Sec. 1. Short title; table of contents. 
TITLE I—MAKING HOUSING MORE AFFORDABLE 
Sec. 101. Local housing innovation grants. 
Sec. 102. Investing in affordable housing infrastructure. 
Sec. 103. Conditions for the sale of real estate-owned properties and non-per-
forming loans. 
TITLE II—TAKING THE FIRST STEPS TO REVERSE THE LEGACY 
OF HOUSING DISCRIMINATION AND GOVERNMENT NEGLIGENCE 
Sec. 201. Down payment assistance program for first-time homebuyers. 
Sec. 202. Formula grant program for communities with an appraisal gap. 
Sec. 203. Strengthening the Community Reinvestment Act of 1977. 
Sec. 204. Amendments relating to credit union service to underserved areas. 
Sec. 205. Raising public welfare caps. 
Sec. 206. Temporary eligibility of certain direct descendants of certain veterans 
for housing loans guaranteed by the Secretary of Veterans Af-
fairs. 
TITLE III—REMOVING BARRIERS THAT ISOLATE COMMUNITIES 
Sec. 301. Expanding rights under the Fair Housing Act. 
Sec. 302. Improving outcomes in housing assistance programs. 
TITLE IV—ESTATE TAX REFORM 
Sec. 401. Amendment to Internal Revenue Code of 1986. 
Sec. 402. Rate adjustment. 
Sec. 403. Required minimum 10-year term, etc., for grantor retained annuity 
trusts. 
Sec. 404. Certain transfer tax rules applicable to grantor trusts. 
Sec. 405. Elimination of generation-skipping transfer tax exemption for trans-
fers to certain persons. 
Sec. 406. Simplifying gift tax exclusion for annual gifts. 
Sec. 407. Clarification regarding disallowance of step-up in basis for property 
held in certain grantor trusts. 
Sec. 408. Limitation on discounts; valuation rules for certain transfers of non-
business assets. 
Sec. 409. Surcharge on high income estates and trusts. 
Sec. 410. Modification of rules for value of certain farm, etc., real property. 
Sec. 411. Modification of estate tax rules with respect to land subject to con-
servation easements. 
TITLE V—ACCESSIBILITY REQUIREMENTS 
Sec. 501. Accessibility requirements. 
TITLE I—MAKING HOUSING 
MORE AFFORDABLE 
SEC. 101. LOCAL HOUSING INNOVATION GRANTS. 
(a) DEFINITIONS.—In this section: 
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(1) 
ELEMENTARY
SCHOOL; 
SECONDARY 
SCHOOL.—The terms ‘‘elementary school’’ and ‘‘sec-
ondary school’’ have the meanings given those terms 
in section 8101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7801). 
(2) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means— 
(A) a State; 
(B) a unit of general local government; or 
(C) an Indian tribe. 
(3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given the term in section 4 of the 
Native American Housing Assistance and Self-De-
termination Act of 1996 (25 U.S.C. 4103). 
(4) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given the term in section 101 of the Higher 
Education Act of 1965 (20 U.S.C. 1001). 
(5) METROPOLITAN
AREA; STATE; UNIT
OF 
GENERAL LOCAL GOVERNMENT.—The terms ‘‘metro-
politan area’’, ‘‘State’’, and ‘‘unit of general local 
government’’ have the meanings given those terms in 
section 102 of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5302). 
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(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(b) ESTABLISHMENT.—Not later than 1 year after 
the date of enactment of this Act, the Secretary shall es-
tablish a program to award grants on a competitive basis 
to eligible entities to— 
(1) reform local land use restrictions to bring 
down the costs of producing affordable housing; and 
(2) remove unnecessary barriers to building af-
fordable units in their communities. 
(c) ELIGIBLE ACTIVITIES.—An eligible entity receiv-
ing a grant under this section may use funds to— 
(1) carry out any of the activities described in 
section 105 of the Housing and Community Devel-
opment Act of 1974 (42 U.S.C. 5305); 
(2) carry out any of the activities permitted 
under the Local and Regional Project Assistance 
Program under section 6702 of title 49, United 
States Code; or 
(3) modernize, renovate, or repair facilities used 
by public elementary schools, public secondary 
schools, and public institutions of higher education, 
including modernization, renovation, and repairs 
that— 
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(A) promote physical, sensory, and envi-
ronmental accessibility; and 
(B) are consistent with a recognized green 
building rating system. 
(d) APPLICATION.— 
(1) IN GENERAL.—An eligible entity desiring a 
grant under this section shall submit to the Sec-
retary an application that demonstrates that the eli-
gible entity has carried out, or is in the process of 
carrying out, initiatives that facilitate the expansion 
of the supply of well-located affordable housing. 
(2) ACTIVITIES.—Initiatives that meet the cri-
teria described in paragraph (1)— 
(A) include— 
(i) establishing ‘‘by-right’’ develop-
ment, which allows jurisdictions to admin-
istratively approve new developments that 
are consistent with their zoning code; 
(ii) revising or eliminating off-street 
parking requirements to reduce the cost of 
housing production; 
(iii) 
instituting 
measures 
that 
incentivize owners of vacant land to rede-
velop the space into affordable housing or 
other productive uses; 
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(iv) revising minimum lot size require-
ments and bans or limits on multifamily 
construction to allow for denser and more 
affordable development; 
(v) instituting incentives to promote 
dense development, such as density bo-
nuses; 
(vi) passing inclusionary zoning ordi-
nances that require a portion of newly de-
veloped units to be reserved for low- and 
moderate-income renters or homebuyers; 
(vii) streamlining regulatory require-
ments and shortening processes, reforming 
zoning codes, or other initiatives that re-
duce barriers to housing supply elasticity 
and affordability; 
(viii) 
allowing 
accessory 
dwelling 
units; 
(ix) using local tax incentives to pro-
mote development of affordable housing; 
and 
(x) implementing measures that pro-
tect tenants from harassment and displace-
ment, including— 
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(I) providing access to counsel 
for tenants facing eviction; 
(II) the prohibition of eviction ex-
cept for just cause; 
(III) measures intended to pre-
vent or mitigate sudden increases in 
rents; 
(IV) the repeal of laws that pre-
vent localities from implementing a 
measure described in subclause (I), 
(II), or (III); 
(V) protections against construc-
tive eviction; 
(VI) 
tenant 
right-to-organize 
laws; 
(VII) a cause of action for ten-
ants to sue landlords who threaten or 
begin an illegal eviction; and 
(VIII) landlord-tenant mediation 
or other non-eviction diversion pro-
grams; and 
(B) do not include activities that alter or-
dinances that govern wage and hour laws, fam-
ily and medical leave laws, health and safety re-
quirements, prevailing wage laws, or protections 
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for workers’ health and safety, anti-discrimina-
tion, and right to organize. 
(3) RELATION TO CONSOLIDATED PLAN.—An 
eligible entity shall include in an application sub-
mitted under paragraph (1) a description of how the 
planning and development of eligible activities de-
scribed in subsection (c) may advance an objective, 
or an aspect of an objective, included in the com-
prehensive housing affordability strategy and com-
munity development plan of the eligible entity under 
part 91 of title 24, Code of Federal Regulations, or 
any successor regulation (commonly referred to as a 
‘‘consolidated plan’’). 
(e) LABOR LAWS.— 
(1) IN GENERAL.—All laborers and mechanics 
employed by contractors or subcontractors in the 
performance of construction work financed in whole 
or in part with a grant received under this section 
shall be paid wages at rates not less than those pre-
vailing on similar construction in the locality, as de-
termined by the Secretary of Labor in accordance 
with subchapter IV of chapter 31 of title 40, United 
States Code (commonly known as the ‘‘Davis-Bacon 
Act’’). 
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(2) AUTHORITY
AND
FUNCTIONS.—With re-
spect to the labor standards specified in paragraph 
(1), the Secretary of Labor shall have the authority 
and functions set forth in Reorganization Plan 
Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. 
App.) and section 3145 of title 40, United States 
Code. 
(f) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$2,000,000,000 for each of fiscal years 2025 through 
2029. 
SEC. 102. INVESTING IN AFFORDABLE HOUSING INFRA-
STRUCTURE. 
(a) HOUSING TRUST FUND.—Section 1338(a) of the 
Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4568(a)) is amended by add-
ing at the end the following: 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to the Hous-
ing Trust Fund $44,500,000,000 for each of fiscal 
years 2025 through 2034.’’. 
(b) CAPITAL MAGNET FUND.—Section 1339 of the 
Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4569) is amended by adding 
at the end the following: 
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‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to the Capital Magnet 
Fund $2,500,000,000 for each of fiscal years 2025 
through 2034.’’. 
(c) PUBLIC
HOUSING
CAPITAL
FUND.—Section 
9(c)(2)(A) of the United States Housing Act of 1937 (42 
U.S.C. 1437g(c)(2)(A)) is amended to read as follows: 
‘‘(A) CAPITAL FUND.—For allocations of 
assistance 
from 
the 
Capital 
Fund, 
$70,000,000,000 for fiscal year 2025.’’. 
(d) INDIAN HOUSING BLOCK GRANT PROGRAM.— 
Section 108 of the Native American Housing Assistance 
and Self-Determination Act of 1996 (25 U.S.C. 4117) is 
amended— 
(1) by striking ‘‘such sums as may be necessary 
for each of fiscal years 2009 through 2013’’ and in-
serting ‘‘$2,500,000,000 for fiscal year 2025 and 
such sums as may be necessary for each of fiscal 
years 2026 through 2034’’; and 
(2) by striking the second sentence. 
(e) NATIVE HAWAIIAN HOUSING BLOCK GRANT PRO-
GRAM.—Section 824 of the Native American Housing As-
sistance and Self-Determination Act of 1996 (25 U.S.C. 
4243) is amended by striking ‘‘such sums as may be nec-
essary for each of fiscal years 2001, 2002, 2003, 2004, 
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and 2005’’ and inserting ‘‘$50,000,000 for fiscal year 
2025 and such sums as may be necessary for each of fiscal 
years 2026 through 2034’’. 
(f) RURAL HOUSING PROGRAMS.—Out of funds in 
the Treasury not otherwise appropriated, there is appro-
priated for fiscal year 2025— 
(1) to provide direct loans under section 502 of 
the Housing Act of 1949 (42 U.S.C. 1472), 
$420,000,000; 
(2) to provide assistance under section 514 of 
such Act (42 U.S.C. 1484), $54,000,000; 
(3) to provide assistance under section 515 of 
such Act (42 U.S.C. 1485), $420,000,000; 
(4) to provide assistance under section 516 of 
such Act (42 U.S.C. 1486), $75,000,000; 
(5) to provide grants under section 523 of such 
Act (42 U.S.C. 1490c), $75,000,000; and 
(6) to provide funding to carry out the Multi-
family Preservation and Revitalization Demonstra-
tion Program of the Rural Housing Service (as au-
thorized under sections 514, 515, and 516 of such 
Act (42 U.S.C. 1484, 1485, 1486)), $240,000,000. 
(g) MIDDLE CLASS HOUSING EMERGENCY FUND.— 
(1) DEFINITIONS.—In this subsection— 
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(A) the term ‘‘affordable rental housing 
unit’’ means a unit for which monthly rent is 
30 percent or less than the monthly area me-
dian income; and 
(B) the term ‘‘State’’ has the meaning 
given the term in section 3(b)(7) of the United 
States Housing Act of 1937 (42 U.S.C. 
1437a(b)(7)). 
(2) ESTABLISHMENT.—The Secretary of Hous-
ing and Urban Development shall establish and 
manage a fund, to be known as the ‘‘Middle Class 
Housing Emergency Fund’’, which shall be funded 
with any amounts as may be appropriated, trans-
ferred, or credited to the Fund under any provision 
law. 
(3) GRANTS.—From amounts available in the 
fund established under paragraph (2), the Secretary 
of Housing and Urban Development shall award 
grants on a competitive basis to State housing fi-
nance agencies located in a State in which— 
(A) there is a shortage of affordable rental 
housing units available to individuals with an 
income that is at or below the area median in-
come and median rents have risen on average 
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over the preceding 5 years substantially faster 
than the area median income; or 
(B) there is a shortage of housing units 
available for sale that are affordable to individ-
uals with an income that is at or below the area 
median income and median home prices have 
risen on average over the preceding 5 years 
substantially faster than the area median in-
come. 
(4) USE
OF
FUNDS.—Grants received under 
this subsection shall be used to fund— 
(A) the construction or acquisition, by non-
profit organizations, State or local agencies, 
special-purpose units of local government, resi-
dent councils organized to acquire housing, and 
other qualified purchasers (as defined by the 
Secretary), of rental housing units or units for 
purchase that are affordable to residents mak-
ing less than 120 percent of the area median 
income; and 
(B) measures to prevent tenant displace-
ment and harassment, including— 
(i) the provision of legal advice and 
representation for tenants facing eviction; 
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(ii) enforcement of anti-harassment 
laws; 
(iii) emergency rental assistance; and 
(iv) other measures as specified by the 
Secretary of Housing and Urban Develop-
ment. 
(5) LABOR LAWS.— 
(A) IN GENERAL.—All laborers and me-
chanics employed by contractors or subcontrac-
tors in the performance of construction work fi-
nanced in whole or in part with a grant received 
under this subsection shall be paid wages at 
rates not less than those prevailing on similar 
construction in the locality as determined by 
the Secretary of Labor in accordance with sub-
chapter IV of chapter 31 of title 40, United 
States Code (commonly known as the ‘‘Davis- 
Bacon Act’’). 
(B) AUTHORITY
AND
FUNCTIONS.—With 
respect to the labor standards specified in sub-
paragraph (A), the Secretary of Labor shall 
have the authority and functions set forth in 
Reorganization Plan Numbered 14 of 1950 (64 
Stat. 1267; 5 U.S.C. App.) and section 3145 of 
title 40, United States Code. 
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(6) REGULATIONS.—The Secretary of Housing 
and Urban Development shall promulgate regula-
tions to carry out this subsection that include— 
(A) the metrics that the Secretary will use 
to determine eligibility for a grant under this 
subsection; 
(B) a requirement that grantees and sub-
grantees consult with impacted communities in 
policymaking and planning for the construction 
or acquisition of housing units as described in 
paragraph 4(A); and 
(C) a requirement that all housing units 
constructed or acquired using grants awarded 
under the subsection are affordable to residents 
making less than 120 percent of the area me-
dian income in perpetuity. 
(7) APPROPRIATIONS.—Out of funds in the 
Treasury not otherwise appropriated, there is appro-
priated to the fund established under this subsection 
$4,000,000,000 for fiscal year 2025. 
SEC. 103. CONDITIONS FOR THE SALE OF REAL ESTATE- 
OWNED PROPERTIES AND NON-PERFORMING 
LOANS. 
(a) FINDINGS.—Congress finds that— 
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(1) the Federal Housing Administration, the 
Federal National Mortgage Association, and the 
Federal Home Loan Mortgage Corporation provide 
critical homeownership opportunities that greatly 
benefit individuals, families, and communities; and 
(2) it is the purpose of this section to— 
(A) preserve owner-occupied homes with 
mortgages insured by the Federal Housing Ad-
ministration or purchased by the Federal Na-
tional Mortgage Association or the Federal 
Home Loan Mortgage Corporation for contin-
ued use as owner-occupied homes; and 
(B) direct that, upon the sale of those 
properties or transfer of those mortgages, cer-
tain percentages of those properties are sold to 
low- and moderate-income homeowners. 
(b) LOANS INSURED BY THE FEDERAL HOUSING AD-
MINISTRATION.—Title II of the National Housing Act (12 
U.S.C. 1707 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 259. SALE OF REAL ESTATE-OWNED PROPERTIES. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘Claim Without Conveyance of 
Title program’ means the program of the Federal 
Housing Administration carried out under section 
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203.368 of title 24, Code of Federal Regulations, or 
any successor regulation; and 
‘‘(2) the term ‘community partner’ has the 
meaning given the term ‘nonprofit organization’ in 
section 229 of the Low-Income Housing Preserva-
tion and Resident Homeownership Act of 1990 (12 
U.S.C. 4119). 
‘‘(b) REQUIREMENT.—Not later than 1 year after the 
date of enactment of this section, the Secretary shall de-
velop programs within the Federal Housing Administra-
tion to ensure that not less than 75 percent of the single- 
family residential properties conveyed to the Federal 
Housing Administration after foreclosure or conveyed to 
third parties under the Claim Without Conveyance of Title 
program are sold— 
‘‘(1) directly to an owner-occupant; or 
‘‘(2) to community partners that will— 
‘‘(A) rehabilitate or develop the property; 
and 
‘‘(B) sell the property to an owner-occu-
pant. 
‘‘(c) GUIDELINES.—Not later than 1 year after the 
date of enactment of this section, the Secretary shall de-
velop guidelines for the Claim Without Conveyance of Title 
program that provide an exclusive listing period during 
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which only eligible Governmental Entities, HUD-approved 
Nonprofit Organizations, and Owner-Occupant Buyers 
may submit bids. 
‘‘(d) ANTI-PREDATORY FEATURE.—Unless the Sec-
retary provides prior approval, the Secretary shall prohibit 
any purchaser of a real estate-owned property of the Fed-
eral Housing Administration from reselling the property 
within 15 years of purchase using a land installment con-
tract or through any other mechanism that does not trans-
fer title to the buyer at the time of sale. 
‘‘SEC. 260. SALE OF NON-PERFORMING LOANS. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘community partner’ has the 
meaning given the term in section 259; and 
‘‘(2) the term ‘covered mortgage’— 
‘‘(A) means any mortgage insured under 
this title that is secured by a single-family resi-
dential property; and 
‘‘(B) includes the promissory note secured 
by the mortgage described in subparagraph (A). 
‘‘(b) RESTRICTION ON SALE OR TRANSFER.—Except 
as provided in this section, the Secretary may not sell or 
transfer any covered mortgage. 
‘‘(c) CONDITIONS FOR SALE OR TRANSFER.— 
‘‘(1) IN GENERAL.—The Secretary— 
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‘‘(A) may sell or transfer a covered mort-
gage only if— 
‘‘(i) the capital level of the Fund is 
substantially below the capital ratio re-
quired under section 205(f)(2); 
‘‘(ii) the Secretary certifies that other 
reasonable measures are not available to 
restore the Fund to that capital ratio; and 
‘‘(iii) the Secretary complies with 
paragraph (2)(C), if applicable; and 
‘‘(B) may sell or transfer only such covered 
mortgages as are necessary to assist in restora-
tion of that capital ratio. 
‘‘(2) REQUIREMENTS FOR THE SECRETARY.— 
‘‘(A) IN GENERAL.—If the Secretary in-
tends to sell or transfer a covered mortgage, the 
Secretary shall provide the current borrower 
and all owners of record of the property secur-
ing the covered mortgage, or require that the 
current borrower and owners of record be pro-
vided, a separate written notice of the intent to 
sell the covered mortgage that— 
‘‘(i) is mailed via certified and first 
class mail not less than 90 days before the 
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date on which the loan is included in any 
proposed sale; and 
‘‘(ii) includes— 
‘‘(I) a description of the loss 
mitigation options of the Federal 
Housing 
Administration 
that 
are 
available to borrowers in financial dis-
tress and the obligation of servicers to 
consider borrowers in default for those 
options; 
‘‘(II) a description of the actions 
that the servicer of the loan has taken 
to review and implement those options 
for the borrower; and 
‘‘(III) a description of the proce-
dures the borrower may use to contest 
with the Secretary the compliance by 
the servicer with that obligation. 
‘‘(B) JUDICIAL REVIEW.—The determina-
tion of the Secretary to authorize the sale of a 
mortgage insured under this title shall be re-
viewable under chapter 7 of title 5, United 
States Code, for abuse of discretion and arbi-
trary and capricious agency action. 
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‘‘(C) AUCTIONS.—The Secretary may not 
sell any covered mortgage through any type of 
non-performing loan sale auction program until 
the Secretary issues rules, through the notice 
and comment rule making procedures under 
section 553 of title 5, United States Code, that 
address essential aspects of any non-performing 
loan sale program, including— 
‘‘(i) the method of selection of loans 
for sale; 
‘‘(ii) notice to borrowers prior to in-
clusion of the loan in a sale; and 
‘‘(iii) review of loss mitigation status 
prior to the sale, selection of eligible bid-
ders, loss mitigation guidelines applicable 
to loan purchasers, and reporting require-
ments for purchasers. 
‘‘(3) CERTIFICATION REQUIREMENT FOR LEND-
ERS AND SERVICERS.— 
‘‘(A) CERTIFICATION.—As a condition to 
payment of an insurance claim under this title 
in connection with any non-performing loan 
sale, the lender or servicer of the loan shall pro-
vide the Secretary and the borrower with writ-
ten certification of the loss mitigation review 
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contained in the FHA Single Family Housing 
Policy Handbook 4000.1, or any successor 
handbook, which certification shall include a de-
scription of the actions the lender or servicer 
has taken, prior to transfer of the loan to the 
Secretary, to— 
‘‘(i) review the borrower for all avail-
able loss mitigation options of the Federal 
Housing Administration; and 
‘‘(ii) implement the options described 
in clause (i) that are appropriate to the 
borrower. 
‘‘(B) FALSE STATEMENTS.— 
‘‘(i) IN
GENERAL.—Any false state-
ment provided in a certification described 
in subparagraph (A) shall be a basis for— 
‘‘(I) recovery by the Secretary of 
any amounts paid under the insurance 
claim and any other penalties and 
sanctions authorized under Federal 
law; and 
‘‘(II) a private right of action by 
the borrower against the lender and 
servicer, with remedies to include 
compensatory and punitive damages 
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and an assessment of costs and attor-
ney’s fees. 
‘‘(ii) TRANSFERS.—Unless a bona fide 
purchaser has acquired title to the prop-
erty as a primary residence— 
‘‘(I) a certification described in 
subparagraph (A) that contains a 
false statement shall be a basis for re-
voking the transfer of the property; 
and 
‘‘(II) the pre-sale lender and 
servicer of the property shall— 
‘‘(aa) resume servicing the 
loan as a loan insured under this 
title; and 
‘‘(bb) reimburse the Sec-
retary for any insurance claim 
paid and all costs related to the 
sale of the property. 
‘‘(4) REQUIREMENTS FOR PURCHASERS.— 
‘‘(A) IN GENERAL.—Each purchaser of a 
covered mortgage shall offer the borrower on 
the covered mortgage loss mitigation options 
that allow for payment reduction at least as 
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great as would be available to the borrower if 
the loan had not been sold. 
‘‘(B) LOSS
MITIGATION
OPTIONS.—The 
specific formula, calculations, waterfall steps, 
and other terms for appropriate loss mitigation 
options described in subparagraph (A) shall be 
published by the Secretary, made available to 
the public, and included in a written notice 
given to borrowers before any acceleration or 
foreclosure is initiated after a loan sale. 
‘‘(5) REQUIREMENTS
FOR
TRANSFEREES.— 
With respect to a transferee, including any subse-
quent transferee, of a covered mortgage that is sold 
under this title— 
‘‘(A) the transferee shall certify in writing 
to the Secretary that the transferee will comply 
with the provisions of this section in the mar-
keting and transfer of any property received in 
the disposition of any transferred loan; 
‘‘(B) the transferee shall provide to the 
Secretary records documenting that the trans-
fers of those properties are in compliance with 
this section; and 
‘‘(C) the failure of the Secretary or the 
transferee to comply with the requirements 
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under this section for a loan in default shall be 
a defense to foreclosure, and a transferee may 
not execute a foreclosure judgment or order of 
sale, or conduct a foreclosure sale, until the 
transferee has complied with all requirements 
under this section. 
‘‘(d) LIMITATIONS.—With respect to covered mort-
gages that are sold under this title and acquired by the 
buyer through foreclosure sale, not less than 90 percent 
of the properties that are the subject of the covered mort-
gages shall be— 
‘‘(1) sold to owner-occupants; 
‘‘(2) operated or transferred to an entity that 
will operate the property as affordable rental hous-
ing for households below 80 percent of the area me-
dian income for a period of not less than 15 years; 
or 
‘‘(3) transferred or donated to a nonprofit 
agency that is certified by the Secretary and will re-
develop the property for owner occupancy or afford-
able rental housing. 
‘‘(e) PRIORITIZATION
OF SALES.—The Secretary 
shall implement policies, procedures, and controls to— 
‘‘(1) identify and recruit community partners; 
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‘‘(2) engage in consultations with community 
partners before the sale of a pool of covered mort-
gages under this title to determine whether that sale 
can be designed to meet the specific needs of the 
communities served by the community partners; and 
‘‘(3) prioritize the sale of pools of single-family 
mortgages to community partners by— 
‘‘(A) designing pools of covered mortgages 
for direct sale to a community partner, the 
price of which shall be set by the Secretary 
based on a pricing model that considers— 
‘‘(i) the current fair market value of 
the properties; and 
‘‘(ii) the potential impact of fore-
closures on those properties to the value of 
other homes that secure mortgages insured 
under this title in the same census tract; 
or 
‘‘(B) in the case of an auction, if the win-
ning bid is not from a community partner, per-
mitting any community partner that bid during 
that same auction to have a final opportunity to 
enter a higher bid on the pool.’’. 
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(c) FANNIE MAE.—Section 302 of the Federal Na-
tional Mortgage Association Charter Act (12 U.S.C. 1717) 
is amended by adding at the end the following: 
‘‘(d)(1) In this subsection, the term ‘covered mort-
gage’— 
‘‘(A) means any mortgage that is secured by a 
single-family residential property; and 
‘‘(B) includes the promissory note secured by 
the mortgage described in subparagraph (A). 
‘‘(2) The corporation may not sell or transfer any 
covered mortgage under this section unless the require-
ments of this subsection are met. 
‘‘(3)(A) If the corporation intends to sell or transfer 
a covered mortgage, the corporation shall provide the cur-
rent borrower and all owners of record of the property se-
curing the covered mortgage, or require that the current 
borrower and owners of record be provided, a separate 
written notice of the intent to sell the covered mortgage 
that— 
‘‘(i) is mailed via certified and first class mail 
not less than 90 days before the date on which the 
loan is included in any proposed sale; and 
‘‘(ii) includes— 
‘‘(I) a description of the loss mitigation op-
tions of the corporation that are available to 
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borrowers in financial distress and the obliga-
tion of servicers to consider borrowers in de-
fault for those options; 
‘‘(II) a description of the actions that the 
servicer of the loan has taken to review and im-
plement those options for the borrower; and 
‘‘(III) a description of the procedures the 
borrower may use to contest with the corpora-
tion the compliance by the servicer with that 
obligation. 
‘‘(B) The Federal Housing Finance Agency, as re-
ceiver for the corporation, may not authorize the corpora-
tion to sell any covered mortgage through any type of non- 
performing loan sale auction program until the Director 
of the Federal Housing Finance Agency issues rules, 
through the notice and comment rule making procedures 
under section 553 of title 5, United States Code, that ad-
dress essential aspects of any non-performing loan sale 
program, including— 
‘‘(i) the method of selection of loans for sale; 
‘‘(ii) notice to borrowers prior to inclusion of 
the loan in a sale; and 
‘‘(iii) review of loss mitigation status prior to 
the sale, selection of eligible bidders, loss mitigation 
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guidelines applicable to loan purchasers, and report-
ing requirements for purchasers. 
‘‘(4)(A) Each purchaser of a covered mortgage shall 
offer the borrower on the covered mortgage loss mitigation 
options that allow for payment reduction at least as great 
as would be available to the borrower if the loan had not 
been sold. 
‘‘(B) The specific formula, calculations, waterfall 
steps, and other terms for loss mitigation options de-
scribed in subparagraph (A) shall be published by the cor-
poration, made available to the public, and included in a 
written notice given to borrowers before any acceleration 
or foreclosure is initiated after a loan sale. 
‘‘(5) With respect to a transferee, including any sub-
sequent transferee, of a covered mortgage that is sold by 
the corporation under this section— 
‘‘(A) the transferee shall certify in writing to 
the corporation that the transferee will comply with 
the provisions of this subsection in the marketing 
and transfer of any property received in the disposi-
tion of any transferred loan; 
‘‘(B) the transferee shall provide to the corpora-
tion records documenting that the transfers of those 
properties are in compliance with this subsection; 
and 
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‘‘(C) the failure of the corporation or the trans-
feree to comply with the requirements under this 
subsection for a loan in default shall be a defense to 
foreclosure, and a transferee may not execute a fore-
closure judgment or order of sale, or conduct a fore-
closure sale, until the transferee has complied with 
all requirements under this subsection. 
‘‘(6) With respect to covered mortgages that are sold 
by the corporation under this section and foreclosed upon 
by the buyer, not less than 90 percent of the properties 
that are the subject of the covered mortgages in an auc-
tion shall be— 
‘‘(A) sold to owner-occupants; 
‘‘(B) operated or transferred to an entity that 
will operate the property as affordable rental hous-
ing for households below 80 percent of the area me-
dian income for a period of not less than 15 years; 
or 
‘‘(C) transferred or donated to a nonprofit 
agency that is certified by the corporation and will 
redevelop the property for owner occupancy or af-
fordable rental housing. 
‘‘(7) The corporation shall implement policies, proce-
dures, and controls to— 
‘‘(A) identify and recruit community partners; 
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‘‘(B) engage in consultations with community 
partners before the sale of a pool of covered mort-
gages under this section to determine whether that 
sale can be designed to meet the specific needs of 
the communities served by the community partners; 
and 
‘‘(C) prioritize the sale of pools of single-family 
mortgages to community partners by— 
‘‘(i) designing pools of covered mortgages 
for direct sale to a community partner, the 
price of which shall be set by the corporation 
based on a pricing model that considers— 
‘‘(I) the current fair market value of 
the properties; and 
‘‘(II) the potential impact of fore-
closures on those properties to the value of 
other homes in the same census tract; or 
‘‘(ii) in the case of an auction, if the win-
ning bid is not from a community partner, per-
mitting any community partner that bid during 
that same auction to have a final opportunity to 
enter a higher bid on the pool.’’. 
(d) FREDDIE MAC.—Section 305 of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1454) 
is amended by adding at the end the following: 
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