(a)  Admission to housing developments financed or insured by corporation mortgage loans or by the proceeds of mortgage loans purchased by the corporation or the proceeds of a loan to a mortgage lender or financed by the proceeds of obligations issued by the corporation pursuant to the provisions of this chapter shall be limited primarily to persons or families of low and moderate income.

(b)  The corporation shall approve a residential selection plan submitted by a housing sponsor for a housing development to be financed pursuant to the provisions of this chapter. The corporation shall make and publish regulations from time to time governing the terms of the resident selection plans. These plans shall include criteria for resident selection which establish income limits for eligible residents which may vary with the size and circumstances of the person or family. Subject to the approval of the corporation, resident selection plans may provide, with respect to dwelling accommodations, that any local housing authority created pursuant to the Rhode Island law in the municipality in which the housing development is located, shall have the right to designate residents, who are otherwise eligible for these accommodations as they become available, either in the initial occupancy of the housing development, or as vacancies occur.

(c)  The corporation shall by rules and regulations provide for the periodic examination of the income of any person or family residing in any housing development financed with a loan from the corporation.