(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.