PUBLIC LAW 110–289—JULY 30, 2008 

HOUSING AND ECONOMIC RECOVERY ACT 

OF 2008 


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122 STAT. 2654 PUBLIC LAW 110–289—JULY 30, 2008 

Public Law 110–289 

110th Congress 

An Act 

To provide needed housing reform and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION. 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Housing and 

Economic Recovery Act of 2008’’. 

(b) TABLE OF CONTENT.—The table of contents for this Act 

is as follows: 

Sec. 1. Short title; table of contents. 

DIVISION A—HOUSING FINANCE REFORM 

Sec. 1001. Short title. 

Sec. 1002. Definitions. 

TITLE I—REFORM OF REGULATION OF ENTERPRISES 

Subtitle A—Improvement of Safety and Soundness Supervision 

Sec. 1101. Establishment of the Federal Housing Finance Agency. 

Sec. 1102. Duties and authorities of the Director. 

Sec. 1103. Federal Housing Finance Oversight Board. 

Sec. 1104. Authority to require reports by regulated entities. 

Sec. 1105. Examiners and accountants; authority to contract for reviews of regulated entities; ombudsman. 

Sec. 1106. Assessments. 

Sec. 1107. Regulations and orders. 

Sec. 1108. Prudential management and operations standards. 

Sec. 1109. Review of and authority over enterprise assets and liabilities. 

Sec. 1110. Risk-based capital requirements. 

Sec. 1111. Minimum capital levels. 

Sec. 1112. Registration under the securities laws. 

Sec. 1113. Prohibition and withholding of executive compensation. 

Sec. 1114. Limit on golden parachutes. 

Sec. 1115. Reporting of fraudulent loans. 

Sec. 1116. Inclusion of minorities and women; diversity in Agency workforce. 

Sec. 1117. Temporary authority for purchase of obligations of regulated entities by 

Secretary of Treasury. 

Sec. 1118. Consultation between the Director of the Federal Housing Finance Agency and the Board of Governors of the Federal Reserve System to ensure 

financial market stability . 

Subtitle B—Improvement of Mission Supervision 

Sec. 1121. Transfer of program approval and housing goal oversight. 

Sec. 1122. Assumption by the Director of certain other HUD responsibilities. 

Sec. 1123. Review of enterprise products. 

Sec. 1124. Conforming loan limits. 

Sec. 1125. Annual housing report. 

Sec. 1126. Public use database. 

Sec. 1127. Reporting of mortgage data. 

Sec. 1128. Revision of housing goals. 

Sec. 1129. Duty to serve underserved markets. 

Sec. 1130. Monitoring and enforcing compliance with housing goals. 

42 USC 4501 

note. 

Housing and 

Economic 

Recovery Act 

of 2008. 

July 30, 2008 

[H.R. 3221] 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2655 

Sec. 1131. Affordable housing programs. 

Sec. 1132. Financial education and counseling. 

Sec. 1133. Transfer and rights of certain HUD employees. 

Subtitle C—Prompt Corrective Action 

Sec. 1141. Critical capital levels. 

Sec. 1142. Capital classifications. 

Sec. 1143. Supervisory actions applicable to undercapitalized regulated entities. 

Sec. 1144. Supervisory actions applicable to significantly undercapitalized regulated entities. 

Sec. 1145. Authority over critically undercapitalized regulated entities. 

Subtitle D—Enforcement Actions 

Sec. 1151. Cease and desist proceedings. 

Sec. 1152. Temporary cease and desist proceedings. 

Sec. 1153. Removal and prohibition authority. 

Sec. 1154. Enforcement and jurisdiction. 

Sec. 1155. Civil money penalties. 

Sec. 1156. Criminal penalty. 

Sec. 1157. Notice after separation from service. 

Sec. 1158. Subpoena authority. 

Subtitle E—General Provisions 

Sec. 1161. Conforming and technical amendments. 

Sec. 1162. Presidentially-appointed directors of enterprises. 

Sec. 1163. Effective date. 

TITLE II—FEDERAL HOME LOAN BANKS 

Sec. 1201. Recognition of distinctions between the enterprises and the Federal 

Home Loan Banks. 

Sec. 1202. Directors. 

Sec. 1203. Definitions. 

Sec. 1204. Agency oversight of Federal Home Loan Banks. 

Sec. 1205. Housing goals. 

Sec. 1206. Community development financial institutions. 

Sec. 1207. Sharing of information among Federal Home Loan Banks. 

Sec. 1208. Exclusion from certain requirements. 

Sec. 1209. Voluntary mergers. 

Sec. 1210. Authority to reduce districts. 

Sec. 1211. Community financial institution members. 

Sec. 1212. Public use database; reports to Congress. 

Sec. 1213. Semiannual reports. 

Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank. 

Sec. 1215. Study and report to Congress on securitization of acquired member assets. 

Sec. 1216. Technical and conforming amendments. 

Sec. 1217. Study on Federal Home Loan Bank advances. 

Sec. 1218. Federal Home Loan Bank refinancing authority for certain residential 

mortgage loans. 

TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF 

OFHEO AND THE FEDERAL HOUSING FINANCE BOARD 

Subtitle A—OFHEO 

Sec. 1301. Abolishment of OFHEO. 

Sec. 1302. Continuation and coordination of certain actions. 

Sec. 1303. Transfer and rights of employees of OFHEO. 

Sec. 1304. Transfer of property and facilities. 

Subtitle B—Federal Housing Finance Board 

Sec. 1311. Abolishment of the Federal Housing Finance Board. 

Sec. 1312. Continuation and coordination of certain actions. 

Sec. 1313. Transfer and rights of employees of the Federal Housing Finance Board. 

Sec. 1314. Transfer of property and facilities. 

TITLE IV—HOPE FOR HOMEOWNERS 

Sec. 1401. Short title. 

Sec. 1402. Establishment of HOPE for Homeowners Program. 

Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage loans. 

Sec. 1404. Revised standards for FHA appraisers. 


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122 STAT. 2656 PUBLIC LAW 110–289—JULY 30, 2008 

TITLE V—S.A.F.E. MORTGAGE LICENSING ACT 

Sec. 1501. Short title. 

Sec. 1502. Purposes and methods for establishing a mortgage licensing system and 

registry. 

Sec. 1503. Definitions. 

Sec. 1504. License or registration required. 

Sec. 1505. State license and registration application and issuance. 

Sec. 1506. Standards for State license renewal. 

Sec. 1507. System of registration administration by Federal agencies. 

Sec. 1508. Secretary of Housing and Urban Development backup authority to establish a loan originator licensing system. 

Sec. 1509. Backup authority to establish a nationwide mortgage licensing and registry system. 

Sec. 1510. Fees. 

Sec. 1511. Background checks of loan originators. 

Sec. 1512. Confidentiality of information. 

Sec. 1513. Liability provisions. 

Sec. 1514. Enforcement under HUD backup licensing system. 

Sec. 1515. State examination authority. 

Sec. 1516. Reports and recommendations to Congress. 

Sec. 1517. Study and reports on defaults and foreclosures. 

TITLE VI—MISCELLANEOUS 

Sec. 1601. Study and reports on guarantee fees. 

Sec. 1602. Study and report on default risk evaluation. 

Sec. 1603. Conversion of HUD contracts. 

Sec. 1604. Bridge depository institutions. 

Sec. 1605. Sense of the Senate. 

DIVISION B—FORECLOSURE PREVENTION 

Sec. 2001. Short title. 

Sec. 2002. Emergency designation. 

TITLE I—FHA MODERNIZATION ACT OF 2008 

Sec. 2101. Short title. 

Subtitle A—Building American Homeownership 

Sec. 2111. Short title. 

Sec. 2112. Maximum principal loan obligation. 

Sec. 2113. Cash investment requirement and prohibition of seller-funded down payment assistance. 

Sec. 2114. Mortgage insurance premiums. 

Sec. 2115. Rehabilitation loans. 

Sec. 2116. Discretionary action. 

Sec. 2117. Insurance of condominiums. 

Sec. 2118. Mutual Mortgage Insurance Fund. 

Sec. 2119. Hawaiian home lands and Indian reservations. 

Sec. 2120. Conforming and technical amendments. 

Sec. 2121. Insurance of mortgages. 

Sec. 2122. Home equity conversion mortgages. 

Sec. 2123. Energy efficient mortgages program. 

Sec. 2124. Pilot program for automated process for borrowers without sufficient 

credit history. 

Sec. 2125. Homeownership preservation. 

Sec. 2126. Use of FHA savings for improvements in FHA technologies, procedures, 

processes, program performance, staffing, and salaries. 

Sec. 2127. Post-purchase housing counseling eligibility improvements. 

Sec. 2128. Pre-purchase homeownership counseling demonstration. 

Sec. 2129. Fraud prevention. 

Sec. 2130. Limitation on mortgage insurance premium increases. 

Sec. 2131. Savings provision. 

Sec. 2132. Implementation. 

Sec. 2133. Moratorium on implementation of risk-based premiums. 

Subtitle B—Manufactured Housing Loan Modernization 

Sec. 2141. Short title. 

Sec. 2142. Purposes. 

Sec. 2143. Exception to limitation on financial institution portfolio. 

Sec. 2144. Insurance benefits. 

Sec. 2145. Maximum loan limits. 


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Sec. 2146. Insurance premiums. 

Sec. 2147. Technical corrections. 

Sec. 2148. Revision of underwriting criteria. 

Sec. 2149. Prohibition against kickbacks and unearned fees. 

Sec. 2150. Leasehold requirements. 

TITLE II—MORTGAGE FORECLOSURE PROTECTIONS FOR 

SERVICEMEMBERS 

Sec. 2201. Temporary increase in maximum loan guaranty amount for certain 

housing loans guaranteed by the Secretary of Veterans Affairs. Sec. 2202. Counseling on mortgage foreclosures for members of the Armed Forces 

returning from service abroad. Sec. 2203. Enhancement of protections for servicemembers relating to mortgages 

and mortgage foreclosures. 

TITLE III—EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 

ABANDONED AND FORECLOSED HOMES 

Sec. 2301. Emergency assistance for the redevelopment of abandoned and foreclosed homes. 

Sec. 2302. Nationwide distribution of resources. 

Sec. 2303. Limitation on use of funds with respect to eminent domain. 

Sec. 2304. Limitation on distribution of funds. 

Sec. 2305. Counseling intermediaries. 

TITLE IV—HOUSING COUNSELING RESOURCES 

Sec. 2401. Housing counseling resources. 

Sec. 2402. Credit counseling. 

TITLE V—MORTGAGE DISCLOSURE IMPROVEMENT ACT 

Sec. 2501. Short title. 

Sec. 2502. Enhanced mortgage loan disclosures. 

Sec. 2503. Community Development Investment Authority for depository institutions. 

TITLE VI—VETERANS HOUSING MATTERS 

Sec. 2601. Home improvements and structural alterations for totally disabled members of the Armed Forces before discharge or release from the Armed 

Forces. 

Sec. 2602. Eligibility for specially adapted housing benefits and assistance for 

members of the Armed Forces with service-connected disabilities and individuals residing outside the United States. Sec. 2603. Specially adapted housing assistance for individuals with severe burn injuries. Sec. 2604. Extension of assistance for individuals residing temporarily in housing 

owned by a family member. Sec. 2605. Increase in specially adapted housing benefits for disabled veterans. 

Sec. 2606. Report on specially adapted housing for disabled individuals. 

Sec. 2607. Report on specially adapted housing assistance for individuals who reside in housing owned by a family member on permanent basis. Sec. 2608. Definition of annual income for purposes of section 8 and other public 

housing programs. Sec. 2609. Payment of transportation of baggage and household effects for members 

of the Armed Forces who relocate due to foreclosure of leased housing. 

TITLE VII—SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK 

REDUCTION ACT 

Sec. 2701. Short title. 

Sec. 2702. Public housing agency plans for certain qualified public housing agencies. 

TITLE VIII—HOUSING PRESERVATION 

Subtitle A—Preservation Under Federal Housing Programs 

Sec. 2801. Clarification of disposition of certain properties. 

Sec. 2802. Eligibility of certain projects for enhanced voucher assistance. 

Sec. 2803. Transfer of certain rental assistance contracts. 

Sec. 2804. Public housing disaster relief. 

Sec. 2805. Preservation of certain affordable housing. 

Subtitle B—Coordination of Federal Housing Programs and Tax Incentives for 

Housing 

Sec. 2831. Short title. 


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Sec. 2832. Approvals by Department of Housing and Urban Development. 

Sec. 2833. Project approvals by rural housing service. 

Sec. 2834. Use of FHA loans with housing tax credits. 

Sec. 2835. Other HUD programs. 

TITLE IX—MISCELLANEOUS 

Sec. 2901. Homeless assistance. 

Sec. 2902. Increasing access and understanding of energy efficient mortgages. 

DIVISION C—TAX-RELATED PROVISIONS 

Sec. 3000. Short title; etc. 

TITLE I—HOUSING TAX INCENTIVES 

Subtitle A—Multi-Family Housing 

PART I—LOW-INCOME HOUSING TAX CREDIT

Sec. 3001. Temporary increase in volume cap for low-income housing tax credit. 

Sec. 3002. Determination of credit rate. 

Sec. 3003. Modifications to definition of eligible basis. 

Sec. 3004. Other simplification and reform of low-income housing tax incentives. 

Sec. 3005. Treatment of military basic pay. 

PART II—MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

Sec. 3007. Recycling of tax-exempt debt for financing residential rental projects. 

Sec. 3008. Coordination of certain rules applicable to low-income housing credit and 

qualified residential rental project exempt facility bonds. 

PART III—REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAXEXEMPT HOUSING BONDS

Sec. 3009. Hold harmless for reductions in area median gross income. 

Sec. 3010. Exception to annual current income determination requirement where 

determination not relevant. 

Subtitle B—Single Family Housing 

Sec. 3011. First-time homebuyer credit. 

Sec. 3012. Additional standard deduction for real property taxes for nonitemizers. 

Subtitle C—General Provisions 

Sec. 3021. Temporary liberalization of tax-exempt housing bond rules. 

Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt housing 

bonds, low-income housing tax credit, and rehabilitation credit. 

Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for treatment as 

tax-exempt bonds. 

Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign affidavits. 

Sec. 3025. Modification of definition of tax-exempt use property for purposes of the 

rehabilitation credit. 

Sec. 3026. Extension of special rule for mortgage revenue bonds for residences located in disaster areas. 

Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery rebates for individuals. 

TITLE II—REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS 

Subtitle A—Foreign Currency and Other Qualified Activities 

Sec. 3031. Revisions to REIT income tests. 

Sec. 3032. Revisions to REIT asset tests. 

Sec. 3033. Conforming foreign currency revisions. 

Subtitle B—Taxable REIT Subsidiaries 

Sec. 3041. Conforming taxable REIT subsidiary asset test. 

Subtitle C—Dealer Sales 

Sec. 3051. Holding period under safe harbor. 

Sec. 3052. Determining value of sales under safe harbor. 

Subtitle D—Health Care REITs 

Sec. 3061. Conformity for health care facilities. 

Subtitle E—Effective Dates 

Sec. 3071. Effective dates. 


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TITLE III—REVENUE PROVISIONS 

Subtitle A—General Provisions 

Sec. 3081. Election to accelerate the AMT and research credits in lieu of bonus depreciation. 

Sec. 3082. Certain GO Zone incentives. 

Sec. 3083. Increase in statutory limit on the public debt. 

Subtitle B—Revenue Offsets 

Sec. 3091. Returns relating to payments made in settlement of payment card and 

third party network transactions. 

Sec. 3092. Gain from sale of principal residence allocated to nonqualified use not 

excluded from income. 

Sec. 3093. Delay in application of worldwide allocation of interest. 

Sec. 3094. Time for payment of corporate estimated taxes. 

DIVISION A—HOUSING FINANCE 

REFORM 

SEC. 1001. SHORT TITLE. 

This division may be cited as the ‘‘Federal Housing Finance 

Regulatory Reform Act of 2008’’. 

SEC. 1002. DEFINITIONS. 

(a) FEDERAL SAFETY AND SOUNDNESS ACT DEFINITIONS.—Section 1303 of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992 (12 U.S.C. 4502) is amended— 

(1) in each of paragraphs (8), (9), (10), and (19), by striking 

‘‘Secretary’’ each place that term appears and inserting 

‘‘Director’’; 

(2) by redesignating paragraphs (16) through (19) as paragraphs (21) through (24), respectively; 

(3) by striking paragraphs (13) through (15) and inserting 

the following: 

‘‘(19) OFFICE OF FINANCE.—The term ‘Office of Finance’ 

means the Office of Finance of the Federal Home Loan Bank 

System (or any successor thereto). 

‘‘(20) REGULATED ENTITY.—The term ‘regulated entity’ 

means— 

‘‘(A) the Federal National Mortgage Association and 

any affiliate thereof; 

‘‘(B) the Federal Home Loan Mortgage Corporation 

and any affiliate thereof; and 

‘‘(C) any Federal Home Loan Bank.’’; 

(4) by redesignating paragraphs (11) and (12) as paragraphs 

(17) and (18), respectively; 

(5) by redesignating paragraph (7) as paragraph (12); 

(6) by redesignating paragraphs (8) through (10) as paragraphs (14) through (16), respectively; 

(7) in paragraph (5)— 

(A) by striking ‘‘(5)’’ and inserting ‘‘(9)’’; and 

(B) by striking ‘‘Office of Federal Housing Enterprise 

Oversight of the Department of Housing and Urban 

Development’’ and inserting ‘‘Federal Housing Finance 

Agency’’; 

(8) by redesignating paragraph (6) as paragraph (10); 

(9) by redesignating paragraphs (2) through (4) as paragraphs (5) through (7), respectively; 

12 USC 4501 

note. 

Federal Housing 

Finance 

Regulatory 

Reform Act of 

2008. 


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(10) by inserting after paragraph (7), as redesignated, the 

following: 

‘‘(8) DEFAULT; IN DANGER OF DEFAULT.— 

‘‘(A) DEFAULT.—The term ‘default’ means, with respect 

to a regulated entity, any adjudication or other official 

determination by any court of competent jurisdiction, or 

the Agency, pursuant to which a conservator, receiver, 

limited-life regulated entity, or legal custodian is appointed 

for a regulated entity. 

‘‘(B) IN DANGER OF DEFAULT.—The term ‘in danger 

of default’ means a regulated entity with respect to which, 

in the opinion of the Agency— 

‘‘(i) the regulated entity is not likely to be able 

to pay the obligations of the regulated entity in the 

normal course of business; or 

‘‘(ii) the regulated entity— 

‘‘(I) has incurred or is likely to incur losses 

that will deplete all or substantially all of its capital; and 

‘‘(II) there is no reasonable prospect that the 

capital of the regulated entity will be replenished.’’; 

(11) by inserting after paragraph (1) the following: 

‘‘(2) AGENCY.—The term ‘Agency’ means the Federal 

Housing Finance Agency established under section 1311. 

‘‘(3) AUTHORIZING STATUTES.—The term ‘authorizing statutes’ means— 

‘‘(A) the Federal National Mortgage Association 

Charter Act; 

‘‘(B) the Federal Home Loan Mortgage Corporation 

Act; and 

‘‘(C) the Federal Home Loan Bank Act. 

‘‘(4) BOARD.—The term ‘Board’ means the Federal Housing 

Finance Oversight Board established under section 1313A.’’; 

(12) by inserting after paragraph (10), as redesignated by 

this section, the following: 

‘‘(11) ENTITY-AFFILIATED PARTY.—The term ‘entity-affiliated 

party’ means— 

‘‘(A) any director, officer, employee, or controlling stockholder of, or agent for, a regulated entity; 

‘‘(B) any shareholder, affiliate, consultant, or joint venture partner of a regulated entity, and any other person, 

as determined by the Director (by regulation or on a caseby-case basis) that participates in the conduct of the affairs 

of a regulated entity, provided that a member of a Federal 

Home Loan Bank shall not be deemed to have participated 

in the affairs of that Bank solely by virtue of being a 

shareholder of, and obtaining advances from, that Bank; 

‘‘(C) any independent contractor for a regulated entity 

(including any attorney, appraiser, or accountant), if— 

‘‘(i) the independent contractor knowingly or recklessly participates in— 

‘‘(I) any violation of any law or regulation; 

‘‘(II) any breach of fiduciary duty; or 

‘‘(III) any unsafe or unsound practice; and 

‘‘(ii) such violation, breach, or practice caused, or 

is likely to cause, more than a minimal financial loss 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2661 

to, or a significant adverse effect on, the regulated 

entity; 

‘‘(D) any not-for-profit corporation that receives its 

principal funding, on an ongoing basis, from any regulated 

entity; and 

‘‘(E) the Office of Finance.’’; 

(13) by inserting after paragraph (12), as redesignated by 

this section, the following: 

‘‘(13) LIMITED-LIFE REGULATED ENTITY.—The term ‘limitedlife regulated entity’ means an entity established by the Agency 

under section 1367(i) with respect to a Federal Home Loan 

Bank in default or in danger of default or with respect to 

an enterprise in default or in danger of default.’’; and 

(14) by adding at the end the following: 

‘‘(25) VIOLATION.—The term ‘violation’ includes any action 

(alone or in combination with another or others) for or toward 

causing, bringing about, participating in, counseling, or aiding 

or abetting a violation.’’. 

(b) REFERENCES IN THIS ACT.—As used in this Act, unless 

otherwise specified— 

(1) the term ‘‘Agency’’ means the Federal Housing Finance 

Agency; 

(2) the term ‘‘Director’’ means the Director of the Agency; 

and 

(3) the terms ‘‘enterprise’’, ‘‘regulated entity’’, and ‘‘authorizing statutes’’ have the same meanings as in section 1303 

of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by this Act. 

TITLE I—REFORM OF REGULATION OF 

ENTERPRISES 

Subtitle A—Improvement of Safety and 

Soundness Supervision 

SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 

AGENCY. 

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by striking 

sections 1311 and 1312 and inserting the following: 

‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 

AGENCY. 

‘‘(a) ESTABLISHMENT.—There is established the Federal Housing 

Finance Agency, which shall be an independent agency of the Federal Government. 

‘‘(b) GENERAL SUPERVISORY AND REGULATORY AUTHORITY.— 

‘‘(1) IN GENERAL.—Each regulated entity shall, to the extent 

provided in this title, be subject to the supervision and regulation of the Agency. 

‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE MAC, THE FEDERAL HOME LOAN BANKS, AND THE OFFICE OF FINANCE.—The 

Director shall have general regulatory authority over each regulated entity and the Office of Finance, and shall exercise such 

12 USC 4511, 

4512. 

12 USC 4511 

note. 


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general regulatory authority, including such duties and authorities set forth under section 1313, to ensure that the purposes 

of this Act, the authorizing statutes, and any other applicable 

law are carried out. 

‘‘(c) SAVINGS PROVISION.—The authority of the Director to take 

actions under subtitles B and C shall not in any way limit the 

general supervisory and regulatory authority granted to the Director 

under subsection (b). 

‘‘SEC. 1312. DIRECTOR. 

‘‘(a) ESTABLISHMENT OF POSITION.—There is established the 

position of the Director of the Agency, who shall be the head 

of the Agency. 

‘‘(b) APPOINTMENT; TERM.— 

‘‘(1) APPOINTMENT.—The Director shall be appointed by 

the President, by and with the advice and consent of the Senate, 

from among individuals who are citizens of the United States, 

have a demonstrated understanding of financial management 

or oversight, and have a demonstrated understanding of capital 

markets, including the mortgage securities markets and 

housing finance. 

‘‘(2) TERM.—The Director shall be appointed for a term 

of 5 years, unless removed before the end of such term for 

cause by the President. 

‘‘(3) VACANCY.—A vacancy in the position of Director that 

occurs before the expiration of the term for which a Director 

was appointed shall be filled in the manner established under 

paragraph (1), and the Director appointed to fill such vacancy 

shall be appointed only for the remainder of such term. 

‘‘(4) SERVICE AFTER END OF TERM.—An individual may serve 

as the Director after the expiration of the term for which 

appointed until a successor has been appointed. 

‘‘(5) TRANSITIONAL PROVISION.—Notwithstanding paragraphs (1) and (2), during the period beginning on the effective 

date of the Federal Housing Finance Regulatory Reform Act 

of 2008, and ending on the date on which the Director is 

appointed and confirmed, the person serving as the Director 

of the Office of Federal Housing Enterprise Oversight of the 

Department of Housing and Urban Development on that effective date shall act for all purposes as, and with the full powers 

of, the Director. 

‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF ENTERPRISE REGULATION.— 

‘‘(1) IN GENERAL.—The Agency shall have a Deputy Director 

of the Division of Enterprise Regulation, who shall be designated by the Director from among individuals who are citizens 

of the United States, have a demonstrated understanding of 

financial management or oversight, and have a demonstrated 

understanding of mortgage securities markets and housing 

finance. 

‘‘(2) FUNCTIONS.—The Deputy Director of the Division of 

Enterprise Regulation shall have such functions, powers, and 

duties with respect to the oversight of the enterprises as the 

Director shall prescribe. 

‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF FEDERAL HOME

LOAN BANK REGULATION.— 

Effective date. 

Termination 

date. 

President. 


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‘‘(1) IN GENERAL.—The Agency shall have a Deputy Director 

of the Division of Federal Home Loan Bank Regulation, who 

shall be designated by the Director from among individuals 

who are citizens of the United States, have a demonstrated 

understanding of financial management or oversight, and have 

a demonstrated understanding of the Federal Home Loan Bank 

System and housing finance. 

‘‘(2) FUNCTIONS.—The Deputy Director of the Division of 

Federal Home Loan Bank Regulation shall have such functions, 

powers, and duties with respect to the oversight of the Federal 

Home Loan Banks as the Director shall prescribe. 

‘‘(e) DEPUTY DIRECTOR FOR HOUSING MISSION AND GOALS.— ‘‘(1) IN GENERAL.—The Agency shall have a Deputy Director 

for Housing Mission and Goals, who shall be designated by 

the Director from among individuals who are citizens of the 

United States, and have a demonstrated understanding of the 

housing markets and housing finance. 

‘‘(2) FUNCTIONS.—The Deputy Director for Housing Mission 

and Goals shall have such functions, powers, and duties with 

respect to the oversight of the housing mission and goals of 

the enterprises, and with respect to oversight of the housing 

finance and community and economic development mission of 

the Federal Home Loan Banks, as the Director shall prescribe. 

‘‘(3) CONSIDERATIONS.—In exercising such functions, 

powers, and duties, the Deputy Director for Housing Mission 

and Goals shall consider the differences between the enterprises 

and the Federal Home Loan Banks, including those described 

in section 1313(d). 

‘‘(f) ACTING DIRECTOR.—In the event of the death, resignation, 

sickness, or absence of the Director, the President shall designate 

either the Deputy Director of the Division of Enterprise Regulation, 

the Deputy Director of the Division of Federal Home Loan Bank 

Regulation, or the Deputy Director for Housing Mission and Goals, 

to serve as acting Director until the return of the Director, or 

the appointment of a successor pursuant to subsection (b). 

‘‘(g) LIMITATIONS.—The Director and each of the Deputy Directors may not— 

‘‘(1) have any direct or indirect financial interest in any 

regulated entity or entity-affiliated party; 

‘‘(2) hold any office, position, or employment in any regulated entity or entity-affiliated party; or 

‘‘(3) have served as an executive officer or director of any 

regulated entity or entity-affiliated party at any time during 

the 3-year period preceding the date of appointment or designation of such individual as Director or Deputy Director, as 

applicable.’’. 

SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR. 

(a) IN GENERAL.—Section 1313 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513) 

is amended to read as follows: 

‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR. 

‘‘(a) DUTIES.— 

‘‘(1) PRINCIPAL DUTIES.—The principal duties of the Director 

shall be— 

‘‘(A) to oversee the prudential operations of each regulated entity; and 

President. 


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‘‘(B) to ensure that— 

‘‘(i) each regulated entity operates in a safe and 

sound manner, including maintenance of adequate capital and internal controls; 

‘‘(ii) the operations and activities of each regulated 

entity foster liquid, efficient, competitive, and resilient 

national housing finance markets (including activities 

relating to mortgages on housing for low- and moderate-income families involving a reasonable economic 

return that may be less than the return earned on 

other activities); 

‘‘(iii) each regulated entity complies with this title 

and the rules, regulations, guidelines, and orders 

issued under this title and the authorizing statutes; 

‘‘(iv) each regulated entity carries out its statutory 

mission only through activities that are authorized 

under and consistent with this title and the authorizing 

statutes; and 

‘‘(v) the activities of each regulated entity and 

the manner in which such regulated entity is operated 

are consistent with the public interest. 

‘‘(2) SCOPE OF AUTHORITY.—The authority of the Director 

shall include the authority— 

‘‘(A) to review and, if warranted based on the principal 

duties described in paragraph (1), reject any acquisition 

or transfer of a controlling interest in a regulated entity; 

and 

‘‘(B) to exercise such incidental powers as may be necessary or appropriate to fulfill the duties and responsibilities of the Director in the supervision and regulation of 

each regulated entity. 

‘‘(b) DELEGATION OF AUTHORITY.—The Director may delegate 

to officers and employees of the Agency any of the functions, powers, 

or duties of the Director, as the Director considers appropriate. 

‘‘(c) LITIGATION AUTHORITY.— ‘‘(1) IN GENERAL.—In enforcing any provision of this title, 

any regulation or order prescribed under this title, or any 

other provision of law, rule, regulation, or order, or in any 

other action, suit, or proceeding to which the Director is a 

party or in which the Director is interested, and in the administration of conservatorships and receiverships, the Director may 

act in the Director’s own name and through the Director’s 

own attorneys. 

‘‘(2) SUBJECT TO SUIT.—Except as otherwise provided by 

law, the Director shall be subject to suit (other than suits 

on claims for money damages) by a regulated entity with respect 

to any matter under this title or any other applicable provision 

of law, rule, order, or regulation under this title, in the United 

States district court for the judicial district in which the regulated entity has its principal place of business, or in the United 

States District Court for the District of Columbia, and the 

Director may be served with process in the manner prescribed 

by the Federal Rules of Civil Procedure.’’. 

(b) INDEPENDENCE IN CONGRESSIONAL TESTIMONY AND RECOMMENDATIONS.—Section 111 of Public Law 93–495 (12 U.S.C. 250) 

is amended by striking ‘‘the Federal Housing Finance Board’’ and 

inserting ‘‘the Director of the Federal Housing Finance Agency’’. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2665 

SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD. 

(a) IN GENERAL.—The Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 

amended by inserting after section 1313 the following: 

‘‘SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD. 

‘‘(a) IN GENERAL.—There is established the Federal Housing 

Finance Oversight Board, which shall advise the Director with 

respect to overall strategies and policies in carrying out the duties 

of the Director under this title. 

‘‘(b) LIMITATIONS.—The Board may not exercise any executive 

authority, and the Director may not delegate to the Board any 

of the functions, powers, or duties of the Director. 

‘‘(c) COMPOSITION.—The Board shall be comprised of 4 members, 

of whom— 

‘‘(1) 1 member shall be the Secretary of the Treasury; 

‘‘(2) 1 member shall be the Secretary of Housing and Urban 

Development; 

‘‘(3) 1 member shall be the Chairman of the Securities 

and Exchange Commission; and 

‘‘(4) 1 member shall be the Director, who shall serve as 

the Chairperson of the Board. 

‘‘(d) MEETINGS.— 

‘‘(1) IN GENERAL.—The Board shall meet upon notice by 

the Director, but in no event shall the Board meet less frequently than once every 3 months. 

‘‘(2) SPECIAL MEETINGS.—Either the Secretary of the 

Treasury, the Secretary of Housing and Urban Development, 

or the Chairman of the Securities and Exchange Commission 

may, upon giving written notice to the Director, require a 

special meeting of the Board. 

‘‘(e) TESTIMONY.—On an annual basis, the Board shall testify 

before Congress regarding— 

‘‘(1) the safety and soundness of the regulated entities; 

‘‘(2) any material deficiencies in the conduct of the operations of the regulated entities; 

‘‘(3) the overall operational status of the regulated entities; 

‘‘(4) an evaluation of the performance of the regulated 

entities in carrying out their respective missions; 

‘‘(5) operations, resources, and performance of the Agency; 

and 

‘‘(6) such other matters relating to the Agency and its 

fulfillment of its mission, as the Board determines appropriate.’’. 

(b) ANNUAL REPORT OF THE DIRECTOR.—Section 1319B(a) of 

the Federal Housing Enterprises Financial Safety and Soundness 

Act of 1992 (12 U.S.C. 4521(a)) is amended— 

(1) by striking ‘‘enterprise’’ each place that term appears 

and inserting ‘‘regulated entity’’; 

(2) by striking ‘‘enterprises’’ each place that term appears 

and inserting ‘‘regulated entities’’; 

(3) in paragraph (3), by striking ‘‘; and’’ and inserting 

a semicolon; 

(4) in paragraph (4), by striking ‘‘1994.’’ and inserting 

‘‘1994; and’’; and 

(5) by adding at the end the following: 

Deadline. 

Deadlines. 

Notices. 

Establishment. 

12 USC 4513a. 


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122 STAT. 2666 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(5) the assessment of the Board or any of its members 

with respect to— 

‘‘(A) the safety and soundness of the regulated entities; 

‘‘(B) any material deficiencies in the conduct of the 

operations of the regulated entities; 

‘‘(C) the overall operational status of the regulated 

entities; and 

‘‘(D) an evaluation of the performance of the regulated 

entities in carrying out their respective missions; 

‘‘(6) operations, resources, and performance of the Agency; 

and 

‘‘(7) such other matters relating to the Agency and the 

fulfillment of its mission.’’. 

SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES. 

(a) IN GENERAL.—Section 1314 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) 

is amended— 

(1) in the section heading, by striking ‘‘ENTERPRISES’’ and 

inserting ‘‘REGULATED ENTITIES’’; 

(2) by striking ‘‘an enterprise’’ each place that term appears 

and inserting ‘‘a regulated entity’’; 

(3) by striking ‘‘the enterprise’’ and inserting ‘‘the regulated 

entity’’; 

(4) in subsection (a)— 

(A) by striking the subsection heading and all that 

follows through ‘‘and operations’’ in paragraph (1) and 

inserting the following: 

‘‘(a) REGULAR AND SPECIAL REPORTS.— 

‘‘(1) REGULAR REPORTS.—The Director may require, by general or specific orders, a regulated entity to submit regular 

reports, including financial statements determined on a fair 

value basis, on the condition (including financial condition), 

management, activities, or operations of the regulated entity, 

as the Director considers appropriate’’; and 

(B) in paragraph (2)— 

(i) by inserting ‘‘, by general or specific orders,’’ 

after ‘‘may also require’’; and 

(ii) by striking ‘‘whenever’’ and inserting ‘‘on any 

of the topics specified in paragraph (1) or any other 

relevant topics, if’’; and 

(5) by adding at the end the following: 

‘‘(c) PENALTIES FOR FAILURE TO MAKE REPORTS.— 

‘‘(1) VIOLATIONS.—It shall be a violation of this section 

for any regulated entity— 

‘‘(A) to fail to make, transmit, or publish any report 

or obtain any information required by the Director under 

this section, section 309(k) of the Federal National Mortgage Association Charter Act, section 307(c) of the Federal 

Home Loan Mortgage Corporation Act, or section 20 of 

the Federal Home Loan Bank Act, within the period of 

time specified in such provision of law or otherwise by 

the Director; or 

‘‘(B) to submit or publish any false or misleading report 

or information under this section. 

‘‘(2) PENALTIES.— 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2667 

‘‘(A) FIRST TIER.— 

‘‘(i) IN GENERAL.—A violation described in paragraph (1) shall be subject to a penalty of not more 

than $2,000 for each day during which such violation 

continues, in any case in which— 

‘‘(I) the subject regulated entity maintains 

procedures reasonably adapted to avoid any inadvertent error and the violation was unintentional 

and a result of such an error; or 

‘‘(II) the violation was an inadvertent transmittal or publication of any report which was minimally late. 

‘‘(ii) BURDEN OF PROOF.—For purposes of this 

subparagraph, the regulated entity shall have the burden of proving that the error was inadvertent or that 

a report was inadvertently transmitted or published 

late. 

‘‘(B) SECOND TIER.—A violation described in paragraph 

(1) shall be subject to a penalty of not more than $20,000 

for each day during which such violation continues or such 

false or misleading information is not corrected, in any 

case that is not addressed in subparagraph (A) or (C). 

‘‘(C) THIRD TIER.—A violation described in paragraph 

(1) shall be subject to a penalty of not more than $1,000,000 

per day for each day during which such violation continues 

or such false or misleading information is not corrected, 

in any case in which the subject regulated entity committed 

such violation knowingly or with reckless disregard for 

the accuracy of any such information or report. 

‘‘(3) ASSESSMENTS.—Any penalty imposed under this subsection shall be in lieu of a penalty under section 1376, but 

shall be assessed and collected by the Director in the manner 

provided in section 1376 for penalties imposed under that section, and any such assessment (including the determination 

of the amount of the penalty) shall be otherwise subject to 

the provisions of section 1376. 

‘‘(4) HEARING.—A regulated entity against which a penalty 

is assessed under this section shall be afforded an agency 

hearing if the regulated entity submits a request for a hearing 

not later than 20 days after the date of the issuance of the 

notice of assessment. Section 1374 shall apply to any such 

proceedings.’’. 

(b) CONFORMING AMENDMENT.—The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 

et seq.) is amended by striking sections 1327 and 1328. 

SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT 

FOR REVIEWS OF REGULATED ENTITIES; OMBUDSMAN. 

(a) IN GENERAL.—Section 1317 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) 

is amended— 

(1) in subsection (a), by striking ‘‘enterprise’’ each place 

that term appears and inserting ‘‘regulated entity’’; 

(2) in subsection (b)— 

(A) by inserting ‘‘of a regulated entity’’ after ‘‘under 

this section’’; and 

12 USC 4547, 

4548. 

Applicability. 

Deadline. 


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122 STAT. 2668 PUBLIC LAW 110–289—JULY 30, 2008 

(B) by striking ‘‘to determine the condition of an enterprise for the purpose of ensuring its financial safety and 

soundness’’ and inserting ‘‘or appropriate’’; 

(3) in subsection (c), in the second sentence, by inserting 

before the period ‘‘to conduct examinations under this section’’; 

(4) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and 

(5) by inserting after subsection (c) the following: 

‘‘(d) INSPECTOR GENERAL.—There shall be within the Agency 

an Inspector General, who shall be appointed in accordance with 

section 3(a) of the Inspector General Act of 1978.’’. 

(b) DIRECT HIRE AUTHORITY TO HIRE ACCOUNTANTS, ECONOMISTS, AND EXAMINERS.—Section 1317 of the Federal Housing 

Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 

4517) is amended by adding at the end the following: 

‘‘(h) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, AND EXAMINERS.— 

‘‘(1) APPLICABILITY.—This section shall apply with respect 

to any position of examiner, accountant, economist, and specialist in financial markets and in technology at the Agency, 

with respect to supervision and regulation of the regulated 

entities, that is in the competitive service. 

‘‘(2) APPOINTMENT AUTHORITY.—The Director may appoint 

candidates to any position described in paragraph (1)— 

‘‘(A) in accordance with the statutes, rules, and regulations governing appointments in the excepted service; and 

‘‘(B) notwithstanding any statutes, rules, and regulations governing appointments in the competitive service.’’. 

(c) AMENDMENTS TO INSPECTOR GENERAL ACT.—Section 11 of 

the Inspector General Act of 1978 (5 U.S.C. App.) is amended— 

(1) in paragraph (1), by inserting ‘‘; the Director of the 

Federal Housing Finance Agency’’ after ‘‘Social Security 

Administration’’; and 

(2) in paragraph (2), by inserting ‘‘, the Federal Housing 

Finance Agency’’ after ‘‘Social Security Administration’’. 

(d) AUTHORITY TO CONTRACT FOR REVIEWS OF REGULATED ENTITIES.—Section 1319 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended— 

(1) in the section heading, by striking ‘‘ENTERPRISES BY

RATING ORGANIZATION’’ and inserting ‘‘REGULATED ENTITIES’’; 

and 

(2) by striking ‘‘enterprises’’ and inserting ‘‘regulated entities’’. 

(e) OFFICE OF THE OMBUDSMAN.—Section 1317 of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 

(12 U.S.C. 4517) is amended by adding at the end the following: 

‘‘(i) OMBUDSMAN.—The Director shall establish, by regulation, 

an Office of the Ombudsman within the Agency, which shall be 

responsible for considering complaints and appeals, from any regulated entity and any person that has a business relationship with 

a regulated entity, regarding any matter relating to the regulation 

and supervision of such regulated entity by the Agency. The regulation issued by the Director under this subsection shall specify 

the authority and duties of the Office of the Ombudsman.’’. 

Establishment. 

Regulations. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2669 

SEC. 1106. ASSESSMENTS. 

Section 1316 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4516) is amended— 

(1) by striking subsection (a) and inserting the following: 

‘‘(a) ANNUAL ASSESSMENTS.—The Director shall establish and 

collect from the regulated entities annual assessments in an amount 

not exceeding the amount sufficient to provide for reasonable costs 

(including administrative costs) and expenses of the Agency, 

including— 

‘‘(1) the expenses of any examinations under section 1317 

of this Act and under section 20 of the Federal Home Loan 

Bank Act; 

‘‘(2) the expenses of obtaining any reviews and credit 

assessments under section 1319; 

‘‘(3) such amounts in excess of actual expenses for any 

given year as deemed necessary by the Director to maintain 

a working capital fund in accordance with subsection (e); and 

‘‘(4) the windup of the affairs of the Office of Federal 

Housing Enterprise Oversight and the Federal Housing Finance 

Board under title III of the Federal Housing Finance Regulatory 

Reform Act of 2008.’’; 

(2) in subsection (b)— 

(A) by realigning the margins of paragraph (2) two 

ems from the left, so as to align the left margin of such 

paragraph with the left margins of paragraph (1); 

(B) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and 

(C) by inserting after paragraph (1) the following: 

‘‘(2) SEPARATE TREATMENT OF FEDERAL HOME LOAN BANK

AND ENTERPRISE ASSESSMENTS.—Assessments collected from the 

enterprises shall not exceed the amounts sufficient to provide 

for the costs and expenses described in subsection (a) relating 

to the enterprises. Assessments collected from the Federal 

Home Loan Banks shall not exceed the amounts sufficient 

to provide for the costs and expenses described in subsection 

(a) relating to the Federal Home Loan Banks.’’; 

(3) by striking subsection (c) and inserting the following: 

‘‘(c) INCREASED COSTS OF REGULATION.— 

‘‘(1) INCREASE FOR INADEQUATE CAPITALIZATION.—The semiannual payments made pursuant to subsection (b) by any regulated entity that is not classified (for purposes of subtitle B) 

as adequately capitalized may be increased, as necessary, in 

the discretion of the Director to pay additional estimated costs 

of regulation of the regulated entity. 

‘‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVITIES.—The 

Director may adjust the amounts of any semiannual payments 

for an assessment under subsection (a) that are to be paid 

pursuant to subsection (b) by a regulated entity, as necessary 

in the discretion of the Director, to ensure that the costs of 

enforcement activities under this Act for a regulated entity 

are borne only by such regulated entity. 

‘‘(3) ADDITIONAL ASSESSMENT FOR DEFICIENCIES.—If at any 

time, as a result of increased costs of regulation of a regulated 

entity that is not classified (for purposes of subtitle B) as 

adequately capitalized or as the result of supervisory or enforcement activities under this Act for a regulated entity, the amount 


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122 STAT. 2670 PUBLIC LAW 110–289—JULY 30, 2008 

available from any semiannual payment made by such regulated entity pursuant to subsection (b) is insufficient to cover 

the costs of the Agency with respect to such entity, the Director 

may make and collect from such regulated entity an immediate 

assessment to cover the amount of such deficiency for the 

semiannual period. If, at the end of any semiannual period 

during which such an assessment is made, any amount remains 

from such assessment, such remaining amount shall be 

deducted from the assessment for such regulated entity for 

the following semiannual period.’’; 

(4) in subsection (d), by striking ‘‘If’’ and inserting ‘‘Except 

with respect to amounts collected pursuant to subsection (a)(3), 

if’’; and 

(5) by striking subsections (e) through (g) and inserting 

the following: 

‘‘(e) WORKING CAPITAL FUND.—At the end of each year for 

which an assessment under this section is made, the Director shall 

remit to each regulated entity any amount of assessment collected 

from such regulated entity that is attributable to subsection (a)(3) 

and is in excess of the amount the Director deems necessary to 

maintain a working capital fund. 

‘‘(f) TREATMENT OF ASSESSMENTS.— 

‘‘(1) DEPOSIT.—Amounts received by the Director from 

assessments under this section may be deposited by the Director 

in the manner provided in section 5234 of the Revised Statutes 

of the United States (12 U.S.C. 192) for monies deposited by 

the Comptroller of the Currency. 

‘‘(2) NOT GOVERNMENT FUNDS.—The amounts received by 

the Director from any assessment under this section shall not 

be construed to be Government or public funds or appropriated 

money. 

‘‘(3) NO APPORTIONMENT OF FUNDS.—Notwithstanding any 

other provision of law, the amounts received by the Director 

from any assessment under this section shall not be subject 

to apportionment for the purpose of chapter 15 of title 31, 

United States Code, or under any other authority. 

‘‘(4) USE OF FUNDS.—The Director may use any amounts 

received by the Director from assessments under this section 

for compensation of the Director and other employees of the 

Agency and for all other expenses of the Director and the 

Agency. 

‘‘(5) AVAILABILITY OF OVERSIGHT FUND AMOUNTS.—Notwithstanding any other provision of law, any amounts remaining 

in the Federal Housing Enterprises Oversight Fund established 

under this section (as in effect before the effective date of 

the Federal Housing Finance Regulatory Reform Act of 2008, 

and any amounts remaining from assessments on the Federal 

Home Loan Banks pursuant to section 18(b) of the Federal 

Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such 

effective date, be treated for purposes of this subsection as 

amounts received from assessments under this section. 

‘‘(6) TREASURY INVESTMENTS.— 

‘‘(A) AUTHORITY.—The Director may request the Secretary of the Treasury to invest such portions of amounts 

received by the Director from assessments paid under this 

section that, in the Director’s discretion, are not required 

to meet the current working needs of the Agency. 


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‘‘(B) GOVERNMENT OBLIGATIONS.—Pursuant to a 

request under subparagraph (A), the Secretary of the 

Treasury shall invest such amounts in Government obligations guaranteed as to principal and interest by the United 

States with maturities suitable to the needs of the Agency 

and bearing interest at a rate determined by the Secretary 

of the Treasury taking into consideration current market 

yields on outstanding marketable obligations of the United 

States of comparable maturity. 

‘‘(g) BUDGET AND FINANCIAL MANAGEMENT.— ‘‘(1) FINANCIAL OPERATING PLANS AND FORECASTS.—The 

Director shall provide to the Director of the Office of Management and Budget copies of the Director’s financial operating 

plans and forecasts, as prepared by the Director in the ordinary 

course of the Agency’s operations, and copies of the quarterly 

reports of the Agency’s financial condition and results of operations, as prepared by the Director in the ordinary course 

of the Agency’s operations. 

‘‘(2) FINANCIAL STATEMENTS.—The Agency shall prepare 

annually a statement of— 

‘‘(A) assets and liabilities and surplus or deficit; 

‘‘(B) income and expenses; and 

‘‘(C) sources and application of funds. 

‘‘(3) FINANCIAL MANAGEMENT SYSTEMS.—The Agency shall 

implement and maintain financial management systems that— 

‘‘(A) comply substantially with Federal financial 

management systems requirements and applicable Federal 

accounting standards; and 

‘‘(B) use a general ledger system that accounts for 

activity at the transaction level. 

‘‘(4) ASSERTION OF INTERNAL CONTROLS.—The Director shall 

provide to the Comptroller General of the United States an 

assertion as to the effectiveness of the internal controls that 

apply to financial reporting by the Agency, using the standards 

established in section 3512(c) of title 31, United States Code. 

‘‘(5) RULE OF CONSTRUCTION.—This subsection may not be 

construed as implying any obligation on the part of the Director 

to consult with or obtain the consent or approval of the Director 

of the Office of Management and Budget with respect to any 

report, plan, forecast, or other information referred to in paragraph (1) or any jurisdiction or oversight over the affairs or 

operations of the Agency. 

‘‘(h) AUDIT OF AGENCY.— 

‘‘(1) IN GENERAL.—The Comptroller General shall annually 

audit the financial transactions of the Agency in accordance 

with the United States generally accepted government auditing 

standards as may be prescribed by the Comptroller General 

of the United States. The audit shall be conducted at the 

place or places where accounts of the Agency are normally 

kept. The representatives of the Government Accountability 

Office shall have access to the personnel and to all books, 

accounts, documents, papers, records (including electronic 

records), reports, files, and all other papers, automated data, 

things, or property belonging to or under the control of or 

used or employed by the Agency pertaining to its financial 

transactions and necessary to facilitate the audit, and such 

representatives shall be afforded full facilities for verifying 

Deadline. 

Records. 

Deadline. 

Reports. 


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122 STAT. 2672 PUBLIC LAW 110–289—JULY 30, 2008 

transactions with the balances or securities held by depositories, fiscal agents, and custodians. All such books, accounts, 

documents, records, reports, files, papers, and property of the 

Agency shall remain in possession and custody of the Agency. 

The Comptroller General may obtain and duplicate any such 

books, accounts, documents, records, working papers, automated data and files, or other information relevant to such 

audit without cost to the Comptroller General and the Comptroller General’s right of access to such information shall be 

enforceable pursuant to section 716(c) of title 31, United States 

Code. 

‘‘(2) REPORT.—The Comptroller General shall submit to 

the Congress a report of each annual audit conducted under 

this subsection. The report to the Congress shall set forth 

the scope of the audit and shall include the statement of assets 

and liabilities and surplus or deficit, the statement of income 

and expenses, the statement of sources and application of funds, 

and such comments and information as may be deemed necessary to inform Congress of the financial operations and condition of the Agency, together with such recommendations with 

respect thereto as the Comptroller General may deem advisable. 

A copy of each report shall be furnished to the President and 

to the Agency at the time submitted to the Congress. 

‘‘(3) ASSISTANCE AND COSTS.—For the purpose of conducting 

an audit under this subsection, the Comptroller General may, 

in the discretion of the Comptroller General, employ by contract, without regard to section 3709 of the Revised Statutes 

of the United States (41 U.S.C. 5), professional services of 

firms and organizations of certified public accountants for temporary periods or for special purposes. Upon the request of 

the Comptroller General, the Director of the Agency shall 

transfer to the Government Accountability Office from funds 

available, the amount requested by the Comptroller General 

to cover the full costs of any audit and report conducted by 

the Comptroller General. The Comptroller General shall credit 

funds transferred to the account established for salaries and 

expenses of the Government Accountability Office, and such 

amount shall be available upon receipt and without fiscal year 

limitation to cover the full costs of the audit and report.’’. 

SEC. 1107. REGULATIONS AND ORDERS. 

Section 1319G of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4526) is amended— 

(1) by striking subsection (a) and inserting the following: 

‘‘(a) AUTHORITY.—The Director shall issue any regulations, 

guidelines, or orders necessary to carry out the duties of the Director 

under this title or the authorizing statutes, and to ensure that 

the purposes of this title and the authorizing statutes are accomplished.’’; and 

(2) by striking subsection (c). 

SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS. 

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting 

after section 1313A, as added by this Act, the following new section: 

Guidelines. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2673 

‘‘SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS. 

‘‘(a) STANDARDS.—The Director shall establish standards, by 

regulation or guideline, for each regulated entity relating to— 

‘‘(1) adequacy of internal controls and information systems 

taking into account the nature and scale of business operations; 

‘‘(2) independence and adequacy of internal audit systems; 

‘‘(3) management of interest rate risk exposure; 

‘‘(4) management of market risk, including standards that 

provide for systems that accurately measure, monitor, and control market risks and, as warranted, that establish limitations 

on market risk; 

‘‘(5) adequacy and maintenance of liquidity and reserves; 

‘‘(6) management of asset and investment portfolio growth; 

‘‘(7) investments and acquisitions of assets by a regulated 

entity, to ensure that they are consistent with the purposes 

of this title and the authorizing statutes; 

‘‘(8) overall risk management processes, including adequacy 

of oversight by senior management and the board of directors 

and of processes and policies to identify, measure, monitor, 

and control material risks, including reputational risks, and 

for adequate, well-tested business resumption plans for all 

major systems with remote site facilities to protect against 

disruptive events; 

‘‘(9) management of credit and counterparty risk, including 

systems to identify concentrations of credit risk and prudential 

limits to restrict exposure of the regulated entity to a single 

counterparty or groups of related counterparties; 

‘‘(10) maintenance of adequate records, in accordance with 

consistent accounting policies and practices that enable the 

Director to evaluate the financial condition of the regulated 

entity; and 

‘‘(11) such other operational and management standards 

as the Director determines to be appropriate. 

‘‘(b) FAILURE TO MEET STANDARDS.— 

‘‘(1) PLAN REQUIREMENT.— 

‘‘(A) IN GENERAL.—If the Director determines that a 

regulated entity fails to meet any standard established 

under subsection (a)— 

‘‘(i) if such standard is established by regulation, 

the Director shall require the regulated entity to 

submit an acceptable plan to the Director within the 

time allowed under subparagraph (C); and 

‘‘(ii) if such standard is established by guideline, 

the Director may require the regulated entity to submit 

a plan described in clause (i). 

‘‘(B) CONTENTS.—Any plan required under subparagraph (A) shall specify the actions that the regulated entity 

will take to correct the deficiency. If the regulated entity 

is undercapitalized, the plan may be a part of the capital 

restoration plan for the regulated entity under section 

1369C. 

‘‘(C) DEADLINES FOR SUBMISSION AND REVIEW.—The 

Director shall by regulation establish deadlines that— 

‘‘(i) provide the regulated entities with reasonable 

time to submit plans required under subparagraph 

(A), and generally require a regulated entity to submit 

Regulations. 

Regulations. 

Guidelines. 

12 USC 4513b. 


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a plan not later than 30 days after the Director determines that the entity fails to meet any standard established under subsection (a); and 

‘‘(ii) require the Director to act on plans expeditiously, and generally not later than 30 days after 

the plan is submitted. 

‘‘(2) REQUIRED ORDER UPON FAILURE TO SUBMIT OR IMPLEMENT PLAN.—If a regulated entity fails to submit an acceptable 

plan within the time allowed under paragraph (1)(C), or fails 

in any material respect to implement a plan accepted by the 

Director, the following shall apply: 

‘‘(A) REQUIRED CORRECTION OF DEFICIENCY.—The 

Director shall, by order, require the regulated entity to 

correct the deficiency. 

‘‘(B) OTHER AUTHORITY.—The Director may, by order, 

take one or more of the following actions until the deficiency 

is corrected: 

‘‘(i) Prohibit the regulated entity from permitting 

its average total assets (as such term is defined in 

section 1316(b)) during any calendar quarter to exceed 

its average total assets during the preceding calendar 

quarter, or restrict the rate at which the average total 

assets of the entity may increase from one calendar 

quarter to another. 

‘‘(ii) Require the regulated entity— 

‘‘(I) in the case of an enterprise, to increase 

its ratio of core capital to assets. 

‘‘(II) in the case of a Federal Home Loan Bank, 

to increase its ratio of total capital (as such term 

is defined in section 6(a)(5) of the Federal Home 

Loan Bank Act (12 U.S.C. 1426(a)(5)) to assets. 

‘‘(iii) Require the regulated entity to take any other 

action that the Director determines will better carry 

out the purposes of this section than any of the actions 

described in this subparagraph. 

‘‘(3) MANDATORY RESTRICTIONS.—In complying with paragraph (2), the Director shall take one or more of the actions 

described in clauses (i) through (iii) of paragraph (2)(B) if— 

‘‘(A) the Director determines that the regulated entity 

fails to meet any standard prescribed under subsection 

(a); 

‘‘(B) the regulated entity has not corrected the deficiency; and 

‘‘(C) during the 18-month period before the date on 

which the regulated entity first failed to meet the standard, 

the entity underwent extraordinary growth, as defined by 

the Director. 

‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT AFFECTED.—The 

authority of the Director under this section is in addition to any 

other authority of the Director.’’. 

SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS 

AND LIABILITIES. 

(a) IN GENERAL.—Subtitle B of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611 et 

seq.) is amended— 

Applicability. 


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(1) by striking the subtitle designation and heading and 

inserting the following: 

‘‘Subtitle B—Required Capital Levels for 

Regulated Entities, Special Enforcement 

Powers, and Reviews of Assets and Liabilities’’; 

and 

(2) by adding at the end the following new section: 

‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES. 

‘‘(a) IN GENERAL.—The Director shall, by regulation, establish 

criteria governing the portfolio holdings of the enterprises, to ensure 

that the holdings are backed by sufficient capital and consistent 

with the mission and the safe and sound operations of the enterprises. In establishing such criteria, the Director shall consider 

the ability of the enterprises to provide a liquid secondary market 

through securitization activities, the portfolio holdings in relation 

to the overall mortgage market, and adherence to the standards 

specified in section 1313B. 

‘‘(b) TEMPORARY ADJUSTMENTS.—The Director may, by order, 

make temporary adjustments to the established standards for an 

enterprise or both enterprises, such as during times of economic 

distress or market disruption. 

‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR ACQUISITION.— 

The Director shall monitor the portfolio of each enterprise. Pursuant 

to subsection (a) and notwithstanding the capital classifications 

of the enterprises, the Director may, by order, require an enterprise, 

under such terms and conditions as the Director determines to 

be appropriate, to dispose of or acquire any asset, if the Director 

determines that such action is consistent with the purposes of 

this Act or any of the authorizing statutes.’’. 

(b) REGULATIONS.—Not later than the expiration of the 180- 

day period beginning on the effective date of this Act, the Director 

shall issue regulations pursuant to section 1369E(a) of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 

(as added by subsection (a) of this section) establishing the portfolio 

holdings standards under such section. 

SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS. 

(a) IN GENERAL.—Section 1361 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611) 

is amended to read as follows: 

‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES. 

‘‘(a) IN GENERAL.— 

‘‘(1) ENTERPRISES.—The Director shall, by regulation, establish risk-based capital requirements for the enterprises to 

ensure that the enterprises operate in a safe and sound manner, 

maintaining sufficient capital and reserves to support the risks 

that arise in the operations and management of the enterprises. 

‘‘(2) FEDERAL HOME LOAN BANKS.—The Director shall establish risk-based capital standards under section 6 of the Federal 

Home Loan Bank Act for the Federal Home Loan Banks. 

Standards. 

Regulations. 

Deadline. 

Standards. 

12 USC 4624 

note. 

Regulations. 

Criteria. 

12 USC 4624. 


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‘‘(b) NO LIMITATION.—Nothing in this section shall limit the 

authority of the Director to require other reports or undertakings, 

or take other action, in furtherance of the responsibilities of the 

Director under this Act.’’. 

(b) FEDERAL HOME LOAN BANKS RISK-BASED CAPITAL.—Section 

6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) 

is amended— 

(1) by striking subparagraph (A) and inserting the following: 

‘‘(A) RISK-BASED CAPITAL STANDARDS.—The Director 

shall, by regulation, establish risk-based capital standards 

for the Federal Home Loan Banks to ensure that the Federal Home Loan Banks operate in a safe and sound manner, 

with sufficient permanent capital and reserves to support 

the risks that arise in the operations and management 

of the Federal Home Loans Banks.’’; and 

(2) in subparagraph (B), by striking ‘‘(A)(ii)’’ and inserting 

‘‘(A)’’. 

SEC. 1111. MINIMUM CAPITAL LEVELS. 

Section 1362 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4612) is amended— 

(1) in subsection (a), by striking ‘‘IN GENERAL’’ and inserting 

‘‘ENTERPRISES’’; and 

(2) by striking subsection (b) and inserting the following: 

‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes of this subtitle, 

the minimum capital level for each Federal Home Loan Bank shall 

be the minimum capital required to be maintained to comply with 

the leverage requirement for the bank established under section 

6(a)(2) of the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)). 

‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAPITAL LEVELS.— 

Notwithstanding subsections (a) and (b) and notwithstanding the 

capital classifications of the regulated entities, the Director may, 

by regulations issued under section 1319G, establish a minimum 

capital level for the enterprises, for the Federal Home Loan Banks, 

or for both the enterprises and the banks, that is higher than 

the level specified in subsection (a) for the enterprises or the level 

specified in subsection (b) for the Federal Home Loan Banks, to 

the extent needed to ensure that the regulated entities operate 

in a safe and sound manner. 

‘‘(d) AUTHORITY TO REQUIRE TEMPORARY INCREASE.— 

‘‘(1) IN GENERAL.—Notwithstanding subsections (a) and (b) 

and any minimum capital level established pursuant to subsection (c), the Director may, by order, increase the minimum 

capital level for a regulated entity on a temporary basis, when 

the Director determines that such an increase is necessary 

and consistent with the prudential regulation and the safe 

and sound operations of a regulated entity. 

‘‘(2) RESCISSION.—The Director shall rescind any temporary 

minimum capital level established under paragraph (1) when 

the Director determines that the circumstances or facts no 

longer justify the temporary minimum capital level. 

‘‘(3) REGULATIONS REQUIRED.—The Director shall issue 

regulations establishing— 

‘‘(A) standards for the imposition of a temporary 

increase in minimum capital under paragraph (1); 

Regulations. 


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‘‘(B) the standards and procedures that the Director 

will use to make the determination referred to in paragraph 

(2); and 

‘‘(C) a reasonable time frame for periodic review of 

any temporary increase in minimum capital for the purpose 

of making the determination referred to in paragraph (2). 

‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL CAPITAL AND

RESERVE REQUIREMENTS FOR PARTICULAR PURPOSES.—The Director 

may, at any time by order or regulation, establish such capital 

or reserve requirements with respect to any product or activity 

of a regulated entity, as the Director considers appropriate to ensure 

that the regulated entity operates in a safe and sound manner, 

with sufficient capital and reserves to support the risks that arise 

in the operations and management of the regulated entity. 

‘‘(f) PERIODIC REVIEW.—The Director shall periodically review 

the amount of core capital maintained by the enterprises, the 

amount of capital retained by the Federal Home Loan Banks, and 

the minimum capital levels established for such regulated entities 

pursuant to this section.’’. 

SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS. 

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 

is amended by adding at the end the following: 

‘‘SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL 

HOME LOAN MORTGAGE CORPORATION, FEDERAL HOME 

LOAN BANKS. 

‘‘(a) FEDERAL NATIONAL MORTGAGE ASSOCIATION AND FEDERAL

HOME LOAN MORTGAGE CORPORATION.—No class of equity securities 

of the Federal National Mortgage Association or the Federal Home 

Loan Mortgage Corporation shall be treated as an exempted security 

for purposes of section 12, 13, 14, or 16. 

‘‘(b) FEDERAL HOME LOAN BANKS.— 

‘‘(1) REGISTRATION.—Each Federal Home Loan Bank shall 

register a class of its common stock under section 12(g), not 

later than 120 days after the date of enactment of the Federal 

Housing Finance Regulatory Reform Act of 2008, and shall 

thereafter maintain such registration and be treated for purposes of this title as an ‘issuer’, the securities of which are 

required to be registered under section 12, regardless of the 

number of members holding such stock at any given time. 

‘‘(2) STANDARDS RELATING TO AUDIT COMMITTEES.—Each 

Federal Home Loan Bank shall comply with the rules issued 

by the Commission under section 10A(m). 

‘‘(c) DEFINITIONS.—For purposes of this section, the following 

definitions shall apply: 

‘‘(1) FEDERAL HOME LOAN BANK; MEMBER.—The terms ‘Federal Home Loan Bank’ and ‘member’, have the same meanings 

as in section 2 of the Federal Home Loan Bank Act. 

‘‘(2) FEDERAL NATIONAL MORTGAGE ASSOCIATION.—The term 

‘Federal National Mortgage Association’ means the corporation 

created by the Federal National Mortgage Association Charter 

Act. 

‘‘(3) FEDERAL HOME LOAN MORTGAGE CORPORATION.—The 

term ‘Federal Home Loan Mortgage Corporation’ means the 

corporation created by the Federal Home Loan Mortgage Corporation Act.’’. 

Deadline. 

15 USC 7800. 


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SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION. 

(a) IN GENERAL.—Section 1318 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518) 

is amended— 

(1) in the section heading, by striking ‘‘OF EXCESSIVE’’ 

and inserting ‘‘AND WITHHOLDING OF EXECUTIVE’’; 

(2) in subsection (a)— 

(A) by striking ‘‘enterprise’’ and inserting ‘‘regulated 

entity’’; and 

(B) by striking ‘‘enterprises’’ and inserting ‘‘regulated 

entities’’; 

(3) by redesignating subsection (b) as subsection (d); and 

(4) by inserting after subsection (a) the following: 

‘‘(b) FACTORS.—In making any determination under subsection 

(a), the Director may take into consideration any factors the Director 

considers relevant, including any wrongdoing on the part of the 

executive officer, and such wrongdoing shall include any fraudulent 

act or omission, breach of trust or fiduciary duty, violation of 

law, rule, regulation, order, or written agreement, and insider abuse 

with respect to the regulated entity. The approval of an agreement 

or contract pursuant to section 309(d)(3)(B) of the Federal National 

Mortgage Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or 

section 303(h)(2) of the Federal Home Loan Mortgage Corporation 

Act (12 U.S.C. 1452(h)(2)) shall not preclude the Director from 

making any subsequent determination under subsection (a). 

‘‘(c) WITHHOLDING OF COMPENSATION.—In carrying out subsection (a), the Director may require a regulated entity to withhold 

any payment, transfer, or disbursement of compensation to an 

executive officer, or to place such compensation in an escrow 

account, during the review of the reasonableness and comparability 

of compensation.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) FANNIE MAE.—Section 309(d) of the Federal National 

Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is 

amended by adding at the end the following new paragraph: 

‘‘(4) Notwithstanding any other provision of this section, the 

corporation shall not transfer, disburse, or pay compensation to 

any executive officer, or enter into an agreement with such executive 

officer, without the approval of the Director, for matters being 

reviewed under section 1318 of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).’’. 

(2) FREDDIE MAC.—Section 303(h) of the Federal Home 

Loan Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended 

by adding at the end the following new paragraph: 

‘‘(4) Notwithstanding any other provision of this section, the 

Corporation shall not transfer, disburse, or pay compensation to 

any executive officer, or enter into an agreement with such executive 

officer, without the approval of the Director, for matters being 

reviewed under section 1318 of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).’’. 

(3) FEDERAL HOME LOAN BANKS.—Section 7 of the Federal 

Home Loan Bank Act (12 U.S.C. 1427) is amended by adding 

at the end the following new subsection: 

‘‘(l) WITHHOLDING OF COMPENSATION.—Notwithstanding any 

other provision of this section, a Federal Home Loan Bank shall 

not transfer, disburse, or pay compensation to any executive officer, 


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or enter into an agreement with such executive officer, without 

the approval of the Director, for matters being reviewed under 

section 1318 of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992 (12 U.S.C. 4518).’’. 

SEC. 1114. LIMIT ON GOLDEN PARACHUTES. 

Section 1318 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended 

by adding at the end the following: 

‘‘(e) AUTHORITY TO REGULATE OR PROHIBIT CERTAIN FORMS

OF BENEFITS TO AFFILIATED PARTIES.— ‘‘(1) GOLDEN PARACHUTES AND INDEMNIFICATION PAY- MENTS.—The Director may prohibit or limit, by regulation or 

order, any golden parachute payment or indemnification payment. 

‘‘(2) FACTORS TO BE TAKEN INTO ACCOUNT.—The Director 

shall prescribe, by regulation, the factors to be considered by 

the Director in taking any action pursuant to paragraph (1), 

which may include such factors as— 

‘‘(A) whether there is a reasonable basis to believe 

that the affiliated party has committed any fraudulent 

act or omission, breach of trust or fiduciary duty, or insider 

abuse with regard to the regulated entity that has had 

a material effect on the financial condition of the regulated 

entity; 

‘‘(B) whether there is a reasonable basis to believe 

that the affiliated party is substantially responsible for 

the insolvency of the regulated entity, the appointment 

of a conservator or receiver for the regulated entity, or 

the troubled condition of the regulated entity (as defined 

in regulations prescribed by the Director); 

‘‘(C) whether there is a reasonable basis to believe 

that the affiliated party has materially violated any 

applicable provision of Federal or State law or regulation 

that has had a material effect on the financial condition 

of the regulated entity; 

‘‘(D) whether the affiliated party was in a position 

of managerial or fiduciary responsibility; and 

‘‘(E) the length of time that the party was affiliated 

with the regulated entity, and the degree to which— 

‘‘(i) the payment reasonably reflects compensation 

earned over the period of employment; and 

‘‘(ii) the compensation involved represents a 

reasonable payment for services rendered. 

‘‘(3) CERTAIN PAYMENTS PROHIBITED.—No regulated entity 

may prepay the salary or any liability or legal expense of 

any affiliated party if such payment is made— 

‘‘(A) in contemplation of the insolvency of such regulated entity, or after the commission of an act of insolvency; 

and 

‘‘(B) with a view to, or having the result of— 

‘‘(i) preventing the proper application of the assets 

of the regulated entity to creditors; or 

‘‘(ii) preferring one creditor over another. 

‘‘(4) GOLDEN PARACHUTE PAYMENT DEFINED.— ‘‘(A) IN GENERAL.—For purposes of this subsection, the 

term ‘golden parachute payment’ means any payment (or 

Regulations. 


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any agreement to make any payment) in the nature of 

compensation by any regulated entity for the benefit of 

any affiliated party pursuant to an obligation of such regulated entity that— 

‘‘(i) is contingent on the termination of such party’s 

affiliation with the regulated entity; and 

‘‘(ii) is received on or after the date on which— 

‘‘(I) the regulated entity became insolvent; 

‘‘(II) any conservator or receiver is appointed 

for such regulated entity; or 

‘‘(III) the Director determines that the regulated entity is in a troubled condition (as defined 

in the regulations of the Director). 

‘‘(B) CERTAIN PAYMENTS IN CONTEMPLATION OF AN

EVENT.—Any payment which would be a golden parachute 

payment but for the fact that such payment was made 

before the date referred to in subparagraph (A)(ii) shall 

be treated as a golden parachute payment if the payment 

was made in contemplation of the occurrence of an event 

described in any subclause of such subparagraph. 

‘‘(C) CERTAIN PAYMENTS NOT INCLUDED.—For purposes 

of this subsection, the term ‘golden parachute payment’ 

shall not include— 

‘‘(i) any payment made pursuant to a retirement 

plan which is qualified (or is intended to be qualified) 

under section 401 of the Internal Revenue Code of 

1986, or other nondiscriminatory benefit plan; 

‘‘(ii) any payment made pursuant to a bona fide 

deferred compensation plan or arrangement which the 

Director determines, by regulation or order, to be 

permissible; or 

‘‘(iii) any payment made by reason of the death 

or disability of an affiliated party. 

‘‘(5) OTHER DEFINITIONS.—For purposes of this subsection, 

the following definitions shall apply: 

‘‘(A) INDEMNIFICATION PAYMENT.—Subject to paragraph 

(6), the term ‘indemnification payment’ means any payment 

(or any agreement to make any payment) by any regulated 

entity for the benefit of any person who is or was an 

affiliated party, to pay or reimburse such person for any 

liability or legal expense with regard to any administrative 

proceeding or civil action instituted by the Agency which 

results in a final order under which such person— 

‘‘(i) is assessed a civil money penalty; 

‘‘(ii) is removed or prohibited from participating 

in conduct of the affairs of the regulated entity; or 

‘‘(iii) is required to take any affirmative action 

to correct certain conditions resulting from violations 

or practices, by order of the Director. 

‘‘(B) LIABILITY OR LEGAL EXPENSE.—The term ‘liability 

or legal expense’ means— 

‘‘(i) any legal or other professional expense 

incurred in connection with any claim, proceeding, or 

action; 

‘‘(ii) the amount of, and any cost incurred in 

connection with, any settlement of any claim, proceeding, or action; and 


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‘‘(iii) the amount of, and any cost incurred in 

connection with, any judgment or penalty imposed with 

respect to any claim, proceeding, or action. 

‘‘(C) PAYMENT.—The term ‘payment’ includes— 

‘‘(i) any direct or indirect transfer of any funds 

or any asset; and 

‘‘(ii) any segregation of any funds or assets for 

the purpose of making, or pursuant to an agreement 

to make, any payment after the date on which such 

funds or assets are segregated, without regard to 

whether the obligation to make such payment is contingent on— 

‘‘(I) the determination, after such date, of the 

liability for the payment of such amount; or 

‘‘(II) the liquidation, after such date, of the 

amount of such payment. 

‘‘(6) CERTAIN COMMERCIAL INSURANCE COVERAGE NOT

TREATED AS COVERED BENEFIT PAYMENT.—No provision of this 

subsection shall be construed as prohibiting any regulated 

entity from purchasing any commercial insurance policy or 

fidelity bond, except that, subject to any requirement described 

in paragraph (5)(A)(iii), such insurance policy or bond shall 

not cover any legal or liability expense of the regulated entity 

which is described in paragraph (5)(A).’’. 

SEC. 1115. REPORTING OF FRAUDULENT LOANS. 

Part 1 of subtitle C of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), 

as amended by this Act, is amended by adding at the end the 

following: 

‘‘SEC. 1379E. REPORTING OF FRAUDULENT LOANS. 

‘‘(a) REQUIREMENT TO REPORT.—The Director shall require a 

regulated entity to submit to the Director a timely report upon 

discovery by the regulated entity that it has purchased or sold 

a fraudulent loan or financial instrument, or suspects a possible 

fraud relating to the purchase or sale of any loan or financial 

instrument. The Director shall require each regulated entity to 

establish and maintain procedures designed to discover any such 

transactions. 

‘‘(b) PROTECTION FROM LIABILITY FOR REPORTS.—Any regulated 

entity that, in good faith, makes a report pursuant to subsection 

(a), and any entity-affiliated party, that, in good faith, makes or 

requires another to make any such report, shall not be liable 

to any person under any provision of law or regulation, any constitution, law, or regulation of any State or political subdivision of 

any State, or under any contract or other legally enforceable agreement (including any arbitration agreement) for such report or for 

any failure to provide notice of such report to the person who 

is the subject of such report or any other persons identified in 

the report.’’. 

SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN 

AGENCY WORKFORCE. 

Section 1319A of the Housing and Community Development 

Act of 1992 (12 U.S.C. 4520) is amended— 

(1) in the section heading, by striking ‘‘EQUAL OPPOR- TUNITY IN SOLICITATION OF CONTRACTS’’ and inserting 

Procedures. 

12 USC 4642. 


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‘‘MINORITY AND WOMEN INCLUSION; DIVERSITY REQUIREMENTS’’; 

(2) in subsection (a), by striking ‘‘(a) IN GENERAL.—Each 

enterprise’’ and inserting ‘‘(e) OUTREACH.—Each regulated 

entity’’; and 

(3) by striking subsection (b); 

(4) by inserting before subsection (e), as so redesignated 

by paragraph (2) of this section, the following new subsections: 

‘‘(a) OFFICE OF MINORITY AND WOMEN INCLUSION.—Each regulated entity shall establish an Office of Minority and Women Inclusion, or designate an office of the entity, that shall be responsible 

for carrying out this section and all matters of the entity relating 

to diversity in management, employment, and business activities 

in accordance with such standards and requirements as the Director 

shall establish. 

‘‘(b) INCLUSION IN ALL LEVELS OF BUSINESS ACTIVITIES.—Each 

regulated entity shall develop and implement standards and procedures to ensure, to the maximum extent possible, the inclusion 

and utilization of minorities (as such term is defined in section 

1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)) and women, and minorityand women-owned businesses (as such terms are defined in section 

21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) 

(including financial institutions, investment banking firms, mortgage banking firms, asset management firms, broker-dealers, financial services firms, underwriters, accountants, brokers, investment 

consultants, and providers of legal services) in all business and 

activities of the regulated entity at all levels, including in procurement, insurance, and all types of contracts (including contracts 

for the issuance or guarantee of any debt, equity, or mortgagerelated securities, the management of its mortgage and securities 

portfolios, the making of its equity investments, the purchase, sale 

and servicing of single- and multi-family mortgage loans, and the 

implementation of its affordable housing program and initiatives). 

The processes established by each regulated entity for review and 

evaluation for contract proposals and to hire service providers shall 

include a component that gives consideration to the diversity of 

the applicant. 

‘‘(c) APPLICABILITY.—This section shall apply to all contracts 

of a regulated entity for services of any kind, including services 

that require the services of investment banking, asset management 

entities, broker-dealers, financial services entities, underwriters, 

accountants, investment consultants, and providers of legal services. 

‘‘(d) INCLUSION IN ANNUAL REPORTS.—Each regulated entity 

shall include, in the annual report submitted by the entity to 

the Director pursuant to section 309(k) of the Federal National 

Mortgage Association Charter Act (12 U.S.C. 1723a(k)), section 

307(c) of the Federal Home Loan Mortgage Corporation Act (12 

U.S.C. 1456(c)), and section 20 of the Federal Home Loan Bank 

Act (12 U.S.C. 1440), as applicable, detailed information describing 

the actions taken by the entity pursuant to this section, which 

shall include a statement of the total amounts paid by the entity 

to third party contractors since the last such report and the percentage of such amounts paid to businesses described in subsection 

(b) of this section.’’; and 

(5) by adding at the end the following new subsection: 

Contracts. 

Standards. 

Procedures. 

Establishment. 


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‘‘(f) DIVERSITY IN AGENCY WORKFORCE.—The Agency shall take 

affirmative steps to seek diversity in its workforce at all levels 

of the agency consistent with the demographic diversity of the 

United States, which shall include— 

‘‘(1) heavily recruiting at historically Black colleges and 

universities, Hispanic-serving institutions, women’s colleges, 

and colleges that typically serve majority minority populations; 

‘‘(2) sponsoring and recruiting at job fairs in urban communities, and placing employment advertisements in newspapers 

and magazines oriented toward women and people of color; 

‘‘(3) partnering with organizations that are focused on 

developing opportunities for minorities and women to place 

talented young minorities and women in industry internships, 

summer employment, and full-time positions; and 

‘‘(4) where feasible, partnering with inner-city high schools, 

girls’ high schools, and high schools with majority minority 

populations to establish or enhance financial literacy programs 

and provide mentoring.’’. 

SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS 

OF REGULATED ENTITIES BY SECRETARY OF TREASURY. 

(a) FANNIE MAE.—Section 304 of the Federal National Mortgage 

Association Charter Act (12 U.S.C. 1719) is amended by adding 

at the end the following new subsection: 

‘‘(g) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS AND SECURITIES; CONDITIONS.— 

‘‘(1) AUTHORITY TO PURCHASE.— 

‘‘(A) GENERAL AUTHORITY.—In addition to the authority 

under subsection (c) of this section, the Secretary of the 

Treasury is authorized to purchase any obligations and 

other securities issued by the corporation under any section 

of this Act, on such terms and conditions as the Secretary 

may determine and in such amounts as the Secretary may 

determine. Nothing in this subsection requires the corporation to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the corporation. Nothing in this subsection permits or authorizes 

the Secretary, without the agreement of the corporation, 

to engage in open market purchases of the common securities of the corporation. 

‘‘(B) EMERGENCY DETERMINATION REQUIRED.—In 

connection with any use of this authority, the Secretary 

must determine that such actions are necessary to— 

‘‘(i) provide stability to the financial markets; 

‘‘(ii) prevent disruptions in the availability of mortgage finance; and 

‘‘(iii) protect the taxpayer. 

‘‘(C) CONSIDERATIONS.—To protect the taxpayers, the 

Secretary of the Treasury shall take into consideration 

the following in connection with exercising the authority 

contained in this paragraph: 

‘‘(i) The need for preferences or priorities regarding 

payments to the Government. 

‘‘(ii) Limits on maturity or disposition of obligations 

or securities to be purchased. 

‘‘(iii) The corporation’s plan for the orderly resumption of private market funding or capital market access. 


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‘‘(iv) The probability of the corporation fulfilling 

the terms of any such obligation or other security, 

including repayment. 

‘‘(v) The need to maintain the corporation’s status 

as a private shareholder-owned company. 

‘‘(vi) Restrictions on the use of corporation 

resources, including limitations on the payment of dividends and executive compensation and any such other 

terms and conditions as appropriate for those purposes. 

‘‘(D) REPORTS TO CONGRESS.—Upon exercise of this 

authority, the Secretary shall report to the Committees 

on the Budget, Financial Services, and Ways and Means 

of the House of Representatives and the Committees on 

the Budget, Finance, and Banking, Housing, and Urban 

Affairs of the Senate as to the necessity for the purchase 

and the determinations made by the Secretary under 

subparagraph (B) and with respect to the considerations 

required under subparagraph (C), and the size, terms, and 

probability of repayment or fulfillment of other terms of 

such purchase. 

‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.— 

‘‘(A) EXERCISE OF RIGHTS.—The Secretary of the 

Treasury may, at any time, exercise any rights received 

in connection with such purchases. 

‘‘(B) SALE OF OBLIGATION AND SECURITIES.—The Secretary of the Treasury may, at any time, subject to the 

terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any 

obligation or security acquired by the Secretary under this 

subsection. 

‘‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGATIONS OR SECURITIES.—The authority of the Secretary of 

the Treasury to hold, exercise any rights received in connection with, or sell, any obligations or securities purchased 

is not subject to the provisions of paragraph (4). 

‘‘(3) FUNDING.—For the purpose of the authorities granted 

in this subsection, the Secretary of the Treasury may use 

the proceeds of the sale of any securities issued under chapter 

31 of Title 31, and the purposes for which securities may 

be issued under chapter 31 of Title 31 are extended to include 

such purchases and the exercise of any rights in connection 

with such purchases. Any funds expended for the purchase 

of, or modifications to, obligations and securities, or the exercise 

of any rights received in connection with such purchases under 

this subsection shall be deemed appropriated at the time of 

such purchase, modification, or exercise. 

‘‘(4) TERMINATION OF AUTHORITY.—The authority under this 

subsection (g), with the exception of paragraphs (2) and (3) 

of this subsection, shall expire December 31, 2009. 

‘‘(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECUTIVE COMPENSATION.—The Director shall have the power to 

approve, disapprove, or modify the executive compensation of 

the corporation, as defined under Regulation S-K, 17 C.F.R. 

229.’’. 

(b) FREDDIE MAC.—Section 306 of the Federal Home Loan 

Mortgage Corporation Act (12 U.S.C. 1455) is amended by adding 

at the end the following new subsection: 


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‘‘(l) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS AND SECURITIES; CONDITIONS.— 

‘‘(1) AUTHORITY TO PURCHASE.— 

‘‘(A) GENERAL AUTHORITY.—In addition to the authority 

under subsection (c) of this section, the Secretary of the 

Treasury is authorized to purchase any obligations and 

other securities issued by the Corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires 

the Corporation to issue obligations or securities to the 

Secretary without mutual agreement between the Secretary 

and the Corporation. Nothing in this subsection permits 

or authorizes the Secretary, without the agreement of the 

Corporation, to engage in open market purchases of the 

common securities of the Corporation. 

‘‘(B) EMERGENCY DETERMINATION REQUIRED.—In 

connection with any use of this authority, the Secretary 

must determine that such actions are necessary to— 

‘‘(i) provide stability to the financial markets; 

‘‘(ii) prevent disruptions in the availability of mortgage finance; and 

‘‘(iii) protect the taxpayer. 

‘‘(C) CONSIDERATIONS.—To protect the taxpayers, the 

Secretary of the Treasury shall take into consideration 

the following in connection with exercising the authority 

contained in this paragraph: 

‘‘(i) The need for preferences or priorities regarding 

payments to the Government. 

‘‘(ii) Limits on maturity or disposition of obligations 

or securities to be purchased. 

‘‘(iii) The Corporation’s plan for the orderly 

resumption of private market funding or capital market 

access. 

‘‘(iv) The probability of the Corporation fulfilling 

the terms of any such obligation or other security, 

including repayment. 

‘‘(v) The need to maintain the Corporation’s status 

as a private shareholder-owned company. 

‘‘(vi) Restrictions on the use of Corporation 

resources, including limitations on the payment of dividends and executive compensation and any such other 

terms and conditions as appropriate for those purposes. 

‘‘(D) REPORTS TO CONGRESS.—Upon exercise of this 

authority, the Secretary shall report to the Committees 

on the Budget, Financial Services, and Ways and Means 

of the House of Representatives and the Committees on 

the Budget, Finance, and Banking, Housing, and Urban 

Affairs of the Senate as to the necessity for the purchase 

and the determinations made by the Secretary under 

subparagraph (B) and with respect to the considerations 

required under subparagraph (C), and the size, terms, and 

probability of repayment or fulfillment of other terms of 

such purchase. 

‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.— 


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‘‘(A) EXERCISE OF RIGHTS.—The Secretary of the 

Treasury may, at any time, exercise any rights received 

in connection with such purchases. 

‘‘(B) SALE OF OBLIGATION AND SECURITIES.—The Secretary of the Treasury may, at any time, subject to the 

terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any 

obligation or security acquired by the Secretary under this 

subsection. 

‘‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGA- TIONS OR SECURITIES.—The authority of the Secretary of 

the Treasury to hold, exercise any rights received in connection with, or sell, any obligations or securities purchased 

is not subject to the provisions of paragraph (4). 

‘‘(3) FUNDING.—For the purpose of the authorities granted 

in this subsection, the Secretary of the Treasury may use 

the proceeds of the sale of any securities issued under chapter 

31 of Title 31, and the purposes for which securities may 

be issued under chapter 31 of Title 31 are extended to include 

such purchases and the exercise of any rights in connection 

with such purchases. Any funds expended for the purchase 

of, or modifications to, obligations and securities, or the exercise 

of any rights received in connection with such purchases under 

this subsection shall be deemed appropriated at the time of 

such purchase, modification, or exercise. 

‘‘(4) TERMINATION OF AUTHORITY.—The authority under this 

subsection (l), with the exception of paragraphs (2) and (3) 

of this subsection, shall expire December 31, 2009. 

‘‘(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECUTIVE COMPENSATION.—The Director shall have the power to 

approve, disapprove, or modify the executive compensation of 

the Corporation, as defined under Regulation S-K, 17 C.F.R. 

229.’’. 

(c) FEDERAL HOME LOAN BANKS.—Section 11 of the Federal 

Home Loan Bank Act (12 U.S.C. 1431) is amended by adding 

at the end the following new subsection: 

‘‘(l) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS; CONDITIONS.— 

‘‘(1) AUTHORITY TO PURCHASE.— 

‘‘(A) GENERAL AUTHORITY.—In addition to the authority 

under subsection (i) of this section, the Secretary of the 

Treasury is authorized to purchase any obligations issued 

by any Federal Home Loan Bank under any section of 

this Act, on such terms and conditions as the Secretary 

may determine and in such amounts as the Secretary may 

determine. Nothing in this subsection requires a Federal 

Home Loan Bank to issue obligations or securities to the 

Secretary without mutual agreement between the Secretary 

and the Federal Home Loan Bank. Nothing in this subsection permits or authorizes the Secretary, without the 

agreement of the Federal Home Loan Bank, to engage 

in open market purchases of the common securities of 

any Federal Home Loan Bank. 

‘‘(B) EMERGENCY DETERMINATION REQUIRED.—In 

connection with any use of this authority, the Secretary 

must determine that such actions are necessary to— 

‘‘(i) provide stability to the financial markets; 


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‘‘(ii) prevent disruptions in the availability of mortgage finance; and 

‘‘(iii) protect the taxpayer. 

‘‘(C) CONSIDERATIONS.—To protect the taxpayers, the 

Secretary of the Treasury shall take into consideration 

the following in connection with exercising the authority 

contained in this paragraph: 

‘‘(i) The need for preferences or priorities regarding 

payments to the Government. 

‘‘(ii) Limits on maturity or disposition of obligations 

or securities to be purchased. 

‘‘(iii) The Federal Home Loan Bank’s plan for the 

orderly resumption of private market funding or capital 

market access. 

‘‘(iv) The probability of the Federal Home Loan 

Bank fulfilling the terms of any such obligation or 

other security, including repayment. 

‘‘(v) The need to maintain the Federal Home Loan 

Bank’s status as a private shareholder-owned company. 

‘‘(vi) Restrictions on the use of Federal Home Loan 

Bank resources, including limitations on the payment 

of dividends and executive compensation and any such 

other terms and conditions as appropriate for those 

purposes. 

‘‘(D) REPORTS TO CONGRESS.—Upon exercise of this 

authority, the Secretary shall report to the Committees 

on the Budget, Financial Services, and Ways and Means 

of the House of Representatives and the Committees on 

the Budget, Finance, and Banking, Housing, and Urban 

Affairs of the Senate as to the necessity for the purchase 

and the determinations made by the Secretary under 

subparagraph (B) and with respect to the considerations 

required under subparagraph (C), and the size, terms, and 

probability of repayment or fulfillment of other terms of 

such purchase. 

‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.— 

‘‘(A) EXERCISE OF RIGHTS.—The Secretary of the 

Treasury may, at any time, exercise any rights received 

in connection with such purchases. 

‘‘(B) SALE OF OBLIGATIONS.—The Secretary of the 

Treasury may, at any time, subject to the terms of the 

security or otherwise upon terms and conditions and at 

prices determined by the Secretary, sell any obligation 

acquired by the Secretary under this subsection. 

‘‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGATIONS.—The authority of the Secretary of the Treasury 

to hold, exercise any rights received in connection with, 

or sell, any obligations purchased is not subject to the 

provisions of paragraph (4). 

‘‘(3) FUNDING.—For the purpose of the authorities granted 

in this subsection, the Secretary of the Treasury may use 

the proceeds of the sale of any securities issued under chapter 

31 of Title 31, and the purposes for which securities may 

be issued under chapter 31 of Title 31 are extended to include 

such purchases and the exercise of any rights in connection 

with such purchases. Any funds expended for the purchase 

of, or modifications to, obligations and securities, or the exercise 


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of any rights received in connection with such purchases under 

this subsection shall be deemed appropriated at the time of 

such purchase, modification, or exercise. 

‘‘(4) TERMINATION OF AUTHORITY.—The authority under this 

subsection (l), with the exception of paragraphs (2) and (3) 

of this subsection, shall expire December 31, 2009. 

‘‘(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECUTIVE COMPENSATION.—The Director shall have the power to 

approve, disapprove, or modify the executive compensation of 

the Federal Home Loan Bank, as defined under Regulation 

S-K, 17 C.F.R. 229.’’. 

SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL 

HOUSING FINANCE AGENCY AND THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM TO ENSURE 

FINANCIAL MARKET STABILITY . 

Subsection (a) of section 1313 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513), 

as amended by the preceding provisions of this Act, is further 

amended by adding at the end the following new paragraph: 

‘‘(3) COORDINATION WITH THE CHAIRMAN OF THE BOARD

OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.— 

‘‘(A) CONSULTATION.— The Director shall consult with, 

and consider the views of, the Chairman of the Board 

of Governors of the Federal Reserve System, with respect 

to the risks posed by the regulated entities to the financial 

system, prior to issuing any proposed or final regulations, 

orders, and guidelines with respect to the exercise of the 

additional authority provided in this Act regarding prudential management and operations standards, safe and sound 

operations of, and capital requirements and portfolio standards applicable to the regulated entities (as such term 

is defined in section 1303). The Director also shall consult 

with the Chairman regarding any decision to place a regulated entity into conservatorship or receivership. 

‘‘(B) INFORMATION SHARING.—To facilitate the consultative process, the Director shall share information with 

the Board of Governors of the Federal Reserve System 

on a regular, periodic basis as determined by the Director 

and the Board regarding the capital, asset and liabilities, 

financial condition, and risk management practices of the 

regulated entities as well as any information related to 

financial market stability. 

‘‘(C) TERMINATION OF CONSULTATION REQUIREMENT.— 

The requirement of the Director to consult with the Board 

of Governors of the Federal Reserve System under this 

paragraph shall expire at the conclusion of December 31, 

2009.’’. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2689 

Subtitle B—Improvement of Mission 

Supervision 

SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL 

OVERSIGHT. 

Part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) 

is amended— 

(1) by striking the heading for the part and inserting the 

following: 

‘‘PART 2—ADDITIONAL AUTHORITIES OF THE 

DIRECTOR’’; 

and 

(2) by striking sections 1321 and 1322. 

SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD 

RESPONSIBILITIES. 

(a) IN GENERAL.—Part 2 of subtitle A of the Federal Housing 

Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 

4541 et seq.) is amended— 

(1) by striking ‘‘Secretary’’ each place that term appears 

and inserting ‘‘Director’’ in each of sections 1323, 1326, 1327, 

1328, and 1336; and 

(2) by striking sections 1338 and 1349 (12 U.S.C. 4562 

note and 4589). 

(b) RETENTION OF FAIR HOUSING RESPONSIBILITIES.—Section 

1325 of the Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992 (12 U.S.C. 4545) is amended in the matter 

preceding paragraph (1), by inserting ‘‘of Housing and Urban 

Development’’ after ‘‘The Secretary’’. 

SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS. 

Part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) 

is amended by inserting before section 1323 the following: 

‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS. 

‘‘(a) IN GENERAL.—The Director shall require each enterprise 

to obtain the approval of the Director for any product of the enterprise before initially offering the product. 

‘‘(b) STANDARD FOR APPROVAL.—In considering any request for 

approval of a product pursuant to subsection (a), the Director shall 

make a determination that— 

‘‘(1) in the case of a product of the Federal National Mortgage Association, the product is authorized under paragraph 

(2), (3), (4), or (5) of section 302(b) or section 304 of the Federal 

National Mortgage Association Charter Act (12 U.S.C. 1717(b), 

1719); 

‘‘(2) in the case of a product of the Federal Home Loan 

Mortgage Corporation, the product is authorized under paragraph (1), (4), or (5) of section 305(a) of the Federal Home 

Loan Mortgage Corporation Act (12 U.S.C. 1454(a)); 

‘‘(3) the product is in the public interest; and 

12 USC 4541. 

12 USC 4543, 

4546–4548, 4566. 

12 USC 4541, 

4542. 

12 USC 4541. 


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‘‘(4) the product is consistent with the safety and soundness 

of the enterprise or the mortgage finance system. 

‘‘(c) PROCEDURE FOR APPROVAL.— 

‘‘(1) SUBMISSION OF REQUEST.—An enterprise shall submit 

to the Director a written request for approval of a product 

that describes the product in such form as prescribed by order 

or regulation of the Director. 

‘‘(2) REQUEST FOR PUBLIC COMMENT.—Immediately upon 

receipt of a request for approval of a product, as required 

under paragraph (1), the Director shall publish notice of such 

request and of the period for public comment pursuant to 

paragraph (3) regarding the product, and a description of the 

product proposed by the request. The Director shall give 

interested parties the opportunity to respond in writing to 

the proposed product. 

‘‘(3) PUBLIC COMMENT PERIOD.—During the 30-day period 

beginning on the date of publication pursuant to paragraph 

(2) of a request for approval of a product, the Director shall 

receive public comments regarding the proposed product. 

‘‘(4) OFFERING OF PRODUCT.— 

‘‘(A) IN GENERAL.—Not later than 30 days after the 

close of the public comment period described in paragraph 

(3), the Director shall approve or deny the product, specifying the grounds for such decision in writing. 

‘‘(B) FAILURE TO ACT.—If the Director fails to act within 

the 30-day period described in subparagraph (A), then the 

enterprise may offer the product. 

‘‘(C) TEMPORARY APPROVAL.—The Director may, subject 

to the rules of the Director, provide for temporary approval 

of the offering of a product without a public comment 

period, if the Director finds that the existence of exigent 

circumstances makes such delay contrary to the public 

interest. 

‘‘(d) CONDITIONAL APPROVAL.—If the Director approves the 

offering of any product by an enterprise, the Director may establish 

terms, conditions, or limitations with respect to such product with 

which the enterprise must comply in order to offer such product. 

‘‘(e) EXCLUSIONS.— 

‘‘(1) IN GENERAL.—The requirements of subsections (a) 

through (d) do not apply with respect to— 

‘‘(A) the automated loan underwriting system of an 

enterprise in existence as of the date of enactment of the 

Federal Housing Finance Regulatory Reform Act of 2008, 

including any upgrade to the technology, operating system, 

or software to operate the underwriting system; 

‘‘(B) any modification to the mortgage terms and conditions or mortgage underwriting criteria relating to the 

mortgages that are purchased or guaranteed by an enterprise, provided that such modifications do not alter the 

underlying transaction so as to include services or 

financing, other than residential mortgage financing; or 

‘‘(C) any other activity that is substantially similar, 

as determined by rule of the Director to— 

‘‘(i) the activities described in subparagraphs (A) 

and (B); and 

‘‘(ii) other activities that have been approved by 

the Director in accordance with this section. 

Deadline. 

Publication. 

Notice. 


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‘‘(2) EXPEDITED REVIEW.— ‘‘(A) ENTERPRISE NOTICE.—For any new activity that 

an enterprise considers not to be a product, the enterprise 

shall provide written notice to the Director of such activity, 

and may not commence such activity until the date of 

receipt of a notice under subparagraph (B) or the expiration 

of the period described in subparagraph (C). The Director 

shall establish, by regulation, the form and content of 

such written notice. 

‘‘(B) DIRECTOR DETERMINATION.—Not later than 15 

days after the date of receipt of a notice under subparagraph (A), the Director shall determine whether such 

activity is a product subject to approval under this section. 

The Director shall, immediately upon so determining, notify 

the enterprise. 

‘‘(C) FAILURE TO ACT.—If the Director fails to determine 

whether such activity is a product within the 15-day period 

described in subparagraph (B), the enterprise may commence the new activity in accordance with subparagraph 

(A). 

‘‘(f) NO LIMITATION.—Nothing in this section may be construed 

to restrict— 

‘‘(1) the safety and soundness authority of the Director 

over all new and existing products or activities; or 

‘‘(2) the authority of the Director to review all new and 

existing products or activities to determine that such products 

or activities are consistent with the statutory mission of an 

enterprise.’’. 

SEC. 1124. CONFORMING LOAN LIMITS. 

(a) FANNIE MAE.— 

(1) GENERAL LIMIT.—Section 302(b)(2) of the Federal 

National Mortgage Association Charter Act (12 U.S.C. 

1717(b)(2)) is amended by striking the 7th and 8th sentences 

and inserting the following new sentences: ‘‘Such limitations 

shall not exceed $417,000 for a mortgage secured by a singlefamily 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 

Effective dates. 

Deadline. 

Notification. 

Regulations. 


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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.’’. 

(2) HIGH-COST AREA LIMIT.—Section 302(b)(2) of the Federal 

National Mortgage Association Charter Act (12 U.S.C. 

1717(b)(2)) is amended by adding after the period at the end 

the following: ‘‘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) EFFECTIVE DATE.—The amendments made by paragraphs (1) and (2) of this subsection shall take effect upon 

the expiration of the date described in section 201(a) of the 

Economic Stimulus Act of 2008 (Public Law 110–185). 

(b) FREDDIE MAC.— 

(1) GENERAL LIMIT.—Section 305(a)(2) of the Federal Home 

Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 

amended by striking the 6th and 7th sentences and inserting 

the following new sentences: ‘‘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.’’. 

(2) HIGH-COST AREA LIMIT.—Section 305(a)(2) of the Federal 

Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) 

is amended by adding after the period at the end the following: 

‘‘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 

Effective dates. 

12 USC 1717 

note. 


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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) EFFECTIVE DATE.—The amendments made by paragraphs (1) and (2) of this subsection shall take effect upon 

the expiration of the date described in section 201(a) of the 

Economic Stimulus Act of 2008 (Public Law 110–185). 

(c) SENSE OF CONGRESS.—It is the sense of the Congress that 

the securitization of mortgages by the Federal National Mortgage 

Association and the Federal Home Loan Mortgage Corporation plays 

an important role in providing liquidity to the United States housing 

markets. Therefore, the Congress encourages the Federal National 

Mortgage Association and the Federal Home Loan Mortgage Corporation to securitize mortgages acquired under the increased conforming loan limits established under this Act. 

(d) HOUSING PRICE INDEX.—Part 2 of subtitle A of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 

(12 U.S.C. 4541 et seq.) is amended by inserting after section 

1321 (as added by section 1123 of this Act) the following new 

section: 

‘‘SEC. 1322. HOUSING PRICE INDEX. 

‘‘The Director shall establish and maintain a method of 

assessing the national average 1-family house price for use for 

adjusting the conforming loan limitations of the enterprises. In 

establishing such method, the Director shall take into consideration 

the monthly survey of all major lenders conducted by the Federal 

Housing Finance Agency to determine the national average 1-family 

house price, the House Price Index maintained by the Office of 

Federal Housing Enterprise Oversight of the Department of 

Housing and Urban Development before the effective date of the 

Federal Housing Finance Regulatory Reform Act of 2008, any appropriate house price indexes of the Bureau of the Census of the 

Department of Commerce, and any other indexes or measures that 

the Director considers appropriate.’’. 

SEC. 1125. ANNUAL HOUSING REPORT. 

(a) REPEAL.—Section 1324 of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (12 U.S.C. 4544) is 

hereby repealed. 

(b) ANNUAL HOUSING REPORT.—The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended 

by inserting after section 1323 the following: 

‘‘SEC. 1324. ANNUAL HOUSING REPORT. 

‘‘(a) IN GENERAL.—After reviewing and analyzing the reports 

submitted under section 309(n) of the Federal National Mortgage 

Association Charter Act and section 307(f) of the Federal Home 

Loan Mortgage Corporation Act, the Director shall submit a report, 

not later than October 30 of each year, to the Committee on 

Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, on 

the activities of each enterprise. 

‘‘(b) CONTENTS.—The report required under subsection (a) 

shall— 

‘‘(1) discuss— 

‘‘(A) the extent to and manner in which— 

12 USC 4544. 

Assessments. 

12 USC 4542. 

12 USC 1454 

note. 


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‘‘(i) each enterprise is achieving the annual housing 

goals established under subpart B; 

‘‘(ii) each enterprise is complying with its duty 

to serve underserved markets, as established under 

section 1335; 

‘‘(iii) each enterprise is complying with section 

1337; 

‘‘(iv) each enterprise received credit towards 

achieving each of its goals resulting from a transaction 

or activity pursuant to section 1331(b)(2); and 

‘‘(v) each enterprise is achieving the purposes of 

the enterprise established by law; and 

‘‘(B) the actions that each enterprise could undertake 

to promote and expand the purposes of the enterprise; 

‘‘(2) aggregate and analyze relevant data on income to 

assess the compliance of each enterprise with the housing goals 

established under subpart B; 

‘‘(3) aggregate and analyze data on income, race, and gender 

by census tract and other relevant classifications, and compare 

such data with larger demographic, housing, and economic 

trends; 

‘‘(4) identify the extent to which each enterprise is involved 

in mortgage purchases and secondary market activities 

involving subprime and nontraditional loans; 

‘‘(5) compare the characteristics of subprime and nontraditional loans both purchased and securitized by each enterprise 

to other loans purchased and securitized by each enterprise; 

and 

‘‘(6) compare the characteristics of high-cost loans purchased and securitized, where such securities are not held 

on portfolio to loans purchased and securitized, where such 

securities are either retained on portfolio or repurchased by 

the enterprise, including such characteristics as— 

‘‘(A) the purchase price of the property that secures 

the mortgage; 

‘‘(B) the loan-to-value ratio of the mortgage, which 

shall reflect any secondary liens on the relevant property; 

‘‘(C) the terms of the mortgage; 

‘‘(D) the creditworthiness of the borrower; and 

‘‘(E) any other relevant data, as determined by the 

Director. 

‘‘(c) DATA COLLECTION AND REPORTING.— 

‘‘(1) IN GENERAL.—To assist the Director in analyzing the 

matters described in subsection (b), the Director shall conduct, 

on a monthly basis, a survey of mortgage markets in accordance 

with this subsection. 

‘‘(2) DATA POINTS.—Each monthly survey conducted by the 

Director under paragraph (1) shall collect data on— 

‘‘(A) the characteristics of individual mortgages that 

are eligible for purchase by the enterprises and the 

characteristics of individual mortgages that are not eligible 

for purchase by the enterprises including, in both cases, 

information concerning— 

‘‘(i) the price of the house that secures the mortgage; 

Deadlines. 

Surveys. 


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‘‘(ii) the loan-to-value ratio of the mortgage, which 

shall reflect any secondary liens on the relevant property; 

‘‘(iii) the terms of the mortgage; 

‘‘(iv) the creditworthiness of the borrower or borrowers; and 

‘‘(v) whether the mortgage, in the case of a conforming mortgage, was purchased by an enterprise; 

‘‘(B) the characteristics of individual subprime and nontraditional mortgages that are eligible for purchase by the 

enterprises and the characteristics of borrowers under such 

mortgages, including the creditworthiness of such borrowers and determination whether such borrowers would 

qualify for prime lending; and 

‘‘(C) such other matters as the Director determines 

to be appropriate. 

‘‘(3) PUBLIC AVAILABILITY.—The Director shall make any 

data collected by the Director in connection with the conduct 

of a monthly survey available to the public in a timely manner, 

provided that the Director may modify the data released to 

the public to ensure that the data— 

‘‘(A) is not released in an identifiable form; and 

‘‘(B) is not otherwise obtainable from other publicly 

available data sets. 

‘‘(4) DEFINITION.—For purposes of this subsection, the term 

‘identifiable form’ means any representation of information that 

permits the identity of a borrower to which the information 

relates to be reasonably inferred by either direct or indirect 

means.’’. 

SEC. 1126. PUBLIC USE DATABASE. 

Section 1323 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (42 U.S.C. 4543) is amended— 

(1) in subsection (a)— 

(A) by striking ‘‘(a) IN GENERAL.—The Secretary’’ and 

inserting the following: 

‘‘(a) AVAILABILITY.— ‘‘(1) IN GENERAL.—The Director’’; and 

(B) by adding at the end the following new paragraph: 

‘‘(2) CENSUS TRACT LEVEL REPORTING.—Such data shall 

include the data elements required to be reported under the 

Home Mortgage Disclosure Act of 1975, at the census tract 

level.’’; 

(2) in subsection (b)(2), by inserting before the period at 

the end the following: ‘‘or with subsection (a)(2)’’; and 

(3) by adding at the end the following new subsection: 

‘‘(d) TIMING.—Data submitted under this section by an enterprise in connection with a provision referred to in subsection (a) 

shall be made publicly available in accordance with this section 

not later than September 30 of the year following the year to 

which the data relates.’’. 

SEC. 1127. REPORTING OF MORTGAGE DATA. 

Section 1326 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4546) is amended— 

(1) in subsection (a), by striking ‘‘The Director’’ and 

inserting ‘‘Subject to subsection (d), the Director’’; and 

(2) by adding at the end the following: 

Deadline. 


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122 STAT. 2696 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(d) MORTGAGE INFORMATION.—Subject to privacy considerations, as described in section 304(j) of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(j)), the Director shall, by regulation 

or order, provide that certain information relating to single family 

mortgage data of the enterprises shall be disclosed to the public, 

in order to make available to the public— 

‘‘(1) the same data from the enterprises that is required 

of insured depository institutions under the Home Mortgage 

Disclosure Act of 1975; and 

‘‘(2) information collected by the Director under section 

1324(b)(6).’’. 

SEC. 1128. REVISION OF HOUSING GOALS. 

(a) REPEAL.—Sections 1331 through 1334 of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 

(12 U.S.C. 4561 through 4564) are hereby repealed. 

(b) HOUSING GOALS.—The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended by inserting 

before section 1335 the following: 

‘‘SEC. 1331. ESTABLISHMENT OF HOUSING GOALS. 

‘‘(a) IN GENERAL.—The Director shall, by regulation, establish 

effective for 2010 and each year thereafter, annual housing goals, 

with respect to the mortgage purchases by the enterprises, as 

follows: 

‘‘(1) SINGLE-FAMILY HOUSING GOALS.—Four single-family 

housing goals under section 1332. 

‘‘(2) MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.— 

One multifamily special affordable housing goal under section 

1333. 

‘‘(b) TIMING.—The Director shall, by regulation, establish an 

annual deadline by which the Director shall establish the annual 

housing goals under this subpart for each year, taking into consideration the need for the enterprises to reasonably and sufficiently 

plan their operations and activities in advance, including operations 

and activities necessary to meet such annual goals. 

‘‘(c) TRANSITION.—The annual housing goals effective for 2008 

pursuant to this subpart, as in effect before the enactment of 

the Federal Housing Finance Regulatory Reform Act of 2008, shall 

remain in effect for 2009, except that not later than the expiration 

of the 270-day period beginning on the date of the enactment 

of such Act, the Director shall review such goals applicable for 

2009 to determine the feasibility of such goals given the market 

conditions current at such time and, after seeking public comment 

for a period not to exceed 30 days, may make appropriate adjustments consistent with such market conditions. 

‘‘(d) ELIMINATING INTEREST RATE DISPARITIES.— 

‘‘(1) IN GENERAL.—Upon request by the Director, an enterprise shall provide to the Director, in a form determined by 

the Director, data the Director may review to determine 

whether there exist disparities in interest rates charged on 

mortgages to borrowers who are minorities as compared with 

comparable mortgages to borrowers of similar creditworthiness 

who are not minorities. 

‘‘(2) REMEDIAL ACTIONS UPON PRELIMINARY FINDING.—Upon 

a preliminary finding by the Director that a pattern of disparities in interest rates with respect to any lender or lenders 

Records. 

Deadline. 

Review. 

Deadline. 

Regulations. 

Regulations. 

Effective date. 

12 USC 4561. 

Public 

information. 

Regulations. 

Order. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2697 

exists pursuant to the data provided by an enterprise in paragraph (1), the Director shalll ‘‘(A) refer the preliminary finding to the appropriate 

regulatory or enforcement agency for further review; and 

‘‘(B) require the enterprise to submit additional data 

with respect to any lender or lenders, as appropriate and 

to the extent practicable, to the Director who shall submit 

any such additional data to the regulatory or enforcement 

agency for appropriate action. 

‘‘(3) ANNUAL REPORT TO CONGRESS.—The Director shall 

submit to the Committee on Financial Services of the House 

of Representatives and the Committee on Banking, Housing, 

and Urban Affairs of the Senate a report describing the actions 

taken, and being taken, by the Director to carry out this subsection. No such report shall identify any lender or lenders 

who have not been found to have engaged in discriminatory 

lending practices pursuant to a final adjudication on the record, 

and after opportunity for an administrative hearing, in accordance with subchapter II of chapter 5 of title 5, United States 

Code. 

‘‘(4) PROTECTION OF IDENTITY OF INDIVIDUALS.—In carrying 

out this subsection, the Director shall ensure that no propertyrelated or financial information that would enable a borrower 

to be identified shall be made public. 

‘‘SEC. 1332. SINGLE-FAMILY HOUSING GOALS. 

‘‘(a) IN GENERAL.—The Director shall, by regulation, establish 

annual goals for the purchase by each enterprise of the following 

types of mortgages for the following categories of families: 

‘‘(1) PURCHASE-MONEY MORTGAGES.—A goal for purchase 

of conventional, conforming, single-family, purchase money 

mortgages financing owner-occupied housing for each of the 

following categories of families: 

‘‘(A) Low-income families. 

‘‘(B) Families that reside in low-income areas. 

‘‘(C) Very low-income families. 

‘‘(2) REFINANCING MORTGAGES.—A goal for purchase of 

conventional, conforming mortgages on owner-occupied, singlefamily housing for low-income families that are given to pay 

off or prepay an existing loan secured by the same property. 

‘‘(b) GOALS AS A PERCENTAGE OF TOTAL MORTGAGE PURCHASES.—The goals established under paragraphs (1) and (2) of 

subsection (a) shall be established as a percentage of the total 

number of conventional, conforming, single-family, owner-occupied, 

purchase money mortgages purchased by the enterprise, or as 

percentage of the total number of conventional, single-family, owneroccupied refinance mortgages purchased by the enterprise, as 

applicable, that are mortgages for the types of families specified 

in paragraphs (1) and (2) of subsection (a). 

‘‘(c) SINGLE-FAMILY, OWNER-OCCUPIED RENTAL HOUSING

UNITS.—The Director shall require each enterprise to report the 

number of rental housing units affordable to low-income families 

each year which are contained in mortgages purchased by the 

enterprise financing 2- to 4-unit single-family, owner-occupied properties and may, by regulation, establish additional requirements 

relating to such units. 

‘‘(d) DETERMINATION OF COMPLIANCE.— 

Reports. 

Deadline. 

Regulations. 

12 USC 4562. 


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122 STAT. 2698 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(1) IN GENERAL.—The Director shall determine, for each 

year that the housing goals under this section are in effect 

pursuant to section 1331(a), whether each enterprise has complied with each such goal established under subsection (a) 

of this section and any additional requirements which may 

be established under subsection (c) of this section. 

‘‘(2) PURCHASE-MONEY MORTGAGE GOALS.—An enterprise 

shall be considered to be in compliance with a housing goal 

under subparagraph (A), (B), or (C) of subsection (a)(1) for 

a year only if, for the type of family described in such subparagraph, the percentage of the number of conventional, conforming, single-family, owner-occupied, purchase money mortgages purchased by the enterprise in such year that serve 

such families, meets or exceeds the target for the year for 

such type of family that is established under subsection (e). 

‘‘(3) REFINANCE GOAL.—An enterprise shall be considered 

to be in compliance with the refinance goal under subsection 

(a)(2) for a year only if the percentage of the number of conventional, conforming, single-family, owner-occupied refinance 

mortgages purchased by the enterprise in such year that serve 

low-income families meets or exceeds the target for the year 

that is established under subsection (e). 

‘‘(e) ANNUAL TARGETS.— 

‘‘(1) IN GENERAL.—The Director shall, by regulation, establish annual targets for each goal and subgoal under this section, 

provided that the Director shall not set prospective targets 

longer than three years. In establishing such targets, the 

Director shall not consider segments of the market determined 

to be unacceptable or contrary to good lending practices, inconsistent with safety and soundness, or unauthorized for purchase 

by the enterprises. 

‘‘(2) GOALS TARGETS.— 

‘‘(A) CALCULATION.—The Director shall calculate, for 

each of the types of families described in subsection (a), 

the percentage, for each of the three years that most 

recently precede such year and for which information under 

the Home Mortgage Disclosure Act of 1975 is publicly available— 

‘‘(i) of the number of conventional, conforming, 

single-family, owner-occupied purchase money mortgages originated in such year that serve such type 

of family, or 

‘‘(ii) the number of conventional, conforming, 

single-family, owner-occupied refinance mortgages 

originated in such year that serve low-income families, 

as applicable, as determined by the Director using the 

information obtained and determined pursuant to paragraphs (4) and (5). 

‘‘(B) ESTABLISHMENT OF GOAL TARGETS.—The Director 

shall, by regulation, establish targets for each of the goal 

categories, taking into consideration the calculations under 

subparagraph (A) and the following factors: 

‘‘(i) National housing needs. 

‘‘(ii) Economic, housing, and demographic conditions, including expected market developments. 

Regulations. 

Regulations. 


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‘‘(iii) The performance and effort of the enterprises 

toward achieving the housing goals under this section 

in previous years. 

‘‘(iv) The ability of the enterprise to lead the 

industry in making mortgage credit available. 

‘‘(v) Such other reliable mortgage data as may 

be available. 

‘‘(vi) The size of the purchase money conventional 

mortgage market, or refinance conventional mortgage 

market, as applicable, serving each of the types of 

families described in subsection (a), relative to the 

size of the overall purchase money mortgage market 

or the overall refinance mortgage market, respectively. 

‘‘(vii) The need to maintain the sound financial 

condition of the enterprises. 

‘‘(3) AUTHORITY TO ADJUST TARGETS.—The Director may, 

by regulation, adjust the percentage targets previously established by regulation pursuant to paragraph (2)(B) for any year, 

to reflect subsequent available data and market developments. 

‘‘(4) HMDA INFORMATION.—The Director shall annually 

obtain information submitted in compliance with the Home 

Mortgage Disclosure Act of 1975 regarding conventional, conforming, single-family, owner-occupied, purchase money and 

refinance mortgages originated and purchased for the previous 

year. 

‘‘(5) CONFORMING MORTGAGES.—In determining whether a 

mortgage is a conforming mortgage for purposes of this paragraph, the Director shall consider the original principal balance 

of the mortgage loan to be the principal balance as reported 

in the information referred to in paragraph (4), as rounded 

to the nearest thousand dollars. 

‘‘(f) NOTICE OF DETERMINATION AND ENTERPRISE COMMENT.— 

‘‘(1) NOTICE.—Within 30 days of making a determination 

under subsection (d) regarding compliance of an enterprise 

for a year with a housing goal established under this section 

and before any public disclosure thereof, the Director shall 

provide notice of the determination to the enterprise, which 

shall include an analysis and comparison, by the Director, 

of the performance of the enterprise for the year and the 

targets for the year under subsection (e). 

‘‘(2) COMMENT PERIOD.—The Director shall provide each 

enterprise an opportunity to comment on the determination 

during the 30-day period beginning upon receipt by the enterprise of the notice. 

‘‘(g) USE OF BORROWER INCOME.—In monitoring the performance of each enterprise pursuant to the housing goals under this 

section and evaluating such performance (for purposes of section 

1336), the Director shall consider a mortgagor’s income to be such 

income at the time of origination of the mortgage. 

‘‘(h) CONSIDERATION OF PROPERTIES WITH RENTAL UNITS.— 

Mortgages financing two- to four-unit owner-occupied properties 

shall count toward the achievement of the single-family housing 

goals under this section, if such properties otherwise meet the 

requirements under this section, notwithstanding the use of one 

or more units for rental purposes. 

‘‘(i) GOALS CREDIT.—The Director shall determine whether an 

enterprise shall receive full, partial, or no credit for a transaction 

Deadline. 

Deadline. 


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122 STAT. 2700 PUBLIC LAW 110–289—JULY 30, 2008 

toward achievement of any of the housing goals established pursuant to section 1332 and 1333. In making any such determination, 

the Director shall consider whether a transaction or activity of 

an enterprise is substantially equivalent to a mortgage purchase 

and either (1) creates a new market, or (2) adds liquidity to an 

existing market. No credit toward the achievement of the housing 

goals and subgoals established under this section may be given 

to the purchase of mortgages, including any transaction or activity 

of an enterprise determined to be substantially equivalent to a 

mortgage purchase, that is determined to be unacceptable or contrary to good lending practices, inconsistent with safety and soundness, or unauthorized for purchase by the enterprises, pursuant 

to regulations issued by the Director. 

‘‘SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL. 

‘‘(a) ESTABLISHMENT OF GOAL.— 

‘‘(1) IN GENERAL.—The Director shall, by regulation, establish a single annual goal, by either unit or dollar volume, 

of purchases by each enterprise of mortgages on multifamily 

housing that finance dwelling units affordable to low-income 

families. 

‘‘(2) ADDITIONAL REQUIREMENTS FOR UNITS AFFORDABLE TO

VERY LOW-INCOME FAMILIES.—When establishing the goal under 

this section, the Director shall establish additional requirements for the purchase by each enterprise of mortgages on 

multifamily housing that finance dwelling units affordable to 

very low-income families. 

‘‘(3) REPORTING ON SMALLER PROPERTIES.—The Director 

shall require each enterprise to report on the purchase by 

each enterprise of multifamily housing of a smaller or limited 

size that is affordable to low-income families, which may be 

based on multifamily projects of 5 to 50 units (as such numbers 

may be adjusted by the Director) or on mortgages of up to 

$5,000,000 (as such amount may be adjusted by the Director), 

and may, by regulation, establish such aditional requirements 

related to such units. 

‘‘(4) FACTORS.—In establishing the goal and additional 

requirements under this section, the Director shall not consider 

segments of the market determined to be inconsistent with 

safety and soundness or unauthorized for purchase by the 

enterprises, and shall take into consideration— 

‘‘(A) national multifamily mortgage credit needs and 

the ability of the enterprise to provide additional liquidity 

and stability for the multifamily mortgage market; 

‘‘(B) the performance and effort of the enterprise in 

making mortgage credit available for multifamily housing 

in previous years; 

‘‘(C) the size of the multifamily mortgage market for 

housing affordable to low-income and very low-income families, including the size of the multifamily markets for 

housing of a smaller or limited size; 

‘‘(D) the ability of the enterprise to lead the market 

in making multifamily mortgage credit available, especially 

for multifamily housing described in paragraphs (1) and 

(2); 

‘‘(E) the availability of public subsidies; and 

Regulations. 

12 USC 4563. 


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‘‘(F) the need to maintain the sound financial condition 

of the enterprise. 

‘‘(b) UNITS FINANCED BY HOUSING FINANCE AGENCY BONDS.— 

The Director shall give full credit toward the achievement of the 

multifamily special affordable housing goal under this section (for 

purposes of section 1336) to dwelling units in multifamily housing 

that otherwise qualifies under such goal and that is financed by 

tax-exempt or taxable bonds issued by a State or local housing 

finance agency, if such bonds, in whole or in part— 

‘‘(1) are secured by a guarantee of the enterprise; or 

‘‘(2) are purchased by the enterprise, except that the 

Director may give less than full credit for purchases of investment grade bonds, to the extent that such purchases do not 

provide a new market or add liquidity to an existing market. 

‘‘(c) MEASUREMENT OF PERFORMANCE.—The Director shall monitor the performance of each enterprise in meeting the goals established under this section and shall evaluate such performance (for 

purposes of section 1336) based on whether the rent levels are 

affordable. A rent level shall be considered to be affordable for 

purposes of this subsection for low-income families if it does not 

exceed 30 percent of the maximum income level of such income 

category, with appropriate adjustments for unit size as measured 

by the number of bedrooms. 

‘‘(d) DETERMINATION OF COMPLIANCE.—The Director shall determine, for each year that the housing goal under this section is 

in effect pursuant to section 1331(a), whether each enterprise has 

complied with such goal and the additional requirements under 

subsection (a)(2). 

‘‘SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS. 

‘‘(a) AUTHORITY.—An enterprise may petition the Director in 

writing at any time during a year to reduce the level of any 

goal or subgoal for such year established pursuant to this subpart. 

‘‘(b) STANDARD FOR REDUCTION.—The Director may reduce the 

level for a goal or subgoal pursuant to such a petition only if— 

‘‘(1) market and economic conditions or the financial condition of the enterprise require such action; or 

‘‘(2) efforts to meet the goal or subgoal would result in 

the constraint of liquidity, over-investment in certain market 

segments, or other consequences contrary to the intent of this 

subpart, or section 301(3) of the Federal National Mortgage 

Association Charter Act (12 U.S.C. 1716(3)) or section 301(b)(3) 

of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 

1451 note), as applicable. 

‘‘(c) DETERMINATION.—The Director shall, promptly upon receipt 

of a petition regarding a reduction, seek public comment on the 

reduction for a period of 30 days. The Director shall make a determination regarding any proposed reduction within 30 days after 

the expiration of such public comment period. The Director may 

extend such determination period for a single additional 15-day 

period, but only if the Director requests additional information 

from the enterprise.’’. 

(c) CONFORMING AMENDMENTS.—The Housing and Community 

Development Act of 1992 is amendedl 

(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 

preceding paragraph (1), by striking ‘‘low- and moderate-income 

Deadline. 

Public comment. 

12 USC 4564. 


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122 STAT. 2702 PUBLIC LAW 110–289—JULY 30, 2008 

housing goal’’ and all that follows through ‘‘section 1334’’ and 

inserting ‘‘housing goals established under this subpart’’; and 

(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by striking 

‘‘sections 1332, 1333, and 1334,’’ and inserting ‘‘this subpart’’. 

(d) DEFINITIONS.—Section 1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502) 

is amended— 

(1) by striking paragraph (24), as so designated by section 

1002 of this Act, and inserting the following: 

‘‘(24) VERY LOW-INCOME.— 

‘‘(A) IN GENERAL.—The term ‘very low-income’ means— 

‘‘(i) in the case of owner-occupied units, families 

having incomes not greater than 50 percent of the 

area median income; and 

‘‘(ii) in the case of rental units, families having 

incomes not greater than 50 percent of the area median 

income, with adjustments for smaller and larger families, as determined by the Director. 

‘‘(B) RULE OF CONSTRUCTION.—For purposes of section 

1338 and 1339, the term ‘very low-income’ means— 

‘‘(i) in the case of owner-occupied units, income 

in excess of 30 percent but not greater than 50 percent 

of the area median income; and 

‘‘(ii) in the case of rental units, income in excess 

of 30 percent but not greater than 50 percent of the 

area median income, with adjustments for smaller and 

larger families, as determined by the Director.’’; and 

(2) by adding at the end the following: 

‘‘(26) CONFORMING MORTGAGE.—The term ‘conforming mortgage’ means, with respect to an enterprise, a conventional 

mortgage having an original principal obligation that does not 

exceed the dollar amount limitation in effect at the time of 

such origination and applicable to such mortgage, under, as 

applicable— 

‘‘(A) section 302(b)(2) of the Federal National Mortgage 

Association Charter Act; or 

‘‘(B) section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act. 

‘‘(27) EXTREMELY LOW-INCOME.—The term ‘extremely lowincome’ means— 

‘‘(A) in the case of owner-occupied units, income not 

in excess of 30 percent of the area median income; and 

‘‘(B) in the case of rental units, income not in excess 

of 30 percent of the area median income, with adjustments 

for smaller and larger families, as determined by the 

Director. 

‘‘(28) LOW-INCOME AREA.—The term ‘low-income area’ 

means a census tract or block numbering area in which the 

median income does not exceed 80 percent of the median income 

for the area in which such census tract or block numbering 

area is located, and, for the purposes of section 1332(a)(1)(B), 

shall include families having incomes not greater than 100 

percent of the area median income who reside in minority 

census tracts and shall include families having incomes not 

greater than 100 percent of the area median income who reside 

in designated disaster areas. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2703 

‘‘(29) MINORITY CENSUS TRACT.—The term ‘minority census 

tract’ means a census tract that has a minority population 

of at least 30 percent and a median family income of less 

than 100 percent of the area family median income. 

‘‘(30) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORD- ABLE AND AVAILABLE TO EXTREMELY LOW-INCOME RENTER

HOUSEHOLDS.— ‘‘(A) IN GENERAL.—The term ‘shortage of standard 

rental units both affordable and available to extremely 

low-income renter households’ means the gap between— 

‘‘(i) the number of units with complete plumbing 

and kitchen facilities with a rent that is 30 percent 

or less of 30 percent of the adjusted area median 

income as determined by the Director that are occupied 

by extremely low-income renter households or are 

vacant for rent; and 

‘‘(ii) the number of extremely low-income renter 

households. 

‘‘(B) RULE OF CONSTRUCTION.—If the number of units 

described in subparagraph (A)(i) exceeds the number of 

extremely low-income households as described in subparagraph (A)(ii), there is no shortage. 

‘‘(31) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORDABLE AND AVAILABLE TO VERY LOW-INCOME RENTER HOUSEHOLDS.— 

‘‘(A) IN GENERAL.—The term ‘shortage of standard 

rental units both affordable and available to very lowincome renter households’ means the gap between— 

‘‘(i) the number of units with complete plumbing 

and kitchen facilities with a rent that is 30 percent 

or less of 50 percent of the adjusted area median 

income as determined by the Director that are occupied 

by either extremely low- or very low-income renter 

households or are vacant for rent; and 

‘‘(ii) the number of extremely low- and very lowincome renter households. 

‘‘(B) RULE OF CONSTRUCTION.—If the number of units 

described in subparagraph (A)(i) exceeds the number of 

extremely low- and very low-income households as 

described in subparagraph (A)(ii), there is no shortage.’’. 

SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS. 

(a) ESTABLISHMENT AND EVALUATION OF PERFORMANCE.—Section 1335 of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992 (12 U.S.C. 4565) is amended— 

(1) in the section heading, by inserting ‘‘DUTY TO SERVE

UNDERSERVED MARKETS AND’’ before ‘‘OTHER’’; 

(2) by striking subsection (b); 

(3) in subsection (a)— 

(A) in the matter preceding paragraph (1), by inserting 

‘‘and to carry out the duty under subsection (a) of this 

section’’ before ‘‘, each enterprise shall’’; 

(B) in paragraph (3), by inserting ‘‘and’’ after the semicolon at the end; 

(C) in paragraph (4), by striking ‘‘; and’’ and inserting 

a period; 

(D) by striking paragraph (5); and 


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122 STAT. 2704 PUBLIC LAW 110–289—JULY 30, 2008 

(E) by redesignating such subsection as subsection (b); 

(4) by inserting before subsection (b) (as so redesignated 

by paragraph (3)(E) of this subsection) the following new subsection: 

‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— ‘‘(1) DUTY.—To increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets, each 

enterprise shall provide leadership to the market in developing 

loan products and flexible underwriting guidelines to facilitate 

a secondary market for mortgages for very low-, low-, and 

moderate-income families with respect to the following underserved markets: 

‘‘(A) MANUFACTURED HOUSING.—The enterprise shall 

develop loan products and flexible underwriting guidelines 

to facilitate a secondary market for mortgages on manufactured homes for very low-, low-, and moderate-income families. 

‘‘(B) AFFORDABLE HOUSING PRESERVATION.—The enterprise shall develop loan products and flexible underwriting 

guidelines to facilitate a secondary market to preserve 

housing affordable to very low-, low-, and moderate-income 

families, including housing projects subsidized underl 

‘‘(i) the project-based and tenant-based rental 

assistance programs under section 8 of the United 

States Housing Act of 1937; 

‘‘(ii) the program under section 236 of the National 

Housing Act; 

‘‘(iii) the below-market interest rate mortgage program under section 221(d)(4) of the National Housing 

Act; 

‘‘(iv) the supportive housing for the elderly program under section 202 of the Housing Act of 1959; 

‘‘(v) the supportive housing program for persons 

with disabilities under section 811 of the CranstonGonzalez National Affordable Housing Act; 

‘‘(vi) the programs under title IV of the McKinneyVento Homeless Assistance Act (42 U.S.C. 11361 et 

seq.), but only permanent supportive housing projects 

subsidized under such programs; 

‘‘(vii) the rural rental housing program under section 515 of the Housing Act of 1949; 

‘‘(viii) the low-income housing tax credit under section 42 of the Internal Revenue Code of 1986; and 

‘‘(ix) comparable state and local affordable housing 

programs. 

‘‘(C) RURAL MARKETS.—The enterprise shall develop 

loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages on housing for very 

low-, and low-, and moderate-income families in rural 

areas.’’; and 

(5) by adding at the end the following new subsections: 

‘‘(c) ADDITIONAL CATEGORIES.—The Director may submit recommendations to the Committee on Financial Services of the House 

of Representatives and the Committee on Banking, Housing, and 

Urban Affairs of the Senate for the establishment of additional 

categories under subsection (a), provided that the Director makes 

Guidelines. 


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a preliminary determination that any such category is important 

to the mission of the enterprises, that the category is an underserved market, and that the establishment of such category is 

warranted. 

‘‘(d) EVALUATION AND REPORTING OF COMPLIANCE.— ‘‘(1) IN GENERAL.—The Director shall, by regulation, establish effective for 2010 and thereafter a manner for evaluating 

whether, and the extent to which, the enterprises have complied 

with the duty under subsection (a) to serve underserved markets and for rating the extent of such compliance. Using such 

method, the Director shall, for 2010 and each year thereafter, 

evaluate such compliance and rate the performance of each 

enterprise as to extent of compliance. The Director shall include 

such evaluation and rating for each enterprise for a year in 

the report for that year submitted pursuant to section 1319B(a). 

‘‘(2) SEPARATE EVALUATIONS.—In determining whether an 

enterprise has complied with the duty referred to in paragraph 

(1), the Director shall separately evaluate whether the enterprise has complied with such duty with respect to each of 

the underserved markets identified in subsection (a), taking 

into considerationl ‘‘(A) the development of loan products, more flexible 

underwriting guidelines, and other innovative approaches 

to providing financing to each of such underserved markets; 

‘‘(B) the extent of outreach to qualified loan sellers 

and other market participants in each of such underserved 

markets; 

‘‘(C) the volume of loans purchased in each of such 

underserved markets relative to the market opportunities 

available to the enterprise, except that the Director shall 

not establish specific quantitative targets nor evaluate the 

enterprises based solely on the volume of loans purchased; 

and 

‘‘(D) the amount of investments and grants in projects 

which assist in meeting the needs of such underserved 

markets. 

‘‘(3) MANUFACTURED HOUSING MARKET.—In determining 

whether an enterprise has complied with the duty under 

subparagraph (A) of subsection (a)(1), the Director may consider 

loans secured by both real and personal property. 

‘‘(4) PROHIBITION OF CONSIDERATION OF AFFORDABLE

HOUSING FUND GRANTS FOR MEETING DUTY TO SERVE.— In determining whether an enterprise has complied with the duty 

referred to in paragraph (1), the Director may not consider 

any affordable housing fund grant amounts used under section 

1337 for eligible activities under subsection (g) of such section.’’. 

(b) ENFORCEMENT.—Subsection (a) of section 1336 of the 

Housing and Community Development Act of 1992 (12 U.S.C. 

4566(a)) is amended— 

(1) in paragraph (1), by inserting ‘‘and with the duty under 

section 1335(a) of each enterprise with respect to underserved 

markets,’’ before ‘‘as provided in this section’’; and 

(2) by adding at the end of such subsection, as amended 

by the preceding provisions of this title, the following new 

paragraph: 

‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE MORTGAGE CREDIT

TO UNDERSERVED MARKETS.—The duty under section 1335(a) 

Regulations. 


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of each enterprise to serve underserved markets (as determined 

in accordance with section 1335(c)) shall be enforceable under 

this section to the same extent and under the same provisions 

that the housing goals established under this subpart are 

enforceable. Such duty shall be enforceable only under this 

section, except that such duty shall not be subject to subsection 

(c)(7) of this section and shall not be enforceable under any 

other provision of this title (including subpart C of this part) 

or under any provision of the Federal National Mortgage 

Association Charter Act or the Federal Home Loan Mortgage 

Corporation Act.’’. 

(c) ADDITIONAL CREDIT FOR CERTAIN MORTGAGES.—Section 

1336(a) of the Housing and Community Development Act of 1992 

(12 U.S.C. 4566(a)) is amendedl (1) in paragraph (2), by inserting ‘‘, except as provided 

in paragraph (5),’’ after ‘‘which’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(5) ADDITIONAL CREDIT.—The Director may assign additional credit toward achievement, under this section, of the 

housing goals for mortgage purchase activities of the enterprises 

that comply with the requirements of such goals and support 

housing that includes a licensed childcare center. The availability of additional credit under this paragraph shall not be 

used to increase any housing goal, subgoal, or target established 

under this subpart.’’. 

SEC. 1130. MONITORING AND ENFORCING COMPLIANCE WITH 

HOUSING GOALS. 

(a) IN GENERAL.—Section 1336 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566) 

is amended by striking subsections (b) and (c) and inserting the 

following: 

‘‘(b) NOTICE AND PRELIMINARY DETERMINATION OF FAILURE TO

MEET GOALS.— 

‘‘(1) NOTICE.—If the Director preliminarily determines that 

an enterprise has failed, or that there is a substantial probability that an enterprise will fail, to meet any housing goal 

under this subpart, the Director shall provide written notice 

to the enterprise of such a preliminary determination, the reasons for such determination, and the information on which 

the Director based the determination. 

‘‘(2) RESPONSE PERIOD.— 

‘‘(A) IN GENERAL.—During the 30-day period beginning 

on the date on which an enterprise is provided notice 

under paragraph (1), the enterprise may submit to the 

Director any written information that the enterprise considers appropriate for consideration by the Director in 

finally determining whether such failure has occurred or 

whether the achievement of such goal was or is feasible. 

‘‘(B) EXTENDED PERIOD.—The Director may extend the 

period under subparagraph (A) for good cause for not more 

than 30 additional days. 

‘‘(C) SHORTENED PERIOD.—The Director 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 


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of the enterprise to comment on the proposed determination 

or action of the Director. 

‘‘(3) CONSIDERATION OF INFORMATION AND FINAL 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 Director shall issue a final determination 

on— 

‘‘(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 a final determination under subparagraph (A), the Director shall take into 

consideration any relevant information submitted by the 

enterprise during the response period. 

‘‘(C) NOTICE.—The Director shall provide written 

notice, including a response to any information submitted 

during the response period, to the enterprise, the Committee on Banking, Housing, and Urban Affairs of the 

Senate, and the Committee on Financial Services of the 

House of Representatives, of— 

‘‘(i) each final determination under this paragraph 

that an enterprise has failed, or that there is a substantial probability that the enterprise will fail, to meet 

a housing goal; 

‘‘(ii) each final determination that the achievement 

of a housing goal was or is feasible; and 

‘‘(iii) the reasons for each such final determination. 

‘‘(c) CEASE AND DESIST, CIVIL MONEY PENALTIES, AND REMEDIES

INCLUDING HOUSING PLANS.— ‘‘(1) REQUIREMENT.—If the Director finds, pursuant to subsection (b), that there is a substantial probability that an enterprise will fail, or has actually failed, to meet any housing 

goal under this subpart, and that the achievement of the 

housing goal was or is feasible, the Director may require that 

the enterprise submit a housing plan under this subsection. 

If the Director makes such a finding and the enterprise refuses 

to submit such a plan, submits an unacceptable plan, or fails 

to comply with the plan, the Director may issue a cease and 

desist order in accordance with section 1341 and impose civil 

money penalties in accordance with section 1345. 

‘‘(2) HOUSING PLAN.—If the Director requires a housing 

plan under this subsection, such a plan shall be— 

‘‘(A) a feasible plan describing the specific actions the 

enterprise will take— 

‘‘(i) to achieve the goal for the next calendar year; 

and 

‘‘(ii) if the Director determines that there is a 

substantial probability that the enterprise will fail to 

meet a goal in the current year, to make such improvements and changes in its operations as are reasonable 

in the remainder of such year; and 


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‘‘(B) sufficiently specific to enable the Director to monitor compliance periodically. 

‘‘(3) DEADLINE FOR SUBMISSION.—The Director shall establish a deadline for an enterprise to submit a housing plan 

to the Director, which may not be more than 45 days after 

the enterprise is provided notice. The Director may extend 

the deadline to the extent that the Director determines necessary. Any extension of the deadline shall be in writing and 

for a time certain. 

‘‘(4) APPROVAL.—The Director shall review each submission 

by an enterprise, including a housing plan submitted under 

this subsection, and, not later than 30 days after submission, 

approve or disapprove the plan or other action. The Director 

may extend the period for approval or disapproval for a single 

additional 30-day period if the Director determines it necessary. 

The Director shall approve any plan that the Director 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 provision of law. 

‘‘(5) NOTICE OF APPROVAL AND DISAPPROVAL.—The Director 

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 under this section is disapproved, the enterprise shall submit an amended plan acceptable to the Director 

not later than 15 days after such disapproval, or such longer 

period that the Director determines is in the public interest. 

‘‘(7) CEASE AND DESIST ORDERS; CIVIL MONEY PENALTIES.— Solely with respect to the housing goals established under 

sections 1332(a) and 1333(a)(1), if the Director requires an 

enterprise to submit a housing plan under this subsection and 

the enterprise refuses to submit such a plan, submits an 

unacceptable plan, or fails to comply with the plan, the Director 

may issue a cease and desist order in accordance with section 

1341, impose civil money penalties in accordance with section 

1345, exercise other appropriate enforcement authority or seek 

other appropriate actions.’’. 

(b) CONFORMING AMENDMENT.—The heading for subpart C of 

part 2 of subtitle A of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 is amended to read as follows: 

‘‘Subpart C—Enforcement’’. 

(c) CEASE AND DESIST PROCEEDINGS .— (1) REPEAL.—Section 1341 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 

4581) is hereby repealed. 

(2) CEASE AND DESIST PROCEEDINGS.—The Federal Housing 

Enterprises Financial Safety and Soundness Act of 1992 is 

amended by inserting before section 1342 the following: 

‘‘SEC. 1341. CEASE AND DESIST PROCEEDINGS. 

‘‘(a) GROUNDS FOR ISSUANCE.—The Director may issue and 

serve a notice of charges under this section upon an enterprise 

if the Director determines that— 

12 USC 4581. 

Deadline. 

Review. 

Deadline. 


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‘‘(1) the enterprise has failed to submit a report under 

section 1327, following a notice of such failure, an opportunity 

for comment by the enterprise, and a final determination by 

the Director; 

‘‘(2) the enterprise has failed to submit the information 

required under subsection (m) or (n) of section 309 of the 

Federal National Mortgage Association Charter Act, or subsection (e) or (f) of section 307 of the Federal Home Loan 

Mortgage Corporation Act; 

‘‘(3) solely with respect to the housing goals established 

under sections 1332(a) and 1333(a)(1), the enterprise has failed 

to submit a housing plan that complies with section 1336(c) 

within the applicable period; or 

‘‘(4) solely with respect to the housing goals established 

under sections 1332(a) and 1333(a)(1), the enterprise has failed 

to comply with a housing plan under section 1336(c). 

‘‘(b) PROCEDURE.— 

‘‘(1) NOTICE OF CHARGES.—Each notice of charges issued 

under this section shall contain a statement of the facts constituting the alleged conduct and shall fix a time and place at 

which a hearing will be held to determine on the record whether 

an order to cease and desist from such conduct should issue. 

‘‘(2) ISSUANCE OF ORDER.—If the Director finds on the 

record made at a hearing described in paragraph (1) that any 

conduct specified in the notice of charges has been established 

(or the enterprise consents pursuant to section 1342(a)(4)), the 

Director may issue and serve upon the enterprise an order 

requiring the enterprise to— 

‘‘(A) submit a report under section 1327; 

‘‘(B) solely with respect to the housing goals established 

under sections 1332(a) and 1333(a)(1), submit a housing 

plan in compliance with section 1336(c); 

‘‘(C) solely with respect to the housing goals established 

under sections 1332(a) and 1333(a)(1), comply with the 

housing plan in compliance with section 1336(c); or 

‘‘(D) provide the information required under subsection 

(m) or (n) of section 309 of the Federal National Mortgage 

Association Charter Act, or subsection (e) or (f) of section 

307 of the Federal Home Loan Mortgage Corporation Act. 

‘‘(c) EFFECTIVE DATE.—An order under this section shall become 

effective upon the expiration of the 30-day period beginning on 

the date of service of the order upon the enterprise (except in 

the case of an order issued upon consent, which shall become 

effective at the time specified therein), and shall remain effective 

and enforceable as provided in the order, except to the extent 

that the order is stayed, modified, terminated, or set aside by 

action of the Director or otherwise, as provided in this subpart.’’. 

(d) CIVIL MONEY PENALTIES.— 

(1) REPEAL.—Section 1345 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 

4585) is hereby repealed. 

(2) CIVIL MONEY PENALTIES.—The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended 

by inserting after section 1344 the following: 


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‘‘SEC. 1345. CIVIL MONEY PENALTIES. 

‘‘(a) AUTHORITY.—The Director may impose a civil money penalty, in accordance with the provisions of this section, on any 

enterprise that has failed to— 

‘‘(1) submit a report under section 1327, following a notice 

of such failure, an opportunity for comment by the enterprise, 

and a final determination by the Director; 

‘‘(2) submit the information required under subsection (m) 

or (n) of section 309 of the Federal National Mortgage Association Charter Act or subsection (e) or (f) of section 307 of the 

Federal Home Loan Mortgage Corporation Act; 

‘‘(3) solely with respect to the housing goals established 

under sections 1332(a) and 1333(a)(1), submit a housing plan 

or perform its responsibilities under a remedial order issued 

pursuant to section 1336(c) within the required period; or 

‘‘(4) solely with respect to the housing goals established 

under sections 1332(a) and 1333(a)(1), comply with a housing 

plan for the enterprise under section 1336(c). 

‘‘(b) AMOUNT OF PENALTY.—The amount of a penalty under 

this section, as determined by the Director, may not exceed— 

‘‘(1) for any failure described in paragraph (1), (5), or (6) 

of subsection (a), $100,000 for each day that the failure occurs; 

and 

‘‘(2) for any failure described in paragraph (2), (3), or (4) 

of subsection (a), $50,000 for each day that the failure occurs. 

‘‘(c) PROCEDURES.— 

‘‘(1) ESTABLISHMENT.—The Director shall establish standards and procedures governing the imposition of civil money 

penalties under this section. Such standards and procedures— 

‘‘(A) shall provide for the Director to notify the enterprise in writing of the determination of the Director to 

impose the penalty, which shall be made on the record; 

‘‘(B) shall provide for the imposition of a penalty only 

after the enterprise has been given an opportunity for 

a hearing on the record pursuant to section 1342; and 

‘‘(C) may provide for review by the Director of any 

determination or order, or interlocutory ruling, arising from 

a hearing. 

‘‘(2) FACTORS IN DETERMINING AMOUNT OF PENALTY.—In 

determining the amount of a penalty under this section, the 

Director shall give consideration to factors including— 

‘‘(A) the gravity of the offense; 

‘‘(B) any history of prior offenses; 

‘‘(C) ability to pay the penalty; 

‘‘(D) injury to the public; 

‘‘(E) benefits received; 

‘‘(F) deterrence of future violations; 

‘‘(G) the length of time that the enterprise should 

reasonably take to achieve the goal; and 

‘‘(H) such other factors as the Director may determine, 

by regulation, to be appropriate. 

‘‘(d) ACTION TO COLLECT PENALTY.—If an enterprise fails to 

comply with an order by the Director imposing a civil money penalty 

under this section, after the order is no longer subject to review, 

as provided in sections 1342 and 1343, the Director may bring 

an action in the United States District Court for the District of 

Columbia to obtain a monetary judgment against the enterprise, 

Records. 

Standards. 

12 USC 4585. 


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and such other relief as may be available. The monetary judgment 

may, in the court’s discretion, include the attorneys’ fees and other 

expenses incurred by the United States in connection with the 

action. In an action under this subsection, the validity and appropriateness of the order imposing the penalty shall not be subject 

to review. 

‘‘(e) SETTLEMENT BY DIRECTOR.—The Director may compromise, 

modify, or remit any civil money penalty which may be, or has 

been, imposed under this section. 

‘‘(f) DEPOSIT OF PENALTIES.—The Director shall use any civil 

money penalties collected under this section to help fund the 

Housing Trust Fund established under section 1338.’’. 

(e) DIRECTOR AUTHORITY.— (1) AUTHORITY TO BRING A CIVIL ACTION.—Section 1344(a) 

of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4584) is amended by striking 

‘‘The Secretary may request the Attorney General of the United 

States to bring a civil action’’ and inserting ‘‘The Director 

may bring a civil action’’. 

(2) SUBPOENA ENFORCEMENT.—Section 1348(c) of the Federal Housing Enterprises Financial Safety and Soundness Act 

of 1992 (12 U.S.C. 4588(c)) is amended by inserting ‘‘may bring 

an action or’’ before ‘‘may request’’. 

(3) CONFORMING AMENDMENTS.—Subpart C of part 2 of 

subtitle A of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended 

by striking ‘‘Secretary’’ each place that term appears and 

inserting ‘‘Director’’ in each of— 

(A) section 1342 (12 U.S.C. 4582); 

(B) section 1343 (12 U.S.C. 4583); 

(C) section 1346 (12 U.S.C. 4586); 

(D) section 1347 (12 U.S.C. 4587); and 

(E) section 1348 (12 U.S.C. 4588). 

SEC. 1131. AFFORDABLE HOUSING PROGRAMS. 

(a) REPEAL.—Section 1337 of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) is 

hereby repealed. 

(b) ANNUAL HOUSING REPORT.—The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 

et seq.) is amended by inserting after section 1336 the following: 

‘‘SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS. 

‘‘(a) SET ASIDE AND ALLOCATION OF AMOUNTS BY ENTER- PRISES.—Subject to subsection (b), in each fiscal year— 

‘‘(1) the Federal Home Loan Mortgage Corporation shall— 

‘‘(A) set aside an amount equal to 4.2 basis points 

for each dollar of the unpaid principal balance of its total 

new business purchases; and 

‘‘(B) allocate or otherwise transfer— 

‘‘(i) 65 percent of such amounts to the Secretary 

of Housing and Urban Development to fund the 

Housing Trust Fund established under section 1338; 

and 

‘‘(ii) 35 percent of such amounts to fund the Capital 

Magnet Fund established pursuant to section 1339; 

and 

‘‘(2) the Federal National Mortgage Association shall— 

12 USC 4567. 


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‘‘(A) set aside an amount equal to 4.2 basis points 

for each dollar of unpaid principal balance of its total 

new business purchases; and 

‘‘(B) allocate or otherwise transfer— 

‘‘(i) 65 percent of such amounts to the Secretary 

of Housing and Urban Development to fund the 

Housing Trust Fund established under section 1338; 

and 

‘‘(ii) 35 percent of such amounts to fund the Capital 

Magnet Fund established pursuant to section 1339. 

‘‘(b) SUSPENSION OF CONTRIBUTIONS.—The Director shall temporarily suspend allocations under subsection (a) by an enterprise 

upon a finding by the Director that such allocations— 

‘‘(1) are contributing, or would contribute, to the financial 

instability of the enterprise; 

‘‘(2) are causing, or would cause, the enterprise to be classified as undercapitalized; or 

‘‘(3) are preventing, or would prevent, the enterprise from 

successfully completing a capital restoration plan under section 

1369C. 

‘‘(c) PROHIBITION OF PASS-THROUGH OF COST OF ALLOCATIONS.— 

The Director shall, by regulation, prohibit each enterprise from 

redirecting the costs of any allocation required under this section, 

through increased charges or fees, or decreased premiums, or in 

any other manner, to the originators of mortgages purchased or 

securitized by the enterprise. 

‘‘(d) ENFORCEMENT OF REQUIREMENTS ON ENTERPRISE.— 

Compliance by the enterprises with the requirements under this 

section shall be enforceable under subpart C. Any reference in 

such subpart to this part or to an order, rule, or regulation under 

this part specifically includes this section and any order, rule, 

or regulation under this section. 

‘‘(e) REQUIRED AMOUNT FOR HOPE RESERVE FUND.—Of the 

aggregate amount allocated under subsection (a), 25 percent shall 

be deposited into a fund established in the Treasury of the United 

States by the Secretary of the Treasury for such purpose. 

‘‘(f) LIMITATION.—No funds under this title may be used in 

conjunction with property taken by eminent domain, unless eminent 

domain is employed only for a public use, except that, for purposes 

of this section, public use shall not be construed to include economic 

development that primarily benefits any private entity. 

‘‘SEC. 1338. HOUSING TRUST FUND. 

‘‘(a) ESTABLISHMENT AND PURPOSE.— 

‘‘(1) IN GENERAL.—The Secretary of Housing and Urban 

Development (in this section referred to as the ‘Secretary’) 

shall establish and manage a Housing Trust Fund, which shall 

be funded with amounts allocated by the enterprises under 

section 1337 and any amounts as are or may be appropriated, 

transferred, or credited to such Housing Trust Fund under 

any other provisions of law. The purpose of the Housing Trust 

Fund under this section is to provide grants to States (as 

such term is defined in section 1303) for use— 

‘‘(A) to increase and preserve the supply of rental 

housing for extremely low- and very low-income families, 

including homeless families; and 

12 USC 4568. 

Regulations. 


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‘‘(B) to increase homeownership for extremely low- and 

very low-income families. 

‘‘(2) FEDERAL ASSISTANCE.—For purposes of the application 

of Federal civil rights laws, all assistance provided from the 

Housing Trust Fund shall be considered Federal financial 

assistance. 

‘‘(b) ALLOCATIONS FOR HOPE BOND PAYMENTS.— 

‘‘(1) IN GENERAL.—Notwithstanding subsection (c), to help 

address the mortgage crisis, of the amounts allocated pursuant 

to clauses (i) and (ii) of section 1337(a)(1)(B) and clauses (i) 

and (ii) of section 1337(a)(2)(B) in excess of amounts described 

in section 1337(e)— 

‘‘(A) 100 percent of such excess shall be used to 

reimburse the Treasury for payments made pursuant to 

section 257(w)(1)(C) of the National Housing Act in calendar year 2009; 

‘‘(B) 50 percent of such excess shall be used to 

reimburse the Treasury for such payments in calendar 

year 2010; and 

‘‘(C) 25 percent of such excess shall be used to 

reimburse the Treasury for such payments in calendar 

year 2011. 

‘‘(2) EXCESS FUNDS.—At the termination of the HOPE for 

Homeowners Program established under section 257 of the 

National Housing Act, if amounts used to reimburse the 

Treasury under paragraph (1) exceed the total net cost to 

the Government of the HOPE for Homeowners Program, such 

amounts shall be used for their original purpose, as described 

in paragraphs (1)(B) and (2)(B) of section 1337(a). 

‘‘(3) TREASURY FUND.—The amounts referred to in subparagraphs (A) through (C) of paragraph (1) shall be deposited 

into a fund established in the Treasury of the United States 

by the Secretary of the Treasury for such purpose. 

‘‘(c) ALLOCATION FOR HOUSING TRUST FUND IN FISCAL YEAR

2010 AND SUBSEQUENT YEARS.— 

‘‘(1) IN GENERAL.—Except as provided in subsection (b), 

the Secretary shall distribute the amounts allocated for the 

Housing Trust Fund under this section to provide affordable 

housing as described in this subsection. 

‘‘(2) PERMISSIBLE DESIGNEES.—A State receiving grant 

amounts under this subsection may designate a State housing 

finance agency, housing and community development entity, 

tribally designated housing entity (as such term is defined 

in section 4 of the Native American Housing Assistance and 

Self-Determination Act of 1997 (25 U.S.C. 4103)), or any other 

qualified instrumentality of the State to receive such grant 

amounts. 

‘‘(3) DISTRIBUTION TO STATES BY NEEDS-BASED FORMULA.— 

‘‘(A) IN GENERAL.—The Secretary shall, by regulation, 

establish a formula within 12 months of the date of enactment of the Federal Housing Finance Regulatory Reform 

Act of 2008, to distribute amounts made available under 

this subsection to each State to provide affordable housing 

to extremely low- and very low-income households. 

‘‘(B) BASIS FOR FORMULA.—The formula required under 

subparagraph (A) shall include the following: 

Regulations. 

Deadline. 

Disadvantaged 

persons. 


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‘‘(i) The ratio of the shortage of standard rental 

units both affordable and available to extremely lowincome renter households in the State to the aggregate 

shortage of standard rental units both affordable and 

available to extremely low-income renter households 

in all the States. 

‘‘(ii) The ratio of the shortage of standard rental 

units both affordable and available to very low-income 

renter households in the State to the aggregate shortage of standard rental units both affordable and available to very low-income renter households in all the 

States. 

‘‘(iii) The ratio of extremely low-income renter 

households in the State living with either (I) incomplete kitchen or plumbing facilities, (II) more than 

1 person per room, or (III) paying more than 50 percent 

of income for housing costs, to the aggregate number 

of extremely low-income renter households living with 

either (IV) incomplete kitchen or plumbing facilities, 

(V) more than 1 person per room, or (VI) paying more 

than 50 percent of income for housing costs in all 

the States. 

‘‘(iv) The ratio of very low-income renter households in the State paying more than 50 percent of 

income on rent relative to the aggregate number of 

very low-income renter households paying more than 

50 percent of income on rent in all the States. 

‘‘(v) The resulting sum calculated from the factors 

described in clauses (i) through (iv) shall be multiplied 

by the relative cost of construction in the State. For 

purposes of this subclause, the term ‘cost of construction’— 

‘‘(I) means the cost of construction or building 

rehabilitation in the State relative to the national 

cost of construction or building rehabilitation; and 

‘‘(II) shall be calculated such that values 

higher than 1.0 indicate that the State’s construction costs are higher than the national average, 

a value of 1.0 indicates that the State’s construction costs are exactly the same as the national 

average, and values lower than 1.0 indicate that 

the State’s cost of construction are lower than 

the national average. 

‘‘(C) PRIORITY.—The formula required under subparagraph (A) shall give priority emphasis and consideration 

to the factor described in subparagraph (B)(i). 

‘‘(4) ALLOCATION OF GRANT AMOUNTS.— 

‘‘(A) NOTICE.—Not later than 60 days after the date 

that the Secretary determines the formula amounts 

described in paragraph (3), the Secretary shall caused to 

be published in the Federal Register a notice that such 

amounts shall be so available. 

‘‘(B) GRANT AMOUNT.—In each fiscal year other than 

fiscal year 2009, the Secretary shall make a grant to each 

State in an amount that is equal to the formula amount 

determined under paragraph (3) for that State. 

State and local 

governments. 

Deadline. 

Federal Register, 

publication. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2715 

‘‘(C) MINIMUM STATE ALLOCATIONS.—If the formula 

amount determined under paragraph (3) for a fiscal year 

would allocate less than $3,000,000 to any of the 50 States 

of the United States or the District of Columbia, the allocation for such State of the United States or the District 

of Columbia shall be $3,000,000, and the increase shall 

be deducted pro rata from the allocations made to all 

other of the States (as such term is defined in section 

1303). 

‘‘(5) ALLOCATION PLANS REQUIRED.— 

‘‘(A) IN GENERAL.—For each year that a State or State 

designated entity receives a grant under this subsection, 

the State or State designated entity shall establish an 

allocation plan. Such plan shall— 

‘‘(i) set forth a plan for the distribution of grant 

amounts received by the State or State designated 

entity for such year; 

‘‘(ii) be based on priority housing needs, as determined by the State or State designated entity in accordance with the regulations established under subsection 

(g)(2)(D); 

‘‘(iii) comply with paragraph (6); and 

‘‘(iv) include performance goals that comply with 

the requirements established by the Secretary pursuant to subsection (g)(2). 

‘‘(B) ESTABLISHMENT.—In establishing an allocation 

plan under this paragraph, a State or State designated 

entity shall— 

‘‘(i) notify the public of the establishment of the 

plan; 

‘‘(ii) provide an opportunity for public comments 

regarding the plan; 

‘‘(iii) consider any public comments received 

regarding the plan; and 

‘‘(iv) make the completed plan available to the 

public. 

‘‘(C) CONTENTS.—An allocation plan of a State or State 

designated entity under this paragraph shall set forth the 

requirements for eligible recipients under paragraph (8) 

to apply for such grant amounts, including a requirement 

that each such application include— 

‘‘(i) a description of the eligible activities to be 

conducted using such assistance; and 

‘‘(ii) a certification by the eligible recipient applying 

for such assistance that any housing units assisted 

with such assistance will comply with the requirements 

under this section. 

‘‘(6) SELECTION OF ACTIVITIES FUNDED USING HOUSING

TRUST FUND GRANT AMOUNTS.—Grant amounts received by a 

State or State designated entity under this subsection may 

be used, or committed for use, only for activities that— 

‘‘(A) are eligible under paragraph (7) for such use; 

‘‘(B) comply with the applicable allocation plan of the 

State or State designated entity under paragraph (5); and 

Public 

information. 

Notification. 

Public comments. 


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122 STAT. 2716 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(C) are selected for funding by the State or State 

designated entity in accordance with the process and criteria for such selection established pursuant to subsection 

(g)(2)(D). 

‘‘(7) ELIGIBLE ACTIVITIES.—Grant amounts allocated to a 

State or State designated entity under this subsection shall 

be eligible for use, or for commitment for use, only for assistance 

for— 

‘‘(A) the production, preservation, and rehabilitation 

of rental housing, including housing under the programs 

identified in section 1335(a)(2)(B) and for operating costs, 

except that not less than 75 percent of such grant amounts 

shall be used for the benefit only of extremely low-income 

families or families with incomes at or below the poverty 

line (as such term is defined in section 673 of the Omnibus 

Budget Reconciliation Act of 1981 (42 U.S.C. 9902), 

including any revision required by such section) applicable 

to a family of the size involved, and not more than 25 

percent for the benefit only of very low-income families; 

and 

‘‘(B) the production, preservation, and rehabilitation 

of housing for homeownership, including such forms as 

down payment assistance, closing cost assistance, and 

assistance for interest rate buy-downs, that— 

‘‘(i) is available for purchase only for use as a 

principal residence by families that qualify both as— 

‘‘(I) extremely low- and very low-income families at the times described in subparagraphs (A) 

through (C) of section 215(b)(2) of the CranstonGonzalez National Affordable Housing Act (42 

U.S.C. 12745(b)(2)); and 

‘‘(II) first-time homebuyers, as such term is 

defined in section 104 of the Cranston-Gonzalez 

National Affordable Housing Act (42 U.S.C. 12704), 

except that any reference in such section to assistance under title II of such Act shall for purposes 

of this subsection be considered to refer to assistance from affordable housing fund grant amounts; 

‘‘(ii) has an initial purchase price that meets the 

requirements of section 215(b)(1) of the CranstonGonzalez National Affordable Housing Act; 

‘‘(iii) is subject to the same resale restrictions 

established under section 215(b)(3) of the CranstonGonzalez National Affordable Housing Act and 

applicable to the participating jurisdiction that is the 

State in which such housing is located; and 

‘‘(iv) is made available for purchase only by, or 

in the case of assistance under this subsection, is made 

available only to homebuyers who have, before purchase completed a program of independent financial 

education and counseling from an eligible organization 

that meets the requirements of section 132 of the Federal Housing Finance Regulatory Reform Act of 2008. 

‘‘(8) TENANT PROTECTIONS AND PUBLIC PARTICIPATION.—All 

amounts from the Trust Fund shall be allocated in accordance 

with, and any eligible activities carried out in whole or in 

part with grant amounts under this subtitle (including housing 

Disadvantaged 

persons. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2717 

provided with such grant amounts) shall comply with and be 

operated in compliance with— 

‘‘(A) laws relating to tenant protections and tenant 

rights to participate in decision making regarding their 

residences; 

‘‘(B) laws requiring public participation, including laws 

relating to Consolidated Plans, Qualified Allocation Plans, 

and Public Housing Agency Plans; and 

‘‘(C) fair housing laws and laws regarding accessibility 

in federally assisted housing, including section 504 of the 

Rehabilitation Act of 1973. 

‘‘(9) ELIGIBLE RECIPIENTS.—Grant amounts allocated to a 

State or State designated entity under this subsection may 

be provided only to a recipient that is an organization, agency, 

or other entity (including a for-profit entity or a nonprofit 

entity) that— 

‘‘(A) has demonstrated experience and capacity to conduct an eligible activity under paragraph (7), as evidenced 

by its ability to— 

‘‘(i) own, construct or rehabilitate, manage, and 

operate an affordable multifamily rental housing 

development; 

‘‘(ii) design, construct or rehabilitate, and market 

affordable housing for homeownership; or 

‘‘(iii) provide forms of assistance, such as down 

payments, closing costs, or interest rate buy-downs 

for purchasers; 

‘‘(B) demonstrates the ability and financial capacity 

to undertake, comply, and manage the eligible activity; 

‘‘(C) demonstrates its familiarity with the requirements 

of any other Federal, State, or local housing program that 

will be used in conjunction with such grant amounts to 

ensure compliance with all applicable requirements and 

regulations of such programs; and 

‘‘(D) makes such assurances to the State or State designated entity as the Secretary shall, by regulation, require 

to ensure that the recipient will comply with the requirements of this subsection during the entire period that 

begins upon selection of the recipient to receive such grant 

amounts and ending upon the conclusion of all activities 

under paragraph (8) that are engaged in by the recipient 

and funded with such grant amounts. 

‘‘(10) LIMITATIONS ON USE.— 

‘‘(A) REQUIRED AMOUNT FOR HOMEOWNERSHIP ACTIVITIES.—Of the aggregate amount allocated to a State or 

State designated entity under this subsection not more 

than 10 percent shall be used for activities under subparagraph (B) of paragraph (7). 

‘‘(B) DEADLINE FOR COMMITMENT OR USE.—Grant 

amounts allocated to a State or State designated entity 

under this subsection shall be used or committed for use 

within 2 years of the date that such grant amounts are 

made available to the State or State designated entity. 

The Secretary shall recapture any such amounts not so 

used or committed for use and reallocate such amounts 

under this subsection in the first year after such recapture. 

Regulations. 


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122 STAT. 2718 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(C) USE OF RETURNS.—The Secretary shall, by regulation, provide that any return on a loan or other investment 

of any grant amount used by a State or State designated 

entity to provide a loan under this subsection shall be 

treated, for purposes of availability to and use by the 

State or State designated entity, as a grant amount authorized under this subsection. 

‘‘(D) PROHIBITED USES.—The Secretary shall, by regulation— 

‘‘(i) set forth prohibited uses of grant amounts 

allocated under this subsection, which shall include 

use for— 

‘‘(I) political activities; 

‘‘(II) advocacy; 

‘‘(III) lobbying, whether directly or through 

other parties; 

‘‘(IV) counseling services; 

‘‘(V) travel expenses; and 

‘‘(VI) preparing or providing advice on tax 

returns; 

and for the purposes of this subparagraph, the prohibited use of funds for political activities includes influencing the selection, nomination, election, or appointment of one or more candidates to any Federal, State 

or local office as codified in section 501 of the Internal 

Revenue Code of 1986 (26 U.S.C. 501); 

‘‘(ii) provide that, except as provided in clause (iii), 

grant amounts of a State or State designated entity 

may not be used for administrative, outreach, or other 

costs of— 

‘‘(I) the State or State designated entity; or 

‘‘(II) any other recipient of such grant 

amounts; and 

‘‘(iii) limit the amount of any grant amounts for 

a year that may be used by the State or State designated entity for administrative costs of carrying out 

the program required under this subsection, including 

home ownership counseling, to a percentage of such 

grant amounts of the State or State designated entity 

for such year, which may not exceed 10 percent. 

‘‘(E) PROHIBITION OF CONSIDERATION OF USE FOR

MEETING HOUSING GOALS OR DUTY TO SERVE.—In determining compliance with the housing goals under this subpart and the duty to serve underserved markets under 

section 1335, the Director may not consider any grant 

amounts used under this section for eligible activities under 

paragraph (7). The Director shall give credit toward the 

achievement of such housing goals and such duty to serve 

underserved markets to purchases by the enterprises of 

mortgages for housing that receives funding from such 

grant amounts, but only to the extent that such purchases 

by the enterprises are funded other than with such grant 

amounts. 

‘‘(d) REDUCTION FOR FAILURE TO OBTAIN RETURN OF MISUSED

FUNDS.—If in any year a State or State designated entity fails 

to obtain reimbursement or return of the full amount required 

Regulations. 

Regulations. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2719 

under subsection (e)(1)(B) to be reimbursed or returned to the 

State or State designated entity during such year— 

‘‘(1) except as provided in paragraph (2)— 

‘‘(A) the amount of the grant for the State or State 

designated entity for the succeeding year, as determined 

pursuant to this section, shall be reduced by the amount 

by which such amounts required to be reimbursed or 

returned exceed the amount actually reimbursed or 

returned; and 

‘‘(B) the amount of the grant for the succeeding year 

for each other State or State designated entity whose grant 

is not reduced pursuant to subparagraph (A) shall be 

increased by the amount determined by applying the formula established pursuant to this section to the total 

amount of all reductions for all State or State designated 

entities for such year pursuant to subparagraph (A); or 

‘‘(2) in any case in which such failure to obtain reimbursement or return occurs during a year immediately preceding 

a year in which grants under this section will not be made, 

the State or State designated entity shall pay to the Secretary 

for reallocation among the other grantees an amount equal 

to the amount of the reduction for the entity that would otherwise apply under paragraph (1)(A). 

‘‘(e) ACCOUNTABILITY OF RECIPIENTS AND GRANTEES.— 

‘‘(1) RECIPIENTS.— 

‘‘(A) TRACKING OF FUNDS.—The Secretary shall— 

‘‘(i) require each State or State designated entity 

to develop and maintain a system to ensure that each 

recipient of assistance under this section uses such 

amounts in accordance with this section, the regulations issued under this section, and any requirements 

or conditions under which such amounts were provided; 

and 

‘‘(ii) establish minimum requirements for agreements, between the State or State designated entity 

and recipients, regarding assistance under this section, 

which shall include— 

‘‘(I) appropriate periodic financial and project 

reporting, record retention, and audit requirements for the duration of the assistance to the 

recipient to ensure compliance with the limitations 

and requirements of this section and the regulations under this section; and 

‘‘(II) any other requirements that the Secretary 

determines are necessary to ensure appropriate 

administration and compliance. 

‘‘(B) MISUSE OF FUNDS.— 

‘‘(i) REIMBURSEMENT REQUIREMENT.—If any 

recipient of assistance under this section is determined, 

in accordance with clause (ii), to have used any such 

amounts in a manner that is materially in violation 

of this section, the regulations issued under this section, or any requirements or conditions under which 

such amounts were provided, the State or State designated entity shall require that, within 12 months 

after the determination of such misuse, the recipient 

shall reimburse the State or State designated entity 

Deadline. 

Reports. 

Recordkeeping. 

Requirements. 

Payments. 


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122 STAT. 2720 PUBLIC LAW 110–289—JULY 30, 2008 

for such misused amounts and return to the State 

or State designated entity any such amounts that 

remain unused or uncommitted for use. The remedies 

under this clause are in addition to any other remedies 

that may be available under law. 

‘‘(ii) DETERMINATION.—A determination is made in 

accordance with this clause if the determination is 

made by the Secretary or made by the State or State 

designated entity, provided that— 

‘‘(I) the State or State designated entity provides notification of the determination to the Secretary for review, in the discretion of the Secretary, 

of the determination; and 

‘‘(II) the Secretary does not subsequently 

reverse the determination. 

‘‘(2) GRANTEES.— ‘‘(A) REPORT.— 

‘‘(i) IN GENERAL.—The Secretary shall require each 

State or State designated entity receiving grant 

amounts in any given year under this section to submit 

a report, for such year, to the Secretary that— 

‘‘(I) describes the activities funded under this 

section during such year with such grant amounts; 

and 

‘‘(II) the manner in which the State or State 

designated entity complied during such year with 

any allocation plan established pursuant to subsection (c). 

‘‘(ii) PUBLIC AVAILABILITY.—The Secretary shall 

make such reports pursuant to this subparagraph publicly available. 

‘‘(B) MISUSE OF FUNDS.—If the Secretary determines, 

after reasonable notice and opportunity for hearing, that 

a State or State designated entity has failed to comply 

substantially with any provision of this section, and until 

the Secretary is satisfied that there is no longer any such 

failure to comply, the Secretary shall— 

‘‘(i) reduce the amount of assistance under this 

section to the State or State designated entity by an 

amount equal to the amount of grant amounts which 

were not used in accordance with this section; 

‘‘(ii) require the State or State designated entity 

to repay the Secretary any amount of the grant which 

was not used in accordance with this section; 

‘‘(iii) limit the availability of assistance under this 

section to the State or State designated entity to activities or recipients not affected by such failure to comply; 

or 

‘‘(iv) terminate any assistance under this section 

to the State or State designated entity. 

‘‘(f) DEFINITIONS.—For purposes of this section, the following 

definitions shall apply: 

‘‘(1) EXTREMELY LOW-INCOME RENTER HOUSEHOLD.—The 

term ‘extremely low-income renter household’ means a household whose income is not in excess of 30 percent of the area 

median income, with adjustments for smaller and larger families, as determined by the Secretary. 

Notification. 

Notification. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2721 

‘‘(2) RECIPIENT.—The term ‘recipient’ means an individual 

or entity that receives assistance from a State or State designated entity from amounts made available to the State or 

State designated entity under this section. 

‘‘(3) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORDABLE AND AVAILABLE TO EXTREMELY LOW-INCOME RENTER

HOUSEHOLDS.— 

‘‘(A) IN GENERAL.—The term ‘shortage of standard 

rental units both affordable and available to extremely 

low-income renter households’ means for any State or other 

geographical area the gap between— 

‘‘(i) the number of units with complete plumbing 

and kitchen facilities with a rent that is 30 percent 

or less of 30 percent of the adjusted area median 

income as determined by the Secretary that are occupied by extremely low-income renter households or are 

vacant for rent; and 

‘‘(ii) the number of extremely low-income renter 

households. 

‘‘(B) RULE OF CONSTRUCTION.—If the number of units 

described in subparagraph (A)(i) exceeds the number of 

extremely low-income households as described in subparagraph (A)(ii), there is no shortage. 

‘‘(4) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORDABLE AND AVAILABLE TO VERY LOW-INCOME RENTER HOUSEHOLDS.— 

‘‘(A) IN GENERAL.—The term ‘shortage of standard 

rental units both affordable and available to very lowincome renter households’ means for any State or other 

geographical area the gap between— 

‘‘(i) the number of units with complete plumbing 

and kitchen facilities with a rent that is 30 percent 

or less of 50 percent of the adjusted area median 

income as determined by the Secretary that are occupied by very low-income renter households or are 

vacant for rent; and 

‘‘(ii) the number of very low-income renter households. 

‘‘(B) RULE OF CONSTRUCTION.—If the number of units 

described in subparagraph (A)(i) exceeds the number of 

very low-income households as described in subparagraph 

(A)(ii), there is no shortage. 

‘‘(5) VERY LOW-INCOME FAMILY.—The term ‘very low-income 

family’ has the meaning given such term in section 1303, except 

that such term includes any family that resides in a rural 

area that has an income that does not exceed the poverty 

line (as such term is defined in section 673(2) of the Omnibus 

Budget Reconciliation Act of 1981 (42 U.S.C. 9902(2)), including 

any revision required by such section) applicable to a family 

of the size involved. 

‘‘(6) VERY LOW-INCOME RENTER HOUSEHOLDS.—The term 

‘very low-income renter households’ means a household whose 

income is in excess of 30 percent but not greater than 50 

percent of the area median income, with adjustments for 

smaller and larger families, as determined by the Secretary. 

‘‘(g) REGULATIONS.— 


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122 STAT. 2722 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(1) IN GENERAL.—The Secretary shall issue regulations 

to carry out this section. 

‘‘(2) REQUIRED CONTENTS.—The regulations issued under 

this subsection shall include— 

‘‘(A) a requirement that the Secretary ensure that the 

use of grant amounts under this section by States or State 

designated entities is audited not less than annually to 

ensure compliance with this section; 

‘‘(B) authority for the Secretary to audit, provide for 

an audit, or otherwise verify a State or State designated 

entity’s activities to ensure compliance with this section; 

‘‘(C) a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by 

a grantee or recipient to the Secretary shall be reviewed 

by an independent certified public accountant in accordance 

with Statements on Standards for Accounting and Review 

Services, issued by the American Institute of Certified 

Public Accountants; 

‘‘(D) requirements for a process for application to, and 

selection by, each State or State designated entity for activities meeting the State or State designated entity’s priority 

housing needs to be funded with grant amounts under 

this section, which shall provide for priority in funding 

to be based upon— 

‘‘(i) geographic diversity; 

‘‘(ii) ability to obligate amounts and undertake 

activities so funded in a timely manner; 

‘‘(iii) in the case of rental housing projects under 

subsection (c)(7)(A), the extent to which rents for units 

in the project funded are affordable, especially for 

extremely low-income families; 

‘‘(iv) in the case of rental housing projects under 

subsection (c)(7)(A), the extent of the duration for 

which such rents will remain affordable; 

‘‘(v) the extent to which the application makes 

use of other funding sources; and 

‘‘(vi) the merits of an applicant’s proposed eligible 

activity; 

‘‘(E) requirements to ensure that grant amounts provided to a State or State designated entity under this 

section that are used for rental housing under subsection 

(c)(7)(A) are used only for the benefit of extremely lowand very low-income families; and 

‘‘(F) requirements and standards for establishment, by 

a State or State designated entity, for use of grant amounts 

in 2009 and subsequent years of performance goals, benchmarks, and timetables for the production, preservation, 

and rehabilitation of affordable rental and homeownership 

housing with such grant amounts. 

‘‘(h) AFFORDABLE HOUSING TRUST FUND.—If, after the date 

of enactment of the Federal Housing Finance Regulatory Reform 

Act of 2008, in any year, there is enacted any provision of Federal 

law establishing an affordable housing trust fund other than under 

this title for use only for grants to provide affordable rental housing 

and affordable homeownership opportunities, and the subsequent 

year is a year referred to in subsection (c), the Secretary shall 

in such subsequent year and any remaining years referred to in 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2723 

subsection (c) transfer to such affordable housing trust fund the 

aggregate amount allocated pursuant to subsection (c) in such year. 

Notwithstanding any other provision of law, assistance provided 

using amounts transferred to such affordable housing trust fund 

pursuant to this subsection may not be used for any of the activities 

specified in clauses (i) through (vi) of subsection (c)(9)(D). 

‘‘(i) FUNDING ACCOUNTABILITY AND TRANSPARENCY.—Any grant 

under this section to a grantee by a State or State designated 

entity, any assistance provided to a recipient by a State or State 

designated entity, and any grant, award, or other assistance from 

an affordable housing trust fund referred to in subsection (h) shall 

be considered a Federal award for purposes of the Federal Funding 

Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note). 

Upon the request of the Director of the Office of Management 

and Budget, the Secretary shall obtain and provide such information 

regarding any such grants, assistance, and awards as the Director 

of the Office of Management and Budget considers necessary to 

comply with the requirements of such Act, as applicable, pursuant 

to the preceding sentence. 

‘‘SEC. 1339. CAPITAL MAGNET FUND. 

‘‘(a) ESTABLISHMENT.—There is established in the Treasury of 

the United States a trust fund to be known as the Capital Magnet 

Fund, which shall be a special account within the Community 

Development Financial Institutions Fund. 

‘‘(b) DEPOSITS TO TRUST FUND.—The Capital Magnet Fund shall 

consist of— 

‘‘(1) any amounts transferred to the Fund pursuant to 

section 1337; and 

‘‘(2) any amounts as are or may be appropriated, transferred, or credited to such Fund under any other provisions 

of law. 

‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts in the Capital 

Magnet Fund shall be available to the Secretary of the Treasury 

to carry out a competitive grant program to attract private capital 

for and increase investment in— 

‘‘(1) the development, preservation, rehabilitation, or purchase of affordable housing for primarily extremely low-, very 

low-, and low-income families; and 

‘‘(2) economic development activities or community service 

facilities, such as day care centers, workforce development centers, and health care clinics, which in conjunction with affordable housing activities implement a concerted strategy to stabilize or revitalize a low-income area or underserved rural 

area. 

‘‘(d) FEDERAL ASSISTANCE.—For purposes of the application of 

Federal civil rights laws, all assistance provided using amounts 

in the Capital Magnet Fund shall be considered Federal financial 

assistance. 

‘‘(e) ELIGIBLE GRANTEES.—A grant under this section may be 

made, pursuant to such requirements as the Secretary of the 

Treasury shall establish for experience and success in attracting 

private financing and carrying out the types of activities proposed 

under the application of the grantee, only to— 

‘‘(1) a Treasury certified community development financial 

institution; or 

Requirements. 

Grants. 

12 USC 4569. 

Records. 


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122 STAT. 2724 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(2) a nonprofit organization having as 1 of its principal 

purposes the development or management of affordable 

housing. 

‘‘(f) ELIGIBLE USES.—Grant amounts awarded from the Capital 

Magnet Fund pursuant to this section may be used for the purposes 

described in paragraphs (1) and (2) of subsection (c), including 

for the following uses: 

‘‘(1) To provide loan loss reserves. 

‘‘(2) To capitalize a revolving loan fund. 

‘‘(3) To capitalize an affordable housing fund. 

‘‘(4) To capitalize a fund to support activities described 

in subsection (c)(2). 

‘‘(5) For risk-sharing loans. 

‘‘(g) APPLICATIONS.— ‘‘(1) IN GENERAL.—The Secretary of the Treasury shall provide, in a competitive application process established by regulation, for eligible grantees under subsection (e) to submit applications for Capital Magnet Fund grants to the Secretary at such 

time and in such manner as the Secretary shall determine. 

‘‘(2) CONTENT OF APPLICATION.—The application required 

under paragraph (1) shall include a detailed description of— 

‘‘(A) the types of affordable housing, economic, and 

community revitalization projects that support or sustain 

residents of an affordable housing project funded by a 

grant under this section for which such grant amounts 

would be used, including the proposed use of eligible grants 

as authorized under this section; 

‘‘(B) the types, sources, and amounts of other funding 

for such projects; and 

‘‘(C) the expected time frame of any grant used for 

such project. 

‘‘(h) GRANT LIMITATION.— 

‘‘(1) IN GENERAL.—Any 1 eligible grantee and its subsidiaries and affiliates may not be awarded more than 15 percent 

of the aggregate funds available for grants during any year 

from the Capital Magnet Fund. 

‘‘(2) GEOGRAPHIC DIVERSITY.— 

‘‘(A) GOAL.—The Secretary of the Treasury shall seek 

to fund activities in geographically diverse areas of economic distress, including metropolitan and underserved 

rural areas in every State. 

‘‘(B) DIVERSITY DEFINED.—For purposes of this paragraph, geographic diversity includes those areas that meet 

objective criteria of economic distress developed by the 

Secretary of the Treasury, which may include— 

‘‘(i) the percentage of low-income families or the 

extent of poverty; 

‘‘(ii) the rate of unemployment or underemployment; 

‘‘(iii) extent of blight and disinvestment; 

‘‘(iv) projects that target extremely low-, very low- 

, and low-income families in or outside a designated 

economic distress area; or 

‘‘(v) any other criteria designated by the Secretary 

of the Treasury. 

‘‘(3) LEVERAGE OF FUNDS.—Each grant from the Capital 

Magnet Fund awarded under this section shall be reasonably 

Regulations. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2725 

expected to result in eligible housing, or economic and community development projects that support or sustain an affordable 

housing project funded by a grant under this section whose 

aggregate costs total at least 10 times the grant amount. 

‘‘(4) COMMITMENT FOR USE DEADLINE.—Amounts made 

available for grants under this section shall be committed for 

use within 2 years of the date of such allocation. The Secretary 

of the Treasury shall recapture into the Capital Magnet Fund 

any amounts not so used or committed for use and allocate 

such amounts in the first year after such recapture. 

‘‘(5) PROHIBITED USES.—The Secretary shall, by regulation, 

set forth prohibited uses of grant amounts awarded under 

this section, which shall include use for— 

‘‘(A) political activities; 

‘‘(B) advocacy; 

‘‘(C) lobbying, whether directly or through other parties; 

‘‘(D) counseling services; 

‘‘(E) travel expenses; and 

‘‘(F) preparing or providing advice on tax returns; 

and for the purposes of this paragraph, the prohibited use 

of funds for political activities includes influencing the selection, 

nomination, election, or appointment of one or more candidates 

to any Federal, State or local office as codified in section §501 

of the Internal Revenue Code of 1986 (26 U.S.C. 501). 

‘‘(6) ADDITIONAL LOBBYING RESTRICTIONS.—No assistance 

or amounts made available under this section may be expended 

by an eligible grantee to pay any person to influence or attempt 

to influence any agency, elected official, officer or employee 

of a State or local government in connection with the making, 

award, extension, continuation, renewal, amendment, or modification of any State or local government contract, grant, loan, 

or cooperative agreement as such terms are defined in section 

1352 of title 31, United States Code. 

‘‘(7) PROHIBITION OF CONSIDERATION OF USE FOR MEETING

HOUSING GOALS OR DUTY TO SERVE.—In determining the compliance of the enterprises with the housing goals under this section 

and the duty to serve underserved markets under section 1335, 

the Director of the Federal Housing Finance Agency may not 

consider any Capital Magnet Fund amounts used under this 

section for eligible activities under subsection (f). The Director 

of the Federal Housing Finance Agency shall give credit toward 

the achievement of such housing goals and such duty to serve 

underserved markets to purchases by the enterprises of mortgages for housing that receives funding from Capital Magnet 

Fund grant amounts, but only to the extent that such purchases 

by the enterprises are funded other than with such grant 

amounts. 

‘‘(8) ACCOUNTABILITY OF RECIPIENTS AND GRANTEES.— 

‘‘(A) TRACKING OF FUNDS.—The Secretary of the 

Treasury shall— 

‘‘(i) require each grantee to develop and maintain 

a system to ensure that each recipient of assistance 

from the Capital Magnet Fund uses such amounts 

in accordance with this section, the regulations issued 

under this section, and any requirements or conditions 

under which such amounts were provided; and 

Records. 

Regulations. 


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122 STAT. 2726 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(ii) establish minimum requirements for agreements, between the grantee and the Capital Magnet 

Fund, regarding assistance from the Capital Magnet 

Fund, which shall include— 

‘‘(I) appropriate periodic financial and project 

reporting, record retention, and audit requirements for the duration of the grant to the recipient 

to ensure compliance with the limitations and 

requirements of this section and the regulations 

under this section; and 

‘‘(II) any other requirements that the Secretary 

determines are necessary to ensure appropriate 

grant administration and compliance. 

‘‘(B) MISUSE OF FUNDS.—If the Secretary of the 

Treasury determines, after reasonable notice and opportunity for hearing, that a grantee has failed to comply 

substantially with any provision of this section and until 

the Secretary is satisfied that there is no longer any such 

failure to comply, the Secretary shall— 

‘‘(i) reduce the amount of assistance under this 

section to the grantee by an amount equal to the 

amount of Capital Magnet Fund grant amounts which 

were not used in accordance with this section; 

‘‘(ii) require the grantee to repay the Secretary 

any amount of the Capital Magnet Fund grant amounts 

which were not used in accordance with this section; 

‘‘(iii) limit the availability of assistance under this 

section to the grantee to activities or recipients not 

affected by such failure to comply; or 

‘‘(iv) terminate any assistance under this section 

to the grantee. 

‘‘(i) PERIODIC REPORTS.— 

‘‘(1) IN GENERAL.—The Secretary of the Treasury shall 

submit a report, on a periodic basis, to the Committee on 

Banking, Housing, and Urban Affairs of the Senate and the 

Committee on Financial Services of the House of Representatives describing the activities to be funded under this section. 

‘‘(2) REPORTS AVAILABLE TO PUBLIC.—The Secretary of the 

Treasury shall make the reports required under paragraph 

(1) publicly available. 

‘‘(j) REGULATIONS.— 

‘‘(1) IN GENERAL.—The Secretary of the Treasury shall issue 

regulations to carry out this section. 

‘‘(2) REQUIRED CONTENTS.—The regulations issued under 

this subsection shall include— 

‘‘(A) authority for the Secretary to audit, provide for 

an audit, or otherwise verify an enterprise’s activities, to 

ensure compliance with this section; 

‘‘(B) a requirement that the Secretary ensure that the 

allocation of each enterprise is audited not less than 

annually to ensure compliance with this section; 

‘‘(C) a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by 

a grantee to the Secretary shall be reviewed by an independent certified public accountant in accordance with 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2727 

Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public 

Accountants; and 

‘‘(D) requirements for a process for application to, and 

selection by, the Secretary for activities to be funded with 

amounts from the Capital Magnet Fund, which shall provide that— 

‘‘(i) funds be fairly distributed to urban, suburban, 

and rural areas; and 

‘‘(ii) selection shall be based upon specific criteria, 

including a prioritization of funding based upon— 

‘‘(I) the ability to use such funds to generate 

additional investments; 

‘‘(II) affordable housing need (taking into 

account the distinct needs of different regions of 

the country); and 

‘‘(III) ability to obligate amounts and undertake activities so funded in a timely manner.’’. 

SEC. 1132. FINANCIAL EDUCATION AND COUNSELING. 

(a) GOALS.—Financial education and counseling under this section shall have the goal of— 

(1) increasing the financial knowledge and decision making 

capabilities of prospective homebuyers; 

(2) assisting prospective homebuyers to develop monthly 

budgets, build personal savings, finance or plan for major purchases, reduce their debt, improve their financial stability, and 

set and reach their financial goals; 

(3) helping prospective homebuyers to improve their credit 

scores by understanding the relationship between their credit 

histories and their credit scores; and 

(4) educating prospective homebuyers about the options 

available to build savings for short- and long-term goals. 

(b) GRANTS.— 

(1) IN GENERAL.—The Secretary of the Treasury (in this 

section referred to as the ‘‘Secretary’’) shall make grants to 

eligible organizations to enable such organizations to provide 

a range of financial education and counseling services to 

prospective homebuyers. 

(2) SELECTION.—The Secretary shall select eligible 

organizations to receive assistance under this section based 

on their experience and ability to provide financial education 

and counseling services that result in documented positive 

behavioral changes. 

(c) ELIGIBLE ORGANIZATIONS.— 

(1) IN GENERAL.—For purposes of this section, the term 

‘‘eligible organization’’ means an organization that is— 

(A) certified in accordance with section 106(e)(1) of 

the Housing and Urban Development Act of 1968 (12 U.S.C. 

1701x(e)); or 

(B) certified by the Office of Financial Education of 

the Department of the Treasury for purposes of this section, 

in accordance with paragraph (2). 

(2) OFE CERTIFICATION.—To be certified by the Office of 

Financial Education for purposes of this section, an eligible 

organization shall be— 

12 USC 1701x 

note. 


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122 STAT. 2728 PUBLIC LAW 110–289—JULY 30, 2008 

(A) a housing counseling agency certified by the Secretary of Housing and Urban Development under section 

106(e) of the Housing and Urban Development Act of 1968; 

(B) a State, local, or tribal government agency; 

(C) a community development financial institution (as 

defined in section 103(5) of the Community Development 

Banking and Financial Institutions Act of 1994 (12 U.S.C. 

4702(5)) or a credit union; or 

(D) any collaborative effort of entities described in 

any of subparagraphs (A) through (C). 

(d) AUTHORITY FOR PILOT PROJECTS.— (1) IN GENERAL.—The Secretary of the Treasury shall 

authorize not more than 5 pilot project grants to eligible 

organizations under subsection (c) in order to— 

(A) carry out the services under this section; and 

(B) provide such other services that will improve the 

financial stability and economic condition of low- and moderate-income and low-wealth individuals. 

(2) GOAL.—The goal of the pilot project grants under this 

subsection is to— 

(A) identify successful methods resulting in positive 

behavioral change for financial empowerment; and 

(B) establish program models for organizations to carry 

out effective counseling services. 

(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Secretary such sums as are necessary 

to carry out this section and for the provision of additional financial 

educational services. 

(f) STUDY AND REPORT ON EFFECTIVENESS AND IMPACT.— 

(1) IN GENERAL.—The Comptroller General of the United 

States shall conduct a study on the effectiveness and impact 

of the grant program established under this section. Not later 

than 3 years after the date of enactment of this Act, the 

Comptroller General shall submit a report on the results of 

such study to the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on Financial Services 

of the House of Representatives. 

(2) CONTENT OF STUDY.—The study required under paragraph (1) shall include an evaluation of the following: 

(A) The effectiveness of the grant program established 

under this section in improving the financial situation of 

homeowners and prospective homebuyers served by the 

grant program. 

(B) The extent to which financial education and counseling services have resulted in positive behavioral changes. 

(C) The effectiveness and quality of the eligible 

organizations providing financial education and counseling 

services under the grant program. 

(g) REGULATIONS.—The Secretary is authorized to promulgate 

such regulations as may be necessary to implement and administer 

the grant program authorized by this section. 

SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES. 

(a) TRANSFER.—Each employee of the Department of Housing 

and Urban Development whose position responsibilities primarily 

involve the establishment and enforcement of the housing goals 

under subpart B of part 2 of subtitle A of the Federal Housing 

Deadline. 

12 USC 4511 

note. 

Grants. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2729 

Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 

4561 et seq.) shall be transferred to the Federal Housing Finance 

Agency for employment, not later than the effective date of the 

Federal Housing Finance Regulatory Reform Act of 2008, and such 

transfer shall be deemed a transfer of function for purposes of 

section 3503 of title 5, United States Code. 

(b) GUARANTEED POSITIONS.— 

(1) IN GENERAL.—Each employee transferred under subsection (a) shall be guaranteed a position with the same status, 

tenure, grade, and pay as that held on the day immediately 

preceding the transfer. 

(2) NO INVOLUNTARY SEPARATION OR REDUCTION.—An 

employee transferred under subsection (a) holding a permanent 

position on the day immediately preceding the transfer may 

not be involuntarily separated or reduced in grade or compensation during the 12-month period beginning on the date of 

transfer, except for cause, or, in the case of a temporary 

employee, separated in accordance with the terms of the 

appointment of the employee. 

(c) APPOINTMENT AUTHORITY FOR EXCEPTED AND SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

(1) IN GENERAL.—In the case of an employee occupying 

a position in the excepted service or the Senior Executive 

Service, any appointment authority established under law or 

by regulations of the Office of Personnel Management for filling 

such position shall be transferred, subject to paragraph (2). 

(2) DECLINE OF TRANSFER.—The Director may decline a 

transfer of authority under paragraph (1) to the extent that 

such authority relates to— 

(A) a position excepted from the competitive service 

because of its confidential, policymaking, policy-determining, or policy-advocating character; or 

(B) a noncareer position in the Senior Executive Service 

(within the meaning of section 3132(a)(7) of title 5, United 

States Code). 

(d) REORGANIZATION.—If the Director determines, after the end 

of the 1-year period beginning on the effective date of the Federal 

Housing Finance Regulatory Reform Act of 2008, that a reorganization of the combined workforce is required, that reorganization 

shall be deemed a major reorganization for purposes of affording 

affected employee retirement under section 8336(d)(2) or 

8414(b)(1)(B) of title 5, United States Code. 

(e) EMPLOYEE BENEFIT PROGRAMS.— 

(1) IN GENERAL.—Any employee described under subsection 

(a) accepting employment with the Agency as a result of a 

transfer under subsection (a) may retain, for 12 months after 

the date on which such transfer occurs, membership in any 

employee benefit program of the Agency or the Department 

of Housing and Urban Development, as applicable, including 

insurance, to which such employee belongs on such effective 

date, if— 

(A) the employee does not elect to give up the benefit 

or membership in the program; and 

(B) the benefit or program is continued by the Director 

of the Federal Housing Finance Agency. 

(2) COST DIFFERENTIAL.— 


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(A) IN GENERAL.—The difference in the costs between 

the benefits which would have been provided by the Department of Housing and Urban Development and those provided by this section shall be paid by the Director. 

(B) HEALTH INSURANCE.—If any employee elects to give 

up membership in a health insurance program or the health 

insurance program is not continued by the Director, the 

employee shall be permitted to select an alternate Federal 

health insurance program not later than 30 days after 

the date of such election or notice, without regard to any 

other regularly scheduled open season. 

Subtitle C—Prompt Corrective Action 

SEC. 1141. CRITICAL CAPITAL LEVELS. 

(a) IN GENERAL.—Section 1363 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4613) 

is amended— 

(1) by striking ‘‘For’’ and inserting ‘‘(a) ENTERPRISES.— 

FOR’’; and 

(2) by adding at the end the following new subsection: 

‘‘(b) FEDERAL HOME LOAN BANKS.— 

‘‘(1) IN GENERAL.—For purposes of this subtitle, the critical 

capital level for each Federal Home Loan Bank shall be such 

amount of capital as the Director shall, by regulation, require. 

‘‘(2) CONSIDERATION OF OTHER CRITICAL CAPITAL LEVELS.— 

In establishing the critical capital level under paragraph (1) 

for the Federal Home Loan Banks, the Director shall take 

due consideration of the critical capital level established under 

subsection (a) for the enterprises, with such modifications as 

the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises.’’. 

(b) REGULATIONS.—Not later than the expiration of the 180- 

day period beginning on the date of enactment of this Act, the 

Director of the Federal Housing Finance Agency shall issue regulations pursuant to section 1363(b) of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (as added by this 

section) establishing the critical capital level under such section. 

SEC. 1142. CAPITAL CLASSIFICATIONS. 

(a) IN GENERAL.—Section 1364 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4614) 

is amended— 

(1) in the heading for subsection (a) by striking ‘‘In General’’ 

and inserting ‘‘Enterprises’’; 

(2) in subsection (c)— 

(A) by striking ‘‘subsection (b)’’ and inserting ‘‘subsection (c)’’; 

(B) by striking ‘‘enterprises’’ and inserting ‘‘regulated 

entities’’; and 

(C) by striking the last sentence; 

(3) by redesignating subsections (c) (as so amended by 

paragraph (2) of this subsection) and (d) as subsections (d) 

and (f), respectively; 

(4) by striking subsection (b) and inserting the following: 

‘‘(b) FEDERAL HOME LOAN BANKS.— 

Deadline. 

12 USC 4613 

note. 

Regulations. 

Deadline. 

Payments. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2731 

‘‘(1) ESTABLISHMENT AND CRITERIA.—For purposes of this 

subtitle, the Director shall, by regulation— 

‘‘(A) establish the capital classifications specified under 

paragraph (2) for the Federal Home Loan Banks; 

‘‘(B) establish criteria for each such capital classification based on the amount and types of capital held by 

a bank and the risk-based, minimum, and critical capital 

levels for the banks and taking due consideration of the 

capital classifications established under subsection (a) for 

the enterprises, with such modifications as the Director 

determines to be appropriate to reflect the difference in 

operations between the banks and the enterprises; and 

‘‘(C) shall classify the Federal Home Loan Banks 

according to such capital classifications. 

‘‘(2) CLASSIFICATIONS.—The capital classifications specified 

under this paragraph are— 

‘‘(A) adequately capitalized; 

‘‘(B) undercapitalized; 

‘‘(C) significantly undercapitalized; and 

‘‘(D) critically undercapitalized. 

‘‘(c) DISCRETIONARY CLASSIFICATION.— 

‘‘(1) GROUNDS FOR RECLASSIFICATION.—The Director may 

reclassify a regulated entity under paragraph (2) if— 

‘‘(A) at any time, the Director determines in writing 

that the regulated entity is engaging in conduct that could 

result in a rapid depletion of core or total capital or the 

value of collateral pledged as security has decreased significantly or that the value of the property subject to mortgages 

held by the regulated entity (or securitized in the case 

of an enterprise) has decreased significantly; 

‘‘(B) after notice and an opportunity for hearing, the 

Director determines that the regulated entity is in an 

unsafe or unsound condition; or 

‘‘(C) pursuant to section 1371(b), the Director deems 

the regulated entity to be engaging in an unsafe or unsound 

practice. 

‘‘(2) RECLASSIFICATION.—In addition to any other action 

authorized under this title, including the reclassification of 

a regulated entity for any reason not specified in this subsection, if the Director takes any action described in paragraph 

(1), the Director may classify a regulated entity— 

‘‘(A) as undercapitalized, if the regulated entity is 

otherwise classified as adequately capitalized; 

‘‘(B) as significantly undercapitalized, if the regulated 

entity is otherwise classified as undercapitalized; and 

‘‘(C) as critically undercapitalized, if the regulated 

entity is otherwise classified as significantly undercapitalized.’’; and 

(5) by inserting after subsection (d) (as so redesignated 

by paragraph (3) of this subsection), the following new subsection: 

‘‘(e) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 

‘‘(1) IN GENERAL.—A regulated entity shall make no capital 

distribution if, after making the distribution, the regulated 

entity would be undercapitalized. 

Regulations. 


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122 STAT. 2732 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(2) EXCEPTION.—Notwithstanding paragraph (1), the 

Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise 

acquire shares or ownership interests if the repurchase, 

redemption, retirement, or other acquisition— 

‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at 

least an equivalent amount; and 

‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition 

of the entity.’’. 

(b) REGULATIONS.—Not later than the expiration of the 180- 

day period beginning on the date of enactment of this Act, the 

Director of the Federal Housing Finance Agency shall issue regulations to carry out section 1364(b) of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (as added by this 

section), relating to capital classifications for the Federal Home 

Loan Banks. 

SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED ENTITIES. 

Section 1365 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4615) is amended— 

(1) by striking ‘‘the enterprise’’ each place that term 

appears and inserting ‘‘the regulated entity’’; 

(2) by striking ‘‘An enterprise’’ each place that term appears 

and inserting ‘‘A regulated entity’’; 

(3) by striking ‘‘an enterprise’’ each place that term appears 

and inserting ‘‘a regulated entity’’; 

(4) in subsection (a)— 

(A) by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively; 

(B) by inserting before paragraph (2), as redesignated, 

the following: 

‘‘(1) REQUIRED MONITORING.—The Director shall— 

‘‘(A) closely monitor the condition of any undercapitalized regulated entity; 

‘‘(B) closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on 

an undercapitalized regulated entity under this section; 

and 

‘‘(C) periodically review the plan, restrictions, and 

requirements applicable to an undercapitalized regulated 

entity to determine whether the plan, restrictions, and 

requirements are achieving the purpose of this section.’’; 

and 

(C) by adding at the end the following: 

‘‘(4) RESTRICTION OF ASSET GROWTH.—An undercapitalized 

regulated entity shall not permit its average total assets during 

any calendar quarter to exceed its average total assets during 

the preceding calendar quarter, unless— 

‘‘(A) the Director has accepted the capital restoration 

plan of the regulated entity; 

‘‘(B) any increase in total assets is consistent with 

the capital restoration plan; and 

‘‘(C) the ratio of tangible equity to assets of the regulated entity increases during the calendar quarter at a 

Review. 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2733 

rate sufficient to enable the regulated entity to become 

adequately capitalized within a reasonable time. 

‘‘(5) PRIOR APPROVAL OF ACQUISITIONS AND NEW ACTIVITIES.—An undercapitalized regulated entity shall not, directly 

or indirectly, acquire any interest in any entity or engage 

in any new activity, unless— 

‘‘(A) the Director has accepted the capital restoration 

plan of the regulated entity, the regulated entity is implementing the plan, and the Director determines that the 

proposed action is consistent with and will further the 

achievement of the plan; or 

‘‘(B) the Director determines that the proposed action 

will further the purpose of this subtitle.’’; 

(5) in subsection (b)— 

(A) in the subsection heading, by striking ‘‘DISCRETIONARY’’; 

(B) in the matter preceding paragraph (1), by striking 

‘‘may’’ and inserting ‘‘shall’’; and 

(C) in paragraph (2)— 

(i) by striking ‘‘make, in good faith, reasonable 

efforts necessary to’’; and 

(ii) by striking the period at the end and inserting 

‘‘in any material respect.’’; and 

(6) by striking subsection (c) and inserting the following: 

‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The Director may 

take, with respect to an undercapitalized regulated entity, any 

of the actions authorized to be taken under section 1366 with 

respect to a significantly undercapitalized regulated entity, if the 

Director determines that such actions are necessary to carry out 

the purpose of this subtitle.’’. 

SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 

UNDERCAPITALIZED REGULATED ENTITIES. 

Section 1366 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4616) is amended— 

(1) in subsection (a)(2), by striking ‘‘undercapitalized enterprise’’ and inserting ‘‘undercapitalized’’; 

(2) by striking ‘‘the enterprise’’ each place that term 

appears and inserting ‘‘the regulated entity’’; 

(3) by striking ‘‘An enterprise’’ each place that term appears 

and inserting ‘‘A regulated entity’’; 

(4) by striking ‘‘an enterprise’’ each place that term appears 

and inserting ‘‘a regulated entity’’; 

(5) in subsection (b)— 

(A) in the subsection heading, by striking ‘‘DISCRETIONARY SUPERVISORY’’ and inserting ‘‘SPECIFIC’’; 

(B) in the matter preceding paragraph (1), by striking 

‘‘may, at any time, take any’’ and inserting ‘‘shall carry 

out this section by taking, at any time, 1 or more’’; 

(C) by striking paragraph (6); 

(D) by redesignating paragraph (5) as paragraph (6); 

(E) by inserting after paragraph (4) the following: 

‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take 1 or more of 

the following actions: 

‘‘(A) NEW ELECTION OF BOARD.—Order a new election 

for the board of directors of the regulated entity. 


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‘‘(B) DISMISSAL OF DIRECTORS OR EXECUTIVE OFFI- CERS.—Require the regulated entity to dismiss from office 

any director or executive officer who had held office for 

more than 180 days immediately before the date on which 

the regulated entity became undercapitalized. Dismissal 

under this subparagraph shall not be construed to be a 

removal pursuant to the enforcement powers of the Director 

under section 1377. 

‘‘(C) EMPLOY QUALIFIED EXECUTIVE OFFICERS.—Require 

the regulated entity to employ qualified executive officers 

(who, if the Director so specifies, shall be subject to 

approval by the Director).’’; and 

(F) by adding at the end the following: 

‘‘(7) OTHER ACTION.—Require the regulated entity to take 

any other action that the Director determines will better carry 

out the purpose of this section than any of the other actions 

specified in this subsection.’’; and 

(6) by striking subsection (c) and inserting the following: 

‘‘(c) RESTRICTION ON COMPENSATION OF EXECUTIVE OFFICERS.— A regulated entity that is classified as significantly undercapitalized 

in accordance with section 1364 may not, without prior written 

approval by the Director— 

‘‘(1) pay any bonus to any executive officer; or 

‘‘(2) provide compensation to any executive officer at a 

rate exceeding the average rate of compensation of that officer 

(excluding bonuses, stock options, and profit sharing) during 

the 12 calendar months preceding the calendar month in which 

the regulated entity became significantly undercapitalized.’’. 

SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED ENTITIES. 

(a) IN GENERAL.—Section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617) 

is amended to read as follows: 

‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED ENTITIES. 

‘‘(a) APPOINTMENT OF THE AGENCY AS CONSERVATOR OR

RECEIVER.— 

‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

Federal or State law, the Director may appoint the Agency 

as conservator or receiver for a regulated entity in the manner 

provided under paragraph (2) or (4). All references to the conservator or receiver under this section are references to the Agency 

acting as conservator or receiver. 

‘‘(2) DISCRETIONARY APPOINTMENT.—The Agency may, at 

the discretion of the Director, be appointed conservator or 

receiver for the purpose of reorganizing, rehabilitating, or 

winding up the affairs of a regulated entity. 

‘‘(3) GROUNDS FOR DISCRETIONARY APPOINTMENT OF CONSERVATOR OR RECEIVER.—The grounds for appointing conservator 

or receiver for any regulated entity under paragraph (2) are 

as follows: 

‘‘(A) ASSETS INSUFFICIENT FOR OBLIGATIONS.—The 

assets of the regulated entity are less than the obligations 

of the regulated entity to its creditors and others. 

‘‘(B) SUBSTANTIAL DISSIPATION.—Substantial dissipation of assets or earnings due to— 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2735 

‘‘(i) any violation of any provision of Federal or 

State law; or 

‘‘(ii) any unsafe or unsound practice. 

‘‘(C) UNSAFE OR UNSOUND CONDITION.—An unsafe or 

unsound condition to transact business. 

‘‘(D) CEASE AND DESIST ORDERS.—Any willful violation 

of a cease and desist order that has become final. 

‘‘(E) CONCEALMENT.—Any concealment of the books, 

papers, records, or assets of the regulated entity, or any 

refusal to submit the books, papers, records, or affairs 

of the regulated entity, for inspection to any examiner 

or to any lawful agent of the Director. 

‘‘(F) INABILITY TO MEET OBLIGATIONS.—The regulated 

entity is likely to be unable to pay its obligations or meet 

the demands of its creditors in the normal course of business. 

‘‘(G) LOSSES.—The regulated entity has incurred or 

is likely to incur losses that will deplete all or substantially 

all of its capital, and there is no reasonable prospect for 

the regulated entity to become adequately capitalized (as 

defined in section 1364(a)(1)). 

‘‘(H) VIOLATIONS OF LAW.—Any violation of any law 

or regulation, or any unsafe or unsound practice or condition that is likely to— 

‘‘(i) cause insolvency or substantial dissipation of 

assets or earnings; or 

‘‘(ii) weaken the condition of the regulated entity. 

‘‘(I) CONSENT.—The regulated entity, by resolution of 

its board of directors or its shareholders or members, consents to the appointment. 

‘‘(J) UNDERCAPITALIZATION.—The regulated entity is 

undercapitalized or significantly undercapitalized (as 

defined in section 1364(a)(3)), and— 

‘‘(i) has no reasonable prospect of becoming adequately capitalized; 

‘‘(ii) fails to become adequately capitalized, as 

required by— 

‘‘(I) section 1365(a)(1) with respect to a regulated entity; or 

‘‘(II) section 1366(a)(1) with respect to a significantly undercapitalized regulated entity; 

‘‘(iii) fails to submit a capital restoration plan 

acceptable to the Agency within the time prescribed 

under section 1369C; or 

‘‘(iv) materially fails to implement a capital restoration plan submitted and accepted under section 

1369C. 

‘‘(K) CRITICAL UNDERCAPITALIZATION.—The regulated 

entity is critically undercapitalized, as defined in section 

1364(a)(4). 

‘‘(L) MONEY LAUNDERING.—The Attorney General notifies the Director in writing that the regulated entity has 

been found guilty of a criminal offense under section 1956 

or 1957 of title 18, United States Code, or section 5322 

or 5324 of title 31, United States Code. 

‘‘(4) MANDATORY RECEIVERSHIP.— 

Notification. 


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122 STAT. 2736 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(A) IN GENERAL.—The Director shall appoint the 

Agency as receiver for a regulated entity if the Director 

determines, in writing, that— 

‘‘(i) the assets of the regulated entity are, and 

during the preceding 60 calendar days have been, less 

than the obligations of the regulated entity to its creditors and others; or 

‘‘(ii) the regulated entity is not, and during the 

preceding 60 calendar days has not been, generally 

paying the debts of the regulated entity (other than 

debts that are the subject of a bona fide dispute) as 

such debts become due. 

‘‘(B) PERIODIC DETERMINATION REQUIRED FOR CRITI- CALLY UNDERCAPITALIZED REGULATED ENTITY.—If a regulated entity is critically undercapitalized, the Director shall 

make a determination, in writing, as to whether the regulated entity meets the criteria specified in clause (i) or 

(ii) of subparagraph (A)— 

‘‘(i) not later than 30 calendar days after the regulated entity initially becomes critically undercapitalized; and 

‘‘(ii) at least once during each succeeding 30-calendar day period. 

‘‘(C) DETERMINATION NOT REQUIRED IF RECEIVERSHIP

ALREADY IN PLACE.—Subparagraph (B) does not apply with 

respect to a regulated entity in any period during which 

the Agency serves as receiver for the regulated entity. 

‘‘(D) RECEIVERSHIP TERMINATES CONSERVATORSHIP.— 

The appointment of the Agency as receiver of a regulated 

entity under this section shall immediately terminate any 

conservatorship established for the regulated entity under 

this title. 

‘‘(5) JUDICIAL REVIEW.— 

‘‘(A) IN GENERAL.—If the Agency is appointed conservator or receiver under this section, the regulated entity 

may, within 30 days of such appointment, bring an action 

in the United States district court for the judicial district 

in which the home office of such regulated entity is located, 

or in the United States District Court for the District 

of Columbia, for an order requiring the Agency to remove 

itself as conservator or receiver. 

‘‘(B) REVIEW.—Upon the filing of an action under 

subparagraph (A), the court shall, upon the merits, dismiss 

such action or direct the Agency to remove itself as such 

conservator or receiver. 

‘‘(6) DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF CONSERVATOR OR RECEIVER.—The members of the 

board of directors of a regulated entity shall not be liable 

to the shareholders or creditors of the regulated entity for 

acquiescing in or consenting in good faith to the appointment 

of the Agency as conservator or receiver for that regulated 

entity. 

‘‘(7) AGENCY NOT SUBJECT TO ANY OTHER FEDERAL

AGENCY.—When acting as conservator or receiver, the Agency 

shall not be subject to the direction or supervision of any 

other agency of the United States or any State in the exercise 

of the rights, powers, and privileges of the Agency. 

Deadline. 

Deadlines. 


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‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CONSERVATOR

OR RECEIVER.— 

‘‘(1) RULEMAKING AUTHORITY OF THE AGENCY.—The Agency 

may prescribe such regulations as the Agency determines to 

be appropriate regarding the conduct of conservatorships or 

receiverships. 

‘‘(2) GENERAL POWERS.— 

‘‘(A) SUCCESSOR TO REGULATED ENTITY.—The Agency 

shall, as conservator or receiver, and by operation of law, 

immediately succeed to— 

‘‘(i) all rights, titles, powers, and privileges of the 

regulated entity, and of any stockholder, officer, or 

director of such regulated entity with respect to the 

regulated entity and the assets of the regulated entity; 

and 

‘‘(ii) title to the books, records, and assets of any 

other legal custodian of such regulated entity. 

‘‘(B) OPERATE THE REGULATED ENTITY.—The Agency 

may, as conservator or receiver— 

‘‘(i) take over the assets of and operate the regulated entity with all the powers of the shareholders, 

the directors, and the officers of the regulated entity 

and conduct all business of the regulated entity; 

‘‘(ii) collect all obligations and money due the regulated entity; 

‘‘(iii) perform all functions of the regulated entity 

in the name of the regulated entity which are consistent with the appointment as conservator or 

receiver; 

‘‘(iv) preserve and conserve the assets and property 

of the regulated entity; and 

‘‘(v) provide by contract for assistance in fulfilling 

any function, activity, action, or duty of the Agency 

as conservator or receiver. 

‘‘(C) FUNCTIONS OF OFFICERS, DIRECTORS, AND SHAREHOLDERS OF A REGULATED ENTITY.—The Agency may, by 

regulation or order, provide for the exercise of any function 

by any stockholder, director, or officer of any regulated 

entity for which the Agency has been named conservator 

or receiver. 

‘‘(D) POWERS AS CONSERVATOR.—The Agency may, as 

conservator, take such action as may be— 

‘‘(i) necessary to put the regulated entity in a sound 

and solvent condition; and 

‘‘(ii) appropriate to carry on the business of the 

regulated entity and preserve and conserve the assets 

and property of the regulated entity. 

‘‘(E) ADDITIONAL POWERS AS RECEIVER.—In any case 

in which the Agency is acting as receiver, the Agency 

shall place the regulated entity in liquidation and proceed 

to realize upon the assets of the regulated entity in such 

manner as the Agency deems appropriate, including 

through the sale of assets, the transfer of assets to a 

limited-life regulated entity established under subsection 

(i), or the exercise of any other rights or privileges granted 

to the Agency under this paragraph. 

Regulations. 


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‘‘(F) ORGANIZATION OF NEW ENTERPRISE.—The Agency 

may, as receiver for an enterprise, organize a successor 

enterprise that will operate pursuant to subsection (i). 

‘‘(G) TRANSFER OR SALE OF ASSETS AND LIABILITIES.— The Agency may, as conservator or receiver, transfer or 

sell any asset or liability of the regulated entity in default, 

and may do so without any approval, assignment, or consent with respect to such transfer or sale. 

‘‘(H) PAYMENT OF VALID OBLIGATIONS.—The Agency, 

as conservator or receiver, shall, to the extent of proceeds 

realized from the performance of contracts or sale of the 

assets of a regulated entity, pay all valid obligations of 

the regulated entity that are due and payable at the time 

of the appointment of the Agency as conservator or receiver, 

in accordance with the prescriptions and limitations of 

this section. 

‘‘(I) SUBPOENA AUTHORITY.— 

‘‘(i) IN GENERAL.— 

‘‘(I) AGENCY AUTHORITY.—The Agency may, as 

conservator or receiver, and for purposes of carrying out any power, authority, or duty with 

respect to a regulated entity (including determining any claim against the regulated entity and 

determining and realizing upon any asset of any 

person in the course of collecting money due the 

regulated entity), exercise any power established 

under section 1348. 

‘‘(II) APPLICABILITY OF LAW.—The provisions 

of section 1348 shall apply with respect to the 

exercise of any power under this subparagraph, 

in the same manner as such provisions apply under 

that section. 

‘‘(ii) SUBPOENA.—A subpoena or subpoena duces 

tecum may be issued under clause (i) only by, or with 

the written approval of, the Director, or the designee 

of the Director. 

‘‘(iii) RULE OF CONSTRUCTION.—This subsection 

shall not be construed to limit any rights that the 

Agency, in any capacity, might otherwise have under 

section 1317 or 1379B. 

‘‘(J) INCIDENTAL POWERS.—The Agency may, as conservator or receiver— 

‘‘(i) exercise all powers and authorities specifically 

granted to conservators or receivers, respectively, 

under this section, and such incidental powers as shall 

be necessary to carry out such powers; and 

‘‘(ii) take any action authorized by this section, 

which the Agency determines is in the best interests 

of the regulated entity or the Agency. 

‘‘(K) OTHER PROVISIONS.— 

‘‘(i) SHAREHOLDERS AND CREDITORS OF FAILED

REGULATED ENTITY.—Notwithstanding any other provision of law, the appointment of the Agency as receiver 

for a regulated entity pursuant to paragraph (2) or 

(4) of subsection (a) and its succession, by operation 

of law, to the rights, titles, powers, and privileges 

described in subsection (b)(2)(A) shall terminate all 


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rights and claims that the stockholders and creditors 

of the regulated entity may have against the assets 

or charter of the regulated entity or the Agency arising 

as a result of their status as stockholders or creditors, 

except for their right to payment, resolution, or other 

satisfaction of their claims, as permitted under subsections (b)(9), (c), and (e). 

‘‘(ii) ASSETS OF REGULATED ENTITY.—Notwithstanding any other provision of law, for purposes of 

this section, the charter of a regulated entity shall 

not be considered an asset of the regulated entity. 

‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE CLAIMS.— 

‘‘(A) IN GENERAL.—The Agency may, as receiver, determine claims in accordance with the requirements of this 

subsection and any regulations prescribed under paragraph 

(4). 

‘‘(B) NOTICE REQUIREMENTS.—The receiver, in any case 

involving the liquidation or winding up of the affairs of 

a closed regulated entity, shall— 

‘‘(i) promptly publish a notice to the creditors of 

the regulated entity to present their claims, together 

with proof, to the receiver by a date specified in the 

notice which shall be not less than 90 days after the 

date of publication of such notice; and 

‘‘(ii) republish such notice approximately 1 month 

and 2 months, respectively, after the date of publication 

under clause (i). 

‘‘(C) MAILING REQUIRED.—The receiver shall mail a 

notice similar to the notice published under subparagraph 

(B)(i) at the time of such publication to any creditor shown 

on the books of the regulated entity— 

‘‘(i) at the last address of the creditor appearing 

in such books; or 

‘‘(ii) upon discovery of the name and address of 

a claimant not appearing on the books of the regulated 

entity, within 30 days after the discovery of such name 

and address. 

‘‘(4) RULEMAKING AUTHORITY RELATING TO DETERMINATION

OF CLAIMS.—Subject to subsection (c), the Director may prescribe regulations regarding the allowance or disallowance of 

claims by the receiver and providing for administrative determination of claims and review of such determination. 

‘‘(5) PROCEDURES FOR DETERMINATION OF CLAIMS.— 

‘‘(A) DETERMINATION PERIOD.— 

‘‘(i) IN GENERAL.—Before the end of the 180-day 

period beginning on the date on which any claim 

against a regulated entity is filed with the Agency 

as receiver, the Agency shall determine whether to 

allow or disallow the claim and shall notify the claimant of any determination with respect to such claim. 

‘‘(ii) EXTENSION OF TIME.—The period described 

in clause (i) may be extended by a written agreement 

between the claimant and the Agency. 

‘‘(iii) MAILING OF NOTICE SUFFICIENT.—The requirements of clause (i) shall be deemed to be satisfied 

if the notice of any determination with respect to any 

Deadline. 

Notification. 

Deadline. 

Notice. 

Publication. 

Deadline. 


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claim is mailed to the last address of the claimant 

which appears— 

‘‘(I) on the books of the regulated entity; 

‘‘(II) in the claim filed by the claimant; or 

‘‘(III) in documents submitted in proof of the 

claim. 

‘‘(iv) CONTENTS OF NOTICE OF DISALLOWANCE.—If 

any claim filed under clause (i) is disallowed, the notice 

to the claimant shall contain— 

‘‘(I) a statement of each reason for the disallowance; and 

‘‘(II) the procedures available for obtaining 

agency review of the determination to disallow 

the claim or judicial determination of the claim. 

‘‘(B) ALLOWANCE OF PROVEN CLAIM.—The receiver shall 

allow any claim received on or before the date specified 

in the notice published under paragraph (3)(B)(i) by the 

receiver from any claimant which is proved to the satisfaction of the receiver. 

‘‘(C) DISALLOWANCE OF CLAIMS FILED AFTER FILING

PERIOD.—Claims filed after the date specified in the notice 

published under paragraph (3)(B)(i), or the date specified 

under paragraph (3)(C), shall be disallowed and such disallowance shall be final. 

‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— 

‘‘(i) IN GENERAL.—The receiver may disallow any 

portion of any claim by a creditor or claim of security, 

preference, or priority which is not proved to the satisfaction of the receiver. 

‘‘(ii) PAYMENTS TO LESS THAN FULLY SECURED

CREDITORS.—In the case of a claim of a creditor against 

a regulated entity which is secured by any property 

or other asset of such regulated entity, the receiver— 

‘‘(I) may treat the portion of such claim which 

exceeds an amount equal to the fair market value 

of such property or other asset as an unsecured 

claim against the regulated entity; and 

‘‘(II) may not make any payment with respect 

to such unsecured portion of the claim, other than 

in connection with the disposition of all claims 

of unsecured creditors of the regulated entity. 

‘‘(iii) EXCEPTIONS.—No provision of this paragraph 

shall apply with respect to— 

‘‘(I) any extension of credit from any Federal 

Reserve Bank, Federal Home Loan Bank, or the 

United States Treasury; or 

‘‘(II) any security interest in the assets of the 

regulated entity securing any such extension of 

credit. 

‘‘(E) NO JUDICIAL REVIEW OF DETERMINATION PURSUANT

TO SUBPARAGRAPH (D).—No court may review the determination of the Agency under subparagraph (D) to disallow 

a claim. 

‘‘(F) LEGAL EFFECT OF FILING.— 

‘‘(i) STATUTE OF LIMITATION TOLLED.—For purposes 

of any applicable statute of limitations, the filing of 


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a claim with the receiver shall constitute a commencement of an action. 

‘‘(ii) NO PREJUDICE TO OTHER ACTIONS.—Subject 

to paragraph (10), the filing of a claim with the receiver 

shall not prejudice any right of the claimant to continue 

any action which was filed before the date of the 

appointment of the receiver, subject to the determination of claims by the receiver. 

‘‘(6) PROVISION FOR JUDICIAL DETERMINATION OF CLAIMS.— ‘‘(A) IN GENERAL.—The claimant may file suit on a 

claim (or continue an action commenced before the appointment of the receiver) in the district or territorial court 

of the United States for the district within which the principal place of business of the regulated entity is located 

or the United States District Court for the District of 

Columbia (and such court shall have jurisdiction to hear 

such claim), before the end of the 60-day period beginning 

on the earlier of— 

‘‘(i) the end of the period described in paragraph 

(5)(A)(i) with respect to any claim against a regulated 

entity for which the Agency is receiver; or 

‘‘(ii) the date of any notice of disallowance of such 

claim pursuant to paragraph (5)(A)(i). 

‘‘(B) STATUTE OF LIMITATIONS.—A claim shall be 

deemed to be disallowed (other than any portion of such 

claim which was allowed by the receiver), and such disallowance shall be final, and the claimant shall have no 

further rights or remedies with respect to such claim, if 

the claimant fails, before the end of the 60-day period 

described under subparagraph (A), to file suit on such 

claim (or continue an action commenced before the appointment of the receiver). 

‘‘(7) REVIEW OF CLAIMS.— 

‘‘(A) OTHER REVIEW PROCEDURES.— 

‘‘(i) IN GENERAL.—The Agency shall establish such 

alternative dispute resolution processes as may be 

appropriate for the resolution of claims filed under 

paragraph (5)(A)(i). 

‘‘(ii) CRITERIA.—In establishing alternative dispute 

resolution processes, the Agency shall strive for procedures which are expeditious, fair, independent, and 

low cost. 

‘‘(iii) VOLUNTARY BINDING OR NONBINDING PROCEDURES.—The Agency may establish both binding and 

nonbinding processes under this subparagraph, which 

may be conducted by any government or private party. 

All parties, including the claimant and the Agency, 

must agree to the use of the process in a particular 

case. 

‘‘(B) CONSIDERATION OF INCENTIVES.—The Agency shall 

seek to develop incentives for claimants to participate in 

the alternative dispute resolution process. 

‘‘(8) EXPEDITED DETERMINATION OF CLAIMS.— 

‘‘(A) ESTABLISHMENT REQUIRED.—The Agency shall 

establish a procedure for expedited relief outside of the 

routine claims process established under paragraph (5) for 

claimants who— 

Procedures. 

Deadline. 


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‘‘(i) allege the existence of legally valid and enforceable or perfected security interests in assets of any 

regulated entity for which the Agency has been 

appointed receiver; and 

‘‘(ii) allege that irreparable injury will occur if 

the routine claims procedure is followed. 

‘‘(B) DETERMINATION PERIOD.—Before the end of the 

90-day period beginning on the date on which any claim 

is filed in accordance with the procedures established under 

subparagraph (A), the Director shall— 

‘‘(i) determine— 

‘‘(I) whether to allow or disallow such claim; 

or 

‘‘(II) whether such claim should be determined 

pursuant to the procedures established under paragraph (5); and 

‘‘(ii) notify the claimant of the determination, and 

if the claim is disallowed, provide a statement of each 

reason for the disallowance and the procedure for 

obtaining agency review or judicial determination. 

‘‘(C) PERIOD FOR FILING OR RENEWING SUIT.—Any 

claimant who files a request for expedited relief shall be 

permitted to file a suit, or to continue a suit filed before 

the date of appointment of the receiver, seeking a determination of the rights of the claimant with respect to 

such security interest after the earlier of— 

‘‘(i) the end of the 90-day period beginning on 

the date of the filing of a request for expedited relief; 

or 

‘‘(ii) the date on which the Agency denies the claim. 

‘‘(D) STATUTE OF LIMITATIONS.—If an action described 

under subparagraph (C) is not filed, or the motion to renew 

a previously filed suit is not made, before the end of the 

30-day period beginning on the date on which such action 

or motion may be filed under subparagraph (B), the claim 

shall be deemed to be disallowed as of the end of such 

period (other than any portion of such claim which was 

allowed by the receiver), such disallowance shall be final, 

and the claimant shall have no further rights or remedies 

with respect to such claim. 

‘‘(E) LEGAL EFFECT OF FILING.— 

‘‘(i) STATUTE OF LIMITATION TOLLED.—For purposes 

of any applicable statute of limitations, the filing of 

a claim with the receiver shall constitute a commencement of an action. 

‘‘(ii) NO PREJUDICE TO OTHER ACTIONS.—Subject 

to paragraph (10), the filing of a claim with the receiver 

shall not prejudice any right of the claimant to continue 

any action that was filed before the appointment of 

the receiver, subject to the determination of claims 

by the receiver. 

‘‘(9) PAYMENT OF CLAIMS.— 

‘‘(A) IN GENERAL.—The receiver may, in the discretion 

of the receiver, and to the extent that funds are available 

from the assets of the regulated entity, pay creditor claims, 

in such manner and amounts as are authorized under 

this section, which are— 

Deadline. 

Notification. 

Deadline. 


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‘‘(i) allowed by the receiver; 

‘‘(ii) approved by the Agency pursuant to a final 

determination pursuant to paragraph (7) or (8); or 

‘‘(iii) determined by the final judgment of any court 

of competent jurisdiction. 

‘‘(B) AGREEMENTS AGAINST THE INTEREST OF THE

AGENCY.—No agreement that tends to diminish or defeat 

the interest of the Agency in any asset acquired by the 

Agency as receiver under this section shall be valid against 

the Agency unless such agreement is in writing and 

executed by an authorized officer or representative of the 

regulated entity. 

‘‘(C) PAYMENT OF DIVIDENDS ON CLAIMS.—The receiver 

may, in the sole discretion of the receiver, pay from the 

assets of the regulated entity dividends on proved claims 

at any time, and no liability shall attach to the Agency 

by reason of any such payment, for failure to pay dividends 

to a claimant whose claim is not proved at the time of 

any such payment. 

‘‘(D) RULEMAKING AUTHORITY OF THE DIRECTOR.—The 

Director may prescribe such rules, including definitions 

of terms, as the Director deems appropriate to establish 

a single uniform interest rate for, or to make payments 

of post-insolvency interest to creditors holding proven 

claims against the receivership estates of the regulated 

entity, following satisfaction by the receiver of the principal 

amount of all creditor claims. 

‘‘(10) SUSPENSION OF LEGAL ACTIONS.— 

‘‘(A) IN GENERAL.—After the appointment of a conservator or receiver for a regulated entity, the conservator 

or receiver may, in any judicial action or proceeding to 

which such regulated entity is or becomes a party, request 

a stay for a period not to exceed— 

‘‘(i) 45 days, in the case of any conservator; and 

‘‘(ii) 90 days, in the case of any receiver. 

‘‘(B) GRANT OF STAY BY ALL COURTS REQUIRED.—Upon 

receipt of a request by the conservator or receiver under 

subparagraph (A) for a stay of any judicial action or proceeding in any court with jurisdiction of such action or 

proceeding, the court shall grant such stay as to all parties. 

‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— 

‘‘(A) PRIOR FINAL ADJUDICATION.—The Agency shall 

abide by any final unappealable judgment of any court 

of competent jurisdiction which was rendered before the 

appointment of the Agency as conservator or receiver. 

‘‘(B) RIGHTS AND REMEDIES OF CONSERVATOR OR

RECEIVER.—In the event of any appealable judgment, the 

Agency as conservator or receiver— 

‘‘(i) shall have all of the rights and remedies available to the regulated entity (before the appointment 

of such conservator or receiver) and the Agency, 

including removal to Federal court and all appellate 

rights; and 

‘‘(ii) shall not be required to post any bond in 

order to pursue such remedies. 

‘‘(C) NO ATTACHMENT OR EXECUTION.—No attachment 

or execution may issue by any court upon assets in the 


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possession of the receiver, or upon the charter, of a regulated entity for which the Agency has been appointed 

receiver. 

‘‘(D) LIMITATION ON JUDICIAL REVIEW.—Except as 

otherwise provided in this subsection, no court shall have 

jurisdiction over— 

‘‘(i) any claim or action for payment from, or any 

action seeking a determination of rights with respect 

to, the assets or charter of any regulated entity for 

which the Agency has been appointed receiver; or 

‘‘(ii) any claim relating to any act or omission 

of such regulated entity or the Agency as receiver. 

‘‘(E) DISPOSITION OF ASSETS.—In exercising any right, 

power, privilege, or authority as conservator or receiver 

in connection with any sale or disposition of assets of 

a regulated entity for which the Agency has been appointed 

conservator or receiver, the Agency shall conduct its operations in a manner which— 

‘‘(i) maximizes the net present value return from 

the sale or disposition of such assets; 

‘‘(ii) minimizes the amount of any loss realized 

in the resolution of cases; and 

‘‘(iii) ensures adequate competition and fair and 

consistent treatment of offerors. 

‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY

CONSERVATOR OR RECEIVER.— 

‘‘(A) IN GENERAL.—Notwithstanding any provision of 

any contract, the applicable statute of limitations with 

regard to any action brought by the Agency as conservator 

or receiver shall be— 

‘‘(i) in the case of any contract claim, the longer 

of— 

‘‘(I) the 6-year period beginning on the date 

on which the claim accrues; or 

‘‘(II) the period applicable under State law; 

and 

‘‘(ii) in the case of any tort claim, the longer of— 

‘‘(I) the 3-year period beginning on the date 

on which the claim accrues; or 

‘‘(II) the period applicable under State law. 

‘‘(B) DETERMINATION OF THE DATE ON WHICH A CLAIM

ACCRUES.—For purposes of subparagraph (A), the date on 

which the statute of limitations begins to run on any claim 

described in such subparagraph shall be the later of— 

‘‘(i) the date of the appointment of the Agency 

as conservator or receiver; or 

‘‘(ii) the date on which the cause of action accrues. 

‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF ACTION.— 

‘‘(A) IN GENERAL.—In the case of any tort claim 

described under clause (ii) for which the statute of limitations applicable under State law with respect to such claim 

has expired not more than 5 years before the appointment 

of the Agency as conservator or receiver, the Agency may 

bring an action as conservator or receiver on such claim 

without regard to the expiration of the statute of limitations 

applicable under State law. 

Effective date. 


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‘‘(B) CLAIMS DESCRIBED.—A tort claim referred to under 

clause (i) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the regulated entity. 

‘‘(14) ACCOUNTING AND RECORDKEEPING REQUIREMENTS.— ‘‘(A) IN GENERAL.—The Agency as conservator or 

receiver shall, consistent with the accounting and reporting 

practices and procedures established by the Agency, maintain a full accounting of each conservatorship and receivership or other disposition of a regulated entity in default. 

‘‘(B) ANNUAL ACCOUNTING OR REPORT.—With respect 

to each conservatorship or receivership, the Agency shall 

make an annual accounting or report available to the 

Board, the Comptroller General of the United States, the 

Committee on Banking, Housing, and Urban Affairs of 

the Senate, and the Committee on Financial Services of 

the House of Representatives. 

‘‘(C) AVAILABILITY OF REPORTS.—Any report prepared 

under subparagraph (B) shall be made available by the 

Agency upon request to any shareholder of a regulated 

entity or any member of the public. 

‘‘(D) RECORDKEEPING REQUIREMENT.—After the end of 

the 6-year period beginning on the date on which the 

conservatorship or receivership is terminated by the 

Director, the Agency may destroy any records of such regulated entity which the Agency, in the discretion of the 

Agency, determines to be unnecessary, unless directed not 

to do so by a court of competent jurisdiction or governmental agency, or prohibited by law. 

‘‘(15) FRAUDULENT TRANSFERS.— 

‘‘(A) IN GENERAL.—The Agency, as conservator or 

receiver, may avoid a transfer of any interest of an entityaffiliated party, or any person determined by the conservator or receiver to be a debtor of the regulated entity, 

in property, or any obligation incurred by such party or 

person, that was made within 5 years of the date on which 

the Agency was appointed conservator or receiver, if such 

party or person voluntarily or involuntarily made such 

transfer or incurred such liability with the intent to hinder, 

delay, or defraud the regulated entity, the Agency, the 

conservator, or receiver. 

‘‘(B) RIGHT OF RECOVERY.—To the extent a transfer 

is avoided under subparagraph (A), the conservator or 

receiver may recover, for the benefit of the regulated entity, 

the property transferred, or, if a court so orders, the value 

of such property (at the time of such transfer) from— 

‘‘(i) the initial transferee of such transfer or the 

entity-affiliated party or person for whose benefit such 

transfer was made; or 

‘‘(ii) any immediate or mediate transferee of any 

such initial transferee. 

‘‘(C) RIGHTS OF TRANSFEREE OR OBLIGEE.—The conservator or receiver may not recover under subparagraph (B) 

from— 

‘‘(i) any transferee that takes for value, including 

satisfaction or securing of a present or antecedent debt, 

in good faith; or 


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‘‘(ii) any immediate or mediate good faith transferee of such transferee. 

‘‘(D) RIGHTS UNDER THIS PARAGRAPH.—The rights under 

this paragraph of the conservator or receiver described 

under subparagraph (A) shall be superior to any rights 

of a trustee or any other party (other than any party 

which is a Federal agency) under title 11, United States 

Code. 

‘‘(16) ATTACHMENT OF ASSETS AND OTHER INJUNCTIVE

RELIEF.—Subject to paragraph (17), any court of competent 

jurisdiction may, at the request of the conservator or receiver, 

issue an order in accordance with rule 65 of the Federal Rules 

of Civil Procedure, including an order placing the assets of 

any person designated by the conservator or receiver under 

the control of the court, and appointing a trustee to hold such 

assets. 

‘‘(17) STANDARDS OF PROOF.—Rule 65 of the Federal Rules 

of Civil Procedure shall apply with respect to any proceeding 

under paragraph (16) without regard to the requirement of 

such rule that the applicant show that the injury, loss, or 

damage is irreparable and immediate. 

‘‘(18) TREATMENT OF CLAIMS ARISING FROM BREACH OF CONTRACTS EXECUTED BY THE CONSERVATOR OR RECEIVER.— 

‘‘(A) IN GENERAL.—Notwithstanding any other provision of this subsection, any final and unappealable judgment for monetary damages entered against the conservator or receiver for the breach of an agreement executed 

or approved in writing by the conservator or receiver after 

the date of its appointment, shall be paid as an administrative expense of the conservator or receiver. 

‘‘(B) NO LIMITATION OF POWER.—Nothing in this paragraph shall be construed to limit the power of the conservator or receiver to exercise any rights under contract 

or law, including to terminate, breach, cancel, or otherwise 

discontinue such agreement. 

‘‘(19) GENERAL EXCEPTIONS.— 

‘‘(A) LIMITATIONS.—The rights of the conservator or 

receiver appointed under this section shall be subject to 

the limitations on the powers of a receiver under sections 

402 through 407 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4402 through 

4407). 

‘‘(B) MORTGAGES HELD IN TRUST.— 

‘‘(i) IN GENERAL.—Any mortgage, pool of mortgages, 

or interest in a pool of mortgages held in trust, custodial, or agency capacity by a regulated entity for the 

benefit of any person other than the regulated entity 

shall not be available to satisfy the claims of creditors 

generally, except that nothing in this clause shall be 

construed to expand or otherwise affect the authority 

of any regulated entity. 

‘‘(ii) HOLDING OF MORTGAGES.—Any mortgage, pool 

of mortgages, or interest in a pool of mortgages 

described in clause (i) shall be held by the conservator 

or receiver appointed under this section for the beneficial owners of such mortgage, pool of mortgages, or 

interest in accordance with the terms of the agreement 

Applicability. 


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creating such trust, custodial, or other agency arrangement. 

‘‘(iii) LIABILITY OF CONSERVATOR OR RECEIVER.— 

The liability of the conservator or receiver appointed 

under this section for damages shall, in the case of 

any contingent or unliquidated claim relating to the 

mortgages held in trust, be estimated in accordance 

with the regulations of the Director. 

‘‘(c) PRIORITY OF EXPENSES AND UNSECURED CLAIMS.— 

‘‘(1) IN GENERAL.—Unsecured claims against a regulated 

entity, or the receiver therefor, that are proven to the satisfaction of the receiver shall have priority in the following order: 

‘‘(A) Administrative expenses of the receiver. 

‘‘(B) Any other general or senior liability of the regulated entity (which is not a liability described under 

subparagraph (C) or (D). 

‘‘(C) Any obligation subordinated to general creditors 

(which is not an obligation described under subparagraph 

(D)). 

‘‘(D) Any obligation to shareholders or members arising 

as a result of their status as shareholder or members. 

‘‘(2) CREDITORS SIMILARLY SITUATED.—All creditors that are 

similarly situated under paragraph (1) shall be treated in a 

similar manner, except that the receiver may take any action 

(including making payments) that does not comply with this 

subsection, if— 

‘‘(A) the Director determines that such action is necessary to maximize the value of the assets of the regulated 

entity, to maximize the present value return from the 

sale or other disposition of the assets of the regulated 

entity, or to minimize the amount of any loss realized 

upon the sale or other disposition of the assets of the 

regulated entity; and 

‘‘(B) all creditors that are similarly situated under 

paragraph (1) receive not less than the amount provided 

in subsection (e)(2). 

‘‘(3) DEFINITION.—As used in this subsection, the term 

‘administrative expenses of the receiver’ includes— 

‘‘(A) the actual, necessary costs and expenses incurred 

by the receiver in preserving the assets of a failed regulated 

entity or liquidating or otherwise resolving the affairs of 

a failed regulated entity; and 

‘‘(B) any obligations that the receiver determines are 

necessary and appropriate to facilitate the smooth and 

orderly liquidation or other resolution of the regulated 

entity. 

‘‘(d) PROVISIONS RELATING TO CONTRACTS ENTERED INTO

BEFORE APPOINTMENT OF CONSERVATOR OR RECEIVER.— 

‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.—In addition to 

any other rights a conservator or receiver may have, the conservator or receiver for any regulated entity may disaffirm or 

repudiate any contract or lease— 

‘‘(A) to which such regulated entity is a party; 

‘‘(B) the performance of which the conservator or 

receiver, in its sole discretion, determines to be burdensome; and 


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122 STAT. 2748 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(C) the disaffirmance or repudiation of which the conservator or receiver determines, in its sole discretion, will 

promote the orderly administration of the affairs of the 

regulated entity. 

‘‘(2) TIMING OF REPUDIATION.—The conservator or receiver 

shall determine whether or not to exercise the rights of repudiation under this subsection within a reasonable period following 

such appointment. 

‘‘(3) CLAIMS FOR DAMAGES FOR REPUDIATION.— 

‘‘(A) IN GENERAL.—Except as otherwise provided under 

subparagraph (C) and paragraphs (4), (5), and (6), the 

liability of the conservator or receiver for the disaffirmance 

or repudiation of any contract pursuant to paragraph (1) 

shall be— 

‘‘(i) limited to actual direct compensatory damages; 

and 

‘‘(ii) determined as of— 

‘‘(I) the date of the appointment of the conservator or receiver; or 

‘‘(II) in the case of any contract or agreement 

referred to in paragraph (8), the date of the 

disaffirmance or repudiation of such contract or 

agreement. 

‘‘(B) NO LIABILITY FOR OTHER DAMAGES.—For purposes 

of subparagraph (A), the term ‘actual direct compensatory 

damages’ shall not include— 

‘‘(i) punitive or exemplary damages; 

‘‘(ii) damages for lost profits or opportunity; or 

‘‘(iii) damages for pain and suffering. 

‘‘(C) MEASURE OF DAMAGES FOR REPUDIATION OF FINANCIAL CONTRACTS.—In the case of any qualified financial 

contract or agreement to which paragraph (8) applies, 

compensatory damages shall be— 

‘‘(i) deemed to include normal and reasonable costs 

of cover or other reasonable measures of damages utilized in the industries for such contract and agreement 

claims; and 

‘‘(ii) paid in accordance with this subsection and 

subsection (e), except as otherwise specifically provided 

in this section. 

‘‘(4) LEASES UNDER WHICH THE REGULATED ENTITY IS THE

LESSEE.— 

‘‘(A) IN GENERAL.—If the conservator or receiver disaffirms or repudiates a lease under which the regulated 

entity was the lessee, the conservator or receiver shall 

not be liable for any damages (other than damages determined under subparagraph (B)) for the disaffirmance or 

repudiation of such lease. 

‘‘(B) PAYMENTS OF RENT.—Notwithstanding subparagraph (A), the lessor under a lease to which that subparagraph applies shall— 

‘‘(i) be entitled to the contractual rent accruing 

before the later of the date on which— 

‘‘(I) the notice of disaffirmance or repudiation 

is mailed; or 


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‘‘(II) the disaffirmance or repudiation becomes 

effective, unless the lessor is in default or breach 

of the terms of the lease; 

‘‘(ii) have no claim for damages under any acceleration clause or other penalty provision in the lease; 

and 

‘‘(iii) have a claim for any unpaid rent, subject 

to all appropriate offsets and defenses, due as of the 

date of the appointment, which shall be paid in accordance with this subsection and subsection (e). 

‘‘(5) LEASES UNDER WHICH THE REGULATED ENTITY IS THE

LESSOR.— 

‘‘(A) IN GENERAL.—If the conservator or receiver repudiates an unexpired written lease of real property of the 

regulated entity under which the regulated entity is the 

lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either— 

‘‘(i) treat the lease as terminated by such repudiation; or 

‘‘(ii) remain in possession of the leasehold interest 

for the balance of the term of the lease, unless the 

lessee defaults under the terms of the lease after the 

date of such repudiation. 

‘‘(B) PROVISIONS APPLICABLE TO LESSEE REMAINING IN

POSSESSION.—If any lessee under a lease described under 

subparagraph (A) remains in possession of a leasehold 

interest under clause (ii) of subparagraph (A)— 

‘‘(i) the lessee— 

‘‘(I) shall continue to pay the contractual rent 

pursuant to the terms of the lease after the date 

of the repudiation of such lease; and 

‘‘(II) may offset against any rent payment 

which accrues after the date of the repudiation 

of the lease, and any damages which accrue after 

such date due to the nonperformance of any obligation of the regulated entity under the lease after 

such date; and 

‘‘(ii) the conservator or receiver shall not be liable 

to the lessee for any damages arising after such date 

as a result of the repudiation, other than the amount 

of any offset allowed under clause (i)(II). 

‘‘(6) CONTRACTS FOR THE SALE OF REAL PROPERTY.— 

‘‘(A) IN GENERAL.—If the conservator or receiver repudiates any contract for the sale of real property and the 

purchaser of such real property under such contract is 

in possession, and is not, as of the date of such repudiation, 

in default, such purchaser may either— 

‘‘(i) treat the contract as terminated by such 

repudiation; or 

‘‘(ii) remain in possession of such real property. 

‘‘(B) PROVISIONS APPLICABLE TO PURCHASER REMAINING

IN POSSESSION.—If any purchaser of real property under 

any contract described under subparagraph (A) remains 

in possession of such property under clause (ii) of subparagraph (A)— 

‘‘(i) the purchaser— 

Payments. 


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122 STAT. 2750 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(I) shall continue to make all payments due 

under the contract after the date of the repudiation 

of the contract; and 

‘‘(II) may offset against any such payments 

any damages which accrue after such date due 

to the nonperformance (after such date) of any 

obligation of the regulated entity under the contract; and 

‘‘(ii) the conservator or receiver shall— 

‘‘(I) not be liable to the purchaser for any 

damages arising after such date as a result of 

the repudiation, other than the amount of any 

offset allowed under clause (i)(II); 

‘‘(II) deliver title to the purchaser in accordance with the provisions of the contract; and 

‘‘(III) have no obligation under the contract 

other than the performance required under subclause (II). 

‘‘(C) ASSIGNMENT AND SALE ALLOWED.— 

‘‘(i) IN GENERAL.—No provision of this paragraph 

shall be construed as limiting the right of the conservator or receiver to assign the contract described under 

subparagraph (A), and sell the property subject to the 

contract and the provisions of this paragraph. 

‘‘(ii) NO LIABILITY AFTER ASSIGNMENT AND SALE.— 

If an assignment and sale described under clause (i) 

is consummated, the conservator or receiver shall have 

no further liability under the contract described under 

subparagraph (A), or with respect to the real property 

which was the subject of such contract. 

‘‘(7) SERVICE CONTRACTS.— 

‘‘(A) SERVICES PERFORMED BEFORE APPOINTMENT.—In 

the case of any contract for services between any person 

and any regulated entity for which the Agency has been 

appointed conservator or receiver, any claim of such person 

for services performed before the appointment of the conservator or receiver shall be— 

‘‘(i) a claim to be paid in accordance with subsections (b) and (e); and 

‘‘(ii) deemed to have arisen as of the date on which 

the conservator or receiver was appointed. 

‘‘(B) SERVICES PERFORMED AFTER APPOINTMENT AND

PRIOR TO REPUDIATION.—If, in the case of any contract 

for services described under subparagraph (A), the conservator or receiver accepts performance by the other person 

before the conservator or receiver makes any determination 

to exercise the right of repudiation of such contract under 

this section— 

‘‘(i) the other party shall be paid under the terms 

of the contract for the services performed; and 

‘‘(ii) the amount of such payment shall be treated 

as an administrative expense of the conservatorship 

or receivership. 

‘‘(C) ACCEPTANCE OF PERFORMANCE NO BAR TO SUBSEQUENT REPUDIATION.—The acceptance by the conservator 

or receiver of services referred to under subparagraph (B) 

Payments. 

Payments. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2751 

in connection with a contract described in such subparagraph shall not affect the right of the conservator or 

receiver to repudiate such contract under this section at 

any time after such performance. 

‘‘(8) CERTAIN QUALIFIED FINANCIAL CONTRACTS.— ‘‘(A) RIGHTS OF PARTIES TO CONTRACTS.—Subject to 

paragraphs (9) and (10), and notwithstanding any other 

provision of this title (other than subsection (b)(9)(B) of 

this section), any other Federal law, or the law of any 

State, no person shall be stayed or prohibited from exercising— 

‘‘(i) any right of that person to cause the termination, liquidation, or acceleration of any qualified 

financial contract with a regulated entity that arises 

upon the appointment of the Agency as receiver for 

such regulated entity at any time after such appointment; 

‘‘(ii) any right under any security agreement or 

arrangement or other credit enhancement relating to 

one or more qualified financial contracts; or 

‘‘(iii) any right to offset or net out any termination 

value, payment amount, or other transfer obligation 

arising under or in connection with 1 or more contracts 

and agreements described in clause (i), including any 

master agreement for such contracts or agreements. 

‘‘(B) APPLICABILITY OF OTHER PROVISIONS.—Subsection 

(b)(10) shall apply in the case of any judicial action or 

proceeding brought against any receiver referred to under 

subparagraph (A), or the regulated entity for which such 

receiver was appointed, by any party to a contract or agreement described under subparagraph (A)(i) with such regulated entity. 

‘‘(C) CERTAIN TRANSFERS NOT AVOIDABLE.— 

‘‘(i) IN GENERAL.—Notwithstanding paragraph (11), 

or any other provision of Federal or State law relating 

to the avoidance of preferential or fraudulent transfers, 

the Agency, whether acting as such or as conservator 

or receiver of a regulated entity, may not avoid any 

transfer of money or other property in connection with 

any qualified financial contract with a regulated entity. 

‘‘(ii) EXCEPTION FOR CERTAIN TRANSFERS.—Clause 

(i) shall not apply to any transfer of money or other 

property in connection with any qualified financial contract with a regulated entity if the Agency determines 

that the transferee had actual intent to hinder, delay, 

or defraud such regulated entity, the creditors of such 

regulated entity, or any conservator or receiver 

appointed for such regulated entity. 

‘‘(D) CERTAIN CONTRACTS AND AGREEMENTS DEFINED.— 

In this subsection the following definitions shall apply: 

‘‘(i) QUALIFIED FINANCIAL CONTRACT.—The term 

‘qualified financial contract’ means any securities contract, commodity contract, forward contract, repurchase 

agreement, swap agreement, and any similar agreement that the Agency determines by regulation, resolution, or order to be a qualified financial contract for 

purposes of this paragraph. 


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122 STAT. 2752 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(ii) SECURITIES CONTRACT.—The term ‘securities 

contract’— 

‘‘(I) means a contract for the purchase, sale, 

or loan of a security, a certificate of deposit, a 

mortgage loan, or any interest in a mortgage loan, 

a group or index of securities, certificates of 

deposit, or mortgage loans or interests therein 

(including any interest therein or based on the 

value thereof) or any option on any of the foregoing, including any option to purchase or sell 

any such security, certificate of deposit, mortgage 

loan, interest, group or index, or option, and 

including any repurchase or reverse repurchase 

transaction on any such security, certificate of 

deposit, mortgage loan, interest, group or index, 

or option; 

‘‘(II) does not include any purchase, sale, or 

repurchase obligation under a participation in a 

commercial mortgage loan, unless the Agency 

determines by regulation, resolution, or order to 

include any such agreement within the meaning 

of such term; 

‘‘(III) means any option entered into on a 

national securities exchange relating to foreign 

currencies; 

‘‘(IV) means the guarantee by or to any securities clearing agency of any settlement of cash, 

securities, certificates of deposit, mortgage loans 

or interests therein, group or index of securities, 

certificates of deposit, or mortgage loans or 

interests therein (including any interest therein 

or based on the value thereof) or option on any 

of the foregoing, including any option to purchase 

or sell any such security, certificate of deposit, 

mortgage loan, interest, group or index, or option; 

‘‘(V) means any margin loan; 

‘‘(VI) means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause; 

‘‘(VII) means any combination of the agreements or transactions referred to in this clause; 

‘‘(VIII) means any option to enter into any 

agreement or transaction referred to in this clause; 

‘‘(IX) means a master agreement that provides 

for an agreement or transaction referred to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII), 

together with all supplements to any such master 

agreement, without regard to whether the master 

agreement provides for an agreement or transaction that is not a securities contract under this 

clause, except that the master agreement shall 

be considered to be a securities contract under 

this clause only with respect to each agreement 

or transaction under the master agreement that 

is referred to in subclause (I), (III), (IV), (V), (VI), 

(VII), or (VIII); and 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2753 

‘‘(X) means any security agreement or arrangement or other credit enhancement related to any 

agreement or transaction referred to in this clause, 

including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause. 

‘‘(iii) COMMODITY CONTRACT.—The term ‘commodity contract’ means— 

‘‘(I) with respect to a futures commission merchant, a contract for the purchase or sale of a 

commodity for future delivery on, or subject to 

the rules of, a contract market or board of trade; 

‘‘(II) with respect to a foreign futures commission merchant, a foreign future; 

‘‘(III) with respect to a leverage transaction 

merchant, a leverage transaction; 

‘‘(IV) with respect to a clearing organization, 

a contract for the purchase or sale of a commodity 

for future delivery on, or subject to the rules of, 

a contract market or board of trade that is cleared 

by such clearing organization, or commodity option 

traded on, or subject to the rules of, a contract 

market or board of trade that is cleared by such 

clearing organization; 

‘‘(V) with respect to a commodity options 

dealer, a commodity option; 

‘‘(VI) any other agreement or transaction that 

is similar to any agreement or transaction referred 

to in this clause; 

‘‘(VII) any combination of the agreements or 

transactions referred to in this clause; 

‘‘(VIII) any option to enter into any agreement 

or transaction referred to in this clause; 

‘‘(IX) a master agreement that provides for 

an agreement or transaction referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII), 

together with all supplements to any such master 

agreement, without regard to whether the master 

agreement provides for an agreement or transaction that is not a commodity contract under this 

clause, except that the master agreement shall 

be considered to be a commodity contract under 

this clause only with respect to each agreement 

or transaction under the master agreement that 

is referred to in subclause (I), (II), (III), (IV), (V), 

(VI), (VII), or (VIII); or 

‘‘(X) any security agreement or arrangement 

or other credit enhancement related to any agreement or transaction referred to in this clause, 

including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause. 

‘‘(iv) FORWARD CONTRACT.—The term ‘forward contract’ means— 

‘‘(I) a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, 


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122 STAT. 2754 PUBLIC LAW 110–289—JULY 30, 2008 

or interest which is presently or in the future 

becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with 

a maturity date more than 2 days after the date 

on which the contract is entered into, including 

a repurchase transaction, reverse repurchase 

transaction, consignment, lease, swap, hedge 

transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other 

similar agreement; 

‘‘(II) any combination of agreements or transactions referred to in subclauses (I) and (III); 

‘‘(III) any option to enter into any agreement 

or transaction referred to in subclause (I) or (II); 

‘‘(IV) a master agreement that provides for 

an agreement or transaction referred to in subclauses (I), (II), or (III), together with all supplements to any such master agreement, without 

regard to whether the master agreement provides 

for an agreement or transaction that is not a forward contract under this clause, except that the 

master agreement shall be considered to be a forward contract under this clause only with respect 

to each agreement or transaction under the master 

agreement that is referred to in subclause (I), (II), 

or (III); or 

‘‘(V) any security agreement or arrangement 

or other credit enhancement related to any agreement or transaction referred to in subclause (I), 

(II), (III), or (IV), including any guarantee or 

reimbursement obligation in connection with any 

agreement or transaction referred to in any such 

subclause. 

‘‘(v) REPURCHASE AGREEMENT.—The term 

‘repurchase agreement’ (including a reverse repurchase 

agreement)— 

‘‘(I) means an agreement, including related 

terms, which provides for the transfer of one or 

more certificates of deposit, mortgage-related securities (as such term is defined in section 3 of the 

Securities Exchange Act of 1934), mortgage loans, 

interests in mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified 

foreign government securities (defined for purposes 

of this clause as a security that is a direct obligation of, or that is fully guaranteed by, the central 

government of a member of the Organization for 

Economic Cooperation and Development, as determined by regulation or order adopted by the appropriate Federal banking authority), or securities 

that are direct obligations of, or that are fully 

guaranteed by, the United States or any agency 

of the United States against the transfer of funds 

by the transferee of such certificates of deposit, 

eligible bankers’ acceptances, securities, mortgage 

loans, or interests with a simultaneous agreement 

by such transferee to transfer to the transferor 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2755 

thereof certificates of deposit, eligible bankers’ 

acceptances, securities, mortgage loans, or 

interests as described above, at a date certain not 

later than 1 year after such transfers or on 

demand, against the transfer of funds, or any other 

similar agreement; 

‘‘(II) does not include any repurchase obligation under a participation in a commercial mortgage loan, unless the Agency determines by regulation, resolution, or order to include any such 

participation within the meaning of such term; 

‘‘(III) means any combination of agreements 

or transactions referred to in subclauses (I) and 

(IV); 

‘‘(IV) means any option to enter into any agreement or transaction referred to in subclause (I) 

or (III); 

‘‘(V) means a master agreement that provides 

for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without 

regard to whether the master agreement provides 

for an agreement or transaction that is not a 

repurchase agreement under this clause, except 

that the master agreement shall be considered 

to be a repurchase agreement under this subclause 

only with respect to each agreement or transaction 

under the master agreement that is referred to 

in subclause (I), (III), or (IV); and 

‘‘(VI) means any security agreement or 

arrangement or other credit enhancement related 

to any agreement or transaction referred to in 

subclause (I), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection 

with any agreement or transaction referred to in 

any such subclause. 

‘‘(vi) SWAP AGREEMENT.—The term ‘swap agreement’ means— 

‘‘(I) any agreement, including the terms and 

conditions incorporated by reference in any such 

agreement, which is an interest rate swap, option, 

future, or forward agreement, including a rate 

floor, rate cap, rate collar, cross-currency rate 

swap, and basis swap; a spot, same day-tomorrow, 

tomorrow-next, forward, or other foreign exchange 

or precious metals agreement; a currency swap, 

option, future, or forward agreement; an equity 

index or equity swap, option, future, or forward 

agreement; a debt index or debt swap, option, 

future, or forward agreement; a total return, credit 

spread or credit swap, option, future, or forward 

agreement; a commodity index or commodity swap, 

option, future, or forward agreement; or a weather 

swap, weather derivative, or weather option; 

‘‘(II) any agreement or transaction that is 

similar to any other agreement or transaction 

referred to in this clause and that is of a type 


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122 STAT. 2756 PUBLIC LAW 110–289—JULY 30, 2008 

that has been, is presently, or in the future 

becomes, the subject of recurrent dealings in the 

swap markets (including terms and conditions 

incorporated by reference in such agreement) and 

that is a forward, swap, future, or option on one 

or more rates, currencies, commodities, equity 

securities or other equity instruments, debt securities or other debt instruments, quantitative measures associated with an occurrence, extent of an 

occurrence, or contingency associated with a financial, commercial, or economic consequence, or economic or financial indices or measures of economic 

or financial risk or value; 

‘‘(III) any combination of agreements or transactions referred to in this clause; 

‘‘(IV) any option to enter into any agreement 

or transaction referred to in this clause; 

‘‘(V) a master agreement that provides for an 

agreement or transaction referred to in subclause 

(I), (II), (III), or (IV), together with all supplements 

to any such master agreement, without regard to 

whether the master agreement contains an agreement or transaction that is not a swap agreement 

under this clause, except that the master agreement shall be considered to be a swap agreement 

under this clause only with respect to each agreement or transaction under the master agreement 

that is referred to in subclause (I), (II), (III), or 

(IV); and 

‘‘(VI) any security agreement or arrangement 

or other credit enhancement related to any agreements or transactions referred to in subclause (I), 

(II), (III), (IV), or (V), including any guarantee 

or reimbursement obligation in connection with 

any agreement or transaction referred to in any 

such subclause. 

‘‘(vii) TREATMENT OF MASTER AGREEMENT AS ONE

AGREEMENT.—Any master agreement for any contract 

or agreement described in any preceding clause of this 

subparagraph (or any master agreement for such 

master agreement or agreements), together with all 

supplements to such master agreement, shall be 

treated as a single agreement and a single qualified 

financial contract. If a master agreement contains 

provisions relating to agreements or transactions that 

are not themselves qualified financial contracts, the 

master agreement shall be deemed to be a qualified 

financial contract only with respect to those transactions that are themselves qualified financial contracts. 

‘‘(viii) TRANSFER.—The term ‘transfer’ means every 

mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with 

property or with an interest in property, including 

retention of title as a security interest and foreclosure 

of the equity of redemption of the regulated entity. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2757 

‘‘(E) CERTAIN PROTECTIONS IN EVENT OF APPOINTMENT

OF CONSERVATOR.—Notwithstanding any other provision of 

this section, any other Federal law, or the law of any 

State (other than paragraph (10) of this subsection and 

subsection (b)(9)(B)), no person shall be stayed or prohibited 

from exercising— 

‘‘(i) any right such person has to cause the termination, liquidation, or acceleration of any qualified 

financial contract with a regulated entity in a conservatorship based upon a default under such financial 

contract which is enforceable under applicable noninsolvency law; 

‘‘(ii) any right under any security agreement or 

arrangement or other credit enhancement relating to 

1 or more such qualified financial contracts; or 

‘‘(iii) any right to offset or net out any termination 

values, payment amounts, or other transfer obligations 

arising under or in connection with such qualified 

financial contracts. 

‘‘(F) CLARIFICATION.—No provision of law shall be construed as limiting the right or power of the Agency, or 

authorizing any court or agency to limit or delay in any 

manner, the right or power of the Agency to transfer any 

qualified financial contract in accordance with paragraphs 

(9) and (10), or to disaffirm or repudiate any such contract 

in accordance with subsection (d)(1). 

‘‘(G) WALKAWAY CLAUSES NOT EFFECTIVE.— 

‘‘(i) IN GENERAL.—Notwithstanding the provisions 

of subparagraphs (A) and (E), and sections 403 and 

404 of the Federal Deposit Insurance Corporation 

Improvement Act of 1991, no walkaway clause shall 

be enforceable in a qualified financial contract of a 

regulated entity in default. 

‘‘(ii) WALKAWAY CLAUSE DEFINED.—For purposes 

of this subparagraph, the term ‘walkaway clause’ 

means a provision in a qualified financial contract 

that, after calculation of a value of a party’s position 

or an amount due to or from 1 of the parties in accordance with its terms upon termination, liquidation, or 

acceleration of the qualified financial contract, either 

does not create a payment obligation of a party or 

extinguishes a payment obligation of a party in whole 

or in part solely because of the status of such party 

as a nondefaulting party. 

‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS.—In 

making any transfer of assets or liabilities of a regulated entity 

in default which includes any qualified financial contract, the 

conservator or receiver for such regulated entity shall either— 

‘‘(A) transfer to 1 person— 

‘‘(i) all qualified financial contracts between any 

person (or any affiliate of such person) and the regulated entity in default; 

‘‘(ii) all claims of such person (or any affiliate of 

such person) against such regulated entity under any 

such contract (other than any claim which, under the 

terms of any such contract, is subordinated to the 


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claims of general unsecured creditors of such regulated 

entity); 

‘‘(iii) all claims of such regulated entity against 

such person (or any affiliate of such person) under 

any such contract; and 

‘‘(iv) all property securing, or any other credit 

enhancement for any contract described in clause (i), 

or any claim described in clause (ii) or (iii) under 

any such contract; or 

‘‘(B) transfer none of the financial contracts, claims, 

or property referred to under subparagraph (A) (with 

respect to such person and any affiliate of such person). 

‘‘(10) NOTIFICATION OF TRANSFER.— ‘‘(A) IN GENERAL.—The conservator or receiver shall 

notify any person that is a party to a contract or transfer 

by 5:00 p.m. (Eastern Standard Time) on the business 

day following the date of the appointment of the receiver 

in the case of a receivership, or the business day following 

such transfer in the case of a conservatorship, if— 

‘‘(i) the conservator or receiver for a regulated 

entity in default makes any transfer of the assets 

and liabilities of such regulated entity; and 

‘‘(ii) such transfer includes any qualified financial 

contract. 

‘‘(B) CERTAIN RIGHTS NOT ENFORCEABLE.— 

‘‘(i) RECEIVERSHIP.—A person who is a party to 

a qualified financial contract with a regulated entity 

may not exercise any right that such person has to 

terminate, liquidate, or net such contract under paragraph (8)(A) of this subsection or under section 403 

or 404 of the Federal Deposit Insurance Corporation 

Improvement Act of 1991, solely by reason of or incidental to the appointment of a receiver for the regulated entity (or the insolvency or financial condition 

of the regulated entity for which the receiver has been 

appointed)— 

‘‘(I) until 5:00 p.m. (Eastern Standard Time) 

on the business day following the date of the 

appointment of the receiver; or 

‘‘(II) after the person has received notice that 

the contract has been transferred pursuant to 

paragraph (9)(A). 

‘‘(ii) CONSERVATORSHIP.—A person who is a party 

to a qualified financial contract with a regulated entity 

may not exercise any right that such person has to 

terminate, liquidate, or net such contract under paragraph (8)(E) of this subsection or under section 403 

or 404 of the Federal Deposit Insurance Corporation 

Improvement Act of 1991, solely by reason of or incidental to the appointment of a conservator for the 

regulated entity (or the insolvency or financial condition of the regulated entity for which the conservator 

has been appointed). 

‘‘(iii) NOTICE.—For purposes of this paragraph, the 

conservator or receiver of a regulated entity shall be 

deemed to have notified a person who is a party to 

a qualified financial contract with such regulated 

Effective dates. 

Deadline. 

Contracts. 


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entity, if the conservator or receiver has taken steps 

reasonably calculated to provide notice to such person 

by the time specified in subparagraph (A). 

‘‘(C) BUSINESS DAY DEFINED.—For purposes of this 

paragraph, the term ‘business day’ means any day other 

than any Saturday, Sunday, or any day on which either 

the New York Stock Exchange or the Federal Reserve 

Bank of New York is closed. 

‘‘(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINAN- CIAL CONTRACTS.—In exercising the rights of disaffirmance or 

repudiation of a conservator or receiver with respect to any 

qualified financial contract to which a regulated entity is a 

party, the conservator or receiver for such institution shall 

either— 

‘‘(A) disaffirm or repudiate all qualified financial contracts between— 

‘‘(i) any person or any affiliate of such person; 

and 

‘‘(ii) the regulated entity in default; or 

‘‘(B) disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect 

to such person or any affiliate of such person). 

‘‘(12) CERTAIN SECURITY INTERESTS NOT AVOIDABLE.—No 

provision of this subsection shall be construed as permitting 

the avoidance of any legally enforceable or perfected security 

interest in any of the assets of any regulated entity, except 

where such an interest is taken in contemplation of the insolvency of the regulated entity, or with the intent to hinder, 

delay, or defraud the regulated entity or the creditors of such 

regulated entity. 

‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— 

‘‘(A) IN GENERAL.—Notwithstanding any provision of 

a contract providing for termination, default, acceleration, 

or exercise of rights upon, or solely by reason of, insolvency 

or the appointment of, or the exercise of rights or powers 

by, a conservator or receiver, the conservator or receiver 

may enforce any contract, other than a contract for liability 

insurance for a director or officer, or a contract or a regulated entity bond, entered into by the regulated entity. 

‘‘(B) CERTAIN RIGHTS NOT AFFECTED.—No provision of 

this paragraph may be construed as impairing or affecting 

any right of the conservator or receiver to enforce or recover 

under a liability insurance contract for an officer or 

director, or regulated entity bond under other applicable 

law. 

‘‘(C) CONSENT REQUIREMENT.— 

‘‘(i) IN GENERAL.—Except as otherwise provided 

under this section, no person may exercise any right 

or power to terminate, accelerate, or declare a default 

under any contract to which a regulated entity is a 

party, or to obtain possession of or exercise control 

over any property of the regulated entity, or affect 

any contractual rights of the regulated entity, without 

the consent of the conservator or receiver, as appropriate, for a period of— 

‘‘(I) 45 days after the date of appointment 

of a conservator; or 

Effective dates. 


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‘‘(II) 90 days after the date of appointment 

of a receiver. 

‘‘(ii) EXCEPTIONS.—This subparagraph shall not— 

‘‘(I) apply to a contract for liability insurance 

for an officer or director; 

‘‘(II) apply to the rights of parties to certain 

qualified financial contracts under subsection 

(d)(8); and 

‘‘(III) be construed as permitting the conservator or receiver to fail to comply with otherwise 

enforceable provisions of such contracts. 

‘‘(14) SAVINGS CLAUSE.—The meanings of terms used in 

this subsection are applicable for purposes of this subsection 

only, and shall not be construed or applied so as to challenge 

or affect the characterization, definition, or treatment of any 

similar terms under any other statute, regulation, or rule, 

including the Gramm-Leach-Bliley Act, the Legal Certainty 

for Bank Products Act of 2000, the securities laws (as that 

term is defined in section 3(a)(47) of the Securities Exchange 

Act of 1934), and the Commodity Exchange Act. 

‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND FEDERAL HOME

LOAN BANKS.—No provision of this subsection shall apply with 

respect to— 

‘‘(A) any extension of credit from any Federal Home 

Loan Bank or Federal Reserve Bank to any regulated 

entity; or 

‘‘(B) any security interest in the assets of the regulated 

entity securing any such extension of credit. 

‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— 

‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

Federal law or the law of any State, and regardless of the 

method which the Agency determines to utilize with respect 

to a regulated entity in default or in danger of default, including 

transactions authorized under subsection (i), this subsection 

shall govern the rights of the creditors of such regulated entity. 

‘‘(2) MAXIMUM LIABILITY.—The maximum liability of the 

Agency, acting as receiver or in any other capacity, to any 

person having a claim against the receiver or the regulated 

entity for which such receiver is appointed shall be not more 

than the amount that such claimant would have received if 

the Agency had liquidated the assets and liabilities of the 

regulated entity without exercising the authority of the Agency 

under subsection (i). 

‘‘(f) LIMITATION ON COURT ACTION.—Except as provided in this 

section or at the request of the Director, no court may take any 

action to restrain or affect the exercise of powers or functions 

of the Agency as a conservator or a receiver. 

‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.— 

‘‘(1) IN GENERAL.—A director or officer of a regulated entity 

may be held personally liable for monetary damages in any 

civil action described in paragraph (2) brought by, on behalf 

of, or at the request or direction of the Agency, and prosecuted 

wholly or partially for the benefit of the Agency— 

‘‘(A) acting as conservator or receiver of such regulated 

entity; or 


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‘‘(B) acting based upon a suit, claim, or cause of action 

purchased from, assigned by, or otherwise conveyed by 

such receiver or conservator. 

‘‘(2) ACTIONS ADDRESSED.—Paragraph (1) applies in any 

civil action for gross negligence, including any similar conduct 

or conduct that demonstrates a greater disregard of a duty 

of care than gross negligence, including intentional tortious 

conduct, as such terms are defined and determined under 

applicable State law. 

‘‘(3) NO LIMITATION.—Nothing in this subsection shall 

impair or affect any right of the Agency under other applicable 

law. 

‘‘(h) DAMAGES.—In any proceeding related to any claim against 

a director, officer, employee, agent, attorney, accountant, appraiser, 

or any other party employed by or providing services to a regulated 

entity, recoverable damages determined to result from the improvident or otherwise improper use or investment of any assets of 

the regulated entity shall include principal losses and appropriate 

interest. 

‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— 

‘‘(1) ORGANIZATION.— 

‘‘(A) PURPOSE.—The Agency, as receiver appointed 

pursuant to subsection (a)— 

‘‘(i) may, in the case of a Federal Home Loan 

Bank, organize a limited-life regulated entity with 

those powers and attributes of the Federal Home Loan 

Bank in default or in danger of default as the Director 

determines necessary, subject to the provisions of this 

subsection, and the Director shall grant a temporary 

charter to that limited-life regulated entity, and that 

limited-life regulated entity may operate subject to 

that charter; and 

‘‘(ii) shall, in the case of an enterprise, organize 

a limited-life regulated entity with respect to that 

enterprise in accordance with this subsection. 

‘‘(B) AUTHORITIES.—Upon the creation of a limitedlife regulated entity under subparagraph (A), the limitedlife regulated entity may— 

‘‘(i) assume such liabilities of the regulated entity 

that is in default or in danger of default as the Agency 

may, in its discretion, determine to be appropriate, 

except that the liabilities assumed shall not exceed 

the amount of assets purchased or transferred from 

the regulated entity to the limited-life regulated entity; 

‘‘(ii) purchase such assets of the regulated entity 

that is in default, or in danger of default as the Agency 

may, in its discretion, determine to be appropriate; 

and 

‘‘(iii) perform any other temporary function which 

the Agency may, in its discretion, prescribe in accordance with this section. 

‘‘(2) CHARTER AND ESTABLISHMENT.— 

‘‘(A) TRANSFER OF CHARTER.— 

‘‘(i) FANNIE MAE.—If the Agency is appointed as 

receiver for the Federal National Mortgage Association, 

the limited-life regulated entity established under this 

subsection with respect to such enterprise shall, by 

Applicability. 


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operation of law and immediately upon its organization— 

‘‘(I) succeed to the charter of the Federal 

National Mortgage Association, as set forth in the 

Federal National Mortgage Association Charter 

Act; and 

‘‘(II) thereafter operate in accordance with, and 

subject to, such charter, this Act, and any other 

provision of law to which the Federal National 

Mortgage Association is subject, except as otherwise provided in this subsection. 

‘‘(ii) FREDDIE MAC.—If the Agency is appointed as 

receiver for the Federal Home Loan Mortgage Corporation, the limited-life regulated entity established under 

this subsection with respect to such enterprise shall, 

by operation of law and immediately upon its organization— 

‘‘(I) succeed to the charter of the Federal Home 

Loan Mortgage Corporation, as set forth in the 

Federal Home Loan Mortgage Corporation Charter 

Act; and 

‘‘(II) thereafter operate in accordance with, and 

subject to, such charter, this Act, and any other 

provision of law to which the Federal Home Loan 

Mortgage Corporation is subject, except as otherwise provided in this subsection. 

‘‘(B) INTERESTS IN AND ASSETS AND OBLIGATIONS OF

REGULATED ENTITY IN DEFAULT.—Notwithstanding subparagraph (A) or any other provision of law— 

‘‘(i) a limited-life regulated entity shall assume, 

acquire, or succeed to the assets or liabilities of a 

regulated entity only to the extent that such assets 

or liabilities are transferred by the Agency to the limited-life regulated entity in accordance with, and subject to the restrictions set forth in, paragraph (1)(B); 

‘‘(ii) a limited-life regulated entity shall not 

assume, acquire, or succeed to any obligation that a 

regulated entity for which a receiver has been 

appointed may have to any shareholder of the regulated entity that arises as a result of the status of 

that person as a shareholder of the regulated entity; 

and 

‘‘(iii) no shareholder or creditor of a regulated 

entity shall have any right or claim against the charter 

of the regulated entity once the Agency has been 

appointed receiver for the regulated entity and a limited-life regulated entity succeeds to the charter pursuant to subparagraph (A). 

‘‘(C) LIMITED-LIFE REGULATED ENTITY TREATED AS

BEING IN DEFAULT FOR CERTAIN PURPOSES.—A limited-life 

regulated entity shall be treated as a regulated entity 

in default at such times and for such purposes as the 

Agency may, in its discretion, determine. 

‘‘(D) MANAGEMENT.—Upon its establishment, a limitedlife regulated entity shall be under the management of 

a board of directors consisting of not fewer than 5 nor 

more than 10 members appointed by the Agency. 


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‘‘(E) BYLAWS.—The board of directors of a limited-life 

regulated entity shall adopt such bylaws as may be 

approved by the Agency. 

‘‘(3) CAPITAL STOCK.— ‘‘(A) NO AGENCY REQUIREMENT.—The Agency is not 

required to pay capital stock into a limited-life regulated entity or to issue any capital stock on behalf 

of a limited-life regulated entity established under this 

subsection. 

‘‘(B) AUTHORITY.—If the Director determines that 

such action is advisable, the Agency may cause capital 

stock or other securities of a limited-life regulated 

entity established with respect to an enterprise to be 

issued and offered for sale, in such amounts and on 

such terms and conditions as the Director may determine, in the discretion of the Director. 

‘‘(4) INVESTMENTS.—Funds of a limited-life regulated entity 

shall be kept on hand in cash, invested in obligations of the 

United States or obligations guaranteed as to principal and 

interest by the United States, or deposited with the Agency, 

or any Federal reserve bank. 

‘‘(5) EXEMPT TAX STATUS.—Notwithstanding any other 

provision of Federal or State law, a limited-life regulated entity, 

its franchise, property, and income shall be exempt from all 

taxation now or hereafter imposed by the United States, by 

any territory, dependency, or possession thereof, or by any 

State, county, municipality, or local taxing authority. 

‘‘(6) WINDING UP.— 

‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and 

(C), not later than 2 years after the date of its organization, 

the Agency shall wind up the affairs of a limited-life regulated entity. 

‘‘(B) EXTENSION.—The Director may, in the discretion 

of the Director, extend the status of a limited-life regulated 

entity for 3 additional 1-year periods. 

‘‘(C) TERMINATION OF STATUS AS LIMITED-LIFE REGULATED ENTITY.— 

‘‘(i) IN GENERAL.—Upon the sale by the Agency 

of 80 percent or more of the capital stock of a limitedlife regulated entity, as defined in clause (iv), to 1 

or more persons (other than the Agency)— 

‘‘(I) the status of the limited-life regulated 

entity as such shall terminate; and 

‘‘(II) the entity shall cease to be a limitedlife regulated entity for purposes of this subsection. 

‘‘(ii) DIVESTITURE OF REMAINING STOCK, IF ANY.— 

‘‘(I) IN GENERAL.—Not later than 1 year after 

the date on which the status of a limited-life regulated entity is terminated pursuant to clause (i), 

the Agency shall sell to 1 or more persons (other 

than the Agency) any remaining capital stock of 

the former limited-life regulated entity. 

‘‘(II) EXTENSION AUTHORIZED.—The Director 

may extend the period referred to in subclause 

(I) for not longer than an additional 2 years, if 

the Director determines that such action would 

be in the public interest. 

Deadline. 

Deadline. 


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‘‘(iii) SAVINGS CLAUSE.—Notwithstanding any 

provision of law, other than clause (ii), the Agency 

shall not be required to sell the capital stock of an 

enterprise or a limited-life regulated entity established 

with respect to an enterprise. 

‘‘(iv) APPLICABILITY.—This subparagraph applies 

only with respect to a limited-life regulated entity that 

is established with respect to an enterprise. 

‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.— 

‘‘(A) IN GENERAL.— 

‘‘(i) TRANSFER OF ASSETS AND LIABILITIES.—The 

Agency, as receiver, may transfer any assets and liabilities of a regulated entity in default, or in danger 

of default, to the limited-life regulated entity in accordance with and subject to the restrictions of paragraph 

(1). 

‘‘(ii) SUBSEQUENT TRANSFERS.—At any time after 

the establishment of a limited-life regulated entity, 

the Agency, as receiver, may transfer any assets and 

liabilities of the regulated entity in default, or in 

danger of default, as the Agency may, in its discretion, 

determine to be appropriate in accordance with and 

subject to the restrictions of paragraph (1). 

‘‘(iii) EFFECTIVE WITHOUT APPROVAL.—The transfer 

of any assets or liabilities of a regulated entity in 

default or in danger of default to a limited-life regulated entity shall be effective without any further 

approval under Federal or State law, assignment, or 

consent with respect thereto. 

‘‘(iv) EQUITABLE TREATMENT OF SIMILARLY SITUATED CREDITORS.—The Agency shall treat all creditors 

of a regulated entity in default or in danger of default 

that are similarly situated under subsection (c)(1) in 

a similar manner in exercising the authority of the 

Agency under this subsection to transfer any assets 

or liabilities of the regulated entity to the limitedlife regulated entity established with respect to such 

regulated entity, except that the Agency may take 

actions (including making payments) that do not 

comply with this clause, if— 

‘‘(I) the Director determines that such actions 

are necessary to maximize the value of the assets 

of the regulated entity, to maximize the present 

value return from the sale or other disposition 

of the assets of the regulated entity, or to minimize 

the amount of any loss realized upon the sale 

or other disposition of the assets of the regulated 

entity; and 

‘‘(II) all creditors that are similarly situated 

under subsection (c)(1) receive not less than the 

amount provided in subsection (e)(2). 

‘‘(v) LIMITATION ON TRANSFER OF LIABILITIES.—Notwithstanding any other provision of law, the aggregate 

amount of liabilities of a regulated entity that are 

transferred to, or assumed by, a limited-life regulated 

entity may not exceed the aggregate amount of assets 


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of the regulated entity that are transferred to, or purchased by, the limited-life regulated entity. 

‘‘(8) REGULATIONS.—The Agency may promulgate such 

regulations as the Agency determines to be necessary or appropriate to implement this subsection. 

‘‘(9) POWERS OF LIMITED-LIFE REGULATED ENTITIES.— 

‘‘(A) IN GENERAL.—Each limited-life regulated entity 

created under this subsection shall have all corporate 

powers of, and be subject to the same provisions of law 

as, the regulated entity in default or in danger of default 

to which it relates, except that— 

‘‘(i) the Agency may— 

‘‘(I) remove the directors of a limited-life regulated entity; 

‘‘(II) fix the compensation of members of the 

board of directors and senior management, as 

determined by the Agency in its discretion, of a 

limited-life regulated entity; and 

‘‘(III) indemnify the representatives for purposes of paragraph (1)(B), and the directors, officers, employees, and agents of a limited-life regulated entity on such terms as the Agency determines to be appropriate; and 

‘‘(ii) the board of directors of a limited-life regulated entity— 

‘‘(I) shall elect a chairperson who may also 

serve in the position of chief executive officer, 

except that such person shall not serve either as 

chairperson or as chief executive officer without 

the prior approval of the Agency; and 

‘‘(II) may appoint a chief executive officer who 

is not also the chairperson, except that such person 

shall not serve as chief executive officer without 

the prior approval of the Agency. 

‘‘(B) STAY OF JUDICIAL ACTION.—Any judicial action 

to which a limited-life regulated entity becomes a party 

by virtue of its acquisition of any assets or assumption 

of any liabilities of a regulated entity in default shall 

be stayed from further proceedings for a period of not 

longer than 45 days, at the request of the limited-life 

regulated entity. Such period may be modified upon the 

consent of all parties. 

‘‘(10) NO FEDERAL STATUS.— 

‘‘(A) AGENCY STATUS.—A limited-life regulated entity 

is not an agency, establishment, or instrumentality of the 

United States. 

‘‘(B) EMPLOYEE STATUS.—Representatives for purposes 

of paragraph (1)(B), interim directors, directors, officers, 

employees, or agents of a limited-life regulated entity are 

not, solely by virtue of service in any such capacity, officers 

or employees of the United States. Any employee of the 

Agency or of any Federal instrumentality who serves at 

the request of the Agency as a representative for purposes 

of paragraph (1)(B), interim director, director, officer, 

employee, or agent of a limited-life regulated entity shall 

not— 


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122 STAT. 2766 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(i) solely by virtue of service in any such capacity 

lose any existing status as an officer or employee of 

the United States for purposes of title 5, United States 

Code, or any other provision of law; or 

‘‘(ii) receive any salary or benefits for service in 

any such capacity with respect to a limited-life regulated entity in addition to such salary or benefits as 

are obtained through employment with the Agency 

or such Federal instrumentality. 

‘‘(11) AUTHORITY TO OBTAIN CREDIT.— 

‘‘(A) IN GENERAL.—A limited-life regulated entity may 

obtain unsecured credit and issue unsecured debt. 

‘‘(B) INABILITY TO OBTAIN CREDIT.—If a limited-life 

regulated entity is unable to obtain unsecured credit or 

issue unsecured debt, the Director may authorize the 

obtaining of credit or the issuance of debt by the limitedlife regulated entity— 

‘‘(i) with priority over any or all of the obligations 

of the limited-life regulated entity; 

‘‘(ii) secured by a lien on property of the limitedlife regulated entity that is not otherwise subject to 

a lien; or 

‘‘(iii) secured by a junior lien on property of the 

limited-life regulated entity that is subject to a lien. 

‘‘(C) LIMITATIONS.— 

‘‘(i) IN GENERAL.—The Director, after notice and 

a hearing, may authorize the obtaining of credit or 

the issuance of debt by a limited-life regulated entity 

that is secured by a senior or equal lien on property 

of the limited-life regulated entity that is subject to 

a lien (other than mortgages that collateralize the 

mortgage-backed securities issued or guaranteed by 

an enterprise) only if— 

‘‘(I) the limited-life regulated entity is unable 

to otherwise obtain such credit or issue such debt; 

and 

‘‘(II) there is adequate protection of the 

interest of the holder of the lien on the property 

with respect to which such senior or equal lien 

is proposed to be granted. 

‘‘(D) BURDEN OF PROOF.—In any hearing under this 

subsection, the Director has the burden of proof on the 

issue of adequate protection. 

‘‘(12) EFFECT ON DEBTS AND LIENS.—The reversal or modification on appeal of an authorization under this subsection 

to obtain credit or issue debt, or of a grant under this section 

of a priority or a lien, does not affect the validity of any 

debt so issued, or any priority or lien so granted, to an entity 

that extended such credit in good faith, whether or not such 

entity knew of the pendency of the appeal, unless such 

authorization and the issuance of such debt, or the granting 

of such priority or lien, were stayed pending appeal. 

‘‘(j) OTHER AGENCY EXEMPTIONS.— 

‘‘(1) APPLICABILITY.—The provisions of this subsection shall 

apply with respect to the Agency in any case in which the 

Agency is acting as a conservator or a receiver. 


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‘‘(2) TAXATION.—The Agency, including its franchise, its 

capital, reserves, and surplus, and its income, shall be exempt 

from all taxation imposed by any State, county, municipality, 

or local taxing authority, except that any real property of the 

Agency shall be subject to State, territorial, county, municipal, 

or local taxation to the same extent according to its value 

as other real property is taxed, except that, notwithstanding 

the failure of any person to challenge an assessment under 

State law of the value of such property, and the tax thereon, 

shall be determined as of the period for which such tax is 

imposed. 

‘‘(3) PROPERTY PROTECTION.—No property of the Agency 

shall be subject to levy, attachment, garnishment, foreclosure, 

or sale without the consent of the Agency, nor shall any involuntary lien attach to the property of the Agency. 

‘‘(4) PENALTIES AND FINES.—The Agency shall not be liable 

for any amounts in the nature of penalties or fines, including 

those arising from the failure of any person to pay any real 

property, personal property, probate, or recording tax or any 

recording or filing fees when due. 

‘‘(k) PROHIBITION OF CHARTER REVOCATION.—In no case may 

the receiver appointed pursuant to this section revoke, annul, or 

terminate the charter of an enterprise.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.—The Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 

(12 U.S.C. 4501 et seq.) is amended— 

(1) in section 1368 (12 U.S.C. 4618)— 

(A) by striking ‘‘an enterprise’’ each place that term 

appears and inserting ‘‘a regulated entity’’; and 

(B) by striking ‘‘the enterprise’’ each place that term 

appears and inserting ‘‘the regulated entity’’; 

(2) in section 1369C (12 U.S.C. 4622), by striking ‘‘enterprise’’ each place that term appears and inserting ‘‘regulated 

entity’’; 

(3) in section 1369D (12 U.S.C. 4623)— 

(A) by striking ‘‘an enterprise’’ each place that term 

appears and inserting ‘‘a regulated entity’’; and 

(B) in subsection (a)(1), by striking ‘‘An enterprise’’ 

and inserting ‘‘A regulated entity’’; and 

(4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 

4619, 4620, and 4621). 

Subtitle D—Enforcement Actions 

SEC. 1151. CEASE AND DESIST PROCEEDINGS. 

Section 1371 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4631) is amended— 

(1) by striking subsections (a) and (b) and inserting the 

following: 

‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRACTICES AND VIOLA- TIONS.— 

‘‘(1) AUTHORITY OF DIRECTOR.—If, in the opinion of the 

Director, a regulated entity or any entity-affiliated party is 

engaging or has engaged, or the Director has reasonable cause 

to believe that the regulated entity or any entity-affiliated 

party is about to engage, in an unsafe or unsound practice 


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122 STAT. 2768 PUBLIC LAW 110–289—JULY 30, 2008 

in conducting the business of the regulated entity or the Office 

of Finance, or is violating or has violated, or the Director 

has reasonable cause to believe is about to violate, a law, 

rule, regulation, or order, or any condition imposed in writing 

by the Director in connection with the granting of any application or other request by the regulated entity or the Office 

of Finance or any written agreement entered into with the 

Director, the Director may issue and serve upon the regulated 

entity or entity-affiliated party a notice of charges in respect 

thereof. 

‘‘(2) LIMITATION.—The Director may not, pursuant to this 

section, enforce compliance with any housing goal established 

under subpart B of part 2 of subtitle A of this title, with 

section 1336 or 1337 of this title, with subsection (m) or (n) 

of section 309 of the Federal National Mortgage Association 

Charter Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or 

(f) of section 307 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with paragraph (5) of section 

10(j) of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)). 

‘‘(b) ISSUANCE FOR UNSATISFACTORY RATING.—If a regulated 

entity receives, in its most recent report of examination, a lessthan-satisfactory rating for asset quality, management, earnings, 

or liquidity, the Director may (if the deficiency is not corrected) 

deem the regulated entity to be engaging in an unsafe or unsound 

practice for purposes of subsection (a).’’; 

(2) in subsection (c)— 

(A) in paragraph (1), by inserting before the period 

at the end the following: ‘‘, unless the party served with 

a notice of charges shall appear at the hearing personally 

or by a duly authorized representative, the party shall 

be deemed to have consented to the issuance of the cease 

and desist order’’; and 

(B) in paragraph (2)— 

(i) by striking ‘‘or director’’ and inserting ‘‘director, 

or entity-affiliated party’’; and 

(ii) by inserting ‘‘or entity-affiliated party’’ before 

‘‘consents’’; 

(3) in each of subsections (c), (d), and (e)— 

(A) by striking ‘‘the enterprise’’ each place that term 

appears and inserting ‘‘the regulated entity’’; 

(B) by striking ‘‘an enterprise’’ each place that term 

appears and inserting ‘‘a regulated entity’’; and 

(C) by striking ‘‘conduct’’ each place that term appears 

and inserting ‘‘practice’’; 

(4) in subsection (d)— 

(A) in the matter preceding paragraph (1)— 

(i) by striking ‘‘or director’’ and inserting ‘‘director, 

or entity-affiliated party’’; and 

(ii) by inserting ‘‘to require a regulated entity or 

entity-affiliated party’’ after ‘‘includes the authority’’; 

(B) in paragraph (1)— 

(i) by striking ‘‘to require an executive officer or 

a director to’’; and 

(ii) by striking ‘‘loss’’ and all that follows through 

‘‘person’’ and inserting ‘‘loss, if’’; 

(iii) in subparagraph (A), by inserting ‘‘such entity 

or party or finance facility’’ before ‘‘was’’; and 


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(iv) by striking subparagraph (B) and inserting 

the following: 

‘‘(B) the violation or practice involved a reckless disregard for the law or any applicable regulations or prior 

order of the Director;’’; and 

(C) in paragraph (4), by inserting ‘‘loan or’’ before 

‘‘asset’’; 

(5) in subsection (e), by inserting ‘‘or entity-affiliated 

party’’— 

(A) before ‘‘or any executive’’; and 

(B) before the period at the end; and 

(6) in subsection (f)— 

(A) by striking ‘‘enterprise’’ and inserting ‘‘regulated 

entity, finance facility,’’; and 

(B) by striking ‘‘or director’’ and inserting ‘‘director, 

or entity-affiliated party’’. 

SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS. 

Section 1372 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4632) is amended— 

(1) by striking subsection (a) and inserting the following: 

‘‘(a) GROUNDS FOR ISSUANCE.— 

‘‘(1) IN GENERAL.—If the Director determines that the 

actions specified in the notice of charges served upon a regulated entity or any entity-affiliated party pursuant to section 

1371(a), or the continuation thereof, is likely to cause insolvency 

or significant dissipation of assets or earnings of that entity, 

or is likely to weaken the condition of that entity prior to 

the completion of the proceedings conducted pursuant to sections 1371 and 1373, the Director may— 

‘‘(A) issue a temporary order requiring that regulated 

entity or entity-affiliated party to cease and desist from 

any such violation or practice; and 

‘‘(B) require that regulated entity or entity-affiliated 

party to take affirmative action to prevent or remedy such 

insolvency, dissipation, condition, or prejudice pending 

completion of such proceedings. 

‘‘(2) ADDITIONAL REQUIREMENTS.—An order issued under 

paragraph (1) may include any requirement authorized under 

subsection 1371(d).’’; 

(2) in subsection (b)— 

(A) by striking ‘‘or director’’ and inserting ‘‘director, 

or entity-affiliated party’’; and 

(B) by striking ‘‘enterprise’’ each place that term 

appears and inserting ‘‘regulated entity’’; 

(3) in subsection (c), by striking ‘‘enterprise’’ each place 

that term appears and inserting ‘‘regulated entity’’; 

(4) in subsection (d)— 

(A) by striking ‘‘or director’’ each place that term 

appears and inserting ‘‘director, or entity-affiliated party’’; 

and 

(B) by striking ‘‘An enterprise’’ and inserting ‘‘A regulated entity’’; and 

(5) in subsection (e)— 

(A) by striking ‘‘request the Attorney General of the 

United States to’’; and 


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(B) by striking ‘‘or may, under the direction and control 

of the Attorney General, bring such action’’. 

SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY. 

(a) IN GENERAL.—Part 1 of subtitle C of the Federal Housing 

Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 

4631 et seq.) is amended— 

(1) by redesignating sections 1377 through 1379B (12 

U.S.C. 4637–4641) as sections 1379 through 1379D, respectively; and 

(2) by inserting after section 1376 (12 U.S.C. 4636) the 

following: 

‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 

‘‘(a) AUTHORITY TO ISSUE ORDER.— ‘‘(1) IN GENERAL.—The Director may serve upon a party 

described in paragraph (2), or any officer, director, or management of the Office of Finance a written notice of the intention 

of the Director to suspend or remove such party from office, 

or prohibit any further participation by such party, in any 

manner, in the conduct of the affairs of the regulated entity. 

‘‘(2) APPLICABILITY.—A party described in this paragraph 

is an entity-affiliated party or any officer, director, or management of the Office of Finance, if the Director determines that— 

‘‘(A) that party, officer, or director has, directly or 

indirectly— 

‘‘(i) violated— 

‘‘(I) any law or regulation; 

‘‘(II) any cease and desist order which has 

become final; 

‘‘(III) any condition imposed in writing by the 

Director in connection with the grant of any 

application or other request by such regulated 

entity; or 

‘‘(IV) any written agreement between such 

regulated entity and the Director; 

‘‘(ii) engaged or participated in any unsafe or 

unsound practice in connection with any regulated 

entity or business institution; or 

‘‘(iii) committed or engaged in any act, omission, 

or practice which constitutes a breach of such party’s 

fiduciary duty; 

‘‘(B) by reason of the violation, practice, or breach 

described in subparagraph (A)— 

‘‘(i) such regulated entity or business institution 

has suffered or will probably suffer financial loss or 

other damage; or 

‘‘(ii) such party has received financial gain or other 

benefit; and 

‘‘(C) the violation, practice, or breach described in 

subparagraph (A)— 

‘‘(i) involves personal dishonesty on the part of 

such party; or 

‘‘(ii) demonstrates willful or continuing disregard 

by such party for the safety or soundness of such 

regulated entity or business institution. 

‘‘(b) SUSPENSION ORDER.— 

12 USC 4636a. 


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‘‘(1) SUSPENSION OR PROHIBITION AUTHORITY.—If the 

Director serves written notice under subsection (a) upon a 

party subject to that subsection (a), the Director may, by order, 

suspend or remove such party from office, or prohibit such 

party from further participation in any manner in the conduct 

of the affairs of the regulated entity, if the Director— 

‘‘(A) determines that such action is necessary for the 

protection of the regulated entity; and 

‘‘(B) serves such party with written notice of the order. 

‘‘(2) EFFECTIVE PERIOD.—Any order issued under this subsection— 

‘‘(A) shall become effective upon service; and 

‘‘(B) unless a court issues a stay of such order under 

subsection (g), shall remain in effect and enforceable until— 

‘‘(i) the date on which the Director dismisses the 

charges contained in the notice served under subsection 

(a) with respect to such party; or 

‘‘(ii) the effective date of an order issued under 

subsection (b). 

‘‘(3) COPY OF ORDER.—If the Director issues an order under 

subsection (b) to any party, the Director shall serve a copy 

of such order on any regulated entity with which such party 

is affiliated at the time such order is issued. 

‘‘(c) NOTICE, HEARING, AND ORDER.— 

‘‘(1) NOTICE.—A notice under subsection (a) of the intention 

of the Director to issue an order under this section shall contain 

a statement of the facts constituting grounds for such action, 

and shall fix a time and place at which a hearing will be 

held on such action. 

‘‘(2) TIMING OF HEARING.—A hearing shall be fixed for 

a date not earlier than 30 days, nor later than 60 days, after 

the date of service of notice under subsection (a), unless an 

earlier or a later date is set by the Director at the request 

of— 

‘‘(A) the party receiving such notice, and good cause 

is shown; or 

‘‘(B) the Attorney General of the United States. 

‘‘(3) CONSENT.—Unless the party that is the subject of 

a notice delivered under subsection (a) appears at the hearing 

in person or by a duly authorized representative, such party 

shall be deemed to have consented to the issuance of an order 

under this section. 

‘‘(4) ISSUANCE OF ORDER OF SUSPENSION.—The Director may 

issue an order under this section, as the Director may deem 

appropriate, if— 

‘‘(A) a party is deemed to have consented to the 

issuance of an order under paragraph (3); or 

‘‘(B) upon the record made at the hearing, the Director 

finds that any of the grounds specified in the notice have 

been established. 

‘‘(5) EFFECTIVENESS OF ORDER.—Any order issued under 

paragraph (4) shall become effective at the expiration of 30 

days after the date of service upon the relevant regulated 

entity and party (except in the case of an order issued upon 

consent under paragraph (3), which shall become effective at 

the time specified therein). Such order shall remain effective 

and enforceable except to such extent as it is stayed, modified, 


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terminated, or set aside by action of the Director or a reviewing 

court. 

‘‘(d) PROHIBITION OF CERTAIN SPECIFIC ACTIVITIES.—Any person 

subject to an order issued under this section shall not— 

‘‘(1) participate in any manner in the conduct of the affairs 

of any regulated entity or the Office of Finance; 

‘‘(2) solicit, procure, transfer, attempt to transfer, vote, 

or attempt to vote any proxy, consent, or authorization with 

respect to any voting rights in any regulated entity; 

‘‘(3) violate any voting agreement previously approved by 

the Director; or 

‘‘(4) vote for a director, or serve or act as an entity-affiliated 

party of a regulated entity or as an officer or director of the 

Office of Finance. 

‘‘(e) INDUSTRY-WIDE PROHIBITION.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 

any person who, pursuant to an order issued under this section, 

has been removed or suspended from office in a regulated 

entity or the Office of Finance, or prohibited from participating 

in the conduct of the affairs of a regulated entity or the Office 

of Finance, may not, while such order is in effect, continue 

or commence to hold any office in, or participate in any manner 

in the conduct of the affairs of, any regulated entity or the 

Office of Finance. 

‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRITTEN CONSENT.— 

If, on or after the date on which an order is issued under 

this section which removes or suspends from office any party, 

or prohibits such party from participating in the conduct of 

the affairs of a regulated entity or the Office of Finance, such 

party receives the written consent of the Director, the order 

shall, to the extent of such consent, cease to apply to such 

party with respect to the regulated entity or such Office of 

Finance described in the written consent. Any such consent 

shall be publicly disclosed. 

‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED AS VIOLATION

OF ORDER.—Any violation of paragraph (1) by any person who 

is subject to an order issued under subsection (h) shall be 

treated as a violation of the order. 

‘‘(f) APPLICABILITY.—This section shall only apply to a person 

who is an individual, unless the Director specifically finds that 

it should apply to a corporation, firm, or other business entity. 

‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF ENTITY-AFFILIATED PARTY.—Not later than 10 days after the date on which 

any entity-affiliated party has been suspended from office or prohibited from participation in the conduct of the affairs of a regulated 

entity under this section, such party may apply to the United 

States District Court for the District of Columbia, or the United 

States district court for the judicial district in which the headquarters of the regulated entity is located, for a stay of such suspension or prohibition pending the completion of the administrative 

proceedings pursuant to subsection (c). The court shall have jurisdiction to stay such suspension or prohibition. 

‘‘(h) SUSPENSION OR REMOVAL OF ENTITY-AFFILIATED PARTY

CHARGED WITH FELONY.— 

‘‘(1) SUSPENSION OR PROHIBITION.— ‘‘(A) IN GENERAL.—Whenever any entity-affiliated party 

is charged in any information, indictment, or complaint, 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2773 

with the commission of or participation in a crime involving 

dishonesty or breach of trust which is punishable by imprisonment for a term exceeding 1 year under Federal or 

State law, the Director may, if continued service or participation by such party may pose a threat to the regulated 

entity or impair public confidence in the regulated entity, 

by written notice served upon such party, suspend such 

party from office or prohibit such party from further participation in any manner in the conduct of the affairs of 

any regulated entity. 

‘‘(B) PROVISIONS APPLICABLE TO NOTICE.— ‘‘(i) COPY.—A copy of any notice under subparagraph (A) shall be served upon the relevant regulated 

entity. 

‘‘(ii) EFFECTIVE PERIOD.—A suspension or prohibition under subparagraph (A) shall remain in effect 

until the information, indictment, or complaint referred 

to in subparagraph (A) is finally disposed of, or until 

terminated by the Director. 

‘‘(2) REMOVAL OR PROHIBITION.— 

‘‘(A) IN GENERAL.—If a judgment of conviction or an 

agreement to enter a pretrial diversion or other similar 

program is entered against an entity-affiliated party in 

connection with a crime described in paragraph (1)(A), 

at such time as such judgment is not subject to further 

appellate review, the Director may, if continued service 

or participation by such party may pose a threat to the 

regulated entity or impair public confidence in the regulated entity, issue and serve upon such party an order 

removing such party from office or prohibiting such party 

from further participation in any manner in the conduct 

of the affairs of the regulated entity without the prior 

written consent of the Director. 

‘‘(B) PROVISIONS APPLICABLE TO ORDER.— 

‘‘(i) COPY.—A copy of any order under subparagraph (A) shall be served upon the relevant regulated 

entity, at which time the entity-affiliated party who 

is subject to the order (if a director or an officer) 

shall cease to be a director or officer of such regulated 

entity. 

‘‘(ii) EFFECT OF ACQUITTAL.—A finding of not guilty 

or other disposition of the charge shall not preclude 

the Director from instituting proceedings after such 

finding or disposition to remove a party from office 

or to prohibit further participation in the affairs of 

a regulated entity pursuant to subsection (a) or (b). 

‘‘(iii) EFFECTIVE PERIOD.—Unless terminated by 

the Director, any notice of suspension or order of 

removal issued under this subsection shall remain 

effective and outstanding until the completion of any 

hearing or appeal authorized under paragraph (4). 

‘‘(3) AUTHORITY OF REMAINING BOARD MEMBERS.— 

‘‘(A) IN GENERAL.—If at any time, because of the 

suspension of 1 or more directors pursuant to this section, 

there shall be on the board of directors of a regulated 

entity less than a quorum of directors not so suspended, 

all powers and functions vested in or exercisable by such 


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board shall vest in and be exercisable by the director or 

directors on the board not so suspended, until such time 

as there shall be a quorum of the board of directors. 

‘‘(B) APPOINTMENT OF TEMPORARY DIRECTORS.—If all 

of the directors of a regulated entity are suspended pursuant to this section, the Director shall appoint persons to 

serve temporarily as directors pending the termination of 

such suspensions, or until such time as those who have 

been suspended cease to be directors of the regulated entity 

and their respective successors take office. 

‘‘(4) HEARING REGARDING CONTINUED PARTICIPATION.— 

‘‘(A) IN GENERAL.—Not later than 30 days after the 

date of service of any notice of suspension or order of 

removal issued pursuant to paragraph (1) or (2), the entityaffiliated party may request in writing an opportunity to 

appear before the Director to show that the continued 

service or participation in the conduct of the affairs of 

the regulated entity by such party does not, or is not 

likely to, pose a threat to the interests of the regulated 

entity, or threaten to impair public confidence in the regulated entity. 

‘‘(B) TIMING AND FORM OF HEARING.—Upon receipt of 

a request for a hearing under subparagraph (A), the 

Director shall fix a time (not later than 30 days after 

the date of receipt of such request, unless extended at 

the request of such party) and place at which the entityaffiliated party may appear, personally or through counsel, 

before the Director or 1 or more designated employees 

of the Director to submit written materials (or, at the 

discretion of the Director, oral testimony) and oral argument. 

‘‘(C) DETERMINATION.—Not later than 60 days after 

the date of a hearing under subparagraph (B), the Director 

shall notify the entity-affiliated party whether the suspension or prohibition from participation in any manner in 

the conduct of the affairs of the regulated entity will be 

continued, terminated, or otherwise modified, or whether 

the order removing such party from office or prohibiting 

such party from further participation in any manner in 

the conduct of the affairs of the regulated entity will be 

rescinded or otherwise modified. Such notification shall 

contain a statement of the basis for any adverse decision 

of the Director. 

‘‘(5) RULES.—The Director is authorized to prescribe such 

rules as may be necessary to carry out this subsection.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) SAFETY AND SOUNDNESS ACT.—Subtitle C of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 

1992 (12 U.S.C. 4501 et seq.) is amended— 

(A) in section 1317(f), by striking ‘‘section 1379B’’ and 

inserting ‘‘section 1379D’’; 

(B) in section 1373(a)— 

(i) in paragraph (1), by striking ‘‘or 1376(c)’’ and 

inserting ‘‘, 1376(c), or 1377’’; 

(ii) in paragraph (2), by inserting ‘‘or 1377’’ after’’ 

1371’’; and 

12 USC 4633. 

12 USC 4517. 

Deadline. 

Notification. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2775 

(iii) in paragraph (4), by inserting ‘‘or removal 

or prohibition’’ after ‘‘cease and desist’’; and 

(C) in section 1374(a)— 

(i) by striking ‘‘or 1376’’ and inserting ‘‘1313B, 

1376, or 1377’’; and 

(ii) by striking ‘‘such section’’ and inserting ‘‘this 

title’’. 

(2) FANNIE MAE CHARTER ACT.—Section 308(b) of the Federal National Mortgage Association Charter Act (12 U.S.C. 

1723(b)) is amended in the second sentence, by striking ‘‘The’’ 

and inserting ‘‘Except to the extent that action under section 

1377 of the Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992 temporarily results in a lesser number, 

the’’. 

(3) FREDDIE MAC CHARTER ACT.—Section 303(a)(2)(A) of 

the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 

1452(a)(2)(A)) is amended, in the second sentence, by striking 

‘‘The’’ and inserting ‘‘Except to the extent action under section 

1377 of the Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992 temporarily results in a lesser number, 

the’’. 

SEC. 1154. ENFORCEMENT AND JURISDICTION. 

Section 1375 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4635) is amended— 

(1) by striking subsection (a) and inserting the following 

new subsection: 

‘‘(a) ENFORCEMENT.—The Director may, in the discretion of 

the Director, apply to the United States District Court for the 

District of Columbia, or the United States district court within 

the jurisdiction of which the headquarters of the regulated entity 

is located, for the enforcement of any effective and outstanding 

notice or order issued under this subtitle or subtitle B, or request 

that the Attorney General of the United States bring such an 

action. Such court shall have jurisdiction and power to order and 

require compliance with such notice or order.’’; and 

(2) in subsection (b), by striking ‘‘or 1376’’ and inserting 

‘‘1313B, 1376, or 1377’’. 

SEC. 1155. CIVIL MONEY PENALTIES. 

Section 1376 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4636) is amended— 

(1) by striking subsection (a) and inserting the following: 

‘‘(a) IN GENERAL.—The Director may impose a civil money 

penalty in accordance with this section on any regulated entity 

or any entity-affiliated party. The Director shall not impose a civil 

penalty in accordance with this section on any regulated entity 

or any entity-affiliated party for any violation that is addressed 

under section 1345(a).’’; 

(2) by striking subsection (b) and inserting the following: 

‘‘(b) AMOUNT OF PENALTY.— 

‘‘(1) FIRST TIER.—A regulated entity or entity-affiliated 

party shall forfeit and pay a civil penalty of not more than 

$10,000 for each day during which a violation continues, if 

such regulated entity or party— 

‘‘(A) violates any provision of this title, the authorizing 

statutes, or any order, condition, rule, or regulation under 

this title or any authorizing statute; 


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122 STAT. 2776 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(B) violates any final or temporary order or notice 

issued pursuant to this title; 

‘‘(C) violates any condition imposed in writing by the 

Director in connection with the grant of any application 

or other request by such regulated entity; or 

‘‘(D) violates any written agreement between the regulated entity and the Director. 

‘‘(2) SECOND TIER.—Notwithstanding paragraph (1), a regulated entity or entity-affiliated party shall forfeit and pay a 

civil penalty of not more than $50,000 for each day during 

which a violation, practice, or breach continues, if— 

‘‘(A) the regulated entity or entity-affiliated party, 

respectively— 

‘‘(i) commits any violation described in any 

subparagraph of paragraph (1); 

‘‘(ii) recklessly engages in an unsafe or unsound 

practice in conducting the affairs of the regulated 

entity; or 

‘‘(iii) breaches any fiduciary duty; and 

‘‘(B) the violation, practice, or breach— 

‘‘(i) is part of a pattern of misconduct; 

‘‘(ii) causes or is likely to cause more than a 

minimal loss to the regulated entity; or 

‘‘(iii) results in pecuniary gain or other benefit 

to such party. 

‘‘(3) THIRD TIER.—Notwithstanding paragraphs (1) and (2), 

any regulated entity or entity-affiliated party shall forfeit and 

pay a civil penalty in an amount not to exceed the applicable 

maximum amount determined under paragraph (4) for each 

day during which such violation, practice, or breach continues, 

if such regulated entity or entity-affiliated party— 

‘‘(A) knowingly— 

‘‘(i) commits any violation described in any 

subparagraph of paragraph (1); 

‘‘(ii) engages in any unsafe or unsound practice 

in conducting the affairs of the regulated entity; or 

‘‘(iii) breaches any fiduciary duty; and 

‘‘(B) knowingly or recklessly causes a substantial loss 

to the regulated entity or a substantial pecuniary gain 

or other benefit to such party by reason of such violation, 

practice, or breach. 

‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR ANY VIOLATION

DESCRIBED IN PARAGRAPH (3).—The maximum daily amount of 

any civil penalty which may be assessed pursuant to paragraph 

(3) for any violation, practice, or breach described in paragraph 

(3) is— 

‘‘(A) in the case of any entity-affiliated party, an 

amount not to exceed $2,000,000; and 

‘‘(B) in the case of any regulated entity, $2,000,000.’’; 

(3) in subsection (c)— 

(A) by striking ‘‘enterprise’’ each place that term 

appears and inserting ‘‘regulated entity’’; 

(B) by inserting ‘‘or entity-affiliated party’’ before ‘‘in 

writing’’; and 

(C) by inserting ‘‘or entity-affiliated party’’ before ‘‘has 

been given’’; 

(4) in subsection (d)— 


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(A) by striking ‘‘or director’’ each place such term 

appears and inserting ‘‘director, or entity-affiliated party’’; 

(B) by striking ‘‘an enterprise’’ and inserting ‘‘a regulated entity’’; 

(C) by striking ‘‘the enterprise’’ and inserting ‘‘the regulated entity’’; 

(D) by striking ‘‘request the Attorney General of the 

United States to’’; 

(E) by inserting ‘‘, or the United States district court 

within the jurisdiction of which the headquarters of the 

regulated entity is located,’’ after ‘‘District of Columbia’’; 

(F) by striking ‘‘, or may, under the direction and 

control of the Attorney General of the United States, bring 

such an action’’; and 

(G) by striking ‘‘and section 1374’’; and 

(5) in subsection (g), by striking ‘‘An enterprise’’ and 

inserting ‘‘A regulated entity’’. 

SEC. 1156. CRIMINAL PENALTY. 

(a) IN GENERAL.—Subtitle C of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et 

seq.) is amended by inserting after section 1377, as added by 

this Act, the following: 

‘‘SEC. 1378. CRIMINAL PENALTY. 

‘‘Whoever, being subject to an order in effect under section 

1377, without the prior written approval of the Director, knowingly 

participates, directly or indirectly, in any manner (including by 

engaging in an activity specifically prohibited in such an order) 

in the conduct of the affairs of any regulated entity shall, notwithstanding section 3571 of title 18, be fined not more than $1,000,000, 

imprisoned for not more than 5 years, or both.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.—The Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 

(12 U.S.C. 4501 et seq.) is amended— 

(1) in section 1379 (as so designated by this Act)— 

(A) by striking ‘‘an enterprise’’ and inserting ‘‘a regulated entity’’; and 

(B) by striking ‘‘the enterprise’’ and inserting ‘‘the regulated entity’’; 

(2) in section 1379A (as so designated by this Act), by 

striking ‘‘an enterprise’’ and inserting ‘‘a regulated entity’’; 

(3) in section 1379B(c) (as so designated by this Act), by 

striking ‘‘enterprise’’ and inserting ‘‘regulated entity’’; and 

(4) in section 1379D (as so designated by this Act), by 

striking ‘‘enterprise’’ and inserting ‘‘regulated entity’’. 

SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE. 

Section 1379 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so designated 

by this Act, is amended— 

(1) by striking ‘‘2-year’’ and inserting ‘‘6-year’’; 

(2) by striking ‘‘a director or executive officer of an enterprise’’ and inserting ‘‘an entity-affiliated party’’; 

(3) by striking ‘‘director or officer’’ each place that term 

appears and inserting ‘‘entity-affiliated party’’; and 

(4) by striking ‘‘enterprise.’’ and inserting ‘‘regulated 

entity.’’. 

12 USC 4641. 

12 USC 4639. 

12 USC 4638. 

12 USC 4637. 

12 USC 4636b. 


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SEC. 1158. SUBPOENA AUTHORITY. 

(a) IN GENERAL.—Section 1379B of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) 

is amended— 

(1) in subsection (a)— 

(A) in the matter preceding paragraph (1)— 

(i) by striking ‘‘administrative’’; 

(ii) by inserting ‘‘, examination, or investigation’’ 

after ‘‘proceeding’’; 

(iii) by striking ‘‘subtitle’’ and inserting ‘‘title’’; and 

(iv) by inserting ‘‘or any designated representative 

thereof, including any person designated to conduct 

any hearing under this subtitle’’ after ‘‘Director’’; and 

(B) in paragraph (4), by striking ‘‘issued by the 

Director’’; 

(2) in subsection (b), by inserting ‘‘or in any territory or 

other place subject to the jurisdiction of the United States’’ 

after ‘‘State’’; 

(3) by striking subsection (c) and inserting the following: 

‘‘(c) ENFORCEMENT.— 

‘‘(1) IN GENERAL.—The Director, or any party to proceedings 

under this subtitle, may apply to the United States District 

Court for the District of Columbia, or the United States district 

court for the judicial district of the United States in any territory in which such proceeding is being conducted, or where 

the witness resides or carries on business, for enforcement 

of any subpoena or subpoena duces tecum issued pursuant 

to this section. 

‘‘(2) POWER OF COURT.—The courts described under paragraph (1) shall have the jurisdiction and power to order and 

require compliance with any subpoena issued under paragraph 

(1).’’; 

(4) in subsection (d), by inserting ‘‘enterprise-affiliated 

party’’ before ‘‘may allow’’; and 

(5) by adding at the end the following: 

‘‘(e) PENALTIES.—A person shall be guilty of a misdemeanor, 

and upon conviction, shall be subject to a fine of not more than 

$1,000 or to imprisonment for a term of not more than 1 year, 

or both, if that person willfully fails or refuses, in disobedience 

of a subpoena issued under subsection (c), to— 

‘‘(1) attend court; 

‘‘(2) testify in court; 

‘‘(3) answer any lawful inquiry; or 

‘‘(4) produce books, papers, correspondence, contracts, 

agreements, or such other records as requested in the subpoena.’’. 

Subtitle E—General Provisions 

SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS. 

(a) AMENDMENTS TO 1992 ACT.—The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 

et seq.), as amended by this Act, is amended— 

(1) in section 1315 (12 U.S.C. 4515)— 

(A) in subsection (a)— 


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(i) by striking ‘‘(a) OFFICE PERSONNEL.—The’’ and 

inserting ‘‘(a) IN GENERAL.—Subject to title III of the 

Federal Housing Finance Regulatory Reform Act of 

2008, the’’; and 

(ii) by striking ‘‘the Office’’ each place that term 

appears and inserting ‘‘the Agency’’; 

(B) in subsection (c), by striking ‘‘the Office’’ and 

inserting ‘‘the Agency’’; 

(C) in subsection (e), by striking ‘‘the Office’’ and 

inserting ‘‘the Agency’’; 

(D) by striking subsection (d) and redesignating subsection (e) as subsection (d); and 

(E) by striking subsection (f); 

(2) in section 1319A (12 U.S.C. 4520)— 

(A) by striking ‘‘(a) IN GENERAL.—’’; and 

(B) by striking subsection (b); 

(3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 

last sentence; 

(4) by striking section 1383 (12 U.S.C. 1451 note); 

(5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 

4523, 4524, 4525) by striking ‘‘the Office’’ each place that term 

appears and inserting ‘‘the Agency’’; and 

(6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 

4521, 4619(a)(3)), by striking ‘‘Committee on Banking, Finance 

and Urban Affairs’’ each place such term appears and inserting 

‘‘Committee on Financial Services’’. 

(b) AMENDMENTS TO FANNIE MAE CHARTER ACT.—The Federal 

National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) 

is amended— 

(1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 

309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 U.S.C. 

1723a(k)(1)), by striking ‘‘Director of the Office of Federal 

Housing Enterprise Oversight of the Department of Housing 

and Urban Development’’ each place that term appears, and 

inserting ‘‘Director of the Federal Housing Finance Agency’’; 

and 

(2) in section 309— 

(A) in subsection (m) (12 U.S.C. 1723a(m))— 

(i) in paragraph (1), by striking ‘‘to the Secretary, 

in a form determined by the Secretary’’ and inserting 

‘‘to the Director of the Federal Housing Finance 

Agency, in a form determined by the Director’’; and 

(ii) in paragraph (2), by striking ‘‘to the Secretary, 

in a form determined by the Secretary’’ and inserting 

‘‘to the Director of the Federal Housing Finance 

Agency, in a form determined by the Director’’; 

(B) in subsection (n) (12 U.S.C. 1723a(n))— 

(i) in paragraph (1), by striking ‘‘and the Secretary’’ 

and inserting ‘‘and the Director of the Federal Housing 

Finance Agency’’; and 

(ii) in paragraph (2), by striking ‘‘Secretary’’ each 

place that term appears and inserting ‘‘Director of 

the Federal Housing Finance Agency’’; and 

(C) in paragraph (3)(B), by striking ‘‘Secretary’’ and 

inserting ‘‘Director of the Federal Housing Finance 

Agency’’. 


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122 STAT. 2780 PUBLIC LAW 110–289—JULY 30, 2008 

(c) AMENDMENTS TO FREDDIE MAC CHARTER ACT.—The Federal 

Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) 

is amended— 

(1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 

303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 U.S.C. 

1456(c)(1)), by striking ‘‘Director of the Office of Federal 

Housing Enterprise Oversight of the Department of Housing 

and Urban Development’’ each place that term appears, and 

inserting ‘‘Director of the Federal Housing Finance Agency’’; 

(2) in section 306 (12 U.S.C. 1455)— 

(A) in subsection (c)(2), by inserting ‘‘the’’ after ‘‘Secretary of’’; 

(B) in subsection (i)— 

(i) by striking ‘‘section 1316(c)’’ and inserting ‘‘section 306(c)’’; and 

(ii) by striking ‘‘section 106’’ and inserting ‘‘section 

1316’’; and 

(C) in subsection (j)(2), by striking ‘‘of substantially’’ 

and inserting ‘‘or substantially’’; and 

(3) in section 307 (12 U.S.C. 1456)— 

(A) in subsection (e)— 

(i) in paragraph (1), by striking ‘‘to the Secretary, 

in a form determined by the Secretary’’ and inserting 

‘‘to the Director of the Federal Housing Finance 

Agency, in a form determined by the Director’’; and 

(ii) in paragraph (2), by striking ‘‘to the Secretary, 

in a form determined by the Secretary’’ and inserting 

‘‘to the Director of the Federal Housing Finance 

Agency, in a form determined by the Director’’; and 

(B) in subsection (f)— 

(i) in paragraph (1), by striking ‘‘and the Secretary’’ 

and inserting ‘‘and the Director of the Federal Housing 

Finance Agency’’; 

(ii) in paragraph (2), by striking ‘‘the Secretary’’ 

each place that term appears and inserting ‘‘the 

Director of the Federal Housing Finance Agency’’; and 

(iii) in paragraph (3)(B), by striking ‘‘Secretary’’ 

and inserting ‘‘Director of the Federal Housing Finance 

Agency’’. 

(d) AMENDMENT TO TITLE 18, UNITED STATES CODE.—Section 

1905 of title 18, United States Code, is amended by striking ‘‘Office 

of Federal Housing Enterprise Oversight’’ and inserting ‘‘Federal 

Housing Finance Agency’’. 

(e) AMENDMENTS TO FLOOD DISASTER PROTECTION ACT OF

1973.—Section 102(f)(3)(A) of the Flood Disaster Protection Act 

of 1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking ‘‘Director 

of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development’’ and inserting ‘‘Director 

of the Federal Housing Finance Agency’’. 

(f) AMENDMENT TO DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT ACT.—Section 5 of the Department of Housing and 

Urban Development Act (42 U.S.C. 3534) is amended by striking 

subsection (d). 

(g) AMENDMENTS TO TITLE 5, UNITED STATES CODE.—Title 5, 

United States Code, is amended— 

(1) in section 5313, by striking the item relating to the 

Director of the Office of Federal Housing Enterprise Oversight, 


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Department of Housing and Urban Development and inserting 

the following new item: 

‘‘Director of the Federal Housing Finance Agency.’’; and 

(2) in section 3132(a)(1)— 

(A) in subparagraph (B), by striking ‘‘,, and’’ and 

inserting ‘‘, and’’; 

(B) in subparagraph (D)— 

(i) by striking ‘‘the Federal Housing Finance 

Board’’; 

(ii) by striking ‘‘the Office of Federal Housing 

Enterprise Oversight of the Department of Housing 

and Urban Development’’ and inserting ‘‘the Federal 

Housing Finance Agency’’; and 

(iii) by striking ‘‘or or’’ at the end; 

(C) in subparagraph (E), as added by section 

8(d)(1)(B)(iii) of Public Law 107–123, by adding ‘‘or’’ at 

the end; and 

(D) by redesignating subparagraph (E), as added by 

section 10702(c)(1)(C) of Public Law 107–171, as subparagraph (F). 

(h) AMENDMENT TO SARBANES-OXLEY ACT.—Section 

105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 

7215(b)(5)(B)(ii)(II)) is amended by inserting ‘‘and the Director of 

the Federal Housing Finance Agency,’’ after ‘‘Commission,’’. 

(i) AMENDMENT TO FEDERAL DEPOSIT INSURANCE ACT.—Section 

11(t)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 

1821(t)(2)(A)) is amended by adding at the end the following: 

‘‘(vii) Federal Housing Finance Agency.’’. 

SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES. 

(a) FANNIE MAE.— 

(1) IN GENERAL.—Section 308(b) of the Federal National 

Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 

amended— 

(A) in the first sentence, by striking ‘‘eighteen persons, 

five of whom shall be appointed annually by the President 

of the United States, and the remainder of whom’’ and 

inserting ‘‘13 persons, or such other number that the 

Director determines appropriate, who’’; 

(B) in the second sentence, by striking ‘‘appointed by 

the President’’; 

(C) in the third sentence— 

(i) by striking ‘‘appointed or’’; and 

(ii) by striking ‘‘, except that any such appointed 

member may be removed from office by the President 

for good cause’’; 

(D) in the fourth sentence, by striking ‘‘elective’’; and 

(E) by striking the fifth sentence. 

(2) TRANSITIONAL PROVISION.—The amendments made by 

paragraph (1) shall not apply to any appointed position of 

the board of directors of the Federal National Mortgage Association until the expiration of the annual term for such position 

during which the effective date under section 1163 occurs. 

(b) FREDDIE MAC.— 

12 USC 1723 

note. 


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122 STAT. 2782 PUBLIC LAW 110–289—JULY 30, 2008 

(1) IN GENERAL.—Section 303(a)(2) of the Federal Home 

Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is 

amended— 

(A) in subparagraph (A)— 

(i) in the first sentence, by striking ‘‘18 persons, 

5 of whom shall be appointed annually by the President 

of the United States and the remainder of whom’’ 

and inserting ‘‘13 persons, or such other number as 

the Director determines appropriate, who’’; and 

(ii) in the second sentence, by striking ‘‘appointed 

by the President of the United States’’; 

(B) in subparagraph (B)— 

(i) by striking ‘‘such or’’; and 

(ii) by striking ‘‘, except that any appointed 

member may be removed from office by the President 

for good cause’’; and 

(C) in subparagraph (C)— 

(i) by striking the first sentence; and 

(ii) by striking ‘‘elective’’. 

(2) TRANSITIONAL PROVISION.—The amendments made by 

paragraph (1) shall not apply to any appointed position of 

the board of directors of the Federal Home Loan Mortgage 

Corporation until the expiration of the annual term for such 

position during which the effective date under section 1163 

occurs. 

SEC. 1163. EFFECTIVE DATE. 

Except as otherwise specifically provided in this title, this title 

and the amendments made by this title shall take effect on, and 

shall apply beginning on, the date of enactment of this Act. 

TITLE II—FEDERAL HOME LOAN BANKS 

SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE ENTERPRISES AND THE FEDERAL HOME LOAN BANKS. 

Section 1313 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended 

by adding at the end the following: 

‘‘(f) RECOGNITION OF DISTINCTIONS BETWEEN THE ENTERPRISES

AND THE FEDERAL HOME LOAN BANKS.—Prior to promulgating any 

regulation or taking any other formal or informal agency action 

of general applicability and future effect relating to the Federal 

Home Loan Banks (other than any regulation, advisory document, 

or examination guidance of the Federal Housing Finance Board 

that the Director reissues after the authority of the Director over 

the Federal Home Loan Banks takes effect), including the issuance 

of an advisory document or examination guidance, the Director 

shall consider the differences between the Federal Home Loan 

Banks and the enterprises with respect to— 

‘‘(1) the Banks’— 

‘‘(A) cooperative ownership structure; 

‘‘(B) the mission of providing liquidity to members; 

‘‘(C) affordable housing and community development 

mission; 

‘‘(D) capital structure; and 

‘‘(E) joint and several liability; and 

5 USC 13132 

note. 

12 USC 1452 

note. 


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‘‘(2) any other differences that the Director considers appropriate.’’. 

SEC. 1202. DIRECTORS. 

Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 

1427) is amended— 

(1) by striking subsection (a) and inserting the following: 

‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CONFLICTS OF

INTEREST.— 

‘‘(1) IN GENERAL.—Subject to paragraphs (2) through (4), 

the management of each Federal Home Loan Bank shall be 

vested in a board of 13 directors, or such other number as 

the Director determines appropriate. 

‘‘(2) BOARD MAKEUP.—The board of directors of each Bank 

shall be comprised of— 

‘‘(A) member directors, who shall comprise at least 

the majority of the members of the board of directors; 

and 

‘‘(B) independent directors, who shall comprise not 

fewer than 2⁄5 of the members of the board of directors. 

‘‘(3) SELECTION CRITERIA.— 

‘‘(A) IN GENERAL.—Each member of the board of directors shall be— 

‘‘(i) elected by plurality vote of the members, in 

accordance with procedures established under this section; and 

‘‘(ii) a citizen of the United States. 

‘‘(B) INDEPENDENT DIRECTOR CRITERIA.— 

‘‘(i) IN GENERAL.—Each independent director that 

is not a public interest director under clause (ii) shall 

have demonstrated knowledge of, or experience in, 

financial management, auditing and accounting, risk 

management practices, derivatives, project development, or organizational management, or such other 

knowledge or expertise as the Director may provide 

by regulation. 

‘‘(ii) PUBLIC INTEREST.—Not fewer than 2 of the 

independent directors shall have more than 4 years 

of experience in representing consumer or community 

interests on banking services, credit needs, housing, 

or financial consumer protections. 

‘‘(iii) CONFLICTS OF INTEREST.—No independent 

director may, during the term of service on the board 

of directors, serve as an officer of any Federal Home 

Loan Bank or as a director, officer, or employee of 

any member of a Bank, or of any person that receives 

advances from a Bank. 

‘‘(4) DEFINITIONS.—For purposes of this section, the following definitions shall apply: 

‘‘(A) INDEPENDENT DIRECTOR.—The terms ‘independent 

director’ and ‘independent directorship’ mean a member 

of the board of directors of a Federal Home Loan Bank 

who is a bona fide resident of the district in which the 

Federal Home Loan Bank is located, or the directorship 

held by such a person, respectively. 

‘‘(B) MEMBER DIRECTOR.—The terms ‘member director’ 

and ‘member directorship’ mean a member of the board 


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122 STAT. 2784 PUBLIC LAW 110–289—JULY 30, 2008 

of directors of a Federal Home Loan Bank who is an 

officer or director of a member institution that is located 

in the district in which the Federal Home Loan Bank 

is located, or the directorship held by such a person, respectively.’’; 

(2) by striking ‘‘elective’’ each place that term appears, 

other than in subsections (d), (e), and (f), and inserting 

‘‘member’’; 

(3) in subsection (b)— 

(A) by striking the subsection heading and all that 

follows through ‘‘Each elective directorship’’ and inserting 

the following: 

‘‘(b) DIRECTORSHIPS.— 

‘‘(1) MEMBER DIRECTORSHIPS.—Each member directorship’’; 

and 

(B) by adding at the end the following: 

‘‘(2) INDEPENDENT DIRECTORSHIPS.— 

‘‘(A) ELECTIONS.—Each independent director— 

‘‘(i) shall be elected by the members entitled to 

vote, from among eligible persons nominated, after consultation with the Advisory Council of the Bank, by 

the board of directors of the Bank; and 

‘‘(ii) shall be elected by a plurality of the votes 

of the members of the Bank at large, with each member 

having the number of votes for each such directorship 

as it has under paragraph (1) in an election to fill 

member directorships. 

‘‘(B) CRITERIA.—Nominees shall meet all applicable 

requirements prescribed in this section. 

‘‘(C) NOMINATION AND ELECTION PROCEDURES.—Procedures for nomination and election of independent directors 

shall be prescribed by the bylaws of each Federal Home 

Loan Bank, in a manner consistent with the rules and 

regulations of the Agency.’’; 

(4) in subsection (c)— 

(A) by striking ‘‘elective’’ each place that term appears 

and inserting ‘‘member’’, except— 

(i) in the second sentence, the second place that 

term appears; and 

(ii) each place that term appears in the fifth sentence; and 

(B) in the second sentence— 

(i) by inserting ‘‘(A) except as provided in clause 

(B) of this sentence,’’ before ‘‘if at any time’’; and 

(ii) by inserting before the period at the end the 

following: ‘‘, and (B) clause (A) of this sentence shall 

not apply to the directorships of any Federal Home 

Loan Bank resulting from the merger of any 2 or 

more such Banks’’; 

(5) in subsection (d)— 

(A) in the first sentence— 

(i) by striking ‘‘, whether elected or appointed,’’; 

and 

(ii) by striking ‘‘3 years’’ and inserting ‘‘4 years’’; 

(B) in the second sentence— 


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(i) by striking ‘‘Federal Home Loan Bank System 

Modernization Act of 1999’’ and inserting ‘‘Federal 

Housing Finance Regulatory Reform Act of 2008’’; 

(ii) by striking ‘‘1⁄3’’ and inserting ‘‘1⁄4’’; and 

(iii) by striking ‘‘or appointed’’; and 

(C) in the third sentence— 

(i) by striking ‘‘an elective’’ each place that term 

appears and inserting ‘‘a’’; and 

(ii) by striking ‘‘in any elective directorship or elective directorships’’; 

(6) in subsection (f)— 

(A) by striking paragraph (2); 

(B) by striking ‘‘appointed or’’ each place that term 

appears; and 

(C) in paragraph (3)— 

(i) by striking ‘‘(3) ELECTED BANK DIRECTORS.— ’’ and inserting ‘‘(2) ELECTION PROCESS.—’’; and 

(ii) by striking ‘‘elective’’ each place that term 

appears; 

(7) in subsection (i)— 

(A) in paragraph (1), by striking ‘‘Subject to paragraph 

(2), each’’ and inserting ‘‘Each’’; and 

(B) by striking paragraph (2) and inserting the following: 

‘‘(2) ANNUAL REPORT.—The Director shall include, in the 

annual report submitted to the Congress pursuant to section 

1319B of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992, information regarding the compensation and expenses paid by the Federal Home Loan Banks 

to the directors on the boards of directors of the Banks.’’; 

and 

(8) by adding at the end the following: 

‘‘(l) TRANSITION RULE.—Any member of the board of directors 

of a Bank elected or appointed in accordance with this section 

prior to the date of enactment of this subsection may continue 

to serve as a member of that board of directors for the remainder 

of the existing term of service.’’. 

SEC. 1203. DEFINITIONS. 

Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 

1422) is amended— 

(1) by striking paragraphs (1), (10), and (11); 

(2) by redesignating paragraphs (2) through (9) as paragraphs (1) through (8), respectively; 

(3) by redesignating paragraphs (12) and (13) as paragraphs 

(9) and (10), respectively; and 

(4) by adding at the end the following: 

‘‘(11) DIRECTOR.—The term ‘Director’ means the Director 

of the Federal Housing Finance Agency. 

‘‘(12) AGENCY.—The term ‘Agency’ means the Federal 

Housing Finance Agency, established under section 1311 of 

the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.’’. 

SEC. 1204. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS. 

The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 

other than in provisions of that Act added or amended otherwise 

by this Act, is amended— 


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122 STAT. 2786 PUBLIC LAW 110–289—JULY 30, 2008 

(1) by striking sections 2A and 2B (12 U.S.C. 1422a, 1422b); 

(2) in section 18 (12 U.S.C. 1438), by striking subsection 

(b); 

(3) in section 11 (12 U.S.C. 1431)— 

(A) in subsection (b)— 

(i) in the first sentence— 

(I) by striking ‘‘The Board’’ and inserting ‘‘The 

Office of Finance, as agent for the Banks,’’; and 

(II) by striking ‘‘the Board’’ and inserting ‘‘such 

Office’’; and 

(ii) in the second and fourth sentences, by striking 

‘‘the Board’’ each place such term appears and inserting 

‘‘the Office of Finance’’; 

(B) in subsection (c)— 

(i) by striking ‘‘the Board’’ the first place such 

term appears and inserting ‘‘the Office of Finance, 

as agent for the Banks,’’; and 

(ii) by striking ‘‘the Board’’ the second place such 

term appears and inserting ‘‘such Office’’; and 

(C) in subsection (f)— 

(i) by striking the 2 commas after ‘‘permit’’ and 

inserting ‘‘or’’; and 

(ii) by striking the comma after ‘‘require’’; 

(4) in section 6 (12 U.S.C. 1426)— 

(A) in subsection (b)(1), in the matter preceding 

subparagraph (A), by striking ‘‘Finance Board approval’’ 

and inserting ‘‘approval by the Director’’; and 

(B) in each of subsections (c)(4)(B) and (d)(2), by 

striking ‘‘Finance Board regulations’’ each place that term 

appears and inserting ‘‘regulations of the Director’’; 

(5) in section 10(b) (12 U.S.C. 1430(b))— 

(A) in the subsection heading, by striking ‘‘FORMAL

BOARD RESOLUTION’’ and inserting ‘‘APPROVAL OF

DIRECTOR’’; and 

(B) by striking ‘‘by formal resolution’’; 

(6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 

‘‘Chairperson of the Federal Housing Finance Board’’ and 

inserting ‘‘Director’’; 

(7) in section 15 (12 U.S.C. 1435), by inserting ‘‘or the 

Director’’ after ‘‘the Board’’; 

(8) by striking ‘‘the Board’’ each place that term appears 

and inserting ‘‘the Director’’; 

(9) by striking ‘‘The Board’’ each place that term appears 

and inserting ‘‘The Director’’; 

(10) by striking ‘‘the Finance Board’’ each place that term 

appears and inserting ‘‘the Director’’; 

(11) by striking ‘‘The Finance Board’’ each place that term 

appears and inserting ‘‘The Director’’; and 

(12) by striking ‘‘Federal Housing Finance Board’’ each 

place that term appears and inserting ‘‘Director’’. 

SEC. 1205. HOUSING GOALS. 

The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) 

is amended by inserting after section 10b the following new section: 

‘‘SEC. 10C. HOUSING GOALS. 

‘‘(a) IN GENERAL.—The Director shall establish housing goals 

with respect to the purchase of mortgages, if any, by the Federal 

12 USC 1430c. 

12 USC 

1430 et al. 

12 USC 

1422 et al. 

12 USC 

1427 et al. 

12 USC 

1422 et al. 


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Home Loan Banks. Such goals shall be consistent with the goals 

established under sections 1331 through 1334 of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992. 

‘‘(b) CONSIDERATIONS.—In establishing the goals required by 

subsection (a), the Director shall consider the unique mission and 

ownership structure of the Federal Home Loan Banks. 

‘‘(c) TRANSITION PERIOD.—To facilitate an orderly transition, 

the Director shall establish interim target goals for purposes of 

this section for each of the 2 calendar years following the date 

of enactment of this section. 

‘‘(d) MONITORING AND ENFORCEMENT OF GOALS.—The requirements of section 1336 of the Federal Housing Enterprises Safety 

and Soundness Act of 1992, shall apply to this section, in the 

same manner and to the same extent as that section applies to 

the Federal housing enterprises. 

‘‘(e) ANNUAL REPORT.—The Director shall annually report to 

Congress on the performance of the Banks in meeting the goals 

established under this section.’’. 

SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS. 

Section 4(a)(1) of the Federal Home Loan Bank Act (12 U.S.C. 

1424(a)(1)) is amended— 

(1) by inserting after ‘‘savings bank,’’ the following: 

‘‘community development financial institution,’’; and 

(2) in subparagraph (B), by inserting after ‘‘United States,’’ 

the following: ‘‘or, in the case of a community development 

financial institution, is certified as a community development 

financial institution under the Community Development 

Banking and Financial Institutions Act of 1994.’’. 

SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 

BANKS. 

The Federal Home Loan Bank Act is amended by inserting 

after section 20 (12 U.S.C. 1440) the following new section: 

‘‘SEC. 20A. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 

BANKS. 

‘‘(a) INFORMATION ON FINANCIAL CONDITION.—In order to enable 

each Federal Home Loan Bank to evaluate the financial condition 

of one or more of the other Federal Home Loan Banks individually 

and the Federal Home Loan Bank System (including any risks 

associated with the issuance or repayment of consolidated Federal 

Home Loan Bank bonds and debentures or other borrowings and 

the joint and several liabilities of the Banks incurred due to such 

borrowings), as well as to comply with any of its obligations under 

the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the 

Director shall make available to the Banks such reports, records, 

or other information as may be available, relating to the condition 

of any Federal Home Loan Bank. 

‘‘(b) SHARING OF INFORMATION.— 

‘‘(1) IN GENERAL.—The Director shall promulgate regulations to facilitate the sharing of information made available 

under subsection (a) directly among the Federal Home Loan 

Banks. 

‘‘(2) LIMITATION.—Notwithstanding paragraph (1), a Federal Home Loan Bank responding to a request from another 

Bank or from the Director for information pursuant to this 

section may request that the Director determine that such 

Regulations. 

Reports. 

Records. 

12 USC 1440a. 


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information is proprietary and that the public interest requires 

that such information not be shared. 

‘‘(c) LIMITATION.—Nothing in this section shall affect the obligations of any Federal Home Loan Bank under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et seq.) or the regulations 

issued by the Securities and Exchange Commission thereunder. 

‘‘(d) NO WAIVER OF PRIVILEGE.—The Director shall not be 

deemed to have waived any privilege applicable to any information 

concerning a Federal Home Loan Bank by transferring, or permitting the transfer of, that information to any other Federal Home 

Loan Bank for the purposes set out in subsection (a).’’. 

SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS. 

(a) IN GENERAL.—The Federal Home Loan Banks shall be 

exempt from compliance with— 

(1) sections 13(e), 14(a), and 14(c) of the Securities 

Exchange Act of 1934, and related Commission regulations; 

(2) section 15 of the Securities Exchange Act of 1934, 

and related Commission regulations, with respect to transactions in the capital stock of a Federal Home Loan Bank; 

(3) section 17A of the Securities Exchange Act of 1934, 

and related Commission regulations, with respect to the 

transfer of the securities of a Federal Home Loan Bank; and 

(4) the Trust Indenture Act of 1939. 

(b) MEMBER EXEMPTION.—The members of the Federal Home 

Loan Bank System shall be exempt from compliance with sections 

13(d), 13(f), 13(g), 14(d), and 16 of the Securities Exchange Act 

of 1934, and related Commission regulations, with respect to ownership of or transactions in the capital stock of the Federal Home 

Loan Banks by such members. 

(c) EXEMPTED AND GOVERNMENT SECURITIES.— 

(1) CAPITAL STOCK.—The capital stock issued by each of 

the Federal Home Loan Banks under section 6 of the Federal 

Home Loan Bank Act are— 

(A) exempted securities, within the meaning of section 

3(a)(2) of the Securities Act of 1933; and 

(B) exempted securities, within the meaning of section 

3(a)(12)(A) of the Securities Exchange Act of 1934, except 

to the extent provided in section 38 of that Act. 

(2) OTHER OBLIGATIONS.—The debentures, bonds, and other 

obligations issued under section 11 of the Federal Home Loan 

Bank Act (12 U.S.C. 1431) are— 

(A) exempted securities, within the meaning of section 

3(a)(2) of the Securities Act of 1933; 

(B) government securities, within the meaning of section 3(a)(42) of the Securities Exchange Act of 1934; and 

(C) government securities, within the meaning of section 2(a)(16) of the Investment Company Act of 1940. 

(3) BROKERS AND DEALERS.—A person (other than a Federal 

Home Loan Bank effecting transactions for members of the 

Federal Home Loan Bank System) that effects transactions 

in the capital stock or other obligations of a Federal Home 

Loan Bank, for the account of others or for that person’s own 

account, as applicable, is a broker or dealer, as those terms 

are defined in paragraphs (4) and (5), respectively, of section 

3(a) of the Securities Exchange Act of 1934, but is excluded 

from the definition of— 

12 USC 1426a. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2789 

(A) the term ‘‘government securities broker’’ under section 3(a)(43) of the Securities Exchange Act of 1934; and 

(B) the term ‘‘government securities dealer’’ under section 3(a)(44) of the Securities Exchange Act of 1934. 

(d) EXEMPTION FROM REPORTING REQUIREMENTS.—The Federal 

Home Loan Banks shall be exempt from periodic reporting requirements under the securities laws pertaining to the disclosure of— 

(1) related party transactions that occur in the ordinary 

course of the business of the Banks with members; and 

(2) the unregistered sales of equity securities. 

(e) TENDER OFFERS.—Commission rules relating to tender offers 

shall not apply in connection with transactions in the capital stock 

of the Federal Home Loan Banks. 

(f) REGULATIONS.— 

(1) IN GENERAL.—The Commission shall promulgate such 

rules and regulations as may be necessary or appropriate in 

the public interest or in furtherance of this section and the 

exemptions provided in this section. 

(2) CONSIDERATIONS.—In issuing regulations under this section, the Commission shall consider the distinctive characteristics of the Federal Home Loan Banks when evaluating— 

(A) the accounting treatment with respect to the payment to the Resolution Funding Corporation; 

(B) the role of the combined financial statements of 

the Federal Home Loan Banks; 

(C) the accounting classification of redeemable capital 

stock; and 

(D) the accounting treatment related to the joint and 

several nature of the obligations of the Banks. 

(g) DEFINITIONS.—As used in this section— 

(1) the terms ‘‘Bank’’, ‘‘Federal Home Loan Bank’’, 

‘‘member’’, and ‘‘Federal Home Loan Bank System’’ have the 

same meanings as in section 2 of the Federal Home Loan 

Bank Act (12 U.S.C. 1422); 

(2) the term ‘‘Commission’’ means the Securities and 

Exchange Commission; and 

(3) the term ‘‘securities laws’’ has the same meaning as 

in section 3(a)(47) of the Securities Exchange Act of 1934 (15 

U.S.C. 78c(a)(47)). 

SEC. 1209. VOLUNTARY MERGERS. 

Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 

1446) is amended— 

(1) by striking ‘‘Whenever’’ and inserting ‘‘(a) IN GENERAL.—Whenever’’; and 

(2) by adding at the end the following: 

‘‘(b) VOLUNTARY MERGERS AUTHORIZED.— 

‘‘(1) IN GENERAL.—Any Federal Home Loan Bank may, 

with the approval of the Director and of the boards of directors 

of the Banks involved, merge with another Bank. 

‘‘(2) REGULATIONS REQUIRED.—The Director shall promulgate regulations establishing the conditions and procedures 

for the consideration and approval of any voluntary merger 

described in paragraph (1), including the procedures for Bank 

member approval.’’. 


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122 STAT. 2790 PUBLIC LAW 110–289—JULY 30, 2008 

SEC. 1210. AUTHORITY TO REDUCE DISTRICTS. 

Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 

1423) is amended— 

(1) by striking ‘‘As soon’’ and inserting ‘‘(a) IN GENERAL.— 

As soon’’; and 

(2) by adding at the end the following: 

‘‘(b) AUTHORITY TO REDUCE DISTRICTS.—Notwithstanding subsection (a), the number of districts may be reduced to a number 

less than 8— 

‘‘(1) pursuant to a voluntary merger between Banks, as 

approved pursuant to section 26(b); or 

‘‘(2) pursuant to a decision by the Director to liquidate 

a Bank pursuant to section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.’’. 

SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS. 

(a) TOTAL ASSET REQUIREMENT.—Paragraph (10) of section 2 

of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so 

redesignated by section 201(3) of this Act, is amended by striking 

‘‘$500,000,000’’ each place such term appears and inserting 

‘‘$1,000,000,000’’. 

(b) USE OF ADVANCES FOR COMMUNITY DEVELOPMENT ACTIVI- TIES.—Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 

1430(a)) is amended— 

(1) in paragraph (2)(B)— 

(A) by striking ‘‘and’’; and 

(B) by inserting ‘‘, and community development activities’’ before the period at the end; 

(2) in paragraph (3)(E), by inserting ‘‘or community development activities’’ after ‘‘agriculture,’’; and 

(3) in paragraph (6)— 

(A) by striking ‘‘and’’; and 

(B) by inserting ‘‘, and ‘community development activities’ ’’ before ‘‘shall’’. 

SEC. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS. 

Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 

1430) is amended— 

(1) in subsection (j)(12)— 

(A) by striking subparagraph (C) and inserting the 

following: 

‘‘(C) REPORTS.—The Director shall annually report to 

the Committee on Banking, Housing, and Urban Affairs 

of the Senate and the Committee on Financial Services 

of the House of Representatives on the collateral pledged 

to the Banks, including an analysis of collateral by type 

and by Bank district.’’; and 

(B) by adding at the end the following: 

‘‘(D) SUBMISSION TO CONGRESS.—The Director shall 

submit the reports under subparagraphs (A) and (C) to 

the Committee on Banking, Housing, and Urban Affairs 

of the Senate and the Committee on Financial Services 

of the House of Representatives, not later than 180 days 

after the date of enactment of the Federal Housing Finance 

Regulatory Reform Act of 2008.’’; and 

(2) by adding at the end the following: 

‘‘(k) PUBLIC USE DATABASE.— 

Deadline. 


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‘‘(1) DATA.—Each Federal Home Loan Bank shall provide 

to the Director, in a form determined by the Director, census 

tract level data relating to mortgages purchased, if any, 

including— 

‘‘(A) data consistent with that reported under section 

1323 of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992; 

‘‘(B) data elements required to be reported under the 

Home Mortgage Disclosure Act of 1975; and 

‘‘(C) any other data elements that the Director considers appropriate. 

‘‘(2) PUBLIC USE DATABASE.— ‘‘(A) IN GENERAL.—The Director shall make available 

to the public, in a form that is useful to the public 

(including forms accessible electronically), and to the extent 

practicable, the data provided to the Director under paragraph (1). 

‘‘(B) PROPRIETARY INFORMATION.—Not withstanding 

subparagraph (A), the Director may not provide public 

access to, or disclose to the public, any information required 

to be submitted under this subsection that the Director 

determines is proprietary or that would provide personally 

identifiable information and that is not otherwise publicly 

accessible through other forms, unless the Director determines that it is in the public interest to provide such 

information.’’. 

SEC. 1213. SEMIANNUAL REPORTS. 

Section 21B of the Federal Home Loan Bank Act is amended 

in subsection (f)(2)(C), by adding at the end the following: 

‘‘(v) SEMIANNUAL REPORTS.—The Director shall 

report semiannually to the Committee on Banking, 

Housing, and Urban Affairs of the Senate and the 

Committee on Financial Services of the House of Representatives on the projected date for the completion 

of contributions required by this section.’’. 

SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME 

LOAN BANK. 

Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 

1446) is amended by adding at the end the following: ‘‘At least 

30 days prior to liquidating or reorganizing any Bank under this 

section, the Director shall notify the Bank of its determination 

and the facts and circumstances upon which such determination 

is based. The Bank may contest that determination in a hearing 

before the Director, in which all issues shall be determined on 

the record pursuant to section 554 of title 5, United States Code.’’. 

SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION 

OF ACQUIRED MEMBER ASSETS. 

(a) STUDY.—The Director shall conduct a study on securitization 

of home mortgage loans purchased or to be purchased from member 

financial institutions under the Acquired Member Assets programs. 

In conducting the study, the Director shall establish a process 

for the formal submission of comments. 

(b) ELEMENTS.—The study shall encompass— 

(1) the benefits and risks associated with securitization 

of Acquired Member Assets; 

Records. 

Deadline. 

Notification. 

12 USC 1441b. 


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(2) the potential impact of securitization upon liquidity 

in the mortgage and broader credit markets; 

(3) the ability of the Federal Home Loan Bank or Banks 

in question to manage the risks associated with such a program; 

(4) the impact of such a program on the existing activities 

of the Banks, including their mortgage portfolios and advances; 

and 

(5) the joint and several liability of the Banks and the 

cooperative structure of the Federal Home Loan Bank System. 

(c) CONSULTATIONS.—In conducting the study under this section, the Director shall consult with the Federal Home Loan Banks, 

the Banks’ fiscal agent, representatives of the mortgage lending 

industry, practitioners in the structured finance field, and other 

experts as needed. 

(d) REPORT.—Not later than 1 year after the date of enactment 

of this Act, the Director shall submit a report to Congress on 

the results of the study conducted under subsection (a), including 

policy recommendations based on the analysis of the Director of 

the feasibility of mortgage-backed securities issuance by a Federal 

Home Loan Bank or Banks and the risks and benefits associated 

with such program or programs. 

(e) DEFINITIONS.—As used in this section, the terms ‘‘member’’, 

‘‘Bank’’, and ‘‘Federal Home Loan Bank’’ have the same meanings 

as in section 2 of the Federal Home Loan Bank Act (12 U.S.C. 

1422). 

SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS. 

(a) RIGHT TO FINANCIAL PRIVACY ACT OF 1978.—Section 1113(o) 

of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) 

is amended— 

(1) by striking ‘‘Federal Housing Finance Board’’ and 

inserting ‘‘Federal Housing Finance Agency’’; and 

(2) by striking ‘‘Federal Housing Finance Board’s’’ and 

inserting ‘‘Federal Housing Finance Agency’s’’. 

(b) RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY

IMPROVEMENT ACT OF 1994.—Section 117(e) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 

U.S.C. 4716(e)) is amended by striking ‘‘Federal Housing Finance 

Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 

(c) TITLE 18, UNITED STATES CODE.—Title 18, United States 

Code, is amended by striking ‘‘Federal Housing Finance Board’’ 

each place such term appears in each of sections 212, 657, 1006, 

and 1014, and inserting ‘‘Federal Housing Finance Agency’’. 

(d) MAHRA ACT OF 1997.—Section 517(b)(4) of the Multifamily 

Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 

1437f note) is amended by striking ‘‘Federal Housing Finance 

Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 

(e) TITLE 44, UNITED STATES CODE.—Section 3502(5) of title 

44, United States Code, is amended by striking ‘‘Federal Housing 

Finance Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 

(f) ACCESS TO LOCAL TV ACT OF 2000.—Section 1004(d)(2)(D)(iii) 

of the Launching Our Communities’ Access to Local Television 

Act of 2000 (47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking 

‘‘Office of Federal Housing Enterprise Oversight, the Federal 

Housing Finance Board’’ and inserting ‘‘Federal Housing Finance 

Agency’’. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2793 

(g) FIRREA.—Section 1216 of the Financial Institutions 

Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 1833e) 

is amended— 

(1) in subsection (a), by striking paragraph (3) and inserting 

the following: 

‘‘(3) the Federal Housing Finance Agency;’’; 

(2) in subsection (b), by striking ‘‘Federal National Mortgage Association’’ and inserting ‘‘Federal Home Loan Banks, 

the Federal National Mortgage Association,’’; and 

(3) in subsection (c), by striking ‘‘Finance Board’’ and 

inserting ‘‘Finance Agency’’. 

SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK ADVANCES. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, the Director shall conduct a study and submit 

a report to the Committee on Banking, Housing, and Urban Affairs 

of the Senate and the Committee on Financial Services of the 

House or Representatives on the extent to which loans and securities used as collateral to support Federal Home Loan Bank advances 

are consistent with the interagency guidance on nontraditional 

mortgage products. 

(b) REQUIRED CONTENT.—The study required under subsection 

(a) shall— 

(1) consider and recommend any additional regulations, 

guidance, advisory bulletins, or other administrative actions 

necessary to ensure that the Federal Home Loan Banks are 

not supporting loans with predatory characteristics; and 

(2) include an opportunity for the public to comment on 

any recommendations made under paragraph (1). 

SEC. 1218. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR 

CERTAIN RESIDENTIAL MORTGAGE LOANS. 

Section 10(j)(2) of the Federal Home Loan Bank Act (12 U.S.C. 

1430(j)(2)) is amended— 

(1) in subparagraph (A), by striking ‘‘or’’ at the end; 

(2) in subparagraph (B), by striking the period at the 

end and inserting ‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(C) during the 2-year period beginning on the date 

of enactment of this subparagraph, use such percentage 

as the Director may by regulation establish of any subsidized advances set aside to finance homeownership under 

subparagraph (A) to refinance loans that are secured by 

a first mortgage on a primary residence of any family 

having an income at or below 80 percent of the median 

income for the area.’’. 

Effective date. 

Public comment. 

Recommendations. 

Deadline. 


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122 STAT. 2794 PUBLIC LAW 110–289—JULY 30, 2008 

TITLE III—TRANSFER OF FUNCTIONS, 

PERSONNEL, AND PROPERTY OF 

OFHEO AND THE FEDERAL HOUSING 

FINANCE BOARD 

Subtitle A—OFHEO 

SEC. 1301. ABOLISHMENT OF OFHEO. 

(a) IN GENERAL.—Effective at the end of the 1-year period 

beginning on the date of enactment of this Act, the Office of Federal 

Housing Enterprise Oversight of the Department of Housing and 

Urban Development and the positions of the Director and Deputy 

Director of such Office are abolished. 

(b) DISPOSITION OF AFFAIRS.—During the 1-year period beginning on the date of enactment of this Act, the Director of the 

Office of Federal Housing Enterprise Oversight, solely for the purpose of winding up the affairs of the Office of Federal Housing 

Enterprise Oversight— 

(1) shall manage the employees of such Office and provide 

for the payment of the compensation and benefits of any such 

employee which accrue before the effective date of the transfer 

of such employee under section 1303; and 

(2) may take any other action necessary for the purpose 

of winding up the affairs of the Office. 

(c) STATUS OF EMPLOYEES BEFORE TRANSFER.—The amendments made by title I and the abolishment of the Office of Federal 

Housing Enterprise Oversight under subsection (a) of this section 

may not be construed to affect the status of any employee of 

such Office as an employee of an agency of the United States 

for purposes of any other provision of law before the effective 

date of the transfer of any such employee under section 1303. 

(d) USE OF PROPERTY AND SERVICES.— 

(1) PROPERTY.—The Director may use the property of the 

Office of Federal Housing Enterprise Oversight to perform functions which have been transferred to the Director for such 

time as is reasonable to facilitate the orderly transfer of functions transferred under any other provision of this Act or any 

amendment made by this Act to any other provision of law. 

(2) AGENCY SERVICES.—Any agency, department, or other 

instrumentality of the United States, and any successor to 

any such agency, department, or instrumentality, which was 

providing supporting services to the Office of Federal Housing 

Enterprise Oversight before the expiration of the period under 

subsection (a) in connection with functions that are transferred 

to the Director shall— 

(A) continue to provide such services, on a reimbursable 

basis, until the transfer of such functions is complete; and 

(B) consult with any such agency to coordinate and 

facilitate a prompt and reasonable transition. 

(e) CONTINUATION OF SERVICES.—The Director may use the 

services of employees and other personnel of the Office of Federal 

Housing Enterprise Oversight, on a reimbursable basis, to perform 

functions which have been transferred to the Director for such 

time as is reasonable to facilitate the orderly transfer of functions 

Effective date. 

Effective date. 

12 USC 4511 

note. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2795 

pursuant to any other provision of this Act or any amendment 

made by this Act to any other provision of law. 

(f) SAVINGS PROVISIONS.— 

(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT

AFFECTED.—Subsection (a) shall not affect the validity of any 

right, duty, or obligation of the United States, the Director 

of the Office of Federal Housing Enterprise Oversight, or any 

other person, which— 

(A) arises under— 

(i) the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992; 

(ii) the Federal National Mortgage Association 

Charter Act; 

(iii) the Federal Home Loan Mortgage Corporation 

Act; or 

(iv) any other provision of law applicable with 

respect to such Office; and 

(B) existed on the day before the date of abolishment 

under subsection (a). 

(2) CONTINUATION OF SUITS.—No action or other proceeding 

commenced by or against the Director of the Office of Federal 

Housing Enterprise Oversight in connection with functions that 

are transferred to the Director of the Federal Housing Finance 

Agency shall abate by reason of the enactment of this Act, 

except that the Director of the Federal Housing Finance Agency 

shall be substituted for the Director of the Office of Federal 

Housing Enterprise Oversight as a party to any such action 

or proceeding. 

SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS. 

(a) IN GENERAL.—All regulations, orders, and determinations 

described in subsection (b) shall remain in effect according to the 

terms of such regulations, orders, and determinations, and shall 

be enforceable by or against the Director or the Secretary of Housing 

and Urban Development, as the case may be, until modified, terminated, set aside, or superseded in accordance with applicable law 

by the Director or the Secretary, as the case may be, any court 

of competent jurisdiction, or operation of law. 

(b) APPLICABILITY.—A regulation, order, or determination is 

described in this subsection if it— 

(1) was issued, made, prescribed, or allowed to become 

effective by— 

(A) the Office of Federal Housing Enterprise Oversight; 

(B) the Secretary of Housing and Urban Development, 

and relates to the authority of the Secretary under— 

(i) the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992; 

(ii) the Federal National Mortgage Association 

Charter Act, with respect to the Federal National Mortgage Association; or 

(iii) the Federal Home Loan Mortgage Corporation 

Act, with respect to the Federal Home Loan Mortgage 

Corporation; or 

(C) a court of competent jurisdiction, and relates to 

functions transferred by this Act; and 

(2) is in effect on the effective date of the abolishment 

under section 1301(a). 

12 USC 4511 

note. 


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122 STAT. 2796 PUBLIC LAW 110–289—JULY 30, 2008 

SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO. 

(a) TRANSFER.—Each employee of the Office of Federal Housing 

Enterprise Oversight shall be transferred to the Agency for employment, not later than the effective date of the abolishment under 

section 1301(a), and such transfer shall be deemed a transfer of 

function for purposes of section 3503 of title 5, United States 

Code. 

(b) GUARANTEED POSITIONS.— (1) IN GENERAL.—Each employee transferred under subsection (a) shall be guaranteed a position with the same status, 

tenure, grade, and pay as that held on the day immediately 

preceding the transfer. 

(2) NO INVOLUNTARY SEPARATION OR REDUCTION.—An 

employee transferred under subsection (a) holding a permanent 

position on the day immediately preceding the transfer may 

not be involuntarily separated or reduced in grade or compensation during the 12-month period beginning on the date of 

transfer, except for cause, or, in the case of a temporary 

employee, separated in accordance with the terms of the 

appointment of the employee. 

(c) APPOINTMENT AUTHORITY FOR EXCEPTED AND SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

(1) IN GENERAL.—In the case of an employee occupying 

a position in the excepted service or the Senior Executive 

Service, any appointment authority established under law or 

by regulations of the Office of Personnel Management for filling 

such position shall be transferred, subject to paragraph (2). 

(2) DECLINE OF TRANSFER.—The Director may decline a 

transfer of authority under paragraph (1) to the extent that 

such authority relates to— 

(A) a position excepted from the competitive service 

because of its confidential, policymaking, policy-determining, or policy-advocating character; or 

(B) a noncareer position in the Senior Executive Service 

(within the meaning of section 3132(a)(7) of title 5, United 

States Code). 

(d) REORGANIZATION.—If the Director determines, after the end 

of the 1-year period beginning on the effective date of the abolishment under section 1301(a), that a reorganization of the combined 

workforce is required, that reorganization shall be deemed a major 

reorganization for purposes of affording affected employee retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 

States Code. 

(e) EMPLOYEE BENEFIT PROGRAMS.— 

(1) IN GENERAL.—Any employee of the Office of Federal 

Housing Enterprise Oversight accepting employment with the 

Agency as a result of a transfer under subsection (a) may 

retain, for 12 months after the date on which such transfer 

occurs, membership in any employee benefit program of the 

Agency or the Office of Federal Housing Enterprise Oversight 

of the Department of Housing and Urban Development, as 

applicable, including insurance, to which such employee belongs 

on the date of the abolishment under section 1301(a), if— 

(A) the employee does not elect to give up the benefit 

or membership in the program; and 

(B) the benefit or program is continued by the Director 

of the Federal Housing Finance Agency. 

Effective date. 

Effective date. 

Deadline. 

12 USC 4511 

note. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2797 

(2) COST DIFFERENTIAL.— (A) IN GENERAL.—The difference in the costs between 

the benefits which would have been provided by the Office 

of Federal Housing Enterprise Oversight and those provided by this section shall be paid by the Director. 

(B) HEALTH INSURANCE.—If any employee elects to give 

up membership in a health insurance program or the health 

insurance program is not continued by the Director, the 

employee shall be permitted to select an alternate Federal 

health insurance program not later than 30 days after 

the date of such election or notice, without regard to any 

other regularly scheduled open season. 

SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES. 

Upon the effective date of its abolishment under section 1301(a), 

all property of the Office of Federal Housing Enterprise Oversight 

shall transfer to the Agency. 

Subtitle B—Federal Housing Finance 

Board 

SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD. 

(a) IN GENERAL.—Effective at the end of the 1-year period 

beginning on the date of enactment of this Act, the Federal Housing 

Finance Board (in this subtitle referred to as the ‘‘Board’’) is abolished. 

(b) DISPOSITION OF AFFAIRS.—During the 1-year period beginning on the date of enactment of this Act, the Board, solely for 

the purpose of winding up the affairs of the Board— 

(1) shall manage the employees of the Board and provide 

for the payment of the compensation and benefits of any such 

employee which accrue before the effective date of the transfer 

of such employee under section 1313; and 

(2) may take any other action necessary for the purpose 

of winding up the affairs of the Board. 

(c) STATUS OF EMPLOYEES BEFORE TRANSFER.—The amendments made by titles I and II and the abolishment of the Board 

under subsection (a) may not be construed to affect the status 

of any employee of the Board as an employee of an agency of 

the United States for purposes of any other provision of law before 

the effective date of the transfer of any such employee under section 

1313. 

(d) USE OF PROPERTY AND SERVICES.— 

(1) PROPERTY.—The Director may use the property of the 

Board to perform functions which have been transferred to 

the Director, for such time as is reasonable to facilitate the 

orderly transfer of functions transferred under any other provision of this Act or any amendment made by this Act to any 

other provision of law. 

(2) AGENCY SERVICES.—Any agency, department, or other 

instrumentality of the United States, and any successor to 

any such agency, department, or instrumentality, which was 

providing supporting services to the Board before the expiration 

of the 1-year period under subsection (a) in connection with 

functions that are transferred to the Director shall— 

Deadline. 

Effective date. 

Effective date. 

Termination 

date. 

12 USC 4511 

note. 

12 USC 4511 

note. 

Deadline. 


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122 STAT. 2798 PUBLIC LAW 110–289—JULY 30, 2008 

(A) continue to provide such services, on a reimbursable 

basis, until the transfer of such functions is complete; and 

(B) consult with any such agency to coordinate and 

facilitate a prompt and reasonable transition. 

(e) CONTINUATION OF SERVICES.—The Director may use the 

services of employees and other personnel of the Board, on a 

reimbursable basis, to perform functions which have been transferred to the Director for such time as is reasonable to facilitate 

the orderly transfer of functions pursuant to any other provision 

of this Act or any amendment made by this Act to any other 

provision of law. 

(f) SAVINGS PROVISIONS.— (1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT

AFFECTED.—Subsection (a) shall not affect the validity of any 

right, duty, or obligation of the United States, a member of 

the Board, or any other person, which— 

(A) arises under the Federal Home Loan Bank Act, 

or any other provision of law applicable with respect to 

the Board; and 

(B) existed on the day before the effective date of 

the abolishment under subsection (a). 

(2) CONTINUATION OF SUITS.—No action or other proceeding 

commenced by or against the Board in connection with functions 

that are transferred under this Act to the Director shall abate 

by reason of the enactment of this Act, except that the Director 

shall be substituted for the Board or any member thereof as 

a party to any such action or proceeding. 

SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS. 

(a) IN GENERAL.—All regulations, orders, determinations, and 

resolutions described under subsection (b) shall remain in effect 

according to the terms of such regulations, orders, determinations, 

and resolutions, and shall be enforceable by or against the Director 

until modified, terminated, set aside, or superseded in accordance 

with applicable law by the Director, any court of competent jurisdiction, or operation of law. 

(b) APPLICABILITY.—A regulation, order, determination, or resolution is described under this subsection if it— 

(1) was issued, made, prescribed, or allowed to become 

effective by— 

(A) the Board; or 

(B) a court of competent jurisdiction, and relates to 

functions transferred by this Act; and 

(2) is in effect on the effective date of the abolishment 

under section 1311(a). 

SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL 

HOUSING FINANCE BOARD. 

(a) TRANSFER.—Each employee of the Board shall be transferred 

to the Agency for employment, not later than the effective date 

of the abolishment under section 1311(a), and such transfer shall 

be deemed a transfer of function for purposes of section 3503 

of title 5, United States Code. 

(b) GUARANTEED POSITIONS.— 

(1) IN GENERAL.—Each employee transferred under subsection (a) shall be guaranteed a position with the same status, 

tenure, grade, and pay as that held on the day immediately 

preceding the transfer. 

Deadline. 

12 USC 4511 

note. 

Regulations. 

Orders. 

12 USC 4511 

note. 


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(2) NO INVOLUNTARY SEPARATION OR REDUCTION.—An 

employee holding a permanent position on the day immediately 

preceding the transfer may not be involuntarily separated or 

reduced in grade or compensation during the 12-month period 

beginning on the date of transfer, except for cause, or, if the 

employee is a temporary employee, separated in accordance 

with the terms of the appointment of the employee. 

(c) APPOINTMENT AUTHORITY FOR EXCEPTED EMPLOYEES.— 

(1) IN GENERAL.—In the case of an employee occupying 

a position in the excepted service, any appointment authority 

established under law or by regulations of the Office of Personnel Management for filling such position shall be transferred, subject to paragraph (2). 

(2) DECLINE OF TRANSFER.—The Director may decline a 

transfer of authority under paragraph (1), to the extent that 

such authority relates to a position excepted from the competitive service because of its confidential, policymaking, policydetermining, or policy-advocating character. 

(d) REORGANIZATION.—If the Director determines, after the end 

of the 1-year period beginning on the effective date of the abolishment under section 1311(a), that a reorganization of the combined 

workforce is required, that reorganization shall be deemed a major 

reorganization for purposes of affording affected employee retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 

States Code. 

(e) EMPLOYEE BENEFIT PROGRAMS.— 

(1) IN GENERAL.—Any employee of the Board accepting 

employment with the Agency as a result of a transfer under 

subsection (a) may retain, for 12 months after the date on 

which such transfer occurs, membership in any employee benefit program of the Agency or the Board, as applicable, including 

insurance, to which such employee belongs on the effective 

date of the abolishment under section 1311(a) if— 

(A) the employee does not elect to give up the benefit 

or membership in the program; and 

(B) the benefit or program is continued by the Director. 

(2) COST DIFFERENTIAL.— 

(A) IN GENERAL.—The difference in the costs between 

the benefits which would have been provided by the Board 

and those provided by this section shall be paid by the 

Director. 

(B) HEALTH INSURANCE.—If any employee elects to give 

up membership in a health insurance program or the health 

insurance program is not continued by the Director, the 

employee shall be permitted to select an alternate Federal 

health insurance program not later than 30 days after 

the date of such election or notice, without regard to any 

other regularly scheduled open season. 

SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES. 

Upon the effective date of the abolishment under section 

1311(a), all property of the Board shall transfer to the Agency. 

Effective date. 

12 USC 4511 

note. 

Deadline. 

Effective date. 


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122 STAT. 2800 PUBLIC LAW 110–289—JULY 30, 2008 

TITLE IV—HOPE FOR HOMEOWNERS 

SEC. 1401. SHORT TITLE. 

This title may be cited as the ‘‘HOPE for Homeowners Act 

of 2008’’. 

SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM. 

(a) ESTABLISHMENT.—Title II of the National Housing Act (12 

U.S.C. 1707 et seq.) is amended by adding at the end the following: 

‘‘SEC. 257. HOPE FOR HOMEOWNERS PROGRAM. 

‘‘(a) ESTABLISHMENT.—There is established in the Federal 

Housing Administration a HOPE for Homeowners Program. 

‘‘(b) PURPOSE.—The purpose of the HOPE for Homeowners Program is— 

‘‘(1) to create an FHA program, participation in which 

is voluntary on the part of homeowners and existing loan 

holders to insure refinanced loans for distressed borrowers to 

support long-term, sustainable homeownership; 

‘‘(2) to allow homeowners to avoid foreclosure by reducing 

the principle balance outstanding, and interest rate charged, 

on their mortgages; 

‘‘(3) to help stabilize and provide confidence in mortgage 

markets by bringing transparency to the value of assets based 

on mortgage assets; 

‘‘(4) to target mortgage assistance under this section to 

homeowners for their principal residence; 

‘‘(5) to enhance the administrative capacity of the FHA 

to carry out its expanded role under the HOPE for Homeowners 

Program; 

‘‘(6) to ensure the HOPE for Homeowners Program remains 

in effect only for as long as is necessary to provide stability 

to the housing market; and 

‘‘(7) to provide servicers of delinquent mortgages with additional methods and approaches to avoid foreclosure. 

‘‘(c) ESTABLISHMENT AND IMPLEMENTATION OF PROGRAM

REQUIREMENTS.— ‘‘(1) DUTIES OF THE BOARD.—In order to carry out the 

purposes of the HOPE for Homeowners Program, the Board 

shall— 

‘‘(A) establish requirements and standards for the program; and 

‘‘(B) prescribe such regulations and provide such guidance as may be necessary or appropriate to implement 

such requirements and standards. 

‘‘(2) DUTIES OF THE SECRETARY.—In carrying out any of 

the program requirements or standards established under paragraph (1), the Secretary may issue such interim guidance and 

mortgagee letters as the Secretary determines necessary or 

appropriate. 

‘‘(d) INSURANCE OF MORTGAGES.—The Secretary is authorized 

upon application of a mortgagee to make commitments to insure 

or to insure any eligible mortgage that has been refinanced in 

a manner meeting the requirements under subsection (e). 

‘‘(e) REQUIREMENTS OF INSURED MORTGAGES.—To be eligible 

for insurance under this section, a refinanced eligible mortgage 

shall comply with all of the following requirements: 

Regulations. 

Standards. 

12 USC 

1715z–23. 

12 USC 1701 

note. 


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‘‘(1) LACK OF CAPACITY TO PAY EXISTING MORTGAGE.— ‘‘(A) BORROWER CERTIFICATION.— ‘‘(i) IN GENERAL.—The mortgagor shall provide certification to the Secretary that the mortgagor has not 

intentionally defaulted on the mortgage or any other 

debt, and has not knowingly, or willfully and with 

actual knowledge, furnished material information 

known to be false for the purpose of obtaining any 

eligible mortgage. 

‘‘(ii) PENALTIES.— ‘‘(I) FALSE STATEMENT.—Any certification filed 

pursuant to clause (i) shall contain an acknowledgment that any willful false statement made in 

such certification is punishable under section 1001, 

of title 18, United States Code, by fine or imprisonment of not more than 5 years, or both. 

‘‘(II) LIABILITY FOR REPAYMENT.—The mortgagor shall agree in writing that the mortgagor 

shall be liable to repay to the Federal Housing 

Administration any direct financial benefit 

achieved from the reduction of indebtedness on 

the existing mortgage or mortgages on the residence refinanced under this section derived from 

misrepresentations made in the certifications and 

documentation required under this subparagraph, 

subject to the discretion of the Secretary. 

‘‘(B) CURRENT BORROWER DEBT-TO-INCOME RATIO.—As 

of March 1, 2008, the mortgagor shall have had a ratio 

of mortgage debt to income, taking into consideration all 

existing mortgages of that mortgagor at such time, greater 

than 31 percent (or such higher amount as the Board 

determines appropriate). 

‘‘(2) DETERMINATION OF PRINCIPAL OBLIGATION AMOUNT.— 

The principal obligation amount of the refinanced eligible mortgage to be insured shall— 

‘‘(A) be determined by the reasonable ability of the 

mortgagor to make his or her mortgage payments, as such 

ability is determined by the Secretary pursuant to section 

203(b)(4) or by any other underwriting standards established by the Board; and 

‘‘(B) not exceed 90 percent of the appraised value of 

the property to which such mortgage relates. 

‘‘(3) REQUIRED WAIVER OF PREPAYMENT PENALTIES AND

FEES.—All penalties for prepayment or refinancing of the 

eligible mortgage, and all fees and penalties related to default 

or delinquency on the eligible mortgage, shall be waived or 

forgiven. 

‘‘(4) EXTINGUISHMENT OF SUBORDINATE LIENS.— 

‘‘(A) REQUIRED AGREEMENT.—All holders of outstanding 

mortgage liens on the property to which the eligible mortgage relates shall agree to accept the proceeds of the 

insured loan as payment in full of all indebtedness under 

the eligible mortgage, and all encumbrances related to 

such eligible mortgage shall be removed. The Secretary 

may take such actions, subject to standards established 

by the Board under subparagraph (B), as may be necessary 

and appropriate to facilitate coordination and agreement 

Records. 


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between the holders of the existing senior mortgage and 

any existing subordinate mortgages, taking into consideration the subordinate lien status of such subordinate mortgages. 

‘‘(B) SHARED APPRECIATION.— 

‘‘(i) IN GENERAL.—The Board shall establish standards and policies that will allow for the payment to 

the holder of any existing subordinate mortgage of 

a portion of any future appreciation in the property 

secured by such eligible mortgage that is owed to the 

Secretary pursuant to subsection (k). 

‘‘(ii) FACTORS.—In establishing the standards and 

policies required under clause (i), the Board shall take 

into consideration— 

‘‘(I) the status of any subordinate mortgage; 

‘‘(II) the outstanding principal balance of and 

accrued interest on the existing senior mortgage 

and any outstanding subordinate mortgages; 

‘‘(III) the extent to which the current appraised 

value of the property securing a subordinate mortgage is less than the outstanding principal balance 

and accrued interest on any other liens that are 

senior to such subordinate mortgage; and 

‘‘(IV) such other factors as the Board determines to be appropriate. 

‘‘(C) VOLUNTARY PROGRAM.—This paragraph may not 

be construed to require any holder of any existing mortgage 

to participate in the program under this section generally, 

or with respect to any particular loan. 

‘‘(5) TERM OF MORTGAGE.—The refinanced eligible mortgage 

to be insured shall— 

‘‘(A) bear interest at a single rate that is fixed for 

the entire term of the mortgage; and 

‘‘(B) have a maturity of not less than 30 years from 

the date of the beginning of amortization of such refinanced 

eligible mortgage. 

‘‘(6) MAXIMUM LOAN AMOUNT.—The principal obligation 

amount of the eligible mortgage to be insured shall not exceed 

132 percent of the dollar amount limitation in effect for 2007 

under section 305(a)(2) of the Federal Home Loan Mortgage 

Corporation Act (12 U.S.C. 1454(a)(2)) for a property of the 

applicable size. 

‘‘(7) PROHIBITION ON SECOND LIENS.—A mortgagor may not 

grant a new second lien on the mortgaged property during 

the first 5 years of the term of the mortgage insured under 

this section, except as the Board determines to be necessary 

to ensure the maintenance of property standards; and provided 

that such new outstanding liens (A) do not reduce the value 

of the Government’s equity in the borrower’s home; and (B) 

when combined with the mortgagor’s existing mortgage indebtedness, do not exceed 95 percent of the home’s appraised value 

at the time of the new second lien. 

‘‘(8) APPRAISALS.—Any appraisal conducted in connection 

with a mortgage insured under this section shall— 

‘‘(A) be based on the current value of the property; 

Standards. 

Policies. 


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‘‘(B) be conducted in accordance with title XI of the 

Financial Institutions Reform, Recovery, and Enforcement 

Act of 1989 (12 U.S.C. 3331 et seq.); 

‘‘(C) be completed by an appraiser who meets the competency requirements of the Uniform Standards of Professional Appraisal Practice; 

‘‘(D) be wholly consistent with the appraisal standards, 

practices, and procedures under section 202(e) of this Act 

that apply to all loans insured under this Act; and 

‘‘(E) comply with the requirements of subsection (g) 

of this section (relating to appraisal independence). 

‘‘(9) DOCUMENTATION AND VERIFICATION OF INCOME.—In 

complying with the FHA underwriting requirements under the 

HOPE for Homeowners Program under this section, the mortgagee shall document and verify the income of the mortgagor 

or non-filing status by procuring (A) an income tax return 

transcript of the income tax returns of the mortgagor, or(B) 

a copy of the income tax returns from the Internal Revenue 

Service, for the two most recent years for which the filing 

deadline for such years has passed and by any other method, 

in accordance with procedures and standards that the Board 

shall establish. 

‘‘(10) MORTGAGE FRAUD.—The mortgagor shall not have 

been convicted under Federal or State law for fraud during 

the 10-year period ending upon the insurance of the mortgage 

under this section. 

‘‘(11) PRIMARY RESIDENCE.—The mortgagor shall provide 

documentation satisfactory in the determination of the Secretary to prove that the residence covered by the mortgage 

to be insured under this section is occupied by the mortgagor 

as the primary residence of the mortgagor, and that such residence is the only residence in which the mortgagor has any 

present ownership interest. 

‘‘(f) STUDY OF AUCTION OR BULK REFINANCE PROGRAM.— 

‘‘(1) STUDY.—The Board shall conduct a study of the need 

for and efficacy of an auction or bulk refinancing mechanism 

to facilitate refinancing of existing residential mortgages that 

are at risk for foreclosure into mortgages insured under this 

section. The study shall identify and examine various options 

for mechanisms under which lenders and servicers of such 

mortgages may make bids for forward commitments for such 

insurance in an expedited manner. 

‘‘(2) CONTENT.— 

‘‘(A) ANALYSIS.—The study required under paragraph 

(1) shall analyze— 

‘‘(i) the feasibility of establishing a mechanism that 

would facilitate the more rapid refinancing of borrowers at risk of foreclosure into performing mortgages 

insured under this section; 

‘‘(ii) whether such a mechanism would provide an 

effective and efficient mechanism to reduce foreclosures 

on qualified existing mortgages; 

‘‘(iii) whether the use of an auction or bulk 

refinance program is necessary to stabilize the housing 

market and reduce the impact of turmoil in that 

market on the economy of the United States; 

Procedures. 

Standards. 


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‘‘(iv) whether there are other mechanisms or 

authority that would be useful to reduce foreclosure; 

and 

‘‘(v) and any other factors that the Board considers 

relevant. 

‘‘(B) DETERMINATIONS.—To the extent that the Board 

finds that a facility of the type described in subparagraph 

(A) is feasible and useful, the study shall— 

‘‘(i) determine and identify any additional 

authority or resources needed to establish and operate 

such a mechanism; 

‘‘(ii) determine whether there is a need for additional authority with respect to the loan underwriting 

criteria established in this section or with respect to 

eligibility of participating borrowers, lenders, or 

holders of liens; 

‘‘(iii) determine whether such underwriting criteria 

should be established on the basis of individual loans, 

in the aggregate, or otherwise to facilitate the goal 

of refinancing borrowers at risk of foreclosure into 

viable loans insured under this section. 

‘‘(3) REPORT.—Not later than the expiration of the 60- 

day period beginning on the date of the enactment of this 

section, the Board shall submit a report regarding the results 

of the study conducted under this subsection to the Committee 

on Financial Services of the House of Representatives and 

the Committee on Banking, Housing, and Urban Affairs of 

the Senate. The report shall include a detailed description 

of the analysis required under paragraph (2)(A) and of the 

determinations made pursuant to paragraph (2)(B), and shall 

include any other findings and recommendations of the Board 

pursuant to the study, including identifying various options 

for mechanisms described in paragraph (1). 

‘‘(g) APPRAISAL INDEPENDENCE.— 

‘‘(1) PROHIBITIONS ON INTERESTED PARTIES IN A REAL ESTATE

TRANSACTION.—No mortgage lender, mortgage broker, mortgage 

banker, real estate broker, appraisal management company, 

employee of an appraisal management company, nor any other 

person with an interest in a real estate transaction involving 

an appraisal in connection with a mortgage insured under 

this section shall improperly influence, or attempt to improperly 

influence, through coercion, extortion, collusion, compensation, 

instruction, inducement, intimidation, nonpayment for services 

rendered, or bribery, the development, reporting, result, or 

review of a real estate appraisal sought in connection with 

the mortgage. 

‘‘(2) CIVIL MONETARY PENALTIES.—The Secretary may 

impose a civil money penalty for any knowing and material 

violation of paragraph (1) under the same terms and conditions 

as are authorized in section 536(a) of this Act. 

‘‘(h) STANDARDS TO PROTECT AGAINST ADVERSE SELECTION.— ‘‘(1) IN GENERAL.—The Board shall, by rule or order, establish standards and policies to require the underwriter of the 

insured loan to provide such representations and warranties 

as the Board considers necessary or appropriate to enforce 

compliance with all underwriting and appraisal standards of 

the HOPE for Homeowners Program. 

Regulations. 

Orders. 


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‘‘(2) EXCLUSION FOR VIOLATIONS.—The Board shall prohibit 

the Secretary from paying insurance benefits to a mortgagee 

who violates the representations and warranties, as established 

under paragraph (1), or in any case in which a mortgagor 

fails to make the first payment on a refinanced eligible mortgage. 

‘‘(3) OTHER AUTHORITY.—The Board may establish such 

other standards or policies as necessary to protect against 

adverse selection, including requiring loans identified by the 

Secretary as higher risk loans to demonstrate payment performance for a reasonable period of time prior to being insured 

under the program. 

‘‘(i) PREMIUMS.—For each refinanced eligible mortgage insured 

under this section, the Secretary shall establish and collect— 

‘‘(1) at the time of insurance, a single premium payment 

in an amount equal to 3 percent of the amount of the original 

insured principal obligation of the refinanced eligible mortgage, 

which shall be paid from the proceeds of the mortgage being 

insured under this section, through the reduction of the amount 

of indebtedness that existed on the eligible mortgage prior 

to refinancing; and 

‘‘(2) in addition to the premium required under paragraph 

(1), an annual premium in an amount equal to 1.5 percent 

of the amount of the remaining insured principal balance of 

the mortgage. 

‘‘(j) ORIGINATION FEES AND INTEREST RATE.—The Board shall 

establish— 

‘‘(1) a reasonable limitation on origination fees for 

refinanced eligible mortgages insured under this section; and 

‘‘(2) procedures to ensure that interest rates on such mortgages shall be commensurate with market rate interest rates 

on such types of loans. 

‘‘(k) EQUITY AND APPRECIATION.— 

‘‘(1) FIVE-YEAR PHASE-IN FOR EQUITY AS A RESULT OF SALE

OR REFINANCING.—For each eligible mortgage insured under 

this section, the Secretary and the mortgagor of such mortgage 

shall, upon any sale or disposition of the property to which 

such mortgage relates, or upon the subsequent refinancing 

of such mortgage, be entitled to the following with respect 

to any equity created as a direct result of such sale or refinancing: 

‘‘(A) If such sale or refinancing occurs during the period 

that begins on the date that such mortgage is insured 

and ends 1 year after such date of insurance, the Secretary 

shall be entitled to 100 percent of such equity. 

‘‘(B) If such sale or refinancing occurs during the period 

that begins 1 year after such date of insurance and ends 

2 years after such date of insurance, the Secretary shall 

be entitled to 90 percent of such equity and the mortgagor 

shall be entitled to 10 percent of such equity. 

‘‘(C) If such sale or refinancing occurs during the period 

that begins 2 years after such date of insurance and ends 

3 years after such date of insurance, the Secretary shall 

be entitled to 80 percent of such equity and the mortgagor 

shall be entitled to 20 percent of such equity. 

‘‘(D) If such sale or refinancing occurs during the period 

that begins 3 years after such date of insurance and ends 

Effective dates. 


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4 years after such date of insurance, the Secretary shall 

be entitled to 70 percent of such equity and the mortgagor 

shall be entitled to 30 percent of such equity. 

‘‘(E) If such sale or refinancing occurs during the period 

that begins 4 years after such date of insurance and ends 

5 years after such date of insurance, the Secretary shall 

be entitled to 60 percent of such equity and the mortgagor 

shall be entitled to 40 percent of such equity. 

‘‘(F) If such sale or refinancing occurs during any period 

that begins 5 years after such date of insurance, the Secretary shall be entitled to 50 percent of such equity and 

the mortgagor shall be entitled to 50 percent of such equity. 

‘‘(2) APPRECIATION IN VALUE.—For each eligible mortgage 

insured under this section, the Secretary and the mortgagor 

of such mortgage shall, upon any sale or disposition of the 

property to which such mortgage relates, each be entitled to 

50 percent of any appreciation in value of the appraised value 

of such property that has occurred since the date that such 

mortgage was insured under this section. 

‘‘(l) ESTABLISHMENT OF HOPE FUND.— 

‘‘(1) IN GENERAL.—There is established in the Federal 

Housing Administration a revolving fund to be known as the 

Home Ownership Preservation Entity Fund, which shall be 

used by the Board for carrying out the mortgage insurance 

obligations under this section. 

‘‘(2) MANAGEMENT OF FUND.—The HOPE Fund shall be 

administered and managed by the Secretary, who shall establish reasonable and prudent criteria for the management and 

operation of any amounts in the HOPE Fund. 

‘‘(m) LIMITATION ON AGGREGATE INSURANCE AUTHORITY.—The 

aggregate original principal obligation of all mortgages insured 

under this section may not exceed $300,000,000,000. 

‘‘(n) REPORTS BY THE BOARD.—The Board shall submit monthly 

reports to the Congress identifying the progress of the HOPE for 

Homeowners Program, which shall contain the following information for each month: 

‘‘(1) The number of new mortgages insured under this 

section, including the location of the properties subject to such 

mortgages by census tract. 

‘‘(2) The aggregate principal obligation of new mortgages 

insured under this section. 

‘‘(3) The average amount by which the principle balance 

outstanding on mortgages insured this section was reduced. 

‘‘(4) The amount of premiums collected for insurance of 

mortgages under this section. 

‘‘(5) The claim and loss rates for mortgages insured under 

this section. 

‘‘(6) Any other information that the Board considers appropriate. 

‘‘(o) REQUIRED OUTREACH EFFORTS.—The Secretary shall carry 

out outreach efforts to ensure that homeowners, lenders, and the 

general public are aware of the opportunities for assistance available under this section. 

‘‘(p) ENHANCEMENT OF FHA CAPACITY.—Under the direction 

of the Board, the Secretary shall take such actions as may be 

necessary to— 


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‘‘(1) contract for the establishment of underwriting criteria, 

automated underwriting systems, pricing standards, and other 

factors relating to eligibility for mortgages insured under this 

section; 

‘‘(2) contract for independent quality reviews of underwriting, including appraisal reviews and fraud detection, of 

mortgages insured under this section or pools of such mortgages; and 

‘‘(3) increase personnel of the Department as necessary 

to process or monitor the processing of mortgages insured under 

this section. 

‘‘(q) GNMA COMMITMENT AUTHORITY.— 

‘‘(1) GUARANTEES.—The Secretary shall take such actions 

as may be necessary to ensure that securities based on and 

backed by a trust or pool composed of mortgages insured under 

this section are available to be guaranteed by the Government 

National Mortgage Association as to the timely payment of 

principal and interest. 

‘‘(2) GUARANTEE AUTHORITY.—To carry out the purposes 

of section 306 of the National Housing Act (12 U.S.C. 1721), 

the Government National Mortgage Association may enter into 

new commitments to issue guarantees of securities based on 

or backed by mortgages insured under this section, not 

exceeding $300,000,000,000. The amount of authority provided 

under the preceding sentence to enter into new commitments 

to issue guarantees is in addition to any amount of authority 

to make new commitments to issue guarantees that is provided 

to the Association under any other provision of law. 

‘‘(r) SUNSET.—The Secretary may not enter into any new 

commitment to insure any refinanced eligible mortgage, or newly 

insure any refinanced eligible mortgage pursuant to this section 

before October 1, 2008 or after September 30, 2011. 

‘‘(s) DEFINITIONS.—For purposes of this section, the following 

definitions shall apply: 

‘‘(1) APPROVED FINANCIAL INSTITUTION OR MORTGAGEE.— 

The term ‘approved financial institution or mortgagee’ means 

a financial institution or mortgagee approved by the Secretary 

under section 203 as responsible and able to service mortgages 

responsibly. 

‘‘(2) BOARD.—The term ‘Board’ means the Board of Directors of the HOPE for Homeowners Program. The Board shall 

be composed of the Secretary, the Secretary of the Treasury, 

the Chairperson of the Board of Governors of the Federal 

Reserve System, and the Chairperson of the Board of Directors 

of the Federal Deposit Insurance Corporation, or their designees. 

‘‘(3) ELIGIBLE MORTGAGE.—The term ‘eligible mortgage’ 

means a mortgage— 

‘‘(A) the mortgagor of which— 

‘‘(i) occupies such property as his or her principal 

residence; and 

‘‘(ii) cannot, subject to subsection (e)(1)(B) and such 

other standards established by the Board, afford his 

or her mortgage payments; and 

‘‘(B) originated on or before January 1, 2008. 


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‘‘(4) EXISTING SENIOR MORTGAGE.—The term ‘existing senior 

mortgage’ means, with respect to a mortgage insured under 

this section, the existing mortgage that has superior priority. 

‘‘(5) EXISTING SUBORDINATE MORTGAGE.—The term ‘existing 

subordinate mortgage’ means, with respect to a mortgage 

insured under this section, an existing mortgage that has 

subordinate priority to the existing senior mortgage. 

‘‘(6) HOPE FOR HOMEOWNERS PROGRAM.—The term ‘HOPE 

for Homeowners Program’ means the program established 

under this section. 

‘‘(7) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Housing and Urban Development, except where specifically 

provided otherwise. 

‘‘(t) REQUIREMENTS RELATED TO THE BOARD.— 

‘‘(1) COMPENSATION, ACTUAL, NECESSARY, AND TRANSPORTATION EXPENSES.— 

‘‘(A) FEDERAL EMPLOYEES.—A member of the Board 

who is an officer or employee of the Federal Government 

shall serve without additional pay (or benefits in the nature 

of compensation) for service as a member of the Board. 

‘‘(B) TRAVEL EXPENSES.—Members of the Board shall 

be entitled to receive travel expenses, including per diem 

in lieu of subsistence, equivalent to those set forth in 

subchapter I of chapter 57 of title 5, United States Code. 

‘‘(2) BYLAWS.—The Board may prescribe, amend, and repeal 

such bylaws as may be necessary for carrying out the functions 

of the Board. 

‘‘(3) QUORUM.—A majority of the Board shall constitute 

a quorum. 

‘‘(4) STAFF; EXPERTS AND CONSULTANTS.— 

‘‘(A) DETAIL OF GOVERNMENT EMPLOYEES.—Upon 

request of the Board, any Federal Government employee 

may be detailed to the Board without reimbursement, and 

such detail shall be without interruption or loss of civil 

service status or privilege. 

‘‘(B) EXPERTS AND CONSULTANTS.—The Board shall procure the services of experts and consultants as the Board 

considers appropriate. 

‘‘(u) RULE OF CONSTRUCTION RELATED TO VOLUNTARY NATURE

OF THE PROGRAM.—This section shall not be construed to require 

that any approved financial institution or mortgagee participate 

in any activity authorized under this section, including any activity 

related to the refinancing of an eligible mortgage. 

‘‘(v) RULE OF CONSTRUCTION RELATED TO INSURANCE OF MORTGAGES.—Except as otherwise provided for in this section or by 

action of the Board, the provisions and requirements of section 

203(b) shall apply with respect to the insurance of any eligible 

mortgage under this section. 

‘‘(w) HOPE BONDS.— 

‘‘(1) ISSUANCE AND REPAYMENT OF BONDS.—Notwithstanding section 504(b) of the Federal Credit Reform Act of 

1990 (2 U.S.C. 661d(b)), the Secretary of the Treasury shall— 

‘‘(A) subject to such terms and conditions as the Secretary of the Treasury deems necessary, issue Federal 

credit instruments, to be known as ‘HOPE Bonds’, that 

are callable at the discretion of the Secretary of the 


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Treasury and do not, in the aggregate, exceed the amount 

specified in subsection (m); 

‘‘(B) provide the subsidy amounts necessary for loan 

guarantees under the HOPE for Homeowners Program, 

not to exceed the amount specified in subsection (m), in 

accordance with the provisions of the Federal Credit Reform 

Act of 1990 (2 U.S.C. 661 et seq.), except as provided 

in this paragraph; and 

‘‘(C) use the proceeds from HOPE Bonds only to pay 

for the net costs to the Federal Government of the HOPE 

for Homeowners Program, including administrative costs. 

‘‘(2) REIMBURSEMENTS TO TREASURY.—Funds received 

pursuant to section 1338(b) of the Federal Housing Enterprises 

Regulatory Reform Act of 1992 shall be used to reimburse 

the Secretary of the Treasury for amounts borrowed under 

paragraph (1). 

‘‘(3) USE OF RESERVE FUND.—If the net cost to the Federal 

Government for the HOPE for Homeowners Program exceeds 

the amount of funds received under paragraph (2), remaining 

debts of the HOPE for Homeowners Program shall be paid 

from amounts deposited into the fund established by the Secretary under section 1337(e) of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992, remaining 

amounts in such fund to be used to reduce the National debt. 

‘‘(4) REDUCTION OF NATIONAL DEBT.—Amounts collected 

under the HOPE for Homeowners Program in accordance with 

subsections (i) and (k) in excess of the net cost to the Federal 

Government for such Program shall be used to reduce the 

National debt.’’. 

SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 

MORTGAGE LOANS. 

The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended 

by inserting after section 129 the following new section: 

‘‘SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 

MORTGAGES. 

‘‘(a) IN GENERAL.—Except as may be established in any investment contract between a servicer of pooled residential mortgages 

and an investor, a servicer of pooled residential mortgages— 

‘‘(1) owes any duty to maximize the net present value 

of the pooled mortgages in an investment to all investors and 

parties having a direct or indirect interest in such investment, 

not to any individual party or group of parties; and 

‘‘(2) shall be deemed to act in the best interests of all 

such investors and parties if the servicer agrees to or implements a modification or workout plan, including any modification or refinancing undertaken pursuant to the HOPE for 

Homeowners Act of 2008, for a residential mortgage or a class 

of residential mortgages that constitute a part or all of the 

pooled mortgages in such investment, provided that any mortgage so modified meets the following criteria: 

‘‘(A) Default on the payment of such mortgage has 

occurred or is reasonably foreseeable. 

‘‘(B) The property securing such mortgage is occupied 

by the mortgagor of such mortgage. 

‘‘(C) The anticipated recovery on the principal outstanding obligation of the mortgage under the modification 

15 USC 1639a. 


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or workout plan exceeds, on a net present value basis, 

the anticipated recovery on the principal outstanding 

obligation of the mortgage through foreclosure. 

‘‘(b) DEFINITION.—As used in this section, the term ‘servicer’ 

means the person responsible for servicing of a loan (including 

the person who makes or holds a loan if such person also services 

the loan).’’. 

SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS. 

Section 202(e) of the National Housing Act (12 U.S.C. 1708(e)) 

is amended by adding at the end the following: 

‘‘(5) ADDITIONAL APPRAISER STANDARDS.—Beginning on the 

date of enactment of the Federal Housing Finance Regulatory 

Reform Act of 2008, any appraiser chosen or approved to conduct appraisals for mortgages under this title shall— 

‘‘(A) be certified— 

‘‘(i) by the State in which the property to be 

appraised is located; or 

‘‘(ii) by a nationally recognized professional 

appraisal organization; and 

‘‘(B) have demonstrated verifiable education in the 

appraisal requirements established by the Federal Housing 

Administration under this subsection.’’. 

TITLE V—S.A.F.E. MORTGAGE 

LICENSING ACT 

SEC. 1501. SHORT TITLE. 

This title may be cited as the ‘‘Secure and Fair Enforcement 

for Mortgage Licensing Act of 2008’’ or ‘‘S.A.F.E. Mortgage Licensing 

Act of 2008’’. 

SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 

LICENSING SYSTEM AND REGISTRY. 

In order to increase uniformity, reduce regulatory burden, 

enhance consumer protection, and reduce fraud, the States, through 

the Conference of State Bank Supervisors and the American 

Association of Residential Mortgage Regulators, are hereby encouraged to establish a Nationwide Mortgage Licensing System and 

Registry for the residential mortgage industry that accomplishes 

all of the following objectives: 

(1) Provides uniform license applications and reporting 

requirements for State-licensed loan originators. 

(2) Provides a comprehensive licensing and supervisory 

database. 

(3) Aggregates and improves the flow of information to 

and between regulators. 

(4) Provides increased accountability and tracking of loan 

originators. 

(5) Streamlines the licensing process and reduces the regulatory burden. 

(6) Enhances consumer protections and supports anti-fraud 

measures. 

(7) Provides consumers with easily accessible information, 

offered at no charge, utilizing electronic media, including the 

Internet, regarding the employment history of, and publicly 

States. 

12 USC 5101 

note. 

12 USC 5101 

note. 

Certification. 

Effective date. 


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adjudicated disciplinary and enforcement actions against, loan 

originators. 

(8) Establishes a means by which residential mortgage 

loan originators would, to the greatest extent possible, be 

required to act in the best interests of the consumer. 

(9) Facilitates responsible behavior in the subprime mortgage market place and provides comprehensive training and 

examination requirements related to subprime mortgage 

lending. 

(10) Facilitates the collection and disbursement of consumer 

complaints on behalf of State and Federal mortgage regulators. 

SEC. 1503. DEFINITIONS. 

For purposes of this title, the following definitions shall apply: 

(1) FEDERAL BANKING AGENCIES.—The term ‘‘Federal 

banking agencies’’ means the Board of Governors of the Federal 

Reserve System, the Comptroller of the Currency, the Director 

of the Office of Thrift Supervision, the National Credit Union 

Administration, and the Federal Deposit Insurance Corporation. 

(2) DEPOSITORY INSTITUTION.—The term ‘‘depository institution’’ has the same meaning as in section 3 of the Federal 

Deposit Insurance Act, and includes any credit union. 

(3) LOAN ORIGINATOR.— 

(A) IN GENERAL.—The term ‘‘loan originator’’— 

(i) means an individual who— 

(I) takes a residential mortgage loan application; and 

(II) offers or negotiates terms of a residential 

mortgage loan for compensation or gain; 

(ii) does not include any individual who is not 

otherwise described in clause (i) and who performs 

purely administrative or clerical tasks on behalf of 

a person who is described in any such clause; 

(iii) does not include a person or entity that only 

performs real estate brokerage activities and is licensed 

or registered in accordance with applicable State law, 

unless the person or entity is compensated by a lender, 

a mortgage broker, or other loan originator or by any 

agent of such lender, mortgage broker, or other loan 

originator; and 

(iv) does not include a person or entity solely 

involved in extensions of credit relating to timeshare 

plans, as that term is defined in section 101(53D) 

of title 11, United States Code. 

(B) OTHER DEFINITIONS RELATING TO LOAN ORIGINATOR.—For purposes of this subsection, an individual 

‘‘assists a consumer in obtaining or applying to obtain 

a residential mortgage loan’’ by, among other things, 

advising on loan terms (including rates, fees, other costs), 

preparing loan packages, or collecting information on behalf 

of the consumer with regard to a residential mortgage 

loan. 

(C) ADMINISTRATIVE OR CLERICAL TASKS.—The term 

‘‘administrative or clerical tasks’’ means the receipt, collection, and distribution of information common for the processing or underwriting of a loan in the mortgage industry 

12 USC 5102. 


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and communication with a consumer to obtain information 

necessary for the processing or underwriting of a residential 

mortgage loan. 

(D) REAL ESTATE BROKERAGE ACTIVITY DEFINED.—The 

term ‘‘real estate brokerage activity’’ means any activity 

that involves offering or providing real estate brokerage 

services to the public, including— 

(i) acting as a real estate agent or real estate 

broker for a buyer, seller, lessor, or lessee of real 

property; 

(ii) bringing together parties interested in the sale, 

purchase, lease, rental, or exchange of real property; 

(iii) negotiating, on behalf of any party, any portion 

of a contract relating to the sale, purchase, lease, 

rental, or exchange of real property (other than in 

connection with providing financing with respect to 

any such transaction); 

(iv) engaging in any activity for which a person 

engaged in the activity is required to be registered 

or licensed as a real estate agent or real estate broker 

under any applicable law; and 

(v) offering to engage in any activity, or act in 

any capacity, described in clause (i), (ii), (iii), or (iv). 

(4) LOAN PROCESSOR OR UNDERWRITER.— 

(A) IN GENERAL.—The term ‘‘loan processor or underwriter’’ means an individual who performs clerical or support duties at the direction of and subject to the supervision 

and instruction of— 

(i) a State-licensed loan originator; or 

(ii) a registered loan originator. 

(B) CLERICAL OR SUPPORT DUTIES.—For purposes of 

subparagraph (A), the term ‘‘clerical or support duties’’ 

may include— 

(i) the receipt, collection, distribution, and analysis 

of information common for the processing or underwriting of a residential mortgage loan; and 

(ii) communicating with a consumer to obtain the 

information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates 

or terms, or counseling consumers about residential 

mortgage loan rates or terms. 

(5) NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY.—The term ‘‘Nationwide Mortgage Licensing System and 

Registry’’ means a mortgage licensing system developed and 

maintained by the Conference of State Bank Supervisors and 

the American Association of Residential Mortgage Regulators 

for the State licensing and registration of State-licensed loan 

originators and the registration of registered loan originators 

or any system established by the Secretary under section 1509. 

(6) NONTRADITIONAL MORTGAGE PRODUCT.—The term ‘‘nontraditional mortgage product’’ means any mortgage product 

other than a 30-year fixed rate mortgage. 

(7) REGISTERED LOAN ORIGINATOR.—The term ‘‘registered 

loan originator’’ means any individual who— 

(A) meets the definition of loan originator and is an 

employee of— 


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(i) a depository institution; 

(ii) a subsidiary that is— 

(I) owned and controlled by a depository 

institution; and 

(II) regulated by a Federal banking agency; 

or 

(iii) an institution regulated by the Farm Credit 

Administration; and 

(B) is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System 

and Registry. 

(8) RESIDENTIAL MORTGAGE LOAN.—The term ‘‘residential 

mortgage loan’’ means any loan primarily for personal, family, 

or household use that is secured by a mortgage, deed of trust, 

or other equivalent consensual security interest on a dwelling 

(as defined in section 103(v) of the Truth in Lending Act) 

or residential real estate upon which is constructed or intended 

to be constructed a dwelling (as so defined). 

(9) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Housing and Urban Development. 

(10) STATE.—The term ‘‘State’’ means any State of the 

United States, the District of Columbia, any territory of the 

United States, Puerto Rico, Guam, American Samoa, the Trust 

Territory of the Pacific Islands, the Virgin Islands, and the 

Northern Mariana Islands. 

(11) STATE-LICENSED LOAN ORIGINATOR.—The term ‘‘Statelicensed loan originator’’ means any individual who— 

(A) is a loan originator; 

(B) is not an employee of— 

(i) a depository institution; 

(ii) a subsidiary that is— 

(I) owned and controlled by a depository 

institution; and 

(II) regulated by a Federal banking agency; 

or 

(iii) an institution regulated by the Farm Credit 

Administration; and 

(C) is licensed by a State or by the Secretary under 

section 1508 and registered as a loan originator with, and 

maintains a unique identifier through, the Nationwide 

Mortgage Licensing System and Registry. 

(12) UNIQUE IDENTIFIER.— 

(A) IN GENERAL.—The term ‘‘unique identifier’’ means 

a number or other identifier that— 

(i) permanently identifies a loan originator; 

(ii) is assigned by protocols established by the 

Nationwide Mortgage Licensing System and Registry 

and the Federal banking agencies to facilitate electronic tracking of loan originators and uniform identification of, and public access to, the employment history of and the publicly adjudicated disciplinary and 

enforcement actions against loan originators; and 

(iii) shall not be used for purposes other than 

those set forth under this title. 

(B) RESPONSIBILITY OF STATES.—To the greatest extent 

possible and to accomplish the purpose of this title, States 


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shall use unique identifiers in lieu of social security numbers. 

SEC. 1504. LICENSE OR REGISTRATION REQUIRED. 

(a) IN GENERAL.—Subject to the existence of a licensing or 

registration regime, as the case may be, an individual may not 

engage in the business of a loan originator without first— 

(1) obtaining, and maintaining annually— 

(A) a registration as a registered loan originator; or 

(B) a license and registration as a State-licensed loan 

originator; and 

(2) obtaining a unique identifier. 

(b) LOAN PROCESSORS AND UNDERWRITERS.— (1) SUPERVISED LOAN PROCESSORS AND UNDERWRITERS.— A loan processor or underwriter who does not represent to 

the public, through advertising or other means of communicating or providing information (including the use of business 

cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will perform any 

of the activities of a loan originator shall not be required 

to be a State-licensed loan originator. 

(2) INDEPENDENT CONTRACTORS.—An independent contractor may not engage in residential mortgage loan origination 

activities as a loan processor or underwriter unless such independent contractor is a State-licensed loan originator. 

SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND 

ISSUANCE. 

(a) BACKGROUND CHECKS.—In connection with an application 

to any State for licensing and registration as a State-licensed loan 

originator, the applicant shall, at a minimum, furnish to the Nationwide Mortgage Licensing System and Registry information concerning the applicant’s identity, including— 

(1) fingerprints for submission to the Federal Bureau of 

Investigation, and any governmental agency or entity authorized to receive such information for a State and national 

criminal history background check; and 

(2) personal history and experience, including authorization 

for the System to obtain— 

(A) an independent credit report obtained from a consumer reporting agency described in section 603(p) of the 

Fair Credit Reporting Act; and 

(B) information related to any administrative, civil or 

criminal findings by any governmental jurisdiction. 

(b) ISSUANCE OF LICENSE.—The minimum standards for 

licensing and registration as a State-licensed loan originator shall 

include the following: 

(1) The applicant has never had a loan originator license 

revoked in any governmental jurisdiction. 

(2) The applicant has not been convicted of, or pled guilty 

or nolo contendere to, a felony in a domestic, foreign, or military 

court— 

(A) during the 7-year period preceding the date of 

the application for licensing and registration; or 

(B) at any time preceding such date of application, 

if such felony involved an act of fraud, dishonesty, or a 

breach of trust, or money laundering. 

12 USC 5104. 

12 USC 5103. 


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(3) The applicant has demonstrated financial responsibility, 

character, and general fitness such as to command the confidence of the community and to warrant a determination that 

the loan originator will operate honestly, fairly, and efficiently 

within the purposes of this title. 

(4) The applicant has completed the pre-licensing education 

requirement described in subsection (c). 

(5) The applicant has passed a written test that meets 

the test requirement described in subsection (d). 

(6) The applicant has met either a net worth or surety 

bond requirement, or paid into a State fund, as required by 

the State pursuant to section 1508(d)(6). 

(c) PRE-LICENSING EDUCATION OF LOAN ORIGINATORS.— (1) MINIMUM EDUCATIONAL REQUIREMENTS.—In order to 

meet the pre-licensing education requirement referred to in 

subsection (b)(4), a person shall complete at least 20 hours 

of education approved in accordance with paragraph (2), which 

shall include at least— 

(A) 3 hours of Federal law and regulations; 

(B) 3 hours of ethics, which shall include instruction 

on fraud, consumer protection, and fair lending issues; 

and 

(C) 2 hours of training related to lending standards 

for the nontraditional mortgage product marketplace. 

(2) APPROVED EDUCATIONAL COURSES.—For purposes of 

paragraph (1), pre-licensing education courses shall be 

reviewed, and approved by the Nationwide Mortgage Licensing 

System and Registry. 

(3) LIMITATION AND STANDARDS.— 

(A) LIMITATION.—To maintain the independence of the 

approval process, the Nationwide Mortgage Licensing 

System and Registry shall not directly or indirectly offer 

pre-licensure educational courses for loan originators. 

(B) STANDARDS.—In approving courses under this section, the Nationwide Mortgage Licensing System and Registry shall apply reasonable standards in the review and 

approval of courses. 

(d) TESTING OF LOAN ORIGINATORS.— 

(1) IN GENERAL.—In order to meet the written test requirement referred to in subsection (b)(5), an individual shall pass, 

in accordance with the standards established under this subsection, a qualified written test developed by the Nationwide 

Mortgage Licensing System and Registry and administered by 

an approved test provider. 

(2) QUALIFIED TEST.—A written test shall not be treated 

as a qualified written test for purposes of paragraph (1) unless 

the test adequately measures the applicant’s knowledge and 

comprehension in appropriate subject areas, including— 

(A) ethics; 

(B) Federal law and regulation pertaining to mortgage 

origination; 

(C) State law and regulation pertaining to mortgage 

origination; 

(D) Federal and State law and regulation, including 

instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues. 

(3) MINIMUM COMPETENCE.— 


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(A) PASSING SCORE.—An individual shall not be considered to have passed a qualified written test unless the 

individual achieves a test score of not less than 75 percent 

correct answers to questions. 

(B) INITIAL RETESTS.—An individual may retake a test 

3 consecutive times with each consecutive taking occurring 

at least 30 days after the preceding test. 

(C) SUBSEQUENT RETESTS.—After failing 3 consecutive 

tests, an individual shall wait at least 6 months before 

taking the test again. 

(D) RETEST AFTER LAPSE OF LICENSE.—A State-licensed 

loan originator who fails to maintain a valid license for 

a period of 5 years or longer shall retake the test, not 

taking into account any time during which such individual 

is a registered loan originator. 

(e) MORTGAGE CALL REPORTS.—Each mortgage licensee shall 

submit to the Nationwide Mortgage Licensing System and Registry 

reports of condition, which shall be in such form and shall contain 

such information as the Nationwide Mortgage Licensing System 

and Registry may require. 

SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL. 

(a) IN GENERAL.—The minimum standards for license renewal 

for State-licensed loan originators shall include the following: 

(1) The loan originator continues to meet the minimum 

standards for license issuance. 

(2) The loan originator has satisfied the annual continuing 

education requirements described in subsection (b). 

(b) CONTINUING EDUCATION FOR STATE-LICENSED LOAN ORIGINATORS.— 

(1) IN GENERAL.—In order to meet the annual continuing 

education requirements referred to in subsection (a)(2), a Statelicensed loan originator shall complete at least 8 hours of 

education approved in accordance with paragraph (2), which 

shall include at least— 

(A) 3 hours of Federal law and regulations; 

(B) 2 hours of ethics, which shall include instruction 

on fraud, consumer protection, and fair lending issues; 

and 

(C) 2 hours of training related to lending standards 

for the nontraditional mortgage product marketplace. 

(2) APPROVED EDUCATIONAL COURSES.—For purposes of 

paragraph (1), continuing education courses shall be reviewed, 

and approved by the Nationwide Mortgage Licensing System 

and Registry. 

(3) CALCULATION OF CONTINUING EDUCATION CREDITS.—A 

State-licensed loan originator— 

(A) may only receive credit for a continuing education 

course in the year in which the course is taken; and 

(B) may not take the same approved course in the 

same or successive years to meet the annual requirements 

for continuing education. 

(4) INSTRUCTOR CREDIT.—A State-licensed loan originator 

who is approved as an instructor of an approved continuing 

education course may receive credit for the originator’s own 

annual continuing education requirement at the rate of 2 hours 

credit for every 1 hour taught. 

12 USC 5105. 


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(5) LIMITATION AND STANDARDS.— 

(A) LIMITATION.—To maintain the independence of the 

approval process, the Nationwide Mortgage Licensing 

System and Registry shall not directly or indirectly offer 

any continuing education courses for loan originators. 

(B) STANDARDS.—In approving courses under this section, the Nationwide Mortgage Licensing System and Registry shall apply reasonable standards in the review and 

approval of courses. 

SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 

AGENCIES. 

(a) DEVELOPMENT.— 

(1) IN GENERAL.—The Federal banking agencies shall 

jointly, through the Federal Financial Institutions Examination 

Council, and together with the Farm Credit Administration, 

develop and maintain a system for registering employees of 

a depository institution, employees of a subsidiary that is owned 

and controlled by a depository institution and regulated by 

a Federal banking agency, or employees of an institution regulated by the Farm Credit Administration, as registered loan 

originators with the Nationwide Mortgage Licensing System 

and Registry. The system shall be implemented before the 

end of the 1-year period beginning on the date of enactment 

of this title. 

(2) REGISTRATION REQUIREMENTS.—In connection with the 

registration of any loan originator under this subsection, the 

appropriate Federal banking agency and the Farm Credit 

Administration shall, at a minimum, furnish or cause to be 

furnished to the Nationwide Mortgage Licensing System and 

Registry information concerning the employees’s identity, 

including— 

(A) fingerprints for submission to the Federal Bureau 

of Investigation, and any governmental agency or entity 

authorized to receive such information for a State and 

national criminal history background check; and 

(B) personal history and experience, including 

authorization for the Nationwide Mortgage Licensing 

System and Registry to obtain information related to any 

administrative, civil or criminal findings by any governmental jurisdiction. 

(b) COORDINATION.— 

(1) UNIQUE IDENTIFIER.—The Federal banking agencies, 

through the Financial Institutions Examination Council, and 

the Farm Credit Administration shall coordinate with the 

Nationwide Mortgage Licensing System and Registry to establish protocols for assigning a unique identifier to each registered 

loan originator that will facilitate electronic tracking and uniform identification of, and public access to, the employment 

history of and publicly adjudicated disciplinary and enforcement 

actions against loan originators. 

(2) NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY DEVELOPMENT.—To facilitate the transfer of information 

required by subsection (a)(2), the Nationwide Mortgage 

Licensing System and Registry shall coordinate with the Federal banking agencies, through the Financial Institutions 

Public 

information. 

Deadline. 

12 USC 5106. 


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Examination Council, and the Farm Credit Administration concerning the development and operation, by such System and 

Registry, of the registration functionality and data requirements for loan originators. 

(c) CONSIDERATION OF FACTORS AND PROCEDURES.—In establishing the registration procedures under subsection (a) and the 

protocols for assigning a unique identifier to a registered loan 

originator, the Federal banking agencies shall make such de 

minimis exceptions as may be appropriate to paragraphs (1)(A) 

and (2) of section 1504(a), shall make reasonable efforts to utilize 

existing information to minimize the burden of registering loan 

originators, and shall consider methods for automating the process 

to the greatest extent practicable consistent with the purposes 

of this title. 

SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT 

BACKUP AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 

LICENSING SYSTEM. 

(a) BACKUP LICENSING SYSTEM.—If, by the end of the 1-year 

period, or the 2-year period in the case of a State whose legislature 

meets only biennially, beginning on the date of the enactment 

of this title or at any time thereafter, the Secretary determines 

that a State does not have in place by law or regulation a system 

for licensing and registering loan originators that meets the requirements of sections 1505 and 1506 and subsection (d) of this section, 

or does not participate in the Nationwide Mortgage Licensing 

System and Registry, the Secretary shall provide for the establishment and maintenance of a system for the licensing and registration 

by the Secretary of loan originators operating in such State as 

State-licensed loan originators. 

(b) LICENSING AND REGISTRATION REQUIREMENTS.—The system 

established by the Secretary under subsection (a) for any State 

shall meet the requirements of sections 1505 and 1506 for Statelicensed loan originators. 

(c) UNIQUE IDENTIFIER.—The Secretary shall coordinate with 

the Nationwide Mortgage Licensing System and Registry to establish protocols for assigning a unique identifier to each loan originator licensed by the Secretary as a State-licensed loan originator 

that will facilitate electronic tracking and uniform identification 

of, and public access to, the employment history of and the publicly 

adjudicated disciplinary and enforcement actions against loan originators. 

(d) STATE LICENSING LAW REQUIREMENTS.—For purposes of 

this section, the law in effect in a State meets the requirements 

of this subsection if the Secretary determines the law satisfies 

the following minimum requirements: 

(1) A State loan originator supervisory authority is maintained to provide effective supervision and enforcement of such 

law, including the suspension, termination, or nonrenewal of 

a license for a violation of State or Federal law. 

(2) The State loan originator supervisory authority ensures 

that all State-licensed loan originators operating in the State 

are registered with Nationwide Mortgage Licensing System 

and Registry. 

(3) The State loan originator supervisory authority is 

required to regularly report violations of such law, as well 

Reports. 

Public 

infomation. 

States. 

Deadlines. 

12 USC 5107. 

Information 

technology. 


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as enforcement actions and other relevant information, to the 

Nationwide Mortgage Licensing System and Registry. 

(4) The State loan originator supervisory authority has 

a process in place for challenging information contained in 

the Nationwide Mortgage Licensing System and Registry. 

(5) The State loan originator supervisory authority has 

established a mechanism to assess civil money penalties for 

individuals acting as mortgage originators in their State without a valid license or registration. 

(6) The State loan originator supervisory authority has 

established minimum net worth or surety bonding requirements 

that reflect the dollar amount of loans originated by a residential mortgage loan originator, or has established a recovery 

fund paid into by the loan originators. 

(e) TEMPORARY EXTENSION OF PERIOD.—The Secretary may 

extend, by not more than 24 months, the 1-year or 2-year period, 

as the case may be, referred to in subsection (a) for the licensing 

of loan originators in any State under a State licensing law that 

meets the requirements of sections 1505 and 1506 and subsection 

(d) if the Secretary determines that such State is making a good 

faith effort to establish a State licensing law that meets such 

requirements, license mortgage originators under such law, and 

register such originators with the Nationwide Mortgage Licensing 

System and Registry. 

SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE LICENSING AND REGISTRY SYSTEM. 

If at any time the Secretary determines that the Nationwide 

Mortgage Licensing System and Registry is failing to meet the 

requirements and purposes of this title for a comprehensive 

licensing, supervisory, and tracking system for loan originators, 

the Secretary shall establish and maintain such a system to carry 

out the purposes of this title and the effective registration and 

regulation of loan originators. 

SEC. 1510. FEES. 

The Federal banking agencies, the Farm Credit Administration, 

the Secretary, and the Nationwide Mortgage Licensing System and 

Registry may charge reasonable fees to cover the costs of 

maintaining and providing access to information from the Nationwide Mortgage Licensing System and Registry, to the extent that 

such fees are not charged to consumers for access to such system 

and registry. 

SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS. 

(a) ACCESS TO RECORDS.—Notwithstanding any other provision 

of law, in providing identification and processing functions, the 

Attorney General shall provide access to all criminal history 

information to the appropriate State officials responsible for regulating State-licensed loan originators to the extent criminal history 

background checks are required under the laws of the State for 

the licensing of such loan originators. 

(b) AGENT.—For the purposes of this section and in order to 

reduce the points of contact which the Federal Bureau of Investigation may have to maintain for purposes of subsection (a), the 

Conference of State Bank Supervisors or a wholly owned subsidiary 

may be used as a channeling agent of the States for requesting 

12 USC 5110. 

12 USC 5109. 

12 USC 5108. 


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and distributing information between the Department of Justice 

and the appropriate State agencies. 

SEC. 1512. CONFIDENTIALITY OF INFORMATION. 

(a) SYSTEM CONFIDENTIALITY.—Except as otherwise provided 

in this section, any requirement under Federal or State law 

regarding the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and 

Registry or a system established by the Secretary under section 

1509, and any privilege arising under Federal or State law 

(including the rules of any Federal or State court) with respect 

to such information or material, shall continue to apply to such 

information or material after the information or material has been 

disclosed to the system. Such information and material may be 

shared with all State and Federal regulatory officials with mortgage 

industry oversight authority without the loss of privilege or the 

loss of confidentiality protections provided by Federal and State 

laws. 

(b) NONAPPLICABILITY OF CERTAIN REQUIREMENTS.—Information or material that is subject to a privilege or confidentiality 

under subsection (a) shall not be subject to— 

(1) disclosure under any Federal or State law governing 

the disclosure to the public of information held by an officer 

or an agency of the Federal Government or the respective 

State; or 

(2) subpoena or discovery, or admission into evidence, in 

any private civil action or administrative process, unless with 

respect to any privilege held by the Nationwide Mortgage 

Licensing System and Registry or the Secretary with respect 

to such information or material, the person to whom such 

information or material pertains waives, in whole or in part, 

in the discretion of such person, that privilege. 

(c) COORDINATION WITH OTHER LAW.—Any State law, including 

any State open record law, relating to the disclosure of confidential 

supervisory information or any information or material described 

in subsection (a) that is inconsistent with subsection (a) shall be 

superseded by the requirements of such provision to the extent 

State law provides less confidentiality or a weaker privilege. 

(d) PUBLIC ACCESS TO INFORMATION.—This section shall not 

apply with respect to the information or material relating to the 

employment history of, and publicly adjudicated disciplinary and 

enforcement actions against, loan originators that is included in 

Nationwide Mortgage Licensing System and Registry for access 

by the public. 

SEC. 1513. LIABILITY PROVISIONS. 

The Secretary, any State official or agency, any Federal banking 

agency, or any organization serving as the administrator of the 

Nationwide Mortgage Licensing System and Registry or a system 

established by the Secretary under section 1509, or any officer 

or employee of any such entity, shall not be subject to any civil 

action or proceeding for monetary damages by reason of the good 

faith action or omission of any officer or employee of any such 

entity, while acting within the scope of office or employment, 

relating to the collection, furnishing, or dissemination of information 

concerning persons who are loan originators or are applying for 

licensing or registration as loan originators. 

12 USC 5112. 

Applicability. 

12 USC 5111. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2821 

SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM. 

(a) SUMMONS AUTHORITY.—The Secretary may— 

(1) examine any books, papers, records, or other data of 

any loan originator operating in any State which is subject 

to a licensing system established by the Secretary under section 

1508; and 

(2) summon any loan originator referred to in paragraph 

(1) or any person having possession, custody, or care of the 

reports and records relating to such loan originator, to appear 

before the Secretary or any delegate of the Secretary at a 

time and place named in the summons and to produce such 

books, papers, records, or other data, and to give testimony, 

under oath, as may be relevant or material to an investigation 

of such loan originator for compliance with the requirements 

of this title. 

(b) EXAMINATION AUTHORITY.— (1) IN GENERAL.—If the Secretary establishes a licensing 

system under section 1508 for any State, the Secretary shall 

appoint examiners for the purposes of administering such section. 

(2) POWER TO EXAMINE.—Any examiner appointed under 

paragraph (1) shall have power, on behalf of the Secretary, 

to make any examination of any loan originator operating in 

any State which is subject to a licensing system established 

by the Secretary under section 1508 whenever the Secretary 

determines an examination of any loan originator is necessary 

to determine the compliance by the originator with this title. 

(3) REPORT OF EXAMINATION.—Each examiner appointed 

under paragraph (1) shall make a full and detailed report 

of examination of any loan originator examined to the Secretary. 

(4) ADMINISTRATION OF OATHS AND AFFIRMATIONS; EVIDENCE.—In connection with examinations of loan originators 

operating in any State which is subject to a licensing system 

established by the Secretary under section 1508, or with other 

types of investigations to determine compliance with applicable 

law and regulations, the Secretary and examiners appointed 

by the Secretary may administer oaths and affirmations and 

examine and take and preserve testimony under oath as to 

any matter in respect to the affairs of any such loan originator. 

(5) ASSESSMENTS.—The cost of conducting any examination 

of any loan originator operating in any State which is subject 

to a licensing system established by the Secretary under section 

1508 shall be assessed by the Secretary against the loan originator to meet the Secretary’s expenses in carrying out such 

examination. 

(c) CEASE AND DESIST PROCEEDING.— 

(1) AUTHORITY OF SECRETARY.—If the Secretary finds, after 

notice and opportunity for hearing, that any person is violating, 

has violated, or is about to violate any provision of this title, 

or any regulation thereunder, with respect to a State which 

is subject to a licensing system established by the Secretary 

under section 1508, the Secretary may publish such findings 

and enter an order requiring such person, and any other person 

that is, was, or would be a cause of the violation, due to 

an act or omission the person knew or should have known 

would contribute to such violation, to cease and desist from 

committing or causing such violation and any future violation 

12 USC 5113. 


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122 STAT. 2822 PUBLIC LAW 110–289—JULY 30, 2008 

of the same provision, rule, or regulation. Such order may, 

in addition to requiring a person to cease and desist from 

committing or causing a violation, require such person to 

comply, or to take steps to effect compliance, with such provision or regulation, upon such terms and conditions and within 

such time as the Secretary may specify in such order. Any 

such order may, as the Secretary deems appropriate, require 

future compliance or steps to effect future compliance, either 

permanently or for such period of time as the Secretary may 

specify, with such provision or regulation with respect to any 

loan originator. 

(2) HEARING.—The notice instituting proceedings pursuant 

to paragraph (1) shall fix a hearing date not earlier than 

30 days nor later than 60 days after service of the notice 

unless an earlier or a later date is set by the Secretary with 

the consent of any respondent so served. 

(3) TEMPORARY ORDER.—Whenever the Secretary determines that the alleged violation or threatened violation specified in the notice instituting proceedings pursuant to paragraph 

(1), or the continuation thereof, is likely to result in significant 

dissipation or conversion of assets, significant harm to consumers, or substantial harm to the public interest prior to 

the completion of the proceedings, the Secretary may enter 

a temporary order requiring the respondent to cease and desist 

from the violation or threatened violation and to take such 

action to prevent the violation or threatened violation and 

to prevent dissipation or conversion of assets, significant harm 

to consumers, or substantial harm to the public interest as 

the Secretary deems appropriate pending completion of such 

proceedings. Such an order shall be entered only after notice 

and opportunity for a hearing, unless the Secretary determines 

that notice and hearing prior to entry would be impracticable 

or contrary to the public interest. A temporary order shall 

become effective upon service upon the respondent and, unless 

set aside, limited, or suspended by the Secretary or a court 

of competent jurisdiction, shall remain effective and enforceable 

pending the completion of the proceedings. 

(4) REVIEW OF TEMPORARY ORDERS.— 

(A) REVIEW BY SECRETARY.—At any time after the 

respondent has been served with a temporary cease and 

desist order pursuant to paragraph (3), the respondent 

may apply to the Secretary to have the order set aside, 

limited, or suspended. If the respondent has been served 

with a temporary cease and desist order entered without 

a prior hearing before the Secretary, the respondent may, 

within 10 days after the date on which the order was 

served, request a hearing on such application and the Secretary shall hold a hearing and render a decision on such 

application at the earliest possible time. 

(B) JUDICIAL REVIEW.—Within— 

(i) 10 days after the date the respondent was 

served with a temporary cease and desist order entered 

with a prior hearing before the Secretary; or 

(ii) 10 days after the Secretary renders a decision 

on an application and hearing under paragraph (1), 

with respect to any temporary cease and desist order 

entered without a prior hearing before the Secretary, 

Effective date. 

Notification. 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2823 

the respondent may apply to the United States district 

court for the district in which the respondent resides or 

has its principal place of business, or for the District of 

Columbia, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order, and 

the court shall have jurisdiction to enter such an order. 

A respondent served with a temporary cease and desist 

order entered without a prior hearing before the Secretary 

may not apply to the court except after hearing and decision 

by the Secretary on the respondent’s application under 

subparagraph (A). 

(C) NO AUTOMATIC STAY OF TEMPORARY ORDER.—The 

commencement of proceedings under subparagraph (B) 

shall not, unless specifically ordered by the court, operate 

as a stay of the Secretary’s order. 

(5) AUTHORITY OF THE SECRETARY TO PROHIBIT PERSONS

FROM SERVING AS LOAN ORIGINATORS.—In any cease and desist 

proceeding under paragraph (1), the Secretary may issue an 

order to prohibit, conditionally or unconditionally, and permanently or for such period of time as the Secretary shall determine, any person who has violated this title or regulations 

thereunder, from acting as a loan originator if the conduct 

of that person demonstrates unfitness to serve as a loan originator. 

(d) AUTHORITY OF THE SECRETARY TO ASSESS MONEY PENALTIES.— 

(1) IN GENERAL.—The Secretary may impose a civil penalty 

on a loan originator operating in any State which is subject 

to a licensing system established by the Secretary under section 

1508, if the Secretary finds, on the record after notice and 

opportunity for hearing, that such loan originator has violated 

or failed to comply with any requirement of this title or any 

regulation prescribed by the Secretary under this title or order 

issued under subsection (c). 

(2) MAXIMUM AMOUNT OF PENALTY.—The maximum amount 

of penalty for each act or omission described in paragraph 

(1) shall be $25,000. 

SEC. 1515. STATE EXAMINATION AUTHORITY. 

In addition to any authority allowed under State law a State 

licensing agency shall have the authority to conduct investigations 

and examinations as follows: 

(1) For the purposes of investigating violations or complaints arising under this title, or for the purposes of examination, the State licensing agency may review, investigate, or 

examine any loan originator licensed or required to be licensed 

under this title, as often as necessary in order to carry out 

the purposes of this title. 

(2) Each such loan originator shall make available upon 

request to the State licensing agency the books and records 

relating to the operations of such originator. The State licensing 

agency may have access to such books and records and interview the officers, principals, loan originators, employees, independent contractors, agents, and customers of the licensee concerning their business. 

(3) The authority of this section shall remain in effect, 

whether such a loan originator acts or claims to act under 

Records. 

12 USC 5114. 

Notification. 

Hearings. 


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122 STAT. 2824 PUBLIC LAW 110–289—JULY 30, 2008 

any licensing or registration law of such State, or claims to 

act without such authority. 

(4) No person subject to investigation or examination under 

this section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, 

or other information. 

SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS. 

(a) ANNUAL REPORTS.—Not later than 1 year after the date 

of enactment of this title, and annually thereafter, the Secretary 

shall submit a report to Congress on the effectiveness of the provisions of this title, including legislative recommendations, if any, 

for strengthening consumer protections, enhancing examination 

standards, streamlining communication between all stakeholders 

involved in residential mortgage loan origination and processing, 

and establishing performance based bonding requirements for mortgage originators or institutions that employ such brokers. 

(b) LEGISLATIVE RECOMMENDATIONS.—Not later than 6 months 

after the date of enactment of this title, the Secretary shall make 

recommendations to Congress on legislative reforms to the Real 

Estate Settlement Procedures Act of 1974, that the Secretary deems 

appropriate to promote more transparent disclosures, allowing consumers to better shop and compare mortgage loan terms and settlement costs. 

SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES. 

(a) STUDY REQUIRED.—The Secretary shall conduct an extensive 

study of the root causes of default and foreclosure of home loans, 

using as much empirical data as is available. 

(b) PRELIMINARY REPORT TO CONGRESS.—Not later than 6 

months after the date of enactment of this title, the Secretary 

shall submit to Congress a preliminary report regarding the study 

required by this section. 

(c) FINAL REPORT TO CONGRESS.—Not later than 12 months 

after the date of enactment of this title, the Secretary shall submit 

to Congress a final report regarding the results of the study required 

by this section, which shall include any recommended legislation 

relating to the study, and recommendations for best practices and 

for a process to provide targeted assistance to populations with 

the highest risk of potential default or foreclosure. 

TITLE VI—MISCELLANEOUS 

SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES. 

(a) ONGOING STUDY OF FEES.—The Director shall conduct an 

ongoing study of fees charged by enterprises for guaranteeing a 

mortgage. 

(b) COLLECTION OF DATA.—The Director shall, by regulation 

or order, establish procedures for the collection of data from enterprises for purposes of this subsection, including the format and 

the process for collection of such data. 

(c) REPORTS TO CONGRESS.—The Director shall annually submit 

a report to Congress on the results of the study conducted under 

subsection (a), based on the aggregated data collected under subsection (a) for the subject year, regarding the amount of such 

fees and the criteria used by the enterprises to determine such 

fees. 

Regulations. 

Orders. 

Procedures. 

Deadline. 

12 USC 4514a. 

Deadline. 

Deadline. 

12 USC 5116. 

Deadline. 

12 USC 5115. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2825 

(d) CONTENTS OF REPORTS.—The reports required under subsection (c) shall identify and analyze— 

(1) the factors considered in determining the amount of 

the guarantee fees charged; 

(2) the total revenue earned by the enterprises from guarantee fees; 

(3) the total costs incurred by the enterprises for providing 

guarantees; 

(4) the average guarantee fee charged by the enterprises; 

(5) an analysis of any increase or decrease in guarantee 

fees from the preceding year; 

(6) a breakdown of the revenue and costs associated with 

providing guarantees, based on product type and risk classifications; and 

(7) a breakdown of guarantee fees charged based on asset 

size of the originator and the number of loans sold or transferred to an enterprise. 

(e) PROTECTION OF INFORMATION.—Nothing in this section may 

be construed to require or authorize the Director to publicly disclose 

information that is confidential or proprietary. 

SEC. 1602. STUDY AND REPORT ON DEFAULT RISK EVALUATION. 

(a) STUDY.—The Director shall conduct a study of ways to 

improve the overall default risk evaluation used with respect to 

residential mortgage loans. Particular attention shall be paid to 

the development and utilization of processes and technologies that 

provide a means to standardize the measurement of risk. 

(b) REPORT.—The Director shall submit a report on the study 

conducted under this section to the Committee on Banking, 

Housing, and Urban Affairs of the Senate and the Committee 

on Financial Services of the House of Representatives, not later 

than 1 year after the date of enactment of this Act. 

SEC. 1603. CONVERSION OF HUD CONTRACTS. 

(a) IN GENERAL.—Notwithstanding any other provision of law, 

the Secretary may, at the request of an owner of a multifamily 

housing project that exceeds 5,000 units to which a contract for 

project-based rental assistance under section 8 of the United States 

Housing Act of 1937 (‘‘Act’’) (42 U.S.C. 1437f) and a Rental Assistance Payment contract is subject, convert such contracts to a contract for project-based rental assistance under section 8 of the 

Act. 

(b) INITIAL RENEWAL.— 

(1) At the request of an owner under subsection (a) made 

no later than 90 days prior to a conversion, the Secretary 

may, to the extent sufficient amounts are made available in 

appropriation Acts and notwithstanding any other law, treat 

the contemplated resulting contract as if such contract were 

eligible for initial renewal under section 524(a) of the MultiFamily Assisted Housing Reform and Affordability Act of 1997 

(42 U.S.C. 1437f note) (‘‘MAHRA’’) (42 U.S.C. 1437f note). 

(2) A request by an owner pursuant to paragraph (1) shall 

be upon such terms and conditions as the Secretary may 

require. 

(c) RESULTING CONTRACT.—The resulting contract shall— 

(1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f 

note); 

42 USC 1437f 

note. 

Deadline. 


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122 STAT. 2826 PUBLIC LAW 110–289—JULY 30, 2008 

(2) be considered for all purposes a contract that has been 

renewed under section 524(a) of MAHRA (42 U.S.C. 1437f 

note) for a term not to exceed 20 years; 

(3) be subsequently renewable at the request of an owner, 

under any renewal option for which the project is eligible under 

MAHRA (42 U.S.C. 1437f note); 

(4) contain provisions limiting distributions, as the Secretary determines appropriate, not to exceed 10 percent of 

the initial investment of the owner; 

(5) be subject to the availability of sufficient amounts in 

appropriation Acts; and 

(6) be subject to such other terms and conditions as the 

Secretary considers appropriate. 

(d) INCOME TARGETING.—To the extent that assisted dwelling 

units, subject to the resulting contract under subsection (a), serve 

low-income families, as defined in section 3(b)(2) of the Act (42 

U.S.C. 1437a(b)(2)) the units shall be considered to be in compliance 

with all income targeting requirements under the Act (42 U.S.C. 

1437 et seq). 

(e) TENANT ELIGIBILITY.—Notwithstanding any other provision 

of law, each family residing in an assisted dwelling unit on the 

date of conversion of a contract under this section, subject to the 

resulting contract under subsection (a), shall be considered to meet 

the applicable requirements for income eligibility and occupancy. 

(f) DEFINITIONS.—As used in this section— 

(1) the term ‘‘Secretary’’ means the Secretary of Housing 

and Urban Development; 

(2) the term ‘‘conversion’’ means the action under which 

a contract for project-based rental assistance under section 

8 of the Act and a Rental Assistance Payment contract become 

a contract for project-based rental assistance under section 

8 of the Act (42 U.S.C. 1437f) pursuant to subsection (a); 

(3) the term ‘‘resulting contract’’ means the new contract 

after a conversion pursuant to subsection (a); and 

(4) the term ‘‘assisted dwelling unit’’ means a dwelling 

unit in a multifamily housing project that exceeds 5,000 units 

that, on the date of conversion of a contract under this section, 

is subject to a contract for project-based rental assistance under 

section 8 of the Act (42 U.S.C. 1437f) or a Rental Assistance 

Payment contract. 

SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS. 

(a) IN GENERAL.—Section 11 of the Federal Deposit Insurance 

Act (12 U.S.C. 1821) is amended— 

(1) in subsection (d)(2)— 

(A) in subparagraph (F), by striking ‘‘as receiver’’ and 

all that follows through clause (ii) and inserting the following: ‘‘as receiver, with respect to any insured depository 

institution, organize a new depository institution under 

subsection (m) or a bridge depository institution under 

subsection (n).’’; 

(B) in subparagraph (G), by striking ‘‘new bank or 

a bridge bank’’ and inserting ‘‘new depository institution 

or a bridge depository institution’’; 

(2) in the heading for subsection (e)(10)(C), by striking 

‘‘BRIDGE BANKS’’ and inserting ‘‘BRIDGE DEPOSITORY INSTITU- TIONS’’; 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2827 

(3) in subsection (e)(10)(C)(i), by striking ‘‘bridge bank’’ 

and inserting ‘‘bridge depository institution’’; 

(4) in subsection (m)— 

(A) in the subsection heading, by striking ‘‘BANKS’’ 

and inserting ‘‘DEPOSITORY INSTITUTIONS’’; 

(B) by striking ‘‘insured bank’’ each place such term 

appears and inserting ‘‘insured depository institution’’; 

(C) by striking ‘‘new bank’’ each place such term 

appears and inserting ‘‘new depository institution’’; 

(D) by striking ‘‘such bank’’ each place such term 

appears and inserting ‘‘such depository institution’’; 

(E) by striking ‘‘the bank’’ each place such term appears 

and inserting ‘‘the insured depository institution’’; 

(F) in paragraph (1), by inserting ‘‘or Federal savings 

association’’ after ‘‘national bank’’; 

(G) in paragraph (6), by striking ‘‘only bank’’ and 

inserting ‘‘only depository institution’’; 

(H) in paragraph (9), by inserting ‘‘or the Director 

of the Office of Thrift Supervision, as appropriate’’ after 

‘‘Comptroller of the Currency’’; 

(I) in paragraph (15), by striking ‘‘, but in no event’’ 

and all that follows through ‘‘located’’; 

(J) in paragraph (16)— 

(i) by inserting ‘‘or the Director of the Office of 

Thrift Supervision, as appropriate,’’ after ‘‘Comptroller 

of the Currency’’ each place such term appears; 

(ii) by striking ‘‘the bank’’ each place such term 

appears and inserting ‘‘the depository institution’’; 

(iii) by inserting ‘‘or Federal savings association’’ 

after ‘‘national bank’’ each place such term appears; 

(iv) by inserting ‘‘or Federal savings associations’’ 

after ‘‘national banks’’; and 

(v) by striking ‘‘Such bank’’ and inserting ‘‘Such 

depository institution’’; and 

(K) in paragraph (18), by inserting ‘‘or the Director 

of the Office of Thrift Supervision, as appropriate,’’ after 

‘‘Comptroller of the Currency’’ each place such term 

appears; 

(5) in subsection (n)— 

(A) in the subsection heading, by striking ‘‘BANKS’’ 

and inserting ‘‘DEPOSITORY INSTITUTIONS’’; 

(B) by striking ‘‘bridge bank’’ each place such term 

appears and inserting ‘‘bridge depository institution’’; 

(C) by striking ‘‘bridge banks’’ each place such term 

appears (other than in paragraph (1)(A))and inserting 

‘‘bridge depository institutions’’; 

(D) by striking ‘‘bridge bank’s’’ each place such term 

appears and inserting ‘‘bridge depository institution’s’’; 

(E) by striking ‘‘insured bank’’ each place such term 

appears and inserting ‘‘insured depository institution’’; 

(F) by striking ‘‘insured banks’’ each place such term 

appears and inserting ‘‘insured depository institutions’’; 

(G) by striking ‘‘such bank’’ each place such term 

appears (other than in paragraph (4)(J)) and inserting 

‘‘such depository institution’’; 

(H) by striking ‘‘the bank’’ each place such term 

appears and inserting ‘‘the depository institution’’; 


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122 STAT. 2828 PUBLIC LAW 110–289—JULY 30, 2008 

(I) by striking ‘‘bank or banks’’ each place such term 

appears and inserting ‘‘depository institution or institutions’’; 

(J) in paragraph (1)(A)— 

(i) by inserting ‘‘, with respect to 1 or more insured 

banks, or the Director of the Office of Thrift Supervision, with respect to 1 or more insured savings 

associations,’’ after ‘‘Comptroller of the Currency’’; 

(ii) by inserting ‘‘or Federal savings associations, 

as appropriate,’’ after ‘‘national banks’’; 

(iii) by inserting ‘‘or Federal savings associations, 

as applicable,’’ after ‘‘banking associations’’; and 

(iv) by striking ‘‘as bridge banks’’ and inserting 

‘‘as ‘bridge depository institutions’ ’’; 

(K) in paragraph (1)(B)— 

(i) by striking ‘‘of a bank’’; and 

(ii) by striking ‘‘of that bank’’; 

(L) in the heading for paragraph (1)(E), by inserting 

‘‘OR FEDERAL SAVINGS ASSOCIATION’’ before the period; 

(M) in paragraph (1)(E), by inserting before the period 

‘‘, in the case of 1 or more insured banks, and as a Federal 

savings association, in the case of 1 or more insured savings 

associations’’; 

(N) in paragraph (2)— 

(i) by inserting ‘‘or Federal savings association’’ 

after ‘‘national bank’’ each place such term appears; 

(ii) in subparagraph (A), by inserting ‘‘or the 

Director of the Office of Thrift Supervision’’ after 

‘‘Comptroller of the Currency’’; and 

(iii) in the heading for subparagraph (B), by 

inserting ‘‘OR FEDERAL SAVINGS ASSOCIATION’’ before 

the period; 

(O) in paragraph (4)— 

(i) in the matter preceding subparagraph (A), by 

inserting ‘‘or Federal savings association, as appropriate’’ after ‘‘national bank’’; 

(ii) in subparagraph (C), by striking ‘‘under section 

5138 of the Revised Statutes or any other’’ and 

inserting ‘‘under any’’; 

(iii) by inserting ‘‘and the Director of the Office 

of Thrift Supervision, as appropriate,’’ after ‘‘Comptroller of the Currency’’ each place such term appears; 

(iv) in subparagraph (D), by striking ‘‘bank’s’’ and 

inserting ‘‘depository institution’s’’; and 

(v) in subparagraph (H), by striking ‘‘a bank in 

default’’ and inserting ‘‘a depository institution in 

default’’; 

(P) in paragraph (8)— 

(i) in subparagraph (A), by striking ‘‘the banks’’ 

and inserting ‘‘the depository institutions’’; 

(ii) in subparagraph (B), by striking ‘‘bank’s’’ and 

inserting ‘‘depository institution’s’’; 

(Q) by striking ‘‘BRIDGE BANK’’ or ‘‘BRIDGE BANKS’’ as 

the case may be in the headings for paragraphs (9), (10), 

(12), and (13) and inserting ‘‘BRIDGE DEPOSITORY INSTITUTION’’ or ‘‘BRIDGE DEPOSITORY INSTITUTIONS’’ as appropriate; 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2829 

(R) in paragraph (11), by inserting ‘‘or a Federal 

savings association, as the case may be,’’ after ‘‘national 

bank’’ each place such term appears; 

(S) in paragraph (12)— 

(i) by inserting ‘‘or the Director of the Office of 

Thrift Supervision, as appropriate,’’ after ‘‘Comptroller 

of the Currency’’ each place such term appears; and 

(ii) by inserting ‘‘or Federal savings associations, 

as appropriate’’ after ‘‘national banks’’; and 

(T) in paragraph (13), by striking ‘‘single bank’’ and 

inserting ‘‘single depository institution’’. 

(b) OTHER CONFORMING AMENDMENTS.— (1) FEDERAL DEPOSIT INSURANCE ACT.—The Federal Deposit 

Insurance Act (12 U.S.C. 1811 et seq.) is amended— 

(A) in section 3 (12 U.S.C. 1813), by striking subsection 

(i) and inserting the following: 

‘‘(i) NEW DEPOSITORY INSTITUTION AND BRIDGE DEPOSITORY

INSTITUTION DEFINED.— 

‘‘(1) NEW DEPOSITORY INSTITUTION.—The term ‘new depository institution’ means a new national bank or Federal savings 

association, other than a bridge depository institution, organized by the Corporation in accordance with section 11(m). 

‘‘(2) BRIDGE DEPOSITORY INSTITUTION.—The term ‘bridge 

depository institution’ means a new national bank or Federal 

savings association organized by the Corporation in accordance 

with section 11(n).’’; 

(B) in section 10(d)(5)(B) (12 U.S.C. 1820(d)(5)(B)), by 

striking ‘‘bridge bank’’ and inserting ‘‘bridge depository 

institution’’; 

(C) in section 12 (12 U.S.C. 1822), by striking ‘‘new 

bank’’ each place such term appears and inserting ‘‘new 

depository institution’’;and 

(D) in section 38(j)(2) (12 U.S.C. 1831o(j)(2)), by striking 

‘‘bridge bank’’ and inserting ‘‘bridge depository institution’’. 

(2) FEDERAL CREDIT UNION ACT.—Section 207(c)(10)(C)(i) 

of the Federal Credit Union Act (12 U.S.C. 1787(c)(10)(C)(i)) 

is amended by striking ‘‘bridge bank’’ and inserting ‘‘bridge 

depository institution’’. 

(3) TITLE 11, UNITED STATES CODE.—Section 783 of title 

11, United States Code, is amended by striking ‘‘bridge bank’’ 

and inserting ‘‘bridge depository institution’’. 

(4) TITLE 26, UNITED STATES CODE.—Section 414(l)(2)(G) 

of the Internal Revenue Code of 1986, is amended by striking 

‘‘bridge bank’’ and inserting ‘‘bridge depository institution’’. 

(c) REPEAL OF DEPOSIT LIMITATION.—Section 11(n)(1)(B)(i) of 

the Federal Deposit Insurance Act (12 U.S.C. 1821(n)(1)(B)(i)) is 

amended by striking ‘‘, except that’’ and all that follows through 

‘‘another insured depository institution’’. 

(d) FEDERAL RESERVE BANK LENDING TO BRIDGE DEPOSITORY

INSTITUTIONS.—Section 11(n)(5) of the Federal Deposit Insurance 

Act (12 U.S.C. 1821(n)(5)) is amended by adding at the end the 

following new subparagraph: 

‘‘(D) CAPITAL LEVELS.—A bridge depository institution 

shall not be considered an undercapitalized depository 

institution or a critically undercapitalized depository 

institution for purposes of section 10B(b) of the Federal 

Reserve Act.’’. 


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122 STAT. 2830 PUBLIC LAW 110–289—JULY 30, 2008 

SEC. 1605. SENSE OF THE SENATE. 

It is the sense of the Senate that in implementing or carrying 

out any provision of this Act, or any amendment made by this 

Act, the Senate supports a policy of noninterference regarding local 

government requirements that the holder of a foreclosed property 

maintain that property. 

DIVISION B—FORECLOSURE 

PREVENTION 

SEC. 2001. SHORT TITLE. 

This division may be cited as the ‘‘Foreclosure Prevention Act 

of 2008’’. 

SEC. 2002. EMERGENCY DESIGNATION. 

For purposes of Senate enforcement, all provisions of this division are designated as emergency requirements and necessary to 

meet emergency needs pursuant to section 204 of S. Con. Res. 

21 (110th Congress), the concurrent resolution on the budget for 

fiscal year 2008. 

TITLE I—FHA MODERNIZATION ACT OF 

2008 

SEC. 2101. SHORT TITLE. 

This title may be cited as the ‘‘FHA Modernization Act of 

2008’’. 

Subtitle A—Building American 

Homeownership 

SEC. 2111. SHORT TITLE. 

This subtitle may be cited as the ‘‘Building American 

Homeownership Act of 2008’’. 

SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION. 

(a) IN GENERAL.—Paragraph (2) of section 203(b) of the National 

Housing Act (12 U.S.C. 1709(b)(2)) is amended— 

(1) by striking subparagraphs (A) and (B) and inserting 

the following: 

‘‘(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 

12 USC 1701 

note. 

Building 

American 

Homeownership 

Act of 2008. 

12 USC 1701 

note. 

12 USC 1701 

note. 

Foreclosure 

Prevention Act 

of 2008. 


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‘‘(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.’’; and 

(2) in the matter following subparagraph (B), by striking 

the second sentence (relating to a definition of ‘‘average closing 

cost’’) and all that follows through ‘‘section 3103A(d) of title 

38, United States Code.’’. 

(b) TREATMENT OF UP-FRONT PREMIUMS.—Section 203(d) of the 

National Housing Act (12 U.S.C. 1709(d)) is amended— 

(1) by striking ‘‘Notwithstanding any’’ and inserting the 

following: ‘‘Except as provided in paragraph (2) of this subsection, notwithstanding’’; 

(2) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 

(3) by adding at the end the following new paragraph: 

‘‘(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).’’. 

(c) EFFECTIVE DATE.— The amendments made by subsection 

(a) shall take effect upon the expiration of the date described 

in section 202(a) of the Economic Stimulus Act of 2008 (Public 

Law 110–185; 122 Stat. 620). 

SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF 

SELLER-FUNDED DOWN PAYMENT ASSISTANCE. 

Paragraph (9) of section 203(b) of the National Housing Act 

(12 U.S.C. 1709(b)(9)) is amended to read as follows: 

‘‘(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, 

12 USC 1709 

note. 


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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.’’. 

SEC. 2114. MORTGAGE INSURANCE PREMIUMS. 

Section 203(c)(2) of the National Housing Act (12 U.S.C. 

1709(c)(2)) is amended— 

(1) in the matter preceding subparagraph (A), by striking 

‘‘or of the General Insurance Fund’’ and all that follows through 

‘‘section 234(c),,’’; and 

(2) in subparagraph (A)— 

(A) by striking ‘‘2.25 percent’’ and inserting ‘‘3 percent’’; 

and 

(B) by striking ‘‘2.0 percent’’ and inserting ‘‘2.75 percent’’. 

SEC. 2115. REHABILITATION LOANS. 

Subsection (k) of section 203 of the National Housing Act (12 

U.S.C. 1709(k)) is amended— 

(1) in paragraph (1), by striking ‘‘on’’ and all that follows 

through ‘‘1978’’; and 

(2) in paragraph (5)— 

(A) by striking ‘‘General Insurance Fund’’ the first 

place it appears and inserting ‘‘Mutual Mortgage Insurance 

Fund’’; and 

(B) in the second sentence, by striking the comma 

and all that follows through ‘‘General Insurance Fund’’. 

SEC. 2116. DISCRETIONARY ACTION. 

The National Housing Act is amended— 

(1) in subsection (e) of section 202 (12 U.S.C. 1708(e))— 

(A) in paragraph (3)(B), by striking ‘‘section 202(e) 

of the National Housing Act’’ and inserting ‘‘this subsection’’; and 

(B) by redesignating such subsection as subsection (f); 

(2) by striking paragraph (4) of section 203(s) (12 U.S.C. 

1709(s)(4)) and inserting the following new paragraph: 

‘‘(4) the Secretary of Agriculture;’’; and 

(3) by transferring subsection (s) of section 203 (as amended 

by paragraph (2) of this section) to section 202, inserting such 

subsection after subsection (d) of section 202, and redesignating 

such subsection as subsection (e). 

SEC. 2117. INSURANCE OF CONDOMINIUMS. 

(a) IN GENERAL.—Section 234 of the National Housing Act 

(12 U.S.C. 1715y) is amended— 

(1) in subsection (c), in the first sentence— 

Applicability. 

Effective date. 


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(A) by striking ‘‘and’’ before ‘‘(2)’’; and 

(B) by inserting before the period at the end the following: ‘‘, and (3) the project has a blanket mortgage 

insured by the Secretary under subsection (d)’’; and 

(2) in subsection (g), by striking ‘‘, except that’’ and all 

that follows and inserting a period. 

(b) DEFINITION OF MORTGAGE.—Section 201(a) of the National 

Housing Act (12 U.S.C. 1707(a)) is amended— 

(1) before ‘‘a first mortgage’’ insert ‘‘(A)’’; 

(2) by striking ‘‘or on a leasehold (1)’’ and inserting ‘‘(B) 

a first mortgage on a leasehold on real estate (i)’’; 

(3) by striking ‘‘or (2)’’ and inserting ‘‘, or (ii)’’; and 

(4) by inserting before the semicolon the following: ‘‘, or 

(C) a first mortgage given to secure the unpaid purchase price 

of a fee interest in, or long-term leasehold interest in, real 

estate consisting of a one-family unit in a multifamily project, 

including a project in which the dwelling units are attached, 

or are manufactured housing units, semi-detached, or detached, 

and an undivided interest in the common areas and facilities 

which serve the project’’. 

(c) DEFINITION OF REAL ESTATE.—Section 201 of the National 

Housing Act (12 U.S.C. 1707) is amended by adding at the end 

the following new subsection: 

‘‘(g) The term ‘real estate’ means land and all natural resources 

and structures permanently affixed to the land, including residential 

buildings and stationary manufactured housing. The Secretary may 

not require, for treatment of any land or other property as real 

estate for purposes of this title, that such land or property be 

treated as real estate for purposes of State taxation.’’. 

SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND. 

(a) IN GENERAL.—Subsection (a) of section 202 of the National 

Housing Act (12 U.S.C. 1708(a)) is amended to read as follows: 

‘‘(a) MUTUAL MORTGAGE INSURANCE FUND.— 

‘‘(1) ESTABLISHMENT.—Subject to the provisions of the Federal Credit Reform Act of 1990, there is hereby created a 

Mutual Mortgage Insurance Fund (in this title referred to as 

the ‘Fund’), which shall be used by the Secretary to carry 

out the provisions of this title with respect to mortgages insured 

under section 203. The Secretary may enter into commitments 

to guarantee, and may guarantee, such insured mortgages. 

‘‘(2) LIMIT ON LOAN GUARANTEES.—The authority of the 

Secretary to enter into commitments to guarantee such insured 

mortgages shall be effective for any fiscal year only to the 

extent that the aggregate original principal loan amount under 

such mortgages, any part of which is guaranteed, does not 

exceed the amount specified in appropriations Acts for such 

fiscal year. 

‘‘(3) FIDUCIARY RESPONSIBILITY.—The Secretary has a 

responsibility to ensure that the Mutual Mortgage Insurance 

Fund remains financially sound. 

‘‘(4) ANNUAL INDEPENDENT ACTUARIAL STUDY.—The Secretary shall provide for an independent actuarial study of the 

Fund to be conducted annually, which shall analyze the financial position of the Fund. The Secretary shall submit a report 

annually to the Congress describing the results of such study 

and assessing the financial status of the Fund. The report 

Reports. 


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122 STAT. 2834 PUBLIC LAW 110–289—JULY 30, 2008 

shall recommend adjustments to underwriting standards, program participation, or premiums, if necessary, to ensure that 

the Fund remains financially sound. The report shall also 

include an evaluation of the quality control procedures and 

accuracy of information utilized in the process of underwriting 

loans guaranteed by the Fund. Such evaluation shall include 

a review of the risk characteristics of loans based not only 

on borrower information and performance, but on risks associated with loans originated or funded by various entities or 

financial institutions. 

‘‘(5) QUARTERLY REPORTS.—During each fiscal year, the 

Secretary shall submit a report to the Congress for each calendar quarter, which shall specify for mortgages that are obligations of the Fund— 

‘‘(A) the cumulative volume of loan guarantee commitments that have been made during such fiscal year through 

the end of the quarter for which the report is submitted; 

‘‘(B) the types of loans insured, categorized by risk; 

‘‘(C) any significant changes between actual and projected claim and prepayment activity; 

‘‘(D) projected versus actual loss rates; and 

‘‘(E) updated projections of the annual subsidy rates 

to ensure that increases in risk to the Fund are identified 

and mitigated by adjustments to underwriting standards, 

program participation, or premiums, and the financial 

soundness of the Fund is maintained. 

The first quarterly report under this paragraph shall be submitted on the last day of the first quarter of fiscal year 2008, 

or on the last day of the first full calendar quarter following 

the enactment of the Building American Homeownership Act 

of 2008, whichever is later. 

‘‘(6) ADJUSTMENT OF PREMIUMS.—If, pursuant to the independent actuarial study of the Fund required under paragraph 

(4), the Secretary determines that the Fund is not meeting 

the operational goals established under paragraph (7) or there 

is a substantial probability that the Fund will not maintain 

its established target subsidy rate, the Secretary may either 

make programmatic adjustments under this title as necessary 

to reduce the risk to the Fund, or make appropriate premium 

adjustments. 

‘‘(7) OPERATIONAL GOALS.—The operational goals for the 

Fund are— 

‘‘(A) to minimize the default risk to the Fund and 

to homeowners by among other actions instituting fraud 

prevention quality control screening not later than 18 

months after the date of enactment of the Building American Homeownership Act of 2008; and 

‘‘(B) to meet the housing needs of the borrowers that 

the single family mortgage insurance program under this 

title is designed to serve.’’. 

(b) OBLIGATIONS OF FUND.—The National Housing Act is 

amended as follows: 

(1) HOMEOWNERSHIP VOUCHER PROGRAM MORTGAGES.—In 

section 203(v) (12 U.S.C. 1709(v))— 

(A) by striking ‘‘Notwithstanding section 202 of this 

title, the’’ and inserting ‘‘The’’; and 

Deadline. 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2835 

(B) by striking ‘‘General Insurance Fund’’ the first 

place such term appears and all that follows through the 

end of the subsection and inserting ‘‘Mutual Mortgage 

Insurance Fund.’’. 

(2) HOME EQUITY CONVERSION MORTGAGES.—Section 

255(i)(2)(A) of the National Housing Act (12 U.S.C. 1715z– 

20(i)(2)(A)) is amended by striking ‘‘General Insurance Fund’’ 

and inserting ‘‘Mutual Mortgage Insurance Fund’’. 

(c) CONFORMING AMENDMENTS.—The National Housing Act is 

amended— 

(1) in section 205 (12 U.S.C. 1711), by striking subsections 

(g) and (h); and 

(2) in section 519(e) (12 U.S.C. 1735c(e)), by striking 

‘‘203(b)’’ and all that follows through ‘‘203(i)’’ and inserting 

‘‘203, except as determined by the Secretary’’. 

SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS. 

(a) HAWAIIAN HOME LANDS.—Section 247(c) of the National 

Housing Act (12 U.S.C. 1715z–12(c)) is amended— 

(1) by striking ‘‘General Insurance Fund established in 

section 519’’ and inserting ‘‘Mutual Mortgage Insurance Fund’’; 

and 

(2) in the second sentence, by striking ‘‘(1) all references’’ 

and all that follows through ‘‘and (2)’’. 

(b) INDIAN RESERVATIONS.—Section 248(f) of the National 

Housing Act (12 U.S.C. 1715z–13(f)) is amended— 

(1) by striking ‘‘General Insurance Fund’’ the first place 

it appears through ‘‘519’’ and inserting ‘‘Mutual Mortgage Insurance Fund’’; and 

(2) in the second sentence, by striking ‘‘(1) all references’’ 

and all that follows through ‘‘and (2)’’. 

SEC. 2120. CONFORMING AND TECHNICAL AMENDMENTS. 

(a) REPEALS.—The following provisions of the National Housing 

Act are repealed: 

(1) Subsection (i) of section 203 (12 U.S.C. 1709(i)). 

(2) Subsection (o) of section 203 (12 U.S.C. 1709(o)). 

(3) Subsection (p) of section 203 (12 U.S.C. 1709(p)). 

(4) Subsection (q) of section 203 (12 U.S.C. 1709(q)). 

(5) Section 222 (12 U.S.C. 1715m). 

(6) Section 237 (12 U.S.C. 1715z–2). 

(7) Section 245 (12 U.S.C. 1715z–10). 

(b) DEFINITION OF AREA.—Section 203(u)(2)(A) of the National 

Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking ‘‘shall’’ 

and all that follows and inserting ‘‘means a metropolitan statistical 

area as established by the Office of Management and Budget;’’. 

(c) DEFINITION OF STATE.—Section 201(d) of the National 

Housing Act (12 U.S.C. 1707(d)) is amended by striking ‘‘the Trust 

Territory of the Pacific Islands’’ and inserting ‘‘the Commonwealth 

of the Northern Mariana Islands’’. 

SEC. 2121. INSURANCE OF MORTGAGES. 

Subsection (n)(2) of section 203 of the National Housing Act 

(12 U.S.C. 1709(n)(2)) is amended— 

(1) in subparagraph (A), by inserting ‘‘or subordinate mortgage or’’ before ‘‘lien given’’; and 

(2) in subparagraph (C), by inserting ‘‘or subordinate mortgage or’’ before ‘‘lien’’. 


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122 STAT. 2836 PUBLIC LAW 110–289—JULY 30, 2008 

SEC. 2122. HOME EQUITY CONVERSION MORTGAGES. 

(a) IN GENERAL.—Section 255 of the National Housing Act 

(12 U.S.C. 1715z–20) is amended— 

(1) in subsection (b)(2), insert ‘‘ ‘real estate,’ ’’ after ‘‘ ‘mortgagor’,’’; 

(2) by amending subsection (d)(1) to read as follows: 

‘‘(1) have been originated by a mortgagee approved by 

the Secretary;’’; 

(3) by amending subsection (d)(2)(B) to read as follows: 

‘‘(B) has received adequate counseling, as provided in 

subsection (f), by an independent third party that is not, 

either directly or indirectly, associated with or compensated 

by a party involved in— 

‘‘(i) originating or servicing the mortgage; 

‘‘(ii) funding the loan underlying the mortgage; 

or 

‘‘(iii) the sale of annuities, investments, long-term 

care insurance, or any other type of financial or insurance product;’’; 

(4) in subsection (f)— 

(A) by striking ‘‘(f) INFORMATION SERVICES FOR MORTGAGORS.—’’ and inserting ‘‘(f) COUNSELING SERVICES AND

INFORMATION FOR MORTGAGORS.—’’; and 

(B) by amending the matter preceding paragraph (1) 

to read as follows: ‘‘The Secretary shall provide or cause 

to be provided adequate counseling for the mortgagor, as 

described in subsection (d)(2)(B). Such counseling shall be 

provided by counselors that meet qualification standards 

and follow uniform counseling protocols. The qualification 

standards and counseling protocols shall be established 

by the Secretary within 12 months of the date of enactment 

of the Building American Homeownership Act of 2008. 

The protocols shall require a qualified counselor to discuss 

with each mortgagor information which shall include— 

’’ 

(5) in subsection (g), by striking ‘‘established under section 

203(b)(2)’’ and all that follows through ‘‘located’’ and inserting 

‘‘limitation established under section 305(a)(2) of the Federal 

Home Loan Mortgage Corporation Act for a 1-family residence’’; 

(6) by striking subsection (l); 

(7) by redesignating subsection (m) as subsection (l); 

(8) by amending subsection (l), as so redesignated, to read 

as follows: 

‘‘(l) FUNDING FOR COUNSELING.—The Secretary may use a portion of the mortgage insurance premiums collected under the program under this section to adequately fund the counseling and 

disclosure activities required under subsection (f), including counseling for those homeowners who elect not to take out a home 

equity conversion mortgage, provided that the use of such funds 

is based upon accepted actuarial principles.’’; and 

(9) by adding at the end the following new subsection: 

‘‘(m) AUTHORITY TO INSURE HOME PURCHASE MORTGAGE.— 

‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

this section, the Secretary may insure, upon application by 

a mortgagee, a home equity conversion mortgage upon such 

terms and conditions as the Secretary may prescribe, when 

the home equity conversion mortgage will be used to purchase 

Standards. 

Deadline. 


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a 1- to 4-family dwelling unit, one unit of which the mortgagor 

will occupy as a primary residence, and to provide for any 

future payments to the mortgagor, based on available equity, 

as authorized under subsection (d)(9). 

‘‘(2) LIMITATION ON PRINCIPAL OBLIGATION.—A home equity 

conversion mortgage insured pursuant to paragraph (1) shall 

involve a principal obligation that does not exceed the dollar 

amount limitation determined under section 305(a)(2) of the 

Federal Home Loan Mortgage Corporation Act for a 1-family 

residence. 

‘‘(n) REQUIREMENTS ON MORTGAGE ORIGINATORS.— ‘‘(1) IN GENERAL.—The mortgagee and any other party that 

participates in the origination of a mortgage to be insured 

under this section shall— 

‘‘(A) not participate in, be associated with, or employ 

any party that participates in or is associated with any 

other financial or insurance activity; or 

‘‘(B) demonstrate to the Secretary that the mortgagee 

or other party maintains, or will maintain, firewalls and 

other safeguards designed to ensure that— 

‘‘(i) individuals participating in the origination of 

the mortgage shall have no involvement with, or incentive to provide the mortgagor with, any other financial 

or insurance product; and 

‘‘(ii) the mortgagor shall not be required, directly 

or indirectly, as a condition of obtaining a mortgage 

under this section, to purchase any other financial 

or insurance product. 

‘‘(2) APPROVAL OF OTHER PARTIES.—All parties that participate in the origination of a mortgage to be insured under 

this section shall be approved by the Secretary. 

‘‘(o) PROHIBITION AGAINST REQUIREMENTS TO PURCHASE ADDITIONAL PRODUCTS.—The mortgagor or any other party shall not 

be required by the mortgagee or any other party to purchase an 

insurance, annuity, or other similar product as a requirement or 

condition of eligibility for insurance under subsection (c), except 

for title insurance, hazard, flood, or other peril insurance, or other 

such products that are customary and normal under subsection 

(c), as determined by the Secretary. 

‘‘(p) STUDY TO DETERMINE CONSUMER PROTECTIONS AND UNDERWRITING STANDARDS.—The Secretary shall conduct a study to 

examine and determine appropriate consumer protections and 

underwriting standards to ensure that the purchase of products 

referred to in subsection (o) is appropriate for the consumer. In 

conducting such study, the Secretary shall consult with consumer 

advocates (including recognized experts in consumer protection), 

industry representatives, representatives of counseling organizations, and other interested parties.’’. 

(b) MORTGAGES FOR COOPERATIVES.—Subsection (b) of section 

255 of the National Housing Act (12 U.S.C. 1715z–20(b)) is 

amended— 

(1) in paragraph (4)— 

(A) by inserting ‘‘a first or subordinate mortgage or 

lien’’ before ‘‘on all stock’’; 

(B) by inserting ‘‘unit’’ after ‘‘dwelling’’; and 

(C) by inserting ‘‘a first mortgage or first lien’’ before 

‘‘on a leasehold’’; and 


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122 STAT. 2838 PUBLIC LAW 110–289—JULY 30, 2008 

(2) in paragraph (5), by inserting ‘‘a first or subordinate 

lien on’’ before ‘‘all stock’’. 

(c) LIMITATION ON ORIGINATION FEES.—Section 255 of the 

National Housing Act (12 U.S.C. 1715z–20), as amended by the 

preceding provisions of this section, is further amended by adding 

at the end the following new subsection: 

‘‘(r) LIMITATION ON ORIGINATION FEES.—The Secretary shall 

establish limits on the origination fee that may be charged to 

a mortgagor under a mortgage insured under this section, which 

limitations shall— 

‘‘(1) be equal to 2.0 percent of the maximum claim amount 

of the mortgage, up to a maximum claim amount of $200,000 

plus 1 percent of any portion of the maximum claim amount 

that is greater than $200,000, unless adjusted thereafter on 

the basis of an analysis of— 

‘‘(A) the costs to mortgagors; and 

‘‘(B) the impact on the reverse mortgage market; 

‘‘(2) be subject to a minimum allowable amount; 

‘‘(3) provide that the origination fee may be fully financed 

with the mortgage; 

‘‘(4) include any fees paid to correspondent mortgagees 

approved by the Secretary; 

‘‘(5) have the same effective date as subsection (m)(2) 

regarding the limitation on principal obligation; and 

‘‘(6) be subject to a maximum origination fee of $6,000, 

except that such maximum limit shall be adjusted in accordance 

with the annual percentage increase in the Consumer Price 

Index of the Bureau of Labor Statistics of the Department 

of Labor in increments of $500 only when the percentage 

increase in such index, when applied to the maximum origination fee, produces dollar increases that exceed $500.’’. 

(d) STUDY REGARDING PROGRAM COSTS AND CREDIT AVAILABILITY.— 

(1) IN GENERAL.—The Comptroller General of the United 

States shall conduct a study regarding the costs and availability 

of credit under the home equity conversion mortgages for 

elderly homeowners program under section 255 of the National 

Housing Act (12 U.S.C. 1715z–20) (in this subsection referred 

to as the ‘‘program’’). 

(2) PURPOSE.—The purpose of the study required under 

paragraph (1) is to help Congress analyze and determine the 

effects of limiting the amounts of the costs or fees under the 

program from the amounts charged under the program as of 

the date of the enactment of this title. 

(3) CONTENT OF REPORT.—The study required under paragraph (1) should focus on— 

(A) the cost to mortgagors of participating in the program; 

(B) the financial soundness of the program; 

(C) the availability of credit under the program; and 

(D) the costs to elderly homeowners participating in 

the program, including— 

(i) mortgage insurance premiums charged under 

the program; 

(ii) up-front fees charged under the program; and 

(iii) margin rates charged under the program. 


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(4) TIMING OF REPORT.—Not later than 12 months after 

the date of the enactment of this title, the Comptroller General 

shall submit a report to the Committee on Banking, Housing, 

and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives setting forth the 

results and conclusions of the study required under paragraph 

(1). 

SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM. 

Section 106(a)(2) of the Energy Policy Act of 1992 (42 U.S.C. 

12712 note) is amended— 

(1) by amending subparagraph (C) to read as follows: 

‘‘(C) COSTS OF IMPROVEMENTS.—The cost of cost-effective energy efficiency improvements shall not exceed the 

greater of— 

‘‘(i) 5 percent of the property value (not to exceed 

5 percent of the limit established under section 

203(b)(2)(A)) of the National Housing Act (12 U.S.C. 

1709(b)(2)(A); or 

‘‘(ii) 2 percent of the limit established under section 

203(b)(2)(B) of such Act.’’; and 

(2) by adding at the end the following: 

‘‘(D) LIMITATION.—In any fiscal year, the aggregate 

number of mortgages insured pursuant to this section may 

not exceed 5 percent of the aggregate number of mortgages 

for 1- to 4-family residences insured by the Secretary of 

Housing and Urban Development under title II of the 

National Housing Act (12 U.S.C. 1707 et seq.) during the 

preceding fiscal year.’’. 

SEC. 2124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT SUFFICIENT CREDIT HISTORY. 

(a) ESTABLISHMENT.—Title II of the National Housing Act (12 

U.S.C. 1707 et seq.) is amended by adding at the end the following 

new section: 

‘‘SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT SUFFICIENT CREDIT HISTORY. 

‘‘(a) ESTABLISHMENT.—The Secretary shall carry out a pilot 

program to establish, and make available to mortgagees, an automated process for providing alternative credit rating information 

for mortgagors and prospective mortgagors under mortgages on 

1- to 4-family residences to be insured under this title who have 

insufficient credit histories for determining their creditworthiness. 

Such alternative credit rating information may include rent, utilities, and insurance payment histories, and such other information 

as the Secretary considers appropriate. 

‘‘(b) SCOPE.—The Secretary may carry out the pilot program 

under this section on a limited basis or scope, and may consider 

limiting the program to first-time homebuyers. 

‘‘(c) LIMITATION.—In any fiscal year, the aggregate number 

of mortgages insured pursuant to the automated process established 

under this section may not exceed 5 percent of the aggregate 

number of mortgages for 1- to 4-family residences insured by the 

Secretary under this title during the preceding fiscal year. 

‘‘(d) SUNSET.—After the expiration of the 5-year period beginning on the date of the enactment of the Building American 

Homeownership Act of 2008, the Secretary may not enter into 

12 USC 

1715z–24. 


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122 STAT. 2840 PUBLIC LAW 110–289—JULY 30, 2008 

any new commitment to insure any mortgage, or newly insure 

any mortgage, pursuant to the automated process established under 

this section.’’. 

(b) GAO REPORT.—Not later than the expiration of the twoyear period beginning on the date of the enactment of this subtitle, 

the Comptroller General of the United States shall submit to the 

Congress a report identifying the number of additional mortgagors 

served using the automated process established pursuant to section 

257 of the National Housing Act (as added by the amendment 

made by subsection (a) of this section) and the impact of such 

process and the insurance of mortgages pursuant to such process 

on the safety and soundness of the insurance funds under the 

National Housing Act of which such mortgages are obligations. 

SEC. 2125. HOMEOWNERSHIP PRESERVATION. 

The Secretary of Housing and Urban Development and the 

Commissioner of the Federal Housing Administration, in consultation with industry, the Neighborhood Reinvestment Corporation, 

and other entities involved in foreclosure prevention activities, 

shall— 

(1) develop and implement a plan to improve the Federal 

Housing Administration’s loss mitigation process; and 

(2) report such plan to the Committee on Banking, Housing, 

and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. 

SEC. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM 

PERFORMANCE, STAFFING, AND SALARIES. 

(a) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated for each of fiscal years 2009 through 2013, 

$25,000,000, from negative credit subsidy for the mortgage insurance programs under title II of the National Housing Act, to the 

Secretary of Housing and Urban Development for increasing 

funding for the purpose of improving technology, processes, program 

performance, eliminating fraud, and for providing appropriate 

staffing in connection with the mortgage insurance programs under 

title II of the National Housing Act. 

(b) CERTIFICATION.—The authorization under subsection (a) 

shall not be effective for a fiscal year unless the Secretary of 

Housing and Urban Development has, by rulemaking in accordance 

with section 553 of title 5, United States Code (notwithstanding 

subsections (a)(2), (b)(B), and (d)(3) of such section), made a determination that— 

(1) premiums being, or to be, charged during such fiscal 

year for mortgage insurance under title II of the National 

Housing Act are established at the minimum amount sufficient 

to— 

(A) comply with the requirements of section 205(f) 

of such Act (relating to required capital ratio for the Mutual 

Mortgage Insurance Fund); and 

(B) ensure the safety and soundness of the other mortgage insurance funds under such Act; and 

(2) any negative credit subsidy for such fiscal year resulting 

from such mortgage insurance programs adequately ensures 

the efficient delivery and availability of such programs. 

(c) STUDY AND REPORT.—The Secretary of Housing and Urban 

Development shall conduct a study to obtain recommendations from 

Regulations. 

Reports. 

Plans. 

12 USC 1710 

note. 

Deadline. 


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participants in the private residential (both single family and multifamily) mortgage lending business and the secondary market for 

such mortgages on how best to update and upgrade processes and 

technologies for the mortgage insurance programs under title II 

of the National Housing Act so that the procedures for originating, 

insuring, and servicing of such mortgages conform with those customarily used by secondary market purchasers of residential mortgage loans. Not later than the expiration of the 12-month period 

beginning on the date of the enactment of this title, the Secretary 

shall submit a report to the Congress describing the progress made 

and to be made toward updating and upgrading such processes 

and technology, and providing appropriate staffing for such mortgage insurance programs. 

SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY 

IMPROVEMENTS. 

Section 106(c)(4) of the Housing and Urban Development Act 

of 1968 (12 U.S.C. 1701x(c)(4)) is amended: 

(1) in subparagraph (C)— 

(A) in clause (i), by striking ‘‘; or’’ and inserting a 

semicolon; 

(B) in clause (ii), by striking the period at the end 

and inserting a semicolon; and 

(C) by adding at the end the following: 

‘‘(iii) a significant reduction in the income of the 

household due to divorce or death; or 

‘‘(iv) a significant increase in basic expenses of 

the homeowner or an immediate family member of 

the homeowner (including the spouse, child, or parent 

for whom the homeowner provides substantial care 

or financial assistance) due to— 

‘‘(I) an unexpected or significant increase in 

medical expenses; 

‘‘(II) a divorce; 

‘‘(III) unexpected and significant damage to 

the property, the repair of which will not be covered by private or public insurance; or 

‘‘(IV) a large property-tax increase; or’’; 

(2) by striking the matter that follows subparagraph (C); 

and 

(3) by adding at the end the following: 

‘‘(D) the Secretary of Housing and Urban Development 

determines that the annual income of the homeowner is 

no greater than the annual income established by the Secretary as being of low- or moderate-income.’’. 

SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION. 

(a) ESTABLISHMENT OF PROGRAM.—For the period beginning 

on the date of enactment of this title and ending on the date 

that is 3 years after such date of enactment, the Secretary of 

Housing and Urban Development shall establish and conduct a 

demonstration program to test the effectiveness of alternative forms 

of pre-purchase homeownership counseling for eligible homebuyers. 

(b) FORMS OF COUNSELING.—The Secretary of Housing and 

Urban Development shall provide to eligible homebuyers pre-purchase homeownership counseling under this section in the form 

of— 

12 USC 1701x 

note. 

Deadline. 

Reports. 


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(1) telephone counseling; 

(2) individualized in-person counseling; 

(3) web-based counseling; 

(4) counseling classes; or 

(5) any other form or type of counseling that the Secretary 

may, in his discretion, determine appropriate. 

(c) SIZE OF PROGRAM.—The Secretary shall make available 

the pre-purchase homeownership counseling described in subsection 

(b) to not more than 3,000 eligible homebuyers in any given year. 

(d) INCENTIVE TO PARTICIPATE.—The Secretary of Housing and 

Urban Development may provide incentives to eligible homebuyers 

to participate in the demonstration program established under subsection (a). Such incentives may include the reduction of any insurance premium charges owed by the eligible homebuyer to the Secretary. 

(e) ELIGIBLE HOMEBUYER DEFINED.—For purposes of this section an ‘‘eligible homebuyer’’ means a first-time homebuyer who 

has been approved for a home loan with a loan-to-value ratio 

between 97 percent and 98.5 percent. 

(f) REPORT TO CONGRESS.—The Secretary of Housing and Urban 

Development shall report to the Committee on Banking, Housing, 

and Urban Affairs of the Senate and the Committee on Financial 

Services of the House of Representative— 

(1) on an annual basis, on the progress and results of 

the demonstration program established under subsection (a); 

and 

(2) for the period beginning on the date of enactment of 

this title and ending on the date that is 5 years after such 

date of enactment, on the payment history and delinquency 

rates of eligible homebuyers who participated in the demonstration program. 

SEC. 2129. FRAUD PREVENTION. 

Section 1014 of title 18, United States Code, is amended in 

the first sentence— 

(1) by inserting ‘‘the Federal Housing Administration,’’ 

before ‘‘the Farm Credit Administration’’; and 

(2) by striking ‘‘commitment, or loan’’ and inserting 

‘‘commitment, loan, or insurance agreement or application for 

insurance or a guarantee’’. 

SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM 

INCREASES. 

(a) IN GENERAL.—Notwithstanding any other provision of law, 

including any provision of this title and any amendment made 

by this title— 

(1) for the period beginning on the date of the enactment 

of this title and ending on October 1, 2009, the premiums 

charged for mortgage insurance under multifamily housing programs under the National Housing Act may not be increased 

above the premium amounts in effect under such program 

on October 1, 2006, unless the Secretary of Housing and Urban 

Development determines that, absent such increase, insurance 

of additional mortgages under such program would, under the 

Federal Credit Reform Act of 1990, require the appropriation 

of new budget authority to cover the costs (as such term is 

defined in section 502 of the Federal Credit Reform Act of 

1990 (2 U.S.C. 661a) of such insurance; and 

12 USC 1709 

note. 

Deadline. 


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(2) a premium increase pursuant to paragraph (1) may 

be made only if not less than 30 days prior to such increase 

taking effect, the Secretary of Housing and Urban Development— 

(A) notifies the Committee on Banking, Housing, and 

Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives of such 

increase; and 

(B) publishes notice of such increase in the Federal 

Register. 

(b) WAIVER.—The Secretary of Housing and Urban Development 

may waive the 30-day notice requirement under subsection (a)(2), 

if the Secretary determines that waiting 30-days before increasing 

premiums would cause substantial damage to the solvency of multifamily housing programs under the National Housing Act. 

SEC. 2131. SAVINGS PROVISION. 

Any mortgage insured under title II of the National Housing 

Act before the date of enactment of this subtitle shall continue 

to be governed by the laws, regulations, orders, and terms and 

conditions to which it was subject on the day before the date 

of the enactment of this subtitle. 

SEC. 2132. IMPLEMENTATION. 

The Secretary of Housing and Urban Development shall by 

notice establish any additional requirements that may be necessary 

to immediately carry out the provisions of this subtitle. The notice 

shall take effect upon issuance. 

SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED PREMIUMS. 

(a) IN GENERAL.—During the 12-month period beginning on 

October 1, 2008, the Secretary of Housing and Urban Development 

shall not take any action to implement or carry out risk-based 

premiums, which are designed for mortgage lenders to offer borrowers an FHA-insured product that provides a range of mortgage 

insurance premium pricing, based on the risk that the insurance 

contract represents, as such planned implementation was set forth 

in the Notice published in the Federal Register on May 13, 2008 

(Vol. 73, No. 93, Pages 27703 through 27711) (effective July 14, 

2008). 

(b) INSURANCE OF MORTGAGES UNDER THE NATIONAL HOUSING

ACT.—During the 12-month period beginning on October 1, 2008, 

the Secretary of Housing and Urban Development shall not take 

any action to implement or carry out any other risk-based premium 

product related to the insurance of any mortgage on a single family 

residence under title II of the National Housing Act, where the 

premium price for such new product is based in whole or in part 

on a borrower’s Decision Credit Score, as that term is defined 

in the Notice described under subsection (a), or any successor 

thereto. 

Effective date. 

Effective date. 

Requirements. 

Notification. 

Effective date. 

12 USC 1701 

note. 

12 USC 1701 

note. 

Federal Register, 

publication. 

Notification. 


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Subtitle B—Manufactured Housing Loan 

Modernization 

SEC. 2141. SHORT TITLE. 

This subtitle may be cited as the ‘‘FHA Manufactured Housing 

Loan Modernization Act of 2008’’. 

SEC. 2142. PURPOSES. 

The purposes of this subtitle are— 

(1) to provide adequate funding for FHA-insured manufactured housing loans for low- and moderate-income homebuyers 

during all economic cycles in the manufactured housing 

industry; 

(2) to modernize the FHA title I insurance program for 

manufactured housing loans to enhance participation by Ginnie 

Mae and the private lending markets; and 

(3) to adjust the low loan limits for title I manufactured 

home loan insurance to reflect the increase in costs since such 

limits were last increased in 1992 and to index the limits 

to inflation. 

SEC. 2143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION 

PORTFOLIO. 

The second sentence of section 2(a) of the National Housing 

Act (12 U.S.C. 1703(a)) is amended— 

(1) by striking ‘‘In no case’’ and inserting ‘‘Other than 

in connection with a manufactured home or a lot on which 

to place such a home (or both), in no case’’; and 

(2) by striking ‘‘: Provided, That with’’ and inserting ‘‘. 

With’’. 

SEC. 2144. INSURANCE BENEFITS. 

(a) IN GENERAL.—Subsection (b) of section 2 of the National 

Housing Act (12 U.S.C. 1703(b)), is amended by adding at the 

end the following new paragraph: 

‘‘(8) INSURANCE BENEFITS FOR MANUFACTURED HOUSING

LOANS.—Any contract of insurance with respect to loans, 

advances of credit, or purchases in connection with a manufactured home or a lot on which to place a manufactured home 

(or both) for a financial institution that is executed under 

this title after the date of the enactment of the FHA Manufactured Housing Loan Modernization Act of 2008 by the Secretary 

shall be conclusive evidence of the eligibility of such financial 

institution for insurance, and the validity of any contract of 

insurance so executed shall be incontestable in the hands of 

the bearer from the date of the execution of such contract, 

except for fraud or misrepresentation on the part of such 

institution.’’. 

(b) APPLICABILITY.—The amendment made by subsection (a) 

shall only apply to loans that are registered or endorsed for insurance after the date of the enactment of this title. 

SEC. 2145. MAXIMUM LOAN LIMITS. 

(a) DOLLAR AMOUNTS.—Paragraph (1) of section 2(b) of the 

National Housing Act (12 U.S.C. 1703(b)(1)) is amended— 

(1) in clause (ii) of subparagraph (A), by striking ‘‘$17,500’’ 

and inserting ‘‘$25,090’’; 

12 USC 1703 

note. 

Contracts. 

12 USC 1703 

note. 

12 USC 1701 

note. 

FHA 

Manufactured 

Housing Loan 

Modernization 

Act 

of 2008. 


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(2) in subparagraph (C) by striking ‘‘$48,600’’ and inserting ‘‘$69,678’’; 

(3) in subparagraph (D) by striking ‘‘$64,800’’ and inserting ‘‘$92,904’’; 

(4) in subparagraph (E) by striking ‘‘$16,200’’ and inserting 

‘‘$23,226’’; and 

(5) by realigning subparagraphs (C), (D), and (E) 2 ems 

to the left so that the left margins of such subparagraphs 

are aligned with the margins of subparagraphs (A) and (B). 

(b) ANNUAL INDEXING.—Subsection (b) of section 2 of the 

National Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions of this title, is further amended by adding at 

the end the following new paragraph: 

‘‘(9) ANNUAL INDEXING OF MANUFACTURED HOUSING

LOANS.—The Secretary shall develop a method of indexing in 

order to annually adjust the loan limits established in subparagraphs (A)(ii), (C), (D), and (E) of this subsection. Such index 

shall be based on the manufactured housing price data collected 

by the United States Census Bureau. The Secretary shall establish such index no later than 1 year after the date of the 

enactment of the FHA Manufactured Housing Loan Modernization Act of 2008.’’ 

(c) TECHNICAL AND CONFORMING CHANGES.—Paragraph (1) of 

section 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) 

is amended— 

(1) by striking ‘‘No’’ and inserting ‘‘Except as provided 

in the last sentence of this paragraph, no’’; and 

(2) by adding after and below subparagraph (G) the following: 

‘‘The Secretary shall, by regulation, annually increase the dollar 

amount limitations in subparagraphs (A)(ii), (C), (D), and (E) (as 

such limitations may have been previously adjusted under this 

sentence) in accordance with the index established pursuant to 

paragraph (9).’’. 

SEC. 2146. INSURANCE PREMIUMS. 

Subsection (f) of section 2 of the National Housing Act (12 

U.S.C. 1703(f)) is amended— 

(1) by inserting ‘‘(1) PREMIUM CHARGES.—’’ after ‘‘(f)’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(2) MANUFACTURED HOME LOANS.—Notwithstanding paragraph (1), in the case of a loan, advance of credit, or purchase 

in connection with a manufactured home or a lot on which to 

place such a home (or both), the premium charge for the insurance 

granted under this section shall be paid by the borrower under 

the loan or advance of credit, as follows: 

‘‘(A) At the time of the making of the loan, advance of 

credit, or purchase, a single premium payment in an amount 

not to exceed 2.25 percent of the amount of the original insured 

principal obligation. 

‘‘(B) In addition to the premium under subparagraph (A), 

annual premium payments during the term of the loan, 

advance, or obligation purchased in an amount not exceeding 

1.0 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). 

Regulations. 

Deadline. 


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‘‘(C) Premium charges under this paragraph shall be established in amounts that are sufficient, but do not exceed the 

minimum amounts necessary, to maintain a negative credit 

subsidy for the program under this section for insurance of 

loans, advances of credit, or purchases in connection with a 

manufactured home or a lot on which to place such a home 

(or both), as determined based upon risk to the Federal Government under existing underwriting requirements. 

‘‘(D) The Secretary may increase the limitations on premium payments to percentages above those set forth in subparagraphs (A) and (B), but only if necessary, and not in 

excess of the minimum increase necessary, to maintain a negative credit subsidy as described in subparagraph (C).’’. 

SEC. 2147. TECHNICAL CORRECTIONS. 

(a) DATES.—Subsection (a) of section 2 of the National Housing 

Act (12 U.S.C. 1703(a)) is amended— 

(1) by striking ‘‘on and after July 1, 1939,’’ each place 

such term appears; and 

(2) by striking ‘‘made after the effective date of the Housing 

Act of 1954’’. 

(b) AUTHORITY OF SECRETARY.—Subsection (c) of section 2 of 

the National Housing Act (12 U.S.C. 1703(c)) is amended to read 

as follows: 

‘‘(c) HANDLING AND DISPOSAL OF PROPERTY.— 

‘‘(1) AUTHORITY OF SECRETARY.—Notwithstanding any other 

provision of law, the Secretary may— 

‘‘(A) deal with, complete, rent, renovate, modernize, 

insure, or assign or sell at public or private sale, or otherwise dispose of, for cash or credit in the Secretary’s discretion, and upon such terms and conditions and for such 

consideration as the Secretary shall determine to be reasonable, any real or personal property conveyed to or otherwise 

acquired by the Secretary, in connection with the payment 

of insurance heretofore or hereafter granted under this 

title, including any evidence of debt, contract, claim, personal property, or security assigned to or held by him 

in connection with the payment of insurance heretofore 

or hereafter granted under this section; and 

‘‘(B) pursue to final collection, by way of compromise 

or otherwise, all claims assigned to or held by the Secretary 

and all legal or equitable rights accruing to the Secretary 

in connection with the payment of such insurance, 

including unpaid insurance premiums owed in connection 

with insurance made available by this title. 

‘‘(2) ADVERTISEMENTS FOR PROPOSALS.—Section 3709 of the 

Revised Statutes shall not be construed to apply to any contract 

of hazard insurance or to any purchase or contract for services 

or supplies on account of such property if the amount thereof 

does not exceed $25,000. 

‘‘(3) DELEGATION OF AUTHORITY.—The power to convey and 

to execute in the name of the Secretary, deeds of conveyance, 

deeds of release, assignments and satisfactions of mortgages, 

and any other written instrument relating to real or personal 

property or any interest therein heretofore or hereafter acquired 

by the Secretary pursuant to the provisions of this title may 

be exercised by an officer appointed by the Secretary without 


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the execution of any express delegation of power or power 

of attorney. Nothing in this subsection shall be construed to 

prevent the Secretary from delegating such power by order 

or by power of attorney, in the Secretary’s discretion, to any 

officer or agent the Secretary may appoint.’’. 

SEC. 2148. REVISION OF UNDERWRITING CRITERIA. 

(a) IN GENERAL.—Subsection (b) of section 2 of the National 

Housing Act (12 U.S.C. 1703(b)), as amended by the preceding 

provisions of this title, is further amended by adding at the end 

the following new paragraph: 

‘‘(10) FINANCIAL SOUNDNESS OF MANUFACTURED HOUSING

PROGRAM.—The Secretary shall establish such underwriting criteria for loans and advances of credit in connection with a 

manufactured home or a lot on which to place a manufactured 

home (or both), including such loans and advances represented 

by obligations purchased by financial institutions, as may be 

necessary to ensure that the program under this title for insurance for financial institutions against losses from such loans, 

advances of credit, and purchases is financially sound.’’. 

(b) TIMING.—Not later than the expiration of the 6-month period 

beginning on the date of the enactment of this title, the Secretary 

of Housing and Urban Development shall revise the existing underwriting criteria for the program referred to in paragraph (10) of 

section 2(b) of the National Housing Act (as added by subsection 

(a) of this section) in accordance with the requirements of such 

paragraph. 

SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES. 

Title I of the National Housing Act is amended by adding 

at the end of section 9 the following new section: 

‘‘SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES. 

‘‘(a) IN GENERAL.—Except as provided in subsection (b), the 

provisions of sections 3, 8, 16, 17, 18, and 19 of the Real Estate 

Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall 

apply to each sale of a manufactured home financed with an FHAinsured loan or extension of credit, as well as to services rendered 

in connection with such transactions. 

‘‘(b) AUTHORITY OF THE SECRETARY.—The Secretary is authorized to determine the manner and extent to which the provisions 

of sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement 

Procedures Act of 1974 (12 U.S.C. 2601 et seq.) may reasonably 

be applied to the transactions described in subsection (a), and 

to grant such exemptions as may be necessary to achieve the 

purposes of this section. 

‘‘(c) DEFINITIONS.—For purposes of this section— 

‘‘(1) the term ‘federally related mortgage loan’ as used 

in sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement 

Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include 

an FHA-insured loan or extension of credit made to a borrower 

for the purpose of purchasing a manufactured home that the 

borrower intends to occupy as a personal residence; and 

‘‘(2) the term ‘real estate settlement service’ as used in 

sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement 

Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include 

any service rendered in connection with a loan or extension 

12 USC 1706f. 

12 USC 1703 

note. 


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of credit insured by the Federal Housing Administration for 

the purchase of a manufactured home. 

‘‘(d) UNFAIR AND DECEPTIVE PRACTICES.—In connection with 

the purchase of a manufactured home financed with a loan or 

extension of credit insured by the Federal Housing Administration 

under this title, the Secretary shall prohibit acts or practices in 

connection with loans or extensions of credit that the Secretary 

finds to be unfair, deceptive, or otherwise not in the interests 

of the borrower.’’. 

SEC. 2150. LEASEHOLD REQUIREMENTS. 

Subsection (b) of section 2 of the National Housing Act (12 

U.S.C. 1703(b)), as amended by the preceding provisions of this 

title, is further amended by adding at the end the following new 

paragraph: 

‘‘(11) LEASEHOLD REQUIREMENTS.—No insurance shall be 

granted under this section to any such financial institution 

with respect to any obligation representing any such loan, 

advance of credit, or purchase by it, made for the purposes 

of financing a manufactured home which is intended to be 

situated in a manufactured home community pursuant to a 

lease, unless such lease— 

‘‘(A) expires not less than 3 years after the origination 

date of the obligation; 

‘‘(B) is renewable upon the expiration of the original 

3 year term by successive 1 year terms; and 

‘‘(C) requires the lessor to provide the lessee written 

notice of termination of the lease not less than 180 days 

prior to the expiration of the current lease term in the 

event the lessee is required to move due to the closing 

of the manufactured home community, and further provides 

that failure to provide such notice to the mortgagor in 

a timely manner will cause the lease term, at its expiration, 

to automatically renew for an additional 1 year term.’’. 

TITLE II—MORTGAGE FORECLOSURE 

PROTECTIONS FOR SERVICEMEMBERS 

SEC. 2201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY 

AMOUNT FOR CERTAIN HOUSING LOANS GUARANTEED 

BY THE SECRETARY OF VETERANS AFFAIRS. 

Notwithstanding subparagraph (C) of section 3703(a)(1) of title 

38, United States Code, for purposes of any loan described in 

subparagraph (A)(i)(IV) of such section that is originated during 

the period beginning on the date of the enactment of this Act 

and ending on December 31, 2008, the term ‘‘maximum guaranty 

amount’’ shall mean an amount equal to 25 percent of the higher 

of— 

(1) the limitation determined under section 305(a)(2) of 

the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 

1454(a)(2)) for the calendar year in which the loan is originated 

for a single-family residence; or 

(2) 125 percent of the area median price for a singlefamily residence, but in no case to exceed 175 percent of the 

Definition. 


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limitation determined under such section 305(a)(2) for the calendar year in which the loan is originated for a single-family 

residence. 

SEC. 2202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF THE ARMED FORCES RETURNING FROM 

SERVICE ABROAD. 

(a) IN GENERAL.—The Secretary of Defense shall develop and 

implement a program to advise members of the Armed Forces 

(including members of the National Guard and Reserve) who are 

returning from service on active duty abroad (including service 

in Operation Iraqi Freedom and Operation Enduring Freedom) 

on actions to be taken by such members to prevent or forestall 

mortgage foreclosures. 

(b) ELEMENTS.—The program required by subsection (a) shall 

include the following: 

(1) Credit counseling. 

(2) Home mortgage counseling. 

(3) Such other counseling and information as the Secretary 

considers appropriate for purposes of the program. 

(c) TIMING OF PROVISION OF COUNSELING.—Counseling and 

other information under the program required by subsection (a) 

shall be provided to a member of the Armed Forces covered by 

the program as soon as practicable after the return of the member 

from service as described in subsection (a). 

SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS 

RELATING TO MORTGAGES AND MORTGAGE FORECLOSURES. 

(a) EXTENSION OF PERIOD OF PROTECTIONS AGAINST MORTGAGE

FORECLOSURES.— 

(1) EXTENSION OF PROTECTION PERIOD.—Subsection (c) of 

section 303 of the Servicemembers Civil Relief Act (50 U.S.C. 

App. 533) is amended by striking ‘‘90 days’’ and inserting 

‘‘9 months’’. 

(2) EXTENSION OF STAY OF PROCEEDINGS PERIOD.—Subsection (b) of such section is amended by striking ‘‘90 days’’ 

and inserting ‘‘9 months’’. 

(b) TREATMENT OF MORTGAGES AS OBLIGATIONS SUBJECT TO

INTEREST RATE LIMITATION.—Section 207 of the Servicemembers 

Civil Relief Act (50 U.S.C. App. 527) is amended— 

(1) in subsection (a)(1), by striking ‘‘in excess of 6 percent’’ 

the second place it appears and all that follows and inserting 

‘‘in excess of 6 percent— 

‘‘(A) during the period of military service and one year 

thereafter, in the case of an obligation or liability consisting 

of a mortgage, trust deed, or other security in the nature 

of a mortgage; or 

‘‘(B) during the period of military service, in the case 

of any other obligation or liability.’’; and 

(2) by striking subsection (d) and inserting the following 

new subsection: 

‘‘(d) DEFINITIONS.—In this section: 

‘‘(1) INTEREST.—The term ‘interest’ includes service charges, 

renewal charges, fees, or any other charges (except bona fide 

insurance) with respect to an obligation or liability. 

10 USC 992 

note. 


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122 STAT. 2850 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(2) OBLIGATION OR LIABILITY.—The term ‘obligation or 

liability’ includes an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage.’’. 

(c) EFFECTIVE DATE; SUNSET.— (1) EFFECTIVE DATE.—The amendment made by subsection 

(a) shall take effect on the date of enactment of this Act. 

(2) SUNSET.—The amendments made by subsection (a) shall 

expire on December 31, 2010. Effective January 1, 2011, the 

provisions of subsections (b) and (c) of section 303 of the 

Servicemembers Civil Relief Act, as in effect on the day before 

the date of the enactment of this Act, are hereby revived. 

TITLE III—EMERGENCY ASSISTANCE 

FOR THE REDEVELOPMENT OF ABANDONED AND FORECLOSED HOMES 

SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 

ABANDONED AND FORECLOSED HOMES. 

(a) DIRECT APPROPRIATIONS.—There are appropriated out of 

any money in the Treasury not otherwise appropriated for the 

fiscal year 2008, $4,000,000,000, to remain available until expended, 

for assistance to States and units of general local government 

(as such terms are defined in section 102 of the Housing and 

Community Development Act of 1974 (42 U.S.C. 5302)) for the 

redevelopment of abandoned and foreclosed upon homes and residential properties. 

(b) ALLOCATION OF APPROPRIATED AMOUNTS.— 

(1) IN GENERAL.—The amounts appropriated or otherwise 

made available to States and units of general local government 

under this section shall be allocated based on a funding formula 

established by the Secretary of Housing and Urban Development (in this title referred to as the ‘‘Secretary’’). 

(2) FORMULA TO BE DEVISED SWIFTLY.—The funding formula 

required under paragraph (1) shall be established not later 

than 60 days after the date of enactment of this section. 

(3) CRITERIA.—The funding formula required under paragraph (1) shall ensure that any amounts appropriated or otherwise made available under this section are allocated to States 

and units of general local government with the greatest need, 

as such need is determined in the discretion of the Secretary 

based on— 

(A) the number and percentage of home foreclosures 

in each State or unit of general local government; 

(B) the number and percentage of homes financed by 

a subprime mortgage related loan in each State or unit 

of general local government; and 

(C) the number and percentage of homes in default 

or delinquency in each State or unit of general local government. 

(4) DISTRIBUTION.—Amounts appropriated or otherwise 

made available under this section shall be distributed according 

to the funding formula established by the Secretary under 

paragraph (1) not later than 30 days after the establishment 

of such formula. 

(c) USE OF FUNDS.— 

Deadline. 

Deadline. 

State and 

local 

governments. 

42 USC 5301 

note. 

50 USC app. 533 

note. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2851 

(1) IN GENERAL.—Any State or unit of general local government that receives amounts pursuant to this section shall, 

not later than 18 months after the receipt of such amounts, 

use such amounts to purchase and redevelop abandoned and 

foreclosed homes and residential properties. 

(2) PRIORITY.—Any State or unit of general local government that receives amounts pursuant to this section shall in 

distributing such amounts give priority emphasis and consideration to those metropolitan areas, metropolitan cities, urban 

areas, rural areas, low- and moderate-income areas, and other 

areas with the greatest need, including those— 

(A) with the greatest percentage of home foreclosures; 

(B) with the highest percentage of homes financed 

by a subprime mortgage related loan; and 

(C) identified by the State or unit of general local 

government as likely to face a significant rise in the rate 

of home foreclosures. 

(3) ELIGIBLE USES.—Amounts made available under this 

section may be used to— 

(A) establish financing mechanisms for purchase and 

redevelopment of foreclosed upon homes and residential 

properties, including such mechanisms as soft-seconds, loan 

loss reserves, and shared-equity loans for low- and moderate-income homebuyers; 

(B) purchase and rehabilitate homes and residential 

properties that have been abandoned or foreclosed upon, 

in order to sell, rent, or redevelop such homes and properties; 

(C) establish land banks for homes that have been 

foreclosed upon; 

(D) demolish blighted structures; and 

(E) redevelop demolished or vacant properties. 

(d) LIMITATIONS.— 

(1) ON PURCHASES.—Any purchase of a foreclosed upon 

home or residential property under this section shall be at 

a discount from the current market appraised value of the 

home or property, taking into account its current condition, 

and such discount shall ensure that purchasers are paying 

below-market value for the home or property. 

(2) REHABILITATION.—Any rehabilitation of a foreclosedupon home or residential property under this section shall 

be to the extent necessary to comply with applicable laws, 

codes, and other requirements relating to housing safety, 

quality, and habitability, in order to sell, rent, or redevelop 

such homes and properties. Rehabilitation may include 

improvements to increase the energy efficiency or conservation 

of such homes and properties or provide a renewable energy 

source or sources for such homes and properties. 

(3) SALE OF HOMES.—If an abandoned or foreclosed upon 

home or residential property is purchased, redeveloped, or 

otherwise sold to an individual as a primary residence, then 

such sale shall be in an amount equal to or less than the 

cost to acquire and redevelop or rehabilitate such home or 

property up to a decent, safe, and habitable condition. 

(4) REINVESTMENT OF PROFITS.— (A) PROFITS FROM SALES, RENTALS, AND REDEVELOP- MENT.— 

Discounts. 

Urban and 

rural areas. 

Deadline. 


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122 STAT. 2852 PUBLIC LAW 110–289—JULY 30, 2008 

(i) 5-YEAR REINVESTMENT PERIOD.—During the 5- 

year period following the date of enactment of this 

Act, any revenue generated from the sale, rental, 

redevelopment, rehabilitation, or any other eligible use 

that is in excess of the cost to acquire and redevelop 

(including reasonable development fees) or rehabilitate 

an abandoned or foreclosed upon home or residential 

property shall be provided to and used by the State 

or unit of general local government in accordance with, 

and in furtherance of, the intent and provisions of 

this section. 

(ii) DEPOSITS IN THE TREASURY.— 

(I) PROFITS.—Upon the expiration of the 5- 

year period set forth under clause (i), any revenue 

generated from the sale, rental, redevelopment, 

rehabilitation, or any other eligible use that is 

in excess of the cost to acquire and redevelop 

(including reasonable development fees) or 

rehabilitate an abandoned or foreclosed upon home 

or residential property shall be deposited in the 

Treasury of the United States as miscellaneous 

receipts, unless the Secretary approves a request 

to use the funds for purposes under this Act. 

(II) OTHER AMOUNTS.—Upon the expiration of 

the 5-year period set forth under clause (i), any 

other revenue not described under subclause (I) 

generated from the sale, rental, redevelopment, 

rehabilitation, or any other eligible use of an abandoned or foreclosed upon home or residential property shall be deposited in the Treasury of the 

United States as miscellaneous receipts. 

(B) OTHER REVENUES.—Any revenue generated under 

subparagraphs (A), (C) or (D) of subsection (c)(3) shall 

be provided to and used by the State or unit of general 

local government in accordance with, and in furtherance 

of, the intent and provisions of this section. 

(e) RULES OF CONSTRUCTION.— 

(1) IN GENERAL.—Except as otherwise provided by this 

section, amounts appropriated, revenues generated, or amounts 

otherwise made available to States and units of general local 

government under this section shall be treated as though such 

funds were community development block grant funds under 

title I of the Housing and Community Development Act of 

1974 (42 U.S.C. 5301 et seq.). 

(2) NO MATCH.—No matching funds shall be required in 

order for a State or unit of general local government to receive 

any amounts under this section. 

(f) AUTHORITY TO SPECIFY ALTERNATIVE REQUIREMENTS.— 

(1) IN GENERAL.—In administering any amounts appropriated or otherwise made available under this section, the 

Secretary may specify alternative requirements to any provision 

under title I of the Housing and Community Development 

Act of 1974 (except for those related to fair housing, nondiscrimination, labor standards, and the environment) in 

accordance with the terms of this section and for the sole 

purpose of expediting the use of such funds. 

State and local 

governments. 

State and local 

governments. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2853 

(2) NOTICE.—The Secretary shall provide written notice 

of its intent to exercise the authority to specify alternative 

requirements under paragraph (1) to the Committee on 

Banking, Housing and Urban Affairs of the Senate and the 

Committee on Financial Services of the House of Representatives not later than 10 business days before such exercise 

of authority is to occur. 

(3) LOW AND MODERATE INCOME REQUIREMENT.— (A) IN GENERAL.—Notwithstanding the authority of the 

Secretary under paragraph (1)— 

(i) all of the funds appropriated or otherwise made 

available under this section shall be used with respect 

to individuals and families whose income does not 

exceed 120 percent of area median income; and 

(ii) not less than 25 percent of the funds appropriated or otherwise made available under this section 

shall be used for the purchase and redevelopment of 

abandoned or foreclosed upon homes or residential 

properties that will be used to house individuals or 

families whose incomes do not exceed 50 percent of 

area median income. 

(B) RECURRENT REQUIREMENT.—The Secretary shall, 

by rule or order, ensure, to the maximum extent practicable 

and for the longest feasible term, that the sale, rental, 

or redevelopment of abandoned and foreclosed upon homes 

and residential properties under this section remain affordable to individuals or families described in subparagraph 

(A). 

(g) PERIODIC AUDITS.—In consultation with the Secretary of 

Housing and Urban Development, the Comptroller General of the 

United States shall conduct periodic audits to ensure that funds 

appropriated, made available, or otherwise distributed under this 

section are being used in a manner consistent with the criteria 

provided in this section. 

SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES. 

Notwithstanding any other provision of this Act or the amendments made by this Act, each State shall receive not less than 

0.5 percent of funds made available under section 2301 (relating 

to emergency assistance for the redevelopment of abandoned and 

foreclosed homes). 

SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT 

DOMAIN. 

No State or unit of general local government may use any 

amounts received pursuant to section 2301 to fund any project 

that seeks to use the power of eminent domain, unless eminent 

domain is employed only for a public use: Provided, That for purposes of this section, public use shall not be construed to include 

economic development that primarily benefits private entities. 

SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS. 

(a) IN GENERAL.—None of the funds made available under 

this title or title IV shall be distributed to— 

(1) an organization which has been indicted for a violation 

under Federal law relating to an election for Federal office; 

or 

(2) an organization which employs applicable individuals. 

42 USC 5301 

note. 

42 USC 5301 

note. 

42 USC 5301 

note. 

Regulations. 

Orders. 

Deadline. 


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122 STAT. 2854 PUBLIC LAW 110–289—JULY 30, 2008 

(b) APPLICABLE INDIVIDUALS DEFINED.—In this section, the term 

‘‘applicable individual’’ means an individual who— 

(1) is— 

(A) employed by the organization in a permanent or 

temporary capacity; 

(B) contracted or retained by the organization; or 

(C) acting on behalf of, or with the express or apparent 

authority of, the organization; and 

(2) has been indicted for a violation under Federal law 

relating to an election for Federal office. 

SEC. 2305. COUNSELING INTERMEDIARIES. 

Notwithstanding any other provision of this Act, the amount 

appropriated under section 2301(a) of this Act shall be 

$3,920,000,000 and the amount appropriated under section 2401 

of this Act shall be $180,000,000: Provided, That of the amount 

appropriated under section 2401 of this Act pursuant to this section, 

not less than 15 percent shall be provided to counseling organizations that target counseling services regarding loss mitigation to 

minority and low-income homeowners or provide such services in 

neighborhoods with high concentrations of minority and low-income 

homeowners: Provided further, That of amounts appropriated under 

such section 2401 $30,000,000 shall be used by the Neighborhood 

Reinvestment Corporation (referred to in this section as the ‘‘NRC’’) 

to make grants to counseling intermediaries approved by the 

Department of Housing and Urban Development or the NRC to 

hire attorneys to assist homeowners who have legal issues directly 

related to the homeowner’s foreclosure, delinquency or short sale. 

Such attorneys shall be capable of assisting homeowners of owneroccupied homes with mortgages in default, in danger of default, 

or subject to or at risk of foreclosure and who have legal issues 

that cannot be handled by counselors already employed by such 

intermediaries: Provided further, That of the amounts provided 

for in the prior provisos the NRC shall give priority consideration 

to counseling intermediaries and legal organizations that (1) provide 

legal assistance in the 100 metropolitan statistical areas (as defined 

by the Director of the Office of Management and Budget) with 

the highest home foreclosure rates, and (2) have the capacity to 

begin using the financial assistance within 90 days after receipt 

of the assistance: Provided further, That no funds provided under 

this Act shall be used to provide, obtain, or arrange on behalf 

of a homeowner, legal representation involving or for the purposes 

of civil litigation: Provided further, That the NRC, in awarding 

counseling grants under section 2401 of this Act, may consider, 

where appropriate, whether the entity has implemented a written 

plan for providing in-person counseling and for making contact, 

including personal contact, with defaulted mortgagors, for the purpose of providing counseling or providing information about available counseling. 

TITLE IV—HOUSING COUNSELING 

RESOURCES 

SEC. 2401. HOUSING COUNSELING RESOURCES. 

There are appropriated out of any money in the Treasury 

not otherwise appropriated for the fiscal year 2008, for an additional 

Appropriations 

authorization. 

Legal assistance. 

Deadline. 

Grants. 

Disadvantaged 

persons. 

42 USC 5301 

note. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2855 

amount for the ‘‘Neighborhood Reinvestment Corporation—Payment 

to the Neighborhood Reinvestment Corporation’’ $100,000,000, to 

remain available until December 31, 2008, for foreclosure mitigation 

activities under the terms and conditions contained in the second 

undesignated paragraph (beginning with the phrase ‘‘For an additional amount’’) under the heading ‘‘Neighborhood Reinvestment 

Corporation—Payment to the Neighborhood Reinvestment Corporation’’ of Public Law 110–161. 

SEC. 2402. CREDIT COUNSELING. 

(a) IN GENERAL.—Entities approved by the Neighborhood 

Reinvestment Corporation or the Secretary and State housing 

finance entities receiving funds under this title shall work to identify and coordinate with non-profit organizations operating national 

or statewide toll-free foreclosure prevention hotlines, including those 

that— 

(1) serve as a consumer referral source and data repository 

for borrowers experiencing some form of delinquency or foreclosure; 

(2) connect callers with local housing counseling agencies 

approved by the Neighborhood Reinvestment Corporation or 

the Secretary to assist with working out a positive resolution 

to their mortgage delinquency or foreclosure; or 

(3) facilitate or offer free assistance to help homeowners 

to understand their options, negotiate solutions, and find the 

best resolution for their particular circumstances. 

TITLE V—MORTGAGE DISCLOSURE 

IMPROVEMENT ACT 

SEC. 2501. SHORT TITLE. 

This title may be cited as the ‘‘Mortgage Disclosure Improvement Act of 2008’’. 

SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES. 

(a) TRUTH IN LENDING ACT DISCLOSURES.—Section 128(b)(2) 

of the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended— 

(1) by inserting ‘‘(A)’’ before ‘‘In the’’; 

(2) by striking ‘‘a residential mortgage transaction, as 

defined in section 103(w)’’ and inserting ‘‘any extension of credit 

that is secured by the dwelling of a consumer’’; 

(3) by striking ‘‘before the credit is extended, or’’ and 

inserting ‘‘and’’; 

(4) by inserting ‘‘, which shall be at least 7 business days 

before consummation of the transaction’’ after ‘‘written application’’; 

(5) by striking ‘‘, whichever is earlier’’; and 

(6) by striking ‘‘If the’’ and all that follows through the 

end of the paragraph and inserting the following: 

‘‘(B) In the case of an extension of credit that is secured 

by the dwelling of a consumer, the disclosures provided under 

subparagraph (A), shall be in addition to the other disclosures 

required by subsection (a), and shall— 

‘‘(i) state in conspicuous type size and format, the 

following: ‘You are not required to complete this agreement 

Creditors. 

15 USC 1601 

note. 


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122 STAT. 2856 PUBLIC LAW 110–289—JULY 30, 2008 

merely because you have received these disclosures or 

signed a loan application.’; and 

‘‘(ii) be provided in the form of final disclosures at 

the time of consummation of the transaction, in the form 

and manner prescribed by this section. 

‘‘(C) In the case of an extension of credit that is secured 

by the dwelling of a consumer, under which the annual rate 

of interest is variable, or with respect to which the regular 

payments may otherwise be variable, in addition to the other 

disclosures required by subsection (a), the disclosures provided 

under this subsection shall do the following: 

‘‘(i) Label the payment schedule as follows: ‘Payment 

Schedule: Payments Will Vary Based on Interest Rate 

Changes’. 

‘‘(ii) State in conspicuous type size and format examples 

of adjustments to the regular required payment on the 

extension of credit based on the change in the interest 

rates specified by the contract for such extension of credit. 

Among the examples required to be provided under this 

clause is an example that reflects the maximum payment 

amount of the regular required payments on the extension 

of credit, based on the maximum interest rate allowed 

under the contract, in accordance with the rules of the 

Board. Prior to issuing any rules pursuant to this clause, 

the Board shall conduct consumer testing to determine 

the appropriate format for providing the disclosures 

required under this subparagraph to consumers so that 

such disclosures can be easily understood, including the 

fact that the initial regular payments are for a specific 

time period that will end on a certain date, that payments 

will adjust afterwards potentially to a higher amount, and 

that there is no guarantee that the borrower will be able 

to refinance to a lower amount. 

‘‘(D) In any case in which the disclosure statement under 

subparagraph (A) contains an annual percentage rate of interest 

that is no longer accurate, as determined under section 107(c), 

the creditor shall furnish an additional, corrected statement 

to the borrower, not later than 3 business days before the 

date of consummation of the transaction. 

‘‘(E) The consumer shall receive the disclosures required 

under this paragraph before paying any fee to the creditor 

or other person in connection with the consumer’s application 

for an extension of credit that is secured by the dwelling of 

a consumer. If the disclosures are mailed to the consumer, 

the consumer is considered to have received them 3 business 

days after they are mailed. A creditor or other person may 

impose a fee for obtaining the consumer’s credit report before 

the consumer has received the disclosures under this paragraph, provided the fee is bona fide and reasonable in amount. 

‘‘(F) WAIVER OF TIMELINESS OF DISCLOSURES.—To expedite 

consummation of a transaction, if the consumer determines 

that the extension of credit is needed to meet a bona fide 

personal financial emergency, the consumer may waive or 

modify the timing requirements for disclosures under subparagraph (A), provided that— 

‘‘(i) the term ‘bona fide personal emergency’ may be 

further defined in regulations issued by the Board; 

Definition. 

Regulations. 

Deadline. 

Consumer 

testing. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2857 

‘‘(ii) the consumer provides to the creditor a dated, 

written statement describing the emergency and specifically waiving or modifying those timing requirements, 

which statement shall bear the signature of all consumers 

entitled to receive the disclosures required by this paragraph; and 

‘‘(iii) the creditor provides to the consumers at or before 

the time of such waiver or modification, the final disclosures required by paragraph (1). 

‘‘(G) The requirements of subparagraphs (B), (C), (D) and 

(E) shall not apply to extensions of credit relating to plans 

described in section 101(53D) of title 11, United States Code.’’. 

(b) CIVIL LIABILITY.—Section 130(a) of the Truth in Lending 

Act (15 U.S.C. 1640(a)) is amended— 

(1) in paragraph (2)(A)(iii), by striking ‘‘not less than $200 

or greater than $2,000’’ and inserting ‘‘not less than $400 

or greater than $4,000’’; and 

(2) in the penultimate sentence of the undesignated matter 

following paragraph (4)— 

(A) by inserting ‘‘or section 128(b)(2)(C)(ii),’’ after 

‘‘128(a),’’; and 

(B) by inserting ‘‘or section 128(b)(2)(C)(ii)’’ before the 

period. 

(c) EFFECTIVE DATES.— 

(1) GENERAL DISCLOSURES.—Except as provided in paragraph (2), the amendments made by subsection (a) shall become 

effective 12 months after the date of enactment of this Act. 

(2) VARIABLE INTEREST RATES.—Subparagraph (C) of section 

128(b)(2) of the Truth in Lending Act (15 U.S.C. 1638(b)(2)(C)), 

as added by subsection (a) of this section, shall become effective 

on the earlier of— 

(A) the compliance date established by the Board for 

such purpose, by regulation; or 

(B) 30 months after the date of enactment of this 

Act. 

SEC. 2503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR 

DEPOSITORY INSTITUTIONS. 

(a) NATIONAL BANKS.—The first sentence of the paragraph designated as the ‘‘Eleventh’’ of section 5136 of the Revised Statutes 

of the United States (12 U.S.C. 24) is amended by striking ‘‘promotes 

the public welfare by benefitting primarily’’ and inserting ‘‘is 

designed primarily to promote the public welfare, including the 

welfare of’’. 

(b) STATE MEMBER BANKS.—The first sentence of the 23rd 

paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 338a) 

is amended by striking ‘‘promotes the public welfare by benefitting 

primarily’’ and inserting ‘‘is designed primarily to promote the 

public welfare, including the welfare of’’. 

15 USC 1638 

note. 


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122 STAT. 2858 PUBLIC LAW 110–289—JULY 30, 2008 

TITLE VI—VETERANS HOUSING 

MATTERS 

SEC. 2601. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS 

FOR TOTALLY DISABLED MEMBERS OF THE ARMED 

FORCES BEFORE DISCHARGE OR RELEASE FROM THE 

ARMED FORCES. 

Section 1717 of title 38, United States Code, is amended by 

adding at the end the following new subsection: 

‘‘(d)(1) In the case of a member of the Armed Forces who, 

as determined by the Secretary, has a disability permanent in 

nature incurred or aggravated in the line of duty in the active 

military, naval, or air service, the Secretary may furnish improvements and structural alterations for such member for such disability 

or as otherwise described in subsection (a)(2) while such member 

is hospitalized or receiving outpatient medical care, services, or 

treatment for such disability if the Secretary determines that such 

member is likely to be discharged or released from the Armed 

Forces for such disability. 

‘‘(2) The furnishing of improvements and alterations under 

paragraph (1) in connection with the furnishing of medical services 

described in subparagraph (A) or (B) of subsection (a)(2) shall 

be subject to the limitation specified in the applicable subparagraph.’’. 

SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS 

AND ASSISTANCE FOR MEMBERS OF THE ARMED FORCES 

WITH SERVICE-CONNECTED DISABILITIES AND INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES. 

(a) ELIGIBILITY.—Chapter 21 of title 38, United States Code, 

is amended by inserting after section 2101 the following new section: 

‘‘§ 2101A. Eligibility for benefits and assistance: members of 

the Armed Forces with service-connected disabilities; individuals residing outside the United 

States 

‘‘(a) MEMBERS WITH SERVICE-CONNECTED DISABILITIES.—(1) 

The Secretary may provide assistance under this chapter to a 

member of the Armed Forces serving on active duty who is suffering 

from a disability that meets applicable criteria for benefits under 

this chapter if the disability is incurred or aggravated in line 

of duty in the active military, naval, or air service. Such assistance 

shall be provided to the same extent as assistance is provided 

under this chapter to veterans eligible for assistance under this 

chapter and subject to the same requirements as veterans under 

this chapter. 

‘‘(2) For purposes of this chapter, any reference to a veteran 

or eligible individual shall be treated as a reference to a member 

of the Armed Forces described in subsection (a) who is similarly 

situated to the veteran or other eligible individual so referred 

to. 

‘‘(b) BENEFITS AND ASSISTANCE FOR INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES.—(1) Subject to paragraph (2), the Secretary may, at the Secretary’s discretion, provide benefits and 

assistance under this chapter (other than benefits under section 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2859 

2106 of this title) to any individual otherwise eligible for such 

benefits and assistance who resides outside the United States. 

‘‘(2) The Secretary may provide benefits and assistance to an 

individual under paragraph (1) only if— 

‘‘(A) the country or political subdivision in which the 

housing or residence involved is or will be located permits 

the individual to have or acquire a beneficial property interest 

(as determined by the Secretary) in such housing or residence; 

and 

‘‘(B) the individual has or will acquire a beneficial property 

interest (as so determined) in such housing or residence. 

‘‘(c) REGULATIONS.—Benefits and assistance under this chapter 

by reason of this section shall be provided in accordance with 

such regulations as the Secretary may prescribe.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) REPEAL OF SUPERSEDED AUTHORITY.—Section 2101 of 

title 38, United States Code, is amended— 

(A) by striking subsection (c); and 

(B) by redesignating subsection (d) as subsection (c). 

(2) LIMITATIONS ON ASSISTANCE.—Section 2102 of title 38, 

United States Code, is amended— 

(A) in subsection (a)— 

(i) by striking ‘‘veteran’’ each place it appears and 

inserting ‘‘individual’’; and 

(ii) in paragraph (3), by striking ‘‘veteran’s’’ and 

inserting ‘‘individual’s’’; 

(B) in subsection (b)(1), by striking ‘‘a veteran’’ and 

inserting ‘‘an individual’’; 

(C) in subsection (c)— 

(i) by striking ‘‘a veteran’’ and inserting ‘‘an individual’’; and 

(ii) by striking ‘‘the veteran’’ each place it appears 

and inserting ‘‘the individual’’; and 

(D) in subsection (d), by striking ‘‘a veteran’’ each place 

it appears and inserting ‘‘an individual’’. 

(3) ASSISTANCE FOR INDIVIDUALS TEMPORARILY RESIDING

IN HOUSING OF FAMILY MEMBER.—Section 2102A of title 38, 

United States Code, is amended— 

(A) by striking ‘‘veteran’’ each place it appears (other 

than in subsection (b)) and inserting ‘‘individual’’; 

(B) in subsection (a), by striking ‘‘veteran’s’’ each place 

it appears and inserting ‘‘individual’s’’; and 

(C) in subsection (b), by striking ‘‘a veteran’’ each place 

it appears and inserting ‘‘an individual’’. 

(4) FURNISHING OF PLANS AND SPECIFICATIONS.—Section 

2103 of title 38, United States Code, is amended by striking 

‘‘veterans’’ both places it appears and inserting ‘‘individuals’’. 

(5) CONSTRUCTION OF BENEFITS.—Section 2104 of title 38, 

United States Code, is amended— 

(A) in subsection (a), by striking ‘‘veteran’’ each place 

it appears and inserting ‘‘individual’’; and 

(B) in subsection (b)— 

(i) in the first sentence, by striking ‘‘A veteran’’ 

and inserting ‘‘An individual’’; 

(ii) in the second sentence, by striking ‘‘a veteran’’ 

and inserting ‘‘an individual’’; and 


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122 STAT. 2860 PUBLIC LAW 110–289—JULY 30, 2008 

(iii) by striking ‘‘such veteran’’ each place it 

appears and inserting ‘‘such individual’’. 

(6) VETERANS’ MORTGAGE LIFE INSURANCE.—Section 2106 

of title 38, United States Code, is amended— 

(A) in subsection (a)— 

(i) by striking ‘‘any eligible veteran’’ and inserting 

‘‘any eligible individual’’; and 

(ii) by striking ‘‘the veterans’ ’’ and inserting ‘‘the 

individual’s’’; 

(B) in subsection (b), by striking ‘‘an eligible veteran’’ 

and inserting ‘‘an eligible individual’’; 

(C) in subsection (e), by striking ‘‘an eligible veteran’’ 

and inserting ‘‘an individual’’; 

(D) in subsection (h), by striking ‘‘each veteran’’ and 

inserting ‘‘each individual’’; 

(E) in subsection (i), by striking ‘‘the veteran’s’’ each 

place it appears and inserting ‘‘the individual’s’’; 

(F) by striking ‘‘the veteran’’ each place it appears 

and inserting ‘‘the individual’’; and 

(G) by striking ‘‘a veteran’’ each place it appears and 

inserting ‘‘an individual’’. 

(7) HEADING AMENDMENTS.—(A) The heading of section 

2101 of title 38, United States Code, is amended to read as 

follows: 

‘‘§ 2101. Acquisition and adaptation of housing: eligible veterans’’. 

(B) The heading of section 2102A of such title is amended 

to read as follows: 

‘‘§ 2102A. Assistance for individuals residing temporarily in 

housing owned by a family member’’. 

(8) CLERICAL AMENDMENTS.—The table of sections at the 

beginning of chapter 21 of title 38, United States Code, is 

amended— 

(A) by striking the item relating to section 2101 and 

inserting the following new item: 

‘‘2101. Acquisition and adaptation of housing: eligible veterans.’’; 

(B) by inserting after the item relating to section 2101, 

as so amended, the following new item: 

‘‘2101A. Eligibility for benefits and assistance: members of the Armed Forces with 

service-connected disabilities; individuals residing outside the United 

States.’’; 

and 

(C) by striking the item relating to section 2102A and 

inserting the following new item: 

‘‘2102A. Assistance for individuals residing temporarily in housing owned by a family member.’’. 

SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR INDIVIDUALS WITH SEVERE BURN INJURIES. 

Section 2101 of title 38, United States Code, is amended— 

(1) in subsection (a)(2), by adding at the end the following 

new subparagraph: 

‘‘(E) The disability is due to a severe burn injury (as determined pursuant to regulations prescribed by the Secretary).’’; 

and 

(2) in subsection (b)(2)— 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2861 

(A) by striking ‘‘either’’ and inserting ‘‘any’’; and 

(B) by adding at the end the following new subparagraph: 

‘‘(C) The disability is due to a severe burn injury (as so 

determined).’’. 

SEC. 2604. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING 

TEMPORARILY IN HOUSING OWNED BY A FAMILY 

MEMBER. 

Section 2102A(e) of title 38, United States Code, is amended 

by striking ‘‘after the end of the five-year period that begins on 

the date of the enactment of the Veterans’ Housing Opportunity 

and Benefits Improvement Act of 2006’’ and inserting ‘‘after 

December 31, 2011’’. 

SEC. 2605. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR 

DISABLED VETERANS. 

(a) IN GENERAL.—Section 2102 of title 38, United States Code, 

is amended— 

(1) in subsection (b)(2), by striking ‘‘$10,000’’ and inserting ‘‘$12,000’’; 

(2) in subsection (d)— 

(A) in paragraph (1), by striking ‘‘$50,000’’ and 

inserting ‘‘$60,000’’; and 

(B) in paragraph (2), by striking ‘‘$10,000’’ and 

inserting ‘‘$12,000’’; and 

(3) by adding at the end the following new subsection: 

‘‘(e)(1) Effective on October 1 of each year (beginning in 2009), 

the Secretary shall increase the amounts described in subsection 

(b)(2) and paragraphs (1) and (2) of subsection (d) in accordance 

with this subsection. 

‘‘(2) The increase in amounts under paragraph (1) to take 

effect on October 1 of a year shall be by an amount of such 

amounts equal to the percentage by which— 

‘‘(A) the residential home cost-of-construction index for the 

preceding calendar year, exceeds 

‘‘(B) the residential home cost-of-construction index for the 

year preceding the year described in subparagraph (A). 

‘‘(3) The Secretary shall establish a residential home cost-ofconstruction index for the purposes of this subsection. The index 

shall reflect a uniform, national average change in the cost of 

residential home construction, determined on a calendar year basis. 

The Secretary may use an index developed in the private sector 

that the Secretary determines is appropriate for purposes of this 

subsection.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on July 1, 2008, and shall apply with respect 

to payments made in accordance with section 2102 of title 38, 

United States Code, on or after that date. 

SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED 

INDIVIDUALS. 

(a) IN GENERAL.—Not later than December 31, 2008, the Secretary of Veterans Affairs shall submit to the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs 

of the House of Representatives a report that contains an assessment of the adequacy of the authorities available to the Secretary 

under law to assist eligible disabled individuals in acquiring— 

Deadline. 

38 USC 2102 

note. 

Effective date. 


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122 STAT. 2862 PUBLIC LAW 110–289—JULY 30, 2008 

(1) suitable housing units with special fixtures or movable 

facilities required for their disabilities, and necessary land 

therefor; 

(2) such adaptations to their residences as are reasonably 

necessary because of their disabilities; and 

(3) residences already adapted with special features determined by the Secretary to be reasonably necessary as a result 

of their disabilities. 

(b) FOCUS ON PARTICULAR DISABILITIES.—The report required 

by subsection (a) shall set forth a specific assessment of the needs 

of— 

(1) veterans who have disabilities that are not described 

in subsections (a)(2) and (b)(2) of section 2101 of title 38, 

United States Code; and 

(2) other disabled individuals eligible for specially adapted 

housing under chapter 21 of such title by reason of section 

2101A of such title (as added by section 2602(a) of this Act) 

who have disabilities that are not described in such subsections. 

SEC. 2607. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE 

FOR INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY 

A FAMILY MEMBER ON PERMANENT BASIS. 

Not later than December 31, 2008, the Secretary of Veterans 

Affairs shall submit to the Committee on Veterans’ Affairs of the 

Senate and the Committee on Veterans’ Affairs of the House of 

Representatives a report on the advisability of providing assistance 

under section 2102A of title 38, United States Code, to veterans 

described in subsection (a) of such section, and to members of 

the Armed Forces covered by such section 2102A by reason of 

section 2101A of title 38, United States Code (as added by section 

2602(a) of this Act), who reside with family members on a permanent basis. 

SEC. 2608. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF SECTION 8 AND OTHER PUBLIC HOUSING PROGRAMS. 

Section 3(b)(4) of the United States Housing Act of 1937 (42 

U.S.C. 1437a(3)(b)(4)) is amended by inserting ‘‘or any deferred 

Department of Veterans Affairs disability benefits that are received 

in a lump sum amount or in prospective monthly amounts’’ before 

‘‘may not be considered’’. 

SEC. 2609. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD EFFECTS FOR MEMBERS OF THE ARMED FORCES 

WHO RELOCATE DUE TO FORECLOSURE OF LEASED 

HOUSING. 

Section 406 of title 37, United States Code, is amended— 

(1) by redesignating subsections (k) and (l) as subsections 

(l) and (m), respectively; and 

(2) by inserting after subsection (j) the following new subsection (k): 

‘‘(k) A member of the armed forces who relocates from leased 

or rental housing by reason of the foreclosure of such housing 

is entitled to transportation of baggage and household effects under 

subsection (b)(1) in the same manner, and subject to the same 

conditions and limitations, as similarly circumstanced members 

entitled to transportation of baggage and household effects under 

that subsection.’’. 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2863 

TITLE VII—SMALL PUBLIC HOUSING 

AUTHORITIES PAPERWORK REDUCTION ACT 

SEC. 2701. SHORT TITLE. 

This title may be cited as the ‘‘Small Public Housing Authorities 

Paperwork Reduction Act’’. 

SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN QUALIFIED 

PUBLIC HOUSING AGENCIES. 

(a) IN GENERAL.—Section 5A(b) of the United States Housing 

Act of 1937 (42 U.S.C. 1437c–1(b)) is amended by adding at the 

end the following: 

‘‘(3) EXEMPTION OF CERTAIN PHAS FROM FILING REQUIREMENT.— 

‘‘(A) IN GENERAL.—Notwithstanding paragraph (1) or 

any other provision of this Act— 

‘‘(i) the requirement under paragraph (1) shall not 

apply to any qualified public housing agency; and 

‘‘(ii) except as provided in subsection (e)(4)(B), any 

reference in this section or any other provision of law 

to a ‘public housing agency’ shall not be considered 

to refer to any qualified public housing agency, to 

the extent such reference applies to the requirement 

to submit an annual public housing agency plan under 

this subsection. 

‘‘(B) CIVIL RIGHTS CERTIFICATION.—Notwithstanding 

that qualified public housing agencies are exempt under 

subparagraph (A) from the requirement under this section 

to prepare and submit an annual public housing plan, 

each qualified public housing agency shall, on an annual 

basis, make the certification described in paragraph (16) 

of subsection (d), except that for purposes of such qualified 

public housing agencies, such paragraph shall be applied 

by substituting ‘the public housing program of the agency’ 

for ‘the public housing agency plan’. 

‘‘(C) DEFINITION.—For purposes of this section, the 

term ‘qualified public housing agency’ means a public 

housing agency that meets the following requirements: 

‘‘(i) The sum of (I) the number of public housing 

dwelling units administered by the agency, and (II) 

the number of vouchers under section 8(o) of the United 

States Housing Act of 1937 (42 U.S.C. 1437f(o)) 

administered by the agency, is 550 or fewer. 

‘‘(ii) The agency is not designated under section 

6(j)(2) as a troubled public housing agency, and does 

not have a failing score under the section 8 Management Assessment Program during the prior 12 

months.’’. 

(b) RESIDENT PARTICIPATION.—Section 5A of the United States 

Housing Act of 1937 (42 U.S.C. 1437c–1) is amended— 

(1) in subsection (e), by inserting after paragraph (3) the 

following: 

‘‘(4) QUALIFIED PUBLIC HOUSING AGENCIES.— 

Applicability. 

42 USC 1437 

note. 


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122 STAT. 2864 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), nothing in this section may be construed to exempt 

a qualified public housing agency from the requirement 

under paragraph (1) to establish 1 or more resident 

advisory boards. Notwithstanding that qualified public 

housing agencies are exempt under subsection (b)(3)(A) 

from the requirement under this section to prepare and 

submit an annual public housing plan, each qualified public 

housing agency shall consult with, and consider the recommendations of the resident advisory boards for the 

agency, at the annual public hearing required under subsection (f)(5), regarding any changes to the goals, objectives, 

and policies of that agency. 

‘‘(B) APPLICABILITY OF WAIVER AUTHORITY.—Paragraph 

(3) shall apply to qualified public housing agencies, except 

that for purposes of such qualified public housing agencies, 

subparagraph (B) of such paragraph shall be applied by 

substituting ‘the functions described in the second sentence 

of paragraph (4)(A)’ for ‘the functions described in paragraph (2)’. 

‘‘(f) PUBLIC HEARINGS.—’’; and 

(2) in subsection (f) (as so designated by the amendment 

made by paragraph (1)), by adding at the end the following: 

‘‘(5) QUALIFIED PUBLIC HOUSING AGENCIES.— 

‘‘(A) REQUIREMENT.—Notwithstanding that qualified 

public housing agencies are exempt under subsection 

(b)(3)(A) from the requirement under this section to conduct 

a public hearing regarding the annual public housing plan 

of the agency, each qualified public housing agency shall 

annually conduct a public hearing— 

‘‘(i) to discuss any changes to the goals, objectives, 

and policies of the agency; and 

‘‘(ii) to invite public comment regarding such 

changes. 

‘‘(B) AVAILABILITY OF INFORMATION AND NOTICE.—Not 

later than 45 days before the date of any hearing described 

in subparagraph (A), a qualified public housing agency 

shall— 

‘‘(i) make all information relevant to the hearing 

and any determinations of the agency regarding 

changes to the goals, objectives, and policies of the 

agency to be considered at the hearing available for 

inspection by the public at the principal office of the 

public housing agency during normal business hours; 

and 

‘‘(ii) publish a notice informing the public that— 

‘‘(I) the information is available as required 

under clause (i); and 

‘‘(II) a public hearing under subparagraph (A) 

will be conducted.’’. 

Deadline. 

Public comment. 

Establishment. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2865 

TITLE VIII—HOUSING PRESERVATION 

Subtitle A—Preservation Under Federal 

Housing Programs 

SEC. 2801. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES. 

Notwithstanding any other provision of law, subtitle A of title 

II of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z-11 note) 

and the amendments made by such title shall not apply to any 

transaction regarding a multifamily real property for which— 

(1) the Secretary of Housing and Urban Development has 

received, before the date of the enactment of such Act, written 

expressions of interest in purchasing the property from both 

a city government and the housing commission of such city; 

(2) after such receipt, the Secretary acquires title to the 

property at a foreclosure sale; and 

(3) such city government and housing commission have 

resolved a previous disagreement with respect to the disposition 

of the property. 

SEC. 2802. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED 

VOUCHER ASSISTANCE. 

Notwithstanding any other provision of law— 

(1) the property known as The Heritage Apartments (FHA 

No. 023-44804), in Malden, Massachusetts, shall be considered 

eligible low-income housing for purposes of the eligibility of 

residents of the property for enhanced voucher assistance under 

section 8(t) of the United States Housing Act of 1937 (42 

U.S.C. 1437f(t)), pursuant to paragraph (2)(A) of section 223(f) 

of the Low-Income Housing Preservation and Resident 

Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A)); 

(2) such residents shall receive enhanced rental housing 

vouchers upon the prepayment of the mortgage loan for the 

property under section 236 of the National Housing Act (12 

U.S.C. 1715z-1); and 

(3) the Secretary shall approve such prepayment and subsequent transfer of the property without any further condition, 

except that the property shall be restricted for occupancy, until 

the original maturity date of the prepaid mortgage loan, only 

by families with incomes not exceeding 80 percent of the 

adjusted median income for the area in which the property 

is located, as published by the Secretary. 

Amounts for the enhanced vouchers pursuant to this section shall 

be provided under amounts appropriated for tenant-based rental 

assistance otherwise authorized under section 8(t) of the United 

States Housing Act of 1937. 

SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS. 

(a) TRANSFER.—Subject to subsection (c) and notwithstanding 

any other provision of law, the Secretary of Housing and Urban 

Development shall, at the request of the owner, transfer or 

authorize the transfer, of the contracts, restrictions, and debt 

described in subsection (b)— 

(1) on the housing that is owned or managed by Community 

Properties of Ohio Management Services LLC or an affiliate 

of Ohio Capital Corporation for Housing and located in Franklin 

Ohio. 

Public 

information. 

Massachusetts. 

Disadvantaged 

persons. 

Deadlines. 


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122 STAT. 2866 PUBLIC LAW 110–289—JULY 30, 2008 

County, Ohio, to other properties located in Franklin County, 

Ohio; and 

(2) on the housing that is owned or managed by The 

Model Group, Inc., and located in Hamilton County, Ohio, to 

other properties located in Hamilton County, Ohio. 

(b) CONTRACTS, RESTRICTIONS, AND DEBT COVERED.—The contracts, restrictions, and debt described in this subsection are as 

follows: 

(1) All or a portion of a project-based rental assistance 

housing assistance payments contract under section 8 of the 

United States Housing Act of 1937 (42 U.S.C. 1437f). 

(2) Existing Federal use restrictions, including without 

limitation use agreements, regulatory agreements, and 

accommodation agreements. 

(3) Any subordinate debt held by the Secretary or assigned 

and any mortgages securing such debt, all related loan and 

security documentation and obligations, and reserve and escrow 

balances. 

(c) RETENTION OF SAME NUMBER OF UNITS AND AMOUNT OF

ASSISTANCE.—Any transfer pursuant to subsection (a) shall result 

in— 

(1) a total number of dwelling units (including units 

retained by the owners and units transferred) covered by assistance described in subsection (b)(1) after the transfer remaining 

the same as such number assisted before the transfer, with 

such increases or decreases in unit sizes as may be contained 

in a plan approved by a local planning or development commission or department; and 

(2) no reduction in the total amount of the housing assistance payments under contracts described in subsection (b)(1). 

SEC. 2804. PUBLIC HOUSING DISASTER RELIEF. 

Section 9 of the United States Housing Act of 1937 (42 U.S.C. 

1437g) is amended— 

(1) by striking subsection (k); and 

(2) by redesignating subsections (l), (m), and (n) as subsections (k), (l), and (m), respectively. 

SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING. 

Notwithstanding any other provision of law— 

(1) for the property known as Nihonmachi Terrace (FHA 

No. 121-44284), in San Francisco, California, upon the refinancing of the existing federally insured mortgage pursuant 

to section 236(b) of the National Housing Act (12 U.S.C. 1715z– 

1(b)), unassisted low and moderate-income residents of the 

property shall be deemed eligible for and shall receive voucher 

assistance under section 8(o) of the United States Housing 

Act of 1937 (42 U.S.C. 1437f(o)); and 

(2) to preserve the affordability of the property, the housing 

authority shall utilize such additional voucher assistance pursuant to subsection 8(o)(13) of the United States Housing Act 

of 1937, without regard to the limitations of subparagraphs 

(B) and (D) of that subsection. 

Amounts for the vouchers pursuant to this section shall be provided 

under amounts appropriated for tenant-based rental assistance 

otherwise authorized. 

California. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2867 

Subtitle B—Coordination of Federal Housing Programs and Tax Incentives for 

Housing 

SEC. 2831. SHORT TITLE. 

This subtitle may be cited as the ‘‘Housing Tax Credit Coordination Act of 2008’’. 

SEC. 2832. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT. 

(a) ADMINISTRATIVE AND PROCEDURAL CHANGES.— 

(1) IN GENERAL.—The Secretary of Housing and Urban 

Development (in this section referred to as the ‘‘Secretary’’) 

shall, not later than the expiration of the 6-month period beginning upon after the date of the enactment of this Act, implement 

administrative and procedural changes to expedite approval 

of multifamily housing projects under the jurisdiction of the 

Department of Housing and Urban Development that meet 

the requirements of the Secretary for such approvals. 

(2) PROJECTS.—The multifamily housing projects referred 

to in paragraph (1) shall include— 

(A) projects for which assistance is provided by such 

Department in conjunction with any low-income housing 

tax credits under section 42 of the Internal Revenue Code 

of 1986 or tax-exempt housing bonds; and 

(B) existing public housing projects and assisted 

housing projects, for which approval of the Secretary is 

necessary for transactions, in conjunction with any such 

low-income housing tax credits or tax-exempt housing 

bonds, involving the preservation or rehabilitation of the 

project. 

(3) CHANGES.—The administrative and procedural changes 

referred to in paragraph (1) shall include all actions necessary 

to carry out paragraph (1), which may include— 

(A) improving the efficiency of approval procedures; 

(B) simplifying approval requirements, 

(C) establishing time deadlines or target deadlines for 

required approvals; 

(D) modifying division of approval authority between 

field and national offices; 

(E) improving outreach to project sponsors regarding 

information that is required to be submitted for such 

approvals; 

(F) requesting additional funding for increasing staff, 

if necessary; and 

(G) any other actions which would expedite approvals. 

Any such changes shall be made in a manner that provides 

for full compliance with any existing requirements under law 

or regulation that are designed to protect families receiving 

public and assisted housing assistance, including income targeting, rent, and fair housing provisions, and shall also comply 

with requirements regarding environmental review and protection and wages paid to laborers. 

(b) CONSULTATION.—The Secretary shall consult with the 

Commissioner of the Internal Revenue Service and take such actions 

Deadline. 

12 USC 1715s. 

12 USC 1701 

note. 

Housing Tax 

Credit 

Coordination 

Act of 2008. 

Disadvantaged 

persons. 


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122 STAT. 2868 PUBLIC LAW 110–289—JULY 30, 2008 

as are appropriate in conjunction with such consultation to simplify 

the coordination of rules, regulations, forms, and approval requirements for multifamily housing projects projects for which assistance 

is provided by such Department in conjunction with any low-income 

housing tax credits under section 42 of the Internal Revenue Code 

of 1986 or tax-exempt housing bonds. 

(c) RECOMMENDATIONS.—In implementing the changes required 

under this section, the Secretary shall solicit recommendations 

regarding such changes from project owners and sponsors, investors 

and stakeholders in housing tax credits, State and local housing 

finance agencies, public housing agencies, tenant advocates, and 

other stakeholders in such projects. 

(d) REPORT.—Not later than the expiration of the 9-month 

period beginning on the date of the enactment of this Act, the 

Secretary shall submit a report to the Committee on Financial 

Services of the House of Representatives and the Committee on 

Banking, Housing, and Urban Affairs of the Senate that— 

(1) identifies the actions taken by the Secretary to comply 

with this section; 

(2) includes information regarding any resulting improvements in the expedited approval for multifamily housing 

projects; 

(3) identifies recommendations made pursuant to subsection (c); 

(4) identifies actions taken by the Secretary to implement 

the provisions in the amendments made by sections 2834 and 

2835 of this Act; and 

(5) makes recommendations for any legislative changes 

that are needed to facilitate prompt approval of assistance 

for such projects. 

SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE. 

Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) 

is amended— 

(1) by inserting ‘‘(1) CONDITION.—’’ after ‘‘(h)’’; and 

(2) by adding at the end the following new paragraphs: 

‘‘(2) ACTIONS TO EXPEDITE PROJECT APPROVALS.— 

‘‘(A) IN GENERAL.—The Secretary shall take actions 

to facilitate timely approval of requests to transfer ownership or control, for the purpose of rehabilitation or preservation, of multifamily housing projects for which assistance 

is provided by the Secretary of Agriculture in conjunction 

with any low-income housing tax credits under section 

42 of the Internal Revenue Code of 1986 or tax-exempt 

housing bonds. 

‘‘(B) CONSULTATION.—The Secretary of Agriculture 

shall consult with the Commissioner of the Internal Revenue Service and take such actions as are appropriate 

in conjunction with such consultation to simplify the 

coordination of rules, regulations, forms (including applications forms for project transfers), and approval requirements multifamily housing projects for which assistance 

is provided by the Secretary of Agriculture in conjunction 

with any low-income housing tax credits under section 

42 of the Internal Revenue Code of 1986 or tax-exempt 

housing bonds. 

Deadline. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2869 

‘‘(C) EXISTING REQUIREMENTS.—Any actions taken 

pursuant to this paragraph shall be taken in a manner 

that provides for full compliance with any existing requirements under law or regulation that are designed to protect 

families receiving Federal housing assistance, including 

income targeting, rent, and fair housing provisions, and 

shall also comply with requirements regarding environmental review and protection and wages paid to laborers. 

‘‘(D) RECOMMENDATIONS.—In implementing the 

changes required under this paragraph, the Secretary shall 

solicit recommendations regarding such changes from 

project owners and sponsors, investors and stakeholders 

in housing tax credits, State and local housing finance 

agencies, tenant advocates, and other stakeholders in such 

projects.’’. 

SEC. 2834. USE OF FHA LOANS WITH HOUSING TAX CREDITS. 

(a) SUBSIDY LAYERING REQUIREMENTS.—Subsection (d) of section 102 of the Department of Housing and Urban Development 

Reform Act of 1989 (42 U.S.C. 3545(d)) is amended— 

(1) in the first sentence, by inserting after ‘‘assistance 

within the jurisdiction of the Department’’ the following: ‘‘, 

as such term is defined in subsection (m), except that for 

purposes of this subsection such term shall not include any 

mortgage insurance provided pursuant to title II of the National 

Housing Act (12 U.S.C. 1707 et seq.)’’; and 

(2) in the second sentence, by inserting ‘‘such’’ before 

‘‘assistance’’. 

(b) COST CERTIFICATION.—Section 227 of National Housing Act 

(12 U.S.C. 1715r) is amended— 

(1) in the matter preceding paragraph (a) (relating to a 

definition of ‘‘new or rehabilitated multifamily housing’’)— 

(A) in the first sentence— 

(i) by striking ‘‘Notwithstanding’’ and inserting 

‘‘Except as provided in subsection (b) and notwithstanding’’; and 

(ii) by redesignating clauses (a) and (b) as clauses 

(A) and (B), respectively; and 

(B) by striking ‘‘As used in this section—’’; 

(2) in paragraph (c) (relating to a definition of ‘‘actual 

cost’’)— 

(A) in clause (i), by redesignating clauses (1) and (2) 

as clauses (I) and (II), respectively; and 

(B) in clause (ii), by redesignating clauses (1) and 

(2) as clauses (I) and (II), respectively; 

(3) by redesignating paragraphs (a), (b), and (c) as paragraphs (1), (2), and (3), respectively; 

(4) by inserting before paragraph (1) (as so redesignated 

by paragraph (3) of this subsection) the following: 

‘‘(b) EXEMPTION FOR CERTAIN PROJECTS ASSISTED WITH LOWINCOME HOUSING TAX CREDIT.—In the case of any mortgage insured 

under any provision of this title that is executed in connection 

with the construction, rehabilitation, purchase, or refinancing of 

a multifamily housing project for which equity provided through 

any low-income housing tax credit pursuant to section 42 of the 

Internal Revenue Code of 1986 (26 U.S.C. 42), if the Secretary 

determines at the time of issuance of the firm commitment for 


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122 STAT. 2870 PUBLIC LAW 110–289—JULY 30, 2008 

insurance that the ratio of the loan proceeds to the actual cost 

of the project is less than 80 percent, subsection (a) of this section 

shall not apply. 

‘‘(c) DEFINITIONS.—For purposes of this section, the following 

definitions shall apply:’’; and 

(5) by inserting ‘‘(a) REQUIREMENT.—’’ after ‘‘227.’’. 

(c) OTHER PROVISIONS REGARDING TREATMENT OF MORTGAGES

COVERING TAX CREDIT PROJECTS.—Title II of the National Housing 

Act is amended by inserting after section 227 (12 U.S.C. 1715r) 

the following new section: 

‘‘SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT 

PROJECTS. 

‘‘(a) DEFINITION.—For purposes of this section, the term ‘insured 

mortgage covering a tax credit project’ means a mortgage insured 

under any provision of this title that is executed in connection 

with the construction, rehabilitation, purchase, or refinancing of 

a multifamily housing project for which equity provided through 

any low-income housing tax credit pursuant to section 42 of the 

Internal Revenue Code of 1986 (26 U.S.C. 42). 

‘‘(b) ACCEPTANCE OF LETTERS OF CREDIT.—In the case of an 

insured mortgage covering a tax credit project, the Secretary may 

not require the escrowing of equity provided by the sale of any 

low-income housing tax credits for the project pursuant to section 

42 of the Internal Revenue Code of 1986, or any other form of 

security, such as a letter of credit. 

‘‘(c) ASSET MANAGEMENT REQUIREMENTS.—In the case of an 

insured mortgage covering a tax credit project for which project 

the applicable tax credit allocating agency is causing to be performed periodic inspections in compliance with the requirements 

of section 42 of the Internal Revenue Code of 1986, such project 

shall be exempt from requirements imposed by the Secretary 

regarding periodic inspections of the property by the mortgagee. 

To the extent that other compliance monitoring is being performed 

with respect to such a project by such an allocating agency pursuant 

to such section 42, the Secretary shall, to the extent that the 

Secretary determines such monitoring is sufficient to ensure compliance with any requirements established by the Secretary, accept 

such agency’s evidence of compliance for purposes of determining 

compliance with the Secretary’s requirements. 

‘‘(d) STREAMLINED PROCESSING PILOT PROGRAM.— 

‘‘(1) IN GENERAL.—The Secretary shall establish a pilot 

program to demonstrate the effectiveness of streamlining the 

review process, which shall include all applications for mortgage 

insurance under any provision of this title for mortgages 

executed in connection with the construction, rehabilitation, 

purchase, or refinancing of a multifamily housing project for 

which equity provided through any low-income housing tax 

credit pursuant to section 42 of the Internal Revenue Code 

of 1986. The Secretary shall issue instructions for implementing 

the pilot program under this subsection not later than the 

expiration of the 180-day period beginning upon the date of 

the enactment of the Housing Tax Credit Coordination Act 

of 2008. 

‘‘(2) REQUIREMENTS.—Such pilot program shall provide 

for— 

Intructions. 

Deadline. 

12 USC 1715s. 


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‘‘(A) the Secretary to appoint designated underwriters, 

who shall be responsible for reviewing such mortgage insurance applications and making determinations regarding 

the eligibility of such applications for such mortgage insurance in lieu of the processing functions regarding such 

applications that are otherwise performed by other 

employees of the Department of Housing and Urban 

Development; 

‘‘(B) submission of applications for such mortgage 

insurance by mortgagees who have previously been 

expressly approved by the Secretary; and 

‘‘(C) determinations regarding the eligibility of such 

applications for such mortgage insurance to be made by 

the chief underwriter pursuant to requirements prescribed 

by the Secretary, which shall include requiring submission 

of reports regarding applications of proposed mortgagees 

by third-party entities expressly approved by the chief 

underwriter.’’. 

SEC. 2835. OTHER HUD PROGRAMS. 

(a) SECTION 8 ASSISTANCE.— 

(1) PHA PROJECT-BASED ASSISTANCE.—Section 8(o)(13) of 

the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) 

is amended— 

(A) in subparagraph (D)(i)— 

(i) by striking ‘‘building’’ and inserting ‘‘project’’; 

and 

(ii) by adding at the end the following: ‘‘For purposes of this subparagraph, the term’’project‘‘ means 

a single building, multiple contiguous buildings, or 

multiple buildings on contiguous parcels of land.’’; 

(B) in the first sentence of subparagraph (F), by 

striking ‘‘10 years’’ and inserting ‘‘15 years’’; 

(C) in subparagraph (G)— 

(i) by inserting after the period at the end of the 

first sentence the following: ‘‘Such contract may, at 

the election of the public housing agency and the owner 

of the structure, specify that such contract shall be 

extended for renewal terms of up to 15 years each, 

if the agency makes the determination required by 

this subparagraph and the owner is in compliance 

with the terms of the contract.’’; and 

(ii) by adding at the end the following: ‘‘A public 

housing agency may agree to enter into such a contract 

at the time it enters into the initial agreement for 

a housing assistance payment contract or at any time 

thereafter that is before the expiration of the housing 

assistance payment contract.’’; 

(D) in subparagraph (H), by inserting before the period 

at the end of the first sentence the following: ‘‘, except 

that in the case of a contract unit that has been allocated 

low-income housing tax credits and for which the rent 

limitation pursuant to such section 42 is less than the 

amount that would otherwise be permitted under this 

subparagraph, the rent for such unit may, in the sole 

discretion of a public housing agency, be established at 

the higher section 8 rent, subject only to paragraph (10)(A)’’; 

Definition. 

Reports. 


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(E) in subparagraph (I)(i), by inserting before the semicolon the following: ‘‘, except that the contract may provide 

that the maximum rent permitted for a dwelling unit shall 

not be less than the initial rent for the dwelling unit 

under the initial housing assistance payments contract covering the unit’’; and 

(F) by adding at the end the following new subparagraphs: 

‘‘(L) USE IN COOPERATIVE HOUSING AND ELEVATOR

BUILDINGS.—A public housing agency may enter into a 

housing assistance payments contract under this paragraph 

with respect to— 

‘‘(i) dwelling units in cooperative housing; and 

‘‘(ii) notwithstanding subsection (c), dwelling units 

in a high-rise elevator project, including such a project 

that is occupied by families with children, without 

review and approval of the contract by the Secretary. 

‘‘(M) REVIEWS.— 

‘‘(i) SUBSIDY LAYERING.—A subsidy layering review 

in accordance with section 102(d) of the Department 

of Housing and Urban Development Reform Act of 

1989 (42 U.S.C. 3545(d)) shall not be required for 

assistance under this paragraph in the case of a 

housing assistance payments contract for an existing 

structure, or if a subsidy layering review has been 

conducted by the applicable State or local agency. 

‘‘(ii) ENVIRONMENTAL REVIEW.—A public housing 

agency shall not be required to undertake any environmental review before entering into a housing assistance 

payments contract under this paragraph for an existing 

structure, except to the extent such a review is otherwise required by law or regulation.’’. 

(2) VOUCHER PROGRAM RENT REASONABLENESS.—Section 

8(o)(10) of the United States Housing Act of 1937 (42 U.S.C. 

1437f(o)(10)) is amended by adding at the end the following 

new subparagraph; 

‘‘(F) TAX CREDIT PROJECTS.—In the case of a dwelling 

unit receiving tax credits pursuant to section 42 of the 

Internal Revenue Code of 1986 or for which assistance 

is provided under subtitle A of title II of the Cranston 

Gonzalez National Affordable Housing Act of 1990, for 

which a housing assistance contract not subject to paragraph (13) of this subsection is established, rent reasonableness shall be determined as otherwise provided by this 

paragraph, except that— 

‘‘(i) comparison with rent for units in the private, 

unassisted local market shall not be required if the 

rent is equal to or less than the rent for other comparable units receiving such tax credits or assistance 

in the project that are not occupied by families assisted 

with tenant-based assistance under this subsection; 

and 

‘‘(ii) the rent shall not be considered reasonable 

for purposes of this paragraph if it exceeds the greater 

of— 

‘‘(I) the rents charged for other comparable 

units receiving such tax credits or assistance in 


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the project that are not occupied by families 

assisted with tenant-based assistance under this 

subsection; and 

‘‘(II) the payment standard established by the 

public housing agency for a unit of the size 

involved.’’. 

(b) SECTION 202 HOUSING FOR ELDERLY PERSONS.—Subsection 

(f) of section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f)) 

is amended— 

(1) by striking ‘‘SELECTION CRITERIA.—’’ and inserting ‘‘INITIAL SELECTION CRITERIA AND PROCESSING.— (1) SELECTION

CRITERIA.—’’; 

(2) by redesignating paragraphs (1) through (7) as subparagraphs (A) through (G), respectively; and 

(3) by adding at the end the following new paragraph: 

‘‘(2) DELEGATED PROCESSING.— 

‘‘(A) In issuing a capital advance under this subsection 

for any project for which financing for the purposes 

described in the last two sentences of subsection (b) is 

provided by a combination of a capital advance under subsection (c)(1) and sources other than this section, within 

30 days of award of the capital advance, the Secretary 

shall delegate review and processing of such projects to 

a State or local housing agency that— 

‘‘(i) is in geographic proximity to the property; 

‘‘(ii) has demonstrated experience in and capacity 

for underwriting multifamily housing loans that provide housing and supportive services; 

‘‘(iii) may or may not be providing low-income 

housing tax credits in combination with the capital 

advance under this section, and 

‘‘(iv) agrees to issue a firm commitment within 

12 months of delegation. 

‘‘(B) The Secretary shall retain the authority to process 

capital advances in cases in which no State or local housing 

agency has applied to provide delegated processing pursuant to this paragraph or no such agency has entered into 

an agreement with the Secretary to serve as a delegated 

processing agency. 

‘‘(C) An agency to which review and processing is delegated pursuant to subparagraph (A) may assess a reasonable fee which shall be included in the capital advance 

amounts and may recommend project rental assistance 

amounts in excess of those initially awarded by the Secretary. The Secretary shall develop a schedule for reasonable fees under this subparagraph to be paid to delegated 

processing agencies, which shall take into consideration 

any other fees to be paid to the agency for other funding 

provided to the project by the agency, including bonds, 

tax credits, and other gap funding. 

‘‘(D) Under such delegated system, the Secretary shall 

retain the authority to approve rents and development 

costs and to execute a capital advance within 60 days 

of receipt of the commitment from the State or local agency. 

The Secretary shall provide to such agency and the project 

sponsor, in writing, the reasons for any reduction in capital 

Deadline. 

Deadline. 

Deadline. 


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advance amounts or project rental assistance and such 

reductions shall be subject to appeal.’’. 

(c) MCKINNEY-VENTO ACT HOMELESS ASSISTANCE UNDER

SHELTER PLUS CARE PROGRAM.— (1) TERM OF CONTRACTS WITH OWNER OR LESSOR.—Part 

I of subtitle F of the McKinney-Vento Homeless Assistance 

Act is amended— 

(A) by redesignating sections 462 and 463 (42 U.S.C. 

11403g, 11403h) as sections 463 and 464, respectively; 

(B) by striking ‘‘section 463’’ each place such term 

appears in sections 471, 476, 481, 486, and 488 (42 U.S.C. 

11404, 11405, 11406, 11407, and 11407b) and inserting 

‘‘section 464’’; and 

(C) by inserting after section 461 (42 U.S.C. 11403f) 

the following new section: 

‘‘SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR. 

‘‘An applicant under this subtitle may enter into a contract 

with the owner or lessor of a property that receives rental assistance 

under this subtitle having a term of not more than 15 years, 

subject to the availability of sufficient funds provided in appropriation Acts for the purpose of renewing expiring contracts for assistance payments. Such contract may, at the election of the applicant 

and owner or lessor, specify that such contract shall be extended 

for renewal terms of not more than 15 years each, subject to 

the availability of sufficient such appropriated funds.’’. 

(2) PROJECT-BASED RENTAL ASSISTANCE CONTRACTS.—Section 478(a) of the McKinney-Vento Homeless Assistance Act 

(42 U.S.C. 11405a(a)) is amended by inserting before the period 

at the end the following: ‘‘; except that, in the case of any 

project for which equity is provided through any low-income 

housing tax credit pursuant to section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42), if an expenditure of such 

amount for each unit (including the prorated share of such 

work) is required to make the structure decent, safe, and sanitary, and the owner agrees to reach initial closing on permanent 

financing from such other sources within two years and agrees 

to carry out the rehabilitation with resources other than assistance under this subtitle within 60 months of notification of 

grant approval, the contract shall be for a term of 10 years 

(except that such period may be extended by up to 1 year 

by the Secretary, which extension shall be granted unless the 

Secretary determines that the sponsor is primarily responsible 

for the failure to meet such deadline)’’. 

(d) DATA COLLECTION ON TENANTS OF HOUSING TAX CREDIT

PROJECTS.—Title I of the United States Housing Act of 1937 (42 

U.S.C. 1437 et seq.) is amended by adding at the end the following 

new section: 

‘‘SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT 

PROJECTS. 

‘‘(a) IN GENERAL.—Each State agency administering tax credits 

under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 

42) shall furnish to the Secretary of Housing and Urban Development, not less than annually, information concerning the race, 

ethnicity, family composition, age, income, use of rental assistance 

under section 8(o) of the United States Housing Act of 1937 or 

Deadline. 

42 USC 

1437z–8. 

Termination 

date. 

Extension. 

42 USC 11405b. 

42 USC 

11403f–1. 


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other similar assistance, disability status, and monthly rental payments of households residing in each property receiving such credits 

through such agency. Such State agencies shall, to the extent feasible, collect such information through existing reporting processes 

and in a manner that minimizes burdens on property owners. 

In the case of any household that continues to reside in the same 

dwelling unit, information provided by the household in a previous 

year may be used if the information is of a category that is not 

subject to change or if information for the current year is not 

readily available to the owner of the property. 

‘‘(b) STANDARDS.—The Secretary shall establish standards and 

definitions for the information collected under subsection (a), provide States with technical assistance in establishing systems to 

compile and submit such information, and, in coordination with 

other Federal agencies administering housing programs, establish 

procedures to minimize duplicative reporting requirements for properties assisted under multiple housing programs. 

‘‘(c) PUBLIC AVAILABILITY.—The Secretary shall, not less than 

annually, compile and make publicly available the information submitted to the Secretary pursuant to subsection (a). 

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated for the cost of activities required under subsections (b) and (c) $2,500,000 for fiscal year 2009 and $900,000 

for each of fiscal years 2010 through 2013.’’. 

TITLE IX—MISCELLANEOUS 

SEC. 2901. HOMELESS ASSISTANCE. 

(a) APPROPRIATIONS.—Section 726 of the McKinney-Vento 

Homeless Assistance Act (42 U.S.C. 11435) is amended by striking 

‘‘$70,000,000’’ and all that follows and inserting ‘‘$100,000,000 for 

fiscal year 2009 and such sums as may be necessary for each 

subsequent fiscal year.’’. 

(b) EMERGENCY ASSISTANCE.—Section 722 of the McKinneyVento Homeless Assistance Act (42 U.S.C. 11432) is amended by 

adding at the end the following: 

‘‘(h) SPECIAL RULE FOR EMERGENCY ASSISTANCE.— 

‘‘(1) EMERGENCY ASSISTANCE.— 

‘‘(A) RESERVATION OF AMOUNTS.—Subject to paragraph 

(4) and notwithstanding any other provision of this title, 

the Secretary shall use funds appropriated under section 

726 for fiscal year 2009, but not to exceed $30,000,000, 

for the purposes of providing emergency assistance through 

grants. 

‘‘(B) GENERAL AUTHORITY.—The Secretary shall use the 

funds to make grants to State educational agencies under 

paragraph (2), to enable the agencies to make subgrants 

to local educational agencies under paragraph (3), to provide activities described in section 723(d) for individuals 

referred to in subparagraph (C). 

‘‘(C) ELIGIBLE INDIVIDUALS.—Funds made available 

under this subsection shall be used to provide such activities for eligible individuals, consisting of homeless children 

and youths, and their families, who have become homeless 

due to home foreclosure, including children and youths, 

State and local 

governments. 

Grants. 

Deadline. 

Reports. 


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and their families, who became homeless when lenders 

foreclosed on properties rented by the families. 

‘‘(2) GRANTS TO STATE EDUCATIONAL AGENCIES.— 

‘‘(A) DISBURSEMENT.—The Secretary shall make grants 

with funds provided under paragraph (1)(A) to State educational agencies based on need, consistent with the 

number of eligible individuals described in paragraph (1)(C) 

in the States involved, as determined by the Secretary. 

‘‘(B) ASSURANCE.—To be eligible to receive a grant 

under this paragraph, a State educational agency shall 

provide an assurance to the Secretary that the State educational agency, and each local educational agency 

receiving a subgrant from the State educational agency 

under this subsection shall ensure that the activities carried out under this subsection are consistent with the 

activities described in section 723(d). 

‘‘(3) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES.—A State 

educational agency that receives a grant under paragraph (2) 

shall use the funds made available through the grant to make 

subgrants to local educational agencies. The State educational 

agency shall make the subgrants to local educational agencies 

based on need, consistent with the number of eligible individuals described in paragraph (1)(C) in the areas served by the 

local educational agencies, as determined by the State educational agency. 

‘‘(4) RESTRICTION.—The Secretary— 

‘‘(A) shall determine the amount (if any) by which 

the funds appropriated under section 726 for fiscal year 

2009 exceed $70,000,000; and 

‘‘(B) may only use funds from that amount to carry 

out this subsection.’’. 

SEC. 2902. INCREASING ACCESS AND UNDERSTANDING OF ENERGY 

EFFICIENT MORTGAGES. 

(a) DEFINITION.—As used in this section, the term ‘‘energy 

efficient mortgage’’ has the same meaning as given that term in 

paragraph (24) of section 104 of the Cranston-Gonzalez National 

Affordable Housing Act (42 U.S.C. 12704(24)). 

(b) RECOMMENDATIONS TO ELIMINATE BARRIERS TO USE OF

ENERGY EFFICIENT MORTGAGES.— 

(1) IN GENERAL.—Not later than 180 days after the date 

of enactment of this section, the Secretary of Housing and 

Urban Development, in conjunction with the Secretary of 

Energy and the Administrator of the Environmental Protection 

Agency, shall consult with the residential mortgage industry 

and States to develop recommendations to eliminate the barriers that exist to increasing the availability, use, and purchase 

of energy efficient mortgages, including such barriers as— 

(A) the lack of reliable and accessible information on 

such mortgages, including estimated energy savings and 

other benefits of energy efficient housing; 

(B) the confusion regarding underwriting requirements 

and differences among various energy efficient mortgage 

programs; 

(C) the complex and time consuming process of securing 

such mortgages; 

Deadline. 

12 USC 

1701z–17. 


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(D) the lack of publicly available research on the 

default risk of such mortgages; and 

(E) the availability of certified or accredited home 

energy rating services. 

(2) REPORT TO CONGRESS.—The Secretary of Housing and 

Urban Development shall submit a report to Congress that— 

(A) summarizes the recommendations developed under 

paragraph (1); and 

(B) includes any recommendations for statutory, regulatory, or administrative changes that the Secretary deems 

necessary to institute such recommendations. 

(c) ENERGY EFFICIENT MORTGAGES OUTREACH CAMPAIGN.— (1) IN GENERAL.—The Secretary of Housing and Urban 

Development, in consultation and coordination with the Secretary of Energy, the Administrator of the Environmental 

Protection Agency, and State Energy and Housing Finance 

Directors, shall carry out an education and outreach campaign 

to inform and educate consumers, home builders, residential 

lenders, and other real estate professionals on the availability, 

benefits, and advantages of— 

(A) improved energy efficiency in housing; and 

(B) energy efficient mortgages. 

(2) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry 

out the education and outreach campaign described under paragraph (1). 

DIVISION C—TAX-RELATED PROVISIONS 

SEC. 3000. SHORT TITLE; ETC. 

(a) SHORT TITLE.—This division may be cited as the ‘‘Housing 

Assistance Tax Act of 2008’’. 

(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly 

provided, whenever in this division an amendment or repeal is 

expressed in terms of an amendment to, or repeal of, a section 

or other provision, the reference shall be considered to be made 

to a section or other provision of the Internal Revenue Code of 

1986. 

(c) TABLE OF CONTENTS.—The table of contents for this division 

is as follows: 

Sec. 3000. Short title; etc. 

TITLE I—HOUSING TAX INCENTIVES 

Subtitle A—Multi-Family Housing 

PART I—LOW-INCOME HOUSING TAX CREDIT

Sec. 3001. Temporary increase in volume cap for low-income housing tax credit. 

Sec. 3002. Determination of credit rate. 

Sec. 3003. Modifications to definition of eligible basis. 

Sec. 3004. Other simplification and reform of low-income housing tax incentives. 

Sec. 3005. Treatment of military basic pay. 

PART II—MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

Sec. 3007. Recycling of tax-exempt debt for financing residential rental projects. 

Sec. 3008. Coordination of certain rules applicable to low-income housing credit and 

qualified residential rental project exempt facility bonds. 

PART III—REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAXEXEMPT HOUSING BONDS

Sec. 3009. Hold harmless for reductions in area median gross income. 

26 USC 1 

note. 

Housing 

Assistance 

Tax Act of 2008. 


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Sec. 3010. Exception to annual current income determination requirement where 

determination not relevant. 

Subtitle B—Single Family Housing 

Sec. 3011. First-time homebuyer credit. 

Sec. 3012. Additional standard deduction for real property taxes for nonitemizers. 

Subtitle C—General Provisions 

Sec. 3021. Temporary liberalization of tax-exempt housing bond rules. 

Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt housing 

bonds, low-income housing tax credit, and rehabilitation credit. 

Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for treatment as 

tax-exempt bonds. 

Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign affidavits. 

Sec. 3025. Modification of definition of tax-exempt use property for purposes of the 

rehabilitation credit. 

Sec. 3026. Extension of special rule for mortgage revenue bonds for residences located in disaster areas. 

Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery rebates for individuals. 

TITLE II—REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS 

Subtitle A—Foreign Currency and Other Qualified Activities 

Sec. 3031. Revisions to REIT income tests. 

Sec. 3032. Revisions to REIT asset tests. 

Sec. 3033. Conforming foreign currency revisions. 

Subtitle B—Taxable REIT Subsidiaries 

Sec. 3041. Conforming taxable REIT subsidiary asset test. 

Subtitle C—Dealer Sales 

Sec. 3051. Holding period under safe harbor. 

Sec. 3052. Determining value of sales under safe harbor. 

Subtitle D—Health Care REITs 

Sec. 3061. Conformity for health care facilities. 

Subtitle E—Effective Dates 

Sec. 3071. Effective dates. 

TITLE III—REVENUE PROVISIONS 

Subtitle A—General Provisions 

Sec. 3081. Election to accelerate the AMT and research credits in lieu of bonus depreciation. 

Sec. 3082. Certain GO Zone incentives. 

Sec. 3083. Increase in statutory limit on the public debt. 

Subtitle B—Revenue Offsets 

Sec. 3091. Returns relating to payments made in settlement of payment card and 

third party network transactions. 

Sec. 3092. Gain from sale of principal residence allocated to nonqualified use not 

excluded from income. 

Sec. 3093. Delay in application of worldwide allocation of interest. 

Sec. 3094. Time for payment of corporate estimated taxes. 

TITLE I—HOUSING TAX INCENTIVES 

Subtitle A—Multi-Family Housing 

PART I—LOW-INCOME HOUSING TAX CREDIT 

SEC. 3001. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME 

HOUSING TAX CREDIT. 

Paragraph (3) of section 42(h) is amended by adding at the 

end the following new subparagraph: 


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‘‘(I) INCREASE IN STATE HOUSING CREDIT CEILING FOR

2008 AND 2009.—In the case of calendar years 2008 and 

2009— 

‘‘(i) the dollar amount in effect under subparagraph 

(C)(ii)(I) for such calendar year (after any increase 

under subparagraph (H)) shall be increased by $0.20, 

and 

‘‘(ii) the dollar amount in effect under subparagraph (C)(ii)(II) for such calendar year (after any 

increase under subparagraph (H)) shall be increased 

by an amount equal to 10 percent of such dollar amount 

(rounded to the next lowest multiple of $5,000).’’. 

SEC. 3002. DETERMINATION OF CREDIT RATE. 

(a) TEMPORARY MINIMUM CREDIT RATE FOR NON-FEDERALLY

SUBSIDIZED NEW BUILDINGS.— 

(1) IN GENERAL.—Subsection (b) of section 42 is amended 

by striking paragraph (1), by redesignating paragraph (2) as 

paragraph (1), and by inserting after paragraph (1), as so 

redesignated, the following new paragraph: 

‘‘(2) TEMPORARY MINIMUM CREDIT RATE FOR NON-FEDERALLY

SUBSIDIZED NEW BUILDINGS.—In the case of any new building— 

‘‘(A) which is placed in service by the taxpayer after 

the date of the enactment of this paragraph and before 

December 31, 2013, and 

‘‘(B) which is not federally subsidized for the taxable 

year, 

the applicable percentage shall not be less than 9 percent.’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Subsection (b) of section 42, as amended by paragraph (1), is amended by striking ‘‘For purposes of this 

section—’’ and all that follows through ‘‘means the appropriate’’ and inserting the following: 

‘‘(1) DETERMINATION OF APPLICABLE PERCENTAGE.—For purposes of this section, the term ‘applicable percentage’ means, 

with respect to any building, the appropriate’’. 

(B) Clause (i) of section 42(b)(1)(B), as redesignated 

by paragraph (1), is amended by striking ‘‘a building 

described in paragraph (1)(A)’’ and inserting ‘‘a new 

building which is not federally subsidized for the taxable 

year’’. 

(C) Clause (ii) of section 42(b)(1)(B), as redesignated 

by paragraph (1), is amended by striking ‘‘a building 

described in paragraph (1)(B)’’ and inserting ‘‘a building 

not described in clause (i)’’. 

(b) MODIFICATIONS TO DEFINITION OF FEDERALLY SUBSIDIZED

BUILDING.— 

(1) IN GENERAL.—Subparagraph (A) of section 42(i)(2) is 

amended by striking ‘‘, or any below market Federal loan,’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Subparagraph (B) of section 42(i)(2) is amended— 

(i) by striking ‘‘BALANCE OF LOAN OR’’ in the 

heading thereof, 

(ii) by striking ‘‘loan or’’ in the matter preceding 

clause (i), and 


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(iii) by striking ‘‘subsection (d)—’’ and all that follows and inserting ‘‘subsection (d) the proceeds of such 

obligation.’’. 

(B) Subparagraph (C) of section 42(i)(2) is amended— 

(i) by striking ‘‘or below market Federal loan’’ in 

the matter preceding clause (i), 

(ii) in clause (i)— 

(I) by striking ‘‘or loan (when issued or made)’’ 

and inserting ‘‘(when issued)’’, and 

(II) by striking ‘‘the proceeds of such obligation 

or loan’’ and inserting ‘‘the proceeds of such obligation’’, and 

(iii) by striking ‘‘, and such loan is repaid,’’ in 

clause (ii). 

(C) Paragraph (2) of section 42(i) is amended by 

striking subparagraphs (D) and (E). 

(c) EFFECTIVE DATE.—The amendments made by this subsection 

shall apply to buildings placed in service after the date of the 

enactment of this Act. 

SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS. 

(a) INCREASE IN CREDIT FOR CERTAIN STATE DESIGNATED

BUILDINGS.—Subparagraph (C) of section 42(d)(5) (relating to 

increase in credit for buildings in high cost areas), before redesignation under subsection (g), is amended by adding at the end the 

following new clause: 

‘‘(v) BUILDINGS DESIGNATED BY STATE HOUSING

CREDIT AGENCY.—Any building which is designated by 

the State housing credit agency as requiring the 

increase in credit under this subparagraph in order 

for such building to be financially feasible as part 

of a qualified low-income housing project shall be 

treated for purposes of this subparagraph as located 

in a difficult development area which is designated 

for purposes of this subparagraph. The preceding sentence shall not apply to any building if paragraph 

(1) of subsection (h) does not apply to any portion 

of the eligible basis of such building by reason of paragraph (4) of such subsection.’’. 

(b) MODIFICATION TO REHABILITATION REQUIREMENTS.— 

(1) IN GENERAL.—Clause (ii) of section 42(e)(3)(A) is 

amended— 

(A) by striking ‘‘10 percent’’ in subclause (I) and 

inserting ‘‘20 percent’’, and 

(B) by striking ‘‘$3,000’’ in subclause (II) and inserting 

‘‘$6,000’’. 

(2) INFLATION ADJUSTMENT.—Paragraph (3) of section 42(e) 

is amended by adding at the end the following new subparagraph: 

‘‘(D) INFLATION ADJUSTMENT.—In the case of any 

expenditures which are treated under paragraph (4) as 

placed in service during any calendar year after 2009, 

the $6,000 amount in subparagraph (A)(ii)(II) shall be 

increased by an amount equal to— 

‘‘(i) such dollar amount, multiplied by 


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‘‘(ii) the cost-of-living adjustment determined 

under section 1(f)(3) for such calendar year by substituting ‘calendar year 2008’ for ‘calendar year 1992’ 

in subparagraph (B) thereof. 

Any increase under the preceding sentence which is not 

a multiple of $100 shall be rounded to the nearest multiple 

of $100.’’. 

(3) CONFORMING AMENDMENT.—Subclause (II) of section 

42(f)(5)(B)(ii) is amended by striking ‘‘if subsection 

(e)(3)(A)(ii)(II)’’ and all that follows and inserting ‘‘if the dollar 

amount in effect under subsection (e)(3)(A)(ii)(II) were twothirds of such amount.’’. 

(c) INCREASE IN ALLOWABLE COMMUNITY SERVICE FACILITY

SPACE FOR SMALL PROJECTS.—Clause (ii) of section 42(d)(4)(C) 

(relating to limitation) is amended by striking ‘‘10 percent of the 

eligible basis of the qualified low-income housing project of which 

it is a part. For purposes of’’ and inserting ‘‘the sum of— 

‘‘(I) 25 percent of so much of the eligible basis 

of the qualified low-income housing project of 

which it is a part as does not exceed $15,000,000, 

plus 

‘‘(II) 10 percent of so much of the eligible basis 

of such project as is not taken into account under 

subclause (I). 

For purposes of’’. 

(d) CLARIFICATION OF TREATMENT OF FEDERAL GRANTS.— 

Subparagraph (A) of section 42(d)(5) is amended to read as follows: 

‘‘(A) FEDERAL GRANTS NOT TAKEN INTO ACCOUNT IN

DETERMINING ELIGIBLE BASIS.—The eligible basis of a 

building shall not include any costs financed with the proceeds of a federally funded grant.’’. 

(e) SIMPLIFICATION OF RELATED PARTY RULES.—Clause (iii) of 

section 42(d)(2)(D), before redesignation under subsection (g)(2), 

is amended— 

(1) by striking all that precedes subclause (II), 

(2) by redesignating subclause (II) as clause (iii) and moving 

such clause two ems to the left, and 

(3) by striking the last sentence thereof. 

(f) EXCEPTION TO 10-YEAR NONACQUISITION PERIOD FOR

EXISTING BUILDINGS APPLICABLE TO FEDERALLY- OR STATE-ASSISTED

BUILDINGS.—Paragraph (6) of section 42(d) is amended to read 

as follows: 

‘‘(6) CREDIT ALLOWABLE FOR CERTAIN BUILDINGS ACQUIRED

DURING 10-YEAR PERIOD DESCRIBED IN PARAGRAPH (2)(B)(ii).— 

‘‘(A) IN GENERAL.—Paragraph (2)(B)(ii) shall not apply 

to any federally- or State-assisted building. 

‘‘(B) BUILDINGS ACQUIRED FROM INSURED DEPOSITORY

INSTITUTIONS IN DEFAULT.—On application by the taxpayer, 

the Secretary may waive paragraph (2)(B)(ii) with respect 

to any building acquired from an insured depository institution in default (as defined in section 3 of the Federal 

Deposit Insurance Act) or from a receiver or conservator 

of such an institution. 

‘‘(C) FEDERALLY- OR STATE-ASSISTED BUILDING.—For 

purposes of this paragraph— 

‘‘(i) FEDERALLY-ASSISTED BUILDING.—The term ‘federally-assisted building’ means any building which is 


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122 STAT. 2882 PUBLIC LAW 110–289—JULY 30, 2008 

substantially assisted, financed, or operated under section 8 of the United States Housing Act of 1937, section 

221(d)(3), 221(d)(4), or 236 of the National Housing 

Act, section 515 of the Housing Act of 1949, or any 

other housing program administered by the Department of Housing and Urban Development or by the 

Rural Housing Service of the Department of Agriculture. 

‘‘(ii) STATE-ASSISTED BUILDING.—The term ‘Stateassisted building’ means any building which is substantially assisted, financed, or operated under any State 

law similar in purposes to any of the laws referred 

to in clause (i).’’. 

(g) REPEAL OF DEADWOOD.— 

(1) Clause (ii) of section 42(d)(2)(B) is amended by striking 

‘‘the later of—’’ and all that follows and inserting ‘‘the date 

the building was last placed in service,’’. 

(2) Subparagraph (D) of section 42(d)(2) is amended by 

striking clause (i) and by redesignating clauses (ii) and (iii) 

as clauses (i) and (ii), respectively. 

(3) Paragraph (5) of section 42(d) is amended by striking 

subparagraph (B) and by redesignating subparagraph (C) as 

subparagraph (B). 

(h) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in paragraph (2), the amendments made by this subsection shall apply 

to buildings placed in service after the date of the enactment 

of this Act. 

(2) REHABILITATION REQUIREMENTS.— 

(A) IN GENERAL.—The amendments made by subsection 

(b) shall apply to buildings with respect to which housing 

credit dollar amounts are allocated after the date of the 

enactment of this Act. 

(B) BUILDINGS NOT SUBJECT TO ALLOCATION LIMITS.— 

To the extent paragraph (1) of section 42(h) of the Internal 

Revenue Code of 1986 does not apply to any building by 

reason of paragraph (4) thereof, the amendments made 

by subsection (b) shall apply buildings financed with bonds 

issued pursuant to allocations made after the date of the 

enactment of this Act. 

SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME 

HOUSING TAX INCENTIVES. 

(a) REPEAL PROHIBITION ON MODERATE REHABILITATION ASSISTANCE.—Paragraph (2) of section 42(c) (defining qualified low-income 

building) is amended by striking the flush sentence at the end. 

(b) MODIFICATION OF TIME LIMIT FOR INCURRING 10 PERCENT

OF PROJECT’S COST.—Clause (ii) of section 42(h)(1)(E) is amended 

by striking ‘‘(as of the later of the date which is 6 months after 

the date that the allocation was made or the close of the calendar 

year in which the allocation is made)’’ and inserting ‘‘(as of the 

date which is 1 year after the date that the allocation was made)’’. 

(c) REPEAL OF BONDING REQUIREMENT ON DISPOSITION OF

BUILDING.—Paragraph (6) of section 42(j) (relating to no recapture 

on disposition of building (or interest therein) where bond posted) 

is amended to read as follows: 

26 USC 42 

note. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2883 

‘‘(6) NO RECAPTURE ON DISPOSITION OF BUILDING WHICH

CONTINUES IN QUALIFIED USE.— 

‘‘(A) IN GENERAL.—The increase in tax under this subsection shall not apply solely by reason of the disposition 

of a building (or an interest therein) if it is reasonably 

expected that such building will continue to be operated 

as a qualified low-income building for the remaining compliance period with respect to such building. 

‘‘(B) STATUTE OF LIMITATIONS.—If a building (or an 

interest therein) is disposed of during any taxable year 

and there is any reduction in the qualified basis of such 

building which results in an increase in tax under this 

subsection for such taxable or any subsequent taxable year, 

then— 

‘‘(i) the statutory period for the assessment of any 

deficiency with respect to such increase in tax shall 

not expire before the expiration of 3 years from the 

date the Secretary is notified by the taxpayer (in such 

manner as the Secretary may prescribe) of such reduction in qualified basis, and 

‘‘(ii) such deficiency may be assessed before the 

expiration of such 3-year period notwithstanding the 

provisions of any other law or rule of law which would 

otherwise prevent such assessment.’’. 

(d) ENERGY EFFICIENCY AND HISTORIC NATURE TAKEN INTO

ACCOUNT IN MAKING ALLOCATIONS.—Subparagraph (C) of section 

42(m)(1) (relating to plans for allocation of credit among projects) 

is amended by striking ‘‘and’’ at the end of clause (vii), by striking 

the period at the end of clause (viii) and inserting a comma, and 

by adding at the end the following new clauses: 

‘‘(ix) the energy efficiency of the project, and 

‘‘(x) the historic nature of the project.’’. 

(e) CONTINUED ELIGIBILITY FOR STUDENTS WHO RECEIVED

FOSTER CARE ASSISTANCE.—Clause (i) of section 42(i)(3)(D) is 

amended by striking ‘‘or’’ at the end of subclause (I), by redesignating subclause (II) as subclause (III), and by inserting after 

subclause (I) the following new subclause: 

‘‘(II) a student who was previously under the 

care and placement responsibility of the State 

agency responsible for administering a plan under 

part B or part E of title IV of the Social Security 

Act, or’’. 

(f) TREATMENT OF RURAL PROJECTS.—Section 42(i) (relating 

to definitions and special rules) is amended by adding at the end 

the following new paragraph: 

‘‘(8) TREATMENT OF RURAL PROJECTS.—For purposes of this 

section, in the case of any project for residential rental property 

located in a rural area (as defined in section 520 of the Housing 

Act of 1949), any income limitation measured by reference 

to area median gross income shall be measured by reference 

to the greater of area median gross income or national nonmetropolitan median income. The preceding sentence shall not 

apply with respect to any building if paragraph (1) of section 

42(h) does not apply by reason of paragraph (4) thereof to 

any portion of the credit determined under this section with 

respect to such building.’’. 

Notification. 


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122 STAT. 2884 PUBLIC LAW 110–289—JULY 30, 2008 

(g) CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT.— 

Subsection (g) of section 42 is amended by adding at the end 

the following new paragraph: 

‘‘(9) CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT.—A project does not fail to meet the general public use 

requirement solely because of occupancy restrictions or preferences that favor tenants— 

‘‘(A) with special needs, 

‘‘(B) who are members of a specified group under a 

Federal program or State program or policy that supports 

housing for such a specified group, or 

‘‘(C) who are involved in artistic or literary activities.’’. 

(h) GAO STUDY REGARDING MODIFICATIONS TO LOW-INCOME

HOUSING TAX CREDIT.—Not later than December 31, 2012, the 

Comptroller General of the United States shall submit to Congress 

a report which analyzes the implementation of the modifications 

made by this subtitle to the low-income housing tax credit under 

section 42 of the Internal Revenue Code of 1986. Such report 

shall include an analysis of the distribution of credit allocations 

before and after the effective date of such modifications. 

(i) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

buildings placed in service after the date of the enactment 

of this Act. 

(2) REPEAL OF BONDING REQUIREMENT ON DISPOSITION OF

BUILDING.—The amendment made by subsection (c) shall apply 

to— 

(A) interests in buildings disposed after the date of 

the enactment of this Act, and 

(B) interests in buildings disposed of on or before such 

date if— 

(i) it is reasonably expected that such building 

will continue to be operated as a qualified low-income 

building (within the meaning of section 42 of the 

Internal Revenue Code of 1986) for the remaining 

compliance period (within the meaning of such section) 

with respect to such building, and 

(ii) the taxpayer elects the application of this 

subparagraph with respect to such disposition. 

(3) ENERGY EFFICIENCY AND HISTORIC NATURE TAKEN INTO

ACCOUNT IN MAKING ALLOCATIONS.—The amendments made by 

subsection (d) shall apply to allocations made after December 

31, 2008. 

(4) CONTINUED ELIGIBILITY FOR STUDENTS WHO RECEIVED

FOSTER CARE ASSISTANCE.—The amendments made by subsection (e) shall apply to determinations made after the date 

of the enactment of this Act. 

(5) TREATMENT OF RURAL PROJECTS.—The amendment 

made by subsection (f) shall apply to determinations made 

after the date of the enactment of this Act. 

(6) CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT.— 

The amendment made by subsection (g) shall apply to buildings 

placed in service before, on, or after the date of the enactment 

of this Act. 

Applicability. 

26 USC 42 

note. 

Deadline. 

Reports. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2885 

SEC. 3005. TREATMENT OF MILITARY BASIC PAY. 

(a) IN GENERAL.—Subparagraph (B) of section 142(d)(2) 

(relating to income of individuals; area median gross income) is 

amended— 

(1) by striking ‘‘The income’’ and inserting the following: 

‘‘(i) IN GENERAL.—The income’’, and 

(2) by adding at the end the following: 

‘‘(ii) SPECIAL RULE RELATING TO BASIC HOUSING

ALLOWANCES.—For purposes of determining income 

under this subparagraph, payments under section 403 

of title 37, United States Code, as a basic pay allowance 

for housing shall be disregarded with respect to any 

qualified building. 

‘‘(iii) QUALIFIED BUILDING.—For purposes of clause 

(ii), the term ‘qualified building’ means any building 

located— 

‘‘(I) in any county in which is located a qualified military installation to which the number of 

members of the Armed Forces of the United States 

assigned to units based out of such qualified military installation, as of June 1, 2008, has increased 

by not less than 20 percent, as compared to such 

number on December 31, 2005, or 

‘‘(II) in any county adjacent to a county 

described in subclause (I). 

‘‘(iv) QUALIFIED MILITARY INSTALLATION.—For purposes of clause (iii), the term ‘qualified military 

installation’ means any military installation or facility 

the number of members of the Armed Forces of the 

United States assigned to which, as of June 1, 2008, 

is not less than 1,000.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to— 

(1) determinations made after the date of the enactment 

of this Act and before January 1, 2012, in the case of any 

qualified building (as defined in section 142(d)(2)(B)(iii) of the 

Internal Revenue Code of 1986)— 

(A) with respect to which housing credit dollar amounts 

have been allocated on or before the date of the enactment 

of this Act, or 

(B) with respect to buildings placed in service before 

such date of enactment, to the extent paragraph (1) of 

section 42(h) of such Code does not apply to such building 

by reason of paragraph (4) thereof, but only with respect 

to bonds issued before such date of enactment, and 

(2) determinations made after the date of enactment of 

this Act, in the case of qualified buildings (as so defined)— 

(A) with respect to which housing credit dollar amounts 

are allocated after the date of the enactment of this Act 

and before January 1, 2012, or 

(B) with respect to which buildings placed in service 

after the date of enactment of this Act and before January 

1, 2012, to the extent paragraph (1) of section 42(h) of 

such Code does not apply to such building by reason of 

paragraph (4) thereof, but only with respect to bonds issued 

after such date of enactment and before January 1, 2012. 

26 USC 142 

note. 


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PART II—MODIFICATIONS TO TAX-EXEMPT 

HOUSING BOND RULES 

SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL PROJECTS. 

(a) IN GENERAL.—Subsection (i) of section 146 (relating to treatment of refunding issues) is amended by adding at the end the 

following new paragraph: 

‘‘(6) TREATMENT OF CERTAIN RESIDENTIAL RENTAL PROJECT

BONDS AS REFUNDING BONDS IRRESPECTIVE OF OBLIGOR.— 

‘‘(A) IN GENERAL.—If, during the 6-month period beginning on the date of a repayment of a loan financed by 

an issue 95 percent or more of the net proceeds of which 

are used to provide projects described in section 142(d), 

such repayment is used to provide a new loan for any 

project so described, any bond which is issued to refinance 

such issue shall be treated as a refunding issue to the 

extent the principal amount of such refunding issue does 

not exceed the principal amount of the bonds refunded. 

‘‘(B) LIMITATIONS.—Subparagraph (A) shall apply to 

only one refunding of the original issue and only if— 

‘‘(i) the refunding issue is issued not later than 

4 years after the date on which the original issue 

was issued, 

‘‘(ii) the latest maturity date of any bond of the 

refunding issue is not later than 34 years after the 

date on which the refunded bond was issued, and 

‘‘(iii) the refunding issue is approved in accordance 

with section 147(f) before the issuance of the refunding 

issue.’’. 

(b) LOW-INCOME HOUSING CREDIT.—Clause (ii) of section 

42(h)(4)(A) is amended by inserting ‘‘or such financing is refunded 

as described in section 146(i)(6)’’ before the period at the end. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to repayments of loans received after the date of the 

enactment of this Act. 

SEC. 3008. COORDINATION OF CERTAIN RULES APPLICABLE TO LOWINCOME HOUSING CREDIT AND QUALIFIED RESIDENTIAL 

RENTAL PROJECT EXEMPT FACILITY BONDS. 

(a) DETERMINATION OF NEXT AVAILABLE UNIT.—Paragraph (3) 

of section 142(d) (relating to current income determinations) is 

amended by adding at the end the following new subparagraph: 

‘‘(C) EXCEPTION FOR PROJECTS WITH RESPECT TO WHICH

AFFORDABLE HOUSING CREDIT IS ALLOWED.—In the case of 

a project with respect to which credit is allowed under 

section 42, the second sentence of subparagraph (B) shall 

be applied by substituting ‘building (within the meaning 

of section 42)’ for ‘project’.’’. 

(b) STUDENTS.—Paragraph (2) of section 142(d) (relating to 

definitions and special rules) is amended by adding at the end 

the following new subparagraph: 

‘‘(C) STUDENTS.—Rules similar to the rules of 

42(i)(3)(D) shall apply for purposes of this subsection.’’. 

(c) SINGLE-ROOM OCCUPANCY UNITS.—Paragraph (2) of section 

142(d) (relating to definitions and special rules), as amended by 

26 USC 42 

note. 

Applicability. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2887 

subsection (b), is amended by adding at the end the following 

new subparagraph: 

‘‘(D) SINGLE-ROOM OCCUPANCY UNITS.—A unit shall not 

fail to be treated as a residential unit merely because 

such unit is a single-room occupancy unit (within the 

meaning of section 42).’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to determinations of the status of qualified residential 

rental projects for periods beginning after the date of the enactment 

of this Act, with respect to bonds issued before, on, or after such 

date. 

PART III—REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-EXEMPT 

HOUSING BONDS 

SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS 

INCOME. 

(a) IN GENERAL.—Paragraph (2) of section 142(d), as amended 

by section 3008, is amended by adding at the end the following 

new subparagraph: 

‘‘(E) HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN

GROSS INCOME.— 

‘‘(i) IN GENERAL.—Any determination of area 

median gross income under subparagraph (B) with 

respect to any project for any calendar year after 2008 

shall not be less than the area median gross income 

determined under such subparagraph with respect to 

such project for the calendar year preceding the calendar year for which such determination is made. 

‘‘(ii) SPECIAL RULE FOR CERTAIN CENSUS

CHANGES.—In the case of a HUD hold harmless 

impacted project, the area median gross income with 

respect to such project for any calendar year after 

2008 (hereafter in this clause referred to as the current 

calendar year) shall be the greater of the amount determined without regard to this clause or the sum of— 

‘‘(I) the area median gross income determined 

under the HUD hold harmless policy with respect 

to such project for calendar year 2008, plus 

‘‘(II) any increase in the area median gross 

income determined under subparagraph (B) (determined without regard to the HUD hold harmless 

policy and this subparagraph) with respect to such 

project for the current calendar year over the area 

median gross income (as so determined) with 

respect to such project for calendar year 2008. 

‘‘(iii) HUD HOLD HARMLESS POLICY.—The term 

‘HUD hold harmless policy’ means the regulations 

under which a policy similar to the rules of clause 

(i) applied to prevent a change in the method of determining area median gross income from resulting in 

a reduction in the area median gross income determined with respect to certain projects in calendar years 

2007 and 2008. 

26 USC 142 

note. 


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122 STAT. 2888 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(iv) HUD HOLD HARMLESS IMPACTED PROJECT.— The term ‘HUD hold harmless impacted project’ means 

any project with respect to which area median gross 

income was determined under subparagraph (B) for 

calendar year 2007 or 2008 if such determination would 

have been less but for the HUD hold harmless policy.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to determinations of area median gross income for 

calendar years after 2008. 

SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT WHERE DETERMINATION NOT RELEVANT. 

(a) IN GENERAL.—Subparagraph (A) of section 142(d)(3) is 

amended by adding at the end the following new sentence: ‘‘The 

preceding sentence shall not apply with respect to any project 

for any year if during such year no residential unit in the project 

is occupied by a new resident whose income exceeds the applicable 

income limit.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to years ending after the date of the enactment of 

this Act. 

Subtitle B—Single Family Housing 

SEC. 3011. FIRST-TIME HOMEBUYER CREDIT. 

(a) IN GENERAL.—Subpart C of part IV of subchapter A of 

chapter 1 is amended by redesignating section 36 as section 37 

and by inserting after section 35 the following new section: 

‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 

‘‘(a) ALLOWANCE OF CREDIT.—In the case of an individual who 

is a first-time homebuyer of a principal residence in the United 

States during a taxable year, there shall be allowed as a credit 

against the tax imposed by this subtitle for such taxable year 

an amount equal to 10 percent of the purchase price of the residence. 

‘‘(b) LIMITATIONS.— 

‘‘(1) DOLLAR LIMITATION.— 

‘‘(A) IN GENERAL.—Except as otherwise provided in 

this paragraph, the credit allowed under subsection (a) 

shall not exceed $7,500. 

‘‘(B) MARRIED INDIVIDUALS FILING SEPARATELY.—In the 

case of a married individual filing a separate return, 

subparagraph (A) shall be applied by substituting ‘$3,750’ 

for ‘$7,500’. 

‘‘(C) OTHER INDIVIDUALS.—If two or more individuals 

who are not married purchase a principal residence, the 

amount of the credit allowed under subsection (a) shall 

be allocated among such individuals in such manner as 

the Secretary may prescribe, except that the total amount 

of the credits allowed to all such individuals shall not 

exceed $7,500. 

‘‘(2) LIMITATION BASED ON MODIFIED ADJUSTED GROSS

INCOME.— 

‘‘(A) IN GENERAL.—The amount allowable as a credit 

under subsection (a) (determined without regard to this 

paragraph) for the taxable year shall be reduced (but not 

26 USC 142 

note. 

26 USC 142 

note. 


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below zero) by the amount which bears the same ratio 

to the amount which is so allowable as— 

‘‘(i) the excess (if any) of— 

‘‘(I) the taxpayer’s modified adjusted gross 

income for such taxable year, over 

‘‘(II) $75,000 ($150,000 in the case of a joint 

return), bears to 

‘‘(ii) $20,000. 

‘‘(B) MODIFIED ADJUSTED GROSS INCOME.—For purposes 

of subparagraph (A), the term ‘modified adjusted gross 

income’ means the adjusted gross income of the taxpayer 

for the taxable year increased by any amount excluded 

from gross income under section 911, 931, or 933. 

‘‘(c) DEFINITIONS.—For purposes of this section— 

‘‘(1) FIRST-TIME HOMEBUYER.—The term ‘first-time homebuyer’ means any individual if such individual (and if married, 

such individual’s spouse) had no present ownership interest 

in a principal residence during the 3-year period ending on 

the date of the purchase of the principal residence to which 

this section applies. 

‘‘(2) PRINCIPAL RESIDENCE.—The term ‘principal residence’ 

has the same meaning as when used in section 121. 

‘‘(3) PURCHASE.— 

‘‘(A) IN GENERAL.—The term ‘purchase’ means any 

acquisition, but only if— 

‘‘(i) the property is not acquired from a person 

related to the person acquiring such property, and 

‘‘(ii) the basis of the property in the hands of 

the person acquiring such property is not determined— 

‘‘(I) in whole or in part by reference to the 

adjusted basis of such property in the hands of 

the person from whom acquired, or 

‘‘(II) under section 1014(a) (relating to property 

acquired from a decedent). 

‘‘(B) CONSTRUCTION.—A residence which is constructed 

by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence. 

‘‘(4) PURCHASE PRICE.—The term ‘purchase price’ means 

the adjusted basis of the principal residence on the date such 

residence is purchased. 

‘‘(5) RELATED PERSONS.—A person shall be treated as 

related to another person if the relationship between such 

persons would result in the disallowance of losses under section 

267 or 707(b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be 

treated as providing that the family of an individual shall 

include only his spouse, ancestors, and lineal descendants). 

‘‘(d) EXCEPTIONS.—No credit under subsection (a) shall be 

allowed to any taxpayer for any taxable year with respect to the 

purchase of a residence if— 

‘‘(1) a credit under section 1400C (relating to first-time 

homebuyer in the District of Columbia) is allowable to the 

taxpayer (or the taxpayer’s spouse) for such taxable year or 

any prior taxable year, 


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‘‘(2) the residence is financed by the proceeds of a qualified 

mortgage issue the interest on which is exempt from tax under 

section 103, 

‘‘(3) the taxpayer is a nonresident alien, or 

‘‘(4) the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer 

(and, if married, the taxpayer’s spouse)) before the close of 

such taxable year. 

‘‘(e) REPORTING.—If the Secretary requires information 

reporting under section 6045 by a person described in subsection 

(e)(2) thereof to verify the eligibility of taxpayers for the credit 

allowable by this section, the exception provided by section 6045(e) 

shall not apply. 

‘‘(f) RECAPTURE OF CREDIT.— 

‘‘(1) IN GENERAL.—Except as otherwise provided in this 

subsection, if a credit under subsection (a) is allowed to a 

taxpayer, the tax imposed by this chapter shall be increased 

by 62⁄3 percent of the amount of such credit for each taxable 

year in the recapture period. 

‘‘(2) ACCELERATION OF RECAPTURE.—If a taxpayer disposes 

of the principal residence with respect to which a credit was 

allowed under subsection (a) (or such residence ceases to be 

the principal residence of the taxpayer (and, if married, the 

taxpayer’s spouse)) before the end of the recapture period— 

‘‘(A) the tax imposed by this chapter for the taxable 

year of such disposition or cessation shall be increased 

by the excess of the amount of the credit allowed over 

the amounts of tax imposed by paragraph (1) for preceding 

taxable years, and 

‘‘(B) paragraph (1) shall not apply with respect to such 

credit for such taxable year or any subsequent taxable 

year. 

‘‘(3) LIMITATION BASED ON GAIN.—In the case of the sale 

of the principal residence to a person who is not related to 

the taxpayer, the increase in tax determined under paragraph 

(2) shall not exceed the amount of gain (if any) on such sale. 

Solely for purposes of the preceding sentence, the adjusted 

basis of such residence shall be reduced by the amount of 

the credit allowed under subsection (a) to the extent not previously recaptured under paragraph (1). 

‘‘(4) EXCEPTIONS.— 

‘‘(A) DEATH OF TAXPAYER.—Paragraphs (1) and (2) shall 

not apply to any taxable year ending after the date of 

the taxpayer’s death. 

‘‘(B) INVOLUNTARY CONVERSION.—Paragraph (2) shall 

not apply in the case of a residence which is compulsorily 

or involuntarily converted (within the meaning of section 

1033(a)) if the taxpayer acquires a new principal residence 

during the 2-year period beginning on the date of the 

disposition or cessation referred to in paragraph (2). Paragraph (2) shall apply to such new principal residence during 

the recapture period in the same manner as if such new 

principal residence were the converted residence. 

‘‘(C) TRANSFERS BETWEEN SPOUSES OR INCIDENT TO

DIVORCE.—In the case of a transfer of a residence to which 

section 1041(a) applies— 


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‘‘(i) paragraph (2) shall not apply to such transfer, 

and 

‘‘(ii) in the case of taxable years ending after such 

transfer, paragraphs (1) and (2) shall apply to the 

transferee in the same manner as if such transferee 

were the transferor (and shall not apply to the transferor). 

‘‘(5) JOINT RETURNS.—In the case of a credit allowed under 

subsection (a) with respect to a joint return, half of such credit 

shall be treated as having been allowed to each individual 

filing such return for purposes of this subsection. 

‘‘(6) RETURN REQUIREMENT.—If the tax imposed by this 

chapter for the taxable year is increased under this subsection, 

the taxpayer shall, notwithstanding section 6012, be required 

to file a return with respect to the taxes imposed under this 

subtitle. 

‘‘(7) RECAPTURE PERIOD.—For purposes of this subsection, 

the term ‘recapture period’ means the 15 taxable years beginning with the second taxable year following the taxable year 

in which the purchase of the principal residence for which 

a credit is allowed under subsection (a) was made. 

‘‘(g) ELECTION TO TREAT PURCHASE IN PRIOR YEAR.—In the 

case of a purchase of a principal residence after December 31, 

2008, and before July 1, 2009, a taxpayer may elect to treat such 

purchase as made on December 31, 2008, for purposes of this 

section (other than subsection (c)). 

‘‘(h) APPLICATION OF SECTION.—This section shall only apply 

to a principal residence purchased by the taxpayer on or after 

April 9, 2008, and before July 1, 2009.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Section 26(b)(2) is amended by striking ‘‘and’’ at the 

end of subparagraph (U), by striking the period and inserting 

‘‘, and’’ and the end of subparagraph (V), and by inserting 

after subparagraph (V) the following new subparagraph: 

‘‘(W) section 36(f) (relating to recapture of homebuyer 

credit).’’. 

(2) Section 6211(b)(4)(A) is amended by striking ‘‘34,’’ and 

all that follows through ‘‘6428’’ and inserting ‘‘34, 35, 36, 53(e), 

and 6428’’. 

(3) Section 1324(b)(2) of title 31, United States Code, is 

amended by inserting ‘‘36,’’ after ‘‘35,’’. 

(4) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by redesignating the item 

relating to section 36 as an item relating to section 37 and 

by inserting before such item the following new item: 

‘‘Sec. 36. First-time homebuyer credit.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to residences purchased on or after April 9, 2008, 

in taxable years ending on or after such date. 

SEC. 3012. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 

TAXES FOR NONITEMIZERS. 

(a) IN GENERAL.—Section 63(c)(1) (defining standard deduction) 

is amended by striking ‘‘and’’ at the end of subparagraph (A), 

by striking the period at the end of subparagraph (B) and inserting 

‘‘, and’’, and by adding at the end the following new subparagraph: 

26 USC 26 

note. 


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122 STAT. 2892 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(C) in the case of any taxable year beginning in 2008, 

the real property tax deduction.’’. 

(b) DEFINITION.—Section 63(c) is amended by adding at the 

end the following new paragraph: 

‘‘(7) REAL PROPERTY TAX DEDUCTION.—For purposes of paragraph (1), the real property tax deduction is the lesser of— 

‘‘(A) the amount allowable as a deduction under this 

chapter for State and local taxes described in section 

164(a)(1), or 

‘‘(B) $500 ($1,000 in the case of a joint return). 

Any taxes taken into account under section 62(a) shall not 

be taken into account under this paragraph.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2007. 

Subtitle C—General Provisions 

SEC. 3021. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING 

BOND RULES. 

(a) TEMPORARY INCREASE IN VOLUME CAP.— 

(1) IN GENERAL.—Subsection (d) of section 146 is amended 

by adding at the end the following new paragraph: 

‘‘(5) INCREASE AND SET ASIDE FOR HOUSING BONDS FOR

2008.— 

‘‘(A) INCREASE FOR 2008.—In the case of calendar year 

2008, the State ceiling for each State shall be increased 

by an amount equal to $11,000,000,000 multiplied by a 

fraction— 

‘‘(i) the numerator of which is the State ceiling 

applicable to the State for calendar year 2008, determined without regard to this paragraph, and 

‘‘(ii) the denominator of which is the sum of the 

State ceilings determined under clause (i) for all States. 

‘‘(B) SET ASIDE.— ‘‘(i) IN GENERAL.—Any amount of the State ceiling 

for any State which is attributable to an increase under 

this paragraph shall be allocated solely for one or 

more qualified housing issues. 

‘‘(ii) QUALIFIED HOUSING ISSUE.—For purposes of 

this paragraph, the term ‘qualified housing issue’ 

means— 

‘‘(I) an issue described in section 142(a)(7) 

(relating to qualified residential rental projects), 

or 

‘‘(II) a qualified mortgage issue (determined 

by substituting ‘12-month period’ for ‘42-month 

period’ each place it appears in section 

143(a)(2)(D)(i)).’’. 

(2) CARRYFORWARD OF UNUSED LIMITATIONS.—Subsection 

(f) of section 146 is amended by adding at the end the following 

new paragraph: 

‘‘(6) SPECIAL RULES FOR INCREASED VOLUME CAP UNDER

SUBSECTION (d)(5).—No amount which is attributable to the 

increase under subsection (d)(5) may be used— 

‘‘(A) for any issue other than a qualified housing issue 

(as defined in subsection (d)(5)), or 

26 USC 63 

note. 


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‘‘(B) to issue any bond after calendar year 2010.’’. 

(b) TEMPORARY RULE FOR USE OF QUALIFIED MORTGAGE BONDS

PROCEEDS FOR SUBPRIME REFINANCING LOANS.— 

(1) IN GENERAL.—Section 143(k) (relating to other definitions and special rules) is amended by adding at the end 

the following new paragraph: 

‘‘(12) SPECIAL RULES FOR SUBPRIME REFINANCINGS.— ‘‘(A) IN GENERAL.—Notwithstanding the requirements 

of subsection (i)(1), the proceeds of a qualified mortgage 

issue may be used to refinance a mortgage on a residence 

which was originally financed by the mortgagor through 

a qualified subprime loan. 

‘‘(B) SPECIAL RULES.—In applying subparagraph (A) 

to any refinancing— 

‘‘(i) subsection (a)(2)(D)(i) shall be applied by substituting ‘12-month period’ for ‘42-month period’ each 

place it appears, 

‘‘(ii) subsection (d) (relating to 3-year requirement) 

shall not apply, and 

‘‘(iii) subsection (e) (relating to purchase price 

requirement) shall be applied by using the market 

value of the residence at the time of refinancing in 

lieu of the acquisition cost. 

‘‘(C) QUALIFIED SUBPRIME LOAN.—The term ‘qualified 

subprime loan’ means an adjustable rate single-family residential mortgage loan made after December 31, 2001, and 

before January 1, 2008, that the bond issuer determines 

would be reasonably likely to cause financial hardship to 

the borrower if not refinanced. 

‘‘(D) TERMINATION.—This paragraph shall not apply 

to any bonds issued after December 31, 2010.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to bonds issued after the date of the enactment of 

this Act. 

SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON 

TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING 

TAX CREDIT, AND REHABILITATION CREDIT. 

(a) TAX-EXEMPT INTEREST ON CERTAIN HOUSING BONDS

EXEMPTED FROM ALTERNATIVE MINIMUM TAX.— 

(1) IN GENERAL.—Subparagraph (C) of section 57(a)(5) 

(relating to specified private activity bonds) is amended by 

redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively, and by inserting after clause (ii) the following new 

clause: 

‘‘(iii) EXCEPTION FOR CERTAIN HOUSING BONDS.— 

For purposes of clause (i), the term ‘private activity 

bond’ shall not include any bond issued after the date 

of the enactment of this clause if such bond is— 

‘‘(I) an exempt facility bond issued as part 

of an issue 95 percent or more of the net proceeds 

of which are to be used to provide qualified residential rental projects (as defined in section 142(d)), 

‘‘(II) a qualified mortgage bond (as defined 

in section 143(a)), or 

‘‘(III) a qualified veterans’ mortgage bond (as 

defined in section 143(b)). 

26 USC 143 

note. 

Applicability. 


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The preceding sentence shall not apply to any 

refunding bond unless such preceding sentence applied 

to the refunded bond (or in the case of a series of 

refundings, the original bond).’’. 

(2) NO ADJUSTMENT TO ADJUSTED CURRENT EARNINGS.— 

Subparagraph (B) of section 56(g)(4) is amended by adding 

at the end the following new clause: 

‘‘(iii) TAX EXEMPT INTEREST ON CERTAIN HOUSING

BONDS.—Clause (i) shall not apply in the case of any 

interest on a bond to which section 57(a)(5)(C)(iii) 

applies.’’. 

(b) ALLOWANCE OF LOW-INCOME HOUSING CREDIT AGAINST

ALTERNATIVE MINIMUM TAX.—Subparagraph (B) of section 38(c)(4) 

(relating to specified credits) is amended by redesignating clauses 

(ii) through (iv) as clauses (iii) through (v) and inserting after 

clause (i) the following new clause: 

‘‘(ii) the credit determined under section 42 to the 

extent attributable to buildings placed in service after 

December 31, 2007,’’. 

(c) ALLOWANCE OF REHABILITATION CREDIT AGAINST ALTERNATIVE MINIMUM TAX.—Subparagraph (B) of section 38(c)(4), as 

amended by subsection (b), is amended by striking ‘‘and’’ at the 

end of clause (iv), by redesignating clause (v) as clause (vi), and 

by inserting after clause (iv) the following new clause: 

‘‘(v) the credit determined under section 47 to the 

extent attributable to qualified rehabilitation expenditures properly taken into account for periods after 

December 31, 2007, and’’. 

(d) EFFECTIVE DATE.— 

(1) HOUSING BONDS.—The amendments made by subsection 

(a) shall apply to bonds issued after the date of the enactment 

of this Act. 

(2) LOW INCOME HOUSING CREDIT.—The amendments made 

by subsection (b) shall apply to credits determined under section 

42 of the Internal Revenue Code of 1986 to the extent attributable to buildings placed in service after December 31, 2007. 

(3) REHABILITATION CREDIT.—The amendments made by 

subsection (c) shall apply to credits determined under section 

47 of the Internal Revenue Code of 1986 to the extent attributable to qualified rehabilitation expenditures properly taken 

into account for periods after December 31, 2007. 

SEC. 3023. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS 

ELIGIBLE FOR TREATMENT AS TAX-EXEMPT BONDS. 

(a) IN GENERAL.—Subparagraph (A) of section 149(b)(3) 

(relating to exceptions for certain insurance programs) is amended 

by striking ‘‘or’’ at the end of clause (ii), by striking the period 

at the end of clause (iii) and inserting ‘‘, or’’ and by adding at 

the end the following new clause: 

‘‘(iv) subject to subparagraph (E), any guarantee 

by a Federal home loan bank made in connection with 

the original issuance of a bond during the period beginning on the date of the enactment of this clause and 

ending on December 31, 2010 (or a renewal or extension of a guarantee so made).’’. 

26 USC 38 

note. 

26 USC 38 

note. 

26 USC 56 

note. 


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(b) SAFETY AND SOUNDNESS REQUIREMENTS.—Paragraph (3) of 

section 149(b) is amended by adding at the end the following new 

subparagraph: 

‘‘(E) SAFETY AND SOUNDNESS REQUIREMENTS FOR FEDERAL HOME LOAN BANKS.—Clause (iv) of subparagraph (A) 

shall not apply to any guarantee by a Federal home loan 

bank unless such bank meets safety and soundness collateral requirements for such guarantees which are at least 

as stringent as such requirements which apply under regulations applicable to such guarantees by Federal home 

loan banks as in effect on April 9, 2008.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to guarantees made after the date of the enactment 

of this Act. 

SEC. 3024. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN AFFIDAVITS. 

(a) IN GENERAL.—Subsection (b) of section 1445 (relating to 

exemptions) is amended by adding at the end the following: 

‘‘(9) ALTERNATIVE PROCEDURE FOR FURNISHING NONFOREIGN

AFFIDAVIT.—For purposes of paragraphs (2) and (7)— 

‘‘(A) IN GENERAL.—Paragraph (2) shall be treated as 

applying to a transaction if, in connection with a disposition 

of a United States real property interest— 

‘‘(i) the affidavit specified in paragraph (2) is furnished to a qualified substitute, and 

‘‘(ii) the qualified substitute furnishes a statement 

to the transferee stating, under penalty of perjury, 

that the qualified substitute has such affidavit in his 

possession. 

‘‘(B) REGULATIONS.—The Secretary shall prescribe such 

regulations as may be necessary or appropriate to carry 

out this paragraph.’’. 

(b) QUALIFIED SUBSTITUTE.—Subsection (f) of section 1445 

(relating to definitions) is amended by adding at the end the following new paragraph: 

‘‘(6) QUALIFIED SUBSTITUTE.—The term ‘qualified substitute’ 

means, with respect to a disposition of a United States real 

property interest— 

‘‘(A) the person (including any attorney or title company) responsible for closing the transaction, other than 

the transferor’s agent, and 

‘‘(B) the transferee’s agent.’’. 

(c) EXEMPTION NOT TO APPLY IF KNOWLEDGE OR NOTICE THAT

AFFIDAVIT OR STATEMENT IS FALSE.— 

(1) IN GENERAL.—Paragraph (7) of section 1445(b) (relating 

to special rules for paragraphs (2) and (3)) is amended to 

read as follows: 

‘‘(7) SPECIAL RULES FOR PARAGRAPHS (2), (3), AND (9).—Paragraph (2), (3), or (9) (as the case may be) shall not apply 

to any disposition— 

‘‘(A) if— 

‘‘(i) the transferee or qualified substitute has actual 

knowledge that the affidavit referred to in such paragraph, or the statement referred to in paragraph 

(9)(A)(ii), is false, or 

26 USC 149 

note. 


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‘‘(ii) the transferee or qualified substitute receives 

a notice (as described in subsection (d)) from a transferor’s agent, transferee’s agent, or qualified substitute 

that such affidavit or statement is false, or 

‘‘(B) if the Secretary by regulations requires the transferee or qualified substitute to furnish a copy of such affidavit or statement to the Secretary and the transferee 

or qualified substitute fails to furnish a copy of such affidavit or statement to the Secretary at such time and in 

such manner as required by such regulations.’’. 

(2) LIABILITY.— (A) NOTICE.—Paragraph (1) of section 1445(d) (relating 

to notice of false affidavit; foreign corporations) is amended 

to read as follows: 

‘‘(1) NOTICE OF FALSE AFFIDAVIT; FOREIGN CORPORATIONS.— If— 

‘‘(A) the transferor furnishes the transferee or qualified 

substitute an affidavit described in paragraph (2) of subsection (b) or a domestic corporation furnishes the transferee an affidavit described in paragraph (3) of subsection 

(b), and 

‘‘(B) in the case of— 

‘‘(i) any transferor’s agent— 

‘‘(I) such agent has actual knowledge that such 

affidavit is false, or 

‘‘(II) in the case of an affidavit described in 

subsection (b)(2) furnished by a corporation, such 

corporation is a foreign corporation, or 

‘‘(ii) any transferee’s agent or qualified substitute, 

such agent or substitute has actual knowledge that 

such affidavit is false, 

such agent or qualified substitute shall so notify the transferee at such time and in such manner as the Secretary 

shall require by regulations.’’. 

(B) FAILURE TO FURNISH NOTICE.—Paragraph (2) of 

section 1445(d) (relating to failure to furnish notice) is 

amended to read as follows: 

‘‘(2) FAILURE TO FURNISH NOTICE.— 

‘‘(A) IN GENERAL.—If any transferor’s agent, transferee’s agent, or qualified substitute is required by paragraph (1) to furnish notice, but fails to furnish such notice 

at such time or times and in such manner as may be 

required by regulations, such agent or substitute shall have 

the same duty to deduct and withhold that the transferee 

would have had if such agent or substitute had complied 

with paragraph (1). 

‘‘(B) LIABILITY LIMITED TO AMOUNT OF COMPENSATION.—An agent’s or substitute’s liability under subparagraph (A) shall be limited to the amount of compensation 

the agent or substitute derives from the transaction.’’. 

(C) CONFORMING AMENDMENT.—The heading for section 1445(d) is amended by striking ‘‘OR TRANSFEREE’S

AGENTS’’ and inserting ‘‘, TRANSFEREE’S AGENTS, OR QUALIFIED SUBSTITUTES’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to dispositions of United States real property interests 

after the date of the enactment of this Act. 

Real property. 

26 USC 1445 

note. 

Regulations. 


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SEC. 3025. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR PURPOSES OF THE REHABILITATION CREDIT. 

(a) IN GENERAL.—Subclause (I) of section 47(c)(2)(B)(v) is 

amended by striking ‘‘section 168(h)’’ and inserting ‘‘section 168(h), 

except that ‘50 percent’ shall be substituted for ‘35 percent’ in 

paragraph (1)(B)(iii) thereof’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to expenditures properly taken into account for periods 

after December 31, 2007. 

SEC. 3026. EXTENSION OF SPECIAL RULE FOR MORTGAGE REVENUE 

BONDS FOR RESIDENCES LOCATED IN DISASTER AREAS. 

(a) IN GENERAL.—Paragraph (11) of section 143(k) is amended— 

(1) by striking ‘‘December 31, 1996’’ and inserting ‘‘May 

1, 2008’’, and 

(2) by striking ‘‘January 1, 1999’’ and inserting ‘‘January 

1, 2010’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to bonds issued after May 1, 2008. 

SEC. 3027. TRANSFER OF FUNDS APPROPRIATED TO CARRY OUT 2008 

RECOVERY REBATES FOR INDIVIDUALS. 

Of the funds made available by section 101(e)(1)(A) of the 

Economic Stimulus Act of 2008 (Public Law 110-185), the Secretary 

of the Treasury may transfer funds among the accounts specified 

in such section to carry out section 6428 of the Internal Revenue 

Code of 1986. The Secretary shall provide advance notification 

of any such transfer to the Committees on Appropriations of the 

House of Representatives and the Senate, and any transfer greater 

than $5,000,000 shall be subject to the approval of such Committees. 

TITLE II—REFORMS RELATED TO REAL 

ESTATE INVESTMENT TRUSTS 

Subtitle A—Foreign Currency and Other 

Qualified Activities 

SEC. 3031. REVISIONS TO REIT INCOME TESTS. 

(a) FOREIGN CURRENCY GAINS NOT GROSS INCOME IN APPLYING

REIT INCOME TESTS.—Section 856 (defining real estate investment 

trust) is amended by adding at the end the following new subsection: 

‘‘(n) RULES REGARDING FOREIGN CURRENCY TRANSACTIONS.— 

‘‘(1) IN GENERAL.—For purposes of this part— 

‘‘(A) passive foreign exchange gain for any taxable year 

shall not constitute gross income for purposes of subsection 

(c)(2), and 

‘‘(B) real estate foreign exchange gain for any taxable 

year shall not constitute gross income for purposes of subsection (c)(3). 

‘‘(2) REAL ESTATE FOREIGN EXCHANGE GAIN.—For purposes 

of this subsection, the term ‘real estate foreign exchange gain’ 

means— 

‘‘(A) foreign currency gain (as defined in section 

988(b)(1)) which is attributable to— 

Notification. 

26 USC 143 

note. 

26 USC 47 

note. 


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‘‘(i) any item of income or gain described in subsection (c)(3), 

‘‘(ii) the acquisition or ownership of obligations 

secured by mortgages on real property or on interests 

in real property (other than foreign currency gain 

attributable to any item of income or gain described 

in clause (i)), or 

‘‘(iii) becoming or being the obligor under obligations secured by mortgages on real property or on 

interests in real property (other than foreign currency 

gain attributable to any item of income or gain 

described in clause (i)), 

‘‘(B) section 987 gain attributable to a qualified business unit (as defined by section 989) of the real estate 

investment trust, but only if such qualified business unit 

meets the requirements under— 

‘‘(i) subsection (c)(3) for the taxable year, and 

‘‘(ii) subsection (c)(4)(A) at the close of each quarter 

that the real estate investment trust has directly or 

indirectly held the qualified business unit, and 

‘‘(C) any other foreign currency gain as determined 

by the Secretary. 

‘‘(3) PASSIVE FOREIGN EXCHANGE GAIN.—For purposes of 

this subsection, the term ‘passive foreign exchange gain’ 

means— 

‘‘(A) real estate foreign exchange gain, 

‘‘(B) foreign currency gain (as defined in section 

988(b)(1)) which is not described in subparagraph (A) and 

which is attributable to— 

‘‘(i) any item of income or gain described in subsection (c)(2), 

‘‘(ii) the acquisition or ownership of obligations 

(other than foreign currency gain attributable to any 

item of income or gain described in clause (i)), or 

‘‘(iii) becoming or being the obligor under obligations (other than foreign currency gain attributable 

to any item of income or gain described in clause 

(i)), and 

‘‘(C) any other foreign currency gain as determined 

by the Secretary. 

‘‘(4) EXCEPTION FOR INCOME FROM SUBSTANTIAL AND REGULAR TRADING.—Notwithstanding this subsection or any other 

provision of this part, any section 988 gain derived by a corporation, trust, or association from dealing, or engaging in substantial and regular trading, in securities (as defined in section 

475(c)(2)) shall constitute gross income which does not qualify 

under paragraph (2) or (3) of subsection (c). This paragraph 

shall not apply to income which does not constitute gross income 

by reason of subsection (c)(5)(G).’’. 

(b) ADDITION TO REIT HEDGING RULE.—Subparagraph (G) of 

section 856(c)(5) is amended to read as follows: 

‘‘(G) TREATMENT OF CERTAIN HEDGING INSTRUMENTS.— 

Except to the extent as determined by the Secretary— 

‘‘(i) any income of a real estate investment trust 

from a hedging transaction (as defined in clause (ii) 

or (iii) of section 1221(b)(2)(A)) which is clearly identified pursuant to section 1221(a)(7), including gain from 


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the sale or disposition of such a transaction, shall 

not constitute gross income under paragraphs (2) and 

(3) to the extent that the transaction hedges any 

indebtedness incurred or to be incurred by the trust 

to acquire or carry real estate assets, and 

‘‘(ii) any income of a real estate investment trust 

from a transaction entered into by the trust primarily 

to manage risk of currency fluctuations with respect 

to any item of income or gain described in paragraph 

(2) or (3) (or any property which generates such income 

or gain), including gain from the termination of such 

a transaction, shall not constitute gross income under 

paragraphs (2) and (3), but only if such transaction 

is clearly identified as such before the close of the 

day on which it was acquired, originated, or entered 

into (or such other time as the Secretary may prescribe).’’. 

(c) AUTHORITY TO EXCLUDE ITEMS OF INCOME FROM REIT 

INCOME TESTS.—Section 856(c)(5) is amended by adding at the 

end the following new subparagraph: 

‘‘(J) SECRETARIAL AUTHORITY TO EXCLUDE OTHER ITEMS

OF INCOME.—To the extent necessary to carry out the purposes of this part, the Secretary is authorized to determine, 

solely for purposes of this part, whether any item of income 

or gain which— 

‘‘(i) does not otherwise qualify under paragraph 

(2) or (3) may be considered as not constituting gross 

income for purposes of paragraphs (2) or (3), or 

‘‘(ii) otherwise constitutes gross income not qualifying under paragraph (2) or (3) may be considered 

as gross income which qualifies under paragraph (2) 

or (3).’’. 

SEC. 3032. REVISIONS TO REIT ASSET TESTS. 

(a) CLARIFICATION OF VALUATION TEST.—The first sentence in 

the matter following section 856(c)(4)(B)(iii)(III) is amended by 

inserting ‘‘(including a discrepancy caused solely by the change 

in the foreign currency exchange rate used to value a foreign 

asset)’’ after ‘‘such requirements’’. 

(b) CLARIFICATION OF PERMISSIBLE ASSET CATEGORY.—Section 

856(c)(5), as amended by section 3031(c), is amended by adding 

at the end the following new subparagraph: 

‘‘(K) CASH.—If the real estate investment trust or its 

qualified business unit (as defined in section 989) uses 

any foreign currency as its functional currency (as defined 

in section 985(b)), the term ‘cash’ includes such foreign 

currency but only to the extent such foreign currency— 

‘‘(i) is held for use in the normal course of the 

activities of the trust or qualified business unit which 

give rise to items of income or gain described in paragraph (2) or (3) of subsection (c) or are directly related 

to acquiring or holding assets described in subsection 

(c)(4), and 

‘‘(ii) is not held in connection with an activity 

described in subsection (n)(4).’’. 


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SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS. 

(a) NET INCOME FROM FORECLOSURE PROPERTY.—Clause (i) 

of section 857(b)(4)(B) is amended to read as follows: 

‘‘(i) gain (including any foreign currency gain, as 

defined in section 988(b)(1)) from the sale or other 

disposition of foreclosure property described in section 

1221(a)(1) and the gross income for the taxable year 

derived from foreclosure property (as defined in section 

856(e)), but only to the extent such gross income is 

not described in (or, in the case of foreign currency 

gain, not attributable to gross income described in) 

section 856(c)(3) other than subparagraph (F) thereof, 

over’’. 

(b) NET INCOME FROM PROHIBITED TRANSACTIONS.—Clause (i) 

of section 857(b)(6)(B) is amended to read as follows: 

‘‘(i) the term ‘net income derived from prohibited 

transactions’ means the excess of the gain (including 

any foreign currency gain, as defined in section 

988(b)(1)) from prohibited transactions over the deductions (including any foreign currency loss, as defined 

in section 988(b)(2)) allowed by this chapter which 

are directly connected with prohibited transactions;’’. 

Subtitle B—Taxable REIT Subsidiaries 

SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST. 

Section 856(c)(4)(B)(ii) is amended— 

(1) by striking ‘‘20 percent’’ and inserting ‘‘25 percent’’, 

and 

(2) by striking ‘‘REIT subsidiaries’’ and all that follows, 

and inserting ‘‘REIT subsidiaries,’’. 

Subtitle C—Dealer Sales 

SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR. 

(a) IN GENERAL.—Section 857(b)(6) (relating to income from 

prohibited transactions) is amended— 

(1) by striking ‘‘4 years’’ in subparagraphs (C)(i), (C)(iv), 

and (D)(i) and inserting ‘‘2 years’’, 

(2) by striking ‘‘4-year period’’ in subparagraphs (C)(ii), 

(D)(ii), and (D)(iii) and inserting ‘‘2-year period’’, and 

(3) by striking ‘‘real estate asset’’and all that follows 

through ‘‘if’’ in the matter preceding clause (i) of subparagraphs 

(C) and (D), respectively, and inserting ‘‘real estate asset (as 

defined in section 856(c)(5)(B)) and which is described in section 

1221(a)(1) if’’. 

(b) RETENTION OF EXISTING LAW.—Section 857(b)(6) is 

amended— 

(1) by striking subparagraph (G) and redesignating subparagraphs (H) and (I) as subparagraphs (G) and (H), respectively, and 

(2) in subparagraph (G), as so redesignated, by adding 

at the end the following: ‘‘For purposes of the preceding sentence, the reference to subparagraph (D) shall be a reference 


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to such subparagraph as in effect on the day before the enactment of the Housing Assistance Tax Act of 2008, as modified 

by subparagraph (G) as so in effect.’’. 

SEC. 3052. DETERMINING VALUE OF SALES UNDER SAFE HARBOR. 

Section 857(b)(6) is amended— 

(1) by striking the semicolon at the end of subparagraph 

(C)(iii) and inserting ‘‘, or (III) the fair market value of property 

(other than sales of foreclosure property or sales to which 

section 1033 applies) sold during the taxable year does not 

exceed 10 percent of the fair market value of all of the assets 

of the trust as of the beginning of the taxable year;’’, and 

(2) by adding ‘‘or’’ at the end of subclause (II) of subparagraph (D)(iv) and by adding at the end of such subparagraph 

the following new subclause: 

‘‘(III) the fair market value of property (other than 

sales of foreclosure property or sales to which section 

1033 applies) sold during the taxable year does not 

exceed 10 percent of the fair market value of all of 

the assets of the trust as of the beginning of the 

taxable year,’’. 

Subtitle D—Health Care REITs 

SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES. 

(a) RELATED PARTY RENTALS.—Subparagraph (B) of section 

856(d)(8) (relating to special rule for taxable REIT subsidiaries) 

is amended to read as follows: 

‘‘(B) EXCEPTION FOR CERTAIN LODGING FACILITIES AND

HEALTH CARE PROPERTY.—The requirements of this 

subparagraph are met with respect to an interest in real 

property which is a qualified lodging facility (as defined 

in paragraph (9)(D)) or a qualified health care property 

(as defined in subsection (e)(6)(D)(i)) leased by the trust 

to a taxable REIT subsidiary of the trust if the property 

is operated on behalf of such subsidiary by a person who 

is an eligible independent contractor. For purposes of this 

section, a taxable REIT subsidiary is not considered to 

be operating or managing a qualified health care property 

or qualified lodging facility solely because it— 

‘‘(i) directly or indirectly possesses a license, 

permit, or similar instrument enabling it to do so, 

or 

‘‘(ii) employs individuals working at such facility 

or property located outside the United States, but only 

if an eligible independent contractor is responsible for 

the daily supervision and direction of such individuals 

on behalf of the taxable REIT subsidiary pursuant 

to a management agreement or similar service contract.’’. 

(b) ELIGIBLE INDEPENDENT CONTRACTOR.—Subparagraphs (A) 

and (B) of section 856(d)(9) (relating to eligible independent contractor) are amended to read as follows: 

‘‘(A) IN GENERAL.—The term ‘eligible independent contractor’ means, with respect to any qualified lodging facility 

or qualified health care property (as defined in subsection 


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122 STAT. 2902 PUBLIC LAW 110–289—JULY 30, 2008 

(e)(6)(D)(i)), any independent contractor if, at the time such 

contractor enters into a management agreement or other 

similar service contract with the taxable REIT subsidiary 

to operate such qualified lodging facility or qualified health 

care property, such contractor (or any related person) is 

actively engaged in the trade or business of operating qualified lodging facilities or qualified health care properties, 

respectively, for any person who is not a related person 

with respect to the real estate investment trust or the 

taxable REIT subsidiary. 

‘‘(B) SPECIAL RULES.—Solely for purposes of this paragraph and paragraph (8)(B), a person shall not fail to 

be treated as an independent contractor with respect to 

any qualified lodging facility or qualified health care property (as so defined) by reason of the following: 

‘‘(i) The taxable REIT subsidiary bears the 

expenses for the operation of such qualified lodging 

facility or qualified health care property pursuant to 

the management agreement or other similar service 

contract. 

‘‘(ii) The taxable REIT subsidiary receives the revenues from the operation of such qualified lodging 

facility or qualified health care property, net of 

expenses for such operation and fees payable to the 

operator pursuant to such agreement or contract. 

‘‘(iii) The real estate investment trust receives 

income from such person with respect to another property that is attributable to a lease of such other property to such person that was in effect as of the later 

of— 

‘‘(I) January 1, 1999, or 

‘‘(II) the earliest date that any taxable REIT 

subsidiary of such trust entered into a management agreement or other similar service contract 

with such person with respect to such qualified 

lodging facility or qualified health care property.’’. 

(c) TAXABLE REIT SUBSIDIARIES.—The last sentence of section 

856(l)(3) is amended— 

(1) by inserting ‘‘or a health care facility’’ after ‘‘a lodging 

facility’’, and 

(2) by inserting ‘‘or health care facility’’ after ‘‘such lodging 

facility’’. 

Subtitle E—Effective Dates 

SEC. 3071. EFFECTIVE DATES. 

(a) IN GENERAL.—Except as otherwise provided in this section, 

the amendments made by this title shall apply to taxable years 

beginning after the date of the enactment of this Act. 

(b) REIT INCOME TESTS.— (1) The amendments made by section 3031(a) and (c) shall 

apply to gains and items of income recognized after the date 

of the enactment of this Act. 

(2) The amendment made by section 3031(b) shall apply 

to transactions entered into after the date of the enactment 

of this Act. 

26 USC 856 

note. 


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(c) CONFORMING FOREIGN CURRENCY REVISIONS.— (1) The amendment made by section 3033(a) shall apply 

to gains recognized after the date of the enactment of this 

Act. 

(2) The amendment made by section 3033(b) shall apply 

to gains and deductions recognized after the date of the enactment of this Act. 

(d) DEALER SALES.—The amendments made by subtitle C shall 

apply to sales made after the date of the enactment of this Act. 

TITLE III—REVENUE PROVISIONS 

Subtitle A—General Provisions 

SEC. 3081. ELECTION TO ACCELERATE THE AMT AND RESEARCH 

CREDITS IN LIEU OF BONUS DEPRECIATION. 

(a) IN GENERAL.—Section 168(k) is amended by adding at the 

end the following new paragraph: 

‘‘(4) ELECTION TO ACCELERATE THE AMT AND RESEARCH

CREDITS IN LIEU OF BONUS DEPRECIATION.— 

‘‘(A) IN GENERAL.—If a corporation elects to have this 

paragraph apply for the first taxable year of the taxpayer 

ending after March 31, 2008, in the case of such taxable 

year and each subsequent taxable year— 

‘‘(i) paragraph (1) shall not apply to any eligible 

qualified property placed in service by the taxpayer, 

‘‘(ii) the applicable depreciation method used under 

this section with respect to such property shall be 

the straight line method, and 

‘‘(iii) each of the limitations described in subparagraph (B) for any such taxable year shall be increased 

by the bonus depreciation amount which is— 

‘‘(I) determined for such taxable year under 

subparagraph (C), and 

‘‘(II) allocated to such limitation under 

subparagraph (E). 

‘‘(B) LIMITATIONS TO BE INCREASED.—The limitations 

described in this subparagraph are— 

‘‘(i) the limitation imposed by section 38(c), and 

‘‘(ii) the limitation imposed by section 53(c). 

‘‘(C) BONUS DEPRECIATION AMOUNT.—For purposes of 

this paragraph— 

‘‘(i) IN GENERAL.—The bonus depreciation amount 

for any taxable year is an amount equal to 20 percent 

of the excess (if any) of— 

‘‘(I) the aggregate amount of depreciation 

which would be allowed under this section for 

eligible qualified property placed in service by the 

taxpayer during such taxable year if paragraph 

(1) applied to all such property, over 

‘‘(II) the aggregate amount of depreciation 

which would be allowed under this section for 

eligible qualified property placed in service by the 

taxpayer during such taxable year if paragraph 

(1) did not apply to any such property. 

Applicability. 

Effective dates. 


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The aggregate amounts determined under subclauses 

(I) and (II) shall be determined without regard to any 

election made under subsection (b)(2)(C), (b)(3)(D), or 

(g)(7) and without regard to subparagraph (A)(ii). 

‘‘(ii) MAXIMUM AMOUNT.—The bonus depreciation 

amount for any taxable year shall not exceed the maximum increase amount under clause (iii), reduced (but 

not below zero) by the sum of the bonus depreciation 

amounts for all preceding taxable years. 

‘‘(iii) MAXIMUM INCREASE AMOUNT.—For purposes 

of clause (ii), the term ‘maximum increase amount’ 

means, with respect to any corporation, the lesser of— 

‘‘(I) $30,000,000, or 

‘‘(II) 6 percent of the sum of the business credit 

increase amount, and the AMT credit increase 

amount, determined with respect to such corporation under subparagraph (E). 

‘‘(iv) AGGREGATION RULE.—All corporations which 

are treated as a single employer under section 52(a) 

shall be treated— 

‘‘(I) as 1 taxpayer for purposes of this paragraph, and 

‘‘(II) as having elected the application of this 

paragraph if any such corporation so elects. 

‘‘(D) ELIGIBLE QUALIFIED PROPERTY.—For purposes of 

this paragraph, the term ‘eligible qualified property’ means 

qualified property under paragraph (2), except that in 

applying paragraph (2) for purposes of this paragraph— 

‘‘(i) ‘March 31, 2008’ shall be substituted for 

‘December 31, 2007’ each place it appears in subparagraph (A) and clauses (i) and (ii) of subparagraph 

(E) thereof, and 

‘‘(ii) only adjusted basis attributable to manufacture, construction, or production after March 31, 2008, 

and before January 1, 2009, shall be taken into account 

under subparagraph (B)(ii) thereof. 

‘‘(E) ALLOCATION OF BONUS DEPRECIATION AMOUNTS.— 

‘‘(i) IN GENERAL.—Subject to clauses (ii) and (iii), 

the taxpayer shall, at such time and in such manner 

as the Secretary may prescribe, specify the portion 

(if any) of the bonus depreciation amount for the taxable year which is to be allocated to each of the limitations described in subparagraph (B) for such taxable 

year. 

‘‘(ii) LIMITATION ON ALLOCATIONS.—The portion of 

the bonus depreciation amount which may be allocated 

under clause (i) to the limitations described in subparagraph (B) for any taxable year shall not exceed— 

‘‘(I) in the case of the limitation described in 

subparagraph (B)(i), the excess of the business 

credit increase amount over the bonus depreciation 

amount allocated to such limitation for all preceding taxable years, and 

‘‘(II) in the case of the limitation described 

in subparagraph (B)(ii), the excess of the AMT 

credit increase amount over the bonus depreciation 


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amount allocated to such limitation for all preceding taxable years. 

‘‘(iii) BUSINESS CREDIT INCREASE AMOUNT.—For 

purposes of this paragraph, the term ‘business credit 

increase amount’ means the amount equal to the portion of the credit allowable under section 38 (determined without regard to subsection (c) thereof) for 

the first taxable year ending after March 31, 2008, 

which is allocable to business credit carryforwards to 

such taxable year which are— 

‘‘(I) from taxable years beginning before 

January 1, 2006, and 

‘‘(II) properly allocable (determined under the 

rules of section 38(d)) to the research credit determined under section 41(a). 

‘‘(iv) AMT CREDIT INCREASE AMOUNT.—For purposes of this paragraph, the term ‘AMT credit increase 

amount’ means the amount equal to the portion of 

the minimum tax credit under section 53(b) for the 

first taxable year ending after March 31, 2008, determined by taking into account only the adjusted minimum tax for taxable years beginning before January 

1, 2006. For purposes of the preceding sentence, credits 

shall be treated as allowed on a first-in, first-out basis. 

‘‘(F) CREDIT REFUNDABLE.—For purposes of section 

6401(b), the aggregate increase in the credits allowable 

under part IV of subchapter A for any taxable year 

resulting from the application of this paragraph shall be 

treated as allowed under subpart C of such part (and 

not any other subpart). 

‘‘(G) OTHER RULES.— 

‘‘(i) ELECTION.—Any election under this paragraph 

(including any allocation under subparagraph (E)) may 

be revoked only with the consent of the Secretary. 

‘‘(ii) PARTNERSHIPS WITH ELECTING PARTNERS.—In 

the case of a corporation making an election under 

subparagraph (A) and which is a partner in a partnership, for purposes of determining such corporation’s 

distributive share of partnership items under section 

702— 

‘‘(I) paragraph (1) shall not apply to any 

eligible qualified property, and 

‘‘(II) the applicable depreciation method used 

under this section with respect to such property 

shall be the straight line method. 

‘‘(iii) SPECIAL RULE FOR PASSENGER AIRCRAFT.— 

In the case of any passenger aircraft, the written 

binding contract limitation under paragraph 

(2)(A)(iii)(I) shall not apply for purposes of subparagraphs (C)(i)(I) and (D).’’. 

(b) APPLICATION TO CERTAIN AUTOMOTIVE PARTNERSHIPS.— 

(1) IN GENERAL.—If an applicable partnership elects the 

application of this subsection— 

(A) the partnership shall be treated as having made 

a payment against the tax imposed by chapter 1 of the 

Internal Revenue Code of 1986 for any applicable taxable 


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year of the partnership in the amount determined under 

paragraph (3), 

(B) in the case of any eligible qualified property placed 

in service by the partnership during any applicable taxable 

year— 

(i) section 168(k) of such Code shall not apply 

in determining the amount of the deduction allowable 

with respect to such property under section 168 of 

such Code, 

(ii) the applicable depreciation method used with 

respect to such property shall be the straight line 

method, and 

(C) the amount of the credit determined under section 

41 of such Code for any applicable taxable year with respect 

to the partnership shall be reduced by the amount of the 

deemed payment under subparagraph (A) for the taxable 

year. 

(2) TREATMENT OF DEEMED PAYMENT.— 

(A) IN GENERAL.—Notwithstanding any other provision 

of the Internal Revenue Code of 1986, the Secretary of 

the Treasury or his delegate shall not use the payment 

of tax described in paragraph (1) as an offset or credit 

against any tax liability of the applicable partnership or 

any partner but shall refund such payment to the 

applicable partnership. 

(B) NO INTEREST.—The payment described in paragraph (1) shall not be taken into account in determining 

any amount of interest under such Code. 

(3) AMOUNT OF DEEMED PAYMENT.—The amount determined 

under this paragraph for any applicable taxable year shall 

be the least of the following: 

(A) The amount which would be determined for the 

taxable year under section 168(k)(4)(C)(i) of the Internal 

Revenue Code of 1986 (as added by the amendments made 

by this section) if an election under section 168(k)(4) of 

such Code were in effect with respect to the partnership. 

(B) The amount of the credit determined under section 

41 of such Code for the taxable year with respect to the 

partnership. 

(C) $30,000,000, reduced by the amount of any payment under this subsection for any preceding taxable year. 

(4) DEFINITIONS.—For purposes of this subsection— 

(A) APPLICABLE PARTNERSHIP.—The term ‘‘applicable 

partnership’’ means a domestic partnership that— 

(i) was formed effective on August 3, 2007, and 

(ii) will produce in excess of 675,000 automobiles 

during the period beginning on January 1, 2008, and 

ending on June 30, 2008. 

(B) APPLICABLE TAXABLE YEAR.—The term ‘‘applicable 

taxable year’’ means any taxable year during which eligible 

qualified property is placed in service. 

(C) ELIGIBLE QUALIFIED PROPERTY.—The term ‘‘eligible 

qualified property’’ has the meaning given such term by 

section 168(k)(4)(D) of the Internal Revenue Code of 1986 

(as added by the amendments made by this section). 

(c) CONFORMING AMENDMENT.—Section 1324(b)(2) of title 31, 

United States Code, as amended by this Act, is amended— 


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(1) by inserting ‘‘168(k)(4)(F),’’ after ‘‘36,’’, and 

(2) by inserting ‘‘, or due under section 3081(b)(2) of the 

Housing Assistance Tax Act of 2008’’ before the period at the 

end. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years ending after March 31, 2008. 

SEC. 3082. CERTAIN GO ZONE INCENTIVES. 

(a) USE OF AMENDED INCOME TAX RETURNS TO TAKE INTO

ACCOUNT RECEIPT OF CERTAIN HURRICANE-RELATED CASUALTY LOSS

GRANTS BY DISALLOWING PREVIOUSLY TAKEN CASUALTY LOSS

DEDUCTIONS.— 

(1) IN GENERAL.—Notwithstanding any other provision of 

the Internal Revenue Code of 1986, if a taxpayer claims a 

deduction for any taxable year with respect to a casualty loss 

to a principal residence (within the meaning of section 121 

of such Code) resulting from Hurricane Katrina, Hurricane 

Rita, or Hurricane Wilma and in a subsequent taxable year 

receives a grant under Public Law 109–148, 109–234, or 110– 

116 as reimbursement for such loss, such taxpayer may elect 

to file an amended income tax return for the taxable year 

in which such deduction was allowed (and for any taxable 

year to which such deduction is carried) and reduce (but not 

below zero) the amount of such deduction by the amount of 

such reimbursement. 

(2) TIME OF FILING AMENDED RETURN.—Paragraph (1) shall 

apply with respect to any grant only if any amended income 

tax returns with respect to such grant are filed not later than 

the later of— 

(A) the due date for filing the tax return for the taxable 

year in which the taxpayer receives such grant, or 

(B) the date which is 1 year after the date of the 

enactment of this Act. 

(3) WAIVER OF PENALTIES AND INTEREST.—Any underpayment of tax resulting from the reduction under paragraph 

(1) of the amount otherwise allowable as a deduction shall 

not be subject to any penalty or interest under such Code 

if such tax is paid not later than 1 year after the filing of 

the amended return to which such reduction relates. 

(b) WAIVER OF DEADLINE ON CONSTRUCTION OF GO ZONE PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.— 

(1) IN GENERAL.—Subparagraph (B) of section 1400N(d)(3) 

is amended to read as follows: 

‘‘(B) without regard to ‘and before January 1, 2009’ 

in clause (i) thereof, and’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to property placed in service after December 

31, 2007. 

(c) INCLUSION OF CERTAIN COUNTIES IN GULF OPPORTUNITY

ZONE FOR PURPOSES OF TAX-EXEMPT BOND FINANCING.— 

(1) IN GENERAL.—Subsection (a) of section 1400N is 

amended by adding at the end the following new paragraph: 

‘‘(8) INCLUSION OF CERTAIN COUNTIES.—For purposes of this 

subsection, the Gulf Opportunity Zone includes Colbert County, 

Alabama and Dallas County, Alabama.’’. 

Alabama. 

26 USC 1400N 

note. 

Deadline. 

26 USC 168 

note. 


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(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect as if included in the provisions of 

the Gulf Opportunity Zone Act of 2005 to which it relates. 

SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT. 

Subsection (b) of section 3101 of title 31, United States Code, 

is amended by striking out the dollar limitation contained in such 

subsection and inserting in lieu thereof $10,615,000,000,000. 

Subtitle B—Revenue Offsets 

SEC. 3091. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT 

OF PAYMENT CARD AND THIRD PARTY NETWORK TRANSACTIONS. 

(a) IN GENERAL.—Subpart B of part III of subchapter A of 

chapter 61 is amended by adding at the end the following new 

section: 

‘‘SEC. 6050W. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF PAYMENT CARD AND THIRD PARTY NETWORK 

TRANSACTIONS. 

‘‘(a) IN GENERAL.—Each payment settlement entity shall make 

a return for each calendar year setting forth— 

‘‘(1) the name, address, and TIN of each participating payee 

to whom one or more payments in settlement of reportable 

payment transactions are made, and 

‘‘(2) the gross amount of the reportable payment transactions with respect to each such participating payee. 

Such return shall be made at such time and in such form and 

manner as the Secretary may require by regulations. 

‘‘(b) PAYMENT SETTLEMENT ENTITY.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘payment settlement entity’ 

means— 

‘‘(A) in the case of a payment card transaction, the 

merchant acquiring entity, and 

‘‘(B) in the case of a third party network transaction, 

the third party settlement organization. 

‘‘(2) MERCHANT ACQUIRING ENTITY.—The term ‘merchant 

acquiring entity’ means the bank or other organization which 

has the contractual obligation to make payment to participating 

payees in settlement of payment card transactions. 

‘‘(3) THIRD PARTY SETTLEMENT ORGANIZATION.—The term 

‘third party settlement organization’ means the central 

organization which has the contractual obligation to make payment to participating payees of third party network transactions. 

‘‘(4) SPECIAL RULES RELATED TO INTERMEDIARIES.—For purposes of this section— 

‘‘(A) AGGREGATED PAYEES.—In any case where reportable payment transactions of more than one participating 

payee are settled through an intermediary— 

‘‘(i) such intermediary shall be treated as the 

participating payee for purposes of determining the 

reporting obligations of the payment settlement entity 

with respect to such transactions, and 

26 USC 1400N 

note. 


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‘‘(ii) such intermediary shall be treated as the payment settlement entity with respect to the settlement 

of such transactions with the participating payees. 

‘‘(B) ELECTRONIC PAYMENT FACILITATORS.—In any case 

where an electronic payment facilitator or other third party 

makes payments in settlement of reportable payment transactions on behalf of the payment settlement entity, the 

return under subsection (a) shall be made by such electronic 

payment facilitator or other third party in lieu of the payment settlement entity. 

‘‘(c) REPORTABLE PAYMENT TRANSACTION.—For purposes of this 

section— 

‘‘(1) IN GENERAL.—The term ‘reportable payment transaction’ means any payment card transaction and any third 

party network transaction. 

‘‘(2) PAYMENT CARD TRANSACTION.—The term ‘payment card 

transaction’ means any transaction in which a payment card 

is accepted as payment. 

‘‘(3) THIRD PARTY NETWORK TRANSACTION.—The term ‘third 

party network transaction’ means any transaction which is 

settled through a third party payment network. 

‘‘(d) OTHER DEFINITIONS.—For purposes of this section— 

‘‘(1) PARTICIPATING PAYEE.— 

‘‘(A) IN GENERAL.—The term ‘participating payee’ 

means— 

‘‘(i) in the case of a payment card transaction, 

any person who accepts a payment card as payment, 

and 

‘‘(ii) in the case of a third party network transaction, any person who accepts payment from a third 

party settlement organization in settlement of such 

transaction. 

‘‘(B) EXCLUSION OF FOREIGN PERSONS.—Except as provided by the Secretary in regulations or other guidance, 

such term shall not include any person with a foreign 

address. 

‘‘(C) INCLUSION OF GOVERNMENTAL UNITS.—The term 

‘person’ includes any governmental unit (and any agency 

or instrumentality thereof). 

‘‘(2) PAYMENT CARD.—The term ‘payment card’ means any 

card which is issued pursuant to an agreement or arrangement 

which provides for— 

‘‘(A) one or more issuers of such cards, 

‘‘(B) a network of persons unrelated to each other, 

and to the issuer, who agree to accept such cards as payment, and 

‘‘(C) standards and mechanisms for settling the transactions between the merchant acquiring entities and the 

persons who agree to accept such cards as payment. 

The acceptance as payment of any account number or other 

indicia associated with a payment card shall be treated for 

purposes of this section in the same manner as accepting such 

payment card as payment. 

‘‘(3) THIRD PARTY PAYMENT NETWORK.—The term ‘third 

party payment network’ means any agreement or arrangement— 


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‘‘(A) which involves the establishment of accounts with 

a central organization by a substantial number of persons 

who— 

‘‘(i) are unrelated to such organization, 

‘‘(ii) provide goods or services, and 

‘‘(iii) have agreed to settle transactions for the 

provision of such goods or services pursuant to such 

agreement or arrangement, 

‘‘(B) which provides for standards and mechanisms 

for settling such transactions, and 

‘‘(C) which guarantees persons providing goods or services pursuant to such agreement or arrangement that such 

persons will be paid for providing such goods or services. 

Such term shall not include any agreement or arrangement 

which provides for the issuance of payment cards. 

‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY THIRD PARTY

SETTLEMENT ORGANIZATIONS.—A third party settlement organization shall be required to report any information under subsection 

(a) with respect to third party network transactions of any participating payee only if— 

‘‘(1) the amount which would otherwise be reported under 

subsection (a)(2) with respect to such transactions exceeds 

$20,000, and 

‘‘(2) the aggregate number of such transactions exceeds 

200. 

‘‘(f) STATEMENTS TO BE FURNISHED TO PERSONS WITH RESPECT

TO WHOM INFORMATION IS REQUIRED.—Every person required to 

make a return under subsection (a) shall furnish to each person 

with respect to whom such a return is required a written statement 

showing— 

‘‘(1) the name, address, and phone number of the information contact of the person required to make such return, and 

‘‘(2) the gross amount of the reportable payment transactions with respect to the person required to be shown on 

the return. 

The written statement required under the preceding sentence shall 

be furnished to the person on or before January 31 of the year 

following the calendar year for which the return under subsection 

(a) was required to be made. Such statement may be furnished 

electronically, and if so, the email address of the person required 

to make such return may be shown in lieu of the phone number. 

‘‘(g) REGULATIONS.—The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to 

carry out this section, including rules to prevent the reporting 

of the same transaction more than once.’’. 

(b) PENALTY FOR FAILURE TO FILE.— 

(1) RETURN.—Subparagraph (B) of section 6724(d)(1) is 

amended— 

(A) by striking ‘‘or’’ at the end of clause (xx), 

(B) by redesignating the clause (xix) that follows clause 

(xx) as clause (xxi), 

(C) by striking ‘‘and’’ at the end of clause (xxi), as 

redesignated by subparagraph (B) and inserting ‘‘or’’, and 

(D) by adding at the end the following: 

‘‘(xxii) section 6050W (relating to returns to payments made in settlement of payment card transactions), and’’. 

E-mail. 

Deadline. 

Records. 

Reports. 


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(2) STATEMENT.—Paragraph (2) of section 6724(d) is 

amended by striking ‘‘or’’ at the end of subparagraph (BB), 

by striking the period at the end of the subparagraph (CC) 

and inserting ‘‘, or’’, and by inserting after subparagraph (CC) 

the following: 

‘‘(DD) section 6050W(c) (relating to returns relating 

to payments made in settlement of payment card transactions).’’. 

(c) APPLICATION OF BACKUP WITHHOLDING.—Paragraph (3) of 

section 3406(b) is amended by striking ‘‘or’’ at the end of subparagraph (D), by striking the period at the end of subparagraph (E) 

and inserting ‘‘, or’’, and by adding at the end the following new 

subparagraph: 

‘‘(F) section 6050W (relating to returns relating to payments made in settlement of payment card transactions).’’. 

(d) CLERICAL AMENDMENT.—The table of sections for subpart 

B of part III of subchapter A of chapter 61 is amended by inserting 

after the item relating to section 6050V the following: 

‘‘Sec. 6050W. Returns relating to payments made in settlement of payment card 

transactions.’’. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

returns for calendar years beginning after December 31, 2010. 

(2) APPLICATION OF BACKUP WITHHOLDING.— 

(A) IN GENERAL.—The amendment made by subsection 

(c) shall apply to amounts paid after December 31, 2011. 

(B) ELIGIBILITY FOR TIN MATCHING PROGRAM.—Solely 

for purposes of carrying out any TIN matching program 

established by the Secretary under section 3406(i) of the 

Internal Revenue Code of 1986— 

(i) the amendments made this section shall be 

treated as taking effect on the date of the enactment 

of this Act, and 

(ii) each person responsible for setting the standards and mechanisms referred to in section 

6050W(d)(2)(C) of such Code, as added by this section, 

for settling transactions involving payment cards shall 

be treated in the same manner as a payment settlement entity. 

SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED 

TO NONQUALIFIED USE NOT EXCLUDED FROM INCOME. 

(a) IN GENERAL.—Subsection (b) of section 121 of the Internal 

Revenue Code of 1986 (relating to limitations) is amended by adding 

at the end the following new paragraph: 

‘‘(4) EXCLUSION OF GAIN ALLOCATED TO NONQUALIFIED

USE.— 

‘‘(A) IN GENERAL.—Subsection (a) shall not apply to 

so much of the gain from the sale or exchange of property 

as is allocated to periods of nonqualified use. 

‘‘(B) GAIN ALLOCATED TO PERIODS OF NONQUALIFIED

USE.—For purposes of subparagraph (A), gain shall be allocated to periods of nonqualified use based on the ratio 

which— 

26 USC 3406 

note. 


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122 STAT. 2912 PUBLIC LAW 110–289—JULY 30, 2008 

‘‘(i) the aggregate periods of nonqualified use 

during the period such property was owned by the 

taxpayer, bears to 

‘‘(ii) the period such property was owned by the 

taxpayer. 

‘‘(C) PERIOD OF NONQUALIFIED USE.—For purposes of 

this paragraph— 

‘‘(i) IN GENERAL.—The term ‘period of nonqualified 

use’ means any period (other than the portion of any 

period preceding January 1, 2009) during which the 

property is not used as the principal residence of the 

taxpayer or the taxpayer’s spouse or former spouse. 

‘‘(ii) EXCEPTIONS.—The term ‘period of nonqualified 

use’ does not include— 

‘‘(I) any portion of the 5-year period described 

in subsection (a) which is after the last date that 

such property is used as the principal residence 

of the taxpayer or the taxpayer’s spouse, 

‘‘(II) any period (not to exceed an aggregate 

period of 10 years) during which the taxpayer or 

the taxpayer’s spouse is serving on qualified official 

extended duty (as defined in subsection (d)(9)(C)) 

described in clause (i), (ii), or (iii) of subsection 

(d)(9)(A), and 

‘‘(III) any other period of temporary absence 

(not to exceed an aggregate period of 2 years) 

due to change of employment, health conditions, 

or such other unforeseen circumstances as may 

be specified by the Secretary. 

‘‘(D) COORDINATION WITH RECOGNITION OF GAIN ATTRIB- UTABLE TO DEPRECIATION.—For purposes of this paragraph— 

‘‘(i) subparagraph (A) shall be applied after the 

application of subsection (d)(6), and 

‘‘(ii) subparagraph (B) shall be applied without 

regard to any gain to which subsection (d)(6) applies.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to sales and exchanges after December 31, 2008. 

SEC. 3093. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF 

INTEREST. 

(a) IN GENERAL.—Paragraphs (5)(D) and (6) of section 864(f) 

are each amended by striking ‘‘December 31, 2008’’ and inserting 

‘‘December 31, 2010’’. 

(b) TRANSITIONAL RULE.—Subsection (f) of section 864 is 

amended by adding at the end the following new paragraph: 

‘‘(7) TRANSITION.—In the case of the first taxable year 

to which this subsection applies, the increase (if any) in the 

amount of the interest expense allocable to sources within 

the United States by reason of the application of this subsection 

shall be 30 percent of the amount of such increase determined 

without regard to this paragraph.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2008. 

SEC. 3094. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 

(a) REPEAL OF ADJUSTMENT FOR 2012.—Subparagraph (B) of 

section 401(1) of the Tax Increase Prevention and Reconciliation 

26 USC 864 

note. 

26 USC 121 

note. 

Applicability. 


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PUBLIC LAW 110–289—JULY 30, 2008 122 STAT. 2913 

LEGISLATIVE HISTORY—H.R. 3221: 

CONGRESSIONAL RECORD: 

Vol. 153 (2007): Aug. 4, considered and passed House. 

Vol. 154 (2008): Apr. 3, 4, 7–10, considered and passed Senate, amended. 

May 8, House concurred in Senate amendment with 

amendments. 

June 19, 20, 23–26, July 7–11, Senate considered and 

concurred in House amendments with amendment. 

July 23, House concurred in Senate amendment with 

amendment. 

July 25, 26, Senate considered and concurred in House 

amendment. 

Æ 

Act of 2005 is amended by striking the percentage contained therein 

and inserting ‘‘100 percent’’. No other provision of law which would 

change such percentage shall have any force and effect. 

(b) MODIFICATION OF ADJUSTMENT FOR 2013.—The percentage 

under subparagraph (C) of section 401(1) of the Tax Increase 

Prevention and Reconciliation Act of 2005 in effect on the date 

of the enactment of this Act is increased by 16.75 percentage 

points. 

Approved July 30, 2008. 

26 USC 6655 

note. 

26 USC 6655 

note. 


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