Section 2. (a) There shall be within the department a separate fund to be known as the Housing Innovations Trust Fund. The department shall administer the fund for the purpose of making grants and loans to public or quasi-public entities to facilitate the production and retention of alternative forms of rental and ownership housing; provided, however, that 25 per cent of the beneficiaries of the fund shall be persons whose income shall not exceed 30 per cent of the area median income and 50 per cent of the beneficiaries of the fund shall be persons whose income not exceed 80 per cent of the area median income. The department shall give preference to those projects that provide transitional or permanent housing for homeless individuals and families and disabled persons. The fund shall be an expendable trust fund and shall not be subject to appropriation.

(b) There shall be credited to the fund revenue from appropriations or other monies authorized by the general court and specifically designated for the fund and any gifts, grants, private contributions, repayment of loans, fees and charges imposed relative to the making of loans, grants, subsidies, credit enhancements and other financial assistance, investment income earned on the fund's assets and any other sources. Money remaining in the fund at the end of a fiscal year shall not revert to the General Fund.

(c) The department shall provide assistance from the fund using only the criteria established in this chapter for projects owned or sponsored by authorities including but not limited to, projects that involve complex multiple-source financing or the preservation of existing affordable housing; provided, however, that no assistance shall be authorized unless the sponsor thereof is current on all existing mortgage obligations with the commonwealth or any political subdivision thereof. The department shall enter into agreements with the Community Economic Development Assistance Corporation to provide assistance from the fund for projects owned or sponsored by nonprofit organizations.