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amount (as it may have been previously 
adjusted) a percentage thereof equal to the 
percentage increase or decrease, during the 
most recently completed 12-month or 4- 
quarter period ending before the time of 
determining such annual adjustment, in an 
housing price index developed or selected 
by the Secretary for purposes of adjust-
ments under this clause; 
except that the dollar amount limitation in ef-
fect under this subparagraph for any size resi-
dence for any area may not be less than the 
greater of: (I) the dollar amount limitation in 
effect under this section for the area on October 
21, 1998; or (II) 65 percent of the dollar 
amount limitation in effect for 2007 under such 
section 305(a)(2) for a residence of the applica-
ble size, as such limitation is adjusted by any 
subsequent percentage adjustments determined 
under clause (ii) of this subparagraph; and ex-
cept that, if the Secretary determines that mar-
ket conditions warrant such an increase, the 
Secretary may, for such period as the Secretary 
considers appropriate, increase the maximum 
dollar amount limitation determined pursuant 
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to the preceding provisions of this subpara-
graph with respect to any particular size or 
sizes of residences, or with respect to residences 
located in any particular area or areas, to an 
amount that does not exceed the maximum dol-
lar amount then otherwise in effect pursuant to 
the preceding provisions of this subparagraph 
for such size residence, or for such area (if ap-
plicable), by not more than $100,000; and’’. 
SEC. 4. EXTENSION OF MORTGAGE TERM. 
Paragraph (3) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(3)) is amended— 
(1) by striking ‘‘thirty-five years’’ and inserting 
‘‘forty years’’; and 
(2) by striking ‘‘(or thirty years if such mort-
gage is not approved for insurance prior to construc-
tion)’’. 
SEC. 5. DOWNPAYMENT SIMPLIFICATION. 
Section 203(b) of the National Housing Act (12 
U.S.C. 1709(b)) is amended— 
(1) in paragraph (2)— 
(A) by striking subparagraph (B) and in-
serting the following new subparagraph: 
‘‘(B) not to exceed an amount equal to the 
sum of— 
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‘‘(i) the amount of the mortgage pre-
mium paid at the time the mortgage is in-
sured; and 
‘‘(ii)(I) except as provided in sub-
clause (II), 97.75 percent of the appraised 
value of the property; or 
‘‘(II) in the case only of a mortgage 
described in subsection (c)(3), the ap-
praised value of the property, plus any ini-
tial service charges, appraisal, inspection, 
and other fees in connection with the mort-
gage as approved by the Secretary.’’; 
(B) in the matter after and below subpara-
graph (B), by striking the second sentence (re-
lating to a definition of ‘‘average closing cost’’) 
and all that follows through ‘‘title 38, United 
States Code.’’; and 
(C) by striking the last undesignated para-
graph (relating to counseling with respect to 
the responsibilities and financial management 
involved in homeownership); and 
(2) in paragraph (9)— 
(A) by striking the paragraph designation 
and all that follows through ‘‘Provided further, 
That for’’ and inserting the following: 
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‘‘(9) Except in the case of a mortgage described 
in subsection (c)(3), be executed by a mortgagor who 
shall have paid on account of the property, in cash 
or its equivalent, at least 3 percent of the Sec-
retary’s estimate of the cost of acquisition (excluding 
the mortgage insurance premium paid at the time 
the mortgage is insured). For’’; and 
(B) by inserting after the period at the end 
the following: ‘‘For purposes of this paragraph, 
the Secretary shall consider as cash or its 
equivalent any amounts gifted by a family 
member (as such term is defined in section 
201), the mortgagor’s employer or labor union, 
or a qualified homeownership assistance entity, 
but only if there is no obligation on the part of 
the mortgagor to repay the gift: For purposes 
of the preceding sentence, the term ‘qualified 
homeownership assistance entity’ means any 
governmental agency or charity that has a pro-
gram to provide homeownership assistance to 
low- and moderate-income families or first-time 
home buyers, or any private nonprofit organiza-
tion that has such a program and evidences suf-
ficient fiscal soundness to protect the fiscal in-
tegrity of the Mutual Mortgage Insurance Fund 
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by maintaining a minimum net worth of 
$4,000,000 of acceptable assets.’’. 
SEC. 6. MORTGAGE INSURANCE PREMIUMS FOR ZERO- AND 
LOWER-DOWNPAYMENT BORROWERS. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) ZERO- 
AND
LOWER-DOWNPAYMENT
BOR-
ROWERS.— 
‘‘(A) APPLICABILITY.—This paragraph shall 
apply to any mortgage that— 
‘‘(i) is secured by a 1- to 4-family dwelling 
that will be occupied by the mortgagor as his or 
her principal residence; 
‘‘(ii)(I) is an obligation of the Mutual 
Mortgage Insurance Fund or of the General In-
surance Fund pursuant to subsection (v) of this 
section; or 
‘‘(II) is insured under subsection (k) of 
this section or section 234(c); 
‘‘(iii)(I) is executed by a mortgagor who 
has not had any present ownership interest in 
a principal residence, and whose spouse has not 
had any such interest, during 12-month period 
ending upon purchase of the residence with the 
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mortgage to which this paragraph applies, ex-
cept that this subclause shall be considered a 
program to assist first-time homebuyers for 
purposes of section 956 of the Cranston-Gon-
zalez National Affordable Housing Act (42 
U.S.C. 12713); or 
‘‘(II)(aa) is made to pay or prepay, and 
fully extinguish, the outstanding obligations 
under an existing mortgage or mortgages on 
the same property; and 
‘‘(bb) involves a principal obligation not ex-
ceeding the amount necessary to fully pay or 
prepay such outstanding obligations under the 
existing mortgage or mortgages, plus any 
charges and fees involved in such transaction 
and any charges and fees in connection with the 
payment or prepayment of such outstanding ob-
ligations. 
‘‘(iv)(I) involves a principal obligation that 
does not comply with subclause (I) of sub-
section (b)(2)(B)(ii) (relating to loan-to-value 
ratio); or 
‘‘(II) is executed by a mortgagor who has 
not paid on account of the property, in cash or 
its equivalent, at least 3 percent of the Sec-
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retary’s estimate of the cost of acquisition (ex-
cluding the mortgage insurance premium paid 
at the time the mortgage is insured). 
‘‘(B) UP-FRONT
PREMIUMS.—The amount of 
any single premium payment collected at the time of 
insurance may not exceed 3.0 percent of the amount 
of the original insured principal obligation of the 
mortgage. 
‘‘(C) ANNUAL PREMIUMS.—Except as provided 
in subparagraph (D), the amount of any annual pre-
mium payment collected may not exceed 0.75 per-
cent of the remaining insured principal obligation of 
the mortgage. 
‘‘(D) ANNUAL REDETERMINATION OF PREMIUM 
RATE.—The Secretary shall redetermine the rates of 
premiums not less than once every 12 months.’’. 
SEC. 7. MORTGAGE INSURANCE PREMIUMS FOR STANDARD 
AND HIGHER-RISK BORROWERS. 
Paragraph (2) of section 203(c) of the National 
Housing Act (12 U.S.C. 1709(c)(2)) is amended— 
(1) by striking the matter that precedes sub-
paragraph (A) and inserting the following: 
‘‘(2) STANDARD-RISK MORTGAGES.—In the case of 
any mortgage that is secured by a 1- to 4-family dwelling, 
is an obligation of the Mutual Mortgage Insurance Fund 
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or of the General Insurance Fund pursuant to subsection 
(v) of this section or is insured under subsection (k) of 
this section or section 234(c), for which the mortgagor has 
paid on account of the property, in cash or its equivalent, 
at least 3 percent of the Secretary’s estimate of the cost 
of acquisition (excluding the mortgage insurance premium 
paid at the time the mortgage is insured), and that in-
volves a principal obligation that complies with subclause 
(I) of subsection (b)(2)(B)(ii), the following requirements 
shall apply:’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) HIGHER-RISK
BORROWERS.—The Sec-
retary shall establish underwriting standards that 
provide for insurance under this section of mort-
gages described in the matter in this paragraph pre-
ceding subparagraph (A) for which the mortgagor 
has a credit score equivalent to a FICO score of less 
than 560, and may insure, and make commitments 
to insure, such mortgages. Such underwriting stand-
ards shall include establishing and collecting pre-
mium payments that comply with the requirements 
of this paragraph, except that notwithstanding sub-
paragraph (A), the single premium payment col-
lected at the time of insurance may be established 
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in an amount that does not exceed 3.0 percent of the 
amount of the original insured principal obligation of 
the mortgage.’’. 
SEC. 8. RISK-BASED MORTGAGE INSURANCE PREMIUMS. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)), as amended by the preceding provisions 
of this Act, is further amended by adding at the end the 
following new paragraphs: 
‘‘(4) FLEXIBLE RISK-BASED PREMIUMS.—In the 
case of a mortgage referred to in paragraph (2)(C) or 
(3)(A) for which the loan application is received by the 
mortgagee on or after October 1, 2007: 
‘‘(A) IN GENERAL.—The Secretary may estab-
lish a mortgage insurance premium structure involv-
ing a single premium payment collected prior to the 
insurance of the mortgage or annual payments 
(which may be collected on a periodic basis), or both, 
subject to the requirements of subparagraph (B) and 
paragraph (5). Under such structure, the rate of 
premiums for such a mortgage may vary according 
to the credit risk associated with the mortgage and 
the rate of any annual premium for such a mortgage 
may vary during the mortgage term as long as the 
basis for determining the variable rate is established 
before the execution of the mortgage. The Secretary 
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may change a premium structure established under 
this subclause but only to the extent that such 
change is not applied to any mortgage already exe-
cuted. 
‘‘(B) ESTABLISHMENT
AND
ALTERATION
OF 
PREMIUM STRUCTURE.—A premium structure shall 
be established or changed under subparagraph (A) 
only by providing notice to mortgagees and to the 
Congress, at least 30 days before the premium 
structure is established or changed. 
‘‘(C) 
ANNUAL
REPORT
REGARDING
PRE-
MIUMS.—The Secretary shall submit a report to the 
Congress annually setting forth the rate structures 
and rates established and altered pursuant to this 
paragraph during the preceding 12-month period 
and describing how such rates were determined. 
‘‘(5) CONSIDERATIONS FOR PREMIUM STRUCTURE.— 
When establishing premiums for mortgages referred to in 
paragraph (2)(C), establishing premiums pursuant to 
paragraph (3), establishing a premium structure under 
paragraph (4), and when changing such a premium struc-
ture, the Secretary shall consider the following: 
‘‘(A) The effect of the proposed premiums or 
structure on the Secretary’s ability to meet the oper-
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ational goals of the Mutual Mortgage Insurance 
Fund as provided in section 202(a). 
‘‘(B) Underwriting variables. 
‘‘(C) The extent to which new pricing under the 
proposed premiums or structure has potential for ac-
ceptance in the private market. 
‘‘(D) The administrative capability of the Sec-
retary to administer the proposed premiums or 
structure. 
‘‘(E) The effect of the proposed premiums or 
structure on the Secretary’s ability to maintain the 
availability of mortgage credit and provide stability 
to mortgage markets. 
‘‘(6) AUTHORITY TO BASE PREMIUM PRICES
ON 
PRODUCT RISK.— 
‘‘(A) AUTHORITY.—In establishing premium 
rates under paragraphs (2), (3), and (4), the Sec-
retary may provide for variations in such rates ac-
cording to the credit risk associated with the type of 
mortgage product that is being insured under this 
title, which may include providing that premium 
rates differ between fixed-rate mortgages and ad-
justable-rate mortgages insured pursuant to section 
251, between mortgages insured pursuant to section 
203(b) and mortgages for condominiums insured 
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pursuant to section 234, and between such other 
products as the Secretary considers appropriate. 
‘‘(B) LIMITATION.—Subparagraph (A) may not 
be construed to authorize the Secretary to establish, 
for any mortgage product, any mortgage insurance 
premium rate that does not comply with the require-
ments and limitations under paragraphs (2) through 
(5).’’. 
SEC. 9. PAYMENT INCENTIVES. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)), as amended by the preceding provisions 
of this Act, is further amended by adding at the end the 
following new paragraph: 
‘‘(7) PAYMENT INCENTIVES.— 
‘‘(A) AUTHORITY.—With respect to mortgages 
referred to in paragraph (2)(C) or (3): 
‘‘(i) DISCRETIONARY 3-YEAR PAYMENT IN-
CENTIVE.—The Secretary may provide, in the 
discretion of the Secretary, that the payment 
incentive under subparagraph (B) shall apply 
upon the expiration of the 3-year period begin-
ning upon the time of insurance of such a mort-
gage. 
‘‘(ii) MANDATORY 5-YEAR PAYMENT INCEN-
TIVE.—The Secretary shall provide that the 
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payment incentive under subparagraph (B) ap-
plies upon the expiration of the 5-year period 
beginning upon the time of insurance of such a 
mortgage. 
‘‘(B) PAYMENT INCENTIVE.—In the case of any 
mortgage to which the payment incentive under this 
subparagraph applies, if, during the period referred 
to in clause (i) or (ii) of subparagraph (A), as appli-
cable, all mortgage insurance premiums for such 
mortgage have been paid on a timely basis, upon the 
expiration of such period the Secretary shall— 
‘‘(i) reduce the amount of the annual pre-
mium payments otherwise due thereafter under 
such mortgage— 
‘‘(I) in the case of a mortgage re-
ferred to in paragraph (3), to an amount 
that does not exceed the amount of the 
maximum annual premium allowable under 
paragraph (2)(B); and 
‘‘(II) in the case of a mortgage re-
ferred to in paragraph (2)(C), to an 
amount that does not exceed the amount of 
the annual premium payable at the time of 
insurance of the mortgage on a mortgage 
of the same product type having the same 
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terms, but for which the mortgagor has a 
credit score equivalent to a FICO score of 
560 or more; and 
‘‘(ii) in the case only of a mortgage re-
ferred to in paragraph (2)(C), refund to the 
mortgagor, upon payment in full of the obliga-
tion of the mortgage, any amount by which the 
single premium payment for such mortgage col-
lected at the time of insurance exceeded the 
amount of the single premium payment charge-
able under paragraph (2)(A) at the time of in-
surance for a mortgage of the same product 
type having the same terms, but for which the 
mortgagor has a credit score equivalent to a 
FICO score of 560 or more.’’. 
SEC. 10. BORROWER PROTECTIONS FOR HIGHER RISK 
MORTGAGES. 
Section 203(b) of the National Housing Act (12 
U.S.C. 1709(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(10) BORROWER PROTECTIONS FOR CERTAIN 
MORTGAGES.—Except as otherwise specifically pro-
vided in this paragraph, in the case of any mortgage 
referred to in paragraph (2)(C) or (3) of subsection 
(c), the following requirements shall apply: 
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‘‘(A) DISCLOSURES.— 
‘‘(i) REQUIRED DISCLOSURES.—In ad-
dition to any disclosures that are otherwise 
required by law or by the Secretary for 
single family mortgages, the mortgagee 
shall disclose to the mortgagor the fol-
lowing information: 
‘‘(I) AT
APPLICATION.—At the 
time of application for the loan in-
volved in the mortgage, a list of coun-
seling agencies, approved by the Sec-
retary, in the area of the applicant. 
‘‘(II) AT
EXECUTION.—At the 
time of entering into the mortgage— 
‘‘(aa) the terms of the man-
datory 5-year payment incentive 
required 
under 
subsection 
(c)(7)(A)(ii); and 
‘‘(bb) a statement that the 
mortgagor has a right under con-
tract to loss mitigation. 
‘‘(III) OTHER
INFORMATION.— 
Any other additional information that 
the Secretary determines is appro-
priate to ensure that the mortgagor 
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has received timely and accurate in-
formation about the program under 
paragraph (2)(C) or (3) of subsection 
(c), as applicable. 
‘‘(ii) PENALTIES
FOR
FAILURE
TO 
PROVIDE
REQUIRED
DISCLOSURES.—The 
Secretary may establish and impose appro-
priate penalties for failure of a mortgagee 
to provide any disclosure required under 
clause (i). 
‘‘(iii) NO
PRIVATE
RIGHT
OF
AC-
TION.—This subparagraph shall not create 
any private right of action on behalf of the 
mortgagor. 
‘‘(B) COUNSELING.— 
‘‘(i) REQUIREMENT.—The Secretary 
shall require that the mortgagor shall have 
received counseling that complies with the 
requirements of this subparagraph. 
‘‘(ii) TERMS OF COUNSELING.—Coun-
seling under this subparagraph shall be 
provided— 
‘‘(I) prior to closing for the loan 
involved in the mortgage; 
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‘‘(II) by a third party (other than 
the mortgagee) who is approved by 
the Secretary, with respect to the re-
sponsibilities and financial manage-
ment involved in homeownership; 
‘‘(III) on an individual basis to 
the mortgagor by a representative of 
the approved third-party counseling 
entity; and 
‘‘(IV) in person, to the maximum 
extent possible. 
‘‘(iii) TOPICS.—In the case only of a 
mortgage referred to in subsection (c)(3), 
counseling under this subparagraph shall 
include providing to, and discussing with, 
the mortgagor— 
‘‘(I) information regarding home-
ownership options other than a mort-
gage that is subject to this paragraph, 
other zero- or low-downpayment mort-
gage options that are or may become 
available to the mortgagor, the finan-
cial implications of entering into a 
mortgage (including a mortgage sub-
ject to this paragraph), and any other 
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information that the Secretary may 
require; 
‘‘(II) a written disclosure that 
sets forth the amount and the per-
centage by which a property with a 
mortgage that is subject to this para-
graph must appreciate for the mort-
gagor to recover the principal amount 
of the mortgage, the costs financed 
under the mortgage, and the esti-
mated costs involved in selling the 
property, if the mortgagor were to sell 
the property on each of the second, 
fifth, and tenth anniversaries of the 
mortgage; and 
‘‘(III) a written disclosure, as the 
Secretary shall require, that specifies 
the effective cost to a mortgagor of 
borrowing the amount by which the 
maximum amount that could be bor-
rowed under a mortgage that is re-
ferred to in subsection (c)(3) exceeds 
the maximum amount that could be 
borrowed under a mortgage insured 
under this subsection that is not a 
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mortgage referred to in such sub-
section, based on average closing costs 
with respect to such amount, as deter-
mined by the Secretary; such cost 
shall be expressed as an annual inter-
est rate over the first 5 years of a 
mortgage; 
the 
disclosure 
required 
under this subclause may be provided 
in conjunction with the notice re-
quired under subsection (f). 
‘‘(iv) 
2- 
AND
3-FAMILY
RESI-
DENCES.—In the case of a mortgage in-
volving a 2- or 3-family residence, coun-
seling under this subparagraph shall in-
clude (in addition to the information re-
quired under clause (iii)) information re-
garding real estate property management. 
‘‘(C) NOTICE OF FORECLOSURE PREVEN-
TION COUNSELING AVAILABILITY.— 
‘‘(i) WRITTEN
AGREEMENT.—To be 
eligible for insurance under this subsection, 
the mortgagee shall provide the mortgagor, 
at the time of the execution of the mort-
gage, a written agreement which shall be 
signed by the mortgagor and under which 
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the mortgagee shall provide notice de-
scribed in clause (ii) to a housing coun-
seling entity that has agreed to provide the 
notice and counseling required under 
clause (iii) and is approved by the Sec-
retary. 
‘‘(ii) NOTICE TO COUNSELING AGEN-
CY.—The notice described in this clause, 
with respect to a mortgage, is notice, pro-
vided at the earliest time practicable after 
the mortgagor becomes 60 days delinquent 
with respect to any payment due under the 
mortgage, that the mortgagor is so delin-
quent and of how to contact the mort-
gagor. Such notice may only be provided 
once with respect to each delinquency pe-
riod for a mortgage. 
‘‘(iii) NOTICE TO MORTGAGOR.—Upon 
notice from a mortgagee that a mortgagor 
is 60 days delinquent with respect to pay-
ments due under the mortgage, the hous-
ing counseling entity shall at the earliest 
time practicable notify the mortgagor of 
such delinquency, that the entity makes 
available foreclosure prevention counseling 
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that may assist the mortgagor in resolving 
the delinquency, and of how to contact the 
entity to arrange for such counseling. 
‘‘(iv) ABILITY TO CURE.—Failure to 
provide the written agreement required 
under clause (i) may be corrected by send-
ing such agreement to the mortgagor not 
later than the earliest time practicable 
after the mortgagor first becomes 60 days 
delinquent with respect to payments due 
under the mortgage. Insurance provided 
under this subsection may not be termi-
nated and penalties for such failure may 
not be prospectively or retroactively im-
posed if such failure is corrected in accord-
ance with this clause. 
‘‘(v) PENALTIES
FOR
FAILURE
TO 
PROVIDE
AGREEMENT.—The 
Secretary 
may establish and impose appropriate pen-
alties for failure of a mortgagee to provide 
the written agreement required under 
clause (i). 
‘‘(vi) LIMITATION
ON
LIABILITY
OF 
MORTGAGEE.—A mortgagee shall not incur 
any liability or penalties for any failure of 
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a housing counseling entity to provide no-
tice under clause (iii). 
‘‘(vii) NO
PRIVATE
RIGHT
OF
AC-
TION.—This subparagraph shall not create 
any private right of action on behalf of the 
mortgagor. 
‘‘(viii) DELINQUENCY
PERIOD.—For 
purposes of this subparagraph, the term 
‘delinquency period’ means, with respect to 
a mortgage, a period that begins upon the 
mortgagor becoming delinquent with re-
spect to payments due under the mortgage 
and ends upon the first subsequent occur-
rence of such payments under the mort-
gage becoming current or the property 
subject to the mortgage being foreclosed or 
otherwise disposed of.’’. 
SEC. 11. REFINANCING MORTGAGES. 
Section 203 of the National Housing Act (12 U.S.C. 
1709) is amended by inserting after subsection (k) the fol-
lowing new subsection: 
‘‘(l) REFINANCING MORTGAGES.— 
‘‘(1) 
ESTABLISHMENT
OF
UNDERWRITING 
STANDARDS.—The Secretary shall establish under-
writing standards that provide for insurance under 
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this title of mortgage loans, and take actions to fa-
cilitate the availability of mortgage loans insured 
under this title, for qualified borrowers that are 
made for the purpose of paying or prepaying out-
standing obligations under existing mortgages for 
borrowers that— 
‘‘(A) have existing mortgages with adverse 
terms or rates, or 
‘‘(B) do not have access to mortgages at 
reasonable 
rates 
and 
terms 
for 
such 
refinancings due to adverse market conditions. 
‘‘(2) INSURANCE
OF
MORTGAGES
TO
BOR-
ROWERS IN DEFAULT OR AT RISK OF DEFAULT.—In 
facilitating insurance for such mortgages, the Sec-
retary may insure mortgages to borrowers who are, 
currently in default or at imminent risk of being in 
default, but only if such loans meet reasonable un-
derwriting standards established by the Secretary.’’. 
SEC. 12. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS 
MITIGATION. 
Section 540(b)(2) of the National Housing Act (12 
U.S.C. 1735f–18(b)(2)) is amended, by adding at the end 
the following new subparagraphs: 
‘‘(C) The rates of default and foreclosure 
for the applicable collection period for mort-
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gages insured pursuant to the programs for 
mortgage insurance under paragraphs (2)(C) 
and (3) of section 203(c). 
‘‘(D) Actions taken by the Secretary dur-
ing the applicable collection period with respect 
to loss mitigation on mortgages insured pursu-
ant to section 203.’’. 
SEC. 13. INSURANCE FOR SINGLE FAMILY HOMES WITH LI-
CENSED CHILD CARE FACILITIES. 
(a) DEFINITION OF CHILD CARE FACILITY.—Section 
201 of the National Housing Act (12 U.S.C. 1707) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) The term ‘child care facility’ means a facility 
that— 
‘‘(A) has as its purpose the care of children who 
are less than 12 years of age; and 
‘‘(B) is licensed or regulated by the State in 
which it is located (or, if there is no State law pro-
viding for such licensing and regulation by the State, 
by the municipality or other political subdivision in 
which the facility is located). 
Such term does not include facilities for school-age chil-
dren primarily for use during normal school hours.’’. 
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(b) INCREASE
IN MAXIMUM MORTGAGE AMOUNT 
LIMITATION.—Paragraph (2) of section 203(b) of the Na-
tional Housing Act (12 U.S.C. 1709(b)(2)), as amended 
by the preceding provisions of this Act, is further amended 
by adding at end the following new undesignated para-
graph: 
‘‘Notwithstanding any other provision of this 
paragraph, the amount that may be insured under 
this section may be increased by up to 25 percent 
if such increase is necessary to account for the in-
creased cost of the residence due to an increased 
need of space in the residence for locating and oper-
ating a child care facility (as such term is defined 
in section 201) within the residence, but only if a 
valid license or certificate of compliance with regula-
tions described in section 201(g)(2) has been issued 
for such facility as of the date of the execution of 
the mortgage, and only if such increase in the 
amount insured is proportional to the amount of 
space of such residence that will be used for such fa-
cility.’’. 
SEC. 14. REHABILITATION LOANS. 
Subsection (k) of section 203 of the National Hous-
ing Act (12 U.S.C. 1709(k)) is amended— 
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(1) in paragraph (1), by striking ‘‘on’’ and all 
that follows through ‘‘1978’’; and 
(2) in paragraph (5)— 
(A) by striking ‘‘General Insurance Fund’’ 
the first place it appears and inserting ‘‘Mutual 
Mortgage Insurance Fund’’; and 
(B) in the second sentence, by striking the 
comma and all that follows through ‘‘General 
Insurance Fund’’. 
SEC. 15. DISCRETIONARY ACTION. 
The National Housing Act is amended— 
(1) in subsection (e) of section 202 (12 U.S.C. 
1708(e))— 
(A) in paragraph (3)(B), by striking ‘‘sec-
tion 202(e) of the National Housing Act’’ and 
inserting ‘‘this subsection’’; and 
(B) by redesignating such subsection as 
subsection (f); 
(2) by striking paragraph (4) of section 203(s) 
(12 U.S.C. 1709(s)(4)) and inserting the following 
new paragraph: 
‘‘(4) the Secretary of Agriculture;’’; and 
(3) by transferring subsection (s) of section 203 
(as amended by paragraph (2) of this section) to 
section 202, inserting such subsection after sub-
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section (d) of section 202, and redesignating such 
subsection as subsection (e). 
SEC. 16. INSURANCE OF CONDOMINIUMS AND MANUFAC-
TURED HOUSING. 
(a) IN GENERAL.—Section 234 of the National 
Housing Act (12 U.S.C. 1715y) is amended— 
(1) in subsection (c)— 
(A) in the first sentence— 
(i) by striking ‘‘and’’ before ‘‘(2)’’; 
and 
(ii) by inserting before the period at 
the end the following: ‘‘, and (3) the 
project has a blanket mortgage insured by 
the Secretary under subsection (d)’’; and 
(B) in clause (B) of the third sentence, by 
striking ‘‘thirty-five years’’ and inserting ‘‘forty 
years’’; and 
(2) in subsection (g), by striking ‘‘, except 
that’’ and all that follows and inserting a period. 
(b) DEFINITION OF MORTGAGE.—Section 201(a) of 
the National Housing Act (12 U.S.C. 1707(a)) is amend-
ed— 
(1) before ‘‘ a first mortgage’’ insert ‘‘(A)’’; 
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(2) by striking ‘‘or on a leasehold (1)’’ and in-
serting ‘‘(B) a first mortgage on a leasehold on real 
estate (i)’’; 
(3) by striking ‘‘or (2)’’ and inserting ‘‘, or 
(ii)’’; and 
(4) by inserting before the semicolon the fol-
lowing: ‘‘, or (C) a first mortgage given to secure the 
unpaid purchase price of a fee interest in, or long- 
term leasehold interest in, real estate consisting of 
a one-family unit in a multifamily project, including 
a project in which the dwelling units are attached, 
or are manufactured housing units, semi-detached, 
or detached, and an undivided interest in the com-
mon areas and facilities which serve the project’’. 
(c) DEFINITION OF REAL ESTATE.—Section 201 of 
the National Housing Act (12 U.S.C. 1707), as amended 
by the preceding provisions of this Act, is further amended 
by adding at the end the following new subsection: 
‘‘(h) The term ‘real estate’ means land and all nat-
ural resources and structures permanently affixed to the 
land, including residential buildings and stationary manu-
factured housing. The Secretary may not require, for 
treatment of any land or other property as real estate for 
purposes of this title, that such land or property be treated 
as real estate for purposes of State taxation.’’. 
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SEC. 17. MUTUAL MORTGAGE INSURANCE FUND. 
(a) IN GENERAL.—Subsection (a) of section 202 of 
the National Housing Act (12 U.S.C. 1708(a)) is amended 
to read as follows: 
‘‘(a) MUTUAL MORTGAGE INSURANCE FUND.— 
‘‘(1) ESTABLISHMENT.—Subject to the provi-
sions of the Federal Credit Reform Act of 1990, 
there is hereby created a Mutual Mortgage Insur-
ance Fund (in this title referred to as the ‘Fund’), 
which shall be used by the Secretary to carry out the 
provisions of this title with respect to mortgages in-
sured under section 203. The Secretary may enter 
into commitments to guarantee, and may guarantee, 
such insured mortgages. 
‘‘(2) LIMIT ON LOAN GUARANTEES.—The au-
thority of the Secretary to enter into commitments 
to guarantee such insured mortgages shall be effec-
tive for any fiscal year only to the extent that the 
aggregate original principal loan amount under such 
mortgages, any part of which is guaranteed, does 
not exceed the amount specified in appropriations 
Acts for such fiscal year. 
‘‘(3) FIDUCIARY
RESPONSIBILITY.—The Sec-
retary has a responsibility to ensure that the Mutual 
Mortgage Insurance Fund remains financially sound. 
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‘‘(4) 
ANNUAL
INDEPENDENT
ACTUARIAL 
STUDY.—The Secretary shall provide for an inde-
pendent actuarial study of the Fund to be conducted 
annually, which shall analyze the financial position 
of the Fund. The Secretary shall submit a report 
annually to the Congress describing the results of 
such study and assessing the financial status of the 
Fund. The report shall recommend adjustments to 
underwriting standards, program participation, or 
premiums, if necessary, to ensure that the Fund re-
mains financially sound. 
‘‘(5) QUARTERLY REPORTS.—During each fiscal 
year, the Secretary shall submit a report to the Con-
gress for each quarter, which shall specify for mort-
gages that are obligations of the Fund— 
‘‘(A) the cumulative volume of loan guar-
antee commitments that have been made during 
such fiscal year through the end of the quarter 
for which the report is submitted; 
‘‘(B) the types of loans insured, cat-
egorized by risk; 
‘‘(C) any significant changes between ac-
tual and projected claim and prepayment activ-
ity; 
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‘‘(D) projected versus actual loss rates; 
and 
‘‘(E) updated projections of the annual 
subsidy rates to ensure that increases in risk to 
the Fund are identified and mitigated by ad-
justments to underwriting standards, program 
participation, or premiums, and the financial 
soundness of the Fund is maintained. 
The first quarterly report under this paragraph shall 
be submitted on the last day of the first quarter of 
fiscal year 2008, or upon the expiration of the 90- 
day period beginning on the date of the enactment 
of the Expanding American Homeownership Act of 
2007, whichever is later. 
‘‘(6) ADJUSTMENT OF PREMIUMS.—If, pursu-
ant to the independent actuarial study of the Fund 
required under paragraph (5), the Secretary deter-
mines that the Fund is not meeting the operational 
goals established under paragraph (8) or there is a 
substantial probability that the Fund will not main-
tain its established target subsidy rate, the Secretary 
may either make programmatic adjustments under 
section 203 as necessary to reduce the risk to the 
Fund, or make appropriate premium adjustments. 
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‘‘(7) OPERATIONAL
GOALS.—The operational 
goals for the Fund are— 
‘‘(A) to charge borrowers under loans that 
are obligations of the Fund an appropriate pre-
mium for the risk that such loans pose to the 
Fund; 
‘‘(B) to minimize the default risk to the 
Fund and to homeowners; 
‘‘(C) to curtail the impact of adverse selec-
tion on the Fund; and 
‘‘(D) to meet the housing needs of the bor-
rowers that the single family mortgage insur-
ance program under this title is designed to 
serve.’’. 
(b) OBLIGATIONS OF FUND.—The National Housing 
Act is amended as follows: 
(1) 
HOMEOWNERSHIP
VOUCHER
PROGRAM 
MORTGAGES.—In 
section 
203(v) 
(12 
U.S.C. 
1709(v))— 
(A) by striking ‘‘Notwithstanding section 
202 of this title, the’’ and inserting ‘‘The’’; and 
(B) by striking ‘‘General Insurance Fund’’ 
the first place such term appears and all that 
follows and inserting ‘‘Mutual Mortgage Insur-
ance Fund.’’. 
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(2) HOME EQUITY CONVERSION MORTGAGES.— 
Section 255(i)(2)(A) of the National Housing Act 
(12 U.S.C. 1715z–20(i)(2)(A)) is amended by strik-
ing ‘‘General Insurance Fund’’ and inserting ‘‘Mu-
tual Mortgage Insurance Fund’’. 
(c) CONFORMING
AMENDMENTS.—The National 
Housing Act is amended— 
(1) in section 205 (12 U.S.C. 1711), by striking 
subsections (g) and (h); and 
(2) in section 519(e) (12 U.S.C. 1735c(e)), by 
striking ‘‘203(b)’’ and all that follows through 
‘‘203(i)’’ and inserting ‘‘203, except as determined 
by the Secretary’’. 
SEC. 18. HAWAIIAN HOME LANDS AND INDIAN RESERVA-
TIONS. 
(a) HAWAIIAN HOME LANDS.—Section 247(c) of the 
National Housing Act (12 U.S.C. 1715z–12) is amend-
ed— 
(1) by striking ‘‘General Insurance Fund estab-
lished in section 519’’ and inserting ‘‘Mutual Mort-
gage Insurance Fund’’; and 
(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
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(b) INDIAN RESERVATIONS.—Section 248(f) of the 
National Housing Act (12 U.S.C. 1715z–13) is amend-
ed— 
(1) by striking ‘‘General Insurance Fund’’ the 
first place it appears and all that follows through 
‘‘519’’ and inserting ‘‘Mutual Mortgage Insurance 
Fund’’; and 
(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
SEC. 19. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) REPEALS.—The following provisions of the Na-
tional Housing Act are repealed: 
(1) Subsection (i) of section 203 (12 U.S.C. 
1709(i)). 
(2) Subsection (o) of section 203 (12 U.S.C. 
1709(o)). 
(3) Subsection (p) of section 203 (12 U.S.C. 
1709(p)). 
(4) Subsection (q) of section 203 (12 U.S.C. 
1709(q)). 
(5) Section 222 (12 U.S.C. 1715m). 
(6) Section 237 (12 U.S.C. 1715z–2). 
(7) Section 245 (12 U.S.C. 1715z–10). 
(b) DEFINITION OF AREA.—Section 203(u)(2)(A) of 
the National Housing Act (12 U.S.C. 1709(u)(2)(A)) is 
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amended by striking ‘‘shall’’ and all that follows and in-
serting ‘‘means a metropolitan statistical area as estab-
lished by the Office of Management and Budget;’’. 
(c) DEFINITION OF STATE.—Section 201(d) of the 
National Housing Act (12 U.S.C. 1707(d)) is amended by 
striking ‘‘the Trust Territory of the Pacific Islands’’ and 
inserting ‘‘the Commonwealth of the Northern Mariana 
Islands’’. 
SEC. 20. HOME EQUITY CONVERSION MORTGAGES. 
(a) IN GENERAL.—Section 255 of the National 
Housing Act (12 U.S.C. 1715z–20) is amended— 
(1) in subsection (b)(2), insert ‘‘ ‘real estate,’ ’’ 
after ‘‘ ‘mortgagor’,’’; 
(2) in subsection (b)(4), by striking subpara-
graph (B) and inserting the following new subpara-
graph: 
‘‘(B) under a lease that has a term that 
ends no earlier than the minimum number of 
years, as specified by the Secretary, beyond the 
actuarial life expectancy of the mortgagor or co-
mortgagor, whichever is the later date.’’. 
(3) in subsection (g)— 
(A) by striking the first sentence; and 
(B) by striking ‘‘established under section 
203(b)(2)’’ and all that follows through ‘‘lo-
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cated’’ and inserting ‘‘limitation established 
under section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act for a 1-family 
residence’’; 
(4) in subsection (i)(1)(C), by striking ‘‘limita-
tions’’ and inserting ‘‘limitation’’; and 
(5) by adding at the end the following new sub-
section: 
‘‘(o) AUTHORITY
TO
INSURE
HOME
PURCHASE 
MORTGAGE.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision in this section, the Secretary may insure, 
upon application by a mortgagee, a home equity con-
version mortgage upon such terms and conditions as 
the Secretary may prescribe, when the primary pur-
pose of the home equity conversion mortgage is to 
enable an elderly mortgagor to purchase a 1- to 4- 
family dwelling in which the mortgagor will occupy 
or occupies one of the units. 
‘‘(2) LIMITATION ON PRINCIPAL OBLIGATION.— 
A home equity conversion mortgage insured pursu-
ant to paragraph (1) shall involve a principal obliga-
tion that does not exceed the dollar amount limita-
tion determined under section 305(a)(2) of the Fed-
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eral Home Loan Mortgage Corporation Act for a 
residence of the applicable size.’’. 
(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 
(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 further amended— 
(1) by redesignating subsections (k), (l), and 
(m) as subsections (l), (m), and (n), respectively; 
and 
(2) by inserting after subsection (j) the fol-
lowing new subsection: 
‘‘(k) LIMITATION ON ORIGINATION FEES.—The Sec-
retary shall establish limits on the origination fee that may 
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be charged to a mortgagor under a mortgage insured 
under this section, which limitations shall— 
‘‘(1) equal to 1.5 percent of the maximum claim 
amount of the mortgage, except that the Secretary 
may adjust the limitation under this paragraph on 
the basis of an analysis of: (A) 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 or to mort-
gage brokers; and 
‘‘(5) apply beginning upon the date that the 
maximum dollar amount limitation on the benefits of 
insurance under this section is first increased pursu-
ant to the amendments made by section 19(a)(2) of 
the Expanding American Homeownership Act of 
2007.’’. 
(d) STUDY REGARDING MORTGAGE INSURANCE PRE-
MIUMS.—The Secretary of Housing and Urban Develop-
ment shall conduct a study regarding mortgage insurance 
premiums charged under the program under section 255 
of the National Housing Act (12 U.S.C. 1715z–20) for 
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insurance of home equity conversion mortgages to analyze 
and determine the effects of reducing the amounts of such 
premiums from the amounts charged as of the date of the 
enactment of this Act on: (1) costs to mortgagors; and 
(2) the financial soundness of the program. Not later than 
the expiration of the 12-month period beginning on the 
date of the enactment of this Act, the Secretary shall sub-
mit a report to the Congress setting forth the results and 
conclusions of the study. 
SEC. 21. PARTICIPATION OF MORTGAGE BROKERS AND 
CORRESPONDENT LENDERS. 
(a) IN GENERAL.— 
(1) DEFINITIONS.— 
(A) IN GENERAL.—Section 201 of the Na-
tional Housing Act (12 U.S.C. 1707), as 
amended by the preceding provisions of this 
Act, is further amended— 
(i) by striking ‘‘As used in section 203 
of this title—’’ and inserting ‘‘As used in 
this title and for purposes of participation 
in insurance programs under this title, ex-
cept as specifically provided otherwise, the 
following definitions shall apply:’’; 
(ii) by striking subsection (b) and in-
serting the following: 
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‘‘(2) The term ‘mortgagee’ means any of the 
following entities, and its successors and assigns, to 
the extent such entity is approved by the Secretary: 
‘‘(A) QUALIFICATION BY AUDIT AND NET 
WORTH.—A lender who— 
‘‘(i) closes a mortgage in its name and 
underwrites the mortgage, services the 
mortgage, or both underwrites and services 
the mortgage; 
‘‘(ii) submits to the Secretary such fi-
nancial audits performed in accordance 
with the standards for financial audits of 
the Government Auditing Standards issued 
by the Comptroller General of the United 
States; 
‘‘(iii) meet the minimum net worth re-
quirement that the Secretary shall estab-
lish; 
‘‘(iv) is licensed, under the laws of the 
State in which the property that is subject 
to the mortgage is located, to act as a 
lender in such State; and 
‘‘(v) complies with such other require-
ments as the Secretary may establish. 
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‘‘(B) QUALIFICATION OF CORRESPONDENT 
LENDERS BY SURETY BOND.—Except as pro-
vided in subparagraph (D), a correspondent 
lender who— 
‘‘(i) closes a mortgage in its name, 
but does not underwrite and does not serv-
ice the mortgage; 
‘‘(ii) is licensed, under the laws of the 
State in which the property that is subject 
to the mortgage is located, to act as a cor-
respondent lender in such State; 
‘‘(iii) posts a surety bond, in lieu of 
any requirement to provide audited finan-
cial statements or meet a minimum net 
worth requirement, that— 
‘‘(I) is in a form satisfactory to 
the Secretary; 
‘‘(II) is in an aggregate amount, 
to be determined by the Secretary 
based on the aggregate principal 
amount of single-family mortgages in-
sured under this title that are placed 
in a calendar year, which shall not be 
less than $50,000 or more than 
$100,000, as such amount is adjusted 
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annually by the Secretary (as deter-
mined by the Secretary) by the 
change for such year in the Consumer 
Price Index for All Urban Consumers 
published monthly by the Bureau of 
Labor Statistics of the Department of 
Labor; 
‘‘(III) guarantees payment of any 
liability of the correspondent lender 
arising from its participation in the 
program, up to the penal sum of the 
surety bond; without regard to the 
number of years the bond remains in 
effect, the number of claims or claim-
ants, and the number of premiums 
paid, in no event shall the aggregate 
liability of the surety exceed the penal 
sum of the bond; and 
‘‘(IV) may be cancelled by the 
surety as to future liability by giving 
30 days notice in writing to the Sec-
retary, except that any such cancella-
tion shall not alter the liability of the 
surety 
for 
actions 
of 
the 
cor-
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respondent lender prior to the effec-
tive date of the cancellation; and 
‘‘(iv) complies with such other re-
quirements as the Secretary may establish, 
except that the Secretary shall not require 
any minimum net worth or certified finan-
cial statements. 
‘‘(C) QUALIFICATION OF BROKERS BY SUR-
ETY
BOND.—Except as provided in subpara-
graph (D), a mortgage broker who— 
‘‘(i) closes the mortgage in the name 
of the lender, and does not underwrite and 
does not service the mortgage; 
‘‘(ii) is licensed, under the laws of the 
State in which the property that is subject 
to the mortgage is located, to act as a 
mortgage broker in such State; 
‘‘(iii) posts a surety bond in accord-
ance with the requirements of subpara-
graph (B)(ii); and 
‘‘(iv) complies with such other re-
quirements as the Secretary may establish, 
except that the Secretary shall not require 
any minimum net worth or certified finan-
cial statements. 
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‘‘(D) CONDITIONS FOR CONTINUED APPLI-
CABILITY.—(i) Subparagraphs (B) and (C) 
shall continue to apply after the expiration of 
the 5-year period beginning on the date of the 
enactment of the Expanding American Home-
ownership Act of 2007 only if, after the expira-
tion of the 4-year period beginning upon such 
date of enactment and taking into consideration 
the report submitted in accordance with section 
19(b) of such Act, the Secretary— 
‘‘(I) makes a determination that such 
subparagraphs provide protection to mort-
gage insurance funds for mortgages in-
sured under this title that are comparable 
to the protection provided by the require-
ments for mortgagees under this title as in 
effect immediately before the enactment of 
such Act; and 
‘‘(II) publishes in the Federal Reg-
ister a notice of such determination and an 
order extending the applicability of such 
subparagraphs. 
‘‘(ii) If, taking into consideration such re-
port, the Secretary makes a determination after 
the expiration of such 4-year period that sub-
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paragraphs (B) and (C) do not provide protec-
tion as referred to in clause (i) of this subpara-
graph, the Secretary may, by order published in 
the Federal Register, provide for the participa-
tion, after the expiration of the 5-year period 
referred to in clause (i), of correspondent lend-
ers and mortgage brokers as mortgagees in the 
insurance programs under this title in accord-
ance with subparagraphs (B) and (C) as modi-
fied by the Secretary as the Secretary considers 
appropriate to provide such protection. 
‘‘(E) ADDITIONAL MORTGAGE BROKER RE-
QUIREMENTS.— 
‘‘(i) In addition to the requirements 
under subparagraphs (A) and (C) and to 
duties imposed under other statutes or 
common law, to be eligible as a mortgagee 
under this section, a broker shall— 
‘‘(I) safeguard and account for 
any money handled for the borrower; 
‘‘(II) follow reasonable and lawful 
instructions from the borrower; and 
‘‘(III) act with reasonable skill, 
care, and diligence. 
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‘‘(ii) For purposes of this subpara-
graph, a loan correspondent shall be con-
sidered to be a mortgage broker. 
‘‘(iii) The duties and standards of 
care created in this subparagraph shall not 
be waived or modified. 
‘‘(iv) Any broker found by the Sec-
retary to have violated the requirements of 
this subparagraph may not originate mort-
gage loans insured under this title. 
‘‘(3) The term ‘mortgagor’ includes the original 
borrower under a mortgage and the successors and 
assigns of the original borrower.’’; and 
(iii) by redesignating subsections (a), 
(c), (d), (e), (f), (g), and (h) as paragraphs 
(1), (4), (5), (6), (7), (8), and (9), respec-
tively, and indenting such paragraphs two 
ems so as to align the left margins of such 
paragraphs with the left margins of para-
graphs (2) and (3) (as added by clause (ii) 
of this subparagraph). 
(B) 
MORTGAGEE
REVIEW.—Section 
202(c)(7) of the National Housing Act (12 
U.S.C. 1708(c)(7)) is amended— 
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(i) in subparagraph (A), by inserting 
‘‘, as defined in section 201,’’ after ‘‘mort-
gagee’’; 
(ii) by striking subparagraph (B); and 
(iii) by redesignating subparagraphs 
(C) and (D) as subparagraphs (B) and 
(C), respectively. 
(C) MULTIFAMILY
RENTAL
HOUSING
IN-
SURANCE.—Section 207(a)(2) of the National 
Housing Act (12 U.S.C. 1713(a)(2)) is amend-
ed by striking ‘‘means the original lender under 
a mortgage, and its successors and assigns, 
and’’ and inserting ‘‘has the meaning given 
such term in section 201, except that such term 
also’’. 
(D) WAR
HOUSING
INSURANCE.—Section 
601(b) of the National Housing Act (12 U.S.C. 
1736(b)) is amended by striking ‘‘includes the 
original lender under a mortgage, and his suc-
cessors and assigns approved by the Secretary’’ 
and inserting ‘‘has the meaning given such 
term in section 201’’. 
(E) ARMED SERVICES HOUSING MORTGAGE 
INSURANCE.—Section 801(b) of the National 
Housing Act (12 U.S.C. 1748(b)) is amended 
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by striking ‘‘includes the original lender under 
a mortgage, and his successors and assigns ap-
proved by the Secretary’’ and inserting ‘‘has the 
meaning given such term in section 201’’. 
(F) GROUP
PRACTICE
FACILITIES
MORT-
GAGE INSURANCE.—Section 1106(8) of the Na-
tional Housing Act (12 U.S.C. 1749aaa–5(8)) 
is amended by striking ‘‘means the original 
lender under a mortgage, and his or its succes-
sors and assigns, and’’ and inserting ‘‘has the 
meaning given such term in section 201, except 
that such term also’’. 
(2) ELIGIBILITY FOR INSURANCE.— 
(A) TITLE
I.—Paragraph (1) of section 
8(b) of the National Housing Act (12 U.S.C. 
1706c(b)(1)) is amended— 
(i) by striking ‘‘, and be held by,’’; 
and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(B) SINGLE FAMILY HOUSING MORTGAGE 
INSURANCE.—Paragraph (1) of section 203(b) 
of the National Housing Act (12 U.S.C. 
1709(b)(1)) is amended— 
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