(a) A local government may allow households in a specific area within its boundaries to apply for housing rehabilitation loans by:
(1) designating the specific area; and
(2) preparing a housing rehabilitation plan for the designated area.
(b) A local government may designate more than one area within its boundaries.

(c) The designation of an area must be made in accordance with the standards established by the department. The area plan must be in the form prescribed by the department.