I
105TH CONGRESS
1ST SESSION
H. R. 2975
To establish the Federal Housing Corporation to provide mortgage credit
to families, communities, and markets underserved by the conventional
mortgage markets and ensure the stability of the national system for
mortgage finance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 8, 1997
Mr. VENTO introduced the following bill; which was referred to the Committee
on Banking and Financial Services
A BILL
To establish the Federal Housing Corporation to provide
mortgage credit to families, communities, and markets
underserved by the conventional mortgage markets and
ensure the stability of the national system for mortgage
finance, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Federal Housing Corporation Charter Act’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Definitions.
TITLE I—ORGANIZATION OF CORPORATION
Sec. 101. Establishment.
Sec. 102. Purposes.
Sec. 103. General powers.
Sec. 104. Board of directors.
Sec. 105. Officers and employees.
Sec. 106. Procurement.
Sec. 107. Financial safety and soundness.
Sec. 108. Annual budget, annual business plan, and Federal credit reform pro-
cedures.
Sec. 109. Inspector general.
Sec. 110. Applicability of laws.
Sec. 111. GAO evaluation.
Sec. 112. Authorization of appropriations.
TITLE II—BUSINESS OF CORPORATION
Sec. 201. Transfer of FHA single family housing business.
Sec. 202. New lines of business.
Sec. 203. Limitations on mortgage amounts and aggregate business activity.
Sec. 204. Public purpose performance requirements.
TITLE III—TRANSITION
Sec. 301. Transition date and transition period.
Sec. 302. Authority during transition period.
Sec. 303. Repeal of FHA insurance authority.
TITLE IV—PROVISIONS RELATING TO GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION AND OFFICE OF FEDERAL HOUSING
ENTERPRISE OVERSIGHT
Sec. 401. GNMA authority.
Sec. 402. Safety and soundness oversight of corporation by OFHEO.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that—
(1) although the United States today has the
world’s most efficient system for the delivery of
home mortgage finance, too many hard-working
Americans—especially younger families, low-income
families, and residents of inner cities and high-cost
areas—are unable to attain the American dream of
homeownership, often because they are unable to ac-
cumulate the savings necessary to buy a home or to
qualify for conventional mortgage financing;
(2) despite the entry of the private sector into
the rental housing mortgage capital delivery system,
that system generally fails to meet the needs of
many rental housing market niches, including the
needs of providers of affordable rental housing;
(3) for the past 60 years, the Federal Housing
Administration has made mortgage credit available
to families and communities typically underserved by
the conventional mortgage markets by pioneering
new products to supplement and expand the reach of
the private sector and by stabilizing regional and
capital markets during economic downturns;
(4) after 60 years of operating, the FHA is a
Fortune 
100-sized 
operation 
that 
has 
over
$380,000,000,000 of current outstanding insurance-
in-force, yet its effectiveness currently is limited by
inflexibility in products and pricing, overly bureau-
cratic structures and processes, inefficient resource
allocation, and outdated technology, systems, and
market strategies;
(5) there continues to be a need for a Federal
instrumentality to provide mortgage credit to fami-
lies, communities, and markets underserved by the
conventional mortgage markets and to ensure the
stability of this Nation’s system of housing finance;
(6) there continues to be a need for a Federal
instrumentality to facilitate private financing for
home ownership on reservations and in other Indian
areas and to assist in eliminating barriers to pri-
mary mortgage lending for housing on Native Amer-
ican lands, including resolving issues regarding the
trust lands, discrimination, and inapplicability of
standard underwriting criteria, must be eliminated;
and
(7) to operate effectively in the fast-paced hous-
ing finance industry, this instrumentality must be
organized as a streamlined, business-oriented, self-
sustaining, and accountable government corporation,
structured to achieve public purpose and safety and
soundness performance goals.
SEC. 3. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) CORPORATION.—The term ‘‘Corporation’’
means the Federal Housing Corporation established
under this Act.
(2) 
HEALTH
CARE
FACILITY.—The 
term
‘‘health care facility’’ means a hospital, nursing
home, or intermediate care facility.
(3) HOSPITAL.—The term ‘‘hospital’’ means a
facility—
(A) which provides community service for
inpatient medical care of the sick or injured (in-
cluding obstetric care);
(B) not more than 50 percent of the total
patient days of which during any year are cus-
tomarily assignable to the categories of chronic
convalescent and rest, drug and alcoholic, epi-
leptic, mentally deficient, mental, nervous and
mental, and tuberculosis; and
(C) that is a public facility, proprietary fa-
cility, or facility of a private nonprofit corpora-
tion, or association, licensed or regulated by the
State in which it is located (or, if there is no
State law providing for such licensing or regula-
tion by the State, by the municipality or other
political subdivision in which the facility is lo-
cated).
(4) INTERMEDIATE CARE FACILITY.—The term
‘‘intermediate care facility’’ means a proprietary fa-
cility or facility of a private nonprofit corporation or
association licensed or regulated by the State in
which it is located (or, if there is no State law pro-
viding for such licensing and regulation by the State,
by the municipality or other political subdivision in
which it is located) for the accommodation of per-
sons who, because of incapacitating infirmities, re-
quire minimum but continuous care but are not in
need of continuous medical or nursing services. The
term includes additional facilities as may be author-
ized by the Secretary for the nonresident care of el-
derly individuals and others who are able to live
independently but who require care during the day.
(5) MULTIFAMILY HOUSING.—The term ‘‘multi-
family housing’’ means a property on which there is
located a residence or project consisting of 5 or more
dwelling units.
(6) NATIVE
AMERICAN
GOVERNMENT.—The
term ‘‘Native American government’’ means the gov-
ernment of any Indian or Alaska native tribe, band,
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 In-
dian Tribe List Act of 1994.
(7) NURSING
HOME.—The term ‘‘nursing
home’’ means a public facility, proprietary facility,
or facility of a private nonprofit corporation or asso-
ciation, licensed or regulated by the State in which
it is located (or, if there is no State law providing
for such licensing and regulation by the State, by
the municipality or other political subdivision in
which it is located), for the accommodation of con-
valescents or other persons who are not acutely ill
and not in need of hospital care but who require
skilled nursing care and related medical services, in
which such nursing care and medical services are
prescribed by, or are performed under the general
direction of, persons licensed to provide such care or
services in accordance with the laws of the State
where the facility is located. The term includes addi-
tional facilities as may be authorized by the Sec-
retary for the nonresident care of elderly individuals
and others who are able to live independently but
who require care during the day.
(8) SINGLE FAMILY HOUSING.—The term ‘‘sin-
gle family housing’’ means a property on which there
is located a 1- to 4-family residence.
(9) STATE.—The term ‘‘State’’ means the
States of the United 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 (and lands subject to the ju-
risdiction of such governments).
TITLE I—ORGANIZATION OF
CORPORATION
SEC. 101. ESTABLISHMENT.
(a) IN GENERAL.—There is hereby established within
the Department of Housing and Urban Development a
body corporate without capital stock to be known as the
Federal Housing Corporation, which shall have succession
until dissolved by Act of Congress.
(b) GOVERNMENT CORPORATION.—The Corporation
is 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 Act.
(c) FEDERAL AGENCY.—
(1) IN GENERAL.—The Corporation shall be an
agency of the United States, except that the Cor-
poration shall not be considered an agency for pur-
poses of holding, managing, and disposing of assets
acquired by the Corporation under the provisions of
this title or title II.
(2) PROPERTY DISPOSITION AUTHORITY.—For
purposes of this subsection, the term ‘‘holding, man-
aging, 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
(C) at any time, upon default, foreclose on
any property secured by any assigned or trans-
ferred mortgage.
(d) SELF-SUPPORTING ENTITY.—The Corporation
shall operate and conduct its business as a self-supporting
entity.
(e) CORPORATE OFFICES
AND RESIDENCY.—The
Corporation shall maintain its principal office in the Dis-
trict of Columbia and shall be deemed, for purposes of
venue in civil actions, to be a resident of the District of
Columbia. The Corporation may establish other officers in
such other places as the Corporation considers appropriate
in the conduct of its business.
(f) TAX STATUS.—The Corporation, including its
franchise, activities, income, and assets, shall be exempt
from all taxation now or hereafter imposed by any taxing
authority in the United States, except that any real prop-
erty of the Corporation (other than real property that the
Corporation uses as an office) shall be subject to taxation
to the same extent according to its value as any taxing
authority taxes other real property.
(g) PROTECTION OF NAME.—
(1) IN GENERAL.—Except as provided in para-
graph (2), no person, except the body corporate es-
tablished under this section shall, after the date of
the enactment of this Act, use the words ‘‘Federal
Housing Corporation’’ or the initials ‘‘FHC’’ as the
name or part thereof under which such person shall
do business.
(2) EXCEPTION.—Paragraph (1) shall not
apply to any name under which business is being
done on the date of the enactment of this Act.
(3) JURISDICTION AND REMEDIES.—Violations
of paragraph (1) may be enjoined by any court of
general jurisdiction at the suit of the Corporation.
In any such suit, the Corporation may recover any
actual damages flowing from such violation, and, in
addition, shall be entitled to punitive damages (re-
gardless of the existence or nonexistence of actual
damages) of not more than $100 for each day dur-
ing which such violation is committed or repeated.
SEC. 102. PURPOSES.
The Corporation is established for the following pur-
poses:
(1) To expand the opportunities in the States
for single family homeownership and affordable rent-
al housing through the provision of mortgage insur-
ance and credit enhancement products and related
activities, which may include full or partial insurance
and insurance under risk-sharing agreements.
(2) To address the unmet single family and
multifamily housing credit needs of families and
communities in the States.
(3) To address the unmet health care facility
credit needs of families and communities in the
States.
(4) To supplement and expand private sector
housing and health care facility activity in the States
by better serving underserved markets, testing new
products, and filling gaps in the provision and deliv-
ery of mortgage credit.
(5) To deliver mortgage insurance and credit
enhancement products and provide other services in
the States in a non-discriminatory manner and to
administer its business in a manner that affirma-
tively furthers fair housing.
(6) To engage in research, development, and
testing of new products designed to make housing
and health care facility credit available to under-
served markets in the States, including primary
mortgage lending for dwellings located on Native
American lands.
(7) To promote liquidity and provide stability to
the housing and health care facility finance markets,
by continuing to provide mortgage insurance and
credit enhancement products in the States on a
sound basis during times of regional and national
economic downturn.
(8) To increase the capacity of localities,
States, and private and nonprofit entities to expand
access to decent and affordable housing and health
care facilities and to deliver credit for housing and
health care facility financing to families and commu-
nities in the United States.
SEC. 103. GENERAL POWERS.
To further the purposes of this Act, in accordance
with chapter 91 of title 31 of the United States Code (re-
lating to government corporations), the Corporation—
(1) may adopt, amend, and repeal bylaws, and
other written administrative guidance;
(2) may adopt, alter, and use a corporate seal,
which shall be judicially noted;
(3) may enhance and make commitments to en-
hance credit to the extent authorized under this Act,
including commitments to insure, reinsure, advance,
incur liabilities, pool loans, and enter into risk-shar-
ing arrangements to the extent provided in title II;
(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, make grants, and
make other agreements in its own name, with any
agency, public or private entity, or 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 Corporation determines are
necessary to manage the Corporation’s portfolio of
property, assets, and obligations;
(7) may, to the extent authorized under this
Act—
(A) create and supply any product or serv-
ice consistent with its corporate purposes;
(B) collect, generate, and make available
any information relevant to the provision of sin-
gle family and multifamily housing credit and
health care facility credit; and
(C) assess fees and charges for such prod-
ucts, information, and services in an amount, as
determined by the Corporation, that does not
exceed their value in the market and that per-
mits the Corporation to comply with the re-
quirements under section 101(d) (regarding
self-supporting operation), section 204 (regard-
ing public purposes), and subtitle F of the
Housing and Community Development Act of
1992 (regarding safety and soundness);
(8) may, in connection with supplying products
and services of the Corporation, provide or arrange
for pre- and post-purchase foreclosure prevention
counseling as determined appropriate by the Cor-
poration;
(9) may insulate any product, line, or service
from any other, by creating distinct insurance funds
or other devices to segregate or permit limitations on
liability for business activities or accounts;
(10) shall require, to the extent determined ap-
propriate by the Secretary, that each structure sub-
ject to a mortgage for which mortgage insurance is
provided by the Corporation be inspected to ensure
the structure does not pose health and safety risks;
(11) may qualify any person or entity to engage
in business with the Corporation and enforce and
impose penalties for the breach of any duties, obliga-
tions, and other commitments made by such persons
or entities;
(12) shall take actions necessary to administer
its business in a manner which is nondiscriminatory
and which affirmatively furthers fair housing;
(13) shall have the power, in its corporate
name, to sue and be sued, and to complain and de-
fend, in any court of competent jurisdiction, State or
Federal, but no attachment, garnishment, injunc-
tion, or other similar process, mesne or final, shall
be issued against the property of the Corporation or
against the Corporation with respect to its property,
and the Corporation shall not be liable for interest
prior to judgment, for punitive or exemplary dam-
ages, for penalties, or for claims based upon unjust
enrichment, quasi-contract, or contracts implied-in-
law, nor shall the Corporation be subject to trial by
jury;
(14) notwithstanding any other provision of
law—
(A) shall be an agency of the Federal Gov-
ernment, and the officers and employees of the
Corporation shall be officers and employees of
the Federal Government, for purposes of part
IV of title 28, United States Code;
(B) shall have all civil actions to which the
Corporation is a party deemed to arise under
the laws of the United States; and
(C) may, at any time before trial and with-
out bond or security, remove any civil or crimi-
nal action or proceeding in a State court to
which the Corporation is a party to the United
States district court for the District of Colum-
bia or to the United States district court with
jurisdiction over the place where the civil action
or proceeding is pending, by following any pro-
cedure for removal of actions in effect at the
time of such removal;
(15) may—
(A) accept and use voluntary and uncom-
pensated services and accept, hold, administer,
and use gifts and bequests of property, both
real and personal, for the purpose of aiding or
facilitating the work of the Corporation; and
(B) hold gifts and bequests of money and
the proceeds from sales of other property re-
ceived as gifts or bequests in a separate ac-
count, and such amounts shall be disbursed as
determined by the Corporation:
except that property accepted pursuant to this para-
graph, and the proceeds thereof, shall be used as
nearly as possible in accordance with the terms of
the gift or bequest and, for the purpose of Federal
income, estate, and gift taxes, property accepted
under this paragraph shall be considered as a gift or
bequest to or for the use of the United States;
(16) shall have any transaction in which it par-
ticipates be exempt from the terms of any State or
other law or prohibition against payment of usurious
interest;
(17) may act as a fiduciary in connection with
any of its undertakings;
(18) may foreclose any single family and multi-
family housing mortgages held by the Corporation
pursuant to the same procedures applicable to the
Secretary under the Single Family Mortgage Fore-