SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Homes for Heroes Act 
of 2009’’. 
SEC. 2. SPECIAL ASSISTANT FOR VETERANS AFFAIRS IN OF-
FICE 
OF 
SECRETARY 
OF 
HOUSING 
AND 
URBAN DEVELOPMENT. 
Section 4 of the Department of Housing and Urban 
Development Act (42 U.S.C. 3533) is amended by adding 
at the end the following new subsection: 
‘‘(g) SPECIAL
ASSISTANT
FOR
VETERANS
AF-
FAIRS.— 
‘‘(1) ESTABLISHMENT.—There shall be in the 
Department a Special Assistant for Veterans Af-
fairs, who shall be in the Office of the Secretary. 
‘‘(2) APPOINTMENT.—The Special Assistant for 
Veterans Affairs shall be appointed based solely on 
merit and shall be covered under the provisions of 
title 5, United States Code, governing appointments 
in the competitive service. 
‘‘(3) RESPONSIBILITIES.—The Special Assist-
ant for Veterans Affairs shall be responsible for— 
‘‘(A) ensuring veterans have access to 
housing and homeless assistance under each 
program of the Department providing either 
such assistance;
‘‘(B) coordinating all programs and activi-
ties of the Department relating to veterans; 
‘‘(C) serving as a liaison for the Depart-
ment with the Department of Veterans Affairs, 
including establishing and maintaining relation-
ships with the Secretary of Veterans Affairs; 
‘‘(D) serving as a liaison for the Depart-
ment, and establishing and maintaining rela-
tionships with officials of State, local, regional, 
and nongovernmental organizations concerned 
with veterans; 
‘‘(E) providing information and advice re-
garding— 
‘‘(i) sponsoring housing projects for 
veterans assisted under programs adminis-
tered by the Department; or 
‘‘(ii) assisting veterans in obtaining 
housing or homeless assistance under pro-
grams administered by the Department; 
‘‘(F) preparing the annual report under 
section 8 of Homes for Heroes Act of 2009; 
and 
‘‘(G) carrying out such other duties as may 
be assigned to the Special Assistant by the Sec-
retary or by law.’’.
SEC. 3. SUPPORTIVE HOUSING FOR VERY LOW-INCOME 
VETERAN FAMILIES. 
(a) PURPOSE.—The purposes of this section are— 
(1) to expand the supply of permanent housing 
for very low-income veteran families; and 
(2) to provide supportive services through such 
housing to support the needs of such veteran fami-
lies. 
(b) AUTHORITY.— 
(1) IN GENERAL.—The Secretary of Housing 
and Urban Development shall, to the extent amounts 
are made available for assistance under this section 
and the Secretary receives approvable applications 
for such assistance, provide assistance to private 
nonprofit organizations and consumer cooperatives 
to expand the supply of supportive housing for very 
low-income veteran families. 
(2) NATURE OF ASSISTANCE.—The assistance 
provided under paragraph (1)— 
(A) shall be available for use to plan for 
and finance the acquisition, construction, recon-
struction, or moderate or substantial rehabilita-
tion of a structure or a portion of a structure 
to be used as supportive housing for very low- 
income veteran families in accordance with this 
section; and
(B) may also cover the cost of real prop-
erty acquisition, site improvement, conversion, 
demolition, relocation, and other expenses that 
the Secretary determines are necessary to ex-
pand the supply of supportive housing for very 
low-income veteran families. 
(3) CONSULTATION.—In meeting the require-
ment of paragraph (1), the Secretary shall consult 
with— 
(A) the Secretary of Veterans Affairs; and 
(B) the Special Assistant for Veterans Af-
fairs, as such Special Assistant was established 
under section 4(g) of the Department of Hous-
ing and Urban Development Act. 
(c) FORMS OF ASSISTANCE.—Assistance under this 
section shall be made available in the following forms: 
(1) PLANNING
GRANTS.—Assistance may be 
provided as a grant for costs of planning a project 
to be used as supportive housing for very low-income 
veteran families. 
(2) CAPITAL
ADVANCES.—Assistance may be 
provided as a capital advance under this paragraph 
for a project, such advance shall— 
(A) bear no interest;
(B) not be required to be repaid so long as 
the housing remains available for occupancy by 
very low-income veteran families in accordance 
with this section; and 
(C) be in an amount calculated in accord-
ance with the development cost limitation estab-
lished pursuant to subsection (i). 
(3) PROJECT RENTAL ASSISTANCE.—Assistance 
may be provided as project rental assistance, under 
an annual contract that— 
(A) obligates the Secretary to make 
monthly payments to cover any part of the 
costs attributed to units occupied (or, as ap-
proved by the Secretary, held for occupancy) by 
very low-income veteran families that is not met 
from project income; 
(B) provides for the project not more than 
the sum of the initial annual project rentals for 
all units so occupied and any initial utility al-
lowances for such units, as approved by the 
Secretary; 
(C) provides that any contract amounts 
not used by a project in any year shall remain 
available to the project until the expiration of 
the contract;
(D) provides that upon the expiration of 
each contract term, the Secretary shall adjust 
the annual contract amount to provide for rea-
sonable project costs, and any increases, includ-
ing adequate reserves, supportive services, and 
service coordinators, except that any contract 
amounts not used by a project during a con-
tract term shall not be available for such ad-
justments upon renewal; and 
(E) provides that in the event of emer-
gency situations that are outside the control of 
the owner, the Secretary shall increase the an-
nual contract amount, subject to reasonable re-
view and limitations as the Secretary shall pro-
vide. 
(d) TENANT RENT CONTRIBUTION.—A very low-in-
come veteran family shall pay as rent for a dwelling unit 
assisted under this section the highest of the following 
amounts, rounded to the nearest dollar: 
(1) 30 percent of the veteran family’s adjusted 
monthly income. 
(2) 10 percent of the veteran family’s monthly 
income. 
(3) If the veteran family is receiving payments 
for welfare assistance from a public agency and a
part of such payments, adjusted in accordance with 
the veteran family’s actual housing costs, is specifi-
cally designated by such agency to meet the veteran 
family’s housing costs, the portion of such payments 
which is so designated. 
(e) TERM OF COMMITMENT.— 
(1) USE LIMITATIONS.—All units in housing as-
sisted under this section shall be made available for 
occupancy by very low-income veteran families for 
not less than 15 years. 
(2) CONTRACT TERMS FOR PROJECT RENTAL 
ASSISTANCE.— 
(A) INITIAL TERM.—The initial term of a 
contract entered into under subsection (c)(3) 
shall be 60 months. 
(B) EXTENSION.—The Secretary shall, 
subject only to the availability of amounts pro-
vided in appropriation Acts, renew the contract 
entered into under subsection (c)(3) for 10 con-
secutive one-year terms, the first such term be-
ginning upon the expiration of such 60-month 
period. 
(C) AUTHORITY OF SECRETARY TO MAKE 
EARLY
COMMITMENTS.—In order to facilitate 
the orderly extension of expiring contracts, the
Secretary may make commitments to extend ex-
piring contracts during the year prior to the 
date of expiration. 
(f) APPLICATIONS.— 
(1) IN
GENERAL.—Amounts made available 
under this section shall be allocated by the Secretary 
among approvable applications submitted by private 
nonprofit organizations and consumer cooperatives. 
(2) CONTENT OF APPLICATION.— 
(A) IN GENERAL.—Applications for assist-
ance under this section shall be submitted by an 
applicant in such form and in accordance with 
such procedures as the Secretary shall estab-
lish. 
(B) REQUIRED
CONTENT.—Applications 
for assistance under this section shall contain— 
(i) a description of the proposed hous-
ing; 
(ii) a description of the assistance the 
applicant seeks under this section; 
(iii) a description of— 
(I) the supportive services to be 
provided to the persons occupying 
such housing;
(II) the manner in which such 
services will be provided to such per-
sons, including, in the case of frail el-
derly persons (as such term is defined 
in section 202 of the Housing Act of 
1959 (12 U.S.C. 1701q)), evidence of 
such residential supervision as the 
Secretary determines is necessary to 
facilitate the adequate provision of 
such services; and 
(III) the public or private sources 
of assistance that can reasonably be 
expected to fund or provide such serv-
ices; 
(iv) a certification from the public of-
ficial responsible for submitting a housing 
strategy for the jurisdiction to be served in 
accordance with section 105 of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12705) that the proposed 
project is consistent with the approved 
housing strategy; and 
(v) such other information or certifi-
cations that the Secretary determines to be
necessary or appropriate to achieve the 
purposes of this section. 
(3) REJECTION.—The Secretary shall not reject 
any application for assistance under this section on 
technical grounds without giving notice of that rejec-
tion and the basis therefore to the applicant. 
(g) INITIAL
SELECTION
CRITERIA
AND
PROC-
ESSING.— 
(1) SELECTION CRITERIA.—The Secretary shall 
establish selection criteria for assistance under this 
section, which shall include— 
(A) criteria based upon— 
(i) the ability of the applicant to de-
velop and operate the proposed housing; 
(ii) the need for supportive housing 
for very low-income veteran families in the 
area to be served; 
(iii) the extent to which the proposed 
size and unit mix of the housing will en-
able the applicant to manage and operate 
the housing efficiently and ensure that the 
provision of supportive services will be ac-
complished in an economical fashion; 
(iv) the extent to which the proposed 
design of the housing will meet the service-
connected disability needs of very low-in-
come veteran families; 
(v) the extent to which the applicant 
has demonstrated that the supportive serv-
ices identified pursuant to subsection 
(f)(2)(B)(iii) will be provided on a con-
sistent, long-term basis; 
(vi) the extent to which the proposed 
design of the housing will accommodate the 
provision of supportive services that are ex-
pected to be needed, either initially or over 
the useful life of the housing, by the very 
low-income veterans the housing is in-
tended to serve; 
(vii) the extent to which the applicant 
has ensured that a service coordinator will 
be employed or otherwise retained for the 
housing, who has the managerial capacity 
and responsibility for carrying out the ac-
tions described in clauses (i) and (ii) of 
subsection (h)(2)(A); and 
(viii) such other factors as the Sec-
retary determines to be appropriate to en-
sure that funds made available under this 
section are used effectively;
(B) a preference in such selection for ap-
plications proposing housing to be reserved for 
occupancy by very low-income veteran families 
who are homeless (as such term is defined in 
section 103 of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11302)); and 
(C) criteria appropriate to consider the 
need for supportive housing for very low-income 
veteran families in nonmetropolitan areas and 
by Indian tribes. 
(2) DELEGATED PROCESSING.— 
(A) DELEGATION
TO
STATE
OR
LOCAL 
HOUSING AUTHORITY.—In issuing a capital ad-
vance under this subsection for any project for 
which financing for the purposes described in 
subsection (b)(2) is provided by a combination 
of a capital advance under subsection (c)(2) 
and sources other than this section, within 30 
days of award of the capital advance, the Sec-
retary shall delegate review and processing of 
such projects to a State or local housing agency 
that— 
(i) is in geographic proximity to the 
property;
(ii) has demonstrated experience in 
and capacity for underwriting multifamily 
housing loans that provide housing and 
supportive services; 
(iii) may or may not be providing low- 
income housing tax credits in combination 
with the capital advance under this section; 
and 
(iv) agrees to issue a firm commit-
ment within 12 months of delegation. 
(B) PROCESSING
BY
SECRETARY.—The 
Secretary shall retain the authority to process 
capital advances in cases in which no State or 
local housing agency has applied to provide del-
egated processing pursuant to this paragraph or 
no such agency has entered into an agreement 
with the Secretary to serve as a delegated proc-
essing agency. 
(C) PROCESSING
FEES.—An agency to 
which review and processing is delegated pursu-
ant to subparagraph (A) may assess a reason-
able fee which shall be included in the capital 
advance amounts and may recommend project 
rental assistance amounts in excess of those ini-
tially awarded 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 con-
sideration any other fees to be paid to the agen-
cy for other funding provided to the project by 
the agency, including bonds, tax credits, and 
other gap funding. 
(D) 
AUTHORITY
RETAINED
BY
SEC-
RETARY.—Under such delegated system, the 
Secretary shall retain the authority to approve 
rents and development 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 reasons for 
any reduction in capital advance amounts or 
project rental assistance and such reductions 
shall be subject to appeal. 
(h) PROVISION OF SUPPORTIVE SERVICES TO VET-
ERAN FAMILIES.— 
(1) IN GENERAL.—The Secretary of Housing 
and Urban Development shall coordinate with the 
Secretary of Veterans Affairs to ensure that any 
housing assistance provided to veterans or veteran 
families includes a range of services tailored to the
needs of the very low-income veteran families occu-
pying such housing, which may include services 
for— 
(A) outreach; 
(B) health (including counseling, mental 
health, substance abuse, post-traumatic stress 
disorder, and traumatic brain injury) diagnosis 
and treatment; 
(C) habilitation and rehabilitation; 
(D) case management; 
(E) daily living; 
(F) personal financial planning; 
(G) transportation; 
(H) vocation; 
(I) employment and training; 
(J) education; 
(K) assistance in obtaining veterans bene-
fits and public benefits; 
(L) assistance in obtaining income support; 
(M) assistance in obtaining health insur-
ance; 
(N) fiduciary and representative payee; 
(O) legal aid; 
(P) child care; 
(Q) housing counseling;
(R) service coordination; and 
(S) other services necessary for maintain-
ing independent living. 
(2) LOCAL COORDINATION OF SERVICES.— 
(A) IN GENERAL.—The Secretary of Hous-
ing and Urban Development shall coordinate 
with the Secretary of the Department of Vet-
erans Affairs to ensure that owners of housing 
assisted under this section have the managerial 
capacity to— 
(i) assess on an ongoing basis the 
service needs of residents; 
(ii) coordinate the provision of sup-
portive services and tailor such services to 
the individual needs of residents; and 
(iii) seek on a continuous basis new 
sources of assistance to ensure the long- 
term provision of supportive services. 
(B) CLASSIFICATION OF COSTS.—Any cost 
associated with this subsection relating to the 
coordination of services shall be an eligible cost 
under subsections (c)(3). 
(i) DEVELOPMENT COST LIMITATIONS.— 
(1) IN GENERAL.—The Secretary shall periodi-
cally establish reasonable development cost limita-
tions by market area for various types and sizes of 
supportive housing for very low-income veteran fami-
lies by publishing a notice of the cost limitations in 
the Federal Register. 
(2) CONSIDERATIONS.—The cost limitations es-
tablished under paragraph (1) shall reflect— 
(A) the cost of construction, reconstruc-
tion, or moderate or substantial rehabilitation 
of supportive housing for very low-income vet-
eran families that meets applicable State and 
local housing and building codes; 
(B) the cost of movables necessary to the 
basic operation of the housing, as determined 
by the Secretary; 
(C) the cost of special design features nec-
essary to make the housing accessible to very 
low-income veteran families; 
(D) the cost of community space necessary 
to accommodate the provision of supportive 
services to veteran families; 
(E) if the housing is newly constructed, the 
cost of meeting the energy efficiency standards 
promulgated by the Secretary in accordance 
with section 109 of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 
12709); and 
(F) the cost of land, including necessary 
site improvement. 
(3) USE OF DATA.—In establishing development 
cost limitations for a given market area under this 
subsection, the Secretary shall use data that reflect 
currently prevailing costs of construction, recon-
struction, or moderate or substantial rehabilitation, 
and land acquisition in the area. 
(4) COMMUNITY SPACE.—For purposes of para-
graph (2), a community space shall include space for 
cafeterias or dining halls, community rooms or build-
ings, workshops, child care, adult day health facili-
ties or other outpatient health facilities, or other es-
sential service facilities. 
(5) COMMERCIAL
FACILITIES.—Neither this 
section nor any other provision of law may be con-
strued as prohibiting or preventing the location and 
operation, in a project assisted under this section, of 
commercial facilities for the benefit of residents of 
the project and the community in which the project 
is located, except that assistance made available 
under this section may not be used to subsidize any 
such commercial facility.
(6) ACQUISITION.—In the case of existing hous-
ing and related facilities to be acquired, the cost lim-
itations shall include— 
(A) the cost of acquiring such housing; 
(B) the cost of rehabilitation, alteration, 
conversion, or improvement, including the mod-
erate or substantial rehabilitation thereof; and 
(C) the cost of the land on which the hous-
ing and related facilities are located. 
(7) ANNUAL
ADJUSTMENTS.—The Secretary 
shall adjust the cost limitation not less than annu-
ally to reflect changes in the general level of con-
struction, reconstruction, and moderate and substan-
tial rehabilitation costs. 
(8) INCENTIVES FOR SAVINGS.— 
(A) SPECIAL HOUSING ACCOUNT.— 
(i) IN GENERAL.—The Secretary shall 
use the development cost limitations estab-
lished under paragraph (1) or (6) to cal-
culate the amount of financing to be made 
available to individual owners. 
(ii) ACTUAL DEVELOPMENTAL COSTS 
LESS
THAN
FINANCING.—Owners which 
incur actual development costs that are 
less than the amount of financing shall be
(9) DESIGN FLEXIBILITY.—The Secretary shall, 
to the extent practicable, give owners the flexibility 
to design housing appropriate to their location and 
proposed resident population within broadly defined 
parameters. 
(10) USE OF FUNDS FROM OTHER SOURCES.— 
An owner shall be permitted voluntarily to provide 
funds from sources other than this section for amen-
ities and other features of appropriate design and 
construction suitable for supportive housing under 
this section if the cost of such amenities is— 
(A) not financed with the advance; and 
(B) is not taken into account in deter-
mining the amount of Federal assistance or of 
the rent contribution of tenants. 
(j) TENANT SELECTION.— 
(1) IN GENERAL.—An owner shall adopt writ-
ten tenant selection procedures that are— 
(A) satisfactory to the Secretary and which 
are— 
(i) consistent with the purpose of im-
proving housing opportunities for very low- 
income veteran families; and
(ii) reasonably related to program eli-
gibility and an applicant’s ability to per-
form the obligations of the lease; and 
(B) compliant with subtitle C of title VI of 
the Housing and Community Development Act 
of 1992 (42 U.S.C. 13601 et seq.) and any reg-
ulations issued under such subtitle. 
(2) NOTIFICATION
OF
REJECTION.—Owners 
shall promptly notify in writing any rejected appli-
cant of the grounds for any rejection. 
(3) INFORMATION REGARDING HOUSING.— 
(A) IN
GENERAL.—The Secretary shall 
provide, to the Secretary of Veterans Affairs 
and the Secretary of Labor, information regard-
ing the availability of the housing assisted 
under this section. 
(B) SHARING OF INFORMATION WITH AD-
DITIONAL
AGENCIES.—Within 30 days of re-
ceipt of the information, the Secretary of Vet-
erans Affairs and Secretary of Labor shall pro-
vide such information to agencies in the area of 
the housing that receive assistance from the 
Department of Veterans Affairs and the De-
partment of Labor for providing medical care,
housing, supportive services or employment and 
training services to homeless veterans. 
(k) MISCELLANEOUS PROVISIONS.— 
(1) TECHNICAL
ASSISTANCE.—The Secretary 
shall make available appropriate technical assistance 
to ensure that prospective applicants are able to par-
ticipate more fully in the program carried out under 
this section. 
(2) CIVIL RIGHTS COMPLIANCE.—Each owner 
shall certify, to the satisfaction of the Secretary, 
that assistance made available under this section will 
be conducted and administered in conformity with 
title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000a et seq.), the Fair Housing Act (42 U.S.C. 
3601 et seq.), and other Federal, State, and local 
laws prohibiting discrimination and promoting equal 
opportunity. 
(3) OWNER DEPOSIT.— 
(A) IN GENERAL.—The Secretary shall re-
quire an owner of housing, assisted under this 
section, to deposit an amount not to exceed 
$15,000 in a special escrow account to ensure 
the owner’s commitment to the housing. Such 
amount shall be used only to cover operating 
deficits during the first three years of oper-
ations and shall not be used to cover construc-
tion shortfalls or inadequate initial project rent-
al assistance amounts. 
(B) REDUCTION OF REQUIREMENT.— 
(i) IN GENERAL.—The Secretary may 
reduce or waive the owner deposit specified 
under subparagraph (A) for individual ap-
plicants if the Secretary finds that such 
waiver or reduction is necessary to achieve 
the purposes of this section and the appli-
cant demonstrates to the satisfaction of 
the Secretary that it has the capacity to 
manage and maintain the housing in ac-
cordance with this section. 
(ii) 
NONPROFITS.—The 
Secretary 
may reduce or waive the requirement of 
the owner deposit under subparagraph (A) 
in the case of a nonprofit applicant that is 
not affiliated with a national sponsor, as 
determined by the Secretary. 
(4) NOTICE OF APPEAL.— 
(A) IN GENERAL.—The Secretary shall no-
tify an owner not less than 30 days prior to 
canceling any reservation of assistance provided 
under this section.
(B) APPEAL.— 
(i) FILING
DEADLINE.—During the 
30-day period following the receipt of any 
notice required under subparagraph (A), 
an owner may appeal the proposed can-
cellation. 
(ii) TIMING OF DECISION.—Any ap-
peal undertaken under clause (i), including 
review by the Secretary, shall be completed 
not later than 45 days after the appeal is 
filed. 
(5) LABOR.— 
(A) IN
GENERAL.—The Secretary shall 
take such action as may be necessary to ensure 
that all laborers and mechanics employed by 
contractors and subcontractors in the construc-
tion of housing with 12 or more units assisted 
under this section shall be paid wages at rates 
not less than the rates prevailing in the locality 
involved for the corresponding classes of labor-
ers and mechanics employed on construction of 
a similar character, as determined by the Sec-
retary of Labor in accordance with subchapter 
IV of chapter 31 of title 40, United States 
Code.
(B) EXEMPTION.—Subparagraph (A) shall 
not apply to any individual who— 
(i) performs services for which the in-
dividual volunteered; 
(ii) does not receive compensation for 
such services or is paid expenses, reason-
able benefits, or a nominal fee for such 
services; and 
(iii) is not otherwise employed at any 
time in the construction work. 
(6) ACCESS TO RESIDUAL RECEIPTS.— 
(A) IN GENERAL.—The Secretary shall au-
thorize the owner of a housing project assisted 
under this section to use any residual receipts 
held for the project in excess of $500 per unit 
(or in excess of such other amount prescribed 
by the Secretary based on the needs of the 
project) for activities to retrofit and renovate 
the project as described under section 802(d)(3) 
of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 8011(d)(3)) or to pro-
vide supportive services to residents of the 
project. 
(B) REPORT.—Any owner that uses resid-
ual receipts under this paragraph shall submit