H. R. 3221—2 
Sec. 1131. Affordable housing programs. 
Sec. 1132. Financial education and counseling. 
Sec. 1133. Transfer and rights of certain HUD employees. 
Subtitle C—Prompt Corrective Action 
Sec. 1141. Critical capital levels. 
Sec. 1142. Capital classifications. 
Sec. 1143. Supervisory actions applicable to undercapitalized regulated entities. 
Sec. 1144. Supervisory actions applicable to significantly undercapitalized regu-
lated entities. 
Sec. 1145. Authority over critically undercapitalized regulated entities. 
Subtitle D—Enforcement Actions 
Sec. 1151. Cease and desist proceedings. 
Sec. 1152. Temporary cease and desist proceedings. 
Sec. 1153. Removal and prohibition authority. 
Sec. 1154. Enforcement and jurisdiction. 
Sec. 1155. Civil money penalties. 
Sec. 1156. Criminal penalty. 
Sec. 1157. Notice after separation from service. 
Sec. 1158. Subpoena authority. 
Subtitle E—General Provisions 
Sec. 1161. Conforming and technical amendments. 
Sec. 1162. Presidentially-appointed directors of enterprises. 
Sec. 1163. Effective date. 
TITLE II—FEDERAL HOME LOAN BANKS 
Sec. 1201. Recognition of distinctions between the enterprises and the Federal 
Home Loan Banks. 
Sec. 1202. Directors. 
Sec. 1203. Definitions. 
Sec. 1204. Agency oversight of Federal Home Loan Banks. 
Sec. 1205. Housing goals. 
Sec. 1206. Community development financial institutions. 
Sec. 1207. Sharing of information among Federal Home Loan Banks. 
Sec. 1208. Exclusion from certain requirements. 
Sec. 1209. Voluntary mergers. 
Sec. 1210. Authority to reduce districts. 
Sec. 1211. Community financial institution members. 
Sec. 1212. Public use database; reports to Congress. 
Sec. 1213. Semiannual reports. 
Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank. 
Sec. 1215. Study and report to Congress on securitization of acquired member as-
sets. 
Sec. 1216. Technical and conforming amendments. 
Sec. 1217. Study on Federal Home Loan Bank advances. 
Sec. 1218. Federal Home Loan Bank refinancing authority for certain residential 
mortgage loans. 
TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF 
OFHEO AND THE FEDERAL HOUSING FINANCE BOARD 
Subtitle A—OFHEO 
Sec. 1301. Abolishment of OFHEO. 
Sec. 1302. Continuation and coordination of certain actions. 
Sec. 1303. Transfer and rights of employees of OFHEO. 
Sec. 1304. Transfer of property and facilities. 
Subtitle B—Federal Housing Finance Board 
Sec. 1311. Abolishment of the Federal Housing Finance Board. 
Sec. 1312. Continuation and coordination of certain actions. 
Sec. 1313. Transfer and rights of employees of the Federal Housing Finance Board. 
Sec. 1314. Transfer of property and facilities. 
TITLE IV—HOPE FOR HOMEOWNERS 
Sec. 1401. Short title. 
Sec. 1402. Establishment of HOPE for Homeowners Program. 
Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage loans. 
Sec. 1404. Revised standards for FHA appraisers.
H. R. 3221—3 
TITLE V—S.A.F.E. MORTGAGE LICENSING ACT 
Sec. 1501. Short title. 
Sec. 1502. Purposes and methods for establishing a mortgage licensing system and 
registry. 
Sec. 1503. Definitions. 
Sec. 1504. License or registration required. 
Sec. 1505. State license and registration application and issuance. 
Sec. 1506. Standards for State license renewal. 
Sec. 1507. System of registration administration by Federal agencies. 
Sec. 1508. Secretary of Housing and Urban Development backup authority to es-
tablish a loan originator licensing system. 
Sec. 1509. Backup authority to establish a nationwide mortgage licensing and reg-
istry system. 
Sec. 1510. Fees. 
Sec. 1511. Background checks of loan originators. 
Sec. 1512. Confidentiality of information. 
Sec. 1513. Liability provisions. 
Sec. 1514. Enforcement under HUD backup licensing system. 
Sec. 1515. State examination authority. 
Sec. 1516. Reports and recommendations to Congress. 
Sec. 1517. Study and reports on defaults and foreclosures. 
TITLE VI—MISCELLANEOUS 
Sec. 1601. Study and reports on guarantee fees. 
Sec. 1602. Study and report on default risk evaluation. 
Sec. 1603. Conversion of HUD contracts. 
Sec. 1604. Bridge depository institutions. 
Sec. 1605. Sense of the Senate. 
DIVISION B—FORECLOSURE PREVENTION 
Sec. 2001. Short title. 
Sec. 2002. Emergency designation. 
TITLE I—FHA MODERNIZATION ACT OF 2008 
Sec. 2101. Short title. 
Subtitle A—Building American Homeownership 
Sec. 2111. Short title. 
Sec. 2112. Maximum principal loan obligation. 
Sec. 2113. Cash investment requirement and prohibition of seller-funded down pay-
ment assistance. 
Sec. 2114. Mortgage insurance premiums. 
Sec. 2115. Rehabilitation loans. 
Sec. 2116. Discretionary action. 
Sec. 2117. Insurance of condominiums. 
Sec. 2118. Mutual Mortgage Insurance Fund. 
Sec. 2119. Hawaiian home lands and Indian reservations. 
Sec. 2120. Conforming and technical amendments. 
Sec. 2121. Insurance of mortgages. 
Sec. 2122. Home equity conversion mortgages. 
Sec. 2123. Energy efficient mortgages program. 
Sec. 2124. Pilot program for automated process for borrowers without sufficient 
credit history. 
Sec. 2125. Homeownership preservation. 
Sec. 2126. Use of FHA savings for improvements in FHA technologies, procedures, 
processes, program performance, staffing, and salaries. 
Sec. 2127. Post-purchase housing counseling eligibility improvements. 
Sec. 2128. Pre-purchase homeownership counseling demonstration. 
Sec. 2129. Fraud prevention. 
Sec. 2130. Limitation on mortgage insurance premium increases. 
Sec. 2131. Savings provision. 
Sec. 2132. Implementation. 
Sec. 2133. Moratorium on implementation of risk-based premiums. 
Subtitle B—Manufactured Housing Loan Modernization 
Sec. 2141. Short title. 
Sec. 2142. Purposes. 
Sec. 2143. Exception to limitation on financial institution portfolio. 
Sec. 2144. Insurance benefits. 
Sec. 2145. Maximum loan limits.
H. R. 3221—4 
Sec. 2146. Insurance premiums. 
Sec. 2147. Technical corrections. 
Sec. 2148. Revision of underwriting criteria. 
Sec. 2149. Prohibition against kickbacks and unearned fees. 
Sec. 2150. Leasehold requirements. 
TITLE II—MORTGAGE FORECLOSURE PROTECTIONS FOR 
SERVICEMEMBERS 
Sec. 2201. Temporary increase in maximum loan guaranty amount for certain 
housing loans guaranteed by the Secretary of Veterans Affairs. 
Sec. 2202. Counseling on mortgage foreclosures for members of the Armed Forces 
returning from service abroad. 
Sec. 2203. Enhancement of protections for servicemembers relating to mortgages 
and mortgage foreclosures. 
TITLE III—EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 
ABANDONED AND FORECLOSED HOMES 
Sec. 2301. Emergency assistance for the redevelopment of abandoned and fore-
closed homes. 
Sec. 2302. Nationwide distribution of resources. 
Sec. 2303. Limitation on use of funds with respect to eminent domain. 
Sec. 2304. Limitation on distribution of funds. 
Sec. 2305. Counseling intermediaries. 
TITLE IV—HOUSING COUNSELING RESOURCES 
Sec. 2401. Housing counseling resources. 
Sec. 2402. Credit counseling. 
TITLE V—MORTGAGE DISCLOSURE IMPROVEMENT ACT 
Sec. 2501. Short title. 
Sec. 2502. Enhanced mortgage loan disclosures. 
Sec. 2503. Community Development Investment Authority for depository institu-
tions. 
TITLE VI—VETERANS HOUSING MATTERS 
Sec. 2601. Home improvements and structural alterations for totally disabled mem-
bers of the Armed Forces before discharge or release from the Armed 
Forces. 
Sec. 2602. Eligibility for specially adapted housing benefits and assistance for 
members of the Armed Forces with service-connected disabilities and in-
dividuals residing outside the United States. 
Sec. 2603. Specially adapted housing assistance for individuals with severe burn in-
juries. 
Sec. 2604. Extension of assistance for individuals residing temporarily in housing 
owned by a family member. 
Sec. 2605. Increase in specially adapted housing benefits for disabled veterans. 
Sec. 2606. Report on specially adapted housing for disabled individuals. 
Sec. 2607. Report on specially adapted housing assistance for individuals who re-
side in housing owned by a family member on permanent basis. 
Sec. 2608. Definition of annual income for purposes of section 8 and other public 
housing programs. 
Sec. 2609. Payment of transportation of baggage and household effects for members 
of the Armed Forces who relocate due to foreclosure of leased housing. 
TITLE VII—SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK 
REDUCTION ACT 
Sec. 2701. Short title. 
Sec. 2702. Public housing agency plans for certain qualified public housing agen-
cies. 
TITLE VIII—HOUSING PRESERVATION 
Subtitle A—Preservation Under Federal Housing Programs 
Sec. 2801. Clarification of disposition of certain properties. 
Sec. 2802. Eligibility of certain projects for enhanced voucher assistance. 
Sec. 2803. Transfer of certain rental assistance contracts. 
Sec. 2804. Public housing disaster relief. 
Sec. 2805. Preservation of certain affordable housing. 
Subtitle B—Coordination of Federal Housing Programs and Tax Incentives for 
Housing 
Sec. 2831. Short title.
H. R. 3221—5 
Sec. 2832. Approvals by Department of Housing and Urban Development. 
Sec. 2833. Project approvals by rural housing service. 
Sec. 2834. Use of FHA loans with housing tax credits. 
Sec. 2835. Other HUD programs. 
TITLE IX—MISCELLANEOUS 
Sec. 2901. Homeless assistance. 
Sec. 2902. Increasing access and understanding of energy efficient mortgages. 
DIVISION C—TAX-RELATED PROVISIONS 
Sec. 3000. Short title; etc. 
TITLE I—HOUSING TAX INCENTIVES 
Subtitle A—Multi-Family Housing 
PART I—LOW-INCOME HOUSING TAX CREDIT 
Sec. 3001. Temporary increase in volume cap for low-income housing tax credit. 
Sec. 3002. Determination of credit rate. 
Sec. 3003. Modifications to definition of eligible basis. 
Sec. 3004. Other simplification and reform of low-income housing tax incentives. 
Sec. 3005. Treatment of military basic pay. 
PART II—MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES 
Sec. 3007. Recycling of tax-exempt debt for financing residential rental projects. 
Sec. 3008. Coordination of certain rules applicable to low-income housing credit and 
qualified residential rental project exempt facility bonds. 
PART III—REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX- 
EXEMPT HOUSING BONDS 
Sec. 3009. Hold harmless for reductions in area median gross income. 
Sec. 3010. Exception to annual current income determination requirement where 
determination not relevant. 
Subtitle B—Single Family Housing 
Sec. 3011. First-time homebuyer credit. 
Sec. 3012. Additional standard deduction for real property taxes for nonitemizers. 
Subtitle C—General Provisions 
Sec. 3021. Temporary liberalization of tax-exempt housing bond rules. 
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt housing 
bonds, low-income housing tax credit, and rehabilitation credit. 
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for treatment as 
tax-exempt bonds. 
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign affidavits. 
Sec. 3025. Modification of definition of tax-exempt use property for purposes of the 
rehabilitation credit. 
Sec. 3026. Extension of special rule for mortgage revenue bonds for residences lo-
cated in disaster areas. 
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery rebates for in-
dividuals. 
TITLE II—REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS 
Subtitle A—Foreign Currency and Other Qualified Activities 
Sec. 3031. Revisions to REIT income tests. 
Sec. 3032. Revisions to REIT asset tests. 
Sec. 3033. Conforming foreign currency revisions. 
Subtitle B—Taxable REIT Subsidiaries 
Sec. 3041. Conforming taxable REIT subsidiary asset test. 
Subtitle C—Dealer Sales 
Sec. 3051. Holding period under safe harbor. 
Sec. 3052. Determining value of sales under safe harbor. 
Subtitle D—Health Care REITs 
Sec. 3061. Conformity for health care facilities. 
Subtitle E—Effective Dates 
Sec. 3071. Effective dates.
H. R. 3221—6 
TITLE III—REVENUE PROVISIONS 
Subtitle A—General Provisions 
Sec. 3081. Election to accelerate the AMT and research credits in lieu of bonus de-
preciation. 
Sec. 3082. Certain GO Zone incentives. 
Sec. 3083. Increase in statutory limit on the public debt. 
Subtitle B—Revenue Offsets 
Sec. 3091. Returns relating to payments made in settlement of payment card and 
third party network transactions. 
Sec. 3092. Gain from sale of principal residence allocated to nonqualified use not 
excluded from income. 
Sec. 3093. Delay in application of worldwide allocation of interest. 
Sec. 3094. Time for payment of corporate estimated taxes. 
DIVISION A—HOUSING FINANCE 
REFORM 
SEC. 1001. SHORT TITLE. 
This division may be cited as the ‘‘Federal Housing Finance 
Regulatory Reform Act of 2008’’. 
SEC. 1002. DEFINITIONS. 
(a) FEDERAL SAFETY AND SOUNDNESS ACT DEFINITIONS.—Sec-
tion 1303 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4502) is amended— 
(1) in each of paragraphs (8), (9), (10), and (19), by striking 
‘‘Secretary’’ each place that term appears and inserting 
‘‘Director’’; 
(2) by redesignating paragraphs (16) through (19) as para-
graphs (21) through (24), respectively; 
(3) by striking paragraphs (13) through (15) and inserting 
the following: 
‘‘(19) OFFICE OF FINANCE.—The term ‘Office of Finance’ 
means the Office of Finance of the Federal Home Loan Bank 
System (or any successor thereto). 
‘‘(20) REGULATED
ENTITY.—The term ‘regulated entity’ 
means— 
‘‘(A) the Federal National Mortgage Association and 
any affiliate thereof; 
‘‘(B) the Federal Home Loan Mortgage Corporation 
and any affiliate thereof; and 
‘‘(C) any Federal Home Loan Bank.’’; 
(4) by redesignating paragraphs (11) and (12) as paragraphs 
(17) and (18), respectively; 
(5) by redesignating paragraph (7) as paragraph (12); 
(6) by redesignating paragraphs (8) through (10) as para-
graphs (14) through (16), respectively; 
(7) in paragraph (5)— 
(A) by striking ‘‘(5)’’ and inserting ‘‘(9)’’; and 
(B) by striking ‘‘Office of Federal Housing Enterprise 
Oversight of the Department of Housing and Urban 
Development’’ and inserting ‘‘Federal Housing Finance 
Agency’’; 
(8) by redesignating paragraph (6) as paragraph (10); 
(9) by redesignating paragraphs (2) through (4) as para-
graphs (5) through (7), respectively;
H. R. 3221—7 
(10) by inserting after paragraph (7), as redesignated, the 
following: 
‘‘(8) DEFAULT; IN DANGER OF DEFAULT.— 
‘‘(A) DEFAULT.—The term ‘default’ means, with respect 
to a regulated entity, any adjudication or other official 
determination by any court of competent jurisdiction, or 
the Agency, pursuant to which a conservator, receiver, 
limited-life regulated entity, or legal custodian is appointed 
for a regulated entity. 
‘‘(B) IN
DANGER
OF
DEFAULT.—The term ‘in danger 
of default’ means a regulated entity with respect to which, 
in the opinion of the Agency— 
‘‘(i) the regulated entity is not likely to be able 
to pay the obligations of the regulated entity in the 
normal course of business; or 
‘‘(ii) the regulated entity— 
‘‘(I) has incurred or is likely to incur losses 
that will deplete all or substantially all of its cap-
ital; and 
‘‘(II) there is no reasonable prospect that the 
capital of the regulated entity will be replenished.’’; 
(11) by inserting after paragraph (1) the following: 
‘‘(2) AGENCY.—The term ‘Agency’ means the Federal 
Housing Finance Agency established under section 1311. 
‘‘(3) AUTHORIZING STATUTES.—The term ‘authorizing stat-
utes’ means— 
‘‘(A) the Federal National Mortgage Association 
Charter Act; 
‘‘(B) the Federal Home Loan Mortgage Corporation 
Act; and 
‘‘(C) the Federal Home Loan Bank Act. 
‘‘(4) BOARD.—The term ‘Board’ means the Federal Housing 
Finance Oversight Board established under section 1313A.’’; 
(12) by inserting after paragraph (10), as redesignated by 
this section, the following: 
‘‘(11) ENTITY-AFFILIATED PARTY.—The term ‘entity-affiliated 
party’ means— 
‘‘(A) any director, officer, employee, or controlling stock-
holder of, or agent for, a regulated entity; 
‘‘(B) any shareholder, affiliate, consultant, or joint ven-
ture partner of a regulated entity, and any other person, 
as determined by the Director (by regulation or on a case- 
by-case basis) that participates in the conduct of the affairs 
of a regulated entity, provided that a member of a Federal 
Home Loan Bank shall not be deemed to have participated 
in the affairs of that Bank solely by virtue of being a 
shareholder of, and obtaining advances from, that Bank; 
‘‘(C) any independent contractor for a regulated entity 
(including any attorney, appraiser, or accountant), if— 
‘‘(i) the independent contractor knowingly or reck-
lessly participates in— 
‘‘(I) any violation of any law or regulation; 
‘‘(II) any breach of fiduciary duty; or 
‘‘(III) any unsafe or unsound practice; and 
‘‘(ii) such violation, breach, or practice caused, or 
is likely to cause, more than a minimal financial loss
H. R. 3221—8 
to, or a significant adverse effect on, the regulated 
entity; 
‘‘(D) any not-for-profit corporation that receives its 
principal funding, on an ongoing basis, from any regulated 
entity; and 
‘‘(E) the Office of Finance.’’; 
(13) by inserting after paragraph (12), as redesignated by 
this section, the following: 
‘‘(13) LIMITED-LIFE REGULATED ENTITY.—The term ‘limited- 
life regulated entity’ means an entity established by the Agency 
under section 1367(i) with respect to a Federal Home Loan 
Bank in default or in danger of default or with respect to 
an enterprise in default or in danger of default.’’; and 
(14) by adding at the end the following: 
‘‘(25) VIOLATION.—The term ‘violation’ includes any action 
(alone or in combination with another or others) for or toward 
causing, bringing about, participating in, counseling, or aiding 
or abetting a violation.’’. 
(b) REFERENCES IN THIS ACT.—As used in this Act, unless 
otherwise specified— 
(1) the term ‘‘Agency’’ means the Federal Housing Finance 
Agency; 
(2) the term ‘‘Director’’ means the Director of the Agency; 
and 
(3) the terms ‘‘enterprise’’, ‘‘regulated entity’’, and ‘‘author-
izing statutes’’ have the same meanings as in section 1303 
of the Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992, as amended by this Act. 
TITLE I—REFORM OF REGULATION OF 
ENTERPRISES 
Subtitle A—Improvement of Safety and 
Soundness Supervision 
SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
AGENCY. 
The Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by striking 
sections 1311 and 1312 and inserting the following: 
‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
AGENCY. 
‘‘(a) ESTABLISHMENT.—There is established the Federal Housing 
Finance Agency, which shall be an independent agency of the Fed-
eral Government. 
‘‘(b) GENERAL SUPERVISORY AND REGULATORY AUTHORITY.— 
‘‘(1) IN GENERAL.—Each regulated entity shall, to the extent 
provided in this title, be subject to the supervision and regula-
tion of the Agency. 
‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE MAC, THE FED-
ERAL HOME LOAN BANKS, AND THE OFFICE OF FINANCE.—The 
Director shall have general regulatory authority over each regu-
lated entity and the Office of Finance, and shall exercise such
H. R. 3221—9 
general regulatory authority, including such duties and authori-
ties set forth under section 1313, to ensure that the purposes 
of this Act, the authorizing statutes, and any other applicable 
law are carried out. 
‘‘(c) SAVINGS PROVISION.—The authority of the Director to take 
actions under subtitles B and C shall not in any way limit the 
general supervisory and regulatory authority granted to the Director 
under subsection (b). 
‘‘SEC. 1312. DIRECTOR. 
‘‘(a) ESTABLISHMENT
OF POSITION.—There is established the 
position of the Director of the Agency, who shall be the head 
of the Agency. 
‘‘(b) APPOINTMENT; TERM.— 
‘‘(1) APPOINTMENT.—The Director shall be appointed by 
the President, by and with the advice and consent of the Senate, 
from among individuals who are citizens of the United States, 
have a demonstrated understanding of financial management 
or oversight, and have a demonstrated understanding of capital 
markets, including the mortgage securities markets and 
housing finance. 
‘‘(2) TERM.—The Director shall be appointed for a term 
of 5 years, unless removed before the end of such term for 
cause by the President. 
‘‘(3) VACANCY.—A vacancy in the position of Director that 
occurs before the expiration of the term for which a Director 
was appointed shall be filled in the manner established under 
paragraph (1), and the Director appointed to fill such vacancy 
shall be appointed only for the remainder of such term. 
‘‘(4) SERVICE AFTER END OF TERM.—An individual may serve 
as the Director after the expiration of the term for which 
appointed until a successor has been appointed. 
‘‘(5) 
TRANSITIONAL
PROVISION.—Notwithstanding 
para-
graphs (1) and (2), during the period beginning on the effective 
date of the Federal Housing Finance Regulatory Reform Act 
of 2008, and ending on the date on which the Director is 
appointed and confirmed, the person serving as the Director 
of the Office of Federal Housing Enterprise Oversight of the 
Department of Housing and Urban Development on that effec-
tive date shall act for all purposes as, and with the full powers 
of, the Director. 
‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF ENTERPRISE REGULA-
TION.— 
‘‘(1) IN GENERAL.—The Agency shall have a Deputy Director 
of the Division of Enterprise Regulation, who shall be des-
ignated by the Director from among individuals who are citizens 
of the United States, have a demonstrated understanding of 
financial management or oversight, and have a demonstrated 
understanding of mortgage securities markets and housing 
finance. 
‘‘(2) FUNCTIONS.—The Deputy Director of the Division of 
Enterprise Regulation shall have such functions, powers, and 
duties with respect to the oversight of the enterprises as the 
Director shall prescribe. 
‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF FEDERAL HOME 
LOAN BANK REGULATION.—
H. R. 3221—10 
‘‘(1) IN GENERAL.—The Agency shall have a Deputy Director 
of the Division of Federal Home Loan Bank Regulation, who 
shall be designated by the Director from among individuals 
who are citizens of the United States, have a demonstrated 
understanding of financial management or oversight, and have 
a demonstrated understanding of the Federal Home Loan Bank 
System and housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director of the Division of 
Federal Home Loan Bank Regulation shall have such functions, 
powers, and duties with respect to the oversight of the Federal 
Home Loan Banks as the Director shall prescribe. 
‘‘(e) DEPUTY DIRECTOR FOR HOUSING MISSION AND GOALS.— 
‘‘(1) IN GENERAL.—The Agency shall have a Deputy Director 
for Housing Mission and Goals, who shall be designated by 
the Director from among individuals who are citizens of the 
United States, and have a demonstrated understanding of the 
housing markets and housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director for Housing Mission 
and Goals shall have such functions, powers, and duties with 
respect to the oversight of the housing mission and goals of 
the enterprises, and with respect to oversight of the housing 
finance and community and economic development mission of 
the Federal Home Loan Banks, as the Director shall prescribe. 
‘‘(3) 
CONSIDERATIONS.—In 
exercising 
such 
functions, 
powers, and duties, the Deputy Director for Housing Mission 
and Goals shall consider the differences between the enterprises 
and the Federal Home Loan Banks, including those described 
in section 1313(d). 
‘‘(f) ACTING DIRECTOR.—In the event of the death, resignation, 
sickness, or absence of the Director, the President shall designate 
either the Deputy Director of the Division of Enterprise Regulation, 
the Deputy Director of the Division of Federal Home Loan Bank 
Regulation, or the Deputy Director for Housing Mission and Goals, 
to serve as acting Director until the return of the Director, or 
the appointment of a successor pursuant to subsection (b). 
‘‘(g) LIMITATIONS.—The Director and each of the Deputy Direc-
tors may not— 
‘‘(1) have any direct or indirect financial interest in any 
regulated entity or entity-affiliated party; 
‘‘(2) hold any office, position, or employment in any regu-
lated entity or entity-affiliated party; or 
‘‘(3) have served as an executive officer or director of any 
regulated entity or entity-affiliated party at any time during 
the 3-year period preceding the date of appointment or designa-
tion of such individual as Director or Deputy Director, as 
applicable.’’. 
SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR. 
(a) IN GENERAL.—Section 1313 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513) 
is amended to read as follows: 
‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR. 
‘‘(a) DUTIES.— 
‘‘(1) PRINCIPAL DUTIES.—The principal duties of the Director 
shall be— 
‘‘(A) to oversee the prudential operations of each regu-
lated entity; and
H. R. 3221—11 
‘‘(B) to ensure that— 
‘‘(i) each regulated entity operates in a safe and 
sound manner, including maintenance of adequate cap-
ital and internal controls; 
‘‘(ii) the operations and activities of each regulated 
entity foster liquid, efficient, competitive, and resilient 
national housing finance markets (including activities 
relating to mortgages on housing for low- and mod-
erate-income families involving a reasonable economic 
return that may be less than the return earned on 
other activities); 
‘‘(iii) each regulated entity complies with this title 
and the rules, regulations, guidelines, and orders 
issued under this title and the authorizing statutes; 
‘‘(iv) each regulated entity carries out its statutory 
mission only through activities that are authorized 
under and consistent with this title and the authorizing 
statutes; and 
‘‘(v) the activities of each regulated entity and 
the manner in which such regulated entity is operated 
are consistent with the public interest. 
‘‘(2) SCOPE OF AUTHORITY.—The authority of the Director 
shall include the authority— 
‘‘(A) to review and, if warranted based on the principal 
duties described in paragraph (1), reject any acquisition 
or transfer of a controlling interest in a regulated entity; 
and 
‘‘(B) to exercise such incidental powers as may be nec-
essary or appropriate to fulfill the duties and responsibil-
ities of the Director in the supervision and regulation of 
each regulated entity. 
‘‘(b) DELEGATION OF AUTHORITY.—The Director may delegate 
to officers and employees of the Agency any of the functions, powers, 
or duties of the Director, as the Director considers appropriate. 
‘‘(c) LITIGATION AUTHORITY.— 
‘‘(1) IN GENERAL.—In enforcing any provision of this title, 
any regulation or order prescribed under this title, or any 
other provision of law, rule, regulation, or order, or in any 
other action, suit, or proceeding to which the Director is a 
party or in which the Director is interested, and in the adminis-
tration of conservatorships and receiverships, the Director may 
act in the Director’s own name and through the Director’s 
own attorneys. 
‘‘(2) SUBJECT TO SUIT.—Except as otherwise provided by 
law, the Director shall be subject to suit (other than suits 
on claims for money damages) by a regulated entity with respect 
to any matter under this title or any other applicable provision 
of law, rule, order, or regulation under this title, in the United 
States district court for the judicial district in which the regu-
lated entity has its principal place of business, or in the United 
States District Court for the District of Columbia, and the 
Director may be served with process in the manner prescribed 
by the Federal Rules of Civil Procedure.’’. 
(b) INDEPENDENCE
IN CONGRESSIONAL TESTIMONY
AND REC-
OMMENDATIONS.—Section 111 of Public Law 93–495 (12 U.S.C. 250) 
is amended by striking ‘‘the Federal Housing Finance Board’’ and 
inserting ‘‘the Director of the Federal Housing Finance Agency’’.
H. R. 3221—12 
SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD. 
(a) IN GENERAL.—The Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by inserting after section 1313 the following: 
‘‘SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD. 
‘‘(a) IN GENERAL.—There is established the Federal Housing 
Finance Oversight Board, which shall advise the Director with 
respect to overall strategies and policies in carrying out the duties 
of the Director under this title. 
‘‘(b) LIMITATIONS.—The Board may not exercise any executive 
authority, and the Director may not delegate to the Board any 
of the functions, powers, or duties of the Director. 
‘‘(c) COMPOSITION.—The Board shall be comprised of 4 members, 
of whom— 
‘‘(1) 1 member shall be the Secretary of the Treasury; 
‘‘(2) 1 member shall be the Secretary of Housing and Urban 
Development; 
‘‘(3) 1 member shall be the Chairman of the Securities 
and Exchange Commission; and 
‘‘(4) 1 member shall be the Director, who shall serve as 
the Chairperson of the Board. 
‘‘(d) MEETINGS.— 
‘‘(1) IN GENERAL.—The Board shall meet upon notice by 
the Director, but in no event shall the Board meet less fre-
quently than once every 3 months. 
‘‘(2) SPECIAL
MEETINGS.—Either the Secretary of the 
Treasury, the Secretary of Housing and Urban Development, 
or the Chairman of the Securities and Exchange Commission 
may, upon giving written notice to the Director, require a 
special meeting of the Board. 
‘‘(e) TESTIMONY.—On an annual basis, the Board shall testify 
before Congress regarding— 
‘‘(1) the safety and soundness of the regulated entities; 
‘‘(2) any material deficiencies in the conduct of the oper-
ations of the regulated entities; 
‘‘(3) the overall operational status of the regulated entities; 
‘‘(4) an evaluation of the performance of the regulated 
entities in carrying out their respective missions; 
‘‘(5) operations, resources, and performance of the Agency; 
and 
‘‘(6) such other matters relating to the Agency and its 
fulfillment of its mission, as the Board determines appro-
priate.’’. 
(b) ANNUAL REPORT OF THE DIRECTOR.—Section 1319B(a) of 
the Federal Housing Enterprises Financial Safety and Soundness 
Act of 1992 (12 U.S.C. 4521(a)) is amended— 
(1) by striking ‘‘enterprise’’ each place that term appears 
and inserting ‘‘regulated entity’’; 
(2) by striking ‘‘enterprises’’ each place that term appears 
and inserting ‘‘regulated entities’’; 
(3) in paragraph (3), by striking ‘‘; and’’ and inserting 
a semicolon; 
(4) in paragraph (4), by striking ‘‘1994.’’ and inserting 
‘‘1994; and’’; and 
(5) by adding at the end the following:
H. R. 3221—13 
‘‘(5) the assessment of the Board or any of its members 
with respect to— 
‘‘(A) the safety and soundness of the regulated entities; 
‘‘(B) any material deficiencies in the conduct of the 
operations of the regulated entities; 
‘‘(C) the overall operational status of the regulated 
entities; and 
‘‘(D) an evaluation of the performance of the regulated 
entities in carrying out their respective missions; 
‘‘(6) operations, resources, and performance of the Agency; 
and 
‘‘(7) such other matters relating to the Agency and the 
fulfillment of its mission.’’. 
SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTI-
TIES. 
(a) IN GENERAL.—Section 1314 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) 
is amended— 
(1) in the section heading, by striking ‘‘ENTERPRISES’’ and 
inserting ‘‘REGULATED ENTITIES’’; 
(2) by striking ‘‘an enterprise’’ each place that term appears 
and inserting ‘‘a regulated entity’’; 
(3) by striking ‘‘the enterprise’’ and inserting ‘‘the regulated 
entity’’; 
(4) in subsection (a)— 
(A) by striking the subsection heading and all that 
follows through ‘‘and operations’’ in paragraph (1) and 
inserting the following: 
‘‘(a) REGULAR AND SPECIAL REPORTS.— 
‘‘(1) REGULAR REPORTS.—The Director may require, by gen-
eral or specific orders, a regulated entity to submit regular 
reports, including financial statements determined on a fair 
value basis, on the condition (including financial condition), 
management, activities, or operations of the regulated entity, 
as the Director considers appropriate’’; and 
(B) in paragraph (2)— 
(i) by inserting ‘‘, by general or specific orders,’’ 
after ‘‘may also require’’; and 
(ii) by striking ‘‘whenever’’ and inserting ‘‘on any 
of the topics specified in paragraph (1) or any other 
relevant topics, if’’; and 
(5) by adding at the end the following: 
‘‘(c) PENALTIES FOR FAILURE TO MAKE REPORTS.— 
‘‘(1) VIOLATIONS.—It shall be a violation of this section 
for any regulated entity— 
‘‘(A) to fail to make, transmit, or publish any report 
or obtain any information required by the Director under 
this section, section 309(k) of the Federal National Mort-
gage Association Charter Act, section 307(c) of the Federal 
Home Loan Mortgage Corporation Act, or section 20 of 
the Federal Home Loan Bank Act, within the period of 
time specified in such provision of law or otherwise by 
the Director; or 
‘‘(B) to submit or publish any false or misleading report 
or information under this section. 
‘‘(2) PENALTIES.—
H. R. 3221—14 
‘‘(A) FIRST TIER.— 
‘‘(i) IN GENERAL.—A violation described in para-
graph (1) shall be subject to a penalty of not more 
than $2,000 for each day during which such violation 
continues, in any case in which— 
‘‘(I) the subject regulated entity maintains 
procedures reasonably adapted to avoid any inad-
vertent error and the violation was unintentional 
and a result of such an error; or 
‘‘(II) the violation was an inadvertent trans-
mittal or publication of any report which was mini-
mally late. 
‘‘(ii) BURDEN
OF
PROOF.—For purposes of this 
subparagraph, the regulated entity shall have the bur-
den of proving that the error was inadvertent or that 
a report was inadvertently transmitted or published 
late. 
‘‘(B) SECOND TIER.—A violation described in paragraph 
(1) shall be subject to a penalty of not more than $20,000 
for each day during which such violation continues or such 
false or misleading information is not corrected, in any 
case that is not addressed in subparagraph (A) or (C). 
‘‘(C) THIRD TIER.—A violation described in paragraph 
(1) shall be subject to a penalty of not more than $1,000,000 
per day for each day during which such violation continues 
or such false or misleading information is not corrected, 
in any case in which the subject regulated entity committed 
such violation knowingly or with reckless disregard for 
the accuracy of any such information or report. 
‘‘(3) ASSESSMENTS.—Any penalty imposed under this sub-
section shall be in lieu of a penalty under section 1376, but 
shall be assessed and collected by the Director in the manner 
provided in section 1376 for penalties imposed under that sec-
tion, and any such assessment (including the determination 
of the amount of the penalty) shall be otherwise subject to 
the provisions of section 1376. 
‘‘(4) HEARING.—A regulated entity against which a penalty 
is assessed under this section shall be afforded an agency 
hearing if the regulated entity submits a request for a hearing 
not later than 20 days after the date of the issuance of the 
notice of assessment. Section 1374 shall apply to any such 
proceedings.’’. 
(b) CONFORMING AMENDMENT.—The Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended by striking sections 1327 and 1328. 
SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT 
FOR REVIEWS OF REGULATED ENTITIES; OMBUDSMAN. 
(a) IN GENERAL.—Section 1317 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) 
is amended— 
(1) in subsection (a), by striking ‘‘enterprise’’ each place 
that term appears and inserting ‘‘regulated entity’’; 
(2) in subsection (b)— 
(A) by inserting ‘‘of a regulated entity’’ after ‘‘under 
this section’’; and
H. R. 3221—15 
(B) by striking ‘‘to determine the condition of an enter-
prise for the purpose of ensuring its financial safety and 
soundness’’ and inserting ‘‘or appropriate’’; 
(3) in subsection (c), in the second sentence, by inserting 
before the period ‘‘to conduct examinations under this section’’; 
(4) by redesignating subsections (d) through (f) as sub-
sections (e) through (g), respectively; and 
(5) by inserting after subsection (c) the following: 
‘‘(d) INSPECTOR GENERAL.—There shall be within the Agency 
an Inspector General, who shall be appointed in accordance with 
section 3(a) of the Inspector General Act of 1978.’’. 
(b) DIRECT HIRE AUTHORITY TO HIRE ACCOUNTANTS, ECONO-
MISTS, AND EXAMINERS.—Section 1317 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4517) is amended by adding at the end the following: 
‘‘(h) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, AND EXAM-
INERS.— 
‘‘(1) APPLICABILITY.—This section shall apply with respect 
to any position of examiner, accountant, economist, and spe-
cialist in financial markets and in technology at the Agency, 
with respect to supervision and regulation of the regulated 
entities, that is in the competitive service. 
‘‘(2) APPOINTMENT AUTHORITY.—The Director may appoint 
candidates to any position described in paragraph (1)— 
‘‘(A) in accordance with the statutes, rules, and regula-
tions governing appointments in the excepted service; and 
‘‘(B) notwithstanding any statutes, rules, and regula-
tions governing appointments in the competitive service.’’. 
(c) AMENDMENTS TO INSPECTOR GENERAL ACT.—Section 11 of 
the Inspector General Act of 1978 (5 U.S.C. App.) is amended— 
(1) in paragraph (1), by inserting ‘‘; the Director of the 
Federal Housing Finance Agency’’ after ‘‘Social Security 
Administration’’; and 
(2) in paragraph (2), by inserting ‘‘, the Federal Housing 
Finance Agency’’ after ‘‘Social Security Administration’’. 
(d) AUTHORITY TO CONTRACT FOR REVIEWS OF REGULATED ENTI-
TIES.—Section 1319 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended— 
(1) in the section heading, by striking ‘‘ENTERPRISES BY 
RATING ORGANIZATION’’ and inserting ‘‘REGULATED ENTITIES’’; 
and 
(2) by striking ‘‘enterprises’’ and inserting ‘‘regulated enti-
ties’’. 
(e) OFFICE OF THE OMBUDSMAN.—Section 1317 of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4517) is amended by adding at the end the following: 
‘‘(i) OMBUDSMAN.—The Director shall establish, by regulation, 
an Office of the Ombudsman within the Agency, which shall be 
responsible for considering complaints and appeals, from any regu-
lated entity and any person that has a business relationship with 
a regulated entity, regarding any matter relating to the regulation 
and supervision of such regulated entity by the Agency. The regula-
tion issued by the Director under this subsection shall specify 
the authority and duties of the Office of the Ombudsman.’’.
H. R. 3221—16 
SEC. 1106. ASSESSMENTS. 
Section 1316 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4516) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) ANNUAL ASSESSMENTS.—The Director shall establish and 
collect from the regulated entities annual assessments in an amount 
not exceeding the amount sufficient to provide for reasonable costs 
(including administrative costs) and expenses of the Agency, 
including— 
‘‘(1) the expenses of any examinations under section 1317 
of this Act and under section 20 of the Federal Home Loan 
Bank Act; 
‘‘(2) the expenses of obtaining any reviews and credit 
assessments under section 1319; 
‘‘(3) such amounts in excess of actual expenses for any 
given year as deemed necessary by the Director to maintain 
a working capital fund in accordance with subsection (e); and 
‘‘(4) the windup of the affairs of the Office of Federal 
Housing Enterprise Oversight and the Federal Housing Finance 
Board under title III of the Federal Housing Finance Regulatory 
Reform Act of 2008.’’; 
(2) in subsection (b)— 
(A) by realigning the margins of paragraph (2) two 
ems from the left, so as to align the left margin of such 
paragraph with the left margins of paragraph (1); 
(B) by redesignating paragraphs (2) and (3) as para-
graphs (3) and (4), respectively; and 
(C) by inserting after paragraph (1) the following: 
‘‘(2) SEPARATE TREATMENT OF FEDERAL HOME LOAN BANK 
AND ENTERPRISE ASSESSMENTS.—Assessments collected from the 
enterprises shall not exceed the amounts sufficient to provide 
for the costs and expenses described in subsection (a) relating 
to the enterprises. Assessments collected from the Federal 
Home Loan Banks shall not exceed the amounts sufficient 
to provide for the costs and expenses described in subsection 
(a) relating to the Federal Home Loan Banks.’’; 
(3) by striking subsection (c) and inserting the following: 
‘‘(c) INCREASED COSTS OF REGULATION.— 
‘‘(1) INCREASE FOR INADEQUATE CAPITALIZATION.—The semi-
annual payments made pursuant to subsection (b) by any regu-
lated entity that is not classified (for purposes of subtitle B) 
as adequately capitalized may be increased, as necessary, in 
the discretion of the Director to pay additional estimated costs 
of regulation of the regulated entity. 
‘‘(2) ADJUSTMENT
FOR
ENFORCEMENT
ACTIVITIES.—The 
Director may adjust the amounts of any semiannual payments 
for an assessment under subsection (a) that are to be paid 
pursuant to subsection (b) by a regulated entity, as necessary 
in the discretion of the Director, to ensure that the costs of 
enforcement activities under this Act for a regulated entity 
are borne only by such regulated entity. 
‘‘(3) ADDITIONAL ASSESSMENT FOR DEFICIENCIES.—If at any 
time, as a result of increased costs of regulation of a regulated 
entity that is not classified (for purposes of subtitle B) as 
adequately capitalized or as the result of supervisory or enforce-
ment activities under this Act for a regulated entity, the amount
H. R. 3221—17 
available from any semiannual payment made by such regu-
lated entity pursuant to subsection (b) is insufficient to cover 
the costs of the Agency with respect to such entity, the Director 
may make and collect from such regulated entity an immediate 
assessment to cover the amount of such deficiency for the 
semiannual period. If, at the end of any semiannual period 
during which such an assessment is made, any amount remains 
from such assessment, such remaining amount shall be 
deducted from the assessment for such regulated entity for 
the following semiannual period.’’; 
(4) in subsection (d), by striking ‘‘If’’ and inserting ‘‘Except 
with respect to amounts collected pursuant to subsection (a)(3), 
if’’; and 
(5) by striking subsections (e) through (g) and inserting 
the following: 
‘‘(e) WORKING CAPITAL FUND.—At the end of each year for 
which an assessment under this section is made, the Director shall 
remit to each regulated entity any amount of assessment collected 
from such regulated entity that is attributable to subsection (a)(3) 
and is in excess of the amount the Director deems necessary to 
maintain a working capital fund. 
‘‘(f) TREATMENT OF ASSESSMENTS.— 
‘‘(1) DEPOSIT.—Amounts received by the Director from 
assessments under this section may be deposited by the Director 
in the manner provided in section 5234 of the Revised Statutes 
of the United States (12 U.S.C. 192) for monies deposited by 
the Comptroller of the Currency. 
‘‘(2) NOT GOVERNMENT FUNDS.—The amounts received by 
the Director from any assessment under this section shall not 
be construed to be Government or public funds or appropriated 
money. 
‘‘(3) NO APPORTIONMENT OF FUNDS.—Notwithstanding any 
other provision of law, the amounts received by the Director 
from any assessment under this section shall not be subject 
to apportionment for the purpose of chapter 15 of title 31, 
United States Code, or under any other authority. 
‘‘(4) USE OF FUNDS.—The Director may use any amounts 
received by the Director from assessments under this section 
for compensation of the Director and other employees of the 
Agency and for all other expenses of the Director and the 
Agency. 
‘‘(5) AVAILABILITY OF OVERSIGHT FUND AMOUNTS.—Notwith-
standing any other provision of law, any amounts remaining 
in the Federal Housing Enterprises Oversight Fund established 
under this section (as in effect before the effective date of 
the Federal Housing Finance Regulatory Reform Act of 2008, 
and any amounts remaining from assessments on the Federal 
Home Loan Banks pursuant to section 18(b) of the Federal 
Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such 
effective date, be treated for purposes of this subsection as 
amounts received from assessments under this section. 
‘‘(6) TREASURY INVESTMENTS.— 
‘‘(A) AUTHORITY.—The Director may request the Sec-
retary of the Treasury to invest such portions of amounts 
received by the Director from assessments paid under this 
section that, in the Director’s discretion, are not required 
to meet the current working needs of the Agency.
H. R. 3221—18 
‘‘(B) 
GOVERNMENT
OBLIGATIONS.—Pursuant 
to 
a 
request under subparagraph (A), the Secretary of the 
Treasury shall invest such amounts in Government obliga-
tions guaranteed as to principal and interest by the United 
States with maturities suitable to the needs of the Agency 
and bearing interest at a rate determined by the Secretary 
of the Treasury taking into consideration current market 
yields on outstanding marketable obligations of the United 
States of comparable maturity. 
‘‘(g) BUDGET AND FINANCIAL MANAGEMENT.— 
‘‘(1) FINANCIAL
OPERATING
PLANS
AND
FORECASTS.—The 
Director shall provide to the Director of the Office of Manage-
ment and Budget copies of the Director’s financial operating 
plans and forecasts, as prepared by the Director in the ordinary 
course of the Agency’s operations, and copies of the quarterly 
reports of the Agency’s financial condition and results of oper-
ations, as prepared by the Director in the ordinary course 
of the Agency’s operations. 
‘‘(2) FINANCIAL
STATEMENTS.—The Agency shall prepare 
annually a statement of— 
‘‘(A) assets and liabilities and surplus or deficit; 
‘‘(B) income and expenses; and 
‘‘(C) sources and application of funds. 
‘‘(3) FINANCIAL MANAGEMENT SYSTEMS.—The Agency shall 
implement and maintain financial management systems that— 
‘‘(A) comply substantially with Federal financial 
management systems requirements and applicable Federal 
accounting standards; and 
‘‘(B) use a general ledger system that accounts for 
activity at the transaction level. 
‘‘(4) ASSERTION OF INTERNAL CONTROLS.—The Director shall 
provide to the Comptroller General of the United States an 
assertion as to the effectiveness of the internal controls that 
apply to financial reporting by the Agency, using the standards 
established in section 3512(c) of title 31, United States Code. 
‘‘(5) RULE OF CONSTRUCTION.—This subsection may not be 
construed as implying any obligation on the part of the Director 
to consult with or obtain the consent or approval of the Director 
of the Office of Management and Budget with respect to any 
report, plan, forecast, or other information referred to in para-
graph (1) or any jurisdiction or oversight over the affairs or 
operations of the Agency. 
‘‘(h) AUDIT OF AGENCY.— 
‘‘(1) IN GENERAL.—The Comptroller General shall annually 
audit the financial transactions of the Agency in accordance 
with the United States generally accepted government auditing 
standards as may be prescribed by the Comptroller General 
of the United States. The audit shall be conducted at the 
place or places where accounts of the Agency are normally 
kept. The representatives of the Government Accountability 
Office shall have access to the personnel and to all books, 
accounts, documents, papers, records (including electronic 
records), reports, files, and all other papers, automated data, 
things, or property belonging to or under the control of or 
used or employed by the Agency pertaining to its financial 
transactions and necessary to facilitate the audit, and such 
representatives shall be afforded full facilities for verifying
H. R. 3221—19 
transactions with the balances or securities held by deposi-
tories, fiscal agents, and custodians. All such books, accounts, 
documents, records, reports, files, papers, and property of the 
Agency shall remain in possession and custody of the Agency. 
The Comptroller General may obtain and duplicate any such 
books, accounts, documents, records, working papers, auto-
mated data and files, or other information relevant to such 
audit without cost to the Comptroller General and the Comp-
troller General’s right of access to such information shall be 
enforceable pursuant to section 716(c) of title 31, United States 
Code. 
‘‘(2) REPORT.—The Comptroller General shall submit to 
the Congress a report of each annual audit conducted under 
this subsection. The report to the Congress shall set forth 
the scope of the audit and shall include the statement of assets 
and liabilities and surplus or deficit, the statement of income 
and expenses, the statement of sources and application of funds, 
and such comments and information as may be deemed nec-
essary to inform Congress of the financial operations and condi-
tion of the Agency, together with such recommendations with 
respect thereto as the Comptroller General may deem advisable. 
A copy of each report shall be furnished to the President and 
to the Agency at the time submitted to the Congress. 
‘‘(3) ASSISTANCE AND COSTS.—For the purpose of conducting 
an audit under this subsection, the Comptroller General may, 
in the discretion of the Comptroller General, employ by con-
tract, without regard to section 3709 of the Revised Statutes 
of the United States (41 U.S.C. 5), professional services of 
firms and organizations of certified public accountants for tem-
porary periods or for special purposes. Upon the request of 
the Comptroller General, the Director of the Agency shall 
transfer to the Government Accountability Office from funds 
available, the amount requested by the Comptroller General 
to cover the full costs of any audit and report conducted by 
the Comptroller General. The Comptroller General shall credit 
funds transferred to the account established for salaries and 
expenses of the Government Accountability Office, and such 
amount shall be available upon receipt and without fiscal year 
limitation to cover the full costs of the audit and report.’’. 
SEC. 1107. REGULATIONS AND ORDERS. 
Section 1319G of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4526) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) AUTHORITY.—The Director shall issue any regulations, 
guidelines, or orders necessary to carry out the duties of the Director 
under this title or the authorizing statutes, and to ensure that 
the purposes of this title and the authorizing statutes are accom-
plished.’’; and 
(2) by striking subsection (c). 
SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS. 
The Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting 
after section 1313A, as added by this Act, the following new section:
H. R. 3221—20 
‘‘SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STAND-
ARDS. 
‘‘(a) STANDARDS.—The Director shall establish standards, by 
regulation or guideline, for each regulated entity relating to— 
‘‘(1) adequacy of internal controls and information systems 
taking into account the nature and scale of business operations; 
‘‘(2) independence and adequacy of internal audit systems; 
‘‘(3) management of interest rate risk exposure; 
‘‘(4) management of market risk, including standards that 
provide for systems that accurately measure, monitor, and con-
trol market risks and, as warranted, that establish limitations 
on market risk; 
‘‘(5) adequacy and maintenance of liquidity and reserves; 
‘‘(6) management of asset and investment portfolio growth; 
‘‘(7) investments and acquisitions of assets by a regulated 
entity, to ensure that they are consistent with the purposes 
of this title and the authorizing statutes; 
‘‘(8) overall risk management processes, including adequacy 
of oversight by senior management and the board of directors 
and of processes and policies to identify, measure, monitor, 
and control material risks, including reputational risks, and 
for adequate, well-tested business resumption plans for all 
major systems with remote site facilities to protect against 
disruptive events; 
‘‘(9) management of credit and counterparty risk, including 
systems to identify concentrations of credit risk and prudential 
limits to restrict exposure of the regulated entity to a single 
counterparty or groups of related counterparties; 
‘‘(10) maintenance of adequate records, in accordance with 
consistent accounting policies and practices that enable the 
Director to evaluate the financial condition of the regulated 
entity; and 
‘‘(11) such other operational and management standards 
as the Director determines to be appropriate. 
‘‘(b) FAILURE TO MEET STANDARDS.— 
‘‘(1) PLAN REQUIREMENT.— 
‘‘(A) IN GENERAL.—If the Director determines that a 
regulated entity fails to meet any standard established 
under subsection (a)— 
‘‘(i) if such standard is established by regulation, 
the Director shall require the regulated entity to 
submit an acceptable plan to the Director within the 
time allowed under subparagraph (C); and 
‘‘(ii) if such standard is established by guideline, 
the Director may require the regulated entity to submit 
a plan described in clause (i). 
‘‘(B) CONTENTS.—Any plan required under subpara-
graph (A) shall specify the actions that the regulated entity 
will take to correct the deficiency. If the regulated entity 
is undercapitalized, the plan may be a part of the capital 
restoration plan for the regulated entity under section 
1369C. 
‘‘(C) DEADLINES
FOR
SUBMISSION
AND
REVIEW.—The 
Director shall by regulation establish deadlines that— 
‘‘(i) provide the regulated entities with reasonable 
time to submit plans required under subparagraph 
(A), and generally require a regulated entity to submit
H. R. 3221—21 
a plan not later than 30 days after the Director deter-
mines that the entity fails to meet any standard estab-
lished under subsection (a); and 
‘‘(ii) require the Director to act on plans expedi-
tiously, and generally not later than 30 days after 
the plan is submitted. 
‘‘(2) REQUIRED ORDER UPON FAILURE TO SUBMIT OR IMPLE-
MENT PLAN.—If a regulated entity fails to submit an acceptable 
plan within the time allowed under paragraph (1)(C), or fails 
in any material respect to implement a plan accepted by the 
Director, the following shall apply: 
‘‘(A) REQUIRED
CORRECTION
OF
DEFICIENCY.—The 
Director shall, by order, require the regulated entity to 
correct the deficiency. 
‘‘(B) OTHER AUTHORITY.—The Director may, by order, 
take one or more of the following actions until the deficiency 
is corrected: 
‘‘(i) Prohibit the regulated entity from permitting 
its average total assets (as such term is defined in 
section 1316(b)) during any calendar quarter to exceed 
its average total assets during the preceding calendar 
quarter, or restrict the rate at which the average total 
assets of the entity may increase from one calendar 
quarter to another. 
‘‘(ii) Require the regulated entity— 
‘‘(I) in the case of an enterprise, to increase 
its ratio of core capital to assets. 
‘‘(II) in the case of a Federal Home Loan Bank, 
to increase its ratio of total capital (as such term 
is defined in section 6(a)(5) of the Federal Home 
Loan Bank Act (12 U.S.C. 1426(a)(5)) to assets. 
‘‘(iii) Require the regulated entity to take any other 
action that the Director determines will better carry 
out the purposes of this section than any of the actions 
described in this subparagraph. 
‘‘(3) MANDATORY RESTRICTIONS.—In complying with para-
graph (2), the Director shall take one or more of the actions 
described in clauses (i) through (iii) of paragraph (2)(B) if— 
‘‘(A) the Director determines that the regulated entity 
fails to meet any standard prescribed under subsection 
(a); 
‘‘(B) the regulated entity has not corrected the defi-
ciency; and 
‘‘(C) during the 18-month period before the date on 
which the regulated entity first failed to meet the standard, 
the entity underwent extraordinary growth, as defined by 
the Director. 
‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT AFFECTED.—The 
authority of the Director under this section is in addition to any 
other authority of the Director.’’. 
SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS 
AND LIABILITIES. 
(a) IN GENERAL.—Subtitle B of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611 et 
seq.) is amended—
H. R. 3221—22 
(1) by striking the subtitle designation and heading and 
inserting the following: 
‘‘Subtitle B—Required Capital Levels for 
Regulated Entities, Special Enforcement 
Powers, and Reviews of Assets and Li-
abilities’’; 
and 
(2) by adding at the end the following new section: 
‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES. 
‘‘(a) IN GENERAL.—The Director shall, by regulation, establish 
criteria governing the portfolio holdings of the enterprises, to ensure 
that the holdings are backed by sufficient capital and consistent 
with the mission and the safe and sound operations of the enter-
prises. In establishing such criteria, the Director shall consider 
the ability of the enterprises to provide a liquid secondary market 
through securitization activities, the portfolio holdings in relation 
to the overall mortgage market, and adherence to the standards 
specified in section 1313B. 
‘‘(b) TEMPORARY ADJUSTMENTS.—The Director may, by order, 
make temporary adjustments to the established standards for an 
enterprise or both enterprises, such as during times of economic 
distress or market disruption. 
‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR ACQUISITION.— 
The Director shall monitor the portfolio of each enterprise. Pursuant 
to subsection (a) and notwithstanding the capital classifications 
of the enterprises, the Director may, by order, require an enterprise, 
under such terms and conditions as the Director determines to 
be appropriate, to dispose of or acquire any asset, if the Director 
determines that such action is consistent with the purposes of 
this Act or any of the authorizing statutes.’’. 
(b) REGULATIONS.—Not later than the expiration of the 180- 
day period beginning on the effective date of this Act, the Director 
shall issue regulations pursuant to section 1369E(a) of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(as added by subsection (a) of this section) establishing the portfolio 
holdings standards under such section. 
SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS. 
(a) IN GENERAL.—Section 1361 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611) 
is amended to read as follows: 
‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES. 
‘‘(a) IN GENERAL.— 
‘‘(1) ENTERPRISES.—The Director shall, by regulation, estab-
lish risk-based capital requirements for the enterprises to 
ensure that the enterprises operate in a safe and sound manner, 
maintaining sufficient capital and reserves to support the risks 
that arise in the operations and management of the enterprises. 
‘‘(2) FEDERAL HOME LOAN BANKS.—The Director shall estab-
lish risk-based capital standards under section 6 of the Federal 
Home Loan Bank Act for the Federal Home Loan Banks.
H. R. 3221—23 
‘‘(b) NO LIMITATION.—Nothing in this section shall limit the 
authority of the Director to require other reports or undertakings, 
or take other action, in furtherance of the responsibilities of the 
Director under this Act.’’. 
(b) FEDERAL HOME LOAN BANKS RISK-BASED CAPITAL.—Section 
6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) 
is amended— 
(1) by striking subparagraph (A) and inserting the fol-
lowing: 
‘‘(A) RISK-BASED
CAPITAL
STANDARDS.—The Director 
shall, by regulation, establish risk-based capital standards 
for the Federal Home Loan Banks to ensure that the Fed-
eral Home Loan Banks operate in a safe and sound manner, 
with sufficient permanent capital and reserves to support 
the risks that arise in the operations and management 
of the Federal Home Loans Banks.’’; and 
(2) in subparagraph (B), by striking ‘‘(A)(ii)’’ and inserting 
‘‘(A)’’. 
SEC. 1111. MINIMUM CAPITAL LEVELS. 
Section 1362 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4612) is amended— 
(1) in subsection (a), by striking ‘‘IN GENERAL’’ and inserting 
‘‘ENTERPRISES’’; and 
(2) by striking subsection (b) and inserting the following: 
‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes of this subtitle, 
the minimum capital level for each Federal Home Loan Bank shall 
be the minimum capital required to be maintained to comply with 
the leverage requirement for the bank established under section 
6(a)(2) of the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)). 
‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAPITAL LEVELS.— 
Notwithstanding subsections (a) and (b) and notwithstanding the 
capital classifications of the regulated entities, the Director may, 
by regulations issued under section 1319G, establish a minimum 
capital level for the enterprises, for the Federal Home Loan Banks, 
or for both the enterprises and the banks, that is higher than 
the level specified in subsection (a) for the enterprises or the level 
specified in subsection (b) for the Federal Home Loan Banks, to 
the extent needed to ensure that the regulated entities operate 
in a safe and sound manner. 
‘‘(d) AUTHORITY TO REQUIRE TEMPORARY INCREASE.— 
‘‘(1) IN GENERAL.—Notwithstanding subsections (a) and (b) 
and any minimum capital level established pursuant to sub-
section (c), the Director may, by order, increase the minimum 
capital level for a regulated entity on a temporary basis, when 
the Director determines that such an increase is necessary 
and consistent with the prudential regulation and the safe 
and sound operations of a regulated entity. 
‘‘(2) RESCISSION.—The Director shall rescind any temporary 
minimum capital level established under paragraph (1) when 
the Director determines that the circumstances or facts no 
longer justify the temporary minimum capital level. 
‘‘(3) REGULATIONS
REQUIRED.—The Director shall issue 
regulations establishing— 
‘‘(A) standards for the imposition of a temporary 
increase in minimum capital under paragraph (1);
H. R. 3221—24 
‘‘(B) the standards and procedures that the Director 
will use to make the determination referred to in paragraph 
(2); and 
‘‘(C) a reasonable time frame for periodic review of 
any temporary increase in minimum capital for the purpose 
of making the determination referred to in paragraph (2). 
‘‘(e) AUTHORITY
TO
ESTABLISH
ADDITIONAL
CAPITAL
AND 
RESERVE REQUIREMENTS FOR PARTICULAR PURPOSES.—The Director 
may, at any time by order or regulation, establish such capital 
or reserve requirements with respect to any product or activity 
of a regulated entity, as the Director considers appropriate to ensure 
that the regulated entity operates in a safe and sound manner, 
with sufficient capital and reserves to support the risks that arise 
in the operations and management of the regulated entity. 
‘‘(f) PERIODIC REVIEW.—The Director shall periodically review 
the amount of core capital maintained by the enterprises, the 
amount of capital retained by the Federal Home Loan Banks, and 
the minimum capital levels established for such regulated entities 
pursuant to this section.’’. 
SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by adding at the end the following: 
‘‘SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL 
HOME LOAN MORTGAGE CORPORATION, FEDERAL HOME 
LOAN BANKS. 
‘‘(a) FEDERAL NATIONAL MORTGAGE ASSOCIATION AND FEDERAL 
HOME LOAN MORTGAGE CORPORATION.—No class of equity securities 
of the Federal National Mortgage Association or the Federal Home 
Loan Mortgage Corporation shall be treated as an exempted security 
for purposes of section 12, 13, 14, or 16. 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
‘‘(1) REGISTRATION.—Each Federal Home Loan Bank shall 
register a class of its common stock under section 12(g), not 
later than 120 days after the date of enactment of the Federal 
Housing Finance Regulatory Reform Act of 2008, and shall 
thereafter maintain such registration and be treated for pur-
poses of this title as an ‘issuer’, the securities of which are 
required to be registered under section 12, regardless of the 
number of members holding such stock at any given time. 
‘‘(2) STANDARDS
RELATING
TO
AUDIT
COMMITTEES.—Each 
Federal Home Loan Bank shall comply with the rules issued 
by the Commission under section 10A(m). 
‘‘(c) DEFINITIONS.—For purposes of this section, the following 
definitions shall apply: 
‘‘(1) FEDERAL HOME LOAN BANK; MEMBER.—The terms ‘Fed-
eral Home Loan Bank’ and ‘member’, have the same meanings 
as in section 2 of the Federal Home Loan Bank Act. 
‘‘(2) FEDERAL NATIONAL MORTGAGE ASSOCIATION.—The term 
‘Federal National Mortgage Association’ means the corporation 
created by the Federal National Mortgage Association Charter 
Act. 
‘‘(3) FEDERAL HOME LOAN MORTGAGE CORPORATION.—The 
term ‘Federal Home Loan Mortgage Corporation’ means the 
corporation created by the Federal Home Loan Mortgage Cor-
poration Act.’’.
H. R. 3221—25 
SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COM-
PENSATION. 
(a) IN GENERAL.—Section 1318 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518) 
is amended— 
(1) in the section heading, by striking ‘‘OF
EXCESSIVE’’ 
and inserting ‘‘AND WITHHOLDING OF EXECUTIVE’’; 
(2) in subsection (a)— 
(A) by striking ‘‘enterprise’’ and inserting ‘‘regulated 
entity’’; and 
(B) by striking ‘‘enterprises’’ and inserting ‘‘regulated 
entities’’; 
(3) by redesignating subsection (b) as subsection (d); and 
(4) by inserting after subsection (a) the following: 
‘‘(b) FACTORS.—In making any determination under subsection 
(a), the Director may take into consideration any factors the Director 
considers relevant, including any wrongdoing on the part of the 
executive officer, and such wrongdoing shall include any fraudulent 
act or omission, breach of trust or fiduciary duty, violation of 
law, rule, regulation, order, or written agreement, and insider abuse 
with respect to the regulated entity. The approval of an agreement 
or contract pursuant to section 309(d)(3)(B) of the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or 
section 303(h)(2) of the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1452(h)(2)) shall not preclude the Director from 
making any subsequent determination under subsection (a). 
‘‘(c) WITHHOLDING
OF COMPENSATION.—In carrying out sub-
section (a), the Director may require a regulated entity to withhold 
any payment, transfer, or disbursement of compensation to an 
executive officer, or to place such compensation in an escrow 
account, during the review of the reasonableness and comparability 
of compensation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) FANNIE MAE.—Section 309(d) of the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is 
amended by adding at the end the following new paragraph: 
‘‘(4) Notwithstanding any other provision of this section, the 
corporation shall not transfer, disburse, or pay compensation to 
any executive officer, or enter into an agreement with such executive 
officer, without the approval of the Director, for matters being 
reviewed under section 1318 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).’’. 
(2) FREDDIE
MAC.—Section 303(h) of the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) Notwithstanding any other provision of this section, the 
Corporation shall not transfer, disburse, or pay compensation to 
any executive officer, or enter into an agreement with such executive 
officer, without the approval of the Director, for matters being 
reviewed under section 1318 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).’’. 
(3) FEDERAL HOME LOAN BANKS.—Section 7 of the Federal 
Home Loan Bank Act (12 U.S.C. 1427) is amended by adding 
at the end the following new subsection: 
‘‘(l) WITHHOLDING
OF COMPENSATION.—Notwithstanding any 
other provision of this section, a Federal Home Loan Bank shall 
not transfer, disburse, or pay compensation to any executive officer,
H. R. 3221—26 
or enter into an agreement with such executive officer, without 
the approval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518).’’. 
SEC. 1114. LIMIT ON GOLDEN PARACHUTES. 
Section 1318 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended 
by adding at the end the following: 
‘‘(e) AUTHORITY TO REGULATE OR PROHIBIT CERTAIN FORMS 
OF BENEFITS TO AFFILIATED PARTIES.— 
‘‘(1) GOLDEN
PARACHUTES
AND
INDEMNIFICATION
PAY-
MENTS.—The Director may prohibit or limit, by regulation or 
order, any golden parachute payment or indemnification pay-
ment. 
‘‘(2) FACTORS TO BE TAKEN INTO ACCOUNT.—The Director 
shall prescribe, by regulation, the factors to be considered by 
the Director in taking any action pursuant to paragraph (1), 
which may include such factors as— 
‘‘(A) whether there is a reasonable basis to believe 
that the affiliated party has committed any fraudulent 
act or omission, breach of trust or fiduciary duty, or insider 
abuse with regard to the regulated entity that has had 
a material effect on the financial condition of the regulated 
entity; 
‘‘(B) whether there is a reasonable basis to believe 
that the affiliated party is substantially responsible for 
the insolvency of the regulated entity, the appointment 
of a conservator or receiver for the regulated entity, or 
the troubled condition of the regulated entity (as defined 
in regulations prescribed by the Director); 
‘‘(C) whether there is a reasonable basis to believe 
that the affiliated party has materially violated any 
applicable provision of Federal or State law or regulation 
that has had a material effect on the financial condition 
of the regulated entity; 
‘‘(D) whether the affiliated party was in a position 
of managerial or fiduciary responsibility; and 
‘‘(E) the length of time that the party was affiliated 
with the regulated entity, and the degree to which— 
‘‘(i) the payment reasonably reflects compensation 
earned over the period of employment; and 
‘‘(ii) the compensation involved represents a 
reasonable payment for services rendered. 
‘‘(3) CERTAIN PAYMENTS PROHIBITED.—No regulated entity 
may prepay the salary or any liability or legal expense of 
any affiliated party if such payment is made— 
‘‘(A) in contemplation of the insolvency of such regu-
lated entity, or after the commission of an act of insolvency; 
and 
‘‘(B) with a view to, or having the result of— 
‘‘(i) preventing the proper application of the assets 
of the regulated entity to creditors; or 
‘‘(ii) preferring one creditor over another. 
‘‘(4) GOLDEN PARACHUTE PAYMENT DEFINED.— 
‘‘(A) IN GENERAL.—For purposes of this subsection, the 
term ‘golden parachute payment’ means any payment (or
H. R. 3221—27 
any agreement to make any payment) in the nature of 
compensation by any regulated entity for the benefit of 
any affiliated party pursuant to an obligation of such regu-
lated entity that— 
‘‘(i) is contingent on the termination of such party’s 
affiliation with the regulated entity; and 
‘‘(ii) is received on or after the date on which— 
‘‘(I) the regulated entity became insolvent; 
‘‘(II) any conservator or receiver is appointed 
for such regulated entity; or 
‘‘(III) the Director determines that the regu-
lated entity is in a troubled condition (as defined 
in the regulations of the Director). 
‘‘(B) CERTAIN
PAYMENTS
IN
CONTEMPLATION
OF
AN 
EVENT.—Any payment which would be a golden parachute 
payment but for the fact that such payment was made 
before the date referred to in subparagraph (A)(ii) shall 
be treated as a golden parachute payment if the payment 
was made in contemplation of the occurrence of an event 
described in any subclause of such subparagraph. 
‘‘(C) CERTAIN PAYMENTS NOT INCLUDED.—For purposes 
of this subsection, the term ‘golden parachute payment’ 
shall not include— 
‘‘(i) any payment made pursuant to a retirement 
plan which is qualified (or is intended to be qualified) 
under section 401 of the Internal Revenue Code of 
1986, or other nondiscriminatory benefit plan; 
‘‘(ii) any payment made pursuant to a bona fide 
deferred compensation plan or arrangement which the 
Director determines, by regulation or order, to be 
permissible; or 
‘‘(iii) any payment made by reason of the death 
or disability of an affiliated party. 
‘‘(5) OTHER DEFINITIONS.—For purposes of this subsection, 
the following definitions shall apply: 
‘‘(A) INDEMNIFICATION PAYMENT.—Subject to paragraph 
(6), the term ‘indemnification payment’ means any payment 
(or any agreement to make any payment) by any regulated 
entity for the benefit of any person who is or was an 
affiliated party, to pay or reimburse such person for any 
liability or legal expense with regard to any administrative 
proceeding or civil action instituted by the Agency which 
results in a final order under which such person— 
‘‘(i) is assessed a civil money penalty; 
‘‘(ii) is removed or prohibited from participating 
in conduct of the affairs of the regulated entity; or 
‘‘(iii) is required to take any affirmative action 
to correct certain conditions resulting from violations 
or practices, by order of the Director. 
‘‘(B) LIABILITY OR LEGAL EXPENSE.—The term ‘liability 
or legal expense’ means— 
‘‘(i) any legal or other professional expense 
incurred in connection with any claim, proceeding, or 
action; 
‘‘(ii) the amount of, and any cost incurred in 
connection with, any settlement of any claim, pro-
ceeding, or action; and
H. R. 3221—28 
‘‘(iii) the amount of, and any cost incurred in 
connection with, any judgment or penalty imposed with 
respect to any claim, proceeding, or action. 
‘‘(C) PAYMENT.—The term ‘payment’ includes— 
‘‘(i) any direct or indirect transfer of any funds 
or any asset; and 
‘‘(ii) any segregation of any funds or assets for 
the purpose of making, or pursuant to an agreement 
to make, any payment after the date on which such 
funds or assets are segregated, without regard to 
whether the obligation to make such payment is contin-
gent on— 
‘‘(I) the determination, after such date, of the 
liability for the payment of such amount; or 
‘‘(II) the liquidation, after such date, of the 
amount of such payment. 
‘‘(6) CERTAIN
COMMERCIAL
INSURANCE
COVERAGE
NOT 
TREATED AS COVERED BENEFIT PAYMENT.—No provision of this 
subsection shall be construed as prohibiting any regulated 
entity from purchasing any commercial insurance policy or 
fidelity bond, except that, subject to any requirement described 
in paragraph (5)(A)(iii), such insurance policy or bond shall 
not cover any legal or liability expense of the regulated entity 
which is described in paragraph (5)(A).’’. 
SEC. 1115. REPORTING OF FRAUDULENT LOANS. 
Part 1 of subtitle C of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), 
as amended by this Act, is amended by adding at the end the 
following: 
‘‘SEC. 1379E. REPORTING OF FRAUDULENT LOANS. 
‘‘(a) REQUIREMENT TO REPORT.—The Director shall require a 
regulated entity to submit to the Director a timely report upon 
discovery by the regulated entity that it has purchased or sold 
a fraudulent loan or financial instrument, or suspects a possible 
fraud relating to the purchase or sale of any loan or financial 
instrument. The Director shall require each regulated entity to 
establish and maintain procedures designed to discover any such 
transactions. 
‘‘(b) PROTECTION FROM LIABILITY FOR REPORTS.—Any regulated 
entity that, in good faith, makes a report pursuant to subsection 
(a), and any entity-affiliated party, that, in good faith, makes or 
requires another to make any such report, shall not be liable 
to any person under any provision of law or regulation, any constitu-
tion, law, or regulation of any State or political subdivision of 
any State, or under any contract or other legally enforceable agree-
ment (including any arbitration agreement) for such report or for 
any failure to provide notice of such report to the person who 
is the subject of such report or any other persons identified in 
the report.’’. 
SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN 
AGENCY WORKFORCE. 
Section 1319A of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4520) is amended— 
(1) in the section heading, by striking ‘‘EQUAL
OPPOR-
TUNITY
IN
SOLICITATION
OF
CONTRACTS’’ and inserting
H. R. 3221—29 
‘‘MINORITY
AND
WOMEN
INCLUSION; DIVERSITY
REQUIRE-
MENTS’’; 
(2) in subsection (a), by striking ‘‘(a) IN GENERAL.—Each 
enterprise’’ and inserting ‘‘(e) OUTREACH.—Each regulated 
entity’’; and 
(3) by striking subsection (b); 
(4) by inserting before subsection (e), as so redesignated 
by paragraph (2) of this section, the following new subsections: 
‘‘(a) OFFICE OF MINORITY AND WOMEN INCLUSION.—Each regu-
lated entity shall establish an Office of Minority and Women Inclu-
sion, or designate an office of the entity, that shall be responsible 
for carrying out this section and all matters of the entity relating 
to diversity in management, employment, and business activities 
in accordance with such standards and requirements as the Director 
shall establish. 
‘‘(b) INCLUSION IN ALL LEVELS OF BUSINESS ACTIVITIES.—Each 
regulated entity shall develop and implement standards and proce-
dures to ensure, to the maximum extent possible, the inclusion 
and utilization of minorities (as such term is defined in section 
1204(c) of the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 1811 note)) and women, and minority- 
and women-owned businesses (as such terms are defined in section 
21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) 
(including financial institutions, investment banking firms, mort-
gage banking firms, asset management firms, broker-dealers, finan-
cial services firms, underwriters, accountants, brokers, investment 
consultants, and providers of legal services) in all business and 
activities of the regulated entity at all levels, including in procure-
ment, insurance, and all types of contracts (including contracts 
for the issuance or guarantee of any debt, equity, or mortgage- 
related securities, the management of its mortgage and securities 
portfolios, the making of its equity investments, the purchase, sale 
and servicing of single- and multi-family mortgage loans, and the 
implementation of its affordable housing program and initiatives). 
The processes established by each regulated entity for review and 
evaluation for contract proposals and to hire service providers shall 
include a component that gives consideration to the diversity of 
the applicant. 
‘‘(c) APPLICABILITY.—This section shall apply to all contracts 
of a regulated entity for services of any kind, including services 
that require the services of investment banking, asset management 
entities, broker-dealers, financial services entities, underwriters, 
accountants, investment consultants, and providers of legal services. 
‘‘(d) INCLUSION IN ANNUAL REPORTS.—Each regulated entity 
shall include, in the annual report submitted by the entity to 
the Director pursuant to section 309(k) of the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1723a(k)), section 
307(c) of the Federal Home Loan Mortgage Corporation Act (12 
U.S.C. 1456(c)), and section 20 of the Federal Home Loan Bank 
Act (12 U.S.C. 1440), as applicable, detailed information describing 
the actions taken by the entity pursuant to this section, which 
shall include a statement of the total amounts paid by the entity 
to third party contractors since the last such report and the percent-
age of such amounts paid to businesses described in subsection 
(b) of this section.’’; and 
(5) by adding at the end the following new subsection:
H. R. 3221—30 
‘‘(f) DIVERSITY IN AGENCY WORKFORCE.—The Agency shall take 
affirmative steps to seek diversity in its workforce at all levels 
of the agency consistent with the demographic diversity of the 
United States, which shall include— 
‘‘(1) heavily recruiting at historically Black colleges and 
universities, Hispanic-serving institutions, women’s colleges, 
and colleges that typically serve majority minority populations; 
‘‘(2) sponsoring and recruiting at job fairs in urban commu-
nities, and placing employment advertisements in newspapers 
and magazines oriented toward women and people of color; 
‘‘(3) partnering with organizations that are focused on 
developing opportunities for minorities and women to place 
talented young minorities and women in industry internships, 
summer employment, and full-time positions; and 
‘‘(4) where feasible, partnering with inner-city high schools, 
girls’ high schools, and high schools with majority minority 
populations to establish or enhance financial literacy programs 
and provide mentoring.’’. 
SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS 
OF REGULATED ENTITIES BY SECRETARY OF TREASURY. 
(a) FANNIE MAE.—Section 304 of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1719) is amended by adding 
at the end the following new subsection: 
‘‘(g) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGA-
TIONS AND SECURITIES; CONDITIONS.— 
‘‘(1) AUTHORITY TO PURCHASE.— 
‘‘(A) GENERAL AUTHORITY.—In addition to the authority 
under subsection (c) of this section, the Secretary of the 
Treasury is authorized to purchase any obligations and 
other securities issued by the corporation under any section 
of this Act, on such terms and conditions as the Secretary 
may determine and in such amounts as the Secretary may 
determine. Nothing in this subsection requires the corpora-
tion to issue obligations or securities to the Secretary with-
out mutual agreement between the Secretary and the cor-
poration. Nothing in this subsection permits or authorizes 
the Secretary, without the agreement of the corporation, 
to engage in open market purchases of the common securi-
ties of the corporation. 
‘‘(B) 
EMERGENCY
DETERMINATION
REQUIRED.—In 
connection with any use of this authority, the Secretary 
must determine that such actions are necessary to— 
‘‘(i) provide stability to the financial markets; 
‘‘(ii) prevent disruptions in the availability of mort-
gage finance; and 
‘‘(iii) protect the taxpayer. 
‘‘(C) CONSIDERATIONS.—To protect the taxpayers, the 
Secretary of the Treasury shall take into consideration 
the following in connection with exercising the authority 
contained in this paragraph: 
‘‘(i) The need for preferences or priorities regarding 
payments to the Government. 
‘‘(ii) Limits on maturity or disposition of obligations 
or securities to be purchased. 
‘‘(iii) The corporation’s plan for the orderly resump-
tion of private market funding or capital market access.
H. R. 3221—31 
‘‘(iv) The probability of the corporation fulfilling 
the terms of any such obligation or other security, 
including repayment. 
‘‘(v) The need to maintain the corporation’s status 
as a private shareholder-owned company. 
‘‘(vi) Restrictions on the use of corporation 
resources, including limitations on the payment of divi-
dends and executive compensation and any such other 
terms and conditions as appropriate for those purposes. 
‘‘(D) REPORTS
TO
CONGRESS.—Upon exercise of this 
authority, the Secretary shall report to the Committees 
on the Budget, Financial Services, and Ways and Means 
of the House of Representatives and the Committees on 
the Budget, Finance, and Banking, Housing, and Urban 
Affairs of the Senate as to the necessity for the purchase 
and the determinations made by the Secretary under 
subparagraph (B) and with respect to the considerations 
required under subparagraph (C), and the size, terms, and 
probability of repayment or fulfillment of other terms of 
such purchase. 
‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.— 
‘‘(A) EXERCISE
OF
RIGHTS.—The Secretary of the 
Treasury may, at any time, exercise any rights received 
in connection with such purchases. 
‘‘(B) SALE OF OBLIGATION AND SECURITIES.—The Sec-
retary of the Treasury may, at any time, subject to the 
terms of the security or otherwise upon terms and condi-
tions and at prices determined by the Secretary, sell any 
obligation or security acquired by the Secretary under this 
subsection. 
‘‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGA-
TIONS OR SECURITIES.—The authority of the Secretary of 
the Treasury to hold, exercise any rights received in connec-
tion with, or sell, any obligations or securities purchased 
is not subject to the provisions of paragraph (4). 
‘‘(3) FUNDING.—For the purpose of the authorities granted 
in this subsection, the Secretary of the Treasury may use 
the proceeds of the sale of any securities issued under chapter 
31 of Title 31, and the purposes for which securities may 
be issued under chapter 31 of Title 31 are extended to include 
such purchases and the exercise of any rights in connection 
with such purchases. Any funds expended for the purchase 
of, or modifications to, obligations and securities, or the exercise 
of any rights received in connection with such purchases under 
this subsection shall be deemed appropriated at the time of 
such purchase, modification, or exercise. 
‘‘(4) TERMINATION OF AUTHORITY.—The authority under this 
subsection (g), with the exception of paragraphs (2) and (3) 
of this subsection, shall expire December 31, 2009. 
‘‘(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECU-
TIVE COMPENSATION.—The Director shall have the power to 
approve, disapprove, or modify the executive compensation of 
the corporation, as defined under Regulation S-K, 17 C.F.R. 
229.’’. 
(b) FREDDIE MAC.—Section 306 of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1455) is amended by adding 
at the end the following new subsection:
H. R. 3221—32 
‘‘(l) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGA-
TIONS AND SECURITIES; CONDITIONS.— 
‘‘(1) AUTHORITY TO PURCHASE.— 
‘‘(A) GENERAL AUTHORITY.—In addition to the authority 
under subsection (c) of this section, the Secretary of the 
Treasury is authorized to purchase any obligations and 
other securities issued by the Corporation under any sec-
tion of this Act, on such terms and conditions as the Sec-
retary may determine and in such amounts as the Sec-
retary may determine. Nothing in this subsection requires 
the Corporation to issue obligations or securities to the 
Secretary without mutual agreement between the Secretary 
and the Corporation. Nothing in this subsection permits 
or authorizes the Secretary, without the agreement of the 
Corporation, to engage in open market purchases of the 
common securities of the Corporation. 
‘‘(B) 
EMERGENCY
DETERMINATION
REQUIRED.—In 
connection with any use of this authority, the Secretary 
must determine that such actions are necessary to— 
‘‘(i) provide stability to the financial markets; 
‘‘(ii) prevent disruptions in the availability of mort-
gage finance; and 
‘‘(iii) protect the taxpayer. 
‘‘(C) CONSIDERATIONS.—To protect the taxpayers, the 
Secretary of the Treasury shall take into consideration 
the following in connection with exercising the authority 
contained in this paragraph: 
‘‘(i) The need for preferences or priorities regarding 
payments to the Government. 
‘‘(ii) Limits on maturity or disposition of obligations 
or securities to be purchased. 
‘‘(iii) The Corporation’s plan for the orderly 
resumption of private market funding or capital market 
access. 
‘‘(iv) The probability of the Corporation fulfilling 
the terms of any such obligation or other security, 
including repayment. 
‘‘(v) The need to maintain the Corporation’s status 
as a private shareholder-owned company. 
‘‘(vi) Restrictions on the use of Corporation 
resources, including limitations on the payment of divi-
dends and executive compensation and any such other 
terms and conditions as appropriate for those purposes. 
‘‘(D) REPORTS
TO
CONGRESS.—Upon exercise of this 
authority, the Secretary shall report to the Committees 
on the Budget, Financial Services, and Ways and Means 
of the House of Representatives and the Committees on 
the Budget, Finance, and Banking, Housing, and Urban 
Affairs of the Senate as to the necessity for the purchase 
and the determinations made by the Secretary under 
subparagraph (B) and with respect to the considerations 
required under subparagraph (C), and the size, terms, and 
probability of repayment or fulfillment of other terms of 
such purchase. 
‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.—
H. R. 3221—33 
‘‘(A) EXERCISE
OF
RIGHTS.—The Secretary of the 
Treasury may, at any time, exercise any rights received 
in connection with such purchases. 
‘‘(B) SALE OF OBLIGATION AND SECURITIES.—The Sec-
retary of the Treasury may, at any time, subject to the 
terms of the security or otherwise upon terms and condi-
tions and at prices determined by the Secretary, sell any 
obligation or security acquired by the Secretary under this 
subsection. 
‘‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGA-
TIONS OR SECURITIES.—The authority of the Secretary of 
the Treasury to hold, exercise any rights received in connec-
tion with, or sell, any obligations or securities purchased 
is not subject to the provisions of paragraph (4). 
‘‘(3) FUNDING.—For the purpose of the authorities granted 
in this subsection, the Secretary of the Treasury may use 
the proceeds of the sale of any securities issued under chapter 
31 of Title 31, and the purposes for which securities may 
be issued under chapter 31 of Title 31 are extended to include 
such purchases and the exercise of any rights in connection 
with such purchases. Any funds expended for the purchase 
of, or modifications to, obligations and securities, or the exercise 
of any rights received in connection with such purchases under 
this subsection shall be deemed appropriated at the time of 
such purchase, modification, or exercise. 
‘‘(4) TERMINATION OF AUTHORITY.—The authority under this 
subsection (l), with the exception of paragraphs (2) and (3) 
of this subsection, shall expire December 31, 2009. 
‘‘(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECU-
TIVE COMPENSATION.—The Director shall have the power to 
approve, disapprove, or modify the executive compensation of 
the Corporation, as defined under Regulation S-K, 17 C.F.R. 
229.’’. 
(c) FEDERAL HOME LOAN BANKS.—Section 11 of the Federal 
Home Loan Bank Act (12 U.S.C. 1431) is amended by adding 
at the end the following new subsection: 
‘‘(l) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGA-
TIONS; CONDITIONS.— 
‘‘(1) AUTHORITY TO PURCHASE.— 
‘‘(A) GENERAL AUTHORITY.—In addition to the authority 
under subsection (i) of this section, the Secretary of the 
Treasury is authorized to purchase any obligations issued 
by any Federal Home Loan Bank under any section of 
this Act, on such terms and conditions as the Secretary 
may determine and in such amounts as the Secretary may 
determine. Nothing in this subsection requires a Federal 
Home Loan Bank to issue obligations or securities to the 
Secretary without mutual agreement between the Secretary 
and the Federal Home Loan Bank. Nothing in this sub-
section permits or authorizes the Secretary, without the 
agreement of the Federal Home Loan Bank, to engage 
in open market purchases of the common securities of 
any Federal Home Loan Bank. 
‘‘(B) 
EMERGENCY
DETERMINATION
REQUIRED.—In 
connection with any use of this authority, the Secretary 
must determine that such actions are necessary to— 
‘‘(i) provide stability to the financial markets;
H. R. 3221—34 
‘‘(ii) prevent disruptions in the availability of mort-
gage finance; and 
‘‘(iii) protect the taxpayer. 
‘‘(C) CONSIDERATIONS.—To protect the taxpayers, the 
Secretary of the Treasury shall take into consideration 
the following in connection with exercising the authority 
contained in this paragraph: 
‘‘(i) The need for preferences or priorities regarding 
payments to the Government. 
‘‘(ii) Limits on maturity or disposition of obligations 
or securities to be purchased. 
‘‘(iii) The Federal Home Loan Bank’s plan for the 
orderly resumption of private market funding or capital 
market access. 
‘‘(iv) The probability of the Federal Home Loan 
Bank fulfilling the terms of any such obligation or 
other security, including repayment. 
‘‘(v) The need to maintain the Federal Home Loan 
Bank’s status as a private shareholder-owned company. 
‘‘(vi) Restrictions on the use of Federal Home Loan 
Bank resources, including limitations on the payment 
of dividends and executive compensation and any such 
other terms and conditions as appropriate for those 
purposes. 
‘‘(D) REPORTS
TO
CONGRESS.—Upon exercise of this 
authority, the Secretary shall report to the Committees 
on the Budget, Financial Services, and Ways and Means 
of the House of Representatives and the Committees on 
the Budget, Finance, and Banking, Housing, and Urban 
Affairs of the Senate as to the necessity for the purchase 
and the determinations made by the Secretary under 
subparagraph (B) and with respect to the considerations 
required under subparagraph (C), and the size, terms, and 
probability of repayment or fulfillment of other terms of 
such purchase. 
‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.— 
‘‘(A) EXERCISE
OF
RIGHTS.—The Secretary of the 
Treasury may, at any time, exercise any rights received 
in connection with such purchases. 
‘‘(B) SALE
OF
OBLIGATIONS.—The Secretary of the 
Treasury may, at any time, subject to the terms of the 
security or otherwise upon terms and conditions and at 
prices determined by the Secretary, sell any obligation 
acquired by the Secretary under this subsection. 
‘‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGA-
TIONS.—The authority of the Secretary of the Treasury 
to hold, exercise any rights received in connection with, 
or sell, any obligations purchased is not subject to the 
provisions of paragraph (4). 
‘‘(3) FUNDING.—For the purpose of the authorities granted 
in this subsection, the Secretary of the Treasury may use 
the proceeds of the sale of any securities issued under chapter 
31 of Title 31, and the purposes for which securities may 
be issued under chapter 31 of Title 31 are extended to include 
such purchases and the exercise of any rights in connection 
with such purchases. Any funds expended for the purchase 
of, or modifications to, obligations and securities, or the exercise
H. R. 3221—35 
of any rights received in connection with such purchases under 
this subsection shall be deemed appropriated at the time of 
such purchase, modification, or exercise. 
‘‘(4) TERMINATION OF AUTHORITY.—The authority under this 
subsection (l), with the exception of paragraphs (2) and (3) 
of this subsection, shall expire December 31, 2009. 
‘‘(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECU-
TIVE COMPENSATION.—The Director shall have the power to 
approve, disapprove, or modify the executive compensation of 
the Federal Home Loan Bank, as defined under Regulation 
S-K, 17 C.F.R. 229.’’. 
SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL 
HOUSING FINANCE AGENCY AND THE BOARD OF GOV-
ERNORS OF THE FEDERAL RESERVE SYSTEM TO ENSURE 
FINANCIAL MARKET STABILITY . 
Subsection (a) of section 1313 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513), 
as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new paragraph: 
‘‘(3) COORDINATION
WITH
THE
CHAIRMAN
OF
THE
BOARD 
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.— 
‘‘(A) CONSULTATION.— The Director shall consult with, 
and consider the views of, the Chairman of the Board 
of Governors of the Federal Reserve System, with respect 
to the risks posed by the regulated entities to the financial 
system, prior to issuing any proposed or final regulations, 
orders, and guidelines with respect to the exercise of the 
additional authority provided in this Act regarding pruden-
tial management and operations standards, safe and sound 
operations of, and capital requirements and portfolio stand-
ards applicable to the regulated entities (as such term 
is defined in section 1303). The Director also shall consult 
with the Chairman regarding any decision to place a regu-
lated entity into conservatorship or receivership. 
‘‘(B) INFORMATION SHARING.—To facilitate the consult-
ative process, the Director shall share information with 
the Board of Governors of the Federal Reserve System 
on a regular, periodic basis as determined by the Director 
and the Board regarding the capital, asset and liabilities, 
financial condition, and risk management practices of the 
regulated entities as well as any information related to 
financial market stability. 
‘‘(C) TERMINATION OF CONSULTATION REQUIREMENT.— 
The requirement of the Director to consult with the Board 
of Governors of the Federal Reserve System under this 
paragraph shall expire at the conclusion of December 31, 
2009.’’.
H. R. 3221—36 
Subtitle B—Improvement of Mission 
Supervision 
SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL 
OVERSIGHT. 
Part 2 of subtitle A of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) 
is amended— 
(1) by striking the heading for the part and inserting the 
following: 
‘‘PART 2—ADDITIONAL AUTHORITIES OF THE 
DIRECTOR’’; 
and 
(2) by striking sections 1321 and 1322. 
SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD 
RESPONSIBILITIES. 
(a) IN GENERAL.—Part 2 of subtitle A of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4541 et seq.) is amended— 
(1) by striking ‘‘Secretary’’ each place that term appears 
and inserting ‘‘Director’’ in each of sections 1323, 1326, 1327, 
1328, and 1336; and 
(2) by striking sections 1338 and 1349 (12 U.S.C. 4562 
note and 4589). 
(b) RETENTION OF FAIR HOUSING RESPONSIBILITIES.—Section 
1325 of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4545) is amended in the matter 
preceding paragraph (1), by inserting ‘‘of Housing and Urban 
Development’’ after ‘‘The Secretary’’. 
SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS. 
Part 2 of subtitle A of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) 
is amended by inserting before section 1323 the following: 
‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS. 
‘‘(a) IN GENERAL.—The Director shall require each enterprise 
to obtain the approval of the Director for any product of the enter-
prise before initially offering the product. 
‘‘(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 National Mort-
gage Association, 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); 
‘‘(2) in the case of a product of the Federal Home Loan 
Mortgage Corporation, the product is authorized under para-
graph (1), (4), or (5) of section 305(a) of the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)); 
‘‘(3) the product is in the public interest; and
H. R. 3221—37 
‘‘(4) the product is consistent with the safety and soundness 
of the enterprise or 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.—Immediately upon 
receipt of a request for approval of a product, as required 
under paragraph (1), the Director 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 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 comments regarding the proposed product. 
‘‘(4) OFFERING OF PRODUCT.— 
‘‘(A) IN GENERAL.—Not later than 30 days after the 
close of the public comment period described in paragraph 
(3), the Director shall approve or deny the product, speci-
fying 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), then the 
enterprise may offer the product. 
‘‘(C) TEMPORARY APPROVAL.—The Director may, subject 
to the rules of the Director, provide for temporary approval 
of the offering of a product without a public comment 
period, if the Director finds that the existence of exigent 
circumstances makes such delay contrary to the public 
interest. 
‘‘(d) CONDITIONAL APPROVAL.—If the Director approves the 
offering of any product by an enterprise, the Director may establish 
terms, conditions, or limitations with respect to such product with 
which the enterprise must comply in order to offer such product. 
‘‘(e) EXCLUSIONS.— 
‘‘(1) IN
GENERAL.—The requirements of subsections (a) 
through (d) do not apply with respect to— 
‘‘(A) the automated loan underwriting system of an 
enterprise in existence as of the date of enactment of the 
Federal Housing Finance Regulatory Reform Act of 2008, 
including any upgrade to the technology, operating system, 
or software to operate the underwriting system; 
‘‘(B) any modification to the mortgage terms and condi-
tions or mortgage underwriting criteria relating to the 
mortgages that are purchased or guaranteed by an enter-
prise, provided that such modifications do not alter the 
underlying transaction so as to include services or 
financing, other than residential mortgage financing; or 
‘‘(C) any other activity that is substantially similar, 
as determined by rule of the Director to— 
‘‘(i) the activities described in subparagraphs (A) 
and (B); and 
‘‘(ii) other activities that have been approved by 
the Director in accordance with this section.
H. R. 3221—38 
‘‘(2) EXPEDITED REVIEW.— 
‘‘(A) ENTERPRISE NOTICE.—For any new activity that 
an enterprise considers not to be a product, the enterprise 
shall provide written notice to the Director of such activity, 
and may not commence such activity until the date of 
receipt of a notice under subparagraph (B) or the expiration 
of the period described in subparagraph (C). The Director 
shall establish, by regulation, the form and content of 
such written notice. 
‘‘(B) DIRECTOR
DETERMINATION.—Not later than 15 
days after the date of receipt of a notice under subpara-
graph (A), the Director shall determine whether such 
activity is a product subject to approval under this section. 
The Director shall, immediately upon so determining, notify 
the enterprise. 
‘‘(C) FAILURE TO ACT.—If the Director fails to determine 
whether such activity is a product within the 15-day period 
described in subparagraph (B), the enterprise may com-
mence the new activity in accordance with subparagraph 
(A). 
‘‘(f) NO LIMITATION.—Nothing in this section may be construed 
to restrict— 
‘‘(1) the safety and soundness authority of the Director 
over all new and existing products or activities; 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 an 
enterprise.’’. 
SEC. 1124. 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: ‘‘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 secured 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 effective January 1 of each year beginning after 
the effective date of the Federal Housing Finance Regulatory 
Reform Act of 2008, subject to the limitations in this paragraph. 
Each adjustment shall be made by adding to each such amount 
(as it may have been previously adjusted) a percentage thereof 
equal to the percentage increase, during the most recent 12- 
month or 4-quarter period ending before the time of determining 
such annual adjustment, in the housing price index maintained 
by the Director of the Federal Housing Finance Agency (pursu-
ant to section 1322 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If 
the change in such house price index during the most recent 
12-month or 4-quarter period ending before the time of deter-
mining such annual adjustment is a decrease, then no adjust-
ment shall be made for the next year, and the next adjustment 
shall take into account prior declines in the house price index, 
so that any adjustment shall reflect the net change in the
H. R. 3221—39 
house price index since the last adjustment. Declines in the 
house price index shall be accumulated and then reduce 
increases until subsequent increases exceed prior declines.’’. 
(2) HIGH-COST AREA LIMIT.—Section 302(b)(2) of the Federal 
National Mortgage Association Charter Act (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 115 percent of the median house price 
for such size residence exceeds the foregoing limitation for 
such size residence, to the lesser of 150 percent of such limita-
tion for such size residence or the amount that is equal to 
115 percent of the median house price in such area for such 
size residence.’’. 
(3) EFFECTIVE
DATE.—The amendments made by para-
graphs (1) and (2) of this subsection shall take effect upon 
the expiration of the date described in section 201(a) of the 
Economic Stimulus Act of 2008 (Public Law 110–185). 
(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: ‘‘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 secured 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 effective 
January 1 of each year beginning after the effective date of 
the Federal Housing Finance Regulatory Reform Act of 2008, 
subject to the limitations in this paragraph. Each adjustment 
shall be made by adding to each such amount (as it may 
have been previously adjusted) a percentage thereof equal to 
the percentage increase, during the most recent 12-month or 
4-quarter period ending before the time of determining such 
annual adjustment, in the housing price index maintained by 
the Director of the Federal Housing Finance Agency (pursuant 
to section 1322 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the 
change in such house price index during the most recent 12- 
month or 4-quarter period ending before the time of determining 
such annual adjustment is a decrease, then no adjustment 
shall be made for the next year, and the next adjustment 
shall take into account prior declines in the house price index, 
so that any adjustment shall reflect the net change in the 
house price index since the last adjustment. Declines in the 
house price index shall be accumulated and then reduce 
increases until subsequent increases exceed prior declines.’’. 
(2) HIGH-COST AREA LIMIT.—Section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(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 
115 percent of the median house price for such size residence 
exceeds the foregoing limitation for such size residence, to
H. R. 3221—40 
the lesser of 150 percent of such limitation for such size resi-
dence or the amount that is equal to 115 percent of the median 
house price in such area for such size residence.’’. 
(3) EFFECTIVE
DATE.—The amendments made by para-
graphs (1) and (2) of this subsection shall take effect upon 
the expiration of the date described in section 201(a) of the 
Economic Stimulus Act of 2008 (Public Law 110–185). 
(c) SENSE OF CONGRESS.—It is the sense of the Congress that 
the securitization of mortgages by the Federal National Mortgage 
Association and the Federal Home Loan Mortgage Corporation plays 
an important role in providing liquidity to the United States housing 
markets. Therefore, the Congress encourages the Federal National 
Mortgage Association and the Federal Home Loan Mortgage Cor-
poration to securitize mortgages acquired under the increased con-
forming loan limits established under this Act. 
(d) HOUSING PRICE INDEX.—Part 2 of subtitle A of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4541 et seq.) is amended by inserting after section 
1321 (as added by section 1123 of this Act) the following new 
section: 
‘‘SEC. 1322. HOUSING PRICE INDEX. 
‘‘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 Federal 
Housing Finance Agency to determine the national average 1-family 
house price, the House Price Index maintained by the Office of 
Federal Housing Enterprise Oversight of the Department of 
Housing and Urban Development before the effective date of the 
Federal Housing Finance Regulatory Reform Act of 2008, 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.’’. 
SEC. 1125. ANNUAL HOUSING REPORT. 
(a) REPEAL.—Section 1324 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4544) is 
hereby repealed. 
(b) ANNUAL HOUSING REPORT.—The Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 is amended 
by inserting after section 1323 the following: 
‘‘SEC. 1324. ANNUAL HOUSING REPORT. 
‘‘(a) IN GENERAL.—After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act and section 307(f) of the Federal Home 
Loan Mortgage Corporation Act, the Director shall submit a report, 
not later than October 30 of each year, to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Com-
mittee on Financial Services of the House of Representatives, on 
the activities of each enterprise. 
‘‘(b) CONTENTS.—The report required under subsection (a) 
shall— 
‘‘(1) discuss— 
‘‘(A) the extent to and manner in which—
H. R. 3221—41 
‘‘(i) each enterprise is achieving the annual housing 
goals established under subpart B; 
‘‘(ii) each enterprise is complying with its duty 
to serve underserved markets, as established under 
section 1335; 
‘‘(iii) each enterprise is complying with section 
1337; 
‘‘(iv) each enterprise received credit towards 
achieving each of its goals resulting from a transaction 
or activity pursuant to section 1331(b)(2); and 
‘‘(v) each enterprise is achieving the purposes of 
the enterprise established by law; and 
‘‘(B) the actions that each enterprise could undertake 
to promote and expand the purposes of the enterprise; 
‘‘(2) aggregate and analyze relevant data on income to 
assess the compliance of each enterprise with the housing goals 
established under subpart B; 
‘‘(3) aggregate and analyze data on income, race, and gender 
by census tract and other relevant classifications, and compare 
such data with larger demographic, housing, and economic 
trends; 
‘‘(4) identify the extent to which each enterprise is involved 
in mortgage purchases and secondary market activities 
involving subprime and nontraditional loans; 
‘‘(5) compare the characteristics of subprime and nontradi-
tional loans both purchased and securitized by each enterprise 
to other loans purchased and securitized by each enterprise; 
and 
‘‘(6) compare the characteristics of high-cost loans pur-
chased and securitized, where such securities are not held 
on portfolio to loans purchased and securitized, where such 
securities are either retained on portfolio or repurchased by 
the enterprise, including such characteristics as— 
‘‘(A) the purchase price of the property that secures 
the mortgage; 
‘‘(B) the loan-to-value ratio of the mortgage, which 
shall reflect any secondary liens on the relevant property; 
‘‘(C) the terms of the mortgage; 
‘‘(D) the creditworthiness of the borrower; and 
‘‘(E) any other relevant data, as determined by the 
Director. 
‘‘(c) DATA COLLECTION AND REPORTING.— 
‘‘(1) IN GENERAL.—To assist the Director in analyzing the 
matters described in subsection (b), the Director shall conduct, 
on a monthly basis, a survey of mortgage markets in accordance 
with this subsection. 
‘‘(2) DATA POINTS.—Each monthly survey conducted by the 
Director under paragraph (1) shall collect data on— 
‘‘(A) the characteristics of individual mortgages that 
are eligible for purchase by the enterprises and the 
characteristics of individual mortgages that are not eligible 
for purchase by the enterprises including, in both cases, 
information concerning— 
‘‘(i) the price of the house that secures the mort-
gage;
H. R. 3221—42 
‘‘(ii) the loan-to-value ratio of the mortgage, which 
shall reflect any secondary liens on the relevant prop-
erty; 
‘‘(iii) the terms of the mortgage; 
‘‘(iv) the creditworthiness of the borrower or bor-
rowers; and 
‘‘(v) whether the mortgage, in the case of a con-
forming mortgage, was purchased by an enterprise; 
‘‘(B) the characteristics of individual subprime and non-
traditional mortgages that are eligible for purchase by the 
enterprises and the characteristics of borrowers under such 
mortgages, including the creditworthiness of such bor-
rowers and determination whether such borrowers would 
qualify for prime lending; and 
‘‘(C) such other matters as the Director determines 
to be appropriate. 
‘‘(3) PUBLIC AVAILABILITY.—The Director shall make any 
data collected by the Director in connection with the conduct 
of a monthly survey available to the public in a timely manner, 
provided that the Director may modify the data released to 
the public to ensure that the data— 
‘‘(A) is not released in an identifiable form; and 
‘‘(B) is not otherwise obtainable from other publicly 
available data sets. 
‘‘(4) DEFINITION.—For purposes of this subsection, the term 
‘identifiable form’ means any representation of information that 
permits the identity of a borrower to which the information 
relates to be reasonably inferred by either direct or indirect 
means.’’. 
SEC. 1126. PUBLIC USE DATABASE. 
Section 1323 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (42 U.S.C. 4543) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘(a) IN GENERAL.—The Secretary’’ and 
inserting the following: 
‘‘(a) AVAILABILITY.— 
‘‘(1) IN GENERAL.—The Director’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(2) CENSUS
TRACT
LEVEL
REPORTING.—Such data shall 
include the data elements required to be reported under the 
Home Mortgage Disclosure Act of 1975, at the census tract 
level.’’; 
(2) in subsection (b)(2), by inserting before the period at 
the end the following: ‘‘or with subsection (a)(2)’’; and 
(3) by adding at the end the following new subsection: 
‘‘(d) TIMING.—Data submitted under this section by an enter-
prise in connection with a provision referred to in subsection (a) 
shall be made publicly available in accordance with this section 
not later than September 30 of the year following the year to 
which the data relates.’’. 
SEC. 1127. REPORTING OF MORTGAGE DATA. 
Section 1326 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4546) is amended— 
(1) in subsection (a), by striking ‘‘The Director’’ and 
inserting ‘‘Subject to subsection (d), the Director’’; and 
(2) by adding at the end the following:
H. R. 3221—43 
‘‘(d) MORTGAGE INFORMATION.—Subject to privacy consider-
ations, as described in section 304(j) of the Home Mortgage Disclo-
sure Act of 1975 (12 U.S.C. 2803(j)), the Director shall, by regulation 
or order, provide that certain information relating to single family 
mortgage data of the enterprises shall be disclosed to the public, 
in order to make available to the public— 
‘‘(1) the same data from the enterprises that is required 
of insured depository institutions under the Home Mortgage 
Disclosure Act of 1975; and 
‘‘(2) information collected by the Director under section 
1324(b)(6).’’. 
SEC. 1128. REVISION OF HOUSING GOALS. 
(a) REPEAL.—Sections 1331 through 1334 of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4561 through 4564) are hereby repealed. 
(b) HOUSING GOALS.—The Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 is amended by inserting 
before section 1335 the following: 
‘‘SEC. 1331. ESTABLISHMENT OF HOUSING GOALS. 
‘‘(a) IN GENERAL.—The Director shall, by regulation, establish 
effective for 2010 and each year thereafter, annual housing goals, 
with respect to the mortgage purchases by the enterprises, as 
follows: 
‘‘(1) SINGLE-FAMILY
HOUSING
GOALS.—Four single-family 
housing goals under section 1332. 
‘‘(2) MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.— 
One multifamily special affordable housing goal under section 
1333. 
‘‘(b) TIMING.—The Director shall, by regulation, establish an 
annual deadline by which the Director shall establish the annual 
housing goals under this subpart for each year, taking into consider-
ation the need for the enterprises to reasonably and sufficiently 
plan their operations and activities in advance, including operations 
and activities necessary to meet such annual goals. 
‘‘(c) TRANSITION.—The annual housing goals effective for 2008 
pursuant to this subpart, as in effect before the enactment of 
the Federal Housing Finance Regulatory Reform Act of 2008, shall 
remain in effect for 2009, except that not later than the expiration 
of the 270-day period beginning on the date of the enactment 
of such Act, the Director shall review such goals applicable for 
2009 to determine the feasibility of such goals given the market 
conditions current at such time and, after seeking public comment 
for a period not to exceed 30 days, may make appropriate adjust-
ments consistent with such market conditions. 
‘‘(d) ELIMINATING INTEREST RATE DISPARITIES.— 
‘‘(1) IN GENERAL.—Upon request by the Director, an enter-
prise shall provide to the Director, in a form determined by 
the Director, data the Director may review to determine 
whether there exist disparities in interest rates charged on 
mortgages to borrowers who are minorities as compared with 
comparable mortgages to borrowers of similar creditworthiness 
who are not minorities. 
‘‘(2) REMEDIAL ACTIONS UPON PRELIMINARY FINDING.—Upon 
a preliminary finding by the Director that a pattern of dispari-
ties in interest rates with respect to any lender or lenders
H. R. 3221—44 
exists pursuant to the data provided by an enterprise in para-
graph (1), the Director shalll 
‘‘(A) refer the preliminary finding to the appropriate 
regulatory or enforcement agency for further review; and 
‘‘(B) require the enterprise to submit additional data 
with respect to any lender or lenders, as appropriate and 
to the extent practicable, to the Director who shall submit 
any such additional data to the regulatory or enforcement 
agency for appropriate action. 
‘‘(3) ANNUAL
REPORT
TO
CONGRESS.—The Director shall 
submit to the Committee on Financial Services of the House 
of Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate a report describing the actions 
taken, and being taken, by the Director to carry out this sub-
section. No such report shall identify any lender or lenders 
who have not been found to have engaged in discriminatory 
lending practices pursuant to a final adjudication on the record, 
and after opportunity for an administrative hearing, in accord-
ance with subchapter II of chapter 5 of title 5, United States 
Code. 
‘‘(4) PROTECTION OF IDENTITY OF INDIVIDUALS.—In carrying 
out this subsection, the Director shall ensure that no property- 
related or financial information that would enable a borrower 
to be identified shall be made public. 
‘‘SEC. 1332. SINGLE-FAMILY HOUSING GOALS. 
‘‘(a) IN GENERAL.—The Director shall, by regulation, establish 
annual goals for the purchase by each enterprise of the following 
types of mortgages for the following categories of families: 
‘‘(1) PURCHASE-MONEY MORTGAGES.—A goal for purchase 
of conventional, conforming, single-family, purchase money 
mortgages financing owner-occupied housing for each of the 
following categories of families: 
‘‘(A) Low-income families. 
‘‘(B) Families that reside in low-income areas. 
‘‘(C) Very low-income families. 
‘‘(2) REFINANCING
MORTGAGES.—A goal for purchase of 
conventional, conforming mortgages on owner-occupied, single- 
family housing for low-income families that are given to pay 
off or prepay an existing loan secured by the same property. 
‘‘(b) GOALS
AS
A PERCENTAGE
OF TOTAL MORTGAGE PUR-
CHASES.—The goals established under paragraphs (1) and (2) of 
subsection (a) shall be established as a percentage of the total 
number of conventional, conforming, single-family, owner-occupied, 
purchase money mortgages purchased by the enterprise, or as 
percentage of the total number of conventional, single-family, owner- 
occupied refinance mortgages purchased by the enterprise, as 
applicable, that are mortgages for the types of families specified 
in paragraphs (1) and (2) of subsection (a). 
‘‘(c) 
SINGLE-FAMILY, 
OWNER-OCCUPIED
RENTAL
HOUSING 
UNITS.—The Director shall require each enterprise to report the 
number of rental housing units affordable to low-income families 
each year which are contained in mortgages purchased by the 
enterprise financing 2- to 4-unit single-family, owner-occupied prop-
erties and may, by regulation, establish additional requirements 
relating to such units. 
‘‘(d) DETERMINATION OF COMPLIANCE.—
H. R. 3221—45 
‘‘(1) IN GENERAL.—The Director shall determine, for each 
year that the housing goals under this section are in effect 
pursuant to section 1331(a), whether each enterprise has com-
plied with each such goal established under subsection (a) 
of this section and any additional requirements which may 
be established under subsection (c) of this section. 
‘‘(2) PURCHASE-MONEY
MORTGAGE
GOALS.—An enterprise 
shall be considered to be in compliance with a housing goal 
under subparagraph (A), (B), or (C) of subsection (a)(1) for 
a year only if, for the type of family described in such subpara-
graph, the percentage of the number of conventional, con-
forming, single-family, owner-occupied, purchase money mort-
gages purchased by the enterprise in such year that serve 
such families, meets or exceeds the target for the year for 
such type of family that is established under subsection (e). 
‘‘(3) REFINANCE GOAL.—An enterprise shall be considered 
to be in compliance with the refinance goal under subsection 
(a)(2) for a year only if the percentage of the number of conven-
tional, conforming, single-family, owner-occupied refinance 
mortgages purchased by the enterprise in such year that serve 
low-income families meets or exceeds the target for the year 
that is established under subsection (e). 
‘‘(e) ANNUAL TARGETS.— 
‘‘(1) IN GENERAL.—The Director shall, by regulation, estab-
lish annual targets for each goal and subgoal under this section, 
provided that the Director shall not set prospective targets 
longer than three years. In establishing such targets, the 
Director shall not consider segments of the market determined 
to be unacceptable or contrary to good lending practices, incon-
sistent with safety and soundness, or unauthorized for purchase 
by the enterprises. 
‘‘(2) GOALS TARGETS.— 
‘‘(A) CALCULATION.—The Director shall calculate, for 
each of the types of families described in subsection (a), 
the percentage, for each of the three years that most 
recently precede such year and for which information under 
the Home Mortgage Disclosure Act of 1975 is publicly avail-
able— 
‘‘(i) of the number of conventional, conforming, 
single-family, owner-occupied purchase money mort-
gages originated in such year that serve such type 
of family, or 
‘‘(ii) the number of conventional, conforming, 
single-family, 
owner-occupied 
refinance 
mortgages 
originated in such year that serve low-income families, 
as applicable, as determined by the Director using the 
information obtained and determined pursuant to para-
graphs (4) and (5). 
‘‘(B) ESTABLISHMENT OF GOAL TARGETS.—The Director 
shall, by regulation, establish targets for each of the goal 
categories, taking into consideration the calculations under 
subparagraph (A) and the following factors: 
‘‘(i) National housing needs. 
‘‘(ii) Economic, housing, and demographic condi-
tions, including expected market developments.
H. R. 3221—46 
‘‘(iii) The performance and effort of the enterprises 
toward achieving the housing goals under this section 
in previous years. 
‘‘(iv) The ability of the enterprise to lead the 
industry in making mortgage credit available. 
‘‘(v) Such other reliable mortgage data as may 
be available. 
‘‘(vi) The size of the purchase money conventional 
mortgage market, or refinance conventional mortgage 
market, as applicable, serving each of the types of 
families described in subsection (a), relative to the 
size of the overall purchase money mortgage market 
or the overall refinance mortgage market, respectively. 
‘‘(vii) The need to maintain the sound financial 
condition of the enterprises. 
‘‘(3) AUTHORITY TO ADJUST TARGETS.—The Director may, 
by regulation, adjust the percentage targets previously estab-
lished by regulation pursuant to paragraph (2)(B) for any year, 
to reflect subsequent available data and market developments. 
‘‘(4) HMDA INFORMATION.—The Director shall annually 
obtain information submitted in compliance with the Home 
Mortgage Disclosure Act of 1975 regarding conventional, con-
forming, single-family, owner-occupied, purchase money and 
refinance mortgages originated and purchased for the previous 
year. 
‘‘(5) CONFORMING MORTGAGES.—In determining whether a 
mortgage is a conforming mortgage for purposes of this para-
graph, the Director shall consider the original principal balance 
of the mortgage loan to be the principal balance as reported 
in the information referred to in paragraph (4), as rounded 
to the nearest thousand dollars. 
‘‘(f) NOTICE OF DETERMINATION AND ENTERPRISE COMMENT.— 
‘‘(1) NOTICE.—Within 30 days of making a determination 
under subsection (d) regarding compliance of an enterprise 
for a year with a housing goal established under this section 
and before any public disclosure thereof, the Director shall 
provide notice of the determination to the enterprise, which 
shall include an analysis and comparison, by the Director, 
of the performance of the enterprise for the year and the 
targets for the year under subsection (e). 
‘‘(2) COMMENT PERIOD.—The Director shall provide each 
enterprise an opportunity to comment on the determination 
during the 30-day period beginning upon receipt by the enter-
prise of the notice. 
‘‘(g) USE OF BORROWER INCOME.—In monitoring the perform-
ance of each enterprise pursuant to the housing goals under this 
section and evaluating such performance (for purposes of section 
1336), the Director shall consider a mortgagor’s income to be such 
income at the time of origination of the mortgage. 
‘‘(h) CONSIDERATION
OF PROPERTIES WITH RENTAL UNITS.— 
Mortgages financing two- to four-unit owner-occupied properties 
shall count toward the achievement of the single-family housing 
goals under this section, if such properties otherwise meet the 
requirements under this section, notwithstanding the use of one 
or more units for rental purposes. 
‘‘(i) GOALS CREDIT.—The Director shall determine whether an 
enterprise shall receive full, partial, or no credit for a transaction
H. R. 3221—47 
toward achievement of any of the housing goals established pursu-
ant to section 1332 and 1333. In making any such determination, 
the Director shall consider whether a transaction or activity of 
an enterprise is substantially equivalent to a mortgage purchase 
and either (1) creates a new market, or (2) adds liquidity to an 
existing market. No credit toward the achievement of the housing 
goals and subgoals established under this section may be given 
to the purchase of mortgages, including any transaction or activity 
of an enterprise determined to be substantially equivalent to a 
mortgage purchase, that is determined to be unacceptable or con-
trary to good lending practices, inconsistent with safety and sound-
ness, or unauthorized for purchase by the enterprises, pursuant 
to regulations issued by the Director. 
‘‘SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL. 
‘‘(a) ESTABLISHMENT OF GOAL.— 
‘‘(1) IN GENERAL.—The Director shall, by regulation, estab-
lish a single annual goal, by either unit or dollar volume, 
of purchases by each enterprise of mortgages on multifamily 
housing that finance dwelling units affordable to low-income 
families. 
‘‘(2) ADDITIONAL REQUIREMENTS FOR UNITS AFFORDABLE TO 
VERY LOW-INCOME FAMILIES.—When establishing the goal under 
this section, the Director shall establish additional require-
ments for the purchase by each enterprise of mortgages on 
multifamily housing that finance dwelling units affordable to 
very low-income families. 
‘‘(3) REPORTING
ON
SMALLER
PROPERTIES.—The Director 
shall require each enterprise to report on the purchase by 
each enterprise of multifamily housing of a smaller or limited 
size that is affordable to low-income families, which may be 
based on multifamily projects of 5 to 50 units (as such numbers 
may be adjusted by the Director) or on mortgages of up to 
$5,000,000 (as such amount may be adjusted by the Director), 
and may, by regulation, establish such aditional requirements 
related to such units. 
‘‘(4) FACTORS.—In establishing the goal and additional 
requirements under this section, the Director shall not consider 
segments of the market determined to be inconsistent with 
safety and soundness or unauthorized for purchase by the 
enterprises, and shall take into consideration— 
‘‘(A) national multifamily mortgage credit needs and 
the ability of the enterprise to provide additional liquidity 
and stability for the multifamily mortgage market; 
‘‘(B) the performance and effort of the enterprise in 
making mortgage credit available for multifamily housing 
in previous years; 
‘‘(C) the size of the multifamily mortgage market for 
housing affordable to low-income and very low-income fami-
lies, including the size of the multifamily markets for 
housing of a smaller or limited size; 
‘‘(D) the ability of the enterprise to lead the market 
in making multifamily mortgage credit available, especially 
for multifamily housing described in paragraphs (1) and 
(2); 
‘‘(E) the availability of public subsidies; and
H. R. 3221—48 
‘‘(F) the need to maintain the sound financial condition 
of the enterprise. 
‘‘(b) UNITS FINANCED BY HOUSING FINANCE AGENCY BONDS.— 
The Director shall give full credit toward the achievement of the 
multifamily special affordable housing goal under this section (for 
purposes of section 1336) to dwelling units in multifamily housing 
that otherwise qualifies under such goal and that is financed by 
tax-exempt or taxable bonds issued by a State or local housing 
finance agency, if such bonds, in whole or in part— 
‘‘(1) are secured by a guarantee of the enterprise; or 
‘‘(2) are purchased by the enterprise, except that the 
Director may give less than full credit for purchases of invest-
ment grade bonds, to the extent that such purchases do not 
provide a new market or add liquidity to an existing market. 
‘‘(c) MEASUREMENT OF PERFORMANCE.—The Director shall mon-
itor the performance of each enterprise in meeting the goals estab-
lished under this section and shall evaluate such performance (for 
purposes of section 1336) based on whether the rent levels are 
affordable. A rent level shall be considered to be affordable for 
purposes of this subsection for low-income families if it does not 
exceed 30 percent of the maximum income level of such income 
category, with appropriate adjustments for unit size as measured 
by the number of bedrooms. 
‘‘(d) DETERMINATION OF COMPLIANCE.—The Director shall deter-
mine, for each year that the housing goal under this section is 
in effect pursuant to section 1331(a), whether each enterprise has 
complied with such goal and the additional requirements under 
subsection (a)(2). 
‘‘SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS. 
‘‘(a) AUTHORITY.—An enterprise may petition the Director in 
writing at any time during a year to reduce the level of any 
goal or subgoal for such year established pursuant to this subpart. 
‘‘(b) STANDARD FOR REDUCTION.—The Director may reduce the 
level for a goal or subgoal pursuant to such a petition only if— 
‘‘(1) market and economic conditions or the financial condi-
tion of the enterprise require such action; or 
‘‘(2) efforts to meet the goal or subgoal would result in 
the constraint of liquidity, over-investment in certain market 
segments, or other consequences contrary to the intent of this 
subpart, or section 301(3) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1716(3)) or section 301(b)(3) 
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
1451 note), as applicable. 
‘‘(c) DETERMINATION.—The Director shall, promptly upon receipt 
of a petition regarding a reduction, seek public comment on the 
reduction for a period of 30 days. The Director shall make a deter-
mination regarding any proposed reduction within 30 days after 
the expiration of such public comment period. The Director may 
extend such determination period for a single additional 15-day 
period, but only if the Director requests additional information 
from the enterprise.’’. 
(c) CONFORMING AMENDMENTS.—The Housing and Community 
Development Act of 1992 is amendedl 
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
preceding paragraph (1), by striking ‘‘low- and moderate-income
H. R. 3221—49 
housing goal’’ and all that follows through ‘‘section 1334’’ and 
inserting ‘‘housing goals established under this subpart’’; and 
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by striking 
‘‘sections 1332, 1333, and 1334,’’ and inserting ‘‘this subpart’’. 
(d) DEFINITIONS.—Section 1303 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502) 
is amended— 
(1) by striking paragraph (24), as so designated by section 
1002 of this Act, and inserting the following: 
‘‘(24) VERY LOW-INCOME.— 
‘‘(A) IN GENERAL.—The term ‘very low-income’ means— 
‘‘(i) in the case of owner-occupied units, families 
having incomes not greater than 50 percent of the 
area median income; and 
‘‘(ii) in the case of rental units, families having 
incomes not greater than 50 percent of the area median 
income, with adjustments for smaller and larger fami-
lies, as determined by the Director. 
‘‘(B) RULE OF CONSTRUCTION.—For purposes of section 
1338 and 1339, the term ‘very low-income’ means— 
‘‘(i) in the case of owner-occupied units, income 
in excess of 30 percent but not greater than 50 percent 
of the area median income; and 
‘‘(ii) in the case of rental units, income in excess 
of 30 percent but not greater than 50 percent of the 
area median income, with adjustments for smaller and 
larger families, as determined by the Director.’’; and 
(2) by adding at the end the following: 
‘‘(26) CONFORMING MORTGAGE.—The term ‘conforming mort-
gage’ means, with respect to an enterprise, a conventional 
mortgage having an original principal obligation that does not 
exceed the dollar amount limitation in effect at the time of 
such origination and applicable to such mortgage, under, as 
applicable— 
‘‘(A) section 302(b)(2) of the Federal National Mortgage 
Association Charter Act; or 
‘‘(B) section 305(a)(2) of the Federal Home Loan Mort-
gage Corporation Act. 
‘‘(27) EXTREMELY LOW-INCOME.—The term ‘extremely low- 
income’ means— 
‘‘(A) in the case of owner-occupied units, income not 
in excess of 30 percent of the area median income; and 
‘‘(B) in the case of rental units, income not in excess 
of 30 percent of the area median income, with adjustments 
for smaller and larger families, as determined by the 
Director. 
‘‘(28) LOW-INCOME
AREA.—The term ‘low-income area’ 
means a census tract or block numbering area in which the 
median income does not exceed 80 percent of the median income 
for the area in which such census tract or block numbering 
area is located, and, for the purposes of section 1332(a)(1)(B), 
shall include families having incomes not greater than 100 
percent of the area median income who reside in minority 
census tracts and shall include families having incomes not 
greater than 100 percent of the area median income who reside 
in designated disaster areas.
H. R. 3221—50 
‘‘(29) MINORITY CENSUS TRACT.—The term ‘minority census 
tract’ means a census tract that has a minority population 
of at least 30 percent and a median family income of less 
than 100 percent of the area family median income. 
‘‘(30) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORD-
ABLE
AND
AVAILABLE
TO
EXTREMELY
LOW-INCOME
RENTER 
HOUSEHOLDS.— 
‘‘(A) IN
GENERAL.—The term ‘shortage of standard 
rental units both affordable and available to extremely 
low-income renter households’ means the gap between— 
‘‘(i) the number of units with complete plumbing 
and kitchen facilities with a rent that is 30 percent 
or less of 30 percent of the adjusted area median 
income as determined by the Director that are occupied 
by extremely low-income renter households or are 
vacant for rent; and 
‘‘(ii) the number of extremely low-income renter 
households. 
‘‘(B) RULE OF CONSTRUCTION.—If the number of units 
described in subparagraph (A)(i) exceeds the number of 
extremely low-income households as described in subpara-
graph (A)(ii), there is no shortage. 
‘‘(31) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORD-
ABLE
AND
AVAILABLE
TO
VERY
LOW-INCOME
RENTER
HOUSE-
HOLDS.— 
‘‘(A) IN
GENERAL.—The term ‘shortage of standard 
rental units both affordable and available to very low- 
income renter households’ means the gap between— 
‘‘(i) the number of units with complete plumbing 
and kitchen facilities with a rent that is 30 percent 
or less of 50 percent of the adjusted area median 
income as determined by the Director that are occupied 
by either extremely low- or very low-income renter 
households or are vacant for rent; and 
‘‘(ii) the number of extremely low- and very low- 
income renter households. 
‘‘(B) RULE OF CONSTRUCTION.—If the number of units 
described in subparagraph (A)(i) exceeds the number of 
extremely low- and very low-income households as 
described in subparagraph (A)(ii), there is no shortage.’’. 
SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS. 
(a) ESTABLISHMENT AND EVALUATION OF PERFORMANCE.—Sec-
tion 1335 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4565) is amended— 
(1) in the section heading, by inserting ‘‘DUTY TO SERVE 
UNDERSERVED MARKETS AND’’ before ‘‘OTHER’’; 
(2) by striking subsection (b); 
(3) in subsection (a)— 
(A) in the matter preceding paragraph (1), by inserting 
‘‘and to carry out the duty under subsection (a) of this 
section’’ before ‘‘, each enterprise shall’’; 
(B) in paragraph (3), by inserting ‘‘and’’ after the semi-
colon at the end; 
(C) in paragraph (4), by striking ‘‘; and’’ and inserting 
a period; 
(D) by striking paragraph (5); and
H. R. 3221—51 
(E) by redesignating such subsection as subsection (b); 
(4) by inserting before subsection (b) (as so redesignated 
by paragraph (3)(E) of this subsection) the following new sub-
section: 
‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— 
‘‘(1) DUTY.—To increase the liquidity of mortgage invest-
ments and improve the distribution of investment capital avail-
able for mortgage financing for underserved markets, each 
enterprise shall provide leadership to the market in developing 
loan products and flexible underwriting guidelines to facilitate 
a secondary market for mortgages for very low-, low-, and 
moderate-income families with respect to the following under-
served markets: 
‘‘(A) MANUFACTURED HOUSING.—The enterprise shall 
develop loan products and flexible underwriting guidelines 
to facilitate a secondary market for mortgages on manufac-
tured homes for very low-, low-, and moderate-income fami-
lies. 
‘‘(B) AFFORDABLE HOUSING PRESERVATION.—The enter-
prise shall develop loan products and flexible underwriting 
guidelines to facilitate a secondary market to preserve 
housing affordable to very low-, low-, and moderate-income 
families, including housing projects subsidized underl 
‘‘(i) the project-based and tenant-based rental 
assistance programs under section 8 of the United 
States Housing Act of 1937; 
‘‘(ii) the program under section 236 of the National 
Housing Act; 
‘‘(iii) the below-market interest rate mortgage pro-
gram under section 221(d)(4) of the National Housing 
Act; 
‘‘(iv) the supportive housing for the elderly pro-
gram under section 202 of the Housing Act of 1959; 
‘‘(v) the supportive housing program for persons 
with disabilities under section 811 of the Cranston- 
Gonzalez National Affordable Housing Act; 
‘‘(vi) the programs under title IV of the McKinney- 
Vento Homeless Assistance Act (42 U.S.C. 11361 et 
seq.), but only permanent supportive housing projects 
subsidized under such programs; 
‘‘(vii) the rural rental housing program under sec-
tion 515 of the Housing Act of 1949; 
‘‘(viii) the low-income housing tax credit under sec-
tion 42 of the Internal Revenue Code of 1986; and 
‘‘(ix) comparable state and local affordable housing 
programs. 
‘‘(C) RURAL
MARKETS.—The enterprise shall develop 
loan products and flexible underwriting guidelines to facili-
tate a secondary market for mortgages on housing for very 
low-, and low-, and moderate-income families in rural 
areas.’’; and 
(5) by adding at the end the following new subsections: 
‘‘(c) ADDITIONAL CATEGORIES.—The Director may submit rec-
ommendations to the Committee on Financial Services of the House 
of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate for the establishment of additional 
categories under subsection (a), provided that the Director makes
H. R. 3221—52 
a preliminary determination that any such category is important 
to the mission of the enterprises, that the category is an under-
served market, and that the establishment of such category is 
warranted. 
‘‘(d) EVALUATION AND REPORTING OF COMPLIANCE.— 
‘‘(1) IN GENERAL.—The Director shall, by regulation, estab-
lish effective for 2010 and thereafter a manner for evaluating 
whether, and the extent to which, the enterprises have complied 
with the duty under subsection (a) to serve underserved mar-
kets and for rating the extent of such compliance. Using such 
method, the Director shall, for 2010 and each year thereafter, 
evaluate such compliance and rate the performance of each 
enterprise as to extent of compliance. The Director shall include 
such evaluation and rating for each enterprise for a year in 
the report for that year submitted pursuant to section 1319B(a). 
‘‘(2) SEPARATE EVALUATIONS.—In determining whether an 
enterprise has complied with the duty referred to in paragraph 
(1), the Director shall separately evaluate whether the enter-
prise has complied with such duty with respect to each of 
the underserved markets identified in subsection (a), taking 
into considerationl 
‘‘(A) the development of loan products, more flexible 
underwriting guidelines, and other innovative approaches 
to providing financing to each of such underserved markets; 
‘‘(B) the extent of outreach to qualified loan sellers 
and other market participants in each of such underserved 
markets; 
‘‘(C) the volume of loans purchased in each of such 
underserved markets relative to the market opportunities 
available to the enterprise, except that the Director shall 
not establish specific quantitative targets nor evaluate the 
enterprises based solely on the volume of loans purchased; 
and 
‘‘(D) the amount of investments and grants in projects 
which assist in meeting the needs of such underserved 
markets. 
‘‘(3) MANUFACTURED
HOUSING
MARKET.—In determining 
whether an enterprise has complied with the duty under 
subparagraph (A) of subsection (a)(1), the Director may consider 
loans secured by both real and personal property. 
‘‘(4) PROHIBITION
OF
CONSIDERATION
OF
AFFORDABLE 
HOUSING FUND GRANTS FOR MEETING DUTY TO SERVE.— In deter-
mining whether an enterprise has complied with the duty 
referred to in paragraph (1), the Director may not consider 
any affordable housing fund grant amounts used under section 
1337 for eligible activities under subsection (g) of such section.’’. 
(b) ENFORCEMENT.—Subsection (a) of section 1336 of the 
Housing and Community Development Act of 1992 (12 U.S.C. 
4566(a)) is amended— 
(1) in paragraph (1), by inserting ‘‘and with the duty under 
section 1335(a) of each enterprise with respect to underserved 
markets,’’ before ‘‘as provided in this section’’; and 
(2) by adding at the end of such subsection, as amended 
by the preceding provisions of this title, the following new 
paragraph: 
‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE MORTGAGE CREDIT 
TO UNDERSERVED MARKETS.—The duty under section 1335(a)
H. R. 3221—53 
of each enterprise to serve underserved markets (as determined 
in accordance with section 1335(c)) shall be enforceable under 
this section to the same extent and under the same provisions 
that the housing goals established under this subpart are 
enforceable. Such duty shall be enforceable only under this 
section, except that such duty shall not be subject to subsection 
(c)(7) of this section and shall not be enforceable under any 
other provision of this title (including subpart C of this part) 
or under any provision of the Federal National Mortgage 
Association Charter Act or the Federal Home Loan Mortgage 
Corporation Act.’’. 
(c) ADDITIONAL CREDIT
FOR CERTAIN MORTGAGES.—Section 
1336(a) of the Housing and Community Development Act of 1992 
(12 U.S.C. 4566(a)) is amendedl 
(1) in paragraph (2), by inserting ‘‘, except as provided 
in paragraph (5),’’ after ‘‘which’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(5) ADDITIONAL CREDIT.—The Director may assign addi-
tional credit toward achievement, under this section, of the 
housing goals for mortgage purchase activities of the enterprises 
that comply with the requirements of such goals and support 
housing that includes a licensed childcare center. The avail-
ability of additional credit under this paragraph shall not be 
used to increase any housing goal, subgoal, or target established 
under this subpart.’’. 
SEC. 
1130. 
MONITORING 
AND 
ENFORCING 
COMPLIANCE 
WITH 
HOUSING GOALS. 
(a) IN GENERAL.—Section 1336 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566) 
is amended by striking subsections (b) and (c) and inserting the 
following: 
‘‘(b) NOTICE AND PRELIMINARY DETERMINATION OF FAILURE TO 
MEET GOALS.— 
‘‘(1) NOTICE.—If the Director preliminarily determines that 
an enterprise has failed, or that there is a substantial prob-
ability that an enterprise will fail, to meet any housing goal 
under this subpart, the Director shall provide written notice 
to the enterprise of such a preliminary determination, the rea-
sons for such determination, and the information on which 
the Director based the determination. 
‘‘(2) RESPONSE PERIOD.— 
‘‘(A) IN GENERAL.—During the 30-day period beginning 
on the date on which an enterprise is provided notice 
under paragraph (1), the enterprise may submit to the 
Director any written information that the enterprise con-
siders appropriate for consideration by the Director in 
finally determining whether such failure has occurred or 
whether the achievement of such goal was or is feasible. 
‘‘(B) EXTENDED PERIOD.—The Director may extend the 
period under subparagraph (A) for good cause for not more 
than 30 additional days. 
‘‘(C) SHORTENED PERIOD.—The Director may shorten 
the period under subparagraph (A) for good cause. 
‘‘(D) FAILURE TO RESPOND.—The failure of an enterprise 
to provide information during the 30-day period under this 
paragraph (as extended or shortened) shall waive any right
H. R. 3221—54 
of the enterprise to comment on the proposed determination 
or action of the Director. 
‘‘(3) CONSIDERATION
OF
INFORMATION
AND
FINAL
DETER-
MINATION.— 
‘‘(A) IN GENERAL.—After the expiration of the response 
period under paragraph (2), or upon receipt of information 
provided during such period by the enterprise, whichever 
occurs earlier, the Director shall issue a final determination 
on— 
‘‘(i) whether the enterprise has failed, or there 
is a substantial probability that the enterprise will 
fail, to meet the housing goal; and 
‘‘(ii) whether (taking into consideration market and 
economic conditions and the financial condition of the 
enterprise) the achievement of the housing goal was 
or is feasible. 
‘‘(B) CONSIDERATIONS.—In making a final determina-
tion under subparagraph (A), the Director shall take into 
consideration any relevant information submitted by the 
enterprise during the response period. 
‘‘(C) NOTICE.—The Director shall provide written 
notice, including a response to any information submitted 
during the response period, to the enterprise, the Com-
mittee on Banking, Housing, and Urban Affairs of the 
Senate, and the Committee on Financial Services of the 
House of Representatives, of— 
‘‘(i) each final determination under this paragraph 
that an enterprise has failed, or that there is a substan-
tial probability that the enterprise will fail, to meet 
a housing goal; 
‘‘(ii) each final determination that the achievement 
of a housing goal was or is feasible; and 
‘‘(iii) the reasons for each such final determination. 
‘‘(c) CEASE AND DESIST, CIVIL MONEY PENALTIES, AND REMEDIES 
INCLUDING HOUSING PLANS.— 
‘‘(1) REQUIREMENT.—If the Director finds, pursuant to sub-
section (b), that there is a substantial probability that an enter-
prise will fail, or has actually failed, to meet any housing 
goal under this subpart, and that the achievement of the 
housing goal was or is feasible, the Director may require that 
the enterprise submit a housing plan under this subsection. 
If the Director makes such a finding and the enterprise refuses 
to submit such a plan, submits an unacceptable plan, or fails 
to comply with the plan, the Director may issue a cease and 
desist order in accordance with section 1341 and impose civil 
money penalties in accordance with section 1345. 
‘‘(2) HOUSING PLAN.—If the Director requires a housing 
plan under this subsection, such a plan shall be— 
‘‘(A) a feasible plan describing the specific actions the 
enterprise will take— 
‘‘(i) to achieve the goal for the next calendar year; 
and 
‘‘(ii) if the Director determines that there is a 
substantial probability that the enterprise will fail to 
meet a goal in the current year, to make such improve-
ments and changes in its operations as are reasonable 
in the remainder of such year; and
H. R. 3221—55 
‘‘(B) sufficiently specific to enable the Director to mon-
itor compliance periodically. 
‘‘(3) DEADLINE FOR SUBMISSION.—The Director shall estab-
lish a deadline for an enterprise to submit a housing plan 
to the Director, which may not be more than 45 days after 
the enterprise is provided notice. The Director may extend 
the deadline to the extent that the Director determines nec-
essary. Any extension of the deadline shall be in writing and 
for a time certain. 
‘‘(4) APPROVAL.—The Director shall review each submission 
by an enterprise, including a housing plan submitted under 
this subsection, and, not later than 30 days after submission, 
approve or disapprove the plan or other action. The Director 
may extend the period for approval or disapproval for a single 
additional 30-day period if the Director determines it necessary. 
The Director shall approve any plan that the Director deter-
mines is likely to succeed, and conforms with the Federal 
National Mortgage Association Charter Act or the Federal 
Home Loan Mortgage Corporation Act (as applicable), this title, 
and any other applicable provision of law. 
‘‘(5) NOTICE OF APPROVAL AND DISAPPROVAL.—The Director 
shall provide written notice to any enterprise submitting a 
housing plan of the approval or disapproval of the plan (which 
shall include the reasons for any disapproval of the plan) and 
of any extension of the period for approval or disapproval. 
‘‘(6) RESUBMISSION.—If the initial housing plan submitted 
by an enterprise under this section is disapproved, the enter-
prise shall submit an amended plan acceptable to the Director 
not later than 15 days after such disapproval, or such longer 
period that the Director determines is in the public interest. 
‘‘(7) CEASE AND DESIST ORDERS; CIVIL MONEY PENALTIES.— 
Solely with respect to the housing goals established under 
sections 1332(a) and 1333(a)(1), if the Director requires an 
enterprise to submit a housing plan under this subsection and 
the enterprise refuses to submit such a plan, submits an 
unacceptable plan, or fails to comply with the plan, the Director 
may issue a cease and desist order in accordance with section 
1341, impose civil money penalties in accordance with section 
1345, exercise other appropriate enforcement authority or seek 
other appropriate actions.’’. 
(b) CONFORMING AMENDMENT.—The heading for subpart C of 
part 2 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 is amended to read as follows: 
‘‘Subpart C—Enforcement’’. 
(c) CEASE AND DESIST PROCEEDINGS .— 
(1) REPEAL.—Section 1341 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4581) is hereby repealed. 
(2) CEASE AND DESIST PROCEEDINGS.—The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 is 
amended by inserting before section 1342 the following: 
‘‘SEC. 1341. CEASE AND DESIST PROCEEDINGS. 
‘‘(a) GROUNDS
FOR ISSUANCE.—The Director may issue and 
serve a notice of charges under this section upon an enterprise 
if the Director determines that—
H. R. 3221—56 
‘‘(1) the enterprise has failed to submit a report under 
section 1327, following a notice of such failure, an opportunity 
for comment by the enterprise, and a final determination by 
the Director; 
‘‘(2) the enterprise has failed to submit the information 
required under subsection (m) or (n) of section 309 of the 
Federal National Mortgage Association Charter Act, or sub-
section (e) or (f) of section 307 of the Federal Home Loan 
Mortgage Corporation Act; 
‘‘(3) solely with respect to the housing goals established 
under sections 1332(a) and 1333(a)(1), the enterprise has failed 
to submit a housing plan that complies with section 1336(c) 
within the applicable period; or 
‘‘(4) solely with respect to the housing goals established 
under sections 1332(a) and 1333(a)(1), the enterprise has failed 
to comply with a housing plan under section 1336(c). 
‘‘(b) PROCEDURE.— 
‘‘(1) NOTICE OF CHARGES.—Each notice of charges issued 
under this section shall contain a statement of the facts consti-
tuting the alleged conduct and shall fix a time and place at 
which a hearing will be held to determine on the record whether 
an order to cease and desist from such conduct should issue. 
‘‘(2) ISSUANCE
OF
ORDER.—If the Director finds on the 
record made at a hearing described in paragraph (1) that any 
conduct specified in the notice of charges has been established 
(or the enterprise consents pursuant to section 1342(a)(4)), the 
Director may issue and serve upon the enterprise an order 
requiring the enterprise to— 
‘‘(A) submit a report under section 1327; 
‘‘(B) solely with respect to the housing goals established 
under sections 1332(a) and 1333(a)(1), submit a housing 
plan in compliance with section 1336(c); 
‘‘(C) solely with respect to the housing goals established 
under sections 1332(a) and 1333(a)(1), comply with the 
housing plan in compliance with section 1336(c); or 
‘‘(D) provide the information required under subsection 
(m) or (n) of section 309 of the Federal National Mortgage 
Association Charter Act, or subsection (e) or (f) of section 
307 of the Federal Home Loan Mortgage Corporation Act. 
‘‘(c) EFFECTIVE DATE.—An order under this section shall become 
effective upon the expiration of the 30-day period beginning on 
the date of service of the order upon the enterprise (except in 
the case of an order issued upon consent, which shall become 
effective at the time specified therein), and shall remain effective 
and enforceable as provided in the order, except to the extent 
that the order is stayed, modified, terminated, or set aside by 
action of the Director or otherwise, as provided in this subpart.’’. 
(d) CIVIL MONEY PENALTIES.— 
(1) REPEAL.—Section 1345 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4585) is hereby repealed. 
(2) CIVIL MONEY PENALTIES.—The Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 is amended 
by inserting after section 1344 the following:
H. R. 3221—57 
‘‘SEC. 1345. CIVIL MONEY PENALTIES. 
‘‘(a) AUTHORITY.—The Director may impose a civil money pen-
alty, in accordance with the provisions of this section, on any 
enterprise that has failed to— 
‘‘(1) submit a report under section 1327, following a notice 
of such failure, an opportunity for comment by the enterprise, 
and a final determination by the Director; 
‘‘(2) submit the information required under subsection (m) 
or (n) of section 309 of the Federal National Mortgage Associa-
tion Charter Act or subsection (e) or (f) of section 307 of the 
Federal Home Loan Mortgage Corporation Act; 
‘‘(3) solely with respect to the housing goals established 
under sections 1332(a) and 1333(a)(1), submit a housing plan 
or perform its responsibilities under a remedial order issued 
pursuant to section 1336(c) within the required period; or 
‘‘(4) solely with respect to the housing goals established 
under sections 1332(a) and 1333(a)(1), comply with a housing 
plan for the enterprise under section 1336(c). 
‘‘(b) AMOUNT OF PENALTY.—The amount of a penalty under 
this section, as determined by the Director, may not exceed— 
‘‘(1) for any failure described in paragraph (1), (5), or (6) 
of subsection (a), $100,000 for each day that the failure occurs; 
and 
‘‘(2) for any failure described in paragraph (2), (3), or (4) 
of subsection (a), $50,000 for each day that the failure occurs. 
‘‘(c) PROCEDURES.— 
‘‘(1) ESTABLISHMENT.—The Director shall establish stand-
ards and procedures governing the imposition of civil money 
penalties under this section. Such standards and procedures— 
‘‘(A) shall provide for the Director to notify the enter-
prise in writing of the determination of the Director to 
impose the penalty, which shall be made on the record; 
‘‘(B) shall provide for the imposition of a penalty only 
after the enterprise has been given an opportunity for 
a hearing on the record pursuant to section 1342; and 
‘‘(C) may provide for review by the Director of any 
determination or order, or interlocutory ruling, arising from 
a hearing. 
‘‘(2) FACTORS IN DETERMINING AMOUNT OF PENALTY.—In 
determining the amount of a penalty under this section, the 
Director shall give consideration to factors including— 
‘‘(A) the gravity of the offense; 
‘‘(B) any history of prior offenses; 
‘‘(C) ability to pay the penalty; 
‘‘(D) injury to the public; 
‘‘(E) benefits received; 
‘‘(F) deterrence of future violations; 
‘‘(G) the length of time that the enterprise should 
reasonably take to achieve the goal; and 
‘‘(H) such other factors as the Director may determine, 
by regulation, to be appropriate. 
‘‘(d) ACTION TO COLLECT PENALTY.—If an enterprise fails to 
comply with an order by the Director imposing a civil money penalty 
under this section, after the order is no longer subject to review, 
as provided in sections 1342 and 1343, the Director may bring 
an action in the United States District Court for the District of 
Columbia to obtain a monetary judgment against the enterprise,
H. R. 3221—58 
and such other relief as may be available. The monetary judgment 
may, in the court’s discretion, include the attorneys’ fees and other 
expenses incurred by the United States in connection with the 
action. In an action under this subsection, the validity and appro-
priateness of the order imposing the penalty shall not be subject 
to review. 
‘‘(e) SETTLEMENT BY DIRECTOR.—The Director may compromise, 
modify, or remit any civil money penalty which may be, or has 
been, imposed under this section. 
‘‘(f) DEPOSIT OF PENALTIES.—The Director shall use any civil 
money penalties collected under this section to help fund the 
Housing Trust Fund established under section 1338.’’. 
(e) DIRECTOR AUTHORITY.— 
(1) AUTHORITY TO BRING A CIVIL ACTION.—Section 1344(a) 
of the Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4584) is amended by striking 
‘‘The Secretary may request the Attorney General of the United 
States to bring a civil action’’ and inserting ‘‘The Director 
may bring a civil action’’. 
(2) SUBPOENA ENFORCEMENT.—Section 1348(c) of the Fed-
eral Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4588(c)) is amended by inserting ‘‘may bring 
an action or’’ before ‘‘may request’’. 
(3) CONFORMING AMENDMENTS.—Subpart C of part 2 of 
subtitle A of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended 
by striking ‘‘Secretary’’ each place that term appears and 
inserting ‘‘Director’’ in each of— 
(A) section 1342 (12 U.S.C. 4582); 
(B) section 1343 (12 U.S.C. 4583); 
(C) section 1346 (12 U.S.C. 4586); 
(D) section 1347 (12 U.S.C. 4587); and 
(E) section 1348 (12 U.S.C. 4588). 
SEC. 1131. AFFORDABLE HOUSING PROGRAMS. 
(a) REPEAL.—Section 1337 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) is 
hereby repealed. 
(b) ANNUAL HOUSING REPORT.—The Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 
et seq.) is amended by inserting after section 1336 the following: 
‘‘SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS. 
‘‘(a) SET ASIDE
AND ALLOCATION
OF AMOUNTS
BY ENTER-
PRISES.—Subject to subsection (b), in each fiscal year— 
‘‘(1) the Federal Home Loan Mortgage Corporation shall— 
‘‘(A) set aside an amount equal to 4.2 basis points 
for each dollar of the unpaid principal balance of its total 
new business purchases; and 
‘‘(B) allocate or otherwise transfer— 
‘‘(i) 65 percent of such amounts to the Secretary 
of Housing and Urban Development to fund the 
Housing Trust Fund established under section 1338; 
and 
‘‘(ii) 35 percent of such amounts to fund the Capital 
Magnet Fund established pursuant to section 1339; 
and 
‘‘(2) the Federal National Mortgage Association shall—
H. R. 3221—59 
‘‘(A) set aside an amount equal to 4.2 basis points 
for each dollar of unpaid principal balance of its total 
new business purchases; and 
‘‘(B) allocate or otherwise transfer— 
‘‘(i) 65 percent of such amounts to the Secretary 
of Housing and Urban Development to fund the 
Housing Trust Fund established under section 1338; 
and 
‘‘(ii) 35 percent of such amounts to fund the Capital 
Magnet Fund established pursuant to section 1339. 
‘‘(b) SUSPENSION OF CONTRIBUTIONS.—The Director shall tempo-
rarily suspend allocations under subsection (a) by an enterprise 
upon a finding by the Director that such allocations— 
‘‘(1) are contributing, or would contribute, to the financial 
instability of the enterprise; 
‘‘(2) are causing, or would cause, the enterprise to be classi-
fied as undercapitalized; or 
‘‘(3) are preventing, or would prevent, the enterprise from 
successfully completing a capital restoration plan under section 
1369C. 
‘‘(c) PROHIBITION OF PASS-THROUGH OF COST OF ALLOCATIONS.— 
The Director shall, by regulation, prohibit each enterprise from 
redirecting the costs of any allocation required under this section, 
through increased charges or fees, or decreased premiums, or in 
any other manner, to the originators of mortgages purchased or 
securitized by the enterprise. 
‘‘(d) ENFORCEMENT
OF
REQUIREMENTS
ON
ENTERPRISE.— 
Compliance by the enterprises with the requirements under this 
section shall be enforceable under subpart C. Any reference in 
such subpart to this part or to an order, rule, or regulation under 
this part specifically includes this section and any order, rule, 
or regulation under this section. 
‘‘(e) REQUIRED AMOUNT FOR HOPE RESERVE FUND.—Of the 
aggregate amount allocated under subsection (a), 25 percent shall 
be deposited into a fund established in the Treasury of the United 
States by the Secretary of the Treasury for such purpose. 
‘‘(f) LIMITATION.—No funds under this title may be used in 
conjunction with property taken by eminent domain, unless eminent 
domain is employed only for a public use, except that, for purposes 
of this section, public use shall not be construed to include economic 
development that primarily benefits any private entity. 
‘‘SEC. 1338. HOUSING TRUST FUND. 
‘‘(a) ESTABLISHMENT AND PURPOSE.— 
‘‘(1) IN GENERAL.—The Secretary of Housing and Urban 
Development (in this section referred to as the ‘Secretary’) 
shall establish and manage a Housing Trust Fund, which shall 
be funded with amounts allocated by the enterprises under 
section 1337 and any amounts as are or may be appropriated, 
transferred, or credited to such Housing Trust Fund under 
any other provisions of law. The purpose of the Housing Trust 
Fund under this section is to provide grants to States (as 
such term is defined in section 1303) for use— 
‘‘(A) to increase and preserve the supply of rental 
housing for extremely low- and very low-income families, 
including homeless families; and
H. R. 3221—60 
‘‘(B) to increase homeownership for extremely low- and 
very low-income families. 
‘‘(2) FEDERAL ASSISTANCE.—For purposes of the application 
of Federal civil rights laws, all assistance provided from the 
Housing Trust Fund shall be considered Federal financial 
assistance. 
‘‘(b) ALLOCATIONS FOR HOPE BOND PAYMENTS.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection (c), to help 
address the mortgage crisis, of the amounts allocated pursuant 
to clauses (i) and (ii) of section 1337(a)(1)(B) and clauses (i) 
and (ii) of section 1337(a)(2)(B) in excess of amounts described 
in section 1337(e)— 
‘‘(A) 100 percent of such excess shall be used to 
reimburse the Treasury for payments made pursuant to 
section 257(w)(1)(C) of the National Housing Act in cal-
endar year 2009; 
‘‘(B) 50 percent of such excess shall be used to 
reimburse the Treasury for such payments in calendar 
year 2010; and 
‘‘(C) 25 percent of such excess shall be used to 
reimburse the Treasury for such payments in calendar 
year 2011. 
‘‘(2) EXCESS FUNDS.—At the termination of the HOPE for 
Homeowners Program established under section 257 of the 
National Housing Act, if amounts used to reimburse the 
Treasury under paragraph (1) exceed the total net cost to 
the Government of the HOPE for Homeowners Program, such 
amounts shall be used for their original purpose, as described 
in paragraphs (1)(B) and (2)(B) of section 1337(a). 
‘‘(3) TREASURY FUND.—The amounts referred to in subpara-
graphs (A) through (C) of paragraph (1) shall be deposited 
into a fund established in the Treasury of the United States 
by the Secretary of the Treasury for such purpose. 
‘‘(c) ALLOCATION FOR HOUSING TRUST FUND IN FISCAL YEAR 
2010 AND SUBSEQUENT YEARS.— 
‘‘(1) IN GENERAL.—Except as provided in subsection (b), 
the Secretary shall distribute the amounts allocated for the 
Housing Trust Fund under this section to provide affordable 
housing as described in this subsection. 
‘‘(2) PERMISSIBLE
DESIGNEES.—A State receiving grant 
amounts under this subsection may designate a State housing 
finance agency, housing and community development entity, 
tribally designated housing entity (as such term is defined 
in section 4 of the Native American Housing Assistance and 
Self-Determination Act of 1997 (25 U.S.C. 4103)), or any other 
qualified instrumentality of the State to receive such grant 
amounts. 
‘‘(3) DISTRIBUTION TO STATES BY NEEDS-BASED FORMULA.— 
‘‘(A) IN GENERAL.—The Secretary shall, by regulation, 
establish a formula within 12 months of the date of enact-
ment of the Federal Housing Finance Regulatory Reform 
Act of 2008, to distribute amounts made available under 
this subsection to each State to provide affordable housing 
to extremely low- and very low-income households. 
‘‘(B) BASIS FOR FORMULA.—The formula required under 
subparagraph (A) shall include the following:
H. R. 3221—61 
‘‘(i) The ratio of the shortage of standard rental 
units both affordable and available to extremely low- 
income renter households in the State to the aggregate 
shortage of standard rental units both affordable and 
available to extremely low-income renter households 
in all the States. 
‘‘(ii) The ratio of the shortage of standard rental 
units both affordable and available to very low-income 
renter households in the State to the aggregate short-
age of standard rental units both affordable and avail-
able to very low-income renter households in all the 
States. 
‘‘(iii) The ratio of extremely low-income renter 
households in the State living with either (I) incom-
plete kitchen or plumbing facilities, (II) more than 
1 person per room, or (III) paying more than 50 percent 
of income for housing costs, to the aggregate number 
of extremely low-income renter households living with 
either (IV) incomplete kitchen or plumbing facilities, 
(V) more than 1 person per room, or (VI) paying more 
than 50 percent of income for housing costs in all 
the States. 
‘‘(iv) The ratio of very low-income renter house-
holds in the State paying more than 50 percent of 
income on rent relative to the aggregate number of 
very low-income renter households paying more than 
50 percent of income on rent in all the States. 
‘‘(v) The resulting sum calculated from the factors 
described in clauses (i) through (iv) shall be multiplied 
by the relative cost of construction in the State. For 
purposes of this subclause, the term ‘cost of construc-
tion’— 
‘‘(I) means the cost of construction or building 
rehabilitation in the State relative to the national 
cost of construction or building rehabilitation; and 
‘‘(II) shall be calculated such that values 
higher than 1.0 indicate that the State’s construc-
tion costs are higher than the national average, 
a value of 1.0 indicates that the State’s construc-
tion costs are exactly the same as the national 
average, and values lower than 1.0 indicate that 
the State’s cost of construction are lower than 
the national average. 
‘‘(C) PRIORITY.—The formula required under subpara-
graph (A) shall give priority emphasis and consideration 
to the factor described in subparagraph (B)(i). 
‘‘(4) ALLOCATION OF GRANT AMOUNTS.— 
‘‘(A) NOTICE.—Not later than 60 days after the date 
that the Secretary determines the formula amounts 
described in paragraph (3), the Secretary shall caused to 
be published in the Federal Register a notice that such 
amounts shall be so available. 
‘‘(B) GRANT AMOUNT.—In each fiscal year other than 
fiscal year 2009, the Secretary shall make a grant to each 
State in an amount that is equal to the formula amount 
determined under paragraph (3) for that State.
H. R. 3221—62 
‘‘(C) MINIMUM
STATE
ALLOCATIONS.—If the formula 
amount determined under paragraph (3) for a fiscal year 
would allocate less than $3,000,000 to any of the 50 States 
of the United States or the District of Columbia, the alloca-
tion for such State of the United States or the District 
of Columbia shall be $3,000,000, and the increase shall 
be deducted pro rata from the allocations made to all 
other of the States (as such term is defined in section 
1303). 
‘‘(5) ALLOCATION PLANS REQUIRED.— 
‘‘(A) IN GENERAL.—For each year that a State or State 
designated entity receives a grant under this subsection, 
the State or State designated entity shall establish an 
allocation plan. Such plan shall— 
‘‘(i) set forth a plan for the distribution of grant 
amounts received by the State or State designated 
entity for such year; 
‘‘(ii) be based on priority housing needs, as deter-
mined by the State or State designated entity in accord-
ance with the regulations established under subsection 
(g)(2)(D); 
‘‘(iii) comply with paragraph (6); and 
‘‘(iv) include performance goals that comply with 
the requirements established by the Secretary pursu-
ant to subsection (g)(2). 
‘‘(B) ESTABLISHMENT.—In establishing an allocation 
plan under this paragraph, a State or State designated 
entity shall— 
‘‘(i) notify the public of the establishment of the 
plan; 
‘‘(ii) provide an opportunity for public comments 
regarding the plan; 
‘‘(iii) consider any public comments received 
regarding the plan; and 
‘‘(iv) make the completed plan available to the 
public. 
‘‘(C) CONTENTS.—An allocation plan of a State or State 
designated entity under this paragraph shall set forth the 
requirements for eligible recipients under paragraph (8) 
to apply for such grant amounts, including a requirement 
that each such application include— 
‘‘(i) a description of the eligible activities to be 
conducted using such assistance; and 
‘‘(ii) a certification by the eligible recipient applying 
for such assistance that any housing units assisted 
with such assistance will comply with the requirements 
under this section. 
‘‘(6) SELECTION
OF
ACTIVITIES
FUNDED
USING
HOUSING 
TRUST FUND GRANT AMOUNTS.—Grant amounts received by a 
State or State designated entity under this subsection may 
be used, or committed for use, only for activities that— 
‘‘(A) are eligible under paragraph (7) for such use; 
‘‘(B) comply with the applicable allocation plan of the 
State or State designated entity under paragraph (5); and
H. R. 3221—63 
‘‘(C) are selected for funding by the State or State 
designated entity in accordance with the process and cri-
teria for such selection established pursuant to subsection 
(g)(2)(D). 
‘‘(7) ELIGIBLE ACTIVITIES.—Grant amounts allocated to a 
State or State designated entity under this subsection shall 
be eligible for use, or for commitment for use, only for assistance 
for— 
‘‘(A) the production, preservation, and rehabilitation 
of rental housing, including housing under the programs 
identified in section 1335(a)(2)(B) and for operating costs, 
except that not less than 75 percent of such grant amounts 
shall be used for the benefit only of extremely low-income 
families or families with incomes at or below the poverty 
line (as such term is defined in section 673 of the Omnibus 
Budget Reconciliation Act of 1981 (42 U.S.C. 9902), 
including any revision required by such section) applicable 
to a family of the size involved, and not more than 25 
percent for the benefit only of very low-income families; 
and 
‘‘(B) the production, preservation, and rehabilitation 
of housing for homeownership, including such forms as 
down payment assistance, closing cost assistance, and 
assistance for interest rate buy-downs, that— 
‘‘(i) is available for purchase only for use as a 
principal residence by families that qualify both as— 
‘‘(I) extremely low- and very low-income fami-
lies at the times described in subparagraphs (A) 
through (C) of section 215(b)(2) of the Cranston- 
Gonzalez National Affordable Housing Act (42 
U.S.C. 12745(b)(2)); and 
‘‘(II) first-time homebuyers, as such term is 
defined in section 104 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12704), 
except that any reference in such section to assist-
ance under title II of such Act shall for purposes 
of this subsection be considered to refer to assist-
ance from affordable housing fund grant amounts; 
‘‘(ii) has an initial purchase price that meets the 
requirements of section 215(b)(1) of the Cranston- 
Gonzalez National Affordable Housing Act; 
‘‘(iii) is subject to the same resale restrictions 
established under section 215(b)(3) of the Cranston- 
Gonzalez 
National 
Affordable 
Housing 
Act 
and 
applicable to the participating jurisdiction that is the 
State in which such housing is located; and 
‘‘(iv) is made available for purchase only by, or 
in the case of assistance under this subsection, is made 
available only to homebuyers who have, before pur-
chase completed a program of independent financial 
education and counseling from an eligible organization 
that meets the requirements of section 132 of the Fed-
eral Housing Finance Regulatory Reform Act of 2008. 
‘‘(8) TENANT PROTECTIONS AND PUBLIC PARTICIPATION.—All 
amounts from the Trust Fund shall be allocated in accordance 
with, and any eligible activities carried out in whole or in 
part with grant amounts under this subtitle (including housing
H. R. 3221—64 
provided with such grant amounts) shall comply with and be 
operated in compliance with— 
‘‘(A) laws relating to tenant protections and tenant 
rights to participate in decision making regarding their 
residences; 
‘‘(B) laws requiring public participation, including laws 
relating to Consolidated Plans, Qualified Allocation Plans, 
and Public Housing Agency Plans; and 
‘‘(C) fair housing laws and laws regarding accessibility 
in federally assisted housing, including section 504 of the 
Rehabilitation Act of 1973. 
‘‘(9) ELIGIBLE RECIPIENTS.—Grant amounts allocated to a 
State or State designated entity under this subsection may 
be provided only to a recipient that is an organization, agency, 
or other entity (including a for-profit entity or a nonprofit 
entity) that— 
‘‘(A) has demonstrated experience and capacity to con-
duct an eligible activity under paragraph (7), as evidenced 
by its ability to— 
‘‘(i) own, construct or rehabilitate, manage, and 
operate an affordable multifamily rental housing 
development; 
‘‘(ii) design, construct or rehabilitate, and market 
affordable housing for homeownership; or 
‘‘(iii) provide forms of assistance, such as down 
payments, closing costs, or interest rate buy-downs 
for purchasers; 
‘‘(B) demonstrates the ability and financial capacity 
to undertake, comply, and manage the eligible activity; 
‘‘(C) demonstrates its familiarity with the requirements 
of any other Federal, State, or local housing program that 
will be used in conjunction with such grant amounts to 
ensure compliance with all applicable requirements and 
regulations of such programs; and 
‘‘(D) makes such assurances to the State or State des-
ignated entity as the Secretary shall, by regulation, require 
to ensure that the recipient will comply with the require-
ments of this subsection during the entire period that 
begins upon selection of the recipient to receive such grant 
amounts and ending upon the conclusion of all activities 
under paragraph (8) that are engaged in by the recipient 
and funded with such grant amounts. 
‘‘(10) LIMITATIONS ON USE.— 
‘‘(A) REQUIRED AMOUNT FOR HOMEOWNERSHIP ACTIVI-
TIES.—Of the aggregate amount allocated to a State or 
State designated entity under this subsection not more 
than 10 percent shall be used for activities under subpara-
graph (B) of paragraph (7). 
‘‘(B) DEADLINE
FOR
COMMITMENT
OR
USE.—Grant 
amounts allocated to a State or State designated entity 
under this subsection shall be used or committed for use 
within 2 years of the date that such grant amounts are 
made available to the State or State designated entity. 
The Secretary shall recapture any such amounts not so 
used or committed for use and reallocate such amounts 
under this subsection in the first year after such recapture.
H. R. 3221—65 
‘‘(C) USE OF RETURNS.—The Secretary shall, by regula-
tion, provide that any return on a loan or other investment 
of any grant amount used by a State or State designated 
entity to provide a loan under this subsection shall be 
treated, for purposes of availability to and use by the 
State or State designated entity, as a grant amount author-
ized under this subsection. 
‘‘(D) PROHIBITED USES.—The Secretary shall, by regula-
tion— 
‘‘(i) set forth prohibited uses of grant amounts 
allocated under this subsection, which shall include 
use for— 
‘‘(I) political activities; 
‘‘(II) advocacy; 
‘‘(III) lobbying, whether directly or through 
other parties; 
‘‘(IV) counseling services; 
‘‘(V) travel expenses; and 
‘‘(VI) preparing or providing advice on tax 
returns; 
and for the purposes of this subparagraph, the prohib-
ited use of funds for political activities includes influ-
encing the selection, nomination, election, or appoint-
ment of one or more candidates to any Federal, State 
or local office as codified in section 501 of the Internal 
Revenue Code of 1986 (26 U.S.C. 501); 
‘‘(ii) provide that, except as provided in clause (iii), 
grant amounts of a State or State designated entity 
may not be used for administrative, outreach, or other 
costs of— 
‘‘(I) the State or State designated entity; or 
‘‘(II) any other recipient of such grant 
amounts; and 
‘‘(iii) limit the amount of any grant amounts for 
a year that may be used by the State or State des-
ignated entity for administrative costs of carrying out 
the program required under this subsection, including 
home ownership counseling, to a percentage of such 
grant amounts of the State or State designated entity 
for such year, which may not exceed 10 percent. 
‘‘(E) PROHIBITION
OF
CONSIDERATION
OF
USE
FOR 
MEETING HOUSING GOALS OR DUTY TO SERVE.—In deter-
mining compliance with the housing goals under this sub-
part and the duty to serve underserved markets under 
section 1335, the Director may not consider any grant 
amounts used under this section for eligible activities under 
paragraph (7). The Director shall give credit toward the 
achievement of such housing goals and such duty to serve 
underserved markets to purchases by the enterprises of 
mortgages for housing that receives funding from such 
grant amounts, but only to the extent that such purchases 
by the enterprises are funded other than with such grant 
amounts. 
‘‘(d) REDUCTION FOR FAILURE TO OBTAIN RETURN OF MISUSED 
FUNDS.—If in any year a State or State designated entity fails 
to obtain reimbursement or return of the full amount required
H. R. 3221—66 
under subsection (e)(1)(B) to be reimbursed or returned to the 
State or State designated entity during such year— 
‘‘(1) except as provided in paragraph (2)— 
‘‘(A) the amount of the grant for the State or State 
designated entity for the succeeding year, as determined 
pursuant to this section, shall be reduced by the amount 
by which such amounts required to be reimbursed or 
returned exceed the amount actually reimbursed or 
returned; and 
‘‘(B) the amount of the grant for the succeeding year 
for each other State or State designated entity whose grant 
is not reduced pursuant to subparagraph (A) shall be 
increased by the amount determined by applying the for-
mula established pursuant to this section to the total 
amount of all reductions for all State or State designated 
entities for such year pursuant to subparagraph (A); or 
‘‘(2) in any case in which such failure to obtain reimburse-
ment or return occurs during a year immediately preceding 
a year in which grants under this section will not be made, 
the State or State designated entity shall pay to the Secretary 
for reallocation among the other grantees an amount equal 
to the amount of the reduction for the entity that would other-
wise apply under paragraph (1)(A). 
‘‘(e) ACCOUNTABILITY OF RECIPIENTS AND GRANTEES.— 
‘‘(1) RECIPIENTS.— 
‘‘(A) TRACKING OF FUNDS.—The Secretary shall— 
‘‘(i) require each State or State designated entity 
to develop and maintain a system to ensure that each 
recipient of assistance under this section uses such 
amounts in accordance with this section, the regula-
tions issued under this section, and any requirements 
or conditions under which such amounts were provided; 
and 
‘‘(ii) establish minimum requirements for agree-
ments, between the State or State designated entity 
and recipients, regarding assistance under this section, 
which shall include— 
‘‘(I) appropriate periodic financial and project 
reporting, record retention, and audit require-
ments for the duration of the assistance to the 
recipient to ensure compliance with the limitations 
and requirements of this section and the regula-
tions under this section; and 
‘‘(II) any other requirements that the Secretary 
determines are necessary to ensure appropriate 
administration and compliance. 
‘‘(B) MISUSE OF FUNDS.— 
‘‘(i) 
REIMBURSEMENT
REQUIREMENT.—If 
any 
recipient of assistance under this section is determined, 
in accordance with clause (ii), to have used any such 
amounts in a manner that is materially in violation 
of this section, the regulations issued under this sec-
tion, or any requirements or conditions under which 
such amounts were provided, the State or State des-
ignated entity shall require that, within 12 months 
after the determination of such misuse, the recipient 
shall reimburse the State or State designated entity
H. R. 3221—67 
for such misused amounts and return to the State 
or State designated entity any such amounts that 
remain unused or uncommitted for use. The remedies 
under this clause are in addition to any other remedies 
that may be available under law. 
‘‘(ii) DETERMINATION.—A determination is made in 
accordance with this clause if the determination is 
made by the Secretary or made by the State or State 
designated entity, provided that— 
‘‘(I) the State or State designated entity pro-
vides notification of the determination to the Sec-
retary for review, in the discretion of the Secretary, 
of the determination; and 
‘‘(II) the Secretary does not subsequently 
reverse the determination. 
‘‘(2) GRANTEES.— 
‘‘(A) REPORT.— 
‘‘(i) IN GENERAL.—The Secretary shall require each 
State or State designated entity receiving grant 
amounts in any given year under this section to submit 
a report, for such year, to the Secretary that— 
‘‘(I) describes the activities funded under this 
section during such year with such grant amounts; 
and 
‘‘(II) the manner in which the State or State 
designated entity complied during such year with 
any allocation plan established pursuant to sub-
section (c). 
‘‘(ii) PUBLIC
AVAILABILITY.—The Secretary shall 
make such reports pursuant to this subparagraph pub-
licly available. 
‘‘(B) MISUSE OF FUNDS.—If the Secretary determines, 
after reasonable notice and opportunity for hearing, that 
a State or State designated entity has failed to comply 
substantially with any provision of this section, and until 
the Secretary is satisfied that there is no longer any such 
failure to comply, the Secretary shall— 
‘‘(i) reduce the amount of assistance under this 
section to the State or State designated entity by an 
amount equal to the amount of grant amounts which 
were not used in accordance with this section; 
‘‘(ii) require the State or State designated entity 
to repay the Secretary any amount of the grant which 
was not used in accordance with this section; 
‘‘(iii) limit the availability of assistance under this 
section to the State or State designated entity to activi-
ties or recipients not affected by such failure to comply; 
or 
‘‘(iv) terminate any assistance under this section 
to the State or State designated entity. 
‘‘(f) DEFINITIONS.—For purposes of this section, the following 
definitions shall apply: 
‘‘(1) EXTREMELY
LOW-INCOME
RENTER
HOUSEHOLD.—The 
term ‘extremely low-income renter household’ means a house-
hold whose income is not in excess of 30 percent of the area 
median income, with adjustments for smaller and larger fami-
lies, as determined by the Secretary.
H. R. 3221—68 
‘‘(2) RECIPIENT.—The term ‘recipient’ means an individual 
or entity that receives assistance from a State or State des-
ignated entity from amounts made available to the State or 
State designated entity under this section. 
‘‘(3) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORD-
ABLE
AND
AVAILABLE
TO
EXTREMELY
LOW-INCOME
RENTER 
HOUSEHOLDS.— 
‘‘(A) IN
GENERAL.—The term ‘shortage of standard 
rental units both affordable and available to extremely 
low-income renter households’ means for any State or other 
geographical area the gap between— 
‘‘(i) the number of units with complete plumbing 
and kitchen facilities with a rent that is 30 percent 
or less of 30 percent of the adjusted area median 
income as determined by the Secretary that are occu-
pied by extremely low-income renter households or are 
vacant for rent; and 
‘‘(ii) the number of extremely low-income renter 
households. 
‘‘(B) RULE OF CONSTRUCTION.—If the number of units 
described in subparagraph (A)(i) exceeds the number of 
extremely low-income households as described in subpara-
graph (A)(ii), there is no shortage. 
‘‘(4) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORD-
ABLE
AND
AVAILABLE
TO
VERY
LOW-INCOME
RENTER
HOUSE-
HOLDS.— 
‘‘(A) IN
GENERAL.—The term ‘shortage of standard 
rental units both affordable and available to very low- 
income renter households’ means for any State or other 
geographical area the gap between— 
‘‘(i) the number of units with complete plumbing 
and kitchen facilities with a rent that is 30 percent 
or less of 50 percent of the adjusted area median 
income as determined by the Secretary that are occu-
pied by very low-income renter households or are 
vacant for rent; and 
‘‘(ii) the number of very low-income renter house-
holds. 
‘‘(B) RULE OF CONSTRUCTION.—If the number of units 
described in subparagraph (A)(i) exceeds the number of 
very low-income households as described in subparagraph 
(A)(ii), there is no shortage. 
‘‘(5) VERY LOW-INCOME FAMILY.—The term ‘very low-income 
family’ has the meaning given such term in section 1303, except 
that such term includes any family that resides in a rural 
area that has an income that does not exceed the poverty 
line (as such term is defined in section 673(2) of the Omnibus 
Budget Reconciliation Act of 1981 (42 U.S.C. 9902(2)), including 
any revision required by such section) applicable to a family 
of the size involved. 
‘‘(6) VERY
LOW-INCOME
RENTER
HOUSEHOLDS.—The term 
‘very low-income renter households’ means a household whose 
income is in excess of 30 percent but not greater than 50 
percent of the area median income, with adjustments for 
smaller and larger families, as determined by the Secretary. 
‘‘(g) REGULATIONS.—
H. R. 3221—69 
‘‘(1) IN GENERAL.—The Secretary shall issue regulations 
to carry out this section. 
‘‘(2) REQUIRED CONTENTS.—The regulations issued under 
this subsection shall include— 
‘‘(A) a requirement that the Secretary ensure that the 
use of grant amounts under this section by States or State 
designated entities is audited not less than annually to 
ensure compliance with this section; 
‘‘(B) authority for the Secretary to audit, provide for 
an audit, or otherwise verify a State or State designated 
entity’s activities to ensure compliance with this section; 
‘‘(C) a requirement that, for the purposes of subpara-
graphs (A) and (B), any financial statement submitted by 
a grantee or recipient to the Secretary shall be reviewed 
by an independent certified public accountant in accordance 
with Statements on Standards for Accounting and Review 
Services, issued by the American Institute of Certified 
Public Accountants; 
‘‘(D) requirements for a process for application to, and 
selection by, each State or State designated entity for activi-
ties meeting the State or State designated entity’s priority 
housing needs to be funded with grant amounts under 
this section, which shall provide for priority in funding 
to be based upon— 
‘‘(i) geographic diversity; 
‘‘(ii) ability to obligate amounts and undertake 
activities so funded in a timely manner; 
‘‘(iii) in the case of rental housing projects under 
subsection (c)(7)(A), the extent to which rents for units 
in the project funded are affordable, especially for 
extremely low-income families; 
‘‘(iv) in the case of rental housing projects under 
subsection (c)(7)(A), the extent of the duration for 
which such rents will remain affordable; 
‘‘(v) the extent to which the application makes 
use of other funding sources; and 
‘‘(vi) the merits of an applicant’s proposed eligible 
activity; 
‘‘(E) requirements to ensure that grant amounts pro-
vided to a State or State designated entity under this 
section that are used for rental housing under subsection 
(c)(7)(A) are used only for the benefit of extremely low- 
and very low-income families; and 
‘‘(F) requirements and standards for establishment, by 
a State or State designated entity, for use of grant amounts 
in 2009 and subsequent years of performance goals, bench-
marks, and timetables for the production, preservation, 
and rehabilitation of affordable rental and homeownership 
housing with such grant amounts. 
‘‘(h) AFFORDABLE HOUSING TRUST FUND.—If, after the date 
of enactment of the Federal Housing Finance Regulatory Reform 
Act of 2008, in any year, there is enacted any provision of Federal 
law establishing an affordable housing trust fund other than under 
this title for use only for grants to provide affordable rental housing 
and affordable homeownership opportunities, and the subsequent 
year is a year referred to in subsection (c), the Secretary shall 
in such subsequent year and any remaining years referred to in