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‘‘(II) shall be calculated such that 
values higher than 1.0 indicate that the 
State’s construction costs are higher 
than the national average, a value of 
1.0 indicates that the State’s construc-
tion costs are exactly the same as the 
national average, and values lower 
than 1.0 indicate that the State’s cost 
of construction are lower than the na-
tional average. 
‘‘(C) 
PRIORITY.—The 
formula 
required 
under subparagraph (A) shall give priority em-
phasis and consideration to the factor described 
in subparagraph (B)(i). 
‘‘(4) ALLOCATION OF GRANT AMOUNTS.— 
‘‘(A) NOTICE.—Not later than 60 days after 
the date that the Secretary determines the for-
mula amounts described in paragraph (3), the 
Secretary shall caused to be published in the 
Federal Register a notice that such amounts 
shall be so available. 
‘‘(B) GRANT AMOUNT.—In each fiscal year 
other than fiscal year 2009, the Secretary shall 
make a grant to each State in an amount that
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is equal to the formula amount determined under 
paragraph (3) for that State. 
‘‘(C) MINIMUM STATE ALLOCATIONS.—If the 
formula amount determined under paragraph 
(3) for a fiscal year would allocate less than 
$3,000,000 to any of the 50 States of the United 
States or the District of Columbia, the allocation 
for such State of the United States or the Dis-
trict of Columbia shall be $3,000,000, and the 
increase shall be deducted pro rata from the allo-
cations made to all other of the States (as such 
term is defined in section 1303). 
‘‘(5) ALLOCATION PLANS REQUIRED.— 
‘‘(A) IN GENERAL.—For each year that a 
State or State designated entity receives a grant 
under this subsection, the State or State des-
ignated entity shall establish an allocation plan. 
Such plan shall— 
‘‘(i) set forth a plan for the distribu-
tion of grant amounts received by the State 
or State designated entity for such year; 
‘‘(ii) be based on priority housing 
needs, as determined by the State or State 
designated entity in accordance with the
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regulations established under subsection 
(g)(2)(D); 
‘‘(iii) comply with paragraph (6); and 
‘‘(iv) include performance goals that 
comply with the requirements established by 
the Secretary pursuant to subsection (g)(2). 
‘‘(B) ESTABLISHMENT.—In establishing an 
allocation plan under this paragraph, a State or 
State designated entity shall— 
‘‘(i) notify the public of the establish-
ment of the plan; 
‘‘(ii) provide an opportunity for public 
comments regarding the plan; 
‘‘(iii) consider any public comments 
received regarding the plan; and 
‘‘(iv) make the completed plan avail-
able to the public. 
‘‘(C) CONTENTS.—An allocation plan of a 
State or State designated entity under this para-
graph shall set forth the requirements for eligible 
recipients under paragraph (8) to apply for such 
grant amounts, including a requirement that 
each such application include—
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‘‘(i) a description of the eligible activi-
ties to be conducted using such assistance; 
and 
‘‘(ii) a certification by the eligible re-
cipient applying for such assistance that 
any housing units assisted with such assist-
ance will comply with the requirements 
under this section. 
‘‘(6) SELECTION OF ACTIVITIES FUNDED USING 
HOUSING
TRUST
FUND
GRANT
AMOUNTS.—Grant 
amounts received by a State or State designated enti-
ty under this subsection may be used, or committed 
for use, only for activities that— 
‘‘(A) are eligible under paragraph (7) for 
such use; 
‘‘(B) comply with the applicable allocation 
plan of the State or State designated entity 
under paragraph (5); and 
‘‘(C) are selected for funding by the State or 
State designated entity in accordance with the 
process and criteria for such selection established 
pursuant to subsection (g)(2)(D). 
‘‘(7) ELIGIBLE ACTIVITIES.—Grant amounts al-
located to a State or State designated entity under
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‘‘(I) extremely low- and very low- 
income families at the times described 
in subparagraphs (A) through (C) of 
section 215(b)(2) of the Cranston-Gon-
zalez National 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 Cranston-Gonzalez National Af-
fordable 
Housing 
Act 
(42 
U.S.C. 
12704), except that any reference in 
such section to assistance under title II 
of such Act shall for purposes of this 
subsection be considered to refer to as-
sistance from affordable housing fund 
grant amounts; 
‘‘(ii) has an initial purchase price that 
meets the requirements of section 215(b)(1) 
of the Cranston-Gonzalez National Afford-
able Housing Act; 
‘‘(iii) is subject to the same resale re-
strictions 
established 
under 
section 
215(b)(3) of the Cranston-Gonzalez National 
Affordable Housing Act and applicable to
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the participating jurisdiction that is the 
State in which such housing is located; and 
‘‘(iv) is made available for purchase 
only by, or in the case of assistance under 
this subsection, is made available only to 
homebuyers who have, before purchase com-
pleted a program of independent financial 
education and counseling from an eligible 
organization that meets the requirements of 
section 132 of the Federal Housing Finance 
Regulatory Reform Act of 2008. 
‘‘(8) TENANT PROTECTIONS AND PUBLIC PARTICI-
PATION.—All amounts from the Trust Fund shall be 
allocated in accordance with, and any eligible activi-
ties carried out in whole or in part with grant 
amounts under this subtitle (including housing pro-
vided with such grant amounts) shall comply with 
and be operated in compliance with— 
‘‘(A) laws relating to tenant protections and 
tenant rights to participate in decision making 
regarding their residences; 
‘‘(B) laws requiring public participation, 
including laws relating to Consolidated Plans, 
Qualified Allocation Plans, and Public Housing 
Agency Plans; and
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‘‘(C) fair housing laws and laws regarding 
accessibility in federally assisted housing, includ-
ing section 504 of the Rehabilitation Act of 1973. 
‘‘(9) ELIGIBLE RECIPIENTS.—Grant amounts al-
located to a State or State designated entity under 
this subsection may be provided only to a recipient 
that is an organization, agency, or other entity (in-
cluding a for-profit entity or a nonprofit entity) 
that— 
‘‘(A) has demonstrated experience and ca-
pacity to conduct an eligible activity under 
paragraph (7), as evidenced by its ability to— 
‘‘(i) own, construct or rehabilitate, 
manage, and operate an affordable multi-
family rental housing development; 
‘‘(ii) design, construct or rehabilitate, 
and market affordable housing for home-
ownership; or 
‘‘(iii) provide forms of assistance, such 
as down payments, closing costs, or interest 
rate buy-downs for purchasers; 
‘‘(B) demonstrates the ability and financial 
capacity to undertake, comply, and manage the 
eligible activity;
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‘‘(C) demonstrates its familiarity with the 
requirements of any other Federal, State, or local 
housing program that will be used in conjunc-
tion with such grant amounts to ensure compli-
ance with all applicable requirements and regu-
lations of such programs; and 
‘‘(D) makes such assurances to the State or 
State designated entity as the Secretary shall, by 
regulation, require to ensure that the recipient 
will comply with the requirements of this sub-
section during the entire period that begins upon 
selection of the recipient to receive such grant 
amounts and ending upon the conclusion of all 
activities under paragraph (8) that are engaged 
in by the recipient and funded with such grant 
amounts. 
‘‘(10) LIMITATIONS ON USE.— 
‘‘(A) REQUIRED AMOUNT FOR HOMEOWNER-
SHIP ACTIVITIES.—Of the aggregate amount allo-
cated to a State or State designated entity under 
this subsection not more than 10 percent shall be 
used for activities under subparagraph (B) of 
paragraph (7). 
‘‘(B) DEADLINE
FOR
COMMITMENT
OR 
USE.—Grant amounts allocated to a State or
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State designated entity under this subsection 
shall be used or committed for use within 2 years 
of the date that such grant amounts are made 
available to the State or State designated entity. 
The Secretary shall recapture any such amounts 
not so used or committed for use and reallocate 
such amounts under this subsection in the first 
year after such recapture. 
‘‘(C) USE
OF
RETURNS.—The Secretary 
shall, by regulation, provide that any return on 
a loan or other investment of any grant amount 
used by a State or State designated entity to 
provide a loan under this subsection shall be 
treated, for purposes of availability to and use 
by the State or State designated entity, as a 
grant amount authorized under this subsection. 
‘‘(D) PROHIBITED
USES.—The Secretary 
shall, by regulation— 
‘‘(i) set forth prohibited uses of grant 
amounts allocated under this subsection, 
which shall include use for— 
‘‘(I) political activities; 
‘‘(II) advocacy; 
‘‘(III) lobbying, whether directly 
or through other parties;