Section 2. (a) There shall be within the department a separate fund to be known as the Capital Improvement and Preservation Trust Fund. The department shall administer the fund for the purpose of preserving and improving existing privately-owned, state or federally-assisted housing. Property eligible for assistance shall include housing where the prepayment or payment of a state or federally-assisted mortgage or the expiration of federal or state low-income housing tax credits or other federal or state subsidies would lead or has led to the termination of a use agreement for low-income housing or in which a project-based rental assistance contract is expiring or has expired. Preference for the loans or grants from the fund shall be given to nonprofit organizations and housing authorities seeking to purchase eligible property. The fund shall be an expendable trust fund and shall not be subject to appropriation. An eligible property that has been acquired for the purpose of preserving or improving the property shall not lose eligibility due to actions by the purchaser to renew or extend state or federal contracts or subsidies.

(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 or 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 nonprofit or for-profit organizations 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 established in chapter 40H to provide assistance from the fund for projects owned or sponsored by nonprofit organizations.