Text: H.R.3221 — 110th Congress (2007-2008)All Bill Information (Except Text)

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[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 3221 Enrolled Bill (ENR)]

        H.R.3221

                       One Hundred Tenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Thursday,
            the third day of January, two thousand and eight


                                 An Act


 
        To provide needed housing reform and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION. 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Housing and 
Economic Recovery Act of 2008''.
    (b) Table of Content.--The table of contents for this Act is as 
follows:
Sec. 1. Short title; table of contents.

                   DIVISION A--HOUSING FINANCE REFORM

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

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

       Subtitle A--Improvement of Safety and Soundness Supervision

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

             Subtitle B--Improvement of Mission Supervision

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

                  Subtitle C--Prompt Corrective Action

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

                     Subtitle D--Enforcement Actions

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

                     Subtitle E--General Provisions

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

                    TITLE II--FEDERAL HOME LOAN BANKS

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

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

                            Subtitle A--OFHEO

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

                Subtitle B--Federal Housing Finance Board

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

                      TITLE IV--HOPE FOR HOMEOWNERS

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

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

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

                         TITLE VI--MISCELLANEOUS

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

                   DIVISION B--FORECLOSURE PREVENTION

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

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 2101. Short title.

               Subtitle A--Building American Homeownership

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

           Subtitle B--Manufactured Housing Loan Modernization

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

      TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

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

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

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

                 TITLE IV--HOUSING COUNSELING RESOURCES

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

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

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

                   TITLE VI--VETERANS HOUSING MATTERS

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

   TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

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

                    TITLE VIII--HOUSING PRESERVATION

         Subtitle A--Preservation Under Federal Housing Programs

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

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

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

                         TITLE IX--MISCELLANEOUS

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

                   DIVISION C--TAX-RELATED PROVISIONS

Sec. 3000. Short title; etc.

                     TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                  Part I--Low-Income Housing Tax Credit

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

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

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

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

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

                    Subtitle B--Single Family Housing

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

                     Subtitle C--General Provisions

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

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

       Subtitle A--Foreign Currency and Other Qualified Activities

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

                  Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

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

                      Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                       Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                      TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

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

                       Subtitle B--Revenue Offsets

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

                   DIVISION A--HOUSING FINANCE REFORM

SEC. 1001. SHORT TITLE.

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

SEC. 1002. DEFINITIONS.

    (a) Federal Safety and Soundness Act Definitions.--Section 1303 of 
the Federal Housing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4502) is amended--
        (1) in each of paragraphs (8), (9), (10), and (19), by striking 
    ``Secretary'' each place that term appears and inserting 
    ``Director'';
        (2) by redesignating paragraphs (16) through (19) as paragraphs 
    (21) through (24), respectively;
        (3) by striking paragraphs (13) through (15) and inserting the 
    following:
        ``(19) Office of finance.--The term `Office of Finance' means 
    the Office of Finance of the Federal Home Loan Bank System (or any 
    successor thereto).
        ``(20) Regulated entity.--The term `regulated entity' means--
            ``(A) the Federal National Mortgage Association and any 
        affiliate thereof;
            ``(B) the Federal Home Loan Mortgage Corporation and any 
        affiliate thereof; and
            ``(C) any Federal Home Loan Bank.'';
        (4) by redesignating paragraphs (11) and (12) as paragraphs 
    (17) and (18), respectively;
        (5) by redesignating paragraph (7) as paragraph (12);
        (6) by redesignating paragraphs (8) through (10) as paragraphs 
    (14) through (16), respectively;
        (7) in paragraph (5)--
            (A) by striking ``(5)'' and inserting ``(9)''; and
            (B) by striking ``Office of Federal Housing Enterprise 
        Oversight of the Department of Housing and Urban Development'' 
        and inserting ``Federal Housing Finance Agency'';
        (8) by redesignating paragraph (6) as paragraph (10);
        (9) by redesignating paragraphs (2) through (4) as paragraphs 
    (5) through (7), respectively;
        (10) by inserting after paragraph (7), as redesignated, the 
    following:
        ``(8) Default; in danger of default.--
            ``(A) Default.--The term `default' means, with respect to a 
        regulated entity, any adjudication or other official 
        determination by any court of competent jurisdiction, or the 
        Agency, pursuant to which a conservator, receiver, limited-life 
        regulated entity, or legal custodian is appointed for a 
        regulated entity.
            ``(B) In danger of default.--The term `in danger of 
        default' means a regulated entity with respect to which, in the 
        opinion of the Agency--
                ``(i) the regulated entity is not likely to be able to 
            pay the obligations of the regulated entity in the normal 
            course of business; or
                ``(ii) the regulated entity--

                    ``(I) has incurred or is likely to incur losses 
                that will deplete all or substantially all of its 
                capital; and
                    ``(II) there is no reasonable prospect that the 
                capital of the regulated entity will be replenished.'';

        (11) by inserting after paragraph (1) the following:
        ``(2) Agency.--The term `Agency' means the Federal Housing 
    Finance Agency established under section 1311.
        ``(3) Authorizing statutes.--The term `authorizing statutes' 
    means--
            ``(A) the Federal National Mortgage Association Charter 
        Act;
            ``(B) the Federal Home Loan Mortgage Corporation Act; and
            ``(C) the Federal Home Loan Bank Act.
        ``(4) Board.--The term `Board' means the Federal Housing 
    Finance Oversight Board established under section 1313A.'';
        (12) by inserting after paragraph (10), as redesignated by this 
    section, the following:
        ``(11) Entity-affiliated party.--The term `entity-affiliated 
    party' means--
            ``(A) any director, officer, employee, or controlling 
        stockholder of, or agent for, a regulated entity;
            ``(B) any shareholder, affiliate, consultant, or joint 
        venture partner of a regulated entity, and any other person, as 
        determined by the Director (by regulation or on a case-by-case 
        basis) that participates in the conduct of the affairs of a 
        regulated entity, provided that a member of a Federal Home Loan 
        Bank shall not be deemed to have participated in the affairs of 
        that Bank solely by virtue of being a shareholder of, and 
        obtaining advances from, that Bank;
            ``(C) any independent contractor for a regulated entity 
        (including any attorney, appraiser, or accountant), if--
                ``(i) the independent contractor knowingly or 
            recklessly participates in--

                    ``(I) any violation of any law or regulation;
                    ``(II) any breach of fiduciary duty; or
                    ``(III) any unsafe or unsound practice; and

                ``(ii) such violation, breach, or practice caused, or 
            is likely to cause, more than a minimal financial loss to, 
            or a significant adverse effect on, the regulated entity;
            ``(D) any not-for-profit corporation that receives its 
        principal funding, on an ongoing basis, from any regulated 
        entity; and
            ``(E) the Office of Finance.'';
        (13) by inserting after paragraph (12), as redesignated by this 
    section, the following:
        ``(13) Limited-life regulated entity.--The term `limited-life 
    regulated entity' means an entity established by the Agency under 
    section 1367(i) with respect to a Federal Home Loan Bank in default 
    or in danger of default or with respect to an enterprise in default 
    or in danger of default.''; and
        (14) by adding at the end the following:
        ``(25) Violation.--The term `violation' includes any action 
    (alone or in combination with another or others) for or toward 
    causing, bringing about, participating in, counseling, or aiding or 
    abetting a violation.''.
    (b) References in This Act.--As used in this Act, unless otherwise 
specified--
        (1) the term ``Agency'' means the Federal Housing Finance 
    Agency;
        (2) the term ``Director'' means the Director of the Agency; and
        (3) the terms ``enterprise'', ``regulated entity'', and 
    ``authorizing statutes'' have the same meanings as in section 1303 
    of the Federal Housing Enterprises Financial Safety and Soundness 
    Act of 1992, as amended by this Act.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES
      Subtitle A--Improvement of Safety and Soundness Supervision

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

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

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

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

``SEC. 1312. DIRECTOR.

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

SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.

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

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

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

SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

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

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

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

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

    (a) In General.--Section 1314 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) is 
amended--
        (1) in the section heading, by striking ``enterprises'' and 
    inserting ``regulated entities'';
        (2) by striking ``an enterprise'' each place that term appears 
    and inserting ``a regulated entity'';
        (3) by striking ``the enterprise'' and inserting ``the 
    regulated entity'';
        (4) in subsection (a)--
            (A) by striking the subsection heading and all that follows 
        through ``and operations'' in paragraph (1) and inserting the 
        following:
    ``(a) Regular and Special Reports.--
        ``(1) Regular reports.--The Director may require, by general or 
    specific orders, a regulated entity to submit regular reports, 
    including financial statements determined on a fair value basis, on 
    the condition (including financial condition), management, 
    activities, or operations of the regulated entity, as the Director 
    considers appropriate''; and
            (B) in paragraph (2)--
                (i) by inserting ``, by general or specific orders,'' 
            after ``may also require''; and
                (ii) by striking ``whenever'' and inserting ``on any of 
            the topics specified in paragraph (1) or any other relevant 
            topics, if''; and
        (5) by adding at the end the following:
    ``(c) Penalties for Failure To Make Reports.--
        ``(1) Violations.--It shall be a violation of this section for 
    any regulated entity--
            ``(A) to fail to make, transmit, or publish any report or 
        obtain any information required by the Director under this 
        section, section 309(k) of the Federal National Mortgage 
        Association Charter Act, section 307(c) of the Federal Home 
        Loan Mortgage Corporation Act, or section 20 of the Federal 
        Home Loan Bank Act, within the period of time specified in such 
        provision of law or otherwise by the Director; or
            ``(B) to submit or publish any false or misleading report 
        or information under this section.
        ``(2) Penalties.--
            ``(A) First tier.--
                ``(i) In general.--A violation described in paragraph 
            (1) shall be subject to a penalty of not more than $2,000 
            for each day during which such violation continues, in any 
            case in which--

                    ``(I) the subject regulated entity maintains 
                procedures reasonably adapted to avoid any inadvertent 
                error and the violation was unintentional and a result 
                of such an error; or
                    ``(II) the violation was an inadvertent transmittal 
                or publication of any report which was minimally late.

                ``(ii) Burden of proof.--For purposes of this 
            subparagraph, the regulated entity shall have the burden of 
            proving that the error was inadvertent or that a report was 
            inadvertently transmitted or published late.
            ``(B) Second tier.--A violation described in paragraph (1) 
        shall be subject to a penalty of not more than $20,000 for each 
        day during which such violation continues or such false or 
        misleading information is not corrected, in any case that is 
        not addressed in subparagraph (A) or (C).
            ``(C) Third tier.--A violation described in paragraph (1) 
        shall be subject to a penalty of not more than $1,000,000 per 
        day for each day during which such violation continues or such 
        false or misleading information is not corrected, in any case 
        in which the subject regulated entity committed such violation 
        knowingly or with reckless disregard for the accuracy of any 
        such information or report.
        ``(3) Assessments.--Any penalty imposed under this subsection 
    shall be in lieu of a penalty under section 1376, but shall be 
    assessed and collected by the Director in the manner provided in 
    section 1376 for penalties imposed under that section, and any such 
    assessment (including the determination of the amount of the 
    penalty) shall be otherwise subject to the provisions of section 
    1376.
        ``(4) Hearing.--A regulated entity against which a penalty is 
    assessed under this section shall be afforded an agency hearing if 
    the regulated entity submits a request for a hearing not later than 
    20 days after the date of the issuance of the notice of assessment. 
    Section 1374 shall apply to any such proceedings.''.
    (b) Conforming Amendment.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by striking sections 1327 and 1328.

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

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

SEC. 1106. ASSESSMENTS.

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

SEC. 1107. REGULATIONS AND ORDERS.

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

SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

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

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

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

                    ``(I) in the case of an enterprise, to increase its 
                ratio of core capital to assets.
                    ``(II) in the case of a Federal Home Loan Bank, to 
                increase its ratio of total capital (as such term is 
                defined in section 6(a)(5) of the Federal Home Loan 
                Bank Act (12 U.S.C. 1426(a)(5)) to assets.

                ``(iii) Require the regulated entity to take any other 
            action that the Director determines will better carry out 
            the purposes of this section than any of the actions 
            described in this subparagraph.
        ``(3) Mandatory restrictions.--In complying with paragraph (2), 
    the Director shall take one or more of the actions described in 
    clauses (i) through (iii) of paragraph (2)(B) if--
            ``(A) the Director determines that the regulated entity 
        fails to meet any standard prescribed under subsection (a);
            ``(B) the regulated entity has not corrected the 
        deficiency; and
            ``(C) during the 18-month period before the date on which 
        the regulated entity first failed to meet the standard, the 
        entity underwent extraordinary growth, as defined by the 
        Director.
    ``(c) Other Enforcement Authority Not Affected.--The authority of 
the Director under this section is in addition to any other authority 
of the Director.''.

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

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

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

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

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

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

SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.

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

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

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

SEC. 1111. MINIMUM CAPITAL LEVELS.

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

SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.

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

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

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

SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

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

SEC. 1114. LIMIT ON GOLDEN PARACHUTES.

    Section 1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the 
end the following:
    ``(e) Authority To Regulate or Prohibit Certain Forms of Benefits 
to Affiliated Parties.--
        ``(1) Golden parachutes and indemnification payments.--The 
    Director may prohibit or limit, by regulation or order, any golden 
    parachute payment or indemnification payment.
        ``(2) Factors to be taken into account.--The Director shall 
    prescribe, by regulation, the factors to be considered by the 
    Director in taking any action pursuant to paragraph (1), which may 
    include such factors as--
            ``(A) whether there is a reasonable basis to believe that 
        the affiliated party has committed any fraudulent act or 
        omission, breach of trust or fiduciary duty, or insider abuse 
        with regard to the regulated entity that has had a material 
        effect on the financial condition of the regulated entity;
            ``(B) whether there is a reasonable basis to believe that 
        the affiliated party is substantially responsible for the 
        insolvency of the regulated entity, the appointment of a 
        conservator or receiver for the regulated entity, or the 
        troubled condition of the regulated entity (as defined in 
        regulations prescribed by the Director);
            ``(C) whether there is a reasonable basis to believe that 
        the affiliated party has materially violated any applicable 
        provision of Federal or State law or regulation that has had a 
        material effect on the financial condition of the regulated 
        entity;
            ``(D) whether the affiliated party was in a position of 
        managerial or fiduciary responsibility; and
            ``(E) the length of time that the party was affiliated with 
        the regulated entity, and the degree to which--
                ``(i) the payment reasonably reflects compensation 
            earned over the period of employment; and
                ``(ii) the compensation involved represents a 
            reasonable payment for services rendered.
        ``(3) Certain payments prohibited.--No regulated entity may 
    prepay the salary or any liability or legal expense of any 
    affiliated party if such payment is made--
            ``(A) in contemplation of the insolvency of such regulated 
        entity, or after the commission of an act of insolvency; and
            ``(B) with a view to, or having the result of--
                ``(i) preventing the proper application of the assets 
            of the regulated entity to creditors; or
                ``(ii) preferring one creditor over another.
        ``(4) Golden parachute payment defined.--
            ``(A) In general.--For purposes of this subsection, the 
        term `golden parachute payment' means any payment (or any 
        agreement to make any payment) in the nature of compensation by 
        any regulated entity for the benefit of any affiliated party 
        pursuant to an obligation of such regulated entity that--
                ``(i) is contingent on the termination of such party's 
            affiliation with the regulated entity; and
                ``(ii) is received on or after the date on which--

                    ``(I) the regulated entity became insolvent;
                    ``(II) any conservator or receiver is appointed for 
                such regulated entity; or
                    ``(III) the Director determines that the regulated 
                entity is in a troubled condition (as defined in the 
                regulations of the Director).

            ``(B) Certain payments in contemplation of an event.--Any 
        payment which would be a golden parachute payment but for the 
        fact that such payment was made before the date referred to in 
        subparagraph (A)(ii) shall be treated as a golden parachute 
        payment if the payment was made in contemplation of the 
        occurrence of an event described in any subclause of such 
        subparagraph.
            ``(C) Certain payments not included.--For purposes of this 
        subsection, the term `golden parachute payment' shall not 
        include--
                ``(i) any payment made pursuant to a retirement plan 
            which is qualified (or is intended to be qualified) under 
            section 401 of the Internal Revenue Code of 1986, or other 
            nondiscriminatory benefit plan;
                ``(ii) any payment made pursuant to a bona fide 
            deferred compensation plan or arrangement which the 
            Director determines, by regulation or order, to be 
            permissible; or
                ``(iii) any payment made by reason of the death or 
            disability of an affiliated party.
        ``(5) Other definitions.--For purposes of this subsection, the 
    following definitions shall apply:
            ``(A) Indemnification payment.--Subject to paragraph (6), 
        the term `indemnification payment' means any payment (or any 
        agreement to make any payment) by any regulated entity for the 
        benefit of any person who is or was an affiliated party, to pay 
        or reimburse such person for any liability or legal expense 
        with regard to any administrative proceeding or civil action 
        instituted by the Agency which results in a final order under 
        which such person--
                ``(i) is assessed a civil money penalty;
                ``(ii) is removed or prohibited from participating in 
            conduct of the affairs of the regulated entity; or
                ``(iii) is required to take any affirmative action to 
            correct certain conditions resulting from violations or 
            practices, by order of the Director.
            ``(B) Liability or legal expense.--The term `liability or 
        legal expense' means--
                ``(i) any legal or other professional expense incurred 
            in connection with any claim, proceeding, or action;
                ``(ii) the amount of, and any cost incurred in 
            connection with, any settlement of any claim, proceeding, 
            or action; and
                ``(iii) the amount of, and any cost incurred in 
            connection with, any judgment or penalty imposed with 
            respect to any claim, proceeding, or action.
            ``(C) Payment.--The term `payment' includes--
                ``(i) any direct or indirect transfer of any funds or 
            any asset; and
                ``(ii) any segregation of any funds or assets for the 
            purpose of making, or pursuant to an agreement to make, any 
            payment after the date on which such funds or assets are 
            segregated, without regard to whether the obligation to 
            make such payment is contingent on--

                    ``(I) the determination, after such date, of the 
                liability for the payment of such amount; or
                    ``(II) the liquidation, after such date, of the 
                amount of such payment.

        ``(6) Certain commercial insurance coverage not treated as 
    covered benefit payment.--No provision of this subsection shall be 
    construed as prohibiting any regulated entity from purchasing any 
    commercial insurance policy or fidelity bond, except that, subject 
    to any requirement described in paragraph (5)(A)(iii), such 
    insurance policy or bond shall not cover any legal or liability 
    expense of the regulated entity which is described in paragraph 
    (5)(A).''.

SEC. 1115. REPORTING OF FRAUDULENT LOANS.

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

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

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

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

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

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

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

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

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

             Subtitle B--Improvement of Mission Supervision

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

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

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

        and
        (2) by striking sections 1321 and 1322.

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

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

SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.

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

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

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

SEC. 1124. CONFORMING LOAN LIMITS.

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

``SEC. 1322. HOUSING PRICE INDEX.

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

SEC. 1125. ANNUAL HOUSING REPORT.

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

``SEC. 1324. ANNUAL HOUSING REPORT.

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

SEC. 1126. PUBLIC USE DATABASE.

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

SEC. 1127. REPORTING OF MORTGAGE DATA.

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

SEC. 1128. REVISION OF HOUSING GOALS.

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

``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

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

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

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

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

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

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

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

SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.

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

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

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

                      ``Subpart C--Enforcement''.

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

``SEC. 1341. CEASE AND DESIST PROCEEDINGS.

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

``SEC. 1345. CIVIL MONEY PENALTIES.

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

SEC. 1131. AFFORDABLE HOUSING PROGRAMS.

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

``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

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

``SEC. 1338. HOUSING TRUST FUND.

    ``(a) Establishment and Purpose.--
        ``(1) In general.--The Secretary of Housing and Urban 
    Development (in this section referred to as the `Secretary') shall 
    establish and manage a Housing Trust Fund, which shall be funded 
    with amounts allocated by the enterprises under section 1337 and 
    any amounts as are or may be appropriated, transferred, or credited 
    to such Housing Trust Fund under any other provisions of law. The 
    purpose of the Housing Trust Fund under this section is to provide 
    grants to States (as such term is defined in section 1303) for 
    use--
            ``(A) to increase and preserve the supply of rental housing 
        for extremely low- and very low-income families, including 
        homeless families; and
            ``(B) to increase homeownership for extremely low- and very 
        low-income families.
        ``(2) Federal assistance.--For purposes of the application of 
    Federal civil rights laws, all assistance provided from the Housing 
    Trust Fund shall be considered Federal financial assistance.
    ``(b) Allocations for HOPE Bond Payments.--
        ``(1) In general.--Notwithstanding subsection (c), to help 
    address the mortgage crisis, of the amounts allocated pursuant to 
    clauses (i) and (ii) of section 1337(a)(1)(B) and clauses (i) and 
    (ii) of section 1337(a)(2)(B) in excess of amounts described in 
    section 1337(e)--
            ``(A) 100 percent of such excess shall be used to reimburse 
        the Treasury for payments made pursuant to section 257(w)(1)(C) 
        of the National Housing Act in calendar year 2009;
            ``(B) 50 percent of such excess shall be used to reimburse 
        the Treasury for such payments in calendar year 2010; and
            ``(C) 25 percent of such excess shall be used to reimburse 
        the Treasury for such payments in calendar year 2011.
        ``(2) Excess funds.--At the termination of the HOPE for 
    Homeowners Program established under section 257 of the National 
    Housing Act, if amounts used to reimburse the Treasury under 
    paragraph (1) exceed the total net cost to the Government of the 
    HOPE for Homeowners Program, such amounts shall be used for their 
    original purpose, as described in paragraphs (1)(B) and (2)(B) of 
    section 1337(a).
        ``(3) Treasury fund.--The amounts referred to in subparagraphs 
    (A) through (C) of paragraph (1) shall be deposited into a fund 
    established in the Treasury of the United States by the Secretary 
    of the Treasury for such purpose.
    ``(c) Allocation for Housing Trust Fund in Fiscal Year 2010 and 
Subsequent Years.--
        ``(1) In general.--Except as provided in subsection (b), the 
    Secretary shall distribute the amounts allocated for the Housing 
    Trust Fund under this section to provide affordable housing as 
    described in this subsection.
        ``(2) Permissible designees.--A State receiving grant amounts 
    under this subsection may designate a State housing finance agency, 
    housing and community development entity, tribally designated 
    housing entity (as such term is defined in section 4 of the Native 
    American Housing Assistance and Self-Determination Act of 1997 (25 
    U.S.C. 4103)), or any other qualified instrumentality of the State 
    to receive such grant amounts.
        ``(3) Distribution to states by needs-based formula.--
            ``(A) In general.--The Secretary shall, by regulation, 
        establish a formula within 12 months of the date of enactment 
        of the Federal Housing Finance Regulatory Reform Act of 2008, 
        to distribute amounts made available under this subsection to 
        each State to provide affordable housing to extremely low- and 
        very low-income households.
            ``(B) Basis for formula.--The formula required under 
        subparagraph (A) shall include the following:
                ``(i) The ratio of the shortage of standard rental 
            units both affordable and available to extremely low-income 
            renter households in the State to the aggregate shortage of 
            standard rental units both affordable and available to 
            extremely low-income renter households in all the States.
                ``(ii) The ratio of the shortage of standard rental 
            units both affordable and available to very low-income 
            renter households in the State to the aggregate shortage of 
            standard rental units both affordable and available to very 
            low-income renter households in all the States.
                ``(iii) The ratio of extremely low-income renter 
            households in the State living with either (I) incomplete 
            kitchen or plumbing facilities, (II) more than 1 person per 
            room, or (III) paying more than 50 percent of income for 
            housing costs, to the aggregate number of extremely low-
            income renter households living with either (IV) incomplete 
            kitchen or plumbing facilities, (V) more than 1 person per 
            room, or (VI) paying more than 50 percent of income for 
            housing costs in all the States.
                ``(iv) The ratio of very low-income renter households 
            in the State paying more than 50 percent of income on rent 
            relative to the aggregate number of very low-income renter 
            households paying more than 50 percent of income on rent in 
            all the States.
                ``(v) The resulting sum calculated from the factors 
            described in clauses (i) through (iv) shall be multiplied 
            by the relative cost of construction in the State. For 
            purposes of this subclause, the term `cost of 
            construction'--

                    ``(I) means the cost of construction or building 
                rehabilitation in the State relative to the national 
                cost of construction or building rehabilitation; and
                    ``(II) shall be calculated such that values higher 
                than 1.0 indicate that the State's construction costs 
                are higher than the national average, a value of 1.0 
                indicates that the State's construction costs are 
                exactly the same as the national average, and values 
                lower than 1.0 indicate that the State's cost of 
                construction are lower than the national average.

            ``(C) Priority.--The formula required under subparagraph 
        (A) shall give priority emphasis and consideration to the 
        factor described in subparagraph (B)(i).
        ``(4) Allocation of grant amounts.--
            ``(A) Notice.--Not later than 60 days after the date that 
        the Secretary determines the formula amounts described in 
        paragraph (3), the Secretary shall caused to be published in 
        the Federal Register a notice that such amounts shall be so 
        available.
            ``(B) Grant amount.--In each fiscal year other than fiscal 
        year 2009, the Secretary shall make a grant to each State in an 
        amount that is equal to the formula amount determined under 
        paragraph (3) for that State.
            ``(C) Minimum state allocations.--If the formula amount 
        determined under paragraph (3) for a fiscal year would allocate 
        less than $3,000,000 to any of the 50 States of the United 
        States or the District of Columbia, the allocation for such 
        State of the United States or the District of Columbia shall be 
        $3,000,000, and the increase shall be deducted pro rata from 
        the allocations made to all other of the States (as such term 
        is defined in section 1303).
        ``(5) Allocation plans required.--
            ``(A) In general.--For each year that a State or State 
        designated entity receives a grant under this subsection, the 
        State or State designated entity shall establish an allocation 
        plan. Such plan shall--
                ``(i) set forth a plan for the distribution of grant 
            amounts received by the State or State designated entity 
            for such year;
                ``(ii) be based on priority housing needs, as 
            determined by the State or State designated entity in 
            accordance with the regulations established under 
            subsection (g)(2)(D);
                ``(iii) comply with paragraph (6); and
                ``(iv) include performance goals that comply with the 
            requirements established by the Secretary pursuant to 
            subsection (g)(2).
            ``(B) Establishment.--In establishing an allocation plan 
        under this paragraph, a State or State designated entity 
        shall--
                ``(i) notify the public of the establishment of the 
            plan;
                ``(ii) provide an opportunity for public comments 
            regarding the plan;
                ``(iii) consider any public comments received regarding 
            the plan; and
                ``(iv) make the completed plan available to the public.
            ``(C) Contents.--An allocation plan of a State or State 
        designated entity under this paragraph shall set forth the 
        requirements for eligible recipients under paragraph (8) to 
        apply for such grant amounts, including a requirement that each 
        such application include--
                ``(i) a description of the eligible activities to be 
            conducted using such assistance; and
                ``(ii) a certification by the eligible recipient 
            applying for such assistance that any housing units 
            assisted with such assistance will comply with the 
            requirements under this section.
        ``(6) Selection of activities funded using housing trust fund 
    grant amounts.--Grant amounts received by a State or State 
    designated entity under this subsection may be used, or committed 
    for use, only for activities that--
            ``(A) are eligible under paragraph (7) for such use;
            ``(B) comply with the applicable allocation plan of the 
        State or State designated entity under paragraph (5); and
            ``(C) are selected for funding by the State or State 
        designated entity in accordance with the process and criteria 
        for such selection established pursuant to subsection 
        (g)(2)(D).
        ``(7) Eligible activities.--Grant amounts allocated to a State 
    or State designated entity under this subsection shall be eligible 
    for use, or for commitment for use, only for assistance for--
            ``(A) the production, preservation, and rehabilitation of 
        rental housing, including housing under the programs identified 
        in section 1335(a)(2)(B) and for operating costs, except that 
        not less than 75 percent of such grant amounts shall be used 
        for the benefit only of extremely low-income families or 
        families with incomes at or below the poverty line (as such 
        term is defined in section 673 of the Omnibus Budget 
        Reconciliation Act of 1981 (42 U.S.C. 9902), including any 
        revision required by such section) applicable to a family of 
        the size involved, and not more than 25 percent for the benefit 
        only of very low-income families; and
            ``(B) the production, preservation, and rehabilitation of 
        housing for homeownership, including such forms as down payment 
        assistance, closing cost assistance, and assistance for 
        interest rate buy-downs, that--
                ``(i) is available for purchase only for use as a 
            principal residence by families that qualify both as--

                    ``(I) extremely low- and very low-income families 
                at the times described in subparagraphs (A) through (C) 
                of section 215(b)(2) of the Cranston-Gonzalez National 
                Affordable Housing Act (42 U.S.C. 12745(b)(2)); and
                    ``(II) first-time homebuyers, as such term is 
                defined in section 104 of the Cranston-Gonzalez 
                National Affordable Housing Act (42 U.S.C. 12704), 
                except that any reference in such section to assistance 
                under title II of such Act shall for purposes of this 
                subsection be considered to refer to assistance from 
                affordable housing fund grant amounts;

                ``(ii) has an initial purchase price that meets the 
            requirements of section 215(b)(1) of the Cranston-Gonzalez 
            National Affordable Housing Act;
                ``(iii) is subject to the same resale restrictions 
            established under section 215(b)(3) of the Cranston-
            Gonzalez National Affordable Housing Act and applicable to 
            the participating jurisdiction that is the State in which 
            such housing is located; and
                ``(iv) is made available for purchase only by, or in 
            the case of assistance under this subsection, is made 
            available only to homebuyers who have, before purchase 
            completed a program of independent financial education and 
            counseling from an eligible organization that meets the 
            requirements of section 132 of the Federal Housing Finance 
            Regulatory Reform Act of 2008.
        ``(8) Tenant protections and public participation.--All amounts 
    from the Trust Fund shall be allocated in accordance with, and any 
    eligible activities carried out in whole or in part with grant 
    amounts under this subtitle (including housing provided with such 
    grant amounts) shall comply with and be operated in compliance 
    with--
            ``(A) laws relating to tenant protections and tenant rights 
        to participate in decision making regarding their residences;
            ``(B) laws requiring public participation, including laws 
        relating to Consolidated Plans, Qualified Allocation Plans, and 
        Public Housing Agency Plans; and
            ``(C) fair housing laws and laws regarding accessibility in 
        federally assisted housing, including section 504 of the 
        Rehabilitation Act of 1973.
        ``(9) Eligible recipients.--Grant amounts allocated to a State 
    or State designated entity under this subsection may be provided 
    only to a recipient that is an organization, agency, or other 
    entity (including a for-profit entity or a nonprofit entity) that--
            ``(A) has demonstrated experience and capacity to conduct 
        an eligible activity under paragraph (7), as evidenced by its 
        ability to--
                ``(i) own, construct or rehabilitate, manage, and 
            operate an affordable multifamily rental housing 
            development;
                ``(ii) design, construct or rehabilitate, and market 
            affordable housing for homeownership; or
                ``(iii) provide forms of assistance, such as down 
            payments, closing costs, or interest rate buy-downs for 
            purchasers;
            ``(B) demonstrates the ability and financial capacity to 
        undertake, comply, and manage the eligible activity;
            ``(C) demonstrates its familiarity with the requirements of 
        any other Federal, State, or local housing program that will be 
        used in conjunction with such grant amounts to ensure 
        compliance with all applicable requirements and regulations of 
        such programs; and
            ``(D) makes such assurances to the State or State 
        designated entity as the Secretary shall, by regulation, 
        require to ensure that the recipient will comply with the 
        requirements of this subsection during the entire period that 
        begins upon selection of the recipient to receive such grant 
        amounts and ending upon the conclusion of all activities under 
        paragraph (8) that are engaged in by the recipient and funded 
        with such grant amounts.
        ``(10) Limitations on use.--
            ``(A) Required amount for homeownership activities.--Of the 
        aggregate amount allocated to a State or State designated 
        entity under this subsection not more than 10 percent shall be 
        used for activities under subparagraph (B) of paragraph (7).
            ``(B) Deadline for commitment or use.--Grant amounts 
        allocated to a State or State designated entity under this 
        subsection shall be used or committed for use within 2 years of 
        the date that such grant amounts are made available to the 
        State or State designated entity. The Secretary shall recapture 
        any such amounts not so used or committed for use and 
        reallocate such amounts under this subsection in the first year 
        after such recapture.
            ``(C) Use of returns.--The Secretary shall, by regulation, 
        provide that any return on a loan or other investment of any 
        grant amount used by a State or State designated entity to 
        provide a loan under this subsection shall be treated, for 
        purposes of availability to and use by the State or State 
        designated entity, as a grant amount authorized under this 
        subsection.
            ``(D) Prohibited uses.--The Secretary shall, by 
        regulation--
                ``(i) set forth prohibited uses of grant amounts 
            allocated under this subsection, which shall include use 
            for--

                    ``(I) political activities;
                    ``(II) advocacy;
                    ``(III) lobbying, whether directly or through other 
                parties;
                    ``(IV) counseling services;
                    ``(V) travel expenses; and
                    ``(VI) preparing or providing advice on tax 
                returns;

            and for the purposes of this subparagraph, the prohibited 
            use of funds for political activities includes influencing 
            the selection, nomination, election, or appointment of one 
            or more candidates to any Federal, State or local office as 
            codified in section 501 of the Internal Revenue Code of 
            1986 (26 U.S.C. 501);
                ``(ii) provide that, except as provided in clause 
            (iii), grant amounts of a State or State designated entity 
            may not be used for administrative, outreach, or other 
            costs of--

                    ``(I) the State or State designated entity; or
                    ``(II) any other recipient of such grant amounts; 
                and

                ``(iii) limit the amount of any grant amounts for a 
            year that may be used by the State or State designated 
            entity for administrative costs of carrying out the program 
            required under this subsection, including home ownership 
            counseling, to a percentage of such grant amounts of the 
            State or State designated entity for such year, which may 
            not exceed 10 percent.
            ``(E) Prohibition of consideration of use for meeting 
        housing goals or duty to serve.--In determining compliance with 
        the housing goals under this subpart and the duty to serve 
        underserved markets under section 1335, the Director may not 
        consider any grant amounts used under this section for eligible 
        activities under paragraph (7). The Director shall give credit 
        toward the achievement of such housing goals and such duty to 
        serve underserved markets to purchases by the enterprises of 
        mortgages for housing that receives funding from such grant 
        amounts, but only to the extent that such purchases by the 
        enterprises are funded other than with such grant amounts.
    ``(d) Reduction for Failure to Obtain Return of Misused Funds.--If 
in any year a State or State designated entity fails to obtain 
reimbursement or return of the full amount required under subsection 
(e)(1)(B) to be reimbursed or returned to the State or State designated 
entity during such year--
        ``(1) except as provided in paragraph (2)--
            ``(A) the amount of the grant for the State or State 
        designated entity for the succeeding year, as determined 
        pursuant to this section, shall be reduced by the amount by 
        which such amounts required to be reimbursed or returned exceed 
        the amount actually reimbursed or returned; and
            ``(B) the amount of the grant for the succeeding year for 
        each other State or State designated entity whose grant is not 
        reduced pursuant to subparagraph (A) shall be increased by the 
        amount determined by applying the formula established pursuant 
        to this section to the total amount of all reductions for all 
        State or State designated entities for such year pursuant to 
        subparagraph (A); or
        ``(2) in any case in which such failure to obtain reimbursement 
    or return occurs during a year immediately preceding a year in 
    which grants under this section will not be made, the State or 
    State designated entity shall pay to the Secretary for reallocation 
    among the other grantees an amount equal to the amount of the 
    reduction for the entity that would otherwise apply under paragraph 
    (1)(A).
    ``(e) Accountability of Recipients and Grantees.--
        ``(1) Recipients.--
            ``(A) Tracking of funds.--The Secretary shall--
                ``(i) require each State or State designated entity to 
            develop and maintain a system to ensure that each recipient 
            of assistance under this section uses such amounts in 
            accordance with this section, the regulations issued under 
            this section, and any requirements or conditions under 
            which such amounts were provided; and
                ``(ii) establish minimum requirements for agreements, 
            between the State or State designated entity and 
            recipients, regarding assistance under this section, which 
            shall include--

                    ``(I) appropriate periodic financial and project 
                reporting, record retention, and audit requirements for 
                the duration of the assistance to the recipient to 
                ensure compliance with the limitations and requirements 
                of this section and the regulations under this section; 
                and
                    ``(II) any other requirements that the Secretary 
                determines are necessary to ensure appropriate 
                administration and compliance.

            ``(B) Misuse of funds.--
                ``(i) Reimbursement requirement.--If any recipient of 
            assistance under this section is determined, in accordance 
            with clause (ii), to have used any such amounts in a manner 
            that is materially in violation of this section, the 
            regulations issued under this section, or any requirements 
            or conditions under which such amounts were provided, the 
            State or State designated entity shall require that, within 
            12 months after the determination of such misuse, the 
            recipient shall reimburse the State or State designated 
            entity for such misused amounts and return to the State or 
            State designated entity any such amounts that remain unused 
            or uncommitted for use. The remedies under this clause are 
            in addition to any other remedies that may be available 
            under law.
                ``(ii) Determination.--A determination is made in 
            accordance with this clause if the determination is made by 
            the Secretary or made by the State or State designated 
            entity, provided that--

                    ``(I) the State or State designated entity provides 
                notification of the determination to the Secretary for 
                review, in the discretion of the Secretary, of the 
                determination; and
                    ``(II) the Secretary does not subsequently reverse 
                the determination.

        ``(2) Grantees.--
            ``(A) Report.--
                ``(i) In general.--The Secretary shall require each 
            State or State designated entity receiving grant amounts in 
            any given year under this section to submit a report, for 
            such year, to the Secretary that--

                    ``(I) describes the activities funded under this 
                section during such year with such grant amounts; and
                    ``(II) the manner in which the State or State 
                designated entity complied during such year with any 
                allocation plan established pursuant to subsection (c).

                ``(ii) Public availability.--The Secretary shall make 
            such reports pursuant to this subparagraph publicly 
            available.
            ``(B) Misuse of funds.--If the Secretary determines, after 
        reasonable notice and opportunity for hearing, that a State or 
        State designated entity has failed to comply substantially with 
        any provision of this section, and until the Secretary is 
        satisfied that there is no longer any such failure to comply, 
        the Secretary shall--
                ``(i) reduce the amount of assistance under this 
            section to the State or State designated entity by an 
            amount equal to the amount of grant amounts which were not 
            used in accordance with this section;
                ``(ii) require the State or State designated entity to 
            repay the Secretary any amount of the grant which was not 
            used in accordance with this section;
                ``(iii) limit the availability of assistance under this 
            section to the State or State designated entity to 
            activities or recipients not affected by such failure to 
            comply; or
                ``(iv) terminate any assistance under this section to 
            the State or State designated entity.
    ``(f) Definitions.--For purposes of this section, the following 
definitions shall apply:
        ``(1) Extremely low-income renter household.--The term 
    `extremely low-income renter household' means a household whose 
    income is not in excess of 30 percent of the area median income, 
    with adjustments for smaller and larger families, as determined by 
    the Secretary.
        ``(2) Recipient.--The term `recipient' means an individual or 
    entity that receives assistance from a State or State designated 
    entity from amounts made available to the State or State designated 
    entity under this section.
        ``(3) Shortage of standard rental units both affordable and 
    available to extremely low-income renter households.--
            ``(A) In general.--The term `shortage of standard rental 
        units both affordable and available to extremely low-income 
        renter households' means for any State or other geographical 
        area the gap between--
                ``(i) the number of units with complete plumbing and 
            kitchen facilities with a rent that is 30 percent or less 
            of 30 percent of the adjusted area median income as 
            determined by the Secretary that are occupied by extremely 
            low-income renter households or are vacant for rent; and
                ``(ii) the number of extremely low-income renter 
            households.
            ``(B) Rule of construction.--If the number of units 
        described in subparagraph (A)(i) exceeds the number of 
        extremely low-income households as described in subparagraph 
        (A)(ii), there is no shortage.
        ``(4) Shortage of standard rental units both affordable and 
    available to very low-income renter households.--
            ``(A) In general.--The term `shortage of standard rental 
        units both affordable and available to very low-income renter 
        households' means for any State or other geographical area the 
        gap between--
                ``(i) the number of units with complete plumbing and 
            kitchen facilities with a rent that is 30 percent or less 
            of 50 percent of the adjusted area median income as 
            determined by the Secretary that are occupied by very low-
            income renter households or are vacant for rent; and
                ``(ii) the number of very low-income renter households.
            ``(B) Rule of construction.--If the number of units 
        described in subparagraph (A)(i) exceeds the number of very 
        low-income households as described in subparagraph (A)(ii), 
        there is no shortage.
        ``(5) Very low-income family.--The term `very low-income 
    family' has the meaning given such term in section 1303, except 
    that such term includes any family that resides in a rural area 
    that has an income that does not exceed the poverty line (as such 
    term is defined in section 673(2) of the Omnibus Budget 
    Reconciliation Act of 1981 (42 U.S.C. 9902(2)), including any 
    revision required by such section) applicable to a family of the 
    size involved.
        ``(6) Very low-income renter households.--The term `very low-
    income renter households' means a household whose income is in 
    excess of 30 percent but not greater than 50 percent of the area 
    median income, with adjustments for smaller and larger families, as 
    determined by the Secretary.
    ``(g) Regulations.--
        ``(1) In general.--The Secretary shall issue regulations to 
    carry out this section.
        ``(2) Required contents.--The regulations issued under this 
    subsection shall include--
            ``(A) a requirement that the Secretary ensure that the use 
        of grant amounts under this section by States or State 
        designated entities is audited not less than annually to ensure 
        compliance with this section;
            ``(B) authority for the Secretary to audit, provide for an 
        audit, or otherwise verify a State or State designated entity's 
        activities to ensure compliance with this section;
            ``(C) a requirement that, for the purposes of subparagraphs 
        (A) and (B), any financial statement submitted by a grantee or 
        recipient to the Secretary shall be reviewed by an independent 
        certified public accountant in accordance with Statements on 
        Standards for Accounting and Review Services, issued by the 
        American Institute of Certified Public Accountants;
            ``(D) requirements for a process for application to, and 
        selection by, each State or State designated entity for 
        activities meeting the State or State designated entity's 
        priority housing needs to be funded with grant amounts under 
        this section, which shall provide for priority in funding to be 
        based upon--
                ``(i) geographic diversity;
                ``(ii) ability to obligate amounts and undertake 
            activities so funded in a timely manner;
                ``(iii) in the case of rental housing projects under 
            subsection (c)(7)(A), the extent to which rents for units 
            in the project funded are affordable, especially for 
            extremely low-income families;
                ``(iv) in the case of rental housing projects under 
            subsection (c)(7)(A), the extent of the duration for which 
            such rents will remain affordable;
                ``(v) the extent to which the application makes use of 
            other funding sources; and
                ``(vi) the merits of an applicant's proposed eligible 
            activity;
            ``(E) requirements to ensure that grant amounts provided to 
        a State or State designated entity under this section that are 
        used for rental housing under subsection (c)(7)(A) are used 
        only for the benefit of extremely low- and very low-income 
        families; and
            ``(F) requirements and standards for establishment, by a 
        State or State designated entity, for use of grant amounts in 
        2009 and subsequent years of performance goals, benchmarks, and 
        timetables for the production, preservation, and rehabilitation 
        of affordable rental and homeownership housing with such grant 
        amounts.
    ``(h) Affordable Housing Trust Fund.--If, after the date of 
enactment of the Federal Housing Finance Regulatory Reform Act of 2008, 
in any year, there is enacted any provision of Federal law establishing 
an affordable housing trust fund other than under this title for use 
only for grants to provide affordable rental housing and affordable 
homeownership opportunities, and the subsequent year is a year referred 
to in subsection (c), the Secretary shall in such subsequent year and 
any remaining years referred to in subsection (c) transfer to such 
affordable housing trust fund the aggregate amount allocated pursuant 
to subsection (c) in such year. Notwithstanding any other provision of 
law, assistance provided using amounts transferred to such affordable 
housing trust fund pursuant to this subsection may not be used for any 
of the activities specified in clauses (i) through (vi) of subsection 
(c)(9)(D).
    ``(i) Funding Accountability and Transparency.--Any grant under 
this section to a grantee by a State or State designated entity, any 
assistance provided to a recipient by a State or State designated 
entity, and any grant, award, or other assistance from an affordable 
housing trust fund referred to in subsection (h) shall be considered a 
Federal award for purposes of the Federal Funding Accountability and 
Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the request of the 
Director of the Office of Management and Budget, the Secretary shall 
obtain and provide such information regarding any such grants, 
assistance, and awards as the Director of the Office of Management and 
Budget considers necessary to comply with the requirements of such Act, 
as applicable, pursuant to the preceding sentence.

``SEC. 1339. CAPITAL MAGNET FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the Capital Magnet Fund, 
which shall be a special account within the Community Development 
Financial Institutions Fund.
    ``(b) Deposits to Trust Fund.--The Capital Magnet Fund shall 
consist of--
        ``(1) any amounts transferred to the Fund pursuant to section 
    1337; and
        ``(2) any amounts as are or may be appropriated, transferred, 
    or credited to such Fund under any other provisions of law.
    ``(c) Expenditures From Trust Fund.--Amounts in the Capital Magnet 
Fund shall be available to the Secretary of the Treasury to carry out a 
competitive grant program to attract private capital for and increase 
investment in--
        ``(1) the development, preservation, rehabilitation, or 
    purchase of affordable housing for primarily extremely low-, very 
    low-, and low-income families; and
        ``(2) economic development activities or community service 
    facilities, such as day care centers, workforce development 
    centers, and health care clinics, which in conjunction with 
    affordable housing activities implement a concerted strategy to 
    stabilize or revitalize a low-income area or underserved rural 
    area.
    ``(d) Federal Assistance.--For purposes of the application of 
Federal civil rights laws, all assistance provided using amounts in the 
Capital Magnet Fund shall be considered Federal financial assistance.
    ``(e) Eligible Grantees.--A grant under this section may be made, 
pursuant to such requirements as the Secretary of the Treasury shall 
establish for experience and success in attracting private financing 
and carrying out the types of activities proposed under the application 
of the grantee, only to--
        ``(1) a Treasury certified community development financial 
    institution; or
        ``(2) a nonprofit organization having as 1 of its principal 
    purposes the development or management of affordable housing.
    ``(f) Eligible Uses.--Grant amounts awarded from the Capital Magnet 
Fund pursuant to this section may be used for the purposes described in 
paragraphs (1) and (2) of subsection (c), including for the following 
uses:
        ``(1) To provide loan loss reserves.
        ``(2) To capitalize a revolving loan fund.
        ``(3) To capitalize an affordable housing fund.
        ``(4) To capitalize a fund to support activities described in 
    subsection (c)(2).
        ``(5) For risk-sharing loans.
    ``(g) Applications.--
        ``(1) In general.--The Secretary of the Treasury shall provide, 
    in a competitive application process established by regulation, for 
    eligible grantees under subsection (e) to submit applications for 
    Capital Magnet Fund grants to the Secretary at such time and in 
    such manner as the Secretary shall determine.
        ``(2) Content of application.--The application required under 
    paragraph (1) shall include a detailed description of--
            ``(A) the types of affordable housing, economic, and 
        community revitalization projects that support or sustain 
        residents of an affordable housing project funded by a grant 
        under this section for which such grant amounts would be used, 
        including the proposed use of eligible grants as authorized 
        under this section;
            ``(B) the types, sources, and amounts of other funding for 
        such projects; and
            ``(C) the expected time frame of any grant used for such 
        project.
    ``(h) Grant Limitation.--
        ``(1) In general.--Any 1 eligible grantee and its subsidiaries 
    and affiliates may not be awarded more than 15 percent of the 
    aggregate funds available for grants during any year from the 
    Capital Magnet Fund.
        ``(2) Geographic diversity.--
            ``(A) Goal.--The Secretary of the Treasury shall seek to 
        fund activities in geographically diverse areas of economic 
        distress, including metropolitan and underserved rural areas in 
        every State.
            ``(B) Diversity defined.--For purposes of this paragraph, 
        geographic diversity includes those areas that meet objective 
        criteria of economic distress developed by the Secretary of the 
        Treasury, which may include--
                ``(i) the percentage of low-income families or the 
            extent of poverty;
                ``(ii) the rate of unemployment or underemployment;
                ``(iii) extent of blight and disinvestment;
                ``(iv) projects that target extremely low-, very low-, 
            and low-income families in or outside a designated economic 
            distress area; or
                ``(v) any other criteria designated by the Secretary of 
            the Treasury.
        ``(3) Leverage of funds.--Each grant from the Capital Magnet 
    Fund awarded under this section shall be reasonably expected to 
    result in eligible housing, or economic and community development 
    projects that support or sustain an affordable housing project 
    funded by a grant under this section whose aggregate costs total at 
    least 10 times the grant amount.
        ``(4) Commitment for use deadline.--Amounts made available for 
    grants under this section shall be committed for use within 2 years 
    of the date of such allocation. The Secretary of the Treasury shall 
    recapture into the Capital Magnet Fund any amounts not so used or 
    committed for use and allocate such amounts in the first year after 
    such recapture.
        ``(5) Prohibited uses.--The Secretary shall, by regulation, set 
    forth prohibited uses of grant amounts awarded under this section, 
    which shall include use for--
            ``(A) political activities;
            ``(B) advocacy;
            ``(C) lobbying, whether directly or through other parties;
            ``(D) counseling services;
            ``(E) travel expenses; and
            ``(F) preparing or providing advice on tax returns;
    and for the purposes of this paragraph, the prohibited use of funds 
    for political activities includes influencing the selection, 
    nomination, election, or appointment of one or more candidates to 
    any Federal, State or local office as codified in section Sec. 501 
    of the Internal Revenue Code of 1986 (26 U.S.C. 501).
        ``(6) Additional lobbying restrictions.--No assistance or 
    amounts made available under this section may be expended by an 
    eligible grantee to pay any person to influence or attempt to 
    influence any agency, elected official, officer or employee of a 
    State or local government in connection with the making, award, 
    extension, continuation, renewal, amendment, or modification of any 
    State or local government contract, grant, loan, or cooperative 
    agreement as such terms are defined in section 1352 of title 31, 
    United States Code.
        ``(7) Prohibition of consideration of use for meeting housing 
    goals or duty to serve.--In determining the compliance of the 
    enterprises with the housing goals under this section and the duty 
    to serve underserved markets under section 1335, the Director of 
    the Federal Housing Finance Agency may not consider any Capital 
    Magnet Fund amounts used under this section for eligible activities 
    under subsection (f). The Director of the Federal Housing Finance 
    Agency shall give credit toward the achievement of such housing 
    goals and such duty to serve underserved markets to purchases by 
    the enterprises of mortgages for housing that receives funding from 
    Capital Magnet Fund grant amounts, but only to the extent that such 
    purchases by the enterprises are funded other than with such grant 
    amounts.
        ``(8) Accountability of recipients and grantees.--
            ``(A) Tracking of funds.--The Secretary of the Treasury 
        shall--
                ``(i) require each grantee to develop and maintain a 
            system to ensure that each recipient of assistance from the 
            Capital Magnet Fund uses such amounts in accordance with 
            this section, the regulations issued under this section, 
            and any requirements or conditions under which such amounts 
            were provided; and
                ``(ii) establish minimum requirements for agreements, 
            between the grantee and the Capital Magnet Fund, regarding 
            assistance from the Capital Magnet Fund, which shall 
            include--

                    ``(I) appropriate periodic financial and project 
                reporting, record retention, and audit requirements for 
                the duration of the grant to the recipient to ensure 
                compliance with the limitations and requirements of 
                this section and the regulations under this section; 
                and
                    ``(II) any other requirements that the Secretary 
                determines are necessary to ensure appropriate grant 
                administration and compliance.

            ``(B) Misuse of funds.--If the Secretary of the Treasury 
        determines, after reasonable notice and opportunity for 
        hearing, that a grantee has failed to comply substantially with 
        any provision of this section and until the Secretary is 
        satisfied that there is no longer any such failure to comply, 
        the Secretary shall--
                ``(i) reduce the amount of assistance under this 
            section to the grantee by an amount equal to the amount of 
            Capital Magnet Fund grant amounts which were not used in 
            accordance with this section;
                ``(ii) require the grantee to repay the Secretary any 
            amount of the Capital Magnet Fund grant amounts which were 
            not used in accordance with this section;
                ``(iii) limit the availability of assistance under this 
            section to the grantee to activities or recipients not 
            affected by such failure to comply; or
                ``(iv) terminate any assistance under this section to 
            the grantee.
    ``(i) Periodic Reports.--
        ``(1) In general.--The Secretary of the Treasury shall submit a 
    report, on a periodic basis, to the Committee on Banking, Housing, 
    and Urban Affairs of the Senate and the Committee on Financial 
    Services of the House of Representatives describing the activities 
    to be funded under this section.
        ``(2) Reports available to public.--The Secretary of the 
    Treasury shall make the reports required under paragraph (1) 
    publicly available.
    ``(j) Regulations.--
        ``(1) In general.--The Secretary of the Treasury shall issue 
    regulations to carry out this section.
        ``(2) Required contents.--The regulations issued under this 
    subsection shall include--
            ``(A) authority for the Secretary to audit, provide for an 
        audit, or otherwise verify an enterprise's activities, to 
        ensure compliance with this section;
            ``(B) a requirement that the Secretary ensure that the 
        allocation of each enterprise is audited not less than annually 
        to ensure compliance with this section;
            ``(C) a requirement that, for the purposes of subparagraphs 
        (A) and (B), any financial statement submitted by a grantee to 
        the Secretary shall be reviewed by an independent certified 
        public accountant in accordance with Statements on Standards 
        for Accounting and Review Services, issued by the American 
        Institute of Certified Public Accountants; and
            ``(D) requirements for a process for application to, and 
        selection by, the Secretary for activities to be funded with 
        amounts from the Capital Magnet Fund, which shall provide 
        that--
                ``(i) funds be fairly distributed to urban, suburban, 
            and rural areas; and
                ``(ii) selection shall be based upon specific criteria, 
            including a prioritization of funding based upon--

                    ``(I) the ability to use such funds to generate 
                additional investments;
                    ``(II) affordable housing need (taking into account 
                the distinct needs of different regions of the 
                country); and
                    ``(III) ability to obligate amounts and undertake 
                activities so funded in a timely manner.''.

SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.

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

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

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

                  Subtitle C--Prompt Corrective Action

SEC. 1141. CRITICAL CAPITAL LEVELS.

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

SEC. 1142. CAPITAL CLASSIFICATIONS.

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

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

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

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

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

SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
              ENTITIES.

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

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

    ``(a) Appointment of the Agency as Conservator or Receiver.--
        ``(1) In general.--Notwithstanding any other provision of 
    Federal or State law, the Director may appoint the Agency as 
    conservator or receiver for a regulated entity in the manner 
    provided under paragraph (2) or (4). All references to the 
    conservator or receiver under this section are references to the 
    Agency acting as conservator or receiver.
        ``(2) Discretionary appointment.--The Agency may, at the 
    discretion of the Director, be appointed conservator or receiver 
    for the purpose of reorganizing, rehabilitating, or winding up the 
    affairs of a regulated entity.
        ``(3) Grounds for discretionary appointment of conservator or 
    receiver.--The grounds for appointing conservator or receiver for 
    any regulated entity under paragraph (2) are as follows:
            ``(A) Assets insufficient for obligations.--The assets of 
        the regulated entity are less than the obligations of the 
        regulated entity to its creditors and others.
            ``(B) Substantial dissipation.--Substantial dissipation of 
        assets or earnings due to--
                ``(i) any violation of any provision of Federal or 
            State law; or
                ``(ii) any unsafe or unsound practice.
            ``(C) Unsafe or unsound condition.--An unsafe or unsound 
        condition to transact business.
            ``(D) Cease and desist orders.--Any willful violation of a 
        cease and desist order that has become final.
            ``(E) Concealment.--Any concealment of the books, papers, 
        records, or assets of the regulated entity, or any refusal to 
        submit the books, papers, records, or affairs of the regulated 
        entity, for inspection to any examiner or to any lawful agent 
        of the Director.
            ``(F) Inability to meet obligations.--The regulated entity 
        is likely to be unable to pay its obligations or meet the 
        demands of its creditors in the normal course of business.
            ``(G) Losses.--The regulated entity has incurred or is 
        likely to incur losses that will deplete all or substantially 
        all of its capital, and there is no reasonable prospect for the 
        regulated entity to become adequately capitalized (as defined 
        in section 1364(a)(1)).
            ``(H) Violations of law.--Any violation of any law or 
        regulation, or any unsafe or unsound practice or condition that 
        is likely to--
                ``(i) cause insolvency or substantial dissipation of 
            assets or earnings; or
                ``(ii) weaken the condition of the regulated entity.
            ``(I) Consent.--The regulated entity, by resolution of its 
        board of directors or its shareholders or members, consents to 
        the appointment.
            ``(J) Undercapitalization.--The regulated entity is 
        undercapitalized or significantly undercapitalized (as defined 
        in section 1364(a)(3)), and--
                ``(i) has no reasonable prospect of becoming adequately 
            capitalized;
                ``(ii) fails to become adequately capitalized, as 
            required by--

                    ``(I) section 1365(a)(1) with respect to a 
                regulated entity; or
                    ``(II) section 1366(a)(1) with respect to a 
                significantly undercapitalized regulated entity;

                ``(iii) fails to submit a capital restoration plan 
            acceptable to the Agency within the time prescribed under 
            section 1369C; or
                ``(iv) materially fails to implement a capital 
            restoration plan submitted and accepted under section 
            1369C.
            ``(K) Critical undercapitalization.--The regulated entity 
        is critically undercapitalized, as defined in section 
        1364(a)(4).
            ``(L) Money laundering.--The Attorney General notifies the 
        Director in writing that the regulated entity has been found 
        guilty of a criminal offense under section 1956 or 1957 of 
        title 18, United States Code, or section 5322 or 5324 of title 
        31, United States Code.
        ``(4) Mandatory receivership.--
            ``(A) In general.--The Director shall appoint the Agency as 
        receiver for a regulated entity if the Director determines, in 
        writing, that--
                ``(i) the assets of the regulated entity are, and 
            during the preceding 60 calendar days have been, less than 
            the obligations of the regulated entity to its creditors 
            and others; or
                ``(ii) the regulated entity is not, and during the 
            preceding 60 calendar days has not been, generally paying 
            the debts of the regulated entity (other than debts that 
            are the subject of a bona fide dispute) as such debts 
            become due.
            ``(B) Periodic determination required for critically 
        undercapitalized regulated entity.--If a regulated entity is 
        critically undercapitalized, the Director shall make a 
        determination, in writing, as to whether the regulated entity 
        meets the criteria specified in clause (i) or (ii) of 
        subparagraph (A)--
                ``(i) not later than 30 calendar days after the 
            regulated entity initially becomes critically 
            undercapitalized; and
                ``(ii) at least once during each succeeding 30-calendar 
            day period.
            ``(C) Determination not required if receivership already in 
        place.--Subparagraph (B) does not apply with respect to a 
        regulated entity in any period during which the Agency serves 
        as receiver for the regulated entity.
            ``(D) Receivership terminates conservatorship.--The 
        appointment of the Agency as receiver of a regulated entity 
        under this section shall immediately terminate any 
        conservatorship established for the regulated entity under this 
        title.
        ``(5) Judicial review.--
            ``(A) In general.--If the Agency is appointed conservator 
        or receiver under this section, the regulated entity may, 
        within 30 days of such appointment, bring an action in the 
        United States district court for the judicial district in which 
        the home office of such regulated entity is located, or in the 
        United States District Court for the District of Columbia, for 
        an order requiring the Agency to remove itself as conservator 
        or receiver.
            ``(B) Review.--Upon the filing of an action under 
        subparagraph (A), the court shall, upon the merits, dismiss 
        such action or direct the Agency to remove itself as such 
        conservator or receiver.
        ``(6) Directors not liable for acquiescing in appointment of 
    conservator or receiver.--The members of the board of directors of 
    a regulated entity shall not be liable to the shareholders or 
    creditors of the regulated entity for acquiescing in or consenting 
    in good faith to the appointment of the Agency as conservator or 
    receiver for that regulated entity.
        ``(7) Agency not subject to any other federal agency.--When 
    acting as conservator or receiver, the Agency shall not be subject 
    to the direction or supervision of any other agency of the United 
    States or any State in the exercise of the rights, powers, and 
    privileges of the Agency.
    ``(b) Powers and Duties of the Agency as Conservator or Receiver.--
        ``(1) Rulemaking authority of the agency.--The Agency may 
    prescribe such regulations as the Agency determines to be 
    appropriate regarding the conduct of conservatorships or 
    receiverships.
        ``(2) General powers.--
            ``(A) Successor to regulated entity.--The Agency shall, as 
        conservator or receiver, and by operation of law, immediately 
        succeed to--
                ``(i) all rights, titles, powers, and privileges of the 
            regulated entity, and of any stockholder, officer, or 
            director of such regulated entity with respect to the 
            regulated entity and the assets of the regulated entity; 
            and
                ``(ii) title to the books, records, and assets of any 
            other legal custodian of such regulated entity.
            ``(B) Operate the regulated entity.--The Agency may, as 
        conservator or receiver--
                ``(i) take over the assets of and operate the regulated 
            entity with all the powers of the shareholders, the 
            directors, and the officers of the regulated entity and 
            conduct all business of the regulated entity;
                ``(ii) collect all obligations and money due the 
            regulated entity;
                ``(iii) perform all functions of the regulated entity 
            in the name of the regulated entity which are consistent 
            with the appointment as conservator or receiver;
                ``(iv) preserve and conserve the assets and property of 
            the regulated entity; and
                ``(v) provide by contract for assistance in fulfilling 
            any function, activity, action, or duty of the Agency as 
            conservator or receiver.
            ``(C) Functions of officers, directors, and shareholders of 
        a regulated entity.--The Agency may, by regulation or order, 
        provide for the exercise of any function by any stockholder, 
        director, or officer of any regulated entity for which the 
        Agency has been named conservator or receiver.
            ``(D) Powers as conservator.--The Agency may, as 
        conservator, take such action as may be--
                ``(i) necessary to put the regulated entity in a sound 
            and solvent condition; and
                ``(ii) appropriate to carry on the business of the 
            regulated entity and preserve and conserve the assets and 
            property of the regulated entity.
            ``(E) Additional powers as receiver.--In any case in which 
        the Agency is acting as receiver, the Agency shall place the 
        regulated entity in liquidation and proceed to realize upon the 
        assets of the regulated entity in such manner as the Agency 
        deems appropriate, including through the sale of assets, the 
        transfer of assets to a limited-life regulated entity 
        established under subsection (i), or the exercise of any other 
        rights or privileges granted to the Agency under this 
        paragraph.
            ``(F) Organization of new enterprise.--The Agency may, as 
        receiver for an enterprise, organize a successor enterprise 
        that will operate pursuant to subsection (i).
            ``(G) Transfer or sale of assets and liabilities.--The 
        Agency may, as conservator or receiver, transfer or sell any 
        asset or liability of the regulated entity in default, and may 
        do so without any approval, assignment, or consent with respect 
        to such transfer or sale.
            ``(H) Payment of valid obligations.--The Agency, as 
        conservator or receiver, shall, to the extent of proceeds 
        realized from the performance of contracts or sale of the 
        assets of a regulated entity, pay all valid obligations of the 
        regulated entity that are due and payable at the time of the 
        appointment of the Agency as conservator or receiver, in 
        accordance with the prescriptions and limitations of this 
        section.
            ``(I) Subpoena authority.--
                ``(i) In general.--

                    ``(I) Agency authority.--The Agency may, as 
                conservator or receiver, and for purposes of carrying 
                out any power, authority, or duty with respect to a 
                regulated entity (including determining any claim 
                against the regulated entity and determining and 
                realizing upon any asset of any person in the course of 
                collecting money due the regulated entity), exercise 
                any power established under section 1348.
                    ``(II) Applicability of law.--The provisions of 
                section 1348 shall apply with respect to the exercise 
                of any power under this subparagraph, in the same 
                manner as such provisions apply under that section.

                ``(ii) Subpoena.--A subpoena or subpoena duces tecum 
            may be issued under clause (i) only by, or with the written 
            approval of, the Director, or the designee of the Director.
                ``(iii) Rule of construction.--This subsection shall 
            not be construed to limit any rights that the Agency, in 
            any capacity, might otherwise have under section 1317 or 
            1379B.
            ``(J) Incidental powers.--The Agency may, as conservator or 
        receiver--
                ``(i) exercise all powers and authorities specifically 
            granted to conservators or receivers, respectively, under 
            this section, and such incidental powers as shall be 
            necessary to carry out such powers; and
                ``(ii) take any action authorized by this section, 
            which the Agency determines is in the best interests of the 
            regulated entity or the Agency.
            ``(K) Other provisions.--
                ``(i) Shareholders and creditors of failed regulated 
            entity.--Notwithstanding any other provision of law, the 
            appointment of the Agency as receiver for a regulated 
            entity pursuant to paragraph (2) or (4) of subsection (a) 
            and its succession, by operation of law, to the rights, 
            titles, powers, and privileges described in subsection 
            (b)(2)(A) shall terminate all rights and claims that the 
            stockholders and creditors of the regulated entity may have 
            against the assets or charter of the regulated entity or 
            the Agency arising as a result of their status as 
            stockholders or creditors, except for their right to 
            payment, resolution, or other satisfaction of their claims, 
            as permitted under subsections (b)(9), (c), and (e).
                ``(ii) Assets of regulated entity.--Notwithstanding any 
            other provision of law, for purposes of this section, the 
            charter of a regulated entity shall not be considered an 
            asset of the regulated entity.
        ``(3) Authority of receiver to determine claims.--
            ``(A) In general.--The Agency may, as receiver, determine 
        claims in accordance with the requirements of this subsection 
        and any regulations prescribed under paragraph (4).
            ``(B) Notice requirements.--The receiver, in any case 
        involving the liquidation or winding up of the affairs of a 
        closed regulated entity, shall--
                ``(i) promptly publish a notice to the creditors of the 
            regulated entity to present their claims, together with 
            proof, to the receiver by a date specified in the notice 
            which shall be not less than 90 days after the date of 
            publication of such notice; and
                ``(ii) republish such notice approximately 1 month and 
            2 months, respectively, after the date of publication under 
            clause (i).
            ``(C) Mailing required.--The receiver shall mail a notice 
        similar to the notice published under subparagraph (B)(i) at 
        the time of such publication to any creditor shown on the books 
        of the regulated entity--
                ``(i) at the last address of the creditor appearing in 
            such books; or
                ``(ii) upon discovery of the name and address of a 
            claimant not appearing on the books of the regulated 
            entity, within 30 days after the discovery of such name and 
            address.
        ``(4) Rulemaking authority relating to determination of 
    claims.--Subject to subsection (c), the Director may prescribe 
    regulations regarding the allowance or disallowance of claims by 
    the receiver and providing for administrative determination of 
    claims and review of such determination.
        ``(5) Procedures for determination of claims.--
            ``(A) Determination period.--
                ``(i) In general.--Before the end of the 180-day period 
            beginning on the date on which any claim against a 
            regulated entity is filed with the Agency as receiver, the 
            Agency shall determine whether to allow or disallow the 
            claim and shall notify the claimant of any determination 
            with respect to such claim.
                ``(ii) Extension of time.--The period described in 
            clause (i) may be extended by a written agreement between 
            the claimant and the Agency.
                ``(iii) Mailing of notice sufficient.--The requirements 
            of clause (i) shall be deemed to be satisfied if the notice 
            of any determination with respect to any claim is mailed to 
            the last address of the claimant which appears--

                    ``(I) on the books of the regulated entity;
                    ``(II) in the claim filed by the claimant; or
                    ``(III) in documents submitted in proof of the 
                claim.

                ``(iv) Contents of notice of disallowance.--If any 
            claim filed under clause (i) is disallowed, the notice to 
            the claimant shall contain--

                    ``(I) a statement of each reason for the 
                disallowance; and
                    ``(II) the procedures available for obtaining 
                agency review of the determination to disallow the 
                claim or judicial determination of the claim.

            ``(B) Allowance of proven claim.--The receiver shall allow 
        any claim received on or before the date specified in the 
        notice published under paragraph (3)(B)(i) by the receiver from 
        any claimant which is proved to the satisfaction of the 
        receiver.
            ``(C) Disallowance of claims filed after filing period.--
        Claims filed after the date specified in the notice published 
        under paragraph (3)(B)(i), or the date specified under 
        paragraph (3)(C), shall be disallowed and such disallowance 
        shall be final.
            ``(D) Authority to disallow claims.--
                ``(i) In general.--The receiver may disallow any 
            portion of any claim by a creditor or claim of security, 
            preference, or priority which is not proved to the 
            satisfaction of the receiver.
                ``(ii) Payments to less than fully secured creditors.--
            In the case of a claim of a creditor against a regulated 
            entity which is secured by any property or other asset of 
            such regulated entity, the receiver--

                    ``(I) may treat the portion of such claim which 
                exceeds an amount equal to the fair market value of 
                such property or other asset as an unsecured claim 
                against the regulated entity; and
                    ``(II) may not make any payment with respect to 
                such unsecured portion of the claim, other than in 
                connection with the disposition of all claims of 
                unsecured creditors of the regulated entity.

                ``(iii) Exceptions.--No provision of this paragraph 
            shall apply with respect to--

                    ``(I) any extension of credit from any Federal 
                Reserve Bank, Federal Home Loan Bank, or the United 
                States Treasury; or
                    ``(II) any security interest in the assets of the 
                regulated entity securing any such extension of credit.

            ``(E) No judicial review of determination pursuant to 
        subparagraph (d).--No court may review the determination of the 
        Agency under subparagraph (D) to disallow a claim.
            ``(F) Legal effect of filing.--
                ``(i) Statute of limitation tolled.--For purposes of 
            any applicable statute of limitations, the filing of a 
            claim with the receiver shall constitute a commencement of 
            an action.
                ``(ii) No prejudice to other actions.--Subject to 
            paragraph (10), the filing of a claim with the receiver 
            shall not prejudice any right of the claimant to continue 
            any action which was filed before the date of the 
            appointment of the receiver, subject to the determination 
            of claims by the receiver.
        ``(6) Provision for judicial determination of claims.--
            ``(A) In general.--The claimant may file suit on a claim 
        (or continue an action commenced before the appointment of the 
        receiver) in the district or territorial court of the United 
        States for the district within which the principal place of 
        business of the regulated entity is located or the United 
        States District Court for the District of Columbia (and such 
        court shall have jurisdiction to hear such claim), before the 
        end of the 60-day period beginning on the earlier of--
                ``(i) the end of the period described in paragraph 
            (5)(A)(i) with respect to any claim against a regulated 
            entity for which the Agency is receiver; or
                ``(ii) the date of any notice of disallowance of such 
            claim pursuant to paragraph (5)(A)(i).
            ``(B) Statute of limitations.--A claim shall be deemed to 
        be disallowed (other than any portion of such claim which was 
        allowed by the receiver), and such disallowance shall be final, 
        and the claimant shall have no further rights or remedies with 
        respect to such claim, if the claimant fails, before the end of 
        the 60-day period described under subparagraph (A), to file 
        suit on such claim (or continue an action commenced before the 
        appointment of the receiver).
        ``(7) Review of claims.--
            ``(A) Other review procedures.--
                ``(i) In general.--The Agency shall establish such 
            alternative dispute resolution processes as may be 
            appropriate for the resolution of claims filed under 
            paragraph (5)(A)(i).
                ``(ii) Criteria.--In establishing alternative dispute 
            resolution processes, the Agency shall strive for 
            procedures which are expeditious, fair, independent, and 
            low cost.
                ``(iii) Voluntary binding or nonbinding procedures.--
            The Agency may establish both binding and nonbinding 
            processes under this subparagraph, which may be conducted 
            by any government or private party. All parties, including 
            the claimant and the Agency, must agree to the use of the 
            process in a particular case.
            ``(B) Consideration of incentives.--The Agency shall seek 
        to develop incentives for claimants to participate in the 
        alternative dispute resolution process.
        ``(8) Expedited determination of claims.--
            ``(A) Establishment required.--The Agency shall establish a 
        procedure for expedited relief outside of the routine claims 
        process established under paragraph (5) for claimants who--
                ``(i) allege the existence of legally valid and 
            enforceable or perfected security interests in assets of 
            any regulated entity for which the Agency has been 
            appointed receiver; and
                ``(ii) allege that irreparable injury will occur if the 
            routine claims procedure is followed.
            ``(B) Determination period.--Before the end of the 90-day 
        period beginning on the date on which any claim is filed in 
        accordance with the procedures established under subparagraph 
        (A), the Director shall--
                ``(i) determine--

                    ``(I) whether to allow or disallow such claim; or
                    ``(II) whether such claim should be determined 
                pursuant to the procedures established under paragraph 
                (5); and

                ``(ii) notify the claimant of the determination, and if 
            the claim is disallowed, provide a statement of each reason 
            for the disallowance and the procedure for obtaining agency 
            review or judicial determination.
            ``(C) Period for filing or renewing suit.--Any claimant who 
        files a request for expedited relief shall be permitted to file 
        a suit, or to continue a suit filed before the date of 
        appointment of the receiver, seeking a determination of the 
        rights of the claimant with respect to such security interest 
        after the earlier of--
                ``(i) the end of the 90-day period beginning on the 
            date of the filing of a request for expedited relief; or
                ``(ii) the date on which the Agency denies the claim.
            ``(D) Statute of limitations.--If an action described under 
        subparagraph (C) is not filed, or the motion to renew a 
        previously filed suit is not made, before the end of the 30-day 
        period beginning on the date on which such action or motion may 
        be filed under subparagraph (B), the claim shall be deemed to 
        be disallowed as of the end of such period (other than any 
        portion of such claim which was allowed by the receiver), such 
        disallowance shall be final, and the claimant shall have no 
        further rights or remedies with respect to such claim.
            ``(E) Legal effect of filing.--
                ``(i) Statute of limitation tolled.--For purposes of 
            any applicable statute of limitations, the filing of a 
            claim with the receiver shall constitute a commencement of 
            an action.
                ``(ii) No prejudice to other actions.--Subject to 
            paragraph (10), the filing of a claim with the receiver 
            shall not prejudice any right of the claimant to continue 
            any action that was filed before the appointment of the 
            receiver, subject to the determination of claims by the 
            receiver.
        ``(9) Payment of claims.--
            ``(A) In general.--The receiver may, in the discretion of 
        the receiver, and to the extent that funds are available from 
        the assets of the regulated entity, pay creditor claims, in 
        such manner and amounts as are authorized under this section, 
        which are--
                ``(i) allowed by the receiver;
                ``(ii) approved by the Agency pursuant to a final 
            determination pursuant to paragraph (7) or (8); or
                ``(iii) determined by the final judgment of any court 
            of competent jurisdiction.
            ``(B) Agreements against the interest of the agency.--No 
        agreement that tends to diminish or defeat the interest of the 
        Agency in any asset acquired by the Agency as receiver under 
        this section shall be valid against the Agency unless such 
        agreement is in writing and executed by an authorized officer 
        or representative of the regulated entity.
            ``(C) Payment of dividends on claims.--The receiver may, in 
        the sole discretion of the receiver, pay from the assets of the 
        regulated entity dividends on proved claims at any time, and no 
        liability shall attach to the Agency by reason of any such 
        payment, for failure to pay dividends to a claimant whose claim 
        is not proved at the time of any such payment.
            ``(D) Rulemaking authority of the director.--The Director 
        may prescribe such rules, including definitions of terms, as 
        the Director deems appropriate to establish a single uniform 
        interest rate for, or to make payments of post-insolvency 
        interest to creditors holding proven claims against the 
        receivership estates of the regulated entity, following 
        satisfaction by the receiver of the principal amount of all 
        creditor claims.
        ``(10) Suspension of legal actions.--
            ``(A) In general.--After the appointment of a conservator 
        or receiver for a regulated entity, the conservator or receiver 
        may, in any judicial action or proceeding to which such 
        regulated entity is or becomes a party, request a stay for a 
        period not to exceed--
                ``(i) 45 days, in the case of any conservator; and
                ``(ii) 90 days, in the case of any receiver.
            ``(B) Grant of stay by all courts required.--Upon receipt 
        of a request by the conservator or receiver under subparagraph 
        (A) for a stay of any judicial action or proceeding in any 
        court with jurisdiction of such action or proceeding, the court 
        shall grant such stay as to all parties.
        ``(11) Additional rights and duties.--
            ``(A) Prior final adjudication.--The Agency shall abide by 
        any final unappealable judgment of any court of competent 
        jurisdiction which was rendered before the appointment of the 
        Agency as conservator or receiver.
            ``(B) Rights and remedies of conservator or receiver.--In 
        the event of any appealable judgment, the Agency as conservator 
        or receiver--
                ``(i) shall have all of the rights and remedies 
            available to the regulated entity (before the appointment 
            of such conservator or receiver) and the Agency, including 
            removal to Federal court and all appellate rights; and
                ``(ii) shall not be required to post any bond in order 
            to pursue such remedies.
            ``(C) No attachment or execution.--No attachment or 
        execution may issue by any court upon assets in the possession 
        of the receiver, or upon the charter, of a regulated entity for 
        which the Agency has been appointed receiver.
            ``(D) Limitation on judicial review.--Except as otherwise 
        provided in this subsection, no court shall have jurisdiction 
        over--
                ``(i) any claim or action for payment from, or any 
            action seeking a determination of rights with respect to, 
            the assets or charter of any regulated entity for which the 
            Agency has been appointed receiver; or
                ``(ii) any claim relating to any act or omission of 
            such regulated entity or the Agency as receiver.
            ``(E) Disposition of assets.--In exercising any right, 
        power, privilege, or authority as conservator or receiver in 
        connection with any sale or disposition of assets of a 
        regulated entity for which the Agency has been appointed 
        conservator or receiver, the Agency shall conduct its 
        operations in a manner which--
                ``(i) maximizes the net present value return from the 
            sale or disposition of such assets;
                ``(ii) minimizes the amount of any loss realized in the 
            resolution of cases; and
                ``(iii) ensures adequate competition and fair and 
            consistent treatment of offerors.
        ``(12) Statute of limitations for actions brought by 
    conservator or receiver.--
            ``(A) In general.--Notwithstanding any provision of any 
        contract, the applicable statute of limitations with regard to 
        any action brought by the Agency as conservator or receiver 
        shall be--
                ``(i) in the case of any contract claim, the longer 
            of--

                    ``(I) the 6-year period beginning on the date on 
                which the claim accrues; or
                    ``(II) the period applicable under State law; and

                ``(ii) in the case of any tort claim, the longer of--

                    ``(I) the 3-year period beginning on the date on 
                which the claim accrues; or
                    ``(II) the period applicable under State law.

            ``(B) Determination of the date on which a claim accrues.--
        For purposes of subparagraph (A), the date on which the statute 
        of limitations begins to run on any claim described in such 
        subparagraph shall be the later of--
                ``(i) the date of the appointment of the Agency as 
            conservator or receiver; or
                ``(ii) the date on which the cause of action accrues.
        ``(13) Revival of expired state causes of action.--
            ``(A) In general.--In the case of any tort claim described 
        under clause (ii) for which the statute of limitations 
        applicable under State law with respect to such claim has 
        expired not more than 5 years before the appointment of the 
        Agency as conservator or receiver, the Agency may bring an 
        action as conservator or receiver on such claim without regard 
        to the expiration of the statute of limitations applicable 
        under State law.
            ``(B) Claims described.--A tort claim referred to under 
        clause (i) is a claim arising from fraud, intentional 
        misconduct resulting in unjust enrichment, or intentional 
        misconduct resulting in substantial loss to the regulated 
        entity.
        ``(14) Accounting and recordkeeping requirements.--
            ``(A) In general.--The Agency as conservator or receiver 
        shall, consistent with the accounting and reporting practices 
        and procedures established by the Agency, maintain a full 
        accounting of each conservatorship and receivership or other 
        disposition of a regulated entity in default.
            ``(B) Annual accounting or report.--With respect to each 
        conservatorship or receivership, the Agency shall make an 
        annual accounting or report available to the Board, the 
        Comptroller General of the United States, the Committee on 
        Banking, Housing, and Urban Affairs of the Senate, and the 
        Committee on Financial Services of the House of 
        Representatives.
            ``(C) Availability of reports.--Any report prepared under 
        subparagraph (B) shall be made available by the Agency upon 
        request to any shareholder of a regulated entity or any member 
        of the public.
            ``(D) Recordkeeping requirement.--After the end of the 6-
        year period beginning on the date on which the conservatorship 
        or receivership is terminated by the Director, the Agency may 
        destroy any records of such regulated entity which the Agency, 
        in the discretion of the Agency, determines to be unnecessary, 
        unless directed not to do so by a court of competent 
        jurisdiction or governmental agency, or prohibited by law.
        ``(15) Fraudulent transfers.--
            ``(A) In general.--The Agency, as conservator or receiver, 
        may avoid a transfer of any interest of an entity-affiliated 
        party, or any person determined by the conservator or receiver 
        to be a debtor of the regulated entity, in property, or any 
        obligation incurred by such party or person, that was made 
        within 5 years of the date on which the Agency was appointed 
        conservator or receiver, if such party or person voluntarily or 
        involuntarily made such transfer or incurred such liability 
        with the intent to hinder, delay, or defraud the regulated 
        entity, the Agency, the conservator, or receiver.
            ``(B) Right of recovery.--To the extent a transfer is 
        avoided under subparagraph (A), the conservator or receiver may 
        recover, for the benefit of the regulated entity, the property 
        transferred, or, if a court so orders, the value of such 
        property (at the time of such transfer) from--
                ``(i) the initial transferee of such transfer or the 
            entity-affiliated party or person for whose benefit such 
            transfer was made; or
                ``(ii) any immediate or mediate transferee of any such 
            initial transferee.
            ``(C) Rights of transferee or obligee.--The conservator or 
        receiver may not recover under subparagraph (B) from--
                ``(i) any transferee that takes for value, including 
            satisfaction or securing of a present or antecedent debt, 
            in good faith; or
                ``(ii) any immediate or mediate good faith transferee 
            of such transferee.
            ``(D) Rights under this paragraph.--The rights under this 
        paragraph of the conservator or receiver described under 
        subparagraph (A) shall be superior to any rights of a trustee 
        or any other party (other than any party which is a Federal 
        agency) under title 11, United States Code.
        ``(16) Attachment of assets and other injunctive relief.--
    Subject to paragraph (17), any court of competent jurisdiction may, 
    at the request of the conservator or receiver, issue an order in 
    accordance with rule 65 of the Federal Rules of Civil Procedure, 
    including an order placing the assets of any person designated by 
    the conservator or receiver under the control of the court, and 
    appointing a trustee to hold such assets.
        ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
    Civil Procedure shall apply with respect to any proceeding under 
    paragraph (16) without regard to the requirement of such rule that 
    the applicant show that the injury, loss, or damage is irreparable 
    and immediate.
        ``(18) Treatment of claims arising from breach of contracts 
    executed by the conservator or receiver.--
            ``(A) In general.--Notwithstanding any other provision of 
        this subsection, any final and unappealable judgment for 
        monetary damages entered against the conservator or receiver 
        for the breach of an agreement executed or approved in writing 
        by the conservator or receiver after the date of its 
        appointment, shall be paid as an administrative expense of the 
        conservator or receiver.
            ``(B) No limitation of power.--Nothing in this paragraph 
        shall be construed to limit the power of the conservator or 
        receiver to exercise any rights under contract or law, 
        including to terminate, breach, cancel, or otherwise 
        discontinue such agreement.
        ``(19) General exceptions.--
            ``(A) Limitations.--The rights of the conservator or 
        receiver appointed under this section shall be subject to the 
        limitations on the powers of a receiver under sections 402 
        through 407 of the Federal Deposit Insurance Corporation 
        Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
            ``(B) Mortgages held in trust.--
                ``(i) In general.--Any mortgage, pool of mortgages, or 
            interest in a pool of mortgages held in trust, custodial, 
            or agency capacity by a regulated entity for the benefit of 
            any person other than the regulated entity shall not be 
            available to satisfy the claims of creditors generally, 
            except that nothing in this clause shall be construed to 
            expand or otherwise affect the authority of any regulated 
            entity.
                ``(ii) Holding of mortgages.--Any mortgage, pool of 
            mortgages, or interest in a pool of mortgages described in 
            clause (i) shall be held by the conservator or receiver 
            appointed under this section for the beneficial owners of 
            such mortgage, pool of mortgages, or interest in accordance 
            with the terms of the agreement creating such trust, 
            custodial, or other agency arrangement.
                ``(iii) Liability of conservator or receiver.--The 
            liability of the conservator or receiver appointed under 
            this section for damages shall, in the case of any 
            contingent or unliquidated claim relating to the mortgages 
            held in trust, be estimated in accordance with the 
            regulations of the Director.
    ``(c) Priority of Expenses and Unsecured Claims.--
        ``(1) In general.--Unsecured claims against a regulated entity, 
    or the receiver therefor, that are proven to the satisfaction of 
    the receiver shall have priority in the following order:
            ``(A) Administrative expenses of the receiver.
            ``(B) Any other general or senior liability of the 
        regulated entity (which is not a liability described under 
        subparagraph (C) or (D).
            ``(C) Any obligation subordinated to general creditors 
        (which is not an obligation described under subparagraph (D)).
            ``(D) Any obligation to shareholders or members arising as 
        a result of their status as shareholder or members.
        ``(2) Creditors similarly situated.--All creditors that are 
    similarly situated under paragraph (1) shall be treated in a 
    similar manner, except that the receiver may take any action 
    (including making payments) that does not comply with this 
    subsection, if--
            ``(A) the Director determines that such action is necessary 
        to maximize the value of the assets of the regulated entity, to 
        maximize the present value return from the sale or other 
        disposition of the assets of the regulated entity, or to 
        minimize the amount of any loss realized upon the sale or other 
        disposition of the assets of the regulated entity; and
            ``(B) all creditors that are similarly situated under 
        paragraph (1) receive not less than the amount provided in 
        subsection (e)(2).
        ``(3) Definition.--As used in this subsection, the term 
    `administrative expenses of the receiver' includes--
            ``(A) the actual, necessary costs and expenses incurred by 
        the receiver in preserving the assets of a failed regulated 
        entity or liquidating or otherwise resolving the affairs of a 
        failed regulated entity; and
            ``(B) any obligations that the receiver determines are 
        necessary and appropriate to facilitate the smooth and orderly 
        liquidation or other resolution of the regulated entity.
    ``(d) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
        ``(1) Authority to repudiate contracts.--In addition to any 
    other rights a conservator or receiver may have, the conservator or 
    receiver for any regulated entity may disaffirm or repudiate any 
    contract or lease--
            ``(A) to which such regulated entity is a party;
            ``(B) the performance of which the conservator or receiver, 
        in its sole discretion, determines to be burdensome; and
            ``(C) the disaffirmance or repudiation of which the 
        conservator or receiver determines, in its sole discretion, 
        will promote the orderly administration of the affairs of the 
        regulated entity.
        ``(2) Timing of repudiation.--The conservator or receiver shall 
    determine whether or not to exercise the rights of repudiation 
    under this subsection within a reasonable period following such 
    appointment.
        ``(3) Claims for damages for repudiation.--
            ``(A) In general.--Except as otherwise provided under 
        subparagraph (C) and paragraphs (4), (5), and (6), the 
        liability of the conservator or receiver for the disaffirmance 
        or repudiation of any contract pursuant to paragraph (1) shall 
        be--
                ``(i) limited to actual direct compensatory damages; 
            and
                ``(ii) determined as of--

                    ``(I) the date of the appointment of the 
                conservator or receiver; or
                    ``(II) in the case of any contract or agreement 
                referred to in paragraph (8), the date of the 
                disaffirmance or repudiation of such contract or 
                agreement.

            ``(B) No liability for other damages.--For purposes of 
        subparagraph (A), the term `actual direct compensatory damages' 
        shall not include--
                ``(i) punitive or exemplary damages;
                ``(ii) damages for lost profits or opportunity; or
                ``(iii) damages for pain and suffering.
            ``(C) Measure of damages for repudiation of financial 
        contracts.--In the case of any qualified financial contract or 
        agreement to which paragraph (8) applies, compensatory damages 
        shall be--
                ``(i) deemed to include normal and reasonable costs of 
            cover or other reasonable measures of damages utilized in 
            the industries for such contract and agreement claims; and
                ``(ii) paid in accordance with this subsection and 
            subsection (e), except as otherwise specifically provided 
            in this section.
        ``(4) Leases under which the regulated entity is the lessee.--
            ``(A) In general.--If the conservator or receiver 
        disaffirms or repudiates a lease under which the regulated 
        entity was the lessee, the conservator or receiver shall not be 
        liable for any damages (other than damages determined under 
        subparagraph (B)) for the disaffirmance or repudiation of such 
        lease.
            ``(B) Payments of rent.--Notwithstanding subparagraph (A), 
        the lessor under a lease to which that subparagraph applies 
        shall--
                ``(i) be entitled to the contractual rent accruing 
            before the later of the date on which--

                    ``(I) the notice of disaffirmance or repudiation is 
                mailed; or
                    ``(II) the disaffirmance or repudiation becomes 
                effective, unless the lessor is in default or breach of 
                the terms of the lease;

                ``(ii) have no claim for damages under any acceleration 
            clause or other penalty provision in the lease; and
                ``(iii) have a claim for any unpaid rent, subject to 
            all appropriate offsets and defenses, due as of the date of 
            the appointment, which shall be paid in accordance with 
            this subsection and subsection (e).
        ``(5) Leases under which the regulated entity is the lessor.--
            ``(A) In general.--If the conservator or receiver 
        repudiates an unexpired written lease of real property of the 
        regulated entity under which the regulated entity is the lessor 
        and the lessee is not, as of the date of such repudiation, in 
        default, the lessee under such lease may either--
                ``(i) treat the lease as terminated by such 
            repudiation; or
                ``(ii) remain in possession of the leasehold interest 
            for the balance of the term of the lease, unless the lessee 
            defaults under the terms of the lease after the date of 
            such repudiation.
            ``(B) Provisions applicable to lessee remaining in 
        possession.--If any lessee under a lease described under 
        subparagraph (A) remains in possession of a leasehold interest 
        under clause (ii) of subparagraph (A)--
                ``(i) the lessee--

                    ``(I) shall continue to pay the contractual rent 
                pursuant to the terms of the lease after the date of 
                the repudiation of such lease; and
                    ``(II) may offset against any rent payment which 
                accrues after the date of the repudiation of the lease, 
                and any damages which accrue after such date due to the 
                nonperformance of any obligation of the regulated 
                entity under the lease after such date; and

                ``(ii) the conservator or receiver shall not be liable 
            to the lessee for any damages arising after such date as a 
            result of the repudiation, other than the amount of any 
            offset allowed under clause (i)(II).
        ``(6) Contracts for the sale of real property.--
            ``(A) In general.--If the conservator or receiver 
        repudiates any contract for the sale of real property and the 
        purchaser of such real property under such contract is in 
        possession, and is not, as of the date of such repudiation, in 
        default, such purchaser may either--
                ``(i) treat the contract as terminated by such 
            repudiation; or
                ``(ii) remain in possession of such real property.
            ``(B) Provisions applicable to purchaser remaining in 
        possession.--If any purchaser of real property under any 
        contract described under subparagraph (A) remains in possession 
        of such property under clause (ii) of subparagraph (A)--
                ``(i) the purchaser--

                    ``(I) shall continue to make all payments due under 
                the contract after the date of the repudiation of the 
                contract; and
                    ``(II) may offset against any such payments any 
                damages which accrue after such date due to the 
                nonperformance (after such date) of any obligation of 
                the regulated entity under the contract; and

                ``(ii) the conservator or receiver shall--

                    ``(I) not be liable to the purchaser for any 
                damages arising after such date as a result of the 
                repudiation, other than the amount of any offset 
                allowed under clause (i)(II);
                    ``(II) deliver title to the purchaser in accordance 
                with the provisions of the contract; and
                    ``(III) have no obligation under the contract other 
                than the performance required under subclause (II).

            ``(C) Assignment and sale allowed.--
                ``(i) In general.--No provision of this paragraph shall 
            be construed as limiting the right of the conservator or 
            receiver to assign the contract described under 
            subparagraph (A), and sell the property subject to the 
            contract and the provisions of this paragraph.
                ``(ii) No liability after assignment and sale.--If an 
            assignment and sale described under clause (i) is 
            consummated, the conservator or receiver shall have no 
            further liability under the contract described under 
            subparagraph (A), or with respect to the real property 
            which was the subject of such contract.
        ``(7) Service contracts.--
            ``(A) Services performed before appointment.--In the case 
        of any contract for services between any person and any 
        regulated entity for which the Agency has been appointed 
        conservator or receiver, any claim of such person for services 
        performed before the appointment of the conservator or receiver 
        shall be--
                ``(i) a claim to be paid in accordance with subsections 
            (b) and (e); and
                ``(ii) deemed to have arisen as of the date on which 
            the conservator or receiver was appointed.
            ``(B) Services performed after appointment and prior to 
        repudiation.--If, in the case of any contract for services 
        described under subparagraph (A), the conservator or receiver 
        accepts performance by the other person before the conservator 
        or receiver makes any determination to exercise the right of 
        repudiation of such contract under this section--
                ``(i) the other party shall be paid under the terms of 
            the contract for the services performed; and
                ``(ii) the amount of such payment shall be treated as 
            an administrative expense of the conservatorship or 
            receivership.
            ``(C) Acceptance of performance no bar to subsequent 
        repudiation.--The acceptance by the conservator or receiver of 
        services referred to under subparagraph (B) in connection with 
        a contract described in such subparagraph shall not affect the 
        right of the conservator or receiver to repudiate such contract 
        under this section at any time after such performance.
        ``(8) Certain qualified financial contracts.--
            ``(A) Rights of parties to contracts.--Subject to 
        paragraphs (9) and (10), and notwithstanding any other 
        provision of this title (other than subsection (b)(9)(B) of 
        this section), any other Federal law, or the law of any State, 
        no person shall be stayed or prohibited from exercising--
                ``(i) any right of that person to cause the 
            termination, liquidation, or acceleration of any qualified 
            financial contract with a regulated entity that arises upon 
            the appointment of the Agency as receiver for such 
            regulated entity at any time after such appointment;
                ``(ii) any right under any security agreement or 
            arrangement or other credit enhancement relating to one or 
            more qualified financial contracts; or
                ``(iii) any right to offset or net out any termination 
            value, payment amount, or other transfer obligation arising 
            under or in connection with 1 or more contracts and 
            agreements described in clause (i), including any master 
            agreement for such contracts or agreements.
            ``(B) Applicability of other provisions.--Subsection 
        (b)(10) shall apply in the case of any judicial action or 
        proceeding brought against any receiver referred to under 
        subparagraph (A), or the regulated entity for which such 
        receiver was appointed, by any party to a contract or agreement 
        described under subparagraph (A)(i) with such regulated entity.
            ``(C) Certain transfers not avoidable.--
                ``(i) In general.--Notwithstanding paragraph (11), or 
            any other provision of Federal or State law relating to the 
            avoidance of preferential or fraudulent transfers, the 
            Agency, whether acting as such or as conservator or 
            receiver of a regulated entity, may not avoid any transfer 
            of money or other property in connection with any qualified 
            financial contract with a regulated entity.
                ``(ii) Exception for certain transfers.--Clause (i) 
            shall not apply to any transfer of money or other property 
            in connection with any qualified financial contract with a 
            regulated entity if the Agency determines that the 
            transferee had actual intent to hinder, delay, or defraud 
            such regulated entity, the creditors of such regulated 
            entity, or any conservator or receiver appointed for such 
            regulated entity.
            ``(D) Certain contracts and agreements defined.--In this 
        subsection the following definitions shall apply:
                ``(i) Qualified financial contract.--The term 
            `qualified financial contract' means any securities 
            contract, commodity contract, forward contract, repurchase 
            agreement, swap agreement, and any similar agreement that 
            the Agency determines by regulation, resolution, or order 
            to be a qualified financial contract for purposes of this 
            paragraph.
                ``(ii) Securities contract.--The term `securities 
            contract'--

                    ``(I) means a contract for the purchase, sale, or 
                loan of a security, a certificate of deposit, a 
                mortgage loan, or any interest in a mortgage loan, a 
                group or index of securities, certificates of deposit, 
                or mortgage loans or interests therein (including any 
                interest therein or based on the value thereof) or any 
                option on any of the foregoing, including any option to 
                purchase or sell any such security, certificate of 
                deposit, mortgage loan, interest, group or index, or 
                option, and including any repurchase or reverse 
                repurchase transaction on any such security, 
                certificate of deposit, mortgage loan, interest, group 
                or index, or option;
                    ``(II) does not include any purchase, sale, or 
                repurchase obligation under a participation in a 
                commercial mortgage loan, unless the Agency determines 
                by regulation, resolution, or order to include any such 
                agreement within the meaning of such term;
                    ``(III) means any option entered into on a national 
                securities exchange relating to foreign currencies;
                    ``(IV) means the guarantee by or to any securities 
                clearing agency of any settlement of cash, securities, 
                certificates of deposit, mortgage loans or interests 
                therein, group or index of securities, certificates of 
                deposit, or mortgage loans or interests therein 
                (including any interest therein or based on the value 
                thereof) or option on any of the foregoing, including 
                any option to purchase or sell any such security, 
                certificate of deposit, mortgage loan, interest, group 
                or index, or option;
                    ``(V) means any margin loan;
                    ``(VI) means any other agreement or transaction 
                that is similar to any agreement or transaction 
                referred to in this clause;
                    ``(VII) means any combination of the agreements or 
                transactions referred to in this clause;
                    ``(VIII) means any option to enter into any 
                agreement or transaction referred to in this clause;
                    ``(IX) means a master agreement that provides for 
                an agreement or transaction referred to in subclause 
                (I), (III), (IV), (V), (VI), (VII), or (VIII), together 
                with all supplements to any such master agreement, 
                without regard to whether the master agreement provides 
                for an agreement or transaction that is not a 
                securities contract under this clause, except that the 
                master agreement shall be considered to be a securities 
                contract under this clause only with respect to each 
                agreement or transaction under the master agreement 
                that is referred to in subclause (I), (III), (IV), (V), 
                (VI), (VII), or (VIII); and
                    ``(X) means any security agreement or arrangement 
                or other credit enhancement related to any agreement or 
                transaction referred to in this clause, including any 
                guarantee or reimbursement obligation in connection 
                with any agreement or transaction referred to in this 
                clause.

                ``(iii) Commodity contract.--The term `commodity 
            contract' means--

                    ``(I) with respect to a futures commission 
                merchant, a contract for the purchase or sale of a 
                commodity for future delivery on, or subject to the 
                rules of, a contract market or board of trade;
                    ``(II) with respect to a foreign futures commission 
                merchant, a foreign future;
                    ``(III) with respect to a leverage transaction 
                merchant, a leverage transaction;
                    ``(IV) with respect to a clearing organization, a 
                contract for the purchase or sale of a commodity for 
                future delivery on, or subject to the rules of, a 
                contract market or board of trade that is cleared by 
                such clearing organization, or commodity option traded 
                on, or subject to the rules of, a contract market or 
                board of trade that is cleared by such clearing 
                organization;
                    ``(V) with respect to a commodity options dealer, a 
                commodity option;
                    ``(VI) any other agreement or transaction that is 
                similar to any agreement or transaction referred to in 
                this clause;
                    ``(VII) any combination of the agreements or 
                transactions referred to in this clause;
                    ``(VIII) any option to enter into any agreement or 
                transaction referred to in this clause;
                    ``(IX) a master agreement that provides for an 
                agreement or transaction referred to in subclause (I), 
                (II), (III), (IV), (V), (VI), (VII), or (VIII), 
                together with all supplements to any such master 
                agreement, without regard to whether the master 
                agreement provides for an agreement or transaction that 
                is not a commodity contract under this clause, except 
                that the master agreement shall be considered to be a 
                commodity contract under this clause only with respect 
                to each agreement or transaction under the master 
                agreement that is referred to in subclause (I), (II), 
                (III), (IV), (V), (VI), (VII), or (VIII); or
                    ``(X) any security agreement or arrangement or 
                other credit enhancement related to any agreement or 
                transaction referred to in this clause, including any 
                guarantee or reimbursement obligation in connection 
                with any agreement or transaction referred to in this 
                clause.

                ``(iv) Forward contract.--The term `forward contract' 
            means--

                    ``(I) a contract (other than a commodity contract) 
                for the purchase, sale, or transfer of a commodity or 
                any similar good, article, service, right, or interest 
                which is presently or in the future becomes the subject 
                of dealing in the forward contract trade, or product or 
                byproduct thereof, with a maturity date more than 2 
                days after the date on which the contract is entered 
                into, including a repurchase transaction, reverse 
                repurchase transaction, consignment, lease, swap, hedge 
                transaction, deposit, loan, option, allocated 
                transaction, unallocated transaction, or any other 
                similar agreement;
                    ``(II) any combination of agreements or 
                transactions referred to in subclauses (I) and (III);
                    ``(III) any option to enter into any agreement or 
                transaction referred to in subclause (I) or (II);
                    ``(IV) a master agreement that provides for an 
                agreement or transaction referred to in subclauses (I), 
                (II), or (III), together with all supplements to any 
                such master agreement, without regard to whether the 
                master agreement provides for an agreement or 
                transaction that is not a forward contract under this 
                clause, except that the master agreement shall be 
                considered to be a forward contract under this clause 
                only with respect to each agreement or transaction 
                under the master agreement that is referred to in 
                subclause (I), (II), or (III); or
                    ``(V) any security agreement or arrangement or 
                other credit enhancement related to any agreement or 
                transaction referred to in subclause (I), (II), (III), 
                or (IV), including any guarantee or reimbursement 
                obligation in connection with any agreement or 
                transaction referred to in any such subclause.

                ``(v) Repurchase agreement.--The term `repurchase 
            agreement' (including a reverse repurchase agreement)--

                    ``(I) means an agreement, including related terms, 
                which provides for the transfer of one or more 
                certificates of deposit, mortgage-related securities 
                (as such term is defined in section 3 of the Securities 
                Exchange Act of 1934), mortgage loans, interests in 
                mortgage-related securities or mortgage loans, eligible 
                bankers' acceptances, qualified foreign government 
                securities (defined for purposes of this clause as a 
                security that is a direct obligation of, or that is 
                fully guaranteed by, the central government of a member 
                of the Organization for Economic Cooperation and 
                Development, as determined by regulation or order 
                adopted by the appropriate Federal banking authority), 
                or securities that are direct obligations of, or that 
                are fully guaranteed by, the United States or any 
                agency of the United States against the transfer of 
                funds by the transferee of such certificates of 
                deposit, eligible bankers' acceptances, securities, 
                mortgage loans, or interests with a simultaneous 
                agreement by such transferee to transfer to the 
                transferor thereof certificates of deposit, eligible 
                bankers' acceptances, securities, mortgage loans, or 
                interests as described above, at a date certain not 
                later than 1 year after such transfers or on demand, 
                against the transfer of funds, or any other similar 
                agreement;
                    ``(II) does not include any repurchase obligation 
                under a participation in a commercial mortgage loan, 
                unless the Agency determines by regulation, resolution, 
                or order to include any such participation within the 
                meaning of such term;
                    ``(III) means any combination of agreements or 
                transactions referred to in subclauses (I) and (IV);
                    ``(IV) means any option to enter into any agreement 
                or transaction referred to in subclause (I) or (III);
                    ``(V) means a master agreement that provides for an 
                agreement or transaction referred to in subclause (I), 
                (III), or (IV), together with all supplements to any 
                such master agreement, without regard to whether the 
                master agreement provides for an agreement or 
                transaction that is not a repurchase agreement under 
                this clause, except that the master agreement shall be 
                considered to be a repurchase agreement under this 
                subclause only with respect to each agreement or 
                transaction under the master agreement that is referred 
                to in subclause (I), (III), or (IV); and
                    ``(VI) means any security agreement or arrangement 
                or other credit enhancement related to any agreement or 
                transaction referred to in subclause (I), (III), (IV), 
                or (V), including any guarantee or reimbursement 
                obligation in connection with any agreement or 
                transaction referred to in any such subclause.

                ``(vi) Swap agreement.--The term `swap agreement' 
            means--

                    ``(I) any agreement, including the terms and 
                conditions incorporated by reference in any such 
                agreement, which is an interest rate swap, option, 
                future, or forward agreement, including a rate floor, 
                rate cap, rate collar, cross-currency rate swap, and 
                basis swap; a spot, same day-tomorrow, tomorrow-next, 
                forward, or other foreign exchange or precious metals 
                agreement; a currency swap, option, future, or forward 
                agreement; an equity index or equity swap, option, 
                future, or forward agreement; a debt index or debt 
                swap, option, future, or forward agreement; a total 
                return, credit spread or credit swap, option, future, 
                or forward agreement; a commodity index or commodity 
                swap, option, future, or forward agreement; or a 
                weather swap, weather derivative, or weather option;
                    ``(II) any agreement or transaction that is similar 
                to any other agreement or transaction referred to in 
                this clause and that is of a type that has been, is 
                presently, or in the future becomes, the subject of 
                recurrent dealings in the swap markets (including terms 
                and conditions incorporated by reference in such 
                agreement) and that is a forward, swap, future, or 
                option on one or more rates, currencies, commodities, 
                equity securities or other equity instruments, debt 
                securities or other debt instruments, quantitative 
                measures associated with an occurrence, extent of an 
                occurrence, or contingency associated with a financial, 
                commercial, or economic consequence, or economic or 
                financial indices or measures of economic or financial 
                risk or value;
                    ``(III) any combination of agreements or 
                transactions referred to in this clause;
                    ``(IV) any option to enter into any agreement or 
                transaction referred to in this clause;
                    ``(V) a master agreement that provides for an 
                agreement or transaction referred to in subclause (I), 
                (II), (III), or (IV), together with all supplements to 
                any such master agreement, without regard to whether 
                the master agreement contains an agreement or 
                transaction that is not a swap agreement under this 
                clause, except that the master agreement shall be 
                considered to be a swap agreement under this clause 
                only with respect to each agreement or transaction 
                under the master agreement that is referred to in 
                subclause (I), (II), (III), or (IV); and
                    ``(VI) any security agreement or arrangement or 
                other credit enhancement related to any agreements or 
                transactions referred to in subclause (I), (II), (III), 
                (IV), or (V), including any guarantee or reimbursement 
                obligation in connection with any agreement or 
                transaction referred to in any such subclause.

                ``(vii) Treatment of master agreement as one 
            agreement.--Any master agreement for any contract or 
            agreement described in any preceding clause of this 
            subparagraph (or any master agreement for such master 
            agreement or agreements), together with all supplements to 
            such master agreement, shall be treated as a single 
            agreement and a single qualified financial contract. If a 
            master agreement contains provisions relating to agreements 
            or transactions that are not themselves qualified financial 
            contracts, the master agreement shall be deemed to be a 
            qualified financial contract only with respect to those 
            transactions that are themselves qualified financial 
            contracts.
                ``(viii) Transfer.--The term `transfer' means every 
            mode, direct or indirect, absolute or conditional, 
            voluntary or involuntary, of disposing of or parting with 
            property or with an interest in property, including 
            retention of title as a security interest and foreclosure 
            of the equity of redemption of the regulated entity.
            ``(E) Certain protections in event of appointment of 
        conservator.--Notwithstanding any other provision of this 
        section, any other Federal law, or the law of any State (other 
        than paragraph (10) of this subsection and subsection 
        (b)(9)(B)), no person shall be stayed or prohibited from 
        exercising--
                ``(i) any right such person has to cause the 
            termination, liquidation, or acceleration of any qualified 
            financial contract with a regulated entity in a 
            conservatorship based upon a default under such financial 
            contract which is enforceable under applicable 
            noninsolvency law;
                ``(ii) any right under any security agreement or 
            arrangement or other credit enhancement relating to 1 or 
            more such qualified financial contracts; or
                ``(iii) any right to offset or net out any termination 
            values, payment amounts, or other transfer obligations 
            arising under or in connection with such qualified 
            financial contracts.
            ``(F) Clarification.--No provision of law shall be 
        construed as limiting the right or power of the Agency, or 
        authorizing any court or agency to limit or delay in any 
        manner, the right or power of the Agency to transfer any 
        qualified financial contract in accordance with paragraphs (9) 
        and (10), or to disaffirm or repudiate any such contract in 
        accordance with subsection (d)(1).
            ``(G) Walkaway clauses not effective.--
                ``(i) In general.--Notwithstanding the provisions of 
            subparagraphs (A) and (E), and sections 403 and 404 of the 
            Federal Deposit Insurance Corporation Improvement Act of 
            1991, no walkaway clause shall be enforceable in a 
            qualified financial contract of a regulated entity in 
            default.
                ``(ii) Walkaway clause defined.--For purposes of this 
            subparagraph, the term `walkaway clause' means a provision 
            in a qualified financial contract that, after calculation 
            of a value of a party's position or an amount due to or 
            from 1 of the parties in accordance with its terms upon 
            termination, liquidation, or acceleration of the qualified 
            financial contract, either does not create a payment 
            obligation of a party or extinguishes a payment obligation 
            of a party in whole or in part solely because of the status 
            of such party as a nondefaulting party.
        ``(9) Transfer of qualified financial contracts.--In making any 
    transfer of assets or liabilities of a regulated entity in default 
    which includes any qualified financial contract, the conservator or 
    receiver for such regulated entity shall either--
            ``(A) transfer to 1 person--
                ``(i) all qualified financial contracts between any 
            person (or any affiliate of such person) and the regulated 
            entity in default;
                ``(ii) all claims of such person (or any affiliate of 
            such person) against such regulated entity under any such 
            contract (other than any claim which, under the terms of 
            any such contract, is subordinated to the claims of general 
            unsecured creditors of such regulated entity);
                ``(iii) all claims of such regulated entity against 
            such person (or any affiliate of such person) under any 
            such contract; and
                ``(iv) all property securing, or any other credit 
            enhancement for any contract described in clause (i), or 
            any claim described in clause (ii) or (iii) under any such 
            contract; or
            ``(B) transfer none of the financial contracts, claims, or 
        property referred to under subparagraph (A) (with respect to 
        such person and any affiliate of such person).
        ``(10) Notification of transfer.--
            ``(A) In general.--The conservator or receiver shall notify 
        any person that is a party to a contract or transfer by 5:00 
        p.m. (Eastern Standard Time) on the business day following the 
        date of the appointment of the receiver in the case of a 
        receivership, or the business day following such transfer in 
        the case of a conservatorship, if--
                ``(i) the conservator or receiver for a regulated 
            entity in default makes any transfer of the assets and 
            liabilities of such regulated entity; and
                ``(ii) such transfer includes any qualified financial 
            contract.
            ``(B) Certain rights not enforceable.--
                ``(i) Receivership.--A person who is a party to a 
            qualified financial contract with a regulated entity may 
            not exercise any right that such person has to terminate, 
            liquidate, or net such contract under paragraph (8)(A) of 
            this subsection or under section 403 or 404 of the Federal 
            Deposit Insurance Corporation Improvement Act of 1991, 
            solely by reason of or incidental to the appointment of a 
            receiver for the regulated entity (or the insolvency or 
            financial condition of the regulated entity for which the 
            receiver has been appointed)--

                    ``(I) until 5:00 p.m. (Eastern Standard Time) on 
                the business day following the date of the appointment 
                of the receiver; or
                    ``(II) after the person has received notice that 
                the contract has been transferred pursuant to paragraph 
                (9)(A).

                ``(ii) Conservatorship.--A person who is a party to a 
            qualified financial contract with a regulated entity may 
            not exercise any right that such person has to terminate, 
            liquidate, or net such contract under paragraph (8)(E) of 
            this subsection or under section 403 or 404 of the Federal 
            Deposit Insurance Corporation Improvement Act of 1991, 
            solely by reason of or incidental to the appointment of a 
            conservator for the regulated entity (or the insolvency or 
            financial condition of the regulated entity for which the 
            conservator has been appointed).
                ``(iii) Notice.--For purposes of this paragraph, the 
            conservator or receiver of a regulated entity shall be 
            deemed to have notified a person who is a party to a 
            qualified financial contract with such regulated entity, if 
            the conservator or receiver has taken steps reasonably 
            calculated to provide notice to such person by the time 
            specified in subparagraph (A).
            ``(C) Business day defined.--For purposes of this 
        paragraph, the term `business day' means any day other than any 
        Saturday, Sunday, or any day on which either the New York Stock 
        Exchange or the Federal Reserve Bank of New York is closed.
        ``(11) Disaffirmance or repudiation of qualified financial 
    contracts.--In exercising the rights of disaffirmance or 
    repudiation of a conservator or receiver with respect to any 
    qualified financial contract to which a regulated entity is a 
    party, the conservator or receiver for such institution shall 
    either--
            ``(A) disaffirm or repudiate all qualified financial 
        contracts between--
                ``(i) any person or any affiliate of such person; and
                ``(ii) the regulated entity in default; or
            ``(B) disaffirm or repudiate none of the qualified 
        financial contracts referred to in subparagraph (A) (with 
        respect to such person or any affiliate of such person).
        ``(12) Certain security interests not avoidable.--No provision 
    of this subsection shall be construed as permitting the avoidance 
    of any legally enforceable or perfected security interest in any of 
    the assets of any regulated entity, except where such an interest 
    is taken in contemplation of the insolvency of the regulated 
    entity, or with the intent to hinder, delay, or defraud the 
    regulated entity or the creditors of such regulated entity.
        ``(13) Authority to enforce contracts.--
            ``(A) In general.--Notwithstanding any provision of a 
        contract providing for termination, default, acceleration, or 
        exercise of rights upon, or solely by reason of, insolvency or 
        the appointment of, or the exercise of rights or powers by, a 
        conservator or receiver, the conservator or receiver may 
        enforce any contract, other than a contract for liability 
        insurance for a director or officer, or a contract or a 
        regulated entity bond, entered into by the regulated entity.
            ``(B) Certain rights not affected.--No provision of this 
        paragraph may be construed as impairing or affecting any right 
        of the conservator or receiver to enforce or recover under a 
        liability insurance contract for an officer or director, or 
        regulated entity bond under other applicable law.
            ``(C) Consent requirement.--
                ``(i) In general.--Except as otherwise provided under 
            this section, no person may exercise any right or power to 
            terminate, accelerate, or declare a default under any 
            contract to which a regulated entity is a party, or to 
            obtain possession of or exercise control over any property 
            of the regulated entity, or affect any contractual rights 
            of the regulated entity, without the consent of the 
            conservator or receiver, as appropriate, for a period of--

                    ``(I) 45 days after the date of appointment of a 
                conservator; or
                    ``(II) 90 days after the date of appointment of a 
                receiver.

                ``(ii) Exceptions.--This subparagraph shall not--

                    ``(I) apply to a contract for liability insurance 
                for an officer or director;
                    ``(II) apply to the rights of parties to certain 
                qualified financial contracts under subsection (d)(8); 
                and
                    ``(III) be construed as permitting the conservator 
                or receiver to fail to comply with otherwise 
                enforceable provisions of such contracts.

        ``(14) Savings clause.--The meanings of terms used in this 
    subsection are applicable for purposes of this subsection only, and 
    shall not be construed or applied so as to challenge or affect the 
    characterization, definition, or treatment of any similar terms 
    under any other statute, regulation, or rule, including the Gramm-
    Leach-Bliley Act, the Legal Certainty for Bank Products Act of 
    2000, the securities laws (as that term is defined in section 
    3(a)(47) of the Securities Exchange Act of 1934), and the Commodity 
    Exchange Act.
        ``(15) Exception for federal reserve and federal home loan 
    banks.--No provision of this subsection shall apply with respect 
    to--
            ``(A) any extension of credit from any Federal Home Loan 
        Bank or Federal Reserve Bank to any regulated entity; or
            ``(B) any security interest in the assets of the regulated 
        entity securing any such extension of credit.
    ``(e) Valuation of Claims in Default.--
        ``(1) In general.--Notwithstanding any other provision of 
    Federal law or the law of any State, and regardless of the method 
    which the Agency determines to utilize with respect to a regulated 
    entity in default or in danger of default, including transactions 
    authorized under subsection (i), this subsection shall govern the 
    rights of the creditors of such regulated entity.
        ``(2) Maximum liability.--The maximum liability of the Agency, 
    acting as receiver or in any other capacity, to any person having a 
    claim against the receiver or the regulated entity for which such 
    receiver is appointed shall be not more than the amount that such 
    claimant would have received if the Agency had liquidated the 
    assets and liabilities of the regulated entity without exercising 
    the authority of the Agency under subsection (i).
    ``(f) Limitation on Court Action.--Except as provided in this 
section or at the request of the Director, no court may take any action 
to restrain or affect the exercise of powers or functions of the Agency 
as a conservator or a receiver.
    ``(g) Liability of Directors and Officers.--
        ``(1) In general.--A director or officer of a regulated entity 
    may be held personally liable for monetary damages in any civil 
    action described in paragraph (2) brought by, on behalf of, or at 
    the request or direction of the Agency, and prosecuted wholly or 
    partially for the benefit of the Agency--
            ``(A) acting as conservator or receiver of such regulated 
        entity; or
            ``(B) acting based upon a suit, claim, or cause of action 
        purchased from, assigned by, or otherwise conveyed by such 
        receiver or conservator.
        ``(2) Actions addressed.--Paragraph (1) applies in any civil 
    action for gross negligence, including any similar conduct or 
    conduct that demonstrates a greater disregard of a duty of care 
    than gross negligence, including intentional tortious conduct, as 
    such terms are defined and determined under applicable State law.
        ``(3) No limitation.--Nothing in this subsection shall impair 
    or affect any right of the Agency under other applicable law.
    ``(h) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to a regulated 
entity, recoverable damages determined to result from the improvident 
or otherwise improper use or investment of any assets of the regulated 
entity shall include principal losses and appropriate interest.
    ``(i) Limited-Life Regulated Entities.--
        ``(1) Organization.--
            ``(A) Purpose.--The Agency, as receiver appointed pursuant 
        to subsection (a)--
                ``(i) may, in the case of a Federal Home Loan Bank, 
            organize a limited-life regulated entity with those powers 
            and attributes of the Federal Home Loan Bank in default or 
            in danger of default as the Director determines necessary, 
            subject to the provisions of this subsection, and the 
            Director shall grant a temporary charter to that limited-
            life regulated entity, and that limited-life regulated 
            entity may operate subject to that charter; and
                ``(ii) shall, in the case of an enterprise, organize a 
            limited-life regulated entity with respect to that 
            enterprise in accordance with this subsection.
            ``(B) Authorities.--Upon the creation of a limited-life 
        regulated entity under subparagraph (A), the limited-life 
        regulated entity may--
                ``(i) assume such liabilities of the regulated entity 
            that is in default or in danger of default as the Agency 
            may, in its discretion, determine to be appropriate, except 
            that the liabilities assumed shall not exceed the amount of 
            assets purchased or transferred from the regulated entity 
            to the limited-life regulated entity;
                ``(ii) purchase such assets of the regulated entity 
            that is in default, or in danger of default as the Agency 
            may, in its discretion, determine to be appropriate; and
                ``(iii) perform any other temporary function which the 
            Agency may, in its discretion, prescribe in accordance with 
            this section.
        ``(2) Charter and establishment.--
            ``(A) Transfer of charter.--
                ``(i) Fannie mae.--If the Agency is appointed as 
            receiver for the Federal National Mortgage Association, the 
            limited-life regulated entity established under this 
            subsection with respect to such enterprise shall, by 
            operation of law and immediately upon its organization--

                    ``(I) succeed to the charter of the Federal 
                National Mortgage Association, as set forth in the 
                Federal National Mortgage Association Charter Act; and
                    ``(II) thereafter operate in accordance with, and 
                subject to, such charter, this Act, and any other 
                provision of law to which the Federal National Mortgage 
                Association is subject, except as otherwise provided in 
                this subsection.

                ``(ii) Freddie mac.--If the Agency is appointed as 
            receiver for the Federal Home Loan Mortgage Corporation, 
            the limited-life regulated entity established under this 
            subsection with respect to such enterprise shall, by 
            operation of law and immediately upon its organization--

                    ``(I) succeed to the charter of the Federal Home 
                Loan Mortgage Corporation, as set forth in the Federal 
                Home Loan Mortgage Corporation Charter Act; and
                    ``(II) thereafter operate in accordance with, and 
                subject to, such charter, this Act, and any other 
                provision of law to which the Federal Home Loan 
                Mortgage Corporation is subject, except as otherwise 
                provided in this subsection.

            ``(B) Interests in and assets and obligations of regulated 
        entity in default.--Notwithstanding subparagraph (A) or any 
        other provision of law--
                ``(i) a limited-life regulated entity shall assume, 
            acquire, or succeed to the assets or liabilities of a 
            regulated entity only to the extent that such assets or 
            liabilities are transferred by the Agency to the limited-
            life regulated entity in accordance with, and subject to 
            the restrictions set forth in, paragraph (1)(B);
                ``(ii) a limited-life regulated entity shall not 
            assume, acquire, or succeed to any obligation that a 
            regulated entity for which a receiver has been appointed 
            may have to any shareholder of the regulated entity that 
            arises as a result of the status of that person as a 
            shareholder of the regulated entity; and
                ``(iii) no shareholder or creditor of a regulated 
            entity shall have any right or claim against the charter of 
            the regulated entity once the Agency has been appointed 
            receiver for the regulated entity and a limited-life 
            regulated entity succeeds to the charter pursuant to 
            subparagraph (A).
            ``(C) Limited-life regulated entity treated as being in 
        default for certain purposes.--A limited-life regulated entity 
        shall be treated as a regulated entity in default at such times 
        and for such purposes as the Agency may, in its discretion, 
        determine.
            ``(D) Management.--Upon its establishment, a limited-life 
        regulated entity shall be under the management of a board of 
        directors consisting of not fewer than 5 nor more than 10 
        members appointed by the Agency.
            ``(E) Bylaws.--The board of directors of a limited-life 
        regulated entity shall adopt such bylaws as may be approved by 
        the Agency.
        ``(3) Capital stock.--
                ``(A) No agency requirement.--The Agency is not 
            required to pay capital stock into a limited-life regulated 
            entity or to issue any capital stock on behalf of a 
            limited-life regulated entity established under this 
            subsection.
                ``(B) Authority.--If the Director determines that such 
            action is advisable, the Agency may cause capital stock or 
            other securities of a limited-life regulated entity 
            established with respect to an enterprise to be issued and 
            offered for sale, in such amounts and on such terms and 
            conditions as the Director may determine, in the discretion 
            of the Director.
        ``(4) Investments.--Funds of a limited-life regulated entity 
    shall be kept on hand in cash, invested in obligations of the 
    United States or obligations guaranteed as to principal and 
    interest by the United States, or deposited with the Agency, or any 
    Federal reserve bank.
        ``(5) Exempt tax status.--Notwithstanding any other provision 
    of Federal or State law, a limited-life regulated entity, its 
    franchise, property, and income shall be exempt from all taxation 
    now or hereafter imposed by the United States, by any territory, 
    dependency, or possession thereof, or by any State, county, 
    municipality, or local taxing authority.
        ``(6) Winding up.--
            ``(A) In general.--Subject to subparagraphs (B) and (C), 
        not later than 2 years after the date of its organization, the 
        Agency shall wind up the affairs of a limited-life regulated 
        entity.
            ``(B) Extension.--The Director may, in the discretion of 
        the Director, extend the status of a limited-life regulated 
        entity for 3 additional 1-year periods.
            ``(C) Termination of status as limited-life regulated 
        entity.--
                ``(i) In general.--Upon the sale by the Agency of 80 
            percent or more of the capital stock of a limited-life 
            regulated entity, as defined in clause (iv), to 1 or more 
            persons (other than the Agency)--

                    ``(I) the status of the limited-life regulated 
                entity as such shall terminate; and
                    ``(II) the entity shall cease to be a limited-life 
                regulated entity for purposes of this subsection.

                ``(ii) Divestiture of remaining stock, if any.--

                    ``(I) In general.--Not later than 1 year after the 
                date on which the status of a limited-life regulated 
                entity is terminated pursuant to clause (i), the Agency 
                shall sell to 1 or more persons (other than the Agency) 
                any remaining capital stock of the former limited-life 
                regulated entity.
                    ``(II) Extension authorized.--The Director may 
                extend the period referred to in subclause (I) for not 
                longer than an additional 2 years, if the Director 
                determines that such action would be in the public 
                interest.

                ``(iii) Savings clause.--Notwithstanding any provision 
            of law, other than clause (ii), the Agency shall not be 
            required to sell the capital stock of an enterprise or a 
            limited-life regulated entity established with respect to 
            an enterprise.
                ``(iv) Applicability.--This subparagraph applies only 
            with respect to a limited-life regulated entity that is 
            established with respect to an enterprise.
        ``(7) Transfer of assets and liabilities.--
            ``(A) In general.--
                ``(i) Transfer of assets and liabilities.--The Agency, 
            as receiver, may transfer any assets and liabilities of a 
            regulated entity in default, or in danger of default, to 
            the limited-life regulated entity in accordance with and 
            subject to the restrictions of paragraph (1).
                ``(ii) Subsequent transfers.--At any time after the 
            establishment of a limited-life regulated entity, the 
            Agency, as receiver, may transfer any assets and 
            liabilities of the regulated entity in default, or in 
            danger of default, as the Agency may, in its discretion, 
            determine to be appropriate in accordance with and subject 
            to the restrictions of paragraph (1).
                ``(iii) Effective without approval.--The transfer of 
            any assets or liabilities of a regulated entity in default 
            or in danger of default to a limited-life regulated entity 
            shall be effective without any further approval under 
            Federal or State law, assignment, or consent with respect 
            thereto.
                ``(iv) Equitable treatment of similarly situated 
            creditors.--The Agency shall treat all creditors of a 
            regulated entity in default or in danger of default that 
            are similarly situated under subsection (c)(1) in a similar 
            manner in exercising the authority of the Agency under this 
            subsection to transfer any assets or liabilities of the 
            regulated entity to the limited-life regulated entity 
            established with respect to such regulated entity, except 
            that the Agency may take actions (including making 
            payments) that do not comply with this clause, if--

                    ``(I) the Director determines that such actions are 
                necessary to maximize the value of the assets of the 
                regulated entity, to maximize the present value return 
                from the sale or other disposition of the assets of the 
                regulated entity, or to minimize the amount of any loss 
                realized upon the sale or other disposition of the 
                assets of the regulated entity; and
                    ``(II) all creditors that are similarly situated 
                under subsection (c)(1) receive not less than the 
                amount provided in subsection (e)(2).

                ``(v) Limitation on transfer of liabilities.--
            Notwithstanding any other provision of law, the aggregate 
            amount of liabilities of a regulated entity that are 
            transferred to, or assumed by, a limited-life regulated 
            entity may not exceed the aggregate amount of assets of the 
            regulated entity that are transferred to, or purchased by, 
            the limited-life regulated entity.
        ``(8) Regulations.--The Agency may promulgate such regulations 
    as the Agency determines to be necessary or appropriate to 
    implement this subsection.
        ``(9) Powers of limited-life regulated entities.--
            ``(A) In general.--Each limited-life regulated entity 
        created under this subsection shall have all corporate powers 
        of, and be subject to the same provisions of law as, the 
        regulated entity in default or in danger of default to which it 
        relates, except that--
                ``(i) the Agency may--

                    ``(I) remove the directors of a limited-life 
                regulated entity;
                    ``(II) fix the compensation of members of the board 
                of directors and senior management, as determined by 
                the Agency in its discretion, of a limited-life 
                regulated entity; and
                    ``(III) indemnify the representatives for purposes 
                of paragraph (1)(B), and the directors, officers, 
                employees, and agents of a limited-life regulated 
                entity on such terms as the Agency determines to be 
                appropriate; and

                ``(ii) the board of directors of a limited-life 
            regulated entity--

                    ``(I) shall elect a chairperson who may also serve 
                in the position of chief executive officer, except that 
                such person shall not serve either as chairperson or as 
                chief executive officer without the prior approval of 
                the Agency; and
                    ``(II) may appoint a chief executive officer who is 
                not also the chairperson, except that such person shall 
                not serve as chief executive officer without the prior 
                approval of the Agency.

            ``(B) Stay of judicial action.--Any judicial action to 
        which a limited-life regulated entity becomes a party by virtue 
        of its acquisition of any assets or assumption of any 
        liabilities of a regulated entity in default shall be stayed 
        from further proceedings for a period of not longer than 45 
        days, at the request of the limited-life regulated entity. Such 
        period may be modified upon the consent of all parties.
        ``(10) No federal status.--
            ``(A) Agency status.--A limited-life regulated entity is 
        not an agency, establishment, or instrumentality of the United 
        States.
            ``(B) Employee status.--Representatives for purposes of 
        paragraph (1)(B), interim directors, directors, officers, 
        employees, or agents of a limited-life regulated entity are 
        not, solely by virtue of service in any such capacity, officers 
        or employees of the United States. Any employee of the Agency 
        or of any Federal instrumentality who serves at the request of 
        the Agency as a representative for purposes of paragraph 
        (1)(B), interim director, director, officer, employee, or agent 
        of a limited-life regulated entity shall not--
                ``(i) solely by virtue of service in any such capacity 
            lose any existing status as an officer or employee of the 
            United States for purposes of title 5, United States Code, 
            or any other provision of law; or
                ``(ii) receive any salary or benefits for service in 
            any such capacity with respect to a limited-life regulated 
            entity in addition to such salary or benefits as are 
            obtained through employment with the Agency or such Federal 
            instrumentality.
        ``(11) Authority to obtain credit.--
            ``(A) In general.--A limited-life regulated entity may 
        obtain unsecured credit and issue unsecured debt.
            ``(B) Inability to obtain credit.--If a limited-life 
        regulated entity is unable to obtain unsecured credit or issue 
        unsecured debt, the Director may authorize the obtaining of 
        credit or the issuance of debt by the limited-life regulated 
        entity--
                ``(i) with priority over any or all of the obligations 
            of the limited-life regulated entity;
                ``(ii) secured by a lien on property of the limited-
            life regulated entity that is not otherwise subject to a 
            lien; or
                ``(iii) secured by a junior lien on property of the 
            limited-life regulated entity that is subject to a lien.
            ``(C) Limitations.--
                ``(i) In general.--The Director, after notice and a 
            hearing, may authorize the obtaining of credit or the 
            issuance of debt by a limited-life regulated entity that is 
            secured by a senior or equal lien on property of the 
            limited-life regulated entity that is subject to a lien 
            (other than mortgages that collateralize the mortgage-
            backed securities issued or guaranteed by an enterprise) 
            only if--

                    ``(I) the limited-life regulated entity is unable 
                to otherwise obtain such credit or issue such debt; and
                    ``(II) there is adequate protection of the interest 
                of the holder of the lien on the property with respect 
                to which such senior or equal lien is proposed to be 
                granted.

            ``(D) Burden of proof.--In any hearing under this 
        subsection, the Director has the burden of proof on the issue 
        of adequate protection.
        ``(12) Effect on debts and liens.--The reversal or modification 
    on appeal of an authorization under this subsection to obtain 
    credit or issue debt, or of a grant under this section of a 
    priority or a lien, does not affect the validity of any debt so 
    issued, or any priority or lien so granted, to an entity that 
    extended such credit in good faith, whether or not such entity knew 
    of the pendency of the appeal, unless such authorization and the 
    issuance of such debt, or the granting of such priority or lien, 
    were stayed pending appeal.
    ``(j) Other Agency Exemptions.--
        ``(1) Applicability.--The provisions of this subsection shall 
    apply with respect to the Agency in any case in which the Agency is 
    acting as a conservator or a receiver.
        ``(2) Taxation.--The Agency, including its franchise, its 
    capital, reserves, and surplus, and its income, shall be exempt 
    from all taxation imposed by any State, county, municipality, or 
    local taxing authority, except that any real property of the Agency 
    shall be subject to State, territorial, county, municipal, or local 
    taxation to the same extent according to its value as other real 
    property is taxed, except that, notwithstanding the failure of any 
    person to challenge an assessment under State law of the value of 
    such property, and the tax thereon, shall be determined as of the 
    period for which such tax is imposed.
        ``(3) Property protection.--No property of the Agency shall be 
    subject to levy, attachment, garnishment, foreclosure, or sale 
    without the consent of the Agency, nor shall any involuntary lien 
    attach to the property of the Agency.
        ``(4) Penalties and fines.--The Agency shall not be liable for 
    any amounts in the nature of penalties or fines, including those 
    arising from the failure of any person to pay any real property, 
    personal property, probate, or recording tax or any recording or 
    filing fees when due.
    ``(k) Prohibition of Charter Revocation.--In no case may the 
receiver appointed pursuant to this section revoke, annul, or terminate 
the charter of an enterprise.''.
    (b) Technical and Conforming Amendments.--The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended--
        (1) in section 1368 (12 U.S.C. 4618)--
            (A) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity''; and
            (B) by striking ``the enterprise'' each place that term 
        appears and inserting ``the regulated entity'';
        (2) in section 1369C (12 U.S.C. 4622), by striking 
    ``enterprise'' each place that term appears and inserting 
    ``regulated entity'';
        (3) in section 1369D (12 U.S.C. 4623)--
            (A) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity''; and
            (B) in subsection (a)(1), by striking ``An enterprise'' and 
        inserting ``A regulated entity''; and
        (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
    4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

SEC. 1151. CEASE AND DESIST PROCEEDINGS.

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

SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.

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

SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.

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

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

    ``(a) Authority To Issue Order.--
        ``(1) In general.--The Director may serve upon a party 
    described in paragraph (2), or any officer, director, or management 
    of the Office of Finance a written notice of the intention of the 
    Director to suspend or remove such party from office, or prohibit 
    any further participation by such party, in any manner, in the 
    conduct of the affairs of the regulated entity.
        ``(2) Applicability.--A party described in this paragraph is an 
    entity-affiliated party or any officer, director, or management of 
    the Office of Finance, if the Director determines that--
            ``(A) that party, officer, or director has, directly or 
        indirectly--
                ``(i) violated--

                    ``(I) any law or regulation;
                    ``(II) any cease and desist order which has become 
                final;
                    ``(III) any condition imposed in writing by the 
                Director in connection with the grant of any 
                application or other request by such regulated entity; 
                or
                    ``(IV) any written agreement between such regulated 
                entity and the Director;

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

SEC. 1154. ENFORCEMENT AND JURISDICTION.

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

SEC. 1155. CIVIL MONEY PENALTIES.

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

SEC. 1156. CRIMINAL PENALTY.

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

``SEC. 1378. CRIMINAL PENALTY.

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

SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.

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

SEC. 1158. SUBPOENA AUTHORITY.

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

                     Subtitle E--General Provisions

SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.

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

SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES.

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

SEC. 1163. EFFECTIVE DATE.

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

                   TITLE II--FEDERAL HOME LOAN BANKS

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

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

SEC. 1202. DIRECTORS.

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

SEC. 1203. DEFINITIONS.

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

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

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than 
in provisions of that Act added or amended otherwise by this Act, is 
amended--
        (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 1422b);
        (2) in section 18 (12 U.S.C. 1438), by striking subsection (b);
        (3) in section 11 (12 U.S.C. 1431)--
            (A) in subsection (b)--
                (i) in the first sentence--

                    (I) by striking ``The Board'' and inserting ``The 
                Office of Finance, as agent for the Banks,''; and
                    (II) by striking ``the Board'' and inserting ``such 
                Office''; and

                (ii) in the second and fourth sentences, by striking 
            ``the Board'' each place such term appears and inserting 
            ``the Office of Finance'';
            (B) in subsection (c)--
                (i) by striking ``the Board'' the first place such term 
            appears and inserting ``the Office of Finance, as agent for 
            the Banks,''; and
                (ii) by striking ``the Board'' the second place such 
            term appears and inserting ``such Office''; and
            (C) in subsection (f)--
                (i) by striking the 2 commas after ``permit'' and 
            inserting ``or''; and
                (ii) by striking the comma after ``require'';
        (4) in section 6 (12 U.S.C. 1426)--
            (A) in subsection (b)(1), in the matter preceding 
        subparagraph (A), by striking ``Finance Board approval'' and 
        inserting ``approval by the Director''; and
            (B) in each of subsections (c)(4)(B) and (d)(2), by 
        striking ``Finance Board regulations'' each place that term 
        appears and inserting ``regulations of the Director'';
        (5) in section 10(b) (12 U.S.C. 1430(b))--
            (A) in the subsection heading, by striking ``Formal Board 
        Resolution'' and inserting ``Approval of Director''; and
            (B) by striking ``by formal resolution'';
        (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
    ``Chairperson of the Federal Housing Finance Board'' and inserting 
    ``Director'';
        (7) in section 15 (12 U.S.C. 1435), by inserting ``or the 
    Director'' after ``the Board'';
        (8) by striking ``the Board'' each place that term appears and 
    inserting ``the Director'';
        (9) by striking ``The Board'' each place that term appears and 
    inserting ``The Director'';
        (10) by striking ``the Finance Board'' each place that term 
    appears and inserting ``the Director'';
        (11) by striking ``The Finance Board'' each place that term 
    appears and inserting ``The Director''; and
        (12) by striking ``Federal Housing Finance Board'' each place 
    that term appears and inserting ``Director''.

SEC. 1205. HOUSING GOALS.

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

``SEC. 10C. HOUSING GOALS.

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

SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

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

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

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

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

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

SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.

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

SEC. 1209. VOLUNTARY MERGERS.

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

SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.

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

SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

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

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

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

SEC. 1213. SEMIANNUAL REPORTS.

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

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

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

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

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

SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS.

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

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

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

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

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

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

SEC. 1301. ABOLISHMENT OF OFHEO.

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

SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

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

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

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

SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.

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

               Subtitle B--Federal Housing Finance Board

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

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

SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

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

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

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

SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.

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

                     TITLE IV--HOPE FOR HOMEOWNERS

SEC. 1401. SHORT TITLE.

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

SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.

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

``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.

    ``(a) Establishment.--There is established in the Federal Housing 
Administration a HOPE for Homeowners Program.
    ``(b) Purpose.--The purpose of the HOPE for Homeowners Program is--
        ``(1) to create an FHA program, participation in which is 
    voluntary on the part of homeowners and existing loan holders to 
    insure refinanced loans for distressed borrowers to support long-
    term, sustainable homeownership;
        ``(2) to allow homeowners to avoid foreclosure by reducing the 
    principle balance outstanding, and interest rate charged, on their 
    mortgages;
        ``(3) to help stabilize and provide confidence in mortgage 
    markets by bringing transparency to the value of assets based on 
    mortgage assets;
        ``(4) to target mortgage assistance under this section to 
    homeowners for their principal residence;
        ``(5) to enhance the administrative capacity of the FHA to 
    carry out its expanded role under the HOPE for Homeowners Program;
        ``(6) to ensure the HOPE for Homeowners Program remains in 
    effect only for as long as is necessary to provide stability to the 
    housing market; and
        ``(7) to provide servicers of delinquent mortgages with 
    additional methods and approaches to avoid foreclosure.
    ``(c) Establishment and Implementation of Program Requirements.--
        ``(1) Duties of the board.--In order to carry out the purposes 
    of the HOPE for Homeowners Program, the Board shall--
            ``(A) establish requirements and standards for the program; 
        and
            ``(B) prescribe such regulations and provide such guidance 
        as may be necessary or appropriate to implement such 
        requirements and standards.
        ``(2) Duties of the secretary.--In carrying out any of the 
    program requirements or standards established under paragraph (1), 
    the Secretary may issue such interim guidance and mortgagee letters 
    as the Secretary determines necessary or appropriate.
    ``(d) Insurance of Mortgages.--The Secretary is authorized upon 
application of a mortgagee to make commitments to insure or to insure 
any eligible mortgage that has been refinanced in a manner meeting the 
requirements under subsection (e).
    ``(e) Requirements of Insured Mortgages.--To be eligible for 
insurance under this section, a refinanced eligible mortgage shall 
comply with all of the following requirements:
        ``(1) Lack of capacity to pay existing mortgage.--
            ``(A) Borrower certification.--
                ``(i) In general.--The mortgagor shall provide 
            certification to the Secretary that the mortgagor has not 
            intentionally defaulted on the mortgage or any other debt, 
            and has not knowingly, or willfully and with actual 
            knowledge, furnished material information known to be false 
            for the purpose of obtaining any eligible mortgage.
                ``(ii) Penalties.--

                    ``(I) False statement.--Any certification filed 
                pursuant to clause (i) shall contain an acknowledgment 
                that any willful false statement made in such 
                certification is punishable under section 1001, of 
                title 18, United States Code, by fine or imprisonment 
                of not more than 5 years, or both.
                    ``(II) Liability for repayment.--The mortgagor 
                shall agree in writing that the mortgagor shall be 
                liable to repay to the Federal Housing Administration 
                any direct financial benefit achieved from the 
                reduction of indebtedness on the existing mortgage or 
                mortgages on the residence refinanced under this 
                section derived from misrepresentations made in the 
                certifications and documentation required under this 
                subparagraph, subject to the discretion of the 
                Secretary.

            ``(B) Current borrower debt-to-income ratio.--As of March 
        1, 2008, the mortgagor shall have had a ratio of mortgage debt 
        to income, taking into consideration all existing mortgages of 
        that mortgagor at such time, greater than 31 percent (or such 
        higher amount as the Board determines appropriate).
        ``(2) Determination of principal obligation amount.--The 
    principal obligation amount of the refinanced eligible mortgage to 
    be insured shall--
            ``(A) be determined by the reasonable ability of the 
        mortgagor to make his or her mortgage payments, as such ability 
        is determined by the Secretary pursuant to section 203(b)(4) or 
        by any other underwriting standards established by the Board; 
        and
            ``(B) not exceed 90 percent of the appraised value of the 
        property to which such mortgage relates.
        ``(3) Required waiver of prepayment penalties and fees.--All 
    penalties for prepayment or refinancing of the eligible mortgage, 
    and all fees and penalties related to default or delinquency on the 
    eligible mortgage, shall be waived or forgiven.
        ``(4) Extinguishment of subordinate liens.--
            ``(A) Required agreement.--All holders of outstanding 
        mortgage liens on the property to which the eligible mortgage 
        relates shall agree to accept the proceeds of the insured loan 
        as payment in full of all indebtedness under the eligible 
        mortgage, and all encumbrances related to such eligible 
        mortgage shall be removed. The Secretary may take such actions, 
        subject to standards established by the Board under 
        subparagraph (B), as may be necessary and appropriate to 
        facilitate coordination and agreement between the holders of 
        the existing senior mortgage and any existing subordinate 
        mortgages, taking into consideration the subordinate lien 
        status of such subordinate mortgages.
            ``(B) Shared appreciation.--
                ``(i) In general.--The Board shall establish standards 
            and policies that will allow for the payment to the holder 
            of any existing subordinate mortgage of a portion of any 
            future appreciation in the property secured by such 
            eligible mortgage that is owed to the Secretary pursuant to 
            subsection (k).
                ``(ii) Factors.--In establishing the standards and 
            policies required under clause (i), the Board shall take 
            into consideration--

                    ``(I) the status of any subordinate mortgage;
                    ``(II) the outstanding principal balance of and 
                accrued interest on the existing senior mortgage and 
                any outstanding subordinate mortgages;
                    ``(III) the extent to which the current appraised 
                value of the property securing a subordinate mortgage 
                is less than the outstanding principal balance and 
                accrued interest on any other liens that are senior to 
                such subordinate mortgage; and
                    ``(IV) such other factors as the Board determines 
                to be appropriate.

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

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

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

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

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

SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.

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

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

SEC. 1501. SHORT TITLE.

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

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

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

SEC. 1503. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
        (1) Federal banking agencies.--The term ``Federal banking 
    agencies'' means the Board of Governors of the Federal Reserve 
    System, the Comptroller of the Currency, the Director of the Office 
    of Thrift Supervision, the National Credit Union Administration, 
    and the Federal Deposit Insurance Corporation.
        (2) Depository institution.--The term ``depository 
    institution'' has the same meaning as in section 3 of the Federal 
    Deposit Insurance Act, and includes any credit union.
        (3) Loan originator.--
            (A) In general.--The term ``loan originator''--
                (i) means an individual who--

                    (I) takes a residential mortgage loan application; 
                and
                    (II) offers or negotiates terms of a residential 
                mortgage loan for compensation or gain;

                (ii) does not include any individual who is not 
            otherwise described in clause (i) and who performs purely 
            administrative or clerical tasks on behalf of a person who 
            is described in any such clause;
                (iii) does not include a person or entity that only 
            performs real estate brokerage activities and is licensed 
            or registered in accordance with applicable State law, 
            unless the person or entity is compensated by a lender, a 
            mortgage broker, or other loan originator or by any agent 
            of such lender, mortgage broker, or other loan originator; 
            and
                (iv) does not include a person or entity solely 
            involved in extensions of credit relating to timeshare 
            plans, as that term is defined in section 101(53D) of title 
            11, United States Code.
            (B) Other definitions relating to loan originator.--For 
        purposes of this subsection, an individual ``assists a consumer 
        in obtaining or applying to obtain a residential mortgage 
        loan'' by, among other things, advising on loan terms 
        (including rates, fees, other costs), preparing loan packages, 
        or collecting information on behalf of the consumer with regard 
        to a residential mortgage loan.
            (C) Administrative or clerical tasks.--The term 
        ``administrative or clerical tasks'' means the receipt, 
        collection, and distribution of information common for the 
        processing or underwriting of a loan in the mortgage industry 
        and communication with a consumer to obtain information 
        necessary for the processing or underwriting of a residential 
        mortgage loan.
            (D) Real estate brokerage activity defined.--The term 
        ``real estate brokerage activity'' means any activity that 
        involves offering or providing real estate brokerage services 
        to the public, including--
                (i) acting as a real estate agent or real estate broker 
            for a buyer, seller, lessor, or lessee of real property;
                (ii) bringing together parties interested in the sale, 
            purchase, lease, rental, or exchange of real property;
                (iii) negotiating, on behalf of any party, any portion 
            of a contract relating to the sale, purchase, lease, 
            rental, or exchange of real property (other than in 
            connection with providing financing with respect to any 
            such transaction);
                (iv) engaging in any activity for which a person 
            engaged in the activity is required to be registered or 
            licensed as a real estate agent or real estate broker under 
            any applicable law; and
                (v) offering to engage in any activity, or act in any 
            capacity, described in clause (i), (ii), (iii), or (iv).
        (4) Loan processor or underwriter.--
            (A) In general.--The term ``loan processor or underwriter'' 
        means an individual who performs clerical or support duties at 
        the direction of and subject to the supervision and instruction 
        of--
                (i) a State-licensed loan originator; or
                (ii) a registered loan originator.
            (B) Clerical or support duties.--For purposes of 
        subparagraph (A), the term ``clerical or support duties'' may 
        include--
                (i) the receipt, collection, distribution, and analysis 
            of information common for the processing or underwriting of 
            a residential mortgage loan; and
                (ii) communicating with a consumer to obtain the 
            information necessary for the processing or underwriting of 
            a loan, to the extent that such communication does not 
            include offering or negotiating loan rates or terms, or 
            counseling consumers about residential mortgage loan rates 
            or terms.
        (5) Nationwide mortgage licensing system and registry.--The 
    term ``Nationwide Mortgage Licensing System and Registry'' means a 
    mortgage licensing system developed and maintained by the 
    Conference of State Bank Supervisors and the American Association 
    of Residential Mortgage Regulators for the State licensing and 
    registration of State-licensed loan originators and the 
    registration of registered loan originators or any system 
    established by the Secretary under section 1509.
        (6) Nontraditional mortgage product.--The term ``nontraditional 
    mortgage product'' means any mortgage product other than a 30-year 
    fixed rate mortgage.
        (7) Registered loan originator.--The term ``registered loan 
    originator'' means any individual who--
            (A) meets the definition of loan originator and is an 
        employee of--
                (i) a depository institution;
                (ii) a subsidiary that is--

                    (I) owned and controlled by a depository 
                institution; and
                    (II) regulated by a Federal banking agency; or

                (iii) an institution regulated by the Farm Credit 
            Administration; and
            (B) is registered with, and maintains a unique identifier 
        through, the Nationwide Mortgage Licensing System and Registry.
        (8) Residential mortgage loan.--The term ``residential mortgage 
    loan'' means any loan primarily for personal, family, or household 
    use that is secured by a mortgage, deed of trust, or other 
    equivalent consensual security interest on a dwelling (as defined 
    in section 103(v) of the Truth in Lending Act) or residential real 
    estate upon which is constructed or intended to be constructed a 
    dwelling (as so defined).
        (9) Secretary.--The term ``Secretary'' means the Secretary of 
    Housing and Urban Development.
        (10) State.--The term ``State'' means any State of the United 
    States, the District of Columbia, any territory of the United 
    States, Puerto Rico, Guam, American Samoa, the Trust Territory of 
    the Pacific Islands, the Virgin Islands, and the Northern Mariana 
    Islands.
        (11) State-licensed loan originator.--The term ``State-licensed 
    loan originator'' means any individual who--
            (A) is a loan originator;
            (B) is not an employee of--
                (i) a depository institution;
                (ii) a subsidiary that is--

                    (I) owned and controlled by a depository 
                institution; and
                    (II) regulated by a Federal banking agency; or

                (iii) an institution regulated by the Farm Credit 
            Administration; and
            (C) is licensed by a State or by the Secretary under 
        section 1508 and registered as a loan originator with, and 
        maintains a unique identifier through, the Nationwide Mortgage 
        Licensing System and Registry.
        (12) Unique identifier.--
            (A) In general.--The term ``unique identifier'' means a 
        number or other identifier that--
                (i) permanently identifies a loan originator;
                (ii) is assigned by protocols established by the 
            Nationwide Mortgage Licensing System and Registry and the 
            Federal banking agencies to facilitate electronic tracking 
            of loan originators and uniform identification of, and 
            public access to, the employment history of and the 
            publicly adjudicated disciplinary and enforcement actions 
            against loan originators; and
                (iii) shall not be used for purposes other than those 
            set forth under this title.
            (B) Responsibility of states.--To the greatest extent 
        possible and to accomplish the purpose of this title, States 
        shall use unique identifiers in lieu of social security 
        numbers.

SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

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

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

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

SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

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

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

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

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

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

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

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

SEC. 1510. FEES.

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

SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.

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

SEC. 1512. CONFIDENTIALITY OF INFORMATION.

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

SEC. 1513. LIABILITY PROVISIONS.

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

SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

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

SEC. 1515. STATE EXAMINATION AUTHORITY.

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

SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.

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

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

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

                        TITLE VI--MISCELLANEOUS

SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.

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

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

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

SEC. 1603. CONVERSION OF HUD CONTRACTS.

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

SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.

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

SEC. 1605. SENSE OF THE SENATE.

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

                   DIVISION B--FORECLOSURE PREVENTION

SEC. 2001. SHORT TITLE.

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

SEC. 2002. EMERGENCY DESIGNATION.

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

                 TITLE I--FHA MODERNIZATION ACT OF 2008

SEC. 2101. SHORT TITLE.

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

              Subtitle A--Building American Homeownership

SEC. 2111. SHORT TITLE.

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

SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

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

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

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

SEC. 2114. MORTGAGE INSURANCE PREMIUMS.

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

SEC. 2115. REHABILITATION LOANS.

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

SEC. 2116. DISCRETIONARY ACTION.

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

SEC. 2117. INSURANCE OF CONDOMINIUMS.

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

SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND.

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

SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

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

SEC. 2120. CONFORMING AND TECHNICAL AMENDMENTS.

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

SEC. 2121. INSURANCE OF MORTGAGES.

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

SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.

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

SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.

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

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

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

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

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

SEC. 2125. HOMEOWNERSHIP PRESERVATION.

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

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

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

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

    Section 106(c)(4) of the Housing and Urban Development Act of 1968 
(12 U.S.C. 1701x(c)(4)) is amended:
        (1) in subparagraph (C)--
            (A) in clause (i), by striking ``; or'' and inserting a 
        semicolon;
            (B) in clause (ii), by striking the period at the end and 
        inserting a semicolon; and
            (C) by adding at the end the following:
                ``(iii) a significant reduction in the income of the 
            household due to divorce or death; or
                ``(iv) a significant increase in basic expenses of the 
            homeowner or an immediate family member of the homeowner 
            (including the spouse, child, or parent for whom the 
            homeowner provides substantial care or financial 
            assistance) due to--

                    ``(I) an unexpected or significant increase in 
                medical expenses;
                    ``(II) a divorce;
                    ``(III) unexpected and significant damage to the 
                property, the repair of which will not be covered by 
                private or public insurance; or
                    ``(IV) a large property-tax increase; or'';

        (2) by striking the matter that follows subparagraph (C); and
        (3) by adding at the end the following:
            ``(D) the Secretary of Housing and Urban Development 
        determines that the annual income of the homeowner is no 
        greater than the annual income established by the Secretary as 
        being of low- or moderate-income.''.

SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION.

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

SEC. 2129. FRAUD PREVENTION.

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

SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

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

SEC. 2131. SAVINGS PROVISION.

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

SEC. 2132. IMPLEMENTATION.

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

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

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

          Subtitle B--Manufactured Housing Loan Modernization

SEC. 2141. SHORT TITLE.

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

SEC. 2142. PURPOSES.

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

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

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

SEC. 2144. INSURANCE BENEFITS.

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

SEC. 2145. MAXIMUM LOAN LIMITS.

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

SEC. 2146. INSURANCE PREMIUMS.

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

SEC. 2147. TECHNICAL CORRECTIONS.

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

SEC. 2148. REVISION OF UNDERWRITING CRITERIA.

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

SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

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

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

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

SEC. 2150. LEASEHOLD REQUIREMENTS.

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

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

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

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

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

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

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

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

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

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

    (a) Direct Appropriations.--There are appropriated out of any money 
in the Treasury not otherwise appropriated for the fiscal year 2008, 
$4,000,000,000, to remain available until expended, for assistance to 
States and units of general local government (as such terms are defined 
in section 102 of the Housing and Community Development Act of 1974 (42 
U.S.C. 5302)) for the redevelopment of abandoned and foreclosed upon 
homes and residential properties.
    (b) Allocation of Appropriated Amounts.--
        (1) In general.--The amounts appropriated or otherwise made 
    available to States and units of general local government under 
    this section shall be allocated based on a funding formula 
    established by the Secretary of Housing and Urban Development (in 
    this title referred to as the ``Secretary'').
        (2) Formula to be devised swiftly.--The funding formula 
    required under paragraph (1) shall be established not later than 60 
    days after the date of enactment of this section.
        (3) Criteria.--The funding formula required under paragraph (1) 
    shall ensure that any amounts appropriated or otherwise made 
    available under this section are allocated to States and units of 
    general local government with the greatest need, as such need is 
    determined in the discretion of the Secretary based on--
            (A) the number and percentage of home foreclosures in each 
        State or unit of general local government;
            (B) the number and percentage of homes financed by a 
        subprime mortgage related loan in each State or unit of general 
        local government; and
            (C) the number and percentage of homes in default or 
        delinquency in each State or unit of general local government.
        (4) Distribution.--Amounts appropriated or otherwise made 
    available under this section shall be distributed according to the 
    funding formula established by the Secretary under paragraph (1) 
    not later than 30 days after the establishment of such formula.
    (c) Use of Funds.--
        (1) In general.--Any State or unit of general local government 
    that receives amounts pursuant to this section shall, not later 
    than 18 months after the receipt of such amounts, use such amounts 
    to purchase and redevelop abandoned and foreclosed homes and 
    residential properties.
        (2) Priority.--Any State or unit of general local government 
    that receives amounts pursuant to this section shall in 
    distributing such amounts give priority emphasis and consideration 
    to those metropolitan areas, metropolitan cities, urban areas, 
    rural areas, low- and moderate-income areas, and other areas with 
    the greatest need, including those--
            (A) with the greatest percentage of home foreclosures;
            (B) with the highest percentage of homes financed by a 
        subprime mortgage related loan; and
            (C) identified by the State or unit of general local 
        government as likely to face a significant rise in the rate of 
        home foreclosures.
        (3) Eligible uses.--Amounts made available under this section 
    may be used to--
            (A) establish financing mechanisms for purchase and 
        redevelopment of foreclosed upon homes and residential 
        properties, including such mechanisms as soft-seconds, loan 
        loss reserves, and shared-equity loans for low- and moderate-
        income homebuyers;
            (B) purchase and rehabilitate homes and residential 
        properties that have been abandoned or foreclosed upon, in 
        order to sell, rent, or redevelop such homes and properties;
            (C) establish land banks for homes that have been 
        foreclosed upon;
            (D) demolish blighted structures; and
            (E) redevelop demolished or vacant properties.
    (d) Limitations.--
        (1) On purchases.--Any purchase of a foreclosed upon home or 
    residential property under this section shall be at a discount from 
    the current market appraised value of the home or property, taking 
    into account its current condition, and such discount shall ensure 
    that purchasers are paying below-market value for the home or 
    property.
        (2) Rehabilitation.--Any rehabilitation of a foreclosed-upon 
    home or residential property under this section shall be to the 
    extent necessary to comply with applicable laws, codes, and other 
    requirements relating to housing safety, quality, and habitability, 
    in order to sell, rent, or redevelop such homes and properties. 
    Rehabilitation may include improvements to increase the energy 
    efficiency or conservation of such homes and properties or provide 
    a renewable energy source or sources for such homes and properties.
        (3) Sale of homes.--If an abandoned or foreclosed upon home or 
    residential property is purchased, redeveloped, or otherwise sold 
    to an individual as a primary residence, then such sale shall be in 
    an amount equal to or less than the cost to acquire and redevelop 
    or rehabilitate such home or property up to a decent, safe, and 
    habitable condition.
        (4) Reinvestment of profits.--
            (A) Profits from sales, rentals, and redevelopment.--
                (i) 5-year reinvestment period.--During the 5-year 
            period following the date of enactment of this Act, any 
            revenue generated from the sale, rental, redevelopment, 
            rehabilitation, or any other eligible use that is in excess 
            of the cost to acquire and redevelop (including reasonable 
            development fees) or rehabilitate an abandoned or 
            foreclosed upon home or residential property shall be 
            provided to and used by the State or unit of general local 
            government in accordance with, and in furtherance of, the 
            intent and provisions of this section.
                (ii) Deposits in the treasury.--

                    (I) Profits.--Upon the expiration of the 5-year 
                period set forth under clause (i), any revenue 
                generated from the sale, rental, redevelopment, 
                rehabilitation, or any other eligible use that is in 
                excess of the cost to acquire and redevelop (including 
                reasonable development fees) or rehabilitate an 
                abandoned or foreclosed upon home or residential 
                property shall be deposited in the Treasury of the 
                United States as miscellaneous receipts, unless the 
                Secretary approves a request to use the funds for 
                purposes under this Act.
                    (II) Other amounts.--Upon the expiration of the 5-
                year period set forth under clause (i), any other 
                revenue not described under subclause (I) generated 
                from the sale, rental, redevelopment, rehabilitation, 
                or any other eligible use of an abandoned or foreclosed 
                upon home or residential property shall be deposited in 
                the Treasury of the United States as miscellaneous 
                receipts.

            (B) Other revenues.--Any revenue generated under 
        subparagraphs (A), (C) or (D) of subsection (c)(3) shall be 
        provided to and used by the State or unit of general local 
        government in accordance with, and in furtherance of, the 
        intent and provisions of this section.
    (e) Rules of Construction.--
        (1) In general.--Except as otherwise provided by this section, 
    amounts appropriated, revenues generated, or amounts otherwise made 
    available to States and units of general local government under 
    this section shall be treated as though such funds were community 
    development block grant funds under title I of the Housing and 
    Community Development Act of 1974 (42 U.S.C. 5301 et seq.).
        (2) No match.--No matching funds shall be required in order for 
    a State or unit of general local government to receive any amounts 
    under this section.
    (f) Authority to Specify Alternative Requirements.--
        (1) In general.--In administering any amounts appropriated or 
    otherwise made available under this section, the Secretary may 
    specify alternative requirements to any provision under title I of 
    the Housing and Community Development Act of 1974 (except for those 
    related to fair housing, nondiscrimination, labor standards, and 
    the environment) in accordance with the terms of this section and 
    for the sole purpose of expediting the use of such funds.
        (2) Notice.--The Secretary shall provide written notice of its 
    intent to exercise the authority to specify alternative 
    requirements under paragraph (1) to the Committee on Banking, 
    Housing and Urban Affairs of the Senate and the Committee on 
    Financial Services of the House of Representatives not later than 
    10 business days before such exercise of authority is to occur.
        (3) Low and moderate income requirement.--
            (A) In general.--Notwithstanding the authority of the 
        Secretary under paragraph (1)--
                (i) all of the funds appropriated or otherwise made 
            available under this section shall be used with respect to 
            individuals and families whose income does not exceed 120 
            percent of area median income; and
                (ii) not less than 25 percent of the funds appropriated 
            or otherwise made available under this section shall be 
            used for the purchase and redevelopment of abandoned or 
            foreclosed upon homes or residential properties that will 
            be used to house individuals or families whose incomes do 
            not exceed 50 percent of area median income.
            (B) Recurrent requirement.--The Secretary shall, by rule or 
        order, ensure, to the maximum extent practicable and for the 
        longest feasible term, that the sale, rental, or redevelopment 
        of abandoned and foreclosed upon homes and residential 
        properties under this section remain affordable to individuals 
        or families described in subparagraph (A).
    (g) Periodic Audits.--In consultation with the Secretary of Housing 
and Urban Development, the Comptroller General of the United States 
shall conduct periodic audits to ensure that funds appropriated, made 
available, or otherwise distributed under this section are being used 
in a manner consistent with the criteria provided in this section.

SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

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

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

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

SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

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

SEC. 2305. COUNSELING INTERMEDIARIES.

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

                 TITLE IV--HOUSING COUNSELING RESOURCES

SEC. 2401. HOUSING COUNSELING RESOURCES.

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

SEC. 2402. CREDIT COUNSELING.

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

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

SEC. 2501. SHORT TITLE.

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

SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.

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

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

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

                   TITLE VI--VETERANS HOUSING MATTERS

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

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

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

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

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

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

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

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

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

        (8) Clerical amendments.--The table of sections at the 
    beginning of chapter 21 of title 38, United States Code, is 
    amended--
            (A) by striking the item relating to section 2101 and 
        inserting the following new item:
``2101. Acquisition and adaptation of housing: eligible veterans.'';
            (B) by inserting after the item relating to section 2101, 
        as so amended, the following new item:
``2101A. Eligibility for benefits and assistance: members of the Armed 
          Forces with service-connected disabilities; individuals 
          residing outside the United States.'';
        and
            (C) by striking the item relating to section 2102A and 
        inserting the following new item:
``2102A. Assistance for individuals residing temporarily in housing 
          owned by a family member.''.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

SEC. 2701. SHORT TITLE.

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

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

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

                    ``(I) the information is available as required 
                under clause (i); and
                    ``(II) a public hearing under subparagraph (A) will 
                be conducted.''.

                    TITLE VIII--HOUSING PRESERVATION
        Subtitle A--Preservation Under Federal Housing Programs

SEC. 2801. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.

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

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

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

SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.

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

SEC. 2804. PUBLIC HOUSING DISASTER RELIEF.

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

SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING.

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

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

SEC. 2831. SHORT TITLE.

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

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

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

SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE.

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

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

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

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

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

SEC. 2835. OTHER HUD PROGRAMS.

    (a) Section 8 Assistance.--
        (1) PHA project-based assistance.--Section 8(o)(13) of the 
    United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is 
    amended--
            (A) in subparagraph (D)(i)--
                (i) by striking ``building'' and inserting ``project''; 
            and
                (ii) by adding at the end the following: ``For purposes 
            of this subparagraph, the term''project`` means a single 
            building, multiple contiguous buildings, or multiple 
            buildings on contiguous parcels of land.'';
            (B) in the first sentence of subparagraph (F), by striking 
        ``10 years'' and inserting ``15 years'';
            (C) in subparagraph (G)--
                (i) by inserting after the period at the end of the 
            first sentence the following: ``Such contract may, at the 
            election of the public housing agency and the owner of the 
            structure, specify that such contract shall be extended for 
            renewal terms of up to 15 years each, if the agency makes 
            the determination required by this subparagraph and the 
            owner is in compliance with the terms of the contract.''; 
            and
                (ii) by adding at the end the following: ``A public 
            housing agency may agree to enter into such a contract at 
            the time it enters into the initial agreement for a housing 
            assistance payment contract or at any time thereafter that 
            is before the expiration of the housing assistance payment 
            contract.'';
            (D) in subparagraph (H), by inserting before the period at 
        the end of the first sentence the following: ``, except that in 
        the case of a contract unit that has been allocated low-income 
        housing tax credits and for which the rent limitation pursuant 
        to such section 42 is less than the amount that would otherwise 
        be permitted under this subparagraph, the rent for such unit 
        may, in the sole discretion of a public housing agency, be 
        established at the higher section 8 rent, subject only to 
        paragraph (10)(A)'';
            (E) in subparagraph (I)(i), by inserting before the 
        semicolon the following: ``, except that the contract may 
        provide that the maximum rent permitted for a dwelling unit 
        shall not be less than the initial rent for the dwelling unit 
        under the initial housing assistance payments contract covering 
        the unit''; and
            (F) by adding at the end the following new subparagraphs:
            ``(L) Use in cooperative housing and elevator buildings.--A 
        public housing agency may enter into a housing assistance 
        payments contract under this paragraph with respect to--
                ``(i) dwelling units in cooperative housing; and
                ``(ii) notwithstanding subsection (c), dwelling units 
            in a high-rise elevator project, including such a project 
            that is occupied by families with children, without review 
            and approval of the contract by the Secretary.
            ``(M) Reviews.--
                ``(i) Subsidy layering.--A subsidy layering review in 
            accordance with section 102(d) of the Department of Housing 
            and Urban Development Reform Act of 1989 (42 U.S.C. 
            3545(d)) shall not be required for assistance under this 
            paragraph in the case of a housing assistance payments 
            contract for an existing structure, or if a subsidy 
            layering review has been conducted by the applicable State 
            or local agency.
                ``(ii) Environmental review.--A public housing agency 
            shall not be required to undertake any environmental review 
            before entering into a housing assistance payments contract 
            under this paragraph for an existing structure, except to 
            the extent such a review is otherwise required by law or 
            regulation.''.
        (2) Voucher program rent reasonableness.--Section 8(o)(10) of 
    the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(10)) is 
    amended by adding at the end the following new subparagraph;
            ``(F) Tax credit projects.--In the case of a dwelling unit 
        receiving tax credits pursuant to section 42 of the Internal 
        Revenue Code of 1986 or for which assistance is provided under 
        subtitle A of title II of the Cranston Gonzalez National 
        Affordable Housing Act of 1990, for which a housing assistance 
        contract not subject to paragraph (13) of this subsection is 
        established, rent reasonableness shall be determined as 
        otherwise provided by this paragraph, except that--
                ``(i) comparison with rent for units in the private, 
            unassisted local market shall not be required if the rent 
            is equal to or less than the rent for other comparable 
            units receiving such tax credits or assistance in the 
            project that are not occupied by families assisted with 
            tenant-based assistance under this subsection; and
                ``(ii) the rent shall not be considered reasonable for 
            purposes of this paragraph if it exceeds the greater of--

                    ``(I) the rents charged for other comparable units 
                receiving such tax credits or assistance in the project 
                that are not occupied by families assisted with tenant-
                based assistance under this subsection; and
                    ``(II) the payment standard established by the 
                public housing agency for a unit of the size 
                involved.''.

    (b) Section 202 Housing for Elderly Persons.--Subsection (f) of 
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f)) is 
amended--
        (1) by striking ``Selection Criteria.--'' and inserting 
    ``Initial Selection Criteria and Processing.-- (1) Selection 
    criteria.--'';
        (2) by redesignating paragraphs (1) through (7) as 
    subparagraphs (A) through (G), respectively; and
        (3) by adding at the end the following new paragraph:
        ``(2) Delegated processing.--
            ``(A) In issuing a capital advance under this subsection 
        for any project for which financing for the purposes described 
        in the last two sentences of subsection (b) is provided by a 
        combination of a capital advance under subsection (c)(1) and 
        sources other than this section, within 30 days of award of the 
        capital advance, the Secretary shall delegate review and 
        processing of such projects to a State or local housing agency 
        that--
                ``(i) is in geographic proximity to the property;
                ``(ii) has demonstrated experience in and capacity for 
            underwriting multifamily housing loans that provide housing 
            and supportive services;
                ``(iii) may or may not be providing low-income housing 
            tax credits in combination with the capital advance under 
            this section, and
                ``(iv) agrees to issue a firm commitment within 12 
            months of delegation.
            ``(B) The Secretary shall retain the authority to process 
        capital advances in cases in which no State or local housing 
        agency has applied to provide delegated processing pursuant to 
        this paragraph or no such agency has entered into an agreement 
        with the Secretary to serve as a delegated processing agency.
            ``(C) An agency to which review and processing is delegated 
        pursuant to subparagraph (A) may assess a reasonable fee which 
        shall be included in the capital advance amounts and may 
        recommend project rental assistance amounts in excess of those 
        initially awarded by the Secretary. The Secretary shall develop 
        a schedule for reasonable fees under this subparagraph to be 
        paid to delegated processing agencies, which shall take into 
        consideration any other fees to be paid to the agency for other 
        funding provided to the project by the agency, including bonds, 
        tax credits, and other gap funding.
            ``(D) Under such delegated system, the Secretary shall 
        retain the authority to approve rents and development costs and 
        to execute a capital advance within 60 days of receipt of the 
        commitment from the State or local agency. The Secretary shall 
        provide to such agency and the project sponsor, in writing, the 
        reasons for any reduction in capital advance amounts or project 
        rental assistance and such reductions shall be subject to 
        appeal.''.
    (c) McKinney-Vento Act Homeless Assistance Under Shelter Plus Care 
Program.--
        (1) Term of contracts with owner or lessor.--Part I of subtitle 
    F of the McKinney-Vento Homeless Assistance Act is amended--
            (A) by redesignating sections 462 and 463 (42 U.S.C. 
        11403g, 11403h) as sections 463 and 464, respectively;
            (B) by striking ``section 463'' each place such term 
        appears in sections 471, 476, 481, 486, and 488 (42 U.S.C. 
        11404, 11405, 11406, 11407, and 11407b) and inserting ``section 
        464''; and
            (C) by inserting after section 461 (42 U.S.C. 11403f) the 
        following new section:

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

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

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

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

                        TITLE IX--MISCELLANEOUS

SEC. 2901. HOMELESS ASSISTANCE.

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

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

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

                   DIVISION C--TAX-RELATED PROVISIONS

SEC. 3000. SHORT TITLE; ETC.

    (a) Short Title.--This division may be cited as the ``Housing 
Assistance Tax Act of 2008''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this division an amendment or repeal is expressed 
in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this division is 
as follows:
Sec. 3000. Short title; etc.

                     TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                  Part I--Low-Income Housing Tax Credit

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

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

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

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

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

                    Subtitle B--Single Family Housing

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

                     Subtitle C--General Provisions

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

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

       Subtitle A--Foreign Currency and Other Qualified Activities

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

                  Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

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

                      Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                       Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                      TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

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

                       Subtitle B--Revenue Offsets

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

                    TITLE I--HOUSING TAX INCENTIVES
                    Subtitle A--Multi-Family Housing

                 PART I--LOW-INCOME HOUSING TAX CREDIT

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

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

SEC. 3002. DETERMINATION OF CREDIT RATE.

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

                    (I) by striking ``or loan (when issued or made)'' 
                and inserting ``(when issued)'', and
                    (II) by striking ``the proceeds of such obligation 
                or loan'' and inserting ``the proceeds of such 
                obligation'', and

                (iii) by striking ``, and such loan is repaid,'' in 
            clause (ii).
            (C) Paragraph (2) of section 42(i) is amended by striking 
        subparagraphs (D) and (E).
    (c) Effective Date.--The amendments made by this subsection shall 
apply to buildings placed in service after the date of the enactment of 
this Act.

SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

    (a) Increase in Credit for Certain State Designated Buildings.--
Subparagraph (C) of section 42(d)(5) (relating to increase in credit 
for buildings in high cost areas), before redesignation under 
subsection (g), is amended by adding at the end the following new 
clause:
                ``(v) Buildings designated by state housing credit 
            agency.--Any building which is designated by the State 
            housing credit agency as requiring the increase in credit 
            under this subparagraph in order for such building to be 
            financially feasible as part of a qualified low-income 
            housing project shall be treated for purposes of this 
            subparagraph as located in a difficult development area 
            which is designated for purposes of this subparagraph. The 
            preceding sentence shall not apply to any building if 
            paragraph (1) of subsection (h) does not apply to any 
            portion of the eligible basis of such building by reason of 
            paragraph (4) of such subsection.''.
    (b) Modification to Rehabilitation Requirements.--
        (1) In general.--Clause (ii) of section 42(e)(3)(A) is 
    amended--
            (A) by striking ``10 percent'' in subclause (I) and 
        inserting ``20 percent'', and
            (B) by striking ``$3,000'' in subclause (II) and inserting 
        ``$6,000''.
        (2) Inflation adjustment.--Paragraph (3) of section 42(e) is 
    amended by adding at the end the following new subparagraph:
            ``(D) Inflation adjustment.--In the case of any 
        expenditures which are treated under paragraph (4) as placed in 
        service during any calendar year after 2009, the $6,000 amount 
        in subparagraph (A)(ii)(II) shall be increased by an amount 
        equal to--
                ``(i) such dollar amount, multiplied by
                ``(ii) the cost-of-living adjustment determined under 
            section 1(f)(3) for such calendar year by substituting 
            `calendar year 2008' for `calendar year 1992' in 
            subparagraph (B) thereof.
        Any increase under the preceding sentence which is not a 
        multiple of $100 shall be rounded to the nearest multiple of 
        $100.''.
        (3) Conforming amendment.--Subclause (II) of section 
    42(f)(5)(B)(ii) is amended by striking ``if subsection 
    (e)(3)(A)(ii)(II)'' and all that follows and inserting ``if the 
    dollar amount in effect under subsection (e)(3)(A)(ii)(II) were 
    two-thirds of such amount.''.
    (c) Increase in Allowable Community Service Facility Space for 
Small Projects.--Clause (ii) of section 42(d)(4)(C) (relating to 
limitation) is amended by striking ``10 percent of the eligible basis 
of the qualified low-income housing project of which it is a part. For 
purposes of'' and inserting ``the sum of--

                    ``(I) 25 percent of so much of the eligible basis 
                of the qualified low-income housing project of which it 
                is a part as does not exceed $15,000,000, plus
                    ``(II) 10 percent of so much of the eligible basis 
                of such project as is not taken into account under 
                subclause (I).

            For purposes of''.
    (d) Clarification of Treatment of Federal Grants.--Subparagraph (A) 
of section 42(d)(5) is amended to read as follows:
            ``(A) Federal grants not taken into account in determining 
        eligible basis.--The eligible basis of a building shall not 
        include any costs financed with the proceeds of a federally 
        funded grant.''.
    (e) Simplification of Related Party Rules.--Clause (iii) of section 
42(d)(2)(D), before redesignation under subsection (g)(2), is amended--
        (1) by striking all that precedes subclause (II),
        (2) by redesignating subclause (II) as clause (iii) and moving 
    such clause two ems to the left, and
        (3) by striking the last sentence thereof.
    (f) Exception to 10-Year Nonacquisition Period for Existing 
Buildings Applicable to Federally- or State-Assisted Buildings.--
Paragraph (6) of section 42(d) is amended to read as follows:
        ``(6) Credit allowable for certain buildings acquired during 
    10-year period described in paragraph (2)(B)(ii).--
            ``(A) In general.--Paragraph (2)(B)(ii) shall not apply to 
        any federally- or State-assisted building.
            ``(B) Buildings acquired from insured depository 
        institutions in default.--On application by the taxpayer, the 
        Secretary may waive paragraph (2)(B)(ii) with respect to any 
        building acquired from an insured depository institution in 
        default (as defined in section 3 of the Federal Deposit 
        Insurance Act) or from a receiver or conservator of such an 
        institution.
            ``(C) Federally- or state-assisted building.--For purposes 
        of this paragraph--
                ``(i) Federally-assisted building.--The term 
            `federally-assisted building' means any building which is 
            substantially assisted, financed, or operated under section 
            8 of the United States Housing Act of 1937, section 
            221(d)(3), 221(d)(4), or 236 of the National Housing Act, 
            section 515 of the Housing Act of 1949, or any other 
            housing program administered by the Department of Housing 
            and Urban Development or by the Rural Housing Service of 
            the Department of Agriculture.
                ``(ii) State-assisted building.--The term `State-
            assisted building' means any building which is 
            substantially assisted, financed, or operated under any 
            State law similar in purposes to any of the laws referred 
            to in clause (i).''.
    (g) Repeal of Deadwood.--
        (1) Clause (ii) of section 42(d)(2)(B) is amended by striking 
    ``the later of--'' and all that follows and inserting ``the date 
    the building was last placed in service,''.
        (2) Subparagraph (D) of section 42(d)(2) is amended by striking 
    clause (i) and by redesignating clauses (ii) and (iii) as clauses 
    (i) and (ii), respectively.
        (3) Paragraph (5) of section 42(d) is amended by striking 
    subparagraph (B) and by redesignating subparagraph (C) as 
    subparagraph (B).
    (h) Effective Date.--
        (1) In general.--Except as otherwise provided in paragraph (2), 
    the amendments made by this subsection shall apply to buildings 
    placed in service after the date of the enactment of this Act.
        (2) Rehabilitation requirements.--
            (A) In general.--The amendments made by subsection (b) 
        shall apply to buildings with respect to which housing credit 
        dollar amounts are allocated after the date of the enactment of 
        this Act.
            (B) Buildings not subject to allocation limits.--To the 
        extent paragraph (1) of section 42(h) of the Internal Revenue 
        Code of 1986 does not apply to any building by reason of 
        paragraph (4) thereof, the amendments made by subsection (b) 
        shall apply buildings financed with bonds issued pursuant to 
        allocations made after the date of the enactment of this Act.

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

    (a) Repeal Prohibition on Moderate Rehabilitation Assistance.--
Paragraph (2) of section 42(c) (defining qualified low-income building) 
is amended by striking the flush sentence at the end.
    (b) Modification of Time Limit for Incurring 10 Percent of 
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended by 
striking ``(as of the later of the date which is 6 months after the 
date that the allocation was made or the close of the calendar year in 
which the allocation is made)'' and inserting ``(as of the date which 
is 1 year after the date that the allocation was made)''.
    (c) Repeal of Bonding Requirement on Disposition of Building.--
Paragraph (6) of section 42(j) (relating to no recapture on disposition 
of building (or interest therein) where bond posted) is amended to read 
as follows:
        ``(6) No recapture on disposition of building which continues 
    in qualified use.--
            ``(A) In general.--The increase in tax under this 
        subsection shall not apply solely by reason of the disposition 
        of a building (or an interest therein) if it is reasonably 
        expected that such building will continue to be operated as a 
        qualified low-income building for the remaining compliance 
        period with respect to such building.
            ``(B) Statute of limitations.--If a building (or an 
        interest therein) is disposed of during any taxable year and 
        there is any reduction in the qualified basis of such building 
        which results in an increase in tax under this subsection for 
        such taxable or any subsequent taxable year, then--
                ``(i) the statutory period for the assessment of any 
            deficiency with respect to such increase in tax shall not 
            expire before the expiration of 3 years from the date the 
            Secretary is notified by the taxpayer (in such manner as 
            the Secretary may prescribe) of such reduction in qualified 
            basis, and
                ``(ii) such deficiency may be assessed before the 
            expiration of such 3-year period notwithstanding the 
            provisions of any other law or rule of law which would 
            otherwise prevent such assessment.''.
    (d) Energy Efficiency and Historic Nature Taken Into Account in 
Making Allocations.--Subparagraph (C) of section 42(m)(1) (relating to 
plans for allocation of credit among projects) is amended by striking 
``and'' at the end of clause (vii), by striking the period at the end 
of clause (viii) and inserting a comma, and by adding at the end the 
following new clauses:
                ``(ix) the energy efficiency of the project, and
                ``(x) the historic nature of the project.''.
    (e) Continued Eligibility for Students Who Received Foster Care 
Assistance.--Clause (i) of section 42(i)(3)(D) is amended by striking 
``or'' at the end of subclause (I), by redesignating subclause (II) as 
subclause (III), and by inserting after subclause (I) the following new 
subclause:

                    ``(II) a student who was previously under the care 
                and placement responsibility of the State agency 
                responsible for administering a plan under part B or 
                part E of title IV of the Social Security Act, or''.

    (f) Treatment of Rural Projects.--Section 42(i) (relating to 
definitions and special rules) is amended by adding at the end the 
following new paragraph:
        ``(8) Treatment of rural projects.--For purposes of this 
    section, in the case of any project for residential rental property 
    located in a rural area (as defined in section 520 of the Housing 
    Act of 1949), any income limitation measured by reference to area 
    median gross income shall be measured by reference to the greater 
    of area median gross income or national non-metropolitan median 
    income. The preceding sentence shall not apply with respect to any 
    building if paragraph (1) of section 42(h) does not apply by reason 
    of paragraph (4) thereof to any portion of the credit determined 
    under this section with respect to such building.''.
    (g) Clarification of General Public Use Requirement.--Subsection 
(g) of section 42 is amended by adding at the end the following new 
paragraph:
        ``(9) Clarification of general public use requirement.--A 
    project does not fail to meet the general public use requirement 
    solely because of occupancy restrictions or preferences that favor 
    tenants--
            ``(A) with special needs,
            ``(B) who are members of a specified group under a Federal 
        program or State program or policy that supports housing for 
        such a specified group, or
            ``(C) who are involved in artistic or literary 
        activities.''.
    (h) GAO Study Regarding Modifications to Low-Income Housing Tax 
Credit.--Not later than December 31, 2012, the Comptroller General of 
the United States shall submit to Congress a report which analyzes the 
implementation of the modifications made by this subtitle to the low-
income housing tax credit under section 42 of the Internal Revenue Code 
of 1986. Such report shall include an analysis of the distribution of 
credit allocations before and after the effective date of such 
modifications.
    (i) Effective Date.--
        (1) In general.--Except as otherwise provided in this 
    subsection, the amendments made by this section shall apply to 
    buildings placed in service after the date of the enactment of this 
    Act.
        (2) Repeal of bonding requirement on disposition of building.--
    The amendment made by subsection (c) shall apply to--
            (A) interests in buildings disposed after the date of the 
        enactment of this Act, and
            (B) interests in buildings disposed of on or before such 
        date if--
                (i) it is reasonably expected that such building will 
            continue to be operated as a qualified low-income building 
            (within the meaning of section 42 of the Internal Revenue 
            Code of 1986) for the remaining compliance period (within 
            the meaning of such section) with respect to such building, 
            and
                (ii) the taxpayer elects the application of this 
            subparagraph with respect to such disposition.
        (3) Energy efficiency and historic nature taken into account in 
    making allocations.--The amendments made by subsection (d) shall 
    apply to allocations made after December 31, 2008.
        (4) Continued eligibility for students who received foster care 
    assistance.--The amendments made by subsection (e) shall apply to 
    determinations made after the date of the enactment of this Act.
        (5) Treatment of rural projects.--The amendment made by 
    subsection (f) shall apply to determinations made after the date of 
    the enactment of this Act.
        (6) Clarification of general public use requirement.--The 
    amendment made by subsection (g) shall apply to buildings placed in 
    service before, on, or after the date of the enactment of this Act.

SEC. 3005. TREATMENT OF MILITARY BASIC PAY.

    (a) In General.--Subparagraph (B) of section 142(d)(2) (relating to 
income of individuals; area median gross income) is amended--
        (1) by striking ``The income'' and inserting the following:
                ``(i) In general.--The income'', and
        (2) by adding at the end the following:
                ``(ii) Special rule relating to basic housing 
            allowances.--For purposes of determining income under this 
            subparagraph, payments under section 403 of title 37, 
            United States Code, as a basic pay allowance for housing 
            shall be disregarded with respect to any qualified 
            building.
                ``(iii) Qualified building.--For purposes of clause 
            (ii), the term `qualified building' means any building 
            located--

                    ``(I) in any county in which is located a qualified 
                military installation to which the number of members of 
                the Armed Forces of the United States assigned to units 
                based out of such qualified military installation, as 
                of June 1, 2008, has increased by not less than 20 
                percent, as compared to such number on December 31, 
                2005, or
                    ``(II) in any county adjacent to a county described 
                in subclause (I).

                ``(iv) Qualified military installation.--For purposes 
            of clause (iii), the term `qualified military installation' 
            means any military installation or facility the number of 
            members of the Armed Forces of the United States assigned 
            to which, as of June 1, 2008, is not less than 1,000.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to--
        (1) determinations made after the date of the enactment of this 
    Act and before January 1, 2012, in the case of any qualified 
    building (as defined in section 142(d)(2)(B)(iii) of the Internal 
    Revenue Code of 1986)--
            (A) with respect to which housing credit dollar amounts 
        have been allocated on or before the date of the enactment of 
        this Act, or
            (B) with respect to buildings placed in service before such 
        date of enactment, to the extent paragraph (1) of section 42(h) 
        of such Code does not apply to such building by reason of 
        paragraph (4) thereof, but only with respect to bonds issued 
        before such date of enactment, and
        (2) determinations made after the date of enactment of this 
    Act, in the case of qualified buildings (as so defined)--
            (A) with respect to which housing credit dollar amounts are 
        allocated after the date of the enactment of this Act and 
        before January 1, 2012, or
            (B) with respect to which buildings placed in service after 
        the date of enactment of this Act and before January 1, 2012, 
        to the extent paragraph (1) of section 42(h) of such Code does 
        not apply to such building by reason of paragraph (4) thereof, 
        but only with respect to bonds issued after such date of 
        enactment and before January 1, 2012.

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

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

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

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

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

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

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

    (a) In General.--Paragraph (2) of section 142(d), as amended by 
section 3008, is amended by adding at the end the following new 
subparagraph:
            ``(E) Hold harmless for reductions in area median gross 
        income.--
                ``(i) In general.--Any determination of area median 
            gross income under subparagraph (B) with respect to any 
            project for any calendar year after 2008 shall not be less 
            than the area median gross income determined under such 
            subparagraph with respect to such project for the calendar 
            year preceding the calendar year for which such 
            determination is made.
                ``(ii) Special rule for certain census changes.--In the 
            case of a HUD hold harmless impacted project, the area 
            median gross income with respect to such project for any 
            calendar year after 2008 (hereafter in this clause referred 
            to as the current calendar year) shall be the greater of 
            the amount determined without regard to this clause or the 
            sum of--

                    ``(I) the area median gross income determined under 
                the HUD hold harmless policy with respect to such 
                project for calendar year 2008, plus
                    ``(II) any increase in the area median gross income 
                determined under subparagraph (B) (determined without 
                regard to the HUD hold harmless policy and this 
                subparagraph) with respect to such project for the 
                current calendar year over the area median gross income 
                (as so determined) with respect to such project for 
                calendar year 2008.

                ``(iii) HUD hold harmless policy.--The term `HUD hold 
            harmless policy' means the regulations under which a policy 
            similar to the rules of clause (i) applied to prevent a 
            change in the method of determining area median gross 
            income from resulting in a reduction in the area median 
            gross income determined with respect to certain projects in 
            calendar years 2007 and 2008.
                ``(iv) HUD hold harmless impacted project.--The term 
            `HUD hold harmless impacted project' means any project with 
            respect to which area median gross income was determined 
            under subparagraph (B) for calendar year 2007 or 2008 if 
            such determination would have been less but for the HUD 
            hold harmless policy.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to determinations of area median gross income for calendar years after 
2008.

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

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

                   Subtitle B--Single Family Housing

SEC. 3011. FIRST-TIME HOMEBUYER CREDIT.

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

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

    ``(a) Allowance of Credit.--In the case of an individual who is a 
first-time homebuyer of a principal residence in the United States 
during a taxable year, there shall be allowed as a credit against the 
tax imposed by this subtitle for such taxable year an amount equal to 
10 percent of the purchase price of the residence.
    ``(b) Limitations.--
        ``(1) Dollar limitation.--
            ``(A) In general.--Except as otherwise provided in this 
        paragraph, the credit allowed under subsection (a) shall not 
        exceed $7,500.
            ``(B) Married individuals filing separately.--In the case 
        of a married individual filing a separate return, subparagraph 
        (A) shall be applied by substituting `$3,750' for `$7,500'.
            ``(C) Other individuals.--If two or more individuals who 
        are not married purchase a principal residence, the amount of 
        the credit allowed under subsection (a) shall be allocated 
        among such individuals in such manner as the Secretary may 
        prescribe, except that the total amount of the credits allowed 
        to all such individuals shall not exceed $7,500.
        ``(2) Limitation based on modified adjusted gross income.--
            ``(A) In general.--The amount allowable as a credit under 
        subsection (a) (determined without regard to this paragraph) 
        for the taxable year shall be reduced (but not below zero) by 
        the amount which bears the same ratio to the amount which is so 
        allowable as--
                ``(i) the excess (if any) of--

                    ``(I) the taxpayer's modified adjusted gross income 
                for such taxable year, over
                    ``(II) $75,000 ($150,000 in the case of a joint 
                return), bears to

                ``(ii) $20,000.
            ``(B) Modified adjusted gross income.--For purposes of 
        subparagraph (A), the term `modified adjusted gross income' 
        means the adjusted gross income of the taxpayer for the taxable 
        year increased by any amount excluded from gross income under 
        section 911, 931, or 933.
    ``(c) Definitions.--For purposes of this section--
        ``(1) First-time homebuyer.--The term `first-time homebuyer' 
    means any individual if such individual (and if married, such 
    individual's spouse) had no present ownership interest in a 
    principal residence during the 3-year period ending on the date of 
    the purchase of the principal residence to which this section 
    applies.
        ``(2) Principal residence.--The term `principal residence' has 
    the same meaning as when used in section 121.
        ``(3) Purchase.--
            ``(A) In general.--The term `purchase' means any 
        acquisition, but only if--
                ``(i) the property is not acquired from a person 
            related to the person acquiring such property, and
                ``(ii) the basis of the property in the hands of the 
            person acquiring such property is not determined--

                    ``(I) in whole or in part by reference to the 
                adjusted basis of such property in the hands of the 
                person from whom acquired, or
                    ``(II) under section 1014(a) (relating to property 
                acquired from a decedent).

            ``(B) Construction.--A residence which is constructed by 
        the taxpayer shall be treated as purchased by the taxpayer on 
        the date the taxpayer first occupies such residence.
        ``(4) Purchase price.--The term `purchase price' means the 
    adjusted basis of the principal residence on the date such 
    residence is purchased.
        ``(5) Related persons.--A person shall be treated as related to 
    another person if the relationship between such persons would 
    result in the disallowance of losses under section 267 or 707(b) 
    (but, in applying section 267(b) and (c) for purposes of this 
    section, paragraph (4) of section 267(c) shall be treated as 
    providing that the family of an individual shall include only his 
    spouse, ancestors, and lineal descendants).
    ``(d) Exceptions.--No credit under subsection (a) shall be allowed 
to any taxpayer for any taxable year with respect to the purchase of a 
residence if--
        ``(1) a credit under section 1400C (relating to first-time 
    homebuyer in the District of Columbia) is allowable to the taxpayer 
    (or the taxpayer's spouse) for such taxable year or any prior 
    taxable year,
        ``(2) the residence is financed by the proceeds of a qualified 
    mortgage issue the interest on which is exempt from tax under 
    section 103,
        ``(3) the taxpayer is a nonresident alien, or
        ``(4) the taxpayer disposes of such residence (or such 
    residence ceases to be the principal residence of the taxpayer 
    (and, if married, the taxpayer's spouse)) before the close of such 
    taxable year.
    ``(e) Reporting.--If the Secretary requires information reporting 
under section 6045 by a person described in subsection (e)(2) thereof 
to verify the eligibility of taxpayers for the credit allowable by this 
section, the exception provided by section 6045(e) shall not apply.
    ``(f) Recapture of Credit.--
        ``(1) In general.--Except as otherwise provided in this 
    subsection, if a credit under subsection (a) is allowed to a 
    taxpayer, the tax imposed by this chapter shall be increased by 
    6\2/3\ percent of the amount of such credit for each taxable year 
    in the recapture period.
        ``(2) Acceleration of recapture.--If a taxpayer disposes of the 
    principal residence with respect to which a credit was allowed 
    under subsection (a) (or such residence ceases to be the principal 
    residence of the taxpayer (and, if married, the taxpayer's spouse)) 
    before the end of the recapture period--
            ``(A) the tax imposed by this chapter for the taxable year 
        of such disposition or cessation shall be increased by the 
        excess of the amount of the credit allowed over the amounts of 
        tax imposed by paragraph (1) for preceding taxable years, and
            ``(B) paragraph (1) shall not apply with respect to such 
        credit for such taxable year or any subsequent taxable year.
        ``(3) Limitation based on gain.--In the case of the sale of the 
    principal residence to a person who is not related to the taxpayer, 
    the increase in tax determined under paragraph (2) shall not exceed 
    the amount of gain (if any) on such sale. Solely for purposes of 
    the preceding sentence, the adjusted basis of such residence shall 
    be reduced by the amount of the credit allowed under subsection (a) 
    to the extent not previously recaptured under paragraph (1).
        ``(4) Exceptions.--
            ``(A) Death of taxpayer.--Paragraphs (1) and (2) shall not 
        apply to any taxable year ending after the date of the 
        taxpayer's death.
            ``(B) Involuntary conversion.--Paragraph (2) shall not 
        apply in the case of a residence which is compulsorily or 
        involuntarily converted (within the meaning of section 1033(a)) 
        if the taxpayer acquires a new principal residence during the 
        2-year period beginning on the date of the disposition or 
        cessation referred to in paragraph (2). Paragraph (2) shall 
        apply to such new principal residence during the recapture 
        period in the same manner as if such new principal residence 
        were the converted residence.
            ``(C) Transfers between spouses or incident to divorce.--In 
        the case of a transfer of a residence to which section 1041(a) 
        applies--
                ``(i) paragraph (2) shall not apply to such transfer, 
            and
                ``(ii) in the case of taxable years ending after such 
            transfer, paragraphs (1) and (2) shall apply to the 
            transferee in the same manner as if such transferee were 
            the transferor (and shall not apply to the transferor).
        ``(5) Joint returns.--In the case of a credit allowed under 
    subsection (a) with respect to a joint return, half of such credit 
    shall be treated as having been allowed to each individual filing 
    such return for purposes of this subsection.
        ``(6) Return requirement.--If the tax imposed by this chapter 
    for the taxable year is increased under this subsection, the 
    taxpayer shall, notwithstanding section 6012, be required to file a 
    return with respect to the taxes imposed under this subtitle.
        ``(7) Recapture period.--For purposes of this subsection, the 
    term `recapture period' means the 15 taxable years beginning with 
    the second taxable year following the taxable year in which the 
    purchase of the principal residence for which a credit is allowed 
    under subsection (a) was made.
    ``(g) Election to Treat Purchase in Prior Year.--In the case of a 
purchase of a principal residence after December 31, 2008, and before 
July 1, 2009, a taxpayer may elect to treat such purchase as made on 
December 31, 2008, for purposes of this section (other than subsection 
(c)).
    ``(h) Application of Section.--This section shall only apply to a 
principal residence purchased by the taxpayer on or after April 9, 
2008, and before July 1, 2009.''.
    (b) Conforming Amendments.--
        (1) Section 26(b)(2) is amended by striking ``and'' at the end 
    of subparagraph (U), by striking the period and inserting ``, and'' 
    and the end of subparagraph (V), and by inserting after 
    subparagraph (V) the following new subparagraph:
            ``(W) section 36(f) (relating to recapture of homebuyer 
        credit).''.
        (2) Section 6211(b)(4)(A) is amended by striking ``34,'' and 
    all that follows through ``6428'' and inserting ``34, 35, 36, 
    53(e), and 6428''.
        (3) Section 1324(b)(2) of title 31, United States Code, is 
    amended by inserting ``36,'' after ``35,''.
        (4) The table of sections for subpart C of part IV of 
    subchapter A of chapter 1 is amended by redesignating the item 
    relating to section 36 as an item relating to section 37 and by 
    inserting before such item the following new item:
``Sec. 36. First-time homebuyer credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to residences purchased on or after April 9, 2008, in taxable 
years ending on or after such date.

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

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

                     Subtitle C--General Provisions

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

    (a) Temporary Increase in Volume Cap.--
        (1) In general.--Subsection (d) of section 146 is amended by 
    adding at the end the following new paragraph:
        ``(5) Increase and set aside for housing bonds for 2008.--
            ``(A) Increase for 2008.--In the case of calendar year 
        2008, the State ceiling for each State shall be increased by an 
        amount equal to $11,000,000,000 multiplied by a fraction--
                ``(i) the numerator of which is the State ceiling 
            applicable to the State for calendar year 2008, determined 
            without regard to this paragraph, and
                ``(ii) the denominator of which is the sum of the State 
            ceilings determined under clause (i) for all States.
            ``(B) Set aside.--
                ``(i) In general.--Any amount of the State ceiling for 
            any State which is attributable to an increase under this 
            paragraph shall be allocated solely for one or more 
            qualified housing issues.
                ``(ii) Qualified housing issue.--For purposes of this 
            paragraph, the term `qualified housing issue' means--

                    ``(I) an issue described in section 142(a)(7) 
                (relating to qualified residential rental projects), or
                    ``(II) a qualified mortgage issue (determined by 
                substituting `12-month period' for `42-month period' 
                each place it appears in section 143(a)(2)(D)(i)).''.

        (2) Carryforward of unused limitations.--Subsection (f) of 
    section 146 is amended by adding at the end the following new 
    paragraph:
        ``(6) Special rules for increased volume cap under subsection 
    (d)(5).--No amount which is attributable to the increase under 
    subsection (d)(5) may be used--
            ``(A) for any issue other than a qualified housing issue 
        (as defined in subsection (d)(5)), or
            ``(B) to issue any bond after calendar year 2010.''.
    (b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for 
Subprime Refinancing Loans.--
        (1) In general.--Section 143(k) (relating to other definitions 
    and special rules) is amended by adding at the end the following 
    new paragraph:
        ``(12) Special rules for subprime refinancings.--
            ``(A) In general.--Notwithstanding the requirements of 
        subsection (i)(1), the proceeds of a qualified mortgage issue 
        may be used to refinance a mortgage on a residence which was 
        originally financed by the mortgagor through a qualified 
        subprime loan.
            ``(B) Special rules.--In applying subparagraph (A) to any 
        refinancing--
                ``(i) subsection (a)(2)(D)(i) shall be applied by 
            substituting `12-month period' for `42-month period' each 
            place it appears,
                ``(ii) subsection (d) (relating to 3-year requirement) 
            shall not apply, and
                ``(iii) subsection (e) (relating to purchase price 
            requirement) shall be applied by using the market value of 
            the residence at the time of refinancing in lieu of the 
            acquisition cost.
            ``(C) Qualified subprime loan.--The term `qualified 
        subprime loan' means an adjustable rate single-family 
        residential mortgage loan made after December 31, 2001, and 
        before January 1, 2008, that the bond issuer determines would 
        be reasonably likely to cause financial hardship to the 
        borrower if not refinanced.
            ``(D) Termination.--This paragraph shall not apply to any 
        bonds issued after December 31, 2010.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

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

    (a) Tax-Exempt Interest on Certain Housing Bonds Exempted From 
Alternative Minimum Tax.--
        (1) In general.--Subparagraph (C) of section 57(a)(5) (relating 
    to specified private activity bonds) is amended by redesignating 
    clauses (iii) and (iv) as clauses (iv) and (v), respectively, and 
    by inserting after clause (ii) the following new clause:
                ``(iii) Exception for certain housing bonds.--For 
            purposes of clause (i), the term `private activity bond' 
            shall not include any bond issued after the date of the 
            enactment of this clause if such bond is--

                    ``(I) an exempt facility bond issued as part of an 
                issue 95 percent or more of the net proceeds of which 
                are to be used to provide qualified residential rental 
                projects (as defined in section 142(d)),
                    ``(II) a qualified mortgage bond (as defined in 
                section 143(a)), or
                    ``(III) a qualified veterans' mortgage bond (as 
                defined in section 143(b)).

            The preceding sentence shall not apply to any refunding 
            bond unless such preceding sentence applied to the refunded 
            bond (or in the case of a series of refundings, the 
            original bond).''.
        (2) No adjustment to adjusted current earnings.--Subparagraph 
    (B) of section 56(g)(4) is amended by adding at the end the 
    following new clause:
                ``(iii) Tax exempt interest on certain housing bonds.--
            Clause (i) shall not apply in the case of any interest on a 
            bond to which section 57(a)(5)(C)(iii) applies.''.
    (b) Allowance of Low-Income Housing Credit Against Alternative 
Minimum Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
specified credits) is amended by redesignating clauses (ii) through 
(iv) as clauses (iii) through (v) and inserting after clause (i) the 
following new clause:
                ``(ii) the credit determined under section 42 to the 
            extent attributable to buildings placed in service after 
            December 31, 2007,''.
    (c) Allowance of Rehabilitation Credit Against Alternative Minimum 
Tax.--Subparagraph (B) of section 38(c)(4), as amended by subsection 
(b), is amended by striking ``and'' at the end of clause (iv), by 
redesignating clause (v) as clause (vi), and by inserting after clause 
(iv) the following new clause:
                ``(v) the credit determined under section 47 to the 
            extent attributable to qualified rehabilitation 
            expenditures properly taken into account for periods after 
            December 31, 2007, and''.
    (d) Effective Date.--
        (1) Housing bonds.--The amendments made by subsection (a) shall 
    apply to bonds issued after the date of the enactment of this Act.
        (2) Low income housing credit.--The amendments made by 
    subsection (b) shall apply to credits determined under section 42 
    of the Internal Revenue Code of 1986 to the extent attributable to 
    buildings placed in service after December 31, 2007.
        (3) Rehabilitation credit.--The amendments made by subsection 
    (c) shall apply to credits determined under section 47 of the 
    Internal Revenue Code of 1986 to the extent attributable to 
    qualified rehabilitation expenditures properly taken into account 
    for periods after December 31, 2007.

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

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

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

    (a) In General.--Subsection (b) of section 1445 (relating to 
exemptions) is amended by adding at the end the following:
        ``(9) Alternative procedure for furnishing nonforeign 
    affidavit.--For purposes of paragraphs (2) and (7)--
            ``(A) In general.--Paragraph (2) shall be treated as 
        applying to a transaction if, in connection with a disposition 
        of a United States real property interest--
                ``(i) the affidavit specified in paragraph (2) is 
            furnished to a qualified substitute, and
                ``(ii) the qualified substitute furnishes a statement 
            to the transferee stating, under penalty of perjury, that 
            the qualified substitute has such affidavit in his 
            possession.
            ``(B) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out 
        this paragraph.''.
    (b) Qualified Substitute.--Subsection (f) of section 1445 (relating 
to definitions) is amended by adding at the end the following new 
paragraph:
        ``(6) Qualified substitute.--The term `qualified substitute' 
    means, with respect to a disposition of a United States real 
    property interest--
            ``(A) the person (including any attorney or title company) 
        responsible for closing the transaction, other than the 
        transferor's agent, and
            ``(B) the transferee's agent.''.
    (c) Exemption Not To Apply if Knowledge or Notice That Affidavit or 
Statement Is False.--
        (1) In general.--Paragraph (7) of section 1445(b) (relating to 
    special rules for paragraphs (2) and (3)) is amended to read as 
    follows:
        ``(7) Special rules for paragraphs (2), (3), and (9).--
    Paragraph (2), (3), or (9) (as the case may be) shall not apply to 
    any disposition--
            ``(A) if--
                ``(i) the transferee or qualified substitute has actual 
            knowledge that the affidavit referred to in such paragraph, 
            or the statement referred to in paragraph (9)(A)(ii), is 
            false, or
                ``(ii) the transferee or qualified substitute receives 
            a notice (as described in subsection (d)) from a 
            transferor's agent, transferee's agent, or qualified 
            substitute that such affidavit or statement is false, or
            ``(B) if the Secretary by regulations requires the 
        transferee or qualified substitute to furnish a copy of such 
        affidavit or statement to the Secretary and the transferee or 
        qualified substitute fails to furnish a copy of such affidavit 
        or statement to the Secretary at such time and in such manner 
        as required by such regulations.''.
        (2) Liability.--
            (A) Notice.--Paragraph (1) of section 1445(d) (relating to 
        notice of false affidavit; foreign corporations) is amended to 
        read as follows:
        ``(1) Notice of false affidavit; foreign corporations.--If--
            ``(A) the transferor furnishes the transferee or qualified 
        substitute an affidavit described in paragraph (2) of 
        subsection (b) or a domestic corporation furnishes the 
        transferee an affidavit described in paragraph (3) of 
        subsection (b), and
            ``(B) in the case of--
                ``(i) any transferor's agent--

                    ``(I) such agent has actual knowledge that such 
                affidavit is false, or
                    ``(II) in the case of an affidavit described in 
                subsection (b)(2) furnished by a corporation, such 
                corporation is a foreign corporation, or

                ``(ii) any transferee's agent or qualified substitute, 
            such agent or substitute has actual knowledge that such 
            affidavit is false,
        such agent or qualified substitute shall so notify the 
        transferee at such time and in such manner as the Secretary 
        shall require by regulations.''.
            (B) Failure to furnish notice.--Paragraph (2) of section 
        1445(d) (relating to failure to furnish notice) is amended to 
        read as follows:
        ``(2) Failure to furnish notice.--
            ``(A) In general.--If any transferor's agent, transferee's 
        agent, or qualified substitute is required by paragraph (1) to 
        furnish notice, but fails to furnish such notice at such time 
        or times and in such manner as may be required by regulations, 
        such agent or substitute shall have the same duty to deduct and 
        withhold that the transferee would have had if such agent or 
        substitute had complied with paragraph (1).
            ``(B) Liability limited to amount of compensation.--An 
        agent's or substitute's liability under subparagraph (A) shall 
        be limited to the amount of compensation the agent or 
        substitute derives from the transaction.''.
            (C) Conforming amendment.--The heading for section 1445(d) 
        is amended by striking ``or Transferee's Agents'' and inserting 
        ``, Transferee's Agents, or Qualified Substitutes''.
    (d) Effective Date.--The amendments made by this section shall 
apply to dispositions of United States real property interests after 
the date of the enactment of this Act.

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

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

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

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

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

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

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS
      Subtitle A--Foreign Currency and Other Qualified Activities

SEC. 3031. REVISIONS TO REIT INCOME TESTS.

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

SEC. 3032. REVISIONS TO REIT ASSET TESTS.

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

SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS.

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

                 Subtitle B--Taxable REIT Subsidiaries

SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

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

                        Subtitle C--Dealer Sales

SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR.

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

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

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

                     Subtitle D--Health Care REITs

SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES.

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

                    ``(I) January 1, 1999, or
                    ``(II) the earliest date that any taxable REIT 
                subsidiary of such trust entered into a management 
                agreement or other similar service contract with such 
                person with respect to such qualified lodging facility 
                or qualified health care property.''.

    (c) Taxable Reit Subsidiaries.--The last sentence of section 
856(l)(3) is amended--
        (1) by inserting ``or a health care facility'' after ``a 
    lodging facility'', and
        (2) by inserting ``or health care facility'' after ``such 
    lodging facility''.

                      Subtitle E--Effective Dates

SEC. 3071. EFFECTIVE DATES.

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

                     TITLE III--REVENUE PROVISIONS
                     Subtitle A--General Provisions

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

    (a) In General.--Section 168(k) is amended by adding at the end the 
following new paragraph:
        ``(4) Election to accelerate the amt and research credits in 
    lieu of bonus depreciation.--
            ``(A) In general.--If a corporation elects to have this 
        paragraph apply for the first taxable year of the taxpayer 
        ending after March 31, 2008, in the case of such taxable year 
        and each subsequent taxable year--
                ``(i) paragraph (1) shall not apply to any eligible 
            qualified property placed in service by the taxpayer,
                ``(ii) the applicable depreciation method used under 
            this section with respect to such property shall be the 
            straight line method, and
                ``(iii) each of the limitations described in 
            subparagraph (B) for any such taxable year shall be 
            increased by the bonus depreciation amount which is--

                    ``(I) determined for such taxable year under 
                subparagraph (C), and
                    ``(II) allocated to such limitation under 
                subparagraph (E).

            ``(B) Limitations to be increased.--The limitations 
        described in this subparagraph are--
                ``(i) the limitation imposed by section 38(c), and
                ``(ii) the limitation imposed by section 53(c).
            ``(C) Bonus depreciation amount.--For purposes of this 
        paragraph--
                ``(i) In general.--The bonus depreciation amount for 
            any taxable year is an amount equal to 20 percent of the 
            excess (if any) of--

                    ``(I) the aggregate amount of depreciation which 
                would be allowed under this section for eligible 
                qualified property placed in service by the taxpayer 
                during such taxable year if paragraph (1) applied to 
                all such property, over
                    ``(II) the aggregate amount of depreciation which 
                would be allowed under this section for eligible 
                qualified property placed in service by the taxpayer 
                during such taxable year if paragraph (1) did not apply 
                to any such property.

            The aggregate amounts determined under subclauses (I) and 
            (II) shall be determined without regard to any election 
            made under subsection (b)(2)(C), (b)(3)(D), or (g)(7) and 
            without regard to subparagraph (A)(ii).
                ``(ii) Maximum amount.--The bonus depreciation amount 
            for any taxable year shall not exceed the maximum increase 
            amount under clause (iii), reduced (but not below zero) by 
            the sum of the bonus depreciation amounts for all preceding 
            taxable years.
                ``(iii) Maximum increase amount.--For purposes of 
            clause (ii), the term `maximum increase amount' means, with 
            respect to any corporation, the lesser of--

                    ``(I) $30,000,000, or
                    ``(II) 6 percent of the sum of the business credit 
                increase amount, and the AMT credit increase amount, 
                determined with respect to such corporation under 
                subparagraph (E).

                ``(iv) Aggregation rule.--All corporations which are 
            treated as a single employer under section 52(a) shall be 
            treated--

                    ``(I) as 1 taxpayer for purposes of this paragraph, 
                and
                    ``(II) as having elected the application of this 
                paragraph if any such corporation so elects.

            ``(D) Eligible qualified property.--For purposes of this 
        paragraph, the term `eligible qualified property' means 
        qualified property under paragraph (2), except that in applying 
        paragraph (2) for purposes of this paragraph--
                ``(i) `March 31, 2008' shall be substituted for 
            `December 31, 2007' each place it appears in subparagraph 
            (A) and clauses (i) and (ii) of subparagraph (E) thereof, 
            and
                ``(ii) only adjusted basis attributable to manufacture, 
            construction, or production after March 31, 2008, and 
            before January 1, 2009, shall be taken into account under 
            subparagraph (B)(ii) thereof.
            ``(E) Allocation of bonus depreciation amounts.--
                ``(i) In general.--Subject to clauses (ii) and (iii), 
            the taxpayer shall, at such time and in such manner as the 
            Secretary may prescribe, specify the portion (if any) of 
            the bonus depreciation amount for the taxable year which is 
            to be allocated to each of the limitations described in 
            subparagraph (B) for such taxable year.
                ``(ii) Limitation on allocations.--The portion of the 
            bonus depreciation amount which may be allocated under 
            clause (i) to the limitations described in subparagraph (B) 
            for any taxable year shall not exceed--

                    ``(I) in the case of the limitation described in 
                subparagraph (B)(i), the excess of the business credit 
                increase amount over the bonus depreciation amount 
                allocated to such limitation for all preceding taxable 
                years, and
                    ``(II) in the case of the limitation described in 
                subparagraph (B)(ii), the excess of the AMT credit 
                increase amount over the bonus depreciation amount 
                allocated to such limitation for all preceding taxable 
                years.

                ``(iii) Business credit increase amount.--For purposes 
            of this paragraph, the term `business credit increase 
            amount' means the amount equal to the portion of the credit 
            allowable under section 38 (determined without regard to 
            subsection (c) thereof) for the first taxable year ending 
            after March 31, 2008, which is allocable to business credit 
            carryforwards to such taxable year which are--

                    ``(I) from taxable years beginning before January 
                1, 2006, and
                    ``(II) properly allocable (determined under the 
                rules of section 38(d)) to the research credit 
                determined under section 41(a).

                ``(iv) AMT credit increase amount.--For purposes of 
            this paragraph, the term `AMT credit increase amount' means 
            the amount equal to the portion of the minimum tax credit 
            under section 53(b) for the first taxable year ending after 
            March 31, 2008, determined by taking into account only the 
            adjusted minimum tax for taxable years beginning before 
            January 1, 2006. For purposes of the preceding sentence, 
            credits shall be treated as allowed on a first-in, first-
            out basis.
            ``(F) Credit refundable.--For purposes of section 6401(b), 
        the aggregate increase in the credits allowable under part IV 
        of subchapter A for any taxable year resulting from the 
        application of this paragraph shall be treated as allowed under 
        subpart C of such part (and not any other subpart).
            ``(G) Other rules.--
                ``(i) Election.--Any election under this paragraph 
            (including any allocation under subparagraph (E)) may be 
            revoked only with the consent of the Secretary.
                ``(ii) Partnerships with electing partners.--In the 
            case of a corporation making an election under subparagraph 
            (A) and which is a partner in a partnership, for purposes 
            of determining such corporation's distributive share of 
            partnership items under section 702--

                    ``(I) paragraph (1) shall not apply to any eligible 
                qualified property, and
                    ``(II) the applicable depreciation method used 
                under this section with respect to such property shall 
                be the straight line method.

                ``(iii) Special rule for passenger aircraft.--In the 
            case of any passenger aircraft, the written binding 
            contract limitation under paragraph (2)(A)(iii)(I) shall 
            not apply for purposes of subparagraphs (C)(i)(I) and 
            (D).''.
    (b) Application to Certain Automotive Partnerships.--
        (1) In general.--If an applicable partnership elects the 
    application of this subsection--
            (A) the partnership shall be treated as having made a 
        payment against the tax imposed by chapter 1 of the Internal 
        Revenue Code of 1986 for any applicable taxable year of the 
        partnership in the amount determined under paragraph (3),
            (B) in the case of any eligible qualified property placed 
        in service by the partnership during any applicable taxable 
        year--
                (i) section 168(k) of such Code shall not apply in 
            determining the amount of the deduction allowable with 
            respect to such property under section 168 of such Code,
                (ii) the applicable depreciation method used with 
            respect to such property shall be the straight line method, 
            and
            (C) the amount of the credit determined under section 41 of 
        such Code for any applicable taxable year with respect to the 
        partnership shall be reduced by the amount of the deemed 
        payment under subparagraph (A) for the taxable year.
        (2) Treatment of deemed payment.--
            (A) In general.--Notwithstanding any other provision of the 
        Internal Revenue Code of 1986, the Secretary of the Treasury or 
        his delegate shall not use the payment of tax described in 
        paragraph (1) as an offset or credit against any tax liability 
        of the applicable partnership or any partner but shall refund 
        such payment to the applicable partnership.
            (B) No interest.--The payment described in paragraph (1) 
        shall not be taken into account in determining any amount of 
        interest under such Code.
        (3) Amount of deemed payment.--The amount determined under this 
    paragraph for any applicable taxable year shall be the least of the 
    following:
            (A) The amount which would be determined for the taxable 
        year under section 168(k)(4)(C)(i) of the Internal Revenue Code 
        of 1986 (as added by the amendments made by this section) if an 
        election under section 168(k)(4) of such Code were in effect 
        with respect to the partnership.
            (B) The amount of the credit determined under section 41 of 
        such Code for the taxable year with respect to the partnership.
            (C) $30,000,000, reduced by the amount of any payment under 
        this subsection for any preceding taxable year.
        (4) Definitions.--For purposes of this subsection--
            (A) Applicable partnership.--The term ``applicable 
        partnership'' means a domestic partnership that--
                (i) was formed effective on August 3, 2007, and
                (ii) will produce in excess of 675,000 automobiles 
            during the period beginning on January 1, 2008, and ending 
            on June 30, 2008.
            (B) Applicable taxable year.--The term ``applicable taxable 
        year'' means any taxable year during which eligible qualified 
        property is placed in service.
            (C) Eligible qualified property.--The term ``eligible 
        qualified property'' has the meaning given such term by section 
        168(k)(4)(D) of the Internal Revenue Code of 1986 (as added by 
        the amendments made by this section).
    (c) Conforming Amendment.--Section 1324(b)(2) of title 31, United 
States Code, as amended by this Act, is amended--
        (1) by inserting ``168(k)(4)(F),'' after ``36,'', and
        (2) by inserting ``, or due under section 3081(b)(2) of the 
    Housing Assistance Tax Act of 2008'' before the period at the end.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after March 31, 2008.

SEC. 3082. CERTAIN GO ZONE INCENTIVES.

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

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

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

                      Subtitle B--Revenue Offsets

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

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

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

    ``(a) In General.--Each payment settlement entity shall make a 
return for each calendar year setting forth--
        ``(1) the name, address, and TIN of each participating payee to 
    whom one or more payments in settlement of reportable payment 
    transactions are made, and
        ``(2) the gross amount of the reportable payment transactions 
    with respect to each such participating payee.
Such return shall be made at such time and in such form and manner as 
the Secretary may require by regulations.
    ``(b) Payment Settlement Entity.--For purposes of this section--
        ``(1) In general.--The term `payment settlement entity' means--
            ``(A) in the case of a payment card transaction, the 
        merchant acquiring entity, and
            ``(B) in the case of a third party network transaction, the 
        third party settlement organization.
        ``(2) Merchant acquiring entity.--The term `merchant acquiring 
    entity' means the bank or other organization which has the 
    contractual obligation to make payment to participating payees in 
    settlement of payment card transactions.
        ``(3) Third party settlement organization.--The term `third 
    party settlement organization' means the central organization which 
    has the contractual obligation to make payment to participating 
    payees of third party network transactions.
        ``(4) Special rules related to intermediaries.--For purposes of 
    this section--
            ``(A) Aggregated payees.--In any case where reportable 
        payment transactions of more than one participating payee are 
        settled through an intermediary--
                ``(i) such intermediary shall be treated as the 
            participating payee for purposes of determining the 
            reporting obligations of the payment settlement entity with 
            respect to such transactions, and
                ``(ii) such intermediary shall be treated as the 
            payment settlement entity with respect to the settlement of 
            such transactions with the participating payees.
            ``(B) Electronic payment facilitators.--In any case where 
        an electronic payment facilitator or other third party makes 
        payments in settlement of reportable payment transactions on 
        behalf of the payment settlement entity, the return under 
        subsection (a) shall be made by such electronic payment 
        facilitator or other third party in lieu of the payment 
        settlement entity.
    ``(c) Reportable Payment Transaction.--For purposes of this 
section--
        ``(1) In general.--The term `reportable payment transaction' 
    means any payment card transaction and any third party network 
    transaction.
        ``(2) Payment card transaction.--The term `payment card 
    transaction' means any transaction in which a payment card is 
    accepted as payment.
        ``(3) Third party network transaction.--The term `third party 
    network transaction' means any transaction which is settled through 
    a third party payment network.
    ``(d) Other Definitions.--For purposes of this section--
        ``(1) Participating payee.--
            ``(A) In general.--The term `participating payee' means--
                ``(i) in the case of a payment card transaction, any 
            person who accepts a payment card as payment, and
                ``(ii) in the case of a third party network 
            transaction, any person who accepts payment from a third 
            party settlement organization in settlement of such 
            transaction.
            ``(B) Exclusion of foreign persons.--Except as provided by 
        the Secretary in regulations or other guidance, such term shall 
        not include any person with a foreign address.
            ``(C) Inclusion of governmental units.--The term `person' 
        includes any governmental unit (and any agency or 
        instrumentality thereof).
        ``(2) Payment card.--The term `payment card' means any card 
    which is issued pursuant to an agreement or arrangement which 
    provides for--
            ``(A) one or more issuers of such cards,
            ``(B) a network of persons unrelated to each other, and to 
        the issuer, who agree to accept such cards as payment, and
            ``(C) standards and mechanisms for settling the 
        transactions between the merchant acquiring entities and the 
        persons who agree to accept such cards as payment.
    The acceptance as payment of any account number or other indicia 
    associated with a payment card shall be treated for purposes of 
    this section in the same manner as accepting such payment card as 
    payment.
        ``(3) Third party payment network.--The term `third party 
    payment network' means any agreement or arrangement--
            ``(A) which involves the establishment of accounts with a 
        central organization by a substantial number of persons who--
                ``(i) are unrelated to such organization,
                ``(ii) provide goods or services, and
                ``(iii) have agreed to settle transactions for the 
            provision of such goods or services pursuant to such 
            agreement or arrangement,
            ``(B) which provides for standards and mechanisms for 
        settling such transactions, and
            ``(C) which guarantees persons providing goods or services 
        pursuant to such agreement or arrangement that such persons 
        will be paid for providing such goods or services.
    Such term shall not include any agreement or arrangement which 
    provides for the issuance of payment cards.
    ``(e) Exception for De Minimis Payments by Third Party Settlement 
Organizations.--A third party settlement organization shall be required 
to report any information under subsection (a) with respect to third 
party network transactions of any participating payee only if--
        ``(1) the amount which would otherwise be reported under 
    subsection (a)(2) with respect to such transactions exceeds 
    $20,000, and
        ``(2) the aggregate number of such transactions exceeds 200.
    ``(f) Statements to Be Furnished to Persons With Respect to Whom 
Information Is Required.--Every person required to make a return under 
subsection (a) shall furnish to each person with respect to whom such a 
return is required a written statement showing--
        ``(1) the name, address, and phone number of the information 
    contact of the person required to make such return, and
        ``(2) the gross amount of the reportable payment transactions 
    with respect to the person required to be shown on the return.
The written statement required under the preceding sentence shall be 
furnished to the person on or before January 31 of the year following 
the calendar year for which the return under subsection (a) was 
required to be made. Such statement may be furnished electronically, 
and if so, the email address of the person required to make such return 
may be shown in lieu of the phone number.
    ``(g) Regulations.--The Secretary may prescribe such regulations or 
other guidance as may be necessary or appropriate to carry out this 
section, including rules to prevent the reporting of the same 
transaction more than once.''.
    (b) Penalty for Failure to File.--
        (1) Return.--Subparagraph (B) of section 6724(d)(1) is 
    amended--
            (A) by striking ``or'' at the end of clause (xx),
            (B) by redesignating the clause (xix) that follows clause 
        (xx) as clause (xxi),
            (C) by striking ``and'' at the end of clause (xxi), as 
        redesignated by subparagraph (B) and inserting ``or'', and
            (D) by adding at the end the following:
                ``(xxii) section 6050W (relating to returns to payments 
            made in settlement of payment card transactions), and''.
        (2) Statement.--Paragraph (2) of section 6724(d) is amended by 
    striking ``or'' at the end of subparagraph (BB), by striking the 
    period at the end of the subparagraph (CC) and inserting ``, or'', 
    and by inserting after subparagraph (CC) the following:
            ``(DD) section 6050W(c) (relating to returns relating to 
        payments made in settlement of payment card transactions).''.
    (c) Application of Backup Withholding.--Paragraph (3) of section 
3406(b) is amended by striking ``or'' at the end of subparagraph (D), 
by striking the period at the end of subparagraph (E) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
            ``(F) section 6050W (relating to returns relating to 
        payments made in settlement of payment card transactions).''.
    (d) Clerical Amendment.--The table of sections for subpart B of 
part III of subchapter A of chapter 61 is amended by inserting after 
the item relating to section 6050V the following:
``Sec. 6050W. Returns relating to payments made in settlement of payment 
          card transactions.''.
    (e) Effective Date.--
        (1) In general.--Except as otherwise provided in this 
    subsection, the amendments made by this section shall apply to 
    returns for calendar years beginning after December 31, 2010.
        (2) Application of backup withholding.--
            (A) In general.--The amendment made by subsection (c) shall 
        apply to amounts paid after December 31, 2011.
            (B) Eligibility for tin matching program.--Solely for 
        purposes of carrying out any TIN matching program established 
        by the Secretary under section 3406(i) of the Internal Revenue 
        Code of 1986--
                (i) the amendments made this section shall be treated 
            as taking effect on the date of the enactment of this Act, 
            and
                (ii) each person responsible for setting the standards 
            and mechanisms referred to in section 6050W(d)(2)(C) of 
            such Code, as added by this section, for settling 
            transactions involving payment cards shall be treated in 
            the same manner as a payment settlement entity.

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

    (a) In General.--Subsection (b) of section 121 of the Internal 
Revenue Code of 1986 (relating to limitations) is amended by adding at 
the end the following new paragraph:
        ``(4) Exclusion of gain allocated to nonqualified use.--
            ``(A) In general.--Subsection (a) shall not apply to so 
        much of the gain from the sale or exchange of property as is 
        allocated to periods of nonqualified use.
            ``(B) Gain allocated to periods of nonqualified use.--For 
        purposes of subparagraph (A), gain shall be allocated to 
        periods of nonqualified use based on the ratio which--
                ``(i) the aggregate periods of nonqualified use during 
            the period such property was owned by the taxpayer, bears 
            to
                ``(ii) the period such property was owned by the 
            taxpayer.
            ``(C) Period of nonqualified use.--For purposes of this 
        paragraph--
                ``(i) In general.--The term `period of nonqualified 
            use' means any period (other than the portion of any period 
            preceding January 1, 2009) during which the property is not 
            used as the principal residence of the taxpayer or the 
            taxpayer's spouse or former spouse.
                ``(ii) Exceptions.--The term `period of nonqualified 
            use' does not include--

                    ``(I) any portion of the 5-year period described in 
                subsection (a) which is after the last date that such 
                property is used as the principal residence of the 
                taxpayer or the taxpayer's spouse,
                    ``(II) any period (not to exceed an aggregate 
                period of 10 years) during which the taxpayer or the 
                taxpayer's spouse is serving on qualified official 
                extended duty (as defined in subsection (d)(9)(C)) 
                described in clause (i), (ii), or (iii) of subsection 
                (d)(9)(A), and
                    ``(III) any other period of temporary absence (not 
                to exceed an aggregate period of 2 years) due to change 
                of employment, health conditions, or such other 
                unforeseen circumstances as may be specified by the 
                Secretary.

            ``(D) Coordination with recognition of gain attributable to 
        depreciation.--For purposes of this paragraph--
                ``(i) subparagraph (A) shall be applied after the 
            application of subsection (d)(6), and
                ``(ii) subparagraph (B) shall be applied without regard 
            to any gain to which subsection (d)(6) applies.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to sales and exchanges after December 31, 2008.

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

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

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

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

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.