The Department shall award operating assistance grants to nonprofit organizations to increase their capacity to participate in housing projects and activities authorized by the programs that are financed through the Homeownership Programs Fund under § 4-502 of this title, the Rental Housing Programs Fund under § 4-504 of this title, the Special Loan Programs Fund under § 4-505 of this title, or otherwise financed totally or partly by the Department. To be eligible for an operating assistance grant under this section, a nonprofit organization must have limited expertise or no recent experience participating in projects or activities financed wholly or partly by the Department. A nonprofit organization may receive a grant or grants under this section for up to 3 years to increase its capacity to participate in each of the housing development areas of rental housing programs, homeownership programs, and special loan programs. A grant under this section may be for a term of up to 3 years if the Department finds that: the performance of the nonprofit organization in the prior year was acceptable; and money is appropriated and available to pay the grant.

The Department shall award operating assistance grants to nonprofit organizations to further the production or rehabilitation of limited income housing by those organizations or by individuals they help. A nonprofit organization is eligible for a grant if it meets the performance and other standards that the Department sets and: makes an application that: describes the housing project; includes evidence of acceptable performance in the prior year, if the nonprofit organization received a grant in the prior year; and is acceptable to the Department; has helped individuals to apply for loans from the Department; or was responsible for originating applications, as certified by a political subdivision approved by the Department.

A nonprofit organization may use an operating assistance grant for predevelopment, operating, and overhead costs, including: staff costs; organizational costs; and for a grant under § 4-1102 of this subtitle, costs relating to applying for loans or helping individuals to apply for loans.

Operating assistance grants under this subtitle may not exceed the amounts that the Department sets. During a fiscal year, all operating assistance grants under this subtitle shall be made from: up to 1% of the total amount of budgeted money in the Homeownership Programs Fund under § 4-502 of this title, the Rental Housing Programs Fund under § 4-504 of this title, and the Special Loan Programs Fund under § 4-505 of this title; and money appropriated from any other source.

The Department shall adopt regulations to carry out this subtitle.