Each housing agency shall adopt and promulgate fair and equitable policies establishing a plan for selection of applicants. The plan shall include standards for eligibility, procedures for prompt notification of eligibility or disqualification, and procedures for maintaining a waiting list of eligible applicants for whom vacancies are not immediately available. Eligible applicants shall be offered available vacancies as provided in such policies. Such policies and plans may, but shall not be required to, include the following:
(1) A local housing agency may deny a lease, right of occupancy, or any other assistance to any person, including the family or household of such person, if it determines that such person or any member of such person's household (a) has committed any fraud or made any material misrepresentation or omission in connection with any application for assistance or (b) has committed any fraud or made any material misrepresentation or omission in connection with any previous application for any public assistance or in connection with any determination or redetermination of eligibility;
(2) Preferences to give priority to persons displaced by public or private action, to families of veterans and servicemen and servicewomen, to families whose members are gainfully employed, to citizens of the United States or the state, to disabled persons or elderly persons, and such other preferences, as well as priorities within each preference category, as the local housing agency deems appropriate;
(3) Occupancy standards that provide for offering available units only to families of appropriate size and such other standards relating to occupancy and tenant conduct as the local housing agency deems appropriate; and
(4) Without limiting subdivisions (1) through (3) of this section, the local housing agency may further limit the offering of available units to families of appropriate qualifications in order to comply with state or federal law or regulations or contractual agreements with governmental agencies pursuant to such law or regulations.
Nothing contained in this section shall prevent a housing agency from suspending processing of applications of persons of eligible income unlikely to be offered units within a reasonable time after initial application as determined by the agency or from requiring annual renewal of applications.