A. Any locality may participate in a program under Title I (Community Development) of the United States Housing and Community Development Act of 1974, as amended, the National Affordable Housing Act of 1990, the Housing and Community Development Act of 1992 or any other federal legislation or program under which the locality may receive and use or administer the use of federal funds for housing, community development or economic development purposes. Any such locality may undertake the community development activities specified in such legislation or programs unless such activities are prohibited by the Constitution of Virginia. Any locality may appropriate its own moneys for the same purposes for which federal funds may be employed under the provisions of such federal legislation or program unless prohibited by the Constitution of Virginia. Any federal funds, or portion thereof, received by a locality under such legislation or programs may be deposited in a special fund which shall be established separate and apart from any other funds, general or special; such funds shall be deemed to be federal funds and shall not be construed to be part of the revenues of such locality.
B. Any city with a population over 100,000 which appropriates local funds pursuant to subsection A may use the income guidelines established by the Virginia Housing Development Authority for its single-family mortgage subsidy program to determine eligibility for home-ownership assistance from its local funds.