I 
116TH CONGRESS 
1ST SESSION H. R. 1737 
To make housing more affordable, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 13, 2019 
Mr. RICHMOND (for himself, Mr. CUMMINGS, Ms. MOORE, Ms. LEE of Cali-
fornia, Ms. PRESSLEY, Ms. WILD, Mr. POCAN, Ms. NORTON, Mr. COHEN, 
Ms. TLAIB, Mr. RASKIN, Mr. KHANNA, Mr. KENNEDY, and Ms. 
BONAMICI) introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committees on Ways 
and Means, the Judiciary, Education and Labor, and Transportation and 
Infrastructure, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To make housing more affordable, 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘American Housing and Economic Mobility Act of 2019’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
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TITLE I—MAKING HOUSING MORE AFFORDABLE 
Sec. 101. Local housing innovation grants. 
Sec. 102. Investing in affordable housing infrastructure. 
Sec. 103. Conditions for the sale of real estate-owned properties and non-per-
forming loans. 
TITLE II—TAKING THE FIRST STEPS TO REVERSE THE LEGACY 
OF HOUSING DISCRIMINATION AND GOVERNMENT NEGLIGENCE 
Sec. 201. Down payment assistance program for communities formerly seg-
regated by law. 
Sec. 202. Formula grant program for communities that have not recovered 
from the financial crisis. 
Sec. 203. Strengthening the Community Reinvestment Act of 1977. 
Sec. 204. Amendments relating to credit union service to underserved areas. 
TITLE III—REMOVING BARRIERS THAT ISOLATE COMMUNITIES 
Sec. 301. Expanding rights under the Fair Housing Act. 
Sec. 302. Improving outcomes in housing assistance programs. 
TITLE IV—ESTATE TAX REFORM 
Sec. 401. Amendment to Internal Revenue Code of 1986. 
Sec. 402. Rate adjustment. 
Sec. 403. Required minimum 10-year term, etc., for grantor retained annuity 
trusts. 
Sec. 404. Certain transfer tax rules applicable to grantor trusts. 
Sec. 405. Elimination of generation-skipping transfer tax exemption for certain 
trusts. 
Sec. 406. Simplifying gift tax exclusion for annual gifts. 
TITLE I—MAKING HOUSING 
MORE AFFORDABLE 
SEC. 101. LOCAL HOUSING INNOVATION GRANTS. 
(a) DEFINITIONS.—In this section: 
(1) 
ELEMENTARY
SCHOOL; 
SECONDARY 
SCHOOL.—The terms ‘‘elementary school’’ and ‘‘sec-
ondary school’’ have the meanings given those terms 
in section 8101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7801). 
(2) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means— 
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(A) a State; 
(B) a unit of general local government; or 
(C) a metropolitan area. 
(3) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given the term in section 101 of the Higher 
Education Act of 1965 (20 U.S.C. 1001). 
(4) METROPOLITAN
AREA; STATE; UNIT
OF 
GENERAL LOCAL GOVERNMENT.—The terms ‘‘metro-
politan area’’, ‘‘State’’, and ‘‘unit of general local 
government’’ have the meanings given those terms in 
section 102 of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5302). 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(b) ESTABLISHMENT.—Not later than 1 year after 
the date of enactment of this Act, the Secretary shall es-
tablish a program to make grants to eligible entities 
that— 
(1) reform local land use restrictions to bring 
down the costs of producing affordable housing; and 
(2) remove unnecessary barriers to building af-
fordable units in their communities. 
(c) ELIGIBLE ACTIVITIES.—An eligible entity receiv-
ing a grant under this section may use funds to— 
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(1) carry out any of the activities described in 
section 105 of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5305); 
(2) carry out any of the activities permitted 
under the program for national infrastructure in-
vestments (commonly known as the ‘‘Better Utilizing 
Investments to Leverage Development (BUILD) dis-
cretionary grant program’’) authorized under title I 
of division L of the Consolidated Appropriations Act, 
2018 (Public Law 115–141) or a subsequent appro-
priations Act; or 
(3) modernize, renovate, or repair facilities used 
by public elementary schools, public secondary 
schools, and public institutions of higher education, 
including modernization, renovation, and repairs 
that— 
(A) promote physical, sensory, and envi-
ronmental accessibility; and 
(B) are consistent with a recognized green 
building rating system. 
(d) APPLICATION.— 
(1) IN GENERAL.—An eligible entity desiring a 
grant under this section shall submit to the Sec-
retary an application that demonstrates that the eli-
gible entity has carried out, or is in the process of 
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carrying out, initiatives that facilitate the expansion 
of the supply of well-located affordable housing. 
(2) ACTIVITIES.—Initiatives that meet the cri-
teria described in paragraph (1)— 
(A) include— 
(i) establishing ‘‘by-right’’ develop-
ment, which allows jurisdictions to admin-
istratively approve new developments that 
are consistent with their zoning code; 
(ii) revising or eliminating off-street 
parking requirements to reduce the cost of 
housing production; 
(iii) 
instituting 
measures 
that 
incentivize owners of vacant land to rede-
velop the space into affordable housing or 
other productive uses; 
(iv) revising minimum lot size require-
ments and bans or limits on multifamily 
construction to allow for denser and more 
affordable development; 
(v) instituting incentives to promote 
dense development, such as density bo-
nuses; 
(vi) passing inclusionary zoning ordi-
nances that require a portion of newly de-
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veloped units to be reserved for low- and 
moderate-income renters or homebuyers; 
(vii) streamlining regulatory require-
ments and shortening processes, reforming 
zoning codes, or other initiatives that re-
duce barriers to housing supply elasticity 
and affordability; 
(viii) 
allowing 
accessory 
dwelling 
units; 
(ix) using local tax incentives to pro-
mote development of affordable housing; 
and 
(x) implementing measures that pro-
tect tenants from harassment and displace-
ment, including access to counsel for ten-
ants facing eviction, the prohibition of evic-
tion except for just cause, and measures 
intended to prevent or mitigate sudden in-
creases in rents, or repealing laws that 
prevent localities from implementing those 
measures; and 
(B) do not include activities that alter or-
dinances that govern wage and hour laws, fam-
ily and medical leave laws, or protections for 
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workers’ health and safety, anti-discrimination, 
and right to organize. 
(e) LABOR LAWS.— 
(1) IN GENERAL.—All laborers and mechanics 
employed by contractors or subcontractors in the 
performance of construction work financed in whole 
or in part with a grant received under this section 
shall be paid wages at rates not less than those pre-
vailing on similar construction in the locality, as de-
termined by the Secretary of Labor in accordance 
with subchapter IV of chapter 31 of title 40, United 
States Code (commonly known as the ‘‘Davis-Bacon 
Act’’). 
(2) EXCEPTION.—Paragraph (1) shall not 
apply with respect to— 
(A) the rehabilitation of residential prop-
erty if the property contains less than 8 units; 
or 
(B) construction carried out by employees 
of the eligible entity receiving the grant under 
this section. 
(f) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$2,000,000,000 for each of fiscal years 2020 through 
2024. 
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SEC. 102. INVESTING IN AFFORDABLE HOUSING INFRA-
STRUCTURE. 
(a) HOUSING TRUST FUND.—Section 1338(a) of the 
Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4568(a)) is amended by add-
ing at the end the following: 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to the Hous-
ing Trust Fund $44,500,000,000 for each of fiscal 
years 2020 through 2029.’’. 
(b) CAPITAL MAGNET FUND.—Section 1339 of the 
Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4569) is amended by adding 
at the end the following: 
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to the Capital Magnet 
Fund $2,500,000,000 for each of fiscal years 2020 
through 2029.’’. 
(c) PUBLIC
HOUSING
CAPITAL
FUND.—Section 
9(c)(2)(B) of the United States Housing Act of 1937 (42 
U.S.C. 1437g(c)(2)(B)) is amended to read as follows: 
‘‘(B) CAPITAL FUND.—For allocations of 
assistance 
from 
the 
Capital 
Fund, 
$3,592,000,000 for fiscal year 2020.’’. 
(d) INDIAN HOUSING BLOCK GRANT PROGRAM.— 
Section 108 of the Native American Housing Assistance 
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and Self-Determination Act of 1996 (25 U.S.C. 4117) is 
amended— 
(1) by striking ‘‘such sums as may be necessary 
for each of fiscal years 2009 through 2013’’ and in-
serting ‘‘$2,500,000,000 for fiscal year 2020 and 
such sums as may be necessary for each of fiscal 
years 2021 through 2029’’; and 
(2) by striking the second sentence. 
(e) NATIVE HAWAIIAN HOUSING BLOCK GRANT PRO-
GRAM.—Section 824 of the Native American Housing As-
sistance and Self-Determination Act of 1996 (25 U.S.C. 
4243) is amended by striking ‘‘such sums as may be nec-
essary for each of fiscal years 2001, 2002, 2003, 2004, 
and 2005’’ and inserting ‘‘$8,000,000 for fiscal year 
2020’’. 
(f) RURAL HOUSING PROGRAMS.—Out of funds in 
the Treasury not otherwise appropriated, there is appro-
priated for fiscal year 2020— 
(1) to provide direct loans under section 502 of 
the Housing Act of 1949 (42 U.S.C. 1472), 
$140,000,000; 
(2) to provide assistance under section 514 of 
such Act (42 U.S.C. 1484), $28,000,000; 
(3) to provide assistance under section 515 of 
such Act (42 U.S.C. 1485), $180,000,000; 
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(4) to provide assistance under section 516 of 
such Act (42 U.S.C. 1486), $100,000,000; and 
(5) to provide grants under section 523 of such 
Act (42 U.S.C. 1490c), $75,000,000. 
(g) MIDDLE CLASS HOUSING EMERGENCY FUND.— 
(1) DEFINITION.—In this subsection, the term 
‘‘affordable rental housing unit’’ means a unit for 
which monthly rent is 30 percent or less than the 
monthly area median income. 
(2) ESTABLISHMENT.—The Secretary of Hous-
ing and Urban Development shall establish and 
manage a fund, to be known as the ‘‘Middle Class 
Housing Emergency Fund’’, which shall be funded 
with any amounts as may be appropriated, trans-
ferred, or credited to the Fund under any provision 
law. 
(3) GRANTS.—From amounts available in the 
fund established under paragraph (2), the Secretary 
of Housing and Urban Development shall award 
grants on a competitive basis to State housing fi-
nance agencies located in a State in which— 
(A) there is a shortage of affordable rental 
housing units available to individuals with an 
income that is at or below the area median in-
come and median rents have risen on average 
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over the preceding 3 years substantially faster 
than the area median income; or 
(B) there is a shortage of housing units 
available for sale that are affordable to individ-
uals with an income that is at or below the area 
median income and median home prices have 
risen on average over the preceding 3 years 
substantially faster than the area median in-
come. 
(4) USE
OF
FUNDS.—Grants received under 
this subsection shall be used to fund— 
(A) the construction of rental housing 
units or units for purchase that are affordable 
to residents making less than 120 percent of 
the area median income; and 
(B) measures to prevent tenant displace-
ment and harassment, including the provision 
of legal advice and representation for tenants 
facing eviction, enforcement of anti-harassment 
laws, emergency rental assistance, and other 
measures as specified by the Secretary of Hous-
ing and Urban Development. 
(5) LABOR LAWS.— 
(A) IN GENERAL.—All laborers and me-
chanics employed by contractors or subcontrac-
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tors in the performance of construction work fi-
nanced in whole or in part with a grant received 
under this subsection shall be paid wages at 
rates not less than those prevailing on similar 
construction in the locality as determined by 
the Secretary of Labor in accordance with sub-
chapter IV of chapter 31 of title 40, United 
States Code (commonly known as the ‘‘Davis- 
Bacon Act’’). 
(B) EXCEPTION.—Subparagraph (A) shall 
not apply with respect to— 
(i) the rehabilitation of residential 
property if the property contains less than 
8 units; or 
(ii) construction carried out by em-
ployees of the eligible entity receiving the 
grant under this section. 
(6) REGULATIONS.—The Secretary of Housing 
and Urban Development shall promulgate regula-
tions to carry out this subsection, including with re-
spect to the metrics that the Secretary shall use to 
determine eligibility for a grant under this sub-
section. 
(7) APPROPRIATIONS.—Out of funds in the 
Treasury not otherwise appropriated, there is appro-
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priated to the fund established under this subsection 
$4,000,000,000 for fiscal year 2020. 
SEC. 103. CONDITIONS FOR THE SALE OF REAL ESTATE- 
OWNED PROPERTIES AND NON-PERFORMING 
LOANS. 
(a) FINDINGS.—Congress finds that— 
(1) the Federal Housing Administration, the 
Federal National Mortgage Association, and the 
Federal Home Loan Mortgage Corporation provide 
critical homeownership opportunities that greatly 
benefit individuals, families and communities; and 
(2) it is the purpose of this section to— 
(A) preserve owner-occupied homes with 
mortgages insured by the Federal Housing Ad-
ministration or purchased by the Federal Na-
tional Mortgage Association or the Federal 
Home Loan Mortgage Corporation for contin-
ued use as owner-occupied homes; and 
(B) direct that, upon the sale of those 
properties or transfer of those mortgages, cer-
tain percentages of those properties are sold to 
low- and moderate-income homeowners. 
(b) LOANS INSURED BY THE FEDERAL HOUSING AD-
MINISTRATION.—Title II of the National Housing Act (12 
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U.S.C. 1707 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 259. SALE OF REAL ESTATE-OWNED PROPERTIES. 
‘‘(a) IN GENERAL.—Not later than 1 year after the 
date of enactment of this section, the Secretary shall de-
velop programs within the Federal Housing Administra-
tion to ensure that not less than 75 percent of the single- 
family residential properties that were acquired by the 
Federal Housing Administration through foreclosure or 
other transfer-related mortgages insured under this title 
on the properties are sold— 
‘‘(1) directly to an owner-occupant; or 
‘‘(2) to community partners that will— 
‘‘(A) rehabilitate or develop the property; 
and 
‘‘(B) sell the property to an owner-occu-
pant. 
‘‘(b) ANTI-PREDATORY FEATURE.—Unless the Sec-
retary provides prior approval, the Secretary shall prohibit 
any purchaser of a real estate-owned property of the Fed-
eral Housing Administration from re-selling the property 
within 15 years of purchase using a land installment con-
tract or through any other mechanism that does not trans-
fer title to the buyer at the time of sale. 
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‘‘SEC. 260. SALE OF NON-PERFORMING LOANS. 
‘‘(a) IN GENERAL.—Except as provided in this sec-
tion, the Secretary may not sell or transfer any mortgage 
insured under this title that is secured by a single-family 
residential property (in this section referred to as a ‘cov-
ered mortgage’). 
‘‘(b) CONDITIONS FOR SALE OR TRANSFER.— 
‘‘(1) IN GENERAL.—The Secretary— 
‘‘(A) may sell or transfer a covered mort-
gage only if— 
‘‘(i) the capital level of the Fund is 
substantially below the capital ratio re-
quired under section 205(f)(4); 
‘‘(ii) the Secretary certifies that other 
reasonable measures are not available to 
restore the Fund to that capital ratio; and 
‘‘(iii) the Secretary complies with 
paragraph (2)(C), if applicable; and 
‘‘(B) shall sell or transfer only such cov-
ered mortgages as are necessary to assist in 
restoration of that capital ratio. 
‘‘(2) REQUIREMENTS FOR THE SECRETARY.— 
‘‘(A) IN GENERAL.—If the Secretary in-
tends to sell or transfer a covered mortgage, the 
Secretary shall provide the current borrower 
and all owners of record of the property secur-
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ing the covered mortgage, or require that the 
current borrower and owners of record be pro-
vided, a separate written notice of the intent to 
sell the covered mortgage that— 
‘‘(i) is mailed via certified and first 
class mail not less than 90 days before the 
date on which the loan is included in any 
proposed sale; and 
‘‘(ii) includes— 
‘‘(I) a description of the loss 
mitigation options of the Administra-
tion that are available to borrowers in 
financial distress and the obligation of 
servicers to consider borrowers in de-
fault for those options; 
‘‘(II) a description of the actions 
that the servicer of the loan has taken 
to review and implement those options 
for the borrower; and 
‘‘(III) a description of the proce-
dures the borrower may use to contest 
with the Secretary the compliance by 
the servicer with that obligation. 
‘‘(B) JUDICIAL REVIEW.—The determina-
tion of the Secretary to authorize the sale of a 
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mortgage insured under this title shall be re-
viewable under chapter 7 of title 5, United 
States Code, for abuse of discretion and arbi-
trary and capricious agency action. 
‘‘(C) AUCTIONS.—The Secretary may not 
sell any covered mortgage through any type of 
non-performing loan sale auction program until 
the Secretary issues rules, through the notice 
and comment rule making procedures under 
section 553 of title 5, United States Code, that 
address essential aspects of any non-performing 
loan sale program, including— 
‘‘(i) the method of selection of loans 
for sale; 
‘‘(ii) notice to borrowers prior to in-
clusion of the loan in a sale; and 
‘‘(iii) review of loss mitigation status 
prior to the sale, selection of eligible bid-
ders, loss mitigation guidelines applicable 
to loan purchasers, and reporting require-
ments for purchasers. 
‘‘(3) CERTIFICATION REQUIREMENT FOR LEND-
ERS AND SERVICERS.— 
‘‘(A) CERTIFICATION.—As a condition to 
payment of an insurance claim under this title 
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in connection with any non-performing loan 
sale, the lender or servicer of the loan shall pro-
vide the Secretary and the borrower with writ-
ten certification of the loss mitigation review 
contained in the FHA Single Family Housing 
Policy Handbook 4000.1, or any successor 
handbook. 
‘‘(B) FALSE STATEMENTS.— 
‘‘(i) IN
GENERAL.—Any false state-
ment provided in a certification described 
in subparagraph (A) shall be a basis for— 
‘‘(I) recovery by the Secretary of 
any amounts paid under the insurance 
claim and any other penalties and 
sanctions authorized under Federal 
law; and 
‘‘(II) a private right of action by 
the borrower against the lender and 
servicer, with remedies to include 
compensatory and punitive damages 
and an assessment of costs and attor-
ney’s fees. 
‘‘(ii) TRANSFERS.—Unless a bona fide 
purchaser has acquired title to the prop-
erty as a primary residence— 
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‘‘(I) a certification described in 
subparagraph (A) that contains a 
false statement shall be a basis for re-
voking the transfer of the property; 
and 
‘‘(II) the pre-sale lender and 
servicer of the property shall— 
‘‘(aa) resume servicing the 
loan as a loan insured under this 
title; and 
‘‘(bb) reimburse the Sec-
retary for any insurance claim 
paid and all costs related to the 
sale of the property. 
‘‘(4) REQUIREMENTS FOR PURCHASERS.— 
‘‘(A) IN GENERAL.—Each purchaser of a 
covered mortgage shall offer the borrower on 
the covered mortgage— 
‘‘(i) appropriate loss mitigation op-
tions, including affordable and sustainable 
loan modifications; and 
‘‘(ii) the opportunity for a short sale 
or a deed in lieu of foreclosure. 
‘‘(B) LOSS
MITIGATION
OPTIONS.—The 
specific formula, calculations, waterfall steps, 
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and other terms for appropriate loss mitigation 
options described in subparagraph (A) shall be 
published by the Secretary, made available to 
the public, and included in a written notice 
given to borrowers before any acceleration or 
foreclosure is initiated after a loan sale. 
‘‘(5) REQUIREMENTS
FOR
TRANSFEREES.— 
With respect to a transferee, including any subse-
quent transferee, of a covered mortgage that is sold 
under this title— 
‘‘(A) the transferee shall certify in writing 
to the Secretary that the transferee will comply 
with the provisions of this section in the mar-
keting and transfer of any property received in 
the disposition of any transferred loan; 
‘‘(B) the transferee shall provide to the 
Secretary records documenting that the trans-
fers of those properties are in compliance with 
this section; and 
‘‘(C) the failure of the Secretary or the 
transferee to comply with the requirements 
under this section for a loan in default shall be 
a defense to foreclosure, and a transferee shall 
not execute a foreclosure judgment or order of 
sale, or conduct a foreclosure sale, until the 
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transferee has complied with all requirements 
under this section. 
‘‘(c) LIMITATIONS.—With respect to covered mort-
gages that are sold under this title and foreclosed upon 
by the buyer, not less than 90 percent of the properties 
that are the subject of the covered mortgages in an auc-
tion shall be— 
‘‘(1) sold to owner-occupants; 
‘‘(2) operated or transferred to an entity that 
will operate the property as affordable rental hous-
ing for households below 80 percent of the area me-
dian income for a period of not less than 15 years; 
or 
‘‘(3) transferred or donated to a nonprofit 
agency that is certified by the Secretary and will re-
develop the property for owner occupancy or afford-
able rental housing. 
‘‘(d) PRIORITIZATION
OF SALES.—The Secretary 
shall implement policies, procedures, and controls to— 
‘‘(1) identify and recruit community partners; 
‘‘(2) engage in consultations with community 
partners before the sale of a pool of covered mort-
gages under this title to determine whether that sale 
can be designed to meet the specific needs of the 
communities served by the community partners; and 
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‘‘(3) prioritize the sale of pools of single-family 
mortgages to community partners by— 
‘‘(A) designing pools of covered mortgages 
for direct sale to a community partner, the 
price of which shall be set by the Secretary 
based on a pricing model that considers— 
‘‘(i) the current fair market value of 
the properties; and 
‘‘(ii) the potential impact of fore-
closures on those properties to the value of 
other homes that secure mortgages insured 
under this title in the same census tract; 
or 
‘‘(B) in the case of an auction, if the win-
ning bid is not from a community partner, per-
mitting any community partner that bid during 
that same auction to have a final opportunity to 
enter a higher bid on the pool.’’. 
(c) FANNIE MAE.—Section 302 of the Federal Na-
tional Mortgage Association Charter Act (12 U.S.C. 1717) 
is amended by adding at the end the following: 
‘‘(d)(1) The corporation may not sell or transfer any 
mortgage that is secured by a single-family residential 
property (in this section referred to as a ‘covered mort-
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gage’) under this section unless the requirements of this 
subsection are met. 
‘‘(2)(A) If the corporation intends to sell or transfer 
a covered mortgage, the corporation shall provide the cur-
rent borrower and all owners of record of the property se-
curing the covered mortgage, or require that the current 
borrower and owners of record be provided, a separate 
written notice of the intent to sell the covered mortgage 
that— 
‘‘(i) is mailed via certified and first class mail 
not less than 90 days before the date on which the 
loan is included in any proposed sale; and 
‘‘(ii) includes— 
‘‘(I) a description of the loss mitigation op-
tions of the corporation that are available to 
borrowers in financial distress and the obliga-
tion of servicers to consider borrowers in de-
fault for those options; 
‘‘(II) a description of the actions that the 
servicer of the loan has taken to review and im-
plement those options for the borrower; and 
‘‘(III) a description of the procedures the 
borrower may use to contest with the corpora-
tion the compliance by the servicer with that 
obligation. 
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‘‘(B) The determination of the corporation to author-
ize the sale of a mortgage under this section shall be re-
viewable under chapter 7 of title 5, United States Code, 
for abuse of discretion and arbitrary and capricious agen-
cy action. 
‘‘(C) The corporation may not sell any covered mort-
gage through any type of non-performing loan sale auction 
program until the corporation issues rules, through the no-
tice and comment rule making procedures under section 
553 of title 5, United States Code, that address essential 
aspects of any non-performing loan sale program, includ-
ing— 
‘‘(i) the method of selection of loans for sale; 
‘‘(ii) notice to borrowers prior to inclusion of 
the loan in a sale; and 
‘‘(iii) review of loss mitigation status prior to 
the sale, selection of eligible bidders, loss mitigation 
guidelines applicable to loan purchasers, and report-
ing requirements for purchasers. 
‘‘(3)(A) Each purchaser of a covered mortgage shall 
offer the borrower on the covered mortgage— 
‘‘(i) appropriate loss mitigation options, includ-
ing affordable and sustainable loan modifications; 
and 
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‘‘(ii) the opportunity for a short sale or a deed 
in lieu of foreclosure. 
‘‘(B) The specific formula, calculations, waterfall 
steps, and other terms for appropriate loss mitigation op-
tions described in subparagraph (A) shall be published by 
the corporation, made available to the public, and included 
in a written notice given to borrowers before any accelera-
tion or foreclosure is initiated after a loan sale. 
‘‘(4) With respect to a transferee, including any sub-
sequent transferee, of a covered mortgage that is sold by 
the corporation under this section— 
‘‘(A) the transferee shall certify in writing to 
the corporation that the transferee will comply with 
the provisions of this subsection in the marketing 
and transfer of any property received in the disposi-
tion of any transferred loan; 
‘‘(B) the transferee shall provide to the corpora-
tion records documenting that the transfers of those 
properties are in compliance with this subsection; 
and 
‘‘(C) the failure of the corporation or the trans-
feree to comply with the requirements under this 
subsection for a loan in default shall be a defense to 
foreclosure, and a transferee shall not execute a 
foreclosure judgment or order of sale, or conduct a 
VerDate Sep 11 2014 
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foreclosure sale, until the transferee has complied 
with all requirements under this subsection. 
‘‘(5) With respect to covered mortgages that are sold 
by the corporation under this section and foreclosed upon 
by the buyer, not less than 90 percent of the properties 
that are the subject of the covered mortgages in an auc-
tion shall be— 
‘‘(A) sold to owner-occupants; 
‘‘(B) operated or transferred to an entity that 
will operate the property as affordable rental hous-
ing for households below 80 percent of the area me-
dian income for a period of not less than 15 years; 
or 
‘‘(C) transferred or donated to a nonprofit 
agency that is certified by the corporation and will 
redevelop the property for owner occupancy or af-
fordable rental housing. 
‘‘(6) The corporation shall implement policies, proce-
dures, and controls to— 
‘‘(A) identify and recruit community partners; 
‘‘(B) engage in consultations with community 
partners before the sale of a pool of covered mort-
gages under this section to determine whether that 
sale can be designed to meet the specific needs of 
VerDate Sep 11 2014 
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pamtmann on DSKBFK8HB2PROD with BILLS
the communities served by the community partners; 
and 
‘‘(C) prioritize the sale of pools of single-family 
mortgages to community partners by— 
‘‘(i) designing pools of covered mortgages 
for direct sale to a community partner, the 
price of which shall be set by the corporation 
based on a pricing model that considers— 
‘‘(I) the current fair market value of 
the properties; and 
‘‘(II) the potential impact of fore-
closures on those properties to the value of 
other homes in the same census tract; or 
‘‘(III) in the case of an auction, if the 
winning bid is not from a community part-
ner, permitting any community partner 
that bid during that same auction to have 
a final opportunity to enter a higher bid on 
the pool.’’. 
(d) FREDDIE MAC.—Section 305 of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1454) 
is amended by adding at the end the following: 
‘‘(e)(1) The Corporation may not sell or transfer any 
mortgage that is secured by a single-family residential 
property (in this section referred to as a ‘covered mort-
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pamtmann on DSKBFK8HB2PROD with BILLS
gage’) under this section unless the requirements of this 
subsection are met. 
‘‘(2)(A) If the Corporation intends to sell or transfer 
a covered mortgage, the Corporation shall provide the cur-
rent borrower and all owners of record of the property se-
curing the covered mortgage, or require that the current 
borrower and owners of record be provided, a separate 
written notice of the intent to sell the covered mortgage 
that— 
‘‘(i) is mailed via certified and first class mail 
not less than 90 days before the date on which the 
loan is included in any proposed sale; and 
‘‘(ii) includes— 
‘‘(I) a description of the loss mitigation op-
tions of the Corporation that are available to 
borrowers in financial distress and the obliga-
tion of servicers to consider borrowers in de-
fault for those options; 
‘‘(II) a description of the actions that the 
servicer of the loan has taken to review and im-
plement those options for the borrower; and 
‘‘(III) a description of the procedures the 
borrower may use to contest with the Corpora-
tion the compliance by the servicer with that 
obligation. 
VerDate Sep 11 2014 
00:00 Mar 27, 2019
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‘‘(B) The determination of the Corporation to author-
ize the sale of a mortgage under this section shall be re-
viewable under chapter 7 of title 5, United States Code, 
for abuse of discretion and arbitrary and capricious agen-
cy action. 
‘‘(C) The Corporation may not sell any covered mort-
gage through any type of non-performing loan sale auction 
program until the Corporation issues rules, through the 
notice and comment rule making procedures under section 
553 of title 5, United States Code, that address essential 
aspects of any non-performing loan sale program, includ-
ing— 
‘‘(i) the method of selection of loans for sale; 
‘‘(ii) notice to borrowers prior to inclusion of 
the loan in a sale; and 
‘‘(iii) review of loss mitigation status prior to 
the sale, selection of eligible bidders, loss mitigation 
guidelines applicable to loan purchasers, and report-
ing requirements for purchasers. 
‘‘(3)(A) Each purchaser of a covered mortgage shall 
offer the borrower on the covered mortgage— 
‘‘(i) appropriate loss mitigation options, includ-
ing affordable and sustainable loan modifications; 
and 
VerDate Sep 11 2014 
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‘‘(ii) the opportunity for a short sale or a deed 
in lieu of foreclosure. 
‘‘(B) The specific formula, calculations, waterfall 
steps, and other terms for appropriate loss mitigation op-
tions described in subparagraph (A) shall be published by 
the Corporation, made available to the public, and in-
cluded in a written notice given to borrowers before any 
acceleration or foreclosure is initiated after a loan sale. 
‘‘(4) With respect to a transferee, including any sub-
sequent transferee, of a covered mortgage that is sold by 
the Corporation under this section— 
‘‘(A) the transferee shall certify in writing to 
the Corporation that the transferee will comply with 
the provisions of this section in the marketing and 
transfer of any property received in the disposition 
of any transferred loan; 
‘‘(B) the transferee shall provide to the Cor-
poration records documenting that the transfers of 
those properties are in compliance with this sub-
section; and 
‘‘(C) the failure of the Corporation or the trans-
feree to comply with the requirements under this 
subsection for a loan in default shall be a defense to 
foreclosure, and a transferee shall not execute a 
foreclosure judgment or order of sale, or conduct a 
VerDate Sep 11 2014 
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foreclosure sale, until the transferee has complied 
with all requirements under this subsection. 
‘‘(5) With respect to covered mortgages that are sold 
by the Corporation under this section and foreclosed upon 
by the buyer, not less than 90 percent of the properties 
that are the subject of the covered mortgages in an auc-
tion shall be— 
‘‘(A) sold to owner-occupants; 
‘‘(B) operated or transferred to an entity that 
will operate the property as affordable rental hous-
ing for households below 80 percent of the area me-
dian income for a period of not less than 15 years; 
or 
‘‘(C) transferred or donated to a nonprofit 
agency that is certified by the Corporation and will 
redevelop the property for owner occupancy or af-
fordable rental housing. 
‘‘(6) The Corporation shall implement policies, proce-
dures, and controls to— 
‘‘(A) identify and recruit community partners; 
‘‘(B) engage in consultations with community 
partners before the sale of a pool of covered mort-
gages under this section to determine whether that 
sale can be designed to meet the specific needs of 
VerDate Sep 11 2014 
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the communities served by the community partners; 
and 
‘‘(C) prioritize the sale of pools of single-family 
mortgages to community partners by— 
‘‘(i) designing pools of covered mortgages 
for direct sale to a community partner, the 
price of which shall be set by the Corporation 
based on a pricing model that considers— 
‘‘(I) the current fair market value of 
the properties; and 
‘‘(II) the potential impact of fore-
closures on those properties to the value of 
other homes in the same census tract; or 
‘‘(III) in the case of an auction, if the 
winning bid is not from a community part-
ner, permitting any community partner 
that bid during that same auction to have 
a final opportunity to enter a higher bid on 
the pool.’’. 
VerDate Sep 11 2014 
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TITLE 
II—TAKING 
THE 
FIRST 
STEPS TO REVERSE THE LEG-
ACY OF HOUSING DISCRIMI-
NATION AND GOVERNMENT 
NEGLIGENCE 
SEC. 201. DOWN PAYMENT ASSISTANCE PROGRAM FOR 
COMMUNITIES FORMERLY SEGREGATED BY 
LAW. 
(a) FINDINGS.—Congress finds the following: 
(1) For generations, buying a home has been 
the primary way working families build wealth. 
(2) A home is not only a place to live, but also 
an asset that may appreciate, help fund a new busi-
ness, finance an education, or cover retirement ex-
penses. A home provides stability and financial pre-
dictability, which are important foundations for 
prosperity and access to opportunity for a family. 
(3) For decades, the Federal Government sub-
sidized homeownership—for White families. Until 
the 1960s, the Federal Government systematically 
denied African Americans and other marginalized 
groups the ability to obtain mortgage credit, buy 
homes, and build wealth for their families while sub-
sidizing the American dream for White families. 
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