[House Report 110-622]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                       HOUSE OF REPRESENTATIVES 
 2d Session                                                     110-622
======================================================================
 
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENTS TO THE BILL (H.R. 
 3221) 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

                                _______

 May 6, 2008.--Referred to the House Calendar and ordered to be printed

                                _______

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

                              R E P O R T 

                      [To accompany H. Res. 1175]

    The Committee on Rules, having had under consideration 
House Resolution 1175, by a record vote of 9-4, 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 the Senate 
amendments to H.R. 3221, the American Housing Rescue and 
Foreclosure Prevention Act of 2008. The resolution makes in 
order a motion by the Chairman of the Committee on Financial 
Services to concur in the Senate amendment to the text with 
each of the three House amendments printed in this report. The 
rule waives all points of order against the motion except for 
clause 10 of rule XXI and provides that the Senate amendments 
and the motion shall be considered as read. The rule provides 
three hours of debate on the motion, with two hours equally 
divided and controlled by the chairman and ranking minority 
member of the Committee on Financial Services and one hour 
equally divided and controlled by the chairman and ranking 
minority member of the Committee on Ways and Means. The rule 
also provides that the Chair shall divide the question of 
adoption of the motion among the three House amendments. The 
rule provides that upon adoption of the motion specified in the 
first section of the resolution, a motion that the House concur 
in the Senate amendment to the title shall be considered as 
adopted. The rule provides that the Chair may postpone further 
consideration of the motion to a time designated by the 
Speaker.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against the motion 
(except clause 10 of rule XXI) includes a waiver of clause 7 of 
rule XVI, regarding nongermane amendments and includes a waiver 
of section 303 of the Congressional Budget Act, prohibiting 
consideration of legislation, as reported, providing new budget 
authority, change in revenues, change in public debt, new 
entitlement authority, or new credit authority for a fiscal 
year until the budget resolution for that year has been agreed 
to.

                            COMMITTEE VOTES

    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. 481

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Dreier.
    Summary of motion: To grant an open rule.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 482

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Dreier.
    Summary of motion: To report an open rule providing for the 
consideration of H.R. 5830, the FHA Housing Stabilization and 
Homeownership Retention Act of 2008, as well as a structured 
rule for consideration of H.R. 5720, the Housing Assistance Tax 
Act of 2008, which would provide for one germane amendment in 
the nature of a substitute offered by Rep. McCrery, or his 
designee, which would have to comply with all the rules of the 
House. The rule would also authorize the Chairman of the 
Committee on Energy and Commerce to move to take from the 
Speaker's table H.R. 3221, and to consider the Senate amendment 
thereto in the House and to move to strike all after the 
enacting clause, insert in lieu thereof the provisions of H.R. 
5830 and 5720 as adopted by the House, insist on the House 
amendments and request a conference thereon.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 483

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Bachus (AL), Rep. Biggert 
(IL), and Rep. Capito (WV), #7, an amendment in the nature of a 
substitute, which, among other provisions, the amendment would 
establish a nationwide database of mortgage originators to 
prevent fraud; modernize the Federal Housing Administration; 
reform the Government Sponsored Enterprises; promote housing 
counseling; reform the appraisal industry; provide monies to 
the FBI to combat mortgage fraud; establish housing counseling 
opportunities for returning veterans; and improve disclosures 
for new mortgages and for monthly mortgage statements.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 484

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Diaz-Balart.
    Summary of motion: To make in order and provide appropriate 
waivers for amendments by Rep. Garrett (NJ), #8 and 9, which 
would have the FHA insure only 90% of each of the new loans 
instead of 100% as currently written. The second amendment, #9, 
removes the provision allowing mortgagors a 10% equity stake. 
Mortgagors would instead receive new loans underwritten with 
affordable mortgage payments on extended terms.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 485

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Diaz-Balart.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Mario Diaz-Balart (FL), #10, 
which increases the tax deduction amount for property taxes 
from $350 (or $700 for joint filers) to $500 (or $1,000 for 
joint filers).
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 486

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Hastings (WA).
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Price (GA), #2 and 3, which 
strikes Title VI--Housing Assistance Authorization and which 
requires offsets for all new spending.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 487

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Hastings (WA).
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Price (GA), #5, which 
prohibits the use of funds set aside in Title I for housing and 
legal counseling from being used to provide, obtain, or arrange 
on behalf of a homeowner, legal representation involving or for 
the purposes of civil litigation.
    Results: Defeated 4-9
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 488

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Terry, #1, which amends the 
Rangel amendment to create a one-time tax credit for homebuyers 
of 10 percent of the home's purchase price.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 489

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Hensarling (TX), #6, which 
would limit the program to families with incomes that do not 
exceed 140 percent of the median income for the area in which 
the housing is located.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 490

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Dreier.
    Summary of motion: Add as a new section at the end of the 
resolution as follows: That upon adoption of this resolution, 
H.R. 2642 and H.R. 2638, and their accompanying papers are laid 
on the table.
    Results: Defeated 4-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings 
(WA)--Yea; Sessions--Yea; Slaughter--Nay.

Rules Committee record vote No. 491

    Date: May 6, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. McGovern.
    Summary of motion: To report the rule.
    Results: Adopted 9-4.
    Vote by Members: McGovern--Yea; Hastings (FL)--Yea; 
Matsui--Yea; Cardoza--Yea; Welch--Yea; Castor--Yea; Arcuri--
Yea; Sutton--Yea; Dreier--Nay; Diaz-Balart--Nay; Hastings 
(WA)--Nay; Sessions--Nay; Slaughter--Yea.

                  SUMMARY OF AMENDMENTS MADE IN ORDER

Summary of the House Amendment #1 to the Senate Amendment to H.R. 3221 
        made in order under the rule

    The housing package amendment consists of a number of 
reforms that have passed the House and/or the Committee on 
Financial Services and have been assembled as conformed, such 
as bills regarding FHA refinance (H.R. 5830), FHA modernization 
(HR 1852), GSE reform (H.R. 1427), loan modification (H.R. 
5579), community development investments (H.R. 1066), and 
certain housing preservation provisions from H.R. 1851, as well 
as a proposal to protect disabled veterans from discrimination 
in government mortgage programs.

Summary of the House Amendment #2 to the Senate Amendment to H.R. 3221 
        made in order under the rule

    The amendment consists primarily of the text of H.R. 5720, 
the Housing Assistance Tax Act of 2008 as reported from the 
Ways and Means Committee on April 24, 2008. Middle class 
families would be eligible to receive a tax benefit that is 
equivalent to an interest-free loan of up to $7,500 towards the 
purchase of a first home and existing homeowners claiming the 
standard deduction would be allowed an additional standard 
deduction for property taxes up to $700 for a married couple 
filing jointly. States would receive a temporary increase in 
low-income housing tax credits and $10 billion of additional 
tax-exempt bond authority to provide low-interest loans to 
first time homebuyers, to build low-income rental housing and 
to refinance certain subprime mortgages. Additionally it 
provides that municipal bonds that are guaranteed by Federal 
home loan banks would be eligible for treatment as tax exempt 
bonds. It would also make necessary improvements to the low-
income housing tax credit and other incentives for low-income 
rental housing as well as make certain reforms to the rules 
governing real estate investment trusts. The amendment also 
includes language to provide better coordination between the 
housing tax credit and multifamily bond programs and housing 
programs under the Department of Housing and Urban Development 
(HUD) and the Rural Housing Service (RHS), including actions to 
streamline and expedite transactions involving these different 
programs. The amendment also extends the period following 
release from active duty (from 90 days to one year) during 
which a servicemember shall be protected from foreclosure, and 
require that any charges accrued during that period of time be 
fully disclosed to the servicemember. The cost of the amendment 
is offset with a tax compliance provision included in the 
President's Budget and by delaying the effective date of a tax 
benefit for multinational companies that has not yet taken 
effect.

Summary of the House Amendment #3 to the Senate Amendment to H.R. 3221 
        made in order under the rule

    The Brad Miller/LaTourette amendment affirms the right of 
states to prevent abusive foreclosure practices and to 
establish rules concerning the foreclosure process by 
clarifying that this Act, the National Bank Act and the Home 
Owner's Loan Act do not preempt state laws regulating the 
foreclosure of residential real property or the treatment of 
foreclosed property.

                    TEXT OF AMENDMENTS MADE IN ORDER

  TEXT OF THE HOUSE AMENDMENT #1 TO THE SENATE AMENDMENT TO H.R. 3221 
                      MADE IN ORDER UNDER THE RULE

  In the matter proposed to be inserted by the amendment of the 
Senate to the text of the bill, strike section 1 and all that 
follows through the end of title V and insert the following:

SEC. 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``American 
Housing Rescue and Foreclosure Prevention Act of 2008''.
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

*ERR08*Sec. 1. Short title and table of contents.

     TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION

Sec. 101. Short title.

                   Subtitle A--Homeownership Retention

Sec. 111. Purposes.
Sec. 112. Insurance of homeownership retention mortgages.
Sec. 113. Study of Auction or Bulk Refinance Program.
Sec. 114. Temporary increase in maximum loan guaranty amount for certain 
          housing loans guaranteed by Secretary of Veterans Affairs.
Sec. 115. Study of possible accounting revisions relating to property at 
          risk of foreclosure and the availability of credit for 
          refinancing home mortgages at risk of foreclosure.
Sec. 116. GAO study of the effect of tightening credit markets in 
          communities affected by the subprime mortgage foreclosure 
          crises and predatory lending on prospective first-time 
          homebuyers seeking mortgages.

                Subtitle B--Office of Housing Counseling

Sec. 131. Short title.
Sec. 132. Establishment of Office of Housing Counseling.
Sec. 133. Counseling procedures.
Sec. 134. Grants for housing counseling assistance.
Sec. 135. Requirements to use HUD-certified counselors under HUD 
          programs.
Sec. 136. Study of defaults and foreclosures.
Sec. 137. Definitions for counseling-related programs.
Sec. 138. Updating and simplification of mortgage information booklet.

                  Subtitle C--Combating Mortgage Fraud

Sec. 151. Authorization of appropriations to combat mortgage fraud.

      TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE 
                              MODERNIZATION

                         Subtitle A--FHA Reform

Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Maximum principal loan obligation.
Sec. 204. Extension of mortgage term.
Sec. 205. Downpayment simplification.
Sec. 206. Mortgage insurance premiums for qualified homeownership 
          assistance entities and higher-risk borrowers.
Sec. 207. Risk-based mortgage insurance premiums.
Sec. 208. Payment incentives for higher-risk borrowers.
Sec. 209. Protections for higher-risk borrowers.
Sec. 210. Refinancing mortgages.
Sec. 211. Annual reports on new programs and loss mitigation.
Sec. 212. Insurance for single family homes with licensed child care 
          facilities.
Sec. 213. Rehabilitation loans.
Sec. 214. Discretionary action.
Sec. 215. Insurance of condominiums and manufactured housing.
Sec. 216. Mutual Mortgage Insurance Fund.
Sec. 217. Hawaiian home lands and Indian reservations.
Sec. 218. Conforming and technical amendments.
Sec. 219. Home equity conversion mortgages.
Sec. 220. Study on participation of mortgage brokers and correspondent 
          lenders.
Sec. 221. Conforming loan limit in disaster areas.
Sec. 222. Failure to pay amounts from escrow accounts for single family 
          mortgages.
Sec. 223. Acceptable identification for FHA mortgagors.
Sec. 224. Pilot program for automated process for borrowers without 
          sufficient credit history.
Sec. 225. Sense of Congress regarding technology for financial systems.
Sec. 226. Clarification of disposition of certain properties.
Sec. 227. Valuation of multifamily properties in noncompetitive sales by 
          HUD to states and localities.
Sec. 228. Limitation on mortgage insurance premium increases.
Sec. 229. Civil money penalties for improperly influencing appraisals.
Sec. 230. Mortgage insurance premium refunds.
Sec. 231. Savings provision.
Sec. 232. Implementation.

    Subtitle B--FHA Manufactured Housing Loan Insurance Modernization

Sec. 251. Short title.
Sec. 252. Findings and purposes.
Sec. 253. Exception to limitation on financial institution portfolio.
Sec. 254. Insurance benefits.
Sec. 255. Maximum loan limits.
Sec. 256. Insurance premiums.
Sec. 257. Technical corrections.
Sec. 258. Revision of underwriting criteria.
Sec. 259. Requirement of social security account number for assistance.
Sec. 260. GAO study of mitigation of tornado risks to manufactured 
          homes.

 TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE

Sec. 301. Short title.
Sec. 302. Definitions.

 Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan 
                                  Banks

             Chapter 1--Improvement of Safety and Soundness

Sec. 311. Establishment of the Federal Housing Finance Agency.
Sec. 312. Duties and authorities of Director.
Sec. 313. Federal Housing Enterprise Board.
Sec. 314. Authority to require reports by regulated entities.
Sec. 315. Disclosure of income and charitable contributions by 
          enterprises.
Sec. 316. Assessments.
Sec. 317. Examiners and accountants.
Sec. 318. Prohibition and withholding of executive compensation.
Sec. 319. Reviews of regulated entities.
Sec. 320. Inclusion of minorities and women; diversity in Agency 
          workforce.
Sec. 321. Regulations and orders.
Sec. 322. Non-waiver of privileges.
Sec. 323. Risk-based capital requirements.
Sec. 324. Minimum and critical capital levels.
Sec. 325. Review of and authority over enterprise assets and 
          liabilities.
Sec. 326. Corporate governance of enterprises.
Sec. 327. Required registration under Securities Exchange Act of 1934.
Sec. 328. Liaison with Financial Institutions Examination Council.
Sec. 329. Guarantee fee study.
Sec. 330. Conforming amendments.

              Chapter 2--Improvement of Mission Supervision

Sec. 331. Transfer of product approval and housing goal oversight.
Sec. 332. Review of enterprise products.
Sec. 333. Conforming loan limits.
Sec. 334. Annual housing report regarding regulated entities.
Sec. 335. Annual reports by regulated entities on affordable housing 
          stock.
Sec. 336. Mortgagor identification requirements for mortgages of 
          regulated entities.
Sec. 337. Revision of housing goals.
Sec. 338. Duty to serve underserved markets.
Sec. 339. Monitoring and enforcing compliance with housing goals.
Sec. 340. Affordable Housing Fund.
Sec. 341. Consistency with mission.
Sec. 342. Enforcement.
Sec. 343. Conforming amendments.

                   Chapter 3--Prompt Corrective Action

Sec. 345. Capital classifications.
Sec. 346. Supervisory actions applicable to undercapitalized regulated 
          entities.
Sec. 347. Supervisory actions applicable to significantly 
          undercapitalized regulated entities.
Sec. 348. Authority over critically undercapitalized regulated entities.
Sec. 349. Conforming amendments.

                     Chapter 4--Enforcement Actions

Sec. 351. Cease-and-desist proceedings.
Sec. 352. Temporary cease-and-desist proceedings.
Sec. 353. Prejudgment attachment.
Sec. 354. Enforcement and jurisdiction.
Sec. 355. Civil money penalties.
Sec. 356. Removal and prohibition authority.
Sec. 357. Criminal penalty.
Sec. 358. Subpoena authority.
Sec. 359. Conforming amendments.

                      Chapter 5--General Provisions

Sec. 361. Boards of enterprises.
Sec. 362. Report on portfolio operations, safety and soundness, and 
          mission of enterprises.
Sec. 363. Conforming and technical amendments.
Sec. 364. Study of alternative secondary market systems.
Sec. 365. Effective date.

                   Subtitle B--Federal Home Loan Banks

Sec. 371. Definitions.
Sec. 372. Directors.
Sec. 373. Federal Housing Finance Agency oversight of Federal Home Loan 
          Banks.
Sec. 374. Joint activities of Banks.
Sec. 375. Sharing of information between Federal Home Loan Banks.
Sec. 376. Reorganization of Banks and voluntary merger.
Sec. 377. Securities and Exchange Commission disclosure.
Sec. 378. Community financial institution members.
Sec. 379. Technical and conforming amendments.
Sec. 380. Study of affordable housing program use for long-term care 
          facilities.
Sec. 381. Effective date.

Subtitle C--Transfer of Functions, Personnel, and Property of Office of 
Federal Housing Enterprise Oversight, Federal Housing Finance Board, and 
               Department of Housing and Urban Development

        Chapter 1--Office of Federal Housing Enterprise Oversight

Sec. 385. Abolishment of OFHEO.
Sec. 386. Continuation and coordination of certain regulations.
Sec. 387. Transfer and rights of employees of OFHEO.
Sec. 388. Transfer of property and facilities.

                Chapter 2--Federal Housing Finance Board

Sec. 391. Abolishment of the Federal Housing Finance Board.
Sec. 392. Continuation and coordination of certain regulations.
Sec. 393. Transfer and rights of employees of the Federal Housing 
          Finance Board.
Sec. 394. Transfer of property and facilities.

         Chapter 3--Department of Housing and Urban Development

Sec. 395. Termination of enterprise-related functions.
Sec. 396. Continuation and coordination of certain regulations.
Sec. 397. Transfer and rights of employees of Department of Housing and 
          Urban Development.
Sec. 398. Transfer of appropriations, property, and facilities.

             TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION

Sec. 401. Short title.
Sec. 402. Safe harbor for qualified loan modifications or workout plans 
          for certain residential mortgage loans.

                    TITLE V--OTHER HOUSING PROVISIONS

Sec. 501. Depository Institution Community Development Investments 
          Enhancement .
Sec. 502. Preservation of certain affordable housing dwelling units.
Sec. 503. Eligibility of certain projects for enhanced voucher 
          assistance.
Sec. 504. Transfer of certain rental assistance contracts.
Sec. 505. Protection against discriminatory treatment.*ERR08*

     TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION

SEC. 101. SHORT TITLE.

  This title may be cited as the ``FHA Housing Stabilization 
and Homeownership Retention Act of 2008''.

                  Subtitle A--Homeownership Retention

SEC. 111. PURPOSES.

  The purposes of this subtitle are--
          (1) to create an FHA program, which is voluntary on 
        the part of borrowers and existing mortgage loan 
        holders, including both existing senior mortgage loan 
        holders and existing subordinate mortgage loan holders, 
        to insure refinance loans for substantial numbers of 
        borrowers at risk of foreclosure, at levels which are 
        reasonably likely to be sustainable through enhanced 
        affordability of debt service;
          (2) to provide flexible underwriting for FHA-insured 
        loans under such a program to provide refinancing 
        opportunities under fiscally responsible terms, 
        including higher fees commensurate with higher risk 
        levels, a seasoning requirement for higher debt to 
        income loans, and additional program controls to limit 
        and control risk;
          (3) to bar speculators and second home owners from 
        participation in such program;
          (4) to require existing mortgage loan holders to take 
        substantial loan writedowns in exchange for having the 
        Federal Government and the borrower assume the ongoing 
        risk of the refinanced loan;
          (5) to set a loan-to-value limit on such loans that 
        provides the FHA with an equity buffer against 
        potential loan losses, provides protections against the 
        risk of future home price declines, and creates 
        incentives for borrowers to maintain payments on the 
        loan;
          (6) to protect the FHA against losses which may 
        exceed normal FHA loss levels by establishing higher 
        fee levels, including an exit fee and profit sharing 
        during the first five years of the loan, with such 
        higher fee levels effectively being funded through the 
        required lender writedown;
          (7) to provide a fair level of incentives for junior 
        lien holders to provide the necessary releases of their 
        lien interests, in order to meet program requirements 
        that all outstanding liens must be extinguished, and 
        thereby permit the refinancing to be completed;
          (8) to enhance the administrative capacity of the FHA 
        to carry out its expanded role under the program 
        through establishment of an Oversight Board which adds 
        expertise from the Federal Reserve and the Department 
        of the Treasury, through additional funding to contract 
        out for the provision of any needed expertise in 
        designing program requirements and oversight, and 
        through additional funding to increase FHA personnel 
        resources as needed to handle the increased loan volume 
        resulting from the program;
          (9) to sunset the program when it is no longer 
        needed; and
          (10) to study the need for and efficacy of an auction 
        or bulk refinancing mechanism to facilitate more 
        expeditious refinancing of larger volumes of existing 
        mortgages that are at risk for foreclosure into FHA-
        insured mortgages.

SEC. 112. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

  (a) Mortgage Insurance Program.--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. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

  ``(a) Oversight Board.--
          ``(1) Establishment.--There is hereby established the 
        Refinance Program Oversight Board (in this section 
        referred to as the `Oversight Board').
          ``(2) Membership.--The Oversight Board shall consist 
        of the following members or their designees:
                  ``(A) The Secretary of the Treasury.
                  ``(B) The Secretary of Housing and Urban 
                Development.
                  ``(C) The Chairman of the Board of Governors 
                of the Federal Reserve System.
          ``(3) No additional compensation.--Members of the 
        Oversight Board shall receive no additional pay by 
        reason of service on the Oversight Board.
          ``(4) Responsibilities.--The Oversight Board shall be 
        responsible for establishing program and oversight 
        requirements for the program under this section, which 
        shall include--
                  ``(A) detailed program requirements under 
                subsection (c);
                  ``(B) flexible underwriting criteria under 
                subsection (d);
                  ``(C) a mortgage premium structure under 
                subsection (e);
                  ``(D) a reasonable fee and rate limitation 
                under subsection (f);
                  ``(E) enhancement of FHA capacity under 
                subsection (i), including oversight of such 
                activities and personnel as may be contracted 
                for as provided therein;
                  ``(F) monitoring of underwriting risk under 
                subsection (j); and
                  ``(G) such additional requirements as may be 
                necessary and appropriate to oversee and 
                implement the program.
          ``(5) Use of resources.--In carrying out its 
        functions under this section, the Oversight Board may 
        utilize, with their consent and to the extent 
        practical, the personnel, services, and facilities of 
        the Department of the Treasury, the Department of 
        Housing and Urban Development, the Board of Governors 
        of the Federal Reserve System, the Federal Reserve 
        Banks, and other Federal agencies, with or without 
        reimbursement therefore.
  ``(b) Authority.--
          ``(1) In general.--The Secretary shall, subject only 
        to the absence of qualified requests for insurance 
        under this section and to the limitations under 
        subsection (h) of this section and section 531(a), make 
        commitments to insure and insure any mortgage covering 
        a 1- to 4-family residence that is made for the purpose 
        of paying or prepaying outstanding obligations under an 
        existing mortgage or mortgages on the residence if the 
        mortgage being insured under this section meets the 
        requirements of this section, as established by the 
        Oversight Board, and of section 203, except as modified 
        by this section.
          ``(2) Establishment and implementation of program 
        requirements.--The Oversight Board shall establish 
        program requirements and standards under this section 
        and the Secretary shall implement such requirements and 
        standards. The Oversight Board and the Secretary may 
        establish and implement any requirements or standards 
        through interim guidance and mortgagee letters.
  ``(c) Requirements.--To be eligible for insurance under this 
section, a mortgage shall comply with all of the following 
requirements:
          ``(1) Owner-occupied principal residence 
        requirement.--The residence securing the mortgage 
        insured under this section shall be occupied by the 
        mortgagor as the principal residence of the mortgagor 
        and the mortgagor shall provide a certification to the 
        originator of the mortgage that such residence securing 
        the mortgage insured under this section is the only 
        residence in which the mortgagor has any present 
        ownership interest. With regard to such certification, 
        the Oversight Board may create exceptions for 
        mortgagors who have only a partial ownership interest 
        in a residence other than the residence securing the 
        mortgage insured under this section.
          ``(2) Lack of capacity to pay existing mortgage or 
        mortgages.--
                  ``(A) Borrower certification.--
                          ``(i) The mortgagor shall provide a 
                        certification to the originator of the 
                        mortgage that the mortgagor--
                                  ``(I) has not intentionally 
                                defaulted on the existing 
                                mortgage or mortgages; and
                                  ``(II) has not knowingly, or 
                                willfully and with actual 
                                knowledge furnished material 
                                information known to be false 
                                for the purpose of obtaining 
                                the existing mortgage or 
                                mortgages.
                          ``(ii) The mortgagor shall agree in 
                        writing that the mortgagor shall be 
                        liable to repay the FHA 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 
                        Oversight Board.
                  ``(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 at such time, greater than 35 
                percent.
                  ``(C) Loss mitigation responsibilities.--This 
                section may not be construed to alter or in any 
                way affect the responsibilities of any party 
                (including the mortgage servicer) to engage in 
                any or all loan modification or other loss 
                mitigation strategies to maximize value to 
                investors as established by any applicable 
                contract.
          ``(3) Eligibility of mortgages by date of 
        origination.--The existing senior mortgage shall have 
        been originated on or before December 31, 2007.
          ``(4) Maximum loan-to-value ratio for new loans.--The 
        mortgage being insured under this section shall involve 
        a principal obligation (including such initial service 
        charges, appraisal, inspection, and other fees as the 
        Secretary shall approve and including the mortgage 
        insurance premium paid pursuant to subsection (e)(1)) 
        in an amount not to exceed 90 percent of the current 
        appraised value of the property. Section 203(d) shall 
        not apply to mortgages insured under this section.
          ``(5) Required waiver of prepayment penalties and 
        fees.--All penalties for prepayment of the existing 
        mortgage or mortgages, and all fees and penalties 
        related to default or delinquency on all existing 
        mortgages or mortgages, shall be waived or forgiven.
          ``(6) Required loan reduction.--
                  ``(A) Reduction of indebtedness under 
                existing senior mortgage.--The amount of 
                indebtedness on the existing mortgage or 
                mortgages on the residence shall have been 
                substantially reduced by such percentage as the 
                Oversight Board may require, and such reduction 
                shall be at least sufficient to--
                          ``(i) provide for the refinancing of 
                        such existing mortgage or mortgages in 
                        an amount not greater than 90 percent 
                        of the current appraised value of the 
                        property involved;
                          ``(ii) pay the full amount of the 
                        single premium to be collected pursuant 
                        to subsection (e)(1) (which shall be an 
                        amount equal to 3.0 percent of the 
                        amount of the original insured 
                        principal obligation of the mortgage 
                        insured under this section and which 
                        shall serve as an additional reserve to 
                        cover possible loan losses); and
                          ``(iii) pay the full amount of the 
                        loan origination fee and any other 
                        closing costs, not to exceed 2.0 
                        percent of the amount of the original 
                        insured principal obligation of the 
                        mortgage insured under this section.
                  ``(B) Extinguishment of debt by 
                refinancing.--
                          ``(i) Required agreement.--All 
                        existing holders of mortgage liens on 
                        the property securing the mortgage to 
                        be insured under this section shall 
                        agree to accept the proceeds of the 
                        insured loan as payment in full of all 
                        indebtedness under all existing 
                        mortgages, and all encumbrances related 
                        to such mortgages shall be removed. The 
                        Oversight Board may take such actions 
                        as the Oversight Board considers 
                        necessary or 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, to comply with 
                        the requirement under this 
                        subparagraph.
                          ``(ii) Treatment of multiple mortgage 
                        liens.--In addition to clause (i), the 
                        Oversight Board shall adopt one of the 
                        following approaches for all mortgages 
                        or such classes of mortgages as the 
                        Oversight Board may determine and may, 
                        from time to time, reconsider:
                                  ``(I) Fixed price.--As a 
                                requirement for participating 
                                in this program, all existing 
                                lien holders will agree to not 
                                provide any payment to 
                                subordinate lien holders other 
                                than such payment in accordance 
                                with a formula established by 
                                the Oversight Board as set 
                                forth in clause (iii); except 
                                that the Oversight Board may 
                                establish a short period within 
                                which first and subordinate 
                                lien holders may negotiate to 
                                extinguish all subordinate 
                                liens for compensation that may 
                                be different from the amount 
                                determined under such formula 
                                set forth in clause (iii).
                                  ``(II) Shared equity.--The 
                                Oversight Board may require the 
                                mortgagor under a mortgage 
                                insured under this section to 
                                agree to share a portion of any 
                                future equity in the mortgaged 
                                property with holders of 
                                existing subordinate mortgages, 
                                in accordance with a formula 
                                for such shared equity 
                                established by the Oversight 
                                Board as set forth in clause 
                                (iii), except that payments of 
                                such shared equity may be made 
                                only after the Secretary 
                                recovers all amounts owed to 
                                the Secretary with respect to 
                                such mortgage pursuant to the 
                                program under this section 
                                (including amounts owed 
                                pursuant to paragraph (8)).
                          ``(iii) Formula.--In determining a 
                        formula for determining any payments to 
                        subordinate lien holders pursuant to 
                        subclauses (I) and (II) of clause (ii), 
                        and in any reconsideration of such 
                        formula as the Oversight Board may from 
                        time to time undertake, the Oversight 
                        Board shall take into consideration the 
                        current market value of such liens. In 
                        no case may a formula provide for the 
                        payment of more than 1 percent of the 
                        current appraised value of the 
                        mortgaged property to a subordinate 
                        lien holder if the outstanding balance 
                        owed to more senior lien holders is 
                        equal to or exceeds such current 
                        appraised value.
                          ``(iv) Voluntary program.--This 
                        section 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.
                          ``(v) Source of payments for 
                        subordinate loans.--Any amounts paid to 
                        holders of any existing subordinate 
                        mortgages in connection with the 
                        origination and insurance of a mortgage 
                        under this section shall derive only 
                        from--
                                  ``(I) the holder of the 
                                existing senior mortgage; or
                                  ``(II) in the case only of 
                                the shared equity approach 
                                under clause (ii)(II), the 
                                mortgagor under the mortgage 
                                insured under this section
          ``(7) Required reduction of debt service.--The debt 
        service payments due under the mortgage insured under 
        this section shall be in an amount that is 
        substantially reduced from the debt service payments 
        due under the existing mortgage or mortgages, which 
        reduction may be achieved through a reduction of 
        indebtedness, a reduction in the interest rate being 
        paid, or an extension of the term of the mortgage, or 
        any combination thereof.
          ``(8) Financial recovery to federal government 
        through exit premium.--
                  ``(A) Subordinate lien.--The mortgage shall 
                provide that the Secretary shall retain a lien 
                on the residence involved, which shall be 
                subordinate to the mortgage insured under this 
                section but senior to all other mortgages on 
                the residence that may exist at any time, and 
                which shall secure the repayment of the amount 
                due under subparagraph (D).
                  ``(B) No interest or payment during 
                mortgage.--The amount secured by the lien 
                retained by the Secretary pursuant to 
                subparagraph (A) shall not bear interest and 
                shall not be repayable to the Secretary except 
                as provided in subparagraph (D) of this 
                paragraph.
                  ``(C) Net proceeds available for exit 
                premium.--Upon the sale, refinancing, or other 
                disposition of the residence securing a 
                mortgage insured under this section, any 
                proceeds resulting from such disposition that 
                remain after deducting the remaining insured 
                principal balance of the mortgage insured under 
                this section shall be available to meet the 
                obligation under subparagraph (D). In the case 
                of a refinance, non-arms length transaction, or 
                such other transaction as the Oversight Board 
                shall determine, the proceeds shall be based on 
                the current appraised value at the time of the 
                refinance or transaction.
                  ``(D) Exit premium.--Upon any refinancing of 
                the mortgage insured under this section or any 
                sale or disposition of the residence securing 
                the mortgage, the Secretary shall, subject to 
                the availability of sufficient net proceeds 
                described in subparagraph (C), receive the 
                greater of--
                          ``(i) 3 percent of the amount of the 
                        original insured principal obligation 
                        of the mortgage (or the entire amount 
                        of the net proceeds described in 
                        subparagraph (C) if such net proceeds 
                        are less than 3 percent of the amount 
                        of the original insured principal 
                        obligation of the mortgage); or
                          ``(ii) a percentage of the portion of 
                        the net proceeds available for profit-
                        sharing, as described in subparagraph 
                        (E), which shall be--
                                  ``(I) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the first year of the term of 
                                the mortgage, 100 percent of 
                                such net proceeds;
                                  ``(II) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the second year of the term of 
                                the mortgage, 80 percent;
                                  ``(III) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the third year of the term of 
                                the mortgage, 60 percent; and
                                  ``(IV) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the fourth year of the term of 
                                the mortgage or at any time 
                                thereafter, 50 percent;
                except that such percentage of proceeds shall 
                be reduced by all fees the Secretary has 
                collected for the mortgage prior to such 
                refinancing, sale, or disposition.
                  ``(E) Net proceeds available for profit-
                sharing.--With respect to any mortgage insured 
                under this section, the net proceeds available 
                for purposes of subparagraph (D)(ii) shall be 
                any proceeds resulting from the sale, 
                refinancing, or other disposition of the 
                residence securing the mortgage that remain 
                after deducting the original insured principal 
                obligation of the mortgage. In the case of a 
                refinance, non-arms length transaction, or such 
                other transaction as the Oversight Board shall 
                determine, the proceeds shall be based on the 
                current appraised value at the time of the 
                refinance or transaction.
                  ``(F) Authority to prohibit new second 
                liens.--The Oversight Board shall prohibit 
                borrowers from granting a new second lien on 
                the mortgaged property during the first five 
                years of the term of the mortgage insured under 
                this section, except as the Oversight Board 
                determines to be necessary to ensure the 
                appropriate maintenance of the mortgaged 
                property.
          ``(9) Documentation and verification of income.--In 
        complying with the FHA underwriting requirements under 
        the 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 for 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 Oversight Board shall establish.
          ``(10) Fixed rate mortgage.--The mortgage insured 
        under this section shall bear interest at a single rate 
        that is fixed for the entire term of the mortgage.
          ``(11) Maximum loan amount.--Notwithstanding section 
        203(b)(2), the mortgage being insured under this 
        section shall involve a principal obligation in an 
        amount that does not exceed the limitation (for a 
        property of the applicable size) on the amount of the 
        principal obligation that would be allowable under the 
        terms of section 202(a) of the Economic Stimulus Act of 
        2008 if the mortgage were insured pursuant to such 
        section. The limitation on the amount of the principal 
        obligation allowable under such Act shall apply for the 
        purposes of this section until the termination under 
        subsection (n) of the program under this section.
          ``(12) Ineligibility for fraud conviction.--The 
        mortgagor shall not have been convicted under Federal 
        or State law for mortgage fraud during the 7-year 
        period ending upon the insurance of the mortgage under 
        this section.
          ``(13) Lender review.--The mortgagee under the 
        mortgage shall conduct an electronic database search of 
        the mortgagor's criminal history to determine if the 
        mortgagor has had a conviction described in paragraph 
        (12). The mortgagee may charge the mortgagor a 
        reasonable fee for the actual cost of the search not to 
        exceed a maximum rate established by the Oversight 
        Board. The Oversight Board may provide clarification, 
        if needed, to help mortgagees identify any differences 
        among the States in how they report mortgage fraud 
        convictions. The Oversight Board shall establish 
        procedures sufficient to allow the mortgagor to 
        challenge a mortgagee's determination with respect to 
        paragraph (12) (including to correct inaccuracies 
        resulting from theft of the mortgagor's identity or 
        personally identifiable information).
          ``(14) 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).
          ``(15) Statement of loan terms.--
                  ``(A) Requirement.--The mortgagor shall have 
                been provided by the mortgagee, not later than 
                three days before closing for the mortgage, a 
                form described in subparagraph (B) 
                appropriately and accurately completed by the 
                mortgagee.
                  ``(B) Form.--The form described in this 
                subparagraph shall be a single page, written 
                disclosure regarding the mortgage loan to be 
                insured under this section that, when completed 
                by the mortgagee, sets forth, in accordance 
                with such requirements as the Secretary shall 
                by regulation establish a best possible 
                estimate of--
                          ``(i) the total loan amount under the 
                        mortgage;
                          ``(ii) the loan-to-value ratio for 
                        the mortgage;
                          ``(iii) the final maturity date for 
                        the mortgage;
                          ``(iv) the amount of any prepayment 
                        fee to be charged if the mortgage is 
                        paid in full before the final maturity 
                        date for the mortgage, including the 
                        percentages of any net proceeds to be 
                        received by the Secretary pursuant to 
                        paragraph (8)(D)(ii);
                          ``(v) the amount of the exit premium 
                        under the mortgage pursuant to 
                        subsection (e)(3);
                          ``(vi) the interest rate under the 
                        mortgage expressed as an annual 
                        percentage rate, and the amount of the 
                        monthly payment due under such rate;
                          ``(vii) the fully indexed rate of 
                        interest under the mortgage expressed 
                        as an annual percentage rate and the 
                        amount of the monthly payment due under 
                        such rate;
                          ``(viii) the monthly household income 
                        of the borrower upon which the mortgage 
                        is based;
                          ``(ix) the amount of the monthly 
                        payment due under the mortgage, and the 
                        amount of such initial monthly payment 
                        plus monthly amounts due for taxes and 
                        insurance on the property for which the 
                        mortgage is made, both expressed as a 
                        percentage of the monthly household 
                        income of the borrower; and
                          ``(x) the aggregate amount of 
                        settlement charges for all settlement 
                        services provided in connection with 
                        the mortgage, the amount of such 
                        charges that are included in the 
                        principal amount and the amount of such 
                        charges the borrower must pay at 
                        closing, the aggregate amount of 
                        mortgagee's fees connection with the 
                        mortgage, and the aggregate amount of 
                        other fees or required payments in 
                        connection with the mortgage.
  ``(d) Flexible Underwriting Criteria.--
          ``(1) In general.--The Oversight Board shall 
        establish, and the Secretary acting on behalf of the 
        Oversight Board shall implement, underwriting standards 
        for mortgages insured under this section that--
                  ``(A) ensure that each mortgagor under a 
                mortgage insured under this section has a 
                reasonable expectation of repaying the 
                mortgage, taking into consideration the 
                mortgagor's income, assets, liabilities, 
                payment history, and other applicable criteria, 
                but which shall not result in a denial of 
                insurance solely on the basis of the 
                mortgagor's current FICO or other credit 
                scores, or any delinquency or default by the 
                mortgagor under the existing mortgage or 
                mortgages, or any case filed under title 11, 
                United States Code, by the mortgagor; and
                  ``(B) subject to the provisions of 
                subparagraph (A), permit a total debt-to-income 
                ratio of up to 43 percent.
          ``(2) Exception.--
                  ``(A) In general.--Subject to the 
                underwriting standards established under 
                paragraph (1)(A) and any additional 
                requirements that the Oversight Board considers 
                appropriate, the Oversight Board shall permit a 
                total debt-to-income ratio of more than 43 
                percent, but not more than 50 percent, if the 
                mortgagor has made, on a timely basis before 
                the endorsement of the mortgage insured under 
                this section, not less than six months of 
                payments in an amount not less than the amount 
                of the monthly payment due under the mortgage 
                to be insured under this section. The holder of 
                the existing senior mortgage shall exercise 
                forbearance with respect to such mortgage 
                during the period in which such payments are 
                made.
                  ``(B) Computation of debt-to-income ratio.-- 
                In computing the mortgagor's total debt-to-
                income ratio for purposes of mortgage 
                qualification under the underwriting standards 
                established pursuant to this section--
                          ``(i) if the mortgagor is a debtor in 
                        a case under chapter 13 of title 11, 
                        United States Code, payments on 
                        recurring debts other than housing 
                        expenses shall be based on the amounts 
                        being paid on such debts under the 
                        mortgagor's confirmed plan under such 
                        chapter; and
                          ``(ii) if the mortgagor is a debtor 
                        in a case under chapter 7 of title 11, 
                        United States Code, recurring debts 
                        that are to be discharged in that case 
                        shall not be considered.
          ``(3) Authority.--The Oversight Board may alter the 
        ratios under this subsection for a particular class of 
        borrowers subject to such requirements as the Board 
        determines is necessary and appropriate to fulfill the 
        purposes of this Act.
          ``(4) Representations and warranties.--The Oversight 
        Board shall require the underwriter of the insured loan 
        to provide such representations and warranties as the 
        Oversight Board considers necessary or appropriate for 
        the Secretary to enforce compliance with all 
        underwriting and appraisal standards of the program.
  ``(e) Premiums.--For each mortgage insured under this 
section, the Oversight Board shall establish and the Secretary 
shall collect--
          ``(1) at the time of insurance, a single premium 
        payment in an amount equal to 3.0 percent of the amount 
        of the original insured principal obligation of the 
        mortgage, which shall be paid from the proceeds of the 
        mortgage being insured under this section, through the 
        reduction of the amount of indebtedness on the existing 
        senior mortgage required under subsection (c)(6)(A);
          ``(2) in addition to the premium under paragraph (1), 
        annual premium payments in an amount equal to 1.50 
        percent of the remaining insured principal balance of 
        the mortgage; and
          ``(3) an exit premium in the amount determined under 
        subsection (c)(8), but which shall not be less than 3.0 
        percent of the original insured principal obligation of 
        the mortgage, subject only to the availability of 
        sufficient net proceeds from sale, refinancing, or 
        other disposition of the property, as determined in 
        subsection (c)(8).
  ``(f) Origination Fees and Mortgage Rate.--The Oversight 
Board shall establish and the Secretary shall implement a 
reasonable limitation on origination fees for mortgages insured 
under this section and shall establish procedures to ensure 
that interest rates on such mortgages shall be commensurate 
with market rate interest rates on such types of loans.
  ``(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, 
        non-payment for services rendered, or bribery, the 
        development, reporting, result, or review of a real 
        estate appraisal sought in connection with the 
        mortgage.
          ``(2) Exceptions.--The requirements of paragraph (1) 
        shall not be construed as prohibiting a mortgage 
        lender, mortgage broker, mortgage banker, real estate 
        broker, appraisal management company, employee of an 
        appraisal management company, or any other person with 
        an interest in a real estate transaction from asking an 
        appraiser to provide 1 or more of the following 
        services:
                  ``(A) Consider additional, appropriate 
                property information, including the 
                consideration of additional comparable 
                properties to make or support an appraisal.
                  ``(B) Provide further detail, substantiation, 
                or explanation for the appraiser's value 
                conclusion.
                  ``(C) Correct errors in the appraisal report.
          ``(3) 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) Limitation on Aggregate Insurance Authority.--The 
aggregate original principal obligation of all mortgages 
insured under this section may not exceed $300,000,000,000.
  ``(i) Enhancement of FHA Capacity.--Under the direction of 
the Oversight 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.
  ``(j) Monitoring of Underwriting Risk.--
          ``(1) Monitoring of designated underwriters.--The 
        Oversight Board and the Secretary shall monitor 
        independent quality reviews as established pursuant to 
        subsection (i)(2) to--
                  ``(A) determine compliance of designated 
                underwriters with underwriting standards;
                  ``(B) determine rates of delinquency, claims 
                rates, and loss rates of designated 
                underwriters; and
                  ``(C) terminate eligibility of designated 
                underwriters that do not meet minimum 
                performance standards as the Oversight Board 
                may establish and the Secretary implements.
          ``(2) Reports by oversight board.--The Oversight 
        Board shall submit monthly reports to the Congress 
        identifying the progress of the program for mortgage 
        insurance under this section, which shall contain the 
        following information for each month:
                  ``(A) The number of new mortgages insured 
                under this section, including the location of 
                the properties subject to such mortgages by 
                census tract.
                  ``(B) The aggregate principal obligation of 
                new mortgages insured under this section.
                  ``(C) The average amount by which the 
                indebtedness on existing mortgages is reduced 
                in accordance with subsection (c)(6).
                  ``(D) The average amount by which the debt 
                service payments on existing mortgages is 
                reduced in accordance with subsection (c)(7).
                  ``(E) The amount of premiums collected for 
                insurance of mortgages under this section.
                  ``(F) The claim and loss rates for mortgages 
                insured under this section.
                  ``(G) The race, ethnicity, gender, and income 
                of the mortgagors, aggregated by geographical 
                areas at least as specific as census tracts, 
                except where necessary to protect privacy of 
                the borrower.
                  ``(H) Any other information that the 
                Oversight Board considers appropriate.
          ``(3) Report by inspector general.--The Inspector 
        General of the Department of Housing and Urban 
        Development shall conduct an annual audit of the 
        program for mortgage insurance under this section to 
        determine compliance with this section and program 
        rules.
  ``(k) 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.
  ``(l) Special Risk Insurance Fund.--The insurance of each 
mortgage under this section shall be the obligation of the 
Special Risk Insurance Fund established by section 238.
  ``(m) Definitions.--For purposes of this section, the 
following definitions shall apply:
          ``(1) Existing mortgage.--The term `existing 
        mortgage' means, with respect to a mortgage insured 
        under this section, a mortgage that is to be 
        extinguished, and paid or prepaid, from the proceeds of 
        the mortgage insured under this section.
          ``(2) 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.
          ``(3) 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.
  ``(n) Sunset.--
          ``(1) In general.--Except as provided in paragraph 
        (2), the authority of the Secretary to make any new 
        commitment to insure any mortgage under this section 
        shall terminate upon the expiration of the 2-year 
        period beginning on the date of the enactment of the 
        FHA Housing Stabilization and Homeownership Retention 
        Act of 2008.
          ``(2) Extensions.--The Oversight Board may, not more 
        than four times, extend the authority to enter into new 
        commitments to insure mortgages under this section 
        beyond the date specified in paragraph (1), except that 
        each such extension shall--
                  ``(A) be effective only if, before the 
                program terminates pursuant to paragraph (1) or 
                any previous extension pursuant to this 
                paragraph, the Oversight Board--
                          ``(i) certifies the need for such 
                        extension in writing to the Congress; 
                        and
                          ``(ii) causes notice of such 
                        extension to be published in the 
                        Federal Register no later than the 
                        beginning of the 3-month period that 
                        ends upon the scheduled termination 
                        date of the program; and
                  ``(B) be for a period of not more than 6 
                months.
  ``(o) Authorizations of Appropriations.--There is authorized 
to be appropriated for each of fiscal years 2008 and 2009--
          ``(1) $230,000,000 for providing counseling regarding 
        loss mitigation for mortgagors with 1- to 4-family 
        residences, including determining eligibility for the 
        program under this section, with grants to be 
        administered through the Neighborhood Reinvestment 
        Corporation, except that--
                  ``(A) funds shall be targeted to States and 
                communities based on their levels of 
                foreclosures and delinquencies in 2007 and 
                2008;
                  ``(B) not less than 15 percent of the funds 
                made available pursuant to this paragraph 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;
                  ``(C) $35,000,000 of the funds made available 
                pursuant to this paragraph shall be used by the 
                Neighborhood Reinvestment Corporation (referred 
                to in this subparagraph as the `NRC') to make 
                grants to State and local legal organizations 
                or attorneys that have demonstrated legal 
                experience in home foreclosure or eviction law 
                to provide legal assistance related to home 
                ownership preservation, home foreclosure 
                prevention, and tenancy associated with home 
                foreclosure or to counseling intermediaries 
                that have been approved by the Department of 
                Housing and Urban Development for the purpose 
                of making such grants or contracting for such 
                legal assistance; of the amount provided under 
                this subparagraph, at least 60 percent shall be 
                allocated for legal assistance to low-income 
                homeowners or tenants; such attorneys shall be 
                capable of assisting homeowners in owner-
                occupied homes or tenants who live in homes 
                with mortgages in default, in danger of 
                default, or subject to or at risk of 
                foreclosure or eviction and who have legal 
                issues that cannot be handled by counselors 
                employed by NRC intermediaries; in using the 
                amount made available under this subparagraph, 
                the NRC shall give priority consideration to 
                State and local legal organizations and 
                attorneys that (i) 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 (ii) have the capacity 
                to begin using the financial assistance within 
                90 days after receipt of the assistance; as a 
                condition of the receipt of a grant under this 
                subparagraph, the grantee shall submit to NRC 
                information relating to the demographic 
                characteristics of the assisted homeowners or 
                tenants, the dollar amount and terms of the 
                relevant mortgages and the outcome of legal 
                proceedings related to the foreclosure or 
                eviction proceedings, including the resolutions 
                thereof; except that no funds under this 
                subparagraph shall be used for class action 
                litigation;
                  ``(D) $20,000,000 of the funds made available 
                pursuant to this paragraph shall be used for 
                such counseling for veterans recently returning 
                from active duty in the Armed Forces;
                  ``(E) the NRC shall give priority 
                consideration for funding with amounts made 
                available pursuant to this paragraph, except 
                for funds made available under subparagraphs 
                (B), (C), and (D), to entities that have an 
                effective plan in place for making contact, 
                including personal contact, with defaulted 
                mortgagors, and such a plan may include use of 
                third parties (including both for-profit and 
                not-for-profit entities) to make personal 
                contact with defaulted mortgagors, or visits to 
                such mortgagors, or both;
                  ``(F) except with respect to funds reserved 
                under subparagraphs (B), (C), and (D), the NRC 
                shall give priority consideration for funding 
                with amounts made available pursuant to this 
                paragraph to entities that have a written plan 
                that has been implemented 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, both (i) prior to 
                commencement of any foreclosure proceedings, 
                and (ii) in the event effective in person or 
                phone contact has not been made with such 
                defaulted mortgagors prior thereto, then prior 
                to the conclusion of the foreclosure process; 
                and
                  ``(G) not less than 2 percent of the funds 
                made available pursuant to this paragraph shall 
                be used only for identifying and notifying 
                borrowers under existing mortgages who are 
                eligible under this section for insurance of 
                refinancing mortgages, and in making funds 
                reserved under this subparagraph available for 
                such purpose, the Secretary shall give 
                preference to assistance for programs that have 
                a proven history of outreach within minority 
                communities; and
          ``(2) $150,000,000 for costs of activities under 
        subsection (i).
  ``(p) Audit and Report by Inspector General.--
          ``(1) Audit.--The Inspector General of the Department 
        of Housing and Urban Development shall conduct an audit 
        of the program for loss mitigation counseling funded 
        with amounts made available under subsection (o)(1) to 
        determine compliance with such subsection.
          ``(2) Reports to congress.--Not later than March 30, 
        2009, and every calendar quarter thereafter, the 
        Inspector General shall submit to the appropriate 
        committees of the Congress a report summarizing the 
        activities of the Inspector General and the 
        Neighborhood Reinvestment Corporation during the 120-
        day period ending on the date of such report. Each 
        report shall include, for the period covered by such 
        report, a detailed statement of all obligations, 
        expenditures, and revenues associated with paragraphs 
        (1) and (2) of subsection (o), including--
                  ``(A) obligations and expenditures of 
                appropriated funds;
                  ``(B) the number of homeowners eligible in 
                such program;
                  ``(C) the number of homeowners participating 
                in such program;
                  ``(D) the status of homeowners within such 
                program;
                  ``(E) the number of homeowners who have 
                rejected assistance from the Neighborhood 
                Reinvestment Corporation; and
                  ``(F) information on participating counseling 
                services.''.
  (b) Special Risk Insurance Fund.--Section 238 of the National 
Housing Act (12 U.S.C. 1715z-3) is amended--
          (1) in subsection (a)(1), by striking ``or 243'' each 
        place such term appears and inserting ``243, or 257''; 
        and
          (2) in subsection (b), by striking ``and 243'' each 
        place such term appears and inserting ``243, and 257''.
  (c) FHA Reverse Mortgage Program.--Section 255(g) of the 
National Housing Act (12 U.S.C. 1715z-20(g)) is amended by 
striking the first sentence.

SEC. 113. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.

  (a) Study.--The Board of Governors of the Federal Reserve 
System (in this section referred to as the ``Board of 
Governors''), in consultation with other members of the 
Oversight Board established by section 257(a) of the National 
Housing Act (as added by the amendment made by section 112(a) 
of this title), 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 the 
mortgage insurance program under title II of the National 
Housing Act. 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.
  (b) Content.--
          (1) Analysis.--The study required under subsection 
        (a) shall analyze--
                  (A) the feasibility of establishing a 
                mechanism that would facilitate the more rapid 
                refinancing of borrowers at risk of foreclosure 
                into performing mortgages insured under title 
                II of the National Housing Act;
                  (B) whether such a mechanism would provide an 
                effective and efficient mechanism to reduce 
                foreclosures on qualified existing mortgages;
                  (C) 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;
                  (D) whether there are other mechanisms or 
                authority that would be useful to reduce 
                foreclosure; and
                  (E) and any other factors that the Board of 
                Governors considers relevant.
          (2) Determinations.--To the extent that the Board of 
        Governors finds that a facility of the type described 
        in paragraph (1) is feasible and useful, the study 
        shall--
                  (A) determine and identify any additional 
                authority or resources needed to establish and 
                operate such a mechanism;
                  (B) determine whether there is a need for 
                additional authority with respect to the loan 
                underwriting criteria included in the amendment 
                made by section 112(a) of this title or with 
                respect to eligibility of participating 
                borrowers, lenders, or holders of liens;
                  (C) 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 the National Housing Act.
  (c) Report.--Not later than the expiration of the 60-day 
period beginning on the date of the enactment of this Act, the 
Board of Governors shall submit a report regarding the results 
of the study conducted under this section 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 subsection (b)(1) and of the determinations made 
pursuant to subsection (b)(2), and shall include any other 
findings and recommendations of the Board of Governors pursuant 
to the study, including identifying various options for 
mechanisms described in subsection (a).

SEC. 114. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR 
                    CERTAIN HOUSING LOANS GUARANTEED BY 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. 115. STUDY OF POSSIBLE ACCOUNTING REVISIONS RELATING TO PROPERTY 
                    AT RISK OF FORECLOSURE AND THE AVAILABILITY OF 
                    CREDIT FOR REFINANCING HOME MORTGAGES AT RISK OF 
                    FORECLOSURE.

  (a) Study Required.--The Securities and Exchange Commission, 
in consultation with the Board of Governors of the Federal 
Reserve System, shall conduct a study on fair value accounting 
standards applicable to financial institutions, including 
depository institutions, with respect to their residential 
mortgages that are at risk of foreclosure and mortgage-backed 
securities involving such mortgages, the effects of such 
accounting standards on a financial institution's balance sheet 
and capacity to provide refinancing to residential mortgagors 
that are at risk of foreclosure and to residential mortgagors 
during periods of market value declines and increased 
foreclosures, and the advisability and feasibility of 
modifications of such standards during periods of market 
fluctuation in order to maintain the ability of the institution 
to continue to carry mortgages on residential property at risk 
of foreclosure and assure the availability of credit to 
refinance at-risk residential mortgages.
  (b) Report Required.--The Securities and Exchange Commission 
shall submit a report to the Congress before the end of the 90-
day period beginning on the date of the enactment of this Act 
containing the findings and determinations of the Commission 
with respect to the study conducted under subsection (a) and 
such administrative and legislative recommendations as the 
Commission may determine to be appropriate.

SEC. 116. GAO STUDY OF THE EFFECT OF TIGHTENING CREDIT MARKETS IN 
                    COMMUNITIES AFFECTED BY THE SUBPRIME MORTGAGE 
                    FORECLOSURE CRISES AND PREDATORY LENDING ON 
                    PROSPECTIVE FIRST-TIME HOMEBUYERS SEEKING 
                    MORTGAGES.

  The Comptroller General of the United States shall conduct a 
study to analyze the effects of tightening credit markets on 
prospective first-time home buyers who reside in selected 
communities that have been most detrimentally affected by both 
the current subprime mortgage foreclosure crisis and predatory 
mortgage lending. Such study shall also analyze the adequacy of 
financial literacy outreach efforts by agencies of the Federal 
Government tasked with implementing financial literacy 
education in such communities and shall assess whether the 
current funding levels for such efforts are at sufficient 
levels to reduce the levels of subprime mortgage delinquencies 
and foreclosures and to increase the level of financial 
literacy in the selected communities so as to minimize the 
incidences of predatory mortgage lending. Not later than the 
expiration of the 6-month period beginning on the date of the 
enactment of this Act, the Comptroller General shall submit a 
report to the Congress setting forth the results of the study 
and including recommendations regarding such funding levels.

                Subtitle B--Office of Housing Counseling

SEC. 131. SHORT TITLE.

  This subtitle may be cited as the ``Expand and Preserve Home 
Ownership Through Counseling Act''.

SEC. 132. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

  Section 4 of the Department of Housing and Urban Development 
Act (42 U.S.C. 3533) is amended by adding at the end the 
following new subsection:
  ``(g) Office of Housing Counseling.--
          ``(1) Establishment.--There is established, in the 
        Office of the Secretary, the Office of Housing 
        Counseling.
          ``(2) Director.--There is established the position of 
        Director of Housing Counseling. The Director shall be 
        the head of the Office of Housing Counseling and shall 
        be appointed by the Secretary. Such position shall be a 
        career-reserved position in the Senior Executive 
        Service.
          ``(3) Functions.--
                  ``(A) In general.--The Director shall have 
                ultimate responsibility within the Department, 
                except for the Secretary, for all activities 
                and matters relating to homeownership 
                counseling and rental housing counseling, 
                including--
                          ``(i) research, grant administration, 
                        public outreach, and policy development 
                        relating to such counseling; and
                          ``(ii) establishment, coordination, 
                        and administration of all regulations, 
                        requirements, standards, and 
                        performance measures under programs and 
                        laws administered by the Department 
                        that relate to housing counseling, 
                        homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity 
                        conversion mortgages and credit 
                        protection options to avoid 
                        foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures 
                        relating to housing counseling.
                  ``(B) Specific functions.--The Director shall 
                carry out the functions assigned to the 
                Director and the Office under this section and 
                any other provisions of law. Such functions 
                shall include establishing rules necessary 
                for--
                          ``(i) the counseling procedures under 
                        section 106(g)(1) of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x(h)(1));
                          ``(ii) carrying out all other 
                        functions of the Secretary under 
                        section 106(g) of the Housing and Urban 
                        Development Act of 1968, including the 
                        establishment, operation, and 
                        publication of the availability of the 
                        toll-free telephone number under 
                        paragraph (2) of such section;
                          ``(iii) carrying out section 5 of the 
                        Real Estate Settlement Procedures Act 
                        of 1974 (12 U.S.C. 2604) for home 
                        buying information booklets prepared 
                        pursuant to such section;
                          ``(iv) carrying out the certification 
                        program under section 106(e) of the 
                        Housing and Urban Development Act of 
                        1968 (12 U.S.C. 1701x(e));
                          ``(v) carrying out the assistance 
                        program under section 106(a)(4) of the 
                        Housing and Urban Development Act of 
                        1968, including criteria for selection 
                        of applications to receive assistance;
                          ``(vi) carrying out any functions 
                        regarding abusive, deceptive, or 
                        unscrupulous lending practices relating 
                        to residential mortgage loans that the 
                        Secretary considers appropriate, which 
                        shall include conducting the study 
                        under section 136 of the Expand and 
                        Preserve Home Ownership Through 
                        Counseling Act;
                          ``(vii) providing for operation of 
                        the advisory committee established 
                        under paragraph (4) of this subsection;
                          ``(viii) collaborating with 
                        community-based organizations with 
                        expertise in the field of housing 
                        counseling; and
                          ``(ix) providing for the building of 
                        capacity to provide housing counseling 
                        services in areas that lack sufficient 
                        services.
          ``(4) Advisory committee.--
                  ``(A) In general.--The Secretary shall 
                appoint an advisory committee to provide advice 
                regarding the carrying out of the functions of 
                the Director.
                  ``(B) Members.--Such advisory committee shall 
                consist of not more than 12 individuals, and 
                the membership of the committee shall equally 
                represent all aspects of the mortgage and real 
                estate industry, including consumers.
                  ``(C) Terms.--Except as provided in 
                subparagraph (D), each member of the advisory 
                committee shall be appointed for a term of 3 
                years. Members may be reappointed at the 
                discretion of the Secretary.
                  ``(D) Terms of initial appointees.--As 
                designated by the Secretary at the time of 
                appointment, of the members first appointed to 
                the advisory committee, 4 shall be appointed 
                for a term of 1 year and 4 shall be appointed 
                for a term of 2 years.
                  ``(E) Prohibition of pay; travel expenses.--
                Members of the advisory committee shall serve 
                without pay, but shall receive travel expenses, 
                including per diem in lieu of subsistence, in 
                accordance with applicable provisions under 
                subchapter I of chapter 57 of title 5, United 
                States Code.
                  ``(F) Advisory role only.--The advisory 
                committee shall have no role in reviewing or 
                awarding housing counseling grants.
          ``(5) Scope of homeownership counseling.--In carrying 
        out the responsibilities of the Director, the Director 
        shall ensure that homeownership counseling provided by, 
        in connection with, or pursuant to any function, 
        activity, or program of the Department addresses the 
        entire process of homeownership, including the decision 
        to purchase a home, the selection and purchase of a 
        home, issues arising during or affecting the period of 
        ownership of a home (including refinancing, default and 
        foreclosure, and other financial decisions), and the 
        sale or other disposition of a home.''.

SEC. 133. COUNSELING PROCEDURES.

  (a) In General.--Section 106 of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x) is amended by adding 
at the end the following new subsection:
  ``(g) Procedures and Activities.--
          ``(1) Counseling procedures.--
                  ``(A) In general.--The Secretary shall 
                establish, coordinate, and monitor the 
                administration by the Department of Housing and 
                Urban Development of the counseling procedures 
                for homeownership counseling and rental housing 
                counseling provided in connection with any 
                program of the Department, including all 
                requirements, standards, and performance 
                measures that relate to homeownership and 
                rental housing counseling.
                  ``(B) Homeownership counseling.--For purposes 
                of this subsection and as used in the 
                provisions referred to in this subparagraph, 
                the term `homeownership counseling' means 
                counseling related to homeownership and 
                residential mortgage loans. Such term includes 
                counseling related to homeownership and 
                residential mortgage loans that is provided 
                pursuant to--
                          ``(i) section 105(a)(20) of the 
                        Housing and Community Development Act 
                        of 1974 (42 U.S.C. 5305(a)(20));
                          ``(ii) in the United States Housing 
                        Act of 1937--
                                  ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  ``(II) section 8(y)(1)(D) (42 
                                U.S.C. 1437f(y)(1)(D));
                                  ``(III) section 18(a)(4)(D) 
                                (42 U.S.C. 1437p(a)(4)(D));
                                  ``(IV) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  ``(V) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  ``(VI) section 33(d)(2)(B) 
                                (42 U.S.C. 1437z-5(d)(2)(B));
                                  ``(VII) sections 302(b)(6) 
                                and 303(b)(7) (42 U.S.C. 
                                1437aaa-1(b)(6), 1437aaa-
                                2(b)(7)); and
                                  ``(VIII) section 304(c)(4) 
                                (42 U.S.C. 1437aaa-3(c)(4));
                          ``(iii) section 302(a)(4) of the 
                        American Homeownership and Economic 
                        Opportunity Act of 2000 (42 U.S.C. 
                        1437f note);
                          ``(iv) sections 233(b)(2) and 258(b) 
                        of the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 
                        12773(b)(2), 12808(b));
                          ``(v) this section and section 101(e) 
                        of the Housing and Urban Development 
                        Act of 1968 (12 U.S.C. 1701x, 
                        1701w(e));
                          ``(vi) section 220(d)(2)(G) of the 
                        Low-Income Housing Preservation and 
                        Resident Homeownership Act of 1990 (12 
                        U.S.C. 4110(d)(2)(G));
                          ``(vii) sections 422(b)(6), 
                        423(b)(7), 424(c)(4), 442(b)(6), and 
                        443(b)(6) of the Cranston-Gonzalez 
                        National Affordable Housing Act (42 
                        U.S.C. 12872(b)(6), 12873(b)(7), 
                        12874(c)(4), 12892(b)(6), and 
                        12893(b)(6));
                          ``(viii) section 491(b)(1)(F)(iii) of 
                        the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11408(b)(1)(F)(iii));
                          ``(ix) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A));
                          ``(x) in the National Housing Act--
                                  ``(I) in section 203 (12 
                                U.S.C. 1709), the penultimate 
                                undesignated paragraph of 
                                paragraph (2) of subsection 
                                (b), subsection (c)(2)(A), and 
                                subsection (r)(4);
                                  ``(II) subsections (a) and 
                                (c)(3) of section 237 (12 
                                U.S.C. 1715z-2); and
                                  ``(III) subsections (d)(2)(B) 
                                and (m)(1) of section 255 (12 
                                U.S.C. 1715z-20);
                          ``(xi) section 502(h)(4)(B) of the 
                        Housing Act of 1949 (42 U.S.C. 
                        1472(h)(4)(B)); and
                          ``(xii) section 508 of the Housing 
                        and Urban Development Act of 1970 (12 
                        U.S.C. 1701z-7).
                  ``(C) Rental housing counseling.--For 
                purposes of this subsection, the term `rental 
                housing counseling' means counseling related to 
                rental of residential property, which may 
                include counseling regarding future 
                homeownership opportunities and providing 
                referrals for renters and prospective renters 
                to entities providing counseling and shall 
                include counseling related to such topics that 
                is provided pursuant to--
                          ``(i) section 105(a)(20) of the 
                        Housing and Community Development Act 
                        of 1974 (42 U.S.C. 5305(a)(20));
                          ``(ii) in the United States Housing 
                        Act of 1937--
                                  ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  ``(II) section 18(a)(4)(D) 
                                (42 U.S.C. 1437p(a)(4)(D));
                                  ``(III) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  ``(IV) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  ``(V) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B)); and
                                  ``(VI) section 302(b)(6) (42 
                                U.S.C. 1437aaa-1(b)(6));
                          ``(iii) section 233(b)(2) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12773(b)(2));
                          ``(iv) section 106 of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x);
                          ``(v) section 422(b)(6) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12872(b)(6));
                          ``(vi) section 491(b)(1)(F)(iii) of 
                        the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11408(b)(1)(F)(iii));
                          ``(vii) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                          ``(viii) the rental assistance 
                        program under section 8 of the United 
                        States Housing Act of 1937 (42 U.S.C. 
                        1437f).
          ``(2) Standards for materials.--The Secretary, in 
        conjunction with the advisory committee established 
        under subsection (g)(4) of the Department of Housing 
        and Urban Development Act, shall establish standards 
        for materials and forms to be used, as appropriate, by 
        organizations providing homeownership counseling 
        services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          ``(3) Mortgage software systems.--
                  ``(A) Certification.--The Secretary shall 
                provide for the certification of various 
                computer software programs for consumers to use 
                in evaluating different residential mortgage 
                loan proposals. The Secretary shall require, 
                for such certification, that the mortgage 
                software systems take into account--
                          ``(i) the consumer's financial 
                        situation and the cost of maintaining a 
                        home, including insurance, taxes, and 
                        utilities;
                          ``(ii) the amount of time the 
                        consumer expects to remain in the home 
                        or expected time to maturity of the 
                        loan;
                          ``(iii) such other factors as the 
                        Secretary considers appropriate to 
                        assist the consumer in evaluating 
                        whether to pay points, to lock in an 
                        interest rate, to select an adjustable 
                        or fixed rate loan, to select a 
                        conventional or government-insured or 
                        guaranteed loan and to make other 
                        choices during the loan application 
                        process.
                If the Secretary determines that available 
                existing software is inadequate to assist 
                consumers during the residential mortgage loan 
                application process, the Secretary shall 
                arrange for the development by private sector 
                software companies of new mortgage software 
                systems that meet the Secretary's 
                specifications.
                  ``(B) Use and initial availability.--Such 
                certified computer software programs shall be 
                used to supplement, not replace, housing 
                counseling. The Secretary shall provide that 
                such programs are initially used only in 
                connection with the assistance of housing 
                counselors certified pursuant to subsection 
                (e).
                  ``(C) Availability.--After a period of 
                initial availability under subparagraph (B) as 
                the Secretary considers appropriate, the 
                Secretary shall take reasonable steps to make 
                mortgage software systems certified pursuant to 
                this paragraph widely available through the 
                Internet and at public locations, including 
                public libraries, senior-citizen centers, 
                public housing sites, offices of public housing 
                agencies that administer rental housing 
                assistance vouchers, and housing counseling 
                centers.
          ``(4) National public service multimedia campaigns to 
        promote housing counseling.--
                  ``(A) In general.--The Director of Housing 
                Counseling shall develop, implement, and 
                conduct national public service multimedia 
                campaigns designed to make persons facing 
                mortgage foreclosure, persons considering a 
                subprime mortgage loan to purchase a home, 
                elderly persons, persons who face language 
                barriers, low-income persons, and other 
                potentially vulnerable consumers aware that it 
                is advisable, before seeking or maintaining a 
                residential mortgage loan, to obtain 
                homeownership counseling from an unbiased and 
                reliable sources and that such homeownership 
                counseling is available, including through 
                programs sponsored by the Secretary of Housing 
                and Urban Development.
                  ``(B) Contact information.--Each segment of 
                the multimedia campaign under subparagraph (A) 
                shall publicize the toll-free telephone number 
                and web site of the Department of Housing and 
                Urban Development through which persons seeking 
                housing counseling can locate a housing 
                counseling agency in their State that is 
                certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a 
                home, renting, defaults, foreclosures, credit 
                issues, and reverse mortgages.
                  ``(C) Authorization of appropriations.--There 
                are authorized to be appropriated to the 
                Secretary, not to exceed $3,000,000 for fiscal 
                years 2008, 2009, and 2010, for the develop, 
                implement, and conduct of national public 
                service multimedia campaigns under this 
                paragraph.
          ``(5) Education programs.--The Secretary shall 
        provide advice and technical assistance to States, 
        units of general local government, and nonprofit 
        organizations regarding the establishment and operation 
        of, including assistance with the development of 
        content and materials for, educational programs to 
        inform and educate consumers, particularly those most 
        vulnerable with respect to residential mortgage loans 
        (such as elderly persons, persons facing language 
        barriers, low-income persons, and other potentially 
        vulnerable consumers), regarding home mortgages, 
        mortgage refinancing, home equity loans, and home 
        repair loans.''.
  (b) Conforming Amendments to Grant Program for Homeownership 
Counseling Organizations.--Section 106(c)(5)(A)(ii) of the 
Housing and Urban Development Act of 1968 (12 U.S.C. 
1701x(c)(5)(A)(ii)) is amended--
          (1) in subclause (III), by striking ``and'' at the 
        end;
          (2) in subclause (IV) by striking the period at the 
        end and inserting ``; and''; and
          (3) by inserting after subclause (IV) the following 
        new subclause:
                                  ``(V) notify the housing or 
                                mortgage applicant of the 
                                availability of mortgage 
                                software systems provided 
                                pursuant to subsection 
                                (g)(3).''.

SEC. 134. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

  Section 106(a) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end 
the following new paragraph:
  ``(4) Homeownership and Rental Counseling Assistance.--
          ``(A) In general.--The Secretary shall make financial 
        assistance available under this paragraph to States, 
        units of general local governments, and nonprofit 
        organizations providing homeownership or rental 
        counseling (as such terms are defined in subsection 
        (g)(1)).
          ``(B) Qualified entities.--The Secretary shall 
        establish standards and guidelines for eligibility of 
        organizations (including governmental and nonprofit 
        organizations) to receive assistance under this 
        paragraph.
          ``(C) Distribution.--Assistance made available under 
        this paragraph shall be distributed in a manner that 
        encourages efficient and successful counseling 
        programs.
          ``(D) Authorization of appropriations.--There are 
        authorized to be appropriated $45,000,000 for each of 
        fiscal years 2008 through 2011 for--
                  ``(i) the operations of the Office of Housing 
                Counseling of the Department of Housing and 
                Urban Development;
                  ``(ii) the responsibilities of the Secretary 
                under paragraphs (2) through (5) of subsection 
                (g); and
                  ``(iii) assistance pursuant to this paragraph 
                for entities providing homeownership and rental 
                counseling.''.

SEC. 135. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD 
                    PROGRAMS.

  Section 106(e) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(e)) is amended--
          (1) by striking paragraph (1) and inserting the 
        following new paragraph:
          ``(1) Requirement for assistance.--An organization 
        may not receive assistance for counseling activities 
        under subsection (a)(1)(iii), (a)(2), (a)(4), (c), or 
        (d) of this section, or under section 101(e), unless 
        the organization, or the individuals through which the 
        organization provides such counseling, has been 
        certified by the Secretary under this subsection as 
        competent to provide such counseling.'';
          (2) in paragraph (2)--
                  (A) by inserting ``and for certifying 
                organizations'' before the period at the end of 
                the first sentence; and
                  (B) in the second sentence by striking ``for 
                certification'' and inserting ``, for 
                certification of an organization, that each 
                individual through which the organization 
                provides counseling shall demonstrate, and, for 
                certification of an individual,'';
          (3) in paragraph (3), by inserting ``organizations 
        and'' before ``individuals'';
          (4) by redesignating paragraph (3) as paragraph (5); 
        and
          (5) by inserting after paragraph (2) the following 
        new paragraphs:
          ``(3) Requirement under hud programs.--Any 
        homeownership counseling or rental housing counseling 
        (as such terms are defined in subsection (g)(1)) 
        required under, or provided in connection with, any 
        program administered by the Department of Housing and 
        Urban Development shall be provided only by 
        organizations or counselors certified by the Secretary 
        under this subsection as competent to provide such 
        counseling.
          ``(4) Outreach.--The Secretary shall take such 
        actions as the Secretary considers appropriate to 
        ensure that individuals and organizations providing 
        homeownership or rental housing counseling are aware of 
        the certification requirements and standards of this 
        subsection and of the training and certification 
        programs under subsection (f).''.

SEC. 136. STUDY OF DEFAULTS AND FORECLOSURES.

  The Secretary of Housing and Urban Development shall conduct 
an extensive study of the root causes of default and 
foreclosure of home loans, using as much empirical data as are 
available. The study shall also examine the role of escrow 
accounts in helping prime and nonprime borrowers to avoid 
defaults and foreclosures. Not later than 12 months after the 
date of the enactment of this Act, the Secretary shall submit 
to the Congress a preliminary report regarding the study. Not 
later than 24 months after such date of enactment, the 
Secretary shall submit a final report regarding the results of 
the study, which shall include any recommended legislation 
relating to the study, and recommendations for best practices 
and for a process to identify populations that need counseling 
the most.

SEC. 137. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

  Section 106 of the Housing and Urban Development Act of 1968 
(12 U.S.C. 1701x), as amended by the preceding provisions of 
this subtitle, is further amended by adding at the end the 
following new subsection:
  ``(h) Definitions.--For purposes of this section:
          ``(1) Nonprofit organization.--The term `nonprofit 
        organization' has the meaning given such term in 
        section 104(5) of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 12704(5)), except 
        that subparagraph (D) of such section shall not apply 
        for purposes of this section.
          ``(2) State.--The term `State' means each of the 
        several States, the Commonwealth of Puerto Rico, the 
        District of Columbia, the Commonwealth of the Northern 
        Mariana Islands, Guam, the Virgin Islands, American 
        Samoa, the Trust Territories of the Pacific, or any 
        other possession of the United States.
          ``(3) Unit of general local government.--The term 
        `unit of general local government' means any city, 
        county, parish, town, township, borough, village, or 
        other general purpose political subdivision of a 
        State.''.

SEC. 138. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET.

  Section 5 of the Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2604) is amended--
          (1) in the section heading, by striking ``special'' 
        and inserting ``home buying'';
          (2) by striking subsections (a) and (b) and inserting 
        the following new subsections:
  ``(a) Preparation and Distribution.--The Secretary shall 
prepare, at least once every 5 years, a booklet to help 
consumers applying for federally related mortgage loans to 
understand the nature and costs of real estate settlement 
services. The Secretary shall prepare the booklet in various 
languages and cultural styles, as the Secretary determines to 
be appropriate, so that the booklet is understandable and 
accessible to homebuyers of different ethnic and cultural 
backgrounds. The Secretary shall distribute such booklets to 
all lenders that make federally related mortgage loans. The 
Secretary shall also distribute to such lenders lists, 
organized by location, of homeownership counselors certified 
under section 106(e) of the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x(e)) for use in complying with the 
requirement under subsection (c) of this section.
  ``(b) Contents.--Each booklet shall be in such form and 
detail as the Secretary shall prescribe and, in addition to 
such other information as the Secretary may provide, shall 
include in plain and understandable language the following 
information:
          ``(1) A description and explanation of the nature and 
        purpose of the costs incident to a real estate 
        settlement or a federally related mortgage loan. The 
        description and explanation shall provide general 
        information about the mortgage process as well as 
        specific information concerning, at a minimum--
                  ``(A) balloon payments;
                  ``(B) prepayment penalties; and
                  ``(C) the trade-off between closing costs and 
                the interest rate over the life of the loan.
          ``(2) An explanation and sample of the uniform 
        settlement statement required by section 4.
          ``(3) A list and explanation of lending practices, 
        including those prohibited by the Truth in Lending Act 
        or other applicable Federal law, and of other unfair 
        practices and unreasonable or unnecessary charges to be 
        avoided by the prospective buyer with respect to a real 
        estate settlement.
          ``(4) A list and explanation of questions a consumer 
        obtaining a federally related mortgage loan should ask 
        regarding the loan, including whether the consumer will 
        have the ability to repay the loan, whether the 
        consumer sufficiently shopped for the loan, whether the 
        loan terms include prepayment penalties or balloon 
        payments, and whether the loan will benefit the 
        borrower.
          ``(5) An explanation of the right of rescission as to 
        certain transactions provided by sections 125 and 129 
        of the Truth in Lending Act.
          ``(6) A brief explanation of the nature of a variable 
        rate mortgage and a reference to the booklet entitled 
        `Consumer Handbook on Adjustable Rate Mortgages', 
        published by the Board of Governors of the Federal 
        Reserve System pursuant to section 226.19(b)(1) of 
        title 12, Code of Federal Regulations, or to any 
        suitable substitute of such booklet that such Board of 
        Governors may subsequently adopt pursuant to such 
        section.
          ``(7) A brief explanation of the nature of a home 
        equity line of credit and a reference to the pamphlet 
        required to be provided under section 127A of the Truth 
        in Lending Act.
          ``(8) Information about homeownership counseling 
        services made available pursuant to section 106(a)(4) 
        of the Housing and Urban Development Act of 1968 (12 
        U.S.C. 1701x(a)(4)), a recommendation that the consumer 
        use such services, and notification that a list of 
        certified providers of homeownership counseling in the 
        area, and their contact information, is available.
          ``(9) An explanation of the nature and purpose of 
        escrow accounts when used in connection with loans 
        secured by residential real estate and the requirements 
        under section 10 of this Act regarding such accounts.
          ``(10) An explanation of the choices available to 
        buyers of residential real estate in selecting persons 
        to provide necessary services incidental to a real 
        estate settlement.
          ``(11) An explanation of a consumer's 
        responsibilities, liabilities, and obligations in a 
        mortgage transaction.
          ``(12) An explanation of the nature and purpose of 
        real estate appraisals, including the difference 
        between an appraisal and a home inspection.
          ``(13) Notice that the Office of Housing of the 
        Department of Housing and Urban Development has made 
        publicly available a brochure regarding loan fraud and 
        a World Wide Web address and toll-free telephone number 
        for obtaining the brochure.
The booklet prepared pursuant to this section shall take into 
consideration differences in real estate settlement procedures 
that may exist among the several States and territories of the 
United States and among separate political subdivisions within 
the same State and territory.'';
          (3) in subsection (c), by inserting at the end the 
        following new sentence: ``Each lender shall also 
        include with the booklet a reasonably complete or 
        updated list of homeownership counselors who are 
        certified pursuant to section 106(e) of the Housing and 
        Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and 
        located in the area of the lender.''; and
          (4) in subsection (d), by inserting after the period 
        at the end of the first sentence the following: ``The 
        lender shall provide the HUD-issued booklet in the 
        version that is most appropriate for the person 
        receiving it.''.

                  Subtitle C--Combating Mortgage Fraud

SEC. 151. AUTHORIZATION OF APPROPRIATIONS TO COMBAT MORTGAGE FRAUD.

  For fiscal years 2008, 2009, 2010, 2011, and 2012, there are 
authorized to be appropriated to the Attorney General a total 
of--
          (1) $31,250,000 to support the employment of 30 
        additional agents of the Federal Bureau of 
        Investigation and 2 additional dedicated prosecutors at 
        the Department of Justice to coordinate prosecution of 
        mortgage fraud efforts with the offices of the United 
        States Attorneys; and
          (2) $750,000 to support the operations of interagency 
        task forces of the Federal Bureau of Investigation in 
        the areas with the 15 highest concentrations of 
        mortgage fraud.

     TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE 
                             MODERNIZATION

                         Subtitle A--FHA Reform

SEC. 201. SHORT TITLE.

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

SEC. 202. FINDINGS AND PURPOSES.

  (a) Findings.--The Congress finds that--
          (1) one of the primary missions of the Federal 
        Housing Administration (FHA) single family mortgage 
        insurance program is to reach borrowers who are 
        underserved, or not served, by the existing 
        conventional mortgage marketplace;
          (2) the FHA program has a long history of innovation, 
        which includes pioneering the 30-year self-amortizing 
        mortgage and a safe-to-seniors reverse mortgage 
        product, both of which were once thought too risky to 
        private lenders;
          (3) the FHA single family mortgage insurance program 
        traditionally has been a major provider of mortgage 
        insurance for home purchases;
          (4) the FHA mortgage insurance premium structure, as 
        well as FHA's product offerings, should be revised to 
        reflect FHA's enhanced ability to determine risk at the 
        loan level and to allow FHA to better respond to 
        changes in the mortgage market;
          (5) during past recessions, including the oil-patch 
        downturns in the mid-1980s, FHA remained a viable 
        credit enhancer and was therefore instrumental in 
        preventing a more catastrophic collapse in housing 
        markets and a greater loss of homeowner equity; and
          (6) as housing price appreciation slows and interest 
        rates rise, many homeowners and prospective homebuyers 
        will need the less-expensive, safer financing 
        alternative that FHA mortgage insurance provides.
  (b) Purposes.--The purposes of this subtitle are--
          (1) to provide flexibility to FHA to allow for the 
        insurance of housing loans for low- and moderate-income 
        homebuyers during all economic cycles in the mortgage 
        market;
          (2) to modernize the FHA single family mortgage 
        insurance program by making it more reflective of 
        enhancements to loan-level risk assessments and changes 
        to the mortgage market; and
          (3) to adjust the loan limits for the single family 
        mortgage insurance program to reflect rising house 
        prices and the increased costs associated with new 
        construction.

SEC. 203. MAXIMUM PRINCIPAL LOAN OBLIGATION.

  (a) In General.--Section 203(b)(2) of the National Housing 
Act (12 U.S.C. 1709(b)(2)(A)) is amended by striking 
subparagraph (A) and inserting the following new subparagraph:
                  ``(A) not to exceed the lesser of--
                          ``(i) in the case of a 1-family 
                        residence, 125 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 
                        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) 175 percent of the dollar 
                        amount limitation determined under such 
                        section 305(a)(2)(A) for a residence of 
                        the applicable size (without regard to 
                        any authority to increase such 
                        limitations with respect to properties 
                        located in Alaska, Guam, Hawaii, or the 
                        Virgin Islands and without regard to 
                        the high-cost area limitation under 
                        such section 305(a)(2)(B));
                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 such 
                section 305(a)(2) for a residence of the 
                applicable size; and except that, if the 
                Secretary determines that market conditions 
                warrant such an increase, the Secretary may, 
                for such period as the Secretary considers 
                appropriate, increase the maximum dollar amount 
                limitation determined pursuant to the preceding 
                provisions of this subparagraph with respect to 
                any particular size or sizes of residences, or 
                with respect to residences located in any 
                particular area or areas, to an amount that 
                does not exceed the maximum dollar amount then 
                otherwise in effect pursuant to the preceding 
                provisions of this subparagraph for such size 
                residence, or for such area (if applicable), by 
                not more than $100,000; and''.
  (b) Treatment of Temporary Loan Limit Increase.--Subsection 
(a) and the amendment made by such subsection may not be 
construed to in any way affect the effectiveness of section 202 
of the Economic Stimulus Act of 2008 (Public Law 110-185; 122 
Stat. 620).

SEC. 204. EXTENSION OF MORTGAGE TERM.

  Paragraph (3) of section 203(b) of the National Housing Act 
(12 U.S.C. 1709(b)(3)) is amended--
          (1) by striking ``thirty-five years'' and inserting 
        ``forty years''; and
          (2) by striking ``(or thirty years if such mortgage 
        is not approved for insurance prior to construction)''.

SEC. 205. DOWNPAYMENT SIMPLIFICATION.

  Section 203(b) of the National Housing Act (12 U.S.C. 
1709(b)) is amended--
          (1) in paragraph (2)--
                  (A) by striking subparagraph (B) and 
                inserting the following new subparagraph:
                  ``(B) not to exceed an amount equal to the 
                sum of--
                          ``(i) the amount of the mortgage 
                        premium paid at the time the mortgage 
                        is insured; and
                          ``(ii) 97.75 percent of the appraised 
                        value of the property.'';
                  (B) in the matter after and below 
                subparagraph (B), by striking the second 
                sentence (relating to a definition of ``average 
                closing cost'') and all that follows through 
                ``title 38, United States Code.''; and
                  (C) by striking the last undesignated 
                paragraph (relating to counseling with respect 
                to the responsibilities and financial 
                management involved in homeownership); and
          (2) in paragraph (9)--
                  (A) by striking the paragraph designation and 
                all that follows through ``Provided further, 
                That for'' and inserting the following:
          ``(9) Be executed by a mortgagor who shall have paid 
        on account of the property, in cash or its equivalent, 
        at least 3 percent of the Secretary's estimate of the 
        cost of acquisition (excluding the mortgage insurance 
        premium paid at the time the mortgage is insured). 
        For''; and
                  (B) by inserting after the period at the end 
                the following: ``For purposes of this 
                paragraph, the Secretary shall consider as cash 
                or its equivalent any amounts gifted by a 
                family member (as such term is defined in 
                section 201), the mortgagor's employer or labor 
                union, or a qualified homeownership assistance 
                entity, but only if there is no obligation on 
                the part of the mortgagor to repay the gift: 
                For purposes of the preceding sentence, the 
                term `qualified homeownership assistance 
                entity' means any governmental agency or 
                charity that has a program to provide 
                homeownership assistance to low- and moderate-
                income families or first-time home buyers, or 
                any private nonprofit organization that has 
                such a program and evidences sufficient fiscal 
                soundness to protect the fiscal integrity of 
                the Mutual Mortgage Insurance Fund by 
                maintaining a minimum net worth of $4,000,000 
                of acceptable assets.''.

SEC. 206. MORTGAGE INSURANCE PREMIUMS FOR QUALIFIED HOMEOWNERSHIP 
                    ASSISTANCE ENTITIES AND HIGHER-RISK BORROWERS.

  Paragraph (2) of section 203(c) of the National Housing Act 
(12 U.S.C. 1709(c)(2)) is amended--
          (1) in subparagraph (A), in the matter preceding 
        subparagraph (A), by striking the first comma after 
        ``section 234(c)'';
          (2) in subparagraph (A), by inserting after the 
        period at the end of the second sentence the following: 
        ``In the case of a mortgage for which any amounts 
        gifted by a qualified homeownership assistance entity 
        (as such term is defined in paragraph (9) of subsection 
        (b)) that is a private nonprofit organization are 
        treated as cash or its equivalent for purposes of 
        meeting the 3 percent requirement under such paragraph, 
        the premium payment under this subparagraph shall not 
        exceed 3.0 percent of the amount of the original 
        insured principal obligation of the mortgage.''; and
          (3) by adding at the end the following new 
        subparagraph:
          ``(C) Higher-risk borrowers.--The Secretary shall 
        establish underwriting standards that provide for 
        insurance under this section of mortgages described in 
        the matter in this paragraph preceding subparagraph (A) 
        for which the mortgagor has a credit score equivalent 
        to a FICO score of less than 560, and may insure, and 
        make commitments to insure, such mortgages. Such 
        underwriting standards shall include establishing and 
        collecting premium payments that comply with the 
        requirements of this paragraph, except that 
        notwithstanding subparagraph (A), the single premium 
        payment collected at the time of insurance may be 
        established in an amount that does not exceed 3.0 
        percent of the amount of the original insured principal 
        obligation of the mortgage.''.

SEC. 207. RISK-BASED MORTGAGE INSURANCE PREMIUMS.

  Section 203(c) of the National Housing Act (12 U.S.C. 
1709(c)), as amended by the preceding provisions of this 
subtitle, is further amended by adding at the end the following 
new paragraphs:
  ``(4) Flexible Risk-Based Premiums.--In the case of a 
mortgage referred to in paragraph (2)(C) or a mortgage 
described in the third sentence of subparagraph (A) of 
paragraph (2) (relating to mortgages for which amounts are 
gifted by a nonprofit qualified homeownership assistance 
entity), for which the loan application is received by the 
mortgagee on or after the date of the enactment of the 
Expanding American Homeownership Act of 2008:
          ``(A) In general.--The Secretary may establish a 
        mortgage insurance premium structure involving a single 
        premium payment collected prior to the insurance of the 
        mortgage or annual payments (which may be collected on 
        a periodic basis), or both, subject to the requirements 
        of subparagraph (B) and paragraph (5). Under such 
        structure, the rate of premiums for such a mortgage may 
        vary according to the credit risk associated with the 
        mortgage and the rate of any annual premium for such a 
        mortgage may vary during the mortgage term as long as 
        the basis for determining the variable rate is 
        established before the execution of the mortgage. The 
        Secretary may change a premium structure established 
        under this subclause but only to the extent that such 
        change is not applied to any mortgage already executed.
          ``(B) Establishment and alteration of premium 
        structure.--A premium structure shall be established or 
        changed under subparagraph (A) only by providing notice 
        to mortgagees and to the Congress, at least 30 days 
        before the premium structure is established or changed.
          ``(C) Annual report regarding premiums.--The 
        Secretary shall submit a report to the Congress 
        annually setting forth the rate structures and rates 
        established and altered pursuant to this paragraph 
        during the preceding 12-month period and describing how 
        such rates were determined.
  ``(5) Considerations for Premium Structure.--When 
establishing premiums for mortgages referred to in paragraph 
(2)(C), establishing premiums pursuant to paragraph (3), 
establishing a premium structure under paragraph (4), and when 
changing such a premium structure, the Secretary shall consider 
the following:
          ``(A) The effect of the proposed premiums or 
        structure on the Secretary's ability to meet the 
        operational goals of the Mutual Mortgage Insurance Fund 
        as provided in section 202(a).
          ``(B) Underwriting variables.
          ``(C) The extent to which new pricing under the 
        proposed premiums or structure has potential for 
        acceptance in the private market.
          ``(D) The administrative capability of the Secretary 
        to administer the proposed premiums or structure.
          ``(E) The effect of the proposed premiums or 
        structure on the Secretary's ability to maintain the 
        availability of mortgage credit and provide stability 
        to mortgage markets.
  ``(6) Authority to Base Premium Prices on Product Risk.--
          ``(A) Authority.--In establishing premium rates under 
        paragraphs (2), (3), and (4), the Secretary may provide 
        for variations in such rates according to the credit 
        risk associated with the type of mortgage product that 
        is being insured under this title, which may include 
        providing that premium rates differ between fixed-rate 
        mortgages and adjustable-rate mortgages insured 
        pursuant to section 251, between mortgages insured 
        pursuant to section 203(b) and mortgages for 
        condominiums insured pursuant to section 234, and 
        between such other products as the Secretary considers 
        appropriate.
          ``(B) Limitation.--Subparagraph (A) may not be 
        construed to authorize the Secretary to establish, for 
        any mortgage product, any mortgage insurance premium 
        rate that does not comply with the requirements and 
        limitations under paragraphs (2) through (5).''.

SEC. 208. PAYMENT INCENTIVES FOR HIGHER-RISK BORROWERS.

  Section 203(c) of the National Housing Act (12 U.S.C. 
1709(c)), as amended by the preceding provisions of this 
subtitle, is further amended by adding at the end the following 
new paragraph:
  ``(7) Payment Incentives.--
          ``(A) Authority.--With respect to mortgages referred 
        to in paragraph (2)(C):
                  ``(i) Discretionary 3-year payment 
                incentive.--The Secretary may provide, in the 
                discretion of the Secretary, that the payment 
                incentive under subparagraph (B) shall apply 
                upon the expiration of the 3-year period 
                beginning upon the time of insurance of such a 
                mortgage.
                  ``(ii) Mandatory 5-year payment incentive.--
                The Secretary shall provide that the payment 
                incentive under subparagraph (B) applies upon 
                the expiration of the 5-year period beginning 
                upon the time of insurance of such a mortgage.
          ``(B) Payment incentive.--In the case of any mortgage 
        to which the payment incentive under this subparagraph 
        applies, if, during the period referred to in clause 
        (i) or (ii) of subparagraph (A), as applicable, all 
        mortgage insurance premiums for such mortgage have been 
        paid on a timely basis, upon the expiration of such 
        period the Secretary shall--
                  ``(i) reduce the amount of the annual premium 
                payments otherwise due thereafter under such 
                mortgage to an amount that does not exceed the 
                amount of the annual premium payable at the 
                time of insurance of the mortgage on a mortgage 
                of the same product type having the same terms, 
                but for which the mortgagor has a credit score 
                equivalent to a FICO score of 560 or more; and
                  ``(ii) refund to the mortgagor, upon payment 
                in full of the obligation of the mortgage, any 
                amount by which the single premium payment for 
                such mortgage collected at the time of 
                insurance exceeded the amount of the single 
                premium payment chargeable under paragraph 
                (2)(A) at the time of insurance for a mortgage 
                of the same product type having the same terms, 
                but for which the mortgagor has a credit score 
                equivalent to a FICO score of 560 or more.''.

SEC. 209. PROTECTIONS FOR HIGHER-RISK BORROWERS.

  Section 203(b) of the National Housing Act (12 U.S.C. 
1709(b)) is amended by adding at the end the following new 
paragraph:
          ``(10) Protections for higher-risk borrowers.--Except 
        as otherwise specifically provided in this paragraph, 
        in the case of any mortgage referred to in paragraph 
        (2)(C) of subsection (c), the following requirements 
        shall apply:
                  ``(A) Disclosures.--
                          ``(i) Required disclosures.--In 
                        addition to any disclosures that are 
                        otherwise required by law or by the 
                        Secretary for single family mortgages, 
                        the mortgagee shall disclose to the 
                        mortgagor the following information:
                                  ``(I) At application.--At the 
                                time of application for the 
                                loan involved in the mortgage, 
                                a list of counseling agencies, 
                                approved by the Secretary, in 
                                the area of the applicant.
                                  ``(II) At execution.--At the 
                                time of entering into the 
                                mortgage--
                                          ``(aa) the terms of 
                                        the mandatory 5-year 
                                        payment incentive 
                                        required under 
                                        subsection 
                                        (c)(7)(A)(ii); and
                                          ``(bb) a statement 
                                        that the mortgagor has 
                                        a right under contract 
                                        to loss mitigation.
                                  ``(III) Other information.--
                                Any other additional 
                                information that the Secretary 
                                determines is appropriate to 
                                ensure that the mortgagor has 
                                received timely and accurate 
                                information about the program 
                                under paragraph (2)(C) of 
                                subsection (c).
                          ``(ii) Penalties for failure to 
                        provide required disclosures.--The 
                        Secretary may establish and impose 
                        appropriate penalties for failure of a 
                        mortgagee to provide any disclosure 
                        required under clause (i).
                          ``(iii) No private right of action.--
                        This subparagraph shall not create any 
                        private right of action on behalf of 
                        the mortgagor.
                  ``(B) Counseling.--
                          ``(i) Requirement.--The Secretary 
                        shall require that the mortgagor shall 
                        have received counseling that complies 
                        with the requirements of this 
                        subparagraph.
                          ``(ii) Terms of counseling.--
                        Counseling under this subparagraph 
                        shall be provided--
                                  ``(I) prior to closing for 
                                the loan involved in the 
                                mortgage;
                                  ``(II) by a third party 
                                (other than the mortgagee) who 
                                is approved by the Secretary, 
                                with respect to the 
                                responsibilities and financial 
                                management involved in 
                                homeownership;
                                  ``(III) on an individual 
                                basis to the mortgagor by a 
                                representative of the approved 
                                third-party counseling entity; 
                                and
                                  ``(IV) in person, to the 
                                maximum extent possible.
                          ``(iii) 2- and 3-family residences.--
                        In the case of a mortgage involving a 
                        2- or 3-family residence, counseling 
                        under this subparagraph shall include 
                        (in addition to the information 
                        required under clause (iii)) 
                        information regarding real estate 
                        property management.
                  ``(C) Notice of foreclosure prevention 
                counseling availability.--
                          ``(i) Written agreement.--To be 
                        eligible for insurance under this 
                        subsection, the mortgagee shall provide 
                        the mortgagor, at the time of the 
                        execution of the mortgage, a written 
                        agreement which shall be signed by the 
                        mortgagor and under which the mortgagee 
                        shall provide notice described in 
                        clause (ii) to a housing counseling 
                        entity that has agreed to provide the 
                        notice and counseling required under 
                        clause (iii) and is approved by the 
                        Secretary.
                          ``(ii) Notice to counseling agency.--
                        The notice described in this clause, 
                        with respect to a mortgage, is notice, 
                        provided at the earliest time 
                        practicable after the mortgagor becomes 
                        60 days delinquent with respect to any 
                        payment due under the mortgage, that 
                        the mortgagor is so delinquent and of 
                        how to contact the mortgagor. Such 
                        notice may only be provided once with 
                        respect to each delinquency period for 
                        a mortgage.
                          ``(iii) Notice to mortgagor.--Upon 
                        notice from a mortgagee that a 
                        mortgagor is 60 days delinquent with 
                        respect to payments due under the 
                        mortgage, the housing counseling entity 
                        shall at the earliest time practicable 
                        notify the mortgagor of such 
                        delinquency, that the entity makes 
                        available foreclosure prevention 
                        counseling that may assist the 
                        mortgagor in resolving the delinquency, 
                        and of how to contact the entity to 
                        arrange for such counseling.
                          ``(iv) Ability to cure.--Failure to 
                        provide the written agreement required 
                        under clause (i) may be corrected by 
                        sending such agreement to the mortgagor 
                        not later than the earliest time 
                        practicable after the mortgagor first 
                        becomes 60 days delinquent with respect 
                        to payments due under the mortgage. 
                        Insurance provided under this 
                        subsection may not be terminated and 
                        penalties for such failure may not be 
                        prospectively or retroactively imposed 
                        if such failure is corrected in 
                        accordance with this clause.
                          ``(v) Penalties for failure to 
                        provide agreement.--The Secretary may 
                        establish and impose appropriate 
                        penalties for failure of a mortgagee to 
                        provide the written agreement required 
                        under clause (i).
                          ``(vi) Limitation on liability of 
                        mortgagee.--A mortgagee shall not incur 
                        any liability or penalties for any 
                        failure of a housing counseling entity 
                        to provide notice under clause (iii).
                          ``(vii) No private right of action.--
                        This subparagraph shall not create any 
                        private right of action on behalf of 
                        the mortgagor.
                          ``(viii) Delinquency period.--For 
                        purposes of this subparagraph, the term 
                        `delinquency period' means, with 
                        respect to a mortgage, a period that 
                        begins upon the mortgagor becoming 
                        delinquent with respect to payments due 
                        under the mortgage and ends upon the 
                        first subsequent occurrence of such 
                        payments under the mortgage becoming 
                        current or the property subject to the 
                        mortgage being foreclosed or otherwise 
                        disposed of.''.

SEC. 210. REFINANCING MORTGAGES.

  Section 203 of the National Housing Act (12 U.S.C. 1709) is 
amended by inserting after subsection (k) the following new 
subsection:
  ``(l) Refinancing Mortgages.--
          ``(1) Establishment of underwriting standards.--The 
        Secretary shall establish underwriting standards that 
        provide for insurance under this title of mortgage 
        loans, and take actions to facilitate the availability 
        of mortgage loans insured under this title, for 
        qualified borrowers that are made for the purpose of 
        paying or prepaying outstanding obligations under 
        existing mortgages for borrowers that--
                  ``(A) have existing mortgages with adverse 
                terms or rates, or
                  ``(B) do not have access to mortgages at 
                reasonable rates and terms for such 
                refinancings due to adverse market conditions.
          ``(2) Insurance of mortgages to borrowers in default 
        or at risk of default.--In facilitating insurance for 
        such mortgages, the Secretary may insure mortgages to 
        borrowers who are, currently in default or at imminent 
        risk of being in default, but only if such loans meet 
        reasonable underwriting standards established by the 
        Secretary.''.

SEC. 211. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS MITIGATION.

  Section 540(b)(2) of the National Housing Act (12 U.S.C. 
1735f-18(b)(2)) is amended, by adding at the end the following 
new subparagraphs:
                  ``(C) The rates of default and foreclosure 
                for the applicable collection period for 
                mortgages insured pursuant to the program for 
                mortgage insurance under paragraph (2)(C) of 
                section 203(c).
                  ``(D) Actions taken by the Secretary during 
                the applicable collection period with respect 
                to loss mitigation on mortgages insured 
                pursuant to section 203.''.

SEC. 212. INSURANCE FOR SINGLE FAMILY HOMES WITH LICENSED CHILD CARE 
                    FACILITIES.

  (a) Definition of Child Care Facility.--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 `child care facility' means a facility that--
          ``(A) has as its purpose the care of children who are 
        less than 12 years of age; and
          ``(B) is licensed or regulated by the State in which 
        it is located (or, if there is no State law providing 
        for such licensing and regulation by the State, by the 
        municipality or other political subdivision in which 
        the facility is located).
Such term does not include facilities for school-age children 
primarily for use during normal school hours.''.
  (b) Increase in Maximum Mortgage Amount Limitation.--
Paragraph (2) of section 203(b) of the National Housing Act (12 
U.S.C. 1709(b)(2)), as amended by the preceding provisions of 
this subtitle, is further amended by adding at end the 
following new undesignated paragraph:
          ``Notwithstanding any other provision of this 
        paragraph, the amount that may be insured under this 
        section may be increased by up to 25 percent if such 
        increase is necessary to account for the increased cost 
        of the residence due to an increased need of space in 
        the residence for locating and operating a child care 
        facility (as such term is defined in section 201) 
        within the residence, but only if a valid license or 
        certificate of compliance with regulations described in 
        section 201(g)(2) has been issued for such facility as 
        of the date of the execution of the mortgage, and only 
        if such increase in the amount insured is proportional 
        to the amount of space of such residence that will be 
        used for such facility.''.

SEC. 213. 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. 214. 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. 215. INSURANCE OF CONDOMINIUMS AND MANUFACTURED HOUSING.

  (a) In General.--Section 234 of the National Housing Act (12 
U.S.C. 1715y) is amended--
          (1) in subsection (c)--
                  (A) in the first sentence--
                          (i) by striking ``and'' before 
                        ``(2)''; and
                          (ii) 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
                  (B) in clause (B) of the third sentence, by 
                striking ``thirty-five years'' and inserting 
                ``forty years''; 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), as amended by the preceding 
provisions of this subtitle, is further amended by adding at 
the end the following new subsection:
  ``(h) 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. 216. 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.
          ``(5) Quarterly reports.--During each fiscal year, 
        the Secretary shall submit a report to the Congress for 
        each 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 upon the expiration of the 90-day 
        period beginning on the date of the enactment of the 
        Expanding 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 (5), the Secretary determines that the Fund 
        is not meeting the operational goals established under 
        paragraph (8) 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 section 203 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 charge borrowers under loans that 
                are obligations of the Fund an appropriate 
                premium for the risk that such loans pose to 
                the Fund;
                  ``(B) to minimize the default risk to the 
                Fund and to homeowners;
                  ``(C) to curtail the impact of adverse 
                selection on the Fund; and
                  ``(D) 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 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. 217. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

  (a) Hawaiian Home Lands.--Section 247(c) of the National 
Housing Act (12 U.S.C. 1715z-12) 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) is amended--
          (1) by striking ``General Insurance Fund'' the first 
        place it appears and all that follows 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. 218. 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. 219. 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) in subsection (b)(4), by striking subparagraph 
        (B) and inserting the following new subparagraph:
                  ``(B) under a lease that has a term that ends 
                no earlier than the minimum number of years, as 
                specified by the Secretary, beyond the 
                actuarial life expectancy of the mortgagor or 
                comortgagor, whichever is the later date.''.
          (3) in the second sentence of subsection (g), by 
        striking ``the maximum dollar amount established under 
        section 203(b)(2)'' and all that follows through 
        ``located'' and inserting ``132 percent of the dollar 
        amount limitation determined under section 305(a)(2)(A) 
        of the Federal Home Loan Mortgage Corporation Act for a 
        1-family residence (without regard to any authority to 
        increase such limitations with respect to properties 
        located in Alaska, Guam, Hawaii, or the Virgin Islands 
        and without regard to the high-cost area limitation 
        under such section 305(a)(2)(B))'';
          (4) in subsection (i)(1)(C), by striking 
        ``limitations'' and inserting ``limitation''; and
          (5) by adding at the end the following new 
        subsection:
  ``(o) Authority to Insure Home Purchase Mortgages.--
          ``(1) In general.--Notwithstanding any other 
        provision in 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 primary purpose 
        of the home equity conversion mortgage is to enable an 
        elderly mortgagor to purchase a 1- to 4-family dwelling 
        in which the mortgagor will occupy or occupies one of 
        the units.
          ``(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 limitation under subsection (g) of 
        this section on the maximum amount of the benefits of 
        insurance under this section.''.
  (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) Prohibition on Required Purchase of an Annuity.--Section 
255 of the National Housing Act of 1937 (12 U.S.C. 1715z-20) is 
amended--
          (1) by striking subparagraph (B) of subsection (d)(2) 
        and inserting the following new subparagraph:
                  ``(B) has received adequate counseling by a 
                third party (other than a reverse mortgage 
                lender, servicer or investor, or an entity 
                engaged in the sale of annuities, investments, 
                long-term care insurance, or any other type of 
                financial or insurance product) as provided in 
                subsection (f);'';
          (2) by striking the first sentence of subsection (f) 
        and inserting the following new sentence: ``The 
        Secretary shall provide or cause to be provided and 
        paid for by entities other than a reverse mortgage 
        lender, servicer or investor, or an entity engaged in 
        the sale of annuities, investments, long-term care 
        insurance, or any other type of financial or insurance 
        product the information required in subsection 
        (d)(2)(B).''; and
          (3) by striking subsections (l) and (m) and inserting 
        the following new subsection:
  ``(l) Regulations to Protect Elderly Homeowners.--
          ``(1) In general.--Not later than 6 months after the 
        date of the enactment of the Expanding American 
        Homeownership Act of 2008, the Secretary shall, in 
        consultation with other relevant Federal departments 
        and agencies, prescribe regulations to help protect 
        elderly homeowners from the marketing of financial and 
        insurance products not in the interest of such 
        homeowners, including the marketing or sale of an 
        annuity as a condition of obtaining any home equity 
        conversion mortgage.
          ``(2) Consultation.--In developing the regulations 
        required under paragraph (1), the Secretary shall 
        consult with consumer advocates (including recognized 
        experts in consumer protection), industry 
        representatives, representatives of counseling 
        organizations, and other interested parties.''.
  (d) 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--
          (1) by redesignating subsections (k), (l), and (m) as 
        subsections (l), (m), and (n), respectively; and
          (2) by inserting after subsection (j) the following 
        new subsection:
  ``(k) 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) 
        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 or to mortgage 
        brokers;
          ``(5) apply beginning upon the date that the maximum 
        dollar amount limitation on the benefits of insurance 
        under this section is first increased pursuant to the 
        amendments made by section 219(a)(3) of the Expanding 
        American Homeownership Act of 2008; 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, produce dollar increases that exceed $500.''.
  (e) Study Regarding Mortgage Insurance Premiums.--The 
Secretary of Housing and Urban Development shall conduct a 
study regarding mortgage insurance premiums charged under the 
program under section 255 of the National Housing Act (12 
U.S.C. 1715z-20) for insurance of home equity conversion 
mortgages to analyze and determine the effects of reducing the 
amounts of such premiums from the amounts charged as of the 
date of the enactment of this Act on: (1) costs to mortgagors; 
and (2) the financial soundness of the program. Not later than 
the expiration of the 12-month period beginning on the date of 
the enactment of this Act, the Secretary shall submit a report 
to the Congress setting forth the results and conclusions of 
the study.
  (f) Purchase Authority of Fannie Mae and Freddie Mac.--
          (1) Fannie mae.--Section 302(b) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1717(b)) is amended by adding at the end the following:
  ``(7) The corporation is authorized to purchase, service, 
sell, lend on the security of, and otherwise deal in any 
mortgage insured under section 255 of the National Housing Act 
(12 U.S.C. 1715z-20), notwithstanding the limitations under 
paragraph (2) on the maximum original principal obligations of 
mortgages.''.
          (2) Freddie mac.--Section 305(a) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1454(a)) is 
        amended by adding at the end the following:
  ``(6) The Corporation is authorized to purchase, service, 
sell, lend on the security of, and otherwise deal in any 
mortgage insured under section 255 of the National Housing Act 
(12 U.S.C. 1715z-20), notwithstanding the limitations under 
paragraph (2) on the maximum original principal obligations of 
mortgages.''.

SEC. 220. STUDY ON PARTICIPATION OF MORTGAGE BROKERS AND CORRESPONDENT 
                    LENDERS.

  (a) Study.--The Comptroller General of the United States 
shall conduct a study, which shall be completed not later than 
the expiration of the 12-month period beginning on the date of 
the enactment of this Act, which shall analyze and determine--
          (1) the extent to which the financial audit and net 
        worth requirements impede participation by mortgage 
        brokers and correspondent lenders in the mortgage 
        insurance programs under the National Housing Act, as 
        measured by the number and value of such insured 
        mortgages, disaggregated by the States in which the 
        properties subject to such mortgages are located;
          (2) the extent and effectiveness of the financial 
        audit and net worth requirements in protecting the 
        Mutual Mortgage Insurance Fund;
          (3) the extent and effectiveness of the supervision 
        and quality control enforcement, by the Secretary, of 
        mortgagees in the FHA program, separate from the 
        financial audit and net worth requirements for 
        participation, in protecting the Mutual Mortgage 
        Insurance Fund;
          (4) the extent to which allowing a mortgage broker to 
        secure a surety bond in lieu of the financial audit and 
        net worth requirements would increase participation by 
        mortgage brokers and correspondent lenders in the 
        mortgage insurance programs under the National Housing 
        Act;
          (5) the extent to which allowing a mortgage broker to 
        secure a surety bond in lieu of the financial audit and 
        net worth requirements would protect the Mutual 
        Mortgage Insurance Fund; and
          (6) the potential impact of such changes on the costs 
        incurred by the Secretary of Housing and Urban 
        Development in administering the mortgage insurance 
        programs under such Act.
  (b) GAO Report.--Not later than the expiration of the 12-
month period beginning on the date of the enactment of this 
Act, the Comptroller General shall submit a report to the 
Congress and the Secretary of Housing and Urban Development 
setting forth the results and conclusions of the study 
conducted pursuant to subsection (a).
  (c) HUD Report.--Not later than the expiration of the 18-
month period beginning upon the date of the enactment of this 
Act, the Secretary of Housing and Urban Development may submit 
a report to the Congress making recommendations regarding any 
changes in requirements for participation of mortgage brokers 
and correspondent lenders in the mortgage insurance programs 
under the National Housing Act arising from a review of the 
study conducted pursuant to subsection (a).

SEC. 221. CONFORMING LOAN LIMIT IN DISASTER AREAS.

  Section 203(h) of the National Housing Act (12 U.S.C. 1709) 
is amended--
          (1) by inserting after ``property'' the following: 
        ``plus any initial service charges, appraisal, 
        inspection and other fees in connection with the 
        mortgage as approved by the Secretary,'';
          (2) by striking the second sentence (as added by 
        chapter 7 of the Emergency Supplemental Appropriations 
        Act of 1994 (Public Law 103-211; 108 Stat. 12)); and
          (3) by adding at the end the following new sentence: 
        ``In any case in which the single family residence to 
        be insured under this subsection is within a 
        jurisdiction in which the President has declared a 
        major disaster to have occurred, the Secretary is 
        authorized, for a temporary period not to exceed 36 
        months from the date of such Presidential declaration, 
        to enter into agreements to insure a mortgage which 
        involves a principal obligation of up to 100 percent of 
        the dollar limitation determined under section 
        305(a)(2) of the Federal Home Loan Mortgage Corporation 
        Act for a single family residence, and not in excess of 
        100 percent of the appraised value of the property plus 
        any initial service charges, appraisal, inspection and 
        other fees in connection with the mortgage as approved 
        by the Secretary.''.

SEC. 222. FAILURE TO PAY AMOUNTS FROM ESCROW ACCOUNTS FOR SINGLE FAMILY 
                    MORTGAGES.

  (a) Penalties.--Section 536 of the National Housing Act (12 
U.S.C. 1735f-14) is amended--
          (1) in subsection (a)(1), by inserting ``servicers 
        (including escrow account servicers),'' after 
        ``appraisers,'';
          (2) in subsection (b)(1)--
                  (A) in the matter preceding subparagraph (A), 
                by inserting ``or other participant referred to 
                in subsection (a),'' after ``lender,''; and
                  (B) by inserting at the end the following new 
                subparagraphs:
                  ``(K) In the case of a mortgage for a 1- to 
                4-family residence insured under title II that 
                requires the mortgagor to make payments to the 
                mortgagee or other servicer of the mortgage for 
                deposit into an escrow account for the purpose 
                of assuring payment of taxes, insurance 
                premiums, and other charges with respect to the 
                property, failure on the part of the servicer 
                to make any such payment from the escrow 
                account by the deadline to avoid a penalty with 
                respect to such payment provided for in the 
                mortgage, unless the servicer was not provided 
                notice of such deadline.
                  ``(L) In the case of any failure to make any 
                payment as described in subparagraph (K), 
                submitting any information to a consumer 
                reporting agency (as such term is defined in 
                section 603(f) of the Fair Credit Reporting Act 
                (15 U.S.C. 1681a(f))) regarding such failure 
                that is adverse to the credit rating or 
                interest of the mortgagor.''; and
          (3) in subsection (c)(3), by adding at the end the 
        following: ``In the case of any failure to make a 
        payment described in subsection (b)(1)(K) for which the 
        servicer fails to reimburse the mortgagor (A) before 
        the expiration of the 60-day period beginning on the 
        deadline to avoid a penalty with respect to such 
        payment, in the sum of the amount not paid from the 
        escrow account by such deadline and the amount of any 
        penalties accruing to the mortgagor that are 
        attributable to such failure, or (B) in the amount of 
        any attorneys fees incurred by the mortgagor and 
        attributable to such failure, the Secretary shall 
        increase the amount of the penalty under subsection (a) 
        for any such failure to reimburse, unless the Secretary 
        determines there are mitigating circumstances.''.
  (b) Prohibition on Submission of Information by HUD.--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. PROHIBITION REGARDING FAILURE ON PART OF SERVICER TO MAKE 
                    ESCROW PAYMENTS.

  ``In the case of any failure to make any payment as described 
in section 536(b)(1)(K), the Secretary may not submit any 
information to a consumer reporting agency (as such term is 
defined in section 603(f) of the Fair Credit Reporting Act (15 
U.S.C. 1681a(f))) regarding such failure that is adverse to the 
credit rating or interest of the mortgagor.''.

SEC. 223. ACCEPTABLE IDENTIFICATION FOR FHA MORTGAGORS.

  (a) In General.--Title II of the National Housing Act is 
amended by inserting after section 209 (12 U.S.C. 1715) the 
following new section:

``SEC. 210. FORMS OF ACCEPTABLE IDENTIFICATION.

  ``The Secretary may not insure a mortgage under any provision 
of this title unless the mortgagor under the mortgage provides 
personal identification in one of the following forms:
          ``(1) A valid social security number verified in 
        accordance with paragraph 3-1 C of chapter 3 of HUD 
        Handbook 4155.1 REV-5.
          ``(2) A driver's license or identification card 
        issued by a State in the case of a State that is in 
        compliance with title II of the REAL ID Act of 2005 
        (title II of division B of Public Law 109-13; 49 U.S.C. 
        30301 note).
          ``(3) A passport issued by the United States or a 
        foreign government.
          ``(4) A photo identification card issued by the 
        Secretary of Homeland Security (acting through the 
        Director of the United States Citizenship and 
        Immigration Services).''.
  (b) Effective Date.--The requirements of section 210 of the 
National Housing Act (as added by subsection (a) of this 
section) shall take effect 6 months after the date of the 
enactment of this Act.

SEC. 224. 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.), as amended by the preceding provisions of 
this subtitle, is further amended by adding at the end the 
following new section:

``SEC. 258. 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--
          ``(1) to first-time homebuyers; or
          ``(2) metropolitan statistical areas significantly 
        impacted by subprime lending.
  ``(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 Expanding 
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 4-year 
period beginning on the date that the Secretary of Housing and 
Urban Development first insures any mortgage pursuant to the 
automated process established under pilot program under section 
258 of the National Housing Act (as added by the amendment made 
by subsection (a) of this section), the Comptroller General of 
the United States shall submit to the Congress a report 
identifying the number of additional mortgagors served using 
such automated process 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. 225. SENSE OF CONGRESS REGARDING TECHNOLOGY FOR FINANCIAL SYSTEMS.

  (a) Congressional Findings.--The Congress finds the 
following:
          (1) The Government Accountability Office has cited 
        the FHA single family housing mortgage insurance 
        program as a ``high-risk'' program, with a primary 
        reason being non-integrated and out-dated financial 
        management systems.
          (2) The ``Audit of the Federal Housing 
        Administration's Financial Statements for Fiscal--Years 
        2004 and 2003'', conducted by the Inspector General of 
        the Department of Housing and Urban Development 
        reported as a material weakness that ``HUD/FHA's 
        automated data processing [ADP] system environment must 
        be enhanced to more effectively support FHA's business 
        and budget processes''.
          (3) Existing technology systems for the FHA program 
        have not been updated to meet the latest standards of 
        the Mortgage Industry Standards Maintenance 
        Organization and have numerous deficiencies that 
        lenders have outlined.
          (4) Improvements to technology used in the FHA 
        program will--
                  (A) allow the FHA program to improve the 
                management of the FHA portfolio, garner greater 
                efficiencies in its operations, and lower costs 
                across the program;
                  (B) result in efficiencies and lower costs 
                for lenders participating in the program, 
                allowing them to better use the FHA products in 
                extending homeownership opportunities to higher 
                credit risk or lower-income families, in a 
                sound manner.
          (5) The Mutual Mortgage Insurance Fund operates 
        without cost to the taxpayers and generates revenues 
        for the Federal Government.
  (b) Sense of Congress.--It is the sense of the Congress 
that--
          (1) the Secretary of Housing and Urban Development 
        should use a portion of the funds received from 
        premiums paid for FHA single family housing mortgage 
        insurance that are in excess of the amounts paid out in 
        claims to substantially increase the funding for 
        technology used in such FHA program;
          (2) the goal of this investment should be to bring 
        the technology used in such FHA program to the level 
        and sophistication of the technology used in the 
        conventional mortgage lending market, or to exceed such 
        level; and
          (3) the Secretary of Housing and Urban Development 
        should report to the Congress not later than 180 days 
        after the date of the enactment of this Act regarding 
        the progress the Department is making toward such goal 
        and if progress is not sufficient, the resources needed 
        to make greater progress.

SEC. 226. 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. 227. VALUATION OF MULTIFAMILY PROPERTIES IN NONCOMPETITIVE SALES 
                    BY HUD TO STATES AND LOCALITIES.

  Subtitle A of title II of the Deficit Reduction Act of 2005 
(Public Law 109-171; 120 Stat. 7) is amended by adding at the 
end the following new section:

``SEC. 2004. VALUATION OF MULTIFAMILY PROPERTIES IN NONCOMPETITIVE 
                    SALES BY HUD TO STATES AND LOCALITIES.

  `` `Notwithstanding any other provision of law, in 
determining the market value of any multifamily real property 
or multifamily loan for any noncompetitive sale to a State or 
local government entity occurring during fiscal year 2008, the 
Secretary shall consider, but not be limited to, industry 
standard appraisal practices, including the cost of repairs 
needed to bring the property at least to minimum State and 
local code standards and of maintaining the existing 
affordability restrictions imposed by the Secretary on the 
multifamily real property or multifamily loan.'.''.

SEC. 228. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

  Notwithstanding any other provision of law, including any 
provision of this subtitle and any amendment made by this 
subtitle--
          (1) the premiums charged for mortgage insurance under 
        any program 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 by rule making in accordance with the 
        procedures under section 553 of title 5, United States 
        Code (notwithstanding subsections (a)(2), (b)(B), and 
        (d)(3) of such section).

SEC. 229. CIVIL MONEY PENALTIES FOR IMPROPERLY INFLUENCING APPRAISALS.

  Paragraph (2) of section 536(b) of the National Housing Act 
(12 U.S.C. 1735f-14(b)(2)) is amended--
          (1) in subparagraph (B), by striking ``or'' at the 
        end;
          (2) in subparagraph (C), by striking the period at 
        the end and inserting ``; or''; and
          (3) by adding at the end the following new 
        subparagraph:
                  ``(D) in the case of an insured mortgage 
                under title II for a 1- to 4-family residence, 
                compensating, instructing, inducing, coercing, 
                or intimidating any person who conducts an 
                appraisal of the property in connection with 
                such mortgage, or attempting to compensate, 
                instruct, induce, coerce, or intimidate such a 
                person, for the purpose of causing the 
                appraised value assigned to the property under 
                the appraisal to be based on any other factor 
                other than the independent judgment of such 
                person exercised in accordance with applicable 
                professional standards.''.

SEC. 230. MORTGAGE INSURANCE PREMIUM REFUNDS.

  (a) Authority.--The Secretary of Housing and Urban 
Development shall, to the extent that amounts are made 
available pursuant to subsection (c), provide refunds of 
unearned premium charges paid, at the time of insurance, for 
mortgage insurance under title II of the National Housing Act 
(12 U.S.C. 1707 et seq.) to or on behalf of mortgagors under 
mortgages described in subsection (b).
  (b) Eligible Mortgages.--A mortgage described in this section 
is a mortgage on a one- to four-family dwelling that--
          (1) was insured under title II of the National 
        Housing Act (12 U.S.C. 1707 et seq.);
          (2) is otherwise eligible, under the last sentence of 
        subparagraph (A) of section 203(c)(2) of such Act (12 
        U.S.C. 1709(c)(2)(A)), for a refund of all unearned 
        premium charges paid on the mortgage pursuant to such 
        subparagraph, except that the mortgage--
                  (A) was closed before December 8, 2004; and
                  (B) was endorsed on or after such date.
  (c) Authorization of Appropriations.--There is authorized to 
be appropriated for each fiscal year such sums as may be 
necessary to provide refunds of unearned mortgage insurance 
premiums pursuant to this section.

SEC. 231. SAVINGS PROVISION.

  Any mortgage insured under title II of the National Housing 
Act before the date of enactment of this Act 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 Act.

SEC. 232. IMPLEMENTATION.

  Except as provided in section 223(b), 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.

   Subtitle B--FHA Manufactured Housing Loan Insurance Modernization

SECTION 251. SHORT TITLE.

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

SEC. 252. FINDINGS AND PURPOSES.

  (a) Findings.--The Congress finds that--
          (1) manufactured housing plays a vital role in 
        providing housing for low- and moderate-income families 
        in the United States;
          (2) the FHA title I insurance program for 
        manufactured home loans traditionally has been a major 
        provider of mortgage insurance for home-only 
        transactions;
          (3) the manufactured housing market is in the midst 
        of a prolonged downturn which has resulted in a severe 
        contraction of traditional sources of private lending 
        for manufactured home purchases;
          (4) during past downturns the FHA title I insurance 
        program for manufactured homes has filled the lending 
        void by providing stability until the private markets 
        could recover;
          (5) in 1992, during the manufactured housing 
        industry's last major recession, over 30,000 
        manufactured home loans were insured under title I;
          (6) in 2006, fewer than 1,500 manufactured housing 
        loans were insured under title I;
          (7) the loan limits for title I manufactured housing 
        loans have not been adjusted for inflation since 1992; 
        and
          (8) these problems with the title I program have 
        resulted in an atrophied market for manufactured 
        housing loans, leaving American families who have the 
        most difficulty achieving homeownership without 
        adequate financing options for home-only manufactured 
        home purchases.
  (b) 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. 253. 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. 254. 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 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 Act.

SEC. 255. 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 subtitle, 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 one 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. 256. 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. 257. 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. 258. 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 subtitle, 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 Act, 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. 259. REQUIREMENT OF SOCIAL SECURITY ACCOUNT NUMBER FOR ASSISTANCE.

  Section 2 of the National Housing Act (12 U.S.C. 1703) is 
amended by adding at the end the following new subsection:
  ``(j) Requirement of Social Security Account Number for 
Financing.--No insurance shall be granted under this section 
with respect to any obligation representing any loan, advance 
of credit, or purchase by a financial institution unless the 
borrower to which the loan or advance of credit was made has a 
valid social security number.''.

SEC. 260. GAO STUDY OF MITIGATION OF TORNADO RISKS TO MANUFACTURED 
                    HOMES.

  The Comptroller General of the United States shall assess how 
the Secretary of Housing and Urban Development utilizes the FHA 
manufactured housing loan insurance program under title I of 
the National Housing Act, the community development block grant 
program under title I of the Housing and Community Development 
Act of 1974, and other programs and resources available to the 
Secretary to mitigate the risks to manufactured housing 
residents and communities resulting from tornados. The 
Comptroller General shall submit to the Congress a report on 
the conclusions and recommendations of the assessment conducted 
pursuant to this section not later than the expiration of the 
12-month period beginning on the date of the enactment of this 
Act.

 TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE

SEC. 301. SHORT TITLE.

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

SEC. 302. DEFINITIONS.

  Section 1303 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4502) is amended--
          (1) in paragraph (7), by striking ``an enterprise'' 
        and inserting ``a regulated entity'';
          (2) by striking ``the enterprise'' each place such 
        term appears (except in paragraphs (4) and (18)) and 
        inserting ``the regulated entity'';
          (3) in paragraph (5), by striking ``Office of Federal 
        Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' and inserting ``Federal 
        Housing Finance Agency'';
          (4) in each of paragraphs (8), (9), (10), and (19), 
        by striking ``Secretary'' each place that term appears 
        and inserting ``Director'';
          (5) in paragraph (13), by inserting ``, with respect 
        to an enterprise,'' after ``means'';
          (6) by redesignating paragraphs (16) through (19) as 
        paragraphs (20) through (23), respectively;
          (7) by striking paragraphs (14) and (15) and 
        inserting the following new paragraphs:
          ``(18) 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) each Federal home loan bank.
          ``(19) Regulated entity-affiliated party.--The term 
        `regulated entity-affiliated party' means--
                  ``(A) any director, officer, employee, or 
                agent for, a regulated entity, or controlling 
                shareholder of an enterprise;
                  ``(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, except that a 
                shareholder of a regulated entity shall not be 
                considered to have participated in the affairs 
                of that regulated entity solely by reason of 
                being a member or customer of the regulated 
                entity;
                  ``(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
                  ``(D) any not-for-profit corporation that 
                receives its principal funding, on an ongoing 
                basis, from any regulated entity.''.
          (8) by redesignating paragraphs (8) through (13) as 
        paragraphs (12) through (17), respectively; and
          (9) by inserting after paragraph (7) the following 
        new paragraph:
          ``(11) Federal home loan bank.--The term `Federal 
        home loan bank' means a bank established under the 
        authority of the Federal Home Loan Bank Act.'';
          (10) by redesignating paragraphs (2) through (7) as 
        paragraphs (5) through (10), respectively; and
          (11) by inserting after paragraph (1) the following 
        new paragraphs:
          ``(2) Agency.--The term `Agency' means the Federal 
        Housing Finance Agency.
          ``(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 Enterprise Board established under section 
        1313B.''.

 Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan 
                                 Banks

             CHAPTER 1--IMPROVEMENT OF SAFETY AND SOUNDNESS


SEC. 311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

  (a) In General.--The Housing and Community Development 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, and 
        federal home loan banks.--The Director of the Federal 
        Housing Finance Agency shall have general supervisory 
        and regulatory authority over each regulated entity and 
        shall exercise such general regulatory and supervisory 
        authority, including such duties and authorities set 
        forth under section 1313 of this Act, to ensure that 
        the purposes of this Act, the authorizing statutes, and 
        any other applicable law are carried out. The Director 
        shall have the same supervisory and regulatory 
        authority over any joint office of the Federal home 
        loan banks, including the Office of Finance of the 
        Federal Home Loan Banks, as the Director has over the 
        individual Federal home loan banks.
  ``(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.

``SEC. 1312. DIRECTOR.

  ``(a) Establishment of Position.--There is established the 
position of the Director of the Federal Housing Finance 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 and removal.--The Director shall be 
        appointed for a term of 5 years and may be removed by 
        the President only for cause.
          ``(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), the Director of the Office of 
        Federal Housing Enterprise Oversight of the Department 
        of Housing and Urban Development shall serve as the 
        Director until a successor has been appointed under 
        paragraph (1).
  ``(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 appointed by the Director from among 
        individuals who are citizens of the United States, and 
        have a demonstrated understanding of financial 
        management or oversight and 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 appointed by the Director from 
        among individuals who are citizens of the United 
        States, have a demonstrated understanding of financial 
        management or oversight and 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.--
          ``(1) In general.--The Agency shall have a Deputy 
        Director for Housing, who shall be appointed 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 and of 
        community and economic development.
          ``(2) Functions.--The Deputy Director for Housing 
        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.
  ``(f) Limitations.--The Director and each of the Deputy 
Directors may not--
          ``(1) have any direct or indirect financial interest 
        in any regulated entity or regulated entity-affiliated 
        party;
          ``(2) hold any office, position, or employment in any 
        regulated entity or regulated entity-affiliated party; 
        or
          ``(3) have served as an executive officer or director 
        of any regulated entity, or regulated entity-affiliated 
        party, at any time during the 3-year period ending on 
        the date of appointment of such individual as Director 
        or Deputy Director.
  ``(g) Ombudsman.--The Director shall establish the position 
of the Ombudsman in the Agency. The Director 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.''.
  (b) Appointment of Director.--Notwithstanding any other 
provision of law or of this title, the President may, any time 
after the date of the enactment of this Act, appoint an 
individual to serve as the Director of the Federal Housing 
Finance Agency, as such office is established by the amendment 
made by subsection (a). This subsection shall take effect on 
the date of the enactment of this Act.

SEC. 312. DUTIES AND AUTHORITIES OF DIRECTOR.

  (a) In General.--The Housing and Community Development Act of 
1992 (12 U.S.C. 4513) is amended by striking section 1313 and 
inserting the following new sections:

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

  ``(a) Duties.--
          ``(1) Principal duties.--The principal duties of the 
        Director shall be--
                  ``(A) to oversee the operations of each 
                regulated entity and any joint office of the 
                Federal Home Loan Banks; 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 that 
                        minimize the cost of housing finance 
                        (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; and
                          ``(iv) each regulated entity carries 
                        out its statutory mission only through 
                        activities that are consistent with 
                        this title and the authorizing 
                        statutes.
          ``(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 an enterprise; 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 or employees of the Agency, including each of the 
Deputy Directors, 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, or request that the Attorney 
        General of the United States act on behalf of the 
        Director.
          ``(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.
          ``(3) 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 or director or officer thereof 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.

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

  ``(a) Standards.--The Director shall establish standards, by 
regulation, guideline, or order, for each regulated entity 
relating to--
          ``(1) adequacy of internal controls and information 
        systems, including information security and privacy 
        policies and practices, taking into account the nature 
        and scale of business operations;
          ``(2) independence and adequacy of internal audit 
        systems;
          ``(3) 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;
          ``(4) management of interest rate risk exposure;
          ``(5) 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;
          ``(6) adequacy and maintenance of liquidity and 
        reserves;
          ``(7) management of any asset and investment 
        portfolio;
          ``(8) investments and acquisitions by a regulated 
        entity, to ensure that they are consistent with the 
        purposes of this Act and the authorizing statutes;
          ``(9) 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;
          ``(10) issuance of subordinated debt by that 
        particular regulated entity, as the Director considers 
        necessary;
          ``(11) 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; and
          ``(12) 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.''.
  (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. 313. FEDERAL HOUSING ENTERPRISE BOARD.

  (a) In General.--Title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
inserting after section 1313A, as added by the preceding 
provisions of this title, the following new section:

``SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD.

  ``(a) In General.--There is established the Federal Housing 
Enterprise 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 3 
members, of whom--
          ``(1) one member shall be the Secretary of the 
        Treasury;
          ``(2) one member shall be the Secretary of Housing 
        and Urban Development; and
          ``(3) one 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 or the Secretary of Housing and Urban 
        Development 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 
Housing and Community Development Act of 1992 (12 U.S.C. 4521 
(a)) is amended--
          (1) in paragraph (3), by striking ``and'' at the end; 
        and
          (2) by striking paragraph (4) and inserting the 
        following new paragraphs:
          ``(4) an 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 
                missions;
          ``(5) operations, resources, and performance of the 
        Agency;
          ``(6) a description of the demographic makeup of the 
        workforce of the Agency and the actions taken pursuant 
        to section 1319A(b) to provide for diversity in the 
        workforce; and
          ``(7) such other matters relating to the Agency and 
        its fulfillment of its mission.''.

SEC. 314. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.

  Section 1314 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4514) is amended--
          (1) in the section heading, by striking 
        ``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
          (2) in subsection (a)--
                  (A) in the subsection heading, by striking 
                ``Special Reports and Reports of Financial 
                Condition'' and inserting ``Regular and Special 
                Reports'';
                  (B) in paragraph (1)--
                          (i) in the paragraph heading, by 
                        striking ``Financial condition'' and 
                        inserting ``Regular reports''; and
                          (ii) by striking ``reports of 
                        financial condition and operations'' 
                        and inserting ``regular reports on the 
                        condition (including financial 
                        condition), management, activities, or 
                        operations of the regulated entity, as 
                        the Director considers appropriate''; 
                        and
                  (C) in paragraph (2), after ``submit special 
                reports'' insert ``on any of the topics 
                specified in paragraph (1) or such other 
                topics''; and
          (3) by adding at the end the following new 
        subsection:
  ``(c) Reports of Fraudulent Financial Transactions.--
          ``(1) 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 a purchase or sale of any loan or financial 
        instrument. The Director shall require the regulated 
        entities to establish and maintain procedures designed 
        to discover any such transactions.
          ``(2) Protection from liability for reports.--
                  ``(A) In general.--If a regulated entity 
                makes a report pursuant to paragraph (1), or a 
                regulated entity-affiliated party makes, or 
                requires another to make, such a report, and 
                such report is made in a good faith effort to 
                comply with the requirements of paragraph (1), 
                such regulated entity or regulated entity-
                affiliated party shall not be liable to any 
                person under any law or regulation of the 
                United States, 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 person identified in 
                the report.
                  ``(B) Rule of construction.--Subparagraph (A) 
                shall not be construed as creating--
                          ``(i) any inference that the term 
                        `person', as used in such subparagraph, 
                        may be construed more broadly than its 
                        ordinary usage so as to include any 
                        government or agency of government; or
                          ``(ii) any immunity against, or 
                        otherwise affecting, any civil or 
                        criminal action brought by any 
                        government or agency of government to 
                        enforce any constitution, law, or 
                        regulation of such government or 
                        agency.''.

SEC. 315. DISCLOSURE OF INCOME AND CHARITABLE CONTRIBUTIONS BY 
                    ENTERPRISES.

  Section 1314 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4514), as amended by the preceding provisions 
of this title, is further amended by adding at the end the 
following new subsections:
  ``(d) Disclosure of Charitable Contributions by 
Enterprises.--
          ``(1) Required disclosure.--The Director shall, by 
        regulation, require each enterprise to submit a report 
        annually, in a format designated by the Director, 
        containing the following information:
                  ``(A) Total value.--The total value of 
                contributions made by the enterprise to 
                nonprofit organizations during its previous 
                fiscal year.
                  ``(B) Substantial contributions.--If the 
                value of contributions made by the enterprise 
                to any nonprofit organization during its 
                previous fiscal year exceeds the designated 
                amount, the name of that organization and the 
                value of contributions.
                  ``(C) Substantial contributions to insider-
                affiliated charities.--Identification of each 
                contribution whose value exceeds the designated 
                amount that were made by the enterprise during 
                the enterprise's previous fiscal year to any 
                nonprofit organization of which a director, 
                officer, or controlling person of the 
                enterprise, or a spouse thereof, was a director 
                or trustee, the name of such nonprofit 
                organization, and the value of the 
                contribution.
          ``(2) Definitions.--For purposes of this subsection--
                  ``(A) the term `designated amount' means such 
                amount as may be designated by the Director by 
                regulation, consistent with the public interest 
                and the protection of investors for purposes of 
                this subsection; and
                  ``(B) the Director may, by such regulations 
                as the Director deems necessary or appropriate 
                in the public interest, define the terms 
                officer and controlling person.
          ``(3) Public availability.--The Director shall make 
        the information submitted pursuant to this subsection 
        publicly available.
  ``(e) Disclosure of Income.--Each enterprise shall include, 
in each annual report filed under section 13 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m), the income reported by 
the issuer to the Internal Revenue Service for the most recent 
taxable year. Such income shall--
          ``(1) be presented in a prominent location in each 
        such report and in a manner that permits a ready 
        comparison of such income to income otherwise required 
        to be included in such reports under regulations issued 
        under such section; and
          ``(2) be submitted to the Securities and Exchange 
        Commission in a form and manner suitable for entry into 
        the EDGAR system of such Commission for public 
        availability under such system.''.

SEC. 316. ASSESSMENTS.

  Section 1316 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4516) is amended--
          (1) by striking subsection (a) and inserting the 
        following new subsection:
  ``(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 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 wind up of the affairs of the Office of 
        Federal Housing Enterprise Oversight and the Federal 
        Housing Finance Board under subtitle C of the Federal 
        Housing Finance Reform Act of 2008.'';
          (2) in subsection (b)--
                  (A) in the subsection heading, by striking 
                ``Enterprises'' and inserting ``Regulated 
                Entities'' ;
                  (B) by realigning paragraph (2) two ems from 
                the left margin, so as to align the left margin 
                of such paragraph with the left margins of 
                paragraph (1);
                  (C) in paragraph (1)--
                          (i) by striking ``Each enterprise'' 
                        and inserting ``Each regulated 
                        entity'';
                          (ii) by striking ``each enterprise'' 
                        and inserting ``each regulated 
                        entity''; and
                          (iii) by striking ``both 
                        enterprises'' and inserting ``all of 
                        the regulated entities''; and
                  (D) in paragraph (3)--
                          (i) in subparagraph (B), by striking 
                        ``subparagraph (A)'' and inserting 
                        ``clause (i)'';
                          (ii) by redesignating subparagraphs 
                        (A), (B), and (C) as clauses (i), (ii) 
                        and (ii), respectively, and realigning 
                        such clauses, as so redesignated, so as 
                        to be indented 6 ems from the left 
                        margin;
                          (iii) by striking the matter that 
                        precedes clause (i), as so 
                        redesignated, and inserting the 
                        following:
          ``(3) Definition of total assets.--For purposes of 
        this section, the term `total assets' means as follows:
                  ``(A) Enterprises.--With respect to an 
                enterprise, the sum of--''; and
                          (iv) by adding at the end the 
                        following new subparagraph:
                  ``(B) Federal home loan banks.--With respect 
                to a Federal home loan bank, the total assets 
                of the Bank, as determined by the Director in 
                accordance with generally accepted accounting 
                principles.'';
          (3) by striking subsection (c) and inserting the 
        following new subsection:
  ``(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 new subsections:
  ``(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 (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 under section 365 of the 
        Federal Housing Finance 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 amount 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 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 assets and liabilities and 
        surplus or deficit; a statement of income and expenses; 
        and a statement of sources and application of funds.
          ``(3) Financial management systems.--The Agency shall 
        implement and maintain financial management systems 
        that comply substantially with Federal financial 
        management systems requirements, applicable Federal 
        accounting standards, and that uses 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 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 reports, plans, 
        forecasts, 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 U.S. 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 5 of title 41, United States Code, 
        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. 317. EXAMINERS AND ACCOUNTANTS.

  (a) Examinations.--Section 1317 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4517) is amended--
          (1) in subsection (a), by adding after the period at 
        the end the following: ``Each examination under this 
        subsection of a regulated entity shall include a review 
        of the procedures required to be established and 
        maintained by the regulated entity pursuant to section 
        1314(c) (relating to fraudulent financial transactions) 
        and the report regarding each such examination shall 
        describe any problems with such procedures maintained 
        by the 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''; and
          (3) in subsection (c)--
                  (A) in the second sentence, by inserting ``to 
                conduct examinations under this section'' 
                before the period; and
                  (B) in the third sentence, by striking ``from 
                amounts available in the Federal Housing 
                Enterprises Oversight Fund''.
  (b) Enhanced Authority To Hire Examiners and Accountants.--
Section 1317 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4517) is amended by adding at the end the 
following new subsection:
  ``(g) Appointment of Accountants, Economists, Specialists, 
and Examiners.--
          ``(1) Applicability.--This section applies with 
        respect to any position of examiner, accountant, 
        specialist in financial markets, specialist in 
        information technology, and economist 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.
          ``(3) Rule of construction.--The appointment of a 
        candidate to a position under the authority of this 
        subsection shall not be considered to cause such 
        position to be converted from the competitive service 
        to the excepted service.''.
  (c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12 
U.S.C. 1440) is amended--
          (1) by striking the section heading and inserting the 
        following: ``examinations and gao audits'';
          (2) in the third sentence, by striking ``the Board 
        and'' each place such term appears; and
          (3) by striking the first two sentences and inserting 
        the following: ``The Federal home loan banks shall be 
        subject to examinations by the Director to the extent 
        provided in section 1317 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 
        (12 U.S.C. 4517).''.

SEC. 318. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

  (a) In General.--Section 1318 of the Housing and Community 
Development 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) by redesignating subsection (b) as subsection 
        (d); and
          (3) by inserting after subsection (a) the following 
        new subsections:
  ``(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. 319. REVIEWS OF REGULATED ENTITIES.

  Section 1319 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4519) is amended--
          (1) by striking the section designation and heading 
        and inserting the following:

``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';

        and
          (2) by striking ``is a nationally recognized'' and 
        all that follows through ``1934'' and inserting the 
        following: ``the Director considers appropriate, 
        including an entity that is registered under section 15 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78a) 
        as a nationally registered statistical rating 
        organization''.

SEC. 320. 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. 321. REGULATIONS AND ORDERS.

  Section 1319G of the Housing and Community Development Act of 
1992 (12 U.S.C. 4526) is amended--
          (1) by striking subsection (a) and inserting the 
        following new subsection:
  ``(a) Authority.--The Director shall issue any regulations, 
guidelines, and orders necessary to carry out the duties of the 
Director under this title and each of the authorizing statutes 
to ensure that the purposes of this title and such statutes are 
accomplished.'';
          (2) in subsection (b), by inserting ``, this title, 
        or any of the authorizing statutes'' after ``under this 
        section''; and
          (3) by striking subsection (c).

SEC. 322. NON-WAIVER OF PRIVILEGES.

  Part 1 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4511) is amended 
by adding at the end the following new section:

``SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE.

  ``(a) In General.--The submission by any person of any 
information to the Agency for any purpose in the course of any 
supervisory or regulatory process of the Agency shall not be 
construed as waiving, destroying, or otherwise affecting any 
privilege such person may claim with respect to such 
information under Federal or State law as to any person or 
entity other than the Agency.
  ``(b) Rule of Construction.--No provision of subsection (a) 
may be construed as implying or establishing that--
          ``(1) any person waives any privilege applicable to 
        information that is submitted or transferred under any 
        circumstance to which subsection (a) does not apply; or
          ``(2) any person would waive any privilege applicable 
        to any information by submitting the information to the 
        Agency, but for this subsection.''.

SEC. 323. RISK-BASED CAPITAL REQUIREMENTS.

  (a) In General.--Section 1361 of the Housing and Community 
Development 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) Confidentiality of Information.--Any person that 
receives any book, record, or information from the Director or 
a regulated entity to enable the risk-based capital 
requirements established under this section to be applied 
shall--
          ``(1) maintain the confidentiality of the book, 
        record, or information in a manner that is generally 
        consistent with the level of confidentiality 
        established for the material by the Director or the 
        regulated entity; and
          ``(2) be exempt from section 552 of title 5, United 
        States Code, with respect to the book, record, or 
        information.
  ``(c) 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 new subparagraph:
                  ``(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. 324. MINIMUM AND CRITICAL CAPITAL LEVELS.

  (a) Minimum Capital Level.--Section 1362 of the Housing and 
Community Development 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 new subsections:
  ``(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.--
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 for such period as the Director may 
provide if the Director--
          ``(1) makes any determination specified in 
        subparagraphs (A) through (C) of section 1364(c)(1);
          ``(2) determines that the regulated entity has 
        violated any of the prudential standards established 
        pursuant to section 1313A and, as a result of such 
        violation, determines that an unsafe and unsound 
        condition exists; or
          ``(3) determines that an unsafe and unsound condition 
        exists, except that a temporary increase in minimum 
        capital imposed on a regulated entity pursuant to this 
        paragraph shall not remain in place for a period of 
        more than 6 months unless the Director makes a renewed 
        determination of the existence of an unsafe and unsound 
        condition.
  ``(e) Authority To Establish Additional Capital and Reserve 
Requirements for Particular Programs.--The Director may, at any 
time by order or regulation, establish such capital or reserve 
requirements with respect to any program 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. The Director shall 
rescind any temporary minimum capital level increase if the 
Director determines that the circumstances or facts justifying 
the temporary increase are no longer present.''.
  (b) Critical Capital Levels.--
          (1) In general.--Section 1363 of the Housing and 
        Community Development Act of 1992 (12 U.S.C. 4613) is 
        amended--
                  (A) by striking ``For'' and inserting ``(a) 
                Enterprises.--For''; and
                  (B) 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.''.
          (2) Regulations.--Not later than the expiration of 
        the 180-day period beginning on the effective date 
        under section 365, the Director of the Federal Housing 
        Finance Agency shall issue regulations pursuant to 
        section 1363(b) of the Housing and Community 
        Development Act of 1992 (as added by paragraph (1) of 
        this subsection) establishing the critical capital 
        level under such section.

SEC. 325. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                    LIABILITIES.

  (a) In General.--Subtitle B of title XIII of the Housing and 
Community Development 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 standards by which the portfolio holdings, or rate of 
growth of the portfolio holdings, of the enterprises will be 
deemed to be consistent with the mission and the safe and sound 
operations of the enterprises. In developing such standards, 
the Director shall consider--
          ``(1) the size or growth of the mortgage market;
          ``(2) the need for the portfolio in maintaining 
        liquidity or stability of the secondary mortgage market 
        (including the market for the mortgage-backed 
        securities the enterprises issue);
          ``(3) the need for an inventory of mortgages in 
        connection with securitizations;
          ``(4) the need for the portfolio to directly support 
        the affordable housing mission of the enterprises;
          ``(5) the liquidity needs of the enterprises;
          ``(6) any potential risks posed to the enterprises by 
        the nature of the portfolio holdings; and
          ``(7) any additional factors that the Director 
        determines to be necessary to carry out the purpose 
        under the first sentence of this subsection to 
        establish standards for assessing whether the portfolio 
        holdings are consistent with the mission and safe and 
        sound operations of the enterprises.
  ``(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 under section 365, 
the Director of the Federal Housing Finance Agency shall issue 
regulations pursuant to section 1369E(a) of the Housing and 
Community Development Act of 1992 (as added by subsection (a) 
of this section) establishing the portfolio holdings standards 
under such section.

SEC. 326. CORPORATE GOVERNANCE OF ENTERPRISES.

  The Housing and Community Development Act of 1992 is amended 
by inserting before section 1323 (12 U.S.C. 4543) the following 
new section:

``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.

  ``(a) Board of Directors.--
          ``(1) Independence.--A majority of seated members of 
        the board of directors of each enterprise shall be 
        independent board members, as defined under rules set 
        forth by the New York Stock Exchange, as such rules may 
        be amended from time to time.
          ``(2) Frequency of meetings.--To carry out its 
        obligations and duties under applicable laws, rules, 
        regulations, and guidelines, the board of directors of 
        an enterprise shall meet at least eight times a year 
        and not less than once a calendar quarter.
          ``(3) Non-management board member meetings.--The non-
        management directors of an enterprise shall meet at 
        regularly scheduled executive sessions without 
        management participation.
          ``(4) Quorum; prohibition on proxies.--For the 
        transaction of business, a quorum of the board of 
        directors of an enterprise shall be at least a majority 
        of the seated board of directors and a board member may 
        not vote by proxy.
          ``(5) Information.--The management of an enterprise 
        shall provide a board member of the enterprise with 
        such adequate and appropriate information that a 
        reasonable board member would find important to the 
        fulfillment of his or her fiduciary duties and 
        obligations.
          ``(6) Annual review.--At least annually, the board of 
        directors of each enterprise shall review, with 
        appropriate professional assistance, the requirements 
        of laws, rules, regulations, and guidelines that are 
        applicable to its activities and duties.
  ``(b) Committees of Boards of Directors.--
          ``(1) Frequency of meetings.--Any committee of the 
        board of directors of an enterprise shall meet with 
        sufficient frequency to carry out its obligations and 
        duties under applicable laws, rules, regulations, and 
        guidelines.
          ``(2) Required committees.--Each enterprise shall 
        provide for the establishment, however styled, of the 
        following committees of the board of directors:
                  ``(A) Audit committee.
                  ``(B) Compensation committee.
                  ``(C) Nominating/corporate governance 
                committee.
        Such committees shall be in compliance with the 
        charter, independence, composition, expertise, duties, 
        responsibilities, and other requirements set forth 
        under section 10A(m) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78j-1(m)), with respect to the audit 
        committee, and under rules issued by the New York Stock 
        Exchange, as such rules may be amended from time to 
        time.
  ``(c) Compensation.--
          ``(1) In general.--The compensation of board members, 
        executive officers, and employees of an enterprise--
                  ``(A) shall not be in excess of that which is 
                reasonable and appropriate;
                  ``(B) shall be commensurate with the duties 
                and responsibilities of such persons;
                  ``(C) shall be consistent with the long-term 
                goals of the enterprise;
                  ``(D) shall not focus solely on earnings 
                performance, but shall take into account risk 
                management, operational stability and legal and 
                regulatory compliance as well; and
                  ``(E) shall be undertaken in a manner that 
                complies with applicable laws, rules, and 
                regulations.
          ``(2) Reimbursement.--If an enterprise is required to 
        prepare an accounting restatement due to the material 
        noncompliance of the enterprise, as a result of 
        misconduct, with any financial reporting requirement 
        under the securities laws, the chief executive officer 
        and chief financial officer of the enterprise shall 
        reimburse the enterprise as provided under section 304 
        of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7243). 
        This provision does not otherwise limit the authority 
        of the Agency to employ remedies available to it under 
        its enforcement authorities.
  ``(d) Code of Conduct and Ethics.--
          ``(1) In general.--An enterprise shall establish and 
        administer a written code of conduct and ethics that is 
        reasonably designed to assure the ability of board 
        members, executive officers, and employees of the 
        enterprise to discharge their duties and 
        responsibilities, on behalf of the enterprise, in an 
        objective and impartial manner, and that includes 
        standards required under section 406 of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7264) and other applicable 
        laws, rules, and regulations.
          ``(2) Review.--Not less than once every three years, 
        an enterprise shall review the adequacy of its code of 
        conduct and ethics for consistency with practices 
        appropriate to the enterprise and make any appropriate 
        revisions to such code.
  ``(e) Conduct and Responsibilities of Board of Directors.--
The board of directors of an enterprise shall be responsible 
for directing the conduct and affairs of the enterprise in 
furtherance of the safe and sound operation of the enterprise 
and shall remain reasonably informed of the condition, 
activities, and operations of the enterprise. The 
responsibilities of the board of directors shall include having 
in place adequate policies and procedures to assure its 
oversight of, among other matters, the following:
          ``(1) Corporate strategy, major plans of action, risk 
        policy, programs for legal and regulatory compliance 
        and corporate performance, including prudent plans for 
        growth and allocation of adequate resources to manage 
        operations risk.
          ``(2) Hiring and retention of qualified executive 
        officers and succession planning for such executive 
        officers.
          ``(3) Compensation programs of the enterprise.
          ``(4) Integrity of accounting and financial reporting 
        systems of the enterprise, including independent audits 
        and systems of internal control.
          ``(5) Process and adequacy of reporting, disclosures, 
        and communications to shareholders, investors, and 
        potential investors.
          ``(6) Extensions of credit to board members and 
        executive officers.
          ``(7) Responsiveness of executive officers in 
        providing accurate and timely reports to Federal 
        regulators and in addressing the supervisory concerns 
        of Federal regulators in a timely and appropriate 
        manner.
  ``(f) Prohibition of Extensions of Credit.--An enterprise may 
not directly or indirectly, including through any subsidiary, 
extend or maintain credit, arrange for the extension of credit, 
or renew an extension of credit, in the form of a personal loan 
to or for any board member or executive officer of the 
enterprise, as provided by section 13(k) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m(k)).
  ``(g) Certification of Disclosures.--The chief executive 
officer and the chief financial officer of an enterprise shall 
review each quarterly report and annual report issued by the 
enterprise and such reports shall include certifications by 
such officers as required by section 302 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7241).
  ``(h) Change of Audit Partner.--An enterprise may not accept 
audit services from an external auditing firm if the lead or 
coordinating audit partner who has primary responsibility for 
the external audit of the enterprise, or the external audit 
partner who has responsibility for reviewing the external audit 
has performed audit services for the enterprise in each of the 
five previous fiscal years.
  ``(i) Compliance Program.--
          ``(1) Requirement.--Each enterprise shall establish 
        and maintain a compliance program that is reasonably 
        designed to assure that the enterprise complies with 
        applicable laws, rules, regulations, and internal 
        controls.
          ``(2) Compliance officer.--The compliance program of 
        an enterprise shall be headed by a compliance officer, 
        however styled, who reports directly to the chief 
        executive officer of the enterprise. The compliance 
        officer shall report regularly to the board of 
        directors or an appropriate committee of the board of 
        directors on compliance with and the adequacy of 
        current compliance policies and procedures of the 
        enterprise, and shall recommend any adjustments to such 
        policies and procedures that the compliance officer 
        considers necessary and appropriate.
  ``(j) Risk Management Program.--
          ``(1) Requirement.--Each enterprise shall establish 
        and maintain a risk management program that is 
        reasonably designed to manage the risks of the 
        operations of the enterprise.
          ``(2) Risk management officer.--The risk management 
        program of an enterprise shall be headed by a risk 
        management officer, however styled, who reports 
        directly to the chief executive officer of the 
        enterprise. The risk management officer shall report 
        regularly to the board of directors or an appropriate 
        committee of the board of directors on compliance with 
        and the adequacy of current risk management policies 
        and procedures of the enterprise, and shall recommend 
        any adjustments to such policies and procedures that 
        the risk management officer considers necessary and 
        appropriate.
  ``(k) Compliance With Other Laws.--
          ``(1) Deregistered or unregistered common stock.--If 
        an enterprise deregisters or has not registered its 
        common stock with the Securities and Exchange 
        Commission under the Securities Exchange Act of 1934, 
        the enterprise shall comply or continue to comply with 
        sections 10A(m) and 13(k) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) and sections 
        302, 304, and 406 of the Sarbanes-Oxley Act of 2002 (15 
        U.S.C. 7241, 7243, 7264), subject to such requirements 
        as provided by subsection (l) of this section.
          ``(2) Registered common stock.--An enterprise that 
        has its common stock registered with the Securities and 
        Exchange Commission shall maintain such registered 
        status, unless it provides 60 days prior written notice 
        to the Director stating its intent to deregister and 
        its understanding that it will remain subject to the 
        requirements of the sections of the Securities Exchange 
        Act of 1934 and the Sarbanes-Oxley Act of 2002, subject 
        to such requirements as provided by subsection (l) of 
        this section.
  ``(l) Other Matters.--The Director may from time to time 
establish standards, by regulation, order, or guideline, 
regarding such other corporate governance matters of the 
enterprises as the Director considers appropriate.
  ``(m) Modification of Standards.--In connection with 
standards of Federal or State law (including the Revised Model 
Corporation Act) or New York Stock Exchange rules that are made 
applicable to an enterprise by section 1710.10 of the 
Director's rules (12 CFR 1710.10) and by subsections (a), (b), 
(g), (i), (j), and (k) of this section, the Director, in the 
Director's sole discretion, may modify the standards contained 
in this section or in part 1710 of the Director's rules (12 CFR 
Part 1710) in accordance with section 553 of title 5, United 
States Code, and upon written notice to the enterprise.''.

SEC. 327. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.

  The Housing and Community Development Act of 1992 is amended 
by adding after section 1322A, as added by the preceding 
provisions of this title, the following new section:

``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 
                    1934.

  ``(a) In General.--Each regulated entity shall register at 
least one class of the capital stock of such regulated entity, 
and maintain such registration with the Securities and Exchange 
Commission, under the Securities Exchange Act of 1934.
  ``(b) Enterprises.--Each enterprise shall comply with 
sections 14 and 16 of the Securities Exchange Act of 1934.''.

SEC. 328. LIAISON WITH FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

  Section 1007 of the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3306) is amended--
          (1) in the section heading, by inserting after 
        ``state'' the following: ``and federal housing finance 
        agency''; and
          (2) by inserting after ``financial institutions'' the 
        following: ``, and one representative of the Federal 
        Housing Finance Agency,''.

SEC. 329. GUARANTEE FEE STUDY.

  (a) In General.--The Director of the Federal Housing Finance 
Agency, in consultation with the heads of the federal banking 
agencies, shall, not later than 18 months after the date of the 
enactment of this Act, submit to the Congress a study 
concerning the pricing, transparency and reporting of the 
Federal National Mortgage Association, the Federal Home Loan 
Mortgage Corporation, and the Federal home loan banks with 
regard to guarantee fees and concerning analogous practices, 
transparency and reporting requirements (including advances 
pricing practices by the Federal Home Loan Banks) of other 
participants in the business of mortgage purchases and 
securitization.
  (b) Factors.--The study required by this section shall 
examine various factors such as credit risk, counterparty risk 
considerations, economic value considerations, and volume 
considerations used by the regulated entities (as such term is 
defined in section 1303 of the Housing and Community 
Development Act of 1992) included in the study in setting the 
amount of fees they charge.
  (c) Contents of Report.--The report required under subsection 
(a) shall identify and analyze--
          (1) the factors used by each enterprise (as such term 
        is defined in section 1303 of the Housing and Community 
        Development Act of 1992) in determining the amount of 
        the guarantee fees it charges;
          (2) the total revenue the enterprises earn 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 how and why the guarantee fees 
        charged differ from such fees charged during the 
        previous year;
          (6) a breakdown of the revenue and costs associated 
        with providing guarantees, based on product type and 
        risk classifications; and
          (7) other relevant information on guarantee fees with 
        other participants in the mortgage and securitization 
        business.
  (d) Protection of Information.--Nothing in this section may 
be construed to require or authorize the Director of the 
Federal Housing Finance Agency, in connection with the study 
mandated by this section, to disclose information of the 
enterprises or other organization that is confidential or 
proprietary.
  (e) Effective Date.--This section shall take effect on the 
date of the enactment of this Act.

SEC. 330. CONFORMING AMENDMENTS.

  (a) 1992 Act.--Part 1 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 (12 U.S.C. 4511 
et seq.), as amended by the preceding provisions of this title, 
is further amended--
          (1) by striking ``an enterprise'' each place such 
        term appears in such part (except in sections 
        1313(a)(2)(A), 1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) 
        and inserting ``a regulated entity'';
          (2) by striking ``the enterprise'' each place such 
        term appears in such part (except in section 
        1316(b)(3)) and inserting ``the regulated entity'';
          (3) by striking ``the enterprises'' each place such 
        term appears in such part (except in sections 
        1312(c)(2), and 1312(e)(2)) and inserting ``the 
        regulated entities'';
          (4) by striking ``each enterprise'' each place such 
        term appears in such part and inserting ``each 
        regulated entity'';
          (5) by striking ``Office'' each place such term 
        appears in such part (except in sections 1311(b)(2), 
        1312(b)(5), 1315(b), and 1316(a)(4), (g), and (h), 
        1317(c), and 1319A(a)) and inserting ``Agency'';
          (6) in section 1315 (12 U.S.C. 4515)--
                  (A) in subsection (a)--
                          (i) in the subsection heading, by 
                        striking ``Office Personnel'' and 
                        inserting ``In General''; and
                          (ii) by striking ``The'' and 
                        inserting ``Subject to subtitle C of 
                        the Federal Housing Finance Reform Act 
                        of 2008, the'';
                  (B) by striking subsections (d) and (f); and
                  (C) by redesignating subsection (e) as 
                subsection (d);
          (7) in section 1319B (12 U.S.C. 4521), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' 
        each place such term appears and inserting ``Committee 
        on Financial Services''; and
          (8) in section 1319F (12 U.S.C. 4525), striking all 
        that follows ``United States Code'' and inserting ``, 
        the Agency shall be considered an agency responsible 
        for the regulation or supervision of financial 
        institutions.''.
  (b) Amendments to Fannie Mae Charter Act.--The Federal 
National Mortgage Association Charter Act (12 U.S.C. 1716 et 
seq.) is amended--
          (1) by striking ``Director of the Office of Federal 
        Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place such term 
        appears, and inserting ``Director of the Federal 
        Housing Finance Agency'', in--
                  (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
                  (B) section 309(d)(3)(B) (12 U.S.C. 
                1723a(d)(3)(B)); and
                  (C) section 309(k)(1); and
          (2) in section 309--
                  (A) in subsections (d)(3)(A) and (n)(1), by 
                striking ``Banking, Finance and Urban Affairs'' 
                each place such term appears and inserting 
                ``Financial Services''; and
                  (B) in subsection (m)--
                          (i) in paragraph (1), by striking 
                        ``Secretary'' the second place such 
                        term appears and inserting 
                        ``Director'';
                          (ii) in paragraph (2), by striking 
                        ``Secretary'' the second place such 
                        term appears and inserting 
                        ``Director''; and
                          (iii) by striking ``Secretary'' each 
                        other place such term appears and 
                        inserting ``Director of the Federal 
                        Housing Finance Agency''; and
                  (C) in subsection (n), by striking 
                ``Secretary'' each place such term appears and 
                inserting ``Director of the Federal Housing 
                Finance Agency''.
  (c) Amendments to Freddie Mac Act.--The Federal Home Loan 
Mortgage Corporation Act is amended--
          (1) by striking ``Director of the Office of Federal 
        Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place such term 
        appears, and inserting ``Director of the Federal 
        Housing Finance Agency'', in--
                  (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
                  (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); 
                and
                  (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
          (2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C. 
        1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance 
        and Urban Affairs'' each place such term appears and 
        inserting ``Financial Services'';
          (3) in section 306(i) (12 U.S.C. 1455(i))--
                  (A) by striking ``1316(c)'' and inserting 
                ``306(c)''; and
                  (B) by striking ``section 106'' and inserting 
                ``section 1316''; and
          (4) in section 307 (12 U.S.C. 1456))--
                  (A) in subsection (e)--
                          (i) in paragraph (1), by striking 
                        ``Secretary'' the second place such 
                        term appears and inserting 
                        ``Director'';
                          (ii) in paragraph (2), by striking 
                        ``Secretary'' the second place such 
                        term appears and inserting 
                        ``Director''; and
                          (iii) by striking ``Secretary'' each 
                        other place such term appears and 
                        inserting ``Director of the Federal 
                        Housing Finance Agency''; and
                  (B) in subsection (f), by striking 
                ``Secretary'' each place such term appears and 
                inserting ``Director of the Federal Housing 
                Finance Agency''.

             CHAPTER 2--IMPROVEMENT OF MISSION SUPERVISION


SEC. 331. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL OVERSIGHT.

  Part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is 
amended--
          (1) by striking the designation and heading for the 
        part and inserting the following:

   ``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND 
                   ESTABLISHMENT OF HOUSING GOALS'';

        and
          (2) by striking sections 1321 and 1322.

SEC. 332. REVIEW OF ENTERPRISE PRODUCTS.

  (a) In General.--Part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 is amended by 
inserting before section 1323 (12 U.S.C. 4543) the following 
new section:

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

  ``(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 Director determines 
        that 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 Director determines that 
        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;
          ``(4) the product is consistent with the safety and 
        soundness of the enterprise or the mortgage finance 
        system; and
          ``(5) the product does not materially impair the 
        efficiency of 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), the enterprise may offer the 
                product.
  ``(d) Expedited Review.--
          ``(1) Determination and notice.--If an enterprise 
        determines that any new activity, service, undertaking, 
        or offering is not a product, as defined in subsection 
        (f), the enterprise shall provide written notice to the 
        Director prior to the commencement of such activity, 
        service, undertaking, or offering.
          ``(2) Director determination of applicable 
        procedure.--Immediately upon receipt of any notice 
        pursuant to paragraph (1), the Director shall make a 
        determination under paragraph (3).
          ``(3) Determination and treatment as product.--If the 
        Director determines that any new activity, service, 
        undertaking, or offering consists of, relates to, or 
        involves a product--
                  ``(A) the Director shall notify the 
                enterprise of the determination;
                  ``(B) the new activity, service, undertaking, 
                or offering described in the notice under 
                paragraph (1) shall be considered a product for 
                purposes of this section; and
                  ``(C) the enterprise shall withdraw its 
                request or submit a written request for 
                approval of the product pursuant to subsection 
                (c).
  ``(e) Conditional Approval.--The Director may conditionally 
approve the offering of any product by an enterprise, and may 
establish terms, conditions, or limitations with respect to 
such product with which the enterprise must comply in order to 
offer such product.
  ``(f) Definition of Product.--For purposes of this section, 
the term `product' does not include--
          ``(1) the automated loan underwriting system of an 
        enterprise in existence as of the date of the enactment 
        of the Federal Housing Finance Reform Act of 2008, 
        including any upgrade to the technology, operating 
        system, or software to operate the underwriting system; 
        or
          ``(2) 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 create significant new exposure to risk 
        for the enterprise or the holder of the mortgage.
  ``(g) No Limitation.--Nothing in this section shall be deemed 
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 the enterprise.''.
  (b) Conforming Amendments.--
          (1) Fannie mae.--Section 302(b)(6) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1717(b)(6)) is amended--
                  (A) by striking ``implement any new program'' 
                and inserting ``initially offer any product'';
                  (B) by striking ``section 1303'' and 
                inserting ``section 1321(f)''; and
                  (C) by striking ``before obtaining the 
                approval of the Secretary under section 1322'' 
                and inserting ``except in accordance with 
                section 1321''.
          (2) Freddie mac.--Section 305(c) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1454(c)) is 
        amended--
                  (A) by striking ``implement any new program'' 
                and inserting ``initially offer any product'';
                  (B) by striking ``section 1303'' and 
                inserting ``section 1321(f)''; and
                  (C) by striking ``before obtaining the 
                approval of the Secretary under section 1322'' 
                and inserting ``except in accordance with 
                section 1321''.
          (3) 1992 act.--Section 1303 of the Housing and 
        Community Development Act of 1992 (12 U.S.C. 4502), as 
        amended by the preceding provisions of this title, is 
        further amended--
                  (A) by striking paragraph (17) (relating to 
                the definition of ``new program''); and
                  (B) by redesignating paragraphs (18) through 
                (23) as paragraphs (17) through (22), 
                respectively.

SEC. 333. CONFORMING LOAN LIMITS.

  (a) Fannie Mae.--Section 302(b)(2) of the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is 
amended--
          (1) in the second sentence, by redesignating clause 
        (A) through (C) as clauses (i) through (iii), 
        respectively;
          (2) in the third sentence, by striking ``clause (A)'' 
        and inserting ``clause (i)'';
          (3) in the 4th sentence, by striking ``the Resolution 
        Trust Corporation,'';
          (4) by striking the 7th and 8th sentences and 
        inserting the following new sentences: ``For 2008, 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 
        with 2009, subject to the limitations in this 
        paragraph. Each adjustment shall be made by adding to 
        or subtracting from each such amount (as it may have 
        been previously adjusted) a percentage thereof equal to 
        the percentage increase or decrease, during the most 
        recent 12-month or four-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 Housing and Community Development Act of 
        1992 (12 U.S.C. 4541)).''.
          (5) by inserting ``(A)'' after ``(2)''; and
          (6) by adding at the end the following new 
        subparagraph:
  ``(B)(i) Notwithstanding subparagraph (A), for mortgages 
originated on or after January 1, 2009, the limitation on the 
maximum original principal obligation of a mortgage that may be 
purchased by the corporation shall be the higher of--
          ``(I) the limitation determined under subparagraph 
        (A) for a residence of the applicable size; or
          ``(II) 125 percent of the area median price for a 
        residence of the applicable size, but in no case to 
        exceed 175 percent of the limitation determined under 
        subparagraph (A) for a residence of the applicable 
        size.
  ``(ii) The areas and area median prices used for purposes of 
the determination under this subparagraph shall be the areas 
and area median prices used by the Secretary of Housing and 
Urban Development in determining the applicable limits under 
section 203(b)(2) of the National Housing Act (12 U.S.C. 
1709(b)(2)). A mortgage that is eligible for purchase by the 
corporation at the time the mortgage is originated under this 
subparagraph shall be eligible for such purchase for the 
duration of the term of the mortgage.''.
  (b) Freddie Mac.--Section 305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended--
          (1) in the first sentence, by redesignating clause 
        (A) through (C) as clauses (i) through (iii), 
        respectively;
          (2) in the second sentence, by striking ``clause 
        (A)'' and inserting ``clause (i)'';
          (3) in the third sentence by striking ``the 
        Resolution Trust Corporation'';
          (4) by striking the 6th and 7th sentence and 
        inserting the following new sentences: ``For 2008, 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 
        with 2009, subject to the limitations in this 
        paragraph. Each adjustment shall be made by adding to 
        or subtracting from each such amount (as it may have 
        been previously adjusted) a percentage thereof equal to 
        the percentage increase or decrease, during the most 
        recent 12-month or four-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 Housing and Community Development Act of 
        1992 (12 U.S.C. 4541)).'';
          (5) by inserting ``(A)'' after ``(2)''; and
          (6) by adding at the end the following new 
        subparagraph:
  ``(B)(i) Notwithstanding subparagraph (A), for mortgages 
originated on or after January 1, 2009, the limitation on the 
maximum original principal obligation of a mortgage that may be 
purchased by the Corporation shall be the higher of--
          ``(I) the limitation determined under subparagraph 
        (A) for a residence of the applicable size; or
          ``(II) 125 percent of the area median price for a 
        residence of the applicable size, but in no case to 
        exceed 175 percent of the limitation determined under 
        subparagraph (A) for a residence of the applicable 
        size.
  ``(ii) The areas and area median prices used for purposes of 
the determination under this subparagraph shall be the areas 
and area median prices used by the Secretary of Housing and 
Urban Development in determining the applicable limits under 
section 203(b)(2) of the National Housing Act (12 U.S.C. 
1709(b)(2)). A mortgage that is eligible for purchase by the 
Corporation at the time the mortgage is originated under this 
subparagraph shall be eligible for such purchase for the 
duration of the term of the mortgage.''.
  (c) Housing Price Index.--Subpart A of part 2 of subtitle A 
of title XIII of the Housing and Community Development Act of 
1992 (as amended by the preceding provisions of this title) is 
amended by inserting after section 1321 (as added by the 
preceding provisions of this title) the following new section:

``SEC. 1322. HOUSING PRICE INDEX.

  ``(a) In General.--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 under section 365 of the Federal 
Housing Finance 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.
  ``(b) GAO Audit.--
          ``(1) In general.--At such times as are required 
        under paragraph (2), the Comptroller General of the 
        United States shall conduct an audit of the methodology 
        established by the Director under subsection (a) to 
        determine whether the methodology established is an 
        accurate and appropriate means of measuring changes to 
        the national average 1-family house price.
          ``(2) Timing.--An audit referred to in paragraph (1) 
        shall be conducted and completed not later than the 
        expiration of the 180-day period that begins upon each 
        of the following dates:
                  ``(A) Establishment.--The date upon which 
                such methodology is initially established under 
                subsection (a) in final form by the Director.
                  ``(B) Modification or amendment.--Each date 
                upon which any modification or amendment to 
                such methodology is adopted in final form by 
                the Director.
          ``(3) Report.--Within 30 days of the completion of 
        any audit conducted under this subsection, the 
        Comptroller General shall submit a report detailing the 
        results and conclusions of the audit to the Director, 
        the Committee on Financial Services of the House of 
        Representatives, and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate.''.
  (d) 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 
by the amendments made by this section, to the extent that such 
securitizations can be effected in a timely and efficient 
manner that does not impose additional costs for mortgages 
originated, purchased, or securitized under the existing limits 
or interfere with the goal of adding liquidity to the market.
  (e) Effective Date.--The amendments made by this section 
shall take effect on, and shall apply beginning on, January 1, 
2009.

SEC. 334. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

  (a) In General.--The Housing and Community Development Act of 
1992 is amended by striking section 1324 (12 U.S.C. 4544) and 
inserting the following new section:

``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

  ``(a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act, section 307(f) of the Federal Home 
Loan Mortgage Corporation Act, and section 10(j)(11) of the 
Federal Home Loan Bank Act (12 U.S.C. 1430(j)(11)), the 
Director shall submit a report, not later than October 30 of 
each year, to the Committee on Financial Services of the House 
of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate, on the activities of each 
regulated entity.
  ``(b) Contents.--The report shall--
          ``(1) discuss the extent to which--
                  ``(A) each enterprise is achieving the annual 
                housing goals established under subpart B of 
                this part;
                  ``(B) each enterprise is complying with 
                section 1337;
                  ``(C) each Federal home loan bank is 
                complying with section 10(j) of the Federal 
                Home Loan Bank Act; and
                  ``(D) each regulated entity is achieving the 
                purposes of the regulated entity established by 
                law;
          ``(2) aggregate and analyze relevant data on income 
        to assess the compliance by 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) examine actions that--
                  ``(A) each enterprise has undertaken or could 
                undertake to promote and expand the annual 
                goals established under subpart B and the 
                purposes of the enterprise established by law; 
                and
                  ``(B) each Federal home loan bank has taken 
                or could undertake to promote and expand the 
                community investment program and affordable 
                housing program of the bank established under 
                subsections (i) and (j) of section 10 of the 
                Federal Home Loan Bank Act;
          ``(5) examine the primary and secondary multifamily 
        housing mortgage markets and describe--
                  ``(A) the availability and liquidity of 
                mortgage credit;
                  ``(B) the status of efforts to provide 
                standard credit terms and underwriting 
                guidelines for multifamily housing and to 
                securitize such mortgage products; and
                  ``(C) any factors inhibiting such 
                standardization and securitization;
          ``(6) examine actions each regulated entity has 
        undertaken and could undertake to promote and expand 
        opportunities for first-time homebuyers, including the 
        use of alternative credit scoring;
          ``(7) describe any actions taken under section 
        1325(5) with respect to originators found to violate 
        fair lending procedures;
          ``(8) discuss and analyze existing conditions and 
        trends, including conditions and trends relating to 
        pricing, in the housing markets and mortgage markets; 
        and
          ``(9) identify the extent to which each enterprise is 
        involved in mortgage purchases and secondary market 
        activities involving subprime loans (as identified in 
        accordance with the regulations issued pursuant to 
        section 334(b) of the Federal Housing Finance Reform 
        Act of 2008) and compare the characteristics of 
        subprime loans purchased and securitized by the 
        enterprises to other loans purchased and securitized by 
        the enterprises.
  ``(c) Data Collection and Reporting.--
          ``(1) In general.--To assist the Director in 
        analyzing the matters described in subsection (b) and 
        establishing the methodology described in section 1322, 
        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; and
                  ``(B) 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 is not released in an identifiable form.
          ``(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.''.
  (b) Standards for Subprime Loans.--The Director shall, not 
later than one year after the effective date under section 365, 
by regulations issued under section 1316G of the Housing and 
Community Development Act of 1992, establish standards by which 
mortgages purchased and mortgages purchased and securitized 
shall be characterized as subprime for the purpose of, and only 
for the purpose of, complying with the reporting requirement 
under section 1324(b)(9) of such Act.

SEC. 335. ANNUAL REPORTS BY REGULATED ENTITIES ON AFFORDABLE HOUSING 
                    STOCK.

  The Housing and Community Development Act of 1992 is amended 
by inserting after section 1328 (12 U.S.C. 4548) the following 
new section:

``SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING STOCK.

  ``(a) In General.--To obtain information helpful in applying 
the formula under section 1337(c)(2) for the affordable housing 
program under such section and for other appropriate uses, the 
regulated entities shall conduct, or provide for the conducting 
of, a study on an annual basis to determine the levels of 
affordable housing inventory, and the changes in such levels, 
in communities throughout the United States.
  ``(b) Contents.--The annual study under this section shall 
determine, for the United States, each State, and each 
community within each State--
          ``(1) the level of affordable housing inventory, 
        including affordable rental dwelling units and 
        affordable homeownership dwelling units;
          ``(2) any changes to the level of such inventory 
        during the 12-month period of the study under this 
        section, including--
                  ``(A) any additions to such inventory, 
                disaggregated by the category of such additions 
                (including new construction or housing 
                conversion);
                  ``(B) any subtractions from such inventory, 
                disaggregated by the category of such 
                subtractions (including abandonment, 
                demolition, or upgrade to market-rate housing);
                  ``(C) the number of new affordable dwelling 
                units placed in service; and
                  ``(D) the number of affordable housing 
                dwelling units withdrawn from service;
          ``(3) the types of financing used to build any 
        dwelling units added to such inventory level and the 
        period during which such units are required to remain 
        affordable;
          ``(4) any excess demand for affordable housing, 
        including the number of households on rental housing 
        waiting lists and the tenure of the wait on such lists; 
        and
          ``(5) such other information as the Director may 
        require.
  ``(c) Report.--For each annual study conducted pursuant to 
this section, the regulated entities shall submit to the 
Congress, and make publicly available, a report setting forth 
the findings of the study.
  ``(d) Regulations and Timing.--The Director shall, by 
regulation, establish requirements for the studies and reports 
under this section, including deadlines for the submission of 
such annual reports and standards for determining affordable 
housing.''.

SEC. 336. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES OF 
                    REGULATED ENTITIES.

  (a) In General.--Subpart A of part 2 of subtitle A of title 
XIII of the Housing and Community Development Act of 1992 (12 
U.S.C. 4541 et seq.), as amended by the preceding provisions of 
this title, is further amended by adding at the end the 
following new section:

``SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES OF 
                    REGULATED ENTITIES.

  ``(a) Limitation.--The Director shall by regulation establish 
standards, and shall enforce compliance with such standards, 
that--
          ``(1) prohibit the enterprises from the purchase, 
        service, holding, selling, lending on the security of, 
        or otherwise dealing with any mortgage on a one- to 
        four-family residence that will be used as the 
        principal residence of the mortgagor that does not meet 
        the requirements under subsection (b); and
          ``(2) prohibit the Federal home loan banks from 
        providing any advances to a member for use in 
        financing, and from accepting as collateral for any 
        advance to a member, any mortgage on a one- to four-
        family residence that will be used as the principal 
        residence of the mortgagor that does not meet the 
        requirements under subsection (b).
  ``(b) Identification Requirements.--The requirements under 
this subsection with respect to a mortgage are that the 
mortgagor have, at the time of settlement on the mortgage, a 
Social Security account number.''.
  (b) 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) Prohibition Regarding Mortgagor Identification 
Requirement.--Nothing in this Act may be construed to authorize 
the corporation to purchase, service, hold, sell, lend on the 
security of, or otherwise deal with any mortgage that the 
corporation is prohibited from so dealing with under the 
standards issued under section 1330 of the Housing and 
Community Development Act of 1992 by the Director of the 
Federal Housing Finance Agency.''.
  (c) Freddie Mac.--Section 305 of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1454) is amended by adding 
at the end the following new subsection:
  ``(d) Prohibition Regarding Mortgagor Identification 
Requirements.--Nothing in this Act may be construed to 
authorize the Corporation to purchase, service, hold, sell, 
lend on the security of, or otherwise deal with any mortgage 
that the Corporation is prohibited from so dealing with under 
the standards issued under section 1330 of the Housing and 
Community Development Act of 1992 by the Director of the 
Federal Housing Finance Agency.''.
  (d) Federal Home Loan Banks.--Section 10(a) of the Federal 
Home Loan Bank Act (12 U.S.C. 1430(a)) is amended--
          (1) by redesignating paragraph (6) as paragraph (7); 
        and
          (2) by inserting after paragraph (5) the following 
        new paragraph:
          ``(6) Prohibition regarding mortgagor identification 
        requirements.--Nothing in this Act may be construed to 
        authorize a Federal Home Loan Bank to provide any 
        advance to a member for use in financing, or accept as 
        collateral for an advance under this section, any 
        mortgage that a Bank is prohibited from so accepting 
        under the standards issued under section 1330 of the 
        Housing and Community Development Act of 1992 by the 
        Director of the Federal Housing Finance Agency.''.

SEC. 337. REVISION OF HOUSING GOALS.

  (a) Housing Goals.--The Housing and Community Development Act 
of 1992 is amended by striking sections 1331 through 1334 (12 
U.S.C. 4561-4) and inserting the following new sections:

``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

  ``(a) In General.--The Director shall establish, effective 
for the first year that begins after the effective date under 
section 365 of the Federal Housing Finance Reform Act of 2008 
and each year thereafter, annual housing goals, with respect to 
the mortgage purchases by the enterprises, as follows:
          ``(1) Single family housing goals.--Three single-
        family housing goals under section 1332.
          ``(2) Multifamily special affordable housing goals.--
        A multifamily special affordable housing goal under 
        section 1333.
  ``(b) 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;
                  ``(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; and
                  ``(C) require the enterprise to undertake 
                remedial actions, as appropriate, pursuant to 
                section 1325(5) (12 U.S.C. 4545(5)).
          ``(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.
  ``(c) Timing.--The Director shall 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.

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

  ``(a) In General.--The Director shall establish annual goals 
for the purchase by each enterprise of conventional, 
conforming, single-family, purchase money mortgages financing 
owner-occupied and rental housing for each of the following 
categories of families:
          ``(1) Low-income families.
          ``(2) Families that reside in low-income areas.
          ``(3) Very low-income families.
  ``(b) Refinance Subgoal.--
          ``(1) In general.--The Director shall establish a 
        separate subgoal within each goal under subsection 
        (a)(1) for the purchase by each enterprise of mortgages 
        for low-income families on single family housing given 
        to pay off or prepay an existing loan secured by the 
        same property. The Director shall, for each year, 
        determine whether each enterprise has complied with the 
        subgoal under this subsection in the same manner 
        provided under this section for determining compliance 
        with the housing goals.
          ``(2) Enforcement.--For purposes of section 1336, the 
        subgoal established under paragraph (1) of this 
        subsection shall be considered to be a housing goal 
        established under this section. Such subgoal shall not 
        be enforceable under any other provision of this title 
        (including subpart C of this part) other than section 
        1336 or under any provision of the Federal National 
        Mortgage Association Charter Act or the Federal Home 
        Loan Mortgage Corporation Act.
  ``(c) Determination of Compliance.--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 the single-family housing goals 
established under this section for such year. An enterprise 
shall be considered to be in compliance with such a goal for a 
year only if, for each of the types of families described in 
subsection (a), the percentage of the number of conventional, 
conforming, single-family, owner-occupied or rental, as 
applicable, purchase money mortgages purchased by each 
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 (d).
  ``(d) Annual Targets.--
          ``(1) In general.--Except as provided in paragraph 
        (2), for each of the types of families described in 
        subsection (a), the target under this subsection for a 
        year shall be the average percentage, for the three 
        years that most recently precede such year and for 
        which information under the Home Mortgage Disclosure 
        Act of 1975 is publicly available, of the number of 
        conventional, conforming, single-family, owner-occupied 
        or rental, as applicable, purchase money mortgages 
        originated in such year that serves such type of 
        family, as determined by the Director using the 
        information obtained and determined pursuant to 
        paragraphs (3) and (4).
          ``(2) Authority to increase targets.--
                  ``(A) In general.--The Director may, for any 
                year, establish by regulation, for any or all 
                of the types of families described in 
                subsection (a), percentage targets that are 
                higher than the percentages for such year 
                determined pursuant to paragraph (1), to 
                reflect expected changes in market performance 
                related to such information under the Home 
                Mortgage Disclosure Act of 1975.
                  ``(B) Factors.--In establishing any targets 
                pursuant to subparagraph (A), the Director 
                shall consider the following factors:
                          ``(i) National housing needs.
                          ``(ii) Economic, housing, and 
                        demographic conditions.
                          ``(iii) The performance and effort of 
                        the enterprises toward achieving the 
                        housing goals under this section in 
                        previous years.
                          ``(iv) The size of the conventional 
                        mortgage market serving each of the 
                        types of families described in 
                        subsection (a) relative to the size of 
                        the overall conventional mortgage 
                        market.
                          ``(v) The ability of the enterprise 
                        to lead the industry in making mortgage 
                        credit available.
                          ``(vi) The need to maintain the sound 
                        financial condition of the enterprises.
          ``(3) 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 
        or rental, as applicable, purchase money mortgages 
        originated and purchased for the previous year.
          ``(4) 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 (3), as rounded to the nearest 
        thousand dollars.
  ``(e) Notice of Determination and Enterprise Comment.--
          ``(1) Notice.--Within 30 days of making a 
        determination under subsection (c) regarding a 
        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 (d).
          ``(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.
  ``(f) 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.
  ``(g) Consideration of Units in Single-Family Rental 
Housing.--In establishing any goal under this subpart, the 
Director may take into consideration the number of housing 
units financed by any mortgage on single-family rental housing 
purchased by an enterprise.

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

  ``(a) Establishment.--
          ``(1) In general.--The Director shall establish, by 
        regulation, an annual goal for the purchase by each 
        enterprise of each of the following types of mortgages 
        on multifamily housing:
                  ``(A) Mortgages that finance dwelling units 
                for low-income families.
                  ``(B) Mortgages that finance dwelling units 
                for very low-income families.
                  ``(C) Mortgages that finance dwelling units 
                assisted by the low-income housing tax credit 
                under section 42 of the Internal Revenue Code 
                of 1986.
          ``(2) Additional requirements for smaller projects.--
        The Director shall establish, within the goal under 
        this section, additional requirements for the purchase 
        by each enterprise of mortgages described in paragraph 
        (1) for multifamily housing projects of a smaller or 
        limited size, which may be based on the number of 
        dwelling units in the project or the amount of the 
        mortgage, or both, and shall include multifamily 
        housing projects of such smaller sizes as are typical 
        among such projects that serve rural areas.
          ``(3) Factors.--In establishing the goal under this 
        section relating to mortgages on multifamily housing 
        for an enterprise for a year, the Director shall 
        consider--
                  ``(A) national multifamily mortgage credit 
                needs;
                  ``(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;
                  ``(D) the ability of the enterprise to lead 
                the industry in making mortgage credit 
                available, especially for underserved markets, 
                such as for small multifamily projects of 5 to 
                50 units, multifamily properties in need of 
                rehabilitation, and multifamily properties 
                located in rural areas; and
                  ``(E) the need to maintain the sound 
                financial condition of the enterprise.
  ``(b) Units Financed by Housing Finance Agency Bonds.--The 
Director shall give 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, but only if such bonds--
          ``(1) are secured by a guarantee of the enterprise; 
        or
          ``(2) are not investment grade and are purchased by 
        the enterprise.
  ``(c) Use of Tenant Income or Rent.--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--
          ``(1) the income of the prospective or actual tenants 
        of the property, where such data are available; or
          ``(2) where the data referred to in paragraph (1) are 
        not available, rent levels affordable to low-income and 
        very low-income families.
A rent level shall be considered to be affordable for purposes 
of this subsection for an income category referred to in this 
subsection 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, for 
each year that the housing goal under this section is in effect 
pursuant to section 1331(a), determine 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 for such year established pursuant to this subpart.
  ``(b) Standard for Reduction.--The Director may reduce the 
level for a goal 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 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(3) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1451 note), as 
        applicable.
  ``(c) Determination.--The Director shall make a determination 
regarding any proposed reduction within 30 days of receipt of 
the petition regarding the reduction. The Director may extend 
such period for a single additional 15-day period, but only if 
the Director requests additional information from the 
enterprise. A denial by the Director to reduce the level of any 
goal under this section may be appealed to the United States 
District Court for the District of Columbia or the United 
States district court in the jurisdiction in which the 
headquarters of an enterprise is located.''.
  (b) 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''.
  (c) Definitions.--Section 1303 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4502), as amended by the 
preceding provisions of this title, is further amended--
          (1) in paragraph (22) (relating to the definition of 
        ``very low-income''), by striking ``60 percent'' each 
        place such term appears and inserting ``50 percent'';
          (2) by redesignating paragraphs (19) through (22) as 
        paragraphs (23) through (26), respectively;
          (3) by inserting after paragraph (18) the following 
        new paragraph:
          ``(22) 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) by redesignating paragraphs (13) through (18) as 
        paragraphs (16) through (21), respectively;
          (5) by inserting after paragraph (12) the following 
        new paragraph:
          ``(15) 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)(2), shall include families 
        having incomes not greater than 100 percent of the area 
        median income who reside in minority census tracts.'';
          (6) by redesignating paragraphs (11) and (12) as 
        paragraphs (13) and (14), respectively;
          (7) by inserting after paragraph (10) the following 
        new paragraph:
          ``(12) 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 Secretary.'';
          (8) by redesignating paragraphs (7) through (10) as 
        paragraphs (8) through (11), respectively; and
          (9) by inserting after paragraph (6) the following 
        new paragraph:
          ``(7) 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 limitation, 
        in effect at the time of such origination, 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.''.

SEC. 338. DUTY TO SERVE UNDERSERVED MARKETS.

  (a) Establishment and Evaluation of Performance.--Section 
1335 of the Housing and Community Development 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.--In accordance with the purpose of the 
        enterprises under section 301(3) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1716) and section 301(b)(3) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1451 note) to 
        undertake activities relating to mortgages on housing 
        for very low-, low-, and moderate-income families 
        involving a reasonable economic return that may be less 
        than the return earned on other activities, each 
        enterprise shall have the duty to increase the 
        liquidity of mortgage investments and improve the 
        distribution of investment capital available for 
        mortgage financing for underserved markets.
          ``(2) Underserved markets.--To meet its duty under 
        paragraph (1), each enterprise shall comply with the 
        following requirements with respect to the following 
        underserved markets:
                  ``(A) Manufactured housing.--The enterprise 
                shall lead the industry in developing 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 lead the industry in 
                developing 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; and
                          ``(vii) the rural rental housing 
                        program under section 515 of the 
                        Housing Act of 1949.
                  ``(C) Rural and other underserved markets.--
                The enterprise shall lead the industry in 
                developing loan products and flexible 
                underwriting guidelines to facilitate a 
                secondary market for mortgages on housing for 
                very low-, low-, and moderate-income families 
                in rural areas, and for mortgages for housing 
                for any other underserved market for very low-, 
                low-, and moderate-income families that the 
                Secretary identifies as lacking adequate credit 
                through conventional lending sources. Such 
                underserved markets may be identified by 
                borrower type, market segment, or geographic 
                area.''; and
          (5) by adding at the end the following new 
        subsection:
  ``(c) Evaluation and Reporting of Compliance.--
          ``(1) In general.--Not later than 6 months after the 
        effective date under section 365 of the Federal Housing 
        Finance Reform Act of 2008, the Director shall 
        establish 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 each year, 
        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 and 
                more flexible underwriting guidelines;
                  ``(B) the extent of outreach to qualified 
                loan sellers in each of such underserved 
                markets; and
                  ``(C) the volume of loans purchased in each 
                of such underserved markets.
          ``(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.''.
  (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 subtitle, 
        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 not be enforceable under any other provision 
        of this title (including subpart C of this part) other 
        than this section or under any provision of the Federal 
        National Mortgage Association Charter Act or the 
        Federal Home Loan Mortgage Corporation Act.''.

SEC. 339. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

  (a) 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 (4),'' after ``which''; and
          (2) by adding at the end the following new paragraph:
          ``(5) Additional credit.--The Director shall assign 
        more than 125 percent 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--
                  ``(A) housing that meets energy efficiency or 
                other environmental standards that are 
                established by a Federal, State, or local 
                governmental authority with respect to the 
                geographic area where the housing is located or 
                are otherwise widely recognized; or
                  ``(B) 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.''.
  (b) Monitoring and Enforcement.--Section 1336 of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4566) is 
amended--
          (1) in subsection (b)--
                  (A) in the subsection heading, by inserting 
                ``Preliminary'' before ``Determination'';
                  (B) by striking paragraph (1) and inserting 
                the following new paragraph:
          ``(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 established 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.'';
                  (C) in paragraph (2)--
                          (i) in subparagraph (A), by inserting 
                        ``finally'' before ``determining'';
                          (ii) by striking subparagraphs (B) 
                        and (C) and inserting the following new 
                        subparagraph:
                  ``(B) Extension or shortening of period.--The 
                Director may--
                          ``(i) extend the period under 
                        subparagraph (A) for good cause for not 
                        more than 30 additional days; and
                          ``(ii) shorten the period under 
                        subparagraph (A) for good cause.''; and
                          (iii) by redesignating subparagraph 
                        (D) as subparagraph (C); and
                  (D) in paragraph (3)--
                          (i) in subparagraph (A), by striking 
                        ``determine'' and inserting ``issue a 
                        final determination of'';
                          (ii) in subparagraph (B), by 
                        inserting ``final'' before 
                        ``determinations''; and
                          (iii) in subparagraph (C)--
                                  (I) by striking ``Committee 
                                on Banking, Finance and Urban 
                                Affairs'' and inserting 
                                ``Committee on Financial 
                                Services''; and
                                  (II) by inserting ``final'' 
                                before ``determination'' each 
                                place such term appears; and
          (2) in subsection (c)--
                  (A) by striking the subsection designation 
                and heading and all that follows through the 
                end of paragraph (1) and inserting the 
                following:
  ``(c) Cease and Desist Orders, 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, fails to comply with the plan or the Director 
        finds that the enterprise has failed to meet any 
        housing goal under this subpart, in addition to 
        requiring an enterprise to submit a housing plan, the 
        Director may issue a cease and desist order in 
        accordance with section 1341, impose civil money 
        penalties in accordance with section 1345, or order 
        other remedies as set forth in paragraph (7) of this 
        subsection.'';
                  (B) in paragraph (2)--
                          (i) by striking ``Contents.--Each 
                        housing plan'' and inserting ``Housing 
                        plan.--If the Director requires a 
                        housing plan under this section, such a 
                        plan''; and
                          (ii) in subparagraph (B), by 
                        inserting ``and changes in its 
                        operations'' after ``improvements'';
                  (C) in paragraph (3)--
                          (i) by inserting ``comply with any 
                        remedial action or'' before ``submit a 
                        housing plan''; and
                          (ii) by striking ``under subsection 
                        (b)(3) that a housing plan is 
                        required'';
                  (D) in paragraph (4), by striking the first 
                two sentences and inserting the following: 
                ``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 such 
                extension necessary.''; and
                  (E) by adding at the end the following new 
                paragraph:
          ``(7) Additional remedies for failure to meet 
        goals.--In addition to ordering a housing plan under 
        this section, issuing cease and desist orders under 
        section 1341, and ordering civil money penalties under 
        section 1345, the Director may seek other actions when 
        an enterprise fails to meet a goal, and exercise 
        appropriate enforcement authority available to the 
        Director under this Act to prohibit the enterprise from 
        initially offering any product (as such term is defined 
        in section 1321(f)) or engaging in any new activities, 
        services, undertakings, and offerings and to order the 
        enterprise to suspend products and activities, 
        services, undertakings, and offerings pending its 
        achievement of the goal.''.

SEC. 340. 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.--The Director, in 
consultation with the Secretary of Housing and Urban 
Development, shall establish and manage an affordable housing 
fund in accordance with this section, which shall be funded 
with amounts allocated by the enterprises under subsection (b). 
The purpose of the affordable housing fund shall be to provide 
formula grants to grantees for use--
          ``(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 (m) and subject 
        to paragraph (2) of this subsection and subsection 
        (i)(5), each enterprise shall allocate to the 
        affordable housing fund established under subsection 
        (a), in each of the years 2008 through 2012, an amount 
        equal to 1.2 basis points for each dollar of the 
        average total mortgage portfolio of the enterprise 
        during the preceding year.
          ``(2) Suspension of contributions.--The Director 
        shall temporarily suspend the allocation under 
        paragraph (1) by an enterprise to the affordable 
        housing fund 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.
          ``(3) 5-year sunset and report.--
                  ``(A) Sunset.--The enterprises shall not be 
                required to make allocations to the affordable 
                housing fund in 2012 or in any year thereafter.
                  ``(B) Report on program continuance.--Not 
                later than June 30, 2011, 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 fund, should be extended and 
                on any modifications for the program.
          ``(4) Prohibition of pass-through of cost of 
        allocations.--The Director shall, by regulation, 
        prohibit each enterprise from redirecting such costs, 
        through increased charges or fees, or decreased 
        premiums, or in any other manner, to the originators of 
        mortgages purchased or securitized by the enterprise.
  ``(c) Affordable Housing Needs Formulas.--
          ``(1) Allocation for 2008.--
                  ``(A) Allocation percentages for louisiana 
                and mississippi.--For purposes of subsection 
                (d)(1)(A), the allocation percentages for 2008 
                for the grantees under this section for such 
                year shall be as follows:
                          ``(i) The allocation percentage for 
                        the Louisiana Housing Finance Agency 
                        shall be 75 percent.
                          ``(ii) The allocation percentage for 
                        the Mississippi Development Authority 
                        shall be 25 percent.
                  ``(B) Use in disaster areas.--Affordable 
                housing grant amounts for 2008 shall be used 
                only as provided in subsection (g) only for 
                such eligible activities in areas that were 
                subject to a declaration by the President of a 
                major disaster or emergency under the Robert T. 
                Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5121 et seq.) in 
                connection with Hurricane Katrina or Rita of 
                2005.
          ``(2) Allocation formula for other years.--The 
        Secretary of Housing and Urban Development shall, by 
        regulation, establish a formula to allocate, among the 
        States (as such term is defined in section 1303) and 
        federally recognized Indian tribes, the amounts 
        provided by the enterprises in each year referred to 
        subsection (b)(1), other than 2008, to the affordable 
        housing fund established under this section. The 
        formula shall be based on the following factors, with 
        respect to each State and tribe:
                  ``(A) The ratio of the population of the 
                State or federally recognized Indian tribe to 
                the aggregate population of all the States and 
                tribes.
                  ``(B) The percentage of families in the State 
                or federally recognized Indian tribe that pay 
                more than 50 percent of their annual income for 
                housing costs.
                  ``(C) The percentage of persons in the State 
                or federally recognized Indian tribe that are 
                members of extremely low- or very low-income 
                families.
                  ``(D) The cost of developing or carrying out 
                rehabilitation of housing in the State or for 
                the federally recognized Indian tribe.
                  ``(E) The percentage of families in the State 
                or federally recognized Indian tribe that live 
                in substandard housing.
                  ``(F) The percentage of housing stock in the 
                State or for the federally recognized Indian 
                tribe that is extremely old housing.
                  ``(G) Any other factors that the Secretary 
                determines to be appropriate.
          ``(3) Failure to establish.--If, in any year referred 
        to in subsection (b)(1), other than 2008, the 
        regulations establishing the formula required under 
        paragraph (2) of this subsection have not been issued 
        by the date that the Director determines the amounts 
        described in subsection (d)(1) to be available for 
        affordable housing fund grants in such year, for 
        purposes of such year any amounts for a State (as such 
        term is defined in section 1303 of this Act) that would 
        otherwise be determined under subsection (d) by 
        applying the formula established pursuant to paragraph 
        (2) of this subsection shall be determined instead by 
        applying, for such State, the percentage that is equal 
        to the percentage of the total amounts made available 
        for such year for allocation under subtitle A of title 
        II of the Cranston-Gonzalez National Affordable Housing 
        Act (42 U.S.C. 12741 et seq.) that are allocated in 
        such year, pursuant to such subtitle, to such State 
        (including any insular area or unit of general local 
        government, as such terms are defined in section 104 of 
        such Act (42 U.S.C. 12704), that is treated as a State 
        under section 1303 of this Act) and to participating 
        jurisdictions and other eligible entities within such 
        State.
  ``(d) Allocation of Formula Amount; Grants.--
          ``(1) Formula amount.--For each year referred to in 
        subsection (b)(1), the Director shall determine the 
        formula amount under this section for each grantee, 
        which shall be the amount determined for such grantee--
                  ``(A) for 2008, by applying the allocation 
                percentages under subparagraph (A) of 
                subsection (c)(1) to the sum of the total 
                amounts allocated by the enterprises to the 
                affordable housing fund for such year, less any 
                amounts used pursuant to subsection (i)(1); and
                  ``(B) for any other year referred to in 
                subsection (b)(1) (other than 2008), by 
                applying the formula established pursuant to 
                paragraph (2) of subsection (c) to the sum of 
                the total amounts allocated by the enterprises 
                to the affordable housing fund for such year 
                and any recaptured amounts available pursuant 
                to subsection (i)(4), less any amounts used 
                pursuant to subsection (i)(1).
          ``(2) Notice.--In each year referred to in subsection 
        (b)(1), not later than 60 days after the date that the 
        Director determines the amounts described in paragraph 
        (1) to be available for affordable housing fund grants 
        to grantees in such year, the Director shall cause to 
        be published in the Federal Register a notice that such 
        amounts shall be so available.
          ``(3) Grant amount.--
                  ``(A) In general.--For each year referred to 
                in subsection (b)(1), the Director shall make a 
                grant from amounts in the affordable housing 
                fund to each grantee in an amount that
is, except as provided in subparagraph (B), equal to the 
formula amount under this section for the grantee. A grantee 
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 other qualified instrumentality of the 
grantee to receive such grant amounts.
                  ``(B) Reduction for failure to obtain return 
                of misused funds.--If in any year a grantee 
                fails to obtain reimbursement or return of the 
                full amount required under subsection (j)(1)(B) 
                to be reimbursed or returned to the grantee 
                during such year--
                          ``(i) except as provided in clause 
                        (ii)--
                                  ``(I) the amount of the grant 
                                for the grantee for the 
                                succeeding year, as determined 
                                pursuant to subparagraph (A), 
                                shall be reduced by the amount 
                                by which such amounts required 
                                to be reimbursed or returned 
                                exceed the amount actually 
                                reimbursed or returned; and
                                  ``(II) the amount of the 
                                grant for the succeeding year 
                                for each other grantee whose 
                                grant is not reduced pursuant 
                                to subclause (I) shall be 
                                increased by the amount 
                                determined by applying the 
                                formula established pursuant to 
                                subsection (c)(2) to the total 
                                amount of all reductions for 
                                all grantees for such year 
                                pursuant to subclause (I); or
                          ``(ii) 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 subsection will not be made, the 
                        grantee shall pay to the Director for 
                        reallocation among the other grantees 
                        an amount equal to the amount of the 
                        reduction for the grantee that would 
                        otherwise apply under clause (i)(I).
  ``(e) Grantee Allocation Plans.--
          ``(1) In general.--For each year that a grantee 
        receives affordable housing fund grant amounts, the 
        grantee shall establish an allocation plan in 
        accordance with this subsection, which shall be a plan 
        for the distribution of such grant amounts of the 
        grantee for such year that--
                  ``(A) is based on priority housing needs, as 
                determined by the grantee in accordance with 
                the regulations established under subsection 
                (m)(2)(C);
                  ``(B) complies with subsection (f); and
                  ``(C) includes performance goals, benchmarks, 
                and timetables for the grantee for the 
                production, preservation, and rehabilitation of 
                affordable rental and homeownership housing 
                with such grant amounts that comply with the 
                requirements established by the Director 
                pursuant to subsection (m)(2)(F).
          ``(2) Establishment.--In establishing an allocation 
        plan, a grantee shall notify the public of the 
        establishment of the plan, provide an opportunity for 
        public comments regarding the plan, consider any public 
        comments received, and make the completed plan 
        available to the public.
          ``(3) Contents.--An allocation plan of a grantee 
        shall set forth the requirements for eligible 
        recipients under subsection (h) to apply to the grantee 
        to receive assistance from affordable housing fund 
        grant amounts, including a requirement that each such 
        application include--
                  ``(A) a description of the eligible 
                activities to be conducted using such 
                assistance; and
                  ``(B) 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.
  ``(f) Selection of Activities Funded Using Affordable Housing 
Fund Grant Amounts.--Affordable housing fund grant amounts of a 
grantee may be used, or committed for use, only for activities 
that--
          ``(1) are eligible under subsection (g) for such use;
          ``(2) comply with the applicable allocation plan 
        under subsection (e) of the grantee; and
          ``(3) are selected for funding by the grantee in 
        accordance with the process and criteria for such 
        selection established pursuant to subsection (m)(2)(C).
  ``(g) Eligible Activities.--Affordable housing fund grant 
amounts of a grantee 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 such grant amounts 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 
                        affordable housing fund grant amounts;
                  ``(B) has an initial purchase price that 
                meets the requirements of section 215(b)(1) of 
                the Cranston-Gonzalez National Affordable 
                Housing Act;
                  ``(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
                  ``(D) is made available for purchase only by, 
                or in the case of assistance under this 
                paragraph, is made available only to, 
                homebuyers who have, before purchase--
                          ``(i) completed a program of 
                        counseling with respect to the 
                        responsibilities and financial 
                        management involved in homeownership 
                        that is approved by the Director; 
                        except that the Director may, at the 
                        request of a State, waive the 
                        requirements of this subparagraph with 
                        respect to a geographic area or areas 
                        within the State if: (I) the travel 
                        time or distance involved in providing 
                        counseling with respect to such area or 
                        areas, as otherwise required under this 
                        subparagraph, on an in-person basis is 
                        excessive or the cost of such travel is 
                        prohibitive; and (II) the State 
                        provides alternative forms of 
                        counseling for such area or areas, 
                        which may include interactive telephone 
                        counseling, on-line counseling, 
                        interactive video counseling, and 
                        interactive home study counseling and a 
                        program of financial literacy and 
                        education to promote an understanding 
                        of consumer, economic, and personal 
                        finance issues and concepts, including 
                        saving for retirement, managing credit, 
                        long-term care, and estate planning and 
                        education on predatory lending, 
                        identity theft, and financial abuse 
                        schemes relating to homeownership that 
                        is approved by the Director, except 
                        that entities providing such counseling 
                        shall not discriminate against any 
                        particular form of housing; and
                          ``(ii) demonstrated, in accordance 
                        with regulations as the Director shall 
                        issue setting forth requirements for 
                        sufficient evidence, that they are 
                        lawfully present in the United States; 
                        and
          ``(3) public infrastructure development activities in 
        connection with housing activities funded under 
        paragraph (1) or (2).
  ``(h) Eligible Recipients.--Affordable housing fund grant 
amounts of a grantee may be provided only to a recipient that 
is an organization, agency, or other entity (including a for-
profit entity, a nonprofit entity, and a faith-based 
organization) that--
          ``(1) has demonstrated experience and capacity to 
        conduct an eligible activity under (g), as evidenced by 
        its ability to--
                  ``(A) own, construct or rehabilitate, manage, 
                and operate an affordable multifamily rental 
                housing development;
                  ``(B) design, construct or rehabilitate, and 
                market affordable housing for homeownership;
                  ``(C) provide forms of assistance, such as 
                downpayments, closing costs, or interest-rate 
                buy-downs, for purchasers; or
                  ``(D) construct related public infrastructure 
                development activities in connection with such 
                housing activities;
          ``(2) demonstrates the ability and financial capacity 
        to undertake, comply, and manage the eligible activity;
          ``(3) demonstrates its familiarly 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
          ``(4) makes such assurances to the grantee as the 
        Director shall, by regulation, require to ensure that 
        the recipient will comply with the requirements of this 
        section 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 subsection (g) that are engaged in by 
        the recipient and funded with such grant amounts.
  ``(i) Limitations on Use.--
          ``(1) Required amount for refcorp.--Of the aggregate 
        amount allocated pursuant to subsection (b) in each 
        year to the affordable housing fund, 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 the aggregate amount of affordable housing fund 
        grant amounts provided in each year to a grantee, not 
        less than 10 percent shall be used for activities under 
        paragraph (2) of subsection (g).
          ``(3) Maximum amount for public infrastructure 
        development activities in connection with affordable 
        housing activities.--Of the aggregate amount of 
        affordable housing fund grant amounts provided in each 
        year to a grantee, not more than 12.5 percent may be 
        used for activities under paragraph (3) of subsection 
        (g).
          ``(4) Deadline for commitment or use.--Any affordable 
        housing fund grant amounts of a grantee shall be used 
        or committed for use within two years of the date of 
        that such grant amounts are made available to the 
        grantee. The Director shall recapture into the 
        affordable housing fund any such amounts not so used or 
        committed for use and allocate such amounts under 
        subsection (d)(1) in the first year after such 
        recapture.
          ``(5) Use of returns.--The Director shall, by 
        regulation provide that any return on a loan or other 
        investment of any affordable housing fund grant amounts 
        of a grantee shall be treated, for purposes of 
        availability to and use by the grantee, as affordable 
        housing fund grant amounts.
          ``(6) Prohibited uses.--The Director shall--
                  ``(A) by regulation, set forth prohibited 
                uses of affordable housing fund grant amounts, 
                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), affordable 
                housing fund grant amounts of a grantee may not 
                be used for administrative, outreach, or other 
                costs of--
                          ``(i) the grantee; or
                          ``(ii) any recipient of such grant 
                        amounts; and
                  ``(C) by regulation, limit the amount of any 
                affordable housing fund grant amounts of the 
                grantee for a year that may be used for 
                administrative costs of the grantee of carrying 
                out the program required under this section to 
                a percentage of such grant amounts of the 
                grantee for such year, which may not exceed 10 
                percent.
          ``(7) 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 affordable 
        housing fund grant amounts used under this section for 
        eligible activities under subsection (g). 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 affordable 
        housing fund grant amounts, but only to the extent that 
        such purchases by the enterprises are funded other than 
        with such grant amounts.
          ``(8) Acceptable identification requirement for 
        occupancy or assistance.--
                  ``(A) In general.--Any assistance provided 
                with any affordable housing grant amounts may 
                not be made available to, or on behalf of, any 
                individual or household unless the individual 
                provides, or, in the case of a household, all 
                adult members of the household provide, 
                personal identification in one of the following 
                forms:
                          ``(i) Social security card with photo 
                        identification card or real id act 
                        identification.--
                                  ``(I) A social security card 
                                accompanied by a photo 
                                identification card issued by 
                                the Federal Government or a 
                                State Government; or
                                  ``(II) A driver's license or 
                                identification card issued by a 
                                State in the case of a State 
                                that is in compliance with 
                                title II of the REAL ID Act of 
                                2005 (title II of division B of 
                                Public Law 109-13; 49 U.S.C. 
                                30301 note).
                          ``(ii) Passport.--A passport issued 
                        by the United States or a foreign 
                        government.
                          ``(iii) USCIS photo identification 
                        card.--A photo identification card 
                        issued by the Secretary of Homeland 
                        Security (acting through the Director 
                        of the United States Citizenship and 
                        Immigration Services).
                  ``(B) Regulations.--The Director shall, by 
                regulation, require that each grantee and 
                recipient take such actions as the Director 
                considers necessary to ensure compliance with 
                the requirements of subparagraph (A).
  ``(j) Accountability of Recipients and Grantees.--
          ``(1) Recipients.--
                  ``(A) Tracking of funds.--The Director 
                shall--
                          ``(i) require each grantee to develop 
                        and maintain a system to ensure that 
                        each recipient of assistance from 
                        affordable housing fund grant amounts 
                        of the grantee 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 
                        recipients, regarding assistance from 
                        the affordable housing fund grant 
                        amounts of the grantee, which shall 
                        include--
                                  ``(I) appropriate continuing 
                                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 Director determines 
                                are necessary to ensure 
                                appropriate grant 
                                administration and compliance.
                  ``(B) Misuse of funds.--
                          ``(i) Reimbursement requirement.--If 
                        any recipient of assistance from 
                        affordable housing fund grant amounts 
                        of a grantee 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 grantee shall 
                        require that, within 12 months after 
                        the determination of such misuse, the 
                        recipient shall reimburse the grantee 
                        for such misused amounts and return to 
                        the grantee any amounts from the 
                        affordable housing fund grant amounts 
                        of the grantee 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--
                                  ``(I) made by the Director; 
                                or
                                  ``(II)(aa) made by the 
                                grantee;
                                  ``(bb) the grantee provides 
                                notification of the 
                                determination to the Director 
                                for review, in the discretion 
                                of the Director, of the 
                                determination; and
                                  ``(cc) the Director does not 
                                subsequently reverse the 
                                determination.
          ``(2) Grantees.--
                  ``(A) Report.--
                          ``(i) In general.--The Director shall 
                        require each grantee receiving 
                        affordable housing fund grant amounts 
                        for a year to submit a report, for such 
                        year, to the Director that--
                                  ``(I) describes the 
                                activities funded under this 
                                section during such year with 
                                the affordable housing fund 
                                grant amounts of the grantee; 
                                and
                                  ``(II) the manner in which 
                                the grantee complied during 
                                such year with the allocation 
                                plan established pursuant to 
                                subsection (e) for the grantee.
                          ``(ii) Public availability.--The 
                        Director shall make such reports 
                        pursuant to this subparagraph publicly 
                        available.
                  ``(B) Misuse of funds.--If the Director 
                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 
                Director is satisfied that there is no longer 
                any such failure to comply, the Director 
                shall--
                          ``(i) reduce the amount of assistance 
                        under this section to the grantee by an 
                        amount equal to the amount affordable 
                        housing fund grant amounts which were 
                        not used in accordance with this 
                        section;
                          ``(ii) require the grantee to repay 
                        the Director an amount equal to the 
                        amount of the amount affordable housing 
                        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.
  ``(k) Capital Requirements.--The utilization or commitment of 
amounts from the affordable housing fund shall not be subject 
to the risk-based capital requirements established pursuant to 
section 1361(a).
  ``(l) Definitions.--For purposes of this section, the 
following definitions shall apply:
          ``(1) Affordable housing fund grant amounts.--The 
        term `affordable housing fund grant amounts' means 
        amounts from the affordable housing fund established 
        under subsection (a) that are provided to a grantee 
        pursuant to subsection (d)(3).
          ``(2) Grantee.--The term `grantee' means--
                  ``(A) with respect to 2008, the Louisiana 
                Housing Finance Agency and the Mississippi 
                Development Authority; and
                  ``(B) with respect to the years referred to 
                in subsection (b)(1), other than 2008, each 
                State (as such term is defined in section 1303) 
                and each federally recognized Indian tribe.
          ``(3) Recipient.--The term `recipient' means an 
        entity meeting the requirements under subsection (h) 
        that receives assistance from a grantee from affordable 
        housing fund grant amounts of the grantee.
          ``(4) Total mortgage portfolio.--The term `total 
        mortgage portfolio' means, with respect to a year, the 
        sum, for all mortgages outstanding during that year in 
        any form, including whole loans, mortgage-backed 
        securities, participation certificates, or other 
        structured securities backed by mortgages, of the 
        dollar amount of the unpaid outstanding principal 
        balances under such mortgages. Such term includes all 
        such mortgages or securitized obligations, whether 
        retained in portfolio, or sold in any form. The 
        Director is authorized to promulgate rules further 
        defining such term as necessary to implement this 
        section and to address market developments.
          ``(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.
  ``(m) Regulations.--
          ``(1) In general.--The Director, in consultation with 
        the Secretary of Housing and Urban Development, shall 
        issue regulations to carry out this section.
          ``(2) Required contents.--The regulations issued 
        under this subsection shall include--
                  ``(A) a requirement that the Director ensure 
                that the program of each grantee for use of 
                affordable housing fund grant amounts of the 
                grantee is audited not less than annually to 
                ensure compliance with this section;
                  ``(B) authority for the Director to audit, 
                provide for an audit, or otherwise verify a 
                grantee's activities, to ensure compliance with 
                this section;
                  ``(C) requirements for a process for 
                application to, and selection by, each grantee 
                for activities meeting the grantee's priority 
                housing needs to be funded with affordable 
                housing fund grant amounts of the grantee, 
                which shall provide for priority in funding to 
                be based upon--
                          ``(i) greatest impact;
                          ``(ii) geographic diversity;
                          ``(iii) ability to obligate amounts 
                        and undertake activities so funded in a 
                        timely manner;
                          ``(iv) in the case of rental housing 
                        projects under subsection (g)(1), the 
                        extent to which rents for units in the 
                        project funded are affordable, 
                        especially for extremely low-income 
                        families;
                          ``(v) in the case of rental housing 
                        projects under subsection (g)(1), the 
                        extent of the duration for which such 
                        rents will remain affordable;
                          ``(vi) the extent to which the 
                        application makes use of other funding 
                        sources; and
                          ``(vii) the merits of an applicant's 
                        proposed eligible activity;
                  ``(D) requirements to ensure that amounts 
                provided to a grantee from the affordable 
                housing fund that are used for rental housing 
                under subsection (g)(1) are used only for the 
                benefit of extremely low- and very-low income 
                families;
                  ``(E) limitations on public infrastructure 
                development activities that are eligible 
                pursuant to subsection (g)(3) for funding with 
                affordable housing fund grant amounts and 
                requirements for the connection between such 
                activities and housing activities funded under 
                paragraph (1) or (2) of subsection (g); and
                  ``(F) requirements and standards for 
                establishment, by grantees (including the 
                grantees for 2008 pursuant to subsection 
                (l)(2)(A)), of performance goals, benchmarks, 
                and timetables for the production, 
                preservation, and rehabilitation of affordable 
                rental and homeownership housing with 
                affordable housing fund grant amounts.
  ``(n) 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.
  ``(o) Affordable Housing Trust Fund.--If, after the enactment 
of the Federal Housing Finance 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 (b)(1), the Director shall 
in such subsequent year and any remaining years referred to in 
subsection (b)(1) transfer to such affordable housing trust 
fund the aggregate amount allocated pursuant to subsection (b) 
in such year to the affordable housing fund under this section, 
less any amounts used pursuant to subsection (i)(1). For such 
subsequent and remaining years, the provisions of subsections 
(c) and (d) shall not apply. 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 (i)(6). Nothing in 
this subsection shall be construed to alter the terms and 
conditions of the affordable housing fund under this section or 
to extend the life of such fund.
  ``(p) Funding Accountability and Transparency.--Any grant 
under this section to a grantee from the affordable housing 
fund established under subsection (a), any assistance provided 
to a recipient by a grantee from affordable housing fund grant 
amounts, and any grant, award, or other assistance from an 
affordable housing trust fund referred to in subsection (o) 
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 Director of the Federal Housing 
Finance Agency 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.''.
  (b) Timely Establishment of Affordable Housing Needs 
Formula.--
          (1) In general.--The Secretary of Housing and Urban 
        Development shall, not later than the effective date 
        under section 365 of this title, issue the regulations 
        establishing the affordable housing needs formulas in 
        accordance with the provisions of section 1337(c)(2) of 
        the Housing and Community Development Act of 1992, as 
        such section is amended by subsection (a) of this 
        section.
          (2) 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(i)(1) of such Act.''.
  (d) GAO Report.--The Comptroller General shall conduct a 
study to determine the effects that the affordable housing fund 
established under section 1337 of the Housing and Community 
Development Act of 1992, as added by the amendment made by 
subsection (a) of this section, will have on the availability 
and affordability of credit for homebuyers, including the 
effects on such credit of the requirement under such section 
1337(b) that the Federal National Mortgage Association and 
Federal Home Loan Mortgage Corporation make allocations of 
amounts to such fund based on the average total mortgage 
portfolios, and the extent to which the costs of such 
allocation requirement will be borne by such entities or will 
be passed on to homebuyers. Not later than the expiration of 
the 12-month period beginning on the date of the enactment of 
this Act, the Comptroller General shall submit a report to the 
Congress setting forth the results and conclusions of such 
study. This subsection shall take effect on the date of the 
enactment of this Act.

SEC. 341. CONSISTENCY WITH MISSION.

  Subpart B of part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 (12 U.S.C. 4561 
et seq.) is amended by adding after section 1337, as added by 
the preceding provisions of this title, the following new 
section:

``SEC. 1338. CONSISTENCY WITH MISSION.

  ``This subpart may not be construed to authorize an 
enterprise to engage in any program or activity that 
contravenes or is inconsistent with the Federal National 
Mortgage Association Charter Act or the Federal Home Loan 
Mortgage Corporation Act.''.

SEC. 342. ENFORCEMENT.

  (a) Cease-and-Desist Proceedings.--Section 1341 of the 
Housing and Community Development Act of 1992 (12 U.S.C. 4581) 
is amended--
          (1) by striking subsection (a) and inserting the 
        following new subsection:
  ``(a) Grounds for Issuance.--The Director may issue and serve 
a notice of charges under this section upon an enterprise if 
the Director determines--
          ``(1) the enterprise has failed to meet any housing 
        goal established under subpart B, following a written 
        notice and determination of such failure in accordance 
        with section 1336;
          ``(2) the enterprise has failed to submit a report 
        under section 1314, following a notice of such failure, 
        an opportunity for comment by the enterprise, and a 
        final determination by the Director;
          ``(3) 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;
          ``(4) the enterprise has violated any provision of 
        this part or any order, rule or regulation under this 
        part;
          ``(5) the enterprise has failed to submit a housing 
        plan that complies with section 1336(c) within the 
        applicable period; or
          ``(6) the enterprise has failed to comply with a 
        housing plan under section 1336(c).'';
          (2) in subsection (b)(2), by striking ``requiring the 
        enterprise to'' and all that follows through the end of 
        the paragraph and inserting the following: ``requiring 
        the enterprise to--
                  ``(A) comply with the goal or goals;
                  ``(B) submit a report under section 1314;
                  ``(C) comply with any provision this part or 
                any order, rule or regulation under such part;
                  ``(D) submit a housing plan in compliance 
                with section 1336(c);
                  ``(E) comply with a housing plan submitted 
                under section 1336(c); or
                  ``(F) 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, 
                as applicable.'';
          (3) in subsection (c), by inserting ``date of the'' 
        before ``service of the order''; and
          (4) by striking subsection (d).
  (b) Authority of Director To Enforce Notices and Orders.--
Section 1344 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4584) is amended 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 
enterprise is located, for the enforcement of any effective and 
outstanding notice or order issued under section 1341 or 1345, 
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.''.
  (c) Civil Money Penalties.--Section 1345 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4585) is amended--
          (1) by striking subsections (a) and (b) and inserting 
        the following new subsections:
  ``(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) meet any housing goal established under subpart 
        B, following a written notice and determination of such 
        failure in accordance with section 1336(b);
          ``(2) submit a report under section 1314, following a 
        notice of such failure, an opportunity for comment by 
        the enterprise, and a final determination by the 
        Director;
          ``(3) 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;
          ``(4) comply with any provision of this part or any 
        order, rule or regulation under this part;
          ``(5) submit a housing plan pursuant to section 
        1336(c) within the required period; or
          ``(6) comply with a housing plan for the enterprise 
        under section 1336(c).
  ``(b) Amount of Penalty.--The amount of the penalty, as 
determined by the Director, may not exceed--
          ``(1) for any failure described in paragraph (1), 
        (5), or (6) of subsection (a), $50,000 for each day 
        that the failure occurs; and
          ``(2) for any failure described in paragraph (2), 
        (3), or (4) of subsection (a), $20,000 for each day 
        that the failure occurs.'';
          (2) in subsection (c)--
                  (A) in paragraph (1)--
                          (i) in subparagraph (A), by inserting 
                        ``and'' after the semicolon at the end;
                          (ii) in subparagraph (B), by striking 
                        ``; and'' and inserting a period; and
                          (iii) by striking subparagraph (C); 
                        and
                  (B) in paragraph (2), by inserting after the 
                period at the end the following: ``In 
                determining the penalty under subsection 
                (a)(1), the Director shall give consideration 
                to the length of time the enterprise should 
                reasonably take to achieve the goal.'';
          (3) in the first sentence of subsection (d)--
                  (A) by striking ``request the Attorney 
                General of the United States to'' and inserting 
                ``, in the discretion of the Director,''; and
                  (B) by inserting ``, or request that the 
                Attorney General of the United States bring 
                such an action'' before the period at the end;
          (4) by striking subsection (f); and
          (5) by redesignating subsection (g) as subsection 
        (f).
  (d) Enforcement of Subpoenas.--Section 1348(c) of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4588(c)) is 
amended--
          (1) by striking ``request the Attorney General of the 
        United States to'' and inserting ``, in the discretion 
        of the Director,''; and
          (2) by inserting ``or request that the Attorney 
        General of the United States bring such an action,'' 
        after ``District of Columbia,''.
  (e) Conforming Amendment.--The heading for subpart C of part 
2 of subtitle A of title XIII of the Housing and Community 
Development Act of 1992 is amended to read as follows:

                      ``Subpart C--Enforcement''.

SEC. 343. CONFORMING AMENDMENTS.

  Part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is 
amended--
          (1) by striking ``Secretary'' each place such term 
        appears in such part and inserting ``Director'';
          (2) in the section heading for section 1323 (12 
        U.S.C. 4543), by inserting ``OF ENTERPRISES'' before 
        the period at the end;
          (3) by striking section 1327 (12 U.S.C. 4547);
          (4) by striking section 1328 (12 U.S.C. 4548);
          (5) by redesignating section 1329 (as amended by 
        section 335) as section 1327;
          (6) in sections 1345(c)(1)(A), 1346(a), and 1346(b) 
        (12 U.S.C. 4585(c)(1)(A), 4586(a), and 4586(b)), by 
        striking ``Secretary's'' each place such term appears 
        and inserting ``Director's''; and
          (7) by striking section 1349 (12 U.S.C. 4589).

                  CHAPTER 3--PROMPT CORRECTIVE ACTION


SEC. 345. CAPITAL CLASSIFICATIONS.

  (a) In General.--Section 1364 of the Housing and Community 
Development 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 new subsections:
  ``(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, in the 
                case of an enterprise, that the value of the 
                property subject to mortgages held or 
                securitized by the 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 effective date under section 365, 
the Director of the Federal Housing Finance Agency shall issue 
regulations to carry out section 1364(b) of the Housing and 
Community Development Act of 1992 (as added by paragraph (4) of 
this subsection), relating to capital classifications for the 
Federal home loan banks.

SEC. 346. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED 
                    ENTITIES.

  Section 1365 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4615) is amended--
          (1) in the section heading, by striking 
        ``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
          (2) in subsection (a)--
                  (A) by redesignating paragraphs (1) and (2) 
                as paragraphs (2) and (3), respectively;
                  (B) by inserting before paragraph (2), as so 
                redesignated by subparagraph (A) of this 
                paragraph, the following paragraph:
          ``(1) Required monitoring.--The Director shall--
                  ``(A) closely monitor the condition of any 
                regulated entity that is classified as 
                undercapitalized;
                  ``(B) closely monitor compliance with the 
                capital restoration plan, restrictions, and 
                requirements imposed under this section; and
                  ``(C) periodically review the plan, 
                restrictions, and requirements applicable to 
                the undercapitalized regulated entity to 
                determine whether the plan, restrictions, and 
                requirements are achieving the purpose of this 
                section.''; and
                  (C) by inserting at the end the following new 
                paragraphs:
          ``(4) Restriction of asset growth.--A regulated 
        entity that is classified as undercapitalized shall not 
        permit 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 unless--
                  ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity;
                  ``(B) any increase in total assets is 
                consistent with the plan; and
                  ``(C) the ratio of total capital to assets 
                for the regulated entity increases during the 
                calendar quarter at a rate sufficient to enable 
                the entity to become adequately capitalized 
                within a reasonable time.
          ``(5) Prior approval of acquisitions, new products, 
        and new activities.--A regulated entity that is 
        classified as undercapitalized shall not, directly or 
        indirectly, acquire any interest in any entity or 
        initially offer any new product (as such term is 
        defined in section 1321(f)) or engage in any new 
        activity, service, undertaking, or offering unless--
                  ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity, the 
                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 section.'';
          (3) in the subsection heading for subsection (b), by 
        striking ``From Undercapitalized to Significantly 
        Undercapitalized''; and
          (4) by striking subsection (c) and inserting the 
        following new subsection:
  ``(c) Other Discretionary Safeguards.--The Director may take, 
with respect to a regulated entity that is classified as 
undercapitalized, any of the actions authorized to be taken 
under section 1366 with respect to a regulated entity that is 
classified as significantly undercapitalized, if the Director 
determines that such actions are necessary to carry out the 
purpose of this subtitle.''.

SEC. 347. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                    UNDERCAPITALIZED REGULATED ENTITIES.

  Section 1366 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4616) is amended--
          (1) in the section heading, by striking 
        ``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
          (2) in subsection (a)(2)(A), by striking 
        ``enterprise'' the last place such term appears;
          (3) in subsection (b)--
                  (A) in the subsection heading, by striking 
                ``Discretionary Supervisory Actions'' and 
                inserting ``Specific Actions''.
                  (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, one or more'';
                  (C) by redesignating paragraphs (5) and (6) 
                as paragraphs (6) and (7), respectively;
                  (D) by inserting after paragraph (4) the 
                following new paragraph:
          ``(5) Improvement of management.--Take one 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 entity became 
                undercapitalized. Dismissal under this 
                subparagraph shall not be construed to be a 
                removal pursuant to the Director's enforcement 
                powers provided in 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
                  (E) by inserting at the end the following new 
                paragraph:
          ``(8) 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 actions specified in this paragraph.'';
          (4) by redesignating subsection (c) as subsection 
        (d); and
          (5) by inserting after subsection (b) the following 
        new subsection:
  ``(c) Restriction on Compensation of Executive Officers.--A 
regulated entity that is classified as significantly 
undercapitalized 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 that officer's average rate of 
        compensation (excluding bonuses, stock options, and 
        profit sharing) during the 12 calendar months preceding 
        the calendar month in which the regulated entity became 
        undercapitalized.''.

SEC. 348. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
                    ENTITIES.

  (a) In General.--Section 1367 of the Housing and Community 
Development 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 Agency as Conservator or Receiver.--
          ``(1) In general.--Notwithstanding any other 
        provision of Federal or State law, if any of the 
        grounds under paragraph (3) exist, at the discretion of 
        the Director, the Director may establish a 
        conservatorship or receivership, as appropriate, for 
        the purpose of reorganizing, rehabilitating, or winding 
        up the affairs of a regulated entity.
          ``(2) Appointment.--In any conservatorship or 
        receivership established under this section, the 
        Director shall appoint the Agency as conservator or 
        receiver.
          ``(3) Grounds for appointment.--The grounds for 
        appointing a conservator or receiver for a regulated 
        entity 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) or in regulations issued pursuant to 
                section 1364(b), as applicable), 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 an undercapitalized 
                                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) or in regulations issued pursuant to 
                section 1364(b), as applicable.
                  ``(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 30 
                        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 30 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 under capitalized 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) shall 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 under this 
                section of the Agency as receiver of a 
                regulated entity shall immediately terminate 
                any conservatorship established under this 
                title for the regulated entity.
          ``(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 principal place of business 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; and
                          ``(iv) preserve and conserve the 
                        assets and property of such regulated 
                        entity.
                  ``(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, 
                        including, if two or more Federal home 
                        loan banks have been placed in 
                        conservatorship contemporaneously, 
                        merging two or more such banks into a 
                        single Federal home loan bank.
                  ``(E) Additional powers as receiver.--The 
                Agency may, as receiver, place the regulated 
                entity in liquidation and proceed to realize 
                upon the assets of the regulated entity, having 
                due regard to the conditions of the housing 
                finance market.
                  ``(F) Organization of new regulated 
                entities.--The Agency may, as receiver, 
                organize a successor regulated entity that will 
                operate pursuant to subsection (i).
                  ``(G) Transfer of assets and liabilities.--
                The Agency may, as conservator or receiver, 
                transfer any asset or liability of the 
                regulated entity in default without any 
                approval, assignment, or consent with respect 
                to such transfer. Any Federal home loan bank 
                may, with the approval of the Agency, acquire 
                the assets of any Bank in conservatorship or 
                receivership, and assume the liabilities of 
                such Bank.
                  ``(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 in 
                accordance with the prescriptions and 
                limitations of this section.
                  ``(I) Subpoena authority.--
                          ``(i) In general.--
                                  ``(I) In general.--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 
                                exercised under this 
                                subparagraph in the same manner 
                                as such provisions apply under 
                                that section.
                          ``(ii) Authority of director.--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 1379D.
                  ``(J) Contracting for services.--The Agency 
                may, as conservator or receiver, provide by 
                contract for the carrying out of any of its 
                functions, activities, actions, or duties as 
                conservator or receiver.
                  ``(K) 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.
          ``(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 
                        publication of such notice; and
                          ``(ii) republish such notice 
                        approximately 1 month and 2 months, 
                        respectively, after the 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 notification 
                        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), or the 
                date specified in the notice required under 
                paragraph (3)(C), which is proved to the 
                satisfaction of the receiver.
                  ``(C) Disallowance of claims filed after end 
                of 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 any extension of credit from any 
                        Federal Reserve Bank, Federal home loan 
                        bank, or the Treasury of the United 
                        States.
                  ``(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. This 
                subparagraph shall not affect the authority of 
                a claimant to obtain de novo judicial review of 
                a claim pursuant to paragraph (6).
                  ``(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, 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 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 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 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 
                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 official of the 
                regulated entity, except that such requirements 
                for qualified financial contracts shall be 
                applied in a manner consistent with reasonable 
                business trading practices in the financial 
                contracts market.
                  ``(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 
                regulated entities 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 any 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 
                shall--
                          ``(i) have all 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) 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.
                  ``(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 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 
                maintains stability in the housing finance 
                markets and, to the extent consistent with that 
                goal--
                          ``(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 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 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 subparagraph (B) 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 
                limitation applicable under State law.
                  ``(B) Claims described.--A tort claim 
                referred to under subparagraph (A) 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 
                that 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 a regulated entity-affiliated 
                party, or any person who the conservator or 
                receiver determines is 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 regulated 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 Agency or such conservator 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 receiver or conservator.--
                  ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages 
                entered against a receiver or conservator for 
                the breach of an agreement executed or approved 
                in writing by such receiver or conservator 
                after the date of its appointment, shall be 
                paid as an administrative expense of the 
                receiver or conservator.
                  ``(B) No limitation of power.--Nothing in 
                this paragraph shall be construed to limit the 
                power of a receiver or conservator 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 a 
                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 persons other than 
                        the regulated entity shall not be 
                        available to satisfy the claims of 
                        creditors generally.
                          ``(ii) Holding of mortgages.--Any 
                        mortgage, pool of mortgages, or 
                        interest in a pool of mortgages, 
                        described under 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 a 
                        pool of mortgages in accordance with 
                        the terms of the agreement creating 
                        such trust, custodial, or other agency 
                        arrangement.
                          ``(iii) Liability of receiver.--The 
                        liability of a 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 set 
                        forth in the regulations of the 
                        Director.
  ``(c) Priority of Expenses and Unsecured Claims.--
          ``(1) In general.--Unsecured claims against a 
        regulated entity, or a receiver, 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 and claims of other 
                Federal home loan banks arising from their 
                payment obligations (including joint and 
                several payment obligations).
                  ``(C) Any obligation subordinated to general 
                creditors.
                  ``(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 Agency 
        may make such other payments to creditors necessary to 
        maximize the present value return from the sale or 
        disposition or such regulated entity's assets or to 
        minimize the amount of any loss realized in the 
        resolution of cases so long as all creditors similarly 
        situated receive not less than the amount provided 
        under subsection (e)(2).
          ``(3) Definition.--The term `administrative expenses 
        of the receiver' shall include the actual, necessary 
        costs and expenses incurred by the receiver in 
        preserving the assets of the regulated entity or 
        liquidating or otherwise resolving the affairs of the 
        regulated entity. Such expenses shall include 
        obligations that are incurred by the receiver after 
        appointment as receiver that the Director 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--
                                  ``(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 such subparagraph--
                          ``(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 such 
                subparagraph--
                          ``(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) Provisions applicable to 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 the 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 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 any 
                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 
                Act, any other Federal law, or the law of any 
                State, 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 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 
                        described in clause (i); 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.--
                Paragraph (10) of subsection (b) 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 Federal or 
                        State laws 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:
                          ``(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 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' (which 
                        definition also applies to 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 the Securities 
                                Exchange Act of 1934), mortgage 
                                loans, interests in mortgage-
                                related securities or mortgage 
                                loans, eligible bankers' 
                                acceptances, qualified foreign 
                                government securities 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.
                        For purposes of this clause, the term 
                        `qualified foreign government security' 
                        means 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).
                          ``(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.
                        Such term is 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 swap 
                        agreement under any other statute, 
                        regulation, or rule, including the 
                        Securities Act of 1933, the Securities 
                        Exchange Act of 1934, the Public 
                        Utility Holding Company Act of 1935, 
                        the Trust Indenture Act of 1939, the 
                        Investment Company Act of 1940, the 
                        Investment Advisers Act of 1940, the 
                        Securities Investor Protection Act of 
                        1970, the Commodity Exchange Act, the 
                        Gramm-Leach-Bliley Act, and the Legal 
                        Certainty for Bank Products Act of 
                        2000.
                          ``(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 
                        regulated entity's equity of 
                        redemption.
                  ``(E) Certain protections in event of 
                appointment of conservator.--Notwithstanding 
                any other provision of this Act (other than 
                paragraph (13) of this subsection), any other 
                Federal law, or the law of any State, 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 one 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) of this subsection or 
                to disaffirm or repudiate any such contract in 
                accordance with subsection (d)(1) of this 
                section.
                  ``(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 such party's 
                        status 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.--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) the transfer includes any 
                        qualified financial contract,
                the conservator or receiver shall notify any 
                person who is a party to any such contract of 
                such transfer by 5:00 p.m. (eastern 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.
                  ``(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 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 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 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 Agency as receiver or 
                        conservator 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 Agency 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 a conservator 
                or receiver, the conservator or receiver may 
                enforce any contract or 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 director's or officer's liability 
                insurance contract or surety 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 paragraph 
                        shall--
                                  ``(I) not apply to a 
                                director's or officer's 
                                liability insurance contract;
                                  ``(II) not apply to the 
                                rights of parties to any 
                                qualified financial contracts 
                                under subsection (d)(8); and
                                  ``(III) not 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 equal the lesser of--
                  ``(A) the amount such claimant would have 
                received if the Agency had liquidated the 
                assets and liabilities of such regulated entity 
                without exercising the authority of the Agency 
                under subsection (i) of this section; or
                  ``(B) the amount of proceeds realized from 
                the performance of contracts or sale of the 
                assets of the regulated entity.
  ``(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 by, on behalf of, 
        or at the request or direction of the Agency, which 
        action is 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,
        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.
          ``(2) No limitation.--Nothing in this paragraph 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.--If a regulated entity is in 
                default, or if the Agency anticipates that a 
                regulated entity will default, the Agency may 
                organize a limited-life regulated entity with 
                those powers and attributes of the regulated 
                entity in default or in danger of default that 
                the Director determines necessary, subject to 
                the provisions of this subsection. The Director 
                shall grant a temporary charter to the limited-
                life regulated entity, and the limited-life 
                regulated entity shall operate subject to that 
                charter.
                  ``(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, provided that the 
                        liabilities assumed shall not exceed 
                        the amount of assets of 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.--
                  ``(A) Conditions.--The Agency may grant a 
                temporary charter if the Agency determines that 
                the continued operation of the regulated entity 
                in default or in danger of default is in the 
                best interest of the national economy and the 
                housing markets.
                  ``(B) Treatment 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.
                  ``(C) Management.--A limited-life regulated 
                entity, upon the granting of its charter, 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.
                  ``(D) 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.--No capital stock need be paid 
        into a limited-life regulated entity by the Agency.
          ``(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 status.--Notwithstanding any other 
        provision of Federal or State law, the 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 subparagraph 
                (B), unless Congress authorizes the sale of the 
                capital stock of the limited-life regulated 
                entity, not later than 2 years after the date 
                of its organization, the Agency shall wind up 
                the affairs of the limited-life regulated 
                entity.
                  ``(B) Extension.--The Director may, in the 
                discretion of the Director, extend the status 
                of the limited-life regulated entity for 3 
                additional 1-year periods.
          ``(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 
                        paragraph (1).
                          ``(ii) Subsequent transfers.--At any 
                        time after a charter is transferred to 
                        a limited-life regulated entity, the 
                        Agency, as receiver, may transfer any 
                        assets and liabilities of such 
                        regulated entity in default, or in 
                        danger in default, as the Agency may, 
                        in its discretion, determine to be 
                        appropriate in accordance with 
                        paragraph (1).
                          ``(iii) Effective without approval.--
                        The transfer of any assets or 
                        liabilities of a regulated entity in 
                        default, or in danger of default, 
                        transferred to a limited-life regulated 
                        entity shall be effective without any 
                        further approval under Federal or State 
                        law, assignment, or consent with 
                        respect thereto.
          ``(8) Proceeds.--To the extent that available 
        proceeds from the limited-life regulated entity exceed 
        amounts required to pay obligations, such proceeds may 
        be paid to the regulated entity in default, or in 
        danger of default.
          ``(9) Powers.--
                  ``(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; and
                                  ``(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;
                          ``(ii) the Agency may 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
                          ``(iii) 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 up to 
                45 days at the request of the limited-life 
                regulated entity. Such period may be modified 
                upon the consent of all parties.
          ``(10) Obtaining of credit and incurring of debt.--
                  ``(A) In general.--The limited-life regulated 
                entity may obtain unsecured credit and incur 
                unsecured debt in the ordinary course of 
                business.
                  ``(B) Inability to obtain credit.--If the 
                limited-life regulated entity is unable to 
                obtain unsecured credit the Director may 
                authorize the obtaining of credit or the 
                incurring of debt--
                          ``(i) with priority over any or all 
                        administrative expenses;
                          ``(ii) secured by a lien on property 
                        that is not otherwise subject to a 
                        lien; or
                          ``(iii) secured by a junior lien on 
                        property 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 incurring of debt secured by a 
                        senior or equal lien on property that 
                        is subject to a lien (other than 
                        mortgages that collateralize the 
                        mortgage-backed securities issued or 
                        guaranteed by the regulated entity) 
                        only if--
                                  ``(I) the limited-life 
                                regulated entity is unable to 
                                obtain such credit otherwise; 
                                and
                                  ``(II) there is adequate 
                                protection of the interest of 
                                the holder of the lien on the 
                                property which such senior or 
                                equal lien is proposed to be 
                                granted.
                          ``(ii) Burden of proof.--In any 
                        hearing under this subsection, the 
                        Director has the burden of proof on the 
                        issue of adequate protection.
                  ``(D) Effect on debts and liens.--The 
                reversal or modification on appeal of an 
                authorization under this paragraph to obtain 
                credit or incur debt, or of a grant under this 
                section of a priority or a lien, does not 
                affect the validity of any debt so incurred, 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 incurring of such debt, or the granting of 
                such priority or lien, were stayed pending 
                appeal.
          ``(11) Issuance of preferred debt.--A limited-life 
        regulated entity may, subject to the approval of the 
        Director and subject to such terms and conditions as 
        the Director may prescribe, issue notes, bonds, or 
        other debt obligations of a class to which all other 
        debt obligations of the limited-life regulated entity 
        shall be subordinate in right and payment.
          ``(12) 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.
          ``(13) Additional powers.--In addition to any other 
        powers granted under this subsection, a limited-life 
        regulated entity may--
                  ``(A) extend a maturity date or change in an 
                interest rate or other term of outstanding 
                securities;
                  ``(B) issue securities of the limited-life 
                regulated entity, for cash, for property, for 
                existing securities, or in exchange for claims 
                or interests, or for any other appropriate 
                purposes; and
                  ``(C) take any other action not inconsistent 
                with this section.
  ``(j) Other Exemptions.--When acting as a receiver, the 
following provisions shall apply with respect to the Agency:
          ``(1) Exemption from taxation.--The Agency, including 
        its franchise, its capital, reserves, and surplus, and 
        its income, shall be exempt from all taxation imposed 
        by any State, country, 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.
          ``(2) Exemption from attachment and liens.--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.
          ``(3) Exemption from 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 a 
receiver appointed pursuant to this section revoke, annul, or 
terminate the charter of a regulated entity.
  ``(l) Preservation of Bankruptcy Law .--Nothing in this Act 
shall be construed to modify, impair, or supersede the 
operation of any provision of title 11 of the United States 
Code, or the operation of any provision of title 28 of such 
Code that relates to cases under such title 11, except as 
otherwise provided in section 1367(b) of this Act and except 
that a regulated entity may not be a debtor under such title 
11.''.
  (b) Conforming Amendments.--
          (1) Housing and community development act of 1992.--
        Subtitle B of title XIII of the Housing and Community 
        Development Act of 1992 is amended by striking sections 
        1369 (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 
        1369B (12 U.S.C. 4621).
          (2) Federal home loan banks.--Section 25 of the 
        Federal Home Loan Bank Act (12 U.S.C. 1445) is amended 
        to read as follows:

``SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS.

  ``Each Federal Home Loan Bank shall have succession until it 
is voluntarily merged with another Bank under this Act, or 
until it is merged, reorganized, rehabilitated, liquidated, or 
otherwise wound up by the Director in accordance with the 
provisions of section 1367 of the Housing and Community 
Development Act of 1992, or by further Act of Congress.''.

SEC. 349. CONFORMING AMENDMENTS.

  Title XIII of the Housing and Community Development Act of 
1992, as amended by the preceding provisions of this title, is 
further amended--
          (1) in sections 1365 (12 U.S.C. 4615) through 1369D 
        (12 U.S.C. 4623), but not including section 1367 (12 
        U.S.C. 4617) as amended by section 349 of this title--
                  (A) by striking ``An enterprise'' each place 
                such term appears and inserting ``A regulated 
                entity'';
                  (B) by striking ``an enterprise'' each place 
                such term appears and inserting ``a regulated 
                entity''; and
                  (C) by striking ``the enterprise'' each place 
                such term appears and inserting ``the regulated 
                entity'';
          (2) in section 1366 (12 U.S.C. 4616)--
                  (A) in subsection (b)(7), by striking 
                ``section 1369 (excluding subsection (a)(1) and 
                (2))'' and inserting ``section 1367''; and
                  (B) in subsection (d), by striking ``the 
                enterprises'' and inserting ``the regulated 
                entities'';
          (3) in section 1368(d) (12 U.S.C. 4618(d)), by 
        striking ``Committee on Banking, Finance and Urban 
        Affairs'' and inserting ``Committee on Financial 
        Services'';
          (4) in section 1369C (12 U.S.C. 4622)--
                  (A) in subsection (a)(4), by striking 
                ``activities (including existing and new 
                programs)'' and inserting ``activities, 
                services, undertakings, and offerings 
                (including existing and new products (as such 
                term is defined in section 1321(f))''; and
                  (B) in subsection (c), by striking ``any 
                enterprise'' and inserting ``any regulated 
                entity''; and
          (5) in subsections (a) and (d) of section 1369D, by 
        striking ``section 1366 or 1367 or action under section 
        1369)'' each place such phrase appears and inserting 
        ``section 1367)''.

                     CHAPTER 4--ENFORCEMENT ACTIONS


SEC. 351. CEASE-AND-DESIST PROCEEDINGS.

  Section 1371 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4631) is amended--
          (1) by striking subsections (a) and (b) and inserting 
        the following new subsections:
  ``(a) Issuance for Unsafe or Unsound Practices and Violations 
of Rules or Laws.--If, in the opinion of the Director, a 
regulated entity or any regulated entity-affiliated party is 
engaging or has engaged, or the Director has reasonable cause 
to believe that the regulated entity or any regulated entity-
affiliated party is about to engage, in an unsafe or unsound 
practice in conducting the business of the regulated entity or 
is violating or has violated, or the Director has reasonable 
cause to believe that the regulated entity or any regulated 
entity-affiliated party is about to violate, a law, rule, or 
regulation, 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 any written agreement 
entered into with the Director, the Director may issue and 
serve upon the regulated entity or such party a notice of 
charges in respect thereof. 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 this subsection.'';
          (2) in subsection (c)(2), by striking ``enterprise, 
        executive officer, or director'' and inserting 
        ``regulated entity or regulated entity-affiliated 
        party''; and
          (3) in subsection (d)--
                  (A) in the matter preceding paragraph (1), by 
                striking ``enterprise, executive officer, or 
                director'' and inserting ``regulated entity or 
                regulated entity-affiliated party'';
                  (B) in paragraph (1)--
                          (i) by striking ``an executive 
                        officer or a director'' and inserting 
                        ``a regulated entity affiliated 
                        party''; and
                          (ii) by inserting ``(including 
                        reimbursement of compensation under 
                        section 1318)'' after 
                        ``reimbursement'';
                  (C) in paragraph (6), by striking ``and'' at 
                the end;
                  (D) by redesignating paragraph (7) as 
                paragraph (8); and
                  (E) by inserting after paragraph (6) the 
                following new paragraph:
          ``(7) to effect an attachment on a regulated entity 
        or regulated entity-affiliated party subject to an 
        order under this section or section 1372; and''.

SEC. 352. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

  Section 1372 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4632) is amended--
          (1) by striking subsection (a) and inserting the 
        following new subsection:
  ``(a) Grounds for Issuance.--Whenever the Director determines 
that the violation or threatened violation or the unsafe or 
unsound practice or practices specified in the notice of 
charges served upon the regulated entity or any regulated 
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 the regulated 
entity, or is likely to weaken the condition of the regulated 
entity prior to the completion of the proceedings conducted 
pursuant to sections 1371 and 1373, the Director may issue a 
temporary order requiring the regulated entity or such party to 
cease and desist from any such violation or practice and to 
take affirmative action to prevent or remedy such insolvency, 
dissipation, condition, or prejudice pending completion of such 
proceedings. Such order may include any requirement authorized 
under section 1371(d).'';
          (2) in subsection (b), by striking ``enterprise, 
        executive officer, or director'' and inserting 
        ``regulated entity or regulated entity-affiliated 
        party'';
          (3) in subsection (d)--
                  (A) by striking ``An enterprise, executive 
                officer, or director'' and inserting ``A 
                regulated entity or regulated entity-affiliated 
                party''; and
                  (B) by striking ``the enterprise, executive 
                officer, or director'' and inserting ``the 
                regulated entity or regulated entity-affiliated 
                party''; and
          (4) by striking subsection (e) and in inserting the 
        following new subsection:
  ``(e) Enforcement.--In the case of violation or threatened 
violation of, or failure to obey, a temporary cease-and-desist 
order issued pursuant to this section, the Director may 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 an injunction to enforce such order, and, if 
the court determines that there has been such violation or 
threatened violation or failure to obey, it shall be the duty 
of the court to issue such injunction.''.

SEC. 353. PREJUDGMENT ATTACHMENT.

  The Housing and Community Development Act of 1992 is amended 
by inserting after section 1375 (12 U.S.C. 4635) the following 
new section:

``SEC. 1375A. PREJUDGMENT ATTACHMENT.

  ``(a) In General.--In any action brought pursuant to this 
title, or in actions brought in aid of, or to enforce an order 
in, any administrative or other civil action for money damages, 
restitution, or civil money penalties brought pursuant to this 
title, the court may, upon application of the Director or 
Attorney General, as applicable, issue a restraining order 
that--
          ``(1) prohibits any person subject to the proceeding 
        from withdrawing, transferring, removing, dissipating, 
        or disposing of any funds, assets or other property; 
        and
          ``(2) appoints a person on a temporary basis to 
        administer the restraining order.
  ``(b) Standard.--
          ``(1) Showing.--Rule 65 of the Federal Rules of Civil 
        Procedure shall apply with respect to any proceeding 
        under subsection (a) without regard to the requirement 
        of such rule that the applicant show that the injury, 
        loss, or damage is irreparable and immediate.
          ``(2) State proceeding.--If, in the case of any 
        proceeding in a State court, the court determines that 
        rules of civil procedure available under the laws of 
        such State provide substantially similar protections to 
        a party's right to due process as Rule 65 (as modified 
        with respect to such proceeding by paragraph (1)), the 
        relief sought under subsection (a) may be requested 
        under the laws of such State.''.

SEC. 354. ENFORCEMENT AND JURISDICTION.

  Section 1375 of the Housing and Community Development 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 ``1376, or 1377''.

SEC. 355. CIVIL MONEY PENALTIES.

  Section 1376 of the Housing and Community Development Act of 
1992 (12 U.S.C. 4636) is amended--
          (1) in subsection (a)--
                  (A) in the matter preceding paragraph (1), by 
                striking ``, or any executive officer or 
                director'' and inserting ``or any regulated-
                entity affiliated party''; and
                  (B) in paragraph (1)--
                          (i) by striking ``the Federal 
                        National Mortgage Association Charter 
                        Act, the Federal Home Loan Mortgage 
                        Corporation Act'' and inserting ``any 
                        provision of any of the authorizing 
                        statutes'';
                          (ii) by striking ``or Act'' and 
                        inserting ``or statute'';
                          (iii) by striking ``or subsection'' 
                        and inserting ``, subsection''; and
                          (iv) by inserting ``, or paragraph 
                        (5) or (12) of section 10(j) of the 
                        Federal Home Loan Bank Act'' before the 
                        semicolon at the end;
          (2) by striking subsection (b) and inserting the 
        following new subsection:
  ``(b) Amount of Penalty.--
          ``(1) First tier.--Any regulated entity which, or any 
        regulated entity-affiliated party who--
                  ``(A) violates any provision of this title, 
                any provision of any of the authorizing 
                statutes, or any order, condition, rule, or 
                regulation under any such title or statute, 
                except that 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) or (12) of 
                section 10(j) of the Federal Home Loan Bank 
                Act;
                  ``(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,
        shall forfeit and pay a civil money penalty of not more 
        than $10,000 for each day during which such violation 
        continues.
          ``(2) Second tier.--Notwithstanding paragraph (1)--
                  ``(A) if a regulated entity, or a regulated 
                entity-affiliated party--
                          ``(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 such 
                        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 such 
                        regulated entity; or
                          ``(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.
          ``(3) Third tier.--Notwithstanding paragraphs (1) and 
        (2), any regulated entity which, or any regulated 
        entity-affiliated party who--
                  ``(A) knowingly--
                          ``(i) commits any violation or 
                        engages in any conduct described in any 
                        subparagraph of paragraph (1);
                          ``(ii) engages in any unsafe or 
                        unsound practice in conducting the 
                        affairs of such regulated entity; or
                          ``(iii) breaches any fiduciary duty; 
                        and
                  ``(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.
          ``(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 such paragraph is--
                  ``(A) in the case of any person other than a 
                regulated entity, an amount not to exceed 
                $2,000,000; and
                  ``(B) in the case of any regulated entity, 
                $2,000,000.'';
          (3) in subsection (c)(1)(B), by striking 
        ``enterprise, executive officer, or director'' and 
        inserting ``regulated entity or regulated entity-
        affiliated party'';
          (4) in subsection (d), by striking the first sentence 
        and inserting the following: ``If a regulated entity or 
        regulated entity-affiliated party fails to comply with 
        an order of the Director imposing a civil money penalty 
        under this section, after the order is no longer 
        subject to review as provided under subsection (c)(1) 
        and section 1374, the Director may, in the discretion 
        of the Director, bring an action in 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, to obtain a monetary judgment against the 
        regulated entity or regulated entity affiliated party 
        and such other relief as may be available, or request 
        that the Attorney General of the United States bring 
        such an action.''; and
          (5) in subsection (g), by striking ``subsection 
        (b)(3)'' and inserting ``this section, unless 
        authorized by the Director by rule, regulation, or 
        order''.

SEC. 356. REMOVAL AND PROHIBITION AUTHORITY.

  (a) In General.--Subtitle C of title XIII of the Housing and 
Community Development Act of 1992 is amended--
          (1) by redesignating sections 1377, 1378, 1379, 
        1379A, and 1379B (12 U.S.C. 4637-41) as sections 1379, 
        1379A, 1379B, 1379C, and 1379D, respectively; and
          (2) by inserting after section 1376 (12 U.S.C. 4636) 
        the following new section:

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

  ``(a) Authority To Issue Order.--Whenever the Director 
determines that--
          ``(1) any regulated entity-affiliated party has, 
        directly or indirectly--
                  ``(A) 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;
                  ``(B) engaged or participated in any unsafe 
                or unsound practice in connection with any 
                regulated entity; or
                  ``(C) committed or engaged in any act, 
                omission, or practice which constitutes a 
                breach of such party's fiduciary duty;
          ``(2) by reason of the violation, practice, or breach 
        described in any subparagraph of paragraph (1)--
                  ``(A) such regulated entity has suffered or 
                will probably suffer financial loss or other 
                damage; or
                  ``(B) such party has received financial gain 
                or other benefit by reason of such violation, 
                practice, or breach; and
          ``(3) such violation, practice, or breach--
                  ``(A) involves personal dishonesty on the 
                part of such party; or
                  ``(B) demonstrates willful or continuing 
                disregard by such party for the safety or 
                soundness of such regulated entity, the 
                Director may serve upon such party a written 
                notice of the Director's intention to remove 
                such party from office or to prohibit any 
                further participation by such party, in any 
                manner, in the conduct of the affairs of any 
                regulated entity.
  ``(b) Suspension Order.--
          ``(1) Suspension or prohibition authority.--If the 
        Director serves written notice under subsection (a) to 
        any regulated entity-affiliated party of the Director's 
        intention to issue an order under such subsection, the 
        Director may--
                  ``(A) suspend 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--
                          ``(i) determines that such action is 
                        necessary for the protection of the 
                        regulated entity; and
                          ``(ii) serves such party with written 
                        notice of the suspension order; and
                  ``(B) prohibit the regulated entity from 
                releasing to or on behalf of the regulated 
                entity-affiliated party any compensation or 
                other payment of money or other thing of 
                current or potential value in connection with 
                any resignation, removal, retirement, or other 
                termination of employment or office of the 
                party.
          ``(2) Effective period.--Any suspension 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) of this section, 
                shall remain in effect and enforceable until--
                          ``(i) the date 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 by the Director to such party 
                        under subsection (a).
          ``(3) Copy of order.--If the Director issues a 
        suspension order under this subsection to any regulated 
        entity-affiliated 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.--A notice of intention to 
remove a regulated entity-affiliated party from office or to 
prohibit such party from participating in the conduct of the 
affairs of a regulated entity 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. 
Such hearing shall be fixed for a date not earlier than 30 days 
nor later than 60 days after the date of service of such 
notice, unless an earlier or a later date is set by the 
Director at the request of (1) such party, and for good cause 
shown, or (2) the Attorney General of the United States. Unless 
such party shall appear 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 of such removal or 
prohibition. In the event of such consent, or if upon the 
record made at any such hearing the Director shall find that 
any of the grounds specified in such notice have been 
established, the Director may issue such orders of suspension 
or removal from office, or prohibition from participation in 
the conduct of the affairs of the regulated entity, as it may 
deem appropriate, together with an order prohibiting 
compensation described in subsection (b)(1)(B). Any such order 
shall become effective at the expiration of 30 days after 
service upon such regulated entity and such party (except in 
the case of an order issued upon consent, 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;
          ``(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 a 
        regulated entity-affiliated party.
  ``(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 prohibited from participating 
        in the conduct of the affairs of a regulated entity 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.
          ``(2) Exception if director provides written 
        consent.--If, on or after the date an order is issued 
        under this section which removes or suspends from 
        office any regulated entity-affiliated party or 
        prohibits such party from participating in the conduct 
        of the affairs of a regulated entity, 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 
        described in the written consent. If the Director 
        grants such a written consent, it shall publicly 
        disclose such consent.
          ``(3) Violation of paragraph (1) treated as violation 
        of order.--Any violation of paragraph (1) by any person 
        who is subject to an order described in such subsection 
        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 enterprise.
  ``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-
affiliated party has been suspended from office and/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 and/or prohibition and any 
prohibition under subsection (b)(1)(B) pending the completion 
of the administrative proceedings pursuant to the notice served 
upon such party under this section, and such court shall have 
jurisdiction to stay such suspension and/or prohibition.
  ``(h) Suspension or Removal of Regulated Entity-Affiliated 
Party Charged With Felony.--
          ``(1) Suspension or prohibition.--
                  ``(A) In general.--Whenever any regulated 
                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 one year under State or Federal 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--
                          ``(i) 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; and
                          ``(ii) prohibit the regulated entity 
                        from releasing to or on behalf of the 
                        regulated entity-affiliated party any 
                        compensation or other payment of money 
                        or other thing of current or potential 
                        value in connection with the period of 
                        any such suspension or with any 
                        resignation, removal, retirement, or 
                        other termination of employment or 
                        office of the party.
                  ``(B) Provisions applicable to notice.--
                          ``(i) Copy.--A copy of any notice 
                        under paragraph (1)(A) shall also be 
                        served upon the 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 such 
                        subparagraph 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 a regulated 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 that--
                          ``(i) removes such party from office 
                        or prohibits 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; and
                          ``(ii) prohibits the regulated entity 
                        from releasing to or on behalf of the 
                        regulated entity-affiliated party any 
                        compensation or other payment of money 
                        or other thing of current or potential 
                        value in connection with the 
                        termination of employment or office of 
                        the party.
                  ``(B) Provisions applicable to order.--
                          ``(i) Copy.--A copy of any order 
                        under paragraph (2)(A) shall also be 
                        served upon the regulated entity, 
                        whereupon the regulated 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 such party from 
                        office or to prohibit further 
                        participation in regulated entity 
                        affairs, and to prohibit compensation 
                        or other payment of money or other 
                        thing of current or potential value in 
                        connection with any resignation, 
                        removal, retirement, or other 
                        termination of employment or office of 
                        the party, pursuant to subsections (a), 
                        (d), or (e) of this section.
                          ``(iii) Effective period.--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) unless 
                        terminated by the Director.
          ``(3) Authority of remaining board members.--If at 
        any time, because of the suspension of one 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. In the 
        event all of the directors of a regulated entity are 
        suspended pursuant to this section, the Director shall 
        appoint persons to serve temporarily as directors in 
        their place and stead 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.--
        Within 30 days from service of any notice of suspension 
        or order of removal issued pursuant to paragraph (1) or 
        (2) of this subsection, the regulated entity-affiliated 
        party concerned may request in writing an opportunity 
        to appear before the Director to show that the 
        continued service to 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. Upon receipt 
        of any such request, the Director shall fix a time (not 
        more than 30 days after receipt of such request, unless 
        extended at the request of such party) and place at 
        which such party may appear, personally or through 
        counsel, before one or more members of the Director or 
        designated employees of the Director to submit written 
        materials (or, at the discretion of the Director, oral 
        testimony) and oral argument. Within 60 days of such 
        hearing, the Director shall notify such 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, and prohibiting 
        compensation in connection with termination will be 
        rescinded or otherwise modified. Such notification 
        shall contain a statement of the basis for the 
        Director's decision, if adverse to such party. The 
        Director is authorized to prescribe such rules as may 
        be necessary to effectuate the purposes of this 
        subsection.
  ``(i) Hearings and Judicial Review.--
          ``(1) Venue and procedure.--Any hearing provided for 
        in this section shall be held in the District of 
        Columbia or in the Federal judicial district in which 
        the headquarters of the regulated entity is located, 
        unless the party afforded the hearing consents to 
        another place, and shall be conducted in accordance 
        with the provisions of chapter 5 of title 5, United 
        States Code. After such hearing, and within 90 days 
        after the Director has notified the parties that the 
        case has been submitted to it for final decision, it 
        shall render its decision (which shall include findings 
        of fact upon which its decision is predicated) and 
        shall issue and serve upon each party to the proceeding 
        an order or orders consistent with the provisions of 
        this section. Judicial review of any such order shall 
        be exclusively as provided in this subsection. Unless a 
        petition for review is timely filed in a court of 
        appeals of the United States, as provided in paragraph 
        (2), and thereafter until the record in the proceeding 
        has been filed as so provided, the Director may at any 
        time, upon such notice and in such manner as it shall 
        deem proper, modify, terminate, or set aside any such 
        order. Upon such filing of the record, the Director may 
        modify, terminate, or set aside any such order with 
        permission of the court.
          ``(2) Review of order.--Any party to any proceeding 
        under paragraph (1) may obtain a review of any order 
        served pursuant to paragraph (1) (other than an order 
        issued with the consent of the regulated entity or the 
        regulated entity-affiliated party concerned, or an 
        order issued under subsection (h) of this section) by 
        the filing in the United States Court of Appeals for 
        the District of Columbia Circuit or court of appeals of 
        the United States for the circuit in which the 
        headquarters of the regulated entity is located, within 
        30 days after the date of service of such order, a 
        written petition praying that the order of the Director 
        be modified, terminated, or set aside. A copy of such 
        petition shall be forthwith transmitted by the clerk of 
        the court to the Director, and thereupon the Director 
        shall file in the court the record in the proceeding, 
        as provided in section 2112 of title 28, United States 
        Code. Upon the filing of such petition, such court 
        shall have jurisdiction, which upon the filing of the 
        record shall (except as provided in the last sentence 
        of paragraph (1)) be exclusive, to affirm, modify, 
        terminate, or set aside, in whole or in part, the order 
        of the Director. Review of such proceedings shall be 
        had as provided in chapter 7 of title 5, United States 
        Code. The judgment and decree of the court shall be 
        final, except that the same shall be subject to review 
        by the Supreme Court upon certiorari, as provided in 
        section 1254 of title 28, United States Code.
          ``(3) Proceedings not treated as stay.--The 
        commencement of proceedings for judicial review under 
        paragraph (2) shall not, unless specifically ordered by 
        the court, operate as a stay of any order issued by the 
        Director.''.
  (b) Conforming Amendments.--
          (1) 1992 act.--Section 1317(f) of the Housing and 
        Community Development Act of 1992 (12 U.S.C. 4517(f)) 
        is amended by striking ``section 1379B'' and inserting 
        ``section 1379D''.
          (2) Fannie mae charter act.--The second sentence of 
        subsection (b) of section 308 of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
        amended by striking ``The'' and inserting ``Except to 
        the extent that action under section 1377 of the 
        Housing and Community Development Act of 1992 
        temporarily results in a lesser number, the''.
          (3) Freddie mac act.--The second sentence of 
        subparagraph (A) of section 303(a)(2) of the Federal 
        Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2)(A)) is amended by striking ``The'' and 
        inserting ``Except to the extent that action under 
        section 1377 of the Housing and Community Development 
        Act of 1992 temporarily results in a lesser number, 
        the''.

SEC. 357. CRIMINAL PENALTY.

  Subtitle C of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4631 et seq.) is amended by 
inserting after section 1377 (as added by the preceding 
provisions of this title) the following new section:

``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 be fined not more than $1,000,000, 
imprisoned for not more than 5 years, or both.''.

SEC. 358. SUBPOENA AUTHORITY.

  Section 1379D(c) of the Housing and Community Development Act 
of 1992 (12 U.S.C. 4641(c)), as so redesignated by section 
356(a)(1) of this title, is further amended--
          (1) by striking ``request the Attorney General of the 
        United States to'' and inserting ``, in the discretion 
        of the Director,'';
          (2) by inserting ``or request that the Attorney 
        General of the United States bring such an action,'' 
        after ``District of Columbia,''; and
          (3) by striking ``or may, under the direction and 
        control of the Attorney General, bring such an 
        action''.

SEC. 359. CONFORMING AMENDMENTS.

  Subtitle C of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4631 et seq.), as amended by 
the preceding provisions of this title, is amended--
          (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by 
        striking ``that enterprise'' and inserting ``that 
        regulated entity'';
          (2) in section 1379 (12 U.S.C. 4637), as so 
        redesignated by section 356(a)(1) of this title--
                  (A) by inserting ``, or of a regulated 
                entity-affiliated party,'' before ``shall not 
                affect''; and
                  (B) by striking ``such director or executive 
                officer'' each place such term appears and 
                inserting ``such director, executive officer, 
                or regulated entity-affiliated party'';
          (3) in section 1379A (12 U.S.C. 4638), as so 
        redesignated by section 356(a)(1) of this title, by 
        inserting ``or against a regulated entity-affiliated 
        party,'' before ``or impair'';
          (4) by striking ``An enterprise'' each place such 
        term appears in such subtitle and inserting ``A 
        regulated entity'';
          (5) by striking ``an enterprise'' each place such 
        term appears in such subtitle and inserting ``a 
        regulated entity'';
          (6) by striking ``the enterprise'' each place such 
        term appears in such subtitle and inserting ``the 
        regulated entity''; and
          (7) by striking ``any enterprise'' each place such 
        term appears in such subtitle and inserting ``any 
        regulated entity''.

                     CHAPTER 5--GENERAL PROVISIONS


SEC. 361. BOARDS 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 365 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 365 occurs.

SEC. 362. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND SOUNDNESS, AND 
                    MISSION OF ENTERPRISES.

  Not later than the expiration of the 12-month period 
beginning on the effective date under section 365, the Director 
of the Federal Housing Finance Agency shall submit a report to 
the Congress which shall include--
          (1) a description of the portfolio holdings of the 
        enterprises (as such term is defined in section 1303 of 
        the Housing and Community Development Act of 1992 (12 
        U.S.C. 4502) in mortgages (including whole loans and 
        mortgage-backed securities), non-mortgages, and other 
        assets;
          (2) a description of the risk implications for the 
        enterprises of such holdings and the consequent risk 
        management undertaken by the enterprises (including the 
        use of derivatives for hedging purposes), compared with 
        off-balance sheet liabilities of the enterprises 
        (including mortgage-backed securities guaranteed by the 
        enterprises);
          (3) an analysis of portfolio holdings for safety and 
        soundness purposes;
          (4) an assessment of whether portfolio holdings 
        fulfill the mission purposes of the enterprises under 
        the Federal National Mortgage Association Charter Act 
        and the Federal Home Loan Mortgage Corporation Act; and
          (5) an analysis of the potential systemic risk 
        implications for the enterprises, the housing and 
        capital markets, and the financial system of portfolio 
        holdings, and whether such holdings should be limited 
        or reduced over time.

SEC. 363. CONFORMING AND TECHNICAL AMENDMENTS.

  (a) 1992 Act.--Title XIII of the Housing and Community 
Development Act of 1992 is amended by striking section 1383 (12 
U.S.C. 1451 note).
  (b) 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''.
  (c) 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''.
  (d) 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).
  (e) Title 5, United States Code.--
          (1) Director's pay rate.--Section 5313 of title 5, 
        United States Code, is amended 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.''.
          (2) Exclusion from senior executive service.--Section 
        3132(a)(1)(D) of title 5, United States Code, is 
        amended--
                  (A) by striking ``the Federal Housing Finance 
                Board,''; and
                  (B) by striking ``the Office of Federal 
                Housing Enterprise Oversight of the Department 
                of Housing and Urban Development'' and 
                inserting ``the Federal Housing Finance 
                Agency''.
  (f) Inspector General Act of 1978.--Section 8G(a)(2) of the 
Inspector General Act of 1978 (5 U.S.C. App.) is amended by 
striking ``Federal Housing Finance Board'' and inserting 
``Federal Housing Finance Agency''.
  (g) 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 new clause:
                          ``(vii) The Federal Housing Finance 
                        Agency.''.
  (h) 1997 Emergency Supplemental Appropriations Act.--Section 
10001 of the 1997 Emergency Supplemental Appropriations Act for 
Recovery From Natural Disasters, and for Overseas Peacekeeping 
Efforts, Including Those In Bosnia (42 U.S.C. 3548) is 
amended--
          (1) by striking ``the Government National Mortgage 
        Association, and the Office of Federal Housing 
        Enterprise Oversight'' and inserting ``and the 
        Government National Mortgage Association''; and
          (2) by striking ``, the Government National Mortgage 
        Association, or the Office of Federal Housing 
        Enterprise Oversight'' and inserting ``or the 
        Government National Mortgage Association''.
  (i) National Homeownership Trust Act.--Section 302(b)(4) of 
the Cranston-Gonzalez National Affordable Housing Act (42 
U.S.C. 12851(b)(4)) is amended by striking ``the chairperson of 
the Federal Housing Finance Board'' and inserting ``the 
Director of the Federal Housing Finance Agency''.

SEC. 364. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.

  (a) In General.--The Director of the Federal Housing Finance 
Agency, in consultation with the Board of Governors of the 
Federal Reserve System, the Secretary of the Treasury, and the 
Secretary of Housing and Urban Development, shall conduct a 
comprehensive study of the effects on financial and housing 
finance markets of alternatives to the current secondary market 
system for housing finance, taking into consideration changes 
in the structure of financial and housing finance markets and 
institutions since the creation of the Federal National 
Mortgage Association and the Federal Home Loan Mortgage 
Corporation.
  (b) Contents.--The study under this section shall--
          (1) include, among the alternatives to the current 
        secondary market system analyzed--
                  (A) repeal of the chartering Acts for the 
                Federal National Mortgage Association and the 
                Federal Home Loan Mortgage Corporation;
                  (B) establishing bank-like mechanisms for 
                granting new charters for limited purposed 
                mortgage securitization entities;
                  (C) permitting the Director of the Federal 
                Housing Finance Agency to grant new charters 
                for limited purpose mortgage securitization 
                entities, which shall include analyzing the 
                terms on which such charters should be granted, 
                including whether such charters should be sold, 
                or whether such charters and the charters for 
                the Federal National Mortgage Association and 
                the Federal Home Loan Mortgage Corporation 
                should be taxed or otherwise assessed a 
                monetary price; and
                  (D) such other alternatives as the Director 
                considers appropriate;
          (2) examine all of the issues involved in making the 
        transition to a completely private secondary mortgage 
        market system;
          (3) examine the technological advancements the 
        private sector has made in providing liquidity in the 
        secondary mortgage market and how such advancements 
        have affected liquidity in the secondary mortgage 
        market; and
          (4) examine how taxpayers would be impacted by each 
        alternative system, including the complete 
        privatization of the Federal National Mortgage 
        Association and the Federal Home Loan Mortgage 
        Corporation.
  (c) Report.--The Director of the Federal Housing Finance 
Agency shall submit a report to the Congress on the study not 
later than the expiration of the 24-month period beginning on 
the effective date under section 365.

SEC. 365. EFFECTIVE DATE.

  Except as specifically provided otherwise in this subtitle, 
this subtitle shall take effect on and the amendments made by 
this subtitle shall take effect on, and shall apply beginning 
on, the expiration of the 6-month period beginning on the date 
of the enactment of this Act.

                  Subtitle B--Federal Home Loan Banks

SEC. 371. 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.''.

SEC. 372. DIRECTORS.

  (a) Election.--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.--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, each of whom shall be a citizen 
        of the United States. All directors of a Bank who are 
        not independent directors pursuant to paragraph (3) 
        shall be elected by the members.
          ``(2) Member directors.--A majority of the directors 
        of each Bank shall be officers or directors of a member 
        of such Bank that is located in the district in which 
        such Bank is located.
          ``(3) Independent directors.--At least two-fifths of 
        the directors of each Bank shall be independent 
        directors, who shall be appointed by the Director of 
        the Federal Housing Finance Agency from a list of 
        individuals recommended by the Federal Housing 
        Enterprise Board. The Federal Housing Enterprise Board 
        may recommend individuals who are identified by the 
        Board's own independent process or included on a list 
        of individuals recommended by the board of directors of 
        the Bank involved, which shall be submitted to the 
        Federal Housing Enterprise Board by such board of 
        directors. The number of individuals on any such list 
        submitted by a Bank's board of directors shall be equal 
        to at least two times the number of independent 
        directorships to be filled. All independent directors 
        appointed shall meet the following criteria:
                  ``(A) In general.--Each independent director 
                shall be a bona fide resident of the district 
                in which such Bank is located.
                  ``(B) Public interest directors.--At least 2 
                of the independent directors under this 
                paragraph of each Bank shall be representatives 
                chosen from organizations with more than a 2-
                year history of representing consumer or 
                community interests on banking services, credit 
                needs, housing, community development, economic 
                development, or financial consumer protections.
                  ``(C) Other directors.--
                          ``(i) Qualifications.--Each 
                        independent director that is not a 
                        public interest director under 
                        subparagraph (B) 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) Consultation with banks.--In 
                        appointing other directors to serve on 
                        the board of a Federal home loan bank, 
                        the Director of the Federal Housing 
                        Finance Agency may consult with each 
                        Federal home loan bank about the 
                        knowledge, skills, and expertise needed 
                        to assist the board in better 
                        fulfilling its responsibilities.
                  ``(D) Conflicts of interest.--Notwithstanding 
                subsection (f)(2), an independent director 
                under this paragraph of a Bank may not, during 
                such director's term of office, serve as an 
                officer of any Federal Home Loan Bank or as a 
                director or officer of any member of a Bank.
                  ``(E) Community demographics.--In appointing 
                independent directors of a Bank pursuant to 
                this paragraph, the Director shall take into 
                consideration the demographic makeup of the 
                community most served by the Affordable Housing 
                Program of the Bank pursuant to section 
                10(j).'';
          (2) in the first sentence of subsection (b), by 
        striking ``elective directorship'' and inserting 
        ``member directorship established pursuant to 
        subsection (a)(2)'';
          (3) in subsection (c)--
                  (A) by striking ``elective'' each place such 
                term appears and inserting ``member'', except--
                          (i) in the second sentence, the 
                        second place such term appears; and
                          (ii) each place such term appears in 
                        the fifth sentence;
                  (B) in the first sentence, by inserting after 
                ``less than one'' the following: ``or two, as 
                determined by the board of directors of the 
                appropriate Federal home loan bank,''; and
                  (C) 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 two or more such 
                        banks''; and
          (4) by striking ``elective'' each place such term 
        appears (except in subsections (c), (e), and (f)).
  (b) Terms.--
          (1) In general.--Section 7(d) of the Federal Home 
        Loan Bank Act (12 U.S.C. 1427(d)) is amended--
                  (A) in the first sentence, by striking ``3 
                years'' and inserting ``4 years''; and
                  (B) in the second sentence--
                          (i) by striking ``Federal Home Loan 
                        Bank System Modernization Act of 1999'' 
                        and inserting ``Federal Housing Finance 
                        Reform Act of 2008''; and
                          (ii) by striking ``1/3'' and 
                        inserting ``1/4''.
          (2) Savings provision.--The amendments made by 
        paragraph (1) shall not apply to the term of office of 
        any director of a Federal home loan bank who is serving 
        as of the effective date of this subtitle under section 
        381, including any director elected to fill a vacancy 
        in any such office.
  (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 occurs first'';
          (2) by adding at the end the following new sentence: 
        ``An independent Bank director may continue to serve as 
        a director after the expiration of the term of such 
        director until a successor is appointed.'';
          (3) in the paragraph heading, by striking 
        ``Appointed'' and inserting ``Independent''; and
          (4) by striking ``appointive'' each place such term 
        appears and inserting ``independent''.
  (d) Conforming Amendments.--Section 7(f)(3) of the Federal 
Home Loan Bank Act (12 U.S.C. 1427(f)(3)) is amended--
          (1) in the paragraph heading, by striking ``Elected'' 
        and inserting ``Member''; and
          (2) by striking ``elective'' each place such term 
        appears in the first and third sentences and inserting 
        ``member''.
  (e) Compensation.--Subsection (i) of section 7 of the Federal 
Home Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as 
follows:
  ``(i) Directors' Compensation.--
          ``(1) In general.--Each Federal home loan bank may 
        pay the directors on the board of directors for the 
        bank reasonable and appropriate compensation for the 
        time required of such directors, and reasonable and 
        appropriate expenses incurred by such directors, in 
        connection with service on the board of directors, in 
        accordance with resolutions adopted by the board of 
        directors and subject to the approval of the Director.
          ``(2) Annual report by the board.--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.''.
  (f) Transition Rule.--Any member of the board of directors of 
a Federal Home Loan Bank serving as of the effective date under 
section 381 may continue to serve as a member of such board of 
directors for the remainder of the term of such office as 
provided in section 7 of the Federal Home Loan Bank Act, as in 
effect before such effective date.

SEC. 373. FEDERAL HOUSING FINANCE 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 title, is amended--
          (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
        1422b);
          (2) in section 6 (12 U.S.C. 1426(b)(1))--
                  (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'';
          (3) in section 8 (12 U.S.C. 1428), in the section 
        heading, by striking ``by the board'';
          (4) in section 10(b) (12 U.S.C. 1430(b)), by striking 
        ``by formal resolution'';
          (5) in section 10 (12 U.S.C. 1430), by adding at the 
        end the following new subsection:
  ``(k) Monitoring and Enforcing Compliance With Affordable 
Housing and Community Investment Program Requirements.--The 
requirements under subsection (i) and (j) that the Banks 
establish Community Investment and Affordable Housing Programs, 
respectively, and contribute to the Affordable Housing Program, 
shall be enforceable by the Director with respect to the Banks 
in the same manner and to the same extent as the housing goals 
under subpart B of part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 (12 U.S.C. 4561 
et seq.) are enforceable under section 1336 of such Act with 
respect to the Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation.'';
          (6) 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 two commas after 
                        ``permit'' and inserting ``or''; and
                          (ii) by striking the comma after 
                        ``require'';
          (7) in section 15 (12 U.S.C. 1435), by inserting ``or 
        the Director'' after ``the Board'';
          (8) in section 18 (12 U.S.C. 1438), by striking 
        subsection (b);
          (9) in section 21 (12 U.S.C. 1441)--
                  (A) in subsection (b)--
                          (i) in paragraph (5), by striking 
                        ``Chairperson of the Federal Housing 
                        Finance Board'' and inserting 
                        ``Director''; and
                          (ii) in the heading for paragraph 
                        (8), by striking ``federal housing 
                        finance board'' and inserting 
                        ``director''; and
                  (B) in subsection (i), in the heading for 
                paragraph (2), by striking ``Federal housing 
                finance board'' and inserting ``Director'';
          (10) in section 23 (12 U.S.C. 1443), by striking 
        ``Board of Directors of the Federal Housing Finance 
        Board'' and inserting ``Director'';
          (11) by striking ``the Board'' each place such term 
        appears in such Act (except in section 15 (12 U.S.C. 
        1435), section 21(f)(2) (12 U.S.C. 1441(f)(2)), 
        subsections (a), (k)(2)(B)(i), and (n)(6)(C)(ii) of 
        section 21A (12 U.S.C. 1441a), subsections (f)(2)(C), 
        and (k)(7)(B)(ii) of section 21B (12 U.S.C. 1441b), and 
        the first two places such term appears in section 22 
        (12 U.S.C. 1442)) and inserting ``the Director'';
          (12) by striking ``The Board'' each place such term 
        appears in such Act (except in sections 7(e) (12 U.S.C. 
        1427(e)), and 11(b) (12 U.S.C. 1431(b)) and inserting 
        ``The Director'';
          (13) by striking ``the Board's'' each place such term 
        appears in such Act and inserting ``the Director's'';
          (14) by striking ``The Board's'' each place such term 
        appears in such Act and inserting ``The Director's'';
          (15) by striking ``the Finance Board'' each place 
        such term appears in such Act and inserting ``the 
        Director'';
          (16) by striking ``Federal Housing Finance Board'' 
        each place such term appears and inserting 
        ``Director'';
          (17) in section 11(i) (12 U.S.C. 1431(i), by striking 
        ``the Chairperson of''; and
          (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by 
        striking ``Chairperson of the''.

SEC. 374. JOINT ACTIVITIES OF 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) Joint Activities.--Subject to the regulation of the 
Director, any two or more Federal Home Loan Banks may establish 
a joint office for the purpose of performing functions for, or 
providing services to, the Banks on a common or collective 
basis, or may require that the Office of Finance perform such 
functions or services, but only if the Banks are otherwise 
authorized to perform such functions or services 
individually.''.

SEC. 375. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.

  (a) In General.--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 BETWEEN FEDERAL HOME LOAN BANKS.

  ``(a) Regulatory Authority.--The Director shall prescribe 
such regulations as may be necessary to ensure that each 
Federal Home Loan Bank has access to information that the Bank 
needs to determine the nature and extent of its joint and 
several liability.
  ``(b) 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 purpose of enabling 
the recipient to evaluate the nature and extent of its joint 
and several liability.''.
  (b) Regulations.--The regulations required under the 
amendment made by subsection (a) shall be issued in final form 
not later than 6 months after the effective date under section 
381 of this title.

SEC. 376. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.

  Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) 
is amended--
          (1) by inserting ``(a) Reorganization.--'' before 
        ``Whenever''; and
          (2) by striking ``liquidated or'' each place such 
        phrase appears;
          (3) by striking ``liquidation or''; and
          (4) by adding at the end the following new 
        subsection:
  ``(b) Voluntary Mergers.--Any two or more Banks may, with the 
approval of the Director, and the approval of the boards of 
directors of the Banks involved, merge. The Director shall 
promulgate regulations establishing the conditions and 
procedures for the consideration and approval of any such 
voluntary merger, including the procedures for Bank member 
approval.''.

SEC. 377. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.

  (a) In General.--The Federal Home Loan Banks shall be exempt 
from compliance with--
          (1) sections 13(e), 14(a), 14(c), and 17A of the 
        Securities Exchange Act of 1934 and related Commission 
        regulations; and
          (2) section 15 of that Act and related Securities and 
        Exchange Commission regulations with respect to 
        transactions in capital stock of the Banks.
  (b) Member Exemption.--The members of the Federal Home Loan 
Banks 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 Securities and Exchange Commission regulations 
with respect to their ownership of, or transactions in, capital 
stock of the Federal Home Loan Banks.
  (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.
          (2) Other obligations.--The debentures, bonds, and 
        other obligations issued under section 11 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;
                  (B) ``government securities'' within the 
                meaning of section 3(a)(42) of the Securities 
                Exchange Act of 1934;
                  (C) excluded from the definition of 
                ``government securities broker'' within section 
                3(a)(43) of the Securities Exchange Act of 
                1934;
                  (D) excluded from the definition of 
                ``government securities dealer'' within section 
                3(a)(44) of the Securities Exchange Act of 
                1934; and
                  (E) ``government securities'' within the 
                meaning of section 2(a)(16) of the Investment 
                Company Act of 1940.
  (d) Exemption From Reporting Requirements.--The Federal Home 
Loan Banks shall be exempt from periodic reporting requirements 
pertaining to--
          (1) the disclosure of related party transactions that 
        occur in the ordinary course of business of the Banks 
        with their members; and
          (2) the disclosure of unregistered sales of equity 
        securities.
  (e) Tender Offers.--The Securities and Exchange Commission's 
rules relating to tender offers shall not apply in connection 
with transactions in capital stock of the Federal Home Loan 
Banks.
  (f) Regulations.--In issuing any final regulations to 
implement provisions of this section, the Securities and 
Exchange Commission shall consider the distinctive 
characteristics of the Federal Home Loan Banks when evaluating 
the accounting treatment with respect to the payment to 
Resolution Funding Corporation, the role of the combined 
financial statements of the twelve Banks, the accounting 
classification of redeemable capital stock, and the accounting 
treatment related to the joint and several nature of the 
obligations of the Banks.

SEC. 378. 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 371(3) of this title, 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. 379. 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, 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) Sarbanes-Oxley Act of 2002.--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,''.

SEC. 380. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-TERM CARE 
                    FACILITIES.

  The Comptroller General shall conduct a study of the use of 
affordable housing programs of the Federal home loan banks 
under section 10(j) of the Federal Home Loan Bank Act to 
determine how and the extent to which such programs are used to 
assist long-term care facilities for low- and moderate-income 
individuals, and the effectiveness and adequacy of such 
assistance in meeting the needs of affected communities. The 
study shall examine the applicability of such use to the 
affordable housing fund required to be established by the 
Director of the Federal Housing Finance Agency pursuant to the 
amendment made by section 340 of this title. The Comptroller 
General shall submit a report to the Director of the Federal 
Housing Finance Agency and the Congress regarding the results 
of the study not later than the expiration of the 1-year period 
beginning on the date of the enactment of this Act. This 
section shall take effect on the date of the enactment of this 
Act.

SEC. 381. EFFECTIVE DATE.

  Except as specifically provided otherwise in this subtitle, 
this subtitle shall take effect on and the amendments made by 
this subtitle shall take effect on, and shall apply beginning 
on, the expiration of the 6-month period beginning on the date 
of the enactment of this Act.

Subtitle C--Transfer of Functions, Personnel, and Property of Office of 
 Federal Housing Enterprise Oversight, Federal Housing Finance Board, 
            and Department of Housing and Urban Development

       CHAPTER 1--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT


SEC. 385. ABOLISHMENT OF OFHEO.

  (a) In General.--Effective at the end of the 6-month period 
beginning on the date of the 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 6-month period 
beginning on the date of the enactment of this Act, the 
Director of the Office of Federal Housing Enterprise Oversight 
shall, for the purpose of winding up the affairs of the Office 
of Federal Housing Enterprise Oversight and in addition to 
carrying out its other responsibilities under law--
          (1) 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 pursuant to section 387; 
        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 subtitle A 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 employees 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 pursuant to 
section 387.
  (d) Use of Property and Services.--
          (1) Property.--The Director of the Federal Housing 
        Finance Agency may use the property of the Office of 
        Federal Housing Enterprise Oversight to perform 
        functions which have been transferred to the Director 
        of the Federal Housing Finance Agency for such time as 
        is reasonable to facilitate the orderly transfer of 
        functions transferred pursuant to any other provision 
        of this title or any amendment made by this title 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 of the Federal Housing 
        Finance Agency 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) 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 or pursuant to the title 
                XIII of the Housing and Community Development 
                Act of 1992, the Federal National Mortgage 
                Association Charter Act, the Federal Home Loan 
                Mortgage Corporation Act, or any other 
                provision of law applicable with respect to 
                such Office; and
                  (B) existed on the day before the abolishment 
                under subsection (a) of this section.
          (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 title, 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. 386. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

  All regulations, orders, determinations, and resolutions 
that--
          (1) were issued, made, prescribed, or allowed to 
        become effective by--
                  (A) the Office of Federal Housing Enterprise 
                Oversight; or
                  (B) a court of competent jurisdiction and 
                that relate to functions transferred by this 
                chapter; and
          (2) are in effect on the date of the abolishment 
        under section 385(a) of this title, shall remain in 
        effect according to the terms of such regulations, 
        orders, determinations, and resolutions, and shall be 
        enforceable by or against the Director of the Federal 
        Housing Finance Agency until modified, terminated, set 
        aside, or superseded in accordance with applicable law 
        by such Director, as the case may be, any court of 
        competent jurisdiction, or operation of law.

SEC. 387. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

  (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Federal 
Housing Finance Agency for employment no later than the date of 
the abolishment under section 385(a) of this title and such 
transfer shall be deemed a transfer of function for purposes of 
section 3503 of title 5, United States Code.
  (b) Guaranteed Positions.--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. Each such employee holding 
a permanent position shall not be involuntarily separated or 
reduced in grade or compensation for 12 months after the date 
of transfer, except for cause or, if the employee is a 
temporary employee, separated in accordance with the terms of 
the appointment.
  (c) Appointment Authority for Excepted Service Employees.--
          (1) In general.--In the case of employees occupying 
        positions in the excepted service, any appointment 
        authority established pursuant to law or regulations of 
        the Office of Personnel Management for filling such 
        positions shall be transferred, subject to paragraph 
        (2).
          (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of 
        authority under paragraph (1) (and the employees 
        appointed pursuant thereto) to the extent that such 
        authority relates to positions excepted from the 
        competitive service because of their confidential, 
        policy-making, policy-determining, or policy-advocating 
        character.
  (d) Reorganization.--If the Director of the Federal Housing 
Finance Agency determines, after the end of the 1-year period 
beginning on the date of the abolishment under section 385(a), 
that a reorganization of the combined work force is required, 
that reorganization shall be deemed a major reorganization for 
purposes of affording affected employees retirement under 
section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 
Code.
  (e) Employee Benefit Programs.--Any employee of the Office of 
Federal Housing Enterprise Oversight accepting employment with 
the Director of the Federal Housing Finance Agency as a result 
of a transfer under subsection (a) may retain for 12 months 
after the date such transfer occurs membership in any employee 
benefit program of the Federal Housing Finance Agency or the 
Office of Federal Housing Enterprise Oversight, as applicable, 
including insurance, to which such employee belongs on the date 
of the abolishment under section 385(a) if--
          (1) the employee does not elect to give up the 
        benefit or membership in the program; and
          (2) the benefit or program is continued by the 
        Director of the Federal Housing Finance Agency,
The difference in the costs between the benefits which would 
have been provided by such agency and those provided by this 
section shall be paid by the Director of the Federal Housing 
Finance Agency. If any employee elects to give up membership in 
a health insurance program or the health insurance program is 
not continued by such Director, the employee shall be permitted 
to select an alternate Federal health insurance program within 
30 days of such election or notice, without regard to any other 
regularly scheduled open season.

SEC. 388. TRANSFER OF PROPERTY AND FACILITIES.

  Upon the abolishment under section 385(a), all property of 
the Office of Federal Housing Enterprise Oversight shall 
transfer to the Director of the Federal Housing Finance Agency.

                CHAPTER 2--FEDERAL HOUSING FINANCE BOARD


SEC. 391. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

  (a) In General.--Effective at the end of the 6-month 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 6-month period 
beginning on the date of enactment of this Act, the Board, for 
the purpose of winding up the affairs of the Board and in 
addition to carrying out its other responsibilities under law--
          (1) shall manage the employees of such 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 393; 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 subtitles A and B and the abolishment of the Board under 
subsection (a) may not be construed to affect the status of any 
employee of such Board as employees 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 393.
  (d) Use of Property and Services.--
          (1) Property.--The Director of the Federal Housing 
        Finance Agency may use the property of the Board to 
        perform functions which have been transferred to the 
        Director of the Federal Housing Finance Agency for such 
        time as is reasonable to facilitate the orderly 
        transfer of functions transferred under any other 
        provision of this title or any amendment made by this 
        title 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 
        period under subsection (a) in connection with 
        functions that are transferred to the Director of the 
        Federal Housing Finance Agency 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) 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 such 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 to the 
        Director of the Federal Housing Finance Agency shall 
        abate by reason of the enactment of this title, except 
        that the Director of the Federal Housing Finance Agency 
        shall be substituted for the Board or any member 
        thereof as a party to any such action or proceeding.

SEC. 392. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

  (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 of the Federal Housing Finance Agency 
until modified, terminated, set aside, or superseded in 
accordance with applicable law by such 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 
                chapter; and
          (2) is in effect on the effective date of the 
        abolishment under section 391(a).

SEC. 393. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING 
                    FINANCE BOARD.

  (a) Transfer.--Each employee of the Board shall be 
transferred to the Federal Housing Finance Agency for 
employment not later than the effective date of the abolishment 
under section 391(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.--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. Each such employee holding 
a permanent position shall not be involuntarily separated or 
reduced in grade or compensation for 12 months after the date 
of transfer, except for cause or, if the employee is a 
temporary employee, separated in accordance with the terms of 
the appointment.
  (c) Appointment Authority for Excepted and Senior Executive 
Service Employees.--
          (1) In general.--In the case of employees occupying 
        positions 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 positions 
        shall be transferred, subject to paragraph (2).
          (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of 
        authority under paragraph (1) to the extent that such 
        authority relates to positions excepted from the 
        competitive service because of their confidential, 
        policymaking, policy-determining, or policy-advocating 
        character, and noncareer positions in the Senior 
        Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
  (d) Reorganization.--If the Director of the Federal Housing 
Finance Agency determines, after the end of the 1-year period 
beginning on the effective date of the abolishment under 
section 391(a), that a reorganization of the combined workforce 
is required, that reorganization shall be deemed a major 
reorganization for purposes of affording affected employees 
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 Federal Housing Finance 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 Federal Housing Finance Agency or the Board, as 
        applicable, including insurance, to which such employee 
        belongs on the effective date of the abolishment under 
        section 391(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.--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 of the Federal Housing Finance 
        Agency. If any employee elects to give up membership in 
        a health insurance program or the health insurance 
        program is not continued by such Director, the employee 
        shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such 
        election or notice, without regard to any other 
        regularly scheduled open season.

SEC. 394. TRANSFER OF PROPERTY AND FACILITIES.

  Upon the effective date of the abolishment under section 
391(a), all property of the Board shall transfer to the 
Director of the Federal Housing Finance Agency.

         CHAPTER 3--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT


SEC. 395. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.

  (a) Termination Date.--For purposes of this chapter, the term 
``termination date'' means the date that occurs 6 months after 
the date of the enactment of this Act.
  (b) Determination of Transferred Functions and Employees.--
          (1) In general.--Not later than the expiration of the 
        3-month period beginning on the date of the enactment 
        of this Act, the Secretary, in consultation with the 
        Director of the Office of Federal Housing Enterprise 
        Oversight, shall determine--
                  (A) the functions, duties, and activities of 
                the Secretary of Housing and Urban Development 
                regarding oversight or regulation of the 
                enterprises under or pursuant to the 
                authorizing statutes, title XIII of the Housing 
                and Community Development Act of 1992, and any 
                other provisions of law, as in effect before 
                the date of the enactment of this Act, but not 
                including any such functions, duties, and 
                activities of the Director of the Office of 
                Federal Housing Enterprise Oversight of the 
                Department of Housing and Urban Development and 
                such Office; and
                  (B) the employees of the Department of 
                Housing and Urban Development necessary to 
                perform such functions, duties, and activities.
          (2) Enterprise-related functions.--For purposes of 
        this chapter, the term ``enterprise-related functions 
        of the Department'' means the functions, duties, and 
        activities of the Department of Housing and Urban 
        Development determined under paragraph (1)(A).
          (3) Enterprise-related employees.--For purposes of 
        this chapter, the term ``enterprise-related employees 
        of the Department'' means the employees of the 
        Department of Housing and Urban Development determined 
        under paragraph (1)(B).
  (c) Disposition of Affairs.--During the 6-month period 
beginning on the date of enactment of this Act, the Secretary 
of Housing and Urban Development (in this subtitle referred to 
as the ``Secretary''), for the purpose of winding up the 
affairs of the Secretary regarding the enterprise-related 
functions of the Department of Housing and Urban Development 
(in this subtitle referred to as the ``Department'') and in 
addition to carrying out the Secretary's other responsibilities 
under law regarding such functions--
          (1) shall manage the enterprise-related employees of 
        the Department and provide for the payment of the 
        compensation and benefits of any such employee which 
        accrue before the effective date of the transfer of any 
        such employee under section 397; and
          (2) may take any other action necessary for the 
        purpose of winding up the enterprise-related functions 
        of the Department.
  (d) Status of Employees Before Transfer.--The amendments made 
by subtitles A and B and the termination of the enterprise-
related functions of the Department under subsection (b) may 
not be construed to affect the status of any employee of the 
Department as employees 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 397.
  (e) Use of Property and Services.--
          (1) Property.--The Director of the Federal Housing 
        Finance Agency may use the property of the Secretary to 
        perform functions which have been transferred to the 
        Director of the Federal Housing Finance Agency for such 
        time as is reasonable to facilitate the orderly 
        transfer of functions transferred under any other 
        provision of this title or any amendment made by this 
        title 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 Secretary regarding enterprise-related 
        functions of the Department before the termination date 
        under subsection (a) in connection with such functions 
        that are transferred to the Director of the Federal 
        Housing Finance Agency 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.
  (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 Secretary, or any other person, which--
                  (A) arises under the authorizing statutes, 
                title XIII of the Housing and Community 
                Development Act of 1992, or any other provision 
                of law applicable with respect to the 
                Secretary, in connection with the enterprise-
                related functions of the Department; and
                  (B) existed on the day before the termination 
                date under subsection (a).
          (2) Continuation of suits.--No action or other 
        proceeding commenced by or against the Secretary in 
        connection with the enterprise-related functions of the 
        Department shall abate by reason of the enactment of 
        this title, except that the Director of the Federal 
        Housing Finance Agency shall be substituted for the 
        Secretary or any member thereof as a party to any such 
        action or proceeding.

SEC. 396. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

  (a) In General.--All regulations, orders, and determinations 
described in 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 of the Federal Housing Finance Agency until modified, 
terminated, set aside, or superseded in accordance with 
applicable law by such Director, any court of competent 
jurisdiction, or operation of law.
  (b) Applicability.--A regulation, order, or determination is 
described under this subsection if it--
          (1) was issued, made, prescribed, or allowed to 
        become effective by--
                  (A) the Secretary; or
                  (B) a court of competent jurisdiction and 
                that relate to the enterprise-related functions 
                of the Department; and
          (2) is in effect on the termination date under 
        section 395(a).

SEC. 397. TRANSFER AND RIGHTS OF EMPLOYEES OF DEPARTMENT OF HOUSING AND 
                    URBAN DEVELOPMENT.

  (a) Transfer.--
          (1) In general.--Except as provided in paragraph (2), 
        each enterprise-related employee of the Department 
        shall be transferred to the Federal Housing Finance 
        Agency for employment not later than the termination 
        date under section 395(a) and such transfer shall be 
        deemed a transfer of function for purposes of section 
        3503 of title 5, United States Code.
          (2) Authority to decline.--An enterprise-related 
        employee of the Department may, in the discretion of 
        the employee, decline transfer under paragraph (1) to a 
        position in the Federal Housing Finance Agency and 
        shall be guaranteed a position in the Department with 
        the same status, tenure, grade, and pay as that held on 
        the day immediately preceding the date that such 
        declination was made. Each such employee holding a 
        permanent position shall not be involuntarily separated 
        or reduced in grade or compensation for 12 months after 
        the date that the transfer would otherwise have 
        occurred, except for cause or, if the employee is a 
        temporary employee, separated in accordance with the 
        terms of the appointment.
  (b) Guaranteed Positions.--Each enterprise-related employee 
of the Department 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. 
Each such employee holding a permanent position shall not be 
involuntarily separated or reduced in grade or compensation for 
12 months after the date of transfer, except for cause or, if 
the employee is a temporary employee, separated in accordance 
with the terms of the appointment.
  (c) Appointment Authority for Excepted and Senior Executive 
Service Employees.--
          (1) In general.--In the case of employees occupying 
        positions 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 positions 
        shall be transferred, subject to paragraph (2).
          (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of 
        authority under paragraph (1) (and the employees 
        appointed pursuant thereto) to the extent that such 
        authority relates to positions excepted from the 
        competitive service because of their confidential, 
        policymaking, policy-determining, or policy-advocating 
        character, and noncareer positions in the Senior 
        Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
  (d) Reorganization.--If the Director of the Federal Housing 
Finance Agency determines, after the end of the 1-year period 
beginning on the termination date under section 395(a), that a 
reorganization of the combined workforce is required, that 
reorganization shall be deemed a major reorganization for 
purposes of affording affected employees 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 enterprise-related employee of 
        the Department accepting employment with the Federal 
        Housing Finance 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 Federal Housing Finance 
        Agency or the Department, as applicable, including 
        insurance, to which such employee belongs on the 
        termination date under section 395(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.--The difference in the costs 
        between the benefits which would have been provided by 
        the Department and those provided by this section shall 
        be paid by the Director of the Federal Housing Finance 
        Agency. If any employee elects to give up membership in 
        a health insurance program or the health insurance 
        program is not continued by such Director, the employee 
        shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such 
        election or notice, without regard to any other 
        regularly scheduled open season.

SEC. 398. TRANSFER OF APPROPRIATIONS, PROPERTY, AND FACILITIES.

  Upon the termination date under section 395(a), all assets, 
liabilities, contracts, property, records, and unexpended 
balances of appropriations, authorizations, allocations, and 
other funds employed, held, used, arising from, available to, 
or to be made available to the Department in connection with 
enterprise-related functions of the Department shall transfer 
to the Director of the Federal Housing Finance Agency. 
Unexpended funds transferred by this section shall be used only 
for the purposes for which the funds were originally authorized 
and appropriated.

             TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION

SEC. 401. SHORT TITLE.

  This title may be cited as the ``Emergency Mortgage Loan 
Modification Act of 2008''.

SEC. 402. SAFE HARBOR FOR QUALIFIED LOAN MODIFICATIONS OR WORKOUT PLANS 
                    FOR CERTAIN RESIDENTIAL MORTGAGE LOANS.

  (a) Standard for Loan Modifications or Workout Plans.--Absent 
contractual provisions to the contrary--
          (1) the duty to maximize, or to not adversely affect, 
        the recovery of total proceeds from pooled residential 
        mortgage loans is owed by a servicer of such pooled 
        loans to the securitization vehicle for the benefit of 
        all investors and holders of beneficial interests in 
        the pooled loans, in the aggregate, and not to any 
        individual party or group of parties; and
          (2) a servicer of pooled residential mortgage loans 
        shall be deemed to be acting on behalf of the 
        securitization vehicle in the best interest of all 
        investors and holders of beneficial interests in the 
        pooled loans, in the aggregate, if for a loan that is 
        in payment default under the loan agreement or for 
        which payment default is imminent or reasonably 
        foreseeable, the loan servicer makes or causes to be 
        made reasonable and documented efforts to implement a 
        modification or workout plan or, if such efforts are 
        unsuccessful or such plan would be infeasible, engages 
        or causes to engage in other loss mitigation, including 
        accepting a short payment or partial discharge of 
        principal, or agreeing to a short sale of the property, 
        to the extent that the servicer reasonably believes the 
        modification or workout plan or other mitigation 
        actions will maximize the net present value to be 
        realized on the loan over that which would be realized 
        through foreclosure.
  (b) Safe Harbor.--Absent contractual provisions to the 
contrary, a servicer of a residential mortgage loan that acts 
or causes to act in a manner consistent with the duty set forth 
in subsection (a), shall not be liable for entering into a 
qualified loan modification or workout plan, to--
          (1) any person, based on that person's ownership of a 
        residential mortgage loan or any interest in a pool of 
        residential mortgage loans or in securities that 
        distribute payments out of the principal, interest and 
        other payments in loans on the pool;
          (2) any person who is obligated to make payments 
        pursuant to a derivatives instrument determined in 
        reference to any interest referred to in paragraph (1); 
        or
          (3) any person that insures any loan or any interest 
        referred to in paragraph (1) under any law or 
        regulation of the United States or any law or 
        regulation of any State or political subdivision of any 
        State.
  (c) Rule of Construction.--No provision of this section shall 
be construed as limiting the ability of a servicer to enter 
into loan modifications or workout plans other than qualified 
loan modification or workout plans.
  (d) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Qualified loan modification or workout plan.--The 
        term ``qualified loan modification or workout plan'' 
        means a modification or plan that--
                  (A) is scheduled to remain in place until the 
                borrower sells or refinances the property, or 
                for at least 5 years from the date of adoption 
                of the plan, whichever is sooner;
                  (B) does not provide for a repayment schedule 
                that results in an increase in the outstanding 
                principal balance of the loan, including by 
                deferred or unpaid interest, fees, or other 
                charges; and
                  (C) does not require the borrower to pay 
                additional points and fees.
          (2) Residential mortgage loan defined.--The term 
        ``residential mortgage loan'' means a loan that is 
        secured by a lien on an owner-occupied residential 
        dwelling.
          (3) Securitization vehicle.--The term 
        ``securitization vehicle'' means a trust, corporation, 
        partnership, limited liability entity, special purpose 
        entity, or other structure that--
                  (A) is the issuer, or is created by the 
                issuer, of mortgage pass-through certificates, 
                participation certificates, mortgage-backed 
                securities, or other similar securities backed 
                by a pool of assets that includes residential 
                mortgage loans; and
                  (B) holds such loans.
  (e) Effective Period.--This section shall apply only with 
respect to qualified loan modification or workout plans 
initiated prior to January 1, 2011.

                   TITLE V--OTHER HOUSING PROVISIONS

SEC. 501. DEPOSITORY INSTITUTION COMMUNITY DEVELOPMENT INVESTMENTS 
                    ENHANCEMENT .

  (a) Technical Corrections.--
          (1) 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) (as amended by section 305(a) of the 
        Financial Services Regulatory Relief Act of 2006) 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''.
          (2) State member banks.--The first sentence of the 
        23rd undesignated paragraph of section 9 of the Federal 
        Reserve Act (12 U.S.C. 338a) (as amended by section 
        305(b) of the Financial Services Regulatory Relief Act 
        of 2006) 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) Investments by Federal Savings Associations Authorized To 
Promote the Public Welfare.--
          (1) In general.--Section 5(c)(3) of the Home Owners' 
        Loan Act (12 U.S.C. 1464(c)) is amended by adding at 
        the end the following new subparagraph:
                  ``(D) Direct investments to promote the 
                public welfare.--
                          ``(i) In general.--A Federal savings 
                        association may make investments, 
                        directly or indirectly, each of which 
                        is designed primarily to promote the 
                        public welfare, including the welfare 
                        of low- and moderate-income communities 
                        or families through the provision of 
                        housing, services, and jobs.
                          ``(ii) Direct investments or 
                        acquisition of interest in other 
                        companies.--Investments under clause 
                        (i) may be made directly or by 
                        purchasing interests in an entity 
                        primarily engaged in making such 
                        investments.
                          ``(iii) Prohibition on unlimited 
                        liability.--No investment may be made 
                        under this subparagraph which would 
                        subject a Federal savings association 
                        to unlimited liability to any person.
                          ``(iv) Single investment limitation 
                        to be established by director.--Subject 
                        to clauses (v) and (vi), the Director 
                        shall establish, by order or 
                        regulation, limits on--
                                  ``(I) the amount any savings 
                                association may invest in any 1 
                                project; and
                                  ``(II) the aggregate amount 
                                of investment of any savings 
                                association under this 
                                subparagraph.
                          ``(v) Flexible aggregate investment 
                        limitation.--The aggregate amount of 
                        investments of any savings association 
                        under this subparagraph may not exceed 
                        an amount equal to the sum of 5 percent 
                        of the savings association's capital 
                        stock actually paid in and unimpaired 
                        and 5 percent of the savings 
                        association's unimpaired surplus, 
                        unless--
                                  ``(I) the Director determines 
                                that the savings association is 
                                adequately capitalized; and
                                  ``(II) the Director 
                                determines, by order, that the 
                                aggregate amount of investments 
                                in a higher amount than the 
                                limit under this clause will 
                                pose no significant risk to the 
                                affected deposit insurance 
                                fund.
                          ``(vi) Maximum aggregate investment 
                        limitation.--Notwithstanding clause 
                        (v), the aggregate amount of 
                        investments of any savings association 
                        under this subparagraph may not exceed 
                        an amount equal to the sum of 15 
                        percent of the savings association's 
                        capital stock actually paid in and 
                        unimpaired and 15 percent of the 
                        savings association's unimpaired 
                        surplus.
                          ``(vii) Investments not subject to 
                        other limitation on quality of 
                        investments.--No obligation a Federal 
                        savings association acquires or retains 
                        under this subparagraph shall be taken 
                        into account for purposes of the 
                        limitation contained in section 28(d) 
                        of the Federal Deposit Insurance Act on 
                        the acquisition and retention of any 
                        corporate debt security not of 
                        investment grade.
                          ``(viii) Applicability of standards 
                        to each investment.--The standards and 
                        limitations of this subparagraph shall 
                        apply to each investment under this 
                        subparagraph made by a savings 
                        association directly and by its 
                        subsidiaries.''.
          (2) Technical and conforming amendments.--Section 
        5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C. 
        1464(c)(3)(A)) is amended to read as follows:
                  ``(A) [Repealed]''.

SEC. 502. PRESERVATION OF CERTAIN AFFORDABLE HOUSING DWELLING UNITS.

  (a) Conversion of HUD Contracts.--Notwithstanding any other 
provision of law, the Secretary of Housing and Urban 
Development may, at the request of the owner of the multifamily 
housing project to which Section 8 Project Number NY 913 VO 
0018 and RAP Contract Number 012035NIRAP are subject, convert 
such contracts to a contract for project-based rental 
assistance under section 8 of the United States Housing Act of 
1937 (42 U.S.C. 1437f).
  (b) Initial Renewal.--
          (1) Eligibility.--At the request of the owner 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).
          (2) Request.--A request by the 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 the 
        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.--The owner shall be deemed to be in 
compliance with all income-targeting requirements under the 
United States Housing Act of 1937 by serving low-income 
families, as such term is defined in the section 3(b)(2) of 
such Act (42 U.S.C. 1437a(b)(2)).
  (e) Tenant Eligibility.--Notwithstanding any other provision 
of law, each family residing in an assisted dwelling unit on 
the date of the conversion 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 ``assisted dwelling unit'' means the 
        dwelling units that, on the date of the conversion 
        under this section, were subject to Section 8 Project 
        Number NY 913 VO 0018 or RAP Contract Number 
        012035NIRAP;
          (2) the term ``conversion'' means the action under 
        which Section 8 Project Number NY 913 VO 0018 and RAP 
        Contract Number 012035NIRAP become a contract for 
        project-based rental assistance under section 8 of the 
        United States Housing Act of 1937 (42 U.S.C. 1437f) 
        pursuant to subsection (a);
          (3) the term ``MAHRA'' means the Multifamily Assisted 
        Housing Reform and Affordability Act of 1997 (42 U.S.C. 
        1437f note);
          (4) the term ``owner'' means Starrett City Associates 
        or any successor owner of the multifamily housing 
        project to which Section 8 Project Number NY 913 VO 
        0018 and RAP Contract Number 012035NIRAP are subject;
          (5) the term ``resulting contract'' means the new 
        contract after a conversion of Section 8 Project Number 
        NY 913 VO 0018 and RAP Contract Number 012035NIRAP to a 
        contract for project-based rental assistance under 
        section 8 of the United States Housing Act of 1937 (42 
        U.S.C. 1437f) pursuant to subsection (a); and
          (6) the term ``Secretary'' means the Secretary of 
        Housing and Urban Development.

SEC. 503. 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. 504. 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. 505. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

  Section 525 of title 11, the United States Code, is amended 
by adding at the end the following:
  ``(d) A governmental unit that operates a mortgage loan 
program, including a loan guarantee or subsidy program, may not 
deny the benefits of such program to a disabled veteran (as 
defined in section 3741(1) of title 38) because he or she is or 
has been a debtor under this title, has been insolvent before 
the commencement of a case under this title or during the 
pendency of the case but before being granted or denied a 
discharge, or has not paid a debt that is dischargeable in the 
case under this title.''.

  In the matter proposed to be inserted by the amendment of the 
Senate to the text of the bill, strike titles VII, IX, and XI.
                              ----------                              

    TEXT OF THE HOUSE AMENDMENT #2 TO THE SENATE AMENDMENT TO 
H.R. 3221 MADE IN ORDER UNDER THE RULE
  In the matter proposed to be inserted by the Senate amendment 
to H.R. 3221, strike titles VI (relating to tax-related 
provisions), VIII (relating to REIT investment diversification 
and empowerment), and X (relating to clean energy tax stimulus) 
and add at the end the following new title (and conform the 
table of contents accordingly):

                TITLE VII--REVENUE AND OTHER PROVISIONS

SEC. 700. AMENDMENT OF 1986 CODE.

  Except as otherwise expressly provided, whenever in this 
title 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.

                   Subtitle A--Housing Tax Incentives

                      PART 1--MULTI-FAMILY HOUSING

                Subpart A--Low-Income Housing Tax Credit

SEC. 701. 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, 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.''.

SEC. 702. DETERMINATION OF CREDIT RATE.

  (a) Elimination of Distinction Between New and Existing 
Buildings; Minimum Credit Rate for Non-Federally Subsidized 
Buildings.--
          (1) In general.--Subsection (b) section 42 is amended 
        to read as follows:
  ``(b) Applicable Percentage.--For purposes of this section--
          ``(1) In general.--The term `applicable percentage' 
        means, with respect to any building, the appropriate 
        percentage prescribed by the Secretary for the earlier 
        of--
                  ``(A) the month in which such building is 
                placed in service, or
                  ``(B) at the election of the taxpayer--
                          ``(i) the month in which the taxpayer 
                        and the housing credit agency enter 
                        into an agreement with respect to such 
                        building (which is binding on such 
                        agency, the taxpayer, and all 
                        successors in interest) as to the 
                        housing credit dollar amount to be 
                        allocated to such building, or
                          ``(ii) in the case of any building to 
                        which subsection (h)(4)(B) applies, the 
                        month in which the tax-exempt 
                        obligations are issued.
        A month may be elected under clause (ii) only if the 
        election is made not later than the 5th day after the 
        close of such month. Such an election, once made, shall 
        be irrevocable.
          ``(2) Method of prescribing percentages.--
                  ``(A) In general.--For purposes of paragraph 
                (1), the percentages prescribed by the 
                Secretary for any month shall be--
                          ``(i) in the case of any building 
                        which is not federally subsidized for 
                        the taxable year, the greater of--
                                  ``(I) the average percentage 
                                determined under subclause (II) 
                                for months in the preceding 
                                calendar year, or
                                  ``(II) the percentage which 
                                will yield over a 10-year 
                                period amounts of credit under 
                                subsection (a) which have a 
                                present value equal to 70 
                                percent of the qualified basis 
                                of such building, and
                          ``(ii) in the case of any other 
                        building, the percentage which will 
                        yield over a 10-year period amounts of 
                        credit under subsection (a) which have 
                        a present value equal to 30 percent of 
                        the qualified basis of such building.
                  ``(B) Method of discounting.--The present 
                value under subparagraph (A) shall be 
                determined--
                          ``(i) as of the last day of the 1st 
                        year of the 10-year period referred to 
                        in subparagraph (A),
                          ``(ii) by using a discount rate equal 
                        to 72 percent of the average of the 
                        annual Federal mid-term rate and the 
                        annual Federal long-term rate 
                        applicable under section 1274(d)(1) to 
                        the month applicable under subparagraph 
                        (A) and compounded annually, and
                          ``(iii) by assuming that the credit 
                        allowable under this section for any 
                        year is received on the last day of 
                        such year.
          ``(3) Cross references.--
                  ``(A) For treatment of certain rehabilitation 
                expenditures as separate buildings, see 
                subsection (e).
                  ``(B) For determination of applicable 
                percentage for increases in qualified basis 
                after the 1st year of the credit period, see 
                subsection (f)(3).
                  ``(C) For authority of housing credit agency 
                to limit applicable percentage and qualified 
                basis which may be taken into account under 
                this section with respect to any building, see 
                subsection (h)(7).''.
          (2) Conforming amendments.--
                  (A) Subparagraph (B) of section 42(e)(3) is 
                amended by striking ``subsection 
                (b)(2)(B)(ii)'' and inserting ``subsection 
                (b)(2)(A)(ii)''.
                  (B) Subparagraph (A) of section 42(i)(2) is 
                amended by striking ``new building'' and 
                inserting ``building''.
  (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. 703. 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 (f), 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) 15 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 $5,000,000, 
                                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 
(f)(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) 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).
  (g) 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. 704. 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) 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.
        Notwithstanding the preceding sentence, the amendments 
        made by subsection (c) shall not apply to any 
        disposition after the date 5 years after the date of 
        the enactment of this Act.
          (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.

       Subpart B--Modifications to Tax-Exempt Housing Bond Rules

SEC. 706. 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. 707. 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 further 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.

  Subpart C--Reforms Related to the Low-Income Housing Credit and Tax-
                          Exempt Housing Bonds

SEC. 709. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.

  (a) In General.--Paragraph (2) of section 142(d), as amended 
by section 707, is further 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. 710. 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.

                     PART 2--SINGLE FAMILY HOUSING

SEC. 712. 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) $70,000 ($140,000 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 it, and
                          ``(ii) the basis of the property in 
                        the hands of the person acquiring it 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) 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) Application of Section.--This section shall only apply 
to a principal residence purchased by the taxpayer on or after 
April 9, 2008, and before April 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 ``section 
        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. 713. 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) $350 ($700 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.

                       PART 3--GENERAL PROVISIONS

SEC. 715. 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 
                $10,000,000,000 multiplied by a fraction--
                          ``(i) the numerator of which is the 
                        population of such State, and
                          ``(ii) the denominator of which is 
                        the total population of 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. 716. 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. 717. 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) 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 Act 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. 718. 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. 719. 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.

      Subtitle B--Reforms Related to Real Estate Investment Trusts

        PART 1--FOREIGN CURRENCY AND OTHER QUALIFIED ACTIVITIES

SEC. 721. REVISIONS TO REIT INCOME TESTS.

  (a) Addition of Permissible Income Categories.--Section 
856(c) (relating to limitations) is amended--
          (1) by striking ``and'' at the end of paragraph 
        (2)(G) and by inserting after paragraph (2)(H) the 
        following new subparagraphs:
                  ``(I) passive foreign exchange gains; and
                  ``(J) any other item of income or gain as 
                determined by the Secretary;'', and
          (2) by striking ``and'' at the end of paragraphs 
        (3)(H) and (3)(I) and by inserting after paragraph 
        (3)(I) the following new subparagraphs:
                  ``(J) real estate foreign exchange gains; and
                  ``(K) any other item of income or gain as 
                determined by the Secretary; and''.
  (b) Rules Regarding Foreign Currency Transactions.--Section 
856 (defining real estate investment trust) is amended by 
adding at the end the following new subsection:
  ``(n) Rules Regarding Foreign Currency Transactions.--With 
respect to any taxable year--
          ``(1) Real estate foreign exchange gains.--For 
        purposes of subsection (c)(3)(J), the term `real estate 
        foreign exchange gains' means--
                  ``(A) foreign currency gains (as defined in 
                section 988(b)(1)) which are attributable to--
                          ``(i) any item described in 
                        subsection (c)(3) (other than in 
                        subparagraph (J) thereof),
                          ``(ii) the acquisition or ownership 
                        of obligations secured by mortgages on 
                        real property or on interests in real 
                        property (other than foreign currency 
                        gains attributable to any item 
                        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 gains attributable to any item 
                        described in clause (i)),
                  ``(B) gains described in section 987 
                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) (without 
                        regard to subparagraph (J) thereof) 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 gains as 
                determined by the Secretary.
          ``(2) Passive foreign exchange gains.--For purposes 
        of subsection (c)(2)(I), the term `passive foreign 
        exchange gains' means--
                  ``(A) real estate foreign exchange gains,
                  ``(B) foreign currency gains (as defined in 
                section 988(b)(1)) which are not described in 
                subparagraph (A) and which are attributable to 
                any item described in subsection (c)(2) (other 
                than in subparagraph (I) thereof), and
                  ``(C) any other foreign currency gains as 
                determined by the Secretary.''.
  (c) 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 described in 
                        paragraph (2) or (3), 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).''.
  (d) 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:
                  ``(H) Secretarial authority to exclude other 
                items of income.--The Secretary is authorized 
                to determine whether any item of income or gain 
                which does not otherwise qualify under 
                paragraph (2) or (3) may be considered as not 
                constituting gross income solely for purposes 
                of this part.''.

SEC. 722. 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 721(d), is amended by adding 
at the end the following new subparagraph:
                  ``(I) Cash.--The term `cash' includes foreign 
                currency if the real estate investment trust or 
                its qualified business unit (as defined in 
                section 989) uses such foreign currency as its 
                functional currency (as defined in section 
                985(b)).''.

SEC. 723. 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;''.

                   PART 2--TAXABLE REIT SUBSIDIARIES

SEC. 725. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

  Section 856(c)(4)(B)(ii) is amended by striking ``20 
percent'' and inserting ``25 percent''.

                          PART 3--DEALER SALES

SEC. 727. HOLDING PERIOD UNDER SAFE HARBOR.

  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''.

SEC. 728. 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,''.

                       PART 4--HEALTH CARE REITS

SEC. 730. 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 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 directly or indirectly possesses a 
                license, permit or similar instrument enabling 
                it to do so.''.
  (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''.

                        PART 5--EFFECTIVE DATES

SEC. 732. EFFECTIVE DATES.

  (a) In General.--Except as otherwise provided in this 
section, the amendments made by this subtitle shall apply to 
taxable years beginning after the date of the enactment of this 
Act.
  (b) REIT Income Tests.--
          (1) The amendment made by section 721(a) and (b) 
        shall apply to gains and items of income recognized 
        after the date of the enactment of this Act.
          (2) The amendment made by section 721(c) shall apply 
        to transactions entered into after the date of the 
        enactment of this Act.
          (3) The amendment made by section 721(d) shall apply 
        after the date of the enactment of this Act.
  (c) Conforming Foreign Currency Revisions.--
          (1) The amendment made by section 723(a) shall apply 
        to gains recognized after the date of the enactment of 
        this Act.
          (2) The amendment made by section 723(b) shall apply 
        to gains and deductions recognized after the date of 
        the enactment of this Act.
  (d) Dealer Sales.--The amendments made by part 3 shall apply 
to sales made after the date of the enactment of this Act.

                     Subtitle C--Revenue Provisions

SEC. 741. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES 
                    TRANSACTIONS.

  (a) In General.--
          (1) Broker reporting for securities transactions.--
        Section 6045 (relating to returns of brokers) is 
        amended by adding at the end the following new 
        subsection:
  ``(g) Additional Information Required in the Case of 
Securities Transactions, etc.--
          ``(1) In general.--If a broker is otherwise required 
        to make a return under subsection (a) with respect to 
        the gross proceeds of the sale of a covered security, 
        the broker shall include in such return the information 
        described in paragraph (2).
          ``(2) Additional information required.--
                  ``(A) In general.--The information required 
                under paragraph (1) to be shown on a return 
                with respect to a covered security of a 
                customer shall include the customer's adjusted 
                basis in such security and whether any gain or 
                loss with respect to such security is long-term 
                or short-term (within the meaning of section 
                1222).
                  ``(B) Determination of adjusted basis.--For 
                purposes of subparagraph (A)--
                          ``(i) In general.--The customer's 
                        adjusted basis shall be determined--
                                  ``(I) in the case of any 
                                security (other than any stock 
                                for which an average basis 
                                method is permissible under 
                                section 1012), in accordance 
                                with the first-in first-out 
                                method unless the customer 
                                notifies the broker by means of 
                                making an adequate 
                                identification of the stock 
                                sold or transferred, and
                                  ``(II) in the case of any 
                                stock for which an average 
                                basis method is permissible 
                                under section 1012, in 
                                accordance with the broker's 
                                default method unless the 
                                customer notifies the broker 
                                that he elects another 
                                acceptable method under section 
                                1012 with respect to the 
                                account in which such stock is 
                                held.
                          ``(ii) Exception for wash sales.--
                        Except as otherwise provided by the 
                        Secretary, the customer's adjusted 
                        basis shall be determined without 
                        regard to section 1091 (relating to 
                        loss from wash sales of stock or 
                        securities) unless the transactions 
                        occur in the same account with respect 
                        to identical securities.
          ``(3) Covered security.--For purposes of this 
        subsection--
                  ``(A) In general.--The term `covered 
                security' means any specified security acquired 
                on or after the applicable date if such 
                security--
                          ``(i) was acquired through a 
                        transaction in the account in which 
                        such security is held, or
                          ``(ii) was transferred to such 
                        account from an account in which such 
                        security was a covered security, but 
                        only if the broker received a statement 
                        under section 6045A with respect to the 
                        transfer.
                  ``(B) Specified security.--The term 
                `specified security' means--
                          ``(i) any share of stock in a 
                        corporation,
                          ``(ii) any note, bond, debenture, or 
                        other evidence of indebtedness,
                          ``(iii) any commodity, or contract or 
                        derivative with respect to such 
                        commodity, if the Secretary determines 
                        that adjusted basis reporting is 
                        appropriate for purposes of this 
                        subsection, and
                          ``(iv) any other financial instrument 
                        with respect to which the Secretary 
                        determines that adjusted basis 
                        reporting is appropriate for purposes 
                        of this subsection.
                  ``(C) Applicable date.--The term `applicable 
                date' means--
                          ``(i) January 1, 2010, in the case of 
                        any specified security which is stock 
                        in a corporation (other than any stock 
                        described in clause (ii)),
                          ``(ii) January 1, 2011, in the case 
                        of any stock for which an average basis 
                        method is permissible under section 
                        1012, and
                          ``(iii) January 1, 2012, or such 
                        later date determined by the Secretary 
                        in the case of any other specified 
                        security.
          ``(4) Treatment of s corporations.--In the case of 
        the sale of a covered security acquired by an S 
        corporation (other than a financial institution) after 
        December 31, 2011, such S corporation shall be treated 
        in the same manner as a partnership for purposes of 
        this section.
          ``(5) Special rules for short sales.--In the case of 
        a short sale, reporting under this section shall be 
        made for the year in which such sale is closed.''.
          (2) Broker information required with respect to 
        options.--Section 6045, as amended by subsection (a), 
        is amended by adding at the end the following new 
        subsection:
  ``(h) Application to Options on Securities.--
          ``(1) Exercise of option.--For purposes of this 
        section, if a covered security is acquired or disposed 
        of pursuant to the exercise of an option that was 
        granted or acquired in the same account as the covered 
        security, the amount received with respect to the grant 
        or paid with respect to the acquisition of such option 
        shall be treated as an adjustment to gross proceeds or 
        as an adjustment to basis, as the case may be.
          ``(2) Lapse or closing transaction.--In the case of 
        the lapse (or closing transaction (as defined in 
        section 1234(b)(2)(A))) of an option on a specified 
        security or the exercise of a cash-settled option on a 
        specified security, reporting under subsections (a) and 
        (g) with respect to such option shall be made for the 
        calendar year which includes the date of such lapse, 
        closing transaction, or exercise.
          ``(3) Prospective application.--Paragraphs (1) and 
        (2) shall not apply to any option which is granted or 
        acquired before January 1, 2012.
          ``(4) Definitions.--For purposes of this subsection, 
        the terms `covered security' and `specified security' 
        shall have the meanings given such terms in subsection 
        (g)(3).''.
          (3) Extension of period for statements sent to 
        customers.--
                  (A) In general.--Subsection (b) of section 
                6045 is amended by striking ``January 31'' and 
                inserting ``February 15''.
                  (B) Statements related to substitute 
                payments.--Subsection (d) of section 6045 is 
                amended--
                          (i) by striking ``at such time and'', 
                        and
                          (ii) by inserting after ``other 
                        item.'' the following new sentence: 
                        ``The written statement required under 
                        the preceding sentence shall be 
                        furnished on or before February 15 of 
                        the year following the calendar year in 
                        which the payment was made.''.
                  (C) Other statements.--Subsection (b) of 
                section 6045 is amended by adding at the end 
                the following: ``In the case of a consolidated 
                reporting statement (as defined in regulations) 
                with respect to any account, any statement 
                which would otherwise be required to be 
                furnished on or before January 31 of a calendar 
                year with respect to any item reportable to the 
                taxpayer shall instead be required to be 
                furnished on or before February 15 of such 
                calendar year if furnished with such 
                consolidated reporting statement.''.
  (b) Determination of Basis of Certain Securities on Account 
by Account or Average Basis Method.--Section 1012 (relating to 
basis of property-cost) is amended--
          (1) by striking ``The basis of property'' and 
        inserting the following:
  ``(a) In General.--The basis of property'',
          (2) by striking ``The cost of real property'' and 
        inserting the following:
  ``(b) Special Rule for Apportioned Real Estate Taxes.--The 
cost of real property'', and
          (3) by adding at the end the following new 
        subsections:
  ``(c) Determinations by Account.--
          ``(1) In general.--In the case of the sale, exchange, 
        or other disposition of a specified security on or 
        after the applicable date, the conventions prescribed 
        by regulations under this section shall be applied on 
        an account by account basis.
          ``(2) Application to open-end funds.--
                  ``(A) In general.--Except as provided in 
                subparagraph (B), any stock in an open-end fund 
                acquired before January 1, 2011, shall be 
                treated as a separate account from any such 
                stock acquired on or after such date.
                  ``(B) Election by open-end fund for treatment 
                as single account.--If an open-end fund elects 
                to have this subparagraph apply with respect to 
                one or more of its stockholders--
                          ``(i) subparagraph (A) shall not 
                        apply with respect to any stock in such 
                        fund held by such stockholders, and
                          ``(ii) all stock in such fund which 
                        is held by such stockholders shall be 
                        treated as covered securities described 
                        in section 6045(g)(3) without regard to 
                        the date of the acquisition of such 
                        stock.
                A rule similar to the rule of the preceding 
                sentence shall apply with respect to a broker 
                holding stock in an open-end fund as a nominee.
          ``(3) Definitions.--For purposes of this section--
                  ``(A) Open-end fund.--The term `open-end 
                fund' means a regulated investment company (as 
                defined in section 851) which is offering for 
                sale or has outstanding any redeemable security 
                of which it is the issuer. Any stock which is 
                traded on an established securities exchange 
                shall not be treated as stock in an open-end 
                fund.
                  ``(B) Specified security; applicable date.--
                The terms `specified security' and `applicable 
                date' shall have the meaning given such terms 
                in section 6045(g).
  ``(d) Average Basis for Stock Acquired Pursuant to a Dividend 
Reinvestment Plan.--
          ``(1) In general.--In the case of any stock acquired 
        after December 31, 2010, in connection with a dividend 
        reinvestment plan, the basis of such stock while held 
        as part of such plan shall be determined using one of 
        the methods which may be used for determining the basis 
        of stock in an open-end fund.
          ``(2) Treatment after transfer.--In the case of the 
        transfer to another account of stock to which paragraph 
        (1) applies, such stock shall have a cost basis in such 
        other account equal to its basis in the dividend 
        reinvestment plan immediately before such transfer 
        (properly adjusted for any fees or other charges taken 
        into account in connection with such transfer).
          ``(3) Separate accounts; election for treatment as 
        single account.--Rules similar to the rules of 
        subsection (c)(2) shall apply for purposes of this 
        subsection.
          ``(4) Dividend reinvestment plan.--For purposes of 
        this subsection--
                  ``(A) In general.--The term `dividend 
                reinvestment plan' means any arrangement under 
                which dividends on any stock are reinvested in 
                stock identical to the stock with respect to 
                which the dividends are paid.
                  ``(B) Initial stock acquisition treated as 
                acquired in connection with plan.--Stock shall 
                be treated as acquired in connection with a 
                dividend reinvestment plan if such stock is 
                acquired pursuant to such plan or if the 
                dividends paid on such stock are subject to 
                such plan.''.
  (c) Information by Transferors To Aid Brokers.--
          (1) In general.--Subpart B of part III of subchapter 
        A of chapter 61 is amended by inserting after section 
        6045 the following new section:

``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF 
                    COVERED SECURITIES TO BROKERS.

  ``(a) Furnishing of Information.--Every applicable person 
which transfers to a broker (as defined in section 6045(c)(1)) 
a security which is a covered security (as defined in section 
6045(g)(3)) in the hands of such applicable person shall 
furnish to such broker a written statement in such manner and 
setting forth such information as the Secretary may by 
regulations prescribe for purposes of enabling such broker to 
meet the requirements of section 6045(g).
  ``(b) Applicable Person.--For purposes of subsection (a), the 
term `applicable person' means--
          ``(1) any broker (as defined in section 6045(c)(1)), 
        and
          ``(2) any other person as provided by the Secretary 
        in regulations.
  ``(c) Time for Furnishing Statement.--Except as otherwise 
provided by the Secretary, any statement required by subsection 
(a) shall be furnished not later than 15 days after the date of 
the transfer described in such subsection.''.
          (2) Assessable penalties.--Paragraph (2) of section 
        6724(d) (defining payee statement) is amended by 
        redesignating subparagraphs (I) through (CC) as 
        subparagraphs (J) through (DD), respectively, and by 
        inserting after subparagraph (H) the following new 
        subparagraph:
                  ``(I) section 6045A (relating to information 
                required in connection with transfers of 
                covered securities to brokers),''.
          (3) 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 
        6045 the following new item:

``Sec. 6045A. Information required in connection with transfers of 
          covered securities to brokers.''.
  (d) Additional Issuer Information To Aid Brokers.--
          (1) In general.--Subpart B of part III of subchapter 
        A of chapter 61, as amended by subsection (b), is 
        amended by inserting after section 6045A the following 
        new section:

``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED 
                    SECURITIES.

  ``(a) In General.--According to the forms or regulations 
prescribed by the Secretary, any issuer of a specified security 
shall make a return setting forth--
          ``(1) a description of any organizational action 
        which affects the basis of such specified security of 
        such issuer,
          ``(2) the quantitative effect on the basis of such 
        specified security resulting from such action, and
          ``(3) such other information as the Secretary may 
        prescribe.
  ``(b) Time for Filing Return.--Any return required by 
subsection (a) shall be filed not later than the earlier of--
          ``(1) 45 days after the date of the action described 
        in subsection (a), or
          ``(2) January 15 of the year following the calendar 
        year during which such action occurred.
  ``(c) Statements To Be Furnished to Holders of Specified 
Securities or Their Nominees.--According to the forms or 
regulations prescribed by the Secretary, every person required 
to make a return under subsection (a) with respect to a 
specified security shall furnish to the nominee with respect to 
the specified security (or certificate holder if there is no 
nominee) a written statement showing--
          ``(1) the name, address, and phone number of the 
        information contact of the person required to make such 
        return,
          ``(2) the information required to be shown on such 
        return with respect to such security, and
          ``(3) such other information as the Secretary may 
        prescribe.
The written statement required under the preceding sentence 
shall be furnished to the holder on or before January 15 of the 
year following the calendar year during which the action 
described in subsection (a) occurred.
  ``(d) Specified Security.--For purposes of this section, the 
term `specified security' has the meaning given such term by 
section 6045(g)(3)(B). No return shall be required under this 
section with respect to actions described in subsection (a) 
with respect to a specified security which occur before the 
applicable date (as defined in section 6045(g)(3)(C)) with 
respect to such security.
  ``(e) Public Reporting in Lieu of Return.--The Secretary may 
waive the requirements under subsections (a) and (c) with 
respect to a specified security, if the person required to make 
the return under subsection (a) makes publicly available, in 
such form and manner as the Secretary determines necessary to 
carry out the purposes of this section--
          ``(1) the name, address, phone number, and email 
        address of the information contact of such person, and
          ``(2) the information described in paragraphs (1), 
        (2), and (3) of subsection (a).''.
          (2) Assessable penalties.--
                  (A) Subparagraph (B) of section 6724(d)(1) of 
                such Code (defining information return) is 
                amended by redesignating clause (iv) and each 
                of the clauses which follow as clauses (v) 
                through (xxii), respectively, and by inserting 
                after clause (iii) the following new clause:
                          ``(iv) section 6045B(a) (relating to 
                        returns relating to actions affecting 
                        basis of specified securities),''.
                  (B) Paragraph (2) of section 6724(d) of such 
                Code (defining payee statement), as amended by 
                subsection (c)(2), is amended by redesignating 
                subparagraphs (J) through (DD) as subparagraphs 
                (K) through (EE), respectively, and by 
                inserting after subparagraph (I) the following 
                new subparagraph:
                  ``(J) subsections (c) and (e) of section 
                6045B (relating to returns relating to actions 
                affecting basis of specified securities),''.
          (3) Clerical amendment.--The table of sections for 
        subpart B of part III of subchapter A of chapter 61 of 
        such Code, as amended by subsection (b)(3), is amended 
        by inserting after the item relating to section 6045A 
        the following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified 
          securities.''.
  (e) Effective Date.--
          (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall 
        take effect on January 1, 2010.
          (2) Extension of period for statements sent to 
        customers.--The amendments made by subsection (a)(3) 
        shall apply to statements required to be furnished 
        after December 31, 2008.

SEC. 742. 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, 2009''.
  (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 78 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. 743. 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''.
  (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 13 percentage 
points.

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

SEC. 751. SHORT TITLE.

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

SEC. 752. 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 4 and 5 of this Act; and
          (5) makes recommendations for any legislative changes 
        that are needed to facilitate prompt approval of 
        assistance for such projects.

SEC. 753. 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. 754. 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. 755. 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.''.

  Subtitle E--Limitation on Sale, Foreclosure, or Seizure of Property 
                        Owned by Servicemembers

SEC. 761. LIMITATION ON SALE, FORECLOSURE, OR SEIZURE OF PROPERTY OWNED 
                    BY SERVICEMEMBERS DURING ONE-YEAR PERIOD FOLLOWING 
                    PERIOD OF MILITARY SERVICE.

  (a) Limitation.--Section 303(c) of the Servicemembers Civil 
Relief Act is amended by striking ``90 days'' and inserting 
``one year''.
  (b) Effective Date.--The amendment made by subsection (a) 
shall apply with respect to any sale, foreclosure, or seizure 
of property on or after the date of the enactment of this Act.

SEC. 762. PROVISION OF FINANCIAL DISCLOSURE TO SERVICEMEMBERS WHO 
                    DEFAULT ON CERTAIN OBLIGATIONS.

  (a) Provision of Disclosure Required.--Section 303 of the 
Servicemembers Civil Relief Act (50 U.S.C. App. 533) is amended 
by adding at the end the following new subsection:
  ``(e) Provision of Financial Disclosure.--In the case of a 
servicemember who defaults on an obligation described in 
subsection (a) for two consecutive months, the mortgagor or 
loan servicer of the obligation shall provide to the 
servicemember a written financial disclosure describing the 
servicemember's liability with respect to the obligation for 
the period during which a sale, foreclosure, or seizure of the 
property is not valid under subsection (c).''.
  (b) Effective Date.--Subsection (e) of section 303 of the 
Servicemembers Civil Relief Act (50 U.S.C. App. 533), as added 
by subsection (a), shall apply with respect to a servicemember 
who defaults on an obligation on or after the date of the 
enactment of this Act.
                              ----------                              


  TEXT OF THE HOUSE AMENDMENT #3 TO THE SENATE AMENDMENT TO H.R. 3221 
                      MADE IN ORDER UNDER THE RULE

    ``At the end of the matter proposed to be inserted by the 
amendment of the Senate to the text of the bill, add the 
following new section:

SEC. __. RULE OF CONSTRUCTION.

  (a) In General.--No provision of this Act, the Home Owners' 
Loan Act, or title LXII of the Revised Statutes of the United 
States (commonly referred to as the ``National Bank Act'') may 
be construed as preempting the application, to any entity, of 
any State law regulating the foreclosure of residential real 
property in that State or the treatment of foreclosed property.
  (b) No Negative Implication.--This section shall not be 
construed as affecting in any way the applicability of any 
other type of State law to any Federal depository institution 
(as defined in section 3(c)(4) of the Federal Deposit Insurance 
Act) or to any agent or subsidiary of any such depository 
institution.

                                  
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