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SEC. 324. None of the funds appropriated or other-
wise made available by this Act or any other Act may be 
used to develop or impose policies or procedures, including 
an account structure, that subjects the Government Na-
tional Mortgage Association to the requirements of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). 
This section shall not be construed to exempt that entity 
from credit subsidy budgeting or from budget presentation 
requirements previously adopted. 
SEC. 325. (a) Paragraph (2) of section 203(b) of the 
National Housing Act (12 U.S.C. 1709(b)(2)) is amend-
ed— 
(1) in subparagraph (A)— 
(A) by striking the subparagraph designa-
tion and all that follows through the end of 
clause (i) and inserting the following: 
‘‘(A) not to exceed the lesser of— 
‘‘(i) the median house price in the 
area, as determined by the Secretary; or’’; 
(B) in clause (ii)— 
(i) by striking ‘‘87 percent of’’; 
(ii) by striking ‘‘for Fiscal Year’’ and 
inserting a comma; and 
(iii) by striking ‘‘48 percent’’ and in-
serting ‘‘65 percent’’; and 
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HR 5576 RFS 
(2) by striking subparagraph (B) and inserting 
the following: 
‘‘(B) not to exceed the appraised value of 
the property, plus any initial service charges, 
appraisal, inspection and other fees in connec-
tion with the mortgage as approved by the Sec-
retary.’’; 
(b) Paragraph (9) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(9) is amended by strik-
ing the paragraph designation and all that follows through 
‘‘Provided further, That for’’ and inserting the following: 
‘‘(9) Be executed by a mortgagor who shall 
have paid on account of the property, in cash or its 
equivalent, an amount, if any, as the Secretary may 
determine based on factors determined by the Sec-
retary and commensurate with the likelihood of de-
fault. For’’. 
(c) Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)) is amended— 
(1) in paragraph (2), in the matter preceding 
subparagraph (A), by striking ‘‘Notwithstanding’’ 
and inserting ‘‘Except as provided in paragraph (3) 
and notwithstanding’’; and 
(2) by adding at the end the following new 
paragraph: 
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‘‘(3) FLEXIBLE RISK-BASED PREMIUMS.— 
‘‘(A) IN GENERAL.—For any mortgage insured 
by the Secretary under this title that is secured by 
a 1- to 4-family dwelling and for which the loan ap-
plication is received by the mortgagor on or after 
October 1, 2006, the Secretary may establish a 
mortgage insurance premium structure involving a 
single premium payment collected prior to the insur-
ance of the mortgage or periodic payments, or both, 
without regard to any maximum or minimum pre-
mium amounts set forth in this subsection. The rate 
of premium for such a mortgage may vary during 
the mortgage term as long as the basis for deter-
mining the variable rate is established before the 
execution of the mortgage. The Secretary may 
change a premium structure established under this 
subparagraph 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. 
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‘‘(C) CONSIDERATIONS FOR PREMIUM STRUC-
TURE.—When establishing a premium structure 
under subparagraph (A) or when changing such a 
premium structure, the Secretary shall consider the 
following: 
‘‘(i) The effect of the proposed premium 
structure on the Secretary’s ability to meet the 
operational goals of the Mutual Mortgage In-
surance Fund as provided in section 202(a). 
‘‘(ii) Underwriting variables. 
‘‘(iii) The extent to which new pricing 
under the proposed premium structure has po-
tential for acceptance in the private market. 
‘‘(iv) The administrative capability of the 
Secretary to administer the proposed premium 
structure. 
‘‘(v) The effect of the proposed premium 
structure on the Secretary’s ability to maintain 
the availability of mortgage credit and provide 
stability to mortgage markets.’’. 
(d) Section 255 of the National Housing Act (12 
U.S.C. 1715z–20) is amended— 
(1) in subsection (g)— 
(A) by striking the first sentence; and 
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(B) by striking ‘‘established under section 
203(b)(2)’’ and all that follows through ‘‘lo-
cated’’ and inserting ‘‘limitation established 
under section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act for a 1-family 
residence’’; and 
(2) in subsection (i)(1)(C), by striking ‘‘limita-
tions’’ and inserting ‘‘limitation’’. 
(e) The Secretary of Housing and Urban Develop-
ment shall by notice establish any additional requirements 
that may be necessary to immediately carry out the provi-
sions of this section. The notice shall take effect upon 
issuance. 
(f) In addition to amounts otherwise made available 
by this Act, $10,000,000 for administrative contract ex-
penses, including amounts to be transferred to the Work-
ing Capital Fund, for Federal Housing Administration 
program and systems development for single family mort-
gage insurance. 
SEC. 326. Notwithstanding any other provision of 
law, the cities of Alton, Illinois, and Granite City, Illinois, 
shall be considered metropolitan cities, for purposes of 
title I of the Housing and Community Development Act 
of 1974 (42 U.S.C. 5301 et seq.), for a period of time 
not less than the time period covered by the enactment 
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