---
kind: "section"
citation: "12 U.S.C. § 4568"
title: "12"
title_heading: "Banks and Banking"
number: "4568"
heading: "Housing Trust Fund"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4568"
units:
  - "Chapter 46 — Government Sponsored Enterprises"
  - "Subchapter I — Supervision and Regulation of Enterprises"
  - "Part B — Additional Authorities of the Director"
  - "Subpart 2 — housing goals"
---

# §4568. Housing Trust Fund

- (a) **Establishment and purpose—**
  - (1) **In general—** The [Secretary](/usc/12/1715z–22a.md?p=4) of Housing and Urban Development (in this section referred to as the “[Secretary](/usc/12/1715z–22a.md?p=4)”) shall establish and manage a Housing Trust Fund, which shall be funded with amounts allocated by the [enterprises](/usc/12/4502.md?p=10) under [section 4567 of this title](/usc/12/4567.md) and any amounts as are or may be appropriated, transferred, or credited to such Housing Trust Fund under any other provisions of law. The purpose of the Housing Trust Fund under this section is to provide grants to [States](/usc/12/4502.md?p=22) (as such term is defined in [section 4502 of this title](/usc/12/4502.md)) for use—
    - (A) to increase and preserve the supply of rental housing for extremely low- and [very low-income](/usc/12/4502.md?p=24-A) families, including homeless families; and
    - (B) to increase homeownership for extremely low- and [very low-income](/usc/12/4502.md?p=24-A) families.
  - (2) **Federal assistance—** For purposes of the application of Federal civil rights laws, all assistance provided from the Housing Trust Fund shall be considered Federal financial assistance.
- (b) **Allocations for HOPE bond payments—**
  - (1) **In general—** Notwithstanding [subsection (c)](#c), to help address the [mortgage](/usc/12/1707.md?p=a) crisis, of the amounts allocated pursuant to clauses (i) and (ii) of [section 4567(a)(1)(B) of this title](/usc/12/4567.md?p=a-1-B) and clauses (i) and (ii) of [section 4567(a)(2)(B) of this title](/usc/12/4567.md?p=a-2-B) in excess of amounts described in [section 4567(e) of this title](/usc/12/4567.md?p=e)—
    - (A) 100 percent of such excess shall be used to reimburse the Treasury for payments made pursuant to [section 1715z–23(w)(1)(C) of this title](/usc/12/1715z–23.md?p=w-1-C) in calendar year 2009;
    - (B) 50 percent of such excess shall be used to reimburse the Treasury for such payments in calendar year 2010; and
    - (C) 25 percent of such excess shall be used to reimburse the Treasury for such payments in calendar year 2011.
  - (2) **Excess funds—** At the termination of the HOPE for Homeowners Program established under [section 1715z–23 of this title](/usc/12/1715z–23.md), if amounts used to reimburse the Treasury under [paragraph (1)](#b-1) exceed the total net cost to the Government of the HOPE for Homeowners Program, such amounts shall be used for their original purpose, as described in paragraphs (1)(B) and (2)(B) of [section 4567(a) of this title](/usc/12/4567.md?p=a).
  - (3) **Treasury fund—** The amounts referred to in subparagraphs [(A)](#b-1-A) through [(C)](#b-1-C) of paragraph (1) shall be deposited into a fund established in the Treasury of the United States by the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury for such purpose.
- (c) **Allocation for Housing Trust Fund in fiscal year 2010 and subsequent years—**
  - (1) **In general—** Except as provided in [subsection (b)](#b), the [Secretary](/usc/12/1715z–22a.md?p=4) shall distribute the amounts allocated for the Housing Trust Fund under this section to provide affordable housing as described in this subsection.
  - (2) **Permissible designees—** A [State](/usc/12/4502.md?p=22) receiving grant amounts under this subsection may designate a [State](/usc/12/4502.md?p=22) housing finance [agency](/usc/12/4502.md?p=2), housing and community development entity, tribally designated housing entity (as such term is defined in [section 4103 of title 25](/usc/25/4103.md)), or any other qualified instrumentality of the [State](/usc/12/4502.md?p=22) to receive such grant amounts.
  - (3) **Distribution to States by needs-based formula—**
    - (A) **In general—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall, by regulation, establish a formula within 12 months of July 30, 2008, to distribute amounts made available under this subsection to each [State](/usc/12/4502.md?p=22) to provide affordable housing to extremely low- and [very low-income](/usc/12/4502.md?p=24-A) households.
    - (B) **Basis for formula—** The formula required under [subparagraph (A)](#c-3-A) shall include the following:
      - (i) The ratio of the [shortage of standard rental units both affordable and available to extremely low-income renter households](/usc/12/4502.md?p=30-A) in the [State](/usc/12/4502.md?p=22) to the aggregate [shortage of standard rental units both affordable and available to extremely low-income renter households](/usc/12/4502.md?p=30-A) in all the [States](/usc/12/4502.md?p=22).
      - (ii) The ratio of the [shortage of standard rental units both affordable and available to very low-income renter households](/usc/12/4502.md?p=31-A) in the [State](/usc/12/4502.md?p=22) to the aggregate [shortage of standard rental units both affordable and available to very low-income renter households](/usc/12/4502.md?p=31-A) in all the [States](/usc/12/4502.md?p=22).
      - (iii) The ratio of [extremely low-income](/usc/12/4502.md?p=27) renter households in the [State](/usc/12/4502.md?p=22) living with either (I) incomplete kitchen or plumbing facilities, (II) more than 1 [person](/usc/12/5481.md?p=19) per room, or (III) paying more than 50 percent of income for housing costs, to the aggregate number of [extremely low-income](/usc/12/4502.md?p=27) renter households living with either (IV) incomplete kitchen or plumbing facilities, (V) more than 1 [person](/usc/12/5481.md?p=19) per room, or (VI) paying more than 50 percent of income for housing costs in all the [States](/usc/12/4502.md?p=22).
      - (iv) The ratio of [very low-income](/usc/12/4502.md?p=24-A) renter households in the [State](/usc/12/4502.md?p=22) paying more than 50 percent of income on rent relative to the aggregate number of [very low-income](/usc/12/4502.md?p=24-A) renter households paying more than 50 percent of income on rent in all the [States](/usc/12/4502.md?p=22).
      - (v) The resulting sum calculated from the factors described in clauses [(i)](#c-3-B-i) through [(iv)](#c-3-B-iv) shall be multiplied by the relative cost of construction in the [State](/usc/12/4502.md?p=22). For purposes of this subclause,[^1] the term “cost of construction”—
        - (I) means the cost of construction or building rehabilitation in the [State](/usc/12/4502.md?p=22) relative to the national cost of construction or building rehabilitation; and
        - (II) shall be calculated such that values higher than 1.0 indicate that the [State](/usc/12/4502.md?p=22)’s construction costs are higher than the national average, a value of 1.0 indicates that the [State](/usc/12/4502.md?p=22)’s construction costs are exactly the same as the national average, and values lower than 1.0 indicate that the [State](/usc/12/4502.md?p=22)’s cost of construction are lower than the national average.
    - (C) **Priority—** The formula required under [subparagraph (A)](#c-3-A) shall give priority emphasis and consideration to the factor described in [subparagraph (B)(i)](#c-3-B-i).
  - (4) **Allocation of grant amounts—**
    - (A) **Notice—** Not later than 60 days after the date that the [Secretary](/usc/12/1715z–22a.md?p=4) determines the formula amounts described in [paragraph (3)](#c-3), the [Secretary](/usc/12/1715z–22a.md?p=4) shall caused[^2] to be published in the Federal Register a notice that such amounts shall be so available.
    - (B) **Grant amount—** In each fiscal year other than fiscal year 2009, the [Secretary](/usc/12/1715z–22a.md?p=4) shall make a grant to each [State](/usc/12/4502.md?p=22) in an amount that is equal to the formula amount determined under [paragraph (3)](#c-3) for that [State](/usc/12/4502.md?p=22).
    - (C) **Minimum State allocations—** If the formula amount determined under [paragraph (3)](#c-3) for a fiscal year would allocate less than $3,000,000 to any of the 50 [States](/usc/12/4502.md?p=22) of the United States or the District of Columbia, the allocation for such [State](/usc/12/4502.md?p=22) of the United States or the District of Columbia shall be $3,000,000, and the increase shall be deducted pro rata from the allocations made to all other of the [States](/usc/12/4502.md?p=22) (as such term is defined in [section 4502 of this title](/usc/12/4502.md)).
  - (5) **Allocation plans required—**
    - (A) **In general—** For each year that a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity receives a grant under this subsection, the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity shall establish an allocation plan. Such plan shall—
      - (i) set forth a plan for the distribution of grant amounts received by the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity for such year;
      - (ii) be based on priority housing needs, as determined by the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity in accordance with the regulations established under [subsection (g)(2)(D)](#g-2-D);
      - (iii) comply with [paragraph (6)](#c-6); and
      - (iv) include performance goals that comply with the requirements established by the [Secretary](/usc/12/1715z–22a.md?p=4) pursuant to [subsection (g)(2)](#g-2).
    - (B) **Establishment—** In establishing an allocation plan under this paragraph, a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity shall—
      - (i) notify the public of the establishment of the plan;
      - (ii) provide an opportunity for public comments regarding the plan;
      - (iii) consider any public comments received regarding the plan; and
      - (iv) make the completed plan available to the public.
    - (C) **Contents—** An allocation plan of a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this paragraph shall set forth the requirements for eligible recipients under [paragraph (8)](#c-8) to apply for such grant amounts, including a requirement that each such application include—
      - (i) a description of the eligible activities to be conducted using such assistance; and
      - (ii) a certification by the eligible recipient applying for such assistance that any housing units assisted with such assistance will comply with the requirements under this section.
  - (6) **Selection of activities funded using Housing Trust Fund grant amounts—** Grant amounts received by a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this subsection may be used, or committed for use, only for activities that—
    - (A) are eligible under [paragraph (7)](#c-7) for such use;
    - (B) comply with the applicable allocation plan of the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under [paragraph (5)](#c-5); and
    - (C) are selected for funding by the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity in accordance with the process and criteria for such selection established pursuant to [subsection (g)(2)(D)](#g-2-D).
  - (7) **Eligible activities—** Grant amounts allocated to a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this subsection shall be eligible for use, or for commitment for use, only for assistance for—
    - (A) the production, preservation, and rehabilitation of rental housing, including housing under the programs identified in [section 4565(a)(2)(B) of this title](/usc/12/4565.md) and for operating costs, except that not less than 75 percent of such grant amounts shall be used for the benefit only of [extremely low-income](/usc/12/4502.md?p=27) families or families with incomes at or below the poverty line (as such term is defined in [section 9902 of title 42](/usc/42/9902.md), including any revision required by such section) applicable to a family of the size involved, and not more than 25 percent for the benefit only of [very low-income](/usc/12/4502.md?p=24-A) families; and
    - (B) the production, preservation, and rehabilitation of housing for homeownership, including such forms as down payment assistance, closing cost assistance, and assistance for interest rate buy-downs, that—
      - (i) is available for purchase only for use as a principal residence by families that qualify both as—
        - (I) extremely low- and [very low-income](/usc/12/4502.md?p=24-A) families at the times described in subparagraphs [(A)](/usc/12/215.md) through [(C)](/usc/12/215.md) of section 215(b)(2)[^3] of the Cranston-Gonzalez National Affordable Housing Act ([42 U.S.C. 12745(b)(2)](/usc/42/12745.md?p=b-2)); and
        - (II) first-time homebuyers, as such term is defined in section 104 of the Cranston-Gonzalez National Affordable Housing Act ([42 U.S.C. 12704](/usc/42/12704.md)), except that any reference in such section to assistance under title II of such Act [[42 U.S.C. 12721](/usc/42/12721.md) et seq.] shall for purposes of this subsection be considered to refer to assistance from affordable housing fund grant amounts;
      - (ii) has an initial purchase price that meets the requirements of [section 215(b)(1)](/usc/12/215.md)[^3] of the Cranston-Gonzalez National Affordable Housing Act;
      - (iii) is subject to the same resale restrictions established under [section 215(b)(3)](/usc/12/215.md)[^3] of the Cranston-Gonzalez National Affordable Housing Act and applicable to the participating jurisdiction that is the [State](/usc/12/4502.md?p=22) in which such housing is located; and
      - (iv) is made available for purchase only by, or in the case of assistance under this subsection, is made available only to homebuyers who have, before purchase completed a program of independent financial education and counseling from an eligible organization that meets the requirements of section 132 of the Federal Housing Finance Regulatory Reform Act of 2008.[^3]
  - (8) **Tenant protections and public participation—** 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 subchapter (including housing provided with such grant amounts) shall comply with and be operated in compliance with—
    - (A) laws relating to tenant protections and tenant rights to participate in decision making regarding their residences;
    - (B) laws requiring public participation, including laws relating to Consolidated Plans, Qualified Allocation Plans, and Public Housing [Agency](/usc/12/4502.md?p=2) Plans; and
    - (C) fair housing laws and laws regarding accessibility in federally assisted housing, including [section 794 of title 29](/usc/29/794.md).
  - (9) **Eligible recipients—** Grant amounts allocated to a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this subsection may be provided only to a recipient that is an organization, [agency](/usc/12/4502.md?p=2), or other entity (including a for-profit entity or a [nonprofit entity](/usc/12/1441a–1.md?p=2)) that—
    - (A) has demonstrated experience and capacity to conduct an eligible activity under [paragraph (7)](#c-7), as evidenced by its ability to—
      - (i) own, construct or rehabilitate, manage, and operate an affordable multifamily rental housing development;
      - (ii) design, construct or rehabilitate, and market affordable housing for homeownership; or
      - (iii) provide forms of assistance, such as down payments, closing costs, or interest rate buy-downs for purchasers;
    - (B) demonstrates the ability and financial capacity to undertake, comply, and manage the eligible activity;
    - (C) demonstrates its familiarity with the requirements of any other Federal, [State](/usc/12/4502.md?p=22), 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
    - (D) makes such assurances to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity as the [Secretary](/usc/12/1715z–22a.md?p=4) shall, by regulation, require to ensure that the recipient will comply with the requirements of this subsection during the entire period that begins upon selection of the recipient to receive such grant amounts and ending upon the conclusion of all activities under [paragraph (8)](#c-8) that are engaged in by the recipient and funded with such grant amounts.
  - (10) **Limitations on use—**
    - (A) **Required amount for homeownership activities—** Of the aggregate amount allocated to a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this subsection not more than 10 percent shall be used for activities under [subparagraph (B)](#c-7-B) of paragraph (7).
    - (B) **Deadline for commitment or use—** Grant amounts allocated to a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this subsection shall be used or committed for use within 2 years of the date that such grant amounts are made available to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity. The [Secretary](/usc/12/1715z–22a.md?p=4) shall recapture any such amounts not so used or committed for use and reallocate such amounts under this subsection in the first year after such recapture.
    - (C) **Use of returns—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall, by regulation, provide that any return on a loan or other investment of any grant amount used by a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity to provide a loan under this subsection shall be treated, for purposes of availability to and use by the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity, as a grant amount authorized under this subsection.
    - (D) **Prohibited uses—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall, by regulation—
      - (i) set forth prohibited uses of grant amounts allocated under this subsection, which shall include use for—
        - (I) political activities;
        - (II) advocacy;
        - (III) lobbying, whether directly or through other parties;
        - (IV) counseling services;
        - (V) travel expenses; and
        - (VI) preparing or providing advice on tax returns;

      and for the purposes of this subparagraph, the prohibited use of funds for political activities includes influencing the selection, nomination, election, or appointment of one or more candidates to any Federal, [State](/usc/12/4502.md?p=22) or local office as codified in [section 501 of title 26](/usc/26/501.md);

      - (ii) provide that, except as provided in [clause (iii)](#c-10-D-iii), grant amounts of a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity may not be used for administrative, outreach, or other costs of—
        - (I) the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity; or
        - (II) any other recipient of such grant amounts; and
      - (iii) limit the amount of any grant amounts for a year that may be used by the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity for administrative costs of carrying out the program required under this subsection, including home ownership counseling, to a percentage of such grant amounts of the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity for such year, which may not exceed 10 percent.
    - (E) **Prohibition of consideration of use for meeting housing goals or duty to serve—** In determining compliance with the housing goals under this subpart and the duty to serve underserved markets under [section 4565 of this title](/usc/12/4565.md), the [Director](/usc/12/4502.md?p=9) may not consider any grant amounts used under this section for eligible activities under [paragraph (7)](#c-7). The [Director](/usc/12/4502.md?p=9) shall give [credit](/usc/12/5481.md?p=7) toward the achievement of such housing goals and such duty to serve underserved markets to purchases by the [enterprises](/usc/12/4502.md?p=10) of [mortgages](/usc/12/1707.md?p=a) for housing that receives funding from such grant amounts, but only to the extent that such purchases by the [enterprises](/usc/12/4502.md?p=10) are funded other than with such grant amounts.
- (d) **Reduction for failure to obtain return of misused funds—** If in any year a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity fails to obtain reimbursement or return of the full amount required under [subsection (e)(1)(B)](#e-1-B) to be reimbursed or returned to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity during such year—
  - (1) except as provided in [paragraph (2)](#d-2)—
    - (A) the amount of the grant for the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity for the succeeding year, as determined pursuant to this section, shall be reduced by the amount by which such amounts required to be reimbursed or returned exceed the amount actually reimbursed or returned; and
    - (B) the amount of the grant for the succeeding year for each other [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity whose grant is not reduced pursuant to [subparagraph (A)](#d-1-A) shall be increased by the amount determined by applying the formula established pursuant to this section to the total amount of all reductions for all [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entities for such year pursuant to [subparagraph (A)](#d-1-A); or
  - (2) in any case in which such failure to obtain reimbursement or return occurs during a year immediately preceding a year in which grants under this section will not be made, the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity shall pay to the [Secretary](/usc/12/1715z–22a.md?p=4) for reallocation among the other grantees an amount equal to the amount of the reduction for the entity that would otherwise apply under [paragraph (1)(A)](#d-1-A).
- (e) **Accountability of recipients and grantees—**
  - (1) **Recipients—**
    - (A) **Tracking of funds—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall—
      - (i) require each [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity to develop and maintain a system to ensure that each recipient of assistance under this section uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and
      - (ii) establish minimum requirements for agreements, between the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity and recipients, regarding assistance under this section, which shall include—
        - (I) appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the assistance to the recipient to ensure compliance with the limitations and requirements of this section and the regulations under this section; and
        - (II) any other requirements that the [Secretary](/usc/12/1715z–22a.md?p=4) determines are necessary to ensure appropriate administration and compliance.
    - (B) **Misuse of funds—**
      - (i) **Reimbursement requirement—** If any recipient of assistance under this section is determined, in accordance with [clause (ii)](#e-1-B-ii), to have used any such amounts in a manner that is materially in [violation](/usc/12/4502.md?p=25) of this section, the regulations issued under this section, or any requirements or conditions under which such amounts were provided, the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity shall require that, within 12 months after the determination of such misuse, the recipient shall reimburse the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity for such misused amounts and return to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity any such amounts 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 made by the [Secretary](/usc/12/1715z–22a.md?p=4) or made by the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity, provided that—
        - (I) the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity provides notification of the determination to the [Secretary](/usc/12/1715z–22a.md?p=4) for review, in the discretion of the [Secretary](/usc/12/1715z–22a.md?p=4), of the determination; and
        - (II) the [Secretary](/usc/12/1715z–22a.md?p=4) does not subsequently reverse the determination.
  - (2) **Grantees—**
    - (A) **Report—**
      - (i) **In general—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall require each [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity receiving grant amounts in any given year under this section to submit a report, for such year, to the [Secretary](/usc/12/1715z–22a.md?p=4) that—
        - (I) describes the activities funded under this section during such year with such grant amounts; and
        - (II) the[^4] manner in which the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity complied during such year with any allocation plan established pursuant to [subsection (c)](#c).
      - (ii) **Public availability—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall make such reports pursuant to this subparagraph publicly available.
    - (B) **Misuse of funds—** If the [Secretary](/usc/12/1715z–22a.md?p=4) determines, after reasonable notice and opportunity for hearing, that a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity has failed to comply substantially with any provision of this section, and until the [Secretary](/usc/12/1715z–22a.md?p=4) is satisfied that there is no longer any such failure to comply, the [Secretary](/usc/12/1715z–22a.md?p=4) shall—
      - (i) reduce the amount of assistance under this section to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity by an amount equal to the amount of grant amounts which were not used in accordance with this section;
      - (ii) require the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity to repay the [Secretary](/usc/12/1715z–22a.md?p=4) any amount of the grant which was not used in accordance with this section;
      - (iii) limit the availability of assistance under this section to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity to activities or recipients not affected by such failure to comply; or
      - (iv) terminate any assistance under this section to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity.
- (f) **Definitions—** For purposes of this section, the following definitions shall apply:
  - (1) **Extremely low-income renter household—** The term “[extremely low-income](/usc/12/4502.md?p=27) renter household” means a household whose income is not in excess of 30 percent of the area [median income](/usc/12/4502.md?p=15), with adjustments for smaller and larger families, as determined by the [Secretary](/usc/12/1715z–22a.md?p=4).
  - (2) **Recipient—** The term “recipient” means an individual or entity that receives assistance from a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity from amounts made available to the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this section.
  - (3) **Shortage of standard rental units both affordable and available to extremely low-income renter households—**
    - (A) **In general—** The term “[shortage of standard rental units both affordable and available to extremely low-income renter households](/usc/12/4502.md?p=30-A)” means for any [State](/usc/12/4502.md?p=22) or other geographical area the gap between—
      - (i) the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 30 percent of the adjusted area [median income](/usc/12/4502.md?p=15) as determined by the [Secretary](/usc/12/1715z–22a.md?p=4) that are occupied by [extremely low-income](/usc/12/4502.md?p=27) renter households or are vacant for rent; and
      - (ii) the number of [extremely low-income](/usc/12/4502.md?p=27) renter households.
    - (B) **Rule of construction—** If the number of units described in [subparagraph (A)(i)](#f-3-A-i) exceeds the number of [extremely low-income](/usc/12/4502.md?p=27) households as described in [subparagraph (A)(ii)](#f-3-A-ii), there is no shortage.
  - (4) **Shortage of standard rental units both affordable and available to very low-income renter households—**
    - (A) **In general—** The term “[shortage of standard rental units both affordable and available to very low-income renter households](/usc/12/4502.md?p=31-A)” means for any [State](/usc/12/4502.md?p=22) or other geographical area the gap between—
      - (i) the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 50 percent of the adjusted area [median income](/usc/12/4502.md?p=15) as determined by the [Secretary](/usc/12/1715z–22a.md?p=4) that are occupied by [very low-income](/usc/12/4502.md?p=24-A) renter households or are vacant for rent; and
      - (ii) the number of [very low-income](/usc/12/4502.md?p=24-A) renter households.
    - (B) **Rule of construction—** If the number of units described in [subparagraph (A)(i)](#f-4-A-i) exceeds the number of [very low-income](/usc/12/4502.md?p=24-A) households as described in [subparagraph (A)(ii)](#f-4-A-ii), there is no shortage.
  - (5) **Very low-income family—** The term “[very low-income](/usc/12/4502.md?p=24-A) family” has the meaning given such term in [section 4502 of this title](/usc/12/4502.md), except that such term includes any family that resides in a rural area that has an income that does not exceed the poverty line (as such term is defined in [section 9902(2) of title 42](/usc/42/9902.md?p=2), including any revision required by such section) applicable to a family of the size involved.
  - (6) **Very low-income renter households—** The term “[very low-income](/usc/12/4502.md?p=24-A) renter households” means a household whose income is in excess of 30 percent but not greater than 50 percent of the area [median income](/usc/12/4502.md?p=15), with adjustments for smaller and larger families, as determined by the [Secretary](/usc/12/1715z–22a.md?p=4).
- (g) **Regulations—**
  - (1) **In general—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall issue regulations to carry out this section.
  - (2) **Required contents—** The regulations issued under this subsection shall include—
    - (A) a requirement that the [Secretary](/usc/12/1715z–22a.md?p=4) ensure that the use of grant amounts under this section by [States](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entities is audited not less than annually to ensure compliance with this section;
    - (B) authority for the [Secretary](/usc/12/1715z–22a.md?p=4) to audit, provide for an audit, or otherwise verify a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity’s activities to ensure compliance with this section;
    - (C) a requirement that, for the purposes of subparagraphs [(A)](#g-2-A) and [(B)](#g-2-B), any financial statement submitted by a grantee or recipient to the [Secretary](/usc/12/1715z–22a.md?p=4) shall be reviewed by an independent certified public accountant in accordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public Accountants;
    - (D) requirements for a process for application to, and selection by, each [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity for activities meeting the [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity’s priority housing needs to be funded with grant amounts under this section, which shall provide for priority in funding to be based upon—
      - (i) geographic diversity;
      - (ii) ability to obligate amounts and undertake activities so funded in a timely manner;
      - (iii) in the case of rental housing projects under [subsection (c)(7)(A)](#c-7-A), the extent to which rents for units in the project funded are affordable, especially for [extremely low-income](/usc/12/4502.md?p=27) families;
      - (iv) in the case of rental housing projects under [subsection (c)(7)(A)](#c-7-A), the extent of the duration for which such rents will remain affordable;
      - (v) the extent to which the application makes use of other funding sources; and
      - (vi) the merits of an applicant’s proposed eligible activity;
    - (E) requirements to ensure that grant amounts provided to a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity under this section that are used for rental housing under [subsection (c)(7)(A)](#c-7-A) are used only for the benefit of extremely low- and [very low-income](/usc/12/4502.md?p=24-A) families; and
    - (F) requirements and standards for establishment, by a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity, for use of grant amounts in 2009 and subsequent years of performance goals, benchmarks, and timetables for the production, preservation, and rehabilitation of affordable rental and homeownership housing with such grant amounts.
- (h) **Affordable housing trust fund—** If, after July 30, 2008, in any year, there is enacted any provision of Federal law establishing an affordable housing trust fund other than under this chapter for use only for grants to provide affordable rental housing and affordable homeownership opportunities, and the subsequent year is a year referred to in [subsection (c)](#c), the [Secretary](/usc/12/1715z–22a.md?p=4) shall in such subsequent year and any remaining years referred to in [subsection (c)](#c) transfer to such affordable housing trust fund the aggregate amount allocated pursuant to [subsection (c)](#c) in such year. Notwithstanding any other provision of law, assistance provided using amounts transferred to such affordable housing trust fund pursuant to this subsection may not be used for any of the activities specified in clauses (i) through (vi) of subsection (c)(9)(D).
- (i) **Funding accountability and transparency—** Any grant under this section to a grantee by a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity, any assistance provided to a recipient by a [State](/usc/12/4502.md?p=22) or [State](/usc/12/4502.md?p=22) designated entity, and any grant, award, or other assistance from an affordable housing trust fund referred to in [subsection (h)](#h) shall be considered a Federal award for purposes of the Federal Funding Accountability and Transparency Act of 2006 ([31 U.S.C. 6101](/usc/31/6101.md) note). Upon the request of the [Director](/usc/12/4502.md?p=9) of the Office of Management and Budget, the [Secretary](/usc/12/1715z–22a.md?p=4) shall obtain and provide such information regarding any such grants, assistance, and awards as the [Director](/usc/12/4502.md?p=9) of the Office of Management and Budget considers necessary to comply with the requirements of such Act, as applicable, pursuant to the preceding sentence.

## Footnotes

[^1]: So in original. Probably should be “this clause,”.
[^2]: So in original. Probably should be “cause”.
[^3]: See References in Text note below.
[^4]: So in original. A word appears to be missing before “the”.

## Source credit

(Pub. L. 102–550, title XIII, § 1338, as added Pub. L. 110–289, div. A, title I, § 1131(b), July 30, 2008, 122 Stat. 2712.)

## Notes

### Editorial Notes

### References in Text

Section 4103 of title 25, referred to in subsec. (c)(2), was in the original “section 4 of the Native American Housing Assistance and Self-Determination Act of 1997 (25 U.S.C. 4103)”, and was translated as meaning section 4 of the Native American Housing Assistance and Self-Determination Act of 1996, to reflect the probable intent of Congress.

The Cranston-Gonzalez National Affordable Housing Act, referred to in subsec. (c)(7)(B)(i)–(iii), is Pub. L. 101–625, Nov. 28, 1990, 104 Stat. 4079. Title II of the Act, known as the HOME Investment Partnerships Act, is classified principally to subchapter II (§ 12721 et seq.) of chapter 130 of Title 42, The Public Health and Welfare. Subparagraphs (A) to (C) of section 215(b)(2) of the Act were redesignated cls. (i) to (iii) of section 215(b)(1)(B) and section 215(b)(1) and (3) of the Act was redesignated section 215(b)(1)(A) and (C), respectively, by Pub. L. 119–101, title V, § 501(h)(1)(A), (C), (D), July 11, 2026, 140 Stat. 908, 909. Section 215(b) is classified to section 12745(b) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 12701 of Title 42 and Tables.

Section 132 of the Federal Housing Finance Regulatory Reform Act of 2008, referred to in subsec. (c)(7)(B)(iv), probably means section 1132 of Pub. L. 110–289, which is set out as a note under section 1701x of this title.

This chapter, referred to in subsec. (h), was in the original “this title”, meaning title XIII of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3941, which is classified principally to this chapter. For complete classification of title XIII to the Code, see Short Title note set out under section 4501 of this title and Tables.

The Federal Funding Accountability and Transparency Act of 2006, referred to in subsec. (i), is Pub. L. 109–282, Sept. 26, 2006, 120 Stat. 1186, which is set out as a note under section 6101 of Title 31, Money and Finance.

### Prior Provisions

A prior section 1338 of Pub. L. 102–550, title XIII, Oct. 28, 1992, 106 Stat. 3964, was set out as a note under section 4562 of this title, prior to repeal by Pub. L. 110–289, div. A, title I, § 1122(a)(2), July 30, 2008, 122 Stat. 2689.