Protecting Habitat Homeownership Act

Summary: Protecting Habitat Homeownership Act - Amends the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974 to exempt residential mortgage loans originated by non-profit low-income housing providers from certain minimum loan standards as well as appraisal, servicing, and billing requirements. Defines &quot;non-profit low-income housing provider&quot; as a tax-exempt charitable organization that does not engage in the business of a loan originator or mortgage broker but does make residential mortgage loans: (1) to promote or facilitate homeownership for poor or low-income, disabled, or other disadvantaged persons or families; and (2) at interest rates lower than the bank prime loan rate; or (3) that are, after adjusting for inflation, no-interest loans or loans with interest rates significantly below the interest rates for loans for purchase of single-family housing generally available in the market. Prescribes additional requirements.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Habitat Homeownership 
Act''.

SEC. 2. EXEMPTIONS.

    (a) Truth in Lending Act.--The Truth in Lending Act (15 U.S.C. 1601 
et seq.) is amended--
            (1) in section 128(f) (15 U.S.C. 1638(f))--
                    (A) in paragraph (3)--
                            (i) by striking ``apply to any fixed rate'' 
                        and inserting the following: ``apply to--
                    ``(A) any fixed rate'';
                            (ii) by striking the period and inserting 
                        ``; or''; and
                            (iii) by adding at the end the following:
                    ``(B) any residential mortgage loan originated by a 
                non-profit low-income housing provider.''; and
                    (B) by adding at the end the following:
            ``(4) Non-profit low-income housing provider defined.--For 
        purposes of this subsection, the term `non-profit low-income 
        housing provider' means an organization that--
                    ``(A) is exempt from taxation pursuant to section 
                501(c)(3) of the Internal Revenue Code of 1986;
                    ``(B) makes residential mortgage loans--
                            ``(i) for the purpose of promoting or 
                        facilitating homeownership for poor or low-
                        income, disabled, or other disadvantaged 
                        persons or families; and
                            ``(ii) sets interest rates on such loans 
                        that--
                                    ``(I) are lower than the bank prime 
                                loan rate, as determined under the 
                                Federal Reserve Statistical Release of 
                                selected interest rates (commonly 
                                referred to as the H.15) by the Board 
                                of Governors of the Federal Reserve 
                                System, for the last day of the most 
                                recent weekly release of such rates; or
                                    ``(II) are, after adjusting for 
                                inflation, no-interest loans or loans 
                                with interest rates significantly below 
                                the interest rates for loans for 
                                purchase of single-family housing 
                                generally available in the market;
                    ``(C) except as described under subparagraph (B), 
                does not engage in the business of a loan originator or 
                mortgage broker;
                    ``(D) conducts its activities in a manner that 
                serves public or charitable purposes;
                    ``(E) receives funding and revenue and charges fees 
                in a manner that does not incentivize the organization 
                or its employees to act other than in the best 
                interests of its clients;
                    ``(F) compensates employees in a manner that does 
                not incentivize employees to act other than in the best 
                interests of its clients; and
                    ``(G) meets such other requirements as the Bureau 
                determines appropriate.''.
            (2) in section 129C(a) (15 U.S.C. 1639c(a)), by adding at 
        the end the following:
            ``(10) Exemption for non-profit low-income housing 
        providers.--This subsection shall not apply to a residential 
        mortgage loan made by a non-profit low-income housing provider 
        (as such term is defined under section 128(f)(4)).'';
            (3) in section 129E (15 U.S.C. 1638e), by adding at the end 
        the following:
    ``(l) Exemption for Non-Profit Low-Income Housing Providers.--This 
section shall not apply to a residential mortgage loan made by a non-
profit low-income housing provider (as such term is defined under 
section 128(f)(4)), or any services provided with respect to such a 
mortgage loan.''; and
            (4) in section 129H (15 U.S.C. 1638h), by adding at the end 
        the following:
    ``(g) Exemption for Non-Profit Low-Income Housing Providers.--This 
section shall not apply to a residential mortgage loan made by a non-
profit low-income housing provider (as such term is defined under 
section 128(f)(4)).''.
    (b) Real Estate Settlement Procedures Act of 1974.--Section 6(k) of 
the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(k)) 
is amended by adding at the end the following:
            ``(3) Exemption for non-profit low-income housing 
        providers.--This subsection and subsections (l) and (m) shall 
        not apply to the servicing of a residential mortgage loan made 
        by a non-profit low-income housing provider (as such term is 
        defined under section 128(f)(4) of the Truth in Lending 
        Act).''.