709
(iii) outreach to landlords and com-
munity groups to encourage participation 
in that voucher rental assistance program. 
(4) MONITORING
SYSTEMS.—The Secretary 
may use not more than 1 percent of any amount 
made available to the Fund under this section to es-
tablish monitoring systems for the Fund. 
(5) REPORT.—Not later than 12 months after 
the date of enactment of this Act, the Secretary 
shall—
(A) conduct a detailed evaluation of the ef-
fect of providing assistance under this section; 
and 
(B) submit a report to Congress regarding 
the evaluation conducted under subparagraph 
(A). 
(6) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to the Fund, 
$50,000,000 for each of the fiscal years 2004 
through 2013 to carry out this section.
Subtitle B—National Affordable 
Housing Trust Fund 
SEC. 7101. PURPOSES. 
The purposes of this subtitle are—
710
(1) to fill the growing gap in the national abil-
ity to build affordable housing by using profits gen-
erated by Federal housing programs to fund addi-
tional housing activities, and not supplant existing 
housing appropriations; 
(2) to enable rental housing to be built for 
those families with the greatest need in areas with 
the greatest opportunities in mixed-income settings; 
and 
(3) to promote homeownership for low-income 
families. 
SEC. 7102. NATIONAL AFFORDABLE HOUSING TRUST FUND. 
(a) ESTABLISHMENT OF TRUST FUND.—There is es-
tablished in the Treasury of the United States a trust fund 
to be known as the ‘‘National Affordable Housing Trust 
Fund’’ (referred to in this subtitle as the ‘‘Trust Fund’’) 
for the purpose of promoting the development of afford-
able housing. 
(b) DEPOSITS TO THE TRUST FUND.—For fiscal 
year 2004 and each fiscal year thereafter, there is author-
ized to be appropriated to the Trust Fund an amount 
equal to the sum of—
(1) any revenue generated by the Mutual Mort-
gage Insurance Fund of the Federal Housing Ad-
ministration in excess of the amount necessary for
711
the Mutual Mortgage Insurance Fund to maintain a 
capital ratio of 3 percent for the preceding fiscal 
year; and 
(2) any revenue generated by the Government 
National Mortgage Association in excess of the 
amount necessary to pay the administrative costs 
and expenses necessary to ensure the safety and 
soundness of the Government National Mortgage As-
sociation for the preceding fiscal year, as determined 
by the Secretary of Housing and Urban Develop-
ment. 
(c) EXPENDITURES FROM THE TRUST FUND.—For 
fiscal year 2004 and each fiscal year thereafter, amounts 
appropriated to the Trust Fund shall be available to the 
Secretary of Housing and Urban Development for use in 
accordance with section 7103. 
SEC. 7103. ADMINISTRATION OF NATIONAL AFFORDABLE 
HOUSING TRUST FUND. 
(a) DEFINITIONS.—In this section: 
(1) AFFORDABLE HOUSING.—The term ‘‘afford-
able housing’’ means housing for rental that bears 
rents not greater than the lesser of— 
(A) the existing fair market rent for com-
parable units in the area, as established by the
712
Secretary under section 8 of the United States 
Housing Act of 1937 (42 U.S.C. 1437f); or 
(B) a rent that does not exceed 30 percent 
of the adjusted income of a family whose in-
come equals 65 percent of the median income 
for the area, as determined by the Secretary, 
with an adjustment for the number of bedrooms 
in the unit, except that the Secretary may es-
tablish income ceilings that are higher or lower 
than 65 percent of the median for the area if 
the Secretary finds that such variations are 
necessary because of prevailing levels of con-
struction costs or fair market rents, or unusu-
ally high or low family incomes. 
(2) CONTINUED ASSISTANCE RENTAL SUBSIDY 
PROGRAM.—The term ‘‘continued assistance rental 
subsidy program’’ means a program under which— 
(A) project-based assistance is provided, 
for not more than 3 years, to a family in an af-
fordable housing unit developed with assistance 
made available under subsection (c) or (d) in a 
project that partners with a public housing 
agency, which agency agrees—
(i) to provide the assisted family with 
a priority for the receipt of a voucher
713
under section 8(o) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(o)) 
if the family chooses to move after the ini-
tial year of occupancy; and 
(ii) to refer eligible voucher holders to 
the property when a vacancy occurs; and
(B) after 3 years, subject to appropria-
tions, continued assistance is provided under 
section 8(o) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(o)), notwithstanding 
any provision to the contrary in that section, 
if—
(i) the program is administered to 
provide families with the option of contin-
ued assistance with tenant-based vouchers 
if such a family chooses to move after the 
initial year of occupancy; and 
(ii) the public housing agency agrees 
to refer eligible voucher holders to the 
property when a vacancy occurs.
(3) ELIGIBLE
ACTIVITY.—The term ‘‘eligible 
activity’’ means an activity that relates to the devel-
opment of affordable housing, including—
(A) the construction of new housing; 
(B) the acquisition of real property;
714
(C) site preparation and improvement, in-
cluding demolition; 
(D) substantial rehabilitation of existing 
housing; and 
(E) rental subsidy for not more than 3 
years under a continued assistance rental sub-
sidy program. 
(4) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ includes any public or private nonprofit or for-
profit entity, unit of local government, regional plan-
ning entity, and any other entity engaged in the de-
velopment of affordable housing, as determined by 
the Secretary. 
(5) ELIGIBLE INTERMEDIARY.—The term ‘‘eli-
gible intermediary’’ means— 
(A) a nonprofit community development 
corporation; 
(B) a community development financial in-
stitution (as defined in section 103 of the Com-
munity Development Banking and Financial In-
stitutions Act of 1994 (12 U.S.C. 4702)); 
(C) a State or local trust fund; 
(D) any entity eligible for assistance under 
section 4 of the HUD Demonstration Act of 
1993 (42 U.S.C. 9816 note);
715
(E) a national, regional, or statewide non-
profit organization; and 
(F) any other appropriate nonprofit entity, 
as determined by the Secretary. 
(6) EXTREMELY LOW-INCOME FAMILIES.—The 
term ‘‘extremely low-income families’’ means very 
low-income families (as defined in section 3(b) of the 
United States Housing Act of 1937 (42 U.S.C. 
1437a(b)) whose incomes do not exceed 30 percent 
of the median family income for the area, as deter-
mined by the Secretary with adjustments for smaller 
and larger families, except that the Secretary may 
establish income ceilings that are higher or lower 
than 30 percent of the median for the area if the 
Secretary finds that such variations are necessary 
because of unusually high or low family incomes. 
(7) LOW-INCOME FAMILIES.—The term ‘‘low-in-
come families’’ has the same meaning as in section 
3(b) of the United States Housing Act of 1937 (42 
U.S.C. 1437a(b)). 
(8) 
NON-FEDERAL
SOURCES.—Non-Federal 
sources include—
(A) 50 percent of funds allocable to tax 
credits allocated under section 42 of the Inter-
nal Revenue Code of 1986;
716
(B) 50 percent of revenue from mortgage 
revenue bonds issued under section 143 of that 
Code; and 
(C) 50 percent of proceeds from the sale of 
tax exempt bonds. 
(9) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(10) STATE.—The term ‘‘State’’ has the same 
meaning as in section 3(b) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b)). 
(b) ALLOCATION TO STATES AND ELIGIBLE INTER-
MEDIARIES.—For fiscal year 2004 and each fiscal year 
thereafter, of the total amount made available to the Sec-
retary from the Trust Fund under section 7102(c)—
(1) 75 percent shall be used by the Secretary 
to award grants to States in accordance with sub-
section (c); and 
(2) 25 percent shall be used by the Secretary 
to award grants to eligible intermediaries in accord-
ance with subsection (d). 
(c) GRANTS TO STATES.—
(1) IN GENERAL.—Subject to paragraph (2), 
from the amount made available for each fiscal year 
under subsection (b)(1), the Secretary shall award 
grants to States, in accordance with an allocation
717
formula established by the Secretary, based on the 
pro rata share of each State of the total need among 
all States for an increased supply of affordable hous-
ing, as determined on the basis of— 
(A) the number and percentage of families 
in the State that live in substandard housing; 
(B) the number and percentage of families 
in the State that pay more than 50 percent of 
their annual income for housing costs; 
(C) the number and percentage of persons 
living at or below the poverty level in the State; 
(D) the cost of developing or carrying out 
substantial rehabilitation of housing in the 
State; 
(E) the age of the multifamily housing 
stock in the State; and 
(F) such other factors as the Secretary de-
termines to be appropriate. 
(2) GRANT AMOUNT.—The amount of a grant 
award to a State under this subsection shall be equal 
to the lesser of—
(A) 4 times the amount of assistance pro-
vided by the State from non-Federal sources; 
and
718
(B) the allocation determined in accord-
ance with paragraph (1). 
(3) AWARD OF STATE ALLOCATION TO CERTAIN 
ENTITIES.—
(A) IN GENERAL.—If the amount provided 
by a State from non-Federal sources is less 
than 25 percent of the amount that would be 
awarded to the State under this subsection 
based on the allocation formula described in 
paragraph (1), then not later than 60 days 
after the date on which the Secretary deter-
mines that the State is not eligible for the full 
allocation determined under paragraph (1), the 
Secretary shall publish a notice regarding the 
availability of the funds for which the State is 
ineligible.
(B) APPLICATIONS.—Not later than 9 
months after the date of publication of a notice 
of funding availability under subparagraph (A), 
a nonprofit or public entity (or a consortium 
thereof, which may include units of local gov-
ernment working together on a regional basis) 
may submit to the Secretary an application for 
the available assistance or a portion of the
719
available assistance, which application shall in-
clude— 
(i) a certification that the applicant 
will provide assistance in an amount equal 
to 25 percent of the amount of assistance 
made available to the applicant under this 
paragraph; and 
(ii) an allocation plan that meets the 
requirements of paragraph (4)(B) for use 
or distribution in the State of any assist-
ance made available to the applicant under 
this paragraph and the assistance provided 
by the applicant for purposes of clause (i). 
(C) AWARD
OF
ASSISTANCE.—The Sec-
retary shall award the amount that is not 
awarded to a State by operation of paragraph 
(2) to 1 or more applicants that meet the re-
quirements of subparagraph (B) of this para-
graph that are selected by the Secretary based 
on selection criteria, established by regulation 
of the Secretary. 
(4) DISTRIBUTION TO ELIGIBLE ENTITIES.— 
(A) IN GENERAL.—Of the amount that a 
State receives under a grant award under this 
subsection and the assistance provided by the
720
State from non-Federal sources for purposes of 
paragraph (2)(A) to eligible entities for the pur-
pose of assisting those entities in carrying out 
eligible activities in the State, the State shall 
distribute— 
(i) 75 percent to eligible entities for 
eligible activities relating to the develop-
ment of affordable housing for rental by 
extremely low-income families in the State; 
and 
(ii) 25 percent to eligible entities for 
eligible activities relating to the develop-
ment of affordable housing for rental by 
low-income families in the State, or for 
homeownership assistance for low-income 
families in the State. 
(B) ALLOCATION PLAN.—Each State shall, 
after giving notice to the public, an opportunity 
for public comment, and consideration of public 
comments received, establish an allocation plan 
for the distribution of assistance under this 
paragraph, which plan shall be submitted to the 
Secretary and shall be made available to the 
public by the State, and which shall include—
721
(i) application requirements for eligi-
ble entities seeking to receive assistance 
under this paragraph, including a require-
ment that each application include— 
(I) a certification by the appli-
cant that any housing developed with 
assistance under this paragraph will 
remain affordable for extremely low-
income families or low-income fami-
lies, as applicable, for not less than 40 
years; 
(II) a certification by the appli-
cant that the tenant contribution to-
wards rent for a family that resides in 
a unit developed with assistance under 
this paragraph will not exceed 30 per-
cent of the adjusted income of that 
family; and 
(III) a certification by the appli-
cant that the owner of a project in 
which any housing developed with as-
sistance under this paragraph is lo-
cated will make a percentage of units 
in the project available to families as-
sisted under the voucher program
722
under section 8(o) of the United 
States Housing Act of 1937 (42 
U.S.C. 1437f(o)) on the same basis as 
other families eligible for the housing 
(except that only the expected share 
of rent of the voucher holder shall be 
considered), which percentage shall 
not be less than the percentage of the 
total cost of developing or rehabili-
tating the project that is funded with 
assistance under this paragraph; and 
(ii) factors for consideration in select-
ing among applicants that meet the appli-
cation requirements under clause (i), which 
factors shall give preference to applicants 
based on—
(I) the amount of assistance for 
the eligible activities leveraged by the 
applicant from private and other non-
Federal sources, including assistance 
made available under section 8 of the 
United States Housing Act of 1937 
(42 U.S.C. 1437f) that is devoted to 
the project in which the housing to be
723
developed with assistance under this 
paragraph is located; 
(II) the extent of local assistance 
that will be provided in carrying out 
the eligible activities, including— 
(aa) 
financial 
assistance; 
and 
(bb) the extent to which the 
applicant has worked with the 
unit of local government in which 
the housing will be located to ad-
dress issues of siting and exclu-
sionary zoning or other policies 
that are barriers to affordable 
housing;
(III) the degree to which the de-
velopment in which the housing will 
be located is mixed-income; 
(IV) whether the housing will be 
located in a census tract in which the 
poverty rate is less than 20 percent; 
(V) whether the housing will be 
located in a community undergoing 
revitalization;
724
(VI) the extent of employment 
and other opportunities for low-in-
come families in the area in which the 
housing will be located; and 
(VII) the extent to which the ap-
plicant demonstrates the ability to 
maintain units as affordable for ex-
tremely low-income or low-income 
families, as applicable, through the 
use of assistance made available under 
this paragraph, assistance leveraged 
from non-Federal sources, assistance 
made available under section 8 of the 
United States Housing Act of 1937 
(42 U.S.C. 1437f), State or local as-
sistance, programs to increase tenant 
income, cross-subsidization, and any 
other resources. 
(C) FORMS OF ASSISTANCE.—
(i) IN GENERAL.—Assistance distrib-
uted under this paragraph may be in the 
form of capital grants, non-interest bearing 
or low-interest loans or advances, deferred 
payment loans, guarantees, and any other
725
forms of assistance approved by the Sec-
retary. 
(ii) REPAYMENTS.—If a State awards 
assistance under this paragraph in the 
form of a loan or other mechanism by 
which funds are later repaid to the State, 
any repayments received by the State shall 
be distributed by the State in accordance 
with the allocation plan described in sub-
paragraph (B) during the following fiscal 
year. 
(D) COORDINATION WITH OTHER ASSIST-
ANCE.—In distributing assistance under this 
paragraph, each State shall, to the maximum 
extent practicable, coordinate the distribution 
with the provision of other affordable housing 
assistance by the State, including— 
(i) housing credit dollar amounts allo-
cated by the State under section 42(h) of 
the Internal Revenue Code of 1986; 
(ii) assistance made available under 
the HOME Investment Partnerships Act 
(42 U.S.C. 12721 et seq.) or the commu-
nity development block grant program; and 
(iii) private activity bonds.
726
(d) NATIONAL COMPETITION.—
(1) IN
GENERAL.—From the amount made 
available for each fiscal year under subsection 
(b)(2), the Secretary shall award grants on a com-
petitive basis to eligible intermediaries, which grants 
shall be used in accordance with paragraph (3) of 
this subsection. 
(2) APPLICATION REQUIREMENTS AND SELEC-
TION CRITERIA.—The Secretary, by regulation, shall 
establish application requirements and selection cri-
teria for the award of competitive grants to eligible 
intermediaries under this subsection, which criteria 
shall include— 
(A) the ability of the eligible intermediary 
to meet housing needs of low-income families on 
a national or regional scope; 
(B) the capacity of the eligible inter-
mediary to use the grant award in accordance 
with paragraph (3), based on the past perform-
ance and management of the applicant; and 
(C) the extent to which the eligible inter-
mediary has leveraged funding from private and 
other non-Federal sources for the eligible activi-
ties. 
(3) USE OF GRANT AWARD.—
727
(A) IN GENERAL.—Except as provided in 
subparagraph (B), of the amount of a grant 
made available under this subsection, an eligible 
intermediary shall ensure that—
(i) 75 percent shall be used for eligi-
ble activities relating to the development of 
affordable housing for rental by extremely 
low-income families; and 
(ii) 25 percent shall be used for eligi-
ble activities relating to the development of 
affordable housing for rental by low-income 
families, or for homeownership assistance 
for low-income families. 
(B) EXCEPTION.—
(i) IN
GENERAL.—If a grant made 
available under this subsection is used for 
a project described in clause (ii), an eligi-
ble intermediary may use that amount for 
eligible activities relating to the develop-
ment of housing for rental by families 
whose incomes are less than 60 percent of 
the area median income, and for home-
ownership activities for families whose in-
comes are less than 80 percent of area me-
dian income.
728
(ii) PROJECT
CONTRIBUTING
TO
A 
CONCERTED
COMMUNITY
REVITALIZATION 
PLAN.—A project is described in this 
clause if— 
(I) it is located in a community 
undergoing 
concerted 
revitalization 
and is contributing to a community 
revitalization plan; and 
(II) it is located in a census tract 
in which—
(aa) the median household 
income is less than 60 percent of 
the area median income; or 
(bb) the rate of poverty is 
greater than 20 percent.
(C) PLAN
OF
USE.—Each eligible inter-
mediary that receives a grant under this sub-
section shall establish a plan for the use or dis-
tribution of the amount made available under 
the grant, which plan shall be submitted to the 
Secretary and shall include information relating 
to the manner in which the eligible intermediary 
will either use or distribute that amount, in-
cluding—
729
(i) a certification that assistance 
under this subsection will be used to sup-
plement assistance leveraged from private 
and other non-Federal sources, including 
assistance made available under section 8 
of the United States Housing Act of 1937 
(42 U.S.C. 1437f) that is devoted to the 
project in which the housing to be devel-
oped is located; 
(ii) a certification that local assistance 
will be provided in carrying out the eligible 
activities, which may include— 
(I) financial assistance; and 
(II) a good faith effort to work 
with the unit of local government in 
which the housing will be located to 
address issues of siting and exclu-
sionary zoning or other policies that 
are barriers to affordable housing; 
(iii) a certification that any housing 
developed with assistance under this sub-
section will remain affordable for extremely 
low-income families or low-income families, 
as applicable, for not less than 40 years;
730
(iv) a certification that any housing 
developed by the applicant with assistance 
under this subsection will be located— 
(I) in a mixed-income develop-
ment in a census tract having a pov-
erty rate of not more than 20 percent, 
and near employment and other op-
portunities for low-income families; or 
(II) in a community undergoing 
revitalization; 
(v) a certification that the tenant con-
tribution toward rent for a family residing 
in a unit developed with assistance under 
this paragraph will not exceed 30 percent 
of the adjusted income of that family; and 
(vi) a certification by the applicant 
that the owner of a project in which any 
housing developed with assistance under 
this subsection is located will make a per-
centage of units in the project available to 
families assisted under the voucher pro-
gram under section 8(o) of the United 
States Housing Act of 1937 (42 U.S.C. 
1437f(o)) on the same basis as other fami-
lies eligible for the housing (except that
731
only the expected share of rent of the 
voucher holder shall be considered), which 
percentage shall not be less than the per-
centage of the total cost of developing or 
rehabilitating the project that is funded 
with assistance under this subsection. 
(D) FORMS OF ASSISTANCE.—
(i) IN
GENERAL.—An eligible inter-
mediary may distribute the amount made 
available under a grant under this sub-
section in the form of capital grants, non-
interest bearing or low-interest loans or 
advances, deferred payment loans, guaran-
tees, and other forms of assistance. 
(ii) 
REPAYMENTS.—If 
an 
eligible 
intermediary awards assistance under this 
subsection in the form of a loan or other 
mechanism by which funds are later repaid 
to the eligible intermediary, any repay-
ments received by the eligible intermediary 
shall be distributed by the eligible inter-
mediary in accordance with the plan of use 
described in subparagraph (C) during the 
following fiscal year.
732
SEC. 7104. REGULATIONS. 
Not later than 6 months after the date of enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment shall promulgate regulations to carry out this sub-
title. 
Subtitle C—Housing Preservation 
Matching Grants 
SEC. 7201. SHORT TITLE. 
This subtitle may be cited as the ‘‘Housing Preserva-
tion Matching Grant Act of 2003’’. 
SEC. 7202. FINDINGS AND PURPOSES. 
(a) FINDINGS.—Congress finds that—
(1) since 1996, almost 200,000 affordable hous-
ing dwelling units in the United States have been 
lost through termination of low income affordability 
requirements, which usually involves the prepayment 
of the outstanding principal balance under the mort-
gage on the project in which such units are located; 
(2) more than 265,000 affordable housing 
dwelling units in the United States are at risk of 
prepayment; 
(3) the loss of the privately owned, federally as-
sisted affordable housing, which is occurring during 
a period when rents for unassisted housing are in-
creasing and few units of additional affordable hous-
ing are being developed, will cause unacceptable