I 
113TH CONGRESS 
1ST SESSION H. R. 2767 
To protect American taxpayers and homeowners by creating a sustainable 
housing finance system for the 21st century. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 22, 2013 
Mr. GARRETT (for himself, Mr. HENSARLING, Mr. NEUGEBAUER, Mrs. CAP-
ITO, and Mr. MCHENRY) introduced the following bill; which was referred 
to the Committee on Financial Services, and in addition to the Committee 
on Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To protect American taxpayers and homeowners by creating 
a sustainable housing finance system for the 21st century. 
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 ‘‘Protecting American 
Taxpayers and Homeowners Act of 2013’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
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TITLE I—WIND-DOWN OF FANNIE MAE AND FREDDIE MAC 
Sec. 101. Short title. 
Sec. 102. Definitions. 
Sec. 103. Termination of current conservatorship; mandatory receivership. 
Sec. 104. Limitations on enterprise authority. 
Sec. 105. Modifications to increases in conforming loan limits. 
Sec. 106. Mandatory risk-sharing. 
Sec. 107. Limitation of enterprise mortgage purchases to qualified mortgages. 
Sec. 108. Prohibition relating to use of power of eminent domain. 
Sec. 109. Receiver’s discretionary authority to create receivership entity. 
Sec. 110. Authority of receiver to repeal enterprise charter. 
TITLE II—FHA REFORM 
Sec. 201. Short title. 
Sec. 202. Definitions. 
Subtitle A—Organization 
Sec. 211. Establishment. 
Sec. 212. Purposes. 
Sec. 213. General powers. 
Sec. 214. Board of Directors. 
Sec. 215. Officers and personnel. 
Sec. 216. Financial, underwriting, and operations systems. 
Sec. 217. Procurement. 
Sec. 218. Applicability of laws. 
Sec. 219. Evaluation. 
Sec. 220. Funding. 
Sec. 221. Effective date. 
Subtitle B—Business Authority and Requirements 
Sec. 231. Authority to carry out FHA and other business. 
Sec. 232. Eligible single-family mortgages. 
Sec. 233. Risk-sharing. 
Sec. 234. Limitation on mortgage insurance coverage. 
Sec. 235. Premiums. 
Sec. 236. Default and foreclosure statement. 
Sec. 237. Occupancy and rent limitations for multifamily mortgage insurance. 
Sec. 238. Effective date. 
Subtitle C—Financial Safety and Soundness 
Sec. 251. Authority of Director. 
Sec. 252. Budgets and business plans. 
Sec. 253. Annual business plan; use of GAAP. 
Sec. 254. Examinations, reports, and cost estimates. 
Sec. 255. Reimbursement of costs. 
Sec. 256. Mutual Mortgage Insurance Fund capital reserve. 
Sec. 257. Capital classifications and performance measures for Mutual Mort-
gage Insurance Fund. 
Sec. 258. Enforcement. 
Sec. 259. Capital reserve requirements for other funds. 
Sec. 260. Authority to establish temporary capital ratios in cases of nationwide 
countercyclical market adjustment. 
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Sec. 261. 7-year borrower suspension for foreclosure. 
Sec. 262. Borrower ineligibility upon second foreclosure. 
Sec. 263. Limitation on seller concessions. 
Sec. 264. Lender repurchase requirement. 
Sec. 265. Indemnification by mortgagees. 
Sec. 266. Prohibitions relating to use of power of eminent domain. 
Sec. 267. Residual income requirement. 
Sec. 268. Effective date. 
Subtitle D—Transition 
Sec. 281. Transition period. 
Sec. 282. Authority during transition period. 
Sec. 283. Advisory Board. 
Sec. 284. Transfer of HUD authority. 
Sec. 285. Wind-up of HUD affairs. 
Sec. 286. Continuation and coordination of certain actions. 
Sec. 287. Transfer and rights of HUD employees. 
Sec. 288. Transfer of property and facilities. 
Sec. 289. Effective date. 
Subtitle E—Related Amendments and Provisions 
Sec. 291. GNMA authority. 
Sec. 292. Repeal of certain FHA programs. 
Sec. 293. Conforming amendments. 
Sec. 294. Rule of construction. 
Sec. 295. Effective date. 
TITLE III—BUILDING A NEW MARKET STRUCTURE 
Subtitle A—National Mortgage Market Utility 
Sec. 301. Short title. 
Sec. 302. Findings and purposes. 
Sec. 303. Definitions. 
PART 1—ESTABLISHMENT AND AUTHORITY OF THE UTILITY 
Sec. 311. Establishment. 
Sec. 312. General powers; authorized and prohibited activities. 
Sec. 313. Transfer of ownership of Platform. 
Sec. 314. Funding. 
Sec. 315. Regulation, supervision, and enforcement. 
Sec. 316. Civil and criminal liability. 
PART 2—STANDARDS FOR QUALIFIED SECURITIES 
Sec. 321. Qualified securities. 
Sec. 322. Standards for qualified securities. 
Sec. 323. Liability for misleading statements. 
Sec. 324. Unlawful representations. 
Sec. 325. Contrary stipulations void. 
PART 3—NATIONAL MORTGAGE DATA REPOSITORY 
Sec. 331. Organization and operation. 
Sec. 332. Legal effect of registration with Repository. 
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Sec. 333. Grants to States; repayment. 
Sec. 334. Judicial review. 
Sec. 335. Transition provisions. 
PART 4—CONFORMING AMENDMENTS 
Sec. 341. Conforming amendment to Federal Home Loan Bank Act. 
Sec. 342. Conforming amendments to the Dodd-Frank Wall Street Reform and 
Consumer Protection Act. 
Sec. 343. Conforming amendments to Securities Act of 1933. 
Sec. 344. Conforming amendments to title 18, United States Code. 
Subtitle B—Covered Bonds 
Sec. 351. Short title. 
Sec. 352. Definitions. 
Sec. 353. Regulatory oversight of covered bond programs established. 
Sec. 354. Resolution upon default or insolvency. 
Sec. 355. Securities law provisions. 
Sec. 356. Miscellaneous provisions. 
TITLE IV—REMOVING BARRIERS TO NEW INVESTMENT 
Sec. 401. Basel III impact study. 
Sec. 402. Basel III Liquidity Coverage Ratio amendments. 
Sec. 403. Definition of points and fees. 
Sec. 404. Exclusion of issuers of asset-backed securities from covered funds. 
Sec. 405. Suspension of regulation AB II rulemaking. 
Sec. 406. Effective date of certain mortgage reform regulations. 
Sec. 407. Repeal of credit risk retention regulations. 
Sec. 408. Mortgages in qualified securities. 
Sec. 409. Mortgage loans held in portfolio. 
Sec. 410. Repeal of certain mortgage-related provisions. 
Sec. 411. Amendments to the Truth in Lending Act. 
Sec. 412. Financial Institutions Examination Fairness and Reform. 
Sec. 413. Notice of junior mortgage or lien. 
Sec. 414. Limitation on mortgages held by loan servicers. 
TITLE V—MISCELLANEOUS PROVISIONS 
Sec. 501. Preserving access to manufactured housing. 
Sec. 502. Common sense economic recovery. 
Sec. 503. Technical Amendments to Federal Home Loan Bank Act. 
Sec. 504. Preservation of attorney-client privilege for information provided to 
FHFA. 
Sec. 505. FHFA Liaison Membership in Federal Financial Institutions Exam-
ination Council. 
Sec. 506. Recognition of FHFA enforcement authority with regard to regulated 
entities. 
Sec. 507. Exception from Right to Financial Privacy Act for FHFA as conser-
vator or receiver. 
Sec. 508. Technical amendment to Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992. 
Sec. 509. Application of presumption to enterprise streamlined refinancings. 
Sec. 510. FHFA authority to regulate and examine contractual counterparties. 
Sec. 511. Election of directors of a merged Federal Home Loan Bank. 
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TITLE I—WIND-DOWN OF FANNIE 
MAE AND FREDDIE MAC 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘GSE Bailout Elimi-
nation and Taxpayer Protection Act’’. 
SEC. 102. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) CHARTER.—The term ‘‘charter’’ means— 
(A) with respect to the Federal National 
Mortgage Association, the Federal National 
Mortgage Association Charter Act (12 U.S.C. 
1716 et seq.); and 
(B) with respect to the Federal Home 
Loan Mortgage Corporation, the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 
1451 et seq.). 
(2) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Housing Finance Agen-
cy. 
(3) 
ENTERPRISE.—The 
term 
‘‘enterprise’’ 
means— 
(A) the Federal National Mortgage Asso-
ciation; and 
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(B) the Federal Home Loan Mortgage 
Corporation. 
SEC. 103. TERMINATION OF CURRENT CONSERVATORSHIP; 
MANDATORY RECEIVERSHIP. 
Upon the expiration of the 5-year period beginning 
upon the date of the enactment of this Act, the Director 
shall, with respect to each enterprise, immediately appoint 
the Federal Housing Finance Agency as receiver under 
section 1367 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 and carry out such 
receivership under the authority of such section. 
SEC. 104. LIMITATIONS ON ENTERPRISE AUTHORITY. 
(a) PORTFOLIO LIMITATIONS.—Subtitle B of title 
XIII of the Housing and Community Development Act of 
1992 (12 U.S.C. 4611 et seq.) is amended by adding at 
the end the following new section: 
‘‘SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF EN-
TERPRISES. 
‘‘(a) RESTRICTION.—Subject to subsection (b), no 
enterprise shall own, as of any applicable date in this sub-
section or thereafter, mortgage assets in excess of— 
‘‘(1) 
as 
of 
December 
31, 
2013, 
$550,000,000,000; or 
‘‘(2) as of December 31 of each year thereafter, 
85 percent of the aggregate amount of mortgage as-
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sets that the enterprise was permitted to own pursu-
ant to this section as of December 31 of the imme-
diately preceding calendar year. 
‘‘(b) LIMITATION.—In no event shall an enterprise be 
required 
under 
this 
section 
to 
own 
less 
than 
$250,000,000,000 in mortgage assets. 
‘‘(c) DEFINITION OF MORTGAGE ASSETS.—For pur-
poses of this section, the term ‘mortgage assets’ means, 
with respect to an enterprise, assets of such enterprise 
consisting of mortgages, mortgage loans, mortgage-related 
securities, participation certificates, mortgage-backed 
commercial paper, obligations of real estate mortgage in-
vestment conduits and similar assets, in each case to the 
extent such assets would appear on the balance sheet of 
such enterprise in accordance with generally accepted ac-
counting principles in effect in the United States as of 
September 7, 2008 (as set forth in the opinions and pro-
nouncements of the Accounting Principles Board and the 
American Institute of Certified Public Accountants and 
statements and pronouncements of the Financial Account-
ing Standards Board from time to time; and without giv-
ing any effect to any change that may be made after Sep-
tember 7, 2008, in respect of Statement of Financial Ac-
counting Standards No. 140 or any similar accounting 
standard).’’. 
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(b) EQUITABILITY IN GUARANTEE FEES.—Section 
1327 of Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4547) is amended 
by adding at the end the following new subsection: 
‘‘(f) EQUITABILITY IN GUARANTEE FEES.— 
‘‘(1) 
REQUIREMENT.—Notwithstanding 
any 
other provision of this section, the Director shall en-
sure, pursuant to the annual review conducted under 
paragraph (2), that each enterprise charges a guar-
antee fee, in connection with any mortgage guaran-
teed after the date of the enactment of the Pro-
tecting American Taxpayers and Homeowners Act of 
2013, in an amount that the Director determines is 
equivalent to the amount that the enterprise would 
charge if the enterprise were held to the same cap-
ital standards as private banks or financial institu-
tions. 
‘‘(2) ANNUAL DETERMINATION.—Not less often 
than annually, the Director shall review the guar-
antee fees charged by each enterprise and determine 
how such fees compare to the amount determined by 
the Director under paragraph (1). If the Director 
determines that such fees charged by an enterprise 
are less than such amount, the Director shall, by 
order, require the enterprise to increase such fees in 
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such amount as the Director determines necessary to 
comply with paragraph (1). 
‘‘(3) FLEXIBILITY IN DETERMINATION OF IN-
CREASE.—To determine the amount of any increase 
under this subsection, the Director shall establish a 
pricing mechanism as the Director considers appro-
priate, taking into consideration current market con-
ditions, including the current market share of an en-
terprise, and any data collected pursuant to section 
1601 of the Housing and Economic Recovery Act of 
2008 (12 U.S.C. 4514a).’’. 
(c) REPEAL
OF
MANDATORY
HOUSING
ACTIVI-
TIES.— 
(1) REPEAL OF HOUSING GOALS.—The Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 is amended by striking sections 
1331 through 1336 (12 U.S.C. 4561–6). 
(2) 
CONFORMING
AMENDMENTS.—Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 is amended— 
(A) in section 1303(28) (12 U.S.C. 
4502(28)), by striking ‘‘, and, for the purposes’’ 
and all that follows through ‘‘designated dis-
aster areas’’; 
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(B) in section 1324(b)(1)(A) (12 U.S.C. 
4544(b)(1)(A)), by striking clauses (i), (ii), and 
(iv); 
(C) 
in 
section 
1339(h) 
(12 
U.S.C. 
4569(h)), by striking paragraph (7); 
(D) in section 1341 (12 U.S.C. 4581)— 
(i) in subsection (a)— 
(I) in paragraph (1), by inserting 
‘‘or’’ after the semicolon at the end; 
(II) in paragraph (2), by striking 
the semicolon at the end and inserting 
a period; and 
(III) by striking paragraphs (3) 
and (4); and 
(ii) in subsection (b)(2)— 
(I) in subparagraph (A), by in-
serting ‘‘or’’ after the semicolon at the 
end; 
(II) by striking subparagraphs 
(B) and (C); and 
(III) by redesignating subpara-
graph (D) as subparagraph (B); 
(E) 
in 
section 
1345(a) 
(12 
U.S.C. 
4585(a))— 
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(i) in paragraph (1), by inserting ‘‘or’’ 
after the semicolon at the end; 
(ii) in paragraph (2), by striking the 
semicolon at the end and inserting a pe-
riod; and 
(iii) by striking paragraphs (3) and 
(4); and 
(F) in section 1371(a)(2) (12 U.S.C. 
4631(a)(2)), by striking ‘‘with any housing goal 
established under subpart B of part 2 of sub-
title A of this title, with section 1336 or 1337 
of this title,’’. 
(3) REPEAL OF HOUSING TRUST FUND.— 
(A) REPEAL.—The Federal Housing En-
terprises Financial Safety and Soundness Act 
of 1992 is amended by striking sections 1337 
and 1338 (12 U.S.C. 4567, 4568). 
(B) 
CONFORMING
AMENDMENTS.—The 
Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 is amended— 
(i) in section 1303(24)(B) (12 U.S.C. 
4502(24)(B)), by striking ‘‘1338 and’’; 
(ii) in section 1324(b)(1)(A) (12 
U.S.C. 4544(b)(1)(A)), as amended by the 
preceding provisions of this Act— 
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(I) by striking clause (iii); 
(II) by striking the dash after 
‘‘which’’ and inserting the text of 
clause (v) and a period; and 
(III) by striking clause (v); 
(iii) in section 1339(b)— 
(I) by striking paragraph (1); 
(II) by striking the dash after 
‘‘consist of’’ and inserting the text of 
paragraph (2) and a period; and 
(III) by striking paragraph (2); 
and 
(iv) in section 1345 (12 U.S.C. 4585), 
by striking subsection (f). 
SEC. 105. MODIFICATIONS TO INCREASES IN CONFORMING 
LOAN LIMITS. 
(a) FANNIE MAE.—Section 302(b)(2) of the Federal 
National Mortgage Association Charter Act (12 U.S.C. 
1717(b)(2)) is amended— 
(1) in the 8th sentence— 
(A) in inserting ‘‘or subtracting from’’ 
after ‘‘adding to’’; and 
(B) by inserting ‘‘or decrease, respectively’’ 
before the first comma; 
(2) by striking the 9th and 10th sentences; 
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(3) by striking the last sentence; 
(4) by inserting ‘‘(A)’’ after the paragraph des-
ignation; and 
(5) by adding at the end the following new sub-
paragraph: 
‘‘(B) HIGH-COST AREAS.— 
‘‘(i) MAXIMUM
ORIGINAL
PRINCIPAL
LIMITA-
TION.—Subject to clause (ii), the limitations estab-
lished pursuant to subparagraph (A) shall also be in-
creased, with respect to properties of a particular 
size located in any area for which 115 percent of the 
median house price for such size residence exceeds 
the limitation under subparagraph (A) for such size 
residence, to the lesser of— 
‘‘(I)(aa) for the first year beginning after 
the date of the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $20,000 in the case of a 1- 
family residence, $25,604 in the case of a 
2-family residence, $30,950 in the case of 
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a 3-family residence, and $38,463 in the 
case of a 4-family residence; 
‘‘(bb) for the second year beginning after 
the date of the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $40,000 in the case of a 1- 
family residence, $51,208 in the case of a 
2-family residence, $61,900 in the case of 
a 3-family residence, and $76,926 in the 
case of a 4-family residence; 
‘‘(cc) for the third year beginning after the 
date of the enactment of the Protecting Amer-
ican Taxpayers and Homeowners Act of 2013, 
the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $60,000 in the case of a 1- 
family residence, $76,812 in the case of a 
2-family residence, $92,850 in the case of 
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a 3-family residence, and $103,389 in the 
case of a 4-family residence; 
‘‘(dd) for the fourth year beginning after 
the date of the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $80,000 in the case of a 1- 
family residence, $102,416 in the case of a 
2-family residence, $123,800 in the case of 
a 3-family residence, and $153,852 in the 
case of a 4-family residence; and 
‘‘(ee) for the fifth year beginning after the 
date of the enactment of the Protecting Amer-
ican Taxpayers and Homeowners Act of 2013, 
the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $100,000 in the case of a 1- 
family residence, $128,020 in the case of a 
2-family residence, $154,750 in the case of 
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a 3-family residence, and $192,315 in the 
case of a 4-family residence; 
‘‘(II) the amount that is equal to 115 per-
cent of the median house price in such area for 
such size residence; or 
‘‘(III) the limitation in effect for such size 
residence for such area, pursuant to the last 
sentence of this paragraph as in effect imme-
diately before the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, as of the date of such enactment. 
‘‘(ii) 
PROHIBITION
ON
NEW
HIGH-COST 
AREAS.—The limitations established pursuant to 
subparagraph (A) may not be increased, with respect 
to properties of any size located in a particular area 
unless, as of the date of the enactment of the Pro-
tecting American Taxpayers and Homeowners Act of 
2013, such foregoing limitations in effect for such 
area for any size residence were determined under 
the authority provided in the last sentence of this 
paragraph, as in effect immediately before such en-
actment.’’. 
(b) FREDDIE MAC.—Section 305(a)(2) of the Fed-
eral Home Loan Mortgage Corporation Act (12 U.S.C. 
1454(a)(2)) is amended— 
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(1) in the 7th sentence— 
(A) in inserting ‘‘or subtracting from’’ 
after ‘‘adding to’’; and 
(B) by inserting ‘‘or decrease, respectively’’ 
before the first comma; and 
(2) by striking the 8th and 9th sentences; 
(3) by striking the last sentence; 
(4) by inserting ‘‘(A)’’ after the paragraph des-
ignation; and 
(5) by adding at the end the following new sub-
paragraph: 
‘‘(B) HIGH-COST AREAS.— 
‘‘(i) MAXIMUM
ORIGINAL
PRINCIPAL
LIMITA-
TION.—Subject to clause (ii), the limitations estab-
lished pursuant to subparagraph (A) shall also be in-
creased, with respect to properties of a particular 
size located in any area for which 115 percent of the 
median house price for such size residence exceeds 
the limitation under subparagraph (A) for such size 
residence, to the lesser of— 
‘‘(I)(aa) for the first year beginning after 
the date of the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, the difference between— 
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‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $20,000 in the case of a 1- 
family residence, $25,604 in the case of a 
2-family residence, $30,950 in the case of 
a 3-family residence, and $38,463 in the 
case of a 4-family residence; 
‘‘(bb) for the second year beginning after 
the date of the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $40,000 in the case of a 1- 
family residence, $51,208 in the case of a 
2-family residence, $61,900 in the case of 
a 3-family residence, and $76,926 in the 
case of a 4-family residence; 
‘‘(cc) for the third year beginning after the 
date of the enactment of the Protecting Amer-
ican Taxpayers and Homeowners Act of 2013, 
the difference between— 
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‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $60,000 in the case of a 1- 
family residence, $76,812 in the case of a 
2-family residence, $92,850 in the case of 
a 3-family residence, and $103,389 in the 
case of a 4-family residence; 
‘‘(dd) for the fourth year beginning after 
the date of the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, the difference between— 
‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $80,000 in the case of a 1- 
family residence, $102,416 in the case of a 
2-family residence, $123,800 in the case of 
a 3-family residence, and $153,852 in the 
case of a 4-family residence; and 
‘‘(ee) for the fifth year beginning after the 
date of the enactment of the Protecting Amer-
ican Taxpayers and Homeowners Act of 2013, 
the difference between— 
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‘‘(AA) 150 percent of the limitation 
under subparagraph (A) for such size resi-
dence; and 
‘‘(BB) $100,000 in the case of a 1- 
family residence, $128,020 in the case of a 
2-family residence, $154,750 in the case of 
a 3-family residence, and $192,315 in the 
case of a 4-family residence; 
‘‘(II) the amount that is equal to 115 per-
cent of the median house price in such area for 
such size residence; or 
‘‘(III) the limitation in effect for such size 
residence for such area, pursuant to the last 
sentence of this paragraph as in effect imme-
diately before the enactment of the Protecting 
American Taxpayers and Homeowners Act of 
2013, as of the date of such enactment. 
‘‘(ii) 
PROHIBITION
ON
NEW
HIGH-COST 
AREAS.—The limitations established pursuant to 
subparagraph (A) may not be increased, with respect 
to properties of any size located in a particular area 
unless, as of the date of the enactment of the Pro-
tecting American Taxpayers and Homeowners Act of 
2013, such foregoing limitations in effect for such 
area for any size residence were determined under 
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the authority provided in the last sentence of this 
paragraph, as in effect immediately before such en-
actment.’’. 
SEC. 106. MANDATORY RISK-SHARING. 
Subpart A of part 2 of subtitle A of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 is amended by adding after section 1327 (12 
U.S.C. 4547) the following new section: 
‘‘SEC. 1328. MANDATORY RISK-SHARING TRANSACTIONS. 
‘‘(a) IN GENERAL.—The Director shall require each 
enterprise to develop and undertake transactions involving 
the guarantee by the enterprises of securities and obliga-
tions based on or backed by mortgages on residential real 
properties designed principally for occupancy of from 1 to 
4 families that provide for private market participants to 
share or assume credit risk associated with such mort-
gages, as follows: 
‘‘(1) REQUIRED PERCENTAGE OF BUSINESS.— 
The Director shall require that not less than 10 per-
cent of the annual business of each enterprise (as 
measured in such manner as the Director shall de-
termine) in guaranteeing such securities and obliga-
tions involve such transactions. 
‘‘(2) MULTIPLE
TYPES
OF
TRANSACTIONS.— 
The Director shall require that in complying with 
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paragraph (1), each enterprise undertake multiple 
types of the various transactions and structures de-
scribed in subsection (b). 
‘‘(b) TYPES OF TRANSACTIONS.—The risk-sharing 
transactions referred to in subsection (a) may include 
transactions involving increased mortgage insurance re-
quirements, credit-linked notes and securities, senior and 
subordinated security structures, and such other struc-
tures and transactions as the Director considers appro-
priate to increase private market assumption of credit 
risk.’’. 
SEC. 107. LIMITATION OF ENTERPRISE MORTGAGE PUR-
CHASES TO QUALIFIED MORTGAGES. 
(a) FANNIE MAE.—Section 302(b) of the Federal 
National Mortgage Association Charter Act (12 U.S.C. 
1717(b)) is amended by adding at the end the following 
new paragraph: 
‘‘(7) Effective for mortgages with application dates 
on or after January 10, 2014, the corporation may only 
purchase, make commitments to purchase, service, sell, 
lend on the security of, or otherwise deal in a mortgage 
that is a qualified mortgage (as such term is defined in 
section 129C(b) of the Truth in Lending Act (15 U.S.C. 
1639c(b); as added by section 1412 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (124 
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Stat. 2145)), in accordance with the regulations issued by 
the Bureau of Consumer Financial Protection to carry out 
such section.’’. 
(b) FREDDIE MAC.—Section 305(a) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1454(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(6) Effective for mortgages with application dates 
on or after January 10, 2014, the Corporation may only 
purchase, make commitments to purchase, service, sell, 
lend on the security of, or otherwise deal in a mortgage 
that is a qualified mortgage (as such term is defined in 
section 129C(b) of the Truth in Lending Act (15 U.S.C. 
1639c(b); as added by section 1412 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (124 
Stat. 2145)), in accordance with the regulations issued by 
the Bureau of Consumer Financial Protection to carry out 
such section.’’. 
SEC. 108. PROHIBITION RELATING TO USE OF POWER OF 
EMINENT DOMAIN. 
(a) FANNIE MAE.—Subsection (b) of section 302 of 
the Federal National Mortgage Association Charter Act 
(12 U.S.C. 1717(b)) is amended by adding at the end the 
following new paragraph: 
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‘‘(7)(A) Notwithstanding any other provision of law, 
the corporation may not purchase or guarantee any mort-
gage that is secured by a structure or dwelling unit that 
is located within a county that contains any structure or 
dwelling unit that secures or secured a residential mort-
gage loan which mortgage loan was obtained by the State 
during the preceding 120 months by exercise of the power 
of eminent domain. 
‘‘(B) For purposes of this paragraph, the following 
definitions shall apply: 
‘‘(i) The term ‘residential mortgage loan’ means 
a mortgage loan that is evidenced by a promissory 
note and secured by a mortgage, deed of trust, or 
other security instrument on a residential structure 
or a dwelling unit in a residential structure. Such 
term includes a first mortgage loan or any subordi-
nate mortgage loan. 
‘‘(ii) The term ‘State’ includes the District of 
Columbia, the Commonwealth of Puerto Rico, and 
any territory or possession of the United States, and 
includes any agency or political subdivision of a 
State.’’. 
(b) FREDDIE MAC.—Subsection (a) of section 305 of 
the Federal Home Loan Mortgage Corporation Act (12 
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U.S.C. 1454(a)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(6)(A) Notwithstanding any other provision of law, 
the Corporation may not purchase or guarantee any mort-
gage that is secured by a structure or dwelling unit that 
is located within a county that contains any structure or 
dwelling unit that secures or secured a residential mort-
gage loan which mortgage loan was obtained by the State 
during the preceding 120 months by exercise of the power 
of eminent domain. 
‘‘(B) For purposes of this paragraph, the following 
definitions shall apply: 
‘‘(i) The term ‘residential mortgage loan’ means 
a mortgage loan that is evidenced by a promissory 
note and secured by a mortgage, deed of trust, or 
other security instrument on a residential structure 
or a dwelling unit in a residential structure. Such 
term includes a first mortgage or any subordinate 
mortgage. 
‘‘(ii) The term ‘State’ includes the District of 
Columbia, the Commonwealth of Puerto Rico, and 
any territory or possession of the United States, and 
includes any agency or political subdivision of a 
State.’’. 
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SEC. 109. RECEIVER’S DISCRETIONARY AUTHORITY TO 
CREATE RECEIVERSHIP ENTITY. 
Section 1367 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4617) is amended by striking subsection (i) and inserting 
the following: 
‘‘(i) RECEIVERSHIP ENTITY.— 
‘‘(1) AUTHORITY; ORGANIZATION.—The Agen-
cy, as receiver appointed pursuant to subsection (a), 
may establish a receivership entity in such form or 
structure as the Agency deems appropriate to meet 
the purposes of receivership and this section. 
‘‘(2) POWERS.—Upon creation of such receiver-
ship entity, the Agency may transfer to it any assets 
or liabilities of the regulated entity in default as the 
Agency, in its discretion, determines to be appro-
priate, and may authorize the receivership entity to 
perform any temporary function that the Agency, in 
its discretion, prescribes in accordance with this sec-
tion. The transfer of any assets or liabilities of a 
regulated entity for which the Agency has been ap-
pointed receiver shall be effective without any fur-
ther approval under Federal or State law, assign-
ment, or consent with respect thereto. Such author-
ity is in addition to any other power the Agency may 
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have as receiver or may confer on the receivership 
entity. 
‘‘(3) EXEMPTION
FROM
TAXATION.—Notwith-
standing any other provision of Federal or State 
law, any receivership entity established by the Agen-
cy pursuant to this section, its franchise, property 
and income, shall be exempt from all taxation now 
or hereafter imposed by the United States, by any 
territory, dependency, or possession thereof, or by 
any State, county, municipality, or local taxing au-
thority. 
‘‘(4) REGULATIONS.—The Agency may promul-
gate such regulations as the Agency determines to 
be necessary or appropriate to implement this sub-
section. 
‘‘(5) NO FEDERAL STATUS.—A receivership en-
tity established pursuant to this section shall not be 
an agency, establishment, or instrumentality of the 
United States.’’. 
SEC. 110. AUTHORITY OF RECEIVER TO REPEAL ENTER-
PRISE CHARTER. 
Section 1367 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4617) is amended by striking subsection (k) and inserting 
the following new subsection: 
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‘‘(k) REPEAL OF ENTERPRISE CHARTERS.— 
‘‘(1) FANNIE MAE.—Effective five years after 
the date of the enactment of the Protecting Amer-
ican Taxpayers and Homeowners Act of 2013, the 
charter of the Federal National Mortgage Associa-
tion is repealed and the Federal National Mortgage 
Association shall have no authority to conduct new 
business under such charter, except that the provi-
sions of such charter in effect immediately before 
such repeal shall continue to apply with respect to 
the rights and obligations of any holders of— 
‘‘(A) outstanding debt obligations of the 
Federal National Mortgage Association, includ-
ing any— 
‘‘(i) bonds, debentures, notes, or other 
similar instruments; 
‘‘(ii) capital lease obligations; or 
‘‘(iii) obligations in respect of letters 
of credit, bankers’ acceptances, or other 
similar instruments; or 
‘‘(B) mortgage-backed securities guaran-
teed by the Federal National Mortgage Associa-
tion. 
‘‘(2) FREDDIE MAC.—Effective five years after 
the date of the enactment of the Protecting Amer-
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ican Taxpayers and Homeowners Act of 2013, the 
charter of the Federal Home Loan Mortgage Cor-
poration is repealed and the Federal Home Loan 
Mortgage Corporation shall have no authority to 
conduct new business under such charter, except 
that the provisions of such charter in effect imme-
diately before such repeal shall continue to apply 
with respect to the rights and obligations of any 
holders of— 
‘‘(A) outstanding debt obligations of the 
Federal Home Loan Mortgage Corporation, in-
cluding any— 
‘‘(i) bonds, debentures, notes, or other 
similar instruments; 
‘‘(ii) capital lease obligations; or 
‘‘(iii) obligations in respect of letters 
of credit, bankers’ acceptances, or other 
similar instruments; or 
‘‘(B) mortgage-backed securities guaran-
teed by the Federal Home Loan Mortgage Cor-
poration. 
‘‘(3) EXISTING GUARANTEE OBLIGATIONS.— 
‘‘(A) EXPLICIT
GUARANTEE.—The full 
faith and credit of the United States is pledged 
to the payment of all amounts which may be re-
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quired to be paid under any obligation de-
scribed in paragraph (1) or (2). 
‘‘(B) CONTINUED DIVIDEND PAYMENTS.— 
Notwithstanding any other provision of law, 
provision 2(a) (relating to Dividend Payment 
Dates and Dividend Periods) and provision 2(c) 
(relating to Dividend Rates and Dividend 
Amount) of the Senior Preferred Stock Pur-
chase Agreement, or any provision of any cer-
tificate in connection with such Agreement cre-
ating or designating the terms, powers, pref-
erences, privileges, limitations, or any other 
conditions of the Variable Liquidation Pref-
erence Senior Preferred Stock of an enterprise 
issued pursuant to such Agreement— 
‘‘(i) shall not be amended, restated, or 
otherwise changed to reduce the rate or 
amount of dividends in effect pursuant to 
such Agreement as of the Third Amend-
ment to such Agreement dated August 17, 
2012, except that any amendment to such 
Agreement to facilitate the sale of assets of 
the enterprises shall be permitted; and 
‘‘(ii) shall remain in effect until the 
guarantee 
obligations 
described 
under 
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paragraphs (1)(B) and (2)(B) of this sub-
section are fully extinguished. 
‘‘(C) APPLICABILITY.—All guarantee fee 
amounts derived from the single-family mort-
gage guarantee business of the enterprises in 
existence as of five years after the date of the 
enactment of the Protecting American Tax-
payers and Homeowners Act of 2013 shall be 
deposited into the United States Treasury, for 
purposes of deficit reduction. 
‘‘(D) SENIOR
PREFERRED
STOCK
PUR-
CHASE
AGREEMENT
DEFINED.—For purposes 
of this paragraph, the term ‘Senior Preferred 
Stock Purchase Agreement’ means— 
‘‘(i) the Amended and Restated Senior 
Preferred 
Stock 
Purchase 
Agreement, 
dated September 26, 2008, as such Agree-
ment has been amended on May 6, 2009, 
December 24, 2009, and August 17, 2012, 
respectively, and as such Agreement may 
be further amended and restated, entered 
into between the Department of the Treas-
ury and each enterprise, as applicable; and 
‘‘(ii) any provision of any certificate in 
connection with such Agreement creating 
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or designating the terms, powers, pref-
erences, privileges, limitations, or any 
other conditions of the Variable Liquida-
tion Preference Senior Preferred Stock of 
an enterprise issued or sold pursuant to 
such Agreement.’’. 
TITLE II—FHA REFORM 
SEC. 201. SHORT TITLE. 
This title may be cited as the ‘‘FHA Reform and 
Modernization Act of 2013’’. 
SEC. 202. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) BOARD.—The term ‘‘Board’’ means the 
Board of Directors of the FHA established under 
section 214. 
(2) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Housing Finance Agen-
cy. 
(3) FHA.—The term ‘‘FHA’’ means the Fed-
eral Housing Administration established under this 
title. 
(4) FIRST-TIME HOMEBUYER.—The term ‘‘first- 
time homebuyer’’ means an individual who meets 
any of the following criteria: 
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(A) An individual, and his or her spouse, 
who has never had ownership in a principal res-
idence. 
(B) A single parent (as such term is de-
fined in section 956 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 
12713)) who has only owned a principal resi-
dence with a former spouse while married. 
(C) An individual who is a displaced home-
maker (as such term is defined in such section 
956 of the Cranston-Gonzalez National Afford-
able Housing Act) and has only owned a prin-
cipal residence with a spouse. 
(D) An individual who has only owned a 
principal residence not permanently affixed to a 
permanent foundation in accordance with appli-
cable regulations. 
(E) An individual who has only owned a 
property that was not in compliance with state, 
local or model building codes and which cannot 
be brought into compliance for less than the 
cost of constructing a permanent structure. 
(5) NATIVE
AMERICAN
GOVERNMENT.—The 
term ‘‘Native American government’’ means the gov-
ernment of any Indian or Alaska native tribe, band, 
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nation, pueblo, village or community that the Sec-
retary of the Interior acknowledges to exist as an In-
dian Tribe, pursuant to the Federally Recognized 
Indian Tribe List Act of 1994. 
(6) RESIDENTIAL
HEALTH
CARE
FACILITY.— 
The term ‘‘residential health care facility’’ includes 
a nursing home, a facility for long-term care, an in-
termediate care facility, a board and care home, an 
assisted living facility, a public health center, an out-
patient facility, and a rehabilitation facility. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(8) 
UNITED
STATES.—The 
term 
‘‘United 
States’’ includes the States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam, 
the Virgin Islands, American Samoa, and Native 
American governments. 
Subtitle A—Organization 
SEC. 211. ESTABLISHMENT. 
(a) IN GENERAL.—There is hereby established the 
Federal Housing Administration, which shall be a body 
corporate without capital stock and shall have succession 
until dissolved by Act of Congress. 
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(b) GOVERNMENT CORPORATION.—The FHA shall 
be established as a wholly owned Government corporation 
subject to chapter 91 of title 31, United States Code (com-
monly referred to as the Government Corporation Control 
Act), except as otherwise provided in this subtitle. 
(c) FEDERAL AGENCY.— 
(1) IN GENERAL.—The FHA shall be an agency 
of the United States, except that the FHA shall not 
be considered an agency for purposes of holding, 
managing, and disposing of assets acquired by the 
FHA under the provisions of this title or the Na-
tional Housing Act. 
(2) HOLDING, MANAGEMENT, AND
DISPOSAL 
AUTHORITY.—For purposes of this subsection, the 
term ‘‘holding, managing, and disposing of assets’’ 
includes the powers to— 
(A) deal with, complete, reconstruct, rent, 
renovate, modernize, insure, make contracts for 
the management of, establish suitable agencies 
for the management of, or exercise discretion to 
sell for cash or credit or lease, any acquired 
property; 
(B) pursue collection by way of com-
promise or otherwise all assigned and trans-
ferred claims; and 
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(C) at any time, upon default, foreclose on 
any property secured by any assigned or trans-
ferred mortgage. 
(d) SELF-SUFFICIENT ENTITY.—The FHA shall op-
erate and conduct its business as a self-sufficient entity 
in accordance with section 235(c). 
(e) CORPORATE OFFICES
AND RESIDENCY.—The 
FHA shall maintain its principal office in the District of 
Columbia and shall be deemed, for purposes of venue in 
civil actions, to be a resident of the District of Columbia. 
The FHA may establish other offices in such other places 
as the FHA considers appropriate in the conduct of its 
business. 
(f) TAX STATUS.—The FHA, including its franchise, 
activities, income, and assets, shall be exempt from all tax-
ation now or hereafter imposed by any taxing authority 
in the United States, except that any real property of the 
FHA (other than real property that the FHA uses as an 
office) shall be subject to taxation to the same extent ac-
cording to its value as any taxing authority taxes other 
real property. 
(g) PROTECTION OF NAME.— 
(1) PROHIBITION.—No person shall, except the 
body corporate established under this section, after 
the date of the enactment of this Act, use the words 
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‘‘Federal Housing Administration’’ or the initials 
‘‘FHA’’ as the name or part thereof under which 
such person shall do business. 
(2) ENFORCEMENT.—Violations of paragraph 
(1) may be enjoined by any court of general jurisdic-
tion at the suit of the FHA. In any such suit, the 
FHA may recover any actual damages resulting 
from such violation, and, in addition, shall be enti-
tled to punitive damages (regardless of the existence 
or nonexistence of actual damages) of not more than 
$100 for each day during which such violation is 
committed or repeated. 
SEC. 212. PURPOSES. 
The FHA is established for the following purposes: 
(1) To provide mortgage insurance and other 
credit enhancement and related activities, for— 
(A) single family homeownership to first- 
time homebuyers, low- and moderate-income 
homebuyers, homebuyers in areas subject to 
counter-cyclical markets or Presidentially de-
clared disasters; 
(B) the provision of affordable rental hous-
ing; and 
(C) the provision of residential health care 
facilities. 
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(2) To supplement private sector activity by 
serving hard-to-serve markets, developing new mort-
gage products, and filling gaps in the provision and 
delivery of mortgage credit. 
(3) To deliver housing mortgage insurance and 
credit enhancement and provide other services in a 
non-discriminatory manner. 
(4) To promote liquidity and provide stability to 
the single family and multifamily housing finance 
market, by continuing to provide mortgage insurance 
and credit enhancement on a sound basis during 
times of regional and national economic downturn. 
(5) To engage in research, development, and 
testing of new products designed to make single 
family and multifamily housing and residential 
health care facility credit available to hard-to-serve 
markets. 
(6) To establish uniformity in operations and 
risk management and loss mitigation in housing 
mortgage insurance and rural housing loan pro-
grams. 
SEC. 213. GENERAL POWERS. 
To further the purposes of this subtitle, in accordance 
with chapter 91 of title 31 of the United States Code (re-
lating to government corporations), the FHA— 
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(1) may adopt, amend, and repeal by-laws, and 
other written administrative guidance; 
(2) may adopt, alter, and use a corporate seal, 
which shall be judicially noted; 
(3) may insure, and make commitments to in-
sure mortgages, to the extent authorized under this 
title, and enhance and make commitments to other-
wise enhance credit, and in providing such insurance 
may reinsure, advance, incur liabilities, pool loans, 
and risk share; 
(4) may acquire, hold, use, improve, deal in, or 
dispose of, by any means, any interests in any real 
property or any personal property; 
(5) may execute contracts, and make other 
agreements in its own name, with any agency, public 
or private entity, or other person, and carry out any 
lawful requirement of such contracts, grants, or 
other agreements; 
(6) may take any actions, including the restruc-
turing of debt, that the FHA determines are nec-
essary to manage any portfolio (including the port-
folio of the FHA) of property, assets, and obliga-
tions; 
(7) may— 
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