House Report 110-362 - NATIONAL AFFORDABLE HOUSING TRUST FUND ACT OF 2007

[House Report 110-362]
[From the U.S. Government Publishing Office]

110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-362

======================================================================

NATIONAL AFFORDABLE HOUSING TRUST FUND ACT OF 2007

_______

October 2, 2007.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Frank of Massachusetts, from the Committee on Financial Services,
submitted the following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 2895]

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred the
bill (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, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.

CONTENTS

Page
Amendment........................................................ 02
Purpose and Summary.............................................. 15
Background and Need for Legislation.............................. 16
Hearings......................................................... 21
Committee Consideration.......................................... 22
Committee Votes.................................................. 22
Committee Oversight Findings..................................... 27
Performance Goals and Objectives................................. 27
New Budget Authority, Entitlement Authority, and Tax Expenditures 27
Committee Cost Estimate.......................................... 27
Congressional Budget Office Estimate............................. 27
Federal Mandates Statement....................................... 30
Advisory Committee Statement..................................... 30
Constitutional Authority Statement............................... 30
Applicability to Legislative Branch.............................. 30
Earmark Identification........................................... 31
Section-by-Section Analysis of the Legislation................... 31
Changes in Existing Law Made by the Bill, as Reported............ 35
Dissenting Views................................................. 57

Amendment

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

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 or existing State and local
funding for affordable housing;
``(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.
``(e) Conditions on Use of FHA Savings.--
``(1) Use.--For each fiscal year, no funds may be made
available under paragraph (2) of subsection (b) unless the
amount equal to the net increase for such fiscal year in the
negative credit subsidy for the mortgage insurance programs
under title II of the National Housing Act resulting from the
Expanding American Homeownership Act of 2007, and the
amendments made by such Act, is first made available for the
following purposes in the following amounts:
``(A) Single family housing mortgage insurance.--For
each fiscal year, for costs (as such term is defined in
section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a)) of mortgage insurance provided pursuant
to section 203(b) of the National Housing Act (12
U.S.C. 1709(b)), the additional amount (not including
any costs of such mortgage insurance resulting from
this Act or the amendments made by this Act), if any,
necessary to ensure that the credit subsidy cost of
such mortgage insurance for such fiscal year is $0.
``(B) Housing counseling.--For each of fiscal years
2008 through 2012, the amount needed to increase
funding, for the housing counseling program under
section 106 of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x), in connection with homebuyers
and homeowners with mortgages insured under title II of
the National Housing Act, from the amount appropriated
for the preceding fiscal year to $100,000,000.
``(C) Mortgage insurance technology, procedures,
processes, program performance, and salaries.--For each
of fiscal years 2008 through 2012, $25,000,000 for
increasing funding for the purpose of improving
technology, procedures, processes, and program
performance, and salaries in connection with the
mortgage insurance programs under title II of the
National Housing Act.
``(2) Exclusion of earnings from the single family mortgage
insurance program.--No funds under paragraph (2) of subsection
(b) for a fiscal year may be derived from the negative credit
subsidy cost for such fiscal year, if any, for mortgage
insurance provided pursuant to section 203(b) of the National
Housing Act.
``(3) Certification.--No funds may be made available under
paragraph (2) of subsection (b) for any fiscal year unless the
Secretary of Housing and Urban Development has, by rule making
in accordance with section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such
section), made a determination that premiums being, or to be,
charged during such fiscal year for mortgage insurance under
title II of the National Housing Act are established at the
minimum amount sufficient to comply with the requirements of
section 205(f) of such Act (relating to required capital ratio
for the Mutual Mortgage Insurance Fund) and ensure the safety
and soundness of the other mortgage insurance funds under such
Act, and any negative credit subsidy for such fiscal year
resulting from such mortgage insurance programs adequately
ensures the efficient delivery and availability of such
programs.
``(4) Limitation on mortgage insurance premium increases.--
Notwithstanding any other provision of law--
``(A) the premiums charged for mortgage insurance
under any program under the National Housing Act may
not be increased above the premium amounts in effect
under such program on October 1, 2006, unless the
Secretary of Housing and Urban Development determines
that, absent such increase, insurance of additional
mortgages under such program would, under the Federal
Credit Reform Act of 1990, require the appropriation of
new budget authority to cover the costs (as such term
is defined in section 502 of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661a) of such insurance; and
``(B) a premium increase pursuant to paragraph (1)
may be made only by rule making in accordance with the
procedures under section 553 of title 5, United States
Code (notwithstanding subsections (a)(2), (b)(B), and
(d)(3) of such section).

``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) For the jurisdiction of a State, of Indian
tribes, or of an insular area or participating
jurisdiction that has an extremely low percentage of
affordable rental housing, the extent to which the
State, Indian tribes, or the insular area or
participating jurisdiction has in the preceding fiscal
year increased the percentage of rental housing within
its jurisdiction that is affordable housing.
``(I) 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), or
there has been enacted before such date a joint resolution
expressly disapproving the use of the formula required under
paragraph (1) and submitted to the Congress pursuant to
paragraph (3), 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.
``(3) Submission to congress.--Notwithstanding any other
provision of this subtitle, any formula established by the
Secretary pursuant to this subsection shall be submitted to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate not less than 120 days before application of the formula
for purposes of determining formula amounts under subsection
(b) for a fiscal year. Such submission shall be accompanied by
a detailed explanation of the factors under the formula and
anticipated effects of the formula.
``(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 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 the formula amount for the State.
``(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 $750,000, the allocation shall be
$0, except that if the Secretary finds that the jurisdiction
has demonstrated a capacity to carry out provisions of this
subtitle and the State in which such jurisdiction is located
has authorized 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 jurisdiction's own sources
available for use by the jurisdiction in accordance with this
subtitle, the jurisdiction's allocation for a fiscal year shall
be the formula amount for the jurisdiction; and
``(2) in the case of any jurisdiction whose allocation is $0
by operation of paragraph (1), 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, 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 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)), 25 percent 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. Amounts to be
considered eligible contributions under this paragraph shall
not exceed 33 percent of the total cost of the eligible
activity.
``(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.
``(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 carried out in such
area.
``(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, including priority
housing needs in rural areas, 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 experience of the applicant,
including its principals, in carrying out
projects similar to the proposed eligible
activity;
``(iii) the ability of the applicant to
obligate grant amounts for the proposed
eligible activities and to undertake such
activities 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
housing 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, differences 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 located
will have residents of various incomes;
``(viii) the extent of employment and other
economic opportunities for low-income families
in the area in which the housing will be
located;
``(ix) 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;
``(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 percentage 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
accessible to persons with disabilities;
``(xiii) 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;
``(xiv) 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
``(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, development, and operation of
affordable housing, as the Secretary shall by
regulation provide.
A grantee may allocate a portion of funds under this
section for use by such grantee for eligible activities
pursuant to the selection process under subparagraph
(A).
``(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, a faith-based organization, a
community development financial institution, a community development
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 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) Use of 10 percent for affordable housing for families
above 50 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 relating
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
requirements under this subsection, 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 60 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.
``(6) Review of targeting requirements.--The Secretary shall
assess the need for, and the appropriateness 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 expiration
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 adjustment of the targeting requirements in
paragraphs (1) through (4).
``(d) Use for Rural Areas.--Of the Trust Fund grant amounts for any
fiscal year for any grantee that is a State or participating local
jurisdiction that includes any rural areas, the State or participating
local jurisdiction shall use a portion for eligible activities located
in rural areas that is proportionate to the identified need for such
activities in such rural areas.
``(e) Cost Limits.--The Secretary shall establish 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 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 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
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
percent or the percentage of such families occupying
the project at the time funds are awarded for such
project.
``(C) Exceptions.--Subparagraph (A) shall not apply
in the case of a project having 25 or fewer dwelling
units that is--
``(i) located in a census tract in which the
number of families having incomes less than the
poverty line is less than 20 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.
``(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-occupied 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 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--
``(I) such recipient shall be
ineligible 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
recipient only pursuant to application
by the recipient for such reinstatement
and the recipient may not apply to the
Secretary for such reinstatement during
the 12-month period, or the 10-year
period in the case of a second or
subsequent such determination,
beginning upon such determination; and
``(II) 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;
``(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; and
``(G) in the case of affordable one- to four-family
owner-occupied housing, downpayment assistance, closing
cost assistance, and assistance for interest rate buy-
downs.
``(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 grant 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. 299A. 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. 299B. 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''.

Purpose and Summary

H.R. 2895, the ``National Affordable Housing Trust Fund Act
of 2007'' establishes a National Affordable Housing Trust Fund
(``Trust Fund'') for the construction, rehabilitation, and
preservation of affordable housing, including both rental
housing and homeownership. The Trust Fund shall consist of
dedicated sources of funding to carry out the Trust Fund's
eligible housing activities. The purpose of the Trust Fund is
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, and to promote
homeownership for low-income families.
The goal of the bill is to produce 1,500,000 units of
affordable housing over the next decade. The bill establishes a
funding formula for distribution of funds to states,
localities, insular areas, and federally recognized Indian
Tribes. States, localities and insular areas in turn make funds
available under a competitive selection process to qualified
recipients, for their use for affordable housing activities.
HUD will distribute funds to Indian Tribes under a competitive
selection process.

Background and Need for Legislation

This nation's affordable housing crisis is well documented.
It takes many forms, including excessive housing cost burdens
for both owner occupied homes and for rental units, the lack of
an adequate supply of affordable housing in many communities,
deterioration of the housing stock, particularly in older
communities, overcrowding, and homelessness. These affordable
housing problems are widespread, occurring in different regions
of the country, including in both urban and rural communities.
It affects both the working class and the unemployed, and
presents particular challenges for families with children,
senior citizens, disabled persons, and veterans.
The Joint Center for Housing Studies of Harvard University
State of the Nation's Housing 2007 report states that in just
one year, the number of households with housing cost burdens in
excess of 30 percent of income climbed by 2.3 million, hitting
a record 37.3 million in 2005. The number of American
households paying more than half of their incomes on housing
increased to 17 million in 2005, with one in seven U.S.
households being ``severely housing cost burdened'' in that
year. Nearly one-half of low-income households, a total of 8.2
million renters and 5 million homeowners, have severe cost
burdens. The study indicates that about 750,000 persons are
homeless on any given night. And housing assistance as a share
of total non defense discretionary spending dropped from 10.2
percent in 1998 to 7.7 percent in 2006.
One effective tool in addressing the affordable housing
crisis is state and local housing trust funds. These trust
funds typically utilize a dedicated source of revenue.
According to the Housing Trust Fund Progress Report 2007
produced by the Center for Community Change, the number of
state and local housing trust funds has grown from 432 to more
than 600 in just five years. Public revenue collected by these
funds now reaches $1.6 billion each year. These monies support,
among other things, new construction, preservation of existing
housing, home ownership assistance, emergency housing repairs,
homeless shelters, and housing-related services.
H.R. 2895 seeks to build on the successes of state and
local trust funds. It establishes in the Treasury a national
affordable housing trust fund, with dedicated sources of
revenue for the production and preservation of affordable
housing for people with the most serious housing problems. The
Trust Fund is designed to support additional housing
activities--not to supplant existing federal, state or local
appropriations or other existing funding sources for affordable
housing activities. The sources of funding for the Trust Fund
include monies from H.R. 1427 [the GSE Affordable Housing
Fund], funds from net available credit subsidy increases
resulting from H.R. 1852 [the ``Expanding American
Homeownership Act'', a bill to modernize the Federal Housing
Administration (FHA)], and any other sources of funds that are
subsequently identified. A description of these two bills and
their trust fund provisions follows.
GSE Affordable Housing Fund. H.R. 1427 passed the House on
May 22, 2007 by a recorded vote of 313 to 106. The bill
provides for contributions by Fannie Mae and Freddie Mac
[Government Sponsored Enterprises (GSEs)] for each of the years
from 2007 to 2011 in amounts equal to 1.2 basis points of each
of these two GSE's average total mortgage portfolio in the
preceding year. CBO estimates that combined contributions over
the next five years would average $600 million a year, with a
portion of these contributions used to help pay the federal
government's obligations under REFCORP bonds, and all remaining
funds being used for affordable housing fund purposes
authorized under the bill. Funds in 2007 are reserved for use
exclusively in Louisiana and Mississippi. The bill provides
that if there is a subsequently enacted bill establishing an
affordable housing trust fund, the GSE contributions (net,
after required REFCORP contributions) made in 2008 through 2011
shall be transferred to such subsequently adopted housing trust
fund.
FHA Funds from H.R. 1852. H.R. 1852 passed the House on
September 18, 2007 by a recorded vote of 348 to 72. Section 30
of the bill, as amended, authorizes appropriations for a number
of different purposes from the amount equal each year to the
increase in negative credit subsidy created by the bill's
provisions. First priority for uses of such funds under the
bill are (a) the amount, if any, needed to avoid a credit
subsidy appropriation for FHA's single family loan program, (b)
$58 million a year for funding increases for housing counseling
[to raise the current level of $42 million a year to $100
million a year], and (c) $25 million a year to increase funding
for FHA technologies and procedures. The bill provides that any
amounts related to net credit subsidy increases after funding
these priority areas are authorized for use for affordable
housing fund activities. In the absence of this authorization,
FHA negative credit subsidies would otherwise be used for
general fund purposes as an offset against discretionary
spending.
Additionally, no funds from the FHA 203(b) single family
loan program may be used for affordable housing fund
activities. And, no funds may be used for this purpose unless
HUD, by rule, makes a determination that FHA premiums being
charged that year are sufficient to comply with the FHA capital
ratio requirement and are also sufficient to ensure the safety
and soundness of other FHA mortgage insurance funds. Finally,
Section 31 of the bill, as amended, prohibits HUD from
increasing FHA premiums for any FHA loan program unless HUD
determines that such program would require a credit subsidy
appropriation absent such a premium increase. Thus, the bill
provides more protections than under current law against
unnecessary increases in FHA premiums and against diversion of
FHA funds for non-housing purposes.
H.R. 2895 was amended in Committee to incorporate all of
these limitations from H.R. 1852 regarding use of FHA funds for
Trust Fund purposes.
The Congressional Budget Office estimates that $300 million
a year would be authorized under H.R. 1852 for affordable
housing fund purposes. This reflects net credit subsidies
available after all other priority uses are first funded. It is
these funds that H.R. 2895 would transfer for use under the
bill for affordable housing trust fund purposes.
Previous Congressional Action. The Committee notes that in
past Congresses, there has been Committee action on affordable
housing trust fund legislation. On July 12, 2002, the Financial
Services Committee reported out by voice vote H.R. 3995, the
``Housing Affordability for America Act of 2002.'' H.R. 3995
included Section 101, ``Matching Grants for State and Local
Affordable Housing Trust Funds,'' which was an amendment
adopted during Committee consideration. Section 101 authorized
such sums as may be necessary for FY 2003 and beyond for
matching grants to states and local governments that have
established affordable housing trust funds. Seventy five
percent of such federal funds were targeted exclusively for
rental housing for extremely low income families (below 30
percent of local area median income), with a requirement that
the remaining funds be used for low income families (below 80
percent of area median income). These targeting requirements
closely track the targeting requirements in H.R. 2895. Section
101 also included provisions similar to H.R. 2895 with respect
to eligible activities, affordability requirements, and
requirements of grantees to establish allocation plans for fund
use. The House of Representatives took no further action on
H.R. 3995 in that Congress.
Section 101 of H.R. 3995 was similar to H.R. 2349, the
National Affordable Trust Fund Act introduced in the 107th
Congress by Rep. Bernie Sanders (199 co-sponsors). The major
difference between the two versions was that H.R. 2349 used as
its funding source all new FHA revenues each year from the FHA
Mutual Mortgage Insurance Fund (MMIF) which are not necessary
to maintain the statutory MMIF capital ratio (compared to the
``such sums'' language in Section 101 of H.R. 3995). The next
Congress, Rep. Sanders re-introduced a similar housing trust
fund bill, H.R. 1102 (214 cosponsors).
Provisions in H.R. 2895. H.R. 2895 allocates 60 percent of
Trust Fund monies to participating local jurisdictions (PLJs)
and 40 percent to States, Indian Tribes and insular areas. HUD
is required to develop a formula to allocate these funds based
on a number of factors, including population, housing
affordability, percentage of very and extremely low income
families, cost of construction and rehabilitation, and the
extent of substandard and aging housing. The bill requires that
HUD submit the Trust Fund formula to Congress not less than 120
before the application of the formula. The bill also provides
that in the event HUD has not developed this formula in time in
any year for distribution of the funds to grantees, HUD shall
use the existing HOME formula as a fallback, default formula.
Funds available under the formula for federally recognized
Indian tribes shall be distributed by HUD under a competitive
selection process. It is expected that HUD will utilize a
process similar to the process for competitive grants for CDBG
funds which are annually set aside for Indian Tribes.
The Committee also believes that there should be a minimum
threshold grant amount for localities receiving funds.
Therefore, the bill provides that in any year in which the
total Trust Fund amount available nationwide is less than $2
billion, the minimum amount to be distributed to participating
local jurisdictions is $750,000. The funds that would otherwise
go to participating local jurisdictions that don't meet this
minimum threshold would revert to the state in which such
jurisdiction is located, to be distributed statewide, including
being available for use in that jurisdiction.
The Committee believes that it is important that PLJs,
States, Indian Tribes and insular areas (grantees) leverage
their Trust Fund monies. Therefore the bill requires that Trust
Fund grantees provide matching funds from federal, state, local
or private sources. H.R. 2895 as amended in Committee requires
the same amount of matching funds that is required by the HOME
program (25 percent)--except it also permits a lower match
level of 12.5 percent if state, local, or private resources are
used to meet the match, in order to incentivize the use of
state and local trust funds and private resources. The
Committee recognizes that the provision of certain housing
related services to residents are an important source of
funding for affordable housing projects, and therefore these
services may under certain circumstances, qualify as matching
funds. The bill also provides for a waiver of the matching
funds requirement in Presidentially declared disaster areas and
permits the reduction or waiver of the match in areas
experiencing fiscal distress. Trust Fund monies that are not
matched, or are uncommitted or unused by certain time deadlines
are to be reallocated in a timely manner.
Activities funded by Trust Fund monies should be well
planned and part of an overall and established affordable
housing development plan. Therefore, H.R. 2895 requires that
all grantees other than Indian Tribes submit an allocation plan
for each fiscal year, which is subject to approval by HUD, and
must be consistent with the grantee's Consolidated Plan. The
allocation plan should be based on priority housing needs in
both urban and rural areas and have geographic diversity. In
selecting eligible recipients of Trust Fund monies for eligible
housing activities, the grantee should consider a variety of
factors, including the ability to leverage funds from other
sources, the cost per unit for the proposal, and the extent to
which rental housing projects are affordable, especially for
extremely low income families. Both grantees and recipients are
held accountable for the appropriate use of Trust Fund monies
and as such the allocation plan must set out the process for
the grantee to select eligible activities and include
performance goals, benchmarks, and timetables and be submitted
to HUD for review and approval. The bill does not require
allocation plans to be developed by those Indian tribes which
receive funds, since unlike states, PLJs, and insular areas
which receive funds by formula and subsequently make them
available through competitive grants to recipients, the funds
going to the tribes are already awarded by competitive grant,
under a process to be established by HUD.
The Committee recognizes that many different types of
organizations play an important role in developing and
preserving affordable housing. Therefore, grantees can make
funds available to a wide range of eligible recipients, which
can include any organization, agency, or other entity,
including for-profits, nonprofits, and faith-based
organizations, that have demonstrated the experience and the
capacity to carry out the proposed activity in the fund
application. Community development financial institutions,
community development corporations, and state and local trust
funds are also eligible fund recipients. Moreover, a grantee
can make funds available to itself for eligible uses, provided
this is done pursuant to its fund selection process.
Although the Committee understands that the affordable
housing crisis affects persons at many different income areas,
the lack of affordable housing is an extreme problem for low
income families (those below 80 percent of local area median
income) and particularly for extremely low income families
(those below 30 percent of local area median income). HUD's
most recent biannual report to Congress on the nation's
affordable housing documents the unmet housing needs among the
nation's very low income renters. The number of households with
``worst case housing needs'' jumped from 5.18 million in 2003,
the year covered in the last report, to nearly 6 million in
2005, a 16 percent increase. HUD defines households with
``worst case needs'' as unassisted renters with incomes below
50 percent of area median income who live in substandard
housing and/or pay more than half of their income for housing.
Unassisted renters are renters who do not receive any housing
aid.
Given these housing needs, all Trust Fund monies must be
used for the benefit of low income families (except that this
income ceiling is reduced to 60 percent of local median income
if annual funding in any year is less than $2 billion). In
addition, at least 75 percent of funds must go to extremely
low-income families, defined as families below the higher of 30
percent of the local area median income or the national poverty
level for a family of comparable size. In addition, at least 30
percent of funds must go to families whose incomes qualify them
for Social Security Income (SSI) benefits. Finally, at least 10
percent of funds must go to families with incomes over 50
percent of the local area median income. In recognition of the
affordable housing needs in rural areas, States and PLJ must
use a portion of Trust Fund monies for eligible activities
located in rural areas that is proportionate to the identified
need for such activities in such rural areas.
Trust Fund assistance may be distributed in the form of
capital grants, noninterest-bearing or low-interest loans or
advances, deferred payment loans, guarantees, and loan loss
reserves. In the case of homeownership assistance, funds may
take the form of down payment assistance, closing cost
assistance, and assistance for interest rate buy-downs. Funds
can be used for several purposes, including the construction of
new housing, the rehabilitation of existing housing, and the
acquisition of real property. Trust Fund monies may be used for
preservation incentives, such as the costs of providing sites
for manufactured housing and establishing community land
trusts. The Committee understands that one of the difficulties
in preserving affordable housing is the high level of operating
costs in relation to income. Therefore Trust Fund monies may be
used in limited amounts for project based rental assistance,
project operating reserves and accounts, in order to facilitate
affordability for extremely low income families.
H.R. 2895 requires all housing assistance provided under
the bill be ``affordable.'' The bill further defines affordable
rental housing as a unit that bears a rent not greater than the
lesser of the existing fair market rental rate and 30 percent
of the adjusted income of a family whose income equals 65
percent of the median income for the area. The tenant rent
contribution cannot exceed 30 percent of that family's adjusted
family income. The Committee supports mixed income developments
for the variety of benefits that it provides to both residents
and the community. To help avoid the concentration of lower
income families in housing projects, the bill provides, with
certain specified exceptions, that no more than 50 percent of
the rental units in a project that receives Trust Fund
assistance and are not previously occupied may be rented
initially to extremely low income families, and provides
similar requirements for use of rehabilitation funds.
In addition to increased rental housing opportunity, the
Trust Fund seeks to promote, where appropriate, homeownership
opportunities for low income families. The bill allows for
Trust Fund assistance for owner-occupied housing that is the
principal residence of first-time homebuyers, has a limited
initial purchase price, and is subject to resale restrictions.
Assisted homebuyers must also have, before purchase, completed
a HUD approved program of counseling with respect to
homeownership responsibilities and financial management.
The bill includes a number of provisions to ensure that
Trust Fund monies are used for housing and are not misused or
used for other purposes. There is a strict prohibition against
any funds being used for a recipient's administrative costs or
expenses, political activities, advocacy, lobbying, counseling,
travel expense, or preparation or advice on tax returns. The
bill requires HUD to set a limit on the percentage of funds
grantees can spend on administrative costs, which limit may not
be set in excess of 10 percent. HUD is required to establish
program regulations, given authority to audit each grantee's
compliance. Grantees are required to develop systems to ensure
program compliance and require annual state fund use reports.
In addition, HUD has the authority to impose penalties on
grantees that do not comply with requirements, including
prohibiting the receipt of Trust Fund monies in the future.

Hearings

The Committee on Financial Services held a hearing on July
19, 2007 entitled ``The Affordable Housing Trust Fund Act of
2007, H.R. 2895''. The following witnesses testified:

PANEL ONE

The Honorable Brian Montgomery, Assistant
Secretary for Housing-Federal Housing Commissioner, U.S.
Department of Housing and Urban Development

PANEL TWO

The Honorable Henry Cisneros, Executive Chairman,
CityView
Ms. Sheila Crowley, President, National Low Income
Housing Coalition
The Honorable William D. Euille, Mayor,
Alexandria, Virginia, on behalf of the U.S. Conference of
Mayors
Ms. Lisa Alberghini, Director, Planning Office for
Urban Affairs, Archdiocese of Boston
Ms. JoAnne Poole, Broker/Owner, Poole Realty, on
behalf of the National Association of Realtors

PANEL THREE

Mr. Dave Roberts, CEO and President of Lutheran
Homes Society
Ms. Barbara Thompson, Executive Director, National
Council of State Housing Agencies
Mr. Hilary O. Shelton, Director, Washington
Bureau, National Association for the Advancement of Colored
People
Dr. Megan Sandel, Assistant Professor of
Pediatrics, Boston University School of Medicine
Mr. Joe L. Myer, Executive Director, NCALL,
Research, Inc., on behalf of National Rural Housing Coalition

Committee Consideration

The Committee on Financial Services met in open session on
July 26, 2007, and on July 31, 2007, ordered reported H.R.
2895, the National Affordable Housing Trust Fund Act of 2007,
as amended, to the House with a favorable recommendation by a
record vote of 45 yeas and 23 nays.

Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Frank to report the bill, as amended, to the
House with a favorable recommendation was agreed to by a record
vote of 45 yeas and 23 nays. The names of Members voting for
and against follow (Record vote no. FC-62):

RECORD VOTE NO. FC-62
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank....................... X ........ ........ Mr. Bachus........ ........ X ........
Mr. Kanjorski................... X ........ ........ Mr. Baker......... ........ X ........
Ms. Waters...................... X ........ ........ Ms. Pryce (OH).... ........ X ........
Mrs. Maloney.................... X ........ ........ Mr. Castle........ X ........ ........
Mr. Gutierrez................... X ........ ........ Mr. King (NY)..... X ........ ........
Ms. Velazquez................... X ........ ........ Mr. Royce......... ........ X ........
Mr. Watt........................ X ........ ........ Mr. Lucas......... ........ X ........
Mr. Ackerman.................... X ........ ........ Mr. Paul.......... ........ X ........
Ms. Carson...................... X ........ ........ Mr. Gillmor....... ........ X ........
Mr. Sherman..................... X ........ ........ Mr. LaTourette.... X ........ ........
Mr. Meeks....................... X ........ ........ Mr. Manzullo...... ........ X ........
Mr. Moore (KS).................. X ........ ........ Mr. Jones......... X ........ ........
Mr. Capuano..................... X ........ ........ Mrs. Biggert...... ........ X ........
Mr. Hinojosa.................... X ........ ........ Mr. Shays......... X ........ ........
Mr. Clay........................ X ........ ........ Mr. Miller (CA)... X ........ ........
Mrs. McCarthy................... X ........ ........ Mrs. Capito....... X ........ ........
Mr. Baca........................ X ........ ........ Mr. Feeney........ ........ ........ ........
Mr. Lynch....................... X ........ ........ Mr. Hensarling.... ........ X ........
Mr. Miller (NC)................. X ........ ........ Mr. Garrett (NJ).. ........ X ........
Mr. Scott....................... X ........ ........ Ms. Brown-Waite... ........ X ........
Mr. Green....................... X ........ ........ Mr. Barrett (SC).. ........ X ........
Mr. Cleaver..................... X ........ ........ Mr. Gerlach....... X ........ ........
Ms. Bean........................ X ........ ........ Mr. Pearce........ ........ X ........
Ms. Moore (WI).................. X ........ ........ Mr. Neugebauer.... ........ X ........
Mr. Davis (TN).................. X ........ ........ Mr. Price (GA).... ........ X ........
Mr. Sires....................... X ........ ........ Mr. Davis (KY).... ........ X ........
Mr. Hodes....................... X ........ ........ Mr. McHenry....... ........ X ........
Mr. Ellison..................... X ........ ........ Mr. Campbell...... ........ X ........
Mr. Klein....................... X ........ ........ Mr. Putnam........ ........ ........ ........
Mr. Mahoney (FL)................ X ........ ........ Mrs. Bachmann..... ........ X ........
Mr. Wilson...................... X ........ ........ Mr. Roskam........ ........ X ........
Mr. Perlmutter.................. X ........ ........ Mr. Marchant...... ........ X ........
Mr. Murphy...................... X ........ ........ Mr. McCotter...... ........ X ........
Mr. Donnelly.................... X ........ ........
Mr. Wexler...................... X ........ ........
Mr. Marshall.................... X ........ ........
Mr. Boren....................... X ........ ........
----------------------------------------------------------------------------------------------------------------

The following amendments were disposed of by record votes.
The names of Members voting for and against follow:
An amendment in the nature of a substitute by Mr.
Neugebauer, No. 4, establishing a national affordable housing
grant program, was not agreed to by a record vote of 24 yeas
and 43 nays (Record vote no. FC-57):

RECORD VOTE NO. FC-57
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank....................... ....... X ........ Mr. Bachus......... X ........ ........
Mr. Kanjorski................... ....... X ........ Mr. Baker.......... X ........ ........
Ms. Waters...................... ....... X ........ Ms. Pryce (OH)..... X ........ ........
Mrs. Maloney.................... ....... X ........ Mr. Castle......... ........ X ........
Mr. Gutierrez................... ....... X ........ Mr. King (NY)...... X ........ ........
Ms. Velazquez................... ....... X ........ Mr. Royce.......... X ........ ........
Mr. Watt........................ ....... X ........ Mr. Lucas.......... X ........ ........
Mr. Ackerman.................... ....... X ........ Mr. Paul........... X ........ ........
Ms. Carson...................... ....... X ........ Mr. Gillmor........ X ........ ........
Mr. Sherman..................... ....... X ........ Mr. LaTourette..... ........ X ........
Mr. Meeks....................... ....... X ........ Mr. Manzullo....... X ........ ........
Mr. Moore (KS).................. ....... X ........ Mr. Jones.......... ........ ........ ........
Mr. Capuano..................... ....... X ........ Mrs. Biggert....... X ........ ........
Mr. Hinojosa.................... ....... X ........ Mr. Shays.......... ........ X ........
Mr. Clay........................ ....... X ........ Mr. Miller (CA).... ........ X ........
Mrs. McCarthy................... ....... X ........ Mrs. Capito........ ........ X ........
Mr. Baca........................ ....... X ........ Mr. Feeney......... ........ ........ ........
Mr. Lynch....................... ....... X ........ Mr. Hensarling..... X ........ ........
Mr. Miller (NC)................. ....... X ........ Mr. Garrett (NJ)... X ........ ........
Mr. Scott....................... ....... X ........ Ms. Brown-Waite.... X ........ ........
Mr. Green....................... ....... X ........ Mr. Barrett (SC)... X ........ ........
Mr. Cleaver..................... ....... X ........ Mr. Gerlach........ ........ X ........
Ms. Bean........................ ....... X ........ Mr. Pearce......... X ........ ........
Ms. Moore (WI).................. ....... X ........ Mr. Neugebauer..... X ........ ........
Mr. Davis (TN).................. ....... X ........ Mr. Price (GA)..... X ........ ........
Mr. Sires....................... ....... X ........ Mr. Davis (KY)..... X ........ ........
Mr. Hodes....................... ....... X ........ Mr. McHenry........ X ........ ........
Mr. Ellison..................... ....... X ........ Mr. Campbell....... X ........ ........
Mr. Klein....................... ....... X ........ Mr. Putnam......... ........ ........ ........
Mr. Mahoney (FL)................ ....... X ........ Mrs. Bachmann...... X ........ ........
Mr. Wilson...................... ....... X ........ Mr. Roskam......... X ........ ........
Mr. Perlmutter.................. ....... X ........ Mr. Marchant....... X ........ ........
Mr. Murphy...................... ....... X ........ Mr. McCotter....... X ........ ........
Mr. Donnelly.................... ....... X ........
Mr. Wexler...................... ....... X ........
Mr. Marshall.................... ....... X ........
Mr. Boren....................... ....... X ........
----------------------------------------------------------------------------------------------------------------

An amendment by Mr. Price of Georgia, No. 6, requiring
acceptable identification for occupancy or assistance, was not
agreed to by a record vote of 33 yeas and 34 nays (Record vote
no. FC-58):

RECORD VOTE NO. FC-58
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank....................... ........ X ........ Mr. Bachus......... X ....... ........
Mr. Kanjorski................... ........ X ........ Mr. Baker......... X ....... ........
Ms. Waters...................... ........ X ........ Ms. Pryce (OH)..... X ....... ........
Mrs. Maloney.................... ........ X ........ Mr. Castle......... X ....... ........
Mr. Gutierrez................... ........ X ........ Mr. King (NY)...... X ....... ........
Ms. Velazquez................... ........ X ........ Mr. Royce.......... X ....... ........
Mr. Watt........................ ........ X ........ Mr. Lucas.......... X ....... ........
Mr. Ackerman.................... ........ X ........ Mr. Paul........... X ....... ........
Ms. Carson...................... ........ X ........ Mr. Gillmor........ X ....... ........
Mr. Sherman..................... ........ X ........ Mr. LaTourette..... X ....... ........
Mr. Meeks....................... ........ X ........ Mr. Manzullo....... X ....... ........
Mr. Moore (KS).................. ........ X ........ Mr. Jones.......... ........ ....... ........
Mr. Capuano..................... ........ X ........ Mrs. Biggert....... ........ X ........
Mr. Hinojosa.................... ........ X ........ Mr. Shays.......... X ....... ........
Mr. Clay........................ ........ X ........ Mr. Miller (CA).... X ....... ........
Mrs. McCarthy................... ........ X ........ Mrs. Capito........ X ....... ........
Mr. Baca........................ ........ X ........ Mr. Feeney......... ........ ....... ........
Mr. Lynch....................... ........ X ........ Mr. Hensarling..... X ....... ........
Mr. Miller (NC)................. ........ X ........ Mr. Garrett (NJ)... X ....... ........
Mr. Scott....................... ........ X ........ Ms. Brown-Waite.... X ....... ........
Mr. Green....................... ........ X ........ Mr. Barrett (SC)... X ....... ........
Mr. Cleaver..................... ........ X ........ Mr. Gerlach........ X ....... ........
Ms. Bean........................ ........ X ........ Mr. Pearce......... X ....... ........
Ms. Moore (WI).................. ........ X ........ Mr. Neugebauer..... X ....... ........
Mr. Davis (TN).................. ........ X ........ Mr. Price (GA)..... X ....... ........
Mr. Sires....................... ........ X ........ Mr. Davis (KY)..... X ....... ........
Mr. Hodes....................... ........ X ........ Mr. McHenry........ X ....... ........
Mr. Ellison..................... ........ X ........ Mr. Campbell....... X ....... ........
Mr. Klein....................... ........ X ........ Mr. Putnam......... ........ ....... ........
Mr. Mahoney (FL)................ ........ X ........ Mrs. Bachmann...... X ....... ........
Mr. Wilson...................... ........ X ........ Mr. Roskam......... X ....... ........
Mr. Perlmutter.................. ........ X ........ Mr. Marchant....... X ....... ........
Mr. Murphy...................... ........ X ........ Mr. McCotter....... X ....... ........
Mr. Donnelly.................... X ........ ........
Mr. Wexler...................... ........ X ........
Mr. Marshall.................... X ........ ........
Mr. Boren....................... X ........ ........
----------------------------------------------------------------------------------------------------------------

An amendment by Mr. Feeney, No. 9, striking the
applicability of Davis-Bacon, was not agreed to by a record
vote of 20 yeas and 47 nays (Record vote no. FC-59):

RECORD VOTE NO. FC-59
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank....................... ........ X ........ Mr. Bachus........ X ........ ........
Mr. Kanjorski................... ........ X ........ Mr. Baker......... X ........ ........
Ms. Waters...................... ........ X ........ Ms. Pryce (OH).... X ........ ........
Mrs. Maloney.................... ........ X ........ Mr. Castle........ ........ X ........
Mr. Gutierrez................... ........ X ........ Mr. King (NY)..... ........ X ........
Ms. Velazquez................... ........ X ........ Mr. Royce......... X ........ ........
Mr. Watt........................ ........ X ........ Mr. Lucas......... X ........ ........
Mr. Ackerman.................... ........ X ........ Mr. Paul.......... X ........ ........
Ms. Carson...................... ........ X ........ Mr. Gillmor....... X ........ ........
Mr. Sherman..................... ........ X ........ Mr. LaTourette.... ........ X ........
Mr. Meeks....................... ........ X ........ Mr. Manzullo...... X ........ ........
Mr. Moore (KS).................. ........ X ........ Mr. Jones......... ........ ........ ........
Mr. Capuano..................... ........ X ........ Mrs. Biggert...... X ........ ........
Mr. Hinojosa.................... ........ X ........ Mr. Shays......... ........ X ........
Mr. Clay........................ ........ X ........ Mr. Miller (CA)... X ........ ........
Mrs. McCarthy................... ........ X ........ Mrs. Capito....... ........ X ........
Mr. Baca........................ ........ X ........ Mr. Feeney........ ........ ........ ........
Mr. Lynch....................... ........ X ........ Mr. Hensarling.... X ........ ........
Mr. Miller (NC)................. ........ X ........ Mr. Garrett (NJ).. X ........ ........
Mr. Scott....................... ........ X ........ Ms. Brown-Waite... ........ X ........
Mr. Green....................... ........ X ........ Mr. Barrett (SC).. X ........ ........
Mr. Cleaver..................... ........ X ........ Mr. Gerlach....... ........ X ........
Ms. Bean........................ ........ X ........ Mr. Pearce........ X ........ ........
Ms. Moore (WI).................. ........ X ........ Mr. Neugebauer.... X ........ ........
Mr. Davis (TN).................. ........ X ........ Mr. Price (GA).... X ........ ........
Mr. Sires....................... ........ X ........ Mr. Davis (KY).... X ........ ........
Mr. Hodes....................... ........ X ........ Mr. McHenry....... X ........ ........
Mr. Ellison..................... ........ X ........ Mr. Campbell...... X ........ ........
Mr. Klein....................... ........ X ........ Mr. Putnam........ ........ ........ ........
Mr. Mahoney (FL)................ ........ X ........ Mrs. Bachmann..... X ........ ........
Mr. Wilson...................... ........ X ........ Mr. Roskam........ ........ X ........
Mr. Perlmutter.................. ........ X ........ Mr. Marchant...... X ........ ........
Mr. Murphy...................... ........ X ........ Mr. McCotter...... ........ X ........
Mr. Donnelly.................... ........ X ........
Mr. Wexler...................... ........ X ........
Mr. Marshall.................... ........ X ........
Mr. Boren....................... ........ X ........
----------------------------------------------------------------------------------------------------------------

An amendment by Mr. Price of Georgia, No. 12, adding a
paygo provision, was not agreed to by a record vote of 30 yeas
and 37 nays (Record vote no. FC-60):

RECORD VOTE NO. FC-60
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank........................ ....... X ........ Mr. Bachus.......... X ....... .......
Mr. Kanjorski.................... ....... X ........ Mr. Baker........... X ....... .......
Ms. Waters....................... ....... X ........ Ms. Pryce (OH)...... X ....... .......
Mrs. Maloney..................... ....... X ........ Mr. Castle.......... X ....... .......
Mr. Gutierrez.................... ....... X ........ Mr. King (NY)....... X ....... .......
Ms. Velazquez.................... ....... X ........ Mr. Royce........... X ....... .......
Mr. Watt......................... ....... X ........ Mr. Lucas........... X ....... .......
Mr. Ackerman..................... ....... X ........ Mr. Paul............ X ....... .......
Ms. Carson....................... ....... X ........ Mr. Gillmor......... X ....... .......
Mr. Sherman...................... ....... X ........ Mr. LaTourette...... X ....... .......
Mr. Meeks........................ ....... X ........ Mr. Manzullo........ X ....... .......
Mr. Moore (KS)................... ....... X ........ Mr. Jones........... ........ ....... .......
Mr. Capuano...................... ....... X ........ Mrs. Biggert........ X ....... .......
Mr. Hinojosa..................... ....... X ........ Mr. Shays........... X ....... .......
Mr. Clay......................... ....... X ........ Mr. Miller (CA)..... X ....... .......
Mrs. McCarthy.................... ....... X ........ Mrs. Capito......... X ....... .......
Mr. Baca......................... ....... X ........ Mr. Feeney.......... ........ ....... .......
Mr. Lynch........................ ....... X ........ Mr. Hensarling...... X ....... .......
Mr. Miller (NC).................. ....... X ........ Mr. Garrett (NJ).... X ....... .......
Mr. Scott........................ ....... X ........ Ms. Brown-Waite..... X ....... .......
Mr. Green........................ ....... X ........ Mr. Barrett (SC).... X ....... .......
Mr. Cleaver...................... ....... X ........ Mr. Gerlach......... X ....... .......
Ms. Bean......................... ....... X ........ Mr. Pearce.......... X ....... .......
Ms. Moore (WI)................... ....... X ........ Mr. Neugebauer...... X ....... .......
Mr. Davis (TN)................... ....... X ........ Mr. Price (GA)...... X ....... .......
Mr. Sires........................ ....... X ........ Mr. Davis (KY)...... X ....... .......
Mr. Hodes........................ ....... X ........ Mr. McHenry......... X ....... .......
Mr. Ellison...................... ....... X ........ Mr. Campbell........ X ....... .......
Mr. Klein........................ ....... X ........ Mr. Putnam.......... ........ ....... .......
Mr. Mahoney (FL)................. ....... X ........ Mrs. Bachmann....... X ....... .......
Mr. Wilson....................... ....... X ........ Mr. Roskam.......... X ....... .......
Mr. Perlmutter................... ....... X ........ Mr. Marchant........ X ....... .......
Mr. Murphy....................... ....... X ........ Mr. McCotter........ X ....... .......
Mr. Donnelly..................... ....... X ........
Mr. Wexler....................... ....... X ........
Mr. Marshall..................... ....... X ........
Mr. Boren........................ ....... X ........
----------------------------------------------------------------------------------------------------------------

An amendment by Mr. Hensarling, No. 13, eliminating certain
funding streams, was not agreed to by a record vote of 29 yeas
and 38 nays (Record vote no. FC-61):

RECORD VOTE NO. FC-61
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank....................... ....... X ........ Mr. Bachus......... X ........ ........
Mr. Kanjorski................... ....... X ........ Mr. Baker.......... X ........ ........
Ms. Waters...................... ....... X ........ Ms. Pryce (OH)..... X ........ ........
Mrs. Maloney.................... ....... X ........ Mr. Castle......... X ........ ........
Mr. Gutierrez................... ....... X ........ Mr. King (NY)...... X ........ ........
Ms. Velazquez................... ....... X ........ Mr. Royce.......... X ........ ........
Mr. Watt........................ ....... X ........ Mr. Lucas.......... X ........ ........
Mr. Ackerman.................... ....... X ........ Mr. Paul........... X ........ ........
Ms. Carson...................... ....... X ........ Mr. Gillmor........ X ........ ........
Mr. Sherman..................... ....... X ........ Mr. LaTourette..... X ........ ........
Mr. Meeks....................... ....... X ........ Mr. Manzullo....... X ........ ........
Mr. Moore (KS).................. ....... X ........ Mr. Jones.......... ........ ........ ........
Mr. Capuano..................... ....... X ........ Mrs. Biggert....... X ........ ........
Mr. Hinojosa.................... ....... X ........ Mr. Shays.......... ........ X ........
Mr. Clay........................ ....... X ........ Mr. Miller (CA).... X ........ ........
Mrs. McCarthy................... ....... X ........ Mrs. Capito........ X ........ ........
Mr. Baca........................ ....... X ........ Mr. Feeney......... ........ ........ ........
Mr. Lynch....................... ....... X ........ Mr. Hensarling..... X ........ ........
Mr. Miller (NC)................. ....... X ........ Mr. Garrett (NJ)... X ........ ........
Mr. Scott....................... ....... X ........ Ms. Brown-Waite.... X ........ ........
Mr. Green....................... ....... X ........ Mr. Barrett (SC)... X ........ ........
Mr. Cleaver..................... ....... X ........ Mr. Gerlach........ X ........ ........
Ms. Bean........................ ....... X ........ Mr. Pearce......... X ........ ........
Ms. Moore (WI).................. ....... X ........ Mr. Neugebauer..... X ........ ........
Mr. Davis (TN).................. ....... X ........ Mr. Price (GA)..... X ........ ........
Mr. Sires....................... ....... X ........ Mr. Davis (KY)..... X ........ ........
Mr. Hodes....................... ....... X ........ Mr. McHenry........ X ........ ........
Mr. Ellison..................... ....... X ........ Mr. Campbell....... X ........ ........
Mr. Klein....................... ....... X ........ Mr. Putnam......... ........ ........ ........
Mr. Mahoney (FL)................ ....... X ........ Mrs. Bachmann...... X ........ ........
Mr. Wilson...................... ....... X ........ Mr. Roskam......... X ........ ........
Mr. Perlmutter.................. ....... X ........ Mr. Marchant....... X ........ ........
Mr. Murphy...................... ....... X ........ Mr. McCotter....... X ........ ........
Mr. Donnelly.................... ....... X ........
Mr. Wexler...................... ....... X ........
Mr. Marshall.................... ....... X ........
Mr. Boren....................... ....... X ........
----------------------------------------------------------------------------------------------------------------

The following other amendments were also considered by the
Committee:
An amendment by Mr. Frank (and Ms. Waters), No. 1, a
manager's amendment making various substantive and technical
changes, was agreed to by a voice vote.
An amendment by Mr. Davis of Kentucky, No. 2, including
priority housing needs in rural areas, was agreed to by a voice
vote.
An amendment by Ms. Velazquez, No. 3, including existing
state and local funding for affordable housing from being
supplanted by the AHTF, was agreed to by a voice vote.
An amendment by Mr. Capuano, No. 5, striking the minimum
amount for states, was agreed to by a voice vote.
An amendment by Mr. Castle, No. 7, making a change in
requirements for years in which less than $2 billion is
available, was agreed to by a voice vote.
An en bloc amendment by Mr. Miller (CA), Mrs. McCarthy, and
Mr. Capuano, No. 8, providing for a change in selection
criteria, determining increase in affordable rental housing in
an area with an extremely low percentage of affordable housing,
and requiring a Congressional review of the formula, was agreed
to by voice vote.
An amendment by Mr. Royce, No. 10, on grantee
ineligibility, was agreed to by a voice vote.
An amendment by Mr. Hensarling, No. 11, providing priority
for families on the Section 8 waiting list, was agreed to by a
voice vote.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held hearings and
made findings that are reflected in this report.

Performance Goals and Objectives

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H.R. 2895 establishes a National Affordable Housing Trust
Fund for the construction, rehabilitation, and preservation of
affordable housing, including both rental housing and
homeownership. The Trust Fund shall consist of dedicated
sources of funding to carry out the Trust Fund's eligible
housing activities. The purpose of the Trust Fund is 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, and to promote homeownership
for low-income families. The goal of the bill is to produce
1,500,000 units of affordable housing over the next decade.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act.

Committee Cost Estimate

The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.

Congressional Budget Office Estimate

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:

September 12, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2895, the National
Affordable Housing Trust Fund Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susanne
Mehlman.
Sincerely,
Peter R. Orszag.
Enclosure.

H.R. 2895--National Affordable Housing Trust Fund Act of 2007

Summary: H.R. 2895 would establish a National Affordable
Housing Trust Fund for the Department of Housing and Urban
Development (HUD) to provide assistance to state and local
governments and Indian tribes. Such assistance would include
grants, loans, and interest rate buy-downs that would be used
to construct, rehabilitate, and preserve affordable housing for
low-income families. Budgetary resources for the new trust fund
would be provided by other legislation. (Potential spending
from the new trust fund could be triggered by either H.R. 2895
or other pending legislation, depending on the order in which
such multiple bills are enacted.) This bill also would prohibit
the Federal Housing Administration (FHA) from increasing fees
for certain loan guarantees.
CBO estimates that implementing H.R. 2895 would result in a
loss of $192 million in discretionary offsetting collections
over the next five years stemming from the prohibition of fee
increases for certain FHA guarantees. Because enacting H.R.
2895 by itself would result in no transfers, deposits, or
appropriations to the proposed trust fund, CBO estimates that
enacting the bill would not affect direct spending or revenues
(unless other legislation providing resources for that fund is
enacted first).
H.R. 2895 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2895 is shown in the following table.
The cost of this legislation falls within budget function 370
(mortgage and housing credit).

TABLE 1.--ESTIMATED EFFECTS OF H.R. 2895 ON SPENDING SUBJECT TO APPROPRIATION
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION

FHA Spending Under Current Law:a
Estimated Authorization Level......................... -165 -250 -273 -273 -273 -273
Estimated Outlays..................................... -165 -250 -273 -273 -273 -273
Proposed Changes:
Limit on Premium Increases for Mortgage Insurance.....
Estimated Authorization Level......................... 0 20 43 43 43 43
Estimated Outlays..................................... 0 20 43 43 43 43
Net Spending Under H.R. 2895:
Estimated Authorization Level......................... -165 -230 -230 -230 -230 -230
Estimated Outlays..................................... -165 -230 -230 -230 -230 -230
----------------------------------------------------------------------------------------------------------------
aThe figures for 2007 are CBO's current estimates of budget authority and outlays for FHA's multifamily program,
The 2008-2012 levels are CBO's baseline estimates of the offsetting collections that would be generated by the
multifamily program, assuming that appropriation laws necessary to implement the current FHA multifamily
program are enacted.

Basis of estimate: For this estimate, CBO assumes that H.R.
2895 will be enacted near the start of fiscal year 2008, and
that the appropriation laws consistent with this bill and
necessary to implement FHA's multifamily program will be
enacted each year.
CBO estimates that implementing H.R. 2895 would result in a
decrease in offsetting collections of $20 million in 2008 and
$192 million over the 2008-2012 period, assuming appropriation
action consistent with the bill. Currently, FHA has the
authority to adjust fees for its mortgage insurance programs
through administrative action. Under section 292 of H.R. 2895,
FHA would be prohibited from increasing fees unless the
increase is required to maintain the estimated credit subsidy
for the program at zero, but not less than zero.
According to the Administration, annual fees for new loan
guarantees for the apartment development and refinance programs
will increase--under current law--by about 16 basis points
beginning in 2008. The weighted average subsidy rate for these
programs is currently about -2 percent. CBO estimates that
those fee increases would affect about $2.6 billion in loan
guarantees in 2008 and over $3 billion in loan guarantees
annually in subsequent years.
Furthermore, we estimate that those fee increases would
increase offsetting collections for this program by $192
million over the 2008-2012 period. Thus, prohibiting those fee
increases would result in a loss--relative to the current-law
baseline--of $192 million in discretionary offsetting
collections over the next five years.
Funding for the trust fund proposed by H.R. 2895 would
consist of:
Any amounts transferred from the Federal
National Mortgage Association (Fannie Mae) and the
Federal Home Loan Mortgage Corporation (Freddie Mac)
under Title XIII of the Housing and Community
Development Act (as that title may be amended by H.R.
1427, the Federal Housing Finance Reform Act of 2007);
Any amounts appropriated to an affordable
trust fund under the Expanding American Homeownership
Act of 2007 (H.R. 1852); and
Any amounts that may be appropriated,
transferred, or credited to the trust fund under other
provisions of law.
This legislation would provide spending authority for
amounts in the trust fund to meet affordable housing needs. At
the present time, however, no authority exists in current law
to transfer or appropriate funds to the proposed trust fund.
Legislation authorizing any sources of funding for the trust
fund has not been enacted into law. Any effect on direct
spending resulting from this legislation would be contingent on
the enactment of subsequent legislation providing funding for
the trust fund. (Any such potential change in spending would be
charged to the legislation that triggers it.)
Intergovernmental and private-sector impact: H.R. 2895
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would authorize grants to support
affordable housing programs, which would benefit state, local,
and tribal governments.
Previous CBO estimates: On April 23, 2007, CBO transmitted
a cost estimate for H.R. 1427, the Federal Housing Finance
Reform Act of 2007, as ordered reported by the House Financial
Services Committee on Financial Services on March 29, 2007, and
on June 11, 2007, CBO transmitted a cost estimate for H.R.
1852, the Expanding American Homeownership Act of 2007, as
ordered reported by the House Committee on Financial Services
on May 3, 2007. H.R. 1427 would require Fannie Mae and Freddie
Mac to contribute funding to an affordable housing fund based
on the value of their mortgage portfolios, and H.R. 1852 would
authorize appropriations for an affordable housing fund. Both
of those bills also would authorize spending on affordable
housing. Under H.R. 2895, deposits for the National Affordable
Housing Trust Fund would consist of amounts made available for
affordable housing under H.R. 1427 and H.R. 1852, and any other
amounts that may be made available to the trust fund under
other provisions of law.
In addition, both H.R. 1852 and H.R. 2895 include an
identical provision that would prohibit FHA from increasing
fees for certain loan guarantees. Thus, the estimates for this
provision are identical.
Estimate prepared by: Federal Costs: Susanne S. Mehlman;
Impact on State, Local, and Tribal Governments: Elizabeth Cove;
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Constitutional Authority Statement

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States) and clause 3 (relating to
the power to regulate interstate commerce).

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

Earmark Identification

H.R. 2895 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.

Section-by-Section Analysis of the Legislation

Section 1--Short title

Titles the bill as the ``National Affordable Housing Trust
Fund Act of 2007.''

Section 2--National Affordable Housing Trust Fund

The bill amends title II of the Cranston-Gonzalez National
Affordable Housing Act to add a new Subtitle G--National
Affordable Housing Trust Fund, adding the following:

Section 291. Purposes

The major purposes of the bill are to: (1) 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) 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) promote homeownership for low-income families; and (4)
construct, rehabilitate, and preserve at least 1,500,000
affordable dwelling units over the next decade.

Section 292. Trust fund

Establishes a ``National Affordable Housing Trust Fund'' in
the U.S. Treasury. Deposits to the Trust Fund include: (1)
amounts from Fannie Mae and Freddie Mac transferred into the
Trust Fund under Title XIII of the Housing and Community
Development Act of 1992 (see H.R. 1427); (2) amounts
appropriated to the Trust Fund pursuant to the authorization in
the Expanding American Homeownership Act of 2007 (see H.R.
1852), relating to the use of FHA savings for an affordable
housing grant fund; and (3) any amounts that are or may be
appropriated, transferred, or credited to such Fund under any
other provisions of law. Authorizes expenditures from the Trust
Fund by HUD and specifies that all assistance provided be
considered to be federal financial assistance.
The bill includes a number of conditions on the use of any
FHA funds for bill purposes, which include: (1) a prohibition
against fund use unless FHA funds are first made available for
(a) the amount, if any, needed to avoid a credit subsidy
appropriation for the FHA 203(b) single family loan program in
that year, (b) the amount needed to increase nationwide funding
for housing counseling grants from the current level of $42
million to $100 million a year for each of the next five years,
and (c) $25 million each of the next five years to increase
funding for improving FHA technology, procedures, processes,
and program performance, and salaries; (2) a prohibition
against using any credit subsidies from the FHA 203(b) single
family loan program; (3) a prohibition against FHA fund use
unless HUD certifies each year that it has made a determination
that FHA premiums being charged that year are sufficient to
comply with the Section 205(f) MMIF capital ratio requirement
and are also sufficient to ensure the safety and soundness of
the other FHA mortgage insurance funds; and (4) a prohibition
against FHA raising fees on any FHA loan program unless such
program would require a credit subsidy appropriation that year
absent such a fee increase.

Section 293. Allocations for States, Indian tribes, insular areas, and
participating local jurisdictions

Requires that for 2008 and each fiscal year thereafter, HUD
shall determine the total amount available for Trust Fund
assistance. Of this total amount, HUD will allocate 40 percent
to States, Indian tribes, and insular areas, and 60 percent to
participating local jurisdictions (PLJs).

Section 294. Assistance from trust fund

Requires HUD to establish an affordable housing needs
formula to allocate Trust Fund amounts among States,
Participating Local Jurisdictions, Indian tribes, and insular
areas based on the relative needs of such entities. The formula
is to be based on a number of factors, which include
population, the percentage of families living in substandard
housing, the percentage of families that pay more than 50
percent of their annual income for housing costs, the
percentage of persons having an income at or below the poverty
line, the cost of constructing or carrying out the
rehabilitation of housing; the percentage of the population
that resides in counties having extremely low vacancy rates,
the percentage of housing stock that is extremely old housing,
the extent to which any jurisdiction with an extremely low
percentage of affordable rental housing units increases their
percentage of affordable rental housing units, and any other
factors that HUD determines to be appropriate. For any year in
which HUD fails to establish the formula by the time funds are
available for allocation, allocations are to be made to States,
PLJs, and insular areas pursuant to the HOME program formula,
with the Indian tribe allocation to be determined by HUD.
If for any fiscal year the total Trust Fund amount
available nationwide is less than $2 billion, any PLJ that
would otherwise be entitled to an amount less than $750,000
shall not receive any funds directly, and instead their share
will be allocated to the state in which they are located.
Each grantee shall contribute as a match: (a) at least 25
percent of funds from federal sources, (b) at least 12.5
percent of funds from state, local, or private resources, or
(c) a combination of the two. HUD may reduce or waive the
matching requirement for grantees in fiscal distress.
Contributions by a jurisdiction to a Trust Fund-assisted
project to provide services for residents may qualify as
matching funds, provided that there is a binding commitment for
such services. HUD may reduce or waive the match where a zoning
variance or other waiver of regulatory barriers was required to
site Trust Fund-assisted housing. The bill waives the match
requirement in any area declared by the President as a major
disaster or emergency.
HUD is required to make grants to Indian tribes on a
competitive basis, based on criteria that HUD is required to
establish.
Any funds awarded to a PLJ which notifies HUD that it does
not intend to use the funds will be transferred to the state in
which the PLJ is located. HUD is required to select an an
alternative administrator [nonprofit or public entity] to
allocate funds given to states, PLJs, or insular areas that go
unused because (a) the grantee does not submit an allocation
plan within 12 months of fund availability, (b) the grantee
does not comply with the required match, or (c) funds are not
used within 24 months of fund availability.

Section 295. Allocation plans

All grantees other than Indian Tribes are required to
submit an allocation plan for each fiscal year, which is
subject to approval by HUD. The allocation plan describes the
use of Trust Fund monies, must be based on priority housing
needs (including in rural areas), and must be consistent with
the grantee's comprehensive housing affordability strategy
(CHAS). The plan is to be made available to the public for
comment and should contain a description of the eligible
activities to be conducted and a certification that any housing
assisted with Trust Fund amounts will comply with the
provisions of the bill, the Fair Housing Act, and the
Rehabilitation Act of 1973. The allocation plan must set out
the process for the grantee to select eligible activities and
include performance goals, benchmarks, and timetables.
Allocation plans must be submitted to HUD within 6 months of
notice of fund availability, and HUD must subsequently approve
or disapprove of such proposed plan within 3 months of such
submission. for review and approval. Detailed selection
criteria are established which grantees must use in selecting
among applicants for funds. Selection criteria include the
merits of the project, the experience of the applicant, the
ability to undertake the project in a timely manner, the extent
of leveraging, and a number of factors dealing with housing
affordability, age of the local housing stock, and local
vacancy rates.

Section 296. Use of assistance by recipients

The bill requires grantees to distribute Trust Fund monies
only to eligible recipients and only for eligible activities.
Eligible recipients include an organization, agency, or other
entity (including a for-profit entity, a nonprofit entity, a
faith-based organization, a community development financial
institution, a community development corporation, and a state
or local housing trust fund) that demonstrates the experience,
ability, and capacity to undertake the eligible activity,
demonstrates a familiarity with the relevant housing program
requirements, and make assurances to comply with the provisions
of the Act. All Trust Fund monies must be used for the benefit
of low income families (below 80 percent of median income)--
except that in any year in which nationwide funding is less
than $2 billion, all funds must be used for the benefit of
families below 60 percent of local area median income.
Additionally, at least 75 percent of funds must be used for the
benefit of extremely low-income families (incomes that do not
exceed 30 percent of median income or the national poverty
line). Further, at least 30 percent of funds must be used for
the benefit of families with incomes below the SSI income
limit. Finally, at least 10 percent of funds must be used for
the benefit of families making more than 50 percent of the
local area median income. HUD is required to submit a report
within 5 years regarding the need for and appropriateness of
these targeting requirements.
States and PLJ are required to use a portion of Trust Fund
monies for eligible activities located in rural areas that is
proportionate to the identified need for such activities in
such rural areas.
HUD is required to establish limits on the amount of Trust
Fund grant amounts that may be used, on a per unit basis, for
eligible activities. Trust Fund assistance may be distributed
in the form of capital grants, noninterest-bearing or low-
interest loans or advances, deferred payment loans, guarantees,
loan loss reserves, and closing cost and interest rate buydown
assistance for owner occupied housing. Assistance that has been
repaid to a grantee shall be distributed in accordance with the
grantee's allocation plan. Trust Fund assistance is to be
coordinated with other housing program assistance programs, a
number of which are enumerated. The bill includes prohibitions
against any funds being used for political activities,
advocacy, lobbying, counseling services, travel expenses,
preparation of or advice on tax returns, and administrative and
outreach costs (except that a grantee may use funds for such
grantee's program administrative costs, subject to a percentage
limitation as established by HUD, not to exceed 10 percent of
allocated funds). Grantees are required to comply with labor
standards and other federal laws, which include laws relating
to tenant rights, Consolidated Plans and Fair Housing.

Section 297. Affordable housing

Affordable rental housing is defined as a unit that bears a
rent not greater than the lesser of the existing fair market
rental rate or 30 percent of the adjusted income of a family
whose income equals 65 percent of the median income for the
area. The tenant rent contribution cannot exceed 30 percent the
adjusted family income of the family being assisted. The bill
prohibits discrimination against prospective tenants who are
Section 8 voucher holders. The bill requires mixed income
development by providing that no more than 50 percent of the
rental units in a project that receives Trust Fund assistance
may be rented initially to extremely low income families (or
such higher percentage as may exist at time of rehab with
regard to rehab use of funds). This mixed income requirement
does not apply to projects having 25 or fewer units that are
(1) located in a census tract in which the number of families
having incomes less than the poverty line is less than 20
percent; or (2) located in a rural area; or (3) specifically
made available only for elderly families or disabled families.
Units must comply with basic visitability standards and
will continue to be subject to all requirements under this Act
for 50 years. The bill defines the type of owner-occupied
housing that is available for Trust Fund assistance. Such
housing must be the principal residence of first-time
homebuyers, have an initial purchase price that meets HOME
requirements, and be subject to HOME program resale
restrictions. Assisted homebuyers must also have, before
purchase, completed a HUD approved program of counseling with
respect to homeownership responsibilities and financial
management. HUD may waive this counseling requirement under
specific circumstances. Priority shall be given to families who
have been on voucher or public housing waiting lists for more
than 12 months.

Section. 298. Other provisions

The bill requires HUD to require each grantee to develop
and maintain systems to track the use of Trust Fund monies,
including financial and project reporting, record retention and
audit requirements. Trust Fund recipients are required to
reimburse grantees for misused funds, and return any unused or
committed funds. Grantees are required to report to HUD on
Trust Fund activities and grantee compliance on an annual basis
and have these reports available to the public. The bill gives
HUD the authority to impose penalties on states that do not
comply with the Act's requirements, including reducing the
amount of Trust Fund assistance, requiring grantees to
reimburse misused funds and limiting or terminating Trust Fund
assistance.

Section 299. Definitions

The bill defines the term eligible activities to include
activities relating to the construction, preservation, or
rehabilitation of affordable housing, including: construction;
acquisition of real property; site preparation and improvement,
including demolition; rehabilitation of existing housing; and
up to 20 percent of funds to facilitate affordability for
extremely low income families in the form of rental assistance,
operating reserves or operating accounts.
Trust Fund monies may also be used to provide 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. The bill also defines the terms eligible recipient,
extremely low vacancy rate, extremely old housing, families,
fiscal distress, grantee, Indian tribe, insular area,
participating local jurisdiction, poverty line, recipient,
rural area, State, Trust Fund and Trust Fund grant amounts.

Section 300. Inapplicability of HOME provisions

Except as specifically provided otherwise in the bill, no
HOME program requirements shall apply to Trust Fund assistance.

Section 301. Regulations

HUD is required to promulgate regulations to implement the
provisions of this bill with 6 months of the date of enactment
of the bill.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT

* * * * * * *

TITLE II--INVESTMENT IN AFFORDABLE HOUSING

SEC. 201. SHORT TITLE.

[This title] Subtitles A through F of this title may be cited
as the ``HOME Investment Partnerships Act''.

* * * * * * *

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 or
existing State and local funding for affordable
housing;
(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.
(e) Conditions on Use of FHA Savings.--
(1) Use.--For each fiscal year, no funds may be made
available under paragraph (2) of subsection (b) unless
the amount equal to the net increase for such fiscal
year in the negative credit subsidy for the mortgage
insurance programs under title II of the National
Housing Act resulting from the Expanding American
Homeownership Act of 2007, and the amendments made by
such Act, is first made available for the following
purposes in the following amounts:
(A) Single family housing mortgage
insurance.--For each fiscal year, for costs (as
such term is defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C.
661a)) of mortgage insurance provided pursuant
to section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)), the additional amount (not
including any costs of such mortgage insurance
resulting from this Act or the amendments made
by this Act), if any, necessary to ensure that
the credit subsidy cost of such mortgage
insurance for such fiscal year is $0.
(B) Housing counseling.--For each of fiscal
years 2008 through 2012, the amount needed to
increase funding, for the housing counseling
program under section 106 of the Housing and
Urban Development Act of 1968 (12 U.S.C.
1701x), in connection with homebuyers and
homeowners with mortgages insured under title
II of the National Housing Act, from the amount
appropriated for the preceding fiscal year to
$100,000,000.
(C) Mortgage insurance technology,
procedures, processes, program performance, and
salaries.--For each of fiscal years 2008
through 2012, $25,000,000 for increasing
funding for the purpose of improving
technology, procedures, processes, and program
performance, and salaries in connection with
the mortgage insurance programs under title II
of the National Housing Act.
(2) Exclusion of earnings from the single family
mortgage insurance program.--No funds under paragraph
(2) of subsection (b) for a fiscal year may be derived
from the negative credit subsidy cost for such fiscal
year, if any, for mortgage insurance provided pursuant
to section 203(b) of the National Housing Act.
(3) Certification.--No funds may be made available
under paragraph (2) of subsection (b) for any fiscal
year unless the Secretary of Housing and Urban
Development has, by rule making in accordance with
section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3)
of such section), made a determination that premiums
being, or to be, charged during such fiscal year for
mortgage insurance under title II of the National
Housing Act are established at the minimum amount
sufficient to comply with the requirements of section
205(f) of such Act (relating to required capital ratio
for the Mutual Mortgage Insurance Fund) and ensure the
safety and soundness of the other mortgage insurance
funds under such Act, and any negative credit subsidy
for such fiscal year resulting from such mortgage
insurance programs adequately ensures the efficient
delivery and availability of such programs.
(4) Limitation on mortgage insurance premium
increases.--Notwithstanding any other provision of
law--
(A) the premiums charged for mortgage
insurance under any program under the National
Housing Act may not be increased above the
premium amounts in effect under such program on
October 1, 2006, unless the Secretary of
Housing and Urban Development determines that,
absent such increase, insurance of additional
mortgages under such program would, under the
Federal Credit Reform Act of 1990, require the
appropriation of new budget authority to cover
the costs (as such term is defined in section
502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a) of such insurance; and
(B) a premium increase pursuant to paragraph
(1) may be made only by rule making in
accordance with the procedures under section
553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B),
and (d)(3) of such section).

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) For the jurisdiction of a State, of
Indian tribes, or of an insular area or
participating jurisdiction that has an
extremely low percentage of affordable rental
housing, the extent to which the State, Indian
tribes, or the insular area or participating
jurisdiction has in the preceding fiscal year
increased the percentage of rental housing
within its jurisdiction that is affordable
housing.
(I) 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), or there has been enacted before such date a
joint resolution expressly disapproving the use of the
formula required under paragraph (1) and submitted to
the Congress pursuant to paragraph (3), 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.
(3) Submission to congress.--Notwithstanding any
other provision of this subtitle, any formula
established by the Secretary pursuant to this
subsection shall be submitted to the Committee on
Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate not less than 120 days before application of
the formula for purposes of determining formula amounts
under subsection (b) for a fiscal year. Such submission
shall be accompanied by a detailed explanation of the
factors under the formula and anticipated effects of
the formula.
(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 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 the formula amount for
the State.
(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 $750,000, the allocation
shall be $0, except that if the Secretary finds that
the jurisdiction has demonstrated a capacity to carry
out provisions of this subtitle and the State in which
such jurisdiction is located has authorized 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
jurisdiction's own sources available for use by the
jurisdiction in accordance with this subtitle, the
jurisdiction's allocation for a fiscal year shall be
the formula amount for the jurisdiction; and
(2) in the case of any jurisdiction whose allocation
is $0 by operation of paragraph (1), 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, 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 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)), 25 percent 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. Amounts to be considered eligible
contributions under this paragraph shall not exceed 33
percent of the total cost of the eligible activity.
(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.
(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 carried out in such area.
(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, including
priority housing needs in rural areas, 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 experience of the applicant,
including its principals, in carrying
out projects similar to the proposed
eligible activity;
(iii) the ability of the applicant to
obligate grant amounts for the proposed
eligible activities and to undertake
such activities 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 housing 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,
differences 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
located will have residents of various
incomes;
(viii) the extent of employment and
other economic opportunities for low-
income families in the area in which
the housing will be located;
(ix) 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;
(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
percentage 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
accessible to persons with
disabilities;
(xiii) 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;
(xiv) 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
(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,
development, and operation of
affordable housing, as the Secretary
shall by regulation provide.
A grantee may allocate a portion of funds under
this section for use by such grantee for
eligible activities pursuant to the selection
process under subparagraph (A).
(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, a faith-based organization, a community development
financial institution, a community development 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
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) Use of 10 percent for affordable housing for
families above 50 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 relating 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 requirements
under this subsection, 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 60 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.
(6) Review of targeting requirements.--The Secretary
shall assess the need for, and the appropriateness 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 expiration 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 adjustment of the targeting
requirements in paragraphs (1) through (4).
(d) Use for Rural Areas.--Of the Trust Fund grant amounts for
any fiscal year for any grantee that is a State or
participating local jurisdiction that includes any rural areas,
the State or participating local jurisdiction shall use a
portion for eligible activities located in rural areas that is
proportionate to the identified need for such activities in
such rural areas.
(e) Cost Limits.--The Secretary shall establish 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
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 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
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 percent or the percentage of
such families occupying the project at the time
funds are awarded for such project.
(C) Exceptions.--Subparagraph (A) shall not
apply in the case of a project having 25 or
fewer dwelling units that is--
(i) located in a census tract in
which the number of families having
incomes less than the poverty line is
less than 20 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.
(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-occupied 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 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--
(I) such recipient shall be
ineligible 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
recipient only pursuant to
application by the recipient
for such reinstatement and the
recipient may not apply to the
Secretary for such
reinstatement during the 12-
month period, or the 10-year
period in the case of a second
or subsequent such
determination, beginning upon
such determination; and
(II) 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;
(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;
and
(G) in the case of affordable one- to four-
family owner-occupied housing, downpayment
assistance, closing cost assistance, and
assistance for interest rate buy-downs.
(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 grant
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. 299A. 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. 299B. 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).

DISSENTING VIEWS

Increasing the availability of affordable single and
multifamily housing is essential to the goal of expanding
rental and homeownership opportunities for low-income families,
but the creation of a new bureaucracy, as envisioned in H.R.
2895, to address this problem is not the most efficient and
effective use of government resources. While we share the
Majority's commitment to meeting the affordable housing needs
of lower-income Americans, we differ on how best to achieve
that goal.
Siphoning money from Fannie Mae and Freddie Mac and the
programs administered by the Federal Housing Administration
(FHA) to pay for a National Affordable Housing Trust Fund would
translate into a tax on middle-income homeowners seeking to
purchase a home or refinance an existing mortgage through FHA.
Also, we believe that decisions regarding the creation and
preservation of affordable housing are best managed through
state and local housing trust funds rather than through a new
federal bureaucracy. A new trust fund would require HUD to
devise and administer a new set of rules and regulations,
diverting resources and time away from its other established
affordable housing programs.
Indeed, it is worth remembering that HUD already
administers over 30 separate federal programs designed to
promote affordable housing opportunities for low-income
Americans--including Section 8 vouchers and the Community
Development Block Grant (CDBG) program--and that these programs
consumed the bulk of HUD's $35 billion budget during the last
fiscal year. The trust fund outlined in H.R. 2895 is modeled in
large part on one of those HUD initiatives--the HOME Investment
Partnership Program (HOME).
In fact, the trust fund in H.R. 2895 is so similar in its
core requirements (i.e., rent structure, income targeting,
affordability periods, etc. to the HOME Program that it prompts
the question why it is necessary to create a new federal
bureaucracy to administer essentially the same program. A
better idea would be to run this program as a ``set-aside''
within the existing HOME Program. This set-aside would operate
through the HOME administrative structure, but would have
additional requirements imposing deeper targeting, longer use
restrictions, etc. Because 50 states, 585 local governments,
and four insular areas currently administer HOME, the
administrative structure to manage the trust fund as part of
HOME already exists. Making the trust fund part of HOME would
simplify administration of the program, as well as
substantially reduce ``start-up'' time for the new program.
Establishing a new Housing Trust Fund and promulgating new
regulations and rules at HUD, on the other hand, could take
months or even years to properly implement. Like all new
programs, the stand-alone Trust Fund program would have very
low expenditure rates until local staff come to understand the
new program--which was the case when the HOME program began in
1992. Rather than reinventing the wheel, a better approach
would be to take this opportunity to make an already successful
federal program work better by using HOME to increase
production and preservation of mixed-income housing units,
which would make rental housing affordable to very low and
extremely low income families. HOME has been operating
effectively for over 15 years, and because participating
jurisdictions already understand the HOME program, there would
be no learning curve for implementation.
In addition to opposing the creation of a huge new federal
program, we seriously question the wisdom of establishing a
National Housing Trust Fund paid for primarily by assessments
on the GSEs and the surplus generated by the FHA program. Most
Republicans believe that when it comes to meeting the
affordable housing needs of our very low-income citizens, there
simply has to be a better way than imposing what amounts to a
middle-class mortgage tax on the millions of Americans whose
mortgages are financed by the GSEs or diverting funds from an
FHA program that seeks to create homeownership opportunities
for low- and middle-income Americans.
In essence, using funds generated by the FHA surplus would
result in a redistribution of funds from one segment of the
population to another, by using fees paid by low- and moderate-
income homeowners to subsidize other housing activities. Many
Members on this side of the aisle question whether this
represents an appropriate use of the surplus generated by a
government insurance program. A far better approach, in our
view, would be to return that surplus to the intended
beneficiaries of the program, many of whom are senior citizens
with FHA-insured reverse mortgages, in the form of lower
insurance premiums. In addition, diverting premiums from the
insurance fund could also threaten the fiscal soundness and
solvency of FHA, which was only recently removed from GAO's
list of government programs at ``high risk'' for waste, fraud
and abuse. Moreover, current initiatives by the Bush
administration and recently passed legislation in the House
(H.R. 1852) contemplate a significant role for FHA in helping
to transition subprime borrowers out of high-cost
nontraditional loan products into more affordable FHA-insured
mortgages. Diverting FHA funds to unrelated affordable housing
programs arguably detracts from FHA's ability to serve this
important function in a fiscally responsible manner.
Finally, we continue to be concerned about the distribution
of the national affordable housing trust fund monies. H.R. 2895
includes a number of provisions intended to ensure that the
funds are used for housing and are not misused or spent for
other purposes, including: (a) a prohibition against any funds
being used for a recipient's administrative costs or expenses,
political activities, advocacy, lobbying, counseling, travel
expense, or preparation or advice on tax returns; (b) limits to
be set by HUD on how much grantees can spend on administrative
costs; (c) a requirement that HUD establish program
regulations, authority for HUD to audit each grantee's
compliance, and a requirement that each grantee develop systems
to ensure program compliance; and (d) authority for HUD to
impose penalties on grantees that do not comply with
requirements, including requiring grantees to reimburse misused
funds. However, even with these safeguards, political
considerations will inevitably enter into the grant process
administered by state and local government agencies, creating
the potential for the program to be used to benefit elected
officials and reward their political supporters, whether those
supporters be non-profit advocacy groups or for-profit
industries.
In sum, no one questions the very real affordable housing
challenges that lower-income Americans face, or the good
intentions of the authors of H.R. 2895 in seeking to meet those
challenges. However, creating a new federal bureaucracy is not,
in our view, the best course for achieving that shared
objective.

Spencer Bachus.
Donald A. Manzullo.
Frank D. Lucas.
Scott Garrett.
Stevan Pearce.
Adam H. Putnam.
Jeb Hensarling.
Judy Biggert.
Ron Paul.
Patrick T. McHenry.
Thomas Price.
Randy Neugebauer.
Ginny Brown-Waite.