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1986 or for which assistance is provided under 
subtitle A of title II of the Cranston Gonzalez 
National Affordable Housing Act of 1990, for 
which a housing assistance contract not subject 
to paragraph (13) of this subsection is estab-
lished, rent reasonableness shall be determined as 
otherwise provided by this paragraph, except 
that— 
‘‘(i) comparison with rent for units in 
the private, unassisted local market shall 
not be required if the rent is equal to or less 
than the rent for other comparable units re-
ceiving such tax credits or assistance in the 
project that are not occupied by families as-
sisted with tenant-based assistance under 
this subsection; and 
‘‘(ii) the rent shall not be considered 
reasonable for purposes of this paragraph if 
it exceeds the greater of— 
‘‘(I) the rents charged for other 
comparable units receiving such tax 
credits or assistance in the project that 
are not occupied by families assisted 
with tenant-based assistance under this 
subsection; and
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‘‘(II) the payment standard estab-
lished by the public housing agency for 
a unit of the size involved.’’. 
(b) SECTION 202 HOUSING FOR ELDERLY PERSONS.— 
Subsection (f) of section 202 of the Housing Act of 1959 
(12 U.S.C. 1701q(f)) is amended— 
(1) by striking ‘‘SELECTION CRITERIA.—’’ and 
inserting ‘‘INITIAL SELECTION CRITERIA AND PROC-
ESSING.— (1) SELECTION CRITERIA.—’’; 
(2) by redesignating paragraphs (1) through (7) 
as subparagraphs (A) through (G), respectively; and 
(3) by adding at the end the following new para-
graph: 
‘‘(2) DELEGATED PROCESSING.— 
‘‘(A) In issuing a capital advance under 
this subsection for any project for which financ-
ing for the purposes described in the last two 
sentences of subsection (b) is provided by a com-
bination of a capital advance under subsection 
(c)(1) 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—
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‘‘(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 combina-
tion with the capital advance under this 
section, and 
‘‘(iv) agrees to issue a firm commit-
ment within 12 months of delegation. 
‘‘(B) The Secretary shall retain the author-
ity to process capital advances in cases in which 
no State or local housing agency has applied to 
provide delegated processing pursuant to this 
paragraph or no such agency has entered into an 
agreement with the Secretary to serve as a dele-
gated processing agency. 
‘‘(C) An agency to which review and proc-
essing is delegated pursuant to subparagraph (A) 
may assess a reasonable fee which shall be in-
cluded in the capital advance amounts and may 
recommend project rental assistance amounts in 
excess of those initially awarded by the Sec-
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retary. 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 cred-
its, and other gap funding. 
‘‘(D) Under such delegated system, the Sec-
retary shall retain the authority to approve rents 
and development costs and to execute a capital 
advance within 60 days of receipt of the commit-
ment from the State or local agency. The Sec-
retary 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.’’. 
(c) MCKINNEY-VENTO ACT HOMELESS ASSISTANCE 
UNDER SHELTER PLUS CARE PROGRAM.— 
(1) TERM OF CONTRACTS WITH OWNER OR LES-
SOR.—Part I of subtitle F of the McKinney-Vento 
Homeless Assistance Act is amended— 
(A) by redesignating sections 462 and 463 
(42 U.S.C. 11403g, 11403h) as sections 463 and 
464, respectively;
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(B) by striking ‘‘section 463’’ each place 
such term appears in sections 471, 476, 481, 
486, and 488 (42 U.S.C. 11404, 11405, 11406, 
11407, and 11407b) and inserting ‘‘section 464’’; 
and 
(C) by inserting after section 461 (42 
U.S.C. 11403f) the following new section: 
‘‘SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR. 
‘‘An applicant under this subtitle may enter into a 
contract with the owner or lessor of a property that receives 
rental assistance under this subtitle having a term of not 
more than 15 years, subject to the availability of sufficient 
funds provided in appropriation Acts for the purpose of re-
newing expiring contracts for assistance payments. Such 
contract may, at the election of the applicant and owner 
or lessor, specify that such contract shall be extended for 
renewal terms of not more than 15 years each, subject to 
the availability of sufficient such appropriated funds.’’. 
(2) PROJECT-BASED RENTAL ASSISTANCE CON-
TRACTS.—Section 478(a) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11405a(a)) is 
amended by inserting before the period at the end the 
following: ‘‘; except that, in the case of any project for 
which equity is provided through any low-income 
housing tax credit pursuant to section 42 of the Inter-
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‘‘(i) the dollar amount in effect under 
subparagraph (C)(ii)(I) for such calendar 
year (after any increase under subpara-
graph (H)) shall be increased by $0.20, and 
‘‘(ii) the dollar amount in effect under 
subparagraph (C)(ii)(II) for such calendar 
year (after any increase under subpara-
graph (H)) shall be increased by an amount 
equal to 10 percent of such dollar amount 
(rounded to the next lowest multiple of 
$5,000).’’. 
SEC. 3002. DETERMINATION OF CREDIT RATE. 
(a) TEMPORARY MINIMUM CREDIT RATE FOR NON- 
FEDERALLY SUBSIDIZED NEW BUILDINGS.— 
(1) IN GENERAL.—Subsection (b) of section 42 is 
amended by striking paragraph (1), by redesignating 
paragraph (2) as paragraph (1), and by inserting 
after paragraph (1), as so redesignated, the following 
new paragraph: 
‘‘(2) TEMPORARY
MINIMUM
CREDIT
RATE
FOR 
NON-FEDERALLY
SUBSIDIZED
NEW
BUILDINGS.—In 
the case of any new building— 
‘‘(A) which is placed in service by the tax-
payer after the date of the enactment of this 
paragraph and before December 31, 2013, and
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‘‘(B) which is not federally subsidized for 
the taxable year, 
the applicable percentage shall not be less than 9 per-
cent.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (b) of section 42, as amended 
by paragraph (1), is amended by striking ‘‘For 
purposes of this section—’’ and all that follows 
through ‘‘means the appropriate’’ and inserting 
the following: 
‘‘(1) DETERMINATION OF APPLICABLE PERCENT-
AGE.—For purposes of this section, the term ‘applica-
ble percentage’ means, with respect to any building, 
the appropriate’’. 
(B) Clause (i) of section 42(b)(1)(B), as re-
designated by paragraph (1), is amended by 
striking ‘‘a building described in paragraph 
(1)(A)’’ and inserting ‘‘a new building which is 
not federally subsidized for the taxable year’’. 
(C) Clause (ii) of section 42(b)(1)(B), as re-
designated by paragraph (1), is amended by 
striking ‘‘a building described in paragraph 
(1)(B)’’ and inserting ‘‘a building not described 
in clause (i)’’.
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(b) MODIFICATIONS TO DEFINITION OF FEDERALLY 
SUBSIDIZED BUILDING.— 
(1) IN GENERAL.—Subparagraph (A) of section 
42(i)(2) is amended by striking ‘‘, or any below mar-
ket Federal loan,’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (B) of section 42(i)(2) is 
amended— 
(i) by striking ‘‘BALANCE OF LOAN OR’’ 
in the heading thereof, 
(ii) by striking ‘‘loan or’’ in the matter 
preceding clause (i), and 
(iii) by striking ‘‘subsection (d)—’’ 
and all that follows and inserting ‘‘sub-
section (d) the proceeds of such obligation.’’. 
(B) Subparagraph (C) of section 42(i)(2) is 
amended— 
(i) by striking ‘‘or below market Fed-
eral loan’’ in the matter preceding clause 
(i), 
(ii) in clause (i)— 
(I) by striking ‘‘or loan (when 
issued or made)’’ and inserting ‘‘(when 
issued)’’, and
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(II) by striking ‘‘the proceeds of 
such obligation or loan’’ and inserting 
‘‘the proceeds of such obligation’’, and 
(iii) by striking ‘‘, and such loan is re-
paid,’’ in clause (ii). 
(C) Paragraph (2) of section 42(i) is 
amended by striking subparagraphs (D) and 
(E). 
(c) EFFECTIVE DATE.—The amendments made by this 
subsection shall apply to buildings placed in service after 
the date of the enactment of this Act. 
SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE 
BASIS. 
(a) INCREASE IN CREDIT FOR CERTAIN STATE DES-
IGNATED
BUILDINGS.—Subparagraph 
(C) 
of 
section 
42(d)(5) (relating to increase in credit for buildings in high 
cost areas), before redesignation under subsection (g), is 
amended by adding at the end the following new clause: 
‘‘(v) 
BUILDINGS
DESIGNATED
BY 
STATE
HOUSING
CREDIT
AGENCY.—Any 
building which is designated by the State 
housing credit agency as requiring the in-
crease in credit under this subparagraph in 
order for such building to be financially fea-
sible as part of a qualified low-income hous-
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ing project shall be treated for purposes of 
this subparagraph as located in a difficult 
development area which is designated for 
purposes of this subparagraph. The pre-
ceding sentence shall not apply to any 
building if paragraph (1) of subsection (h) 
does not apply to any portion of the eligible 
basis of such building by reason of para-
graph (4) of such subsection.’’. 
(b) MODIFICATION
TO REHABILITATION REQUIRE-
MENTS.— 
(1) 
IN
GENERAL.—Clause 
(ii) 
of 
section 
42(e)(3)(A) is amended— 
(A) by striking ‘‘10 percent’’ in subclause 
(I) and inserting ‘‘20 percent’’, and 
(B) by striking ‘‘$3,000’’ in subclause (II) 
and inserting ‘‘$6,000’’. 
(2) INFLATION ADJUSTMENT.—Paragraph (3) of 
section 42(e) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) INFLATION ADJUSTMENT.—In the case 
of any expenditures which are treated under 
paragraph (4) as placed in service during any 
calendar year after 2009, the $6,000 amount in
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STATE-ASSISTED BUILDINGS.—Paragraph (6) of section 
42(d) is amended to read as follows: 
‘‘(6) CREDIT ALLOWABLE FOR CERTAIN BUILD-
INGS ACQUIRED DURING 10-YEAR PERIOD DESCRIBED 
IN PARAGRAPH (2)(B)(ii).— 
‘‘(A) IN
GENERAL.—Paragraph (2)(B)(ii) 
shall not apply to any federally- or State-as-
sisted building. 
‘‘(B) BUILDINGS ACQUIRED FROM INSURED 
DEPOSITORY
INSTITUTIONS
IN
DEFAULT.—On 
application by the taxpayer, the Secretary may 
waive paragraph (2)(B)(ii) with respect to any 
building acquired from an insured depository in-
stitution in default (as defined in section 3 of the 
Federal Deposit Insurance Act) or from a re-
ceiver or conservator of such an institution. 
‘‘(C) 
FEDERALLY- 
OR
STATE-ASSISTED 
BUILDING.—For purposes of this paragraph— 
‘‘(i) 
FEDERALLY-ASSISTED
BUILD-
ING.—The term ‘federally-assisted building’ 
means any building which is substantially 
assisted, financed, or operated under section 
8 of the United States Housing Act of 1937, 
section 221(d)(3), 221(d)(4), or 236 of the 
National Housing Act, section 515 of the