(1) by striking ‘‘SELECTION CRITERIA.—’’ and 
inserting ‘‘SELECTION CRITERIA AND PROCESSING.— 
(1) SELECTION CRITERIA.—’’; 
(2) by redesignating paragraphs (1), (2), (3), 
(4), (5), (6), and (7) as subparagraphs (A), (B), (C), 
(D), (E), (G), and (H), respectively; 
(3) by adding at the end the following new para-
graph: 
‘‘(2) DELEGATED PROCESSING.— 
‘‘(A) In issuing a capital advance under sub-
section (d)(1) for any multifamily project (but not in-
cluding any project that is a group home or inde-
pendent living facility) for which financing for the 
purposes described in the last sentence of subsection 
(b) is provided by a combination of the capital ad-
vance and sources other than this section, within 30 
days of award of the capital advance, the Secretary 
shall delegate review and processing of such projects 
to a State or local housing agency that— 
‘‘(i) is in geographic proximity to the prop-
erty; 
‘‘(ii) has demonstrated experience in and 
capacity for underwriting multifamily housing 
loans that provide housing and supportive serv-
ices; 
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‘‘(iii) may or may not be providing low-in-
come housing tax credits in combination with 
the capital advance under this section; and 
‘‘(iv) agrees to issue a firm commitment 
within 12 months of delegation. 
‘‘(B) The Secretary shall retain the authority to 
process capital advances in cases in which no State 
or local housing agency has applied to provide dele-
gated processing pursuant to this paragraph or no 
such agency has entered into an agreement with the 
Secretary to serve as a delegated processing agency. 
‘‘(C) An agency to which review and processing 
is delegated pursuant to subparagraph (A) may assess 
a reasonable fee which shall be included in the capital 
advance amounts and may recommend project rental 
assistance amounts in excess of those initially award-
ed by the Secretary. The Secretary shall develop a 
schedule for reasonable fees under this subparagraph 
to be paid to delegated processing agencies, which 
shall take into consideration any other fees to be paid 
to the agency for other funding provided to the project 
by the agency, including bonds, tax credits, and other 
gap funding. 
‘‘(D) Under such delegated system, the Secretary 
shall retain the authority to approve rents and devel-
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opment costs and to execute a capital advance within 
60 days of receipt of the commitment from the State 
or local agency. The Secretary shall provide to such 
agency and the project sponsor, in writing, the rea-
sons for any reduction in capital advance amounts or 
project rental assistance and such reductions shall be 
subject to appeal.’’. 
(d) LEVERAGING OTHER RESOURCES.—Paragraph (1) 
of section 811(g) (as so designated by subsection (c)(1) of 
this section) is amended by inserting after subparagraph 
(E) (as so redesignated by subsection (c)(2) of this section) 
the following new subparagraph: 
‘‘(F) the extent to which the per-unit cost of 
units to be assisted under this section will be 
supplemented with resources from other public 
and private sources;’’. 
(e) TENANT PROTECTIONS AND ELIGIBILITY FOR OC-
CUPANCY.—Section 811 is amended by striking subsection 
(i) and inserting the following new subsection: 
‘‘(i) ADMISSION AND OCCUPANCY.— 
‘‘(1) TENANT SELECTION.— 
‘‘(A) PROCEDURES.—An owner shall adopt 
written tenant selection procedures that are sat-
isfactory to the Secretary as (i) consistent with 
the purpose of improving housing opportunities 
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for very low-income persons with disabilities; 
and (ii) reasonably related to program eligibility 
and an applicant’s ability to perform the obliga-
tions of the lease. Owners shall promptly notify 
in writing any rejected applicant of the grounds 
for any rejection. 
‘‘(B) REQUIREMENT FOR OCCUPANCY.—Oc-
cupancy in dwelling units provided assistance 
under this section shall be available only to per-
sons with disabilities and households that in-
clude at least one person with a disability. 
‘‘(C) AVAILABILITY.—Except only as pro-
vided in subparagraph (D), occupancy in dwell-
ing units in housing provided with assistance 
under this section shall be available to all per-
sons with disabilities eligible for such occupancy 
without regard to the particular disability in-
volved. 
‘‘(D) LIMITATION
ON
OCCUPANCY.—Not-
withstanding any other provision of law, the 
owner of housing developed under this section 
may, with the approval of the Secretary, limit 
occupancy within the housing to persons with 
disabilities who can benefit from the supportive 
services offered in connection with the housing. 
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‘‘(2) TENANT PROTECTIONS.— 
‘‘(A) LEASE.—The lease between a tenant 
and an owner of housing assisted under this sec-
tion shall be for not less than one year, and shall 
contain such terms and conditions as the Sec-
retary shall determine to be appropriate. 
‘‘(B) 
TERMINATION
OF
TENANCY.—An 
owner may not terminate the tenancy or refuse 
to renew the lease of a tenant of a rental dwell-
ing unit assisted under this section except— 
‘‘(i) for serious or repeated violation of 
the terms and conditions of the lease, for 
violation of applicable Federal, State, or 
local law, or for other good cause; and 
‘‘(ii) by providing the tenant, not less 
than 30 days before such termination or re-
fusal to renew, with written notice speci-
fying the grounds for such action. 
‘‘(C) VOLUNTARY PARTICIPATION IN SERV-
ICES.—A supportive service plan for housing as-
sisted under this section shall permit each resi-
dent to take responsibility for choosing and ac-
quiring their own services, to receive any sup-
portive services made available directly or indi-
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