(1) In order to maintain the long-term viability of affordable housing, using funding from the housing trust fund account established under RCW 43.185A.130 or from other legislative appropriations, the department may make competitive grant or loan awards to projects in need of major building improvements, preservation repairs, or system replacements.

(2) The department must solicit and review applications and evaluate projects based on the following criteria:

(a) The age of the property, with priority given to buildings that are more than 15 years old;

(b) The population served, with priority given to projects serving persons or families with the lowest incomes;

(c) The degree to which the applicant demonstrates that the improvements will result in a reduction of operating or utility costs, or both;

(d) The potential for additional years added to the affordability commitment period of the property; and

(e) Other criteria that the department considers necessary to achieve the purpose of the housing trust fund program.

(3) The department must require an award recipient to submit a property capital needs assessment, in a form acceptable to the department, prior to contract execution.