(a) The state, acting by and in the discretion of the Commissioner of Housing, may enter into a contract with a community housing development corporation or an eligible developer, as defined in § 8-39, for state financial assistance in the form of (1) a state grant-in-aid, loan, deferred loan, advance or any combination thereof equal to the cost to the community housing development corporation or eligible developer, as approved by the commissioner, of developing or rehabilitating low and moderate income housing under § 8-217, but limited to the following expenses: Appraisals, title searches, legal fees, option agreements, architectural, engineering and consultants’ fees, financing fees, closing costs and such other expenses as may be financed by a mortgage loan under any federal or state housing statute and incurred by a community housing development corporation or eligible developer prior to the disbursement of mortgage loan funds on account of such property; provided, to the extent such expenses are recovered by the community housing development corporation or the eligible developer from the mortgage loan or from the proceeds of a sale of such property, such expenses shall be repaid to the state or to a fund established pursuant to subsection (b) of this section; and (2) an additional grant-in-aid, loan, deferred loan or advance to such corporation or such developer for the development of housing which in the determination of the commissioner contains a substantial number of dwelling units of three or more bedrooms provided (A) that the mortgage loan for such housing shall be eligible for insurance by the United States Department of Housing and Urban Development or for financing by the Connecticut Housing Finance Authority or the Farmers’ Home Administration, and (B) that the commissioner, after consultation with the United States Department of Housing and Urban Development, the Connecticut Housing Finance Authority or the Farmers’ Home Administration, as the case may be, shall have determined that the mortgage loan on such housing would not be insurable in the absence of such additional financial assistance; such grant-in-aid, loan, deferred loan or advance shall be in lieu of any assistance to said housing under § 8-216 and shall be equal to the additional cost of construction caused by the inclusion of such dwelling units of three or more bedrooms in such housing, but in no event shall such grant-in-aid, loan, deferred loan or advance be greater than ten per cent of the cost of construction of such housing, as determined by the United States Department of Housing and Urban Development, the Connecticut Housing Finance Authority or the Farmers’ Home Administration. The commissioner may require that any assistance in the form of a loan or deferred loan be secured by a mortgage on such housing. In the case of a deferred loan, the contract shall require that payments on all or a portion of the interest are due currently but that payments on principal may be made at a later time.

(b) The state, acting by and in the discretion of the commissioner, may enter into a contract with a community housing development corporation or an eligible developer for state financial assistance in the form of a loan or deferred loan, which loan or deferred loan shall be used to establish and administer a revolving loan fund for the construction, rehabilitation and renovation of existing or planned low and moderate income housing, as approved by the commissioner. Such fund may also consist of any state financial assistance received from a contract between said commissioner and such community housing development corporation or eligible developer entered into pursuant to subsection (a) of this section, any proceeds recovered by such corporation or developer from any mortgage loan or from any loan or on account of such project or from the sale of such project and funds from any other source. Such fund shall be used by such corporation or developer, as approved by the commissioner, for the expenses of acquisition, development, project selection, construction, rehabilitation, renovation and oversight of existing or planned low and moderate income housing or to make loans for construction, rehabilitation and renovation of such housing on such terms and conditions as the commissioner may determine. Recipients of loans under this subsection for housing located in a distressed municipality, as defined in § 32-9p, may assign or prepay such loans with the approval of the community housing development corporation. In the case of housing developed or rehabilitated by a community housing development corporation in distressed municipalities as defined in § 32-9p, the policies of the Department of Housing adopted under § 8-37dd, and the regulations of the department adopted under this section shall apply only to that portion of the assisted property which corresponds to the proportion of the state assistance to the property’s value. The number of income-limited housing units shall be determined by multiplying the amount of the housing assistance by the total number of housing units in the assisted housing and dividing the product by the fair market value of the property. The result shall be rounded to the lower whole number. Notwithstanding the provisions of any statute to the contrary or any regulation adopted under this section or § 8-37dd, or any other statute or regulation, limiting the income of occupants of housing assisted under this section and not located in a distressed municipality, the income of occupants of units assisted under this section and located in distressed municipalities may be two hundred fifty per cent or less of the area median income, adjusted for family size, as determined from time to time by the United States Department of Housing and Urban Development.

(c) The state, acting by and in the discretion of the commissioner, may enter into a contract with a community housing development corporation for state financial assistance within available appropriations in the form of a grant-in-aid which shall be used by such community housing development corporation to provide grants, or to establish a revolving loan fund to provide loans or deferred loans for the purpose of making structural or interior or exterior modifications to any dwelling which may be necessary to make such dwelling accessible to and usable by persons having physical or mental disabilities. Such corporation may provide such grants, loans or deferred loans to (1) any owner of a single-family or multifamily dwelling, or (2) any tenant who furnishes satisfactory evidence that the owner of the dwelling in which the tenant resides has approved the intended structural or interior or exterior modifications. Any such loan or deferred loan may be prepaid at any time, without penalty, and the commissioner shall release the lien on the property. In the case of housing developed or rehabilitated by a community housing development corporation in distressed municipalities as defined in § 32-9p, the policies of the Department of Housing adopted under § 8-37dd, and any regulation of the department adopted under this section, shall apply only to that portion of the assisted property which corresponds to the proportion of the state assistance to the property’s value. The number of income-limited housing units shall be determined by multiplying the amount of the housing assistance by the total number of housing units in the assisted housing and dividing the product by the fair market value of the property. The result shall be rounded to the lower whole number. Notwithstanding the provisions of any statute to the contrary or any regulation adopted under this section limiting the income of occupants of housing assisted under this section and not located in a distressed municipality, the income of occupants of units assisted under this section and located in distressed municipalities may be two hundred fifty per cent or less of the area median income, adjusted for family size, as determined from time to time by the United States Department of Housing and Urban Development.

(d) The Commissioner of Housing shall enter into a contract with a community housing development corporation for state financial assistance in the form of a grant-in-aid which shall be used by such community housing development corporation to provide grants for the purpose of conversion of adaptable living units into units accessible to persons with disabilities and for reconversion of such units to adaptable living units. Eligible applicants shall include any tenant or owner of a unit in a complex or building subject to the provisions of § 29-273.

(e) The Commissioner of Housing shall enter into a contract with a community housing development corporation for state financial assistance in the form of a grant-in-aid which shall be used by such community housing development corporation to provide grants, loans, deferred loans, loan guarantees, lines of credit, or any combination thereof, to eligible developers for activities that build, expand and enhance capacity, including, but not limited to, development of marketing or neighborhood strategic plans, professional staff training, technical assistance, predevelopment expenses as provided in subsection (a) of this section and other activities pursuant to § 8-217.

(f) The Commissioner of Housing shall adopt regulations, in accordance with chapter 54, to administer the programs established under subsections (c) and (d) of this section. Such regulations shall establish maximum income levels for tenants and homeowners and provide for adjustment of income for family size and medical expenses and may set maximum loan amounts for loans made under subsection (c) of this section that are not secured and for grants made under subsection (d) of this section.