---
kind: "section"
citation: "42 U.S.C. § 12771"
title: "42"
title_heading: "The Public Health and Welfare"
number: "12771"
heading: "Set-aside for community housing development organizations"
release: "119-102"
url: "https://uscodex.org/usc/42/12771"
units:
  - "Chapter 130 — National Affordable Housing"
  - "Subchapter II — Investment in Affordable Housing"
  - "Part B — Community Housing Partnership"
---

# §12771. Set-aside for community housing development organizations

- (a) **In general—** For a period of 24 months after [funds](/usc/42/12854.md?p=3) under part A are made available to a jurisdiction, the jurisdiction shall reserve not less than 15 percent of such [funds](/usc/42/12854.md?p=3) for investment only in [housing](/usc/42/1490p–2.md?p=r-3) when a community [housing](/usc/42/1490p–2.md?p=r-3) development organization materially participates in the ownership or development of that [housing](/usc/42/1490p–2.md?p=r-3), as determined by the [Secretary](/usc/42/242q–4.md?p=2). Each [participating jurisdiction](/usc/42/12704.md?p=4) shall make reasonable efforts to identify community [housing](/usc/42/1490p–2.md?p=r-3) development organizations that are capable or can reasonably be expected to become capable of carrying out elements of the jurisdiction’s [housing strategy](/usc/42/19504.md?p=a-3) and to encourage such community [housing](/usc/42/1490p–2.md?p=r-3) development organizations to do so. If during the first 24 months of its participation under this subchapter, a [participating jurisdiction](/usc/42/12704.md?p=4) is unable to identify a sufficient number of capable community [housing](/usc/42/1490p–2.md?p=r-3) development organizations, then up to 20 percent of the [funds](/usc/42/12854.md?p=3) allocated to that jurisdiction under this section, but not to exceed $150,000, may be made available to carry out activities that develop the capacity of community [housing](/usc/42/1490p–2.md?p=r-3) development organizations in that jurisdiction. A [participating jurisdiction](/usc/42/12704.md?p=4) is authorized to enter into contracts with community [housing](/usc/42/1490p–2.md?p=r-3) development organizations to carry out this section.
- (b) **Recapture and reuse—** If any [funds](/usc/42/12854.md?p=3) reserved under [subsection (a)](#a) remain uninvested for a period of 24 months, the [Secretary](/usc/42/242q–4.md?p=2) shall make such [funds](/usc/42/12854.md?p=3) available to the [participating jurisdiction](/usc/42/12704.md?p=4) for any eligible activities under this subchapter without regard to whether a community [housing](/usc/42/1490p–2.md?p=r-3) development organization materially participates in the use of such [funds](/usc/42/12854.md?p=3).
- (c) **Direct reallocation criteria—** Insofar as practicable, direct reallocations under this section shall be made according to the selection criteria established under [section 12747(c) of this title](/usc/42/12747.md?p=c).

## Source credit

(Pub. L. 101–625, title II, § 231, Nov. 28, 1990, 104 Stat. 4114; Pub. L. 102–550, title II, § 212(a), (b), Oct. 28, 1992, 106 Stat. 3757; Pub. L. 119–101, title V, § 501(j), (s), July 11, 2026, 140 Stat. 911, 915.)

## Notes

### Editorial Notes

### Amendments

2026—Subsec. (a). Pub. L. 119–101, § 501(s), substituted “when a community housing development organization materially participates in the ownership or development of that housing, as determined by the Secretary” for “to be developed, sponsored, or owned by community housing development organizations”.

Subsec. (b). Pub. L. 119–101, § 501(j), amended subsec. (b) generally. Prior to amendment, text read as follows: “If any funds reserved under subsection (a) remain uninvested for a period of 24 months, then the Secretary shall deduct such funds from the line of credit in the participating jurisdiction’s HOME Investment Trust Fund and make such funds available by direct reallocation (1) to other participating jurisdictions for affordable housing developed, sponsored or owned by community housing development organizations, or (2) to nonprofit intermediary organizations to carry out activities that develop the capacity of community housing development organizations consistent with section 12773 of this title, with preference to community housing development organizations serving the jurisdiction from which the funds were recaptured.”

1992—Subsec. (a). Pub. L. 102–550 substituted “24” for “18” in first sentence and inserted after second sentence “If during the first 24 months of its participation under this subchapter, a participating jurisdiction is unable to identify a sufficient number of capable community housing development organizations, then up to 20 percent of the funds allocated to that jurisdiction under this section, but not to exceed $150,000, may be made available to carry out activities that develop the capacity of community housing development organizations in that jurisdiction.”

Subsec. (b). Pub. L. 102–550, § 212(a), substituted “24” for “18”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1992 Amendment

Amendment by Pub. L. 102–550 applicable to unexpended funds allocated under subchapter II of this chapter in fiscal year 1992, except as otherwise specifically provided, see section 223 of Pub. L. 102–550, set out as a note under section 12704 of this title.