112 
‘‘(b) STANDARD FOR REDUCTION.—The Director may 
reduce the level for a goal pursuant to such a petition only 
if— 
‘‘(1) market and economic conditions or the fi-
nancial condition of the enterprise require such ac-
tion; or 
‘‘(2) efforts to meet the goal would result in the 
constraint of liquidity, over-investment in certain 
market segments, or other consequences contrary to 
the intent of this subpart, or section 301(3) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1716(3)) or section 301(3) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1451 note), as applicable. 
‘‘(c) DETERMINATION.—The Director shall make a de-
termination regarding any proposed reduction within 30 
days of receipt of the petition regarding the reduction. The 
Director may extend such period for a single additional 15- 
day period, but only if the Director requests additional in-
formation from the enterprise. A denial by the Director to 
reduce the level of any goal under this section may be ap-
pealed to the United States District Court for the District 
of Columbia or the United States district court in the juris-
diction in which the headquarters of an enterprise is lo-
cated.’’. 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00112
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
113 
(b) CONFORMING AMENDMENTS.—The Housing and 
Community Development Act of 1992 is amended— 
(1) in section 1335(a) (12 U.S.C. 4565(a)), in 
the matter preceding paragraph (1), by striking ‘‘low- 
and moderate-income housing goal’’ and all that fol-
lows through ‘‘section 1334’’ and inserting ‘‘housing 
goals established under this subpart’’; and 
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), 
by striking ‘‘sections 1332, 1333, and 1334,’’ and in-
serting ‘‘this subpart’’. 
(c) DEFINITIONS.—Section 1303 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4502), as 
amended by the preceding provisions of this Act, is further 
amended— 
(1) in paragraph (22) (relating to the definition 
of ‘‘very low-income’’), by striking ‘‘60 percent’’ each 
place such term appears and inserting ‘‘50 percent’’; 
(2) by redesignating paragraphs (19) through 
(22) as paragraphs (23) through (26), respectively; 
(3) by inserting after paragraph (18) the fol-
lowing new paragraph: 
‘‘(22) RURAL AREA.—The term ‘rural area’ has 
the meaning given such term in section 520 of the 
Housing Act of 1949 (42 U.S.C. 1490), except that 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00113
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
114 
such term includes micropolitan areas and tribal 
trust lands.’’. 
(4) by redesignating paragraphs (13) through 
(18) as paragraphs (16) through (21), respectively; 
(5) by inserting after paragraph (12) the fol-
lowing new paragraph: 
‘‘(15) LOW-INCOME
AREA.—The term ‘low in-
come area’ means a census tract or block numbering 
area in which the median income does not exceed 80 
percent of the median income for the area in which 
such census tract or block numbering area is located, 
and, for the purposes of section 1332(a)(2), shall in-
clude families having incomes not greater than 100 
percent of the area median income who reside in mi-
nority census tracts.’’; 
(6) by redesignating paragraphs (11) and (12) 
as paragraphs (13) and (14), respectively; 
(7) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(12) EXTREMELY LOW-INCOME.—The term ‘ex-
tremely low-income’ means— 
‘‘(A) in the case of owner-occupied units, 
income not in excess of 30 percent of the area 
median income; and 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00114
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
115 
‘‘(B) in the case of rental units, income not 
in excess of 30 percent of the area median in-
come, with adjustments for smaller and larger 
families, as determined by the Secretary.’’; 
(8) by redesignating paragraphs (7) through (10) 
as paragraphs (8) through (11), respectively; and 
(9) by inserting after paragraph (6) the fol-
lowing new paragraph: 
‘‘(7) CONFORMING MORTGAGE.—The term ‘con-
forming mortgage’ means, with respect to an enter-
prise, a conventional mortgage having an original 
principal obligation that does not exceed the dollar 
limitation, in effect at the time of such origination, 
under, as applicable— 
‘‘(A) section 302(b)(2) of the Federal Na-
tional Mortgage Association Charter Act; or 
‘‘(B) section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act.’’. 
SEC. 137. DUTY TO SERVE UNDERSERVED MARKETS. 
(a) ESTABLISHMENT AND EVALUATION OF PERFORM-
ANCE.—Section 1335 of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4565) is amended— 
(1) in the section heading, by inserting ‘‘DUTY 
TO SERVE UNDERSERVED MARKETS AND’’ before 
‘‘OTHER’’; 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00115
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
116 
(2) by striking subsection (b); 
(3) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by inserting ‘‘and to carry out the duty under 
subsection (a) of this section’’ before ‘‘, each en-
terprise shall’’; 
(B) in paragraph (3), by inserting ‘‘and’’ 
after the semicolon at the end; 
(C) in paragraph (4), by striking ‘‘; and’’ 
and inserting a period; 
(D) by striking paragraph (5); and 
(E) by redesignating such subsection as sub-
section (b); 
(4) by inserting before subsection (b) (as so re-
designated by paragraph (3)(E) of this subsection) the 
following new subsection: 
‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— 
‘‘(1) DUTY.—In accordance with the purpose of 
the enterprises under section 301(3) of the Federal 
National Mortgage Association Charter Act (12 
U.S.C. 1716) and section 301(b)(3) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1451 note) to undertake activities relating to mort-
gages on housing for very low-, low-, and moderate- 
income families involving a reasonable economic re-
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00116
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
117 
turn that may be less than the return earned on other 
activities, each enterprise shall have the duty to in-
crease the liquidity of mortgage investments and im-
prove the distribution of investment capital available 
for mortgage financing for underserved markets. 
‘‘(2) UNDERSERVED
MARKETS.—To meet its 
duty under paragraph (1), each enterprise shall com-
ply with the following requirements with respect to 
the following underserved markets: 
‘‘(A) MANUFACTURED
HOUSING.—The en-
terprise shall lead the industry in developing 
loan products and flexible underwriting guide-
lines to facilitate a secondary market for mort-
gages on manufactured homes for very low-, low- 
, and moderate-income families. 
‘‘(B) AFFORDABLE
HOUSING
PRESERVA-
TION.—The enterprise shall lead the industry in 
developing loan products and flexible under-
writing guidelines to facilitate a secondary mar-
ket to preserve housing affordable to very 
low-, low-, and moderate-income families, in-
cluding housing projects subsidized under— 
‘‘(i) the project-based and tenant-based 
rental assistance programs under section 8 
of the United States Housing Act of 1937; 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00117
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
118 
‘‘(ii) the program under section 236 of 
the National Housing Act; 
‘‘(iii) the below-market interest rate 
mortgage program under section 221(d)(4) 
of the National Housing Act; 
‘‘(iv) the supportive housing for the el-
derly program under section 202 of the 
Housing Act of 1959; 
‘‘(v) the supportive housing program 
for persons with disabilities under section 
811 of the Cranston-Gonzalez National Af-
fordable Housing Act; 
‘‘(vi) the programs under title IV of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11361 et seq.), but only perma-
nent supportive housing projects subsidized 
under such programs; and 
‘‘(vii) the rural rental housing pro-
gram under section 515 of the Housing Act 
of 1949. 
‘‘(C) RURAL
AND
OTHER
UNDERSERVED 
MARKETS.—The enterprise shall lead the indus-
try in developing loan products and flexible un-
derwriting guidelines to facilitate a secondary 
market for mortgages on housing for very 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00118
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
119 
low-, low-, and moderate-income families in 
rural areas, and for mortgages for housing for 
any other underserved market for very low-, low- 
, and moderate-income families that the Sec-
retary identifies as lacking adequate credit 
through conventional lending sources. Such un-
derserved markets may be identified by borrower 
type, market segment, or geographic area.’’; and 
(5) by adding at the end the following new sub-
section: 
‘‘(c) EVALUATION AND REPORTING OF COMPLIANCE.— 
‘‘(1) IN
GENERAL.—Not later than 6 months 
after the effective date under section 185 of the Fed-
eral Housing Finance Reform Act of 2007, the Direc-
tor shall establish a manner for evaluating whether, 
and the extent to which, the enterprises have complied 
with the duty under subsection (a) to serve under-
served markets and for rating the extent of such com-
pliance. Using such method, the Director shall, for 
each year, evaluate such compliance and rate the per-
formance of each enterprise as to extent of compli-
ance. The Director shall include such evaluation and 
rating for each enterprise for a year in the report for 
that year submitted pursuant to section 1319B(a). 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00119
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
120 
‘‘(2) SEPARATE EVALUATIONS.—In determining 
whether an enterprise has complied with the duty re-
ferred to in paragraph (1), the Director shall sepa-
rately evaluate whether the enterprise has complied 
with such duty with respect to each of the underserved 
markets identified in subsection (a), taking into con-
sideration— 
‘‘(A) the development of loan products and 
more flexible underwriting guidelines; 
‘‘(B) the extent of outreach to qualified loan 
sellers in each of such underserved markets; and 
‘‘(C) the volume of loans purchased in each 
of such underserved markets. 
‘‘(3) MANUFACTURED HOUSING MARKET.—In de-
termining whether an enterprise has complied with 
the duty under subparagraph (A) of subsection (a)(2), 
the Director may consider loans secured by both real 
and personal property.’’. 
(b) ENFORCEMENT.—Subsection (a) of section 1336 of 
the Housing and Community Development Act of 1992 (12 
U.S.C. 4566(a)) is amended— 
(1) in paragraph (1), by inserting ‘‘and with the 
duty under section 1335(a) of each enterprise with re-
spect to underserved markets,’’ before ‘‘as provided in 
this section’’; and 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00120
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS
121 
(2) by adding at the end of such subsection, as 
amended by the preceding provisions of this title, the 
following new paragraph: 
‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE MORT-
GAGE CREDIT TO UNDERSERVED MARKETS.—The duty 
under section 1335(a) of each enterprise to serve un-
derserved markets (as determined in accordance with 
section 1335(c)) shall be enforceable under this section 
to the same extent and under the same provisions that 
the housing goals established under this subpart are 
enforceable. Such duty shall not be enforceable under 
any other provision of this title (including subpart C 
of this part) other than this section or under any pro-
vision of the Federal National Mortgage Association 
Charter Act or the Federal Home Loan Mortgage Cor-
poration Act.’’. 
SEC. 138. MONITORING AND ENFORCING COMPLIANCE 
WITH HOUSING GOALS. 
(a) ADDITIONAL CREDIT FOR CERTAIN MORTGAGES.— 
Section 1336(a) of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4566(a)) is amended— 
(1) in paragraph (2), by inserting ‘‘, except as 
provided in paragraph (4),’’ after ‘‘which’’; and 
(2) by adding at the end the following new para-
graph: 
VerDate Aug 31 2005 
01:58 May 10, 2007
Jkt 059200
PO 00000
Frm 00121
Fmt 6652
Sfmt 6203
E:\BILLS\H1427.RH
H1427
ccoleman on PRODPC74 with BILLS