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(1) Authority and use of grant amounts
The Secretary may make grants under this subsection to smaller communities. Such grant amounts shall be used by smaller communities only to provide assistance to carry out eligible affordable housing activities under paragraph (4) in connection with an eligible project under paragraph (2).
For purposes of this subsection, the term “eligible project” means a project that—
(A) the Secretary determines, under the criteria established pursuant to paragraph (3), is a main street project;
(B) is carried out within the jurisdiction of a smaller community receiving the grant; and
(C) involves the development of affordable housing that is located in the commercial area that is the subject of the project.
The Secretary shall establish requirements for a project to be considered a main street project for purposes of this section, which shall require that the project—
(A) has as its purpose the revitalization or redevelopment of a historic or traditional commercial area;
(B) involves investment, or other participation, by the government for, and private entities in, the community in which the project is carried out; and
(C) complies with such historic preservation guidelines or principles as the Secretary shall identify to preserve significant historic or traditional architectural and design features in the structures or area involved in the project.
For purposes of this subsection, the activities described in subsection (d)(1) shall be considered eligible affordable housing activities, except that—
(A) such activities shall be conducted with respect to affordable housing rather than with respect to severely distressed public housing projects; and
(B) eligible affordable housing activities under this subsection shall not include the activities described in subparagraphs (B) through (E), (J), or (K) of subsection (d)(1).
A grant under this subsection for a fiscal year for a single smaller community may not exceed $1,000,000.
A smaller community applying for a grant under this subsection shall be considered an applicant for purposes of subsection (c) (relating to contributions by applicants), except that—
(A) such supplemental amounts shall be used only for carrying out eligible affordable housing activities; and
(B) paragraphs (1)(B) and (3) shall not apply to grants under this subsection.
(A) Application Pursuant to subsection (e)(1), the Secretary shall provide for smaller communities to apply for grants under this subsection, except that the Secretary may establish such separate or additional criteria for applications for such grants as may be appropriate to carry out this subsection.
(B) Selection criteria The Secretary shall establish selection criteria for the award of grants under this subsection, which shall be based on the selection criteria established pursuant to subsection (e)(2), with such changes as may be appropriate to carry out the purposes of this subsection.
The cost limits established pursuant to subsection (f) shall apply to eligible affordable housing activities assisted with grant amounts under this subsection.
The provisions of subsections (g) (relating to disposition and replacement of severely distressed public housing), and (h) (relating to administration of grants by other entities), shall not apply to grants under this subsection.
The Secretary shall require each smaller community receiving a grant under this subsection to submit a report regarding the use of all amounts provided under the grant.
For purposes of this subsection, the following definitions shall apply:
(A) Affordable housing The term “affordable housing” means rental or homeownership dwelling units that— (i) are made available for initial occupancy to low-income families, with a subset of units made available to very- and extremely-low income families; and (ii) are subject to the same rules regarding occupant contribution toward rent or purchase and terms of rental or purchase as dwelling units in public housing projects assisted with a grant under this section.
(B) Smaller community The term “smaller community” means a unit of general local government (as such term is defined in section 5302 of this title ) that— (i) has a population of 50,000 or fewer; and (ii) (I) is not served by a public housing agency; or (II) is served by a single public housing agency, which agency administers 100 or fewer public housing dwelling units.