"Sec. 2   RCW 43.185.050 and 2011 1st sp.s. c 50 s 953 are each amended to read as follows:
     (1) The department ((shall)) must use moneys from the housing trust fund and other legislative appropriations to finance in whole or in part any loans or grant projects that will provide housing for persons and families with special housing needs and with incomes at or below fifty percent of the median family income for the county or standard metropolitan statistical area where the project is located. At least thirty percent of these moneys used in any given funding cycle shall be for the benefit of projects located in rural areas of the state as defined by the department. If the department determines that it has not received an adequate number of suitable applications for rural projects during any given funding cycle, the department may allocate unused moneys for projects in nonrural areas of the state.
     (2) Activities eligible for assistance from the housing trust fund and other legislative appropriations include, but are not limited to:
     (a) New construction, rehabilitation, or acquisition of low and very low-income housing units;
     (b) Rent subsidies;
     (c) Matching funds for social services directly related to providing housing for special-need tenants in assisted projects;
     (d) Technical assistance, design and finance services and consultation, and administrative costs for eligible nonprofit community or neighborhood-based organizations;
     (e) Administrative costs for housing assistance groups or organizations when such grant or loan will substantially increase the recipient's access to housing funds other than those available under this chapter;
     (f) Shelters and related services for the homeless, including emergency shelters and overnight youth shelters;
     (g) Mortgage subsidies, including temporary rental and mortgage payment subsidies to prevent homelessness;
     (h) Mortgage insurance guarantee or payments for eligible projects;
     (i) Down payment or closing cost assistance for eligible first-time home buyers;
     (j) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing;
     (k) Projects making housing more accessible to families with members who have disabilities; and
     (l) During the 2005-2007 fiscal biennium, a manufactured/mobile home landlord-tenant ombudsman conflict resolution and park registration program.
     (3) During the 2005-2007 fiscal biennium, revenues generated under RCW 36.22.178 may be used for the development of affordable housing projects and other activities funded in section 108, chapter 371, Laws of 2006.
     (4) Legislative appropriations from capital bond proceeds may be used only for the costs of projects authorized under subsection (2)(a), (i), and (j) of this section, and not for the administrative costs of the department.
     (5) Moneys from repayment of loans from appropriations from capital bond proceeds may be used for all activities necessary for the proper functioning of the housing assistance program except for activities authorized under subsection (2)(b) and (c) of this section.
     (6) Administrative costs associated with application, distribution, and project development activities of the department ((shall)) may not exceed ((five)) three percent of the annual funds available for the housing assistance program((, except during the 2011-2013 fiscal biennium when administrative costs associated with housing trust fund application, distribution, and project development activities may not exceed three percent of the annual funds available for the housing assistance program; administrative costs associated with compliance and monitoring activities of the department may not exceed one quarter of one percent annually of the contracted amount of state investment in the housing assistance program; and reappropriations may not be included in the calculation of the annual funds available for determining the administrative costs)). Reappropriations must not be included in the calculation of the annual funds available for determining the administrative costs.
     (7) Administrative costs associated with compliance and monitoring activities of the department may not exceed one-quarter of one percent annually of the contracted amount of state investment in the housing assistance program."

"Sec. 5   RCW 43.185A.030 and 2011 1st sp.s. c 50 s 954 are each amended to read as follows:
     (1) Using moneys specifically appropriated for such purpose, the department shall finance in whole or in part projects that will provide housing for low-income households.
     (2) Activities eligible for assistance include, but are not limited to:
     (a) New construction, rehabilitation, or acquisition of housing for low-income households;
     (b) Rent subsidies in new construction or rehabilitated multifamily units;
     (c) Down payment or closing costs assistance for first-time home buyers;
     (d) Mortgage subsidies for new construction or rehabilitation of eligible multifamily units; and
     (e) Mortgage insurance guarantee or payments for eligible projects.
     (3) Legislative appropriations from capital bond proceeds may be used only for the costs of projects authorized under subsection (2) (a), (c), (d), and (e) of this section, and not for the administrative costs of the department.
     (4) Moneys from repayment of loans from appropriations from capital bond proceeds may be used for all activities necessary for the proper functioning of the affordable housing program except for activities authorized under subsection (2)(b) of this section.
     (5) Administrative costs associated with the application, distribution, and project development activities of the department ((shall)) may not exceed ((four)) three percent of the annual funds available for the affordable housing program((, except during the 2011-2013 fiscal biennium when administrative costs associated with housing trust fund application, distribution, and project development activities may not exceed three percent of the annual funds available for the housing assistance program; administrative costs associated with compliance and monitoring activities of the department may not exceed one quarter of one percent annually of the contracted amount of state investment in the housing assistance program; and reappropriations may not be included in the calculation of the annual funds available for determining the administrative costs)). Reappropriations must not be included in the calculation of the annual funds available for determining the administrative costs.
     (6) Administrative costs associated with compliance and monitoring activities of the department may not exceed one-quarter of one percent annually of the contracted amount of state investment in the affordable housing program."