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that such grant amounts may be used for the benefit 
only of extremely low- and very low-income families; 
‘‘(2) the production, preservation, and rehabili-
tation of housing for homeownership, including such 
forms as downpayment assistance, closing cost as-
sistance, and assistance for interest-rate buy-downs, 
that— 
‘‘(A) is available for purchase only for use 
as a principal residence by families that qualify 
both as— 
‘‘(i) extremely low- and very-low in-
come families at the times described in 
subparagraphs (A) through (C) of section 
215(b)(2) of the Cranston-Gonzalez Na-
tional 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 
reference in such section to assistance 
under title II of such Act shall for pur-
poses of this section be considered to refer 
to assistance from affordable housing fund 
grant amounts; 
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‘‘(B) has an initial purchase price that 
meets the requirements of section 215(b)(1) of 
the Cranston-Gonzalez National Affordable 
Housing Act; 
‘‘(C) is subject to the same resale restric-
tions established under section 215(b)(3) of the 
Cranston-Gonzalez National Affordable Hous-
ing Act and applicable to the participating ju-
risdiction that is the State in which such hous-
ing is located; and 
‘‘(D) is made available for purchase only 
by, or in the case of assistance under this para-
graph, is made available only to, homebuyers 
who have, before purchase— 
‘‘(i) completed a program of coun-
seling with respect to the responsibilities 
and financial management involved in 
homeownership that is approved by the Di-
rector; except that the Director may, at 
the request of a State, waive the require-
ments of this subparagraph with respect to 
a geographic area or areas within the State 
if: (I) the travel time or distance involved 
in providing counseling with respect to 
such area or areas, as otherwise required 
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under this subparagraph, on an in-person 
basis is excessive or the cost of such travel 
is prohibitive; and (II) the State provides 
alternative forms of counseling for such 
area or areas, which may include inter-
active telephone counseling, on-line coun-
seling, interactive video counseling, and 
interactive home study counseling and a 
program of financial literacy and education 
to promote an understanding of consumer, 
economic, and personal finance issues and 
concepts, including saving for retirement, 
managing credit, long-term care, and es-
tate planning and education on predatory 
lending, identity theft, and financial abuse 
schemes relating to homeownership that is 
approved by the Director, except that enti-
ties providing such counseling shall not 
discriminate against any particular form of 
housing; and 
‘‘(ii) demonstrated, in accordance with 
regulations as the Director shall issue set-
ting forth requirements for sufficient evi-
dence, that they are lawfully present in the 
United States; and 
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‘‘(3) public infrastructure development activities 
in connection with housing activities funded under 
paragraph (1) or (2). 
‘‘(h) ELIGIBLE
RECIPIENTS.—Affordable housing 
fund grant amounts of a grantee may be provided only 
to a recipient that is an organization, agency, or other en-
tity (including a for-profit entity, a nonprofit entity, and 
a faith-based organization) that— 
‘‘(1) has demonstrated experience and capacity 
to conduct an eligible activity under (g), as evi-
denced by its ability to— 
‘‘(A) own, construct or rehabilitate, man-
age, and operate an affordable multifamily rent-
al housing development; 
‘‘(B) design, construct or rehabilitate, and 
market affordable housing for homeownership; 
‘‘(C) provide forms of assistance, such as 
downpayments, closing costs, or interest-rate 
buy-downs, for purchasers; or 
‘‘(D) construct related public infrastruc-
ture development activities in connection with 
such housing activities; 
‘‘(2) demonstrates the ability and financial ca-
pacity to undertake, comply, and manage the eligible 
activity; 
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‘‘(3) 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 
‘‘(4) makes such assurances to the grantee as 
the Director shall, by regulation, require to ensure 
that the recipient will comply with the requirements 
of this section during the entire period that begins 
upon selection of the recipient to receive such grant 
amounts and ending upon the conclusion of all ac-
tivities under subsection (g) that are engaged in by 
the recipient and funded with such grant amounts. 
‘‘(i) LIMITATIONS ON USE.— 
‘‘(1) REQUIRED
AMOUNT
FOR
REFCORP.—Of 
the aggregate amount allocated pursuant to sub-
section (b) in each year to the affordable housing 
fund, 25 percent shall be used as provided in section 
21B(f)(2)(E) of the Federal Home Loan Bank Act 
(12 U.S.C. 1441b(f)(2)(E)). 
‘‘(2) REQUIRED AMOUNT FOR HOMEOWNERSHIP 
ACTIVITIES.—Of the aggregate amount of affordable 
housing fund grant amounts provided in each year 
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to a grantee, not less than 10 percent shall be used 
for activities under paragraph (2) of subsection (g). 
‘‘(3) MAXIMUM
AMOUNT
FOR
PUBLIC
INFRA-
STRUCTURE DEVELOPMENT ACTIVITIES IN CONNEC-
TION WITH AFFORDABLE HOUSING ACTIVITIES.—Of 
the aggregate amount of affordable housing fund 
grant amounts provided in each year to a grantee, 
not more than 12.5 percent may be used for activi-
ties under paragraph (3) of subsection (g). 
‘‘(4) DEADLINE FOR COMMITMENT OR USE.— 
Any affordable housing fund grant amounts of a 
grantee shall be used or committed for use within 
two years of the date of that such grant amounts 
are made available to the grantee. The Director shall 
recapture into the affordable housing fund any such 
amounts not so used or committed for use and allo-
cate such amounts under subsection (d)(1) in the 
first year after such recapture. 
‘‘(5) USE OF RETURNS.—The Director shall, by 
regulation provide that any return on a loan or other 
investment of any affordable housing fund grant 
amounts of a grantee shall be treated, for purposes 
of availability to and use by the grantee, as afford-
able housing fund grant amounts. 
‘‘(6) PROHIBITED USES.—The Director shall— 
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‘‘(A) by regulation, set forth prohibited 
uses of affordable housing fund grant amounts, 
which shall include use for— 
‘‘(i) political activities; 
‘‘(ii) advocacy; 
‘‘(iii) lobbying, whether directly or 
through other parties; 
‘‘(iv) counseling services; 
‘‘(v) travel expenses; and 
‘‘(vi) preparing or providing advice on 
tax returns; 
‘‘(B) by regulation, provide that, except as 
provided in subparagraph (C), affordable hous-
ing fund grant amounts of a grantee may not 
be used for administrative, outreach, or other 
costs of— 
‘‘(i) the grantee; or 
‘‘(ii) any recipient of such grant 
amounts; and 
‘‘(C) by regulation, limit the amount of 
any affordable housing fund grant amounts of 
the grantee for a year that may be used for ad-
ministrative costs of the grantee of carrying out 
the program required under this section to a 
percentage of such grant amounts of the grant-
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ee for such year, which may not exceed 10 per-
cent. 
‘‘(7) PROHIBITION OF CONSIDERATION OF USE 
FOR
MEETING
HOUSING
GOALS
OR
DUTY
TO 
SERVE.—In determining compliance with the hous-
ing goals under this subpart and the duty to serve 
underserved markets under section 1335, the Direc-
tor may not consider any affordable housing fund 
grant amounts used under this section for eligible 
activities under subsection (g). The Director shall 
give credit toward the achievement of such housing 
goals and such duty to serve underserved markets to 
purchases by the enterprises of mortgages for hous-
ing that receives funding from affordable housing 
fund grant amounts, but only to the extent that 
such purchases by the enterprises are funded other 
than with such grant amounts. 
‘‘(8) ACCEPTABLE
IDENTIFICATION
REQUIRE-
MENT FOR OCCUPANCY OR ASSISTANCE.— 
‘‘(A) IN
GENERAL.—Any assistance pro-
vided with any affordable housing grant 
amounts may not be made available to, or on 
behalf of, any individual or household unless the 
individual provides, or, in the case of a house-
hold, all adult members of the household pro-
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vide, personal identification in one of the fol-
lowing forms: 
‘‘(i) SOCIAL
SECURITY
CARD
WITH 
PHOTO IDENTIFICATION CARD OR REAL ID 
ACT IDENTIFICATION.— 
‘‘(I) A social security card ac-
companied by a photo identification 
card issued by the Federal Govern-
ment or a State Government; or 
‘‘(II) A driver’s license or identi-
fication card issued by a State in the 
case of a State that is in compliance 
with title II of the REAL ID Act of 
2005 (title II of division B of Public 
Law 109–13; 49 U.S.C. 30301 note). 
‘‘(ii) PASSPORT.—A passport issued 
by the United States or a foreign govern-
ment. 
‘‘(iii) USCIS PHOTO IDENTIFICATION 
CARD.—A photo identification card issued 
by the Secretary of Homeland Security 
(acting through the Director of the United 
States Citizenship and Immigration Serv-
ices). 
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‘‘(B) REGULATIONS.—The Director shall, 
by regulation, require that each grantee and re-
cipient take such actions as the Director con-
siders necessary to ensure compliance with the 
requirements of subparagraph (A). 
‘‘(j) ACCOUNTABILITY OF RECIPIENTS AND GRANT-
EES.— 
‘‘(1) RECIPIENTS.— 
‘‘(A) TRACKING OF FUNDS.—The Director 
shall— 
‘‘(i) require each grantee to develop 
and maintain a system to ensure that each 
recipient of assistance from affordable 
housing fund grant amounts of the grantee 
uses such amounts in accordance with this 
section, the regulations issued under this 
section, and any requirements or condi-
tions under which such amounts were pro-
vided; and 
‘‘(ii) establish minimum requirements 
for agreements, between the grantee and 
recipients, regarding assistance from the 
affordable housing fund grant amounts of 
the grantee, which shall include— 
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‘‘(I) appropriate continuing fi-
nancial and project reporting, record 
retention, and audit requirements for 
the duration of the grant to the re-
cipient to ensure compliance with the 
limitations and requirements of this 
section and the regulations under this 
section; and 
‘‘(II) any other requirements that 
the Director determines are necessary 
to ensure appropriate grant adminis-
tration and compliance. 
‘‘(B) MISUSE OF FUNDS.— 
‘‘(i) 
REIMBURSEMENT
REQUIRE-
MENT.—If any recipient of assistance from 
affordable housing fund grant amounts of 
a grantee is determined, in accordance 
with clause (ii), to have used any such 
amounts in a manner that is materially in 
violation of this section, the regulations 
issued under this section, or any require-
ments or conditions under which such 
amounts were provided, the grantee shall 
require that, within 12 months after the 
determination of such misuse, the recipient 
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shall reimburse the grantee for such mis-
used amounts and return to the grantee 
any amounts from the affordable housing 
fund grant amounts of the grantee that re-
main unused or uncommitted for use. The 
remedies under this clause are in addition 
to any other remedies that may be avail-
able under law. 
‘‘(ii) DETERMINATION.—A determina-
tion is made in accordance with this clause 
if the determination is— 
‘‘(I) made by the Director; or 
‘‘(II)(aa) made by the grantee; 
‘‘(bb) the grantee provides notifi-
cation of the determination to the Di-
rector for review, in the discretion of 
the Director, of the determination; 
and 
‘‘(cc) the Director does not sub-
sequently reverse the determination. 
‘‘(2) GRANTEES.— 
‘‘(A) REPORT.— 
‘‘(i) IN GENERAL.—The Director shall 
require each grantee receiving affordable 
housing fund grant amounts for a year to 
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submit a report, for such year, to the Di-
rector that— 
‘‘(I) describes the activities fund-
ed under this section during such year 
with the affordable housing fund 
grant amounts of the grantee; and 
‘‘(II) the manner in which the 
grantee complied during such year 
with the allocation plan established 
pursuant to subsection (e) for the 
grantee. 
‘‘(ii) PUBLIC AVAILABILITY.—The Di-
rector shall make such reports pursuant to 
this subparagraph publicly available. 
‘‘(B) MISUSE OF FUNDS.—If the Director 
determines, after reasonable notice and oppor-
tunity for hearing, that a grantee has failed to 
comply substantially with any provision of this 
section and until the Director is satisfied that 
there is no longer any such failure to comply, 
the Director shall— 
‘‘(i) reduce the amount of assistance 
under this section to the grantee by an 
amount equal to the amount affordable 
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housing fund grant amounts which were 
not used in accordance with this section; 
‘‘(ii) require the grantee to repay the 
Director an amount equal to the amount of 
the amount affordable housing fund grant 
amounts which were not used in accord-
ance with this section; 
‘‘(iii) limit the availability of assist-
ance under this section to the grantee to 
activities or recipients not affected by such 
failure to comply; or 
‘‘(iv) terminate any assistance under 
this section to the grantee. 
‘‘(k) CAPITAL REQUIREMENTS.—The utilization or 
commitment of amounts from the affordable housing fund 
shall not be subject to the risk-based capital requirements 
established pursuant to section 1361(a). 
‘‘(l) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) AFFORDABLE
HOUSING
FUND
GRANT 
AMOUNTS.—The term ‘affordable housing fund 
grant amounts’ means amounts from the affordable 
housing fund established under subsection (a) that 
are provided to a grantee pursuant to subsection 
(d)(3). 
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‘‘(2) GRANTEE.—The term ‘grantee’ means— 
‘‘(A) with respect to 2007, the Louisiana 
Housing Finance Agency and the Mississippi 
Development Authority; and 
‘‘(B) with respect to the years referred to 
in subsection (b)(1), other than 2007, each 
State (as such term is defined in section 1303) 
and each federally recognized Indian tribe. 
‘‘(3) RECIPIENT.—The term ‘recipient’ means 
an entity meeting the requirements under subsection 
(h) that receives assistance from a grantee from af-
fordable housing fund grant amounts of the grantee. 
‘‘(4) TOTAL MORTGAGE PORTFOLIO.—The term 
‘total mortgage portfolio’ means, with respect to a 
year, the sum, for all mortgages outstanding during 
that year in any form, including whole loans, mort-
gage-backed securities, participation certificates, or 
other structured securities backed by mortgages, of 
the dollar amount of the unpaid outstanding prin-
cipal balances under such mortgages. Such term in-
cludes all such mortgages or securitized obligations, 
whether retained in portfolio, or sold in any form. 
The Director is authorized to promulgate rules fur-
ther defining such term as necessary to implement 
this section and to address market developments. 
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‘‘(5) VERY-LOW
INCOME
FAMILY.—The term 
‘very low-income family’ has the meaning given such 
term in section 1303, except that such term includes 
any family that resides in a rural area that has an 
income that does not exceed the poverty line (as 
such term is defined in section 673(2) of the Omni-
bus 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. 
‘‘(m) REGULATIONS.— 
‘‘(1) IN GENERAL.—The Director, in consulta-
tion with the Secretary of Housing and Urban De-
velopment, shall issue regulations to carry out this 
section. 
‘‘(2) REQUIRED
CONTENTS.—The regulations 
issued under this subsection shall include— 
‘‘(A) a requirement that the Director en-
sure that the program of each grantee for use 
of affordable housing fund grant amounts of 
the grantee is audited not less than annually to 
ensure compliance with this section; 
‘‘(B) authority for the Director to audit, 
provide for an audit, or otherwise verify a 
grantee’s activities, to ensure compliance with 
this section; 
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‘‘(C) requirements for a process for appli-
cation to, and selection by, each grantee for ac-
tivities meeting the grantee’s priority housing 
needs to be funded with affordable housing 
fund grant amounts of the grantee, which shall 
provide for priority in funding to be based 
upon— 
‘‘(i) greatest impact; 
‘‘(ii) geographic diversity; 
‘‘(iii) ability to obligate amounts and 
undertake activities so funded in a timely 
manner; 
‘‘(iv) in the case of rental housing 
projects under subsection (g)(1), the extent 
to which rents for units in the project 
funded are affordable, especially for ex-
tremely low-income families; 
‘‘(v) in the case of rental housing 
projects under subsection (g)(1), the extent 
of the duration for which such rents will 
remain affordable; 
‘‘(vi) the extent to which the applica-
tion makes use of other funding sources; 
and 
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‘‘(vii) the merits of an applicant’s pro-
posed eligible activity; 
‘‘(D) requirements to ensure that amounts 
provided to a grantee from the affordable hous-
ing fund that are used for rental housing under 
subsection (g)(1) are used only for the benefit 
of extremely low- and very-low income families; 
‘‘(E) limitations on public infrastructure 
development activities that are eligible pursuant 
to subsection (g)(3) for funding with affordable 
housing fund grant amounts and requirements 
for the connection between such activities and 
housing activities funded under paragraph (1) 
or (2) of subsection (g); and 
‘‘(F) requirements and standards for es-
tablishment, by grantees (including the grantees 
for 2007 pursuant to subsection (l)(2)(A)), of 
performance goals, benchmarks, and timetables 
for the production, preservation, and rehabilita-
tion of affordable rental and homeownership 
housing with affordable housing fund grant 
amounts. 
‘‘(n) ENFORCEMENT OF REQUIREMENTS ON ENTER-
PRISE.—Compliance by the enterprises with the require-
ments under this section shall be enforceable under sub-
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part C. Any reference in such subpart to this part or to 
an order, rule, or regulation under this part specifically 
includes this section and any order, rule, or regulation 
under this section. 
‘‘(o) AFFORDABLE
HOUSING
TRUST
FUND.—If, 
after the enactment of this Act, in any year, there is en-
acted any provision of Federal law establishing an afford-
able housing trust fund other than under this title for use 
only for grants to provide affordable rental housing and 
affordable homeownership opportunities, and the subse-
quent year is a year referred to in subsection (b)(1), the 
Director shall in such subsequent year and any remaining 
years referred to in subsection (b)(1) transfer to such af-
fordable housing trust fund the aggregate amount allo-
cated pursuant to subsection (b) in such year to the af-
fordable housing fund under this section, less any amounts 
used pursuant to subsection (i)(1). For such subsequent 
and remaining years, the provisions of subsections (c) and 
(d) shall not apply. Notwithstanding any other provision 
of law, assistance provided using amounts transferred to 
such affordable housing trust fund pursuant to this sub-
section may not be used for any of the activities specified 
in clauses (i) through (vi) of subsection (i)(6). Nothing 
in this subsection shall be construed to alter the terms 
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