‘‘(6) REVIEW OF TARGETING REQUIREMENTS.— 
The Secretary shall assess the need for, and the ap-
propriateness of, the requirements under paragraphs 
(1) through (4) and shall submit a report to the Con-
gress on the results of the assessment not later than 
October 1, 2012, and not later than the expiration of 
the 5-year period beginning upon such date and each 
successive 5-year period thereafter. In each such re-
port, the Secretary shall identify and make rec-
ommendations regarding the continuation or adjust-
ment of the targeting requirements in paragraphs (1) 
through (4). 
‘‘(d) USE FOR RURAL AREAS.—Of the Trust Fund 
grant amounts for any fiscal year for any grantee that is 
a State or participating local jurisdiction that includes any 
rural areas, the State or participating local jurisdiction 
shall use a portion for eligible activities located in rural 
areas that is proportionate to the identified need for such 
activities in such rural areas. 
‘‘(e) COST LIMITS.—The Secretary shall establish limi-
tations on the amount of Trust Fund grant amounts that 
may be used, on a per unit basis, for eligible activities. Such 
limitations shall be the same as the per unit cost limits 
established pursuant to section 212(e) (42 U.S.C. 12742(e)), 
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as adjusted annually, and established by number of bed-
rooms, market area, and eligible activity. 
‘‘(f) FORMS OF ASSISTANCE.— 
‘‘(1) IN GENERAL.—Assistance may be distrib-
uted pursuant to this section in the form of— 
‘‘(A) capital grants, noninterest-bearing or 
low-interest loans or advances, deferred payment 
loans, guarantees, and loan loss reserves; 
‘‘(B) in the case of assistance for ownership 
of one- to four-family owner-occupied housing, 
downpayment assistance, closing cost assistance, 
and assistance for interest rate buy-downs; and 
‘‘(C) any other forms of assistance approved 
by the Secretary. 
‘‘(2) REPAYMENTS.—If a grantee awards assist-
ance under this section in the form of a loan or other 
mechanism by which funds are later repaid to the 
grantee, any repayments and returns received by the 
grantee shall be distributed by the grantee in accord-
ance with the allocation plan under section 295 for 
the grantee for the fiscal year in which such repay-
ments are made or returns are received. 
‘‘(g) COORDINATION WITH OTHER ASSISTANCE.—In 
distributing assistance pursuant to this section, each grant-
ee shall, to the maximum extent practicable, coordinate such 
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distribution with the provision of other Federal, State, trib-
al, and local housing assistance, including— 
‘‘(1) in the case of any State, housing credit dol-
lar amounts allocated by the State under section 
42(h) of the Internal Revenue Code of 1986; 
‘‘(2) assistance made available under subtitles A 
through F (42 U.S.C. 12721 et seq.) or the community 
development block grant program under title I of the 
Housing and Community Development Act of 1974 
(42 U.S.C. 5301 et seq.); 
‘‘(3) private activity bonds; 
‘‘(4) assistance made available under section 9 of 
the United States Housing Act of 1937 (42 U.S.C. 
1437g); 
‘‘(5) assistance made available under section 8(o) 
of the United States Housing Act of 1937 (42 U.S.C. 
1437f(o)); 
‘‘(6) assistance made available under title V of 
the Housing Act of 1949 (42 U.S.C. 1471 et seq.); 
‘‘(7) assistance made available under section 101 
of the Native American Housing Assistance and Self- 
Determination Act of 1996 (25 U.S.C. 4111); 
‘‘(8) assistance made available from any State or 
local housing trust fund established to provide or as-
sist in making available affordable housing; and 
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‘‘(9) any other housing assistance programs. 
‘‘(h) PROHIBITED USES.—The Secretary shall— 
‘‘(1) by regulation, set forth prohibited uses of 
grant amounts under this subtitle, which shall include 
use for— 
‘‘(A) political activities; 
‘‘(B) advocacy; 
‘‘(C) lobbying, whether directly or through 
other parties; 
‘‘(D) counseling services; 
‘‘(E) travel expenses; and 
‘‘(F) preparing or providing advice on tax 
returns; 
‘‘(2) by regulation, provide that, except as pro-
vided in paragraph (3), grant amounts under this 
subtitle may not be used for administrative, outreach, 
or other costs of— 
‘‘(A) a grantee; or 
‘‘(B) any recipient of such grant amounts; 
and 
‘‘(3) by regulation, limit the amount of any 
Trust Fund grant amounts for a fiscal year that may 
be used for administrative costs of the grantee of car-
rying out the program required under this subtitle to 
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a percentage of such grant amounts of the grantee for 
such fiscal year, which may not exceed 10 percent. 
‘‘(i) LABOR STANDARDS.—Each grantee receiving 
Trust Fund grant amounts shall ensure that contracts for 
eligible activities assisted with such amounts comply with 
the same requirements under section 286 (42 U.S.C. 12836) 
that are applicable to contracts for construction of afford-
able housing assisted under subtitles A and D. 
‘‘(j) COMPLIANCE WITH OTHER FEDERAL LAWS.—All 
amounts from the Trust Fund shall be allocated in accord-
ance with, and any eligible activities carried out in whole 
or in part with grant amounts under this subtitle (includ-
ing housing provided with such grant amounts) shall com-
ply with and be operated in compliance with, other applica-
ble provisions of Federal law, including— 
‘‘(1) laws relating to tenant protections and ten-
ant rights to participate in decision making regard-
ing their residences; 
‘‘(2) laws requiring public participation, includ-
ing laws relating to Consolidated Plans, Qualified Al-
location Plans, and Public Housing Agency Plans; 
and 
‘‘(3) fair housing laws and laws regarding acces-
sibility in federally assisted housing, including sec-
tion 504 of the Rehabilitation Act of 1973. 
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‘‘SEC. 297. AFFORDABLE HOUSING. 
‘‘(a) RENTAL HOUSING.—A rental dwelling unit 
(which may include a dwelling unit in limited equity coop-
erative housing, as such term is defined in section 143(k) 
of the Internal Revenue Code of 1986 (26 U.S.C. 143(k)) 
or in housing of a cooperative housing corporation, as such 
term is defined in section 216(b) of the Internal Revenue 
Code of 1986 (26 U.S.A. 216(b))), shall be considered afford-
able housing for purposes of this subtitle only if the dwelling 
unit is subject to legally binding commitments that ensure 
that the dwelling unit meets all of the following require-
ments: 
‘‘(1) RENTS.—The dwelling unit bears a rent not 
greater than the lesser of— 
‘‘(A) the existing fair market rental estab-
lished by the Secretary under section 8(c) of the 
United States Housing Act of 1937 (42 U.S.C. 
1437f(c)) for a dwelling unit of the same size in 
the same market area, or the applicable payment 
standard for assistance under section 8(o) of 
such Act, if higher; and 
‘‘(B) a rent that does not exceed 30 percent 
of the adjusted income of a family whose income 
equals 65 percent of the median income for the 
area, as determined by the Secretary, with ad-
justment for number of bedrooms in the unit, ex-
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cept that the Secretary may establish income 
ceilings higher or lower than 65 percent of the 
median for the area on the basis of the findings 
of the Secretary that such variations are nec-
essary because of prevailing levels of construction 
costs or fair market rents, or unusually high or 
low family incomes. 
‘‘(2) TENANT
RENT
CONTRIBUTION.—The con-
tribution toward rent by the family residing in the 
dwelling unit will not exceed 30 percent of the ad-
justed income of such family. 
‘‘(3) NON-DISCRIMINATION
AGAINST
VOUCHER 
HOLDERS.—The dwelling unit is located in a project 
in which all dwelling units are subject to enforceable 
restrictions that provide that a unit may not be re-
fused for leasing to a holder of a voucher of eligibility 
under section 8 of the United States Housing Act of 
1937 (42 U.S.C. 1437f) because of the status of the 
prospective tenant as a holder of such voucher. 
‘‘(4) MIXED INCOME.— 
‘‘(A) IN GENERAL.—The dwelling unit is lo-
cated in a project in which not more than 50 
percent of the rental units in the project that re-
ceive assistance under this subtitle and are not 
previously occupied may be rented initially to 
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families with incomes described in section 
296(c)(2), as determined at a reasonable time be-
fore occupancy. 
‘‘(B) REHABILITATION.—In the case of a 
dwelling unit in a project for which Trust Fund 
grant amounts are used for the rehabilitation of 
the project, the dwelling unit is located in a 
project in which the percentage of units being 
rented upon completion of the rehabilitation to 
families with incomes described in section 
296(c)(2) may not exceed the higher of 50 per-
cent or the percentage of such families occupying 
the project at the time funds are awarded for 
such project. 
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply in the case of a project having 
25 or fewer dwelling units that is— 
‘‘(i) located in a census tract in which 
the number of families having incomes less 
than the poverty line is less than 20 per-
cent; 
‘‘(ii) located in a rural area, as such 
term is defined in section 520 of the Hous-
ing Act of 1949 (42 U.S.C. 1490); or 
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‘‘(iii) specifically made available only 
for households comprised of elderly families 
or disabled families. 
‘‘(5) VISITABILITY.—To the extent the dwelling 
unit is not required under Federal law to comply 
with standards relating to accessibility to persons 
with disabilities, the dwelling unit complies with such 
basic visitability standards as the Secretary shall by 
regulation provide. 
‘‘(6) DURATION OF USE.—The dwelling unit will 
continue to be subject to all requirements under this 
subsection for not less than 50 years. 
‘‘(b) OWNER-OCCUPIED HOUSING.—For purposes of 
any eligible activity involving one- to four-family owner- 
occupied housing (which may include housing of a coopera-
tive housing corporation, as such term is defined in section 
216(b) of the Internal Revenue Code of 1986 (26 U.S.A. 
216(b))), such a residence shall be considered affordable 
housing for purposes of this subtitle only if— 
‘‘(1) in the case of housing to be made available 
for purchase— 
‘‘(A) the housing is available for purchase 
only for use as a principal residence by families 
that qualify as first-time homebuyers, as such 
term is defined in section 104 (42 U.S.C. 12704), 
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except that any reference in such section to as-
sistance under title II of this Act shall for pur-
poses of this section be considered to refer to as-
sistance from Trust Fund grant amounts; 
‘‘(B) the housing has an initial purchase 
price that meets the requirements of section 
215(b)(1); and 
‘‘(C) the housing is subject to the same re-
sale 
restrictions 
established 
under 
section 
215(b)(3) and applicable to the participating ju-
risdiction that is the State in which such hous-
ing is located; and 
‘‘(2) the housing is made available for purchase 
only by, or in the case of assistance to a homebuyer 
pursuant to this subsection, the assistance is made 
available only to, homebuyers who have, before pur-
chase, completed a program of counseling with respect 
to the responsibilities and financial management in-
volved in homeownership that is approved by the Sec-
retary; except that the Secretary may, at the request 
of a State, waive the requirements of this paragraph 
with respect to a geographic area or areas within the 
State if— 
‘‘(A) the travel time or distance involved in 
providing counseling with respect to such area or 
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areas, as otherwise required under this para-
graph, on an in-person basis is excessive or the 
cost of such travel is prohibitive; and 
‘‘(B) the State provides alternative forms of 
counseling for such area or areas, which may in-
clude interactive telephone counseling, on-line 
counseling, interactive video counseling, and 
interactive home study counseling and a pro-
gram of financial literacy and education to pro-
mote an understanding of consumer, economic, 
and personal finance issues and concepts, includ-
ing saving for retirement, managing credit, long- 
term care, and estate planning and education on 
predatory lending, identity theft, and financial 
abuse schemes relating to homeownership that is 
approved by the Secretary, except that entities 
providing such counseling shall not discriminate 
against any particular form of housing. 
‘‘(c) PRIORITY FOR FAMILIES ON SECTION 8 OR PUB-
LIC
HOUSING
WAITING
LIST
FOR
12 MONTHS
OR 
LONGER.—A dwelling unit in rental housing or owner-oc-
cupied housing shall be considered affordable housing for 
purposes of this subtitle only if the dwelling unit is subject 
to such requirements, as the Secretary shall provide, to en-
sure that priority for occupancy in or, in the case of owner- 
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