"Sec. 2   RCW 43.185.070 and 1994 sp.s. c 3 s 9 are each amended to read as follows:
     (1) During each calendar year in which funds from the housing trust fund or other legislative appropriations are available for use by the department for the housing assistance program, the department shall announce to all known interested parties, and through major media throughout the state, a grant and loan application period of at least ninety days' duration. This announcement shall be made as often as the director deems appropriate for proper utilization of resources. The department shall then promptly grant as many applications as will utilize available funds less appropriate administrative costs of the department. Administrative costs paid out of the housing trust fund may not exceed ((four)) five percent of annual revenues available for distribution to housing trust fund projects. In awarding funds under this chapter, the department shall provide for a geographic distribution on a statewide basis.
     (2) The department shall give first priority to applications for projects and activities which utilize existing privately owned housing stock including privately owned housing stock purchased by nonprofit public development authorities and public housing authorities as created in chapter 35.82 RCW. As used in this subsection, privately owned housing stock includes housing that is acquired by a federal agency through a default on the mortgage by the private owner. Such projects and activities shall be evaluated under subsection (3) of this section. Second priority shall be given to activities and projects which utilize existing publicly owned housing stock. All projects and activities shall be evaluated by some or all of the criteria under subsection (3) of this section, and similar projects and activities shall be evaluated under the same criteria.
     (3) The department shall give preference for applications based on some or all of the criteria under this subsection, and similar projects and activities shall be evaluated under the same criteria:
     (a) The degree of leveraging of other funds that will occur;
     (b) The degree of commitment from programs to provide necessary habilitation and support services for projects focusing on special needs populations;
     (c) Recipient contributions to total project costs, including allied contributions from other sources such as professional, craft and trade services, and lender interest rate subsidies;
     (d) Local government project contributions in the form of infrastructure improvements, and others;
     (e) Projects that encourage ownership, management, and other project-related responsibility opportunities;
     (f) Projects that demonstrate a strong probability of serving the original target group or income level for a period of at least twenty-five years;
     (g) The applicant has the demonstrated ability, stability and resources to implement the project;
     (h) Projects which demonstrate serving the greatest need;
     (i) Projects that provide housing for persons and families with the lowest incomes;
     (j) Projects serving special needs populations which are under statutory mandate to develop community housing;
     (k) Project location and access to employment centers in the region or area;
     (l) Projects that provide employment and training opportunities for disadvantaged youth under a youthbuild or youthbuild-type program as defined in RCW 50.72.020; and
     (m) Project location and access to available public transportation services.
     (4) The department shall only approve applications for projects for mentally ill persons that are consistent with a regional support network six-year capital and operating plan."