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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.