(2) in paragraph (7), by striking ‘‘without tak-
ing into account any affordability requirements’’ and 
inserting the following: ‘‘as determined using indus-
try standard appraisal practices, including consider-
ation of the cost of repairs needed for the property 
to comply with minimum safety and building stand-
ards and the cost of maintaining the affordability re-
strictions applicable under the original loan or grant 
for the property’’. 
SEC. 
6. 
MULTIFAMILY 
HOUSING 
MORTGAGE 
FORE-
CLOSURE. 
The Multifamily Mortgage Foreclosure Act of 1981 
is amended— 
(1) in section 362 (12 U.S.C. 3701)— 
(A) in paragraph (5), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (6), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(7) mortgages transferred by the Secretary to 
State and local governments should be foreclosed in 
the same manner as mortgages held by the Sec-
retary.’’; 
(2) in section 363 (12 U.S.C. 3702)— 
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(A) in paragraph (9), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (10), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(11) ‘State or local government transferee’ 
means any state or unit of general local government, 
any public housing authority, or any State or local 
housing finance agency that has acquired mortgages 
pursuant to section 203 of the Housing and Commu-
nity Development Amendments of 1978 (12 U.S.C. 
1701z–11), section 204 of the Departments of Vet-
erans Affairs and Housing and Urban Development, 
and Independent Agencies Appropriations Act, 1997 
(12 U.S.C. 1715z–11a), or any other provision of 
law, that were previously held by the Secretary.’’; 
(3) in section 364 (12 U.S.C. 3703)— 
(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
first and fourth places such term appears; and 
(B) by inserting ‘‘, or the State or local 
government transferee,’’ after ‘‘Secretary’’ the 
second, third, and fifth places such term ap-
pears; 
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(4) in section 365 (12 U.S.C. 3704)— 
(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
first place such term appears; 
(B) by inserting ‘‘, or the State or local 
government transferee,’’ after ‘‘Secretary’’ each 
other place such term appears; and 
(C) by striking the last 3 sentences and in-
serting the following: ‘‘The entity designating 
the foreclosure commissioner, whether the Sec-
retary or any State or local government trans-
feree, shall be a guarantor of payment of any 
judgment against the foreclosure commissioner 
for damages based upon the commissioner’s 
failure to perform properly the commissioner’s 
duties. As between the entity designating the 
foreclosure commissioner, whether the Secretary 
or any State or local government transferee, 
and the mortgagor, the entity designating the 
foreclosure commissioner shall bear the risk of 
any financial default by the foreclosure commis-
sioner. In the event that the Secretary or any 
State or local government transferee makes any 
payment pursuant to the preceding two sen-
tences, the Secretary or any State or local gov-
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ernment transferee shall be fully subrogated to 
the rights satisfied by such payment.’’; 
(5) in section 366 (12 U.S.C. 3705)— 
(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
first, third, fourth, and fifth place such term 
appears; and 
(B) by inserting ‘‘, or the State or local 
government transferee,’’ after ‘‘Secretary’’ the 
second and sixth places such term appears; 
(6) in section 367 (12 U.S.C. 3706)— 
(A) in subsection (a)— 
(i) in paragraph (1), by inserting ‘‘or 
the State or local government transferee,’’ 
after ‘‘Secretary,’’; and 
(ii) in paragraph (8), by inserting ‘‘, 
or the State or local government trans-
feree’’ after ‘‘Secretary’’; 
(B) in subsection (b)— 
(i) by inserting ‘‘, or any State or 
local government transferee,’’ after ‘‘Sec-
retary’’ the first and second places such 
term appears; and 
(ii) by inserting ‘‘, or the State or 
local government transferee,’’ after ‘‘Sec-
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retary’’ the third place such term appears; 
and 
(C) by adding at the end the following new 
subsection: 
‘‘(c) In any case in which a State or local government 
transferee is the purchaser of a multifamily project, the 
State or local government transferee shall manage and dis-
pose of such project to benefit those originally intended 
to be assisted under the prior program unless continued 
operation and disposition of the property under such pro-
gram is not feasible based on consideration of the costs 
of rehabilitating and operating the property after consid-
ering all available Federal, State, and local resources, in-
cluding rent adjustments under section 524 of the Multi-
family Assisted Housing Reform and Affordability Act of 
1997 (42 U.S.C. 1437f note).’’; 
(7) in section 368 (12 U.S.C. 3707)— 
(A) by inserting ‘‘, or any State or local 
government transferee,’’ after ‘‘Secretary’’ the 
first and third places such term appears; and 
(B) by inserting ‘‘, or the State of local 
government transferee,’’ after ‘‘Secretary’’ the 
second place such term appears; 
(8) in section 369A (12 U.S.C. 3709)— 
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