# Housing and Community Development Act of 1992/Title XIII/Subtitle A/Part 2/Subpart B
## SUBPART B—HOUSING GOALS
### SEC. 1331. ESTABLISHMENT.

    (a) IN GENERAL—
       The Secretary shall establish, by regulation, housing goals under this subpart for each enterprise. The housing goals shall include a low- and moderate-income housing goal pursuant to section 1332, a special affordable housing goal pursuant to section 1333, and a central cities, rural areas, and other underserved areas housing goal pursuant to section 1334. The Secretary shall implement this subpart in a manner consistent with section 301(3) of the Federal National Mortgage Association Charter Act and section 301(b)(3) of the Federal Home Loan Mortgage Corporation Act.
    (b) CONSIDERATION OF UNITS IN MULTIFAMILY HOUSING—
       In establishing any goal under this subpart, the Secretary may take into consideration the number of housing units financed by any mortgage on multifamily housing purchased by an enterprise.
    (c) ADJUSTMENT OF HOUSING GOALS—
       Except as otherwise provided in this title, from year to year the Secretary may, by regulation, adjust any housing goal established under this subpart.

### SEC. 1332. LOW- AND MODERATE-INCOME HOUSING GOAL.

    (a) IN GENERAL—
       The Secretary shall establish an annual goal for the purchase by each enterprise of mortgages on housing for low- and moderate-income families. The Secretary may establish separate specific subgoals within the goal under this section and such subgoals shall not be enforceable under the provisions of section 1336, any other provision of this title, or any provision of the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act.
    (b) FACTORS TO BE APPLIED—
       In establishing the goal under this section, the Secretary shall consider—
          (1) national housing needs;
          (2) economic, housing, and demographic conditions;
          (3) the performance and effort of the enterprises toward achieving the low- and moderate-income housing goal in previous years;
          (4) the size of the conventional mortgage market serving low- and moderate-income families relative to the size of the overall conventional mortgage market;
          (5) the ability of the enterprises to lead the industry in making mortgage credit available for low- and moderate-income families; and
          (6) the need to maintain the sound financial condition of the enterprises.
    (c) USE OF BORROWER AND TENANT INCOME—
          (1) IN GENERAL—
             The Secretary shall monitor the performance of each enterprise in carrying out this section and shall evaluate such performance (for purposes of section 1336) based on—
                (A) in the case of an owner-occupied dwelling, the mortgagor's income at the time of origination of the mortgage; or
                (B) in the case of a rental dwelling—
                      (i) the income of the prospective or actual tenants of the property, where such data are available; or
                      (ii) the rent levels affordable to low- and moderate-income families, where the data referred to in clause (i) are not available.
          (2) AFFORDABILITY—
             For the purpose of paragraph (1)(B)(ii), a rent level shall be considered affordable if it does not exceed 30 percent of the maximum income level of the income categories referred to in this section, with appropriate adjustments for unit size as measured by the number of bedrooms.
    (d) TRANSITION—
          (1) INTERIM TARGET—
             Notwithstanding any other provision of this section, during the 2-year period beginning on January 1, 1993, the annual target under this section for low- and moderate-income mortgage purchases for each enterprise shall be 30 percent of the total number of dwelling units financed by mortgage purchases of the enterprise.
          (2) INTERIM GOAL—
             During such 2-year period, the Secretary shall establish a separate annual goal for each enterprise, the achievement of which shall require—
                (A) an enterprise that is not meeting the target under paragraph (1) upon January 1, 1993, to improve its performance relative to such target annually and, to the maximum extent feasible, to meet such target at the conclusion of such 2-year period; and
                (B) an enterprise that is meeting the target under paragraph (1) upon January 1, 1993, to improve its performance relative to the target.
          (3) IMPLEMENTATION—
             The Secretary shall establish any requirements necessary to implement the transition provisions under this subsection by notice, after providing the enterprises with an opportunity to review and comment not less than 30 days before the issuance of such notice. Such notice shall be issued not later than the expiration of the 90-day period beginning upon the date of the enactment of this Act and shall be effective upon issuance.

### SEC. 1333. SPECIAL AFFORDABLE HOUSING GOAL.

    (a) ESTABLISHMENT—
          (1) IN GENERAL—
             The Secretary shall establish a special annual goal designed to adjust the purchase by each enterprise of mortgages on rental and owner-occupied housing to meet the then-existing unaddressed needs of, and affordable to, low-income families in low-income areas and very low-income families. The special affordable housing goal established under this section for an enterprise shall not be less than 1 percent of the dollar amount of the mortgage purchases by the enterprise for the previous year.
          (2) STANDARDS—
             In establishing the special affordable housing goal for an enterprise, the Secretary shall consider—
                (A) data submitted to the Secretary in connection with the special affordable housing goal for previous years;
                (B) the performance and efforts of the enterprise toward achieving the special affordable housing goal in previous years;
                (C) national housing needs within the categories set forth in this section;
                (D) the ability of the enterprise to lead the industry in making mortgage credit available for low-income and very low-income families; and
                (E) the need to maintain the sound financial condition of the enterprise.
    (b) FULL CREDIT ACTIVITIES—
          (1) IN GENERAL—
             The Secretary shall give full credit toward achievement of the special affordable housing goal under this section (for purposes of section 1336) to the following activities:
                (A) FEDERALLY RELATED MORTGAGES—
                   The purchase or securitization of federally insured or guaranteed mortgages, if—
                      (i) such mortgages cannot be readily securitized through the Government National Mortgage Association or any other Federal agency;
                      (ii) participation of the enterprise substantially enhances the affordability of the housing subject to such mortgages; and
                      (iii) the mortgages involved are on housing that otherwise qualifies under such goal to be considered for purposes of such goal.
                (B) PORTFOLIOS—
                   The purchase or refinancing of existing, seasoned portfolios of loans, if—
                      (i) the seller is engaged in a specific program to use the proceeds of such sales to originate additional loans that meet such goal; and
                      (ii) such purchases or refinancings support additional lending for housing that otherwise qualifies under such goal to be considered for purposes of such goal.
                (C) RTC AND FDIC LOANS—
                   The purchase of direct loans made by the Resolution Trust Corporation or the Federal Deposit Insurance Corporation, if such loans—
                      (i) are not guaranteed by such agencies themselves or other Federal agencies;
                      (ii) are made with recourse provisions similar to those offered through private mortgage insurance or other conventional sellers; and
                      (iii) are made for the purchase of housing that otherwise qualifies under such goal to be considered for purposes of such goal.
          (2) EXCLUSION—
             No credit toward the achievement of the special affordable housing goal may be given to the purchase or securitization of mortgages associated with the refinancing of the existing enterprise portfolios.
    (c) USE OF BORROWER AND TENANT INCOME—
          (1) IN GENERAL—
             The Secretary shall monitor the performance of each enterprise in carrying out this section and shall evaluate such performance (for purposes of section 1336) based on—
                (A) in the case of an owner-occupied dwelling, the mortgagor's income at the time of origination of the mortgage; or
                (B) in the case of a rental dwelling—
                      (i) the income of the prospective or actual tenants of the property, where such data are available; or
                      (ii) the rent levels affordable to low-income and very low-income families, where the data referred to in clause (i) are not available.
          (2) AFFORDABILITY—
             For the purpose of paragraph (1)(B)(ii), a rent level shall be considered affordable if it does not exceed 30 percent of the maximum income level of the income categories referred to in this section, with appropriate adjustments for unit size as measured by the number of bedrooms.
    (d) TRANSITION—
          (1) FNMA MORTGAGE PURCHASES—
             Notwithstanding any other provision of this section, during the 2-year period beginning on January 1, 1993, the special affordable housing goal for the Federal National Mortgage Association shall include mortgage purchases of not less than $2,000,000,000 (for such 2-year period), with one-half of such purchases consisting of mortgages on single family housing and one-half consisting of mortgages on multifamily housing.
          (2) FHLMC MORTGAGE PURCHASES—
             Notwithstanding any other provision of this section, during the 2-year period beginning on January 1, 1993, the special affordable housing goal for the Federal Home Loan Mortgage Corporation shall include mortgage purchases of not less than $1,500,000,000 (for such 2-year period), with one-half of such purchases consisting of mortgages on single family housing and one-half consisting of mortgages on multifamily housing.
          (3) INCOME CHARACTERISTICS FOR MORTGAGE PURCHASES—
                (A) MULTIFAMILY MORTGAGES—
                   The special affordable housing goals established under paragraphs (1) and (2) shall provide that, of mortgages on multifamily housing that are purchased and contribute to the achievement of such goals—
                      (i) 45 percent shall be mortgages on multifamily housing affordable to low-income families; and
                      (ii) 55 percent shall be mortgages on multifamily housing in which—
                         (I) at least 20 percent of the units are affordable to families whose incomes do not exceed 50 percent of the median income for the area; or
                         (II) at least 40 percent of the units are affordable to very low-income families.
                (B) SINGLE FAMILY MORTGAGES—
                   The special affordable housing goals established under paragraphs (1) and (2) shall provide that, of mortgages on single family housing that are purchased and contribute to the achievement of such goals—
                      (i) 45 percent shall be mortgages of low-income families who live in census tracts in which the median income does not exceed 80 percent of the area median income; and
                      (ii) 55 percent shall be mortgages of very low-income families.
                (C) COMPLIANCE WITH SPECIAL AFFORDABLE HOUSING GOALS—
                   Only the portion of mortgages on multifamily housing purchased by an enterprise that are attributable to units affordable to low-income families shall contribute to the achievement of the special affordable housing goals under subparagraph (A)(ii).
          (4) IMPLEMENTATION—
             The Secretary shall establish any requirements necessary to implement the transition provisions under this subsection by notice, after providing the enterprises with an opportunity to review and comment not less than 30 days before the issuance of such notice. Such notice shall be issued not later than the expiration of the 90-day period beginning upon the date of the enactment of this Act and shall be effective upon issuance.

### SEC. 1334. CENTRAL CITIES, RURAL AREAS, AND OTHER UNDERSERVED AREAS HOUSING GOAL.

    (a) IN GENERAL—
       The Secretary shall establish an annual goal for the purchase by each enterprise of mortgages on housing located in central cities, rural areas, and other underserved areas. The Secretary may establish separate subgoals within the goal under this section and such subgoals shall not be enforceable under the provisions of section 1336, any other provision of this title, or any provision of the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act.
    (b) FACTORS TO BE APPLIED—
       In establishing the housing goal under this section, the Secretary shall consider—
          (1) urban and rural housing needs and the housing needs of underserved areas;
          (2) economic, housing, and demographic conditions;
          (3) the performance and efforts of the enterprises toward achieving the central cities, rural areas, and other underserved areas housing goal in previous years;
          (4) the size of the conventional mortgage market for central cities, rural areas, and other underserved areas relative to the size of the overall conventional mortgage market;
          (5) the ability of the enterprises to lead the industry in making mortgage credit available throughout the United States, including central cities, rural areas, and other underserved areas; and
          (6) the need to maintain the sound financial condition of the enterprises.
    (c) LOCATION OF PROPERTIES—
       The Secretary shall monitor the performance of each enterprise in carrying out this section and shall evaluate such performance (for purposes of section 1336) based on the location of the properties subject to mortgages purchased by each enterprise.
    (d) TRANSITION—
          (1) INTERIM TARGET—
             Notwithstanding any other provision of this section, during the 2-year period beginning on January 1, 1993, the annual target under this section for purchases by each enterprise of mortgages on housing located in central cities shall be 30 percent of the total number of dwelling units financed by mortgage purchases of the enterprise.
          (2) INTERIM GOAL—
             During such 2-year period, the Secretary shall establish a separate annual goal for each enterprise, the achievement of which shall require—
                (A) an enterprise that is not meeting the target under paragraph (1) upon January 1, 1993, to improve its performance relative to such target annually and, to the maximum extent feasible, to meet such target at the conclusion of such 2-year period; and
                (B) an enterprise that is meeting the target under paragraph (1) upon January 1, 1993, to improve its performance relative to the target.
          (3) DEFINITION OF CENTRAL CITY—
             For purposes of this subsection, the term `central city' means any political subdivision designated as a central city by the Office of Management and Budget.
          (4) IMPLEMENTATION—
             The Secretary shall establish any requirements necessary to implement the transition provisions under this subsection by notice, after providing the enterprises with an opportunity to review and comment not less than 30 days before the issuance of such notice. Such notice shall be issued not later than the expiration of the 90-day period beginning upon the date of the enactment of this Act and shall be effective upon issuance.

### SEC. 1335. OTHER REQUIREMENTS.

    To meet the low- and moderate-income housing goal under section 1332, the special affordable housing goal under section 1333, and the central cities, rural areas, and other underserved areas housing goal under section 1334, each enterprise shall—
          (1) design programs and products that facilitate the use of assistance provided by the Federal Government and State and local governments;
          (2) develop relationships with nonprofit and for-profit organizations that develop and finance housing and with State and local governments, including housing finance agencies;
          (3) take affirmative steps to—
                (A) assist primary lenders to make housing credit available in areas with concentrations of low-income and minority families, and
                (B) assist insured depository institutions to meet their obligations under the Community Reinvestment Act of 1977,
             which shall include developing appropriate and prudent underwriting standards, business practices, repurchase requirements, pricing, fees, and procedures; and
          (4) develop the institutional capacity to help finance low- and moderate-income housing, including housing for first-time homebuyers.

### SEC. 1336. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

    (a) IN GENERAL—
          (1) AUTHORITY—
             The Secretary shall monitor and enforce compliance with the housing goals established under sections 1332, 1333, and 1334, as provided in this section.
          (2) GUIDELINES—
             The Secretary shall establish guidelines to measure the extent of compliance with the housing goals, which may assign full credit, partial credit, or no credit toward achievement of the housing goals to different categories of mortgage purchase activities of the enterprises, based on such criteria as the Secretary deems appropriate.
          (3) EXTENT OF COMPLIANCE—
             In determining compliance with the housing goals established under this subpart, the Secretary—
                (A) shall consider any single mortgage purchased by an enterprise as contributing to the achievement of each housing goal for which such mortgage purchase qualifies; and
                (B) may take into consideration the number of housing units financed by any mortgage on housing purchased by an enterprise.
    (b) NOTICE AND DETERMINATION OF FAILURE TO MEET GOALS—
          (1) NOTICE—
             If the Secretary determines that an enterprise has failed, or that there is a substantial probability that an enterprise will fail, to meet any housing goal established under section 1332, 1333, or 1334, the Secretary shall provide written notice to the enterprise of such a determination, the reasons for such determination, the requirement to submit a housing plan under subsection (c) of this section, and the information on which the Secretary based the determination or imposed such requirement.
          (2) RESPONSE PERIOD—
                (A) IN GENERAL—
                   During the 30-day period beginning on the date that an enterprise is provided notice under paragraph (1), the enterprise may submit to the Secretary any written information that the enterprise considers appropriate for consideration by the Secretary in determining whether such failure has occurred or whether the achievement of such goal was or is feasible.
                (B) EXTENDED PERIOD—
                   The Secretary may extend the period under subparagraph (A) for good cause for not more than 30 additional days.
                (C) SHORTENED PERIOD—
                   The Secretary may shorten the period under subparagraph (A) for good cause.
                (D) FAILURE TO RESPOND—
                   The failure of an enterprise to provide information during the 30-day period under this paragraph (as extended or shortened) shall waive any right of the enterprise to comment on the proposed determination or action of the Secretary.
          (3) CONSIDERATION OF INFORMATION AND DETERMINATION—
                (A) IN GENERAL—
                   After the expiration of the response period under paragraph (2) or upon receipt of information provided during such period by the enterprise, whichever occurs earlier, the Secretary shall determine (i) whether the enterprise has failed, or there is a substantial probability that the enterprise will fail, to meet the housing goal, and (ii) whether (taking into consideration market and economic conditions and the financial condition of the enterprise) the achievement of the housing goal was or is feasible.
                (B) CONSIDERATIONS—
                   In making such determinations, the Secretary shall take into consideration any relevant information submitted by the enterprise during the response period.
                (C) NOTICE—
                   The Secretary shall provide written notice to the enterprise, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate, of—
                      (i) each determination that an enterprise has failed, or that there is a substantial probability that the enterprise will fail, to meet a housing goal;
                      (ii) each determination that the achievement of a housing goal was or is feasible; and
                      (iii) the reasons for each such determination.
                   Such notice shall respond to any information submitted during the response period.
    (c) HOUSING PLANS—
          (1) REQUIREMENT—
             If the Secretary finds pursuant to subsection (b), that an enterprise has failed, or that there is a substantial probability that an enterprise will fail, to meet any housing goal established under section 1332, 1333, or 1334, and that the achievement of the housing goal was or is feasible, the Secretary shall require the enterprise to submit a housing plan under this subsection for approval by the Secretary.
          (2) CONTENTS—
             Each housing plan shall be a feasible plan describing the specific actions the enterprise will take—
                (A) to achieve the goal for the next calendar year; or
                (B) if the Secretary determines that there is a substantial probability that the enterprise will fail to meet a goal in the current year, to make such improvements as are reasonable in the remainder of such year.
             The plan shall be sufficiently specific to enable the Secretary to monitor compliance periodically.
          (3) DEADLINE FOR SUBMISSION—
             The Secretary shall, by regulation, establish a deadline for an enterprise to submit a housing plan to the Secretary, which may not be more than 45 days after the enterprise is provided notice under subsection (b)(3) that a housing plan is required. The regulations shall provide that the Secretary may extend the deadline to the extent that the Secretary determines necessary. Any extension of the deadline shall be in writing and for a time certain.
          (4) APPROVAL—
             The Secretary shall review each housing plan submitted under this subsection and, not later than 30 days after submission of the plan, approve or disapprove the plan. The Secretary may extend the period for approval or disapproval for a single additional 30-day period if the Secretary determines it necessary. The Secretary shall approve any plan that the Secretary determines is likely to succeed, and conforms with the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act (as applicable), this title, and any other applicable laws and regulations.
          (5) NOTICE OF APPROVAL AND DISAPPROVAL—
             The Secretary shall provide written notice to any enterprise submitting a housing plan of the approval or disapproval of the plan (which shall include the reasons for any disapproval of the plan) and of any extension of the period for approval or disapproval.
          (6) RESUBMISSION—
             If the initial housing plan submitted by an enterprise is disapproved, the enterprise shall submit an amended plan acceptable to the Secretary within 30 days or such longer period that the Secretary determines is in the public interest.

### SEC. 1337. REPORTS DURING TRANSITION.

    Each enterprise shall submit to the Secretary, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate, a report for each transitional housing goal for the enterprise under section 1332(d), 1333(d), or 1334(d), describing the actions the enterprise plans to take to meet such goal. Each such report shall be submitted within 45 days after the establishment of the goal for which the report is submitted.

### SEC. 1338. EFFECTIVE DATE OF TRANSITION GOALS.

    The housing goals established under sections 1332(d), 1333(d), and 1334(d) shall not become effective until January 1, 1993.