shall be appointed for a 
term of one year; and 
‘‘(II) two shall be appointed for a 
term of two years; and 
‘‘(iii) in the case of a board having 11 
members— 
‘‘(I) two shall be appointed for a 
term of one year; and
133 
‘‘(II) three shall be appointed for 
a term of two years; 
‘‘(3) DUTIES.—The affordable housing board 
shall meet not less than quarterly— 
‘‘(A) to determine extremely low- and very 
low-income housing needs; 
‘‘(B) to advise the Director with respect 
to— 
‘‘(i) establishment of the selection cri-
teria under subsection (l)(2)(C) that provide 
for appropriate use of amounts from the af-
fordable housing funds of the enterprises to 
meet such needs; and 
‘‘(ii) operation of, and changes to, the 
program under this section appropriate to 
meet such needs; and 
‘‘(C) to review the reports submitted by the 
enterprises pursuant to subsection (g)(1) to de-
termine whether the activities funded using 
amounts from the affordable housing funds of the 
enterprises comply with the regulations issued 
pursuant to subsection (l)(2)(C) and inform the 
Director of such determinations, for purposes of 
subsection (g)(2).
134 
‘‘(4) EXPENSES AND PER DIEM.—Members of the 
board shall receive travel expenses, including per 
diem in lieu of subsistence, in accordance with sec-
tions 5702 and 5703 of title 5, United States Code. 
‘‘(5) ADVISORY COMMITTEE.—The board shall be 
considered an advisory committee for purposes of the 
Federal Advisory Committee Act (5 U.S.C. App.). 
‘‘(6) DURATION.— The board shall have contin-
ued existence until terminated by law. 
‘‘(k) DEFINITION.—For purposes of this section, the 
term ‘economically underserved area’ means an area that 
predominantly includes census tracts for which— 
‘‘(1) at least 20 percent of the population is 
below the poverty line (as such term is defined in sec-
tion 673(2) of the Omnibus Budget Reconciliation Act 
of 1981 (42 U.S.C. 9902(2)), including any revision 
required by such section), applicable to a family of 
the size involved; or 
‘‘(2) median family income does not exceed the 
greater of— 
‘‘(A) 80 percent of the median family in-
come for the metropolitan statistical area in 
which such census tracts are located; or
135 
‘‘(B) 80 percent of the median family in-
come for the State in which such census tracts 
are located. 
‘‘(l) REGULATIONS.— 
‘‘(1) IN GENERAL.—The Director shall issue reg-
ulations to carry out this section. 
‘‘(2) REQUIRED
CONTENTS.—The regulations 
issued under this subsection shall include— 
‘‘(A) authority for the Director to audit, 
provide for an audit, or otherwise verify an en-
terprise’s activities, to ensure compliance with 
this section; 
‘‘(B) a requirement that the Director ensure 
that the affordable housing fund of each enter-
prise is audited not less than annually to ensure 
compliance with this section; 
‘‘(C) requirements for a process for applica-
tion to, and selection by, an enterprise for activi-
ties to be funded with amounts from the afford-
able housing fund, which shall provide that— 
‘‘(i) selection shall based upon specific 
criteria, including a prioritization of fund-
ing based upon— 
‘‘(I) greatest impact; 
‘‘(II) geographic diversity;
136 
‘‘(III) ability to obligate amounts 
and undertake activities so funded in a 
timely manner; 
‘‘(IV) in the case of rental housing 
projects under subsection (d)(1), the ex-
tent to which rents for units in the 
project funded are affordable, especially 
for extremely low-income families; and 
‘‘(V) in the case of rental housing 
projects under subsection (d)(1), the ex-
tent of the duration for which such 
rents will remain affordable; and 
‘‘(ii) an enterprise may not require for 
such selection that an activity involve fi-
nancing or underwriting of any kind by the 
enterprise (other than funding through the 
affordable housing fund of the enterprise) 
and may not give preference in such selec-
tion to activities that involve such financ-
ing; and 
‘‘(D) requirements to ensure that amounts 
from the affordable housing funds of the enter-
prises used for rental housing under subsection 
(d)(1) are used only for the benefit of extremely 
low- and very-low income families.
137 
‘‘(3) LIMITATION.—Any regulations issued by the 
Director pursuant to this section shall be no more re-
strictive on the enterprises’ activities in connection 
with the allocation of after-tax income under this sec-
tion than the regulations issued to implement the af-
fordable housing program of the Federal home loan 
banks pursuant to section 10(j) of the Federal Home 
Loan Bank Act (12 U.S.C. 1430(j)).’’. 
(b) CONTRIBUTIONS FOR 2006.— 
(1) RESERVATION AND CONTRIBUTION.—In 2006, 
each enterprise (as such term is defined in section 
1303 of the Housing and Community Development 
Act of 1992) shall reserve for contribution to the af-
fordable housing fund to be established by the enter-
prise pursuant to section 1337 of such Act (as amend-
ed by subsection (a) of this section), an amount equal 
to 3.5 percent of the after-tax income of the enterprise 
for 2005. Upon the establishment of such affordable 
housing fund, each enterprise shall allocate to such 
fund the amounts reserved under this subsection by 
the enterprise. 
(2) EXCEPTION
TO
DEADLINE
FOR
COMMIT-
MENT.—Section 1337(e)(2) of the Housing and Com-
munity Development Act of 1992 (as amended by sub-
section (a) of this section) shall not apply to amounts