[House Report 109-254]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-254

======================================================================



 
   PROVIDING FOR CONSIDERATION OF H.R. 1461, FEDERAL HOUSING FINANCE 
                           REFORM ACT OF 2005

                                _______
                                

  October 25, 2005.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Sessions, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 509]

    The Committee on Rules, having had under consideration 
House Resolution 509, by a record vote of 7 to 3, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 1461, 
the Federal Housing Finance Reform Act of 2005, under a 
structured rule. The rule provides one hour of general debate 
equally divided and controlled by the chairman and ranking 
minority member of the Committee on Financial Services. The 
rule waives all points of order against consideration of the 
bill.
    The rule provides that the amendment in the nature of a 
substitute recommended by the Committee on Financial Services 
now printed in the bill shall be considered as an original bill 
for the purpose of amendment and shall be considered as read. 
The rule waives all points of order against the committee 
amendment in the nature of a substitute.
    The rule makes in order only those amendments printed in 
this report. The rule provides that the amendments made in 
order may be offered only in the order printed in this report, 
may be offered only by a Member designated in this report, 
shall be considered as read, shall be debatable for the time 
specified in this report equally divided and controlled by the 
proponent and an opponent, shall not be subject to amendment, 
and shall not be subject to a demand for division of the 
question in the House or in the Committee of the Whole. The 
rule waives all points of order against the amendments printed 
in this report.
    Finally, the rule provides one motion to recommit with or 
without instructions.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against the bill is 
necessary because the bill, as reported by the Committee in 
Financial Services, is in violation of section 302 of the 
Congressional Budget Act, because the Financial Services 
Committee does not have any remaining allocation of direct 
spending. The proposed manager's amendment modifies the bill 
such that its revenue increases match or exceed its spending 
increases, thereby remedying the violation of the Budget Act.

                            COMMITTEE VOTES

    Pursuant to clause 3(b) of House rule XIII the results of 
each record vote on an amendment or motion to report, together 
with the names of those voting for and against, are printed 
below:

Rules Committee record vote No. 134

    Date: October 25, 2005.
    Measure: H.R. 1461, Federal Housing Finance Reform Act of 
2005.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Rep. Frank 
which permits non-profits that have affordable housing as among 
their primary purposes, rather than as their sole purpose, to 
qualify for funding from the Affordable Housing Funds. Allows a 
non-profit applicant to the Affordable Housing Fund or its 
affiliates to engage in non-partisan voter registration, voter 
identification, and get-out-the-vote activities using their own 
funds.
    Results: Defeated 3 to 7.
    Vote by Members: Hastings (WA)--Nay; Sessions--Nay; 
Putnam--Nay; Capito--Nay; Cole--Nay; Bishop--Nay; McGovern--
Yea; Hastings (FL)--Yea; Matsui--Yea; Dreier--Nay.

Rules Committee record vote No. 135

    Date: October 25, 2005.
    Measure: H.R. 1461, Federal Housing Finance Reform Act of 
2005.
    Motion by: Mr. Hastings of Washington.
    Summary of motion: To report the rule.
    Results: Agreed to 7 to 3.
    Vote by Members: Hastings (WA)--Yea; Sessions--Yea; 
Putnam--Yea; Capito--Yea; Cole--Yea; Bishop--Yea; McGovern--
Nay; Hastings (FL)--Nay; Matsui--Nay; Dreier--Yea.

                  SUMMARY OF AMENDMENTS MADE IN ORDER

    (Summaries derived from information provided by the 
sponsors.)
    1. Oxley: Manager's Amendment. Expands the affordable 
housing role of Fannie Mae and Freddie Mac. Includes new 
sections on new single-family and multi-family housing goals, 
duty to serve lower-income markets, and a new affordable 
housing fund with contributions from the enterprises. The 
amendment moves the effective date of the entire bill up from 
one year to six months following enactment, including the 
affordable housing fund. For the first two years, Fannie Mae 
and Freddie Mac will contribute 3.5% of after-tax earnings, and 
subsequently 5% of such earnings. 25% of the GSEs' 
contributions will go annually to the Treasury Department to 
help payoff REFCorp (S&L) bonds, with the remainder going to 
the fund. The amendment sunsets the fund in five years, when 
its extension will be considered. During the first two years, 
priority consideration will be given to areas impacted by 
Hurricanes Katrina and Rita, thereafter priority in funding 
will be based on greatest impact, geographic diversity, timely 
action, as well as other disaster area needs. Eligible 
recipients--for-profit builders, state housing agencies, and 
non-profit organizations--must have a demonstrated capacity for 
affordable housing activities and make assurances that they 
will comply with limits on the use of funds. Funds may not be 
used for political activities, advocacy, lobbying, counseling 
services, travel expenses, and tax return advice. Non-profit 
recipients must have affordable housing as their primary 
purpose and, beginning one-year before applying, non-profits 
and their affiliates cannot have engaged in federal election 
activity, electioneering communication, or lobbying. Recipient 
use of funds will be closely tracked. Those misusing funds will 
be permanently barred from participation and must make 
reimbursement. The amendment also clarifies that federally 
recognized tribes and Alaskan Native villages qualify for 
funding under the Affordable Housing Fund established by the 
bill. In addition, the amendment includes a request from the 
Judiciary Committee to require consultation with the Attorney 
General by the GSE regulator when exercising new litigation 
authority, and from the Government Reform Committee to remove a 
FOIA exemption for the proceedings of the new agency's 
oversight board. The Federal Housing Finance Agency will 
establish an ombudsman to hear complaints and appeals from the 
GSEs and those having business relationships with the GSEs. 
H.R. 1461 consolidates current GSE regulation by two agencies 
and HUD into one agency. The manager's amendment clarifies that 
existing rules and regulations will remain in force during the 
six-month transition period and until changed by the new 
Federal Housing Finance Agency. (20 minutes)
    2. Carson: Permits personal property loans secured by 
manufactured housing to be considered in determining whether a 
GSE has met its duty to serve underserved markets. Permits 
manufactured homes that have not been attached to ground owned 
by a manufactured home owner to count towards this goal. (10 
minutes).
    3. Davis, Artur (AL): Clarifies the definition of ``rural'' 
to make it consistent with the same definition in the Housing 
Act of 1949. Retains ``micro-politan area'' and ``tribal trust 
lands'' as part of the definition. (10 minutes).
    4. Leach: Gives the newly created regulator (FHFA) greater 
authority to impose capital strictures on GSEs. (10 minutes).
    5. Royce: Authorizes the regulator to require one or both 
of the enterprises to dispose or acquire assets or liabilities 
if the regulator deems those assets or liabilities to be a 
potential systemic risk to the housing market, the capital 
markets, or the financial system. (10 minutes).
    6. Paul: Eliminates the ability of Fannie Mae, Freddie Mac, 
and the Federal Home Loan Bank Board to borrow from the 
Treasury. (10 minutes).
    7. Garrett: Strikes the language in the bill that raises 
the Conforming Loan Limit. (10 minutes).
    8. Sanchez, Loretta: Adds ``alternative credit scoring'' as 
an additional element to the Annual Housing Report Regarding 
Regulated Entities (Section 1324). (10 minutes).
    9. Kanjorski: Restores Presidential appointees on the 
boards of Fannie Mae and Freddie Mac by retaining the 
regulatory appointees on the boards of the Federal Home Loan 
Banks. Makes modifications to the boards of the Federal Home 
Loan Banks related to the number of regulatory appointees, the 
expertise of appointees in community and economic development, 
and the allowable continued service of appointees after the 
expiration of their terms. (10 minutes).

                    TEXT OF AMENDMENTS MADE IN ORDER

 1. An Amendment To Be Offered by Representative Oxley of Ohio, or His 
                Designee, To Be Debatable for 20 Minutes

  Page 6, strike lines 3 through 5 and insert the following new 
subparagraph:
                  ``(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; and''.
  Page 12, line 8, strike the quotations marks and the last 
period.
  Page 12, after line 8, insert the following new subsection:
  ``(g) Ombudsman.--The Director shall establish, by 
regulation, an Office of the Ombudsman in the Agency. Such 
regulations shall provide that the Ombudsman will consider 
complaints and appeals from any regulated entity and any person 
that has a business relationship with a regulated entity and 
shall specify the duties and authority of the Ombudsman.''.
  Page 15, line 2, before the period insert ``, or request that 
the Attorney General of the United States act on behalf of the 
Director''.
  Page 15, after line 2, insert the following new paragraph:
          ``(2) Consultation with attorney general.--The 
        Director shall provide notice to, and consult with, the 
        Attorney General of the United States before taking an 
        action under paragraph (1) of this subsection or under 
        section 1344(a), 1345(d), 1348(c), 1372(e), 1375(a), 
        1376(d), or 1379D(c), except that, if the Director 
        determines that any delay caused by such prior notice 
        and consultation may adversely affect the safety and 
        soundness responsibilities of the Director under this 
        title, the Director shall notify the Attorney General 
        as soon as reasonably possible after taking such 
        action.''.
  Page 15, line 3, strike ``(2)'' and insert ``(3)''.
  Page 25, line 13, after the period insert quotation marks and 
a period.
  Page 25, strike lines 14 through 16.
  Page 66, after line 12 add the following new subsection:
  (e) Effective Date.--This section shall take effect on the 
date of the enactment of this Act.
  Page 102, after line 19, insert the following new 
subparagraph:
                  ``(A) Mortgages that finance dwelling units 
                for low-income families.''.
  Page 102, line 20, strike ``(A)'' and insert ``(B)''.
  Page 102, line 22, strike ``(B)'' and insert ``(C)''.
  Strike line 17 on page 119 and all that follows through line 
9 on page 138 and insert the following:

SEC. 128. AFFORDABLE HOUSING FUND.

  (a) In General.--The Housing and Community Development Act of 
1992 is amended by striking sections 1337 and 1338 (12 U.S.C. 
4562 note) and inserting the following new section:

``SEC. 1337. AFFORDABLE HOUSING FUND.

  ``(a) Establishment and Purpose.--Each enterprise shall 
establish and manage an affordable housing fund in accordance 
with this section. The purpose of the affordable housing fund 
shall be--
          ``(1) to increase homeownership for extremely low-and 
        very low-income families;
          ``(2) to increase investment in housing in low-income 
        areas, and areas designated as qualified census tracts 
        or an area of chronic economic distress pursuant to 
        section 143(j) of the Internal Revenue Code of 1986 (26 
        U.S.C. 143(j));
          ``(3) to increase and preserve the supply of rental 
        and owner-occupied housing for extremely low- and very 
        low-income families;
          ``(4) to increase investment in public infrastructure 
        development in connection with housing assisted under 
        this section; and
          ``(5) to leverage investments from other sources in 
        affordable housing and in public infrastructure 
        development in connection with housing assisted under 
        this section
  ``(b) Allocation of Amounts by Enterprises.--
          ``(1) In general.--In accordance with regulations 
        issued by the Director under subsection (k) and subject 
        to paragraphs (2) and (3) of this subsection and 
        subsection (f)(5), each enterprise shall allocate to 
        the affordable housing fund established under 
        subsection (a) by the enterprise--
                  ``(A) in the year in which the effective date 
                under section 185 of the Federal Housing 
                Finance Reform Act of 2005 occurs, 3.5 percent 
                of the after-tax income of the enterprise for 
                the preceding year;
                  ``(B) in the year after the year referred to 
                in subparagraph (A), 3.5 percent of the after-
                tax income of the enterprise for the preceding 
                year; and
                  ``(C) in each of the first three years after 
                the year referred to in subparagraph (B), 5 
                percent of the after-tax income of the 
                enterprise for the preceding year.
          ``(2) Limitation.--An enterprise shall not be 
        required to make an allocation for a year to the 
        affordable housing fund of the enterprise established 
        under subsection (a) unless the enterprise generated 
        after-tax income for the preceding year.
          ``(3) Suspension of contributions.--The Director 
        shall temporarily suspend the allocation under 
        paragraph (1) by an enterprise to the affordable 
        housing fund of the enterprise upon a finding by the 
        Director that such allocations--
                  ``(A) are contributing, or would contribute, 
                to the financial instability of the enterprise;
                  ``(B) are causing, or would cause, the 
                enterprise to be classified as 
                undercapitalized; or
                  ``(C) are preventing, or would prevent, the 
                enterprise from successfully completing a 
                capital restoration plan under section 1369C.
          ``(4) 5-year sunset and report.--
                  ``(A) Sunset.--The enterprises shall not be 
                required to make allocations to the affordable 
                housing funds in the 5th year after the year in 
                which the effective date under section 185 of 
                the Federal Housing Finance Reform Act of 2005 
                occurs or in any year thereafter.
                  ``(B) Report on program continuance.--Not 
                later 6 months before the end of the last year 
                in which the allocations are required under 
                paragraph (1), 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 making recommendations on whether the 
                program under this section, including the 
                requirement for the enterprises to make 
                allocations to the affordable housing funds, 
                should be extended and on any modifications for 
                the program.
          ``(5) Determination of after-tax income.--For 
        purposes of this section, the term `after-tax income' 
        means, with respect to an enterprise for a year, the 
        amount reported by the enterprise for such year in the 
        enterprise's annual report for such year that is filed 
        with the Securities and Exchange Commission, except 
        that for any year in which no such filing is made by an 
        enterprise or such filing is not timely made, such term 
        means the amount determined by the Director based on 
        the income tax return filings of the enterprise.
  ``(c) Selection of Activities Funded Using Affordable Housing 
Fund Amounts.--Amounts from the affordable housing fund of the 
enterprise may be used, or committed for use, only for 
activities that--
          ``(1) are eligible under subsection (d) for such use; 
        and
          ``(2) are selected for funding by the enterprise in 
        accordance with the process and criteria for such 
        selection established pursuant to subsection (k)(2)(C).
  ``(d) Eligible Activities.--Amounts from the affordable 
housing fund of an enterprise shall be eligible for use, or for 
commitment for use, only for assistance for--
          ``(1) the production, preservation, and 
        rehabilitation of rental housing, including housing 
        under the programs identified in section 1335(a)(2)(B), 
        except that amounts provided from the Fund may be used 
        for the benefit only of extremely low- and very low-
        income families;
          ``(2) the production, preservation, and 
        rehabilitation of housing for homeownership, including 
        such forms as downpayment assistance, closing cost 
        assistance, and assistance for interest-rate buy-downs, 
        that--
                  ``(A) 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 section be 
                        considered to refer to assistance from 
                        the affordable housing fund of the 
                        enterprise;
                  ``(B) has an initial purchase price that 
                meets the requirements of section 215(b)(1) of 
                the Cranston-Gonzalez National Affordable 
                Housing Act; and
                  ``(C) 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
          ``(3) public infrastructure development activities in 
        connection with housing activities funded under 
        paragraph (1) or (2).
  ``(e) Eligible Recipients.--
          ``(1) In general.--Amounts from the affordable 
        housing fund of an enterprise may be provided only to a 
        recipient that is an organization, agency, or other 
        entity (including a for-profit entity, a nonprofit 
        entity, a federally recognized tribe, an Alaskan Native 
        village, and a faith-based organization) that--
                  ``(A) has a demonstrated capacity for 
                carrying out activities of the type that are to 
                be funded with such affordable housing fund 
                amounts; and
                  ``(B) makes such assurances to the enterprise 
                as the Director shall, by regulation, require 
                to ensure that the recipient will comply with 
                the requirements of this section (including, in 
                the case of any organization, agency, or entity 
                subject to paragraph (2), all of the 
                requirements specified under such paragraph) 
                during the entire period that begins upon 
                selection of the recipient to receive amounts 
                from the affordable housing fund of the 
                enterprise and ending upon the conclusion of 
                all activities under subsection (d) that are 
                engaged in by the recipient and funded with 
                such affordable housing fund amounts; and
                  ``(C) in the case of any recipient who is not 
                a for-profit entity or a government agency or 
                authority, complies with all of the 
                requirements under paragraph (2).
          ``(2) Additional requirements for recipients other 
        than for-profit entities.--The requirements under this 
        paragraph with respect to any organization, agency, or 
        entity that is not a for-profit entity or a government 
        agency or authority are that the organization, agency, 
        or entity--
                  ``(A) shall have as its primary purpose the 
                provision of affordable housing, as defined by 
                the Director;
                  ``(B) shall make such assurances to the 
                enterprise as the Director shall, by 
                regulation, require to ensure that such 
                affordable housing fund amounts--
                          ``(i) are used only to supplement, 
                        and to the extent practical, to 
                        increase the level of funds that would, 
                        in the absence of amounts made 
                        available from the affordable housing 
                        fund, be made available from other 
                        sources for the recipient to carry out 
                        activities of the type that are 
                        eligible under subsection (d) for 
                        funding with affordable housing fund 
                        amounts; and
                          ``(ii) are not in any case used so as 
                        to supplant any funds from other 
                        sources that are made available for 
                        such activities of the recipient; and
                  ``(C) does not, at the time during the period 
                that begins 12 months before submission of an 
                application for funding from the affordable 
                housing fund of the enterprise and ending upon 
                the expiration of the period referred to in 
                paragraph (1)(B)--
                          ``(i) engage in any Federal election 
                        activity, as such term is defined in 
                        paragraph (20) of section 301 of the 
                        Federal Election Campaign Act of 1971 
                        (2 U.S.C. 431(20)), except that, 
                        notwithstanding the 120-day limitation 
                        in subparagraph (A)(i) of such 
                        paragraph, such term shall include 
                        voter registration activity during any 
                        period;
                          ``(ii) make any expenditure for any 
                        electioneering communication (as such 
                        term is defined in section 304(f)(3) of 
                        the Federal Election Campaign Act of 
                        1971 (2 U.S.C. 434(f)(3));
                          ``(iii) make any lobbying 
                        expenditure, (as such term is defined 
                        in such section 501(h)(2)), except that 
                        this clause shall not apply to any such 
                        expenditure by an organization 
                        described in section 501(c)(3) of the 
                        Internal Revenue Code of 1986 that is 
                        exempt from taxation under subsection 
                        (a) of such section 501, to the extent 
                        that such expenditure does not exceed 
                        the amount under such Code for which 
                        such exemption may be denied; or
                          ``(iv) maintain any affiliation with 
                        any organization, agency, or other 
                        entity that does not comply with 
                        clauses (i), (ii), and (iii) of this 
                        subparagraph.
          ``(3) Affiliation.--
                  ``(A) In general.--A recipient organization, 
                agency, or entity shall be considered to be 
                affiliated with another entity, for purposes of 
                paragraph (2), if such recipient entity 
                controls, is controlled by, or is under common 
                control with such other entity.
                  ``(B) Control.--The existence of any of the 
                following relationships between a recipient 
                entity and another entity shall indicate that 
                control exists for purposes of subparagraph 
                (A):
                          ``(i) Overlapping board membership.--
                        Individuals serve in a similar capacity 
                        as officers, executives, or staff of 
                        both the recipient entity and the other 
                        entity.
                          ``(ii) Shared resources.--The 
                        recipient entity and the other entity 
                        share office space, staff members, 
                        supplies, resources, or marketing 
                        materials, including Internet and other 
                        forms of public communication.
                          ``(iii) Funding.--The recipient 
                        entity receives more than 20 percent of 
                        its total funding from such other 
                        entity or provides more than 20 percent 
                        of the total funding of such other 
                        entity.
                          ``(iv) Other.--The recipient entity 
                        or such other entity exhibits any other 
                        indicia of substantial overlap or 
                        common control as may be set forth in 
                        regulation by the Director.
          ``(4) For profit.--For purposes of this subsection, 
        the term `for-profit entity' means any entity any part 
        of the net earnings of which inure to the benefit of 
        any private shareholder, member, founder, contributor, 
        or individual.
  ``(f) Limitations on Use.--
          ``(1) Required amount for refcorp.--Of any amounts 
        allocated pursuant to subsection (b) in each year to 
        the affordable housing fund of an enterprise, 25 
        percent shall be used as provided in section 
        21B(f)(2)(E) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441b(f)(2)(E)).
          ``(2) Required amount for homeownership activities.--
        Of any amounts allocated pursuant to subsection (b) in 
        each year to the affordable housing fund of an 
        enterprise, not less than 10 percent shall be used for 
        activities under paragraph (2) of subsection (d).
          ``(3) Maximum amount for public infrastructure 
        development activities in connection with affordable 
        housing activities.--Of any amounts allocated pursuant 
        to subsection (b) in each year to the affordable 
        housing fund of an enterprise, not more than 12.5 
        percent may be used for activities under paragraph (3) 
        of subsection (d).
          ``(4) Deadline for commitment or use.--Any amounts 
        allocated to the affordable housing fund of an 
        enterprise shall be used or committed for use within 
        two years of the date of such allocation.
          ``(5) Use of returns.--The Director shall, by 
        regulation--
                  ``(A) provide that any return on a loan or 
                other investment of any amounts allocated 
                pursuant to subsection (b) to the affordable 
                housing fund of an enterprise shall count 
                against the allocation required under 
                subsection (b) to be made by the enterprise for 
                the year following such return; and
                  ``(B) establish such limitations as may be 
                necessary to ensure that the amount or 
                likelihood of return is not the primary 
                consideration of awarding of allocated amounts 
                to recipients.
          ``(6) Prohibited uses.--The Director shall--
                  ``(A) by regulation, set forth prohibited 
                uses of amounts from the affordable housing 
                funds of the enterprises, 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;
                  ``(B) by regulation, provide that, except as 
                provided in subparagraph (C), amounts allocated 
                to the affordable housing fund of an enterprise 
                may not be used for administrative, outreach, 
                or other costs of--
                          ``(i) the enterprise; or
                          ``(ii) any recipient of amounts from 
                        the affordable housing fund; and
                  ``(C) by regulation, limit the amount of any 
                such contributions that may be used for 
                administrative costs of the enterprise of 
                maintaining the affordable housing fund and 
                carrying out the program under this section.
          ``(7) Prohibition of consideration of use for meeting 
        housing goals.--In determining compliance with the 
        housing goals under this subpart, the Director may not 
        consider amounts used under this section for eligible 
        activities under subsection (d). The Director shall 
        give credit toward the achievement of such housing 
        goals to purchases of mortgages for housing that 
        receives funding under this section, but only to the 
        extent that such purchases are funded other than under 
        this section.
          ``(8) Prohibition on certain redistribution of 
        amounts.--The Director shall, by regulation, ensure 
        that amounts from the affordable housing fund of an 
        enterprise awarded under this section to a national 
        nonprofit housing intermediary are not redistributed to 
        other nonprofit entities.
  ``(g) Accountability of Recipients and Enterprises.--
          ``(1) Recipients.--
                  ``(A) Tracking of funds.--The Director 
                shall--
                          ``(i) require each enterprise to 
                        develop and maintain a system to ensure 
                        that each recipient of amounts from the 
                        affordable housing fund of the 
                        enterprise 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 enterprises 
                        and recipients, regarding grants from 
                        the affordable housing funds of the 
                        enterprises, which shall include--
                                  ``(I) appropriate continuing 
                                financial and project 
                                reporting, record retention, 
                                and audit requirements for the 
                                duration of the grant to ensure 
                                compliance with the limitations 
                                and requirements of this 
                                section and the regulation 
                                under this section; and
                                  ``(II) any other requirements 
                                that the Director determines 
                                are necessary to ensure 
                                appropriate grant 
                                administration and compliance.
                  ``(B) Misuse of funds.--If an enterprise 
                determines that any recipient of amounts from 
                the affordable housing fund of the enterprise 
                has 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--
                          ``(i) the enterprise shall notify the 
                        Director of such misuse of amounts and 
                        the actions taken under this 
                        subparagraph with respect to the 
                        recipient;
                          ``(ii) such recipient shall be 
                        ineligible in perpetuity to receive of 
                        any further amounts from the affordable 
                        housing fund of such enterprise; and
                          ``(iii) the enterprise shall require 
                        the recipient to reimburse the 
                        enterprise for such misused amounts and 
                        return to the enterprise any amounts 
                        from the affordable housing fund of the 
                        enterprise that remain unused or 
                        uncommitted for use.
                The remedies under this subparagraph are in 
                addition to any other remedies that may be 
                available under law.
          ``(2) Enterprises.--
                  ``(A) Quarterly reports.--The Director shall 
                require each enterprise to submit a report, on 
                a quarterly basis, to the Director and the 
                affordable housing board established under 
                subsection (j) describing the activities funded 
                under this section during such quarter with 
                amounts from the affordable housing fund of the 
                enterprise established under this section. The 
                Director shall make such reports publicly 
                available. The affordable housing board shall 
                review each report by an enterprise to 
                determine the consistency of such activities 
                funded with the criteria for selection of such 
                activities established pursuant to subsection 
                (k)(2)(C).
                  ``(B) Replenishment.--If the Director 
                determines that an activity funded by an 
                enterprise with amounts from the affordable 
                housing fund of the enterprise is not 
                consistent with the criteria established 
                pursuant to subsection (k)(2)(C), the Director 
                shall require the enterprise to allocate to 
                such affordable housing fund (in addition to 
                amounts allocated in compliance with subsection 
                (b)) an amount equal to the sum of the amounts 
                from the affordable housing fund used and 
                further committed for use for such activity.
  ``(h) Capital Requirements.--The utilization or commitment of 
amounts from the affordable housing fund of an enterprise shall 
not be subject to the risk-based capital requirements 
established pursuant to section 1361(a).
  ``(i) Reporting Requirement.--Each enterprise shall include, 
in the report required under section 309(m) of the Federal 
National Mortgage Association Charter Act or section 307(f) of 
the Federal Home Loan Mortgage Corporation Act, as applicable, 
a description of the actions taken by the enterprise to utilize 
or commit amounts allocated under this section to the 
affordable housing fund of the enterprise established under 
this section.
  ``(j) Affordable Housing Board.--
          ``(1) Appointment.--The Director shall appoint an 
        affordable housing board of 7, 9, or 11 persons, who 
        shall include--
                  ``(A) the Director, or the Director's 
                designee;
                  ``(B) the Secretary of Housing and Urban 
                Development, or the Secretary's designee;
                  ``(C) the Secretary of Agriculture, or the 
                Secretary's designee;
                  ``(D) 2 persons from for-profit organizations 
                or businesses actively involved in providing or 
                promoting affordable housing for extremely low- 
                and very low-income households; and
                  ``(E) 2 persons from nonprofit organizations 
                actively involved in providing or promoting 
                affordable housing for extremely low- and very 
                low-income households.
          ``(2) Terms.--
                  ``(A) In general.--Except as provided in 
                subparagraph (B), the term of each member of 
                the affordable housing board appointed pursuant 
                to paragraph (1) (but not including members 
                appointed pursuant to subparagraphs (A), (B), 
                and (C)) shall be 3 years.
                  ``(B) Initial appointees.--The Director shall 
                appoint the initial members of the affordable 
                housing board not later than the expiration of 
                the 60-day period beginning on the effective 
                date under section 185 of the Federal Housing 
                Finance Reform Act of 2005. As designated by 
                the Director at the time of appointment, of the 
                members of the affordable housing board first 
                appointed pursuant to paragraph (1) (but not 
                including members appointed pursuant to 
                subparagraphs (A), (B), and (C))--
                          ``(i) in the case of a board having 7 
                        members--
                                  ``(I) one shall be appointed 
                                for a term of one year; and
                                  ``(II) one shall be appointed 
                                for a term of two years;
                          ``(ii) in the case of a board having 
                        9 members--
                                  ``(I) two shall be appointed 
                                for a term of one year; and
                                  ``(II) two shall be appointed 
                                for a term of two years; and
                          ``(iii) in the case of a board having 
                        11 members--
                                  ``(I) two shall be appointed 
                                for a term of one year; and
                                  ``(II) three shall be 
                                appointed for a term of two 
                                years;
          ``(3) Duties.--The duties of the affordable housing 
        board shall be--
                  ``(A) to determine extremely low- and very 
                low-income housing needs;
                  ``(B) to advise the Director with respect 
                to--
                          ``(i) establishment of the selection 
                        criteria under subsection (k)(2)(C) 
                        that provide for appropriate use of 
                        amounts from the affordable housing 
                        funds of the enterprises to meet such 
                        needs; and
                          ``(ii) operation of, and changes to, 
                        the program under this section 
                        appropriate to meet such needs; and
                  ``(C) to review the reports submitted by the 
                enterprises pursuant to subsection (g)(1) to 
                determine whether the activities funded using 
                amounts from the affordable housing funds of 
                the enterprises comply with the regulations 
                issued pursuant to subsection (k)(2)(C) and 
                inform the Director of such determinations, for 
                purposes of subsection (g)(2).
          ``(4) Meetings.--The board shall meet not less than 
        quarterly, except that during the 2-year period 
        referred to in paragraph (7), the board shall meet only 
        as the Director determines necessary.
          ``(5) Expenses and per diem.--Members of the board 
        shall receive travel expenses, including per diem in 
        lieu of subsistence, in accordance with sections 5702 
        and 5703 of title 5, United States Code.
          ``(6) Advisory committee.--The board shall be 
        considered an advisory committee for purposes of the 
        Federal Advisory Committee Act (5 U.S.C. App.).
          ``(7) Termination.-- The board shall terminate upon 
        the expiration of the 2-year period that begins upon 
        the conclusion of the last year referred to in 
        subsection (b)(1)(C).
  ``(k) Regulations.--
          ``(1) In general.--The Director shall issue 
        regulations to carry out this section.
          ``(2) Required contents.--The regulations issued 
        under this subsection shall include--
                  ``(A) authority for the Director to audit, 
                provide for an audit, or otherwise verify an 
                enterprise's activities, to ensure compliance 
                with this section;
                  ``(B) a requirement that the Director ensure 
                that the affordable housing fund of each 
                enterprise is audited not less than annually to 
                ensure compliance with this section;
                  ``(C) requirements for a process for 
                application to, and selection by, an enterprise 
                for activities to be funded with amounts from 
                the affordable housing fund, which shall 
                provide that--
                          ``(i) selection shall be based upon 
                        specific criteria, which shall provide 
                        that--
                                  ``(I) in any selection of 
                                activities occurring during the 
                                2-year period beginning on the 
                                effective date under section 
                                185 of the Federal Housing 
                                Finance Reform Act of 2005, 
                                additional weight shall be 
                                given to applications for 
                                eligible activities under 
                                subsection (d) that--
                                          ``(aa) are to be 
                                        carried out in any area 
                                        that was declared by 
                                        the President as a 
                                        major disaster area 
                                        pursuant to the Robert 
                                        T. Stafford Disaster 
                                        Relief and Emergency 
                                        Assistance Act as 
                                        result of Hurricane 
                                        Katrina or Hurricane 
                                        Rita in 2005; or
                                          ``(bb) the enterprise 
                                        determines, in 
                                        accordance with 
                                        regulations issued by 
                                        the Director, serve 
                                        persons significantly 
                                        affected by the 
                                        occurrence of Hurricane 
                                        Katrina or Hurricane 
                                        Rita in 2005 (including 
                                        persons displaced as a 
                                        result of such 
                                        hurricanes and persons 
                                        whose affordable 
                                        housing opportunities 
                                        are significantly 
                                        affected by the 
                                        presence of persons 
                                        displaced as a result 
                                        of such hurricanes); 
                                        and
                                  ``(II) taking into 
                                consideration any additional 
                                weight afforded applications 
                                pursuant to subclause (I), 
                                priority in funding shall be 
                                based upon--
                                          ``(aa) whether 
                                        activities are to be 
                                        carried out in any area 
                                        that, not more than 2 
                                        years before such 
                                        selection, was declared 
                                        by the President as a 
                                        major disaster area 
                                        pursuant to the Robert 
                                        T. Stafford Disaster 
                                        Relief and Emergency 
                                        Assistance Act;
                                          ``(bb) greatest 
                                        impact;
                                          ``(cc) geographic 
                                        diversity;
                                          ``(dd) ability to 
                                        obligate amounts and 
                                        undertake activities so 
                                        funded in a timely 
                                        manner;
                                          ``(ee) in the case of 
                                        rental housing projects 
                                        under subsection 
                                        (d)(1), the extent to 
                                        which rents for units 
                                        in the project funded 
                                        are affordable, 
                                        especially for 
                                        extremely low-income 
                                        families; and
                                          ``(ff) in the case of 
                                        rental housing projects 
                                        under subsection 
                                        (d)(1), the extent of 
                                        the duration for which 
                                        such rents will remain 
                                        affordable; and
                          ``(ii) an enterprise may not require 
                        for such selection that an activity 
                        involve financing or underwriting of 
                        any kind by the enterprise (other than 
                        funding through the affordable housing 
                        fund of the enterprise) and may not 
                        give preference in such selection to 
                        activities that involve such financing;
                  ``(D) requirements to ensure that amounts 
                from the affordable housing funds of the 
                enterprises used for rental housing under 
                subsection (d)(1) are used only for the benefit 
                of extremely low- and very-low income families; 
                and
                  ``(E) limitations on public infrastructure 
                development activities that are eligible 
                pursuant to subsection (d)(3) for funding with 
                amounts from the affordable housing funds of 
                the enterprises and requirements for the 
                connection between such activities and housing 
                activities funded under paragraph (1) or (2) of 
                subsection (d).
  ``(l) Enforcement.--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.''.
  (b) Contributions for Transition Period.--
          (1) Reservation and contribution; prohibition of 
        double contributions.--If the date of the enactment of 
        this Act does not occur in the same calendar year as 
        the effective date under section 185 of this Act, each 
        enterprise (as such term is defined in section 1303 of 
        the Housing and Community Development Act of 1992) 
        shall, in the year that such date of enactment occurs, 
        reserve for contribution to the affordable housing fund 
        to be established by the enterprise pursuant to section 
        1337 of such Act (as amended by subsection (a) of this 
        section) an amount equal to 3.5 percent of the after-
        tax income of the enterprise for the preceding year. 
        Upon the establishment of such affordable housing fund, 
        each enterprise shall allocate to such fund the amounts 
        reserved under this paragraph by the enterprise.
          (2) Exception to deadline for commitment.--Section 
        1337(f)(4) of the Housing and Community Development Act 
        of 1992 (as amended by subsection (a) of this section) 
        shall not apply to any amounts allocated to the 
        affordable housing fund of an enterprise pursuant to 
        paragraph (1) of this subsection.
          (3) After-tax income.--For purposes of this 
        subsection, the term ``after-tax income'' has the 
        meaning provided in subsection (b)(5) of the new 
        section 1337 to be inserted by the amendment made by 
        subsection (a) of this section.
          (4) Effective date.--This subsection shall take 
        effect on the date of the enactment of this Act.
  (c) REFCORP Payments.--Section 21B(f)(2) of the Federal Home 
Loan Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
          (1) in subparagraph (E), by striking ``and (D)'' and 
        inserting ``(D), and (E)'';
          (2) by redesignating subparagraph (E) as subparagraph 
        (F); and
          (3) by inserting after subparagraph (D) the following 
        new subparagraph:
                  ``(E) Payments by fannie mae and freddie 
                mac.--To the extent that the amounts available 
                pursuant to subparagraphs (A), (B), (C), and 
                (D) are insufficient to cover the amount of 
                interest payments, each enterprise (as such 
                term is defined in section 1303 of the Housing 
                and Community Development Act of 1992 (42 
                U.S.C. 4502)) shall transfer to the Funding 
                Corporation in each calendar year the amounts 
                allocated for use under this subparagraph 
                pursuant to section 1337(f)(1) of such Act.''.
  Page 238, strike line 6 and insert the following:
  (b) Conforming Amendments.--
          (1) Housing and community development act of 1992.--
        Subtitle B of title
  Page 238, after line 10, insert the following new paragraph:
          (2) Federal home loan banks.--Section 25 of the 
        Federal Home Loan Bank Act (12 U.S.C. 1445) is amended 
        by striking ``Board under this Act'' and inserting 
        ``Director under section 1367 of the Housing and 
        Community Development Act of 1992''.
  Page 248, line 4, after the semicolon insert ``or''.
  Page 248, strike lines 5 through 11 and insert the following:
                  ``(D) violates any written agreement between 
                the regulated entity and the Director;
        shall forfeit and pay a civil money penalty of not more 
        than $10,000 for each day during which such violation 
        continues.''.
  Page 249, strike lines 4 through 10 and insert the following:
                          ``(iii) results in pecuniary gain or 
                        other benefit to such party,
        the regulated entity or regulated entity-affiliated 
        party shall forfeit and pay a civil penalty of not more 
        than $50,000 for each day during which such violation, 
        practice, or breach continues.''.
  Strike line 22 on page 249 and all that follows through line 
5 on page 250, and insert the following:
                  ``(B) knowingly or recklessly causes a 
                substantial loss to such regulated entity or a 
                substantial pecuniary gain or other benefit to 
                such party by reason of such violation, 
                practice, or breach,
        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.''.
  Page 278, line 21, after the comma insert ``this title shall 
take effect on and''.
  Page 278, line 23, strike ``1-year'' and insert ``6-month''.
  Page 296, line 19, after the period insert the following: 
``This section shall take effect on the date of the enactment 
of this Act.''
  Page 296, line 21, after the comma insert ``this title shall 
take effect on and''.
  Page 296, line 23, strike ``1-year'' and insert ``6-month''.
  Page 297, line 13, strike ``1-year'' and insert ``6-month''
  Page 297, line 19, strike ``1-year'' and insert ``6-month''.
  Page 297, line 22, strike ``solely''.
  Page 297, line 24, after ``sight'' insert ``and in addition 
to carrying out its other responsibilities under law''.
  Page 302, line 25, strike ``201(a)'' and insert ``301(a)''.
  Page 303, line 14, strike ``201(a)'' and insert ``301(a)''.
  Page 304, line 13, strike ``1-year'' and insert ``6-month''.
  Page 304, line 17, strike ``1-year'' and insert ``6-month''.
  Page 304, line 19, strike ``solely''.
  Page 304, line 20, after ``Board'' insert ``and in addition 
to carrying out its other responsibilities under law''.
  Page 305, lines 23 and 24, strike ``1-year''.
  Page 311, line 7, strike ``one year'' and insert ``6 
months''.
  Page 311, line 11, strike ``6-month'' and insert ``3-month''.
  Page 312, line 17, strike ``1-year'' and insert ``6-month''.
  Page 312, line 20, strike ``solely''.
  Page 312, line 24, strike ``ment)''' and insert ``ment') and 
in addition to carrying out the Secretary's other 
responsibilities under law regarding such functions''.
                              ----------                              


 2. An Amendment To Be Offered by Representative Carson of Indiana, or 
              Her Designee, To Be Debatable for 10 Minutes

  Page 114, line 6, strike the quotation marks and the last 
period.
  Page 114, after line 6, insert the following new paragraph:
          ``(3) Manufactured housing market.--In determining 
        whether an enterprise has complied with the duty under 
        subparagraph (A) of subsection (a)(2), the Director may 
        consider loans secured by both real and personal 
        property.''.
                              ----------                              


 3. An Amendment To Be Offered by Representative Davis of Alabama, or 
              His Designee, To Be Debatable for 10 Minutes

  Page 107, strike lines 20 through 24 and insert the following 
new paragraph:
          ``(26) Rural area.--The term `rural area' has the 
        meaning given such term in section 520 of the Housing 
        Act of 1949 (42 U.S.C. 1490), except that such term 
        includes micropolitan areas and tribal trust lands.''.
                              ----------                              


 4. An Amendment To Be Offered by Representative Leach of Iowa, or His 
                Designee, To Be Debatable for 10 Minutes

  Strike line 21 on page 49 and all that follows through line 4 
on page 51 and insert the following new subsections:
  ``(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(b) or by order--
          ``(1) establish a minimum capital level, for any 
        particular enterprise, that is higher than the level 
        specified in subsection (a) or, for any particular 
        Federal home loan bank, that is higher than the level 
        specified in subsection (b), as the Director deems 
        necessary or appropriate taking into consideration the 
        particular circumstances of the particular regulated 
        entity, which may include any prudential standards 
        necessary to ensure long-term institutional viability 
        and competitive equity in the market; or
          ``(2) establish a minimum capital level for the 
        enterprises, for the Federal home loans 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) Effect on Other Authority.--Nothing in this section may 
be construed to limit the authority of the Director to require 
a regulated entity to raise or maintain capital under other 
provisions of law, or pursuant to prompt corrective action or 
administrative enforcement actions, or in connection with 
conservatorship or receivership powers.''.
                              ----------                              


5. An Amendment To Be Offered by Representative Royce of California, or 
              His Designee, To Be Debatable for 10 Minutes

  Page 53, line 20, after ``enterprise'' insert the following: 
``, with mitigating systemic risk to the housing or capital 
markets or the financial system,''.
                              ----------                              


 6. An Amendment To Be Offered by Representative Paul of Texas, or His 
                Designee, To Be Debatable for 10 Minutes

  Page 64, after line 12, insert the following new section:

SEC. 117. ELIMINATION OF AUTHORITY TO BORROW FROM TREASURY OF THE 
                    UNITED STATES.

  (a) Fannie Mae.--Section 304 of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1719) is amended by striking 
subsection (c).
  (b) Freddie Mac.--Section 306 of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1455) is amended by 
striking subsection (c).
  (c) Federal Home Loan Banks.--Section 11 of the Federal Home 
Loan Bank Act (12 U.S.C. 1431) is amended by striking 
subsection (i).
                              ----------                              


7. An Amendment To Be Offered by Representative Garrett of New Jersey, 
            or His Designee, To Be Debatable for 10 Minutes

  Strike line 21 on page 81 and all that follows through line 4 
on page 91.
                              ----------                              


  8. An Amendment To Be Offered by Representative Loretta Sanchez of 
      California, or Her Designee, To Be Debatable for 10 Minutes

  Page 93, line 17, before the semicolon insert ``, including 
the use of alternative credit scoring''.
                              ----------                              


     9. An Amendment To Be Offered by Representative Kanjorski of 
     Pennsylvania, or His Designee, To Be Debatable for 10 Minutes

  Strike line 8 on page 270 and all that follows through line 3 
on page 271 and insert the following:

SEC. 181. BOARDS OF ENTERPRISES.

  (a) Fannie Mae.--
          (1) In general.--Subsection (b) of section 308 of the 
        Federal National Mortgage Association Charter Act (12 
        U.S.C. 1723(b)) is amended in the first sentence by 
        striking ``eighteen persons,'' and inserting ``not less 
        than 7 and not more than 15 persons,''.
  Strike line 10 on page 271 and all that follows through line 
6 on page 272 and insert the following:
  (b) Freddie Mac.--
          (1) In general.--Paragraph (2) of section 303(a) of 
        the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1452(a)(2)) is amended in subparagraph (A) by 
        striking ``eighteen persons,'' and inserting ``not less 
        than 7 and not more than 15 persons,''.
  Page 280, lines 1 and 2, strike ``shall be elected by the 
members and''.
  Page 280, line 3, after the period insert ``All directors of 
a Bank who are not independent members pursuant to paragraph 
(3) shall be elected by the members.''.
  Page 280, lines 8 and 9, strike ``one-third'' and insert 
``two-fifths''.
  Page 280, line 10, strike ``as follows'' and insert ``, who 
shall be appointed by the Director of the Federal Housing 
Finance Agency from a list of individuals recommended made by 
the Housing Finance Oversight Board, and shall meet the 
following criteria''.
  Page 280, line 20, after ``housing,'' insert ``community 
development, economic development,''.
  Page 281, line 5, strike ``An'' and insert ``Notwithstanding 
subsection (f)(2), an''.
  Page 281, strike lines 11 through 14, and insert the 
following new paragraph:
          (2) in the first sentence of subsection (b), by 
        striking ``directorship'' and inserting ``member 
        directorship pursuant to subsection (a)(2)'';
  Page 281, strike lines 15 through 23.
  Page 281, line 25, after the semicolon insert ``and''.
  Page 282, strike lines 1 through 8.
  Page 282, line 9, strike ``(5)'' and insert ``(4)''.
  Page 282, line 10, strike ``subsection (e)'' and insert 
``subsections (e) and (f)''.
  Page 283, strike lines 5 through 19 and insert the following:
  (c) Continued Service of Independent Directors After 
Expiration of Term.--Section 7(f)(2) of the Federal Home Loan 
Bank Act (12 U.S.C. 1427(f)(2)) is amended--
          (1) in the second sentence, by striking ``or the term 
        of such office expires, whichever comes first''; and
          (2) by adding at the end the following new sentence: 
        ``An appointive Bank director may continue to serve as 
        a director after the expiration of the term of such 
        director until a successor is appointed.''.

                                  
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