or for such insular area by applying the formula 
under subsection (a) of this section to the total 
amount allocated under section 293(b)(1) for all 
States, Indian tribes, and insular areas for the fiscal 
year. 
‘‘(3) PARTICIPATING LOCAL JURISDICTIONS.— 
The formula amount for each participating local ju-
risdiction shall be the amount determined for such 
participating local jurisdiction by applying the for-
mula under subsection (a) of this section to the total 
amount allocated under section 293(b)(2) for all 
participating local jurisdictions for the fiscal year. 
‘‘(4) NOTICE.—For each fiscal year referred to 
in section 293(a), not later than 60 days after the 
date that the Secretary determines the total amount 
available from the Trust Fund for such fiscal year 
pursuant to section 292(c) for assistance under this 
subtitle, the Secretary shall cause to be published in 
the Federal Register a notice that such amounts 
shall be so available. 
‘‘(c) ALLOCATION BASED ON AFFORDABLE HOUSING 
NEEDS FORMULA.—The allocation under this subsection 
for a State, for Indian tribes, for an insular area, or for 
a local participating jurisdiction for a fiscal year shall be 
determined as follows:
‘‘(1) STATES.—Subject to subsection (d), the 
allocation for a State shall be as follows: 
‘‘(A) MINIMUM AMOUNT.—If the formula 
amount determined under subsection (b)(2) for 
the State for the fiscal year is less than 0.5 per-
cent of the total amount allocated for such fis-
cal year under section 293(b)(1), the allocation 
for the State shall be 0.5 percent of the total 
amount allocated for such fiscal year under sec-
tion 293(b)(1). 
‘‘(B) FORMULA AMOUNT.—If the formula 
amount determined under subsection (b)(2) for 
the State for the fiscal year is 0.5 percent or 
more of the total amount allocated for such fis-
cal year under section 293(b)(1), the allocation 
for the State shall be the formula amount for 
the State, except that— 
‘‘(i) the Secretary shall reduce such 
formula amounts for all States whose allo-
cations are determined under this subpara-
graph on a pro rata basis, except as pro-
vided in clause (ii), by the amount nec-
essary to account for any increases from 
the formula amount for allocations made 
under subparagraph (A), so that the total
of the allocations for all States pursuant to 
this paragraph is equal to the aggregate of 
the formula amounts under subsection 
(b)(2) for all States; and 
‘‘(ii) no reduction pursuant to clause 
(i) for any State may reduce the formula 
amount for the State to less than 0.5 per-
cent of such total amount allocated for 
such fiscal year. 
‘‘(2) INDIAN TRIBES AND INSULAR AREAS.— 
The allocation for Indian tribes and for each insular 
area shall be the formula amount for Indian tribes 
or for the insular area, respectively, determined 
under subsection (b), as applicable. 
‘‘(3) PARTICIPATING LOCAL JURISDICTIONS.— 
Subject to subsection (d), the allocation for each 
participating local jurisdiction shall be the formula 
amount for the jurisdiction determined under sub-
section (b). 
‘‘(d) ALLOCATION EXCEPTION FOR YEARS IN WHICH 
LESS THAN $2 BILLION IS AVAILABLE.—If, for any fiscal 
year, the total amount available pursuant to section 
293(a) for assistance under this subtitle is less than 
$2,000,000,000—
‘‘(1) for each participating local jurisdiction 
having a formula amount for such fiscal year of less 
than $750,000, the allocation shall be $0, except 
that the allocation for such a jurisdiction for such 
fiscal year shall be the formula amount for the juris-
diction for such fiscal year if— 
‘‘(A) the Secretary finds that the jurisdic-
tion has demonstrated a capacity to carry out 
provisions of this subtitle and the State in 
which such jurisdiction is located has author-
ized the Secretary to transfer to the jurisdiction 
a portion of the State’s allocation that is equal 
to or greater than the difference between the 
jurisdiction’s formula amount and $750,000, or 
the State or jurisdiction has made available 
such an amount from the State’s or jurisdic-
tion’s own sources available for use by the juris-
diction in accordance with this subtitle; or 
‘‘(B) the formula amount for such jurisdic-
tion for such fiscal year is an amount that is 
greater than the formula amount for such fiscal 
year for any other participating local jurisdic-
tion that is located in the same State; and 
‘‘(2) in the case of any jurisdiction whose allo-
cation is $0 by operation of paragraph (1), the allo-
cation for the State in which such participating local 
jurisdiction is located shall be increased by the 
amount of the formula amount for the participating 
local jurisdiction. 
Any adjustments pursuant to paragraphs (1) and (2) shall 
be made notwithstanding the allocation percentages under 
section 293(b). 
‘‘(e) GRANT AWARDS.—For each fiscal year referred 
to in section 293(a), using the amounts made available 
to the Secretary from the Trust Fund for such fiscal year 
under section 292(c), the Secretary shall, subject to sub-
section (f), make a grant to each State, insular area, and 
participating local jurisdiction in the amount of the alloca-
tion under subsection (a)(2), (c), or (d), as applicable, for 
the State, area, or jurisdiction, respectively. 
‘‘(f) MATCHING REQUIREMENT.— 
‘‘(1) IN GENERAL.—Each grantee for a fiscal 
year shall contribute to eligible activities funded with 
Trust Fund grant amounts, or require the contribu-
tion to such eligible activities by recipients of such 
Trust Fund grant amounts of, in addition to any 
such grant amounts, not less than the following 
amount: 
‘‘(A) STATE, LOCAL, OR
PRIVATE
RE-
SOURCES.—To the extent that such contributed
amounts are derived from State, local, or pri-
vate resources, 12.5 percent of such grant 
amounts. 
‘‘(B) FEDERAL AMOUNTS.—To the extent 
that such contributed amounts are derived from 
State- or locally-controlled amounts from Fed-
eral assistance, or from amounts made available 
under the affordable housing program of a Fed-
eral Home Loan Bank pursuant to section 10(j) 
of the Federal Home Loan Bank Act (12 
U.S.C. 1430(j)), 25 percent of such grant 
amounts. 
Nothing in this paragraph may be construed to pre-
vent a grantee or recipient from complying with this 
paragraph only by contributions in accordance with 
subparagraph (A), only by contributions in accord-
ance with subparagraph (B), or by a combination of 
such contributions. 
‘‘(2) REDUCTION OR WAIVER FOR RECIPIENTS 
IN FISCAL DISTRESS.—The Secretary may reduce or 
waive the requirement under paragraph (1) with re-
spect to any grantee that the Secretary determines, 
pursuant to such demonstration by the recipient as 
the Secretary shall require, is in fiscal distress. The 
Secretary shall make determinations regarding fiscal
distress for purposes of this paragraph in the same 
manner, and according to the same criteria, as fiscal 
distress is determined with respect to jurisdictions 
under section 220(d) (42 U.S.C. 12750(d)). 
‘‘(3) QUALIFICATION
OF
SERVICES
FUNDING 
FOR MATCH.—For purposes of meeting the require-
ments of paragraph (1), amounts that a grantee, re-
cipient, or other governmental or private agency or 
entity commits to contribute to provide services to 
residents of affordable housing provided using grant 
amounts under this subtitle, by entering into a bind-
ing commitment for such contribution as the Sec-
retary shall require, shall be considered contribu-
tions to eligible activities. Amounts to be considered 
eligible contributions under this paragraph shall not 
exceed 33 percent of the total cost of the eligible ac-
tivity. 
‘‘(4) REDUCTION OR WAIVER FOR CERTAIN AC-
TIVITIES.—With respect to Trust Fund grant 
amounts made available for a fiscal year, the Sec-
retary shall reduce or waive the amount of contribu-
tions otherwise required under paragraph (1) to be 
made with respect to eligible activities to be carried 
out with such grant amounts and for which any vari-
ance from zoning laws or other waiver of regulatory
requirements was approved by the local jurisdiction. 
Such reduction may be implemented in the year fol-
lowing the year in which such activities are funded 
with Trust Fund grant amounts. 
‘‘(5) WAIVER
FOR
DISASTER
AREAS.—In the 
case of any area that is subject to a declaration by 
the President of a major disaster or emergency 
under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5121), the 
Secretary shall, for the fiscal year following such 
declaration, waive the requirement under paragraph 
(1) with respect to any eligible activities to be car-
ried out in such area. 
‘‘(g) COMPETITIVE GRANTS FOR INDIAN TRIBES.— 
For each fiscal year referred to in section 293(a), the Sec-
retary shall, using amounts allocated for Indian tribes 
pursuant to subsection (a)(2)(B) or (c)(2), as applicable, 
and subject to subsection (f), make grants to Indian tribes 
on a competitive basis, based upon such criteria as the 
Secretary shall establish, which shall include the factors 
specified in section 295(c)(2)(B). 
‘‘(h) USE BY STATE OF UNUSED FUNDS OF LOCAL 
JURISDICTIONS.—If any participating local jurisdiction 
for which an allocation is made for a fiscal year pursuant 
to this section notifies the Secretary of an intent not to
use all or part of such funds, any such funds that will 
not be used by the jurisdiction shall be added to the grant 
award under subsection (e) for the State in which such 
jurisdiction is located. 
‘‘(i) COMPETITIVE GRANTS FOR AREAS WITHOUT 
ALLOCATION PLANS AND RECIPIENTS WITH INSUFFI-
CIENT MATCHING CONTRIBUTIONS.— 
‘‘(1) AVAILABLE AMOUNTS.—For a fiscal year, 
the following amounts shall be available for grants 
under this subsection: 
‘‘(A) ALLOCATION FOR AREAS NOT SUB-
MITTING ALLOCATION PLANS.—With respect to 
each State, insular area, or participating local 
jurisdiction that has not, before the expiration 
of the 12-month period beginning upon the date 
of the publication of the notice of funding avail-
ability for such fiscal year under subsection 
(b)(4), submitted to and had approved by the 
Secretary an allocation plan for such fiscal year 
meeting the requirements of section 295, the 
amount of the allocation for such State, insular 
area, or participating local jurisdiction for such 
fiscal year determined under this section. 
‘‘(B) UNMATCHED
PORTION
OF
ALLOCA-
TION.—With respect to any grantee for which
the Trust Fund grant amount awarded for such 
fiscal year is reduced from the amount of the 
allocation determined under this section for the 
grantee by reason of failure comply with the re-
quirements under subsection (f), the amount by 
which such allocation for the grantee for the 
fiscal year exceeds the Trust Fund grant 
amount for the grantee for the fiscal year. 
‘‘(C) 
UNCOMMITTED
AMOUNTS.—Any 
Trust Fund grant amounts for a fiscal year 
that are not committed for use for eligible ac-
tivities before the expiration of the 24-month 
period beginning upon the date of the publica-
tion of the notice of availability of amounts 
under subsection (b)(4) for such fiscal year. 
‘‘(D) 
UNUSED
AMOUNTS.—Any 
Trust 
Fund grant amounts for which the grantee no-
tifies the Secretary that such funds will not be 
used under this subtitle. 
‘‘(2) NOTICE.—For each fiscal year, not later 
than 60 days after the date that the Secretary deter-
mines that the amounts described in paragraph (1) 
shall be available for grants under this subsection, 
the Secretary shall cause to be published in the Fed-
eral Register a notice that such amounts shall be so 
available. 
‘‘(3) APPLICATIONS.—The Secretary shall pro-
vide for nonprofit and public entities (and consortia 
thereof, which may include regional consortia of 
units of local government) to submit applications, 
during the 9-month period beginning upon publica-
tion of a notice of funding availability under para-
graph (2) for a fiscal year, for a grant of all or a 
portion of the amounts referred to in paragraph (1) 
for such fiscal year. Such an application shall in-
clude a certification that the applicant will comply 
with all requirements of this subtitle applicable to a 
grantee under this subsection. 
‘‘(4) SELECTION
CRITERIA.—The Secretary 
shall, by regulation, establish criteria for selecting 
applicants that meet the requirements of paragraph 
(3) for funding under this subsection. Such criteria 
shall give priority to applications that provide that 
grant amounts under this subsection will be used for 
eligible activities relating to affordable housing that 
is located in the State or insular area, as applicable, 
for which such grant funds were originally allocated 
under this section.
‘‘(5) AWARD
AND
USE
OF
GRANT
ASSIST-
ANCE.— 
‘‘(A) AWARD.—Subject only to the absence 
of applications meeting the requirements of 
paragraph (3), upon the expiration of the pe-
riod referred to in such paragraph, the Sec-
retary shall select an applicant or applicants 
under this subsection to receive the amounts 
available under paragraph (1) and shall make a 
grant or grants to such applicant or applicants. 
The selection shall be based upon the criteria 
established under paragraph (4). 
‘‘(B) USE.—Amounts from a grant under 
this subsection shall be Trust Fund grant 
amounts for purposes of this subtitle. 
‘‘SEC. 295. ALLOCATION PLANS. 
‘‘(a) IN GENERAL.—Each grantee that is a State, in-
sular area, participating local jurisdiction, or grantee 
under section 294(i) for a fiscal year, shall establish an 
allocation plan in accordance with this section for the dis-
tribution of Trust Fund grant amounts provided to the 
grantee for such fiscal year, which shall be a plan that— 
‘‘(1) provides for use of such amounts in ac-
cordance with section 296;
‘‘(2) is based on priority housing needs, includ-
ing priority housing needs in rural areas, as deter-
mined by the grantee; and 
‘‘(3) is consistent with the comprehensive hous-
ing affordability strategy under section 105 (42 
U.S.C. 12705) or any applicable consolidated sub-
mission used for purposes of applying for other com-
munity planning and development and housing as-
sistance programs administered by the Secretary, for 
the applicable State, insular area, jurisdiction, or 
grantee under section 294(i). 
‘‘(b) ESTABLISHMENT.—In establishing an allocation 
plan, a grantee described in subsection (a) shall notify the 
public of the establishment of the plan, provide an oppor-
tunity for public comments regarding the plan, consider 
any public comments received, and make the completed 
plan available to the public. 
‘‘(c) CONTENTS.—Each allocation plan of a grantee 
described in subsection (a) shall comply with the following 
requirements: 
‘‘(1) APPLICATION REQUIREMENTS FOR ELIGI-
BLE
RECIPIENTS.—The allocation plan shall set 
forth the requirements for eligible recipients to apply 
to the grantee to receive assistance from Trust Fund 
grant amounts of the grantee for use for eligible ac-
tivities, including a requirement that each such ap-
plication include— 
‘‘(A) a description of the eligible activities 
to be conducted using such assistance; 
‘‘(B) a certification by the eligible recipient 
applying for such assistance that any housing 
assisted with such grant amounts will comply 
with— 
‘‘(i) all of the requirements under this 
subtitle, including the targeting require-
ments under section 296(c) and the afford-
able housing requirements under section 
297; 
‘‘(ii) section 808(d) of the Fair Hous-
ing Act (relating to the obligation to af-
firmatively further fair housing); and 
‘‘(iii) section 504 of the Rehabilitation 
Act of 1973 (relating to prohibition of dis-
crimination on the basis of disability); and 
‘‘(C) in the case of any recipient who has 
received assistance from Trust Fund grant 
amounts in any previous fiscal year, a report on 
the progress made in carrying out the eligible 
activities funded with such previous assistance.
‘‘(2) SELECTION PROCESS AND CRITERIA FOR 
ASSISTANCE.— 
‘‘(A) SELECTION PROCESS.—The allocation 
plan shall set forth a process for the grantee to 
select eligible activities meeting the grantee’s 
priority housing needs for funding with Trust 
Fund grant amounts of the grantee, which shall 
comply with requirements for such process as 
the Secretary shall, by regulation, establish. 
‘‘(B) SELECTION
CRITERIA.—The alloca-
tion plan shall set forth the factors for consid-
eration in selecting among applicants that meet 
the application requirements established pursu-
ant to paragraph (1), which shall provide for 
geographic diversity among eligible activities to 
be assisted with Trust Fund grant amounts of 
the grantee and shall include— 
‘‘(i) the merits of the proposed eligible 
activity of the applicant, including the ex-
tent to which the activity addresses hous-
ing needs identified in the allocation plan 
of the grantee and the applicable com-
prehensive housing affordability strategy or 
consolidated submission referred to in sub-
section (a)(3);
‘‘(ii) the experience of the applicant, 
including its principals, in carrying out 
projects similar to the proposed eligible ac-
tivity; 
‘‘(iii) the ability of the applicant to 
obligate grant amounts for the proposed el-
igible activities and to undertake such ac-
tivities in a timely manner; 
‘‘(iv) the extent of leveraging of funds 
by the applicant from private and other 
non-Federal sources for carrying out the 
eligible activities to be funded with Trust 
Fund grant amounts, including assistance 
made available under section 8 of the 
United States Housing Act of 1937 (42 
U.S.C. 1437f) that is devoted to the 
project that contains the affordable hous-
ing to be assisted with such assistance; 
‘‘(v) the extent of local assistance that 
will be provided in carrying out the eligible 
activities, including financial assistance; 
‘‘(vi) the efficiency of total project 
fund use as measured by the cost per unit 
of the proposal, as adjusted by factors 
which shall include whether the funding
with Trust Fund grant amounts is for new 
construction, rehabilitation, preservation, 
or homeownership assistance, whether the 
project involves supportive housing, dif-
ferences in construction and rehabilitation 
costs in different areas of the grantee, and 
other appropriate adjustments; 
‘‘(vii) the degree to which the project 
in which the affordable housing will be lo-
cated will have residents of various in-
comes; 
‘‘(viii) the extent of employment and 
other economic opportunities for low-in-
come families in the area in which the 
housing will be located; 
‘‘(ix) the extent to which the applicant 
demonstrates the ability to maintain dwell-
ing units as affordable housing through the 
use of assistance made available under this 
subtitle, assistance leveraged from non- 
Federal sources, assistance made available 
under section 8 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f), State 
or local assistance, programs to increase
tenant income, cross-subsidization, and any 
other resources; 
‘‘(x) the extent to which the applicant 
demonstrates that the county in which the 
housing is to be located is experiencing an 
extremely low vacancy rate; 
‘‘(xi) the extent to which the percent-
age of the housing located in such county 
that is extremely old housing exceeds 35 
percent; 
‘‘(xii) the extent to which the housing 
assisted with the grant amounts will be ac-
cessible to persons with disabilities; 
‘‘(xiii) the extent to which the appli-
cant demonstrates that the affordable 
housing assisted with the grant amounts 
will be located in proximity to public trans-
portation, job opportunities, child care, and 
community revitalization projects; 
‘‘(xiv) the extent to which the appli-
cant has provided that assistance from 
grant amounts will be used for eligible ac-
tivities relating to housing located in cen-
sus tracts in which the number of families
having incomes less than the poverty line is 
less than 20 percent; 
‘‘(xv) the extent to which the housing 
assisted with grant amounts will comply 
with energy efficiency standards and the 
national 
Green 
Communities 
criteria 
checklist for residential construction that 
provides criteria for the design, develop-
ment, and operation of affordable housing, 
as the Secretary shall by regulation pro-
vide; and 
‘‘(xvi) the extent to which the design, 
construction, and operation of the housing 
assisted with grant amounts reduces utility 
costs for residents and thereby reduces 
their total housing cost. 
A grantee may allocate a portion of funds 
under this section for use by such grantee for 
eligible activities pursuant to the selection proc-
ess under subparagraph (A). 
‘‘(3) USE FOR FIRST RESPONDERS AND TEACH-
ERS.—To the extent that Trust Fund grant 
amounts of a grantee are made available for eligible 
activities involving one- to four-family owner-occu-
pied housing, the grantee may give preference in the
use of such grant amounts to eligible activities relat-
ing to affordable housing for first responders, public 
safety officers, teachers, and other public employees 
who have family incomes such that such use of the 
grant amounts complies with the requirements under 
section 296(c). 
‘‘(4) PERFORMANCE GOALS, BENCHMARKS, AND 
TIMETABLES.—The allocation plan shall include per-
formance goals, benchmarks, and timetables for the 
grantee for the conducting of eligible activities with 
Trust Fund grant amounts that comply with re-
quirements and standards for such goals, bench-
marks, and timetables as the Secretary shall, by reg-
ulation, establish. 
‘‘(d) REVIEW AND APPROVAL BY SECRETARY.— 
‘‘(1) SUBMISSION.—A grantee described in sub-
section (a) shall submit an allocation plan for the 
fiscal year for which the grant is made to the Sec-
retary not later than the expiration of the 6-month 
period beginning upon the notice of funding avail-
ability under section 294(b)(4) for such fiscal year 
amounts. 
‘‘(2) 
REVIEW
AND
APPROVAL
OR
DIS-
APPROVAL.—The Secretary shall review and approve 
or disapprove an allocation plan not later than the
expiration of the 3-month period beginning upon 
submission of the plan. 
‘‘(3) STANDARD FOR DISAPPROVAL.—The Sec-
retary may disapprove an allocation plan only if the 
plan fails to comply with requirements of this sec-
tion or section 296. 
‘‘(4) RESUBMISSION
UPON
DISAPPROVAL.—If 
the Secretary disapproves a plan, the grantee may 
submit to the Secretary a revised plan for review 
and approval or disapproval under this subsection. 
‘‘(5) TIMING FOR FISCAL YEAR 2008.—With re-
spect only to fiscal year 2008, the Secretary may ex-
tend each of the periods referred to in paragraphs 
(1) and (2), and the period referred to in section 
294(i)(1)(A), by not more than 6 months. 
‘‘SEC. 296. USE OF ASSISTANCE BY RECIPIENTS. 
‘‘(a) DISTRIBUTION TO RECIPIENTS; USE REQUIRE-
MENTS.—Each grantee shall distribute Trust Fund grant 
amounts of the grantee to eligible recipients for use in ac-
cordance with this section. Trust Fund grant amounts of 
a grantee may be used, or committed for use, only for eli-
gible activities that— 
‘‘(1) are conducted in the jurisdiction of the 
grantee;
‘‘(2) in the case of a grantee that is a State, 
insular area, participating local jurisdiction, or 
grantee under section 294(i), comply with the alloca-
tion plan of the grantee under section 295; 
‘‘(3) are selected for funding by the grantee in 
accordance with the process and criteria for such se-
lection established pursuant to section 295(c)(2); 
and 
‘‘(4) comply with the targeting requirements 
under subsection (c) of this section and the afford-
able housing requirements under section 297. 
‘‘(b) ELIGIBLE RECIPIENTS.—Trust Fund grant 
amounts of a grantee may be provided only to an organiza-
tion, agency, or other entity (including a for-profit entity, 
a nonprofit entity, a faith-based organization, a commu-
nity development financial institution, a community devel-
opment corporation, and a State or local housing trust 
fund) that— 
‘‘(1) demonstrates the experience, ability, and 
capacity (including financial capacity) to undertake, 
comply, and manage the eligible activity; 
‘‘(2) demonstrates its familiarity with the re-
quirements of any other Federal, State or local 
housing program that will be used in conjunction 
with such grant amounts to ensure compliance with
all applicable requirements and regulations of such 
programs; and 
‘‘(3) makes such assurances to the grantee as 
the Secretary shall, by regulation, require to ensure 
that the recipient will comply with the requirements 
of this subtitle during the entire period that begins 
upon selection of the recipient to receive such grant 
amounts and ending upon the conclusion of all eligi-
ble activities that are engaged in by the recipient 
and funded with such grant amounts. 
‘‘(c) TARGETING REQUIREMENTS.—The targeting re-
quirements under this subsection are as follows: 
‘‘(1) REQUIREMENT OF USE OF ALL AMOUNTS 
FOR AFFORDABLE HOUSING FOR LOW-INCOME FAMI-
LIES.—All Trust Fund grant amounts of a grantee 
shall be distributed for use only for eligible activities 
relating to affordable housing that are for the ben-
efit only of families whose incomes do not exceed 80 
percent of the greater of— 
‘‘(A) the median family income for the 
area in which the housing is located, as deter-
mined by the Secretary with adjustments for 
smaller and larger families; and 
‘‘(B) the median family income for the 
State or insular area in which the housing is lo-
cated, as determined by the Secretary with ad-
justments for smaller and larger families. 
‘‘(2) USE OF 75 PERCENT FOR AFFORDABLE 
HOUSING
FOR
EXTREMELY
LOW-INCOME
FAMI-
LIES.—Not less than 75 percent of the Trust Fund 
grant amounts of a grantee for each fiscal year shall 
be used only for eligible activities relating to afford-
able housing that are for the benefit only of families 
whose incomes do not exceed the higher of— 
‘‘(A) 30 percent of the median family in-
come for the area in which the housing is lo-
cated, as determined by the Secretary with ad-
justments for smaller and larger families; and 
‘‘(B) the poverty line (as such term is de-
fined in section 673 of the Omnibus Budget 
Reconciliation Act of 1981 (42 U.S.C. 9902), 
including any revision required by such section) 
applicable to a family of the size involved. 
‘‘(3) USE OF 30 PERCENT FOR AFFORDABLE 
HOUSING FOR VERY POOR FAMILIES.—Not less than 
30 percent of the Trust Fund grant amounts of a 
grantee for each fiscal year shall be used only for el-
igible activities relating to affordable housing that 
are for the benefit only of families whose incomes do 
not exceed the maximum amount of income that an
individual or family could have, taking into consider-
ation any income disregards, and remain eligible for 
benefits under the Supplemental Security Income 
program under title XVI of the Social Security Act 
(42 U.S.C. 1381 et seq.). 
‘‘(4) USE OF 10 PERCENT FOR AFFORDABLE 
HOUSING
FOR
FAMILIES
ABOVE
PERCENT
OF 
AREA MEDIAN INCOME.—Not less than 10 percent of 
the Trust Fund grant amounts of a grantee for each 
fiscal year shall be used only for eligible activities re-
lating to affordable housing that are for the benefit 
only of families whose incomes exceed 50 percent of 
the median family income for the area in which the 
housing is located, as determined by the Secretary 
with adjustments for smaller and larger families. 
‘‘(5) LIMITATION FOR YEARS IN WHICH LESS 
THAN $2 BILLION IS AVAILABLE.—If, for any fiscal 
year, the total amount available pursuant to section 
293(a) for assistance under this subtitle is less than 
$2,000,000,000, in addition to the other require-
ments under this subsection, all such amounts shall 
be used only for eligible activities relating to afford-
able housing that are for the benefit only of families 
whose incomes do not exceed 60 percent of the me-
dian family income for the area in which the housing
is located, as determined by the Secretary with ad-
justments for smaller and larger families. 
‘‘(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 
Congress on the results of the assessment not later 
than October 1, 2012, and not later than the expira-
tion of the 5-year period beginning upon such date 
and each successive 5-year period thereafter. In each 
such report, the Secretary shall identify and make 
recommendations regarding the continuation or ad-
justment of the targeting requirements in para-
graphs (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 jurisdic-
tion 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 
limitations on the amount of Trust Fund grant amounts 
that may be used, on a per unit basis, for eligible activi-
ties. Such limitations shall be the same as the per unit
cost limits established pursuant to section 212(e) (42 
U.S.C. 12742(e)), as adjusted annually, and established 
by number of bedrooms, 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 pay-
ment loans, guarantees, and loan loss reserves; 
‘‘(B) in the case of assistance for owner-
ship of one- to four-family owner-occupied hous-
ing, downpayment assistance, closing cost as-
sistance, and assistance for interest rate buy- 
downs; and 
‘‘(C) any other forms of assistance ap-
proved by the Secretary. 
‘‘(2) REPAYMENTS.—If a grantee awards as-
sistance 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 ac-
cordance with the allocation plan under section 295 
for the grantee for the fiscal year in which such re-
payments are made or returns are received.
‘‘(g) COORDINATION WITH OTHER ASSISTANCE.—In 
distributing assistance pursuant to this section, each 
grantee shall, to the maximum extent practicable, coordi-
nate such distribution with the provision of other Federal, 
State, tribal, and local housing assistance, including— 
‘‘(1) in the case of any State, housing credit 
dollar 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 com-
munity 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 
assist in making available affordable housing; and 
‘‘(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 in-
clude 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, out-
reach, 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 carrying out the program required under this sub-
title to 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 affordable housing assisted under subtitles A and D. 
‘‘(j) COMPLIANCE WITH OTHER FEDERAL LAWS.— 
All amounts from the Trust Fund shall be allocated in 
accordance with, and any eligible activities carried out in 
whole or in part with grant amounts under this subtitle 
(including housing provided with such grant amounts) 
shall comply with and be operated in compliance with, 
other applicable provisions of Federal law, including— 
‘‘(1) laws relating to tenant protections and 
tenant rights to participate in decision making re-
garding their residences; 
‘‘(2) laws requiring public participation, includ-
ing laws relating to Consolidated Plans, Qualified 
Allocation Plans, and Public Housing Agency Plans; 
and
‘‘(3) fair housing laws and laws regarding ac-
cessibility in federally assisted housing, including 
section 504 of the Rehabilitation Act of 1973. 
‘‘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 af-
fordable 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 fol-
lowing requirements: 
‘‘(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 ap-
plicable payment standard for assistance under 
section 8(o) of such Act, if higher; and
‘‘(B) a rent that does not exceed 30 per-
cent 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 adjustment for number of bedrooms in the 
unit, except 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 necessary because of prevailing levels of 
construction costs or fair market rents, or un-
usually 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 eligi-
bility 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 vouch-
er.
‘‘(4) MIXED INCOME.— 
‘‘(A) IN GENERAL.—The dwelling unit is 
located in a project: (i) that receives assistance 
under this subtitle; and (ii) for which not more 
than 50 percent of the rental units in the 
project that are not previously occupied may be 
rented initially only to families with incomes de-
scribed in section 296(c)(2), as determined at a 
reasonable time before 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 occu-
pying the project at the time funds are awarded 
for such project. 
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply in the case of a project that— 
‘‘(i) has 25 or fewer dwelling units 
and 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 percent; 
‘‘(II) located in a rural area, as 
such term is defined in section 520 of 
the Housing Act of 1949 (42 U.S.C. 
1490); or 
‘‘(III) specifically made available 
only for households comprised of dis-
abled families; or 
‘‘(ii) is specifically made available only 
for households comprised of elderly fami-
lies. 
‘‘(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 cooper-
ative housing corporation, as such term is defined in sec-
tion 216(b) of the Internal Revenue Code of 1986 (26 
U.S.A. 216(b))), such a residence shall be considered af-
fordable 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), except that any reference in such sec-
tion to assistance under title II of this Act shall 
for purposes of this section be considered to 
refer to assistance 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 
jurisdiction that is the State in which such 
housing 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 re-
spect to the responsibilities and financial manage-
ment involved in homeownership that is approved by 
the Secretary and includes counseling regarding fi-
nancial literacy, strategies to save money, qualifying 
for a mortgage loan, methods to avoid predatory 
lenders and foreclosure, and, where appropriate by 
region, any requirements and costs associated with 
obtaining flood or other disaster-specific insurance 
coverage; except that the Secretary may, at the re-
quest 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 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 
include 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, in-
cluding saving for retirement, managing credit, 
long-term care, and estate planning and edu-
cation on predatory lending, identity theft, and 
financial abuse schemes relating to homeowner-
ship 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 
PUBLIC 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 
ensure that priority for occupancy in or, in the case of 
owner-occupied housing, purchase of, the dwelling unit is 
provided to families who are eligible for rental assistance 
under section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f) or occupancy in public housing assisted 
under such Act, and have applied to a public housing
agency for such assistance or occupancy, as applicable, 
and been on a waiting list of a public housing agency for 
such assistance or occupancy, as applicable, for at least 
12 consecutive months. 
‘‘SEC. 298. OTHER PROVISIONS. 
‘‘(a) EFFECT OF ASSISTANCE UNDER PROGRAM.— 
Notwithstanding any other provision of law, the provision 
of assistance under this subtitle for a project shall not re-
duce the amount of assistance for which such project is 
otherwise eligible under subtitles A through F of this title, 
if the project does not exceed the cost limits established 
pursuant to section 296(e). 
‘‘(b) ACCOUNTABILITY OF GRANTEES AND RECIPI-
ENTS.— 
‘‘(1) RECIPIENTS.— 
‘‘(A) TRACKING
OF
FUNDS.—The Sec-
retary shall— 
‘‘(i) require each grantee to develop 
and maintain a system to ensure that each 
recipient of assistance from Trust Fund 
grant amounts of the grantee uses such 
amounts in accordance with this subtitle, 
the regulations issued under this subtitle, 
and any requirements or conditions under 
which such amounts were provided; and
‘‘(ii) establish minimum requirements 
for agreements, between the grantee and 
recipients, regarding assistance from the 
Trust Fund grant amounts of the grantee, 
which shall include— 
‘‘(I) appropriate continuing fi-
nancial and project reporting, record 
retention, and audit requirements for 
the duration of the grant to the re-
cipient to ensure compliance with the 
limitations and requirements of this 
subtitle and the regulations under this 
subtitle; and 
‘‘(II) any other requirements that 
the Secretary determines are nec-
essary to ensure appropriate grant ad-
ministration and compliance. 
‘‘(B) MISUSE OF FUNDS.— 
‘‘(i) 
REIMBURSEMENT
REQUIRE-
MENT.—If any recipient of assistance from 
Trust Fund grant amounts of a grantee is 
determined, in accordance with clause (ii), 
to have used any such amounts in a man-
ner that is materially in violation of this 
subtitle, the regulations issued under this
subtitle, or any requirements or conditions 
under which such amounts were pro-
vided— 
‘‘(I) such recipient shall be ineli-
gible for any further assistance from 
any Trust Fund grant amounts of any 
grantee during the period that begins 
upon such determination and ends 
upon reinstatement by the Secretary 
of the eligibility of recipient for such 
assistance, except that the Secretary 
may reinstate such an ineligible recipi-
ent only pursuant to application by 
the recipient for such reinstatement 
and the recipient may not apply to the 
Secretary for such reinstatement dur-
ing the 12-month period, or the 10- 
year period in the case of a second or 
subsequent such determination, begin-
ning upon such determination; and 
‘‘(II) the grantee shall require 
that, within 12 months after the de-
termination of such misuse, the recipi-
ent shall reimburse the grantee for 
such misused amounts and return to
the grantee any amounts from the 
Trust Fund grant amounts of the 
grantee that remain unused or uncom-
mitted for use. 
The remedies under this clause are in ad-
dition to any other remedies that may be 
available under law. 
‘‘(ii) DETERMINATION.—A determina-
tion is made in accordance with this clause 
if the determination is— 
‘‘(I) made by the Secretary; or 
‘‘(II)(aa) made by the grantee; 
‘‘(bb) the grantee provides notifi-
cation of the determination to the 
Secretary for review, in the discretion 
of the Secretary, of the determination; 
and 
‘‘(cc) the Secretary does not sub-
sequently reverse the determination. 
‘‘(2) GRANTEES.— 
‘‘(A) REPORT.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall require each grantee receiving Trust 
Fund grant amounts for a fiscal year to
submit a report, for such fiscal year, to the 
Secretary that— 
‘‘(I) describes the activities fund-
ed under this subtitle during such 
year with the Trust Fund grant 
amounts of the grantee; 
‘‘(II) describes the manner in 
which the grantee complied during 
such fiscal year with the allocation 
plan established pursuant to section 
295 for the grantee; and 
‘‘(III) certifies the number of 
total dwelling units of affordable 
housing that were constructed, pre-
served, or rehabilitated during such 
fiscal year with assistance from Trust 
Funds grant amounts of the grantee 
comply with widely accepted standards 
for green building. 
‘‘(ii) 
PUBLIC
AVAILABILITY.—The 
Secretary shall make such reports pursu-
ant to this subparagraph publicly available. 
‘‘(B) MISUSE OF FUNDS.—If the Secretary 
determines, after reasonable notice and oppor-
tunity for hearing, that a grantee has failed to
comply substantially with any provision of this 
subtitle and until the Secretary is satisfied that 
there is no longer any such failure to comply, 
the Secretary shall— 
‘‘(i) reduce the amount of assistance 
under this section to the grantee by an 
amount equal to the amount of Trust 
Fund grant amounts which were not used 
in accordance with this subtitle; 
‘‘(ii) require the grantee to repay the 
Secretary an amount equal to the amount 
of the Trust Fund grant amounts which 
were not used in accordance with this sub-
title; 
‘‘(iii) limit the availability of assist-
ance under this subtitle to the grantee to 
activities or recipients not affected by such 
failure to comply; or 
‘‘(iv) terminate any assistance under 
this subtitle to the grantee. 
‘‘(c) GREEN HOUSING CLEARINGHOUSE.— 
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a clearinghouse of information relating to 
green building techniques to provide grantees and 
recipients of Trust Fund amounts information re-
garding use of Trust Fund grant amounts in a man-
ner that increases the efficiency of buildings and 
their use of energy, water, and materials, and reduc-
ing building impacts on human health and the envi-
ronment, through better siting, design, construction, 
operation, maintenance, and removal, including in-
formation regarding best practices and technical rec-
ommendations. 
‘‘(2) ACCESS THROUGH INTERNET.—The Sec-
retary shall make the information of the clearing-
house available by means of the Internet. 
‘‘SEC. 299. DEFINITIONS. 
‘‘For purposes of this subtitle, the following defini-
tions shall apply: 
‘‘(1) ELIGIBLE ACTIVITIES.—The term ‘eligible 
activities’ means activities relating to the construc-
tion, preservation, or rehabilitation of affordable 
rental housing or affordable one- to four-family 
owner-occupied housing, including— 
‘‘(A) the construction of new housing; 
‘‘(B) the acquisition of real property; 
‘‘(C) site preparation and improvement, in-
cluding demolition; 
‘‘(D) rehabilitation of existing housing;
‘‘(E) use of funds to facilitate affordability 
for homeless and other extremely low-income 
households of dwelling units assisted with Trust 
Fund grant amounts, in a combined amount 
not to exceed 20 percent of the project grant 
amount, for— 
‘‘(i) project-based rental assistance for 
not more than 12 months for a project as-
sisted with Trust Fund grant amounts; 
‘‘(ii) project operating reserves for use 
to cover the loss of rental assistance or in 
conjunction with a project loan; or 
‘‘(iii) project operating accounts used 
to cover net operating income shortfalls for 
dwelling units assisted with Trust Fund 
grant amounts; 
‘‘(F) use of funds to facilitate affordability 
for families having incomes described in section 
296(c)(3), in a combined amount for a grantee 
in any fiscal year not to exceed 10 percent of 
the aggregate Trust Fund grant amounts pro-
vided to the grantee for such fiscal year, for 
project operating accounts used to cover net op-
erating income shortfalls for dwelling units as-
sisted with Trust Fund grant amounts;
‘‘(G) providing incentives to maintain ex-
isting housing (including manufactured hous-
ing) as affordable housing and to establish or 
extend any low-income affordability restrictions 
for such housing, including covering capital ex-
penditures and costs of establishing community 
land trusts to provide sites for manufactured 
housing provided such incentives; and 
‘‘(H) in the case of affordable one- to four- 
family owner-occupied housing, downpayment 
assistance, closing cost assistance, and assist-
ance for interest rate buy-downs. 
‘‘(2) ELIGIBLE RECIPIENT.—The term ‘eligible 
recipient’ means an entity that meets the require-
ments under section 296(b) for receipt of Trust 
Fund grant amounts of a grantee. 
‘‘(3) EXTREMELY
LOW
VACANCY
RATE.—The 
term ‘extremely low vacancy rate’ means a housing 
or rental vacancy rate of 2 percent or less. 
‘‘(4) EXTREMELY
OLD
HOUSING.—The term 
‘extremely old housing’ means housing that is 45 
years old or older. 
‘‘(5) FAMILIES.—The term ‘families’ has the 
meaning given such term in section 3(b) of the