H. R. 3221—187 
any new commitment to insure any mortgage, or newly insure 
any mortgage, pursuant to the automated process established under 
this section.’’. 
(b) GAO REPORT.—Not later than the expiration of the two- 
year period beginning on the date of the enactment of this subtitle, 
the Comptroller General of the United States shall submit to the 
Congress a report identifying the number of additional mortgagors 
served using the automated process established pursuant to section 
257 of the National Housing Act (as added by the amendment 
made by subsection (a) of this section) and the impact of such 
process and the insurance of mortgages pursuant to such process 
on the safety and soundness of the insurance funds under the 
National Housing Act of which such mortgages are obligations. 
SEC. 2125. HOMEOWNERSHIP PRESERVATION. 
The Secretary of Housing and Urban Development and the 
Commissioner of the Federal Housing Administration, in consulta-
tion with industry, the Neighborhood Reinvestment Corporation, 
and other entities involved in foreclosure prevention activities, 
shall— 
(1) develop and implement a plan to improve the Federal 
Housing Administration’s loss mitigation process; and 
(2) report such plan to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Finan-
cial Services of the House of Representatives. 
SEC. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA TECH-
NOLOGIES, 
PROCEDURES, 
PROCESSES, 
PROGRAM 
PERFORMANCE, STAFFING, AND SALARIES. 
(a) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 
to be appropriated for each of fiscal years 2009 through 2013, 
$25,000,000, from negative credit subsidy for the mortgage insur-
ance programs under title II of the National Housing Act, to the 
Secretary of Housing and Urban Development for increasing 
funding for the purpose of improving technology, processes, program 
performance, eliminating fraud, and for providing appropriate 
staffing in connection with the mortgage insurance programs under 
title II of the National Housing Act. 
(b) CERTIFICATION.—The authorization under subsection (a) 
shall not be effective for a fiscal year unless the Secretary of 
Housing and Urban Development has, by rulemaking in accordance 
with section 553 of title 5, United States Code (notwithstanding 
subsections (a)(2), (b)(B), and (d)(3) of such section), made a deter-
mination that— 
(1) premiums being, or to be, charged during such fiscal 
year for mortgage insurance under title II of the National 
Housing Act are established at the minimum amount sufficient 
to— 
(A) comply with the requirements of section 205(f) 
of such Act (relating to required capital ratio for the Mutual 
Mortgage Insurance Fund); and 
(B) ensure the safety and soundness of the other mort-
gage insurance funds under such Act; and 
(2) any negative credit subsidy for such fiscal year resulting 
from such mortgage insurance programs adequately ensures 
the efficient delivery and availability of such programs. 
(c) STUDY AND REPORT.—The Secretary of Housing and Urban 
Development shall conduct a study to obtain recommendations from
H. R. 3221—188 
participants in the private residential (both single family and multi-
family) mortgage lending business and the secondary market for 
such mortgages on how best to update and upgrade processes and 
technologies for the mortgage insurance programs under title II 
of the National Housing Act so that the procedures for originating, 
insuring, and servicing of such mortgages conform with those cus-
tomarily used by secondary market purchasers of residential mort-
gage loans. Not later than the expiration of the 12-month period 
beginning on the date of the enactment of this title, the Secretary 
shall submit a report to the Congress describing the progress made 
and to be made toward updating and upgrading such processes 
and technology, and providing appropriate staffing for such mort-
gage insurance programs. 
SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY 
IMPROVEMENTS. 
Section 106(c)(4) of the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x(c)(4)) is amended: 
(1) in subparagraph (C)— 
(A) in clause (i), by striking ‘‘; or’’ and inserting a 
semicolon; 
(B) in clause (ii), by striking the period at the end 
and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(iii) a significant reduction in the income of the 
household due to divorce or death; or 
‘‘(iv) a significant increase in basic expenses of 
the homeowner or an immediate family member of 
the homeowner (including the spouse, child, or parent 
for whom the homeowner provides substantial care 
or financial assistance) due to— 
‘‘(I) an unexpected or significant increase in 
medical expenses; 
‘‘(II) a divorce; 
‘‘(III) unexpected and significant damage to 
the property, the repair of which will not be cov-
ered by private or public insurance; or 
‘‘(IV) a large property-tax increase; or’’; 
(2) by striking the matter that follows subparagraph (C); 
and 
(3) by adding at the end the following: 
‘‘(D) the Secretary of Housing and Urban Development 
determines that the annual income of the homeowner is 
no greater than the annual income established by the Sec-
retary as being of low- or moderate-income.’’. 
SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEM-
ONSTRATION. 
(a) ESTABLISHMENT OF PROGRAM.—For the period beginning 
on the date of enactment of this title and ending on the date 
that is 3 years after such date of enactment, the Secretary of 
Housing and Urban Development shall establish and conduct a 
demonstration program to test the effectiveness of alternative forms 
of pre-purchase homeownership counseling for eligible homebuyers. 
(b) FORMS
OF COUNSELING.—The Secretary of Housing and 
Urban Development shall provide to eligible homebuyers pre-pur-
chase homeownership counseling under this section in the form 
of—
H. R. 3221—189 
(1) telephone counseling; 
(2) individualized in-person counseling; 
(3) web-based counseling; 
(4) counseling classes; or 
(5) any other form or type of counseling that the Secretary 
may, in his discretion, determine appropriate. 
(c) SIZE
OF PROGRAM.—The Secretary shall make available 
the pre-purchase homeownership counseling described in subsection 
(b) to not more than 3,000 eligible homebuyers in any given year. 
(d) INCENTIVE TO PARTICIPATE.—The Secretary of Housing and 
Urban Development may provide incentives to eligible homebuyers 
to participate in the demonstration program established under sub-
section (a). Such incentives may include the reduction of any insur-
ance premium charges owed by the eligible homebuyer to the Sec-
retary. 
(e) ELIGIBLE HOMEBUYER DEFINED.—For purposes of this sec-
tion an ‘‘eligible homebuyer’’ means a first-time homebuyer who 
has been approved for a home loan with a loan-to-value ratio 
between 97 percent and 98.5 percent. 
(f) REPORT TO CONGRESS.—The Secretary of Housing and Urban 
Development shall report to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representative— 
(1) on an annual basis, on the progress and results of 
the demonstration program established under subsection (a); 
and 
(2) for the period beginning on the date of enactment of 
this title and ending on the date that is 5 years after such 
date of enactment, on the payment history and delinquency 
rates of eligible homebuyers who participated in the demonstra-
tion program. 
SEC. 2129. FRAUD PREVENTION. 
Section 1014 of title 18, United States Code, is amended in 
the first sentence— 
(1) by inserting ‘‘the Federal Housing Administration,’’ 
before ‘‘the Farm Credit Administration’’; and 
(2) by striking ‘‘commitment, or loan’’ and inserting 
‘‘commitment, loan, or insurance agreement or application for 
insurance or a guarantee’’. 
SEC. 
2130. 
LIMITATION 
ON 
MORTGAGE 
INSURANCE 
PREMIUM 
INCREASES. 
(a) IN GENERAL.—Notwithstanding any other provision of law, 
including any provision of this title and any amendment made 
by this title— 
(1) for the period beginning on the date of the enactment 
of this title and ending on October 1, 2009, the premiums 
charged for mortgage insurance under multifamily housing pro-
grams under the National Housing Act may not be increased 
above the premium amounts in effect under such program 
on October 1, 2006, unless the Secretary of Housing and Urban 
Development determines that, absent such increase, insurance 
of additional mortgages under such program would, under the 
Federal Credit Reform Act of 1990, require the appropriation 
of new budget authority to cover the costs (as such term is 
defined in section 502 of the Federal Credit Reform Act of 
1990 (2 U.S.C. 661a) of such insurance; and
H. R. 3221—190 
(2) a premium increase pursuant to paragraph (1) may 
be made only if not less than 30 days prior to such increase 
taking effect, the Secretary of Housing and Urban Develop-
ment— 
(A) notifies the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Finan-
cial Services of the House of Representatives of such 
increase; and 
(B) publishes notice of such increase in the Federal 
Register. 
(b) WAIVER.—The Secretary of Housing and Urban Development 
may waive the 30-day notice requirement under subsection (a)(2), 
if the Secretary determines that waiting 30-days before increasing 
premiums would cause substantial damage to the solvency of multi-
family housing programs under the National Housing Act. 
SEC. 2131. SAVINGS PROVISION. 
Any mortgage insured under title II of the National Housing 
Act before the date of enactment of this subtitle shall continue 
to be governed by the laws, regulations, orders, and terms and 
conditions to which it was subject on the day before the date 
of the enactment of this subtitle. 
SEC. 2132. IMPLEMENTATION. 
The Secretary of Housing and Urban Development shall by 
notice establish any additional requirements that may be necessary 
to immediately carry out the provisions of this subtitle. The notice 
shall take effect upon issuance. 
SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED PRE-
MIUMS. 
(a) IN GENERAL.—During the 12-month period beginning on 
October 1, 2008, the Secretary of Housing and Urban Development 
shall not take any action to implement or carry out risk-based 
premiums, which are designed for mortgage lenders to offer bor-
rowers an FHA-insured product that provides a range of mortgage 
insurance premium pricing, based on the risk that the insurance 
contract represents, as such planned implementation was set forth 
in the Notice published in the Federal Register on May 13, 2008 
(Vol. 73, No. 93, Pages 27703 through 27711) (effective July 14, 
2008). 
(b) INSURANCE OF MORTGAGES UNDER THE NATIONAL HOUSING 
ACT.—During the 12-month period beginning on October 1, 2008, 
the Secretary of Housing and Urban Development shall not take 
any action to implement or carry out any other risk-based premium 
product related to the insurance of any mortgage on a single family 
residence under title II of the National Housing Act, where the 
premium price for such new product is based in whole or in part 
on a borrower’s Decision Credit Score, as that term is defined 
in the Notice described under subsection (a), or any successor 
thereto.