(B) result in efficiencies and lower costs for 
lenders participating in the program, allowing 
them to better use the FHA products in extend-
ing homeownership opportunities to higher credit 
risk or lower-income families, in a sound man-
ner. 
(5) The Mutual Mortgage Insurance Fund oper-
ates without cost to the taxpayers and generates reve-
nues for the Federal Government. 
(b) SENSE OF CONGRESS.—It is the sense of the Con-
gress that— 
(1) the Secretary of Housing and Urban Devel-
opment should use a portion of the funds received 
from premiums paid for FHA single family housing 
mortgage insurance that are in excess of the amounts 
paid out in claims to substantially increase the fund-
ing for technology used in such FHA program; 
(2) the goal of this investment should be to bring 
the technology used in such FHA program to the level 
and sophistication of the technology used in the con-
ventional mortgage lending market, or to exceed such 
level; and 
(3) the Secretary of Housing and Urban Devel-
opment should report to the Congress not later than 
180 days after the date of the enactment of this Act 
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regarding the progress the Department is making to-
ward such goal and if progress is not sufficient, the 
resources needed to make greater progress. 
SEC. 26. MULTIFAMILY HOUSING MORTGAGE LIMITS IN 
HIGH COST AREAS. 
The National Housing Act is amended— 
(1) 
in 
sections 
207(c)(3), 
213(b)(2)(B)(i), 
221(d)(3)(ii)(II), 221(d)(4)(ii)(II), 231(c)(2)(B), and 
234(e)(3)(B) (12 U.S.C. 1713(c)(3), 1715e(b)(2)(B)(i), 
1715l(d)(3)(ii)(II), 
1715l(d)(4)(ii)(II), 
1715v(c)(2)(B), and 1715y(e)(3)(B))— 
(A) by striking ‘‘140 percent’’ each place 
such term appears and inserting ‘‘170 percent’’; 
and 
(B) by striking ‘‘170 percent in high cost 
areas’’ each place such term appears and insert-
ing ‘‘215 percent in high cost areas’’; and 
(2) in section 220(d)(3)(B)(iii)(III) (12 U.S.C. 
1715k(d)(3)(B)(iii)(III)) by striking ‘‘206A’’ and all 
that follows through ‘‘project-by-project basis’’ and in-
serting the following: ‘‘206A of this Act) by not to ex-
ceed 170 percent in any geographical area where the 
Secretary finds that cost levels so require and by not 
to exceed 170 percent, or 215 percent in high cost 
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areas, where the Secretary determines it necessary on 
a project-by-project basis’’. 
SEC. 27. VALUATION OF MULTIFAMILY PROPERTIES IN 
NONCOMPETITIVE SALES BY HUD TO STATES 
AND LOCALITIES. 
Subtitle A of title II of the Deficit Reduction Act of 
2005 (Public Law 109–171; 120 Stat. 7) is amended by 
adding at the end the following new section: 
‘‘SEC. 2004. VALUATION OF MULTIFAMILY PROPERTIES IN 
NONCOMPETITIVE SALES BY HUD TO STATES 
AND LOCALITIES. 
‘‘Notwithstanding any other provision of law and with 
respect to any fiscal year, in determining the market value 
of any multifamily real property or multifamily loan for 
any noncompetitive sale to a State or local government enti-
ty, the Secretary shall consider, but not be limited to, indus-
try standard appraisal practices, including the cost of re-
pairs needed to bring the property at least to minimum 
State and local code standards and of maintaining the ex-
isting affordability restrictions imposed by the Secretary on 
the multifamily real property or multifamily loan.’’. 
SEC. 28. CLARIFICATION OF DISPOSITION OF CERTAIN 
PROPERTIES. 
Notwithstanding any other provision of law, subtitle 
A of title II of the Deficit Reduction Act of 2005 (12 U.S.C. 
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1701z–11 note) and the amendments made by such title 
shall not apply to any transaction regarding a multifamily 
real property for which— 
(1) the Secretary of Housing and Urban Devel-
opment has received, before the date of the enactment 
of such Act, written expressions of interest in pur-
chasing the property from both a city government and 
the housing commission of such city; 
(2) after such receipt, the Secretary acquires title 
to the property at a foreclosure sale; and 
(3) such city government and housing commis-
sion have resolved a previous disagreement with re-
spect to the disposition of the property. 
SEC. 29. USE OF FHA SAVINGS FOR COSTS OF MORTGAGE 
INSURANCE, 
HOUSING 
COUNSELING, 
FHA 
TECHNOLOGIES, PROCEDURES, AND PROC-
ESSES, 
AND 
FOR 
AFFORDABLE 
HOUSING 
GRANT FUND, AND STUDY. 
(a) IN GENERAL.—Subject to subsection (c), there is 
authorized to be appropriated for each fiscal year an 
amount equal to the net increase for such fiscal year in, 
except as provided in subsection (b), the negative credit sub-
sidy for the mortgage insurance programs under title II of 
the National Housing Act resulting from this Act and the 
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amendments made by this Act, for the following purposes 
in the following amounts: 
(1) SINGLE FAMILY HOUSING MORTGAGE INSUR-
ANCE.—For each fiscal year, for costs (as such term 
is defined in section 502 of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661a)) of mortgage insurance 
provided pursuant to section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)), the additional 
amount (not including any costs of such mortgage in-
surance resulting from this Act or the amendments 
made by this Act), if any, necessary to ensure that the 
credit subsidy cost of such mortgage insurance for 
such fiscal year is $0. 
(2) HOUSING COUNSELING.—For each of fiscal 
years 2008 through 2012, the amount needed to in-
crease funding, for the housing counseling program 
under section 106 of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x), in connection 
with homebuyers and homeowners with mortgages in-
sured under title II of the National Housing Act, 
from the amount appropriated for the preceding fiscal 
year to $100,000,000. 
(3) MORTGAGE INSURANCE TECHNOLOGY, PROCE-
DURES, PROCESSES, PROGRAM
PERFORMANCE, AND 
SALARIES.—For each of fiscal years 2008 through 
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2012, $25,000,000 for increasing funding for the pur-
pose of improving technology, procedures, processes, 
and program performance, and salaries in connection 
with the mortgage insurance programs under title II 
of the National Housing Act. 
(4) AFFORDABLE HOUSING FUND.—For each fis-
cal year, for an affordable housing fund available for 
use only for grants to provide affordable rental hous-
ing and affordable homeownership opportunities for 
low-income families, the amount remaining under 
this section after amounts are made available for such 
fiscal year in accordance with paragraphs (1), (2), 
and (3). 
(b) EXCLUSION OF EARNINGS FROM THE SINGLE FAM-
ILY MORTGAGE INSURANCE PROGRAM.—With respect to a 
fiscal year, the negative credit subsidy determined under 
subsection (a) shall not include the negative credit subsidy 
cost for such fiscal year, if any, for mortgage insurance pro-
vided pursuant to section 203(b) of the National Housing 
Act. 
(c) CERTIFICATION.—Subsection (a) shall not be effec-
tive for a fiscal year unless the Secretary of Housing and 
Urban Development has, by rule making in accordance with 
section 553 of title 5, United States Code (notwithstanding 
subsections (a)(2), (b)(B), and (d)(3) of such section), made 
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a determination that premiums being, or to be, charged 
during such fiscal year for mortgage insurance under title 
II of the National Housing Act are established at the min-
imum amount sufficient to comply with the requirements 
of section 205(f) of such Act (relating to required capital 
ratio for the Mutual Mortgage Insurance Fund) and ensure 
the safety and soundness of the other mortgage insurance 
funds under such Act, and any negative credit subsidy for 
such fiscal year resulting from such mortgage insurance 
programs adequately ensures the efficient delivery and 
availability of such programs. 
(d) STUDY AND REPORT.—The Secretary of Housing 
and Urban Development shall conduct a study to obtain 
recommendations from participants in the private residen-
tial mortgage lending business and the secondary market 
for such mortgages on how best to update and upgrade pro-
cedures, processes, and technologies for the mortgage insur-
ance programs under title II of the National Housing Act 
so that the policies and procedures for originating, insur-
ing, and servicing of such mortgages conform with those 
customarily used by secondary market purchasers of resi-
dential mortgage loans. Not later than the expiration of the 
12-month period beginning on the date of the enactment of 
this Act, the Secretary shall submit a report to the Congress 
describing the progress made and to be made toward updat-
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ing and upgrading such procedures, processes, and tech-
nology, and providing appropriate staffing for such mort-
gage insurance programs. 
SEC. 30. LIMITATION ON MORTGAGE INSURANCE PREMIUM 
INCREASES. 
Notwithstanding any other provision of law, including 
any provision of this Act and any amendment made by 
this Act— 
(1) the premiums charged for mortgage insur-
ance under any program under the National Housing 
Act may not be increased above the premium amounts 
in effect under such program on October 1, 2006, un-
less the Secretary of Housing and Urban Development 
determines that, absent such increase, insurance of 
additional mortgages under such program would, 
under the Federal Credit Reform Act of 1990, require 
the appropriation of new budget authority to cover 
the costs (as such term is defined in section 502 of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 661a) 
of such insurance; and 
(2) a premium increase pursuant to paragraph 
(1) may be made only by rule making in accordance 
with the procedures under section 553 of title 5, 
United States Code (notwithstanding subsections 
(a)(2), (b)(B), and (d)(3) of such section). 
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SEC. 31. SAVINGS PROVISION. 
Any mortgage insured under title II of the National 
Housing Act before the date of enactment of this title shall 
continue to be governed by the laws, regulations, orders, and 
terms and conditions to which it was subject on the day 
before the date of the enactment of this Act. 
SEC. 32. IMPLEMENTATION. 
Except as provided in section 23(b), the Secretary of 
Housing and Urban Development shall by notice establish 
any additional requirements that may be necessary to im-
mediately carry out the provisions of this Act. The notice 
shall take effect upon issuance. 
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Union Calendar No. 133 
110TH CONGRESS 
1ST SESSION 
H. R. 1852 
[Report No. 110–217] 
A BILL 
To modernize and update the National Housing Act 
and enable the Federal Housing Administration 
to use risk-based pricing to more effectively reach 
underserved borrowers, and for other purposes. 
JUNE 28, 2007 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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