I 
119TH CONGRESS 
1ST SESSION H. R. 4479 
To amend the National Housing Act to direct the Secretary of Housing 
and Urban Development to establish a program to insure certain second 
liens secured against property for the purpose of financing the construc-
tion of an accessory dwelling unit, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 17, 2025 
Mr. LICCARDO (for himself, Mr. CLEAVER, Mr. SHERMAN, Mr. THOMPSON of 
California, Mr. RUIZ, Mr. SOTO, Mr. PETERS, Mr. GARAMENDI, Mr. 
SWALWELL, Ms. MCBRIDE, Ms. GOODLANDER, Mr. FIELDS, Ms. 
ELFRETH, Mr. GRAY, Mr. CISNEROS, Mr. STANTON, and Mr. HARDER 
of California) introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To amend the National Housing Act to direct the Secretary 
of Housing and Urban Development to establish a pro-
gram to insure certain second liens secured against prop-
erty for the purpose of financing the construction of 
an accessory dwelling unit, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. INSURANCE WITH RESPECT TO THE FINANCING 
OF 
THE 
CONSTRUCTION 
OF 
ACCESSORY 
DWELLING UNITS. 
Title II of the National Housing Act (12 U.S.C. 1707 
et seq.) is amended by adding at the end the following: 
‘‘SEC. 259. ACCESSORY DWELLING UNIT CONSTRUCTION IN-
SURANCE. 
‘‘(a) IN GENERAL.—Not later than 2 years after the 
date of the enactment of this section, the Secretary shall 
establish a program to insure, in the discretion of the Sec-
retary and under such terms and conditions as the Sec-
retary may prescribe, certain second liens that are secured 
against properties for the purpose of financing the con-
struction of accessory dwelling units. 
‘‘(b) MAXIMUM LOAN AMOUNT.— 
‘‘(1) IN
GENERAL.—Except as described in 
paragraph (2), the Secretary may only insure a sec-
ond lien under this section that has a principal obli-
gation in an amount that is the lesser of— 
‘‘(A) 30 percent of the dollar amount de-
termined under section 203(b)(2)(A) with re-
spect to a one-unit residence; or 
‘‘(B) when combined with any outstanding 
amounts owed on any other loans secured by a 
lien against the same property as the second 
lien, 100 percent of the projected value of the 
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property after the construction of the accessory 
dwelling unit, as determined by the Secretary. 
‘‘(2) RENTAL INCOME.—The Secretary may in-
crease the amount described in paragraph (1) based 
on 50 percent of any projected rental income ex-
pected annually from an accessory dwelling unit to 
be financed using the second lien to be insured 
under this section. 
‘‘(c) APPLICATION.—The borrower seeking insurance 
for a second lien under this section shall submit an appli-
cation for insurance at such time, in such manner, and 
containing such information as the Secretary may require, 
including a certification that the borrower is the owner 
of the property on which an accessory dwelling unit is to 
be constructed. 
‘‘(d) PREMIUM.—The Secretary shall fix a premium 
charge for insurance provided under this section in an 
amount that may not exceed, for each year, 1 percent of 
the principal amount insured under this section. 
‘‘(e) REPORT.—Beginning on the date that is 1 year 
after the date of the enactment of this section, and annu-
ally thereafter, the Secretary shall submit to the Congress 
a report that describes the activities carried out under this 
section. 
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‘‘(f) RULEMAKING.—The Secretary may issue such 
rules as the Secretary determines appropriate to carry out 
this section. 
‘‘(g) ACCESSORY DWELLING UNIT DEFINED.—In 
this section, the term ‘accessory dwelling unit’ means a 
dwelling unit which— 
‘‘(1) is a— 
‘‘(A) modular or prefabricated unit con-
structed to at least 1 of the 3 most recent edi-
tions of a consensus-based building code adopt-
ed by the State, local jurisdiction, territory, or 
tribal entity; 
‘‘(B) manufactured unit (as such term is 
defined in section 102 of the Housing and Com-
munity Development Act of 1974 (42 U.S.C. 
5402)); or 
‘‘(C) conversion of an existing structure on 
a property; 
‘‘(2) includes kitchen, sleeping, and bathroom 
facilities; and 
‘‘(3) is added to, created within, or detached 
from a single-family dwelling on a single property.’’. 
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SEC. 2. PURCHASE AND SECURITIZATION OF INSURED 
LOANS FOR THE CONSTRUCTION OF ACCES-
SORY DWELLING UNITS. 
(a) IN GENERAL.—Except as provided in subsection 
(b), the Director of the Federal Housing Finance Agency 
(hereafter referred to as the ‘‘Director’’) shall permit the 
Federal National Mortgage Association and the Federal 
Home Loan Mortgage Corporation to purchase and 
securitize loans that are insured under section 259 of the 
National Housing Act. 
(b) EXCEPTION.—The Director may prohibit the pur-
chase and securitization of loans that are insured under 
section 259 of the National Housing Act— 
(1) if there are market pressures which would 
pose an excessive and unmitigable risk to the lending 
market for such loans, as determined by the Direc-
tor; and 
(2) beginning on the date that the Director sub-
mits to the Congress a written notice with respect 
to such prohibition. 
(c) REPORT.—The Director shall include in the an-
nual report required under section 1319B(a) of the Fed-
eral Housing Enterprises Financial Safety and Soundness 
Act of 1992 (12 U.S.C. 4521(a)) information with respect 
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to the purchase and securitization of loans that are in-
sured under section 259 of the National Housing Act. 
Æ 
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