110TH CONGRESS 
1ST SESSION H. R. 1852 
AN ACT 
To modernize and update the National Housing Act and 
enable the Federal Housing Administration to use risk- 
based pricing to more effectively reach underserved bor-
rowers, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Expanding American Homeownership Act of 2007’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Findings and purposes. 
Sec. 3. Maximum principal loan obligation. 
Sec. 4. Extension of mortgage term. 
Sec. 5. Downpayment simplification. 
Sec. 6. Mortgage insurance premiums for zero- and lower-downpayment bor-
rowers. 
Sec. 7. Mortgage insurance premiums for standard and higher-risk borrowers. 
Sec. 8. Risk-based mortgage insurance premiums. 
Sec. 9. Payment incentives. 
Sec. 10. Borrower protections for higher risk mortgages. 
Sec. 11. Refinancing mortgages. 
Sec. 12. Annual reports on new programs and loss mitigation. 
Sec. 13. Insurance for single family homes with licensed child care facilities. 
Sec. 14. Rehabilitation loans. 
Sec. 15. Discretionary action. 
Sec. 16. Insurance of condominiums and manufactured housing. 
Sec. 17. Mutual Mortgage Insurance Fund. 
Sec. 18. Hawaiian home lands and Indian reservations. 
Sec. 19. Conforming and technical amendments. 
Sec. 20. Home equity conversion mortgages. 
Sec. 21. Participation of mortgage brokers and correspondent lenders. 
Sec. 22. Conforming loan limit in disaster areas. 
Sec. 23. Failure to pay amounts from escrow accounts for single family mort-
gages. 
Sec. 24. Acceptable identification for FHA mortgagors. 
Sec. 25. Pilot program for automated process for borrowers without sufficient 
credit history. 
Sec. 26. Sense of Congress regarding technology for financial systems. 
Sec. 27. Multifamily housing mortgage limits in high cost areas. 
Sec. 28. Discount sales of multifamily properties. 
Sec. 29. Clarification of disposition of certain properties. 
Sec. 30. Noncompetitive sales by HUD to states and localities. 
Sec. 31. Use of FHA savings for costs of mortgage insurance, housing coun-
seling, FHA technologies, procedures, and processes, and for 
affordable housing grant fund, and study. 
Sec. 32. Limitation on mortgage insurance premium increases. 
Sec. 33. Civil money penalties for improperly influencing appraisals. 
Sec. 34. Mortgage insurance premium refunds. 
Sec. 35. Savings provision. 
Sec. 36. Implementation.
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
(1) one of the primary missions of the Federal 
Housing Administration (FHA) single family mort-
gage insurance program is to reach borrowers who 
are underserved, or not served, by the existing con-
ventional mortgage marketplace; 
(2) the FHA program has a long history of in-
novation, which includes pioneering the 30-year self- 
amortizing mortgage and a safe-to-seniors reverse 
mortgage product, both of which were once thought 
too risky to private lenders; 
(3) the FHA single family mortgage insurance 
program traditionally has been a major provider of 
mortgage insurance for home purchases; 
(4) the FHA mortgage insurance premium 
structure, as well as FHA’s product offerings, 
should be revised to reflect FHA’s enhanced ability 
to determine risk at the loan level and to allow FHA 
to better respond to changes in the mortgage mar-
ket; 
(5) during past recessions, including the oil- 
patch downturns in the mid-1980s, FHA remained 
a viable credit enhancer and was therefore instru-
mental in preventing a more catastrophic collapse in
housing markets and a greater loss of homeowner 
equity; and 
(6) as housing price appreciation slows and in-
terest rates rise, many homeowners and prospective 
homebuyers will need the less-expensive, safer fi-
nancing alternative that FHA mortgage insurance 
provides. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to provide flexibility to FHA to allow for 
the insurance of housing loans for low- and mod-
erate-income homebuyers during all economic cycles 
in the mortgage market; 
(2) to modernize the FHA single family mort-
gage insurance program by making it more reflective 
of enhancements to loan-level risk assessments and 
changes to the mortgage market; and 
(3) to adjust the loan limits for the single fam-
ily mortgage insurance program to reflect rising 
house prices and the increased costs associated with 
new construction. 
SEC. 3. MAXIMUM PRINCIPAL LOAN OBLIGATION. 
Section 203(b)(2) of the National Housing Act (12 
U.S.C. 1709(b)(2)(A)) is amended by striking subpara-
graph (A) and inserting the following new subparagraph: 
‘‘(A) not to exceed the lesser of—
‘‘(i) in the case of a 1-family resi-
dence, 125 percent of the median 1-family 
house price in the area, as determined by 
the Secretary; and in the case of a 2-, 3- 
, or 4-family residence, the percentage of 
such median price that bears the same 
ratio to such median price as the dollar 
amount limitation in effect for 2007 under 
section 305(a)(2) of the Federal Home 
Loan 
Mortgage 
Corporation 
Act 
(12 
U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-family 
residence, respectively, bears to the dollar 
amount limitation in effect for 2007 under 
such section for a 1-family residence; or 
‘‘(ii) 175 percent of the dollar amount 
limitation in effect for 2007 under such 
section 305(a)(2) for a residence of the ap-
plicable size (without regard to any author-
ity to increase such limitations with re-
spect to properties located in Alaska, 
Guam, Hawaii, or the Virgin Islands), ex-
cept that each such maximum dollar 
amount shall be adjusted effective January 
1 of each year beginning with 2008, by 
adding to or subtracting from each such
amount (as it may have been previously 
adjusted) a percentage thereof equal to the 
percentage increase or decrease, during the 
most recently completed 12-month or 4- 
quarter period ending before the time of 
determining such annual adjustment, in an 
housing price index developed or selected 
by the Secretary for purposes of adjust-
ments under this clause; 
except that the dollar amount limitation in ef-
fect under this subparagraph for any size resi-
dence for any area may not be less than the 
greater of: (I) the dollar amount limitation in 
effect under this section for the area on October 
21, 1998; or (II) 65 percent of the dollar 
amount limitation in effect for 2007 under such 
section 305(a)(2) for a residence of the applica-
ble size, as such limitation is adjusted by any 
subsequent percentage adjustments determined 
under clause (ii) of this subparagraph; and ex-
cept that, if the Secretary determines that mar-
ket conditions warrant such an increase, the 
Secretary may, for such period as the Secretary 
considers appropriate, increase the maximum 
dollar amount limitation determined pursuant
to the preceding provisions of this subpara-
graph with respect to any particular size or 
sizes of residences, or with respect to residences 
located in any particular area or areas, to an 
amount that does not exceed the maximum dol-
lar amount then otherwise in effect pursuant to 
the preceding provisions of this subparagraph 
for such size residence, or for such area (if ap-
plicable), by not more than $100,000; and’’. 
SEC. 4. EXTENSION OF MORTGAGE TERM. 
Paragraph (3) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(3)) is amended— 
(1) by striking ‘‘thirty-five years’’ and inserting 
‘‘forty years’’; and 
(2) by striking ‘‘(or thirty years if such mort-
gage is not approved for insurance prior to construc-
tion)’’. 
SEC. 5. DOWNPAYMENT SIMPLIFICATION. 
Section 203(b) of the National Housing Act (12 
U.S.C. 1709(b)) is amended— 
(1) in paragraph (2)— 
(A) by striking subparagraph (B) and in-
serting the following new subparagraph: 
‘‘(B) not to exceed an amount equal to the 
sum of—
‘‘(i) the amount of the mortgage pre-
mium paid at the time the mortgage is in-
sured; and 
‘‘(ii)(I) except as provided in sub-
clause (II), 97.75 percent of the appraised 
value of the property; or 
‘‘(II) in the case only of a mortgage 
described in subsection (c)(3), the ap-
praised value of the property, plus any ini-
tial service charges, appraisal, inspection, 
and other fees in connection with the mort-
gage as approved by the Secretary.’’; 
(B) in the matter after and below subpara-
graph (B), by striking the second sentence (re-
lating to a definition of ‘‘average closing cost’’) 
and all that follows through ‘‘title 38, United 
States Code.’’; and 
(C) by striking the last undesignated para-
graph (relating to counseling with respect to 
the responsibilities and financial management 
involved in homeownership); and 
(2) in paragraph (9)— 
(A) by striking the paragraph designation 
and all that follows through ‘‘Provided further, 
That for’’ and inserting the following:
‘‘(9) Except in the case of a mortgage described 
in subsection (c)(3), be executed by a mortgagor who 
shall have paid on account of the property, in cash 
or its equivalent, at least 3 percent of the Sec-
retary’s estimate of the cost of acquisition (excluding 
the mortgage insurance premium paid at the time 
the mortgage is insured). For’’; and 
(B) by inserting after the period at the end 
the following: ‘‘For purposes of this paragraph, 
the Secretary shall consider as cash or its 
equivalent any amounts gifted by a family 
member (as such term is defined in section 
201), the mortgagor’s employer or labor union, 
or a qualified homeownership assistance entity, 
but only if there is no obligation on the part of 
the mortgagor to repay the gift: For purposes 
of the preceding sentence, the term ‘qualified 
homeownership assistance entity’ means any 
governmental agency or charity that has a pro-
gram to provide homeownership assistance to 
low- and moderate-income families or first-time 
home buyers, or any private nonprofit organiza-
tion that has such a program and evidences suf-
ficient fiscal soundness to protect the fiscal in-
tegrity of the Mutual Mortgage Insurance Fund
by maintaining a minimum net worth of 
$4,000,000 of acceptable assets.’’. 
SEC. 6. MORTGAGE INSURANCE PREMIUMS FOR ZERO- AND 
LOWER-DOWNPAYMENT BORROWERS. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) ZERO- 
AND
LOWER-DOWNPAYMENT
BOR-
ROWERS.— 
‘‘(A) APPLICABILITY.—This paragraph shall 
apply to any mortgage that— 
‘‘(i) is secured by a 1- to 4-family dwelling 
that will be occupied by the mortgagor as his or 
her principal residence; 
‘‘(ii)(I) is an obligation of the Mutual 
Mortgage Insurance Fund or of the General In-
surance Fund pursuant to subsection (v) of this 
section; or 
‘‘(II) is insured under subsection (k) of 
this section or section 234(c); 
‘‘(iii)(I) is executed by a mortgagor who 
has not had any present ownership interest in 
a principal residence, and whose spouse has not 
had any such interest, during 12-month period 
ending upon purchase of the residence with the
mortgage to which this paragraph applies, ex-
cept that this subclause shall be considered a 
program to assist first-time homebuyers for 
purposes of section 956 of the Cranston-Gon-
zalez National Affordable Housing Act (42 
U.S.C. 12713); or 
‘‘(II)(aa) is made to pay or prepay, and 
fully extinguish, the outstanding obligations 
under an existing mortgage or mortgages on 
the same property; and 
‘‘(bb) involves a principal obligation not ex-
ceeding the amount necessary to fully pay or 
prepay such outstanding obligations under the 
existing mortgage or mortgages, plus any 
charges and fees involved in such transaction 
and any charges and fees in connection with the 
payment or prepayment of such outstanding ob-
ligations. 
‘‘(iv)(I) involves a principal obligation that 
does not comply with subclause (I) of sub-
section (b)(2)(B)(ii) (relating to loan-to-value 
ratio); or 
‘‘(II) is executed by a mortgagor who has 
not paid on account of the property, in cash or 
its equivalent, at least 3 percent of the Sec-
retary’s estimate of the cost of acquisition (ex-
cluding the mortgage insurance premium paid 
at the time the mortgage is insured). 
‘‘(B) UP-FRONT
PREMIUMS.—The amount of 
any single premium payment collected at the time of 
insurance may not exceed 3.0 percent of the amount 
of the original insured principal obligation of the 
mortgage. 
‘‘(C) ANNUAL PREMIUMS.—Except as provided 
in subparagraph (D), the amount of any annual pre-
mium payment collected may not exceed 0.75 per-
cent of the remaining insured principal obligation of 
the mortgage. 
‘‘(D) ANNUAL REDETERMINATION OF PREMIUM 
RATE.—The Secretary shall redetermine the rates of 
premiums not less than once every 12 months.’’. 
SEC. 7. MORTGAGE INSURANCE PREMIUMS FOR STANDARD 
AND HIGHER-RISK BORROWERS. 
Paragraph (2) of section 203(c) of the National 
Housing Act (12 U.S.C. 1709(c)(2)) is amended— 
(1) by striking the matter that precedes sub-
paragraph (A) and inserting the following: 
‘‘(2) STANDARD-RISK MORTGAGES.—In the case of 
any mortgage that is secured by a 1- to 4-family dwelling, 
is an obligation of the Mutual Mortgage Insurance Fund
or of the General Insurance Fund pursuant to subsection 
(v) of this section or is insured under subsection (k) of 
this section or section 234(c), for which the mortgagor has 
paid on account of the property, in cash or its equivalent, 
at least 3 percent of the Secretary’s estimate of the cost 
of acquisition (excluding the mortgage insurance premium 
paid at the time the mortgage is insured), and that in-
volves a principal obligation that complies with subclause 
(I) of subsection (b)(2)(B)(ii), the following requirements 
shall apply:’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) HIGHER-RISK
BORROWERS.—The Sec-
retary shall establish underwriting standards that 
provide for insurance under this section of mort-
gages described in the matter in this paragraph pre-
ceding subparagraph (A) for which the mortgagor 
has a credit score equivalent to a FICO score of less 
than 560, and may insure, and make commitments 
to insure, such mortgages. Such underwriting stand-
ards shall include establishing and collecting pre-
mium payments that comply with the requirements 
of this paragraph, except that notwithstanding sub-
paragraph (A), the single premium payment col-
lected at the time of insurance may be established
in an amount that does not exceed 3.0 percent of the 
amount of the original insured principal obligation of 
the mortgage.’’. 
SEC. 8. RISK-BASED MORTGAGE INSURANCE PREMIUMS. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)), as amended by the preceding provisions 
of this Act, is further amended by adding at the end the 
following new paragraphs: 
‘‘(4) FLEXIBLE RISK-BASED PREMIUMS.—In the 
case of a mortgage referred to in paragraph (2)(C) or 
(3)(A) for which the loan application is received by the 
mortgagee on or after October 1, 2007: 
‘‘(A) IN GENERAL.—The Secretary may estab-
lish a mortgage insurance premium structure involv-
ing a single premium payment collected prior to the 
insurance of the mortgage or annual payments 
(which may be collected on a periodic basis), or both, 
subject to the requirements of subparagraph (B) and 
paragraph (5). Under such structure, the rate of 
premiums for such a mortgage may vary according 
to the credit risk associated with the mortgage and 
the rate of any annual premium for such a mortgage 
may vary during the mortgage term as long as the 
basis for determining the variable rate is established 
before the execution of the mortgage. The Secretary
may change a premium structure established under 
this subclause but only to the extent that such 
change is not applied to any mortgage already exe-
cuted. 
‘‘(B) ESTABLISHMENT
AND
ALTERATION
OF 
PREMIUM STRUCTURE.—A premium structure shall 
be established or changed under subparagraph (A) 
only by providing notice to mortgagees and to the 
Congress, at least 30 days before the premium 
structure is established or changed. 
‘‘(C) 
ANNUAL
REPORT
REGARDING
PRE-
MIUMS.—The Secretary shall submit a report to the 
Congress annually setting forth the rate structures 
and rates established and altered pursuant to this 
paragraph during the preceding 12-month period 
and describing how such rates were determined. 
‘‘(5) CONSIDERATIONS FOR PREMIUM STRUCTURE.— 
When establishing premiums for mortgages referred to in 
paragraph (2)(C), establishing premiums pursuant to 
paragraph (3), establishing a premium structure under 
paragraph (4), and when changing such a premium struc-
ture, the Secretary shall consider the following: 
‘‘(A) The effect of the proposed premiums or 
structure on the Secretary’s ability to meet the oper-
ational goals of the Mutual Mortgage Insurance 
Fund as provided in section 202(a). 
‘‘(B) Underwriting variables. 
‘‘(C) The extent to which new pricing under the 
proposed premiums or structure has potential for ac-
ceptance in the private market. 
‘‘(D) The administrative capability of the Sec-
retary to administer the proposed premiums or 
structure. 
‘‘(E) The effect of the proposed premiums or 
structure on the Secretary’s ability to maintain the 
availability of mortgage credit and provide stability 
to mortgage markets. 
‘‘(6) AUTHORITY TO BASE PREMIUM PRICES
ON 
PRODUCT RISK.— 
‘‘(A) AUTHORITY.—In establishing premium 
rates under paragraphs (2), (3), and (4), the Sec-
retary may provide for variations in such rates ac-
cording to the credit risk associated with the type of 
mortgage product that is being insured under this 
title, which may include providing that premium 
rates differ between fixed-rate mortgages and ad-
justable-rate mortgages insured pursuant to section 
251, between mortgages insured pursuant to section 
203(b) and mortgages for condominiums insured
pursuant to section 234, and between such other 
products as the Secretary considers appropriate. 
‘‘(B) LIMITATION.—Subparagraph (A) may not 
be construed to authorize the Secretary to establish, 
for any mortgage product, any mortgage insurance 
premium rate that does not comply with the require-
ments and limitations under paragraphs (2) through 
(5).’’. 
SEC. 9. PAYMENT INCENTIVES. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)), as amended by the preceding provisions 
of this Act, is further amended by adding at the end the 
following new paragraph: 
‘‘(7) PAYMENT INCENTIVES.— 
‘‘(A) AUTHORITY.—With respect to mortgages 
referred to in paragraph (2)(C) or (3): 
‘‘(i) DISCRETIONARY 3-YEAR PAYMENT IN-
CENTIVE.—The Secretary may provide, in the 
discretion of the Secretary, that the payment 
incentive under subparagraph (B) shall apply 
upon the expiration of the 3-year period begin-
ning upon the time of insurance of such a mort-
gage. 
‘‘(ii) MANDATORY 5-YEAR PAYMENT INCEN-
TIVE.—The Secretary shall provide that the
payment incentive under subparagraph (B) ap-
plies upon the expiration of the 5-year period 
beginning upon the time of insurance of such a 
mortgage. 
‘‘(B) PAYMENT INCENTIVE.—In the case of any 
mortgage to which the payment incentive under this 
subparagraph applies, if, during the period referred 
to in clause (i) or (ii) of subparagraph (A), as appli-
cable, all mortgage insurance premiums for such 
mortgage have been paid on a timely basis, upon the 
expiration of such period the Secretary shall— 
‘‘(i) reduce the amount of the annual pre-
mium payments otherwise due thereafter under 
such mortgage— 
‘‘(I) in the case of a mortgage re-
ferred to in paragraph (3), to an amount 
that does not exceed the amount of the 
maximum annual premium allowable under 
paragraph (2)(B); and 
‘‘(II) in the case of a mortgage re-
ferred to in paragraph (2)(C), to an 
amount that does not exceed the amount of 
the annual premium payable at the time of 
insurance of the mortgage on a mortgage 
of the same product type having the same
terms, but for which the mortgagor has a 
credit score equivalent to a FICO score of 
560 or more; and 
‘‘(ii) in the case only of a mortgage re-
ferred to in paragraph (2)(C), refund to the 
mortgagor, upon payment in full of the obliga-
tion of the mortgage, any amount by which the 
single premium payment for such mortgage col-
lected at the time of insurance exceeded the 
amount of the single premium payment charge-
able under paragraph (2)(A) at the time of in-
surance for a mortgage of the same product 
type having the same terms, but for which the 
mortgagor has a credit score equivalent to a 
FICO score of 560 or more.’’. 
SEC. 10. BORROWER PROTECTIONS FOR HIGHER RISK 
MORTGAGES. 
Section 203(b) of the National Housing Act (12 
U.S.C. 1709(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(10) BORROWER PROTECTIONS FOR CERTAIN 
MORTGAGES.—Except as otherwise specifically pro-
vided in this paragraph, in the case of any mortgage 
referred to in paragraph (2)(C) or (3) of subsection 
(c), the following requirements shall apply:
‘‘(A) DISCLOSURES.— 
‘‘(i) REQUIRED DISCLOSURES.—In ad-
dition to any disclosures that are otherwise 
required by law or by the Secretary for 
single family mortgages, the mortgagee 
shall disclose to the mortgagor the fol-
lowing information: 
‘‘(I) AT
APPLICATION.—At the 
time of application for the loan in-
volved in the mortgage, a list of coun-
seling agencies, approved by the Sec-
retary, in the area of the applicant. 
‘‘(II) AT
EXECUTION.—At the 
time of entering into the mortgage— 
‘‘(aa) the terms of the man-
datory 5-year payment incentive 
required 
under 
subsection 
(c)(7)(A)(ii); and 
‘‘(bb) a statement that the 
mortgagor has a right under con-
tract to loss mitigation. 
‘‘(III) OTHER
INFORMATION.— 
Any other additional information that 
the Secretary determines is appro-
priate to ensure that the mortgagor
has received timely and accurate in-
formation about the program under 
paragraph (2)(C) or (3) of subsection 
(c), as applicable. 
‘‘(ii) PENALTIES
FOR
FAILURE
TO 
PROVIDE
REQUIRED
DISCLOSURES.—The 
Secretary may establish and impose appro-
priate penalties for failure of a mortgagee 
to provide any disclosure required under 
clause (i). 
‘‘(iii) NO
PRIVATE
RIGHT
OF
AC-
TION.—This subparagraph shall not create 
any private right of action on behalf of the 
mortgagor. 
‘‘(B) COUNSELING.— 
‘‘(i) REQUIREMENT.—The Secretary 
shall require that the mortgagor shall have 
received counseling that complies with the 
requirements of this subparagraph. 
‘‘(ii) TERMS OF COUNSELING.—Coun-
seling under this subparagraph shall be 
provided— 
‘‘(I) prior to closing for the loan 
involved in the mortgage;
‘‘(II) by a third party (other than 
the mortgagee) who is approved by 
the Secretary, with respect to the re-
sponsibilities and financial manage-
ment involved in homeownership; 
‘‘(III) on an individual basis to 
the mortgagor by a representative of 
the approved third-party counseling 
entity; and 
‘‘(IV) in person, to the maximum 
extent possible. 
‘‘(iii) TOPICS.—In the case only of a 
mortgage referred to in subsection (c)(3), 
counseling under this subparagraph shall 
include providing to, and discussing with, 
the mortgagor— 
‘‘(I) information regarding home-
ownership options other than a mort-
gage that is subject to this paragraph, 
other zero- or low-downpayment mort-
gage options that are or may become 
available to the mortgagor, the finan-
cial implications of entering into a 
mortgage (including a mortgage sub-
ject to this paragraph), and any other
information that the Secretary may 
require; 
‘‘(II) a written disclosure that 
sets forth the amount and the per-
centage by which a property with a 
mortgage that is subject to this para-
graph must appreciate for the mort-
gagor to recover the principal amount 
of the mortgage, the costs financed 
under the mortgage, and the esti-
mated costs involved in selling the 
property, if the mortgagor were to sell 
the property on each of the second, 
fifth, and tenth anniversaries of the 
mortgage; and 
‘‘(III) a written disclosure, as the 
Secretary shall require, that specifies 
the effective cost to a mortgagor of 
borrowing the amount by which the 
maximum amount that could be bor-
rowed under a mortgage that is re-
ferred to in subsection (c)(3) exceeds 
the maximum amount that could be 
borrowed under a mortgage insured 
under this subsection that is not a
mortgage referred to in such sub-
section, based on average closing costs 
with respect to such amount, as deter-
mined by the Secretary; such cost 
shall be expressed as an annual inter-
est rate over the first 5 years of a 
mortgage; 
the 
disclosure 
required 
under this subclause may be provided 
in conjunction with the notice re-
quired under subsection (f). 
‘‘(iv) 
2- 
AND
3-FAMILY
RESI-
DENCES.—In the case of a mortgage in-
volving a 2- or 3-family residence, coun-
seling under this subparagraph shall in-
clude (in addition to the information re-
quired under clause (iii)) information re-
garding real estate property management. 
‘‘(C) NOTICE OF FORECLOSURE PREVEN-
TION COUNSELING AVAILABILITY.— 
‘‘(i) WRITTEN
AGREEMENT.—To be 
eligible for insurance under this subsection, 
the mortgagee shall provide the mortgagor, 
at the time of the execution of the mort-
gage, a written agreement which shall be 
signed by the mortgagor and under which
the mortgagee shall provide notice de-
scribed in clause (ii) to a housing coun-
seling entity that has agreed to provide the 
notice and counseling required under 
clause (iii) and is approved by the Sec-
retary. 
‘‘(ii) NOTICE TO COUNSELING AGEN-
CY.—The notice described in this clause, 
with respect to a mortgage, is notice, pro-
vided at the earliest time practicable after 
the mortgagor becomes 60 days delinquent 
with respect to any payment due under the 
mortgage, that the mortgagor is so delin-
quent and of how to contact the mort-
gagor. Such notice may only be provided 
once with respect to each delinquency pe-
riod for a mortgage. 
‘‘(iii) NOTICE TO MORTGAGOR.—Upon 
notice from a mortgagee that a mortgagor 
is 60 days delinquent with respect to pay-
ments due under the mortgage, the hous-
ing counseling entity shall at the earliest 
time practicable notify the mortgagor of 
such delinquency, that the entity makes 
available foreclosure prevention counseling
that may assist the mortgagor in resolving 
the delinquency, and of how to contact the 
entity to arrange for such counseling. 
‘‘(iv) ABILITY TO CURE.—Failure to 
provide the written agreement required 
under clause (i) may be corrected by send-
ing such agreement to the mortgagor not 
later than the earliest time practicable 
after the mortgagor first becomes 60 days 
delinquent with respect to payments due 
under the mortgage. Insurance provided 
under this subsection may not be termi-
nated and penalties for such failure may 
not be prospectively or retroactively im-
posed if such failure is corrected in accord-
ance with this clause. 
‘‘(v) PENALTIES
FOR
FAILURE
TO 
PROVIDE
AGREEMENT.—The 
Secretary 
may establish and impose appropriate pen-
alties for failure of a mortgagee to provide 
the written agreement required under 
clause (i). 
‘‘(vi) LIMITATION
ON
LIABILITY
OF 
MORTGAGEE.—A mortgagee shall not incur 
any liability or penalties for any failure of
a housing counseling entity to provide no-
tice under clause (iii). 
‘‘(vii) NO
PRIVATE
RIGHT
OF
AC-
TION.—This subparagraph shall not create 
any private right of action on behalf of the 
mortgagor. 
‘‘(viii) DELINQUENCY
PERIOD.—For 
purposes of this subparagraph, the term 
‘delinquency period’ means, with respect to 
a mortgage, a period that begins upon the 
mortgagor becoming delinquent with re-
spect to payments due under the mortgage 
and ends upon the first subsequent occur-
rence of such payments under the mort-
gage becoming current or the property 
subject to the mortgage being foreclosed or 
otherwise disposed of.’’. 
SEC. 11. REFINANCING MORTGAGES. 
Section 203 of the National Housing Act (12 U.S.C. 
1709) is amended by inserting after subsection (k) the fol-
lowing new subsection: 
‘‘(l) REFINANCING MORTGAGES.— 
‘‘(1) 
ESTABLISHMENT
OF
UNDERWRITING 
STANDARDS.—The Secretary shall establish under-
writing standards that provide for insurance under
this title of mortgage loans, and take actions to fa-
cilitate the availability of mortgage loans insured 
under this title, for qualified borrowers that are 
made for the purpose of paying or prepaying out-
standing obligations under existing mortgages for 
borrowers that— 
‘‘(A) have existing mortgages with adverse 
terms or rates, or 
‘‘(B) do not have access to mortgages at 
reasonable 
rates 
and 
terms 
for 
such 
refinancings due to adverse market conditions. 
‘‘(2) INSURANCE
OF
MORTGAGES
TO
BOR-
ROWERS IN DEFAULT OR AT RISK OF DEFAULT.—In 
facilitating insurance for such mortgages, the Sec-
retary may insure mortgages to borrowers who are, 
currently in default or at imminent risk of being in 
default, but only if such loans meet reasonable un-
derwriting standards established by the Secretary.’’. 
SEC. 12. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS 
MITIGATION. 
Section 540(b)(2) of the National Housing Act (12 
U.S.C. 1735f–18(b)(2)) is amended, by adding at the end 
the following new subparagraphs: 
‘‘(C) The rates of default and foreclosure 
for the applicable collection period for mort-
gages insured pursuant to the programs for 
mortgage insurance under paragraphs (2)(C) 
and (3) of section 203(c). 
‘‘(D) Actions taken by the Secretary dur-
ing the applicable collection period with respect 
to loss mitigation on mortgages insured pursu-
ant to section 203.’’. 
SEC. 13. INSURANCE FOR SINGLE FAMILY HOMES WITH LI-
CENSED CHILD CARE FACILITIES. 
(a) DEFINITION OF CHILD CARE FACILITY.—Section 
201 of the National Housing Act (12 U.S.C. 1707) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) The term ‘child care facility’ means a facility 
that— 
‘‘(A) has as its purpose the care of children who 
are less than 12 years of age; and 
‘‘(B) is licensed or regulated by the State in 
which it is located (or, if there is no State law pro-
viding for such licensing and regulation by the State, 
by the municipality or other political subdivision in 
which the facility is located). 
Such term does not include facilities for school-age chil-
dren primarily for use during normal school hours.’’.
(b) INCREASE
IN MAXIMUM MORTGAGE AMOUNT 
LIMITATION.—Paragraph (2) of section 203(b) of the Na-
tional Housing Act (12 U.S.C. 1709(b)(2)), as amended 
by the preceding provisions of this Act, is further amended 
by adding at end the following new undesignated para-
graph: 
‘‘Notwithstanding any other provision of this 
paragraph, the amount that may be insured under 
this section may be increased by up to 25 percent 
if such increase is necessary to account for the in-
creased cost of the residence due to an increased 
need of space in the residence for locating and oper-
ating a child care facility (as such term is defined 
in section 201) within the residence, but only if a 
valid license or certificate of compliance with regula-
tions described in section 201(g)(2) has been issued 
for such facility as of the date of the execution of 
the mortgage, and only if such increase in the 
amount insured is proportional to the amount of 
space of such residence that will be used for such fa-
cility.’’. 
SEC. 14. REHABILITATION LOANS. 
Subsection (k) of section 203 of the National Hous-
ing Act (12 U.S.C. 1709(k)) is amended—
(1) in paragraph (1), by striking ‘‘on’’ and all 
that follows through ‘‘1978’’; and 
(2) in paragraph (5)— 
(A) by striking ‘‘General Insurance Fund’’ 
the first place it appears and inserting ‘‘Mutual 
Mortgage Insurance Fund’’; and 
(B) in the second sentence, by striking the 
comma and all that follows through ‘‘General 
Insurance Fund’’. 
SEC. 15. DISCRETIONARY ACTION. 
The National Housing Act is amended— 
(1) in subsection (e) of section 202 (12 U.S.C. 
1708(e))— 
(A) in paragraph (3)(B), by striking ‘‘sec-
tion 202(e) of the National Housing Act’’ and 
inserting ‘‘this subsection’’; and 
(B) by redesignating such subsection as 
subsection (f); 
(2) by striking paragraph (4) of section 203(s) 
(12 U.S.C. 1709(s)(4)) and inserting the following 
new paragraph: 
‘‘(4) the Secretary of Agriculture;’’; and 
(3) by transferring subsection (s) of section 203 
(as amended by paragraph (2) of this section) to 
section 202, inserting such subsection after sub-
section (d) of section 202, and redesignating such 
subsection as subsection (e). 
SEC. 16. INSURANCE OF CONDOMINIUMS AND MANUFAC-
TURED HOUSING. 
(a) IN GENERAL.—Section 234 of the National 
Housing Act (12 U.S.C. 1715y) is amended— 
(1) in subsection (c)— 
(A) in the first sentence— 
(i) by striking ‘‘and’’ before ‘‘(2)’’; 
and 
(ii) by inserting before the period at 
the end the following: ‘‘, and (3) the 
project has a blanket mortgage insured by 
the Secretary under subsection (d)’’; and 
(B) in clause (B) of the third sentence, by 
striking ‘‘thirty-five years’’ and inserting ‘‘forty 
years’’; and 
(2) in subsection (g), by striking ‘‘, except 
that’’ and all that follows and inserting a period. 
(b) DEFINITION OF MORTGAGE.—Section 201(a) of 
the National Housing Act (12 U.S.C. 1707(a)) is amend-
ed— 
(1) before ‘‘ a first mortgage’’ insert ‘‘(A)’’;
(2) by striking ‘‘or on a leasehold (1)’’ and in-
serting ‘‘(B) a first mortgage on a leasehold on real 
estate (i)’’; 
(3) by striking ‘‘or (2)’’ and inserting ‘‘, or 
(ii)’’; and 
(4) by inserting before the semicolon the fol-
lowing: ‘‘, or (C) a first mortgage given to secure the 
unpaid purchase price of a fee interest in, or long- 
term leasehold interest in, real estate consisting of 
a one-family unit in a multifamily project, including 
a project in which the dwelling units are attached, 
or are manufactured housing units, semi-detached, 
or detached, and an undivided interest in the com-
mon areas and facilities which serve the project’’. 
(c) DEFINITION OF REAL ESTATE.—Section 201 of 
the National Housing Act (12 U.S.C. 1707), as amended 
by the preceding provisions of this Act, is further amended 
by adding at the end the following new subsection: 
‘‘(h) The term ‘real estate’ means land and all nat-
ural resources and structures permanently affixed to the 
land, including residential buildings and stationary manu-
factured housing. The Secretary may not require, for 
treatment of any land or other property as real estate for 
purposes of this title, that such land or property be treated 
as real estate for purposes of State taxation.’’.
SEC. 17. MUTUAL MORTGAGE INSURANCE FUND. 
(a) IN GENERAL.—Subsection (a) of section 202 of 
the National Housing Act (12 U.S.C. 1708(a)) is amended 
to read as follows: 
‘‘(a) MUTUAL MORTGAGE INSURANCE FUND.— 
‘‘(1) ESTABLISHMENT.—Subject to the provi-
sions of the Federal Credit Reform Act of 1990, 
there is hereby created a Mutual Mortgage Insur-
ance Fund (in this title referred to as the ‘Fund’), 
which shall be used by the Secretary to carry out the 
provisions of this title with respect to mortgages in-
sured under section 203. The Secretary may enter 
into commitments to guarantee, and may guarantee, 
such insured mortgages. 
‘‘(2) LIMIT ON LOAN GUARANTEES.—The au-
thority of the Secretary to enter into commitments 
to guarantee such insured mortgages shall be effec-
tive for any fiscal year only to the extent that the 
aggregate original principal loan amount under such 
mortgages, any part of which is guaranteed, does 
not exceed the amount specified in appropriations 
Acts for such fiscal year. 
‘‘(3) FIDUCIARY
RESPONSIBILITY.—The Sec-
retary has a responsibility to ensure that the Mutual 
Mortgage Insurance Fund remains financially sound.
‘‘(4) 
ANNUAL
INDEPENDENT
ACTUARIAL 
STUDY.—The Secretary shall provide for an inde-
pendent actuarial study of the Fund to be conducted 
annually, which shall analyze the financial position 
of the Fund. The Secretary shall submit a report 
annually to the Congress describing the results of 
such study and assessing the financial status of the 
Fund. The report shall recommend adjustments to 
underwriting standards, program participation, or 
premiums, if necessary, to ensure that the Fund re-
mains financially sound. 
‘‘(5) QUARTERLY REPORTS.—During each fiscal 
year, the Secretary shall submit a report to the Con-
gress for each quarter, which shall specify for mort-
gages that are obligations of the Fund— 
‘‘(A) the cumulative volume of loan guar-
antee commitments that have been made during 
such fiscal year through the end of the quarter 
for which the report is submitted; 
‘‘(B) the types of loans insured, cat-
egorized by risk; 
‘‘(C) any significant changes between ac-
tual and projected claim and prepayment activ-
ity;