II 

109TH CONGRESS 

2D SESSION S. 3173 

To modernize the Federal Housing Administration to meet the housing needs 

of the American people. 

IN THE SENATE OF THE UNITED STATES 

MAY 25, 2006 

Mrs. CLINTON introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To modernize the Federal Housing Administration to meet 

the housing needs of the American people. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘21st Century Housing 

5 Act’’. 

6 SEC. 2. INVESTMENT IN FHA INFRASTRUCTURE. 

7 (a) HUMAN RESOURCES AND FUNDING.—Section 

8 502(a) of the Housing Act of 1948 (12 U.S.C. 1701c(a)) 

9 is amended— 


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1 (1) by striking ‘‘The Secretary of Housing and 

2 Urban Development’’ and inserting the following: 

3 ‘‘(1) IN GENERAL.—Except as provided in para4 graph (2), the Secretary of Housing and Urban De5 velopment’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(2) ADMINISTRATION OF FHA PROGRAMS.— 

8 ‘‘(A) OFFICE PERSONNEL.— 

9 ‘‘(i) APPOINTMENT.—In carrying out 

10 any program through the Federal Housing 

11 Administration (in this section referred to 

12 as the ‘Administration’), the Secretary 

13 may appoint and fix the compensation of 

14 such officers and employees of the Admin15 istration as the Secretary considers nec16 essary. 

17 ‘‘(ii) COMPENSATION.—Any officer or 

18 employee appointed under clause (i) may 

19 be paid without regard to the provisions of 

20 chapter 51 and subchapter III of chapter 

21 53 of title 5, United States Code, relating 

22 to classification and General Schedule pay 

23 rates. 

24 ‘‘(B) COMPARABILITY OF COMPENSATION

25 WITH FEDERAL BANKING AGENCIES.—In fixing 


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1 and directing compensation under subpara2 graph (A), the Secretary shall consult with, and 

3 maintain comparability with the compensation 

4 of officers and employees of the Federal De5 posit Insurance Corporation. 

6 ‘‘(C) PERSONNEL OF OTHER FEDERAL

7 AGENCIES.—In carrying out the duties of the 

8 Administration, the Secretary may use informa9 tion, services, staff, and facilities of any Federal 

10 executive agency, independent agency, or de11 partment on a reimbursable basis, with the con12 sent of such agency or department. 

13 ‘‘(D) OUTSIDE EXPERTS AND CONSULT14 ANT.—In carrying out the duties of the Admin15 istration, the Secretary may procure temporary 

16 and intermittent services under section 3109(b) 

17 of title 5, United States Code. 

18 ‘‘(E) USE OF PREMIUM-GENERATED IN19 COME.—To the extent that income derived in 

20 any fiscal year from premium fees charged 

21 under section 203(c) of the National Housing 

22 Act (12 U.S.C. 1709(c)) are in excess of the 

23 level of income estimated for that fiscal year for 

24 such premium fees and assumed in the baseline 

25 projection prepared by the Director of the OfVerDate Aug 31 2005 04:00 Jun 03, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3173.IS S3173

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1 fice of Management and Budget for inclusion in 

2 the President’s annual budget request, not 

3 more than $82,000,000 of such excess amounts 

4 may be used from such amounts for the pur5 pose of carrying out this paragraph.’’. 

6 (b) INFORMATION TECHNOLOGY INVESTMENT.—Sec7 tion 502(a) of the Housing Act of 1948 (12 U.S.C. 

8 1701c(a)), as amended by subsection (a), is amended by 

9 adding at the end the following: 

10 ‘‘(3) INFORMATION TECHNOLOGY.— 

11 ‘‘(A) IN GENERAL.—In carrying out any 

12 program through the Administration, the Sec13 retary may utilize such funds as are available 

14 under subparagraph (B) to ensure that an ap15 propriate level of investment in information 

16 technology is maintained in order for the Sec17 retary to upgrade its technology systems. 

18 ‘‘(B) USE OF PREMIUM-GENERATED IN19 COME.—To the extent that income derived from 

20 premium fees charged under section 203(c) of 

21 the National Housing Act (12 U.S.C. 1709(c)) 

22 are in excess of the level of income estimated 

23 for that fiscal year for such premium fees and 

24 assumed in the baseline projection prepared by 

25 the Director of the Office of Management and 


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1 Budget for inclusion in the President’s annual 

2 budget request, not more than $72,000,000 of 

3 such excess amounts may be used from such 

4 amounts for the purpose of carrying out this 

5 paragraph.’’. 

6 SEC. 3. EXTENSION OF MORTGAGE TERM AUTHORITY. 

7 Section 203(b)(3) of the National Housing Act (12 

8 U.S.C. 1709(b)(3)) is amended— 

9 (1) by striking ‘‘thirty-five years’’ and inserting 

10 ‘‘50 years’’; and 

11 (2) by striking ‘‘(or thirty years if such mort12 gage is not approved for insurance prior to construc13 tion)’’. 

14 SEC. 4. DOWNPAYMENT FLEXIBILITY. 

15 Section 203(b)(9) of the National Housing Act (12 

16 U.S.C. 1709(b)(9)) is amended by striking ‘‘(9)’’ and all 

17 that follows through ‘‘Provided further, That for’’ and in18 serting the following: 

19 ‘‘(9) Be executed by a mortgagor who shall 

20 have paid on account of the property, in cash or its 

21 equivalent, an amount, if any, as the Secretary may 

22 determine, based on factors determined by the Sec23 retary and commensurate with the likelihood of de24 fault. For’’. 


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1 SEC. 5. MORTGAGE INSURANCE FLEXIBILITY. 

2 Section 203(c)(2) of the National Housing Act (12 

3 U.S.C. 1709(c)(2)) is amended— 

4 (1) in subparagraph (A)— 

5 (A) by striking the first sentence and in6 serting ‘‘The Secretary shall establish and col7 lect, at the time of insurance, a single premium 

8 payment, in such amount as the Secretary may 

9 determine, based on factors determined by the 

10 Secretary and commensurate with the likelihood 

11 of default of the homebuyer. Such premium 

12 payment shall be in an amount not to exceed 3 

13 percent of the amount of the original insured 

14 principal obligation of the mortgage.’’; and 

15 (B) by striking the second sentence; and 

16 (2) in subparagraph (B), by striking ‘‘0.50 per17 cent’’ and inserting ‘‘1 percent’’. 

18 SEC. 6. INNOVATION FOR NEW PROJECTS. 

19 Section 203 of the National Housing Act (12 U.S.C. 

20 1709) is amended by adding at the end the following: 

21 ‘‘(y) WAIVER FOR NEW PRODUCT INITIATIVES.— 

22 ‘‘(1) IN GENERAL.—Notwithstanding any other 

23 provision of law, and subject to the limitation under 

24 paragraph (2), the Secretary may waive such re25 quirements of this section as the Secretary deter26 mines appropriate for any new product initiative. 


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1 ‘‘(2) LIMITATION.—For all new product initia2 tives in any fiscal year, the Secretary may allocate 

3 an amount equal to not more than 10 percent of the 

4 amount necessary to carry out the insurance of 

5 mortgages under this section for the prior fiscal 

6 year.’’. 

7 SEC. 7. MAXIMUM MORTGAGE AMOUNT LIMIT FOR MULTI8 FAMILY HOUSING IN HIGH-COST AREAS. 

9 Sections 207(c)(3), 213(b)(2)(B)(i), 

10 220(d)(3)(B)(iii)(III), 221(d)(3)(ii)(II), 221(d)(4)(ii)(II), 

11 231(c)(2)(B), and 234(e)(3)(B) of the National Housing 

12 Act (12 U.S.C. 1713(c)(3), 1715e(b)(2)(B)(i), 

13 1715k(d)(3)(B)(iii)(III), 1715l(d)(3)(ii)(II), 

14 1715l(d)(4)(ii)(II), 1715v(c)(2)(B)), and 1715y(e)(3)(B)) 

15 are each amended— 

16 (1) by striking ‘‘140 percent’’ each place that 

17 term appears and inserting ‘‘170 percent’’; and 

18 (2) by striking ‘‘170 percent’’ each place that 

19 term appears and inserting ‘‘215 percent’’. 

20 SEC. 8. INCREASE IN FHA FINANCIAL INTEGRITY. 

21 Section 205(f)(2) of the National Housing Act (12 

22 U.S.C. 1711(f)(2)) is amended by striking ‘‘2.0 percent’’ 

23 and inserting ‘‘3.0 percent’’. 

Æ 


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