I 

113TH CONGRESS 

2D SESSION H. R. 5055 

To reform the housing finance system of the United States, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 10, 2014 

Mr. DELANEY (for himself, Mr. CARNEY, Mr. HIMES, Mr. POLIS, Mr. DAVID

SCOTT of Georgia, Mr. MURPHY of Florida, Mr. HECK of Washington, 

Ms. SINEMA, Mr. MEEKS, Mr. FOSTER, Mr. WELCH, Mr. OWENS, and 

Mr. QUIGLEY) introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To reform the housing finance system of the United States, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Partnership to Strengthen Homeownership Act of 2014’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—GINNIE MAE 


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Sec. 101. Removal from HUD; establishment as independent entity. 

Sec. 102. Transfer to Ginnie Mae of powers, personnel, and property of FHFA. 

Sec. 103. Regulation of market participants and aggregators. 

Sec. 104. Regulatory consultation and coordination. 

TITLE II—SECURITIZATION AND INSURANCE 

Sec. 201. Issuing Platform. 

Sec. 202. Insurance. 

Sec. 203. Authority to protect taxpayers in unusual and exigent market conditions. 

Sec. 204. Servicing rights; representations and warranties. 

Sec. 205. Federal Home Loan Banks. 

TITLE III—WIND DOWN OF FANNIE MAE AND FREDDIE MAC 

Sec. 301. Limitation on business. 

Sec. 302. Risk-sharing pilot programs. 

Sec. 303. Continued conservatorship. 

Sec. 304. Mandatory receivership. 

Sec. 305. Repeal of enterprise charters. 

Sec. 306. Ginnie Mae authority regarding timing. 

TITLE IV—MULTIFAMILY HOUSING FINANCE 

Sec. 401. Establishment of multifamily subsidiaries. 

Sec. 402. Disposition of multifamily businesses. 

Sec. 403. Approval and supervision of multifamily guarantors. 

Sec. 404. Other forms of multifamily risk-sharing. 

Sec. 405. Ginnie Mae securitization of FHA risk-sharing loans. 

TITLE V—AFFORDABLE HOUSING 

Sec. 501. Affordable housing allocations. 

Sec. 502. Housing Trust Fund. 

Sec. 503. Capital Magnet Fund. 

Sec. 504. Market Access Fund. 

TITLE VI—GENERAL PROVISIONS 

Sec. 601. Rule of construction regarding Senior Preferred Stock Purchase 

Agreements. 

Sec. 602. Treatment of community development financial institution. 

1 SEC. 2. DEFINITIONS. 

2 For purposes of this Act: 

3 (1) BANKING DEFINITIONS.—The term ‘‘bank’’ 

4 and ‘‘savings association’’ have the meaning given 

5 those terms, respectively, under section 3 of the 

6 Federal Deposit Insurance Act (12 U.S.C. 1813). 


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1 (2) CERTIFICATION DATE.—The term ‘‘certifi2 cation date’’ means the earlier of— 

3 (A) the date on which Ginnie Mae makes 

4 the certification described under section 201(h); 

5 and 

6 (B) the date that is the end of the 2-year 

7 period beginning on the date of the enactment 

8 of this Act. 

9 (3) CHARTER ACT.—The term ‘‘charter Act’’ 

10 means— 

11 (A) with respect to the Federal National 

12 Mortgage Association, the Federal National 

13 Mortgage Association Charter Act (12 U.S.C. 

14 1716 et seq.); and 

15 (B) with respect to the Federal Home 

16 Loan Mortgage Corporation, the Federal Home 

17 Loan Mortgage Corporation Act (12 U.S.C. 

18 1451 et seq.). 

19 (4) CREDIT UNION.—The term ‘‘credit union’’ 

20 means any ‘‘Federal credit union’’ or ‘‘State credit 

21 union’’, as such terms are defined under section 101 

22 of the Federal Credit Union Act (12 U.S.C. 1752). 

23 (5) DIRECTOR.—The term ‘‘Director’’ means 

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1 tablished pursuant to the amendments made by sec2 tion 101(c)(1). 

3 (6) ELIGIBLE MORTGAGE.—The term ‘‘eligible 

4 mortgage’’— 

5 (A) has the meaning given the term 

6 ‘‘qualified mortgage’’ under section 

7 129C(b)(2)(A) of the Truth in Lending Act (15 

8 U.S.C. 1639c), as such meaning may be ad9 justed by the Director if the Director deter10 mines such adjustment is appropriate; and 

11 (B) includes such other minimum stand12 ards as may be established by the Platform, to 

13 ensure the quality of mortgages used to 

14 collateralize mortgage-backed securities issued 

15 by the Platform. 

16 (7) ELIGIBLE MULTIFAMILY MORTGAGE

17 LOAN.—The term ‘‘eligible multifamily mortgage 

18 loan’’ means a commercial real estate loan— 

19 (A) secured by a property with— 

20 (i) 5 or more residential units; or 

21 (ii) 2 or more residential units, if the 

22 requirement under clause (i) is waived by 

23 the Director for purposes of carrying out a 

24 demonstration or pilot program; 


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1 (B) the primary source of repayment for 

2 which is expected to be derived from rental in3 come generated by the property; 

4 (C) the term of which may not be less than 

5 5 years but not more than 40 years; 

6 (D) that satisfies any additional under7 writing criteria established by the Director to 

8 balance supporting access to capital with man9 aging credit risk to the Fund, including— 

10 (i) a maximum loan-to-value ratio; 

11 (ii) a minimum debt service coverage 

12 ratio; and 

13 (iii) considerations for restrictive or 

14 special uses of a property, including non15 residential uses, properties for seniors, 

16 manufactured housing, and affordability 

17 restrictions, and the impact of such uses 

18 on clauses (i) and (ii); and 

19 (E) that satisfies any additional under20 writing criteria that may be established by the 

21 Director. 

22 (8) ENTERPRISE.—The term ‘‘enterprise’’ 

23 means— 

24 (A) the Federal National Mortgage Asso25 ciation and any affiliate thereof; and 


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1 (B) the Federal Home Loan Mortgage 

2 Corporation and any affiliate thereof. 

3 (9) FUND.—The term ‘‘Fund’’ means the in4 surance fund established under section 202(g). 

5 (10) GINNIE MAE.—The term ‘‘Ginnie Mae’’ 

6 means the Government National Mortgage Associa7 tion. 

8 (11) MARKET PARTICIPANT.—The term ‘‘mar9 ket participant’’ means any insurance company, 

10 bank, saving association, credit union, or real estate 

11 investment trust insuring or reinsuring any part of 

12 a security issued by the Platform. 

13 (12) PARTICIPATING AGGREGATOR.—The term 

14 ‘‘participating aggregator’’ means an aggregator of 

15 eligible mortgages that collateralize mortgage-backed 

16 securities issued by the Platform pursuant to title 

17 II. 

18 (13) PLATFORM.—The term ‘‘Platform’’ means 

19 the Issuing Platform established under section 

20 201(a). 

21 (14) REAL ESTATE INVESTMENT TRUST.—The 

22 term ‘‘real estate investment trust’’ has the meaning 

23 given such term under section 856(a) of the Internal 

24 Revenue Code of 1986. 


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1 TITLE I—GINNIE MAE 

2 SEC. 101. REMOVAL FROM HUD; ESTABLISHMENT AS INDE3 PENDENT ENTITY. 

4 (a) IN GENERAL.—Paragraph (2) of section 302(a) 

5 of the National Housing Act (12 U.S.C. 1717(a)(2)) is 

6 amended by striking ‘‘in the Department of Housing and 

7 Urban Development’’ and inserting ‘‘independent of any 

8 other agency or office in the Federal Government’’. 

9 (b) CONFORMING AMENDMENTS.—Title III of the 

10 National Housing Act (12 U.S.C. 1716 et seq.) is amend11 ed— 

12 (1) in section 306(g)(3)(D) (12 U.S.C. 

13 1721(g)(3)(D)), by striking ‘‘Secretary’’ and insert14 ing ‘‘Association’’; 

15 (2) in section 307 (12 U.S.C. 1722), by striking 

16 ‘‘Secretary of Housing and Urban Development’’ 

17 and inserting ‘‘Association’’; and 

18 (3) in section 317 (12 U.S.C. 1723i)— 

19 (A) in subsection (a)(1), by striking ‘‘Sec20 retary of Housing and Urban Development’’ 

21 and inserting ‘‘Director of the Association’’; 

22 (B) in subsection (c)(4), by striking ‘‘Sec23 retary’s’’ and inserting ‘‘Director of the Asso24 ciation’s’’; 


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1 (C) in subsection (d)(1), by striking ‘‘Sec2 retary’s’’ and inserting ‘‘Director of the Asso3 ciation’s’’; 

4 (D) in the heading for subsection (f), by 

5 striking ‘‘BY SECRETARY’’; and 

6 (E) by striking ‘‘Secretary’’ each place 

7 such term appears and inserting ‘‘Director of 

8 the Association’’. 

9 (c) MANAGEMENT; DIRECTOR.— 

10 (1) INDEPENDENCE AND TERM.—Subsection 

11 (a) of section 308 of the National Housing Act (12 

12 U.S.C. 1723(a)) is amended— 

13 (A) in the first sentence— 

14 (i) by striking ‘‘Secretary of Housing 

15 and Urban Development’’ and inserting 

16 ‘‘Director of the Association appointed 

17 pursuant to this subsection’’; and 

18 (ii) by striking ‘‘of the Secretary’’ and 

19 inserting ‘‘of the Director’’; 

20 (B) in the second sentence, by striking 

21 ‘‘Secretary’’ and inserting ‘‘Director’’; 

22 (C) in the third sentence— 

23 (i) by striking ‘‘in the Department of 

24 Housing and Urban Development’’; and 


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1 (ii) by inserting before the period at 

2 the end the following: ‘‘, and shall be ap3 pointed for a term of 5 years, unless re4 moved before the end of such term for 

5 cause by the President’’; 

6 (D) in the last sentence, by striking ‘‘Sec7 retary’’ and inserting ‘‘Director’’; and 

8 (E) by adding at the end the following un9 designated paragraph: 

10 ‘‘A vacancy in the position of Director that occurs 

11 before the expiration of the term for which a Director was 

12 appointed shall be filled in the manner established under 

13 paragraph (1), and the Director appointed to fill such va14 cancy shall be appointed only for the remainder of such 

15 term. If the Senate has not confirmed a Director, the 

16 President may designate either the individual nominated 

17 but not yet confirmed for the position of Director or an18 other individual, to serve as the Acting Director, and such 

19 Acting Director shall have all the rights, duties, powers, 

20 and responsibilities of the Director, until such time as a 

21 Director is confirmed by the Senate. An individual may 

22 serve as the Director after the expiration of the term for 

23 which appointed until a successor has been appointed or 

24 confirmed.’’. 


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1 (2) CONFORMING AMENDMENT.—Section 5315 

2 of title 5, United States Code, is amended, in the 

3 item relating to the President of the Government 

4 National Mortgage Association, by striking ‘‘. De5 partment of Housing and Urban Development’’. 

6 (d) MEMBERSHIP ON FSOC.—The Dodd-Frank Wall 

7 Street Reform and Consumer Protection Act is amend8 ed— 

9 (1) in section 2, by amending paragraph 

10 (12)(E) to read as follows: 

11 ‘‘(E) the Government National Mortgage 

12 Association, with respect to— 

13 ‘‘(i) the Mortgage Insurance Fund es14 tablished under section 202(g) of the Part15 nership to Strengthen Homeownership Act 

16 of 2014; and 

17 ‘‘(ii) the Federal Home Loan Banks 

18 or the Federal Home Loan Bank Sys19 tem.’’; and 

20 (2) in section 111(b)(1)(H), by striking ‘‘Direc21 tor of the Federal Housing Finance Agency’’ and in22 serting ‘‘Director of the Government National Mort23 gage Association’’. 

24 (e) PERSONNEL.—Subsection (d) of section 309 of 

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1 ed by striking ‘‘(d)(1)’’ and all that follows through the 

2 end of paragraph (1) and inserting the following: 

3 ‘‘(d) PERSONNEL.— 

4 ‘‘(1) GINNIE MAE.— 

5 ‘‘(A) IN GENERAL.—The Director of the 

6 Association may appoint and fix the compensa7 tion of such officers and employees of the Asso8 ciation as the Director considers necessary to 

9 carry out the functions of the Association. Offi10 cers and employees may be paid without regard 

11 to the provisions of chapter 51 and subchapter 

12 III of chapter 53 of title 5, United States Code, 

13 relating to classification and General Schedule 

14 pay rates. 

15 ‘‘(B) DEVELOPMENT OF HUMAN RE16 SOURCES.—In carrying out this subsection, 

17 Ginnie Mae shall appoint and develop human 

18 capital (which shall have such meaning as de19 termined by Ginnie Mae, in consultation with 

20 the Board of Governors of the Federal Reserve, 

21 taking into consideration differences between 

22 the banking and insurance industries) necessary 

23 to ensure that it possesses sufficient expertise 

24 regarding the insurance industry and insurance 

25 issues. 


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1 ‘‘(C) COMPARABILITY OF COMPENSATION

2 WITH FEDERAL BANKING AGENCIES.—In fixing 

3 and directing compensation under subpara4 graph (A), the Director of the Association shall 

5 consult with, and maintain comparability with, 

6 compensation of officers and employees of the 

7 Office of the Comptroller of the Currency, the 

8 Board of Governors of the Federal Reserve Sys9 tem, and the Federal Deposit Insurance Cor10 poration. 

11 ‘‘(D) PERSONNEL OF OTHER FEDERAL

12 AGENCIES.—In carrying out the duties of the 

13 Association, the Director of the Association 

14 may use information, services, staff, and facili15 ties of any executive agency, independent agen16 cy, or department on a reimbursable basis, with 

17 the consent of such agency or department. 

18 ‘‘(E) OUTSIDE EXPERTS AND CONSULT19 ANTS.—Notwithstanding any provision of law 

20 limiting pay or compensation, the Director of 

21 the Association may appoint and compensate 

22 such outside experts and consultants as such 

23 Director determines necessary to assist the 

24 work of the Association.’’. 


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1 (f) TRANSITIONAL PROVISION.—Notwithstanding 

2 this section and the amendments made by this section, 

3 during the period beginning on the date of the enactment 

4 of this Act, and ending on the date on which the Director 

5 of the Government National Mortgage Association is ap6 pointed and confirmed pursuant to section 308 of the Na7 tional Housing Act, as amended by this section, the person 

8 serving as the President of the Government National 

9 Mortgage Association on that effective date shall act for 

10 all purposes as, and with the full powers of, the Director 

11 of the Association. 

12 (g) REFERENCES.—On and after the date of the en13 actment of this Act, any reference in Federal law to the 

14 President of the Government National Mortgage Associa15 tion or to such Association shall be deemed to be a ref16 erence to such Director of such Association or to such As17 sociation, as appropriate, as organized pursuant to this 

18 subsection and the amendments made by this section. 

19 SEC. 102. TRANSFER TO GINNIE MAE OF POWERS, PER20 SONNEL, AND PROPERTY OF FHFA. 

21 (a) POWERS AND DUTIES TRANSFERRED.— 

22 (1) FEDERAL HOME LOAN BANK FUNCTIONS

23 TRANSFERRED.— 

24 (A) TRANSFER OF FUNCTIONS.—There are 

25 transferred to Ginnie Mae and the Director of 


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1 Ginnie Mae all functions of the Federal Hous2 ing Finance Agency and the Director of the 

3 Federal Housing Finance Agency, respectively. 

4 (B) POWERS, AUTHORITIES, RIGHTS, AND

5 DUTIES.—Ginnie Mae and the Director of 

6 Ginnie Mae shall succeed to all powers, authori7 ties, rights, and duties that were vested in the 

8 Federal Housing Finance Agency and the Di9 rector of the Federal Housing Finance Agency, 

10 respectively, including all conservatorship or re11 ceivership authorities, on the day before the 

12 transfer date in connection with the functions 

13 and authorities transferred under subparagraph 

14 (A). 

15 (C) TRANSFER DATE.—The transfer of 

16 functions under this paragraph shall take effect 

17 upon the expiration of the 6-month period be18 ginning on the date of the enactment of this 

19 Act. 

20 (2) CONTINUATION AND COORDINATION OF

21 CERTAIN ACTIONS.— 

22 (A) IN GENERAL.—All regulations, orders, 

23 determinations, and resolutions described under 

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1 terminations, and resolutions, and shall be en2 forceable by or against Ginnie Mae until modi3 fied, terminated, set aside, or superseded in ac4 cordance with applicable law by Ginnie Mae, 

5 any court of competent jurisdiction, or oper6 ation of law. 

7 (B) APPLICABILITY.—A regulation, order, 

8 determination, or resolution is described under 

9 this subparagraph if it— 

10 (i) was issued, made, prescribed, or 

11 allowed to become effective by— 

12 (I) the Federal Housing Finance 

13 Agency; or 

14 (II) a court of competent juris15 diction, and relates to functions trans16 ferred by this subsection; 

17 (ii) relates to the performance of func18 tions that are transferred by this sub19 section; and 

20 (iii) is in effect on the transfer date 

21 under paragraph (1)(C). 

22 (3) DISPOSITION OF AFFAIRS.—During the pe23 riod preceding the transfer date under paragraph 

24 (1)(C), the Director of the Federal Housing Finance 

25 Agency, for the purpose of winding up the affairs of 


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1 the Federal Housing Finance Agency in connection 

2 with the performance of functions that are trans3 ferred by this section— 

4 (A) shall manage the employees of such 

5 Agency and provide for the payment of the 

6 compensation and benefits of any such employ7 ees which accrue before such transfer date; and 

8 (B) may take any other action necessary 

9 for the purpose of winding up the affairs of the 

10 Office. 

11 (4) USE OF PROPERTY AND SERVICES.— 

12 (A) PROPERTY.—Ginnie Mae may use the 

13 property and services of the Federal Housing 

14 Finance Agency to perform functions which 

15 have been transferred to Ginnie Mae until such 

16 time as the Agency is abolished under sub17 section (c) to facilitate the orderly transfer of 

18 functions transferred under this subsection, any 

19 other provision of this Act, or any amendment 

20 made by this Act to any other provision of law. 

21 (B) AGENCY SERVICES.—Any agency, de22 partment, or other instrumentality of the 

23 United States, and any successor to any such 

24 agency, department, or instrumentality, that 

25 was providing supporting services to the Agency 


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1 before the transfer date in connection with 

2 functions that are transferred to Ginnie Mae 

3 shall— 

4 (i) continue to provide such services, 

5 on a reimbursable basis, until the transfer 

6 of such functions is complete; and 

7 (ii) consult with any such agency to 

8 coordinate and facilitate a prompt and rea9 sonable transition. 

10 (5) CONTINUATION OF SERVICES.—Ginnie Mae 

11 may use the services of employees and other per12 sonnel of the Federal Housing Finance Agency, on 

13 a reimbursable basis, to perform functions which 

14 have been transferred to Ginnie Mae for such time 

15 as is reasonable to facilitate the orderly transfer of 

16 functions pursuant to this subsection, any other pro17 vision of this Act, or any amendment made by this 

18 Act to any other provision of law. 

19 (6) SAVINGS PROVISIONS.— 

20 (A) EXISTING RIGHTS, DUTIES, AND OBLI21 GATIONS NOT AFFECTED.—Paragraph (1) and 

22 subsection (c) shall not affect the validity of 

23 any right, duty, or obligation of the United 

24 States, the Director of the Federal Housing Fi25 nance Agency, the Federal Housing Finance 


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1 Agency, or any other person, that existed on 

2 the day before the transfer date under para3 graph (1)(C). 

4 (B) CONTINUATION OF SUITS.—No action 

5 or other proceeding commenced by or against 

6 the Director of the Federal Housing Finance 

7 Agency in connection with the functions that 

8 are transferred to Ginnie Mae under this sub9 section shall abate by reason of the enactment 

10 of this Act, except that Ginnie Mae shall be 

11 substituted for the Director of the Federal 

12 Housing Finance Agency as a party to any such 

13 action or proceeding. 

14 (b) TRANSFER AND RIGHTS OF EMPLOYEES OF

15 FHFA.— 

16 (1) TRANSFER.—Each employee of the Federal 

17 Housing Finance Agency that is employed in connec18 tion with functions that are transferred to Ginnie 

19 Mae under subsection (a) shall be transferred to 

20 Ginnie Mae for employment, not later than the 

21 transfer date under subsection (a)(1)(C), and such 

22 transfer shall be deemed a transfer of function for 

23 purposes of section 3503 of title 5, United States 

24 Code. 


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1 (2) STATUS OF EMPLOYEES.—The transfer of 

2 functions under this section, and the abolishment of 

3 the Federal Housing Finance Agency under sub4 section (c), may not be construed to affect the status 

5 of any transferred employee as an employee of an 

6 agency of the United States for purposes of any 

7 other provision of law. 

8 (3) GUARANTEED POSITIONS.—Each employee 

9 transferred under paragraph (1) shall be guaranteed 

10 a position with the same status, tenure, grade, and 

11 pay as that held on the day immediately preceding 

12 the transfer. 

13 (4) APPOINTMENT AUTHORITY FOR EXCEPTED

14 EMPLOYEES.— 

15 (A) IN GENERAL.—In the case of an em16 ployee occupying a position in the excepted 

17 service, any appointment authority established 

18 under law or by regulations of the Office of 

19 Personnel Management for filling such position 

20 shall be transferred, subject to subparagraph 

21 (B). 

22 (B) DECLINE OF TRANSFER.—Ginnie Mae 

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1 petitive service because of its confidential, pol2 icymaking, policy-determining, or policy-advo3 cating character. 

4 (5) REORGANIZATION.—If Ginnie Mae deter5 mines, after the end of the 1-year period beginning 

6 on the transfer date under subsection (a)(1)(C), that 

7 a reorganization of the combined workforce is re8 quired, that reorganization shall be deemed a major 

9 reorganization for purposes of affording affected em10 ployee retirement under section 8336(d)(2) or 

11 8414(b)(1)(B) of title 5, United States Code. 

12 (6) EMPLOYEE BENEFIT PROGRAMS.— 

13 (A) IN GENERAL.—Any employee of the 

14 Federal Housing Finance Agency accepting em15 ployment with Ginnie Mae as a result of a 

16 transfer under paragraph (1) may retain, for 

17 12 months after the date on which such trans18 fer occurs, membership in any employee benefit 

19 program of the Agency or Ginnie Mae, as appli20 cable, including insurance, to which such em21 ployee belongs on the transfer date under sub22 section (a)(1)(C) if— 

23 (i) the employee does not elect to give 

24 up the benefit or membership in the pro25 gram; and 


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1 (ii) the benefit or program is contin2 ued by Ginnie Mae. 

3 (B) COST DIFFERENTIAL.— 

4 (i) IN GENERAL.—The difference in 

5 the costs between the benefits which would 

6 have been provided by the Federal Housing 

7 Finance Agency and those provided by this 

8 subsection shall be paid by Ginnie Mae. 

9 (ii) HEALTH INSURANCE.—If any em10 ployee elects to give up membership in a 

11 health insurance program or the health in12 surance program is not continued by 

13 Ginnie Mae, the employee shall be per14 mitted to select an alternate Federal 

15 health insurance program not later than 

16 30 days after the date of such election or 

17 notice, without regard to any other regu18 larly scheduled open season. 

19 (c) ABOLISHMENT OF FHFA.—Effective upon the 

20 transfer date under subsection (a)(1)(C), the Federal 

21 Housing Finance Agency and the position of the Director 

22 of the Federal Housing Finance Agency are abolished. 

23 (d) TRANSFER OF PROPERTY AND FACILITIES.—Ef24 fective upon the transfer date under subsection (a)(1)(C), 


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1 all property of the Federal Housing Finance Agency shall 

2 transfer to Ginnie Mae. 

3 (e) REFERENCES IN FEDERAL LAW.—On and after 

4 the transfer date under subsection (a)(1)(C), any ref5 erence in Federal law to the Director of the Federal Hous6 ing Finance Agency or the Federal Housing Finance 

7 Agency, in connection with any function of the Director 

8 of the Federal Housing Finance Agency or the Federal 

9 Housing Finance Agency transferred under subsection (a), 

10 shall be deemed a reference to the Director of the Govern11 ment National Mortgage Association or the Government 

12 National Mortgage Association, as appropriate and con13 sistent with the amendments made by this Act. 

14 SEC. 103. REGULATION OF MARKET PARTICIPANTS AND 

15 AGGREGATORS. 

16 (a) APPROVAL AUTHORITY.—The Platform shall be 

17 available for use only by originators and aggregators of 

18 mortgages who meet standards for eligibility for such use, 

19 as shall be established by the Director of Ginnie Mae (in 

20 this section referred to as the ‘‘Director’’). 

21 (b) GENERAL SUPERVISORY AND REGULATORY AU22 THORITY.—Pursuant to the authority under subsection 

23 (a): 

24 (1) IN GENERAL.—All market participants and 

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1 vided in this section, be subject to the supervision 

2 and regulation of the Director. 

3 (2) AUTHORITY OVER MARKET PARTICIPANTS

4 AND PARTICIPATING AGGREGATORS.—Ginnie Mae 

5 shall have general regulatory authority over each 

6 market participant and participating aggregator and 

7 shall exercise such general regulatory authority to 

8 ensure that the purposes of this section are carried 

9 out. 

10 (c) PRINCIPAL DUTIES.—Among the principal duties 

11 of the Director pursuant to subsection (b) shall be— 

12 (1) to oversee the prudential operations of each 

13 market participant and participating aggregator; 

14 and 

15 (2) to ensure that— 

16 (A) each market participant and partici17 pating aggregator operates in a safe and sound 

18 manner, including maintenance of adequate 

19 capital and internal controls; and 

20 (B) each market participant and partici21 pating aggregator complies with this section 

22 and the rules, regulations, guidelines, and or23 ders issued under this section. 

24 (d) PRUDENTIAL MANAGEMENT AND OPERATIONS

25 STANDARDS.— 


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1 (1) ESTABLISHMENT.—The Director shall es2 tablish prudential standards, by regulation or guide3 line, for market participants and participating 

4 aggregators to— 

5 (A) ensure— 

6 (i) the safety and soundness of mar7 ket participants and participating 

8 aggregators; and 

9 (ii) the maintenance of approval 

10 standards by market participants and par11 ticipating aggregators; and 

12 (B) minimize the risk presented to the 

13 Fund. 

14 (2) RECOGNITION OF DISTINCTIONS.—In car15 rying out the requirement under paragraph (1), the 

16 Director shall distinguish between prudential stand17 ards for market participants and such standards for 

18 participating aggregators. 

19 (e) AUTHORITY TO REQUIRE REPORTS.— 

20 (1) REGULAR REPORTS.—The Director may re21 quire, by general or specific orders, a market partici22 pant or participating aggregator to submit regular 

23 reports, including financial statements determined 

24 on a fair value basis, on the condition (including fi25 nancial condition), management, activities, or operVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ations of the market participant or participating 

2 aggregator, as the Director considers appropriate. 

3 (2) SPECIAL REPORTS.—The Director may re4 quire, by general or specific orders, a market partici5 pant or participating aggregator to submit special 

6 reports on any of the topics specified in paragraph 

7 (1) or any other relevant topics, if, in the judgment 

8 of the Director, such reports are necessary to carry 

9 out the purposes of this Act. 

10 (f) EXAMINATIONS AND AUDITS.—The Director may 

11 conduct such examinations and audits, including on-site 

12 examinations and audits, of market participants and par13 ticipating aggregators as the Director considers appro14 priate to ensure compliance with this Act, to determine 

15 the condition of market participants and participating 

16 aggregators for the purpose of determining and ensuring 

17 their financial safety and soundness, and otherwise in any 

18 case that the Director determines an examination is nec19 essary or appropriate. 

20 (g) CONFLICT OF INTEREST STANDARDS.—The Di21 rector shall establish standards, by regulation or guideline, 

22 for market participants and participating aggregators as 

23 the Director considers appropriate to avoid any conflicts 

24 of interest among market participants. 


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1 (h) STRESS TESTS FOR SUFFICIENT CAPITAL.—The 

2 Director, in consultation with the Board of Governors of 

3 the Federal Reserve, shall— 

4 (1) establish and carry out such risk-based cap5 ital tests as appropriate to evaluate whether each 

6 market participant and participating aggregator is 

7 maintaining a level of capital sufficient to absorb 

8 losses and support operations during adverse eco9 nomic conditions so that they do not pose undue 

10 risks to their communities, other institutions, or the 

11 broader economy; and 

12 (2) establish capital standards for market par13 ticipants and participating aggregators based on 

14 such tests, which shall include the following classi15 fications: well capitalized, adequately capitalized, 

16 undercapitalized, significantly undercapitalized, and 

17 critically undercapitalized. 

18 (i) ENFORCEMENT.—The Corporation shall have the 

19 authority to enforce the provisions of this Act with respect 

20 to market participants and participating aggregators, in 

21 the same manner and to the same extent as the Federal 

22 Deposit Insurance Corporation has with respect to insured 

23 depository institutions under the provisions of subsections 

24 (b) through (n) of section 8 of the Federal Deposit Insur25 ance Act (12 U.S.C. 1818). 


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1 (j) REQUIREMENT TO MAINTAIN APPROVED STA2 TUS.— 

3 (1) AUTHORITY TO ISSUE ORDER.—If the Di4 rector determines that a market participant or a 

5 participating aggregator under this section no longer 

6 meets the standards for such approval or violates the 

7 requirements under this Act, including any stand8 ards, regulations, or orders promulgated in accord9 ance with this Act, the Director may— 

10 (A) suspend or revoke the status of the 

11 market participant or participating aggregator 

12 as approved to utilize the Platform; or 

13 (B) take any other action with respect to 

14 such market participant or a participating 

15 aggregator as may be authorized under this 

16 Act. 

17 (2) RULE OF CONSTRUCTION.—The suspension 

18 or revocation of the approved status of a market 

19 participant or a participating aggregator under this 

20 section shall have no effect on the status as an in21 sured security of any security collateralized by eligi22 ble mortgages and insured prior to the suspension or 

23 revocation. 

24 (3) PUBLICATION.—The Director shall— 


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1 (A) promptly publish a notice in the Fed2 eral Register upon suspension or revocation of 

3 the approval of any market participant or a 

4 participating aggregator; and 

5 (B) maintain an updated list of such ap6 proved market participants and participating 

7 aggregators on the website of Ginnie Mae. 

8 (4) DEFINITION.—In this subsection, the term 

9 ‘‘violate’’ includes any action, taken alone or with 

10 others, for or toward causing, bringing about, par11 ticipating in, counseling, or aiding or abetting, a vio12 lation of the requirements under this Act. 

13 (k) RESOLUTION AUTHORITY.— 

14 (1) IN GENERAL.—Notwithstanding any other 

15 provision of Federal law, the law of any State, or the 

16 constitution of any State, the Director shall— 

17 (A) have the authority to act, in the same 

18 manner and to the same extent, with respect to 

19 a market participant or participating 

20 aggregator that the Director determines pursu21 ant to is classified as critically undercapitalized 

22 pursuant to subsection (h)(2), as the Federal 

23 Deposit Insurance Corporation has with respect 

24 to insured depository institutions under sub25 sections (c) through (s) of section 11 of the 


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1 Federal Deposit Insurance Act (12 U.S.C. 

2 1821), section 12 of the Federal Deposit Insur3 ance Act (12 U.S.C. 1822), and section 13 of 

4 the Federal Deposit Insurance Act (12 U.S.C. 

5 1823), while tailoring such actions to the spe6 cific business model of the market participant 

7 or participating aggregator, as the case may be, 

8 as may be necessary to properly exercise such 

9 authority under this subsection; 

10 (B) in carrying out any authority provided 

11 under subparagraph (A), act, in the same man12 ner and to the same extent, with respect to the 

13 Fund as the Federal Deposit Insurance Cor14 poration may act with respect to the Deposit 

15 Insurance Fund under the provisions of the 

16 Federal Deposit Insurance Act set forth in sub17 paragraph (A); and 

18 (C) consistent with the authorities pro19 vided in subparagraph (A), immediately place 

20 an insolvent market participant or participating 

21 aggregator into receivership. 

22 (2) RULE OF CONSTRUCTION.—Notwith23 standing paragraph (1), if an insolvent participating 

24 aggregator is an insured depository institution or an 

25 affiliate of an insured depository institution, the DiVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 rector shall recommend, in writing, to such partici2 pating aggregator’s appropriate Federal banking 

3 agency or State banking regulator to resolve such 

4 participating aggregator pursuant to section 11(c) of 

5 the Federal Deposit Insurance Act (12 U.S.C. 

6 1821(c)) and other appropriate sections of the Fed7 eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) 

8 or appropriate Federal or State law, as applicable. 

9 (3) LEAST-COST RESOLUTION REQUIRED.—The 

10 Director may not exercise any authority under para11 graph (1) with respect to any market participant or 

12 any participating aggregator that is not an insured 

13 depository institution or an affiliate of an insured 

14 depository institution, unless— 

15 (A) the Director determines that the exer16 cise of such authority is necessary to ensure 

17 proper and continued functioning of the sec18 ondary mortgage market; and 

19 (B) the total amount of the expenditures 

20 by the Director and obligations incurred by the 

21 Director in connection with the exercise of any 

22 such authority with respect to such market par23 ticipant or participating aggregator is the least 

24 costly to the Fund, consistent with the least 

25 cost approach specified in the Federal Deposit 


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1 Insurance Act (12 U.S.C. 1811 et seq.), of all 

2 possible methods for meeting Ginnie Mae’s obli3 gations under this Act and expeditiously con4 cluding its resolution activities. 

5 (4) TAXPAYER PROTECTION.—The Director, in 

6 carrying out any authority provided in this sub7 section, shall ensure that any amounts owed to the 

8 United States, unless the United States agrees or 

9 consents otherwise, shall have priority following ad10 ministrative expenses of the receiver when satisfying 

11 unsecured claims against a market participant or 

12 participating aggregator, or the receiver therefor, 

13 that are proven to the satisfaction of the receiver. 

14 SEC. 104. REGULATORY CONSULTATION AND COORDINA15 TION. 

16 (a) CONSULTATION PERMITTED.—The Director may, 

17 in carrying out any duty, responsibility, requirement, or 

18 action authorized under this Act, consult with the Federal 

19 regulatory agencies, any individual Federal regulatory 

20 agency, the Secretary of the Treasury, any State banking 

21 regulator, any State insurance regulator, and any other 

22 State agency, as the Director necessary and appropriate. 

23 (b) COORDINATION REQUIRED.—The Director shall, 

24 as appropriate, in carrying out any duty, responsibility, 

25 requirement, or action authorized under this Act, coordiVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 nate with the Federal regulatory agencies, any individual 

2 Federal regulatory agency, the Secretary of the Treasury, 

3 any State banking regulator, any State insurance regu4 lator, any other State agency. 

5 (c) AVOIDANCE OF DUPLICATION.—To the fullest ex6 tent possible, the Director shall— 

7 (1) avoid duplication of examination activities, 

8 reporting requirements, and requests for informa9 tion; 

10 (2) rely on examination reports made by other 

11 Federal or State regulatory agencies relating to an 

12 approved entity and its subsidiaries, if any; and 

13 (3) ensure that market participants and partici14 pating aggregators are not subject to conflicting su15 pervisory demands by Ginnie Mae and other Federal 

16 regulatory agencies. 

17 (d) PROTECTION OF PRIVILEGES.— 

18 (1) IN GENERAL.—Pursuant to the authorities 

19 provided under subsections (a) and (b), to facilitate 

20 the consultative process and coordination, the Direc21 tor may share information with the Federal regu22 latory agencies, any individual Federal regulatory 

23 agency, the Secretary of the Treasury, any State 

24 bank supervisor, any State insurance regulator, any 

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1 ity, on a one-time, regular, or periodic basis, as de2 termined by the Director, regarding the capital as3 sets and liabilities, financial condition, risk manage4 ment practices, or any other practice of any market 

5 participant or participating aggregator. 

6 (2) PRIVILEGE PRESERVED.—Information 

7 shared by the Director pursuant to paragraph (1) 

8 shall not be construed as waiving, destroying, or oth9 erwise affecting any privilege or confidential status 

10 that any market participant, participating 

11 aggregator, or any other person may claim with re12 spect to such information under Federal or State 

13 law as to any person or entity other than such agen14 cies, agency, supervisor, or authority. 

15 (3) RULE OF CONSTRUCTION.—No provision of 

16 this subsection may be construed as implying or es17 tablishing that— 

18 (A) any person waives any privilege appli19 cable to information that is shared or trans20 ferred under any circumstance to which this 

21 subsection does not apply; or 

22 (B) any person would waive any privilege 

23 applicable to any information by submitting the 

24 information directly to the Federal regulatory 

25 agencies, any individual Federal regulatory 


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1 agency, any State bank supervisor, any State 

2 insurance regulator, any other State agency, or 

3 any foreign banking authority, but for this sub4 section. 

5 (e) FEDERAL AGENCY AUTHORITY PRESERVED.— 

6 Unless otherwise expressly provided by this section, no 

7 provision of this section shall limit or be construed to 

8 limit, in any way, the existing authority of any Federal 

9 agency. 

10 (f) FEDERAL REGULATORY AGENCY.—For purposes 

11 of this section, the term ‘‘Federal regulatory agency’’ 

12 means, individually, the Board of Governors of the Federal 

13 Reserve System, the Office of the Comptroller of the Cur14 rency, the Federal Deposit Insurance Corporation, the Bu15 reau of Consumer Financial Protection, the National 

16 Credit Union Administration, the Securities and Exchange 

17 Commission, the Commodity Futures Trading Commis18 sion, and the Federal Housing Finance Agency. 

19 TITLE II—SECURITIZATION AND 

20 INSURANCE 

21 SEC. 201. ISSUING PLATFORM. 

22 (a) ESTABLISHMENT.— 

23 (1) IN GENERAL.—There is established within 

24 Ginnie Mae an entity to be known as the Issuing 

25 Platform (the ‘‘Platform’’), which shall issue standVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ardized mortgage-backed securities to increase ho2 mogeneity in the eligible securities market. 

3 (2) AUTHORITIES.—The Platform may— 

4 (A) make contracts, incur liabilities, and 

5 borrow money; 

6 (B) purchase, sell, receive, hold, and use 

7 real and personal property; 

8 (C) create, execute, and administer trusts; 

9 and 

10 (D) take such actions as the Platform de11 termines are necessary or incidental to carry 

12 out the Platform’s duties under this Act. 

13 (b) DELIVERY OF POOL TO THE PLATFORM.—A 

14 mortgage originator or aggregator that wishes to make use 

15 of the Platform and have Ginnie Mae insure the securities 

16 issued by the Platform shall deliver to the Platform a pool 

17 of eligible mortgage loans. 

18 (c) SECURITIZATION.—The Platform shall, upon re19 ceiving a pool of eligible mortgages— 

20 (1) create standardized mortgage-backed securi21 ties collateralized by such mortgages; and 

22 (2) transfer the standardized mortgage-backed 

23 securities to the mortgage originator or aggregator 

24 from which the Platform received the pool of eligible 


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1 mortgages that are collateralizing the securities or 

2 the designee of such originator or aggregator. 

3 (d) STANDARDIZED CRITERIA FOR SECURITIES.—In 

4 issuing securities under this section, the Platform shall es5 tablish standardized criteria for such securities, includ6 ing— 

7 (1) uniform loan delivery, servicing, and pooling 

8 requirements; 

9 (2) remittance requirements; 

10 (3) underwriting guidelines and refinance pro11 grams; 

12 (4) the credit quality of the guarantee provided 

13 to each security; 

14 (5) servicing standards and loan repurchase 

15 policies; 

16 (6) disclosure policies; 

17 (7) security terms and features; and 

18 (8) standards for the appropriate minimum 

19 level of diversification for the mortgage loans that 

20 collateralize such securities, in order to reduce the 

21 credit risk such securities could pose to the Fund. 

22 (e) SECURITIZATION FEE.—The Platform shall 

23 charge a fee for securitization services provided under this 

24 section. Such fee shall be set by the Director and shall 


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1 be in an amount sufficient to offset the costs to the Plat2 form of carrying out this section. 

3 (f) LOAN LIMITS; HOUSING PRICE INDEX.— 

4 (1) ESTABLISHMENT.—Ginnie Mae shall estab5 lish limitations governing the maximum original 

6 principal obligation of eligible mortgage loans that 

7 may collateralize a security issued under this Act. 

8 (2) CALCULATION OF AMOUNT.—The limitation 

9 set forth under paragraph (1) shall be calculated 

10 with respect to the total original principal obligation 

11 of the eligible mortgage loan and not merely with re12 spect to the amount insured by Ginnie Mae. 

13 (3) MAXIMUM LIMITS.— 

14 (A) IN GENERAL.—Except as provided in 

15 subparagraph (B), the maximum limitation 

16 amount under this paragraph shall not exceed 

17 $417,000 for a mortgage loan secured by a 1- 

18 family residence, for a mortgage loan secured 

19 by a 2-family residence the limit shall equal 128 

20 percent of the limit for a mortgage loan secured 

21 by a 1-family residence, for a mortgage loan se22 cured by a 3-family residence the limit shall 

23 equal 155 percent of the limit for a mortgage 

24 loan secured by a 1-family residence, and for a 

25 mortgage loan secured by a 4-family residence 


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1 the limit shall equal 192 percent of the limit for 

2 a mortgage loan secured by a 1-family resi3 dence, except that such maximum limitations 

4 shall be adjusted effective January 1 of each 

5 year beginning after the effective date of this 

6 Act, subject to the limitations in this sub7 section. Each adjustment shall be made by add8 ing to each such amount (as it may have been 

9 previously adjusted) a percentage thereof equal 

10 to the percentage increase, during the most re11 cent 12-month or 4-quarter period ending be12 fore the time of determining such annual ad13 justment, in the housing price index maintained 

14 by Ginnie Mae pursuant to paragraph (4). If 

15 the change in such house price index during the 

16 most recent 12-month or 4-quarter period end17 ing before the time of determining such annual 

18 adjustment is a decrease, then no adjustment 

19 shall be made for the next year, and the next 

20 upward adjustment shall take into account 

21 prior declines in the house price index, so that 

22 any adjustment shall reflect the net change in 

23 the house price index since the last adjustment. 

24 Declines in the house price index shall be accuVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 mulated and then reduce increases until subse2 quent increases exceed prior declines. 

3 (B) HIGH-COST AREA LIMITS.—The limita4 tions set forth in subparagraph (A) may be in5 creased by not more than 50 percent with re6 spect to properties located in Alaska, Guam, 

7 Hawaii, and the Virgin Islands. Such foregoing 

8 limitations shall also be increased, with respect 

9 to properties of a particular size located in any 

10 area for which 115 percent of the median house 

11 price for such size residence exceeds the limita12 tion for such size residence set forth under sub13 paragraph (A), to the lesser of 150 percent of 

14 such limitation for such size residence or the 

15 amount that is equal to 115 percent of the me16 dian house price in such area for such size resi17 dence. 

18 (4) HOUSING PRICE INDEX.— 

19 (A) NATIONAL INDEX.—Ginnie Mae shall 

20 establish and maintain a method of assessing a 

21 national average single-family house price for 

22 use in calculating the loan limits for single-fam23 ily mortgage loans under paragraph (3), and 

24 other averages as Ginnie Mae considers appro25 priate, including— 


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1 (i) averages based on different geo2 graphic regions; and 

3 (ii) an average for houses whose mort4 gage collateralized single-family covered se5 curities. 

6 (B) CONSIDERATIONS.—In establishing the 

7 method described under subparagraph (A), 

8 Ginnie Mae may take into consideration such 

9 data, including existing house price indexes, 

10 and other measures as Ginnie Mae considers 

11 appropriate. 

12 (g) AUTHORITY FOR LOAN-LEVEL ENHANCE13 MENT.—With respect to an eligible mortgage loan that is 

14 or will be contained in a pool of mortgages delivered to 

15 the Platform, the mortgage originator of such mortgage 

16 loan may enter into agreements with market participants 

17 to provide loan-level enhancement of such mortgage loan. 

18 (h) CERTIFICATION.—Ginnie Mae shall, upon a de19 termination that the Platform is able to efficiently carry 

20 out the issuance of standardized mortgage-backed securi21 ties and that there exists a sufficient number of market 

22 participants to serve as insurers and reinsurers under sec23 tion 202, certify to the Congress that such determination 

24 has been made. 

25 (i) DUTY TO SERVE ALL MARKETS.— 


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1 (1) IN GENERAL.—In carrying out its respon2 sibilities under this title, Ginnie Mae shall facilitate 

3 the broad availability of mortgage credit and sec4 ondary mortgage market financing through fluctua5 tions in the business cycle for single-family and mul6 tifamily lending across all— 

7 (A) regions; 

8 (B) localities; 

9 (C) institutions; 

10 (D) property types, including housing serv11 ing renters; and 

12 (E) borrowers. 

13 (2) REPORT TO CONGRESS.—Ginnie Mae shall 

14 issue a semiannual report to the Congress on— 

15 (A) how Ginnie Mae is carrying out the 

16 duties required under paragraph (1); and 

17 (B) the extent to which the provisions of 

18 this title and the programs carried out pursu19 ant to this title are benefitting underserved 

20 communities. 

21 (j) EXEMPTION FROM SEC LAWS AND REGULA22 TIONS.—Standardized mortgage-backed securities issued 

23 by the Platform shall be exempt from the Federal securi24 ties laws (as defined under section 3(a) of the Securities 


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1 Exchange Act of 1934) and all regulations issued pursu2 ant to such laws. 

3 SEC. 202. INSURANCE. 

4 (a) IN GENERAL.—Ginnie Mae shall insure 100 per5 cent of each security issued by the Platform, as provided 

6 in this section. 

7 (b) PRIVATE REINSURANCE.—Ginnie Mae shall es8 tablish one of the two programs described under para9 graphs (1) and (2). In selecting which program to estab10 lish, Ginnie Mae shall determine which program is the 

11 most efficient way to operate the insurance requirements 

12 under this Act by incorporating private sector pricing. 

13 (1) REINSURANCE BID PROGRAM.—A Reinsur14 ance Bid Program, which shall include the following: 

15 (A) FORWARD CONTRACT FOR FIRST 5

16 PERCENT LOSS.—Prior to any particular quar17 ter (or such other time period determined by 

18 Ginnie Mae), Ginnie Mae shall enter into con19 tracts with market participants to reinsure the 

20 first 5 percent of loss on all securities issued by 

21 the Platform in such quarter (or other time pe22 riod). 

23 (B) FORWARD CONTRACT FOR LAST 95

24 PERCENT LOSS.—Prior to any particular quarVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ter (or such other time period determined by 

2 Ginnie Mae), Ginnie Mae shall sign— 

3 (i) contracts with market participants 

4 to reinsure the last 95 percent of loss on 

5 all securities issued by the Platform in 

6 such quarter (or other time period); and 

7 (ii) a retrocession contract with each 

8 such market participant under which 

9 Ginnie Mae will agree to offer retrocession10 al reinsurance to reinsure up to 90 percent 

11 of the 95 percent described under clause 

12 (i) on a pari passu basis. 

13 (2) GUARANTOR PROGRAM.—A Guarantor Pro14 gram, which shall include the following: 

15 (A) FIRST LOSS REQUIREMENT.—The 

16 mortgage originator or aggregator that wishes 

17 to deliver a pool of eligible mortgage loans to 

18 the Platform for securitization shall, prior to 

19 delivering such pool, contract directly with a 

20 market participant to insure the first 5 percent 

21 of loss on all securities issued by the Platform 

22 that are securitized by such pool of eligible 

23 mortgage loans. 


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1 (B) COVERAGE FOR LAST 95 PERCENT

2 LOSS.—For each security described under sub3 paragraph (A) Ginnie Mae shall sign— 

4 (i) contracts with market participants 

5 to reinsure the last 95 percent of loss on 

6 the security; and 

7 (ii) a retrocession contract with each 

8 such market participant under which 

9 Ginnie Mae will agree to offer retrocession10 al reinsurance to reinsure up to 90 percent 

11 of the 95 percent described under clause 

12 (i) on a pari passu basis. 

13 (C) ABILITY TO SELECT MARKET PARTICI14 PANTS.— 

15 (i) IN GENERAL.—If Ginnie Mae de16 termines that it would be an efficient way 

17 to operate the insurance requirements 

18 under this Act and would encourage the in19 corporation of private sector pricing, 

20 Ginnie Mae may allow mortgage origina21 tors and aggregators described under sub22 paragraph (A) to select the market partici23 pant described under subparagraph (B). 

24 (ii) HANDLING OF PRE-SELECTED

25 MARKET PARTICIPANTS.—If a market parVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ticipant is selected by a mortgage origi2 nator or aggregator, as described under 

3 clause (i)— 

4 (I) such market participants shall 

5 be required to meet the same stand6 ards as a market participant selected 

7 by Ginnie Mae; and 

8 (II) for purposes of determining 

9 the insurance fee described under sub10 section (d), Ginnie Mae shall contract 

11 with a private sector insurer to esti12 mate the risk that the market partici13 pant may default. 

14 (c) ADDITIONAL PROGRAM REQUIREMENTS.— 

15 (1) COMPETITIVE BIDDING PROCESS.—Ginnie 

16 Mae shall use a competitive bidding process to deter17 mine which market participants should be granted 

18 contracts under subsection (b)(1) and, except as pro19 vided under subsection (b)(2)(C), under subsection 

20 (b)(2)(B). 

21 (2) USE OF INSURANCE BROKER.—With respect 

22 to any market participant that Ginnie Mae selects 

23 under a risk sharing program, Ginnie Mae shall se24 lect an insurance broker, through a competitive bid25 ding process, that will solicit bids, on behalf of 


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1 Ginnie Mae, for the reinsurance contracts under 

2 such program. 

3 (3) CEDING COMMISSION.—As part of a ret4 rocession contract under subsection (b)(1)(B)(ii) or 

5 subsection (b)(2)(B)(ii), the market participants 

6 shall be paid a competitively determined ceding com7 mission for the underwriting and administrative 

8 costs of providing such reinsurance. 

9 (4) PHASE-IN.—Ginnie Mae may, if it deter10 mines it appropriate— 

11 (A) phase-in the 5 percent requirements 

12 under subsections (b)(1)(A) and (b)(2)(A), by 

13 originally requiring a lower percentage; and 

14 (B) phase-in the 90 percent requirement 

15 under subsections (b)(1)(B)(ii) and 

16 (b)(2)(B)(ii), by originally requiring a higher 

17 percentage. 

18 (d) INSURANCE FEE AND TERMS.— 

19 (1) PRE-PRICING OF INSURANCE FEE.—Ginnie 

20 Mae shall set the insurance fee applicable to securi21 ties issued by the Platform in advance on a quarter22 by-quarter basis, through forward contracts estab23 lished with market participants based on the volume 

24 and type of securities Ginnie Mae anticipates the 

25 Platform issuing during such quarter. 


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1 (2) COMPONENTS OF INSURANCE FEE.— 

2 (A) IN GENERAL.—The insurance fee shall 

3 reflect the anticipated cost to Ginnie Mae of 

4 providing insurance, including the cost of ob5 taining reinsurance under subsection (b). 

6 (B) ADJUSTMENT FOR PERFORMANCE.— 

7 Ginnie Mae may adjust the fee computed under 

8 subparagraph (A) to reflect the historic quality 

9 of deliveries and rating of mortgage loans made 

10 by the mortgage originators or aggregators that 

11 originated or aggregated the mortgage loans in12 cluded in the pool of eligible mortgage loans 

13 backing the security being insured, but in mak14 ing such adjustments, Ginnie Mae shall ensure 

15 that the weighted average of the entire book of 

16 business matches the ultimate price determina17 tion. 

18 (3) RATE ADJUSTMENT PERIOD.—The rate 

19 charged by a private market participant that con20 tracts with Ginnie Mae pursuant to subsection (b)— 

21 (A) may not change during the first 100- 

22 day period for which such reinsurance is effec23 tive; and 


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1 (B) shall be adjusted based on market con2 ditions, on a period to be determined by the Di3 rector. 

4 (e) STANDARDS FOR MARKET PARTICIPANTS.— 

5 (1) IN GENERAL.—Ginnie Mae shall issue such 

6 general standards for market participants described 

7 under subsection (b) as Ginnie Mae determines ap8 propriate. 

9 (2) CREDIT RATING REQUIREMENTS.— 

10 (A) IN GENERAL.—Notwithstanding any 

11 other provision of law, Ginnie Mae shall require 

12 a market participant described under subsection 

13 (b) to maintain at least an A¥ credit rating 

14 and shall consult with credit rating agencies 

15 and State insurance commissions, where appli16 cable, to verify such rating. 

17 (B) FLEXIBILITY FOR NEW COMPANIES.— 

18 Ginnie Mae may waive or modify the require19 ment under subparagraph (A) with respect to a 

20 new market participant. 

21 (3) CAPITAL STANDARDS FOR MARKET PARTICI22 PANTS.— 

23 (A) IN GENERAL.—For market partici24 pants described under subsection (b), Ginnie 

25 Mae shall establish, by regulation, capital 


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1 standards and related solvency standards nec2 essary to implement the provisions of this Act. 

3 (B) DEFINITIONS.— 

4 (i) IN GENERAL.—The regulations re5 quired under this paragraph shall define 

6 all such terms as are necessary to carry 

7 out the purposes of this paragraph. 

8 (ii) CONSIDERATIONS IN DEFINING

9 INSTRUMENTS AND CONTRACTS THAT

10 QUALIFY AS CAPITAL.—In defining instru11 ments and contracts that qualify as capital 

12 pursuant to subparagraph (A), Ginnie 

13 Mae— 

14 (I) shall include such instruments 

15 and contracts that will absorb losses 

16 before the Fund; and 

17 (II) may assign significance to 

18 those instruments and contracts based 

19 on the nature and risks of such in20 struments and contracts. 

21 (iii) CONSIDERATIONS IN DEFINING

22 CAPITAL RATIOS.—Solely for the purposes 

23 of calculating a capital ratio appropriate to 

24 the business model of a market participant 


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1 pursuant to subparagraph (A), Ginnie Mae 

2 shall consider for the denominator— 

3 (I) total assets; 

4 (II) total liabilities; 

5 (III) risk in force; or 

6 (IV) unpaid principal balance. 

7 (C) DESIGNED TO ENSURE SAFETY AND

8 SOUNDNESS.—The capital and related solvency 

9 standards established under this paragraph 

10 shall be designed to— 

11 (i) ensure the safety and soundness of 

12 a market participant; 

13 (ii) minimize the risk of loss to the 

14 Fund; 

15 (iii) in consultation and coordination 

16 with the Board of Governors of the Fed17 eral Reserve System, the Federal Deposit 

18 Insurance Corporation, and the Office of 

19 the Comptroller of the Currency, reduce 

20 the potential for regulatory arbitrage be21 tween capital standards for market partici22 pants and capital standards promulgated 

23 by Federal regulatory agencies for insured 

24 depository institutions and their affiliates; 

25 and 


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1 (iv) be specifically tailored to accom2 modate a diverse range of business models 

3 that may be employed by market partici4 pants. 

5 (D) SUPPLEMENTAL CAPITAL REQUIRE6 MENTS.— 

7 (i) IN GENERAL.—In order to prevent 

8 or mitigate risks to the secondary mort9 gage market of the United States that 

10 could arise from the material financial dis11 tress or failure, or ongoing activities, of 

12 large market participants that insure secu13 rities under this Act, Ginnie Mae, by regu14 lation— 

15 (I) shall establish supplemental 

16 capital requirements for such large 

17 market participants; and 

18 (II) may establish such other 

19 standards that Ginnie Mae determines 

20 necessary or appropriate. 

21 (ii) LARGE MARKET PARTICIPANT DE22 FINED.—For purposes of this subpara23 graph, Ginnie Mae shall define the term 

24 ‘‘large market participant’’. 


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1 (f) CONFLICT OF INTERESTS.—Ginnie Mae shall 

2 issue regulations to prevent conflicts of interest by market 

3 participants contracting with Ginnie Mae under this sec4 tion. 

5 (g) INSURANCE FUND.— 

6 (1) ESTABLISHMENT.—There is established an 

7 insurance fund (the ‘‘Fund’’), which Ginnie Mae 

8 shall— 

9 (A) maintain and administer; and 

10 (B) use to cover losses incurred under this 

11 section with respect to mortgage-backed securi12 ties. 

13 (2) FUND GOAL.— 

14 (A) IN GENERAL.—Ginnie Mae shall en15 deavor to ensure that the Fund attains a re16 serve balance— 

17 (i) of 1.25 percent of the sum of the 

18 outstanding principal balance of the securi19 ties for which insurance is being provided 

20 under this Act within 5 years of the date 

21 on which the Director determines that the 

22 Platform is fully functioning, and to strive 

23 to maintain such ratio thereafter, subject 

24 to clause (ii); and 


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1 (ii) of 2.50 percent of the sum of the 

2 outstanding principal balance of the securi3 ties for which insurance is being provided 

4 under this Act within 10 years of the date 

5 on which the Director determines that the 

6 Platform is fully functioning, and to strive 

7 to maintain such ratio at all times there8 after. 

9 (B) ADJUSTMENT OF FEES.—Notwith10 standing subsection (d), Ginnie Mae may raise 

11 or lower the fee charged for insurance under 

12 this section in order to maintain the reserve 

13 balance described under subparagraph (A). 

14 (3) DEPOSITS.—The Fund shall be credited 

15 with any fees received by Ginnie Mae in exchange 

16 for insurance made available under this section. 

17 (4) PROHIBITED INVESTMENTS.—Amounts in 

18 the Fund may not be invested in any— 

19 (A) standardized mortgage-backed security 

20 insured under this Act; or 

21 (B) mortgage-backed security issued by the 

22 enterprises. 

23 (5) FULL FAITH AND CREDIT.—The full faith 

24 and credit of the United States is pledged to the 

25 payment of all amounts which may be required to be 


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1 paid under any insurance provided under this sec2 tion. 

3 SEC. 203. AUTHORITY TO PROTECT TAXPAYERS IN UN4 USUAL AND EXIGENT MARKET CONDITIONS. 

5 (a) IN GENERAL.—If Ginnie Mae, upon the written 

6 agreement of the Chairman of the Board of Governors of 

7 the Federal Reserve System and the Secretary of the 

8 Treasury, and in consultation with the Secretary of Hous9 ing and Urban Development, determines that unusual and 

10 exigent circumstances have created or threaten to create 

11 an anomalous lack of mortgage credit availability within 

12 the single-family housing market, multifamily housing 

13 market, or entire United States housing market that could 

14 materially and severely disrupt the functioning of the 

15 housing finance system of the United States, Ginnie Mae 

16 may, for a period of 6 months— 

17 (1) modify or waive the reinsurance require18 ments under section 202(b); and 

19 (2) establish provisional standards for approved 

20 entities. 

21 (b) CONSIDERATIONS.—In exercising the authority 

22 granted under subsection (a), Ginnie Mae shall consider 

23 the severity of the conditions present in the housing mar24 kets and the risks presented to the Fund in exercising 

25 such authority. 


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1 (c) TERMS AND CONDITIONS.—Insurance provided 

2 under subsection (a) shall be subject to such additional 

3 or different limitations, restrictions, and regulations as 

4 Ginnie Mae may prescribe. 

5 (d) BAILOUT STRICTLY PROHIBITED.—In exercising 

6 the authority granted under subsection (a), Ginnie Mae 

7 may not— 

8 (1) provide aid to an approved entity or an af9 filiate of the approved entity, if such approved entity 

10 is in bankruptcy or any other Federal or State insol11 vency proceeding; or 

12 (2) provide aid for the purpose of assisting a 

13 single and specific company avoid bankruptcy or any 

14 other Federal or State insolvency proceeding. 

15 (e) NOTICE.—Not later than 7 days after authorizing 

16 insurance or establishing provisional standards under sub17 section (a), Ginnie Mae shall submit to the Committee on 

18 Banking, Housing, and Urban Affairs of the Senate and 

19 the Committee on Financial Services of the House of Rep20 resentatives a report that includes— 

21 (1) the justification for the exercise of authority 

22 to provide such insurance or establish such provi23 sional standards; 

24 (2) evidence that unusual and exigent cir25 cumstances have created or threatened to create an 


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1 anomalous lack of mortgage credit availability within 

2 the single-family housing market, multifamily hous3 ing market, or entire United States housing market 

4 that could materially and severely disrupt the func5 tioning of the housing finance system of the United 

6 States; and 

7 (3) evidence that failure to exercise such au8 thority would have undermined the safety and 

9 soundness of the housing finance system. 

10 (f) ADDITIONAL EXERCISE OF AUTHORITY.— 

11 (1) IN GENERAL.—Subject to the limitation 

12 under subsection (g), the authority granted to 

13 Ginnie Mae under subsection (a) may be exercised 

14 for 2 additional 9-month periods within any given 3- 

15 year period, provided that Ginnie Mae, upon the 

16 written agreement of the Chairman of the Board of 

17 Governors of the Federal Reserve System and the 

18 Secretary of the Treasury, and in consultation with 

19 the Secretary of Housing and Urban Development— 

20 (A) determines— 

21 (i) for a second exercise of authority 

22 under subsection (a), that a second exer23 cise of authority under subsection (a) is 

24 necessary; or 


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1 (ii) for a third exercise of authority 

2 under subsection (a), by an affirmative 

3 vote of the Director of Ginnie Mae and an 

affirmative vote of 2 4 ⁄3 or more of the 

5 Board of Governors of the Federal Reserve 

6 System then serving, that a third exercise 

7 of authority under this section is nec8 essary; and 

9 (B) provides notice to Congress, as pro10 vided under subsection (e). 

11 (2) ORDER OF EXERCISE OF AUTHORITY.—Any 

12 additional exercise of authority under this subsection 

13 may occur consecutively or non-consecutively. 

14 (g) LIMITATION.—The authority granted to Ginnie 

15 Mae under this section may not be exercised more than 

16 3 times in any given 3-year period, which 3-year period 

17 shall commence upon the initial exercise of authority 

18 under subsection (a). 

19 (h) NORMALIZATION AND REDUCTION OF RISK.— 

20 Following any exercise of authority under this section, 

21 Ginnie Mae shall— 

22 (1) establish a timeline for approved entities to 

23 meet the approval standards set forth in this Act; 

24 and 


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1 (2) in a manner and pursuant to a timeline 

2 that will minimize losses to the Fund, establish a 

3 program to either— 

4 (A) sell, in whole or in part, the first loss 

5 position on securities described in this section 

6 to private market holders; or 

7 (B) transfer for value to approved entities, 

8 or work with approved entities to sell, in whole 

9 or in part, the first lost position on securities 

10 described in this section. 

11 (i) AUTHORITY TO RESPOND TO SUSTAINED NA12 TIONAL HOME PRICE DECLINE.— 

13 (1) AUTHORITY.—In the event of a significant 

14 decline of national home prices, in at least 2 con15 secutive calendar quarters, Ginnie Mae may for a 

16 period of 6 months permit the transfer of guarantees 

17 of eligible mortgage loans that secure securities 

18 issued under this Act if such eligible mortgage loans 

19 are refinanced, regardless of the value of the under20 lying collateral securing such eligible mortgage 

21 loans. 

22 (2) ADDITIONAL EXERCISE OF AUTHORITY.— 

23 The authority granted to Ginnie Mae under para24 graph (1) may be exercised for additional 6-month 

25 periods. 


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1 (3) LIMITATION.—Ginnie Mae shall not provide 

2 insurance under this Act to any security issued 

3 under this Act that includes mortgage loans that do 

4 not meet the definition of an eligible mortgage loan, 

5 except for mortgage loans refinanced from eligible 

6 mortgage loans in securities issued under this Act. 

7 (4) RULE OF CONSTRUCTION.—No provision in 

8 this section shall be construed as permitting Ginnie 

9 Mae to lower any other requirement related to the 

10 requirements set forth under the definition of an eli11 gible mortgage loan. 

12 SEC. 204. SERVICING RIGHTS; REPRESENTATIONS AND 

13 WARRANTIES. 

14 (a) SERVICING RIGHTS.—The servicing rights for 

15 mortgage-backed securities issued by the Issuing Platform 

16 shall be controlled by— 

17 (1) the reinsurance company reinsuring the 

18 first 5 percent loss position on such securities; or 

19 (2) in the case of securities that do not have a 

20 reinsurance company reinsuring the first 5 percent 

21 loss position or with respect to which the such rein22 surance company is insolvent, Ginnie Mae. 

23 (b) ADVANCING OF PAYMENTS.—The party control24 ling the servicing rights described under subsection (a) 

25 shall also control the advancing of payments. 


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1 (c) REPRESENTATIONS AND WARRANTIES.— 

2 (1) COLLATERAL MANAGER.—With respect to 

3 each pool securitized by the Issuing Platform, there 

4 shall be a collateral manager who shall— 

5 (A) oversee representations and warran6 ties; 

7 (B) act for the benefit of investors; and 

8 (C) in the case of a mortgage loan that is 

9 in breach of the representations and warranties, 

10 facilitate the repurchase or replacement of such 

11 mortgage loan with a mortgage loan that is in 

12 compliance with representations and warranties. 

13 (2) FIDUCIARY DUTIES WITH RESPECT TO PRI14 VATE LABEL SECURITIES.— 

15 (A) IN GENERAL.—All contracts for pri16 vate label securities issued after the date of the 

17 enactment of this Act shall include the following 

18 provisions: 

19 (i) The qualification, responsibilities, 

20 and duties of trustees, including require21 ments set forth in the indenture or pooling 

22 and servicing agreement, or any applicable 

23 provisions of the Trust Indenture Act of 

24 1939 (15 U.S.C. 77aaa et seq.). 


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1 (ii) Trustees of private label securities 

2 shall have a fiduciary duty to protect the 

3 financial interests of investors of such se4 curities. 

5 (B) TRUSTEE’S FIDUCIARY DUTY DE6 FINED.—For purposes of this paragraph, a 

7 trustee’s fiduciary duty means that a trustee 

8 shall at all times oversee, monitor, and manage 

9 the trust that owns the mortgage loans securing 

10 the private label securities in the financial inter11 ests of the trust and its investors, with the 

12 same degree of care and skill that a prudent 

13 person would exercise or use under the cir14 cumstances in the conduct of such person’s own 

15 affairs. ln determining financial interests, the 

16 trustee’s fiduciary duty shall consider all inves17 tors in a securitization, rather than the inter18 ests of any particular class of investors. A 

19 trustee that is deemed to be acting in accord20 ance with its fiduciary duty to the trust shall 

21 not be liable to any investor, and shall not be 

22 subject to any injunction, stay, or other equi23 table relief sought by such investor, based solely 

24 upon such actions. 


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1 (C) INCLUSION OF FIDUCIARY DUTY.—The 

2 governing documents of any private label secu3 rities issued after the date of the enactment of 

4 this Act shall automatically be deemed to in5 clude a trustee’s fiduciary duty. The trustee’s 

6 fiduciary duty may not be abrogated or altered 

7 by the parties to such documents and may not 

8 be amended by parties to contracts for private 

9 label securities. 

10 (D) RULE OF CONSTRUCTION.—Nothing in 

11 this paragraph shall be construed to relieve any 

12 party of its duties to participants and bene13 ficiaries of any employee benefit plan under the 

14 Employee Retirement Income Security Act (29 

15 U.S.C. 1101 et seq.). 

16 (E) CONFLICTS WITH THE TRUST INDEN17 TURE ACT OF 1939.—To the extent that the pro18 visions of this paragraph conflict with any pro19 vision of the Trust Indenture Act of 1939, the 

20 provisions of the Trust Indenture Act of 1939 

21 shall apply, but only to the extent of the con22 flict. 

23 (F) STUDY.—Not later than 3 years after 

24 the date of enactment of this Act, Ginnie Mae 

25 shall— 


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1 (i) conduct a study to evaluate— 

2 (I) the structure of compensation 

3 for trustees of private label securities; 

4 (II) any changes to such com5 pensation attributable io the imposi6 tion of the fiduciary duty required 

7 under this paragraph; and 

8 (III) any effects of the imposition 

9 of such fiduciary duty on liquidity in 

10 the market for private label securities; 

11 (ii) not later than 1 year after the 

12 commencement of the study required under 

13 clause (i), submit a report to Congress de14 scribing any findings and conclusions of 

15 such study; 

16 (iii) conduct a study to evaluate any 

17 effects of the imposition of the fiduciary 

18 duty required under this paragraph upon 

19 borrowers, including if the imposition of’ 

20 such fiduciary duty results in additional 

21 costs and expenses to borrowers; and 

22 (iv) not later than 1 year after the 

23 commencement of the study required under 

24 clause (iii), submit a report to Congress 


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1 describing any findings and conclusions of 

2 such study. 

3 (G) PRIVATE LABEL SECURITY DE4 FINED.—For purposes of this paragraph, the 

5 term ‘‘private label security’’ means a mort6 gage-backed security that is not issued by the 

7 Platform. 

8 (d) MANDATORY ARBITRATION.—Disputes between 

9 parties to a security issued by the Issuing Platform shall 

10 be subject to mandatory arbitration. 

11 SEC. 205. FEDERAL HOME LOAN BANKS. 

12 (a) MEMBERSHIP OF LENDERS.—Section 4 of the 

13 Federal Home Loan Bank Act (12 U.S.C. 1424) is 

14 amended by adding at the end the following: 

15 ‘‘(d) LENDERS.— 

16 ‘‘(1) IN GENERAL.—Any lender that satisfies 

17 the requirements of subparagraphs (A) and (C) of 

18 subsection (a)(1) shall be eligible to become a mem19 ber of a Federal Home Loan Bank. 

20 ‘‘(2) STOCK REQUIREMENT.—Ginnie Mae shall 

21 issue regulations specifying that a separate class of 

22 stock shall be issued by Federal Home Loan Banks 

23 to lenders who become a member of a Federal Home 

24 Loan Bank pursuant to this subsection, and Ginnie 


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1 Mae shall determine the applicable restrictions and 

2 requirements for such stock.’’. 

3 (b) POOLING SERVICES FOR ELIGIBLE MORT4 GAGES.—Section 11 of the Federal Home Loan Bank Act 

5 (12 U.S.C. 1431) is amended by adding at the end the 

6 following: 

7 ‘‘(m) POOLING SERVICES FOR ELIGIBLE MORT8 GAGES.— 

9 ‘‘(1) POOLING SERVICES.—Each Federal Home 

10 Loan Bank shall provide pooling services to both 

11 members and non-members who wish to pool eligible 

12 mortgages for purposes of securitizing such mort13 gages through the Issuing Platform established by 

14 title II of the Partnership to Strengthen Homeown15 ership Act of 2014. 

16 ‘‘(2) ELIGIBLE MORTGAGES DEFINED.—For 

17 purposes of this subsection, the term ‘eligible mort18 gage’ has the meaning given that term under section 

19 2 of the Partnership to Strengthen Homeownership 

20 Act of 2014.’’. 


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1 TITLE III—WIND DOWN OF 

2 FANNIE MAE AND FREDDIE MAC 

3 SEC. 301. LIMITATION ON BUSINESS. 

4 The Director of the Government National Mortgage 

5 Association shall provide that, after the certification 

6 date— 

7 (1) the enterprises may not issue, guarantee, or 

8 purchase any security backed by mortgages on 1- to 

9 4-family residences except as specifically authorized 

10 by this Act; 

11 (2) an enterprise may act as a participating 

12 aggregator of eligible mortgages for securitization 

13 pursuant to section 201 if such eligible mortgages 

14 are originated by originators whose volume of such 

15 business is insufficient to allow for such originators 

16 to aggregate and securitize such mortgages, until 

17 the earlier of— 

18 (A) such time as the Director determines 

19 that any other qualified entity or entities pro20 vide sufficient market access to such originators 

21 under competitive rates and terms and requires 

22 the enterprises to cease such business; or 

23 (B) the commencement of the receivership 

24 under section 304(a); and 


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1 (3) an enterprise may act as a reinsurer for a 

2 mortgage-backed security in accordance with the re3 quirements under section 202(b) until the com4 mencement of the receivership under section 304(a). 

5 SEC. 302. RISK-SHARING PILOT PROGRAMS. 

6 Not later than the expiration of the 12-month period 

7 beginning on the date of the enactment of this Act, each 

8 enterprise shall establish a risk-sharing pilot program to 

9 develop private sector first-loss positions on mortgage10 backed securities. Such first-loss positions shall be a per11 centage of the principal or face value of a mortgage12 backed security, as determined from time-to-time by the 

13 Director, taking into consideration market conditions and 

14 the capability of the private sector to assume credit risk. 

15 SEC. 303. CONTINUED CONSERVATORSHIP. 

16 (a) TIMING.—The conservatorships of the enterprises 

17 in effect upon the enactment of this Act shall continue 

18 in effect until the commencement of the receivership of 

19 the enterprises pursuant to subsection (d), subject to the 

20 transfer under section 102(a)(1)(B). 

21 (b) ALIGNING PURPOSES OF CONSERVATORSHIP.— 

22 Notwithstanding section 1367(b)(2)(D) of the Federal 

23 Housing Enterprises Financial Safety and Soundness Act 

24 of 1992 (12 U.S.C. 4617(b)(2)(D)), after the date of the 

25 enactment of this Act, the Director shall, as conservator 


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1 of each enterprise, take such actions as are necessary to 

2 manage the affairs, assets, and obligations of each enter3 prise, and to operate each enterprise, in compliance with 

4 this section. 

5 (c) RETURN OF ENTERPRISES TO PRIVATE MAR6 KET.—During the term of the conservatorships of the en7 terprises, the Director shall— 

8 (1) carry out the conservatorship in a manner 

9 that furthers achievement of the goals and terms of 

10 the mandatory receiverships under subsection (d)(2); 

11 (2) identify any assets of the enterprises nec12 essary for Ginnie Mae to carry out its functions and 

13 responsibilities under sections 201, 202, and 401 of 

14 this Act; and 

15 (3) prepare for the transfer of the multifamily 

16 housing finance business of the enterprises in ac17 cordance with section 401 of this Act. 

18 SEC. 304. MANDATORY RECEIVERSHIP. 

19 (a) COMMENCEMENT.—The Director shall, with re20 spect to each enterprise, immediately appoint the Ginnie 

21 Mae as receiver under section 1367 of the Federal Hous22 ing Enterprises Financial Safety and Soundness Act of 

23 1992 (12 U.S.C. 4617) upon the later of the following: 

24 (1) 5-YEAR PERIOD.—The expiration of the 60- 

25 month period beginning on the date of the enactVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ment of this Act, as the duration of such period may 

2 be adjusted pursuant to subsection (c). 

3 (2) PLATFORM CERTIFIED AS FUNCTIONAL; 

4 COMPETITIVE ACCESS FOR SMALL LENDERS; FHLB

5 CAPACITY.—The certification date has occurred and 

6 the Director has determined that— 

7 (A) a competitive private housing finance 

8 market has been established; 

9 (B) competitive and equitable access to the 

10 Platform for smaller mortgage lenders is avail11 able; 

12 (C) the pooling services offered by Federal 

13 Home Loan Banks pursuant to section 11(m) 

14 of the Federal Home Loan Bank Act are com15 petitive with services made available by the en16 terprises before the certification date; 

17 (D) the Federal Home Loan Banks are ca18 pable of meeting the cash window needs of cred19 it unions, community and mid-sized depository 

20 institutions, and non-depository mortgage origi21 nators with competitive rates and terms; and 

22 (E) the Federal Home Loan Banks have 

23 created a ‘‘to be announced’’ market that is via24 ble in all economic cycles. 


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1 (b) GOALS AND TERMS.—Ginnie Mae shall carry out 

2 the receivership referred to in subsection (a) for the enter3 prise under the authority of such section 1367, subject 

4 to the following requirements: 

5 (1) GOALS.—In carrying out the receivership of 

6 each enterprise, Ginnie Mae shall strive to achieve 

7 both of the following goals: 

8 (A) RETURN TO TAXPAYERS.—Obtaining 

9 an adequate return of taxpayer investment in 

10 the enterprise, taking into consideration the 

11 total cost to the taxpayers, the value provided 

12 to the enterprise, and the risk and exposure to 

13 the Federal Government involved, together with 

14 interest on such investment at a rate deter15 mined by the Director, in consultation with the 

16 Board of Governors of the Federal Reserve Sys17 tem and the Secretary of the Treasury. 

18 (B) COMPETITIVE PRIVATE HOUSING FI19 NANCE MARKET.—Removing barriers to private 

20 sector competition in the housing finance mar21 ket by providing for the transfer of the assets 

22 of the enterprise into the private sector to com23 pete in a functioning housing finance market. 

24 (2) FULL PRIVATIZATION.—Any entities emerg25 ing from such receivership shall be fully private and 


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1 any obligations and securities of such entities shall 

2 not constitute a debt or obligation of the United 

3 States nor or any agency or instrumentality thereof. 

4 (3) MULTIFAMILY HOUSING BUSINESS.—The 

5 receivership shall provide, notwithstanding any other 

6 provision of this Act, for the transfer of the multi7 family housing mortgage guarantee business of the 

8 enterprises in accordance with section 401 of this 

9 Act. 

10 (4) AVAILABILITY OF ASSETS.—The receiver11 ship shall provide for— 

12 (A) the identification of any assets of the 

13 enterprise that are not necessary for the oper14 ation of the limited-life entities established pur15 suant to paragraph (6); and 

16 (B) making such assets available at auc17 tion for acquisition by any private entities, 

18 which shall include the private entities estab19 lished pursuant to paragraph (6)(C). 

20 (5) RESTRUCTURING OF SPSPA.—The receiver21 ship shall provide for the restructuring of the Senior 

22 Preferred Stock Purchase Agreements entered into 

23 between the Department of the Treasury and the en24 terprise on September 26, 2008, as amended and re25 stated thereafter, to— 


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1 (A) permit the redemption of senior pre2 ferred shares of the Department of the Treas3 ury; 

4 (B) provide for the cancellation of the war5 rants for the purchase of common stock of the 

6 enterprises issued to the Department of the 

7 Treasury; and 

8 (C) provide for the appropriate level of 

9 compensation to the Federal Government for 

10 the financial support and commitment provided 

11 to the enterprise. 

12 (6) WIND-DOWN; LIMITED-LIFE ENTERPRISES; 

13 RESTRUCTURING.—Under the receivership— 

14 (A) the receiver shall organize a limited-life 

15 regulated entity for the enterprise in accordance 

16 with section 1367(i) of the Federal Housing 

17 Enterprises Financial Safety and Soundness 

18 Act of 1992 (12 U.S.C. 4617(i)), except that— 

19 (i) any assets and liabilities of the en20 terprise that the receiver determines are 

21 necessary to allow the limited-life regulated 

22 entity to operate independent from the res23 olution of the enterprise shall be trans24 ferred to the limited-life regulated entity; 

25 and 


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1 (ii) in winding up the affairs of the 

2 limited-life regulated entity, the remaining 

3 assets of the limited-life regulated entity 

4 shall be made available to the successor en5 tities established pursuant to subparagraph 

6 (C) of this paragraph and to other private 

7 guarantors engaged in providing insurance 

8 for eligible mortgage-backed securities in 

9 accordance with section 202; 

10 (B) the charter of the enterprise shall be 

11 repealed pursuant to section 1367(k) of the 

12 Federal Housing Enterprises Financial Safety 

13 and Soundness Act of 1992 (12 U.S.C. 

14 4617(k)), as amended by section 305; and 

15 (C) the receiver shall provide for reorga16 nization and chartering of the successor entity 

17 to the limited life regulated entity for the enter18 prise as an entity established to operate as an 

19 insurer under section 202(b)(2)(A) of this Act 

20 or a participating aggregator of eligible mort21 gages for securitization pursuant to section 201 

22 if such eligible mortgages are originated by 

23 originators whose volume of such business is in24 sufficient to allow for such originators to aggre25 gate and securitize such mortgages. 


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1 (c) ADJUSTMENT OF TIMING.—Ginnie Mae may ad2 just the duration of the period referred to in subsection 

3 (a)(1) by establishing requirements to be met by market 

4 participants before such period may be considered to be 

5 concluded. Such requirements may include requirements 

6 regarding— 

7 (1) ensuring that there is an adequate level of 

8 private capital available for efficient financing of sin9 gle-family and multifamily housing mortgages 

10 through— 

11 (A) the market for initial public offerings; 

12 and 

13 (B) retained earnings of market partici14 pants; and 

15 (2) ensuring that any anticompetitive liquidity 

16 advantages in mortgage-backed securities are ade17 quately protected against. 

18 SEC. 305. REPEAL OF ENTERPRISE CHARTERS. 

19 Section 1367 of the Federal Housing Enterprises Fi20 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

21 4617) is amended by striking subsection (k) and inserting 

22 the following new subsection: 

23 ‘‘(k) REPEAL OF ENTERPRISE CHARTERS.— 

24 ‘‘(1) FANNIE MAE.—Effective upon the certifi25 cation date (as such term is defined in section 2 of 


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1 the Partnership to Strengthen Homeownership Act 

2 of 2014), the charter of the Federal National Mort3 gage Association is repealed and the Federal Na4 tional Mortgage Association shall have no authority 

5 to conduct new business under such charter, except 

6 that the provisions of such charter in effect imme7 diately before such repeal shall continue to apply 

8 with respect to the rights and obligations of any 

9 holders of— 

10 ‘‘(A) outstanding debt obligations of the 

11 Federal National Mortgage Association, includ12 ing any— 

13 ‘‘(i) bonds, debentures, notes, or other 

14 similar instruments; 

15 ‘‘(ii) capital lease obligations; or 

16 ‘‘(iii) obligations in respect of letters 

17 of credit, bankers’ acceptances, or other 

18 similar instruments; or 

19 ‘‘(B) mortgage-backed securities guaran20 teed by the Federal National Mortgage Associa21 tion that are not eligible mortgage-backed secu22 rities insured by Ginnie Mae pursuant to sec23 tion 202 of the Partnership to Strengthen 

24 Homeownership Act of 2014. 


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1 ‘‘(2) FREDDIE MAC.—Effective upon the certifi2 cation date, the charter of the Federal Home Loan 

3 Mortgage Corporation is repealed and the Federal 

4 Home Loan Mortgage Corporation shall have no au5 thority to conduct new business under such charter, 

6 except that the provisions of such charter in effect 

7 immediately before such repeal shall continue to 

8 apply with respect to the rights and obligations of 

9 any holders of— 

10 ‘‘(A) outstanding debt obligations of the 

11 Federal Home Loan Mortgage Corporation, in12 cluding any— 

13 ‘‘(i) bonds, debentures, notes, or other 

14 similar instruments; 

15 ‘‘(ii) capital lease obligations; or 

16 ‘‘(iii) obligations in respect of letters 

17 of credit, bankers’ acceptances, or other 

18 similar instruments; or 

19 ‘‘(B) mortgage-backed securities guaran20 teed by the Federal Home Loan Mortgage Cor21 poration that are not eligible mortgage-backed 

22 securities insured by Ginnie Mae pursuant to 

23 section 202 of the Partnership to Strengthen 

24 Homeownership Act of 2014. 

25 ‘‘(3) EXISTING GUARANTEE OBLIGATIONS.— 


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1 ‘‘(A) EXPLICIT GUARANTEE.—The full 

2 faith and credit of the United States is pledged 

3 to the payment of all amounts which may be re4 quired to be paid under any obligation de5 scribed in paragraph (1) or (2). 

6 ‘‘(B) CONTINUED DIVIDEND PAYMENTS.— 

7 Notwithstanding any other provision of law, 

8 provision 2(a) (relating to Dividend Payment 

9 Dates and Dividend Periods) and provision 2(c) 

10 (relating to Dividend Rates and Dividend 

11 Amount) of the Senior Preferred Stock Pur12 chase Agreement, or any provision of any cer13 tificate in connection with such Agreement cre14 ating or designating the terms, powers, pref15 erences, privileges, limitations, or any other 

16 conditions of the Variable Liquidation Pref17 erence Senior Preferred Stock of an enterprise 

18 issued pursuant to such Agreement— 

19 ‘‘(i) shall not be amended, restated, or 

20 otherwise changed to reduce the rate or 

21 amount of dividends in effect pursuant to 

22 such Agreement as of the Third Amend23 ment to such Agreement dated August 17, 

24 2012, except that any amendment to such 


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1 Agreement to facilitate the sale of assets of 

2 the enterprises shall be permitted; and 

3 ‘‘(ii) shall remain in effect until the 

4 guarantee obligations described under 

5 paragraphs (1)(B) and (2)(B) of this sub6 section are fully extinguished. 

7 ‘‘(C) APPLICABILITY.—All guarantee fee 

8 amounts derived from the single-family mort9 gage guarantee business of the enterprises in 

10 existence as of the certification date shall be 

11 subject to the Senior Preferred Stock Purchase 

12 Agreement. 

13 ‘‘(D) SENIOR PREFERRED STOCK PUR14 CHASE AGREEMENT.—For purposes of this 

15 paragraph, the term ‘Senior Preferred Stock 

16 Purchase Agreement’ means— 

17 ‘‘(i) the Amended and Restated Senior 

18 Preferred Stock Purchase Agreement, 

19 dated September 26, 2008, as such Agree20 ment has been amended on May 6, 2009, 

21 December 24, 2009, and August 17, 2012, 

22 respectively, and as such Agreement may 

23 be further amended and restated, entered 

24 into between the Department of the Treas25 ury and each enterprise, as applicable; and 


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1 ‘‘(ii) any provision of any certificate in 

2 connection with such Agreement creating 

3 or designating the terms, powers, pref4 erences, privileges, limitations, or any 

5 other conditions of the Variable Liquida6 tion Preference Senior Preferred Stock of 

7 an enterprise issued or sold pursuant to 

8 such Agreement. 

9 ‘‘(4) SWAP OPTION FOR NEW SECURITIES.— 

10 Notwithstanding any other provision of this sub11 section, Ginnie Mae shall provide that during the 

12 30-year period beginning upon the certification date, 

13 any securities described in paragraph (1)(B) or 

14 (2)(B) may be exchanged, at the request of the hold15 er of such security, for securities insured under sec16 tion 202 of the Partnership to Strengthen Home17 ownership Act of 2014, and Ginnie Mae shall ensure 

18 fungibility between such securities exchanged. Ginnie 

19 Mae may establish such terms and conditions for 

20 such exchanges as Ginnie Mae considers appro21 priate, except that Ginnie Mae shall provide that in 

22 such exchanges such securities described in para23 graph (1)(B) or (2)(B) shall receive a risk weight of 

24 zero.’’. 


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1 SEC. 306. GINNIE MAE AUTHORITY REGARDING TIMING. 

2 (a) AUTHORITY.—The Director may extend any 

3 deadline referred to in section 301, 303(a), 304(a), or the 

4 provisions amended by section 305, as provided in such 

5 subsection (b) of this section, but only if the Director— 

6 (1) makes a determination, after consultation 

7 with the Board of Governors of the Federal Reserve 

8 System, that such deadline is posing significant risk 

9 to the housing market; and 

10 (2) causes notice of such determination to be 

11 published in the Federal Register. 

12 (b) EXTENSIONS.— 

13 (1) FIRST EXTENSION.—The first extension of 

14 any deadline pursuant to subsection (a) shall be for 

15 a period of an additional 2 years. 

16 (2) SECOND EXTENSION.—If, after the expira17 tion of a first extension of a deadline of 2 years, the 

18 Director makes a determination as provided in sub19 section (a)(1), the Director may extend the deadline 

20 an additional 2 years. 

21 (3) ADDITIONAL EXTENSIONS.—If, after the ex22 piration of the second extension of a deadline of 2 

23 years, the Director makes a determination as pro24 vided in subsection (a)(1), the Director may, upon 

25 the written agreement of the Chairman of the Board 

26 of Governors of the Federal Reserve System and the 


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1 Secretary of the Treasury, and in consultation with 

2 the Secretary of the Housing and Urban Develop3 ment, extend the deadline an additional year, and 

4 annually thereafter utilizing the same process de5 scribed in this paragraph until such time as the Di6 rector makes a determination that such deadline 

7 does not pose a significant risk to the housing mar8 ket. 

9 (c) REPORTS.—If the Director extends any deadline 

10 period pursuant to the authority under subsection (a), the 

11 Director shall thereafter, until the expiration of the peri12 ods referred to in paragraphs (1) and (2) of section 

13 1367(k) of the Federal Housing Enterprises Financial 

14 Safety and Soundness Act of 1992 (as such period may 

15 be extended pursuant to this section), submit a report to 

16 the Congress on a monthly basis regarding the transition 

17 of the enterprises pursuant to this section, the status of 

18 the business of the enterprises, and the market share of 

19 the enterprises. 

20 TITLE IV—MULTIFAMILY 

21 HOUSING FINANCE 

22 SEC. 401. ESTABLISHMENT OF MULTIFAMILY SUBSIDI23 ARIES. 

24 (a) FORMATION AND GOVERNANCE OF MULTIFAMILY

25 SUBSIDIARIES.— 


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1 (1) FEDERAL NATIONAL MORTGAGE ASSOCIA2 TION.— 

3 (A) MULTIFAMILY SUBSIDIARY PLAN.— 

4 The Director of Ginnie Mae, in consultation 

5 with the Secretary of the Treasury, shall direct 

6 the Federal National Mortgage Association to 

7 develop a plan, not later than 180 days after 

8 the date of enactment of this Act, to establish 

9 a multifamily subsidiary for purposes of expedi10 tiously— 

11 (i) providing sufficient multifamily fi12 nancing in the primary, secondary, and 

13 tertiary geographical markets, including in 

14 rural markets and through a diversity of 

15 experienced multifamily lenders; and 

16 (ii) establishing a competitive multi17 family market for multifamily housing 

18 guarantors engaging in multifamily covered 

19 securities. 

20 (B) ESTABLISHMENT OF MULTIFAMILY

21 SUBSIDIARY.—The Director shall direct the 

22 Federal National Mortgage Association to es23 tablish a multifamily subsidiary not later than 

24 1 year after the date of enactment of this Act. 


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1 (2) FEDERAL HOME LOAN MORTGAGE COR2 PORATION.— 

3 (A) MULTIFAMILY SUBSIDIARY PLAN.— 

4 The Director, in consultation with the Secretary 

5 of the Treasury, shall direct the Federal Home 

6 Loan Mortgage Corporation to develop a plan, 

7 not later than 180 days after the date of enact8 ment of this Act, to establish a multifamily sub9 sidiary for purposes of expeditiously— 

10 (i) providing sufficient multifamily fi11 nancing in the primary, secondary, and 

12 tertiary geographical markets, including in 

13 rural markets and through a diversity of 

14 experienced multifamily lenders; and 

15 (ii) establishing a competitive multi16 family market for multifamily housing 

17 guarantors engaging in multifamily covered 

18 securities. 

19 (B) ESTABLISHMENT OF MULTIFAMILY

20 SUBSIDIARY.—The Director shall direct the 

21 Federal Home Loan Mortgage Corporation to 

22 establish a multifamily subsidiary not later than 

23 1 year after the date of enactment of this Act. 

24 (b) TRANSFER OF FUNCTIONS.— 

25 (1) FANNIE MAE MULTIFAMILY SUBSIDIARY.— 


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1 (A) IN GENERAL.—Notwithstanding the 

2 provisions under title III or any other provision 

3 of law, effective on the date on which the multi4 family subsidiary is established under sub5 section (a)(1)(B), all employees, functions, ac6 tivities, infrastructure, property, including the 

7 Delegated Underwriting and Servicing Lender 

8 Program and other intellectual property, plat9 forms, technology, or any other object or service 

10 of the Federal National Mortgage Association 

11 necessary to the support, maintenance, and op12 eration of the multifamily business of the Fed13 eral National Mortgage Association shall be 

14 transferred and contributed, without cost, to 

15 the multifamily subsidiary. 

16 (B) CAPITAL CONTRIBUTION.—In connec17 tion with the transfer required under subpara18 graph (A), the Federal National Mortgage As19 sociation shall contribute, in any form or man20 ner the Director may determine, subject to the 

21 approval right of the Secretary of the Treasury 

22 in the Senior Preferred Stock Purchase Agree23 ment, any capital necessary to ensure that the 

24 multifamily subsidiary established under sub25 section (a)(1)(B) has, in the determination of 


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1 the Director, sufficient capital to carry out its 

2 multifamily business, including the ability to ob3 tain warehouse lines of credit. 

4 (C) ENSURING CONTINUATION OF ONGO5 ING OPERATION OF MULTIFAMILY BUSINESS.— 

6 (i) IN GENERAL.—In carrying out the 

7 multifamily business transferred pursuant 

8 to subparagraph (A), the multifamily sub9 sidiary established under subsection 

10 (a)(1)(B) shall ensure that any such busi11 ness continues to operate, as applicable, 

12 consistent with— 

13 (I) the Delegated Underwriting 

14 and Servicing Lender Program estab15 lished by the Federal National Mort16 gage Association; 

17 (II) any other programs, activi18 ties, and contractual agreements of 

19 the enterprises that support the enter20 prises’ provision of liquidity to the 

21 multifamily housing market; and 

22 (III) the provisions of this title. 

23 (2) FREDDIE MAC MULTIFAMILY SUBSIDIARY.— 

24 (A) IN GENERAL.—Notwithstanding the 

25 provisions under title VI or any other provision 


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1 of law, effective on the date on which the multi2 family subsidiary is established under sub3 section (a)(2)(B), all employees, functions, ac4 tivities, infrastructure, property, including the 

5 Capital Market Execution Program Series K 

6 Structured 2Pass-Through Certificates origi7 nated and offered under the Program Plus 

8 Lender Program and other intellectual prop9 erty, platforms, technology, or any other object 

10 or service of the Federal Home Loan Mortgage 

11 Corporation necessary to the support, mainte12 nance, and operation of the multifamily busi13 ness of the Federal Home Loan Mortgage Cor14 poration shall be transferred and contributed, 

15 without cost, to the multifamily subsidiary. 

16 (B) CAPITAL CONTRIBUTION.—In connec17 tion with the transfer required under subpara18 graph (A), the Federal Home Loan Mortgage 

19 Corporation shall contribute, in any form or 

20 manner the Director may determine, subject to 

21 the approval right of the Secretary of the 

22 Treasury in the Senior Preferred Stock Pur23 chase Agreement, any capital necessary to en24 sure that the multifamily subsidiary established 

25 under subsection (a)(2)(B) has, in the deterVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00086 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 mination of the Director, sufficient capital to 

2 carry out its multifamily business, including the 

3 ability to obtain warehouse lines of credit. 

4 (C) ENSURING CONTINUATION OF ONGO5 ING OPERATION OF MULTIFAMILY BUSINESS.— 

6 (i) IN GENERAL.—In carrying out the 

7 multifamily business transferred pursuant 

8 to subparagraph (A), the multifamily sub9 sidiary established under subsection 

10 (a)(2)(B) shall ensure that any such busi11 ness continues to operate, as applicable, 

12 consistent with— 

13 (I) the Capital Market Execution 

14 Program Series K Structured 2Pass15 Through Certificates originated and 

16 offered under the Program Plus 

17 Lender Program established by the 

18 Federal Home Loan Mortgage Cor19 poration; 

20 (II) any other programs, activi21 ties, and contractual agreements of 

22 the enterprises that support the enter23 prises’ provision of liquidity to the 

24 multifamily housing market; and 

25 (III) the provisions of this title. 


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1 (c) MULTIFAMILY SUBSIDIARIES.— 

2 (1) IN GENERAL.—The multifamily subsidiaries 

3 established by the Federal National Mortgage Asso4 ciation and the Federal Home Loan Mortgage Cor5 poration under subsection (a) may retain a limited 

6 multifamily mortgage loan portfolio to— 

7 (A) aggregate mortgage loans for pooled 

8 securities executions; 

9 (B) implement pilot mortgage loan pro10 grams and other risk-sharing transactions and 

11 product modification testing; 

12 (C) engage in the financing of properties 

13 with rent-regulatory restrictions, off-campus 

14 student housing, and senior and assisted living 

15 developments; and 

16 (D) perform additional activities as may be 

17 established by the Director for the purpose of 

18 facilitating the continuation of existing multi19 family activities. 

20 (2) PORTFOLIO REDUCTION APPLICABILITY.— 

21 For purposes of expeditiously meeting the criteria 

22 under clauses (i) and (ii) of paragraphs (1)(A) and 

23 (2)(A) of subsection (a), the multifamily subsidiaries 

24 established under subsection (a) shall not be subject 

25 to any portfolio reduction required under title III. 


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1 SEC. 402. DISPOSITION OF MULTIFAMILY BUSINESSES. 

2 (a) AUTHORITY TO MANAGE DISPOSITION OF MUL3 TIFAMILY BUSINESSES.—Notwithstanding any provision 

4 of title III or any other provision of law, the Director may, 

5 on or before the certification date, manage the sale, trans6 fer, or disposition for value of property, including intellec7 tual property, technology, platforms, and legacy systems, 

8 infrastructure and processes of an enterprise relating to 

9 the operation and maintenance of the multifamily business 

10 of an enterprise. 

11 (b) REQUIRED ESTABLISHMENT OF WELL-FUNC12 TIONING MULTIFAMILY COVERED SECURITY MARKET.— 

13 In exercising the authority in subsection (a), the Director 

14 shall manage any disposition of the multifamily business 

15 of an enterprise in a manner consistent with— 

16 (1) the establishment of a well-functioning mul17 tifamily covered security market; 

18 (2) the provision of broad access to multifamily 

19 financing; and 

20 (3) facilitating competition in the multifamily 

21 covered security market by— 

22 (A) providing open access to performance 

23 information on the legacy multifamily business 

24 of an enterprise; 


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1 (B) providing for reasonable licensing of 

2 the multifamily proprietary systems of an enter3 prise; and 

4 (C) setting market share limitations, fees, 

5 or additional capital standards on multifamily 

6 business assets that were sold, transferred, or 

7 disposed. 

8 SEC. 403. APPROVAL AND SUPERVISION OF MULTIFAMILY 

9 GUARANTORS. 

10 (a) IN GENERAL.—The Director shall develop, adopt, 

11 publish, and enforce standards for the approval by the Di12 rector of multifamily guarantors to— 

13 (1) issue securities collateralized by eligible 

14 multifamily mortgage loans; and 

15 (2) guarantee the timely payment of principal 

16 and interest on such securities collateralized by eligi17 ble multifamily mortgage loans and insured by 

18 Ginnie Mae. 

19 (b) REQUIRED STANDARDS.—The standards required 

20 under paragraph (1) shall include standards sufficient to 

21 ensure that— 

22 (1) each multifamily guarantor is well-capital23 ized; and 

24 (2) credit risk-sharing levels under any such 

25 guarantees are commensurate with such levels under 


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1 the Delegated Underwriting and Servicing Lender 

2 Program of the Federal National Mortgage Associa3 tion and the Capital Market Execution Program Se4 ries K Structured 2Pass-Through Certificates origi5 nated and offered under the Program Plus Lender 

6 Program of the Federal Home Loan Mortgage Cor7 poration. 

8 (c) PRICING.—Ginnie Mae shall charge a guarantee 

9 fee for guarantees provided pursuant to this section and 

10 such fee shall be determined by Ginnie Mae— 

11 (1) in the same manner and using the same 

12 procedures used pursuant to title II to determine 

13 guarantee fees for securities backed by single-family 

14 housing mortgages, with such changes as Ginnie 

15 Mae determines to be necessary to account for the 

16 differences between the single-family guarantee busi17 ness and the multifamily guarantee business; and 

18 (2) taking into account the differences between 

19 the guarantee fees structures of the Federal Na20 tional Mortgage Association and the Federal Home 

21 Loan Mortgage Corporation. 

22 (d) DISTINCTIONS.—The Director shall take into ac23 count, in carrying out this section, in providing any 

24 issuing platform, and in establishing any requirements re25 lating to the guarantee of securities collateralized by eligiVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00091 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ble multifamily mortgage loans, the particular nature and 

2 characteristics of such securities and loans, as distin3 guished from eligible mortgages and securities guaranteed 

4 pursuant to title II, and as may be necessary to accommo5 date the multifamily housing financing market. 

6 SEC. 404. OTHER FORMS OF MULTIFAMILY RISK-SHARING. 

7 The Director may establish such other methods and 

8 manner of risk-sharing and risk transfer relating eligible 

9 multifamily mortgage loans, in addition to the methods 

10 and manners authorized under this title, as may be appro11 priate taking into consideration the particular nature and 

12 characteristics of the multifamily housing finance market, 

13 which may include any risk-sharing activities of the Fed14 eral National Mortgage Association and the Federal Home 

15 Loan Mortgage Corporation relating to the multifamily 

16 housing business. 

17 SEC. 405. GINNIE MAE SECURITIZATION OF FHA RISK-SHAR18 ING LOANS. 

19 (a) QUALIFIED PARTICIPATING ENTITIES RISK20 SHARING PROGRAM.—Paragraph (8) of section 542(b) of 

21 the Housing and Community Development Act of 1992 

22 (12 U.S.C. 1715z–22(b)(8)) is amended to read as follows: 

23 ‘‘(8) GINNIE MAE SECURITIZATION.— 

24 ‘‘(A) PROHIBITION.—The Government Na25 tional Mortgage Association shall not securitize 


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1 any multifamily loans insured or reinsured 

2 under this subsection, except as provided in 

3 subparagraph (B). 

4 ‘‘(B) AUTHORITY.—The Government Na5 tional Mortgage Association may, at the discre6 tion of the Director of Ginnie Mae, securitize 

7 any multifamily loan, provided that— 

8 ‘‘(i) the Federal Housing Administra9 tion provides mortgage insurance based on 

10 the unpaid principal balance of the loan, as 

11 shall be described in the risk-sharing 

12 agreement; 

13 ‘‘(ii) the Federal Housing Administra14 tion shall not require an assignment fee for 

15 mortgage insurance claims related to the 

16 securitized mortgages; and 

17 ‘‘(iii) any successors and assigns of 

18 the risk-sharing partner (including the 

19 holders of credit instruments issued under 

20 a trust mortgage or deed of trust pursuant 

21 to which such holders act by and through 

22 a trustee therein named) shall not assume 

23 any obligation under the risk-sharing 

24 agreement and may assign any defaulted 

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1 tion in exchange for payment of the mort2 gage insurance claim. 

3 The risk-sharing agreement shall provide for re4 imbursement to Ginnie Mae by the risk-sharing 

5 partner or partners for either all or a portion 

6 of the losses incurred on the loans insured.’’. 

7 (b) AUTHORITY.—Paragraph (6) of section 542(c) of 

8 the Housing and Community Development Act of 1992 

9 (12 U.S.C. 1715z–22(c)) is amended to read as follows: 

10 ‘‘(6) GINNIE MAE SECURITIZATION.—The Gov11 ernment National Mortgage Association may, at the 

12 discretion of the Director of Ginnie Mae, securitize 

13 any multifamily loan insured under this subsection, 

14 provided that— 

15 ‘‘(A) the Federal Housing Administration 

16 provides mortgage insurance based on the un17 paid principal balance of the loan, as shall be 

18 described by regulation; 

19 ‘‘(B) the Federal Housing Administration 

20 shall not require an assignment fee for mort21 gage insurance claims related to the securitized 

22 mortgages; and 

23 ‘‘(C) any successors and assigns of the 

24 risk-sharing partner (including the holders of 

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1 gage or deed of trust pursuant to which such 

2 holders act by and through a trustee therein 

3 named) shall not assume any obligation under 

4 the risk-sharing agreement and may assign any 

5 defaulted loan to the Federal Housing Adminis6 tration in exchange for payment of the mort7 gage insurance claim. 

8 The risk-sharing agreement shall provide for reim9 bursement to Ginnie Mae by the risk-sharing part10 ner or partners for either all or a portion of the 

11 losses incurred on the loans insured.’’. 

12 (c) AMENDMENT TO GINNIE MAE CHARTER ACT.— 

13 Clause (ii) of the first sentence of section 306(g)(1) of 

14 the National Housing Act (12 U.S.C. 1721(g)(1)) is 

15 amended— 

16 (1) by striking the semicolon and inserting a 

17 comma; and 

18 (2) by inserting before the period at the end the 

19 following: ‘‘, or which are insured under subsection 

20 (b) or (c) of section 542 of the Housing and Com21 munity Development Act of 1992 (12 U.S.C. 1715z– 

22 22), subject to the terms of paragraph (8) or (6), re23 spectively, of such subsection’’. 


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1 TITLE V—AFFORDABLE 

2 HOUSING 

3 SEC. 501. AFFORDABLE HOUSING ALLOCATIONS. 

4 (a) FEE AND ALLOCATION OF AMOUNTS.—In addi5 tion to any fees for the provision of insurance established 

6 in accordance with title II, in each fiscal year the Platform 

7 shall— 

8 (1) charge and collect a fee in an amount equal 

9 to 10 basis points for each dollar of the outstanding 

10 principal balance of— 

11 (A) all eligible mortgage loans that 

12 collateralize securities insured under this Act; 

13 and 

14 (B) all other mortgage loans that 

15 collateralize securities on which Ginnie Mae 

16 guarantees the timely payment of principal and 

17 interest pursuant to title III of the National 

18 Housing Act (12 U.S.C. 1716 et seq.); and 

19 (2) allocate or otherwise transfer, on an annual 

20 basis— 

21 (A) 75 percent of such fee amounts to the 

22 Secretary of Housing and Urban Development 

23 to fund the Housing Trust Fund established 

24 under section 1338 of the Safety and Sound25 ness Act (12 U.S.C. 4568); 


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1 (B) 15 percent of such fee amounts to the 

2 Secretary of the Treasury to fund the Capital 

3 Magnet Fund established under section 1339 of 

4 the Safety and Soundness Act (12 U.S.C. 

5 4569); and 

6 (C) 10 percent of such fee amounts to the 

7 Ginnie Mae to fund the Market Access Fund 

8 established under section 504 of this Act. 

9 (b) CONTINUING OBLIGATION.—The fee required to 

10 be charged under subsection (a) shall be collected for the 

11 life of the security. 

12 (c) SUSPENSION OF CONTRIBUTIONS.—The Director 

13 may temporarily suspend, for an initial period of one year, 

14 allocations under subsection (a)(2) upon the submission 

15 by the Director to the Committee on Banking, Housing, 

16 and Urban Affairs of the Senate and the Committee on 

17 Financial Services of the House of Representatives of a 

18 written determination by the Director that such alloca19 tions are contributing, or would contribute, to the finan20 cial instability of the insurance Fund established under 

21 section 202(g). The Director may continue such suspen22 sion for additional periods, each up to one year in length, 

23 pursuant to the same submission and determination re24 quirements. 


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1 (d) RULE OF CONSTRUCTION.—The cost of the fee 

2 required to be charged under subsection (a) shall not be 

3 borne by eligible borrowers. 

4 SEC. 502. HOUSING TRUST FUND. 

5 Section 1338 of the Safety and Soundness Act (12 

6 U.S.C. 4568) is amended— 

7 (1) in subsection (a)(1)— 

8 (A) in the first sentence, by inserting ‘‘or 

9 pursuant to section 501 of the Partnership to 

10 Strengthen Homeownership Act of 2014’’ after 

11 ‘‘section 1337’’; and 

12 (B) in the second sentence, by inserting 

13 ‘‘federally-recognized tribes and’’ after ‘‘grants 

14 to’’; 

15 (2) by striking subsection (b) and inserting the 

16 following: 

17 ‘‘(b) [Reserved.]’’; 

18 (3) in subsection (c)— 

19 (A) in paragraph (1), by striking ‘‘Except 

20 as provided in subsection (b), the’’ and insert21 ing ‘‘The’’; 

22 (B) in paragraph (2)— 

23 (i) by striking ‘‘(as such term is de24 fined in section 4 of the Native American 


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1 Housing Assistance and Self-Determina2 tion Act of 1997 (25 U.S.C. 4103))’’; and 

3 (ii) by adding at the end the fol4 lowing: ‘‘An Indian tribe receiving grant 

5 amounts under this subsection may des6 ignate a federally recognized tribe or a 

7 tribally designated housing entity to re8 ceive such grant amounts. Nothing in this 

9 subsection shall limit or be construed to 

10 limit the ability of an Indian tribe or a 

11 tribally designated housing entity from 

12 being a permissible designated recipient of 

13 grant amounts provided by a State under 

14 this section.’’; 

15 (C) in paragraph (3)— 

16 (i) in the heading, by inserting ‘‘IN17 DIAN TRIBES AND’’ before ‘‘STATES’’; 

18 (ii) in subparagraph (A), by striking 

19 ‘‘The Secretary shall’’ and insert the fol20 lowing: 

21 ‘‘(i) MINIMUM TRIBAL DISTRIBU22 TIONS.— 

23 ‘‘(I) IN GENERAL.—The Sec24 retary, acting through the Office of 

25 Native American Programs, shall disVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 tribute via competitive grants the 

2 amounts determined under subclause 

3 (II) and made available under this 

4 subsection to federally recognized 

5 tribes and tribally designated housing 

6 entities. 

7 ‘‘(II) AMOUNTS.—The total 

8 amount required to be distributed 

9 under this subclause for a fiscal year 

10 shall be the greater of $20,000,000, 

11 or 2 percent of the total amount of 

12 amounts allocated for the Housing 

13 Trust Fund under this section. 

14 ‘‘(III) USE OF AMOUNTS.—Com15 petitive grant amounts received by a 

16 federally recognized tribe or a tribally 

17 designated housing entity under this 

18 clause may be used, or committed to 

19 use, only for those activities that are 

20 identified as eligible affordable hous21 ing activities under section 202 of the 

22 Native American Housing Assistance 

23 and Self-Determination Act of 1996 

24 (25 U.S.C. 4132). 


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1 ‘‘(IV) EVALUATION OF APPLICA2 TIONS.— 

3 ‘‘(aa) IN GENERAL.—In 

4 evaluating any application for the 

5 receipt of competitive grant 

6 amounts authorized under this 

7 clause, the Secretary, acting 

8 through the Office of Native 

9 American Programs, shall con10 sider with respect to the federally 

11 recognized tribe applicant or trib12 ally designated housing entity ap13 plicant and to Indian reserva14 tions and other Indian areas as15 sociated with the federally recog16 nized tribe applicant or served by 

17 the tribally designated housing 

18 entity applicant evaluation cri19 teria, including the following: 

20 ‘‘(AA) Level of poverty 

21 on the Indian reservation or 

22 in the Indian area. 

23 ‘‘(BB) Level of unem24 ployment on the Indian resVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 ervation or in the Indian 

2 area. 

3 ‘‘(CC) Condition of 

4 housing stock on the Indian 

5 reservation or in the Indian 

6 area. 

7 ‘‘(DD) Level of over8 crowded housing on the In9 dian reservation or in the 

10 Indian area, as measured by 

11 the number of households in 

12 which the number of persons 

13 per room is greater than 

14 one. 

15 ‘‘(EE) Presence and 

16 prevalence of black mold on 

17 the Indian reservation or in 

18 the Indian area. 

19 ‘‘(FF) Demonstrated 

20 experience, capacity, and 

21 ability of the applicant to 

22 manage affordable housing 

23 programs, including multi24 family rental housing pro25 grams, homeownership proVerDate Mar 15 2010 23:35 Jul 15, 2014 Jkt 039200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 grams, and programs to as2 sist purchasers with down 

3 payments, closing costs, or 

4 interest rate buy-downs. 

5 ‘‘(GG) Demonstrated 

6 ability of the applicant to 

7 meet the requirements under 

8 the Native American Hous9 ing Assistance and Self-De10 termination Act of 1996 (25 

11 U.S.C. 4101 et seq.), includ12 ing the timely and efficient 

13 expenditure of funds. 

14 ‘‘(HH) Such other cri15 teria as may be specified by 

16 the Secretary in order to 

17 evaluate the overall quality 

18 of the proposed project, the 

19 feasibility of the proposed 

20 project, and whether the 

21 proposed project will address 

22 the housing needs on the In23 dian reservation or in the 

24 Indian area. 


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1 ‘‘(bb) REVIEW OF DATA.—In 

2 evaluating any application for the 

3 receipt of competitive grant 

4 amounts authorized under this 

5 clause, the Secretary, acting 

6 through the Office of Native 

7 American Programs, shall permit 

8 a federally recognized tribe appli9 cant or a tribally designated 

10 housing entity applicant to sup11 plement or replace, in whole or in 

12 part, any data compiled and pro13 duced by the Bureau of the Cen14 sus and upon which the Sec15 retary, acting through the Office 

16 of Native American Program, re17 lies, provided such tribally-col18 lected data meets the Depart19 ment of Housing and Urban De20 velopment’s standards for accu21 racy. 

22 ‘‘(V) TREATMENT OF FUNDS.— 

23 Notwithstanding any other provision 

24 of law, competitive grant amounts re25 ceived under this clause shall not be 


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1 considered Federal funds for purposes 

2 of matching other Federal sources of 

3 funds. 

4 ‘‘(VI) RULE OF CONSTRUC5 TION.—The requirements under 

6 clause (ii), subparagraphs (B) and (C) 

7 of this paragraph, and paragraphs (4) 

8 through (8) and paragraph (10)(A) of 

9 this subsection shall not apply to any 

10 amounts distributed under this clause 

11 to a federally recognized tribe or a 

12 tribally designated housing entity. 

13 ‘‘(ii) STATE DISTRIBUTIONS.—From 

14 any amounts remaining in the Housing 

15 Trust Fund after the distribution of the 

16 amounts required under clause (i), the Sec17 retary shall’’; 

18 (iii) in subparagraph (B), by striking 

19 ‘‘subparagraph (A)’’ and inserting ‘‘sub20 paragraph (A)(ii)’’; and 

21 (iv) in subparagraph (C), by striking 

22 ‘‘subparagraph (A)’’ and inserting ‘‘sub23 paragraph (A)(ii)’’; 

24 (D) in paragraph (4)— 


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1 (i) in subparagraph (B), by striking 

2 ‘‘other than fiscal year 2009’’; and 

3 (ii) by striking subparagraph (C), and 

4 inserting the following: 

5 ‘‘(C) MINIMUM STATE ALLOCATIONS.— 

6 ‘‘(i) IN GENERAL.—Except as pro7 vided in clause (ii), if the formula amount 

8 determined under paragraph (3) for a fis9 cal year would allocate less than 

10 $10,000,000 to any of the 50 States of the 

11 United States or the District of Columbia, 

12 the allocation for such State of the United 

13 States or the District of Columbia shall be 

14 the greater of $10,000,000, or 1 percent of 

15 the total amount of amounts allocated for 

16 the Housing Trust Fund under this section 

17 and the increase in any such allocation 

18 shall be deducted pro rata from the alloca19 tions made to all other of the States (as 

20 such term is defined in section 1303). 

21 ‘‘(ii) EXCEPTION.—If the allocation to 

22 the Housing Trust Fund under section 

23 501(a)(2)(A) of the Partnership to 

24 Strengthen Homeownership Act of 2014 

25 for a fiscal year is less than 


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1 $1,000,000,000, the minimum allocation to 

2 any of the 50 States of the United States 

3 or the District of Columbia shall be the 

4 greater of $5,000,000 or 1 percent of the 

5 total amount of amounts allocated for the 

6 Housing Trust Fund under this section 

7 and the increase in any such allocation 

8 shall be deducted pro rata from the alloca9 tions made to all other of the States (as 

10 such term is defined in section 1303).’’; 

11 (E) in paragraph (7)(B)(iv), by striking 

12 ‘‘section 132’’ and inserting ‘‘section 1132’’; 

13 and 

14 (F) by adding at the end the following: 

15 ‘‘(11) RULE OF CONSTRUCTION.—Nothing in 

16 this subsection shall be construed to limit the ability 

17 of a federally recognized tribe or a tribally des18 ignated housing entity from receiving grant amounts 

19 provided by a State under this section.’’; and 

20 (4) in subsection (f), by adding at the end the 

21 following: 

22 ‘‘(7) TRIBAL TERMS.— 

23 ‘‘(A) IN GENERAL.—The terms ‘federally 

24 recognized tribe’, ‘Indian area’, ‘Indian tribe’, 

25 and ‘tribally designated housing entity’ have the 


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1 same meaning as in section 4 of the Native 

2 American Housing Assistance and Self-Deter3 mination Act of 1996 (25 U.S.C. 4103). 

4 ‘‘(B) INDIAN RESERVATION.—The term 

5 ‘Indian reservation’ means land subject to the 

6 jurisdiction of an Indian tribe.’’. 

7 SEC. 503. CAPITAL MAGNET FUND. 

8 Section 1339 of the Safety and Soundness Act (12 

9 U.S.C. 4569) is amended— 

10 (1) in subsection (b)(1), by inserting ‘‘or sec11 tion 501 of the Partnership to Strengthen Home12 ownership Act of 2014’’ after ‘‘section 1337’’; 

13 (2) in subsection (c)(2), by inserting ‘‘and trib14 al’’ after ‘‘rural’’; and 

15 (3) in subsection (h)(2)(A), by inserting ‘‘and 

16 tribal’’ after ‘‘rural’’. 

17 ‘‘(7) TRIBAL TERMS.— 

18 ‘‘(A) IN GENERAL.—The terms ‘federally 

19 recognized tribe’, ‘Indian area’, ‘Indian tribe’, 

20 and ‘tribally designated housing entity’ have the 

21 same meaning as in section 4 of the Native 

22 American Housing Assistance and Self-Deter23 mination Act of 1996 (25 U.S.C. 4103). 


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1 ‘‘(B) INDIAN RESERVATION.—The term 

2 ‘Indian reservation’ means land subject to the 

3 jurisdiction of an Indian tribe.’’. 

4 SEC. 504. MARKET ACCESS FUND. 

5 (a) ESTABLISHMENT.—Ginnie Mae shall establish a 

6 fund, to be known as the ‘‘Market Access Fund’’. 

7 (b) DEPOSITS.—The Market Access Fund shall be 

8 credited with— 

9 (1) the share of the fee charged and collected 

10 by the Platform under section 501(a)(1)(B)(iii); and 

11 (2) such other amounts as may be appropriated 

12 or transferred to the Market Access Fund. 

13 (c) PURPOSE.—Amounts in the Market Access Fund 

14 shall be eligible for use by grantees to address the home15 ownership and rental housing needs of extremely low-, 

16 very low-, low-, and moderate-income and underserved or 

17 hard-to-serve populations by— 

18 (1) providing grants and loans for research, de19 velopment, and pilot testing of innovations in con20 sumer education, product design, underwriting, and 

21 servicing; 

22 (2) offering additional credit support for certain 

23 eligible mortgage loans or pools of eligible mortgage 

24 loans, such as by covering a portion of any capital 

25 required to obtain insurance from the Ginnie Mae 


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1 under this Act, provided that amounts for such addi2 tional credit support do not replace borrower funds 

3 required of an eligible mortgage loan; 

4 (3) providing grants and loans, including 

5 through the use of pilot programs of sufficient scale, 

6 to support the research and development of sustain7 able homeownership and affordable rental programs, 

8 which programs shall include manufactured homes 

9 purchased through real estate and personal property 

10 loans and manufactured homes used as rental hous11 ing, provided that such grant or loan amounts are 

12 used only for the benefit of families whose income 

13 does not exceed 120 percent of the median income 

14 for the area as determined by Ginnie Mae, with ad15 justments for family size; 

16 (4) providing limited credit enhancement, and 

17 other forms of credit support, for product and serv18 ices that— 

19 (A) will increase the rate of sustainable 

20 homeownership and affordable rental housing, 

21 including manufactured homes purchased 

22 through real estate and personal property loans 

23 and manufactured homes used as rental hous24 ing, by individuals or families whose income 

25 does not exceed 120 percent of the area median 


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1 income as determined by Ginnie Mae, with ad2 justments for family size; and 

3 (B) might not otherwise be offered or sup4 ported by a pilot program of sufficient scale to 

5 determine the viability of such products and 

6 services in the private market; 

7 (5) providing housing counseling by a HUD-ap8 proved housing counseling agency; and 

9 (6) providing incentives to achieve broader ac10 cess to credit. 

11 (d) ANNUAL REPORT.—The Director of Ginnie Mae 

12 shall, on an annual basis, report to Congress on the per13 formance and outcome of grants, loans, or credit support 

14 programs funded by the Market Access Fund in accord15 ance with subsection (c), including an evaluation of how 

16 each grant, loan, or credit support program— 

17 (1) succeeded in meeting or failed to meet the 

18 needs of certain populations, especially extremely 

19 low-, very low-, low-, and moderate-income and un20 derserved or hard-to-serve populations; and 

21 (2) succeeded in maximizing or failed to maxi22 mize the leverage of public investment made for each 

23 such grant, loan, or credit support program. 


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1 TITLE VI—GENERAL 

2 PROVISIONS 

3 SEC. 601. RULE OF CONSTRUCTION REGARDING SENIOR 

4 PREFERRED STOCK PURCHASE AGREE5 MENTS. 

6 Nothing in this Act shall be construed to alter, super7 sede, or interfere with the final ruling of a court of com8 petent jurisdiction with respect to any provision of the 

9 Senior Preferred Stock Purchase Agreement or amend10 ments thereof of an enterprise. 

11 SEC. 602. TREATMENT OF COMMUNITY DEVELOPMENT FI12 NANCIAL INSTITUTION. 

13 (a) AMENDMENT.—Section 10(a) of the Federal 

14 Home Loan Bank Act (12 U.S.C. 1430(a)) is amended— 

15 (1) in paragraph (2)(B), by inserting ‘‘or com16 munity development financial institution (as defined 

17 in section 103 of the Riegle Community Develop18 ment and Regulatory Improvement Act of 1994 (12 

19 U.S.C. 4702))’’ after ‘‘community financial institu20 tion’’; and 

21 (2) in paragraph (3)(E), by inserting ‘‘or com22 munity development financial institution (as defined 

23 in section 103 of the Riegle Community Develop24 ment and Regulatory Improvement Act of 1994 (12 


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1 U.S.C. 4702))’’ after ‘‘community financial institu2 tion’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 subsection (a) shall take effect on the certification date. 

Æ 


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