SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Residential Construction Lending 
Act''.

SEC. 2. RESIDENTIAL CONSTRUCTION LOAN GUARANTEE PROGRAM.

    (a) Establishment.--There is established within the Department of 
the Treasury a program to be known as the ``Residential Construction 
Loan Guarantee Program'' (hereinafter referred to in this section as 
the ``Loan Guarantee Program'').
    (b) Loan Guarantee Program.--
            (1) Purpose.--The purpose of the Loan Guarantee Program is 
        to guarantee loans made to eligible home building companies for 
        viable building projects.
            (2) Application.--An insured depository institution that 
        wishes to make loans that are guaranteed under the Loan 
        Guarantee Program may submit an application to the Secretary in 
        such form and manner and containing such information as the 
        Secretary may require.
            (3) Selection criteria.--
                    (A) In general.--The Secretary shall approve any 
                insured depository institution submitting a full and 
                complete application under paragraph (2) for 
                participation in the Loan Guarantee Program, and shall 
                guarantee loans on a first-come-first-served basis.
                    (B) Submission of loans.--Insured depository 
                institutions approved for participation in the Loan 
                Guarantee Program shall submit each loan made by such 
                institution as part of the Loan Guarantee Program to 
                the Secretary so the Secretary may confirm that such 
                loan complies with the requirements of this section.
            (4) Oversight.--
                    (A) Loan terms.--Not later than 7 days after a loan 
                guaranteed under the Loan Guarantee Program is 
                originated, the insured depository institution making 
                such loan shall submit all information about the terms 
                and conditions of such loan to the Secretary.
                    (B) Suspension and termination authority.--
                Notwithstanding paragraph (3), the Secretary shall, not 
                less than yearly, review all of the loans made by each 
                insured depository institution that are guaranteed 
                under the Loan Guarantee Program, and may suspend or 
                terminate any insured depository institution's future 
                participation in the Loan Guarantee Program if the 
                Secretary finds that such institution has engaged in 
                fraud or abuse with respect to the Loan Guarantee 
                Program, or has consistently made loans guaranteed 
                under the Loan Guarantee Program that are not repaid by 
                the borrower in accordance with the terms of the loan.
            (5) Loan eligibility.--A loan may only be guaranteed under 
        the Loan Guarantee Program if it meets the following criteria:
                    (A) Viable building project.--The loan must be made 
                for a viable building project, as determined by the 
                Secretary. In making such determination, the Secretary 
                shall consider housing demand, local government 
                support, percentage of workforce, and speculative 
                units.
                    (B) Eligible home building company.--The loan must 
                be made to an eligible home building company, as 
                determined by the Secretary. In making such 
                determination, the Secretary shall consider whether 
                such company is creditworthy, reputable, and has a 
                record of successful residential building projects.
                    (C) Loan guarantee amount limitation.--The eligible 
                home building company, or its principals, must have a 
                minimum net worth equal to the loan amount to be 
                guaranteed.
                    (D) Use of loan.--The loan may only be used for the 
                acquisition, development, and construction of 
                residential developments that have locally approved 
                development plans and that create immediate job 
                opportunities.
                    (E) Term requirements.--
                            (i) In general.--The term of the loan shall 
                        be for no more than 5 years, but may have an 
                        option to extend.
                            (ii) Loan amount limitations.--The loan 
                        shall be for an amount not to exceed--
                                    (I) 75 percent loan-to-value on the 
                                land;
                                    (II) 100 percent for construction 
                                and development costs; and
                                    (III) 80 percent of the market 
                                value of the building project.
                    (F) Interest rates.--Notwithstanding the provisions 
                of the constitution of any State or the laws of any 
                State limiting the rate or amount of interest which may 
                be charged, taken, received, or reserved, the maximum 
                legal rate of interest on the loan may not 
                substantively differ from the current average market 
                yield on outstanding marketable obligations of similar 
                privately held loans with remaining periods to maturity 
                comparable to such loan.
            (6) Multiple guarantees permitted; aggregate dollar amount 
        limitation.--A single eligible home building company is 
        permitted to have more than one loan guaranteed under the Loan 
        Guarantee Program, but the aggregate amount of all such loans 
        guaranteed for a single eligible home building company may not 
        exceed the net worth of such company. The Secretary may exempt 
        an eligible home building company from the net worth limitation 
        of this paragraph if the Secretary determines doing so will 
        advance the purpose of this Loan Guarantee Program.
            (7) Government guarantee.--
                    (A) Level of participation.--Loans guaranteed under 
                the Loan Guarantee Program shall be guaranteed at 80 
                percent of the loan amount.
                    (B) Payment of accrued interest.--
                            (i) In general.--Any insured depository 
                        institution making a claim for payment on the 
                        guaranteed portion of a loan guaranteed under 
                        the Loan Guarantee Program shall be paid the 
                        accrued interest due on the loan from the 
                        earliest date of default to the date of payment 
                        of the claim at a rate not to exceed the rate 
                        of interest on the loan on the date of default, 
                        minus one percent.
                            (ii) Loans sold on secondary market.--If a 
                        loan described under clause (i) is sold on the 
                        secondary market, the amount of interest paid 
                        to an insured depository institution described 
                        in that clause from the earliest date of 
                        default to the date of payment of the claim 
                        shall be no more than the agreed upon rate, 
                        minus one percent.
                            (iii) Interest rate.--The rate of interest 
                        to be paid on a claim for payment on the 
                        guaranteed portion of a loan guaranteed under 
                        the Loan Guarantee Program shall be established 
                        commensurate with Federal Housing 
                        Administration rates, based on safety and 
                        soundness.
            (8) One-third of guarantees to be made in areas with 
        greatest unmet need.--Notwithstanding any other provision of 
        this section, not less than one-third of the funds made 
        available under this section to guarantee loans shall be used 
        to guaranteed loans in areas of the United States that have the 
        greatest unmet need for residential construction financing, as 
        determined by the Secretary.
            (9) Regulations.--The Secretary shall promulgate any 
        regulations needed to carry out this section through a notice 
        and public comment period of not more than 60 days.
    (c) Definitions.--For purposes of this section:
            (1) Insured depository institution.--The term ``insured 
        depository institution'' has the meaning given such term under 
        section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(c)(2)).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary $15,000,000,000 to carry out this 
section.
    (e) Termination of Authority.--The Secretary's authority to make 
new loan guarantees under the Loan Guarantee Program shall terminate 
after the 3-year period beginning on the date of the enactment of this 
section.
Residential Construction Lending Act - Establishes within the Department of the Treasury a three-year Residential Construction Loan Guarantee Program to guarantee loans made to eligible home building companies for viable building projects.

Directs the Secretary of the Treasury to: (1) approve any insured depository institution submitting a full and complete application for participation in the Program; (2) guarantee the loans on a first-come-first-served basis; and (3) review yearly all loans made by each insured depository institution that are guaranteed under the Program.

Authorizes the Secretary to suspend or terminate any insured depository institution's future participation in the Program if that institution has engaged in fraud or abuse with respect to it, or has consistently made loans guaranteed under the Program that are not repaid by the borrower in accordance with the loan terms.



Sets forth loan eligibility criteria that include restricting loans to the acquisition, development, and construction of residential developments that have locally approved development plans and that create immediate job opportunities.

Permits multiple loan guarantees, with a federal guarantee at 80% of each loan.

Requires one-third of guarantees to be made in areas with the greatest unmet need for residential construction financing.
To establish the Residential Construction Loan Guarantee Program to guarantee loans made to eligible home building companies for viable building projects.