1. A. As used in this section:

   "Affordable housing" means the same as that term is defined in § 15.2-2201.

   "Applicant" means the record owner of real property that is seeking the award of an affordable housing performance grant for a qualifying property.

   "Authority" means any locality's industrial development authority or economic development authority established by ordinance pursuant to § 15.2-4903.

   "Property" means real property.

2. B. Any locality that has established an industrial development authority or economic development authority pursuant to § 15.2-4903 may by ordinance establish an affordable housing performance grant program for qualifying construction and improvement of property. Such ordinance shall authorize the Authority to award affordable housing performance grants to qualifying applicants.

3. C. Any ordinance establishing an affordable housing performance grant program shall include reasonable regulations and provisions as to all of the following:

   1. 1. A definition of affordable housing;
   2. 2. Affordable housing performance grant program application guidelines and processes, including an identification of the local officer designated by the governing body to accept such applications;
   3. 3. Criteria for determining whether the construction or improvement of property qualifies for the awarding of an affordable housing performance grant;
   4. 4. Provisions requiring that, prior to the Authority awarding an affordable housing performance grant, an applicant acquire any appropriate permits and complete the construction or improvement to develop affordable housing, as defined by the locality, on the qualifying property, which shall be confirmed by the commissioner of revenue or other local assessing officer;
   5. 5. Provisions requiring that, prior to the Authority awarding an affordable housing performance grant, an applicant produce evidence demonstrating that a restrictive covenant to provide affordable housing, as defined by the locality, on the qualifying property for a term prescribed by the ordinance, but limited to no more than 30 years, has been filed and recorded in the office of the clerk of the circuit court. Such covenants may be enforced by the beneficial party to such recorded covenant by an action at law or suit in equity, including specific performance and injunctive relief or, in the event of noncompliance, a right to liquidated damages; and
   6. 6. A timeline for the Authority to award affordable housing performance grants to qualifying applicants either (i) upon the completion of the construction or improvement of the property or (ii) on January 1 of the year following the completion of the construction or improvement of the property.
4. D. Any grant awarded pursuant to this section shall not exceed an amount equal to the increase in assessed value resulting from the construction or improvement of a property as determined by the commissioner of revenue or other local assessing officer.
5. E. Any locality that adopts an ordinance pursuant to this section may impose a fee, not to exceed $250, to offset the costs of processing an application seeking the award of an affordable housing performance grant.

2026, c. 386.