‘‘(A) LIMITATION.—Except as provided in 
subparagraph (B), of the total number of dwell-
ing units in any multifamily housing project 
(including any condominium or cooperative 
housing project) containing any unit for which 
assistance is provided from a capital grant 
under subsection (d)(1) made after the date of 
the enactment of the Frank Melville Supportive 
Housing Investment Act of 2008, the aggregate 
number that are used for persons with disabil-
ities, including supportive housing for persons 
with disabilities, or to which any occupancy 
preference for persons with disabilities applies, 
may not exceed 25 percent of such total. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply in the case of any project that 
is a group home or independent living facility.’’; 
and 
(2) in subsection (l), by striking paragraph (4). 
(c) DELEGATED PROCESSING.—Subsection (g) of 
section 811 (42 U.S.C. 8013(g)) is amended— 
(1) by striking ‘‘SELECTION CRITERIA.—’’ and 
inserting 
‘‘SELECTION
CRITERIA
AND
PROC-
ESSING.—(1) SELECTION CRITERIA.—’’; 
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(2) by redesignating paragraphs (1), (2), (3), 
(4), (5), (6), and (7) as subparagraphs (A), (B), 
(C), (D), (E), (G), and (H), respectively; 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) DELEGATED PROCESSING.— 
‘‘(A) In issuing a capital advance under sub-
section (d)(1) for any multifamily project (but not 
including any project that is a group home or inde-
pendent living facility) for which financing for the 
purposes described in the last sentence of subsection 
(b) is provided by a combination of the capital ad-
vance and sources other than this section, within 30 
days of award of the capital advance, the Secretary 
shall delegate review and processing of such projects 
to a State or local housing agency that— 
‘‘(i) is in geographic proximity to the prop-
erty; 
‘‘(ii) has demonstrated experience in and 
capacity for underwriting multifamily housing 
loans that provide housing and supportive serv-
ices; 
‘‘(iii) may or may not be providing low-in-
come housing tax credits in combination with 
the capital advance under this section; and 
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‘‘(iv) agrees to issue a firm commitment 
within 12 months of delegation. 
‘‘(B) The Secretary shall retain the authority to 
process capital advances in cases in which no State 
or local housing agency has applied to provide dele-
gated processing pursuant to this paragraph or no 
such agency has entered into an agreement with the 
Secretary to serve as a delegated processing agency. 
‘‘(C) An agency to which review and processing 
is delegated pursuant to subparagraph (A) may as-
sess a reasonable fee which shall be included in the 
capital advance amounts and may recommend 
project rental assistance amounts in excess of those 
initially awarded by the Secretary. The Secretary 
shall develop a schedule for reasonable fees under 
this subparagraph to be paid to delegated processing 
agencies, which shall take into consideration any 
other fees to be paid to the agency for other funding 
provided to the project by the agency, including 
bonds, tax credits, and other gap funding. 
‘‘(D) Under such delegated system, the Sec-
retary shall retain the authority to approve rents 
and development costs and to execute a capital ad-
vance within 60 days of receipt of the commitment 
from the State or local agency. The Secretary shall 
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provide to such agency and the project sponsor, in 
writing, the reasons for any reduction in capital ad-
vance amounts or project rental assistance and such 
reductions shall be subject to appeal.’’. 
(d) LEVERAGING OTHER RESOURCES.—Paragraph 
(1) of section 811(g) (as so designated by subsection 
(c)(1) of this section) is amended by inserting after sub-
paragraph (E) (as so redesignated by subsection (c)(2) of 
this section) the following new subparagraph: 
‘‘(F) the extent to which the per-unit cost 
of units to be assisted under this section will be 
supplemented with resources from other public 
and private sources;’’. 
(e) TENANT PROTECTIONS AND ELIGIBILITY FOR 
OCCUPANCY.—Section 811 is amended by striking sub-
section (i) and inserting the following new subsection: 
‘‘(i) ADMISSION AND OCCUPANCY.— 
‘‘(1) TENANT SELECTION.— 
‘‘(A) PROCEDURES.—An owner shall adopt 
written tenant selection procedures that are sat-
isfactory to the Secretary as (i) consistent with 
the purpose of improving housing opportunities 
for very low-income persons with disabilities; 
and (ii) reasonably related to program eligibility 
and an applicant’s ability to perform the obliga-
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tions of the lease. Owners shall promptly notify 
in writing any rejected applicant of the grounds 
for any rejection. 
‘‘(B) REQUIREMENT
FOR
OCCUPANCY.— 
Occupancy in dwelling units provided assistance 
under this section shall be available only to per-
sons with disabilities and households that in-
clude at least one person with a disability. 
‘‘(C) AVAILABILITY.—Except only as pro-
vided in subparagraph (D), occupancy in dwell-
ing units in housing provided with assistance 
under this section shall be available to all per-
sons with disabilities eligible for such occupancy 
without regard to the particular disability in-
volved. 
‘‘(D) LIMITATION
ON
OCCUPANCY.—Not-
withstanding any other provision of law, the 
owner of housing developed under this section 
may, with the approval of the Secretary, limit 
occupancy within the housing to persons with 
disabilities who can benefit from the supportive 
services offered in connection with the housing. 
‘‘(2) TENANT PROTECTIONS.— 
‘‘(A) LEASE.—The lease between a tenant 
and an owner of housing assisted under this 
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section shall be for not less than one year, and 
shall contain such terms and conditions as the 
Secretary shall determine to be appropriate. 
‘‘(B) TERMINATION
OF
TENANCY.—An 
owner may not terminate the tenancy or refuse 
to renew the lease of a tenant of a rental dwell-
ing unit assisted under this section except— 
‘‘(i) for serious or repeated violation 
of the terms and conditions of the lease, 
for violation of applicable Federal, State, 
or local law, or for other good cause; and 
‘‘(ii) by providing the tenant, not less 
than 30 days before such termination or 
refusal to renew, with written notice speci-
fying the grounds for such action. 
‘‘(C) VOLUNTARY PARTICIPATION IN SERV-
ICES.—A supportive service plan for housing 
assisted under this section shall permit each 
resident to take responsibility for choosing and 
acquiring their own services, to receive any sup-
portive services made available directly or indi-
rectly by the owner of such housing, or to not 
receive any supportive services.’’. 
(f) DEVELOPMENT COST LIMITATIONS.—Subsection 
(h) of section 811 is amended— 
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(1) in paragraph (1)— 
(A) by striking the paragraph heading and 
inserting ‘‘GROUP HOMES’’; 
(B) in the first sentence, by striking ‘‘var-
ious types and sizes’’ and inserting ‘‘group 
homes’’; 
(C) by striking subparagraph (E); and 
(D) by redesignating subparagraphs (F) 
and (G) as subparagraphs (E) and (F), respec-
tively; 
(2) in paragraph (3), by inserting ‘‘established 
pursuant to paragraph (1)’’ after ‘‘cost limitation’’; 
and 
(3) by adding at the end the following new 
paragraph: 
‘‘(6) APPLICABILITY OF HOME PROGRAM COST 
LIMITATIONS.— 
‘‘(A) IN GENERAL.—The provisions of sec-
tion 212(e) of the Cranston-Gonzalez National 
Affordable Housing Act (42 U.S.C. 12742(e)) 
and the cost limits established by the Secretary 
pursuant to such section with respect to the 
amount of funds under subtitle A of title II of 
such Act that may be invested on a per unit 
basis, shall apply to supportive housing assisted 
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with a capital advance under subsection (d)(1) 
and the amount of funds under such subsection 
that may be invested on a per unit basis. 
‘‘(B) WAIVERS.—The Secretary shall pro-
vide for waiver of the cost limits applicable pur-
suant to subparagraph (A)— 
‘‘(i) in the cases in which the cost lim-
its established pursuant to section 212(e) 
of the Cranston-Gonzalez National Afford-
able Housing Act may be waived; and 
‘‘(ii) to provide for— 
‘‘(I) the cost of special design 
features to make the housing acces-
sible to persons with disabilities; 
‘‘(II) the cost of special design 
features necessary to make individual 
dwelling units meet the special needs 
of persons with disabilities; and 
‘‘(III) the cost of providing the 
housing in a location that is accessible 
to public transportation and commu-
nity organizations that provide sup-
portive services to persons with dis-
abilities.’’. 
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(g) REPEAL OF AUTHORITY TO WAIVE SIZE LIMITA-
TIONS.—Paragraph (1) of section 811(k) is amended— 
(1) in paragraph (1), by striking the second 
sentence; and 
(2) in paragraph (4), by striking ‘‘(or such 
higher number of persons’’ and all that follows 
through ‘‘subsection (h)(6))’’. 
(h) MINIMUM
ALLOCATION
FOR
MULTIFAMILY 
PROJECTS.—Subsection (l) of section 811, as amended by 
the preceding provisions of this Act, is further amended 
by inserting before paragraph (2) the following new para-
graph: 
‘‘(1) MINIMUM ALLOCATION FOR MULTIFAMILY 
PROJECTS.—The Secretary shall establish a min-
imum percentage of the amount made available for 
each fiscal year for capital advances under sub-
section (d)(1) that shall be used for multifamily 
projects subject to subsection (e)(4).’’. 
SEC. 4. PROJECT RENTAL ASSISTANCE COMPETITIVE DEM-
ONSTRATION PROGRAM. 
Section 811, as amended by the preceding provisions 
of this Act, is further amended— 
(1) by redesignating subsections (k) through 
(n) as subsections (l) through (o), respectively; and 
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(2) by inserting after subsection (j) the fol-
lowing new subsection: 
‘‘(k) PROJECT RENTAL ASSISTANCE-ONLY COMPETI-
TIVE DEMONSTRATION PROGRAM.— 
‘‘(1) AUTHORITY.—The Secretary shall carry 
out a demonstration program under this subsection 
to expand the supply of supportive housing for non- 
elderly adults with disabilities, under which the Sec-
retary shall make funds available for project rental 
assistance pursuant to paragraph (2) for eligible 
projects under paragraph (3). The Secretary shall 
provide for State housing finance agencies and other 
appropriate entities to apply to the Secretary for 
such project rental assistance funds, which shall be 
made available by such agencies and entities for 
dwelling units in eligible projects based upon criteria 
established by the Secretary for the demonstration 
program under this subsection. 
‘‘(2) PROJECT RENTAL ASSISTANCE.— 
‘‘(A) CONTRACT
TERMS.—Project rental 
assistance under the demonstration program 
under this subsection shall be provided— 
‘‘(i) in accordance with subsection 
(d)(2); 
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‘‘(ii) under a contract having an ini-
tial term of not less than 180 months that 
provides funding for a term 60 months, 
which funding shall be renewed upon expi-
ration, subject to the availability of suffi-
cient amounts in appropriation Acts. 
‘‘(B) LIMITATION ON UNITS ASSISTED.— 
Of the total number of dwelling units in any 
multifamily housing project containing any unit 
for which project rental assistance under the 
demonstration program under this subsection is 
provided, the aggregate number that are pro-
vided such project rental assistance, that are 
used for supportive housing for persons with 
disabilities, or to which any occupancy pref-
erence for persons with disabilities applies, may 
not exceed 25 percent of such total. 
‘‘(C) 
PROHIBITION
OF
CAPITAL
AD-
VANCES.—The Secretary may not provide a 
capital advance under subsection (d)(1) for any 
project for which assistance is provided under 
the demonstration program. 
‘‘(D) 
ELIGIBLE
POPULATION.—Project 
rental assistance under the demonstration pro-
gram under this subsection may be provided 
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only for dwelling units for extremely low-income 
persons with disabilities and extremely low-in-
come households that include at least one per-
son with a disability. 
‘‘(3) ELIGIBLE PROJECTS.—An eligible project 
under this paragraph is a new or existing multi-
family housing project for which— 
‘‘(A) the development costs are paid with 
resources from other public or private sources; 
and 
‘‘(B) a commitment has been made— 
‘‘(i) by the applicable State agency re-
sponsible for allocation of low-income hous-
ing tax credits under section 42 of the In-
ternal Revenue Code of 1986, for an allo-
cation of such credits; 
‘‘(ii) by the applicable participating 
jurisdiction that receives assistance under 
the HOME Investment Partnership Act, 
for assistance from such jurisdiction; or 
‘‘(iii) by any Federal agency or any 
State or local government, for funding for 
the project from funds from any other 
sources. 
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