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associated with any other financial or insurance 
activity; or 
‘‘(B) demonstrate to the Secretary that the 
mortgagee or other party maintains, or will 
maintain, firewalls and other safeguards de-
signed to ensure that— 
‘‘(i) individuals participating in the 
origination of the mortgage shall have no 
involvement with, or incentive to provide 
the mortgagor with, any other financial or 
insurance product; and 
‘‘(ii) the mortgagor shall not be re-
quired, directly or indirectly, as a condition 
of obtaining a mortgage under this section, 
to purchase any other financial or insur-
ance product. 
‘‘(2) APPROVAL OF OTHER PARTIES.—All parties 
that participate in the origination of a mortgage to 
be insured under this section shall be approved by the 
Secretary. 
‘‘(o) PROHIBITION AGAINST REQUIREMENTS TO PUR-
CHASE ADDITIONAL PRODUCTS.—The mortgagor or any 
other party shall not be required by the mortgagee or any 
other party to purchase an insurance, annuity, or other 
similar product as a requirement or condition of eligibility
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for insurance under subsection (c), except for title insur-
ance, hazard, flood, or other peril insurance, or other such 
products that are customary and normal under subsection 
(c), as determined by the Secretary. 
‘‘(p) STUDY TO DETERMINE CONSUMER PROTECTIONS 
AND UNDERWRITING STANDARDS.—The Secretary shall 
conduct a study to examine and determine appropriate con-
sumer protections and underwriting standards to ensure 
that the purchase of products referred to in subsection (o) 
is appropriate for the consumer. In conducting such study, 
the Secretary shall consult with consumer advocates (in-
cluding recognized experts in consumer protection), indus-
try representatives, representatives of counseling organiza-
tions, and other interested parties.’’. 
(b) MORTGAGES FOR COOPERATIVES.—Subsection (b) 
of section 255 of the National Housing Act (12 U.S.C. 
1715z–20(b)) is amended— 
(1) in paragraph (4)— 
(A) by inserting ‘‘a first or subordinate 
mortgage or lien’’ before ‘‘on all stock’’; 
(B) by inserting ‘‘unit’’ after ‘‘dwelling’’; 
and 
(C) by inserting ‘‘a first mortgage or first 
lien’’ before ‘‘on a leasehold’’; and
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(2) in paragraph (5), by inserting ‘‘a first or 
subordinate lien on’’ before ‘‘all stock’’. 
(c) LIMITATION ON ORIGINATION FEES.—Section 255 
of the National Housing Act (12 U.S.C. 1715z–20), as 
amended by the preceding provisions of this section, is fur-
ther amended by adding at the end the following new sub-
section: 
‘‘(r) LIMITATION ON ORIGINATION FEES.—The Sec-
retary shall establish limits on the origination fee that may 
be charged to a mortgagor under a mortgage insured under 
this section, which limitations shall— 
‘‘(1) be equal to 2.0 percent of the maximum 
claim amount of the mortgage, up to a maximum 
claim amount of $200,000 plus 1 percent of any por-
tion of the maximum claim amount that is greater 
than $200,000, unless adjusted thereafter on the basis 
of an analysis of— 
‘‘(A) the costs to mortgagors; and 
‘‘(B) the impact on the reverse mortgage 
market; 
‘‘(2) be subject to a minimum allowable amount; 
‘‘(3) provide that the origination fee may be 
fully financed with the mortgage; 
‘‘(4) include any fees paid to correspondent 
mortgagees approved by the Secretary;
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‘‘(5) have the same effective date as subsection 
(m)(2) regarding the limitation on principal obliga-
tion; and 
‘‘(6) be subject to a maximum origination fee of 
$6,000, except that such maximum limit shall be ad-
justed in accordance with the annual percentage in-
crease in the Consumer Price Index of the Bureau of 
Labor Statistics of the Department of Labor in incre-
ments of $500 only when the percentage increase in 
such index, when applied to the maximum origina-
tion fee, produces dollar increases that exceed $500.’’. 
(d) STUDY REGARDING PROGRAM COSTS AND CREDIT 
AVAILABILITY.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study regarding the 
costs and availability of credit under the home equity 
conversion mortgages for elderly homeowners program 
under section 255 of the National Housing Act (12 
U.S.C. 1715z–20) (in this subsection referred to as the 
‘‘program’’). 
(2) PURPOSE.—The purpose of the study re-
quired under paragraph (1) is to help Congress ana-
lyze and determine the effects of limiting the amounts 
of the costs or fees under the program from the
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amounts charged under the program as of the date of 
the enactment of this title. 
(3) CONTENT OF REPORT.—The study required 
under paragraph (1) should focus on— 
(A) the cost to mortgagors of participating 
in the program; 
(B) the financial soundness of the program; 
(C) the availability of credit under the pro-
gram; and 
(D) the costs to elderly homeowners partici-
pating in the program, including— 
(i) 
mortgage 
insurance 
premiums 
charged under the program; 
(ii) up-front fees charged under the 
program; and 
(iii) margin rates charged under the 
program. 
(4) TIMING
OF
REPORT.—Not later than 12 
months after the date of the enactment of this title, 
the Comptroller General shall submit a report to the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Serv-
ices of the House of Representatives setting forth the 
results and conclusions of the study required under 
paragraph (1).
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be established not later than 60 days after the date of 
enactment of this section. 
(3) CRITERIA.—The funding formula required 
under paragraph (1) shall ensure that any amounts 
appropriated or otherwise made available under this 
section are allocated to States and units of general 
local government with the greatest need, as such need 
is determined in the discretion of the Secretary based 
on— 
(A) the number and percentage of home 
foreclosures in each State or unit of general local 
government; 
(B) the number and percentage of homes fi-
nanced by a subprime mortgage related loan in 
each State or unit of general local government; 
and 
(C) the number and percentage of homes in 
default or delinquency in each State or unit of 
general local government. 
(4) DISTRIBUTION.—Amounts appropriated or 
otherwise made available under this section shall be 
distributed according to the funding formula estab-
lished by the Secretary under paragraph (1) not later 
than 30 days after the establishment of such formula. 
(c) USE OF FUNDS.—
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(1) IN GENERAL.—Any State or unit of general 
local government that receives amounts pursuant to 
this section shall, not later than 18 months after the 
receipt of such amounts, use such amounts to pur-
chase and redevelop abandoned and foreclosed homes 
and residential properties. 
(2) PRIORITY.—Any State or unit of general 
local government that receives amounts pursuant to 
this section shall in distributing such amounts give 
priority emphasis and consideration to those metro-
politan areas, metropolitan cities, urban areas, rural 
areas, low- and moderate-income areas, and other 
areas with the greatest need, including those— 
(A) with the greatest percentage of home 
foreclosures; 
(B) with the highest percentage of homes fi-
nanced by a subprime mortgage related loan; 
and 
(C) identified by the State or unit of gen-
eral local government as likely to face a signifi-
cant rise in the rate of home foreclosures. 
(3) ELIGIBLE USES.—Amounts made available 
under this section may be used to— 
(A) establish financing mechanisms for pur-
chase and redevelopment of foreclosed upon
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homes and residential properties, including such 
mechanisms as soft-seconds, loan loss reserves, 
and shared-equity loans for low- and moderate- 
income homebuyers; 
(B) purchase and rehabilitate homes and 
residential properties that have been abandoned 
or foreclosed upon, in order to sell, rent, or rede-
velop such homes and properties; 
(C) establish land banks for homes that have 
been foreclosed upon; 
(D) demolish blighted structures; and 
(E) redevelop demolished or vacant prop-
erties. 
(d) LIMITATIONS.— 
(1) ON PURCHASES.—Any purchase of a fore-
closed upon home or residential property under this 
section shall be at a discount from the current market 
appraised value of the home or property, taking into 
account its current condition, and such discount shall 
ensure that purchasers are paying below-market value 
for the home or property. 
(2) REHABILITATION.—Any rehabilitation of a 
foreclosed-upon home or residential property under 
this section shall be to the extent necessary to comply 
with applicable laws, codes, and other requirements
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relating to housing safety, quality, and habitability, 
in order to sell, rent, or redevelop such homes and 
properties. Rehabilitation may include improvements 
to increase the energy efficiency or conservation of 
such homes and properties or provide a renewable en-
ergy source or sources for such homes and properties. 
(3) SALE OF HOMES.—If an abandoned or fore-
closed upon home or residential property is pur-
chased, redeveloped, or otherwise sold to an individual 
as a primary residence, then such sale shall be in an 
amount equal to or less than the cost to acquire and 
redevelop or rehabilitate such home or property up to 
a decent, safe, and habitable condition. 
(4) REINVESTMENT OF PROFITS.— 
(A) PROFITS FROM SALES, RENTALS, AND 
REDEVELOPMENT.— 
(i) 5-YEAR REINVESTMENT PERIOD.— 
During the 5-year period following the date 
of enactment of this Act, any revenue gen-
erated from the sale, rental, redevelopment, 
rehabilitation, or any other eligible use that 
is in excess of the cost to acquire and rede-
velop (including reasonable development 
fees) or rehabilitate an abandoned or fore-
closed upon home or residential property
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shall be provided to and used by the State 
or unit of general local government in ac-
cordance with, and in furtherance of, the 
intent and provisions of this section. 
(ii) DEPOSITS IN THE TREASURY.— 
(I) PROFITS.—Upon the expira-
tion of the 5-year period set forth 
under clause (i), any revenue generated 
from the sale, rental, redevelopment, 
rehabilitation, or any other eligible use 
that is in excess of the cost to acquire 
and redevelop (including reasonable 
development fees) or rehabilitate an 
abandoned or foreclosed upon home or 
residential property shall be deposited 
in the Treasury of the United States as 
miscellaneous receipts, unless the Sec-
retary approves a request to use the 
funds for purposes under this Act. 
(II) OTHER AMOUNTS.—Upon the 
expiration of the 5-year period set 
forth under clause (i), any other rev-
enue not described under subclause (I) 
generated from the sale, rental, redevel-
opment, rehabilitation, or any other el-
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igible use of an abandoned or foreclosed 
upon home or residential property 
shall be deposited in the Treasury of 
the United States as miscellaneous re-
ceipts. 
(B) OTHER REVENUES.—Any revenue gen-
erated under subparagraphs (A), (C) or (D) of 
subsection (c)(3) shall be provided to and used by 
the State or unit of general local government in 
accordance with, and in furtherance of, the in-
tent and provisions of this section. 
(e) RULES OF CONSTRUCTION.— 
(1) IN GENERAL.—Except as otherwise provided 
by this section, amounts appropriated, revenues gen-
erated, or amounts otherwise made available to States 
and units of general local government under this sec-
tion shall be treated as though such funds were com-
munity development block grant funds under title I of 
the Housing and Community Development Act of 
1974 (42 U.S.C. 5301 et seq.). 
(2) NO MATCH.—No matching funds shall be re-
quired in order for a State or unit of general local 
government to receive any amounts under this section. 
(f) AUTHORITY TO SPECIFY ALTERNATIVE REQUIRE-
MENTS.—