antee under this section and may guarantee, the re-
payment of the portions of the principal obligations 
of eligible mortgages that are used to finance eligible 
sustainable building elements for the housing that is 
subject to the mortgage. 
(2) AMOUNT
OF
GUARANTEE.—A guarantee 
under this section by the Secretary in connection with 
an eligible mortgage shall not exceed a percentage of 
the green portion (as such term is defined in sub-
section (g)) of the mortgage, as shall be established by 
the Secretary and may be established on a regional 
basis as the Secretary determines appropriate. 
(b) ELIGIBLE MORTGAGES.—To be considered an eligi-
ble mortgage for purposes of this section, a mortgage shall 
comply with all of the following requirements: 
(1) ACQUISITION OR CONSTRUCTION OF HOUS-
ING.—The mortgage shall be made for the acquisition 
or construction of single- or multifamily housing and 
repayment of the mortgage shall be secured by an in-
terest in such housing. 
(2) 
FINANCING
OF
ELIGIBLE
SUSTAINABLE 
BUILDING ELEMENTS THROUGH GREEN PORTION OF 
MORTGAGE.—A portion of the principal obligation of 
the mortgage, which meets the requirements under 
subsection (c), shall be used only for financing the 
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provision of eligible sustainable building elements for 
the housing for which the mortgage was made. 
(3) MAXIMUM MORTGAGE AMOUNT.—The prin-
cipal obligation of the mortgage (including the eligible 
portion of such mortgage, and such initial service 
charges, appraisal, inspection, and other fees as the 
Secretary shall approve) may not exceed the following 
amounts: 
(A) SINGLE-FAMILY HOUSING.—Such dollar 
amounts for single-family housing as the Sec-
retary shall establish, which may be established 
on the basis of the number of dwelling units in 
the housing, as the Secretary considers appro-
priate. 
(B) MULTIFAMILY HOUSING.—Such dollar 
amounts for multifamily housing as the Sec-
retary shall establish, which may be established 
on the basis of the number of dwelling units in 
the housing and the number of bedrooms in such 
dwelling units, as the Secretary considers appro-
priate. 
(4) REPAYMENT.—The mortgage meets such re-
quirements as the Secretary shall establish to ensure 
that there is a reasonable prospect of repayment of the 
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principal and interest on the obligation by the mort-
gagor. 
(5) MORTGAGE
TERMS.—The mortgage shall 
meet such requirements with respect to loan-to-value 
ratio, mortgagor credit scores, debt-to-income ratio, 
and other underwriting standards, term to maturity, 
interest rates and amortization, including amortiza-
tion of the green portion of the mortgage, and other 
mortgage terms as the Secretary shall establish. 
(c) LIMITATIONS
ON GREEN PORTION
OF MORT-
GAGE.—The requirements under this subsection with respect 
to the green portion of an eligible mortgage are as follows: 
(1) PERCENTAGE
LIMITATION.—Such portion 
shall not exceed, in the case of single-family or multi-
family housing, 10 percent of the total principal obli-
gation of the mortgage. 
(2) DOLLAR AMOUNT LIMITATION.—Such portion 
shall not exceed— 
(A) in the case of single-family housing, 
such maximum dollar amount limitation as the 
Secretary shall establish, which may be estab-
lished on the basis of the number of dwelling 
units in the housing, as the Secretary considers 
appropriate; and 
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(B) in the case of multifamily housing, such 
maximum dollar amount limitation as the Sec-
retary shall establish, which limitation may be 
established on the basis of the number of dwelling 
units in the housing and the number of bedrooms 
in such dwelling units, as the Secretary con-
siders appropriate. 
(3) 
COST-EFFECTIVENESS
LIMITATION.—Such 
portion shall not exceed the total present value of the 
savings (as determined in accordance with subsection 
(d)) attributable to the incorporation of the eligible 
sustainable building elements to be financed with the 
green portion of the mortgage that are to be realized 
over the useful life of such elements. 
(d) ELIGIBLE SUSTAINABLE BUILDING ELEMENTS.— 
The Secretary may not guarantee any eligible mortgage 
under this section unless the mortgagor has demonstrated, 
in accordance with such requirements as the Secretary shall 
establish, the amount of savings attributable to incorpora-
tion of the sustainable building elements to be financed with 
the green portion of the mortgage, as measured by the Na-
tional Green Building Standard for all residential con-
struction developed by the National Association of Home 
Builders and the U.S. Green Building Council, and ap-
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proved by the American National Standards Institute, as 
updated and in effect at the time of such demonstration. 
(e) GUARANTEE FEE.— 
(1) ASSESSMENT
AND
COLLECTION.—The Sec-
retary shall assess and collect fees for guarantees 
under this section in amounts that the Secretary de-
termines are sufficient to cover the costs (as such term 
is defined in section 502 of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661a)) of such guarantees. 
(2) AVAILABILITY.—Fees collected under this 
subsection shall be deposited by the Secretary in the 
Treasury of the United States and shall remain avail-
able until expended, subject to such other conditions 
as are contained in annual appropriations Acts. 
(f) PAYMENT OF GUARANTEE.— 
(1) DEFAULT.— 
(A) RIGHT TO PAYMENT.—If a mortgagor 
under a mortgage guaranteed under this section 
defaults (as defined in regulations issued by the 
Secretary and specified in the guarantee con-
tract) on the obligation under the mortgage— 
(i) the holder of the guarantee shall 
have the right to demand payment of the 
unpaid amount of the guaranteed portion of 
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the mortgage, to the extent provided under 
subsection (a)(2), from the Secretary; and 
(ii) within such period as may be spec-
ified in the guarantee or related agreements, 
the Secretary shall pay to the holder of the 
guarantee, to the extent provided under sub-
section (a)(2), the unpaid interest on, and 
unpaid principal of the portion of guaran-
teed portion of the mortgage with respect to 
which the borrower has defaulted, unless the 
Secretary finds that there was no default by 
the borrower in the payment of interest or 
principal or that the default has been rem-
edied. 
(B) FORBEARANCE.—Nothing in this para-
graph precludes any forbearance by the holder of 
an eligible mortgage for the benefit of the mort-
gagor which may be agreed upon by the parties 
to the mortgage and approved by the Secretary. 
(2) SUBROGATION.— 
(A) IN GENERAL.—If the Secretary makes a 
payment under paragraph (1), the Secretary 
shall be subrogated to the extent of such payment 
to the rights of the recipient of the payment as 
specified in the guarantee or related agreements 
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including, if appropriate, the authority (not-
withstanding any other provision of law)— 
(i) to complete, maintain, operate, 
lease, or otherwise dispose of any property 
acquired pursuant to such guarantee or re-
lated agreements; or 
(ii) to permit the mortgagor, pursuant 
to an agreement with the Secretary, to con-
tinue to occupy the property subject to the 
mortgage, if the Secretary determines such 
occupancy to be appropriate. 
(B) ALLOCATION OF RIGHTS AND RESPON-
SIBILITIES.—In the event of a payment under 
paragraph (1), the rights of the Secretary, with 
respect to any property acquired pursuant to a 
guarantee or related agreements, shall be supe-
rior to the rights of any other person with re-
spect to the property, except that as long as 
amounts remain due to the recipient of the pay-
ment under the terms of the eligible mortgage 
and as long as the recipient diligently pursues 
collection of all amounts due under the eligible 
mortgage, all decisions with respect to the eligi-
ble mortgage, including efforts to collect the un-
paid amounts, shall be made by the recipient, 
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Provided, That any amounts collected by the re-
cipient less reasonable out-of-pocket costs of col-
lection shall be shared with the Secretary in the 
same ratio as the guaranteed portion bears to the 
original principal amount of the eligible mort-
gage. 
(C) TERMS AND CONDITIONS.—A guarantee 
agreement shall include such detailed terms and 
conditions as the Secretary determines appro-
priate to protect the interests of the United 
States in the case of default. 
(3) FULL FAITH AND CREDIT.—The full faith 
and credit of the United States is pledged to the pay-
ment of all guarantees issued under this section with 
respect to principal and interest. 
(g) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) ELIGIBLE
MORTGAGE.—The term ‘‘eligible 
mortgage’’ means a mortgage that meets the require-
ments under subsection (b). 
(2) GREEN PORTION.—The term ‘‘green portion’’ 
means, with respect to an eligible mortgage, the por-
tion of the mortgage principal referred to in sub-
section (b)(2) that is attributable, as determined in 
accordance with regulations issued by the Secretary, 
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to the increased costs incurred in financing provision 
of sustainable building elements for the housing for 
which the mortgage was made, as compared to the 
costs that would have been incurred in financing the 
provision of other building elements for the housing 
for the same purposes that are commonly or conven-
tionally used but are not sustainable building ele-
ments. 
(3) GUARANTEED PORTION.—The term ‘‘guaran-
teed portion’’ means, with respect to an eligible mort-
gage guaranteed under this section, the green portion 
of the mortgage that is so guaranteed. 
(4) MORTGAGE.—The term ‘‘mortgage’’ has the 
meaning given such term in section 201 of the Na-
tional Housing Act (12 U.S.C. 1707). 
(5) MULTIFAMILY HOUSING.—The term ‘‘multi-
family housing’’ means a residential property con-
sisting of five or more dwelling units. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(7) SINGLE-FAMILY HOUSING.—The term ‘‘single- 
family housing’’ means a residential property con-
sisting of one to four dwelling units. 
(8) SUSTAINABLE
BUILDING
ELEMENT.—The 
term ‘‘sustainable building element’’ means such 
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building elements, as the Secretary shall define, that 
have energy efficiency or environmental sustainability 
qualities that are superior to such qualities for other 
building elements for the same purposes that are com-
monly or conventionally used. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated for costs (as such term is de-
fined in section 502 of the Federal Credit Reform Act of 
1990 (2 U.S.C. 661a) of guarantees under this section 
$500,000,000 for each of fiscal years 2010 through 2014. 
(i) REGULATIONS.—The Secretary shall issue any reg-
ulations necessary to carry out this section. 
SEC. 26. GREEN DIVIDEND PROGRAM FOR FEDERALLY AS-
SISTED RENTAL HOUSING. 
(a) AUTHORITY.—The Secretary shall establish a pro-
gram under this section to provide green dividends to own-
ers of covered federally assisted housing projects who under-
take utility cost-saving measures that result in utility cost 
savings for such housing. 
(b) GREEN DIVIDENDS.— 
(1) IN GENERAL.—A green dividend under this 
section with respect to a covered federally assisted 
housing project shall be an annual distribution, to the 
owner of the project, of an amount of the surplus 
project funds that is equal to the sum of— 
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(A) 50 percent of the annual utility cost 
savings resulting from the utility cost-saving 
measures conducted for the project; and 
(B) any reasonable costs, as determined by 
the Secretary pursuant to subsection (d)(4), in-
curred by the owner in carrying out the utility 
cost-saving measures, including required report-
ing and monitoring costs and financing costs in-
curred by the owner or a third party, in compli-
ance with guidelines established pursuant to sub-
section (d)(3). 
(2) ADDITIONAL TO STANDARD DISTRIBUTION.— 
Notwithstanding any other law or regulation relating 
to a limitation on distributions for a covered federally 
assisted housing project, a green dividend under this 
section shall be in addition to the standard distribu-
tion that the owner of the project is authorized to re-
ceive from the project pursuant to the regulations of 
the Secretary. 
(c) STANDARDS
FOR
MEASUREMENT
AND
MONI-
TORING.—In carrying out the program under this section, 
the Secretary shall establish and utilize the following stand-
ardized methods: 
(1) Methods that an owner of a covered federally 
assisted housing project may use to accurately meas-
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ure the baseline utility use of the project before under-
taking the utility cost-saving measures for the project. 
(2) Methods that an owner of a covered federally 
assisted housing project may use to effectively monitor 
reductions in the utility use of the project resulting 
from the completed utility cost-saving measures for 
the project. 
(3) Methods that an owner of a covered federally 
assisted housing project may use to track, and that 
the Secretary may use to verify, utility cost savings 
resulting from the utility cost-saving measures for the 
project that account for the effect of changes in utility 
costs and such other factors that the Secretary con-
siders necessary or appropriate. 
(d) OTHER REQUIREMENTS.— 
(1) APPLICATION
AND
SELECTION.—The Sec-
retary shall establish requirements for owners of cov-
ered federally assisted housing projects to apply for 
participation in the program under this section and 
shall select among such applications based upon selec-
tion criteria, which the Secretary shall establish. 
(2) COST-EFFECTIVENESS.—The Secretary shall 
establish guidelines to ensure that any utility cost- 
saving measures undertaken pursuant to the program 
under this section are cost-effective in relation to the 
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utility cost savings resulting from the measures and 
the green dividend provided under this section to the 
owner. 
(3) ENERGY
PERFORMANCE
CONTRACTS.—The 
Secretary shall establish guidelines for the use of en-
ergy performance contracting in carrying out utility 
cost-saving measures pursuant to the program under 
this section. 
(4) FINANCING COSTS.—The Secretary shall es-
tablish guidelines for the financing of the reasonable 
costs incurred by an owner of a covered federally as-
sisted housing project in carrying out utility cost-sav-
ing measures under the program under this section, 
and whether such costs, whether financed by the lim-
ited dividend owner or a third party, shall be repay-
able from project funds. 
(5) REPORTING.— 
(A) TO
SECRETARY.—The Secretary shall 
require each owner of a covered federally assisted 
housing project for which a green dividend is 
provided pursuant to the program under this 
section to submit to the Secretary such reports 
regarding the project, the utility cost-saving 
measures undertaken for the project, and the 
utility cost savings of the project in accordance 
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with such requirements as the Secretary shall es-
tablish. 
(B) TO
CONGRESS.—The Secretary shall 
submit reports to the Congress describing the im-
plementation and operation of the program 
under this section, as follows: 
(i) INITIAL
REPORT.—The Secretary 
shall submit reports describing the initial 
implementation and operation of the pro-
gram not later than the expiration of the 
180-day period beginning upon the date of 
the enactment of this Act. 
(ii) ANNUAL REPORTS.—Not later than 
the expiration of the 12-month period that 
begins upon the expiration of the period 
specified clause (i), and upon the expiration 
of each successive 12-month period there-
after, the Secretary shall submit a report 
describing the ongoing operation of the pro-
gram. 
(e) PREEMPTION OF CONFLICTING STATE LAWS LIM-
ITING DISTRIBUTIONS.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), no State or political subdivision of a State 
may establish, continue in effect, or enforce any law, 
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regulation, or administrative requirement that limits 
or restricts, to an amount that is less than the sum 
of the amounts provided for under paragraphs (1) 
and (2) of subsection (b), the amount of surplus 
project funds accruing after the date of the enactment 
of this section that may be distributed from any cov-
ered federally assisted housing project. 
(2) EXCEPTION
AND
WAIVER.—Paragraph (1) 
shall not apply to any law or regulation to the extent 
such law or regulation applies to— 
(A) a State-financed covered federally as-
sisted housing project; or 
(B) a covered federally assisted housing 
project for which the owner has elected to waive 
the applicability of paragraph (1). 
(f) DEFINITIONS.—For purposes of this section, the fol-
lowing definitions shall apply: 
(1) COVERED
FEDERALLY
ASSISTED
HOUSING 
PROJECT.—The term ‘‘covered federally assisted hous-
ing project’’ means any multifamily rental housing 
project that— 
(A) is provided any rental assistance, sub-
sidy, or other financial assistance by the Sec-
retary; and 
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100 
(B) that is subject to a limitation on dis-
tributions to the owner, whether for-profit or 
non-for-profit, of project funds under section 
200.106(a), 
236.1(c), 
880.205(a) 
or 
(b), 
881.205(a) or (b), or 883.306(a) or (b) of title 24 
of the Code of Federal Regulations, or any other 
statute or regulation applicable to the project. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(3) SURPLUS PROJECT FUNDS.—The term ‘‘sur-
plus project funds’’ means, with respect to a covered 
federally assisted housing project, the net revenue of 
the project after all project expenses have been paid, 
or funds have been set aside for the payment thereof, 
and any reserve requirements applicable to the project 
have been met. 
(4) UTILITY COST SAVINGS.—The term ‘‘utility 
cost savings’’ means, with respect to utility cost-sav-
ing measures undertaken for a covered federally as-
sisted housing project, the difference between— 
(A) the energy or water costs that would 
have been incurred for the project if such utility 
cost-saving measures were not completed; and 
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101 
(B) the actual energy or water costs for the 
project after completion of the utility cost-saving 
measures. 
(5) UTILITY COST-SAVING MEASURES.—The term 
‘‘utility cost-saving measures’’ means, with respect to 
a covered federally assisted housing project, any reha-
bilitation, renovation, retrofit, improvement, or alter-
ation for the project that incorporates any technology, 
equipment, fixture, or material, or promotes any 
practice, designed to reduce the energy or water con-
sumption of the project. Such measures shall utilize 
Energy Star or WaterSense rated products or devices 
at a minimum. In cases in which there is no Energy 
Star or WaterSense designated product or device, the 
Secretary shall designate the minimum standards. 
(g) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the date of the enactment 
of this Act, the Secretary shall issue any regulations nec-
essary to carry out this section. 
SEC. 27. USE OF RESIDUAL RECEIPTS AND RESERVE FOR 
REPLACEMENTS FUNDS FOR GREEN RETRO-
FITS 
OF 
FEDERALLY 
ASSISTED 
RENTAL 
HOUSING. 
The Secretary of Housing and Urban Development 
shall— 
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102 
(1) review the regulations and agreements of the 
Department of Housing and Urban Development con-
cerning residual receipts accounts in federally assisted 
rental housing that is subject to a limitation on dis-
tributions, to the owner, of project funds under section 
200.106(a), 236.1(c), 880.205, 881.205, or 883.306 of 
title 24 of the Code of Federal Regulations, or any 
other statute or regulation applicable to the project, to 
clarify whether the use of such funds for other project 
purposes includes activities related to the energy effi-
ciency at properties with such residual receipts ac-
counts; and 
(2) revise its policies with regard to the use of 
reserve for replacement funds to encourage the use of 
such reserves, where practical, for energy efficiency 
items. 
SEC. 28. STUDY ON BUILDING CODES EFFECTS ON CON-
STRUCTION 
AND 
INSTALLATION 
OF 
DIS-
TRIBUTIVE ENERGY GENERATION MEASURES 
AND WATER EFFICIENCY MEASURES. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study to analyze to what extent pro-
visions of State and local building codes create obstacles or 
otherwise conflict with efforts to enable and encourage the 
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