I 
111TH CONGRESS 
2D SESSION 
H. R. 6256 
To establish a shared equity homeownership pilot program for FHA mortgage 
insurance. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2010 
Mr. GARY G. MILLER of California introduced the following bill; which was 
referred to the Committee on Financial Services 
A BILL 
To establish a shared equity homeownership pilot program 
for FHA mortgage insurance. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Strengthening FHA 
Through Shared Equity Homeownership Act of 2010’’. 
SEC. 2. SHARED EQUITY PILOT PROGRAM. 
(a) PURPOSE.—The purpose of this section is to es-
tablish a shared equity homeownership pilot program for 
FHA mortgage insurance to complement FHA mortgage 
lending activity to analyze the effectiveness of shared eq-
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uity finance methods that stimulate the flow of private eq-
uity capital into the housing sector, while mitigating risk 
to borrowers and to the Mutual Mortgage Insurance 
Fund. 
(b) ESTABLISHMENT.—The Secretary of Housing 
and Urban Development (in this section referred to as the 
‘‘Secretary’’) shall carry out a pilot program under this 
section (in this section referred to as the ‘‘pilot program)’’ 
to analyze the effectiveness of providing mortgage insur-
ance under the FHA mortgage insurance program for 
mortgages for the acquisition or refinancing of 1- to 4- 
family residences that are financed in part through a 
shared equity arrangement under which independent, pri-
vate sector investors invest, together with the mortgagors, 
equity funds for such residences and thereby share in the 
ownership of such residences. 
(c) APPLICATION AND SELECTION.— 
(1) ELIGIBILITY AND APPLICATION.—The Sec-
retary shall establish eligibility requirements for fi-
nancial institutions, nonprofit organizations, housing 
associations, investment pools, and other appropriate 
individuals and entities to participate in the pilot 
program and shall provide for eligible entities to 
apply to the Secretary for such participation. Such 
applications shall include such information as the 
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Secretary considers appropriate regarding the mat-
ters referred to in subparagraphs (A) through (D) of 
paragraph (2). 
(2) SELECTION.—Not later than 270 days after 
the date of the enactment of this Act, the Secretary 
shall select not more than 8 individuals and entities 
to participate in the pilot program, from among eli-
gible individuals and entities applying for such par-
ticipation, using criteria established by the Sec-
retary, which shall include criteria based on— 
(A) the methodology to be used for deploy-
ing equity sharing capital, which shall ensure 
that equity sharing capital shall be deployed 
from private sector sources; 
(B) a definition of markets to be targeted; 
(C) legal agreements and disclosures nec-
essary to protect mortgagors and all other in-
volved parties and to provide for periodic pro-
gram monitoring; and 
(D) the source and level of revenue ex-
pected to be derived from participating in the 
pilot program. 
(d) PRINCIPAL RESIDENCE.—A residence acquired 
with a mortgage that is insured by the Secretary under 
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the pilot program shall be occupied by the mortgagor as 
the primary residence of the mortgagor. 
(e) DOWNPAYMENT.—The mortgagor under a mort-
gage insured by the Secretary under the pilot program 
shall comply with the requirement under section 203(b)(9) 
of the National Housing Act (12 U.S.C. 1709(b)(9)) that 
the mortgagor invest the amount required by the Sec-
retary, which shall be not less than 3.5 percent of the ap-
praised value of the residence. 
(f) MINIMUM HOMEBUYER EQUITY.—The mortgagor 
under the mortgage insured by the Secretary under the 
pilot program shall retain a percentage of ownership in 
the residence under the shared equity arrangement that 
is not less than 60 percent. 
(g) INSURANCE PREMIUMS.—Notwithstanding sec-
tion 203(c)(2)(B) of the National Housing Act (12 U.S.C. 
1709(c)(2)(B)), the Secretary shall establish and collect 
annual premium payments on mortgages insured by the 
Secretary under the pilot program in an amount based on 
the annual premium charged under such section 
203(c)(2)(B), as adjusted by the Secretary to account for 
any reduced risk in insuring such mortgages attributable 
to the shared equity arrangement. 
(h) RIGHTS OF MORTGAGOR.—The Secretary shall 
establish requirements to ensure the mortgagor maintains 
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is appropriate to carry out the pilot program under this 
section. 
(k) MONITORING AND REPORTING.— 
(1) MONITORING.—The Secretary shall provide 
for such monitoring of the pilot program, investors 
participating in the pilot program, and shared equity 
arrangements entered into under the pilot program 
as may be necessary to determine the effectiveness 
of the pilot program and of the structure of, and re-
quirements under, the pilot program. 
(2) REPORTS TO CONGRESS.—Not later than 
the expiration of the 18-month period beginning on 
the date of the enactment of this Act, the Comp-
troller General of the United States shall submit a 
report to the Congress analyzing effectiveness of the 
pilot program and making recommendations regard-
ing expansion of the pilot program and improve-
ments for the pilot program. 
Æ 
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