[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2895 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 2895

To establish the National Affordable Housing Trust Fund in the Treasury 
 of the United States to provide for the construction, rehabilitation, 
and preservation of decent, safe, and affordable housing for low-income 
                               families.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 28, 2007

Mr. Frank of Massachusetts (for himself, Ms. Waters, Mr. Gary G. Miller 
 of California, Mr. Ramstad, Ms. Velazquez, Mr. McHugh, Mr. English of 
     Pennsylvania, Mr. Al Green of Texas, Mr. Shays, Mr. Murphy of 
 Connecticut, Mr. Dent, Ms. Lee, Mr. Renzi, Mr. Clay, Mr. Smith of New 
  Jersey, Mr. Lynch, and Mr. Hinojosa) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To establish the National Affordable Housing Trust Fund in the Treasury 
 of the United States to provide for the construction, rehabilitation, 
and preservation of decent, safe, and affordable housing for low-income 
                               families.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Affordable Housing Trust 
Fund Act of 2007''.

SEC. 2. NATIONAL AFFORDABLE HOUSING TRUST FUND.

    (a) In General.--Title II of the Cranston-Gonzalez National 
Affordable Housing Act (42 U.S.C. 12721 et seq.) is amended by adding 
at the end the following new subtitle:

          ``Subtitle G--National Affordable Housing Trust Fund

``SEC. 291. PURPOSES.

    ``The purposes of this subtitle are--
            ``(1) to address the national shortage of housing that is 
        affordable to low-income families by creating a permanently 
        appropriated fund, with dedicated sources of funding, to 
        finance additional housing activities, without supplanting 
        existing housing appropriations;
            ``(2) to enable rental housing to be built, for families 
        with the greatest economic need, in mixed-income settings and 
        in areas with the greatest economic opportunities;
            ``(3) to promote ownership of one-to-four family owner-
        occupied housing by low-income families; and
            ``(4) to construct, rehabilitate, and preserve at least 
        1,500,000 affordable dwelling units over the next decade.

``SEC. 292. TRUST FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the National Affordable 
Housing Trust Fund.
    ``(b) Deposits to Trust Fund.--The Trust Fund shall consist of--
            ``(1) any amounts of the Federal National Mortgage 
        Association and the Federal Home Loan Mortgage Corporation 
        transferred to the Trust Fund under title XIII of the Housing 
        and Community Development Act of 1992;
            ``(2) any amounts appropriated to the Trust Fund pursuant 
        to the authorization in the Expanding American Homeownership 
        Act of 2007, relating to the use of FHA savings for an 
        affordable housing grant fund; and
            ``(3) any amounts as are or may be appropriated, 
        transferred, or credited to such Fund under any other 
        provisions of law.
    ``(c) Expenditures From Trust Fund.--Amounts in the Trust Fund 
shall be available to the Secretary of Housing and Urban Development, 
and are hereby appropriated, for providing assistance under this 
subtitle.
    ``(d) Federal Assistance.--All assistance provided using amounts in 
the Trust Fund shall be considered to be Federal financial assistance.

``SEC. 293. ALLOCATIONS FOR STATES, INDIAN TRIBES, INSULAR AREAS, AND 
              PARTICIPATING LOCAL JURISDICTIONS.

    ``(a) Determination of Amount Available for Fiscal Year.--For 
fiscal year 2008 and for each fiscal year thereafter, the Secretary 
shall determine the total amount available from the Trust Fund pursuant 
to section 292(c) for assistance under this subtitle and shall use such 
amount to provide such assistance for such fiscal year.
    ``(b) Allocation.--For each such fiscal year, of such total amount 
available from the Trust Fund, the Secretary shall allocate for use 
under section 294--
            ``(1) 40 percent for States, Indian tribes, and insular 
        areas; and
            ``(2) 60 percent for participating local jurisdictions.

``SEC. 294. ASSISTANCE FROM TRUST FUND.

    ``(a) Affordable Housing Needs Formula.--
            ``(1) Establishment and factors.--The Secretary shall 
        establish a formula to allocate amounts made available for a 
        fiscal year for assistance under this subtitle among States, 
        all Indian tribes, insular areas, and participating local 
        jurisdictions based on the relative needs of such entities, for 
        funds to increase the supply of decent quality affordable 
        housing. The formula shall be based upon a comparison of the 
        following factors with respect to each State, Indian tribes, 
        each insular area, and each participating local jurisdiction:
                    ``(A) The ratio of the population of the State, 
                Indian tribes, insular area, or participating 
                jurisdiction, to the aggregate population of all 
                States, Indian tribes, insular areas, and participating 
                jurisdictions.
                    ``(B) The percentage of families in the 
                jurisdiction of the State, of Indian tribes, or of the 
                insular area or participating jurisdiction that live in 
                substandard housing.
                    ``(C) The percentage of families in the 
                jurisdiction of the State, of Indian tribes, or of the 
                insular area or participating jurisdiction that pay 
                more than 50 percent of their annual income for housing 
                costs.
                    ``(D) The percentage of persons in the jurisdiction 
                of the State, of Indian tribes, or of the insular area 
                or participating jurisdiction having an income at or 
                below the poverty line.
                    ``(E) The cost of constructing or carrying out 
                rehabilitation of housing in the jurisdiction of the 
                State, of Indian tribes, or of the insular area or 
                participating jurisdiction.
                    ``(F) The percentage of the population of the 
                State, of Indian tribes, or of the insular area or 
                participating jurisdiction that resides in counties 
                having extremely low vacancy rates.
                    ``(G) The percentage of housing stock in the 
                jurisdiction of the State, of Indian tribes, or of the 
                insular area or participating jurisdiction that is 
                extremely old housing.
                    ``(H) Any other factors that the Secretary 
                determines to be appropriate.
            ``(2) Failure to establish.--If, in any fiscal year 
        referred to in section 293(a), the regulations establishing the 
        formula required under paragraph (1) of this subsection have 
        not been issued by the date that the Secretary determines the 
        total amount available from the Trust Fund for assistance under 
        this subtitle for such fiscal year pursuant to section 292(c), 
        for purposes of such fiscal year--
                    ``(A) section 293(b), paragraphs (2) and (3) of 
                subsection (b) of this section, and subsection (c) of 
                this section shall not apply;
                    ``(B) the allocation for Indian tribes shall be 
                such amount as the Secretary shall establish; and
                    ``(C) the formula amount for each State, insular 
                area, or participating local jurisdiction shall be 
                determined by applying, for such State, insular area, 
                or participating local jurisdiction, the percentage 
                that is equal to the percentage of the total amounts 
                made available for such fiscal year for allocation 
                under subtitle A of this title (42 U.S.C. 12741 et 
                seq.) that are allocated in such year, pursuant to such 
                subtitle, to such State, insular area, or participating 
                local jurisdiction, respectively, and the allocation 
                for each State, insular area, or participating 
                jurisdiction, for purposes of subsection (e) shall, 
                except as provided in subsection (d), be the formula 
                amount for the State, insular area, or participating 
                jurisdiction, respectively.
    ``(b) Formula Amount.--
            ``(1) In general.--For each fiscal year referred to in 
        section 293(a), the Secretary shall determine the formula 
        amount under this subsection for each State, for Indian tribes, 
        for each insular area, and for each participating local 
        jurisdiction.
            ``(2) States, indian tribes, and insular areas.--The 
        formula amount for each State, for Indian tribes, and for each 
        insular area shall be the amount determined for such State, for 
        Indian tribes, 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 jurisdiction shall be the 
        amount determined for such participating local jurisdiction by 
        applying the formula 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 Director 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 1 percent of the total 
                amount allocated for such fiscal year under section 
                293(b)(1), the allocation for the State shall be 1 
                percent of the total amount allocated for such fiscal 
                year under section 293(b)(1).
                    ``(B) Formula amount.--If the formula amount 
                determined under subsection (b)(2) for the State for 
                the fiscal year is 1 percent or more of the total 
                amount allocated for such fiscal year under section 
                293(b)(1), the allocation for the State shall be the 
                formula amount for the State, except that the Secretary 
                shall reduce such formula amounts for all States whose 
                allocations are determined under this subparagraph on a 
                pro rata basis by the amount necessary 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.
            ``(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 subsection (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 of less than $1,000,000, the allocation shall be 
        $0; and
            ``(2) the allocation 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 subsection (f), make a grant to each State, insular 
area, and participating local jurisdiction in the amount of the 
allocation 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 contribution 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 resources.--To the 
                extent that such contributed amounts are derived from 
                State, local, or private resources, one dollar for 
                every two dollars of such grant amounts.
                    ``(B) Federal amounts.--To the extent that such 
                contributed amounts are derived from State- or locally-
                controlled amounts from Federal assistance, or from 
                amounts made available under the affordable housing 
                program of a Federal Home Loan Bank pursuant to section 
                10(j) of the Federal Home Loan Bank Act (12 U.S.C. 
                1430(j)), one dollar for every dollar of such grant 
                amounts.
        Nothing in this paragraph may be construed to prevent a grantee 
        or recipient from complying with this paragraph only by 
        contributions in accordance with subparagraph (A), only by 
        contributions in accordance 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 respect 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 requirements of paragraph (1), amounts 
        that a grantee, recipient, 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 binding commitment for 
        such contribution as the Secretary shall require, shall be 
        considered contributions to eligible activities.
            ``(4) Reduction or waiver for certain activities.--With 
        respect to Trust Fund grant amounts made available for a fiscal 
        year, the Secretary shall reduce or waive the amount of 
        contributions 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 variance from zoning laws or 
        other waiver of regulatory requirements was approved by the 
        local jurisdiction. Such reduction may be implemented in the 
        year following the year in which such activities are funded 
        with Trust Fund grant amounts.
    ``(g) Competitive Grants for Indian Tribes.--For each fiscal year 
referred to in section 293(a), the Secretary 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 Insufficient 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 submitting 
                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 availability 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 allocation.--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 
                requirements 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 activities before the expiration of 
                the 24-month period beginning upon the date of the 
                publication 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 notifies 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 determines that the amounts 
        described in paragraph (1) shall be available for grants under 
        this subsection, the Secretary shall cause to be published in 
        the Federal Register a notice that such amounts shall be so 
        available.
            ``(3) Applications.--The Secretary shall provide 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 
        publication of a notice of funding availability under paragraph 
        (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 include 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 assistance.--
                    ``(A) Award.--Subject only to the absence of 
                applications meeting the requirements of paragraph (3), 
                upon the expiration of the period referred to in such 
                paragraph, the Secretary 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, insular 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 distribution 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 accordance with 
        section 296;
            ``(2) is based on priority housing needs, as determined by 
        the grantee; and
            ``(3) is consistent with the comprehensive housing 
        affordability strategy under section 105 (42 U.S.C. 12705) or 
        any applicable consolidated submission used for purposes of 
        applying for other community planning and development and 
        housing assistance 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 opportunity 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 eligible 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 activities, including a requirement that each such 
        application include--
                    ``(A) a description of the eligible activities to 
                be conducted using such assistance; and
                    ``(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 requirements 
                        under section 296(c) and the affordable housing 
                        requirements under section 297;
                            ``(ii) section 808(d) of the Fair Housing 
                        Act (relating to the obligation to 
                        affirmatively further fair housing); and
                            ``(iii) section 504 of the Rehabilitation 
                        Act of 1973 (relating to prohibition of 
                        discrimination on the basis of disability).
            ``(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 allocation plan 
                shall set forth the factors for consideration in 
                selecting among applicants that meet the application 
                requirements established pursuant 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 extent 
                        to which the activity addresses housing needs 
                        identified in the allocation plan of the 
                        grantee and the applicable comprehensive 
                        housing affordability strategy or consolidated 
                        submission referred to in subsection (a)(3);
                            ``(ii) the ability of the applicant to 
                        obligate grant amounts for the proposed 
                        eligible activities and to undertake such 
                        activities in a timely manner;
                            ``(iii) the amount of assistance leveraged 
                        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 
                        housing to be assisted with such assistance;
                            ``(iv) the extent of local assistance that 
                        will be provided in carrying out the eligible 
                        activities, including financial assistance;
                            ``(v) the degree to which the project in 
                        which the affordable housing will be located 
                        will have residents of various incomes;
                            ``(vi) the extent of employment and other 
                        economic opportunities for low-income families 
                        in the area in which the housing will be 
                        located;
                            ``(vii) the extent to which the applicant 
                        demonstrates the ability to maintain dwelling 
                        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 Housing Act of 1937 (42 
                        U.S.C. 1437f), State or local assistance, 
                        programs to increase tenant income, cross-
                        subsidization, and any other resources;
                            ``(viii) 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;
                            ``(ix) the extent to which the percentage 
                        of the housing located in such county that is 
                        extremely old housing exceeds 35 percent;
                            ``(x) the extent to which the housing 
                        assisted with the grant amounts will be 
                        accessible to persons with disabilities;
                            ``(xi) the extent to which the applicant 
                        demonstrates that the affordable housing 
                        assisted with the grant amounts will be located 
                        in proximity to public transportation, job 
                        opportunities, child care, and community 
                        revitalization projects;
                            ``(xii) the extent to which the applicant 
                        has provided that assistance from grant amounts 
                        will be used for eligible activities relating 
                        to housing located in census tracts in which 
                        the number of families having incomes less than 
                        the poverty line is less than 20 percent; and
                            ``(xiii) 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, development, and operation of 
                        affordable housing, as the Secretary shall by 
                        regulation provide.
            ``(3) Performance goals, benchmarks, and timetables.--The 
        allocation plan shall include performance goals, benchmarks, 
        and timetables for the grantee for the conducting of eligible 
        activities with Trust Fund grant amounts that comply with 
        requirements and standards for such goals, benchmarks, and 
        timetables as the Secretary shall, by regulation, establish.
    ``(d) Review and Approval by Secretary.--
            ``(1) Submission.--A grantee described in subsection (a) 
        shall submit an allocation plan for the fiscal year for which 
        the grant is made to the Secretary not later than the 
        expiration of the 6-month period beginning upon the notice of 
        funding availability under section 294(b)(4) for such fiscal 
        year amounts.
            ``(2) Review and approval or disapproval.--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 Secretary may 
        disapprove an allocation plan only if the plan fails to comply 
        with requirements of this section 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 respect only to 
        fiscal year 2008, the Secretary may extend 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 Requirements.--Each grantee 
shall distribute Trust Fund grant amounts of the grantee to eligible 
recipients for use in accordance with this section. Trust Fund grant 
amounts of a grantee may be used, or committed for use, only for 
eligible 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 allocation plan of the grantee 
        under section 295;
            ``(3) are selected for funding by the grantee in accordance 
        with the process and criteria for such selection established 
        pursuant to section 295(c)(2); and
            ``(4) comply with the targeting requirements under 
        subsection (c) of this section and the affordable housing 
        requirements under section 297.
    ``(b) Eligible Recipients.--Trust Fund grant amounts of a grantee 
may be provided only to an organization, agency, or other entity 
(including a for-profit entity, a nonprofit entity, and a faith-based 
organization) that--
            ``(1) demonstrates the experience, ability, and capacity 
        (including financial capacity) to undertake, comply, and manage 
        the eligible activity;
            ``(2) demonstrates its familiarly with the requirements 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 
        eligible activities that are engaged in by the recipient and 
        funded with such grant amounts.
    ``(c) Targeting Requirements.--The targeting requirements under 
this subsection are as follows:
            ``(1) Requirement of use of all amounts for affordable 
        housing for low-income families.--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 
        benefit 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 determined 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 located, as 
                determined by the Secretary with adjustments for 
                smaller and larger families.
            ``(2) Use of 75 percent for affordable housing for 
        extremely low-income families.--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 
        affordable housing that are for the benefit only of families 
        whose incomes do not exceed the higher of--
                    ``(A) 30 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; and
                    ``(B) the poverty line (as such term is defined 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 eligible 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 consideration 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) 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 
        requirements under this subsection--
                    ``(A) all such amounts shall be used only for 
                eligible activities relating to affordable housing that 
                are for the benefit only of families whose incomes do 
                not exceed the amount described in paragraph (2) of 
                this subsection; and
                    ``(B) not less than 40 percent of such amounts 
                shall be used only for eligible activities relating to 
                affordable housing that is for use only by families 
                whose incomes do not exceed the greater of the amounts 
                described in paragraphs (2) and (3) of this subsection.
    ``(d) Use for Rural Areas.--Of the Trust Fund grant amounts for any 
fiscal year for any grantee that is a State or participating 
jurisdiction that includes any rural areas, the State or participating 
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 limitations 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)), as adjusted annually, and established by number of 
bedrooms, market area, and eligible activity.
    ``(f) Forms of Assistance.--
            ``(1) In general.--Assistance may be distributed 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 assistance 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 accordance with the allocation plan under section 
        295 for the grantee for the fiscal year in which such 
        repayments 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, coordinate 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 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 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 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 provided 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 carrying out the program 
        required under this subtitle 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 such Act.
    ``(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 regarding their residences;
            ``(2) laws requiring public participation, including laws 
        relating to Consolidated Plans, Qualified Allocation Plans, and 
        Public Housing Agency Plans; and
            ``(3) fair housing laws and laws regarding accessibility 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 cooperative 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 affordable 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 requirements:
            ``(1) Rents.--The dwelling unit bears a rent not greater 
        than the lesser of--
                    ``(A) the existing fair market rental established 
                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 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 unusually high or low 
                family incomes.
            ``(2) Tenant rent contribution.--The contribution toward 
        rent by the family residing in the dwelling unit will not 
        exceed 30 percent of the adjusted 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 refused 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 located in 
                a project in which not more than 50 percent of the 
                rental units in the project that receive assistance 
                under this subtitle and are not previously occupied may 
                be rented initially to families with incomes described 
                in section 295(c)(2), as determined at a reasonable 
                time before occupancy.
                    ``(B) 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 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 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 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))), 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), except that 
                any reference in such section 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 resale 
                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 purchase, completed a program of 
        counseling with respect to the responsibilities and financial 
        management involved in homeownership that is approved by the 
        Secretary; 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 
                areas, as otherwise required under this paragraph, 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 program of financial literacy 
                and education to promote an understanding of consumer, 
                economic, and personal finance issues and concepts, 
                including 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; and

``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 reduce 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 Recipients.--
            ``(1) Recipients.--
                    ``(A) Tracking of funds.--The Secretary 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 
                                financial and project reporting, record 
                                retention, and audit requirements for 
                                the duration of the grant to the 
                                recipient 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 necessary 
                                to ensure appropriate grant 
                                administration and compliance.
                    ``(B) Misuse of funds.--
                            ``(i) Reimbursement requirement.--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 manner that is materially in 
                        violation of this subtitle, the regulations 
                        issued under this subtitle, or any requirements 
                        or conditions under which such amounts were 
                        provided, the grantee shall require that, 
                        within 12 months after the determination of 
                        such misuse, the recipient 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 uncommitted for use. The remedies under this 
                        clause are in addition to any other remedies 
                        that may be available under law.
                            ``(ii) Determination.--A determination 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 
                                notification of the determination to 
                                the Secretary for review, in the 
                                discretion of the Secretary, of the 
                                determination; and
                                    ``(cc) the Secretary does not 
                                subsequently 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 
                                funded under this subtitle during such 
                                year with the Trust Fund grant amounts 
                                of the grantee; and
                                    ``(II) the manner in which the 
                                grantee complied during such fiscal 
                                year with the allocation plan 
                                established pursuant to section 295 for 
                                the grantee.
                            ``(ii) Public availability.--The Secretary 
                        shall make such reports pursuant to this 
                        subparagraph publicly available.
                    ``(B) Misuse of funds.--If the Secretary 
                determines, after reasonable notice and opportunity 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 subtitle;
                            ``(iii) limit the availability of 
                        assistance 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.

``SEC. 299. DEFINITIONS.

    ``For purposes of this subtitle, the following definitions shall 
apply:
            ``(1) Eligible activities.--The term `eligible activities' 
        means activities relating to the construction, 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, including 
                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 assisted 
                        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; and
                    ``(F) providing incentives to maintain existing 
                housing (including manufactured housing) as affordable 
                housing and to establish or extend any low-income 
                affordability restrictions for such housing, including 
                covering capital expenditures and costs of establishing 
                community land trusts to provide sites for manufactured 
                housing provided such incentives;
            ``(2) Eligible recipient.--The term `eligible recipient' 
        means an entity that meets the requirements 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 United States Housing Act of 
        1937 (42 U.S.C. 1437a(b)).
            ``(6) Fiscal distress; severe fiscal distress.--The terms 
        `fiscal distress' and `severe fiscal distress' have the 
        meanings given such terms in section 220(d).
            ``(7) Grantee.--The term `grantee' means--
                    ``(A) a State, insular area, or participating local 
                jurisdiction for which a grant is made under section 
                294(e);
                    ``(B) an Indian tribe for which a grant is made 
                under section 294(g); or
                    ``(C) a nonprofit or public entity for which a 
                grant is made under section 294(i).
            ``(8) Indian tribe.--The term `Indian tribe' means a 
        federally recognized Indian tribe.
            ``(9) Insular area.--The term `insular area' has the 
        meaning given such term in section 104.
            ``(10) Participating local jurisdiction.--The term 
        `participating local jurisdiction' means, with respect to a 
        fiscal year--
                    ``(A) any unit of general local government (as such 
                term is defined in section 104 (42 U.S.C. 12704) that 
                qualifies as a participating jurisdiction under section 
                216 (42 U.S.C. 12746) for such fiscal year; and
                    ``(B) at the option of such a consortium, any 
                consortium of units of general local governments that 
                is designated pursuant to section 216 (42 U.S.C. 12746) 
                as a participating jurisdiction for purposes of title 
                II.
            ``(11) Poverty line.--The term `poverty line' has the 
        meaning given such term in section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981, including any revision required by 
        such section.
            ``(12) Recipient.--The term `recipient' means an entity 
        that receives assistance from a grantee, pursuant to section 
        296(a), from Trust Fund amounts of the grantee.
            ``(13) Rural area.--The term `rural area' has the meaning 
        given such term in section 520 of the Housing Act of 1949 (42 
        U.S.C. 1490).
            ``(14) Secretary.--The term `Secretary' means the Secretary 
        of Housing and Urban Development.
            ``(15) State.--The term `State' has the meaning given such 
        term in section 104.
            ``(16) Trust fund.--The term `Trust Fund' means the 
        National Affordable Housing Trust Fund established under 
        section 292.
            ``(17) Trust fund grant amounts.--The term `Trust Fund 
        grant amounts' means amounts from the Trust Fund that are 
        provided to a grantee pursuant to subsection (e), (g), or (i) 
        of section 294.

``SEC. 300. INAPPLICABILITY OF HOME PROVISIONS.

    ``Except as specifically provided otherwise in this subtitle, no 
requirement under, or provision of, title I or subtitles A through F of 
this title shall apply to assistance provided under this subtitle.

``SEC. 301. REGULATIONS.

    ``Not later than 6 months after the date of enactment of the 
National Affordable Housing Trust Fund Act of 2007, the Secretary of 
Housing and Urban Development shall promulgate regulations to carry out 
this subtitle, which shall include regulations establishing the 
affordable housing needs formula in accordance with section 294(a).''.
    (b) Conforming Amendment.--Section 201 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12701 note) is amended by 
striking ``This title'' and inserting ``Subtitles A through F of this 
title''.
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