the receipt by the tenant of the 90-day no-
tice under subparagraph (A), except that 
nothing under this subsection shall affect 
the requirements for termination of any 
Federal- or State-subsidized tenancy or of 
any State or local law that provides longer 
time periods or other additional protections 
for tenants. 
(2) BONA FIDE LEASE OR TENANCY.—For pur-
poses of this subsection, a lease or tenancy shall be 
considered bona fide only if— 
(A) the mortgagor or the child, spouse, or 
parent of the mortgagor under the contract is 
not the tenant; 
(B) the lease or tenancy was the result of 
an arms-length transaction; and 
(C) the lease or tenancy requires the re-
ceipt of rent that is not substantially less than 
fair market rent for the property or the unit’s 
rent is reduced or subsidized due to a Federal, 
State, or local subsidy. 
(3) DEFINITION.—For purposes of this sub-
section, the term ‘‘federally-related mortgage loan’’ 
has the same meaning as in section 3 of the Real 
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Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2602). 
(b) EFFECT OF FORECLOSURE ON SECTION 8 TEN-
ANCIES.—Section 8(o)(7) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f(o)(7)) is amended— 
(1) by inserting before the semicolon in sub-
paragraph (C) the following: ‘‘and in the case of an 
owner who is an immediate successor in interest 
pursuant to foreclosure during the term of the lease 
vacating the property prior to sale shall not con-
stitute other good cause, except that the owner may 
terminate the tenancy effective on the date of trans-
fer of the unit to the owner if the owner— 
‘‘(i) will occupy the unit as a primary 
residence; and 
‘‘(ii) has provided the tenant a notice 
to vacate at least 90 days before the effec-
tive date of such notice.’’; and 
(2) by inserting at the end of subparagraph (F) 
the following: ‘‘In the case of any foreclosure on any 
federally-related mortgage loan (as that term is de-
fined in section 3 of the Real Estate Settlement Pro-
cedures Act of 1974 (12 U.S.C. 2602)) or on any 
residential real property in which a recipient of as-
sistance under this subsection resides, the immediate 
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successor in interest in such property pursuant to 
the foreclosure shall assume such interest subject to 
the lease between the prior owner and the tenant 
and to the housing assistance payments contract be-
tween the prior owner and the public housing agency 
for the occupied unit, except that this provision and 
the provisions related to foreclosure in subparagraph 
(C) shall not shall not affect any State or local law 
that provides longer time periods or other additional 
protections for tenants.’’. 
(c) RULEMAKING.—The Secretary of Housing and 
Urban Development shall, not later than the end of the 
12-month period beginning on the date of the enactment 
of this Act, issue regulations to carry out this section and 
the amendments made by this section, and the Secretary 
shall provide that such regulations take effect not later 
than the end of the 6-month period beginning on the date 
the regulations are issued. 
SEC. 5. RULE OF CONSTRUCTION. 
Nothing in this Act, or the amendments made by this 
Act, shall be construed as preempting any State or local 
law with respect to foreclosures that provides greater pro-
tections for consumers. 
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SEC. 6. RULEMAKING. 
Except with respect to section 4, the Bureau of Con-
sumer Financial Protection shall, not later than the end 
of the 12-month period beginning on the date of the enact-
ment of this Act, issue regulations to carry out this Act 
and the amendments made by this Act, and the Bureau 
shall provide that such regulations take effect not later 
than the end of the 6-month period beginning on the date 
the regulations are issued. 
Æ 
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