section without regard to this subsection. (7) Increase in State ceiling dedicated to certain rural development projects (A) In general The State housing credit ceiling for any calendar year shall be increased by an amount equal to 5 percent of the amount determined under paragraph (3)(C)(i). (B) Use of increased amount The amount of the increase under subparagraph (A) for any calendar year may only be allocated to buildings located in a rural area (as defined in section 42(d)(5)(B)(iii)(IV)). (8) Other definitions For purposes of this subsection— (A) Housing credit agency The term housing credit agency means any agency authorized to carry out this subsection. (B) Possessions treated as States The term State includes a possession of the United States. (9) Credit for buildings financed by tax-exempt bonds subject to volume cap not taken into account Rules similar to the rules of subsections (h)(4), (m)(1)(D), and (m)(2)(D) of section 42 shall apply for purposes of this subsection. (i) Definitions and special rules For purposes of this section— (1) Middle-income unit (A) In general The term middle-income unit means any unit in a building if— (i) such unit is rent-restricted (as defined in subsection (g)(2)), and (ii) the individuals occupying such unit meet the income limitation applicable under subsection (g)(1) to the project of which such building is a part. (B) Exceptions (i) Exclusion of low-income units A unit shall not be treated as a middle-income unit if such unit is a low-income unit (as defined under section 42(i)(3)). (ii) Unit must be suitable for permanent occupancy (I) In general A unit shall not be treated as a middle-income unit unless the unit is suitable for occupancy and used other than on a transient basis. (II) Suitability for occupancy For purposes of subclause (I), the suitability of a unit for occupancy shall be determined under regulations prescribed by the Secretary taking into account local health, safety, and building codes. (III) Single-room occupancy units For purposes of subclause