U.S. Sen. Evan Bayh, D-Ind., proposed legislation Tuesday to give up to $230 million in federal funds to jump-start affordable housing projects in disaster areas, including communities in Northwest Indiana that were hard hit by flooding.

In recent years, thousands of homes in northern Indiana sustained flood damage. At the time, President George W. Bush declared the region a disaster area, paving the way for federal funds.

In introducing the legislation, Bayh said the economic downturn is making credit hard to come by and hindering the recovery effort in some communities.

"By allowing our state to immediately convert these tax credits to cash, Indiana could take advantage of $230 million in federal assistance to spur construction of quality, affordable houses. This will help families trying to rebuild their homes and lives while also creating jobs and boosting our state's housing sector," he said in a news release.

Bayh introduced the legislation along with Sen. Richard Shelby, R-Ala., the ranking Republican on the Senate Banking Committee.

An identical bill was introduced by Rep. Arthur Davis, D-Ala., and Charles Boustany, R-La., both members of the House Ways and Means Committee.

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