(2) appropriate to consider the need for sup-
portive housing for very low-income veteran families 
in nonmetropolitan areas and by Indian tribes. 
(h) PROVISION OF SUPPORTIVE SERVICES TO VET-
ERAN FAMILIES.— 
(1) IN GENERAL.—The Secretary shall coordi-
nate with the Secretary of Veterans Affairs to en-
sure that any housing assistance provided to vet-
erans or veteran families includes a range of services 
tailored to the needs of the very low-income veteran 
families occupying such housing, which may include 
services for— 
(A) outreach; 
(B) health (including counseling, mental 
health, substance abuse, post-traumatic stress 
disorder, and traumatic brain injury) diagnosis 
and treatment; 
(C) habilitation and rehabilitation; 
(D) case management; 
(E) daily living; 
(F) personal financial planning; 
(G) transportation; 
(H) vocation; 
(I) employment and training; 
(J) education; 
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(K) assistance in obtaining veterans bene-
fits and public benefits; 
(L) assistance in obtaining income support; 
(M) assistance in obtaining health insur-
ance; 
(N) fiduciary and representative payee; 
(O) legal aid; 
(P) child care; 
(Q) housing counseling; 
(R) service coordination; and 
(S) other services necessary for maintain-
ing independent living. 
(2) LOCAL COORDINATION OF SERVICES.— 
(A) IN GENERAL.—The Secretary shall en-
sure that owners of housing assisted under this 
section have the managerial capacity to— 
(i) assess on an ongoing basis the 
service needs of residents; 
(ii) coordinate the provision of sup-
portive services and tailor such services to 
the individual needs of residents; and 
(iii) seek on a continuous basis new 
sources of assistance to ensure the long- 
term provision of supportive services. 
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(B) CLASSIFICATION OF COSTS.—Any cost 
associated with this subsection shall be an eligi-
ble cost under subsection (c)(3). 
(i) DEVELOPMENT COST LIMITATIONS.— 
(1) IN GENERAL.—The Secretary shall periodi-
cally establish development cost limitations by mar-
ket area for various types and sizes of supportive 
housing for very low-income veteran families by pub-
lishing a notice of the cost limitations in the Federal 
Register. 
(2) CONSIDERATIONS.—The cost limitations es-
tablished under paragraph (1) shall reflect— 
(A) the cost of construction, reconstruc-
tion, or moderate or substantial rehabilitation 
of supportive housing for very low-income vet-
eran families that meets applicable State and 
local housing and building codes; 
(B) the cost of movables necessary to the 
basic operation of the housing, as determined 
by the Secretary; 
(C) the cost of special design features nec-
essary to make the housing accessible to very 
low-income veteran families; 
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(D) the cost of congregate space necessary 
to accommodate the provision of supportive 
services to veteran families; 
(E) if the housing is newly constructed, the 
cost of meeting the energy efficiency standards 
promulgated by the Secretary in accordance 
with section 109 of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 
12709); and 
(F) the cost of land, including necessary 
site improvement. 
(3) USE OF DATA.—In establishing development 
cost limitations for a given market area under this 
subsection, the Secretary shall use data that reflect 
currently prevailing costs of construction, recon-
struction, or moderate or substantial rehabilitation, 
and land acquisition in the area. 
(4) CONGREGATE
SPACE.—For purposes of 
paragraph (1), a congregate space shall include 
space for cafeterias or dining halls, community 
rooms or buildings, workshops, child care, adult day 
health facilities or other outpatient health facilities, 
or other essential service facilities. 
(5) COMMERCIAL
FACILITIES.—Neither this 
section nor any other provision of law may be con-
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strued as prohibiting or preventing the location and 
operation, in a project assisted under this section, of 
commercial facilities for the benefit of residents of 
the project and the community in which the project 
is located, except that assistance made available 
under this section may not be used to subsidize any 
such commercial facility. 
(6) ACQUISITION.—In the case of existing hous-
ing and related facilities to be acquired, the cost lim-
itations shall include— 
(A) the cost of acquiring such housing; 
(B) the cost of rehabilitation, alteration, 
conversion, or improvement, including the mod-
erate or substantial rehabilitation thereof; and 
(C) the cost of the land on which the hous-
ing and related facilities are located. 
(7) ANNUAL
ADJUSTMENTS.—The Secretary 
shall adjust the cost limitation not less than annu-
ally to reflect changes in the general level of con-
struction, reconstruction, and moderate and substan-
tial rehabilitation costs. 
(8) INCENTIVES FOR SAVINGS.— 
(A) SPECIAL HOUSING ACCOUNT.— 
(i) IN GENERAL.—The Secretary shall 
use the development cost limitations estab-
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lished under paragraph (1) or (6) to cal-
culate the amount of financing to be made 
available to individual owners. 
(ii) ACTUAL DEVELOPMENTAL COSTS 
LESS
THAN
FINANCING.—Owners which 
incur actual development costs that are 
less than the amount of financing shall be 
entitled to retain 50 percent of the savings 
in a special housing account. 
(iii) 
BONUS
FOR
ENERGY
EFFI-
CIENCY.—The 
percentage 
established 
under clause (ii) shall be increased to 75 
percent for owners which add energy effi-
ciency features which— 
(I) exceed the energy efficiency 
standards promulgated by the Sec-
retary in accordance with section 109 
of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 
12709); 
(II) substantially reduce the life- 
cycle cost of the housing; and 
(III) reduce gross rent require-
ments. 
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(B) USES.—The special housing account 
established under subparagraph (A) may be 
used— 
(i) to provide services to residents of 
the housing or funds set aside for replace-
ment reserves; or 
(ii) for such other purposes as deter-
mined by the Secretary. 
(9) DESIGN FLEXIBILITY.—The Secretary shall, 
to the extent practicable, give owners the flexibility 
to design housing appropriate to their location and 
proposed resident population within broadly defined 
parameters. 
(10) USE OF FUNDS FROM OTHER SOURCES.— 
An owner shall be permitted voluntarily to provide 
funds from sources other than this section for amen-
ities and other features of appropriate design and 
construction suitable for supportive housing under 
this section if the cost of such amenities is— 
(A) not financed with the advance; and 
(B) is not taken into account in deter-
mining the amount of Federal assistance or of 
the rent contribution of tenants. 
(j) TENANT SELECTION.— 
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(1) IN GENERAL.—An owner shall adopt writ-
ten tenant selection procedures that are— 
(A) satisfactory to the Secretary and which 
are— 
(i) consistent with the purpose of im-
proving housing opportunities for very low- 
income veteran families; and 
(ii) reasonably related to program eli-
gibility and an applicant’s ability to per-
form the obligations of the lease; and 
(B) compliant with subtitle C of title VI of 
the Housing and Community Development Act 
of 1992 (42 U.S.C. 13601 et seq.) and any reg-
ulations issued under such subtitle. 
(2) NOTIFICATION
OF
REJECTION.—Owners 
shall promptly notify in writing any rejected appli-
cant of the grounds for any rejection. 
(3) INFORMATION REGARDING HOUSING.— 
(A) IN
GENERAL.—The Secretary shall 
provide, to the Secretary of Veterans Affairs 
and the Secretary of Labor, information regard-
ing the availability of the housing assisted 
under this section. 
(B) SHARING OF INFORMATION WITH AD-
DITIONAL
AGENCIES.—Within 30 days of re-
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ceipt of the information, the Secretary of Vet-
erans Affairs and Secretary of Labor shall pro-
vide such information to agencies in the area of 
the housing that receive assistance from the 
Department of Veterans Affairs and the De-
partment of Labor for providing medical care, 
housing, supportive services or employment and 
training services to homeless veterans. 
(k) MISCELLANEOUS PROVISIONS.— 
(1) TECHNICAL
ASSISTANCE.—The Secretary 
shall make available appropriate technical assistance 
to ensure that prospective applicants are able to par-
ticipate more fully in the program carried out under 
this section. 
(2) CIVIL RIGHTS COMPLIANCE.—Each owner 
shall certify, to the satisfaction of the Secretary, 
that assistance made available under this section will 
be conducted and administered in conformity with 
title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000a et seq.), the Fair Housing Act (42 U.S.C. 
3601 et seq.), and other Federal, State, and local 
laws prohibiting discrimination and promoting equal 
opportunity. 
(3) OWNER DEPOSIT.— 
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(A) IN GENERAL.—The Secretary shall re-
quire an owner of housing, assisted under this 
section, to deposit an amount not to exceed 
$15,000 in a special escrow account to ensure 
the owner’s commitment to the housing. 
(B) REDUCTION OF REQUIREMENT.— 
(i) IN GENERAL.—The Secretary may 
reduce or waive the owner deposit specified 
under subparagraph (A) for individual ap-
plicants if the Secretary finds that such 
waiver or reduction is necessary to achieve 
the purposes of this section and the appli-
cant demonstrates to the satisfaction of 
the Secretary that it has the capacity to 
manage and maintain the housing in ac-
cordance with this section. 
(ii) 
NONPROFITS.—The 
Secretary 
may reduce or waive the requirement of 
the owner deposit under subparagraph (A) 
in the case of a nonprofit applicant that is 
not affiliated with a national sponsor, as 
determined by the Secretary. 
(4) NOTICE OF APPEAL.— 
(A) IN GENERAL.—The Secretary shall no-
tify an owner not less than 30 days prior to 
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canceling any reservation of assistance provided 
under this section. 
(B) APPEAL.— 
(i) FILING
DEADLINE.—During the 
30-day period following the receipt of any 
notice required under subparagraph (A), 
an owner may appeal the proposed can-
cellation. 
(ii) TIMING OF DECISION.—Any ap-
peal undertaken under clause (i), including 
review by the Secretary, shall be completed 
not later than 45 days after the appeal is 
filed. 
(5) LABOR.— 
(A) IN
GENERAL.—The Secretary shall 
take such action as may be necessary to ensure 
that all laborers and mechanics employed by 
contractors and subcontractors in the construc-
tion of housing with 12 or more units assisted 
under this section shall be paid wages at rates 
not less than the rates prevailing in the locality 
involved for the corresponding classes of labor-
ers and mechanics employed on construction of 
a similar character, as determined by the Sec-
retary of Labor in accordance with subchapter 
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IV of chapter 31 of title 40, United States 
Code. 
(B) EXEMPTION.—Subparagraph (A) shall 
not apply to any individual who— 
(i) performs services for which the in-
dividual volunteered; 
(ii) does not receive compensation for 
such services or is paid expenses, reason-
able benefits, or a nominal fee for such 
services; and 
(iii) is not otherwise employed at any 
time in the construction work. 
(6) ACCESS TO RESIDUAL RECEIPTS.— 
(A) IN GENERAL.—The Secretary shall au-
thorize the owner of a housing project assisted 
under this section to use any residual receipts 
held for the project in excess of $500 per unit 
(or in excess of such other amount prescribed 
by the Secretary based on the needs of the 
project) for activities to retrofit and renovate 
the project as described under section 802(d)(3) 
of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 8011(d)(3)) or to pro-
vide supportive services to residents of the 
project. 
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(B) REPORT.—Any owner that uses resid-
ual receipts under this paragraph shall submit 
to the Secretary a report, not less than annu-
ally, describing the uses of the residual receipts. 
(C) DETERMINATION OF AMOUNT.—In de-
termining the amount of project rental assist-
ance to be provided to a project under sub-
section (c)(3) of this section, the Secretary may 
take into consideration the residual receipts 
held for the project only if, and to the extent 
that, excess residual receipts are not used under 
this paragraph. 
(7) OCCUPANCY
STANDARDS
AND
OBLIGA-
TIONS.—Each owner shall operate housing assisted 
under this section in compliance with subtitle C of 
title VI of the Housing and Community Develop-
ment Act of 1992 (42 U.S.C. 13601 et seq.) and 
any regulations issued under such subtitle. 
(8) USE OF PROJECT RESERVES.— 
(A) IN GENERAL.—Amounts for project re-
serves for a project assisted under this section 
may be used for costs, subject to reasonable 
limitations as the Secretary determines appro-
priate, for reducing the number of dwelling 
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units in the project that are currently obsolete 
or unmarketable. 
(B) 
APPROVAL
OF
SECRETARY
RE-
QUIRED.—Any use described in subparagraph 
(A) of amounts for project reserves for a 
project assisted under this section shall be sub-
ject to the approval of the Secretary to ensure 
that such use is designed to retrofit units that 
are currently obsolete or unmarketable. 
(l) DEFINITIONS.—In this section, the following defi-
nitions shall apply: 
(1) CONSUMER COOPERATIVE.—The term ‘‘con-
sumer cooperative’’ has the same meaning given 
such term for purposes of the supportive housing for 
the elderly program under section 202 of the Hous-
ing Act of 1959 (12 U.S.C. 1701q). 
(2) VERY LOW-INCOME VETERAN FAMILY.—The 
term ‘‘very low-income veteran family’’ means a vet-
eran family whose income does not exceed 50 per-
cent of the median income for the area, as deter-
mined by the Secretary with adjustments for smaller 
and larger families, except that the Secretary may 
establish an income ceiling higher or lower than 50 
percent of the median for the area on the basis of 
the Secretary’s findings that such variations are nec-
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essary because of prevailing levels of construction 
costs or fair market rents (as determined under sec-
tion 8 of the United States Housing Act of 1937 (42 
U.S.C. 1437f)), or unusually high or low family in-
comes. 
(3) OWNER.—The term ‘‘owner’’ means a pri-
vate nonprofit organization or consumer cooperative 
that receives assistance under this section to develop 
and operate supportive housing for very low-income 
veteran families. 
(4) PRIVATE NONPROFIT ORGANIZATION.—The 
term ‘‘private nonprofit organization’’ means— 
(A) any incorporated private institution or 
foundation— 
(i) no part of the net earnings of 
which inures to the benefit of any member, 
founder, contributor, or individual; 
(ii) which has a governing board that 
is responsible for the operation of the 
housing assisted under this section; and 
(iii) which is approved by the Sec-
retary as to financial responsibility; 
(B) a for-profit limited partnership the 
sole general partner of which is an organization 
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meeting the requirements under clauses (i), (ii), 
and (iii) of subparagraph (A); 
(C) a corporation wholly owned and con-
trolled by an organization meeting the require-
ments under clauses (i), (ii), and (iii) of sub-
paragraph (A); and 
(D) a tribally designated housing entity, as 
such term is defined in section 4 of the Native 
American Housing Assistance and Self-Deter-
mination Act of 1996 (25 U.S.C. 4103). 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development, 
except where specifically provided otherwise. 
(6) STATE.—The term ‘‘State’’ includes the 
several States, the District of Columbia, the Com-
monwealth of Puerto Rico, and the possessions of 
the United States. 
(7) SUPPORTIVE HOUSING FOR VERY LOW-IN-
COME VETERAN FAMILIES.—The term ‘‘supportive 
housing for very low-income veteran families’’ means 
housing that is designed to accommodate the provi-
sion of supportive services that are expected to be 
needed, either initially or over the useful life of the 
housing, by the veteran families that the housing is 
intended to serve. 
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(8) VETERAN.—The term ‘‘veteran’’ has the 
meaning given the term in section 101 of title 38, 
United States Code. 
(9) VETERAN
FAMILY.—The term ‘‘veteran 
family’’ includes a veteran who is a single person, a 
family (including families with children) whose head 
of household (or whose spouse) is a veteran, and one 
or more veterans living together with 1 or more per-
sons. 
(m) ALLOCATION OF FUNDS.—Of any amounts made 
available for assistance under this section: 
(1) PLANNING
GRANTS.—Not more than 2.5 
percent shall be available for planning grants in ac-
cordance with subsection (c)(1). 
(2) CAPITAL ADVANCES.—Such sums as may be 
necessary shall be available for capital advances in 
accordance with subsection (c)(2). 
(3) PROJECT RENTAL ASSISTANCE.—Such sums 
as may be necessary shall be available for project 
rental assistance in accordance with subsection 
(c)(3). 
(4) TECHNICAL ASSISTANCE.—Not more than 1 
percent shall be available for technical assistance in 
accordance with subsection (k)(1). 
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