‘‘(ii) any person that is a victim of do-
mestic violence; or 
‘‘(iii) any family that is offering such 
property for sale. 
‘‘(2) NET FAMILY ASSETS.— 
‘‘(A) IN
GENERAL.—For purposes of this 
subsection, the term ‘net family assets’ means, 
for all members of the household, the net cash 
value of all assets after deducting reasonable 
costs that would be incurred in disposing of real 
property, savings, stocks, bonds, and other forms 
of capital investment. Such term does not in-
clude interests in Indian trust land, equity in 
property for which the family is receiving assist-
ance under subsection (y) or (o)(12) of section 8, 
equity accounts in homeownership programs of 
the Department of Housing and Urban Develop-
ment, or Family Self Sufficiency accounts. 
‘‘(B) EXCLUSIONS.—Such term does not in-
clude— 
‘‘(i) the value of personal property, ex-
cept for items of personal property of sig-
nificant value, as the Secretary may estab-
lish or the public housing agency may de-
termine; 
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‘‘(ii) the value of any retirement ac-
count; 
‘‘(iii) real property for which the fam-
ily does not have the effective legal author-
ity necessary to sell such property; 
‘‘(iv) any amounts recovered in any 
civil action or settlement based on a claim 
of malpractice, negligence, or other breach of 
duty owed to a member of the family and 
arising out of law, that resulted in a mem-
ber of the family being disabled; 
‘‘(v) the value of any Coverdell edu-
cation savings account under section 530 of 
the Internal Revenue Code of 1986 or any 
qualified tuition program under section 529 
of such Code; and 
‘‘(vi) such other exclusions as the Sec-
retary may establish. 
‘‘(C) TRUST FUNDS.—In cases in which a 
trust fund has been established and the trust is 
not revocable by, or under the control of, any 
member of the family or household, the value of 
the trust fund shall not be considered an asset of 
a family if the fund continues to be held in trust. 
Any income distributed from the trust fund shall 
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be considered income for purposes of section 3(b) 
and any calculations of annual family income, 
except in the case of medical expenses for a 
minor. 
‘‘(3) SELF-CERTIFICATION.— 
‘‘(A) NET FAMILY ASSETS.—A public hous-
ing agency or owner may determine the net as-
sets of a family, for purposes of this section, 
based on a certification by the family that the 
net assets of such family do not exceed $50,000, 
as such amount is adjusted annually by apply-
ing an inflationary factor as the Secretary con-
siders appropriate. 
‘‘(B) NO CURRENT REAL PROPERTY OWNER-
SHIP.—A public housing agency or owner may 
determine compliance with paragraph (1)(B) 
based on a certification by the family that such 
family does not have any current ownership in-
terest in any real property at the time the agen-
cy or owner reviews the family’s income. 
‘‘(C) STANDARDIZED
FORMS.—The Sec-
retary may develop standardized forms for the 
certifications referred to in subparagraphs (A) 
and (B). 
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‘‘(4) COMPLIANCE FOR PUBLIC HOUSING DWELL-
ING UNITS.—When recertifying family income with 
respect to families residing in public housing dwelling 
units, a public housing agency may, in the discretion 
of the agency and only pursuant to a policy that is 
set forth in the public housing agency plan under sec-
tion 5A for the agency, choose not to enforce the limi-
tation under paragraph (1). 
‘‘(5) ENFORCEMENT.—When recertifying the in-
come of a family residing in a dwelling unit assisted 
under this Act, a public housing agency or owner 
may choose not to enforce the limitation under para-
graph (1) or may establish exceptions to such limita-
tion based on eligibility criteria, but only pursuant 
to a policy that is set forth in the public housing 
agency plan under section 5A for the agency or under 
a policy adopted by the owner. Eligibility criteria for 
establishing exceptions may provide for separate 
treatment based on family type and may be based on 
different factors, such as age, disability, income, the 
ability of the family to find suitable alternative hous-
ing, and whether supportive services are being pro-
vided. 
‘‘(6) AUTHORITY TO DELAY EVICTIONS.—In the 
case of a family residing in a dwelling unit assisted 
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under this Act who does not comply with the limita-
tion under paragraph (1), the public housing agency 
or project owner may delay eviction or termination of 
the family based on such noncompliance for a period 
of not more than 6 months.’’. 
SEC. 105. UNITS OWNED BY PUBLIC HOUSING AGENCIES. 
Paragraph (11) of section 8(o) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(o)(11)) is amend-
ed— 
(1) by striking ‘‘(11) LEASING OF UNITS OWNED 
BY PHA.—If’’ and inserting the following: 
‘‘(11) LEASING OF UNITS OWNED BY PHA.— 
‘‘(A) INSPECTIONS AND RENT DETERMINA-
TIONS.—If’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) UNITS OWNED BY PHA.—For purposes 
of this subsection, the term ‘owned by a public 
housing agency’ means, with respect to a dwell-
ing unit, that the dwelling unit is in a project 
that is owned by such agency, by an entity whol-
ly controlled by such agency, or by a limited li-
ability company or limited partnership in which 
such agency (or an entity wholly controlled by 
such agency) holds a controlling interest in the 
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managing member or general partner. A dwell-
ing unit shall not be deemed to be owned by a 
public housing agency for purposes of this sub-
section because the agency holds a fee interest as 
ground lessor in the property on which the unit 
is situated, holds a security interest under a 
mortgage or deed of trust on the unit, or holds 
a non-controlling interest in an entity which 
owns the unit or in the managing member or 
general partner of an entity which owns the 
unit.’’. 
SEC. 106. PHA PROJECT-BASED ASSISTANCE. 
(a) IN GENERAL.—Paragraph (13) of section 8(o) of 
the United States Housing Act of 1937 (42 U.S.C. 
1437f(o)(13)) is amended— 
(1) by striking ‘‘structure’’ each place such term 
appears and inserting ‘‘project’’; 
(2) by striking subparagraph (B) and inserting 
the following new subparagraph: 
‘‘(B) PERCENTAGE LIMITATION.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), a public housing agency may use for 
project-based assistance under this para-
graph not more than 20 percent of the au-
thorized units for the agency. 
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‘‘(ii) EXCEPTION.—A public housing 
agency may use up to an additional 10 per-
cent of the authorized units for the agency 
for project-based assistance under this para-
graph, to provide units that house individ-
uals and families that meet the definition of 
homeless under section 103 of the McKin-
ney-Vento Homeless Assistance Act (42 
U.S.C. 11302), that house families with vet-
erans, that provide supportive housing to 
persons with disabilities or elderly persons, 
or that are located in areas where vouchers 
under this subsection are difficult to use, as 
specified in subparagraph (D)(ii)(II). Any 
units of project-based assistance that are at-
tached to units previously subject to feder-
ally required rent restrictions or receiving 
another type of long-term housing subsidy 
provided by the Secretary shall not count 
toward the percentage limitation under 
clause (i) of this subparagraph. The Sec-
retary may, by regulation, establish addi-
tional categories for the exception under this 
clause.’’; 
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(3) by striking subparagraph (D) and inserting 
the following new subparagraph: 
‘‘(D) INCOME-MIXING REQUIREMENT.— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (ii), not more than the greater of 
25 dwelling units or 25 percent of the dwell-
ing units in any project may be assisted 
under a housing assistance payment con-
tract for project-based assistance pursuant 
to this paragraph. For purposes of this sub-
paragraph, the term ‘project’ means a single 
building, multiple contiguous buildings, or 
multiple buildings on contiguous parcels of 
land. 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) 
CERTAIN
FAMILIES.—The 
limitation under clause (i) shall not 
apply to dwelling units assisted under 
a contract that are exclusively made 
available to elderly families or to 
households eligible for supportive serv-
ices that are made available to the as-
sisted residents of the project, accord-
ing to standards for such services the 
Secretary may establish. 
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‘‘(II) CERTAIN AREAS.—With re-
spect to areas in which tenant-based 
vouchers for assistance under this sub-
section are difficult to use, as deter-
mined by the Secretary, and with re-
spect to census tracts with a poverty 
rate of 20 percent or less, clause (i) 
shall be applied by substituting ‘40 
percent’ for ‘25 percent’, and the Sec-
retary may, by regulation, establish 
additional conditions. 
‘‘(III) CERTAIN CONTRACTS.—The 
limitation under clause (i) shall not 
apply with respect to contracts or re-
newal of contracts under which a 
greater percentage of the dwelling units 
in a project were assisted under a 
housing assistance payment contract 
for project-based assistance pursuant to 
this paragraph on the date of the en-
actment of the Housing Opportunity 
Through Modernization Act of 2015. 
‘‘(IV) CERTAIN
PROPERTIES.— 
Any units of project-based assistance 
under this paragraph that are attached 
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to units previously subject to federally 
required rent restrictions or receiving 
other project-based assistance provided 
by the Secretary shall not count to-
ward the percentage limitation im-
posed by this subparagraph (D). 
‘‘(iii) ADDITIONAL
MONITORING
AND 
OVERSIGHT
REQUIREMENTS.—The 
Sec-
retary may establish additional require-
ments for monitoring and oversight of 
projects in which more than 40 percent of 
the dwelling units are assisted under a 
housing assistance payment contract for 
project-based assistance pursuant to this 
paragraph.’’; 
(4) by striking subparagraph (F) and inserting 
the following new subparagraph: 
‘‘(F) CONTRACT TERM.— 
‘‘(i) TERM.—A housing assistance pay-
ment contract pursuant to this paragraph 
between a public housing agency and the 
owner of a project may have a term of up 
to 20 years, subject to— 
‘‘(I) the availability of sufficient 
appropriated funds for the purpose of 
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renewing expiring contracts for assist-
ance payments, as provided in appro-
priation Acts and in the agency’s an-
nual contributions contract with the 
Secretary, provided that in the event of 
insufficient appropriated funds, pay-
ments due under contracts under this 
paragraph shall take priority if other 
cost-saving measures that do not re-
quire the termination of an existing 
contract are available to the agency; 
and 
‘‘(II) compliance with the inspec-
tion requirements under paragraph 
(8), except that the agency shall not be 
required to make biennial inspections 
of each assisted unit in the develop-
ment. 
‘‘(ii) ADDITION OF ELIGIBLE UNITS.— 
Subject to the limitations of subparagraphs 
(B) and (D), the agency and the owner may 
add eligible units within the same project to 
a housing assistance payments contract at 
any time during the term thereof without 
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being subject to any additional competitive 
selection procedures. 
‘‘(iii) HOUSING UNDER CONSTRUCTION 
OR
RECENTLY
CONSTRUCTED.—An agency 
may enter into a housing assistance pay-
ments contract with an owner for any unit 
that does not qualify as existing housing 
and is under construction or recently has 
been constructed whether or not the agency 
has executed an agreement to enter into a 
contract with the owner, provided that the 
owner demonstrates compliance with appli-
cable requirements prior to execution of the 
housing assistance payments contract. This 
clause shall not subject a housing assistance 
payments contract for existing housing 
under this paragraph to such requirements 
or otherwise limit the extent to which a unit 
may be assisted as existing housing. 
‘‘(iv) ADDITIONAL
CONDITIONS.—The 
contract may specify additional conditions, 
including with respect to continuation, ter-
mination, or expiration, and shall specify 
that upon termination or expiration of the 
contract without extension, each assisted 
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family may elect to use its assistance under 
this subsection to remain in the same 
project if its unit complies with the inspec-
tion requirements under paragraph (8), the 
rent for the unit is reasonable as required 
by paragraph (10)(A), and the family pays 
its required share of the rent and the 
amount, if any, by which the unit rent (in-
cluding the amount allowed for tenant-based 
utilities) exceeds the applicable payment 
standard.’’; 
(5) in subparagraph (G), by striking ‘‘15 years’’ 
and inserting ‘‘20 years’’; 
(6) by striking subparagraph (I) and inserting 
the following new subparagraph: 
‘‘(I) RENT ADJUSTMENTS.—A housing as-
sistance payments contract pursuant to this 
paragraph entered into after the date of the en-
actment of the Housing Opportunity Through 
Modernization Act of 2015 shall provide for an-
nual rent adjustments upon the request of the 
owner, except that— 
‘‘(i) by agreement of the parties, a con-
tract may allow a public housing agency to 
adjust the rent for covered units using an 
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operating cost adjustment factor established 
by the Secretary pursuant to section 524(c) 
of the Multifamily Assisted Housing Reform 
and Affordability Act of 1997 (which shall 
not result in a negative adjustment), in 
which case the contract may require an ad-
ditional adjustment, if requested, up to the 
reasonable rent periodically during the term 
of the contract, and shall require such an 
adjustment, if requested, upon extension 
pursuant to subparagraph (G); 
‘‘(ii) the adjusted rent shall not exceed 
the maximum rent permitted under sub-
paragraph (H); 
‘‘(iii) the contract may provide that 
the maximum rent permitted for a dwelling 
unit shall not be less than the initial rent 
for the dwelling unit under the initial hous-
ing assistance payments contract covering 
the units; and 
‘‘(iv) the provisions of subsection 
(c)(2)(C) shall not apply.’’; 
(7) in subparagraph (J)— 
(A) in the first sentence— 
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(i) by striking ‘‘shall’’ and inserting 
‘‘may’’; and 
(ii) by inserting before the period the 
following: ‘‘or may permit owners to select 
applicants from site-based waiting lists as 
specified in this subparagraph’’; 
(B) by striking the third sentence and in-
serting the following: ‘‘The agency or owner may 
establish preferences or criteria for selection for 
a unit assisted under this paragraph that are 
consistent with the public housing agency plan 
for the agency approved under section 5A and 
that give preference to families who qualify for 
voluntary services, including disability-specific 
services, offered in conjunction with assisted 
units.’’; and 
(C) by striking the fifth and sixth sentences 
and inserting the following: ‘‘A public housing 
agency may establish and utilize procedures for 
owner-maintained site-based waiting lists, under 
which applicants may apply at, or otherwise 
designate to the public housing agency, the 
project or projects in which they seek to reside, 
except that all eligible applicants on the waiting 
list of an agency for assistance under this sub-
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section shall be permitted to place their names 
on such separate list, subject to policies and pro-
cedures established by the Secretary. All such 
procedures shall comply with title VI of the Civil 
Rights Act of 1964, the Fair Housing Act, sec-
tion 504 of the Rehabilitation Act of 1973, and 
other applicable civil rights laws. The owner or 
manager of a project assisted under this para-
graph shall not admit any family to a dwelling 
unit assisted under a contract pursuant to this 
paragraph other than a family referred by the 
public housing agency from its waiting list, or 
a family on a site-based waiting list that com-
plies with the requirements of this subparagraph. 
A public housing agency shall disclose to each 
applicant all other options in the selection of a 
project in which to reside that are provided by 
the public housing agency and are available to 
the applicant.’’; 
(8) in subparagraph (M)(ii), by inserting before 
the period at the end the following: ‘‘relating to fund-
ing other than housing assistance payments’’; and 
(9) by adding at the end the following new sub-
paragraphs: 
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‘‘(N) STRUCTURE OWNED BY AGENCY.—A 
public housing agency engaged in an initiative 
to improve, develop, or replace a public housing 
property or site may attach assistance to an ex-
isting, newly constructed, or rehabilitated struc-
ture in which the agency has an ownership in-
terest or which the agency has control of without 
following a competitive process, provided that the 
agency has notified the public of its intent 
through its public housing agency plan and sub-
ject to the limitations and requirements of this 
paragraph. 
‘‘(O) SPECIAL
PURPOSE
VOUCHERS.—A 
public housing agency that administers vouchers 
authorized under subsection (o)(19) or (x) of this 
section may provide such assistance in accord-
ance with the limitations and requirements of 
this paragraph, without additional requirements 
for approval by the Secretary.’’. 
(b) EFFECTIVE DATE.—The Secretary of Housing and 
Urban Development shall issue notice or regulations to im-
plement subsection (a) of this section and such subsection 
shall take effect upon such issuance. 
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SEC. 107. ESTABLISHMENT OF FAIR MARKET RENT. 
(a) IN GENERAL.—Paragraph (1) of section 8(c) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(c)(1)) 
is amended— 
(1) by inserting ‘‘(A)’’ after the paragraph des-
ignation; 
(2) by striking the fourth, seventh, eighth, and 
ninth sentences; and 
(3) by adding at the end the following: 
‘‘(B) Fair market rentals for an area shall be pub-
lished not less than annually by the Secretary on the site 
of the Department on the World Wide Web and in any other 
manner specified by the Secretary. Notice that such fair 
market rentals are being published shall be published in the 
Federal Register, and such fair market rentals shall become 
effective no earlier than 30 days after the date of such publi-
cation. The Secretary shall establish a procedure for public 
housing agencies and other interested parties to comment 
on such fair market rentals and to request, within a time 
specified by the Secretary, reevaluation of the fair market 
rentals in a jurisdiction before such rentals become effective. 
The Secretary shall cause to be published for comment in 
the Federal Register notices of proposed material changes 
in the methodology for estimating fair market rentals and 
notices specifying the final decisions regarding such pro-
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posed substantial methodological changes and responses to 
public comments.’’. 
(b) PAYMENT STANDARD.—Subparagraph (B) of sec-
tion 8(o)(1) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(o)(1)(B)) is amended by inserting before the 
period at the end the following: ‘‘, except that no public 
housing agency shall be required as a result of a reduction 
in the fair market rental to reduce the payment standard 
applied to a family continuing to reside in a unit for which 
the family was receiving assistance under this section at 
the time the fair market rental was reduced. The Secretary 
shall allow public housing agencies to request exception 
payment standards within fair market rental areas subject 
to criteria and procedures established by the Secretary’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect upon the date of the enactment of 
this Act. 
SEC. 108. COLLECTION OF UTILITY DATA. 
Section 8(o) of the United States Housing Act of 1937 
(42 U.S.C. 1437f(o)) is amended by adding at the end the 
following new paragraph: 
‘‘(20) COLLECTION OF UTILITY DATA.— 
‘‘(A) PUBLICATION.—The Secretary shall, to 
the extent that data can be collected cost effec-
tively, regularly publish such data regarding 
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utility consumption and costs in local areas as 
the Secretary determines will be useful for the es-
tablishment of allowances for tenant-paid utili-
ties for families assisted under this subsection. 
‘‘(B) USE OF DATA.—The Secretary shall 
provide such data in a manner that— 
‘‘(i) avoids unnecessary administrative 
burdens for public housing agencies and 
owners; and 
‘‘(ii) protects families in various unit 
sizes and building types, and using various 
utilities, from high rent and utility cost 
burdens relative to income.’’. 
SEC. 109. PUBLIC HOUSING CAPITAL AND OPERATING 
FUNDS. 
(a) CAPITAL FUND REPLACEMENT RESERVES.—Sec-
tion 9 of the United States Housing Act of 1937 (42 U.S.C. 
1437g) is amended— 
(1) in subsection (j), by adding at the end the 
following new paragraph: 
‘‘(7) TREATMENT OF REPLACEMENT RESERVE.— 
The requirements of this subsection shall not apply to 
funds held in replacement reserves established pursu-
ant to subsection (n).’’; and 
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(2) by adding at the end the following new sub-
section: 
‘‘(n) 
ESTABLISHMENT
OF
REPLACEMENT
RE-
SERVES.— 
‘‘(1) IN GENERAL.—Public housing agencies shall 
be permitted to establish a replacement reserve to 
fund any of the capital activities listed in subsection 
(d)(1). 
‘‘(2) SOURCE AND AMOUNT OF FUNDS FOR RE-
PLACEMENT RESERVE.—At any time, a public hous-
ing agency may deposit funds from such agency’s 
Capital Fund into a replacement reserve, subject to 
the following: 
‘‘(A) At the discretion of the Secretary, pub-
lic housing agencies may transfer and hold in a 
replacement reserve funds originating from addi-
tional sources. 
‘‘(B) No minimum transfer of funds to a re-
placement reserve shall be required. 
‘‘(C) At any time, a public housing agency 
may not hold in a replacement reserve more than 
the amount the public housing authority has de-
termined necessary to satisfy the anticipated 
capital needs of properties in its portfolio as-
sisted under this section, as outlined in its Cap-
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ital Fund 5-Year Action Plan, or a comparable 
plan, as determined by the Secretary. 
‘‘(D) The Secretary may establish, by regu-
lation, a maximum replacement reserve level or 
levels that are below amounts determined under 
subparagraph (C), which may be based upon the 
size of the portfolio assisted under this section or 
other factors. 
‘‘(3) TRANSFER OF OPERATING FUNDS.—In first 
establishing a replacement reserve, the Secretary may 
allow public housing agencies to transfer more than 
20 percent of its operating funds into its replacement 
reserve. 
‘‘(4) EXPENDITURE.—Funds in a replacement 
reserve may be used for purposes authorized by sub-
section (d)(1) and contained in its Capital Fund 5- 
Year Action Plan. 
‘‘(5) MANAGEMENT AND REPORT.—The Secretary 
shall establish appropriate accounting and reporting 
requirements to ensure that public housing agencies 
are spending funds on eligible projects and that funds 
in the replacement reserve are connected to capital 
needs.’’. 
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(1) in paragraph (2)(B)— 
(A) by striking ‘‘18 months’’ and inserting 
‘‘36 months’’; 
(B) by striking ‘‘21 years of age’’ and in-
serting ‘‘24 years of age’’; and 
(C) by inserting after ‘‘have left foster care’’ 
the following: ‘‘, or will leave foster care within 
90 days, in accordance with a transition plan 
described in section 475(5)(H) of the Social Se-
curity Act, and is homeless or is at risk of be-
coming homeless’’; 
(2) by redesignating paragraph (4) as para-
graph (5); and 
(3) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) COORDINATION BETWEEN PUBLIC HOUSING 
AGENCIES AND PUBLIC CHILD WELFARE AGENCIES.— 
The Secretary shall, not later than the expiration of 
the 180-day period beginning on the date of the enact-
ment of the Housing Opportunity Through Mod-
ernization Act of 2015 and after consultation with 
other appropriate Federal agencies, issue guidance to 
improve coordination between public housing agencies 
and public child welfare agencies in carrying out the 
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program under this subsection, which shall provide 
guidance on— 
‘‘(A) identifying eligible recipients for as-
sistance under this subsection; 
‘‘(B) coordinating with other local youth 
and family providers in the community and 
participating in the Continuum of Care program 
established under subtitle C of title IV of the 
McKinney-Vento Homeless Assistance Act (42 
U.S.C. 11381 et seq.); 
‘‘(C) implementing housing strategies to as-
sist eligible families and youth; 
‘‘(D) aligning system goals to improve out-
comes for families and youth and reducing lapses 
in housing for families and youth; and 
‘‘(E) identifying resources that are available 
to eligible families and youth to provide sup-
portive services available through parts B and E 
of title IV of the Social Security Act (42 U.S.C. 
621 et seq.; 670 et seq.) or that the head of house-
hold of a family or youth may be entitled to re-
ceive under section 477 of the Social Security 
Act (42 U.S.C. 677).’’. 
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TITLE II—RURAL HOUSING 
SEC. 201. DELEGATION OF GUARANTEED RURAL HOUSING 
LOAN APPROVAL. 
Subsection (h) of section 502 of the Housing Act of 
1949 (42 U.S.C. 1472(h)) is amended by adding at the end 
the following new paragraph: 
‘‘(18) DELEGATION
OF
APPROVAL.—The Sec-
retary may delegate, in part or in full, the Sec-
retary’s authority to approve and execute binding 
Rural Housing Service loan guarantees pursuant to 
this subsection to certain preferred lenders, in accord-
ance with standards established by the Secretary.’’. 
TITLE III—FHA MORTGAGE IN-
SURANCE 
FOR 
CONDOMIN-
IUMS 
SEC. 301. MODIFICATION OF FHA REQUIREMENTS FOR 
MORTGAGE INSURANCE FOR CONDOMINIUMS. 
Section 203 of the National Housing Act (12 U.S.C. 
1709) is amended by adding at the end the following new 
subsection: 
‘‘(y) REQUIREMENTS
FOR MORTGAGES
FOR CON-
DOMINIUMS.— 
‘‘(1) 
PROJECT
RECERTIFICATION
REQUIRE-
MENTS.—Notwithstanding any other law, regulation, 
or guideline of the Secretary, including chapter 2.4 of 
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the Condominium Project Approval and Processing 
Guide of the FHA, the Secretary shall streamline the 
project certification requirements that are applicable 
to the insurance under this section for mortgages for 
condominium projects so that recertifications are sub-
stantially less burdensome than certifications. The 
Secretary shall consider lengthening the time between 
certifications for approved properties, and allowing 
updating of information rather than resubmission. 
‘‘(2) COMMERCIAL SPACE REQUIREMENTS.—Not-
withstanding any other law, regulation, or guideline 
of the Secretary, including chapter 2.1.3 of the Condo-
minium Project Approval and Processing Guide of 
the FHA, in providing for exceptions to the require-
ment for the insurance of a mortgage on a condo-
minium property under this section regarding the 
percentage of the floor space of a condominium prop-
erty that may be used for nonresidential or commer-
cial purposes, the Secretary shall provide that— 
‘‘(A) any request for such an exception and 
the determination of the disposition of such re-
quest may be made, at the option of the re-
quester, under the direct endorsement lender re-
view and approval process or under the HUD re-
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view and approval process through the applica-
ble field office of the Department; and 
‘‘(B) in determining whether to allow such 
an exception for a condominium property, fac-
tors relating to the economy for the locality in 
which such project is located or specific to 
project, including the total number of family 
units in the project, shall be considered. 
Not later than the expiration of the 90-day period be-
ginning on the date of the enactment of this para-
graph, the Secretary shall issue regulations to imple-
ment this paragraph, which shall include any stand-
ards, training requirements, and remedies and pen-
alties that the Secretary considers appropriate. 
‘‘(3) TRANSFER
FEES.—Notwithstanding any 
other law, regulation, or guideline of the Secretary, 
including chapter 1.8.8 of the Condominium Project 
Approval and Processing Guide of the FHA and sec-
tion 203.41 of the Secretary’s regulations (24 C.F.R. 
203.41), existing standards of the Federal Housing 
Finance Agency relating to encumbrances under pri-
vate transfer fee covenants shall apply to the insur-
ance of mortgages by the Secretary under this section 
to the same extent and in the same manner that such 
standards apply to the purchasing, investing in, and 
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otherwise dealing in mortgages by the Federal Na-
tional Mortgage Association and the Federal Home 
Loan Mortgage Corporation. If the provisions of part 
1228 of the Director of the Federal Housing Finance 
Agency’s regulations (12 C.F.R. part 1228) are 
amended or otherwise changed after the date of the en-
actment of this paragraph, the Secretary of Housing 
and Urban Development shall adopt any such amend-
ments or changes for purposes of this paragraph, un-
less the Secretary causes to be published in the Fed-
eral Register a notice explaining why the Secretary 
will disregard such amendments or changes within 90 
days after the effective date of such amendments or 
changes. 
‘‘(4) OWNER-OCCUPANCY REQUIREMENT.— 
‘‘(A) ESTABLISHMENT OF PERCENTAGE RE-
QUIREMENT.—Not later than the expiration of 
the 90-day period beginning on the date of the 
enactment of this paragraph, the Secretary shall, 
by rule, notice, or mortgagee letter, issue guid-
ance regarding the percentage of units that must 
be occupied by the owners as a principal resi-
dence or a secondary residence (as such terms 
are defined by the Secretary), or must have been 
sold to owners who intend to meet such occu-
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