134 
that the Director determines the amounts described in 
paragraph (1) to be available for affordable housing 
fund grants to grantees in such year, the Director 
shall cause to be published in the Federal Register a 
notice that such amounts shall be so available. 
‘‘(3) GRANT AMOUNT.— 
‘‘(A) IN GENERAL.—For each year referred 
to in subsection (b)(1), the Director shall make 
a grant from amounts in the affordable housing 
fund to each grantee in an amount that is, ex-
cept as provided in subparagraph (B), equal to 
the formula amount under this section for the 
grantee. A grantee may designate a State hous-
ing finance agency, housing and community de-
velopment entity, tribally designated housing en-
tity (as such term is defined in section 4 of the 
Native American Housing Assistance and Self- 
Determination Act of 1997 (25 U.S.C. 4103)) or 
other qualified instrumentality of the grantee to 
receive such grant amounts. 
‘‘(B) REDUCTION FOR FAILURE TO OBTAIN 
RETURN OF MISUSED FUNDS.—If in any year a 
grantee fails to obtain reimbursement or return 
of the full amount required under subsection 
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(j)(1)(B) to be reimbursed or returned to the 
grantee during such year— 
‘‘(i) except as provided in clause (ii)— 
‘‘(I) the amount of the grant for 
the grantee for the succeeding year, as 
determined pursuant to subparagraph 
(A), shall be reduced by the amount by 
which such amounts required to be re-
imbursed 
or 
returned 
exceed 
the 
amount actually reimbursed or re-
turned; and 
‘‘(II) the amount of the grant for 
the succeeding year for each other 
grantee whose grant is not reduced 
pursuant to subclause (I) shall be in-
creased by the amount determined by 
applying the formula established pur-
suant to subsection (c)(2) to the total 
amount of all reductions for all grant-
ees for such year pursuant to subclause 
(I); or 
‘‘(ii) in any case in which such failure 
to obtain reimbursement or return occurs 
during a year immediately preceding a 
year in which grants under this subsection 
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will not be made, the grantee shall pay to 
the Director for reallocation among the 
other grantees an amount equal to the 
amount of the reduction for the grantee that 
would otherwise apply under clause (i)(I). 
‘‘(e) GRANTEE ALLOCATION PLANS.— 
‘‘(1) IN GENERAL.—For each year that a grantee 
receives affordable housing fund grant amounts, the 
grantee shall establish an allocation plan in accord-
ance with this subsection, which shall be a plan for 
the distribution of such grant amounts of the grantee 
for such year that— 
‘‘(A) is based on priority housing needs, as 
determined by the grantee in accordance with the 
regulations 
established 
under 
subsection 
(m)(2)(C); 
‘‘(B) complies with subsection (f); and 
‘‘(C) includes performance goals, bench-
marks, and timetables for the grantee for the pro-
duction, preservation, and rehabilitation of af-
fordable rental and homeownership housing with 
such grant amounts that comply with the re-
quirements established by the Director pursuant 
to subsection (m)(2)(F). 
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‘‘(2) ESTABLISHMENT.—In establishing an allo-
cation plan, a grantee shall notify the public of the 
establishment of the plan, provide an opportunity for 
public comments regarding the plan, consider any 
public comments received, and make the completed 
plan available to the public. 
‘‘(3) CONTENTS.—An allocation plan of a grant-
ee shall set forth the requirements for eligible recipi-
ents under subsection (h) to apply to the grantee to 
receive assistance from affordable housing fund grant 
amounts, including a requirement that each such ap-
plication include— 
‘‘(A) a description of the eligible activities 
to be conducted using such assistance; and 
‘‘(B) a certification by the eligible recipient 
applying for such assistance that any housing 
units assisted with such assistance will comply 
with the requirements under this section. 
‘‘(f) SELECTION OF ACTIVITIES FUNDED USING AF-
FORDABLE HOUSING FUND GRANT AMOUNTS.—Affordable 
housing fund grant amounts of a grantee may be used, or 
committed for use, only for activities that— 
‘‘(1) are eligible under subsection (g) for such 
use; 
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‘‘(2) comply with the applicable allocation plan 
under subsection (e) of the grantee; and 
‘‘(3) are selected for funding by the grantee in 
accordance with the process and criteria for such se-
lection established pursuant to subsection (m)(2)(C). 
‘‘(g) ELIGIBLE ACTIVITIES.—Affordable housing fund 
grant amounts of a grantee shall be eligible for use, or for 
commitment for use, only for assistance for— 
‘‘(1) the production, preservation, and rehabili-
tation of rental housing, including housing under the 
programs identified in section 1335(a)(2)(B), except 
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 assist-
ance, 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 sub-
paragraphs (A) through (C) of section 
215(b)(2) of the Cranston-Gonzalez National 
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139 
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 ref-
erence in such section to assistance under 
title II of such Act shall for purposes of this 
section be considered to refer to assistance 
from 
affordable 
housing 
fund 
grant 
amounts; 
‘‘(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 Housing 
Act and applicable to the participating jurisdic-
tion that is the State in which such housing 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, completed a program 
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of counseling with respect to the responsibilities 
and financial management involved in home-
ownership that is approved by the Director; and 
‘‘(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 re-
cipient that is an organization, agency, or other entity (in-
cluding 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 evidenced 
by its ability to— 
‘‘(A) own, construct or rehabilitate, manage, 
and operate an affordable multifamily rental 
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 infrastructure 
development activities in connection with such 
housing activities; 
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‘‘(2) demonstrates the ability and financial ca-
pacity to undertake, comply, and manage the eligible 
activity; 
‘‘(3) demonstrates its familiarly with the re-
quirements of any other Federal, State or local hous-
ing program that will be used in conjunction with 
such grant amounts to ensure compliance with all ap-
plicable requirements and regulations of such pro-
grams; 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 activi-
ties 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 subsection (b) 
in each year to the affordable housing fund, 25 per-
cent 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)). 
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