[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 906 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 906
To provide incentives for affordable housing.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 4, 2009
Mrs. Tauscher (for herself, Mr. Cardoza, Ms. Zoe Lofgren of California,
Ms. Berkley, and Mr. Hinchey) introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committee on Ways and Means, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide incentives for affordable housing.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Housing Disaster
Area Foreclosure Prevention Act of 2009''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
TITLE I--EXPANSION OF STATE FORECLOSURE MITIGATION PROGRAMS
Sec. 101. Stabilization of the mortgage revenue bond market.
Sec. 102. TARP assistance for refinancing underwater mortgages.
Sec. 103. Interest rate buy-down for refinancing mortgages and new
mortgages for homes in areas served by
State housing finance agency foreclosure
prevention programs.
Sec. 104. HUD action to increase access to mortgage insurance by State
housing finance agencies.
Sec. 105. State reports on use of refinancing bond authority.
TITLE II--HOUSING TAX INCENTIVES
Sec. 201. Temporary increase in volume cap for housing bonds issued for
areas most affected by foreclosure crisis.
Sec. 202. Extension of time for using increased volume cap for housing
bonds.
Sec. 203. Expansion of use of mortgage revenue bonds for mortgage
refinancing loans.
Sec. 204. Alternative minimum tax limitations not applicable to
refinancings of tax-exempt housing bonds.
Sec. 205. Clarification of applicability to high foreclosure impact
areas.
TITLE I--EXPANSION OF STATE FORECLOSURE MITIGATION PROGRAMS
SEC. 101. STABILIZATION OF THE MORTGAGE REVENUE BOND MARKET.
The Secretary of the Treasury shall take all necessary steps to
support the mortgage revenue bond market, including the use of amounts
made available under title I of the Emergency Economic Stabilization
Act of 2008 to purchase mortgage revenue bonds (as defined in section
143 of the Internal Revenue Code of 1986) at a rate of interest that
makes the housing programs carried out with the proceeds of such bonds
economically feasible.
SEC. 102. TARP ASSISTANCE FOR REFINANCING UNDERWATER MORTGAGES.
(a) Authority.--The Secretary of the Treasury shall carry out a
program to use amounts specified in subsection (e) to reduce the
outstanding debt on qualifying existing underwater mortgages in
connection with the refinancing of such mortgages.
(b) Qualifying Existing Underwater Mortgages.--For purposes of this
section, the term ``qualifying existing underwater mortgage'' means a
mortgage or mortgages on a 1- to 4-family owner-occupied residential
property that has an appraised value that is less than the outstanding
obligation under such mortgage or mortgages.
(c) Terms of Refinancing Mortgage.--The Secretary may use amounts
under the program under this section only with respect to qualifying
existing underwater mortgages that are refinanced under a mortgage that
is eligible to be financed with the proceeds of a mortgage revenue bond
pursuant to section 143(k)(12) of the Internal Revenue Code of 1986.
(d) Recapture of Assistance Amounts.--In making assistance
available under the program under this section with respect to a
qualifying existing underwater mortgage, the Secretary shall take such
actions and enter into such binding agreements as are necessary to
provide for recovery by the Secretary, upon any sale of the residential
property subsequent to the refinancing of the mortgage under such
program, of the lesser of--
(1) an amount equal to 50 percent of any proceeds of the
sale in excess of the amount necessary to fully pay any
outstanding obligations, including interest, under the
refinanced mortgage; or
(2) the amount of assistance provided under the program
with respect to such mortgage.
(e) Use of TARP Amounts.--Of any amounts made available under title
I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211
et seq.), the Secretary of the Treasury shall reserve for use only
under the program under this section, and shall use only under such
program, amounts sufficient to provide assistance under the program in
connection with any mortgage refinanced with the proceeds of a mortgage
revenue bond pursuant to section 143(k)(12) of the Internal Revenue
Code of 1986.
SEC. 103. INTEREST RATE BUY-DOWN FOR REFINANCING MORTGAGES AND NEW
MORTGAGES FOR HOMES IN AREAS SERVED BY STATE HOUSING
FINANCE AGENCY FORECLOSURE PREVENTION PROGRAMS.
(a) Authority.--The Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation shall each carry out a program
under this section to purchase and securitize qualified refinancing
mortgages and qualified new mortgages on single-family housing, in
accordance with this section and policies and procedures that the
Director of the Federal Housing Finance Agency shall establish.
(b) Purchase of Qualified Mortgages.--
(1) Requirement to purchase.--If a lender proffers to an
enterprise, in accordance with requirements established by the
Director, a mortgage or mortgages for purchase under this
section, the enterprise shall make a determination of whether
such mortgage or mortgages are qualified mortgages. Subject to
subsection (h), if the enterprise determines that such mortgage
or mortgages meet the requirements for qualified mortgages, the
enterprise shall make a commitment to purchase, and shall
purchase, the mortgage or mortgages.
(2) Advance commitments.--The Director shall require each
enterprise to establish a procedure for approval of lenders to
receive commitments, in advance of the origination of qualified
mortgages, for purchase of such mortgages under this section by
the enterprise.
(c) Qualified Mortgages.--
(1) Qualified mortgage.--For purposes of this section, the
term ``qualified mortgage'' means a mortgage that is a
qualified refinancing mortgage or a qualified new mortgage.
(2) Qualified refinancing mortgage.--For purposes of this
section, the term ``qualified refinancing mortgage'' means a
mortgage that meets the following requirements:
(A) Single-family housing in housing distress areas
served by state housing finance agency foreclosure
reduction programs.--The property subject to the
mortgage shall be a residence as defined in section 143
of the Internal Revenue Code of 1986 that is located
within a qualified census tract or area of chronic
economic distress (within the meaning given such terms
in section 143(j) of such Code) that is located within
a foreclosure crisis State (as such term is defined in
section 146(d)(6) of such Code).
(B) Principal residence.--The mortgagor under the
mortgage shall satisfy the requirement in section
143(c)(1) of the Internal Revenue Code of 1986.
(C) Refinancing.--The principal loan amount
repayment of which is secured by the mortgage shall be
used to satisfy all indebtedness under an existing
first mortgage that--
(i) was made for purchase of, or
refinancing another first mortgage on, the same
property that is subject to the qualified
refinancing mortgage; and
(ii) was originated on or before January 1,
2008.
(D) Interest rate; term to maturity.--The mortgage
shall--
(i) bear interest at a single annual rate
that is fixed for the entire term of the
mortgage, which shall not exceed the annual
rate that is 100 basis points less than the
prevailing annual interest rate for mortgages
of similar type and term to maturity, as
determined by the Director; and
(ii) have a term to maturity of not less
than 30 years and not more than 40 years from
the date of the beginning of the amortization
of the mortgage.
(E) Underwriting standards.--The mortgage shall
meet such underwriting standards as the Director shall
require.
(F) Waiver of prepayment penalties.--All penalties
for prepayment or refinancing of the underlying
mortgage refinanced by the mortgage, and all fees and
penalties related to the default or delinquency on such
mortgage, shall have been waived or forgiven.
(3) Qualified new mortgage.--For purposes of this section,
the term ``qualified new mortgage'' means a mortgage that meets
the following requirements:
(A) Terms.--The mortgage meets the requirements
under subparagraphs (A), (B), (D), and (E) of paragraph
(2).
(B) Home purchase.--The principal loan amount
repayment of which is secured by the mortgage shall be
used to purchase the property that is subject to the
qualified new mortgage.
(C) New mortgages.--The mortgage was originated on
or after the date of the enactment of this Act.
(d) Exceptions to Underwriting Standards.--Each enterprise shall
establish such exceptions to the underwriting standards of the
enterprise, including downpayment and credit rating standards, that
conform to the underwriting standards established pursuant to
subsection (c)(2)(E), as may be necessary to allow the enterprise to
purchase and securitize qualified refinancing mortgages and qualified
new mortgages under this section, in accordance with such requirements
as the Director shall establish.
(e) Securitization.--
(1) Requirement.--Each enterprise shall, upon such terms
and conditions as it may prescribe, set aside any qualified
mortgages purchased by it under this section and, upon approval
of the Secretary of the Treasury, issue and sell securities
based upon such mortgages set aside.
(2) Form.--Securities issued under this subsection may be
in the form of debt obligations or trust certificates of
beneficial interest, or both.
(3) Terms.--Securities issued under this subsection shall
have such maturities and bear such rate or rates of interest as
may be determined by the enterprise with the approval of the
Secretary.
(4) Exemption.--Securities issued by an enterprise under
this subsection shall, to the same extent as securities which
are direct obligations of or obligations guaranteed as to
principal and interest by the United States, be deemed to be
exempt securities within the meaning of laws administered by
the Securities and Exchange Commission.
(5) Principal and interest payments.--Mortgages set aside
pursuant to this subsection shall at all times be adequate to
enable the issuing enterprise to make timely principal and
interest payments on the securities issued and sold pursuant to
this subsection.
(6) Required disclosure.--Each enterprise shall insert
appropriate language in all of the securities issued under this
subsection clearly indicating that such securities, together
with the interest thereon, are not guaranteed by the United
States and do not constitute a debt or obligation of the United
States or any agency or instrumentality thereof other than the
enterprise.
(f) Federal Reserve Financing Facility.--The Secretary of the
Treasury shall establish a credit facility of the Federal Reserve
System to make credit available to the enterprises at interest rates
comparable to rates on securities issued by the Secretary of the
Treasury under chapter 31 of title 31, United States Code, and having
comparable terms, as determined by the Board.
(g) Definitions.--For purposes of this Act, the following
definitions shall apply:
(1) Director.--The term ``Director'' means the Director of
the Federal Housing Finance Agency.
(2) Enterprise.--The term ``enterprise'' means the Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(h) Termination.--The requirement under subsection (b)(1) for the
enterprises to purchase mortgages shall not apply to any mortgage
proffered to an enterprise after December 31, 2010.
SEC. 104. HUD ACTION TO INCREASE ACCESS TO MORTGAGE INSURANCE BY STATE
HOUSING FINANCE AGENCIES.
The Secretary of Housing and Urban Development shall take all
necessary actions, in consultation and coordination with State housing
finance agencies, to increase access by such agencies to mortgage
insurance for the purpose of making such insurance available in
connection with mortgages financed by bonds issued by such agencies
pursuant to this Act and the amendments made by this Act.
SEC. 105. STATE REPORTS ON USE OF REFINANCING BOND AUTHORITY.
Not later than the expiration of the 6-month period beginning upon
the date of the enactment of this Act and every six months thereafter
until the refinancing bond authority provided by the amendments made by
title II of this Act has been exhausted, each State using the
refinancing authority provided by the amendments made by section 3021
of the Housing and Economic Recovery Act of 2008 (Public Law 110-289;
122 Stat. 2892) shall submit a report to the Congress specifying--
(1) the amount of the refinancing bond authority provided
for the State under the amendments made by such section 3021
and title II of this Act that remains;
(2) the number of homes that have been refinanced using
such refinancing authority of the State; and
(3) the counties and municipalities in the State in which
homes are located that are subject to mortgages refinanced
using such refinancing authority and the amount of such
authority used with respect to each such county and
municipality.
TITLE II--HOUSING TAX INCENTIVES
SEC. 201. TEMPORARY INCREASE IN VOLUME CAP FOR HOUSING BONDS ISSUED FOR
AREAS MOST AFFECTED BY FORECLOSURE CRISIS.
(a) In General.--Subsection (d) of section 146 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(6) Increase and set aside for housing bonds for 2009.--
``(A) Increase of 2009.--In the case of calendar
year 2009, the State ceiling for each foreclosure
crisis State shall be increased by the sum of--
``(i) an amount equal to $10,000,000,000
multiplied by a fraction--
``(I) the numerator of which is the
number of foreclosures in such State,
and
``(II) the denominator of which is
the aggregate number of foreclosures in
all foreclosure crisis States, plus
``(ii) an amount equal to $10,000,000,000
multiplied by a fraction--
``(I) the numerator of which is the
number of single family residences in
such State with mortgages that are more
than 30 days past due, and
``(II) the denominator of which is
the aggregate number of single family
residences in all foreclosure crisis
States with mortgages that more than 30
days past due.
``(B) Set aside.--Any amount of the State ceiling
for any foreclosure crisis State which is attributable
to an increase under this paragraph shall be allocated
solely for one or more qualified housing issues (as
defined in paragraph (5)). The State shall ensure that
such issues (to the extent attributable to an increase
under this paragraph) are used to finance housing in
the counties and municipalities of the State which
experience the highest number of foreclosures, or have
the highest number of residences with mortgages that
are more than 30 days past due, per capita.
``(C) Foreclosure crisis state.--For purposes of
this paragraph, the term `foreclosure crisis State'
means the 10 States determined by the Secretary as
having been the most impacted by the foreclosure
crisis. In making such determination the Secretary
shall take into account the rate of foreclosures in the
States, the rate of single family residences in the
States with mortgages that are more than 30 days past
due, and such other factors as the Secretary determines
appropriate.''.
(b) Carryforward of Unused Limitations.--Paragraph (6) of section
146(f) of the Internal Revenue Code of 1986 is amended--
(1) by striking ``subsection (d)(5)'' in the text preceding
subparagraph (A) and inserting ``paragraph (5) or (6) of
subsection (d)'', and
(2) by striking ``increased volume cap under subsection
(d)(5)'' in the heading thereof and inserting ``temporary
increased volume cap''.
(c) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 202. EXTENSION OF TIME FOR USING INCREASED VOLUME CAP FOR HOUSING
BONDS.
(a) In General.--Subparagraph (B) of section 146(f)(6) of the
Internal Revenue Code of 1986 is amended by striking ``2010'' and
inserting ``2011''.
(b) Report.--Not later than December 31, 2010, the Secretary of the
Treasury shall submit a written report to Congress regarding whether or
not, considering the stability of the housing markets, the
liberalization of the tax-exempt housing bond rules included in
sections 146(d)(5), 146(d)(6), and 143(k)(12) of the Internal Revenue
Code of 1986 should be extended beyond December 31, 2011.
SEC. 203. EXPANSION OF USE OF MORTGAGE REVENUE BONDS FOR MORTGAGE
REFINANCING LOANS.
(a) In General.--Subparagraph (C) of section 143(k)(12) of the
Internal Revenue Code of 1986 is amended by striking ``adjustable
rate''.
(b) Extension of Program.--Subparagraph (D) of section 143(k)(12)
of such Code is amended by striking ``December 31, 2010'' and inserting
``December 31, 2011''.
(c) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 204. ALTERNATIVE MINIMUM TAX LIMITATIONS NOT APPLICABLE TO
REFINANCINGS OF TAX-EXEMPT HOUSING BONDS.
(a) In General.--Clause (iii) of section 57(a)(5)(C) of the
Internal Revenue Code of 1986 is amended by striking the last sentence
thereof.
(b) Effective Date.--The amendment made by this section shall apply
to refunding bonds issued after the date of the enactment of this Act.
SEC. 205. CLARIFICATION OF APPLICABILITY TO HIGH FORECLOSURE IMPACT
AREAS.
(a) In General.--Subsection (j) of section 143 of the Internal
Revenue Code of 1986 is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by striking ``or'',
(B) in subparagraph (B), by striking the period at
the end and inserting ``, or'', and
(C) by adding at the end the following new
subparagraph:
``(C) a high foreclosure area.''; and
(2) by adding at the end the following new paragraph:
``(4) High foreclosure area.--
``(A) In general.--For purposes of paragraph (1),
the term `high foreclosure area' means an area for
which the rate of--
``(i) foreclosures on mortgages on
residences occurring during the preceding 12
months, and
``(ii) notices provided to mortgagors
during the preceding calendar quarter,
specifying that payment of amounts due under a
mortgage on a residence is at least 30 days
past due,
exceeds 150 percent of the national rate.
``(B) Date used.--The determination under
subparagraph (A) shall be made on the basis of the best
data available to a State on a quarterly basis.''.
(b) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
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