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‘‘(I) appropriate continuing fi-
nancial and project reporting, record 
retention, and audit requirements for 
the duration of the grant to the re-
cipient to ensure compliance with the 
limitations and requirements of this 
section and the regulations under this 
section; and 
‘‘(II) any other requirements that 
the Director determines are necessary 
to ensure appropriate grant adminis-
tration and compliance. 
‘‘(B) MISUSE OF FUNDS.—
‘‘(i) 
REIMBURSEMENT
REQUIRE-
MENT.—If any recipient of assistance from 
affordable housing fund grant amounts of 
a grantee is determined, in accordance 
with clause (ii), to have used any such 
amounts in a manner that is materially in 
violation of this section, the regulations 
issued under this section, or any require-
ments or conditions under which such 
amounts were provided, the grantee shall 
require that, within 12 months after the 
determination of such misuse, the recipient
156
shall reimburse the grantee for such mis-
used amounts and return to the grantee 
any amounts from the affordable housing 
fund grant amounts of the grantee that re-
main unused or uncommitted for use. The 
remedies under this clause are in addition 
to any other remedies that may be avail-
able under law. 
‘‘(ii) DETERMINATION.—A determina-
tion is made in accordance with this clause 
if the determination is—
‘‘(I) made by the Director; or 
‘‘(II)(aa) made by the grantee; 
‘‘(bb) the grantee provides notifi-
cation of the determination to the Di-
rector for review, in the discretion of 
the Director, of the determination; 
and 
‘‘(cc) the Director does not sub-
sequently reverse the determination. 
‘‘(2) GRANTEES.—
‘‘(A) REPORT.—
‘‘(i) IN GENERAL.—The Director shall 
require each grantee receiving affordable 
housing fund grant amounts for a year to
157
submit a report, for such year, to the Di-
rector that—
‘‘(I) describes the activities fund-
ed under this section during such year 
with the affordable housing fund 
grant amounts of the grantee; and 
‘‘(II) the manner in which the 
grantee complied during such year 
with the allocation plan established 
pursuant to subsection (e) for the 
grantee. 
‘‘(ii) PUBLIC AVAILABILITY.—The Di-
rector shall make such reports pursuant to 
this subparagraph publicly available. 
‘‘(B) MISUSE OF FUNDS.—If the Director 
determines, after reasonable notice and oppor-
tunity for hearing, that a grantee has failed to 
comply substantially with any provision of this 
section and until the Director is satisfied that 
there is no longer any such failure to comply, 
the Director shall—
‘‘(i) reduce the amount of assistance 
under this section to the grantee by an 
amount equal to the amount affordable
158
housing fund grant amounts which were 
not used in accordance with this section; 
‘‘(ii) require the grantee to repay the 
Director an amount equal to the amount of 
the amount affordable housing fund grant 
amounts which were not used in accord-
ance with this section; 
‘‘(iii) limit the availability of assist-
ance under this section to the grantee to 
activities or recipients not affected by such 
failure to comply; or 
‘‘(iv) terminate any assistance under 
this section to the grantee. 
‘‘(k) CAPITAL REQUIREMENTS.—The utilization or 
commitment of amounts from the affordable housing fund 
shall not be subject to the risk-based capital requirements 
established pursuant to section 1361(a). 
‘‘(l) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) AFFORDABLE
HOUSING
FUND
GRANT 
AMOUNTS.—The term ‘affordable housing fund 
grant amounts’ means amounts from the affordable 
housing fund established under subsection (a) that 
are provided to a grantee pursuant to subsection 
(d)(3).
159
‘‘(2) GRANTEE.—The term ‘grantee’ means—
‘‘(A) with respect to 2007, the Louisiana 
Housing Finance Agency and the Mississippi 
Development Authority; and 
‘‘(B) with respect to the years referred to 
in subsection (b)(1), other than 2007, each 
State (as such term is defined in section 1303) 
and each federally recognized Indian tribe. 
‘‘(3) RECIPIENT.—The term ‘recipient’ means 
an entity meeting the requirements under subsection 
(h) that receives assistance from a grantee from af-
fordable housing fund grant amounts of the grantee. 
‘‘(4) TOTAL MORTGAGE PORTFOLIO.—The term 
‘total mortgage portfolio’ means, with respect to a 
year, the sum, for all mortgages outstanding during 
that year in any form, including whole loans, mort-
gage-backed securities, participation certificates, or 
other structured securities backed by mortgages, of 
the dollar amount of the unpaid outstanding prin-
cipal balances under such mortgages. Such term in-
cludes all such mortgages or securitized obligations, 
whether retained in portfolio, or sold in any form. 
The Director is authorized to promulgate rules fur-
ther defining such term as necessary to implement 
this section and to address market developments.
160
‘‘(5) VERY-LOW
INCOME
FAMILY.—The term 
‘very low-income family’ has the meaning given such 
term in section 1303, except that such term includes 
any family that resides in a rural area that has an 
income that does not exceed the poverty line (as 
such term is defined in section 673(2) of the Omni-
bus Budget Reconciliation Act of 1981 (42 U.S.C. 
9902(2)), including any revision required by such 
section) applicable to a family of the size involved. 
‘‘(m) REGULATIONS.—
‘‘(1) IN GENERAL.—The Director, in consulta-
tion with the Secretary of Housing and Urban De-
velopment, shall issue regulations to carry out this 
section. 
‘‘(2) REQUIRED
CONTENTS.—The regulations 
issued under this subsection shall include—
‘‘(A) a requirement that the Director en-
sure that the program of each grantee for use 
of affordable housing fund grant amounts of 
the grantee is audited not less than annually to 
ensure compliance with this section; 
‘‘(B) authority for the Director to audit, 
provide for an audit, or otherwise verify a 
grantee’s activities, to ensure compliance with 
this section;
161
‘‘(C) requirements for a process for appli-
cation to, and selection by, each grantee for ac-
tivities meeting the grantee’s priority housing 
needs to be funded with affordable housing 
fund grant amounts of the grantee, which shall 
provide for priority in funding to be based 
upon—
‘‘(i) greatest impact; 
‘‘(ii) geographic diversity; 
‘‘(iii) ability to obligate amounts and 
undertake activities so funded in a timely 
manner; 
‘‘(iv) in the case of rental housing 
projects under subsection (g)(1), the extent 
to which rents for units in the project 
funded are affordable, especially for ex-
tremely low-income families; 
‘‘(v) in the case of rental housing 
projects under subsection (g)(1), the extent 
of the duration for which such rents will 
remain affordable; 
‘‘(vi) the extent to which the applica-
tion makes use of other funding sources; 
and
162
‘‘(vii) the merits of an applicant’s pro-
posed eligible activity; 
‘‘(D) requirements to ensure that amounts 
provided to a grantee from the affordable hous-
ing fund that are used for rental housing under 
subsection (g)(1) are used only for the benefit 
of extremely low- and very-low income families; 
‘‘(E) limitations on public infrastructure 
development activities that are eligible pursuant 
to subsection (g)(3) for funding with affordable 
housing fund grant amounts and requirements 
for the connection between such activities and 
housing activities funded under paragraph (1) 
or (2) of subsection (g); and 
‘‘(F) requirements and standards for es-
tablishment, by grantees (including the grantees 
for 2007 pursuant to subsection (l)(2)(A)), of 
performance goals, benchmarks, and timetables 
for the production, preservation, and rehabilita-
tion of affordable rental and homeownership 
housing with affordable housing fund grant 
amounts. 
‘‘(n) ENFORCEMENT OF REQUIREMENTS ON ENTER-
PRISE.—Compliance by the enterprises with the require-
ments under this section shall be enforceable under sub-
163
part C. Any reference in such subpart to this part or to 
an order, rule, or regulation under this part specifically 
includes this section and any order, rule, or regulation 
under this section. 
‘‘(o) AFFORDABLE
HOUSING
TRUST
FUND.—If, 
after the enactment of this Act, in any year, there is en-
acted any provision of Federal law establishing an afford-
able housing trust fund other than under this title for use 
only for grants to provide affordable rental housing and 
affordable homeownership opportunities, and the subse-
quent year is a year referred to in subsection (b)(1), the 
Director shall in such subsequent year and any remaining 
years referred to in subsection (b)(1) transfer to such af-
fordable housing trust fund the aggregate amount allo-
cated pursuant to subsection (b) in such year to the af-
fordable housing fund under this section, less any amounts 
used pursuant to subsection (i)(1). For such subsequent 
and remaining years, the provisions of subsections (c) and 
(d) shall not apply. Notwithstanding any other provision 
of law, assistance provided using amounts transferred to 
such affordable housing trust fund pursuant to this sub-
section may not be used for any of the activities specified 
in clauses (i) through (vi) of subsection (i)(6). Nothing 
in this subsection shall be construed to alter the terms
164
and conditions of the affordable housing fund under this 
section or to extend the life of such fund. 
‘‘(p) 
FUNDING
ACCOUNTABILITY
AND
TRANS-
PARENCY.—Any grant under this section to a grantee 
from the affordable housing fund established under sub-
section (a), any assistance provided to a recipient by a 
grantee from affordable housing fund grant amounts, and 
any grant, award, or other assistance from an affordable 
housing trust fund referred to in subsection (o) shall be 
considered a Federal award for purposes of the Federal 
Funding Accountability and Transparency Act of 2006 
(31 U.S.C. 6101 note). Upon the request of the Director 
of the Office of Management and Budget, the Director of 
the Federal Housing Finance Agency shall obtain and pro-
vide such information regarding any such grants, assist-
ance, and awards as the Director of the Office of Manage-
ment and Budget considers necessary to comply with the 
requirements of such Act, as applicable pursuant to the 
preceding sentence.’’. 
(b) TIMELY
ESTABLISHMENT
OF
AFFORDABLE 
HOUSING NEEDS FORMULA.—
(1) IN GENERAL.—The Secretary of Housing 
and Urban Development shall, not later than the ef-
fective date under section 185 of this Act, issue the 
regulations establishing the affordable housing needs
165
formulas in accordance with the provisions of section 
1337(c)(2) of the Housing and Community Develop-
ment Act of 1992, as such section is amended by 
subsection (a) of this section. 
(2) EFFECTIVE
DATE.—This subsection shall 
take effect on the date of the enactment of this Act. 
(c) REFCORP PAYMENTS.—Section 21B(f)(2) of 
the Federal Home Loan Bank Act (12 U.S.C. 
1441b(f)(2)) is amended—
(1) in subparagraph (E), by striking ‘‘and (D)’’ 
and inserting ‘‘(D), and (E)’’; 
(2) by redesignating subparagraph (E) as sub-
paragraph (F); and 
(3) by inserting after subparagraph (D) the fol-
lowing new subparagraph: 
‘‘(E) PAYMENTS
BY
FANNIE
MAE
AND 
FREDDIE
MAC.—To 
the 
extent 
that 
the 
amounts available pursuant to subparagraphs 
(A), (B), (C), and (D) are insufficient to cover 
the amount of interest payments, each enter-
prise (as such term is defined in section 1303 
of the Housing and Community Development 
Act of 1992 (42 U.S.C. 4502)) shall transfer to 
the Funding Corporation in each calendar year 
the amounts allocated for use under this sub-
166
paragraph pursuant to section 1337(i)(1) of 
such Act.’’. 
(d) GAO REPORT.—The Comptroller General shall 
conduct a study to determine the effects that the afford-
able housing fund established under section 1337 of the 
Housing and Community Development Act of 1992, as 
added by the amendment made by subsection (a) of this 
section, will have on the availability and affordability of 
credit for homebuyers, including the effects on such credit 
of the requirement under such section 1337(b) that the 
Federal National Mortgage Association and Federal Home 
Loan Mortgage Corporation make allocations of amounts 
to such fund based on the average total mortgage port-
folios, and the extent to which the costs of such allocation 
requirement will be borne by such entities or will be passed 
on to homebuyers. Not later than the expiration of the 
12-month period beginning on the date of the enactment 
of this Act, the Comptroller General shall submit a report 
to the Congress setting forth the results and conclusions 
of such study. This subsection shall take effect on the date 
of the enactment of this Act. 
SEC. 141. CONSISTENCY WITH MISSION. 
Subpart B of part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4561 et seq.) is amended by adding after section
167
1337, as added by section 139 of this Act, the following 
new section: 
‘‘SEC. 1338. CONSISTENCY WITH MISSION. 
‘‘This subpart may not be construed to authorize an 
enterprise to engage in any program or activity that con-
travenes or is inconsistent with the Federal National 
Mortgage Association Charter Act or the Federal Home 
Loan Mortgage Corporation Act.’’. 
SEC. 142. ENFORCEMENT. 
(a) 
CEASE-AND-DESIST
PROCEEDINGS.—Section 
1341 of the Housing and Community Development Act 
of 1992 (12 U.S.C. 4581) is amended—
(1) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) GROUNDS FOR ISSUANCE.—The Director may 
issue and serve a notice of charges under this section upon 
an enterprise if the Director determines—
‘‘(1) the enterprise has failed to meet any hous-
ing goal established under subpart B, following a 
written notice and determination of such failure in 
accordance with section 1336; 
‘‘(2) the enterprise has failed to submit a report 
under section 1314, following a notice of such fail-
ure, an opportunity for comment by the enterprise, 
and a final determination by the Director;
168
‘‘(3) the enterprise has failed to submit the in-
formation required under subsection (m) or (n) of 
section 309 of the Federal National Mortgage Asso-
ciation Charter Act, or subsection (e) or (f) of sec-
tion 307 of the Federal Home Loan Mortgage Cor-
poration Act; 
‘‘(4) the enterprise has violated any provision of 
this part or any order, rule or regulation under this 
part; 
‘‘(5) the enterprise has failed to submit a hous-
ing plan that complies with section 1336(c) within 
the applicable period; or 
‘‘(6) the enterprise has failed to comply with a 
housing plan under section 1336(c).’’; 
(2) in subsection (b)(2), by striking ‘‘requiring 
the enterprise to’’ and all that follows through the 
end of the paragraph and inserting the following: 
‘‘requiring the enterprise to—
‘‘(A) comply with the goal or goals; 
‘‘(B) submit a report under section 1314; 
‘‘(C) comply with any provision this part 
or any order, rule or regulation under such 
part; 
‘‘(D) submit a housing plan in compliance 
with section 1336(c);
169
‘‘(E) comply with a housing plan submitted 
under section 1336(c); or 
‘‘(F) provide the information required 
under subsection (m) or (n) of section 309 of 
the Federal National Mortgage Association 
Charter Act or subsection (e) or (f) of section 
307 of the Federal Home Loan Mortgage Cor-
poration Act, as applicable.’’; 
(3) in subsection (c), by inserting ‘‘date of the’’ 
before ‘‘service of the order’’; and 
(4) by striking subsection (d). 
(b) AUTHORITY OF DIRECTOR TO ENFORCE NO-
TICES AND ORDERS.—Section 1344 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4584) 
is amended by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) ENFORCEMENT.—The Director may, in the dis-
cretion of the Director, apply to the United States District 
Court for the District of Columbia, or the United States 
district court within the jurisdiction of which the head-
quarters of the enterprise is located, for the enforcement 
of any effective and outstanding notice or order issued 
under section 1341 or 1345, or request that the Attorney 
General of the United States bring such an action. Such
170
court shall have jurisdiction and power to order and re-
quire compliance with such notice or order.’’. 
(c) CIVIL MONEY PENALTIES.—Section 1345 of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4585) is amended—
(1) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) AUTHORITY.—The Director may impose a civil 
money penalty, in accordance with the provisions of this 
section, on any enterprise that has failed to—
‘‘(1) meet any housing goal established under 
subpart B, following a written notice and determina-
tion of such failure in accordance with section 
1336(b); 
‘‘(2) submit a report under section 1314, fol-
lowing a notice of such failure, an opportunity for 
comment by the enterprise, and a final determina-
tion by the Director; 
‘‘(3) submit the information required under 
subsection (m) or (n) of section 309 of the Federal 
National Mortgage Association Charter Act, or sub-
section (e) or (f) of section 307 of the Federal Home 
Loan Mortgage Corporation Act; 
‘‘(4) comply with any provision of this part or 
any order, rule or regulation under this part;