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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6256 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 6256

   To establish a shared equity homeownership pilot program for FHA 
                          mortgage insurance.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2010

 Mr. Gary G. Miller of California introduced the following bill; which 
          was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL

 
   To establish a shared equity homeownership pilot program for FHA 
                          mortgage insurance.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Strengthening FHA Through Shared 
Equity Homeownership Act of 2010''.

SEC. 2. SHARED EQUITY PILOT PROGRAM.

    (a) Purpose.--The purpose of this section is to establish a shared 
equity homeownership pilot program for FHA mortgage insurance to 
complement FHA mortgage lending activity to analyze the effectiveness 
of shared equity finance methods that stimulate the flow of private 
equity capital into the housing sector, while mitigating risk to 
borrowers and to the Mutual Mortgage Insurance Fund.
    (b) Establishment.--The Secretary of Housing and Urban Development 
(in this section referred to as the ``Secretary'') shall carry out a 
pilot program under this section (in this section referred to as the 
``pilot program)'' to analyze the effectiveness of providing mortgage 
insurance under the FHA mortgage insurance program for mortgages for 
the acquisition or refinancing of 1- to 4-family residences that are 
financed in part through a shared equity arrangement under which 
independent, private sector investors invest, together with the 
mortgagors, equity funds for such residences and thereby share in the 
ownership of such residences.
    (c) Application and Selection.--
            (1) Eligibility and application.--The Secretary shall 
        establish eligibility requirements for financial institutions, 
        nonprofit organizations, housing associations, investment 
        pools, and other appropriate individuals and entities to 
        participate in the pilot program and shall provide for eligible 
        entities to apply to the Secretary for such participation. Such 
        applications shall include such information as the Secretary 
        considers appropriate regarding the matters referred to in 
        subparagraphs (A) through (D) of paragraph (2).
            (2) Selection.--Not later than 270 days after the date of 
        the enactment of this Act, the Secretary shall select not more 
        than 8 individuals and entities to participate in the pilot 
        program, from among eligible individuals and entities applying 
        for such participation, using criteria established by the 
        Secretary, which shall include criteria based on--
                    (A) the methodology to be used for deploying equity 
                sharing capital, which shall ensure that equity sharing 
                capital shall be deployed from private sector sources;
                    (B) a definition of markets to be targeted;
                    (C) legal agreements and disclosures necessary to 
                protect mortgagors and all other involved parties and 
                to provide for periodic program monitoring; and
                    (D) the source and level of revenue expected to be 
                derived from participating in the pilot program.
    (d) Principal Residence.--A residence acquired with a mortgage that 
is insured by the Secretary under the pilot program shall be occupied 
by the mortgagor as the primary residence of the mortgagor.
    (e) Downpayment.--The mortgagor under a mortgage insured by the 
Secretary under the pilot program shall comply with the requirement 
under section 203(b)(9) of the National Housing Act (12 U.S.C. 
1709(b)(9)) that the mortgagor invest the amount required by the 
Secretary, which shall be not less than 3.5 percent of the appraised 
value of the residence.
    (f) Minimum Homebuyer Equity.--The mortgagor under the mortgage 
insured by the Secretary under the pilot program shall retain a 
percentage of ownership in the residence under the shared equity 
arrangement that is not less than 60 percent.
    (g) Insurance Premiums.--Notwithstanding section 203(c)(2)(B) of 
the National Housing Act (12 U.S.C. 1709(c)(2)(B)), the Secretary shall 
establish and collect annual premium payments on mortgages insured by 
the Secretary under the pilot program in an amount based on the annual 
premium charged under such section 203(c)(2)(B), as adjusted by the 
Secretary to account for any reduced risk in insuring such mortgages 
attributable to the shared equity arrangement.
    (h) Rights of Mortgagor.--The Secretary shall establish 
requirements to ensure the mortgagor maintains occupancy rights in the 
property subject to the mortgage insured under the pilot program. A 
mortgagor and shared equity investor shall receive transactional 
documentation that addresses the rights, privileges and 
responsibilities of both the mortgagor and shared equity investor.
    (i) Scope.--
            (1) Geographic diversity.--The Secretary shall carry out 
        the pilot program in multiple regional mortgage markets in the 
        United States.
            (2) Equity sharing capital investments.--The Secretary 
        shall, for each eligible entity participating in the pilot 
        program, limit the amount of equity sharing capital invested 
        under the pilot program to $25,000,000.
            (3) Timing.--The Secretary may not insure any mortgage in 
        connection with the pilot program after the expiration of the 
        two-year period beginning on the date of the implementation of 
        the pilot program under this Act.
    (j) Waiver.--The Secretary may waive, or specify alternative 
requirements for, any provision of any statute, regulation, or 
guideline that the Secretary administers (except for requirements 
related to fair housing, nondiscrimination, labor standards, and the 
environment) upon a determination by the Secretary that such waiver is 
appropriate to carry out the pilot program under this section.
    (k) Monitoring and Reporting.--
            (1) Monitoring.--The Secretary shall provide for such 
        monitoring of the pilot program, investors participating in the 
        pilot program, and shared equity arrangements entered into 
        under the pilot program as may be necessary to determine the 
        effectiveness of the pilot program and of the structure of, and 
        requirements under, the pilot program.
            (2) Reports to congress.--Not later than the expiration of 
        the 18-month period beginning on the date of the enactment of 
        this Act, the Comptroller General of the United States shall 
        submit a report to the Congress analyzing effectiveness of the 
        pilot program and making recommendations regarding expansion of 
        the pilot program and improvements for the pilot program.
                                 <all>
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