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116th Congress     }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                     {     116-197

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



 
                     HOMEOWNERSHIP FOR DREAMERS ACT

                                _______
                                

 September 6, 2019.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3154]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3154) to clarify that eligibility of certain 
mortgages with Federal credit enhancement may not be 
conditioned on the status of a mortgagor as a DACA recipient if 
all other eligibility criteria are satisfied, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Page Purpose and Summary.........................................     2
Background and Need for Legislation..............................     3
Section-by-Section Analysis......................................     3
Hearings.........................................................     3
Committe Consideration...........................................     4
Committee Votes and Roll Call Votes..............................     4
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     6
Statement of Performance Goals and Objectives....................     6
New Budget Authority and CBO Cost Estimate.......................     6
Committee Cost Estimate..........................................     8
Unfunded Mandate Statement.......................................     8
Advisory Committee...............................................     8
Application of Law to the Legislative Branch.....................     8
Earmark Statement................................................     8
Duplication of Federal Programs..................................     8
Changes to Existing Law..........................................     9

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Homeownership for DREAMers Act''.

SEC. 2. DACA RECIPIENT ELIGIBILITY.

  (a) FHA.--Section 203 of the National Housing Act (12 U.S.C. 1709) is 
amended by inserting after subsection (h) the following:
  ``(i) DACA Recipient Eligibility.--
          ``(1) In general.--The Secretary may not--
                  ``(A) prescribe terms that limit the eligibility of a 
                single family mortgage for insurance under this title 
                because of the status of the mortgagor as a DACA 
                recipient; or
                  ``(B) issue any limited denial of participation in 
                the program for such insurance because of the status of 
                the mortgagor as a DACA recipient.
          ``(2) DACA recipient defined.--For the purposes of this 
        subsection, the term `DACA recipient' means an alien who, at 
        any time before, on, or after the date of the enactment of this 
        subsection, is or was in deferred action status pursuant to the 
        Deferred Action for Childhood Arrivals (`DACA') Program 
        announced by the Secretary of Homeland Security on June 15, 
        2012.
          ``(3) Exemption.--
                  ``(A) Denial for failure to satisfy valid eligibility 
                requirements.--Nothing in this title prohibits the 
                denial of insurance based on failure to satisfy valid 
                eligibility requirements.
                  ``(B) Invalid eligibility requirements.--Valid 
                eligibility requirements do not include criteria that 
                were adopted with the purpose of denying eligibility 
                for insurance because of race, color, religion, sex, 
                familial status, national origin, disability, or the 
                status of a mortgagor as a DACA recipient.''.
  (b) Rural Housing Service.--Section 501 of the Housing Act of 1949 
(42 U.S.C. 1472) is amended by adding at the end the following:
  ``(k) DACA Recipient Eligibility.--
          ``(1) In general.--The Secretary may not prescribe terms that 
        limit eligibility for a single family mortgage made, insured, 
        or guaranteed under this title because of the status of the 
        mortgagor as a DACA recipient.
          ``(2) DACA recipient defined.--For the purposes of this 
        paragraph, the term `DACA recipient' means an alien who, at any 
        time before, on, or after the date of the enactment of this 
        paragraph, is or was in deferred action status pursuant to the 
        Deferred Action for Childhood Arrivals (`DACA') Program 
        announced by the Secretary of Homeland Security on June 15, 
        2012.''.
  (c) Fannie Mae.--Section 302(b) of the National Housing Act (12 
U.S.C. 1717(b)) is amended by adding at the end the following:
          ``(8) DACA recipient eligibility.--
                  ``(A) In general.--The corporation may not condition 
                purchase of a single-family residence mortgage by the 
                corporation under this subsection on the status of the 
                borrower as a DACA recipient.
                  ``(B) DACA recipient defined.--For the purposes of 
                this paragraph, the term `DACA recipient' means an 
                alien who, at any time before, on, or after the date of 
                the enactment of this paragraph, is or was in deferred 
                action status pursuant to the Deferred Action for 
                Childhood Arrivals (`DACA') Program announced by the 
                Secretary of Homeland Security on June 15, 2012.''.
  (d) Freddie Mac.--Section 305(a) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1454) is amended by adding at the end the 
following:
          ``(6) DACA recipient eligibility.--
                  ``(A) In general.--The Corporation may not condition 
                purchase of a single-family residence mortgage by the 
                corporation under this subsection on the status of the 
                borrower as a DACA recipient.
                  ``(B) DACA recipient defined.--For the purposes of 
                this subsection, the term `DACA recipient' means an 
                alien who, at any time before, on, or after the date of 
                the enactment of this subsection, is or was in deferred 
                action status pursuant to the Deferred Action for 
                Childhood Arrivals (`DACA') Program announced by the 
                Secretary of Homeland Security on June 15, 2012.''.

                          Purpose and Summary

    On June 5, 2019, Rep. Juan Vargas introduced H.R. 3154, the 
``Homeownership for DREAMers Act,'' a bill which clarifies that 
recipients of Deferred Action for Childhood Arrivals (DACA) 
cannot be deemed ineligible for mortgage loans backed by 
Federal Housing Administration (FHA), Fannie, Freddie, or the 
U.S. Department of Agriculture (USDA) solely on the basis of 
their status as DACA recipients.

                  Background and Need for Legislation

    On December 14, 2018, it was reported that the Trump 
Administration had begun to deny FHA loans to DACA 
recipients.\1\ The initial media report from BuzzFeed included 
interviews with employees of lenders who had been successfully 
originating FHA loans for DACA recipients for years with FHA 
approval, but under direction from the Trump Administration, 
had started receiving denials. Representatives of the 
Department of Housing and Urban Development denied making any 
formal change to its policies.
---------------------------------------------------------------------------
    \1\BuzzFeed, ``The Trump Administration Is Quietly Denying Federal 
Housing Loans To DACA Recipients,'' Dec. 14, 2018.
---------------------------------------------------------------------------
    Fannie Mae has since clarified that DACA recipients are and 
will continue to be eligible for loans that they back.\2\ 
Freddie Mac and USDA do not appear to have clarified their 
policies in this respect.
---------------------------------------------------------------------------
    \2\HousingWire, ``Fannie Mae declares support for DACA mortgage 
borrowers,'' Mar. 26, 2019.
---------------------------------------------------------------------------
    The following organizations support this bill: the Asian 
Pacific American Community Development (National CAPACD), the 
Asian Real Estate Association of America, the Center for 
Responsible Lending (CRL), The Leadership Conference on Civil 
and Human Rights, the Mortgage Bankers Association (MBA), the 
NAACP, the National Association of Hispanic Real Estate 
Professionals (NAHREP), the National Fair Housing Alliance 
(NFHA), UnidosUS, and United We Dream.

                      Section-by-Section Analysis


Section 1. Short title

    This section states that the title of the bill is the 
``Homeownership for Dreamers Act.''

Section 2. DACA recipient eligibility

    This section amends Sections 203, 501, 302, and 305 of the 
National Housing Act (12 U.S.C. 1709) by inserting language 
that defines ``DACA recipient'' and by also clarifying that 
FHA, USDA Rural Housing Service, Fannie Mae, and Freddie Mac 
may not limit a borrower's eligibility based on their status as 
a DACA recipient.

                                Hearings

    For the purposes of section 103(i) of H. Res. 6 for the 
116th Congress, the Committee on Financial Services held a 
hearing to consider a draft version of H.R. 3154 entitled, ``A 
Review of the State of and Barriers to Minority Homeownership'' 
on May 8, 2019. Testifying before the Committee were Alanna 
McCargo, Vice President, Housing Finance Policy, the Urban 
Institute; Nikitra Bailey, Executive Vice President, Center for 
Responsible Lending; Joseph Nery, Partner, Nery & Richardson 
LLC and Past President of the National Association of Hispanic 
Real Estate Professionals (NAHREP), current National Board 
Member; Jeffrey Hicks, President, National Association of Real 
Estate Brokers; Carmen Castro-Conroy, Managing Counselor, 
Montgomery County, Housing Initiative Partnership, Inc.; JoAnne 
Poole, 2019 Vice Chair, Multicultural Real Estate Leadership 
Advisory Group, National Association of Realtors; and Joel 
Griffith, Research Fellow, Financial Regulations, the Heritage 
Foundation

                        Committee Consideration

    The Committee on Financial Services met in open session on 
June 11, 2019 and ordered H.R. 3154 to be reported favorably to 
the House with an amendment in the nature of a substitute by a 
vote of 33 yeas and 25 nays, a quorum being present.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 3154.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 3154 are to clarify 
that borrowers are not denied lending opportunities by FHA, 
USDA, Fannie Mae, or Freddie Mac based on their status as DACA 
recipients.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 3154 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 8, 2019.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3154, the 
Homeownership for DREAMers Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Aurora 
Swanson.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    H.R. 3154 would clarify that noncitizens in deferred action 
status under the Deferred Action for Childhood Arrivals (DACA) 
program are eligible to obtain federally guaranteed mortgages 
for single-family homes. Most federal mortgage guarantees are 
offered by the Federal Housing Administration (FHA), and two 
government-sponsored enterprises (GSEs)--Fannie Mae and Freddie 
Mac. FHA guidelines are not explicit about the eligibility of 
those with DACA status for its mortgage guarantee program, but 
FHA requires mortgage lenders to determine the likelihood that 
a noncitizen's work authorization will be renewed when 
evaluating the risk of issuing a mortgage that will be 
guaranteed by FHA.
    The Administration has proposed to terminate the DACA 
program that currently provides lawful presence and work 
authorization to nearly 700,000 inadmissible or deportable 
aliens. That policy proposal is currently subject to a 
nationwide injunction but CBO's baseline incorporates the 
assumption that the Administration's proposed policy will be 
implemented by October 1, 2021. If that occurs, deferred-action 
status under DACA will be revoked, including the authorization 
of those noncitizens to work legally in the United States.
    CBO estimates that enacting H.R. 3154 could have an 
insignificant effect on spending subject to appropriation over 
the 2019-2024 period. Although more borrowers might seek an FHA 
guaranteed mortgage under the bill, those applicants would 
continue to face the financial risk of the pending termination 
of DACA and their right to work legally in the United States. 
CBO estimates that enacting H.R. 3154 would not change how 
lenders evaluate that risk when determining whether to issue 
mortgages to those with DACA status. Thus, CBO expects that 
enacting H.R. 3154 would not lead to a significant increase in 
the number or value of federal mortgage guarantees.
    Under current law, the GSEs treat certain noncitizens as 
eligible to obtain mortgage guarantees. Using information from 
the GSEs, and their regulator, the Federal Housing Finance 
Administration, CBO estimates that implementing the bill would 
not affect mortgage guarantees issued by the GSEs because DACA 
recipients already are explicitly eligible for mortgages under 
those programs.
    The CBO staff contact for this estimate is Aurora Swanson. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 3154. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 3154, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 3154, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives H.R. 3154 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 3154 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                        Changes to Existing Law

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 3154, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                          NATIONAL HOUSING ACT



           *       *       *       *       *       *       *
TITLE II--MORTGAGE INSURANCE

           *       *       *       *       *       *       *


                         insurance of mortgages

  Sec. 203. (a) The Secretary is authorized, upon application 
by the mortgagee, to insure as hereinafter provided any 
mortgage offered to him which is eligible for insurance as 
hereinafter provided, and, upon such terms as the Secretary may 
prescribe, to make commitments for the insuring of such 
mortgages prior to the date of their execution or disbursement 
thereon.
  (b) To be eligible for insurance under this section a 
mortgage shall comply with the following:
          (1) Have been made to, and be held by, a mortgagee 
        approved by the Secretary as responsible and able to 
        service the mortgage properly.
          (2) Involve a principal obligation (including such 
        initial service charges, appraisal, inspection, and 
        other fees as the Secretary shall approve) in an 
        amount--
                  (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.
        For purposes of the preceding sentence, the term 
        ``area'' means a metropolitan statistical area as 
        established by the Office of Management and Budget; and 
        the median 1-family house price for an area shall be 
        equal to the median 1-family house price of the county 
        within the area that has the highest such median price.
                  
          Notwithstanding any other provision of this 
        paragraph, the amount which may be insured under this 
        section may be increased by up to 20 percent if such 
        increase is necessary to account for the increased cost 
        of the residence due to the installation of a solar 
        energy system (as defined in subparagraph (3) of the 
        last paragraph of section 2(a) of this Act) therein.
          Notwithstanding any other provision of this 
        paragraph, the Secretary may not insure, or enter into 
        a commitment to insure, a mortgage under this section 
        that is executed by a first-time homebuyer and that 
        involves a principal obligation (including such initial 
        service charges, appraisal, inspection, and other fees 
        as the Secretary shall approve) in excess of 97 percent 
        of the appraised value of the property unless the 
        mortgagor has completed a program of counseling with 
        respect to the responsibilities and financial 
        management involved in homeownership that is approved 
        by the Secretary; except that the Secretary may, in the 
        discretion of the Secretary, waive the applicability of 
        this requirement.
          (3) Have a maturity satisfactory to the Secretary, 
        but not to exceed, in any event, thirty-five years (or 
        thirty years if such mortgage is not approved for 
        insurance prior to construction) from the date of the 
        beginning of amortization of the mortgage.
          (4) Contain complete amortization provisions 
        satisfactory to the Secretary requiring periodic 
        payments by the mortgagor not in excess of his 
        reasonable ability to pay as determined by the 
        Secretary.
          (5) Bear interest at such rate as may be agreed upon 
        by the mortgagor and the mortgagee.
          (6) Provide, in a manner satisfactory to the 
        Secretary, for the application of the mortgagor's 
        periodic payments (exclusive of the amount allocated to 
        interest and to the premium charge which is required 
        for mortgage insurance as hereinafter provided) to 
        amortization of the principal of the mortgage.
          (7) Contain such terms and provisions with respect to 
        insurance, repairs, alterations, payment of taxes, 
        default reserves, delinquency charges, foreclosure 
        proceedings, anticipation of maturity, additional and 
        secondary liens, and other matters as the Secretary may 
        in his discretion prescribe.
          (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.
  (c)(1) The Secretary is authorized to fix premium charge for 
the insurance of mortgages under the separate sections of this 
title but in the case of any mortgage such charge shall be not 
less than an amount equivalent to one-fourth of 1 per centum 
per annum nor more than an amount equivalent to 1 per centum 
per annum of the amount of the principal obligation of the 
mortgage outstanding at any time, without taking into account 
delinquent payments or prepayments: Provided, That premium 
charges fixed for insurance (1) under section 245, 247, 251, 
252, or 253, or any other financing mechanism providing 
alternative methods for repayment of a mortgage that is 
determined by the Secretary to involve additional risk, or (2) 
under subsection (n) are not required to be the same as the 
premium charges for mortgages insured under the other 
provisions of this section, but in no case shall premium 
charges under subsection (n) exceed 1 per centum per annum: 
Provided, That any reduced premium charge so fixed and computed 
may, in the discretion of the Secretary, also be made 
applicable in such manner as the Secretary shall prescribe to 
each insured mortgage outstanding under the section or sections 
involved at the time the reduced premium charge is fixed. Such 
premium charges shall be payable by the mortgagee, either in 
cash, or in debentures issued by the Secretary under this title 
at par plus accrued interest, in such manner as may be 
prescribed by the Secretary: Provided, That debentures 
presented in payment of premium charges shall represent 
obligations of the particular insurance fund or account to 
which such premium charges are to be credited: Provided 
further, That the Secretary may require the payment of one or 
more such premium charges at the time the mortgage is insured, 
at such discount rate as he may prescribe not in excess of the 
interest rate specified in the mortgage. If the Secretary finds 
upon the presentation of a mortgage for insurance and the 
tender of the initial premium charge or charges so required 
that the mortgage complies with the provisions of this section, 
such mortgage may be accepted for insurance by endorsement or 
otherwise as the Secretary may prescribe; but no mortgage shall 
be accepted for insurance under this section unless the 
Secretary finds that the project with respect to which the 
mortgage is executed is economically sound. In the event that 
the principal obligation of any mortgage accepted for insurance 
under this title is paid in full prior to the maturity date, 
the Secretary is further authorized in his discretion to 
require the payment by the mortgagee of an adjusted premium 
charge in such amount as the Secretary determines to be 
equitable, but not in excess of the aggregate amount of the 
premium charges that the mortgagee would otherwise have been 
required to pay if the mortgage had continued to be insured 
until such maturity date; and in the event that the principal 
obligation is paid in full as herein set forth, the Secretary 
is authorized to refund to the mortgagee for the account of the 
mortgagor all, or such portion as he shall determine to be 
equitable, of the current unearned premium charges theretofore 
paid: Provided, That with respect to mortgages (1) for which 
the Secretary requires, at the time the mortgage is insured, 
the payment of a single premium charge to cover the total 
premium obligation for the insurance of the mortgage, and (2) 
on which the principal obligation is paid before the number of 
years on which the premium with respect to a particular 
mortgage was based, or the property is sold subject to the 
mortgage or is sold and the mortgage is assumed prior to such 
time, the Secretary shall provide for refunds, where 
appropriate, of a portion of the premium paid and shall provide 
for appropriate allocation of the premium cost among the 
mortgagors over the term of the mortgage, in accordance with 
procedures established by the Secretary which take into account 
sound financial and actuarial considerations.
  (2) Notwithstanding any other provision of this section, each 
mortgage secured by a 1- to 4-family dwelling that is an 
obligation of the Mutual Mortgage Insurance Fund shall be 
subject to the following requirements:
          (A) The Secretary shall establish and collect, at the 
        time of insurance, a single premium payment in an 
        amount not exceeding 3 percent of the amount of the 
        original insured principal obligation of the mortgage. 
        In the case of a mortgage for which the mortgagor is a 
        first-time homebuyer who completes a program of 
        counseling with respect to the responsibilities and 
        financial management involved in homeownership that is 
        approved by the Secretary, the premium payment under 
        this subparagraph shall not exceed 2.75 percent of the 
        amount of the original insured principal obligation of 
        the mortgage. Upon payment in full of the principal 
        obligation of a mortgage prior to the maturity date of 
        the mortgage, the Secretary shall refund all of the 
        unearned premium charges paid on the mortgage pursuant 
        to this subparagraph, provided that the mortgagor 
        refinances the unpaid principal obligation under title 
        II of this Act.
          (B) In addition to the premium under subparagraph 
        (A), the Secretary may establish and collect annual 
        premium payments in an amount not exceeding 1.5 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) for the following periods:
                  (i) For any mortgage involving an original 
                principal obligation (excluding any premium 
                collected under subparagraph (A)) that is less 
                than 90 percent of the appraised value of the 
                property (as of the date the mortgage is 
                accepted for insurance), for the first 11 years 
                of the mortgage term.
                  (ii) For any mortage involving an original 
                principal obligation (excluding any premium 
                collected under subparagraph (A)) that is 
                greater than or equal to 90 percent of such 
                value, for the first 30 years of the mortgage 
                term; except that notwithstanding the matter 
                preceding clause (i), for any mortgage 
                involving an original principal obligation 
                (excluding any premium collected under 
                subparagraph (A)) that is greater than 95 
                percent of such value, the annual premium 
                collected during the 30-year period under this 
                clause may be in an amount not exceeding 1.55 
                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)(i) In addition to the premiums under 
        subparagraphs (A) and (B), the Secretary shall 
        establish and collect annual premium payments for any 
        mortgage for which the Secretary collects an annual 
        premium payment under subparagraph (B), in an amount 
        described in clause (ii).
          (ii)(I) Subject to subclause (II), with respect to a 
        mortgage, the amount described in this clause is 10 
        basis points 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).
          (II) During the 2-year period beginning on the date 
        of enactment of this subparagraph, the Secretary shall 
        increase the number of basis points of the annual 
        premium payment collected under this subparagraph 
        incrementally, as determined appropriate by the 
        Secretary, until the number of basis points of the 
        annual premium payment collected under this 
        subparagraph is equal to the number described in 
        subclause (I).
  (d)(1) Except as provided in paragraph (2) of this 
subsection, notwithstanding provision of this title governing 
maximum mortgage amounts for insuring a mortgage secured by a 
one- to four-family dwelling, the maximum amount of the 
mortgage determined under any such provision may be increased 
by the amount of the mortgage insurance premium paid at the 
time the mortgage is insured.
  (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).
  (e) Any contract of insurance heretofore or hereafter 
executed by the Secretary under this title shall be conclusive 
evidence of the eligibility of the loan or mortgage for 
insurance, and the validility of any contract of insurance so 
executed shall be incontestable in the hands of an approved 
financial institution or approved mortgagee from the date of 
the execution of such contract, except for fraud or 
misrepresentation on the part of such approved financial 
institution or approved mortgagee.
  (f) Disclosure of Other Mortgage Products.--
          (1) In general.--In conjunction with any loan insured 
        under this section, an original lender shall provide to 
        each prospective borrower a disclosure notice that 
        provides a 1-page analysis of mortgage products offered 
        by that lender and for which the borrower would 
        qualify.
          (2) Notice.--The notice required under paragraph (1) 
        shall include--
                  (A) a generic analysis comparing the note 
                rate (and associated interest payments), 
                insurance premiums, and other costs and fees 
                that would be due over the life of the loan for 
                a loan insured by the Secretary under 
                subsection (b) with the note rates, insurance 
                premiums (if applicable), and other costs and 
                fees that would be expected to be due if the 
                mortgagor obtained instead other mortgage 
                products offered by the lender and for which 
                the borrower would qualify with a similar loan-
                to-value ratio in connection with a 
                conventional mortgage (as that term is used in 
                section 305(a)(2) of the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) 
                or section 302(b)(2) of the Federal National 
                Mortgage Association Charter Act (12 U.S.C. 
                1717(b)(2)), as applicable), assuming 
                prevailing interest rates; and
                  (B) a statement regarding when the 
                requirement of the mortgagor to pay the 
                mortgage insurance premiums for a mortgage 
                insured under this section would terminate, or 
                a statement that the requirement shall 
                terminate only if the mortgage is refinanced, 
                paid off, or otherwise terminated.
  (g)(1) The Secretary may insure a mortgage under this title 
that is secured by a 1- to 4-family dwelling, or approve a 
substitute mortgagor with respect to any such mortgage, only if 
the mortgagor is to occupy the dwelling as his or her principal 
residence or as a secondary residence, as determined by the 
Secretary. In making this determination with respect to the 
occupancy of secondary residences, the Secretary may not insure 
mortgages with respect to such residences unless the Secretary 
determines that it is necessary to avoid undue hardship to the 
mortgagor. In no event may a secondary residence under this 
subsection include a vacation home, as determined by the 
Secretary.
  (2) The occupancy requirement established in paragraph (1) 
shall not apply to any mortgagor (or co-mortgagor, as 
appropriate) that is--
          (A) a public entity, as provided in section 214 or 
        247, or any other State or local government or an 
        agency thereof;
          (B) a private nonprofit or public entity, as provided 
        in section 221(h) or 235(j), or other private nonprofit 
        organization that is exempt from taxation under section 
        501(c)(3) of the Internal Revenue Code of 1986 and 
        intends to sell or lease the mortgage property to low 
        or moderate-income persons, as determined by the 
        Secretary;
          (C) an Indian tribe, as provided in section 248;
          (D) a serviceperson who is unable to meet such 
        requirement because of his or her duty assignment, as 
        provided in section 216 or subsection (b)(4) or (f) of 
        section 222;
          (E) a mortgagor or co-mortgagor under subsection (k); 
        or
          (F) a mortgagor that, pursuant to section 223(a)(7), 
        is refinancing an existing mortgage insured under this 
        Act for not more than the outstanding balance of the 
        existing mortgage, if the amount of the monthly payment 
        due under the refinancing mortgage is less than the 
        amount due under the existing mortgage for the month in 
        which the refinancing mortgage is executed.
  (3) For purposes of this subsection, the term ``substitute 
mortgagor'' means a person who, upon the release by a mortgagee 
of a previous mortgagor from personal liability on the mortgage 
note, assumes such liability and agrees to pay the mortgage 
debt.
  (h) Notwithstanding any other provision of this section, the 
Secretary is authorized to insure any mortgage which involves a 
principal obligation not in excess of the applicable maximum 
dollar limit under subsection (b) and not in excess of 100 per 
centum of the appraised value of a property upon which there is 
located a dwelling designed principally for a single-family 
residence, where the mortgagor establishes (to the satisfaction 
of the Secretary) that his home which he occupied as an owner 
or as a tenant was destroyed or damaged to such an extent that 
reconstruction is required as a result of a flood, fire, 
hurricane, earthquake, storm, or other catastrophe, which the 
President, pursuant to Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, has determined to be a major 
disaster. In any case in which the single family residence to 
be insured under this subsection is within a jurisdiction in 
which the President has declared a major disaster to have 
occurred, the Secretary is authorized, for a temporary period 
not to exceed 18 months from the date of such Presidential 
declaration, to enter into agreements to insure a mortgage 
which involves a principal obligation of up to 100 percent of 
the dollar limitation determined under section 305(a)(2) of the 
Federal Home Loan Mortgage Corporation Act for single family 
residence, and not in excess of 100 percent of the appraised 
value.
  (i) DACA Recipient Eligibility.--
          (1) In general.--The Secretary may not--
                  (A) prescribe terms that limit the 
                eligibility of a single family mortgage for 
                insurance under this title because of the 
                status of the mortgagor as a DACA recipient; or
                  (B) issue any limited denial of participation 
                in the program for such insurance because of 
                the status of the mortgagor as a DACA 
                recipient.
          (2) DACA recipient defined.--For the purposes of this 
        subsection, the term ``DACA recipient'' means an alien 
        who, at any time before, on, or after the date of the 
        enactment of this subsection, is or was in deferred 
        action status pursuant to the Deferred Action for 
        Childhood Arrivals (`DACA') Program announced by the 
        Secretary of Homeland Security on June 15, 2012.
          (3) Exemption.--
                  (A) Denial for failure to satisfy valid 
                eligibility requirements.--Nothing in this 
                title prohibits the denial of insurance based 
                on failure to satisfy valid eligibility 
                requirements.
                  (B) Invalid eligibility requirements.--Valid 
                eligibility requirements do not include 
                criteria that were adopted with the purpose of 
                denying eligibility for insurance because of 
                race, color, religion, sex, familial status, 
                national origin, disability, or the status of a 
                mortgagor as a DACA recipient.
  [(i)]
  (j) Loans secured by mortgages insured under this section 
shall not be taken into account in determining the amount of 
real estate loans which a national bank may make in relation to 
its capital and surplus or its time and savings deposits.
  (k)(1) The Secretary may, in order to assist in the 
rehabilitation of one- to four-family structures used primarily 
for residential purposes, insure and make commitments to insure 
rehabilitation loans (including advances made during 
rehabilitation) made by financial institutions. Such 
commitments to insure and such insurance shall be made upon 
such terms and conditions which the Secretary may prescribe and 
which are consistent with the provisions of subsections (b), 
(c), (e), (i) and (j) of this section, except as modified by 
the provisions of this subsection.
  (2) For the purpose of this subsection--
          (A) the term ``rehabilitation loan'' means a loan, 
        advance of credit, or purchase of an obligation 
        representing a loan or advance of credit, made for the 
        purpose of financing--
                  (i) the rehabilitation of an existing one- to 
                four-unit structure which will be used 
                primarily for residential purposes;
                  (ii) the rehabilitation of such a structure 
                and the refinancing of the outstanding 
                indebtedness on such structure and the real 
                property on which the structure is located; or
                  (iii) the rehabilitation of such a structure 
                and the purchase of the structure and the real 
                property on which it is located; and
          (B) the term ``rehabilitation'' means the improvement 
        (including improvements designed to meet cost-effective 
        energy conservation standards prescribed by the 
        Secretary) or repair of a structure, or facilities in 
        connection with a structure, and may include the 
        provision of such sanitary or other facilities as are 
        required by applicable codes, a community development 
        plan, or a statewide property insurance plan to be 
        provided by the owner or tenant of the project. The 
        term ``rehabilitation'' may also include measures to 
        evaluate and reduce lead-based paint hazards, as such 
        terms are defined in section 1004 of the Residential 
        Lead-Based Paint Hazard Reduction Act of 1992.
  (3) To be eligible for insurance under this subsection, a 
rehabilitation loan shall--
          (A) involve a principal obligation (including such 
        initial service charges, appraisal, inspection, and 
        other fees as the Secretary shall approve) in an amount 
        which does not exceed, when added to any outstanding 
        indebtedness of the borrower which is secured by the 
        structure and the property on which it is located, the 
        amount specified in subsection (b)(2); except that, in 
        determining the amount of the principal obligation for 
        purposes of this subsection, the Secretary shall 
        establish as the appraised value of the property an 
        amount not to exceed the sum of the estimated cost of 
        rehabilitation and the Secretary's estimate of the 
        value of the property before rehabilitation;
          (B) bear interest at such rate as may be agreed upon 
        by the borrower and the financial institution;
          (C) be an acceptable risk, as determined by the 
        Secretary; and
          (D) comply with such other terms, conditions, and 
        restrictions as the Secretary may prescribe.
  (4) Any rehabilitation loan insured under this subsection may 
be refinanced and extended in accordance with such terms and 
conditions as the Secretary may prescribe, but in no event for 
an additional amount or term which exceeds the maximum provided 
for in this subsection.
  (5) All funds received and all disbursements made pursuant to 
the authority established by this subsection shall be credited 
or charged as appropriate, to the Mutual Mortgage Insurance 
Fund, and insurance benefits shall be paid in cash out of such 
Fund or in debentures executed in the name of such Fund. 
Insurance benefits paid with respect to loans secured by a 
first mortgage and insured under this subsection shall be paid 
in accordance with section 204. Insurance benefits paid with 
respect to loans secured by a mortgage other than a first 
mortgage and insured under this subsection shall be paid in 
accordance with paragraphs (6) and (7) of section 220(h), 
except that reference to ``this subsection'' in such paragraphs 
shall be construed as referring to this subsection.
          (6) The Secretary is authorized, for a temporary 
        period not to exceed 18 months from the date on which 
        the President has declared a major disaster to have 
        occurred, to enter into agreements to insure a 
        rehabilitation loan under this subsection which 
        involves a principal obligation of up to 100 percent of 
        the dollar limitation determined under section 
        305(a)(2) of the Federal Home Loan Mortgage Corporation 
        Act for a residence of the applicable size, if such 
        loan is secured by a structure and property that are 
        within a jurisdiction in which the President has 
        declared such disaster, pursuant to the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act, 
        and if such loan otherwise conforms to the loan-to-
        value ratio and other requirements of this subsection.
  (n)(1) The Secretary is authorized to insure under this 
section any mortgage meeting the requirements of subsection (b) 
of this section, except as modified by this subsection. To be 
eligible, the mortgage shall involve a dwelling unit in a 
cooperative housing project which is covered by a blanket 
mortgage insured under this Act or the construction of which 
was completed more than a year prior to the application for the 
mortgage insurance. The mortgage amount as determined under the 
other provisions of subsection (b) of this section shall be 
reduced by an amount equal to the portion of the unpaid balance 
of the blanket mortgage covering the project which is 
attributable (as of the date the mortgage is accepted for 
insurance) to such unit.
  (2) For the purpose of this subsection--
          (A) The terms ``home mortgage'' and ``mortgage'' 
        include a first or subordinate mortgage or lien given 
        (in accordance with the laws of the State where the 
        property is located and accompanied by such security 
        and other undertakings as may be required under 
        regulations of the Secretary) to secure a loan made to 
        finance the purchase of stock or membership in a 
        cooperative ownership housing corporation the permanent 
        occupancy of the dwelling units of which is restricted 
        to members of such corporation, where the purchase of 
        such stock or membership will entitle the purchaser to 
        the permanent occupancy of one of such units.
          (B) The terms ``appraised value of the property'', 
        ``value of the property'', and ``value'' include the 
        appraised value of a dwelling unit in a cooperative 
        housing project of the type described in subparagraph 
        (A) where the purchase of the stock or membership 
        involved will entitle the purchaser to the permanent 
        occupancy of that unit; and the term ``property'' 
        includes a dwelling unit in such a cooperative project.
          (C) The terms ``mortgagor'' includes a person or 
        persons giving a first or subordinate mortgage or lien 
        (of the type described in subparagraph (A)) to secure a 
        loan to finance the purchase of stock or membership in 
        a cooperative housing corporation.
  (r) The Secretary shall take appropriate actions to reduce 
losses under the single-family mortgage insurance programs 
carried out under this title. Such actions shall include--
          (1) an annual review by the Secretary of the rate of 
        early serious defaults and claims, in accordance with 
        section 533;
          (2) requiring that at least one person acquiring 
        ownership of a one- to four-family residential property 
        encumbered by a mortgage insured under this title be 
        determined to be credit-worthy under standards 
        prescribed by the Secretary, whether or not such person 
        assumes personal liability under the mortgage (except 
        that acquisitions by devise or descent shall not be 
        subject to this requirement);
          (3) in any case where personal liability under a 
        mortgage is assumed, requiring that the original 
        mortgagor be advised of the procedures by which he or 
        she may be released from liability; and
          (4) providing counseling, either directly or through 
        third parties, to delinquent mortgagors whose mortgages 
        are insured under this section 203 (12 U.S.C. 1709), 
        using the Fund to pay for such counseling.
In any case where the homeowner does not request a release from 
liability, the purchaser and the homeowner shall have joint and 
several liability for any default for a period of 5 years 
following the date of the assumption. After the close of such 
5-year period, only the purchaser shall be liable for any 
default on the mortgage unless the mortgage is in default at 
the time of the expiration of the 5-year period.
  (t)(1) Each mortgagee (or servicer) with respect to a 
mortgage under this section shall provide each mortgagor of 
such mortgagee (or servicer) written notice, not less than 
annually, containing a statement of the amount outstanding for 
prepayment of the principal amount of the mortgage and 
describing any requirements the mortgagor must fulfill to 
prevent the accrual of any interest on such principal amount 
after the date of any prepayment. This paragraph shall apply to 
any insured mortgage outstanding on or after the expiration of 
the 90-day period beginning on the date of effectiveness of 
final regulations implementing this paragraph.
  (2) Each mortgagee (or servicer) with respect to a mortgage 
under this section shall, at or before closing with respect to 
any such mortgage, provide the mortgagor with written notice 
(in such form as the Secretary shall prescribe, by regulation, 
before the expiration of the 90-day period beginning upon the 
date of the enactment of the Cranston-Gonzalez National 
Affordable Housing Act) describing any requirements the 
mortgagor must fulfill upon prepayment of the principal amount 
of the mortgage to prevent the accrual of any interest on the 
principal amount after the date of such prepayment. This 
paragraph shall apply to any mortgage executed after the 
expiration of the period under paragraph (1).
  (u)(1) No mortgagee may make or hold mortgages insured under 
this section if the customary lending practices of the 
mortgagee, as determined by the Secretary pursuant to section 
539, provide for a variation in mortgage charge rates that 
exceeds 2 percent for insured mortgages made by the mortgagee 
on dwellings located within an area. The Secretary shall ensure 
that any permissible variations in the mortgage charge rates of 
any mortgagee are based only on actual variations in fees or 
costs to the mortgagee to make the loan.
  (2) For purposes of this subsection--
          (A) the term ``area'' means a metropolitan 
        statistical area as established by the Office of 
        Management and Budget;
          (B) the term ``mortgage charges'' includes the 
        interest rate, discount points, loan origination fee, 
        and any other amount charged to a mortgagor with 
        respect to an insured mortgage; and
          (C) the term ``mortgage charge rate'' means the 
        amount of mortgage charges for an insured mortgage 
        expressed as a percentage of the initial principal 
        amount of the mortgage.
  (v) The insurance of a mortgage under this section in 
connection with the assistance provided under section 8(y) of 
the United States Housing Act of 1937 shall be the obligation 
of the Mutual Mortgage Insurance Fund.
  (w) Annual Report.--The Secretary of Housing and Urban 
Development shall submit to the Congress an annual report on 
the single family mortgage insurance program under this 
section. Each report shall set forth--
          (1) an analysis of the income groups served by the 
        single family insurance program, including--
                  (A) the percentage of borrowers whose incomes 
                do not exceed 100 percent of the median income 
                for the area;
                  (B) the percentage of borrowers whose incomes 
                do not exceed 80 percent of the median income 
                for the area; and
                  (C) the percentage of borrowers whose incomes 
                do not exceed 60 percent of the median income 
                for the area;
          (2) an analysis of the percentage of minority 
        borrowers annually assisted by the program; the 
        percentage of central city borrowers assisted and the 
        percentage of rural borrowers assisted by the program;
          (3) the extent to which the Secretary in carrying out 
        the program has employed methods to ensure that needs 
        of low and moderate income families, underserved areas, 
        and historically disadvantaged groups are served by the 
        program; and
          (4) the current impediments to having the program 
        serve low and moderate income borrowers; borrowers from 
        central city areas; borrowers from rural areas; and 
        minority borrowers.
  (x) Management Deficiencies Report.--
          (1) In general.--Not later than 60 days after the 
        date of the enactment of this subsection, and annually 
        thereafter, the Secretary shall submit to Congress a 
        report on the plan of the Secretary to address each 
        material weakness, reportable condition, and 
        noncompliance with an applicable law or regulation (as 
        defined by the Director of the Office of Management and 
        Budget) identified in the most recent audited financial 
        statement of the Federal Housing Administration 
        submitted under section 3515 of title 31, United States 
        Code.
          (2) Contents of annual report.--Each report submitted 
        under paragraph (1) shall include--
                  (A) an estimate of the resources, including 
                staff, information systems, and contract 
                assistance, required to address each material 
                weakness, reportable condition, and 
                noncompliance with an applicable law or 
                regulation described in paragraph (1), and the 
                costs associated with those resources;
                  (B) an estimated timetable for addressing 
                each material weakness, reportable condition, 
                and noncompliance with an applicable law or 
                regulation described in paragraph (1); and
                  (C) the progress of the Secretary in 
                implementing the plan of the Secretary included 
                in the report submitted under paragraph (1) for 
                the preceding year, except that this 
                subparagraph does not apply to the initial 
                report submitted under paragraph (1).
  (y) Requirements for Mortgages for Condominiums.--
          (1) Project recertification requirements.--
        Notwithstanding any other law, regulation, or guideline 
        of the Secretary, including chapter 2.4 of the 
        Condominium Project Approval and Processing Guide of 
        the FHA, the Secretary shall streamline the project 
        certification requirements that are applicable to the 
        insurance under this section for mortgages for 
        condominium projects so that recertifications are 
        substantially less burdensome than certifications. The 
        Secretary shall consider lengthening the time between 
        certifications for approved properties, and allowing 
        updating of information rather than resubmission.
          (2) Commercial space requirements.--Notwithstanding 
        any other law, regulation, or guideline of the 
        Secretary, including chapter 2.1.3 of the Condominium 
        Project Approval and Processing Guide of the FHA, in 
        providing for exceptions to the requirement for the 
        insurance of a mortgage on a condominium property under 
        this section regarding the percentage of the floor 
        space of a condominium property that may be used for 
        nonresidential or commercial purposes, the Secretary 
        shall provide that--
                  (A) any request for such an exception and the 
                determination of the disposition of such 
                request may be made, at the option of the 
                requester, under the direct endorsement lender 
                review and approval process or under the HUD 
                review and approval process through the 
                applicable field office of the Department; and
                  (B) in determining whether to allow such an 
                exception for a condominium property, factors 
                relating to the economy for the locality in 
                which such project is located or specific to 
                project, including the total number of family 
                units in the project, shall be considered.
        Not later than the expiration of the 90-day period 
        beginning on the date of the enactment of this 
        paragraph, the Secretary shall issue regulations to 
        implement this paragraph, which shall include any 
        standards, training requirements, and remedies and 
        penalties that the Secretary considers appropriate.
          (3) Transfer fees.--Notwithstanding any other law, 
        regulation, or guideline of the Secretary, including 
        chapter 1.8.8 of the Condominium Project Approval and 
        Processing Guide of the FHA and section 203.41 of the 
        Secretary's regulations (24 CFR 203.41), existing 
        standards of the Federal Housing Finance Agency 
        relating to encumbrances under private transfer fee 
        covenants shall apply to the insurance of mortgages by 
        the Secretary under this section to the same extent and 
        in the same manner that such standards apply to the 
        purchasing, investing in, and otherwise dealing in 
        mortgages by the Federal National Mortgage Association 
        and the Federal Home Loan Mortgage Corporation. If the 
        provisions of part 1228 of the Director of the Federal 
        Housing Finance Agency's regulations (12 CFR part 1228) 
        are amended or otherwise changed after the date of the 
        enactment of this paragraph, the Secretary of Housing 
        and Urban Development shall adopt any such amendments 
        or changes for purposes of this paragraph, unless the 
        Secretary causes to be published in the Federal 
        Register a notice explaining why the Secretary will 
        disregard such amendments or changes within 90 days 
        after the effective date of such amendments or changes.
          (4) Owner-occupancy requirement.--
                  (A) Establishment of percentage 
                requirement.--Not later than the expiration of 
                the 90-day period beginning on the date of the 
                enactment of this paragraph, the Secretary 
                shall, by rule, notice, or mortgagee letter, 
                issue guidance regarding the percentage of 
                units that must be occupied by the owners as a 
                principal residence or a secondary residence 
                (as such terms are defined by the Secretary), 
                or must have been sold to owners who intend to 
                meet such occupancy requirements, including 
                justifications for the percentage requirements, 
                in order for a condominium project to be 
                acceptable to the Secretary for insurance under 
                this section of a mortgage within such 
                condominium property.
                  (B) Failure to act.--If the Secretary fails 
                to issue the guidance required under 
                subparagraph (A) before the expiration of the 
                90-day period specified in such clause, the 
                following provisions shall apply:
                          (i) 35 percent requirement.--In order 
                        for a condominium project to be 
                        acceptable to the Secretary for 
                        insurance under this section, at least 
                        35 percent of all family units 
                        (including units not covered by FHA-
                        insured mortgages) must be occupied by 
                        the owners as a principal residence or 
                        a secondary residence (as such terms 
                        are defined by the Secretary), or must 
                        have been sold to owners who intend to 
                        meet such occupancy requirement.
                          (ii) Other considerations.--The 
                        Secretary may increase the percentage 
                        applicable pursuant to clause (i) to a 
                        condominium project on a project-by-
                        project or regional basis, and in 
                        determining such percentage for a 
                        project shall consider factors relating 
                        to the economy for the locality in 
                        which such project is located or 
                        specific to project, including the 
                        total number of family units in the 
                        project.

           *       *       *       *       *       *       *


TITLE III--NATIONAL MORTGAGE ASSOCIATIONS

           *       *       *       *       *       *       *


                        creation of association

  Sec. 302. (a)(1) There is hereby created a body corporate to 
be known as the ``Federal National Mortgage Association'' which 
shall be in the Department of Housing and Urban Development. 
The Association shall have succession until dissolved by Act of 
Congress. It shall maintain its principal office in the 
District of Columbia and shall be deemed, for purposes of venue 
in civil actions, to be a resident thereof. Agencies or offices 
may be established by the Association in such other place or 
places as it may deem necessary or appropriate in the conduct 
of its business.
  (2) On September 1, 1968, the body corporate described in the 
foregoing paragraph shall cease to exist in that form and is 
hereby partitioned into two separate and distinct bodies 
corporate, each of which shall have continuity and corporate 
succession as a separated portion of the previously existing 
body corporate, as follows:
  (A) One of such separated portions shall be a body corporate 
without capital stock to be known as the Government National 
Mortgage Association (hereinafter referred to as the 
``Association''), which shall be in the Department of Housing 
and Urban Development and which shall retain the assets and 
liabilities acquired and incurred under sections 305 and 306 
prior to such date, including any and all liabilities incurred 
pursuant to section 302(c). The Association shall have 
succession until dissolved by Act of Congress. It shall 
maintain its principal office in the District of Columbia or 
the metropolitan area thereof and shall be deemed, for purposes 
of jurisdiction and venue in civil actions, to be a District of 
Columbia corporation. Agencies or offices may be established by 
the Association in such other place or places as it may deem 
necessary or appropriate in the conduct of its business.
  (B) The other such separated portion shall be a body 
corporate to be known as Federal National Mortgage Association 
(hereinafter referred to as the ``corporation''), which shall 
retain the assets and liabilities acquired and incurred under 
sections 303 and 304 prior to such date. The corporation shall 
have succession until dissolved by Act of Congress. It shall 
maintain its principal office in the District of Columbia or 
the metropolitan area thereof and shall be deemed, for purposes 
of jurisdiction and venue in civil actions to be a District of 
Columbia corporation.
  (3) The partition transaction effected pursuant to the 
foregoing paragraph constitutes a reorganization within the 
meaning of section 368(a)(1)(E) of the Internal Revenue Code of 
1954; and for the purposes of such Code, no gain or loss is 
recognized by the previously existing body corporate's by 
reason of the partition, and the basis and holding period of 
the assets of the corporation immediately following such 
partition are the same as the basis and holding period of such 
assets immediately prior to such partition.
  (b)(1) For the purposes set forth in section 301 and subject 
to the limitations and restrictions of this title, each of the 
bodies corporate named in subsection (a)(2) is authorized, 
pursuant to commitments or otherwise, to purchase, service, 
sell, or otherwise deal in any mortgages which are insured 
under the National Housing Act or title V of the Housing Act of 
1949, or which are insured or guaranteed under the Servicemen's 
Readjustment Act of 1944 or chapter 37 of title 38, United 
States Code; and to purchase, service, sell, or otherwise deal 
in any loans made or guaranteed under part B of title VI of the 
Public Health Service Act; and the corporation is authorized to 
lend on the security of any such mortgages and to purchase, 
sell, or otherwise deal in any securities guaranteed by the 
Association under section 306(g): Provided, That (1) the 
Association may not purchase any mortgage at a price exceeding 
100 per centum of the unpaid principal amount thereof at the 
time of purchase, with adjustments for interest and any 
comparable items; (2) the Association may not purchase any 
mortgage, except a mortgage insured under title V of the 
Housing Act of 1949, if it offered by, or covers property held 
by a State, territorial, or municipal instrumentality; and (3) 
the Association may not purchase any mortgage under section 
305, except a mortgage insured under section 220 or title VIII 
or section 203(k) or under title X with respect to a new 
community approved under section 1004 thereof, or insured under 
section 213 and covering property located in an urban renewal 
area, or a mortgage covering property located in Alaska, Guam, 
or Hawaii, if the original principal obligation thereof exceeds 
or exceeded $55,000 in the case of property upon which is 
located a dwelling designed principally for a one-family 
residence; or $60,000 in the case of a two- or three-family 
residence, or $68,750 in the case of a four-family residence; 
or in the case of a property containing more than four dwelling 
units, $38,000 per dwelling unit (or such higher amount not in 
excess of $45,000 per dwelling unit as the Secretary may by 
regulation specify in any geographical area where the Secretary 
finds that cost levels so require) for that part of the 
property (attributable to dwelling use). Notwithstanding the 
provisions of clause (3) of the preceding sentence, the 
Association may purchase a mortgage under section 305 with an 
original principal obligation which exceeds the otherwise 
applicable maximum amount per dwelling unit if the mortgage is 
insured under section 207(c)(3), 213(b)(2), 220(d)(3)(B)(iii), 
221(d)(3)(ii), 221(d)(4)(ii), 231(c)(2), 234(e)(3), or 236. For 
the purposes of this title, the term ``mortgages'' and ``home 
mortgages'' shall be inclusive of any mortgages or other loans 
insured under any of the provisions of the National Housing Act 
or title V of the Housing Act of 1949.
  (2) For the purposes set forth in section 301(a), the 
corporation is authorized, pursuant to commitments or 
otherwise, to purchase, service, sell, lend on the security of, 
or otherwise deal in mortgages which are not insured or 
guaranteed as provided in paragraph (1) (such mortgages 
referred to hereinafter as ``conventional mortgages''). No such 
purchase of a conventional mortgage secured by a property 
comprising one- to four-family dwelling units shall be made if 
the outstanding principal balance of the mortgage at the time 
of purchase exceeds 80 per centum of the value of the property 
securing the mortgage, unless (A) the seller retains a 
participation of not less than 10 per centum in the mortgage; 
(B) for such period and under such circumstances as the 
corporation may require, the seller agrees to repurchase or 
replace the mortgage upon demand of the corporation in the 
event that the mortgage is in default; or (C) that portion of 
the unpaid principal balance of the mortgage which is in excess 
of such 80 per centum is guaranteed or insured by a qualified 
insurer as determined by the corporation. The corporation shall 
not issue a commitment to purchase a conventional mortgage 
prior to the date the mortgage is originated, if such mortgage 
is eligible for purchase under the preceding sentence only by 
reason of compliance with the requirements of clause (A) of 
such sentence. The corporation may purchase a conventional 
mortgage which was originated more than one year prior to the 
purchase date only if the seller is the Federal Deposit 
Insurance Corporation, the Resolution Trust Corporation, the 
National Credit Union Administration, or any other seller 
currently engaged in mortgage lending or investing activities. 
For the purpose of this section, the term ``conventional 
mortgages'' shall include a mortgage, lien, or other security 
interest on the stock or membership certificate issued to a 
tenant-stockholder or resident-member of a cooperative housing 
corporation, as defined in section 216 of the Internal Revenue 
Code of 1954, and on the proprietary lease, occupancy 
agreement, or right of tenancy in the dwelling unit of the 
tenant-stockholder or resident-member in such cooperative 
housing corporation. The corporation shall establish 
limitations governing the maximum original principal obligation 
of conventional mortgages that are purchased by it; in any case 
in which the corporation purchases a participation interest in 
such a mortgage, the limitation shall be calculated with 
respect to the total original principal obligation of the 
mortgage and not merely with respect to the interest purchased 
by the corporation. 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. The foregoing limitations may 
be increased by not to exceed 50 per centum with respect to 
properties located in Alaska, Guam, Hawaii, and the Virgin 
Islands. 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) The corporation is authorized to purchase, service, sell, 
lend on the security of, and otherwise deal in loans or 
advances of credit for the purchase and installation of home 
improvements, including energy conserving improvements or solar 
energy systems described in the last paragraph of section 2(a) 
of the National Housing Act and residential energy conservation 
measures as described in section 210(11) of the National Energy 
Conservation Policy Act and financed by a public utility in 
accordance with the requirements of title II of such Act. To be 
eligible for purchase, any such loan or advance of credit 
(other than a loan or advance made with respect to energy 
conserving improvements or solar energy systems or residential 
energy conservation measures) not insured under title I of the 
National Housing Act shall be secured by a lien against the 
property to be improved.
  (4) The corporation is authorized to purchase, service, sell, 
lend on the security of, and otherwise deal in loans or 
advances of credit secured by mortgages or other liens against 
manufactured homes.
  (5)(A) The corporation is authorized to purchase, service, 
sell, lend on the security of, and otherwise deal in (i) 
conventional mortgages that are secured by a subordinate lien 
against a one-to-four-family residence that is the principal 
residence of the mortgagor; and (ii) conventional mortgages 
that are secured by a subordinate lien against a property 
comprising five or more family dwelling units. If the 
corporation, pursuant to paragraphs (1) through (4), shall have 
purchased, serviced, sold, or otherwise dealt with any other 
outstanding mortgage secured by the same residence, the 
aggregate original amount of such other mortgage and the 
mortgage authorized to be purchased, serviced, sold, or 
otherwise dealt with under this paragraph shall not exceed the 
applicable limitation determined under paragraph (2).
  (B) The corporation shall establish limitations governing the 
maximum original principal obligation of conventional mortgages 
described in subparagraph (A). In any case in which the 
corporation purchases a participation interest in such a 
mortgage, the limitation shall be calculated with respect to 
the total original principal obligation of such mortgage 
described in subpargraph (A) and not merely with respect to the 
interest purchased by the corporation. Such limitations shall 
not exceed (i) with respect to mortgages described in 
subparagraph (A)(i), 50 per centum of the single-family 
residence mortgage limitation determined under paragraph (2); 
and (ii) with respect to mortgages described in subparagraph 
(A)(ii), the applicable limitation determined under paragraph 
(2).
  (C) No subordinate mortgage against a one- to four-family 
residence shall be purchased by the corporation if the total 
outstanding indebtedness secured by the property as a result of 
such mortgage exceeds 80 per centum of the value of such 
property unless (i) that portion of such total outstanding 
indebtedness that exceeds such 80 per centum is guaranteed or 
insured by a qualified insurer as determined by the 
corporation; (ii) the seller retains a participation of not 
less than 10 per centum in the mortgage; or (iii) for such 
period and under such circumstances as the corporation may 
require, the seller agrees to repurchase or replace the 
mortgage upon demand of the corporation in the event that the 
mortgage is in default. The corporation shall not issue a 
commitment to purchase a subordinate mortgage prior to the date 
the mortgage is originated, if such mortgage is eligible for 
purchase under the preceding sentence only by reason of 
compliance with the requirements of clause (ii) of such 
sentence.
  (6) The corporation may not implement any new program (as 
such term is defined in section 1303 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992) before 
obtaining the approval of the Secretary under section 1322 of 
such Act.
  (7)(A) Definitions.--In this paragraph--
          (i) the term ``credit score'' means a numerical value 
        or a categorization created by a third party derived 
        from a statistical tool or modeling system used by a 
        person who makes or arranges a loan to predict the 
        likelihood of certain credit behaviors, including 
        default; and
          (ii) the term ``residential mortgage'' has the 
        meaning given the term in section 302 of the Federal 
        Home Loan Mortgage Corporation Act (12 U.S.C. 1451).
  (B) Use of credit scores.--The corporation shall condition 
purchase of a residential mortgage by the corporation under 
this subsection on the provision of a credit score for the 
borrower only if--
          (i) the credit score is derived from any credit 
        scoring model that has been validated and approved by 
        the corporation under this paragraph; and
          (ii) the corporation provides for the use of the 
        credit score by all of the automated underwriting 
        systems of the corporation and any other procedures and 
        systems used by the corporation to purchase residential 
        mortgages that use a credit score.
  (C) Validation and approval process.--The corporation shall 
establish a validation and approval process for the use of 
credit score models, under which the corporation may not 
validate and approve a credit score model unless the credit 
score model--
          (i) satisfies minimum requirements of integrity, 
        reliability, and accuracy;
          (ii) has a historical record of measuring and 
        predicting default rates and other credit behaviors;
          (iii) is consistent with the safe and sound operation 
        of the corporation;
          (iv) complies with any standards and criteria 
        established by the Director of the Federal Housing 
        Finance Agency under section 1328(1) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act 
        of 1992; and
          (v) satisfies any other requirements, as determined 
        by the corporation.
  (D) Replacement of credit score model.--If the corporation 
has validated and approved 1 or more credit score models under 
subparagraph (C) and the corporation validates and approves an 
additional credit score model, the corporation may determine 
that--
          (i) the additional credit score model has replaced 
        the credit score model or credit score models 
        previously validated and approved; and
          (ii) the credit score model or credit score models 
        previously validated and approved shall no longer be 
        considered validated and approved for the purposes of 
        subparagraph (B).
  (E) Public disclosure.--Upon establishing the validation and 
approval process required under subparagraph (C), the 
corporation shall make publicly available a description of the 
validation and approval process.
  (F) Application.--Not later than 30 days after the effective 
date of this paragraph, the corporation shall solicit 
applications from developers of credit scoring models for the 
validation and approval of those models under the process 
required under subparagraph (C).
  (G) Timeframe for determination; notice.--
          (i) In general.--The corporation shall make a 
        determination with respect to any application submitted 
        under subparagraph (F), and provide notice of that 
        determination to the applicant, before a date 
        established by the corporation that is not later than 
        180 days after the date on which an application is 
        submitted to the corporation.
          (ii) Extensions.--The Director of the Federal Housing 
        Finance Agency may authorize not more than 2 extensions 
        of the date established under clause (i), each of which 
        shall not exceed 30 days, upon a written request and a 
        showing of good cause by the corporation.
          (iii) Status notice.--The corporation shall provide 
        notice to an applicant regarding the status of an 
        application submitted under subparagraph (F) not later 
        than 60 days after the date on which the application 
        was submitted to the corporation.
          (iv) Reasons for disapproval.--If an application 
        submitted under subparagraph (F) is disapproved, the 
        corporation shall provide to the applicant the reasons 
        for the disapproval not later than 30 days after a 
        determination is made under this subparagraph.
  (H) Authority of director.--If the corporation elects to use 
a credit score model under this paragraph, the Director of the 
Federal Housing Finance Agency shall require the corporation to 
periodically review the validation and approval process 
required under subparagraph (C) as the Director determines 
necessary to ensure that the process remains appropriate and 
adequate and complies with any standards and criteria 
established pursuant to section 1328(1) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992.
  (I) Extension.--If, as of the effective date of this 
paragraph, a credit score model has not been approved under 
subparagraph (C), the corporation may use a credit score model 
that was in use before the effective date of this paragraph, if 
necessary to prevent substantial market disruptions, until the 
earlier of--
          (i) the date on which a credit score model is 
        validated and approved under subparagraph (C); or
          (ii) the date that is 2 years after the effective 
        date of this paragraph.
  (8) DACA recipient eligibility.--
          (A) In general.--The corporation may not condition 
        purchase of a single-family residence mortgage by the 
        corporation under this subsection on the status of the 
        borrower as a DACA recipient.
          (B) DACA recipient defined.--For the purposes of this 
        paragraph, the term ``DACA recipient'' means an alien 
        who, at any time before, on, or after the date of the 
        enactment of this paragraph, is or was in deferred 
        action status pursuant to the Deferred Action for 
        Childhood Arrivals (``DACA'') Program announced by the 
        Secretary of Homeland Security on June 15, 2012.
  (c)(1) Notwithstanding any other provision of this Act or of 
any other law, the Association is authorized under section 306 
to create, accept, execute, and otherwise administer in all 
respects such trusts, receiverships, conservatorships, 
liquidating or other agencies, or other fiduciary and 
representative undertakings and activities, hereinafter in this 
subsection called ``trusts'', as might be appropriate for 
financing purposes; and in relation thereto the Association may 
acquire, hold and manage, dispose of, and otherwise deal in any 
mortgages or other types of obligations in which any department 
or agency of the United States listed in paragraph (2) of this 
subsection may have a financial interest. The Association may 
join in any such undertakings and activities notwithstanding 
that it is also serving in a fiduciary or representative 
capacity; and is authorized to guarantee any participations or 
other instruments, whether evidence of property rights or debt, 
issued for such financing purposes. Participations or other 
instruments issued by the Association pursuant to this 
subsection shall to the same extent as securities which are 
direct obligations of or obligations guaranteed as to principal 
or interest by the United States be deemed to be exempt 
securities within the meaning of laws administered by the 
Securities and Exchange Commission. The amounts of any 
mortgages and other obligations acquired by the Association 
under section 306, pursuant to this subsection, shall not be 
included in the total amounts set forth in section 306(c).
  (2) Subject to the limitations provided in paragraph (4) of 
this subsection, one or more trusts may be established as 
provided in this subsection by each of the following 
departments or agencies:
          (A) The Farmers Home Administration of the Department 
        of Agriculture, but only with respect to operating 
        loans, direct farm ownership loans, direct housing 
        loans, and direct soil and water loans. Such trusts may 
        not be established with respect to loans for housing 
        for the elderly under sections 502 and 515(a) of the 
        Housing Act of 1949, nor with respect to loans for 
        nonfarm recreational development.
          (B) The Department of Education, but only with 
        respect to loans made by the Secretary of Education for 
        construction of academic facilities, and loans to help 
        finance student loan programs.
          (C) The Department of Housing and Urban Development.
          (D) The Department of Veterans Affairs.
          (E) The Export-Import Bank.
          (F) The Small Business Administration.
The head of each such department or agency, hereinafter in this 
subsection called the ``trustor'', is authorized to set aside a 
part or all of any obligations held by the trustor and subject 
them to a trust or trusts and, incident thereto, shall 
guarantee to the trustee timely payment thereof. The trust 
instrument may provide for the issuance and sale of beneficial 
interests or participations, by the trustee, in such 
obligations or in the right to receive interest and principal 
collections therefrom; and may provide for the substitution or 
withdrawal of such obligations, or for the substitution of cash 
for obligations. The trust or trusts shall be exempt from all 
taxation. The trust instrument may also contain other 
appropriate provisions in keeping with the purposes of this 
subsection. The Association shall be named and shall act as 
trustee of any such trusts and, for the purposes thereof, the 
title to such obligations shall be deemed to have passed to the 
Association in trust. The trust instrument shall provide that 
custody, control, and administration of the obligations shall 
remain in the trustor subjecting the obligations to the trust, 
subject to transfer to the trustee in event of default or 
probable default, as determined by the trustee, in the payment 
of principal and interest of the beneficial interests or 
participations. Collections from obligations subject to the 
trusts shall be dealt with as provided in the instrument 
creating the trust. The trust instrument shall provide that the 
trustee will promptly pay to the trustor the full net proceeds 
of any sale of beneficial interests or participations to the 
extent they are based upon such obligations or collections. 
Such proceeds shall be dealt with as otherwise provided by law 
for sales or repayment of such obligations. The effect of both 
past and future sales of any issue of beneficial interests or 
participations shall be the same, to the extent of the 
principal of such issue, as the direct sale with recourse of 
the obligations subject to the trust. Any trustor creating a 
trust or trusts hereunder is authorized to purchase, through 
the facilities of the trustee, outstanding beneficial interests 
or participations to the extent of the amount of the trustor's 
responsibility to the trustee on beneficial interests or 
participations outstanding, and to pay the trustor's proper 
share of the costs and expenses incurred by the Association as 
trustee pursuant to the trust instrument.
  (3) When any trustor guarantees to the trustee the timely 
payment of obligations the trustor subjects to a trust pursuant 
to this subsection, and it becomes necessary for such trustor 
to meet his responsibilities under such guaranty, the trustor 
is authorized to fulfill such guaranty.
  (4) Beneficial interests or participations shall not be 
issued for the account of any trustor in an aggregate principal 
amount greater than is authorized with respect to such trustor 
in an appropriation Act. Any such authorization shall remain 
available only for the fiscal year for which it is granted and 
for the succeeding fiscal year.
  (5) The Association, as trustee, is authorized to issue and 
sell beneficial interests or participations under this 
subsection, notwithstanding that there may be insufficiency in 
aggregate receipts from obligations subject to the related 
trust to provide for the payment by the trustee (on a timely 
basis out of current receipts or otherwise) of all interest or 
principal on such interests or participations (after provision 
for all costs and expenses incurred by the trustee, fairly 
prorated among trustors). There are authorized to be 
appropriated without fiscal year limitation such sums as may be 
necessary to enable any trustor to pay the trustee such 
insufficiency as the trustee may require on account of 
outstanding beneficial interests or participations authorized 
to be issued pursuant to paragraph (4) of this subsection. Such 
trustor shall make timely payments to the trustee from such 
appropriations, subject to and in accord with the trust 
instrument. In the event that the insufficiency required by the 
trustee is on account of principal maturities of outstanding 
beneficial interests or participations authorized to be issued 
pursuant to paragraph (4) of this subsection, or pursuant 
hereto, the trustee is authorized to elect to issue additional 
beneficial interests or participations for refinancing purposes 
in lieu of requiring any trustor or trustors to make payments 
to the trustee from appropriated funds or other sources. Each 
such issue of beneficial interests or participations shall be 
in an amount determined by the trustee but not in excess of the 
aggregate amount which the trustee would otherwise require the 
trustor or trustors to pay from appropriated funds or other 
sources, and may be issued without regard to the provisions of 
paragraph (4) of this subsection. All refinancing issues of 
beneficial interests or participations shall be deemed to have 
been issued pursuant to the authority contained in the 
appropriation Act or Acts under which the beneficial interests 
or participations were originally issued.

           *       *       *       *       *       *       *

                              ----------                              


                          HOUSING ACT OF 1949



           *       *       *       *       *       *       *
                         TITLE V--FARM HOUSING

          financial assistance by the secretary of agriculture

  Sec. 501. (a) The Secretary of Agriculture (hereinafter 
referred to as the ``Secretary'') is authorized, subject to the 
terms and conditions of this title, to extend financial 
assistance, through the Farmers Home Administration, (1) to 
owners of farms in the United States and in the Commonwealth of 
Puerto Rico, the Virgin Islands, the territories and 
possessions of the United States, and the Trust Territory of 
the Pacific Islands, to enable them to construct, improve, 
alter, repair, or replace dwellings and other farm buildings on 
their farms, and to purchase buildings and land constituting a 
minimum adequate site, in order to provide them, their tenants, 
lessees, sharecroppers, and laborers with decent, safe and 
sanitary living conditions and adequate farm buildings as 
specified in this title, and (2) to owners of other real estate 
in rural areas for the construction, improvement, alteration, 
or repair of dwellings, related facilities, and farm buildings, 
and to rural residents, including persons who reside in 
reservations or villages of Indian tribes, for such purposes 
and for the purchase of buildings and the purchase of land 
constituting a minimum adequate site, in order to enable them 
to provide dwellings and related facilities for their own use 
and buildings adequate for their farming operations, and (3) to 
elderly or handicapped persons or families who are or will be 
the owners of land in rural areas for the construction, 
improvement, alteration, or repair of dwellings and related 
facilities, the purchase of dwellings and related facilities 
and the purchase of land constituting a minimum adequate site, 
in order to provide them with adequate dwellings and related 
facilities for their own use and (4) to an owner described in 
clause (1), (2), or (3) for refinancing indebtedness which--
          
          (A) was incurred for an eligible purpose described in 
        such clause, and
          (B)(i) if not refinanced, is likely to result 
        (because of circumstances beyond the control of the 
        applicant) at an early date in the loss of the 
        applicant's necessary dwelling or essential farm 
        service buildings, or
          (ii) if combined (in the case of a dwelling that the 
        Secretary finds not to be decent, safe, and sanitary) 
        with a loan for improvement, rehabilitation, or repairs 
        and not refinanced, is likely to result in the 
        applicant's continuing to be deprived of a decent, 
        safe, and sanitary dwelling.
          (5) Definitions.--For purposes of this title, the 
        terms ``repair'', ``repairs'', ``rehabilitate'', and 
        ``rehabilitation'' include measures to evaluate and 
        reduce lead-based paint hazards, as such terms are 
        defined in section 1004 of the Residential Lead-Based 
        Paint Hazard Reduction Act of 1992.
  (b)(1) For the purpose of this title, the term ``farm'' shall 
mean a parcel or parcels of land operated as a single unit 
which is used for the production of one or more agricultural 
commodities and which customarily produces or is capable of 
producing such commodities for sale and for home use of a gross 
annual value of not less than the equivalent of gross annual 
value of $400 in 1944, as determined by the Secretary. The 
Secretary shall promptly determine whether any parcel or 
parcels of land constitute a farm for the purposes of this 
title whenever requested to do so by any interested Federal, 
State, or local public agency, and his determination shall be 
conclusive.
  (2) For the purposes of this title, the terms ``owner'' and 
``mortgage'' shall be deemed to include, respectively, the 
lessee and other security interest in, any leasehold interest 
which the Secretary determines has an unexpired term (A) in the 
case of a loan, for a period sufficiently beyond the repayment 
period of the loan to provide adequate security and a 
reasonable probability of accomplishing the objectives for 
which the loan is made, and (B) in the case of a grant for a 
period sufficient to accomplish the objectives for which the 
grant is made.
  (3) For the purposes of this title, the term ``elderly or 
handicapped persons or families'' means families which consist 
of two or more persons, the head of which (of his or her 
spouse) is at least sixty-two years of age or is handicapped. 
Such term also means a single person who is at least sixty-two 
years of age or is handicapped. A person shall be considered 
handicapped if such person is determined, pursuant to 
regulations issued by the Secretary, to have an impairment 
which (A) is expected to be of long-continued and indefinite 
duration, (B) substantially impedes his ability to live 
independently, and (C) is of such a nature of such ability 
could be improved by more suitable housing conditions, or if 
such person has a developmental disability as defined in 
section 102 of the Developmental Disabilities Assistance and 
Bill of Rights Act of 2000. The Secretary shall prescribe such 
regulations as may be necessary to prevent abuses in 
determinig, under the definitions contained in this paragraph, 
eligibility of families and persons for admission to and 
occupancy of housing constructed wih assistance under this 
title. Notwithstanding the preceding provisions of this 
paragraph, such term also includes two or more elderly (sixty-
two years of age or over) or handicapped persons living 
together, one or more such persons living with another person 
who is determined (under regulations prescribed by the 
Secretary) to be essential to the care or well-being of such 
persons, and the surviving member or members of any family 
described in the first sentence of this paragraph who were 
living, in a unit assisted under this title, with the deceased 
member of the family at the time of his or her death.
  (4) For the purpose of this title, the terms ``low income 
families or persons'' and ``very low-income families or 
persons'' means those families and persons whose incomes do not 
exceed the respective levels established for lower income 
families and very low-income families under the United States 
Housing Act of 1937. Notwithstanding the preceding sentence, 
the maximum income levels established for purposes of this 
title for such families and persons in the Virgin Islands shall 
not be less than the highest such levels established for 
purposes of this title for such families and persons in 
American Samoa, Guam, the Northern Mariana Islands, and the 
Trust Territory of the Pacific Islands. The temporary absence 
of a child from the home due to placement in foster care should 
not be considered in considering family composition and family 
size.
  (5)(A) For the purpose of this title, the terms ``income'' 
and ``adjusted income'' have the meanings given by sections 
3(b)(4) and 3(b)(5), respectively, of the United States Housing 
Act of 1937.
          (B) For purposes of this title, the term ``income'' 
        does not include dividends received from the Alaska 
        Permanent Fund by a person who was under the age of 18 
        years when that person qualified for the dividend.
  (6) For the purposes of this title, the term ``Indian tribe'' 
means any Indian tribe, band, group, and nation, including 
Alaska Indians, Aleuts, and Eskimos, and any Alaskan Native 
Village, of the United States, which is considered an eligible 
recipient under the Indian Self-Determination and Education 
Assistance Act (Public Law 93-638) or was considered an 
eligible recipient under chapter 67 of title 31, United States 
Code, prior to the repeal of such chapter.
  (7) For the purpose of this title, the term ``rural 
resident'' shall include a family or a person who is a renter 
of a dwelling unit in a rural area.
  (8) For the purposes of this title, the term ``adequate 
dwelling'' means a decent, safe, and sanitary dwelling unit.
  (c) In order to be eligible for the assistance authorized by 
paragraph (a), the applicant must show (1) that he is the owner 
of a farm which is without a decent, safe, and sanitary 
dwelling for himself and his family and necessary resident farm 
labor, or for the family of the operating tenant, lessee, or 
sharecropper or without other farm buildings adequate for the 
type of farming in which he engages or desires to engage or 
that he is the owner of other real estate in a rural area or a 
rural resident without an adequate dwelling or related 
facilities for his own use or buildings adequate for his 
farming operations, or that the applicant is an elderly or 
handicapped person or family in a rural area without an 
adequate dwelling or related facility for its own use or that 
he is the owner of a farm or other real estate in a rural area 
who needs refinancing of indebtedness described in clause (4) 
of subsection (a); (2) that he is without sufficient resources 
to provide the necessary housing and buildings on his own 
account; and (3) that he is unable to secure the credit 
necessary for such housing and buildings from other sources 
upon terms and conditions which he could reasonably be expected 
to fulfill. If an applicant is a State or local public agency 
or Indian tribe--
          
          (A) the provisions of clause (3) shall not apply to 
        its application; and
          (B) the applicant shall be eligible to participate in 
        any program under this title if the persons or families 
        to be served by the applicant with the assistance being 
        sought would be eligible to participate in such 
        program.
  (d) As used in this title (except in sections 503 and 
504(b)), the terms ``farm,''``farm dwelling,'' and ``farm 
housing'' shall include dwellings or other essential buildings 
of eligible applicants.
  (e) The Secretary shall establish procedures under which 
borrowers under this title are required to make periodic 
payments for the purpose of taxes, insurance, and other 
necessary expenses as the Secretary may deem appropriate. 
Notwithstanding any other provision of law, such payments shall 
not be considered public funds. The Secretary shall direct the 
disbursement of the funds at the appropriate time or times for 
the purposes for which the funds were escrowed. The Secretary 
shall pay the same rate of interest on escrowed funds as is 
required to be paid on escrowed funds held by other lenders in 
any State where State law requires payment of interest on 
escrowed funds, subject to appropriations to the extent that 
additional budget authority is necessary to carry out this 
sentence. If the prepayments made by the borrower are not 
sufficient to pay the amount due, advances may be made by the 
Secretary to pay the costs in full, which advances shall be 
charged to the account of the borrower, bear interest, and be 
payable in a timely fashion as determined by the Secretary. The 
Secretary shall notify a borrower in writing when loan payments 
are delinquent.
  (f) With respect to any limitation on the amount of any loan 
which may be made, insured, or guaranteed under this title for 
the purchase of a dwelling unit, the Secretary may increase 
such amount by up to 20 percent if such increase is necessary 
to account for the increased cost of the dwelling unit due to 
the installation of a solar energy system (as defined in 
subparagraph (3) of the last paragraph of section 2(a) of the 
National Housing Act) therein.
  (g) The programs authorized by this title shall be carried 
out, consistent with program goals and objectives so that the 
involuntary displacement of families and businesses is avoided.
  (h) The Secretary may not restrict the availability of 
assistance under this title for any alien for whom assistance 
may not be restrictedunder section 214 of the Housing and 
Community Development Act of 1980.
  (i) For the purposes of this title, the term ``development 
cost'' shall include the packaging of loan and grant 
applications and actions related thereto by public and private 
nonprofit organizations tax exempt under the Internal Revenue 
Code of 1986.
  (j) Program Transfers.--Notwithstanding any other provision 
of law, the Secretary shall not transfer any program authorized 
by this title to the Rural Development Administration.
  (k) DACA Recipient Eligibility.--
          (1) In general.--The Secretary may not prescribe 
        terms that limit eligibility for a single family 
        mortgage made, insured, or guaranteed under this title 
        because of the status of the mortgagor as a DACA 
        recipient.
          (2) DACA recipient defined.--For the purposes of this 
        paragraph, the term ``DACA recipient'' means an alien 
        who, at any time before, on, or after the date of the 
        enactment of this paragraph, is or was in deferred 
        action status pursuant to the Deferred Action for 
        Childhood Arrivals (`DACA') Program announced by the 
        Secretary of Homeland Security on June 15, 2012.

           *       *       *       *       *       *       *

                              ----------                              


               FEDERAL HOME LOAN MORTGAGE CORPORATION ACT



           *       *       *       *       *       *       *
TITLE III--FEDERAL HOME LOAN MORTGAGE CORPORATION

           *       *       *       *       *       *       *


                          mortgage operations

  Sec. 305. (a)(1) The Corporation is authorized to purchase, 
and make commitments to purchase, residential mortgages. The 
Corporation may hold and deal with, and sell or otherwise 
dispose of, pursuant to commitments or otherwise, any such 
mortgage or interest therein. The operations of the Corporation 
under this section shall be confined so far as practicable to 
residential mortgages which are deemed by the Corporation to be 
of such quality, type, and class as to meet generally the 
purchase standards imposed by private institutional mortgage 
investors. The Corporation may establish requirements, and 
impose charges or fees, which may be regarded as elements of 
pricing, for different classes of sellers or servicers, and for 
such purposes the Corporation is authorized to classify sellers 
or services according to type, size, location, assets, or, 
without limitation on the generality of the foregoing, on such 
other basis or bases of differentiation as the Corporation may 
consider necessary or appropriate to effectuate the purposes or 
provisions of this Act. The Corporation may specify 
requirements concerning among other things, (A) minimum net 
worth; (B) supervisory mechanisms; (C) warranty compensation 
mechanisms; (D) prior approval of facilities; (E) prior 
origination and servicing experience with respect to different 
types of mortgages; (F) capital contributions and substitutes; 
(G) mortgage purchase volume limits; and (H) reduction of 
mortgage purchases during periods of borrowing. With respect to 
any particular type of seller, the Corporation shall not be 
required to make available programs involving prior approval of 
mortgages, optional delivery of mortgages, and purchase of 
other than conventional mortgages to an extent greater than the 
Corporation elects to make such programs available to other 
types of eligible sellers. Any requirements specified by the 
Corporation pursuant to the preceding three sentences must bear 
a rational relationship to the purposes or provisions of this 
Act, but will not be considered discriminatory solely on the 
grounds of differential effects on types of eligible sellers. 
Insofar as is practicable, the Corporation shall make 
reasonable efforts to encourage participation in its programs 
by each type of eligible seller. Nothing in this section 
authorizes the Corporation to impose any charge or fee upon any 
mortgagee approved by the Secretary of Housing and Urban 
Development for participation in any mortgage insurance program 
under the National Housing Act solely because of such status.
  (2) No conventional mortgages secured by a property 
comprising one- to four-family dwelling units shall be 
purchased under this section if the outstanding principal 
balance of the mortgage at the time of purchase exceeds 80 per 
centum of the value of the property securing the mortgage, 
unless (A) the seller retains a participation of not less than 
10 per centum in the mortgage; (B) for such period and under 
such circumstances as the Corporation may require, the seller 
agrees to repurchase or replace the mortgage upon demand of the 
Corporation in the event that the mortgage is in default; or 
(C) that portion of the unpaid principal balance of the 
mortgage which is in excess of such 80 per centum is guaranteed 
or insured by a qualified insurer as determined by the 
Corporation. The Corporation shall not issue a commitment to 
purchase a conventional mortgage prior to the date the mortgage 
is originated, if such mortgage is eligible for purchase under 
the preceding sentence only by reason of compliance with the 
requirements of clause (A) of such sentence. The Corporation 
may purchase a conventional mortgage which was originated more 
than one year prior to the purchase date only if the seller is 
the Federal Deposit Insurance Corporation, the Resolution Trust 
Corporation, the National Credit Union Administration, or any 
other seller currently engaged in mortgage lending or investing 
activities. With respect to any transaction in which a seller 
contemporaneously sells mortgages originated more than one year 
old prior to the date of sale to the Corporation and receives 
in payment for such mortgages securities representing undivided 
interests only in those mortgages, the Corporation shall not 
impose any fee or charge upon an eligible seller which is not a 
member of a Federal Home Loan Bank which differs from that 
imposed upon an eligible seller which is such a member. The 
Corporation shall establish limitations governing the maximum 
original principal obligation of conventional mortgages that 
are purchased by it; in any case in which the Corporation 
purchases a participation interest in such a mortgage, the 
limitation shall be calculated with respect to the total 
original principal obligation of the mortgage and not merely 
with respect to the interest purchased by the Corporation. 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. The foregoing 
limitations may be increased by not to exceed 50 per centum 
with respect to properties located in Alaska, Guam, Hawaii, and 
the Virgin Islands. 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) The sale or other disposition by the Corporation of a 
mortgage under this section may be with or without recourse, 
and shall be upon such terms and conditions relating to resale, 
repurchase, guaranty, substitution, replacement, or otherwise 
as the Corporation may prescribe.
  (4)(A) The Corporation is authorized to purchase, service, 
sell, lend on the security of, and otherwise deal in (i) 
residential mortgages that are secured by a subordinate lien 
against a one- to four-family residence that is the principal 
residence of the mortgagor; and (ii) residential mortgages that 
are secured by a subordinate lien against a property comprising 
five or more family dwelling units. If the Corporation shall 
have purchased, serviced, sold, or otherwise dealt with any 
other outstanding mortgage, secured by the same residence, the 
aggregate original amount of such other mortgages and the 
mortgage authorized to be purchased, serviced, sold, or 
otherwise dealt with under this paragraph shall not exceed the 
applicable limitation determined under paragraph (2).
  (B) The Corporation shall establish limitations governing the 
maximum original principal obligation of such mortgages. In any 
case in which the Corporation purchases a participation 
interest in such a mortgage, the limitation shall be calculated 
with respect to the total original principal obligation of such 
mortgage secured by a subordinate lien and not merely with 
respect to the interest purchased by the Corporation. Such 
limitations shall not exceed (i) with respect to mortgages 
described in subparagraph (A)(i), 50 per centum of the single-
family residence mortgage limitation determined under paragraph 
(2); and (ii) with respect to mortgages described in 
subparagraph (A)(ii), the applicable limitation determined 
under paragraph (2).
  (C) No subordinate mortgage against a one- to four-family 
residence shall be purchased by the Corporation if the total 
outstanding indebtedness secured by the property as a result of 
such mortgage exceeds 80 per centum of the value of such 
property unless (i) that portion of such total outstanding 
indebtedness that exceeds such 80 per centum is guaranteed or 
insured by a qualified insurer as determined by the 
Corporation; (ii) the seller retains a participation of not 
less than 10 per centum in the mortgage; or (iii) for such 
period and under such circumstances as the Corporation may 
require, the seller agrees to repurchase or replace the 
mortgage upon demand of the Corporation in the event that the 
mortgage is in default. The Corporation shall not issue a 
commitment to purchase a subordinate mortgage prior to the date 
the mortgage is originated, if such mortgage is eligible for 
purchase under the preceding sentence only by reason of 
compliance with the requirements of clause (iii) of such 
sentence.
  (5) The Corporation is authorized to lend on the security of, 
and to make commitments to lend on the security of, any 
mortgage that the Corporation is authorized to purchase under 
this section. The volume of the Corporation's lending 
activities and the establishment of its loan ratios, interest 
rates, maturities, and charges or fees in its secondary market 
operations under this paragraph, shall be determined by the 
Corporation from time to time; and such determinations shall be 
consistent with the objectives that the lending activities 
shall be conducted on such terms as will reasonably prevent 
excessive use of the Corporation's facilities, and that the 
operations of the Corporation under this paragraph shall be 
within its income derived from such operations and that such 
operations shall be fully self-supporting. The corporation 
shall not be permitted to use its lending authority under this 
paragraph (A) to advance funds to a mortgage seller on an 
interim basis, using mortgage loans as collateral, pending the 
sale of the mortgages in the secondary market; or (B) to 
originate mortgage loans. Notwithstanding any Federal, State, 
or other law to the contrary, the Corporation is hereby 
empowered, in connection with any loan under this paragraph, 
whether before or after any default, to provide by contract 
with the borrower for the settlement or extinguishment, upon 
default, of any redemption, equitable, legal, or other right, 
title, or interest of the borrower in any mortgage or mortgages 
that constitute the security for the loan; and with respect to 
any such loan, in the event of default and pursuant otherwise 
to the terms of the contract, the mortgages that constitute 
such security shall become the absolute property of the 
Corporation.
  (6) DACA recipient eligibility.--
          (A) In general.--The Corporation may not condition 
        purchase of a single-family residence mortgage by the 
        corporation under this subsection on the status of the 
        borrower as a DACA recipient.
          (B) DACA recipient defined.--For the purposes of this 
        subsection, the term ``DACA recipient'' means an alien 
        who, at any time before, on, or after the date of the 
        enactment of this subsection, is or was in deferred 
        action status pursuant to the Deferred Action for 
        Childhood Arrivals (``DACA'') Program announced by the 
        Secretary of Homeland Security on June 15, 2012.
  (b) Notwithstanding any other law, authority to enter into 
and to perform and carry out any transactions or matter 
referred to in this section is conferred on any Federal home 
loan bank, Resolution Trust Corporation, the Federal Deposit 
Insurance Corporation, the National Credit Union 
Administration, any Federal savings and loan association, any 
Federal home loan bank member, and any other financial 
institution the deposits or accounts of which are insured by 
any agency of the United States to the extent that Congress has 
the power to confer such authority.
  (c) The Corporation may not implement any new program (as 
such term is defined in section 1303 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992) before 
obtaining the approval of the Secretary under section 1322 of 
such Act.
  (d)(1) Definition.--In this subsection, the term ``credit 
score'' means a numerical value or a categorization created by 
a third party derived from a statistical tool or modeling 
system used by a person who makes or arranges a loan to predict 
the likelihood of certain credit behaviors, including default.
  (2) Use of credit scores.--The Corporation shall condition 
purchase of a residential mortgage by the Corporation under 
this section on the provision of a credit score for the 
borrower only if--
          (A) the credit score is derived from any credit 
        scoring model that has been validated and approved by 
        the Corporation under this subsection; and
          (B) the Corporation provides for the use of the 
        credit score by all of the automated underwriting 
        systems of the Corporation and any other procedures and 
        systems used by the Corporation to purchase residential 
        mortgages that use a credit score.
  (3) Validation and approval process.--The Corporation shall 
establish a validation and approval process for the use of 
credit score models, under which the Corporation may not 
validate and approve a credit score model unless the credit 
score model--
          (A) satisfies minimum requirements of integrity, 
        reliability, and accuracy;
          (B) has a historical record of measuring and 
        predicting default rates and other credit behaviors;
          (C) is consistent with the safe and sound operation 
        of the corporation;
          (D) complies with any standards and criteria 
        established by the Director of the Federal Housing 
        Finance Agency under section 1328(1) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act 
        of 1992; and
          (E) satisfies any other requirements, as determined 
        by the Corporation.
  (4) Replacement of credit score model.--If the Corporation 
has validated and approved 1 or more credit score models under 
paragraph (3) and the Corporation validates and approves an 
additional credit score model, the Corporation may determine 
that--
          (A) the additional credit score model has replaced 
        the credit score model or credit score models 
        previously validated and approved; and
          (B) the credit score model or credit score models 
        previously validated and approved shall no longer be 
        considered validated and approved for the purposes of 
        paragraph (2).
  (5) Public disclosure.--Upon establishing the validation and 
approval process required under paragraph (3), the Corporation 
shall make publicly available a description of the validation 
and approval process.
  (6) Application.--Not later than 30 days after the effective 
date of this subsection, the Corporation shall solicit 
applications from developers of credit scoring models for the 
validation and approval of those models under the process 
required under paragraph (3).
  (7) Timeframe for determination; notice.--
          (A) In general.--The Corporation shall make a 
        determination with respect to any application submitted 
        under paragraph (6), and provide notice of that 
        determination to the applicant, before a date 
        established by the Corporation that is not later than 
        180 days after the date on which an application is 
        submitted to the Corporation.
          (B) Extensions.--The Director of the Federal Housing 
        Finance Agency may authorize not more than 2 extensions 
        of the date established under subparagraph (A), each of 
        which shall not exceed 30 days, upon a written request 
        and a showing of good cause by the Corporation.
          (C) Status notice.--The Corporation shall provide 
        notice to an applicant regarding the status of an 
        application submitted under paragraph (6) not later 
        than 60 days after the date on which the application 
        was submitted to the Corporation.
          (D) Reasons for disapproval.--If an application 
        submitted under paragraph (6) is disapproved, the 
        Corporation shall provide to the applicant the reasons 
        for the disapproval not later than 30 days after a 
        determination is made under this paragraph.
  (8) Authority of director.--If the Corporation elects to use 
a credit score under this subsection, the Director of the 
Federal Housing Finance Agency shall require the Corporation to 
periodically review the validation and approval process 
required under paragraph (3) as the Director determines 
necessary to ensure that the process remains appropriate and 
adequate and complies with any standards and criteria 
established pursuant to section 1328(1) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992.
  (9) Extension.--If, as of the effective date of this 
subsection, a credit score model has not been approved under 
paragraph (3), the Corporation may use a credit score model 
that was in use before the effective date of this subsection, 
if necessary to prevent substantial market disruptions, until 
the earlier of--
          (A) the date on which a credit score model is 
        validated and approved under paragraph (3); or
          (B) the date that is 2 years after the effective date 
        of this subsection.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    H.R. 3154, the Homeownership for Dreamers Act, would 
prohibit the Federal Housing Administration (FHA), as well as 
other government mortgage-financing entities, from limiting 
eligibility on the basis of Deferred Action for Childhood 
Arrivals (DACA) status, if a potential borrower meets all other 
eligibility requirements.
    Contrary to some unsubstantiated reports, FHA currently has 
no rule, policy, or guidance in place that singles out those 
with DACA status for different or discriminatory treatment. 
FHA's mortgage eligibility requirements are outlined in its 
FHA's Single Family Housing Policy Handbook. The Handbook's 
provisions regarding legal residency status, which were written 
first in 2003 and then later affirmed in 2014 by the Obama 
Administration, state that FHA mortgage eligibility is based 
upon an individual's lawful residency, not on their status as a 
DACA recipient. No changes have been made to the FHA handbook 
since 2014.
    Furthermore, the FHA Handbook states that ``U.S. 
citizenship is not required for Mortgage eligibility'' however 
``Non-U.S. citizens without lawful residency in the U.S. are 
not eligible for FHA-insured Mortgages.'' In establishing DACA 
on June 15, 2012, then-Secretary of Homeland Security Janet 
Napolitano made clear that DACA is an exercise of 
``prosecutorial discretion'' and ``confers no substantive 
right, immigration status, or pathway to citizenship.'' This 
means that any individual who is not a lawful resident, with or 
without DACA status, is ineligible for FHA mortgage insurance, 
a policy carried forward from the previous two administrations. 
Additionally, by nature of their temporary legal status, DACA 
recipients also fail to meet FHA's requisite future income 
verification standard. DACA status provides for a two-year 
deferral only, meaning a DACA recipient might be ordered to 
leave the country thereafter. The FHA Handbook also requires 
applicants to have three years of expected income to qualify.
    DACA status and how the courts should adjudicate the 
individual circumstances of DACA recipients are issues that 
fall outside the scope of the Financial Services Committee's 
jurisdiction. Committee Republicans believe that it is 
impractical to deal with issues surrounding an individual's 
immigration status in a piecemeal approach. Therefore, any 
changes to the parameters or continuation of DACA should be 
carried out by the committees of jurisdiction based on 
comprehensive approach to the underlying problem, and not 
individual efforts based on unsubstantiated reports like H.R. 
3154.
                                   David Kustoff.
                                   Lance Gooden.
                                   Scott Tipton.
                                   Trey Hollingsworth.
                                   John W. Rose.
                                   Barry Loudermilk.
                                   Ted Budd.
                                   Warren Davidson.
                                   Lee M. Zeldin.
                                   Andy Barr.
                                   Ann Wagner.
                                   Blaine Luetkemeyer.
                                   Peter T. King.
                                   Sean P. Duffy.
                                   Roger Williams.
                                   Bill Steil.
                                   Denver Riggleman.
                                   Tom Emmer.
                                   French Hill.
                                   Patrick T. McHenry.
                                   Alexander X. Mooney.
                                   Frank D. Lucas.
                                   Bill Huizenga.
                                   Steve Stivers.
                                   Bill Posey.

                                  [all]