128
funds, should be extended and on any modifica-
tions for the program. 
‘‘(5) 
DETERMINATION
OF
AFTER-TAX
IN-
COME.—For purposes of this section, the term 
‘after-tax income’ means, with respect to an enter-
prise for a year, the amount reported by the enter-
prise for such year in the enterprise’s annual report 
for such year that is filed with the Securities and 
Exchange Commission, except that for any year in 
which no such filing is made by an enterprise or 
such filing is not timely made, such term means the 
amount determined by the Director based on the in-
come tax return filings of the enterprise. 
‘‘(c) SELECTION OF ACTIVITIES FUNDED USING AF-
FORDABLE HOUSING FUND AMOUNTS.—Amounts from 
the affordable housing fund of the enterprise may be used, 
or committed for use, only for activities that—
‘‘(1) are eligible under subsection (d) for such 
use; and 
‘‘(2) are selected for funding by the enterprise 
in accordance with the process and criteria for such 
selection 
established 
pursuant 
to 
subsection 
(k)(2)(C).
129
‘‘(d) ELIGIBLE ACTIVITIES.—Amounts from the af-
fordable housing fund of an enterprise 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 amounts provided from the Fund 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-
130
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 the affordable housing 
fund of the enterprise; 
‘‘(B) has an initial purchase price that 
meets the requirements of section 215(b)(1) of 
the Cranston-Gonzalez National Affordable 
Housing Act; and 
‘‘(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 
‘‘(3) public infrastructure development activities 
in connection with housing activities funded under 
paragraph (1) or (2). 
‘‘(e) ELIGIBLE RECIPIENTS.—
‘‘(1) IN GENERAL.—Amounts from the afford-
able housing fund of an enterprise may be provided 
only to a recipient that is an organization, agency, 
or other entity (including a for-profit entity, a non-
131
profit entity, a federally recognized tribe, an Alaskan 
Native village, and a faith-based organization) 
that—
‘‘(A) has a demonstrated capacity for car-
rying out activities of the type that are to be 
funded with such affordable housing fund 
amounts; and 
‘‘(B) makes such assurances to the enter-
prise as the Director shall, by regulation, re-
quire to ensure that the recipient will comply 
with the requirements of this section (including, 
in the case of any organization, agency, or enti-
ty subject to paragraph (2), all of the require-
ments specified under such paragraph) during 
the entire period that begins upon selection of 
the recipient to receive amounts from the af-
fordable housing fund of the enterprise and 
ending upon the conclusion of all activities 
under subsection (d) that are engaged in by the 
recipient and funded with such affordable hous-
ing fund amounts; and 
‘‘(C) in the case of any recipient who is not 
a for-profit entity or a government agency or 
authority, complies with all of the requirements 
under paragraph (2).
132
‘‘(2) ADDITIONAL REQUIREMENTS FOR RECIPI-
ENTS OTHER THAN FOR-PROFIT ENTITIES.—The re-
quirements under this paragraph with respect to any 
organization, agency, or entity that is not a for-prof-
it entity or a government agency or authority are 
that the organization, agency, or entity—
‘‘(A) shall have as its primary purpose the 
provision of affordable housing, as defined by 
the Director; 
‘‘(B) shall make such assurances to the en-
terprise as the Director shall, by regulation, re-
quire to ensure that such affordable housing 
fund amounts—
‘‘(i) are used only to supplement, and 
to the extent practical, to increase the level 
of funds that would, in the absence of 
amounts made available from the afford-
able housing fund, be made available from 
other sources for the recipient to carry out 
activities of the type that are eligible under 
subsection (d) for funding with affordable 
housing fund amounts; and 
‘‘(ii) are not in any case used so as to 
supplant any funds from other sources
133
that are made available for such activities 
of the recipient; and 
‘‘(C) does not, at the time during the pe-
riod that begins 12 months before submission 
of an application for funding from the afford-
able housing fund of the enterprise and ending 
upon the expiration of the period referred to in 
paragraph (1)(B)—
‘‘(i) engage in any Federal election ac-
tivity, as such term is defined in paragraph 
(20) of section 301 of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 431(20)), 
except that, notwithstanding the 120-day 
limitation in subparagraph (A)(i) of such 
paragraph, such term shall include voter 
registration activity during any period; 
‘‘(ii) make any expenditure for any 
electioneering communication (as such 
term is defined in section 304(f)(3) of the 
Federal Election Campaign Act of 1971 (2 
U.S.C. 434(f)(3)); 
‘‘(iii) make any lobbying expenditure, 
(as such term is defined in such section 
501(h)(2)), except that this clause shall 
not apply to any such expenditure by an
134
organization described in section 501(c)(3) 
of the Internal Revenue Code of 1986 that 
is exempt from taxation under subsection 
(a) of such section 501, to the extent that 
such expenditure does not exceed the 
amount under such Code for which such 
exemption may be denied; or 
‘‘(iv) maintain any affiliation with any 
organization, agency, or other entity that 
does not comply with clauses (i), (ii), and 
(iii) of this subparagraph. 
‘‘(3) AFFILIATION.—
‘‘(A) IN GENERAL.—A recipient organiza-
tion, agency, or entity shall be considered to be 
affiliated with another entity, for purposes of 
paragraph (2), if such recipient entity controls, 
is controlled by, or is under common control 
with such other entity. 
‘‘(B) CONTROL.—The existence of any of 
the following relationships between a recipient 
entity and another entity shall indicate that 
control exists for purposes of subparagraph (A): 
‘‘(i) OVERLAPPING
BOARD
MEMBER-
SHIP.—Individuals serve in a similar ca-
pacity as officers, executives, or staff of
135
both the recipient entity and the other en-
tity. 
‘‘(ii) SHARED
RESOURCES.—The re-
cipient entity and the other entity share of-
fice space, staff members, supplies, re-
sources, or marketing materials, including 
Internet and other forms of public commu-
nication. 
‘‘(iii) FUNDING.—The recipient entity 
receives more than 20 percent of its total 
funding from such other entity or provides 
more than 20 percent of the total funding 
of such other entity. 
‘‘(iv) OTHER.—The recipient entity or 
such other entity exhibits any other indicia 
of substantial overlap or common control 
as may be set forth in regulation by the 
Director. 
‘‘(4) FOR PROFIT.—For purposes of this sub-
section, the term ‘for-profit entity’ means any entity 
any part of the net earnings of which inure to the 
benefit of any private shareholder, member, founder, 
contributor, or individual. 
‘‘(f) LIMITATIONS ON USE.—
136
‘‘(1) REQUIRED
AMOUNT
FOR
REFCORP.—Of 
any amounts allocated pursuant to subsection (b) in 
each year to the affordable housing fund of an enter-
prise, 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 any amounts allocated pursuant to 
subsection (b) in each year to the affordable housing 
fund of an enterprise, not less than 10 percent shall 
be used for activities under paragraph (2) of sub-
section (d). 
‘‘(3) MAXIMUM
AMOUNT
FOR
PUBLIC
INFRA-
STRUCTURE DEVELOPMENT ACTIVITIES IN CONNEC-
TION WITH AFFORDABLE HOUSING ACTIVITIES.—Of 
any amounts allocated pursuant to subsection (b) in 
each year to the affordable housing fund of an enter-
prise, not more than 12.5 percent may be used for 
activities under paragraph (3) of subsection (d). 
‘‘(4) DEADLINE FOR COMMITMENT OR USE.—
Any amounts allocated to the affordable housing 
fund of an enterprise shall be used or committed for 
use within two years of the date of such allocation. 
‘‘(5) USE OF RETURNS.—The Director shall, by 
regulation—
137
‘‘(A) provide that any return on a loan or 
other investment of any amounts allocated pur-
suant to subsection (b) to the affordable hous-
ing fund of an enterprise shall count against 
the allocation required under subsection (b) to 
be made by the enterprise for the year following 
such return; and 
‘‘(B) establish such limitations as may be 
necessary to ensure that the amount or likeli-
hood of return is not the primary consideration 
of awarding of allocated amounts to recipients. 
‘‘(6) PROHIBITED USES.—The Director shall—
‘‘(A) by regulation, set forth prohibited 
uses of amounts from the affordable housing 
funds of the enterprises, 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;
138
‘‘(B) by regulation, provide that, except as 
provided in subparagraph (C), amounts allo-
cated to the affordable housing fund of an en-
terprise may not be used for administrative, 
outreach, or other costs of—
‘‘(i) the enterprise; or 
‘‘(ii) any recipient of amounts from 
the affordable housing fund; and 
‘‘(C) by regulation, limit the amount of 
any such contributions that may be used for ad-
ministrative costs of the enterprise of maintain-
ing the affordable housing fund and carrying 
out the program under this section. 
‘‘(7) PROHIBITION OF CONSIDERATION OF USE 
FOR
MEETING
HOUSING
GOALS.—In determining 
compliance with the housing goals under this sub-
part, the Director may not consider amounts used 
under this section for eligible activities under sub-
section (d). The Director shall give credit toward the 
achievement of such housing goals to purchases of 
mortgages for housing that receives funding under 
this section, but only to the extent that such pur-
chases are funded other than under this section. 
‘‘(8) PROHIBITION
ON
CERTAIN
REDISTRIBU-
TION OF AMOUNTS.—The Director shall, by regula-
139
tion, ensure that amounts from the affordable hous-
ing fund of an enterprise awarded under this section 
to a national nonprofit housing intermediary are not 
redistributed to other nonprofit entities. 
‘‘(g) ACCOUNTABILITY OF RECIPIENTS AND ENTER-
PRISES.—
‘‘(1) RECIPIENTS.—
‘‘(A) TRACKING OF FUNDS.—The Director 
shall—
‘‘(i) require each enterprise to develop 
and maintain a system to ensure that each 
recipient of amounts from the affordable 
housing fund of the enterprise uses such 
amounts in accordance with this section, 
the regulations issued under this section, 
and any requirements or conditions under 
which such amounts were provided; and 
‘‘(ii) establish minimum requirements 
for agreements, between the enterprises 
and recipients, regarding grants from the 
affordable housing funds of the enter-
prises, which shall include—
‘‘(I) appropriate continuing fi-
nancial and project reporting, record 
retention, and audit requirements for
140
the duration of the grant to ensure 
compliance with the limitations and 
requirements of this section and the 
regulation 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.—If an enterprise 
determines that any recipient of amounts from 
the affordable housing fund of the enterprise 
has used any such amounts in a manner that 
is materially in violation of this section, the reg-
ulations issued under this section, or any re-
quirements or conditions under which such 
amounts were provided—
‘‘(i) the enterprise shall notify the Di-
rector of such misuse of amounts and the 
actions taken under this subparagraph 
with respect to the recipient; 
‘‘(ii) such recipient shall be ineligible 
in perpetuity to receive of any further 
amounts from the affordable housing fund 
of such enterprise; and
141
‘‘(iii) the enterprise shall require the 
recipient to reimburse the enterprise for 
such misused amounts and return to the 
enterprise any amounts from the afford-
able housing fund of the enterprise that re-
main unused or uncommitted for use. 
The remedies under this subparagraph are in 
addition to any other remedies that may be 
available under law. 
‘‘(2) ENTERPRISES.—
‘‘(A) QUARTERLY REPORTS.—The Director 
shall require each enterprise to submit a report, 
on a quarterly basis, to the Director and the af-
fordable housing board established under sub-
section (j) describing the activities funded 
under this section during such quarter with 
amounts from the affordable housing fund of 
the enterprise established under this section. 
The Director shall make such reports publicly 
available. The affordable housing board shall 
review each report by an enterprise to deter-
mine the consistency of such activities funded 
with the criteria for selection of such activities 
established pursuant to subsection (k)(2)(C).
142
‘‘(B) REPLENISHMENT.—If the Director 
determines that an activity funded by an enter-
prise with amounts from the affordable housing 
fund of the enterprise is not consistent with the 
criteria established pursuant to subsection 
(k)(2)(C), the Director shall require the enter-
prise to allocate to such affordable housing 
fund (in addition to amounts allocated in com-
pliance with subsection (b)) an amount equal to 
the sum of the amounts from the affordable 
housing fund used and further committed for 
use for such activity. 
‘‘(h) CAPITAL REQUIREMENTS.—The utilization or 
commitment of amounts from the affordable housing fund 
of an enterprise shall not be subject to the risk-based cap-
ital requirements established pursuant to section 1361(a). 
‘‘(i) REPORTING REQUIREMENT.—Each enterprise 
shall include, in the report required under section 309(m) 
of the Federal National Mortgage Association Charter Act 
or section 307(f) of the Federal Home Loan Mortgage 
Corporation Act, as applicable, a description of the actions 
taken by the enterprise to utilize or commit amounts allo-
cated under this section to the affordable housing fund 
of the enterprise established under this section. 
‘‘(j) AFFORDABLE HOUSING BOARD.—
143
‘‘(1) APPOINTMENT.—The Director shall ap-
point an affordable housing board of 7, 9, or 11 per-
sons, who shall include—
‘‘(A) the Director, or the Director’s des-
ignee; 
‘‘(B) the Secretary of Housing and Urban 
Development, or the Secretary’s designee; 
‘‘(C) the Secretary of Agriculture, or the 
Secretary’s designee; 
‘‘(D) 2 persons from for-profit organiza-
tions or businesses actively involved in pro-
viding or promoting affordable housing for ex-
tremely low- and very low-income households; 
and 
‘‘(E) 2 persons from nonprofit organiza-
tions actively involved in providing or promoting 
affordable housing for extremely low- and very 
low-income households. 
‘‘(2) TERMS.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term of each member of 
the affordable housing board appointed pursu-
ant to paragraph (1) (but not including mem-
bers appointed pursuant to subparagraphs (A), 
(B), and (C)) shall be 3 years.
144
‘‘(B) INITIAL APPOINTEES.—The Director 
shall appoint the initial members of the afford-
able housing board not later than the expiration 
of the 60-day period beginning on the effective 
date under section 185 of the Federal Housing 
Finance Reform Act of 2005. As designated by 
the Director at the time of appointment, of the 
members of the affordable housing board first 
appointed pursuant to paragraph (1) (but not 
including members appointed pursuant to sub-
paragraphs (A), (B), and (C))—
‘‘(i) in the case of a board having 7 
members—
‘‘(I) one shall be appointed for a 
term of one year; and 
‘‘(II) one shall be appointed for a 
term of two years; 
‘‘(ii) in the case of a board having 9 
members—
‘‘(I) two shall be appointed for a 
term of one year; and 
‘‘(II) two shall be appointed for a 
term of two years; and 
‘‘(iii) in the case of a board having 11 
members—