,,ii #aaith ,,congress #b;d ,session ,s4 #dggc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #aa1 #bjbf,mr4 ,wyden introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to provide rental vouchers for the homeless1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,decent1 ,affordable1 ,safe ,housing for ,all ,act or the ,,dash ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,,title ,i--,housing assistance,subtitle ,a--,general housing assistance,sec4 #aaa4 ,rental vouchers for the homeless4,sec4 #aab4 ,land acquisition and construction4,sec4 #aac4 ,modular construction pilot program4,sec4 #aad4 ,supporting pro-housing development4,sec4 #aae4 ,permanent authorization of appropriations for ,mc,kinney-,vento ,homeless ,assistance ,act grants4,subtitle ,b--,rural housing assistance,sec4 #aba4 ,rural housing reinvestment4,sec4 #abb4 ,permanent establishment of housing preservation and revitalization program4,sec4 #abc4 ,eligibility for rural housing vouchers4,sec4 #abd4 ,amount of voucher assistance4,sec4 #abe4 ,use of available rental assistance4,sec4 #abf4 ,funding for multifamily technical improvements4,sec4 #abg4 ,plan for preserving affordability of rental projects4,,title ,,ii--,revenue provisions,sec4 #bja4 ,increases in ,state allocations4,sec4 #bjb4 ,buildings designated to serve extremely low-income households4,sec4 #bjc4 ,inclusion of ,indian areas as difficult development areas for purposes of certain buildings4,sec4 #bjd4 ,inclusion of rural areas as difficult development areas4,sec4 #bje4 ,increase in credit for bond-financed projects designated by housing credit agency4,sec4 #bjf4 ,repeal of qualified contract option4,sec4 #bjg4 ,modification and clarification of rights relating to building purchase4,sec4 #bjh4 ,prohibition of local approval and contribution requirements4,sec4 #bji4 ,increase in credit for low-income housing supportive services4,sec4 #baj4 ,study of tax incentives for the conversion of commercial property to affordable housing4,sec4 #baa4 ,renters credit4,sec4 #bab4 ,middle-income housing tax credit4,sec4 #bac4 ,neighborhood homes credit4,sec4 #bad4 ,first-time homebuyer refundable credit4,sec4 #bae4 ,losses from the sale of principal residences4,sec4 #baf4 ,repeal of limitation on personal casualty loss deduction4,sec4 #bag4 ,permanent exclusion from gross income of discharge of qualified principal residence indebtedness4 ,i ,housing assistance ,a ,general housing assistance #aaa4 ,rental vouchers for the homeless 7a7 ,in general ,section #h7o7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f7o77 is amended by adding at the end the following3 7#bb7 ,rental vouchers for the homeless 7,a7 ,definitions ,in this paragraph3 7i7 ,at risk of homelessness ,the term at risk of homelessness has the meaning given the term in section #dja7a7 of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacfj71 except that #ej percent shall be substituted for #cj percent in subparagraph 7,a7 of that section4 7ii7 ,capacity-building period ,the term capacity-building period means the #b-year period beginning on the date on which the formula is established under subparagraph 7,e77ii74 7iii7 ,continuum of care ,the term continuum of care has the meaning given the term in section #egh4c of title #bd1 ,code of ,federal ,regulations1 or any successor regulation4 7iv7 ,eligible public housing agency ,the term eligible public housing agency means a public housing agency that-- 7,i7 administers assistance under this subsection through a contract for annual contributions entered into with the ,secretary2 7,,ii7 has a partnership with a public child welfare agency and a continuum of care that-- 7aa7 has a system for identifying and referring eligible recipients for assistance under this paragraph from the public housing agency1 including by providing a written certification that the eligible recipient is eligible to receive the assistance2 and 7bb7 will1 to the greatest extent practicable1 provide or facilitate the provision of supportive services to those eligible recipients2 and 7,,iii7 submits to the ,secretary a statement describing-- 7aa7 how the public housing agency will connect eligible recipients with local community resources1 to the extent available2 and 7bb7 the plan for use of capacity-building funding under subparagraph 7,e71 including-- 7,,aa7 a timeline for the use of that funding within the capacity-building period2 7,,bb7 hiring and personnel needs2 7,,cc7 physical infrastructure needs2 and 7,,dd7 technological infrastructure needs1 including upgrades to the ,,hmis1 and any other capacity-related investments that are necessary to administer assistance under this paragraph4 7v7 ,eligible recipient ,the term eligible recipient means any individual or family experiencing homelessness or at risk of homelessness with an income that is less than #ej percent of the area median income4 7vi7 ,experiencing homelessness2 homeless ,the terms experiencing homelessness and homeless means an individual or family who is-- 7,i7 living in a place not meant for human habitation or in an emergency shelter2 7,,ii7 living in transitional housing for homeless persons and was homeless before entering transitional housing or an emergency shelter2 7,,iii7 fleeing domestic violence2 or 7,,iv7 at risk of homelessness4 7vii7 ,,hmis ,the term ,,hmis means the community-wide homeless management information system described in section #djb7;f77#c77;,d7 of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacfj;a7f77#c77;,d774 7viii7 ,public housing agency ,the term public housing agency includes a tribally designated housing entity4 7ix7 ,referral ,the term referral means an affirmative connection between the voucher recipient and the organization providing services to the voucher recipient4 7x7 ,service coordinator ,the term service coordinator means an individual employed directly by a public housing agency who provides general case management and referral services to each voucher recipient served by the public housing agency1 which shall include-- 7,i7 an individual intake screening of each voucher recipient to evaluate the voucher recipient's need for supportive services2 and 7,,ii7 referral to outside services1 including cooperation and collaboration with a continuum of care4 7xi7 ,source of income ,the term source of income means income from any lawful source1 including-- 7,i7 income from any legal employment2 and 7,,ii7 any assistance1 benefit1 or subsidy through any ,federal1 ,state1 or local program1 whether the program is administered by a governmental or nongovernmental entity4 7xii7 ,tribally designated housing entity ,the term tribally designated housing entity has the meaning given the term in section #d of the ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif 7#be ,u4,s4,c4 #dajc74 7xiii7 ,voucher recipient ,the term voucher recipient means an individual or family receiving a voucher under this paragraph4 7xiv7 ,youth ,the term youth means an individual under the age of #be4 7,b7 ,vouchers 7i7 ,provision of vouchers 7,i7 ,in general ,the ,secretary shall provide vouchers for rental assistance on behalf of each eligible recipient in accordance with this paragraph4 7,,ii7 ,direct appropriation ,subject to subclause 7,,iii71 there is appropriated1 out of any money in the ,treasury not otherwise appropriated1 for providing rental voucher assistance under this paragraph for fiscal year #bjbf and each fiscal year thereafter-- 7aa7 the amount necessary to fund the provision of a voucher for rental assistance under this paragraph on behalf of each eligible recipient2 7bb7 the amount necessary to provide administrative fees under clause 7ii7 in connection to each voucher for rental assistance provided under this paragraph2 and 7cc7 the amount necessary to fund annual renewals of the vouchers provided under this paragraph4 7,,iii7 ,number of vouchers ,the ,secretary shall provide-- 7aa7 #bej1jjj vouchers under this paragraph in fiscal year #bjbf2 and 7bb7 #djj1jjj vouchers under this paragraph in each fiscal year thereafter until the ,secretary determines that a smaller number of vouchers is sufficient to provide all eligible recipients with vouchers4 7ii7 ,administrative fee for ancillary costs ,the ,secretary shall provide a public housing agency that requests a voucher under this paragraph an administrative fee sufficient to provide assistance to the voucher recipient for security deposits1 application fees1 moving costs1 first or last month's rent1 or other significant barriers to establishing use of the voucher and a lease1 in an amount that is not more than #c months' rent for the voucher recipient4 7iii7 ,payment standard ,the payment standard for a voucher provided under this paragraph may not exceed #abe percent of the fair market rental in the jurisdiction in which the voucher is administered4 7iv7 ,supplemental voucher payment 7,i7 ,in general ,an eligible public housing agency may supplement the amount of a voucher provided under this paragraph in any case in which-- 7aa7 the amount of the voucher is insufficient to cover the cost of a dwelling unit within the jurisdiction of the eligible public housing agency and that insufficiency may result in a voucher recipient losing housing and becoming homeless or doubled up2 or 7bb7 the eligible public housing agency submits to the ,secretary a waiver request for recalculation of the small area fair market rent applicable to the dwelling unit1 which the ,secretary shall approve or deny within #de days of submission of the request4 7,,ii7 ,payment upon denial ,an eligible public housing agency may supplement the amount of a voucher under subclause 7,i7 even if the ,secretary denies the request submitted under subclause 7,i77aa71 provided that the supplementation of the voucher amount is necessary to maintain housing for the voucher recipient4 7v7 ,conditions on assistance ,notwithstanding any other provision of law1 the ,secretary-- 7,i7 may not condition receipt of a voucher under this paragraph on-- 7aa7 participation in any service or program2 or 7bb7 the sobriety or lack thereof of an eligible recipient2 7,,ii7 except as provided in subclause 7,,iii71 may not prohibit receipt of a voucher under this paragraph by an otherwise eligible recipient due to any criminal conviction or history of interaction with the criminal justice system2 and 7,,iii7 shall prohibit receipt of a voucher under this paragraph by individuals subject to a lifetime registration requirement under any ,state sex offender registration program4 7vi7 ,verification of statement made by eligible public housing agencies 7,i7 ,in general ,not later than #cj days after the date on which an eligible public housing agency submits the statement required under subparagraph 7,a77iv77,,iii71 the ,secretary shall verify the statement4 7,,ii7 ,unsatisfactory statement ,if1 upon verification of a statement under subclause 7,i71 the ,secretary determines that the statement is unsatisfactory1 the ,secretary shall inform the eligible public housing agency of that determination and the manner in which the eligible public housing agency may re-submit the statement4 7vii7 ,identification of eligible recipients 7,i7 ,in general ,a public housing agency shall partner with continuums of care1 public child welfare agencies1 street outreach providers1 health care providers1 and other similar organizations in the ,state in which the public housing agency operates to identify eligible recipients4 7,,ii7 ,considerations ,in identifying eligible recipients under subclause 7,i71 the public housing agency and its partners shall-- 7aa7 take into consideration demographic information of the eligible recipients1 including the age1 sex1 gender identity1 sexual orientation1 race1 ethnicity1 and disability status of each such recipient2 and 7bb7 coordinate outreach in a respectful manner with regard to the information described in item 7aa74 7,,iii7 ,continuums of care ,in partnering with public housing agencies to identify eligible recipients1 continuums of care shall carry out assistance and services as planned under a congressionally authorized #b-year notice of funding opportunity4 7viii7 ,requirements for eligible public housing agencies 7,i7 ,in general ,each eligible public housing agency providing assistance under this paragraph shall-- 7aa7 on an annual basis and in conjunction with income reviews for purposes of determining income eligibility for assistance under this paragraph1 verify the compliance of the eligible public housing agency with the eligibility requirements under this paragraph2 and 7bb7 to the greatest extent possible-- 7,,aa7 work with continuums of care to ensure continuity of data collection under this paragraph2 and 7,,bb7 utilize the ,,hmis to collect and maintain the information required to be collected under this paragraph4 7,,ii7 ,priority ,in providing vouchers under this paragraph1 an eligible public housing agency-- 7aa7 shall prioritize the first vouchers made available under this section for eligible recipients who are-- 7,,aa7 unaccompanied homeless youth2 7,,bb7 homeless youth with minor children2 or 7,,cc7 families with minor children experiencing homelessness2 7bb7 to the extent possible considering when the ,secretary disburses funds under this paragraph1 shall provide vouchers to the eligible recipients described in item 7aa7 not later than #a year after the end of the capacity-building period2 and 7cc7 may not issue vouchers to eligible recipients not described in item 7aa7 until the eligible public housing agency has issued vouchers to all eligible recipients described in that item4 7ix7 ,use of voucher upon exit ,an eligible public housing agency that issued a voucher to an eligible recipient that is no longer in use by the eligible recipient may provide the voucher to any other tenant eligible for tenant-based assistance under this subsection4 7,c7 ,data collection 7i7 ,in general ,the ,secretary shall submit to ,congress an annual report on assistance providing under this paragraph1 which shall include-- 7,i7 an assessment of the progress of ,states toward housing-- 7aa7 eligible recipients in the ,state2 and 7bb7 the total population of people experiencing homelessness in the ,state2 and 7,,ii7 the information provided under clause 7ii74 7ii7 ,information from public housing agencies ,each eligible public housing agency administering assistance under this paragraph shall submit to the ,secretary and to the ,state in which the public housing agency is located an annual report for each fiscal year that includes-- 7,i7 the number of voucher recipients1 including aggregated demographic information on the age1 sex1 gender identity1 sexual orientation1 race1 ethnicity1 and disability status of each such recipient in a manner that does not reveal the personally identifiable information of each such recipient2 7,,ii7 the number of eligible recipients who applied during the fiscal year for assistance under this paragraph1 but were not provided assistance2 7,,iii7 a brief identification in each instance described in subclause 7,,ii7 of the reason why the eligible public housing agency was unable to provide the assistance2 and 7,,iv7 a description of how the eligible public housing agency communicated or collaborated with public child welfare agencies and continuums of care to collect the data described in subclauses 7,i7 and 7,,ii74 7,d7 ,supportive services 7i7 ,administrative fee 7,i7 ,in general ,the ,secretary shall establish a fee under subsection 7q7 for the costs incurred by public housing agencies in administering vouchers under this paragraph4 7,,ii7 ,costs ,in establishing the fee described in subclause 7,i71 the ,secretary shall include the costs to public housing agencies of employing full-time or full-time-equivalent service coordinators4 7,,iii7 ,authorization of appropriations ,there is authorized to be appropriated #cjj1jjj1jjj for each of fiscal years #bjbf through #bjca for the fee described in subclause 7,i74 7ii7 ,hiring of service coordinators 7,i7 ,in general ,an eligible public housing agency shall hire the appropriate number of service coordinators to administer supportive services under this paragraph in partnership with the public child welfare agency or continuum of care in a jurisdiction4 7,,ii7 ,insufficient funds ,if an eligible public housing agency is unable to hire an appropriate number of service coordinators under subclause 7,i7 using the fee described in clause 7i77,i7-- 7aa7 the public housing agency may request an increased administrative fee from the ,secretary2 and 7bb7 the ,secretary shall approve or deny a request received under item 7aa7 within #de days4 7,,iii7 ,report to ,congress ,beginning in the first full fiscal year after the date of enactment of this paragraph1 the ,secretary shall submit an annual report to ,congress on requests for increased administrative fees received from public housing agencies under subclause 7,,ii74 7,,iv7 ,appropriate number defined ,for purposes of this clause1 the term appropriate number1 with respect to service coordinators1 means enough service coordinators so that each household provided a voucher by a public housing agency under this paragraph is able to access a service coordinator for not less than #cj minutes each week4 7iii7 ,provision of services ,upon intake of an eligible recipient1 a public housing agency or a public child welfare agency or continuum of care with which the public housing agency has partnered shall-- 7,i7 assign the voucher recipient a case manager or service coordinator2 and 7,,ii7 provide or secure the provision of supportive services to contribute to the housing stability of the voucher recipient1 including-- 7aa7 any supportive service1 as defined in section #dja of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacfj72 7bb7 referrals to health care providers1 including mental health care providers1 dental health care providers1 and vision health care providers2 7cc7 referrals to substance use disorder treatment1 including recovery1 treatment1 #ab-step programs1 relapse prevention1 or medication-assisted treatment2 7dd7 assistance relating to enrollment in the ,medicare or ,medicaid programs under titles ,,xviii and ,,xix of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq41 #acif et seq471 respectively1 and referrals to other services1 including-- 7,,aa7 the supplemental nutrition assistance program under the ,food and ,nutrition ,act of #bjjh 7#g ,u4,s4,c4 #bjaa et seq47 7commonly known as the ,,snap ,program72 and 7,,bb7 the program of block grants for ,states for temporary assistance for needy families established under part ,a of title ,,iv of the ,social ,security ,act 7#db ,u4,s4,c4 #fja et seq47 7commonly known as the ,,tanf ,program72 7ee7 advising on eligibility for the family self-sufficiency program established1 credit counseling1 and housing counseling programs2 7ff7 referrals to education services1 including general educational development 7commonly known as ,,ged7 preparation and testing1 enrollment in postsecondary education programs1 credit recovery1 and affordable childcare programs2 and 7gg7 facilitation of transportation assistance to any of the supportive services described in this subparagraph4 7iv7 ,eligibility of private nonprofit organizations and faith-based organizations 7,i7 ,definitions ,in this clause1 the terms eligible entity and private nonprofit organization have the meanings given those terms in section #dja of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacfj74 7,,ii7 ,eligibility ,notwithstanding any other provision of law-- 7aa7 the ,secretary shall provide that private nonprofit organizations that are eligible entities1 including faith-based private nonprofit organizations that are eligible entities1 shall be eligible to-- 7,,aa7 provide services described in clause 7iii72 and 7,,bb7 receive amounts made available to carry out clause 7iii72 and 7bb7 in determining eligibility for amounts made available to carry out clause 7iii71 the status of an entity as faith-based or the possibility that an entity may be faith-based may not be a basis for any discrimination against such entity in any manner or for any purpose4 7v7 ,access ,services provided under this subparagraph shall be available to voucher recipients with low-to-no barrier access4 7vi7 ,evaluation ,an eligible public housing agency1 public child welfare agency1 or continuum of care described in clause 7iii7 shall evaluate each voucher recipient for individual case management needs under this subparagraph4 7,e7 ,capacity building 7i7 ,authorization of appropriations ,there is authorized to be appropriated to the ,secretary #ejj1jjj1jjj for each of fiscal years #bjbf and #bjbg to provide funding for capacity building to eligible public housing agencies4 7ii7 ,funding formula ,not later than #de days after the date of enactment of this paragraph1 the ,secretary shall establish a formula for allocating the funding authorized under clause 7i7 that takes into account-- 7,i7 the ratio of individuals in the ,state in which the eligible public housing agency operates who are homeless to the overall population of the ,state2 7,,ii7 the proportion of families in each ,state with children experiencing unsheltered homelessness1 as reported in the ,state's most recent point-in-time count1 to the total number of unsheltered homeless families in the ,state as reported in the same point-in-time count2 and 7,,iii7 the rate of unsheltered homelessness in each ,state compared to each other ,state1 as reported in each ,state's most recent point-in-time count4 7iii7 ,disbursement ,not later than #cj days after an eligible public housing agency submits an acceptable statement under subparagraph 7,a77iv77,,iii71 the ,secretary shall disburse amounts authorized under clause 7i7 of this subparagraph in accordance with the formula established under clause 7ii7 of this subparagraph4 7iv7 ,minimum and maximum allocation ,the ,secretary shall ensure that-- 7,i7 each eligible public housing agency does not receive more than #aj percent of the amount authorized under clause 7i72 and 7,,ii7 each ,state in which an eligible public housing agency receives funds under clause 7i7 does not receive more than #be percent of the total amount authorized under that clause4 7v7 ,eligible activities ,a recipient of funds authorized under clause 7i7 may only use the funds for-- 7,i7 hiring and personnel needs1 such as case managers and housing placement advisory1 including increased educational resources for staff to meet the needs of voucher recipients2 7,,ii7 physical infrastructure-- 7aa7 including increased office space or facilities for the provision of supportive services2 and 7bb7 not including residential housing2 7,,iii7 technological infrastructure needs1 including upgrades to the ,,hmis2 and 7,,iv7 any other capacity-related investments that are necessary for the public housing agency to-- 7aa7 develop1 acquire1 or rehabilitate housing that is affordable to extremely low-income families1 to be made available to people experiencing homelessness1 including increased resources for eligible public housing agencies to conduct unit inspections2 or 7bb7 support the successful administration of the vouchers under this paragraph4 7vi7 ,requirement for expenditure of funds ,each eligible public housing agency that receives funds under clause 7i7 shall expend not less than #fj percent of the funding during the #b-year period following receipt of the funding4 7,f7 ,state accountability 7i7 ,in general ,each eligible public housing agency providing assistance under this paragraph shall-- 7,i7 on a monthly basis1 report caseload and voucher administration statistics to the ,state in which the agency operates2 and 7,,ii7 twice annually1 submit to the ,state in which the agency operates a report on the progress toward issuing a voucher under this paragraph to all eligible recipients1 based on-- 7aa7 the percentage reduction in the number of families with children and youth that are experiencing homelessness in the area in which the agency care operates1 as determined by comparing the most recent point-in-time count with the point-in-time count conducted #a year prior2 and 7bb7 the percentage reduction in the number of children experiencing homelessness in the ,state1 as documented under the requirements of the program authorized under subtitle ,b of title ,,vii of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aadca et seq474 7ii7 ,benchmarks ,each year1 each ,state shall meet the benchmarks described in this clause1 based equally on the percentage reduction in reported population of children and families experiencing homelessness in the following year's point-in-time count and the percentage reduction in population of students experiencing homelessness3 7,i7 ,annual report ,each ,state shall submit an annual report to the ,secretary that contains-- 7aa7 data collected from schools pursuant to the program authorized under subtitle ,b of title ,,vii of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aadca et seq471 including the number of students-- 7,,aa7 experiencing unsheltered homelessness2 7,,bb7 living in shelters2 7,,cc7 living in motels1 hotels1 or campgrounds2 7,,dd7 living in a car or other motor vehicle2 or 7,,ee7 sharing the housing of other persons due to loss of housing1 economic hardship1 or similar reasoning2 and 7bb7 the information received from each public housing agency in the ,state under clause 7i77,,ii74 7,,ii7 ,issuance of vouchers for smaller ,states ,each ,state with a rate of homelessness that is not higher than #aj people per #aj1jjj shall-- 7aa7 not later than #b years after the end of the capacity-building period-- 7,,aa7 issue vouchers under this paragraph to not less than #ej percent of the population of people experiencing homelessness in the ,state1 using data from the most recent point-in-time count2 and 7,,bb7 to the greatest extent possible1 prioritize the issuance of those vouchers to eligible youth and families2 7bb7 not later than #c years after the end of the capacity-building period-- 7,,aa7 issue vouchers under this paragraph to not less than #gj percent of the population of people experiencing homelessness in the ,state1 using data from the most recent point-in-time count2 and 7,,bb7 to the greatest extent possible1 prioritize the issuance of those vouchers to eligible youth and families2 and 7cc7 not later than #d years after the end of the capacity-building period1 issue vouchers under this paragraph to all people experiencing homelessness in the ,state4 7,,iii7 ,issuance of vouchers for larger ,states ,each ,state with a rate of homelessness that is higher than #aj people per #aj1jjj shall-- 7aa7 not later than #b years after the end of the capacity-building period-- 7,,aa7 issue vouchers under this paragraph to not less than #dj percent of the population of people experiencing homelessness in the ,state1 using data from the most recent point-in-time count2 and 7,,bb7 to the greatest extent possible1 prioritize the issuance of those vouchers to eligible youth and families2 7bb7 not later than #c years after the end of the capacity-building period-- 7,,aa7 issue vouchers under this paragraph to not less than #fj percent of the population of people experiencing homelessness in the ,state1 using data from the most recent point-in-time count2 and 7,,bb7 to the greatest extent possible1 prioritize the issuance of those vouchers to eligible youth and families2 and 7cc7 not later than #d years after the end of the capacity-building period1 issue vouchers under this paragraph to all people experiencing homelessness in the ,state4 7iii7 ,penalties 7,i7 ,warning ,except as provided in clause 7v71 if a ,state does not meet the applicable benchmarks described in clause 7ii71 the ,secretary shall publicly warn the ,state of the failure of the ,state to meet the benchmark and remind the ,state of the applicable penalties4 7,,ii7 ,reduction in ,federal highway funds ,if a ,state does not meet the applicable benchmarks described in clause 7ii7-- 7aa7 by the date that is #ahj days after the warning by the ,secretary under subclause 7,i7 of this clause1 the ,federal share payable for ,federal-aid highway projects under section #abj of title #bc1 ,united ,states ,code1 shall be reduced by #e percent2 or 7bb7 by the date that is #ahj days after a reduction made under item 7aa7 of this subclause1 the ,federal share payable for ,federal-aid highway projects under section #abj of title #bc1 ,united ,states ,code1 shall be further reduced by #e percent4 7iv7 ,condition on compliance ,beginning in the first ,notice of ,funding ,availability cycle beginning after the date of enactment of this paragraph1 and every ,notice of ,funding ,availability cycle thereafter1 the ,secretary shall condition the awarding of all funding for vouchers under this paragraph by the ,secretary to a public housing authority in a ,state on that ,state's compliance with the benchmarks described in clause 7ii74 7v7 ,unemployment rate ,if the quarterly unemployment rate of the population of a ,state is not less than #f percent-- 7,i7 the ,state shall not be penalized under clause 7iii7 for failure to meet the benchmarks described in clause 7ii72 and 7,,ii7 the ,state shall be required to meet the benchmarks described in clause 7ii7 not later than #ahj days after the date on which the quarterly unemployment rate descends beneath #f percent4 7,g7 ,administrative needs of ,,hud 7i7 ,authorization of appropriations ,there is authorized to be appropriated #ae1jjj1jjj for each of fiscal years #bjbf through #bjcj to the ,secretary for the administrative needs of the ,department of ,housing and ,urban ,development and regional offices of the ,department in carrying out the voucher program under this paragraph4 7ii7 ,prohibition ,none of the funds made available under this subparagraph may be used to provide raises or bonuses to any employee of the ,department of ,housing and ,urban ,development in an amount that is more than #aj percent of the annual gross salary of the employee4 4 7b7 ,technical and conforming amendment ,effective on ,december #bi1 #bjbg1 paragraph 7#bb7 of section #h7o7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f7o771 as added by subsection 7a71 is redesignated as paragraph 7#bc7 and shall appear after paragraph 7#bb71 as added by section #fja7;a77#b77;,b7 of division ,,aa of ,consolidated ,appropriations ,act1 #bjbc 7,public ,law #aag-cbh74 #aab4 ,land acquisition and construction 7a7 ,definitions ,in this section-- 7#a7 the term at risk of homelessness has the meaning given the term in section #dja7a7 of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacfj71 except that #ej percent shall be substituted for #cj percent in subparagraph 7,a7 of that section2 7#b7 the terms extremely low-income and very low-income have the meanings given those terms in section #acjc of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dejb72 7#c7 the term homeless means an individual or family who is-- 7,a7 living in a place not meant for human habitation or in an emergency shelter2 7,b7 living in transitional housing for homeless persons and was homeless before entering transitional housing or an emergency shelter2 7,c7 fleeing domestic violence2 or 7,d7 at risk of homelessness2 and 7#d7 the term ,secretary means the ,secretary of ,housing and ,urban ,development4 7b7 ,authorizations of appropriations 7#a7 ,in general ,there is authorized to be appropriated to the ,housing ,trust ,fund established under section #acch of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #defh7 #aj1jjj1jjj1jjj for each of fiscal years #bjbf through #bjcf for allocation to ,states in accordance with subsection 7c7 of such section #acch1 subject to subsections 7c7 through 7f7 of this section4 7#b7 ,administrative needs of ,states 7,a7 ,authorization of appropriations ,there is authorized to be appropriated to the ,secretary #fe1jjj1jjj for each of fiscal years #bjbf through #bjca for the administrative needs of ,states under this section1 in accordance with subparagraph 7,c74 7,b7 ,allocation ,of amounts authorized to be appropriated under subparagraph 7,a7 for each fiscal year-- 7i7 #ae1jjj1jjj shall be allocated to the ,commonwealth of the ,northern ,mariana ,islands1 ,guam1 ,american ,samoa1 and the ,virgin ,islands2 and 7ii7 the remainder shall be allocated to ,states pursuant to the formula established under paragraph 7#bb77;,e77ii7 of section #h7o7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f7o771 as added by section #aaa of this ,act4 7,c7 ,eligible activities ,a ,state that receives funds authorized to be appropriated under subparagraph 7,a7 may only use the funds for capacity-related investments that are necessary for the ,state to successfully allocate funds made available under paragraph 7#a7 of this subsection4 7,d7 ,prohibition ,none of the funds made available under this paragraph may be used to provide raises or bonuses to any official of the executive branch of a ,state4 7c7 ,revision of funding formula 7#a7 ,in general ,not later than #a year after the date of enactment of this ,act1 the ,secretary shall report to ,congress proposed changes to the funding formula under section #acch7;c77#c7 of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #defh7;c77#c77 in order to ensure that the funding formula takes into account the economic status of the people of the ,united ,states4 7#b7 ,contents ,the revised formula proposed under paragraph 7#a7 shall address the following concerns3 7,a7 ,the impacts of differing vacancy rates across various housing markets in the ,united ,states4 7,b7 ,the rate of unsheltered homelessness in various housing markets across the ,united ,states4 7,c7 ,the impact of differing rates of poverty and extreme poverty across various ,states4 7,d7 ,the gap between demand for and supply of rental units that are affordable and available to very low-income and extremely low-income renters in a ,state4 7d7 ,eligible households ,housing that is assisted using amounts made available under subsection 7b7 may only be used for the benefit of very low-income or extremely low-income households4 7e7 ,eligible activities ,a recipient of funds authorized under subsection 7b7-- 7#a7 may only use the funds for land acquisition and the acquisition1 rehabilitation1 or development of rental housing that is affordable for very low-income or extremely low-income households2 and 7#b7 shall take all possible measures to expedite construction of housing described in paragraph 7#a74 7f7 ,priority for occupancy in dwelling units 7#a7 ,first #b fiscal years ,during the first #b fiscal years for which amounts are made available to carry out this section1 the ,secretary shall ensure that priority for occupancy in a dwelling unit that receives assistance under this section is given to a homeless family or homeless youth4 7#b7 ,subsequent #c fiscal years ,during the third1 fourth1 and fifth fiscal years for which amounts are made available to carry out this section1 the ,secretary shall ensure that priority for occupancy in a dwelling unit that receives assistance under this section is given to a homeless family or homeless individual4 #aac4 ,modular construction pilot program 7a7 ,definitions ,in this section3 7#a7 ,eligible entity ,the term eligible entity means a public housing agency1 a tribally designated housing entity 7as defined in section #d of the ,native ,american ,housing ,assistance and ,self ,determination ,act of #aiif 7#be ,u4,s4,c4 #dajc771 a nonprofit entity1 a company1 a religious entity1 or a unit of local or ,tribal government4 7#b7 ,modular construction ,the term modular construction means the method of residential construction by which building modules are constructed off of the future site of a building1 then brought together on the building site to form a larger residential building1 in an effort to reduce construction costs4 7#c7 ,secretary ,the term ,secretary means the ,secretary of ,housing and ,urban ,development4 7b7 ,establishment of program 7#a7 ,in general ,the ,secretary shall establish a pilot program to provide grants to eligible entities to promote the construction of affordable housing using modular construction4 7#b7 ,affordability requirement ,to be eligible to receive a grant under paragraph 7#a71 an eligible entity shall be required to guarantee affordability for a period of more than #bj years4 7#c7 ,priority ,in awarding grants under paragraph 7#a71 the ,secretary shall give priority to an eligible entity that fulfills not fewer than two of the following requirements3 7,a7 ,the eligible entity-- 7i7 will construct the housing in groups of more than #ej units2 or 7ii7 provides confirmation from the jurisdiction with land use control over the site proposed by the eligible entity that-- 7,i7 construction will be completed within #ah months2 and 7,,ii7 the housing will be constructed in groups of more than #cj units4 7,b7 ,the eligible entity partners with a public housing agency or unit of local government that will issue rental assistance to residents of the affordable housing through vouchers or grants4 7,c7 ,the eligible entity will provide supportive services 7as described in paragraph 7#ba77;,d77iii77,,ii7 of section #h7o7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f7o771 as added by section #c of this ,act7 to residents at no charge1 or has secured the provision of publicly or privately administered supportive services 7as so defined7 to residents at no charge4 7c7 ,matching requirement ,the ,federal share of a project funded under this section shall be not more than #ge percent of the cost of the project4 7d7 ,authorization of appropriations ,there is authorized to be appropriated to the ,secretary #b1jjj1jjj for each of fiscal years #bjbf through #bjca to carry out this section4 #aad4 ,supporting pro-housing development 7a7 ,definitions ,in this section3 7#a7 ,duplex ,the term duplex means a residential building divided into #b units1 each of which has a separate entrance4 7#b7 ,eligible activity ,the term eligible activity means an activity authorized under section #aje7;a7 of the ,housing and ,community ,development ,act of #aigd 7#db ,u4,s4,c4 #ecje7;a774 7#c7 ,eligible entity ,the term eligible entity means a jurisdiction that adopts a zoning and community planning method described in subsection 7d77#d7 after the date of enactment of this ,act4 7#d7 ,floor area ratio ,the term floor area ratio means the measurement of the floor area of a building in relation to the size of the unit of land on which the building is located4 7#e7 ,jurisdiction ,the term jurisdiction has the meaning given the term in section #ia4e of title #bd1 ,code of ,federal ,regulations1 or any successor regulation4 7#f7 ,low-income ,the term low-income has the meaning given the term in section #acjc of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dejb74 7#g7 ,mixed-use housing ,the term mixed-use housing means a building with-- 7,a7 retail or other business1 public service1 or nonprofit establishments at the ground level or a lower level2 and 7,b7 not less than #a story of residential units above the establishments described in subparagraph 7,a74 7#h7 ,quadplex ,the term quadplex means a residential building divided into #d units1 each of which has a separate entrance4 7#i7 ,secretary ,the term ,secretary means the ,secretary of ,housing and ,urban ,development4 7#aj7 ,triplex ,the term triplex means a residential building divided into #c units1 each of which has a separate entrance4 7#aa7 ,multifamily housing ,the term multifamily housing-- 7,a7 means housing accommodations that-- 7i7 are designed principally for residential use2 7ii7 conform to standards satisfactory to the ,secretary2 and 7iii7 consist of not less than #e rental units on a site2 and 7,b7 includes units that are detached1 semidetached1 row house1 or multifamily structures4 7b7 ,zoning information reporting requirement 7#a7 ,in general ,the ,secretary shall require a jurisdiction that receives1 directly or indirectly1 any funding from the ,secretary to submit to the ,secretary a report containing information about the zoning and community planning methods of the jurisdiction1 unless the jurisdiction already reports such information4 7#b7 ,additional information ,upon receiving a report described in paragraph 7#a7 from a jurisdiction1 the ,secretary may request additional information1 at the discretion of the ,secretary4 7c7 ,prohibited zoning methods 7#a7 ,in general ,on and after the date that is #ahj days after the date of enactment of this ,act1 a jurisdiction that uses a zoning and community planning method described in paragraph 7#b7 may not receive1 directly or indirectly1 amounts from a grant awarded under subsection 7d74 7#b7 ,prohibited methods ,the methods referred to in paragraph 7#a7 are the following3 7,a7 ,prohibiting or discouraging duplexes in areas zoned for single-family homes4 7,b7 ,prohibiting or discouraging single-room occupancy development in areas zoned for multifamily homes4 7,c7 ,in areas within one half-mile of a multimodal transit stop1 maintaining requirements of more than #a parking spot for a resident's car per residential unit4 7,d7 ,prohibiting or discouraging accessory dwelling units 7commonly known as an ,,adu or granny flat7 on the premises of single-family homes4 7,e7 ,prohibiting or discouraging the conversion of commercial property into residential property4 7,f7 ,prohibiting or discouraging the development of multifamily housing or mixed-use housing in commercial areas4 7#c7 ,exception ,a jurisdiction shall not be penalized under paragraph 7#a7 based on the use of a zoning and community planning method described in paragraph 7#b7 over which the jurisdiction does not have control4 7d7 ,grant program 7#a7 ,establishment ,the ,secretary shall establish a program under which the ,secretary awards competitive grants to eligible entities to use for eligible activities4 7#b7 ,priority ,in awarding grants under paragraph 7#a71 the ,secretary-- 7,a7 shall give priority to an eligible entity that adopt more than one of the zoning and community planning methods described in paragraph 7#d72 and 7,b7 in giving priority to an eligible entity under subparagraph 7,a7 of this paragraph1 shall base the degree of priority given on the number of such methods that the eligible entity has adopted1 relative to the number of such methods that each other eligible entity has adopted4 7#c7 ,amount of grant 7,a7 ,in general ,the amount of a grant awarded to an eligible entity under paragraph 7#a7 shall be not less than-- 7i7 #e1jjj1jjj for an eligible entity with a population of less than #hj1jjj2 7ii7 #bj1jjj1jjj for an eligible entity with a population of less than #ajj1jjj2 7iii7 #dj1jjj1jjj for an eligible entity with a population of less than #ejj1jjj2 7iv7 #ajj1jjj1jjj for an eligible entity with a population of less than #a1jjj1jjj2 and 7v7 #abe1jjj1jjj for an eligible entity with a population of not less than #a1jjj1jjj4 7,b7 ,population calculation ,the ,secretary shall calculate the population of an eligible entity for purposes of subparagraph 7,a7 using the most recently available data from the ,bureau of the ,census4 7#d7 ,encouraged zoning and community planning methods ,the zoning and community planning methods described in this paragraph are the following3 7,a7 ,allowing-- 7i7 duplexes1 triplexes1 and quadplexes1 or other multifamily housing1 in areas zoned for single-family homes2 7ii7 the subdivision of existing single-family homes into multiple units2 and 7iii7 waivers to permitting or zoning requirements to incentivize the construction of-- 7,i7 accessory dwelling units2 7,,ii7 additions to existing single-family homes to create duplexes1 triplexes1 or quadplexes2 or 7,,iii7 other additions that do not require demolition of an existing home on a given unit of land4 7,b7 ,incentivizing the development of single-room occupancy multifamily housing and accessory dwelling units through expedited permitting1 reduced fees1 or other incentives4 7,c7 ,not imposing a minimum lot size or minimum unit square-foot requirements4 7,d7 ,incentivizing the development of commercial property into residential housing4 7,e7 ,eliminating or lowering requirements for per-unit parking spots4 7,f7 ,allowing increased floor area ratios4 7,g7 ,eliminating or raising height limits on development to encourage building vertically rather than horizontally4 7,h7 ,waiving or eliminating fees or permits for development in exchange for the development of a larger number of units that are affordable to low-income people4 7#e7 ,regulations ,the ,secretary may promulgate any regulations necessary to carry out this subsection4 7#f7 ,authorization of appropriations ,there are authorized to be appropriated to carry out this subsection #d1jjj1jjj1jjj for each of fiscal years #bjbf through #bjca4 #aae4 ,permanent authorization of appropriations for ,mc,kinney-,vento ,homeless ,assistance ,act grants ,section #djh of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacfd7 is amended to read as follows3 #djh4 ,authorization of appropriations ,there are authorized to be appropriated to carry out this title such sums as may be necessary for each fiscal year4 4 ,b ,rural housing assistance #aba4 ,rural housing reinvestment 7a7 ,definitions ,in this section3 7#a7 ,broad-based nonprofit organization ,the term broad-based nonprofit organization means a nonprofit organization that has a membership that reflects a variety of interests in the area in which housing assisted under this section will be located4 7#b7 ,covered program ,the term covered program means-- 7,a7 the ,very ,low-,income ,housing ,repair ,loans and ,grants ,program under section #ejd of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adgd72 7,b7 the ,farm ,labor ,housing loan program under section #ead of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhd72 7,c7 the ,rural ,rental ,housing ,loan program under section #eae of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhe72 7,d7 the ,farm ,labor ,housing grant program under section #eaf of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhf72 and 7,e7 the ,rural ,rental ,assistance program under section #eba of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adij;a74 7#c7 ,domestic farm laborer ,the term domestic farm laborer means an individual who receives a substantial portion of the individual's income from the primary production of processed or unprocessed agricultural or aquacultural commodities or other farm labor employment4 7#d7 ,eligible entity ,the term eligible entity means-- 7,a7 a broad-based nonprofit organization2 7,b7 a nonprofit organization with experience in developing affordable housing1 rural housing1 or housing for domestic farm laborers2 7,c7 a nonprofit organization of domestic farm laborers2 7,d7 a federally recognized ,indian ,tribe2 7,e7 a community organization2 7,f7 an agency of a ,state or of a political subdivision of a ,state2 or 7,g7 a limited partnership with a nonprofit general partner4 7#e7 ,green building certification ,the term green building certification means-- 7,a7 a certification from the ,residential ,new ,construction ,program of the ,energy ,star program established by section #cbd;,a of the ,energy ,policy and ,conservation ,act 7#db ,u4,s4,c4 #fbid;a72 7,b7 a certification from the ,zero ,energy ,ready ,home program of the ,department of ,energy2 and 7,c7 a certification or accreditation that is substantially similar to a certification described in subparagraph 7,a7 or 7,b7 that requires the housing project to be at least #aj percent more efficient than homes built to the building code standards of the applicable ,state4 7#f7 ,low-income ,the term low-income has the meaning given the term in section #acjc of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dejb74 7#g7 ,secretary ,the term ,secretary means the ,secretary of ,agriculture4 7b7 ,assistance 7#a7 ,loans and grants 7,a7 ,in general ,the ,secretary shall award additional loans and grants1 including zero-percent interest loans1 under the covered programs to eligible entities that construct or preserve off-farm affordable housing1 including multifamily housing1 for domestic farm laborers or multifamily housing for low-income individuals living in rural areas to increase and preserve the supply of available and affordable rental housing for-- 7i7 low-income individuals living in rural areas2 and 7ii7 domestic farm laborers4 7,b7 ,timeline 7i7 ,notice of funding availability ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary shall publish a notice of funding availability to solicit applications for loans and grants to be awarded under subparagraph 7,a74 7ii7 ,awards ,not later than #a year after the date of enactment of this ,act1 the ,secretary shall award loans and grants1 including zero-percent interest loans1 to eligible entities under subparagraph 7,a74 7,c7 ,local contribution for grants 7i7 ,in general ,an eligible entity that receives a grant under this section shall contribute not less than #aj percent of the total project cost from sources other than the grant4 7ii7 ,timing of availability ,an eligible entity may not receive a grant under this section unless the funds required under clause 7i7 are available to the eligible entity as of the date on which the grant is awarded4 7iii7 ,sources ,an eligible entity may use amounts from a loan financed by the ,rural ,housing ,service or the ,federal ,housing ,administration to satisfy the requirement under clause 7i74 7#b7 ,rental assistance for off-farm affordable housing and multifamily housing 7,a7 ,in general ,in addition to loans and grants under paragraph 7#a71 the ,secretary1 acting through the ,under ,secretary for ,rural ,development1 shall provide rental assistance to-- 7i7 owners of off-farm affordable housing for domestic farm laborers that is assisted by a loan or grant under paragraph 7#a72 and 7ii7 owners of affordable multifamily housing for low-income individuals living in rural areas that is assisted by a loan or grant under paragraph 7#a74 7,b7 ,amount of rent ,in providing rental assistance under subparagraph 7,a71 the ,secretary shall make assistance payments to the owners of housing described in that subparagraph in order to make available to low-income occupants of such housing rentals at rates commensurate to income and not exceeding the highest of-- 7i7 #cj percent of adjusted income 7as defined in section #c7;b77#e7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;a7b77#e771 except that the amount shall be calculated on a monthly basis72 7ii7 #aj percent of monthly income2 or 7iii7 if the person or family is receiving payments for welfare assistance from a public agency1 the portion 7if any7 of the payments that is specifically designated by the agency to meet the housing costs of the person or family4 7,c7 ,cap on rent increases ,the rent or contribution to rent paid by any recipient of assistance under this paragraph shall not increase as a result of this section or any other provision of ,federal law or regulation by more than #aj percent during any #ab-month period1 unless the increase above #aj percent is attributable to increases in income that are unrelated to this subsection or the other provision of ,federal law or regulation4 7,d7 ,amount of assistance ,the amount of an assistance payment made on behalf of a tenant under this paragraph shall be equal to the difference between-- 7i7 the monthly contribution of the tenant1 which shall be the applicable amount under subparagraph 7,b72 and 7ii7 the fair market rental for the jurisdiction in which the property is located1 as established by the ,secretary under section #h7;c7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;a7c774 7,e7 ,regulations ,the ,secretary may promulgate any regulation that is necessary and proper to carry out this paragraph4 7#c7 ,priority ,in awarding assistance for farm labor housing and multifamily housing under paragraphs 7#a7 and 7#b71 the ,secretary shall give priority to an applicant seeking assistance for a housing project that-- 7,a7 as determined by the ,secretary1 is energy efficient and generates energy1 such as through geo-exchange systems1 ground-source heat pumps1 wind turbines1 and solar energy systems2 or 7,b7 has a green building certification4 7c7 ,funding 7#a7 ,farm ,labor ,housing loans and grants programs ,there is authorized to be appropriated to the ,secretary #gh1jjj1jjj for each of fiscal years #bjbf through #bjcf to award loans and grants under subsection 7b77#a77;,a7 through the ,farm ,labor ,housing loan program and ,farm ,labor ,housing grant program under sections #ead and #eaf1 respectively1 of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhd1 #adhf74 7#b7 ,rural ,rental ,housing ,loan program ,there is authorized to be appropriated to the ,secretary #ajj1jjj1jjj for each of fiscal years #bjbf through #bjcf to award loans under subsection 7b77#a77;,a7 through the ,rural ,rental ,housing ,loan program under section #eae of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhe74 7#c7 ,rural ,rental ,assistance program ,there is authorized to be appropriated to the ,secretary #b1ejj1jjj1jjj for each of fiscal years #bjbf through #bjcf to award loans under subsection 7b77#a77;,a7 through the ,rural ,rental ,assistance program under section #eba of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adij;a74 7#d7 ,rental assistance under 7b77#b7 of this section ,there is authorized to be appropriated to the ,secretary #bej1jjj1jjj for each of fiscal years #bjbf through #bjcf for rental assistance payments under subsection 7b77#b74 #abb4 ,permanent establishment of housing preservation and revitalization program ,title ,v of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga et seq47 is amended by adding at the end the following3 #ede4 ,housing preservation and revitalization program 7a7 ,establishment ,the ,secretary shall carry out a program under this section for the preservation and revitalization of multifamily rental housing projects financed under section #eae or both sections #ead and #eaf4 7b7 ,notice of maturing loans 7#a7 ,to owners ,on an annual basis1 the ,secretary shall provide written notice to each owner of a property financed under section #eae or both sections #ead and #eaf that will mature within the #d-year period beginning upon the provision of such notice1 setting forth the options and financial incentives that are available to facilitate the extension of the loan term or the option to decouple a rental assistance contract pursuant to subsection 7f74 7#b7 ,to tenants 7,a7 ,in general ,for each property financed under section #eae or both sections #ead and #eaf1 not later than the date that is #b years before the date that such loan will mature1 the ,secretary shall provide written notice to each household residing in such property that informs them of the date of the loan maturity1 the possible actions that may happen with respect to the property upon such maturity1 and how to protect their right to reside in federally assisted housing after such maturity4 7,b7 ,language ,notice under this paragraph shall be provided in plain ,english and shall be translated into other languages in the case of any property located in an area in which a significant number of residents speak such other languages4 7c7 ,loan restructuring ,under the program under this section1 the ,secretary may restructure such existing housing loans1 as the ,secretary considers appropriate1 for the purpose of ensuring that such projects have sufficient resources to preserve the projects to provide safe and affordable housing for low-income residents and farm laborers1 by-- 7#a7 reducing or eliminating interest2 7#b7 deferring loan payments2 7#c7 subordinating1 reducing1 or reamortizing loan debt2 and 7#d7 providing other financial assistance1 including advances1 payments1 and incentives 7including the ability of owners to obtain reasonable returns on investment7 required by the ,secretary4 7d7 ,renewal of rental assistance ,when the ,secretary offers to restructure a loan pursuant to subsection 7c71 the ,secretary shall offer to renew the rental assistance contract under section #eba7;a77#b7 for a #bj-year term that is subject to annual appropriations1 provided that the owner agrees to bring the property up to such standards that will ensure its maintenance as decent1 safe1 and sanitary housing for the full term of the rental assistance contract4 7e7 ,restrictive use agreements 7#a7 ,requirement ,as part of the preservation and revitalization agreement for a project1 the ,secretary shall obtain a restrictive use agreement that obligates the owner to operate the project in accordance with this title4 7#b7 ,term 7,a7 ,no extension of rental assistance contract ,except when the ,secretary enters into a #bj-year extension of the rental assistance contract for the project1 the term of the restrictive use agreement for the project shall be consistent with the term of the restructured loan for the project4 7,b7 ,extension of rental assistance contract ,if the ,secretary enters into a #bj-year extension of the rental assistance contract for a project1 the term of the restrictive use agreement for the project shall be for #bj years4 7,c7 ,termination ,the ,secretary may terminate the #bj-year use restrictive use agreement for a project prior to the end of its term if the #bj-year rental assistance contract for the project with the owner is terminated at any time for reasons outside the owner's control4 7f7 ,decoupling of rental assistance 7#a7 ,renewal of rental assistance contract ,if the ,secretary determines that a maturing loan for a project cannot reasonably be restructured in accordance with subsection 7c7 and the project was operating with rental assistance under section #eba1 the ,secretary may renew the rental assistance contract1 notwithstanding any provision of section #eba1 for a term1 subject to annual appropriations1 of at least #aj years but not more than #bj years4 7#b7 ,rents ,any agreement to extend the term of the rental assistance contract under section #eba for a project shall obligate the owner to continue to maintain the project as decent1 safe1 and sanitary housing and to operate the development in accordance with this title1 except that rents shall be based on the lesser of-- 7,a7 the budget-based needs of the project2 or 7,b7 the operating cost adjustment factor as a payment standard as provided under section #ebd of the ,multifamily ,assisted ,housing ,reform and ,affordability ,act of #aiig 7#db ,u4,s4,c4 #adcg note74 7g7 ,multifamily housing transfer technical assistance ,under the program under this section1 the ,secretary may provide grants to qualified nonprofit organizations and public housing agencies to provide technical assistance1 including financial and legal services1 to borrowers under loans under this title for multifamily housing to facilitate the acquisition of such multifamily housing properties in areas where the ,secretary determines there is a risk of loss of affordable housing4 7h7 ,transfer of rental assistance ,after the loan or loans for a rental project originally financed under section #eae or both sections #ead and #eaf have matured or have been prepaid and the owner has chosen not to restructure the loan pursuant to subsection 7c71 a tenant residing in such project shall have #ah months prior to loan maturation or prepayment to transfer the rental assistance assigned to the tenant's unit to another rental project originally financed under section #eae or both sections #ead and #eaf1 and the owner of the initial project may rent the tenant's previous unit to a new tenant without income restrictions4 7i7 ,administrative expenses ,of any amounts made available for the program under this section for any fiscal year1 the ,secretary may use not more than #a1jjj1jjj for administrative expenses for carrying out such program4 7j7 ,authorization of appropriations ,there is authorized to be appropriated for the program under this section #bjj1jjj1jjj for each of fiscal years #bjbf through #bjca4 4 #abc4 ,eligibility for rural housing vouchers ,section #edb of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adijr7 is amended by adding at the end the following3 7c7 ,eligibility of households in section #ead1 #eae1 and #eaf projects ,the ,secretary may provide rural housing vouchers under this section for any low-income household 7including those not receiving rental assistance7 residing in a property financed with a loan made or insured under section #ead or #eae 7#db ,u4,s4,c4 #adhd1 #adhe7 which has been prepaid1 has been foreclosed1 or has matured after ,september #cj1 #bjje1 or residing in a property assisted under section #ead or #eaf that is owned by a nonprofit organization or public agency4 4 #abd4 ,amount of voucher assistance ,notwithstanding any other provision of law1 in the case of any rural housing voucher provided pursuant to section #edb of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adijr71 the amount of the monthly assistance payment for the household on whose behalf such assistance is provided shall be determined as provided in subsection 7a7 of such section #edb4 #abe4 ,use of available rental assistance ,section #eba7;d7 of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adij;a7d77 is amended by adding at the end the following3 7#c7 ,in the case of any rental assistance contract authority that becomes available because of the termination of assistance on behalf of an assisted family-- 7,a7 at the option of the owner of the rental project1 the ,secretary shall provide the owner a period of #f months before such assistance is made available pursuant to subparagraph 7,b7 during which the owner may use such assistance authority to provide assistance on behalf of an eligible unassisted family that-- 7i7 is residing in the same rental project that the assisted family resided in prior to such termination2 or 7ii7 newly occupies a dwelling unit in such rental project during such period2 and 7,b7 except for assistance used as provided in subparagraph 7,a71 the ,secretary shall use such remaining authority to provide such assistance on behalf of eligible families residing in other rental projects originally financed under section #eae or both sections #ead and #eaf4 4 #abf4 ,funding for multifamily technical improvements ,there is authorized to be appropriated to the ,secretary of ,agriculture #ej1jjj1jjj for fiscal year #bjbf for improving the technology of the ,department of ,agriculture used to process loans for multifamily housing and otherwise managing such housing4 ,such improvements shall be made within the #e-year period beginning upon the appropriation of such amounts and such amount shall remain available until the expiration of such #e-year period4 #abg4 ,plan for preserving affordability of rental projects 7a7 ,plan ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary of ,agriculture 7in this section referred to as the ,secretary7 shall submit a written plan to ,congress for preserving the affordability for low-income families of rental projects for which loans were made under section #eae of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhe7 or made to nonprofit or public agencies under section #ead of that ,act 7#db ,u4,s4,c4 #adhd7 and avoiding the displacement of tenant households1 which shall-- 7#a7 set forth specific performance goals and measures2 7#b7 set forth the specific actions and mechanisms by which such goals will be achieved2 7#c7 set forth specific measurements by which progress towards achievement of each goal can be measured2 7#d7 provide for detailed reporting on outcomes2 and 7#e7 include any legislative recommendations to assist in achievement of the goals under the plan4 7b7 ,advisory committee 7#a7 ,establishment2 purpose ,the ,secretary shall establish an advisory committee whose purpose shall be to assist the ,secretary-- 7,a7 in preserving properties assisted under section #ead or #eae of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhd1 #adhe7 that are owned by nonprofit or public agencies through the multifamily housing preservation and revitalization program under section #ede of that ,act 7as added by this subtitle72 and 7,b7 implementing the plan required under subsection 7a7 of this section4 7#b7 ,member ,the advisory committee shall consist of #ad members1 appointed by the ,secretary1 as follows3 7,a7 ,a ,state ,director of ,rural ,development for the ,department of ,agriculture4 7,b7 ,the ,administrator for ,rural ,housing ,service of the ,department of ,agriculture4 7,c7 ,two representatives of for-profit developers or owners of multifamily rural rental housing4 7,d7 ,two representatives of nonprofit developers or owners of multifamily rural rental housing4 7,e7 ,two representatives of ,state housing finance agencies4 7,f7 ,two representatives of tenants of multifamily rural rental housing4 7,g7 ,one representative of a community development financial institution that is involved in preserving the affordability of housing assisted under sections #ead1 #eae1 and #eaf of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhd1 #adhe1 #adhf74 7,h7 ,one representative of a nonprofit organization that operates nationally and has actively participated in the preservation of housing assisted by the ,rural ,housing ,service by conducting research regarding1 and providing financing and technical assistance for1 preserving the affordability of such housing4 7,i7 ,one representative of low-income housing tax credit investors4 7,j7 ,one representative of regulated financial institutions that finance affordable multifamily rural rental housing developments4 7#c7 ,meetings ,the advisory committee shall meet not less often than once each calendar quarter4 7#d7 ,functions ,in providing assistance to the ,secretary to carry out its purpose1 the advisory committee shall carry out the following functions3 7,a7 ,assisting the ,rural ,housing ,service of the ,department of ,agriculture to improve estimates of the size1 scope1 and condition of rental housing portfolio of the ,service1 including the time frames for maturity of mortgages and costs for preserving the portfolio as affordable housing4 7,b7 ,reviewing current policies and procedures of the ,rural ,housing ,service regarding preservation of affordable rental housing financed under sections #ead1 #eae1 #eaf1 and #ech of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adhd1 #adhe1 #adhf1 #adijp-#b71 the ,multifamily ,preservation and ,revitalization ,demonstration program 7commonly known as the ,,mpr71 and the ,rural ,rental ,assistance program under section #eba of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adij;a7 and making recommendations regarding improvements and modifications to such policies and procedures4 7,c7 ,providing ongoing review of ,rural ,housing ,service program results4 7,d7 ,providing reports to ,congress and the public on meetings1 recommendations1 and other findings of the advisory committee4 ,,ii ,revenue provisions #bja4 ,increases in ,state allocations 7a7 ,in general ,clause 7ii7 of section #db7;h77#c77;,c7 of the ,internal ,revenue ,code is amended-- 7#a7 by striking #a4ge in subclause 7,i7 and inserting the per capita amount1 and 7#b7 by striking #b1jjj1jjj in subclause 7,,ii7 and inserting the minimum amount4 7b7 ,per capita amount2 minimum amount ,section #db7;h77#c7 of the ,internal ,revenue ,code of #aihf is amended by striking subparagraphs 7,h7 and 7,i7 and inserting the following3 7,h7 ,per capita amount ,for purposes of subparagraph 7,c77ii77,i71 the per capita amount shall be determined as follows3 7i7 ,calendar year #bjbf ,for calendar year1 #bjbf1 the per capita amount is #d4cj4 7ii7 ,calendar year #bjbg ,for calendar year #bjbg1 the per capita amount is the product of-- 7,i7 #a4be1 and 7,,ii7 the dollar amount under clause 7i7 increased by an amount equal to-- 7aa7 such dollar amount1 multiplied by 7bb7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year1 determined by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,if the amount determined after application of the preceding sentence is not a multiple of #e1jjj1 such amount shall be rounded to the next lowest multiple of #e1jjj4 7iii7 ,calendar years after #bjbg ,in the case of any calendar year after #bjbg1 the per capita amount is the dollar amount determined under clause 7ii7 increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year1 determined by substituting calendar year #bjbf for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any amount increased under the preceding sentence which is not a multiple of #e cents shall be rounded to the next lowest multiple of #e cents4 7,i7 ,minimum amount ,for purposes of subparagraph 7,c77ii77,,ii71 the minimum amount shall be determined as follows3 7i7 ,calendar year #bjbf ,for calendar year1 #bjbf1 the minimum amount is #d1ife1jjj4 7ii7 ,calendar year #bjbg ,for calendar year #bjbg1 the minimum amount is the product of-- 7,i7 #a4be1 and 7,,ii7 the dollar amount under clause 7i7 increased by an amount equal to-- 7aa7 such dollar amount1 multiplied by 7bb7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year1 determined by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,if the amount determined after application of the preceding sentence is not a multiple of #e cents1 such amount shall be rounded to the next lowest multiple of #e cents4 7iii7 ,calendar years after #bjbg ,in the case of any calendar year after #bjbg1 the minimum amount is the dollar amount determined under clause 7ii7 increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year1 determined by substituting calendar year #bjbf for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any amount increased under the preceding sentence which is not a multiple of #e1jjj shall be rounded to the next lowest multiple of #e1jjj4 4 7c7 ,effective date ,the amendments made by this section shall apply to calendar years beginning after ,december #ca1 #bjbe4 #bjb4 ,buildings designated to serve extremely low-income households 7a7 ,reserved ,state allocation 7#a7 ,in general ,section #db7;h7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by redesignating paragraphs 7#f71 7#g71 and 7#h7 as paragraphs 7#g71 7#h71 and 7#i71 respectively1 and 7,b7 by inserting after paragraph 7#e7 the following new paragraph3 7#f7 ,portion of ,state ceiling set-aside for projects designated to serve extremely low-income households 7,a7 ,in general ,not more than #ib percent of the portion of the ,state housing credit ceiling amount described in paragraph 7#c77;,c77ii7 for any ,state for any calendar year shall be allocated to buildings other than buildings described in subparagraph 7,b74 7,b7 ,buildings described ,a building is described in this subparagraph if #bj percent or more of the residential units in such building are rent-restricted 7determined as if the imputed income limitation applicable to such units were #cj percent of area median gross income7 and are designated by the taxpayer for occupancy by households the aggregate household income of which does not exceed the greater of-- 7i7 #cj percent of area median gross income1 or 7ii7 #ajj percent of an amount equal to the ,federal poverty line 7within the meaning of section #cf;,b7d77#c774 7,c7 ,exception ,a building shall not be treated as described in subparagraph 7,b7 if such building is a part of a qualified low-income housing project with respect to which the taxpayer elects the requirements of subsection 7g77#a77;,c74 4 7#b7 ,conforming amendment ,section #db7;b77#d77;,c7 of such ,code is amended by striking 7h77#g7 and inserting 7h77#h74 7b7 ,increase in credit ,paragraph 7#e7 of section #db7;d7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,c7 ,increase in credit for buildings designated to serve extremely low-income households 7i7 ,in general ,in the case of any building-- 7,i7 which is described in subsection 7h77#f77;,b71 and 7,,ii7 which is designated by the housing credit agency as requiring the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified low-income housing project1 subparagraph 7,b7 shall not apply to the portion of such building which is comprised of residential units described in subsection 7h77#f77;,b7 7determined in a manner similar to the unit fraction under subsection 7c77#a77;,c771 and the eligible basis of such portion of the building shall be #aej percent of such basis determined without regard to this subparagraph4 7ii7 ,allocation rules applicable to projects to which clause 7i7 applies 7,i7 ,state housing credit ceiling ,for any calendar year1 no more than #ac percent of the portion of the ,state housing credit ceiling described in subsection 7h77#c77;,c77ii7 shall be allocated to buildings to which clause 7i7 applies4 7,,ii7 ,application to projects financed with tax-exempt bonds ,in the case of any building which is financed by an obligation described in subsection 7h77#d71 clause 7i7 shall not apply unless-- 7aa7 the ,state in which the issuing authority issuing such obligation is located designates such obligation as an obligation to which this subparagraph applies1 and 7bb7 the aggregate face amount of obligations designated under item 7aa7 by such ,state in the calendar year during which such obligation is issued does not exceed #h percent of the ,state ceiling of such ,state under section #adf7;d77#a7 for such year4 4 7c7 ,effective date ,the amendments made by this section shall apply to allocations of housing credit dollar amount after ,december #ca1 #bjbf1 and to buildings that are described in section #db7;h77#d77;,b7 of the ,internal ,revenue ,code of #aihf taking into account only obligations that are part of an issue the issue date of which is after ,december #ca1 #bjbf4 #bjc4 ,inclusion of ,indian areas as difficult development areas for purposes of certain buildings 7a7 ,in general ,subclause 7,i7 of section #db7;d77#e77;,b77iii7 of the ,internal ,revenue ,code of #aihf is amended by inserting before the period the following3 1 and any ,indian area4 7b7 ,indian area ,clause 7iii7 of section #db7;d77#e77;,b7 of the ,internal ,revenue ,code of #aihf is amended by redesignating subclause 7,,ii7 as subclause 7,,iv7 and by inserting after subclause 7,i7 the following new subclauses3 7,,ii7 ,indian area ,for purposes of subclause 7,i71 the term ,indian area means-- 7aa7 any ,indian area 7as defined in section #d7aa7 of the ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif 7#be ,u4,s4,c4 #dajc7aa7771 and 7bb7 any housing area 7as defined in section #hja7e7 of such ,act 7#be ,u4,s4,c4 #dbba7e7774 7,,iii7 ,special rule for buildings in ,indian areas ,in the case of an area which is a difficult development area solely because it is an ,indian area1 a building shall not be treated as located in such area unless such building is assisted or financed under the ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif 7#be ,u4,s4,c4 #daja et seq47 or the project sponsor is an ,indian tribe 7as defined in section #de;,a7c77#f771 a tribally designated housing entity 7as defined in section #d7bb7 of such ,act 7#be ,u4,s4,c4 #dajc7bb7771 or wholly owned or controlled by such an ,indian tribe or tribally designated housing entity4 4 7c7 ,effective date ,the amendments made by this section shall apply to buildings placed in service after ,december #ca1 #bjbf4 #bjd4 ,inclusion of rural areas as difficult development areas 7a7 ,in general ,subclause 7,i7 of section #db7;d77#e77;,b77iii7 of the ,internal ,revenue ,code of #aihf1 as amended by section #bjc1 is further amended by inserting 1 any rural area after median gross income4 7b7 ,rural area ,clause 7iii7 of section #db7;d77#e77;,b7 of the ,internal ,revenue ,code of #aihf1 as amended by section #bjc1 is further amended by redesignating subclause 7,,iv7 as subclause 7,v7 and by inserting after subclause 7,,iii7 the following new subclause3 7,,iv7 ,rural area ,for purposes of subclause 7,i71 the term rural area means any non-metropolitan area1 or any rural area as defined by section #ebj of the ,housing ,act of #aidi1 which is identified by the qualified allocation plan under subsection 7m77#a77;,b74 4 7c7 ,effective date ,the amendments made by this section shall apply to buildings placed in service after ,december #ca1 #bjbf4 #bje4 ,increase in credit for bond-financed projects designated by housing credit agency 7a7 ,in general ,clause 7v7 of section #db7;d77#e77;,b7 of the ,internal ,revenue ,code of #aihf is amended by striking the second sentence4 7b7 ,technical amendments ,clause 7v7 of section #db7;d77#e77;,b7 of the ,internal ,revenue ,code of #aihf1 as amended by subsection 7a71 is further amended-- 7#a7 by striking ,state in the heading2 and 7#b7 by striking ,state housing credit agency and inserting housing credit agency4 7c7 ,effective date 7#a7 ,in general ,the amendment made by subsection 7a7 shall apply to a building if-- 7,a7 any portion of such building is financed by an obligation described in paragraph 7#b71 or 7,b7 the land on which the building is located is financed by an obligation described in paragraph 7#b74 7#b7 ,obligation described ,an obligation is described in this paragraph if such obligation-- 7,a7 is described in section #db7;h77#d77;,a7 of the ,internal ,revenue ,code of #aihf1 and 7,b7 is issued after ,december #ca1 #bjbf4 #bjf4 ,repeal of qualified contract option 7a7 ,termination of option for certain buildings 7#a7 ,in general ,subclause 7,,ii7 of section #db7;h77#g77;,e77i7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #bjb1 is amended by inserting in the case of a building described in clause 7iii71 before on the last day4 7#b7 ,buildings described ,subparagraph 7,e7 of section #db7;h77#g7 of such ,code1 as so redesignated1 is amended by adding at the end the following new clause3 7iii7 ,buildings described ,a building described in this clause is a building-- 7,i7 which received its allocation of housing credit dollar amount before ,january #a1 #bjbg1 or 7,,ii7 in the case of a building any portion of which is financed as described in paragraph 7#d71 and which received before ,january #a1 #bjbg1 under the rules of paragraphs 7#a7 and 7#b7 of subsection 7m71 a determination from the issuer of the tax-exempt bonds or the housing credit agency that the building would be eligible under the qualified allocation plan to receive an allocation of housing credit dollar amount or that the credits to be earned are necessary for financial feasibility of the project and its viability as a qualified low-income housing project throughout the credit period4 4 7b7 ,rules relating to existing projects ,subparagraph 7,f7 of section #db7;h77#g7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #bjb1 is amended by striking the nonlow-income portion and all that follows and inserting the nonlow-income portion and the low-income portion of the building for fair market value 7determined by the housing credit agency by taking into account the rent restrictions required for the low-income portion of the building to continue to meet the standards of paragraphs 7#a7 and 7#b7 of subsection 7g774 ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph44 7c7 ,conforming amendments 7#a7 ,paragraph 7#g7 of section #db7;h7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #bjb1 is amended by striking subparagraph 7,g7 and by redesignating subparagraphs 7,h71 7,i71 7,j71 and 7,k7 as subparagraphs 7,g71 7,h71 7,i71 and 7,j71 respectively4 7#b7 ,subclause 7,,ii7 of section #db7;h77#g77;,e77i7 of such ,code1 as so redesignated and as amended by subsection 7a71 is further amended by striking subparagraph 7,i7 and inserting subparagraph 7,h74 7d7 ,technical amendment ,subparagraph 7,i7 of section #db7;h77#g7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #bjb and subsection 7c71 is amended by striking agreement and inserting commitment4 7e7 ,effective dates 7#a7 ,in general ,except as provided in paragraph 7#b71 the amendments made by this section shall take effect on the date of the enactment of this ,act4 7#b7 ,subsection 7b7 ,the amendments made by subsection 7b7 shall apply to buildings with respect to which a written request described in section #db7;h77#g77;,h7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #bjb and subsection 7c71 is submitted after the date of the enactment of this ,act4 #bjg4 ,modification and clarification of rights relating to building purchase 7a7 ,modification of right of first refusal 7#a7 ,in general ,subparagraph 7,a7 of section #db7;i77#g7 of the ,internal ,revenue ,code of #aihf is amended by striking a right of #ast refusal and inserting an option4 7#b7 ,conforming amendment ,the heading of paragraph 7#g7 of section #db7;i7 of such ,code is amended by striking right of #ast refusal and inserting option4 7b7 ,clarification with respect to right of first refusal and purchase options 7#a7 ,purchase of partnership interest 7,a7 ,in general ,subparagraph 7,a7 of section #db7;i77#g7 of the ,internal ,revenue ,code of #aihf1 as amended by subsection 7a71 is amended by striking the property and inserting the property or all of the partnership interests 7other than interests of the person exercising such option or a related party thereto 7within the meaning of section #bfg7;b7 or #gjg7;b77#a777 relating to the property4 7,b7 ,application to ,s corporations and other pass-through entities ,subparagraph 7,a7 of section #db7;i77#g7 of such ,code is amended by adding at the end the following3 ,except as provided by the ,secretary1 the rules of this paragraph shall apply to ,s corporations and other pass-through entities in the same manner as such rules apply to partnerships44 7,c7 ,conforming amendment ,subparagraph 7,b7 of section #db7;i77#g7 of such ,code is amended by adding at the end the following3 ,in the case of a purchase of all of the partnership interests1 the minimum purchase price under this subparagraph shall be an amount not less than the sum of the interests' shares of the amount which would be determined with respect to the property under this subparagraph without regard to this sentence44 7#b7 ,property includes assets relating to the building ,paragraph 7#g7 of section #db7;i7 of such ,code is amended by adding at the end the following new subparagraph3 7,c7 ,property ,for purposes of subparagraph 7,a71 the term property may include all or any of the assets held for the development1 operation1 or maintenance of a building4 4 7#c7 ,exercise of right of first refusal and purchase options ,subparagraph 7,a7 of section #db7;i77#g7 of such ,code1 as amended by subsection 7a7 and paragraph 7#a77;,a71 is amended by adding at the end the following3 ,for purposes of determining whether an option1 including a right of first refusal1 to purchase property or all of the partnership interests holding 7directly or indirectly7 such property is described in the preceding sentence-- 7i7 such option or right of first refusal shall be exercisable with or without the approval of any owner of the project 7including any partner1 member1 or affiliated organization of such an owner71 and 7ii7 a right of first refusal shall be exercisable in response to any offer to purchase the property or all of the partnership interests1 including an offer by a related party4 4 7c7 ,other conforming amendment ,subparagraph 7,b7 of section #db7;i77#g7 of the ,internal ,revenue ,code of #aihf1 as amended by subsection 7b71 is amended by striking the sum of and all that follows through application of clause 7ii74 and inserting the following3 the principal amount of outstanding indebtedness secured by the building 7other than indebtedness incurred within the #e-year period ending on the date of the sale to the tenants744 7d7 ,effective dates 7#a7 ,modification of right of first refusal ,the amendments made by subsections 7a7 and 7c7 shall apply to agreements entered into or amended after the date of the enactment of this ,act4 7#b7 ,clarification ,the amendments made by subsection 7b7 shall apply to agreements among the owners of the project 7including partners1 members1 and their affiliated organizations7 and persons described in section #db7;i77#g77;,a7 of the ,internal ,revenue ,code of #aihf entered into before1 on1 or after the date of the enactment of this ,act4 7#c7 ,no effect on agreements ,none of the amendments made by this section is intended to supersede express language in any agreement with respect to the terms of a right of first refusal or option permitted by section #db7;i77#g7 of the ,internal ,revenue ,code of #aihf in effect on the date of the enactment of this ,act4 #bjh4 ,prohibition of local approval and contribution requirements 7a7 ,in general ,paragraph 7#a7 of section #db7m7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking clause 7ii7 of subparagraph 7,a7 and by redesignating clauses 7iii7 and 7iv7 thereof as clauses 7ii7 and 7iii71 respectively1 and 7#b7 by adding at the end the following new subparagraph3 7,e7 ,local approval or contribution not taken into account ,the selection criteria under a qualified allocation plan shall not include consideration of-- 7i7 any support or opposition with respect to the project from local or elected officials1 or 7ii7 any local government contribution to the project1 except to the extent such contribution is taken into account as part of a broader consideration of the project's ability to leverage outside funding sources1 and is not prioritized over any other source of outside funding4 4 7b7 ,effective date ,the amendments made by this section shall apply to allocations of housing credit dollar amounts made after ,december #ca1 #bjbf4 #bji4 ,increase in credit for low-income housing supportive services 7a7 ,in general ,paragraph 7#e7 of section #db7;d7 of the ,internal ,revenue ,code of #aihf1 as amended by section #bjb1 is further amended by adding at the end the following new subparagraphs3 7,d7 ,increase in credit for providing supportive services 7i7 ,in general ,in the case of any building which includes common areas1 or property used therein1 dedicated to the provision of on-site qualified supportive services1 except as provided in subparagraphs 7,e7 and 7,f71 the eligible basis of the portion of the building which is comprised of such areas or property 7after the application of subparagraphs 7,a7 and 7,b77 shall be increased by an amount equal to #ej percent of such basis determined without regard to this subparagraph and subparagraphs 7,b7 and 7,c74 7ii7 ,qualified supportive services ,for purposes of clause 7i71 the term qualified supportive services means services-- 7,i7 provided by the owner of a building 7directly or through contracts with third-party service providers7 primarily to tenants of the building1 7,,ii7 which are intended to promote economic self-sufficiency and physical and mental health and well-being in pursuit of retaining permanent housing1 including childcare or eldercare services1 health services1 coordination of tenant benefits1 job training1 financial counseling1 resident engagement services1 or such other similar services as may be defined by the allocating agency in the qualified allocation plan1 7,,iii7 which are provided to tenants and other beneficiaries as may be specified by the housing credit agency1 including specifications as to which services may be provided to non-tenants1 7,,iv7 which are provided at no cost to beneficiaries other than any fee1 copay1 or coinsurance customarily charged by service providers for similar services1 and 7,v7 usage of or participation in which is not a condition of tenancy in the building4 ,such term includes reasonable and necessary measures for the provision of such services1 including measures to engage tenants and other beneficiaries in and coordinate such services1 and measures required to obtain the certification described in subparagraph 7,e77ii77,,iii74 7,e7 ,extended supportive services commitment 7i7 ,in general ,subparagraph 7,d77i7 shall not apply to a building for any taxable year unless an extended supportive services commitment is in effect for such taxable year4 7ii7 ,extended supportive services commitment ,the term extended supportive services commitment means any agreement between the owner of a building and the housing credit agency which-- 7,i7 provides estimates of the amounts to be spent1 updated at least once every #e years1 on the provision of qualified supportive services to tenants of such building and other beneficiaries for each taxable year remaining in the credit period1 7,,ii7 requires the designation of one or more individuals to engage tenants regarding1 and coordinate delivery of1 qualified supportive services1 7,,iii7 requires the maintenance of an appropriate certification1 as determined by the ,secretary in consultation with the housing credit agencies1 for qualified supportive services1 subject to recertification at least once every #e years1 7,,iv7 requires appropriate annual reporting to the housing credit agency on expenditures and outcomes1 as determined by such agency1 and 7,v7 is binding on all successors in ownership of such building4 7iii7 ,exceptions if foreclosure or if no buyer willing to maintain services ,the requirement of clause 7ii77,v7 for any building shall terminate on the date the building is acquired by foreclosure 7or instrument in lieu of foreclosure7 unless the housing credit agency determines that such acquisition is part of an arrangement with the taxpayer a purpose of which is to terminate such requirement4 7iv7 ,effect of noncompliance ,if1 during a taxable year1 there is a determination by the housing credit agency that an extended supportive services commitment was not in effect as of the beginning of such year or that there is evidence of other noncompliance as determined by the housing credit agency 7including failure to provide qualified supportive services7-- 7,i7 such determination shall not apply to any period before such year and subparagraph 7,d77i7 shall apply to such taxable year without regard to such determination if the failure is corrected within #a year from the date of the determination1 and 7,,ii7 in the case of any year to which such determination does apply1 if the failure is not corrected within #a year from the date of the determination1 the credit recapture amount under subsection 7j77#a7 for the year in which such #a-year period expires shall be increased by the amount of any increase in the credit under this section by reason of subparagraph 7,d77i7 for the year to which the determination applies4 7v7 ,projects which consist of more than #a building ,rules similar to the rules of subsection 7h77#g77;,j7 shall apply4 7,f7 ,responsibilities of housing credit agency ,subparagraph 7,d77i7 shall not apply to a building for any taxable year unless-- 7i7 the housing credit agency sets forth criteria-- 7,i7 to determine appropriate1 evidence-based supportive services1 7,,ii7 for the selection of appropriate and competent service providers1 and 7,,iii7 which common areas or property described in subparagraph 7,d77i7 shall meet in order to qualify for the increase in credit under subparagraph 7,d71 7ii7 the housing credit agency provides a procedure that the agency 7or an agent or other private contractor of such agency7 shall follow in monitoring for noncompliance with the provisions of this subparagraph and subparagraphs 7,d7 and 7,e7 and in reporting such noncompliance to the ,secretary1 and 7iii7 appropriate books and records for expenditures with respect to the qualified supportive services are maintained on an annual basis1 and are available for inspection upon request by the housing credit agency4 4 7b7 ,effective date ,the amendment made by this section shall apply to buildings which receive allocations of a housing credit dollar amount or1 in the case of projects financed by tax-exempt obligations as described in section #db7;h77#d7 of the ,internal ,revenue ,code of #aihf1 which are first taken into account under section #adf of such ,code1 after the date of the enactment of this ,act4 #baj4 ,study of tax incentives for the conversion of commercial property to affordable housing ,within #f months of the date of the enactment of this ,act1 the ,secretary of the ,treasury1 the ,secretary of ,housing and ,urban ,development1 the ,deputy ,under ,secretary for ,rural ,development of the ,department of ,agriculture1 and the ,director of the ,office of ,management and ,budget shall collaborate to produce a cost-benefit analysis of providing tax incentives1 including the nonrecognition of capital gains1 to the owners of vacant or underutilized commercial real estate in exchange for selling these properties to ,state1 local1 or tribal housing finance agencies for conversion to affordable rental housing for low-income residents1 including shelters for the homeless4 #baa4 ,renters credit 7a7 ,in general ,subpart ,c of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #cf;,b the following new section3 #cf;,c4 ,renters credit 7a7 ,allowance of credit 7#a7 ,in general ,there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the sum of the amounts determined under paragraph 7#b7 for all qualified buildings with a credit period which includes months occurring during the taxable year4 7#b7 ,qualified building amount ,the amount determined under this paragraph with respect to any qualified building for any taxable year shall be an amount equal to the lesser of-- 7,a7 the aggregate qualified rental reduction amounts for all eligible units within such building for months occurring during the taxable year which are within the credit period for such building1 or 7,b7 the rental reduction credit amount allocated to such building for such months4 7#c7 ,qualified building ,for purposes of this section-- 7,a7 ,in general ,the term qualified building means any building which is residential rental property 7as defined in section #afh7;e77#b77;,a77 of the taxpayer with respect to which-- 7i7 a rental reduction credit amount has been allocated by a rental reduction credit agency of a ,state1 and 7ii7 a qualified rental reduction agreement is in effect4 7,b7 ,building not disqualified by other assistance ,a building shall not fail to be treated as a qualified building merely because-- 7i7 a credit was allowed under section #db with respect to such building or there was any other ,federal assistance in the construction or rehabilitation of such building1 7ii7 the rehabilitation credit determined under section #dg was allowed under section #ch with respect to such building1 or 7iii7 ,federal rental assistance was provided for such building during any period preceding the credit period4 7b7 ,qualified rental reduction amount ,for purposes of this section-- 7#a7 ,in general ,the term qualified rental reduction amount means1 with respect to any eligible unit for any month1 an amount equal to the applicable percentage 7as determined under subsection 7e77#a77 of the excess of-- 7,a7 the applicable rent for such unit1 over 7,b7 the family rental payment required for such unit4 7#b7 ,applicable rent 7,a7 ,in general ,the term applicable rent means1 with respect to any eligible unit for any month1 the lesser of-- 7i7 the amount of rent which would be charged for a substantially similar unit with the same number of bedrooms in the same building which is not an eligible unit1 or 7ii7 an amount equal to the market rent standard for such unit4 7,b7 ,market rent standard 7i7 ,in general ,the market rent standard with respect to any eligible unit is-- 7,i7 the small area fair market rent determined by the ,secretary of ,housing and ,urban ,development for units with the same number of bedrooms in the same ,,zip ,code tabulation area1 or 7,,ii7 if there is no rent described in subclause 7,i7 for such area1 the fair market rent determined by such ,secretary for units with the same number of bedrooms in the same county4 7ii7 ,state option ,a ,state may in its rental reduction allocation plan provide that the market rent standard for all 7or any part7 of a ,,zip ,code tabulation area or county within the ,state shall be equal to a percentage 7not less than #ge nor more than #abe7 of the amount determined under clause 7i7 7after application of clause 7iii77 for such area or county4 7iii7 ,minimum amount ,notwithstanding clause 7i71 the market rent standard with respect to any eligible unit for any year in the credit period after the first year in the credit period for such unit shall not be less than the market rent standard determined for such first year4 7#c7 ,family rental payment requirements 7,a7 ,in general ,each qualified rental reduction agreement with respect to any qualified building shall require that the family rental payment for an eligible unit within such building for any month shall be equal to the lesser of-- 7i7 #cj percent of the monthly family income of the residents of the unit 7as determined under subsection 7e77#e771 or 7ii7 the applicable rent for such unit4 7,b7 ,utility costs ,any utility allowance 7determined by the ,secretary in the same manner as under section #db7;g77#b77;,b77ii77 paid by residents of an eligible unit shall be taken into account as rent in determining the family rental payment for such unit for purposes of this paragraph4 7c7 ,rental reduction credit amount ,for purposes of this section-- 7#a7 ,determination of amount 7,a7 ,in general ,the term rental reduction credit amount means1 with respect to any qualified building1 the dollar amount which is allocated to such building 7and to eligible units within such building7 under this subsection4 ,such dollar amount shall be allocated to months in the credit period with respect to such building 7and such units7 on the basis of the estimates described in paragraph 7#b77;,b74 7,b7 ,allocation on project basis ,in the case of a project which includes 7or will include7 more than #a building1 the rental reduction credit amount shall be the dollar amount which is allocated to such project for all buildings included in such project4 ,subject to the limitation under subsection 7e77#c77;,b71 such amount shall be allocated among such buildings in the manner specified by the taxpayer unless the qualified rental reduction agreement with respect to such project provides for such allocation4 7#b7 ,state allocation 7,a7 ,in general ,except as provided in subparagraph 7,c71 each rental reduction credit agency of a ,state shall each calendar year allocate its portion of the ,state rental reduction credit ceiling to qualified buildings 7and to eligible units within each such building7 in accordance with the ,state rental reduction allocation plan4 7,b7 ,allocations to each building ,the rental reduction credit amount allocated to any qualified building shall not exceed the aggregate qualified rental reduction amounts which such agency estimates will occur over the credit period for eligible units within such building1 based on reasonable estimates of rents1 family incomes1 and vacancies in accordance with procedures established by the ,state as part of its ,state rental reduction allocation plan4 7,c7 ,specific allocations 7i7 ,nonprofit organizations ,at least #be percent of the ,state rental reduction credit ceiling for any ,state for any calendar year shall be allocated to qualified buildings in which a qualified nonprofit organization 7as defined in section #db7;h77#e77;,c77 owns 7directly or through #a or more partnerships7 an interest and materially participates 7within the meaning of section #dfi7;h77 in the operation of the building throughout the credit period4 ,a ,state may waive or lower the requirement under this clause for any calendar year if it determines that meeting such requirement is not feasible4 7ii7 ,rural areas 7,i7 ,in general ,the ,state rental reduction credit ceiling for any ,state for any calendar year shall be allocated to buildings in rural areas 7as defined in section #ebj of the ,housing ,act of #aidi7 in an amount which1 as determined by the ,secretary of ,housing and ,urban ,development1 bears the same ratio to such ceiling as the number of extremely low-income households with severe rent burdens in such rural areas bears to the total number of such households in the ,state4 7,,ii7 ,alternative #e-year testing period ,in the case of the #e-;calendar year period beginning in #bjbf1 a ,state shall not be treated as failing to meet the requirements of subclause 7,i7 for any calendar year in such period if1 as determined by the ,secretary1 the average annual amount allocated to such rural areas during such period meets such requirements4 7#c7 ,application of allocated credit amount 7,a7 ,amount available to taxpayer for all months in credit period ,any rental reduction credit amount allocated to any qualified building out of the ,state rental reduction credit ceiling for any calendar year shall apply to such building for all months in the credit period ending during or after such calendar year4 7,b7 ,ceiling for allocation year reduced by entire credit amount ,any rental reduction credit amount allocated to any qualified building out of an allocating agency's ,state rental reduction credit ceiling for any calendar year shall reduce such ceiling for such calendar year by the entire amount so allocated for all months in the credit period 7as determined on the basis of the estimates under paragraph 7#b77;,b77 and no reduction shall be made in such agency's ,state rental reduction credit ceiling for any subsequent calendar year by reason of such allocation4 7#d7 ,state rental reduction credit ceiling 7,a7 ,in general ,the ,state rental reduction credit ceiling applicable to any ,state for any calendar year shall be an amount equal to the sum of-- 7i7 the greater of-- 7,i7 the per capita dollar amount multiplied by the ,state population1 or 7,,ii7 the minimum ceiling amount1 plus 7ii7 the amount of the ,state rental reduction credit ceiling returned in the calendar year4 7,b7 ,return of ,state ceiling amounts ,for purposes of subparagraph 7,a77ii71 except as provided in subsection 7d77#b71 the amount of the ,state rental reduction credit ceiling returned in a calendar year equals the amount of the rental reduction credit amount allocated to any building which1 after the close of the calendar year for which the allocation is made-- 7i7 is canceled by mutual consent of the rental reduction credit agency and the taxpayer because the estimates made under paragraph 7#b77;,b7 were substantially incorrect1 or 7ii7 is canceled by the rental reduction credit agency because the taxpayer violates the qualified rental reduction agreement and1 under the terms of the agreement1 the rental reduction credit agency is authorized to cancel all 7or any portion7 of the allocation by reason of the violation4 7,c7 ,per capita dollar amount2 minimum ceiling amount ,for purposes of this paragraph-- 7i7 ,per capita dollar amount ,the per capita dollar amount is-- 7,i7 for calendar year #bjbf1 #ab4cj1 7,,ii7 for calendar year #bjbg1 #bd4ej1 and 7,,iii7 for calendar years #bjbh and thereafter1 #cf4ge4 7ii7 ,minimum ceiling amount ,the minimum ceiling amount is-- 7,i7 for calendar year #bjbf1 #ad1jjj1jjj1 7,,ii7 for calendar year #bjbg1 #bh1jjj1jjj1 and 7,,iii7 for calendar years #bjbh and thereafter1 #db1jjj1jjj4 7iii7 ,cost-of-living adjustment ,in the case of a calendar year beginning after #bjbh1 the #cf4ge and #db1jjj1jjj amounts in clauses 7i77,,iii7 and 7ii77,,iii7 shall each be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjbg for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,in the case of the #db1jjj1jjj amount1 any increase under this clause which is not a multiple of #e1jjj shall be rounded to the next lowest multiple of #e1jjj and in the case of the #cf4ge amount1 any increase under this clause which is not a multiple of #e cents shall be rounded to the next lowest multiple of #e cents4 7,d7 ,population ,for purposes of this paragraph1 population shall be determined in accordance with section #adf7;j74 7,e7 ,unused rental reduction credit allocated among certain ,states 7i7 ,in general ,the unused rental reduction credit of a ,state for any calendar year shall be assigned to the ,secretary for allocation among qualified ,states for the succeeding calendar year4 7ii7 ,unused rental reduction credit ,for purposes of this subparagraph1 the unused rental reduction credit of a ,state for any calendar year is the excess 7if any7 of-- 7,i7 the ,state rental reduction credit ceiling for the year preceding such year1 over 7,,ii7 the aggregate rental reduction credit amounts allocated for such year4 7iii7 ,formula for allocation of unused credit among qualified ,states ,the amount allocated under this subparagraph to a qualified ,state for any calendar year shall be the amount determined by the ,secretary to bear the same ratio to the aggregate unused rental reduction credits of all ,states for the preceding calendar year as such ,state's population for the calendar year bears to the population of all qualified ,states for the calendar year4 ,for purposes of the preceding sentence1 population shall be determined in accordance with section #adf7;j74 7iv7 ,qualified ,state ,for purposes of this subparagraph1 the term qualified ,state means1 with respect to a calendar year1 any ,state-- 7,i7 which allocated its entire ,state rental reduction credit ceiling for the preceding calendar year1 and 7,,ii7 for which a request is made 7at such time and in such manner as the ,secretary may prescribe7 to receive an allocation under clause 7iii74 7#e7 ,other definitions ,for purposes of this section-- 7,a7 ,rental reduction credit agency ,the term rental reduction credit agency means any agency authorized by a ,state to carry out this section4 ,such authorization shall include the jurisdictions within the ,state where the agency may allocate rental reduction credit amounts4 7,b7 ,possessions treated as ,states ,the term ,state includes a possession of the ,united ,states4 7,c7 ,family ,the term family has the same meaning as when used in the ,united ,states ,housing ,act of #aicg4 7d7 ,modifications ,to correct inaccurate amounts due to incorrect estimates 7#a7 ,establishment of reserves 7,a7 ,in general ,each rental reduction credit agency of a ,state shall establish a reserve for the transfer and reallocation of amounts pursuant to this paragraph1 and notwithstanding any other provision of this section1 the rental reduction credit amount allocated to any building by such agency shall be zero unless such agency has in effect such a reserve at the time of the allocation of such credit amount4 7,b7 ,transfers to reserve 7i7 ,in general ,if1 for any taxable year1 a taxpayer would 7but for this subparagraph7 not be able to use the entire rental reduction credit amount allocated to a qualified building by a rental reduction credit agency of a ,state for the taxable year because of a rental reduction shortfall1 then the taxpayer shall for the taxable year transfer to the reserve established by such agency under subparagraph 7,a7 an amount equal to such rental reduction shortfall4 7ii7 ,rental reduction shortfall ,for purposes of this subparagraph1 the rental reduction shortfall for any qualified building for any taxable year is the amount by which the aggregate amount of the excesses determined under subsection 7b77#a7 for all eligible units within such building are less than such aggregate amount estimated under subsection 7c77#b77;,b7 for the taxable year4 7iii7 ,treatment of transferred amount ,for purposes of subsection 7a77#b77;,a71 the aggregate qualified rental reduction amounts for all eligible units within a qualified building with respect to which clause 7i7 applies for any taxable year shall be increased by an amount equal to the applicable percentage 7determined under subsection 7e77#a7 for the building7 of the amount of the transfer to the reserve under clause 7i7 with respect to such building for such taxable year4 7,c7 ,reallocation of amounts transferred 7i7 ,in general ,if1 for any taxable year-- 7,i7 the aggregate qualified rental reduction amounts for all eligible units within a qualified building for the taxable year1 exceed 7,,ii7 the rental reduction credit amount allocated to such building by a rental reduction credit agency of a ,state for the taxable year 7determined after any increase under paragraph 7#b771 the rental reduction credit agency shall1 upon application of the taxpayer1 pay to the taxpayer from the reserve established by such agency under subparagraph 7,a7 the amount which1 when multiplied by the applicable percentage 7determined under subsection 7e77#a7 for the building71 equals such excess4 ,if the amount in the reserve is less than the amounts requested by all taxpayers for taxable years ending within the same calendar year1 the agency shall ratably reduce the amount of each payment otherwise required to be made4 7ii7 ,excess reserve amounts ,if a rental reduction credit agency of a ,state determines that the balance in its reserve is in excess of the amounts reasonably needed over the following #e calendar years to make payments under clause 7i71 the agency may withdraw such excess but only to-- 7,i7 reduce the rental payments of eligible tenants in a qualified building in units other than eligible units1 or of eligible tenants in units in a building other than a qualified building1 to amounts no higher than the sum of rental payments required for eligible tenants in qualified buildings under subsection 7b77#c7 and any rental charges to such tenants in excess of the market rent standard2 or 7,,ii7 address maintenance and repair needs in qualified buildings that cannot reasonably be met using other resources available to the owners of such buildings4 7,d7 ,administration ,each rental reduction credit agency of a ,state shall establish procedures for the timing and manner of transfers and payments made under this paragraph4 7,e7 ,special rule for projects ,in the case of a rental reduction credit allocated to a project consisting of more than #a qualified building1 a taxpayer may elect to have this paragraph apply as if all such buildings were #a qualified building if the applicable percentage for each such building is the same4 7,f7 ,alternative methods of transfer and reallocation ,upon request to1 and approval by1 the ,secretary1 a ,state may establish an alternative method for the transfer and reallocation of amounts otherwise required to be transferred to1 and allocated from1 a reserve under this paragraph4 ,any ,state adopting an alternative method under this subparagraph shall1 at such time and in such manner as the ,secretary prescribes1 provide to the ,secretary and the ,secretary of ,housing and ,urban ,development detailed reports on the operation of such method1 including providing such information as such ,secretaries may require4 7#b7 ,allocation of returned ,state ceiling amounts ,in the case of any rental reduction credit amount allocated to a qualified building which is canceled as provided in subsection 7c77#d77;,b77i71 the rental reduction credit agency may1 in lieu of treating such allocation as a returned credit amount under subsection 7c77#d77;,a77ii71 elect to allocate1 upon the request of the taxpayer1 such amount to any other qualified building for which the credit amount allocated in any preceding calendar year was too small because the estimates made under subsection 7c77#b77;,b7 were substantially incorrect4 7#c7 ,renting to noneligible tenants ,if1 after the application of paragraphs 7#a77;,c7 7or any similar reallocation under paragraph 7#a77;,f77 and 7#b71 a rental reduction credit agency of a ,state determines that1 because of the incorrect estimates under subsection 7c77#b77;,b71 the aggregate qualified rental reduction amounts for all eligible units within a qualified building will 7on an ongoing basis7 exceed the rental reduction credit amount allocated to such building1 a taxpayer may elect1 subject to subsection 7g77#b7 and only to the extent necessary to eliminate such excess1 rent vacant eligible units without regard to the requirements that such units be rented only to eligible tenants and at the rental rate determined under subsection 7b77#c74 7e7 ,terms relating to rental reduction credit and requirements ,for purposes of this section-- 7#a7 ,applicable percentage 7,a7 ,in general ,the term applicable percentage means1 with respect to any qualified building1 the percentage 7not greater than #aaj percent7 set by the rental reduction credit agency at the time it allocates the rental reduction dollar amount to such building4 7,b7 ,higher percentage for high-opportunity areas ,the rental reduction credit agency may set a percentage under subparagraph 7,a7 up to #abj percent for any qualified building which-- 7i7 targets its eligible units for rental to families with children1 and 7ii7 is located in a neighborhood which has a poverty rate of no more than #aj percent4 7#b7 ,credit period 7,a7 ,in general ,the term credit period means1 with respect to any qualified building1 the #ae-year period beginning with the first month for which the qualified rental reduction agreement is in effect with respect to such building4 7,b7 ,state option to reduce period ,a rental reduction credit agency may provide a credit period for any qualified building which is less than #ae years4 7#c7 ,eligible unit 7,a7 ,in general ,the term eligible unit means1 with respect to any qualified building1 a unit-- 7i7 which is occupied by an eligible tenant1 7ii7 the rent of which for any month equals #cj percent of the monthly family income of the residents of such unit 7as determined under paragraph 7#e771 7iii7 with respect to which the tenant is not concurrently receiving rental assistance under any other ,federal program1 and 7iv7 which is certified to the rental reduction credit agency as an eligible unit for purposes of this section and the qualified rental reduction agreement4 ,notwithstanding clause 7iii71 a ,state may provide in its ,state rental reduction allocation plan that an eligible unit shall also not include a unit with respect to which any resident is receiving rental assistance under a ,state or local program4 7,b7 ,limitation on number of units 7i7 ,in general ,the number of units which may be certified as eligible units with respect to any qualified building under subparagraph 7,a77iv7 at any time shall not exceed the greater of-- 7,i7 #dj percent of the total units in such building1 or 7,,ii7 #be units4 ,in the case of an allocation to a project under subsection 7c77#a77;,b71 the limitation under the preceding sentence shall be applied on a project basis and the certification of such eligible units shall be allocated to each building in the project1 except that if buildings in such project are on noncontiguous tracts of land1 buildings on each such tract shall be treated as a separate project for purposes of applying this sentence4 7ii7 ,buildings receiving previous ,federal rental assistance ,if1 at any time prior to the entering into of a qualified rental reduction agreement with respect to a qualified building1 tenants in units within such building had been receiving project-based rental assistance under any other ,federal program1 then1 notwithstanding clause 7i71 the maximum number of units which may be certified as eligible units with respect to the building under subparagraph 7,a77iv7 shall not be less than the sum of-- 7,i7 the maximum number of units in the building previously receiving such assistance at any time before the agreement takes effect1 plus 7,,ii7 the amount determined under clause 7i7 without taking into account the units described in subclause 7,i74 7#d7 ,eligible tenant 7,a7 ,in general ,the term eligible tenant means any individual if the individual's family income does not exceed the greater of-- 7i7 #cj percent of the area median gross income 7as determined under section #db7;g77#a771 or 7ii7 the applicable poverty line for a family of the size involved4 7,b7 ,treatment of individuals whose incomes rise above limit 7i7 ,in general ,notwithstanding an increase in the family income of residents of a unit above the income limitation applicable under subparagraph 7,a71 such residents shall continue to be treated as eligible tenants if the family income of such residents initially met such income limitation and such unit continues to be certified as an eligible unit under this section4 7ii7 ,no rental reduction for at least #b years ,a qualified rental reduction agreement with respect to a qualified building shall provide that if1 by reason of an increase in family income described in clause 7i71 there is no qualified rental reduction amount with respect to the dwelling unit for #b consecutive years1 the taxpayer shall rent the next available unit to an eligible tenant 7without regard to whether such unit is an eligible unit under this section74 7,c7 ,applicable poverty line ,the term applicable poverty line means the most recently published poverty line 7within the meaning of section #baaj7;c77#e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acig;jj7c77#e777 as of the time of the determination as to whether an individual is an eligible tenant4 7#e7 ,family income 7,a7 ,in general ,family income shall be determined in the same manner as under section #h of the ,united ,states ,housing ,act of #aicg4 7,b7 ,time for determining income 7i7 ,in general ,except as provided in this subparagraph1 family income shall be determined at least annually on the basis of income for the preceding calendar year4 7ii7 ,families on fixed income ,if at least #ij percent of the family income of the residents of a unit at the time of any determination under clause 7i7 is derived from payments under title ,,ii or ,,xvi of the ,social ,security ,act 7or any similar fixed income amounts specified by the ,secretary71 the taxpayer may elect to treat such payments 7or amounts7 as the family income of such residents for the year of the determination and the #b succeeding years1 except that the taxpayer shall1 in such manner as the ,secretary may prescribe1 adjust such amount for increases in the cost of living4 7iii7 ,initial income ,the ,secretary may allow a ,state to provide that the family income of residents at the time such residents first rent a unit in a qualified building may be determined on the basis of current or anticipated income4 7iv7 ,special rules where family income is reduced ,if residents of a unit establish 7in such manner as the rental reduction credit agency provides7 that their family income has been reduced by at least #aj percent below such income for the determination year-- 7,i7 such residents may elect1 at such time and in such manner as such agency may prescribe1 to have their family income redetermined1 and 7,,ii7 clause 7ii7 shall not apply to any of the #b succeeding years described in such clause which are specified in the election4 7f7 ,state rental reduction allocation plan 7#a7 ,adoption of plan required 7,a7 ,in general ,for purposes of this section-- 7i7 each ,state shall1 before the allocation of its ,state rental reduction credit ceiling1 establish and have in effect a ,state rental reduction allocation plan1 and 7ii7 notwithstanding any other provision of this section1 the rental reduction credit amount allocated to any building shall be zero unless such amount was allocated pursuant to a ,state rental reduction allocation plan4 ,such plan shall only be adopted after such plan is made public and at least #fj days has been allowed for public comment4 7,b7 ,state rental reduction allocation plan ,for purposes of this section1 the term ,state rental reduction allocation plan means1 with respect to any ,state1 any plan of the ,state meeting the requirements of paragraphs 7#b7 and 7#c74 7#b7 ,general plan requirements ,a plan shall meet the requirements of this paragraph only if-- 7,a7 the plan sets forth the criteria and priorities which a rental reduction credit agency of the ,state shall use in allocating the ,state rental reduction credit ceiling to eligible units within a building1 7,b7 the plan provides that no credit allocation shall be made which is not in accordance with the criteria and priorities set forth under subparagraph 7,a7 unless such agency provides a written explanation to the general public for any credit allocation which is not so made and the reasons why such allocation is necessary1 and 7,c7 the plan provides that such agency is required to prioritize the renewal of existing credit allocations at the time of the expiration of the qualified rental reduction agreement with respect to the allocation1 including1 where appropriate1 a commitment within a qualified rental reduction agreement that the credit allocation will be renewed if the terms of the agreement have been met and sufficient new credit authority is available4 7#c7 ,specific requirements ,a plan shall meet the requirements of this paragraph only if-- 7,a7 the plan provides methods for determining-- 7i7 the amount of rent which would be charged for a substantially similar unit in the same building which is not an eligible unit for purposes of subsection 7b77#b77;,a77i71 including whether such determination may be made by self-certification or by undertaking rent reasonableness assessments similar to assessments required under section #h7o77#aj7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f7o77#aj771 7ii7 the qualified rental reduction amounts under subsection 7c77#b77;,b71 and 7iii7 the applicable percentage under subsection 7e77#a71 7,b7 the plan provides a procedure that the rental reduction credit agency 7or an agent or other private contractor of such agency7 will follow in monitoring for-- 7i7 noncompliance with the provisions of this section and the qualified rental reduction agreement and in notifying the ,internal ,revenue ,service of any such noncompliance of which such agency becomes aware1 and 7ii7 noncompliance with habitability standards through regular site visits1 7,c7 the plan requires a person receiving a credit allocation to report to the rental reduction credit agency such information as is necessary to ensure compliance with the provisions of this section and the qualified rental reduction agreement1 and 7,d7 the plan provides methods by which any excess reserve amounts which become available under subsection 7d77#a77;,c77ii7 will be used to reduce rental payments of eligible tenants or to address maintenance and repair needs in qualified buildings1 including how such assistance will be allocated among eligible tenants and qualified buildings4 7g7 ,qualified rental reduction agreement ,for purposes of this section-- 7#a7 ,in general ,the term qualified rental reduction agreement means1 with respect to any building which is residential rental property 7as defined in section #afh7;e77#b77;,a771 a written1 binding agreement between a rental reduction credit agency and the taxpayer which specifies-- 7,a7 the number of eligible units within such building for which a rental reduction credit amount is being allocated1 7,b7 the credit period for such building1 7,c7 the rental reduction credit amount allocated to such building 7and dwelling units within such building7 and the portion of such amount allocated to each month within the credit period under subsection 7c77#b77;,b71 7,d7 the applicable percentage to be used in computing the qualified rental reduction amounts with respect to the building1 7,e7 the method for determining the amount of rent which may be charged for eligible units within the building1 and 7,f7 whether-- 7i7 the agency commits to entering into a new agreement with the taxpayer if the terms of the agreement have been met and sufficient new credit authority is available for such new agreement1 and 7ii7 the taxpayer is required to accept such new agreement4 7#b7 ,tenant protections ,a qualified rental reduction agreement shall provide the following3 7,a7 ,non-displacement of non-eligible tenants ,a taxpayer receiving a rental reduction credit amount may not refuse to renew the lease of or evict 7other than for good cause7 a tenant of a unit who is not an eligible tenant at any time during the credit period and such unit shall not be treated as an eligible unit while such tenant resides there4 7,b7 ,only good cause evictions of eligible tenants ,a taxpayer receiving a rental reduction credit amount may not refuse to renew the lease of or evict 7other than for good cause7 an eligible tenant of an eligible unit4 7,c7 ,mobility ,a taxpayer receiving a rental reduction credit amount shall-- 7i7 give priority to rent any available unit of suitable size to tenants who are eligible tenants who are moving from another qualified building where such tenants had lived at least #a year and were in good standing1 and 7ii7 inform eligible tenants within the building of their right to move after #a year and provide a list maintained by the ,state of qualified buildings where such tenants might move4 7,d7 ,fair housing and civil rights ,if a taxpayer receives a rental reduction credit amount-- 7i7 such taxpayer shall comply with the ,fair ,housing ,act with respect to the building1 and 7ii7 the receipt of such amount shall be treated as the receipt of ,federal financial assistance for purposes of applying any ,federal civil rights laws4 7,e7 ,admissions preferences ,a taxpayer receiving a rental reduction credit amount shall comply with any admissions preferences established by the ,state for tenants within particular demographic groups eligible for health or social services4 7#c7 ,compliance requirements ,a qualified rental reduction agreement shall provide that a taxpayer receiving a rental reduction credit amount shall comply with all reporting and other procedures established by the ,state to ensure compliance with this section and such agreement4 7#d7 ,projects ,in the case of a rental reduction credit allocated to a project consisting of more than #a building1 the rental reduction credit agency may provide for a single qualified rental reduction agreement which applies to all buildings which are part of such project4 7h7 ,certifications and other reports to ,secretary 7#a7 ,certification with respect to #ast year of credit period ,following the close of the #ast taxable year in the credit period with respect to any qualified building1 the taxpayer shall certify to the ,secretary 7at such time and in such form and in such manner as the ,secretary prescribes7-- 7,a7 the information described in subsection 7g77#a7 required to be contained in the qualified rental reduction agreement with respect to the building1 and 7,b7 such other information as the ,secretary may require4 ,in the case of a failure to make the certification required by the preceding sentence on the date prescribed therefor1 unless it is shown that such failure is due to reasonable cause and not to willful neglect1 no credit shall be allowable by reason of subsection 7a7 with respect to such building for any taxable year ending before such certification is made4 7#b7 ,annual reports to the ,secretary ,the ,secretary may require taxpayers to submit an information return 7at such time and in such form and manner as the ,secretary prescribes7 for each taxable year setting forth-- 7,a7 the information described in paragraph 7#a77;,a7 for the taxable year1 and 7,b7 such other information as the ,secretary may require4 ,the penalty under section #ffeb7;j7 shall apply to any failure to submit the return required by the ,secretary under the preceding sentence on the date prescribed therefor4 7#c7 ,annual reports from rental reduction credit agency 7,a7 ,reports ,each rental reduction credit agency which allocates any rental reduction credit amount to #a or more buildings for any calendar year shall submit to the ,secretary 7at such time and in such manner as the ,secretary shall prescribe7 an annual report specifying-- 7i7 the amount of rental reduction credit amounts allocated to each such building for such year1 7ii7 sufficient information to identify each such building and the taxpayer with respect thereto1 7iii7 information as to the demographic and income characteristics of eligible tenants of all such buildings to which such amounts were allocated1 and 7iv7 such other information as the ,secretary may require4 7,b7 ,penalty ,the penalty under section #ffeb7;j7 shall apply to any failure to submit the report required by subparagraph 7,a7 on the date prescribed therefor4 7,c7 ,information made public ,the ,secretary shall1 in consultation with ,secretary of ,housing and ,urban ,development1 make information reported under this paragraph for each qualified building available to the public annually to the greatest degree possible without disclosing personal information about individual tenants4 7i7 ,special rule for payments to partnerships and ,s corporations ,for purposes of this subtitle1 in the case of any qualified building directly held by any partnership or ,s corporation1 the payment under section #fdcf shall be made in lieu of the credit determined under this section with respect to such building4 7j7 ,regulations and guidance ,the ,secretary shall prescribe such regulations or guidance as may be necessary to carry out the purposes of this section1 including-- 7#a7 providing necessary forms and instructions1 and 7#b7 providing for proper treatment of projects for which a credit is allowed both under this section and section #db4 4 7b7 ,payment to partnerships and ,s corporations in lieu of credit 7#a7 ,in general ,subchapter ,b of chapter #fe of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #fdcf4 ,payments in lieu of renters credit for partnerships and ,s corporations 7a7 ,in general ,in the case of any qualified building 7as defined in section #cf;,c7a77#c77 directly held by any partnership or ,s corporation1 the ,secretary shall pay to such partnership or ,s corporation for any taxable year an amount equal to the amount of the credit which1 but for section #cf;,c7i71 would be allowed under section #cf;,c with respect to such building4 7b7 ,regulatory authority ,the ,secretary shall prescribe such regulations1 rules1 and guidance as may be necessary to carry out section #cf;,c7i71 section #ib1 and this section1 including regulations1 rules1 and guidance providing for-- 7#a7 the application of the rules under section #cf;,c with respect to payments under this section in the same manner as such rules apply for purposes of the credit under section #cf;,c1 7#b7 the time and manner of payments under subsection 7a71 and 7#c7 the determination of a partner's distributive share1 or an ,s corporation shareholder's pro rata share1 of any payment under subsection 7a74 4 7#b7 ,conforming amendment ,the table of sections for subchapter ,b of chapter #fe of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #fdcf4 ,payments in lieu of renters credit for partnerships and ,s corporations4 4 7c7 ,credit includible in gross income 7#a7 ,in general ,part ,,ii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ib4 ,inclusion in income of renters credit and payments ,gross income includes the amount of the credit allowed to the taxpayer under section #cf;,c for the taxable year and the amount of any payment in lieu of such credit under section #fdcf4 4 7#b7 ,income disregarded for alternative minimum taxable income ,section #ef7;a7 of such ,code is amended by adding at the end the following3 7#h7 ,section #ib not applicable ,section #ib 7relating to inclusion in income of renters credit7 shall not apply4 4 7#c7 ,conforming amendment ,the table of sections for part ,,ii of subchapter ,b of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #ib4 ,inclusion in income of renters credit and payments4 4 7d7 ,administrative fees ,no provision of1 or amendment made by1 this ,act shall be construed to prevent a rental reduction credit agency of a ,state from imposing fees to cover its costs or from levying any such fee on a taxpayer applying for or receiving a rental reduction credit amount4 7e7 ,other conforming amendments 7#a7 ,section #fbaa7;b77#d7 of the ,internal ,revenue ,code of #aihf is amended by inserting #cf;,c 7including any related payment under section #fdcf71 after #cf;,b14 7#b7 ,paragraph 7#b7 of section #acbd7;b7 of title #ca1 ,united ,states ,code1 is amended by inserting #cf;,c 7including any related payment under section #fdcf71 after #cf;,b14 7#c7 ,the table of sections for subpart ,c of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #cf;,b the following new item3 ,sec4 #cf;,c4 ,renters credit4 4 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 #bab4 ,middle-income housing tax credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #db the following new section3 #db;,a4 ,middle-income housing credit 7a7 ,in general ,for purposes of section #ch1 the amount of the middle-income housing credit determined under this section for any taxable year in the credit period shall be an amount equal to-- 7#a7 the applicable percentage1 of 7#b7 the qualified basis of each qualified middle-income building4 7b7 ,applicable percentage 7#a7 ,determination of applicable percentage ,for purposes of this section-- 7,a7 ,in general ,the term applicable percentage means1 with respect to any building1 the appropriate percentage prescribed by the ,secretary for the earlier of-- 7i7 the month in which such building is placed in service1 or 7ii7 at the election of the taxpayer1 the month in which the taxpayer and the housing credit agency enter into an agreement with respect to such building 7which is binding on such agency1 the taxpayer1 and all successors in interest7 as to the housing credit dollar amount to be allocated to such building4 ,a month may be elected under clause 7ii7 only if the election is made not later than the #eth day after the close of such month4 ,such an election1 once made1 shall be irrevocable4 7,b7 ,method of prescribing percentages ,the percentages prescribed by the ,secretary for any month shall be percentages which will yield over a #ae-year period amounts of credit under subsection 7a7 which have a present value equal to-- 7i7 #ej percent of the qualified basis of a new building which is not ,federally subsidized for the taxable year1 and 7ii7 #bj percent of the qualified basis of a building not described in clause 7i74 7,c7 ,method of discounting ,the present value under subparagraph 7,b7 shall be determined-- 7i7 as of the last day of the #ast year of the #ae-year period referred to in subparagraph 7,b71 7ii7 by using a discount rate equal to #gb percent of the average of the annual ,federal mid-term rate and the annual ,federal long-term rate applicable under section #abgd7;d77#a7 to the month applicable under clause 7i7 or 7ii7 of subparagraph 7,a7 and compounded annually1 and 7iii7 by assuming that the credit allowable under this section for any year is received on the last day of such year4 7#b7 ,minimum credit rate 7,a7 ,in general ,the applicable percentage for any building which is not ,federally subsidized for the taxable year shall not be less than #e percent4 7,b7 ,minimum credit rate for ,federally subsidized buildings ,in the case of any building to which subparagraph 7,a7 does not apply1 except as provided in paragraph 7#c71 the applicable percentage shall not be less than #b percent4 7#c7 ,exception for certain ,federally subsidized buildings ,in the case of any building to which paragraph 7#b77;,a7 does not apply1 the applicable percentage is zero unless-- 7,a7 a credit is allowed under section #db with respect to such building for the taxable year1 and 7,b7 such building is financed by tax-exempt bonds as described in section #db7;h77#d74 7#d7 ,cross-references 7,a7 ,for treatment of certain rehabilitation expenditures as separate new buildings1 see subsection 7e74 7,b7 ,for determination of applicable percentage for increases in qualified basis after the #ast year of the credit period1 see subsection 7f77#c74 7,c7 ,for authority of housing credit agency to limit applicable percentage and qualified basis which may be taken into account under this section with respect to any building1 see subsection 7h77#f74 7c7 ,qualified basis2 qualified middle-,income building ,for purposes of this section-- 7#a7 ,qualified basis 7,a7 ,determination ,the qualified basis of any qualified middle-income building for any taxable year is an amount equal to-- 7i7 the applicable fraction 7determined as of the close of such taxable year71 of 7ii7 the eligible basis of such building 7determined under subsection 7d774 7,b7 ,applicable fraction ,for purposes of subparagraph 7,a71 the term applicable fraction means the smaller of the unit fraction or the floor space fraction4 7,c7 ,unit fraction ,for purposes of subparagraph 7,b71 the term unit fraction means the fraction-- 7i7 the numerator of which is the number of middle-income units in the building1 and 7ii7 the denominator of which is the number of residential rental units 7whether or not occupied7 in such building4 7,d7 ,floor space fraction ,for purposes of subparagraph 7,b71 the term floor space fraction means the fraction-- 7i7 the numerator of which is the total floor space of the middle-income units in such building1 and 7ii7 the denominator of which is the total floor space of the residential rental units 7whether or not occupied7 in such building4 7#b7 ,qualified middle-income building ,the term qualified middle-income building means any building which is part of a qualified middle-income housing project at all times during the period-- 7,a7 beginning on the #ast day in the credit period on which such building is part of such a project1 and 7,b7 ending on the last day of the credit period with respect to such building4 7d7 ,eligible basis ,for purposes of this section-- 7#a7 ,new buildings ,the eligible basis of a new building is its adjusted basis as of the close of the #ast taxable year of the credit period4 7#b7 ,existing buildings 7,a7 ,in general ,the eligible basis of an existing building is-- 7i7 in the case of a building which meets the requirements of subparagraph 7,b71 its adjusted basis as of the close of the #ast taxable year of the credit period1 and 7ii7 zero in any other case4 7,b7 ,requirements ,a building meets the requirements of this subparagraph if-- 7i7 the building is acquired by purchase 7as defined in section #agi7;d77#b771 7ii7 there is a period of at least #aj years between the date of its acquisition by the taxpayer and the date the building was last placed in service1 7iii7 the building was not previously placed in service by the taxpayer or by any person who was a related person with respect to the taxpayer as of the time previously placed in service1 and 7iv7 except as provided in subsection 7f77#e71 a credit is allowable under subsection 7a7 by reason of subsection 7e7 with respect to the building4 7,c7 ,adjusted basis ,for purposes of subparagraph 7,a71 the adjusted basis of any building shall not include so much of the basis of such building as is determined by reference to the basis of other property held at any time by the person acquiring the building4 7,d7 ,special rules 7i7 ,special rules for certain transfers ,for purposes of determining under subparagraph 7,b77ii7 when a building was last placed in service1 there shall not be taken into account any placement in service-- 7,i7 in connection with the acquisition of the building in a transaction in which the basis of the building in the hands of the person acquiring it is determined in whole or in part by reference to the adjusted basis of such building in the hands of the person from whom acquired1 7,,ii7 by a person whose basis in such building is determined under section #ajad7;a7 7relating to property acquired from a decedent71 7,,iii7 by any governmental unit or qualified nonprofit organization 7as defined in subsection 7h77#d77 if the requirements of subparagraph 7,b77ii7 are met with respect to the placement in service by such unit or organization and all the income from such property is exempt from ,federal income taxation1 7,,iv7 by any person who acquired such building by foreclosure 7or by instrument in lieu of foreclosure7 of any purchase-money security interest held by such person if the requirements of subparagraph 7,b77ii7 are met with respect to the placement in service by such person and such building is resold within #ab months after the date such building is placed in service by such person after such foreclosure1 or 7,v7 of a single-family residence by any individual who owned and used such residence for no other purpose than as his principal residence4 7ii7 ,related person ,for purposes of subparagraph 7,b77iii71 a person 7hereinafter in this subclause referred to as the related person7 is related to any person if the related person bears a relationship to such person specified in section #bfg7;b7 or #gjg7;b77#a71 or the related person and such person are engaged in trades or businesses under common control 7within the meaning of subsections 7a7 and 7b7 of section #eb74 7#c7 ,eligible basis reduced where disproportionate standards for units 7,a7 ,in general ,except as provided in subparagraph 7,b71 the eligible basis of any building shall be reduced by an amount equal to the portion of the adjusted basis of the building which is attributable to residential rental units in the building which are not middle-income units and which are above the average quality standard of the middle-income units in the building4 7,b7 ,exception where taxpayer elects to exclude excess costs 7i7 ,in general ,subparagraph 7,a7 shall not apply with respect to a residential rental unit in a building which is not a middle-income unit if-- 7,i7 the excess described in clause 7ii7 with respect to such unit is not greater than #ae percent of the cost described in clause 7ii77,,ii71 and 7,,ii7 the taxpayer elects to exclude from the eligible basis of such building the excess described in clause 7ii7 with respect to such unit4 7ii7 ,excess ,the excess described in this clause with respect to any unit is the excess of-- 7,i7 the cost of such unit1 over 7,,ii7 the amount which would be the cost of such unit if the average cost per square foot of middle-income units in the building were substituted for the cost per square foot of such unit4 ,the ,secretary may by regulation provide for the determination of the excess under this clause on a basis other than square foot costs4 7#d7 ,special rules relating to determination of adjusted basis ,for purposes of this subsection-- 7,a7 ,in general ,except as provided in subparagraph 7,b71 the adjusted basis of any building shall be determined without regard to the adjusted basis of any property which is not residential rental property4 7,b7 ,basis of property in common areas1 etc41 included 7i7 ,in general ,except as provided in clause 7ii71 the adjusted basis of any building shall be determined by taking into account the adjusted basis of property 7of a character subject to the allowance for depreciation7 used in common areas or provided as comparable amenities to all residential rental units in such building4 7ii7 ,special rule ,in the case of any building for which the low-income housing tax credit is allowable under section #db1 the adjusted basis of the building under this section shall be determined without regard to property used in common areas or provided as comparable amenities to all residential rental units in such building4 7,c7 ,no reduction for depreciation ,the adjusted basis of any building shall be determined without regard to paragraphs 7#b7 and 7#c7 of section #ajaf7;a74 7#e7 ,special rules for determining eligible basis 7,a7 ,federal grants not taken into account in determining eligible basis ,the eligible basis of a building shall not include any costs financed with the proceeds of a ,federally funded grant4 7,b7 ,increase in credit for buildings in high cost areas 7i7 ,in general ,in the case of any building located in a qualified census tract or difficult development area-- 7,i7 in the case of a new building1 the eligible basis of such building shall be #acj percent of such basis determined without regard to this subparagraph1 and 7,,ii7 in the case of an existing building1 the rehabilitation expenditures taken into account under subsection 7e7 shall be #acj percent of such expenditures determined without regard to this subparagraph4 7ii7 ,qualified census tract ,the term qualified census tract means1 with respect to any period any census tract which is treated as a qualified census tract under section #db7;d77#e77;,b74 7iii7 ,difficult development areas ,the term difficult development areas means any census tract which is treated as a difficult development area under section #db7;d77#e77;,b7 7determined without regard to clause 7v7 thereof74 7iv7 ,buildings designated by ,state ,housing ,credit ,agency ,any building which is designated by the ,state housing credit agency as requiring the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified middle-income housing project shall be treated for purposes of this subparagraph as located in a difficult development area which is designated for purposes of this subparagraph4 ,the preceding sentence shall not apply to any building if paragraph 7#a7 of subsection 7h7 does not apply to any portion of the eligible basis of such building by reason of paragraph 7#i7 of such subsection4 7#f7 ,credit allowable for certain buildings acquired during #aj-year period 7,a7 ,in general ,paragraph 7#b77;,b77ii7 shall not apply to any ,federally assisted building 7as defined in section #db7;d77#f77;,c77i77 or ,state-assisted building 7as defined in section #db7;d77#f77;,c77ii774 7,b7 ,buildings acquired from insured depository institutions in default ,on application by the taxpayer1 the ,secretary may waive paragraph 7#b77;,b77ii7 with respect to any building acquired from an insured depository institution in default 7as defined in section #c of the ,federal ,deposit ,insurance ,act7 or from a receiver or conservator of such an institution4 7#g7 ,acquisition of building before end of prior credit period 7,a7 ,in general ,under regulations prescribed by the ,secretary1 in the case of a building described in subparagraph 7,b7 7or interest therein7 which is acquired by the taxpayer-- 7i7 paragraph 7#b77;,b7 shall not apply1 but 7ii7 the credit allowable by reason of subsection 7a7 to the taxpayer for any period after such acquisition shall be equal to the amount of credit which would have been allowable under subsection 7a7 for such period to the prior owner referred to in subparagraph 7,b7 had such owner not disposed of the building4 7,b7 ,description of building ,a building is described in this subparagraph if-- 7i7 a credit was allowed by reason of subsection 7a7 to any prior owner of such building1 and 7ii7 the taxpayer acquired such building before the end of the credit period for such building with respect to such prior owner 7determined without regard to any disposition by such prior owner74 7e7 ,rehabilitation expenditures treated as separate new building 7#a7 ,in general ,rehabilitation expenditures paid or incurred by the taxpayer with respect to any building shall be treated for purposes of this section as a separate new building4 7#b7 ,rehabilitation expenditures ,for purposes of paragraph 7#a7-- 7,a7 ,in general ,the term rehabilitation expenditures means amounts chargeable to capital account and incurred for property 7or additions or improvements to property7 of a character subject to the allowance for depreciation in connection with the rehabilitation of a building4 7,b7 ,cost of acquisition1 etc41 not included ,such term does not include the cost of acquiring any building 7or interest therein7 or any amount not permitted to be taken into account under paragraph 7#c7 or 7#d7 of subsection 7d74 7#c7 ,minimum expenditures to qualify 7,a7 ,in general ,paragraph 7#a7 shall apply to rehabilitation expenditures with respect to any building only if-- 7i7 the expenditures are allocable to #a or more middle-income units or substantially benefit such units1 and 7ii7 the amount of such expenditures during any #bd-month period meets the requirements of whichever of the following subclauses requires the greater amount of such expenditures3 7,i7 ,the requirement of this subclause is met if such amount is not less than #bj percent of the adjusted basis of the building 7determined as of the #ast day of such period and without regard to paragraphs 7#b7 and 7#c7 of section #ajaf7;a774 7,,ii7 ,the requirement of this subclause is met if the qualified basis attributable to such amount1 when divided by the number of middle-income units in the building1 is equal to or greater than the dollar amount in effect under section #db7;e77#c77;,a77ii77,,ii7 for the calendar year in which such expenditures are treated as placed in service under paragraph 7#d74 7,b7 ,exception ,in the case of a building acquired by the taxpayer from a governmental unit1 at the election of the taxpayer1 subparagraph 7,a77ii77,i7 shall not apply and the credit under this section for such rehabilitation expenditures shall be determined using the percentage under subsection 7b7 which is applicable to buildings which are ,federally subsidized4 7,c7 ,date of determination ,the determination under subparagraph 7,a7 shall be made as of the close of the #ast taxable year in the credit period with respect to such expenditures4 7#d7 ,special rules ,for purposes of applying this section with respect to expenditures which are treated as a separate building by reason of this subsection-- 7,a7 such expenditures shall be treated as placed in service at the close of the #bd-month period referred to in paragraph 7#c77;,a71 and 7,b7 the applicable fraction under subsection 7c77#a7 shall be the applicable fraction for the building 7without regard to paragraph 7#a77 with respect to which the expenditures were incurred4 ,nothing in subsection 7d77#b7 shall prevent a credit from being allowed by reason of this subsection4 7#e7 ,no double counting ,rehabilitation expenditures may1 at the election of the taxpayer1 be taken into account under this subsection or subsection 7d77#b77;,a77i7 but not under both such subsections4 7#f7 ,regulations to apply subsection with respect to group of units in building ,the ,secretary may prescribe regulations1 consistent with the purposes of this subsection1 treating a group of units with respect to which rehabilitation expenditures are incurred as a separate new building4 7f7 ,definition and special rules relating to credit period 7#a7 ,credit period defined ,for purposes of this section1 the term credit period means1 with respect to any building1 the period of #ae taxable years beginning with-- 7,a7 the taxable year in which the building is placed in service1 or 7,b7 at the election of the taxpayer1 the succeeding taxable year1 but only if the building is a qualified middle-income building as of the close of the #ast year of such period4 ,the election under subparagraph 7,b71 once made1 shall be irrevocable4 7#b7 ,special rule for #ast year of credit period 7,a7 ,in general ,the credit allowable under subsection 7a7 with respect to any building for the #ast taxable year of the credit period shall be determined by substituting for the applicable fraction under subsection 7c77#a7 the fraction-- 7i7 the numerator of which is the sum of the applicable fractions determined under subsection 7c77#a7 as of the close of each full month of such year during which such building was in service1 and 7ii7 the denominator of which is #ab4 7,b7 ,disallowed #ast-year credit allowed in #afth year ,any reduction by reason of subparagraph 7,a7 in the credit allowable 7without regard to subparagraph 7,a77 for the #ast taxable year of the credit period shall be allowable under subsection 7a7 for the #ast taxable year following the credit period4 7#c7 ,determination of applicable percentage with respect to increases in qualified basis after #ast year of credit period 7,a7 ,in general ,in the case of any building which was a qualified middle-income building as of the close of the #ast year of the credit period1 if-- 7i7 as of the close of any taxable year in the credit period 7after the #ast year of such period7 the qualified basis of such building1 exceeds 7ii7 the qualified basis of such building as of the close of the #ast year of the credit period1 the applicable percentage which shall apply under subsection 7a7 for the taxable year to such excess shall be the percentage equal to #b_/c of the applicable percentage which 7after the application of subsection 7h77 would but for this paragraph apply to such basis4 7,b7 #ast year computation applies ,a rule similar to the rule of paragraph 7#b77;,a7 shall apply to any increase in qualified basis to which subparagraph 7,a7 applies for the #ast year of such increase4 7#d7 ,dispositions of property ,if a building 7or an interest therein7 is disposed of during any year for which credit is allowable under subsection 7a71 such credit shall be allocated between the parties on the basis of the number of days during such year the building 7or interest7 was held by each4 7#e7 ,credit period for existing buildings not to begin before rehabilitation credit allowed 7,a7 ,in general ,the credit period for an existing building shall not begin before the #ast taxable year of the credit period for rehabilitation expenditures with respect to the building4 7,b7 ,acquisition credit allowed for certain buildings not allowed a rehabilitation credit 7i7 ,in general ,in the case of a building described in clause 7ii7-- 7,i7 subsection 7d77#b77;,b77iv7 shall not apply1 and 7,,ii7 the credit period for such building shall not begin before the taxable year which would be the #ast taxable year of the credit period for rehabilitation expenditures with respect to the building under the modifications described in clause 7ii77,,ii74 7ii7 ,building described ,a building is described in this clause if-- 7,i7 a waiver is granted under subsection 7d77#e7 with respect to the acquisition of the building1 and 7,,ii7 a credit would be allowed for rehabilitation expenditures with respect to such building if subsection 7e77#c77;,a77ii77,i7 did not apply and if the dollar amount in effect under subsection 7e77#c77;,a77ii77,,ii7 were two-thirds of such amount4 7g7 ,qualified middle-,income housing project ,for purposes of this section-- 7#a7 ,in general ,the term qualified middle-income housing project means any project for residential rental property if-- 7,a7 #fj percent or more of the residential units in such project are both rent-restricted and occupied by individuals whose income is #ajj percent or less of area median gross income1 and 7,b7 not less than #bj percent of the residential units in such project are units which-- 7i7 are described in subparagraph 7,a71 and 7ii7 are not residential units which are taken into account under section #db4 7#b7 ,rent-restricted units 7,a7 ,in general ,for purposes of paragraph 7#a71 a residential unit is rent-restricted if the gross rent with respect to such unit does not exceed #cj percent of the imputed income limitation applicable to such unit4 ,for purposes of the preceding sentence1 the amount of the income limitation under paragraph 7#a7 applicable for any period shall not be less than such limitation applicable for the earliest period the building 7which contains the unit7 was included in the determination of whether the project is a qualified middle-income housing project4 7,b7 ,gross rent ,for purposes of subparagraph 7,a71 gross rent-- 7i7 includes any utility allowance determined by the ,secretary after taking into account such determinations under section #h of the ,united ,states ,housing ,act of #aicg1 7ii7 does not include any fee for a supportive service which is paid to the owner of the unit 7on the basis of the middle-income status of the tenant of the unit7 by any governmental program of assistance 7or by an organization described in section #eja7;c77#c7 and exempt from tax under section #eja7;a77 if such program 7or organization7 provides assistance for rent and the amount of assistance provided for rent is not separable from the amount of assistance provided for supportive services1 and 7iii7 does not include any rental payment to the owner of the unit to the extent such owner pays an equivalent amount to the ,farmers' ,home ,administration under section #eae of the ,housing ,act of #aidi4 ,for purposes of clause 7ii71 the term supportive service means any service provided under a planned program of services designed to enable residents of a residential rental property to remain independent and avoid placement in a hospital1 nursing home1 or intermediate care facility for the mentally or physically handicapped4 7,c7 ,imputed income limitation applicable to unit ,for purposes of this paragraph1 the imputed income limitation applicable to a unit is the income limitation which would apply under paragraph 7#a7 to individuals occupying the unit if the number of individuals occupying the unit were as follows3 7i7 ,in the case of a unit which does not have a separate bedroom1 #a individual4 7ii7 ,in the case of a unit which has #a or more separate bedrooms1 #a4e individuals for each separate bedroom4 ,in the case of a project with respect to which a credit is allowable by reason of this section and for which financing is provided by a bond described in section #adb7;a77#g71 the imputed income limitation shall apply in lieu of the otherwise applicable income limitation for purposes of applying section #adb7;d77#d77;,b77ii74 7,d7 ,treatment of units occupied by individuals whose incomes rise above limit 7i7 ,in general ,except as provided in clause 7ii71 notwithstanding an increase in the income of the occupants of a middle-income unit above the income limitation applicable under paragraph 7#a71 such unit shall continue to be treated as a middle-income unit if the income of such occupants initially met such income limitation and such unit continues to be rent-restricted4 7ii7 ,next available unit must be rented to middle-income tenant if income rises above #adj percent of income limit ,if the income of the occupants of the unit increases above #adj percent of the income limitation applicable under paragraph 7#a71 clause 7i7 shall cease to apply to such unit if any residential rental unit in the building 7of a size comparable to1 or smaller than1 such unit7 is occupied by a new resident whose income exceeds such income limitation4 7#c7 ,date for meeting requirements 7,a7 ,in general ,except as otherwise provided in this paragraph1 a building shall be treated as a qualified middle-income building only if the project 7of which such building is a part7 meets the requirements of paragraph 7#a7 not later than the close of the #ast year of the credit period for such building4 7,b7 ,buildings which rely on later buildings for qualification 7i7 ,in general ,in determining whether a building 7hereinafter in this subparagraph referred to as the prior building7 is a qualified middle-income building1 the taxpayer may take into account #a or more additional buildings placed in service during the #ab-month period described in subparagraph 7,a7 with respect to the prior building only if the taxpayer elects to apply clause 7ii7 with respect to each additional building taken into account4 7ii7 ,treatment of elected buildings ,in the case of a building which the taxpayer elects to take into account under clause 7i71 the period under subparagraph 7,a7 for such building shall end at the close of the #ab-month period applicable to the prior building4 7iii7 ,date prior building is treated as placed in service ,for purposes of determining the credit period for the prior building1 the prior building shall be treated for purposes of this section as placed in service on the most recent date any additional building elected by the taxpayer 7with respect to such prior building7 was placed in service4 7,c7 ,special rule ,a building-- 7i7 other than the #ast building placed in service as part of a project1 and 7ii7 other than a building which is placed in service during the #ab-month period described in subparagraph 7,a7 with respect to a prior building which becomes a qualified middle-income building1 shall in no event be treated as a qualified middle-income building unless the project is a qualified middle-income housing project 7without regard to such building7 on the date such building is placed in service4 7,d7 ,projects with more than #a building must be identified ,for purposes of this section1 a project shall be treated as consisting of only #a building unless1 before the close of the #ast calendar year in the project period 7as defined in subsection 7h77#a77;,f77ii771 each building which is 7or will be7 part of such project is identified in such form and manner as the ,secretary may provide4 7#d7 ,certain rules made applicable ,paragraphs 7#b7 7other than subparagraph 7,a7 thereof71 7#c71 and 7#g7 of section #adb7;d71 and section #ffeb7;j71 shall apply for purposes of determining whether any project is a qualified middle-income housing project and whether any unit is a middle-income unit2 except that1 in applying such provisions for such purposes-- 7,a7 the term gross rent shall have the meaning given such term by paragraph 7#b77;,b7 of this subsection1 and 7,b7 the term applicable income limit means the limitation under paragraph 7#a7 of this subsection4 7#e7 ,election to treat building after credit period as not part of a project ,for purposes of this section1 the taxpayer may elect to treat any building as not part of a qualified middle-income housing project for any period beginning after the credit period for such building4 7#f7 ,special rule where de minimis equity contribution ,property shall not be treated as failing to be residential rental property for purposes of this section merely because the occupant of a residential unit in the project pays 7on a voluntary basis7 to the lessor a de minimis amount to be held toward the purchase by such occupant of a residential unit in such project if-- 7,a7 all amounts so paid are refunded to the occupant on the cessation of his occupancy of a unit in the project1 and 7,b7 the purchase of the unit is not permitted until after the close of the credit period with respect to the building in which the unit is located4 ,any amount paid to the lessor as described in the preceding sentence shall be included in gross rent under paragraph 7#b7 for purposes of determining whether the unit is rent-restricted4 7#g7 ,scattered site projects ,buildings which would 7but for their lack of proximity7 be treated as a project for purposes of this section shall be so treated if all of the dwelling units in each of the buildings are rent-restricted 7within the meaning of paragraph 7#b77 residential rental units4 7#h7 ,waiver of certain recertifications ,on application by the taxpayer1 the ,secretary may waive any annual recertification of tenant income for purposes of this subsection1 if the entire building is occupied by middle-income tenants4 7#i7 ,clarification of general public use requirement ,a project does not fail to meet the general public use requirement solely because of occupancy restrictions or preferences that favor tenants-- 7,a7 with special needs1 7,b7 who are members of a specified group under a ,federal program or ,state program or policy that supports housing for such a specified group1 or 7,c7 who are involved in artistic or literary activities4 7h7 ,limitation on aggregate credit allowable with respect to projects located in a ,state 7#a7 ,credit may not exceed credit amount allocated to building 7,a7 ,in general ,the amount of the credit determined under this section for any taxable year with respect to any building shall not exceed the housing credit dollar amount allocated to such building under this subsection4 7,b7 ,time for making allocation ,except in the case of an allocation which meets the requirements of subparagraph 7,c71 7,d71 7,e71 or 7,f71 an allocation shall be taken into account under subparagraph 7,a7 only if it is made not later than the close of the calendar year in which the building is placed in service4 7,c7 ,exception where binding commitment ,an allocation meets the requirements of this subparagraph if there is a binding commitment 7not later than the close of the calendar year in which the building is placed in service7 by the housing credit agency to allocate a specified housing credit dollar amount to such building beginning in a specified later taxable year4 7,d7 ,exception where increase in qualified basis 7i7 ,in general ,an allocation meets the requirements of this subparagraph if such allocation is made not later than the close of the calendar year in which ends the taxable year to which it will #ast apply but only to the extent the amount of such allocation does not exceed the limitation under clause 7ii74 7ii7 ,limitation ,the limitation under this clause is the amount of credit allowable under this section 7without regard to this subsection7 for a taxable year with respect to an increase in the qualified basis of the building equal to the excess of-- 7,i7 the qualified basis of such building as of the close of the #ast taxable year to which such allocation will apply1 over 7,,ii7 the qualified basis of such building as of the close of the #ast taxable year to which the most recent prior housing credit allocation with respect to such building applied4 7iii7 ,housing credit dollar amount reduced by full allocation ,notwithstanding clause 7i71 the full amount of the allocation shall be taken into account under paragraph 7#b74 7,e7 ,exception where #aj percent of cost incurred 7i7 ,in general ,an allocation meets the requirements of this subparagraph if such allocation is made with respect to a qualified building which is placed in service not later than the close of the second calendar year following the calendar year in which the allocation is made4 7ii7 ,qualified building ,for purposes of clause 7i71 the term qualified building means any building which is part of a project if the taxpayer's basis in such project 7as of the date which is #a year after the date that the allocation was made7 is more than #aj percent of the taxpayer's reasonably expected basis in such project 7as of the close of the second calendar year referred to in clause 7i774 ,such term does not include any existing building unless a credit is allowable under subsection 7e7 for rehabilitation expenditures paid or incurred by the taxpayer with respect to such building for a taxable year ending during the second calendar year referred to in clause 7i7 or the prior taxable year4 7,f7 ,allocation of credit on a project basis 7i7 ,in general ,in the case of a project which includes 7or will include7 more than #a building1 an allocation meets the requirements of this subparagraph if-- 7,i7 the allocation is made to the project for a calendar year during the project period1 7,,ii7 the allocation only applies to buildings placed in service during or after the calendar year for which the allocation is made1 and 7,,iii7 the portion of such allocation which is allocated to any building in such project is specified not later than the close of the calendar year in which the building is placed in service4 7ii7 ,project period ,for purposes of clause 7i71 the term project period means the period-- 7,i7 beginning with the #ast calendar year for which an allocation may be made for the #ast building placed in service as part of such project1 and 7,,ii7 ending with the calendar year the last building is placed in service as part of such project4 7#b7 ,allocated credit amount to apply to all taxable years ending during or after credit allocation year ,any housing credit dollar amount allocated to any building for any calendar year-- 7,a7 shall apply to such building for all taxable years in the credit period ending during or after such calendar year1 and 7,b7 shall reduce the aggregate housing credit dollar amount of the allocating agency only for such calendar year4 7#c7 ,housing credit dollar amount for agencies 7,a7 ,in general ,the aggregate housing credit dollar amount which a housing credit agency may allocate for any calendar year is the portion of the ,state housing credit ceiling allocated under this paragraph for such calendar year to such agency4 7,b7 ,state ceiling initially allocated to ,state housing credit agencies ,except as provided in subparagraph 7,d71 the ,state housing credit ceiling for each calendar year shall be allocated to the housing credit agency of such ,state4 ,if there is more than #a housing credit agency of a ,state1 all such agencies shall be treated as a single agency4 7,c7 ,state housing credit ceiling ,the ,state housing credit ceiling applicable to any ,state for any calendar year shall be an amount equal to the sum of-- 7i7 the unused ,state housing credit ceiling 7if any7 of such ,state for the preceding calendar year1 7ii7 the greater of-- 7,i7 #a4jj multiplied by the ,state population1 or 7,,ii7 #a1ejj1jjj1 plus 7iii7 the amount of ,state housing credit ceiling returned in the calendar year4 ,for purposes of clause 7i71 the unused ,state housing credit ceiling for any calendar year is the excess 7if any7 of the sum of the amounts described in clauses 7ii7 7reduced by the aggregate amounts described in paragraph 7#aj77;,a77i7 with respect to all elections made for such calendar year7 and 7iii7 over the aggregate housing credit dollar amount allocated for such year4 ,for purposes of clause 7iii71 the amount of ,state housing credit ceiling returned in the calendar year equals the housing credit dollar amount previously allocated within the ,state to any project which fails to meet the #aj percent test under paragraph 7#a77;,e77ii7 on a date after the close of the calendar year in which the allocation was made or which does not become a qualified middle-income housing project within the period required by this section or the terms of the allocation or to any project with respect to which an allocation is cancelled by mutual consent of the housing credit agency and the allocation recipient4 7,d7 ,state may provide for different allocation ,rules similar to the rules of section #adf7;e7 7other than paragraph 7#b77;,b7 thereof7 shall apply for purposes of this paragraph4 7,e7 ,population ,for purposes of this paragraph1 population shall be determined in accordance with section #adf7;j74 7,f7 ,cost-of-living adjustment 7i7 ,in general ,in the case of a calendar year after #bjbf1 the #a1ejj1jjj and #a4jj amounts in subparagraph 7,c7 shall each be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7ii7 ,rounding 7,i7 ,in the case of the #a1ejj1jjj amount1 any increase under clause 7i7 which is not a multiple of #e1jjj shall be rounded to the next lowest multiple of #e1jjj4 7,,ii7 ,in the case of the #a4jj amount1 any increase under clause 7i7 which is not a multiple of #e cents shall be rounded to the next lowest multiple of #e cents4 7#d7 ,portion of ,state ceiling set-aside for certain projects involving qualified nonprofit organizations 7,a7 ,in general ,not more than #ij percent of the ,state housing credit ceiling 7determined without regard to paragraph 7#g77 for any ,state for any calendar year shall be allocated to projects other than qualified middle-income housing projects described in subparagraph 7,b74 7,b7 ,projects involving qualified nonprofit organizations ,for purposes of subparagraph 7,a71 a qualified middle-income housing project is described in this subparagraph if a qualified nonprofit organization is to own an interest in the project 7directly or through a partnership7 and materially participate 7within the meaning of section #dfi7;h77 in the development and operation of the project throughout the credit period4 7,c7 ,qualified nonprofit organization ,for purposes of this paragraph1 the term qualified nonprofit organization means any organization if-- 7i7 such organization is described in paragraph 7#c7 or 7#d7 of section #eja7;c7 and is exempt from tax under section #eja7;a71 7ii7 such organization is determined by the ,state housing credit agency not to be affiliated with or controlled by a for-profit organization1 and 7iii7 one of the exempt purposes of such organization includes the fostering of middle-income housing4 7,d7 ,treatment of certain subsidiaries 7i7 ,in general ,for purposes of this paragraph1 a qualified nonprofit organization shall be treated as satisfying the ownership and material participation test of subparagraph 7,b7 if any qualified corporation in which such organization holds stock satisfies such test4 7ii7 ,qualified corporation ,for purposes of clause 7i71 the term qualified corporation means any corporation if #ajj percent of the stock of such corporation is held by #a or more qualified nonprofit organizations at all times during the period such corporation is in existence4 7,e7 ,state may not override set-aside ,nothing in subparagraph 7,e7 of paragraph 7#c7 shall be construed to permit a ,state not to comply with subparagraph 7,a7 of this paragraph4 7#e7 ,buildings eligible for credit only if minimum long-term commitment to middle-income housing 7,a7 ,in general ,no credit shall be allowed by reason of this section with respect to any building for the taxable year unless an extended middle-income housing commitment is in effect as of the end of such taxable year4 7,b7 ,extended middle-income housing commitment ,for purposes of this paragraph1 the term extended middle-income housing commitment means any agreement between the taxpayer and the housing credit agency-- 7i7 which requires that the applicable fraction 7as defined in subsection 7c77#a77 for the building for each taxable year in the extended use period will not be less than the applicable fraction specified in such agreement and which prohibits the actions described in subclauses 7,i7 and 7,,ii7 of subparagraph 7,e77ii71 7ii7 which allows individuals who meet the income limitation applicable to the building under subsection 7g7 7whether prospective1 present1 or former occupants of the building7 the right to enforce in any ,state court the requirement and prohibitions of clause 7i71 7iii7 which prohibits the disposition to any person of any portion of the building to which such agreement applies unless all of the building to which such agreement applies is disposed of to such person1 7iv7 which prohibits the refusal to lease to a holder of a voucher or certificate of eligibility under section #h of the ,united ,states ,housing ,act of #aicg because of the status of the prospective tenant as such a holder1 7v7 which is binding on all successors of the taxpayer1 and 7vi7 which1 with respect to the property1 is recorded pursuant to ,state law as a restrictive covenant4 7,c7 ,allocation of credit may not exceed amount necessary to support commitment 7i7 ,in general ,the housing credit dollar amount allocated to any building may not exceed the amount necessary to support the applicable fraction specified in the extended middle-income housing commitment for such building1 including any increase in such fraction pursuant to the application of subsection 7f77#c7 if such increase is reflected in an amended middle-income housing commitment4 7ii7 ,buildings financed by tax-exempt bonds ,if paragraph 7#i7 applies to any building the amount of credit allowed in any taxable year may not exceed the amount necessary to support the applicable fraction specified in the extended low-income housing commitment for such building4 ,such commitment may be amended to increase such fraction4 7,d7 ,extended use period ,for purposes of this paragraph1 the term extended use period means the period-- 7i7 beginning on the #ast day in the credit period on which such building is part of a qualified middle-income housing project1 and 7ii7 ending on the later of-- 7,i7 the date specified by such agency in such agreement1 or 7,,ii7 the date which is #ae years after the close of the credit period4 7,e7 ,exceptions if foreclosure or if no buyer willing to maintain middle-income status 7i7 ,in general ,the extended use period for any building shall terminate-- 7,i7 on the date the building is acquired by foreclosure 7or instrument in lieu of foreclosure7 unless the ,secretary determines that such acquisition is part of an arrangement with the taxpayer a purpose of which is to terminate such period1 or 7,,ii7 on the last day of the period specified in subparagraph 7,i7 if the housing credit agency is unable to present during such period a qualified contract for the acquisition of the middle-income portion of the building by any person who will continue to operate such portion as a qualified middle-income building4 ,subclause 7,,ii7 shall no apply to the extent more stringent requirements are provided in the agreement or in ,state law4 7ii7 ,eviction1 etc41 of existing middle-income tenants not permitted ,the termination of an extended use period under clause 7i7 shall not be construed to permit before the close of the #c-year period following such termination-- 7,i7 the eviction or the termination of tenancy 7other than for good cause7 of an existing tenant of any middle-income unit1 or 7,,ii7 any increase in the gross rent with respect to such unit not otherwise permitted under this section4 7,f7 ,qualified contract ,for purposes of subparagraph 7,e71 the term qualified contract means a bona fide contract to acquire 7within a reasonable period after the contract is entered into7 the nonmiddle-income portion of the building for fair market value and the middle-income portion of the building for an amount not less than the applicable fraction 7specified in the extended middle-income housing commitment7 of-- 7i7 the sum of-- 7,i7 the outstanding indebtedness secured by1 or with respect to1 the building1 7,,ii7 the adjusted investor equity in the building1 plus 7,,iii7 other capital contributions not reflected in the amounts described in subclause 7,i7 or 7,,ii71 reduced by 7ii7 cash distributions from 7or available for distribution from7 the project4 ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph1 including regulations to prevent the manipulation of the amount determined under the preceding sentence4 7,g7 ,adjusted investor equity 7i7 ,in general ,for purposes of subparagraph 7,f71 the term adjusted investor equity means1 with respect to any calendar year1 the aggregate amount of cash taxpayers invested with respect to the project increased by the amount equal to-- 7,i7 such amount1 multiplied by 7,,ii7 the cost-of-living adjustment for such calendar year1 determined under section #a7;f77#c7 by substituting the base calendar year for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,an amount shall be taken into account as an investment in the project only to the extent there was an obligation to invest such amount as of the beginning of the credit period and to the extent such amount is reflected in the adjusted basis of the project4 7ii7 ,cost-of-living increases in excess of #e percent not taken into account ,under regulations prescribed by the ,secretary1 if the ,c-,,cpi-,u for any calendar year 7as defined in section #a7;f77#f77 exceeds the ,c-,,cpi-,u for the preceding calendar year by more than #e percent1 the ,c-,,cpi-,u for the base calendar year shall be increased such that such excess shall never be taken into account under clause 7i74 ,in the case of a base calendar year before #bjag1 the ,c-,,cpi-,u for such year shall be determined by multiplying the ,,cpi for such year by the amount determined under section #a7;f77#c77;,b74 7iii7 ,base calendar year ,for purposes of this subparagraph1 the term base calendar year means the calendar year with or within which the #ast taxable year of the credit period ends4 7,h7 ,middle-income portion ,for purposes of this paragraph1 the middle-income portion of a building is the portion of such building equal to the applicable fraction specified in the extended middle-income housing commitment for the building4 7,i7 ,period for finding buyer ,the period referred to in this subparagraph is the #a-year period beginning on the date 7after the #adth year of the credit period7 the taxpayer submits a written request to the housing credit agency to find a person to acquire the taxpayer's interest in the low-income portion of the building4 7,j7 ,effect of noncompliance ,if1 during a taxable year1 there is a determination that an extended middle-income housing agreement was not in effect as of the beginning of such year1 such determination shall not apply to any period before such year and subparagraph 7,a7 shall be applied without regard to such determination if the failure is corrected within #a year from the date of the determination4 7,k7 ,projects which consist of more than #a building ,the application of this paragraph to projects which consist of more than #a building shall be made under regulations prescribed by the ,secretary4 7#f7 ,special rules 7,a7 ,building must be located within jurisdiction of credit agency ,a housing credit agency may allocate its aggregate housing credit dollar amount only to buildings located in the jurisdiction of the governmental unit of which such agency is a part4 7,b7 ,agency allocations in excess of limit ,if the aggregate housing credit dollar amounts allocated by a housing credit agency for any calendar year exceed the portion of the ,state housing credit ceiling allocated to such agency for such calendar year1 the housing credit dollar amounts so allocated shall be reduced 7to the extent of such excess7 for buildings in the reverse of the order in which the allocations of such amounts were made4 7,c7 ,credit reduced if allocated credit dollar amount is less than credit which would be allowable without regard to placed in service convention1 etc 7i7 ,in general ,the amount of the credit determined under this section with respect to any building shall not exceed the clause 7ii7 percentage of the amount of the credit which would 7but for this subparagraph7 be determined under this section with respect to such building4 7ii7 ,determination of percentage ,for purposes of clause 7i71 the clause 7ii7 percentage with respect to any building is the percentage which-- 7,i7 the housing credit dollar amount allocated to such building1 bears to 7,,ii7 the credit amount determined in accordance with clause 7iii74 7iii7 ,determination of credit amount ,the credit amount determined in accordance with this clause is the amount of the credit which would 7but for this subparagraph7 be determined under this section with respect to the building if-- 7,i7 this section were applied without regard to paragraphs 7#b77;,a7 and 7#c77;,b7 of subsection 7f71 and 7,,ii7 subsection 7f77#c77;,a7 were applied without regard to the percentage equal to #b_/c of4 7,d7 ,housing credit agency to specify applicable percentage and maximum qualified basis ,in allocating a housing credit dollar amount to any building1 the housing credit agency shall specify the applicable percentage and the maximum qualified basis which may be taken into account under this section with respect to such building4 ,the applicable percentage and maximum qualified basis so specified shall not exceed the applicable percentage and qualified basis determined under this section without regard to this subsection4 7#g7 ,increase in ,state ceiling dedicated to certain rural development projects 7,a7 ,in general ,the ,state housing credit ceiling for any calendar year shall be increased by an amount equal to #e percent of the amount determined under paragraph 7#c77;,c77ii74 7,b7 ,use of increased amount 7i7 ,in general ,the amount of the increase under subparagraph 7,a7 for any calendar year may only be allocated to buildings located in a rural area4 7ii7 ,rural area ,for purposes of clause 7i71 the term rural area means any nonmetropolitan area1 or any rural area as defined by section #ebj of the ,housing ,act of #aidi1 which is identified by the qualified allocation plan under subsection 7l77#a77;,b74 7#h7 ,other definitions ,for purposes of this subsection-- 7,a7 ,housing credit agency ,the term housing credit agency means any agency authorized to carry out this subsection4 7,b7 ,possessions treated as ,states ,the term ,state includes a possession of the ,united ,states4 7#i7 ,credit for buildings financed by tax-exempt bonds subject to volume cap not taken into account ,rules similar to the rules of subsections 7h77#d71 7m77#a77;,d71 and 7m77#b77;,d7 of section #db shall apply for purposes of this subsection4 7#aj7 ,election to transfer ,state housing credit ceiling for allocations to low-income buildings 7,a7 ,in general ,if a ,state housing credit agency makes an election under this paragraph with respect to a calendar year-- 7i7 the ,state housing credit ceiling for such calendar year under paragraph 7#c7 7determined before application of paragraph 7#g77 shall be reduced by the amount specified in such election1 7ii7 the amount determined under paragraph 7#g7 for such calendar year shall be reduced by the amount specified in such election1 and 7iii7 the amount determined under section #db7;h77#c77;,c77ii7 for such calendar year shall be increased by the sum of the amounts specified in clauses 7i7 and 7ii71 except that any amount specified under clause 7ii7-- 7,i7 may only be allocated under such section to qualified low-income buildings 7as defined in section #db7 located in a rural area 7as defined in paragraph 7#g771 and 7,,ii7 shall not be taken into account for purposes of determining the unused housing credit ceiling under the second sentence of section #db7;h77#c77;,c74 7,b7 ,time and manner for making election 7i7 ,in general ,an election under this paragraph-- 7,i7 shall be made before the end of the calendar year with respect to which such election applies1 7,,ii7 shall be made in such manner as specified by the ,secretary1 and 7,,iii7 shall separately specify the amount of reductions to be made under paragraph 7#c7 and paragraph 7#g74 7ii7 ,frequency ,a ,state housing credit agency may make more than one election under this section with respect to any calendar year1 and any such election1 once made1 shall be revocable only if such revocation is made before the end of the calendar year with respect to which such election is made4 7,c7 ,limitation ,the aggregate amount specified in elections under this paragraph with respect to any ,state housing credit agency for calendar year shall not exceed the sum of-- 7i7 the amount determined under paragraph 7#c77;,c77ii7 for such calendar year1 plus 7ii7 the amount determined under paragraph 7#g7 for such calendar year4 7i7 ,definitions and special rules ,for purposes of this section-- 7#a7 ,middle-income unit 7,a7 ,in general ,the term middle-income unit means any unit in a building if-- 7i7 such unit is rent-restricted 7as defined in subsection 7g77#b771 and 7ii7 the individuals occupying such unit meet the income limitation applicable under subsection 7g77#a7 to the project of which such building is a part4 7,b7 ,exceptions 7i7 ,exclusion of low-income units ,a unit shall not be treated as a middle-income unit if such unit is a low-income unit 7as defined under section #db7;i77#c774 7ii7 ,unit must be suitable for permanent occupancy 7,i7 ,in general ,a unit shall not be treated as a middle-income unit unless the unit is suitable for occupancy and used other than on a transient basis4 7,,ii7 ,transitional housing for homeless ,for purposes of subclause 7,i71 a unit shall be considered to be used other than on a transient basis if the unit contains sleeping accommodations and kitchen and bathroom facilities and is located in a building-- 7aa7 which is used exclusively to facilitate the transition of homeless individuals 7within the meaning of section #ajc of the ,stewart ,b4 ,mc,kinney ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aacjb71 as in effect on the date of the enactment of this clause7 to independent living within #bd months1 and 7bb7 in which a governmental entity or qualified nonprofit organization 7as defined in subsection 7h77#d77 provides such individuals with temporary housing and supportive services designed to assist such individuals in locating and retaining permanent housing4 7,,iii7 ,suitability for occupancy ,for purposes of subclause 7,i71 the suitability of a unit for occupancy shall be determined under regulations prescribed by the ,secretary taking into account local health1 safety1 and building codes4 7,,iv7 ,single-room occupancy units ,for purposes of subclause 7,i71 a single-room occupancy unit shall not be treated as used on a transient basis merely because it is rented on a month-by-month basis4 7,c7 ,special rule for buildings having #d or fewer units ,in the case of any building which has #d or fewer residential rental units1 no unit in such building shall be treated as a middle-income unit if the units in such building are owned by-- 7i7 any individual who occupies a residential unit in such building1 or 7ii7 any person who is related 7as defined in subsection 7d77#b77;,d77ii77 to such individual4 7,d7 ,certain students not to disqualify unit ,a unit shall not fail to be treated as a middle-income unit merely because it is occupied-- 7i7 by an individual who is-- 7,i7 a student and receiving assistance under title ,,iv of the ,social ,security ,act1 7,,ii7 a student who was previously under the care and placement responsibility of the ,state agency responsible for administering a plan under part ,b or part ,e of title ,,iv of the ,social ,security ,act1 or 7,,iii7 enrolled in a job training program receiving assistance under the ,job ,training ,partnership ,act or under other similar ,federal1 ,state1 or local laws1 or 7ii7 entirely by full-time students if such students are-- 7,i7 single parents and their children and such parents are not dependents 7as defined in section #aeb1 determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof7 of another individual and such children are not dependents 7as so defined7 of another individual other than a parent of such children1 or 7,,ii7 married and file a joint return4 7,e7 ,owner-occupied buildings having #d or fewer units eligible for credit where development plan 7i7 ,in general ,subparagraph 7,c7 shall not apply to the acquisition or rehabilitation of a building pursuant to a development plan of action sponsored by a ,state or local government or a qualified nonprofit organization4 7ii7 ,limitation on credit ,in the case of a building to which clause 7i7 applies1 the applicable fraction shall not exceed #hj percent of the unit fraction4 7iii7 ,certain unrented units treated as owner-occupied ,in the case of a building to which clause 7i7 applies1 any unit which is not rented for #ij days or more shall be treated as occupied by the owner of the building as of the #ast day it is not rented4 7#b7 ,new building ,the term new building means a building the original use of which begins with the taxpayer4 7#c7 ,existing building ,the term existing building means any building which is not a new building4 7#d7 ,application to estates and trusts ,in the case of an estate or trust1 the amount of the credit determined under subsection 7a7 shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each4 7#e7 ,impact of tenant's right of #ast refusal to acquire property 7,a7 ,in general ,no ,federal income tax benefit shall fail to be allowable to the taxpayer with respect to any qualified middle-income building merely by reason of a right of #ast refusal held by the tenants 7in cooperative form or otherwise7 or resident management corporation of such building or by a qualified nonprofit organization 7as defined in subsection 7h77#d77;,c77 or government agency to purchase the property after the close of the credit period for a price which is not less than the minimum purchase price determined under subparagraph 7,b74 7,b7 ,minimum purchase price ,for purposes of subparagraph 7,a71 the minimum purchase price under this subparagraph is an amount equal to the sum of-- 7i7 the principal amount of outstanding indebtedness secured by the building 7other than indebtedness incurred within the #e-year period ending on the date of the sale to the tenants71 and 7ii7 all ,federal1 ,state1 and local taxes attributable to such sale4 ,except in the case of ,federal income taxes1 there shall not be taken into account under clause 7ii7 any additional tax attributable to the application of clause 7ii74 7#f7 ,impact of purchase option to acquire property 7,a7 ,in general ,no ,federal income tax benefit shall fail to be allowable to the taxpayer with respect to any qualified middle-income building merely by reason of a purchase option held by the tenants 7in cooperative form or otherwise7 or resident management corporation of such building or by a qualified nonprofit organization 7as defined in subsection 7h77#d77;,c77 or government agency to purchase the property or all of the partnership interests 7other than interests of the person exercising such option or a related party thereto 7within the meaning of section #bfg7;b7 or #gjg7;b77#a777 relating to the property after the close of the credit period for a price which is not less than the minimum purchase price determined under subparagraph 7,b74 7,b7 ,minimum purchase price ,for purposes of subparagraph 7,a7-- 7i7 ,in general ,except as provided in clause 7ii71 the minimum purchase price is the amount determined under paragraph 7#e77;,b74 7ii7 ,partnership interests ,in the case of a purchase of all of the partnership interests relating to a property1 the minimum purchase price under this subparagraph shall be an amount not less than the sum of the interests' shares of the amount which would be determined with respect to the property under paragraph 7#e77;,b7 without regard to this sentence4 7,c7 ,property ,for purposes of subparagraph 7,a71 the term property may include all or any of the assets held for the development1 operation1 or maintenance of a building4 7,d7 ,application to ,s corporations and other pass-through entities ,except as provided by the ,secretary1 the rules of this paragraph shall apply to ,s corporations and other pass-through entities in the same manner as such rules apply to partnerships4 7#g7 ,treatment of rural projects ,for purposes of this section1 in the case of any project for residential rental property located in a rural area 7as defined in section #ebj of the ,housing ,act of #aidi71 any income limitation measured by reference to area median gross income shall be measured by reference to the greater of area median gross income or national nonmetropolitan median income4 ,the preceding sentence shall not apply with respect to any building if paragraph 7#a7 of subsection 7h7 does not apply by reason of paragraph 7#i7 thereof to any portion of the credit determined under this section with respect to such building4 7#h7 ,determination of whether building is ,federally subsidized 7,a7 ,in general ,except as otherwise provided in this paragraph1 for purposes of this section1 a project shall be treated as federally subsidized for any taxable year if1 at any time during such taxable year or any prior taxable year1 there is or was outstanding any obligation the interest on which is exempt from tax under section #ajc the proceeds of which are or were used 7directly or indirectly7 with respect to such project or the operation thereof4 7,b7 ,election to reduce eligible basis by proceeds of obligations ,a tax-exempt obligation shall not be taken into account under subparagraph 7,a7 if the taxpayer elects to exclude from the eligible basis of the building for purposes of subsection 7d7 the proceeds of such obligation4 7,c7 ,special rule for subsidized construction financing ,subparagraph 7,a7 shall not apply to any tax-exempt obligation used to provide construction financing for any building if-- 7i7 such obligation 7when issued7 identified the building for which the proceeds of such obligation would be used1 and 7ii7 such obligation is redeemed before such building is placed in service4 7#i7 ,reduction in basis ,in the case of any building for which a credit is allowable under this section and section #db1 the basis of the building shall be reduced by the amount of such credit allowed under subsection 7a74 7j7 ,application of at-,risk rules ,for purposes of this section-- 7#a7 ,in general ,except as otherwise provided in this subsection1 rules similar to the rules of section #di7;a77#a7 7other than subparagraphs 7,d77ii77,,ii7 and 7,d77iv77,i7 thereof71 section #di7;a77#b71 and section #di7;b77#a7 shall apply in determining the qualified basis of any building in the same manner as such sections apply in determining the credit base of property4 7#b7 ,special rules for determining qualified person ,for purposes of paragraph 7#a7-- 7,a7 ,in general ,if the requirements of subparagraphs 7,b71 7,c71 and 7,d7 are met with respect to any financing borrowed from a qualified nonprofit organization 7as defined in subsection 7h77#d771 the determination of whether such financing is qualified commercial financing with respect to any qualified middle-income building shall be made without regard to whether such organization-- 7i7 is actively and regularly engaged in the business of lending money1 or 7ii7 is a person described in section #di7;a77#a77;,d77iv77,,ii74 7,b7 ,financing secured by property ,the requirements of this subparagraph are met with respect to any financing if such financing is secured by the qualified middle-income building1 except that this subparagraph shall not apply in the case of a federally assisted building described in section #db7;d77#f77;,c77i7 if-- 7i7 a security interest in such building is not permitted by a ,federal agency holding or insuring the mortgage secured by such building1 and 7ii7 the proceeds from the financing 7if any7 are applied to acquire or improve such building4 7,c7 ,portion of building attributable to financing ,the requirements of this subparagraph are met with respect to any financing for any taxable year in the credit period if1 as of the close of such taxable year1 not more than #fj percent of the eligible basis of the qualified middle-income building is attributable to such financing 7reduced by the principal and interest of any governmental financing which is part of a wrap-around mortgage involving such financing74 7,d7 ,repayment of principal and interest ,the requirements of this subparagraph are met with respect to any financing if such financing is fully repaid on or before the earliest of-- 7i7 the date on which such financing matures1 7ii7 the #ijth day after the close of the credit period with respect to the qualified middle-income building1 or 7iii7 the date of its refinancing or the sale of the building to which such financing relates4 ,in the case of a qualified nonprofit organization which is not described in section #di7;a77#a77;,d77iv77,,ii7 with respect to a building1 clause 7ii7 of this subparagraph shall be applied as if the date described therein were the #ijth day after the earlier of the date the building ceases to be a qualified middle-income building or the date which is #ae years after the close of a credit period with respect thereto4 7#c7 ,present value of financing ,if the rate of interest on any financing described in paragraph 7#b77;,a7 is less than the rate which is #a percentage point below the applicable ,federal rate as of the time such financing is incurred1 then the qualified basis 7to which such financing relates7 of the qualified middle-income building shall be the present value of the amount of such financing1 using as the discount rate such applicable ,federal rate4 ,for purposes of the preceding sentence1 the rate of interest on any financing shall be determined by treating interest to the extent of government subsidies as not payable4 7#d7 ,failure to fully repay 7,a7 ,in general ,to the extent that the requirements of paragraph 7#b77;,d7 are not met1 then the taxpayer's tax under this chapter for the taxable year in which such failure occurs shall be increased by an amount equal to the applicable portion of the credit under this section with respect to such building1 increased by an amount of interest for the period-- 7i7 beginning with the due date for the filing of the return of tax imposed by chapter #a for the #ast taxable year for which such credit was allowable1 and 7ii7 ending with the due date for the taxable year in which such failure occurs1 determined by using the underpayment rate and method under section #ffba4 7,b7 ,applicable portion ,for purposes of subparagraph 7,a71 the term applicable portion means the aggregate decrease in the credits allowed to a taxpayer under section #ch for all prior taxable years which would have resulted if the eligible basis of the building were reduced by the amount of financing which does not meet requirements of paragraph 7#b77;,d74 7,c7 ,certain rules to apply ,rules similar to the rules of subparagraphs 7,a7 and 7,d7 of section #db7;j77#d7 shall apply for purposes of this subsection4 7k7 ,certifications and other reports to ,secretary 7#a7 ,certification with respect to #ast year of credit period ,following the close of the #ast taxable year in the credit period with respect to any qualified middle-income building1 the taxpayer shall certify to the ,secretary 7at such time and in such form and in such manner as the ,secretary prescribes7-- 7,a7 the taxable year1 and calendar year1 in which such building was placed in service1 7,b7 the adjusted basis and eligible basis of such building as of the close of the #ast year of the credit period1 7,c7 the maximum applicable percentage and qualified basis permitted to be taken into account by the appropriate housing credit agency under subsection 7h71 and 7,d7 such other information as the ,secretary may require4 ,in the case of a failure to make the certification required by the preceding sentence on the date prescribed therefor1 unless it is shown that such failure is due to reasonable cause and not to willful neglect1 no credit shall be allowable by reason of subsection 7a7 with respect to such building for any taxable year ending before such certification is made4 7#b7 ,annual reports to the ,secretary ,the ,secretary may require taxpayers to submit an information return 7at such time and in such form and manner as the ,secretary prescribes7 for each taxable year setting forth-- 7,a7 the qualified basis for the taxable year of each qualified middle-income building of the taxpayer1 7,b7 the information described in paragraph 7#a77;,c7 for the taxable year1 and 7,c7 such other information as the ,secretary may require4 ,the penalty under section #ffeb7;j7 shall apply to any failure to submit the return required by the ,secretary under the preceding sentence on the date prescribed therefor4 7#c7 ,annual reports from housing credit agencies ,each agency which allocates any housing credit amount to any building for any calendar year shall submit to the ,secretary 7at such time and in such manner as the ,secretary shall prescribe7 an annual report specifying-- 7,a7 the amount of housing credit amount allocated to each building for such year1 7,b7 sufficient information to identify each such building and the taxpayer with respect thereto1 and 7,c7 such other information as the ,secretary may require4 ,the penalty under section #ffeb7;j7 shall apply to any failure to submit the report required by the preceding sentence on the date prescribed therefor4 7l7 ,responsibilities of housing credit agencies 7#a7 ,plans for allocation of credit among projects 7,a7 ,in general ,notwithstanding any other provision of this section1 the housing credit dollar amount with respect to any building shall be zero unless-- 7i7 such amount was allocated pursuant to a qualified allocation plan of the housing credit agency which is approved by the governmental unit 7in accordance with rules similar to the rules of section #db7m77#a77 of which such agency is a part1 7ii7 a comprehensive market study of the housing needs of middle-income individuals in the area to be served by the project is conducted before the credit allocation is made and at the developer's expense by a disinterested party who is approved by such agency1 and 7iii7 a written explanation is available to the general public for any allocation of a housing credit dollar amount which is not made in accordance with established priorities and selection criteria of the housing credit agency4 7,b7 ,qualified allocation plan ,for purposes of this paragraph1 the term qualified allocation plan means any plan-- 7i7 which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions1 7ii7 which also gives preference in allocating housing credit dollar amounts among selected projects to-- 7,i7 projects obligated to serve qualified tenants for the longest periods1 7,,ii7 projects in areas with insufficient supply of housing affordable to median income households1 7,,iii7 projects which target housing to tenants at a range of incomes between #fj and #ajj percent of area median gross income1 and 7,,iv7 projects located near transit hubs1 and 7iii7 which provides a procedure that the agency 7or an agent or other private contractor of such agency7 will follow in monitoring for noncompliance with the provisions of this section and in notifying the ,internal ,revenue ,service of such noncompliance which such agency becomes aware of and in monitoring for noncompliance with habitability standards through regular site visits4 7,c7 ,certain selection criteria must be used ,the selection criteria set forth in a qualified allocation plan must include-- 7i7 project location1 7ii7 housing needs characteristics1 7iii7 project characteristics1 including whether the project includes the use of existing housing as part of a community revitalization plan1 7iv7 sponsor characteristics1 7v7 tenant populations with special housing needs1 7vi7 tenant populations of individuals with children1 7vii7 projects intended for eventual tenant ownership1 7viii7 the energy efficiency of the project1 and 7ix7 the historic nature of the project4 7,d7 ,certain selection criteria prohibited ,the selection criteria set forth in a qualified allocation plan shall not include a requirement of local approval or local contributions1 either as a threshold qualification requirement or as part of a point system to be considered for allocations of housing credit dollar amount4 7#b7 ,credit allocated to building not to exceed amount necessary to assure project feasibility 7,a7 ,in general ,the housing credit dollar amount allocated to a project shall not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the project and its viability as a qualified middle-income housing project throughout the credit period4 7,b7 ,agency evaluation ,in making the determination under subparagraph 7,a71 the housing credit agency shall consider-- 7i7 the sources and uses of funds and the total financing planned for the project1 7ii7 any proceeds or receipts expected to be generated by reason of tax benefits1 7iii7 the percentage of the housing credit dollar amount used for project costs other than the cost of intermediaries1 and 7iv7 the reasonableness of the developmental and operational costs of the project4 ,clause 7iii7 shall not be applied so as to impede the development of projects in hard-to-develop areas4 ,such a determination shall not be construed to be a representation or warranty as to the feasibility or viability of the project4 7,c7 ,determination made when credit amount applied for and when building placed in service 7i7 ,in general ,a determination under subparagraph 7,a7 shall be made as of each of the following times3 7,i7 ,the application for the housing credit dollar amount4 7,,ii7 ,the allocation of the housing credit dollar amount4 7,,iii7 ,the date the building is placed in service4 7ii7 ,certification as to amount of other subsidies ,prior to each determination under clause 7i71 the taxpayer shall certify to the housing credit agency the full extent of all ,federal1 ,state1 and local subsidies which apply 7or which the taxpayer expects to apply7 with respect to the building4 7m7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section1 including-- 7#a7 regulations dealing with-- 7,a7 projects which include more than #a building or only a portion of a building1 or 7,b7 buildings which are placed in service in portions1 7#b7 regulations providing for the application of this section to short taxable years1 7#c7 regulations preventing the avoidance of the rules of this section1 7#d7 regulations providing the opportunity for housing credit agencies to correct administrative errors and omissions with respect to allocations and recordkeeping within a reasonable period after their discovery1 taking into account the availability of regulations and other administrative guidance from the ,secretary1 and 7#e7 in consultation with the ,secretary of ,housing and ,urban ,development1 regulations or guidance to promote uniform definitions and to streamline requirements with respect to qualified middle-income buildings which receive funding from programs administrated by the ,department of ,housing and ,urban ,development1 including programs authorized by ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif4 4 7b7 ,treatment as part of general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking plus at the end of paragraph 7#dj71 by striking the period at the end of paragraph 7#da7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#db7 the middle-income housing credit determined under section #db;,a7a74 4 7c7 ,reduction in basis ,section #ajaf7;a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking and at the end of paragraph 7#cg71 7#b7 by redesignating paragraph 7#ch7 as paragraph 7#ci71 and 7#c7 by inserting after paragraph 7#cg7 the following new paragraph3 7#ch7 to the extent provided in section #db;,a7i77#i71 and 4 7d7 ,treatment under base erosion minimum tax ,section #ei;,a7b77#c7 of the ,internal ,revenue ,code of #aihf is amended by redesignating subparagraphs 7,b7 and 7,c7 as subparagraphs 7,c7 and 7,d71 respectively1 and by inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 the middle-income housing credit determined under section #db;,a7a71 4 7e7 ,conforming amendments relating to low-,income housing tax credit ,section #db7n7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking including regulations-- in the matter preceding paragraph 7#a7 and inserting including--1 7#b7 by inserting regulations before dealing with in paragraph 7#a71 7#c7 by inserting regulations before providing in paragraphs 7#b7 and 7#d71 7#d7 by inserting regulations before preventing in paragraph 7#c71 7#e7 by striking and at the end of paragraph 7#c71 7#f7 by striking the period at the end of paragraph 7#d7 and inserting 1 and1 and 7#g7 by adding at the end the following new paragraph 7#e7 in consultation with the ,secretary of ,housing and ,urban ,development1 regulations or guidance to promote uniform definitions and to streamline requirements with respect to qualified low-income buildings which receive funding from programs administrated by the ,department of ,housing and ,urban ,development1 including programs authorized by ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif4 4 7f7 ,conforming amendments 7#a7 ,section #de,l7e7 of the ,internal ,revenue ,code of #aihf is amended by inserting or #db;,a after #db4 7#b7 ,section #ej7;c77#c77;,c7 of such ,code is amended by inserting or #db;,a after #db4 7#c7 ,section #ee7;c77#a7 of such ,code is amended by inserting #db;,a7j71 before #de7;e77#aa77;,c74 7#d7 ,subsections 7i77#c77;,c71 7i77#f77;,b77i71 and 7k77#a7 of section #dfi of such ,code are each amended by inserting or #db;,a after #db4 7#e7 ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #db the following new item3 ,sec4 #db;,a4 ,middle-income housing credit4 4 7g7 ,effective date ,the amendments made by this section shall apply to buildings placed in service after ,december #ca1 #bjbe1 in taxable years ending after such date4 #bac4 ,neighborhood homes credit 7a7 ,findings and sense of ,congress 7#a7 ,findings ,congress finds the following3 7,a7 ,experts have determined that it could take nearly a decade to address the housing shortage in the ,united ,states1 in large part due to increasing housing prices and insufficient supply4 7,b7 ,the housing supply shortage disproportionately impacts low-income and distressed communities4 7,c7 ,homeownership is a primary source of household wealth and neighborhood stability4 ,many distressed communities have low rates of homeownership and lack quality1 affordable starter homes1 while many individuals who own their homes have difficulty securing financing for home repairs and improvements4 7,d7 ,housing construction in distressed communities is prevented by the value gap1 the difference between the cost to develop a home and the sale price of the home4 7,e7 ,the ,neighborhood ,homes ,investment ,act can close these financing gaps to increase housing development and rehabilitation in distressed communities4 7#b7 ,sense of ,congress ,it is the sense of ,congress that the neighborhood homes credit 7as added under this section7 should be an activity administered in a manner which-- 7,a7 revitalizes distressed communities in rural and urban geographies2 7,b7 minimizes application burdens on small businesses applying for such credit2 and 7,c7 is consistent with the ,fair ,housing ,act of #aifh 7#db ,u4,s4,c4 #cfja et seq474 7b7 ,allowance of credit ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by section #bab1 is amended by inserting after section #db;,a the following new section3 #db;,b4 ,neighborhood homes credit 7a7 ,allowance of credit ,for purposes of section #ch1 the neighborhood homes credit determined under this section for the taxable year is1 with respect to each qualified residence sold by the taxpayer during such taxable year in an affordable sale1 the lesser of-- 7#a7 an amount equal to-- 7,a7 the excess 7if any7 of-- 7i7 the reasonable development costs paid or incurred by the taxpayer with respect to such qualified residence1 over 7ii7 the sale price of such qualified residence 7reduced by any reasonable expenses paid or incurred by the taxpayer in connection with such sale71 or 7,b7 if the neighborhood homes credit agency determines it is necessary to ensure financial feasibility1 an amount not to exceed #abj percent of the amount under subparagraph 7,a71 7#b7 #dj percent of the eligible development costs paid or incurred by the taxpayer with respect to such qualified residence1 or 7#c7 #cb percent of the national median sale price for new homes 7as determined pursuant to the most recent census data available as of the date on which the neighborhood homes credit agency makes an allocation for the qualified project74 7b7 ,development costs ,for purposes of this section-- 7#a7 ,reasonable development costs 7,a7 ,in general ,the term reasonable development costs means amounts paid or incurred for the acquisition of buildings and land1 construction1 substantial rehabilitation1 demolition of structures1 or environmental remediation1 to the extent that the neighborhood homes credit agency determines that such amounts meet the standards specified pursuant to subsection 7f77#a77;,d7 7as of the date on which construction or substantial rehabilitation is substantially complete1 as determined by such agency7 and are necessary to ensure the financial feasibility of such qualified residence4 7,b7 ,considerations in making determination ,in making the determination under subparagraph 7,a71 the neighborhood homes credit agency shall consider-- 7i7 the sources and uses of funds and the total financing1 7ii7 any proceeds or receipts generated or expected to be generated by reason of tax benefits1 and 7iii7 the reasonableness of the developmental costs and fees4 7#b7 ,eligible development costs ,the term eligible development costs means the amount which would be reasonable development costs if the amounts taken into account as paid or incurred for the acquisition of buildings and land did not exceed #ge percent of such costs determined without regard to any amount paid or incurred for the acquisition of buildings and land4 7#c7 ,substantial rehabilitation ,the term substantial rehabilitation means amounts paid or incurred for rehabilitation of a qualified residence if such amounts exceed the greater of-- 7,a7 #be1jjj1 or 7,b7 #bj percent of the amounts paid or incurred by the taxpayer for the acquisition of buildings and land with respect to such qualified residence4 7#d7 ,construction and rehabilitation only after allocation taken into account 7,a7 ,in general ,the terms reasonable development costs and eligible development costs shall not include any amount paid or incurred before the date on which an allocation is made to the taxpayer under subsection 7e7 with respect to the qualified project of which the qualified residence is part unless such amount is paid or incurred for the acquisition of buildings or land4 7,b7 ,land and building acquisition costs ,amounts paid or incurred for the acquisition of buildings or land shall be included under paragraph 7,a7 only if paid or incurred not more than #c years before the date on which the allocation referred to in subparagraph 7,a7 is made4 ,if the taxpayer acquired any building or land from an entity 7or any related party to such entity7 that holds an ownership interest in the taxpayer1 then such entity must also have acquired such property within such #c-year period1 and the acquisition cost included under subparagraph 7,a7 with respect to the taxpayer shall not exceed the amount such entity paid or incurred to acquire such property4 7c7 ,qualified residence ,for purposes of this section-- 7#a7 ,in general ,the term qualified residence means a residence that-- 7,a7 is real property 7constructed on-site or manufactured off-site7 affixed on a permanent foundation1 7,b7 is-- 7i7 a house which is comprised of #d or fewer residential units1 7ii7 a condominium unit1 or 7iii7 a house or an apartment owned by a cooperative housing corporation 7as defined in section #baf7;b771 7,c7 is part of a qualified project with respect to which the neighborhood homes credit agency has made an allocation under subsection 7e71 and 7,d7 is located in a qualified census tract 7determined as of the date of such allocation74 7#b7 ,qualified census tract 7,a7 ,in general ,the term qualified census tract means a census tract-- 7i7 which-- 7,i7 has a median family income which does not exceed #hj percent of the median family income for the applicable area1 7,,ii7 has a poverty rate that is not less than #acj percent of the poverty rate of the applicable area1 and 7,,iii7 has a median value for owner-occupied homes that does not exceed the median value for owner-occupied homes in the applicable area1 7ii7 which-- 7,i7 is located in a city which has a population of not less than #ej1jjj and such city has a poverty rate that is not less than #aej percent of the poverty rate of the applicable area1 7,,ii7 has a median family income which does not exceed the median family income for the applicable area1 and 7,,iii7 has a median value for owner-occupied homes that does not exceed #hj percent of the median value for owner-occupied homes in the applicable area1 7iii7 which-- 7,i7 is located in a nonmetropolitan county1 7,,ii7 has a median family income which does not exceed the median family income for the applicable area1 and 7,,iii7 has been designated by a neighborhood homes credit agency under this clause1 7iv7 which is not otherwise a qualified census tract and is located in a disaster area 7as defined in section #gejh;,a7d77#c771 but only with respect to credits allocated in any period during which the ,president of the ,united ,states has determined that such area warrants individual or individual and public assistance by the ,federal ,government under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act1 or 7v7 which is not otherwise a qualified census tract and is identified by the neighborhood homes credit agency1 through methodologies detailed in the qualified allocation plan1 as having a shortage of affordable owner-occupied homes4 7,b7 ,applicable area ,the term applicable area means-- 7i7 in the case of a metropolitan census tract1 the metropolitan area in which such census tract is located1 and 7ii7 in the case of a census tract other than a census tract described in clause 7i71 the ,state4 7d7 ,affordable sale ,for purposes of this section-- 7#a7 ,in general ,the term affordable sale means a sale to a qualified homeowner of a qualified residence that the neighborhood homes credit agency certifies as meeting the standards promulgated under subsection 7f77#a77;,d7 for a price that does not exceed-- 7,a7 in the case of any qualified residence not described in subparagraph 7,b71 7,c71 or 7,d71 the amount equal to the product of #d multiplied by the median family income for the applicable area 7as determined pursuant to the most recent census data available as of the date of the contract for such sale71 7,b7 in the case of a house comprised of #b residential units1 #abe percent of the amount described in subparagraph 7,a71 7,c7 in the case of a house comprised of #c residential units1 #aej percent of the amount described in subparagraph 7,a71 or 7,d7 in the case of a house comprised of #d residential units1 #age percent of the amount described in subparagraph 7,a74 7#b7 ,qualified homeowner ,the term qualified homeowner means1 with respect to a qualified residence1 an individual-- 7,a7 who owns and uses such qualified residence as the principal residence of such individual1 and 7,b7 whose family income 7determined as of the date that a binding contract for the affordable sale of such residence is entered into7 is #adj percent or less of the median family income for the applicable area in which the qualified residence is located4 7e7 ,credit ceiling and allocations 7#a7 ,credit limited based on allocations to qualified projects 7,a7 ,in general ,the credit allowed under subsection 7a7 to any taxpayer for any taxable year with respect to one or more qualified residences which are part of the same qualified project shall not exceed the excess 7if any7 of-- 7i7 the amount allocated by the neighborhood homes credit agency under this paragraph to such taxpayer with respect to such qualified project1 over 7ii7 the aggregate amount of credit allowed under subsection 7a7 to such taxpayer with respect to qualified residences which are a part of such qualified project for all prior taxable years4 7,b7 ,deadline for completion ,no credit shall be allowed under subsection 7a7 with respect to any qualified residence unless the affordable sale of such residence is during the #e-year period beginning on the date of the allocation to the qualified project of which such residence is a part 7or1 in the case of a qualified residence to which subsection 7i7 applies1 the rehabilitation of such residence is completed during such #e-year period74 7#b7 ,limitations on allocations to qualified projects 7,a7 ,allocations limited by ,state neighborhood homes credit ceiling ,the aggregate amount allocated to taxpayers with respect to qualified projects by the neighborhood homes credit agency of any ,state for any calendar year shall not exceed the ,state neighborhood homes credit amount of such ,state for such calendar year4 7,b7 ,set-aside for certain projects involving qualified nonprofit organizations ,rules similar to the rules of section #db7;h77#e7 shall apply for purposes of this section4 7#c7 ,determination of ,state neighborhood homes credit ceiling 7,a7 ,in general ,the ,state neighborhood homes credit amount for a ,state for a calendar year is an amount equal to the sum of-- 7i7 the greater of-- 7,i7 the product of #i1 multiplied by the ,state population 7determined in accordance with section #adf7;j771 or 7,,ii7 #ab1jjj1jjj1 and 7ii7 any amount previously allocated to any taxpayer with respect to any qualified project by the neighborhood homes credit agency of such ,state which can no longer be allocated to any qualified residence because the #e-year period described in paragraph 7#a77;,b7 expires during calendar year4 7,b7 #c-year carryforward of unused limitation ,the ,state neighborhood homes credit amount for a ,state for a calendar year shall be increased by the excess 7if any7 of the ,state neighborhood homes credit amount for such ,state for the preceding calendar year over the aggregate amount allocated by the neighborhood homes credit agency of such ,state during such preceding calendar year4 ,any amount carried forward under the preceding sentence shall not be carried past the third calendar year after the calendar year in which such credit amount originally arose1 determined on a first-in1 first-out basis4 7f7 ,responsibilities of neighborhood homes credit agencies 7#a7 ,in general ,notwithstanding subsection 7e71 the ,state neighborhood homes credit dollar amount shall be zero for a calendar year unless the neighborhood homes credit agency of the ,state-- 7,a7 allocates such amount pursuant to a qualified allocation plan of the neighborhood homes credit agency1 7,b7 subject to paragraph 7#b71 allocates not more than #bj percent of amounts allocated in the previous year 7or for allocations made in the first allocation year under this section1 not more than #bj percent of the neighborhood homes credit ceiling for such year7 to projects with respect to qualified residences which-- 7i7 are located in census tracts described in subsection 7c77#b77;,a77iii71 7c77#b77;,a77iv71 7i77#e71 or 7ii7 are not located in a qualified census tract but meet the requirements of subsection 7i77#h71 7,c7 subject to paragraph 7#b71 in addition to any allocation described in subparagraph 7,b71 allocates not more than #bj percent of amounts allocated in the previous year 7or for allocations made in the first allocation year under this section1 not more than #bj percent of the neighborhood homes credit ceiling for such year7 to projects with respect to qualified residences which are located in any census tract described in subsection 7c77#b77;,a77v71 except that1 with respect to any qualified residence located within such census tract which is sold to a qualified homeowner1 subsection 7d77#b7 shall be applied by substituting #abj percent for #adj percent1 7,d7 promulgates standards with respect to reasonable qualified development costs and fees1 7,e7 promulgates standards with respect to construction quality which are consistent with building codes or other standards required by the ,state or local jurisdiction in which the project is located1 7,f7 in the case of any neighborhood homes credit agency which makes an allocation to a qualified project which includes any qualified residence to which subsection 7i7 applies1 promulgates standards with respect to protecting the owners of such residences1 including the capacity of such owners to pay rehabilitation costs not covered by the credit provided by this section and providing for the disclosure to such owners of their rights and responsibilities with respect to the rehabilitation of such residences1 7,g7 submits to the ,secretary 7at such time and in such manner as the ,secretary may prescribe7 an annual report specifying-- 7i7 the amount of the neighborhood homes credits allocated to each qualified project for the previous year1 7ii7 with respect to each qualified residence completed in the preceding calendar year-- 7,i7 the census tract in which such qualified residence is located1 7,,ii7 with respect to the qualified project that includes such qualified residence1 the year in which such project received an allocation under this section1 7,,iii7 whether such qualified residence was new1 substantially rehabilitated and sold to a qualified homeowner1 or substantially rehabilitated pursuant to subsection 7i71 7,,iv7 the eligible development costs of such qualified residence1 7,v7 the amount of the neighborhood homes credit with respect to such qualified residence1 7,,vi7 the sales price of such qualified residence1 if applicable1 and 7,,vii7 the family income of the qualified homeowner 7expressed as a percentage of the applicable area median family income for the location of the qualified residence71 and 7iii7 such other information as the ,secretary may require1 7,h7 makes available to the general public a written explanation for any allocation of a neighborhood homes credit dollar amount which is not made in accordance with established priorities and selection criteria of the neighborhood homes credit agency1 and 7,i7 provides educational outreach on application and compliance requirements1 including for small residential builders and remodelers4 7#b7 ,alternative for certain ,states 7,a7 ,in general ,in the case of any ,state which1 for a calendar year1 is an applicable ,state 7as defined in subparagraph 7,b771 in lieu of the requirements under subparagraphs 7,b7 and 7,c7 of paragraph 7#a71 the neighborhood homes credit agency of the ,state may elect to allocate not more than #dj percent of amounts allocated in the previous year 7or for allocations made in the first allocation year under this section1 not more than #dj percent of the neighborhood homes credit ceiling for such year7 to projects with respect to qualified residences which are described in either subparagraph 7,b7 or 7,c7 of paragraph 7#a74 7,b7 ,applicable ,state ,for purposes of this paragraph1 the term applicable ,state means a ,state which1 for purposes of the determining the amount under subsection 7e77#c77;,a77i7 for the calendar year with respect to such ,state1 received the amount described in subclause 7,,ii7 of such subsection4 7#c7 ,qualified allocation plan ,for purposes of this subsection1 the term qualified allocation plan means any plan which-- 7,a7 sets forth the selection criteria to be used to prioritize qualified projects for allocations of ,state neighborhood homes credit dollar amounts1 including-- 7i7 the need for new or substantially rehabilitated owner-occupied homes in the area addressed by the project1 7ii7 the expected contribution of the project to neighborhood stability and revitalization1 including the impact on neighborhood residents1 7iii7 the capability and prior performance of the project sponsor1 and 7iv7 the likelihood the project will result in long-term homeownership1 7,b7 has been made available for public comment1 7,c7 as determined by the neighborhood homes credit agency1 is likely to result in the selection of highly qualified applicants while also minimizing1 to the extent practicable1 application costs and barriers to entry for small residential builders and re-modelers1 and 7,d7 provides a procedure that the neighborhood homes credit agency 7or any agent or contractor of such agency7 shall follow for purposes of-- 7i7 identifying noncompliance with any provisions of this section1 and 7ii7 notifying the ,internal ,revenue ,service of any such noncompliance of which the agency becomes aware4 7g7 ,repayment 7#a7 ,in general 7,a7 ,sold during #e-year period ,if a qualified residence is sold during the #e-year period beginning immediately after the affordable sale of such qualified residence referred to in subsection 7a71 the seller shall transfer an amount equal to the repayment amount to the relevant neighborhood homes credit agency4 7,b7 ,use of repayments ,a neighborhood homes credit agency shall use any amount received pursuant to subparagraph 7,a7 only for purposes of qualified projects4 7#b7 ,repayment amount ,for purposes of paragraph 7#a77;,a7-- 7,a7 ,in general ,the repayment amount is an amount equal to the applicable percentage of the gain from the sale to which the repayment relates4 7,b7 ,applicable percentage ,for purposes of subparagraph 7,a71 the applicable percentage is #ej percent1 reduced by #aj percentage points for each year of the #e-year period referred to in paragraph 7#a77;,a7 which ends before the date of such sale4 7#c7 ,lien for repayment amount ,a neighborhood homes credit agency receiving an allocation under this section shall place a lien on each qualified residence that is built or rehabilitated as part of a qualified project for an amount such agency deems necessary to ensure potential repayment pursuant to paragraph 7#a77;,a74 7#d7 ,waiver 7,a7 ,in general ,the neighborhood homes credit agency may waive the repayment required under paragraph 7#a77;,a7 if the agency determines that making a repayment would constitute a hardship to the seller4 7,b7 ,hardship ,for purposes of subparagraph 7,a71 with respect to the seller1 a hardship may include-- 7i7 divorce1 7ii7 disability1 7iii7 illness1 or 7iv7 any other hardship identified by the neighborhood homes credit agency for purposes of this paragraph4 7h7 ,other definitions and special rules ,for purposes of this section-- 7#a7 ,neighborhood homes credit agency ,the term neighborhood homes credit agency means the agency designated by the governor of a ,state as the neighborhood homes credit agency of the ,state4 7#b7 ,qualified project ,the term qualified project means a project that a neighborhood homes credit agency certifies will build or substantially rehabilitate one or more qualified residences4 7#c7 ,determinations of family income ,rules similar to the rules of section #adc7;f77#b7 shall apply for purposes of this section4 7#d7 ,possessions treated as states ,the term ,state includes the ,district of ,columbia and the possessions of the ,united ,states4 7#e7 ,special rules related to condominiums and cooperative housing corporations 7,a7 ,determination of development costs ,in the case of a qualified residence described in clause 7ii7 or 7iii7 of subsection 7c77#a77;,a71 the reasonable development costs and eligible development costs of such qualified residence shall be an amount equal to such costs1 respectively1 of the entire condominium or cooperative housing property in which such qualified residence is located1 multiplied by a fraction-- 7i7 the numerator of which is the total floor space of such qualified residence1 and 7ii7 the denominator of which is the total floor space of all residences within such property4 7,b7 ,tenant-stockholders of cooperative housing corporations treated as owners ,in the case of a cooperative housing corporation 7as such term is defined in section #baf7;b771 a tenant-stockholder shall be treated as owning the house or apartment which such person is entitled to occupy4 7#f7 ,related party sales not treated as affordable sales 7,a7 ,in general ,a sale between related persons shall not be treated as an affordable sale4 7,b7 ,related persons ,for purposes of this paragraph1 a person 7in this subparagraph referred to as the related person7 is related to any person if the related person bears a relationship to such person specified in section #bfg7;b7 or #gjg7;b77#a71 or the related person and such person are engaged in trades or businesses under common control 7within the meaning of subsections 7a7 and 7b7 of section #eb74 ,for purposes of the preceding sentence1 in applying section #bfg7;b7 or #gjg7;b77#a71 #aj percent shall be substituted for #ej percent4 7#g7 ,inflation adjustment 7,a7 ,in general ,in the case of a calendar year after #bjbf1 the dollar amounts in subsections 7b77#c77;,a71 7e77#c77;,a77i77,i71 7e77#c77;,a77i77,,ii71 and 7i77#b77;,c7 shall each be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding 7i7 ,in the case of the dollar amounts in subsections 7b77#c77;,a7 and 7i77#b77;,c71 any increase under paragraph 7#a7 which is not a multiple of #a1jjj shall be rounded to the nearest multiple of #a1jjj4 7ii7 ,in the case of the dollar amount in subsection 7e77#c77;,a77i77,i71 any increase under paragraph 7#a7 which is not a multiple of #j4ja shall be rounded to the nearest multiple of #j4ja4 7iii7 ,in the case of the dollar amount in subsection 7e77#c77;,a77i77,,ii71 any increase under paragraph 7#a7 which is not a multiple of #ajj1jjj shall be rounded to the nearest multiple of #ajj1jjj4 7#h7 ,report 7,a7 ,in general ,the ,secretary shall annually issue a report1 to be made available to the public1 which contains the information submitted pursuant to subsection 7f77#a77;,g74 7,b7 ,de-identification ,the ,secretary shall ensure that any information made public pursuant to subparagraph 7,a7 excludes any information that would allow for the identification of qualified homeowners4 7#i7 ,list of qualified census tracts ,the ,secretary of ,housing and ,urban ,development shall1 for each year1 make publicly available a list of qualified census tracts under-- 7,a7 on a combined basis1 clauses 7i7 and 7ii7 of subsection 7c77#b77;,a71 7,b7 clause 7iii7 of such subsection1 and 7,c7 subsection 7i77#e77;,a74 7#aj7 ,denial of deductions if converted to rental housing ,if1 during the #e-year period beginning immediately after the affordable sale of a qualified residence referred to in subsection 7a71 an individual who owns a qualified residence 7whether or not such individual was the purchaser in such affordable sale7 fails to use such qualified residence as such individual's principal residence for any period of time1 no deduction shall be allowed for expenses paid or incurred by such individual with respect to renting1 during such period of time1 such qualified residence4 7i7 ,application of credit with respect to owner-,occupied rehabilitations 7#a7 ,in general ,in the case of a qualified rehabilitation by the taxpayer of any qualified residence which is owned 7as of the date that the written binding contract referred to in paragraph 7#c7 is entered into7 by a specified homeowner1 the rules of paragraphs 7#b7 through 7#g7 shall apply4 7#b7 ,alternative credit determination ,in the case of any qualified residence described in paragraph 7#a71 the neighborhood homes credit determined under subsection 7a7 with respect to such residence shall 7in lieu of any credit otherwise determined under subsection 7a7 with respect to such residence7 be allowed in the taxable year during which the qualified rehabilitation is completed 7as determined by the neighborhood homes credit agency7 and shall be equal to the least of-- 7,a7 the excess 7if any7 of-- 7i7 the amounts paid or incurred by the taxpayer for the qualified rehabilitation of the qualified residence to the extent that such amounts are certified by the neighborhood homes credit agency 7at the time of the completion of such rehabilitation7 as meeting the standards specified pursuant to subsection 7f77#a77;,d71 over 7ii7 any amounts paid to such taxpayer for such rehabilitation1 7,b7 #ej percent of the amounts described in subparagraph 7,a77i71 or 7,c7 #ej1jjj4 7#c7 ,qualified rehabilitation 7,a7 ,in general ,for purposes of this subsection1 the term qualified rehabilitation means a rehabilitation or reconstruction performed pursuant to a written binding contract between the taxpayer and the specified homeowner if the amount paid or incurred by the taxpayer in the performance of such rehabilitation or reconstruction exceeds the dollar amount in effect under subsection 7b77#c77;,a74 7,b7 ,application of limitation to expenses paid or incurred after allocation ,a rule similar to the rule of section 7b77#d7 shall apply for purposes of this subsection4 7#d7 ,specified homeowner ,for purposes of this subsection1 the term specified homeowner means1 with respect to a qualified residence1 an individual-- 7,a7 who owns and uses such qualified residence as the principal residence of such individual as of the date that the written binding contract referred to in paragraph 7#c7 is entered into1 and 7,b7 whose family income 7determined as of such date7 does not exceed the median family income for the applicable area 7with respect to the census tract in which the qualified residence is located74 7#e7 ,additional census tracts in which owner-occupied residences may be located ,in the case of any qualified residence described in paragraph 7#a71 the term qualified census tract includes any census tract which-- 7,a7 meets the requirements of subsection 7c77#b77;,a77i7 without regard to subclause 7,,iii7 thereof1 and 7,b7 is designated by the neighborhood homes credit agency for purposes of this paragraph4 7#f7 ,modification of repayment requirement ,in the case of any qualified residence described in paragraph 7#a71 subsection 7g7 shall be applied by beginning the #e-year period otherwise described therein on the date on which the qualified homeowner acquired such residence4 7#g7 ,related parties ,paragraph 7#a7 shall not apply if the taxpayer is the owner of the qualified residence described in paragraph 7#a7 or is related 7within the meaning of subsection 7h77#f77;,b77 to such owner4 7#h7 ,pyrrhotite remediation ,the requirement of subsection 7c77#a77;,d7 shall not apply to a qualified rehabilitation under this subsection of a qualified residence that is documented by an engineer's report and core testing to have a foundation that is adversely impacted by pyrrhotite or other iron sulfide minerals4 7j7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section1 including regulations that prevent avoidance of the rules1 and abuse of the purposes1 of this section4 4 7c7 ,credit allowed as part of general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf1 as amended by section #bab1 is amended by striking plus at the end of paragraph 7#da71 by striking the period at the end of paragraph 7#db7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#dc7 the neighborhood homes credit determined under section #db;,b7a74 4 7d7 ,credit allowed against alternative minimum tax ,section #ch7;c77#d77;,b7 of the ,internal ,revenue ,code of #aihf is amended by redesignating clauses 7iv7 through 7xii7 as clauses 7v7 through 7xiii71 respectively1 and by inserting after clause 7iii7 the following new clause3 7iv7 the credit determined under section #db;,b1 4 7e7 ,exclusion from gross income ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting before section #adj the following new section3 #aci,m4 ,state energy subsidies for qualified residences 7a7 ,exclusion from gross income ,gross income shall not include the value of any subsidy provided to a taxpayer 7whether directly or indirectly7 by any ,state energy office 7as defined in section #abd7;a7 of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #aehba7;a777 for purposes of any energy improvements made to a qualified residence 7as defined in section #db;,b7c77#a774 4 7f7 ,conforming amendments 7#a7 ,subsections 7i77#c77;,c71 7i77#f77;,b77i71 and 7k77#a7 of section #dfi of the ,internal ,revenue ,code of #aihf1 as amended by section #bab1 are each amended by striking or #db;,a and inserting 1 #db;,a1 or #db;,b4 7#b7 ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code1 as amended by section #bab1 is amended by inserting after the item relating to section #db;,a the following new item3 ,sec4 #db;,b4 ,neighborhood homes credit4 4 7#c7 ,the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by inserting before the item relating to section #adj the following new item3 ,sec4 #aci,m4 ,state energy subsidies for qualified residences4 4 7g7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbf4 #bad4 ,first-time homebuyer refundable credit 7a7 ,in general ,section #cf of the ,internal ,revenue ,code of #aihf is amended to read as follows3 #cf4 ,first-time homebuyer refundable credit 7a7 ,allowance of credit ,in the case of an individual who is a first-time homebuyer of a principal residence in the ,united ,states during a taxable year1 there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to #bj percent of the purchase price of the residence4 7b7 ,limitations2 special rules based on marital and filing status 7#a7 ,dollar limitation ,the credit allowed under subsection 7a7 shall not exceed #ae1jjj4 7#b7 ,limitation based on purchase price ,the amount allowable as a credit under subsection 7a7 7determined without regard to this paragraph and paragraph 7#c71 and after the application of paragraph 7#a77 for the taxable year shall be reduced 7but not below zero7 by the amount which bears the same ratio to the amount which is so allowable as-- 7,a7 the excess 7if any7 of-- 7i7 the purchase price of the residence1 over 7ii7 an amount equal to #fj percent of the conforming loan limit applicable to the residence1 bears to 7,b7 #ajj1jjj4 ,for purposes of the preceding sentence1 the term conforming loan limit with respect to any residence means the applicable limitation governing the maximum original principal obligation for a mortgage secured by a residence of the same type1 as determined and adjusted annually under section #cjb7;b77#b7 of the ,federal ,national ,mortgage ,association ,charter ,act and section #cje7;a77#b7 of the ,federal ,home ,loan ,mortgage ,corporation ,act4 7#c7 ,limitation based on modified adjusted gross income 7,a7 ,in general ,the amount allowable as a credit under subsection 7a7 7determined without regard to this paragraph and after the application of paragraphs 7#a7 and 7#b77 for the taxable year shall be reduced 7but not below zero7 by the amount which bears the same ratio to the amount which is so allowable as-- 7i7 the excess 7if any7 of-- 7,i7 the taxpayer's modified adjusted gross income for the applicable taxable year1 over 7,,ii7 the applicable threshold1 bears to 7ii7 #ej1jjj4 7,b7 ,modified adjusted gross income ,for purposes of subparagraph 7,a71 the term modified adjusted gross income with respect to any taxable year means the adjusted gross income of the taxpayer for such taxable year increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc for such taxable year4 7,c7 ,applicable threshold ,for purposes of subparagraph 7,a71 the applicable threshold is-- 7i7 except as provided in clause 7ii71 #ajj1jjj1 and 7ii7 an amount equal to #bjj percent of the amount in effect under clause 7i71 in the case of a head of household 7as defined in section #b7;b77 or a joint return4 7,d7 ,applicable taxable year ,for purposes of subparagraph 7,a71 the term applicable taxable year means-- 7i7 the taxable year with respect to which the credit allowable under subsection 7a7 is being claimed1 or 7ii7 for purposes of the application of subsection 7g77#c71 the most recent taxable year for which a return of tax has been filed by the taxpayer1 provided that such taxable year is either-- 7,i7 the taxable year preceding the taxable year described in clause 7i71 or 7,,ii7 the taxable year preceding the taxable year described in subclause 7,i74 7#d7 ,additional limitations ,no credit shall be allowed under subsection 7a7 with respect to the purchase of any residence for a taxable year-- 7,a7 if the taxpayer is a nonresident alien1 or 7,b7 if-- 7i7 the taxpayer has not attained age #ah as of the date of such purchase1 or 7ii7 a deduction under section #aea with respect to the taxpayer is allowable to another taxpayer for the taxable year4 ,in the case of a taxpayer who is married1 the taxpayer shall be treated as meeting the age requirement of subparagraph 7,b77i7 if the taxpayer or the taxpayer's spouse meets such age requirement4 7#e7 ,multiple purchasers ,if #b or more individuals who are not married purchase a principal residence-- 7,a7 the amount of the credit under subsection 7a7 shall be allocated among such individuals in such manner as the ,secretary may prescribe by taking into account the requirements of paragraphs 7#b7 and 7#c71 7,b7 for purposes of subparagraph 7,a71 with respect to the requirements of paragraph 7#c7-- 7i7 such paragraph shall be applied by aggregating the modified adjusted gross income of all such individuals1 and 7ii7 the applicable threshold shall be the amount described in subparagraph 7,c77ii7 of such paragraph1 7,c7 the total amount of the credits allowed to all such individuals shall not exceed the limitation under paragraph 7#a7 7as modified by paragraph 7#g771 and 7,d7 with respect to each such individual1 no credit shall be allowed under subsection 7a7 unless such individual includes the taxpayer identification numbers for all such individuals on their return of tax for the taxable year4 7#f7 ,married couples must file joint return ,if an individual is married at the close of the taxable year1 the credit shall be allowed under subsection 7a7 only if the individual and the individual's spouse file a joint return for the taxable year4 7#g7 ,adjustment for inflation ,in the case of any taxable year beginning after ,december #ca1 #bjbg1 each of the dollar amounts in paragraphs 7#a7 and 7#c77;,c77i7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbf for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the next lowest multiple of #ej4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,first-time homebuyer 7,a7 ,in general ,the term first-time homebuyer means any individual who acquires a principal residence located in the ,united ,states by purchase if such individual 7and1 if married1 such individual's spouse7-- 7i7 has not claimed any credit or deduction under this title for any previous taxable year with respect to the purchase or ownership of any residence or residential real estate 7including for any expenditures relating to the placing in service of any property on1 in connection with1 or for use in such a residence or real estate71 and 7ii7 attests under penalty of perjury that-- 7,i7 the individual 7and1 if married1 the individual's spouse7 has not owned a principal residence at any time prior to the purchase of the principal residence to which this section applies1 and 7,,ii7 the principal residence to which this section applies was not acquired from a person related to such individual or spouse4 7,b7 ,waiver in case of certain changes in status ,the ,secretary may1 in such manner as the ,secretary may prescribe1 waive the requirements of subparagraph 7,a7 for a taxable year in the case of an individual who is not eligible to file a joint return for the taxable year1 and who was married at the time the individual or the individual's former spouse purchased a previous residence4 7,c7 ,multiple purchasers ,if #b or more individuals who are not married purchase a principal residence1 no credit shall be allowed under subsection 7a7 unless each individual satisfies the requirements under subparagraph 7,a74 7#b7 ,principal residence ,the term principal residence has the same meaning as when used in section #aba4 7#c7 ,purchase 7,a7 ,in general ,the term purchase means any acquisition1 but only if-- 7i7 the property is not acquired from a person related to the person acquiring such property 7or1 if either such person is married1 such individual's spouse71 and 7ii7 the basis of the property in the hands of the person acquiring such property is not determined-- 7,i7 in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired1 or 7,,ii7 under section #ajad7;a74 7,b7 ,construction ,a residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence4 7#d7 ,purchase price ,the term purchase price means the adjusted basis 7without regard to any reduction under section #ajaf7;a77#ci77 of the principal residence on the date such residence is purchased4 7#e7 ,related persons ,a person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section #bfg or #gjg7;b7 7but1 in applying subsections 7b7 and 7c7 of section #bfg for purposes of this section1 paragraph 7#d7 of section #bfg7;c7 shall be treated as providing that the family of an individual shall include only the individual's spouse1 ancestors1 lineal descendants1 and spouse's ancestors and lineal descendants74 7#f7 ,marital status ,an individual's marital status shall be determined in accordance with section #ggjc4 7d7 ,denial and recapture rules in case of disposal of residence within #f taxable years 7#a7 ,denial of credit in case of disposal within taxable year 7,a7 ,in general ,no credit under subsection 7a7 shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if the taxpayer disposes of their interest in such residence 7or such residence ceases to be the principal residence of the taxpayer 7and1 if married1 the taxpayer's spouse77 before the close of such taxable year4 7,b7 ,recapture in cases of credit transfer ,in the case of a taxpayer which-- 7i7 has made an election under subsection 7g77#a71 and 7ii7 disposes of their interest in such residence 7or such residence ceases to be the principal residence of the taxpayer 7and1 if married1 the taxpayer's spouse77 before the close of the taxable year described in subparagraph 7,a71 the tax imposed by this chapter for the taxable year in which such disposal 7or cessation7 occurs shall be increased by an amount equal to #ajj percent of the amount of the credit allowed under subsection 7a74 7#b7 ,phased-out recapture 7,a7 ,in general ,except as provided in subparagraph 7,d71 if the taxpayer disposes of their interest in a residence with respect to which a credit was allowed under subsection 7a7 7or such residence ceases to be the principal residence of the taxpayer 7and1 if married1 the taxpayer's spouse77 during the #e-taxable-year period beginning with the taxable year immediately following the credit year1 the tax imposed by this chapter for the taxable year in which such disposal 7or cessation7 occurs shall be increased by an amount equal to the recapture percentage of the amount of the credit so allowed4 7,b7 ,credit year ,for purposes of subparagraph 7,a71 the term credit year means the taxable year in which the credit under subsection 7a7 was allowed4 7,c7 ,recapture percentage ,for purposes of subparagraph 7,a71 the recapture percentage with respect to any disposal or cessation described in such subparagraph shall be determined in accordance with the following table3 ,if the disposal or,the recapturecessation occurs in3percentage is3,the #ast taxable year beginning after the credit year#ajj percent,the #bnd taxable year beginning after the credit year#hj percent,the #crd taxable year beginning after the credit year#fj percent,the #dth taxable year beginning after the credit year#dj percent,the #eth taxable year beginning after the credit year#bj percent4 7,d7 ,exceptions ,this paragraph shall not apply in the case of a disposal or cessation described in subparagraph 7,a7 which occurs after or incident to any of the following3 7i7 ,death of the taxpayer or the taxpayer's spouse4 7ii7 ,divorce or separation of the taxpayer4 7iii7 ,involuntary conversion of the residence 7within the meaning of section #aba7;d77#e77;,a774 7iv7 ,relocation of duty station or qualified official extended duty 7as defined in section #aba7;d77#i77;,c77 of the taxpayer or the taxpayer's spouse who is a member of the uniformed services 7as defined in section #aba7;d77#i77;,c77ii771 a member of the ,foreign ,service of the ,united ,states 7as defined in section #aba7;d77#i77;,c77iii771 or an employee of the intelligence community 7as defined in section #aba7;d77#i77;,c77iv774 7v7 ,change of employment of the taxpayer or the taxpayer's spouse which meets the conditions of section #bag7;c74 7vi7 ,change in the number of people residing in the residence of the taxpayer1 including the addition of a child4 7vii7 ,loss of employment1 health conditions1 caregiving needs1 or such other unforeseen circumstances as may be specified by the ,secretary4 7e7 ,adjustment to basis ,for purposes of this subtitle1 if a credit is allowed under this section with respect to any property1 the taxpayer's basis in such property shall be reduced by the amount of the credit so allowed4 7f7 ,reporting 7#a7 ,in general ,a credit shall be allowed under this section only if the following are included on the return of tax3 7,a7 ,the individual's social security number issued by the ,social ,security ,administration4 7,b7 ,the street address 7not including a post office box7 of the principal residence purchased4 7,c7 ,the purchase price of the principal residence4 7,d7 ,the date of purchase of the principal residence4 7,e7 ,the closing disclosure relating to the purchase 7in the case of a purchase financed by a mortgage74 7#b7 ,reporting of real estate transactions ,if the ,secretary requires information reporting under section #fjde by a person described in subsection 7e77#b7 thereof to verify the eligibility of taxpayers for the credit allowable by this section1 the exception provided by section #fjde7;e77#e7 shall not apply4 7g7 ,transfer of credit 7#a7 ,in general ,subject to such regulations or other guidance as the ,secretary determines necessary1 if the taxpayer who acquires a principal residence by purchase using a qualified residential mortgage loan elects the application of this subsection with respect to such residence1 #ajj percent of the credit which would 7but for this subsection7 be allowed to such taxpayer with respect to such residence shall1 at the time of purchase of such residence1 be allowed to the eligible entity specified in such election 7and not to such taxpayer7 in the manner described in paragraph 7#b77;,a77ii77,,iii74 7#b7 ,definitions ,in this subsection-- 7,a7 ,eligible entity 7i7 ,in general ,the term eligible entity means1 with respect to the residence for which the credit is allowed under subsection 7a71 the entity which originated the qualified residential mortgage loan used to purchase such residence and-- 7,i7 has registered with the ,secretary for purposes of this subparagraph1 at such time1 and in such form and manner1 as the ,secretary may prescribe1 7,,ii7 employs registered loan originators or state-licensed loan originators1 7,,iii7 prior to the election described in paragraph 7#a7 and not later than the closing date for such purchase1 disclosed to the taxpayer purchasing such residence-- 7aa7 the amount of the credit that would otherwise be allowable to the taxpayer under subsection 7a71 7bb7 pursuant to the election under paragraph 7#a71 the amount of the credit allowed to such entity1 7cc7 the terms of the qualified residential mortgage loan1 which shall take into account the payment made by such entity pursuant to subclause 7,v71 7,,iv7 prior to the closing date for such purchase and in such manner as the ,secretary may prescribe1 verified-- 7aa7 the eligibility of the taxpayer for the credit under subsection 7a71 and 7bb7 the amount of such credit to which the election under paragraph 7#a7 is applicable1 7,v7 on the closing date for the purchase of the residence1 reduces the down payment otherwise required to be made by the taxpayer by making payment to the person selling such residence to the taxpayer in an amount equal to the amount of the credit allowable to the taxpayer under subsection 7a7 to which the election under paragraph 7#a7 applies1 and 7,,vi7 has not provided any terms or conditions 7such as higher fees1 closing costs1 interest rates1 or other incentives7 with respect to the qualified residential mortgage loan to which an election under paragraph 7#a7 applies which are less favorable than the terms and conditions for residential mortgage loans that would otherwise be provided to the taxpayer if an election described in such paragraph was not made by the taxpayer4 7ii7 ,special rules 7,i7 ,timing2 revocation ,rules similar to the rules under paragraphs 7#c7 and 7#d7 of section #cj;,d7g7 shall apply for purposes of this subparagraph4 7,,ii7 ,tax treatment of payments ,with respect to any payment described in clause 7i77,v71 such payment-- 7aa7 shall not be includible in the gross income of the taxpayer1 and 7bb7 with respect to the eligible entity1 shall not be deductible under this title4 7,,iii7 ,advance payment to eligible entities 7aa7 ,in general ,the ,secretary shall establish a program to make advance payments to any eligible entity in an amount equal to the cumulative amount of the credits allowed to such entity pursuant to an election under paragraph 7#a74 7bb7 ,excessive payments2 treatment of advance payments ,rules similar to the rules under subparagraphs 7,b7 and 7,c7 of section #cj;,d7g77#g7 shall apply for purposes of this subclause4 7,,iv7 ,recapture ,in the case of any taxpayer who has made an election described in paragraph 7#a7 with respect to the purchase of a principal residence and for which a payment described in clause 7i77,v7 was made by an eligible entity1 if the credit under subsection 7a7 is subsequently determined to not be allowable to such taxpayer with respect to such purchase1 the tax imposed on such taxpayer under this chapter for the taxable year in which such residence was purchased shall be increased by the amount of the payment described in clause 7i77,v74 7,b7 ,qualified residential mortgage loan ,the term qualified residential mortgage loan means a residential mortgage loan 7as defined in section #aejc of the ,s4,a4,f4,e4 ,mortgage ,licensing ,act of #bjjh 7#ab ,u4,s4,c4 #eajb77 which-- 7i7 does not exceed the conforming loan limit 7as defined in subsection 7b77#b771 7ii7 was originated by a registered loan originator or ,state-licensed loan originator 7as defined in section #aejc of the ,s4,a4,f4,e4 ,mortgage ,licensing ,act of #bjjh 7#ab ,u4,s4,c4 #eajb77 who is not1 with respect to the taxpayer-- 7,i7 a person specified in section #bfg7;b71 or 7,,ii7 a partnership described in section #gjg7;b71 and 7iii7 does not require a down payment in an amount which is greater than the amount equal to-- 7,i7 #bj percent of the purchase price of the residence1 minus 7,,ii7 the amount of the credit allowable to the taxpayer under subsection 7a7 to which the election under paragraph 7#a7 applies4 7#c7 ,application of limitation based on modified adjusted gross income 7,a7 ,in general 7i7 ,prior taxable year ,for purposes of this subsection1 any reduction in the amount allowable as a credit under subsection 7a7 pursuant to subsection 7b77#c7 shall be determined based on the modified adjusted gross income of the taxpayer for the taxable year described in subparagraph 7,d77ii7 of such subsection4 7ii7 ,individuals who were not married in prior taxable year ,for purposes of clause 7i71 in the case of two individuals who are married during the taxable year in which the residence is purchased but were not married with respect to the taxable year described in such clause1 rules similar to the rules under subsection 7b77#e77;,b7 shall apply4 7,b7 ,lower income in taxable year in which residence is purchased 7i7 ,in general ,if-- 7,i7 the taxpayer has made an election under paragraph 7#a71 7,,ii7 a reduction described in subparagraph 7,a7 is applicable with respect to the amount allowable as a credit under subsection 7a71 and 7,,iii7 the modified adjusted gross income of the taxpayer for the taxable year described in clause 7i7 of subsection 7b77#c77;,d7 is less than the modified adjusted gross income of the taxpayer for the taxable year described in clause 7ii7 of such section1 notwithstanding the application of paragraph 7#a71 there shall be a credit allowed to the taxpayer against the tax imposed by this subtitle for the taxable year described in clause 7i7 of such subsection equal to the amount described in clause 7ii74 7ii7 ,difference in credit amounts ,the amount described in this clause is equal to-- 7,i7 the amount allowable as a credit under subsection 7a71 as reduced pursuant to subsection 7b77#c7 based on the modified adjusted gross income of the taxpayer for the taxable year described in clause 7i7 of subsection 7b77#c77;,d71 minus 7,,ii7 the amount of the payment made by the eligible entity pursuant to paragraph 7#b77;,a77i77,v74 7#d7 ,reporting 7,a7 ,in general ,in the case of a taxpayer that has made an election under paragraph 7#a71 not later than #c days after the closing date for the purchase of the residence1 the eligible entity shall report to the ,secretary 7in such manner as the ,secretary may prescribe7 the following3 7i7 ,the name and taxpayer identification number of the taxpayer4 7ii7 ,the amount of the credit allowed under subsection 7a7 to which the election under paragraph 7#a7 applied4 7,b7 ,information provided to taxpayer ,at such time1 and in such form and manner1 as the ,secretary may prescribe1 the eligible entity shall provide the information described in subparagraph 7,a7 to the taxpayer4 7#e7 ,online portal ,the ,secretary shall establish an online portal which permits-- 7,a7 a taxpayer to-- 7i7 determine the amount of the credit allowable under subsection 7a7 and the amount of such credit to which paragraph 7#a7 may apply1 and 7ii7 elect the application of this subsection with respect to the purchase of a residence1 and 7,b7 an eligible entity to-- 7i7 verify the amount of the credit allowable under subsection 7a7 with respect to the taxpayer and the amount of such credit to which paragraph 7#a7 may apply1 and 7ii7 comply with the requirements under paragraph 7#d74 7h7 ,regulations and guidance ,the ,secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including rules for the application of subsection 7d7 in the case of a residence purchased by #b or more individuals who are not married4 4 7b7 ,conforming amendment relating to basis adjustment ,subsection 7a7 of section #ajaf of the ,internal ,revenue ,code of #aihf1 as amended by section #bab1 is amended-- 7#a7 by redesignating paragraphs 7#ch7 and 7#ci7 as paragraphs 7#ci7 and 7#dj71 respectively1 and 7#b7 by inserting after paragraph 7#cg7 the following new paragraph3 7#ch7 to the extent provided in section #cf7;e71 4 7c7 ,conforming amendment ,section #bf7;b77#b7 of the ,internal ,revenue ,code of #aihf is amended by striking subparagraph 7,w7 and by redesignating subparagraphs 7,x71 7,y71 and 7,z7 as subparagraphs 7,w71 7,x71 and 7,y71 respectively4 7d7 ,clerical amendment ,the item relating to section #cf in the table of sections for subpart ,c of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended to read as follows3 ,sec4 #cf4 ,first-time homebuyer refundable credit4 4 7e7 ,authority ,to treat claim of credit as error1 etc ,subparagraph 7,n7 of section #fbac7;g77#b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7,n7 in the case of a return claiming the credit under section #cf-- 7i7 the omission of a social security number required under section #cf7;f77#a77;,a71 7ii7 the inclusion of a social security number so required if-- 7,i7 the claim of the credit on the return reflects the treatment of such individual as being of an age different from the individual's age based on such social security number1 or 7,,ii7 except as provided in section #cf7;c77#a77;,b71 such social security number has been included 7other than as a dependent for purposes of section #aea7 on a return for any previous taxable year claiming any credit or deduction described in section #cf7;c77#a77;,a77i71 7iii7 the omission of any other required information or documentation described in section #cf7;f77#a71 including the inclusion of a post office box instead of a street address for the purchased residence1 7iv7 the inclusion of any information or documentation described in clause 7iii7 if such information or documentation does not support a valid claim for the credit1 or 7v7 a claim of such credit for a taxable year with respect to the purchase of a residence made after the last day of such taxable year1 4 7f7 ,,irs recordkeeping ,notwithstanding the limitations on assessment and collection under section #feja of the ,internal ,revenue ,code of #aihf1 the ,commissioner of ,internal ,revenue shall maintain records of returns and return information 7as defined in section #fajc7;b77#b7 of such ,code7 of any taxpayer claiming the credit under section #cf of such ,code 7as amended by this section7 for the taxable year in which such credit is claimed and succeeding taxable years in the individual master files of the ,internal ,revenue ,service4 7g7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbf4 #bae4 ,losses from the sale of principal residences 7a7 ,allowance of loss 7#a7 ,in general ,section #afe7;c7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of paragraph 7#b71 by striking the period at the end of paragraph 7#c7 and inserting 2 and1 and by adding at the end the following new paragraph3 7#d7 any-- 7,a7 qualified principal residence loss1 and 7,b7 any qualified principal residence loss carryforward 7as determined under section #abab7;b77#c774 4 7#b7 ,definitions and limitations ,section #afe of such ,code is amended by redesignating subsection 7m7 as subsection 7n7 and by inserting after subsection 7l7 the following new subsection3 7m7 ,rules related to qualified principal residence losses 7#a7 ,qualified principal residence loss ,for purposes of subsection 7c77#d7-- 7,a7 ,in general ,the term qualified principal residence loss means any loss from the sale or exchange of a residence of the taxpayer located in the ,united ,states if1 during the #e-year period ending on the date such residence is sold or exchanged1 such property has been owned and used by the taxpayer as the taxpayer's principal residence 7within the meaning of section #aba7 for periods aggregating #b years or more4 7,b7 ,application to only #a sale or exchange every #b years ,rules similar to the rules of section #aba7;b77#c7 shall apply for purposes of this paragraph4 7,c7 ,exclusion of loss allocated to nonqualified use 7i7 ,in general ,paragraph 7#a7 shall not apply to so much of the loss from the sale or exchange of property as is allocated to periods of nonqualified use 7as defined in section #aba7;b77#e77;,c774 7ii7 ,allocation rules ,for purposes of this clause1 loss shall be attributable to periods of nonqualified use under the principles of section #aba7;b77#e77;,b74 7,d7 ,taxpayers failing to meet certain requirements ,rules similar to the rules of section #aba7;c7 shall apply for purposes of this paragraph 7determined by substituting section #afe7m77#b7 for paragraph 7#a7 or 7#b7 of subsection 7b71 whichever is applicable in paragraph 7#a7 thereof74 7,e7 ,special rules 7i7 ,in general ,rules similar to the rules of paragraphs 7#a71 7#b71 7#c71 7#d71 7#e7 7applied without regard to the phrase destruction1 theft in subparagraph 7,a7 thereof71 7#g71 7#h71 7#i71 7#aj71 and 7#ab7 of section #aba7;d7 shall apply for purposes of this paragraph4 7,f7 ,expatriates ,rules similar to the rules of subsection 7e7 of section #aba shall apply for purposes of this paragraph4 7#b7 ,dollar limitation ,the amount of any qualified principal residence loss shall not exceed #ajj1jjj 7#ej1jjj in the case of a married individual filing a separate return74 7#c7 ,income limitation 7,a7 ,in general ,the amount of qualified principal residence loss 7determined after application of paragraph 7#b7 and without regard to this paragraph7 shall be reduced 7but not below zero7 by the amount which bears the same ratio to such loss 7as so determined7 as-- 7i7 the excess of-- 7,i7 the taxpayer's modified adjusted gross income for such taxable year1 over 7,,ii7 #bjj1jjj 7#ej percent of such amount in the case of a married individual filing a separate return71 bears to 7ii7 #ej1jjj 7#ej percent of such amount in the case of a married individual filing a separate return74 7,b7 ,modified adjusted gross income ,for purposes of this paragraph1 the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year determined without regard to subsection 7c77#d7 and increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc4 4 7#c7 ,coordination with exclusion for gain 7,a7 ,in general ,section #aba7;b77#c7 of such ,code is amended by inserting or section #afe7;c77#d7 after subsection 7a74 7,b7 ,conforming amendment ,section #aba7;c77#a77;,b77i77,,ii7 of such ,code is amended by inserting or section #afe7;c77#d7 after subsection 7a74 7#d7 ,application of rules limiting losses 7,a7 ,in general ,section #abaa of such ,code is amended by adding at the end the following new subsection3 7c7 ,special rules for taxpayers with qualified principal residence loss 7#a7 ,in general ,in the case of a taxpayer 7other than a corporation7 which has a qualified principal residence loss for any taxable year-- 7,a7 this subsection shall be applied before subsection 7b71 and 7,b7 such loss shall be allowed only to the extent of the sum of-- 7i7 gains from sales or exchanges of capital assets during such taxable year1 plus 7ii7 if such loss exceeds such gains1 the amount of such excess4 7#b7 ,coordination with subsection 7b7 ,in applying subsection 7b7 to any taxable year to which this subsection applies-- 7,a7 qualified principal residence losses shall not be taken into account1 and 7,b7 gains from sales or exchanges of capital assets during such taxable year taken into account under such subsection shall be reduced by the amount of such gains taken into account under paragraph 7#a77;,b77i74 7#c7 ,qualified principal residence loss ,for purposes of this paragraph1 the term qualified principal residence loss means1 with respect to any taxable year1 any loss allowed for such taxable year by reason of section #afe7;c77#d7 7including any qualified principal residence loss carryforward taken into account for such taxable year under subparagraph 7,b7 thereof74 4 7,b7 ,carryforwards ,section #abab7;b7 of such ,code is amended is amended by adding at the end the following new paragraph3 7#c7 ,special rule for qualified principal residence losses 7,a7 ,in general ,for purposes of section #afe7;c77#d77;,b71 the amount of qualified principal residence loss carryforward determined under this paragraph is the excess 7if any7 of-- 7i7 the excess determined under section #abaa7;c77#a77;,b77ii7 for the taxable year1 over 7ii7 taxable income 7computed without regard to any loss allowed with respect to such excess or any amount or deduction described in paragraph 7#b77;,b774 7,b7 ,coordination with other capital losses ,for purposes of this subsection-- 7i7 a qualified principal residence loss 7as defined in section #abaa7;c77#c77 shall not be taken into account for purposes of paragraph 7#a7 or 7#b71 and 7ii7 taxable income for purposes of paragraph 7#b77;,b7 shall be computed after the allowance for any qualified personal residence loss 7as so defined74 4 7b7 ,effective date ,the amendments made by this section shall apply to sales in taxable years beginning after the date of the enactment of this ,act4 #baf4 ,repeal of limitation on personal casualty loss deduction 7a7 ,in general ,section #afe7;h7 of the ,internal ,revenue ,code of #aihf is amended by striking paragraph 7#e74 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #bag4 ,permanent exclusion from gross income of discharge of qualified principal residence indebtedness 7a7 ,in general ,section #ajh7;a77#a77;,e7 of the ,internal ,revenue ,code of #aihf is amended by striking which is discharged and all that follows through evidenced in writing before ,january #a1 #bjbf4 7b7 ,effective date ,the amendment made by this section shall apply to discharges of indebtedness after ,december #ca1 #bjbe4