lection established pursuant to section 295(c)(2); 
and 
‘‘(4) comply with the targeting requirements 
under subsection (c) of this section and the afford-
able housing requirements under section 297. 
‘‘(b) ELIGIBLE RECIPIENTS.—Trust Fund grant 
amounts of a grantee may be provided only to an organiza-
tion, agency, or other entity (including a for-profit entity, 
a nonprofit entity, and a faith-based organization) that— 
‘‘(1) demonstrates the experience, ability, and 
capacity (including financial capacity) to undertake, 
comply, and manage the eligible activity; 
‘‘(2) demonstrates its familiarly with the re-
quirements of any other Federal, State or local 
housing program that will be used in conjunction 
with such grant amounts to ensure compliance with 
all applicable requirements and regulations of such 
programs; and 
‘‘(3) makes such assurances to the grantee as 
the Secretary shall, by regulation, require to ensure 
that the recipient will comply with the requirements 
of this subtitle during the entire period that begins 
upon selection of the recipient to receive such grant 
amounts and ending upon the conclusion of all eligi-
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
ble activities that are engaged in by the recipient 
and funded with such grant amounts. 
‘‘(c) TARGETING REQUIREMENTS.—The targeting re-
quirements under this subsection are as follows: 
‘‘(1) REQUIREMENT OF USE OF ALL AMOUNTS 
FOR AFFORDABLE HOUSING FOR LOW-INCOME FAMI-
LIES.—All Trust Fund grant amounts of a grantee 
shall be distributed for use only for eligible activities 
relating to affordable housing that are for the ben-
efit only of families whose incomes do not exceed 80 
percent of the greater of— 
‘‘(A) the median family income for the 
area in which the housing is located, as deter-
mined by the Secretary with adjustments for 
smaller and larger families; and 
‘‘(B) the median family income for the 
State or insular area in which the housing is lo-
cated, as determined by the Secretary with ad-
justments for smaller and larger families. 
‘‘(2) USE OF 75 PERCENT FOR AFFORDABLE 
HOUSING
FOR
EXTREMELY
LOW-INCOME
FAMI-
LIES.—Not less than 75 percent of the Trust Fund 
grant amounts of a grantee for each fiscal year shall 
be used only for eligible activities relating to afford-
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
able housing that are for the benefit only of families 
whose incomes do not exceed the higher of— 
‘‘(A) 30 percent of the median family in-
come for the area in which the housing is lo-
cated, as determined by the Secretary with ad-
justments for smaller and larger families; and 
‘‘(B) the poverty line (as such term is de-
fined in section 673 of the Omnibus Budget 
Reconciliation Act of 1981 (42 U.S.C. 9902), 
including any revision required by such section) 
applicable to a family of the size involved. 
‘‘(3) USE OF 30 PERCENT FOR AFFORDABLE 
HOUSING FOR VERY POOR FAMILIES.—Not less than 
30 percent of the Trust Fund grant amounts of a 
grantee for each fiscal year shall be used only for el-
igible activities relating to affordable housing that 
are for the benefit only of families whose incomes do 
not exceed the maximum amount of income that an 
individual or family could have, taking into consider-
ation any income disregards, and remain eligible for 
benefits under the Supplemental Security Income 
program under title XVI of the Social Security Act 
(42 U.S.C. 1381 et seq.). 
‘‘(4) LIMITATION FOR YEARS IN WHICH LESS 
THAN $2 BILLION IS AVAILABLE.—If, for any fiscal 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
year, the total amount available pursuant to section 
293(a) for assistance under this subtitle is less than 
$2,000,000,000, in addition to the other require-
ments under this subsection— 
‘‘(A) all such amounts shall be used only 
for eligible activities relating to affordable hous-
ing that are for the benefit only of families 
whose incomes do not exceed the amount de-
scribed in paragraph (2) of this subsection; and 
‘‘(B) not less than 40 percent of such 
amounts shall be used only for eligible activities 
relating to affordable housing that is for use 
only by families whose incomes do not exceed 
the greater of the amounts described in para-
graphs (2) and (3) of this subsection. 
‘‘(d) USE FOR RURAL AREAS.—Of the Trust Fund 
grant amounts for any fiscal year for any grantee that 
is a State or participating jurisdiction that includes any 
rural areas, the State or participating jurisdiction shall 
use a portion for eligible activities located in rural areas 
that is proportionate to the identified need for such activi-
ties in such rural areas. 
‘‘(e) COST LIMITS.—The Secretary shall establish 
limitations on the amount of Trust Fund grant amounts 
that may be used, on a per unit basis, for eligible activi-
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
ties. Such limitations shall be the same as the per unit 
cost limits established pursuant to section 212(e) (42 
U.S.C. 12742(e)), as adjusted annually, and established 
by number of bedrooms, market area, and eligible activity. 
‘‘(f) FORMS OF ASSISTANCE.— 
‘‘(1) IN GENERAL.—Assistance may be distrib-
uted pursuant to this section in the form of— 
‘‘(A) capital grants, noninterest-bearing or 
low-interest loans or advances, deferred pay-
ment loans, guarantees, and loan loss reserves; 
‘‘(B) in the case of assistance for owner-
ship of one- to four-family owner-occupied hous-
ing, downpayment assistance, closing cost as-
sistance, and assistance for interest rate buy- 
downs; and 
‘‘(C) any other forms of assistance ap-
proved by the Secretary. 
‘‘(2) REPAYMENTS.—If a grantee awards as-
sistance under this section in the form of a loan or 
other mechanism by which funds are later repaid to 
the grantee, any repayments and returns received by 
the grantee shall be distributed by the grantee in ac-
cordance with the allocation plan under section 295 
for the grantee for the fiscal year in which such re-
payments are made or returns are received. 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
‘‘(g) COORDINATION WITH OTHER ASSISTANCE.—In 
distributing assistance pursuant to this section, each 
grantee shall, to the maximum extent practicable, coordi-
nate such distribution with the provision of other Federal, 
State, tribal, and local housing assistance, including— 
‘‘(1) in the case of any State, housing credit 
dollar amounts allocated by the State under section 
42(h) of the Internal Revenue Code of 1986; 
‘‘(2) assistance made available under subtitles 
A through F (42 U.S.C. 12721 et seq.) or the com-
munity development block grant program under title 
I of the Housing and Community Development Act 
of 1974 (42 U.S.C. 5301 et seq.); 
‘‘(3) private activity bonds; 
‘‘(4) assistance made available under section 9 
of the United States Housing Act of 1937 (42 
U.S.C. 1437g); 
‘‘(5) assistance made available under section 
8(o) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(o)); 
‘‘(6) assistance made available under title V of 
the Housing Act of 1949 (42 U.S.C. 1471 et seq.); 
‘‘(7) assistance made available under section 
101 of the Native American Housing Assistance and 
Self-Determination Act of 1996 (25 U.S.C. 4111); 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
‘‘(8) assistance made available from any State 
or local housing trust fund established to provide or 
assist in making available affordable housing; and 
‘‘(9) any other housing assistance programs. 
‘‘(h) PROHIBITED USES.—The Secretary shall— 
‘‘(1) by regulation, set forth prohibited uses of 
grant amounts under this subtitle, which shall in-
clude use for— 
‘‘(A) political activities; 
‘‘(B) advocacy; 
‘‘(C) lobbying, whether directly or through 
other parties; 
‘‘(D) counseling services; 
‘‘(E) travel expenses; and 
‘‘(F) preparing or providing advice on tax 
returns; 
‘‘(2) by regulation, provide that, except as pro-
vided in paragraph (3), grant amounts under this 
subtitle may not be used for administrative, out-
reach, or other costs of— 
‘‘(A) a grantee; or 
‘‘(B) any recipient of such grant amounts; 
and 
‘‘(3) by regulation, limit the amount of any 
Trust Fund grant amounts for a fiscal year that 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
may be used for administrative costs of the grantee 
of carrying out the program required under this sub-
title to a percentage of such grant amounts of the 
grantee for such fiscal year, which may not exceed 
10 percent. 
‘‘(i) LABOR STANDARDS.—Each grantee receiving 
Trust Fund grant amounts shall ensure that contracts for 
eligible activities assisted with such amounts comply with 
the same requirements under section 286 (42 U.S.C. 
12836) that are applicable to contracts for construction 
of affordable housing assisted under such Act. 
‘‘(j) COMPLIANCE WITH OTHER FEDERAL LAWS.— 
All amounts from the Trust Fund shall be allocated in 
accordance with, and any eligible activities carried out in 
whole or in part with grant amounts under this subtitle 
(including housing provided with such grant amounts) 
shall comply with and be operated in compliance with, 
other applicable provisions of Federal law, including— 
‘‘(1) laws relating to tenant protections and 
tenant rights to participate in decision making re-
garding their residences; 
‘‘(2) laws requiring public participation, includ-
ing laws relating to Consolidated Plans, Qualified 
Allocation Plans, and Public Housing Agency Plans; 
and 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
‘‘(3) fair housing laws and laws regarding ac-
cessibility in federally assisted housing, including 
section 504 of the Rehabilitation Act of 1973. 
‘‘SEC. 297. AFFORDABLE HOUSING. 
‘‘(a) RENTAL HOUSING.—A rental dwelling unit 
(which may include a dwelling unit in limited equity coop-
erative housing, as such term is defined in section 143(k) 
of the Internal Revenue Code of 1986 (26 U.S.C. 143(k)) 
or in housing of a cooperative housing corporation, as such 
term is defined in section 216(b) of the Internal Revenue 
Code of 1986 (26 U.S.A. 216(b))), shall be considered af-
fordable housing for purposes of this subtitle only if the 
dwelling unit is subject to legally binding commitments 
that ensure that the dwelling unit meets all of the fol-
lowing requirements: 
‘‘(1) RENTS.—The dwelling unit bears a rent 
not greater than the lesser of— 
‘‘(A) the existing fair market rental estab-
lished by the Secretary under section 8(c) of 
the United States Housing Act of 1937 (42 
U.S.C. 1437f(c)) for a dwelling unit of the 
same size in the same market area, or the ap-
plicable payment standard for assistance under 
section 8(o) of such Act, if higher; and 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
‘‘(B) a rent that does not exceed 30 per-
cent of the adjusted income of a family whose 
income equals 65 percent of the median income 
for the area, as determined by the Secretary, 
with adjustment for number of bedrooms in the 
unit, except that the Secretary may establish 
income ceilings higher or lower than 65 percent 
of the median for the area on the basis of the 
findings of the Secretary that such variations 
are necessary because of prevailing levels of 
construction costs or fair market rents, or un-
usually high or low family incomes. 
‘‘(2) TENANT RENT CONTRIBUTION.—The con-
tribution toward rent by the family residing in the 
dwelling unit will not exceed 30 percent of the ad-
justed income of such family. 
‘‘(3) NON-DISCRIMINATION AGAINST VOUCHER 
HOLDERS.—The dwelling unit is located in a project 
in which all dwelling units are subject to enforceable 
restrictions that provide that a unit may not be re-
fused for leasing to a holder of a voucher of eligi-
bility under section 8 of the United States Housing 
Act of 1937 (42 U.S.C. 1437f) because of the status 
of the prospective tenant as a holder of such vouch-
er. 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS
‘‘(4) MIXED INCOME.— 
‘‘(A) IN GENERAL.—The dwelling unit is 
located in a project in which not more than 50 
percent of the rental units in the project that 
receive assistance under this subtitle and are 
not previously occupied may be rented initially 
to families with incomes described in section 
295(c)(2), as determined at a reasonable time 
before occupancy. 
‘‘(B) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply in the case of a project having 
25 or fewer dwelling units that is— 
‘‘(i) located in a census tract in which 
the number of families having incomes less 
than the poverty line is less than 20 per-
cent; 
‘‘(ii) located in a rural area, as such 
term is defined in section 520 of the Hous-
ing Act of 1949 (42 U.S.C. 1490); or 
‘‘(iii) specifically made available only 
for households comprised of elderly fami-
lies or disabled families. 
‘‘(5) VISITABILITY.—To the extent the dwelling 
unit is not required under Federal law to comply 
with standards relating to accessibility to persons 
VerDate Aug 31 2005 
03:18 Jun 30, 2007
Jkt 059200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H2895.IH
H2895
bajohnson on PROD1PC77 with BILLS