I 
111TH CONGRESS 
2D SESSION 
H. R. 6562 
To revitalize home ownership by establishing a shared equity appreciation 
homeownership pilot program. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 21, 2010 
Ms. CORRINE BROWN of Florida introduced the following bill; which was re-
ferred to the Committee on Financial Services, and in addition to the 
Committee on Ways and Means, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To revitalize home ownership by establishing a shared equity 
appreciation homeownership pilot program. 
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 ‘‘American Residential 
Housing Recovery Act of 2010’’. 
SEC. 2. DECLARATION OF PURPOSE. 
The Congress hereby declares that a national emer-
gency exists that is producing widespread disruption of the 
owned residential real estate markets, which burdens 
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interstate and foreign commerce, affects the public wel-
fare, and undermines the standard of living of the Amer-
ican people. The Congress hereby declares a national pol-
icy to remove obstructions to the free flow of interstate 
and foreign commerce in the owned residential housing 
sector of the American economy; and to provide for the 
general welfare by promoting the flow of equity capital 
into the residential housing sector through innovative 
methods, including the use of shared equity appreciation 
financing methods. 
SEC. 3. SHARED EQUITY APPRECIATION PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary of the Treas-
ury (in this section referred to as the ‘‘Secretary’’) shall 
carry out a shared equity appreciation financing pilot pro-
gram under this section to analyze the effectiveness, in-
cluding as a step in the economic recovery of the United 
States, of shared equity finance methods that stimulate 
the flow of private equity capital into the housing sector, 
while mitigating risk to borrowers. 
(b) STRUCTURE.—Under the pilot program under 
this section, the Secretary shall— 
(1) provide for entities, individuals, and govern-
mental agencies to assist homeowners to acquire, re-
finance, or maintain ownership of 1- to 4-family 
residences with funding provided through shared eq-
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uity appreciation arrangements under which private 
or public sector investors, or both, invest equity 
funds for such residences and thereby share in the 
equity appreciation of such residences; 
(2) encourage public and private sector invest-
ment in such shared equity appreciation arrange-
ments through— 
(A) provision of upfront financial assist-
ance to participants in the pilot program, in-
cluding payments for administrative expenses 
and operating capital; 
(B) insurance under subsection (h) of risks 
of loss to private investors in such arrange-
ments; 
(C) direct investment by public investors in 
contracts for such arrangements; and 
(D) tax credits to private investors in such 
arrangements under section 45S of the Internal 
Revenue Code of 1986 (as added by subsection 
(g)); and 
(3) evaluate the effectiveness of whether the ac-
tions taken by the Secretary under the pilot program 
pursuant to paragraph (2) encourage investment in 
shared equity appreciation arrangements. 
(c) APPLICATION AND SELECTION.— 
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(1) ELIGIBILITY AND APPLICATIONS.—The Sec-
retary shall establish eligibility requirements for fi-
nancial institutions, nonprofit organizations, housing 
associations, investment pools, and other appropriate 
public and private capital sources and individuals to 
participate in the pilot program under this section 
and originate agreements for shared equity apprecia-
tion arrangements under the program, and shall pro-
vide for eligible entities and individuals to apply to 
the Secretary for such participation. Such applica-
tions shall include such information as the Secretary 
considers appropriate. 
(2) SELECTION; CRITERIA.—Not later than 180 
days after the date of the enactment of this Act, the 
Secretary shall select participants in the pilot pro-
gram, from among persons applying for such partici-
pation, using criteria established by the Secretary, 
which shall include— 
(A) whether, under the pilot program, the 
applicant— 
(i) can provide relief to homeowners 
without modifying the original mortgage 
and securitization; 
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(ii) can provide homeowners with a 
long-term stimulus for as long as the 
shared equity arrangement is in effect; 
(iii) will empower homeowners to have 
a stake in the solution; 
(iv) has a streamlined process for 
originating and servicing contracts under 
the pilot program for shared equity appre-
ciation arrangements; 
(v) can materially reduce default and 
foreclosure risk on mortgages of home-
owners; 
(vi) can effectively reduce interest 
rates on mortgages of homeowners; 
(vii) can effectively reduce debt-to-in-
come ratios and re-default rates on mort-
gages of homeowners; 
(viii) will credit homeowners with 100 
percent of the increase in the value of 
homeowners’ residences resulting from im-
provements made to their properties; 
(ix) will provide periodic payments 
based on current home value to the home-
owners or to the homeowners’ lenders on 
behalf of the homeowner; 
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(x) will make equity-sharing payments 
available to new home purchasers to in-
crease the percentage of approved loan ap-
plications; and 
(xi) will make equity-sharing pay-
ments available to senior homeowners to 
reduce the rate of forced sales of their 
properties; 
(B) whether investors in mortgage-backed 
securities deem equity-sharing payments to 
homeowners under the applicant’s program as 
an incentive to providing principal forbearance; 
(C) whether mortgage loan servicers deem 
equity-sharing payments to homeowners under 
the applicant’s program as a suitable loss miti-
gation tool; 
(D) whether institutions regulated under 
the Community Reinvestment Act of 1977 (12 
U.S.C. 2901) and the Federal financial super-
visory agencies deem equity-sharing payments 
to homeowners as an investment eligible for 
credit under such Act; and 
(E) whether providing Government-spon-
sored insurance against loss in property value 
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under the applicant’s program will increase par-
ticipation by private investors. 
(d) LIMITATION TO PRINCIPAL RESIDENCE.—Only 
mortgages for residences that are occupied as the principal 
residence of the mortgagee shall be eligible under the pilot 
program under this section. 
(e) RIGHTS OF PARTIES.—The Secretary shall estab-
lish the rights, privileges and responsibilities of the respec-
tive parties to transactions under the pilot program under 
this section. 
(f) GEOGRAPHIC DIVERSITY.—The Secretary shall 
carry out the pilot program on a regional basis in five re-
gional areas of the United States, as follows: 
(1) NORTHEAST.—The Northeast region, con-
sisting of the States of Connecticut, Delaware, 
Maine, Maryland, Massachusetts, New Hampshire, 
New Jersey, New York, Pennsylvania, Rhode Island 
and Vermont. 
(2) SOUTHEAST.—The Southeast region, con-
sisting of the States of Alabama, Florida, Georgia, 
Mississippi, North Carolina, South Carolina, Ten-
nessee, Virginia, and West Virginia, and the District 
of Columbia. 
(3) CENTRAL.—The Central region, consisting 
of the States of Arkansas, Illinois, Indiana, Iowa, 
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Kansas, Kentucky, Louisiana, Michigan, Missouri, 
Nebraska, Ohio, and Wisconsin. 
(4) SOUTHWEST.—The Southwest region, con-
sisting of the States of Arizona, California, Colo-
rado, Hawaii, Nevada, New Mexico, Oklahoma, and 
Texas. 
(5) NORTHWEST.—The Northwest region, con-
sisting of the States of Alaska, Idaho, Minnesota, 
Montana, North Dakota, Oregon, South Dakota, 
Utah, Washington, and Wyoming. 
(g) TAX CREDIT
FOR PRIVATE INVESTMENT
IN 
SHARED EQUITY APPRECIATION CONTRACTS.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the 
following new section: 
‘‘SEC. 45S. CREDIT FOR PRIVATE INVESTMENT IN SHARED 
EQUITY APPRECIATION CONTRACTS. 
‘‘For purposes of section 38, the shared equity appre-
ciation contract credit determined under this section for 
the taxable year is 39 percent of the aggregate amount 
paid or incurred by the taxpayer during such taxable year 
as an investment in any shared appreciation contract of 
a participant in the pilot program under the American 
Residential Housing Recovery Act of 2010.’’. 
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(2) CREDIT TO BE PART OF GENERAL BUSI-
NESS CREDIT.—Subsection (b) of section 38 of such 
Code is amended by striking ‘‘plus’’ at the end of 
paragraph (35), by striking the period at the end of 
paragraph (36) and inserting ‘‘, plus’’ , and by add-
ing at the end the following new paragraph: 
‘‘(37) the shared equity appreciation contract 
credit determined under section 45S(a).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 45S. Credit for private investment in shared equity appreciation con-
tracts.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years end-
ing after the date of the enactment of this Act. 
(h) INSURANCE OF RISKS TO INVESTORS.—From any 
amounts made available for carrying out the pilot program 
under this section, the Secretary shall set aside amounts 
sufficient to insure investments of private funds in shared 
equity appreciation arrangements fully against any losses 
arising from participation in the pilot program. 
(i) MONITORING AND REPORTING.— 
(1) MONITORING.—The Secretary shall provide 
for such monitoring under the pilot program under 
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this section as may be necessary and appropriate to 
determine its effectiveness, and the structure and re-
quirements of such monitoring. 
(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 under this section and making rec-
ommendations regarding expansion or improvements 
thereof. 
(j) WAIVER.—The Secretary may waive, or specify al-
ternative requirements for, any provision of any statute, 
regulation, or guideline that the Secretary administers 
upon a determination by the Secretary that such waiver 
is appropriate to carry out the pilot program under this 
section. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated for assistance under the 
pilot program under this section and any costs of carrying 
out this section such sums as may be necessary for each 
of fiscal years 2010 through 2015. 
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SEC. 4. REGULATORY OVERSIGHT OF SHARED EQUITY AP-
PRECIATION CONTRACTS BY BUREAU OF 
CONSUMER FINANCIAL PROTECTION. 
(a) TREATMENT AS CONSUMER FINANCIAL PROD-
UCT.—Section 1002 of the Dodd-Frank Wall Street Re-
form and Consumer Protection Act (12 U.S.C. 5481) is 
amended— 
(1) in paragraph (5)— 
(A) in subparagraph (A), by striking ‘‘or’’ 
at the end; 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘or’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) is a shared equity appreciation con-
tract’’; 
(2) by redesignating paragraphs (27) through 
(29) as paragraphs (28) through (30), respectively; 
and 
(3) by inserting after paragraph (26) the fol-
lowing new paragraph: 
‘‘(27) SHARED
EQUITY
APPRECIATION
CON-
TRACT.—The term ‘shared equity appreciation con-
tract’ means an agreement between private or public 
sector investors, or both, and homeowners under 
which such investors provide funds to assist the 
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homeowners to acquire, refinance, or maintain own-
ership of 1- to 4-family residences and under which 
the investors share in the equity appreciation of such 
residence.’’. 
(b) OVERSIGHT.—Subtitle C of title X of the Dodd- 
Frank Wall Street Reform and Consumer Protection Act 
is amended— 
(1) by redesignating section 1037 (12 U.S.C. 
5531 note) as section 1038; and 
(2) by inserting after section 1036 (12 U.S.C. 
5536) the following new section: 
‘‘SEC. 1037. SHARED EQUITY APPRECIATION CONTRACTS. 
‘‘In carrying out its duties under this title with re-
spect to shared equity appreciation contracts, the Bureau 
shall issue and enforce regulations governing the establish-
ment and servicing of shared appreciation contracts to en-
sure that— 
‘‘(1) consumers receive clear and balanced in-
formation about the risks and benefits of shared eq-
uity appreciation financing, including information 
about available alternatives; 
‘‘(2) appropriate eligibility and underwriting 
guidelines are applied; 
‘‘(3) consumers demonstrate they understand 
their rights and obligations, as well as the risks and 
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benefits, before entering into shared equity apprecia-
tion contracts; 
‘‘(4) consumers receive qualified independent 
counseling before entering into shared equity appre-
ciation contracts; 
‘‘(5) the terms of such contracts, including pric-
ing, homeowner payments and percentage of equity 
shared, are not predatory; 
‘‘(6) consumers are protected from being sold 
shared equity contracts to fund inappropriate annu-
ities, investments, and other financial products, 
‘‘(7) contract portfolio and individual loan level 
audit review standards are established and followed; 
and 
‘‘(8) shared equity appreciation contract pro-
viders are certified for financial strength, comply 
with rules and regulations promulgated by the Bu-
reau, and follow procurement policies consistent with 
public sector practice.’’. 
Æ 
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