New York Stock Exchange, as such rules may be 
amended from time to time. 
‘‘(c) COMPENSATION.— 
‘‘(1) IN GENERAL.—The compensation of board 
members, executive officers, and employees of an en-
terprise— 
‘‘(A) shall not be in excess of that which 
is reasonable and appropriate; 
‘‘(B) shall be commensurate with the du-
ties and responsibilities of such persons; 
‘‘(C) shall be consistent with the long-term 
goals of the enterprise; 
‘‘(D) shall not focus solely on earnings per-
formance, but shall take into account risk man-
agement, operational stability and legal and 
regulatory compliance as well; and 
‘‘(E) shall be undertaken in a manner that 
complies with applicable laws, rules, and regula-
tions. 
‘‘(2) REIMBURSEMENT.—If an enterprise is re-
quired to prepare an accounting restatement due to 
the material noncompliance of the enterprise, as a 
result of misconduct, with any financial reporting re-
quirement under the securities laws, the chief execu-
tive officer and chief financial officer of the enter-
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prise shall reimburse the enterprise as provided 
under section 304 of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7243). This provision does not oth-
erwise limit the authority of the Agency to employ 
remedies available to it under its enforcement au-
thorities. 
‘‘(d) CODE OF CONDUCT AND ETHICS.— 
‘‘(1) IN GENERAL.—An enterprise shall estab-
lish and administer a written code of conduct and 
ethics that is reasonably designed to assure the abil-
ity of board members, executive officers, and em-
ployees of the enterprise to discharge their duties 
and responsibilities, on behalf of the enterprise, in 
an objective and impartial manner, and that includes 
standards required under section 406 of the Sar-
banes-Oxley Act of 2002 (15 U.S.C. 7264) and 
other applicable laws, rules, and regulations. 
‘‘(2) REVIEW.—Not less than once every three 
years, an enterprise shall review the adequacy of its 
code of conduct and ethics for consistency with prac-
tices appropriate to the enterprise and make any ap-
propriate revisions to such code. 
‘‘(e) CONDUCT AND RESPONSIBILITIES OF BOARD OF 
DIRECTORS.—The board of directors of an enterprise shall 
be responsible for directing the conduct and affairs of the 
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enterprise in furtherance of the safe and sound operation 
of the enterprise and shall remain reasonably informed of 
the condition, activities, and operations of the enterprise. 
The responsibilities of the board of directors shall include 
having in place adequate policies and procedures to assure 
its oversight of, among other matters, the following: 
‘‘(1) Corporate strategy, major plans of action, 
risk policy, programs for legal and regulatory com-
pliance and corporate performance, including pru-
dent plans for growth and allocation of adequate re-
sources to manage operations risk. 
‘‘(2) Hiring and retention of qualified executive 
officers and succession planning for such executive 
officers. 
‘‘(3) Compensation programs of the enterprise. 
‘‘(4) Integrity of accounting and financial re-
porting systems of the enterprise, including inde-
pendent audits and systems of internal control. 
‘‘(5) Process and adequacy of reporting, disclo-
sures, and communications to shareholders, inves-
tors, and potential investors. 
‘‘(6) Extensions of credit to board members and 
executive officers. 
‘‘(7) Responsiveness of executive officers in pro-
viding accurate and timely reports to Federal regu-
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lators and in addressing the supervisory concerns of 
Federal regulators in a timely and appropriate man-
ner. 
‘‘(f) PROHIBITION OF EXTENSIONS OF CREDIT.—An 
enterprise may not directly or indirectly, including 
through any subsidiary, extend or maintain credit, arrange 
for the extension of credit, or renew an extension of credit, 
in the form of a personal loan to or for any board member 
or executive officer of the enterprise, as provided by sec-
tion 13(k) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(k)). 
‘‘(g) CERTIFICATION OF DISCLOSURES.—The chief 
executive officer and the chief financial officer of an enter-
prise shall review each quarterly report and annual report 
issued by the enterprise and such reports shall include cer-
tifications by such officers as required by section 302 of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241). 
‘‘(h) CHANGE OF AUDIT PARTNER.—An enterprise 
may not accept audit services from an external auditing 
firm if the lead or coordinating audit partner who has pri-
mary responsibility for the external audit of the enterprise, 
or the external audit partner who has responsibility for 
reviewing the external audit has performed audit services 
for the enterprise in each of the five previous fiscal years. 
‘‘(i) COMPLIANCE PROGRAM.— 
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‘‘(1) REQUIREMENT.—Each enterprise shall es-
tablish and maintain a compliance program that is 
reasonably designed to assure that the enterprise 
complies with applicable laws, rules, regulations, and 
internal controls. 
‘‘(2) COMPLIANCE
OFFICER.—The compliance 
program of an enterprise shall be headed by a com-
pliance officer, however styled, who reports directly 
to the chief executive officer of the enterprise. The 
compliance officer shall report regularly to the board 
of directors or an appropriate committee of the 
board of directors on compliance with and the ade-
quacy of current compliance policies and procedures 
of the enterprise, and shall recommend any adjust-
ments to such policies and procedures that the com-
pliance officer considers necessary and appropriate. 
‘‘(j) RISK MANAGEMENT PROGRAM.— 
‘‘(1) REQUIREMENT.—Each enterprise shall es-
tablish and maintain a risk management program 
that is reasonably designed to manage the risks of 
the operations of the enterprise. 
‘‘(2) RISK MANAGEMENT OFFICER.—The risk 
management program of an enterprise shall be head-
ed by a risk management officer, however styled, 
who reports directly to the chief executive officer of 
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the enterprise. The risk management officer shall re-
port regularly to the board of directors or an appro-
priate committee of the board of directors on compli-
ance with and the adequacy of current risk manage-
ment policies and procedures of the enterprise, and 
shall recommend any adjustments to such policies 
and procedures that the risk management officer 
considers necessary and appropriate. 
‘‘(k) COMPLIANCE WITH OTHER LAWS.— 
‘‘(1) DEREGISTERED OR UNREGISTERED COM-
MON STOCK.—If an enterprise deregisters or has not 
registered its common stock with the Securities and 
Exchange Commission under the Securities Ex-
change Act of 1934, the enterprise shall comply or 
continue to comply with sections 10A(m) and 13(k) 
of the Securities Exchange Act of 1934 (15 U.S.C. 
78j–1(m), 78m(k)) and sections 302, 304, and 406 
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241, 
7243, 7264), subject to such requirements as pro-
vided by subsection (l) of this section. 
‘‘(2) REGISTERED COMMON STOCK.—An enter-
prise that has its common stock registered with the 
Securities and Exchange Commission shall maintain 
such registered status, unless it provides 60 days 
prior written notice to the Director stating its intent 
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to deregister and its understanding that it will re-
main subject to the requirements of the sections of 
the Securities Exchange Act of 1934 and the Sar-
banes-Oxley Act of 2002, subject to such require-
ments as provided by subsection (l) of this section. 
‘‘(l) OTHER MATTERS.—The Director may from time 
to time establish standards, by regulation, order, or guide-
line, regarding such other corporate governance matters 
of the enterprises as the Director considers appropriate. 
‘‘(m) MODIFICATION OF STANDARDS.—In connection 
with standards of Federal or State law (including the Re-
vised Model Corporation Act) or New York Stock Ex-
change rules that are made applicable to an enterprise by 
section 1710.10 of the Director’s rules (12 C.F.R. 
1710.10) and by subsections (a), (b), (g), (i), (j), and (k) 
of this section, the Director, in the Director’s sole discre-
tion, may modify the standards contained in this section 
or in part 1710 of the Director’s rules (12 U.S.C. Part 
1710) in accordance with section 553 of title 5, United 
States Code, and upon written notice to the enterprise.’’. 
SEC. 115. REQUIRED REGISTRATION UNDER SECURITIES 
EXCHANGE ACT OF 1934. 
The Housing and Community Development Act of 
1992 is amended by adding after section 1322A, as added 
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by the preceding provisions of this Act, the following new 
section: 
‘‘SEC. 1322B. REQUIRED REGISTRATION UNDER SECURI-
TIES EXCHANGE ACT OF 1934. 
‘‘(a) IN GENERAL.—Each regulated entity shall reg-
ister at least one class of the capital stock of such regu-
lated entity, and maintain such registration with the Secu-
rities and Exchange Commission, under the Securities Ex-
change Act of 1934. 
‘‘(b) ENTERPRISES.—Each enterprise shall comply 
with sections 14 and 16 of the Securities Exchange Act 
of 1934.’’. 
SEC. 116. FINANCIAL INSTITUTIONS EXAMINATION COUN-
CIL. 
The Federal Financial Institutions Examination 
Council Act of 1978 is amended— 
(1) in section 1003 (12 U.S.C. 3302)— 
(A) in paragraph (1), by inserting ‘‘Direc-
tor of the Federal Housing Finance Agency,’’ 
after ‘‘Supervision,’’; and 
(B) in paragraph (3), by striking ‘‘or a 
credit union;’’ and inserting ‘‘a credit union, or 
a regulated entity (as such term is defined in 
section 1303 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4502)).’’; 
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(2) in section 1004 (12 U.S.C. 3303)— 
(A) in paragraph (4), by inserting a semi-
colon at the end; 
(B) by redesignating paragraph (5) as 
paragraph (6); and 
(C) by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) the Director of the Federal Housing Fi-
nance Agency; and’’; and 
(3) in section 1006(d) (12 U.S.C. 3305(d)), by 
striking ‘‘and employees of the Federal Housing Fi-
nance Board’’. 
SEC. 117. GUARANTEE FEE STUDY. 
(a) IN GENERAL.—The Comptroller General of the 
United States, in consultation with the heads of the fed-
eral banking agencies and the Director of the Office of 
Federal Housing Enterprise Oversight of the Department 
of Housing and Urban Development, shall, not later than 
one year after the date of the enactment of this Act, sub-
mit to the Congress a study concerning the pricing, trans-
parency and reporting of the Federal National Mortgage 
Association, the Federal Home Loan Mortgage Corpora-
tion, and the Federal home loan banks with regard to 
guarantee fees and concerning analogous practices, trans-
parency and reporting requirements (including advances 
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pricing practices by the Federal Home Loan Banks) of 
other participants in the business of mortgage purchases 
and securitization. 
(b) FACTORS.—The study required by this section 
shall examine various factors such as credit risk, 
counterparty risk considerations, economic value consider-
ations, and volume considerations used by the regulated 
entities (as such term is defined in section 1303 of the 
Housing and Community Development Act of 1992) in-
cluded in the study in setting the amount of fees they 
charge. 
(c) CONTENTS
OF REPORT.—The report required 
under subsection (a) shall identify and analyze— 
(1) the factors used by each enterprise (as such 
term is defined in section 1303 of the Housing and 
Community Development Act of 1992) in deter-
mining the amount of the guarantee fees it charges; 
(2) the total revenue the enterprises earn from 
guarantee fees; 
(3) the total costs incurred by the enterprises 
for providing guarantees; 
(4) the average guarantee fee charged by the 
enterprises; 
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(5) an analysis of how and why the guarantee 
fees charged differ from such fees charged during 
the previous year; 
(6) a breakdown of the revenue and costs asso-
ciated with providing guarantees, based on product 
type and risk classifications; and 
(7) other relevant information on guarantee 
fees with other participants in the mortgage and 
securitization business. 
(d) PROTECTION OF INFORMATION.—Nothing in this 
section may be construed to require or authorize the Gov-
ernment Accounting Office, in connection with the study 
mandated by this section, to disclose information of the 
enterprises or other organization that is confidential or 
proprietary. 
(e) EFFECTIVE DATE.—This section shall take effect 
on the date of the enactment of this Act. 
SEC. 118. CONFORMING AMENDMENTS. 
(a) 1992 ACT.—Part 1 of subtitle A of title XIII of 
the Housing and Community Development Act of 1992 
(12 U.S.C. 4511 et seq.), as amended by the preceding 
provisions of this Act, is further amended— 
(1) by striking ‘‘an enterprise’’ each place such 
term appears in such part (except in sections 
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1313(a)(2)(A), 
1313A(b)(2)(B)(ii)(I), 
and 
1316(b)(3)) and inserting ‘‘a regulated entity’’; 
(2) by striking ‘‘the enterprise’’ each place such 
term appears in such part (except in section 
1316(b)(3)) and inserting ‘‘the regulated entity’’; 
(3) by striking ‘‘the enterprises’’ each place 
such term appears in such part (except in sections 
1312(c)(2), 1312(e)(2), and 1319B(a)(4)(D)) and 
inserting ‘‘the regulated entities’’; 
(4) by striking ‘‘each enterprise’’ each place 
such term appears in such part and inserting ‘‘each 
regulated entity’’; 
(5) by striking ‘‘Office’’ each place such term 
appears in such part (except in sections 1312(b)(5), 
1315(b), and 1316(g), and section 1317(c)) and in-
serting ‘‘Agency’’; 
(6) in section 1315 (12 U.S.C. 4515)— 
(A) in subsection (a)— 
(i) in the subsection heading, by strik-
ing ‘‘Office Personnel’’ and inserting ‘‘In 
General’’; and 
(ii) by striking ‘‘The’’ and inserting 
‘‘Subject to titles III and IV of the Federal 
Housing Finance Reform Act of 2007, 
the’’; 
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(B) by striking subsections (d) and (f); 
and 
(C) by redesignating subsection (e) as sub-
section (d); 
(7) in section 1319A (12 U.S.C. 4520)— 
(A) by striking ‘‘(a) In General.—Each en-
terprise’’ and inserting ‘‘Each regulated enti-
ty’’; and 
(B) by striking subsection (b); 
(8) in section 1319B (12 U.S.C. 4521), by 
striking ‘‘Committee on Banking, Finance and 
Urban Affairs’’ each place such term appears and 
inserting ‘‘Committee on Financial Services’’; and 
(9) in section 1319F (12 U.S.C. 4525), striking 
all that follows ‘‘United States Code’’ and inserting 
‘‘, the Agency shall be considered an agency respon-
sible for the regulation or supervision of financial in-
stitutions.’’. 
(b) AMENDMENTS TO FANNIE MAE CHARTER ACT.— 
The Federal National Mortgage Association Charter Act 
(12 U.S.C. 1716 et seq.) is amended— 
(1) by striking ‘‘Director of the Office of Fed-
eral Housing Enterprise Oversight of the Depart-
ment of Housing and Urban Development’’ each 
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place such term appears, and inserting ‘‘Director of 
the Federal Housing Finance Agency’’, in— 
(A) 
section 
303(c)(2) 
(12 
U.S.C. 
1718(c)(2)); 
(B) section 309(d)(3)(B) (12 U.S.C. 
1723a(d)(3)(B)); and 
(C) section 309(k)(1); and 
(2) in section 309— 
(A) in subsections (d)(3)(A) and (n)(1), by 
striking ‘‘Banking, Finance and Urban Affairs’’ 
each place such term appears and inserting 
‘‘Financial Services’’; and 
(B) in subsection (m)— 
(i) in paragraph (1), by striking ‘‘Sec-
retary’’ the second place such term ap-
pears and inserting ‘‘Director’’; 
(ii) in paragraph (2), by striking 
‘‘Secretary’’ the second place such term 
appears and inserting ‘‘Director’’; and 
(iii) by striking ‘‘Secretary’’ each 
other place such term appears and insert-
ing ‘‘Director of the Federal Housing Fi-
nance Agency’’; and 
(C) in subsection (n), by striking ‘‘Sec-
retary’’ each place such term appears and in-
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serting ‘‘Director of the Federal Housing Fi-
nance Agency’’. 
(c) AMENDMENTS TO FREDDIE MAC ACT.—The Fed-
eral Home Loan Mortgage Corporation Act is amended— 
(1) by striking ‘‘Director of the Office of Fed-
eral Housing Enterprise Oversight of the Depart-
ment of Housing and Urban Development’’ each 
place such term appears, and inserting ‘‘Director of 
the Federal Housing Finance Agency’’, in— 
(A) 
section 
303(b)(2) 
(12 
U.S.C. 
1452(b)(2)); 
(B) 
section 
303(h)(2) 
(12 
U.S.C. 
1452(h)(2)); and 
(C) 
section 
307(c)(1) 
(12 
U.S.C. 
1456(c)(1)); 
(2) in sections 303(h)(1) and 307(f)(1) (12 
U.S.C. 1452(h)(1), 1456(f)(1)), by striking ‘‘Bank-
ing, Finance and Urban Affairs’’ each place such 
term appears and inserting ‘‘Financial Services’’; 
(3) in section 306(i) (12 U.S.C. 1455(i))— 
(A) by striking ‘‘1316(c)’’ and inserting 
‘‘306(c)’’; and 
(B) by striking ‘‘section 106’’ and insert-
ing ‘‘section 1316’’; and 
(4) in section 307 (12 U.S.C. 1456))— 
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(A) in subsection (e)— 
(i) in paragraph (1), by striking ‘‘Sec-
retary’’ the second place such term ap-
pears and inserting ‘‘Director’’; 
(ii) in paragraph (2), by striking 
‘‘Secretary’’ the second place such term 
appears and inserting ‘‘Director’’; and 
(iii) by striking ‘‘Secretary’’ each 
other place such term appears and insert-
ing ‘‘Director of the Federal Housing Fi-
nance Agency’’; and 
(B) in subsection (f), by striking ‘‘Sec-
retary’’ each place such term appears and in-
serting ‘‘Director of the Federal Housing Fi-
nance Agency’’. 
Subtitle B—Improvement of 
Mission Supervision 
SEC. 121. TRANSFER OF PRODUCT APPROVAL AND HOUS-
ING GOAL OVERSIGHT. 
Part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541 et 
seq.) is amended— 
(1) by striking the designation and heading for 
the part and inserting the following: 
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‘‘PART 2—PRODUCT APPROVAL BY DIRECTOR, 
CORPORATE GOVERNANCE, AND ESTABLISH-
MENT OF HOUSING GOALS’’; 
and 
(2) by striking sections 1321 and 1322. 
SEC. 122. REVIEW OF ENTERPRISE PRODUCTS. 
(a) IN GENERAL.—Part 2 of subtitle A of title XIII 
of the Housing and Community Development Act of 1992 
is amended by inserting before section 1323 (12 U.S.C. 
4543) the following new section: 
‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS 
OF ENTERPRISES. 
‘‘(a) IN GENERAL.—The Director shall require each 
enterprise to obtain the approval of the Director for any 
product of the enterprise before initially offering the prod-
uct. 
‘‘(b) STANDARD FOR APPROVAL.—In considering any 
request for approval of a product pursuant to subsection 
(a), the Director shall make a determination that— 
‘‘(1) in the case of a product of the Federal Na-
tional Mortgage Association, the Director determines 
that the product is authorized under paragraph (2), 
(3), (4), or (5) of section 302(b) or section 304 of 
the Federal National Mortgage Association Charter 
Act, (12 U.S.C. 1717(b), 1719); 
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‘‘(2) in the case of a product of the Federal 
Home Loan Mortgage Corporation, the Director de-
termines that the product is authorized under para-
graph (1), (4), or (5) of section 305(a) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)); 
‘‘(3) the product is in the public interest; 
‘‘(4) the product is consistent with the safety 
and soundness of the enterprise or the mortgage fi-
nance system; and 
‘‘(5) the product does not materially impair the 
efficiency of the mortgage finance system. 
‘‘(c) PROCEDURE FOR APPROVAL.— 
‘‘(1) SUBMISSION OF REQUEST.—An enterprise 
shall submit to the Director a written request for 
approval of a product that describes the product in 
such form as prescribed by order or regulation of the 
Director. 
‘‘(2) REQUEST FOR PUBLIC COMMENT.—Imme-
diately upon receipt of a request for approval of a 
product, as required under paragraph (1), the Direc-
tor shall publish notice of such request and of the 
period for public comment pursuant to paragraph 
(3) regarding the product, and a description of the 
product proposed by the request. The Director shall 
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give interested parties the opportunity to respond in 
writing to the proposed product. 
‘‘(3) PUBLIC COMMENT PERIOD.—During the 
30-day period beginning on the date of publication 
pursuant to paragraph (2) of a request for approval 
of a product, the Director shall receive public com-
ments regarding the proposed product. 
‘‘(4) OFFERING OF PRODUCT.— 
‘‘(A) IN
GENERAL.—Not later than 30 
days after the close of the public comment pe-
riod described in paragraph (3), the Director 
shall approve or deny the product, specifying 
the grounds for such decision in writing. 
‘‘(B) FAILURE TO ACT.—If the Director 
fails to act within the 30-day period described 
in subparagraph (A), the enterprise may offer 
the product. 
‘‘(d) EXPEDITED REVIEW.— 
‘‘(1) DETERMINATION AND NOTICE.—If an en-
terprise determines that any new activity, service, 
undertaking, or offering is not a product, as defined 
in subsection (f), the enterprise shall provide written 
notice to the Director prior to the commencement of 
such activity, service, undertaking, or offering. 
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‘‘(2) DIRECTOR DETERMINATION OF APPLICA-
BLE PROCEDURE.—Immediately upon receipt of any 
notice pursuant to paragraph (1), the Director shall 
make a determination under paragraph (3). 
‘‘(3) DETERMINATION
AND
TREATMENT
AS 
PRODUCT.—If the Director determines that any new 
activity, service, undertaking, or offering consists of, 
relates to, or involves a product— 
‘‘(A) the Director shall notify the enter-
prise of the determination; 
‘‘(B) the new activity, service, undertaking, 
or offering described in the notice under para-
graph (1) shall be considered a product for pur-
poses of this section; and 
‘‘(C) the enterprise shall withdraw its re-
quest or submit a written request for approval 
of the product pursuant to subsection (c). 
‘‘(e) CONDITIONAL APPROVAL.—The Director may 
conditionally approve the offering of any product by an 
enterprise, and may establish terms, conditions, or limita-
tions with respect to such product with which the enter-
prise must comply in order to offer such product. 
‘‘(f) DEFINITION
OF PRODUCT.—For purposes of 
this section, the term ‘product’ does not include— 
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‘‘(1) the automated loan underwriting system of 
an enterprise in existence as of the date of the en-
actment of the Federal Housing Finance Reform 
Act of 2007, including any upgrade to the tech-
nology, operating system, or software to operate the 
underwriting system; or 
‘‘(2) any modification to the mortgage terms 
and conditions or mortgage underwriting criteria re-
lating to the mortgages that are purchased or guar-
anteed by an enterprise: Provided, That such modi-
fications do not alter the underlying transaction so 
as to include services or financing, other than resi-
dential mortgage financing, or create significant new 
exposure to risk for the enterprise or the holder of 
the mortgage. 
‘‘(g) NO LIMITATION.—Nothing in this section shall 
be deemed to restrict— 
‘‘(1) the safety and soundness authority of the 
Director over all new and existing products or activi-
ties; or 
‘‘(2) the authority of the Director to review all 
new and existing products or activities to determine 
that such products or activities are consistent with 
the statutory mission of the enterprise.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) FANNIE
MAE.—Section 302(b)(6) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1717(b)(6)) is amended— 
(A) by striking ‘‘implement any new pro-
gram’’ and inserting ‘‘initially offer any prod-
uct’’; 
(B) by striking ‘‘section 1303’’ and insert-
ing ‘‘section 1321(f)’’; and 
(C) by striking ‘‘before obtaining the ap-
proval of the Secretary under section 1322’’ 
and inserting ‘‘except in accordance with sec-
tion 1321’’. 
(2) FREDDIE MAC.—Section 305(c) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(c)) is amended— 
(A) by striking ‘‘implement any new pro-
gram’’ and inserting ‘‘initially offer any prod-
uct’’; 
(B) by striking ‘‘section 1303’’ and insert-
ing ‘‘section 1321(f)’’; and 
(C) by striking ‘‘before obtaining the ap-
proval of the Secretary under section 1322’’ 
and inserting ‘‘except in accordance with sec-
tion 1321’’. 
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(3) 1992 ACT.—Section 1303 of the Housing 
and Community Development Act of 1992 (12 
U.S.C. 4502), as amended by section 2 of this Act, 
is further amended— 
(A) by striking paragraph (17) (relating to 
the definition of ‘‘new program’’) ; and 
(B) by redesignating paragraphs (18) 
through (23) as paragraphs (17) through (22), 
respectively. 
SEC. 123. CONFORMING LOAN LIMITS. 
(a) FANNIE MAE.— 
(1) GENERAL LIMIT.—Section 302(b)(2) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1717(b)(2)) is amended by striking the 
7th and 8th sentences and inserting the following 
new sentences: ‘‘For 2007, such limitations shall not 
exceed $417,000 for a mortgage secured by a single- 
family residence, $533,850 for a mortgage secured 
by a 2-family residence, $645,300 for a mortgage se-
cured by a 3-family residence, and $801,950 for a 
mortgage secured by a 4-family residence, except 
that such maximum limitations shall be adjusted ef-
fective January 1 of each year beginning with 2008, 
subject to the limitations in this paragraph. Each 
adjustment shall be made by adding to or sub-
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tracting from each such amount (as it may have 
been previously adjusted) a percentage thereof equal 
to the percentage increase or decrease, during the 
most recent 12-month or four-quarter period ending 
before the time of determining such annual adjust-
ment, in the housing price index maintained by the 
Director of the Federal Housing Finance Agency 
(pursuant to section 1322 of the Housing and Com-
munity Development Act of 1992 (12 U.S.C. 
4541)).’’. 
(2) HIGH-COST AREA LIMIT.—Section 302(b)(2) 
of the Federal National Mortgage Association Char-
ter Act is (12 U.S.C. 1717(b)(2)) is amended by 
adding after the period at the end the following: 
‘‘Such foregoing limitations shall also be increased 
with respect to properties of a particular size located 
in any area for which the median price for such size 
residence exceeds the foregoing limitation for such 
size residence, to the lesser of 150 percent of such 
foregoing limitation for such size residence or the 
amount that is equal to the median price in such 
area for such size residence, except that, subject to 
the order, if any, issued by the Director of the Fed-
eral Housing Finance Agency pursuant to section 
123(d)(3) of the Federal Housing Finance Reform 
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Act of 2007, such increase shall apply only with re-
spect to mortgages on which are based securities 
issued and sold by the corporation.’’. 
(b) FREDDIE MAC.— 
(1) GENERAL LIMIT.—Section 305(a)(2) of the 
Federal Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)(2)) is amended by striking the 6th 
and 7th sentences and inserting the following new 
sentences: ‘‘For 2007, such limitations shall not ex-
ceed $417,000 for a mortgage secured by a single- 
family residence, $533,850 for a mortgage secured 
by a 2-family residence, $645,300 for a mortgage se-
cured by a 3-family residence, and $801,950 for a 
mortgage secured by a 4-family residence, except 
that such maximum limitations shall be adjusted ef-
fective January 1 of each year beginning with 2008, 
subject to the limitations in this paragraph. Each 
adjustment shall be made by adding to or sub-
tracting from each such amount (as it may have 
been previously adjusted) a percentage thereof equal 
to the percentage increase or decrease, during the 
most recent 12-month or four-quarter period ending 
before the time of determining such annual adjust-
ment, in the housing price index maintained by the 
Director of the Federal Housing Finance Agency 
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(pursuant to section 1322 of the Housing and Com-
munity Development Act of 1992 (12 U.S.C. 
4541)).’’. 
(2) HIGH-COST AREA LIMIT.—Section 305(a)(2) 
of the Federal Home Loan Mortgage Corporation 
Act is amended by adding after the period at the 
end the following: ‘‘Such foregoing limitations shall 
also be increased with respect to properties of a par-
ticular size located in any area for which the median 
price for such size residence exceeds the foregoing 
limitation for such size residence, to the lesser of 
150 percent of such foregoing limitation for such 
size residence or the amount that is equal to the me-
dian price in such area for such size residence, ex-
cept that, subject to the order, if any, issued by the 
Director of the Federal Housing Finance Agency 
pursuant to section 123(d)(3) of the Federal Hous-
ing Finance Reform Act of 2007, such increase shall 
apply only with respect to mortgages on which are 
based securities issued and sold by the Corpora-
tion.’’. 
(c) HOUSING PRICE INDEX.—Subpart A of part 2 of 
subtitle A of title XIII of the Housing and Community 
Development Act of 1992 (as amended by the preceding 
provisions of this Act) is amended by inserting after sec-
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tion 1321 (as added by section 122 of this Act) the fol-
lowing new section: 
‘‘SEC. 1322. HOUSING PRICE INDEX. 
‘‘(a) IN GENERAL.—The Director shall establish and 
maintain a method of assessing the national average 1- 
family house price for use for adjusting the conforming 
loan limitations of the enterprises. In establishing such 
method, the Director shall take into consideration the 
monthly survey of all major lenders conducted by the Fed-
eral Housing Finance Agency to determine the national 
average 1-family house price, the House Price Index main-
tained by the Office of Federal Housing Enterprise Over-
sight of the Department of Housing and Urban Develop-
ment before the effective date under section 185 of the 
Federal Housing Finance Reform Act of 2007, any appro-
priate house price indexes of the Bureau of the Census 
of the Department of Commerce, and any other indexes 
or measures that the Director considers appropriate. 
‘‘(b) GAO AUDIT.— 
‘‘(1) IN GENERAL.—At such times as are re-
quired under paragraph (2), the Comptroller Gen-
eral of the United States shall conduct an audit of 
the methodology established by the Director under 
subsection (a) to determine whether the methodology 
established is an accurate and appropriate means of 
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measuring changes to the national average 1-family 
house price. 
‘‘(2) TIMING.—An audit referred to in para-
graph (1) shall be conducted and completed not later 
than the expiration of the 180-day period that be-
gins upon each of the following dates: 
‘‘(A) ESTABLISHMENT.—The date upon 
which such methodology is initially established 
under subsection (a) in final form by the Direc-
tor. 
‘‘(B) MODIFICATION
OR
AMENDMENT.— 
Each date upon which any modification or 
amendment to such methodology is adopted in 
final form by the Director. 
‘‘(3) REPORT.—Within 30 days of the comple-
tion of any audit conducted under this subsection, 
the Comptroller General shall submit a report detail-
ing the results and conclusions of the audit to the 
Director, the Committee on Financial Services of the 
House of Representatives, and the Committee on 
Banking, Housing, and Urban Affairs of the Sen-
ate.’’. 
(d) CONDITIONS ON CONFORMING LOAN LIMIT FOR 
HIGH-COST AREAS.— 
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(1) STUDY.—The Director of the Federal 
Housing Finance Agency shall conduct a study 
under this subsection during the six-month period 
beginning on the effective date under section 185 of 
this Act. 
(2) ISSUES.—The study under this subsection 
shall determine— 
(A) the effect that restricting the con-
forming loan limits for high-cost areas only to 
mortgages on which are based securities issued 
and sold by the Federal National Mortgage As-
sociation and the Federal Home Loan Mortgage 
Corporation (as provided in the last sentence of 
section 302(b)(2) of the Federal National Mort-
gage Association Charter Act and the last sen-
tence of section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act, pursuant to 
the amendments made by subsections (a)(2) 
and (b)(2) of this section) would have on the 
cost to borrowers for mortgages on housing in 
such high-cost areas; 
(B) the effects that such restrictions would 
have on the availability of mortgages for hous-
ing in such high-cost areas; and 
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(C) the extent to which the Federal Na-
tional Mortgage Association and the Federal 
Home Loan Mortgage Corporation will be able 
to issue and sell securities based on mortgages 
for housing located in such high-cost areas. 
(3) DETERMINATION.— 
(A) IN GENERAL.—Not later than the ex-
piration of the six-month period specified in 
paragraph (1), the Director of the Federal 
Housing Finance Agency shall make a deter-
mination, based on the results of the study 
under this subsection, of whether the restriction 
of conforming loan limits for high-cost areas 
only to mortgages on which are based securities 
issued and sold by the Federal National Mort-
gage Association and the Federal Home Loan 
Mortgage Corporation (as provided in the 
amendments made by subsections (a)(2) and 
(b)(2) of this section) will result in an increase 
in the cost to borrowers for mortgages on hous-
ing in such high-cost areas. 
(B) ORDER.—If such determination is that 
costs to borrowers on housing in such high-cost 
areas will be increased by such restrictions, the 
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Director may issue an order terminating such 
restrictions, in whole or in part. 
(4) PUBLICATION.—Not later than the expira-
tion of the six-month period specified in paragraph 
(1), the Director of the Federal Housing Finance 
Agency shall cause to be published in the Federal 
Register— 
(A) a report that— 
(i) describes the study under this sub-
section; and 
(ii) sets forth the conclusions of the 
study regarding the issues to be deter-
mined under paragraph (2); and 
(B) notice of the determination of the Di-
rector under paragraph (3); and 
(C) the order of the Director under para-
graph (3). 
(5) DEFINITION.—For purposes of this sub-
section, the term ‘‘conforming loan limits for high- 
cost areas’’ means the dollar amount limitations ap-
plicable under the section 302(b)(2) of the Federal 
National Mortgage Association Charter Act and sec-
tion 305(a)(2) of the Federal Home Loan Mortgage 
Corporation Act (as amended by subsections (a) and 
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