[House Report 110-767]
[From the U.S. Government Publishing Office]





110th Congress                                                   Report
 2d Session                                                     110-767 
                        HOUSE OF REPRESENTATIVES
_______________________________________________________________________


   PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE HOUSE 
 AMENDMENTS TO THE SENATE AMENDMENT TO THE BILL (H.R. 3221) TO PROVIDE 
              NEEDED HOUSING REFORM AND FOR OTHER PURPOSES

                               __________

                              R E P O R T

                                 of the

                           COMMITTEE ON RULES

                              to accompany

                              H. Res. 1363




   July 22, 2008.--Referred to the House Calendar and ordered to be 
                                printed

   PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE HOUSE 
 AMENDMENTS TO THE SENATE AMENDMENT TO THE BILL (H.R. 3221) TO PROVIDE 
              NEEDED HOUSING REFORM AND FOR OTHER PURPOSES








110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-767

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

 
   PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE HOUSE 
 AMENDMENTS TO THE SENATE AMENDMENT TO THE BILL (H.R. 3221) TO PROVIDE 
              NEEDED HOUSING REFORM AND FOR OTHER PURPOSES

                                _______
                                

   July 22, 2008.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

               Ms. Castor, from the Committee on Rules, 
                        submitted the following

                              R E P O R T

                      [To accompany H. Res. 1363]

    The Committee on Rules, having had under consideration 
House Resolution 1363, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of the Senate 
amendment to the House amendments to the Senate amendment 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 House amendment numbered 
one with the text of the House amendment printed in this 
report. The rule waives all points of order against the motion 
and provides that the Senate amendment and the motion shall be 
considered as read. The rule provides two hours of debate on 
the motion, with 80 minutes equally divided and controlled by 
the chairman and ranking minority member of the Committee on 
Financial Services and 40 minutes equally divided and 
controlled by the chairman and ranking minority member of the 
Committee on Ways and Means. The rule provides that upon 
adoption of the motion specified in the first section of the 
resolution, the House shall be considered to have receded from 
any remaining amendments or disagreements. 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 
includes a waiver of clause 10 of rule XXI regarding PAYGO.

                            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. 574

    Date: July 22, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order a sight-unseen 
substitute amendment that complies with the rules of the House 
if offered by Republican Leader Boehner or his designee.
    Results: Defeated 2-8.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Dreier--Yea; Hastings (WA)--Yea; Slaughter--Nay.

Rules Committee record vote No. 575

    Date: July 22, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order a substitute amendment 
offered by Rep. Garrett.
    Results: Defeated 2-8.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Dreier--Yea; Hastings (WA)--Yea; Slaughter--Nay.

Rules Committee record vote No. 576

    Date: July 22, 2008.
    Measure: Consideration of Senate amendments to H.R. 3221.
    Motion by: Mr. Hastings (WA).
    Summary of motion: To make in order amendment #6 offered by 
Rep. Price (GA) which would eliminate assistance for the 
Community Development Block Grant program.
    Results: Defeated 2-8.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Dreier--Yea; Hastings (WA)--Yea; Slaughter--Nay.

              SUMMARY OF THE HOUSE AMENDMENT MADE IN ORDER

    The amendment incorporates a number of housing-related 
provisions, including GSE reform, FHA refinance, loan 
modification, mortgage licensing, FHA modernization, 
foreclosure protection for veterans, emergency assistance to 
stabilize neighborhoods, housing counseling, mortgage 
disclosure improvement, additional veterans housing matters, 
and housing preservation. The amendment increases Treasury 
authority under existing lines of credit to Freddie Mac, Fannie 
Mae, and the Federal Home Loan Banks for the next 18 months, 
giving Treasury standby authority to buy stock or debt in those 
companies if it determines an emergency exists and the purchase 
is necessary to provide market stability, prevent disruptions 
to availability of mortgages, protect the taxpayer, and restore 
orderly markets. Use of authority will be by mutual agreement 
between Treasury and the individual enterprise. To use the 
authority, the Secretary must make an emergency determination 
that use of the authority is necessary to stabilize markets, 
prevent disruptions in mortgage availability, and protect the 
taxpayer. The authority includes additional provisions to 
protect the taxpayers and provides enhanced oversight of the 
enterprises while standby facility is in place, with the 
Federal Reserve consulting with the new regulator on issues 
concerning the safety and soundness of and risks posed by the 
GSEs. It also includes provisions contained in the Housing 
Assistance Tax Act of 2008, a revenue neutral bill to provide 
tax relief to homebuyers and homeowners. Under this amendment, 
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 $1,000 
for a married couple filing jointly. States would receive a 
temporary increase in low-income housing tax credits and $11 
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. 
Under the amendment, municipal bonds that are guaranteed by 
Federal home loan banks would be eligible for treatment as tax-
exempt bonds. The amendment would also make necessary 
improvements to the low-income housing tax credit and other 
incentives for low-income rental housing. It would also make 
certain reforms to the rules governing real estate investment 
trusts. The amendment also contains Gulf Opportunity Zone-
related provisions and economic stimulus provisions. The cost 
of these provisions in 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. Both offsets have 
previously passed the House of Representatives.

               TEXT OF THE HOUSE AMENDMENT MADE IN ORDER

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                   DIVISION A--HOUSING FINANCE REFORM

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

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

       Subtitle A--Improvement of Safety and Soundness Supervision

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

             Subtitle B--Improvement of Mission Supervision

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

                  Subtitle C--Prompt Corrective Action

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

                     Subtitle D--Enforcement Actions

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

                     Subtitle E--General Provisions

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

                    TITLE II--FEDERAL HOME LOAN BANKS

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

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

                            Subtitle A--OFHEO

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

                Subtitle B--Federal Housing Finance Board

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

                      TITLE IV--HOPE FOR HOMEOWNERS

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

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

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

                         TITLE VI--MISCELLANEOUS

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

                   DIVISION B--FORECLOSURE PREVENTION

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

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 2101. Short title.

               Subtitle A--Building American Homeownership

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

           Subtitle B--Manufactured Housing Loan Modernization

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

      TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

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

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

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

                 TITLE IV--HOUSING COUNSELING RESOURCES

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

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

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

                   TITLE VI--VETERANS HOUSING MATTERS

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

   TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

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

                    TITLE VIII--HOUSING PRESERVATION

         Subtitle A--Preservation Under Federal Housing Programs

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

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

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

                         TITLE IX--MISCELLANEOUS

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

                   DIVISION C--TAX-RELATED PROVISIONS

Sec. 3000. Short title; etc.

                     TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                  Part I--Low-Income Housing Tax Credit

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

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

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

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

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

                    Subtitle B--Single Family Housing

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

                     Subtitle C--General Provisions

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

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

       Subtitle A--Foreign Currency and Other Qualified Activities

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

                  Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

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

                      Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                       Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                      TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

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

                       Subtitle B--Revenue Offsets

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

                   DIVISION A--HOUSING FINANCE REFORM

SEC. 1001. SHORT TITLE.

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

SEC. 1002. DEFINITIONS.

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

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

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

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

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

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

``SEC. 1312. DIRECTOR.

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

SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.

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

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

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

SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

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

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

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

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

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

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

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

SEC. 1106. ASSESSMENTS.

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

SEC. 1107. REGULATIONS AND ORDERS.

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

SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

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

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

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

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

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

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

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

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

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

SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.

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

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

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

SEC. 1111. MINIMUM CAPITAL LEVELS.

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

SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.

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

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

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

SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

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

SEC. 1114. LIMIT ON GOLDEN PARACHUTES.

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

SEC. 1115. REPORTING OF FRAUDULENT LOANS.

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

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

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

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

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

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

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

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

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

             Subtitle B--Improvement of Mission Supervision

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

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

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

          and
          (2) by striking sections 1321 and 1322.

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

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

SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.

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

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

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

SEC. 1124. CONFORMING LOAN LIMITS.

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

``SEC. 1322. HOUSING PRICE INDEX.

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

SEC. 1125. ANNUAL HOUSING REPORT.

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

``SEC. 1324. ANNUAL HOUSING REPORT.

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

SEC. 1126. PUBLIC USE DATABASE.

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

SEC. 1127. REPORTING OF MORTGAGE DATA.

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

SEC. 1128. REVISION OF HOUSING GOALS.

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

``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

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

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

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

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

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

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

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

SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.

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

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

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

                      ``Subpart C--Enforcement''.

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

``SEC. 1341. CEASE AND DESIST PROCEEDINGS.

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

``SEC. 1345. CIVIL MONEY PENALTIES.

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

SEC. 1131. AFFORDABLE HOUSING PROGRAMS.

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

``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

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

``SEC. 1338. HOUSING TRUST FUND.

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

``SEC. 1339. CAPITAL MAGNET FUND.

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

SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.

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

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

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

                  Subtitle C--Prompt Corrective Action

SEC. 1141. CRITICAL CAPITAL LEVELS.

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

SEC. 1142. CAPITAL CLASSIFICATIONS.

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

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

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

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

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

SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
                    ENTITIES.

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

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

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

                    Subtitle D--Enforcement Actions

SEC. 1151. CEASE AND DESIST PROCEEDINGS.

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

SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.

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

SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.

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

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

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

SEC. 1154. ENFORCEMENT AND JURISDICTION.

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

SEC. 1155. CIVIL MONEY PENALTIES.

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

SEC. 1156. CRIMINAL PENALTY.

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

``SEC. 1378. CRIMINAL PENALTY.

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

SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.

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

SEC. 1158. SUBPOENA AUTHORITY.

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

                     Subtitle E--General Provisions

SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.

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

SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES.

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

SEC. 1163. EFFECTIVE DATE.

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

                   TITLE II--FEDERAL HOME LOAN BANKS

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

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

SEC. 1202. DIRECTORS.

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

SEC. 1203. DEFINITIONS.

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

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

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

SEC. 1205. HOUSING GOALS.

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

``SEC. 10C. HOUSING GOALS.

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

SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

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

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

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

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

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

SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.

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

SEC. 1209. VOLUNTARY MERGERS.

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

SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.

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

SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

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

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

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

SEC. 1213. SEMIANNUAL REPORTS.

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

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

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

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

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

SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS.

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

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

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

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

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

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

                           Subtitle A--OFHEO

SEC. 1301. ABOLISHMENT OF OFHEO.

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

SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

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

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

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

SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.

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

               Subtitle B--Federal Housing Finance Board

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

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

SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

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

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

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

SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.

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

                     TITLE IV--HOPE FOR HOMEOWNERS

SEC. 1401. SHORT TITLE.

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

SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.

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

``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.

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

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

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

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

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

SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.

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

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

SEC. 1501. SHORT TITLE.

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

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

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

SEC. 1503. DEFINITIONS.

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

SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

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

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

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

SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

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

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

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

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

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

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

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

SEC. 1510. FEES.

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

SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.

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

SEC. 1512. CONFIDENTIALITY OF INFORMATION.

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

SEC. 1513. LIABILITY PROVISIONS.

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

SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

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

SEC. 1515. STATE EXAMINATION AUTHORITY.

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

SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.

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

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

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

                        TITLE VI--MISCELLANEOUS

SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.

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

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

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

SEC. 1603. CONVERSION OF HUD CONTRACTS.

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

SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.

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

SEC. 1605. SENSE OF THE SENATE.

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

                   DIVISION B--FORECLOSURE PREVENTION

SECTION 2001. SHORT TITLE.

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

SEC. 2002. EMERGENCY DESIGNATION.

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

                 TITLE I--FHA MODERNIZATION ACT OF 2008

SEC. 2101. SHORT TITLE.

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

              Subtitle A--Building American Homeownership

SEC. 2111. SHORT TITLE.

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

SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

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

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

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

SEC. 2114. MORTGAGE INSURANCE PREMIUMS.

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

SEC. 2115. REHABILITATION LOANS.

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

SEC. 2116. DISCRETIONARY ACTION.

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

SEC. 2117. INSURANCE OF CONDOMINIUMS.

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

SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND.

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

SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

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

SEC. 2120. CONFORMING AND TECHNICAL AMENDMENTS.

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

SEC. 2121. INSURANCE OF MORTGAGES.

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

SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.

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

SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.

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

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

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

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

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

SEC. 2125. HOMEOWNERSHIP PRESERVATION.

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

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

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

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

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

SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION.

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

SEC. 2129. FRAUD PREVENTION.

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

SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

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

SEC. 2131. SAVINGS PROVISION.

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

SEC. 2132. IMPLEMENTATION.

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

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

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

          Subtitle B--Manufactured Housing Loan Modernization

SEC. 2141. SHORT TITLE.

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

SEC. 2142. PURPOSES.

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

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

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

SEC. 2144. INSURANCE BENEFITS.

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

SEC. 2145. MAXIMUM LOAN LIMITS.

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

SEC. 2146. INSURANCE PREMIUMS.

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

SEC. 2147. TECHNICAL CORRECTIONS.

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

SEC. 2148. REVISION OF UNDERWRITING CRITERIA.

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

SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

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

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

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

SEC. 2150. LEASEHOLD REQUIREMENTS.

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

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

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

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

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

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

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

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

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

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

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

SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

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

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

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

SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

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

SEC. 2305. COUNSELING INTERMEDIARIES.

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

                 TITLE IV--HOUSING COUNSELING RESOURCES

SEC. 2401. HOUSING COUNSELING RESOURCES.

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

SEC. 2402. CREDIT COUNSELING.

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

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

SEC. 2501. SHORT TITLE.

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

SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.

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

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

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

                   TITLE VI--VETERANS HOUSING MATTERS

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

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

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

  (a) Eligibility.--Chapter 21 of title 38, United States Code, 
is amended by inserting after section 2101 the following new 
section:

``Sec. 2101A. Eligibility for benefits and assistance: members of the 
                    Armed Forces with service-connected disabilities; 
                    individuals residing outside the United States

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

``Sec. 2101. Acquisition and adaptation of housing: eligible 
                    veterans''.

          (B) The heading of section 2102A of such title is 
        amended to read as follows:

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

          (8) Clerical amendments.--The table of sections at 
        the beginning of chapter 21 of title 38, United States 
        Code, is amended--
                  (A) by striking the item relating to section 
                2101 and inserting the following new item:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

SEC. 2701. SHORT TITLE.

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

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

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

                    TITLE VIII--HOUSING PRESERVATION

        Subtitle A--Preservation Under Federal Housing Programs

SEC. 2801. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.

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

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

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

SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.

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

SEC. 2804. PUBLIC HOUSING DISASTER RELIEF.

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

SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING.

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

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

SEC. 2831. SHORT TITLE.

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

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

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

SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE.

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

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

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

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

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

SEC. 2835. OTHER HUD PROGRAMS.

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

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

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

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

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

                        TITLE IX--MISCELLANEOUS

SEC. 2901. HOMELESS ASSISTANCE.

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

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

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

                   DIVISION C--TAX-RELATED PROVISIONS

SECTION 3000. SHORT TITLE; ETC.

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

Sec. 3000. Short title; etc.

                     TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                  Part I--Low-Income Housing Tax Credit

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

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

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

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

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

                    Subtitle B--Single Family Housing

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

                     Subtitle C--General Provisions

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

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

       Subtitle A--Foreign Currency and Other Qualified Activities

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

                  Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

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

                      Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                       Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                      TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

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

                       Subtitle B--Revenue Offsets

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

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART I--LOW-INCOME HOUSING TAX CREDIT

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

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

SEC. 3002. DETERMINATION OF CREDIT RATE.

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

SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

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

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

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

SEC. 3005. TREATMENT OF MILITARY BASIC PAY.

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

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

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

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

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

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

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

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

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

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

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

                   Subtitle B--Single Family Housing

SEC. 3011. FIRST-TIME HOMEBUYER CREDIT.

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

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

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

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

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

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

                     Subtitle C--General Provisions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

SEC. 3031. REVISIONS TO REIT INCOME TESTS.

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

SEC. 3032. REVISIONS TO REIT ASSET TESTS.

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

SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS.

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

                 Subtitle B--Taxable REIT Subsidiaries

SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

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

                        Subtitle C--Dealer Sales

SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR.

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

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

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

                     Subtitle D--Health Care REITs

SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES.

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

                      Subtitle E--Effective Dates

SEC. 3071. EFFECTIVE DATES.

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

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

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

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

SEC. 3082. CERTAIN GO ZONE INCENTIVES.

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

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

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

                      Subtitle B--Revenue Offsets

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

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

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

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

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

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

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

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

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

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

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

                                  
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