437 
for project-based rental assistance under section 8 of 
the Act (42 U.S.C. 1437f) or a Rental Assistance Pay-
ment contract. 
SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS. 
(a) IN GENERAL.—Section 11 of the Federal Deposit 
Insurance Act (12 U.S.C. 1821) is amended— 
(1) in subsection (d)(2)— 
(A) in subsection (F), by striking ‘‘as re-
ceiver’’ and all that follows through clause (ii) 
and inserting the following: ‘‘as receiver, with re-
spect to any insured depository institution, orga-
nize a new depository institution under sub-
section (m) or a bridge depository institution 
under subsection (n).’’; 
(B) in subparagraph (G), by striking ‘‘new 
bank or a bridge bank’’ and inserting ‘‘new de-
pository institution or a bridge depository insti-
tution’’; 
(2) in subsection (e)(10)(C), by striking ‘‘bridge 
bank’’ each place that term appears and inserting 
‘‘bridge depository institution’’; 
(3) in subsection (m)— 
(A) in the subsection heading, by striking 
‘‘BANKS’’ and inserting ‘‘DEPOSITORY INSTITU-
TIONS’’;
438 
(B) by striking ‘‘new bank’’ each place that 
term appears and inserting ‘‘new depository in-
stitution’’; 
(C) by striking ‘‘such bank’’ each place that 
term appears and inserting ‘‘such depository in-
stitution’’; 
(D) in paragraph (1), by inserting ‘‘or Fed-
eral savings association’’ after ‘‘national bank’’; 
(E) in paragraph (6), by striking ‘‘only 
bank’’ and inserting ‘‘only depository institu-
tion’’; 
(F) in paragraph (9), by inserting ‘‘or the 
Director of the Office of Thrift Supervision, as 
appropriate’’ after ‘‘Comptroller of the Cur-
rency’’; 
(G) in paragraph (15), by striking ‘‘, but in 
no event’’ and all that follows through ‘‘located’’; 
(H) in paragraph (16)— 
(i) by inserting ‘‘or the Director of the 
Office of Thrift Supervision, as appro-
priate,’’ after ‘‘Comptroller of the Currency’’ 
each place that term appears; 
(ii) by striking ‘‘the bank’’ each place 
that term appears and inserting ‘‘the depos-
itory institution’’;
439 
(iii) by inserting ‘‘or Federal savings 
association’’ after ‘‘national bank’’ each 
place that term appears; 
(iv) by inserting ‘‘or Federal savings 
associations’’ after ‘‘national banks’’; and 
(v) by striking ‘‘Such bank’’ and in-
serting ‘‘Such depository institution’’; and 
(I) in paragraph (18), by inserting ‘‘or the 
Director of the Office of Thrift Supervision, as 
appropriate,’’ after ‘‘Comptroller of the Cur-
rency’’ each place that term appears; 
(4) in subsection (n)— 
(A) in the subsection heading, by striking 
‘‘BANKS’’ and inserting ‘‘DEPOSITORY INSTITU-
TIONS’’; 
(B) by striking ‘‘bridge bank’’ each place 
that term appears and inserting ‘‘bridge deposi-
tory institution’’; 
(C) by striking ‘‘bridge banks’’ each place 
that term appears (other than in paragraph 
(1)(A) and inserting ‘‘bridge depository institu-
tions’’; 
(D) by striking ‘‘bridge bank’s’’ each place 
that term appears and inserting ‘‘bridge deposi-
tory institutions’’;
440 
(E) by striking ‘‘insured bank’’ each place 
that term appears and inserting ‘‘insured deposi-
tory institution’’; 
(F) by striking ‘‘insured banks’’ each place 
that term appears and inserting ‘‘insured deposi-
tory institutions’’; 
(G) by striking ‘‘such bank’’ each place that 
term appears (other than in paragraph (4)(J)) 
and inserting ‘‘such depository institution’’; 
(H) by striking ‘‘the bank’’ each place that 
term appears and inserting ‘‘the depository in-
stitution’’; 
(I) in paragraph (1)(A)— 
(i) by inserting ‘‘, with respect to 1 or 
more insured banks, or the Director of the 
Office of Thrift Supervision, with respect to 
1 or more insured savings associations,’’ 
after ‘‘Comptroller of the Currency’’; 
(ii) by inserting ‘‘or Federal savings 
associations, as appropriate,’’ after ‘‘na-
tional banks’’; 
(iii) by inserting ‘‘or Federal savings 
associations, as applicable,’’ after ‘‘banking 
associations’’; and
443 
priate,’’ after ‘‘Comptroller of the Currency’’ 
each place that term appears; and 
(ii) by inserting ‘‘or Federal savings 
associations, as appropriate’’ after ‘‘na-
tional banks’’; and 
(Q) in paragraph (13), by striking ‘‘single 
bank’’ and inserting ‘‘single depository institu-
tion’’. 
(b) OTHER CONFORMING AMENDMENTS.— 
(1) FEDERAL
DEPOSIT
INSURANCE
ACT.—The 
Federal Deposit Insurance Act (12 U.S.C. 1811 et 
seq.) is amended— 
(A) in section 3 (12 U.S.C. 1813), by strik-
ing subsection (i) and inserting the following: 
‘‘(i) NEW DEPOSITORY INSTITUTION AND BRIDGE DE-
POSITORY INSTITUTION DEFINED.— 
‘‘(1) NEW DEPOSITORY INSTITUTION.—The term 
‘new depository institution’ means a new national 
bank or Federal savings association, other than a 
bridge depository institution, organized by the Cor-
poration in accordance with section 11(m). 
‘‘(2) BRIDGE
DEPOSITORY
INSTITUTION.—The 
term ‘bridge depository institution’ means a new na-
tional bank or Federal savings association organized
444 
by the Corporation in accordance with section 
11(n).’’; 
(B) in section 10(d)(5)(B) (12 U.S.C. 
1820(d)(5)(B)), by striking ‘‘bridge bank’’ and 
inserting ‘‘bridge depository institution’’; 
(C) in section 12 (12 U.S.C. 1822), by 
striking ‘‘new bank’’ each place that term ap-
pears and inserting ‘‘new depository institu-
tion’’;and 
(D) 
in 
section 
38(j)(2) 
(12 
U.S.C. 
1831o(j)(2)), by striking ‘‘bridge bank’’ and in-
serting ‘‘bridge depository institution’’. 
(2) FEDERAL
CREDIT
UNION
ACT.—Section 
207(c)(10)(C)(i) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(10)(C)(i)) is amended by striking 
‘‘bridge bank’’ and inserting ‘‘bridge depository insti-
tution’’. 
(3) TITLE 11.—Section 783 of title 11, United 
States Code, is amended by striking ‘‘bridge bank’’ 
and inserting ‘‘bridge depository institution’’. 
(4) TITLE 26.—Section 414(l)(2)(G) of the Inter-
nal Revenue Code of 1986, is amended by striking 
‘‘bridge bank’’ and inserting ‘‘bridge depository insti-
tution’’.
445 
SEC. 1605. SENSE OF THE SENATE. 
It is the sense of the Senate that in implementing or 
carrying out any provision of this Act, or any amendment 
made by this Act, the Senate supports a policy of noninter-
ference regarding local government requirements that the 
holder of a foreclosed property maintain that property. 
DIVISION B—FORECLOSURE 
PREVENTION 
SECTION 2001. SHORT TITLE. 
This division may be cited as the ‘‘Foreclosure Preven-
tion Act of 2008’’. 
SEC. 2002. EMERGENCY DESIGNATION. 
For purposes of Senate enforcement, all provisions of 
this division are designated as emergency requirements and 
necessary to meet emergency needs pursuant to section 204 
of S. Con. Res. 21 (110th Congress), the concurrent resolu-
tion on the budget for fiscal year 2008. 
TITLE I—FHA MODERNIZATION 
ACT OF 2008 
SEC. 2101. SHORT TITLE. 
This title may be cited as the ‘‘FHA Modernization 
Act of 2008’’.
446 
Subtitle A—Building American 
Homeownership 
SEC. 2111. SHORT TITLE. 
This subtitle may be cited as the ‘‘Building American 
Homeownership Act of 2008’’. 
SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION. 
(a) IN GENERAL.—Paragraph (2) of section 203(b)(2) 
of the National Housing Act (12 U.S.C. 1709(b)(2)) is 
amended— 
(1) by amending subparagraphs (A) and (B) to 
read as follows: 
‘‘(A) not to exceed the lesser of— 
‘‘(i) in the case of a 1-family residence, 
110 percent of the median 1-family house 
price in the area, as determined by the Sec-
retary; 
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 
determined 
under 
section 
305(a)(2) of the Federal Home Loan Mort-
gage 
Corporation 
Act 
(12 
U.S.C. 
1454(a)(2)) for a 2-, 3-, or 4-family resi-
dence, respectively, bears to the dollar
447 
amount limitation determined under such 
section for a 1-family residence; or 
‘‘(ii) 150 percent of the dollar amount 
limitation 
determined 
under 
section 
305(a)(2) of the Federal Home Loan Mort-
gage Corporation Act for a residence of ap-
plicable size, 
except that the dollar amount limitation in effect 
under this subparagraph for any size residence 
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 
determined under such section 305(a)(2) for a 
residence of the applicable size; and 
‘‘(B) not to exceed 100 percent of the ap-
praised value of the property.’’; and 
(2) in the matter following subparagraph (B), by 
striking the second sentence (relating to a definition 
of ‘‘average closing cost’’) and all that follows through 
‘‘section 3103A(d) of title 38, United States Code.’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect upon the expiration of the date 
described in section 202(a) of the Economic Stimulus Act 
of 2008 (Public Law 110–185).
448 
SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHI-
BITION OF SELLER-FUNDED DOWN PAYMENT 
ASSISTANCE. 
Paragraph (9) of section 203(b) of the National Hous-
ing Act (12 U.S.C. 1709(b)(9)) is amended to read as fol-
lows: 
‘‘(9) CASH INVESTMENT REQUIREMENT.— 
‘‘(A) IN
GENERAL.—A mortgage insured 
under this section shall be executed by a mort-
gagor who shall have paid, in cash, on account 
of the property an amount equal to not less than 
3.5 percent of the appraised value of the property 
or such larger amount as the Secretary may de-
termine. 
‘‘(B) FAMILY MEMBERS.—For purposes of 
this paragraph, the Secretary shall consider as 
cash or its equivalent any amounts borrowed 
from a family member (as such term is defined 
in section 201), subject only to the requirements 
that, in any case in which the repayment of such 
borrowed amounts is secured by a lien against 
the property, that— 
‘‘(i) such lien shall be subordinate to 
the mortgage; and 
‘‘(ii) the sum of the principal obliga-
tion of the mortgage and the obligation se-
450 
SEC. 2115. REHABILITATION LOANS. 
Subsection (k) of section 203 of the National Housing 
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 In-
surance Fund’’. 
SEC. 2116. 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 sub-
section (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
451 
(3) by transferring subsection (s) of section 203 
(as amended by paragraph (2) of this section) to sec-
tion 202, inserting such subsection after subsection 
(d) of section 202, and redesignating such subsection 
as subsection (e). 
SEC. 2117. INSURANCE OF CONDOMINIUMS. 
(a) IN GENERAL.—Section 234 of the National Hous-
ing Act (12 U.S.C. 1715y) is amended— 
(1) in subsection (c), in the first sentence— 
(A) by striking ‘‘and’’ before ‘‘(2)’’; and 
(B) by inserting before the period at the end 
the following: ‘‘, and (3) the project has a blanket 
mortgage insured by the Secretary under sub-
section (d)’’; 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 amended— 
(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
452 
(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 de-
tached, and an undivided interest in the common 
areas and facilities which serve the project’’. 
(c) DEFINITION OF REAL ESTATE.—Section 201 of the 
National Housing Act (12 U.S.C. 1707) is amended by add-
ing at the end the following new subsection: 
‘‘(g) The term ‘real estate’ means land and all natural 
resources and structures permanently affixed to the land, 
including residential buildings and stationary manufac-
tured 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. 2118. 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.—
453 
‘‘(1) ESTABLISHMENT.—Subject to the provisions 
of the Federal Credit Reform Act of 1990, there is 
hereby created a Mutual Mortgage Insurance 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 insured under sec-
tion 203. The Secretary may enter into commitments 
to guarantee, and may guarantee, such insured mort-
gages. 
‘‘(2) LIMIT ON LOAN GUARANTEES.—The author-
ity of the Secretary to enter into commitments to 
guarantee such insured mortgages shall be effective for 
any fiscal year only to the extent that the aggregate 
original principal loan amount under such mort-
gages, any part of which is guaranteed, does not ex-
ceed 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 an-
454 
nually to the Congress describing the results of such 
study and assessing the financial status of the Fund. 
The report shall recommend adjustments to under-
writing standards, program participation, or pre-
miums, if necessary, to ensure that the Fund remains 
financially sound. The report shall also include an 
evaluation of the quality control procedures and accu-
racy of information utilized in the process of under-
writing loans guaranteed by the Fund. Such evalua-
tion shall include a review of the risk characteristics 
of loans based not only on borrower information and 
performance, but on risks associated with loans origi-
nated or funded by various entities or financial insti-
tutions. 
‘‘(5) QUARTERLY REPORTS.—During each fiscal 
year, the Secretary shall submit a report to the Con-
gress for each calendar quarter, which shall specify 
for mortgages 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, categorized 
by risk;
457 
‘‘General Insurance Fund’’ and inserting ‘‘Mutual 
Mortgage Insurance Fund’’. 
(c) CONFORMING AMENDMENTS.—The National Hous-
ing Act is amended— 
(1) in section 205 (12 U.S.C. 1711), by striking 
subsections (g) and (h); and 
(2) in section 519(e) (12 U.S.C. 1735c(e)), by 
striking ‘‘203(b)’’ and all that follows through 
‘‘203(i)’’ and inserting ‘‘203, except as determined by 
the Secretary’’. 
SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVA-
TIONS. 
(a) HAWAIIAN HOME LANDS.—Section 247(c) of the 
National Housing Act (12 U.S.C. 1715z–12(c)) is amend-
ed— 
(1) by striking ‘‘General Insurance Fund estab-
lished in section 519’’ and inserting ‘‘Mutual Mort-
gage Insurance Fund’’; and 
(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
(b) INDIAN RESERVATIONS.—Section 248(f) of the Na-
tional Housing Act (12 U.S.C. 1715z–13(f)) is amended— 
(1) by striking ‘‘General Insurance Fund’’ the 
first place it appears through ‘‘519’’ and inserting 
‘‘Mutual Mortgage Insurance Fund’’; and
458 
(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
SEC. 2120. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) REPEALS.—The following provisions of the Na-
tional Housing Act are repealed: 
(1) Subsection (i) of section 203 (12 U.S.C. 
1709(i)). 
(2) Subsection (o) of section 203 (12 U.S.C. 
1709(o)). 
(3) Subsection (p) of section 203 (12 U.S.C. 
1709(p)). 
(4) Subsection (q) of section 203 (12 U.S.C. 
1709(q)). 
(5) Section 222 (12 U.S.C. 1715m). 
(6) Section 237 (12 U.S.C. 1715z–2). 
(7) Section 245 (12 U.S.C. 1715z–10). 
(b) DEFINITION OF AREA.—Section 203(u)(2)(A) of 
the National Housing Act (12 U.S.C. 1709(u)(2)(A)) is 
amended by striking ‘‘shall’’ and all that follows and insert-
ing ‘‘means a metropolitan statistical area as established 
by the Office of Management and Budget;’’. 
(c) DEFINITION OF STATE.—Section 201(d) of the Na-
tional Housing Act (12 U.S.C. 1707(d)) is amended by 
striking ‘‘the Trust Territory of the Pacific Islands’’ and
459 
inserting ‘‘the Commonwealth of the Northern Mariana Is-
lands’’. 
SEC. 2121. INSURANCE OF MORTGAGES. 
Subsection (n)(2) of section 203 of the National Hous-
ing Act (12 U.S.C. 1709(n)(2)) is amended— 
(1) in subparagraph (A), by inserting ‘‘or subor-
dinate mortgage or’’ before ‘‘lien given’’; and 
(2) in subparagraph (C), by inserting ‘‘or subor-
dinate mortgage or’’ before ‘‘lien’’. 
SEC. 2122. HOME EQUITY CONVERSION MORTGAGES. 
(a) IN GENERAL.—Section 255 of the National Hous-
ing Act (12 U.S.C. 1715z–20) is amended— 
(1) in subsection (b)(2), insert ‘‘ ‘real estate,’ ’’ 
after ‘‘ ‘mortgagor’,’’; 
(2) by amending subsection (d)(1) to read as fol-
lows: 
‘‘(1) have been originated by a mortgagee ap-
proved by the Secretary;’’; 
(3) by amending subsection (d)(2)(B) to read as 
follows: 
‘‘(B) has received adequate counseling, as 
provided in subsection (f), by an independent 
third party that is not, either directly or indi-
rectly, associated with or compensated by a 
party involved in—
460 
‘‘(i) originating or servicing the mort-
gage; 
‘‘(ii) funding the loan underlying the 
mortgage; or 
‘‘(iii) the sale of annuities, invest-
ments, long-term care insurance, or any 
other type of financial or insurance prod-
uct;’’; 
(4) in subsection (f)— 
(A) by striking ‘‘(f) INFORMATION SERVICES 
FOR MORTGAGORS.—’’ and inserting ‘‘(f) COUN-
SELING SERVICES AND INFORMATION FOR MORT-
GAGORS.—’’; and 
(B) by amending the matter preceding 
paragraph (1) to read as follows: ‘‘The Secretary 
shall provide or cause to be provided adequate 
counseling for the mortgagor, as described in 
subsection (d)(2)(B). Such counseling shall be 
provided by counselors that meet qualification 
standards and follow uniform counseling proto-
cols. The qualification standards and counseling 
protocols shall be established by the Secretary 
within 12 months of the date of enactment of the 
Building American Homeownership Act of 2008. 
The protocols shall require a qualified counselor
461 
to discuss with each mortgagor information 
which shall include—’’ 
(5) in subsection (g), by striking ‘‘established 
under section 203(b)(2)’’ and all that follows through 
‘‘located’’ and inserting ‘‘limitation established under 
section 305(a)(2) of the Federal Home Loan Mortgage 
Corporation Act for a 1-family residence’’; 
(6) by striking subsection (l); 
(7) by redesignating subsection (m) as subsection 
(l); 
(8) by amending subsection (l), as so redesig-
nated, to read as follows: 
‘‘(l) FUNDING FOR COUNSELING.—The Secretary may 
use a portion of the mortgage insurance premiums collected 
under the program under this section to adequately fund 
the counseling and disclosure activities required under sub-
section (f), including counseling for those homeowners who 
elect not to take out a home equity conversion mortgage, 
provided that the use of such funds is based upon accepted 
actuarial principles.’’; and 
(9) by adding at the end the following new sub-
section: 
‘‘(m) AUTHORITY
TO
INSURE
HOME
PURCHASE 
MORTGAGE.—
463 
associated with any other financial or insurance 
activity; or 
‘‘(B) demonstrate to the Secretary that the 
mortgagee or other party maintains, or will 
maintain, firewalls and other safeguards de-
signed to ensure that— 
‘‘(i) individuals participating in the 
origination of the mortgage shall have no 
involvement with, or incentive to provide 
the mortgagor with, any other financial or 
insurance product; and 
‘‘(ii) the mortgagor shall not be re-
quired, directly or indirectly, as a condition 
of obtaining a mortgage under this section, 
to purchase any other financial or insur-
ance product. 
‘‘(2) APPROVAL OF OTHER PARTIES.—All parties 
that participate in the origination of a mortgage to 
be insured under this section shall be approved by the 
Secretary. 
‘‘(o) PROHIBITION AGAINST REQUIREMENTS TO PUR-
CHASE ADDITIONAL PRODUCTS.—The mortgagee or any 
other party shall not be required by the mortgagor or any 
other party to purchase an insurance, annuity, or other ad-
464 
ditional product as a requirement or condition of eligibility 
for insurance under subsection (c). 
‘‘(p) STUDY TO DETERMINE CONSUMER PROTECTIONS 
AND UNDERWRITING STANDARDS.—The Secretary shall 
conduct a study to examine and determine appropriate con-
sumer protections and underwriting standards to ensure 
that the purchase of products referred to in subsection (o) 
is appropriate for the consumer. In conducting such study, 
the Secretary shall consult with consumer advocates (in-
cluding recognized experts in consumer protection), indus-
try representatives, representatives of counseling organiza-
tions, and other interested parties.’’. 
(b) MORTGAGES FOR COOPERATIVES.—Subsection (b) 
of section 255 of the National Housing Act (12 U.S.C. 
1715z–20(b)) is amended— 
(1) in paragraph (4)— 
(A) by inserting ‘‘a first or subordinate 
mortgage or lien’’ before ‘‘on all stock’’; 
(B) by inserting ‘‘unit’’ after ‘‘dwelling’’; 
and 
(C) by inserting ‘‘a first mortgage or first 
lien’’ before ‘‘on a leasehold’’; and 
(2) in paragraph (5), by inserting ‘‘a first or 
subordinate lien on’’ before ‘‘all stock’’.
465 
(c) LIMITATION ON ORIGINATION FEES.—Section 255 
of the National Housing Act (12 U.S.C. 1715z–20), as 
amended by the preceding provisions of this section, is fur-
ther amended by adding at the end the following new sub-
section: 
‘‘(r) LIMITATION ON ORIGINATION FEES.—The Sec-
retary shall establish limits on the origination fee that may 
be charged to a mortgagor under a mortgage insured under 
this section, which limitations shall— 
‘‘(1) equal 1.5 percent of the maximum claim 
amount of the mortgage unless adjusted thereafter on 
the basis of— 
‘‘(A) the costs to the mortgagor; and 
‘‘(B) the impact of such fees on the reverse 
mortgage market; 
‘‘(2) be subject to a minimum allowable amount; 
‘‘(3) provide that the origination fee may be 
fully financed with the mortgage; 
‘‘(4) include any fees paid to correspondent 
mortgagees approved by the Secretary; and 
‘‘(5) have the same effective date as subsection 
(m)(2) regarding the limitation on principal obliga-
tion.’’. 
(d) STUDY REGARDING PROGRAM COSTS AND CREDIT 
AVAILABILITY.—
466 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study regarding the 
costs and availability of credit under the home equity 
conversion mortgages for elderly homeowners program 
under section 255 of the National Housing Act (12 
U.S.C. 1715z–20) (in this subsection referred to as the 
‘‘program’’). 
(2) PURPOSE.—The purpose of the study re-
quired under paragraph (1) is to help Congress ana-
lyze and determine the effects of limiting the amounts 
of the costs or fees under the program from the 
amounts charged under the program as of the date of 
the enactment of this title. 
(3) CONTENT OF REPORT.—The study required 
under paragraph (1) should focus on— 
(A) the cost to mortgagors of participating 
in the program; 
(B) the financial soundness of the program; 
(C) the availability of credit under the pro-
gram; and 
(D) the costs to elderly homeowners partici-
pating in the program, including— 
(i) 
mortgage 
insurance 
premiums 
charged under the program;
467 
(ii) up-front fees charged under the 
program; and 
(iii) margin rates charged under the 
program. 
(4) TIMING
OF
REPORT.—Not later than 12 
months after the date of the enactment of this title, 
the Comptroller General shall submit a report to the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Serv-
ices of the House of Representatives setting forth the 
results and conclusions of the study required under 
paragraph (1). 
SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM. 
Section 106(a)(2) of the Energy Policy Act of 1992 (42 
U.S.C. 12712 note) is amended— 
(1) by amending subparagraph (C) to read as 
follows: 
‘‘(C) COSTS OF IMPROVEMENTS.—The cost 
of cost-effective energy efficiency improvements 
shall not exceed the greater of— 
‘‘(i) 5 percent of the property value 
(not to exceed 5 percent of the limit estab-
lished under section 203(b)(2)(A)) of the 
National 
Housing 
Act 
(12 
U.S.C. 
1709(b)(2)(A); or
468 
‘‘(ii) 2 percent of the limit established 
under section 203(b)(2)(B) of such Act.’’; 
and 
(2) by adding at the end the following: 
‘‘(D) LIMITATION.—In any fiscal year, the 
aggregate number of mortgages insured pursuant 
to this section may not exceed 5 percent of the 
aggregate number of mortgages for 1- to 4-family 
residences insured by the Secretary of Housing 
and Urban Development under title II of the Na-
tional Housing Act (12 U.S.C. 1707 et seq.) dur-
ing the preceding fiscal year.’’. 
SEC. 2124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR 
BORROWERS WITHOUT SUFFICIENT CREDIT 
HISTORY. 
(a) ESTABLISHMENT.—Title II of the National Hous-
ing Act (12 U.S.C. 1707 et seq.) is amended by adding at 
the end the following new section: 
‘‘SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR 
BORROWERS WITHOUT SUFFICIENT CREDIT 
HISTORY. 
‘‘(a) ESTABLISHMENT.—The Secretary shall carry out 
a pilot program to establish, and make available to mortga-
gees, an automated process for providing alternative credit 
rating information for mortgagors and prospective mortga-
469 
gors under mortgages on 1- to 4-family residences to be in-
sured under this title who have insufficient credit histories 
for determining their creditworthiness. Such alternative 
credit rating information may include rent, utilities, and 
insurance payment histories, and such other information 
as the Secretary considers appropriate. 
‘‘(b) SCOPE.—The Secretary may carry out the pilot 
program under this section on a limited basis or scope, and 
may consider limiting the program to first-time home-
buyers. 
‘‘(c) LIMITATION.—In any fiscal year, the aggregate 
number of mortgages insured pursuant to the automated 
process established under this section may not exceed 5 per-
cent of the aggregate number of mortgages for 1- to 4-family 
residences insured by the Secretary under this title during 
the preceding fiscal year. 
‘‘(d) SUNSET.—After the expiration of the 5-year pe-
riod beginning on the date of the enactment of the Building 
American Homeownership Act of 2008, the Secretary may 
not enter into any new commitment to insure any mort-
gage, or newly insure any mortgage, pursuant to the auto-
mated process established under this section.’’. 
(b) GAO REPORT.—Not later than the expiration of 
the two-year period beginning on the date of the enactment 
of this subtitle, the Comptroller General of the United States
494 
(1) in subsection (a)(1), by striking ‘‘in excess of 
6 percent’’ the second place it appears and all that 
follows and inserting ‘‘in excess of 6 percent— 
‘‘(A) during the period of military service 
and one year thereafter, in the case of an obliga-
tion or liability consisting of a mortgage, trust 
deed, or other security in the nature of a mort-
gage; or 
‘‘(B) during the period of military service, 
in the case of any other obligation or liability.’’; 
and 
(2) by striking subsection (d) and inserting the 
following new subsection: 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) INTEREST.—The term ‘interest’ includes 
service charges, renewal charges, fees, or any other 
charges (except bona fide insurance) with respect to 
an obligation or liability. 
‘‘(2) OBLIGATION OR LIABILITY.—The term ‘obli-
gation or liability’ includes an obligation or liability 
consisting of a mortgage, trust deed, or other security 
in the nature of a mortgage.’’. 
(c) EFFECTIVE DATE; SUNSET.—
495 
(1) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of enact-
ment of this Act. 
(2) SUNSET.—The amendments made by sub-
section (a) shall expire on December 31, 2010. Effec-
tive January 1, 2011, the provisions of subsections (b) 
and (c) of section 303 of the Servicemembers Civil Re-
lief Act, as in effect on the day before the date of the 
enactment of this Act, are hereby revived. 
TITLE III—EMERGENCY ASSIST-
ANCE FOR THE REDEVELOP-
MENT OF ABANDONED AND 
FORECLOSED HOMES 
SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOP-
MENT OF ABANDONED AND FORECLOSED 
HOMES. 
(a) DIRECT
APPROPRIATIONS.—There are appro-
priated out of any money in the Treasury not otherwise 
appropriated for the fiscal year 2008, $4,000,000,000, to 
remain available until expended, for assistance to States 
and units of general local government (as such terms are 
defined in section 102 of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5302)) for the redevelop-
ment of abandoned and foreclosed upon homes and residen-
tial properties.
496 
(b) ALLOCATION OF APPROPRIATED AMOUNTS.— 
(1) IN GENERAL.—The amounts appropriated or 
otherwise made available to States and units of gen-
eral local government under this section shall be allo-
cated based on a funding formula established by the 
Secretary of Housing and Urban Development (in 
this title referred to as the ‘‘Secretary’’). 
(2) FORMULA
TO
BE
DEVISED
SWIFTLY.—The 
funding formula required under paragraph (1) shall 
be established not later than 60 days after the date of 
enactment of this section. 
(3) CRITERIA.—The funding formula required 
under paragraph (1) shall ensure that any amounts 
appropriated or otherwise made available under this 
section are allocated to States and units of general 
local government with the greatest need, as such need 
is determined in the discretion of the Secretary based 
on— 
(A) the number and percentage of home 
foreclosures in each State or unit of general local 
government; 
(B) the number and percentage of homes fi-
nanced by a subprime mortgage related loan in 
each State or unit of general local government; 
and
497 
(C) the number and percentage of homes in 
default or delinquency in each State or unit of 
general local government. 
(4) DISTRIBUTION.—Amounts appropriated or 
otherwise made available under this section shall be 
distributed according to the funding formula estab-
lished by the Secretary under paragraph (1) not later 
than 30 days after the establishment of such formula. 
(c) USE OF FUNDS.— 
(1) IN GENERAL.—Any State or unit of general 
local government that receives amounts pursuant to 
this section shall, not later than 18 months after the 
receipt of such amounts, use such amounts to pur-
chase and redevelop abandoned and foreclosed homes 
and residential properties. 
(2) PRIORITY.—Any State or unit of general 
local government that receives amounts pursuant to 
this section shall in distributing such amounts give 
priority emphasis and consideration to those metro-
politan areas, metropolitan cities, urban areas, rural 
areas, low- and moderate-income areas, and other 
areas with the greatest need, including those— 
(A) with the greatest percentage of home 
foreclosures;
498 
(B) with the highest percentage of homes fi-
nanced by a subprime mortgage related loan; 
and 
(C) identified by the State or unit of gen-
eral local government as likely to face a signifi-
cant rise in the rate of home foreclosures. 
(3) ELIGIBLE USES.—Amounts made available 
under this section may be used to— 
(A) establish financing mechanisms for pur-
chase and redevelopment of foreclosed upon 
homes and residential properties, including such 
mechanisms as soft-seconds, loan loss reserves, 
and shared-equity loans for low- and moderate- 
income homebuyers; 
(B) purchase and rehabilitate homes and 
residential properties that have been abandoned 
or foreclosed upon, in order to sell, rent, or rede-
velop such homes and properties; 
(C) establish land banks for homes that have 
been foreclosed upon; 
(D) demolish blighted structures; and 
(E) redevelop demolished or vacant prop-
erties. 
(d) LIMITATIONS.—
499 
(1) ON PURCHASES.—Any purchase of a fore-
closed upon home or residential property under this 
section shall be at a discount from the current market 
appraised value of the home or property, taking into 
account its current condition, and such discount shall 
ensure that purchasers are paying below-market value 
for the home or property. 
(2) SALE OF HOMES.—If an abandoned or fore-
closed upon home or residential property is pur-
chased, redeveloped, or otherwise sold to an individual 
as a primary residence, then such sale shall be in an 
amount equal to or less than the cost to acquire and 
redevelop or rehabilitate such home or property up to 
a decent, safe, and habitable condition. 
(3) REINVESTMENT OF PROFITS.— 
(A) PROFITS FROM SALES, RENTALS, AND 
REDEVELOPMENT.— 
(i) 5-YEAR REINVESTMENT PERIOD.— 
During the 5-year period following the date 
of enactment of this Act, any revenue gen-
erated from the sale, rental, redevelopment, 
rehabilitation, or any other eligible use that 
is in excess of the cost to acquire and rede-
velop (including reasonable development 
fees) or rehabilitate an abandoned or fore-