equivalent, an amount, if any, as the Secretary may 
determine based on factors determined by the Sec-
retary and commensurate with the likelihood of de-
fault. For’’. 
SEC. 6. MORTGAGE INSURANCE PREMIUMS. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)) is amended— 
(1) in paragraph (2), in the matter preceding 
subparagraph (A), by striking ‘‘Notwithstanding’’ 
and inserting ‘‘Except as provided in paragraph (3) 
and notwithstanding’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(3) FLEXIBLE RISK-BASED PREMIUMS.— 
‘‘(A) IN GENERAL.—For any mortgage insured 
by the Secretary under this title that is secured by 
a 1- to 4-family dwelling and for which the loan ap-
plication is received by the mortgagor on or after 
October 1, 2006, the Secretary may establish a 
mortgage insurance premium structure involving a 
single premium payment collected prior to the insur-
ance of the mortgage or periodic payments, or both, 
without regard to any maximum or minimum pre-
mium amounts set forth in this subsection. The rate 
of premium for such a mortgage may vary during 
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the mortgage term as long as the basis for deter-
mining the variable rate is established before the 
execution of the mortgage. The Secretary may 
change a premium structure established under this 
subparagraph but only to the extent that such 
change is not applied to any mortgage already exe-
cuted. 
‘‘(B) ESTABLISHMENT
AND
ALTERATION
OF 
PREMIUM STRUCTURE.—A premium structure shall 
be established or changed under subparagraph (A) 
only by providing notice to mortgagees and to the 
Congress, at least 30 days before the premium 
structure is established or changed. 
‘‘(C) CONSIDERATIONS FOR PREMIUM STRUC-
TURE.—When establishing a premium structure 
under subparagraph (A) or when changing such a 
premium structure, the Secretary shall consider the 
following: 
‘‘(i) The effect of the proposed premium 
structure on the Secretary’s ability to meet the 
operational goals of the Mutual Mortgage In-
surance Fund as provided in section 202(a). 
‘‘(ii) Underwriting variables. 
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‘‘(iii) The extent to which new pricing 
under the proposed premium structure has po-
tential for acceptance in the private market. 
‘‘(iv) The administrative capability of the 
Secretary to administer the proposed premium 
structure. 
‘‘(v) The effect of the proposed premium 
structure on the Secretary’s ability to maintain 
the availability of mortgage credit and provide 
stability to mortgage markets.’’. 
SEC. 7. REHABILITATION LOANS. 
Subsection (k) of section 203 of the National Hous-
ing Act (12 U.S.C. 1709(k)) is amended— 
(1) in paragraph (1), by striking ‘‘on’’ and all 
that follows through ‘‘1978’’; and 
(2) in paragraph (5)— 
(A) by striking ‘‘General Insurance Fund’’ 
the first place it appears and inserting ‘‘Mutual 
Mortgage Insurance Fund’’; and 
(B) in the second sentence, by striking the 
comma and all that follows through ‘‘General 
Insurance Fund’’. 
SEC. 8. DISCRETIONARY ACTION. 
The National Housing Act is amended— 
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(1) in subsection (e) of section 202 (12 U.S.C. 
1708(e))— 
(A) in paragraph (3)(B), by striking ‘‘sec-
tion 202(e) of the National Housing Act’’ and 
inserting ‘‘this subsection’’; and 
(B) by redesignating such subsection as 
subsection (f); 
(2) by striking paragraph (4) of section 203(s) 
(12 U.S.C. 1709(s)(4)) and inserting the following 
new paragraph: 
‘‘(4) the Secretary of Agriculture;’’; and 
(3) by transferring subsection (s) of section 203 
(as amended by paragraph (2) of this section) to 
section 202, inserting such subsection after sub-
section (d) of section 202, and redesignating such 
subsection as subsection (e). 
SEC. 9. INSURANCE OF CONDOMINIUMS. 
(a) IN GENERAL.—Section 234 of the National 
Housing Act (12 U.S.C. 1715y) is amended— 
(1) in subsection (c)— 
(A) in the first sentence— 
(i) by striking ‘‘and’’ before ‘‘(2)’’; 
and 
(ii) by inserting before the period at 
the end the following: ‘‘, and (3) the 
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project has a blanket mortgage insured by 
the Secretary under subsection (d)’’; and 
(B) in clause (B) of the third sentence, by 
striking ‘‘thirty-five years’’ and inserting ‘‘forty 
years’’; and 
(2) in subsection (g), by striking ‘‘, except 
that’’ and all that follows and inserting a period. 
(b) DEFINITION OF MORTGAGE.—Section 201(a) of 
the National Housing Act (12 U.S.C. 1707(a)) is amend-
ed— 
(1) in clause (1), by striking ‘‘or’’ and inserting 
a comma; and 
(2) by inserting before the semicolon the fol-
lowing: ‘‘, or (3) a first mortgage given to secure the 
unpaid purchase price of a fee interest in, or long- 
term leasehold interest in, a one-family unit in a 
multifamily project, including a project in which the 
dwelling units are attached, semi-detached, or de-
tached, and an undivided interest in the common 
areas and facilities which serve the project’’. 
SEC. 10. 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.— 
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‘‘(1) ESTABLISHMENT.—Subject to the provi-
sions of the Federal Credit Reform Act of 1990, 
there is hereby created a Mutual Mortgage Insur-
ance Fund (in this title referred to as the ‘Fund’), 
which shall be used by the Secretary to carry out the 
provisions of this title with respect to mortgages in-
sured under section 203. The Secretary may enter 
into commitments to guarantee, and may guarantee, 
such insured mortgages. 
‘‘(2) LIMIT ON LOAN GUARANTEES.—The au-
thority of the Secretary to enter into commitments 
to guarantee such insured mortgages shall be effec-
tive for any fiscal year only to the extent that the 
aggregate original principal loan amount under such 
mortgages, any part of which is guaranteed, does 
not exceed the amount specified in appropriations 
Acts for such fiscal year. 
‘‘(3) FIDUCIARY
RESPONSIBILITY.—The Sec-
retary has a responsibility to ensure that the Mutual 
Mortgage Insurance Fund remains financially sound. 
‘‘(4) 
ANNUAL
INDEPENDENT
ACTUARIAL 
STUDY.—The Secretary shall provide for an inde-
pendent actuarial study of the Fund to be conducted 
annually, which shall analyze the financial position 
of the Fund. The Secretary shall submit a report 
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annually to the Congress describing the results of 
such study and assessing the financial status of the 
Fund. The report shall recommend adjustments to 
underwriting standards, program participation, or 
premiums, if necessary, to ensure that the Fund re-
mains financially sound. 
‘‘(5) QUARTERLY REPORTS.—During each fiscal 
year, the Secretary shall submit a report to the Con-
gress for each quarter, which shall specify for mort-
gages that are obligations of the Fund— 
‘‘(A) the cumulative volume of loan guar-
antee commitments that have been made during 
such fiscal year through the end of the quarter 
for which the report is submitted; 
‘‘(B) the types of loans insured, cat-
egorized by risk; 
‘‘(C) any significant changes between ac-
tual and projected claim and prepayment activ-
ity; 
‘‘(D) projected versus actual loss rates; 
and 
‘‘(E) updated projections of the annual 
subsidy rates to ensure that increases in risk to 
the Fund are identified and mitigated by ad-
justments to underwriting standards, program 
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participation, or premiums, and the financial 
soundness of the Fund is maintained. 
The first quarterly report under this paragraph shall 
be submitted on the last day of the first quarter of 
fiscal year 2007, or upon the expiration of the 90- 
day period beginning on the date of the enactment 
of the Expanding American Homeownership Act of 
2006, whichever is later. 
‘‘(6) ADJUSTMENT OF PREMIUMS.—If, pursu-
ant to the independent actuarial study of the Fund 
required under paragraph (5), the Secretary deter-
mines that the Fund is not meeting the operational 
goals established under paragraph (8) or there is a 
substantial probability that the Fund will not main-
tain its established target subsidy rate, the Secretary 
may either make programmatic adjustments under 
section 203 as necessary to reduce the risk to the 
Fund, or make appropriate premium adjustments. 
‘‘(7) OPERATIONAL
GOALS.—The operational 
goals for the Fund are— 
‘‘(A) to charge borrowers under loans that 
are obligations of the Fund an appropriate pre-
mium for the risk that such loans pose to the 
Fund; 
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‘‘(B) to minimize the default risk to the 
Fund and to homeowners; 
‘‘(C) to curtail the impact of adverse selec-
tion on the Fund; and 
‘‘(D) to meet the housing needs of the bor-
rowers that the single family mortgage insur-
ance program under this title is designed to 
serve.’’. 
(b) OBLIGATIONS OF FUND.—The National Housing 
Act is amended as follows: 
(1) 
HOMEOWNERSHIP
VOUCHER
PROGRAM 
MORTGAGES.—In 
section 
203(v) 
(12 
U.S.C. 
1709(v))— 
(A) by striking ‘‘Notwithstanding section 
202 of this title, the’’ and inserting ‘‘The’’; and 
(B) by striking ‘‘General Insurance Fund’’ 
the first place such term appears and all that 
follows and inserting ‘‘Mutual Mortgage Insur-
ance Fund.’’. 
(2) HOME EQUITY CONVERSION MORTGAGES.— 
Section 255(i)(2)(A) of the National Housing Act 
(12 U.S.C. 1715z–20(i)(2)(A)) is amended by strik-
ing ‘‘General Insurance Fund’’ and inserting ‘‘Mu-
tual Mortgage Insurance Fund’’. 
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(c) CONFORMING
AMENDMENTS.—The National 
Housing 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. 11. 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) 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 
National Housing Act (12 U.S.C. 1715z–13) is amend-
ed— 
(1) by striking ‘‘General Insurance Fund’’ the 
first place it appears through ‘‘519’’ and inserting 
‘‘Mutual Mortgage Insurance Fund’’; and 
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(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
SEC. 12. 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 in-
serting ‘‘means a metropolitan statistical area as estab-
lished by the Office of Management and Budget;’’. 
(c) DEFINITION OF STATE.—Section 201(d) of the 
National Housing Act (12 U.S.C. 1707(d)) is amended by 
striking ‘‘the Trust Territory of the Pacific Islands’’ and 
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inserting ‘‘the Commonwealth of the Northern Mariana 
Islands’’. 
SEC. 13. HOME EQUITY CONVERSION MORTGAGES. 
Section 255 of the National Housing Act (12 U.S.C. 
1715z–20) is amended— 
(1) in subsection (g)— 
(A) by striking the first sentence; and 
(B) by striking ‘‘established under section 
203(b)(2)’’ and all that follows through ‘‘lo-
cated’’ and inserting ‘‘limitation established 
under section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act for a 1-family 
residence’’; 
(2) in subsection (i)(1)(C), by striking ‘‘limita-
tions’’ and inserting ‘‘limitation’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(n) AUTHORITY
TO
INSURE
HOME
PURCHASE 
MORTGAGE.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision in this section, the Secretary may insure, 
upon application by a mortgagee, a home equity con-
version mortgage upon such terms and conditions as 
the Secretary may prescribe, when the primary pur-
pose of the home equity conversion mortgage is to 
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enable an elderly mortgagor to purchase a 1-to 4 
family dwelling in which the mortgagor will occupy 
or occupies one of the units. 
‘‘(2) LIMITATION ON PRINCIPAL OBLIGATION.— 
A home equity conversion mortgage insured pursu-
ant to paragraph (1) shall involve a principal obliga-
tion that does not exceed the dollar amount limita-
tion determined under section 305(a)(2) of the Fed-
eral Home Loan Mortgage Corporation Act for a 
residence of the applicable size.’’. 
SEC. 14. CONFORMING LOAN LIMIT IN DISASTER AREAS. 
Section 203(h) of the National Housing Act (12 
U.S.C. 1709) is amended— 
(1) by inserting after ‘‘property’’ the following: 
‘‘plus any initial service charges, appraisal, inspec-
tion and other fees in connection with the mortgage 
as approved by the Secretary,’’; 
(2) by striking the third sentence (as added by 
chapter 7 of the Emergency Supplemental Appro-
priations Act of 1994 (Public Law 103–211; 108 
Stat. 12)); and 
(3) by adding at the end the following new sen-
tence: ‘‘In any case in which the single family resi-
dence to be insured under this subsection is within 
a jurisdiction in which the President has declared a 
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major disaster to have occurred, the Secretary is au-
thorized, for a temporary period not to exceed 36 
months from the date of such Presidential declara-
tion, to enter into agreements to insure a mortgage 
which involves a principal obligation of up to 100 
percent of the dollar limitation determined under 
section 305(a)(2) of the Federal Home Loan Mort-
gage Corporation Act for a single family residence, 
and not in excess of 100 percent of the appraised 
value of the property plus any initial service charges, 
appraisal, inspection and other fees in connection 
with the mortgage as approved by the Secretary.’’. 
SEC. 15. SAVINGS PROVISION. 
Any mortgage insured under title II of the National 
Housing Act before the date of enactment of this title shall 
continue to be governed by the laws, regulations, orders, 
and terms and conditions to which it was subject on the 
day before the date of the enactment of this Act. 
SEC. 16. IMPLEMENTATION. 
The Secretary of Housing and Urban Development 
shall by notice establish any additional requirements that 
may be necessary to immediately carry out the provisions 
of this title. The notice shall take effect upon issuance. 
Æ 
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