closure Act of 1994 and the Multifamily Mortgage
Foreclosure Act of 1981, respectively;
(19) shall have the priority of the United States
with respect to the payment of debts out of bank-
rupt, insolvent, and decedents’ estates;
(20) may invest in systems, technology, or other
capital resources, to enhance its ability to carry out
the purposes of this Act; and
(21) shall have and exercise all powers nec-
essary or appropriate to effect any purposes of this
Act, including the power to carry out any authority
transferred to the Corporation under this Act or oth-
erwise transferred to the Corporation by the Sec-
retary.
SEC. 104. BOARD OF DIRECTORS.
(a) IN GENERAL.—The powers of the Corporation
shall be vested in the Board of Directors of the Corpora-
tion.
(b) APPOINTMENT.—The Board of Directors shall
consist of—
(1) the Secretary of Housing and Urban Devel-
opment (or the designee of the Secretary); and
(2) 8 other individuals appointed by the Presi-
dent by and with the advise and consent of the Sen-
ate.
The Secretary shall be the chairperson of the Board.
(c) QUALIFICATIONS.—Members of the Board of Di-
rectors appointed under subsection (b)(2) shall be citizens
of the United States. The Board of Directors shall at all
times include as members not less than—
(1) 1 individual from the mortgage finance in-
dustry;
(2) 1 individual from the housing development
industry;
(3) 1 individual with knowledge and experience
regarding secondary mortgage market activities;
(4) 1 individual with knowledge and experience
regarding home sales;
(5) 1 individual with knowledge and experience
regarding housing asset management;
(6) 1 individual from a State or local housing
agency engaged in housing activities;
(7) 1 individual who represents consumer or
community interests in housing; and
(8) 1 individual who represents or resides in an
urban or rural neighborhood whose population con-
sists predominantly of members of minorities.
The members of the Board shall be selected so that at
all times the membership of the Board includes a reason-
ably equivalent number of members with experience re-
garding single family housing and multifamily housing.
(d) TERMS.—
(1) IN GENERAL.—Each member of the Board
of Directors under subsection (b)(2) shall be ap-
pointed for a term of 6 years, except as provided in
paragraphs (2) and (3).
(2) TERMS OF INITIAL APPOINTEES.—As des-
ignated by the President at the time of appointment,
of the members first appointed—
(A) 3 shall be appointed for terms of 2
years; and
(B) 3 shall be appointed for terms of 4
years.
(3) VACANCIES.—Any member appointed to fill
a vacancy occurring before the expiration of the
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of
that term. A member may serve after the expiration
of that member’s term until a successor has taken
office. A vacancy in the Board shall be filled in the
manner in which the original appointment was
made.
(e) MEETINGS AND QUORUM.—The Board of Direc-
tors shall meet at any time pursuant to the call of the
Chairperson or a majority of its members and as provided
by the bylaws of the Corporation, but not less than quar-
terly. 6 members of the Board shall constitute a quorum.
(f) POWERS.—The Board of Directors shall be re-
sponsible for the general management of the Corporation
and shall have the same authority, privileges, and respon-
sibilities as the board of directors of a private corporation
incorporated under the District of Columbia Business Cor-
poration Act.
(g) COMPENSATION.—Members of the Board of Di-
rectors shall serve on a part-time basis and shall serve
without pay.
(h) TRAVEL EXPENSES.—Each member shall receive
travel expenses, including per diem in lieu of subsistence,
in accordance with sections 5702 and 5703 of title 5,
United States Code.
SEC. 105. OFFICERS AND EMPLOYEES.
(a) APPOINTMENT OF OFFICERS.—The Board of Di-
rectors of the Corporation shall appoint a president and
vice president of the Corporation, and such other officers
as are provided for in the bylaws of the Corporation.
(b) APPOINTMENT OF EMPLOYEES.—The Board of
Directors shall appoint such other employees of the Cor-
poration as the Board considers necessary for the trans-
action of its business.
(c) COMPENSATION, DUTIES, AND REMOVAL.—
(1) IN GENERAL.—The Board of Directors shall
fix the compensation of all officers and employees of
the Corporation, define their duties, and provide a
system of management and organization to fix re-
sponsibility and promote efficiency.
(2) CONSIDERATIONS
IN
FIXING
COMPENSA-
TION.—No officer or employee of the Corporation
may receive pay in excess of the annual rate of basic
pay payable for level III of the Executive Schedule.
(d) PRINCIPLES GOVERNING PERSONNEL MANAGE-
MENT.—The Board shall ensure that the system of organi-
zation, compensation, and management for personnel is
consistent with the principles under section 2301(b) of
title 5, United States Code (regarding merit system prin-
ciples).
(e) APPLICABILITY
OF CERTAIN CIVIL SERVICE
LAWS.—The officers and employees of the Corporation
shall be appointed without regard to the provisions of title
5, United States Code, governing appointments in the
competitive service, and may be paid without regard to
the provisions of chapter 51 and subchapter III of chapter
53 of that title relating to classification and General
Schedule pay rates.
(f) USE OF FEDERAL AGENCIES.—In carrying out its
purposes, the Corporation may use information, services,
staff, and facilities of any executive agency, independent
agency, or department (including the Department of
Housing and Urban Development), with the consent of the
agency or department, and shall reimburse the agency or
department for the cost of such information, services,
staff, and facilities.
(g) INDEMNIFICATION.—The Corporation may pro-
vide for the indemnification of any officer, employee, con-
tractor, or agent of the Corporation on such terms as the
Corporation determines proper, except that, to the extent
that the Corporation self-insures for any indemnifica-
tion—
(1) the aggregate maximum amount of all in-
demnifications outstanding at any time shall not ex-
ceed 5 percent of the required capital level deter-
mined under section 1393 of the Federal Housing
Enterprises Financial Safety and Soundness Act of
1992 by the Director of the Office of Federal Hous-
ing Enterprise Oversight; and
(2) no more than $1,000,000 may be paid as
an indemnity for any single event.
SEC. 106. PROCUREMENT.
(a) IN GENERAL.—The Board shall establish an eco-
nomical and results-oriented system for procurement, sup-
ply, and disposition by the Corporation of personal prop-
erty and nonpersonal services, which shall include per-
formance measures and standards for determining the ex-
tent to which the Corporation’s procurement of property
and services satisfies the objective for which the procure-
ment was undertaken. The system shall be consistent with
the principles of impartiality and competitiveness.
(b) CONSIDERATION
OF FEDERAL PROCUREMENT
SYSTEM.—In establishing the system for procurement,
supply, and disposition under this subsection, the Board
shall take into consideration—
(1) the requirements under the Federal Prop-
erty and Administrative Services Act of 1949 and
the appropriateness or inappropriateness of adopting
identical or similar procedures for the Corporation;
and
(2) any experience of the Department of Hous-
ing and Urban Development in complying with such
Act in procurement, supply, and disposition activities
relating to the single family and multifamily mort-
gage insurance programs and health care facility
mortgage insurance programs under the National
Housing Act.
(c) EXEMPTION FROM FEDERAL PROPERTY AND AD-
MINISTRATIVE
SERVICE
ACT
PROVISIONS.—Section
602(d) of the Federal Property and Administrative Serv-
ices Act of 1949 (40 U.S.C. 474) is amended—
(1) in paragraph (20), by striking ‘‘and’’ at the
end;
(2) in paragraph (21), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(22) The Federal Housing Corporation.’’.
(d) EXEMPTION FROM PROCUREMENT PROTEST
SYSTEM.—Subchapter V of chapter 35 of title 31, United
States Code, relating to the procurement protest system,
shall not apply to the Corporation.
SEC. 107. FINANCIAL SAFETY AND SOUNDNESS.
The Director of the Office of Federal Housing Enter-
prise Oversight shall oversee the financial safety and
soundness of the Corporation, pursuant to subtitle F of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992.
SEC. 108. ANNUAL BUDGET, ANNUAL BUSINESS PLAN, AND
FEDERAL CREDIT REFORM PROCEDURES.
(a) ANNUAL BUSINESS PLAN.—The Corporation
shall establish a business plan on an annual basis and
shall make such plan available for review by the Congress
and the President. Such plan shall specify the product and
operational strategy of the Corporation, including plans
to address compliance with the safety and soundness re-
quirements applicable to the Corporation.
(b) SUBMISSION TO OFHEO.—For each year, the
Corporation shall submit the annual budget for the Cor-
poration prepared pursuant to section 9103 of title 31,
United States Code, and its annual business plan to the
Director of the Office of Federal Housing Enterprise
Oversight. Such submission shall be made by a date suffi-
cient to enable the Director to produce, pursuant to sec-
tion 1392(c) of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992, the credit subsidy cost
estimates that are required for the budget of the United
States Government under section 1105(a) of title 31,
United States Code.
(c) SUBMISSION TO OMB.—For purposes of inclusion
in annual United States Government budget referred to
in subsection (b), the Corporation shall submit its annual
budget and annual credit subsidy cost estimates produced
pursuant to section 1392(c) of the Federal Housing En-
terprises Financial Safety and Soundness Act of 1992 to
the Director of the Office of Management and Budget.
(d) RESERVES.—
(1) ESTABLISHMENT.—The Corporation may
establish any reserve that the Corporation deter-
mines is necessary for the business operations of the
Corporation.
(2) AMOUNTS.—The Corporation may hold as a
reserve in any financing account, as defined in sec-
tion 502 of the Congressional Budget Act of 1974,
such amounts as the Corporation considers nec-
essary to comply with the capital requirements es-
tablished for the Corporation under subtitle F of the
Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 and to fulfill the purposes of
this Act.
SEC. 109. INSPECTOR GENERAL.
Section 11 of the Inspector General Act of 1978 (5
U.S.C. App.) is amended—
(1) in paragraph (1), by inserting after ‘‘Fed-
eral Deposit Insurance Corporation;’’ the following:
‘‘the president of the Federal Housing Corpora-
tion;’’; and
(2) in paragraph (2)—
(A) by inserting after ‘‘Housing and Urban
Development (excluding the Federal Housing
Corporation)’’; and
(B) by inserting after ‘‘United States In-
formation Agency,’’ the following: ‘‘the Federal
Housing Corporation,’’.
SEC. 110. APPLICABILITY OF LAWS.
(a) GOVERNMENT CORPORATION CONTROL ACT.—
Section 9101(3) of title 31, United States Code, is amend-
ed by adding at the end the following new subparagraph:
‘‘(R) the Federal Housing Corporation.’’.
(b) TAX EXEMPT STATUS OF CORPORATION.—Sec-
tion 501(l) of the Internal Revenue Code of 1986 (26
U.S.C. 501(l)) is amended by adding at the end the follow-
ing new paragraph:
‘‘(4) The Federal Housing Corporation estab-
lished under the Federal Housing Corporation Char-
ter Act.’’.
(c) EXEMPTION
FROM
NOTICE
AND
COMMENT
RULEMAKING.—Any matter relating to mortgage insur-
ance, credit enhancement, or other business activities of
the Corporation authorized under this Act shall be consid-
ered a matter relating to agency management or personnel
or to public property, loans, grants, benefits, or contracts,
for purposes of section 553(a) of title 5, United States
Code.
(d) SUBSIDY LAYERING.—For purposes of section
102(d) of the Department of Housing and Urban Develop-
ment Reform Act of 1989, mortgage insurance and credit
enhancement under this Act may not be construed as as-
sistance within the jurisdiction of the Department.
(e) CONFORMING AMENDMENT RELATING TO USURY
EXEMPTION FOR VETERANS LOANS.—Section 3728 of
title 38, United States Code, is amended by inserting after
‘‘National Housing Act’’ the following: ‘‘, or are insured
or credit-enhanced under the Federal Housing Corpora-
tion Charter Act,’’.
SEC. 111. GAO EVALUATION.
(a) IN GENERAL.—The Comptroller General of the
United States shall conduct a study and submit a report
to the President and the Congress on—
(1) whether this Act provides sufficient author-
ity to permit the Corporation to accomplish its pub-
lic purposes efficiently and effectively, and in a safe
and sound manner;
(2) the impact of the limitations on business ac-
tivities as to mortgage amounts and aggregate com-
mitments, and any other statutory limitations, on
the current and anticipated business activity of the
Corporation; and
(3) whether the safety and soundness and other
requirements under this Act and the Federal Hous-
ing Enterprises Financial Safety and Soundness Act
of 1992 appropriately provide that the Corporation
will be operated in a safe and sound manner and will
fulfill the public purposes of its establishment.
(b) TIMING.—The report required by this section
shall be submitted on the third January 1st occurring
after the transition date under section 301.
SEC. 112. AUTHORIZATION OF APPROPRIATIONS.
(a) INITIAL CAPITALIZATION.—There is authorized
to be appropriated to the Corporation such sums as may
be necessary for the initial capitalization of the Corpora-
tion. Any amounts appropriated pursuant to this sub-
section shall remain available until expended.
(b) OPERATIONS.—There is authorized to be appro-
priated for each fiscal year to the Corporation, for the con-
duct of the operations of the Corporation under this
title—
(1) an amount not exceeding the amount of the
negative subsidy credited to the negative subsidy re-
ceipt account for the Corporation; and
(2) in addition to the amount under paragraph
(1), to the extent such amount is not sufficient for
such operations, such additional sums as may be
necessary.
Any amounts appropriated pursuant to this subsection are
authorized to remain available until expended.
(c) SEPARATE APPROPRIATIONS FOR SEPARATELY
AUTHORIZED ACTIVITIES.—
(1) IN GENERAL.—There are authorized to be
appropriated such sums as may be necessary, which
are authorized to remain available without fiscal
year limitation, for the Corporation to carry out any
program or activity the conduct of which is sepa-
rately authorized under a Federal law.
(2) LIMITATION OF ACTIVITIES.—The Corpora-
tion may not undertake any program or activity de-
scribed in paragraph (1) if the Corporation has not
been appropriated amounts that the Secretary deter-
mines are sufficient to carry out such program or
activity.
(3) BUDGET
ACT
COMPLIANCE.—Any appro-
priations of amounts necessary to comply with the
Federal Credit Reform Act of 1990 for the Corpora-
tion to conduct any separately authorized program
or activity shall be enacted in appropriation laws.
(4) TREATMENT
OF
FHA
AUTHORITY.—Any
program or activity carried out by the Corporation
pursuant to transfer by the Secretary of Housing
and Urban Development of authority existing under
a provision of law that was enacted before the date
of the enactment of this Act shall be considered a
separately authorized program or activity for pur-
poses of this subsection; except that the programs
referred to in section 201(d) shall not be considered
a separately authorized program.
(b) FUNDING OF CLAIMS.—Amounts credited to the
financing account of the Corporation, established pursu-
ant to title V of the Congressional Budget Act of 1974,
shall be permanently and indefinitely available for pay-
ment of any claim that the Corporation approves under
a contract of insurance or other credit enhancement in-
strument under this Act. To the extent that such amounts
are insufficient for such purpose, the Corporation may
borrow from the Treasury pursuant to title V of the Con-
gressional Budget Act of 1974.
TITLE II—BUSINESS OF
CORPORATION
SEC. 201. TRANSFER OF FHA SINGLE FAMILY HOUSING
BUSINESS.
(a) IN GENERAL.—After the transition date under
section 301—
(1) the Corporation shall carry out programs to
insure mortgages on single family and multifamily
housing and health care facilities, which shall be
subject to the same limitations under the National
Housing Act that are applicable to the mortgage in-
surance programs for such housing and facilities
carried out under such Act by the Secretary of
Housing and Urban Development;
(2) the Corporation may exercise any authority
and undertake any responsibility of the Secretary of
Housing and Urban Development under the Na-
tional Housing Act relating to providing mortgage
insurance described in paragraph (1), except that
any authority that requires an appropriation may be
conducted only to the extent that amounts are so ap-
propriated; and
(3) the Corporation shall manage any assets
and obligations transferred under subsection (b)
subject to the same limitations applicable to the Sec-
retary of Housing and Urban Development under
the National Housing Act (as amended by title IV
of this Act).
(b) TRANSFER OF ASSETS AND OBLIGATIONS.—The
Secretary of Housing and Urban Development, in con-
sultation with the Secretary of the Treasury, shall, to the
extent approved in appropriation Acts, transfer to the Cor-
poration, on or before the transition date, all assets and
obligations of the Secretary of Housing and Urban Devel-
opment relating to the programs for mortgage insurance
described in subsection (a)(1), including all assets and ob-
ligations of the Mutual Mortgage Insurance Fund under
section 202 of the National Housing Act, the General In-
surance Fund under section 519 of such Act, the Special
Risk Insurance Fund under section 238(b) of such Act,
and the Cooperative Management Housing Insurance
Fund under section 213(k) of such Act that are attrib-
utable to mortgage insurance for such housing and facili-
ties.
(c) CONTINUATION OF CONTRACTS.—This Act may
not be construed to affect the validity of any right, duty,
or obligation of the United States or other person arising
under or pursuant to any commitment or agreement law-
fully entered into under the National Housing Act before
the enactment of this Act. The provisions of this Act and
the National Housing Act shall continue to apply to any
such obligations to the same extent such provisions were
applicable before such enactment, except only that any ob-
ligation of the Secretary of Housing and Urban Develop-
ment transferred to the Corporation pursuant to sub-
section (b) shall be an obligation of the Corporation to
the same extent as if the Corporation had originally exe-
cuted such obligation.
(d) SELF-SUSTAINING OPERATION OF MMIF PRO-
GRAMS.—The Corporation shall take any actions nec-
essary to operate the mortgage insurance programs for
mortgages on single family housing that, under the Na-
tional Housing Act (as in effect on the date of the enact-
ment of this Act) are obligations of the Mutual Mortgage
Insurance Fund under section 202 of the National Hous-
ing Act, on a separate and insulated basis from other pro-
grams of the Corporation and in a manner that is self-
sustaining and does not require appropriations from the
Treasury.
(e) TERMINATION OF HUD MORTGAGE INSURANCE
AUTHORITY.—Notwithstanding any other provision of
law, after the transition date the Secretary of Housing and
Urban Development may not provide any insurance or
make any commitment to insure any mortgage for single
family or multifamily housing, or for health care facilities,
pursuant to title II of the National Housing Act.
SEC. 202. NEW LINES OF BUSINESS.
(a) AUTHORITY.—After the transition date the Cor-
poration may, subject to the requirements of this section,
section 203, and section 204 and only to the extent that
any amounts are made available in advance in appropria-
tion Acts specifically for carrying out such activities—
(1) provide mortgage insurance for mortgages
on single family housing and multifamily housing
and health care facilities that is not subject to the
limitations under the National Housing Act; and
(2) engage in any other method of enhancing
credit for mortgages involving single family or multi-
family housing or health care facilities.
In providing mortgage insurance and credit enhancement
under this subsection, the Corporation may provide full
or partial mortgage insurance and may enter into risk-
sharing agreements to apportion any losses under such ac-
tivities.
(b) APPROVAL.—The Corporation may not engage in
any activity under subsection (a) unless—
(1) such activity is within the authority pro-
vided under this Act for the Corporation and is spe-
cifically approved, as to the nature of the activity
and the scope of such activity, by a majority vote of
the Board of Directors; and
(2) the Director of the Office of Federal Hous-
ing Enterprise Oversight has specifically determined,
and notified the Board of Directors in writing, that
engaging in such activity will not cause the Corpora-
tion to violate the requirement under section 101(d)
and such activity is not likely to result in the Cor-
poration being classified as undercapitalized or sig-
nificantly undercapitalized, pursuant to section 1386
of the Federal Housing Enterprises Financial Safety
and Soundness Act of 1992.
SEC. 203. LIMITATIONS ON MORTGAGE AMOUNTS AND AG-
GREGATE BUSINESS ACTIVITY.
The Corporation shall be subject to the following limi-
tations on business activity:
(1) MORTGAGE AMOUNT LIMITATION FOR SIN-
GLE FAMILY HOUSING.—
(A) IN GENERAL.—To be eligible for mort-
gage insurance or other credit enhancement
under this Act, a mortgage shall involve a prin-
cipal obligation in an amount that does not ex-
ceed the lesser of—
(i) in the case of a 1-family residence,
95 percent of the median 1-family house
price in the area, as determined by the
Corporation; in the case of a 2-family resi-
dence, 107 percent of such median price;
in the case of a 3-family residence, 130
percent of such median price; or in the
case of a 4-family residence, 150 percent
of such median price; or
(ii) in the case of any residence for
fewer than five families, 100 percent of the
dollar amount limitation determined under
section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act for a resi-
dence of the applicable size.
(B) MINIMUM
AREA
LIMITATION.—Not-
withstanding subparagraph (A), the principal
obligation limitation in effect for any area
under this paragraph may not be less than the
greater of (i) the dollar amount limitation in ef-
fect under section 203(b)(2) of the National
Housing Act for the area on September 27,
1994, or (ii) 50 percent of the dollar amount
limitation determined under section 305(a)(2)
of the Federal Home Loan Mortgage Corpora-
tion Act for a residence of the applicable size.
(C) APPLICABILITY OF EXCEPTIONS.—Any
exceptions to the limit on principal obligations
set forth in section 203(b)(2)(A) of the Na-
tional Housing Act, as such section and such
exceptions exist as of the date of the enactment
of this Act, shall apply to the limitations set
forth in subparagraphs (A) and (B) of this
paragraph.
(2) MORTGAGE
AMOUNT
LIMITATIONS
FOR
MULTIFAMILY HOUSING AND HEALTH CARE FACILI-
TIES.—To be eligible for mortgage insurance or
other credit enhancement under this Act, a mort-
gage shall involve a principal obligation in an
amount that does not exceed—
ilies, communities, and markets underserved by the
conventional mortgage markets.
(6) The need to maintain the sound financial
condition of the Corporation.
(7) The relationship between the Corporation
and other public and private participants in the
mortgage credit market, their ability to meet unmet
housing needs, and how the Corporation can help
such participants to fulfill an increasing portion
such needs.
(e) INTERIM PUBLIC PURPOSE PERFORMANCE RE-
QUIREMENTS.—During the period beginning on the date
of the organization of the Corporation pursuant to this
Act and ending upon the applicability of the public pur-
pose performance requirements established under this sec-
tion, the Corporation shall comply with the following in-
terim public purpose performance requirements:
(1) UNDERSERVED
BORROWERS.—The Cor-
poration shall ensure that not less than 67 percent
of the total business of the Corporation in home pur-
chase mortgages in each fiscal year benefits first-
time homebuyers.
(2) UNDERSERVED AREAS.—
(A) IN GENERAL.—The Corporation shall
ensure that not less than 28 percent of the total
business of the Corporation in each fiscal year
benefits underserved areas in rural areas,
central cities, Native American lands, and other
areas.
(B) DEFINITION.—For purposes of this
paragraph, the term ‘‘underserved area’’ means
a census tract having—
(i) a median income equal to or less
than 80 percent of the area median in-
come; or
(ii) a median income equal to or less
than 120 percent of the area median in-
come and a minority population of 30 per-
cent or greater.
(3) UNDERSERVED RENTAL MARKETS AND RE-
LATED COMMUNITY NEEDS.—The Corporation shall
ensure that not less than 6 percent of the total busi-
ness of the Corporation in each fiscal year benefits
underserved renters, rental markets, and related
community needs, including—
(A) rental units for families with incomes
equal to or less than 60 percent of the area me-
dian income;
(B) single-room occupancy developments;
(C) assisted living developments;
(D) mixed-income developments;
(E) community health care centers and
hospitals;
(F) nursing homes; and
(G) small rental properties located in
disinvested areas.
(4) LOW- AND MODERATE-INCOME FAMILIES.—
The Corporation shall ensure that not less than 64
percent of the total business of the Corporation in
each fiscal year benefits low- and moderate-income
families.
For purposes of this subsection, percentages of the busi-
ness of the Corporation shall be determined based on the
number of units that are financed with credit enhance-
ment provided by the Corporation. The Corporation shall
be given partial credit toward compliance with the per-
formance requirements under this subsection, where ap-
propriate, to the extent that the financing of a mortgage
meeting a particular requirement is only partially attrib-
utable to credit enhancement provided by the Corporation.
(f) COMPLIANCE.—
(1) MONITORING.—The Secretary shall monitor
the compliance of the Corporation with the perma-
nent and interim performance requirements to as-
sess the Corporation’s public purpose performance.
(2) MEASUREMENT.—In determining compli-
ance with the public purpose performance require-
ments under this section, the Secretary—
(A) shall consider any single mortgage or
other instrument that is provided credit en-
hancement by the Corporation as contributing
to the achievement of each public purpose per-
formance requirement for which such mortgage
or other credit enhancement instrument may
qualify; and
(B) may take into consideration the num-
ber of housing units financed by any mortgage
or other instrument on housing that is provided
credit enhancement by the Corporation.
(g) AUTHORITY OF THE SECRETARY.—In connection
with overseeing the compliance of Corporation with the
permanent and interim public purpose performance re-
quirements of the Corporation, the Secretary may—
(1) obtain information from the Corporation
necessary to develop the public purpose performance
requirements under this section;
(2) modify the interim and permanent public
purpose performance requirements, as needed, based
upon the Secretary’s determination that macro-
economic or other conditions justify such modifica-
tion;
(3) obtain information from the Corporation
necessary to carry out the function under subsection
(f)(1) (relating to monitoring); and
(4) take appropriate actions if the Corporation
fails to comply with the requirements of this section,
taking into account the feasibility of compliance,
given macroeconomic or other circumstances justify-
ing the Corporation’s failure to comply.
(h) ANNUAL REPORT.—The Secretary shall submit
a report to Congress annually regarding the Corporation’s
performance as measured by the public purpose perform-
ance requirements.
TITLE III—TRANSITION
SEC. 301. TRANSITION DATE AND TRANSITION PERIOD.
For purposes of this Act, the following definitions
shall apply:
(1) TRANSITION DATE.—The term ‘‘transition
date’’ means the latter of the following dates:
(A) EARLIEST DATE.—The date that oc-
curs 1 year after the date of the enactment of
this Act.
(B) REQUIRED ACTIONS.—The first date
by which all of the following have occurred:
(i) The Corporation has submitted an
initial annual budget and business plan to
the Congress and the President that have
been approved by the President.
(ii) The Director of the Office of Fed-
eral Housing Enterprise Oversight has cer-
tified to the Congress and the President
that the Director has developed an interim
model under section 1393(a)(2) of the
Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 that is
sufficient for the Director’s purposes.
(iii) The Director of the Office of
Management and Budget has certified to
the Congress and the President that the
application of such interim model is con-
sistent with the Federal Credit Reform Act
of 1990.
(iv) The Director of the Office of
Management and Budget determines that
the staff, systems, and administrative in-
frastructure of the Corporation are suffi-
cient to permit the Corporation to fully
conduct the operation of its business.
(2) TRANSITION
PERIOD.—The term ‘‘transi-
tion period’’ means the period beginning upon the
organization of the Corporation under this Act and
ending upon the transition date.
SEC. 302. AUTHORITY DURING TRANSITION PERIOD.
During the transition period—
(1) the Secretary of Housing and Urban Devel-
opment shall, in consultation with the Corporation
and the Director of the Office of Management and
Budget, transfer to the Corporation such powers and
responsibilities of the Secretary to carry out the
mortgage insurance programs under the National
Housing Act relating to single family and multifam-
ily housing and health care facilities, at such times
as are appropriate for the Corporation to assume
such powers and responsibilities;
(2) the Corporation may carry out any power or
responsibility that the Secretary of Housing and
Urban Development transfers to the Corporation
consistent with paragraph (1) using the staff, sys-
tems, and administrative infrastructure that the
Corporation engages or acquires during the transi-
tion period, or the personnel and other resources of
the Secretary;
(3) the Corporation may incur any obligation
consistent with—
(A) the carrying out of a power transferred
to the Corporation pursuant to this Act or a re-
sponsibility assigned to the Corporation under
this Act; or
(B) the acquisition, engagement, or devel-
opment of staff, systems (including technology
to enhance its ability to engage in the business
of the Corporation authorized by the Act), and
administrative structure; and
(4) the Corporation may engage in any other
activity or undertake any responsibility (not includ-
ing any authority under section 202 (relating to new
lines of business)) that the Board of Directors deter-
mines to be consistent with the start-up of the Cor-
poration and the authority of the Corporation under
this Act.
SEC. 303. REPEAL OF FHA INSURANCE AUTHORITY.
Effective upon the expiration of the 5-year period
that begins upon the transition date, the following provi-
sions of law are repealed:
(1) Titles I and II of the National Housing Act.
(2) Section 801 of the Housing Act of 1954.
The repeal by this section of any provision of law shall
not affect any legally binding obligations entered into be-
fore the effective date of such repeal. Any funds or activi-
ties subject to a provision of law repealed by this section
shall continue to be governed by such provision as it was
in effect immediately before such repeal.
TITLE IV—PROVISIONS RELAT-
ING 
TO 
GOVERNMENT 
NA-
TIONAL MORTGAGE ASSOCIA-
TION AND OFFICE OF FED-
ERAL HOUSING ENTERPRISE
OVERSIGHT
SEC. 401. GNMA AUTHORITY.
Title III of the National Housing Act (12 U.S.C.
1716 et seq.) is amended—
(1) in section 301(5), by inserting after ‘‘feder-
ally owned mortgage portfolios’’ the following: ‘‘(in-
cluding any owned by the Federal Housing Corpora-
tion)’’;
(2) in the first sentence of section 306(g)(1)—
(A) by inserting ‘‘the Association, or by’’
after ‘‘shall (i) be issued by’’; and
(B) by striking ‘‘which are insured under
the National Housing Act’’ and all that follows
through the period and inserting ‘‘which are
guaranteed or insured under the National
Housing Act, the Federal Housing Corporation
Charter Act, title V of the Housing Act of
1949, section 184 of the Housing and Commu-
nity Development Act of 1992, the Servicemen’s
Readjustment Act of 1944, or chapter 37 of
title 38, United States Code.’’; and
(3) in section 306(g)(3)(A)(i), by inserting after
‘‘National Housing Act’’ the following: ‘‘or the Fed-
eral Housing Corporation Charter Act’’.
SEC. 402. SAFETY AND SOUNDNESS OVERSIGHT OF COR-
PORATION BY OFHEO.
(a) IN GENERAL.—Title XIII of the Housing and
Community Development Act of 1992 (Public Law 102–
550; 106 Stat. 4009) is amended—
(1) by redesignating sections 1391 through
1395 as sections 1385 through 1389, respectively;
and
(2) by adding at the end the following new sub-
title:
‘‘SUBTITLE 
F—SUPERVISION
AND REGULATION OF FED-
ERAL 
HOUSING 
CORPORA-
TION
‘‘SEC. 1391. AUTHORITY OF DIRECTOR.
‘‘(a) IN GENERAL.—The Director of the Office of
Federal Housing Enterprise Oversight shall supervise and
regulate the safety and soundness of the Federal Housing
Corporation (in this subtitle referred to as the ‘Corpora-
tion’).
‘‘(b) AUTHORITY EXCLUSIVE OF SECRETARY.—The
Director is authorized, without the review or approval of
the Secretary of Housing and Urban Development, to
make such determinations, take such actions, and perform
such functions as the Director determines necessary to
meet the responsibilities of the Director under this sub-
title.
‘‘(c) REVIEW
OF NEW BUSINESS
OF CORPORA-
TION.—The Director shall review any proposed new busi-
ness activity of the Corporation authorized under section
202(d) of the Federal Housing Corporation Charter Act
(relating to approval) by the Board of Directors of the
Corporation to determine whether such activity will cause
the Corporation to violate the requirement under section
101(d) of such Act (relating to self-supporting operation)
shall be consistent with the estimates of performance
generated by the risk-based capital model or the in-
terim model, as appropriate, developed in accordance
with section 1393(a), and with the President’s eco-
nomic forecast.
‘‘(2) UNIFIED ESTIMATES.—The annual credit
subsidy cost estimates produced under this sub-
section by the Director shall be reported on a unified
basis, which shall be based upon the Corporation’s
business as a whole.
‘‘(d) ANNUAL REPORT
ON SAFETY
AND SOUND-
NESS.—The Director shall submit an annual report to
Congress and the Director of the Office of Management
and Budget on the Corporation’s financial safety and
soundness, as measured pursuant to this subtitle.
‘‘SEC. 1393. CAPITAL REQUIREMENTS.
‘‘(a) REQUIRED CAPITAL LEVEL.—
‘‘(1) STRESS TEST.—
‘‘(A) IN GENERAL.—The Director shall de-
velop a risk-based capital model to determine
the amount of capital that is sufficient for the
Corporation to maintain positive capital during
a stressful period. The model shall incorporate
the assumptions under subparagraphs (B) and
(C). The required capital level for the Corpora-