    [Congressional Bills 110th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 3221 Engrossed Amendment House (EAH)]

                    In the House of Representatives, U. S.,

                                                             July 23, 2008.
        Resolved, That the House agree to the amendment of the Senate to
    the amendments of the House to the amendment of the Senate to the bill
    (H.R. 3221) entitled ``An Act moving the United States toward greater
    energy independence and security, developing innovative new
    technologies, reducing carbon emissions, creating green jobs,
    protecting consumers, increasing clean renewable energy production, and
    modernizing our energy infrastructure, and to amend the Internal
    Revenue Code of 1986 to provide tax incentives for the production of
    renewable energy and energy conservation'', with the following

       HOUSE AMENDMENT TO SENATE AMENDMENT TO HOUSE AMENDMENTS TO SENATE
                                   AMENDMENT:

                In lieu of the matter proposed to be inserted by the
          amendment of the Senate, insert the following:

    SECTION. 1. SHORT TITLE; TABLE OF CONTENTS.

        (a) Short Title.--This Act may be cited as the ``Housing and
    Economic Recovery Act of 2008''.
        (b) Table of Content.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.

                       DIVISION A--HOUSING FINANCE REFORM

    Sec. 1001. Short title.
    Sec. 1002. Definitions.

                  TITLE I--REFORM OF REGULATION OF ENTERPRISES

          Subtitle A--Improvement of Safety and Soundness Supervision

    Sec. 1101. Establishment of the Federal Housing Finance Agency.
    Sec. 1102. Duties and authorities of the Director.
    Sec. 1103. Federal Housing Finance Oversight Board.
    Sec. 1104. Authority to require reports by regulated entities.
    Sec. 1105. Examiners and accountants; authority to contract for reviews
                                of regulated entities; ombudsman.
    Sec. 1106. Assessments.
    Sec. 1107. Regulations and orders.
    Sec. 1108. Prudential management and operations standards.
    Sec. 1109. Review of and authority over enterprise assets and
                                liabilities.
    Sec. 1110. Risk-based capital requirements.
    Sec. 1111. Minimum capital levels.
    Sec. 1112. Registration under the securities laws.
    Sec. 1113. Prohibition and withholding of executive compensation.
    Sec. 1114. Limit on golden parachutes.
    Sec. 1115. Reporting of fraudulent loans.
    Sec. 1116. Inclusion of minorities and women; diversity in Agency
                                workforce.
    Sec. 1117. Temporary authority for purchase of obligations of regulated
                                entities by Secretary of Treasury.
    Sec. 1118. Consultation between the Director of the Federal Housing
                                Finance Agency and the Board of Governors
                                of the Federal Reserve System to ensure
                                financial market stability .

                 Subtitle B--Improvement of Mission Supervision

    Sec. 1121. Transfer of program approval and housing goal oversight.
    Sec. 1122. Assumption by the Director of certain other HUD
                                responsibilities.
    Sec. 1123. Review of enterprise products.
    Sec. 1124. Conforming loan limits.
    Sec. 1125. Annual housing report.
    Sec. 1126. Public use database.
    Sec. 1127. Reporting of mortgage data.
    Sec. 1128. Revision of housing goals.
    Sec. 1129. Duty to serve underserved markets.
    Sec. 1130. Monitoring and enforcing compliance with housing goals.
    Sec. 1131. Affordable housing programs.
    Sec. 1132. Financial education and counseling.
    Sec. 1133. Transfer and rights of certain HUD employees.

                      Subtitle C--Prompt Corrective Action

    Sec. 1141. Critical capital levels.
    Sec. 1142. Capital classifications.
    Sec. 1143. Supervisory actions applicable to undercapitalized regulated
                                entities.
    Sec. 1144. Supervisory actions applicable to significantly
                                undercapitalized regulated entities.
    Sec. 1145. Authority over critically undercapitalized regulated
                                entities.

                        Subtitle D--Enforcement Actions

    Sec. 1151. Cease and desist proceedings.
    Sec. 1152. Temporary cease and desist proceedings.
    Sec. 1153. Removal and prohibition authority.
    Sec. 1154. Enforcement and jurisdiction.
    Sec. 1155. Civil money penalties.
    Sec. 1156. Criminal penalty.
    Sec. 1157. Notice after separation from service.
    Sec. 1158. Subpoena authority.

                         Subtitle E--General Provisions

    Sec. 1161. Conforming and technical amendments.
    Sec. 1162. Presidentially-appointed directors of enterprises.
    Sec. 1163. Effective date.

                       TITLE II--FEDERAL HOME LOAN BANKS

    Sec. 1201. Recognition of distinctions between the enterprises and the
                                Federal Home Loan Banks.
    Sec. 1202. Directors.
    Sec. 1203. Definitions.
    Sec. 1204. Agency oversight of Federal Home Loan Banks.
    Sec. 1205. Housing goals.
    Sec. 1206. Community development financial institutions.
    Sec. 1207. Sharing of information among Federal Home Loan Banks.
    Sec. 1208. Exclusion from certain requirements.
    Sec. 1209. Voluntary mergers.
    Sec. 1210. Authority to reduce districts.
    Sec. 1211. Community financial institution members.
    Sec. 1212. Public use database; reports to Congress.
    Sec. 1213. Semiannual reports.
    Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank.
    Sec. 1215. Study and report to Congress on securitization of acquired
                                member assets.
    Sec. 1216. Technical and conforming amendments.
    Sec. 1217. Study on Federal Home Loan Bank advances.
    Sec. 1218. Federal Home Loan Bank refinancing authority for certain
                                residential mortgage loans.

    TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND
                       THE FEDERAL HOUSING FINANCE BOARD

                               Subtitle A--OFHEO

    Sec. 1301. Abolishment of OFHEO.
    Sec. 1302. Continuation and coordination of certain actions.
    Sec. 1303. Transfer and rights of employees of OFHEO.
    Sec. 1304. Transfer of property and facilities.

                   Subtitle B--Federal Housing Finance Board

    Sec. 1311. Abolishment of the Federal Housing Finance Board.
    Sec. 1312. Continuation and coordination of certain actions.
    Sec. 1313. Transfer and rights of employees of the Federal Housing
                                Finance Board.
    Sec. 1314. Transfer of property and facilities.

                         TITLE IV--HOPE FOR HOMEOWNERS

    Sec. 1401. Short title.
    Sec. 1402. Establishment of HOPE for Homeowners Program.
    Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage
                                loans.
    Sec. 1404. Revised standards for FHA appraisers.

                    TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

    Sec. 1501. Short title.
    Sec. 1502. Purposes and methods for establishing a mortgage licensing
                                system and registry.
    Sec. 1503. Definitions.
    Sec. 1504. License or registration required.
    Sec. 1505. State license and registration application and issuance.
    Sec. 1506. Standards for State license renewal.
    Sec. 1507. System of registration administration by Federal agencies.
    Sec. 1508. Secretary of Housing and Urban Development backup authority
                                to establish a loan originator licensing
                                system.
    Sec. 1509. Backup authority to establish a nationwide mortgage
                                licensing and registry system.
    Sec. 1510. Fees.
    Sec. 1511. Background checks of loan originators.
    Sec. 1512. Confidentiality of information.
    Sec. 1513. Liability provisions.
    Sec. 1514. Enforcement under HUD backup licensing system.
    Sec. 1515. State examination authority.
    Sec. 1516. Reports and recommendations to Congress.
    Sec. 1517. Study and reports on defaults and foreclosures.

                            TITLE VI--MISCELLANEOUS

    Sec. 1601. Study and reports on guarantee fees.
    Sec. 1602. Study and report on default risk evaluation.
    Sec. 1603. Conversion of HUD contracts.
    Sec. 1604. Bridge depository institutions.
    Sec. 1605. Sense of the Senate.

                       DIVISION B--FORECLOSURE PREVENTION

    Sec. 2001. Short title.
    Sec. 2002. Emergency designation.

                     TITLE I--FHA MODERNIZATION ACT OF 2008

    Sec. 2101. Short title.

                  Subtitle A--Building American Homeownership

    Sec. 2111. Short title.
    Sec. 2112. Maximum principal loan obligation.
    Sec. 2113. Cash investment requirement and prohibition of seller-funded
                                down payment assistance.
    Sec. 2114. Mortgage insurance premiums.
    Sec. 2115. Rehabilitation loans.
    Sec. 2116. Discretionary action.
    Sec. 2117. Insurance of condominiums.
    Sec. 2118. Mutual Mortgage Insurance Fund.
    Sec. 2119. Hawaiian home lands and Indian reservations.
    Sec. 2120. Conforming and technical amendments.
    Sec. 2121. Insurance of mortgages.
    Sec. 2122. Home equity conversion mortgages.
    Sec. 2123. Energy efficient mortgages program.
    Sec. 2124. Pilot program for automated process for borrowers without
                                sufficient credit history.
    Sec. 2125. Homeownership preservation.
    Sec. 2126. Use of FHA savings for improvements in FHA technologies,
                                procedures, processes, program performance,
                                staffing, and salaries.
    Sec. 2127. Post-purchase housing counseling eligibility improvements.
    Sec. 2128. Pre-purchase homeownership counseling demonstration.
    Sec. 2129. Fraud prevention.
    Sec. 2130. Limitation on mortgage insurance premium increases.
    Sec. 2131. Savings provision.
    Sec. 2132. Implementation.
    Sec. 2133. Moratorium on implementation of risk-based premiums.

              Subtitle B--Manufactured Housing Loan Modernization

    Sec. 2141. Short title.
    Sec. 2142. Purposes.
    Sec. 2143. Exception to limitation on financial institution portfolio.
    Sec. 2144. Insurance benefits.
    Sec. 2145. Maximum loan limits.
    Sec. 2146. Insurance premiums.
    Sec. 2147. Technical corrections.
    Sec. 2148. Revision of underwriting criteria.
    Sec. 2149. Prohibition against kickbacks and unearned fees.
    Sec. 2150. Leasehold requirements.

         TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

    Sec. 2201. Temporary increase in maximum loan guaranty amount for
                                certain housing loans guaranteed by the
                                Secretary of Veterans Affairs.
    Sec. 2202. Counseling on mortgage foreclosures for members of the Armed
                                Forces returning from service abroad.
    Sec. 2203. Enhancement of protections for servicemembers relating to
                                mortgages and mortgage foreclosures.

    TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
                                FORECLOSED HOMES

    Sec. 2301. Emergency assistance for the redevelopment of abandoned and
                                foreclosed homes.
    Sec. 2302. Nationwide distribution of resources.
    Sec. 2303. Limitation on use of funds with respect to eminent domain.
    Sec. 2304. Limitation on distribution of funds.
    Sec. 2305. Counseling intermediaries.

                     TITLE IV--HOUSING COUNSELING RESOURCES

    Sec. 2401. Housing counseling resources.
    Sec. 2402. Credit counseling.

                  TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

    Sec. 2501. Short title.
    Sec. 2502. Enhanced mortgage loan disclosures.
    Sec. 2503. Community Development Investment Authority for depository
                                institutions.

                       TITLE VI--VETERANS HOUSING MATTERS

    Sec. 2601. Home improvements and structural alterations for totally
                                disabled members of the Armed Forces before
                                discharge or release from the Armed Forces.
    Sec. 2602. Eligibility for specially adapted housing benefits and
                                assistance for members of the Armed Forces
                                with service-connected disabilities and
                                individuals residing outside the United
                                States.
    Sec. 2603. Specially adapted housing assistance for individuals with
                                severe burn injuries.
    Sec. 2604. Extension of assistance for individuals residing temporarily
                                in housing owned by a family member.
    Sec. 2605. Increase in specially adapted housing benefits for disabled
                                veterans.
    Sec. 2606. Report on specially adapted housing for disabled
                                individuals.
    Sec. 2607. Report on specially adapted housing assistance for
                                individuals who reside in housing owned by
                                a family member on permanent basis.
    Sec. 2608. Definition of annual income for purposes of section 8 and
                                other public housing programs.
    Sec. 2609. Payment of transportation of baggage and household effects
                                for members of the Armed Forces who
                                relocate due to foreclosure of leased
                                housing.

      TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

    Sec. 2701. Short title.
    Sec. 2702. Public housing agency plans for certain qualified public
                                housing agencies.

                        TITLE VIII--HOUSING PRESERVATION

            Subtitle A--Preservation Under Federal Housing Programs

    Sec. 2801. Clarification of disposition of certain properties.
    Sec. 2802. Eligibility of certain projects for enhanced voucher
                                assistance.
    Sec. 2803. Transfer of certain rental assistance contracts.
    Sec. 2804. Public housing disaster relief.
    Sec. 2805. Preservation of certain affordable housing.

    Subtitle B--Coordination of Federal Housing Programs and Tax Incentives
                                  for Housing

    Sec. 2831. Short title.
    Sec. 2832. Approvals by Department of Housing and Urban Development.
    Sec. 2833. Project approvals by rural housing service.
    Sec. 2834. Use of FHA loans with housing tax credits.
    Sec. 2835. Other HUD programs.

                            TITLE IX--MISCELLANEOUS

    Sec. 2901. Homeless assistance.
    Sec. 2902. Increasing access and understanding of energy efficient
                                mortgages.

                       DIVISION C--TAX-RELATED PROVISIONS

    Sec. 3000. Short title; etc.

                        TITLE I--HOUSING TAX INCENTIVES

                        Subtitle A--Multi-Family Housing

                     Part I--Low-Income Housing Tax Credit

    Sec. 3001. Temporary increase in volume cap for low-income housing tax
                                credit.
    Sec. 3002. Determination of credit rate.
    Sec. 3003. Modifications to definition of eligible basis.
    Sec. 3004. Other simplification and reform of low-income housing tax
                                incentives.
    Sec. 3005. Treatment of military basic pay.

            Part II--Modifications to Tax-Exempt Housing Bond Rules

    Sec. 3007. Recycling of tax-exempt debt for financing residential
                                rental projects.
    Sec. 3008. Coordination of certain rules applicable to low-income
                                housing credit and qualified residential
                                rental project exempt facility bonds.

      Part III--Reforms Related to the Low-Income Housing Credit and Tax-
                              Exempt Housing Bonds

    Sec. 3009. Hold harmless for reductions in area median gross income.
    Sec. 3010. Exception to annual current income determination requirement
                                where determination not relevant.

                       Subtitle B--Single Family Housing

    Sec. 3011. First-time homebuyer credit.
    Sec. 3012. Additional standard deduction for real property taxes for
                                nonitemizers.

                         Subtitle C--General Provisions

    Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
    Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt
                                housing bonds, low-income housing tax
                                credit, and rehabilitation credit.
    Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for
                                treatment as tax-exempt bonds.
    Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign
                                affidavits.
    Sec. 3025. Modification of definition of tax-exempt use property for
                                purposes of the rehabilitation credit.
    Sec. 3026. Extension of special rule for mortgage revenue bonds for
                                residences located in disaster areas.
    Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery
                                rebates for individuals.

           TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

          Subtitle A--Foreign Currency and Other Qualified Activities

    Sec. 3031. Revisions to REIT income tests.
    Sec. 3032. Revisions to REIT asset tests.
    Sec. 3033. Conforming foreign currency revisions.

                     Subtitle B--Taxable REIT Subsidiaries

    Sec. 3041. Conforming taxable REIT subsidiary asset test.

                            Subtitle C--Dealer Sales

    Sec. 3051. Holding period under safe harbor.
    Sec. 3052. Determining value of sales under safe harbor.

                         Subtitle D--Health Care REITs

    Sec. 3061. Conformity for health care facilities.

                          Subtitle E--Effective Dates

    Sec. 3071. Effective dates.

                         TITLE III--REVENUE PROVISIONS

                         Subtitle A--General Provisions

    Sec. 3081. Election to accelerate the AMT and research credits in lieu
                                of bonus depreciation.
    Sec. 3082. Certain GO Zone incentives.
    Sec. 3083. Increase in statutory limit on the public debt.

                          Subtitle B--Revenue Offsets

    Sec. 3091. Returns relating to payments made in settlement of payment
                                card and third party network transactions.
    Sec. 3092. Gain from sale of principal residence allocated to
                                nonqualified use not excluded from income.
    Sec. 3093. Delay in application of worldwide allocation of interest.
    Sec. 3094. Time for payment of corporate estimated taxes.

                       DIVISION A--HOUSING FINANCE REFORM

    SEC. 1001. SHORT TITLE.

        This division may be cited as the ``Federal Housing Finance
    Regulatory Reform Act of 2008''.

    SEC. 1002. DEFINITIONS.

        (a) Federal Safety and Soundness Act Definitions.--Section 1303 of
    the Federal Housing Enterprises Financial Safety and Soundness Act of
    1992 (12 U.S.C. 4502) is amended--
                (1) in each of paragraphs (8), (9), (10), and (19), by
            striking ``Secretary'' each place that term appears and
            inserting ``Director'';
                (2) by redesignating paragraphs (16) through (19) as
            paragraphs (21) through (24), respectively;
                (3) by striking paragraphs (13) through (15) and inserting
            the following:
                ``(19) Office of finance.--The term `Office of Finance'
            means the Office of Finance of the Federal Home Loan Bank
            System (or any successor thereto).
                ``(20) Regulated entity.--The term `regulated entity'
            means--
                        ``(A) the Federal National Mortgage Association and
                    any affiliate thereof;
                        ``(B) the Federal Home Loan Mortgage Corporation
                    and any affiliate thereof; and
                        ``(C) any Federal Home Loan Bank.'';
                (4) by redesignating paragraphs (11) and (12) as paragraphs
            (17) and (18), respectively;
                (5) by redesignating paragraph (7) as paragraph (12);
                (6) by redesignating paragraphs (8) through (10) as
            paragraphs (14) through (16), respectively;
                (7) in paragraph (5)--
                        (A) by striking ``(5)'' and inserting ``(9)''; and
                        (B) by striking ``Office of Federal Housing
                    Enterprise Oversight of the Department of Housing and
                    Urban Development'' and inserting ``Federal Housing
                    Finance Agency'';
                (8) by redesignating paragraph (6) as paragraph (10);
                (9) by redesignating paragraphs (2) through (4) as
            paragraphs (5) through (7), respectively;
                (10) by inserting after paragraph (7), as redesignated, the
            following:
                ``(8) Default; in danger of default.--
                        ``(A) Default.--The term `default' means, with
                    respect to a regulated entity, any adjudication or
                    other official determination by any court of competent
                    jurisdiction, or the Agency, pursuant to which a
                    conservator, receiver, limited-life regulated entity,
                    or legal custodian is appointed for a regulated entity.
                        ``(B) In danger of default.--The term `in danger of
                    default' means a regulated entity with respect to
                    which, in the opinion of the Agency--
                                ``(i) the regulated entity is not likely to
                            be able to pay the obligations of the regulated
                            entity in the normal course of business; or
                                ``(ii) the regulated entity--
                                        ``(I) has incurred or is likely to
                                    incur losses that will deplete all or
                                    substantially all of its capital; and
                                        ``(II) there is no reasonable
                                    prospect that the capital of the
                                    regulated entity will be
                                    replenished.'';
                (11) by inserting after paragraph (1) the following:
                ``(2) Agency.--The term `Agency' means the Federal Housing
            Finance Agency established under section 1311.
                ``(3) Authorizing statutes.--The term `authorizing
            statutes' means--
                        ``(A) the Federal National Mortgage Association
                    Charter Act;
                        ``(B) the Federal Home Loan Mortgage Corporation
                    Act; and
                        ``(C) the Federal Home Loan Bank Act.
                ``(4) Board.--The term `Board' means the Federal Housing
            Finance Oversight Board established under section 1313A.'';
                (12) by inserting after paragraph (10), as redesignated by
            this section, the following:
                ``(11) Entity-affiliated party.--The term `entity-
            affiliated party' means--
                        ``(A) any director, officer, employee, or
                    controlling stockholder of, or agent for, a regulated
                    entity;
                        ``(B) any shareholder, affiliate, consultant, or
                    joint venture partner of a regulated entity, and any
                    other person, as determined by the Director (by
                    regulation or on a case-by-case basis) that
                    participates in the conduct of the affairs of a
                    regulated entity, provided that a member of a Federal
                    Home Loan Bank shall not be deemed to have participated
                    in the affairs of that Bank solely by virtue of being a
                    shareholder of, and obtaining advances from, that Bank;
                        ``(C) any independent contractor for a regulated
                    entity (including any attorney, appraiser, or
                    accountant), if--
                                ``(i) the independent contractor knowingly
                            or recklessly participates in--
                                        ``(I) any violation of any law or
                                    regulation;
                                        ``(II) any breach of fiduciary
                                    duty; or
                                        ``(III) any unsafe or unsound
                                    practice; and
                                ``(ii) such violation, breach, or practice
                            caused, or is likely to cause, more than a
                            minimal financial loss to, or a significant
                            adverse effect on, the regulated entity;
                        ``(D) any not-for-profit corporation that receives
                    its principal funding, on an ongoing basis, from any
                    regulated entity; and
                        ``(E) the Office of Finance.'';
                (13) by inserting after paragraph (12), as redesignated by
            this section, the following:
                ``(13) Limited-life regulated entity.--The term `limited-
            life regulated entity' means an entity established by the
            Agency under section 1367(i) with respect to a Federal Home
            Loan Bank in default or in danger of default or with respect to
            an enterprise in default or in danger of default.''; and
                (14) by adding at the end the following:
                ``(25) Violation.--The term `violation' includes any action
            (alone or in combination with another or others) for or toward
            causing, bringing about, participating in, counseling, or
            aiding or abetting a violation.''.
        (b) References in This Act.--As used in this Act, unless otherwise
    specified--
                (1) the term ``Agency'' means the Federal Housing Finance
            Agency;
                (2) the term ``Director'' means the Director of the Agency;
            and
                (3) the terms ``enterprise'', ``regulated entity'', and
            ``authorizing statutes'' have the same meanings as in section
            1303 of the Federal Housing Enterprises Financial Safety and
            Soundness Act of 1992, as amended by this Act.

                  TITLE I--REFORM OF REGULATION OF ENTERPRISES

          Subtitle A--Improvement of Safety and Soundness Supervision

    SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

        The Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992 (12 U.S.C. 4501 et seq.) is amended by striking sections 1311
    and 1312 and inserting the following:

    ``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

        ``(a) Establishment.--There is established the Federal Housing
    Finance Agency, which shall be an independent agency of the Federal
    Government.
        ``(b) General Supervisory and Regulatory Authority.--
                ``(1) In general.--Each regulated entity shall, to the
            extent provided in this title, be subject to the supervision
            and regulation of the Agency.
                ``(2) Authority over fannie mae, freddie mac, the federal
            home loan banks, and the office of finance.--The Director shall
            have general regulatory authority over each regulated entity
            and the Office of Finance, and shall exercise such general
            regulatory authority, including such duties and authorities set
            forth under section 1313, to ensure that the purposes of this
            Act, the authorizing statutes, and any other applicable law are
            carried out.
        ``(c) Savings Provision.--The authority of the Director to take
    actions under subtitles B and C shall not in any way limit the general
    supervisory and regulatory authority granted to the Director under
    subsection (b).

    ``SEC. 1312. DIRECTOR.

        ``(a) Establishment of Position.--There is established the position
    of the Director of the Agency, who shall be the head of the Agency.
        ``(b) Appointment; Term.--
                ``(1) Appointment.--The Director shall be appointed by the
            President, by and with the advice and consent of the Senate,
            from among individuals who are citizens of the United States,
            have a demonstrated understanding of financial management or
            oversight, and have a demonstrated understanding of capital
            markets, including the mortgage securities markets and housing
            finance.
                ``(2) Term.--The Director shall be appointed for a term of
            5 years, unless removed before the end of such term for cause
            by the President.
                ``(3) Vacancy.--A vacancy in the position of Director that
            occurs before the expiration of the term for which a Director
            was appointed shall be filled in the manner established under
            paragraph (1), and the Director appointed to fill such vacancy
            shall be appointed only for the remainder of such term.
                ``(4) Service after end of term.--An individual may serve
            as the Director after the expiration of the term for which
            appointed until a successor has been appointed.
                ``(5) Transitional provision.--Notwithstanding paragraphs
            (1) and (2), during the period beginning on the effective date
            of the Federal Housing Finance Regulatory Reform Act of 2008,
            and ending on the date on which the Director is appointed and
            confirmed, the person serving as the Director of the Office of
            Federal Housing Enterprise Oversight of the Department of
            Housing and Urban Development on that effective date shall act
            for all purposes as, and with the full powers of, the Director.
        ``(c) Deputy Director of the Division of Enterprise Regulation.--
                ``(1) In general.--The Agency shall have a Deputy Director
            of the Division of Enterprise Regulation, who shall be
            designated by the Director from among individuals who are
            citizens of the United States, have a demonstrated
            understanding of financial management or oversight, and have a
            demonstrated understanding of mortgage securities markets and
            housing finance.
                ``(2) Functions.--The Deputy Director of the Division of
            Enterprise Regulation shall have such functions, powers, and
            duties with respect to the oversight of the enterprises as the
            Director shall prescribe.
        ``(d) Deputy Director Of The Division Of Federal Home Loan Bank
    Regulation.--
                ``(1) In general.--The Agency shall have a Deputy Director
            of the Division of Federal Home Loan Bank Regulation, who shall
            be designated by the Director from among individuals who are
            citizens of the United States, have a demonstrated
            understanding of financial management or oversight, and have a
            demonstrated understanding of the Federal Home Loan Bank System
            and housing finance.
                ``(2) Functions.--The Deputy Director of the Division of
            Federal Home Loan Bank Regulation shall have such functions,
            powers, and duties with respect to the oversight of the Federal
            Home Loan Banks as the Director shall prescribe.
        ``(e) Deputy Director for Housing Mission and Goals.--
                ``(1) In general.--The Agency shall have a Deputy Director
            for Housing Mission and Goals, who shall be designated by the
            Director from among individuals who are citizens of the United
            States, and have a demonstrated understanding of the housing
            markets and housing finance.
                ``(2) Functions.--The Deputy Director for Housing Mission
            and Goals shall have such functions, powers, and duties with
            respect to the oversight of the housing mission and goals of
            the enterprises, and with respect to oversight of the housing
            finance and community and economic development mission of the
            Federal Home Loan Banks, as the Director shall prescribe.
                ``(3) Considerations.--In exercising such functions,
            powers, and duties, the Deputy Director for Housing Mission and
            Goals shall consider the differences between the enterprises
            and the Federal Home Loan Banks, including those described in
            section 1313(d).
        ``(f) Acting Director.--In the event of the death, resignation,
    sickness, or absence of the Director, the President shall designate
    either the Deputy Director of the Division of Enterprise Regulation,
    the Deputy Director of the Division of Federal Home Loan Bank
    Regulation, or the Deputy Director for Housing Mission and Goals, to
    serve as acting Director until the return of the Director, or the
    appointment of a successor pursuant to subsection (b).
        ``(g) Limitations.--The Director and each of the Deputy Directors
    may not--
                ``(1) have any direct or indirect financial interest in any
            regulated entity or entity-affiliated party;
                ``(2) hold any office, position, or employment in any
            regulated entity or entity-affiliated party; or
                ``(3) have served as an executive officer or director of
            any regulated entity or entity-affiliated party at any time
            during the 3-year period preceding the date of appointment or
            designation of such individual as Director or Deputy Director,
            as applicable.''.

    SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.

        (a) In General.--Section 1313 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended
    to read as follows:

    ``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

        ``(a) Duties.--
                ``(1) Principal duties.--The principal duties of the
            Director shall be--
                        ``(A) to oversee the prudential operations of each
                    regulated entity; and
                        ``(B) to ensure that--
                                ``(i) each regulated entity operates in a
                            safe and sound manner, including maintenance of
                            adequate capital and internal controls;
                                ``(ii) the operations and activities of
                            each regulated entity foster liquid, efficient,
                            competitive, and resilient national housing
                            finance markets (including activities relating
                            to mortgages on housing for low- and moderate-
                            income families involving a reasonable economic
                            return that may be less than the return earned
                            on other activities);
                                ``(iii) each regulated entity complies with
                            this title and the rules, regulations,
                            guidelines, and orders issued under this title
                            and the authorizing statutes;
                                ``(iv) each regulated entity carries out
                            its statutory mission only through activities
                            that are authorized under and consistent with
                            this title and the authorizing statutes; and
                                ``(v) the activities of each regulated
                            entity and the manner in which such regulated
                            entity is operated are consistent with the
                            public interest.
                ``(2) Scope of authority.--The authority of the Director
            shall include the authority--
                        ``(A) to review and, if warranted based on the
                    principal duties described in paragraph (1), reject any
                    acquisition or transfer of a controlling interest in a
                    regulated entity; and
                        ``(B) to exercise such incidental powers as may be
                    necessary or appropriate to fulfill the duties and
                    responsibilities of the Director in the supervision and
                    regulation of each regulated entity.
        ``(b) Delegation of Authority.--The Director may delegate to
    officers and employees of the Agency any of the functions, powers, or
    duties of the Director, as the Director considers appropriate.
        ``(c) Litigation Authority.--
                ``(1) In general.--In enforcing any provision of this
            title, any regulation or order prescribed under this title, or
            any other provision of law, rule, regulation, or order, or in
            any other action, suit, or proceeding to which the Director is
            a party or in which the Director is interested, and in the
            administration of conservatorships and receiverships, the
            Director may act in the Director's own name and through the
            Director's own attorneys.
                ``(2) Subject to suit.--Except as otherwise provided by
            law, the Director shall be subject to suit (other than suits on
            claims for money damages) by a regulated entity with respect to
            any matter under this title or any other applicable provision
            of law, rule, order, or regulation under this title, in the
            United States district court for the judicial district in which
            the regulated entity has its principal place of business, or in
            the United States District Court for the District of Columbia,
            and the Director may be served with process in the manner
            prescribed by the Federal Rules of Civil Procedure.''.
        (b) Independence in Congressional Testimony and Recommendations.--
    Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking
    ``the Federal Housing Finance Board'' and inserting ``the Director of
    the Federal Housing Finance Agency''.

    SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

        (a) In General.--The Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by
    inserting after section 1313 the following:

    ``SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

        ``(a) In General.--There is established the Federal Housing Finance
    Oversight Board, which shall advise the Director with respect to
    overall strategies and policies in carrying out the duties of the
    Director under this title.
        ``(b) Limitations.--The Board may not exercise any executive
    authority, and the Director may not delegate to the Board any of the
    functions, powers, or duties of the Director.
        ``(c) Composition.--The Board shall be comprised of 4 members, of
    whom--
                ``(1) 1 member shall be the Secretary of the Treasury;
                ``(2) 1 member shall be the Secretary of Housing and Urban
            Development;
                ``(3) 1 member shall be the Chairman of the Securities and
            Exchange Commission; and
                ``(4) 1 member shall be the Director, who shall serve as
            the Chairperson of the Board.
        ``(d) Meetings.--
                ``(1) In general.--The Board shall meet upon notice by the
            Director, but in no event shall the Board meet less frequently
            than once every 3 months.
                ``(2) Special meetings.--Either the Secretary of the
            Treasury, the Secretary of Housing and Urban Development, or
            the Chairman of the Securities and Exchange Commission may,
            upon giving written notice to the Director, require a special
            meeting of the Board.
        ``(e) Testimony.--On an annual basis, the Board shall testify
    before Congress regarding--
                ``(1) the safety and soundness of the regulated entities;
                ``(2) any material deficiencies in the conduct of the
            operations of the regulated entities;
                ``(3) the overall operational status of the regulated
            entities;
                ``(4) an evaluation of the performance of the regulated
            entities in carrying out their respective missions;
                ``(5) operations, resources, and performance of the Agency;
            and
                ``(6) such other matters relating to the Agency and its
            fulfillment of its mission, as the Board determines
            appropriate.''.
        (b) Annual Report of the Director.--Section 1319B(a) of the Federal
    Housing Enterprises Financial Safety and Soundness Act of 1992 (12
    U.S.C. 4521(a)) is amended--
                (1) by striking ``enterprise'' each place that term appears
            and inserting ``regulated entity'';
                (2) by striking ``enterprises'' each place that term
            appears and inserting ``regulated entities'';
                (3) in paragraph (3), by striking ``; and'' and inserting a
            semicolon;
                (4) in paragraph (4), by striking ``1994.'' and inserting
            ``1994; and''; and
                (5) by adding at the end the following:
                ``(5) the assessment of the Board or any of its members
            with respect to--
                        ``(A) the safety and soundness of the regulated
                    entities;
                        ``(B) any material deficiencies in the conduct of
                    the operations of the regulated entities;
                        ``(C) the overall operational status of the
                    regulated entities; and
                        ``(D) an evaluation of the performance of the
                    regulated entities in carrying out their respective
                    missions;
                ``(6) operations, resources, and performance of the Agency;
            and
                ``(7) such other matters relating to the Agency and the
            fulfillment of its mission.''.

    SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.

        (a) In General.--Section 1314 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) is
    amended--
                (1) in the section heading, by striking ``enterprises'' and
            inserting ``regulated entities'';
                (2) by striking ``an enterprise'' each place that term
            appears and inserting ``a regulated entity'';
                (3) by striking ``the enterprise'' and inserting ``the
            regulated entity'';
                (4) in subsection (a)--
                        (A) by striking the subsection heading and all that
                    follows through ``and operations'' in paragraph (1) and
                    inserting the following:
        ``(a) Regular and Special Reports.--
                ``(1) Regular reports.--The Director may require, by
            general or specific orders, a regulated entity to submit
            regular reports, including financial statements determined on a
            fair value basis, on the condition (including financial
            condition), management, activities, or operations of the
            regulated entity, as the Director considers appropriate''; and
                        (B) in paragraph (2)--
                                (i) by inserting ``, by general or specific
                            orders,'' after ``may also require''; and
                                (ii) by striking ``whenever'' and inserting
                            ``on any of the topics specified in paragraph
                            (1) or any other relevant topics, if''; and
                (5) by adding at the end the following:
        ``(c) Penalties for Failure To Make Reports.--
                ``(1) Violations.--It shall be a violation of this section
            for any regulated entity--
                        ``(A) to fail to make, transmit, or publish any
                    report or obtain any information required by the
                    Director under this section, section 309(k) of the
                    Federal National Mortgage Association Charter Act,
                    section 307(c) of the Federal Home Loan Mortgage
                    Corporation Act, or section 20 of the Federal Home Loan
                    Bank Act, within the period of time specified in such
                    provision of law or otherwise by the Director; or
                        ``(B) to submit or publish any false or misleading
                    report or information under this section.
                ``(2) Penalties.--
                        ``(A) First tier.--
                                ``(i) In general.--A violation described in
                            paragraph (1) shall be subject to a penalty of
                            not more than $2,000 for each day during which
                            such violation continues, in any case in
                            which--
                                        ``(I) the subject regulated entity
                                    maintains procedures reasonably adapted
                                    to avoid any inadvertent error and the
                                    violation was unintentional and a
                                    result of such an error; or
                                        ``(II) the violation was an
                                    inadvertent transmittal or publication
                                    of any report which was minimally late.
                                ``(ii) Burden of proof.--For purposes of
                            this subparagraph, the regulated entity shall
                            have the burden of proving that the error was
                            inadvertent or that a report was inadvertently
                            transmitted or published late.
                        ``(B) Second tier.--A violation described in
                    paragraph (1) shall be subject to a penalty of not more
                    than $20,000 for each day during which such violation
                    continues or such false or misleading information is
                    not corrected, in any case that is not addressed in
                    subparagraph (A) or (C).
                        ``(C) Third tier.--A violation described in
                    paragraph (1) shall be subject to a penalty of not more
                    than $1,000,000 per day for each day during which such
                    violation continues or such false or misleading
                    information is not corrected, in any case in which the
                    subject regulated entity committed such violation
                    knowingly or with reckless disregard for the accuracy
                    of any such information or report.
                ``(3) Assessments.--Any penalty imposed under this
            subsection shall be in lieu of a penalty under section 1376,
            but shall be assessed and collected by the Director in the
            manner provided in section 1376 for penalties imposed under
            that section, and any such assessment (including the
            determination of the amount of the penalty) shall be otherwise
            subject to the provisions of section 1376.
                ``(4) Hearing.--A regulated entity against which a penalty
            is assessed under this section shall be afforded an agency
            hearing if the regulated entity submits a request for a hearing
            not later than 20 days after the date of the issuance of the
            notice of assessment. Section 1374 shall apply to any such
            proceedings.''.
        (b) Conforming Amendment.--The Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is
    amended by striking sections 1327 and 1328.

    SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT FOR REVIEWS
                  OF REGULATED ENTITIES; OMBUDSMAN.

        (a) In General.--Section 1317 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is
    amended--
                (1) in subsection (a), by striking ``enterprise'' each
            place that term appears and inserting ``regulated entity'';
                (2) in subsection (b)--
                        (A) by inserting ``of a regulated entity'' after
                    ``under this section''; and
                        (B) by striking ``to determine the condition of an
                    enterprise for the purpose of ensuring its financial
                    safety and soundness'' and inserting ``or
                    appropriate'';
                (3) in subsection (c), in the second sentence, by inserting
            before the period ``to conduct examinations under this
            section'';
                (4) by redesignating subsections (d) through (f) as
            subsections (e) through (g), respectively; and
                (5) by inserting after subsection (c) the following:
        ``(d) Inspector General.--There shall be within the Agency an
    Inspector General, who shall be appointed in accordance with section
    3(a) of the Inspector General Act of 1978.''.
        (b) Direct Hire Authority To Hire Accountants, Economists, and
    Examiners.--Section 1317 of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended by adding
    at the end the following:
        ``(h) Appointment of Accountants, Economists, and Examiners.--
                ``(1) Applicability.--This section shall apply with respect
            to any position of examiner, accountant, economist, and
            specialist in financial markets and in technology at the
            Agency, with respect to supervision and regulation of the
            regulated entities, that is in the competitive service.
                ``(2) Appointment authority.--The Director may appoint
            candidates to any position described in paragraph (1)--
                        ``(A) in accordance with the statutes, rules, and
                    regulations governing appointments in the excepted
                    service; and
                        ``(B) notwithstanding any statutes, rules, and
                    regulations governing appointments in the competitive
                    service.''.
        (c) Amendments to Inspector General Act.--Section 11 of the
    Inspector General Act of 1978 (5 U.S.C. App.) is amended--
                (1) in paragraph (1), by inserting ``; the Director of the
            Federal Housing Finance Agency'' after ``Social Security
            Administration''; and
                (2) in paragraph (2), by inserting ``, the Federal Housing
            Finance Agency'' after ``Social Security Administration''.
        (d) Authority To Contract for Reviews of Regulated Entities.--
    Section 1319 of the Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 (12 U.S.C. 4519) is amended--
                (1) in the section heading, by striking ``enterprises by
            rating organization'' and inserting ``regulated entities''; and
                (2) by striking ``enterprises'' and inserting ``regulated
            entities''.
        (e) Office of the Ombudsman.--Section 1317 of the Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517)
    is amended by adding at the end the following:
        ``(i) Ombudsman.--The Director shall establish, by regulation, an
    Office of the Ombudsman within the Agency, which shall be responsible
    for considering complaints and appeals, from any regulated entity and
    any person that has a business relationship with a regulated entity,
    regarding any matter relating to the regulation and supervision of such
    regulated entity by the Agency. The regulation issued by the Director
    under this subsection shall specify the authority and duties of the
    Office of the Ombudsman.''.

    SEC. 1106. ASSESSMENTS.

        Section 1316 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4516) is amended--
                (1) by striking subsection (a) and inserting the following:
        ``(a) Annual Assessments.--The Director shall establish and collect
    from the regulated entities annual assessments in an amount not
    exceeding the amount sufficient to provide for reasonable costs
    (including administrative costs) and expenses of the Agency,
    including--
                ``(1) the expenses of any examinations under section 1317
            of this Act and under section 20 of the Federal Home Loan Bank
            Act;
                ``(2) the expenses of obtaining any reviews and credit
            assessments under section 1319;
                ``(3) such amounts in excess of actual expenses for any
            given year as deemed necessary by the Director to maintain a
            working capital fund in accordance with subsection (e); and
                ``(4) the windup of the affairs of the Office of Federal
            Housing Enterprise Oversight and the Federal Housing Finance
            Board under title III of the Federal Housing Finance Regulatory
            Reform Act of 2008.'';
                (2) in subsection (b)--
                        (A) by realigning the margins of paragraph (2) two
                    ems from the left, so as to align the left margin of
                    such paragraph with the left margins of paragraph (1);
                        (B) by redesignating paragraphs (2) and (3) as
                    paragraphs (3) and (4), respectively; and
                        (C) by inserting after paragraph (1) the following:
                ``(2) Separate treatment of federal home loan bank and
            enterprise assessments.--Assessments collected from the
            enterprises shall not exceed the amounts sufficient to provide
            for the costs and expenses described in subsection (a) relating
            to the enterprises. Assessments collected from the Federal Home
            Loan Banks shall not exceed the amounts sufficient to provide
            for the costs and expenses described in subsection (a) relating
            to the Federal Home Loan Banks.'';
                (3) by striking subsection (c) and inserting the following:
        ``(c) Increased Costs of Regulation.--
                ``(1) Increase for inadequate capitalization.--The
            semiannual payments made pursuant to subsection (b) by any
            regulated entity that is not classified (for purposes of
            subtitle B) as adequately capitalized may be increased, as
            necessary, in the discretion of the Director to pay additional
            estimated costs of regulation of the regulated entity.
                ``(2) Adjustment for enforcement activities.--The Director
            may adjust the amounts of any semiannual payments for an
            assessment under subsection (a) that are to be paid pursuant to
            subsection (b) by a regulated entity, as necessary in the
            discretion of the Director, to ensure that the costs of
            enforcement activities under this Act for a regulated entity
            are borne only by such regulated entity.
                ``(3) Additional assessment for deficiencies.--If at any
            time, as a result of increased costs of regulation of a
            regulated entity that is not classified (for purposes of
            subtitle B) as adequately capitalized or as the result of
            supervisory or enforcement activities under this Act for a
            regulated entity, the amount available from any semiannual
            payment made by such regulated entity pursuant to subsection
            (b) is insufficient to cover the costs of the Agency with
            respect to such entity, the Director may make and collect from
            such regulated entity an immediate assessment to cover the
            amount of such deficiency for the semiannual period. If, at the
            end of any semiannual period during which such an assessment is
            made, any amount remains from such assessment, such remaining
            amount shall be deducted from the assessment for such regulated
            entity for the following semiannual period.'';
                (4) in subsection (d), by striking ``If'' and inserting
            ``Except with respect to amounts collected pursuant to
            subsection (a)(3), if''; and
                (5) by striking subsections (e) through (g) and inserting
            the following:
        ``(e) Working Capital Fund.--At the end of each year for which an
    assessment under this section is made, the Director shall remit to each
    regulated entity any amount of assessment collected from such regulated
    entity that is attributable to subsection (a)(3) and is in excess of
    the amount the Director deems necessary to maintain a working capital
    fund.
        ``(f) Treatment of Assessments.--
                ``(1) Deposit.--Amounts received by the Director from
            assessments under this section may be deposited by the Director
            in the manner provided in section 5234 of the Revised Statutes
            of the United States (12 U.S.C. 192) for monies deposited by
            the Comptroller of the Currency.
                ``(2) Not government funds.--The amounts received by the
            Director from any assessment under this section shall not be
            construed to be Government or public funds or appropriated
            money.
                ``(3) No apportionment of funds.--Notwithstanding any other
            provision of law, the amounts received by the Director from any
            assessment under this section shall not be subject to
            apportionment for the purpose of chapter 15 of title 31, United
            States Code, or under any other authority.
                ``(4) Use of funds.--The Director may use any amounts
            received by the Director from assessments under this section
            for compensation of the Director and other employees of the
            Agency and for all other expenses of the Director and the
            Agency.
                ``(5) Availability of oversight fund amounts.--
            Notwithstanding any other provision of law, any amounts
            remaining in the Federal Housing Enterprises Oversight Fund
            established under this section (as in effect before the
            effective date of the Federal Housing Finance Regulatory Reform
            Act of 2008, and any amounts remaining from assessments on the
            Federal Home Loan Banks pursuant to section 18(b) of the
            Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon
            such effective date, be treated for purposes of this subsection
            as amounts received from assessments under this section.
                ``(6) Treasury investments.--
                        ``(A) Authority.--The Director may request the
                    Secretary of the Treasury to invest such portions of
                    amounts received by the Director from assessments paid
                    under this section that, in the Director's discretion,
                    are not required to meet the current working needs of
                    the Agency.
                        ``(B) Government obligations.--Pursuant to a
                    request under subparagraph (A), the Secretary of the
                    Treasury shall invest such amounts in Government
                    obligations guaranteed as to principal and interest by
                    the United States with maturities suitable to the needs
                    of the Agency and bearing interest at a rate determined
                    by the Secretary of the Treasury taking into
                    consideration current market yields on outstanding
                    marketable obligations of the United States of
                    comparable maturity.
        ``(g) Budget and Financial Management.--
                ``(1) Financial operating plans and forecasts.--The
            Director shall provide to the Director of the Office of
            Management and Budget copies of the Director's financial
            operating plans and forecasts, as prepared by the Director in
            the ordinary course of the Agency's operations, and copies of
            the quarterly reports of the Agency's financial condition and
            results of operations, as prepared by the Director in the
            ordinary course of the Agency's operations.
                ``(2) Financial statements.--The Agency shall prepare
            annually a statement of--
                        ``(A) assets and liabilities and surplus or
                    deficit;
                        ``(B) income and expenses; and
                        ``(C) sources and application of funds.
                ``(3) Financial management systems.--The Agency shall
            implement and maintain financial management systems that--
                        ``(A) comply substantially with Federal financial
                    management systems requirements and applicable Federal
                    accounting standards; and
                        ``(B) use a general ledger system that accounts for
                    activity at the transaction level.
                ``(4) Assertion of internal controls.--The Director shall
            provide to the Comptroller General of the United States an
            assertion as to the effectiveness of the internal controls that
            apply to financial reporting by the Agency, using the standards
            established in section 3512(c) of title 31, United States Code.
                ``(5) Rule of construction.--This subsection may not be
            construed as implying any obligation on the part of the
            Director to consult with or obtain the consent or approval of
            the Director of the Office of Management and Budget with
            respect to any report, plan, forecast, or other information
            referred to in paragraph (1) or any jurisdiction or oversight
            over the affairs or operations of the Agency.
        ``(h) Audit of Agency.--
                ``(1) In general.--The Comptroller General shall annually
            audit the financial transactions of the Agency in accordance
            with the United States generally accepted government auditing
            standards as may be prescribed by the Comptroller General of
            the United States. The audit shall be conducted at the place or
            places where accounts of the Agency are normally kept. The
            representatives of the Government Accountability Office shall
            have access to the personnel and to all books, accounts,
            documents, papers, records (including electronic records),
            reports, files, and all other papers, automated data, things,
            or property belonging to or under the control of or used or
            employed by the Agency pertaining to its financial transactions
            and necessary to facilitate the audit, and such representatives
            shall be afforded full facilities for verifying transactions
            with the balances or securities held by depositories, fiscal
            agents, and custodians. All such books, accounts, documents,
            records, reports, files, papers, and property of the Agency
            shall remain in possession and custody of the Agency. The
            Comptroller General may obtain and duplicate any such books,
            accounts, documents, records, working papers, automated data
            and files, or other information relevant to such audit without
            cost to the Comptroller General and the Comptroller General's
            right of access to such information shall be enforceable
            pursuant to section 716(c) of title 31, United States Code.
                ``(2) Report.--The Comptroller General shall submit to the
            Congress a report of each annual audit conducted under this
            subsection. The report to the Congress shall set forth the
            scope of the audit and shall include the statement of assets
            and liabilities and surplus or deficit, the statement of income
            and expenses, the statement of sources and application of
            funds, and such comments and information as may be deemed
            necessary to inform Congress of the financial operations and
            condition of the Agency, together with such recommendations
            with respect thereto as the Comptroller General may deem
            advisable. A copy of each report shall be furnished to the
            President and to the Agency at the time submitted to the
            Congress.
                ``(3) Assistance and costs.--For the purpose of conducting
            an audit under this subsection, the Comptroller General may, in
            the discretion of the Comptroller General, employ by contract,
            without regard to section 3709 of the Revised Statutes of the
            United States (41 U.S.C. 5), professional services of firms and
            organizations of certified public accountants for temporary
            periods or for special purposes. Upon the request of the
            Comptroller General, the Director of the Agency shall transfer
            to the Government Accountability Office from funds available,
            the amount requested by the Comptroller General to cover the
            full costs of any audit and report conducted by the Comptroller
            General. The Comptroller General shall credit funds transferred
            to the account established for salaries and expenses of the
            Government Accountability Office, and such amount shall be
            available upon receipt and without fiscal year limitation to
            cover the full costs of the audit and report.''.

    SEC. 1107. REGULATIONS AND ORDERS.

        Section 1319G of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4526) is amended--
                (1) by striking subsection (a) and inserting the following:
        ``(a) Authority.--The Director shall issue any regulations,
    guidelines, or orders necessary to carry out the duties of the Director
    under this title or the authorizing statutes, and to ensure that the
    purposes of this title and the authorizing statutes are
    accomplished.''; and
                (2) by striking subsection (c).

    SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

        The Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting after section
    1313A, as added by this Act, the following new section:

    ``SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

        ``(a) Standards.--The Director shall establish standards, by
    regulation or guideline, for each regulated entity relating to--
                ``(1) adequacy of internal controls and information systems
            taking into account the nature and scale of business
            operations;
                ``(2) independence and adequacy of internal audit systems;
                ``(3) management of interest rate risk exposure;
                ``(4) management of market risk, including standards that
            provide for systems that accurately measure, monitor, and
            control market risks and, as warranted, that establish
            limitations on market risk;
                ``(5) adequacy and maintenance of liquidity and reserves;
                ``(6) management of asset and investment portfolio growth;
                ``(7) investments and acquisitions of assets by a regulated
            entity, to ensure that they are consistent with the purposes of
            this title and the authorizing statutes;
                ``(8) overall risk management processes, including adequacy
            of oversight by senior management and the board of directors
            and of processes and policies to identify, measure, monitor,
            and control material risks, including reputational risks, and
            for adequate, well-tested business resumption plans for all
            major systems with remote site facilities to protect against
            disruptive events;
                ``(9) management of credit and counterparty risk, including
            systems to identify concentrations of credit risk and
            prudential limits to restrict exposure of the regulated entity
            to a single counterparty or groups of related counterparties;
                ``(10) maintenance of adequate records, in accordance with
            consistent accounting policies and practices that enable the
            Director to evaluate the financial condition of the regulated
            entity; and
                ``(11) such other operational and management standards as
            the Director determines to be appropriate.
        ``(b) Failure To Meet Standards.--
                ``(1) Plan requirement.--
                        ``(A) In general.--If the Director determines that
                    a regulated entity fails to meet any standard
                    established under subsection (a)--
                                ``(i) if such standard is established by
                            regulation, the Director shall require the
                            regulated entity to submit an acceptable plan
                            to the Director within the time allowed under
                            subparagraph (C); and
                                ``(ii) if such standard is established by
                            guideline, the Director may require the
                            regulated entity to submit a plan described in
                            clause (i).
                        ``(B) Contents.--Any plan required under
                    subparagraph (A) shall specify the actions that the
                    regulated entity will take to correct the deficiency.
                    If the regulated entity is undercapitalized, the plan
                    may be a part of the capital restoration plan for the
                    regulated entity under section 1369C.
                        ``(C) Deadlines for submission and review.--The
                    Director shall by regulation establish deadlines that--
                                ``(i) provide the regulated entities with
                            reasonable time to submit plans required under
                            subparagraph (A), and generally require a
                            regulated entity to submit a plan not later
                            than 30 days after the Director determines that
                            the entity fails to meet any standard
                            established under subsection (a); and
                                ``(ii) require the Director to act on plans
                            expeditiously, and generally not later than 30
                            days after the plan is submitted.
                ``(2) Required order upon failure to submit or implement
            plan.--If a regulated entity fails to submit an acceptable plan
            within the time allowed under paragraph (1)(C), or fails in any
            material respect to implement a plan accepted by the Director,
            the following shall apply:
                        ``(A) Required correction of deficiency.--The
                    Director shall, by order, require the regulated entity
                    to correct the deficiency.
                        ``(B) Other authority.--The Director may, by order,
                    take one or more of the following actions until the
                    deficiency is corrected:
                                ``(i) Prohibit the regulated entity from
                            permitting its average total assets (as such
                            term is defined in section 1316(b)) during any
                            calendar quarter to exceed its average total
                            assets during the preceding calendar quarter,
                            or restrict the rate at which the average total
                            assets of the entity may increase from one
                            calendar quarter to another.
                                ``(ii) Require the regulated entity--
                                        ``(I) in the case of an enterprise,
                                    to increase its ratio of core capital
                                    to assets.
                                        ``(II) in the case of a Federal
                                    Home Loan Bank, to increase its ratio
                                    of total capital (as such term is
                                    defined in section 6(a)(5) of the
                                    Federal Home Loan Bank Act (12 U.S.C.
                                    1426(a)(5)) to assets.
                                ``(iii) Require the regulated entity to
                            take any other action that the Director
                            determines will better carry out the purposes
                            of this section than any of the actions
                            described in this subparagraph.
                ``(3) Mandatory restrictions.--In complying with paragraph
            (2), the Director shall take one or more of the actions
            described in clauses (i) through (iii) of paragraph (2)(B) if--
                        ``(A) the Director determines that the regulated
                    entity fails to meet any standard prescribed under
                    subsection (a);
                        ``(B) the regulated entity has not corrected the
                    deficiency; and
                        ``(C) during the 18-month period before the date on
                    which the regulated entity first failed to meet the
                    standard, the entity underwent extraordinary growth, as
                    defined by the Director.
        ``(c) Other Enforcement Authority Not Affected.--The authority of
    the Director under this section is in addition to any other authority
    of the Director.''.

    SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND
                  LIABILITIES.

        (a) In General.--Subtitle B of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611 et seq.) is
    amended--
                (1) by striking the subtitle designation and heading and
            inserting the following:

     ``Subtitle B--Required Capital Levels for Regulated Entities, Special
          Enforcement Powers, and Reviews of Assets and Liabilities'';

            and
                (2) by adding at the end the following new section:

    ``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.

        ``(a) In General.--The Director shall, by regulation, establish
    criteria governing the portfolio holdings of the enterprises, to ensure
    that the holdings are backed by sufficient capital and consistent with
    the mission and the safe and sound operations of the enterprises. In
    establishing such criteria, the Director shall consider the ability of
    the enterprises to provide a liquid secondary market through
    securitization activities, the portfolio holdings in relation to the
    overall mortgage market, and adherence to the standards specified in
    section 1313B.
        ``(b) Temporary Adjustments.--The Director may, by order, make
    temporary adjustments to the established standards for an enterprise or
    both enterprises, such as during times of economic distress or market
    disruption.
        ``(c) Authority To Require Disposition or Acquisition.--The
    Director shall monitor the portfolio of each enterprise. Pursuant to
    subsection (a) and notwithstanding the capital classifications of the
    enterprises, the Director may, by order, require an enterprise, under
    such terms and conditions as the Director determines to be appropriate,
    to dispose of or acquire any asset, if the Director determines that
    such action is consistent with the purposes of this Act or any of the
    authorizing statutes.''.
        (b) Regulations.--Not later than the expiration of the 180-day
    period beginning on the effective date of this Act, the Director shall
    issue regulations pursuant to section 1369E(a) of the Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (as added by
    subsection (a) of this section) establishing the portfolio holdings
    standards under such section.

    SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.

        (a) In General.--Section 1361 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611) is amended
    to read as follows:

    ``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.

        ``(a) In General.--
                ``(1) Enterprises.--The Director shall, by regulation,
            establish risk-based capital requirements for the enterprises
            to ensure that the enterprises operate in a safe and sound
            manner, maintaining sufficient capital and reserves to support
            the risks that arise in the operations and management of the
            enterprises.
                ``(2) Federal home loan banks.--The Director shall
            establish risk-based capital standards under section 6 of the
            Federal Home Loan Bank Act for the Federal Home Loan Banks.
        ``(b) No Limitation.--Nothing in this section shall limit the
    authority of the Director to require other reports or undertakings, or
    take other action, in furtherance of the responsibilities of the
    Director under this Act.''.
        (b) Federal Home Loan Banks Risk-Based Capital.--Section 6(a)(3) of
    the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) is amended--
                (1) by striking subparagraph (A) and inserting the
            following:
                        ``(A) Risk-based capital standards.--The Director
                    shall, by regulation, establish risk-based capital
                    standards for the Federal Home Loan Banks to ensure
                    that the Federal Home Loan Banks operate in a safe and
                    sound manner, with sufficient permanent capital and
                    reserves to support the risks that arise in the
                    operations and management of the Federal Home Loans
                    Banks.''; and
                (2) in subparagraph (B), by striking ``(A)(ii)'' and
            inserting ``(A)''.

    SEC. 1111. MINIMUM CAPITAL LEVELS.

        Section 1362 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4612) is amended--
                (1) in subsection (a), by striking ``In General'' and
            inserting ``Enterprises''; and
                (2) by striking subsection (b) and inserting the following:
        ``(b) Federal Home Loan Banks.--For purposes of this subtitle, the
    minimum capital level for each Federal Home Loan Bank shall be the
    minimum capital required to be maintained to comply with the leverage
    requirement for the bank established under section 6(a)(2) of the
    Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
        ``(c) Establishment of Revised Minimum Capital Levels.--
    Notwithstanding subsections (a) and (b) and notwithstanding the capital
    classifications of the regulated entities, the Director may, by
    regulations issued under section 1319G, establish a minimum capital
    level for the enterprises, for the Federal Home Loan Banks, or for both
    the enterprises and the banks, that is higher than the level specified
    in subsection (a) for the enterprises or the level specified in
    subsection (b) for the Federal Home Loan Banks, to the extent needed to
    ensure that the regulated entities operate in a safe and sound manner.
        ``(d) Authority To Require Temporary Increase.--
                ``(1) In general.--Notwithstanding subsections (a) and (b)
            and any minimum capital level established pursuant to
            subsection (c), the Director may, by order, increase the
            minimum capital level for a regulated entity on a temporary
            basis, when the Director determines that such an increase is
            necessary and consistent with the prudential regulation and the
            safe and sound operations of a regulated entity.
                ``(2) Rescission.--The Director shall rescind any temporary
            minimum capital level established under paragraph (1) when the
            Director determines that the circumstances or facts no longer
            justify the temporary minimum capital level.
                ``(3) Regulations required.--The Director shall issue
            regulations establishing--
                        ``(A) standards for the imposition of a temporary
                    increase in minimum capital under paragraph (1);
                        ``(B) the standards and procedures that the
                    Director will use to make the determination referred to
                    in paragraph (2); and
                        ``(C) a reasonable time frame for periodic review
                    of any temporary increase in minimum capital for the
                    purpose of making the determination referred to in
                    paragraph (2).
        ``(e) Authority To Establish Additional Capital and Reserve
    Requirements for Particular Purposes.--The Director may, at any time by
    order or regulation, establish such capital or reserve requirements
    with respect to any product or activity of a regulated entity, as the
    Director considers appropriate to ensure that the regulated entity
    operates in a safe and sound manner, with sufficient capital and
    reserves to support the risks that arise in the operations and
    management of the regulated entity.
        ``(f) Periodic Review.--The Director shall periodically review the
    amount of core capital maintained by the enterprises, the amount of
    capital retained by the Federal Home Loan Banks, and the minimum
    capital levels established for such regulated entities pursuant to this
    section.''.

    SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by adding at the end the following:

    ``SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL HOME LOAN
                  MORTGAGE CORPORATION, FEDERAL HOME LOAN BANKS.

        ``(a) Federal National Mortgage Association and Federal Home Loan
    Mortgage Corporation.--No class of equity securities of the Federal
    National Mortgage Association or the Federal Home Loan Mortgage
    Corporation shall be treated as an exempted security for purposes of
    section 12, 13, 14, or 16.
        ``(b) Federal Home Loan Banks.--
                ``(1) Registration.--Each Federal Home Loan Bank shall
            register a class of its common stock under section 12(g), not
            later than 120 days after the date of enactment of the Federal
            Housing Finance Regulatory Reform Act of 2008, and shall
            thereafter maintain such registration and be treated for
            purposes of this title as an `issuer', the securities of which
            are required to be registered under section 12, regardless of
            the number of members holding such stock at any given time.
                ``(2) Standards relating to audit committees.--Each Federal
            Home Loan Bank shall comply with the rules issued by the
            Commission under section 10A(m).
        ``(c) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Federal home loan bank; member.--The terms `Federal
            Home Loan Bank' and `member', have the same meanings as in
            section 2 of the Federal Home Loan Bank Act.
                ``(2) Federal national mortgage association.--The term
            `Federal National Mortgage Association' means the corporation
            created by the Federal National Mortgage Association Charter
            Act.
                ``(3) Federal home loan mortgage corporation.--The term
            `Federal Home Loan Mortgage Corporation' means the corporation
            created by the Federal Home Loan Mortgage Corporation Act.''.

    SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

        (a) In General.--Section 1318 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518) is
    amended--
                (1) in the section heading, by striking ``of excessive''
            and inserting ``and withholding of executive'';
                (2) in subsection (a)--
                        (A) by striking ``enterprise'' and inserting
                    ``regulated entity''; and
                        (B) by striking ``enterprises'' and inserting
                    ``regulated entities'';
                (3) by redesignating subsection (b) as subsection (d); and
                (4) by inserting after subsection (a) the following:
        ``(b) Factors.--In making any determination under subsection (a),
    the Director may take into consideration any factors the Director
    considers relevant, including any wrongdoing on the part of the
    executive officer, and such wrongdoing shall include any fraudulent act
    or omission, breach of trust or fiduciary duty, violation of law, rule,
    regulation, order, or written agreement, and insider abuse with respect
    to the regulated entity. The approval of an agreement or contract
    pursuant to section 309(d)(3)(B) of the Federal National Mortgage
    Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2)
    of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
    1452(h)(2)) shall not preclude the Director from making any subsequent
    determination under subsection (a).
        ``(c) Withholding of Compensation.--In carrying out subsection (a),
    the Director may require a regulated entity to withhold any payment,
    transfer, or disbursement of compensation to an executive officer, or
    to place such compensation in an escrow account, during the review of
    the reasonableness and comparability of compensation.''.
        (b) Conforming Amendments.--
                (1) Fannie mae.--Section 309(d) of the Federal National
            Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is
            amended by adding at the end the following new paragraph:
        ``(4) Notwithstanding any other provision of this section, the
    corporation shall not transfer, disburse, or pay compensation to any
    executive officer, or enter into an agreement with such executive
    officer, without the approval of the Director, for matters being
    reviewed under section 1318 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
                (2) Freddie mac.--Section 303(h) of the Federal Home Loan
            Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by
            adding at the end the following new paragraph:
        ``(4) Notwithstanding any other provision of this section, the
    Corporation shall not transfer, disburse, or pay compensation to any
    executive officer, or enter into an agreement with such executive
    officer, without the approval of the Director, for matters being
    reviewed under section 1318 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
                (3) Federal home loan banks.--Section 7 of the Federal Home
            Loan Bank Act (12 U.S.C. 1427) is amended by adding at the end
            the following new subsection:
        ``(l) Withholding of Compensation.--Notwithstanding any other
    provision of this section, a Federal Home Loan Bank shall not transfer,
    disburse, or pay compensation to any executive officer, or enter into
    an agreement with such executive officer, without the approval of the
    Director, for matters being reviewed under section 1318 of the Federal
    Housing Enterprises Financial Safety and Soundness Act of 1992 (12
    U.S.C. 4518).''.

    SEC. 1114. LIMIT ON GOLDEN PARACHUTES.

        Section 1318 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the
    end the following:
        ``(e) Authority To Regulate or Prohibit Certain Forms of Benefits
    to Affiliated Parties.--
                ``(1) Golden parachutes and indemnification payments.--The
            Director may prohibit or limit, by regulation or order, any
            golden parachute payment or indemnification payment.
                ``(2) Factors to be taken into account.--The Director shall
            prescribe, by regulation, the factors to be considered by the
            Director in taking any action pursuant to paragraph (1), which
            may include such factors as--
                        ``(A) whether there is a reasonable basis to
                    believe that the affiliated party has committed any
                    fraudulent act or omission, breach of trust or
                    fiduciary duty, or insider abuse with regard to the
                    regulated entity that has had a material effect on the
                    financial condition of the regulated entity;
                        ``(B) whether there is a reasonable basis to
                    believe that the affiliated party is substantially
                    responsible for the insolvency of the regulated entity,
                    the appointment of a conservator or receiver for the
                    regulated entity, or the troubled condition of the
                    regulated entity (as defined in regulations prescribed
                    by the Director);
                        ``(C) whether there is a reasonable basis to
                    believe that the affiliated party has materially
                    violated any applicable provision of Federal or State
                    law or regulation that has had a material effect on the
                    financial condition of the regulated entity;
                        ``(D) whether the affiliated party was in a
                    position of managerial or fiduciary responsibility; and
                        ``(E) the length of time that the party was
                    affiliated with the regulated entity, and the degree to
                    which--
                                ``(i) the payment reasonably reflects
                            compensation earned over the period of
                            employment; and
                                ``(ii) the compensation involved represents
                            a reasonable payment for services rendered.
                ``(3) Certain payments prohibited.--No regulated entity may
            prepay the salary or any liability or legal expense of any
            affiliated party if such payment is made--
                        ``(A) in contemplation of the insolvency of such
                    regulated entity, or after the commission of an act of
                    insolvency; and
                        ``(B) with a view to, or having the result of--
                                ``(i) preventing the proper application of
                            the assets of the regulated entity to
                            creditors; or
                                ``(ii) preferring one creditor over
                            another.
                ``(4) Golden parachute payment defined.--
                        ``(A) In general.--For purposes of this subsection,
                    the term `golden parachute payment' means any payment
                    (or any agreement to make any payment) in the nature of
                    compensation by any regulated entity for the benefit of
                    any affiliated party pursuant to an obligation of such
                    regulated entity that--
                                ``(i) is contingent on the termination of
                            such party's affiliation with the regulated
                            entity; and
                                ``(ii) is received on or after the date on
                            which--
                                        ``(I) the regulated entity became
                                    insolvent;
                                        ``(II) any conservator or receiver
                                    is appointed for such regulated entity;
                                    or
                                        ``(III) the Director determines
                                    that the regulated entity is in a
                                    troubled condition (as defined in the
                                    regulations of the Director).
                        ``(B) Certain payments in contemplation of an
                    event.--Any payment which would be a golden parachute
                    payment but for the fact that such payment was made
                    before the date referred to in subparagraph (A)(ii)
                    shall be treated as a golden parachute payment if the
                    payment was made in contemplation of the occurrence of
                    an event described in any subclause of such
                    subparagraph.
                        ``(C) Certain payments not included.--For purposes
                    of this subsection, the term `golden parachute payment'
                    shall not include--
                                ``(i) any payment made pursuant to a
                            retirement plan which is qualified (or is
                            intended to be qualified) under section 401 of
                            the Internal Revenue Code of 1986, or other
                            nondiscriminatory benefit plan;
                                ``(ii) any payment made pursuant to a bona
                            fide deferred compensation plan or arrangement
                            which the Director determines, by regulation or
                            order, to be permissible; or
                                ``(iii) any payment made by reason of the
                            death or disability of an affiliated party.
                ``(5) Other definitions.--For purposes of this subsection,
            the following definitions shall apply:
                        ``(A) Indemnification payment.--Subject to
                    paragraph (6), the term `indemnification payment' means
                    any payment (or any agreement to make any payment) by
                    any regulated entity for the benefit of any person who
                    is or was an affiliated party, to pay or reimburse such
                    person for any liability or legal expense with regard
                    to any administrative proceeding or civil action
                    instituted by the Agency which results in a final order
                    under which such person--
                                ``(i) is assessed a civil money penalty;
                                ``(ii) is removed or prohibited from
                            participating in conduct of the affairs of the
                            regulated entity; or
                                ``(iii) is required to take any affirmative
                            action to correct certain conditions resulting
                            from violations or practices, by order of the
                            Director.
                        ``(B) Liability or legal expense.--The term
                    `liability or legal expense' means--
                                ``(i) any legal or other professional
                            expense incurred in connection with any claim,
                            proceeding, or action;
                                ``(ii) the amount of, and any cost incurred
                            in connection with, any settlement of any
                            claim, proceeding, or action; and
                                ``(iii) the amount of, and any cost
                            incurred in connection with, any judgment or
                            penalty imposed with respect to any claim,
                            proceeding, or action.
                        ``(C) Payment.--The term `payment' includes--
                                ``(i) any direct or indirect transfer of
                            any funds or any asset; and
                                ``(ii) any segregation of any funds or
                            assets for the purpose of making, or pursuant
                            to an agreement to make, any payment after the
                            date on which such funds or assets are
                            segregated, without regard to whether the
                            obligation to make such payment is contingent
                            on--
                                        ``(I) the determination, after such
                                    date, of the liability for the payment
                                    of such amount; or
                                        ``(II) the liquidation, after such
                                    date, of the amount of such payment.
                ``(6) Certain commercial insurance coverage not treated as
            covered benefit payment.--No provision of this subsection shall
            be construed as prohibiting any regulated entity from
            purchasing any commercial insurance policy or fidelity bond,
            except that, subject to any requirement described in paragraph
            (5)(A)(iii), such insurance policy or bond shall not cover any
            legal or liability expense of the regulated entity which is
            described in paragraph (5)(A).''.

    SEC. 1115. REPORTING OF FRAUDULENT LOANS.

        Part 1 of subtitle C of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), as amended
    by this Act, is amended by adding at the end the following:

    ``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.

        ``(a) Requirement to Report.--The Director shall require a
    regulated entity to submit to the Director a timely report upon
    discovery by the regulated entity that it has purchased or sold a
    fraudulent loan or financial instrument, or suspects a possible fraud
    relating to the purchase or sale of any loan or financial instrument.
    The Director shall require each regulated entity to establish and
    maintain procedures designed to discover any such transactions.
        ``(b) Protection From Liability for Reports.--Any regulated entity
    that, in good faith, makes a report pursuant to subsection (a), and any
    entity-affiliated party, that, in good faith, makes or requires another
    to make any such report, shall not be liable to any person under any
    provision of law or regulation, any constitution, law, or regulation of
    any State or political subdivision of any State, or under any contract
    or other legally enforceable agreement (including any arbitration
    agreement) for such report or for any failure to provide notice of such
    report to the person who is the subject of such report or any other
    persons identified in the report.''.

    SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY
                  WORKFORCE.

        Section 1319A of the Housing and Community Development Act of 1992
    (12 U.S.C. 4520) is amended--
                (1) in the section heading, by striking ``equal opportunity
            in solicitation of contracts'' and inserting ``minority and
            women inclusion; diversity requirements'';
                (2) in subsection (a), by striking ``(a) In General.--Each
            enterprise'' and inserting ``(e) Outreach.--Each regulated
            entity''; and
                (3) by striking subsection (b);
                (4) by inserting before subsection (e), as so redesignated
            by paragraph (2) of this section, the following new
            subsections:
        ``(a) Office of Minority and Women Inclusion.--Each regulated
    entity shall establish an Office of Minority and Women Inclusion, or
    designate an office of the entity, that shall be responsible for
    carrying out this section and all matters of the entity relating to
    diversity in management, employment, and business activities in
    accordance with such standards and requirements as the Director shall
    establish.
        ``(b) Inclusion in All Levels of Business Activities.--Each
    regulated entity shall develop and implement standards and procedures
    to ensure, to the maximum extent possible, the inclusion and
    utilization of minorities (as such term is defined in section 1204(c)
    of the Financial Institutions Reform, Recovery, and Enforcement Act of
    1989 (12 U.S.C. 1811 note)) and women, and minority- and women-owned
    businesses (as such terms are defined in section 21A(r)(4) of the
    Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial
    institutions, investment banking firms, mortgage banking firms, asset
    management firms, broker-dealers, financial services firms,
    underwriters, accountants, brokers, investment consultants, and
    providers of legal services) in all business and activities of the
    regulated entity at all levels, including in procurement, insurance,
    and all types of contracts (including contracts for the issuance or
    guarantee of any debt, equity, or mortgage-related securities, the
    management of its mortgage and securities portfolios, the making of its
    equity investments, the purchase, sale and servicing of single- and
    multi-family mortgage loans, and the implementation of its affordable
    housing program and initiatives). The processes established by each
    regulated entity for review and evaluation for contract proposals and
    to hire service providers shall include a component that gives
    consideration to the diversity of the applicant.
        ``(c) Applicability.--This section shall apply to all contracts of
    a regulated entity for services of any kind, including services that
    require the services of investment banking, asset management entities,
    broker-dealers, financial services entities, underwriters, accountants,
    investment consultants, and providers of legal services.
        ``(d) Inclusion in Annual Reports.--Each regulated entity shall
    include, in the annual report submitted by the entity to the Director
    pursuant to section 309(k) of the Federal National Mortgage Association
    Charter Act (12 U.S.C. 1723a(k)), section 307(c) of the Federal Home
    Loan Mortgage Corporation Act (12 U.S.C. 1456(c)), and section 20 of
    the Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable,
    detailed information describing the actions taken by the entity
    pursuant to this section, which shall include a statement of the total
    amounts paid by the entity to third party contractors since the last
    such report and the percentage of such amounts paid to businesses
    described in subsection (b) of this section.''; and
                (5) by adding at the end the following new subsection:
        ``(f) Diversity in Agency Workforce.--The Agency shall take
    affirmative steps to seek diversity in its workforce at all levels of
    the agency consistent with the demographic diversity of the United
    States, which shall include--
                ``(1) heavily recruiting at historically Black colleges and
            universities, Hispanic-serving institutions, women's colleges,
            and colleges that typically serve majority minority
            populations;
                ``(2) sponsoring and recruiting at job fairs in urban
            communities, and placing employment advertisements in
            newspapers and magazines oriented toward women and people of
            color;
                ``(3) partnering with organizations that are focused on
            developing opportunities for minorities and women to place
            talented young minorities and women in industry internships,
            summer employment, and full-time positions; and
                ``(4) where feasible, partnering with inner-city high
            schools, girls' high schools, and high schools with majority
            minority populations to establish or enhance financial literacy
            programs and provide mentoring.''.

    SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED
                  ENTITIES BY SECRETARY OF TREASURY.

        (a) Fannie Mae.--Section 304 of the Federal National Mortgage
    Association Charter Act (12 U.S.C. 1719) is amended by adding at the
    end the following new subsection:
        ``(g) Temporary Authority of Treasury to Purchase Obligations and
    Securities; Conditions.--
                ``(1) Authority to purchase.--
                        ``(A) General authority.--In addition to the
                    authority under subsection (c) of this section, the
                    Secretary of the Treasury is authorized to purchase any
                    obligations and other securities issued by the
                    corporation under any section of this Act, on such
                    terms and conditions as the Secretary may determine and
                    in such amounts as the Secretary may determine. Nothing
                    in this subsection requires the corporation to issue
                    obligations or securities to the Secretary without
                    mutual agreement between the Secretary and the
                    corporation. Nothing in this subsection permits or
                    authorizes the Secretary, without the agreement of the
                    corporation, to engage in open market purchases of the
                    common securities of the corporation.
                        ``(B) Emergency determination required.--In
                    connection with any use of this authority, the
                    Secretary must determine that such actions are
                    necessary to--
                                ``(i) provide stability to the financial
                            markets;
                                ``(ii) prevent disruptions in the
                            availability of mortgage finance; and
                                ``(iii) protect the taxpayer.
                        ``(C) Considerations.--To protect the taxpayers,
                    the Secretary of the Treasury shall take into
                    consideration the following in connection with
                    exercising the authority contained in this paragraph:
                                ``(i) The need for preferences or
                            priorities regarding payments to the
                            Government.
                                ``(ii) Limits on maturity or disposition of
                            obligations or securities to be purchased.
                                ``(iii) The corporation's plan for the
                            orderly resumption of private market funding or
                            capital market access.
                                ``(iv) The probability of the corporation
                            fulfilling the terms of any such obligation or
                            other security, including repayment.
                                ``(v) The need to maintain the
                            corporation's status as a private shareholder-
                            owned company.
                                ``(vi) Restrictions on the use of
                            corporation resources, including limitations on
                            the payment of dividends and executive
                            compensation and any such other terms and
                            conditions as appropriate for those purposes.
                        ``(D) Reports to congress.--Upon exercise of this
                    authority, the Secretary shall report to the Committees
                    on the Budget, Financial Services, and Ways and Means
                    of the House of Representatives and the Committees on
                    the Budget, Finance, and Banking, Housing, and Urban
                    Affairs of the Senate as to the necessity for the
                    purchase and the determinations made by the Secretary
                    under subparagraph (B) and with respect to the
                    considerations required under subparagraph (C), and the
                    size, terms, and probability of repayment or
                    fulfillment of other terms of such purchase.
                ``(2) Rights; sale of obligations and securities.--
                        ``(A) Exercise of rights.--The Secretary of the
                    Treasury may, at any time, exercise any rights received
                    in connection with such purchases.
                        ``(B) Sale of obligation and securities.--The
                    Secretary of the Treasury may, at any time, subject to
                    the terms of the security or otherwise upon terms and
                    conditions and at prices determined by the Secretary,
                    sell any obligation or security acquired by the
                    Secretary under this subsection.
                        ``(C) Application of sunset to purchased
                    obligations or securities.--The authority of the
                    Secretary of the Treasury to hold, exercise any rights
                    received in connection with, or sell, any obligations
                    or securities purchased is not subject to the
                    provisions of paragraph (4).
                ``(3) Funding.--For the purpose of the authorities granted
            in this subsection, the Secretary of the Treasury may use the
            proceeds of the sale of any securities issued under chapter 31
            of Title 31, and the purposes for which securities may be
            issued under chapter 31 of Title 31 are extended to include
            such purchases and the exercise of any rights in connection
            with such purchases. Any funds expended for the purchase of, or
            modifications to, obligations and securities, or the exercise
            of any rights received in connection with such purchases under
            this subsection shall be deemed appropriated at the time of
            such purchase, modification, or exercise.
                ``(4) Termination of authority.--The authority under this
            subsection (g), with the exception of paragraphs (2) and (3) of
            this subsection, shall expire December 31, 2009.
                ``(5) Authority of the director with respect to executive
            compensation.--The Director shall have the power to approve,
            disapprove, or modify the executive compensation of the
            corporation, as defined under Regulation S-K, 17 C.F.R. 229.''.
        (b) Freddie Mac.--Section 306 of the Federal Home Loan Mortgage
    Corporation Act (12 U.S.C. 1455) is amended by adding at the end the
    following new subsection:
        ``(l) Temporary Authority of Treasury to Purchase Obligations and
    Securities; Conditions.--
                ``(1) Authority to purchase.--
                        ``(A) General authority.--In addition to the
                    authority under subsection (c) of this section, the
                    Secretary of the Treasury is authorized to purchase any
                    obligations and other securities issued by the
                    Corporation under any section of this Act, on such
                    terms and conditions as the Secretary may determine and
                    in such amounts as the Secretary may determine. Nothing
                    in this subsection requires the Corporation to issue
                    obligations or securities to the Secretary without
                    mutual agreement between the Secretary and the
                    Corporation. Nothing in this subsection permits or
                    authorizes the Secretary, without the agreement of the
                    Corporation, to engage in open market purchases of the
                    common securities of the Corporation.
                        ``(B) Emergency determination required.--In
                    connection with any use of this authority, the
                    Secretary must determine that such actions are
                    necessary to--
                                ``(i) provide stability to the financial
                            markets;
                                ``(ii) prevent disruptions in the
                            availability of mortgage finance; and
                                ``(iii) protect the taxpayer.
                        ``(C) Considerations.--To protect the taxpayers,
                    the Secretary of the Treasury shall take into
                    consideration the following in connection with
                    exercising the authority contained in this paragraph:
                                ``(i) The need for preferences or
                            priorities regarding payments to the
                            Government.
                                ``(ii) Limits on maturity or disposition of
                            obligations or securities to be purchased.
                                ``(iii) The Corporation's plan for the
                            orderly resumption of private market funding or
                            capital market access.
                                ``(iv) The probability of the Corporation
                            fulfilling the terms of any such obligation or
                            other security, including repayment.
                                ``(v) The need to maintain the
                            Corporation's status as a private shareholder-
                            owned company.
                                ``(vi) Restrictions on the use of
                            Corporation resources, including limitations on
                            the payment of dividends and executive
                            compensation and any such other terms and
                            conditions as appropriate for those purposes.
                        ``(D) Reports to congress.--Upon exercise of this
                    authority, the Secretary shall report to the Committees
                    on the Budget, Financial Services, and Ways and Means
                    of the House of Representatives and the Committees on
                    the Budget, Finance, and Banking, Housing, and Urban
                    Affairs of the Senate as to the necessity for the
                    purchase and the determinations made by the Secretary
                    under subparagraph (B) and with respect to the
                    considerations required under subparagraph (C), and the
                    size, terms, and probability of repayment or
                    fulfillment of other terms of such purchase.
                ``(2) Rights; sale of obligations and securities.--
                        ``(A) Exercise of rights.--The Secretary of the
                    Treasury may, at any time, exercise any rights received
                    in connection with such purchases.
                        ``(B) Sale of obligation and securities.--The
                    Secretary of the Treasury may, at any time, subject to
                    the terms of the security or otherwise upon terms and
                    conditions and at prices determined by the Secretary,
                    sell any obligation or security acquired by the
                    Secretary under this subsection.
                        ``(C) Application of sunset to purchased
                    obligations or securities.--The authority of the
                    Secretary of the Treasury to hold, exercise any rights
                    received in connection with, or sell, any obligations
                    or securities purchased is not subject to the
                    provisions of paragraph (4).
                ``(3) Funding.--For the purpose of the authorities granted
            in this subsection, the Secretary of the Treasury may use the
            proceeds of the sale of any securities issued under chapter 31
            of Title 31, and the purposes for which securities may be
            issued under chapter 31 of Title 31 are extended to include
            such purchases and the exercise of any rights in connection
            with such purchases. Any funds expended for the purchase of, or
            modifications to, obligations and securities, or the exercise
            of any rights received in connection with such purchases under
            this subsection shall be deemed appropriated at the time of
            such purchase, modification, or exercise.
                ``(4) Termination of authority.--The authority under this
            subsection (l), with the exception of paragraphs (2) and (3) of
            this subsection, shall expire December 31, 2009.
                ``(5) Authority of the director with respect to executive
            compensation.--The Director shall have the power to approve,
            disapprove, or modify the executive compensation of the
            Corporation, as defined under Regulation S-K, 17 C.F.R. 229.''.
        (c) Federal Home Loan Banks.--Section 11 of the Federal Home Loan
    Bank Act (12 U.S.C. 1431) is amended by adding at the end the following
    new subsection:
        ``(l) Temporary Authority of Treasury to Purchase Obligations;
    Conditions.--
                ``(1) Authority to purchase.--
                        ``(A) General authority.--In addition to the
                    authority under subsection (i) of this section, the
                    Secretary of the Treasury is authorized to purchase any
                    obligations issued by any Federal Home Loan Bank under
                    any section of this Act, on such terms and conditions
                    as the Secretary may determine and in such amounts as
                    the Secretary may determine. Nothing in this subsection
                    requires a Federal Home Loan Bank to issue obligations
                    or securities to the Secretary without mutual agreement
                    between the Secretary and the Federal Home Loan Bank.
                    Nothing in this subsection permits or authorizes the
                    Secretary, without the agreement of the Federal Home
                    Loan Bank, to engage in open market purchases of the
                    common securities of any Federal Home Loan Bank.
                        ``(B) Emergency determination required.--In
                    connection with any use of this authority, the
                    Secretary must determine that such actions are
                    necessary to--
                                ``(i) provide stability to the financial
                            markets;
                                ``(ii) prevent disruptions in the
                            availability of mortgage finance; and
                                ``(iii) protect the taxpayer.
                        ``(C) Considerations.--To protect the taxpayers,
                    the Secretary of the Treasury shall take into
                    consideration the following in connection with
                    exercising the authority contained in this paragraph:
                                ``(i) The need for preferences or
                            priorities regarding payments to the
                            Government.
                                ``(ii) Limits on maturity or disposition of
                            obligations or securities to be purchased.
                                ``(iii) The Federal Home Loan Bank's plan
                            for the orderly resumption of private market
                            funding or capital market access.
                                ``(iv) The probability of the Federal Home
                            Loan Bank fulfilling the terms of any such
                            obligation or other security, including
                            repayment.
                                ``(v) The need to maintain the Federal Home
                            Loan Bank's status as a private shareholder-
                            owned company.
                                ``(vi) Restrictions on the use of Federal
                            Home Loan Bank resources, including limitations
                            on the payment of dividends and executive
                            compensation and any such other terms and
                            conditions as appropriate for those purposes.
                        ``(D) Reports to congress.--Upon exercise of this
                    authority, the Secretary shall report to the Committees
                    on the Budget, Financial Services, and Ways and Means
                    of the House of Representatives and the Committees on
                    the Budget, Finance, and Banking, Housing, and Urban
                    Affairs of the Senate as to the necessity for the
                    purchase and the determinations made by the Secretary
                    under subparagraph (B) and with respect to the
                    considerations required under subparagraph (C), and the
                    size, terms, and probability of repayment or
                    fulfillment of other terms of such purchase.
                ``(2) Rights; sale of obligations and securities.--
                        ``(A) Exercise of rights.--The Secretary of the
                    Treasury may, at any time, exercise any rights received
                    in connection with such purchases.
                        ``(B) Sale of obligations.--The Secretary of the
                    Treasury may, at any time, subject to the terms of the
                    security or otherwise upon terms and conditions and at
                    prices determined by the Secretary, sell any obligation
                    acquired by the Secretary under this subsection.
                        ``(C) Application of sunset to purchased
                    obligations.--The authority of the Secretary of the
                    Treasury to hold, exercise any rights received in
                    connection with, or sell, any obligations purchased is
                    not subject to the provisions of paragraph (4).
                ``(3) Funding.--For the purpose of the authorities granted
            in this subsection, the Secretary of the Treasury may use the
            proceeds of the sale of any securities issued under chapter 31
            of Title 31, and the purposes for which securities may be
            issued under chapter 31 of Title 31 are extended to include
            such purchases and the exercise of any rights in connection
            with such purchases. Any funds expended for the purchase of, or
            modifications to, obligations and securities, or the exercise
            of any rights received in connection with such purchases under
            this subsection shall be deemed appropriated at the time of
            such purchase, modification, or exercise.
                ``(4) Termination of authority.--The authority under this
            subsection (l), with the exception of paragraphs (2) and (3) of
            this subsection, shall expire December 31, 2009.
                ``(5) Authority of the director with respect to executive
            compensation.--The Director shall have the power to approve,
            disapprove, or modify the executive compensation of the Federal
            Home Loan Bank, as defined under Regulation S-K, 17 C.F.R.
            229.''.

    SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL HOUSING
                  FINANCE AGENCY AND THE BOARD OF GOVERNORS OF THE FEDERAL
                  RESERVE SYSTEM TO ENSURE FINANCIAL MARKET STABILITY .

        Subsection (a) of section 1313 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513), as amended
    by the preceding provisions of this Act, is further amended by adding
    at the end the following new paragraph:
                ``(3) Coordination with the chairman of the board of
            governors of the federal reserve system.--
                        ``(A) Consultation.-- The Director shall consult
                    with, and consider the views of, the Chairman of the
                    Board of Governors of the Federal Reserve System, with
                    respect to the risks posed by the regulated entities to
                    the financial system, prior to issuing any proposed or
                    final regulations, orders, and guidelines with respect
                    to the exercise of the additional authority provided in
                    this Act regarding prudential management and operations
                    standards, safe and sound operations of, and capital
                    requirements and portfolio standards applicable to the
                    regulated entities (as such term is defined in section
                    1303). The Director also shall consult with the
                    Chairman regarding any decision to place a regulated
                    entity into conservatorship or receivership.
                        ``(B) Information sharing.--To facilitate the
                    consultative process, the Director shall share
                    information with the Board of Governors of the Federal
                    Reserve System on a regular, periodic basis as
                    determined by the Director and the Board regarding the
                    capital, asset and liabilities, financial condition,
                    and risk management practices of the regulated entities
                    as well as any information related to financial market
                    stability.
                        ``(C) Termination of consultation requirement.--The
                    requirement of the Director to consult with the Board
                    of Governors of the Federal Reserve System under this
                    paragraph shall expire at the conclusion of December
                    31, 2009.''.

                 Subtitle B--Improvement of Mission Supervision

    SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL OVERSIGHT.

        Part 2 of subtitle A of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
                (1) by striking the heading for the part and inserting the
            following:

              ``PART 2--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';

                and
                (2) by striking sections 1321 and 1322.

    SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD
                  RESPONSIBILITIES.

        (a) In General.--Part 2 of subtitle A of the Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541
    et seq.) is amended--
                (1) by striking ``Secretary'' each place that term appears
            and inserting ``Director'' in each of sections 1323, 1326,
            1327, 1328, and 1336; and
                (2) by striking sections 1338 and 1349 (12 U.S.C. 4562 note
            and 4589).
        (b) Retention of Fair Housing Responsibilities.--Section 1325 of
    the Federal Housing Enterprises Financial Safety and Soundness Act of
    1992 (12 U.S.C. 4545) is amended in the matter preceding paragraph (1),
    by inserting ``of Housing and Urban Development'' after ``The
    Secretary''.

    SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.

        Part 2 of subtitle A of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended by
    inserting before section 1323 the following:

    ``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.

        ``(a) In General.--The Director shall require each enterprise to
    obtain the approval of the Director for any product of the enterprise
    before initially offering the product.
        ``(b) Standard for Approval.--In considering any request for
    approval of a product pursuant to subsection (a), the Director shall
    make a determination that--
                ``(1) in the case of a product of the Federal National
            Mortgage Association, the product is authorized under paragraph
            (2), (3), (4), or (5) of section 302(b) or section 304 of the
            Federal National Mortgage Association Charter Act (12 U.S.C.
            1717(b), 1719);
                ``(2) in the case of a product of the Federal Home Loan
            Mortgage Corporation, the product is authorized under paragraph
            (1), (4), or (5) of section 305(a) of the Federal Home Loan
            Mortgage Corporation Act (12 U.S.C. 1454(a));
                ``(3) the product is in the public interest; and
                ``(4) the product is consistent with the safety and
            soundness of the enterprise or the mortgage finance system.
        ``(c) Procedure for Approval.--
                ``(1) Submission of request.--An enterprise shall submit to
            the Director a written request for approval of a product that
            describes the product in such form as prescribed by order or
            regulation of the Director.
                ``(2) Request for public comment.--Immediately upon receipt
            of a request for approval of a product, as required under
            paragraph (1), the Director shall publish notice of such
            request and of the period for public comment pursuant to
            paragraph (3) regarding the product, and a description of the
            product proposed by the request. The Director shall give
            interested parties the opportunity to respond in writing to the
            proposed product.
                ``(3) Public comment period.--During the 30-day period
            beginning on the date of publication pursuant to paragraph (2)
            of a request for approval of a product, the Director shall
            receive public comments regarding the proposed product.
                ``(4) Offering of product.--
                        ``(A) In general.--Not later than 30 days after the
                    close of the public comment period described in
                    paragraph (3), the Director shall approve or deny the
                    product, specifying the grounds for such decision in
                    writing.
                        ``(B) Failure to act.--If the Director fails to act
                    within the 30-day period described in subparagraph (A),
                    then the enterprise may offer the product.
                        ``(C) Temporary approval.--The Director may,
                    subject to the rules of the Director, provide for
                    temporary approval of the offering of a product without
                    a public comment period, if the Director finds that the
                    existence of exigent circumstances makes such delay
                    contrary to the public interest.
        ``(d) Conditional Approval.--If the Director approves the offering
    of any product by an enterprise, the Director may establish terms,
    conditions, or limitations with respect to such product with which the
    enterprise must comply in order to offer such product.
        ``(e) Exclusions.--
                ``(1) In general.--The requirements of subsections (a)
            through (d) do not apply with respect to--
                        ``(A) the automated loan underwriting system of an
                    enterprise in existence as of the date of enactment of
                    the Federal Housing Finance Regulatory Reform Act of
                    2008, including any upgrade to the technology,
                    operating system, or software to operate the
                    underwriting system;
                        ``(B) any modification to the mortgage terms and
                    conditions or mortgage underwriting criteria relating
                    to the mortgages that are purchased or guaranteed by an
                    enterprise, provided that such modifications do not
                    alter the underlying transaction so as to include
                    services or financing, other than residential mortgage
                    financing; or
                        ``(C) any other activity that is substantially
                    similar, as determined by rule of the Director to--
                                ``(i) the activities described in
                            subparagraphs (A) and (B); and
                                ``(ii) other activities that have been
                            approved by the Director in accordance with
                            this section.
                ``(2) Expedited review.--
                        ``(A) Enterprise notice.--For any new activity that
                    an enterprise considers not to be a product, the
                    enterprise shall provide written notice to the Director
                    of such activity, and may not commence such activity
                    until the date of receipt of a notice under
                    subparagraph (B) or the expiration of the period
                    described in subparagraph (C). The Director shall
                    establish, by regulation, the form and content of such
                    written notice.
                        ``(B) Director determination.--Not later than 15
                    days after the date of receipt of a notice under
                    subparagraph (A), the Director shall determine whether
                    such activity is a product subject to approval under
                    this section. The Director shall, immediately upon so
                    determining, notify the enterprise.
                        ``(C) Failure to act.--If the Director fails to
                    determine whether such activity is a product within the
                    15-day period described in subparagraph (B), the
                    enterprise may commence the new activity in accordance
                    with subparagraph (A).
        ``(f) No Limitation.--Nothing in this section may be construed to
    restrict--
                ``(1) the safety and soundness authority of the Director
            over all new and existing products or activities; or
                ``(2) the authority of the Director to review all new and
            existing products or activities to determine that such products
            or activities are consistent with the statutory mission of an
            enterprise.''.

    SEC. 1124. CONFORMING LOAN LIMITS.

        (a) Fannie Mae.--
                (1) General limit.--Section 302(b)(2) of the Federal
            National Mortgage Association Charter Act (12 U.S.C.
            1717(b)(2)) is amended by striking the 7th and 8th sentences
            and inserting the following new sentences: ``Such limitations
            shall not exceed $417,000 for a mortgage secured by a single-
            family residence, $533,850 for a mortgage secured by a 2-family
            residence, $645,300 for a mortgage secured by a 3-family
            residence, and $801,950 for a mortgage secured by a 4-family
            residence, except that such maximum limitations shall be
            adjusted effective January 1 of each year beginning after the
            effective date of the Federal Housing Finance Regulatory Reform
            Act of 2008, subject to the limitations in this paragraph. Each
            adjustment shall be made by adding to each such amount (as it
            may have been previously adjusted) a percentage thereof equal
            to the percentage increase, during the most recent 12-month or
            4-quarter period ending before the time of determining such
            annual adjustment, in the housing price index maintained by the
            Director of the Federal Housing Finance Agency (pursuant to
            section 1322 of the Federal Housing Enterprises Financial
            Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the
            change in such house price index during the most recent 12-
            month or 4-quarter period ending before the time of determining
            such annual adjustment is a decrease, then no adjustment shall
            be made for the next year, and the next adjustment shall take
            into account prior declines in the house price index, so that
            any adjustment shall reflect the net change in the house price
            index since the last adjustment. Declines in the house price
            index shall be accumulated and then reduce increases until
            subsequent increases exceed prior declines.''.
                (2) High-cost area limit.--Section 302(b)(2) of the Federal
            National Mortgage Association Charter Act (12 U.S.C.
            1717(b)(2)) is amended by adding after the period at the end
            the following: ``Such foregoing limitations shall also be
            increased, with respect to properties of a particular size
            located in any area for which 115 percent of the median house
            price for such size residence exceeds the foregoing limitation
            for such size residence, to the lesser of 150 percent of such
            limitation for such size residence or the amount that is equal
            to 115 percent of the median house price in such area for such
            size residence.''.
                (3) Effective date.--The amendments made by paragraphs (1)
            and (2) of this subsection shall take effect upon the
            expiration of the date described in section 201(a) of the
            Economic Stimulus Act of 2008 (Public Law 110-185).
        (b) Freddie Mac.--
                (1) General limit.--Section 305(a)(2) of the Federal Home
            Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended
            by striking the 6th and 7th sentences and inserting the
            following new sentences: ``Such limitations shall not exceed
            $417,000 for a mortgage secured by a single-family residence,
            $533,850 for a mortgage secured by a 2-family residence,
            $645,300 for a mortgage secured by a 3-family residence, and
            $801,950 for a mortgage secured by a 4-family residence, except
            that such maximum limitations shall be adjusted effective
            January 1 of each year beginning after the effective date of
            the Federal Housing Finance Regulatory Reform Act of 2008,
            subject to the limitations in this paragraph. Each adjustment
            shall be made by adding to each such amount (as it may have
            been previously adjusted) a percentage thereof equal to the
            percentage increase, during the most recent 12-month or 4-
            quarter period ending before the time of determining such
            annual adjustment, in the housing price index maintained by the
            Director of the Federal Housing Finance Agency (pursuant to
            section 1322 of the Federal Housing Enterprises Financial
            Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the
            change in such house price index during the most recent 12-
            month or 4-quarter period ending before the time of determining
            such annual adjustment is a decrease, then no adjustment shall
            be made for the next year, and the next adjustment shall take
            into account prior declines in the house price index, so that
            any adjustment shall reflect the net change in the house price
            index since the last adjustment. Declines in the house price
            index shall be accumulated and then reduce increases until
            subsequent increases exceed prior declines.''.
                (2) High-cost area limit.--Section 305(a)(2) of the Federal
            Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is
            amended by adding after the period at the end the following:
            ``Such foregoing limitations shall also be increased, with
            respect to properties of a particular size located in any area
            for which 115 percent of the median house price for such size
            residence exceeds the foregoing limitation for such size
            residence, to the lesser of 150 percent of such limitation for
            such size residence or the amount that is equal to 115 percent
            of the median house price in such area for such size
            residence.''.
                (3) Effective date.--The amendments made by paragraphs (1)
            and (2) of this subsection shall take effect upon the
            expiration of the date described in section 201(a) of the
            Economic Stimulus Act of 2008 (Public Law 110-185).
        (c) Sense of Congress.--It is the sense of the Congress that the
    securitization of mortgages by the Federal National Mortgage
    Association and the Federal Home Loan Mortgage Corporation plays an
    important role in providing liquidity to the United States housing
    markets. Therefore, the Congress encourages the Federal National
    Mortgage Association and the Federal Home Loan Mortgage Corporation to
    securitize mortgages acquired under the increased conforming loan
    limits established under this Act.
        (d) Housing Price Index.--Part 2 of subtitle A of the Federal
    Housing Enterprises Financial Safety and Soundness Act of 1992 (12
    U.S.C. 4541 et seq.) is amended by inserting after section 1321 (as
    added by section 1123 of this Act) the following new section:

    ``SEC. 1322. HOUSING PRICE INDEX.

        ``The Director shall establish and maintain a method of assessing
    the national average 1-family house price for use for adjusting the
    conforming loan limitations of the enterprises. In establishing such
    method, the Director shall take into consideration the monthly survey
    of all major lenders conducted by the Federal Housing Finance Agency to
    determine the national average 1-family house price, the House Price
    Index maintained by the Office of Federal Housing Enterprise Oversight
    of the Department of Housing and Urban Development before the effective
    date of the Federal Housing Finance Regulatory Reform Act of 2008, any
    appropriate house price indexes of the Bureau of the Census of the
    Department of Commerce, and any other indexes or measures that the
    Director considers appropriate.''.

    SEC. 1125. ANNUAL HOUSING REPORT.

        (a) Repeal.--Section 1324 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4544) is hereby
    repealed.
        (b) Annual Housing Report.--The Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 is amended by inserting
    after section 1323 the following:

    ``SEC. 1324. ANNUAL HOUSING REPORT.

        ``(a) In General.--After reviewing and analyzing the reports
    submitted under section 309(n) of the Federal National Mortgage
    Association Charter Act and section 307(f) of the Federal Home Loan
    Mortgage Corporation Act, the Director shall submit a report, not later
    than October 30 of each year, to the Committee on Banking, Housing, and
    Urban Affairs of the Senate and the Committee on Financial Services of
    the House of Representatives, on the activities of each enterprise.
        ``(b) Contents.--The report required under subsection (a) shall--
                ``(1) discuss--
                        ``(A) the extent to and manner in which--
                                ``(i) each enterprise is achieving the
                            annual housing goals established under subpart
                            B;
                                ``(ii) each enterprise is complying with
                            its duty to serve underserved markets, as
                            established under section 1335;
                                ``(iii) each enterprise is complying with
                            section 1337;
                                ``(iv) each enterprise received credit
                            towards achieving each of its goals resulting
                            from a transaction or activity pursuant to
                            section 1331(b)(2); and
                                ``(v) each enterprise is achieving the
                            purposes of the enterprise established by law;
                            and
                        ``(B) the actions that each enterprise could
                    undertake to promote and expand the purposes of the
                    enterprise;
                ``(2) aggregate and analyze relevant data on income to
            assess the compliance of each enterprise with the housing goals
            established under subpart B;
                ``(3) aggregate and analyze data on income, race, and
            gender by census tract and other relevant classifications, and
            compare such data with larger demographic, housing, and
            economic trends;
                ``(4) identify the extent to which each enterprise is
            involved in mortgage purchases and secondary market activities
            involving subprime and nontraditional loans;
                ``(5) compare the characteristics of subprime and
            nontraditional loans both purchased and securitized by each
            enterprise to other loans purchased and securitized by each
            enterprise; and
                ``(6) compare the characteristics of high-cost loans
            purchased and securitized, where such securities are not held
            on portfolio to loans purchased and securitized, where such
            securities are either retained on portfolio or repurchased by
            the enterprise, including such characteristics as--
                        ``(A) the purchase price of the property that
                    secures the mortgage;
                        ``(B) the loan-to-value ratio of the mortgage,
                    which shall reflect any secondary liens on the relevant
                    property;
                        ``(C) the terms of the mortgage;
                        ``(D) the creditworthiness of the borrower; and
                        ``(E) any other relevant data, as determined by the
                    Director.
        ``(c) Data Collection and Reporting.--
                ``(1) In general.--To assist the Director in analyzing the
            matters described in subsection (b), the Director shall
            conduct, on a monthly basis, a survey of mortgage markets in
            accordance with this subsection.
                ``(2) Data points.--Each monthly survey conducted by the
            Director under paragraph (1) shall collect data on--
                        ``(A) the characteristics of individual mortgages
                    that are eligible for purchase by the enterprises and
                    the characteristics of individual mortgages that are
                    not eligible for purchase by the enterprises including,
                    in both cases, information concerning--
                                ``(i) the price of the house that secures
                            the mortgage;
                                ``(ii) the loan-to-value ratio of the
                            mortgage, which shall reflect any secondary
                            liens on the relevant property;
                                ``(iii) the terms of the mortgage;
                                ``(iv) the creditworthiness of the borrower
                            or borrowers; and
                                ``(v) whether the mortgage, in the case of
                            a conforming mortgage, was purchased by an
                            enterprise;
                        ``(B) the characteristics of individual subprime
                    and nontraditional mortgages that are eligible for
                    purchase by the enterprises and the characteristics of
                    borrowers under such mortgages, including the
                    creditworthiness of such borrowers and determination
                    whether such borrowers would qualify for prime lending;
                    and
                        ``(C) such other matters as the Director determines
                    to be appropriate.
                ``(3) Public availability.--The Director shall make any
            data collected by the Director in connection with the conduct
            of a monthly survey available to the public in a timely manner,
            provided that the Director may modify the data released to the
            public to ensure that the data--
                        ``(A) is not released in an identifiable form; and
                        ``(B) is not otherwise obtainable from other
                    publicly available data sets.
                ``(4) Definition.--For purposes of this subsection, the
            term `identifiable form' means any representation of
            information that permits the identity of a borrower to which
            the information relates to be reasonably inferred by either
            direct or indirect means.''.

    SEC. 1126. PUBLIC USE DATABASE.

        Section 1323 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (42 U.S.C. 4543) is amended--
                (1) in subsection (a)--
                        (A) by striking ``(a) In General.--The Secretary''
                    and inserting the following:
        ``(a) Availability.--
                ``(1) In general.--The Director''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(2) Census tract level reporting.--Such data shall
            include the data elements required to be reported under the
            Home Mortgage Disclosure Act of 1975, at the census tract
            level.'';
                (2) in subsection (b)(2), by inserting before the period at
            the end the following: ``or with subsection (a)(2)''; and
                (3) by adding at the end the following new subsection:
        ``(d) Timing.--Data submitted under this section by an enterprise
    in connection with a provision referred to in subsection (a) shall be
    made publicly available in accordance with this section not later than
    September 30 of the year following the year to which the data
    relates.''.

    SEC. 1127. REPORTING OF MORTGAGE DATA.

        Section 1326 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4546) is amended--
                (1) in subsection (a), by striking ``The Director'' and
            inserting ``Subject to subsection (d), the Director''; and
                (2) by adding at the end the following:
        ``(d) Mortgage Information.--Subject to privacy considerations, as
    described in section 304(j) of the Home Mortgage Disclosure Act of 1975
    (12 U.S.C. 2803(j)), the Director shall, by regulation or order,
    provide that certain information relating to single family mortgage
    data of the enterprises shall be disclosed to the public, in order to
    make available to the public--
                ``(1) the same data from the enterprises that is required
            of insured depository institutions under the Home Mortgage
            Disclosure Act of 1975; and
                ``(2) information collected by the Director under section
            1324(b)(6).''.

    SEC. 1128. REVISION OF HOUSING GOALS.

        (a) Repeal.--Sections 1331 through 1334 of the Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4561
    through 4564) are hereby repealed.
        (b) Housing Goals.--The Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 is amended by inserting before section
    1335 the following:

    ``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

        ``(a) In General.--The Director shall, by regulation, establish
    effective for 2010 and each year thereafter, annual housing goals, with
    respect to the mortgage purchases by the enterprises, as follows:
                ``(1) Single-family housing goals.--Four single-family
            housing goals under section 1332.
                ``(2) Multifamily special affordable housing goal.--One
            multifamily special affordable housing goal under section 1333.
        ``(b) Timing.--The Director shall, by regulation, establish an
    annual deadline by which the Director shall establish the annual
    housing goals under this subpart for each year, taking into
    consideration the need for the enterprises to reasonably and
    sufficiently plan their operations and activities in advance, including
    operations and activities necessary to meet such annual goals.
        ``(c) Transition.--The annual housing goals effective for 2008
    pursuant to this subpart, as in effect before the enactment of the
    Federal Housing Finance Regulatory Reform Act of 2008, shall remain in
    effect for 2009, except that not later than the expiration of the 270-
    day period beginning on the date of the enactment of such Act, the
    Director shall review such goals applicable for 2009 to determine the
    feasibility of such goals given the market conditions current at such
    time and, after seeking public comment for a period not to exceed 30
    days, may make appropriate adjustments consistent with such market
    conditions.
        ``(d) Eliminating Interest Rate Disparities.--
                ``(1) In general.--Upon request by the Director, an
            enterprise shall provide to the Director, in a form determined
            by the Director, data the Director may review to determine
            whether there exist disparities in interest rates charged on
            mortgages to borrowers who are minorities as compared with
            comparable mortgages to borrowers of similar creditworthiness
            who are not minorities.
                ``(2) Remedial actions upon preliminary finding.--Upon a
            preliminary finding by the Director that a pattern of
            disparities in interest rates with respect to any lender or
            lenders exists pursuant to the data provided by an enterprise
            in paragraph (1), the Director shall_
                        ``(A) refer the preliminary finding to the
                    appropriate regulatory or enforcement agency for
                    further review; and
                        ``(B) require the enterprise to submit additional
                    data with respect to any lender or lenders, as
                    appropriate and to the extent practicable, to the
                    Director who shall submit any such additional data to
                    the regulatory or enforcement agency for appropriate
                    action.
                ``(3) Annual report to congress.--The Director shall submit
            to the Committee on Financial Services of the House of
            Representatives and the Committee on Banking, Housing, and
            Urban Affairs of the Senate a report describing the actions
            taken, and being taken, by the Director to carry out this
            subsection. No such report shall identify any lender or lenders
            who have not been found to have engaged in discriminatory
            lending practices pursuant to a final adjudication on the
            record, and after opportunity for an administrative hearing, in
            accordance with subchapter II of chapter 5 of title 5, United
            States Code.
                ``(4) Protection of identity of individuals.--In carrying
            out this subsection, the Director shall ensure that no
            property-related or financial information that would enable a
            borrower to be identified shall be made public.

    ``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

        ``(a) In General.--The Director shall, by regulation, establish
    annual goals for the purchase by each enterprise of the following types
    of mortgages for the following categories of families:
                ``(1) Purchase-money mortgages.--A goal for purchase of
            conventional, conforming, single-family, purchase money
            mortgages financing owner-occupied housing for each of the
            following categories of families:
                        ``(A) Low-income families.
                        ``(B) Families that reside in low-income areas.
                        ``(C) Very low-income families.
                ``(2) Refinancing mortgages.--A goal for purchase of
            conventional, conforming mortgages on owner-occupied, single-
            family housing for low-income families that are given to pay
            off or prepay an existing loan secured by the same property.
        ``(b) Goals as a Percentage of Total Mortgage Purchases.--The goals
    established under paragraphs (1) and (2) of subsection (a) shall be
    established as a percentage of the total number of conventional,
    conforming, single-family, owner-occupied, purchase money mortgages
    purchased by the enterprise, or as percentage of the total number of
    conventional, single-family, owner-occupied refinance mortgages
    purchased by the enterprise, as applicable, that are mortgages for the
    types of families specified in paragraphs (1) and (2) of subsection
    (a).
        ``(c) Single-Family, Owner-Occupied Rental Housing Units.--The
    Director shall require each enterprise to report the number of rental
    housing units affordable to low-income families each year which are
    contained in mortgages purchased by the enterprise financing 2- to 4-
    unit single-family, owner-occupied properties and may, by regulation,
    establish additional requirements relating to such units.
        ``(d) Determination of Compliance.--
                ``(1) In general.--The Director shall determine, for each
            year that the housing goals under this section are in effect
            pursuant to section 1331(a), whether each enterprise has
            complied with each such goal established under subsection (a)
            of this section and any additional requirements which may be
            established under subsection (c) of this section.
                ``(2) Purchase-money mortgage goals.--An enterprise shall
            be considered to be in compliance with a housing goal under
            subparagraph (A), (B), or (C) of subsection (a)(1) for a year
            only if, for the type of family described in such subparagraph,
            the percentage of the number of conventional, conforming,
            single-family, owner-occupied, purchase money mortgages
            purchased by the enterprise in such year that serve such
            families, meets or exceeds the target for the year for such
            type of family that is established under subsection (e).
                ``(3) Refinance goal.--An enterprise shall be considered to
            be in compliance with the refinance goal under subsection
            (a)(2) for a year only if the percentage of the number of
            conventional, conforming, single-family, owner-occupied
            refinance mortgages purchased by the enterprise in such year
            that serve low-income families meets or exceeds the target for
            the year that is established under subsection (e).
        ``(e) Annual Targets.--
                ``(1) In general.--The Director shall, by regulation,
            establish annual targets for each goal and subgoal under this
            section, provided that the Director shall not set prospective
            targets longer than three years. In establishing such targets,
            the Director shall not consider segments of the market
            determined to be unacceptable or contrary to good lending
            practices, inconsistent with safety and soundness, or
            unauthorized for purchase by the enterprises.
                ``(2) Goals targets.--
                        ``(A) Calculation.--The Director shall calculate,
                    for each of the types of families described in
                    subsection (a), the percentage, for each of the three
                    years that most recently precede such year and for
                    which information under the Home Mortgage Disclosure
                    Act of 1975 is publicly available--
                                ``(i) of the number of conventional,
                            conforming, single-family, owner-occupied
                            purchase money mortgages originated in such
                            year that serve such type of family, or
                                ``(ii) the number of conventional,
                            conforming, single-family, owner-occupied
                            refinance mortgages originated in such year
                            that serve low-income families,
                    as applicable, as determined by the Director using the
                    information obtained and determined pursuant to
                    paragraphs (4) and (5).
                        ``(B) Establishment of goal targets.--The Director
                    shall, by regulation, establish targets for each of the
                    goal categories, taking into consideration the
                    calculations under subparagraph (A) and the following
                    factors:
                                ``(i) National housing needs.
                                ``(ii) Economic, housing, and demographic
                            conditions, including expected market
                            developments.
                                ``(iii) The performance and effort of the
                            enterprises toward achieving the housing goals
                            under this section in previous years.
                                ``(iv) The ability of the enterprise to
                            lead the industry in making mortgage credit
                            available.
                                ``(v) Such other reliable mortgage data as
                            may be available.
                                ``(vi) The size of the purchase money
                            conventional mortgage market, or refinance
                            conventional mortgage market, as applicable,
                            serving each of the types of families described
                            in subsection (a), relative to the size of the
                            overall purchase money mortgage market or the
                            overall refinance mortgage market,
                            respectively.
                                ``(vii) The need to maintain the sound
                            financial condition of the enterprises.
                ``(3) Authority to adjust targets.--The Director may, by
            regulation, adjust the percentage targets previously
            established by regulation pursuant to paragraph (2)(B) for any
            year, to reflect subsequent available data and market
            developments.
                ``(4) HMDA information.--The Director shall annually obtain
            information submitted in compliance with the Home Mortgage
            Disclosure Act of 1975 regarding conventional, conforming,
            single-family, owner-occupied, purchase money and refinance
            mortgages originated and purchased for the previous year.
                ``(5) Conforming mortgages.--In determining whether a
            mortgage is a conforming mortgage for purposes of this
            paragraph, the Director shall consider the original principal
            balance of the mortgage loan to be the principal balance as
            reported in the information referred to in paragraph (4), as
            rounded to the nearest thousand dollars.
        ``(f) Notice of Determination and Enterprise Comment.--
                ``(1) Notice.--Within 30 days of making a determination
            under subsection (d) regarding compliance of an enterprise for
            a year with a housing goal established under this section and
            before any public disclosure thereof, the Director shall
            provide notice of the determination to the enterprise, which
            shall include an analysis and comparison, by the Director, of
            the performance of the enterprise for the year and the targets
            for the year under subsection (e).
                ``(2) Comment period.--The Director shall provide each
            enterprise an opportunity to comment on the determination
            during the 30-day period beginning upon receipt by the
            enterprise of the notice.
        ``(g) Use of Borrower Income.--In monitoring the performance of
    each enterprise pursuant to the housing goals under this section and
    evaluating such performance (for purposes of section 1336), the
    Director shall consider a mortgagor's income to be such income at the
    time of origination of the mortgage.
        ``(h) Consideration of Properties With Rental Units.--Mortgages
    financing two- to four-unit owner-occupied properties shall count
    toward the achievement of the single-family housing goals under this
    section, if such properties otherwise meet the requirements under this
    section, notwithstanding the use of one or more units for rental
    purposes.
        ``(i) Goals Credit.--The Director shall determine whether an
    enterprise shall receive full, partial, or no credit for a transaction
    toward achievement of any of the housing goals established pursuant to
    section 1332 and 1333. In making any such determination, the Director
    shall consider whether a transaction or activity of an enterprise is
    substantially equivalent to a mortgage purchase and either (1) creates
    a new market, or (2) adds liquidity to an existing market. No credit
    toward the achievement of the housing goals and subgoals established
    under this section may be given to the purchase of mortgages, including
    any transaction or activity of an enterprise determined to be
    substantially equivalent to a mortgage purchase, that is determined to
    be unacceptable or contrary to good lending practices, inconsistent
    with safety and soundness, or unauthorized for purchase by the
    enterprises, pursuant to regulations issued by the Director.

    ``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.

        ``(a) Establishment of Goal.--
                ``(1) In general.--The Director shall, by regulation,
            establish a single annual goal, by either unit or dollar
            volume, of purchases by each enterprise of mortgages on
            multifamily housing that finance dwelling units affordable to
            low-income families.
                ``(2) Additional requirements for units affordable to very
            low-income families.--When establishing the goal under this
            section, the Director shall establish additional requirements
            for the purchase by each enterprise of mortgages on multifamily
            housing that finance dwelling units affordable to very low-
            income families.
                ``(3) Reporting on smaller properties.--The Director shall
            require each enterprise to report on the purchase by each
            enterprise of multifamily housing of a smaller or limited size
            that is affordable to low-income families, which may be based
            on multifamily projects of 5 to 50 units (as such numbers may
            be adjusted by the Director) or on mortgages of up to
            $5,000,000 (as such amount may be adjusted by the Director),
            and may, by regulation, establish such aditional requirements
            related to such units.
                ``(4) Factors.--In establishing the goal and additional
            requirements under this section, the Director shall not
            consider segments of the market determined to be inconsistent
            with safety and soundness or unauthorized for purchase by the
            enterprises, and shall take into consideration--
                        ``(A) national multifamily mortgage credit needs
                    and the ability of the enterprise to provide additional
                    liquidity and stability for the multifamily mortgage
                    market;
                        ``(B) the performance and effort of the enterprise
                    in making mortgage credit available for multifamily
                    housing in previous years;
                        ``(C) the size of the multifamily mortgage market
                    for housing affordable to low-income and very low-
                    income families, including the size of the multifamily
                    markets for housing of a smaller or limited size;
                        ``(D) the ability of the enterprise to lead the
                    market in making multifamily mortgage credit available,
                    especially for multifamily housing described in
                    paragraphs (1) and (2);
                        ``(E) the availability of public subsidies; and
                        ``(F) the need to maintain the sound financial
                    condition of the enterprise.
        ``(b) Units Financed by Housing Finance Agency Bonds.--The Director
    shall give full credit toward the achievement of the multifamily
    special affordable housing goal under this section (for purposes of
    section 1336) to dwelling units in multifamily housing that otherwise
    qualifies under such goal and that is financed by tax-exempt or taxable
    bonds issued by a State or local housing finance agency, if such bonds,
    in whole or in part--
                ``(1) are secured by a guarantee of the enterprise; or
                ``(2) are purchased by the enterprise, except that the
            Director may give less than full credit for purchases of
            investment grade bonds, to the extent that such purchases do
            not provide a new market or add liquidity to an existing
            market.
        ``(c) Measurement of Performance.--The Director shall monitor the
    performance of each enterprise in meeting the goals established under
    this section and shall evaluate such performance (for purposes of
    section 1336) based on whether the rent levels are affordable. A rent
    level shall be considered to be affordable for purposes of this
    subsection for low-income families if it does not exceed 30 percent of
    the maximum income level of such income category, with appropriate
    adjustments for unit size as measured by the number of bedrooms.
        ``(d) Determination of Compliance.--The Director shall determine,
    for each year that the housing goal under this section is in effect
    pursuant to section 1331(a), whether each enterprise has complied with
    such goal and the additional requirements under subsection (a)(2).

    ``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

        ``(a) Authority.--An enterprise may petition the Director in
    writing at any time during a year to reduce the level of any goal or
    subgoal for such year established pursuant to this subpart.
        ``(b) Standard for Reduction.--The Director may reduce the level
    for a goal or subgoal pursuant to such a petition only if--
                ``(1) market and economic conditions or the financial
            condition of the enterprise require such action; or
                ``(2) efforts to meet the goal or subgoal would result in
            the constraint of liquidity, over-investment in certain market
            segments, or other consequences contrary to the intent of this
            subpart, or section 301(3) of the Federal National Mortgage
            Association Charter Act (12 U.S.C. 1716(3)) or section
            301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12
            U.S.C. 1451 note), as applicable.
        ``(c) Determination.--The Director shall, promptly upon receipt of
    a petition regarding a reduction, seek public comment on the reduction
    for a period of 30 days. The Director shall make a determination
    regarding any proposed reduction within 30 days after the expiration of
    such public comment period. The Director may extend such determination
    period for a single additional 15-day period, but only if the Director
    requests additional information from the enterprise.''.
        (c) Conforming Amendments.--The Housing and Community Development
    Act of 1992 is amended_
                (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter
            preceding paragraph (1), by striking ``low- and moderate-income
            housing goal'' and all that follows through ``section 1334''
            and inserting ``housing goals established under this subpart'';
            and
                (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by
            striking ``sections 1332, 1333, and 1334,'' and inserting
            ``this subpart''.
        (d) Definitions.--Section 1303 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502) is
    amended--
                (1) by striking paragraph (24), as so designated by section
            1002 of this Act, and inserting the following:
                ``(24) Very low-income.--
                        ``(A) In general.--The term `very low-income'
                    means--
                                ``(i) in the case of owner-occupied units,
                            families having incomes not greater than 50
                            percent of the area median income; and
                                ``(ii) in the case of rental units,
                            families having incomes not greater than 50
                            percent of the area median income, with
                            adjustments for smaller and larger families, as
                            determined by the Director.
                        ``(B) Rule of construction.--For purposes of
                    section 1338 and 1339, the term `very low-income'
                    means--
                                ``(i) in the case of owner-occupied units,
                            income in excess of 30 percent but not greater
                            than 50 percent of the area median income; and
                                ``(ii) in the case of rental units, income
                            in excess of 30 percent but not greater than 50
                            percent of the area median income, with
                            adjustments for smaller and larger families, as
                            determined by the Director.''; and
                (2) by adding at the end the following:
                ``(26) Conforming mortgage.--The term `conforming mortgage'
            means, with respect to an enterprise, a conventional mortgage
            having an original principal obligation that does not exceed
            the dollar amount limitation in effect at the time of such
            origination and applicable to such mortgage, under, as
            applicable--
                        ``(A) section 302(b)(2) of the Federal National
                    Mortgage Association Charter Act; or
                        ``(B) section 305(a)(2) of the Federal Home Loan
                    Mortgage Corporation Act.
                ``(27) Extremely low-income.--The term `extremely low-
            income' means--
                        ``(A) in the case of owner-occupied units, income
                    not in excess of 30 percent of the area median income;
                    and
                        ``(B) in the case of rental units, income not in
                    excess of 30 percent of the area median income, with
                    adjustments for smaller and larger families, as
                    determined by the Director.
                ``(28) Low-income area.--The term `low-income area' means a
            census tract or block numbering area in which the median income
            does not exceed 80 percent of the median income for the area in
            which such census tract or block numbering area is located,
            and, for the purposes of section 1332(a)(1)(B), shall include
            families having incomes not greater than 100 percent of the
            area median income who reside in minority census tracts and
            shall include families having incomes not greater than 100
            percent of the area median income who reside in designated
            disaster areas.
                ``(29) Minority census tract.--The term `minority census
            tract' means a census tract that has a minority population of
            at least 30 percent and a median family income of less than 100
            percent of the area family median income.
                ``(30) Shortage of standard rental units both affordable
            and available to extremely low-income renter households.--
                        ``(A) In general.--The term `shortage of standard
                    rental units both affordable and available to extremely
                    low-income renter households' means the gap between--
                                ``(i) the number of units with complete
                            plumbing and kitchen facilities with a rent
                            that is 30 percent or less of 30 percent of the
                            adjusted area median income as determined by
                            the Director that are occupied by extremely
                            low-income renter households or are vacant for
                            rent; and
                                ``(ii) the number of extremely low-income
                            renter households.
                        ``(B) Rule of construction.--If the number of units
                    described in subparagraph (A)(i) exceeds the number of
                    extremely low-income households as described in
                    subparagraph (A)(ii), there is no shortage.
                ``(31) Shortage of standard rental units both affordable
            and available to very low-income renter households.--
                        ``(A) In general.--The term `shortage of standard
                    rental units both affordable and available to very low-
                    income renter households' means the gap between--
                                ``(i) the number of units with complete
                            plumbing and kitchen facilities with a rent
                            that is 30 percent or less of 50 percent of the
                            adjusted area median income as determined by
                            the Director that are occupied by either
                            extremely low- or very low-income renter
                            households or are vacant for rent; and
                                ``(ii) the number of extremely low- and
                            very low-income renter households.
                        ``(B) Rule of construction.--If the number of units
                    described in subparagraph (A)(i) exceeds the number of
                    extremely low- and very low-income households as
                    described in subparagraph (A)(ii), there is no
                    shortage.''.

    SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.

        (a) Establishment and Evaluation of Performance.--Section 1335 of
    the Federal Housing Enterprises Financial Safety and Soundness Act of
    1992 (12 U.S.C. 4565) is amended--
                (1) in the section heading, by inserting ``duty to serve
            underserved markets and'' before ``other'';
                (2) by striking subsection (b);
                (3) in subsection (a)--
                        (A) in the matter preceding paragraph (1), by
                    inserting ``and to carry out the duty under subsection
                    (a) of this section'' before ``, each enterprise
                    shall'';
                        (B) in paragraph (3), by inserting ``and'' after
                    the semicolon at the end;
                        (C) in paragraph (4), by striking ``; and'' and
                    inserting a period;
                        (D) by striking paragraph (5); and
                        (E) by redesignating such subsection as subsection
                    (b);
                (4) by inserting before subsection (b) (as so redesignated
            by paragraph (3)(E) of this subsection) the following new
            subsection:
        ``(a) Duty to Serve Underserved Markets.--
                ``(1) Duty.--To increase the liquidity of mortgage
            investments and improve the distribution of investment capital
            available for mortgage financing for underserved markets, each
            enterprise shall provide leadership to the market in developing
            loan products and flexible underwriting guidelines to
            facilitate a secondary market for mortgages for very low-, low-
            , and moderate-income families with respect to the following
            underserved markets:
                        ``(A) Manufactured housing.--The enterprise shall
                    develop loan products and flexible underwriting
                    guidelines to facilitate a secondary market for
                    mortgages on manufactured homes for very low-, low-,
                    and moderate-income families.
                        ``(B) Affordable housing preservation.--The
                    enterprise shall develop loan products and flexible
                    underwriting guidelines to facilitate a secondary
                    market to preserve housing affordable to very low-,
                    low-, and moderate-income families, including housing
                    projects subsidized under_
                                ``(i) the project-based and tenant-based
                            rental assistance programs under section 8 of
                            the United States Housing Act of 1937;
                                ``(ii) the program under section 236 of the
                            National Housing Act;
                                ``(iii) the below-market interest rate
                            mortgage program under section 221(d)(4) of the
                            National Housing Act;
                                ``(iv) the supportive housing for the
                            elderly program under section 202 of the
                            Housing Act of 1959;
                                ``(v) the supportive housing program for
                            persons with disabilities under section 811 of
                            the Cranston-Gonzalez National Affordable
                            Housing Act;
                                ``(vi) the programs under title IV of the
                            McKinney-Vento Homeless Assistance Act (42
                            U.S.C. 11361 et seq.), but only permanent
                            supportive housing projects subsidized under
                            such programs;
                                ``(vii) the rural rental housing program
                            under section 515 of the Housing Act of 1949;
                                ``(viii) the low-income housing tax credit
                            under section 42 of the Internal Revenue Code
                            of 1986; and
                                ``(ix) comparable state and local
                            affordable housing programs.
                        ``(C) Rural markets.--The enterprise shall develop
                    loan products and flexible underwriting guidelines to
                    facilitate a secondary market for mortgages on housing
                    for very low-, and low-, and moderate-income families
                    in rural areas.''; and
                (5) by adding at the end the following new subsections:
        ``(c) Additional Categories.--The Director may submit
    recommendations to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate for the establishment of additional categories
    under subsection (a), provided that the Director makes a preliminary
    determination that any such category is important to the mission of the
    enterprises, that the category is an underserved market, and that the
    establishment of such category is warranted.
        ``(d) Evaluation and Reporting of Compliance.--
                ``(1) In general.--The Director shall, by regulation,
            establish effective for 2010 and thereafter a manner for
            evaluating whether, and the extent to which, the enterprises
            have complied with the duty under subsection (a) to serve
            underserved markets and for rating the extent of such
            compliance. Using such method, the Director shall, for 2010 and
            each year thereafter, evaluate such compliance and rate the
            performance of each enterprise as to extent of compliance. The
            Director shall include such evaluation and rating for each
            enterprise for a year in the report for that year submitted
            pursuant to section 1319B(a).
                ``(2) Separate evaluations.--In determining whether an
            enterprise has complied with the duty referred to in paragraph
            (1), the Director shall separately evaluate whether the
            enterprise has complied with such duty with respect to each of
            the underserved markets identified in subsection (a), taking
            into consideration_
                        ``(A) the development of loan products, more
                    flexible underwriting guidelines, and other innovative
                    approaches to providing financing to each of such
                    underserved markets;
                        ``(B) the extent of outreach to qualified loan
                    sellers and other market participants in each of such
                    underserved markets;
                        ``(C) the volume of loans purchased in each of such
                    underserved markets relative to the market
                    opportunities available to the enterprise, except that
                    the Director shall not establish specific quantitative
                    targets nor evaluate the enterprises based solely on
                    the volume of loans purchased; and
                        ``(D) the amount of investments and grants in
                    projects which assist in meeting the needs of such
                    underserved markets.
                ``(3) Manufactured housing market.--In determining whether
            an enterprise has complied with the duty under subparagraph (A)
            of subsection (a)(1), the Director may consider loans secured
            by both real and personal property.
                ``(4) Prohibition of consideration of affordable housing
            fund grants for meeting duty to serve.-- In determining whether
            an enterprise has complied with the duty referred to in
            paragraph (1), the Director may not consider any affordable
            housing fund grant amounts used under section 1337 for eligible
            activities under subsection (g) of such section.''.
        (b) Enforcement.--Subsection (a) of section 1336 of the Housing and
    Community Development Act of 1992 (12 U.S.C. 4566(a)) is amended--
                (1) in paragraph (1), by inserting ``and with the duty
            under section 1335(a) of each enterprise with respect to
            underserved markets,'' before ``as provided in this section'';
            and
                (2) by adding at the end of such subsection, as amended by
            the preceding provisions of this title, the following new
            paragraph:
                ``(4) Enforcement of duty to provide mortgage credit to
            underserved markets.--The duty under section 1335(a) of each
            enterprise to serve underserved markets (as determined in
            accordance with section 1335(c)) shall be enforceable under
            this section to the same extent and under the same provisions
            that the housing goals established under this subpart are
            enforceable. Such duty shall be enforceable only under this
            section, except that such duty shall not be subject to
            subsection (c)(7) of this section and shall not be enforceable
            under any other provision of this title (including subpart C of
            this part) or under any provision of the Federal National
            Mortgage Association Charter Act or the Federal Home Loan
            Mortgage Corporation Act.''.
        (c) Additional Credit for Certain Mortgages.--Section 1336(a) of
    the Housing and Community Development Act of 1992 (12 U.S.C. 4566(a))
    is amended_
                (1) in paragraph (2), by inserting ``, except as provided
            in paragraph (5),'' after ``which''; and
                (2) by adding at the end the following new paragraph:
                ``(5) Additional credit.--The Director may assign
            additional credit toward achievement, under this section, of
            the housing goals for mortgage purchase activities of the
            enterprises that comply with the requirements of such goals and
            support housing that includes a licensed childcare center. The
            availability of additional credit under this paragraph shall
            not be used to increase any housing goal, subgoal, or target
            established under this subpart.''.

    SEC. 1130. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

        (a) In General.--Section 1336 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566) is amended
    by striking subsections (b) and (c) and inserting the following:
        ``(b) Notice and Preliminary Determination of Failure To Meet
    Goals.--
                ``(1) Notice.--If the Director preliminarily determines
            that an enterprise has failed, or that there is a substantial
            probability that an enterprise will fail, to meet any housing
            goal under this subpart, the Director shall provide written
            notice to the enterprise of such a preliminary determination,
            the reasons for such determination, and the information on
            which the Director based the determination.
                ``(2) Response period.--
                        ``(A) In general.--During the 30-day period
                    beginning on the date on which an enterprise is
                    provided notice under paragraph (1), the enterprise may
                    submit to the Director any written information that the
                    enterprise considers appropriate for consideration by
                    the Director in finally determining whether such
                    failure has occurred or whether the achievement of such
                    goal was or is feasible.
                        ``(B) Extended period.--The Director may extend the
                    period under subparagraph (A) for good cause for not
                    more than 30 additional days.
                        ``(C) Shortened period.--The Director may shorten
                    the period under subparagraph (A) for good cause.
                        ``(D) Failure to respond.--The failure of an
                    enterprise to provide information during the 30-day
                    period under this paragraph (as extended or shortened)
                    shall waive any right of the enterprise to comment on
                    the proposed determination or action of the Director.
                ``(3) Consideration of information and final
            determination.--
                        ``(A) In general.--After the expiration of the
                    response period under paragraph (2), or upon receipt of
                    information provided during such period by the
                    enterprise, whichever occurs earlier, the Director
                    shall issue a final determination on--
                                ``(i) whether the enterprise has failed, or
                            there is a substantial probability that the
                            enterprise will fail, to meet the housing goal;
                            and
                                ``(ii) whether (taking into consideration
                            market and economic conditions and the
                            financial condition of the enterprise) the
                            achievement of the housing goal was or is
                            feasible.
                        ``(B) Considerations.--In making a final
                    determination under subparagraph (A), the Director
                    shall take into consideration any relevant information
                    submitted by the enterprise during the response period.
                        ``(C) Notice.--The Director shall provide written
                    notice, including a response to any information
                    submitted during the response period, to the
                    enterprise, the Committee on Banking, Housing, and
                    Urban Affairs of the Senate, and the Committee on
                    Financial Services of the House of Representatives,
                    of--
                                ``(i) each final determination under this
                            paragraph that an enterprise has failed, or
                            that there is a substantial probability that
                            the enterprise will fail, to meet a housing
                            goal;
                                ``(ii) each final determination that the
                            achievement of a housing goal was or is
                            feasible; and
                                ``(iii) the reasons for each such final
                            determination.
        ``(c) Cease and Desist, Civil Money Penalties, and Remedies
    Including Housing Plans.--
                ``(1) Requirement.--If the Director finds, pursuant to
            subsection (b), that there is a substantial probability that an
            enterprise will fail, or has actually failed, to meet any
            housing goal under this subpart, and that the achievement of
            the housing goal was or is feasible, the Director may require
            that the enterprise submit a housing plan under this
            subsection. If the Director makes such a finding and the
            enterprise refuses to submit such a plan, submits an
            unacceptable plan, or fails to comply with the plan, the
            Director may issue a cease and desist order in accordance with
            section 1341 and impose civil money penalties in accordance
            with section 1345.
                ``(2) Housing plan.--If the Director requires a housing
            plan under this subsection, such a plan shall be--
                        ``(A) a feasible plan describing the specific
                    actions the enterprise will take--
                                ``(i) to achieve the goal for the next
                            calendar year; and
                                ``(ii) if the Director determines that
                            there is a substantial probability that the
                            enterprise will fail to meet a goal in the
                            current year, to make such improvements and
                            changes in its operations as are reasonable in
                            the remainder of such year; and
                        ``(B) sufficiently specific to enable the Director
                    to monitor compliance periodically.
                ``(3) Deadline for submission.--The Director shall
            establish a deadline for an enterprise to submit a housing plan
            to the Director, which may not be more than 45 days after the
            enterprise is provided notice. The Director may extend the
            deadline to the extent that the Director determines necessary.
            Any extension of the deadline shall be in writing and for a
            time certain.
                ``(4) Approval.--The Director shall review each submission
            by an enterprise, including a housing plan submitted under this
            subsection, and, not later than 30 days after submission,
            approve or disapprove the plan or other action. The Director
            may extend the period for approval or disapproval for a single
            additional 30-day period if the Director determines it
            necessary. The Director shall approve any plan that the
            Director determines is likely to succeed, and conforms with the
            Federal National Mortgage Association Charter Act or the
            Federal Home Loan Mortgage Corporation Act (as applicable),
            this title, and any other applicable provision of law.
                ``(5) Notice of approval and disapproval.--The Director
            shall provide written notice to any enterprise submitting a
            housing plan of the approval or disapproval of the plan (which
            shall include the reasons for any disapproval of the plan) and
            of any extension of the period for approval or disapproval.
                ``(6) Resubmission.--If the initial housing plan submitted
            by an enterprise under this section is disapproved, the
            enterprise shall submit an amended plan acceptable to the
            Director not later than 15 days after such disapproval, or such
            longer period that the Director determines is in the public
            interest.
                ``(7) Cease and desist orders; civil money penalties.--
            Solely with respect to the housing goals established under
            sections 1332(a) and 1333(a)(1), if the Director requires an
            enterprise to submit a housing plan under this subsection and
            the enterprise refuses to submit such a plan, submits an
            unacceptable plan, or fails to comply with the plan, the
            Director may issue a cease and desist order in accordance with
            section 1341, impose civil money penalties in accordance with
            section 1345, exercise other appropriate enforcement authority
            or seek other appropriate actions.''.
        (b) Conforming Amendment.--The heading for subpart C of part 2 of
    subtitle A of the Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 is amended to read as follows:

                          ``Subpart C--Enforcement''.

        (c) Cease and Desist Proceedings .--
                (1) Repeal.--Section 1341 of the Federal Housing
            Enterprises Financial Safety and Soundness Act of 1992 (12
            U.S.C. 4581) is hereby repealed.
                (2) Cease and desist proceedings.--The Federal Housing
            Enterprises Financial Safety and Soundness Act of 1992 is
            amended by inserting before section 1342 the following:

    ``SEC. 1341. CEASE AND DESIST PROCEEDINGS.

        ``(a) Grounds for Issuance.--The Director may issue and serve a
    notice of charges under this section upon an enterprise if the Director
    determines that--
                ``(1) the enterprise has failed to submit a report under
            section 1327, following a notice of such failure, an
            opportunity for comment by the enterprise, and a final
            determination by the Director;
                ``(2) the enterprise has failed to submit the information
            required under subsection (m) or (n) of section 309 of the
            Federal National Mortgage Association Charter Act, or
            subsection (e) or (f) of section 307 of the Federal Home Loan
            Mortgage Corporation Act;
                ``(3) solely with respect to the housing goals established
            under sections 1332(a) and 1333(a)(1), the enterprise has
            failed to submit a housing plan that complies with section
            1336(c) within the applicable period; or
                ``(4) solely with respect to the housing goals established
            under sections 1332(a) and 1333(a)(1), the enterprise has
            failed to comply with a housing plan under section 1336(c).
        ``(b) Procedure.--
                ``(1) Notice of charges.--Each notice of charges issued
            under this section shall contain a statement of the facts
            constituting the alleged conduct and shall fix a time and place
            at which a hearing will be held to determine on the record
            whether an order to cease and desist from such conduct should
            issue.
                ``(2) Issuance of order.--If the Director finds on the
            record made at a hearing described in paragraph (1) that any
            conduct specified in the notice of charges has been established
            (or the enterprise consents pursuant to section 1342(a)(4)),
            the Director may issue and serve upon the enterprise an order
            requiring the enterprise to--
                        ``(A) submit a report under section 1327;
                        ``(B) solely with respect to the housing goals
                    established under sections 1332(a) and 1333(a)(1),
                    submit a housing plan in compliance with section
                    1336(c);
                        ``(C) solely with respect to the housing goals
                    established under sections 1332(a) and 1333(a)(1),
                    comply with the housing plan in compliance with section
                    1336(c); or
                        ``(D) provide the information required under
                    subsection (m) or (n) of section 309 of the Federal
                    National Mortgage Association Charter Act, or
                    subsection (e) or (f) of section 307 of the Federal
                    Home Loan Mortgage Corporation Act.
        ``(c) Effective Date.--An order under this section shall become
    effective upon the expiration of the 30-day period beginning on the
    date of service of the order upon the enterprise (except in the case of
    an order issued upon consent, which shall become effective at the time
    specified therein), and shall remain effective and enforceable as
    provided in the order, except to the extent that the order is stayed,
    modified, terminated, or set aside by action of the Director or
    otherwise, as provided in this subpart.''.
        (d) Civil Money Penalties.--
                (1) Repeal.--Section 1345 of the Federal Housing
            Enterprises Financial Safety and Soundness Act of 1992 (12
            U.S.C. 4585) is hereby repealed.
                (2) Civil money penalties.--The Federal Housing Enterprises
            Financial Safety and Soundness Act of 1992 is amended by
            inserting after section 1344 the following:

    ``SEC. 1345. CIVIL MONEY PENALTIES.

        ``(a) Authority.--The Director may impose a civil money penalty, in
    accordance with the provisions of this section, on any enterprise that
    has failed to--
                ``(1) submit a report under section 1327, following a
            notice of such failure, an opportunity for comment by the
            enterprise, and a final determination by the Director;
                ``(2) submit the information required under subsection (m)
            or (n) of section 309 of the Federal National Mortgage
            Association Charter Act or subsection (e) or (f) of section 307
            of the Federal Home Loan Mortgage Corporation Act;
                ``(3) solely with respect to the housing goals established
            under sections 1332(a) and 1333(a)(1), submit a housing plan or
            perform its responsibilities under a remedial order issued
            pursuant to section 1336(c) within the required period; or
                ``(4) solely with respect to the housing goals established
            under sections 1332(a) and 1333(a)(1), comply with a housing
            plan for the enterprise under section 1336(c).
        ``(b) Amount of Penalty.--The amount of a penalty under this
    section, as determined by the Director, may not exceed--
                ``(1) for any failure described in paragraph (1), (5), or
            (6) of subsection (a), $100,000 for each day that the failure
            occurs; and
                ``(2) for any failure described in paragraph (2), (3), or
            (4) of subsection (a), $50,000 for each day that the failure
            occurs.
        ``(c) Procedures.--
                ``(1) Establishment.--The Director shall establish
            standards and procedures governing the imposition of civil
            money penalties under this section. Such standards and
            procedures--
                        ``(A) shall provide for the Director to notify the
                    enterprise in writing of the determination of the
                    Director to impose the penalty, which shall be made on
                    the record;
                        ``(B) shall provide for the imposition of a penalty
                    only after the enterprise has been given an opportunity
                    for a hearing on the record pursuant to section 1342;
                    and
                        ``(C) may provide for review by the Director of any
                    determination or order, or interlocutory ruling,
                    arising from a hearing.
                ``(2) Factors in determining amount of penalty.--In
            determining the amount of a penalty under this section, the
            Director shall give consideration to factors including--
                        ``(A) the gravity of the offense;
                        ``(B) any history of prior offenses;
                        ``(C) ability to pay the penalty;
                        ``(D) injury to the public;
                        ``(E) benefits received;
                        ``(F) deterrence of future violations;
                        ``(G) the length of time that the enterprise should
                    reasonably take to achieve the goal; and
                        ``(H) such other factors as the Director may
                    determine, by regulation, to be appropriate.
        ``(d) Action to Collect Penalty.--If an enterprise fails to comply
    with an order by the Director imposing a civil money penalty under this
    section, after the order is no longer subject to review, as provided in
    sections 1342 and 1343, the Director may bring an action in the United
    States District Court for the District of Columbia to obtain a monetary
    judgment against the enterprise, and such other relief as may be
    available. The monetary judgment may, in the court's discretion,
    include the attorneys' fees and other expenses incurred by the United
    States in connection with the action. In an action under this
    subsection, the validity and appropriateness of the order imposing the
    penalty shall not be subject to review.
        ``(e) Settlement by Director.--The Director may compromise, modify,
    or remit any civil money penalty which may be, or has been, imposed
    under this section.
        ``(f) Deposit of Penalties.--The Director shall use any civil money
    penalties collected under this section to help fund the Housing Trust
    Fund established under section 1338.''.
        (e) Director Authority.--
                (1) Authority to bring a civil action.--Section 1344(a) of
            the Federal Housing Enterprises Financial Safety and Soundness
            Act of 1992 (12 U.S.C. 4584) is amended by striking ``The
            Secretary may request the Attorney General of the United States
            to bring a civil action'' and inserting ``The Director may
            bring a civil action''.
                (2) Subpoena enforcement.--Section 1348(c) of the Federal
            Housing Enterprises Financial Safety and Soundness Act of 1992
            (12 U.S.C. 4588(c)) is amended by inserting ``may bring an
            action or'' before ``may request''.
                (3) Conforming amendments.--Subpart C of part 2 of subtitle
            A of the Federal Housing Enterprises Financial Safety and
            Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended by
            striking ``Secretary'' each place that term appears and
            inserting ``Director'' in each of--
                        (A) section 1342 (12 U.S.C. 4582);
                        (B) section 1343 (12 U.S.C. 4583);
                        (C) section 1346 (12 U.S.C. 4586);
                        (D) section 1347 (12 U.S.C. 4587); and
                        (E) section 1348 (12 U.S.C. 4588).

    SEC. 1131. AFFORDABLE HOUSING PROGRAMS.

        (a) Repeal.--Section 1337 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) is hereby
    repealed.
        (b) Annual Housing Report.--The Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et seq.) is
    amended by inserting after section 1336 the following:

    ``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

        ``(a) Set Aside and Allocation of Amounts by Enterprises.--Subject
    to subsection (b), in each fiscal year--
                ``(1) the Federal Home Loan Mortgage Corporation shall--
                        ``(A) set aside an amount equal to 4.2 basis points
                    for each dollar of the unpaid principal balance of its
                    total new business purchases; and
                        ``(B) allocate or otherwise transfer--
                                ``(i) 65 percent of such amounts to the
                            Secretary of Housing and Urban Development to
                            fund the Housing Trust Fund established under
                            section 1338; and
                                ``(ii) 35 percent of such amounts to fund
                            the Capital Magnet Fund established pursuant to
                            section 1339; and
                ``(2) the Federal National Mortgage Association shall--
                        ``(A) set aside an amount equal to 4.2 basis points
                    for each dollar of unpaid principal balance of its
                    total new business purchases; and
                        ``(B) allocate or otherwise transfer--
                                ``(i) 65 percent of such amounts to the
                            Secretary of Housing and Urban Development to
                            fund the Housing Trust Fund established under
                            section 1338; and
                                ``(ii) 35 percent of such amounts to fund
                            the Capital Magnet Fund established pursuant to
                            section 1339.
        ``(b) Suspension of Contributions.--The Director shall temporarily
    suspend allocations under subsection (a) by an enterprise upon a
    finding by the Director that such allocations--
                ``(1) are contributing, or would contribute, to the
            financial instability of the enterprise;
                ``(2) are causing, or would cause, the enterprise to be
            classified as undercapitalized; or
                ``(3) are preventing, or would prevent, the enterprise from
            successfully completing a capital restoration plan under
            section 1369C.
        ``(c) Prohibition of Pass-Through of Cost of Allocations.--The
    Director shall, by regulation, prohibit each enterprise from
    redirecting the costs of any allocation required under this section,
    through increased charges or fees, or decreased premiums, or in any
    other manner, to the originators of mortgages purchased or securitized
    by the enterprise.
        ``(d) Enforcement of Requirements on Enterprise.--Compliance by the
    enterprises with the requirements under this section shall be
    enforceable under subpart C. Any reference in such subpart to this part
    or to an order, rule, or regulation under this part specifically
    includes this section and any order, rule, or regulation under this
    section.
        ``(e) Required Amount for HOPE Reserve Fund.--Of the aggregate
    amount allocated under subsection (a), 25 percent shall be deposited
    into a fund established in the Treasury of the United States by the
    Secretary of the Treasury for such purpose.
        ``(f) Limitation.--No funds under this title may be used in
    conjunction with property taken by eminent domain, unless eminent
    domain is employed only for a public use, except that, for purposes of
    this section, public use shall not be construed to include economic
    development that primarily benefits any private entity.

    ``SEC. 1338. HOUSING TRUST FUND.

        ``(a) Establishment and Purpose.--
                ``(1) In general.--The Secretary of Housing and Urban
            Development (in this section referred to as the `Secretary')
            shall establish and manage a Housing Trust Fund, which shall be
            funded with amounts allocated by the enterprises under section
            1337 and any amounts as are or may be appropriated,
            transferred, or credited to such Housing Trust Fund under any
            other provisions of law. The purpose of the Housing Trust Fund
            under this section is to provide grants to States (as such term
            is defined in section 1303) for use--
                        ``(A) to increase and preserve the supply of rental
                    housing for extremely low- and very low-income
                    families, including homeless families; and
                        ``(B) to increase homeownership for extremely low-
                    and very low-income families.
                ``(2) Federal assistance.--For purposes of the application
            of Federal civil rights laws, all assistance provided from the
            Housing Trust Fund shall be considered Federal financial
            assistance.
        ``(b) Allocations for HOPE Bond Payments.--
                ``(1) In general.--Notwithstanding subsection (c), to help
            address the mortgage crisis, of the amounts allocated pursuant
            to clauses (i) and (ii) of section 1337(a)(1)(B) and clauses
            (i) and (ii) of section 1337(a)(2)(B) in excess of amounts
            described in section 1337(e)--
                        ``(A) 100 percent of such excess shall be used to
                    reimburse the Treasury for payments made pursuant to
                    section 257(w)(1)(C) of the National Housing Act in
                    calendar year 2009;
                        ``(B) 50 percent of such excess shall be used to
                    reimburse the Treasury for such payments in calendar
                    year 2010; and
                        ``(C) 25 percent of such excess shall be used to
                    reimburse the Treasury for such payments in calendar
                    year 2011.
                ``(2) Excess funds.--At the termination of the HOPE for
            Homeowners Program established under section 257 of the
            National Housing Act, if amounts used to reimburse the Treasury
            under paragraph (1) exceed the total net cost to the Government
            of the HOPE for Homeowners Program, such amounts shall be used
            for their original purpose, as described in paragraphs (1)(B)
            and (2)(B) of section 1337(a).
                ``(3) Treasury fund.--The amounts referred to in
            subparagraphs (A) through (C) of paragraph (1) shall be
            deposited into a fund established in the Treasury of the United
            States by the Secretary of the Treasury for such purpose.
        ``(c) Allocation for Housing Trust Fund in Fiscal Year 2010 and
    Subsequent Years.--
                ``(1) In general.--Except as provided in subsection (b),
            the Secretary shall distribute the amounts allocated for the
            Housing Trust Fund under this section to provide affordable
            housing as described in this subsection.
                ``(2) Permissible designees.--A State receiving grant
            amounts under this subsection may designate a State housing
            finance agency, housing and community development entity,
            tribally designated housing entity (as such term is defined in
            section 4 of the Native American Housing Assistance and Self-
            Determination Act of 1997 (25 U.S.C. 4103)), or any other
            qualified instrumentality of the State to receive such grant
            amounts.
                ``(3) Distribution to states by needs-based formula.--
                        ``(A) In general.--The Secretary shall, by
                    regulation, establish a formula within 12 months of the
                    date of enactment of the Federal Housing Finance
                    Regulatory Reform Act of 2008, to distribute amounts
                    made available under this subsection to each State to
                    provide affordable housing to extremely low- and very
                    low-income households.
                        ``(B) Basis for formula.--The formula required
                    under subparagraph (A) shall include the following:
                                ``(i) The ratio of the shortage of standard
                            rental units both affordable and available to
                            extremely low-income renter households in the
                            State to the aggregate shortage of standard
                            rental units both affordable and available to
                            extremely low-income renter households in all
                            the States.
                                ``(ii) The ratio of the shortage of
                            standard rental units both affordable and
                            available to very low-income renter households
                            in the State to the aggregate shortage of
                            standard rental units both affordable and
                            available to very low-income renter households
                            in all the States.
                                ``(iii) The ratio of extremely low-income
                            renter households in the State living with
                            either (I) incomplete kitchen or plumbing
                            facilities, (II) more than 1 person per room,
                            or (III) paying more than 50 percent of income
                            for housing costs, to the aggregate number of
                            extremely low-income renter households living
                            with either (IV) incomplete kitchen or plumbing
                            facilities, (V) more than 1 person per room, or
                            (VI) paying more than 50 percent of income for
                            housing costs in all the States.
                                ``(iv) The ratio of very low-income renter
                            households in the State paying more than 50
                            percent of income on rent relative to the
                            aggregate number of very low-income renter
                            households paying more than 50 percent of
                            income on rent in all the States.
                                ``(v) The resulting sum calculated from the
                            factors described in clauses (i) through (iv)
                            shall be multiplied by the relative cost of
                            construction in the State. For purposes of this
                            subclause, the term `cost of construction'--
                                        ``(I) means the cost of
                                    construction or building rehabilitation
                                    in the State relative to the national
                                    cost of construction or building
                                    rehabilitation; and
                                        ``(II) shall be calculated such
                                    that values higher than 1.0 indicate
                                    that the State's construction costs are
                                    higher than the national average, a
                                    value of 1.0 indicates that the State's
                                    construction costs are exactly the same
                                    as the national average, and values
                                    lower than 1.0 indicate that the
                                    State's cost of construction are lower
                                    than the national average.
                        ``(C) Priority.--The formula required under
                    subparagraph (A) shall give priority emphasis and
                    consideration to the factor described in subparagraph
                    (B)(i).
                ``(4) Allocation of grant amounts.--
                        ``(A) Notice.--Not later than 60 days after the
                    date that the Secretary determines the formula amounts
                    described in paragraph (3), the Secretary shall caused
                    to be published in the Federal Register a notice that
                    such amounts shall be so available.
                        ``(B) Grant amount.--In each fiscal year other than
                    fiscal year 2009, the Secretary shall make a grant to
                    each State in an amount that is equal to the formula
                    amount determined under paragraph (3) for that State.
                        ``(C) Minimum state allocations.--If the formula
                    amount determined under paragraph (3) for a fiscal year
                    would allocate less than $3,000,000 to any of the 50
                    States of the United States or the District of
                    Columbia, the allocation for such State of the United
                    States or the District of Columbia shall be $3,000,000,
                    and the increase shall be deducted pro rata from the
                    allocations made to all other of the States (as such
                    term is defined in section 1303).
                ``(5) Allocation plans required.--
                        ``(A) In general.--For each year that a State or
                    State designated entity receives a grant under this
                    subsection, the State or State designated entity shall
                    establish an allocation plan. Such plan shall--
                                ``(i) set forth a plan for the distribution
                            of grant amounts received by the State or State
                            designated entity for such year;
                                ``(ii) be based on priority housing needs,
                            as determined by the State or State designated
                            entity in accordance with the regulations
                            established under subsection (g)(2)(D);
                                ``(iii) comply with paragraph (6); and
                                ``(iv) include performance goals that
                            comply with the requirements established by the
                            Secretary pursuant to subsection (g)(2).
                        ``(B) Establishment.--In establishing an allocation
                    plan under this paragraph, a State or State designated
                    entity shall--
                                ``(i) notify the public of the
                            establishment of the plan;
                                ``(ii) provide an opportunity for public
                            comments regarding the plan;
                                ``(iii) consider any public comments
                            received regarding the plan; and
                                ``(iv) make the completed plan available to
                            the public.
                        ``(C) Contents.--An allocation plan of a State or
                    State designated entity under this paragraph shall set
                    forth the requirements for eligible recipients under
                    paragraph (8) to apply for such grant amounts,
                    including a requirement that each such application
                    include--
                                ``(i) a description of the eligible
                            activities to be conducted using such
                            assistance; and
                                ``(ii) a certification by the eligible
                            recipient applying for such assistance that any
                            housing units assisted with such assistance
                            will comply with the requirements under this
                            section.
                ``(6) Selection of activities funded using housing trust
            fund grant amounts.--Grant amounts received by a State or State
            designated entity under this subsection may be used, or
            committed for use, only for activities that--
                        ``(A) are eligible under paragraph (7) for such
                    use;
                        ``(B) comply with the applicable allocation plan of
                    the State or State designated entity under paragraph
                    (5); and
                        ``(C) are selected for funding by the State or
                    State designated entity in accordance with the process
                    and criteria for such selection established pursuant to
                    subsection (g)(2)(D).
                ``(7) Eligible activities.--Grant amounts allocated to a
            State or State designated entity under this subsection shall be
            eligible for use, or for commitment for use, only for
            assistance for--
                        ``(A) the production, preservation, and
                    rehabilitation of rental housing, including housing
                    under the programs identified in section 1335(a)(2)(B)
                    and for operating costs, except that not less than 75
                    percent of such grant amounts shall be used for the
                    benefit only of extremely low-income families or
                    families with incomes at or below the poverty line (as
                    such term is defined in section 673 of the Omnibus
                    Budget Reconciliation Act of 1981 (42 U.S.C. 9902),
                    including any revision required by such section)
                    applicable to a family of the size involved, and not
                    more than 25 percent for the benefit only of very low-
                    income families; and
                        ``(B) the production, preservation, and
                    rehabilitation of housing for homeownership, including
                    such forms as down payment assistance, closing cost
                    assistance, and assistance for interest rate buy-downs,
                    that--
                                ``(i) is available for purchase only for
                            use as a principal residence by families that
                            qualify both as--
                                        ``(I) extremely low- and very low-
                                    income families at the times described
                                    in subparagraphs (A) through (C) of
                                    section 215(b)(2) of the Cranston-
                                    Gonzalez National Affordable Housing
                                    Act (42 U.S.C. 12745(b)(2)); and
                                        ``(II) first-time homebuyers, as
                                    such term is defined in section 104 of
                                    the Cranston-Gonzalez National
                                    Affordable Housing Act (42 U.S.C.
                                    12704), except that any reference in
                                    such section to assistance under title
                                    II of such Act shall for purposes of
                                    this subsection be considered to refer
                                    to assistance from affordable housing
                                    fund grant amounts;
                                ``(ii) has an initial purchase price that
                            meets the requirements of section 215(b)(1) of
                            the Cranston-Gonzalez National Affordable
                            Housing Act;
                                ``(iii) is subject to the same resale
                            restrictions established under section
                            215(b)(3) of the Cranston-Gonzalez National
                            Affordable Housing Act and applicable to the
                            participating jurisdiction that is the State in
                            which such housing is located; and
                                ``(iv) is made available for purchase only
                            by, or in the case of assistance under this
                            subsection, is made available only to
                            homebuyers who have, before purchase completed
                            a program of independent financial education
                            and counseling from an eligible organization
                            that meets the requirements of section 132 of
                            the Federal Housing Finance Regulatory Reform
                            Act of 2008.
                ``(8) Tenant protections and public participation.--All
            amounts from the Trust Fund shall be allocated in accordance
            with, and any eligible activities carried out in whole or in
            part with grant amounts under this subtitle (including housing
            provided with such grant amounts) shall comply with and be
            operated in compliance with--
                        ``(A) laws relating to tenant protections and
                    tenant rights to participate in decision making
                    regarding their residences;
                        ``(B) laws requiring public participation,
                    including laws relating to Consolidated Plans,
                    Qualified Allocation Plans, and Public Housing Agency
                    Plans; and
                        ``(C) fair housing laws and laws regarding
                    accessibility in federally assisted housing, including
                    section 504 of the Rehabilitation Act of 1973.
                ``(9) Eligible recipients.--Grant amounts allocated to a
            State or State designated entity under this subsection may be
            provided only to a recipient that is an organization, agency,
            or other entity (including a for-profit entity or a nonprofit
            entity) that--
                        ``(A) has demonstrated experience and capacity to
                    conduct an eligible activity under paragraph (7), as
                    evidenced by its ability to--
                                ``(i) own, construct or rehabilitate,
                            manage, and operate an affordable multifamily
                            rental housing development;
                                ``(ii) design, construct or rehabilitate,
                            and market affordable housing for
                            homeownership; or
                                ``(iii) provide forms of assistance, such
                            as down payments, closing costs, or interest
                            rate buy-downs for purchasers;
                        ``(B) demonstrates the ability and financial
                    capacity to undertake, comply, and manage the eligible
                    activity;
                        ``(C) demonstrates its familiarity with the
                    requirements of any other Federal, State, or local
                    housing program that will be used in conjunction with
                    such grant amounts to ensure compliance with all
                    applicable requirements and regulations of such
                    programs; and
                        ``(D) makes such assurances to the State or State
                    designated entity as the Secretary shall, by
                    regulation, require to ensure that the recipient will
                    comply with the requirements of this subsection during
                    the entire period that begins upon selection of the
                    recipient to receive such grant amounts and ending upon
                    the conclusion of all activities under paragraph (8)
                    that are engaged in by the recipient and funded with
                    such grant amounts.
                ``(10) Limitations on use.--
                        ``(A) Required amount for homeownership
                    activities.--Of the aggregate amount allocated to a
                    State or State designated entity under this subsection
                    not more than 10 percent shall be used for activities
                    under subparagraph (B) of paragraph (7).
                        ``(B) Deadline for commitment or use.--Grant
                    amounts allocated to a State or State designated entity
                    under this subsection shall be used or committed for
                    use within 2 years of the date that such grant amounts
                    are made available to the State or State designated
                    entity. The Secretary shall recapture any such amounts
                    not so used or committed for use and reallocate such
                    amounts under this subsection in the first year after
                    such recapture.
                        ``(C) Use of returns.--The Secretary shall, by
                    regulation, provide that any return on a loan or other
                    investment of any grant amount used by a State or State
                    designated entity to provide a loan under this
                    subsection shall be treated, for purposes of
                    availability to and use by the State or State
                    designated entity, as a grant amount authorized under
                    this subsection.
                        ``(D) Prohibited uses.--The Secretary shall, by
                    regulation--
                                ``(i) set forth prohibited uses of grant
                            amounts allocated under this subsection, which
                            shall include use for--
                                        ``(I) political activities;
                                        ``(II) advocacy;
                                        ``(III) lobbying, whether directly
                                    or through other parties;
                                        ``(IV) counseling services;
                                        ``(V) travel expenses; and
                                        ``(VI) preparing or providing
                                    advice on tax returns;
                            and for the purposes of this subparagraph, the
                            prohibited use of funds for political
                            activities includes influencing the selection,
                            nomination, election, or appointment of one or
                            more candidates to any Federal, State or local
                            office as codified in section 501 of the
                            Internal Revenue Code of 1986 (26 U.S.C. 501);
                                ``(ii) provide that, except as provided in
                            clause (iii), grant amounts of a State or State
                            designated entity may not be used for
                            administrative, outreach, or other costs of--
                                        ``(I) the State or State designated
                                    entity; or
                                        ``(II) any other recipient of such
                                    grant amounts; and
                                ``(iii) limit the amount of any grant
                            amounts for a year that may be used by the
                            State or State designated entity for
                            administrative costs of carrying out the
                            program required under this subsection,
                            including home ownership counseling, to a
                            percentage of such grant amounts of the State
                            or State designated entity for such year, which
                            may not exceed 10 percent.
                        ``(E) Prohibition of consideration of use for
                    meeting housing goals or duty to serve.--In determining
                    compliance with the housing goals under this subpart
                    and the duty to serve underserved markets under section
                    1335, the Director may not consider any grant amounts
                    used under this section for eligible activities under
                    paragraph (7). The Director shall give credit toward
                    the achievement of such housing goals and such duty to
                    serve underserved markets to purchases by the
                    enterprises of mortgages for housing that receives
                    funding from such grant amounts, but only to the extent
                    that such purchases by the enterprises are funded other
                    than with such grant amounts.
        ``(d) Reduction for Failure to Obtain Return of Misused Funds.--If
    in any year a State or State designated entity fails to obtain
    reimbursement or return of the full amount required under subsection
    (e)(1)(B) to be reimbursed or returned to the State or State designated
    entity during such year--
                ``(1) except as provided in paragraph (2)--
                        ``(A) the amount of the grant for the State or
                    State designated entity for the succeeding year, as
                    determined pursuant to this section, shall be reduced
                    by the amount by which such amounts required to be
                    reimbursed or returned exceed the amount actually
                    reimbursed or returned; and
                        ``(B) the amount of the grant for the succeeding
                    year for each other State or State designated entity
                    whose grant is not reduced pursuant to subparagraph (A)
                    shall be increased by the amount determined by applying
                    the formula established pursuant to this section to the
                    total amount of all reductions for all State or State
                    designated entities for such year pursuant to
                    subparagraph (A); or
                ``(2) in any case in which such failure to obtain
            reimbursement or return occurs during a year immediately
            preceding a year in which grants under this section will not be
            made, the State or State designated entity shall pay to the
            Secretary for reallocation among the other grantees an amount
            equal to the amount of the reduction for the entity that would
            otherwise apply under paragraph (1)(A).
        ``(e) Accountability of Recipients and Grantees.--
                ``(1) Recipients.--
                        ``(A) Tracking of funds.--The Secretary shall--
                                ``(i) require each State or State
                            designated entity to develop and maintain a
                            system to ensure that each recipient of
                            assistance under this section uses such amounts
                            in accordance with this section, the
                            regulations issued under this section, and any
                            requirements or conditions under which such
                            amounts were provided; and
                                ``(ii) establish minimum requirements for
                            agreements, between the State or State
                            designated entity and recipients, regarding
                            assistance under this section, which shall
                            include--
                                        ``(I) appropriate periodic
                                    financial and project reporting, record
                                    retention, and audit requirements for
                                    the duration of the assistance to the
                                    recipient to ensure compliance with the
                                    limitations and requirements of this
                                    section and the regulations under this
                                    section; and
                                        ``(II) any other requirements that
                                    the Secretary determines are necessary
                                    to ensure appropriate administration
                                    and compliance.
                        ``(B) Misuse of funds.--
                                ``(i) Reimbursement requirement.--If any
                            recipient of assistance under this section is
                            determined, in accordance with clause (ii), to
                            have used any such amounts in a manner that is
                            materially in violation of this section, the
                            regulations issued under this section, or any
                            requirements or conditions under which such
                            amounts were provided, the State or State
                            designated entity shall require that, within 12
                            months after the determination of such misuse,
                            the recipient shall reimburse the State or
                            State designated entity for such misused
                            amounts and return to the State or State
                            designated entity any such amounts that remain
                            unused or uncommitted for use. The remedies
                            under this clause are in addition to any other
                            remedies that may be available under law.
                                ``(ii) Determination.--A determination is
                            made in accordance with this clause if the
                            determination is made by the Secretary or made
                            by the State or State designated entity,
                            provided that--
                                        ``(I) the State or State designated
                                    entity provides notification of the
                                    determination to the Secretary for
                                    review, in the discretion of the
                                    Secretary, of the determination; and
                                        ``(II) the Secretary does not
                                    subsequently reverse the determination.
                ``(2) Grantees.--
                        ``(A) Report.--
                                ``(i) In general.--The Secretary shall
                            require each State or State designated entity
                            receiving grant amounts in any given year under
                            this section to submit a report, for such year,
                            to the Secretary that--
                                        ``(I) describes the activities
                                    funded under this section during such
                                    year with such grant amounts; and
                                        ``(II) the manner in which the
                                    State or State designated entity
                                    complied during such year with any
                                    allocation plan established pursuant to
                                    subsection (c).
                                ``(ii) Public availability.--The Secretary
                            shall make such reports pursuant to this
                            subparagraph publicly available.
                        ``(B) Misuse of funds.--If the Secretary
                    determines, after reasonable notice and opportunity for
                    hearing, that a State or State designated entity has
                    failed to comply substantially with any provision of
                    this section, and until the Secretary is satisfied that
                    there is no longer any such failure to comply, the
                    Secretary shall--
                                ``(i) reduce the amount of assistance under
                            this section to the State or State designated
                            entity by an amount equal to the amount of
                            grant amounts which were not used in accordance
                            with this section;
                                ``(ii) require the State or State
                            designated entity to repay the Secretary any
                            amount of the grant which was not used in
                            accordance with this section;
                                ``(iii) limit the availability of
                            assistance under this section to the State or
                            State designated entity to activities or
                            recipients not affected by such failure to
                            comply; or
                                ``(iv) terminate any assistance under this
                            section to the State or State designated
                            entity.
        ``(f) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Extremely low-income renter household.--The term
            `extremely low-income renter household' means a household whose
            income is not in excess of 30 percent of the area median
            income, with adjustments for smaller and larger families, as
            determined by the Secretary.
                ``(2) Recipient.--The term `recipient' means an individual
            or entity that receives assistance from a State or State
            designated entity from amounts made available to the State or
            State designated entity under this section.
                ``(3) Shortage of standard rental units both affordable and
            available to extremely low-income renter households.--
                        ``(A) In general.--The term `shortage of standard
                    rental units both affordable and available to extremely
                    low-income renter households' means for any State or
                    other geographical area the gap between--
                                ``(i) the number of units with complete
                            plumbing and kitchen facilities with a rent
                            that is 30 percent or less of 30 percent of the
                            adjusted area median income as determined by
                            the Secretary that are occupied by extremely
                            low-income renter households or are vacant for
                            rent; and
                                ``(ii) the number of extremely low-income
                            renter households.
                        ``(B) Rule of construction.--If the number of units
                    described in subparagraph (A)(i) exceeds the number of
                    extremely low-income households as described in
                    subparagraph (A)(ii), there is no shortage.
                ``(4) Shortage of standard rental units both affordable and
            available to very low-income renter households.--
                        ``(A) In general.--The term `shortage of standard
                    rental units both affordable and available to very low-
                    income renter households' means for any State or other
                    geographical area the gap between--
                                ``(i) the number of units with complete
                            plumbing and kitchen facilities with a rent
                            that is 30 percent or less of 50 percent of the
                            adjusted area median income as determined by
                            the Secretary that are occupied by very low-
                            income renter households or are vacant for
                            rent; and
                                ``(ii) the number of very low-income renter
                            households.
                        ``(B) Rule of construction.--If the number of units
                    described in subparagraph (A)(i) exceeds the number of
                    very low-income households as described in subparagraph
                    (A)(ii), there is no shortage.
                ``(5) Very low-income family.--The term `very low-income
            family' has the meaning given such term in section 1303, except
            that such term includes any family that resides in a rural area
            that has an income that does not exceed the poverty line (as
            such term is defined in section 673(2) of the Omnibus Budget
            Reconciliation Act of 1981 (42 U.S.C. 9902(2)), including any
            revision required by such section) applicable to a family of
            the size involved.
                ``(6) Very low-income renter households.--The term `very
            low-income renter households' means a household whose income is
            in excess of 30 percent but not greater than 50 percent of the
            area median income, with adjustments for smaller and larger
            families, as determined by the Secretary.
        ``(g) Regulations.--
                ``(1) In general.--The Secretary shall issue regulations to
            carry out this section.
                ``(2) Required contents.--The regulations issued under this
            subsection shall include--
                        ``(A) a requirement that the Secretary ensure that
                    the use of grant amounts under this section by States
                    or State designated entities is audited not less than
                    annually to ensure compliance with this section;
                        ``(B) authority for the Secretary to audit, provide
                    for an audit, or otherwise verify a State or State
                    designated entity's activities to ensure compliance
                    with this section;
                        ``(C) a requirement that, for the purposes of
                    subparagraphs (A) and (B), any financial statement
                    submitted by a grantee or recipient to the Secretary
                    shall be reviewed by an independent certified public
                    accountant in accordance with Statements on Standards
                    for Accounting and Review Services, issued by the
                    American Institute of Certified Public Accountants;
                        ``(D) requirements for a process for application
                    to, and selection by, each State or State designated
                    entity for activities meeting the State or State
                    designated entity's priority housing needs to be funded
                    with grant amounts under this section, which shall
                    provide for priority in funding to be based upon--
                                ``(i) geographic diversity;
                                ``(ii) ability to obligate amounts and
                            undertake activities so funded in a timely
                            manner;
                                ``(iii) in the case of rental housing
                            projects under subsection (c)(7)(A), the extent
                            to which rents for units in the project funded
                            are affordable, especially for extremely low-
                            income families;
                                ``(iv) in the case of rental housing
                            projects under subsection (c)(7)(A), the extent
                            of the duration for which such rents will
                            remain affordable;
                                ``(v) the extent to which the application
                            makes use of other funding sources; and
                                ``(vi) the merits of an applicant's
                            proposed eligible activity;
                        ``(E) requirements to ensure that grant amounts
                    provided to a State or State designated entity under
                    this section that are used for rental housing under
                    subsection (c)(7)(A) are used only for the benefit of
                    extremely low- and very low-income families; and
                        ``(F) requirements and standards for establishment,
                    by a State or State designated entity, for use of grant
                    amounts in 2009 and subsequent years of performance
                    goals, benchmarks, and timetables for the production,
                    preservation, and rehabilitation of affordable rental
                    and homeownership housing with such grant amounts.
        ``(h) Affordable Housing Trust Fund.--If, after the date of
    enactment of the Federal Housing Finance Regulatory Reform Act of 2008,
    in any year, there is enacted any provision of Federal law establishing
    an affordable housing trust fund other than under this title for use
    only for grants to provide affordable rental housing and affordable
    homeownership opportunities, and the subsequent year is a year referred
    to in subsection (c), the Secretary shall in such subsequent year and
    any remaining years referred to in subsection (c) transfer to such
    affordable housing trust fund the aggregate amount allocated pursuant
    to subsection (c) in such year. Notwithstanding any other provision of
    law, assistance provided using amounts transferred to such affordable
    housing trust fund pursuant to this subsection may not be used for any
    of the activities specified in clauses (i) through (vi) of subsection
    (c)(9)(D).
        ``(i) Funding Accountability and Transparency.--Any grant under
    this section to a grantee by a State or State designated entity, any
    assistance provided to a recipient by a State or State designated
    entity, and any grant, award, or other assistance from an affordable
    housing trust fund referred to in subsection (h) shall be considered a
    Federal award for purposes of the Federal Funding Accountability and
    Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the request of the
    Director of the Office of Management and Budget, the Secretary shall
    obtain and provide such information regarding any such grants,
    assistance, and awards as the Director of the Office of Management and
    Budget considers necessary to comply with the requirements of such Act,
    as applicable, pursuant to the preceding sentence.

    ``SEC. 1339. CAPITAL MAGNET FUND.

        ``(a) Establishment.--There is established in the Treasury of the
    United States a trust fund to be known as the Capital Magnet Fund,
    which shall be a special account within the Community Development
    Financial Institutions Fund.
        ``(b) Deposits to Trust Fund.--The Capital Magnet Fund shall
    consist of--
                ``(1) any amounts transferred to the Fund pursuant to
            section 1337; and
                ``(2) any amounts as are or may be appropriated,
            transferred, or credited to such Fund under any other
            provisions of law.
        ``(c) Expenditures From Trust Fund.--Amounts in the Capital Magnet
    Fund shall be available to the Secretary of the Treasury to carry out a
    competitive grant program to attract private capital for and increase
    investment in--
                ``(1) the development, preservation, rehabilitation, or
            purchase of affordable housing for primarily extremely low-,
            very low-, and low-income families; and
                ``(2) economic development activities or community service
            facilities, such as day care centers, workforce development
            centers, and health care clinics, which in conjunction with
            affordable housing activities implement a concerted strategy to
            stabilize or revitalize a low-income area or underserved rural
            area.
        ``(d) Federal Assistance.--For purposes of the application of
    Federal civil rights laws, all assistance provided using amounts in the
    Capital Magnet Fund shall be considered Federal financial assistance.
        ``(e) Eligible Grantees.--A grant under this section may be made,
    pursuant to such requirements as the Secretary of the Treasury shall
    establish for experience and success in attracting private financing
    and carrying out the types of activities proposed under the application
    of the grantee, only to--
                ``(1) a Treasury certified community development financial
            institution; or
                ``(2) a nonprofit organization having as 1 of its principal
            purposes the development or management of affordable housing.
        ``(f) Eligible Uses.--Grant amounts awarded from the Capital Magnet
    Fund pursuant to this section may be used for the purposes described in
    paragraphs (1) and (2) of subsection (c), including for the following
    uses:
                ``(1) To provide loan loss reserves.
                ``(2) To capitalize a revolving loan fund.
                ``(3) To capitalize an affordable housing fund.
                ``(4) To capitalize a fund to support activities described
            in subsection (c)(2).
                ``(5) For risk-sharing loans.
        ``(g) Applications.--
                ``(1) In general.--The Secretary of the Treasury shall
            provide, in a competitive application process established by
            regulation, for eligible grantees under subsection (e) to
            submit applications for Capital Magnet Fund grants to the
            Secretary at such time and in such manner as the Secretary
            shall determine.
                ``(2) Content of application.--The application required
            under paragraph (1) shall include a detailed description of--
                        ``(A) the types of affordable housing, economic,
                    and community revitalization projects that support or
                    sustain residents of an affordable housing project
                    funded by a grant under this section for which such
                    grant amounts would be used, including the proposed use
                    of eligible grants as authorized under this section;
                        ``(B) the types, sources, and amounts of other
                    funding for such projects; and
                        ``(C) the expected time frame of any grant used for
                    such project.
        ``(h) Grant Limitation.--
                ``(1) In general.--Any 1 eligible grantee and its
            subsidiaries and affiliates may not be awarded more than 15
            percent of the aggregate funds available for grants during any
            year from the Capital Magnet Fund.
                ``(2) Geographic diversity.--
                        ``(A) Goal.--The Secretary of the Treasury shall
                    seek to fund activities in geographically diverse areas
                    of economic distress, including metropolitan and
                    underserved rural areas in every State.
                        ``(B) Diversity defined.--For purposes of this
                    paragraph, geographic diversity includes those areas
                    that meet objective criteria of economic distress
                    developed by the Secretary of the Treasury, which may
                    include--
                                ``(i) the percentage of low-income families
                            or the extent of poverty;
                                ``(ii) the rate of unemployment or
                            underemployment;
                                ``(iii) extent of blight and disinvestment;
                                ``(iv) projects that target extremely low-,
                            very low-, and low-income families in or
                            outside a designated economic distress area; or
                                ``(v) any other criteria designated by the
                            Secretary of the Treasury.
                ``(3) Leverage of funds.--Each grant from the Capital
            Magnet Fund awarded under this section shall be reasonably
            expected to result in eligible housing, or economic and
            community development projects that support or sustain an
            affordable housing project funded by a grant under this section
            whose aggregate costs total at least 10 times the grant amount.
                ``(4) Commitment for use deadline.--Amounts made available
            for grants under this section shall be committed for use within
            2 years of the date of such allocation. The Secretary of the
            Treasury shall recapture into the Capital Magnet Fund any
            amounts not so used or committed for use and allocate such
            amounts in the first year after such recapture.
                ``(5) Prohibited uses.--The Secretary shall, by regulation,
            set forth prohibited uses of grant amounts awarded under this
            section, which shall include use for--
                        ``(A) political activities;
                        ``(B) advocacy;
                        ``(C) lobbying, whether directly or through other
                    parties;
                        ``(D) counseling services;
                        ``(E) travel expenses; and
                        ``(F) preparing or providing advice on tax returns;
            and for the purposes of this paragraph, the prohibited use of
            funds for political activities includes influencing the
            selection, nomination, election, or appointment of one or more
            candidates to any Federal, State or local office as codified in
            section Sec. 501 of the Internal Revenue Code of 1986 (26
            U.S.C. 501).
                ``(6) Additional lobbying restrictions.--No assistance or
            amounts made available under this section may be expended by an
            eligible grantee to pay any person to influence or attempt to
            influence any agency, elected official, officer or employee of
            a State or local government in connection with the making,
            award, extension, continuation, renewal, amendment, or
            modification of any State or local government contract, grant,
            loan, or cooperative agreement as such terms are defined in
            section 1352 of title 31, United States Code.
                ``(7) Prohibition of consideration of use for meeting
            housing goals or duty to serve.--In determining the compliance
            of the enterprises with the housing goals under this section
            and the duty to serve underserved markets under section 1335,
            the Director of the Federal Housing Finance Agency may not
            consider any Capital Magnet Fund amounts used under this
            section for eligible activities under subsection (f). The
            Director of the Federal Housing Finance Agency shall give
            credit toward the achievement of such housing goals and such
            duty to serve underserved markets to purchases by the
            enterprises of mortgages for housing that receives funding from
            Capital Magnet Fund grant amounts, but only to the extent that
            such purchases by the enterprises are funded other than with
            such grant amounts.
                ``(8) Accountability of recipients and grantees.--
                        ``(A) Tracking of funds.--The Secretary of the
                    Treasury shall--
                                ``(i) require each grantee to develop and
                            maintain a system to ensure that each recipient
                            of assistance from the Capital Magnet Fund uses
                            such amounts in accordance with this section,
                            the regulations issued under this section, and
                            any requirements or conditions under which such
                            amounts were provided; and
                                ``(ii) establish minimum requirements for
                            agreements, between the grantee and the Capital
                            Magnet Fund, regarding assistance from the
                            Capital Magnet Fund, which shall include--
                                        ``(I) appropriate periodic
                                    financial and project reporting, record
                                    retention, and audit requirements for
                                    the duration of the grant to the
                                    recipient to ensure compliance with the
                                    limitations and requirements of this
                                    section and the regulations under this
                                    section; and
                                        ``(II) any other requirements that
                                    the Secretary determines are necessary
                                    to ensure appropriate grant
                                    administration and compliance.
                        ``(B) Misuse of funds.--If the Secretary of the
                    Treasury determines, after reasonable notice and
                    opportunity for hearing, that a grantee has failed to
                    comply substantially with any provision of this section
                    and until the Secretary is satisfied that there is no
                    longer any such failure to comply, the Secretary
                    shall--
                                ``(i) reduce the amount of assistance under
                            this section to the grantee by an amount equal
                            to the amount of Capital Magnet Fund grant
                            amounts which were not used in accordance with
                            this section;
                                ``(ii) require the grantee to repay the
                            Secretary any amount of the Capital Magnet Fund
                            grant amounts which were not used in accordance
                            with this section;
                                ``(iii) limit the availability of
                            assistance under this section to the grantee to
                            activities or recipients not affected by such
                            failure to comply; or
                                ``(iv) terminate any assistance under this
                            section to the grantee.
        ``(i) Periodic Reports.--
                ``(1) In general.--The Secretary of the Treasury shall
            submit a report, on a periodic basis, to the Committee on
            Banking, Housing, and Urban Affairs of the Senate and the
            Committee on Financial Services of the House of Representatives
            describing the activities to be funded under this section.
                ``(2) Reports available to public.--The Secretary of the
            Treasury shall make the reports required under paragraph (1)
            publicly available.
        ``(j) Regulations.--
                ``(1) In general.--The Secretary of the Treasury shall
            issue regulations to carry out this section.
                ``(2) Required contents.--The regulations issued under this
            subsection shall include--
                        ``(A) authority for the Secretary to audit, provide
                    for an audit, or otherwise verify an enterprise's
                    activities, to ensure compliance with this section;
                        ``(B) a requirement that the Secretary ensure that
                    the allocation of each enterprise is audited not less
                    than annually to ensure compliance with this section;
                        ``(C) a requirement that, for the purposes of
                    subparagraphs (A) and (B), any financial statement
                    submitted by a grantee to the Secretary shall be
                    reviewed by an independent certified public accountant
                    in accordance with Statements on Standards for
                    Accounting and Review Services, issued by the American
                    Institute of Certified Public Accountants; and
                        ``(D) requirements for a process for application
                    to, and selection by, the Secretary for activities to
                    be funded with amounts from the Capital Magnet Fund,
                    which shall provide that--
                                ``(i) funds be fairly distributed to urban,
                            suburban, and rural areas; and
                                ``(ii) selection shall be based upon
                            specific criteria, including a prioritization
                            of funding based upon--
                                        ``(I) the ability to use such funds
                                    to generate additional investments;
                                        ``(II) affordable housing need
                                    (taking into account the distinct needs
                                    of different regions of the country);
                                    and
                                        ``(III) ability to obligate amounts
                                    and undertake activities so funded in a
                                    timely manner.''.

    SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.

        (a) Goals.--Financial education and counseling under this section
    shall have the goal of--
                (1) increasing the financial knowledge and decision making
            capabilities of prospective homebuyers;
                (2) assisting prospective homebuyers to develop monthly
            budgets, build personal savings, finance or plan for major
            purchases, reduce their debt, improve their financial
            stability, and set and reach their financial goals;
                (3) helping prospective homebuyers to improve their credit
            scores by understanding the relationship between their credit
            histories and their credit scores; and
                (4) educating prospective homebuyers about the options
            available to build savings for short- and long-term goals.
        (b) Grants.--
                (1) In general.--The Secretary of the Treasury (in this
            section referred to as the ``Secretary'') shall make grants to
            eligible organizations to enable such organizations to provide
            a range of financial education and counseling services to
            prospective homebuyers.
                (2) Selection.--The Secretary shall select eligible
            organizations to receive assistance under this section based on
            their experience and ability to provide financial education and
            counseling services that result in documented positive
            behavioral changes.
        (c) Eligible Organizations.--
                (1) In general.--For purposes of this section, the term
            ``eligible organization'' means an organization that is--
                        (A) certified in accordance with section 106(e)(1)
                    of the Housing and Urban Development Act of 1968 (12
                    U.S.C. 1701x(e)); or
                        (B) certified by the Office of Financial Education
                    of the Department of the Treasury for purposes of this
                    section, in accordance with paragraph (2).
                (2) OFE certification.--To be certified by the Office of
            Financial Education for purposes of this section, an eligible
            organization shall be--
                        (A) a housing counseling agency certified by the
                    Secretary of Housing and Urban Development under
                    section 106(e) of the Housing and Urban Development Act
                    of 1968;
                        (B) a State, local, or tribal government agency;
                        (C) a community development financial institution
                    (as defined in section 103(5) of the Community
                    Development Banking and Financial Institutions Act of
                    1994 (12 U.S.C. 4702(5)) or a credit union; or
                        (D) any collaborative effort of entities described
                    in any of subparagraphs (A) through (C).
        (d) Authority for Pilot Projects.--
                (1) In general.--The Secretary of the Treasury shall
            authorize not more than 5 pilot project grants to eligible
            organizations under subsection (c) in order to--
                        (A) carry out the services under this section; and
                        (B) provide such other services that will improve
                    the financial stability and economic condition of low-
                    and moderate-income and low-wealth individuals.
                (2) Goal.--The goal of the pilot project grants under this
            subsection is to--
                        (A) identify successful methods resulting in
                    positive behavioral change for financial empowerment;
                    and
                        (B) establish program models for organizations to
                    carry out effective counseling services.
        (e) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary such sums as are necessary to carry out
    this section and for the provision of additional financial educational
    services.
        (f) Study and Report on Effectiveness and Impact.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study on the effectiveness and impact of
            the grant program established under this section. Not later
            than 3 years after the date of enactment of this Act, the
            Comptroller General shall submit a report on the results of
            such study to the Committee on Banking, Housing, and Urban
            Affairs of the Senate and the Committee on Financial Services
            of the House of Representatives.
                (2) Content of study.--The study required under paragraph
            (1) shall include an evaluation of the following:
                        (A) The effectiveness of the grant program
                    established under this section in improving the
                    financial situation of homeowners and prospective
                    homebuyers served by the grant program.
                        (B) The extent to which financial education and
                    counseling services have resulted in positive
                    behavioral changes.
                        (C) The effectiveness and quality of the eligible
                    organizations providing financial education and
                    counseling services under the grant program.
        (g) Regulations.--The Secretary is authorized to promulgate such
    regulations as may be necessary to implement and administer the grant
    program authorized by this section.

    SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES.

        (a) Transfer.--Each employee of the Department of Housing and Urban
    Development whose position responsibilities primarily involve the
    establishment and enforcement of the housing goals under subpart B of
    part 2 of subtitle A of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4561 et seq.) shall be
    transferred to the Federal Housing Finance Agency for employment, not
    later than the effective date of the Federal Housing Finance Regulatory
    Reform Act of 2008, and such transfer shall be deemed a transfer of
    function for purposes of section 3503 of title 5, United States Code.
        (b) Guaranteed Positions.--
                (1) In general.--Each employee transferred under subsection
            (a) shall be guaranteed a position with the same status,
            tenure, grade, and pay as that held on the day immediately
            preceding the transfer.
                (2) No involuntary separation or reduction.--An employee
            transferred under subsection (a) holding a permanent position
            on the day immediately preceding the transfer may not be
            involuntarily separated or reduced in grade or compensation
            during the 12-month period beginning on the date of transfer,
            except for cause, or, in the case of a temporary employee,
            separated in accordance with the terms of the appointment of
            the employee.
        (c) Appointment Authority for Excepted and Senior Executive Service
    Employees.--
                (1) In general.--In the case of an employee occupying a
            position in the excepted service or the Senior Executive
            Service, any appointment authority established under law or by
            regulations of the Office of Personnel Management for filling
            such position shall be transferred, subject to paragraph (2).
                (2) Decline of transfer.--The Director may decline a
            transfer of authority under paragraph (1) to the extent that
            such authority relates to--
                        (A) a position excepted from the competitive
                    service because of its confidential, policymaking,
                    policy-determining, or policy-advocating character; or
                        (B) a noncareer position in the Senior Executive
                    Service (within the meaning of section 3132(a)(7) of
                    title 5, United States Code).
        (d) Reorganization.--If the Director determines, after the end of
    the 1-year period beginning on the effective date of the Federal
    Housing Finance Regulatory Reform Act of 2008, that a reorganization of
    the combined workforce is required, that reorganization shall be deemed
    a major reorganization for purposes of affording affected employee
    retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United
    States Code.
        (e) Employee Benefit Programs.--
                (1) In general.--Any employee described under subsection
            (a) accepting employment with the Agency as a result of a
            transfer under subsection (a) may retain, for 12 months after
            the date on which such transfer occurs, membership in any
            employee benefit program of the Agency or the Department of
            Housing and Urban Development, as applicable, including
            insurance, to which such employee belongs on such effective
            date, if--
                        (A) the employee does not elect to give up the
                    benefit or membership in the program; and
                        (B) the benefit or program is continued by the
                    Director of the Federal Housing Finance Agency.
                (2) Cost differential.--
                        (A) In general.--The difference in the costs
                    between the benefits which would have been provided by
                    the Department of Housing and Urban Development and
                    those provided by this section shall be paid by the
                    Director.
                        (B) Health insurance.--If any employee elects to
                    give up membership in a health insurance program or the
                    health insurance program is not continued by the
                    Director, the employee shall be permitted to select an
                    alternate Federal health insurance program not later
                    than 30 days after the date of such election or notice,
                    without regard to any other regularly scheduled open
                    season.

                      Subtitle C--Prompt Corrective Action

    SEC. 1141. CRITICAL CAPITAL LEVELS.

        (a) In General.--Section 1363 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4613) is
    amended--
                (1) by striking ``For'' and inserting ``(a) Enterprises.--
            For''; and
                (2) by adding at the end the following new subsection:
        ``(b) Federal Home Loan Banks.--
                ``(1) In general.--For purposes of this subtitle, the
            critical capital level for each Federal Home Loan Bank shall be
            such amount of capital as the Director shall, by regulation,
            require.
                ``(2) Consideration of other critical capital levels.--In
            establishing the critical capital level under paragraph (1) for
            the Federal Home Loan Banks, the Director shall take due
            consideration of the critical capital level established under
            subsection (a) for the enterprises, with such modifications as
            the Director determines to be appropriate to reflect the
            difference in operations between the banks and the
            enterprises.''.
        (b) Regulations.--Not later than the expiration of the 180-day
    period beginning on the date of enactment of this Act, the Director of
    the Federal Housing Finance Agency shall issue regulations pursuant to
    section 1363(b) of the Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 (as added by this section) establishing the
    critical capital level under such section.

    SEC. 1142. CAPITAL CLASSIFICATIONS.

        (a) In General.--Section 1364 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4614) is
    amended--
                (1) in the heading for subsection (a) by striking ``In
            General'' and inserting ``Enterprises'';
                (2) in subsection (c)--
                        (A) by striking ``subsection (b)'' and inserting
                    ``subsection (c)'';
                        (B) by striking ``enterprises'' and inserting
                    ``regulated entities''; and
                        (C) by striking the last sentence;
                (3) by redesignating subsections (c) (as so amended by
            paragraph (2) of this subsection) and (d) as subsections (d)
            and (f), respectively;
                (4) by striking subsection (b) and inserting the following:
        ``(b) Federal Home Loan Banks.--
                ``(1) Establishment and criteria.--For purposes of this
            subtitle, the Director shall, by regulation--
                        ``(A) establish the capital classifications
                    specified under paragraph (2) for the Federal Home Loan
                    Banks;
                        ``(B) establish criteria for each such capital
                    classification based on the amount and types of capital
                    held by a bank and the risk-based, minimum, and
                    critical capital levels for the banks and taking due
                    consideration of the capital classifications
                    established under subsection (a) for the enterprises,
                    with such modifications as the Director determines to
                    be appropriate to reflect the difference in operations
                    between the banks and the enterprises; and
                        ``(C) shall classify the Federal Home Loan Banks
                    according to such capital classifications.
                ``(2) Classifications.--The capital classifications
            specified under this paragraph are--
                        ``(A) adequately capitalized;
                        ``(B) undercapitalized;
                        ``(C) significantly undercapitalized; and
                        ``(D) critically undercapitalized.
        ``(c) Discretionary Classification.--
                ``(1) Grounds for reclassification.--The Director may
            reclassify a regulated entity under paragraph (2) if--
                        ``(A) at any time, the Director determines in
                    writing that the regulated entity is engaging in
                    conduct that could result in a rapid depletion of core
                    or total capital or the value of collateral pledged as
                    security has decreased significantly or that the value
                    of the property subject to mortgages held by the
                    regulated entity (or securitized in the case of an
                    enterprise) has decreased significantly;
                        ``(B) after notice and an opportunity for hearing,
                    the Director determines that the regulated entity is in
                    an unsafe or unsound condition; or
                        ``(C) pursuant to section 1371(b), the Director
                    deems the regulated entity to be engaging in an unsafe
                    or unsound practice.
                ``(2) Reclassification.--In addition to any other action
            authorized under this title, including the reclassification of
            a regulated entity for any reason not specified in this
            subsection, if the Director takes any action described in
            paragraph (1), the Director may classify a regulated entity--
                        ``(A) as undercapitalized, if the regulated entity
                    is otherwise classified as adequately capitalized;
                        ``(B) as significantly undercapitalized, if the
                    regulated entity is otherwise classified as
                    undercapitalized; and
                        ``(C) as critically undercapitalized, if the
                    regulated entity is otherwise classified as
                    significantly undercapitalized.''; and
                (5) by inserting after subsection (d) (as so redesignated
            by paragraph (3) of this subsection), the following new
            subsection:
        ``(e) Restriction on Capital Distributions.--
                ``(1) In general.--A regulated entity shall make no capital
            distribution if, after making the distribution, the regulated
            entity would be undercapitalized.
                ``(2) Exception.--Notwithstanding paragraph (1), the
            Director may permit a regulated entity, to the extent
            appropriate or applicable, to repurchase, redeem, retire, or
            otherwise acquire shares or ownership interests if the
            repurchase, redemption, retirement, or other acquisition--
                        ``(A) is made in connection with the issuance of
                    additional shares or obligations of the regulated
                    entity in at least an equivalent amount; and
                        ``(B) will reduce the financial obligations of the
                    regulated entity or otherwise improve the financial
                    condition of the entity.''.
        (b) Regulations.--Not later than the expiration of the 180-day
    period beginning on the date of enactment of this Act, the Director of
    the Federal Housing Finance Agency shall issue regulations to carry out
    section 1364(b) of the Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 (as added by this section), relating to capital
    classifications for the Federal Home Loan Banks.

    SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED
                  ENTITIES.

        Section 1365 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4615) is amended--
                (1) by striking ``the enterprise'' each place that term
            appears and inserting ``the regulated entity'';
                (2) by striking ``An enterprise'' each place that term
            appears and inserting ``A regulated entity'';
                (3) by striking ``an enterprise'' each place that term
            appears and inserting ``a regulated entity'';
                (4) in subsection (a)--
                        (A) by redesignating paragraphs (1) and (2) as
                    paragraphs (2) and (3), respectively;
                        (B) by inserting before paragraph (2), as
                    redesignated, the following:
                ``(1) Required monitoring.--The Director shall--
                        ``(A) closely monitor the condition of any
                    undercapitalized regulated entity;
                        ``(B) closely monitor compliance with the capital
                    restoration plan, restrictions, and requirements
                    imposed on an undercapitalized regulated entity under
                    this section; and
                        ``(C) periodically review the plan, restrictions,
                    and requirements applicable to an undercapitalized
                    regulated entity to determine whether the plan,
                    restrictions, and requirements are achieving the
                    purpose of this section.''; and
                        (C) by adding at the end the following:
                ``(4) Restriction of asset growth.--An undercapitalized
            regulated entity shall not permit its average total assets
            during any calendar quarter to exceed its average total assets
            during the preceding calendar quarter, unless--
                        ``(A) the Director has accepted the capital
                    restoration plan of the regulated entity;
                        ``(B) any increase in total assets is consistent
                    with the capital restoration plan; and
                        ``(C) the ratio of tangible equity to assets of the
                    regulated entity increases during the calendar quarter
                    at a rate sufficient to enable the regulated entity to
                    become adequately capitalized within a reasonable time.
                ``(5) Prior approval of acquisitions and new activities.--
            An undercapitalized regulated entity shall not, directly or
            indirectly, acquire any interest in any entity or engage in any
            new activity, unless--
                        ``(A) the Director has accepted the capital
                    restoration plan of the regulated entity, the regulated
                    entity is implementing the plan, and the Director
                    determines that the proposed action is consistent with
                    and will further the achievement of the plan; or
                        ``(B) the Director determines that the proposed
                    action will further the purpose of this subtitle.'';
                (5) in subsection (b)--
                        (A) in the subsection heading, by striking
                    ``Discretionary'';
                        (B) in the matter preceding paragraph (1), by
                    striking ``may'' and inserting ``shall''; and
                        (C) in paragraph (2)--
                                (i) by striking ``make, in good faith,
                            reasonable efforts necessary to''; and
                                (ii) by striking the period at the end and
                            inserting ``in any material respect.''; and
                (6) by striking subsection (c) and inserting the following:
        ``(c) Other Discretionary Safeguards.--The Director may take, with
    respect to an undercapitalized regulated entity, any of the actions
    authorized to be taken under section 1366 with respect to a
    significantly undercapitalized regulated entity, if the Director
    determines that such actions are necessary to carry out the purpose of
    this subtitle.''.

    SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
                  UNDERCAPITALIZED REGULATED ENTITIES.

        Section 1366 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4616) is amended--
                (1) in subsection (a)(2), by striking ``undercapitalized
            enterprise'' and inserting ``undercapitalized'';
                (2) by striking ``the enterprise'' each place that term
            appears and inserting ``the regulated entity'';
                (3) by striking ``An enterprise'' each place that term
            appears and inserting ``A regulated entity'';
                (4) by striking ``an enterprise'' each place that term
            appears and inserting ``a regulated entity'';
                (5) in subsection (b)--
                        (A) in the subsection heading, by striking
                    ``Discretionary Supervisory'' and inserting
                    ``Specific'';
                        (B) in the matter preceding paragraph (1), by
                    striking ``may, at any time, take any'' and inserting
                    ``shall carry out this section by taking, at any time,
                    1 or more'';
                        (C) by striking paragraph (6);
                        (D) by redesignating paragraph (5) as paragraph
                    (6);
                        (E) by inserting after paragraph (4) the following:
                ``(5) Improvement of management.--Take 1 or more of the
            following actions:
                        ``(A) New election of board.--Order a new election
                    for the board of directors of the regulated entity.
                        ``(B) Dismissal of directors or executive
                    officers.--Require the regulated entity to dismiss from
                    office any director or executive officer who had held
                    office for more than 180 days immediately before the
                    date on which the regulated entity became
                    undercapitalized. Dismissal under this subparagraph
                    shall not be construed to be a removal pursuant to the
                    enforcement powers of the Director under section 1377.
                        ``(C) Employ qualified executive officers.--Require
                    the regulated entity to employ qualified executive
                    officers (who, if the Director so specifies, shall be
                    subject to approval by the Director).''; and
                        (F) by adding at the end the following:
                ``(7) Other action.--Require the regulated entity to take
            any other action that the Director determines will better carry
            out the purpose of this section than any of the other actions
            specified in this subsection.''; and
                (6) by striking subsection (c) and inserting the following:
        ``(c) Restriction on Compensation of Executive Officers.--A
    regulated entity that is classified as significantly undercapitalized
    in accordance with section 1364 may not, without prior written approval
    by the Director--
                ``(1) pay any bonus to any executive officer; or
                ``(2) provide compensation to any executive officer at a
            rate exceeding the average rate of compensation of that officer
            (excluding bonuses, stock options, and profit sharing) during
            the 12 calendar months preceding the calendar month in which
            the regulated entity became significantly undercapitalized.''.

    SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
                  ENTITIES.

        (a) In General.--Section 1367 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617) is amended
    to read as follows:

    ``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
                  ENTITIES.

        ``(a) Appointment of the Agency as Conservator or Receiver.--
                ``(1) In general.--Notwithstanding any other provision of
            Federal or State law, the Director may appoint the Agency as
            conservator or receiver for a regulated entity in the manner
            provided under paragraph (2) or (4). All references to the
            conservator or receiver under this section are references to
            the Agency acting as conservator or receiver.
                ``(2) Discretionary appointment.--The Agency may, at the
            discretion of the Director, be appointed conservator or
            receiver for the purpose of reorganizing, rehabilitating, or
            winding up the affairs of a regulated entity.
                ``(3) Grounds for discretionary appointment of conservator
            or receiver.--The grounds for appointing conservator or
            receiver for any regulated entity under paragraph (2) are as
            follows:
                        ``(A) Assets insufficient for obligations.--The
                    assets of the regulated entity are less than the
                    obligations of the regulated entity to its creditors
                    and others.
                        ``(B) Substantial dissipation.--Substantial
                    dissipation of assets or earnings due to--
                                ``(i) any violation of any provision of
                            Federal or State law; or
                                ``(ii) any unsafe or unsound practice.
                        ``(C) Unsafe or unsound condition.--An unsafe or
                    unsound condition to transact business.
                        ``(D) Cease and desist orders.--Any willful
                    violation of a cease and desist order that has become
                    final.
                        ``(E) Concealment.--Any concealment of the books,
                    papers, records, or assets of the regulated entity, or
                    any refusal to submit the books, papers, records, or
                    affairs of the regulated entity, for inspection to any
                    examiner or to any lawful agent of the Director.
                        ``(F) Inability to meet obligations.--The regulated
                    entity is likely to be unable to pay its obligations or
                    meet the demands of its creditors in the normal course
                    of business.
                        ``(G) Losses.--The regulated entity has incurred or
                    is likely to incur losses that will deplete all or
                    substantially all of its capital, and there is no
                    reasonable prospect for the regulated entity to become
                    adequately capitalized (as defined in section
                    1364(a)(1)).
                        ``(H) Violations of law.--Any violation of any law
                    or regulation, or any unsafe or unsound practice or
                    condition that is likely to--
                                ``(i) cause insolvency or substantial
                            dissipation of assets or earnings; or
                                ``(ii) weaken the condition of the
                            regulated entity.
                        ``(I) Consent.--The regulated entity, by resolution
                    of its board of directors or its shareholders or
                    members, consents to the appointment.
                        ``(J) Undercapitalization.--The regulated entity is
                    undercapitalized or significantly undercapitalized (as
                    defined in section 1364(a)(3)), and--
                                ``(i) has no reasonable prospect of
                            becoming adequately capitalized;
                                ``(ii) fails to become adequately
                            capitalized, as required by--
                                        ``(I) section 1365(a)(1) with
                                    respect to a regulated entity; or
                                        ``(II) section 1366(a)(1) with
                                    respect to a significantly
                                    undercapitalized regulated entity;
                                ``(iii) fails to submit a capital
                            restoration plan acceptable to the Agency
                            within the time prescribed under section 1369C;
                            or
                                ``(iv) materially fails to implement a
                            capital restoration plan submitted and accepted
                            under section 1369C.
                        ``(K) Critical undercapitalization.--The regulated
                    entity is critically undercapitalized, as defined in
                    section 1364(a)(4).
                        ``(L) Money laundering.--The Attorney General
                    notifies the Director in writing that the regulated
                    entity has been found guilty of a criminal offense
                    under section 1956 or 1957 of title 18, United States
                    Code, or section 5322 or 5324 of title 31, United
                    States Code.
                ``(4) Mandatory receivership.--
                        ``(A) In general.--The Director shall appoint the
                    Agency as receiver for a regulated entity if the
                    Director determines, in writing, that--
                                ``(i) the assets of the regulated entity
                            are, and during the preceding 60 calendar days
                            have been, less than the obligations of the
                            regulated entity to its creditors and others;
                            or
                                ``(ii) the regulated entity is not, and
                            during the preceding 60 calendar days has not
                            been, generally paying the debts of the
                            regulated entity (other than debts that are the
                            subject of a bona fide dispute) as such debts
                            become due.
                        ``(B) Periodic determination required for
                    critically undercapitalized regulated entity.--If a
                    regulated entity is critically undercapitalized, the
                    Director shall make a determination, in writing, as to
                    whether the regulated entity meets the criteria
                    specified in clause (i) or (ii) of subparagraph (A)--
                                ``(i) not later than 30 calendar days after
                            the regulated entity initially becomes
                            critically undercapitalized; and
                                ``(ii) at least once during each succeeding
                            30-calendar day period.
                        ``(C) Determination not required if receivership
                    already in place.--Subparagraph (B) does not apply with
                    respect to a regulated entity in any period during
                    which the Agency serves as receiver for the regulated
                    entity.
                        ``(D) Receivership terminates conservatorship.--The
                    appointment of the Agency as receiver of a regulated
                    entity under this section shall immediately terminate
                    any conservatorship established for the regulated
                    entity under this title.
                ``(5) Judicial review.--
                        ``(A) In general.--If the Agency is appointed
                    conservator or receiver under this section, the
                    regulated entity may, within 30 days of such
                    appointment, bring an action in the United States
                    district court for the judicial district in which the
                    home office of such regulated entity is located, or in
                    the United States District Court for the District of
                    Columbia, for an order requiring the Agency to remove
                    itself as conservator or receiver.
                        ``(B) Review.--Upon the filing of an action under
                    subparagraph (A), the court shall, upon the merits,
                    dismiss such action or direct the Agency to remove
                    itself as such conservator or receiver.
                ``(6) Directors not liable for acquiescing in appointment
            of conservator or receiver.--The members of the board of
            directors of a regulated entity shall not be liable to the
            shareholders or creditors of the regulated entity for
            acquiescing in or consenting in good faith to the appointment
            of the Agency as conservator or receiver for that regulated
            entity.
                ``(7) Agency not subject to any other federal agency.--When
            acting as conservator or receiver, the Agency shall not be
            subject to the direction or supervision of any other agency of
            the United States or any State in the exercise of the rights,
            powers, and privileges of the Agency.
        ``(b) Powers and Duties of the Agency as Conservator or Receiver.--
                ``(1) Rulemaking authority of the agency.--The Agency may
            prescribe such regulations as the Agency determines to be
            appropriate regarding the conduct of conservatorships or
            receiverships.
                ``(2) General powers.--
                        ``(A) Successor to regulated entity.--The Agency
                    shall, as conservator or receiver, and by operation of
                    law, immediately succeed to--
                                ``(i) all rights, titles, powers, and
                            privileges of the regulated entity, and of any
                            stockholder, officer, or director of such
                            regulated entity with respect to the regulated
                            entity and the assets of the regulated entity;
                            and
                                ``(ii) title to the books, records, and
                            assets of any other legal custodian of such
                            regulated entity.
                        ``(B) Operate the regulated entity.--The Agency
                    may, as conservator or receiver--
                                ``(i) take over the assets of and operate
                            the regulated entity with all the powers of the
                            shareholders, the directors, and the officers
                            of the regulated entity and conduct all
                            business of the regulated entity;
                                ``(ii) collect all obligations and money
                            due the regulated entity;
                                ``(iii) perform all functions of the
                            regulated entity in the name of the regulated
                            entity which are consistent with the
                            appointment as conservator or receiver;
                                ``(iv) preserve and conserve the assets and
                            property of the regulated entity; and
                                ``(v) provide by contract for assistance in
                            fulfilling any function, activity, action, or
                            duty of the Agency as conservator or receiver.
                        ``(C) Functions of officers, directors, and
                    shareholders of a regulated entity.--The Agency may, by
                    regulation or order, provide for the exercise of any
                    function by any stockholder, director, or officer of
                    any regulated entity for which the Agency has been
                    named conservator or receiver.
                        ``(D) Powers as conservator.--The Agency may, as
                    conservator, take such action as may be--
                                ``(i) necessary to put the regulated entity
                            in a sound and solvent condition; and
                                ``(ii) appropriate to carry on the business
                            of the regulated entity and preserve and
                            conserve the assets and property of the
                            regulated entity.
                        ``(E) Additional powers as receiver.--In any case
                    in which the Agency is acting as receiver, the Agency
                    shall place the regulated entity in liquidation and
                    proceed to realize upon the assets of the regulated
                    entity in such manner as the Agency deems appropriate,
                    including through the sale of assets, the transfer of
                    assets to a limited-life regulated entity established
                    under subsection (i), or the exercise of any other
                    rights or privileges granted to the Agency under this
                    paragraph.
                        ``(F) Organization of new enterprise.--The Agency
                    may, as receiver for an enterprise, organize a
                    successor enterprise that will operate pursuant to
                    subsection (i).
                        ``(G) Transfer or sale of assets and liabilities.--
                    The Agency may, as conservator or receiver, transfer or
                    sell any asset or liability of the regulated entity in
                    default, and may do so without any approval,
                    assignment, or consent with respect to such transfer or
                    sale.
                        ``(H) Payment of valid obligations.--The Agency, as
                    conservator or receiver, shall, to the extent of
                    proceeds realized from the performance of contracts or
                    sale of the assets of a regulated entity, pay all valid
                    obligations of the regulated entity that are due and
                    payable at the time of the appointment of the Agency as
                    conservator or receiver, in accordance with the
                    prescriptions and limitations of this section.
                        ``(I) Subpoena authority.--
                                ``(i) In general.--
                                        ``(I) Agency authority.--The Agency
                                    may, as conservator or receiver, and
                                    for purposes of carrying out any power,
                                    authority, or duty with respect to a
                                    regulated entity (including determining
                                    any claim against the regulated entity
                                    and determining and realizing upon any
                                    asset of any person in the course of
                                    collecting money due the regulated
                                    entity), exercise any power established
                                    under section 1348.
                                        ``(II) Applicability of law.--The
                                    provisions of section 1348 shall apply
                                    with respect to the exercise of any
                                    power under this subparagraph, in the
                                    same manner as such provisions apply
                                    under that section.
                                ``(ii) Subpoena.--A subpoena or subpoena
                            duces tecum may be issued under clause (i) only
                            by, or with the written approval of, the
                            Director, or the designee of the Director.
                                ``(iii) Rule of construction.--This
                            subsection shall not be construed to limit any
                            rights that the Agency, in any capacity, might
                            otherwise have under section 1317 or 1379B.
                        ``(J) Incidental powers.--The Agency may, as
                    conservator or receiver--
                                ``(i) exercise all powers and authorities
                            specifically granted to conservators or
                            receivers, respectively, under this section,
                            and such incidental powers as shall be
                            necessary to carry out such powers; and
                                ``(ii) take any action authorized by this
                            section, which the Agency determines is in the
                            best interests of the regulated entity or the
                            Agency.
                        ``(K) Other provisions.--
                                ``(i) Shareholders and creditors of failed
                            regulated entity.--Notwithstanding any other
                            provision of law, the appointment of the Agency
                            as receiver for a regulated entity pursuant to
                            paragraph (2) or (4) of subsection (a) and its
                            succession, by operation of law, to the rights,
                            titles, powers, and privileges described in
                            subsection (b)(2)(A) shall terminate all rights
                            and claims that the stockholders and creditors
                            of the regulated entity may have against the
                            assets or charter of the regulated entity or
                            the Agency arising as a result of their status
                            as stockholders or creditors, except for their
                            right to payment, resolution, or other
                            satisfaction of their claims, as permitted
                            under subsections (b)(9), (c), and (e).
                                ``(ii) Assets of regulated entity.--
                            Notwithstanding any other provision of law, for
                            purposes of this section, the charter of a
                            regulated entity shall not be considered an
                            asset of the regulated entity.
                ``(3) Authority of receiver to determine claims.--
                        ``(A) In general.--The Agency may, as receiver,
                    determine claims in accordance with the requirements of
                    this subsection and any regulations prescribed under
                    paragraph (4).
                        ``(B) Notice requirements.--The receiver, in any
                    case involving the liquidation or winding up of the
                    affairs of a closed regulated entity, shall--
                                ``(i) promptly publish a notice to the
                            creditors of the regulated entity to present
                            their claims, together with proof, to the
                            receiver by a date specified in the notice
                            which shall be not less than 90 days after the
                            date of publication of such notice; and
                                ``(ii) republish such notice approximately
                            1 month and 2 months, respectively, after the
                            date of publication under clause (i).
                        ``(C) Mailing required.--The receiver shall mail a
                    notice similar to the notice published under
                    subparagraph (B)(i) at the time of such publication to
                    any creditor shown on the books of the regulated
                    entity--
                                ``(i) at the last address of the creditor
                            appearing in such books; or
                                ``(ii) upon discovery of the name and
                            address of a claimant not appearing on the
                            books of the regulated entity, within 30 days
                            after the discovery of such name and address.
                ``(4) Rulemaking authority relating to determination of
            claims.--Subject to subsection (c), the Director may prescribe
            regulations regarding the allowance or disallowance of claims
            by the receiver and providing for administrative determination
            of claims and review of such determination.
                ``(5) Procedures for determination of claims.--
                        ``(A) Determination period.--
                                ``(i) In general.--Before the end of the
                            180-day period beginning on the date on which
                            any claim against a regulated entity is filed
                            with the Agency as receiver, the Agency shall
                            determine whether to allow or disallow the
                            claim and shall notify the claimant of any
                            determination with respect to such claim.
                                ``(ii) Extension of time.--The period
                            described in clause (i) may be extended by a
                            written agreement between the claimant and the
                            Agency.
                                ``(iii) Mailing of notice sufficient.--The
                            requirements of clause (i) shall be deemed to
                            be satisfied if the notice of any determination
                            with respect to any claim is mailed to the last
                            address of the claimant which appears--
                                        ``(I) on the books of the regulated
                                    entity;
                                        ``(II) in the claim filed by the
                                    claimant; or
                                        ``(III) in documents submitted in
                                    proof of the claim.
                                ``(iv) Contents of notice of
                            disallowance.--If any claim filed under clause
                            (i) is disallowed, the notice to the claimant
                            shall contain--
                                        ``(I) a statement of each reason
                                    for the disallowance; and
                                        ``(II) the procedures available for
                                    obtaining agency review of the
                                    determination to disallow the claim or
                                    judicial determination of the claim.
                        ``(B) Allowance of proven claim.--The receiver
                    shall allow any claim received on or before the date
                    specified in the notice published under paragraph
                    (3)(B)(i) by the receiver from any claimant which is
                    proved to the satisfaction of the receiver.
                        ``(C) Disallowance of claims filed after filing
                    period.--Claims filed after the date specified in the
                    notice published under paragraph (3)(B)(i), or the date
                    specified under paragraph (3)(C), shall be disallowed
                    and such disallowance shall be final.
                        ``(D) Authority to disallow claims.--
                                ``(i) In general.--The receiver may
                            disallow any portion of any claim by a creditor
                            or claim of security, preference, or priority
                            which is not proved to the satisfaction of the
                            receiver.
                                ``(ii) Payments to less than fully secured
                            creditors.--In the case of a claim of a
                            creditor against a regulated entity which is
                            secured by any property or other asset of such
                            regulated entity, the receiver--
                                        ``(I) may treat the portion of such
                                    claim which exceeds an amount equal to
                                    the fair market value of such property
                                    or other asset as an unsecured claim
                                    against the regulated entity; and
                                        ``(II) may not make any payment
                                    with respect to such unsecured portion
                                    of the claim, other than in connection
                                    with the disposition of all claims of
                                    unsecured creditors of the regulated
                                    entity.
                                ``(iii) Exceptions.--No provision of this
                            paragraph shall apply with respect to--
                                        ``(I) any extension of credit from
                                    any Federal Reserve Bank, Federal Home
                                    Loan Bank, or the United States
                                    Treasury; or
                                        ``(II) any security interest in the
                                    assets of the regulated entity securing
                                    any such extension of credit.
                        ``(E) No judicial review of determination pursuant
                    to subparagraph (d).--No court may review the
                    determination of the Agency under subparagraph (D) to
                    disallow a claim.
                        ``(F) Legal effect of filing.--
                                ``(i) Statute of limitation tolled.--For
                            purposes of any applicable statute of
                            limitations, the filing of a claim with the
                            receiver shall constitute a commencement of an
                            action.
                                ``(ii) No prejudice to other actions.--
                            Subject to paragraph (10), the filing of a
                            claim with the receiver shall not prejudice any
                            right of the claimant to continue any action
                            which was filed before the date of the
                            appointment of the receiver, subject to the
                            determination of claims by the receiver.
                ``(6) Provision for judicial determination of claims.--
                        ``(A) In general.--The claimant may file suit on a
                    claim (or continue an action commenced before the
                    appointment of the receiver) in the district or
                    territorial court of the United States for the district
                    within which the principal place of business of the
                    regulated entity is located or the United States
                    District Court for the District of Columbia (and such
                    court shall have jurisdiction to hear such claim),
                    before the end of the 60-day period beginning on the
                    earlier of--
                                ``(i) the end of the period described in
                            paragraph (5)(A)(i) with respect to any claim
                            against a regulated entity for which the Agency
                            is receiver; or
                                ``(ii) the date of any notice of
                            disallowance of such claim pursuant to
                            paragraph (5)(A)(i).
                        ``(B) Statute of limitations.--A claim shall be
                    deemed to be disallowed (other than any portion of such
                    claim which was allowed by the receiver), and such
                    disallowance shall be final, and the claimant shall
                    have no further rights or remedies with respect to such
                    claim, if the claimant fails, before the end of the 60-
                    day period described under subparagraph (A), to file
                    suit on such claim (or continue an action commenced
                    before the appointment of the receiver).
                ``(7) Review of claims.--
                        ``(A) Other review procedures.--
                                ``(i) In general.--The Agency shall
                            establish such alternative dispute resolution
                            processes as may be appropriate for the
                            resolution of claims filed under paragraph
                            (5)(A)(i).
                                ``(ii) Criteria.--In establishing
                            alternative dispute resolution processes, the
                            Agency shall strive for procedures which are
                            expeditious, fair, independent, and low cost.
                                ``(iii) Voluntary binding or nonbinding
                            procedures.--The Agency may establish both
                            binding and nonbinding processes under this
                            subparagraph, which may be conducted by any
                            government or private party. All parties,
                            including the claimant and the Agency, must
                            agree to the use of the process in a particular
                            case.
                        ``(B) Consideration of incentives.--The Agency
                    shall seek to develop incentives for claimants to
                    participate in the alternative dispute resolution
                    process.
                ``(8) Expedited determination of claims.--
                        ``(A) Establishment required.--The Agency shall
                    establish a procedure for expedited relief outside of
                    the routine claims process established under paragraph
                    (5) for claimants who--
                                ``(i) allege the existence of legally valid
                            and enforceable or perfected security interests
                            in assets of any regulated entity for which the
                            Agency has been appointed receiver; and
                                ``(ii) allege that irreparable injury will
                            occur if the routine claims procedure is
                            followed.
                        ``(B) Determination period.--Before the end of the
                    90-day period beginning on the date on which any claim
                    is filed in accordance with the procedures established
                    under subparagraph (A), the Director shall--
                                ``(i) determine--
                                        ``(I) whether to allow or disallow
                                    such claim; or
                                        ``(II) whether such claim should be
                                    determined pursuant to the procedures
                                    established under paragraph (5); and
                                ``(ii) notify the claimant of the
                            determination, and if the claim is disallowed,
                            provide a statement of each reason for the
                            disallowance and the procedure for obtaining
                            agency review or judicial determination.
                        ``(C) Period for filing or renewing suit.--Any
                    claimant who files a request for expedited relief shall
                    be permitted to file a suit, or to continue a suit
                    filed before the date of appointment of the receiver,
                    seeking a determination of the rights of the claimant
                    with respect to such security interest after the
                    earlier of--
                                ``(i) the end of the 90-day period
                            beginning on the date of the filing of a
                            request for expedited relief; or
                                ``(ii) the date on which the Agency denies
                            the claim.
                        ``(D) Statute of limitations.--If an action
                    described under subparagraph (C) is not filed, or the
                    motion to renew a previously filed suit is not made,
                    before the end of the 30-day period beginning on the
                    date on which such action or motion may be filed under
                    subparagraph (B), the claim shall be deemed to be
                    disallowed as of the end of such period (other than any
                    portion of such claim which was allowed by the
                    receiver), such disallowance shall be final, and the
                    claimant shall have no further rights or remedies with
                    respect to such claim.
                        ``(E) Legal effect of filing.--
                                ``(i) Statute of limitation tolled.--For
                            purposes of any applicable statute of
                            limitations, the filing of a claim with the
                            receiver shall constitute a commencement of an
                            action.
                                ``(ii) No prejudice to other actions.--
                            Subject to paragraph (10), the filing of a
                            claim with the receiver shall not prejudice any
                            right of the claimant to continue any action
                            that was filed before the appointment of the
                            receiver, subject to the determination of
                            claims by the receiver.
                ``(9) Payment of claims.--
                        ``(A) In general.--The receiver may, in the
                    discretion of the receiver, and to the extent that
                    funds are available from the assets of the regulated
                    entity, pay creditor claims, in such manner and amounts
                    as are authorized under this section, which are--
                                ``(i) allowed by the receiver;
                                ``(ii) approved by the Agency pursuant to a
                            final determination pursuant to paragraph (7)
                            or (8); or
                                ``(iii) determined by the final judgment of
                            any court of competent jurisdiction.
                        ``(B) Agreements against the interest of the
                    agency.--No agreement that tends to diminish or defeat
                    the interest of the Agency in any asset acquired by the
                    Agency as receiver under this section shall be valid
                    against the Agency unless such agreement is in writing
                    and executed by an authorized officer or representative
                    of the regulated entity.
                        ``(C) Payment of dividends on claims.--The receiver
                    may, in the sole discretion of the receiver, pay from
                    the assets of the regulated entity dividends on proved
                    claims at any time, and no liability shall attach to
                    the Agency by reason of any such payment, for failure
                    to pay dividends to a claimant whose claim is not
                    proved at the time of any such payment.
                        ``(D) Rulemaking authority of the director.--The
                    Director may prescribe such rules, including
                    definitions of terms, as the Director deems appropriate
                    to establish a single uniform interest rate for, or to
                    make payments of post-insolvency interest to creditors
                    holding proven claims against the receivership estates
                    of the regulated entity, following satisfaction by the
                    receiver of the principal amount of all creditor
                    claims.
                ``(10) Suspension of legal actions.--
                        ``(A) In general.--After the appointment of a
                    conservator or receiver for a regulated entity, the
                    conservator or receiver may, in any judicial action or
                    proceeding to which such regulated entity is or becomes
                    a party, request a stay for a period not to exceed--
                                ``(i) 45 days, in the case of any
                            conservator; and
                                ``(ii) 90 days, in the case of any
                            receiver.
                        ``(B) Grant of stay by all courts required.--Upon
                    receipt of a request by the conservator or receiver
                    under subparagraph (A) for a stay of any judicial
                    action or proceeding in any court with jurisdiction of
                    such action or proceeding, the court shall grant such
                    stay as to all parties.
                ``(11) Additional rights and duties.--
                        ``(A) Prior final adjudication.--The Agency shall
                    abide by any final unappealable judgment of any court
                    of competent jurisdiction which was rendered before the
                    appointment of the Agency as conservator or receiver.
                        ``(B) Rights and remedies of conservator or
                    receiver.--In the event of any appealable judgment, the
                    Agency as conservator or receiver--
                                ``(i) shall have all of the rights and
                            remedies available to the regulated entity
                            (before the appointment of such conservator or
                            receiver) and the Agency, including removal to
                            Federal court and all appellate rights; and
                                ``(ii) shall not be required to post any
                            bond in order to pursue such remedies.
                        ``(C) No attachment or execution.--No attachment or
                    execution may issue by any court upon assets in the
                    possession of the receiver, or upon the charter, of a
                    regulated entity for which the Agency has been
                    appointed receiver.
                        ``(D) Limitation on judicial review.--Except as
                    otherwise provided in this subsection, no court shall
                    have jurisdiction over--
                                ``(i) any claim or action for payment from,
                            or any action seeking a determination of rights
                            with respect to, the assets or charter of any
                            regulated entity for which the Agency has been
                            appointed receiver; or
                                ``(ii) any claim relating to any act or
                            omission of such regulated entity or the Agency
                            as receiver.
                        ``(E) Disposition of assets.--In exercising any
                    right, power, privilege, or authority as conservator or
                    receiver in connection with any sale or disposition of
                    assets of a regulated entity for which the Agency has
                    been appointed conservator or receiver, the Agency
                    shall conduct its operations in a manner which--
                                ``(i) maximizes the net present value
                            return from the sale or disposition of such
                            assets;
                                ``(ii) minimizes the amount of any loss
                            realized in the resolution of cases; and
                                ``(iii) ensures adequate competition and
                            fair and consistent treatment of offerors.
                ``(12) Statute of limitations for actions brought by
            conservator or receiver.--
                        ``(A) In general.--Notwithstanding any provision of
                    any contract, the applicable statute of limitations
                    with regard to any action brought by the Agency as
                    conservator or receiver shall be--
                                ``(i) in the case of any contract claim,
                            the longer of--
                                        ``(I) the 6-year period beginning
                                    on the date on which the claim accrues;
                                    or
                                        ``(II) the period applicable under
                                    State law; and
                                ``(ii) in the case of any tort claim, the
                            longer of--
                                        ``(I) the 3-year period beginning
                                    on the date on which the claim accrues;
                                    or
                                        ``(II) the period applicable under
                                    State law.
                        ``(B) Determination of the date on which a claim
                    accrues.--For purposes of subparagraph (A), the date on
                    which the statute of limitations begins to run on any
                    claim described in such subparagraph shall be the later
                    of--
                                ``(i) the date of the appointment of the
                            Agency as conservator or receiver; or
                                ``(ii) the date on which the cause of
                            action accrues.
                ``(13) Revival of expired state causes of action.--
                        ``(A) In general.--In the case of any tort claim
                    described under clause (ii) for which the statute of
                    limitations applicable under State law with respect to
                    such claim has expired not more than 5 years before the
                    appointment of the Agency as conservator or receiver,
                    the Agency may bring an action as conservator or
                    receiver on such claim without regard to the expiration
                    of the statute of limitations applicable under State
                    law.
                        ``(B) Claims described.--A tort claim referred to
                    under clause (i) is a claim arising from fraud,
                    intentional misconduct resulting in unjust enrichment,
                    or intentional misconduct resulting in substantial loss
                    to the regulated entity.
                ``(14) Accounting and recordkeeping requirements.--
                        ``(A) In general.--The Agency as conservator or
                    receiver shall, consistent with the accounting and
                    reporting practices and procedures established by the
                    Agency, maintain a full accounting of each
                    conservatorship and receivership or other disposition
                    of a regulated entity in default.
                        ``(B) Annual accounting or report.--With respect to
                    each conservatorship or receivership, the Agency shall
                    make an annual accounting or report available to the
                    Board, the Comptroller General of the United States,
                    the Committee on Banking, Housing, and Urban Affairs of
                    the Senate, and the Committee on Financial Services of
                    the House of Representatives.
                        ``(C) Availability of reports.--Any report prepared
                    under subparagraph (B) shall be made available by the
                    Agency upon request to any shareholder of a regulated
                    entity or any member of the public.
                        ``(D) Recordkeeping requirement.--After the end of
                    the 6-year period beginning on the date on which the
                    conservatorship or receivership is terminated by the
                    Director, the Agency may destroy any records of such
                    regulated entity which the Agency, in the discretion of
                    the Agency, determines to be unnecessary, unless
                    directed not to do so by a court of competent
                    jurisdiction or governmental agency, or prohibited by
                    law.
                ``(15) Fraudulent transfers.--
                        ``(A) In general.--The Agency, as conservator or
                    receiver, may avoid a transfer of any interest of an
                    entity-affiliated party, or any person determined by
                    the conservator or receiver to be a debtor of the
                    regulated entity, in property, or any obligation
                    incurred by such party or person, that was made within
                    5 years of the date on which the Agency was appointed
                    conservator or receiver, if such party or person
                    voluntarily or involuntarily made such transfer or
                    incurred such liability with the intent to hinder,
                    delay, or defraud the regulated entity, the Agency, the
                    conservator, or receiver.
                        ``(B) Right of recovery.--To the extent a transfer
                    is avoided under subparagraph (A), the conservator or
                    receiver may recover, for the benefit of the regulated
                    entity, the property transferred, or, if a court so
                    orders, the value of such property (at the time of such
                    transfer) from--
                                ``(i) the initial transferee of such
                            transfer or the entity-affiliated party or
                            person for whose benefit such transfer was
                            made; or
                                ``(ii) any immediate or mediate transferee
                            of any such initial transferee.
                        ``(C) Rights of transferee or obligee.--The
                    conservator or receiver may not recover under
                    subparagraph (B) from--
                                ``(i) any transferee that takes for value,
                            including satisfaction or securing of a present
                            or antecedent debt, in good faith; or
                                ``(ii) any immediate or mediate good faith
                            transferee of such transferee.
                        ``(D) Rights under this paragraph.--The rights
                    under this paragraph of the conservator or receiver
                    described under subparagraph (A) shall be superior to
                    any rights of a trustee or any other party (other than
                    any party which is a Federal agency) under title 11,
                    United States Code.
                ``(16) Attachment of assets and other injunctive relief.--
            Subject to paragraph (17), any court of competent jurisdiction
            may, at the request of the conservator or receiver, issue an
            order in accordance with rule 65 of the Federal Rules of Civil
            Procedure, including an order placing the assets of any person
            designated by the conservator or receiver under the control of
            the court, and appointing a trustee to hold such assets.
                ``(17) Standards of proof.--Rule 65 of the Federal Rules of
            Civil Procedure shall apply with respect to any proceeding
            under paragraph (16) without regard to the requirement of such
            rule that the applicant show that the injury, loss, or damage
            is irreparable and immediate.
                ``(18) Treatment of claims arising from breach of contracts
            executed by the conservator or receiver.--
                        ``(A) In general.--Notwithstanding any other
                    provision of this subsection, any final and
                    unappealable judgment for monetary damages entered
                    against the conservator or receiver for the breach of
                    an agreement executed or approved in writing by the
                    conservator or receiver after the date of its
                    appointment, shall be paid as an administrative expense
                    of the conservator or receiver.
                        ``(B) No limitation of power.--Nothing in this
                    paragraph shall be construed to limit the power of the
                    conservator or receiver to exercise any rights under
                    contract or law, including to terminate, breach,
                    cancel, or otherwise discontinue such agreement.
                ``(19) General exceptions.--
                        ``(A) Limitations.--The rights of the conservator
                    or receiver appointed under this section shall be
                    subject to the limitations on the powers of a receiver
                    under sections 402 through 407 of the Federal Deposit
                    Insurance Corporation Improvement Act of 1991 (12
                    U.S.C. 4402 through 4407).
                        ``(B) Mortgages held in trust.--
                                ``(i) In general.--Any mortgage, pool of
                            mortgages, or interest in a pool of mortgages
                            held in trust, custodial, or agency capacity by
                            a regulated entity for the benefit of any
                            person other than the regulated entity shall
                            not be available to satisfy the claims of
                            creditors generally, except that nothing in
                            this clause shall be construed to expand or
                            otherwise affect the authority of any regulated
                            entity.
                                ``(ii) Holding of mortgages.--Any mortgage,
                            pool of mortgages, or interest in a pool of
                            mortgages described in clause (i) shall be held
                            by the conservator or receiver appointed under
                            this section for the beneficial owners of such
                            mortgage, pool of mortgages, or interest in
                            accordance with the terms of the agreement
                            creating such trust, custodial, or other agency
                            arrangement.
                                ``(iii) Liability of conservator or
                            receiver.--The liability of the conservator or
                            receiver appointed under this section for
                            damages shall, in the case of any contingent or
                            unliquidated claim relating to the mortgages
                            held in trust, be estimated in accordance with
                            the regulations of the Director.
        ``(c) Priority of Expenses and Unsecured Claims.--
                ``(1) In general.--Unsecured claims against a regulated
            entity, or the receiver therefor, that are proven to the
            satisfaction of the receiver shall have priority in the
            following order:
                        ``(A) Administrative expenses of the receiver.
                        ``(B) Any other general or senior liability of the
                    regulated entity (which is not a liability described
                    under subparagraph (C) or (D).
                        ``(C) Any obligation subordinated to general
                    creditors (which is not an obligation described under
                    subparagraph (D)).
                        ``(D) Any obligation to shareholders or members
                    arising as a result of their status as shareholder or
                    members.
                ``(2) Creditors similarly situated.--All creditors that are
            similarly situated under paragraph (1) shall be treated in a
            similar manner, except that the receiver may take any action
            (including making payments) that does not comply with this
            subsection, if--
                        ``(A) the Director determines that such action is
                    necessary to maximize the value of the assets of the
                    regulated entity, to maximize the present value return
                    from the sale or other disposition of the assets of the
                    regulated entity, or to minimize the amount of any loss
                    realized upon the sale or other disposition of the
                    assets of the regulated entity; and
                        ``(B) all creditors that are similarly situated
                    under paragraph (1) receive not less than the amount
                    provided in subsection (e)(2).
                ``(3) Definition.--As used in this subsection, the term
            `administrative expenses of the receiver' includes--
                        ``(A) the actual, necessary costs and expenses
                    incurred by the receiver in preserving the assets of a
                    failed regulated entity or liquidating or otherwise
                    resolving the affairs of a failed regulated entity; and
                        ``(B) any obligations that the receiver determines
                    are necessary and appropriate to facilitate the smooth
                    and orderly liquidation or other resolution of the
                    regulated entity.
        ``(d) Provisions Relating to Contracts Entered Into Before
    Appointment of Conservator or Receiver.--
                ``(1) Authority to repudiate contracts.--In addition to any
            other rights a conservator or receiver may have, the
            conservator or receiver for any regulated entity may disaffirm
            or repudiate any contract or lease--
                        ``(A) to which such regulated entity is a party;
                        ``(B) the performance of which the conservator or
                    receiver, in its sole discretion, determines to be
                    burdensome; and
                        ``(C) the disaffirmance or repudiation of which the
                    conservator or receiver determines, in its sole
                    discretion, will promote the orderly administration of
                    the affairs of the regulated entity.
                ``(2) Timing of repudiation.--The conservator or receiver
            shall determine whether or not to exercise the rights of
            repudiation under this subsection within a reasonable period
            following such appointment.
                ``(3) Claims for damages for repudiation.--
                        ``(A) In general.--Except as otherwise provided
                    under subparagraph (C) and paragraphs (4), (5), and
                    (6), the liability of the conservator or receiver for
                    the disaffirmance or repudiation of any contract
                    pursuant to paragraph (1) shall be--
                                ``(i) limited to actual direct compensatory
                            damages; and
                                ``(ii) determined as of--
                                        ``(I) the date of the appointment
                                    of the conservator or receiver; or
                                        ``(II) in the case of any contract
                                    or agreement referred to in paragraph
                                    (8), the date of the disaffirmance or
                                    repudiation of such contract or
                                    agreement.
                        ``(B) No liability for other damages.--For purposes
                    of subparagraph (A), the term `actual direct
                    compensatory damages' shall not include--
                                ``(i) punitive or exemplary damages;
                                ``(ii) damages for lost profits or
                            opportunity; or
                                ``(iii) damages for pain and suffering.
                        ``(C) Measure of damages for repudiation of
                    financial contracts.--In the case of any qualified
                    financial contract or agreement to which paragraph (8)
                    applies, compensatory damages shall be--
                                ``(i) deemed to include normal and
                            reasonable costs of cover or other reasonable
                            measures of damages utilized in the industries
                            for such contract and agreement claims; and
                                ``(ii) paid in accordance with this
                            subsection and subsection (e), except as
                            otherwise specifically provided in this
                            section.
                ``(4) Leases under which the regulated entity is the
            lessee.--
                        ``(A) In general.--If the conservator or receiver
                    disaffirms or repudiates a lease under which the
                    regulated entity was the lessee, the conservator or
                    receiver shall not be liable for any damages (other
                    than damages determined under subparagraph (B)) for the
                    disaffirmance or repudiation of such lease.
                        ``(B) Payments of rent.--Notwithstanding
                    subparagraph (A), the lessor under a lease to which
                    that subparagraph applies shall--
                                ``(i) be entitled to the contractual rent
                            accruing before the later of the date on
                            which--
                                        ``(I) the notice of disaffirmance
                                    or repudiation is mailed; or
                                        ``(II) the disaffirmance or
                                    repudiation becomes effective, unless
                                    the lessor is in default or breach of
                                    the terms of the lease;
                                ``(ii) have no claim for damages under any
                            acceleration clause or other penalty provision
                            in the lease; and
                                ``(iii) have a claim for any unpaid rent,
                            subject to all appropriate offsets and
                            defenses, due as of the date of the
                            appointment, which shall be paid in accordance
                            with this subsection and subsection (e).
                ``(5) Leases under which the regulated entity is the
            lessor.--
                        ``(A) In general.--If the conservator or receiver
                    repudiates an unexpired written lease of real property
                    of the regulated entity under which the regulated
                    entity is the lessor and the lessee is not, as of the
                    date of such repudiation, in default, the lessee under
                    such lease may either--
                                ``(i) treat the lease as terminated by such
                            repudiation; or
                                ``(ii) remain in possession of the
                            leasehold interest for the balance of the term
                            of the lease, unless the lessee defaults under
                            the terms of the lease after the date of such
                            repudiation.
                        ``(B) Provisions applicable to lessee remaining in
                    possession.--If any lessee under a lease described
                    under subparagraph (A) remains in possession of a
                    leasehold interest under clause (ii) of subparagraph
                    (A)--
                                ``(i) the lessee--
                                        ``(I) shall continue to pay the
                                    contractual rent pursuant to the terms
                                    of the lease after the date of the
                                    repudiation of such lease; and
                                        ``(II) may offset against any rent
                                    payment which accrues after the date of
                                    the repudiation of the lease, and any
                                    damages which accrue after such date
                                    due to the nonperformance of any
                                    obligation of the regulated entity
                                    under the lease after such date; and
                                ``(ii) the conservator or receiver shall
                            not be liable to the lessee for any damages
                            arising after such date as a result of the
                            repudiation, other than the amount of any
                            offset allowed under clause (i)(II).
                ``(6) Contracts for the sale of real property.--
                        ``(A) In general.--If the conservator or receiver
                    repudiates any contract for the sale of real property
                    and the purchaser of such real property under such
                    contract is in possession, and is not, as of the date
                    of such repudiation, in default, such purchaser may
                    either--
                                ``(i) treat the contract as terminated by
                            such repudiation; or
                                ``(ii) remain in possession of such real
                            property.
                        ``(B) Provisions applicable to purchaser remaining
                    in possession.--If any purchaser of real property under
                    any contract described under subparagraph (A) remains
                    in possession of such property under clause (ii) of
                    subparagraph (A)--
                                ``(i) the purchaser--
                                        ``(I) shall continue to make all
                                    payments due under the contract after
                                    the date of the repudiation of the
                                    contract; and
                                        ``(II) may offset against any such
                                    payments any damages which accrue after
                                    such date due to the nonperformance
                                    (after such date) of any obligation of
                                    the regulated entity under the
                                    contract; and
                                ``(ii) the conservator or receiver shall--
                                        ``(I) not be liable to the
                                    purchaser for any damages arising after
                                    such date as a result of the
                                    repudiation, other than the amount of
                                    any offset allowed under clause
                                    (i)(II);
                                        ``(II) deliver title to the
                                    purchaser in accordance with the
                                    provisions of the contract; and
                                        ``(III) have no obligation under
                                    the contract other than the performance
                                    required under subclause (II).
                        ``(C) Assignment and sale allowed.--
                                ``(i) In general.--No provision of this
                            paragraph shall be construed as limiting the
                            right of the conservator or receiver to assign
                            the contract described under subparagraph (A),
                            and sell the property subject to the contract
                            and the provisions of this paragraph.
                                ``(ii) No liability after assignment and
                            sale.--If an assignment and sale described
                            under clause (i) is consummated, the
                            conservator or receiver shall have no further
                            liability under the contract described under
                            subparagraph (A), or with respect to the real
                            property which was the subject of such
                            contract.
                ``(7) Service contracts.--
                        ``(A) Services performed before appointment.--In
                    the case of any contract for services between any
                    person and any regulated entity for which the Agency
                    has been appointed conservator or receiver, any claim
                    of such person for services performed before the
                    appointment of the conservator or receiver shall be--
                                ``(i) a claim to be paid in accordance with
                            subsections (b) and (e); and
                                ``(ii) deemed to have arisen as of the date
                            on which the conservator or receiver was
                            appointed.
                        ``(B) Services performed after appointment and
                    prior to repudiation.--If, in the case of any contract
                    for services described under subparagraph (A), the
                    conservator or receiver accepts performance by the
                    other person before the conservator or receiver makes
                    any determination to exercise the right of repudiation
                    of such contract under this section--
                                ``(i) the other party shall be paid under
                            the terms of the contract for the services
                            performed; and
                                ``(ii) the amount of such payment shall be
                            treated as an administrative expense of the
                            conservatorship or receivership.
                        ``(C) Acceptance of performance no bar to
                    subsequent repudiation.--The acceptance by the
                    conservator or receiver of services referred to under
                    subparagraph (B) in connection with a contract
                    described in such subparagraph shall not affect the
                    right of the conservator or receiver to repudiate such
                    contract under this section at any time after such
                    performance.
                ``(8) Certain qualified financial contracts.--
                        ``(A) Rights of parties to contracts.--Subject to
                    paragraphs (9) and (10), and notwithstanding any other
                    provision of this title (other than subsection
                    (b)(9)(B) of this section), any other Federal law, or
                    the law of any State, no person shall be stayed or
                    prohibited from exercising--
                                ``(i) any right of that person to cause the
                            termination, liquidation, or acceleration of
                            any qualified financial contract with a
                            regulated entity that arises upon the
                            appointment of the Agency as receiver for such
                            regulated entity at any time after such
                            appointment;
                                ``(ii) any right under any security
                            agreement or arrangement or other credit
                            enhancement relating to one or more qualified
                            financial contracts; or
                                ``(iii) any right to offset or net out any
                            termination value, payment amount, or other
                            transfer obligation arising under or in
                            connection with 1 or more contracts and
                            agreements described in clause (i), including
                            any master agreement for such contracts or
                            agreements.
                        ``(B) Applicability of other provisions.--
                    Subsection (b)(10) shall apply in the case of any
                    judicial action or proceeding brought against any
                    receiver referred to under subparagraph (A), or the
                    regulated entity for which such receiver was appointed,
                    by any party to a contract or agreement described under
                    subparagraph (A)(i) with such regulated entity.
                        ``(C) Certain transfers not avoidable.--
                                ``(i) In general.--Notwithstanding
                            paragraph (11), or any other provision of
                            Federal or State law relating to the avoidance
                            of preferential or fraudulent transfers, the
                            Agency, whether acting as such or as
                            conservator or receiver of a regulated entity,
                            may not avoid any transfer of money or other
                            property in connection with any qualified
                            financial contract with a regulated entity.
                                ``(ii) Exception for certain transfers.--
                            Clause (i) shall not apply to any transfer of
                            money or other property in connection with any
                            qualified financial contract with a regulated
                            entity if the Agency determines that the
                            transferee had actual intent to hinder, delay,
                            or defraud such regulated entity, the creditors
                            of such regulated entity, or any conservator or
                            receiver appointed for such regulated entity.
                        ``(D) Certain contracts and agreements defined.--In
                    this subsection the following definitions shall apply:
                                ``(i) Qualified financial contract.--The
                            term `qualified financial contract' means any
                            securities contract, commodity contract,
                            forward contract, repurchase agreement, swap
                            agreement, and any similar agreement that the
                            Agency determines by regulation, resolution, or
                            order to be a qualified financial contract for
                            purposes of this paragraph.
                                ``(ii) Securities contract.--The term
                            `securities contract'--
                                        ``(I) means a contract for the
                                    purchase, sale, or loan of a security,
                                    a certificate of deposit, a mortgage
                                    loan, or any interest in a mortgage
                                    loan, a group or index of securities,
                                    certificates of deposit, or mortgage
                                    loans or interests therein (including
                                    any interest therein or based on the
                                    value thereof) or any option on any of
                                    the foregoing, including any option to
                                    purchase or sell any such security,
                                    certificate of deposit, mortgage loan,
                                    interest, group or index, or option,
                                    and including any repurchase or reverse
                                    repurchase transaction on any such
                                    security, certificate of deposit,
                                    mortgage loan, interest, group or
                                    index, or option;
                                        ``(II) does not include any
                                    purchase, sale, or repurchase
                                    obligation under a participation in a
                                    commercial mortgage loan, unless the
                                    Agency determines by regulation,
                                    resolution, or order to include any
                                    such agreement within the meaning of
                                    such term;
                                        ``(III) means any option entered
                                    into on a national securities exchange
                                    relating to foreign currencies;
                                        ``(IV) means the guarantee by or to
                                    any securities clearing agency of any
                                    settlement of cash, securities,
                                    certificates of deposit, mortgage loans
                                    or interests therein, group or index of
                                    securities, certificates of deposit, or
                                    mortgage loans or interests therein
                                    (including any interest therein or
                                    based on the value thereof) or option
                                    on any of the foregoing, including any
                                    option to purchase or sell any such
                                    security, certificate of deposit,
                                    mortgage loan, interest, group or
                                    index, or option;
                                        ``(V) means any margin loan;
                                        ``(VI) means any other agreement or
                                    transaction that is similar to any
                                    agreement or transaction referred to in
                                    this clause;
                                        ``(VII) means any combination of
                                    the agreements or transactions referred
                                    to in this clause;
                                        ``(VIII) means any option to enter
                                    into any agreement or transaction
                                    referred to in this clause;
                                        ``(IX) means a master agreement
                                    that provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (III), (IV), (V), (VI), (VII), or
                                    (VIII), together with all supplements
                                    to any such master agreement, without
                                    regard to whether the master agreement
                                    provides for an agreement or
                                    transaction that is not a securities
                                    contract under this clause, except that
                                    the master agreement shall be
                                    considered to be a securities contract
                                    under this clause only with respect to
                                    each agreement or transaction under the
                                    master agreement that is referred to in
                                    subclause (I), (III), (IV), (V), (VI),
                                    (VII), or (VIII); and
                                        ``(X) means any security agreement
                                    or arrangement or other credit
                                    enhancement related to any agreement or
                                    transaction referred to in this clause,
                                    including any guarantee or
                                    reimbursement obligation in connection
                                    with any agreement or transaction
                                    referred to in this clause.
                                ``(iii) Commodity contract.--The term
                            `commodity contract' means--
                                        ``(I) with respect to a futures
                                    commission merchant, a contract for the
                                    purchase or sale of a commodity for
                                    future delivery on, or subject to the
                                    rules of, a contract market or board of
                                    trade;
                                        ``(II) with respect to a foreign
                                    futures commission merchant, a foreign
                                    future;
                                        ``(III) with respect to a leverage
                                    transaction merchant, a leverage
                                    transaction;
                                        ``(IV) with respect to a clearing
                                    organization, a contract for the
                                    purchase or sale of a commodity for
                                    future delivery on, or subject to the
                                    rules of, a contract market or board of
                                    trade that is cleared by such clearing
                                    organization, or commodity option
                                    traded on, or subject to the rules of,
                                    a contract market or board of trade
                                    that is cleared by such clearing
                                    organization;
                                        ``(V) with respect to a commodity
                                    options dealer, a commodity option;
                                        ``(VI) any other agreement or
                                    transaction that is similar to any
                                    agreement or transaction referred to in
                                    this clause;
                                        ``(VII) any combination of the
                                    agreements or transactions referred to
                                    in this clause;
                                        ``(VIII) any option to enter into
                                    any agreement or transaction referred
                                    to in this clause;
                                        ``(IX) a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (II), (III), (IV), (V), (VI),
                                    (VII), or (VIII), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    commodity contract under this clause,
                                    except that the master agreement shall
                                    be considered to be a commodity
                                    contract under this clause only with
                                    respect to each agreement or
                                    transaction under the master agreement
                                    that is referred to in subclause (I),
                                    (II), (III), (IV), (V), (VI), (VII), or
                                    (VIII); or
                                        ``(X) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in this clause, including
                                    any guarantee or reimbursement
                                    obligation in connection with any
                                    agreement or transaction referred to in
                                    this clause.
                                ``(iv) Forward contract.--The term `forward
                            contract' means--
                                        ``(I) a contract (other than a
                                    commodity contract) for the purchase,
                                    sale, or transfer of a commodity or any
                                    similar good, article, service, right,
                                    or interest which is presently or in
                                    the future becomes the subject of
                                    dealing in the forward contract trade,
                                    or product or byproduct thereof, with a
                                    maturity date more than 2 days after
                                    the date on which the contract is
                                    entered into, including a repurchase
                                    transaction, reverse repurchase
                                    transaction, consignment, lease, swap,
                                    hedge transaction, deposit, loan,
                                    option, allocated transaction,
                                    unallocated transaction, or any other
                                    similar agreement;
                                        ``(II) any combination of
                                    agreements or transactions referred to
                                    in subclauses (I) and (III);
                                        ``(III) any option to enter into
                                    any agreement or transaction referred
                                    to in subclause (I) or (II);
                                        ``(IV) a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclauses
                                    (I), (II), or (III), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    forward contract under this clause,
                                    except that the master agreement shall
                                    be considered to be a forward contract
                                    under this clause only with respect to
                                    each agreement or transaction under the
                                    master agreement that is referred to in
                                    subclause (I), (II), or (III); or
                                        ``(V) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in subclause (I), (II),
                                    (III), or (IV), including any guarantee
                                    or reimbursement obligation in
                                    connection with any agreement or
                                    transaction referred to in any such
                                    subclause.
                                ``(v) Repurchase agreement.--The term
                            `repurchase agreement' (including a reverse
                            repurchase agreement)--
                                        ``(I) means an agreement, including
                                    related terms, which provides for the
                                    transfer of one or more certificates of
                                    deposit, mortgage-related securities
                                    (as such term is defined in section 3
                                    of the Securities Exchange Act of
                                    1934), mortgage loans, interests in
                                    mortgage-related securities or mortgage
                                    loans, eligible bankers' acceptances,
                                    qualified foreign government securities
                                    (defined for purposes of this clause as
                                    a security that is a direct obligation
                                    of, or that is fully guaranteed by, the
                                    central government of a member of the
                                    Organization for Economic Cooperation
                                    and Development, as determined by
                                    regulation or order adopted by the
                                    appropriate Federal banking authority),
                                    or securities that are direct
                                    obligations of, or that are fully
                                    guaranteed by, the United States or any
                                    agency of the United States against the
                                    transfer of funds by the transferee of
                                    such certificates of deposit, eligible
                                    bankers' acceptances, securities,
                                    mortgage loans, or interests with a
                                    simultaneous agreement by such
                                    transferee to transfer to the
                                    transferor thereof certificates of
                                    deposit, eligible bankers' acceptances,
                                    securities, mortgage loans, or
                                    interests as described above, at a date
                                    certain not later than 1 year after
                                    such transfers or on demand, against
                                    the transfer of funds, or any other
                                    similar agreement;
                                        ``(II) does not include any
                                    repurchase obligation under a
                                    participation in a commercial mortgage
                                    loan, unless the Agency determines by
                                    regulation, resolution, or order to
                                    include any such participation within
                                    the meaning of such term;
                                        ``(III) means any combination of
                                    agreements or transactions referred to
                                    in subclauses (I) and (IV);
                                        ``(IV) means any option to enter
                                    into any agreement or transaction
                                    referred to in subclause (I) or (III);
                                        ``(V) means a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (III), or (IV), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    repurchase agreement under this clause,
                                    except that the master agreement shall
                                    be considered to be a repurchase
                                    agreement under this subclause only
                                    with respect to each agreement or
                                    transaction under the master agreement
                                    that is referred to in subclause (I),
                                    (III), or (IV); and
                                        ``(VI) means any security agreement
                                    or arrangement or other credit
                                    enhancement related to any agreement or
                                    transaction referred to in subclause
                                    (I), (III), (IV), or (V), including any
                                    guarantee or reimbursement obligation
                                    in connection with any agreement or
                                    transaction referred to in any such
                                    subclause.
                                ``(vi) Swap agreement.--The term `swap
                            agreement' means--
                                        ``(I) any agreement, including the
                                    terms and conditions incorporated by
                                    reference in any such agreement, which
                                    is an interest rate swap, option,
                                    future, or forward agreement, including
                                    a rate floor, rate cap, rate collar,
                                    cross-currency rate swap, and basis
                                    swap; a spot, same day-tomorrow,
                                    tomorrow-next, forward, or other
                                    foreign exchange or precious metals
                                    agreement; a currency swap, option,
                                    future, or forward agreement; an equity
                                    index or equity swap, option, future,
                                    or forward agreement; a debt index or
                                    debt swap, option, future, or forward
                                    agreement; a total return, credit
                                    spread or credit swap, option, future,
                                    or forward agreement; a commodity index
                                    or commodity swap, option, future, or
                                    forward agreement; or a weather swap,
                                    weather derivative, or weather option;
                                        ``(II) any agreement or transaction
                                    that is similar to any other agreement
                                    or transaction referred to in this
                                    clause and that is of a type that has
                                    been, is presently, or in the future
                                    becomes, the subject of recurrent
                                    dealings in the swap markets (including
                                    terms and conditions incorporated by
                                    reference in such agreement) and that
                                    is a forward, swap, future, or option
                                    on one or more rates, currencies,
                                    commodities, equity securities or other
                                    equity instruments, debt securities or
                                    other debt instruments, quantitative
                                    measures associated with an occurrence,
                                    extent of an occurrence, or contingency
                                    associated with a financial,
                                    commercial, or economic consequence, or
                                    economic or financial indices or
                                    measures of economic or financial risk
                                    or value;
                                        ``(III) any combination of
                                    agreements or transactions referred to
                                    in this clause;
                                        ``(IV) any option to enter into any
                                    agreement or transaction referred to in
                                    this clause;
                                        ``(V) a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (II), (III), or (IV), together
                                    with all supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement contains an
                                    agreement or transaction that is not a
                                    swap agreement under this clause,
                                    except that the master agreement shall
                                    be considered to be a swap agreement
                                    under this clause only with respect to
                                    each agreement or transaction under the
                                    master agreement that is referred to in
                                    subclause (I), (II), (III), or (IV);
                                    and
                                        ``(VI) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreements or
                                    transactions referred to in subclause
                                    (I), (II), (III), (IV), or (V),
                                    including any guarantee or
                                    reimbursement obligation in connection
                                    with any agreement or transaction
                                    referred to in any such subclause.
                                ``(vii) Treatment of master agreement as
                            one agreement.--Any master agreement for any
                            contract or agreement described in any
                            preceding clause of this subparagraph (or any
                            master agreement for such master agreement or
                            agreements), together with all supplements to
                            such master agreement, shall be treated as a
                            single agreement and a single qualified
                            financial contract. If a master agreement
                            contains provisions relating to agreements or
                            transactions that are not themselves qualified
                            financial contracts, the master agreement shall
                            be deemed to be a qualified financial contract
                            only with respect to those transactions that
                            are themselves qualified financial contracts.
                                ``(viii) Transfer.--The term `transfer'
                            means every mode, direct or indirect, absolute
                            or conditional, voluntary or involuntary, of
                            disposing of or parting with property or with
                            an interest in property, including retention of
                            title as a security interest and foreclosure of
                            the equity of redemption of the regulated
                            entity.
                        ``(E) Certain protections in event of appointment
                    of conservator.--Notwithstanding any other provision of
                    this section, any other Federal law, or the law of any
                    State (other than paragraph (10) of this subsection and
                    subsection (b)(9)(B)), no person shall be stayed or
                    prohibited from exercising--
                                ``(i) any right such person has to cause
                            the termination, liquidation, or acceleration
                            of any qualified financial contract with a
                            regulated entity in a conservatorship based
                            upon a default under such financial contract
                            which is enforceable under applicable
                            noninsolvency law;
                                ``(ii) any right under any security
                            agreement or arrangement or other credit
                            enhancement relating to 1 or more such
                            qualified financial contracts; or
                                ``(iii) any right to offset or net out any
                            termination values, payment amounts, or other
                            transfer obligations arising under or in
                            connection with such qualified financial
                            contracts.
                        ``(F) Clarification.--No provision of law shall be
                    construed as limiting the right or power of the Agency,
                    or authorizing any court or agency to limit or delay in
                    any manner, the right or power of the Agency to
                    transfer any qualified financial contract in accordance
                    with paragraphs (9) and (10), or to disaffirm or
                    repudiate any such contract in accordance with
                    subsection (d)(1).
                        ``(G) Walkaway clauses not effective.--
                                ``(i) In general.--Notwithstanding the
                            provisions of subparagraphs (A) and (E), and
                            sections 403 and 404 of the Federal Deposit
                            Insurance Corporation Improvement Act of 1991,
                            no walkaway clause shall be enforceable in a
                            qualified financial contract of a regulated
                            entity in default.
                                ``(ii) Walkaway clause defined.--For
                            purposes of this subparagraph, the term
                            `walkaway clause' means a provision in a
                            qualified financial contract that, after
                            calculation of a value of a party's position or
                            an amount due to or from 1 of the parties in
                            accordance with its terms upon termination,
                            liquidation, or acceleration of the qualified
                            financial contract, either does not create a
                            payment obligation of a party or extinguishes a
                            payment obligation of a party in whole or in
                            part solely because of the status of such party
                            as a nondefaulting party.
                ``(9) Transfer of qualified financial contracts.--In making
            any transfer of assets or liabilities of a regulated entity in
            default which includes any qualified financial contract, the
            conservator or receiver for such regulated entity shall
            either--
                        ``(A) transfer to 1 person--
                                ``(i) all qualified financial contracts
                            between any person (or any affiliate of such
                            person) and the regulated entity in default;
                                ``(ii) all claims of such person (or any
                            affiliate of such person) against such
                            regulated entity under any such contract (other
                            than any claim which, under the terms of any
                            such contract, is subordinated to the claims of
                            general unsecured creditors of such regulated
                            entity);
                                ``(iii) all claims of such regulated entity
                            against such person (or any affiliate of such
                            person) under any such contract; and
                                ``(iv) all property securing, or any other
                            credit enhancement for any contract described
                            in clause (i), or any claim described in clause
                            (ii) or (iii) under any such contract; or
                        ``(B) transfer none of the financial contracts,
                    claims, or property referred to under subparagraph (A)
                    (with respect to such person and any affiliate of such
                    person).
                ``(10) Notification of transfer.--
                        ``(A) In general.--The conservator or receiver
                    shall notify any person that is a party to a contract
                    or transfer by 5:00 p.m. (Eastern Standard Time) on the
                    business day following the date of the appointment of
                    the receiver in the case of a receivership, or the
                    business day following such transfer in the case of a
                    conservatorship, if--
                                ``(i) the conservator or receiver for a
                            regulated entity in default makes any transfer
                            of the assets and liabilities of such regulated
                            entity; and
                                ``(ii) such transfer includes any qualified
                            financial contract.
                        ``(B) Certain rights not enforceable.--
                                ``(i) Receivership.--A person who is a
                            party to a qualified financial contract with a
                            regulated entity may not exercise any right
                            that such person has to terminate, liquidate,
                            or net such contract under paragraph (8)(A) of
                            this subsection or under section 403 or 404 of
                            the Federal Deposit Insurance Corporation
                            Improvement Act of 1991, solely by reason of or
                            incidental to the appointment of a receiver for
                            the regulated entity (or the insolvency or
                            financial condition of the regulated entity for
                            which the receiver has been appointed)--
                                        ``(I) until 5:00 p.m. (Eastern
                                    Standard Time) on the business day
                                    following the date of the appointment
                                    of the receiver; or
                                        ``(II) after the person has
                                    received notice that the contract has
                                    been transferred pursuant to paragraph
                                    (9)(A).
                                ``(ii) Conservatorship.--A person who is a
                            party to a qualified financial contract with a
                            regulated entity may not exercise any right
                            that such person has to terminate, liquidate,
                            or net such contract under paragraph (8)(E) of
                            this subsection or under section 403 or 404 of
                            the Federal Deposit Insurance Corporation
                            Improvement Act of 1991, solely by reason of or
                            incidental to the appointment of a conservator
                            for the regulated entity (or the insolvency or
                            financial condition of the regulated entity for
                            which the conservator has been appointed).
                                ``(iii) Notice.--For purposes of this
                            paragraph, the conservator or receiver of a
                            regulated entity shall be deemed to have
                            notified a person who is a party to a qualified
                            financial contract with such regulated entity,
                            if the conservator or receiver has taken steps
                            reasonably calculated to provide notice to such
                            person by the time specified in subparagraph
                            (A).
                        ``(C) Business day defined.--For purposes of this
                    paragraph, the term `business day' means any day other
                    than any Saturday, Sunday, or any day on which either
                    the New York Stock Exchange or the Federal Reserve Bank
                    of New York is closed.
                ``(11) Disaffirmance or repudiation of qualified financial
            contracts.--In exercising the rights of disaffirmance or
            repudiation of a conservator or receiver with respect to any
            qualified financial contract to which a regulated entity is a
            party, the conservator or receiver for such institution shall
            either--
                        ``(A) disaffirm or repudiate all qualified
                    financial contracts between--
                                ``(i) any person or any affiliate of such
                            person; and
                                ``(ii) the regulated entity in default; or
                        ``(B) disaffirm or repudiate none of the qualified
                    financial contracts referred to in subparagraph (A)
                    (with respect to such person or any affiliate of such
                    person).
                ``(12) Certain security interests not avoidable.--No
            provision of this subsection shall be construed as permitting
            the avoidance of any legally enforceable or perfected security
            interest in any of the assets of any regulated entity, except
            where such an interest is taken in contemplation of the
            insolvency of the regulated entity, or with the intent to
            hinder, delay, or defraud the regulated entity or the creditors
            of such regulated entity.
                ``(13) Authority to enforce contracts.--
                        ``(A) In general.--Notwithstanding any provision of
                    a contract providing for termination, default,
                    acceleration, or exercise of rights upon, or solely by
                    reason of, insolvency or the appointment of, or the
                    exercise of rights or powers by, a conservator or
                    receiver, the conservator or receiver may enforce any
                    contract, other than a contract for liability insurance
                    for a director or officer, or a contract or a regulated
                    entity bond, entered into by the regulated entity.
                        ``(B) Certain rights not affected.--No provision of
                    this paragraph may be construed as impairing or
                    affecting any right of the conservator or receiver to
                    enforce or recover under a liability insurance contract
                    for an officer or director, or regulated entity bond
                    under other applicable law.
                        ``(C) Consent requirement.--
                                ``(i) In general.--Except as otherwise
                            provided under this section, no person may
                            exercise any right or power to terminate,
                            accelerate, or declare a default under any
                            contract to which a regulated entity is a
                            party, or to obtain possession of or exercise
                            control over any property of the regulated
                            entity, or affect any contractual rights of the
                            regulated entity, without the consent of the
                            conservator or receiver, as appropriate, for a
                            period of--
                                        ``(I) 45 days after the date of
                                    appointment of a conservator; or
                                        ``(II) 90 days after the date of
                                    appointment of a receiver.
                                ``(ii) Exceptions.--This subparagraph shall
                            not--
                                        ``(I) apply to a contract for
                                    liability insurance for an officer or
                                    director;
                                        ``(II) apply to the rights of
                                    parties to certain qualified financial
                                    contracts under subsection (d)(8); and
                                        ``(III) be construed as permitting
                                    the conservator or receiver to fail to
                                    comply with otherwise enforceable
                                    provisions of such contracts.
                ``(14) Savings clause.--The meanings of terms used in this
            subsection are applicable for purposes of this subsection only,
            and shall not be construed or applied so as to challenge or
            affect the characterization, definition, or treatment of any
            similar terms under any other statute, regulation, or rule,
            including the Gramm-Leach-Bliley Act, the Legal Certainty for
            Bank Products Act of 2000, the securities laws (as that term is
            defined in section 3(a)(47) of the Securities Exchange Act of
            1934), and the Commodity Exchange Act.
                ``(15) Exception for federal reserve and federal home loan
            banks.--No provision of this subsection shall apply with
            respect to--
                        ``(A) any extension of credit from any Federal Home
                    Loan Bank or Federal Reserve Bank to any regulated
                    entity; or
                        ``(B) any security interest in the assets of the
                    regulated entity securing any such extension of credit.
        ``(e) Valuation of Claims in Default.--
                ``(1) In general.--Notwithstanding any other provision of
            Federal law or the law of any State, and regardless of the
            method which the Agency determines to utilize with respect to a
            regulated entity in default or in danger of default, including
            transactions authorized under subsection (i), this subsection
            shall govern the rights of the creditors of such regulated
            entity.
                ``(2) Maximum liability.--The maximum liability of the
            Agency, acting as receiver or in any other capacity, to any
            person having a claim against the receiver or the regulated
            entity for which such receiver is appointed shall be not more
            than the amount that such claimant would have received if the
            Agency had liquidated the assets and liabilities of the
            regulated entity without exercising the authority of the Agency
            under subsection (i).
        ``(f) Limitation on Court Action.--Except as provided in this
    section or at the request of the Director, no court may take any action
    to restrain or affect the exercise of powers or functions of the Agency
    as a conservator or a receiver.
        ``(g) Liability of Directors and Officers.--
                ``(1) In general.--A director or officer of a regulated
            entity may be held personally liable for monetary damages in
            any civil action described in paragraph (2) brought by, on
            behalf of, or at the request or direction of the Agency, and
            prosecuted wholly or partially for the benefit of the Agency--
                        ``(A) acting as conservator or receiver of such
                    regulated entity; or
                        ``(B) acting based upon a suit, claim, or cause of
                    action purchased from, assigned by, or otherwise
                    conveyed by such receiver or conservator.
                ``(2) Actions addressed.--Paragraph (1) applies in any
            civil action for gross negligence, including any similar
            conduct or conduct that demonstrates a greater disregard of a
            duty of care than gross negligence, including intentional
            tortious conduct, as such terms are defined and determined
            under applicable State law.
                ``(3) No limitation.--Nothing in this subsection shall
            impair or affect any right of the Agency under other applicable
            law.
        ``(h) Damages.--In any proceeding related to any claim against a
    director, officer, employee, agent, attorney, accountant, appraiser, or
    any other party employed by or providing services to a regulated
    entity, recoverable damages determined to result from the improvident
    or otherwise improper use or investment of any assets of the regulated
    entity shall include principal losses and appropriate interest.
        ``(i) Limited-Life Regulated Entities.--
                ``(1) Organization.--
                        ``(A) Purpose.--The Agency, as receiver appointed
                    pursuant to subsection (a)--
                                ``(i) may, in the case of a Federal Home
                            Loan Bank, organize a limited-life regulated
                            entity with those powers and attributes of the
                            Federal Home Loan Bank in default or in danger
                            of default as the Director determines
                            necessary, subject to the provisions of this
                            subsection, and the Director shall grant a
                            temporary charter to that limited-life
                            regulated entity, and that limited-life
                            regulated entity may operate subject to that
                            charter; and
                                ``(ii) shall, in the case of an enterprise,
                            organize a limited-life regulated entity with
                            respect to that enterprise in accordance with
                            this subsection.
                        ``(B) Authorities.--Upon the creation of a limited-
                    life regulated entity under subparagraph (A), the
                    limited-life regulated entity may--
                                ``(i) assume such liabilities of the
                            regulated entity that is in default or in
                            danger of default as the Agency may, in its
                            discretion, determine to be appropriate, except
                            that the liabilities assumed shall not exceed
                            the amount of assets purchased or transferred
                            from the regulated entity to the limited-life
                            regulated entity;
                                ``(ii) purchase such assets of the
                            regulated entity that is in default, or in
                            danger of default as the Agency may, in its
                            discretion, determine to be appropriate; and
                                ``(iii) perform any other temporary
                            function which the Agency may, in its
                            discretion, prescribe in accordance with this
                            section.
                ``(2) Charter and establishment.--
                        ``(A) Transfer of charter.--
                                ``(i) Fannie mae.--If the Agency is
                            appointed as receiver for the Federal National
                            Mortgage Association, the limited-life
                            regulated entity established under this
                            subsection with respect to such enterprise
                            shall, by operation of law and immediately upon
                            its organization--
                                        ``(I) succeed to the charter of the
                                    Federal National Mortgage Association,
                                    as set forth in the Federal National
                                    Mortgage Association Charter Act; and
                                        ``(II) thereafter operate in
                                    accordance with, and subject to, such
                                    charter, this Act, and any other
                                    provision of law to which the Federal
                                    National Mortgage Association is
                                    subject, except as otherwise provided
                                    in this subsection.
                                ``(ii) Freddie mac.--If the Agency is
                            appointed as receiver for the Federal Home Loan
                            Mortgage Corporation, the limited-life
                            regulated entity established under this
                            subsection with respect to such enterprise
                            shall, by operation of law and immediately upon
                            its organization--
                                        ``(I) succeed to the charter of the
                                    Federal Home Loan Mortgage Corporation,
                                    as set forth in the Federal Home Loan
                                    Mortgage Corporation Charter Act; and
                                        ``(II) thereafter operate in
                                    accordance with, and subject to, such
                                    charter, this Act, and any other
                                    provision of law to which the Federal
                                    Home Loan Mortgage Corporation is
                                    subject, except as otherwise provided
                                    in this subsection.
                        ``(B) Interests in and assets and obligations of
                    regulated entity in default.--Notwithstanding
                    subparagraph (A) or any other provision of law--
                                ``(i) a limited-life regulated entity shall
                            assume, acquire, or succeed to the assets or
                            liabilities of a regulated entity only to the
                            extent that such assets or liabilities are
                            transferred by the Agency to the limited-life
                            regulated entity in accordance with, and
                            subject to the restrictions set forth in,
                            paragraph (1)(B);
                                ``(ii) a limited-life regulated entity
                            shall not assume, acquire, or succeed to any
                            obligation that a regulated entity for which a
                            receiver has been appointed may have to any
                            shareholder of the regulated entity that arises
                            as a result of the status of that person as a
                            shareholder of the regulated entity; and
                                ``(iii) no shareholder or creditor of a
                            regulated entity shall have any right or claim
                            against the charter of the regulated entity
                            once the Agency has been appointed receiver for
                            the regulated entity and a limited-life
                            regulated entity succeeds to the charter
                            pursuant to subparagraph (A).
                        ``(C) Limited-life regulated entity treated as
                    being in default for certain purposes.--A limited-life
                    regulated entity shall be treated as a regulated entity
                    in default at such times and for such purposes as the
                    Agency may, in its discretion, determine.
                        ``(D) Management.--Upon its establishment, a
                    limited-life regulated entity shall be under the
                    management of a board of directors consisting of not
                    fewer than 5 nor more than 10 members appointed by the
                    Agency.
                        ``(E) Bylaws.--The board of directors of a limited-
                    life regulated entity shall adopt such bylaws as may be
                    approved by the Agency.
                ``(3) Capital stock.--
                                ``(A) No agency requirement.--The Agency is
                            not required to pay capital stock into a
                            limited-life regulated entity or to issue any
                            capital stock on behalf of a limited-life
                            regulated entity established under this
                            subsection.
                                ``(B) Authority.--If the Director
                            determines that such action is advisable, the
                            Agency may cause capital stock or other
                            securities of a limited-life regulated entity
                            established with respect to an enterprise to be
                            issued and offered for sale, in such amounts
                            and on such terms and conditions as the
                            Director may determine, in the discretion of
                            the Director.
                ``(4) Investments.--Funds of a limited-life regulated
            entity shall be kept on hand in cash, invested in obligations
            of the United States or obligations guaranteed as to principal
            and interest by the United States, or deposited with the
            Agency, or any Federal reserve bank.
                ``(5) Exempt tax status.--Notwithstanding any other
            provision of Federal or State law, a limited-life regulated
            entity, its franchise, property, and income shall be exempt
            from all taxation now or hereafter imposed by the United
            States, by any territory, dependency, or possession thereof, or
            by any State, county, municipality, or local taxing authority.
                ``(6) Winding up.--
                        ``(A) In general.--Subject to subparagraphs (B) and
                    (C), not later than 2 years after the date of its
                    organization, the Agency shall wind up the affairs of a
                    limited-life regulated entity.
                        ``(B) Extension.--The Director may, in the
                    discretion of the Director, extend the status of a
                    limited-life regulated entity for 3 additional 1-year
                    periods.
                        ``(C) Termination of status as limited-life
                    regulated entity.--
                                ``(i) In general.--Upon the sale by the
                            Agency of 80 percent or more of the capital
                            stock of a limited-life regulated entity, as
                            defined in clause (iv), to 1 or more persons
                            (other than the Agency)--
                                        ``(I) the status of the limited-
                                    life regulated entity as such shall
                                    terminate; and
                                        ``(II) the entity shall cease to be
                                    a limited-life regulated entity for
                                    purposes of this subsection.
                                ``(ii) Divestiture of remaining stock, if
                            any.--
                                        ``(I) In general.--Not later than 1
                                    year after the date on which the status
                                    of a limited-life regulated entity is
                                    terminated pursuant to clause (i), the
                                    Agency shall sell to 1 or more persons
                                    (other than the Agency) any remaining
                                    capital stock of the former limited-
                                    life regulated entity.
                                        ``(II) Extension authorized.--The
                                    Director may extend the period referred
                                    to in subclause (I) for not longer than
                                    an additional 2 years, if the Director
                                    determines that such action would be in
                                    the public interest.
                                ``(iii) Savings clause.--Notwithstanding
                            any provision of law, other than clause (ii),
                            the Agency shall not be required to sell the
                            capital stock of an enterprise or a limited-
                            life regulated entity established with respect
                            to an enterprise.
                                ``(iv) Applicability.--This subparagraph
                            applies only with respect to a limited-life
                            regulated entity that is established with
                            respect to an enterprise.
                ``(7) Transfer of assets and liabilities.--
                        ``(A) In general.--
                                ``(i) Transfer of assets and liabilities.--
                            The Agency, as receiver, may transfer any
                            assets and liabilities of a regulated entity in
                            default, or in danger of default, to the
                            limited-life regulated entity in accordance
                            with and subject to the restrictions of
                            paragraph (1).
                                ``(ii) Subsequent transfers.--At any time
                            after the establishment of a limited-life
                            regulated entity, the Agency, as receiver, may
                            transfer any assets and liabilities of the
                            regulated entity in default, or in danger of
                            default, as the Agency may, in its discretion,
                            determine to be appropriate in accordance with
                            and subject to the restrictions of paragraph
                            (1).
                                ``(iii) Effective without approval.--The
                            transfer of any assets or liabilities of a
                            regulated entity in default or in danger of
                            default to a limited-life regulated entity
                            shall be effective without any further approval
                            under Federal or State law, assignment, or
                            consent with respect thereto.
                                ``(iv) Equitable treatment of similarly
                            situated creditors.--The Agency shall treat all
                            creditors of a regulated entity in default or
                            in danger of default that are similarly
                            situated under subsection (c)(1) in a similar
                            manner in exercising the authority of the
                            Agency under this subsection to transfer any
                            assets or liabilities of the regulated entity
                            to the limited-life regulated entity
                            established with respect to such regulated
                            entity, except that the Agency may take actions
                            (including making payments) that do not comply
                            with this clause, if--
                                        ``(I) the Director determines that
                                    such actions are necessary to maximize
                                    the value of the assets of the
                                    regulated entity, to maximize the
                                    present value return from the sale or
                                    other disposition of the assets of the
                                    regulated entity, or to minimize the
                                    amount of any loss realized upon the
                                    sale or other disposition of the assets
                                    of the regulated entity; and
                                        ``(II) all creditors that are
                                    similarly situated under subsection
                                    (c)(1) receive not less than the amount
                                    provided in subsection (e)(2).
                                ``(v) Limitation on transfer of
                            liabilities.--Notwithstanding any other
                            provision of law, the aggregate amount of
                            liabilities of a regulated entity that are
                            transferred to, or assumed by, a limited-life
                            regulated entity may not exceed the aggregate
                            amount of assets of the regulated entity that
                            are transferred to, or purchased by, the
                            limited-life regulated entity.
                ``(8) Regulations.--The Agency may promulgate such
            regulations as the Agency determines to be necessary or
            appropriate to implement this subsection.
                ``(9) Powers of limited-life regulated entities.--
                        ``(A) In general.--Each limited-life regulated
                    entity created under this subsection shall have all
                    corporate powers of, and be subject to the same
                    provisions of law as, the regulated entity in default
                    or in danger of default to which it relates, except
                    that--
                                ``(i) the Agency may--
                                        ``(I) remove the directors of a
                                    limited-life regulated entity;
                                        ``(II) fix the compensation of
                                    members of the board of directors and
                                    senior management, as determined by the
                                    Agency in its discretion, of a limited-
                                    life regulated entity; and
                                        ``(III) indemnify the
                                    representatives for purposes of
                                    paragraph (1)(B), and the directors,
                                    officers, employees, and agents of a
                                    limited-life regulated entity on such
                                    terms as the Agency determines to be
                                    appropriate; and
                                ``(ii) the board of directors of a limited-
                            life regulated entity--
                                        ``(I) shall elect a chairperson who
                                    may also serve in the position of chief
                                    executive officer, except that such
                                    person shall not serve either as
                                    chairperson or as chief executive
                                    officer without the prior approval of
                                    the Agency; and
                                        ``(II) may appoint a chief
                                    executive officer who is not also the
                                    chairperson, except that such person
                                    shall not serve as chief executive
                                    officer without the prior approval of
                                    the Agency.
                        ``(B) Stay of judicial action.--Any judicial action
                    to which a limited-life regulated entity becomes a
                    party by virtue of its acquisition of any assets or
                    assumption of any liabilities of a regulated entity in
                    default shall be stayed from further proceedings for a
                    period of not longer than 45 days, at the request of
                    the limited-life regulated entity. Such period may be
                    modified upon the consent of all parties.
                ``(10) No federal status.--
                        ``(A) Agency status.--A limited-life regulated
                    entity is not an agency, establishment, or
                    instrumentality of the United States.
                        ``(B) Employee status.--Representatives for
                    purposes of paragraph (1)(B), interim directors,
                    directors, officers, employees, or agents of a limited-
                    life regulated entity are not, solely by virtue of
                    service in any such capacity, officers or employees of
                    the United States. Any employee of the Agency or of any
                    Federal instrumentality who serves at the request of
                    the Agency as a representative for purposes of
                    paragraph (1)(B), interim director, director, officer,
                    employee, or agent of a limited-life regulated entity
                    shall not--
                                ``(i) solely by virtue of service in any
                            such capacity lose any existing status as an
                            officer or employee of the United States for
                            purposes of title 5, United States Code, or any
                            other provision of law; or
                                ``(ii) receive any salary or benefits for
                            service in any such capacity with respect to a
                            limited-life regulated entity in addition to
                            such salary or benefits as are obtained through
                            employment with the Agency or such Federal
                            instrumentality.
                ``(11) Authority to obtain credit.--
                        ``(A) In general.--A limited-life regulated entity
                    may obtain unsecured credit and issue unsecured debt.
                        ``(B) Inability to obtain credit.--If a limited-
                    life regulated entity is unable to obtain unsecured
                    credit or issue unsecured debt, the Director may
                    authorize the obtaining of credit or the issuance of
                    debt by the limited-life regulated entity--
                                ``(i) with priority over any or all of the
                            obligations of the limited-life regulated
                            entity;
                                ``(ii) secured by a lien on property of the
                            limited-life regulated entity that is not
                            otherwise subject to a lien; or
                                ``(iii) secured by a junior lien on
                            property of the limited-life regulated entity
                            that is subject to a lien.
                        ``(C) Limitations.--
                                ``(i) In general.--The Director, after
                            notice and a hearing, may authorize the
                            obtaining of credit or the issuance of debt by
                            a limited-life regulated entity that is secured
                            by a senior or equal lien on property of the
                            limited-life regulated entity that is subject
                            to a lien (other than mortgages that
                            collateralize the mortgage-backed securities
                            issued or guaranteed by an enterprise) only
                            if--
                                        ``(I) the limited-life regulated
                                    entity is unable to otherwise obtain
                                    such credit or issue such debt; and
                                        ``(II) there is adequate protection
                                    of the interest of the holder of the
                                    lien on the property with respect to
                                    which such senior or equal lien is
                                    proposed to be granted.
                        ``(D) Burden of proof.--In any hearing under this
                    subsection, the Director has the burden of proof on the
                    issue of adequate protection.
                ``(12) Effect on debts and liens.--The reversal or
            modification on appeal of an authorization under this
            subsection to obtain credit or issue debt, or of a grant under
            this section of a priority or a lien, does not affect the
            validity of any debt so issued, or any priority or lien so
            granted, to an entity that extended such credit in good faith,
            whether or not such entity knew of the pendency of the appeal,
            unless such authorization and the issuance of such debt, or the
            granting of such priority or lien, were stayed pending appeal.
        ``(j) Other Agency Exemptions.--
                ``(1) Applicability.--The provisions of this subsection
            shall apply with respect to the Agency in any case in which the
            Agency is acting as a conservator or a receiver.
                ``(2) Taxation.--The Agency, including its franchise, its
            capital, reserves, and surplus, and its income, shall be exempt
            from all taxation imposed by any State, county, municipality,
            or local taxing authority, except that any real property of the
            Agency shall be subject to State, territorial, county,
            municipal, or local taxation to the same extent according to
            its value as other real property is taxed, except that,
            notwithstanding the failure of any person to challenge an
            assessment under State law of the value of such property, and
            the tax thereon, shall be determined as of the period for which
            such tax is imposed.
                ``(3) Property protection.--No property of the Agency shall
            be subject to levy, attachment, garnishment, foreclosure, or
            sale without the consent of the Agency, nor shall any
            involuntary lien attach to the property of the Agency.
                ``(4) Penalties and fines.--The Agency shall not be liable
            for any amounts in the nature of penalties or fines, including
            those arising from the failure of any person to pay any real
            property, personal property, probate, or recording tax or any
            recording or filing fees when due.
        ``(k) Prohibition of Charter Revocation.--In no case may the
    receiver appointed pursuant to this section revoke, annul, or terminate
    the charter of an enterprise.''.
        (b) Technical and Conforming Amendments.--The Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501
    et seq.) is amended--
                (1) in section 1368 (12 U.S.C. 4618)--
                        (A) by striking ``an enterprise'' each place that
                    term appears and inserting ``a regulated entity''; and
                        (B) by striking ``the enterprise'' each place that
                    term appears and inserting ``the regulated entity'';
                (2) in section 1369C (12 U.S.C. 4622), by striking
            ``enterprise'' each place that term appears and inserting
            ``regulated entity'';
                (3) in section 1369D (12 U.S.C. 4623)--
                        (A) by striking ``an enterprise'' each place that
                    term appears and inserting ``a regulated entity''; and
                        (B) in subsection (a)(1), by striking ``An
                    enterprise'' and inserting ``A regulated entity''; and
                (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C.
            4619, 4620, and 4621).

                        Subtitle D--Enforcement Actions

    SEC. 1151. CEASE AND DESIST PROCEEDINGS.

        Section 1371 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
                (1) by striking subsections (a) and (b) and inserting the
            following:
        ``(a) Issuance for Unsafe or Unsound Practices and Violations.--
                ``(1) Authority of director.--If, in the opinion of the
            Director, a regulated entity or any entity-affiliated party is
            engaging or has engaged, or the Director has reasonable cause
            to believe that the regulated entity or any entity-affiliated
            party is about to engage, in an unsafe or unsound practice in
            conducting the business of the regulated entity or the Office
            of Finance, or is violating or has violated, or the Director
            has reasonable cause to believe is about to violate, a law,
            rule, regulation, or order, or any condition imposed in writing
            by the Director in connection with the granting of any
            application or other request by the regulated entity or the
            Office of Finance or any written agreement entered into with
            the Director, the Director may issue and serve upon the
            regulated entity or entity-affiliated party a notice of charges
            in respect thereof.
                ``(2) Limitation.--The Director may not, pursuant to this
            section, enforce compliance with any housing goal established
            under subpart B of part 2 of subtitle A of this title, with
            section 1336 or 1337 of this title, with subsection (m) or (n)
            of section 309 of the Federal National Mortgage Association
            Charter Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or
            (f) of section 307 of the Federal Home Loan Mortgage
            Corporation Act (12 U.S.C. 1456(e), (f)), or with paragraph (5)
            of section 10(j) of the Federal Home Loan Bank Act (12 U.S.C.
            1430(j)).
        ``(b) Issuance for Unsatisfactory Rating.--If a regulated entity
    receives, in its most recent report of examination, a less-than-
    satisfactory rating for asset quality, management, earnings, or
    liquidity, the Director may (if the deficiency is not corrected) deem
    the regulated entity to be engaging in an unsafe or unsound practice
    for purposes of subsection (a).'';
                (2) in subsection (c)--
                        (A) in paragraph (1), by inserting before the
                    period at the end the following: ``, unless the party
                    served with a notice of charges shall appear at the
                    hearing personally or by a duly authorized
                    representative, the party shall be deemed to have
                    consented to the issuance of the cease and desist
                    order''; and
                        (B) in paragraph (2)--
                                (i) by striking ``or director'' and
                            inserting ``director, or entity-affiliated
                            party''; and
                                (ii) by inserting ``or entity-affiliated
                            party'' before ``consents'';
                (3) in each of subsections (c), (d), and (e)--
                        (A) by striking ``the enterprise'' each place that
                    term appears and inserting ``the regulated entity'';
                        (B) by striking ``an enterprise'' each place that
                    term appears and inserting ``a regulated entity''; and
                        (C) by striking ``conduct'' each place that term
                    appears and inserting ``practice'';
                (4) in subsection (d)--
                        (A) in the matter preceding paragraph (1)--
                                (i) by striking ``or director'' and
                            inserting ``director, or entity-affiliated
                            party''; and
                                (ii) by inserting ``to require a regulated
                            entity or entity-affiliated party'' after
                            ``includes the authority'';
                        (B) in paragraph (1)--
                                (i) by striking ``to require an executive
                            officer or a director to''; and
                                (ii) by striking ``loss'' and all that
                            follows through ``person'' and inserting
                            ``loss, if'';
                                (iii) in subparagraph (A), by inserting
                            ``such entity or party or finance facility''
                            before ``was''; and
                                (iv) by striking subparagraph (B) and
                            inserting the following:
                        ``(B) the violation or practice involved a reckless
                    disregard for the law or any applicable regulations or
                    prior order of the Director;''; and
                        (C) in paragraph (4), by inserting ``loan or''
                    before ``asset'';
                (5) in subsection (e), by inserting ``or entity-affiliated
            party''--
                        (A) before ``or any executive''; and
                        (B) before the period at the end; and
                (6) in subsection (f)--
                        (A) by striking ``enterprise'' and inserting
                    ``regulated entity, finance facility,''; and
                        (B) by striking ``or director'' and inserting
                    ``director, or entity-affiliated party''.

    SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.

        Section 1372 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4632) is amended--
                (1) by striking subsection (a) and inserting the following:
        ``(a) Grounds for Issuance.--
                ``(1) In general.--If the Director determines that the
            actions specified in the notice of charges served upon a
            regulated entity or any entity-affiliated party pursuant to
            section 1371(a), or the continuation thereof, is likely to
            cause insolvency or significant dissipation of assets or
            earnings of that entity, or is likely to weaken the condition
            of that entity prior to the completion of the proceedings
            conducted pursuant to sections 1371 and 1373, the Director
            may--
                        ``(A) issue a temporary order requiring that
                    regulated entity or entity-affiliated party to cease
                    and desist from any such violation or practice; and
                        ``(B) require that regulated entity or entity-
                    affiliated party to take affirmative action to prevent
                    or remedy such insolvency, dissipation, condition, or
                    prejudice pending completion of such proceedings.
                ``(2) Additional requirements.--An order issued under
            paragraph (1) may include any requirement authorized under
            subsection 1371(d).'';
                (2) in subsection (b)--
                        (A) by striking ``or director'' and inserting
                    ``director, or entity-affiliated party''; and
                        (B) by striking ``enterprise'' each place that term
                    appears and inserting ``regulated entity'';
                (3) in subsection (c), by striking ``enterprise'' each
            place that term appears and inserting ``regulated entity'';
                (4) in subsection (d)--
                        (A) by striking ``or director'' each place that
                    term appears and inserting ``director, or entity-
                    affiliated party''; and
                        (B) by striking ``An enterprise'' and inserting ``A
                    regulated entity''; and
                (5) in subsection (e)--
                        (A) by striking ``request the Attorney General of
                    the United States to''; and
                        (B) by striking ``or may, under the direction and
                    control of the Attorney General, bring such action''.

    SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.

        (a) In General.--Part 1 of subtitle C of the Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631
    et seq.) is amended--
                (1) by redesignating sections 1377 through 1379B (12 U.S.C.
            4637-4641) as sections 1379 through 1379D, respectively; and
                (2) by inserting after section 1376 (12 U.S.C. 4636) the
            following:

    ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

        ``(a) Authority To Issue Order.--
                ``(1) In general.--The Director may serve upon a party
            described in paragraph (2), or any officer, director, or
            management of the Office of Finance a written notice of the
            intention of the Director to suspend or remove such party from
            office, or prohibit any further participation by such party, in
            any manner, in the conduct of the affairs of the regulated
            entity.
                ``(2) Applicability.--A party described in this paragraph
            is an entity-affiliated party or any officer, director, or
            management of the Office of Finance, if the Director determines
            that--
                        ``(A) that party, officer, or director has,
                    directly or indirectly--
                                ``(i) violated--
                                        ``(I) any law or regulation;
                                        ``(II) any cease and desist order
                                    which has become final;
                                        ``(III) any condition imposed in
                                    writing by the Director in connection
                                    with the grant of any application or
                                    other request by such regulated entity;
                                    or
                                        ``(IV) any written agreement
                                    between such regulated entity and the
                                    Director;
                                ``(ii) engaged or participated in any
                            unsafe or unsound practice in connection with
                            any regulated entity or business institution;
                            or
                                ``(iii) committed or engaged in any act,
                            omission, or practice which constitutes a
                            breach of such party's fiduciary duty;
                        ``(B) by reason of the violation, practice, or
                    breach described in subparagraph (A)--
                                ``(i) such regulated entity or business
                            institution has suffered or will probably
                            suffer financial loss or other damage; or
                                ``(ii) such party has received financial
                            gain or other benefit; and
                        ``(C) the violation, practice, or breach described
                    in subparagraph (A)--
                                ``(i) involves personal dishonesty on the
                            part of such party; or
                                ``(ii) demonstrates willful or continuing
                            disregard by such party for the safety or
                            soundness of such regulated entity or business
                            institution.
        ``(b) Suspension Order.--
                ``(1) Suspension or prohibition authority.--If the Director
            serves written notice under subsection (a) upon a party subject
            to that subsection (a), the Director may, by order, suspend or
            remove such party from office, or prohibit such party from
            further participation in any manner in the conduct of the
            affairs of the regulated entity, if the Director--
                        ``(A) determines that such action is necessary for
                    the protection of the regulated entity; and
                        ``(B) serves such party with written notice of the
                    order.
                ``(2) Effective period.--Any order issued under this
            subsection--
                        ``(A) shall become effective upon service; and
                        ``(B) unless a court issues a stay of such order
                    under subsection (g), shall remain in effect and
                    enforceable until--
                                ``(i) the date on which the Director
                            dismisses the charges contained in the notice
                            served under subsection (a) with respect to
                            such party; or
                                ``(ii) the effective date of an order
                            issued under subsection (b).
                ``(3) Copy of order.--If the Director issues an order under
            subsection (b) to any party, the Director shall serve a copy of
            such order on any regulated entity with which such party is
            affiliated at the time such order is issued.
        ``(c) Notice, Hearing, and Order.--
                ``(1) Notice.--A notice under subsection (a) of the
            intention of the Director to issue an order under this section
            shall contain a statement of the facts constituting grounds for
            such action, and shall fix a time and place at which a hearing
            will be held on such action.
                ``(2) Timing of hearing.--A hearing shall be fixed for a
            date not earlier than 30 days, nor later than 60 days, after
            the date of service of notice under subsection (a), unless an
            earlier or a later date is set by the Director at the request
            of--
                        ``(A) the party receiving such notice, and good
                    cause is shown; or
                        ``(B) the Attorney General of the United States.
                ``(3) Consent.--Unless the party that is the subject of a
            notice delivered under subsection (a) appears at the hearing in
            person or by a duly authorized representative, such party shall
            be deemed to have consented to the issuance of an order under
            this section.
                ``(4) Issuance of order of suspension.--The Director may
            issue an order under this section, as the Director may deem
            appropriate, if--
                        ``(A) a party is deemed to have consented to the
                    issuance of an order under paragraph (3); or
                        ``(B) upon the record made at the hearing, the
                    Director finds that any of the grounds specified in the
                    notice have been established.
                ``(5) Effectiveness of order.--Any order issued under
            paragraph (4) shall become effective at the expiration of 30
            days after the date of service upon the relevant regulated
            entity and party (except in the case of an order issued upon
            consent under paragraph (3), which shall become effective at
            the time specified therein). Such order shall remain effective
            and enforceable except to such extent as it is stayed,
            modified, terminated, or set aside by action of the Director or
            a reviewing court.
        ``(d) Prohibition of Certain Specific Activities.--Any person
    subject to an order issued under this section shall not--
                ``(1) participate in any manner in the conduct of the
            affairs of any regulated entity or the Office of Finance;
                ``(2) solicit, procure, transfer, attempt to transfer,
            vote, or attempt to vote any proxy, consent, or authorization
            with respect to any voting rights in any regulated entity;
                ``(3) violate any voting agreement previously approved by
            the Director; or
                ``(4) vote for a director, or serve or act as an entity-
            affiliated party of a regulated entity or as an officer or
            director of the Office of Finance.
        ``(e) Industry-Wide Prohibition.--
                ``(1) In general.--Except as provided in paragraph (2), any
            person who, pursuant to an order issued under this section, has
            been removed or suspended from office in a regulated entity or
            the Office of Finance, or prohibited from participating in the
            conduct of the affairs of a regulated entity or the Office of
            Finance, may not, while such order is in effect, continue or
            commence to hold any office in, or participate in any manner in
            the conduct of the affairs of, any regulated entity or the
            Office of Finance.
                ``(2) Exception if director provides written consent.--If,
            on or after the date on which an order is issued under this
            section which removes or suspends from office any party, or
            prohibits such party from participating in the conduct of the
            affairs of a regulated entity or the Office of Finance, such
            party receives the written consent of the Director, the order
            shall, to the extent of such consent, cease to apply to such
            party with respect to the regulated entity or such Office of
            Finance described in the written consent. Any such consent
            shall be publicly disclosed.
                ``(3) Violation of paragraph (1) treated as violation of
            order.--Any violation of paragraph (1) by any person who is
            subject to an order issued under subsection (h) shall be
            treated as a violation of the order.
        ``(f) Applicability.--This section shall only apply to a person who
    is an individual, unless the Director specifically finds that it should
    apply to a corporation, firm, or other business entity.
        ``(g) Stay of Suspension and Prohibition of Entity-Affiliated
    Party.--Not later than 10 days after the date on which any entity-
    affiliated party has been suspended from office or prohibited from
    participation in the conduct of the affairs of a regulated entity under
    this section, such party may apply to the United States District Court
    for the District of Columbia, or the United States district court for
    the judicial district in which the headquarters of the regulated entity
    is located, for a stay of such suspension or prohibition pending the
    completion of the administrative proceedings pursuant to subsection
    (c). The court shall have jurisdiction to stay such suspension or
    prohibition.
        ``(h) Suspension or Removal of Entity-Affiliated Party Charged With
    Felony.--
                ``(1) Suspension or prohibition.--
                        ``(A) In general.--Whenever any entity-affiliated
                    party is charged in any information, indictment, or
                    complaint, with the commission of or participation in a
                    crime involving dishonesty or breach of trust which is
                    punishable by imprisonment for a term exceeding 1 year
                    under Federal or State law, the Director may, if
                    continued service or participation by such party may
                    pose a threat to the regulated entity or impair public
                    confidence in the regulated entity, by written notice
                    served upon such party, suspend such party from office
                    or prohibit such party from further participation in
                    any manner in the conduct of the affairs of any
                    regulated entity.
                        ``(B) Provisions applicable to notice.--
                                ``(i) Copy.--A copy of any notice under
                            subparagraph (A) shall be served upon the
                            relevant regulated entity.
                                ``(ii) Effective period.--A suspension or
                            prohibition under subparagraph (A) shall remain
                            in effect until the information, indictment, or
                            complaint referred to in subparagraph (A) is
                            finally disposed of, or until terminated by the
                            Director.
                ``(2) Removal or prohibition.--
                        ``(A) In general.--If a judgment of conviction or
                    an agreement to enter a pretrial diversion or other
                    similar program is entered against an entity-affiliated
                    party in connection with a crime described in paragraph
                    (1)(A), at such time as such judgment is not subject to
                    further appellate review, the Director may, if
                    continued service or participation by such party may
                    pose a threat to the regulated entity or impair public
                    confidence in the regulated entity, issue and serve
                    upon such party an order removing such party from
                    office or prohibiting such party from further
                    participation in any manner in the conduct of the
                    affairs of the regulated entity without the prior
                    written consent of the Director.
                        ``(B) Provisions applicable to order.--
                                ``(i) Copy.--A copy of any order under
                            subparagraph (A) shall be served upon the
                            relevant regulated entity, at which time the
                            entity-affiliated party who is subject to the
                            order (if a director or an officer) shall cease
                            to be a director or officer of such regulated
                            entity.
                                ``(ii) Effect of acquittal.--A finding of
                            not guilty or other disposition of the charge
                            shall not preclude the Director from
                            instituting proceedings after such finding or
                            disposition to remove a party from office or to
                            prohibit further participation in the affairs
                            of a regulated entity pursuant to subsection
                            (a) or (b).
                                ``(iii) Effective period.--Unless
                            terminated by the Director, any notice of
                            suspension or order of removal issued under
                            this subsection shall remain effective and
                            outstanding until the completion of any hearing
                            or appeal authorized under paragraph (4).
                ``(3) Authority of remaining board members.--
                        ``(A) In general.--If at any time, because of the
                    suspension of 1 or more directors pursuant to this
                    section, there shall be on the board of directors of a
                    regulated entity less than a quorum of directors not so
                    suspended, all powers and functions vested in or
                    exercisable by such board shall vest in and be
                    exercisable by the director or directors on the board
                    not so suspended, until such time as there shall be a
                    quorum of the board of directors.
                        ``(B) Appointment of temporary directors.--If all
                    of the directors of a regulated entity are suspended
                    pursuant to this section, the Director shall appoint
                    persons to serve temporarily as directors pending the
                    termination of such suspensions, or until such time as
                    those who have been suspended cease to be directors of
                    the regulated entity and their respective successors
                    take office.
                ``(4) Hearing regarding continued participation.--
                        ``(A) In general.--Not later than 30 days after the
                    date of service of any notice of suspension or order of
                    removal issued pursuant to paragraph (1) or (2), the
                    entity-affiliated party may request in writing an
                    opportunity to appear before the Director to show that
                    the continued service or participation in the conduct
                    of the affairs of the regulated entity by such party
                    does not, or is not likely to, pose a threat to the
                    interests of the regulated entity, or threaten to
                    impair public confidence in the regulated entity.
                        ``(B) Timing and form of hearing.--Upon receipt of
                    a request for a hearing under subparagraph (A), the
                    Director shall fix a time (not later than 30 days after
                    the date of receipt of such request, unless extended at
                    the request of such party) and place at which the
                    entity-affiliated party may appear, personally or
                    through counsel, before the Director or 1 or more
                    designated employees of the Director to submit written
                    materials (or, at the discretion of the Director, oral
                    testimony) and oral argument.
                        ``(C) Determination.--Not later than 60 days after
                    the date of a hearing under subparagraph (B), the
                    Director shall notify the entity-affiliated party
                    whether the suspension or prohibition from
                    participation in any manner in the conduct of the
                    affairs of the regulated entity will be continued,
                    terminated, or otherwise modified, or whether the order
                    removing such party from office or prohibiting such
                    party from further participation in any manner in the
                    conduct of the affairs of the regulated entity will be
                    rescinded or otherwise modified. Such notification
                    shall contain a statement of the basis for any adverse
                    decision of the Director.
                ``(5) Rules.--The Director is authorized to prescribe such
            rules as may be necessary to carry out this subsection.''.
        (b) Conforming Amendments.--
                (1) Safety and soundness act.--Subtitle C of the Federal
            Housing Enterprises Financial Safety and Soundness Act of 1992
            (12 U.S.C. 4501 et seq.) is amended--
                        (A) in section 1317(f), by striking ``section
                    1379B'' and inserting ``section 1379D'';
                        (B) in section 1373(a)--
                                (i) in paragraph (1), by striking ``or
                            1376(c)'' and inserting ``, 1376(c), or 1377'';
                                (ii) in paragraph (2), by inserting ``or
                            1377'' after'' 1371''; and
                                (iii) in paragraph (4), by inserting ``or
                            removal or prohibition'' after ``cease and
                            desist''; and
                        (C) in section 1374(a)--
                                (i) by striking ``or 1376'' and inserting
                            ``1313B, 1376, or 1377''; and
                                (ii) by striking ``such section'' and
                            inserting ``this title''.
                (2) Fannie mae charter act.--Section 308(b) of the Federal
            National Mortgage Association Charter Act (12 U.S.C. 1723(b))
            is amended in the second sentence, by striking ``The'' and
            inserting ``Except to the extent that action under section 1377
            of the Federal Housing Enterprises Financial Safety and
            Soundness Act of 1992 temporarily results in a lesser number,
            the''.
                (3) Freddie mac charter act.--Section 303(a)(2)(A) of the
            Federal Home Loan Mortgage Corporation Act (12 U.S.C.
            1452(a)(2)(A)) is amended, in the second sentence, by striking
            ``The'' and inserting ``Except to the extent action under
            section 1377 of the Federal Housing Enterprises Financial
            Safety and Soundness Act of 1992 temporarily results in a
            lesser number, the''.

    SEC. 1154. ENFORCEMENT AND JURISDICTION.

        Section 1375 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4635) is amended--
                (1) by striking subsection (a) and inserting the following
            new subsection:
        ``(a) Enforcement.--The Director may, in the discretion of the
    Director, apply to the United States District Court for the District of
    Columbia, or the United States district court within the jurisdiction
    of which the headquarters of the regulated entity is located, for the
    enforcement of any effective and outstanding notice or order issued
    under this subtitle or subtitle B, or request that the Attorney General
    of the United States bring such an action. Such court shall have
    jurisdiction and power to order and require compliance with such notice
    or order.''; and
                (2) in subsection (b), by striking ``or 1376'' and
            inserting ``1313B, 1376, or 1377''.

    SEC. 1155. CIVIL MONEY PENALTIES.

        Section 1376 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4636) is amended--
                (1) by striking subsection (a) and inserting the following:
        ``(a) In General.--The Director may impose a civil money penalty in
    accordance with this section on any regulated entity or any entity-
    affiliated party. The Director shall not impose a civil penalty in
    accordance with this section on any regulated entity or any entity-
    affiliated party for any violation that is addressed under section
    1345(a).'';
                (2) by striking subsection (b) and inserting the following:
        ``(b) Amount of Penalty.--
                ``(1) First tier.--A regulated entity or entity-affiliated
            party shall forfeit and pay a civil penalty of not more than
            $10,000 for each day during which a violation continues, if
            such regulated entity or party--
                        ``(A) violates any provision of this title, the
                    authorizing statutes, or any order, condition, rule, or
                    regulation under this title or any authorizing statute;
                        ``(B) violates any final or temporary order or
                    notice issued pursuant to this title;
                        ``(C) violates any condition imposed in writing by
                    the Director in connection with the grant of any
                    application or other request by such regulated entity;
                    or
                        ``(D) violates any written agreement between the
                    regulated entity and the Director.
                ``(2) Second tier.--Notwithstanding paragraph (1), a
            regulated entity or entity-affiliated party shall forfeit and
            pay a civil penalty of not more than $50,000 for each day
            during which a violation, practice, or breach continues, if--
                        ``(A) the regulated entity or entity-affiliated
                    party, respectively--
                                ``(i) commits any violation described in
                            any subparagraph of paragraph (1);
                                ``(ii) recklessly engages in an unsafe or
                            unsound practice in conducting the affairs of
                            the regulated entity; or
                                ``(iii) breaches any fiduciary duty; and
                        ``(B) the violation, practice, or breach--
                                ``(i) is part of a pattern of misconduct;
                                ``(ii) causes or is likely to cause more
                            than a minimal loss to the regulated entity; or
                                ``(iii) results in pecuniary gain or other
                            benefit to such party.
                ``(3) Third tier.--Notwithstanding paragraphs (1) and (2),
            any regulated entity or entity-affiliated party shall forfeit
            and pay a civil penalty in an amount not to exceed the
            applicable maximum amount determined under paragraph (4) for
            each day during which such violation, practice, or breach
            continues, if such regulated entity or entity-affiliated
            party--
                        ``(A) knowingly--
                                ``(i) commits any violation described in
                            any subparagraph of paragraph (1);
                                ``(ii) engages in any unsafe or unsound
                            practice in conducting the affairs of the
                            regulated entity; or
                                ``(iii) breaches any fiduciary duty; and
                        ``(B) knowingly or recklessly causes a substantial
                    loss to the regulated entity or a substantial pecuniary
                    gain or other benefit to such party by reason of such
                    violation, practice, or breach.
                ``(4) Maximum amounts of penalties for any violation
            described in paragraph (3).--The maximum daily amount of any
            civil penalty which may be assessed pursuant to paragraph (3)
            for any violation, practice, or breach described in paragraph
            (3) is--
                        ``(A) in the case of any entity-affiliated party,
                    an amount not to exceed $2,000,000; and
                        ``(B) in the case of any regulated entity,
                    $2,000,000.'';
                (3) in subsection (c)--
                        (A) by striking ``enterprise'' each place that term
                    appears and inserting ``regulated entity'';
                        (B) by inserting ``or entity-affiliated party''
                    before ``in writing''; and
                        (C) by inserting ``or entity-affiliated party''
                    before ``has been given'';
                (4) in subsection (d)--
                        (A) by striking ``or director'' each place such
                    term appears and inserting ``director, or entity-
                    affiliated party'';
                        (B) by striking ``an enterprise'' and inserting ``a
                    regulated entity'';
                        (C) by striking ``the enterprise'' and inserting
                    ``the regulated entity'';
                        (D) by striking ``request the Attorney General of
                    the United States to'';
                        (E) by inserting ``, or the United States district
                    court within the jurisdiction of which the headquarters
                    of the regulated entity is located,'' after ``District
                    of Columbia'';
                        (F) by striking ``, or may, under the direction and
                    control of the Attorney General of the United States,
                    bring such an action''; and
                        (G) by striking ``and section 1374''; and
                (5) in subsection (g), by striking ``An enterprise'' and
            inserting ``A regulated entity''.

    SEC. 1156. CRIMINAL PENALTY.

        (a) In General.--Subtitle C of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.) is
    amended by inserting after section 1377, as added by this Act, the
    following:

    ``SEC. 1378. CRIMINAL PENALTY.

        ``Whoever, being subject to an order in effect under section 1377,
    without the prior written approval of the Director, knowingly
    participates, directly or indirectly, in any manner (including by
    engaging in an activity specifically prohibited in such an order) in
    the conduct of the affairs of any regulated entity shall,
    notwithstanding section 3571 of title 18, be fined not more than
    $1,000,000, imprisoned for not more than 5 years, or both.''.
        (b) Technical and Conforming Amendments.--The Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501
    et seq.) is amended--
                (1) in section 1379 (as so designated by this Act)--
                        (A) by striking ``an enterprise'' and inserting ``a
                    regulated entity''; and
                        (B) by striking ``the enterprise'' and inserting
                    ``the regulated entity'';
                (2) in section 1379A (as so designated by this Act), by
            striking ``an enterprise'' and inserting ``a regulated
            entity'';
                (3) in section 1379B(c) (as so designated by this Act), by
            striking ``enterprise'' and inserting ``regulated entity''; and
                (4) in section 1379D (as so designated by this Act), by
            striking ``enterprise'' and inserting ``regulated entity''.

    SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.

        Section 1379 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4637), as so designated by this
    Act, is amended--
                (1) by striking ``2-year'' and inserting ``6-year'';
                (2) by striking ``a director or executive officer of an
            enterprise'' and inserting ``an entity-affiliated party'';
                (3) by striking ``director or officer'' each place that
            term appears and inserting ``entity-affiliated party''; and
                (4) by striking ``enterprise.'' and inserting ``regulated
            entity.''.

    SEC. 1158. SUBPOENA AUTHORITY.

        (a) In General.--Section 1379B of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) is
    amended--
                (1) in subsection (a)--
                        (A) in the matter preceding paragraph (1)--
                                (i) by striking ``administrative'';
                                (ii) by inserting ``, examination, or
                            investigation'' after ``proceeding'';
                                (iii) by striking ``subtitle'' and
                            inserting ``title''; and
                                (iv) by inserting ``or any designated
                            representative thereof, including any person
                            designated to conduct any hearing under this
                            subtitle'' after ``Director''; and
                        (B) in paragraph (4), by striking ``issued by the
                    Director'';
                (2) in subsection (b), by inserting ``or in any territory
            or other place subject to the jurisdiction of the United
            States'' after ``State'';
                (3) by striking subsection (c) and inserting the following:
        ``(c) Enforcement.--
                ``(1) In general.--The Director, or any party to
            proceedings under this subtitle, may apply to the United States
            District Court for the District of Columbia, or the United
            States district court for the judicial district of the United
            States in any territory in which such proceeding is being
            conducted, or where the witness resides or carries on business,
            for enforcement of any subpoena or subpoena duces tecum issued
            pursuant to this section.
                ``(2) Power of court.--The courts described under paragraph
            (1) shall have the jurisdiction and power to order and require
            compliance with any subpoena issued under paragraph (1).'';
                (4) in subsection (d), by inserting ``enterprise-affiliated
            party'' before ``may allow''; and
                (5) by adding at the end the following:
        ``(e) Penalties.--A person shall be guilty of a misdemeanor, and
    upon conviction, shall be subject to a fine of not more than $1,000 or
    to imprisonment for a term of not more than 1 year, or both, if that
    person willfully fails or refuses, in disobedience of a subpoena issued
    under subsection (c), to--
                ``(1) attend court;
                ``(2) testify in court;
                ``(3) answer any lawful inquiry; or
                ``(4) produce books, papers, correspondence, contracts,
            agreements, or such other records as requested in the
            subpoena.''.

                         Subtitle E--General Provisions

    SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.

        (a) Amendments to 1992 Act.--The Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as
    amended by this Act, is amended--
                (1) in section 1315 (12 U.S.C. 4515)--
                        (A) in subsection (a)--
                                (i) by striking ``(a) Office Personnel.--
                            The'' and inserting ``(a) In General.--Subject
                            to title III of the Federal Housing Finance
                            Regulatory Reform Act of 2008, the''; and
                                (ii) by striking ``the Office'' each place
                            that term appears and inserting ``the Agency'';
                        (B) in subsection (c), by striking ``the Office''
                    and inserting ``the Agency'';
                        (C) in subsection (e), by striking ``the Office''
                    and inserting ``the Agency'';
                        (D) by striking subsection (d) and redesignating
                    subsection (e) as subsection (d); and
                        (E) by striking subsection (f);
                (2) in section 1319A (12 U.S.C. 4520)--
                        (A) by striking ``(a) In General.--''; and
                        (B) by striking subsection (b);
                (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the
            last sentence;
                (4) by striking section 1383 (12 U.S.C. 1451 note);
                (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C.
            4523, 4524, 4525) by striking ``the Office'' each place that
            term appears and inserting ``the Agency''; and
                (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C.
            4521, 4619(a)(3)), by striking ``Committee on Banking, Finance
            and Urban Affairs'' each place such term appears and inserting
            ``Committee on Financial Services''.
        (b) Amendments to Fannie Mae Charter Act.--The Federal National
    Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
                (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)),
            309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12
            U.S.C. 1723a(k)(1)), by striking ``Director of the Office of
            Federal Housing Enterprise Oversight of the Department of
            Housing and Urban Development'' each place that term appears,
            and inserting ``Director of the Federal Housing Finance
            Agency''; and
                (2) in section 309--
                        (A) in subsection (m) (12 U.S.C. 1723a(m))--
                                (i) in paragraph (1), by striking ``to the
                            Secretary, in a form determined by the
                            Secretary'' and inserting ``to the Director of
                            the Federal Housing Finance Agency, in a form
                            determined by the Director''; and
                                (ii) in paragraph (2), by striking ``to the
                            Secretary, in a form determined by the
                            Secretary'' and inserting ``to the Director of
                            the Federal Housing Finance Agency, in a form
                            determined by the Director'';
                        (B) in subsection (n) (12 U.S.C. 1723a(n))--
                                (i) in paragraph (1), by striking ``and the
                            Secretary'' and inserting ``and the Director of
                            the Federal Housing Finance Agency''; and
                                (ii) in paragraph (2), by striking
                            ``Secretary'' each place that term appears and
                            inserting ``Director of the Federal Housing
                            Finance Agency''; and
                        (C) in paragraph (3)(B), by striking ``Secretary''
                    and inserting ``Director of the Federal Housing Finance
                    Agency''.
        (c) Amendments to Freddie Mac Charter Act.--The Federal Home Loan
    Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is amended--
                (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)),
            303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12
            U.S.C. 1456(c)(1)), by striking ``Director of the Office of
            Federal Housing Enterprise Oversight of the Department of
            Housing and Urban Development'' each place that term appears,
            and inserting ``Director of the Federal Housing Finance
            Agency'';
                (2) in section 306 (12 U.S.C. 1455)--
                        (A) in subsection (c)(2), by inserting ``the''
                    after ``Secretary of'';
                        (B) in subsection (i)--
                                (i) by striking ``section 1316(c)'' and
                            inserting ``section 306(c)''; and
                                (ii) by striking ``section 106'' and
                            inserting ``section 1316''; and
                        (C) in subsection (j)(2), by striking ``of
                    substantially'' and inserting ``or substantially''; and
                (3) in section 307 (12 U.S.C. 1456)--
                        (A) in subsection (e)--
                                (i) in paragraph (1), by striking ``to the
                            Secretary, in a form determined by the
                            Secretary'' and inserting ``to the Director of
                            the Federal Housing Finance Agency, in a form
                            determined by the Director''; and
                                (ii) in paragraph (2), by striking ``to the
                            Secretary, in a form determined by the
                            Secretary'' and inserting ``to the Director of
                            the Federal Housing Finance Agency, in a form
                            determined by the Director''; and
                        (B) in subsection (f)--
                                (i) in paragraph (1), by striking ``and the
                            Secretary'' and inserting ``and the Director of
                            the Federal Housing Finance Agency'';
                                (ii) in paragraph (2), by striking ``the
                            Secretary'' each place that term appears and
                            inserting ``the Director of the Federal Housing
                            Finance Agency''; and
                                (iii) in paragraph (3)(B), by striking
                            ``Secretary'' and inserting ``Director of the
                            Federal Housing Finance Agency''.
        (d) Amendment to Title 18, United States Code.--Section 1905 of
    title 18, United States Code, is amended by striking ``Office of
    Federal Housing Enterprise Oversight'' and inserting ``Federal Housing
    Finance Agency''.
        (e) Amendments to Flood Disaster Protection Act of 1973.--Section
    102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
    4012a(f)(3)(A)) is amended by striking ``Director of the Office of
    Federal Housing Enterprise Oversight of the Department of Housing and
    Urban Development'' and inserting ``Director of the Federal Housing
    Finance Agency''.
        (f) Amendment to Department of Housing and Urban Development Act.--
    Section 5 of the Department of Housing and Urban Development Act (42
    U.S.C. 3534) is amended by striking subsection (d).
        (g) Amendments to Title 5, United States Code.--Title 5, United
    States Code, is amended--
                (1) in section 5313, by striking the item relating to the
            Director of the Office of Federal Housing Enterprise Oversight,
            Department of Housing and Urban Development and inserting the
            following new item:
                ``Director of the Federal Housing Finance Agency.''; and
                (2) in section 3132(a)(1)--
                        (A) in subparagraph (B), by striking ``,, and'' and
                    inserting ``, and'';
                        (B) in subparagraph (D)--
                                (i) by striking ``the Federal Housing
                            Finance Board'';
                                (ii) by striking ``the Office of Federal
                            Housing Enterprise Oversight of the Department
                            of Housing and Urban Development'' and
                            inserting ``the Federal Housing Finance
                            Agency''; and
                                (iii) by striking ``or or'' at the end;
                        (C) in subparagraph (E), as added by section
                    8(d)(1)(B)(iii) of Public Law 107-123, by adding ``or''
                    at the end; and
                        (D) by redesignating subparagraph (E), as added by
                    section 10702(c)(1)(C) of Public Law 107-171, as
                    subparagraph (F).
        (h) Amendment to Sarbanes-Oxley Act.--Section 105(b)(5)(B)(ii)(II)
    of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is
    amended by inserting ``and the Director of the Federal Housing Finance
    Agency,'' after ``Commission,''.
        (i) Amendment to Federal Deposit Insurance Act.--Section
    11(t)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C.
    1821(t)(2)(A)) is amended by adding at the end the following:
                                ``(vii) Federal Housing Finance Agency.''.

    SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES.

        (a) Fannie Mae.--
                (1) In general.--Section 308(b) of the Federal National
            Mortgage Association Charter Act (12 U.S.C. 1723(b)) is
            amended--
                        (A) in the first sentence, by striking ``eighteen
                    persons, five of whom shall be appointed annually by
                    the President of the United States, and the remainder
                    of whom'' and inserting ``13 persons, or such other
                    number that the Director determines appropriate, who'';
                        (B) in the second sentence, by striking ``appointed
                    by the President'';
                        (C) in the third sentence--
                                (i) by striking ``appointed or''; and
                                (ii) by striking ``, except that any such
                            appointed member may be removed from office by
                            the President for good cause'';
                        (D) in the fourth sentence, by striking
                    ``elective''; and
                        (E) by striking the fifth sentence.
                (2) Transitional provision.--The amendments made by
            paragraph (1) shall not apply to any appointed position of the
            board of directors of the Federal National Mortgage Association
            until the expiration of the annual term for such position
            during which the effective date under section 1163 occurs.
        (b) Freddie Mac.--
                (1) In general.--Section 303(a)(2) of the Federal Home Loan
            Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
                        (A) in subparagraph (A)--
                                (i) in the first sentence, by striking ``18
                            persons, 5 of whom shall be appointed annually
                            by the President of the United States and the
                            remainder of whom'' and inserting ``13 persons,
                            or such other number as the Director determines
                            appropriate, who''; and
                                (ii) in the second sentence, by striking
                            ``appointed by the President of the United
                            States'';
                        (B) in subparagraph (B)--
                                (i) by striking ``such or''; and
                                (ii) by striking ``, except that any
                            appointed member may be removed from office by
                            the President for good cause''; and
                        (C) in subparagraph (C)--
                                (i) by striking the first sentence; and
                                (ii) by striking ``elective''.
                (2) Transitional provision.--The amendments made by
            paragraph (1) shall not apply to any appointed position of the
            board of directors of the Federal Home Loan Mortgage
            Corporation until the expiration of the annual term for such
            position during which the effective date under section 1163
            occurs.

    SEC. 1163. EFFECTIVE DATE.

        Except as otherwise specifically provided in this title, this title
    and the amendments made by this title shall take effect on, and shall
    apply beginning on, the date of enactment of this Act.

                       TITLE II--FEDERAL HOME LOAN BANKS

    SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE ENTERPRISES AND THE
                  FEDERAL HOME LOAN BANKS.

        Section 1313 of the Federal Housing Enterprises Financial Safety
    and Soundness Act of 1992 (12 U.S.C. 4513) is amended by adding at the
    end the following:
        ``(f) Recognition of Distinctions Between the Enterprises and the
    Federal Home Loan Banks.--Prior to promulgating any regulation or
    taking any other formal or informal agency action of general
    applicability and future effect relating to the Federal Home Loan Banks
    (other than any regulation, advisory document, or examination guidance
    of the Federal Housing Finance Board that the Director reissues after
    the authority of the Director over the Federal Home Loan Banks takes
    effect), including the issuance of an advisory document or examination
    guidance, the Director shall consider the differences between the
    Federal Home Loan Banks and the enterprises with respect to--
                ``(1) the Banks'--
                        ``(A) cooperative ownership structure;
                        ``(B) the mission of providing liquidity to
                    members;
                        ``(C) affordable housing and community development
                    mission;
                        ``(D) capital structure; and
                        ``(E) joint and several liability; and
                ``(2) any other differences that the Director considers
            appropriate.''.

    SEC. 1202. DIRECTORS.

        Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427) is
    amended--
                (1) by striking subsection (a) and inserting the following:
        ``(a) Number; Election; Qualifications; Conflicts of Interest.--
                ``(1) In general.--Subject to paragraphs (2) through (4),
            the management of each Federal Home Loan Bank shall be vested
            in a board of 13 directors, or such other number as the
            Director determines appropriate.
                ``(2) Board makeup.--The board of directors of each Bank
            shall be comprised of--
                        ``(A) member directors, who shall comprise at least
                    the majority of the members of the board of directors;
                    and
                        ``(B) independent directors, who shall comprise not
                    fewer than \2/5\ of the members of the board of
                    directors.
                ``(3) Selection criteria.--
                        ``(A) In general.--Each member of the board of
                    directors shall be--
                                ``(i) elected by plurality vote of the
                            members, in accordance with procedures
                            established under this section; and
                                ``(ii) a citizen of the United States.
                        ``(B) Independent director criteria.--
                                ``(i) In general.--Each independent
                            director that is not a public interest director
                            under clause (ii) shall have demonstrated
                            knowledge of, or experience in, financial
                            management, auditing and accounting, risk
                            management practices, derivatives, project
                            development, or organizational management, or
                            such other knowledge or expertise as the
                            Director may provide by regulation.
                                ``(ii) Public interest.--Not fewer than 2
                            of the independent directors shall have more
                            than 4 years of experience in representing
                            consumer or community interests on banking
                            services, credit needs, housing, or financial
                            consumer protections.
                                ``(iii) Conflicts of interest.--No
                            independent director may, during the term of
                            service on the board of directors, serve as an
                            officer of any Federal Home Loan Bank or as a
                            director, officer, or employee of any member of
                            a Bank, or of any person that receives advances
                            from a Bank.
                ``(4) Definitions.--For purposes of this section, the
            following definitions shall apply:
                        ``(A) Independent director.--The terms `independent
                    director' and `independent directorship' mean a member
                    of the board of directors of a Federal Home Loan Bank
                    who is a bona fide resident of the district in which
                    the Federal Home Loan Bank is located, or the
                    directorship held by such a person, respectively.
                        ``(B) Member director.--The terms `member director'
                    and `member directorship' mean a member of the board of
                    directors of a Federal Home Loan Bank who is an officer
                    or director of a member institution that is located in
                    the district in which the Federal Home Loan Bank is
                    located, or the directorship held by such a person,
                    respectively.'';
                (2) by striking ``elective'' each place that term appears,
            other than in subsections (d), (e), and (f), and inserting
            ``member'';
                (3) in subsection (b)--
                        (A) by striking the subsection heading and all that
                    follows through ``Each elective directorship'' and
                    inserting the following:
        ``(b) Directorships.--
                ``(1) Member directorships.--Each member directorship'';
            and
                        (B) by adding at the end the following:
                ``(2) Independent directorships.--
                        ``(A) Elections.--Each independent director--
                                ``(i) shall be elected by the members
                            entitled to vote, from among eligible persons
                            nominated, after consultation with the Advisory
                            Council of the Bank, by the board of directors
                            of the Bank; and
                                ``(ii) shall be elected by a plurality of
                            the votes of the members of the Bank at large,
                            with each member having the number of votes for
                            each such directorship as it has under
                            paragraph (1) in an election to fill member
                            directorships.
                        ``(B) Criteria.--Nominees shall meet all applicable
                    requirements prescribed in this section.
                        ``(C) Nomination and election procedures.--
                    Procedures for nomination and election of independent
                    directors shall be prescribed by the bylaws of each
                    Federal Home Loan Bank, in a manner consistent with the
                    rules and regulations of the Agency.'';
                (4) in subsection (c)--
                        (A) by striking ``elective'' each place that term
                    appears and inserting ``member'', except--
                                (i) in the second sentence, the second
                            place that term appears; and
                                (ii) each place that term appears in the
                            fifth sentence; and
                        (B) in the second sentence--
                                (i) by inserting ``(A) except as provided
                            in clause (B) of this sentence,'' before ``if
                            at any time''; and
                                (ii) by inserting before the period at the
                            end the following: ``, and (B) clause (A) of
                            this sentence shall not apply to the
                            directorships of any Federal Home Loan Bank
                            resulting from the merger of any 2 or more such
                            Banks'';
                (5) in subsection (d)--
                        (A) in the first sentence--
                                (i) by striking ``, whether elected or
                            appointed,''; and
                                (ii) by striking ``3 years'' and inserting
                            ``4 years'';
                        (B) in the second sentence--
                                (i) by striking ``Federal Home Loan Bank
                            System Modernization Act of 1999'' and
                            inserting ``Federal Housing Finance Regulatory
                            Reform Act of 2008'';
                                (ii) by striking ``\1/3\'' and inserting
                            ``\1/4\''; and
                                (iii) by striking ``or appointed''; and
                        (C) in the third sentence--
                                (i) by striking ``an elective'' each place
                            that term appears and inserting ``a''; and
                                (ii) by striking ``in any elective
                            directorship or elective directorships'';
                (6) in subsection (f)--
                        (A) by striking paragraph (2);
                        (B) by striking ``appointed or'' each place that
                    term appears; and
                        (C) in paragraph (3)--
                                (i) by striking ``(3) Elected bank
                            directors.--'' and inserting ``(2) Election
                            process.--''; and
                                (ii) by striking ``elective'' each place
                            that term appears;
                (7) in subsection (i)--
                        (A) in paragraph (1), by striking ``Subject to
                    paragraph (2), each'' and inserting ``Each''; and
                        (B) by striking paragraph (2) and inserting the
                    following:
                ``(2) Annual report.--The Director shall include, in the
            annual report submitted to the Congress pursuant to section
            1319B of the Federal Housing Enterprises Financial Safety and
            Soundness Act of 1992, information regarding the compensation
            and expenses paid by the Federal Home Loan Banks to the
            directors on the boards of directors of the Banks.''; and
                (8) by adding at the end the following:
        ``(l) Transition Rule.--Any member of the board of directors of a
    Bank elected or appointed in accordance with this section prior to the
    date of enactment of this subsection may continue to serve as a member
    of that board of directors for the remainder of the existing term of
    service.''.

    SEC. 1203. DEFINITIONS.

        Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is
    amended--
                (1) by striking paragraphs (1), (10), and (11);
                (2) by redesignating paragraphs (2) through (9) as
            paragraphs (1) through (8), respectively;
                (3) by redesignating paragraphs (12) and (13) as paragraphs
            (9) and (10), respectively; and
                (4) by adding at the end the following:
                ``(11) Director.--The term `Director' means the Director of
            the Federal Housing Finance Agency.
                ``(12) Agency.--The term `Agency' means the Federal Housing
            Finance Agency, established under section 1311 of the Federal
            Housing Enterprises Financial Safety and Soundness Act of
            1992.''.

    SEC. 1204. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS.

        The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than
    in provisions of that Act added or amended otherwise by this Act, is
    amended--
                (1) by striking sections 2A and 2B (12 U.S.C. 1422a,
            1422b);
                (2) in section 18 (12 U.S.C. 1438), by striking subsection
            (b);
                (3) in section 11 (12 U.S.C. 1431)--
                        (A) in subsection (b)--
                                (i) in the first sentence--
                                        (I) by striking ``The Board'' and
                                    inserting ``The Office of Finance, as
                                    agent for the Banks,''; and
                                        (II) by striking ``the Board'' and
                                    inserting ``such Office''; and
                                (ii) in the second and fourth sentences, by
                            striking ``the Board'' each place such term
                            appears and inserting ``the Office of
                            Finance'';
                        (B) in subsection (c)--
                                (i) by striking ``the Board'' the first
                            place such term appears and inserting ``the
                            Office of Finance, as agent for the Banks,'';
                            and
                                (ii) by striking ``the Board'' the second
                            place such term appears and inserting ``such
                            Office''; and
                        (C) in subsection (f)--
                                (i) by striking the 2 commas after
                            ``permit'' and inserting ``or''; and
                                (ii) by striking the comma after
                            ``require'';
                (4) in section 6 (12 U.S.C. 1426)--
                        (A) in subsection (b)(1), in the matter preceding
                    subparagraph (A), by striking ``Finance Board
                    approval'' and inserting ``approval by the Director'';
                    and
                        (B) in each of subsections (c)(4)(B) and (d)(2), by
                    striking ``Finance Board regulations'' each place that
                    term appears and inserting ``regulations of the
                    Director'';
                (5) in section 10(b) (12 U.S.C. 1430(b))--
                        (A) in the subsection heading, by striking ``Formal
                    Board Resolution'' and inserting ``Approval of
                    Director''; and
                        (B) by striking ``by formal resolution'';
                (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking
            ``Chairperson of the Federal Housing Finance Board'' and
            inserting ``Director'';
                (7) in section 15 (12 U.S.C. 1435), by inserting ``or the
            Director'' after ``the Board'';
                (8) by striking ``the Board'' each place that term appears
            and inserting ``the Director'';
                (9) by striking ``The Board'' each place that term appears
            and inserting ``The Director'';
                (10) by striking ``the Finance Board'' each place that term
            appears and inserting ``the Director'';
                (11) by striking ``The Finance Board'' each place that term
            appears and inserting ``The Director''; and
                (12) by striking ``Federal Housing Finance Board'' each
            place that term appears and inserting ``Director''.

    SEC. 1205. HOUSING GOALS.

        The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended
    by inserting after section 10b the following new section:

    ``SEC. 10C. HOUSING GOALS.

        ``(a) In General.--The Director shall establish housing goals with
    respect to the purchase of mortgages, if any, by the Federal Home Loan
    Banks. Such goals shall be consistent with the goals established under
    sections 1331 through 1334 of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992.
        ``(b) Considerations.--In establishing the goals required by
    subsection (a), the Director shall consider the unique mission and
    ownership structure of the Federal Home Loan Banks.
        ``(c) Transition Period.--To facilitate an orderly transition, the
    Director shall establish interim target goals for purposes of this
    section for each of the 2 calendar years following the date of
    enactment of this section.
        ``(d) Monitoring and Enforcement of Goals.--The requirements of
    section 1336 of the Federal Housing Enterprises Safety and Soundness
    Act of 1992, shall apply to this section, in the same manner and to the
    same extent as that section applies to the Federal housing enterprises.
        ``(e) Annual Report.--The Director shall annually report to
    Congress on the performance of the Banks in meeting the goals
    established under this section.''.

    SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

        Section 4(a)(1) of the Federal Home Loan Bank Act (12 U.S.C.
    1424(a)(1)) is amended--
                (1) by inserting after ``savings bank,'' the following:
            ``community development financial institution,''; and
                (2) in subparagraph (B), by inserting after ``United
            States,'' the following: ``or, in the case of a community
            development financial institution, is certified as a community
            development financial institution under the Community
            Development Banking and Financial Institutions Act of 1994.''.

    SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN BANKS.

        The Federal Home Loan Bank Act is amended by inserting after
    section 20 (12 U.S.C. 1440) the following new section:

    ``SEC. 20A. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN BANKS.

        ``(a) Information on Financial Condition.--In order to enable each
    Federal Home Loan Bank to evaluate the financial condition of one or
    more of the other Federal Home Loan Banks individually and the Federal
    Home Loan Bank System (including any risks associated with the issuance
    or repayment of consolidated Federal Home Loan Bank bonds and
    debentures or other borrowings and the joint and several liabilities of
    the Banks incurred due to such borrowings), as well as to comply with
    any of its obligations under the Securities Exchange Act of 1934 (15
    U.S.C. 78a et seq.), the Director shall make available to the Banks
    such reports, records, or other information as may be available,
    relating to the condition of any Federal Home Loan Bank.
        ``(b) Sharing of Information.--
                ``(1) In general.--The Director shall promulgate
            regulations to facilitate the sharing of information made
            available under subsection (a) directly among the Federal Home
            Loan Banks.
                ``(2) Limitation.--Notwithstanding paragraph (1), a Federal
            Home Loan Bank responding to a request from another Bank or
            from the Director for information pursuant to this section may
            request that the Director determine that such information is
            proprietary and that the public interest requires that such
            information not be shared.
        ``(c) Limitation.--Nothing in this section shall affect the
    obligations of any Federal Home Loan Bank under the Securities Exchange
    Act of 1934 (15 U.S.C. 78a et seq.) or the regulations issued by the
    Securities and Exchange Commission thereunder.
        ``(d) No Waiver of Privilege.--The Director shall not be deemed to
    have waived any privilege applicable to any information concerning a
    Federal Home Loan Bank by transferring, or permitting the transfer of,
    that information to any other Federal Home Loan Bank for the purposes
    set out in subsection (a).''.

    SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.

        (a) In General.--The Federal Home Loan Banks shall be exempt from
    compliance with--
                (1) sections 13(e), 14(a), and 14(c) of the Securities
            Exchange Act of 1934, and related Commission regulations;
                (2) section 15 of the Securities Exchange Act of 1934, and
            related Commission regulations, with respect to transactions in
            the capital stock of a Federal Home Loan Bank;
                (3) section 17A of the Securities Exchange Act of 1934, and
            related Commission regulations, with respect to the transfer of
            the securities of a Federal Home Loan Bank; and
                (4) the Trust Indenture Act of 1939.
        (b) Member Exemption.--The members of the Federal Home Loan Bank
    System shall be exempt from compliance with sections 13(d), 13(f),
    13(g), 14(d), and 16 of the Securities Exchange Act of 1934, and
    related Commission regulations, with respect to ownership of or
    transactions in the capital stock of the Federal Home Loan Banks by
    such members.
        (c) Exempted and Government Securities.--
                (1) Capital stock.--The capital stock issued by each of the
            Federal Home Loan Banks under section 6 of the Federal Home
            Loan Bank Act are--
                        (A) exempted securities, within the meaning of
                    section 3(a)(2) of the Securities Act of 1933; and
                        (B) exempted securities, within the meaning of
                    section 3(a)(12)(A) of the Securities Exchange Act of
                    1934, except to the extent provided in section 38 of
                    that Act.
                (2) Other obligations.--The debentures, bonds, and other
            obligations issued under section 11 of the Federal Home Loan
            Bank Act (12 U.S.C. 1431) are--
                        (A) exempted securities, within the meaning of
                    section 3(a)(2) of the Securities Act of 1933;
                        (B) government securities, within the meaning of
                    section 3(a)(42) of the Securities Exchange Act of
                    1934; and
                        (C) government securities, within the meaning of
                    section 2(a)(16) of the Investment Company Act of 1940.
                (3) Brokers and dealers.--A person (other than a Federal
            Home Loan Bank effecting transactions for members of the
            Federal Home Loan Bank System) that effects transactions in the
            capital stock or other obligations of a Federal Home Loan Bank,
            for the account of others or for that person's own account, as
            applicable, is a broker or dealer, as those terms are defined
            in paragraphs (4) and (5), respectively, of section 3(a) of the
            Securities Exchange Act of 1934, but is excluded from the
            definition of--
                        (A) the term ``government securities broker'' under
                    section 3(a)(43) of the Securities Exchange Act of
                    1934; and
                        (B) the term ``government securities dealer'' under
                    section 3(a)(44) of the Securities Exchange Act of
                    1934.
        (d) Exemption From Reporting Requirements.--The Federal Home Loan
    Banks shall be exempt from periodic reporting requirements under the
    securities laws pertaining to the disclosure of--
                (1) related party transactions that occur in the ordinary
            course of the business of the Banks with members; and
                (2) the unregistered sales of equity securities.
        (e) Tender Offers.--Commission rules relating to tender offers
    shall not apply in connection with transactions in the capital stock of
    the Federal Home Loan Banks.
        (f) Regulations.--
                (1) In general.--The Commission shall promulgate such rules
            and regulations as may be necessary or appropriate in the
            public interest or in furtherance of this section and the
            exemptions provided in this section.
                (2) Considerations.--In issuing regulations under this
            section, the Commission shall consider the distinctive
            characteristics of the Federal Home Loan Banks when
            evaluating--
                        (A) the accounting treatment with respect to the
                    payment to the Resolution Funding Corporation;
                        (B) the role of the combined financial statements
                    of the Federal Home Loan Banks;
                        (C) the accounting classification of redeemable
                    capital stock; and
                        (D) the accounting treatment related to the joint
                    and several nature of the obligations of the Banks.
        (g) Definitions.--As used in this section--
                (1) the terms ``Bank'', ``Federal Home Loan Bank'',
            ``member'', and ``Federal Home Loan Bank System'' have the same
            meanings as in section 2 of the Federal Home Loan Bank Act (12
            U.S.C. 1422);
                (2) the term ``Commission'' means the Securities and
            Exchange Commission; and
                (3) the term ``securities laws'' has the same meaning as in
            section 3(a)(47) of the Securities Exchange Act of 1934 (15
            U.S.C. 78c(a)(47)).

    SEC. 1209. VOLUNTARY MERGERS.

        Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is
    amended--
                (1) by striking ``Whenever'' and inserting ``(a) In
            General.--Whenever''; and
                (2) by adding at the end the following:
        ``(b) Voluntary Mergers Authorized.--
                ``(1) In general.--Any Federal Home Loan Bank may, with the
            approval of the Director and of the boards of directors of the
            Banks involved, merge with another Bank.
                ``(2) Regulations required.--The Director shall promulgate
            regulations establishing the conditions and procedures for the
            consideration and approval of any voluntary merger described in
            paragraph (1), including the procedures for Bank member
            approval.''.

    SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.

        Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 1423) is
    amended--
                (1) by striking ``As soon'' and inserting ``(a) In
            General.--As soon''; and
                (2) by adding at the end the following:
        ``(b) Authority To Reduce Districts.--Notwithstanding subsection
    (a), the number of districts may be reduced to a number less than 8--
                ``(1) pursuant to a voluntary merger between Banks, as
            approved pursuant to section 26(b); or
                ``(2) pursuant to a decision by the Director to liquidate a
            Bank pursuant to section 1367 of the Federal Housing
            Enterprises Financial Safety and Soundness Act of 1992.''.

    SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

        (a) Total Asset Requirement.--Paragraph (10) of section 2 of the
    Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so redesignated by
    section 201(3) of this Act, is amended by striking ``$500,000,000''
    each place such term appears and inserting ``$1,000,000,000''.
        (b) Use of Advances for Community Development Activities.--Section
    10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is
    amended--
                (1) in paragraph (2)(B)--
                        (A) by striking ``and''; and
                        (B) by inserting ``, and community development
                    activities'' before the period at the end;
                (2) in paragraph (3)(E), by inserting ``or community
            development activities'' after ``agriculture,''; and
                (3) in paragraph (6)--
                        (A) by striking ``and''; and
                        (B) by inserting ``, and `community development
                    activities''' before ``shall''.

    SEC. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS.

        Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is
    amended--
                (1) in subsection (j)(12)--
                        (A) by striking subparagraph (C) and inserting the
                    following:
                        ``(C) Reports.--The Director shall annually report
                    to the Committee on Banking, Housing, and Urban Affairs
                    of the Senate and the Committee on Financial Services
                    of the House of Representatives on the collateral
                    pledged to the Banks, including an analysis of
                    collateral by type and by Bank district.''; and
                        (B) by adding at the end the following:
                        ``(D) Submission to congress.--The Director shall
                    submit the reports under subparagraphs (A) and (C) to
                    the Committee on Banking, Housing, and Urban Affairs of
                    the Senate and the Committee on Financial Services of
                    the House of Representatives, not later than 180 days
                    after the date of enactment of the Federal Housing
                    Finance Regulatory Reform Act of 2008.''; and
                (2) by adding at the end the following:
        ``(k) Public Use Database.--
                ``(1) Data.--Each Federal Home Loan Bank shall provide to
            the Director, in a form determined by the Director, census
            tract level data relating to mortgages purchased, if any,
            including--
                        ``(A) data consistent with that reported under
                    section 1323 of the Federal Housing Enterprises
                    Financial Safety and Soundness Act of 1992;
                        ``(B) data elements required to be reported under
                    the Home Mortgage Disclosure Act of 1975; and
                        ``(C) any other data elements that the Director
                    considers appropriate.
                ``(2) Public use database.--
                        ``(A) In general.--The Director shall make
                    available to the public, in a form that is useful to
                    the public (including forms accessible electronically),
                    and to the extent practicable, the data provided to the
                    Director under paragraph (1).
                        ``(B) Proprietary information.--Not withstanding
                    subparagraph (A), the Director may not provide public
                    access to, or disclose to the public, any information
                    required to be submitted under this subsection that the
                    Director determines is proprietary or that would
                    provide personally identifiable information and that is
                    not otherwise publicly accessible through other forms,
                    unless the Director determines that it is in the public
                    interest to provide such information.''.

    SEC. 1213. SEMIANNUAL REPORTS.

        Section 21B of the Federal Home Loan Bank Act is amended in
    subsection (f)(2)(C), by adding at the end the following:
                                ``(v) Semiannual reports.--The Director
                            shall report semiannually to the Committee on
                            Banking, Housing, and Urban Affairs of the
                            Senate and the Committee on Financial Services
                            of the House of Representatives on the
                            projected date for the completion of
                            contributions required by this section.''.

    SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME LOAN BANK.

        Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is
    amended by adding at the end the following: ``At least 30 days prior to
    liquidating or reorganizing any Bank under this section, the Director
    shall notify the Bank of its determination and the facts and
    circumstances upon which such determination is based. The Bank may
    contest that determination in a hearing before the Director, in which
    all issues shall be determined on the record pursuant to section 554 of
    title 5, United States Code.''.

    SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION OF ACQUIRED
                  MEMBER ASSETS.

        (a) Study.--The Director shall conduct a study on securitization of
    home mortgage loans purchased or to be purchased from member financial
    institutions under the Acquired Member Assets programs. In conducting
    the study, the Director shall establish a process for the formal
    submission of comments.
        (b) Elements.--The study shall encompass--
                (1) the benefits and risks associated with securitization
            of Acquired Member Assets;
                (2) the potential impact of securitization upon liquidity
            in the mortgage and broader credit markets;
                (3) the ability of the Federal Home Loan Bank or Banks in
            question to manage the risks associated with such a program;
                (4) the impact of such a program on the existing activities
            of the Banks, including their mortgage portfolios and advances;
            and
                (5) the joint and several liability of the Banks and the
            cooperative structure of the Federal Home Loan Bank System.
        (c) Consultations.--In conducting the study under this section, the
    Director shall consult with the Federal Home Loan Banks, the Banks'
    fiscal agent, representatives of the mortgage lending industry,
    practitioners in the structured finance field, and other experts as
    needed.
        (d) Report.--Not later than 1 year after the date of enactment of
    this Act, the Director shall submit a report to Congress on the results
    of the study conducted under subsection (a), including policy
    recommendations based on the analysis of the Director of the
    feasibility of mortgage-backed securities issuance by a Federal Home
    Loan Bank or Banks and the risks and benefits associated with such
    program or programs.
        (e) Definitions.--As used in this section, the terms ``member'',
    ``Bank'', and ``Federal Home Loan Bank'' have the same meanings as in
    section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422).

    SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS.

        (a) Right to Financial Privacy Act of 1978.--Section 1113(o) of the
    Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) is amended--
                (1) by striking ``Federal Housing Finance Board'' and
            inserting ``Federal Housing Finance Agency''; and
                (2) by striking ``Federal Housing Finance Board's'' and
            inserting ``Federal Housing Finance Agency's''.
        (b) Riegle Community Development and Regulatory Improvement Act of
    1994.--Section 117(e) of the Riegle Community Development and
    Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by
    striking ``Federal Housing Finance Board'' and inserting ``Federal
    Housing Finance Agency''.
        (c) Title 18, United States Code.--Title 18, United States Code, is
    amended by striking ``Federal Housing Finance Board'' each place such
    term appears in each of sections 212, 657, 1006, and 1014, and
    inserting ``Federal Housing Finance Agency''.
        (d) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily
    Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f
    note) is amended by striking ``Federal Housing Finance Board'' and
    inserting ``Federal Housing Finance Agency''.
        (e) Title 44, United States Code.--Section 3502(5) of title 44,
    United States Code, is amended by striking ``Federal Housing Finance
    Board'' and inserting ``Federal Housing Finance Agency''.
        (f) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of
    the Launching Our Communities' Access to Local Television Act of 2000
    (47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking ``Office of
    Federal Housing Enterprise Oversight, the Federal Housing Finance
    Board'' and inserting ``Federal Housing Finance Agency''.
        (g) FIRREA.--Section 1216 of the Financial Institutions Reform,
    Recovery, and Enhancement Act of 1989 (12 U.S.C. 1833e) is amended--
                (1) in subsection (a), by striking paragraph (3) and
            inserting the following:
                ``(3) the Federal Housing Finance Agency;'';
                (2) in subsection (b), by striking ``Federal National
            Mortgage Association'' and inserting ``Federal Home Loan Banks,
            the Federal National Mortgage Association,''; and
                (3) in subsection (c), by striking ``Finance Board'' and
            inserting ``Finance Agency''.

    SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK ADVANCES.

        (a) In General.--Not later than 1 year after the date of enactment
    of this Act, the Director shall conduct a study and submit a report to
    the Committee on Banking, Housing, and Urban Affairs of the Senate and
    the Committee on Financial Services of the House or Representatives on
    the extent to which loans and securities used as collateral to support
    Federal Home Loan Bank advances are consistent with the interagency
    guidance on nontraditional mortgage products.
        (b) Required Content.--The study required under subsection (a)
    shall--
                (1) consider and recommend any additional regulations,
            guidance, advisory bulletins, or other administrative actions
            necessary to ensure that the Federal Home Loan Banks are not
            supporting loans with predatory characteristics; and
                (2) include an opportunity for the public to comment on any
            recommendations made under paragraph (1).

    SEC. 1218. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR CERTAIN
                  RESIDENTIAL MORTGAGE LOANS.

        Section 10(j)(2) of the Federal Home Loan Bank Act (12 U.S.C.
    1430(j)(2)) is amended--
                (1) in subparagraph (A), by striking ``or'' at the end;
                (2) in subparagraph (B), by striking the period at the end
            and inserting ``; or''; and
                (3) by adding at the end the following:
                        ``(C) during the 2-year period beginning on the
                    date of enactment of this subparagraph, use such
                    percentage as the Director may by regulation establish
                    of any subsidized advances set aside to finance
                    homeownership under subparagraph (A) to refinance loans
                    that are secured by a first mortgage on a primary
                    residence of any family having an income at or below 80
                    percent of the median income for the area.''.

    TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND
                       THE FEDERAL HOUSING FINANCE BOARD

                               Subtitle A--OFHEO

    SEC. 1301. ABOLISHMENT OF OFHEO.

        (a) In General.--Effective at the end of the 1-year period
    beginning on the date of enactment of this Act, the Office of Federal
    Housing Enterprise Oversight of the Department of Housing and Urban
    Development and the positions of the Director and Deputy Director of
    such Office are abolished.
        (b) Disposition of Affairs.--During the 1-year period beginning on
    the date of enactment of this Act, the Director of the Office of
    Federal Housing Enterprise Oversight, solely for the purpose of winding
    up the affairs of the Office of Federal Housing Enterprise Oversight--
                (1) shall manage the employees of such Office and provide
            for the payment of the compensation and benefits of any such
            employee which accrue before the effective date of the transfer
            of such employee under section 1303; and
                (2) may take any other action necessary for the purpose of
            winding up the affairs of the Office.
        (c) Status of Employees Before Transfer.--The amendments made by
    title I and the abolishment of the Office of Federal Housing Enterprise
    Oversight under subsection (a) of this section may not be construed to
    affect the status of any employee of such Office as an employee of an
    agency of the United States for purposes of any other provision of law
    before the effective date of the transfer of any such employee under
    section 1303.
        (d) Use of Property and Services.--
                (1) Property.--The Director may use the property of the
            Office of Federal Housing Enterprise Oversight to perform
            functions which have been transferred to the Director for such
            time as is reasonable to facilitate the orderly transfer of
            functions transferred under any other provision of this Act or
            any amendment made by this Act to any other provision of law.
                (2) Agency services.--Any agency, department, or other
            instrumentality of the United States, and any successor to any
            such agency, department, or instrumentality, which was
            providing supporting services to the Office of Federal Housing
            Enterprise Oversight before the expiration of the period under
            subsection (a) in connection with functions that are
            transferred to the Director shall--
                        (A) continue to provide such services, on a
                    reimbursable basis, until the transfer of such
                    functions is complete; and
                        (B) consult with any such agency to coordinate and
                    facilitate a prompt and reasonable transition.
        (e) Continuation of Services.--The Director may use the services of
    employees and other personnel of the Office of Federal Housing
    Enterprise Oversight, on a reimbursable basis, to perform functions
    which have been transferred to the Director for such time as is
    reasonable to facilitate the orderly transfer of functions pursuant to
    any other provision of this Act or any amendment made by this Act to
    any other provision of law.
        (f) Savings Provisions.--
                (1) Existing rights, duties, and obligations not
            affected.--Subsection (a) shall not affect the validity of any
            right, duty, or obligation of the United States, the Director
            of the Office of Federal Housing Enterprise Oversight, or any
            other person, which--
                        (A) arises under--
                                (i) the Federal Housing Enterprises
                            Financial Safety and Soundness Act of 1992;
                                (ii) the Federal National Mortgage
                            Association Charter Act;
                                (iii) the Federal Home Loan Mortgage
                            Corporation Act; or
                                (iv) any other provision of law applicable
                            with respect to such Office; and
                        (B) existed on the day before the date of
                    abolishment under subsection (a).
                (2) Continuation of suits.--No action or other proceeding
            commenced by or against the Director of the Office of Federal
            Housing Enterprise Oversight in connection with functions that
            are transferred to the Director of the Federal Housing Finance
            Agency shall abate by reason of the enactment of this Act,
            except that the Director of the Federal Housing Finance Agency
            shall be substituted for the Director of the Office of Federal
            Housing Enterprise Oversight as a party to any such action or
            proceeding.

    SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

        (a) In General.--All regulations, orders, and determinations
    described in subsection (b) shall remain in effect according to the
    terms of such regulations, orders, and determinations, and shall be
    enforceable by or against the Director or the Secretary of Housing and
    Urban Development, as the case may be, until modified, terminated, set
    aside, or superseded in accordance with applicable law by the Director
    or the Secretary, as the case may be, any court of competent
    jurisdiction, or operation of law.
        (b) Applicability.--A regulation, order, or determination is
    described in this subsection if it--
                (1) was issued, made, prescribed, or allowed to become
            effective by--
                        (A) the Office of Federal Housing Enterprise
                    Oversight;
                        (B) the Secretary of Housing and Urban Development,
                    and relates to the authority of the Secretary under--
                                (i) the Federal Housing Enterprises
                            Financial Safety and Soundness Act of 1992;
                                (ii) the Federal National Mortgage
                            Association Charter Act, with respect to the
                            Federal National Mortgage Association; or
                                (iii) the Federal Home Loan Mortgage
                            Corporation Act, with respect to the Federal
                            Home Loan Mortgage Corporation; or
                        (C) a court of competent jurisdiction, and relates
                    to functions transferred by this Act; and
                (2) is in effect on the effective date of the abolishment
            under section 1301(a).

    SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

        (a) Transfer.--Each employee of the Office of Federal Housing
    Enterprise Oversight shall be transferred to the Agency for employment,
    not later than the effective date of the abolishment under section
    1301(a), and such transfer shall be deemed a transfer of function for
    purposes of section 3503 of title 5, United States Code.
        (b) Guaranteed Positions.--
                (1) In general.--Each employee transferred under subsection
            (a) shall be guaranteed a position with the same status,
            tenure, grade, and pay as that held on the day immediately
            preceding the transfer.
                (2) No involuntary separation or reduction.--An employee
            transferred under subsection (a) holding a permanent position
            on the day immediately preceding the transfer may not be
            involuntarily separated or reduced in grade or compensation
            during the 12-month period beginning on the date of transfer,
            except for cause, or, in the case of a temporary employee,
            separated in accordance with the terms of the appointment of
            the employee.
        (c) Appointment Authority for Excepted and Senior Executive Service
    Employees.--
                (1) In general.--In the case of an employee occupying a
            position in the excepted service or the Senior Executive
            Service, any appointment authority established under law or by
            regulations of the Office of Personnel Management for filling
            such position shall be transferred, subject to paragraph (2).
                (2) Decline of transfer.--The Director may decline a
            transfer of authority under paragraph (1) to the extent that
            such authority relates to--
                        (A) a position excepted from the competitive
                    service because of its confidential, policymaking,
                    policy-determining, or policy-advocating character; or
                        (B) a noncareer position in the Senior Executive
                    Service (within the meaning of section 3132(a)(7) of
                    title 5, United States Code).
        (d) Reorganization.--If the Director determines, after the end of
    the 1-year period beginning on the effective date of the abolishment
    under section 1301(a), that a reorganization of the combined workforce
    is required, that reorganization shall be deemed a major reorganization
    for purposes of affording affected employee retirement under section
    8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
        (e) Employee Benefit Programs.--
                (1) In general.--Any employee of the Office of Federal
            Housing Enterprise Oversight accepting employment with the
            Agency as a result of a transfer under subsection (a) may
            retain, for 12 months after the date on which such transfer
            occurs, membership in any employee benefit program of the
            Agency or the Office of Federal Housing Enterprise Oversight of
            the Department of Housing and Urban Development, as applicable,
            including insurance, to which such employee belongs on the date
            of the abolishment under section 1301(a), if--
                        (A) the employee does not elect to give up the
                    benefit or membership in the program; and
                        (B) the benefit or program is continued by the
                    Director of the Federal Housing Finance Agency.
                (2) Cost differential.--
                        (A) In general.--The difference in the costs
                    between the benefits which would have been provided by
                    the Office of Federal Housing Enterprise Oversight and
                    those provided by this section shall be paid by the
                    Director.
                        (B) Health insurance.--If any employee elects to
                    give up membership in a health insurance program or the
                    health insurance program is not continued by the
                    Director, the employee shall be permitted to select an
                    alternate Federal health insurance program not later
                    than 30 days after the date of such election or notice,
                    without regard to any other regularly scheduled open
                    season.

    SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.

        Upon the effective date of its abolishment under section 1301(a),
    all property of the Office of Federal Housing Enterprise Oversight
    shall transfer to the Agency.

                   Subtitle B--Federal Housing Finance Board

    SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

        (a) In General.--Effective at the end of the 1-year period
    beginning on the date of enactment of this Act, the Federal Housing
    Finance Board (in this subtitle referred to as the ``Board'') is
    abolished.
        (b) Disposition of Affairs.--During the 1-year period beginning on
    the date of enactment of this Act, the Board, solely for the purpose of
    winding up the affairs of the Board--
                (1) shall manage the employees of the Board and provide for
            the payment of the compensation and benefits of any such
            employee which accrue before the effective date of the transfer
            of such employee under section 1313; and
                (2) may take any other action necessary for the purpose of
            winding up the affairs of the Board.
        (c) Status of Employees Before Transfer.--The amendments made by
    titles I and II and the abolishment of the Board under subsection (a)
    may not be construed to affect the status of any employee of the Board
    as an employee of an agency of the United States for purposes of any
    other provision of law before the effective date of the transfer of any
    such employee under section 1313.
        (d) Use of Property and Services.--
                (1) Property.--The Director may use the property of the
            Board to perform functions which have been transferred to the
            Director, for such time as is reasonable to facilitate the
            orderly transfer of functions transferred under any other
            provision of this Act or any amendment made by this Act to any
            other provision of law.
                (2) Agency services.--Any agency, department, or other
            instrumentality of the United States, and any successor to any
            such agency, department, or instrumentality, which was
            providing supporting services to the Board before the
            expiration of the 1-year period under subsection (a) in
            connection with functions that are transferred to the Director
            shall--
                        (A) continue to provide such services, on a
                    reimbursable basis, until the transfer of such
                    functions is complete; and
                        (B) consult with any such agency to coordinate and
                    facilitate a prompt and reasonable transition.
        (e) Continuation of Services.--The Director may use the services of
    employees and other personnel of the Board, on a reimbursable basis, to
    perform functions which have been transferred to the Director for such
    time as is reasonable to facilitate the orderly transfer of functions
    pursuant to any other provision of this Act or any amendment made by
    this Act to any other provision of law.
        (f) Savings Provisions.--
                (1) Existing rights, duties, and obligations not
            affected.--Subsection (a) shall not affect the validity of any
            right, duty, or obligation of the United States, a member of
            the Board, or any other person, which--
                        (A) arises under the Federal Home Loan Bank Act, or
                    any other provision of law applicable with respect to
                    the Board; and
                        (B) existed on the day before the effective date of
                    the abolishment under subsection (a).
                (2) Continuation of suits.--No action or other proceeding
            commenced by or against the Board in connection with functions
            that are transferred under this Act to the Director shall abate
            by reason of the enactment of this Act, except that the
            Director shall be substituted for the Board or any member
            thereof as a party to any such action or proceeding.

    SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

        (a) In General.--All regulations, orders, determinations, and
    resolutions described under subsection (b) shall remain in effect
    according to the terms of such regulations, orders, determinations, and
    resolutions, and shall be enforceable by or against the Director until
    modified, terminated, set aside, or superseded in accordance with
    applicable law by the Director, any court of competent jurisdiction, or
    operation of law.
        (b) Applicability.--A regulation, order, determination, or
    resolution is described under this subsection if it--
                (1) was issued, made, prescribed, or allowed to become
            effective by--
                        (A) the Board; or
                        (B) a court of competent jurisdiction, and relates
                    to functions transferred by this Act; and
                (2) is in effect on the effective date of the abolishment
            under section 1311(a).

    SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING
                  FINANCE BOARD.

        (a) Transfer.--Each employee of the Board shall be transferred to
    the Agency for employment, not later than the effective date of the
    abolishment under section 1311(a), and such transfer shall be deemed a
    transfer of function for purposes of section 3503 of title 5, United
    States Code.
        (b) Guaranteed Positions.--
                (1) In general.--Each employee transferred under subsection
            (a) shall be guaranteed a position with the same status,
            tenure, grade, and pay as that held on the day immediately
            preceding the transfer.
                (2) No involuntary separation or reduction.--An employee
            holding a permanent position on the day immediately preceding
            the transfer may not be involuntarily separated or reduced in
            grade or compensation during the 12-month period beginning on
            the date of transfer, except for cause, or, if the employee is
            a temporary employee, separated in accordance with the terms of
            the appointment of the employee.
        (c) Appointment Authority for Excepted Employees.--
                (1) In general.--In the case of an employee occupying a
            position in the excepted service, any appointment authority
            established under law or by regulations of the Office of
            Personnel Management for filling such position shall be
            transferred, subject to paragraph (2).
                (2) Decline of transfer.--The Director may decline a
            transfer of authority under paragraph (1), to the extent that
            such authority relates to a position excepted from the
            competitive service because of its confidential, policymaking,
            policy-determining, or policy-advocating character.
        (d) Reorganization.--If the Director determines, after the end of
    the 1-year period beginning on the effective date of the abolishment
    under section 1311(a), that a reorganization of the combined workforce
    is required, that reorganization shall be deemed a major reorganization
    for purposes of affording affected employee retirement under section
    8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
        (e) Employee Benefit Programs.--
                (1) In general.--Any employee of the Board accepting
            employment with the Agency as a result of a transfer under
            subsection (a) may retain, for 12 months after the date on
            which such transfer occurs, membership in any employee benefit
            program of the Agency or the Board, as applicable, including
            insurance, to which such employee belongs on the effective date
            of the abolishment under section 1311(a) if--
                        (A) the employee does not elect to give up the
                    benefit or membership in the program; and
                        (B) the benefit or program is continued by the
                    Director.
                (2) Cost differential.--
                        (A) In general.--The difference in the costs
                    between the benefits which would have been provided by
                    the Board and those provided by this section shall be
                    paid by the Director.
                        (B) Health insurance.--If any employee elects to
                    give up membership in a health insurance program or the
                    health insurance program is not continued by the
                    Director, the employee shall be permitted to select an
                    alternate Federal health insurance program not later
                    than 30 days after the date of such election or notice,
                    without regard to any other regularly scheduled open
                    season.

    SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.

        Upon the effective date of the abolishment under section 1311(a),
    all property of the Board shall transfer to the Agency.

                         TITLE IV--HOPE FOR HOMEOWNERS

    SEC. 1401. SHORT TITLE.

        This title may be cited as the ``HOPE for Homeowners Act of 2008''.

    SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.

        (a) Establishment.--Title II of the National Housing Act (12 U.S.C.
    1707 et seq.) is amended by adding at the end the following:

    ``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.

        ``(a) Establishment.--There is established in the Federal Housing
    Administration a HOPE for Homeowners Program.
        ``(b) Purpose.--The purpose of the HOPE for Homeowners Program is--
                ``(1) to create an FHA program, participation in which is
            voluntary on the part of homeowners and existing loan holders
            to insure refinanced loans for distressed borrowers to support
            long-term, sustainable homeownership;
                ``(2) to allow homeowners to avoid foreclosure by reducing
            the principle balance outstanding, and interest rate charged,
            on their mortgages;
                ``(3) to help stabilize and provide confidence in mortgage
            markets by bringing transparency to the value of assets based
            on mortgage assets;
                ``(4) to target mortgage assistance under this section to
            homeowners for their principal residence;
                ``(5) to enhance the administrative capacity of the FHA to
            carry out its expanded role under the HOPE for Homeowners
            Program;
                ``(6) to ensure the HOPE for Homeowners Program remains in
            effect only for as long as is necessary to provide stability to
            the housing market; and
                ``(7) to provide servicers of delinquent mortgages with
            additional methods and approaches to avoid foreclosure.
        ``(c) Establishment and Implementation of Program Requirements.--
                ``(1) Duties of the board.--In order to carry out the
            purposes of the HOPE for Homeowners Program, the Board shall--
                        ``(A) establish requirements and standards for the
                    program; and
                        ``(B) prescribe such regulations and provide such
                    guidance as may be necessary or appropriate to
                    implement such requirements and standards.
                ``(2) Duties of the secretary.--In carrying out any of the
            program requirements or standards established under paragraph
            (1), the Secretary may issue such interim guidance and
            mortgagee letters as the Secretary determines necessary or
            appropriate.
        ``(d) Insurance of Mortgages.--The Secretary is authorized upon
    application of a mortgagee to make commitments to insure or to insure
    any eligible mortgage that has been refinanced in a manner meeting the
    requirements under subsection (e).
        ``(e) Requirements of Insured Mortgages.--To be eligible for
    insurance under this section, a refinanced eligible mortgage shall
    comply with all of the following requirements:
                ``(1) Lack of capacity to pay existing mortgage.--
                        ``(A) Borrower certification.--
                                ``(i) In general.--The mortgagor shall
                            provide certification to the Secretary that the
                            mortgagor has not intentionally defaulted on
                            the mortgage or any other debt, and has not
                            knowingly, or willfully and with actual
                            knowledge, furnished material information known
                            to be false for the purpose of obtaining any
                            eligible mortgage.
                                ``(ii) Penalties.--
                                        ``(I) False statement.--Any
                                    certification filed pursuant to clause
                                    (i) shall contain an acknowledgment
                                    that any willful false statement made
                                    in such certification is punishable
                                    under section 1001, of title 18, United
                                    States Code, by fine or imprisonment of
                                    not more than 5 years, or both.
                                        ``(II) Liability for repayment.--
                                    The mortgagor shall agree in writing
                                    that the mortgagor shall be liable to
                                    repay to the Federal Housing
                                    Administration any direct financial
                                    benefit achieved from the reduction of
                                    indebtedness on the existing mortgage
                                    or mortgages on the residence
                                    refinanced under this section derived
                                    from misrepresentations made in the
                                    certifications and documentation
                                    required under this subparagraph,
                                    subject to the discretion of the
                                    Secretary.
                        ``(B) Current borrower debt-to-income ratio.--As of
                    March 1, 2008, the mortgagor shall have had a ratio of
                    mortgage debt to income, taking into consideration all
                    existing mortgages of that mortgagor at such time,
                    greater than 31 percent (or such higher amount as the
                    Board determines appropriate).
                ``(2) Determination of principal obligation amount.--The
            principal obligation amount of the refinanced eligible mortgage
            to be insured shall--
                        ``(A) be determined by the reasonable ability of
                    the mortgagor to make his or her mortgage payments, as
                    such ability is determined by the Secretary pursuant to
                    section 203(b)(4) or by any other underwriting
                    standards established by the Board; and
                        ``(B) not exceed 90 percent of the appraised value
                    of the property to which such mortgage relates.
                ``(3) Required waiver of prepayment penalties and fees.--
            All penalties for prepayment or refinancing of the eligible
            mortgage, and all fees and penalties related to default or
            delinquency on the eligible mortgage, shall be waived or
            forgiven.
                ``(4) Extinguishment of subordinate liens.--
                        ``(A) Required agreement.--All holders of
                    outstanding mortgage liens on the property to which the
                    eligible mortgage relates shall agree to accept the
                    proceeds of the insured loan as payment in full of all
                    indebtedness under the eligible mortgage, and all
                    encumbrances related to such eligible mortgage shall be
                    removed. The Secretary may take such actions, subject
                    to standards established by the Board under
                    subparagraph (B), as may be necessary and appropriate
                    to facilitate coordination and agreement between the
                    holders of the existing senior mortgage and any
                    existing subordinate mortgages, taking into
                    consideration the subordinate lien status of such
                    subordinate mortgages.
                        ``(B) Shared appreciation.--
                                ``(i) In general.--The Board shall
                            establish standards and policies that will
                            allow for the payment to the holder of any
                            existing subordinate mortgage of a portion of
                            any future appreciation in the property secured
                            by such eligible mortgage that is owed to the
                            Secretary pursuant to subsection (k).
                                ``(ii) Factors.--In establishing the
                            standards and policies required under clause
                            (i), the Board shall take into consideration--
                                        ``(I) the status of any subordinate
                                    mortgage;
                                        ``(II) the outstanding principal
                                    balance of and accrued interest on the
                                    existing senior mortgage and any
                                    outstanding subordinate mortgages;
                                        ``(III) the extent to which the
                                    current appraised value of the property
                                    securing a subordinate mortgage is less
                                    than the outstanding principal balance
                                    and accrued interest on any other liens
                                    that are senior to such subordinate
                                    mortgage; and
                                        ``(IV) such other factors as the
                                    Board determines to be appropriate.
                        ``(C) Voluntary program.--This paragraph may not be
                    construed to require any holder of any existing
                    mortgage to participate in the program under this
                    section generally, or with respect to any particular
                    loan.
                ``(5) Term of mortgage.--The refinanced eligible mortgage
            to be insured shall--
                        ``(A) bear interest at a single rate that is fixed
                    for the entire term of the mortgage; and
                        ``(B) have a maturity of not less than 30 years
                    from the date of the beginning of amortization of such
                    refinanced eligible mortgage.
                ``(6) Maximum loan amount.--The principal obligation amount
            of the eligible mortgage to be insured shall not exceed 132
            percent of the dollar amount limitation in effect for 2007
            under section 305(a)(2) of the Federal Home Loan Mortgage
            Corporation Act (12 U.S.C. 1454(a)(2)) for a property of the
            applicable size.
                ``(7) Prohibition on second liens.--A mortgagor may not
            grant a new second lien on the mortgaged property during the
            first 5 years of the term of the mortgage insured under this
            section, except as the Board determines to be necessary to
            ensure the maintenance of property standards; and provided that
            such new outstanding liens (A) do not reduce the value of the
            Government's equity in the borrower's home; and (B) when
            combined with the mortgagor's existing mortgage indebtedness,
            do not exceed 95 percent of the home's appraised value at the
            time of the new second lien.
                ``(8) Appraisals.--Any appraisal conducted in connection
            with a mortgage insured under this section shall--
                        ``(A) be based on the current value of the
                    property;
                        ``(B) be conducted in accordance with title XI of
                    the Financial Institutions Reform, Recovery, and
                    Enforcement Act of 1989 (12 U.S.C. 3331 et seq.);
                        ``(C) be completed by an appraiser who meets the
                    competency requirements of the Uniform Standards of
                    Professional Appraisal Practice;
                        ``(D) be wholly consistent with the appraisal
                    standards, practices, and procedures under section
                    202(e) of this Act that apply to all loans insured
                    under this Act; and
                        ``(E) comply with the requirements of subsection
                    (g) of this section (relating to appraisal
                    independence).
                ``(9) Documentation and verification of income.--In
            complying with the FHA underwriting requirements under the HOPE
            for Homeowners Program under this section, the mortgagee shall
            document and verify the income of the mortgagor or non-filing
            status by procuring (A) an income tax return transcript of the
            income tax returns of the mortgagor, or(B) a copy of the income
            tax returns from the Internal Revenue Service, for the two most
            recent years for which the filing deadline for such years has
            passed and by any other method, in accordance with procedures
            and standards that the Board shall establish.
                ``(10) Mortgage fraud.--The mortgagor shall not have been
            convicted under Federal or State law for fraud during the 10-
            year period ending upon the insurance of the mortgage under
            this section.
                ``(11) Primary residence.--The mortgagor shall provide
            documentation satisfactory in the determination of the
            Secretary to prove that the residence covered by the mortgage
            to be insured under this section is occupied by the mortgagor
            as the primary residence of the mortgagor, and that such
            residence is the only residence in which the mortgagor has any
            present ownership interest.
        ``(f) Study of Auction or Bulk Refinance Program.--
                ``(1) Study.--The Board shall conduct a study of the need
            for and efficacy of an auction or bulk refinancing mechanism to
            facilitate refinancing of existing residential mortgages that
            are at risk for foreclosure into mortgages insured under this
            section. The study shall identify and examine various options
            for mechanisms under which lenders and servicers of such
            mortgages may make bids for forward commitments for such
            insurance in an expedited manner.
                ``(2) Content.--
                        ``(A) Analysis.--The study required under paragraph
                    (1) shall analyze--
                                ``(i) the feasibility of establishing a
                            mechanism that would facilitate the more rapid
                            refinancing of borrowers at risk of foreclosure
                            into performing mortgages insured under this
                            section;
                                ``(ii) whether such a mechanism would
                            provide an effective and efficient mechanism to
                            reduce foreclosures on qualified existing
                            mortgages;
                                ``(iii) whether the use of an auction or
                            bulk refinance program is necessary to
                            stabilize the housing market and reduce the
                            impact of turmoil in that market on the economy
                            of the United States;
                                ``(iv) whether there are other mechanisms
                            or authority that would be useful to reduce
                            foreclosure; and
                                ``(v) and any other factors that the Board
                            considers relevant.
                        ``(B) Determinations.--To the extent that the Board
                    finds that a facility of the type described in
                    subparagraph (A) is feasible and useful, the study
                    shall--
                                ``(i) determine and identify any additional
                            authority or resources needed to establish and
                            operate such a mechanism;
                                ``(ii) determine whether there is a need
                            for additional authority with respect to the
                            loan underwriting criteria established in this
                            section or with respect to eligibility of
                            participating borrowers, lenders, or holders of
                            liens;
                                ``(iii) determine whether such underwriting
                            criteria should be established on the basis of
                            individual loans, in the aggregate, or
                            otherwise to facilitate the goal of refinancing
                            borrowers at risk of foreclosure into viable
                            loans insured under this section.
                ``(3) Report.--Not later than the expiration of the 60-day
            period beginning on the date of the enactment of this section,
            the Board shall submit a report regarding the results of the
            study conducted under this subsection to the Committee on
            Financial Services of the House of Representatives and the
            Committee on Banking, Housing, and Urban Affairs of the Senate.
            The report shall include a detailed description of the analysis
            required under paragraph (2)(A) and of the determinations made
            pursuant to paragraph (2)(B), and shall include any other
            findings and recommendations of the Board pursuant to the
            study, including identifying various options for mechanisms
            described in paragraph (1).
        ``(g) Appraisal Independence.--
                ``(1) Prohibitions on interested parties in a real estate
            transaction.--No mortgage lender, mortgage broker, mortgage
            banker, real estate broker, appraisal management company,
            employee of an appraisal management company, nor any other
            person with an interest in a real estate transaction involving
            an appraisal in connection with a mortgage insured under this
            section shall improperly influence, or attempt to improperly
            influence, through coercion, extortion, collusion,
            compensation, instruction, inducement, intimidation, nonpayment
            for services rendered, or bribery, the development, reporting,
            result, or review of a real estate appraisal sought in
            connection with the mortgage.
                ``(2) Civil monetary penalties.--The Secretary may impose a
            civil money penalty for any knowing and material violation of
            paragraph (1) under the same terms and conditions as are
            authorized in section 536(a) of this Act.
        ``(h) Standards To Protect Against Adverse Selection.--
                ``(1) In general.--The Board shall, by rule or order,
            establish standards and policies to require the underwriter of
            the insured loan to provide such representations and warranties
            as the Board considers necessary or appropriate to enforce
            compliance with all underwriting and appraisal standards of the
            HOPE for Homeowners Program.
                ``(2) Exclusion for violations.--The Board shall prohibit
            the Secretary from paying insurance benefits to a mortgagee who
            violates the representations and warranties, as established
            under paragraph (1), or in any case in which a mortgagor fails
            to make the first payment on a refinanced eligible mortgage.
                ``(3) Other authority.--The Board may establish such other
            standards or policies as necessary to protect against adverse
            selection, including requiring loans identified by the
            Secretary as higher risk loans to demonstrate payment
            performance for a reasonable period of time prior to being
            insured under the program.
        ``(i) Premiums.--For each refinanced eligible mortgage insured
    under this section, the Secretary shall establish and collect--
                ``(1) at the time of insurance, a single premium payment in
            an amount equal to 3 percent of the amount of the original
            insured principal obligation of the refinanced eligible
            mortgage, which shall be paid from the proceeds of the mortgage
            being insured under this section, through the reduction of the
            amount of indebtedness that existed on the eligible mortgage
            prior to refinancing; and
                ``(2) in addition to the premium required under paragraph
            (1), an annual premium in an amount equal to 1.5 percent of the
            amount of the remaining insured principal balance of the
            mortgage.
        ``(j) Origination Fees and Interest Rate.--The Board shall
    establish--
                ``(1) a reasonable limitation on origination fees for
            refinanced eligible mortgages insured under this section; and
                ``(2) procedures to ensure that interest rates on such
            mortgages shall be commensurate with market rate interest rates
            on such types of loans.
        ``(k) Equity and Appreciation.--
                ``(1) Five-year phase-in for equity as a result of sale or
            refinancing.--For each eligible mortgage insured under this
            section, the Secretary and the mortgagor of such mortgage
            shall, upon any sale or disposition of the property to which
            such mortgage relates, or upon the subsequent refinancing of
            such mortgage, be entitled to the following with respect to any
            equity created as a direct result of such sale or refinancing:
                        ``(A) If such sale or refinancing occurs during the
                    period that begins on the date that such mortgage is
                    insured and ends 1 year after such date of insurance,
                    the Secretary shall be entitled to 100 percent of such
                    equity.
                        ``(B) If such sale or refinancing occurs during the
                    period that begins 1 year after such date of insurance
                    and ends 2 years after such date of insurance, the
                    Secretary shall be entitled to 90 percent of such
                    equity and the mortgagor shall be entitled to 10
                    percent of such equity.
                        ``(C) If such sale or refinancing occurs during the
                    period that begins 2 years after such date of insurance
                    and ends 3 years after such date of insurance, the
                    Secretary shall be entitled to 80 percent of such
                    equity and the mortgagor shall be entitled to 20
                    percent of such equity.
                        ``(D) If such sale or refinancing occurs during the
                    period that begins 3 years after such date of insurance
                    and ends 4 years after such date of insurance, the
                    Secretary shall be entitled to 70 percent of such
                    equity and the mortgagor shall be entitled to 30
                    percent of such equity.
                        ``(E) If such sale or refinancing occurs during the
                    period that begins 4 years after such date of insurance
                    and ends 5 years after such date of insurance, the
                    Secretary shall be entitled to 60 percent of such
                    equity and the mortgagor shall be entitled to 40
                    percent of such equity.
                        ``(F) If such sale or refinancing occurs during any
                    period that begins 5 years after such date of
                    insurance, the Secretary shall be entitled to 50
                    percent of such equity and the mortgagor shall be
                    entitled to 50 percent of such equity.
                ``(2) Appreciation in value.--For each eligible mortgage
            insured under this section, the Secretary and the mortgagor of
            such mortgage shall, upon any sale or disposition of the
            property to which such mortgage relates, each be entitled to 50
            percent of any appreciation in value of the appraised value of
            such property that has occurred since the date that such
            mortgage was insured under this section.
        ``(l) Establishment of HOPE Fund.--
                ``(1) In general.--There is established in the Federal
            Housing Administration a revolving fund to be known as the Home
            Ownership Preservation Entity Fund, which shall be used by the
            Board for carrying out the mortgage insurance obligations under
            this section.
                ``(2) Management of fund.--The HOPE Fund shall be
            administered and managed by the Secretary, who shall establish
            reasonable and prudent criteria for the management and
            operation of any amounts in the HOPE Fund.
        ``(m) Limitation on Aggregate Insurance Authority.--The aggregate
    original principal obligation of all mortgages insured under this
    section may not exceed $300,000,000,000.
        ``(n) Reports by the Board.--The Board shall submit monthly reports
    to the Congress identifying the progress of the HOPE for Homeowners
    Program, which shall contain the following information for each month:
                ``(1) The number of new mortgages insured under this
            section, including the location of the properties subject to
            such mortgages by census tract.
                ``(2) The aggregate principal obligation of new mortgages
            insured under this section.
                ``(3) The average amount by which the principle balance
            outstanding on mortgages insured this section was reduced.
                ``(4) The amount of premiums collected for insurance of
            mortgages under this section.
                ``(5) The claim and loss rates for mortgages insured under
            this section.
                ``(6) Any other information that the Board considers
            appropriate.
        ``(o) Required Outreach Efforts.--The Secretary shall carry out
    outreach efforts to ensure that homeowners, lenders, and the general
    public are aware of the opportunities for assistance available under
    this section.
        ``(p) Enhancement of FHA Capacity.--Under the direction of the
    Board, the Secretary shall take such actions as may be necessary to--
                ``(1) contract for the establishment of underwriting
            criteria, automated underwriting systems, pricing standards,
            and other factors relating to eligibility for mortgages insured
            under this section;
                ``(2) contract for independent quality reviews of
            underwriting, including appraisal reviews and fraud detection,
            of mortgages insured under this section or pools of such
            mortgages; and
                ``(3) increase personnel of the Department as necessary to
            process or monitor the processing of mortgages insured under
            this section.
        ``(q) GNMA Commitment Authority.--
                ``(1) Guarantees.--The Secretary shall take such actions as
            may be necessary to ensure that securities based on and backed
            by a trust or pool composed of mortgages insured under this
            section are available to be guaranteed by the Government
            National Mortgage Association as to the timely payment of
            principal and interest.
                ``(2) Guarantee authority.--To carry out the purposes of
            section 306 of the National Housing Act (12 U.S.C. 1721), the
            Government National Mortgage Association may enter into new
            commitments to issue guarantees of securities based on or
            backed by mortgages insured under this section, not exceeding
            $300,000,000,000. The amount of authority provided under the
            preceding sentence to enter into new commitments to issue
            guarantees is in addition to any amount of authority to make
            new commitments to issue guarantees that is provided to the
            Association under any other provision of law.
        ``(r) Sunset.--The Secretary may not enter into any new commitment
    to insure any refinanced eligible mortgage, or newly insure any
    refinanced eligible mortgage pursuant to this section before October 1,
    2008 or after September 30, 2011.
        ``(s) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Approved financial institution or mortgagee.--The
            term `approved financial institution or mortgagee' means a
            financial institution or mortgagee approved by the Secretary
            under section 203 as responsible and able to service mortgages
            responsibly.
                ``(2) Board.--The term `Board' means the Board of Directors
            of the HOPE for Homeowners Program. The Board shall be composed
            of the Secretary, the Secretary of the Treasury, the
            Chairperson of the Board of Governors of the Federal Reserve
            System, and the Chairperson of the Board of Directors of the
            Federal Deposit Insurance Corporation, or their designees.
                ``(3) Eligible mortgage.--The term `eligible mortgage'
            means a mortgage--
                        ``(A) the mortgagor of which--
                                ``(i) occupies such property as his or her
                            principal residence; and
                                ``(ii) cannot, subject to subsection
                            (e)(1)(B) and such other standards established
                            by the Board, afford his or her mortgage
                            payments; and
                        ``(B) originated on or before January 1, 2008.
                ``(4) Existing senior mortgage.--The term `existing senior
            mortgage' means, with respect to a mortgage insured under this
            section, the existing mortgage that has superior priority.
                ``(5) Existing subordinate mortgage.--The term `existing
            subordinate mortgage' means, with respect to a mortgage insured
            under this section, an existing mortgage that has subordinate
            priority to the existing senior mortgage.
                ``(6) HOPE for homeowners program.--The term `HOPE for
            Homeowners Program' means the program established under this
            section.
                ``(7) Secretary.--The term `Secretary' means the Secretary
            of Housing and Urban Development, except where specifically
            provided otherwise.
        ``(t) Requirements Related to the Board.--
                ``(1) Compensation, actual, necessary, and transportation
            expenses.--
                        ``(A) Federal employees.--A member of the Board who
                    is an officer or employee of the Federal Government
                    shall serve without additional pay (or benefits in the
                    nature of compensation) for service as a member of the
                    Board.
                        ``(B) Travel expenses.--Members of the Board shall
                    be entitled to receive travel expenses, including per
                    diem in lieu of subsistence, equivalent to those set
                    forth in subchapter I of chapter 57 of title 5, United
                    States Code.
                ``(2) Bylaws.--The Board may prescribe, amend, and repeal
            such bylaws as may be necessary for carrying out the functions
            of the Board.
                ``(3) Quorum.--A majority of the Board shall constitute a
            quorum.
                ``(4) Staff; experts and consultants.--
                        ``(A) Detail of government employees.--Upon request
                    of the Board, any Federal Government employee may be
                    detailed to the Board without reimbursement, and such
                    detail shall be without interruption or loss of civil
                    service status or privilege.
                        ``(B) Experts and consultants.--The Board shall
                    procure the services of experts and consultants as the
                    Board considers appropriate.
        ``(u) Rule of Construction Related to Voluntary Nature of the
    Program.--This section shall not be construed to require that any
    approved financial institution or mortgagee participate in any activity
    authorized under this section, including any activity related to the
    refinancing of an eligible mortgage.
        ``(v) Rule of Construction Related to Insurance of Mortgages.--
    Except as otherwise provided for in this section or by action of the
    Board, the provisions and requirements of section 203(b) shall apply
    with respect to the insurance of any eligible mortgage under this
    section.
        ``(w) HOPE Bonds.--
                ``(1) Issuance and repayment of bonds.--Notwithstanding
            section 504(b) of the Federal Credit Reform Act of 1990 (2
            U.S.C. 661d(b)), the Secretary of the Treasury shall--
                        ``(A) subject to such terms and conditions as the
                    Secretary of the Treasury deems necessary, issue
                    Federal credit instruments, to be known as `HOPE
                    Bonds', that are callable at the discretion of the
                    Secretary of the Treasury and do not, in the aggregate,
                    exceed the amount specified in subsection (m);
                        ``(B) provide the subsidy amounts necessary for
                    loan guarantees under the HOPE for Homeowners Program,
                    not to exceed the amount specified in subsection (m),
                    in accordance with the provisions of the Federal Credit
                    Reform Act of 1990 (2 U.S.C. 661 et seq.), except as
                    provided in this paragraph; and
                        ``(C) use the proceeds from HOPE Bonds only to pay
                    for the net costs to the Federal Government of the HOPE
                    for Homeowners Program, including administrative costs.
                ``(2) Reimbursements to treasury.--Funds received pursuant
            to section 1338(b) of the Federal Housing Enterprises
            Regulatory Reform Act of 1992 shall be used to reimburse the
            Secretary of the Treasury for amounts borrowed under paragraph
            (1).
                ``(3) Use of reserve fund.--If the net cost to the Federal
            Government for the HOPE for Homeowners Program exceeds the
            amount of funds received under paragraph (2), remaining debts
            of the HOPE for Homeowners Program shall be paid from amounts
            deposited into the fund established by the Secretary under
            section 1337(e) of the Federal Housing Enterprises Financial
            Safety and Soundness Act of 1992, remaining amounts in such
            fund to be used to reduce the National debt.
                ``(4) Reduction of national debt.--Amounts collected under
            the HOPE for Homeowners Program in accordance with subsections
            (i) and (k) in excess of the net cost to the Federal Government
            for such Program shall be used to reduce the National debt.''.

    SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL MORTGAGE
                  LOANS.

        The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by
    inserting after section 129 the following new section:

    ``SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL
                  MORTGAGES.

        ``(a) In General.--Except as may be established in any investment
    contract between a servicer of pooled residential mortgages and an
    investor, a servicer of pooled residential mortgages--
                ``(1) owes any duty to maximize the net present value of
            the pooled mortgages in an investment to all investors and
            parties having a direct or indirect interest in such
            investment, not to any individual party or group of parties;
            and
                ``(2) shall be deemed to act in the best interests of all
            such investors and parties if the servicer agrees to or
            implements a modification or workout plan, including any
            modification or refinancing undertaken pursuant to the HOPE for
            Homeowners Act of 2008, for a residential mortgage or a class
            of residential mortgages that constitute a part or all of the
            pooled mortgages in such investment, provided that any mortgage
            so modified meets the following criteria:
                        ``(A) Default on the payment of such mortgage has
                    occurred or is reasonably foreseeable.
                        ``(B) The property securing such mortgage is
                    occupied by the mortgagor of such mortgage.
                        ``(C) The anticipated recovery on the principal
                    outstanding obligation of the mortgage under the
                    modification or workout plan exceeds, on a net present
                    value basis, the anticipated recovery on the principal
                    outstanding obligation of the mortgage through
                    foreclosure.
        ``(b) Definition.--As used in this section, the term `servicer'
    means the person responsible for servicing of a loan (including the
    person who makes or holds a loan if such person also services the
    loan).''.

    SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.

        Section 202(e) of the National Housing Act (12 U.S.C. 1708(e)) is
    amended by adding at the end the following:
                ``(5) Additional appraiser standards.--Beginning on the
            date of enactment of the Federal Housing Finance Regulatory
            Reform Act of 2008, any appraiser chosen or approved to conduct
            appraisals for mortgages under this title shall--
                        ``(A) be certified--
                                ``(i) by the State in which the property to
                            be appraised is located; or
                                ``(ii) by a nationally recognized
                            professional appraisal organization; and
                        ``(B) have demonstrated verifiable education in the
                    appraisal requirements established by the Federal
                    Housing Administration under this subsection.''.

                    TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

    SEC. 1501. SHORT TITLE.

        This title may be cited as the ``Secure and Fair Enforcement for
    Mortgage Licensing Act of 2008'' or ``S.A.F.E. Mortgage Licensing Act
    of 2008''.

    SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE LICENSING
                  SYSTEM AND REGISTRY.

        In order to increase uniformity, reduce regulatory burden, enhance
    consumer protection, and reduce fraud, the States, through the
    Conference of State Bank Supervisors and the American Association of
    Residential Mortgage Regulators, are hereby encouraged to establish a
    Nationwide Mortgage Licensing System and Registry for the residential
    mortgage industry that accomplishes all of the following objectives:
                (1) Provides uniform license applications and reporting
            requirements for State-licensed loan originators.
                (2) Provides a comprehensive licensing and supervisory
            database.
                (3) Aggregates and improves the flow of information to and
            between regulators.
                (4) Provides increased accountability and tracking of loan
            originators.
                (5) Streamlines the licensing process and reduces the
            regulatory burden.
                (6) Enhances consumer protections and supports anti-fraud
            measures.
                (7) Provides consumers with easily accessible information,
            offered at no charge, utilizing electronic media, including the
            Internet, regarding the employment history of, and publicly
            adjudicated disciplinary and enforcement actions against, loan
            originators.
                (8) Establishes a means by which residential mortgage loan
            originators would, to the greatest extent possible, be required
            to act in the best interests of the consumer.
                (9) Facilitates responsible behavior in the subprime
            mortgage market place and provides comprehensive training and
            examination requirements related to subprime mortgage lending.
                (10) Facilitates the collection and disbursement of
            consumer complaints on behalf of State and Federal mortgage
            regulators.

    SEC. 1503. DEFINITIONS.

        For purposes of this title, the following definitions shall apply:
                (1) Federal banking agencies.--The term ``Federal banking
            agencies'' means the Board of Governors of the Federal Reserve
            System, the Comptroller of the Currency, the Director of the
            Office of Thrift Supervision, the National Credit Union
            Administration, and the Federal Deposit Insurance Corporation.
                (2) Depository institution.--The term ``depository
            institution'' has the same meaning as in section 3 of the
            Federal Deposit Insurance Act, and includes any credit union.
                (3) Loan originator.--
                        (A) In general.--The term ``loan originator''--
                                (i) means an individual who--
                                        (I) takes a residential mortgage
                                    loan application; and
                                        (II) offers or negotiates terms of
                                    a residential mortgage loan for
                                    compensation or gain;
                                (ii) does not include any individual who is
                            not otherwise described in clause (i) and who
                            performs purely administrative or clerical
                            tasks on behalf of a person who is described in
                            any such clause;
                                (iii) does not include a person or entity
                            that only performs real estate brokerage
                            activities and is licensed or registered in
                            accordance with applicable State law, unless
                            the person or entity is compensated by a
                            lender, a mortgage broker, or other loan
                            originator or by any agent of such lender,
                            mortgage broker, or other loan originator; and
                                (iv) does not include a person or entity
                            solely involved in extensions of credit
                            relating to timeshare plans, as that term is
                            defined in section 101(53D) of title 11, United
                            States Code.
                        (B) Other definitions relating to loan
                    originator.--For purposes of this subsection, an
                    individual ``assists a consumer in obtaining or
                    applying to obtain a residential mortgage loan'' by,
                    among other things, advising on loan terms (including
                    rates, fees, other costs), preparing loan packages, or
                    collecting information on behalf of the consumer with
                    regard to a residential mortgage loan.
                        (C) Administrative or clerical tasks.--The term
                    ``administrative or clerical tasks'' means the receipt,
                    collection, and distribution of information common for
                    the processing or underwriting of a loan in the
                    mortgage industry and communication with a consumer to
                    obtain information necessary for the processing or
                    underwriting of a residential mortgage loan.
                        (D) Real estate brokerage activity defined.--The
                    term ``real estate brokerage activity'' means any
                    activity that involves offering or providing real
                    estate brokerage services to the public, including--
                                (i) acting as a real estate agent or real
                            estate broker for a buyer, seller, lessor, or
                            lessee of real property;
                                (ii) bringing together parties interested
                            in the sale, purchase, lease, rental, or
                            exchange of real property;
                                (iii) negotiating, on behalf of any party,
                            any portion of a contract relating to the sale,
                            purchase, lease, rental, or exchange of real
                            property (other than in connection with
                            providing financing with respect to any such
                            transaction);
                                (iv) engaging in any activity for which a
                            person engaged in the activity is required to
                            be registered or licensed as a real estate
                            agent or real estate broker under any
                            applicable law; and
                                (v) offering to engage in any activity, or
                            act in any capacity, described in clause (i),
                            (ii), (iii), or (iv).
                (4) Loan processor or underwriter.--
                        (A) In general.--The term ``loan processor or
                    underwriter'' means an individual who performs clerical
                    or support duties at the direction of and subject to
                    the supervision and instruction of--
                                (i) a State-licensed loan originator; or
                                (ii) a registered loan originator.
                        (B) Clerical or support duties.--For purposes of
                    subparagraph (A), the term ``clerical or support
                    duties'' may include--
                                (i) the receipt, collection, distribution,
                            and analysis of information common for the
                            processing or underwriting of a residential
                            mortgage loan; and
                                (ii) communicating with a consumer to
                            obtain the information necessary for the
                            processing or underwriting of a loan, to the
                            extent that such communication does not include
                            offering or negotiating loan rates or terms, or
                            counseling consumers about residential mortgage
                            loan rates or terms.
                (5) Nationwide mortgage licensing system and registry.--The
            term ``Nationwide Mortgage Licensing System and Registry''
            means a mortgage licensing system developed and maintained by
            the Conference of State Bank Supervisors and the American
            Association of Residential Mortgage Regulators for the State
            licensing and registration of State-licensed loan originators
            and the registration of registered loan originators or any
            system established by the Secretary under section 1509.
                (6) Nontraditional mortgage product.--The term
            ``nontraditional mortgage product'' means any mortgage product
            other than a 30-year fixed rate mortgage.
                (7) Registered loan originator.--The term ``registered loan
            originator'' means any individual who--
                        (A) meets the definition of loan originator and is
                    an employee of--
                                (i) a depository institution;
                                (ii) a subsidiary that is--
                                        (I) owned and controlled by a
                                    depository institution; and
                                        (II) regulated by a Federal banking
                                    agency; or
                                (iii) an institution regulated by the Farm
                            Credit Administration; and
                        (B) is registered with, and maintains a unique
                    identifier through, the Nationwide Mortgage Licensing
                    System and Registry.
                (8) Residential mortgage loan.--The term ``residential
            mortgage loan'' means any loan primarily for personal, family,
            or household use that is secured by a mortgage, deed of trust,
            or other equivalent consensual security interest on a dwelling
            (as defined in section 103(v) of the Truth in Lending Act) or
            residential real estate upon which is constructed or intended
            to be constructed a dwelling (as so defined).
                (9) Secretary.--The term ``Secretary'' means the Secretary
            of Housing and Urban Development.
                (10) State.--The term ``State'' means any State of the
            United States, the District of Columbia, any territory of the
            United States, Puerto Rico, Guam, American Samoa, the Trust
            Territory of the Pacific Islands, the Virgin Islands, and the
            Northern Mariana Islands.
                (11) State-licensed loan originator.--The term ``State-
            licensed loan originator'' means any individual who--
                        (A) is a loan originator;
                        (B) is not an employee of--
                                (i) a depository institution;
                                (ii) a subsidiary that is--
                                        (I) owned and controlled by a
                                    depository institution; and
                                        (II) regulated by a Federal banking
                                    agency; or
                                (iii) an institution regulated by the Farm
                            Credit Administration; and
                        (C) is licensed by a State or by the Secretary
                    under section 1508 and registered as a loan originator
                    with, and maintains a unique identifier through, the
                    Nationwide Mortgage Licensing System and Registry.
                (12) Unique identifier.--
                        (A) In general.--The term ``unique identifier''
                    means a number or other identifier that--
                                (i) permanently identifies a loan
                            originator;
                                (ii) is assigned by protocols established
                            by the Nationwide Mortgage Licensing System and
                            Registry and the Federal banking agencies to
                            facilitate electronic tracking of loan
                            originators and uniform identification of, and
                            public access to, the employment history of and
                            the publicly adjudicated disciplinary and
                            enforcement actions against loan originators;
                            and
                                (iii) shall not be used for purposes other
                            than those set forth under this title.
                        (B) Responsibility of states.--To the greatest
                    extent possible and to accomplish the purpose of this
                    title, States shall use unique identifiers in lieu of
                    social security numbers.

    SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

        (a) In General.--Subject to the existence of a licensing or
    registration regime, as the case may be, an individual may not engage
    in the business of a loan originator without first--
                (1) obtaining, and maintaining annually--
                        (A) a registration as a registered loan originator;
                    or
                        (B) a license and registration as a State-licensed
                    loan originator; and
                (2) obtaining a unique identifier.
        (b) Loan Processors and Underwriters.--
                (1) Supervised loan processors and underwriters.--A loan
            processor or underwriter who does not represent to the public,
            through advertising or other means of communicating or
            providing information (including the use of business cards,
            stationery, brochures, signs, rate lists, or other promotional
            items), that such individual can or will perform any of the
            activities of a loan originator shall not be required to be a
            State-licensed loan originator.
                (2) Independent contractors.--An independent contractor may
            not engage in residential mortgage loan origination activities
            as a loan processor or underwriter unless such independent
            contractor is a State-licensed loan originator.

    SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND ISSUANCE.

        (a) Background Checks.--In connection with an application to any
    State for licensing and registration as a State-licensed loan
    originator, the applicant shall, at a minimum, furnish to the
    Nationwide Mortgage Licensing System and Registry information
    concerning the applicant's identity, including--
                (1) fingerprints for submission to the Federal Bureau of
            Investigation, and any governmental agency or entity authorized
            to receive such information for a State and national criminal
            history background check; and
                (2) personal history and experience, including
            authorization for the System to obtain--
                        (A) an independent credit report obtained from a
                    consumer reporting agency described in section 603(p)
                    of the Fair Credit Reporting Act; and
                        (B) information related to any administrative,
                    civil or criminal findings by any governmental
                    jurisdiction.
        (b) Issuance of License.--The minimum standards for licensing and
    registration as a State-licensed loan originator shall include the
    following:
                (1) The applicant has never had a loan originator license
            revoked in any governmental jurisdiction.
                (2) The applicant has not been convicted of, or pled guilty
            or nolo contendere to, a felony in a domestic, foreign, or
            military court--
                        (A) during the 7-year period preceding the date of
                    the application for licensing and registration; or
                        (B) at any time preceding such date of application,
                    if such felony involved an act of fraud, dishonesty, or
                    a breach of trust, or money laundering.
                (3) The applicant has demonstrated financial
            responsibility, character, and general fitness such as to
            command the confidence of the community and to warrant a
            determination that the loan originator will operate honestly,
            fairly, and efficiently within the purposes of this title.
                (4) The applicant has completed the pre-licensing education
            requirement described in subsection (c).
                (5) The applicant has passed a written test that meets the
            test requirement described in subsection (d).
                (6) The applicant has met either a net worth or surety bond
            requirement, or paid into a State fund, as required by the
            State pursuant to section 1508(d)(6).
        (c) Pre-Licensing Education of Loan Originators.--
                (1) Minimum educational requirements.--In order to meet the
            pre-licensing education requirement referred to in subsection
            (b)(4), a person shall complete at least 20 hours of education
            approved in accordance with paragraph (2), which shall include
            at least--
                        (A) 3 hours of Federal law and regulations;
                        (B) 3 hours of ethics, which shall include
                    instruction on fraud, consumer protection, and fair
                    lending issues; and
                        (C) 2 hours of training related to lending
                    standards for the nontraditional mortgage product
                    marketplace.
                (2) Approved educational courses.--For purposes of
            paragraph (1), pre-licensing education courses shall be
            reviewed, and approved by the Nationwide Mortgage Licensing
            System and Registry.
                (3) Limitation and standards.--
                        (A) Limitation.--To maintain the independence of
                    the approval process, the Nationwide Mortgage Licensing
                    System and Registry shall not directly or indirectly
                    offer pre-licensure educational courses for loan
                    originators.
                        (B) Standards.--In approving courses under this
                    section, the Nationwide Mortgage Licensing System and
                    Registry shall apply reasonable standards in the review
                    and approval of courses.
        (d) Testing of Loan Originators.--
                (1) In general.--In order to meet the written test
            requirement referred to in subsection (b)(5), an individual
            shall pass, in accordance with the standards established under
            this subsection, a qualified written test developed by the
            Nationwide Mortgage Licensing System and Registry and
            administered by an approved test provider.
                (2) Qualified test.--A written test shall not be treated as
            a qualified written test for purposes of paragraph (1) unless
            the test adequately measures the applicant's knowledge and
            comprehension in appropriate subject areas, including--
                        (A) ethics;
                        (B) Federal law and regulation pertaining to
                    mortgage origination;
                        (C) State law and regulation pertaining to mortgage
                    origination;
                        (D) Federal and State law and regulation, including
                    instruction on fraud, consumer protection, the
                    nontraditional mortgage marketplace, and fair lending
                    issues.
                (3) Minimum competence.--
                        (A) Passing score.--An individual shall not be
                    considered to have passed a qualified written test
                    unless the individual achieves a test score of not less
                    than 75 percent correct answers to questions.
                        (B) Initial retests.--An individual may retake a
                    test 3 consecutive times with each consecutive taking
                    occurring at least 30 days after the preceding test.
                        (C) Subsequent retests.--After failing 3
                    consecutive tests, an individual shall wait at least 6
                    months before taking the test again.
                        (D) Retest after lapse of license.--A State-
                    licensed loan originator who fails to maintain a valid
                    license for a period of 5 years or longer shall retake
                    the test, not taking into account any time during which
                    such individual is a registered loan originator.
        (e) Mortgage Call Reports.--Each mortgage licensee shall submit to
    the Nationwide Mortgage Licensing System and Registry reports of
    condition, which shall be in such form and shall contain such
    information as the Nationwide Mortgage Licensing System and Registry
    may require.

    SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

        (a) In General.--The minimum standards for license renewal for
    State-licensed loan originators shall include the following:
                (1) The loan originator continues to meet the minimum
            standards for license issuance.
                (2) The loan originator has satisfied the annual continuing
            education requirements described in subsection (b).
        (b) Continuing Education for State-Licensed Loan Originators.--
                (1) In general.--In order to meet the annual continuing
            education requirements referred to in subsection (a)(2), a
            State-licensed loan originator shall complete at least 8 hours
            of education approved in accordance with paragraph (2), which
            shall include at least--
                        (A) 3 hours of Federal law and regulations;
                        (B) 2 hours of ethics, which shall include
                    instruction on fraud, consumer protection, and fair
                    lending issues; and
                        (C) 2 hours of training related to lending
                    standards for the nontraditional mortgage product
                    marketplace.
                (2) Approved educational courses.--For purposes of
            paragraph (1), continuing education courses shall be reviewed,
            and approved by the Nationwide Mortgage Licensing System and
            Registry.
                (3) Calculation of continuing education credits.--A State-
            licensed loan originator--
                        (A) may only receive credit for a continuing
                    education course in the year in which the course is
                    taken; and
                        (B) may not take the same approved course in the
                    same or successive years to meet the annual
                    requirements for continuing education.
                (4) Instructor credit.--A State-licensed loan originator
            who is approved as an instructor of an approved continuing
            education course may receive credit for the originator's own
            annual continuing education requirement at the rate of 2 hours
            credit for every 1 hour taught.
                (5) Limitation and standards.--
                        (A) Limitation.--To maintain the independence of
                    the approval process, the Nationwide Mortgage Licensing
                    System and Registry shall not directly or indirectly
                    offer any continuing education courses for loan
                    originators.
                        (B) Standards.--In approving courses under this
                    section, the Nationwide Mortgage Licensing System and
                    Registry shall apply reasonable standards in the review
                    and approval of courses.

    SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL AGENCIES.

        (a) Development.--
                (1) In general.--The Federal banking agencies shall
            jointly, through the Federal Financial Institutions Examination
            Council, and together with the Farm Credit Administration,
            develop and maintain a system for registering employees of a
            depository institution, employees of a subsidiary that is owned
            and controlled by a depository institution and regulated by a
            Federal banking agency, or employees of an institution
            regulated by the Farm Credit Administration, as registered loan
            originators with the Nationwide Mortgage Licensing System and
            Registry. The system shall be implemented before the end of the
            1-year period beginning on the date of enactment of this title.
                (2) Registration requirements.--In connection with the
            registration of any loan originator under this subsection, the
            appropriate Federal banking agency and the Farm Credit
            Administration shall, at a minimum, furnish or cause to be
            furnished to the Nationwide Mortgage Licensing System and
            Registry information concerning the employees's identity,
            including--
                        (A) fingerprints for submission to the Federal
                    Bureau of Investigation, and any governmental agency or
                    entity authorized to receive such information for a
                    State and national criminal history background check;
                    and
                        (B) personal history and experience, including
                    authorization for the Nationwide Mortgage Licensing
                    System and Registry to obtain information related to
                    any administrative, civil or criminal findings by any
                    governmental jurisdiction.
        (b) Coordination.--
                (1) Unique identifier.--The Federal banking agencies,
            through the Financial Institutions Examination Council, and the
            Farm Credit Administration shall coordinate with the Nationwide
            Mortgage Licensing System and Registry to establish protocols
            for assigning a unique identifier to each registered loan
            originator that will facilitate electronic tracking and uniform
            identification of, and public access to, the employment history
            of and publicly adjudicated disciplinary and enforcement
            actions against loan originators.
                (2) Nationwide mortgage licensing system and registry
            development.--To facilitate the transfer of information
            required by subsection (a)(2), the Nationwide Mortgage
            Licensing System and Registry shall coordinate with the Federal
            banking agencies, through the Financial Institutions
            Examination Council, and the Farm Credit Administration
            concerning the development and operation, by such System and
            Registry, of the registration functionality and data
            requirements for loan originators.
        (c) Consideration of Factors and Procedures.--In establishing the
    registration procedures under subsection (a) and the protocols for
    assigning a unique identifier to a registered loan originator, the
    Federal banking agencies shall make such de minimis exceptions as may
    be appropriate to paragraphs (1)(A) and (2) of section 1504(a), shall
    make reasonable efforts to utilize existing information to minimize the
    burden of registering loan originators, and shall consider methods for
    automating the process to the greatest extent practicable consistent
    with the purposes of this title.

    SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP AUTHORITY
                  TO ESTABLISH A LOAN ORIGINATOR LICENSING SYSTEM.

        (a) Backup Licensing System.--If, by the end of the 1-year period,
    or the 2-year period in the case of a State whose legislature meets
    only biennially, beginning on the date of the enactment of this title
    or at any time thereafter, the Secretary determines that a State does
    not have in place by law or regulation a system for licensing and
    registering loan originators that meets the requirements of sections
    1505 and 1506 and subsection (d) of this section, or does not
    participate in the Nationwide Mortgage Licensing System and Registry,
    the Secretary shall provide for the establishment and maintenance of a
    system for the licensing and registration by the Secretary of loan
    originators operating in such State as State-licensed loan originators.
        (b) Licensing and Registration Requirements.--The system
    established by the Secretary under subsection (a) for any State shall
    meet the requirements of sections 1505 and 1506 for State-licensed loan
    originators.
        (c) Unique Identifier.--The Secretary shall coordinate with the
    Nationwide Mortgage Licensing System and Registry to establish
    protocols for assigning a unique identifier to each loan originator
    licensed by the Secretary as a State-licensed loan originator that will
    facilitate electronic tracking and uniform identification of, and
    public access to, the employment history of and the publicly
    adjudicated disciplinary and enforcement actions against loan
    originators.
        (d) State Licensing Law Requirements.--For purposes of this
    section, the law in effect in a State meets the requirements of this
    subsection if the Secretary determines the law satisfies the following
    minimum requirements:
                (1) A State loan originator supervisory authority is
            maintained to provide effective supervision and enforcement of
            such law, including the suspension, termination, or nonrenewal
            of a license for a violation of State or Federal law.
                (2) The State loan originator supervisory authority ensures
            that all State-licensed loan originators operating in the State
            are registered with Nationwide Mortgage Licensing System and
            Registry.
                (3) The State loan originator supervisory authority is
            required to regularly report violations of such law, as well as
            enforcement actions and other relevant information, to the
            Nationwide Mortgage Licensing System and Registry.
                (4) The State loan originator supervisory authority has a
            process in place for challenging information contained in the
            Nationwide Mortgage Licensing System and Registry.
                (5) The State loan originator supervisory authority has
            established a mechanism to assess civil money penalties for
            individuals acting as mortgage originators in their State
            without a valid license or registration.
                (6) The State loan originator supervisory authority has
            established minimum net worth or surety bonding requirements
            that reflect the dollar amount of loans originated by a
            residential mortgage loan originator, or has established a
            recovery fund paid into by the loan originators.
        (e) Temporary Extension of Period.--The Secretary may extend, by
    not more than 24 months, the 1-year or 2-year period, as the case may
    be, referred to in subsection (a) for the licensing of loan originators
    in any State under a State licensing law that meets the requirements of
    sections 1505 and 1506 and subsection (d) if the Secretary determines
    that such State is making a good faith effort to establish a State
    licensing law that meets such requirements, license mortgage
    originators under such law, and register such originators with the
    Nationwide Mortgage Licensing System and Registry.

    SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE
                  LICENSING AND REGISTRY SYSTEM.

        If at any time the Secretary determines that the Nationwide
    Mortgage Licensing System and Registry is failing to meet the
    requirements and purposes of this title for a comprehensive licensing,
    supervisory, and tracking system for loan originators, the Secretary
    shall establish and maintain such a system to carry out the purposes of
    this title and the effective registration and regulation of loan
    originators.

    SEC. 1510. FEES.

        The Federal banking agencies, the Farm Credit Administration, the
    Secretary, and the Nationwide Mortgage Licensing System and Registry
    may charge reasonable fees to cover the costs of maintaining and
    providing access to information from the Nationwide Mortgage Licensing
    System and Registry, to the extent that such fees are not charged to
    consumers for access to such system and registry.

    SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.

        (a) Access to Records.--Notwithstanding any other provision of law,
    in providing identification and processing functions, the Attorney
    General shall provide access to all criminal history information to the
    appropriate State officials responsible for regulating State-licensed
    loan originators to the extent criminal history background checks are
    required under the laws of the State for the licensing of such loan
    originators.
        (b) Agent.--For the purposes of this section and in order to reduce
    the points of contact which the Federal Bureau of Investigation may
    have to maintain for purposes of subsection (a), the Conference of
    State Bank Supervisors or a wholly owned subsidiary may be used as a
    channeling agent of the States for requesting and distributing
    information between the Department of Justice and the appropriate State
    agencies.

    SEC. 1512. CONFIDENTIALITY OF INFORMATION.

        (a) System Confidentiality.--Except as otherwise provided in this
    section, any requirement under Federal or State law regarding the
    privacy or confidentiality of any information or material provided to
    the Nationwide Mortgage Licensing System and Registry or a system
    established by the Secretary under section 1509, and any privilege
    arising under Federal or State law (including the rules of any Federal
    or State court) with respect to such information or material, shall
    continue to apply to such information or material after the information
    or material has been disclosed to the system. Such information and
    material may be shared with all State and Federal regulatory officials
    with mortgage industry oversight authority without the loss of
    privilege or the loss of confidentiality protections provided by
    Federal and State laws.
        (b) Nonapplicability of Certain Requirements.--Information or
    material that is subject to a privilege or confidentiality under
    subsection (a) shall not be subject to--
                (1) disclosure under any Federal or State law governing the
            disclosure to the public of information held by an officer or
            an agency of the Federal Government or the respective State; or
                (2) subpoena or discovery, or admission into evidence, in
            any private civil action or administrative process, unless with
            respect to any privilege held by the Nationwide Mortgage
            Licensing System and Registry or the Secretary with respect to
            such information or material, the person to whom such
            information or material pertains waives, in whole or in part,
            in the discretion of such person, that privilege.
        (c) Coordination With Other Law.--Any State law, including any
    State open record law, relating to the disclosure of confidential
    supervisory information or any information or material described in
    subsection (a) that is inconsistent with subsection (a) shall be
    superseded by the requirements of such provision to the extent State
    law provides less confidentiality or a weaker privilege.
        (d) Public Access to Information.--This section shall not apply
    with respect to the information or material relating to the employment
    history of, and publicly adjudicated disciplinary and enforcement
    actions against, loan originators that is included in Nationwide
    Mortgage Licensing System and Registry for access by the public.

    SEC. 1513. LIABILITY PROVISIONS.

        The Secretary, any State official or agency, any Federal banking
    agency, or any organization serving as the administrator of the
    Nationwide Mortgage Licensing System and Registry or a system
    established by the Secretary under section 1509, or any officer or
    employee of any such entity, shall not be subject to any civil action
    or proceeding for monetary damages by reason of the good faith action
    or omission of any officer or employee of any such entity, while acting
    within the scope of office or employment, relating to the collection,
    furnishing, or dissemination of information concerning persons who are
    loan originators or are applying for licensing or registration as loan
    originators.

    SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

        (a) Summons Authority.--The Secretary may--
                (1) examine any books, papers, records, or other data of
            any loan originator operating in any State which is subject to
            a licensing system established by the Secretary under section
            1508; and
                (2) summon any loan originator referred to in paragraph (1)
            or any person having possession, custody, or care of the
            reports and records relating to such loan originator, to appear
            before the Secretary or any delegate of the Secretary at a time
            and place named in the summons and to produce such books,
            papers, records, or other data, and to give testimony, under
            oath, as may be relevant or material to an investigation of
            such loan originator for compliance with the requirements of
            this title.
        (b) Examination Authority.--
                (1) In general.--If the Secretary establishes a licensing
            system under section 1508 for any State, the Secretary shall
            appoint examiners for the purposes of administering such
            section.
                (2) Power to examine.--Any examiner appointed under
            paragraph (1) shall have power, on behalf of the Secretary, to
            make any examination of any loan originator operating in any
            State which is subject to a licensing system established by the
            Secretary under section 1508 whenever the Secretary determines
            an examination of any loan originator is necessary to determine
            the compliance by the originator with this title.
                (3) Report of examination.--Each examiner appointed under
            paragraph (1) shall make a full and detailed report of
            examination of any loan originator examined to the Secretary.
                (4) Administration of oaths and affirmations; evidence.--In
            connection with examinations of loan originators operating in
            any State which is subject to a licensing system established by
            the Secretary under section 1508, or with other types of
            investigations to determine compliance with applicable law and
            regulations, the Secretary and examiners appointed by the
            Secretary may administer oaths and affirmations and examine and
            take and preserve testimony under oath as to any matter in
            respect to the affairs of any such loan originator.
                (5) Assessments.--The cost of conducting any examination of
            any loan originator operating in any State which is subject to
            a licensing system established by the Secretary under section
            1508 shall be assessed by the Secretary against the loan
            originator to meet the Secretary's expenses in carrying out
            such examination.
        (c) Cease and Desist Proceeding.--
                (1) Authority of secretary.--If the Secretary finds, after
            notice and opportunity for hearing, that any person is
            violating, has violated, or is about to violate any provision
            of this title, or any regulation thereunder, with respect to a
            State which is subject to a licensing system established by the
            Secretary under section 1508, the Secretary may publish such
            findings and enter an order requiring such person, and any
            other person that is, was, or would be a cause of the
            violation, due to an act or omission the person knew or should
            have known would contribute to such violation, to cease and
            desist from committing or causing such violation and any future
            violation of the same provision, rule, or regulation. Such
            order may, in addition to requiring a person to cease and
            desist from committing or causing a violation, require such
            person to comply, or to take steps to effect compliance, with
            such provision or regulation, upon such terms and conditions
            and within such time as the Secretary may specify in such
            order. Any such order may, as the Secretary deems appropriate,
            require future compliance or steps to effect future compliance,
            either permanently or for such period of time as the Secretary
            may specify, with such provision or regulation with respect to
            any loan originator.
                (2) Hearing.--The notice instituting proceedings pursuant
            to paragraph (1) shall fix a hearing date not earlier than 30
            days nor later than 60 days after service of the notice unless
            an earlier or a later date is set by the Secretary with the
            consent of any respondent so served.
                (3) Temporary order.--Whenever the Secretary determines
            that the alleged violation or threatened violation specified in
            the notice instituting proceedings pursuant to paragraph (1),
            or the continuation thereof, is likely to result in significant
            dissipation or conversion of assets, significant harm to
            consumers, or substantial harm to the public interest prior to
            the completion of the proceedings, the Secretary may enter a
            temporary order requiring the respondent to cease and desist
            from the violation or threatened violation and to take such
            action to prevent the violation or threatened violation and to
            prevent dissipation or conversion of assets, significant harm
            to consumers, or substantial harm to the public interest as the
            Secretary deems appropriate pending completion of such
            proceedings. Such an order shall be entered only after notice
            and opportunity for a hearing, unless the Secretary determines
            that notice and hearing prior to entry would be impracticable
            or contrary to the public interest. A temporary order shall
            become effective upon service upon the respondent and, unless
            set aside, limited, or suspended by the Secretary or a court of
            competent jurisdiction, shall remain effective and enforceable
            pending the completion of the proceedings.
                (4) Review of temporary orders.--
                        (A) Review by secretary.--At any time after the
                    respondent has been served with a temporary cease and
                    desist order pursuant to paragraph (3), the respondent
                    may apply to the Secretary to have the order set aside,
                    limited, or suspended. If the respondent has been
                    served with a temporary cease and desist order entered
                    without a prior hearing before the Secretary, the
                    respondent may, within 10 days after the date on which
                    the order was served, request a hearing on such
                    application and the Secretary shall hold a hearing and
                    render a decision on such application at the earliest
                    possible time.
                        (B) Judicial review.--Within--
                                (i) 10 days after the date the respondent
                            was served with a temporary cease and desist
                            order entered with a prior hearing before the
                            Secretary; or
                                (ii) 10 days after the Secretary renders a
                            decision on an application and hearing under
                            paragraph (1), with respect to any temporary
                            cease and desist order entered without a prior
                            hearing before the Secretary,
                    the respondent may apply to the United States district
                    court for the district in which the respondent resides
                    or has its principal place of business, or for the
                    District of Columbia, for an order setting aside,
                    limiting, or suspending the effectiveness or
                    enforcement of the order, and the court shall have
                    jurisdiction to enter such an order. A respondent
                    served with a temporary cease and desist order entered
                    without a prior hearing before the Secretary may not
                    apply to the court except after hearing and decision by
                    the Secretary on the respondent's application under
                    subparagraph (A).
                        (C) No automatic stay of temporary order.--The
                    commencement of proceedings under subparagraph (B)
                    shall not, unless specifically ordered by the court,
                    operate as a stay of the Secretary's order.
                (5) Authority of the secretary to prohibit persons from
            serving as loan originators.--In any cease and desist
            proceeding under paragraph (1), the Secretary may issue an
            order to prohibit, conditionally or unconditionally, and
            permanently or for such period of time as the Secretary shall
            determine, any person who has violated this title or
            regulations thereunder, from acting as a loan originator if the
            conduct of that person demonstrates unfitness to serve as a
            loan originator.
        (d) Authority of the Secretary To Assess Money Penalties.--
                (1) In general.--The Secretary may impose a civil penalty
            on a loan originator operating in any State which is subject to
            a licensing system established by the Secretary under section
            1508, if the Secretary finds, on the record after notice and
            opportunity for hearing, that such loan originator has violated
            or failed to comply with any requirement of this title or any
            regulation prescribed by the Secretary under this title or
            order issued under subsection (c).
                (2) Maximum amount of penalty.--The maximum amount of
            penalty for each act or omission described in paragraph (1)
            shall be $25,000.

    SEC. 1515. STATE EXAMINATION AUTHORITY.

        In addition to any authority allowed under State law a State
    licensing agency shall have the authority to conduct investigations and
    examinations as follows:
                (1) For the purposes of investigating violations or
            complaints arising under this title, or for the purposes of
            examination, the State licensing agency may review,
            investigate, or examine any loan originator licensed or
            required to be licensed under this title, as often as necessary
            in order to carry out the purposes of this title.
                (2) Each such loan originator shall make available upon
            request to the State licensing agency the books and records
            relating to the operations of such originator. The State
            licensing agency may have access to such books and records and
            interview the officers, principals, loan originators,
            employees, independent contractors, agents, and customers of
            the licensee concerning their business.
                (3) The authority of this section shall remain in effect,
            whether such a loan originator acts or claims to act under any
            licensing or registration law of such State, or claims to act
            without such authority.
                (4) No person subject to investigation or examination under
            this section may knowingly withhold, abstract, remove,
            mutilate, destroy, or secrete any books, records, computer
            records, or other information.

    SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.

        (a) Annual Reports.--Not later than 1 year after the date of
    enactment of this title, and annually thereafter, the Secretary shall
    submit a report to Congress on the effectiveness of the provisions of
    this title, including legislative recommendations, if any, for
    strengthening consumer protections, enhancing examination standards,
    streamlining communication between all stakeholders involved in
    residential mortgage loan origination and processing, and establishing
    performance based bonding requirements for mortgage originators or
    institutions that employ such brokers.
        (b) Legislative Recommendations.--Not later than 6 months after the
    date of enactment of this title, the Secretary shall make
    recommendations to Congress on legislative reforms to the Real Estate
    Settlement Procedures Act of 1974, that the Secretary deems appropriate
    to promote more transparent disclosures, allowing consumers to better
    shop and compare mortgage loan terms and settlement costs.

    SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

        (a) Study Required.--The Secretary shall conduct an extensive study
    of the root causes of default and foreclosure of home loans, using as
    much empirical data as is available.
        (b) Preliminary Report to Congress.--Not later than 6 months after
    the date of enactment of this title, the Secretary shall submit to
    Congress a preliminary report regarding the study required by this
    section.
        (c) Final Report to Congress.--Not later than 12 months after the
    date of enactment of this title, the Secretary shall submit to Congress
    a final report regarding the results of the study required by this
    section, which shall include any recommended legislation relating to
    the study, and recommendations for best practices and for a process to
    provide targeted assistance to populations with the highest risk of
    potential default or foreclosure.

                            TITLE VI--MISCELLANEOUS

    SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.

        (a) Ongoing Study of Fees.--The Director shall conduct an ongoing
    study of fees charged by enterprises for guaranteeing a mortgage.
        (b) Collection of Data.--The Director shall, by regulation or
    order, establish procedures for the collection of data from enterprises
    for purposes of this subsection, including the format and the process
    for collection of such data.
        (c) Reports to Congress.--The Director shall annually submit a
    report to Congress on the results of the study conducted under
    subsection (a), based on the aggregated data collected under subsection
    (a) for the subject year, regarding the amount of such fees and the
    criteria used by the enterprises to determine such fees.
        (d) Contents of Reports.--The reports required under subsection (c)
    shall identify and analyze--
                (1) the factors considered in determining the amount of the
            guarantee fees charged;
                (2) the total revenue earned by the enterprises from
            guarantee fees;
                (3) the total costs incurred by the enterprises for
            providing guarantees;
                (4) the average guarantee fee charged by the enterprises;
                (5) an analysis of any increase or decrease in guarantee
            fees from the preceding year;
                (6) a breakdown of the revenue and costs associated with
            providing guarantees, based on product type and risk
            classifications; and
                (7) a breakdown of guarantee fees charged based on asset
            size of the originator and the number of loans sold or
            transferred to an enterprise.
        (e) Protection of Information.--Nothing in this section may be
    construed to require or authorize the Director to publicly disclose
    information that is confidential or proprietary.

    SEC. 1602. STUDY AND REPORT ON DEFAULT RISK EVALUATION.

        (a) Study.--The Director shall conduct a study of ways to improve
    the overall default risk evaluation used with respect to residential
    mortgage loans. Particular attention shall be paid to the development
    and utilization of processes and technologies that provide a means to
    standardize the measurement of risk.
        (b) Report.--The Director shall submit a report on the study
    conducted under this section to the Committee on Banking, Housing, and
    Urban Affairs of the Senate and the Committee on Financial Services of
    the House of Representatives, not later than 1 year after the date of
    enactment of this Act.

    SEC. 1603. CONVERSION OF HUD CONTRACTS.

        (a) In General.--Notwithstanding any other provision of law, the
    Secretary may, at the request of an owner of a multifamily housing
    project that exceeds 5,000 units to which a contract for project-based
    rental assistance under section 8 of the United States Housing Act of
    1937 (``Act'') (42 U.S.C. 1437f) and a Rental Assistance Payment
    contract is subject, convert such contracts to a contract for project-
    based rental assistance under section 8 of the Act.
        (b) Initial Renewal.--
                (1) At the request of an owner under subsection (a) made no
            later than 90 days prior to a conversion, the Secretary may, to
            the extent sufficient amounts are made available in
            appropriation Acts and notwithstanding any other law, treat the
            contemplated resulting contract as if such contract were
            eligible for initial renewal under section 524(a) of the
            MultiFamily Assisted Housing Reform and Affordability Act of
            1997 (42 U.S.C. 1437f note) (``MAHRA'') (42 U.S.C. 1437f note).
                (2) A request by an owner pursuant to paragraph (1) shall
            be upon such terms and conditions as the Secretary may require.
        (c) Resulting Contract.--The resulting contract shall--
                (1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f
            note);
                (2) be considered for all purposes a contract that has been
            renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note)
            for a term not to exceed 20 years;
                (3) be subsequently renewable at the request of an owner,
            under any renewal option for which the project is eligible
            under MAHRA (42 U.S.C. 1437f note);
                (4) contain provisions limiting distributions, as the
            Secretary determines appropriate, not to exceed 10 percent of
            the initial investment of the owner;
                (5) be subject to the availability of sufficient amounts in
            appropriation Acts; and
                (6) be subject to such other terms and conditions as the
            Secretary considers appropriate.
        (d) Income Targeting.--To the extent that assisted dwelling units,
    subject to the resulting contract under subsection (a), serve low-
    income families, as defined in section 3(b)(2) of the Act (42 U.S.C.
    1437a(b)(2)) the units shall be considered to be in compliance with all
    income targeting requirements under the Act (42 U.S.C. 1437 et seq).
        (e) Tenant Eligibility.--Notwithstanding any other provision of
    law, each family residing in an assisted dwelling unit on the date of
    conversion of a contract under this section, subject to the resulting
    contract under subsection (a), shall be considered to meet the
    applicable requirements for income eligibility and occupancy.
        (f) Definitions.--As used in this section--
                (1) the term ``Secretary'' means the Secretary of Housing
            and Urban Development;
                (2) the term ``conversion'' means the action under which a
            contract for project-based rental assistance under section 8 of
            the Act and a Rental Assistance Payment contract become a
            contract for project-based rental assistance under section 8 of
            the Act (42 U.S.C. 1437f) pursuant to subsection (a);
                (3) the term ``resulting contract'' means the new contract
            after a conversion pursuant to subsection (a); and
                (4) the term ``assisted dwelling unit'' means a dwelling
            unit in a multifamily housing project that exceeds 5,000 units
            that, on the date of conversion of a contract under this
            section, is subject to a contract for project-based rental
            assistance under section 8 of the Act (42 U.S.C. 1437f) or a
            Rental Assistance Payment contract.

    SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.

        (a) In General.--Section 11 of the Federal Deposit Insurance Act
    (12 U.S.C. 1821) is amended--
                (1) in subsection (d)(2)--
                        (A) in subparagraph (F), by striking ``as
                    receiver'' and all that follows through clause (ii) and
                    inserting the following: ``as receiver, with respect to
                    any insured depository institution, organize a new
                    depository institution under subsection (m) or a bridge
                    depository institution under subsection (n).'';
                        (B) in subparagraph (G), by striking ``new bank or
                    a bridge bank'' and inserting ``new depository
                    institution or a bridge depository institution'';
                (2) in the heading for subsection (e)(10)(C), by striking
            ``Bridge Banks'' and inserting ``Bridge Depository
            Institutions'';
                (3) in subsection (e)(10)(C)(i), by striking ``bridge
            bank'' and inserting ``bridge depository institution'';
                (4) in subsection (m)--
                        (A) in the subsection heading, by striking
                    ``Banks'' and inserting ``Depository Institutions'';
                        (B) by striking ``insured bank'' each place such
                    term appears and inserting ``insured depository
                    institution'';
                        (C) by striking ``new bank'' each place such term
                    appears and inserting ``new depository institution'';
                        (D) by striking ``such bank'' each place such term
                    appears and inserting ``such depository institution'';
                        (E) by striking ``the bank'' each place such term
                    appears and inserting ``the insured depository
                    institution'';
                        (F) in paragraph (1), by inserting ``or Federal
                    savings association'' after ``national bank'';
                        (G) in paragraph (6), by striking ``only bank'' and
                    inserting ``only depository institution'';
                        (H) in paragraph (9), by inserting ``or the
                    Director of the Office of Thrift Supervision, as
                    appropriate'' after ``Comptroller of the Currency'';
                        (I) in paragraph (15), by striking ``, but in no
                    event'' and all that follows through ``located'';
                        (J) in paragraph (16)--
                                (i) by inserting ``or the Director of the
                            Office of Thrift Supervision, as appropriate,''
                            after ``Comptroller of the Currency'' each
                            place such term appears;
                                (ii) by striking ``the bank'' each place
                            such term appears and inserting ``the
                            depository institution'';
                                (iii) by inserting ``or Federal savings
                            association'' after ``national bank'' each
                            place such term appears;
                                (iv) by inserting ``or Federal savings
                            associations'' after ``national banks''; and
                                (v) by striking ``Such bank'' and inserting
                            ``Such depository institution''; and
                        (K) in paragraph (18), by inserting ``or the
                    Director of the Office of Thrift Supervision, as
                    appropriate,'' after ``Comptroller of the Currency''
                    each place such term appears;
                (5) in subsection (n)--
                        (A) in the subsection heading, by striking
                    ``Banks'' and inserting ``Depository Institutions'';
                        (B) by striking ``bridge bank'' each place such
                    term appears and inserting ``bridge depository
                    institution'';
                        (C) by striking ``bridge banks'' each place such
                    term appears (other than in paragraph (1)(A))and
                    inserting ``bridge depository institutions'';
                        (D) by striking ``bridge bank's'' each place such
                    term appears and inserting ``bridge depository
                    institution's'';
                        (E) by striking ``insured bank'' each place such
                    term appears and inserting ``insured depository
                    institution'';
                        (F) by striking ``insured banks'' each place such
                    term appears and inserting ``insured depository
                    institutions'';
                        (G) by striking ``such bank'' each place such term
                    appears (other than in paragraph (4)(J)) and inserting
                    ``such depository institution'';
                        (H) by striking ``the bank'' each place such term
                    appears and inserting ``the depository institution'';
                        (I) by striking ``bank or banks'' each place such
                    term appears and inserting ``depository institution or
                    institutions'';
                        (J) in paragraph (1)(A)--
                                (i) by inserting ``, with respect to 1 or
                            more insured banks, or the Director of the
                            Office of Thrift Supervision, with respect to 1
                            or more insured savings associations,'' after
                            ``Comptroller of the Currency'';
                                (ii) by inserting ``or Federal savings
                            associations, as appropriate,'' after
                            ``national banks'';
                                (iii) by inserting ``or Federal savings
                            associations, as applicable,'' after ``banking
                            associations''; and
                                (iv) by striking ``as bridge banks'' and
                            inserting ``as `bridge depository
                            institutions''';
                        (K) in paragraph (1)(B)--
                                (i) by striking ``of a bank''; and
                                (ii) by striking ``of that bank'';
                        (L) in the heading for paragraph (1)(E), by
                    inserting ``or federal savings association'' before the
                    period;
                        (M) in paragraph (1)(E), by inserting before the
                    period ``, in the case of 1 or more insured banks, and
                    as a Federal savings association, in the case of 1 or
                    more insured savings associations'';
                        (N) in paragraph (2)--
                                (i) by inserting ``or Federal savings
                            association'' after ``national bank'' each
                            place such term appears;
                                (ii) in subparagraph (A), by inserting ``or
                            the Director of the Office of Thrift
                            Supervision'' after ``Comptroller of the
                            Currency''; and
                                (iii) in the heading for subparagraph (B),
                            by inserting ``or federal savings association''
                            before the period;
                        (O) in paragraph (4)--
                                (i) in the matter preceding subparagraph
                            (A), by inserting ``or Federal savings
                            association, as appropriate'' after ``national
                            bank'';
                                (ii) in subparagraph (C), by striking
                            ``under section 5138 of the Revised Statutes or
                            any other'' and inserting ``under any'';
                                (iii) by inserting ``and the Director of
                            the Office of Thrift Supervision, as
                            appropriate,'' after ``Comptroller of the
                            Currency'' each place such term appears;
                                (iv) in subparagraph (D), by striking
                            ``bank's'' and inserting ``depository
                            institution's''; and
                                (v) in subparagraph (H), by striking ``a
                            bank in default'' and inserting ``a depository
                            institution in default'';
                        (P) in paragraph (8)--
                                (i) in subparagraph (A), by striking ``the
                            banks'' and inserting ``the depository
                            institutions'';
                                (ii) in subparagraph (B), by striking
                            ``bank's'' and inserting ``depository
                            institution's'';
                        (Q) by striking ``bridge bank'' or ``bridge banks''
                    as the case may be in the headings for paragraphs (9),
                    (10), (12), and (13) and inserting ``bridge depository
                    institution'' or ``bridge depository institutions'' as
                    appropriate;
                        (R) in paragraph (11), by inserting ``or a Federal
                    savings association, as the case may be,'' after
                    ``national bank'' each place such term appears;
                        (S) in paragraph (12)--
                                (i) by inserting ``or the Director of the
                            Office of Thrift Supervision, as appropriate,''
                            after ``Comptroller of the Currency'' each
                            place such term appears; and
                                (ii) by inserting ``or Federal savings
                            associations, as appropriate'' after ``national
                            banks''; and
                        (T) in paragraph (13), by striking ``single bank''
                    and inserting ``single depository institution''.
        (b) Other Conforming Amendments.--
                (1) Federal deposit insurance act.--The Federal Deposit
            Insurance Act (12 U.S.C. 1811 et seq.) is amended--
                        (A) in section 3 (12 U.S.C. 1813), by striking
                    subsection (i) and inserting the following:
        ``(i) New Depository Institution and Bridge Depository Institution
    Defined.--
                ``(1) New depository institution.--The term `new depository
            institution' means a new national bank or Federal savings
            association, other than a bridge depository institution,
            organized by the Corporation in accordance with section 11(m).
                ``(2) Bridge depository institution.--The term `bridge
            depository institution' means a new national bank or Federal
            savings association organized by the Corporation in accordance
            with section 11(n).'';
                        (B) in section 10(d)(5)(B) (12 U.S.C.
                    1820(d)(5)(B)), by striking ``bridge bank'' and
                    inserting ``bridge depository institution'';
                        (C) in section 12 (12 U.S.C. 1822), by striking
                    ``new bank'' each place such term appears and inserting
                    ``new depository institution'';and
                        (D) in section 38(j)(2) (12 U.S.C. 1831o(j)(2)), by
                    striking ``bridge bank'' and inserting ``bridge
                    depository institution''.
                (2) Federal credit union act.--Section 207(c)(10)(C)(i) of
            the Federal Credit Union Act (12 U.S.C. 1787(c)(10)(C)(i)) is
            amended by striking ``bridge bank'' and inserting ``bridge
            depository institution''.
                (3) Title 11, united states code.--Section 783 of title 11,
            United States Code, is amended by striking ``bridge bank'' and
            inserting ``bridge depository institution''.
                (4) Title 26, united states code.--Section 414(l)(2)(G) of
            the Internal Revenue Code of 1986, is amended by striking
            ``bridge bank'' and inserting ``bridge depository
            institution''.
        (c) Repeal of Deposit Limitation.--Section 11(n)(1)(B)(i) of the
    Federal Deposit Insurance Act (12 U.S.C. 1821(n)(1)(B)(i)) is amended
    by striking ``, except that'' and all that follows through ``another
    insured depository institution''.
        (d) Federal Reserve Bank Lending to Bridge Depository
    Institutions.--Section 11(n)(5) of the Federal Deposit Insurance Act
    (12 U.S.C. 1821(n)(5)) is amended by adding at the end the following
    new subparagraph:
                        ``(D) Capital levels.--A bridge depository
                    institution shall not be considered an undercapitalized
                    depository institution or a critically undercapitalized
                    depository institution for purposes of section 10B(b)
                    of the Federal Reserve Act.''.

    SEC. 1605. SENSE OF THE SENATE.

        It is the sense of the Senate that in implementing or carrying out
    any provision of this Act, or any amendment made by this Act, the
    Senate supports a policy of noninterference regarding local government
    requirements that the holder of a foreclosed property maintain that
    property.

                       DIVISION B--FORECLOSURE PREVENTION

    SEC. 2001. SHORT TITLE.

        This division may be cited as the ``Foreclosure Prevention Act of
    2008''.

    SEC. 2002. EMERGENCY DESIGNATION.

        For purposes of Senate enforcement, all provisions of this division
    are designated as emergency requirements and necessary to meet
    emergency needs pursuant to section 204 of S. Con. Res. 21 (110th
    Congress), the concurrent resolution on the budget for fiscal year
    2008.

                     TITLE I--FHA MODERNIZATION ACT OF 2008

    SEC. 2101. SHORT TITLE.

        This title may be cited as the ``FHA Modernization Act of 2008''.

                  Subtitle A--Building American Homeownership

    SEC. 2111. SHORT TITLE.

        This subtitle may be cited as the ``Building American Homeownership
    Act of 2008''.

    SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

        (a) In General.--Paragraph (2) of section 203(b) of the National
    Housing Act (12 U.S.C. 1709(b)(2)) is amended--
                (1) by striking subparagraphs (A) and (B) and inserting the
            following:
                        ``(A) not to exceed the lesser of--
                                ``(i) in the case of a 1-family residence,
                            115 percent of the median 1-family house price
                            in the area, as determined by the Secretary;
                            and in the case of a 2-, 3-, or 4-family
                            residence, the percentage of such median price
                            that bears the same ratio to such median price
                            as the dollar amount limitation determined
                            under the sixth sentence of section 305(a)(2)
                            of the Federal Home Loan Mortgage Corporation
                            Act (12 U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-
                            family residence, respectively, bears to the
                            dollar amount limitation determined under such
                            section for a 1-family residence; or
                                ``(ii) 150 percent of the dollar amount
                            limitation determined under the sixth sentence
                            of such section 305(a)(2) for a residence of
                            applicable size;
                    except that the dollar amount limitation in effect
                    under this subparagraph for any size residence for any
                    area may not be less than the greater of: (I) the
                    dollar amount limitation in effect under this section
                    for the area on October 21, 1998; or (II) 65 percent of
                    the dollar amount limitation determined under the sixth
                    sentence of such section 305(a)(2) for a residence of
                    the applicable size; and
                        ``(B) not to exceed 100 percent of the appraised
                    value of the property.''; and
                (2) in the matter following subparagraph (B), by striking
            the second sentence (relating to a definition of ``average
            closing cost'') and all that follows through ``section 3103A(d)
            of title 38, United States Code.''.
        (b) Treatment of Up-Front Premiums.--Section 203(d) of the National
    Housing Act (12 U.S.C. 1709(d)) is amended--
                (1) by striking ``Notwithstanding any'' and inserting the
            following: ``Except as provided in paragraph (2) of this
            subsection, notwithstanding'';
                (2) by inserting ``(1)'' after ``(d)''; and
                (3) by adding at the end the following new paragraph:
        ``(2) The maximum amount of a mortgage determined under subsection
    (b)(2)(B) of this section may not be increased as provided in paragraph
    (1).''.
        (c) Effective Date.-- The amendments made by subsection (a) shall
    take effect upon the expiration of the date described in section 202(a)
    of the Economic Stimulus Act of 2008 (Public Law 110-185; 122 Stat.
    620).

    SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED
                  DOWN PAYMENT ASSISTANCE.

        Paragraph (9) of section 203(b) of the National Housing Act (12
    U.S.C. 1709(b)(9)) is amended to read as follows:
                ``(9) Cash investment requirement.--
                        ``(A) In general.--A mortgage insured under this
                    section shall be executed by a mortgagor who shall have
                    paid, in cash or its equivalent, on account of the
                    property an amount equal to not less than 3.5 percent
                    of the appraised value of the property or such larger
                    amount as the Secretary may determine.
                        ``(B) Family members.--For purposes of this
                    paragraph, the Secretary shall consider as cash or its
                    equivalent any amounts borrowed from a family member
                    (as such term is defined in section 201), subject only
                    to the requirements that, in any case in which the
                    repayment of such borrowed amounts is secured by a lien
                    against the property, that--
                                ``(i) such lien shall be subordinate to the
                            mortgage; and
                                ``(ii) the sum of the principal obligation
                            of the mortgage and the obligation secured by
                            such lien may not exceed 100 percent of the
                            appraised value of the property plus any
                            initial service charges, appraisal, inspection,
                            and other fees in connection with the mortgage.
                        ``(C) Prohibited sources.--In no case shall the
                    funds required by subparagraph (A) consist, in whole or
                    in part, of funds provided by any of the following
                    parties before, during, or after closing of the
                    property sale:
                                ``(i) The seller or any other person or
                            entity that financially benefits from the
                            transaction.
                                ``(ii) Any third party or entity that is
                            reimbursed, directly or indirectly, by any of
                            the parties described in clause (i).
                    This subparagraph shall apply only to mortgages for
                    which the mortgagee has issued credit approval for the
                    borrower on or after October 1, 2008.''.

    SEC. 2114. MORTGAGE INSURANCE PREMIUMS.

        Section 203(c)(2) of the National Housing Act (12 U.S.C.
    1709(c)(2)) is amended--
                (1) in the matter preceding subparagraph (A), by striking
            ``or of the General Insurance Fund'' and all that follows
            through ``section 234(c),,''; and
                (2) in subparagraph (A)--
                        (A) by striking ``2.25 percent'' and inserting ``3
                    percent''; and
                        (B) by striking ``2.0 percent'' and inserting
                    ``2.75 percent''.

    SEC. 2115. REHABILITATION LOANS.

        Subsection (k) of section 203 of the National Housing Act (12
    U.S.C. 1709(k)) is amended--
                (1) in paragraph (1), by striking ``on'' and all that
            follows through ``1978''; and
                (2) in paragraph (5)--
                        (A) by striking ``General Insurance Fund'' the
                    first place it appears and inserting ``Mutual Mortgage
                    Insurance Fund''; and
                        (B) in the second sentence, by striking the comma
                    and all that follows through ``General Insurance
                    Fund''.

    SEC. 2116. DISCRETIONARY ACTION.

        The National Housing Act is amended--
                (1) in subsection (e) of section 202 (12 U.S.C. 1708(e))--
                        (A) in paragraph (3)(B), by striking ``section
                    202(e) of the National Housing Act'' and inserting
                    ``this subsection''; and
                        (B) by redesignating such subsection as subsection
                    (f);
                (2) by striking paragraph (4) of section 203(s) (12 U.S.C.
            1709(s)(4)) and inserting the following new paragraph:
                ``(4) the Secretary of Agriculture;''; and
                (3) by transferring subsection (s) of section 203 (as
            amended by paragraph (2) of this section) to section 202,
            inserting such subsection after subsection (d) of section 202,
            and redesignating such subsection as subsection (e).

    SEC. 2117. INSURANCE OF CONDOMINIUMS.

        (a) In General.--Section 234 of the National Housing Act (12 U.S.C.
    1715y) is amended--
                (1) in subsection (c), in the first sentence--
                        (A) by striking ``and'' before ``(2)''; and
                        (B) by inserting before the period at the end the
                    following: ``, and (3) the project has a blanket
                    mortgage insured by the Secretary under subsection
                    (d)''; and
                (2) in subsection (g), by striking ``, except that'' and
            all that follows and inserting a period.
        (b) Definition of Mortgage.--Section 201(a) of the National Housing
    Act (12 U.S.C. 1707(a)) is amended--
                (1) before ``a first mortgage'' insert ``(A)'';
                (2) by striking ``or on a leasehold (1)'' and inserting
            ``(B) a first mortgage on a leasehold on real estate (i)'';
                (3) by striking ``or (2)'' and inserting ``, or (ii)''; and
                (4) by inserting before the semicolon the following: ``, or
            (C) a first mortgage given to secure the unpaid purchase price
            of a fee interest in, or long-term leasehold interest in, real
            estate consisting of a one-family unit in a multifamily
            project, including a project in which the dwelling units are
            attached, or are manufactured housing units, semi-detached, or
            detached, and an undivided interest in the common areas and
            facilities which serve the project''.
        (c) Definition of Real Estate.--Section 201 of the National Housing
    Act (12 U.S.C. 1707) is amended by adding at the end the following new
    subsection:
        ``(g) The term `real estate' means land and all natural resources
    and structures permanently affixed to the land, including residential
    buildings and stationary manufactured housing. The Secretary may not
    require, for treatment of any land or other property as real estate for
    purposes of this title, that such land or property be treated as real
    estate for purposes of State taxation.''.

    SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND.

        (a) In General.--Subsection (a) of section 202 of the National
    Housing Act (12 U.S.C. 1708(a)) is amended to read as follows:
        ``(a) Mutual Mortgage Insurance Fund.--
                ``(1) Establishment.--Subject to the provisions of the
            Federal Credit Reform Act of 1990, there is hereby created a
            Mutual Mortgage Insurance Fund (in this title referred to as
            the `Fund'), which shall be used by the Secretary to carry out
            the provisions of this title with respect to mortgages insured
            under section 203. The Secretary may enter into commitments to
            guarantee, and may guarantee, such insured mortgages.
                ``(2) Limit on loan guarantees.--The authority of the
            Secretary to enter into commitments to guarantee such insured
            mortgages shall be effective for any fiscal year only to the
            extent that the aggregate original principal loan amount under
            such mortgages, any part of which is guaranteed, does not
            exceed the amount specified in appropriations Acts for such
            fiscal year.
                ``(3) Fiduciary responsibility.--The Secretary has a
            responsibility to ensure that the Mutual Mortgage Insurance
            Fund remains financially sound.
                ``(4) Annual independent actuarial study.--The Secretary
            shall provide for an independent actuarial study of the Fund to
            be conducted annually, which shall analyze the financial
            position of the Fund. The Secretary shall submit a report
            annually to the Congress describing the results of such study
            and assessing the financial status of the Fund. The report
            shall recommend adjustments to underwriting standards, program
            participation, or premiums, if necessary, to ensure that the
            Fund remains financially sound. The report shall also include
            an evaluation of the quality control procedures and accuracy of
            information utilized in the process of underwriting loans
            guaranteed by the Fund. Such evaluation shall include a review
            of the risk characteristics of loans based not only on borrower
            information and performance, but on risks associated with loans
            originated or funded by various entities or financial
            institutions.
                ``(5) Quarterly reports.--During each fiscal year, the
            Secretary shall submit a report to the Congress for each
            calendar quarter, which shall specify for mortgages that are
            obligations of the Fund--
                        ``(A) the cumulative volume of loan guarantee
                    commitments that have been made during such fiscal year
                    through the end of the quarter for which the report is
                    submitted;
                        ``(B) the types of loans insured, categorized by
                    risk;
                        ``(C) any significant changes between actual and
                    projected claim and prepayment activity;
                        ``(D) projected versus actual loss rates; and
                        ``(E) updated projections of the annual subsidy
                    rates to ensure that increases in risk to the Fund are
                    identified and mitigated by adjustments to underwriting
                    standards, program participation, or premiums, and the
                    financial soundness of the Fund is maintained.
            The first quarterly report under this paragraph shall be
            submitted on the last day of the first quarter of fiscal year
            2008, or on the last day of the first full calendar quarter
            following the enactment of the Building American Homeownership
            Act of 2008, whichever is later.
                ``(6) Adjustment of premiums.--If, pursuant to the
            independent actuarial study of the Fund required under
            paragraph (4), the Secretary determines that the Fund is not
            meeting the operational goals established under paragraph (7)
            or there is a substantial probability that the Fund will not
            maintain its established target subsidy rate, the Secretary may
            either make programmatic adjustments under this title as
            necessary to reduce the risk to the Fund, or make appropriate
            premium adjustments.
                ``(7) Operational goals.--The operational goals for the
            Fund are--
                        ``(A) to minimize the default risk to the Fund and
                    to homeowners by among other actions instituting fraud
                    prevention quality control screening not later than 18
                    months after the date of enactment of the Building
                    American Homeownership Act of 2008; and
                        ``(B) to meet the housing needs of the borrowers
                    that the single family mortgage insurance program under
                    this title is designed to serve.''.
        (b) Obligations of Fund.--The National Housing Act is amended as
    follows:
                (1) Homeownership voucher program mortgages.--In section
            203(v) (12 U.S.C. 1709(v))--
                        (A) by striking ``Notwithstanding section 202 of
                    this title, the'' and inserting ``The''; and
                        (B) by striking ``General Insurance Fund'' the
                    first place such term appears and all that follows
                    through the end of the subsection and inserting
                    ``Mutual Mortgage Insurance Fund.''.
                (2) Home equity conversion mortgages.--Section 255(i)(2)(A)
            of the National Housing Act (12 U.S.C. 1715z-20(i)(2)(A)) is
            amended by striking ``General Insurance Fund'' and inserting
            ``Mutual Mortgage Insurance Fund''.
        (c) Conforming Amendments.--The National Housing Act is amended--
                (1) in section 205 (12 U.S.C. 1711), by striking
            subsections (g) and (h); and
                (2) in section 519(e) (12 U.S.C. 1735c(e)), by striking
            ``203(b)'' and all that follows through ``203(i)'' and
            inserting ``203, except as determined by the Secretary''.

    SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

        (a) Hawaiian Home Lands.--Section 247(c) of the National Housing
    Act (12 U.S.C. 1715z-12(c)) is amended--
                (1) by striking ``General Insurance Fund established in
            section 519'' and inserting ``Mutual Mortgage Insurance Fund'';
            and
                (2) in the second sentence, by striking ``(1) all
            references'' and all that follows through ``and (2)''.
        (b) Indian Reservations.--Section 248(f) of the National Housing
    Act (12 U.S.C. 1715z-13(f)) is amended--
                (1) by striking ``General Insurance Fund'' the first place
            it appears through ``519'' and inserting ``Mutual Mortgage
            Insurance Fund''; and
                (2) in the second sentence, by striking ``(1) all
            references'' and all that follows through ``and (2)''.

    SEC. 2120. CONFORMING AND TECHNICAL AMENDMENTS.

        (a) Repeals.--The following provisions of the National Housing Act
    are repealed:
                (1) Subsection (i) of section 203 (12 U.S.C. 1709(i)).
                (2) Subsection (o) of section 203 (12 U.S.C. 1709(o)).
                (3) Subsection (p) of section 203 (12 U.S.C. 1709(p)).
                (4) Subsection (q) of section 203 (12 U.S.C. 1709(q)).
                (5) Section 222 (12 U.S.C. 1715m).
                (6) Section 237 (12 U.S.C. 1715z-2).
                (7) Section 245 (12 U.S.C. 1715z-10).
        (b) Definition of Area.--Section 203(u)(2)(A) of the National
    Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking ``shall''
    and all that follows and inserting ``means a metropolitan statistical
    area as established by the Office of Management and Budget;''.
        (c) Definition of State.--Section 201(d) of the National Housing
    Act (12 U.S.C. 1707(d)) is amended by striking ``the Trust Territory of
    the Pacific Islands'' and inserting ``the Commonwealth of the Northern
    Mariana Islands''.

    SEC. 2121. INSURANCE OF MORTGAGES.

        Subsection (n)(2) of section 203 of the National Housing Act (12
    U.S.C. 1709(n)(2)) is amended--
                (1) in subparagraph (A), by inserting ``or subordinate
            mortgage or'' before ``lien given''; and
                (2) in subparagraph (C), by inserting ``or subordinate
            mortgage or'' before ``lien''.

    SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.

        (a) In General.--Section 255 of the National Housing Act (12 U.S.C.
    1715z-20) is amended--
                (1) in subsection (b)(2), insert ```real estate,''' after
            ```mortgagor','';
                (2) by amending subsection (d)(1) to read as follows:
                ``(1) have been originated by a mortgagee approved by the
            Secretary;'';
                (3) by amending subsection (d)(2)(B) to read as follows:
                        ``(B) has received adequate counseling, as provided
                    in subsection (f), by an independent third party that
                    is not, either directly or indirectly, associated with
                    or compensated by a party involved in--
                                ``(i) originating or servicing the
                            mortgage;
                                ``(ii) funding the loan underlying the
                            mortgage; or
                                ``(iii) the sale of annuities, investments,
                            long-term care insurance, or any other type of
                            financial or insurance product;'';
                (4) in subsection (f)--
                        (A) by striking ``(f) Information Services for
                    Mortgagors.--'' and inserting ``(f) Counseling Services
                    and Information for Mortgagors.--''; and
                        (B) by amending the matter preceding paragraph (1)
                    to read as follows: ``The Secretary shall provide or
                    cause to be provided adequate counseling for the
                    mortgagor, as described in subsection (d)(2)(B). Such
                    counseling shall be provided by counselors that meet
                    qualification standards and follow uniform counseling
                    protocols. The qualification standards and counseling
                    protocols shall be established by the Secretary within
                    12 months of the date of enactment of the Building
                    American Homeownership Act of 2008. The protocols shall
                    require a qualified counselor to discuss with each
                    mortgagor information which shall include--''
                (5) in subsection (g), by striking ``established under
            section 203(b)(2)'' and all that follows through ``located''
            and inserting ``limitation established under section 305(a)(2)
            of the Federal Home Loan Mortgage Corporation Act for a 1-
            family residence'';
                (6) by striking subsection (l);
                (7) by redesignating subsection (m) as subsection (l);
                (8) by amending subsection (l), as so redesignated, to read
            as follows:
        ``(l) Funding for Counseling.--The Secretary may use a portion of
    the mortgage insurance premiums collected under the program under this
    section to adequately fund the counseling and disclosure activities
    required under subsection (f), including counseling for those
    homeowners who elect not to take out a home equity conversion mortgage,
    provided that the use of such funds is based upon accepted actuarial
    principles.''; and
                (9) by adding at the end the following new subsection:
        ``(m) Authority To Insure Home Purchase Mortgage.--
                ``(1) In general.--Notwithstanding any other provision of
            this section, the Secretary may insure, upon application by a
            mortgagee, a home equity conversion mortgage upon such terms
            and conditions as the Secretary may prescribe, when the home
            equity conversion mortgage will be used to purchase a 1- to 4-
            family dwelling unit, one unit of which the mortgagor will
            occupy as a primary residence, and to provide for any future
            payments to the mortgagor, based on available equity, as
            authorized under subsection (d)(9).
                ``(2) Limitation on principal obligation.--A home equity
            conversion mortgage insured pursuant to paragraph (1) shall
            involve a principal obligation that does not exceed the dollar
            amount limitation determined under section 305(a)(2) of the
            Federal Home Loan Mortgage Corporation Act for a 1-family
            residence.
        ``(n) Requirements on Mortgage Originators.--
                ``(1) In general.--The mortgagee and any other party that
            participates in the origination of a mortgage to be insured
            under this section shall--
                        ``(A) not participate in, be associated with, or
                    employ any party that participates in or is associated
                    with any other financial or insurance activity; or
                        ``(B) demonstrate to the Secretary that the
                    mortgagee or other party maintains, or will maintain,
                    firewalls and other safeguards designed to ensure
                    that--
                                ``(i) individuals participating in the
                            origination of the mortgage shall have no
                            involvement with, or incentive to provide the
                            mortgagor with, any other financial or
                            insurance product; and
                                ``(ii) the mortgagor shall not be required,
                            directly or indirectly, as a condition of
                            obtaining a mortgage under this section, to
                            purchase any other financial or insurance
                            product.
                ``(2) Approval of other parties.--All parties that
            participate in the origination of a mortgage to be insured
            under this section shall be approved by the Secretary.
        ``(o) Prohibition Against Requirements To Purchase Additional
    Products.--The mortgagor or any other party shall not be required by
    the mortgagee or any other party to purchase an insurance, annuity, or
    other similar product as a requirement or condition of eligibility for
    insurance under subsection (c), except for title insurance, hazard,
    flood, or other peril insurance, or other such products that are
    customary and normal under subsection (c), as determined by the
    Secretary.
        ``(p) Study to Determine Consumer Protections and Underwriting
    Standards.--The Secretary shall conduct a study to examine and
    determine appropriate consumer protections and underwriting standards
    to ensure that the purchase of products referred to in subsection (o)
    is appropriate for the consumer. In conducting such study, the
    Secretary shall consult with consumer advocates (including recognized
    experts in consumer protection), industry representatives,
    representatives of counseling organizations, and other interested
    parties.''.
        (b) Mortgages for Cooperatives.--Subsection (b) of section 255 of
    the National Housing Act (12 U.S.C. 1715z-20(b)) is amended--
                (1) in paragraph (4)--
                        (A) by inserting ``a first or subordinate mortgage
                    or lien'' before ``on all stock'';
                        (B) by inserting ``unit'' after ``dwelling''; and
                        (C) by inserting ``a first mortgage or first lien''
                    before ``on a leasehold''; and
                (2) in paragraph (5), by inserting ``a first or subordinate
            lien on'' before ``all stock''.
        (c) Limitation on Origination Fees.--Section 255 of the National
    Housing Act (12 U.S.C. 1715z-20), as amended by the preceding
    provisions of this section, is further amended by adding at the end the
    following new subsection:
        ``(r) Limitation on Origination Fees.--The Secretary shall
    establish limits on the origination fee that may be charged to a
    mortgagor under a mortgage insured under this section, which
    limitations shall--
                ``(1) be equal to 2.0 percent of the maximum claim amount
            of the mortgage, up to a maximum claim amount of $200,000 plus
            1 percent of any portion of the maximum claim amount that is
            greater than $200,000, unless adjusted thereafter on the basis
            of an analysis of--
                        ``(A) the costs to mortgagors; and
                        ``(B) the impact on the reverse mortgage market;
                ``(2) be subject to a minimum allowable amount;
                ``(3) provide that the origination fee may be fully
            financed with the mortgage;
                ``(4) include any fees paid to correspondent mortgagees
            approved by the Secretary;
                ``(5) have the same effective date as subsection (m)(2)
            regarding the limitation on principal obligation; and
                ``(6) be subject to a maximum origination fee of $6,000,
            except that such maximum limit shall be adjusted in accordance
            with the annual percentage increase in the Consumer Price Index
            of the Bureau of Labor Statistics of the Department of Labor in
            increments of $500 only when the percentage increase in such
            index, when applied to the maximum origination fee, produces
            dollar increases that exceed $500.''.
        (d) Study Regarding Program Costs and Credit Availability.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study regarding the costs and
            availability of credit under the home equity conversion
            mortgages for elderly homeowners program under section 255 of
            the National Housing Act (12 U.S.C. 1715z-20) (in this
            subsection referred to as the ``program'').
                (2) Purpose.--The purpose of the study required under
            paragraph (1) is to help Congress analyze and determine the
            effects of limiting the amounts of the costs or fees under the
            program from the amounts charged under the program as of the
            date of the enactment of this title.
                (3) Content of report.--The study required under paragraph
            (1) should focus on--
                        (A) the cost to mortgagors of participating in the
                    program;
                        (B) the financial soundness of the program;
                        (C) the availability of credit under the program;
                    and
                        (D) the costs to elderly homeowners participating
                    in the program, including--
                                (i) mortgage insurance premiums charged
                            under the program;
                                (ii) up-front fees charged under the
                            program; and
                                (iii) margin rates charged under the
                            program.
                (4) Timing of report.--Not later than 12 months after the
            date of the enactment of this title, the Comptroller General
            shall submit a report to the Committee on Banking, Housing, and
            Urban Affairs of the Senate and the Committee on Financial
            Services of the House of Representatives setting forth the
            results and conclusions of the study required under paragraph
            (1).

    SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.

        Section 106(a)(2) of the Energy Policy Act of 1992 (42 U.S.C. 12712
    note) is amended--
                (1) by amending subparagraph (C) to read as follows:
                        ``(C) Costs of improvements.--The cost of cost-
                    effective energy efficiency improvements shall not
                    exceed the greater of--
                                ``(i) 5 percent of the property value (not
                            to exceed 5 percent of the limit established
                            under section 203(b)(2)(A)) of the National
                            Housing Act (12 U.S.C. 1709(b)(2)(A); or
                                ``(ii) 2 percent of the limit established
                            under section 203(b)(2)(B) of such Act.''; and
                (2) by adding at the end the following:
                        ``(D) Limitation.--In any fiscal year, the
                    aggregate number of mortgages insured pursuant to this
                    section may not exceed 5 percent of the aggregate
                    number of mortgages for 1- to 4-family residences
                    insured by the Secretary of Housing and Urban
                    Development under title II of the National Housing Act
                    (12 U.S.C. 1707 et seq.) during the preceding fiscal
                    year.''.

    SEC. 2124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
                  SUFFICIENT CREDIT HISTORY.

        (a) Establishment.--Title II of the National Housing Act (12 U.S.C.
    1707 et seq.) is amended by adding at the end the following new
    section:

    ``SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
                  SUFFICIENT CREDIT HISTORY.

        ``(a) Establishment.--The Secretary shall carry out a pilot program
    to establish, and make available to mortgagees, an automated process
    for providing alternative credit rating information for mortgagors and
    prospective mortgagors under mortgages on 1- to 4-family residences to
    be insured under this title who have insufficient credit histories for
    determining their creditworthiness. Such alternative credit rating
    information may include rent, utilities, and insurance payment
    histories, and such other information as the Secretary considers
    appropriate.
        ``(b) Scope.--The Secretary may carry out the pilot program under
    this section on a limited basis or scope, and may consider limiting the
    program to first-time homebuyers.
        ``(c) Limitation.--In any fiscal year, the aggregate number of
    mortgages insured pursuant to the automated process established under
    this section may not exceed 5 percent of the aggregate number of
    mortgages for 1- to 4-family residences insured by the Secretary under
    this title during the preceding fiscal year.
        ``(d) Sunset.--After the expiration of the 5-year period beginning
    on the date of the enactment of the Building American Homeownership Act
    of 2008, the Secretary may not enter into any new commitment to insure
    any mortgage, or newly insure any mortgage, pursuant to the automated
    process established under this section.''.
        (b) GAO Report.--Not later than the expiration of the two-year
    period beginning on the date of the enactment of this subtitle, the
    Comptroller General of the United States shall submit to the Congress a
    report identifying the number of additional mortgagors served using the
    automated process established pursuant to section 257 of the National
    Housing Act (as added by the amendment made by subsection (a) of this
    section) and the impact of such process and the insurance of mortgages
    pursuant to such process on the safety and soundness of the insurance
    funds under the National Housing Act of which such mortgages are
    obligations.

    SEC. 2125. HOMEOWNERSHIP PRESERVATION.

        The Secretary of Housing and Urban Development and the Commissioner
    of the Federal Housing Administration, in consultation with industry,
    the Neighborhood Reinvestment Corporation, and other entities involved
    in foreclosure prevention activities, shall--
                (1) develop and implement a plan to improve the Federal
            Housing Administration's loss mitigation process; and
                (2) report such plan to the Committee on Banking, Housing,
            and Urban Affairs of the Senate and the Committee on Financial
            Services of the House of Representatives.

    SEC. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA TECHNOLOGIES,
                  PROCEDURES, PROCESSES, PROGRAM PERFORMANCE, STAFFING, AND
                  SALARIES.

        (a) Authorization of Appropriations.--There is authorized to be
    appropriated for each of fiscal years 2009 through 2013, $25,000,000,
    from negative credit subsidy for the mortgage insurance programs under
    title II of the National Housing Act, to the Secretary of Housing and
    Urban Development for increasing funding for the purpose of improving
    technology, processes, program performance, eliminating fraud, and for
    providing appropriate staffing in connection with the mortgage
    insurance programs under title II of the National Housing Act.
        (b) Certification.--The authorization under subsection (a) shall
    not be effective for a fiscal year unless the Secretary of Housing and
    Urban Development has, by rulemaking in accordance with section 553 of
    title 5, United States Code (notwithstanding subsections (a)(2),
    (b)(B), and (d)(3) of such section), made a determination that--
                (1) premiums being, or to be, charged during such fiscal
            year for mortgage insurance under title II of the National
            Housing Act are established at the minimum amount sufficient
            to--
                        (A) comply with the requirements of section 205(f)
                    of such Act (relating to required capital ratio for the
                    Mutual Mortgage Insurance Fund); and
                        (B) ensure the safety and soundness of the other
                    mortgage insurance funds under such Act; and
                (2) any negative credit subsidy for such fiscal year
            resulting from such mortgage insurance programs adequately
            ensures the efficient delivery and availability of such
            programs.
        (c) Study and Report.--The Secretary of Housing and Urban
    Development shall conduct a study to obtain recommendations from
    participants in the private residential (both single family and
    multifamily) mortgage lending business and the secondary market for
    such mortgages on how best to update and upgrade processes and
    technologies for the mortgage insurance programs under title II of the
    National Housing Act so that the procedures for originating, insuring,
    and servicing of such mortgages conform with those customarily used by
    secondary market purchasers of residential mortgage loans. Not later
    than the expiration of the 12-month period beginning on the date of the
    enactment of this title, the Secretary shall submit a report to the
    Congress describing the progress made and to be made toward updating
    and upgrading such processes and technology, and providing appropriate
    staffing for such mortgage insurance programs.

    SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY IMPROVEMENTS.

        Section 106(c)(4) of the Housing and Urban Development Act of 1968
    (12 U.S.C. 1701x(c)(4)) is amended:
                (1) in subparagraph (C)--
                        (A) in clause (i), by striking ``; or'' and
                    inserting a semicolon;
                        (B) in clause (ii), by striking the period at the
                    end and inserting a semicolon; and
                        (C) by adding at the end the following:
                                ``(iii) a significant reduction in the
                            income of the household due to divorce or
                            death; or
                                ``(iv) a significant increase in basic
                            expenses of the homeowner or an immediate
                            family member of the homeowner (including the
                            spouse, child, or parent for whom the homeowner
                            provides substantial care or financial
                            assistance) due to--
                                        ``(I) an unexpected or significant
                                    increase in medical expenses;
                                        ``(II) a divorce;
                                        ``(III) unexpected and significant
                                    damage to the property, the repair of
                                    which will not be covered by private or
                                    public insurance; or
                                        ``(IV) a large property-tax
                                    increase; or'';
                (2) by striking the matter that follows subparagraph (C);
            and
                (3) by adding at the end the following:
                        ``(D) the Secretary of Housing and Urban
                    Development determines that the annual income of the
                    homeowner is no greater than the annual income
                    established by the Secretary as being of low- or
                    moderate-income.''.

    SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION.

        (a) Establishment of Program.--For the period beginning on the date
    of enactment of this title and ending on the date that is 3 years after
    such date of enactment, the Secretary of Housing and Urban Development
    shall establish and conduct a demonstration program to test the
    effectiveness of alternative forms of pre-purchase homeownership
    counseling for eligible homebuyers.
        (b) Forms of Counseling.--The Secretary of Housing and Urban
    Development shall provide to eligible homebuyers pre-purchase
    homeownership counseling under this section in the form of--
                (1) telephone counseling;
                (2) individualized in-person counseling;
                (3) web-based counseling;
                (4) counseling classes; or
                (5) any other form or type of counseling that the Secretary
            may, in his discretion, determine appropriate.
        (c) Size of Program.--The Secretary shall make available the pre-
    purchase homeownership counseling described in subsection (b) to not
    more than 3,000 eligible homebuyers in any given year.
        (d) Incentive To Participate.--The Secretary of Housing and Urban
    Development may provide incentives to eligible homebuyers to
    participate in the demonstration program established under subsection
    (a). Such incentives may include the reduction of any insurance premium
    charges owed by the eligible homebuyer to the Secretary.
        (e) Eligible Homebuyer Defined.--For purposes of this section an
    ``eligible homebuyer'' means a first-time homebuyer who has been
    approved for a home loan with a loan-to-value ratio between 97 percent
    and 98.5 percent.
        (f) Report to Congress.--The Secretary of Housing and Urban
    Development shall report to the Committee on Banking, Housing, and
    Urban Affairs of the Senate and the Committee on Financial Services of
    the House of Representative--
                (1) on an annual basis, on the progress and results of the
            demonstration program established under subsection (a); and
                (2) for the period beginning on the date of enactment of
            this title and ending on the date that is 5 years after such
            date of enactment, on the payment history and delinquency rates
            of eligible homebuyers who participated in the demonstration
            program.

    SEC. 2129. FRAUD PREVENTION.

        Section 1014 of title 18, United States Code, is amended in the
    first sentence--
                (1) by inserting ``the Federal Housing Administration,''
            before ``the Farm Credit Administration''; and
                (2) by striking ``commitment, or loan'' and inserting
            ``commitment, loan, or insurance agreement or application for
            insurance or a guarantee''.

    SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

        (a) In General.--Notwithstanding any other provision of law,
    including any provision of this title and any amendment made by this
    title--
                (1) for the period beginning on the date of the enactment
            of this title and ending on October 1, 2009, the premiums
            charged for mortgage insurance under multifamily housing
            programs under the National Housing Act may not be increased
            above the premium amounts in effect under such program on
            October 1, 2006, unless the Secretary of Housing and Urban
            Development determines that, absent such increase, insurance of
            additional mortgages under such program would, under the
            Federal Credit Reform Act of 1990, require the appropriation of
            new budget authority to cover the costs (as such term is
            defined in section 502 of the Federal Credit Reform Act of 1990
            (2 U.S.C. 661a) of such insurance; and
                (2) a premium increase pursuant to paragraph (1) may be
            made only if not less than 30 days prior to such increase
            taking effect, the Secretary of Housing and Urban Development--
                        (A) notifies the Committee on Banking, Housing, and
                    Urban Affairs of the Senate and the Committee on
                    Financial Services of the House of Representatives of
                    such increase; and
                        (B) publishes notice of such increase in the
                    Federal Register.
        (b) Waiver.--The Secretary of Housing and Urban Development may
    waive the 30-day notice requirement under subsection (a)(2), if the
    Secretary determines that waiting 30-days before increasing premiums
    would cause substantial damage to the solvency of multifamily housing
    programs under the National Housing Act.

    SEC. 2131. SAVINGS PROVISION.

        Any mortgage insured under title II of the National Housing Act
    before the date of enactment of this subtitle shall continue to be
    governed by the laws, regulations, orders, and terms and conditions to
    which it was subject on the day before the date of the enactment of
    this subtitle.

    SEC. 2132. IMPLEMENTATION.

        The Secretary of Housing and Urban Development shall by notice
    establish any additional requirements that may be necessary to
    immediately carry out the provisions of this subtitle. The notice shall
    take effect upon issuance.

    SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED PREMIUMS.

        (a) In General.--During the 12-month period beginning on October 1,
    2008, the Secretary of Housing and Urban Development shall not take any
    action to implement or carry out risk-based premiums, which are
    designed for mortgage lenders to offer borrowers an FHA-insured product
    that provides a range of mortgage insurance premium pricing, based on
    the risk that the insurance contract represents, as such planned
    implementation was set forth in the Notice published in the Federal
    Register on May 13, 2008 (Vol. 73, No. 93, Pages 27703 through 27711)
    (effective July 14, 2008).
        (b) Insurance of Mortgages Under the National Housing Act.--During
    the 12-month period beginning on October 1, 2008, the Secretary of
    Housing and Urban Development shall not take any action to implement or
    carry out any other risk-based premium product related to the insurance
    of any mortgage on a single family residence under title II of the
    National Housing Act, where the premium price for such new product is
    based in whole or in part on a borrower's Decision Credit Score, as
    that term is defined in the Notice described under subsection (a), or
    any successor thereto.

              Subtitle B--Manufactured Housing Loan Modernization

    SEC. 2141. SHORT TITLE.

        This subtitle may be cited as the ``FHA Manufactured Housing Loan
    Modernization Act of 2008''.

    SEC. 2142. PURPOSES.

        The purposes of this subtitle are--
                (1) to provide adequate funding for FHA-insured
            manufactured housing loans for low- and moderate-income
            homebuyers during all economic cycles in the manufactured
            housing industry;
                (2) to modernize the FHA title I insurance program for
            manufactured housing loans to enhance participation by Ginnie
            Mae and the private lending markets; and
                (3) to adjust the low loan limits for title I manufactured
            home loan insurance to reflect the increase in costs since such
            limits were last increased in 1992 and to index the limits to
            inflation.

    SEC. 2143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION PORTFOLIO.

        The second sentence of section 2(a) of the National Housing Act (12
    U.S.C. 1703(a)) is amended--
                (1) by striking ``In no case'' and inserting ``Other than
            in connection with a manufactured home or a lot on which to
            place such a home (or both), in no case''; and
                (2) by striking ``: Provided, That with'' and inserting ``.
            With''.

    SEC. 2144. INSURANCE BENEFITS.

        (a) In General.--Subsection (b) of section 2 of the National
    Housing Act (12 U.S.C. 1703(b)), is amended by adding at the end the
    following new paragraph:
                ``(8) Insurance benefits for manufactured housing loans.--
            Any contract of insurance with respect to loans, advances of
            credit, or purchases in connection with a manufactured home or
            a lot on which to place a manufactured home (or both) for a
            financial institution that is executed under this title after
            the date of the enactment of the FHA Manufactured Housing Loan
            Modernization Act of 2008 by the Secretary shall be conclusive
            evidence of the eligibility of such financial institution for
            insurance, and the validity of any contract of insurance so
            executed shall be incontestable in the hands of the bearer from
            the date of the execution of such contract, except for fraud or
            misrepresentation on the part of such institution.''.
        (b) Applicability.--The amendment made by subsection (a) shall only
    apply to loans that are registered or endorsed for insurance after the
    date of the enactment of this title.

    SEC. 2145. MAXIMUM LOAN LIMITS.

        (a) Dollar Amounts.--Paragraph (1) of section 2(b) of the National
    Housing Act (12 U.S.C. 1703(b)(1)) is amended--
                (1) in clause (ii) of subparagraph (A), by striking
            ``$17,500'' and inserting ``$25,090'';
                (2) in subparagraph (C) by striking ``$48,600'' and
            inserting ``$69,678'';
                (3) in subparagraph (D) by striking ``$64,800'' and
            inserting ``$92,904'';
                (4) in subparagraph (E) by striking ``$16,200'' and
            inserting ``$23,226''; and
                (5) by realigning subparagraphs (C), (D), and (E) 2 ems to
            the left so that the left margins of such subparagraphs are
            aligned with the margins of subparagraphs (A) and (B).
        (b) Annual Indexing.--Subsection (b) of section 2 of the National
    Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions
    of this title, is further amended by adding at the end the following
    new paragraph:
                ``(9) Annual indexing of manufactured housing loans.--The
            Secretary shall develop a method of indexing in order to
            annually adjust the loan limits established in subparagraphs
            (A)(ii), (C), (D), and (E) of this subsection. Such index shall
            be based on the manufactured housing price data collected by
            the United States Census Bureau. The Secretary shall establish
            such index no later than 1 year after the date of the enactment
            of the FHA Manufactured Housing Loan Modernization Act of
            2008.''
        (c) Technical and Conforming Changes.--Paragraph (1) of section
    2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
                (1) by striking ``No'' and inserting ``Except as provided
            in the last sentence of this paragraph, no''; and
                (2) by adding after and below subparagraph (G) the
            following:
        ``The Secretary shall, by regulation, annually increase the dollar
    amount limitations in subparagraphs (A)(ii), (C), (D), and (E) (as such
    limitations may have been previously adjusted under this sentence) in
    accordance with the index established pursuant to paragraph (9).''.

    SEC. 2146. INSURANCE PREMIUMS.

        Subsection (f) of section 2 of the National Housing Act (12 U.S.C.
    1703(f)) is amended--
                (1) by inserting ``(1) Premium charges.--'' after ``(f)'';
            and
                (2) by adding at the end the following new paragraph:
        ``(2) Manufactured Home Loans.--Notwithstanding paragraph (1), in
    the case of a loan, advance of credit, or purchase in connection with a
    manufactured home or a lot on which to place such a home (or both), the
    premium charge for the insurance granted under this section shall be
    paid by the borrower under the loan or advance of credit, as follows:
                ``(A) At the time of the making of the loan, advance of
            credit, or purchase, a single premium payment in an amount not
            to exceed 2.25 percent of the amount of the original insured
            principal obligation.
                ``(B) In addition to the premium under subparagraph (A),
            annual premium payments during the term of the loan, advance,
            or obligation purchased in an amount not exceeding 1.0 percent
            of the remaining insured principal balance (excluding the
            portion of the remaining balance attributable to the premium
            collected under subparagraph (A) and without taking into
            account delinquent payments or prepayments).
                ``(C) Premium charges under this paragraph shall be
            established in amounts that are sufficient, but do not exceed
            the minimum amounts necessary, to maintain a negative credit
            subsidy for the program under this section for insurance of
            loans, advances of credit, or purchases in connection with a
            manufactured home or a lot on which to place such a home (or
            both), as determined based upon risk to the Federal Government
            under existing underwriting requirements.
                ``(D) The Secretary may increase the limitations on premium
            payments to percentages above those set forth in subparagraphs
            (A) and (B), but only if necessary, and not in excess of the
            minimum increase necessary, to maintain a negative credit
            subsidy as described in subparagraph (C).''.

    SEC. 2147. TECHNICAL CORRECTIONS.

        (a) Dates.--Subsection (a) of section 2 of the National Housing Act
    (12 U.S.C. 1703(a)) is amended--
                (1) by striking ``on and after July 1, 1939,'' each place
            such term appears; and
                (2) by striking ``made after the effective date of the
            Housing Act of 1954''.
        (b) Authority of Secretary.--Subsection (c) of section 2 of the
    National Housing Act (12 U.S.C. 1703(c)) is amended to read as follows:
        ``(c) Handling and Disposal of Property.--
                ``(1) Authority of secretary.--Notwithstanding any other
            provision of law, the Secretary may--
                        ``(A) deal with, complete, rent, renovate,
                    modernize, insure, or assign or sell at public or
                    private sale, or otherwise dispose of, for cash or
                    credit in the Secretary's discretion, and upon such
                    terms and conditions and for such consideration as the
                    Secretary shall determine to be reasonable, any real or
                    personal property conveyed to or otherwise acquired by
                    the Secretary, in connection with the payment of
                    insurance heretofore or hereafter granted under this
                    title, including any evidence of debt, contract, claim,
                    personal property, or security assigned to or held by
                    him in connection with the payment of insurance
                    heretofore or hereafter granted under this section; and
                        ``(B) pursue to final collection, by way of
                    compromise or otherwise, all claims assigned to or held
                    by the Secretary and all legal or equitable rights
                    accruing to the Secretary in connection with the
                    payment of such insurance, including unpaid insurance
                    premiums owed in connection with insurance made
                    available by this title.
                ``(2) Advertisements for proposals.--Section 3709 of the
            Revised Statutes shall not be construed to apply to any
            contract of hazard insurance or to any purchase or contract for
            services or supplies on account of such property if the amount
            thereof does not exceed $25,000.
                ``(3) Delegation of authority.--The power to convey and to
            execute in the name of the Secretary, deeds of conveyance,
            deeds of release, assignments and satisfactions of mortgages,
            and any other written instrument relating to real or personal
            property or any interest therein heretofore or hereafter
            acquired by the Secretary pursuant to the provisions of this
            title may be exercised by an officer appointed by the Secretary
            without the execution of any express delegation of power or
            power of attorney. Nothing in this subsection shall be
            construed to prevent the Secretary from delegating such power
            by order or by power of attorney, in the Secretary's
            discretion, to any officer or agent the Secretary may
            appoint.''.

    SEC. 2148. REVISION OF UNDERWRITING CRITERIA.

        (a) In General.--Subsection (b) of section 2 of the National
    Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions
    of this title, is further amended by adding at the end the following
    new paragraph:
                ``(10) Financial soundness of manufactured housing
            program.--The Secretary shall establish such underwriting
            criteria for loans and advances of credit in connection with a
            manufactured home or a lot on which to place a manufactured
            home (or both), including such loans and advances represented
            by obligations purchased by financial institutions, as may be
            necessary to ensure that the program under this title for
            insurance for financial institutions against losses from such
            loans, advances of credit, and purchases is financially
            sound.''.
        (b) Timing.--Not later than the expiration of the 6-month period
    beginning on the date of the enactment of this title, the Secretary of
    Housing and Urban Development shall revise the existing underwriting
    criteria for the program referred to in paragraph (10) of section 2(b)
    of the National Housing Act (as added by subsection (a) of this
    section) in accordance with the requirements of such paragraph.

    SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

        Title I of the National Housing Act is amended by adding at the end
    of section 9 the following new section:

    ``SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

        ``(a) In General.--Except as provided in subsection (b), the
    provisions of sections 3, 8, 16, 17, 18, and 19 of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall apply
    to each sale of a manufactured home financed with an FHA-insured loan
    or extension of credit, as well as to services rendered in connection
    with such transactions.
        ``(b) Authority of the Secretary.--The Secretary is authorized to
    determine the manner and extent to which the provisions of sections 3,
    8, 16, 17, 18, and 19 of the Real Estate Settlement Procedures Act of
    1974 (12 U.S.C. 2601 et seq.) may reasonably be applied to the
    transactions described in subsection (a), and to grant such exemptions
    as may be necessary to achieve the purposes of this section.
        ``(c) Definitions.--For purposes of this section--
                ``(1) the term `federally related mortgage loan' as used in
            sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement
            Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include
            an FHA-insured loan or extension of credit made to a borrower
            for the purpose of purchasing a manufactured home that the
            borrower intends to occupy as a personal residence; and
                ``(2) the term `real estate settlement service' as used in
            sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement
            Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include
            any service rendered in connection with a loan or extension of
            credit insured by the Federal Housing Administration for the
            purchase of a manufactured home.
        ``(d) Unfair and Deceptive Practices.--In connection with the
    purchase of a manufactured home financed with a loan or extension of
    credit insured by the Federal Housing Administration under this title,
    the Secretary shall prohibit acts or practices in connection with loans
    or extensions of credit that the Secretary finds to be unfair,
    deceptive, or otherwise not in the interests of the borrower.''.

    SEC. 2150. LEASEHOLD REQUIREMENTS.

        Subsection (b) of section 2 of the National Housing Act (12 U.S.C.
    1703(b)), as amended by the preceding provisions of this title, is
    further amended by adding at the end the following new paragraph:
                ``(11) Leasehold requirements.--No insurance shall be
            granted under this section to any such financial institution
            with respect to any obligation representing any such loan,
            advance of credit, or purchase by it, made for the purposes of
            financing a manufactured home which is intended to be situated
            in a manufactured home community pursuant to a lease, unless
            such lease--
                        ``(A) expires not less than 3 years after the
                    origination date of the obligation;
                        ``(B) is renewable upon the expiration of the
                    original 3 year term by successive 1 year terms; and
                        ``(C) requires the lessor to provide the lessee
                    written notice of termination of the lease not less
                    than 180 days prior to the expiration of the current
                    lease term in the event the lessee is required to move
                    due to the closing of the manufactured home community,
                    and further provides that failure to provide such
                    notice to the mortgagor in a timely manner will cause
                    the lease term, at its expiration, to automatically
                    renew for an additional 1 year term.''.

         TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

    SEC. 2201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR
                  CERTAIN HOUSING LOANS GUARANTEED BY THE SECRETARY OF
                  VETERANS AFFAIRS.

        Notwithstanding subparagraph (C) of section 3703(a)(1) of title 38,
    United States Code, for purposes of any loan described in subparagraph
    (A)(i)(IV) of such section that is originated during the period
    beginning on the date of the enactment of this Act and ending on
    December 31, 2008, the term ``maximum guaranty amount'' shall mean an
    amount equal to 25 percent of the higher of--
                (1) the limitation determined under section 305(a)(2) of
            the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
            1454(a)(2)) for the calendar year in which the loan is
            originated for a single-family residence; or
                (2) 125 percent of the area median price for a single-
            family residence, but in no case to exceed 175 percent of the
            limitation determined under such section 305(a)(2) for the
            calendar year in which the loan is originated for a single-
            family residence.

    SEC. 2202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF THE ARMED
                  FORCES RETURNING FROM SERVICE ABROAD.

        (a) In General.--The Secretary of Defense shall develop and
    implement a program to advise members of the Armed Forces (including
    members of the National Guard and Reserve) who are returning from
    service on active duty abroad (including service in Operation Iraqi
    Freedom and Operation Enduring Freedom) on actions to be taken by such
    members to prevent or forestall mortgage foreclosures.
        (b) Elements.--The program required by subsection (a) shall include
    the following:
                (1) Credit counseling.
                (2) Home mortgage counseling.
                (3) Such other counseling and information as the Secretary
            considers appropriate for purposes of the program.
        (c) Timing of Provision of Counseling.--Counseling and other
    information under the program required by subsection (a) shall be
    provided to a member of the Armed Forces covered by the program as soon
    as practicable after the return of the member from service as described
    in subsection (a).

    SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS RELATING TO
                  MORTGAGES AND MORTGAGE FORECLOSURES.

        (a) Extension of Period of Protections Against Mortgage
    Foreclosures.--
                (1) Extension of protection period.--Subsection (c) of
            section 303 of the Servicemembers Civil Relief Act (50 U.S.C.
            App. 533) is amended by striking ``90 days'' and inserting ``9
            months''.
                (2) Extension of stay of proceedings period.--Subsection
            (b) of such section is amended by striking ``90 days'' and
            inserting ``9 months''.
        (b) Treatment of Mortgages as Obligations Subject to Interest Rate
    Limitation.--Section 207 of the Servicemembers Civil Relief Act (50
    U.S.C. App. 527) is amended--
                (1) in subsection (a)(1), by striking ``in excess of 6
            percent'' the second place it appears and all that follows and
            inserting ``in excess of 6 percent--
                        ``(A) during the period of military service and one
                    year thereafter, in the case of an obligation or
                    liability consisting of a mortgage, trust deed, or
                    other security in the nature of a mortgage; or
                        ``(B) during the period of military service, in the
                    case of any other obligation or liability.''; and
                (2) by striking subsection (d) and inserting the following
            new subsection:
        ``(d) Definitions.--In this section:
                ``(1) Interest.--The term `interest' includes service
            charges, renewal charges, fees, or any other charges (except
            bona fide insurance) with respect to an obligation or
            liability.
                ``(2) Obligation or liability.--The term `obligation or
            liability' includes an obligation or liability consisting of a
            mortgage, trust deed, or other security in the nature of a
            mortgage.''.
        (c) Effective Date; Sunset.--
                (1) Effective date.--The amendment made by subsection (a)
            shall take effect on the date of enactment of this Act.
                (2) Sunset.--The amendments made by subsection (a) shall
            expire on December 31, 2010. Effective January 1, 2011, the
            provisions of subsections (b) and (c) of section 303 of the
            Servicemembers Civil Relief Act, as in effect on the day before
            the date of the enactment of this Act, are hereby revived.

    TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
                                FORECLOSED HOMES

    SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
                  FORECLOSED HOMES.

        (a) Direct Appropriations.--There are appropriated out of any money
    in the Treasury not otherwise appropriated for the fiscal year 2008,
    $4,000,000,000, to remain available until expended, for assistance to
    States and units of general local government (as such terms are defined
    in section 102 of the Housing and Community Development Act of 1974 (42
    U.S.C. 5302)) for the redevelopment of abandoned and foreclosed upon
    homes and residential properties.
        (b) Allocation of Appropriated Amounts.--
                (1) In general.--The amounts appropriated or otherwise made
            available to States and units of general local government under
            this section shall be allocated based on a funding formula
            established by the Secretary of Housing and Urban Development
            (in this title referred to as the ``Secretary'').
                (2) Formula to be devised swiftly.--The funding formula
            required under paragraph (1) shall be established not later
            than 60 days after the date of enactment of this section.
                (3) Criteria.--The funding formula required under paragraph
            (1) shall ensure that any amounts appropriated or otherwise
            made available under this section are allocated to States and
            units of general local government with the greatest need, as
            such need is determined in the discretion of the Secretary
            based on--
                        (A) the number and percentage of home foreclosures
                    in each State or unit of general local government;
                        (B) the number and percentage of homes financed by
                    a subprime mortgage related loan in each State or unit
                    of general local government; and
                        (C) the number and percentage of homes in default
                    or delinquency in each State or unit of general local
                    government.
                (4) Distribution.--Amounts appropriated or otherwise made
            available under this section shall be distributed according to
            the funding formula established by the Secretary under
            paragraph (1) not later than 30 days after the establishment of
            such formula.
        (c) Use of Funds.--
                (1) In general.--Any State or unit of general local
            government that receives amounts pursuant to this section
            shall, not later than 18 months after the receipt of such
            amounts, use such amounts to purchase and redevelop abandoned
            and foreclosed homes and residential properties.
                (2) Priority.--Any State or unit of general local
            government that receives amounts pursuant to this section shall
            in distributing such amounts give priority emphasis and
            consideration to those metropolitan areas, metropolitan cities,
            urban areas, rural areas, low- and moderate-income areas, and
            other areas with the greatest need, including those--
                        (A) with the greatest percentage of home
                    foreclosures;
                        (B) with the highest percentage of homes financed
                    by a subprime mortgage related loan; and
                        (C) identified by the State or unit of general
                    local government as likely to face a significant rise
                    in the rate of home foreclosures.
                (3) Eligible uses.--Amounts made available under this
            section may be used to--
                        (A) establish financing mechanisms for purchase and
                    redevelopment of foreclosed upon homes and residential
                    properties, including such mechanisms as soft-seconds,
                    loan loss reserves, and shared-equity loans for low-
                    and moderate-income homebuyers;
                        (B) purchase and rehabilitate homes and residential
                    properties that have been abandoned or foreclosed upon,
                    in order to sell, rent, or redevelop such homes and
                    properties;
                        (C) establish land banks for homes that have been
                    foreclosed upon;
                        (D) demolish blighted structures; and
                        (E) redevelop demolished or vacant properties.
        (d) Limitations.--
                (1) On purchases.--Any purchase of a foreclosed upon home
            or residential property under this section shall be at a
            discount from the current market appraised value of the home or
            property, taking into account its current condition, and such
            discount shall ensure that purchasers are paying below-market
            value for the home or property.
                (2) Rehabilitation.--Any rehabilitation of a foreclosed-
            upon home or residential property under this section shall be
            to the extent necessary to comply with applicable laws, codes,
            and other requirements relating to housing safety, quality, and
            habitability, in order to sell, rent, or redevelop such homes
            and properties. Rehabilitation may include improvements to
            increase the energy efficiency or conservation of such homes
            and properties or provide a renewable energy source or sources
            for such homes and properties.
                (3) Sale of homes.--If an abandoned or foreclosed upon home
            or residential property is purchased, redeveloped, or otherwise
            sold to an individual as a primary residence, then such sale
            shall be in an amount equal to or less than the cost to acquire
            and redevelop or rehabilitate such home or property up to a
            decent, safe, and habitable condition.
                (4) Reinvestment of profits.--
                        (A) Profits from sales, rentals, and
                    redevelopment.--
                                (i) 5-year reinvestment period.--During the
                            5-year period following the date of enactment
                            of this Act, any revenue generated from the
                            sale, rental, redevelopment, rehabilitation, or
                            any other eligible use that is in excess of the
                            cost to acquire and redevelop (including
                            reasonable development fees) or rehabilitate an
                            abandoned or foreclosed upon home or
                            residential property shall be provided to and
                            used by the State or unit of general local
                            government in accordance with, and in
                            furtherance of, the intent and provisions of
                            this section.
                                (ii) Deposits in the treasury.--
                                        (I) Profits.--Upon the expiration
                                    of the 5-year period set forth under
                                    clause (i), any revenue generated from
                                    the sale, rental, redevelopment,
                                    rehabilitation, or any other eligible
                                    use that is in excess of the cost to
                                    acquire and redevelop (including
                                    reasonable development fees) or
                                    rehabilitate an abandoned or foreclosed
                                    upon home or residential property shall
                                    be deposited in the Treasury of the
                                    United States as miscellaneous
                                    receipts, unless the Secretary approves
                                    a request to use the funds for purposes
                                    under this Act.
                                        (II) Other amounts.--Upon the
                                    expiration of the 5-year period set
                                    forth under clause (i), any other
                                    revenue not described under subclause
                                    (I) generated from the sale, rental,
                                    redevelopment, rehabilitation, or any
                                    other eligible use of an abandoned or
                                    foreclosed upon home or residential
                                    property shall be deposited in the
                                    Treasury of the United States as
                                    miscellaneous receipts.
                        (B) Other revenues.--Any revenue generated under
                    subparagraphs (A), (C) or (D) of subsection (c)(3)
                    shall be provided to and used by the State or unit of
                    general local government in accordance with, and in
                    furtherance of, the intent and provisions of this
                    section.
        (e) Rules of Construction.--
                (1) In general.--Except as otherwise provided by this
            section, amounts appropriated, revenues generated, or amounts
            otherwise made available to States and units of general local
            government under this section shall be treated as though such
            funds were community development block grant funds under title
            I of the Housing and Community Development Act of 1974 (42
            U.S.C. 5301 et seq.).
                (2) No match.--No matching funds shall be required in order
            for a State or unit of general local government to receive any
            amounts under this section.
        (f) Authority to Specify Alternative Requirements.--
                (1) In general.--In administering any amounts appropriated
            or otherwise made available under this section, the Secretary
            may specify alternative requirements to any provision under
            title I of the Housing and Community Development Act of 1974
            (except for those related to fair housing, nondiscrimination,
            labor standards, and the environment) in accordance with the
            terms of this section and for the sole purpose of expediting
            the use of such funds.
                (2) Notice.--The Secretary shall provide written notice of
            its intent to exercise the authority to specify alternative
            requirements under paragraph (1) to the Committee on Banking,
            Housing and Urban Affairs of the Senate and the Committee on
            Financial Services of the House of Representatives not later
            than 10 business days before such exercise of authority is to
            occur.
                (3) Low and moderate income requirement.--
                        (A) In general.--Notwithstanding the authority of
                    the Secretary under paragraph (1)--
                                (i) all of the funds appropriated or
                            otherwise made available under this section
                            shall be used with respect to individuals and
                            families whose income does not exceed 120
                            percent of area median income; and
                                (ii) not less than 25 percent of the funds
                            appropriated or otherwise made available under
                            this section shall be used for the purchase and
                            redevelopment of abandoned or foreclosed upon
                            homes or residential properties that will be
                            used to house individuals or families whose
                            incomes do not exceed 50 percent of area median
                            income.
                        (B) Recurrent requirement.--The Secretary shall, by
                    rule or order, ensure, to the maximum extent
                    practicable and for the longest feasible term, that the
                    sale, rental, or redevelopment of abandoned and
                    foreclosed upon homes and residential properties under
                    this section remain affordable to individuals or
                    families described in subparagraph (A).
        (g) Periodic Audits.--In consultation with the Secretary of Housing
    and Urban Development, the Comptroller General of the United States
    shall conduct periodic audits to ensure that funds appropriated, made
    available, or otherwise distributed under this section are being used
    in a manner consistent with the criteria provided in this section.

    SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

        Notwithstanding any other provision of this Act or the amendments
    made by this Act, each State shall receive not less than 0.5 percent of
    funds made available under section 2301 (relating to emergency
    assistance for the redevelopment of abandoned and foreclosed homes).

    SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT DOMAIN.

        No State or unit of general local government may use any amounts
    received pursuant to section 2301 to fund any project that seeks to use
    the power of eminent domain, unless eminent domain is employed only for
    a public use: Provided, That for purposes of this section, public use
    shall not be construed to include economic development that primarily
    benefits private entities.

    SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

        (a) In General.--None of the funds made available under this title
    or title IV shall be distributed to--
                (1) an organization which has been indicted for a violation
            under Federal law relating to an election for Federal office;
            or
                (2) an organization which employs applicable individuals.
        (b) Applicable Individuals Defined.--In this section, the term
    ``applicable individual'' means an individual who--
                (1) is--
                        (A) employed by the organization in a permanent or
                    temporary capacity;
                        (B) contracted or retained by the organization; or
                        (C) acting on behalf of, or with the express or
                    apparent authority of, the organization; and
                (2) has been indicted for a violation under Federal law
            relating to an election for Federal office.

    SEC. 2305. COUNSELING INTERMEDIARIES.

        Notwithstanding any other provision of this Act, the amount
    appropriated under section 2301(a) of this Act shall be $3,920,000,000
    and the amount appropriated under section 2401 of this Act shall be
    $180,000,000: Provided, That of the amount appropriated under section
    2401 of this Act pursuant to this section, not less than 15 percent
    shall be provided to counseling organizations that target counseling
    services regarding loss mitigation to minority and low-income
    homeowners or provide such services in neighborhoods with high
    concentrations of minority and low-income homeowners: Provided further,
    That of amounts appropriated under such section 2401 $30,000,000 shall
    be used by the Neighborhood Reinvestment Corporation (referred to in
    this section as the ``NRC'') to make grants to counseling
    intermediaries approved by the Department of Housing and Urban
    Development or the NRC to hire attorneys to assist homeowners who have
    legal issues directly related to the homeowner's foreclosure,
    delinquency or short sale. Such attorneys shall be capable of assisting
    homeowners of owner-occupied homes with mortgages in default, in danger
    of default, or subject to or at risk of foreclosure and who have legal
    issues that cannot be handled by counselors already employed by such
    intermediaries: Provided further, That of the amounts provided for in
    the prior provisos the NRC shall give priority consideration to
    counseling intermediaries and legal organizations that (1) provide
    legal assistance in the 100 metropolitan statistical areas (as defined
    by the Director of the Office of Management and Budget) with the
    highest home foreclosure rates, and (2) have the capacity to begin
    using the financial assistance within 90 days after receipt of the
    assistance: Provided further, That no funds provided under this Act
    shall be used to provide, obtain, or arrange on behalf of a homeowner,
    legal representation involving or for the purposes of civil litigation:
    Provided further, That the NRC, in awarding counseling grants under
    section 2401 of this Act, may consider, where appropriate, whether the
    entity has implemented a written plan for providing in-person
    counseling and for making contact, including personal contact, with
    defaulted mortgagors, for the purpose of providing counseling or
    providing information about available counseling.

                     TITLE IV--HOUSING COUNSELING RESOURCES

    SEC. 2401. HOUSING COUNSELING RESOURCES.

        There are appropriated out of any money in the Treasury not
    otherwise appropriated for the fiscal year 2008, for an additional
    amount for the ``Neighborhood Reinvestment Corporation--Payment to the
    Neighborhood Reinvestment Corporation'' $100,000,000, to remain
    available until December 31, 2008, for foreclosure mitigation
    activities under the terms and conditions contained in the second
    undesignated paragraph (beginning with the phrase ``For an additional
    amount'') under the heading ``Neighborhood Reinvestment Corporation--
    Payment to the Neighborhood Reinvestment Corporation'' of Public Law
    110-161.

    SEC. 2402. CREDIT COUNSELING.

        (a) In General.--Entities approved by the Neighborhood Reinvestment
    Corporation or the Secretary and State housing finance entities
    receiving funds under this title shall work to identify and coordinate
    with non-profit organizations operating national or statewide toll-free
    foreclosure prevention hotlines, including those that--
                (1) serve as a consumer referral source and data repository
            for borrowers experiencing some form of delinquency or
            foreclosure;
                (2) connect callers with local housing counseling agencies
            approved by the Neighborhood Reinvestment Corporation or the
            Secretary to assist with working out a positive resolution to
            their mortgage delinquency or foreclosure; or
                (3) facilitate or offer free assistance to help homeowners
            to understand their options, negotiate solutions, and find the
            best resolution for their particular circumstances.

                  TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

    SEC. 2501. SHORT TITLE.

        This title may be cited as the ``Mortgage Disclosure Improvement
    Act of 2008''.

    SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.

        (a) Truth in Lending Act Disclosures.--Section 128(b)(2) of the
    Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
                (1) by inserting ``(A)'' before ``In the'';
                (2) by striking ``a residential mortgage transaction, as
            defined in section 103(w)'' and inserting ``any extension of
            credit that is secured by the dwelling of a consumer'';
                (3) by striking ``before the credit is extended, or'' and
            inserting ``and'';
                (4) by inserting ``, which shall be at least 7 business
            days before consummation of the transaction'' after ``written
            application'';
                (5) by striking ``, whichever is earlier''; and
                (6) by striking ``If the'' and all that follows through the
            end of the paragraph and inserting the following:
                ``(B) In the case of an extension of credit that is secured
            by the dwelling of a consumer, the disclosures provided under
            subparagraph (A), shall be in addition to the other disclosures
            required by subsection (a), and shall--
                        ``(i) state in conspicuous type size and format,
                    the following: `You are not required to complete this
                    agreement merely because you have received these
                    disclosures or signed a loan application.'; and
                        ``(ii) be provided in the form of final disclosures
                    at the time of consummation of the transaction, in the
                    form and manner prescribed by this section.
                ``(C) In the case of an extension of credit that is secured
            by the dwelling of a consumer, under which the annual rate of
            interest is variable, or with respect to which the regular
            payments may otherwise be variable, in addition to the other
            disclosures required by subsection (a), the disclosures
            provided under this subsection shall do the following:
                        ``(i) Label the payment schedule as follows:
                    `Payment Schedule: Payments Will Vary Based on Interest
                    Rate Changes'.
                        ``(ii) State in conspicuous type size and format
                    examples of adjustments to the regular required payment
                    on the extension of credit based on the change in the
                    interest rates specified by the contract for such
                    extension of credit. Among the examples required to be
                    provided under this clause is an example that reflects
                    the maximum payment amount of the regular required
                    payments on the extension of credit, based on the
                    maximum interest rate allowed under the contract, in
                    accordance with the rules of the Board. Prior to
                    issuing any rules pursuant to this clause, the Board
                    shall conduct consumer testing to determine the
                    appropriate format for providing the disclosures
                    required under this subparagraph to consumers so that
                    such disclosures can be easily understood, including
                    the fact that the initial regular payments are for a
                    specific time period that will end on a certain date,
                    that payments will adjust afterwards potentially to a
                    higher amount, and that there is no guarantee that the
                    borrower will be able to refinance to a lower amount.
                ``(D) In any case in which the disclosure statement under
            subparagraph (A) contains an annual percentage rate of interest
            that is no longer accurate, as determined under section 107(c),
            the creditor shall furnish an additional, corrected statement
            to the borrower, not later than 3 business days before the date
            of consummation of the transaction.
                ``(E) The consumer shall receive the disclosures required
            under this paragraph before paying any fee to the creditor or
            other person in connection with the consumer's application for
            an extension of credit that is secured by the dwelling of a
            consumer. If the disclosures are mailed to the consumer, the
            consumer is considered to have received them 3 business days
            after they are mailed. A creditor or other person may impose a
            fee for obtaining the consumer's credit report before the
            consumer has received the disclosures under this paragraph,
            provided the fee is bona fide and reasonable in amount.
                ``(F) Waiver of timeliness of disclosures.--To expedite
            consummation of a transaction, if the consumer determines that
            the extension of credit is needed to meet a bona fide personal
            financial emergency, the consumer may waive or modify the
            timing requirements for disclosures under subparagraph (A),
            provided that--
                        ``(i) the term `bona fide personal emergency' may
                    be further defined in regulations issued by the Board;
                        ``(ii) the consumer provides to the creditor a
                    dated, written statement describing the emergency and
                    specifically waiving or modifying those timing
                    requirements, which statement shall bear the signature
                    of all consumers entitled to receive the disclosures
                    required by this paragraph; and
                        ``(iii) the creditor provides to the consumers at
                    or before the time of such waiver or modification, the
                    final disclosures required by paragraph (1).
                ``(G) The requirements of subparagraphs (B), (C), (D) and
            (E) shall not apply to extensions of credit relating to plans
            described in section 101(53D) of title 11, United States
            Code.''.
        (b) Civil Liability.--Section 130(a) of the Truth in Lending Act
    (15 U.S.C. 1640(a)) is amended--
                (1) in paragraph (2)(A)(iii), by striking ``not less than
            $200 or greater than $2,000'' and inserting ``not less than
            $400 or greater than $4,000''; and
                (2) in the penultimate sentence of the undesignated matter
            following paragraph (4)--
                        (A) by inserting ``or section 128(b)(2)(C)(ii),''
                    after ``128(a),''; and
                        (B) by inserting ``or section 128(b)(2)(C)(ii)''
                    before the period.
        (c) Effective Dates.--
                (1) General disclosures.--Except as provided in paragraph
            (2), the amendments made by subsection (a) shall become
            effective 12 months after the date of enactment of this Act.
                (2) Variable interest rates.--Subparagraph (C) of section
            128(b)(2) of the Truth in Lending Act (15 U.S.C.
            1638(b)(2)(C)), as added by subsection (a) of this section,
            shall become effective on the earlier of--
                        (A) the compliance date established by the Board
                    for such purpose, by regulation; or
                        (B) 30 months after the date of enactment of this
                    Act.

    SEC. 2503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR DEPOSITORY
                  INSTITUTIONS.

        (a) National Banks.--The first sentence of the paragraph designated
    as the ``Eleventh'' of section 5136 of the Revised Statutes of the
    United States (12 U.S.C. 24) is amended by striking ``promotes the
    public welfare by benefitting primarily'' and inserting ``is designed
    primarily to promote the public welfare, including the welfare of''.
        (b) State Member Banks.--The first sentence of the 23rd paragraph
    of section 9 of the Federal Reserve Act (12 U.S.C. 338a) is amended by
    striking ``promotes the public welfare by benefitting primarily'' and
    inserting ``is designed primarily to promote the public welfare,
    including the welfare of''.

                       TITLE VI--VETERANS HOUSING MATTERS

    SEC. 2601. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR TOTALLY
                  DISABLED MEMBERS OF THE ARMED FORCES BEFORE DISCHARGE OR
                  RELEASE FROM THE ARMED FORCES.

        Section 1717 of title 38, United States Code, is amended by adding
    at the end the following new subsection:
        ``(d)(1) In the case of a member of the Armed Forces who, as
    determined by the Secretary, has a disability permanent in nature
    incurred or aggravated in the line of duty in the active military,
    naval, or air service, the Secretary may furnish improvements and
    structural alterations for such member for such disability or as
    otherwise described in subsection (a)(2) while such member is
    hospitalized or receiving outpatient medical care, services, or
    treatment for such disability if the Secretary determines that such
    member is likely to be discharged or released from the Armed Forces for
    such disability.
        ``(2) The furnishing of improvements and alterations under
    paragraph (1) in connection with the furnishing of medical services
    described in subparagraph (A) or (B) of subsection (a)(2) shall be
    subject to the limitation specified in the applicable subparagraph.''.

    SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS AND
                  ASSISTANCE FOR MEMBERS OF THE ARMED FORCES WITH SERVICE-
                  CONNECTED DISABILITIES AND INDIVIDUALS RESIDING OUTSIDE
                  THE UNITED STATES.

        (a) Eligibility.--Chapter 21 of title 38, United States Code, is
    amended by inserting after section 2101 the following new section:
    ``Sec. 2101A. Eligibility for benefits and assistance: members of the
                  Armed Forces with service-connected disabilities;
                  individuals residing outside the United States
        ``(a) Members With Service-Connected Disabilities.--(1) The
    Secretary may provide assistance under this chapter to a member of the
    Armed Forces serving on active duty who is suffering from a disability
    that meets applicable criteria for benefits under this chapter if the
    disability is incurred or aggravated in line of duty in the active
    military, naval, or air service. Such assistance shall be provided to
    the same extent as assistance is provided under this chapter to
    veterans eligible for assistance under this chapter and subject to the
    same requirements as veterans under this chapter.
        ``(2) For purposes of this chapter, any reference to a veteran or
    eligible individual shall be treated as a reference to a member of the
    Armed Forces described in subsection (a) who is similarly situated to
    the veteran or other eligible individual so referred to.
        ``(b) Benefits and Assistance for Individuals Residing Outside the
    United States.--(1) Subject to paragraph (2), the Secretary may, at the
    Secretary's discretion, provide benefits and assistance under this
    chapter (other than benefits under section 2106 of this title) to any
    individual otherwise eligible for such benefits and assistance who
    resides outside the United States.
        ``(2) The Secretary may provide benefits and assistance to an
    individual under paragraph (1) only if--
                ``(A) the country or political subdivision in which the
            housing or residence involved is or will be located permits the
            individual to have or acquire a beneficial property interest
            (as determined by the Secretary) in such housing or residence;
            and
                ``(B) the individual has or will acquire a beneficial
            property interest (as so determined) in such housing or
            residence.
        ``(c) Regulations.--Benefits and assistance under this chapter by
    reason of this section shall be provided in accordance with such
    regulations as the Secretary may prescribe.''.
        (b) Conforming Amendments.--
                (1) Repeal of superseded authority.--Section 2101 of title
            38, United States Code, is amended--
                        (A) by striking subsection (c); and
                        (B) by redesignating subsection (d) as subsection
                    (c).
                (2) Limitations on assistance.--Section 2102 of title 38,
            United States Code, is amended--
                        (A) in subsection (a)--
                                (i) by striking ``veteran'' each place it
                            appears and inserting ``individual''; and
                                (ii) in paragraph (3), by striking
                            ``veteran's'' and inserting ``individual's'';
                        (B) in subsection (b)(1), by striking ``a veteran''
                    and inserting ``an individual'';
                        (C) in subsection (c)--
                                (i) by striking ``a veteran'' and inserting
                            ``an individual''; and
                                (ii) by striking ``the veteran'' each place
                            it appears and inserting ``the individual'';
                            and
                        (D) in subsection (d), by striking ``a veteran''
                    each place it appears and inserting ``an individual''.
                (3) Assistance for individuals temporarily residing in
            housing of family member.--Section 2102A of title 38, United
            States Code, is amended--
                        (A) by striking ``veteran'' each place it appears
                    (other than in subsection (b)) and inserting
                    ``individual'';
                        (B) in subsection (a), by striking ``veteran's''
                    each place it appears and inserting ``individual's'';
                    and
                        (C) in subsection (b), by striking ``a veteran''
                    each place it appears and inserting ``an individual''.
                (4) Furnishing of plans and specifications.--Section 2103
            of title 38, United States Code, is amended by striking
            ``veterans'' both places it appears and inserting
            ``individuals''.
                (5) Construction of benefits.--Section 2104 of title 38,
            United States Code, is amended--
                        (A) in subsection (a), by striking ``veteran'' each
                    place it appears and inserting ``individual''; and
                        (B) in subsection (b)--
                                (i) in the first sentence, by striking ``A
                            veteran'' and inserting ``An individual'';
                                (ii) in the second sentence, by striking
                            ``a veteran'' and inserting ``an individual'';
                            and
                                (iii) by striking ``such veteran'' each
                            place it appears and inserting ``such
                            individual''.
                (6) Veterans' mortgage life insurance.--Section 2106 of
            title 38, United States Code, is amended--
                        (A) in subsection (a)--
                                (i) by striking ``any eligible veteran''
                            and inserting ``any eligible individual''; and
                                (ii) by striking ``the veterans''' and
                            inserting ``the individual's'';
                        (B) in subsection (b), by striking ``an eligible
                    veteran'' and inserting ``an eligible individual'';
                        (C) in subsection (e), by striking ``an eligible
                    veteran'' and inserting ``an individual'';
                        (D) in subsection (h), by striking ``each veteran''
                    and inserting ``each individual'';
                        (E) in subsection (i), by striking ``the
                    veteran's'' each place it appears and inserting ``the
                    individual's'';
                        (F) by striking ``the veteran'' each place it
                    appears and inserting ``the individual''; and
                        (G) by striking ``a veteran'' each place it appears
                    and inserting ``an individual''.
                (7) Heading amendments.--(A) The heading of section 2101 of
            title 38, United States Code, is amended to read as follows:
    ``Sec. 2101. Acquisition and adaptation of housing: eligible
                  veterans''.
                (B) The heading of section 2102A of such title is amended
            to read as follows:
    ``Sec. 2102A. Assistance for individuals residing temporarily in
                  housing owned by a family member''.
                (8) Clerical amendments.--The table of sections at the
            beginning of chapter 21 of title 38, United States Code, is
            amended--
                        (A) by striking the item relating to section 2101
                    and inserting the following new item:

    ``2101. Acquisition and adaptation of housing: eligible veterans.'';
                        (B) by inserting after the item relating to section
                    2101, as so amended, the following new item:

    ``2101A. Eligibility for benefits and assistance: members of the Armed
                                Forces with service-connected disabilities;
                                individuals residing outside the United
                                States.'';
                    and
                        (C) by striking the item relating to section 2102A
                    and inserting the following new item:

    ``2102A. Assistance for individuals residing temporarily in housing
                                owned by a family member.''.

    SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR INDIVIDUALS WITH
                  SEVERE BURN INJURIES.

        Section 2101 of title 38, United States Code, is amended--
                (1) in subsection (a)(2), by adding at the end the
            following new subparagraph:
                ``(E) The disability is due to a severe burn injury (as
            determined pursuant to regulations prescribed by the
            Secretary).''; and
                (2) in subsection (b)(2)--
                        (A) by striking ``either'' and inserting ``any'';
                    and
                        (B) by adding at the end the following new
                    subparagraph:
                ``(C) The disability is due to a severe burn injury (as so
            determined).''.

    SEC. 2604. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING TEMPORARILY
                  IN HOUSING OWNED BY A FAMILY MEMBER.

        Section 2102A(e) of title 38, United States Code, is amended by
    striking ``after the end of the five-year period that begins on the
    date of the enactment of the Veterans' Housing Opportunity and Benefits
    Improvement Act of 2006'' and inserting ``after December 31, 2011''.

    SEC. 2605. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR DISABLED
                  VETERANS.

        (a) In General.--Section 2102 of title 38, United States Code, is
    amended--
                (1) in subsection (b)(2), by striking ``$10,000'' and
            inserting ``$12,000'';
                (2) in subsection (d)--
                        (A) in paragraph (1), by striking ``$50,000'' and
                    inserting ``$60,000''; and
                        (B) in paragraph (2), by striking ``$10,000'' and
                    inserting ``$12,000''; and
                (3) by adding at the end the following new subsection:
        ``(e)(1) Effective on October 1 of each year (beginning in 2009),
    the Secretary shall increase the amounts described in subsection (b)(2)
    and paragraphs (1) and (2) of subsection (d) in accordance with this
    subsection.
        ``(2) The increase in amounts under paragraph (1) to take effect on
    October 1 of a year shall be by an amount of such amounts equal to the
    percentage by which--
                ``(A) the residential home cost-of-construction index for
            the preceding calendar year, exceeds
                ``(B) the residential home cost-of-construction index for
            the year preceding the year described in subparagraph (A).
        ``(3) The Secretary shall establish a residential home cost-of-
    construction index for the purposes of this subsection. The index shall
    reflect a uniform, national average change in the cost of residential
    home construction, determined on a calendar year basis. The Secretary
    may use an index developed in the private sector that the Secretary
    determines is appropriate for purposes of this subsection.''.
        (b) Effective Date.--The amendments made by this section shall take
    effect on July 1, 2008, and shall apply with respect to payments made
    in accordance with section 2102 of title 38, United States Code, on or
    after that date.

    SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED
                  INDIVIDUALS.

        (a) In General.--Not later than December 31, 2008, the Secretary of
    Veterans Affairs shall submit to the Committee on Veterans' Affairs of
    the Senate and the Committee on Veterans' Affairs of the House of
    Representatives a report that contains an assessment of the adequacy of
    the authorities available to the Secretary under law to assist eligible
    disabled individuals in acquiring--
                (1) suitable housing units with special fixtures or movable
            facilities required for their disabilities, and necessary land
            therefor;
                (2) such adaptations to their residences as are reasonably
            necessary because of their disabilities; and
                (3) residences already adapted with special features
            determined by the Secretary to be reasonably necessary as a
            result of their disabilities.
        (b) Focus on Particular Disabilities.--The report required by
    subsection (a) shall set forth a specific assessment of the needs of--
                (1) veterans who have disabilities that are not described
            in subsections (a)(2) and (b)(2) of section 2101 of title 38,
            United States Code; and
                (2) other disabled individuals eligible for specially
            adapted housing under chapter 21 of such title by reason of
            section 2101A of such title (as added by section 2602(a) of
            this Act) who have disabilities that are not described in such
            subsections.

    SEC. 2607. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR
                  INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A FAMILY
                  MEMBER ON PERMANENT BASIS.

        Not later than December 31, 2008, the Secretary of Veterans Affairs
    shall submit to the Committee on Veterans' Affairs of the Senate and
    the Committee on Veterans' Affairs of the House of Representatives a
    report on the advisability of providing assistance under section 2102A
    of title 38, United States Code, to veterans described in subsection
    (a) of such section, and to members of the Armed Forces covered by such
    section 2102A by reason of section 2101A of title 38, United States
    Code (as added by section 2602(a) of this Act), who reside with family
    members on a permanent basis.

    SEC. 2608. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF SECTION 8 AND
                  OTHER PUBLIC HOUSING PROGRAMS.

        Section 3(b)(4) of the United States Housing Act of 1937 (42 U.S.C.
    1437a(3)(b)(4)) is amended by inserting ``or any deferred Department of
    Veterans Affairs disability benefits that are received in a lump sum
    amount or in prospective monthly amounts'' before ``may not be
    considered''.

    SEC. 2609. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD EFFECTS
                  FOR MEMBERS OF THE ARMED FORCES WHO RELOCATE DUE TO
                  FORECLOSURE OF LEASED HOUSING.

        Section 406 of title 37, United States Code, is amended--
                (1) by redesignating subsections (k) and (l) as subsections
            (l) and (m), respectively; and
                (2) by inserting after subsection (j) the following new
            subsection (k):
        ``(k) A member of the armed forces who relocates from leased or
    rental housing by reason of the foreclosure of such housing is entitled
    to transportation of baggage and household effects under subsection
    (b)(1) in the same manner, and subject to the same conditions and
    limitations, as similarly circumstanced members entitled to
    transportation of baggage and household effects under that
    subsection.''.

      TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

    SEC. 2701. SHORT TITLE.

        This title may be cited as the ``Small Public Housing Authorities
    Paperwork Reduction Act''.

    SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN QUALIFIED PUBLIC
                  HOUSING AGENCIES.

        (a) In General.--Section 5A(b) of the United States Housing Act of
    1937 (42 U.S.C. 1437c-1(b)) is amended by adding at the end the
    following:
                ``(3) Exemption of certain phas from filing requirement.--
                        ``(A) In general.--Notwithstanding paragraph (1) or
                    any other provision of this Act--
                                ``(i) the requirement under paragraph (1)
                            shall not apply to any qualified public housing
                            agency; and
                                ``(ii) except as provided in subsection
                            (e)(4)(B), any reference in this section or any
                            other provision of law to a `public housing
                            agency' shall not be considered to refer to any
                            qualified public housing agency, to the extent
                            such reference applies to the requirement to
                            submit an annual public housing agency plan
                            under this subsection.
                        ``(B) Civil rights certification.--Notwithstanding
                    that qualified public housing agencies are exempt under
                    subparagraph (A) from the requirement under this
                    section to prepare and submit an annual public housing
                    plan, each qualified public housing agency shall, on an
                    annual basis, make the certification described in
                    paragraph (16) of subsection (d), except that for
                    purposes of such qualified public housing agencies,
                    such paragraph shall be applied by substituting `the
                    public housing program of the agency' for `the public
                    housing agency plan'.
                        ``(C) Definition.--For purposes of this section,
                    the term `qualified public housing agency' means a
                    public housing agency that meets the following
                    requirements:
                                ``(i) The sum of (I) the number of public
                            housing dwelling units administered by the
                            agency, and (II) the number of vouchers under
                            section 8(o) of the United States Housing Act
                            of 1937 (42 U.S.C. 1437f(o)) administered by
                            the agency, is 550 or fewer.
                                ``(ii) The agency is not designated under
                            section 6(j)(2) as a troubled public housing
                            agency, and does not have a failing score under
                            the section 8 Management Assessment Program
                            during the prior 12 months.''.
        (b) Resident Participation.--Section 5A of the United States
    Housing Act of 1937 (42 U.S.C. 1437c-1) is amended--
                (1) in subsection (e), by inserting after paragraph (3) the
            following:
                ``(4) Qualified public housing agencies.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), nothing in this section may be
                    construed to exempt a qualified public housing agency
                    from the requirement under paragraph (1) to establish 1
                    or more resident advisory boards. Notwithstanding that
                    qualified public housing agencies are exempt under
                    subsection (b)(3)(A) from the requirement under this
                    section to prepare and submit an annual public housing
                    plan, each qualified public housing agency shall
                    consult with, and consider the recommendations of the
                    resident advisory boards for the agency, at the annual
                    public hearing required under subsection (f)(5),
                    regarding any changes to the goals, objectives, and
                    policies of that agency.
                        ``(B) Applicability of waiver authority.--Paragraph
                    (3) shall apply to qualified public housing agencies,
                    except that for purposes of such qualified public
                    housing agencies, subparagraph (B) of such paragraph
                    shall be applied by substituting `the functions
                    described in the second sentence of paragraph (4)(A)'
                    for `the functions described in paragraph (2)'.
        ``(f) Public Hearings.--''; and
                (2) in subsection (f) (as so designated by the amendment
            made by paragraph (1)), by adding at the end the following:
                ``(5) Qualified public housing agencies.--
                        ``(A) Requirement.--Notwithstanding that qualified
                    public housing agencies are exempt under subsection
                    (b)(3)(A) from the requirement under this section to
                    conduct a public hearing regarding the annual public
                    housing plan of the agency, each qualified public
                    housing agency shall annually conduct a public
                    hearing--
                                ``(i) to discuss any changes to the goals,
                            objectives, and policies of the agency; and
                                ``(ii) to invite public comment regarding
                            such changes.
                        ``(B) Availability of information and notice.--Not
                    later than 45 days before the date of any hearing
                    described in subparagraph (A), a qualified public
                    housing agency shall--
                                ``(i) make all information relevant to the
                            hearing and any determinations of the agency
                            regarding changes to the goals, objectives, and
                            policies of the agency to be considered at the
                            hearing available for inspection by the public
                            at the principal office of the public housing
                            agency during normal business hours; and
                                ``(ii) publish a notice informing the
                            public that--
                                        ``(I) the information is available
                                    as required under clause (i); and
                                        ``(II) a public hearing under
                                    subparagraph (A) will be conducted.''.

                        TITLE VIII--HOUSING PRESERVATION

            Subtitle A--Preservation Under Federal Housing Programs

    SEC. 2801. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.

        Notwithstanding any other provision of law, subtitle A of title II
    of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z-11 note) and the
    amendments made by such title shall not apply to any transaction
    regarding a multifamily real property for which--
                (1) the Secretary of Housing and Urban Development has
            received, before the date of the enactment of such Act, written
            expressions of interest in purchasing the property from both a
            city government and the housing commission of such city;
                (2) after such receipt, the Secretary acquires title to the
            property at a foreclosure sale; and
                (3) such city government and housing commission have
            resolved a previous disagreement with respect to the
            disposition of the property.

    SEC. 2802. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED VOUCHER
                  ASSISTANCE.

        Notwithstanding any other provision of law--
                (1) the property known as The Heritage Apartments (FHA No.
            023-44804), in Malden, Massachusetts, shall be considered
            eligible low-income housing for purposes of the eligibility of
            residents of the property for enhanced voucher assistance under
            section 8(t) of the United States Housing Act of 1937 (42
            U.S.C. 1437f(t)), pursuant to paragraph (2)(A) of section
            223(f) of the Low-Income Housing Preservation and Resident
            Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
                (2) such residents shall receive enhanced rental housing
            vouchers upon the prepayment of the mortgage loan for the
            property under section 236 of the National Housing Act (12
            U.S.C. 1715z-1); and
                (3) the Secretary shall approve such prepayment and
            subsequent transfer of the property without any further
            condition, except that the property shall be restricted for
            occupancy, until the original maturity date of the prepaid
            mortgage loan, only by families with incomes not exceeding 80
            percent of the adjusted median income for the area in which the
            property is located, as published by the Secretary.
    Amounts for the enhanced vouchers pursuant to this section shall be
    provided under amounts appropriated for tenant-based rental assistance
    otherwise authorized under section 8(t) of the United States Housing
    Act of 1937.

    SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.

        (a) Transfer.--Subject to subsection (c) and notwithstanding any
    other provision of law, the Secretary of Housing and Urban Development
    shall, at the request of the owner, transfer or authorize the transfer,
    of the contracts, restrictions, and debt described in subsection (b)--
                (1) on the housing that is owned or managed by Community
            Properties of Ohio Management Services LLC or an affiliate of
            Ohio Capital Corporation for Housing and located in Franklin
            County, Ohio, to other properties located in Franklin County,
            Ohio; and
                (2) on the housing that is owned or managed by The Model
            Group, Inc., and located in Hamilton County, Ohio, to other
            properties located in Hamilton County, Ohio.
        (b) Contracts, Restrictions, and Debt Covered.--The contracts,
    restrictions, and debt described in this subsection are as follows:
                (1) All or a portion of a project-based rental assistance
            housing assistance payments contract under section 8 of the
            United States Housing Act of 1937 (42 U.S.C. 1437f).
                (2) Existing Federal use restrictions, including without
            limitation use agreements, regulatory agreements, and
            accommodation agreements.
                (3) Any subordinate debt held by the Secretary or assigned
            and any mortgages securing such debt, all related loan and
            security documentation and obligations, and reserve and escrow
            balances.
        (c) Retention of Same Number of Units and Amount of Assistance.--
    Any transfer pursuant to subsection (a) shall result in--
                (1) a total number of dwelling units (including units
            retained by the owners and units transferred) covered by
            assistance described in subsection (b)(1) after the transfer
            remaining the same as such number assisted before the transfer,
            with such increases or decreases in unit sizes as may be
            contained in a plan approved by a local planning or development
            commission or department; and
                (2) no reduction in the total amount of the housing
            assistance payments under contracts described in subsection
            (b)(1).

    SEC. 2804. PUBLIC HOUSING DISASTER RELIEF.

        Section 9 of the United States Housing Act of 1937 (42 U.S.C.
    1437g) is amended--
                (1) by striking subsection (k); and
                (2) by redesignating subsections (l), (m), and (n) as
            subsections (k), (l), and (m), respectively.

    SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING.

        Notwithstanding any other provision of law--
                (1) for the property known as Nihonmachi Terrace (FHA No.
            121-44284), in San Francisco, California, upon the refinancing
            of the existing federally insured mortgage pursuant to section
            236(b) of the National Housing Act (12 U.S.C. 1715z-1(b)),
            unassisted low and moderate-income residents of the property
            shall be deemed eligible for and shall receive voucher
            assistance under section 8(o) of the United States Housing Act
            of 1937 (42 U.S.C. 1437f(o)); and
                (2) to preserve the affordability of the property, the
            housing authority shall utilize such additional voucher
            assistance pursuant to subsection 8(o)(13) of the United States
            Housing Act of 1937, without regard to the limitations of
            subparagraphs (B) and (D) of that subsection.
    Amounts for the vouchers pursuant to this section shall be provided
    under amounts appropriated for tenant-based rental assistance otherwise
    authorized.

    Subtitle B--Coordination of Federal Housing Programs and Tax Incentives
                                  for Housing

    SEC. 2831. SHORT TITLE.

        This subtitle may be cited as the ``Housing Tax Credit Coordination
    Act of 2008''.

    SEC. 2832. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.

        (a) Administrative and Procedural Changes.--
                (1) In general.--The Secretary of Housing and Urban
            Development (in this section referred to as the ``Secretary'')
            shall, not later than the expiration of the 6-month period
            beginning upon after the date of the enactment of this Act,
            implement administrative and procedural changes to expedite
            approval of multifamily housing projects under the jurisdiction
            of the Department of Housing and Urban Development that meet
            the requirements of the Secretary for such approvals.
                (2) Projects.--The multifamily housing projects referred to
            in paragraph (1) shall include--
                        (A) projects for which assistance is provided by
                    such Department in conjunction with any low-income
                    housing tax credits under section 42 of the Internal
                    Revenue Code of 1986 or tax-exempt housing bonds; and
                        (B) existing public housing projects and assisted
                    housing projects, for which approval of the Secretary
                    is necessary for transactions, in conjunction with any
                    such low-income housing tax credits or tax-exempt
                    housing bonds, involving the preservation or
                    rehabilitation of the project.
                (3) Changes.--The administrative and procedural changes
            referred to in paragraph (1) shall include all actions
            necessary to carry out paragraph (1), which may include--
                        (A) improving the efficiency of approval
                    procedures;
                        (B) simplifying approval requirements,
                        (C) establishing time deadlines or target deadlines
                    for required approvals;
                        (D) modifying division of approval authority
                    between field and national offices;
                        (E) improving outreach to project sponsors
                    regarding information that is required to be submitted
                    for such approvals;
                        (F) requesting additional funding for increasing
                    staff, if necessary; and
                        (G) any other actions which would expedite
                    approvals.
            Any such changes shall be made in a manner that provides for
            full compliance with any existing requirements under law or
            regulation that are designed to protect families receiving
            public and assisted housing assistance, including income
            targeting, rent, and fair housing provisions, and shall also
            comply with requirements regarding environmental review and
            protection and wages paid to laborers.
        (b) Consultation.--The Secretary shall consult with the
    Commissioner of the Internal Revenue Service and take such actions as
    are appropriate in conjunction with such consultation to simplify the
    coordination of rules, regulations, forms, and approval requirements
    for multifamily housing projects projects for which assistance is
    provided by such Department in conjunction with any low-income housing
    tax credits under section 42 of the Internal Revenue Code of 1986 or
    tax-exempt housing bonds.
        (c) Recommendations.--In implementing the changes required under
    this section, the Secretary shall solicit recommendations regarding
    such changes from project owners and sponsors, investors and
    stakeholders in housing tax credits, State and local housing finance
    agencies, public housing agencies, tenant advocates, and other
    stakeholders in such projects.
        (d) Report.--Not later than the expiration of the 9-month period
    beginning on the date of the enactment of this Act, the Secretary shall
    submit a report to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate that--
                (1) identifies the actions taken by the Secretary to comply
            with this section;
                (2) includes information regarding any resulting
            improvements in the expedited approval for multifamily housing
            projects;
                (3) identifies recommendations made pursuant to subsection
            (c);
                (4) identifies actions taken by the Secretary to implement
            the provisions in the amendments made by sections 2834 and 2835
            of this Act; and
                (5) makes recommendations for any legislative changes that
            are needed to facilitate prompt approval of assistance for such
            projects.

    SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE.

        Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) is
    amended--
                (1) by inserting ``(1) Condition.--'' after ``(h)''; and
                (2) by adding at the end the following new paragraphs:
                ``(2) Actions to expedite project approvals.--
                        ``(A) In general.--The Secretary shall take actions
                    to facilitate timely approval of requests to transfer
                    ownership or control, for the purpose of rehabilitation
                    or preservation, of multifamily housing projects for
                    which assistance is provided by the Secretary of
                    Agriculture in conjunction with any low-income housing
                    tax credits under section 42 of the Internal Revenue
                    Code of 1986 or tax-exempt housing bonds.
                        ``(B) Consultation.--The Secretary of Agriculture
                    shall consult with the Commissioner of the Internal
                    Revenue Service and take such actions as are
                    appropriate in conjunction with such consultation to
                    simplify the coordination of rules, regulations, forms
                    (including applications forms for project transfers),
                    and approval requirements multifamily housing projects
                    for which assistance is provided by the Secretary of
                    Agriculture in conjunction with any low-income housing
                    tax credits under section 42 of the Internal Revenue
                    Code of 1986 or tax-exempt housing bonds.
                        ``(C) Existing requirements.--Any actions taken
                    pursuant to this paragraph shall be taken in a manner
                    that provides for full compliance with any existing
                    requirements under law or regulation that are designed
                    to protect families receiving Federal housing
                    assistance, including income targeting, rent, and fair
                    housing provisions, and shall also comply with
                    requirements regarding environmental review and
                    protection and wages paid to laborers.
                        ``(D) Recommendations.--In implementing the changes
                    required under this paragraph, the Secretary shall
                    solicit recommendations regarding such changes from
                    project owners and sponsors, investors and stakeholders
                    in housing tax credits, State and local housing finance
                    agencies, tenant advocates, and other stakeholders in
                    such projects.''.

    SEC. 2834. USE OF FHA LOANS WITH HOUSING TAX CREDITS.

        (a) Subsidy Layering Requirements.--Subsection (d) of section 102
    of the Department of Housing and Urban Development Reform Act of 1989
    (42 U.S.C. 3545(d)) is amended--
                (1) in the first sentence, by inserting after ``assistance
            within the jurisdiction of the Department'' the following: ``,
            as such term is defined in subsection (m), except that for
            purposes of this subsection such term shall not include any
            mortgage insurance provided pursuant to title II of the
            National Housing Act (12 U.S.C. 1707 et seq.)''; and
                (2) in the second sentence, by inserting ``such'' before
            ``assistance''.
        (b) Cost Certification.--Section 227 of National Housing Act (12
    U.S.C. 1715r) is amended--
                (1) in the matter preceding paragraph (a) (relating to a
            definition of ``new or rehabilitated multifamily housing'')--
                        (A) in the first sentence--
                                (i) by striking ``Notwithstanding'' and
                            inserting ``Except as provided in subsection
                            (b) and notwithstanding''; and
                                (ii) by redesignating clauses (a) and (b)
                            as clauses (A) and (B), respectively; and
                        (B) by striking ``As used in this section--'';
                (2) in paragraph (c) (relating to a definition of ``actual
            cost'')--
                        (A) in clause (i), by redesignating clauses (1) and
                    (2) as clauses (I) and (II), respectively; and
                        (B) in clause (ii), by redesignating clauses (1)
                    and (2) as clauses (I) and (II), respectively;
                (3) by redesignating paragraphs (a), (b), and (c) as
            paragraphs (1), (2), and (3), respectively;
                (4) by inserting before paragraph (1) (as so redesignated
            by paragraph (3) of this subsection) the following:
        ``(b) Exemption for Certain Projects Assisted With Low-Income
    Housing Tax Credit.--In the case of any mortgage insured under any
    provision of this title that is executed in connection with the
    construction, rehabilitation, purchase, or refinancing of a multifamily
    housing project for which equity provided through any low-income
    housing tax credit pursuant to section 42 of the Internal Revenue Code
    of 1986 (26 U.S.C. 42), if the Secretary determines at the time of
    issuance of the firm commitment for insurance that the ratio of the
    loan proceeds to the actual cost of the project is less than 80
    percent, subsection (a) of this section shall not apply.
        ``(c) Definitions.--For purposes of this section, the following
    definitions shall apply:''; and
                (5) by inserting ``(a) Requirement.--'' after ``227.''.
        (c) Other Provisions Regarding Treatment of Mortgages Covering Tax
    Credit Projects.--Title II of the National Housing Act is amended by
    inserting after section 227 (12 U.S.C. 1715r) the following new
    section:

    ``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT PROJECTS.

        ``(a) Definition.--For purposes of this section, the term `insured
    mortgage covering a tax credit project' means a mortgage insured under
    any provision of this title that is executed in connection with the
    construction, rehabilitation, purchase, or refinancing of a multifamily
    housing project for which equity provided through any low-income
    housing tax credit pursuant to section 42 of the Internal Revenue Code
    of 1986 (26 U.S.C. 42).
        ``(b) Acceptance of Letters of Credit.--In the case of an insured
    mortgage covering a tax credit project, the Secretary may not require
    the escrowing of equity provided by the sale of any low-income housing
    tax credits for the project pursuant to section 42 of the Internal
    Revenue Code of 1986, or any other form of security, such as a letter
    of credit.
        ``(c) Asset Management Requirements.--In the case of an insured
    mortgage covering a tax credit project for which project the applicable
    tax credit allocating agency is causing to be performed periodic
    inspections in compliance with the requirements of section 42 of the
    Internal Revenue Code of 1986, such project shall be exempt from
    requirements imposed by the Secretary regarding periodic inspections of
    the property by the mortgagee. To the extent that other compliance
    monitoring is being performed with respect to such a project by such an
    allocating agency pursuant to such section 42, the Secretary shall, to
    the extent that the Secretary determines such monitoring is sufficient
    to ensure compliance with any requirements established by the
    Secretary, accept such agency's evidence of compliance for purposes of
    determining compliance with the Secretary's requirements.
        ``(d) Streamlined Processing Pilot Program.--
                ``(1) In general.--The Secretary shall establish a pilot
            program to demonstrate the effectiveness of streamlining the
            review process, which shall include all applications for
            mortgage insurance under any provision of this title for
            mortgages executed in connection with the construction,
            rehabilitation, purchase, or refinancing of a multifamily
            housing project for which equity provided through any low-
            income housing tax credit pursuant to section 42 of the
            Internal Revenue Code of 1986. The Secretary shall issue
            instructions for implementing the pilot program under this
            subsection not later than the expiration of the 180-day period
            beginning upon the date of the enactment of the Housing Tax
            Credit Coordination Act of 2008.
                ``(2) Requirements.--Such pilot program shall provide for--
                        ``(A) the Secretary to appoint designated
                    underwriters, who shall be responsible for reviewing
                    such mortgage insurance applications and making
                    determinations regarding the eligibility of such
                    applications for such mortgage insurance in lieu of the
                    processing functions regarding such applications that
                    are otherwise performed by other employees of the
                    Department of Housing and Urban Development;
                        ``(B) submission of applications for such mortgage
                    insurance by mortgagees who have previously been
                    expressly approved by the Secretary; and
                        ``(C) determinations regarding the eligibility of
                    such applications for such mortgage insurance to be
                    made by the chief underwriter pursuant to requirements
                    prescribed by the Secretary, which shall include
                    requiring submission of reports regarding applications
                    of proposed mortgagees by third-party entities
                    expressly approved by the chief underwriter.''.

    SEC. 2835. OTHER HUD PROGRAMS.

        (a) Section 8 Assistance.--
                (1) PHA project-based assistance.--Section 8(o)(13) of the
            United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is
            amended--
                        (A) in subparagraph (D)(i)--
                                (i) by striking ``building'' and inserting
                            ``project''; and
                                (ii) by adding at the end the following:
                            ``For purposes of this subparagraph, the
                            term''project`` means a single building,
                            multiple contiguous buildings, or multiple
                            buildings on contiguous parcels of land.'';
                        (B) in the first sentence of subparagraph (F), by
                    striking ``10 years'' and inserting ``15 years'';
                        (C) in subparagraph (G)--
                                (i) by inserting after the period at the
                            end of the first sentence the following: ``Such
                            contract may, at the election of the public
                            housing agency and the owner of the structure,
                            specify that such contract shall be extended
                            for renewal terms of up to 15 years each, if
                            the agency makes the determination required by
                            this subparagraph and the owner is in
                            compliance with the terms of the contract.'';
                            and
                                (ii) by adding at the end the following:
                            ``A public housing agency may agree to enter
                            into such a contract at the time it enters into
                            the initial agreement for a housing assistance
                            payment contract or at any time thereafter that
                            is before the expiration of the housing
                            assistance payment contract.'';
                        (D) in subparagraph (H), by inserting before the
                    period at the end of the first sentence the following:
                    ``, except that in the case of a contract unit that has
                    been allocated low-income housing tax credits and for
                    which the rent limitation pursuant to such section 42
                    is less than the amount that would otherwise be
                    permitted under this subparagraph, the rent for such
                    unit may, in the sole discretion of a public housing
                    agency, be established at the higher section 8 rent,
                    subject only to paragraph (10)(A)'';
                        (E) in subparagraph (I)(i), by inserting before the
                    semicolon the following: ``, except that the contract
                    may provide that the maximum rent permitted for a
                    dwelling unit shall not be less than the initial rent
                    for the dwelling unit under the initial housing
                    assistance payments contract covering the unit''; and
                        (F) by adding at the end the following new
                    subparagraphs:
                        ``(L) Use in cooperative housing and elevator
                    buildings.--A public housing agency may enter into a
                    housing assistance payments contract under this
                    paragraph with respect to--
                                ``(i) dwelling units in cooperative
                            housing; and
                                ``(ii) notwithstanding subsection (c),
                            dwelling units in a high-rise elevator project,
                            including such a project that is occupied by
                            families with children, without review and
                            approval of the contract by the Secretary.
                        ``(M) Reviews.--
                                ``(i) Subsidy layering.--A subsidy layering
                            review in accordance with section 102(d) of the
                            Department of Housing and Urban Development
                            Reform Act of 1989 (42 U.S.C. 3545(d)) shall
                            not be required for assistance under this
                            paragraph in the case of a housing assistance
                            payments contract for an existing structure, or
                            if a subsidy layering review has been conducted
                            by the applicable State or local agency.
                                ``(ii) Environmental review.--A public
                            housing agency shall not be required to
                            undertake any environmental review before
                            entering into a housing assistance payments
                            contract under this paragraph for an existing
                            structure, except to the extent such a review
                            is otherwise required by law or regulation.''.
                (2) Voucher program rent reasonableness.--Section 8(o)(10)
            of the United States Housing Act of 1937 (42 U.S.C.
            1437f(o)(10)) is amended by adding at the end the following new
            subparagraph;
                        ``(F) Tax credit projects.--In the case of a
                    dwelling unit receiving tax credits pursuant to section
                    42 of the Internal Revenue Code of 1986 or for which
                    assistance is provided under subtitle A of title II of
                    the Cranston Gonzalez National Affordable Housing Act
                    of 1990, for which a housing assistance contract not
                    subject to paragraph (13) of this subsection is
                    established, rent reasonableness shall be determined as
                    otherwise provided by this paragraph, except that--
                                ``(i) comparison with rent for units in the
                            private, unassisted local market shall not be
                            required if the rent is equal to or less than
                            the rent for other comparable units receiving
                            such tax credits or assistance in the project
                            that are not occupied by families assisted with
                            tenant-based assistance under this subsection;
                            and
                                ``(ii) the rent shall not be considered
                            reasonable for purposes of this paragraph if it
                            exceeds the greater of--
                                        ``(I) the rents charged for other
                                    comparable units receiving such tax
                                    credits or assistance in the project
                                    that are not occupied by families
                                    assisted with tenant-based assistance
                                    under this subsection; and
                                        ``(II) the payment standard
                                    established by the public housing
                                    agency for a unit of the size
                                    involved.''.
        (b) Section 202 Housing for Elderly Persons.--Subsection (f) of
    section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f)) is
    amended--
                (1) by striking ``Selection Criteria.--'' and inserting
            ``Initial Selection Criteria and Processing.-- (1) Selection
            criteria.--'';
                (2) by redesignating paragraphs (1) through (7) as
            subparagraphs (A) through (G), respectively; and
                (3) by adding at the end the following new paragraph:
                ``(2) Delegated processing.--
                        ``(A) In issuing a capital advance under this
                    subsection for any project for which financing for the
                    purposes described in the last two sentences of
                    subsection (b) is provided by a combination of a
                    capital advance under subsection (c)(1) and sources
                    other than this section, within 30 days of award of the
                    capital advance, the Secretary shall delegate review
                    and processing of such projects to a State or local
                    housing agency that--
                                ``(i) is in geographic proximity to the
                            property;
                                ``(ii) has demonstrated experience in and
                            capacity for underwriting multifamily housing
                            loans that provide housing and supportive
                            services;
                                ``(iii) may or may not be providing low-
                            income housing tax credits in combination with
                            the capital advance under this section, and
                                ``(iv) agrees to issue a firm commitment
                            within 12 months of delegation.
                        ``(B) The Secretary shall retain the authority to
                    process capital advances in cases in which no State or
                    local housing agency has applied to provide delegated
                    processing pursuant to this paragraph or no such agency
                    has entered into an agreement with the Secretary to
                    serve as a delegated processing agency.
                        ``(C) An agency to which review and processing is
                    delegated pursuant to subparagraph (A) may assess a
                    reasonable fee which shall be included in the capital
                    advance amounts and may recommend project rental
                    assistance amounts in excess of those initially awarded
                    by the Secretary. The Secretary shall develop a
                    schedule for reasonable fees under this subparagraph to
                    be paid to delegated processing agencies, which shall
                    take into consideration any other fees to be paid to
                    the agency for other funding provided to the project by
                    the agency, including bonds, tax credits, and other gap
                    funding.
                        ``(D) Under such delegated system, the Secretary
                    shall retain the authority to approve rents and
                    development costs and to execute a capital advance
                    within 60 days of receipt of the commitment from the
                    State or local agency. The Secretary shall provide to
                    such agency and the project sponsor, in writing, the
                    reasons for any reduction in capital advance amounts or
                    project rental assistance and such reductions shall be
                    subject to appeal.''.
        (c) McKinney-Vento Act Homeless Assistance Under Shelter Plus Care
    Program.--
                (1) Term of contracts with owner or lessor.--Part I of
            subtitle F of the McKinney-Vento Homeless Assistance Act is
            amended--
                        (A) by redesignating sections 462 and 463 (42
                    U.S.C. 11403g, 11403h) as sections 463 and 464,
                    respectively;
                        (B) by striking ``section 463'' each place such
                    term appears in sections 471, 476, 481, 486, and 488
                    (42 U.S.C. 11404, 11405, 11406, 11407, and 11407b) and
                    inserting ``section 464''; and
                        (C) by inserting after section 461 (42 U.S.C.
                    11403f) the following new section:

    ``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.

        ``An applicant under this subtitle may enter into a contract with
    the owner or lessor of a property that receives rental assistance under
    this subtitle having a term of not more than 15 years, subject to the
    availability of sufficient funds provided in appropriation Acts for the
    purpose of renewing expiring contracts for assistance payments. Such
    contract may, at the election of the applicant and owner or lessor,
    specify that such contract shall be extended for renewal terms of not
    more than 15 years each, subject to the availability of sufficient such
    appropriated funds.''.
                (2) Project-based rental assistance contracts.--Section
            478(a) of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
            11405a(a)) is amended by inserting before the period at the end
            the following: ``; except that, in the case of any project for
            which equity is provided through any low-income housing tax
            credit pursuant to section 42 of the Internal Revenue Code of
            1986 (26 U.S.C. 42), if an expenditure of such amount for each
            unit (including the prorated share of such work) is required to
            make the structure decent, safe, and sanitary, and the owner
            agrees to reach initial closing on permanent financing from
            such other sources within two years and agrees to carry out the
            rehabilitation with resources other than assistance under this
            subtitle within 60 months of notification of grant approval,
            the contract shall be for a term of 10 years (except that such
            period may be extended by up to 1 year by the Secretary, which
            extension shall be granted unless the Secretary determines that
            the sponsor is primarily responsible for the failure to meet
            such deadline)''.
        (d) Data Collection on Tenants of Housing Tax Credit Projects.--
    Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et
    seq.) is amended by adding at the end the following new section:

    ``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT PROJECTS.

        ``(a) In General.--Each State agency administering tax credits
    under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42)
    shall furnish to the Secretary of Housing and Urban Development, not
    less than annually, information concerning the race, ethnicity, family
    composition, age, income, use of rental assistance under section 8(o)
    of the United States Housing Act of 1937 or other similar assistance,
    disability status, and monthly rental payments of households residing
    in each property receiving such credits through such agency. Such State
    agencies shall, to the extent feasible, collect such information
    through existing reporting processes and in a manner that minimizes
    burdens on property owners. In the case of any household that continues
    to reside in the same dwelling unit, information provided by the
    household in a previous year may be used if the information is of a
    category that is not subject to change or if information for the
    current year is not readily available to the owner of the property.
        ``(b) Standards.--The Secretary shall establish standards and
    definitions for the information collected under subsection (a), provide
    States with technical assistance in establishing systems to compile and
    submit such information, and, in coordination with other Federal
    agencies administering housing programs, establish procedures to
    minimize duplicative reporting requirements for properties assisted
    under multiple housing programs.
        ``(c) Public Availability.--The Secretary shall, not less than
    annually, compile and make publicly available the information submitted
    to the Secretary pursuant to subsection (a).
        ``(d) Authorization of Appropriations.--There is authorized to be
    appropriated for the cost of activities required under subsections (b)
    and (c) $2,500,000 for fiscal year 2009 and $900,000 for each of fiscal
    years 2010 through 2013.''.

                            TITLE IX--MISCELLANEOUS

    SEC. 2901. HOMELESS ASSISTANCE.

        (a) Appropriations.--Section 726 of the McKinney-Vento Homeless
    Assistance Act (42 U.S.C. 11435) is amended by striking ``$70,000,000''
    and all that follows and inserting ``$100,000,000 for fiscal year 2009
    and such sums as may be necessary for each subsequent fiscal year.''.
        (b) Emergency Assistance.--Section 722 of the McKinney-Vento
    Homeless Assistance Act (42 U.S.C. 11432) is amended by adding at the
    end the following:
        ``(h) Special Rule for Emergency Assistance.--
                ``(1) Emergency assistance.--
                        ``(A) Reservation of amounts.--Subject to paragraph
                    (4) and notwithstanding any other provision of this
                    title, the Secretary shall use funds appropriated under
                    section 726 for fiscal year 2009, but not to exceed
                    $30,000,000, for the purposes of providing emergency
                    assistance through grants.
                        ``(B) General authority.--The Secretary shall use
                    the funds to make grants to State educational agencies
                    under paragraph (2), to enable the agencies to make
                    subgrants to local educational agencies under paragraph
                    (3), to provide activities described in section 723(d)
                    for individuals referred to in subparagraph (C).
                        ``(C) Eligible individuals.--Funds made available
                    under this subsection shall be used to provide such
                    activities for eligible individuals, consisting of
                    homeless children and youths, and their families, who
                    have become homeless due to home foreclosure, including
                    children and youths, and their families, who became
                    homeless when lenders foreclosed on properties rented
                    by the families.
                ``(2) Grants to state educational agencies.--
                        ``(A) Disbursement.--The Secretary shall make
                    grants with funds provided under paragraph (1)(A) to
                    State educational agencies based on need, consistent
                    with the number of eligible individuals described in
                    paragraph (1)(C) in the States involved, as determined
                    by the Secretary.
                        ``(B) Assurance.--To be eligible to receive a grant
                    under this paragraph, a State educational agency shall
                    provide an assurance to the Secretary that the State
                    educational agency, and each local educational agency
                    receiving a subgrant from the State educational agency
                    under this subsection shall ensure that the activities
                    carried out under this subsection are consistent with
                    the activities described in section 723(d).
                ``(3) Subgrants to local educational agencies.--A State
            educational agency that receives a grant under paragraph (2)
            shall use the funds made available through the grant to make
            subgrants to local educational agencies. The State educational
            agency shall make the subgrants to local educational agencies
            based on need, consistent with the number of eligible
            individuals described in paragraph (1)(C) in the areas served
            by the local educational agencies, as determined by the State
            educational agency.
                ``(4) Restriction.--The Secretary--
                        ``(A) shall determine the amount (if any) by which
                    the funds appropriated under section 726 for fiscal
                    year 2009 exceed $70,000,000; and
                        ``(B) may only use funds from that amount to carry
                    out this subsection.''.

    SEC. 2902. INCREASING ACCESS AND UNDERSTANDING OF ENERGY EFFICIENT
                  MORTGAGES.

        (a) Definition.--As used in this section, the term ``energy
    efficient mortgage'' has the same meaning as given that term in
    paragraph (24) of section 104 of the Cranston-Gonzalez National
    Affordable Housing Act (42 U.S.C. 12704(24)).
        (b) Recommendations to Eliminate Barriers to Use of Energy
    Efficient Mortgages.--
                (1) In general.--Not later than 180 days after the date of
            enactment of this section, the Secretary of Housing and Urban
            Development, in conjunction with the Secretary of Energy and
            the Administrator of the Environmental Protection Agency, shall
            consult with the residential mortgage industry and States to
            develop recommendations to eliminate the barriers that exist to
            increasing the availability, use, and purchase of energy
            efficient mortgages, including such barriers as--
                        (A) the lack of reliable and accessible information
                    on such mortgages, including estimated energy savings
                    and other benefits of energy efficient housing;
                        (B) the confusion regarding underwriting
                    requirements and differences among various energy
                    efficient mortgage programs;
                        (C) the complex and time consuming process of
                    securing such mortgages;
                        (D) the lack of publicly available research on the
                    default risk of such mortgages; and
                        (E) the availability of certified or accredited
                    home energy rating services.
                (2) Report to congress.--The Secretary of Housing and Urban
            Development shall submit a report to Congress that--
                        (A) summarizes the recommendations developed under
                    paragraph (1); and
                        (B) includes any recommendations for statutory,
                    regulatory, or administrative changes that the
                    Secretary deems necessary to institute such
                    recommendations.
        (c) Energy Efficient Mortgages Outreach Campaign.--
                (1) In general.--The Secretary of Housing and Urban
            Development, in consultation and coordination with the
            Secretary of Energy, the Administrator of the Environmental
            Protection Agency, and State Energy and Housing Finance
            Directors, shall carry out an education and outreach campaign
            to inform and educate consumers, home builders, residential
            lenders, and other real estate professionals on the
            availability, benefits, and advantages of--
                        (A) improved energy efficiency in housing; and
                        (B) energy efficient mortgages.
                (2) Authorization of appropriations.--There are authorized
            to be appropriated such sums as are necessary to carry out the
            education and outreach campaign described under paragraph (1).

                       DIVISION C--TAX-RELATED PROVISIONS

    SEC. 3000. SHORT TITLE; ETC.

        (a) Short Title.--This division may be cited as the ``Housing
    Assistance Tax Act of 2008''.
        (b) Amendment of 1986 Code.--Except as otherwise expressly
    provided, whenever in this division an amendment or repeal is expressed
    in terms of an amendment to, or repeal of, a section or other
    provision, the reference shall be considered to be made to a section or
    other provision of the Internal Revenue Code of 1986.
        (c) Table of Contents.--The table of contents for this division is
    as follows:

    Sec. 3000. Short title; etc.

                        TITLE I--HOUSING TAX INCENTIVES

                        Subtitle A--Multi-Family Housing

                     Part I--Low-Income Housing Tax Credit

    Sec. 3001. Temporary increase in volume cap for low-income housing tax
                                credit.
    Sec. 3002. Determination of credit rate.
    Sec. 3003. Modifications to definition of eligible basis.
    Sec. 3004. Other simplification and reform of low-income housing tax
                                incentives.
    Sec. 3005. Treatment of military basic pay.

            Part II--Modifications to Tax-Exempt Housing Bond Rules

    Sec. 3007. Recycling of tax-exempt debt for financing residential
                                rental projects.
    Sec. 3008. Coordination of certain rules applicable to low-income
                                housing credit and qualified residential
                                rental project exempt facility bonds.

      Part III--Reforms Related to the Low-Income Housing Credit and Tax-
                              Exempt Housing Bonds

    Sec. 3009. Hold harmless for reductions in area median gross income.
    Sec. 3010. Exception to annual current income determination requirement
                                where determination not relevant.

                       Subtitle B--Single Family Housing

    Sec. 3011. First-time homebuyer credit.
    Sec. 3012. Additional standard deduction for real property taxes for
                                nonitemizers.

                         Subtitle C--General Provisions

    Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
    Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt
                                housing bonds, low-income housing tax
                                credit, and rehabilitation credit.
    Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for
                                treatment as tax-exempt bonds.
    Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign
                                affidavits.
    Sec. 3025. Modification of definition of tax-exempt use property for
                                purposes of the rehabilitation credit.
    Sec. 3026. Extension of special rule for mortgage revenue bonds for
                                residences located in disaster areas.
    Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery
                                rebates for individuals.

           TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

          Subtitle A--Foreign Currency and Other Qualified Activities

    Sec. 3031. Revisions to REIT income tests.
    Sec. 3032. Revisions to REIT asset tests.
    Sec. 3033. Conforming foreign currency revisions.

                     Subtitle B--Taxable REIT Subsidiaries

    Sec. 3041. Conforming taxable REIT subsidiary asset test.

                            Subtitle C--Dealer Sales

    Sec. 3051. Holding period under safe harbor.
    Sec. 3052. Determining value of sales under safe harbor.

                         Subtitle D--Health Care REITs

    Sec. 3061. Conformity for health care facilities.

                          Subtitle E--Effective Dates

    Sec. 3071. Effective dates.

                         TITLE III--REVENUE PROVISIONS

                         Subtitle A--General Provisions

    Sec. 3081. Election to accelerate the AMT and research credits in lieu
                                of bonus depreciation.
    Sec. 3082. Certain GO Zone incentives.
    Sec. 3083. Increase in statutory limit on the public debt.

                          Subtitle B--Revenue Offsets

    Sec. 3091. Returns relating to payments made in settlement of payment
                                card and third party network transactions.
    Sec. 3092. Gain from sale of principal residence allocated to
                                nonqualified use not excluded from income.
    Sec. 3093. Delay in application of worldwide allocation of interest.
    Sec. 3094. Time for payment of corporate estimated taxes.

                        TITLE I--HOUSING TAX INCENTIVES

                        Subtitle A--Multi-Family Housing

                     PART I--LOW-INCOME HOUSING TAX CREDIT

    SEC. 3001. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX
                  CREDIT.

        Paragraph (3) of section 42(h) is amended by adding at the end the
    following new subparagraph:
                        ``(I) Increase in state housing credit ceiling for
                    2008 and 2009.--In the case of calendar years 2008 and
                    2009--
                                ``(i) the dollar amount in effect under
                            subparagraph (C)(ii)(I) for such calendar year
                            (after any increase under subparagraph (H))
                            shall be increased by $0.20, and
                                ``(ii) the dollar amount in effect under
                            subparagraph (C)(ii)(II) for such calendar year
                            (after any increase under subparagraph (H))
                            shall be increased by an amount equal to 10
                            percent of such dollar amount (rounded to the
                            next lowest multiple of $5,000).''.

    SEC. 3002. DETERMINATION OF CREDIT RATE.

        (a) Temporary Minimum Credit Rate for Non-Federally Subsidized New
    Buildings.--
                (1) In general.--Subsection (b) of section 42 is amended by
            striking paragraph (1), by redesignating paragraph (2) as
            paragraph (1), and by inserting after paragraph (1), as so
            redesignated, the following new paragraph:
                ``(2) Temporary minimum credit rate for non-federally
            subsidized new buildings.--In the case of any new building--
                        ``(A) which is placed in service by the taxpayer
                    after the date of the enactment of this paragraph and
                    before December 31, 2013, and
                        ``(B) which is not federally subsidized for the
                    taxable year,
            the applicable percentage shall not be less than 9 percent.''.
                (2) Conforming amendments.--
                        (A) Subsection (b) of section 42, as amended by
                    paragraph (1), is amended by striking ``For purposes of
                    this section--'' and all that follows through ``means
                    the appropriate'' and inserting the following:
                ``(1) Determination of applicable percentage.--For purposes
            of this section, the term `applicable percentage' means, with
            respect to any building, the appropriate''.
                        (B) Clause (i) of section 42(b)(1)(B), as
                    redesignated by paragraph (1), is amended by striking
                    ``a building described in paragraph (1)(A)'' and
                    inserting ``a new building which is not federally
                    subsidized for the taxable year''.
                        (C) Clause (ii) of section 42(b)(1)(B), as
                    redesignated by paragraph (1), is amended by striking
                    ``a building described in paragraph (1)(B)'' and
                    inserting ``a building not described in clause (i)''.
        (b) Modifications to Definition of Federally Subsidized Building.--
                (1) In general.--Subparagraph (A) of section 42(i)(2) is
            amended by striking ``, or any below market Federal loan,''.
                (2) Conforming amendments.--
                        (A) Subparagraph (B) of section 42(i)(2) is
                    amended--
                                (i) by striking ``balance of loan or'' in
                            the heading thereof,
                                (ii) by striking ``loan or'' in the matter
                            preceding clause (i), and
                                (iii) by striking ``subsection (d)--'' and
                            all that follows and inserting ``subsection (d)
                            the proceeds of such obligation.''.
                        (B) Subparagraph (C) of section 42(i)(2) is
                    amended--
                                (i) by striking ``or below market Federal
                            loan'' in the matter preceding clause (i),
                                (ii) in clause (i)--
                                        (I) by striking ``or loan (when
                                    issued or made)'' and inserting ``(when
                                    issued)'', and
                                        (II) by striking ``the proceeds of
                                    such obligation or loan'' and inserting
                                    ``the proceeds of such obligation'',
                                    and
                                (iii) by striking ``, and such loan is
                            repaid,'' in clause (ii).
                        (C) Paragraph (2) of section 42(i) is amended by
                    striking subparagraphs (D) and (E).
        (c) Effective Date.--The amendments made by this subsection shall
    apply to buildings placed in service after the date of the enactment of
    this Act.

    SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

        (a) Increase in Credit for Certain State Designated Buildings.--
    Subparagraph (C) of section 42(d)(5) (relating to increase in credit
    for buildings in high cost areas), before redesignation under
    subsection (g), is amended by adding at the end the following new
    clause:
                                ``(v) Buildings designated by state housing
                            credit agency.--Any building which is
                            designated by the State housing credit agency
                            as requiring the increase in credit under this
                            subparagraph in order for such building to be
                            financially feasible as part of a qualified
                            low-income housing project shall be treated for
                            purposes of this subparagraph as located in a
                            difficult development area which is designated
                            for purposes of this subparagraph. The
                            preceding sentence shall not apply to any
                            building if paragraph (1) of subsection (h)
                            does not apply to any portion of the eligible
                            basis of such building by reason of paragraph
                            (4) of such subsection.''.
        (b) Modification to Rehabilitation Requirements.--
                (1) In general.--Clause (ii) of section 42(e)(3)(A) is
            amended--
                        (A) by striking ``10 percent'' in subclause (I) and
                    inserting ``20 percent'', and
                        (B) by striking ``$3,000'' in subclause (II) and
                    inserting ``$6,000''.
                (2) Inflation adjustment.--Paragraph (3) of section 42(e)
            is amended by adding at the end the following new subparagraph:
                        ``(D) Inflation adjustment.--In the case of any
                    expenditures which are treated under paragraph (4) as
                    placed in service during any calendar year after 2009,
                    the $6,000 amount in subparagraph (A)(ii)(II) shall be
                    increased by an amount equal to--
                                ``(i) such dollar amount, multiplied by
                                ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for such
                            calendar year by substituting `calendar year
                            2008' for `calendar year 1992' in subparagraph
                            (B) thereof.
                    Any increase under the preceding sentence which is not
                    a multiple of $100 shall be rounded to the nearest
                    multiple of $100.''.
                (3) Conforming amendment.--Subclause (II) of section
            42(f)(5)(B)(ii) is amended by striking ``if subsection
            (e)(3)(A)(ii)(II)'' and all that follows and inserting ``if the
            dollar amount in effect under subsection (e)(3)(A)(ii)(II) were
            two-thirds of such amount.''.
        (c) Increase in Allowable Community Service Facility Space for
    Small Projects.--Clause (ii) of section 42(d)(4)(C) (relating to
    limitation) is amended by striking ``10 percent of the eligible basis
    of the qualified low-income housing project of which it is a part. For
    purposes of'' and inserting ``the sum of--
                                        ``(I) 25 percent of so much of the
                                    eligible basis of the qualified low-
                                    income housing project of which it is a
                                    part as does not exceed $15,000,000,
                                    plus
                                        ``(II) 10 percent of so much of the
                                    eligible basis of such project as is
                                    not taken into account under subclause
                                    (I).
                            For purposes of''.
        (d) Clarification of Treatment of Federal Grants.--Subparagraph (A)
    of section 42(d)(5) is amended to read as follows:
                        ``(A) Federal grants not taken into account in
                    determining eligible basis.--The eligible basis of a
                    building shall not include any costs financed with the
                    proceeds of a federally funded grant.''.
        (e) Simplification of Related Party Rules.--Clause (iii) of section
    42(d)(2)(D), before redesignation under subsection (g)(2), is amended--
                (1) by striking all that precedes subclause (II),
                (2) by redesignating subclause (II) as clause (iii) and
            moving such clause two ems to the left, and
                (3) by striking the last sentence thereof.
        (f) Exception to 10-Year Nonacquisition Period for Existing
    Buildings Applicable to Federally- or State-Assisted Buildings.--
    Paragraph (6) of section 42(d) is amended to read as follows:
                ``(6) Credit allowable for certain buildings acquired
            during 10-year period described in paragraph (2)(B)(ii).--
                        ``(A) In general.--Paragraph (2)(B)(ii) shall not
                    apply to any federally- or State-assisted building.
                        ``(B) Buildings acquired from insured depository
                    institutions in default.--On application by the
                    taxpayer, the Secretary may waive paragraph (2)(B)(ii)
                    with respect to any building acquired from an insured
                    depository institution in default (as defined in
                    section 3 of the Federal Deposit Insurance Act) or from
                    a receiver or conservator of such an institution.
                        ``(C) Federally- or state-assisted building.--For
                    purposes of this paragraph--
                                ``(i) Federally-assisted building.--The
                            term `federally-assisted building' means any
                            building which is substantially assisted,
                            financed, or operated under section 8 of the
                            United States Housing Act of 1937, section
                            221(d)(3), 221(d)(4), or 236 of the National
                            Housing Act, section 515 of the Housing Act of
                            1949, or any other housing program administered
                            by the Department of Housing and Urban
                            Development or by the Rural Housing Service of
                            the Department of Agriculture.
                                ``(ii) State-assisted building.--The term
                            `State-assisted building' means any building
                            which is substantially assisted, financed, or
                            operated under any State law similar in
                            purposes to any of the laws referred to in
                            clause (i).''.
        (g) Repeal of Deadwood.--
                (1) Clause (ii) of section 42(d)(2)(B) is amended by
            striking ``the later of--'' and all that follows and inserting
            ``the date the building was last placed in service,''.
                (2) Subparagraph (D) of section 42(d)(2) is amended by
            striking clause (i) and by redesignating clauses (ii) and (iii)
            as clauses (i) and (ii), respectively.
                (3) Paragraph (5) of section 42(d) is amended by striking
            subparagraph (B) and by redesignating subparagraph (C) as
            subparagraph (B).
        (h) Effective Date.--
                (1) In general.--Except as otherwise provided in paragraph
            (2), the amendments made by this subsection shall apply to
            buildings placed in service after the date of the enactment of
            this Act.
                (2) Rehabilitation requirements.--
                        (A) In general.--The amendments made by subsection
                    (b) shall apply to buildings with respect to which
                    housing credit dollar amounts are allocated after the
                    date of the enactment of this Act.
                        (B) Buildings not subject to allocation limits.--To
                    the extent paragraph (1) of section 42(h) of the
                    Internal Revenue Code of 1986 does not apply to any
                    building by reason of paragraph (4) thereof, the
                    amendments made by subsection (b) shall apply buildings
                    financed with bonds issued pursuant to allocations made
                    after the date of the enactment of this Act.

    SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX
                  INCENTIVES.

        (a) Repeal Prohibition on Moderate Rehabilitation Assistance.--
    Paragraph (2) of section 42(c) (defining qualified low-income building)
    is amended by striking the flush sentence at the end.
        (b) Modification of Time Limit for Incurring 10 Percent of
    Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended by
    striking ``(as of the later of the date which is 6 months after the
    date that the allocation was made or the close of the calendar year in
    which the allocation is made)'' and inserting ``(as of the date which
    is 1 year after the date that the allocation was made)''.
        (c) Repeal of Bonding Requirement on Disposition of Building.--
    Paragraph (6) of section 42(j) (relating to no recapture on disposition
    of building (or interest therein) where bond posted) is amended to read
    as follows:
                ``(6) No recapture on disposition of building which
            continues in qualified use.--
                        ``(A) In general.--The increase in tax under this
                    subsection shall not apply solely by reason of the
                    disposition of a building (or an interest therein) if
                    it is reasonably expected that such building will
                    continue to be operated as a qualified low-income
                    building for the remaining compliance period with
                    respect to such building.
                        ``(B) Statute of limitations.--If a building (or an
                    interest therein) is disposed of during any taxable
                    year and there is any reduction in the qualified basis
                    of such building which results in an increase in tax
                    under this subsection for such taxable or any
                    subsequent taxable year, then--
                                ``(i) the statutory period for the
                            assessment of any deficiency with respect to
                            such increase in tax shall not expire before
                            the expiration of 3 years from the date the
                            Secretary is notified by the taxpayer (in such
                            manner as the Secretary may prescribe) of such
                            reduction in qualified basis, and
                                ``(ii) such deficiency may be assessed
                            before the expiration of such 3-year period
                            notwithstanding the provisions of any other law
                            or rule of law which would otherwise prevent
                            such assessment.''.
        (d) Energy Efficiency and Historic Nature Taken Into Account in
    Making Allocations.--Subparagraph (C) of section 42(m)(1) (relating to
    plans for allocation of credit among projects) is amended by striking
    ``and'' at the end of clause (vii), by striking the period at the end
    of clause (viii) and inserting a comma, and by adding at the end the
    following new clauses:
                                ``(ix) the energy efficiency of the
                            project, and
                                ``(x) the historic nature of the
                            project.''.
        (e) Continued Eligibility for Students Who Received Foster Care
    Assistance.--Clause (i) of section 42(i)(3)(D) is amended by striking
    ``or'' at the end of subclause (I), by redesignating subclause (II) as
    subclause (III), and by inserting after subclause (I) the following new
    subclause:
                                        ``(II) a student who was previously
                                    under the care and placement
                                    responsibility of the State agency
                                    responsible for administering a plan
                                    under part B or part E of title IV of
                                    the Social Security Act, or''.
        (f) Treatment of Rural Projects.--Section 42(i) (relating to
    definitions and special rules) is amended by adding at the end the
    following new paragraph:
                ``(8) Treatment of rural projects.--For purposes of this
            section, in the case of any project for residential rental
            property located in a rural area (as defined in section 520 of
            the Housing Act of 1949), any income limitation measured by
            reference to area median gross income shall be measured by
            reference to the greater of area median gross income or
            national non-metropolitan median income. The preceding sentence
            shall not apply with respect to any building if paragraph (1)
            of section 42(h) does not apply by reason of paragraph (4)
            thereof to any portion of the credit determined under this
            section with respect to such building.''.
        (g) Clarification of General Public Use Requirement.--Subsection
    (g) of section 42 is amended by adding at the end the following new
    paragraph:
                ``(9) Clarification of general public use requirement.--A
            project does not fail to meet the general public use
            requirement solely because of occupancy restrictions or
            preferences that favor tenants--
                        ``(A) with special needs,
                        ``(B) who are members of a specified group under a
                    Federal program or State program or policy that
                    supports housing for such a specified group, or
                        ``(C) who are involved in artistic or literary
                    activities.''.
        (h) GAO Study Regarding Modifications to Low-Income Housing Tax
    Credit.--Not later than December 31, 2012, the Comptroller General of
    the United States shall submit to Congress a report which analyzes the
    implementation of the modifications made by this subtitle to the low-
    income housing tax credit under section 42 of the Internal Revenue Code
    of 1986. Such report shall include an analysis of the distribution of
    credit allocations before and after the effective date of such
    modifications.
        (i) Effective Date.--
                (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall apply to
            buildings placed in service after the date of the enactment of
            this Act.
                (2) Repeal of bonding requirement on disposition of
            building.--The amendment made by subsection (c) shall apply
            to--
                        (A) interests in buildings disposed after the date
                    of the enactment of this Act, and
                        (B) interests in buildings disposed of on or before
                    such date if--
                                (i) it is reasonably expected that such
                            building will continue to be operated as a
                            qualified low-income building (within the
                            meaning of section 42 of the Internal Revenue
                            Code of 1986) for the remaining compliance
                            period (within the meaning of such section)
                            with respect to such building, and
                                (ii) the taxpayer elects the application of
                            this subparagraph with respect to such
                            disposition.
                (3) Energy efficiency and historic nature taken into
            account in making allocations.--The amendments made by
            subsection (d) shall apply to allocations made after December
            31, 2008.
                (4) Continued eligibility for students who received foster
            care assistance.--The amendments made by subsection (e) shall
            apply to determinations made after the date of the enactment of
            this Act.
                (5) Treatment of rural projects.--The amendment made by
            subsection (f) shall apply to determinations made after the
            date of the enactment of this Act.
                (6) Clarification of general public use requirement.--The
            amendment made by subsection (g) shall apply to buildings
            placed in service before, on, or after the date of the
            enactment of this Act.

    SEC. 3005. TREATMENT OF MILITARY BASIC PAY.

        (a) In General.--Subparagraph (B) of section 142(d)(2) (relating to
    income of individuals; area median gross income) is amended--
                (1) by striking ``The income'' and inserting the following:
                                ``(i) In general.--The income'', and
                (2) by adding at the end the following:
                                ``(ii) Special rule relating to basic
                            housing allowances.--For purposes of
                            determining income under this subparagraph,
                            payments under section 403 of title 37, United
                            States Code, as a basic pay allowance for
                            housing shall be disregarded with respect to
                            any qualified building.
                                ``(iii) Qualified building.--For purposes
                            of clause (ii), the term `qualified building'
                            means any building located--
                                        ``(I) in any county in which is
                                    located a qualified military
                                    installation to which the number of
                                    members of the Armed Forces of the
                                    United States assigned to units based
                                    out of such qualified military
                                    installation, as of June 1, 2008, has
                                    increased by not less than 20 percent,
                                    as compared to such number on December
                                    31, 2005, or
                                        ``(II) in any county adjacent to a
                                    county described in subclause (I).
                                ``(iv) Qualified military installation.--
                            For purposes of clause (iii), the term
                            `qualified military installation' means any
                            military installation or facility the number of
                            members of the Armed Forces of the United
                            States assigned to which, as of June 1, 2008,
                            is not less than 1,000.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to--
                (1) determinations made after the date of the enactment of
            this Act and before January 1, 2012, in the case of any
            qualified building (as defined in section 142(d)(2)(B)(iii) of
            the Internal Revenue Code of 1986)--
                        (A) with respect to which housing credit dollar
                    amounts have been allocated on or before the date of
                    the enactment of this Act, or
                        (B) with respect to buildings placed in service
                    before such date of enactment, to the extent paragraph
                    (1) of section 42(h) of such Code does not apply to
                    such building by reason of paragraph (4) thereof, but
                    only with respect to bonds issued before such date of
                    enactment, and
                (2) determinations made after the date of enactment of this
            Act, in the case of qualified buildings (as so defined)--
                        (A) with respect to which housing credit dollar
                    amounts are allocated after the date of the enactment
                    of this Act and before January 1, 2012, or
                        (B) with respect to which buildings placed in
                    service after the date of enactment of this Act and
                    before January 1, 2012, to the extent paragraph (1) of
                    section 42(h) of such Code does not apply to such
                    building by reason of paragraph (4) thereof, but only
                    with respect to bonds issued after such date of
                    enactment and before January 1, 2012.

            PART II--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

    SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL
                  RENTAL PROJECTS.

        (a) In General.--Subsection (i) of section 146 (relating to
    treatment of refunding issues) is amended by adding at the end the
    following new paragraph:
                ``(6) Treatment of certain residential rental project bonds
            as refunding bonds irrespective of obligor.--
                        ``(A) In general.--If, during the 6-month period
                    beginning on the date of a repayment of a loan financed
                    by an issue 95 percent or more of the net proceeds of
                    which are used to provide projects described in section
                    142(d), such repayment is used to provide a new loan
                    for any project so described, any bond which is issued
                    to refinance such issue shall be treated as a refunding
                    issue to the extent the principal amount of such
                    refunding issue does not exceed the principal amount of
                    the bonds refunded.
                        ``(B) Limitations.--Subparagraph (A) shall apply to
                    only one refunding of the original issue and only if--
                                ``(i) the refunding issue is issued not
                            later than 4 years after the date on which the
                            original issue was issued,
                                ``(ii) the latest maturity date of any bond
                            of the refunding issue is not later than 34
                            years after the date on which the refunded bond
                            was issued, and
                                ``(iii) the refunding issue is approved in
                            accordance with section 147(f) before the
                            issuance of the refunding issue.''.
        (b) Low-Income Housing Credit.--Clause (ii) of section 42(h)(4)(A)
    is amended by inserting ``or such financing is refunded as described in
    section 146(i)(6)'' before the period at the end.
        (c) Effective Date.--The amendments made by this section shall
    apply to repayments of loans received after the date of the enactment
    of this Act.

    SEC. 3008. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME
                  HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL PROJECT
                  EXEMPT FACILITY BONDS.

        (a) Determination of Next Available Unit.--Paragraph (3) of section
    142(d) (relating to current income determinations) is amended by adding
    at the end the following new subparagraph:
                        ``(C) Exception for projects with respect to which
                    affordable housing credit is allowed.--In the case of a
                    project with respect to which credit is allowed under
                    section 42, the second sentence of subparagraph (B)
                    shall be applied by substituting `building (within the
                    meaning of section 42)' for `project'.''.
        (b) Students.--Paragraph (2) of section 142(d) (relating to
    definitions and special rules) is amended by adding at the end the
    following new subparagraph:
                        ``(C) Students.--Rules similar to the rules of
                    42(i)(3)(D) shall apply for purposes of this
                    subsection.''.
        (c) Single-Room Occupancy Units.--Paragraph (2) of section 142(d)
    (relating to definitions and special rules), as amended by subsection
    (b), is amended by adding at the end the following new subparagraph:
                        ``(D) Single-room occupancy units.--A unit shall
                    not fail to be treated as a residential unit merely
                    because such unit is a single-room occupancy unit
                    (within the meaning of section 42).''.
        (d) Effective Date.--The amendments made by this section shall
    apply to determinations of the status of qualified residential rental
    projects for periods beginning after the date of the enactment of this
    Act, with respect to bonds issued before, on, or after such date.

      PART III--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-
                              EXEMPT HOUSING BONDS

    SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.

        (a) In General.--Paragraph (2) of section 142(d), as amended by
    section 3008, is amended by adding at the end the following new
    subparagraph:
                        ``(E) Hold harmless for reductions in area median
                    gross income.--
                                ``(i) In general.--Any determination of
                            area median gross income under subparagraph (B)
                            with respect to any project for any calendar
                            year after 2008 shall not be less than the area
                            median gross income determined under such
                            subparagraph with respect to such project for
                            the calendar year preceding the calendar year
                            for which such determination is made.
                                ``(ii) Special rule for certain census
                            changes.--In the case of a HUD hold harmless
                            impacted project, the area median gross income
                            with respect to such project for any calendar
                            year after 2008 (hereafter in this clause
                            referred to as the current calendar year) shall
                            be the greater of the amount determined without
                            regard to this clause or the sum of--
                                        ``(I) the area median gross income
                                    determined under the HUD hold harmless
                                    policy with respect to such project for
                                    calendar year 2008, plus
                                        ``(II) any increase in the area
                                    median gross income determined under
                                    subparagraph (B) (determined without
                                    regard to the HUD hold harmless policy
                                    and this subparagraph) with respect to
                                    such project for the current calendar
                                    year over the area median gross income
                                    (as so determined) with respect to such
                                    project for calendar year 2008.
                                ``(iii) HUD hold harmless policy.--The term
                            `HUD hold harmless policy' means the
                            regulations under which a policy similar to the
                            rules of clause (i) applied to prevent a change
                            in the method of determining area median gross
                            income from resulting in a reduction in the
                            area median gross income determined with
                            respect to certain projects in calendar years
                            2007 and 2008.
                                ``(iv) HUD hold harmless impacted
                            project.--The term `HUD hold harmless impacted
                            project' means any project with respect to
                            which area median gross income was determined
                            under subparagraph (B) for calendar year 2007
                            or 2008 if such determination would have been
                            less but for the HUD hold harmless policy.''.
        (b) Effective Date.--The amendment made by this section shall apply
    to determinations of area median gross income for calendar years after
    2008.

    SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT
                  WHERE DETERMINATION NOT RELEVANT.

        (a) In General.--Subparagraph (A) of section 142(d)(3) is amended
    by adding at the end the following new sentence: ``The preceding
    sentence shall not apply with respect to any project for any year if
    during such year no residential unit in the project is occupied by a
    new resident whose income exceeds the applicable income limit.''.
        (b) Effective Date.--The amendment made by this section shall apply
    to years ending after the date of the enactment of this Act.

                       Subtitle B--Single Family Housing

    SEC. 3011. FIRST-TIME HOMEBUYER CREDIT.

        (a) In General.--Subpart C of part IV of subchapter A of chapter 1
    is amended by redesignating section 36 as section 37 and by inserting
    after section 35 the following new section:

    ``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

        ``(a) Allowance of Credit.--In the case of an individual who is a
    first-time homebuyer of a principal residence in the United States
    during a taxable year, there shall be allowed as a credit against the
    tax imposed by this subtitle for such taxable year an amount equal to
    10 percent of the purchase price of the residence.
        ``(b) Limitations.--
                ``(1) Dollar limitation.--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, the credit allowed under subsection (a)
                    shall not exceed $7,500.
                        ``(B) Married individuals filing separately.--In
                    the case of a married individual filing a separate
                    return, subparagraph (A) shall be applied by
                    substituting `$3,750' for `$7,500'.
                        ``(C) Other individuals.--If two or more
                    individuals who are not married purchase a principal
                    residence, the amount of the credit allowed under
                    subsection (a) shall be allocated among such
                    individuals in such manner as the Secretary may
                    prescribe, except that the total amount of the credits
                    allowed to all such individuals shall not exceed
                    $7,500.
                ``(2) Limitation based on modified adjusted gross income.--
                        ``(A) In general.--The amount allowable as a credit
                    under subsection (a) (determined without regard to this
                    paragraph) for the taxable year shall be reduced (but
                    not below zero) by the amount which bears the same
                    ratio to the amount which is so allowable as--
                                ``(i) the excess (if any) of--
                                        ``(I) the taxpayer's modified
                                    adjusted gross income for such taxable
                                    year, over
                                        ``(II) $75,000 ($150,000 in the
                                    case of a joint return), bears to
                                ``(ii) $20,000.
                        ``(B) Modified adjusted gross income.--For purposes
                    of subparagraph (A), the term `modified adjusted gross
                    income' means the adjusted gross income of the taxpayer
                    for the taxable year increased by any amount excluded
                    from gross income under section 911, 931, or 933.
        ``(c) Definitions.--For purposes of this section--
                ``(1) First-time homebuyer.--The term `first-time
            homebuyer' means any individual if such individual (and if
            married, such individual's spouse) had no present ownership
            interest in a principal residence during the 3-year period
            ending on the date of the purchase of the principal residence
            to which this section applies.
                ``(2) Principal residence.--The term `principal residence'
            has the same meaning as when used in section 121.
                ``(3) Purchase.--
                        ``(A) In general.--The term `purchase' means any
                    acquisition, but only if--
                                ``(i) the property is not acquired from a
                            person related to the person acquiring such
                            property, and
                                ``(ii) the basis of the property in the
                            hands of the person acquiring such property is
                            not determined--
                                        ``(I) in whole or in part by
                                    reference to the adjusted basis of such
                                    property in the hands of the person
                                    from whom acquired, or
                                        ``(II) under section 1014(a)
                                    (relating to property acquired from a
                                    decedent).
                        ``(B) Construction.--A residence which is
                    constructed by the taxpayer shall be treated as
                    purchased by the taxpayer on the date the taxpayer
                    first occupies such residence.
                ``(4) Purchase price.--The term `purchase price' means the
            adjusted basis of the principal residence on the date such
            residence is purchased.
                ``(5) Related persons.--A person shall be treated as
            related to another person if the relationship between such
            persons would result in the disallowance of losses under
            section 267 or 707(b) (but, in applying section 267(b) and (c)
            for purposes of this section, paragraph (4) of section 267(c)
            shall be treated as providing that the family of an individual
            shall include only his spouse, ancestors, and lineal
            descendants).
        ``(d) Exceptions.--No credit under subsection (a) shall be allowed
    to any taxpayer for any taxable year with respect to the purchase of a
    residence if--
                ``(1) a credit under section 1400C (relating to first-time
            homebuyer in the District of Columbia) is allowable to the
            taxpayer (or the taxpayer's spouse) for such taxable year or
            any prior taxable year,
                ``(2) the residence is financed by the proceeds of a
            qualified mortgage issue the interest on which is exempt from
            tax under section 103,
                ``(3) the taxpayer is a nonresident alien, or
                ``(4) the taxpayer disposes of such residence (or such
            residence ceases to be the principal residence of the taxpayer
            (and, if married, the taxpayer's spouse)) before the close of
            such taxable year.
        ``(e) Reporting.--If the Secretary requires information reporting
    under section 6045 by a person described in subsection (e)(2) thereof
    to verify the eligibility of taxpayers for the credit allowable by this
    section, the exception provided by section 6045(e) shall not apply.
        ``(f) Recapture of Credit.--
                ``(1) In general.--Except as otherwise provided in this
            subsection, if a credit under subsection (a) is allowed to a
            taxpayer, the tax imposed by this chapter shall be increased by
            6\2/3\ percent of the amount of such credit for each taxable
            year in the recapture period.
                ``(2) Acceleration of recapture.--If a taxpayer disposes of
            the principal residence with respect to which a credit was
            allowed under subsection (a) (or such residence ceases to be
            the principal residence of the taxpayer (and, if married, the
            taxpayer's spouse)) before the end of the recapture period--
                        ``(A) the tax imposed by this chapter for the
                    taxable year of such disposition or cessation shall be
                    increased by the excess of the amount of the credit
                    allowed over the amounts of tax imposed by paragraph
                    (1) for preceding taxable years, and
                        ``(B) paragraph (1) shall not apply with respect to
                    such credit for such taxable year or any subsequent
                    taxable year.
                ``(3) Limitation based on gain.--In the case of the sale of
            the principal residence to a person who is not related to the
            taxpayer, the increase in tax determined under paragraph (2)
            shall not exceed the amount of gain (if any) on such sale.
            Solely for purposes of the preceding sentence, the adjusted
            basis of such residence shall be reduced by the amount of the
            credit allowed under subsection (a) to the extent not
            previously recaptured under paragraph (1).
                ``(4) Exceptions.--
                        ``(A) Death of taxpayer.--Paragraphs (1) and (2)
                    shall not apply to any taxable year ending after the
                    date of the taxpayer's death.
                        ``(B) Involuntary conversion.--Paragraph (2) shall
                    not apply in the case of a residence which is
                    compulsorily or involuntarily converted (within the
                    meaning of section 1033(a)) if the taxpayer acquires a
                    new principal residence during the 2-year period
                    beginning on the date of the disposition or cessation
                    referred to in paragraph (2). Paragraph (2) shall apply
                    to such new principal residence during the recapture
                    period in the same manner as if such new principal
                    residence were the converted residence.
                        ``(C) Transfers between spouses or incident to
                    divorce.--In the case of a transfer of a residence to
                    which section 1041(a) applies--
                                ``(i) paragraph (2) shall not apply to such
                            transfer, and
                                ``(ii) in the case of taxable years ending
                            after such transfer, paragraphs (1) and (2)
                            shall apply to the transferee in the same
                            manner as if such transferee were the
                            transferor (and shall not apply to the
                            transferor).
                ``(5) Joint returns.--In the case of a credit allowed under
            subsection (a) with respect to a joint return, half of such
            credit shall be treated as having been allowed to each
            individual filing such return for purposes of this subsection.
                ``(6) Return requirement.--If the tax imposed by this
            chapter for the taxable year is increased under this
            subsection, the taxpayer shall, notwithstanding section 6012,
            be required to file a return with respect to the taxes imposed
            under this subtitle.
                ``(7) Recapture period.--For purposes of this subsection,
            the term `recapture period' means the 15 taxable years
            beginning with the second taxable year following the taxable
            year in which the purchase of the principal residence for which
            a credit is allowed under subsection (a) was made.
        ``(g) Election to Treat Purchase in Prior Year.--In the case of a
    purchase of a principal residence after December 31, 2008, and before
    July 1, 2009, a taxpayer may elect to treat such purchase as made on
    December 31, 2008, for purposes of this section (other than subsection
    (c)).
        ``(h) Application of Section.--This section shall only apply to a
    principal residence purchased by the taxpayer on or after April 9,
    2008, and before July 1, 2009.''.
        (b) Conforming Amendments.--
                (1) Section 26(b)(2) is amended by striking ``and'' at the
            end of subparagraph (U), by striking the period and inserting
            ``, and'' and the end of subparagraph (V), and by inserting
            after subparagraph (V) the following new subparagraph:
                        ``(W) section 36(f) (relating to recapture of
                    homebuyer credit).''.
                (2) Section 6211(b)(4)(A) is amended by striking ``34,''
            and all that follows through ``6428'' and inserting ``34, 35,
            36, 53(e), and 6428''.
                (3) Section 1324(b)(2) of title 31, United States Code, is
            amended by inserting ``36,'' after ``35,''.
                (4) The table of sections for subpart C of part IV of
            subchapter A of chapter 1 is amended by redesignating the item
            relating to section 36 as an item relating to section 37 and by
            inserting before such item the following new item:

    ``Sec. 36. First-time homebuyer credit.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to residences purchased on or after April 9, 2008, in taxable
    years ending on or after such date.

    SEC. 3012. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR
                  NONITEMIZERS.

        (a) In General.--Section 63(c)(1) (defining standard deduction) is
    amended by striking ``and'' at the end of subparagraph (A), by striking
    the period at the end of subparagraph (B) and inserting ``, and'', and
    by adding at the end the following new subparagraph:
                        ``(C) in the case of any taxable year beginning in
                    2008, the real property tax deduction.''.
        (b) Definition.--Section 63(c) is amended by adding at the end the
    following new paragraph:
                ``(7) Real property tax deduction.--For purposes of
            paragraph (1), the real property tax deduction is the lesser
            of--
                        ``(A) the amount allowable as a deduction under
                    this chapter for State and local taxes described in
                    section 164(a)(1), or
                        ``(B) $500 ($1,000 in the case of a joint return).
            Any taxes taken into account under section 62(a) shall not be
            taken into account under this paragraph.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2007.

                         Subtitle C--General Provisions

    SEC. 3021. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.

        (a) Temporary Increase in Volume Cap.--
                (1) In general.--Subsection (d) of section 146 is amended
            by adding at the end the following new paragraph:
                ``(5) Increase and set aside for housing bonds for 2008.--
                        ``(A) Increase for 2008.--In the case of calendar
                    year 2008, the State ceiling for each State shall be
                    increased by an amount equal to $11,000,000,000
                    multiplied by a fraction--
                                ``(i) the numerator of which is the State
                            ceiling applicable to the State for calendar
                            year 2008, determined without regard to this
                            paragraph, and
                                ``(ii) the denominator of which is the sum
                            of the State ceilings determined under clause
                            (i) for all States.
                        ``(B) Set aside.--
                                ``(i) In general.--Any amount of the State
                            ceiling for any State which is attributable to
                            an increase under this paragraph shall be
                            allocated solely for one or more qualified
                            housing issues.
                                ``(ii) Qualified housing issue.--For
                            purposes of this paragraph, the term `qualified
                            housing issue' means--
                                        ``(I) an issue described in section
                                    142(a)(7) (relating to qualified
                                    residential rental projects), or
                                        ``(II) a qualified mortgage issue
                                    (determined by substituting `12-month
                                    period' for `42-month period' each
                                    place it appears in section
                                    143(a)(2)(D)(i)).''.
                (2) Carryforward of unused limitations.--Subsection (f) of
            section 146 is amended by adding at the end the following new
            paragraph:
                ``(6) Special rules for increased volume cap under
            subsection (d)(5).--No amount which is attributable to the
            increase under subsection (d)(5) may be used--
                        ``(A) for any issue other than a qualified housing
                    issue (as defined in subsection (d)(5)), or
                        ``(B) to issue any bond after calendar year
                    2010.''.
        (b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for
    Subprime Refinancing Loans.--
                (1) In general.--Section 143(k) (relating to other
            definitions and special rules) is amended by adding at the end
            the following new paragraph:
                ``(12) Special rules for subprime refinancings.--
                        ``(A) In general.--Notwithstanding the requirements
                    of subsection (i)(1), the proceeds of a qualified
                    mortgage issue may be used to refinance a mortgage on a
                    residence which was originally financed by the
                    mortgagor through a qualified subprime loan.
                        ``(B) Special rules.--In applying subparagraph (A)
                    to any refinancing--
                                ``(i) subsection (a)(2)(D)(i) shall be
                            applied by substituting `12-month period' for
                            `42-month period' each place it appears,
                                ``(ii) subsection (d) (relating to 3-year
                            requirement) shall not apply, and
                                ``(iii) subsection (e) (relating to
                            purchase price requirement) shall be applied by
                            using the market value of the residence at the
                            time of refinancing in lieu of the acquisition
                            cost.
                        ``(C) Qualified subprime loan.--The term `qualified
                    subprime loan' means an adjustable rate single-family
                    residential mortgage loan made after December 31, 2001,
                    and before January 1, 2008, that the bond issuer
                    determines would be reasonably likely to cause
                    financial hardship to the borrower if not refinanced.
                        ``(D) Termination.--This paragraph shall not apply
                    to any bonds issued after December 31, 2010.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to bonds issued after the date of the enactment of this Act.

    SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT
                  HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND
                  REHABILITATION CREDIT.

        (a) Tax-Exempt Interest on Certain Housing Bonds Exempted From
    Alternative Minimum Tax.--
                (1) In general.--Subparagraph (C) of section 57(a)(5)
            (relating to specified private activity bonds) is amended by
            redesignating clauses (iii) and (iv) as clauses (iv) and (v),
            respectively, and by inserting after clause (ii) the following
            new clause:
                                ``(iii) Exception for certain housing
                            bonds.--For purposes of clause (i), the term
                            `private activity bond' shall not include any
                            bond issued after the date of the enactment of
                            this clause if such bond is--
                                        ``(I) an exempt facility bond
                                    issued as part of an issue 95 percent
                                    or more of the net proceeds of which
                                    are to be used to provide qualified
                                    residential rental projects (as defined
                                    in section 142(d)),
                                        ``(II) a qualified mortgage bond
                                    (as defined in section 143(a)), or
                                        ``(III) a qualified veterans'
                                    mortgage bond (as defined in section
                                    143(b)).
                            The preceding sentence shall not apply to any
                            refunding bond unless such preceding sentence
                            applied to the refunded bond (or in the case of
                            a series of refundings, the original bond).''.
                (2) No adjustment to adjusted current earnings.--
            Subparagraph (B) of section 56(g)(4) is amended by adding at
            the end the following new clause:
                                ``(iii) Tax exempt interest on certain
                            housing bonds.--Clause (i) shall not apply in
                            the case of any interest on a bond to which
                            section 57(a)(5)(C)(iii) applies.''.
        (b) Allowance of Low-Income Housing Credit Against Alternative
    Minimum Tax.--Subparagraph (B) of section 38(c)(4) (relating to
    specified credits) is amended by redesignating clauses (ii) through
    (iv) as clauses (iii) through (v) and inserting after clause (i) the
    following new clause:
                                ``(ii) the credit determined under section
                            42 to the extent attributable to buildings
                            placed in service after December 31, 2007,''.
        (c) Allowance of Rehabilitation Credit Against Alternative Minimum
    Tax.--Subparagraph (B) of section 38(c)(4), as amended by subsection
    (b), is amended by striking ``and'' at the end of clause (iv), by
    redesignating clause (v) as clause (vi), and by inserting after clause
    (iv) the following new clause:
                                ``(v) the credit determined under section
                            47 to the extent attributable to qualified
                            rehabilitation expenditures properly taken into
                            account for periods after December 31, 2007,
                            and''.
        (d) Effective Date.--
                (1) Housing bonds.--The amendments made by subsection (a)
            shall apply to bonds issued after the date of the enactment of
            this Act.
                (2) Low income housing credit.--The amendments made by
            subsection (b) shall apply to credits determined under section
            42 of the Internal Revenue Code of 1986 to the extent
            attributable to buildings placed in service after December 31,
            2007.
                (3) Rehabilitation credit.--The amendments made by
            subsection (c) shall apply to credits determined under section
            47 of the Internal Revenue Code of 1986 to the extent
            attributable to qualified rehabilitation expenditures properly
            taken into account for periods after December 31, 2007.

    SEC. 3023. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR
                  TREATMENT AS TAX-EXEMPT BONDS.

        (a) In General.--Subparagraph (A) of section 149(b)(3) (relating to
    exceptions for certain insurance programs) is amended by striking
    ``or'' at the end of clause (ii), by striking the period at the end of
    clause (iii) and inserting ``, or'' and by adding at the end the
    following new clause:
                                ``(iv) subject to subparagraph (E), any
                            guarantee by a Federal home loan bank made in
                            connection with the original issuance of a bond
                            during the period beginning on the date of the
                            enactment of this clause and ending on December
                            31, 2010 (or a renewal or extension of a
                            guarantee so made).''.
        (b) Safety and Soundness Requirements.--Paragraph (3) of section
    149(b) is amended by adding at the end the following new subparagraph:
                        ``(E) Safety and soundness requirements for federal
                    home loan banks.--Clause (iv) of subparagraph (A) shall
                    not apply to any guarantee by a Federal home loan bank
                    unless such bank meets safety and soundness collateral
                    requirements for such guarantees which are at least as
                    stringent as such requirements which apply under
                    regulations applicable to such guarantees by Federal
                    home loan banks as in effect on April 9, 2008.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to guarantees made after the date of the enactment of this Act.

    SEC. 3024. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN
                  AFFIDAVITS.

        (a) In General.--Subsection (b) of section 1445 (relating to
    exemptions) is amended by adding at the end the following:
                ``(9) Alternative procedure for furnishing nonforeign
            affidavit.--For purposes of paragraphs (2) and (7)--
                        ``(A) In general.--Paragraph (2) shall be treated
                    as applying to a transaction if, in connection with a
                    disposition of a United States real property interest--
                                ``(i) the affidavit specified in paragraph
                            (2) is furnished to a qualified substitute, and
                                ``(ii) the qualified substitute furnishes a
                            statement to the transferee stating, under
                            penalty of perjury, that the qualified
                            substitute has such affidavit in his
                            possession.
                        ``(B) Regulations.--The Secretary shall prescribe
                    such regulations as may be necessary or appropriate to
                    carry out this paragraph.''.
        (b) Qualified Substitute.--Subsection (f) of section 1445 (relating
    to definitions) is amended by adding at the end the following new
    paragraph:
                ``(6) Qualified substitute.--The term `qualified
            substitute' means, with respect to a disposition of a United
            States real property interest--
                        ``(A) the person (including any attorney or title
                    company) responsible for closing the transaction, other
                    than the transferor's agent, and
                        ``(B) the transferee's agent.''.
        (c) Exemption Not To Apply if Knowledge or Notice That Affidavit or
    Statement Is False.--
                (1) In general.--Paragraph (7) of section 1445(b) (relating
            to special rules for paragraphs (2) and (3)) is amended to read
            as follows:
                ``(7) Special rules for paragraphs (2), (3), and (9).--
            Paragraph (2), (3), or (9) (as the case may be) shall not apply
            to any disposition--
                        ``(A) if--
                                ``(i) the transferee or qualified
                            substitute has actual knowledge that the
                            affidavit referred to in such paragraph, or the
                            statement referred to in paragraph (9)(A)(ii),
                            is false, or
                                ``(ii) the transferee or qualified
                            substitute receives a notice (as described in
                            subsection (d)) from a transferor's agent,
                            transferee's agent, or qualified substitute
                            that such affidavit or statement is false, or
                        ``(B) if the Secretary by regulations requires the
                    transferee or qualified substitute to furnish a copy of
                    such affidavit or statement to the Secretary and the
                    transferee or qualified substitute fails to furnish a
                    copy of such affidavit or statement to the Secretary at
                    such time and in such manner as required by such
                    regulations.''.
                (2) Liability.--
                        (A) Notice.--Paragraph (1) of section 1445(d)
                    (relating to notice of false affidavit; foreign
                    corporations) is amended to read as follows:
                ``(1) Notice of false affidavit; foreign corporations.--
            If--
                        ``(A) the transferor furnishes the transferee or
                    qualified substitute an affidavit described in
                    paragraph (2) of subsection (b) or a domestic
                    corporation furnishes the transferee an affidavit
                    described in paragraph (3) of subsection (b), and
                        ``(B) in the case of--
                                ``(i) any transferor's agent--
                                        ``(I) such agent has actual
                                    knowledge that such affidavit is false,
                                    or
                                        ``(II) in the case of an affidavit
                                    described in subsection (b)(2)
                                    furnished by a corporation, such
                                    corporation is a foreign corporation,
                                    or
                                ``(ii) any transferee's agent or qualified
                            substitute, such agent or substitute has actual
                            knowledge that such affidavit is false,
                    such agent or qualified substitute shall so notify the
                    transferee at such time and in such manner as the
                    Secretary shall require by regulations.''.
                        (B) Failure to furnish notice.--Paragraph (2) of
                    section 1445(d) (relating to failure to furnish notice)
                    is amended to read as follows:
                ``(2) Failure to furnish notice.--
                        ``(A) In general.--If any transferor's agent,
                    transferee's agent, or qualified substitute is required
                    by paragraph (1) to furnish notice, but fails to
                    furnish such notice at such time or times and in such
                    manner as may be required by regulations, such agent or
                    substitute shall have the same duty to deduct and
                    withhold that the transferee would have had if such
                    agent or substitute had complied with paragraph (1).
                        ``(B) Liability limited to amount of
                    compensation.--An agent's or substitute's liability
                    under subparagraph (A) shall be limited to the amount
                    of compensation the agent or substitute derives from
                    the transaction.''.
                        (C) Conforming amendment.--The heading for section
                    1445(d) is amended by striking ``or Transferee's
                    Agents'' and inserting ``, Transferee's Agents, or
                    Qualified Substitutes''.
        (d) Effective Date.--The amendments made by this section shall
    apply to dispositions of United States real property interests after
    the date of the enactment of this Act.

    SEC. 3025. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR
                  PURPOSES OF THE REHABILITATION CREDIT.

        (a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is amended
    by striking ``section 168(h)'' and inserting ``section 168(h), except
    that `50 percent' shall be substituted for `35 percent' in paragraph
    (1)(B)(iii) thereof''.
        (b) Effective Date.--The amendments made by this section shall
    apply to expenditures properly taken into account for periods after
    December 31, 2007.

    SEC. 3026. EXTENSION OF SPECIAL RULE FOR MORTGAGE REVENUE BONDS FOR
                  RESIDENCES LOCATED IN DISASTER AREAS.

        (a) In General.--Paragraph (11) of section 143(k) is amended--
                (1) by striking ``December 31, 1996'' and inserting ``May
            1, 2008'', and
                (2) by striking ``January 1, 1999'' and inserting ``January
            1, 2010''.
        (b) Effective Date.--The amendments made by this section shall
    apply to bonds issued after May 1, 2008.

    SEC. 3027. TRANSFER OF FUNDS APPROPRIATED TO CARRY OUT 2008 RECOVERY
                  REBATES FOR INDIVIDUALS.

        Of the funds made available by section 101(e)(1)(A) of the Economic
    Stimulus Act of 2008 (Public Law 110-185), the Secretary of the
    Treasury may transfer funds among the accounts specified in such
    section to carry out section 6428 of the Internal Revenue Code of 1986.
    The Secretary shall provide advance notification of any such transfer
    to the Committees on Appropriations of the House of Representatives and
    the Senate, and any transfer greater than $5,000,000 shall be subject
    to the approval of such Committees.

           TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

          Subtitle A--Foreign Currency and Other Qualified Activities

    SEC. 3031. REVISIONS TO REIT INCOME TESTS.

        (a) Foreign Currency Gains Not Gross Income in Applying REIT Income
    Tests.--Section 856 (defining real estate investment trust) is amended
    by adding at the end the following new subsection:
        ``(n) Rules Regarding Foreign Currency Transactions.--
                ``(1) In general.--For purposes of this part--
                        ``(A) passive foreign exchange gain for any taxable
                    year shall not constitute gross income for purposes of
                    subsection (c)(2), and
                        ``(B) real estate foreign exchange gain for any
                    taxable year shall not constitute gross income for
                    purposes of subsection (c)(3).
                ``(2) Real estate foreign exchange gain.--For purposes of
            this subsection, the term `real estate foreign exchange gain'
            means--
                        ``(A) foreign currency gain (as defined in section
                    988(b)(1)) which is attributable to--
                                ``(i) any item of income or gain described
                            in subsection (c)(3),
                                ``(ii) the acquisition or ownership of
                            obligations secured by mortgages on real
                            property or on interests in real property
                            (other than foreign currency gain attributable
                            to any item of income or gain described in
                            clause (i)), or
                                ``(iii) becoming or being the obligor under
                            obligations secured by mortgages on real
                            property or on interests in real property
                            (other than foreign currency gain attributable
                            to any item of income or gain described in
                            clause (i)),
                        ``(B) section 987 gain attributable to a qualified
                    business unit (as defined by section 989) of the real
                    estate investment trust, but only if such qualified
                    business unit meets the requirements under--
                                ``(i) subsection (c)(3) for the taxable
                            year, and
                                ``(ii) subsection (c)(4)(A) at the close of
                            each quarter that the real estate investment
                            trust has directly or indirectly held the
                            qualified business unit, and
                        ``(C) any other foreign currency gain as determined
                    by the Secretary.
                ``(3) Passive foreign exchange gain.--For purposes of this
            subsection, the term `passive foreign exchange gain' means--
                        ``(A) real estate foreign exchange gain,
                        ``(B) foreign currency gain (as defined in section
                    988(b)(1)) which is not described in subparagraph (A)
                    and which is attributable to--
                                ``(i) any item of income or gain described
                            in subsection (c)(2),
                                ``(ii) the acquisition or ownership of
                            obligations (other than foreign currency gain
                            attributable to any item of income or gain
                            described in clause (i)), or
                                ``(iii) becoming or being the obligor under
                            obligations (other than foreign currency gain
                            attributable to any item of income or gain
                            described in clause (i)), and
                        ``(C) any other foreign currency gain as determined
                    by the Secretary.
                ``(4) Exception for income from substantial and regular
            trading.--Notwithstanding this subsection or any other
            provision of this part, any section 988 gain derived by a
            corporation, trust, or association from dealing, or engaging in
            substantial and regular trading, in securities (as defined in
            section 475(c)(2)) shall constitute gross income which does not
            qualify under paragraph (2) or (3) of subsection (c). This
            paragraph shall not apply to income which does not constitute
            gross income by reason of subsection (c)(5)(G).''.
        (b) Addition to REIT Hedging Rule.--Subparagraph (G) of section
    856(c)(5) is amended to read as follows:
                        ``(G) Treatment of certain hedging instruments.--
                    Except to the extent as determined by the Secretary--
                                ``(i) any income of a real estate
                            investment trust from a hedging transaction (as
                            defined in clause (ii) or (iii) of section
                            1221(b)(2)(A)) which is clearly identified
                            pursuant to section 1221(a)(7), including gain
                            from the sale or disposition of such a
                            transaction, shall not constitute gross income
                            under paragraphs (2) and (3) to the extent that
                            the transaction hedges any indebtedness
                            incurred or to be incurred by the trust to
                            acquire or carry real estate assets, and
                                ``(ii) any income of a real estate
                            investment trust from a transaction entered
                            into by the trust primarily to manage risk of
                            currency fluctuations with respect to any item
                            of income or gain described in paragraph (2) or
                            (3) (or any property which generates such
                            income or gain), including gain from the
                            termination of such a transaction, shall not
                            constitute gross income under paragraphs (2)
                            and (3), but only if such transaction is
                            clearly identified as such before the close of
                            the day on which it was acquired, originated,
                            or entered into (or such other time as the
                            Secretary may prescribe).''.
        (c) Authority to Exclude Items of Income From REIT Income Tests.--
    Section 856(c)(5) is amended by adding at the end the following new
    subparagraph:
                        ``(J) Secretarial authority to exclude other items
                    of income.--To the extent necessary to carry out the
                    purposes of this part, the Secretary is authorized to
                    determine, solely for purposes of this part, whether
                    any item of income or gain which--
                                ``(i) does not otherwise qualify under
                            paragraph (2) or (3) may be considered as not
                            constituting gross income for purposes of
                            paragraphs (2) or (3), or
                                ``(ii) otherwise constitutes gross income
                            not qualifying under paragraph (2) or (3) may
                            be considered as gross income which qualifies
                            under paragraph (2) or (3).''.

    SEC. 3032. REVISIONS TO REIT ASSET TESTS.

        (a) Clarification of Valuation Test.--The first sentence in the
    matter following section 856(c)(4)(B)(iii)(III) is amended by inserting
    ``(including a discrepancy caused solely by the change in the foreign
    currency exchange rate used to value a foreign asset)'' after ``such
    requirements''.
        (b) Clarification of Permissible Asset Category.--Section
    856(c)(5), as amended by section 3031(c), is amended by adding at the
    end the following new subparagraph:
                        ``(K) Cash.--If the real estate investment trust or
                    its qualified business unit (as defined in section 989)
                    uses any foreign currency as its functional currency
                    (as defined in section 985(b)), the term `cash'
                    includes such foreign currency but only to the extent
                    such foreign currency--
                                ``(i) is held for use in the normal course
                            of the activities of the trust or qualified
                            business unit which give rise to items of
                            income or gain described in paragraph (2) or
                            (3) of subsection (c) or are directly related
                            to acquiring or holding assets described in
                            subsection (c)(4), and
                                ``(ii) is not held in connection with an
                            activity described in subsection (n)(4).''.

    SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS.

        (a) Net Income From Foreclosure Property.--Clause (i) of section
    857(b)(4)(B) is amended to read as follows:
                                ``(i) gain (including any foreign currency
                            gain, as defined in section 988(b)(1)) from the
                            sale or other disposition of foreclosure
                            property described in section 1221(a)(1) and
                            the gross income for the taxable year derived
                            from foreclosure property (as defined in
                            section 856(e)), but only to the extent such
                            gross income is not described in (or, in the
                            case of foreign currency gain, not attributable
                            to gross income described in) section 856(c)(3)
                            other than subparagraph (F) thereof, over''.
        (b) Net Income From Prohibited Transactions.--Clause (i) of section
    857(b)(6)(B) is amended to read as follows:
                                ``(i) the term `net income derived from
                            prohibited transactions' means the excess of
                            the gain (including any foreign currency gain,
                            as defined in section 988(b)(1)) from
                            prohibited transactions over the deductions
                            (including any foreign currency loss, as
                            defined in section 988(b)(2)) allowed by this
                            chapter which are directly connected with
                            prohibited transactions;''.

                     Subtitle B--Taxable REIT Subsidiaries

    SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

        Section 856(c)(4)(B)(ii) is amended--
                (1) by striking ``20 percent'' and inserting ``25
            percent'', and
                (2) by striking ``REIT subsidiaries'' and all that follows,
            and inserting ``REIT subsidiaries,''.

                            Subtitle C--Dealer Sales

    SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR.

        (a) In General.--Section 857(b)(6) (relating to income from
    prohibited transactions) is amended--
                (1) by striking ``4 years'' in subparagraphs (C)(i),
            (C)(iv), and (D)(i) and inserting ``2 years'',
                (2) by striking ``4-year period'' in subparagraphs (C)(ii),
            (D)(ii), and (D)(iii) and inserting ``2-year period'', and
                (3) by striking ``real estate asset''and all that follows
            through ``if'' in the matter preceding clause (i) of
            subparagraphs (C) and (D), respectively, and inserting ``real
            estate asset (as defined in section 856(c)(5)(B)) and which is
            described in section 1221(a)(1) if''.
        (b) Retention of Existing Law.--Section 857(b)(6) is amended--
                (1) by striking subparagraph (G) and redesignating
            subparagraphs (H) and (I) as subparagraphs (G) and (H),
            respectively, and
                (2) in subparagraph (G), as so redesignated, by adding at
            the end the following: ``For purposes of the preceding
            sentence, the reference to subparagraph (D) shall be a
            reference to such subparagraph as in effect on the day before
            the enactment of the Housing Assistance Tax Act of 2008, as
            modified by subparagraph (G) as so in effect.''.

    SEC. 3052. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

        Section 857(b)(6) is amended--
                (1) by striking the semicolon at the end of subparagraph
            (C)(iii) and inserting ``, or (III) the fair market value of
            property (other than sales of foreclosure property or sales to
            which section 1033 applies) sold during the taxable year does
            not exceed 10 percent of the fair market value of all of the
            assets of the trust as of the beginning of the taxable year;'',
            and
                (2) by adding ``or'' at the end of subclause (II) of
            subparagraph (D)(iv) and by adding at the end of such
            subparagraph the following new subclause:
                                ``(III) the fair market value of property
                            (other than sales of foreclosure property or
                            sales to which section 1033 applies) sold
                            during the taxable year does not exceed 10
                            percent of the fair market value of all of the
                            assets of the trust as of the beginning of the
                            taxable year,''.

                         Subtitle D--Health Care REITs

    SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES.

        (a) Related Party Rentals.--Subparagraph (B) of section 856(d)(8)
    (relating to special rule for taxable REIT subsidiaries) is amended to
    read as follows:
                        ``(B) Exception for certain lodging facilities and
                    health care property.--The requirements of this
                    subparagraph are met with respect to an interest in
                    real property which is a qualified lodging facility (as
                    defined in paragraph (9)(D)) or a qualified health care
                    property (as defined in subsection (e)(6)(D)(i)) leased
                    by the trust to a taxable REIT subsidiary of the trust
                    if the property is operated on behalf of such
                    subsidiary by a person who is an eligible independent
                    contractor. For purposes of this section, a taxable
                    REIT subsidiary is not considered to be operating or
                    managing a qualified health care property or qualified
                    lodging facility solely because it--
                                ``(i) directly or indirectly possesses a
                            license, permit, or similar instrument enabling
                            it to do so, or
                                ``(ii) employs individuals working at such
                            facility or property located outside the United
                            States, but only if an eligible independent
                            contractor is responsible for the daily
                            supervision and direction of such individuals
                            on behalf of the taxable REIT subsidiary
                            pursuant to a management agreement or similar
                            service contract.''.
        (b) Eligible Independent Contractor.--Subparagraphs (A) and (B) of
    section 856(d)(9) (relating to eligible independent contractor) are
    amended to read as follows:
                        ``(A) In general.--The term `eligible independent
                    contractor' means, with respect to any qualified
                    lodging facility or qualified health care property (as
                    defined in subsection (e)(6)(D)(i)), any independent
                    contractor if, at the time such contractor enters into
                    a management agreement or other similar service
                    contract with the taxable REIT subsidiary to operate
                    such qualified lodging facility or qualified health
                    care property, such contractor (or any related person)
                    is actively engaged in the trade or business of
                    operating qualified lodging facilities or qualified
                    health care properties, respectively, for any person
                    who is not a related person with respect to the real
                    estate investment trust or the taxable REIT subsidiary.
                        ``(B) Special rules.--Solely for purposes of this
                    paragraph and paragraph (8)(B), a person shall not fail
                    to be treated as an independent contractor with respect
                    to any qualified lodging facility or qualified health
                    care property (as so defined) by reason of the
                    following:
                                ``(i) The taxable REIT subsidiary bears the
                            expenses for the operation of such qualified
                            lodging facility or qualified health care
                            property pursuant to the management agreement
                            or other similar service contract.
                                ``(ii) The taxable REIT subsidiary receives
                            the revenues from the operation of such
                            qualified lodging facility or qualified health
                            care property, net of expenses for such
                            operation and fees payable to the operator
                            pursuant to such agreement or contract.
                                ``(iii) The real estate investment trust
                            receives income from such person with respect
                            to another property that is attributable to a
                            lease of such other property to such person
                            that was in effect as of the later of--
                                        ``(I) January 1, 1999, or
                                        ``(II) the earliest date that any
                                    taxable REIT subsidiary of such trust
                                    entered into a management agreement or
                                    other similar service contract with
                                    such person with respect to such
                                    qualified lodging facility or qualified
                                    health care property.''.
        (c) Taxable Reit Subsidiaries.--The last sentence of section
    856(l)(3) is amended--
                (1) by inserting ``or a health care facility'' after ``a
            lodging facility'', and
                (2) by inserting ``or health care facility'' after ``such
            lodging facility''.

                          Subtitle E--Effective Dates

    SEC. 3071. EFFECTIVE DATES.

        (a) In General.--Except as otherwise provided in this section, the
    amendments made by this title shall apply to taxable years beginning
    after the date of the enactment of this Act.
        (b) REIT Income Tests.--
                (1) The amendments made by section 3031(a) and (c) shall
            apply to gains and items of income recognized after the date of
            the enactment of this Act.
                (2) The amendment made by section 3031(b) shall apply to
            transactions entered into after the date of the enactment of
            this Act.
        (c) Conforming Foreign Currency Revisions.--
                (1) The amendment made by section 3033(a) shall apply to
            gains recognized after the date of the enactment of this Act.
                (2) The amendment made by section 3033(b) shall apply to
            gains and deductions recognized after the date of the enactment
            of this Act.
        (d) Dealer Sales.--The amendments made by subtitle C shall apply to
    sales made after the date of the enactment of this Act.

                         TITLE III--REVENUE PROVISIONS

                         Subtitle A--General Provisions

    SEC. 3081. ELECTION TO ACCELERATE THE AMT AND RESEARCH CREDITS IN LIEU
                  OF BONUS DEPRECIATION.

        (a) In General.--Section 168(k) is amended by adding at the end the
    following new paragraph:
                ``(4) Election to accelerate the amt and research credits
            in lieu of bonus depreciation.--
                        ``(A) In general.--If a corporation elects to have
                    this paragraph apply for the first taxable year of the
                    taxpayer ending after March 31, 2008, in the case of
                    such taxable year and each subsequent taxable year--
                                ``(i) paragraph (1) shall not apply to any
                            eligible qualified property placed in service
                            by the taxpayer,
                                ``(ii) the applicable depreciation method
                            used under this section with respect to such
                            property shall be the straight line method, and
                                ``(iii) each of the limitations described
                            in subparagraph (B) for any such taxable year
                            shall be increased by the bonus depreciation
                            amount which is--
                                        ``(I) determined for such taxable
                                    year under subparagraph (C), and
                                        ``(II) allocated to such limitation
                                    under subparagraph (E).
                        ``(B) Limitations to be increased.--The limitations
                    described in this subparagraph are--
                                ``(i) the limitation imposed by section
                            38(c), and
                                ``(ii) the limitation imposed by section
                            53(c).
                        ``(C) Bonus depreciation amount.--For purposes of
                    this paragraph--
                                ``(i) In general.--The bonus depreciation
                            amount for any taxable year is an amount equal
                            to 20 percent of the excess (if any) of--
                                        ``(I) the aggregate amount of
                                    depreciation which would be allowed
                                    under this section for eligible
                                    qualified property placed in service by
                                    the taxpayer during such taxable year
                                    if paragraph (1) applied to all such
                                    property, over
                                        ``(II) the aggregate amount of
                                    depreciation which would be allowed
                                    under this section for eligible
                                    qualified property placed in service by
                                    the taxpayer during such taxable year
                                    if paragraph (1) did not apply to any
                                    such property.
                            The aggregate amounts determined under
                            subclauses (I) and (II) shall be determined
                            without regard to any election made under
                            subsection (b)(2)(C), (b)(3)(D), or (g)(7) and
                            without regard to subparagraph (A)(ii).
                                ``(ii) Maximum amount.--The bonus
                            depreciation amount for any taxable year shall
                            not exceed the maximum increase amount under
                            clause (iii), reduced (but not below zero) by
                            the sum of the bonus depreciation amounts for
                            all preceding taxable years.
                                ``(iii) Maximum increase amount.--For
                            purposes of clause (ii), the term `maximum
                            increase amount' means, with respect to any
                            corporation, the lesser of--
                                        ``(I) $30,000,000, or
                                        ``(II) 6 percent of the sum of the
                                    business credit increase amount, and
                                    the AMT credit increase amount,
                                    determined with respect to such
                                    corporation under subparagraph (E).
                                ``(iv) Aggregation rule.--All corporations
                            which are treated as a single employer under
                            section 52(a) shall be treated--
                                        ``(I) as 1 taxpayer for purposes of
                                    this paragraph, and
                                        ``(II) as having elected the
                                    application of this paragraph if any
                                    such corporation so elects.
                        ``(D) Eligible qualified property.--For purposes of
                    this paragraph, the term `eligible qualified property'
                    means qualified property under paragraph (2), except
                    that in applying paragraph (2) for purposes of this
                    paragraph--
                                ``(i) `March 31, 2008' shall be substituted
                            for `December 31, 2007' each place it appears
                            in subparagraph (A) and clauses (i) and (ii) of
                            subparagraph (E) thereof, and
                                ``(ii) only adjusted basis attributable to
                            manufacture, construction, or production after
                            March 31, 2008, and before January 1, 2009,
                            shall be taken into account under subparagraph
                            (B)(ii) thereof.
                        ``(E) Allocation of bonus depreciation amounts.--
                                ``(i) In general.--Subject to clauses (ii)
                            and (iii), the taxpayer shall, at such time and
                            in such manner as the Secretary may prescribe,
                            specify the portion (if any) of the bonus
                            depreciation amount for the taxable year which
                            is to be allocated to each of the limitations
                            described in subparagraph (B) for such taxable
                            year.
                                ``(ii) Limitation on allocations.--The
                            portion of the bonus depreciation amount which
                            may be allocated under clause (i) to the
                            limitations described in subparagraph (B) for
                            any taxable year shall not exceed--
                                        ``(I) in the case of the limitation
                                    described in subparagraph (B)(i), the
                                    excess of the business credit increase
                                    amount over the bonus depreciation
                                    amount allocated to such limitation for
                                    all preceding taxable years, and
                                        ``(II) in the case of the
                                    limitation described in subparagraph
                                    (B)(ii), the excess of the AMT credit
                                    increase amount over the bonus
                                    depreciation amount allocated to such
                                    limitation for all preceding taxable
                                    years.
                                ``(iii) Business credit increase amount.--
                            For purposes of this paragraph, the term
                            `business credit increase amount' means the
                            amount equal to the portion of the credit
                            allowable under section 38 (determined without
                            regard to subsection (c) thereof) for the first
                            taxable year ending after March 31, 2008, which
                            is allocable to business credit carryforwards
                            to such taxable year which are--
                                        ``(I) from taxable years beginning
                                    before January 1, 2006, and
                                        ``(II) properly allocable
                                    (determined under the rules of section
                                    38(d)) to the research credit
                                    determined under section 41(a).
                                ``(iv) AMT credit increase amount.--For
                            purposes of this paragraph, the term `AMT
                            credit increase amount' means the amount equal
                            to the portion of the minimum tax credit under
                            section 53(b) for the first taxable year ending
                            after March 31, 2008, determined by taking into
                            account only the adjusted minimum tax for
                            taxable years beginning before January 1, 2006.
                            For purposes of the preceding sentence, credits
                            shall be treated as allowed on a first-in,
                            first-out basis.
                        ``(F) Credit refundable.--For purposes of section
                    6401(b), the aggregate increase in the credits
                    allowable under part IV of subchapter A for any taxable
                    year resulting from the application of this paragraph
                    shall be treated as allowed under subpart C of such
                    part (and not any other subpart).
                        ``(G) Other rules.--
                                ``(i) Election.--Any election under this
                            paragraph (including any allocation under
                            subparagraph (E)) may be revoked only with the
                            consent of the Secretary.
                                ``(ii) Partnerships with electing
                            partners.--In the case of a corporation making
                            an election under subparagraph (A) and which is
                            a partner in a partnership, for purposes of
                            determining such corporation's distributive
                            share of partnership items under section 702--
                                        ``(I) paragraph (1) shall not apply
                                    to any eligible qualified property, and
                                        ``(II) the applicable depreciation
                                    method used under this section with
                                    respect to such property shall be the
                                    straight line method.
                                ``(iii) Special rule for passenger
                            aircraft.--In the case of any passenger
                            aircraft, the written binding contract
                            limitation under paragraph (2)(A)(iii)(I) shall
                            not apply for purposes of subparagraphs
                            (C)(i)(I) and (D).''.
        (b) Application to Certain Automotive Partnerships.--
                (1) In general.--If an applicable partnership elects the
            application of this subsection--
                        (A) the partnership shall be treated as having made
                    a payment against the tax imposed by chapter 1 of the
                    Internal Revenue Code of 1986 for any applicable
                    taxable year of the partnership in the amount
                    determined under paragraph (3),
                        (B) in the case of any eligible qualified property
                    placed in service by the partnership during any
                    applicable taxable year--
                                (i) section 168(k) of such Code shall not
                            apply in determining the amount of the
                            deduction allowable with respect to such
                            property under section 168 of such Code,
                                (ii) the applicable depreciation method
                            used with respect to such property shall be the
                            straight line method, and
                        (C) the amount of the credit determined under
                    section 41 of such Code for any applicable taxable year
                    with respect to the partnership shall be reduced by the
                    amount of the deemed payment under subparagraph (A) for
                    the taxable year.
                (2) Treatment of deemed payment.--
                        (A) In general.--Notwithstanding any other
                    provision of the Internal Revenue Code of 1986, the
                    Secretary of the Treasury or his delegate shall not use
                    the payment of tax described in paragraph (1) as an
                    offset or credit against any tax liability of the
                    applicable partnership or any partner but shall refund
                    such payment to the applicable partnership.
                        (B) No interest.--The payment described in
                    paragraph (1) shall not be taken into account in
                    determining any amount of interest under such Code.
                (3) Amount of deemed payment.--The amount determined under
            this paragraph for any applicable taxable year shall be the
            least of the following:
                        (A) The amount which would be determined for the
                    taxable year under section 168(k)(4)(C)(i) of the
                    Internal Revenue Code of 1986 (as added by the
                    amendments made by this section) if an election under
                    section 168(k)(4) of such Code were in effect with
                    respect to the partnership.
                        (B) The amount of the credit determined under
                    section 41 of such Code for the taxable year with
                    respect to the partnership.
                        (C) $30,000,000, reduced by the amount of any
                    payment under this subsection for any preceding taxable
                    year.
                (4) Definitions.--For purposes of this subsection--
                        (A) Applicable partnership.--The term ``applicable
                    partnership'' means a domestic partnership that--
                                (i) was formed effective on August 3, 2007,
                            and
                                (ii) will produce in excess of 675,000
                            automobiles during the period beginning on
                            January 1, 2008, and ending on June 30, 2008.
                        (B) Applicable taxable year.--The term ``applicable
                    taxable year'' means any taxable year during which
                    eligible qualified property is placed in service.
                        (C) Eligible qualified property.--The term
                    ``eligible qualified property'' has the meaning given
                    such term by section 168(k)(4)(D) of the Internal
                    Revenue Code of 1986 (as added by the amendments made
                    by this section).
        (c) Conforming Amendment.--Section 1324(b)(2) of title 31, United
    States Code, as amended by this Act, is amended--
                (1) by inserting ``168(k)(4)(F),'' after ``36,'', and
                (2) by inserting ``, or due under section 3081(b)(2) of the
            Housing Assistance Tax Act of 2008'' before the period at the
            end.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years ending after March 31, 2008.

    SEC. 3082. CERTAIN GO ZONE INCENTIVES.

        (a) Use of Amended Income Tax Returns to Take Into Account Receipt
    of Certain Hurricane-Related Casualty Loss Grants by Disallowing
    Previously Taken Casualty Loss Deductions.--
                (1) In general.--Notwithstanding any other provision of the
            Internal Revenue Code of 1986, if a taxpayer claims a deduction
            for any taxable year with respect to a casualty loss to a
            principal residence (within the meaning of section 121 of such
            Code) resulting from Hurricane Katrina, Hurricane Rita, or
            Hurricane Wilma and in a subsequent taxable year receives a
            grant under Public Law 109-148, 109-234, or 110-116 as
            reimbursement for such loss, such taxpayer may elect to file an
            amended income tax return for the taxable year in which such
            deduction was allowed (and for any taxable year to which such
            deduction is carried) and reduce (but not below zero) the
            amount of such deduction by the amount of such reimbursement.
                (2) Time of filing amended return.--Paragraph (1) shall
            apply with respect to any grant only if any amended income tax
            returns with respect to such grant are filed not later than the
            later of--
                        (A) the due date for filing the tax return for the
                    taxable year in which the taxpayer receives such grant,
                    or
                        (B) the date which is 1 year after the date of the
                    enactment of this Act.
                (3) Waiver of penalties and interest.--Any underpayment of
            tax resulting from the reduction under paragraph (1) of the
            amount otherwise allowable as a deduction shall not be subject
            to any penalty or interest under such Code if such tax is paid
            not later than 1 year after the filing of the amended return to
            which such reduction relates.
        (b) Waiver of Deadline on Construction of GO Zone Property Eligible
    for Bonus Depreciation.--
                (1) In general.--Subparagraph (B) of section 1400N(d)(3) is
            amended to read as follows:
                        ``(B) without regard to `and before January 1,
                    2009' in clause (i) thereof, and''.
                (2) Effective date.--The amendment made by this subsection
            shall apply to property placed in service after December 31,
            2007.
        (c) Inclusion of Certain Counties in Gulf Opportunity Zone for
    Purposes of Tax-Exempt Bond Financing.--
                (1) In general.--Subsection (a) of section 1400N is amended
            by adding at the end the following new paragraph:
                ``(8) Inclusion of certain counties.--For purposes of this
            subsection, the Gulf Opportunity Zone includes Colbert County,
            Alabama and Dallas County, Alabama.''.
                (2) Effective date.--The amendment made by this subsection
            shall take effect as if included in the provisions of the Gulf
            Opportunity Zone Act of 2005 to which it relates.

    SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.

        Subsection (b) of section 3101 of title 31, United States Code, is
    amended by striking out the dollar limitation contained in such
    subsection and inserting in lieu thereof $10,615,000,000,000.

                          Subtitle B--Revenue Offsets

    SEC. 3091. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF PAYMENT
                  CARD AND THIRD PARTY NETWORK TRANSACTIONS.

        (a) In General.--Subpart B of part III of subchapter A of chapter
    61 is amended by adding at the end the following new section:

    ``SEC. 6050W. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF
                  PAYMENT CARD AND THIRD PARTY NETWORK TRANSACTIONS.

        ``(a) In General.--Each payment settlement entity shall make a
    return for each calendar year setting forth--
                ``(1) the name, address, and TIN of each participating
            payee to whom one or more payments in settlement of reportable
            payment transactions are made, and
                ``(2) the gross amount of the reportable payment
            transactions with respect to each such participating payee.
    Such return shall be made at such time and in such form and manner as
    the Secretary may require by regulations.
        ``(b) Payment Settlement Entity.--For purposes of this section--
                ``(1) In general.--The term `payment settlement entity'
            means--
                        ``(A) in the case of a payment card transaction,
                    the merchant acquiring entity, and
                        ``(B) in the case of a third party network
                    transaction, the third party settlement organization.
                ``(2) Merchant acquiring entity.--The term `merchant
            acquiring entity' means the bank or other organization which
            has the contractual obligation to make payment to participating
            payees in settlement of payment card transactions.
                ``(3) Third party settlement organization.--The term `third
            party settlement organization' means the central organization
            which has the contractual obligation to make payment to
            participating payees of third party network transactions.
                ``(4) Special rules related to intermediaries.--For
            purposes of this section--
                        ``(A) Aggregated payees.--In any case where
                    reportable payment transactions of more than one
                    participating payee are settled through an
                    intermediary--
                                ``(i) such intermediary shall be treated as
                            the participating payee for purposes of
                            determining the reporting obligations of the
                            payment settlement entity with respect to such
                            transactions, and
                                ``(ii) such intermediary shall be treated
                            as the payment settlement entity with respect
                            to the settlement of such transactions with the
                            participating payees.
                        ``(B) Electronic payment facilitators.--In any case
                    where an electronic payment facilitator or other third
                    party makes payments in settlement of reportable
                    payment transactions on behalf of the payment
                    settlement entity, the return under subsection (a)
                    shall be made by such electronic payment facilitator or
                    other third party in lieu of the payment settlement
                    entity.
        ``(c) Reportable Payment Transaction.--For purposes of this
    section--
                ``(1) In general.--The term `reportable payment
            transaction' means any payment card transaction and any third
            party network transaction.
                ``(2) Payment card transaction.--The term `payment card
            transaction' means any transaction in which a payment card is
            accepted as payment.
                ``(3) Third party network transaction.--The term `third
            party network transaction' means any transaction which is
            settled through a third party payment network.
        ``(d) Other Definitions.--For purposes of this section--
                ``(1) Participating payee.--
                        ``(A) In general.--The term `participating payee'
                    means--
                                ``(i) in the case of a payment card
                            transaction, any person who accepts a payment
                            card as payment, and
                                ``(ii) in the case of a third party network
                            transaction, any person who accepts payment
                            from a third party settlement organization in
                            settlement of such transaction.
                        ``(B) Exclusion of foreign persons.--Except as
                    provided by the Secretary in regulations or other
                    guidance, such term shall not include any person with a
                    foreign address.
                        ``(C) Inclusion of governmental units.--The term
                    `person' includes any governmental unit (and any agency
                    or instrumentality thereof).
                ``(2) Payment card.--The term `payment card' means any card
            which is issued pursuant to an agreement or arrangement which
            provides for--
                        ``(A) one or more issuers of such cards,
                        ``(B) a network of persons unrelated to each other,
                    and to the issuer, who agree to accept such cards as
                    payment, and
                        ``(C) standards and mechanisms for settling the
                    transactions between the merchant acquiring entities
                    and the persons who agree to accept such cards as
                    payment.
            The acceptance as payment of any account number or other
            indicia associated with a payment card shall be treated for
            purposes of this section in the same manner as accepting such
            payment card as payment.
                ``(3) Third party payment network.--The term `third party
            payment network' means any agreement or arrangement--
                        ``(A) which involves the establishment of accounts
                    with a central organization by a substantial number of
                    persons who--
                                ``(i) are unrelated to such organization,
                                ``(ii) provide goods or services, and
                                ``(iii) have agreed to settle transactions
                            for the provision of such goods or services
                            pursuant to such agreement or arrangement,
                        ``(B) which provides for standards and mechanisms
                    for settling such transactions, and
                        ``(C) which guarantees persons providing goods or
                    services pursuant to such agreement or arrangement that
                    such persons will be paid for providing such goods or
                    services.
            Such term shall not include any agreement or arrangement which
            provides for the issuance of payment cards.
        ``(e) Exception for De Minimis Payments by Third Party Settlement
    Organizations.--A third party settlement organization shall be required
    to report any information under subsection (a) with respect to third
    party network transactions of any participating payee only if--
                ``(1) the amount which would otherwise be reported under
            subsection (a)(2) with respect to such transactions exceeds
            $20,000, and
                ``(2) the aggregate number of such transactions exceeds
            200.
        ``(f) Statements to Be Furnished to Persons With Respect to Whom
    Information Is Required.--Every person required to make a return under
    subsection (a) shall furnish to each person with respect to whom such a
    return is required a written statement showing--
                ``(1) the name, address, and phone number of the
            information contact of the person required to make such return,
            and
                ``(2) the gross amount of the reportable payment
            transactions with respect to the person required to be shown on
            the return.
    The written statement required under the preceding sentence shall be
    furnished to the person on or before January 31 of the year following
    the calendar year for which the return under subsection (a) was
    required to be made. Such statement may be furnished electronically,
    and if so, the email address of the person required to make such return
    may be shown in lieu of the phone number.
        ``(g) Regulations.--The Secretary may prescribe such regulations or
    other guidance as may be necessary or appropriate to carry out this
    section, including rules to prevent the reporting of the same
    transaction more than once.''.
        (b) Penalty for Failure to File.--
                (1) Return.--Subparagraph (B) of section 6724(d)(1) is
            amended--
                        (A) by striking ``or'' at the end of clause (xx),
                        (B) by redesignating the clause (xix) that follows
                    clause (xx) as clause (xxi),
                        (C) by striking ``and'' at the end of clause (xxi),
                    as redesignated by subparagraph (B) and inserting
                    ``or'', and
                        (D) by adding at the end the following:
                                ``(xxii) section 6050W (relating to returns
                            to payments made in settlement of payment card
                            transactions), and''.
                (2) Statement.--Paragraph (2) of section 6724(d) is amended
            by striking ``or'' at the end of subparagraph (BB), by striking
            the period at the end of the subparagraph (CC) and inserting
            ``, or'', and by inserting after subparagraph (CC) the
            following:
                        ``(DD) section 6050W(c) (relating to returns
                    relating to payments made in settlement of payment card
                    transactions).''.
        (c) Application of Backup Withholding.--Paragraph (3) of section
    3406(b) is amended by striking ``or'' at the end of subparagraph (D),
    by striking the period at the end of subparagraph (E) and inserting ``,
    or'', and by adding at the end the following new subparagraph:
                        ``(F) section 6050W (relating to returns relating
                    to payments made in settlement of payment card
                    transactions).''.
        (d) Clerical Amendment.--The table of sections for subpart B of
    part III of subchapter A of chapter 61 is amended by inserting after
    the item relating to section 6050V the following:

    ``Sec. 6050W. Returns relating to payments made in settlement of
                                payment card transactions.''.
        (e) Effective Date.--
                (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall apply to
            returns for calendar years beginning after December 31, 2010.
                (2) Application of backup withholding.--
                        (A) In general.--The amendment made by subsection
                    (c) shall apply to amounts paid after December 31,
                    2011.
                        (B) Eligibility for tin matching program.--Solely
                    for purposes of carrying out any TIN matching program
                    established by the Secretary under section 3406(i) of
                    the Internal Revenue Code of 1986--
                                (i) the amendments made this section shall
                            be treated as taking effect on the date of the
                            enactment of this Act, and
                                (ii) each person responsible for setting
                            the standards and mechanisms referred to in
                            section 6050W(d)(2)(C) of such Code, as added
                            by this section, for settling transactions
                            involving payment cards shall be treated in the
                            same manner as a payment settlement entity.

    SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO
                  NONQUALIFIED USE NOT EXCLUDED FROM INCOME.

        (a) In General.--Subsection (b) of section 121 of the Internal
    Revenue Code of 1986 (relating to limitations) is amended by adding at
    the end the following new paragraph:
                ``(4) Exclusion of gain allocated to nonqualified use.--
                        ``(A) In general.--Subsection (a) shall not apply
                    to so much of the gain from the sale or exchange of
                    property as is allocated to periods of nonqualified
                    use.
                        ``(B) Gain allocated to periods of nonqualified
                    use.--For purposes of subparagraph (A), gain shall be
                    allocated to periods of nonqualified use based on the
                    ratio which--
                                ``(i) the aggregate periods of nonqualified
                            use during the period such property was owned
                            by the taxpayer, bears to
                                ``(ii) the period such property was owned
                            by the taxpayer.
                        ``(C) Period of nonqualified use.--For purposes of
                    this paragraph--
                                ``(i) In general.--The term `period of
                            nonqualified use' means any period (other than
                            the portion of any period preceding January 1,
                            2009) during which the property is not used as
                            the principal residence of the taxpayer or the
                            taxpayer's spouse or former spouse.
                                ``(ii) Exceptions.--The term `period of
                            nonqualified use' does not include--
                                        ``(I) any portion of the 5-year
                                    period described in subsection (a)
                                    which is after the last date that such
                                    property is used as the principal
                                    residence of the taxpayer or the
                                    taxpayer's spouse,
                                        ``(II) any period (not to exceed an
                                    aggregate period of 10 years) during
                                    which the taxpayer or the taxpayer's
                                    spouse is serving on qualified official
                                    extended duty (as defined in subsection
                                    (d)(9)(C)) described in clause (i),
                                    (ii), or (iii) of subsection (d)(9)(A),
                                    and
                                        ``(III) any other period of
                                    temporary absence (not to exceed an
                                    aggregate period of 2 years) due to
                                    change of employment, health
                                    conditions, or such other unforeseen
                                    circumstances as may be specified by
                                    the Secretary.
                        ``(D) Coordination with recognition of gain
                    attributable to depreciation.--For purposes of this
                    paragraph--
                                ``(i) subparagraph (A) shall be applied
                            after the application of subsection (d)(6), and
                                ``(ii) subparagraph (B) shall be applied
                            without regard to any gain to which subsection
                            (d)(6) applies.''.
        (b) Effective Date.--The amendment made by this section shall apply
    to sales and exchanges after December 31, 2008.

    SEC. 3093. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

        (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are
    each amended by striking ``December 31, 2008'' and inserting ``December
    31, 2010''.
        (b) Transitional Rule.--Subsection (f) of section 864 is amended by
    adding at the end the following new paragraph:
                ``(7) Transition.--In the case of the first taxable year to
            which this subsection applies, the increase (if any) in the
            amount of the interest expense allocable to sources within the
            United States by reason of the application of this subsection
            shall be 30 percent of the amount of such increase determined
            without regard to this paragraph.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2008.

    SEC. 3094. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

        (a) Repeal of Adjustment for 2012.--Subparagraph (B) of section
    401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is
    amended by striking the percentage contained therein and inserting
    ``100 percent''. No other provision of law which would change such
    percentage shall have any force and effect.
        (b) Modification of Adjustment for 2013.--The percentage under
    subparagraph (C) of section 401(1) of the Tax Increase Prevention and
    Reconciliation Act of 2005 in effect on the date of the enactment of
    this Act is increased by 16.75 percentage points.

        Resolved further, That the House recedes from any remaining amendments to
    the aforesaid bill or disagreements thereto.

                Attest:

                                                                     Clerk.
    110th CONGRESS

      2d Session

                                   H.R. 3221

    _______________________________________________________________________

       HOUSE AMENDMENT TO SENATE AMENDMENT TO HOUSE AMENDMENTS TO SENATE
                                   AMENDMENT