; (B) resided in that geographic area during the 4-year period preceding the date of enactment of this Act; and (C) has an income that is less than 120 percent of the area median income. (2) First-time homebuyer The term first-time homebuyer means an individual (and if married, the spouse of the individual) who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. (3) Secretary The term Secretary means the Secretary of Housing and Urban Development. (b) Establishment There is established in the Office of Housing of the Department of Housing and Urban Development a fund, to be administered by the Secretary, that shall be used— (1) to provide grants to eligible residents to purchase homes; and (2) for outreach to financial institutions in targeted areas and eligible residents. (c) Grant amount Eligible residents may receive a grant from the fund established under subsection (b) in an amount equal to— (1) not more than 3.5 percent of the appraised value of the property to be purchased; or (2) if the appraised value is more than the principal obligation amount limitation for mortgages insured under title II of the National Housing Act ( 12 U.S.C. 1707 et seq.), 3.5 percent of the maximum principal obligation limitation for the property to be purchased. (d) FHA loan An eligible resident is not required to obtain a mortgage that is insured under title II of the National Housing Act ( 12 U.S.C. 1707 et seq.) as a condition of receiving a grant under this section. (e) Regulations and database Not later than 1 year after the date of enactment of this Act, the Secretary shall— (1) finalize regulations relating to the use of the fund established under subsection (b), including defining the geographic areas in which residents are eligible to receive grants through the fund, which shall include— (A) census tracts graded as hazardous in maps drawn by the Home Owners' Loan Corporation that are, as of the date of enactment of this Act, low-income communities