((a)) ** Establishment** The Secretary of Housing and Urban Development shall establish and carry out a rural housing stability grant program. In carrying out the program, the Secretary may award grants to eligible organizations in lieu of grants under part C in order to pay for the Federal share of the cost of—

((1)) rehousing or improving the housing situations of individuals and families who are homeless or in the worst housing situations in the geographic area;

((2)) stabilizing the housing of individuals and families who are in imminent danger of losing housing; and

((3)) improving the ability of the lowest-income residents of the community to afford stable housing.

((b)) ** Use of funds**

((1)) ** In general** An eligible organization may use a grant awarded under subsection (a) to provide, in rural areas—

((A)) rent, mortgage, or utility assistance after 2 months of nonpayment in order to prevent eviction, foreclosure, or loss of utility service;

((B)) security deposits, rent for the first month of residence at a new location, and relocation assistance;

((C)) short-term emergency lodging in motels or shelters, either directly or through vouchers;

((D)) construction of new housing units to provide transitional or permanent housing to homeless individuals and families and individuals and families at risk of homelessness;

((E)) acquisition or rehabilitation of a structure to provide supportive services or to provide transitional or permanent housing, other than emergency shelter, to homeless individuals and families and individuals and families at risk of homelessness;

((F)) leasing of property, or portions of property, not owned by the recipient or project sponsor involved, for use in providing transitional or permanent housing to homeless individuals and families and individuals and families at risk of homelessness, or providing supportive services to such homeless and at-risk individuals and families;

((G)) provision of rental assistance to provide transitional or permanent housing to homeless individuals and families and individuals and families at risk of homelessness, such rental assistance may include tenant-based or project-based rental assistance;

((H)) payment of operating costs for housing units assisted under this subchapter;

((I)) rehabilitation and repairs such as insulation, window repair, door repair, roof repair, and repairs that are necessary to make premises habitable;

((J)) development of comprehensive and coordinated support services that use and supplement, as needed, community networks of services, including—

((i)) outreach services to reach eligible recipients;

((ii)) case management;

((iii)) housing counseling;

((iv)) budgeting;

((v)) job training and placement;

((vi)) primary health care;

((vii)) mental health services;

((viii)) substance abuse treatment;

((ix)) child care;

((x)) transportation;

((xi)) emergency food and clothing;

((xii)) family violence services;

((xiii)) education services;

((xiv)) moving services;

((xv)) entitlement assistance; and

((xvi)) referrals to veterans services and legal services; and

((K)) costs associated with making use of Federal inventory property programs to house homeless families, including the program established under subchapter V of this chapter and the Single Family Property Disposition Program established pursuant to .

((2)) ** Capacity building activities** Not more than 20 percent of the funds transferred under subsection ()(1) for a fiscal year may be used by eligible organizations for capacity building activities, including payment of operating costs and staff retention.l

((c)) ** Award of grants**

((1)) ** Communities with populations of less than 10,000**

((A)) ** Set aside** In awarding grants under subsection (a) for a fiscal year, the Secretary shall make available not less than 50 percent of the funds transferred under subsection ()(1) for the fiscal year for grants to eligible organizations serving communities that have populations of less than 10,000.l

((B)) ** Priority within set aside** In awarding grants in accordance with subparagraph (A), the Secretary shall give priority to eligible organizations serving communities with populations of less than 5,000.

((2)) ** Communities without significant Federal assistance** In awarding grants under subsection (a), including grants awarded in accordance with paragraph (1), the Secretary shall give priority to eligible organizations serving communities not currently receiving significant Federal assistance under this chapter.

((3)) ** State limit** In awarding grants under subsection (a) for a fiscal year, the Secretary shall not award to eligible organizations within a State an aggregate sum of more than 10 percent of the funds transferred under subsection ()(1), for the fiscal year.l

((d)) ** Application** In order to be eligible to receive a grant under subsection (a), an organization shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. The application shall include, at a minimum—

((1)) a description of the target population and geographic area to be served;

((2)) a description of the types of assistance to be provided;

((3)) an assurance that the assistance to be provided is closely related to the identified needs of the target population;

((4)) a description of the existing assistance available to the target population, including Federal, State, and local programs, and a description of the manner in which the organization will coordinate with and expand existing assistance or provide assistance not available in the immediate area;

((5)) an agreement by the organization that the organization will collect data on the projects conducted by the organization, including assistance provided, number and characteristics of persons served, and causes of homelessness for persons served;

((6)) a description of how individuals and families who are homeless or who have the lowest incomes in the community will be involved by the organization through employment, volunteer services, and otherwise, in providing, operating, and rehabilitating housing assisted under this section and in providing services assisted under this section and services for occupants of housing assisted under this section;

((7)) a description of consultations that took place within the community to ascertain the most important uses for funding under this section, including the involvement of potential beneficiaries of the project; and

((8)) a description of the extent and nature of homelessness and of the worst housing situations in the community.

((e)) ** Eligible organizations** Organizations eligible to receive a grant under subsection (a) shall include private nonprofit entities and county and local governments.

((f)) ** Matching funding**

((1)) ** In general** An organization eligible to receive a grant under subsection (a) shall specify matching contributions from any source other than a grant awarded under this part, that shall be made available in the geographic area in an amount equal to not less than 25 percent of the funds provided for the project or activity, except that grants for leasing shall not be subject to any match requirement.

((2)) ** Limitations on in-kind match** The cash value of services provided to the beneficiaries or clients of an eligible organization by an entity other than the organization may count toward the contributions in paragraph (1) only when documented by a memorandum of understanding between the organization and the other entity that such services will be provided.

((3)) ** Countable activities** The contributions required under paragraph (1) may consist of—

((A)) funding for any eligible activity described under subsection (b); and

((B)) subject to paragraph (2), in-kind provision of services of any eligible activity described under subsection (b).

((g)) ** Selection criteria** The Secretary shall establish criteria for selecting recipients of grants under subsection (a), including—

((1)) the participation of potential beneficiaries of the project in assessing the need for, and importance of, the project in the community;

((2)) the degree to which the project addresses the most harmful housing situations present in the community;

((3)) the degree of collaboration with others in the community to meet the goals described in subsection (a);

((4)) the performance of the organization in improving housing situations, taking account of the severity of barriers of individuals and families served by the organization;

((5)) for organizations that have previously received funding under this section, the extent of improvement in homelessness and the worst housing situations in the community since such funding began;

((6)) the need for such funds, as determined by the formula established under ; and

((7)) any other relevant criteria as determined by the Secretary.

((h)) ** Evaluation**

((1)) ** In general** Not later than 18 months after funding is first made available pursuant to the amendments made by title IV of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, the Secretary shall conduct an evaluation of the program to—

((A)) determine the effectiveness of the program in meeting the goals described in subsection (a) in the area served; and

((B)) determine the types of assistance needed to meet the goals described in subsection (a) in rural areas.

((2)) ** Report** Not later than 24 months after funding is first made available pursuant to the amendment made by title IV of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, the Secretary shall submit to Congress the evaluation of the program conducted under paragraph (1), including recommendations for any Federal administrative or legislative changes that may be necessary to improve the ability of rural communities to meet the goals described in subsection (a).

((i)) ** Technical assistance** The Secretary shall provide technical assistance to eligible organizations in developing programs in accordance with this section, and in gaining access to other Federal resources that may be used to assist homeless persons in rural areas. Such assistance may be provided through regional workshops, and may be provided directly or through grants to, or contracts with, nongovernmental entities.

((j)) ** Termination of assistance** If an individual or family who receives assistance under this section violates requirements of the assistance program provided by the organization receiving a grant under this section, the organization may terminate assistance in accordance with a formal process established by the organization that recognizes the rights of individuals receiving such assistance to due process of law, which may include a hearing.

((k)) ** Definitions** For purposes of this section:

((1)) ** Program** The term “program” means the rural housing stability grant program established under this section.

((2)) ** Rural area; rural community** The terms “rural area” and “rural community” mean—

((A)) any area or community, respectively, no part of which is within an area designated as a standard metropolitan statistical area by the Office of Management and Budget;

((B)) any area or community, respectively, that is—

((i)) within an area designated as a metropolitan statistical area or considered as part of a metropolitan statistical area; and

((ii)) located in a county where at least 75 percent of the population is rural; or

((C)) any area or community, respectively, located in a State that has population density of less than 30 persons per square mile (as reported in the most recent decennial census), and of which at least 1.25 percent of the total acreage of such State is under Federal jurisdiction, provided that no metropolitan city (as such term is defined in ) in such State is the sole beneficiary of the grant amounts awarded under this section.

((3)) ** Secretary** The term “Secretary” means the Secretary of Housing and Urban Development.

((l)) ** Program funding**

((1)) ** In general** The Secretary shall determine the total amount of funding attributable under to meet the needs of any geographic area in the Nation that applies for funding under this section. The Secretary shall transfer any amounts determined under this subsection from the Community Homeless Assistance Program and consolidate such transferred amounts for grants under this section, except that the Secretary shall transfer an amount not less than 5 percent of the amount available under part C for grants under this section. Any amounts so transferred and not used for grants under this section due to an insufficient number of applications shall be transferred to be used for grants under part C.section 11386a(b)(2) of this title

((2)) ** Availability** Any amount paid to a grant recipient for a fiscal year that remains unobligated at the end of the year shall remain available to the recipient for the purposes for which the payment was made for the next fiscal year. The Secretary shall take such action as may be necessary to recover any amount not obligated by the recipient at the end of the second fiscal year, and shall redistribute the amount to another eligible organization.

((m)) ** Determination of funding source** For any fiscal year, in addition to funds awarded under part B, funds under this subchapter to be used in a city or county shall only be awarded under either part C or part D.