40 U.S.C. § 14503 — Assistance for proposed low- and middle-income housing projects

(a) Appalachian Housing Fund.
(1) Establishment. An Appalachian Housing Fund exists.
(2) Source and use of amounts in fund. Money allocated to the Secretary of Housing and Urban Development for this section must be deposited in the Fund. The Secretary must use the Fund as a "revolving fund" to carry out this section. This section does not define "revolving fund." Money in the Fund that is not needed for current operations may be invested in bonds or other obligations for which the Federal Government guarantees payment of principal and interest. General administrative expenses for this section may be paid from the Fund.

(b) Purpose. To encourage and help make possible the construction or rehabilitation of housing for low- and moderate-income families and individuals, the Secretary may make grants and loans from the Fund under terms and conditions the Secretary may set. The Secretary may make these grants and loans to nonprofit organizations, limited dividend organizations, cooperative organizations, and public bodies. They are for planning and obtaining federally insured mortgage financing or other financial assistance for housing construction or rehabilitation projects for low- and moderate-income families and individuals. The projects may be anywhere in the Appalachian region that the Appalachian Regional Commission establishes. The assistance may be provided under: (1) section 221 of the National Housing Act (12 U.S.C. 1715l); (2) section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f); (3) section 515 of the Housing Act of 1949 (42 U.S.C. 1485); or (4) any other law with a similar purpose that the Secretary, another department, agency, or instrumentality of the Federal Government, or a State government administers. This section does not define "nonprofit," "limited dividend," "public body," or "similar purpose."

(c) Providing Amounts to States for Grants and Loans. The Secretary or the Commission may provide money to the States. The States may then make grants and loans to nonprofit, limited dividend, or cooperative organizations and public bodies for the same purposes for which the Secretary may provide money under this section. This section does not define "nonprofit," "limited dividend," or "public body."

(d) Loans.
(1) Limitation on available amounts. A loan under subsection (b) may pay for the cost of planning and obtaining financing for a project described in subsection (b). This includes preliminary surveys and analyses of market needs, preliminary site engineering and architectural fees, site options, application and mortgage commitment fees, legal fees, and construction loan fees and discounts. The loan may cover up to: (A) 50 percent of that cost; (B) 80 percent of that cost if the project will be carried out in a county with a "distressed county designation" in effect under section 14526; or (C) 70 percent of that cost if the project will be carried out for a county with an "at-risk county designation" in effect under section 14526. This section does not define "distressed county designation" or "at-risk county designation.
(2) Interest. A loan must be made without interest. But a loan to an organization established for profit must bear interest at the prevailing market rate authorized for an insured or guaranteed loan for that type of project. This section does not define "prevailing market rate."
(3) Payment. The Secretary must require repayment of a loan made under this section under terms and conditions the Secretary may require, no later than when the project is completed. For a loan to an organization established for profit, the Secretary may not use the cancellation rule in this sentence. For any other loan, the Secretary may cancel part of the loan after determining that a permanent loan to finance the project cannot be obtained in an amount sufficient to repay the loan made under this section.

(e) Grants.
(1) In general. A grant under this section may pay expenses incidental to planning and obtaining financing for a project under this section if the Secretary considers those expenses unrecoverable from the proceeds of a permanent loan used to finance the project. The grant: (A) may not be made to an organization established for profit; and (B) except as provided in paragraph (2), may not exceed: (i) 50 percent of those expenses; (ii) 80 percent of those expenses if the project will be carried out in a county with a "distressed county designation" in effect under section 14526; or (iii) 70 percent of those expenses if the project will be carried out for a county with an "at-risk county designation" in effect under section 14526. This section does not define "incidental" or "unrecoverable.
(2) Site development costs and offsite improvements. The Secretary may make grants and commitments for grants, and may advance money under terms and conditions the Secretary may require, to nonprofit, limited dividend, or cooperative organizations and public bodies. The money may pay reasonable site development costs and necessary offsite improvements, such as extensions of sewer and water lines. The grant, commitment, or advance must be essential to the economic feasibility of a housing construction or rehabilitation project for low- and moderate-income families and individuals that otherwise meets the requirements for assistance under this section. This section does not define "reasonable," "necessary," "essential," "economic feasibility," or "otherwise meets the requirements." A grant under this paragraph: (A) for construction of housing may not be more than 10 percent of the cost of the project; and (B) for rehabilitation of housing may not be more than 10 percent of the reasonable value of the rehabilitation housing, as determined by the Secretary. This section does not define "reasonable value" or "rehabilitation housing."

(f) Information, Advice, and Technical Assistance. The Secretary or the Commission may provide, or may contract with public or private organizations to provide, information, advice, and technical assistance about the construction, rehabilitation, and operation by nonprofit organizations of housing for low- or moderate-income families in areas of the region that the Commission establishes. This section does not define "technical assistance."

(g) Application of Certain Provisions. Programs and projects assisted under this section are subject to the provisions cited in section 14701 of this title, to the extent that the laws authorizing assistance for low- and moderate-income housing provide that those provisions apply.