SEC. 2. REPLACEMENT OF HOPE FOR HOMEOWNERS PRO-
GRAM WITH PROGRAM FOR INSURANCE OF 
HOMEOWNERSHIP RETENTION MORTGAGES. 
(a) REPLACEMENT OF PROGRAM.—Title II of the 
National Housing Act (12 U.S.C. 1707 et seq.) is amend-
ed— 
(1) in section 257 (12 U.S.C. 1715z–23), as 
added by section 1402(a) of Public Law 110–289— 
(A) by striking subsections (a) through 
(k); and 
(B) by striking subsections (n) through 
(v); 
(2) by redesignating section 257 (12 U.S.C. 
1715z–24), as added by section 2124 of Public Law 
110–289, as section 259; and 
(3) by inserting before such section 259 (as so 
redesignated) the following new section: 
‘‘SEC. 258. INSURANCE OF HOMEOWNERSHIP RETENTION 
MORTGAGES. 
‘‘(a) AUTHORITY.—The Secretary shall, subject only 
to the absence of qualified requests for insurance under 
this section and to the limitations under sections 257(m) 
and 531(a), make commitments to insure and insure any 
mortgage covering a 1- to 4-family residence that is made 
for the purpose of paying or prepaying outstanding obliga-
tions under an existing mortgage or mortgages on the resi-
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dence if the mortgage being insured under this section 
meets the requirements of this section, as established by 
the Secretary. The Secretary shall establish such mortgage 
insurance products, and requirements and standards, in 
accordance with this section as the Secretary considers ap-
propriate to carry out this section and shall prescribe such 
regulations and provide such guidance as may be nec-
essary or appropriate to implement such products, require-
ments, and standards. 
‘‘(b) REQUIREMENTS OF INSURED MORTGAGE.—To 
be eligible for insurance under this section, a mortgage 
shall comply with all of the following requirements: 
‘‘(1) PRIMARY
RESIDENCE.—The mortgagor 
under the mortgage to be insured under this section 
shall provide documentation satisfactory in the de-
termination of the Secretary to prove that the resi-
dence covered by the mortgage to be insured under 
this section is occupied by the mortgagor as the pri-
mary residence of the mortgagor, and that such resi-
dence is the only residence in which the mortgagor 
has any present ownership interest. 
‘‘(2) TROUBLED HOMEOWNER.—The mortgagor 
under the mortgage to be insured under this section 
shall be the mortgagor under the existing mortgage 
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to be refinanced by the insured mortgage and 
shall— 
‘‘(A) be in default on the mortgagor’s obli-
gations under the existing mortgage; 
‘‘(B) be in danger of defaulting, as deter-
mined in accordance with standards established 
by the Secretary, on the mortgagor’s obligations 
under the existing mortgage; or 
‘‘(C) have a remaining principal obligation 
amount under such existing mortgage that ex-
ceeds, at the time of the commitment for mort-
gage insurance under this section, the appraised 
value of the property that is subject to such ex-
isting mortgage. 
‘‘(3) PROHIBITION
ON
REFINANCING
LIAR 
LOANS.—The Secretary may not insure a mortgage 
under this section if the mortgagor under such mort-
gage has knowingly, or willfully and with actual 
knowledge, furnished any material information re-
garding the income or financial worth of the mort-
gagor that is known to be false for the purpose of 
obtaining the existing mortgage that is to be refi-
nanced by the mortgage to be insured under this 
section. 
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‘‘(4) PROHIBITION
ON
REFINANCING
ZERO- 
DOWN
LOANS
AND
LOANS
WITH
EQUITY
RE-
MOVED.—The Secretary may not insure a mortgage 
under this section if— 
‘‘(A) under the existing mortgage to be re-
financed, the mortgagor did not make any pay-
ment on account of the property (or any pay-
ment exceeding such nominal amount as the 
Secretary may establish), in cash or its equiva-
lent, in connection with acquisition of the prop-
erty; or 
‘‘(B) during the term of the existing mort-
gage to be refinanced, the mortgagor withdrew 
all, or substantially all (in accordance with such 
standards and guidelines as the Secretary shall 
establish) of any equity of the mortgagor in the 
property subject to such existing mortgage. 
‘‘(5) TERMS.—The mortgage to be insured 
under this section shall have such terms and condi-
tions as the Secretary shall provide, except that such 
mortgage shall— 
‘‘(A) have a term to maturity not exceed-
ing 40 years; and 
‘‘(B) bear interest at an annual rate that 
is fixed for the entire term of the mortgage. 
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‘‘(6) REQUIRED WAIVER OF PREPAYMENT PEN-
ALTIES AND FEES.—All penalties for prepayment or 
refinancing of the existing mortgage, and all fees 
and penalties related to default or delinquency on 
the existing mortgage, shall be waived or forgiven. 
‘‘(7) SHARED
APPRECIATION.—The Secretary 
shall provide that, with respect to each mortgage in-
sured under this section, upon any sale or disposi-
tion of the property subject to such mortgage occur-
ring during the 5-year period beginning on the date 
of the insurance of the mortgage, to the extent of 
any principal write- down or interest rate subsidy 
provided in connection with the mortgage, the Sec-
retary and the mortgagee shall be entitled to a per-
centage of any appreciation in value of such prop-
erty that has occurred since the date that such 
mortgage was insured under this section, which per-
centage shall decrease over time, and the mortgagor 
shall be entitled to the remainder of any such appre-
ciation. 
‘‘(8) MAXIMUM LOAN AMOUNT.—The principal 
obligation amount of the mortgage to be insured 
under this section shall not exceed the applicable 
dollar amount limitation in effect under section 
305(a)(2) of the Federal Home Loan Mortgage Cor-
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poration (12 U.S.C. 1452(a)(2)) for a property of 
the applicable size for the area in which the property 
is located. 
‘‘(9) TERM; INTEREST RATE.—The refinanced 
eligible mortgage to be insured shall— 
‘‘(A) bear interest at a single rate that is 
fixed for the entire term of the mortgage; and 
‘‘(B) have a maturity of not less than 30 
years from the date of the beginning of amorti-
zation of such refinanced eligible mortgage. 
‘‘(c) EXIT FEE.—The Secretary may establish a fee, 
charge, or other mechanism for recovering, upon sale or 
other disposition of the property that is subject to the 
mortgage insured under this section or upon the subse-
quent refinancing of the mortgage, a portion of the equity 
or appreciation in the property. 
‘‘(d) GNMA PRICING.—In order to facilitate favor-
able pricing for loans insured under this section, the 
Board of Governors of the Federal Reserve System, the 
Secretary of the Treasury, the Federal National Mortgage 
Association, and the Federal Home Loan Mortgage Cor-
poration are authorized to purchase mortgage-backed se-
curities guaranteed by the Government National Mortgage 
Association that are backed by loans originated under this 
section or whole loans originated and purchased under this 
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