(a)      A project or undertaking, including the real, personal, and mixed property involved, qualifies as a public purpose project if it is planned, acquired, owned, developed, constructed, reconstructed, rehabilitated, repaired, renovated, or improved with the financial assistance of the Administration or the assistance of federal low-income housing credits authorized by the Internal Revenue Code, and it is:

            (1)      eligible wholly or partly for federal low-income housing credits; or

            (2)      located in a distressed area designated under subsection (e) of this section.

      (b)      Except as provided in subsection (c) of this section, a public purpose project:

            (1)      shall provide in substantial part for existing or new housing; and

            (2)      may include:

                  (i)      any improvements, such as streets, roads, sewer lines, and water lines; and

                  (ii)      public or private commercial, educational, cultural, recreational, community, or civic facilities.

      (c)      A public purpose project may include a greater proportion of public or private facilities if the Secretary determines that to do so would promote sound community development.

      (d)      All or part of the housing portion of a public purpose project shall be occupied by families of limited income.

      (e)      At the request of a political subdivision, the Secretary may designate a distressed area of the political subdivision after considering factors including:

            (1)      the availability, cost, and condition of housing and neighborhood facilities, including the age and number of abandoned and substandard structures;

            (2)      the incomes of residents relative to State or area-wide regional median incomes, including the number of individuals who are welfare recipients, unemployed, or living in poverty;

            (3)      the need to finance housing or public or private facilities to upgrade the social and economic conditions of the distressed area;

            (4)      the plans and financial commitment of the political subdivision to undertake improvements in the distressed area; and

            (5)      other standards and criteria that the Secretary considers relevant, including standards established for other State or federal programs.