I 
111TH CONGRESS 
2D SESSION 
H. R. 5409 
To establish the Residential Construction Loan Guarantee Program to guar-
antee loans made to eligible home building companies for viable building 
projects. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 26, 2010 
Mr. MILLER of North Carolina (for himself, Mr. BACA, and Mrs. MALONEY) 
introduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To establish the Residential Construction Loan Guarantee 
Program to guarantee loans made to eligible home build-
ing companies for viable building projects. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Residential Construc-
tion Lending Act’’. 
SEC. 2. RESIDENTIAL CONSTRUCTION LOAN GUARANTEE 
PROGRAM. 
(a) ESTABLISHMENT.—There is established within 
the Department of the Treasury a program to be known 
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as the ‘‘Residential Construction Loan Guarantee Pro-
gram’’ (hereinafter referred to in this section as the ‘‘Loan 
Guarantee Program’’). 
(b) LOAN GUARANTEE PROGRAM.— 
(1) PURPOSE.—The purpose of the Loan Guar-
antee Program is to guarantee loans made to eligible 
home building companies for viable building projects. 
(2) APPLICATION.—An insured depository insti-
tution that wishes to make loans that are guaran-
teed under the Loan Guarantee Program may sub-
mit an application to the Secretary in such form and 
manner and containing such information as the Sec-
retary may require. 
(3) SELECTION CRITERIA.— 
(A) IN GENERAL.—The Secretary shall ap-
prove any insured depository institution submit-
ting a full and complete application under para-
graph (2) for participation in the Loan Guar-
antee Program, and shall guarantee loans on a 
first-come-first-served basis. 
(B) SUBMISSION OF LOANS.—Insured de-
pository institutions approved for participation 
in the Loan Guarantee Program shall submit 
each loan made by such institution as part of 
the Loan Guarantee Program to the Secretary 
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so the Secretary may confirm that such loan 
complies with the requirements of this section. 
(4) OVERSIGHT.— 
(A) LOAN TERMS.—Not later than 7 days 
after a loan guaranteed under the Loan Guar-
antee Program is originated, the insured depos-
itory institution making such loan shall submit 
all information about the terms and conditions 
of such loan to the Secretary. 
(B) SUSPENSION AND TERMINATION AU-
THORITY.—Notwithstanding paragraph (3), the 
Secretary shall, not less than yearly, review all 
of the loans made by each insured depository 
institution that are guaranteed under the Loan 
Guarantee Program, and may suspend or termi-
nate any insured depository institution’s future 
participation in the Loan Guarantee Program if 
the Secretary finds that such institution has en-
gaged in fraud or abuse with respect to the 
Loan Guarantee Program, or has consistently 
made loans guaranteed under the Loan Guar-
antee Program that are not repaid by the bor-
rower in accordance with the terms of the loan. 
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(5) LOAN ELIGIBILITY.—A loan may only be 
guaranteed under the Loan Guarantee Program if it 
meets the following criteria: 
(A) VIABLE
BUILDING
PROJECT.—The 
loan must be made for a viable building project, 
as determined by the Secretary. In making such 
determination, the Secretary shall consider 
housing demand, local government support, per-
centage of workforce, and speculative units. 
(B) ELIGIBLE
HOME
BUILDING
COM-
PANY.—The loan must be made to an eligible 
home building company, as determined by the 
Secretary. In making such determination, the 
Secretary shall consider whether such company 
is creditworthy, reputable, and has a record of 
successful residential building projects. 
(C) LOAN
GUARANTEE
AMOUNT
LIMITA-
TION.—The eligible home building company, or 
its principals, must have a minimum net worth 
equal to the loan amount to be guaranteed. 
(D) USE OF LOAN.—The loan may only be 
used for the acquisition, development, and con-
struction of residential developments that have 
locally approved development plans and that 
create immediate job opportunities. 
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(E) TERM REQUIREMENTS.— 
(i) IN
GENERAL.—The term of the 
loan shall be for no more than 5 years, but 
may have an option to extend. 
(ii) LOAN
AMOUNT
LIMITATIONS.— 
The loan shall be for an amount not to ex-
ceed— 
(I) 75 percent loan-to-value on 
the land; 
(II) 100 percent for construction 
and development costs; and 
(III) 80 percent of the market 
value of the building project. 
(F) INTEREST
RATES.—Notwithstanding 
the provisions of the constitution of any State 
or the laws of any State limiting the rate or 
amount of interest which may be charged, 
taken, received, or reserved, the maximum legal 
rate of interest on the loan may not sub-
stantively differ from the current average mar-
ket yield on outstanding marketable obligations 
of similar privately held loans with remaining 
periods to maturity comparable to such loan. 
(6) MULTIPLE GUARANTEES PERMITTED; AG-
GREGATE DOLLAR AMOUNT LIMITATION.—A single 
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eligible home building company is permitted to have 
more than one loan guaranteed under the Loan 
Guarantee Program, but the aggregate amount of all 
such loans guaranteed for a single eligible home 
building company may not exceed the net worth of 
such company. The Secretary may exempt an eligible 
home building company from the net worth limita-
tion of this paragraph if the Secretary determines 
doing so will advance the purpose of this Loan 
Guarantee Program. 
(7) GOVERNMENT GUARANTEE.— 
(A) LEVEL
OF
PARTICIPATION.—Loans 
guaranteed under the Loan Guarantee Program 
shall be guaranteed at 80 percent of the loan 
amount. 
(B) PAYMENT OF ACCRUED INTEREST.— 
(i) IN GENERAL.—Any insured deposi-
tory institution making a claim for pay-
ment on the guaranteed portion of a loan 
guaranteed under the Loan Guarantee 
Program shall be paid the accrued interest 
due on the loan from the earliest date of 
default to the date of payment of the claim 
at a rate not to exceed the rate of interest 
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